umts and hsdpa mobile computing -...

UMTS and HSDPA Mobile ComputingEurope 2006

www.berginsight.com

UMTS and HSDPA Mobile Computing by Tobias Ryberg

BERG INSIGHT RESEARCH TEAM

Tobias Ryberg, Senior Analyst

([email protected])

Johan Fagerberg, Senior Analyst

([email protected])

OFFICE

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Printed in Sweden in 2006

© Copyright 2006 Berg Insight,

All rights reserved

ABOUT THE AUTHOR

Tobias Ryberg is founding partner of Berg

Insight and senior analyst responsible for the

M2M research series. He is an experienced

analyst and author of numerous articles and

reports about IT and telecom for leading

Swedish and international publishers.

ACKNOWLEDGEMENTS

3GAmericas, Cingular Wireless, Flarion,

IPWireless, Option, Orange Group, Novatel

Wireless, Sierra Wireless, Sony Ericsson, T-

Mobile International, UMTS TDD Forum,

Vodafone Group, WiMAX Forum

The author wish to thank everyone who has

assisted him with the report.

UMTS AND HSDPA MOBILE COMPUTING INDEX

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Index

Table of Contents Table of Contents......................................................................................................................... i List of Figures............................................................................................................................. iv Executive summary.....................................................................................................................1 1 The European market for mobile computing ......................................................................3

1.1 Notebook PC market ....................................................................................................4 1.2 Handheld computer market .........................................................................................7 1.3 Computer vendor profiles.............................................................................................9

1.3.1 Acer .......................................................................................................................9 1.3.2 Apple ...................................................................................................................10 1.3.3 Dell ......................................................................................................................10 1.3.4 Fujitsu Siemens...................................................................................................11 1.3.5 HP........................................................................................................................11 1.3.6 Lenovo.................................................................................................................12 1.3.7 Medion.................................................................................................................12 1.3.8 NEC .....................................................................................................................12 1.3.9 Sony ....................................................................................................................13 1.3.10 Toshiba................................................................................................................13 1.3.11 Palm ....................................................................................................................14 1.3.12 Symbol ................................................................................................................15 1.3.13 Intermec ..............................................................................................................15 1.3.14 Psion-Teklogix .....................................................................................................16

2 Wireless broadband communication technologies...........................................................17 2.1 Wireless LAN technologies.........................................................................................17

2.1.1 802.11 legacy standards .....................................................................................18 2.1.2 Historical development........................................................................................18

2.2 Broadband wireless access technologies..................................................................19 2.2.1 FLASH-OFDM......................................................................................................21 2.2.2 UMTS TDD ..........................................................................................................22

INDEX UMTS AND HSDPA MOBILE COMPUTING

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2.2.3 WiMAX .................................................................................................................23 2.3 Mobile 3G technologies..............................................................................................24

2.3.1 UMTS...................................................................................................................25 2.3.2 HSDPA.................................................................................................................27 2.3.3 HSUPA.................................................................................................................28

2.4 Positioning HSDPA as a wireless broadband technology .........................................28 3 UMTS and HSDPA data solutions .....................................................................................31

3.1 3G packet switch bearer data services ......................................................................31 3.1.1 Session management .........................................................................................31 3.1.2 Network performance..........................................................................................32 3.1.3 Challenges and future developments .................................................................34

3.2 3G data devices..........................................................................................................36 3.2.1 PC cards..............................................................................................................37 3.2.2 Desktop modems................................................................................................38 3.2.3 Embedded modules............................................................................................39

3.3 UMTS/HSDPA PC card and desktop modem vendor profiles ...................................40 3.3.1 Novatel Wireless..................................................................................................40 3.3.2 Option..................................................................................................................42 3.3.3 Sierra Wireless.....................................................................................................44 3.3.4 Huawei.................................................................................................................45 3.3.5 Motorola ..............................................................................................................47 3.3.6 Seiko Instruments................................................................................................47 3.3.7 Sony Ericsson .....................................................................................................47

4 Market profiles: Western and Central Europe ...................................................................49 4.1 Austria.........................................................................................................................51 4.2 Belgium.......................................................................................................................52 4.3 Czech Republic ..........................................................................................................52 4.4 Denmark .....................................................................................................................53 4.5 Finland........................................................................................................................54 4.6 France.........................................................................................................................54 4.7 Germany .....................................................................................................................55 4.8 Greece ........................................................................................................................57


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4.9 Hungary ......................................................................................................................58 4.10 Ireland .....................................................................................................................59 4.11 Italy..........................................................................................................................60 4.12 The Netherlands......................................................................................................61 4.13 Norway....................................................................................................................62 4.14 Poland.....................................................................................................................63 4.15 Portugal...................................................................................................................63 4.16 Slovakia...................................................................................................................64 4.17 Slovenia ..................................................................................................................65 4.18 Spain .......................................................................................................................65 4.19 Sweden ...................................................................................................................66 4.20 Switzerland..............................................................................................................67 4.21 UK ...........................................................................................................................67

5 Market forecast and strategic issues.................................................................................69 5.1 Potential market size ..................................................................................................69 5.2 UMTS and HSDPA broadband market forecasts.......................................................70

5.2.1 Can the WLAN success story be repeated? .......................................................71 5.2.2 PC card shipments forecast ................................................................................72 5.2.3 Embedded modules shipments forecast ............................................................73 5.2.4 UMTS and HSDPA mobile data services forecast ..............................................74

5.3 Market opportunity for mobile operators....................................................................76 5.3.1 Market segmentation...........................................................................................77 5.3.2 Pricing and conditions ........................................................................................77 5.3.3 Conclusions and strategic advice .......................................................................78

6 Operator strategies for 3G data services and HSDPA ......................................................81 6.1 3 Group.......................................................................................................................81 6.2 Cingular Wireless........................................................................................................82 6.3 O2................................................................................................................................84 6.4 Orange........................................................................................................................86 6.5 T-Mobile......................................................................................................................87 6.6 Vodafone ....................................................................................................................88

Glossary ....................................................................................................................................93


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Index

List of Figures Figure 1.1 – PC shipments (Worldwide 2002–2006) ..................................................................3 Figure 1.2 – Notebook PC shipments (Europe 2002–2006).......................................................4 Figure 1.3 – Notebook PC market statistics (EU-23+EFTA 2005) .............................................5 Figure 1.4 – PC vendor market shares, by region (Q2-2005).....................................................6 Figure 1.5 – Notebook PC vendor market shares (Europe, 2005) .............................................7 Figure 1.6 – Handheld computer shipments (Worldwide 2002–2006) .......................................8 Figure 1.7 – Handheld computer vendor market shares (Worldwide, 2005) .............................9 Figure 1.8 – Top notebook PC vendors, by country (Western and Central Europe, 2005) .....14 Figure 2.1 – 802.11 legacy standards overview .......................................................................18 Figure 2.2 – Number and share of notebooks shipped with WLAN (Europe 2002–2006) .......19 Figure 2.3 – European broadband wireless access network operators, by country................20 Figure 2.4 – Peak and average data rates for GSM family mobile technologies .....................25 Figure 2.5 – UMTS operators by country (EU23+EFTA, December 2005)..............................26 Figure 2.6 – Technical comparison of broadband technologies..............................................29 Figure 3.1 – 3G packet switch bearer service session management.......................................32 Figure 3.2 – HSDPA throughput rates ......................................................................................34 Figure 3.3 – HSDPA capacity per 3GPP category....................................................................37 Figure 3.4 – HSDPA PC cards for the European market ..........................................................38 Figure 3.5 – UMTS desktop modems for the European market...............................................39 Figure 3.6 – Novatel Wireless Merlin family of wireless PC cards ............................................42 Figure 3.7 – Option GlobeTrotter wireless PC cards ................................................................43 Figure 3.8 – 3G PC card brands, by operator (Western and Central Europe Q4-2005) ..........46 Figure 4.1 – Comparison of 3G data tariffs (Western and Central Europe, Q4-2005)..............50 Figure 4.2 – 3G data tariffs, Austria (Q4-2005) .........................................................................51 Figure 4.3 – 3G data tariffs, Belgium (Q4-2005) .......................................................................52 Figure 4.4 – 3G data tariffs, Denmark (Q4-2005)......................................................................53 Figure 4.5 – 3G data tariffs, Finland (Q4-2005).........................................................................54 Figure 4.6 – 3G data tariffs, France (Q4-2005) .........................................................................55


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Figure 4.7 – 3G data tariffs, Germany (Q4-2005)......................................................................56 Figure 4.8 – 3G data tariffs, Greece (Q4-2005).........................................................................58 Figure 4.9 – 3G data tariffs, Hungary (Q4-2005).......................................................................59 Figure 4.10 – 3G data tariffs, Ireland (Q4-2005) .......................................................................60 Figure 4.11 – 3G data tariffs, Italy (Q4-2005) ............................................................................61 Figure 4.12 – 3G data tariffs, the Netherlands (Q4-2005).........................................................62 Figure 4.13 – 3G data tariffs, Norway (Q4-2005) ......................................................................63 Figure 4.14 – 3G data tariffs, Portugal (Q4-2005).....................................................................64 Figure 4.15 – 3G data tariffs, Spain (Q4-2005) .........................................................................65 Figure 4.16 – 3G data tariffs, Sweden (Q4-2005) .....................................................................66 Figure 4.17 – 3G data tariffs, Switzerland (Q4-2005)................................................................67 Figure 4.18 – 3G data tariffs, UK (Q4-2005)..............................................................................68 Figure 5.1 – Notebook population and shipments forecast (Europe 2005–2009) ...................70 Figure 5.2 – Shipments of UMTS/HSDPA PC cards (Europe 2005–2009) ...............................72 Figure 5.3 – Shipments of notebooks with embedded HSDPA (Europe 2005–2009)..............74 Figure 5.4 – UMTS and HSDPA mobile data service subscribers (Europe 2005–2009)..........75 Figure 5.5 – UMTS and HSDPA mobile data service revenues (Europe 2005–2009)..............76 Figure 6.1 – Selected 3G data tariffs, 3 Group (Q4-2005) ........................................................82 Figure 6.2 – Cingular HSDPA PC data cards............................................................................83 Figure 6.3 – HSDPA data tariffs, Manx Telecom (Q4-2005) ....................................................84 Figure 6.4 – Surf@home pricing plan (Q4-2005)......................................................................85 Figure 6.5 – Subscriber growth for Vodafone MCC (Q4-2004–Q3-2005).................................89 Figure 6.6 – Vodafone MCC subscriptions, by country (August 2005) ....................................90


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UMTS AND HSDPA MOBILE COMPUTING SUMMARY

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Summary

Executive summary

PC cards for data communication were the first UMTS products that were launched on the

European market by leading operators such as T-Mobile and Vodafone. When introducing

HSDPA, PC cards are once again in focus. Mobile computing is a massive opportunity for

operators to improve data revenues in both the enterprise and consumer segments. Demand

will be supported by a fast growing target market. The worldwide PC market has displayed

double digit growth each year over the five latest years. PC sales in Western Europe and

Central Eastern Europe reached 47 million units and 13 million units respectively in 2005.

Sales of notebook PCs soared in 2005 and surpassed desktop sales for the first time in many

Western European markets. Altogether 24.5 million notebook PCs were shipped in Europe

during 2005, up by 50.3 percent from 16.3 million units in 2004. The total number of notebook

PCs less than three years old in use on the continent now exceeds 49.8 million units.

True wireless broadband is something like a holy grail for the telecom industry. Ultimately,

everyone agrees, any device should be connected to the Internet anywhere at any time. Ever

since wireless LAN broke out on the market in the late 1990s, countless plans have been

drafted to create seamless wide area wireless networks. In reality the task is most difficult to

accomplish. HSDPA is however in an excellent position to become a leading wireless

broadband technology on the European market. There are several reasons for this. First and

foremost, all competing technologies – e.g. HSDPA, FLASH-OFDM, UMTS TDD and WiMAX –

offer fairly similar performance in practice. Few customers will attain data rates higher than 1

Mbps in the near future using any commercial wireless network. HSDPA closes the gap in

bandwidth between existing UMTS data services offering peak data rates of 384 kbps and

BWA. When compared to consumer and enterprise DSL services, average download rates

are well in line with most mass market offerings.

SUMMARY UMTS AND HSDPA MOBILE COMPUTING


At the beginning of 2006, UMTS data services were provided by over 50 network operators

and service providers in Western and Central Europe. There are significant price differences

between markets, suggesting that pricing models have not yet reached full maturity. The

lowest average prices are found in Portugal and the Czech Republic where unlimited Internet

access over UMTS networks is available for less than € 30 per month. Due to strong demand

from customers, shipments of UMTS PC cards on the European market grew by an

astounding 160 percent in 2005 and reached around 1.3 million units. Vodafone Mobile

Connect Card surpassed 400,000 subscribers as of August 2004.

Operators on all five continents have initiated trials and deployments of HSDPA technology.

The first commercial networks were launched in late 2005 by Cingular Wireless in the US and

Manx Telecom on Isle of Man. HSDPA enables operators to leverage existing 3G wireless

broadband services with improved data rates and quality of service. 3, O2, Orange, T-Mobile,

Vodafone and other operators are expected to launch HSDPA on several European markets

starting from Q1-2006. HSDPA ready data cards were already available to customers in late

2005. Worldwide, commercial launches are expected in for instance Australia, Hong Kong,

Israel, Japan, Malaysia, Qatar, South Africa and South Korea. As the global number of active

3G data card now exceeds 1 million, a new profitable market niche has been firmly

established in the global wireless industry.

UMTS AND HSDPA MOBILE COMPUTING CHAPTER 1


Chapter 1

The European market for mobile

computing 1 The European market for mobile computing The worldwide PC market has displayed double digit growth each year over the five latest

years. Shipments have soared from 138.2 million units in 2002 to 195.4 million units in 2005

and are forecasted to reach 215.7 million units in 2006. Europe accounts for around 28

percent of the global market. PC sales in Western Europe and Central Eastern Europe

reached 47 million units and 13 million units respectively in 2005. Enterprises still account for

the larger share of sales, around 60 percent, while consumers stood for nearly 40 percent of

the total market volume.

Figure 1.1 – PC shipments (Worldwide 2002–2006)

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RoW

US

Europe

Source: Berg Insight

CHAPTER 1 UMTS AND HSDPA MOBILE COMPUTING


1.1 Notebook PC market

Mobility is one of the strongest trends in the computing industry. Sales of notebook PCs

soared in 2005 and surpassed desktop sales for the first time in many Western European

markets, as well as in the US. Altogether 24.5 million notebook PCs were shipped in Europe

during 2005, up by 50.3 percent from 16.3 million units in 2004. The total number of notebook

PCs less than three years old in use on the continent now exceeds 49.8 million units.

Figure 1.2 – Notebook PC shipments (Europe 2002–2006)

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40

2002 2003 2004 2005 2006

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Germany is the largest market for notebook PCs in Europe, followed by the UK and France.

Shipments on the German market reached 5.8 million units in 2005, compared to 4.2 million

units and 3.0 million units in the UK and France respectively. Italy recorded the highest share

of notebook PCs sold through the retail channel. Out of 4.4 million PCs shipped in the

country in 2005, 2.6 million were portable. It is expected that desktop computers will be in

minority in all countries in Western Europe during 2006. Portable devices however still

account for less than 30 percent of computers sold in Central and Eastern Europe.



Figure 1.3 – Notebook PC market statistics (EU-23+EFTA 2005)

Country PC sales Notebook sales Notebooks <3 years

Austria 936,000 541,000 1,078,000

Belgium 1204,000 520,000 1,231,000

Czech Republic 584,000 176,000 405,000

Denmark 1,027,000 467,000 1,023,000

Estonia 60,000 20,000 45,000

Finland 790,000 415,000 825,000

France 7,215,000 3,024,000 6,292,000

Germany 9,960,000 5,798,000 11,709,000

Greece 758,000 233,000 456,000

Hungary 447,000 135,000 310,000

Ireland 504,000 176,000 351,000

Italy 4,360,000 2,579,000 5,095,000

Latvia 90,000 30,000 52,000

Lithuania 140,000 40,000 61,000

Luxembourg 50,000 20,000 83,000

Netherlands 2,579,000 1,444,000 2,884,000

Norway 917,000 531,000 1,047,000

Poland 1,556,000 469,000 1,042,000

Portugal 612,000 297,000 584,000

Slovakia 220,000 60,000 125,000

Slovenia 80,000 20,000 55,000

Spain 3,140,000 1,846,000 3,661,000

Sweden 1,480,000 725,000 1,445,000

Switzerland 331,000 768,000 1,584,000

UK 9,395,000 4,162,000 8,341,000

Total 49,435,000 24,496,000 49,784,000




Dell, HP, Lenovo, Acer and Fujitsu/Fujitsu Siemens were the top five brands on the global PC

market in 2005. Dell was the largest vendor with a market share of around 18 percent,

followed by HP with around 16 percent. HP was number one in the EMEA region, while Dell

was dominant in the US market. Fast growing Acer and Fujitsu Siemens have significantly

larger market shares in the EMEA region than on the global market. Chinese Lenovo was a

new entrant to the top five, having acquired the PC division of IBM during the course of the

year. Price competition is fierce and industry profitability is under strain. Therefore additional

exits, mergers and acquisitions can be expected over the coming years.

Figure 1.4 – PC vendor market shares, by region (Q2-2005)

Vendor Worldwide EMEA

Dell 17.9 percent 13.0 percent

HP 14.6 percent 16.9 percent

Lenovo 7.2 percent 4.4 percent

Acer 4.3 percent 8.9 percent

Fujitsu Siemens 3.6 percent 7.2 percent


Through remarkable growth, Acer has established itself as the leading notebook PC vendor

on the European market with an estimated market share of 18.9 percent in 2005. HP ranked

as the second largest notebook PC vendor on the European market with an estimated market

share of 16.4 percent in 2005. Dell was the number three player with a market share of 12.1

percent, leading the markets in the UK and Ireland. Toshiba and Fujitsu Siemens were

number four and five with 9.0 percent and 8.3 percent respectively. Fujitsu Siemens ranks first

in both the notebook and desktop segments in Germany.



Figure 1.5 – Notebook PC vendor market shares (Europe, 2005)

Vendor Unit shipments Market share

Acer 4,605,000 18.9 percent

HP 3,992,000 16.4 percent

Dell 2,940,000 12.1 percent

Toshiba 2,180,000 9.0 percent

Fujitsu Siemens 2,009,000 8.3 percent

Others 8,589,000 35.3 percent

Total 24,315,000 100.0 percent

Source : Berg Insight

1.2 Handheld computer market

Global shipments of handheld computers have declined from 12.6 million units in 2002 to 7.6

million in 2005 and are forecasted to slip below the 7 million mark in 2006. Europe accounts

for around 30 percent of the worldwide market for handheld computers and a volume of

around 2.3 million units. The slipping trend is the result of intense competition from

smartphones and other special purpose non-voice centric devices such as Blackberry-style e-

mail terminals. Mobile phones have borrowed many of the features that were first introduced

on PDAs. Devices such as the Nokia 9000-series Communicator series and Sony Ericsson

P900-series are indeed hard to distinguish from PDAs by anything else than their telephony

capabilities. However there are some positive signs from the European consumer market that

grew significantly in 2005, driven by growing demand for GPS-enabled devices. This trend

did not influence the enterprise market that continued to contract in Europe as well as in the

rest of the world.



Figure 1.6 – Handheld computer shipments (Worldwide 2002–2006)

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2002 2003 2004 2005 2006

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Pioneer Palm, which changed back to its original company name in 2005, is retaining the

leading position in the diminishing handheld computer market. A worldwide market share of

34.1 percent in 2005 put Palm well ahead of the nearest rival HP with 23.0 percent. Acer has

taken the European handheld market by storm and is now number one on the continent and

number three in the world, just ahead of Dell. The two companies achieved worldwide market

shares of 10.2 percent and 10.1 percent respectively in 2005. Mio, the handheld division of

MiTAC emerged as the number five vendor with 4.1 percent of the global market. Outside of

the top five are the three leading suppliers of rugged PDAs – Symbol, Intermec and Psion-

Teklogix. Symbol ranked first in the rugged mobile computing market in 2004 with a share of

31.1 percent.



Figure 1.7 – Handheld computer vendor market shares (Worldwide, 2005)

Vendor Unit shipments Market share

Palm 2,583,000 34.1 percent

HP 1,743,000 23.0 percent

Acer 770,000 10.2 percent

Dell 763,000 10.1 percent

Mio 310,000 4.1 percent

Others 1,400,000 18.5 percent

Total 7,569,000 100.0 percent


1.3 Computer vendor profiles

All major vendors on the global PC market are represented in Europe. Local brands however

still hold on to significant market shares in some countries. The top seven PC vendors on the

European market offer a complete range of desktop, notebook and handheld products.

These are HP, Dell, Acer, Fujitsu Siemens, Lenovo, NEC and Medion. Number eight and ten –

Toshiba and Sony – have retired their PDA product families to concentrate entirely on

notebook PCs. Ninth-ranked Apple currently only offers desktops and notebooks, despite

recurring rumours about a coming PDA model. Besides the major PC vendors, there are

several specialists in the handheld market segment including Palm, Symbol and Psion-

Teklogix.

1.3.1 Acer

Founded in 1976 in Taiwan, Acer ranks among the world's top five branded PC vendors.

Having spun off its manufacturing operation in 2000, the company now focuses on

developing advanced, user-friendly solutions. Acer’s product range includes PC desktops

and notebooks, servers and storage systems, monitors, peripheral devices, digital devices,



LCD TVs and e-business solutions for business, government, education and home users.

Acer is the EMEA region leader in the notebook PC segment. In Q3-2005, Acer reported a

market share of 19.2 percent and an annual growth rate of 52.2 percent compared to 2004.

The company ranks first in the notebook market in 16 European countries: Italy, Spain,

France, Austria, the Netherlands, Switzerland, the Czech Republic, Russia, Romania,

Portugal, Belgium, Denmark, Poland, Hungary and Slovakia. Moreover Acer ranks as the

leading brand for handheld computers in the EMEA region. For the whole year 2005, Acer is

estimated to ship 4.6 million notebook PCs on the European market. Acer employs 5,400

people throughout the world and has created a consolidated sales and distribution network in

more than 100 countries. Revenues are expected to grow from € 5.4 billion in 2004 to reach €

7.6 billion in 2005.

1.3.2 Apple

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented

the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the

industry in innovation with its award-winning desktop and notebook computers, OS X

operating system, and iLife and professional applications. Apple is also spearheading the

digital music revolution with its iPod portable music players and iTunes online music store.

From 2006 the company will migrate from IBM to Intel microprocessors, thereby enabling

customers to run Windows on Macintosh computers. Apple has its main computer base in

the US where it ranked fifth in Q3-2005 with a market share of 4.4 percent. A 1.5 percent

market share in Europe barely puts Apple among the top ten vendors on the continent. For

the fiscal year ending 2005, the company reported a record turnover of US$ 13.4 billion (€

11.3 billion), reflecting an annual growth of 68 percent.

1.3.3 Dell

Dell was founded in 1984 by Michael Dell on a simple concept of selling computer systems

directly to customers. Over time the company has widened its range of products from

desktop and notebook PCs to network servers, workstations, handheld computers, printers

and other electronic accessories. Today, Dell is a diversified information-technology supplier

and partner, and sells a comprehensive portfolio of products and services directly to

customers worldwide. Having shipped an estimated 35 million PCs in 2005, Dell was the



world’s leading PC vendor with a global market share of 17.9 percent. Dell’s market shares in

the US and EMEA regions were 30.1 percent and 13.0 percent respectively. Around 2.9

million notebook PCs were shipped by Dell on the European market in 2005, which

corresponded to a market share of 12.0 percent. The company is the market leader in the

portable segment in the UK and Ireland. Revenues for the fiscal year ending 2005 were $ 49.2

billion (€ 41.7 billion) and the group employs approximately 63,700 people around the world.

1.3.4 Fujitsu Siemens

Fujitsu Siemens Computers was formed as a joint venture between Fujitsu and Siemens in

1999. Today it is the leading European IT provider with a strategic focus on mobility and

business critical computing products, services and solutions. The company’s offering extends

from high-performance servers and enterprise-class, company-wide storage solutions, to

PCs, notebooks, workstations, pen tablet PCs and handheld devices, along with digital home

technology. Fujitsu Siemens Computers has a strong presence in all key markets across

Europe, the Middle East and Africa. The company ranks first in Germany in both the desktop

and notebook segments. Totally Fujitsu Siemens Computers shipped around 2.0 million

notebook PCs on the European market in 2005, of which 55 percent were sold in Germany.

Revenues for the fiscal year ending 2005 were € 6 billion. The group employs about 6,000

people at manufacturing and development facilities in Germany and the US.

1.3.5 HP

Stanford University classmates Bill Hewlett and Dave Packard founded HP in a famous Palo

Alto garage in 1939. Nearly 70 years later HP has evolved into a technology solutions

provider to consumers, businesses and institutions globally. The company's offerings span IT

infrastructure, global services, business and home computing, and imaging and printing. For

the fiscal year ending 2005, HP revenue totalled US$ 86.7 billion (€ 73.5 billion). The group

employs 150,000 people in 170 countries worldwide. HP ranks as the world’s largest

consumer and small business IT company and was number two on the global PC market in

2005, when shipments reached 22.6 million units. During the same period, the company

supplied approximately 4.0 million notebook PCs on the European market and had a market

share of 16.3 percent. HP is number two behind Acer in many European markets and holds

the top position in Finland, Norway, Sweden and Greece.



1.3.6 Lenovo

Lenovo is an international technology company formed as a result of the acquisition by the

Lenovo group of the IBM Personal Computing division in May 2005. In 1981, IBM envisioned

the personal computer and eventually created both the first desktop PC and the first portable

computer. Later it created the highly successful ThinkPad series of notebook PCs. Lenovo

was founded under the name of Legend in China in 1984 and was the first company to

introduce PCs to households in the country. In 2003, Legend changed its brand name to

Lenovo. Following the acquisition of IBM’s PC division, Lenovo has become the world’s third

largest PC vendor and shipped approximately 14.1 million units, which corresponded to a

market share of 7.2 percent. Annual revenues in 2005 were approximately US$ 13 billion (€

11 billion). Lenovo is the leading PC vendor on the Asia Pacific region, but is not more than

fifth overall in the EMEA region and falls short of the top five positions in the European

notebook segment.

1.3.7 Medion

Medion is a Germany based company operating under a special business model designed to

provide retail partners with the right product at the right time at an attractive price, offering

good value for money. In terms of product groups, Medion focuses on three areas: PC and

multimedia, entertainment and household electronics and communications technology

products. The company supports retailers and manufacturers in one-off sales campaigns

involving modern consumer electronic products, including PCs, LCD and plasma TV sets,

DVD recorders, MP3 players, navigation systems and household appliances. PC and

multimedia is the primary market segment, which accounted for over 73 percent of sales in

2004. Medion shipped nearly 1 million desktop and notebook PCs in Germany and 0.4 million

units in other European countries. That corresponded to a 3.2 percent share of the PC market

in Europe. Total revenues for the Medion group in 2004 were € 2.7 billion.

1.3.8 NEC

NEC Corporation is a leading provider of Internet solutions, dedicated to meeting the

specialised needs of its customers in the key computer, network and electronic device fields

through its three market-focused in-house companies: NEC Solutions, NEC Networks and

NEC Electron Devices. The group headquarters are located in Japan and its 250 consolidated



subsidiaries have around 149,000 employees. Net sales in the fiscal year ending 2005

amounted to € 36 billion. NEC Computers is Europe’s sixth largest PC vendor and provides a

complete range of desktops, notebooks and servers for businesses, consumers and

governments. NEC is the brand name in the enterprise market, whereas Packard-Bell is used

for consumer products. In 2004, shipments reached 1.8 million units on the European market,

which corresponded to a market share of 4.3 percent. NEC Computers employs 3,500 people

at its headquarters in the Netherlands and two production facilities in the UK and France.

1.3.9 Sony

Sony manufactures audio, video, communications and information technology products for

the global consumer and professional markets. Moreover Sony is the second largest music

company in the world and a leading motion picture and television production company.

Worldwide the group employs 151,000 people and for the fiscal year ending 2005, it recorded

consolidated sales of € 53.4 billion. Sony Information Technology Europe was founded in

1997 and in 1998 the company entered the European PC industry with the VAIO notebook

range. In 2001 the handheld computer range CLIÉ was introduced into the European market,

but three years later Sony decided to withdraw from the PDA segment. Today Sony offers

VAIO desktop and notebook PCs for the home users and VAIO notebook PCs for the

business users. Sony’s share of the European PC market in 2004 was around 1.0 percent.

1.3.10 Toshiba

Toshiba is a diversified manufacturer and marketer of advanced electronic and electrical

products, spanning information and communications equipment and systems, Internet-based

solutions and services, electronic components and materials, power systems, industrial and

social infrastructure systems, and household appliances. The company has some 161,000

employees worldwide, and reported consolidated sales of over € 45 billion for the fiscal year

ending 2005. Toshiba introduced the world’s first laptop computer in 1985, which was

followed by the first notebook PC in 1989. Today, Toshiba remains a leader in the global

notebook PC market. With 2.2 million units shipped in Europe during 2005, Toshiba ranks as

the fourth largest brand in the notebook segment with a market share of 8.9 percent.



Figure 1.8 – Top notebook PC vendors, by country (Western and Central Europe, 2005)

Country First ranking vendor Unit shipments Market share

Austria Acer 120,000 22.2 percent

Belgium Acer 139,000 26.8 percent

Czech Republic Acer 75,000 42.5 percent

Denmark Acer 99,000 21.1 percent

Finland HP 109,000 26.3 percent

France Acer 641,000 21.2 percent

Germany Fujitsu Siemens 1,102,000 19.0 percent

Greece HP 48,000 20.7 percent

Hungary Acer 31,000 22.9 percent

Ireland Dell 83,000 47.0 percent

Italy Acer 776,000 30.1 percent

Netherlands Acer 338,000 23.4 percent

Norway HP 125,000 23.6 percent

Poland Acer 157,000 33.5 percent

Portugal Acer 18,000 24.7 percent

Slovakia Acer 23,000 38.2 percent

Spain Acer 441,000 23.9 percent

Sweden HP 170,000 23.5 percent

Switzerland Acer 155,000 20.2 percent

UK Dell 1,053,000 25.3 percent


1.3.11 Palm

Palm is the world’s largest handheld computer vendor with an estimated global market share

of 34.1 percent in 2005. The company's products include smartphones, under the Treo

brand; mobile managers, under the LifeDrive brand; handheld computers, under the



Tungsten and Zire brands; as well as software and accessories. Palm’s history dates back to

1996 when the first Palm Pilot was introduced in the US. Three years later Palm achieved

nearly 73 percent of the US market and 68 percent of the worldwide market for handheld

products. Palm OS was established as at that time the de facto standard operating system for

PDAs. Intensifying competition from Microsoft Pocket PC, later Windows Mobile, and voice-

centric smartphone devices however built up to the company under severe pressure. In 2003

it acquired the Palm OS smartphone manufacturer Handspring and at the same time spun off

the operating system division in a separate company called PalmSource. For two years the

company traded under the name palmOne, before taking back its original name Palm in July

2005. Revenues for the fiscal year ending 2005 were US$ 1.3 billion (€ 1.1 billion).

1.3.12 Symbol

Symbol Technologies offers customers mobility solutions to help operating their enterprises

more efficiently. Founded in 1975, Symbol is a global company with annual sales exceeding

US$ 1.7 billion (€ 1.4 billion) and operations in more than 50 countries. Symbol’s product

offerings include mobile computers, RFID systems, scanners, payment systems, micro

kiosks, wireless infrastructure and mobility management software. The company offers

expertise and solutions in the following industries: retail, healthcare, manufacturing,

government, transportation and wholesale distribution. Symbol ranked first in the fast growing

rugged mobile computing market with a market share of 31.1 percent in 2004. It provides a

wide range of industrial and enterprise class wireless, handheld, and fixed-mount computers.

Over 7 million Symbol mobile computers and scanners are in use across multiple industries

and environments.

1.3.13 Intermec

Intermec provides supply chain information products, services and systems to companies in

hundreds of industries around the world. Products include wired and wireless automated data

collection, RFID and mobile computing systems. Intermec’s wireless data systems allow

communications between readers and electronic tag devices, allowing customers to identify,

track and monitor almost anything that moves. The systems include wireless LANs that

support a complete range of current and anticipated wireless technologies and are easily

integrated into fixed high-speed, LAN-based solutions. Intermec was ranked as the world’s



second largest provider of rugged mobile computing systems and with an estimated market

share of 11.2 percent in 2004. Intermec is a division of UNOVA, a US-based industrial

technologies company. Revenues in 2005 amounted to around € 700 million and the number

of employees is 2,700.

1.3.14 Psion-Teklogix

Psion is a world leader in mobile computing and wireless networking, specialising on

products, services and solutions that give mobility to enterprise workers. The operating

business Psion Teklogix is a global provider of solutions for mobile computing and wireless

data collection that was formed in 2000 as the result of a merger between the UK-based

enterprise division of Psion and Canadian-based Teklogix. The company's fully integrated

mobile computing solutions include rugged hardware, secure wireless networks, robust

software, professional services and exceptional support programs. Psion ranked third in the

global mobile computing market with a market share of 5.6 percent in 2004. Revenues in

2004 were £ 135 million (€ 200 million) and the company employs approximately 1,000

people around the world.



Chapter 2

Wireless broadband technologies 2 Wireless broadband communication technologies

True wireless broadband is something like a holy grail for the telecom industry. Ultimately,

everyone agrees, any device should be connected to the Internet anywhere at any time. Ever

since wireless LAN broke out on the market in the late 1990s, countless plans have been

drafted to create seamless wide area wireless networks. In reality the task is most difficult to

accomplish. As with any radio network it comes down to bandwidth, base station density and

coordination. Just because there is a hotspot at every street corner, there is no guarantee that

users can roam between them. The complexity of arranging roaming between a few hundred

mobile operators in the world would be nothing compared to the intricacies of managing a

distributed hotspot network with tens of thousands of nodes operated by just as many

parties. If mobility is not required, the task however becomes more achievable. Broadband

wireless access networks can offer high bandwidth to users in a large geographic area

without requiring an unreasonable amount of base stations. Mobile technologies add mobility

at the cost of more base stations. Moreover they are easily integrated into existing roaming

frameworks. Each of the solutions for wireless broadband has its own intrinsic advantages

and disadvantages. All of them will also find their respective markets.

2.1 Wireless LAN technologies

Wireless LAN (WLAN) is a wireless local area network that uses radio waves as its carrier to

provide a network connection to all users in the surrounding area. The backbone network

usually uses cables, with one or more wireless access points connecting the wireless users to

the wired network. Wireless users need to have network equipment that is compatible with

the access point. Originally PC cards were widely used for this purpose, but today most

notebook PCs are shipped with an integrated WLAN chip. Public WLAN services enable

anyone with the appropriate equipment to access Internet in a so called hot spot zone.

Typical hotspot locations are airports, conference venues and restaurants. In some cases

Internet access is provided for free as an added value, for instance in coffee shops.



2.1.1 802.11 legacy standards

802.11 denotes a set of WLAN standards developed by the standards association IEEE. The

standards are supervised by the Wi-Fi Alliance, which has certified more than 2,000 products

since March 2000. The 802.11 family currently includes six over the air modulation techniques

that all use the same protocol, the most popular techniques are those defined by the a, b,

and g amendments to the original standard. 802.11b was the first widely accepted wireless

networking standard, followed by 802.11a and 802.11g. Both the b and g standards use the

unlicensed 2.4 GHz band that is also used by Bluetooth and DECT cordless phones, whereas

the a standard uses the 5 GHz band. When used in a point to multipoint mode, 802.11b and

g can offer raw data rates of up to 11 Mbps and 54 Mbps respectively at a range of up to 50

metres. Whereas 802.11a was coldly received on most markets due to frequency issues, the

802.11g standard swept the consumer world of early adopters even before the standard had

been officially ratified in early 2003. Today most WLAN products are dual or tri-mode devices,

supporting 802.11a, b and g.

Figure 2.1 – 802.11 legacy standards overview

Version Bandwidth Frequency Release date

802.11b 1, 2, 5.5 or 11 Mbps 2.4 GHz 1999

802.11a 1 to 54 Mbps 5.0 GHz 1999

802.11g 1 to 54 Mbps 2.4 GHz 2003


2.1.2 Historical development

The approval of the 802.11b standard in 1999 was the first milestone in the unprecedented

success story of wireless LAN. By 2001, shipments of Wi-Fi certified devices had reached

about 9 million units worldwide, over half of them PC cards. The following year, leading PC

vendors began integrating Wi-Fi chips on notebook motherboards. In just two years’ time

between 2002 and 2004, the share of notebooks shipped with built-in WLAN capabilities

soared from 10 percent to 75 percent. Decisions by Intel and other chip manufacturers to

embrace Wi-Fi contributed greatly to the extraordinary market performance. Growth



continued in 2005 and by 2006 it is expected that all notebook PCs sold in Western Europe

will have WLAN. Meanwhile sales of external WLAN PC cards have begun to decline after

reaching a peak during 2003.

Figure 2.2 – Number and share of notebooks shipped with WLAN (Europe 2002–2006)

0

5

10

15

20

25

30

35

40

2002 2003 2004 2005 2006

Mill

ions

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Units

%


2.2 Broadband wireless access technologies

Broadband wireless access (BWA) technologies go one step beyond WLAN by offering much

wider coverage around each network node. Technologies in this category, such as WiMAX,

UMTS TDD and Flash OFDM, are optimised to provide high data rates at long range without a

clear line of sight. Proponents of BWA argue that networks designed for data traffic only offer

better performance than mobile networks that were first developed as voice traffic carriers.

Unlike mobile networks however, BWA will not always support mobility at an initial stage.

Mobility is often included in the standards, but is frequently not allowed by radio frequency

licensing authorities in Europe. Furthermore it requires high base station density, which



means that much of the economies of scale in comparison to mobile 3G networks would be

lost. The perceived business cases for BWA in Europe are primarily aimed at providing a

competitive alternative to DSL and cable access, particularly in rural areas where DSL is

difficult to deploy. But in addition to that, there are however also plans to deploy so called

wireless metropolitan area networks (WMAN) in major European cities.

Figure 2.3 – European broadband wireless access network operators, by country

Operator Country Technology Coverage

WiMAX Telecom Austria WiMAX Population centres

Clearwire Belgium WiMAX Major cities

T-Mobile Czech Republic Czech Republic UMTS TDD Nationwide (planned)

Clearwire Denmark WiMAX Major cities

Digita Finland FLASH-OFDM Nationwide (planned)

Finnet Finland WiMAX 2 regions

SkyWeb Finland UMTS TDD Nationwide (planned)

Altitude Telecom France WiMAX 3 regions

Airdata Germany UMTS TDD Major cities

DBD Germany WiMAX Major cities

Clearwire Ireland WiMAX Major cities

Netlé Lithuania UMTS TDD Nationwide (planned)

Sferanet Poland WiMAX Major cities

Sonaecom Portugal UMTS TDD Major cities

T-Mobile Slovakia Slovakia FLASH-OFDM Nationwide (planned)

WiMAX Telecom Slovakia WiMAX Population centres

Iberbanda Spain WiMAX 3 regions

Accelerated Wireless Sweden UMTS TDD 2 regions

Mobile Broadband Forum Sweden UMTS TDD 13 regions

UK Broadband UK UMTS TDD Thames Valley




2.2.1 FLASH-OFDM

FLASH-OFDM is a proprietary air interface technology designed for the delivery of advanced

Internet services in the mobile environment. As its name suggests, the technology is based

on the OFDM airlink, a wireless access method that combines the attributes of its two

predecessors – TDMA and CDMA – to address the unique demands posed by mobile users

of broadband data and packetised voice applications. The FLASH-OFDM system enables a

mobile operator to deploy nationwide broadband access with low latency. Existing systems

deliver average downlink user data rates of 1 Mbps to 1.5 Mbps, with burst rates up to 3.2

Mbps and average uplink user data rates of 300 to 500 kbps, with burst rates of 900 kbps.

The goal is to offer one wireless wide area network for broadband data and voice at attractive

mass market flat rate pricing.

Flarion Technologies is the US-based company behind the FLASH-OFDM technology. In

August 2005 the company was acquired by Qualcomm. Flarion's product line consists of

base stations, modems, PC cards, embedded chipsets, and system software to create an end

to end FLASH-OFDM network for mobile operators. Flarion also licenses the technology to

facilitate the design of FLASH-OFDM enabled networks and computing devices by other

vendors. Siemens and Flarion collaborates on FLASH-OFDM products for the 450 MHz band,

which until recently has been occupied by analogue mobile telephony. Particularly mobile

operators in Eastern Europe are looking for an affordable mobile broadband solution for the

450 MHz band. From Siemens’ perspective, FLASH-OFDM is a valuable complement to

WiMAX for nomadic wireless services and HSDPA for demanding premium users.

T-Mobile Slovakia announced the world’s first nationwide FLASH-OFDM service in October

2005. Earlier in June 2005, the Finnish government awarded the 450 MHz license to the

television and radio broadcasting company Digita, a subsidiary of the TDF Group. Digita will

construct a nationwide FLASH-OFDM network and expects to open the first stage of the

network for commercial use in autumn 2006.



2.2.2 UMTS TDD

UMTS TDD is high speed, low latency, packet based platform to provide wireless broadband

and other packet services. First defined by the 3GPP in Release 99, the standard also known

as TD-CDMA, continues to evolve and move forward in the later releases based on input from

operators and vendors. Proponents regard UMTS TDD as the best choice for provisioning

ubiquitous broadband data and voice services, citing the maturity of the technology, excellent

spectral efficiency and support for handoff and roaming. UMTS TDD has been commercially

deployed by service providers around the world and has proven its ability to compete with

DSL as a broadband service. An industry organisation, The Global UMTS TDD Alliance, was

formed in February 2004, to provide a forum for members to share their learning and set

requirements for future solutions, as well as to foster the market environment for solutions

based on packet data implementations of the UMTS TDD standard.

IPWireless has established itself as the leading provider of UMTS TDD technology worldwide,

working with partners including UTStarcom, Alcatel, Solectron, Nortel and Flextronics.

Besides radio network equipment, IPWireless also provides PC-card data cards with SIM

cardholders and desktop modems for network access. The IPWireless Mobile Broadband

Technology is an implementation of UMTS TDD, allowing data rates of up to 3 Mbps under

ideal circumstances in a cell radius of 20 kilometres. Service providers typically offer downlink

rates of up to 1 Mbps and uplink rates of 256 kbps. IPWireless first unveiled its technology

platform in 2001 and saw the first commercial service launch in 2003. Since then there has

been commercial deployments in several countries around the world including Australia, the

Czech Republic, Germany, the UK, the US, and South East Asia.

Airdata launched the first European UMTS TDD service in Germany in late 2003. UK

Broadband, a subsidiary of the Hong Kong based PCCW group and holder of all wireless

broadband spectrum licenses in the UK, launched a similar service in the following year.

Initially the service is only available in south-western England, but UK Broadband has long-

term plans for a nationwide network. Regional UMTS TDD licenses have also been handed

out in Sweden and in Finland a national license was granted to SkyWeb in September 2005.

Earlier the same year, Netlé received a nationwide wireless broadband license for Lithuania.

As the TDD air interface is UMTS standards compliant, the equipment can be co-located with



UMTS FDD base stations and share cell site equipment including antennas. Around 20 MHz

out of 160 MHz included in the 3G licenses held by mobile operators in Europe are reserved

for TDD. Operators holding these licenses therefore have the opportunity to offer TD-CDMA

services in parallel to WCDMA. Sonaecom in Portugal, T-Mobile in the Czech Republic and

Tele2 in Sweden have taken advantage of this opportunity to launch nationwide UMTS TDD

services. In the case of Tele2, the frequencies are made available to the partner company

Accelerated Wireless. Orange France, Nextel in the US and Optus in Australia are some of the

mobile operators that have trialled the technology.

2.2.3 WiMAX

WiMAX is a standards-based technology enabling the delivery of last mile wireless broadband

access as an alternative to cable and DSL. WiMAX will provide fixed, nomadic, portable and

eventually mobile wireless broadband connectivity without the need for direct line of sight

with a base station. In a cell radius deployment of three to ten kilometres, WiMAX systems

could deliver capacity of up to 40 Mbps per channel, for fixed and portable access

applications. This is enough bandwidth to simultaneously support thousands of residences

with DSL speed connectivity. If the cell radius is expanded to 30 kilometres, the channel

capacity drops to 18 Mbps and at 60 kilometres it is down to 3 Mbps. Capacity estimates

mentioned above are theoretical values under ideal circumstances. Early trials however

suggest that the actual throughput will be much lower, only around 2 Mbps at ranges of 5 to

10 kilometres. Early commercial users in Europe are offered up to 1 Mbps uplink and 256

kbps downlink.

WiMAX is an acronym that stands for Worldwide Interoperability for Microwave Access. The

goal with WiMAX is to promote and certify the compatibility and interoperability of BWA

equipment that conforms to the IEEE 802.16 and ETSI HiperMan standards. To help remove

the barriers to wide scale adoption of broadband wireless access technology, over 220

operators, communications component and equipment companies have established the

WiMAX Forum. Prominent members include Alvarion, Intel and Samsung among equipment

vendors and AT&T, BT and KT among operators. As the exclusive organisation dedicated to

certifying the interoperability of BWA products, the WiMAX Forum will define and conduct

conformance and interoperability testing to ensure that different vendor systems work



seamlessly with one another. Those that pass conformance and interoperability testing will

receive the WiMAX Forum Certified designation. Testing began in July 2005 and the

organisation believes its members could deploy commercial WiMAX Forum Certified

networks in the first half of 2006. By then the transition from existing non-standardised pre-

WiMAX platforms to the finalised 802.16e standard is expected to take place. In 2006, PC-

cards and integrated WiMAX chips for notebook PCs are likely to become widely available.

Pre-WiMAX platforms commonly require outdoor antennas for access.

Numerous operators had launched pre-WiMAX networks in Europe and around the world

already in 2005. Clearwire, founded by American wireless broadband pioneer Craig McCaw,

had networks up and running in parts of Denmark, Belgium and Dublin. The company is

closely allied to Intel and pursues an active strategy to achieve nationwide coverage for a

WiMAX service in the US. Other European service providers offering WiMAX include Altitude

Telecom in France, DBD in Germany, Finnet in Finland, Iberbanda in Spain, Sferanet in

Poland and WiMAX Telecom in Austria and Slovakia. BT plans to launch a commercial

WiMAX service in the UK before the end of 2006. Frequencies in the 3.5 GHz band have

been, or will be, allocated for WiMAX by regulators in many European countries. Most service

providers currently offer PC cards, though such are expected to become available during the

course of 2006. Instead users are reduced to using outdoor antenna equipment.

2.3 Mobile 3G technologies

Mobile 3G technologies provide the data capacity required for providing wireless broadband

services over mobile networks. 2G and 2.5G only support narrowband Internet access.

Originally GSM allowed circuit switched data communication at 9.6 kbps and the HSCSD

development later pushed the limit to 58 kbps. With GPRS, packet switched communication

at up to 115 kbps is theoretically possible, though actual data rates seldom exceeds 64 kbps.

EDGE is a bolt on enhancement to existing GSM, allowing increased data transmission rates

and enhanced radio spectrum utilisation, which is touted as the final stage in the evolution of

data communications within the existing GSM standards. Building on the capabilities of the

GPRS air interface and network hardware, EDGE requires GPRS to be deployed. EDGE offers

average download speeds of 70 kbps to 135 kbps with burst speeds up to 200 kbps.

Evolved-EDGE is a planned upgrade that could achieve download rates up to 600 kbps.



UMTS and the subsequent upgrades HSDPA and HSUPA qualify the GSM family of mobile

technologies for wireless broadband services that support full mobility. Data rates of up to

384 kbps available with UMTS match those of low-end consumer DSL services.

HSDPA/HSUPA offer theoretical peak download rates of 14 Mbps, which is on par with most

fixed broadband services. Figure 2.4 – Peak and average data rates for GSM family mobile technologies

Technology Average data rate Peak data rate

GSM 9.6 kbps 14 kbps

HSCSD 28 kbps 58 kbps

GPRS 40 kbps 64 kbps

EDGE 70–135 kbps 200 kbps

UMTS 220–320 kbps 384 kbps

HSDPA/HSUPA 550–1,100 kbps 14 Mbps


2.3.1 UMTS

UMTS is a global 3G system implemented with WCDMA technology that has been developed

within the ITU's IMT-2000 framework. Making use of radio spectrum in bands identified by the

ITU for Third Generation IMT-2000 mobile services and subsequently licensed to operators,

UMTS employs a 5 MHz channel carrier width to deliver significantly higher data rates and

increased capacity compared with second generation networks. This 5 MHz channel carrier

provides optimum use of radio resources, especially for operators who have been granted

large, contiguous blocks of spectrum. Crucially, UMTS has been specified as an integrated

solution for mobile voice and data with wide area coverage. Universally standardised via

3GPP and using globally harmonised spectrum in paired and unpaired bands, UMTS in its

initial phase offers theoretical bit rates of up to 384 kbps in high mobility situations. Symmetry

between uplink and downlink data rates when using paired spectrum also means that UMTS

is ideally suited for applications such as video telephony.



Figure 2.5 – UMTS operators by country (EU23+EFTA, December 2005)

Country Commercial networks Planned networks

Austria 3, A1, ONE, T-Mobile None

Belgium BASE, Mobistar, Proxiums None

Czech Republic Eurotel Praha Oskar Mobil, T-Mobile

Denmark 3, TDC Sonofon, TeliaSonera

Estonia None Elisa, Tele2

Finland DNA Finland, Elisa, TeliaSonera None

France Orange, SFR Bouygues Telecom

Germany E-Plus, O2, T-Mobile, Vodadfone D2 None

Greece Cosmote, TIM, Vodafone None

Hungary Pannon GSM, T-Mobile, Vodafone None

Ireland 3, O2, Vodafone None

Italy 3, TIM, Vodafone, Wind None

Latvia LMT, Tele2 Bité

Lithuania No licenses awarded. N/A

Luxembourg LUXGSM, Tango, VOX.mobile None

Netherlands KPN, Vodafone Orange, T-Mobile

Norway Telenor Mobil, TeliaSonera 3

Poland ERA, Polkomtel Orange, Netia

Portugal Optimus, TMN, Vodafone None

Slovakia None Orange, T-Mobile

Slovenia Mobitel None

Spain Amena, Movistar, Vodafone None

Sweden 3, Tele2, TeliaSonera, Vodafone None

Switzerland Orange, Sunrise, Swisscom None

UK 3, O2, Orange, Vodafone None




Nearly 100 UMTS networks were in service in more than 40 countries worldwide at the end of

2005. Among those, 61 networks were found in Western and Central Europe, where another

14 networks were also planned or in deployment for commercial launch in 2006 or 2007. At

the end of Q3-2005, the number of European UMTS subscribers had reached 17.6 million.

UMTS network coverage is still largely confined to densely populated areas and does not

match GSM in terms of the population covered. Therefore GPRS and EDGE constitute

important complements to UMTS data services. Support for additional networks, e.g. GPRS

or EDGE, is a standard feature in UMTS PC cards.

2.3.2 HSDPA

HSDPA stands for High Speed Downlink Packet Access and is an upgrade for UMTS

specified in 3GPP Release 5. The software based technology provides increased peak data

rates up to 14.4 Mbps in the downlink, reduced delay and two to three times increased

system capacity. That is possible because HSDPA makes more efficient use of the radio

spectrum than WCDMA by higher order modulation and a set of features to compensate for

variations in radio conditions. With HSDPA, WCDMA has been extended with additional

transport and control channels, e.g. the high-speed downlink shared channel, which provides

enhanced support for interactive, background, and to some extent, streaming services. In the

first phase HSDPA terminals offer average download rates of 550 to 1,100 kbps with burst

speeds up to 3.6 Mbps. Phase two HSDPA terminals are expected to reach peak download

rates of 14 Mbps with advanced receiver solutions. Meanwhile uplink capacity will increase

from 384 kbps to 1.8 Mbps.

Leading European mobile operators, including Vodafone, T-Mobile, Orange, TIM, 3 and O2

have announced plans to upgrade their UMTS networks with HSDPA and testing was well

underway among a large number of operators worldwide at the end of 2005. Manx Telecom,

the Isle of Man subsidiary of O2 launched Europe’s first commercial HSDPA service in

November 2005. Before that Cingular Wireless had launched a US service in the previous

month. PC cards supporting the technology were then available from several vendors,

including Novatel Wireless and Sierra Wireless. PC manufacturers such as Dell plans to offer

laptop models with built-in support for HSDPA from 2006.



2.3.3 HSUPA

HSUPA stands for High Speed Uplink Packet Access and is intended as the next step in the

evolution path for UMTS after HSDPA. Specifications are planned to be included in 3GPP

Release 6 that is due to be released in June 2006. Commercial networks and PC cards could

become available in the second half of 2007. HSUPA will improve performance by enabling

two-way high-speed communications between the base station and mobile devices. The

benefits will be increased peak rates up to 5 Mbps in the uplink, further reduced latency and

even higher network capacity. The technology will support not only uplink-demanding

applications, such as emails with large attachments or photos, webcam transmissions, and

multimedia messaging services, but also real-time interactive services, such as VoIP, push to

talk, and mobile gaming.

2.4 Positioning HSDPA as a wireless broadband technology

HSDPA is in an excellent position to become a leading wireless broadband technology on the

European market. There are several reasons for this. First and foremost, all competing

technologies offer fairly similar performance in practice. Few customers will attain data rates

higher than 1 Mbps in the near future using any commercial wireless network. HSDPA closes

the gap in bandwidth between existing UMTS data services and BWA. When compared to

consumer and enterprise DSL services, average download rates are well in line with most

mass market offerings.

Latency is another parameter of great importance for the user experience. When accessing a

data network, latency is the time in milliseconds that it takes for a data packet to make a

round trip from the source to the destination and back. High latency creates an impression of

a slow network service, even if data rates are high once transmissions get started. Simple

tasks such as checking email can take several seconds using a high latency wireless

network, compared to a split second on a DSL or cable service. Real time applications such

as VoIP require latency below 200 milliseconds to provide good user experience. Figure 2.5

below shows the latency times for different broadband technologies. Neither HSDPA, nor any

BWA technology can fully match DSL, even though particularly FLASH-OFDM comes very

close. Extremely high latency is one of the reasons why satellite broadband has never taken

off. High latency is also a drawback with UMTS data services.



Figure 2.6 – Technical comparison of broadband technologies

Technology Average downlink Latency Area coverage

HSDPA 0.6–1.1 Mbps 100 ms National/international

UMTS 150–340 kbps 200 ms National/international

FLASH-OFDM 1 Mbps 50 ms Regional/national

UMTS TDD 1 Mbps 60 ms Regional/national

WiMAX 1 Mbps 100 ms Local/regional

WLAN 11–54 Mbps 100 ms Local

DSL 0.25–24 Mbps 25 ms Local

Satellite 0.25–10 Mbps 2,000 ms International


Area coverage is a third parameter that is of great importance for many users. HSDPA, with

fallback to UMTS, EDGE and GPRS, is capable of offering an unparalleled coverage on a

global basis. When combined with WLAN, users can also benefit from greatly improved

network performance at hotspot locations. On a national or regional level, FLASH-OFDM and

UMTS TDD could offer even better coverage, especially in rural areas not covered by 3G

networks. Even though international roaming agreements are perceivable, the likelihood for

any of the technologies to achieve a global footprint is however limited in the short and

medium term. It should also be remembered that both technologies are touted as broadband

technologies for areas that lack other telecom infrastructure, i.e. areas where HSDPA is less

likely to be deployed. The third contender in the BWA market, WiMAX, is mainly deployed in

local areas. Nationwide networks remain far away from realisation. Presumably WiMAX could

overtake WLAN as the technology for boosting wireless network performance in metropolitan

areas. Moreover it enables deployment of private wide area wireless networks for

governments, as well as enterprises. Those would compete indirectly with 3G networks,

which otherwise could have accommodated much of the data traffic.



Altogether, HSDPA has the characteristics that best respond to the communication needs of

notebook PC users in Europe. If deployed swiftly on top of existing UMTS networks across all

major European countries, HSDPA will deliver seamless high performance data connectivity

throughout the continent. Operators bundling HSDPA with WLAN and later also WiMAX

services will be able to offer the best available wireless communication infrastructure at

virtually all locations. BWA technologies could become serious competition in some national

markets if backed by operators with significant resources. Any wireless broadband

technology must however achieve a widespread international footprint in order to create a

sufficient market volume for cost efficient mass production of related equipment.



Chapter 3

UMTS and HSDPA data solutions 3 UMTS and HSDPA data solutions 3G data solutions for mobile computing can be provided on any UMTS network using the

same system architecture as GPRS data services. PC cards and desktop modems enable

users to access the Internet over standard UMTS networks with peak connection speeds up

to 384 kbps. On the network side, HSDPA technology can be deployed to allow theoretical

peak data rates of up to 14 Mbps. First generation HSDPA devices only allow connection

speeds up to 1.8 Mbps, while second and third generation devices will push the limit to 3.6

Mbps and 7.2 Mbps respectively.

3.1 3G packet switch bearer data services

3G data services are based on the same system architecture as GPRS data services. From

the core network perspective, the 3G bearer service is seen as an extension of the existing

2.5G network. The key components of a UMTS packet switch bearer service for data for

mobile computing are a 3G radio network, a 3G Serving GPRS Support Node (SGSN) and 3G

access terminals. Only the bearer layer for UMTS/HSDPA and the 3G SGSN are specific for

the 3G bearer service, the rest of the infrastructure is shared with 2.5G bearer services. That

includes the other main component of the GPRS/UMTS core, Gateway GPRS Support Node

(GGSN), and the components of the common service control layer – HLR (Home Resourse

Locator), DNS (Domain Name System), CDR (Call Detail Record), SCP (Service Control Point)

and AAA (Authentication, Authorisation and Accounting).

3.1.1 Session management

A UMTS data session requires an access point, i.e. an entity providing packet data services.

This might be the mobile operator or a third party acting as an ISP or a corporate Intranet. It

could also be a service such as MMS or WAP. When setting up the session, the mobile unit

passes on an APN (Access Point Name), which is a label used to identify access points in



fixed networks to the SGSN. The SGSN performs DNS lookup using the supplied APN and

points to a specific port on a specific GGSN based on the result. When roaming all APN

selections typically set up sessions back to the home network. The SGSN also contacts the

HLR subscription record to confirm SIM card access to the UMTS network, define which

APNs that may be requested and specifies a QoS profile. The GGSN contacts the AAA record

to confirm user access to APN domain. The AAA server may be within the operator’s domain

or within a third party domain – e.g. corporate Intranet. In the next step the GGSN assigns an

IP address – either from its internal pool or from an external DHCP or AAA server. For post

paid charging both the SGSN and the GGSN contacts the CDR collector regarding subscriber

information, upload and download traffic volume and mobility information. For prepaid

charging, the SCP interacts with SGSN or GGSN in real time to allocate chunks of credit from

the subscriber’s available balance. Finally the GGSN and SGSN return the response to the

mobile unit and IP traffic is exchanged.

Figure 3.1 – 3G packet switch bearer service session management

3.1.2 Network performance

Throughput and latency are two significant parameters for the performance of a wireless

broadband service. UMTS networks typically have a latency of around 250 milliseconds for a

32 byte ping. However the delay for initial ping can be up to 5 seconds. Most of the delay



occurs in the mobile device itself when communicating with the network. Data throughput in

UMTS networks depend on radio conditions and mobile type. The size of a radio bearer

allocated to a mobile device is increased during transfer as certain volume thresholds are

met. Large data transfers may initially get 64 kbps, which could be increased to 128 kbps and

384 kbps, depending on the volume transferred. In reality this corresponds to around 60

kbps, 120 kbps and 340 kbps respectively. The number of simultaneous users who can be

supported at 384 kbps is in many networks limited by the capacity in the lub interface Node B

base stations and RNC. One cell has a total capacity of 2 Mbps that has to be shared

between data, voice and signalling for all users. Due to high radio bearer setup times,

transfers of small amounts of data can seem excessively large. As a matter of fact GPRS can

outperform UMTS for small data volumes of less than 15 kB. If users move from UMTS to

GPRS only coverage during a session, it is maintained and reassigned to a 2G SGSN.

However there is an interruption to the user data in the order of 15 to 20 seconds while the

handover procedures are happening.

Combining several techniques, HSDPA maximises data throughputs and capacity, while

minimising delays. For users this translates into higher peak and average data rates as well

as better network performance under loaded conditions. Up to 40 simultaneous data users

per cell are allowed with HSDPA, compared to 9 with UMTS. Moreover, latency is reduced to

around 100 milliseconds for a 32 byte ping. Performance gains are achieved from a number

of new radio features in HSDPA. Basically, HSDPA introduces a new common High Speed

Downlink Shared Channel (HS-DSCH) – also referred to as codes – shared by several users.

In addition, it introduces enablers for the high speed transmission at the physical layer like

the use of a shorter transmission time interval (TTI), the use of adaptive modulation and

coding, and the use of fast retransmission based on hybrid ARQ (HARQ) techniques.

HSDPA uses up to 15 codes operating in the 5 MHz WCDMA radio channel. Users are

assigned to one or more of these channels for a short transmission time interval (TTI) of 2

milliseconds. Thus the network can adjust how users are assigned to different code domains

at an interval that is just 10 to 20 percent of what is used in regular UMTS. Fast scheduling

exploits the short TTI by assigning channels to the users with the best instantaneous channel

conditions. With about 30 active users in a sector, the network achieves significant user

diversity and considerably higher spectral efficiency.



Figure 3.2 – HSDPA throughput rates

Modulation Coding rate 5 codes Rate 10 codes 15 codes

QPSK 1/4 600 kbps 1.2 Mbps 1.8 Mbps

QPSK 2/4 1.2 Mbps 2.4 Mbps 3.6 Mbps

QPSK 3/4 1.8 Mbps 3.6 Mbps 5.4 Mbps

16-QAM 2/4 2.4 Mbps 4.8 Mbps 7.2 Mbps




HSDPA utilises both the modulations used in WCDMA, namely QPSK and 16-QAM. Under

good radio conditions, 16-QAM is capable of transmitting four bits per radio symbol,

compared to two for QPSK. Fast link adaptation is a process in HSDPA allowing the network

to employ different levels of error correction, depending on the condition of the radio channel.

For example a 3/4 rate means that three quarters of the bits transmitted are user bits and one

quarter is error correction bits. The theoretical maximum throughput of 14.4 Mbps occurs with

a coding rate 4/4, 16-QAM and all 15 codes in use. Early commercial deployments use

devices based on 5 codes and QPSK modulation, for which vendors have measured

consistent throughput rates in excess of 1 Mbps.

3.1.3 Challenges and future developments

Several challenges lie ahead for the further development of 3G packet switch bearer data

services, such as intelligent session management, content charging and assurance of quality

of service (QoS). User controlled session management is complicated for customers and

difficult to adapt to variable network conditions. Intelligent session management would take

all the complication away from the user and get the network to adapt the session to what the

user is trying to do. In an ideal scenario the user would activate a single session for all data

services, while all session attributes would be controlled by the network.



Content charging is relevant if operators plan to offer premium services to wireless

broadband customers. Traditionally UMTS is charged by volume and the session volume is

reported against the APN selected by the user. To avoid an explosion of APNs for charging

according to different rates, a service charging gateway (SCG) is introduced in the network.

The SCG performs deep packet inspection in real time and classifies traffic according to

operator defined triggers. When transferred to the billing system, different rates can be

applied for data flows according to business rules.

Support for traffic with different QoS levels is included in the 3G UMTS standards. Four traffic

classes are defined by 3GPP standards, namely conversational, streaming, interactive and

background. Conversational is the most delay sensitive and error tolerant class, utilised for

applications such as VoIP and video conferencing. Streaming has looser delay requirements

and more efficient error correction. Buffering is needed on the application level to smooth out

jitter. Typical applications are broadcast services and one-way streaming media. Interactive

provides reliable data transfer for bursty packet data transmission where response is

expected in a few seconds. Application areas include web browsing, instant messaging and

games. Background finally provides reliable data transfer, but without guarantee on response

times. Some application examples are email and database downloads.

QoS is in this context considered between the mobile terminal and the edge of the operator

network, including all transport networks. Today UMTS networks are generally optimised for

best effort service for all traffic and dimensioning only depends on total traffic volume. That

leaves no guaranteed support for real time services such as VoIP, streaming and similar. The

user experience ranges from good but unpredictable to poor. Future QoS targets will be met

through end to end traffic management, dimensioning based on traffic type, best use of all

network resources, guaranteed support for full range of real time applications and user

experience that is predictable and appropriate for services used. Several measures must be

taken to support the different QoS levels. All transport networks will need to be upgraded, as

well as the network platforms that need to support QoS control procedures. Mobile terminals

also need to support the various traffic classes. Finally operators need to devise and enforce

a QoS policy to determine which users or applications should get which grade of service.



3.2 3G data devices

3G data devices are crucial components of UMTS and HSDPA data solutions. There are three

primary form factors, closely resembling devices for WLAN. PC cards constitute the most

common category, which has been commercially available for mobile applications since the

launch of GPRS. Cards based on the PCMCIA standard are easily plugged into any notebook

PC. For stationary applications there are also desktop modems that connect to the Internet

through any available 3G network. Normally these devices include a WLAN gateway for local

network access using an 802.11x connection. Recently embedded 3G modules have also

come out into the market. These can be integrated into a notebook at the factory in the same

fashion as most WLAN chipsets are today. In the longer term, embedded modules can be

expected to replace PC cards in the 3G space, as they have in the WLAN space. The

integration of an embedded module into a notebook PC is however a complex process that

requires each model to be tested with numerous network operators.

GPRS, EDGE and UMTS represent three straightforward evolutionary steps in the GSM family

of mobile technologies, each of them enabling higher data rates than the other. HSDPA

however brings in more complexity. There are no less than 12 standardised device categories

for HSDPA as shown in figure 3.3 below, each using different numbers of codes, TTI slots and

modulation techniques. The first HSDPA terminals are PC cards in Category 6 and Category

12. Category 12 uses QPSK modulation only with 5 codes and 1 TTI slot. The peak data rate

according to these specifications is 1.8 Mbps, significantly less than the maximum value of

14.4 Mbps. Category 6 achieves up to 3.6 Mbps by adding 16-QAM modulation. Category 7

through 10 is not yet feasible since the current technology cannot benefit all 15 code domains

in a HSDPA cell due to interferences between the codes. Mobile receivers with this capability

are expected to become commercially available in 2007 or 2008. Each of the device classes

require unique optimisation of the existing 3G network infrastructure. When deploying and

upgrading HSDPA, operators must therefore strike a balance between optimising their

networks for customers using the latest equipment and maintaining adequate network

performance for older devices.



Figure 3.3 – HSDPA capacity per 3GPP category

HS-DSCH category Codes TTI slots Modulation Peak data rate

Category 1 5 3 QPSK & 16-QAM 1.2 Mbps










Category 11 5 2 QPSK only 900 kbps

Category 12 5 1 QPSK only 1.8 Mbps


3.2.1 PC cards

PC cards for wireless networking were first introduced for WLAN and achieved massive

popularity until replaced by embedded WLAN chipsets. At an early stage there were also

GSM/GPRS PC cards for mobile data services. However it took until UMTS was introduced

before market volumes became significant. Virtually all UMTS network operators offer PC

cards for data as part of their 3G product portfolio. Today several million UMTS PC cards

have been shipped by half a dozen vendors worldwide. HSDPA PC cards were announced by

several vendors in the second half of 2005, prior to the first commercial rollout of HSDPA by

Cingular Wireless in the US. A 3G PC cards measures around 85 x 55 x 5 millimetres and

weighs approximately 50 grams. Sometimes an external antenna must be connected to

achieve the best coverage. Most vendors and operators supply customers with a mobile

communication software suite for Windows XP for easy installation and operation of the PC

card that can be plugged into any notebook PC. But even if there are few problems with the



software environment, 3G PC cards place significant demands on the host computer system.

Already in idle mode, the radio module requires more electric power than a WLAN chip. When

active it generates significant amounts of heat, which triggers the internal cooling fan. Both of

these circumstances have an adverse effect on the battery life for a notebook PC. In some

cases the operating times can be halved.

Figure 3.4 – HSDPA PC cards for the European market

Option GlobeTrotter 3G (left). Merlin U740 by Novatel Wireless (right).

Source: Option and Novatel Wireless

3.2.2 Desktop modems

A 3G desktop modem is a gateway connecting a local area network to the Internet using a 3G

data connection. An integrated WLAN (802.11b/g) router enables wireless networking at the

local site. As opposed to a PC card, several computers may share the 3G data connection

provided by the gateway. 3G desktop modems have been designed for both the residential

and corporate markets. Besides regular Internet access at home or office, there are several

niche applications such as temporary office locations, mobile hotspots in e.g. taxis, trains or

airplanes or as a backup solution to traditional wired networking. Possio, a Swedish start-up

company, announced the desktop modem for 3G networks with a built-in wireless router in

June 2004. The product line was later acquired by Option. Novatel Wireless has also

developed a 3G wireless router that was launched by O2 Germany for the residential 3G

broadband service Surf@home in April 2005. Leading network equipment manufacturers



have developed wireless routers with built-in Cardbus slots for the insertion of 3G PC-cards.

D-Link announced a mobile router supporting EV-DO, UMTS and HSDPA network cards in

August 2005. Linksys, a Cisco subsidiary, announced a similar product in September 2005

that was launched by Vodafone Portugal and A1 before the year end. No vendor has so far

developed a commercial HSDPA desktop modem product.

Figure 3.5 – UMTS desktop modems for the European market

Option GlobeSurfer 3G (left); Novatel Wireless Ovation (right)

Source: Novatel Wireless and Option

3.2.3 Embedded modules

Today embedded modules for mobile communication are most commonly used for wireless

M2M applications. Recently there has however been a growing interest in embedded 3G

wireless modules among notebook PC vendors to complement built-in WLAN chipsets.

Embedded modules require many efforts in terms of integration and product testing. But at

the same time, the form factor offers advantages when it comes to performance. An

integrated module can be managed more efficiently by the device than an external device

inserted into the PC card slot. For instance the device can be switched on and off in

coordination with the internal power saving system. An embedded 3G module enables a

notebook PC user to simply insert a SIM-card and run a network configuration wizard in order

to gain access to the Internet over a 3G network. Future versions of operating systems such



as Microsoft Windows will most likely support 3G mobile data communication without the

need of additional driver or software. In the light of the rapid adoption of WLAN technology in

the PC industry, chances are good that embedded 3G modules will become a standard

feature in notebook models for the European market in a few years’ time. Dell and Lenovo

have announced plans for notebook PC models with embedded HSDPA and EV-DO modules

for release on the US market in 2006 in partnership with national network operators. Novatel

Wireless and Sierra Wireless were the first vendors to announce PCI Express Mini Card

product lines supporting HSDPA during 2005. PCI Express Mini Card is a form factor

specification designed in mobile platforms and is optimised for most notebook systems.

3.3 UMTS/HSDPA PC card and desktop modem vendor profiles

Novatel Wireless and Option dominate the market for 3G PC cards in Europe as well as

worldwide. On 11 November 2005, Option announced it had shipped its 1 millionth UMTS

wireless data card. Both companies offer a wide selection of data cards for HSDPA, UMTS,

EDGE, GPRS, GSM and WLAN. All models combine support for two or more technologies.

During 2005, Novatel Wireless and Option have also launched desktop modems to

complement their existing product portfolios. Sierra Wireless is number three on the global

market, but has a limited presence in Europe. The company did however supply PC cards to

Manx Telecom for the first commercial European launch of HSDPA on Isle of Man. Handset

manufacturers Motorola and Sony Ericsson, as well as the Chinese equipment vendor

Huawei and Japanese Seiko Instruments also supply UMTS PC cards. Siemens announced

plans for an HSDPA data card due for release in 2006 at CeBIT 2005, prior to the sale of the

handset unit to BenQ. Nokia offers a GPRS data card on the European market, but has so far

not announced any 3G data products.

3.3.1 Novatel Wireless

Novatel Wireless is a leading provider of wireless broadband access solutions for the

worldwide mobile communications market. Established as a private company in 1996,

Novatel Wireless was formerly known as the Personal Communications Products Division

(PCP division) of Novatel Communications. In 2000, Novatel Wireless became a public

company trading on NASDAQ, headquartered in San Diego, California. Revenues in 2004

reached US$ 103 million (€ 80 million) and the staff exceeds 100 employees.



Novatel Wireless delivers a broad range of 3G wireless PC card modems, embedded

modems, ruggedised modems and communication software to wireless network operators,

distributors, OEMs, and vertical markets worldwide. The company owns more than 20

technology patents and has established partnerships with leading telecom operators,

infrastructure providers and device manufacturers around the world. Key technology partners

include Lucent Technologies, Qualcomm and LG Innotek.

Novatel Wireless has five product lines:

• Merlin family of wireless PC cards designed for operation on 2.5G and 3G networks

including GPRS, CDMA2000 1X/EV-DO, UMTS and HSDPA.

• Ovation family of 3G multimedia application consoles that unifies UMTS, WLAN and

VoIP to provide high speed wireless broadband access, optimal call routing and the

delivery of multimedia applications.

• Expedite family of embedded modules based for integration into numerous

applications, including mobile computers.

• Freedom Box family of ruggedised modems for mobile and fixed wireless M2M

applications.

• MobiLink Communication Software Suite for management of wireless data

connections, designed for use with Merlin family wireless PC cards.

The Merlin family of wireless PC cards comprises three UMTS data cards and two additional

data cards supporting HSDPA. At the end of 2005, Merlin PC cards were available from 22

UMTS operators in 14 European countries, as well as in 15 countries across Asia, Africa, the

Middle East and North America. Customers include 3, Elisa, E-Plus, Mobilkom, O2, Orange,

Polkomtel, Proximus, TDC, TIM and T-Mobile. Novatel Wireless was one of two vendors

supplying HSDPA data cards to Cingular Wireless for its premier network launch in the US.

Merlin U730 and U740 support HSDPA, UMTS, EDGE and GPRS tri-band networks in North



America and Europe/Asia-Pacific respectively. The cards support Category 12 and offer peak

data rates of 1.8 Mbps. Novatel Wireless has also developed HSDPA PCI Express Mini Card

modems for integration into notebooks and other mobile devices, as part of the Expedite

family. Expedite EU730 and EU740 support HSDPA Category 12 with peak data rates of up to

1.8 Mbps and have been designed the North American and European markets respectively.

Figure 3.6 – Novatel Wireless Merlin family of wireless PC cards

Product name Supported network

Merlin U740 HSDPA/UMTS 2100 MHz, EDGE, GPRS Tri-band

Merlin U730 HSDPA/UMTS 1900 MHz, EDGE, GPRS Tri-band

Merlin U630 UMTS 2100 MHz, GPRS Tri-band

Merlin U530 UMTS 2100 MHz, GPRS Dual-band

Merlin U520 UMTS 1900 MHz

Source: Novatel Wireless

3.3.2 Option

Option is a wireless technology company and is a leading innovator in the design,

development and manufacture of 3G UMTS-HSDPA, EDGE, GPRS, GSM and WLAN

technology products for wireless connectivity solutions. Important technology partners

include Qualcomm and Nortel. The company headquarters and R&D centre are in Leuven,

Belgium. A software and applications centre is located in Germany, a wireless router

development centre in Sweden and a production, engineering and logistics facility on Ireland.

The wireless router operation was acquired from Possio in October 2005. Option is among

Europe’s fastest growing technology companies, employing more than 200 people. Net sales

grew by 81 percent in 2004 to reach € 102.5 million. Revenue growth accelerated further in

the first three quarters of 2005 to 91 percent on a yearly basis. All revenues were generated

through equipment sales, mainly from the 3G-product line.



Option offers two families of wireless PC cards, one fixed mobile device and mobility

software:

• GlobeTrotter 3G is a family of PC cards supporting UMTS/GPRS/GSM and EDGE,

depending on model. GlobeTrotter 3G EDGE is ready for a software upgrade to

support HSDPA Category 12 with a peak data rate of up to 1.8 Mbps.

• GlobeTrotter FUSION is a family of PC cards supporting 2.5G/3G and WLAN in a

single package, enabling operators to bundle WLAN hotspot services with 3G

broadband. GlobeTrotter FUSION+ is ready for a software upgrade to support

HSDPA Category 12 with a peak data rate of up to 1.8 Mbps.

• GlobeSurfer 3G is a 3G broadband wireless router. It comes on the WAN side with

3G/GPRS connections to provide throughput at up to 384 kbps and on the LAN side

with both a WLAN and an Ethernet interface.

• GlobeTrotter MobilityManager is a software suit for management of wireless data

network connections.

Figure 3.7 – Option GlobeTrotter wireless PC cards

Product name Supported network

GlobeTrotter 3G EDGE HSDPA/UMTS 2100 MHz, EDGE, GPRS Quad-band

GlobeTrotter 3G QUAD UMTS 2100 MHz, GPRS Quad-band

GlobeTrotter 3G UMTS 2100 MHz, GPRS Dual-band

GlobeTrotter FUSION+ HSDPA/UMTS 2100 MHz, EDGE, GPRS Quad-band, WLAN

GlobeTrotter FUSION QUAD UMTS 1900/2100 MHz, GPRS Quad-band, WLAN

GlobeTrotter FUSION UMTS 2100 MHz, GPRS Quad-band, WLAN

Source: Option



Option is the leading supplier of wireless PC cards on the European market and worldwide. In

November 2005, the company announced the shipment of its 1 millionth 3G PC card.

Through partnerships with market leaders such as Vodafone, T-Mobile, China Mobile, SFR

and Bouygues Telecom, Option has played a significant role in the creation of the wireless

data card market and has been a major beneficiary of its growth. A crucial breakthrough was

achieved in 2003 when Vodafone alone shipped 167,000 GPRS PC cards manufactured by

Option. Vodafone was once more a key partner in 2004, when Option supported the launch

of 3G Mobile Connect Card with its GlobeTrotter 3G card across the mobile operator’s

European operations. In June the same year GlobeTrotter FUSION became the world’s first 3-

in-1 data card incorporating 3G, GPRS and WLAN. During the course of 2004 and 2005,

Option has added products supporting EDGE and HSDPA to its portfolio. At the same time a

growing number of mobile operators have launched 3G PC cards from the vendor.

Globletrotter 3G cards were offered by 36 UMTS operators in 20 European countries at the

end of 2005. Besides Vodafone’s European operations, customers include 3, KPN, Orange,

Swisscom, T-Mobile, TeliaSonera, Telenor and Wind. During 2006, Option expects to begin

shipping HSDPA PCI Express Mini Card modems to several leading notebook PC vendors.

3.3.3 Sierra Wireless

Sierra Wireless is a global leader in providing wireless communication solutions for mobile

professionals. The company was founded in Canada 1993 and was listed on NASDAQ in

1999. Revenues were up by 108 percent to US$ 59 million (€ 45 million) in 2004 and have

continued to grow significantly during 2005. The number of employees stands at

approximately 280 employees. Sierra Wireless offers a range of mobile data products

including PC cards, in-vehicle solutions, embedded modules and software solutions. Working

with leading solution integrators, service providers and hardware vendors, the company is

focused on creating solutions tailored to meet the customer's needs in several target markets,

including wireless M2M and mobile computing. Sierra Wireless has twelve years’ experience

from developing wireless communication modules and PC cards for ruggedised computing.

During 2005, the company announced partnerships with Qualcomm, Nortel and Nokia

around development, testing and marketing of HSDPA product lines. Sierra Wireless was

then first to market with commercially available PC cards and embedded modules based on

the technology.



Sierra Wireless offers two product lines for wireless mobile computing:

• AirCard is a family of wireless PC cards for notebook and handheld computers.

Networks currently supported are PCS, CDMA 1x, CDMA2000 EV-DO, EDGE, GPRS,

GSM, UMTS and HSDPA. AirCard A850/A860 support HSDPA Category 12 with peak

data rates of 1.8 Mbps for the North American and European markets respectively.

• MC-series PCI Express Mini Card is a line of embedded modules for portable

computers, designed for EV-DO and HSDPA networks. MC8755/8765 both support

HSDPA Category 12 and are also compatible with EDGE and GPRS.

Sierra Wireless AirCard AirCard PC cards are marketed by a host of mobile operators in

Americas and Asia-Pacific, including Bell Mobility, Cingular Wireless, China Unicom, Movilnet,

Sprint, Telecom New Zealand, Telstra, TELUS and Verizon Wireless. Sunrise became the first

major UMTS operator in Europe to launch the AirCard in December 2005. Two months earlier,

Sierra Wireless also supplied AirCard to O2 for the first commercial launch of HSDPA by Manx

Telecom on Isle of Man. Moreover the company was the first supplier of PC cards supporting

Cingular Wireless’ premier 3G network launch in the US. Among others HP and Lenovo have

incorporated MC-series PCI Express Mini Card modules for EV-DO networks several

notebook models for the US market.

3.3.4 Huawei

Huawei is emerging as a major player on the global telecom market. Worldwide, Huawei has

about 35,000 employees. The company specialises in the research and development,

production, sales and marketing of telecoms equipment, providing innovative, customised

equipment, service and solutions in different telecom fields. Huawei’s product portfolio

comprises wireless products, network products and value added services, as well as mobile

and fixed terminals. At the end of 2005 the company had supplied equipment for 10

commercial UMTS networks around the world. In November 2005 the company launched a

range of 3G terminals worldwide, which includes a wireless data card. Optimus and Tele2

Sweden were the first network operators to offer the Huawei E600 UMTS/GPRS PC card in

Europe. Huawei will also begin shipping HSDPA PC cards during 2006.



Figure 3.8 – 3G PC card brands, by operator (Western and Central Europe Q4-2005)

Country Operator Brand(s) Country Operator Brand(s)

Austria 3 Option Italy Vodafone Option

A1 Novatel Wind Option

ONE Option Netherlands KPN Option

T-Mobile Option Vodafone Option

Belgium Mobistar Novatel Norway Netcom Option

Proximus Novatel/Option Telenor Option

Czech Rep. Eurotel Novatel Poland ERA Novatel/Option

Denmark 3 Option Polkomtel Option

TDC Novatel Portugal Optimus Huawei

Finland Elisa Novatel TMN Option

TeliaSonera Option Vodafone Novatel/Option

France Orange Novatel/Option Slovenia Mobitel Novatel/Option

SFR Option Spain Movistar Novatel

Germany E-Plus Novatel Vodafone Novatel/Option

O2 Novatel Sweden 3 Option

T-Mobile Option Tele2 Huawei

Vodafone Novatel/Option Telia Option

Greece Cosmote Option Vodafone Option

Vodafone Option Switzerland Orange Novatel/Option

Hungary Pannon GSM Option Sunrise Sierra Wireless

T-Mobile Option Swisscom Option

Vodafone Option UK 3 Option

Ireland O2 Novatel O2 Novatel

Vodafone Option T-Mobile Novatel

Italy 3 Novatel Orange Novatel

TIM Novatel Vodafone Option




3.3.5 Motorola

Motorola is a Fortune 100 global communications leader that provides seamless mobility

products and solutions across broadband, embedded systems and wireless networks. The

company had sales of US$ 31.3 billion (€ 25.0 billion) in 2004 and around 68,000 employees.

Today, Motorola is comprised of four businesses: Connected Home Solutions, Government

& Enterprise Mobility Solutions, Mobile Devices and Networks. Mobile Devices designs,

manufactures, sells and services wireless subscriber and server equipment for cellular

systems, portable energy storage products and systems, servers and software solutions and

related software and accessory products. Motorola is the world’s second largest supplier of

mobile terminals with an estimated market share of 18.7 percent in Q3-2005. The company

announced its first 3G wireless data card Motorola D1000 in 2004. Early in 2006, Motorola

D1100 will become the company’s first wireless PC card for HSDPA. The product will support

Category 6 and offer peak data rates up to 3.6 Mbps.

3.3.6 Seiko Instruments

Seiko Instruments Inc. (SII) is one of the world's leading watch manufacturers and part of the

Seiko Group. The company is also engaged in the development and manufacturing of wide

range of innovative goods from consumer products like electronic dictionaries etc to mobile

information terminals including computer peripherals, CAE/CAD/CAM systems, electronic

components, analytical and measuring instruments and intelligent robots. SII has developed

a CompactFlash Type II UMTS data card for Vodafone Japan. VC701SI weighs 23 grams and

can be used with PDAs as well as notebooks, if using a PC card adapter. The product has

been verified by leading computer vendors, including Apple, Casio Dell, HP, Lenovo, Sony,

and Toshiba. Drivers are available for most leading operating systems, including Windows

XP, Mac OS X and Linux (Zaurus SL-C3000).

3.3.7 Sony Ericsson

Sony Ericsson is a global provider of mobile multimedia devices, including feature-rich

phones and accessories, PC cards and M2M solutions. Established in 2001 as a joint venture

between Ericsson and Sony, the group employs approximately 5,000 people around the

world. Global management is in the UK and R&D, is in Sweden, Japan, China, the UK and the

US. Sony Ericsson ranked as the world’s forth largest mobile handset vendor in 2005. So far,



Sony Ericsson has focused its data card portfolio on EDGE technology. The company was

first to introduce EDGE PC cards on the US market in 2003 and later supplied an embedded

module for a Sony VAIO notebook model that was launched on the US market. At the

beginning of 2006, Sony Ericsson offered nine PC card products, supporting HSCSD, GPRS,

EDGE, UMTS and WLAN. GC95 is a GPRS/EDGE/UMTS device for the global market, while

GC99 in addition supports WLAN. During 2006, the company expects to release UMTS

embedded modules in the PCI Express Mini form factor. Sony Ericsson does not currently

supply 3G PC cards to any mobile operator on the European market, even though it provides

2.5G products.



Chapter 4

Market profiles: Western and Central

Europe 4 Market profiles: Western and Central Europe

At the beginning of 2006, UMTS data services were provided by over 50 network operators

and service providers in Western and Central Europe. There are significant price differences

between markets, suggesting that pricing models have not yet reached full maturity. The

lowest average prices are found in Portugal and the Czech Republic where unlimited Internet

access over UMTS networks is available for less than € 30 per month. At the other end of the

scale is a host of countries including Finland, France, Greece, Ireland, Slovenia and the UK

where the monthly cost for 1 GB data is € 99 or higher. Eurotel Praha offers the cheapest tariff

in the whole of Europe for UMTS data services, € 21 per month for unlimited data traffic.

Orange Switzerland, Optimus, TMN and Vodafone Portugal charge less than € 30 per month

for 10 GB data or more. Mobitel in Slovenia offers 5 GB traffic for a monthly charge of € 104.

Data bundles including 1 GB per month are the most common tariffs for UMTS PC card

services. More than half of the European 3G operators offer this type of pricing plan with

notable differences. O2 UK has the highest monthly charge of £ 75 (€ 112). 3 Sweden only

takes € 17 per month for the same service, which however does not include a PC card. Tele2

Sweden also charges less than € 30 for this type of service and 3 Italy provides 750 MB for €

25 per month. On average a 1 GB service package including a PC card costs € 69 per month.

Some markets have developed unique pricing plans that are not available elsewhere. O2 and

Vodafone have launched low cost UMTS broadband services on consumer market in

Germany. Vodafone offers 5 GB or 60 hours Internet access at the customer’s home

premises only for € 36.91 per month. O2 provides 2 GB or 40 hours for € 27.51 per month.

Time based rather than volume based tariffs are available in Belgium, France, Germany and

Spain. Vodafone Italy is the only operator offering session based pricing plans.



Figure 4.1 – Comparison of 3G data tariffs (Western and Central Europe, Q4-2005)

Tariff Operator Monthly fee

2 GB and higher Average € 45.60

Highest: Mobitel € 104.00

Wind € 90.00

Netcom € 63.00

Telia Mobile € 63.00

Telenor Mobil € 59.00

Lowest: TMN € 29.90

Sunrise € 29.00

Orange Switzerland € 29.00

Vodafone Portugal € 24.70

Eurotel Praha € 21.00

1 GB Average € 69.00

Highest: O2 UK € 112.00

T-Mobile UK € 105.00

Vodafone Greece € 99.00

Vodafone Ireland € 99.00

O2 Germany € 98.00

Lowest: Vodafone Sweden € 42.00

E-Plus € 39.95

T-Mobile Hungary € 39.50

Tele2 Sweden € 26.00

3 Sweden € 17.00




4.1 Austria

Austria has a population of 8.2 million people and approximately 1.1 million notebook PCs.

New sales of portable computers outnumbered desktop sales in 2005 and reached 541,000

units, which corresponded to a market share of 58 percent. Austria has four licensed UMTS

network operators who all have launched commercial 3G services. HSDPA deployments are

planned by several operators in 2006. Each operator offer several options for PC data card

users. 3 Austria has three different tariffs that include 500 MB, 30 MB and 0 MB respectively.

3Data L is a high volume package costing € 29 per month. 3ReLoad Data has no fixed

monthly fee and costs € 0.80 per MB. A1 offers two tariffs Mobiles Breitband 500 and 1000

including 500 MB and 1 GB for € 39 and € 69 respectively. ONE XL offers the highest data

volume in the Austrian market, 1 GB for € 55 per month. T-Mobile provides two tariffs – Mobile

Internet and Mobile Internet Small, including 250 MB and 676 MB respectively.

Figure 4.2 – 3G data tariffs, Austria (Q4-2005)

Operator Tariff Traffic Activation Per month Extra MB

3 3Data L 500 MB € 3 € 29 € 0.20

3Data S 30 MB € 129 € 7 € 0.40

3ReLoad Data 0 MB € 249 € 0 € 0.80

A1 Mobiles Bretiband 500 500 MB € 0/99 € 39 € 0.50

Mobiles Bretiband 1000 1 GB € 0/99 € 69 € 0.50

ONE Starter 100 MB € 399 € 10 € 0.40

Surfer 500 MB € 79 € 35 € 0.25

XL 1 GB € 79 € 55 € 0.20

T-Mobile Mobile Internet Small 250 MB € 0 € 21 € 0.50

Mobile Internet 676 MB € 0 € 35 € 0.20

Source: 3, A1, ONE and T-Mobile



4.2 Belgium

Belgium has a population of 10.3 million people and approximately 1.2 million notebook PCs.

New sales of portable computers equalled desktop sales in 2005 and reached 520,000 units.

Proximus has launched a nationwide UMTS network in the country, while Mobistar is

gradually upgrading its network. A third 3G license is held by KPN’s Belgian subsidiary BASE.

Proximus offers both volume and time based tariffs for UMTS data services. Mobile Internet

No Limit allows data transfers up to 1 GB per month at a cost of € 55. For an additional

charge of € 10 per month, customers also get unlimited access to Proximus’ WLAN hotspots.

Mobile Internet 3h is a time based tariff providing up to 3 hours of Internet access per month

for € 15. Additional hours cost € 5. Mobile Internet Access is a third tariff with no monthly fee

that cost € 4.10 per MB. Mobistar Mobile Office Card includes 15 MB of data for a fixed

charge if € 28 and an extra charge of € 2.00 per MB for exceeding data packets.

Figure 4.3 – 3G data tariffs, Belgium (Q4-2005)


Mobistar Mobile Office Card 15 MB € 225 € 28 € 2.00

Proximus Mobile Internet No Limit 1 GB € 0 € 55 N/A

Mobile Internet 10 MB 10 MB N/A € 15 € 1.50

Mobile Internet 3h 3 h N/A € 15 € 5/h

Mobile Internet Access N/A € 0 € 0 € 4.10

Source: Mobistar and Proximus

4.3 Czech Republic

The Czech Republic has a population of 10.2 million people and approximately 400,000

notebook PCs. New sales of desktop computers heavily outnumbered portables in 2005,

which accounted for less than 30 percent of the total market. Eurotel Praha was the first

Czech operator to launch a commercial UMTS network. Internet Mobile is an unlimited 3G

data service from Eurotel Praha, costing CZK 599 (€ 21) per month. T-Mobile began rolling



out UMTS TDD across the country in late 2005. The service called Internet 4G is supported by

both PC cards and desktop modems based on the UMTS TDD standard. For CZK 699 (€ 24)

per month customers can transfer up to 3 GB at data rates up to 512 kbps. Internet 4G

Premium increases the maximum threshold for data services to 1 Mbps and allows data traffic

up to 10 GB data at a cost of CZK 999 (€ 34) per month during an introductory period. Both

Eurotel Praha and T-Mobile are preparing to deploy HSDPA from 2006 and onwards.

4.4 Denmark

Denmark has a population of 5.4 million people and about 1.0 million notebook PCs. New

sales of portable computers were slightly smaller than desktop sales in 2005 and reached

467,000 units, which corresponded to a market share of 46 percent. Two Danish mobile

operators, 3 Denmark and TDC, have so far launched UMTS networks. 3 Denmark offers

three tariffs – NetConnect Flex, Fri and På 3. NetConnect Flex has no fixed monthly fee and

costs approximately € 0.80 per MB for data transferred in 3’s network. NetConnect Fri offers

up to 1 GB of data on both 3’s and TDC’s 3G networks for DKK 639 (€ 86) per month.

NetConnect På 3 allows up to 2 GB for just DKK 239 (€ 32) per month, but only when using

3’s network. TDC Flexdata Fri and MobilFlex Data Plus both allow customers up to 1 GB data

traffic for DKK 400 and DKK 500 (€ 54/67) respectively. The more expensive tariff also

includes access to TDC’s national network of WLAN hotspots.

Figure 4.4 – 3G data tariffs, Denmark (Q4-2005)


3 NetConnect Flex 0 MB € 0 € 5 € 0.80

NetConnect Free 1 GB € 0 € 86 € 0.40

NetConnect På 3 2 GB € 0 € 32 € 0.40

TDC Flexdata Fri 1 GB € 4 € 54 € 0.40

MobilFlex Data Plus 1 GB € 10 € 67 € 0.40

MobilFlex Data 0 MB € 10 € 5 € 0.80

Source: 3 and TDC



4.5 Finland

Finland has a population of 5.2 million people and approximately 800,000 notebook PCs.

New sales of portable computers were slightly larger than desktop sales in 2005 and reached

415,000 units, which corresponded to a market share of 53 percent. All licensed 3G

operators, Elisa, Finnet and Sonera have launched commercial UMTS networks in Finland.

Elisa and Finnet have publicly announced plans to deploy HSDPA. Additionally, Finnish

authorities have awarded nationwide frequency spectrum licenses to Digita and SkyWeb for

FLASH-OFDM and UMTS-TDD respectively. Elisa and Sonera offer almost identical tariffs for

3G data services. Elisa Prodata 500 and Sonera Connect Data 500 cost € 84.95 and € 84.90

per month respectively. Sonera however only offers 200 MB in data traffic for € 35 per month,

compared to 250 MB allowed for the same price by Elisa.

Figure 4.5 – 3G data tariffs, Finland (Q4-2005)


Elisa Prodata 10 10 MB € 7.89 € 6.10 € 1.22

Prodata 250 250 MB € 7.89 € 35.40 € 0.79

Prodata 500 500 MB € 7.89 € 84.95 € 0.79

Sonera Connect Data 10 10 MB € 2.85 € 5.99 € 1.49

Connect Data 200 200 MB € 12.32 € 34.90 € 1.49

Connect Data 500 500 MB € 12.32 € 84.90 € 1.49

Source: Elisa and Sonera

4.6 France

France has a population of 60.1 million people and approximately 6.3 million notebook PCs.

New sales of portable computers were lower than desktop sales in 2005 and reached 3.0

million units, which corresponded to a market share of 42 percent. Bouygues Telecom will

join Orange and SFR as a UMTS network operator in France during 2006. All three operators

have announced plans to eventually upgrade their networks with HSDPA. French 3G



operators have opted for time based, rather than volume based tariffs for UMTS data services.

Orange offers customers to choose between three tariffs providing 3, 10 and unlimited hours

of Internet access at rates ranging between € 29 and € 70. SFR provides five tariffs, giving

users between 2 and 16 hours to transfer data volumes between 100 and 500 MB. Both

operators include access to WLAN hotspots as part of their services. Figure 4.6 – 3G data tariffs, France (Q4-2005)

Operator Tariff Traffic Activation Per month

Orange Mobile PC Card 3G 3h 3 h € 0 € 29

Mobile PC Card 3G 10h 10 h € 0 € 50

Mobile PC Card 3G Unlimited 720 h € 0 € 70

SFR Mobile Connect Card 2h 2 h/100 MB € 0 € 24

Mobile Connect Card 4h 4 h/250 MB € 0 € 30




Source: Orange and SFR

4.7 Germany

Germany has a population of 82.4 million people and approximately 11.7 million notebook

PCs. Portables overtook desktops with a narrow margin in 2005, when sales reached 5.8

million units, which corresponded to a market share of 53 percent. E-Plus, O2, T-Mobile and

Vodafone are the four 3G network operators in Germany. O2, and Vodafone provide both 3G

data cards and 3G desktop modems, whereas E-Plus and T-Mobile only offer 3G data cards.

Tariffs are greatly flexible, with all operators providing numerous pricing plans based either on

data volume or usage time. O2 and Vodafone even have special high volume tariffs for

consumers that enable inexpensive Internet access in the home premises. Similar offerings

for voice traffic had previously become highly popular on the German market.



Figure 4.7 – 3G data tariffs, Germany (Q4-2005)


E-Plus Online Volume Flat Unlimited € 24.95 € 39.95 N/A

Online Volume 50 50 MB € 24.95 € 25.82 € 1.28

Online Time 10 10 h € 24.95 € 25.82 € 0.13/m

O2 Data 30/Time 2 30 MB/2h € 21.50 € 16.50 € 1.50

Data 200/Time 10 200 MB/10h € 21.50 € 33.00 € 1.20

Data 500/Time 30 500 MB/30h € 21.50 € 58.00 € 0.80

Data 1000/Time 100 1 GB/100 h € 21.50 € 98.00 € 0.50

Surf@home Vol. 500 500 MB € 107.70 € 17.22 € 0.13

Surf@home Vol. 1000 1 GB € 64.59 € 21.53 € 0.13

Surf@home Vol. 2000 2 GB € 64.59 € 27.57 € 0.13

Surf@home Time 40 40 h € 64.59 € 27.57 € 0.026/m

T-Mobile Data 30 30 MB € 0.00 € 8.62 € 1.64

Data 150 150 MB € 0.00 € 25.86 € 1.12

Data Giga 1 GB € 0.00 € 94.83 € 0.69

Time 120 2 h € 0.00 € 8.62 € 0.164/m

Time 600 10 h € 0.00 € 25.86 € 0.112/m

Time 6000 100 h € 0.00 € 92.83 € 0.069/m

Vodafone Volume L 30 MB € 1.00 € 8.50 € 1.60

Volume XL 200 MB € 1.00 € 30.00 € 1.10

Volume XXL 500 MB € 1.00 € 60.00 € 0.80

Volume XXL 1000 1 GB € 1.00 € 90.00 € 0.50

Volume XXL Intl. 100 MB € 1.00 € 87.00 € 2.00

Time XXL 100 100 h € 1.00 € 90.00 € 0.50/m

Zuhause Web Time 60 h € 1.00 € 36.91 € 0.25

Zuhause Web Volume 5 GB € 1.00 € 36.91 € 0.25

Source: E-Plus, O2, T-Mobile and Vodafone



E-Plus markets the most competitive data tariff on the German market. Online Volume Flat

allows unlimited access to 3G data services for a monthly fee of € 39.95. Occasional users

can choose between Online Time 10 and Online Volume 50, allowing 10 hours or 50 MB

respectively, for € 25.82 per month.

O2 targets business customers, as well as consumers with its 3G data offerings. Data Pack 30,

200, 500 and 1,000 are enterprise oriented data volume tariffs, allowing for between 30 MB

and 1 GB of data traffic for € 16.50 to € 98.00 per month. O2 surf@home is a consumer

oriented service providing users with Internet access through a combined UMTS modem and

WLAN router that is installed at home. Surf@home customers can choose between time and

volume based pricing plans, including up to 40 hours or 2 GB for around € 28 per month. O2

has publicly announced plans to upgrade its German network with HSDPA in late 2006.

T-Mobile also offers both time and volume based tariffs. Data Giga and Time 6000 include up

to 1 GB of data and 100 hours respectively for around € 94 per month. The least expensive

offerings Data 30 and Time 120 include 30 MB and 2 hours respectively for € 8.62 per month.

T-Mobile has begun offering upgradeable PC cards that will support HSDPA when the service

is deployed in early 2006.

Vodafone Germany reported 139,000 customers using Mobile Connect Card by the end of

August 2005. Like its competitors, Vodafone offers both time and volume based tariffs.

Monthly fees range from € 8.50 for 2 hours or 30 MB to € 90 for 100 hours or 1 GB. Volume

XXL International is a special tariff for international roaming. For a flat rate of € 87 per month,

business customers can transfer up to 100 MB over any Vodafone 3G network around the

world. Vodafone Zuhause Web is a consumer oriented offering including 60 hours or 5 GB at

the home premises for a monthly charge of € 36.91. Germany is likely to be one of the first

markets where Vodafone deploys HSDPA.

4.8 Greece

Greece has a population of 10.7 million people and around 460,000 notebook PCs. New

sales of desktop computers heavily outnumbered portables in 2005, which accounted for 31

percent of the total market. Cosmote, TIM and Vodafone have launched commercial UMTS



networks in Greece. At the beginning of 2006, Cosmote and Vodafone provided 3G data card

services. Both operators offer volume tariffs including up to 1 GB of data. Vodafone Mobile

Connect Card 1 GB is priced at € 99 per month.

Figure 4.8 – 3G data tariffs, Greece (Q4-2005)


Cosmote Datapack 10 10 MB N/A N/A N/A

Datapack Basic 130 130 MB N/A N/A N/A

Vodafone Mobile Connect Card 1 MB € 0 € 5 € 2.40

Mobile Connect Card 150 MB € 0 € 60 € 1.17

Mobile Connect Card 1 GB € 0 € 99 € 0.98

Source: Cosmote and Vodafone

4.9 Hungary

Hungary has a population of 10.0 million people and approximately 300,000 notebook PCs.

New sales of desktop computers heavily outnumbered portables in 2005, which accounted

for less than 30 percent of the total market. T-Mobile was the first of the country’s three

licensed 3G operators to launch PC data card services in August 2005. Mobilinternet Csomag

1000 includes 1 GB data for HUF 9990 (€ 39.50) per month. Pannon GSM and Vodafone also

launched UMTS network services later in the year. Vodafone Mobile Connect Card is

provided in Hungary according to an escalating pricing plan. A basic charge of HUF 3,125 (€

12) allows up to 200 MB per month. When 200 MB is exceeded, another 300 MB are added

for a surcharge of HUF 3,875 (€ 16). Between 500 MB and 1 GB cost an additional HUF 6,000

(€ 23), adding up to a total monthly cost for 1 GB data of HUF 13,000 (€ 51). Pannon GSM

applies similar rates to 3G PC card services. Volume packages of 500 MB and 1 GB are

available for HUF 6,990 and HUF 12,990 (€ 28/51) respectively. HSDPA trials were initiated by

among others Pannon GSM in late 2005 and commercial deployments are expected by

several Hungarian operators from 2006 onwards.



Figure 4.9 – 3G data tariffs, Hungary (Q4-2005)


Pannon GSM Mobile Data 50 50 MB € 0 € 8 € 0.40

Mobile Data 250 250 MB € 0 € 16 € 0.20

Mobile Data 500 500 MB € 0 € 28 € 0.10

Mobile Data 1000 1 GB € 0 € 51 € 0.10

T-Mobile Net 50 50 MB € 0 € 8 € 0.40

Net 300 300 MB € 0 € 24 € 0.40

Net 1000 1000 MB € 0 € 39.50 € 0.40

Vodafone Mobile Connect Card 0-200 MB € 0 € 12 € N/A

Mobile Connect Card 0.2-0.5GB € 0 € 28 € N/A

Mobile Connect Card 0.5-1 GB € 0 € 51 € 67/GB

Source: Pannon GSM, T-Mobile and Vodafone

4.10 Ireland

Ireland has a population of 3.9 million people and around 350,000 notebook PCs. New sales

of desktop computers outnumbered portables in 2005, with the market share for portables

standing at around 35 percent. 3 Ireland, O2 and Vodafone operate UMTS mobile networks in

Ireland, which can be expected to be upgraded with HSDPA during 2006 or 2007. O2 and

Vodafone provide 3G data card services with volume based tariffs. O2 offers three pricing

plans, Data Card Light, Medium and Heavy. Data Card Light has no fixed monthly fee and

only includes a variable charge of € 1.25 to € 1.75 per MB, depending on volume. Data Card

Heavy is an unlimited package, available for € 125 per month. There is no limit to how much

data customers can transfer, but O2 applies a fair usage policy of 1.5 GB a month and

reserves the right to charge for data exceeding this limit. Vodafone Ireland offers four pricing

plans for Mobile Connect Card, including between 20 MB and 1 GB, going from € 25 to € 99

per month.



Figure 4.10 – 3G data tariffs, Ireland (Q4-2005)


O2 Data Card Light 0 MB € 0 € 0 € 1.75

Data Card Medium 75 MB € 0 € 60 € 1.75

Data Card Heavy 1.5 GB € 0 € 125 N/A




Mobile Connect Card 1 GB € 0 € 99 € 0.75

Source: O2 and Vodafone

4.11 Italy

Italy has a population of 58.0 million people and approximately 5.1 million notebook PCs.

About 2.6 million portable computers – corresponding to 62 percent of the total market – were

shipped in Italy during 2005, the highest figure for the whole of Europe. In Q3-2005 there

were 7.2 million 3G subscriptions in the country. 3 Italy is the leading 3G operator, followed

by Vodafone, TIM and Wind that only launched its network in the second half of 2005. 3 Italy,

TIM and Vodafone are all eventually planning to upgrade their networks with HSDPA.

3 Italy offers a 3G data tariff based on usage per day. Tre.Dati includes up to 25 MB per day

for a monthly charge of € 25. TIM provides two volume based tariffs for data cards. Maxi TIM

Data Pro includes up to 100 MB for a monthly fee of € 15. Data on 500 includes 500 MB for

€45 per month. Wind offers three pricing plans – LeonardoMega 10, 500 and All Inclusive, of

which the latter offers unlimited access for € 90 per month. Vodafone Italy enables customers

to choose between volume and session based tariffs for combined UMTS and WLAN

services. Data Daily cost € 10 per month plus a variable charge of € 3 per Internet session

using up to 5 MB data. Data 15/35 Session includes 15 or 70 sessions for € 23 and € 43 per

month respectively. Vodafone Italy also offers standard volume based tariffs costing up to €

60 per month for 1 GB data.



Figure 4.11 – 3G data tariffs, Italy (Q4-2005)


3 Tre.Dati 25 MB/day € 49 € 25 € 0.60

TIM Maxi TIM Data Pro 100 MB € 0 € 15 € 2.50

Data on 500 500 MB € 0 € 45 € 1.00

Vodafone Data One 0 MB € 0 € 10 € 2.00

Data Daily 0 MB € 0 € 10 € 3/day 5MB

Data 15 Vol. 20 MB € 0 € 23 € 0.75

Data 15 Sess. 15 sessions € 0 € 23 € 1/sess.

Data 35 Vol. 100 MB € 0 € 43 € 0.35

Data 35 Sess. 70 sessions € 0 € 43 € 0.50/sess.

Data Free 1 GB € 0 € 60 € 0.35

Travel Tariff 75 100 MB € 0 € 75 € 5.00

Wind LeonardoMega 10 10 MB € 0 € 2 € 1.00

LeonardoMega 500 500 MB € 0 € 30 € 1.00

LenoardoMega All Unlimited € 0 € 90 N/A

Source: 3, TIM, Vodafone and Wind

4.12 The Netherlands

The Netherlands has a population of 16.2 million people and approximately 825,000

notebook PCs. New sales of portable computers outnumbered desktop sales in 2005 and

reached 1.4 million units, which corresponded to a market share of 56 percent. At the

beginning of 2006 only KPN and Vodafone had launched commercial UMTS networks in the

Netherlands. 3G licenses are also held by Orange and T-Mobile. Several Dutch operators are

expected to introduce HSDPA from 2006 and onwards.



KPN offers three data volume based tariffs for 3G PC cards. Internet Go is a pricing plan for

occasional users, costing € 10 per month plus € 0.50 per MB. Flat Fee and Flat Fee Lite are

designed for heavy users, including 1 GB or 200 MB respectively for € 75 or € 45 per month.

If the data limit is exceeded, the network speed is reduced to 64 kbps. For an additional

monthly fee of € 5, customers get an international price of € 2.50 per MB when roaming on

networks participating in the Starmap alliance.

Vodafone also offers three data volume based tariffs for 3G PC cards. Data Basis is intended

for occasional users who pay € 10 per month plus € 0.50 per MB. Data Plus includes 200 MB

and Data Flat Fee includes 1 GB for € 50 and € 75 respectively per month. International

travellers can choose between two options including 5 MB or 100 MB in Vodafone Partner

Networks for € 10 or € 75 per month. Figure 4.12 – 3G data tariffs, the Netherlands (Q4-2005)


KPN Internet Go 0 MB € 150 € 10 € 0.50

Flat Fee Lite 200 MB € 0 € 45 64 kbps

Flat Fee 1 GB € 0 € 75 64 kbps

Vodafone Data Basis 0 MB € 179 € 10 € 0.50

Data Plus 200 MB € 59 € 50 € 0.50

Data Flat Fee 1 GB € 0 € 75 € 0.25

Source: KPN and Vodafone

4.13 Norway

Norway has a population of 4.5 million people and approximately 1.0 million notebook PCs.

New sales of portable computers exceeded desktop sales in 2005 and reached 531,000

units, which corresponded to a market share of 58 percent. There are three licensed UMTS

network operators in Norway, of which two have launched their networks. Netcom and

Telenor have started ahead of 3 Norway. Both operators also provide 3G PC card services for

notebooks. Netcom offers two tariffs including 20 MB or unlimited data for NOK 125 or NOK



499 (€ 16/63) per month. Telenor only provides one pricing plan – Fastpris Data, which

include unlimited data traffic for NOK 469 (€ 59) per month. During 2006, Telenor expects to

start deploying HSDPA.

Figure 4.13 – 3G data tariffs, Norway (Q4-2005)


Netcom Connect 20 UMTS 20 MB € 313 € 16 € 0.60

Connect UMTS Unlimited € 313 € 63 N/A

Telenor Fastpris Data Unlimited € 263 € 59 N/A

Source: Netcom and Telenor

4.14 Poland

Poland has a population of 38.6 million people and approximately 1.0 million notebook PCs.


for less than 30 percent of the total market of 1.6 million units. ERA and Polkomtel are the first

two operators offering 3G services on the Polish market. UMTS licenses are also held by

Orange and the domestic fixed-line telecom operator Netia. ERA and Polkomtel market 3G

PC cards and offer volume based pricing plans for UMTS data services as extra options for

their business customers. ERA charges PLN 1.38 (€ 0.36) per MB or PLN 49 (€ 12.80) for a 60

MB data bundle. Polkomtel offers a fixed monthly fee of PLN 49 (€ 12.80) plus PLN 0.30 (€

0.08) per MB.

4.15 Portugal

Portugal has a population of 10.1 million people and around 600,000 notebook PCs. New

sales of desktop computers outnumbered portables in 2005, with the market share for

portables standing at around 35 percent of the total market of 600,000 units. Optimus, TMN

and Vodafone provide 3G networks services on the Portuguese market. Optimus and

Vodafone have announced plans to upgrade their networks with HSDPA. Fierce competition



has resulted in all three operators offering 10 GB of data per month for less than € 30.

Kanguru is Optimus’ brand for PC card services. Customers are allowed up to 10 GB data in

daytime and an unlimited amount during nighttimes. TMN offers a 10 GB bundle for € 29.90

per month, as well as variable time and volume based tariffs without fixed fees. Accesso Base

cost € 5.00 per MB, while Accesso Standard cost € 0.01 per minute. Vodafone has outbidded

its competitors with Pack XL, a pricing plan including 10 GB for only € 24.70. Previously a 1

GB package was priced at € 85 per month. International travellers can get 100 MB of data

traffic in Vodafone Partner Network for another € 75 per month. Besides PC-cards, Vodafone

Portugal markets Router3G, a wireless router developed by Linksys that accommodates a

Mobile Connect Card.

Figure 4.14 – 3G data tariffs, Portugal (Q4-2005)


Optimus Kanguru Empresa 10 GB € 0 € 30 € 2.10

Kanguru Particular 10 GB € 99 € 30 € 0.05

TMN Accesso Giga 10 GB € 150 € 29.90 € 0.05

Accesso Base 0 € 0 € 0.00 € 5.00

Accesso Standard 0 € 0 € 0.00 € 0.01/m

Vodafone Pack XL 10 GB € 124 € 24.70 € 0.04

Pacote Roaming 100 MB € 0 € 75 € 256

Source: Optimus, TMN and Vodafone

4.16 Slovakia

Slovakia has a population of 5.4 million people and approximately 100,000 notebook PCs.


for less than 30 percent of the total market. Neither of the licensed 3G network operators in

the country, Orange and T-Mobile, has yet launched commercial networks. Orange Slovakia

began trialling HSDPA, as well as UMTS TDD in October 2005. T-Mobile Slovakia is planning

a nationwide OFDM-FLASH network service in the country.



4.17 Slovenia

Slovenia has a population of 1.9 million people and just 60,000 notebook PCs. Sales of

portable computers accounted for less than 30 percent of the total market volume of around

80,000 units. Mobitel is the only UMTS network operator in Slovenia and provides PC card

data services. The operator’s standard UMTS tariff priced at SIT 15,000 (€ 63) per month

includes 200 MB of data. For an additional charge of SIT 5,000 (€ 20), customers can

increase their quota to 700 MB. Very frequent users can instead add SIT 9,900 (€ 41) to get

up to 5 GB of data.

Figure 4.15 – 3G data tariffs, Spain (Q4-2005)


Movistar Modul Datos B 15 MB € 0 € 15 € 1.00

Modul Datos C 100 MB € 0 € 30 € 0.37

Tarifa Plana 1.5 GB € 0 € 58 € 0.04

Vodafone Volumen LDP 15 MB € 0 € 15 € 1.00

Volumen LDP-M 50 MB € 0 € 25 € 0.50

Volumen LDP-XL 200 MB € 0 € 50 € 0.50

Tarifa Plana Internet 1 GB € 0 € 59 € 0.25

Tiempo LDP 5 h € 0 € 35 € 0.25/m

Source: Movistar and Vodafone

4.18 Spain

Spain has a population of 40.2 million people and approximately 3.7 million notebook PCs.

New sales of portable computers exceeded desktop sales in 2005 and reached 1.8 million

units, which corresponded to a market share of 59 percent. Amena, Movistar and Vodafone

provide 3G network services on the Spanish market, but only the latter two offers PC data

card services and eventually plan to introduce HSDPA. Movistar offers three volume based

tariffs including 15 MB, 100 MB and 1.5 GB respectively. Monthly fees range from € 15 to €



58, with variable charges for data exceeding the included traffic decreasing from € 1.00 to €

0.04. Vodafone offers four volume based price plans including 15 MB, 50 MB, 200 MB and 1

GB respectively. Tarifa Plana Internet allows up to 1 GB of data traffic for a monthly fee of €

59. Vodafone also offers a time based tariff with 5 hours included for € 35 per month plus an

charge of € 0.25 per minute for additional usage time.

4.19 Sweden

Sweden has a population of 9.0 million people and approximately 1.4 million notebook PCs.

New sales of portable computers were slightly lower than desktop sales in 2005 and reached

725,000 units, which corresponded to a market share of 49 percent. 3 Sweden, Tele2, Telia

and Vodafone provide 3G network services on the Swedish market. 3 Sweden plans to

introduce HSDPA during 2006. Each of the operators offer PC card data services. 3 Sweden

offers 3Mobilt Bredband that includes 1 GB or unlimited data traffic, depending on the pricing

plan. 3Mobilt Bredband is available for SEK 151 or SEK 399 (€ 17 or € 42) per month. Tele2

provides Mobilt Bredband, which includes 1 GB data for a monthly fee of SEK 240 (€ 26).

Telia offers a combined UMTS and WLAN service for business customers. Telia Connect

allows up to 3 GB data in UMTS networks and unlimited usage of WLAN hotspots. Vodafone

offers two tariffs for Mobile Connect Card. For SEK 279 (€ 30) per month, customers get 200

MB of data and for SEK 399 (€ 63) per month the quota is unlimited, even though Vodafone

reserves the right to reduce the network speed if monthly traffic exceeds 1 GB. Figure 4.16 – 3G data tariffs, Sweden (Q4-2005)


3 3Mobilt Bredband 1 GB € 105 € 17 € 0.13

3Mobilt Bredband Unlimited € 0 € 42 N/A

Tele2 Mobilt Bredband 1 GB € 109 € 26 € 0.25

Telia Connect 3 GB € 0 € 63 € 0.13


Mobile Connect Card Unlimited € 0 € 42 64 kbps

Source: 3, Tele2, Telia and Vodafone



4.20 Switzerland

Switzerland has a population of 7.6 million people and approximately 1.6 million notebook

PCs. New sales of portable computers exceeded desktop sales in 2005 and reached 770,000

units, which corresponded to a market share of 58 percent. All three 3G network operators on

the Swiss market – Orange, Sunrise and Swisscom – focus on high volume data tariffs for PC

cards. Orange UMTS Mobile Office offers unlimited 3G and WLAN usage for CHF 49 (€ 29)

per month. Sunrise Mobiles Breitband includes 2 GB for the same price. Swisscom Data

Option 1000 allows 1 GB data for CHF 79 (€ 51) per month.

Figure 4.17 – 3G data tariffs, Switzerland (Q4-2005)


Orange UMTS Mobile Office Unlimited € 0.50 € 29 N/A

Sunrise Mobiles Breitband 2 GB € 0.50 € 29 N/A

Swisscom Data Option 1000 1 GB € 26 € 51 € 0.32

Source: Orange, Sunrise and Swisscom

4.21 UK

The UK has a population of 60.1 million people and approximately 8.3 million notebook PCs.

New sales of portable computers were lower than desktop sales in 2005 and reached 4.1

million units, which corresponded to a market share of 44 percent. There are four UMTS

network operators in the UK – 3 UK, O2, Orange and Vodafone. HSDPA deployments are

expected to begin in 2006. At the end of Q3-2005 there were approximately 110,000 active 3G

PC cards in the UK market, where Vodafone had a market share exceeding 80 percent.

3 UK offers one pricing plan for PC cards. Wireless Web 512 includes 0.5 GB data for £ 49

per month (€ 73). O2 provides a number of volume based tariffs including between 5 MB and

1 GB data monthly. Data 5 is intended for occasional users and costs £ 8 (€ 12) per month

plus £ 1.00 (€ 1.50) per MB. Data Max 1024 allows data traffic up to 1 GB for a monthly fee of



£ 75 (€ 112). If the limit is exceeded, O2 reserves the right to reduce network speed to 64

kbps. Orange’s premium offering is Mobile Office Max 05. The pricing plan allows up to 1 GB

data for a monthly fee of £ 45 (€ 67).

Figure 4.18 – 3G data tariffs, UK (Q4-2005)


3 Wireless Web 512 512 MB € 0 € 73 N/A

O2 Data 5 5 MB € 0 € 12 € 1.50

Data 75 75 MB € 0 € 28 € 1.10

Data 200 200 MB € 0 € 37 € 1.10

Data 512 512 MB € 0 € 60 € 1.10

Data Max 1024 1 GB € 0 € 112 64 kbps

Orange Pay as You Consume 0 MB € 380 € 0 N/A

Mobile Office Max 05 1 GB € 127 € 67 N/A

T-Mobile Starter 7 MB € 227 € 15 € 3.80

Medium 100 MB € 160 € 30 € 1.30

High 500 MB € 139 € 60 € 0.95

Power 1 GB € 37 € 105 € 0.95

Vodafone Data 250 250 MB € 90 € 44 € 1.75

Data Unlimited 1 GB € 0 € 79 N/A

Data Travel 1 GB € 0 € 167 N/A

Source: 3, O2, Orange and Vodafone

T-Mobile offers four 3G PC card tariffs on the UK market. Starter includes 7 MB for a fixed

monthly fee of £ 10 (€ 15) plus a variable charge of £ 2.55 (€ 3.80) for exceeding data.

Medium and High includes 100 MB and 500 MB respectively for £ 22 or £ 44 (€ 30/60) per

month. Power allows up to 1 GB at a monthly rate of £ 77 (€ 105). Vodafone offers two data

volume packages, Data 250 and Data Unlimited for £ 29.38 and £ 52.88 respectively (€

44/79). Data Travel also adds 100 MB data when roaming in Vodafone Partner networks.



Chapter 5

Market forecast and strategic issues 5 Market forecast and strategic issues PC cards for data communication were the first UMTS products that were launched on the

European market by leading operators such as T-Mobile and Vodafone. When introducing

HSDPA, PC cards are once again in focus. Sometimes the high share of PC card users in the

3G customer base is pointed out as a failure for the technology. 3G cannot be a success

unless consumers upgrade their 2.5G handsets, the argument goes. That point of view fails to

perceive the expansion of the mobile communications market that is achieved with 3G.

Customers may no longer have one, but two mobile subscriptions – one for their handset and

one for their computer. As notebooks overtake desktops in the PC market, the most relevant

question for the mobile industry is how all these new mobile units should be connected to the

Internet. Clearly WLAN has a firmly rooted position at home and office locations, but what

about everywhere else? Mobile computing is a massive opportunity for operators to improve

data revenues in both the enterprise and consumer segments. Even if the mobile Internet

user experience was found poor on a handset, it is very much improved on a notebook.

5.1 Potential market size

Soaring shipments of notebook PCs on the European market create very favourable market

conditions for 3G data services. The addressable market is expected to grow by 140 percent

from 49.3 million in 2005 to an estimated 118.4 million in 2009, measured as the number of

notebooks less than three years old. Notebook shipments are forecasted to grow by 16.5

percent year on year from 24.7 million units in 2006 to 45.5 million units in 2009. At the same

time consumers are expected to overtake enterprises as the largest customer group for

notebooks. In 2005, enterprises accounted for 60 percent of the PC market volume in Europe,

while consumers stood for 40 percent.



Figure 5.1 – Notebook population and shipments forecast (Europe 2005–2009)

0

20

40

60

80

100

120

140

2005 2006 2007 2008 2009

Mill

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s

Unitsshipped

Notebooks<3 yrs


5.2 UMTS and HSDPA broadband market forecasts

UMTS/HSDPA is set to be the primary wireless broadband technology platform for mobile

users in Europe. Global acceptance, high performance and unrivalled coverage are key

advantages unmatched by any competitor. PC cards are expected to dominate this market

segment until around 2008, when embedded modules will become the leading form factor.

Mobile technologies also stand a chance at stationary locations, even though competition

from DSL and cable as well as emerging BWA technologies is very fierce. In this segment,

UMTS/HSDPA will be just one among several similar alternatives. Desktop modems are

expected to constitute around 10 percent of the 3G data units shipped in 2006.



5.2.1 Can the WLAN success story be repeated?

Wireless Internet has been introduced once before. In circa 1999, WLAN routers and network

cards first appeared on the market and two years later shipments reached nearly 10 million

units. During 2002 to 2004 the share of notebooks shipped with embedded WLAN chips

soared from 10 percent to 75 percent and is now nearing 100 percent. A similar development

is conceivable for UMTS/HSDPA. Devices were first introduced in Japan in 2001, but did not

reach the European market before 2004. Volumes are beginning to build up and notebooks

with embedded 3G communication modules are expected to reach the European markets

soon. The situation is in many ways similar to that for WLAN around 2001. If everything falls

into place HSDPA chips could be a common feature on notebooks by 2009.

Obviously there are however differences between the technologies that must be taken into

consideration. In particular, the adoption of HSDPA will depend on customers’ preparedness

to pay extra for mobile broadband services. While WLAN is free to use at home or office

where an Internet connection is available, HSDPA requires customers to subscribe to a

relatively expensive service. Pay as you go service concepts will be crucial for creating a

mass market for HSDPA equipment.

Furthermore there are technical as well as financial aspects to take into consideration. WLAN

achieved mass-market penetration very quickly largely thanks to the decision by Intel to

include 802.11x chipsets on its notebook motherboards. Mobile communication devices

require thorough testing with operators in order to function properly in wireless network

environments. Every notebook model with an embedded 3G module will consequently need

to be tested with mobile networks on the markets that the device is intended for. This process

is both costly and time consuming. Royalties related to IPR may also be a barrier against

mass market adoption of notebooks with embedded HSDPA. Notebook models with

integrated 3G communication capabilities will be most likely more expensive to produce,

whereas the cost for adding a WLAN chipset is neglectable.



5.2.2 PC card shipments forecast

PC cards will remain the dominant form factor for 3G data devices in the coming few years.

Shipments grew by an astounding 160 percent year on year from 2004 to 2005 and reached

around 1.3 million units on the European market. Part of the uptake was generated by

stockpiling of HSDPA ready devices in preparation for launches of HSDPA networks in the

first half of 2006. Commercial launches of UMTS by a string of operators also stimulated

demand. Growth is expected to a peak of around 5 million units in 2008, before starting to

decline. Devices will have a short lifecycle due to the rapid technology development. First

generation HSDPA PC cards will become available on the European market in Q1-2006,

followed by second generation cards from Q2-2006 and third generation cards, supporting

up to 7.2 Mbps, are expected in Q1-2007. Volume shipments typically begin in 3 to 6 months

after a product is released. Prior to the launch of HSDPA, upgradeable UMTS PC cards have

been supplied by operators to enable smooth migration. Similarly, second generation HSDPA

PC cards will be possible to upgrade with third generation firmware. Due to the technology

development, most PC cards can be expected to be replaced within 12 to 24 months.

Figure 5.2 – Shipments of UMTS/HSDPA PC cards (Europe 2005–2009)

0,0

1,0

2,0

3,0

4,0

5,0

6,0

2005 2006 2007 2008 2009

Mill

ion

s




PC cards are convenient for mobile operators for several reasons. Just like handsets they can

be heavily subsidised when customers subscribe to a service for a prolonged period of time.

Like any terminal they can also be locked to a specific network. Another benefit is the ability

to target the entire notebook PC population in Europe. As shown in figure 5.1 above, the

addressable market for PC cards is growing rapidly. At the end of 2006 approximately 71.2

million notebooks less than 3 years old will be in use, compared 49.3 million in Q4-2005.

5.2.3 Embedded modules shipments forecast

Embedded modules will appear on the European market in some volume already in 2006. All

leading notebooks vendors except Apple are reportedly planning to launch HSDPA ready

models in Europe as well as North America. Lenovo released two Thinkpad models with

embedded EV-DO with Verizon Wireless in the US already in late 2005. The share of

notebooks shipped with embedded HSDPA is expected to grow steadily in Europe from

around 1 percent in 2006 to 15 percent in 2008, which will correspond to around 6.5 million

units. At that time embedded modules will surpass PC cards as the leading form factor for 3G

data devices. From 2009 and onwards, HSDPA is expected to increasingly become a

standard feature included on most notebooks. The leap from 10 percent to 75 percent will

however most probably take a couple of more years than it took for WLAN, due to the more

complex technological and business environment. Embedded 3G modules require much

integration work and testing from PC makers, but also have distinguished advantages such

as lower power consumption. Higher demands on system design will keep embedded

modules one generation behind PC cards in the technology development. Third generation

units supporting peak data rates of 7.2 Mbps are not likely to appear in any significant

numbers before 2008.

Business models for taking embedded HSDPA to market are not yet fully worked out between

operators and vendors. Tier 1 PC makers have negotiated bounties from leading operators on

key European markets when customers activate 3G data subscriptions. But question marks

still remain over how marketing activities should be coordinated and who should make the

offerings. For instance enterprise customers can be expected to request the ability to deploy

SIM-cards from their existing telecommunications service provider on their notebooks,

independently of any relationships between the vendor and other mobile operators. Over time



subsidies will however become less important as the price of HSDPA chipsets declines. Once

support for WLAN and HSDPA, as well as WiMAX and other wireless technologies can be

integrated on a single chipset, notebook vendors will be able to offer products capable of

communicating over a wide range of networks at very low cost. That will lead to a growing

population of devices capable of using HSDPA broadband services, even though everyone

may not actually use them.

Figure 5.3 – Shipments of notebooks with embedded HSDPA (Europe 2005–2009)

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2

4

6

8

10

12

14

2005 2006 2007 2008 2009

Mill

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0%

5%

10%

15%

20%

25%

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Units

%


5.2.4 UMTS and HSDPA mobile data services forecast

Strong growth for UMTS PC card shipments in 2005 reflects a rapidly growing market for 3G

data services. There is however still a considerable slack between unit shipments and the

number of active subscribers. Major mobile operators keep between 1 to 3 months’

forecasted demand in stock. Moreover there are significant stockpiles among retailers.

Consequently the customer base for 3G data service only increased by 600,000 subscribers

during 2005 to around 1 million at the year end, even though 1.3 million PC cards were

shipped in the period. Germany was the largest geographical market with around 350,000



active subscriptions, followed by the UK, France, Spain and Italy. For 2006, a strong yearly

growth rate of over 150 percent will be possible to sustain, backed by commercial launches

of HSDPA on key markets. Volume shipments of embedded modules could bring about an

explosion in the number of subscribers between 2007 and 2009. The number of active

subscriptions is then expected to grow from 5.3 million to 19.1 million. Many of the new

customers will however be occasional users who subscribe to usage based plans, as

opposed to more expensive flat rate high volume plans.

Figure 5.4 – UMTS and HSDPA mobile data service subscribers (Europe 2005–2009)

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5

10

15

20

25

2005 2006 2007 2008 2009

Mill

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Revenues generated by UMTS data services on the European market reached € 250 million

in 2005. ARPU levels for 3G data cards are generally higher than for voice centric handsets.

Some operators charge monthly fees exceeding € 100 for unlimited data traffic. Heavy users

on average spend around € 60 per month on data services, compared to € 40 for medium

users. Even though ARPU levels can be expected to gradually fall to a convergence point with

DSL and cable broadband services, total revenues are expected to grow by on average 73

percent annually to reach € 3.67 billion in 2009.



Figure 5.5 – UMTS and HSDPA mobile data service revenues (Europe 2005–2009)

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2005 2006 2007 2008 2009

€ M

illio

ns


5.3 Market opportunity for mobile operators

UMTS and HSDPA data solutions provide mobile operators with the opportunity to offer

broadband Internet access to notebook users. Regardless whether they are part of the

Internet generation, for whom a life offline would be unthinkable, or part of professional

organisations that rely on a constant flow of business critical information, they desire the

ability to go online anywhere at any time. Their expectations of an Internet connection is that it

should be fast, convenient to use and reliable. Uptime and quality of service are equally

important as the bandwidth. Long network delays and unreliable connections are what

separate existing UMTS data services from 250 kbps DSL. International roaming capabilities

are highly interesting for business users, as well as consumers who frequently travel the

world. The 3G data proposition will never become attractive if incorrectly priced. A wireless

300 kbps Internet service cannot cost many times more than a 500 kbps DSL connection.

Moreover, the average Internet user has never heard of data volume based charging.



5.3.1 Market segmentation

3G data services can appeal to all customer segments, from large enterprises through SMEs

and SOHO to consumers. Initial offerings targeted the enterprise segment where price

sensitivity is low, but which is also limited in size and characterised by slower take up of new

technology. Major innovations in communication enabled by the Internet such as instant

messaging and IP telephony have evolved among consumers rather than enterprises and

once they are introduced into corporations, adoption is slow. The most interesting

developments of 3G data services are indeed found in the consumer segment. A consumer

broadband offering for instance contributed to increasing the number of Vodafone Mobile

Connect Card subscriptions in Germany from 55,000 in November 2004 to 139,000 in August

2005. Low cost consumer offerings have also been launched by among others the 3G

operators on the Portuguese market.

5.3.2 Pricing and conditions

From a consumer perspective, 3G wireless broadband is little more than another Internet

access service with vastly improved coverage. In order to reach out to this huge market

segment, mobile operators must adopt pricing models used by ISPs. Usage based pricing of

broadband services is a concept that was abandoned by fixed line ISPs at the same time as

dial-up technology. Fixed line ISPs offer network capacity services with guaranteed minimum

and maximum bandwidth. Price differentiation is achieved through different network speeds,

since heavy users tend to demand higher capacity. Mobile operators currently seek to

achieve price differentiation in the same way as they used to do for voice traffic, by applying

usage based fees to data traffic. Such pricing models however risk creating a terrible

mismatch between the cost of a broadband service and the customer’s perceived value. An

email with a 10 Mb attachment is usually not ten times more valuable than one with a 1 Mb

attachment. Neither does a graphics intense website necessarily generate more value for the

user than one with no images at all. Solutions that reduce the quality of web graphic also

have negative effects on the user experience.

Before addressing the consumer market, mobile operators therefore need to revise their

pricing models. Capacity, not data quantity, is the most appropriate service differentiator.

Fixed line ISPs offer many different network speeds, e.g. 250 kbps, 500 kbps, 2,000 kbps etc.



Mobile operators can do the same with EDGE, UMTS and HSDPA 1.8/3.6 Mbps. Indeed

introductory offerings with up to 1 GB of data traffic included are a step in this direction, if

only difficult to comprehend for consumers. If any usage based tariff should be applied, time

or session based pricing is to be preferred over data volume pricing. Time based tariffs are

more intuitive and easy to understand for the occasional user. Internet cafés all over the world

successfully charge their customers for the time they spend online. 3G broadband can bring

the same business model into mobile networks.

5.3.3 Conclusions and strategic advice

When creating UMTS and HSDPA service offerings for the mass market, a number of things

must be taken into consideration. First and foremost there will be several usage profiles, with

a heavy emphasis on occasional users. Attracting occasional users is essential for creating a

mass market for 3G mobile computing. Mobile Internet access for notebooks is an excellent

opportunity to offset declining voice revenues with higher data revenues. WLAN and WiMAX

should be seen as complementary technologies that can boost network speed and capacity

at strategic locations. EDGE and GPRS are equally important as fallback technologies outside

3G coverage. When bringing services to the market, mobile operators should consider

partnerships with both notebook vendors and fixed line ISPs around SIM cards for embedded

wireless modules and ubiquitous Internet access.

A 3G mobile data service portfolio should preferably incorporate the following elements:

• Flat rate broadband services for notebook users who regularly access the Internet

outside their home or office premises.

• Time based Internet access for notebook users who occasionally access the Internet

outside their home or office premises.

• Dual SIM-card packages enabling customers to use a single subscription for both

handset and data card usage.



• Integrated service packages supporting seamless roaming with multiple access

technologies – both WLAN/WiMAX at hotspot locations and EDGE/GPRS outside 3G

coverage.

• Attractive pricing comparable to DSL and cable service with similar performance.



Chapter 6

Case studies: Operator strategies for

3G data services and HSDPA 6 Operator strategies for 3G data services and HSDPA

Operators on all five continents have initiated trials and deployments of HSDPA technology.

The first commercial networks were launched in late 2005 by Cingular Wireless in the US and

Manx Telecom on Isle of Man. HSDPA enables operators to leverage existing 3G wireless

broadband services with improved data rates and quality of service. 3, O2, Orange, T-Mobile

and Vodafone among others and are expected to launch HSDPA on several European

markets starting from Q1-2006. Worldwide, commercial launches are expected in for instance

Australia, Hong Kong, Israel, Japan, Malaysia, Qatar, South Africa and South Korea. As the

global number of active 3G data card now exceeds 1 million, a new profitable market niche

has been firmly established in the global wireless industry.

6.1 3 Group

3 Group holds 3G licenses in 11 markets worldwide and announced 10 million subscribers

worldwide in October 2005. 3 has commenced operations in Australia, Austria, Denmark,

Hong Kong, Israel, Italy, Sweden and the UK. Italy is the largest individual market where the

company has 4.8 million customers, followed by the UK with 3.3 million. The combined

customer base in Austria, Denmark and Sweden is around 0.7 million. 3 was the first 3G

operator in most of these markets and is positioning itself as an attractive brand for early

adopters of the latest technology. Therefore HSDPA will play a vital role in the next phase of

the operator’s strategic plan, not only as a wireless broadband technology, but also for

mobile multimedia. 3 is reportedly planning to upgrade all European networks with the

technology, but launch dates have not yet been confirmed. An early launch in Sweden

planned for Q1-2006 was postponed until later in the year for technical reasons.



3 Group is competing on the European market with low pricing as one of its key advantages.

The same strategy is evident for 3G PC card services from the operator. On four out of five

European markets, 3 offers the cheapest tariff for a comparable service package. 3 Sweden

provides the least expensive 1 GB pricing plan in all of Europe, costing only € 17 per month.

In the UK, the operator however offers the most expensive 500 MB pricing plan, undercut by

both O2 and T-Mobile. The tariff offered in Australia is in line with price levels seen in Europe,

while a considerably higher price level is maintained in Hong Kong.

Figure 6.1 – Selected 3G data tariffs, 3 Group (Q4-2005)

Country Tariff Traffic Activation Per month Extra MB

Australia Mobile Broadband 1 GB € 0 € 49 € 0.19

Austria 3Data L 500 MB € 3 € 29 € 0.20

Denmark NetConnect Free 1 GB € 0 € 86 € 0.40

Hong Kong VPN Connect 200 MB € 10 € 107 € 1.07

Italy Tre.Dati 25 MB/day € 49 € 25 € 0.60

Sweden 3Mobilt Bredband 1 GB € 105 € 17 € 0.13

UK Wireless Web 512 512 MB € 0 € 73 N/A

Source: 3 Group

6.2 Cingular Wireless

Cingular Wireless is the largest wireless company in the US, with more than 52 million

subscribers who use the nation's largest digital voice and data network. The company is a

joint venture between the domestic wireless divisions of SBC and BellSouth. SBC owns 60

percent of the company and BellSouth owns 40 percent, based on the value of the assets

both contributed to the venture. Cingular offers a nationwide GSM/GPRS footprint covering

270 million people across the US. Additionally the company maintains a TDMA network. In

2003, Cingular launched the world’s first commercial deployment of EDGE, with average data

rates sufficient to support a range of advanced data services, including streaming audio and



video, fast Internet access, and large file downloads. The EDGE network covers 13,000 cities

and towns, along with 65,000 kilometres of highways. Data rate range from 70 kbps to 135

kbps with burst speeds up to 200 kbps.

Figure 6.2 – Cingular HSDPA PC data cards

Sierra Wireless AirCard 860 (left) and Novatel Wireless Merlin U730 (right).

Source: Sierra Wireless and Novatel Wireless

Cingular Wireless launched the world’s first widely available commercial HSDPA deployment

by a major network operator in December 2005. Initially the network covered 35 million

people in 16 metropolitan areas throughout the US – Boston, Baltimore, Washington DC,

Chicago, Dallas, Austin, Houston, Salt Lake City, Phoenix, Las Vegas, San Diego, San Jose,

San Francisco, Portland, Tacoma and Seattle. Cingular will continue to extend the network

rapidly in 2006 together with Ericsson that supplies the HSDPA solution. BroadbandConnect

is the first service available for the new network, offering EDGE/HSDPA wireless broadband.

At the launch Cingular offered special rate plans providing qualified customers with unlimited

data use for US$ 59.99 (€ 50.00) per month and MB bucket plans starting at US$ 19.90 (€



16.70). Using PC data cards supplied by Sierra Wireless and later also Novatel Wireless,

customers can achieve average data rates of 400 to 700 kbps, with bursts over 1 Mbps.

Moreover, Dell has announced plans to launch notebook PC models with embedded HSDPA

modules supporting Cingular’s network in the second half of 2006.

6.3 O2

O2 has mobile network operators in the UK, Germany and Ireland, and operations in Isle of

Man. The group had over 25 million subscribers when acquired by Telefónica in January

2006. O2 was the first company in the world to launch and rollout a commercial GPRS

network, and later implemented the first 3G network in Europe through its subsidiary Manx

Telecom in Isle of Man. Manx Telecom recorded a new first when launching a commercial

HSDPA network on November 1, 2005, constructed in partnership with Lucent Technologies.

Initially the network offers peak data speeds of 1.2 Mbps, limited by first generation data

devices. Pronto Connect 3G Data Only is offered in three packages Connect 10, Connect 100

and Connect 1024. Connect 1024 costs £ 88.13 (€ 131) per month including VAT and

includes 1 GB of data per month with additional data charged at £ 0.60 (€ 0.90) per Mb. O2

will roll out HSDPA across its three national 3G networks by Q3-2006, the network operator

has revealed. By then O2 claims two unnamed notebook makers will have integrated HSDPA

into their machines.

Figure 6.3 – HSDPA data tariffs, Manx Telecom (Q4-2005)

Tariff Traffic Activation Per month Extra MB

Pronto Connect 10 10 MB € 73 € 14 € 0.90

Pronto Connect 100 100 MB € 73 € 60 € 0.90

Pronto Connect 1024 1 GB € 73 € 131 € 0.90

Source: Manx Telecom



O2 first introduced 3G PC card services in connection to the launches of commercial UMTS

networks across its markets. Ireland was first to go in December 2003, followed by Germany

and the UK in March and September 2004, respectively. O2 has the highest monthly charges

for PC card service among all 3G network operators in Europe. Indeed the company has not

managed to attract many customers neither in the UK nor Ireland where it offers data bundles

of 1 GB and 1.5 GB for € 112 and € 125 respectively. Instead O2 Germany is spearheading

the group’s 3G wireless broadband strategy with the consumer oriented offering surf@home.

For only € 27.57 per month customers get up to 2 GB data traffic or 40 hours Internet access

when at home. A similar offering providing discount on mobile voice traffic in the home zone

has attracted 6 million customers in Germany. Surf@home requires a combined 3G desktop

modem and wireless router. The first device model was developed by O2 Germany in

cooperation with Novatel Wireless. Later O2 Germany also added Option GlobeSurfer to its

product portfolio. Through the service, O2 Germany can compete directly with ISDN and DSL

ISPs who offer the same network speed or even lower for a similar price. The company

believes there is a potential market for Surf@home of 14 million households in Germany.

When launching the service, O2 Germany expected to sell 50,000 units in the first year.

Figure 6.4 – Surf@home pricing plan (Q4-2005)

Package Traffic Activation Per month Additional traffic

Surf@home Volume 500 500 MB € 107.70 € 17.22 € 0.13/MB

Surf@home Volume 1000 1 GB € 64.59 € 21.53 € 0.13/MB

Surf@home Volume 2000 2 GB € 64.59 € 27.57 € 0.13/MB

Surf@home Time 10 10 h € 107.70 € 17.22 € 0.026/min



Source: O2 Germany



6.4 Orange

Orange was launched in the UK on 28 April, 1994 and was subsequently acquired by France

Telecom in the aftermaths of Vodafone’s acquisition of Orange’s previous majority owner

Mannesmann in August 2000. Now an international company, Orange operates in 18

countries with over 55 million customers worldwide. To date, the Orange group companies

have been awarded 3G licenses in the UK, France, the Netherlands, Poland, Switzerland, and

Slovakia.

Orange has so far launched commercial UMTS networks in France, Switzerland and the UK.

3G Mobile Office Card became the first 3G product offered by Orange when launched on the

UK market in July 2004. Two months later, the product was also introduced in France, while

consumer handsets only became available in December 2004. At the end of 2005, Orange

France announced it had achieved 1 million 3G subscribers. Orange Switzerland commenced

with commercial UMTS network services in September 2005, offering two PC cards from

Option and Novatel Wireless, as well as four handsets. At the launch, the operator offered the

lowest tariff for 3G wireless broadband in Western Europe, just € 29 per month for unlimited

data traffic. Orange France offers a similar service for € 70 per month and in the UK, the

largest available data bundle is 1 GB for € 67 per month. Beside mobile network traffic,

Orange also includes free access to the operator’s WLAN hotspots in its 3G PC card

packages.

EDGE is an important technology for Orange’s mobile broadband services in France, as well

as other markets. While 3G coverage will be limited in the country in the near future, over 90

percent of the business customers will be covered by EDGE. Trials of new network

technologies such as HSDPA and UMTS TDD have commenced in France and Slovakia.

Orange Slovakia tested a HSDPA solution from Nortel as well as a UMTS TDD solution from

IPWireless during the second half of 2005. The operator sees advantages with both

technologies and is likely to eventually deploy them in parallel.



6.5 T-Mobile

T-Mobile International is one of the world’s leading companies in mobile communications. As

one of Deutsche Telekom’s three strategic business units, T-Mobile concentrates on the most

dynamic markets in Europe and the US. By the end of June 2005, more than 80 million

customers were served in the nine T-Mobile markets. In the EU markets, T-Mobile is the

number one mobile operator in Germany, Hungary and the Czech Republic, number two in

Austria and Slovakia and number three in the Netherlands and the UK. The company has its

main customer base in Germany and the UK where it serves 28.8 million subscribers and 16.1

million subscribers respectively. Deutsche Telekom is also the leading ISP in Germany with

7.3 million broadband customers. Outside the EU, T-Mobile has operations in Croatia and the

US. T-Mobile USA and its affiliates cover 95 percent of the US population.

T-Mobile introduced 3G services across all markets in Western Europe except the

Netherlands in early 2004. Hungary was the scene of the first commercial launch of UMTS by

T-Mobile in Central Europe in August 2005. Like most other 3G operators, T-Mobile first

provided PC cards only in Austria, Germany and the UK, before handsets were widely

available. In Hungary the company launched data cards and handsets simultaneously.

Pricing plans for data service vary significantly between the countries. Customers in Austria

and Hungary are offered bundles of 676 MB or 1 GB for monthly rates of € 35 and € 39

respectively. Gigabyte packages in Germany and the UK cost € 95 and € 105 per month. Low

pricing has attracted a higher share of customers in the consumer segment in Austria than in

other countries, where business customers are dominant. T-Mobile ranks as the number two

provider of UMTS data services on the European market behind Vodafone.

T-Mobile strives to offer customers Internet access with seamless mobility. To achieve this

goal, the company plans to deploy a range of wireless network technologies. Besides UMTS

networks, T-Mobile already operates around 20,000 WLAN hotspots worldwide. Moreover the

company launched a UMTS TDD wireless broadband network service in the Czech Republic

in late 2005. Branded Internet 4G, the service will eventually provide nationwide coverage and

peak data rates up to 1 Mbps. Neighboring Slovakia will get a nationwide wireless broadband

network service based on Flarion’s FLASH-OFDM technology with similar capabilities. T-



Mobile anticipates higher demand for wireless broadband services in Central Europe where

fixed line communication networks are generally less developed.

When it comes to Western Europe, T-Mobile prefers HSDPA to become its primary wireless

broadband technology. Extensive testing of the technology was initiated during 2005 in a

number of countries. For instance, T-Mobile Austria started an HSDPA field trial where test

customers were able to take a closer look at the new technology. The test area covered a

greater part of the inner city districts of Vienna. T-Mobile has announced that the official

launch of HSDPA in Germany, Austria, the Netherlands and the UK will take place at CeBIT in

March 2006. In the Netherlands, the company will go directly to HSDPA without taking the

step over UMTS. 3G networks in Central Europe will be upgraded a few months later.

T-Mobile subsidiaries in Austria and Germany began marketing HSDPA ready PC cards

supplied by Option in late 2005 as a preparation for commercial launch of the technology in

early 2006. Moreover T-Mobile Germany announced a collaboration with Fujitsu Siemens

around notebook PCs with HSDPA connectivity in January 2006. An initial offering comprising

the AMILO series notebook and the Mobile DSL card 1800 will be followed by notebooks in

the LIFEBOOK series featuring embedded HSDPA technology. For 2006, the operator targets

to sell 300,000 additional HSDPA PC data cards. Initially all T-Mobile operators will offer peak

data rates of 1.8 Mbps. When a new generation of devices becomes available in 2007, the

operator expects to double the network speed to 3.6 Mbps. Ultimately it believes data rates of

up to 7.2 Mbps will be attainable.

6.6 Vodafone

Vodafone is the largest mobile telecommunications network company in the world, with

equity interests in 27 countries and Partner Networks in a further 15 countries. At

30 September 2005, Vodafone had approximately 171 million proportionate customers

worldwide. Currently, Vodafone operates 3G networks in nine European countries –

Germany, Italy, the Netherlands, Portugal, Spain, Hungary, Greece, Ireland and the UK. The

Swedish operation was acquired by Telenor in January 2006. Group revenues reached € 65

billion in the fiscal year ending 2005 and the number of employees is around 60,000 people.



Figure 6.5 – Subscriber growth for Vodafone MCC (Q4-2004–Q3-2005)

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000

Q4-2004 Q1-2005 Q2-2005 Q3-2005

Source: Vodafone

Vodafone’s 3G Mobile Connect Card, a customised version of the Option GlobeTrotter 3G

data card, was launched across seven countries in February 2004 as the first 3G product in

the history of the company. Subsequently it was introduced into a total of 16 Vodafone

subsidiaries, associated companies and partner networks. By the end of 2004, Vodafone had

more than 170,000 3G-enabled Mobile Connect customers. Moreover 230,000 customers

were using Vodafone’s GPRS Mobile Connect Card. As of August 2005, the 3G customer

base had grown by 135 percent and reached 400,000 subscribers. Germany was the largest

market with 139,000 active subscriptions, compared to 558,000 Vodafone live! 3G handsets.

From November 2004 to August 2005, 84,000 new subscriptions were added. Largely the

growth was related to the introduction of the consumer oriented 3G wireless broadband

service Zuhause Web. Launched in March 2005, the service is more expensive than O2

surf@home, but includes more traffic – up to 5 GB or 100 hours. Vodafone Germany reported

a monthly ARPU of € 40 for Zuhause Web in August 2005. Linksys had developed a wireless

router with an internal card slot for Vodafone’s Mobile Connect Card for the service, which

has later also been launched by among others Vodafone Portugal and Vodacom in South

Africa. Moreover, Vodafone is working with a number of PC manufacturers to bring notebooks



with built-in, cost effective and secure HSDPA/3G/GPRS mobile data connectivity enabling

customers to access the internet, email and corporate applications wherever, whenever.

Customers will be able to connect to Vodafone's mobile networks using a pre-installed

desktop connection manager, delivering an integrated, easy to set up and simple to use high

speed data connectivity solution. Figure 6.6 – Vodafone MCC subscriptions, by country (August 2005)

Country Subscribers

Germany 139,000

UK 91,000

Spain 50,000

Italy 35,000

Others 85,000

Total 400,000


Pricing of 3G Mobile Connect Card varies significantly between the Vodafone networks.

Vodafone Portugal offers one of the lowest rates available in Europe, € 24.70 per month for 10

GB data. Its sister operations in Greece and Ireland on the other hand charges € 99 per

month for 1 GB. Volume based tariffs are available in all markets, but time or session based

pricing plans are on offer in Germany, Italy and Spain. Leveraging the international footprint

of the Vodafone group, several subsidiaries offer roaming data packages of 100 MB for

business travellers. Vodafone Netherlands allows business travellers to rent EV-DO PC cards

for the partner network Verizon Wireless in the US without additional charges.

HSDPA is an important component in the Vodafone group’s strategy for the coming years.

Vodafone expects personal broadband services will be a source of revenue growth in the

future. Chief executive Arun Sarin said the company would become cross elastic and cross

competitive with DSL at the formal launch of the group’s HSDPA strategy in September 2005.

Field tests of the technology began in Japan in February 2005 and continued in several



European countries, including Germany, Italy, Portugal and the Netherlands later in the year.

Vodafone will begin deploying with friendly user tests and pre-commercial launches in the

first half of 2006. Germany will be among the first markets where a full commercial service is

launched. In Portugal the launch is planned for the second half of 2006.

UMTS AND HSDPA MOBILE COMPUTING GLOSSARY


Appendix

Glossary

16-QAM 16 Quadrature Amplitude Modulation.

2G Second generation cellular mobile systems, narrow band digital

radio technology.

2.5G Second and a half generation cellular mobile systems, mostly

packet switched technologies providing an evolutionary path for a

smooth migration to third generation services.

3G Third generation cellular mobile systems, wideband digital radio

technologies.

3GPP 3rd Generation Project Partnership.

AAA Authentication, Authorisation and Accounting.

APN Access Point Name.

ARPU Average Revenue Per User.

BWA Broadband Wireless Access.

CDMA Code Division Multiple Access.

CDR Call Detail Record.

DECT Digital Enhanced Cordless Telecommunications.

GLOSSARY UMTS AND HSDPA MOBILE COMPUTING


DNS Domain Name System.

DSL Digital Subscriber Line.

FDD Frequency Division Duplex.

EDGE Enhanced Data rates for Global Evolution.

EV-DO Evolution Data Only. 3G evolution of CDMA2000.

GGSN Gateway GPRS Support Node.

GPS Global Positioning System.

GPRS General Packet Radio Service

GSM Global System for Mobile communication.

HARQ Hybrid Automatic Repeat Request.

HLR Home Location Register.

HSCSD High Speed Circuit Switched Data.

HSDPA High Speed Downlink Packet Access.

HS-DSCH High Speed – Downlink Shared Channels.

HSUPA High Speed Uplink Packet Access.

IEEE Institute of Electrical and Electronics Engineers.

UMTS AND HSDPA MOBILE COMPUTING GLOSSARY


ISP Internet Service Provider.

ITU International Telecommunications Union.

LAN Local Area Network.

M2M Machine-to-machine.

OFDM Orthogonal Frequency Division Modulation.

PC Personal Computer.

PCI Peripheral Component Interface.

PCMCIA Personal Computer Memory Card International Association.

PCS Personal Communication Services.

PDA Personal Digital Assistant.

PDP Packet Data Protocol.

QoS Quality of Service.

QPSK Quadrante Personal Shift Keying.

RNC Radio Network Controller.

SCG Service Charging Gateway.

SCP Service Control Point.

GLOSSARY UMTS AND HSDPA MOBILE COMPUTING


SGSN Serving GPRS Support Node.

SIM Subscriber Identity Module.

TDD Time Division Duplex.

TDMA Time Division Multiple Access.

TTI Time Transmission Interval.

VoIP Voice over IP.

WCDMA Wideband Code Division Multiple Access. Air interface for the UMTS

3G standard.

WLAN Wireless Local Area Network.

WMAN Wireless Metropolitan Area Network.

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