Bangkok--24 Jun--Farh Agency Using wireless technology, broadband access can now be delivered at a cost of about EUR 1 or THB 50 per gigabyte. This changes the market dramatically, making it cost-effective for operators to provide broadband both to mobile and fixed users in rural areas. It could also spell the end of the digital divide as we know it. GOVERNMENTS AND INTERNATIONAL organizations are driving several initiatives to promote ubiquitous broadband access. The push to close the digital divide is now being assisted by recent developments in telecom technology. An example is the possibility — enabled by High-Speed Packet Access (HSPA) — to bring mass-market broadband services cost-effectively to rural areas. The rural capability of 3G is a key enabler for realizing the vision in which broadband internet connections are available to everybody. A WCDMA/HSPA network can provide multi services. In rural areas, it constitutes a cost-effective way of rapidly deploying broadband services, including: Mobile telephony Video telephony Basic data services, such as SMS and MMS Advanced mobile data services, such as music downloads Mobile small-screen TV streaming Mobile broadband, targeting laptop users Fixed wireless broadband (ADSL alternative) Fixed PSTN-equivalent telephony. Some of these services target traditional mobile handsets. Others, such as mobile broadband, are today primarily available to laptop users who require fast, mobile, always switched-on and ubiquitous internet access. Fixed-wireless broadband and PSTN telephony, on the other hand, provide non-mobile residential services over wireless mobile networks. As we have seen with telephony, mobility will expand the potential market for telecommunication services. This is also true for broadband services. They will target individuals rather than households, making the market for fixed-wireless broadband and mobile broadband much larger than for fixed broadband. Terminals cheaper by the day The prices of WCDMA/HSPA terminals are rapidly falling. In addition, new kinds of WCDMA/HSPA terminals are emerging. HSPA chipsets are available as PC-cards, as embedded modules in laptops, and in modems for fixed-wireless broadband access. This evolution clearly results in unmatched economies of scale for HSPA chipset manufacturers and terminal vendors, making it hard for suppliers favoring other wireless broadband technologies, such as WiMAX, to compete. The Signals Research Group predicts that by the end of 2008 the global market for HSPA will already be close to 200 million units, surpassing the market for ordinary WCDMA chipsets (130 million units). Operator business case Our analysis is based on the basic WCDMA/HSPA sites (on the 2100 MHz spectrum band), set up for three-sector cells with a radius of 12 km, yielding a cell area of 280 sq/km. We assume an average population density of 15 inhabitants per square kilometer, which gives a total cell population of approximately 4200. We assume the following three revenue-contributing services: mobile telephony/data/mobile TV, mobile broadband and fixed-wireless broadband. By applying conservative but realistic figures for service penetration and average revenue per user (ARPU), we can calculate annual site revenue. As is shown in table “Revenue model”, these services should generate annual revenue of more than EUR 1100 or THB 55,000 per square kilometer. On the cost side, we assume a site-related capital expenditure (CAPEX) of EUR 240,000 or THB 12,000,000 for upgrading an existing GSM 900 site to WCDMA/HSPA, plus upgrading the transmission network to support broadband services. We assume the recurring annual operating expenses (OPEX) to be 100 percent of the annual CAPEX depreciation. This gives us an annual total cost of ownership, using a six-year depreciation period, of less than EUR 285 or THB 14,250 per square kilometer, resulting in a gross operator margin exceeding 75 percent for the combined 3G service offering. Broadband and data services are significant contributors to revenue. The relative importance of these services is expected to grow over time as revenues from mobile voice services decrease. Extensive modeling and analysis have shown that it is possible to deliver broadband capacity via WCDMA/HSPA at an end-to-end cost of about EUR 1 or THB 50 per gigabyte. DSL service providers are required to pay a monthly fee to rent the copper access through local-loop unbundling. The fee differs from market to market, but is often equivalent to the total cost of providing an end user with a monthly data volume of 10 GB or more via WCDMA/HSPA (a normal ADSL subscriber consumes a data volume of 2-3 DB per month). We are therefore convinced, assuming that the average volume of consumed traffic is moderate, that 3G-enabled fixed wireless broadband is a cost-effective alternative to ADSL. The author: Bunyati Kirdniyom is Senior Manager specializing in 3G and its evolution. He has been working for Ericsson for 12 years holding management positions within business development within South East Asia. For further information, please contact: Mrs. Voraparn Eua-arporn (coco), GM of Farh Agency Tel: 0 26160991-2, Fax: 0 2616 0993, MB: 08 9144 4014, 08 1376 5927l Email: [email protected], [email protected]