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Value of UWB

Presentation to IQPC Ultrawideband Europe Conference

Presented by Mathew Stalker, DotEconOn behalf of Mason Communications and DotEcon Ltd

11 March 2005

-2-

© Copyright 2004 - DotEcon Ltd and Mason Group Ltd

Format

1. Introduction and Overview

2. Our Approach

3. Estimates of Net Private Benefits

4. Estimates of External Costs

5. UK Results and Conclusions

6. The European Impact


Introduction to Study

-4-


The UK Study

• Commissioned by Ofcom

• Cost-benefit analysis of UWB for PAN applications

– Evaluate benefits from using UWB in PAN environments:

» Better quality relative to alternatives

» Lower cost relative to alternatives

– Evaluate costs from using UWB:

» Interference with other services

– Identify net impact on society under different regulatory scenarios

– Consider the impact of alternative UWB techniques

Provide input into Ofcom’s policy decision on UWB

Enable Ofcom to influence European policy debate

-5-


• Wireless technology capable of transferring large amounts ofdata wirelessly over short distances (up to 10m)

• Particularly Suitable for wireless personal area networking(PAN)

• Feasible substitute for wire in low and high data rateapplications

• Rival technologies include Bluetooth and WiFi

What is UWB in the PAN Environment?1. INTRODUCTION

-6-


UWB in the PAN Environment

Extent/Range of Communications

PANLANMANWAN

2G MacroCellular

DTV (Terrestrial)

3G MacroCellular

DTV (Satellite)

3G MicroCellular

Dat

a R

ate/

Cap

acit

y C

apab

ility

10kbps

100kbps

1Mbps

10Mbps

100Mbps

1Gbps

2.5GGPRS

3G PicoCellular

3GHSDPA

802.11bWLAN

802.11aWLAN

IEEE 802.15.1(a)Bluetooth

IEEE 802.15.3WPAN

IEEE 802.15.3aUWB

InductiveCoupling

RFID

IEEE 802.15.4WPAN

BFWALMDS

BFWAMVDS

InfraredDevices

DAB (Terrestrial)

4G?

Intended UWBMarket

Possible UWB Market

• Majority of usage will beindoors, in the office orhome

• Data rates of greater than110Mbps

• Potential advantages ofUWB:

– Much faster datarates

– Battery life

– Price

1. INTRODUCTION

-7-


Five Regulatory Scenarios

• 3.1 to 10.6 GHz bandwidth

• -41.3 dBm/MHz emissions between 3 and 10 GHz

• Devices limited to 3 to 5 GHz

• (a) Draft ETSI/CEPT mask (-65 dBm/MHz at 2 GHz)

FCC Mask

UWB limited toLower Band

UWB limited toUpper Band

• Devices limited to 6 to 10 GHz

• (b) Revised ETSI/CEPT mask (-85 dBm/MHz at 2 GHz)

ETSI Mask

1. INTRODUCTION

-8-


Industry consultation

• Bilateral discussions with companies:

– Manufacturers of UWB chipsets

– Manufacturers of devices that might utilise UWB

– Providers of other services potentially affected

• Two workshops in conjunction with Ofcom,

– July 2004 to set out the methodology of the study

– October 2004 to discus the findings

1. INTRODUCTION


Our approach

-10-


Approach to Estimating Welfare Impact of UWB2. APPROACH

Impact on social welfare =

Net private benefitsfrom using UWB

instead ofalternative

technologies

Total interferencecosts from use of

UWB

• Likely to be positive or negative?

• How large?

• How sensitive to alternative regulatory approaches?

• How sensitive to model parameters and assumptions?

-11-


Approach to Estimating Welfare Impact of UWB

External

costs

• Positive or negative?

• How large?

• Impact of regulation?

• Sensitivity toassumptions?

Value to the

United Kingdom

Net private

benefits

Quality

Cost

Take-up

UWBrelative toalternativetechnologiese.g. WiFi,Bluetooth

Interferencewith otherservices

UMTS

Satellite

Fixed links

WirelessBroadband

PMSE

GPS

Aeronautical

Radioastronomy

Military


Estimates of Net Private Benefits

-13-


Methodology for Estimating Benefits I

Step I

Identify PANapplications

for UWB

Step II

Identifyalternative

technologiesand compare

to UWB

Step III

Estimatewillingnessto pay for

UWB

Step IV

Estimaterelativecosts of

UWB andalternative

technologies

Step VI

Estimatebenefits

from usingUWB

Step V

Project take-up for

applicationswith UWB

3. BENEFITS

-14-


UWB versus alternative technologies

Video/audiodownloads

Users benefit from higher data rate Alternatives offer greater range and wall penetration

Users benefit from higher data rate and extended battery life

Users benefit from higher data rate

UW

B P

AN

Ap

plic

atio

ns

Audio/VideoStreaming

ExternalData Storage

HandheldDevices

PC Video

AudioDevices

PCPeripherals

PCNetworking

Homogenous

Users benefitonly though lowercost

Differentiated

UWB offersadditionalbenefitscompared toalternative

Currently insufficient data rate to compete with existingdevices

Alternatives offer greater range and wall penetration

Currently insufficient data rate to compete with existingdevices

Alternatives offer greater range and wall penetration

Insufficient data rate for satisfactory service

Many technologies provide service of equal quality

Devices available of similar or higher quality

3. BENEFITS

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Measuring benefits for different applications3. BENEFITS

Effect of Cost Savings and Quality Differences

We also considered the case where quality increases but cost alsorises relative to alternatives

D

c0

cUWB

q0 q1

A B

D’

C

price(cost)

units sold

A. Cost saving on units thatwould be sold underboth technologies

B. Effect of increased take-up owing to lower pricesand increasedwillingness to pay

C. Effect of increasedquality on willingness topay on units that wouldbe sold under bothtechnologies

-16-


Willingness to pay and cost

• Hedonic prices used to calculateadditional willingness to pay for UWBrelative to alternative technologies

• Results for all applications extrapolatedfrom survey of handheld devices andnetwork cards

$0

$2

$4

$6

$8

$10

$12

$14

$16

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

West Technology ABI Research Low case (higher costs*)

High case (lower costs*) Central case* Bluetooth

3. BENEFITS

• Cost of UWB relative to alternativetechnologies estimated byextrapolating industry forecasts overthe forecast period

-17-


Take up

• Forecasts for take-up of and usage of all applicationsdeveloped using industry data

UWB PAN application take-up - central case

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Pen

etra

tio

n (

pro

po

rtio

n o

f U

K p

op

ula

tio

n)

PCs and keyboards / mice PCs and speakers PCs and microphones

PCs and wireless monitor (with compression) PCs and other PCs / servers / access points (LANs) PCs and printers

PCs and PDAs Mobile and PCs, other mobiles or PDAs PCs and other PCs (wireless fire sharing)

PCs and digital cameras / camcorders PCs / DVD players and digital video cameras PCs and external storage devices

PCs (or digital video players) and wirless projector Pcs and scanners PCs and MP3 players

HiFis / CD players and speakers DVD players and TVs / projectors PCs and TVs / projectors (for home theatre)

Digital set top boxes and TVs Games console and TVs / projectors DVD players / recorders and PCs

PCs and HiFis

3. BENEFITS

-18-


Private Benefits

• Potential net private benefits from UWBvery large

• Benefits sensitive to take-upassumptions, but still significant evenunder low case scenario

• Large-scale benefits only from 2011,once UWB reaches mass market

0

200

400

600

800

1000

1200

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Net

pri

vate

ben

efit

s fr

om

UW

B p

er a

nn

um

, £m

n

FCC or ETSI Masks Lower band Upper band

NPB fromUWB underdifferentregulatoryscenarios,per annum(£mn)

• Benefits greatest under either FCC orETSI masks (assumes that initial chipsetsmeet both standards)

• Lower band restriction may reducefuture benefits

• Upper band restriction significantlydelays and reduces benefits

3. BENEFITS


Estimates of External Costs

-20-


Methodology for Calculating External Costs

Which existing systems are operating

in the spectrum occupied by

UWB in the UK?

List of 10 systems identified

Will co-existence with UWB lead to

costs to the operators of

those systems?

Exclude from CBA

Include in CBA

No

Yes

Interference Calculations

using Monte Carlo models

based on given number of UWB

applications

Cost Calculation

STEP 1:Identify Existing Users

STEP 2:Assess likely

impact of UWB

STEP 4:Cost Calculation

STEP 3:Interference Modelling

Which existing systems are operating

in the spectrum occupied by

UWB in the UK?

List of 10 systems identified

Will co-existence with UWB lead to

costs to the operators of

those systems?

Exclude from CBA

Include in CBA

No

Yes

Interference Calculations

using Monte Carlo models

based on given number of UWB

applications

Cost Calculation

STEP 1:Identify Existing Users

STEP 2:Assess likely

impact of UWB

STEP 4:Cost Calculation

STEP 3:Interference Modelling

4. COSTS

-21-


Two engineering models

• UMTS

– Modified version of the Monte Carlo model developed by Mason forearlier RA work

– Simulate lost of quality of service in the presence of UWB

– Costs estimated for restoring the quality of service

• FS, FSS and FWA

– Bespoke Monte Carlo model

– Estimate the noise impact on ‘Probability of Error’ at the affected link

• Both models draw extensively on ITU-R studies

4. COSTS

-22-


Costs per UK UMTS Operator

£0

£10,000

£20,000

£30,000

£40,000

£50,000

£60,000

£70,000

£80,000

£90,000

£100,000Y

earl

y C

ost

s o

f U

WB

to

UM

TS

(£0

00)

-51dBm £86,482 £73,803 £83,399 £62,280 £58,985 £49,508 £47,754 £48,265 £48,777 £49,289 £52,771 £50,823

-65dBm £3,720 £2,909 £2,935 £2,274 £2,131 £1,824 £1,754 £1,768 £1,782 £1,796 £1,892 £1,839

-85dBm £72 £67 £85 £56 £54 £44 £43 £43 £44 £44 £47 £45

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

4. COSTS


Results and Conclusions

-24-


Net Value of UWB to the UK under differentregulatory approaches

5. Results

Lower band

ETSI (-85dBm/MHz)

ETSI (-65dBm/MHz)

Upper band

FCC Mask

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020N

PV

to

Un

ited

Kin

gd

om

, £m

n,

dis

cou

nte

d a

t 3.

5% f

rom

200

4

-25-


Conclusions

• Draft ETSI mask is superior to FCC mask

– Net private benefits are identical (based on our understanding thatinitial chipsets meet both standards)

– External costs (interference) much lower under ETSI mask

• Possible scope for tightening the roll off of the draft ETSI mask to alevel of –85 dBm/MHz at 2.1GHz

– External costs on UMTS providers are minimal under this scenario

– Benefits unaffected provided that initial chipsets are compatible

• Both upper and lower bands should be made available for UWB

– A lower band restriction may constrain future quality improvements forno clear benefits

– An upper band restriction would delay launch of UWB by five years ormore and reduce quality

5. Results�

-26-


Implications for Europe

• Indicative estimates of the value of UWB can be obtaining using simple benchmarks– Benefit benchmarked using population

– Cost benchmarked using land area

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Austria

Belgium

Denmar

k

Finland

Fran

ce

German

y

Greec

eIta

ly

Luxe

mbo

urg

Nethe

rland

s

Norway

Portu

gal

Spain

Swed

en

Switz

erland

Unite

d King

dom

NP

V o

f b

en

chm

ark

ed

valu

e o

f U

WB

fo

r 2

00

4-2

02

0, €

mn

value of uwb - dotecon ltd value of uwb presentation to iqpc ultrawideband europe conference...

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