Data & Results | 4G READINESS ASSESSMENT

Data

The data for the different countries were collected from different, and to the extent possible, reliable resources. However in some cases the authors have used industry experts opinion, when the data was incomplete or missing.

In the first category, the mobile wireless penetration was collected and the HSPA standards status from 3G Americas report. The data for the business environment and also for the social and cultural categories were collected from the Economist's study (2008). The spectrum law effectiveness is calculated from the subscribers served per MHz of spectrum allocated. The available spectrum used for commercial use was collected from CTIA(2008) and the GSM world (2008) reports. In developed countries the available spectrum was usually over 300 MHz and in the emerging ones around 200MHz. To calculate the rate, the number of mobile wireless subscribers was divided to the available radio spectrum and then the data were normalized to the highest value. In the next category, the data on consumer spending on telecom services per household, was collected from Euromonitor database and then normalized. The active mobile wireless services were collected from Netsizeguide (2008). Finally in the last category both variables were collected from the OECD (2008) database.

Results

The results are presented in Figure 1. Most of the countries' score is in a scale between 2 and 5. The developed countries as expected are ranking in the top-10 list, with the rest of the countries, Brazil, Russia, China and India in the lower part.

	Country	Overall score	Connectivity and technology	Business environment	Social and cultural	Legal	Consumer	ICT spending
Category Weight			20%	15%	15%	15%	20%	15%
1	USA	3.619	1.86	8.53	9.00	1	1.49	1.13
2	Denmark	3.606	2.22	9.65	8.67	0.664	1.28	0.39
3	Australia	3.432	1 99	8.59	9.13	0.846	0.94	0.40
4	Finland	3.382	2.10	8.4	8.3	0.658	1.55	0.33
5	Germany	3.323	2.13	8.36	8.00	0.361	1.58	0.48
6	Netherlands	3.240	1.09	8.55	8.07	0.217	2.00	0.64
7	Sweden	3.227	1.12	8.52	8.6	0.658	1.65	0.28
8	Switzerland	3.357	1.06	8.57	8.27	0.292	1.80	1.44
9	UK	3.192	1.23	8.61	8.13	0.245	1.51	0.64
10	Japan	3.186	1.81	7.39	7.87	0.359	1.89	0.68
11	Canada	3.184	1.59	8.63	8.13	0.128	1.36	0.40
12	Hong Kong	3.176	2.22	8.64	7.47	0.188	1.18	0.34
13	Brazil	2.732	1.78	7.01	6.13	0.200	1.36	0.70
14	Russia	2.264	1.16	6.19	5.33	0.656	0.88	0.20
15	China	2.219	0.88	6.49	5.53	0.266	0.42	0.78
16	India	2.116	0.19	6.53	5.33	0.229	1.01	0.42

Figure 1: 4G-readiness ranking

The emerging markets such as China, and India, are expected to move up. Russia is surprisingly lagging behind the developing markets, revealing inefficiency to the LTE path

Categories | 4G READINESS ASSESSMENT

In this post, we are describing the 6 different category and the weights as shown in Figure 1.

Category Weight	Connectivity and technology infrastructure	Business environment	Social and cultural environment	Legal environment	Consumer and business trend	Government policy and vision
Criteria	mobile phone penetration current industry standards	Overall political environment; macroeconomic environment; market opportunities policy toward private enterprise; foreign investment policy; foreign trade and exchange regime; tax regime; financing; the labour market.	Level of education and literacy; level of Internet literacy; degree of entrepreneurship; technical skills of workforce; degree of innovation.	spectrum laws efficiency, Subscribers served per MHz of Spectrum	Consumer spending on communications services; availability of mobile wireless services for citizens and businesses	Telecom investing per GDP Total ICT national spending rate
Percentage	20%	20%	15%	10%	20%	15%

Figure 1: 4G readiness categories and weights

Using several resources and databases as listed in the Appendix, we build an index for each country and based on its value, we rank it in our list into a certain position out of the 16. The index, when calculated is expected to be on a scale 1-10

The first of the categories is about connectivity and technology infrastructure, which is one of the most significant drivers, adding 20% to the overall score. The connectivity measures the extent to which businesses can access mobile networks, integrating the 4G path. The effective access uses the mobile-phone penetration that includes both 2G and 3G technology per country. Regarding the 4G path, most of the countries chose High Speed Download Packet Access (HSDPA) and High Speed Upload Packet Access (HSUPA) deployment before migrating to the LTE technology by. Most of the countries prefer not to deploy advanced HSPA or HSPA plus, but instead to spend the money on LTE testing as T-Mobile did in the USA. Thus in the figure if in a country both technologies are deployed, HSDPA and HSUPA the value ‘1’ is assigned otherwise if only one of the two is in-service then value ‘0.5’ is assigned. These two technologies are considered as 3.5G and 3.75G respectively.

For this category, the metrics are mobile phone penetration and industry standards in-service.

The second category is the business environment, weighing 15% in the overall score. As explained in the criteria "cover such factors as the strength of the economy, political stability, taxation, competition policy, the labour market, and openness to trade and investment."

The third category refers to the social and cultural environment, weighing a 15% in the overall score. The environment again is expected to be similar to the one defined in the Economist's study, since the 4G evolution will not at least at this point and with the current knowledge to bring any major changes into that environment different from the digital study. Thus "e-literacy and basic education" could define this category's criteria. 

The fourth category describes the legal environment, weighing a 15% in the overall score. It is very important to identify the legal and regulatory environment per country. The spectrum law policy with a combination of the spectrum's availability is considered to be the most important metric in that case, quantifying its effectiveness for each market. More specifically, the number of subscribers served per MHz is calculated. This shows the market's efficiency to adjust to the regulatory environment keeping up with growth and profits for the operators. Finally, all the values are .normalized to the US one, which is the highest, proving that the US wireless carriers are able to get so much more use of the spectrum available.

The next category to be included is the Consumer's or the demand side, weighing an overall score of 20% into the index calculation.

Except for the supply side, we need to describe the demand side and the roadmap for the adoption of technology. Consumer spending on communications services is very important on each country's trends and the amount of money the subscribers are willing to spend. Additionally the market's efficiency as the consumers are demanding more services is described from the number of services that are activated in 3 general areas, mobile games, music and TV. If all three services are offered in the market then the value "1" is assigned, if one of the three services "0.33" and two of the three "0.66". A market is more efficient and is converging faster into new services and technologies, when it offers all of the three services, showing the consumer's demand and advanced needs. The category metrics are consumer spending on telecom services per household and active mobile services.

Finally, the last category is the R&D spending, accounting for 15% of the overall score.

The Telecom investing as a rate of the overall Gross Domestic Product (GDP) index is a significant metric that should be considered as part of the country's strategy especially in the long run. The investment could include trials, new networks and R&D projects etc. Additionally a country's profile could be completed with the Information and Communications Technology national spending rate. That metric could differentiate the countries and the special weight they put on the ICT sector overall. All this spending should be expected to pay back or to bring some results to the market after a certain amount of time that could range from 4-5 years. Thus the volume spent today, could pay back by 2011 and contribute into the 4G commercial deployment.

Methodology | 4G READINESS ASSESSMENT

The need for strategic planning and new services has urged the need for new studies that could give an idea of the current 4G status of the countries and their move towards the future 4G deployment.

The new 4G readiness concept could be defined as "state of play" of a country's mobile wireless 4G preparation status, and the ability of its potential and existing consumers, businesses and governments to use in the future the mobile wireless and broadband to their benefit. Based on the 4G readiness criteria we will rank the countries as a first step in estimating how soon they will close the gap to new 4G technological environment.

To measure each country's innovation using the Motivation/Ability framework (Figure 1). In this framework, we are describing the 4 different quadrants and how they are adjusted into our problem. The Motivation means that the 4G including the digital convergence should be the "pot of gold" and the new opportunity awaiting for the winners that most likely would be the first movers. The Ability describes the resources needed to develop 4G and craft them into business models for new products and services.

 
Figure 1: Motivation/ability framework 

In the "Looking for a target" section, the operators are still undecided regarding the more beneficial choice or are lacking the spectrum to develop a new market. This hesitation also can derive from the "Looking for the Money" section, since the players are still expecting the 3G to pay off before they move into a new investment or wait for the LTE, in order to upgrade the GSM networks that might also include lower cost, much less than developing a WiMAX solution. "The Dilemma" is what we can quantify using our 4G readiness metrics and estimate per country, assuming basic innovation and ability. Finally "The Hotbed" is addressing all the innovative countries that feel confident and in the right path for the 4G adoption in the near future.

Other important non-market factors for 4G based on the framework development are:

• Industry standards
• Cultural norms
• State of technological development
• Government regulation
• Country's intellectual property infrastructure

We are applying non-market metrics and factors, because there are no markets structured shaped yet and the current 3G markets provide very little knowledge to support the new landscape for 10 years from today.

More specifically we will rank the following list of countries that are included in the top 20 of the referred study: Canada, Hong Kong, Netherlands, Switzerland UK, Denmark, Germany, USA, Japan, Sweden and Finland.

Also, some other countries will be added, such as China due to the China Mobile 4G activity and trials as mentioned before. Other strategic countries added in the sample: India, Russia, Brazil due to the following facts or figures:

• Almost represent half of the world's population
• Showing record in wireless adoption in the last few years

In our methodology we are using as input countries with the most efficient digital users, assuming they are more technologically innovative, demanding more advanced services than the rest of the world. The suggested categories and the data collected will be similar to the e-readiness study, adjusted more specifically when needed into the mobile wireless dataset, trying to include important non-market factors as already described. We assume in most cases that the 4G evolution can be considered as a digital subcategory developing similar categories and criteria.