Battle of the Generations

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1 Battle of the Generations nl

2 Disclaimer With respect to the information contained herein, other than information or opinions contained in presentations made by employees of Morgan Stanley & Co. Limited or any of its affiliates (together, MSDW ), no representation is made that such information is accurate or complete. No review, evaluation, investigation or editing of such information or any opinions contained herein has been undertaken by MSDW. MSDW takes no responsibility for any of such information or opinions. Any views or opinions expressed herein other than those expressed by employees of MSDW are solely those of the speakers and do not necessarily reflect the views or opinions of MSDW.

3 3g IS A DEAD DUCK

4 And what do we usually do with dead ducks

5 We sell them to the Chinese

6 OK, now the opportunities

7 Jacob van Kokswijk (52) lives in Eindhoven, the Netherlands. He is member of the Next Generation Network initiative(www.ngni.org) and involved with the user requirements for mobile internet. Jacob is consultant to Dutch Enterprise Telecom Organisation (www.btg.org) and researches for PhD the use of wireless PDA s as human-machine & -network interface in mobile society. Jacob is part-time strategic consultant in ICT and m-business to Cap Gemini Ernst & Young Netherlands, involved with 3G visionary, and joins the Artificial Intelligence team. He is the architect of the new multi channel e-governmental Customer Contact Center for Ministry of social affairs & employment. He designed a rotarefill concept with wireless PDA s for automatic stock refill and developed that for retail and wholesale use.

8 Let s be realistic (1) 3G is not ready yet: No attractive customer services None killer applications Network problems are not handled Devices are recalled several times Heavy problems with interstandard roaming and softhandover s None sufficient support with IPv6 (3G is propriety and was not meant to be full IP) Unknown health influences (every street lantern will be an antenna)

9 Let s be realistic (2) 3G is not necessary now: Technology push is over Customers are interested in multiuse devices (home, car and abroad) Companies are interested in wlan/ GPRS multistandard telecommuters wlan Hotspots are developed now; wlan PAN s will follow very soon Evolution of handheld PC s to smart wireless PDA s as bionic buddy Technology scope is 3 years: do 4G

10 Let s be realistic (3) 3G is not attractive anymore: No growth in devices for 2? years No real lifestyle oriented services Better compression techniques No shortness in network-capacity Anything you can do with 3G, you can do better with wireless LAN Upstream GSM, downstream DBA supplementary channels Digital Broadcasting t/s Bad time now to lend more money to build 3G full coverage networks

11 Let s be realistic (1) Operators are crying about the high licence costs, but didn t they show the public how good business GSM was? And which attractive niches could be brought by UMTS? Governmental auctions only reflect the exposure of the operators Remember 3G has not been developed for the customers needs, but for the expected operators capacity shortness 3G wasn t technology revolution, neither innovation

12 Agenda to restart 3G conserving the 3G licenses and using the UMTS frequencies for 4G full IP converting cellco's strategy to a connectivity mix of GSM, GPRS, wireless LAN (large homes, SMO's, networked hotspots e.g. Mc Donalds, airport, underground), bluetooth 2 (residential, automotive, SoHo) and the downstream supplementary broadband channels of DBA t/s. design multi standard devices, including the wireless PDA's, with the 'intelligence' to roam to all locally available networks and select which one is interesting (least cost, priority, QoS versus Quality of Message) to use.

13 Conserve the licences 1 Discuss with the governments the technical impossibility of exploiting the licensed services Invest on research for full IP wireless communications beyond 3G

14 COMMISSION OF THE EUROPEAN COMMUNITIES The Introduction of Third Generation Mobile Communications in the EU: State of Play and the Way Forward. Brussels, Commission recalls the great economic and societal potential that future wireless services will offer. COM(2001)141 final. Despite the current uncertainties of the markets, it should not be forgotten that 3G is built on very strong foundations and that in the foreseeable future it is the only viable, widely supported common platform for all broadband mobile Internet applications. 3G will offer users a new quality of wireless services based on global roaming capability: personalised services, transaction services, mobile data transmission, and location-based services. For these reasons, all concerned actors need to work together to tackle outstanding issues and concerns raised by the introduction of wireless data services in the European Union. Et cetera.

15 COMMISSION OF THE EUROPEAN COMMUNITIES

16 The evolution of mobile from 1G to 4G The Battle of the Generations 1 st Generation 2 nd Generation analog cellular (single band) digital (dual-mode, dual-band) Next Generations multi-mode, multi-band: software defined radio voice telecom only macro cell only outdoor coverage distinct from fixed PSTN business customer focus voice + data telecom macro / micro / pico cell seamless indoor / outdoor coverage complementary to fixed PSTN business + consumer evolve services market beyond traditional telecoms: higher speed data, improved voice, multi-media mobility integration with PSTN, complementary to IT offers (data networks, Internet, VPN): WINternet re-definition of traditional public/private sector roles & responsibilities total communications subscriber: virtual personal networking Technology Driven Service Market Driven

17 conserving the 3G licenses and using the UMTS frequencies for 4G full IP 3G: expensive, slow and unwanted what now? We paid for the licences. Let s be realistic, look forward! Take 3 actions: Conserve the licences by discussing the technical impossibility of exploiting the licenced services with the governments. Continue the development on 4G in the WWRF(Wireless World Research Forum) and its initial focus will be on research for wireless communications beyond 3G. Anticipate that 4G will be full IP and will roam with all available wireless IP

18 Change threats to Challenges 2 Commercial Challenges Pass the traditional telco boarder, join other initiatives and Become a Full service Connectivity Enabler New Services Location based services Automotive services Multi standard multi-media messaging Residential & Hotspot least cost roaming Wireless PDA s Interoperability & Mobility

19 Strategy to connectivity-enabler Focus on multi standard splitroaming mix of GSM, GPRS, wireless LAN, bluetooth, DBA Integrate the hot spots of wireless LAN with full interconnection and QoS

20 converting strategy to a connectivity mix of GSM, GPRS, wlan, bluetooth2 and DBAt/s Threats to xg: wireless LAN, Napster-like PAN, Digital Broadcasting. Take 3 actions: Convert strategy to a connectivity-enabler Change threats to Challenges in w-lan: integrate wireless LAN (in networked hotspots e.g. Mc Donalds, airport, underground, schools, SMO's, large homes) Focus on multi standard split-roaming mix of GSM, GPRS, wireless LAN, bluetooth, DBA and connect to the downstream supplementary broadband channels of DBA t/s (IDG report).

21 Accessibility Anyplace, Anytime to Everything. Spontaneous Use and Low Barrier to Entry of Global, Wireless, Interoperable, Broadband Networks. The multi-terminal environment requires a constant re-purposing of applications and content Data Business Logic Presentation Wireline Stylesheet XML Wireless The end-user experience must be be integral: a personalized and centralized data and transaction Morgan environment Stanley Web that can be be All accessed slides are copyrighted from any by device Jacob van Kokswijk 2001

22 design multi standard devices, including the wireless PDA's, with roam-intelligence Don t ignore the smart wireless PDA s: Their concept is very strong and near by the 2G mobile notebooks. Take 3 actions: Let design multi standard devices, including the wireless PDA's, with the 'intelligence' to roam to all locally available networks and select which one is interesting (least cost, priority, QoS versus Quality of Message) to use. Integrate w-pda services (cashing, & voic , manuals, ID- & creditcard) Look for mobile PDA games and gadgets.

23 Blasting the Boarders between telco s, cellco s, cableco s & ISP s In future, there will be only space on earth and air for a handful Full Service Communication Providers.

24 Mend or End In future, only Full Service Communication Providers will survive. Only 10 of global Incumbents will survive when converged communication goes global. More mobiles than Subscribers mean that the customer wants to switch more networks; the Italian trend of multiple SIM s per user confirms that opinion. In future, the device will be users individual terminal to different networks, machines and systems. Sophistic Providers will succeed. Lazy Providers will end.

25 Lurkers versus Leaders What is the Cellco s Mission?

26 Digital TV as home-router 3 After Eutelsat and SES/Astra Astra,, the new Terrestrial Digital Video Broadcast is soon licensed to provide Europe a converge of multicasting multimedia and telecom. First trial now by Global Radio (DBA- satellite) has started.

27 Don t bet on xg alone: watch the threat of the Digital Broadcasters IDG report on Digital television in Europe: the digital television leads with 28 million TV s the European communication market. IDG: D-TV is the best platform to connect and transmit on different infrastructures.

28 Digital Broadcasting threat Next year in many European countries the licences for Terrestrial Digital Audio (TDAB) and Video (DVB-T) Broadcasting are provided by mostly a beauty contest. With an upstream by e.g. GSM, free channels could be used for a approx. 5 mb downstream of cartographic maps, live music, movies and games (with 3dimages). Nationwide coverage has already to be build for high power broadcast purposes and is 20% of the costs of an UMTS network. Why should a consumer waits for 3G?

29 Digital Broadcasting threat DBA-t and DVB-t are Always On, high power, downstream 5 31 mb A sub-service of the Broadcast Companies Licensed by beauty contests in most countries Internet access via TV antenna for fixed and mobile Simple to realize and more efficient than UMTS Excellent and fast distribution of large files Supplementary to GSM and GPRS Much faster to set up a Euro nation wide coverage Not suitable for synchronized voice communication The End of the Single Service Mobile Providers.

30 Always-On Mobile Devices 4 Technical Challenges New Applications Location based services Authentication Security Browser Capabilities Interoperability & Mobility Multi access roaming; Multi standard; Inter standard roaming Multi operator; Inter operator roaming Multi media Inter media roaming

31 The always on device has its specific requirements The software and hardware need to be active at a need-to-run basis. The display should be eye vision activated: only activated at a glance. The device should remain available for push information and regular polling services initiated from the client. This requires authentication of the user by means of (U)SIM and PKI technology (processing power). Glance Activated Originator s Private Key Originator s Public Key Cleartext Message Encrypt Originator s Signed Message Decrypt Cleartext Message Originator Recipient

32 Fortunately there is sufficient room for improvement of Mdevices Versatile! Communicable. AWARE! Biometric sensors AWARE! 12 mm 2 of Environmental Sensors SIMPLE! To use

33 WAP 2.0 offers extended support for graphics, enabling richer Content WAP 1 example: WAP 2 examples: SEXY? WAP is dead; long live WAP!

34 The final bell for the Intelligent Networks The propriety age is over no more single operator per device, pay least per bit 4g devise will be individual and completely independent of propriety networks 4g devise connects IP based multistandard 4g devise has Speech-, Handwriting- Handicap- and Biometric recognition 4g device is also multimediaplayer, smart ID-certification, game-console, creditcard, drivers licence, pluriform machine-control, operator-terminal, notebook, et cetera.

35 3g as Smart Smock, 4g as Bionic Buddy 4g Devices: Tools for fools, Chicks for wicks A 4G Device will be an personalized IP-version of 3G, but 100% individual owned and managed. Intelligence moves from network to both ends: Smart Device, with all personalized adjustments Learning Portal, CRM based, with Artificial Intelligence

36 Users need to be able to roam across networks for the best fit Mobility GSM / GPRS / UMTS Mobility Ethernet / ADSL WLAN / Bluetooth Mobility Wireless LAN Bluetooth The Subscriber Identity has to be checked across multiple networks using (U)SIM and PKI Technology

37 and they will use applications across multiple devices A c c e s s D e v ic e s T e le visio n In -c a r fac ilitie s M o b ile P ho n e P e rso n a l C o m p u te r S w itch b e tw e e n d ev ice s Fortunately this means your solutions can be deployed on other platforms besides 3G devices too

38 This will require an abstraction layer between the content provider and the user Service Provider Content Virtual IP Address IP Routing & Proxy Provider Least Cost Routing Instructions TCP GPRS UMTS GSM WLAN1 WLAN2 Blue1 Blue2 Actual IP Addresses

39 All Humans are Different 4

40 A Triptych in ThirdG Everyone is presenting here their fictive 3G success story, even without any survived service or system. Everyone is asking for proved technology, but the vendors still presenting new equipment, solutions and service-concepts, without any uniformstandard or proved business (e.g. MMM/EMS). Everyone is talking about the consumer, but nobody really has a presentation where the consumer talks. Everyone is searching for the killer application, but nobody has the guts to kill their application providers. Everyone is looking to each other, wishing and hoping some one else has the brilliant idea of this century.

41 We arrogantly thought that we could dictate the consumers needs and necessaires 3g Market Misunderstandings: The customer is King. That customer is your consumer Not you! Also the Customer wanna be like you. The Customer decides about Personalizing his Customer Relation. The Customer decides what s in it for me?. Safely and Trust are the Basic Needs. Convenience and Coverage are the Basic Necessaries. Feelings of unsafely paralyse. People change earlier by Accepting their Strong and Weak Points, than by Forced Seek for other Habits or other Personality.

42 We lost control of the consumers and the auctions, because 3G was still technology driven 3g Mazlov Misunderstandings: Consumers are human and expect first Connectivity, Coverage and Care; secondly Confidence and Convergence; when those are realised, Convenience and Easy of Use could follow. Unfamiliarity with the practice reduces trust. Ignorance of the danger increases the anxiety. Human is leading, technology is bleeding

43 Stop, if we can t precure such an serious accident No n of the drivers mobile phone No powernetwork diagram available Language misunderstanding Consumers first want to be safe, healthy and accepted. Fat applications like video and multimedia will lose out to thin, text-based applications. Users will demand content and services that complement the primary function of their device and provide timely information, enable simple transactions, and are location-relevant.

44 Development of Communication Providers as next generation Service Enablers 6 Repositioning of e-banks, content, entertainment and service providers

45 Repositioning of e-banks, content, entertainment and service providers Disney

46 Repositioning of e-banks, content, entertainment and service providers Disney

47 Repositioning of e-banks, content, entertainment and service providers

48 Repositioning of e-banks, content and entertainment to full service communication providers

49 Repositioning of e-banks, content and entertainment to full service communication providers All in one wireless PDA

50 Mobile as usual 7 Lifestyle support Club and Tribe Communities Location Based Services Mobile Payments

51 Mazlov s Marketing

52 Self-actualization is no fame or fortune. Wealthy, honoured, or celebrated people might reach selfactualization, but most people who have reached highest level of happiness are unknown beyond their circle of family, friends & community. Societies develop when people reach a particular high level in Maslow's hierarchy. Once people meet their physiological needs and they feel safe, they begin to develop a culture and advanced civilization. Then they are open to handy services.

53 The Battle between Technology, Marketing and Reality Any time implantate Any where, Any way Free Ease of Use Convergence Convenience & Confidence 2001 Coverage, Connectivity, Customer Service Selfactualisation Esteem Love Safety Psychiological Basic Needs

54 The Hour of Power Mobile information needs are based on Mazlov s fundamentals of fulfilment of needs and feeling safe in the environment of Family and friends Community, clubs and tribes Employment Mobile information needs are inextricable bound with the context of Location Event/moment Personal needs

55 Look before You Leap Mobile information basic needs are life services, such as automatic updated personal directory voice controlled scheduler actual traffic & transport information headlines of financial and banking info sports & lifestyle news, weather & public scandals entertainment, managed by the user shame & blame

56 Mobile s Microsoft?

57 Towards the mobile as underwear... The Future of Mobile Communications END Q&A

58 Questions & Replays Q&A To ASK a question : participants) To CANCEL a question : participants) Press 14 (UK/Europe Press *1 (US participants) Press 15 (UK/Europe Press *2 (US participants) For assistance press 00 at any time Or questions to Replay Details morganstanley.com/.com/waprap/ For additional information about The M-files, or to request that specific topics be addressed during a particular session please contact

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