the new market reality wireless data networks scott wickware director, umts product solutions
DESCRIPTION
The New Market Reality Wireless Data Networks Scott Wickware Director, UMTS Product Solutions. Nortel Networks Industry Leader and Innovator. US $17.5B in Revenue in 2001 Customers in over 150 countries US $3.2B in R&D in 2001 1/3 of employees are engineers, designers & scientists - PowerPoint PPT PresentationTRANSCRIPT
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The New Market RealityWireless Data Networks
Scott WickwareDirector, UMTS Product Solutions
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• US $17.5B in Revenue in 2001
• Customers in over 150 countries
• US $3.2B in R&D in 2001
• 1/3 of employees are engineers, designers & scientists
• Leadership Categories (HQ in Brampton, Canada)• Wireless Networks (Châteaufort, France)
• Wireline Networks (Richardson , Texas, USA)
• Optical Networks (Montréal, Québec, Canada)
• Enterprise Networks (Santa Clara, California, USA)
Nortel NetworksIndustry Leader and Innovator
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Wireless Data Market Drivers
North AmericaWireless Sub & MOU Growth
Wireless Revenue GrowthInternet Users Flat – 182M
OverallSubscribers still growingVoice traffic still growing
Wireless Data traffic risingInternet Usage rising (18% annually)
Nua Internet SurveysNua Internet Surveys
South AmericaWireless Sub GrowthLowest Cost Service
Strong Internet Growth – 33M
EuropeWireless Growth FlatWireless Data Growth
Internet Growth 20%+ - 190M
AsiaWireless Sub GrowthWireless Data Growth
Internet Growth 20% - 187M
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Network & Traffic Growth Examples
Revenues & Subs growing - MOU growing faster
0%
50%
100%
150%
1H 01 2H 01 1H 02
1H02 Revenue $37B
0%
50%
100%
150%
1H 01 2H 01 1H 02
1H02 Subs 134M
0%
50%
100%
150%
1H 01 2H 01 1H 02
1H02 MOU 296M
0%
50%
100%
150%
1H 01 2H 01 1H 02
Global Internet - # of Hosts• >25% annual growth• Exceeds 162M globally
CTIACTIA
ISCISC
US Wireless in 1H 2002
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The New Reality: Access is Wireless
0
500
1,000
1,500
2,000
2,500
82 84 86 88 90 92 94 96 98 00 02 04
Mobile now exceeds Fixed in almost 100 countries
MobileDevices
FixedDevices
Source: ITU, 2001
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Traffic & Revenue Don’t Match
Source: Nortel & analyst estimates
0
2
4
6
8
10
12
14
16
1999 2000 2001E 2002E 2003E 2004E 2005E
IP
Private (mixed)
Switched non-IPData
LD Voice
US Backbone Traffic (Exabytes)
0
50
100
150
200
250
300
350
400
2000 2001 2002 2003 2004 2005
Asia
CALA
EMEA
North America
Millions of Mobile IP Users: Global
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
1999 2000 2001E 2002E 2003E 2004E 2005E
Wireline Data
Wireless Data
Wireless Voice
Wireline Voice
Total Service Revenue: US• Business Case is shifting
• Traffic is Data
• Revenues are Voice
• Volume is growing
• Low Service Cost is critical
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The End of the Voice ONLY Business Case
3G License Debt
Bandwidth Bubble
OverInvestment
Recession
Wireline VoiceAnalog & 2G Wireless
Voice Business Case
Voice Business Cycle is Ended
VoP and Packet Data2.5G and 3G Wireless
Voice & Data Business Case
Application BusinessCycle is Starting
Industry needs to redefine itself
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Fundamentals of the New Business Case
• Core Networks evolve to low cost Packet Architecture• Voice and data treated homogeneously
• Low cost broadband Wireless access• High mobility voice and thin applications
• Nomadic bandwidth-intensive applications
• Application Enablers• Service Management: making a business of applications
• Network Applications: building blocks to tap network capabilities
• Media Gateways: interfaces for multiple networks & traffic types
• Service Integration: support for third party apps and services
• Carrier Business Evolution• From Traffic management, to Retailing and Marketing
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Universal solution in the Core:Packet Transport & Switching
TelecomSynchronous / Circuit
Wireline / WirelessVoice Optimized
DatacomAsynchronous / Routed
Wireline / OpticalData Optimized
Nortel Packet CoreCarrier-Grade Platforms, Multi-Service
Switching & Optical Transport
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Broadband Wireless Access:Two Solution Sets – Mobile & Nomadic
Mobile Voice and<2Mbps Data2.5G / 3G network
Real-time voice & data applications
Ubiquitous coverage
Nomadic Data 2Mbps+
Best-effort data applications
Local coverage, Mbps speeds
Telecom / Voice Datacom / WLAN
Nortel Wireless AccessGPRS / EDGE / CDMA2000 /
UMTS / WLAN
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Applications Development & Delivery:Ecosystem Tools & Support
Network ApplicationsCommercial grade services such as VPN, Firewall, Security, VoP, Authentication, QoS, SIP, etc.
Media GatewaysApps built on industry standards
such as IMS for voice, data, & video; wireline and wireless
Service ManagementCommercialization services such as billing, metering, SLA support,
& ecommerce
Service IntegrationNetwork integration for third party servers and applications with core
network services
ApplicationsDeveloper driven such as MMS,
SMS, WAP, xTML, email etc.
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Nortel’s Value Proposition:Packet Traffic: End to End Care & Delivery
• Integrated Optical and Wireline packet transport networks
• Support for multiple services: IP, ATM, MPLS, etc.
• 1x CDMA upgrades, UMTS overlays for dense GSM/GPRS
• 802.11 PWLAN today, evolving to mesh extensions in future
• Support the creation, deployment, and billing of IP services
• Switch, route, repair, manage, secure & prioritize Packets
• Simple, high performance network elements
• Common across Optical, Wireline, and Wireless networks
Packet Core: low-cost, high performance connectivity
Efficient Access: matched to growth & usage
Service Enablers: supporting revenue creation & collection
Carrier-grade Platforms: Pre-engineered performance
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Market Update: Wireless Data Today
Sprint1x launched
Bell Mobility5k 1x data Subscribers
Verizon35k 1x data Subscribers
VodafoneSoft-launch
Vodafone live!
HutchisonSoft-launch
MobilkomSoft-launch
KTF / SKT / LG7.5M 1x data Subscribers
DoCoMo136k Foma Subscribers
KDDI805k 1x data Subscribers
Unicom1x Pilot
2.5M+ GPRS Subscribers16.7M+ 1xRTT Subscribers47 MMS networks launched
Stats as of 2Q02Stats as of 2Q02
Telesp / Telerj35k 1x data SubscribersSmartcom
1x launched
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Wireless Investment:2006
Other
CDMA/1x
GSM/GPRSUMTS
Other
CDMA/1x
GSM/GPRSUMTS
2006EGlobal
TechnologyMix
Other
CDMA/1x
GSM/GPRS
UMTS
Other
CDMA/1x
GSM/GPRS
UMTS
EMEA39% of market
Other
CDMA/1x
GSM/GPRS
UMTS
Other
CDMA/1x
GSM/GPRS
UMTS
CALA5% of market
Other
CDMA/1x
GSM/GPRS
UMTS
Other
CDMA/1x
GSM/GPRS
UMTS
North America18% of market
Other
CDMA/1x
GSM/GPRS
UMTS
Other
CDMA/1x
GSM/GPRS
UMTS
Developing Asia22% of marketOther
CDMA/1x
GSM/GPRS
UMTS
Other
CDMA/1x
GSM/GPRS
UMTS
Developed Asia15% of market
Black represents “other”Black represents “other”
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Nortel Networks and WirelessOther, $44
Optical$1,121
Enterprise$1,928
Wireless$3,199 Wireline
$1,748
2002 Contracts • China Unicom (4 - China)• Microcell (Canada)• Ufone (Pakistan)• Cingular (USA)• Telefonica (Spain)• TSTT (Trinidad)• ACS (USA)• O2 (Pan-Europe)• Dutchtone (Netherlands)• Pelephone (Israel)• T-Mobile (Pan-Europe)• Alltel (USA)• C&W (CALA)
• Ratelindo (Indonesia)• US Cellular (USA)• Triton PCS (USA)• Edge Wireless (USA)• Bellsouth Int’l (Ecuador)• China Mobile (2 - China)• Telgua (Guatemala)• Dobson (USA)• Centertel (Poland)• Smartcom PCS (Chile)• Aycell (Turkey)• Chunghwa (Taiwan)• Deutsche Bahn (Germany)• Vesper (Brazil)
2002 Q3 YTDRevenue
Mix
Nortel Revenue by Segment
$0
$5
$10
$15
$20
$25
$30
1999 2000 2001
US
$ B
illio
n OtherSegments
Wireless
• Stable Revenues from
• Global Diversity
• Multiple Product lines
• Services & Support
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Overtaking the Incumbents Top 6 Western Europe Operators
Top 6 WE Operators account for >75% of SubscribersVodafone - mmO2 - DT - Orange (FT) - TIM - Telefonica
Source: Nortel Networks Q3/02
Includes Industry Estimated Contract Values
62%
28%
28%
14%
21%21%
52%
Nortel
Nokia
Ericsson
Siemens
Motorola
Lucent
Alcatel29%
26%
9%34%
49%
2G Network Presence 3G Network Presence
Nortel Networks is the only vendor to increase presence as advanced networks are deployed
Totals >100% due to multi-vendor networks
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Nortel Networks Wireless Presence
AT&TAT&T WirelessWireless
TelusTelus
Sprint PCSSprint PCS
BellBell MobilityMobility
TelstraTelstra
CingularCingular
VoiceStreamVoiceStream
ChinaChina UnicomUnicom
ChinaChina MobileMobile
ChungHwaChungHwa
OrangeOrange
O2O2T-MobileT-Mobile
VerizonVerizonVodafoneVodafone
Anticipating gains as Wireless Data Networks continue to roll outCapitalizing on global diversity, and multi-technology portfolio
Winning new business with Optical & Multi-service market leadershipDemonstrated end-to-end IP expertise
TelefonicaTelefonica
NextelNextel
Bouygues TelecomBouygues Telecom
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