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Wireless Foresight Conference, June 5 Wireless Foresight Conference June 5 2002.

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Presentation on theme: "Wireless Foresight Conference, June 5 Wireless Foresight Conference June 5 2002."— Presentation transcript:

1 Wireless Foresight Conference, June 5 Wireless Foresight Conference June 5 2002

2 Wireless Foresight Conference, June 5 An afternoon about the Wireless Future Project Wireless Foresight -Four scenarios of the Wireless World in 2015 -Challenges facing Industry -Implications for research Alternative view of the future Prof. Eli Noam, Columbia UniversityOpen Access and Industry Cyclicality Panel discussionResearch and Research Funding for a Positive Wireless Future Jens Zander (KTH, chair)Eli Noam (Columbia University) Bo Dahlbom (SITI)Bernt Ericson (Ericsson Foresight) Bertil Thorngren (Stockholm School of Economics)

3 Wireless Foresight Conference, June 5 Wireless@KTH A Center for Research and Education Focus on Wireless Systems: Mobile Computing & Communication Joint research between academia and industry -Common reserach projects and programs Industrial partnership -Active participation: Internships and Research Fellows Partnership program on four levels -Founding partners -International partners -Associate partners -Network partners

4 Wireless Foresight Conference, June 5 A Vision Driven Research Approach Wireless Foresight Think Tank Center Vision 2015 and beyond Center Projects on Key Problems Graduates Innovations Papers Techno- Socio- Economic- Scenarios Partners Other scenarios (WSI, WWRF, TF) External researchers

5 Wireless Foresight Conference, June 5 Industrial Partners Initial donation Ericsson, Telia, Microsoft, Nokia Founding partners Ericsson, Telia Other Industrial Partners (as of May 2002) 3GISGenista AllgonKevab AxisMSI BIC Mid SwedenNorthstream Blue FactoryOperax CarnegieSemcon e-tennaTele2 EuropolitanWidermind

6 Wireless Foresight Conference, June 5 Academic Founders Carl Gustaf Jansson Knowledge and Communication Engineering Gunnar Karlsson Teletrafic Systems Bastiaan Kleijn Speech Signal Processing Gerald Chip Maguire Computer Communication Systems Björn Ottersten Signal Processing Jens Zander Radio Communication Systems

7 Wireless Foresight Conference, June 5 Four scenarios of the Wireless World in 2015 Bo Karlson Wireless@KTH bo.karlson@wireless.kth.se www.wireless.kth.se/foresight

8 Wireless Foresight Conference, June 5 Project Wireless Foresight September 1 2001 – June 5 2002 Objectives -Create scenarios of the wireless future (2015) -Identify key research areas for the Center and in general -Create a shared vision of the wireless future within the Center -Build network, create visibility Focus on the development of the Wireless Industry -Vendors (infrastructure and terminals) -Operators -Service providers and developers Global scope

9 Wireless Foresight Conference, June 5 Wireless Foresight, the report Four scenarios Trends and Fundamental drivers Technical implications from the scenarios Key research areas Challenges for industry

10 Wireless Foresight Conference, June 5 Four Scenarios of the Wireless World 2015 Wireless Explosion – Creative Destruction Slow Motion Rediscovering Harmony Big Moguls and Snoopy Governments Its not about describing how the world will look, but how it might look!

11 Wireless Foresight Conference, June 5 Wireless Explosion – Creative Destruction

12 Wireless Foresight Conference, June 5 Wireless Explosion – Creative Destruction Usage and industry growing rapidly -Fast technological development -An explosion of wireless applications and services -All markets growing fast Old telco industry loses to datacom attackers -Datacom industry (Internet & IP) winning

13 Wireless Foresight Conference, June 5 Main characteristics A fiercly competitive world -Intense competition, many players -Infrastucture based on IP and datacom paradigm -Market leaders unable to expand monopoly power Active users want open IP access and take control -Advanced users after 20 years with the Net: Choice & Freedom -Anarchistic underground culture: IPR-enforcement difficult -Mobile life-style -New spectrum released but mostly for unlicensed use -Ad-hoc deployed networks, do-it-yourself wireless access

14 Wireless Foresight Conference, June 5 Disruptive market change Modularization -Standardized interfaces: IP, open APIs, software platforms etc. -Closed telco-style systems lose -Technologies and functions dis-integrating -Each module a niche market with intense competition Creative Destruction -Rapid development transforming industry -Old market leaders lose and attackers win -Operators and telco equipment vendors vulnerable

15 Wireless Foresight Conference, June 5 Slow Motion

16 Wireless Foresight Conference, June 5 Slow Motion Slow pace of development -Services, Industry, and Wireless Technology Problems affecting the Wireless industry -Financial crisis among operators: a domino effect -Global economic recession -3G fiasco -Health problems from radiation -Environmental awareness -High power consumption and low battery capacity -Managing a heterogeneous and complex wireless world

17 Wireless Foresight Conference, June 5 Main characteristics The mobile lifestyle loses ground -Urbanization slows down in the industrial world -More people work from home or local offices -Traveling increases, but very slowly No service explosion -Simple services popular (payments, MMS, news, music etc.) -Advanced services too expensive -Mobile professionals and Industrial users the only driving segments Big NICs catching up

18 Wireless Foresight Conference, June 5 Wireless a mature industry Slow pace of growth Low profit margins Increased concentration in most segments Traditional Telcos still dominating Operators -Consolidation leading to fewer actors Equipment vendors -Focus on NICs and on traditional operators Terminal vendors -Large segment of cheap and reliable terminals

19 Wireless Foresight Conference, June 5 Rediscovering harmony

20 Wireless Foresight Conference, June 5 Rediscovering harmony The wireless industry refocusing -Reasonably fast pace of development -Simple services for the mass-market -Complex solutions for niche segments -Local operators co-exist with global communication providers A new lifestyle -Postmaterialism -Quality of life (family and friends) -The environment is sacred

21 Wireless Foresight Conference, June 5 Main characteristics Individualism, environmentalism, and social awareness Both local and global lifestyle -From crammed cities to local communities -People live locally but think globally -Less daily travel but increased global travel We have slowed down -Information overflow eventually made us tune out -Social life and environmental concern most important Peoples needs are in charge -Being old means being wealthy, active and demanding -Youths demand 24/7 services, personalized technology and ethically and environmentally aware companies

22 Wireless Foresight Conference, June 5 An industry trying to adapt The wireless industry tries to refocus -No wireless explosion, but still quite a large market -Brand important, but in a new way -Tribes and subcultures with different needs -Global and local operators/service providers -Industry struggles to understand the new marketplace Only in the industrialized world -Change of values linked to socio/economic development -NICs still have postindustrial values -Large but traditional markets

23 Wireless Foresight Conference, June 5 Big Moguls and Snoopy Governments

24 Wireless Foresight Conference, June 5 Big Moguls and Snoopy Governments Wireless industry stagnant -Less competition -No opportunities for new players -The big players dominate Governments exert tight control -Issues of security and copyright driving -Government can more easily control few players Large companies become even larger -Mergers of companies into Moguls -Moguls grow on all markets

25 Wireless Foresight Conference, June 5 Main characteristics Governments -All communication tightly surveilled -Very little new spectrum released -No new players allowed on emerging markets and niches Moguls -Brand rules -Focus on user convenience, security, and safety -Operators/service providers are global companies -No wireless explosion but users are satisfied

26 Wireless Foresight Conference, June 5 A Perfect World Privacy -Companies not to give out information -Government can acquire information Security -All transactions secure and surveilled -Piracy not possible Freedom -Not much, but it is accepted -NICs might host data havens/providers

27 Wireless Foresight Conference, June 5 Technology Socio-Economic- Political Business and Industry Users, Values and Attitudes Processing power will increase exponentially (Moores law) Globalization will increaseIndustries mature over time Values change at the pace of generations Fiber and memory capacity will increase exponentially Democratization will incresae Companies strive towards monopoly Individualism will increase Capacity in air will increase but slower than in fiber Aging population (Industrial world) Attractive markets attract new entrants Importance of family and friends will increase Battery capacity will increase very slowly Shift towards knowledge industry (OECD & NIC) Scale & learning economics (improving p/p) Value of free time and experiences will increase Miniaturization of components will increase Market economy prevails (however counter movements will continue) Complexity diseconomics Need for mobility and communication will increase Digitalization will increase Fight against terrorism and crime, in particular cyber crime, will continue Value chains will increase in complexity (value networks) Inceased technology adoption in everyday life Standardization will increase Social differences will increase Wireless infrastructure cost will fall slower than for electronics (Jens law) Different user groups have different values and needs Internet development dominating Increasing amount of information and choices Value of network increases with number of nodes (Metcalfs law) Health concerns will increase Large and complex systems become increasingly difficult to control centrally Air bandwidth is affected by political decisions Value of information and knowledge will increase Environmentalism will increase Fundamental Drivers of Development

28 Wireless Foresight Conference, June 5 14 trends shaping the scenarios 1.Development will be more user driven 2.User mobility will increase 3.The service and application market will grow 4.User security, integrity, and privacy will become more important 5.Real or perceived health problems due to radiation will 6.become more important 6.Environmental issues will become more important 7.Spectrum will become an increasingly scarce resource

29 Wireless Foresight Conference, June 5 14 trends shaping the scenarios cont. 1.8.The wireless Industry will grow 9.The big NICs will continue their positive development 10.Market concentration in the wireless industry will change 11.The fight for market dominance in the wireless industry will intensify 12.Terminal usage time and complexity management will become increasingly important problems 13.3G will be implemented 14.Protection of IPR on content will become incresingly difficult

30 Wireless Foresight Conference, June 5

31 Challenges Facing Industry Jonas Lind Stockholm School of Economics

32 Wireless Foresight Conference, June 5 Disruptive market change – winners and loser Spectrum release – faster and smarter 3G debt threat – smarter spectrum policy Cheaper infrastructure – fewer masts, more electronics Better batteries – users will not accept daily recharging Better usability – make it seamless, useful and intuitive Complexity management – IP, modularized, open APIs A few Challenges for Industry

33 Wireless Foresight Conference, June 5 Industry moving from vertical integration to markets in horizontal layers Disruptive innovation – an attack from below Incumbents often arrogant and miss the warnings: inferior technology Is the wireless telco industry in for a disruptive attack from the datacom industry? How will the wireless telco industry respond to disruptive attackers? Disruptive market change – winners and loser

34 Wireless Foresight Conference, June 5 Industry moving from vertical integration to markets in horizontal layers Customer relations Network managment Services Access network Back-bone network Old incumbents: Vertically integrated New marketplace: Excellence in one segment Customer relations Network managment Services Access network Back-bone network

35 Wireless Foresight Conference, June 5 Disruptive innovation – an attack from below Time Performance logaritmic scale New technology enters low-end market Unix and Vax computers New technology replaces old technology Market for old technology PC Wintel computers Market for attacking technology

36 Wireless Foresight Conference, June 5 Logics of disruptive innovations Attackers with radically cheaper technology (ten times cheaper) Enter on low-end market – unreliable, but fullfil unmet need Quickly build volume (*10), eat away low-end market from incumbents Old technology responds by retreating into high-end segment High sales volumes give attackers fast performance growth Attackers fix flaws in design along the way When new technology is good enough for most customers, the old technology fails!

37 Wireless Foresight Conference, June 5 Incumbent Attacker Main-frame computersMinicomputers 5.25 inch disk-drives3.25 inch disk-drives Mini computersWintel PCs Cable-actuated excavatorsHydraulic excavators High-street furniture retailIKEA business model Integrated steel-millsMinimills (using scrap steel) Pre-industrial craft productsIndustrial mass production Xerox copiersCanon/Ricoh tabletop copiers Incumbents often arrogant and miss the warnings: inferior technology

38 Wireless Foresight Conference, June 5 Weak entry points for attackers Unlicenced spectrum Self-deployed networks (the $39 wireless access point) Good-enough quality at a tenth of the price IP, modularization and open APIs give much lower complexity No hierarchical control Agile, hyperfoced firms (layered, excellence in one segment) WLANs and WISPs Telco universe High-cost business model (extreme reliability & quality) Centralized hierarchical control (high complexity system management) Slowness inherent for vertically integrated firms Telco market power from Control of spectrum Geographical physical infrastructure Customer lock-in Is the Wireless telco industry in for a disruptive attack from the datacom industry ?

39 Wireless Foresight Conference, June 5 What will happen? How will the Wireless Telco industry respond to disruptive attackers? Counter and grab the opportunities or ignore and lose?

40 Wireless Foresight Conference, June 5 Mobile (90% of population) has below 10% of all usable spectrum (0.4-5 GHz) Rest is controlled by legacy users, the millitary (30%) and TV broadcasters Spectrum shortage is hampering competition and forcing operators to build unnecessary expensive infrastructure Spectrum policy handled by slow moving diplomatic WRC meetings (no significant spectrum release possible until 2013) Faster spectrum release must be put on the political agenda Spectrum release – faster and smarter

41 Wireless Foresight Conference, June 5 How to solve the spectrum issue Increase competiton by releasing lots of new spectrum -To operators -For unlicensed use Replace auctions with revenue sharing during life-time Sell spectrum and use proceeds to compensate the military and other legacy users

42 Wireless Foresight Conference, June 5 3G debt threat – smarter spectrum policy Wireless spectrum is valuable due to shortage Massive spectrum release will reduce value of 3G licenses 3G operators paid for licenses under the old regime Compensate 3G license winners when massive spectrum release reduces value of their spectrum

43 Wireless Foresight Conference, June 5 The 3G debt problem (cont.) 3G debts threaten to trigger a financial crash -The auction party in 2000 (120 billion) -Future 3G build-out commitments (140 billion) -Future cost for hand-set subsidies and marketing -In a deep recession, financial market will cancel telco credits EU, industry, and governments must deal with the problem Alleviate demands from regulators and allow unlimited infrastructure sharing (consumer will not benefit from bankrupt operators and half-built networks)

44 Wireless Foresight Conference, June 5 Cheaper infrastructure – fewer masts, more electronics Wireless of today based on a high-cost business model -Dedicated infrastucture with masts, macro-cells, cabling etc. -Spectrum shortage, keeping tariffs high -Homogeneous network, same in rural as in city centers Data traffic explosion can not be carried on traditional macro- cell networks (GPRS and 3G) at affordable costs Future infrastructure must build on a new topology -Possible cost cuts of 70% (if no dedicated towers, etc.) -Different networks in rural areas, along roads, and in cities? -Different networks for broadcast and personal communication? -Ride on to the existing fixed Net in urban areas? -Self-deployed, optical wireless, ad-hoc, peer-to-peer?

45 Wireless Foresight Conference, June 5 Disruptive market change – winners and loser Spectrum release – faster and smarter 3G debt threat – smarter spectrum policy Cheaper infrastructure – fewer masts, more electronics Better batteries – users will not accept daily recharging Better usability – make it seamless, useful and intuitive Complexity management – IP, modularised, open APIs Summary – industry challenges

46 Wireless Foresight Conference, June 5

47 Implications for Research Aurelian Bria Royal Institute of Technology (KTH) aurelian@radio.kth.se

48 Wireless Foresight Conference, June 5 Scenarios Technical Implications Key Research Areas

49 Wireless Foresight Conference, June 5 Seven Key Research Areas Low cost infrstructue and Business models New and advanced services System Integration Resource Management Air interfaces and protocols Health and Environmental issues Usability

50 Wireless Foresight Conference, June 5 Technical Implications (Best case) System Characteristics -Heterogeneous infrastructure -Small cost per transmitted bit, etc. Terminals -Wide range of shapes and capabilities -Long usage time before recharging, etc. Services -Wireless services will become a commodity - Services will be independent of the infrastructure, etc.

51 Wireless Foresight Conference, June 5 Key Research Areas Air-interfaces and Protocols Resource management -Sharing and coexistence -Decentralized management -Dynamic spectrum allocation, etc. System Integration -Complexity management -Multimode and adaptive terminals, etc.

52 Wireless Foresight Conference, June 5 Key Research Areas (cont.) New and advanced services -Context awareness -Smart spaces -Ubiquitous services and sensors, etc. Usability -Inteligent user interface -Personal networks, etc.

53 Wireless Foresight Conference, June 5 Key Research Areas (cont.) Cross-disciplinary research -Low cost infrastructure and business models Affordable wireless services -Health and Environmental ImpactPerceived safe technology

54 Wireless Foresight Conference, June 5 Conclusions The demand for wireless communication services will increase New technology, services, and business models need to be developed There are many engineering challenges out there There is currently a big need for research on wireless -Cross-disciplinary research is important -Focus on the end user


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