-- Abbreviated version --

The Wireless Foresight report

Contents
> Introduction
> Scenario 1: Wireless Explosion, Creative Destruction
> Scenario 2: Slow Motion
> Scenario 3: Rediscovering Harmony
> Scenario 4: Big Moguls and Snoopy Governments
> Trends and Fundamental Drivers
> Technological Implications and Research Issues
> Creating the Scenarios
> Challenges for Industry

Introduction

The wireless industry at a crossroads
The wireless telecommunications industry has gone through an amazing development during the last decade. The global number of mobile telephone users is now well over one billion. In December 2000, the number of wireless subscriptions passed the number of fixed line subscriptions. The annual turnover of the industry supplying wireless equipment and terminals can be estimated to about EUR 100 billion worldwide. It is a truly global business with markets spanning the world and large multinationals as well as small companies competing fiercely. At the same time, the telecommunications industry is facing severe difficulties. For the first time, growth rates for mobile telephone subscriptions have slowed down on many important markets. Blinded by the hype in the late 1990s and early 2000, operators have spent enormous amounts on licenses for third generation cellular systems.
With the introduction of packet switched 2.5G and 3G systems, a whole new range of mobile data services are possible. New types of systems, providing advanced services in specific locations will complement the cellular systems. This will no doubt lead to the emergence of new players on the wireless scene and probably a restructuring of the whole industry as a result. The merging of telecommunication, data communica-tion, and media into an integrated industry, will offer new business opportunities for existing and new companies. It seems the industry is at a crossroads. The coming few years will indeed be exciting!

In the Wireless Foresight project, however, we look further ahead, into the wireless world beyond 3G. Which are the most important trends in the wireless industry and what are the long-term fundamental drivers of development? What services will be used in 2015? What technological problems have to be addressed in order to realize a positive wireless future? Which are the most important areas of research?

Project Wireless Foresight
The Wireless Foresight project was carried out between September 2001 and June 2002 at Wireless@KTH, a center for research and education on wireless systems created by the Royal Institute of Technology (KTH) in Stockholm, Sweden, in cooperation with industry. The main objectives of Wireless Foresight were to: (1) create scenarios of the future of the wireless data- and telecommunication industry and systems in 2015 and (2) identify key research areas for the Center and in general.
Four scenarios describing possible wireless worlds in 2015 have been developed. The scenarios are concrete images, including descriptions of the wireless systems of 2015, how these systems are used, and who the most important actors and users are. The main focus of the scenarios is the challenges and development of the wireless industry, i.e. operators, infrastructure vendors, terminal vendors, and service providers/developers. The scenarios are not intended as predictions, but as possible and plausible descriptions of the future. They should be seen as a source of inspiration when thinking about the future of wireless technology and industry.

Wireless applications and services are a huge success in 2015, and in a rapidly transforming industry the old market leaders lost their dominant positions. The old telco world with closed, vertically integrated solutions gave way to layered, open architectures based on IP (Internet Protocol). The datacom industry won the market battle. However, in a large but maturing industry, profit margins were squeezed and the datacom winners could never really leverage their market power.
Users were very active and drove this development towards an open IP world with skyrocketing traffic and an abundance of applications. They preferred choice over convenience and didn’t accept being locked-in to corporate bundles. Governments released a lot of new unlicensed spectrum, undermining operator dominance and triggering a do-it-yourself wireless movement. The Open Source movement, down-loading of music and other copyrighted material, enforced these changes in consumer attitudes and the values of the underground culture gradually became mainstream. Feeling this value shift, governments were more and more reluctant to enforce restrictive IPR (Intellectual Property Rights), further undermining profit margins.
The wireless success changed peoples’ way of work and lifestyle. Being always connected with context sensitive information, a growing part of the knowledge work force could spend most of their time on the move, in meetings or traveling between meetings. Globalization continued and with it the growing trends of traveling and commuting.

Rapidly growing industry
The economic downturn in the early years of the century slowed industry growth for a few years. However, the rapid technological development within the communication and information technology industries continued and essentially all markets and industry segments experienced a more or less continuous growth.

Industry fragmentation – market leaders losing hegemony
The incumbent players consolidated but in a maturing industry profits were eroding as the products became low-margin commodities. Independent consumers under-mined IPR-enforcement. Open Source software and do-it-yourself wireless access further undermined corporate hegemony. The dominant market leaders did not vanish but the rapid technological development was as ruthless in turning profitable products into low-margin commodities as it earlier had been in creating these markets. Industry fragmentation and vertical disintegration accelerated when compa-nies became more and more specialized. When performance of any given technologi-cal function was good enough, design and manufacturing knowledge was no longer a critical asset and modularization set in. As a consequence, this part of the market split into several new markets.

Debt burdened operators losing market dominance
When wireless data started, traditional operators first tried to offer closed telco style services and developed in-house wireless portals. Seamless roaming (as in the voice GSM-world) was very hard to accomplish with wireless data over a number of different underlying networks. The operators failed. The major blow to operator dominance was the rise of unlicensed spectrum and WLANs. By keeping high prices for wireless data, operators opened a market for WISPs based on WLANs.

Telco equipment and terminal vendors lose to datacom attackers
Traditional telco equipment vendors failed in responding to all disruptive innovations in a rapidly changing marketplace. They were adapted to a business model built on selling extremely expensive systems to a few very demanding operators and they were dragged down together with their traditional customers. When the market fragmen-ted, attackers captured emerging sub-markets such as base-stations. Telco terminal vendors lost market power when the commoditization of the market occurred, dominated by open IP access. The critical telco knowledge embedded in the radio and CODEC (coding and decoding) software was over time commoditized by attackers from the NICs, and the datacom industry.

An explosion in services and applications
In the industrial countries as well as in the most successful NICs, cellular systems are complemented with a large number of other systems (e.g. ad hoc networks, WLAN access, satellites, high altitude platforms). Most problems concerning seamless roaming, system integration etc. have gradually been solved. Appetite for wireless applications and services is very high and once the new geographical positioning infra-structure was in place, the number of location aware applications and services grew rapidly. Wireless services are used by everyone and in all segments.

Spectrum – abundant release for unlicensed bands
During 2005-2010, governments released significant chunks of new spectrum. With much more available spectrum, traffic prices fell rapidly and the dominance of the incumbent operators were reduced. Unlicensed spectrum usage was a huge success. The unlicensed bands drove rapid innovation of cheap install-it-yourself »black-box« access points that can double as multi-band base stations.

Batteries and complexity management no show-stoppers
The lifetime of batteries for mobile terminals has increased dramatically since the turn of the century. Batteries are now used on a large scale for an enormous number of services and applications, which has lead to very large production volumes and price drop for these new energy sources.

The wireless world has developed slowly since the turn of the century. The global economic recession during the first decade in combination with real and perceived health problems due to radiation from wireless devices deeply affected the wireless industry. Even though the demand for mobile services has increased, the service explosion that many people envisaged never materialized. The wireless industry has gone through substantial change. Consolidation has increased and the number of companies in each market has been reduced. Technological development has slowed down and profit margins have decreased substantially. The industry has matured. The big NICs, for example China, India, and Russia, are catching up faster than expected.

Economic recession and 3G fiasco
The global economic downturn that started in 2001 turned into a large scale economic recession. The telecom, computer, and media industries were severely affected. It became really bad when a large European operator went bankrupt. This spread very quickly to other operators and eventually to vendors and service providers. Several large telecom actors disappeared and those that survived made massive cuts and saw drastically reduced margins. Many 3G commitments were re-negotiated. Some networks were cancelled and many were merged, resulting in only one or two net-works per country. In many rural areas there is still no 3G coverage.

Health problems from radiation
The long-term studies of how radiation affects humans, presented around 2005, still have a negative impact on industry. The results were clear and most experts agreed that wireless devices, when heavily used, would injure the brain due to radiation from the transmitter. In the beginning, the telco industry argued that the results were inconclusive, but eventually adopted a proactive strategy and managed to avoid total disaster by suggesting strict regulation of radiation levels and by redesigning their products. Usage is still affected, even though most problems are solved.

Security a problem still waiting to be solved
The problem of hacking and virus creation is still significant. Most security codes are quite easily broken and viruses are easily spread in the wireless networks. The problems increased when data services were introduced in the updated 2G systems and were further accentuated with the introduction of 3G. Many people feel that they cannot trust electronic transactions and are seldom willing to e-shop. Nor do they feel secure when contacting, for instance, the government with sensitive information.

The mobile lifestyle loses ground
In the Western world and in Japan the mobile lifestyle came to a halt during the first decade of the century. Many people, especially young families, moved from the cities to smaller communities. Telecommuting, working from home or in local offices became increasingly popular. The result is that fewer people travel long distances to work. One important driver behind this shift is the increasing environmental awareness. Environmental groups also started to campaign for decreased usage of communication devices. For some time, usage was negatively affected but eventually industry was able to handle this issue by significantly reducing the power consumption in equipment and devices.

No service explosion
Despite the hype in the beginning of the century, the mobile service market has experienced a slow growth. Most services used by consumers are still quite simple, focusing on satisfying basic communication and information needs. Many consumers are simply not prepared to pay for advanced services at the price they are offered. Their demands are quite like the ones they had around the turn of the century.

Wireless telecommunication is a mature industry
Telecom has become a mature industry that has gone through consolidation and restructuring. The technological development has slowed down considerably and profit margins in all sectors have decreased substantially. Many platforms, solutions, and components are still designed according to closed and incompatible standards protected by patents. Concentration has increased and the number of players in each market is rather few. Still their profit margins are generally very low.

The big NICs catching up after a slow start
The slow development in the Western world and in Japan in the first half of the 2000s was reinforced by problems in the big NICs (China, India, Russia, etc.). However, around 2010 the situation had improved substantially in many of these countries. Investment in infrastructure started to increase, giving the vendors a chance to recover some of their declining sales. The big NICs are now by far the most important markets for systems and terminal vendors. Moreover, there are now important global players such as operators, vendors, and service providers based in these countries.

Power consumption and complexity management as technical limitations
Despite large research efforts on new battery technology, no significant progress has been made. Many wireless applications are almost impossible to run when the terminal is on battery power and even the simple 2.5G handsets have to be recharged after downloading a new song, video-clip, or after a teleconference session. Despite the slow development, several different types of systems exist. Cellular systems of different generations coexist with other types of systems (WLANs, PANs, broad-casting etc.). The problems of managing this complexity are still not solved.

Balance in life became the dominating value in most industrialized nations where material abundance (and security) could be taken for granted. These are post materialistic times where human and environmental needs are in focus. The wireless industry is experiencing a difficult dilemma: refocus or die! There are fewer service and application providers than predicted around 2000, but the market is not completely dry. The big hurdle is to refocus and rethink business models, offerings, and brand on a market with active and demanding consumers categorized by numerous sub-cultures with individual needs. We see many local operators and service providers that have emerged as a result of the trend to move out of the crammed cities and forming smaller, local communities where people live and work. At the same time there are a few global operators providing global communication for the increasing number of people traveling longer and more often for pleasure, and for smaller but more price insensitive segments.

A sustainable society in balance with itself
The industrialized world is based on the idea of a sustainable lifestyle where friends, family, and the environment are key elements. The high-paced lifestyle that domina-ted the western world in the closing decades of the last century finally went out of control. The consumers became more and more indifferent to brands and commercial messages and no longer accepted companies ignoring ethics, environment, human needs, and product quality. As a result, we saw a number of movements that combined a more sustainable and human perspective on society with a strong individual and social focus. To consider the environment and human needs had become valuable in the marketplace.

Two market segments driving the development
The move towards the new lifestyle started in two segments: Moklofs (Mobile Kids with Lots of Friends) and Elders. The Moklofs are strongly focused on entertainment and messaging services. They participate in communities (both local and global) and are very global in their ways of thinking. This segment is open-minded towards new technologies but they don’t believe smart marketers trying to claim that they will get a new life by buying the latest gizmo. Living in a world of tribes with many lifestyles, they want to express their affiliation with clothes, looks, and stuff they use. However, after the mad era around 2000, the tribes got extremely wary of being exploited. The Elders place high demands on usability and quality of service and they are not afraid of letting their voice be heard. Communicating with the family while on the move or when living apart has turned out to be very important. Healthcare is another important segment, allowing people to check up on their health wherever they are.

Less but more travel
People are moving out of the crammed cities and into smaller and cleaner local communities in the suburbs or countryside. The lifestyle trend is that of working and living in small, local and very social communities. In the cities, the public transporta-tion systems were upgraded while the amount of cars decreased. This is due to harder environmental laws and political decisions to turn more of the city areas into car free zones. Leisure travel is the only form of travel that is increasing all over the world. The main effect of this is a demand for more environmentally friendly ways to travel, but also a need for global communication possibilities.

A few clouds in the sky
Health risks and integrity problems are widely debated, but it is the telco industry’s impact on the environment that people are most concerned with. Especially brominated flame retardants used in electronic equipment has turned out to be damaging to both environment and humans. Lower power consumption for terminals and infrastructure is another issue that consumers want to see improved. The perceived health threats (real or not) are hard to battle, forcing the telco industry and governments to find new ways of restoring public trust in wireless technology.

The industry dilemma – refocus or die
After the initial wave of excitement over the new communication possibilities with 3G, the pace of development slowed down. This left the telco industry confused. The main reason was the industry’s inability to adjust to the mass market’s new attitudes and values. The industry is currently regrouping and adjusting to the new situation. Some players realize this and are adjusting their business models and offerings to the new fragmented marketplace and are as a result highly successful. Other companies failed to understand the new environment (and that they need to change) and are thus having a hard time surviving. The big hurdle is to manage to refocus and rethink business models, offerings, and brand.

Peer-to-peer applications and services a hit
Despite the new market focus there is still a demand for wireless services but the main difference is that the mass market is selective in terms of what kind of information is being received, and when it is delivered. A new market has gradually emerged where personalized and very specific types of services are successful. Examples are: personal (peer-to-peer) communication services, multi-media messaging, personal location based services supporting social interaction, and devices and services forming »family intra-nets«. The demand for peer-to-peer technology has lead to a fierce debate on how to solve the problems with IPRs, where the content providers feel that the operators don’t take responsibility for how their networks are being used, while the operators argue that they are simply providing the infrastructure for communication.

Through consolidation and mergers, large companies, known as moguls, have come to dominate the market. A mogul is a descendant of the early, big information technol-ogy or media companies that managed to survive the crises of the first decade of the 2000s. These (few) grew and expanded outside their original business segments, for instance from being only a systems software manufacturer a company became a big content provider and also started manufacturing devices aimed specifically at using their services. Smaller players were often bought or put out of business due to the dominant position of the big companies. The moguls, together with the world’s governments exert substantial and active control over the information flow and the communication industries. The companies and government are working against the chaotic freedom that used to characterize the early Internet, and the purpose is to protect society and individuals from various unwanted actors and behavior. Examples are: cyber crime, international terrorism, protecting content owners and others from illegal copying of software, music, movies etc. and battling other forms of information use and abuse. The moguls are supported by government since they are seen as more easily monitored. Anonymity on the Net is no longer possible. All users are automatically identified and registered when acting on the Net.
The world is however not an anti-democratic society where the moguls and govern-ments use the Net and the information to gain power and ultimately dictatorship, even though many people fear that this might be the case. Counter- and freedom movements do exist despite heavy measures against them by governments and large corporations alike.

Moguls and governments
In each market segment there are now only one or two totally dominant market leaders. Some market leaders have been able to expand their market power into other areas. Users like these big companies because they feel they can trust them and their products fulfill their needs. There are also no longer any problems with compatibility of software and hardware as there is basically only one choice. Governments like the big companies since they think they can control them. To some extent, the moguls agree to this control, as long as the governments are doing what the moguls want.

Security problems of the 2000s solved
Governments and industries took strong measures against the security problems of the early 2000’s. In 2007, the first »secured devices« where introduced by one of the major hardware and software developers. These devices relied on new, »unbreakable« encryption technologies, and required a personal certificate, together with user biometrics, for use. At the same time it contained circuitry for monitoring the traffic and sending information on possibly unapproved traffic directly to the applicable government agencies.

Moguls in control and slow development in the NICs
Network effects, economics of scale, and successful enforcing of Intellectual Property Rights created a new global economy with large players becoming even larger, resulting in a winner-take-all society. The US government abandoned the anti-trust laws of earlier centuries allowing already big players from America to grow huge on the truly global market. Even though there were quite a few positive signs in the big NICs (e.g. China, India, and Russia) in the early years of the century, their difficulties continued. Financial problems haunted Russia with frequent devaluations of the currency and the integration of China into the world economy slowed down due to political instability.

Incumbent telco players keep control of the market
With traditional mobile operators dominating over new actors, the strategic success factor proved to be brand and customer ownership. The leading European operators managed to survive the financial problems in the early 2000s through debt restructuring together with government rescue packages and a mild regulatory regime, which left them as monopoly players. Relieved of heavy debts and govern-ment demands for rapid 3G investments in rural areas, the operators could generate just enough cash-flow to continue their 3G investments but at a slower speed.

Applications and services focus on convenience for the user
Users keep all their information stored at their favorite big company portal, easily accessible from anywhere, at any time. There are numerous applications and services available, but most users prefer the comfortable convenience of one-stop-solutions. Wireless devices are used for payments, to get profiled advertisements based on geographical location, secure transactions of money between peers and so on.

No free airwaves
Governments have been very slow to release new spectrum during the last decade. Unlicensed spectrum use is heavily limited by extremely low upper limits of emitted power. As the only spectrum owners for wireless, mobile operators remain the dominant gate-keepers in the industry.

Somewhat of a complex world
Managing the growing complexity of a varied wireless world has been a problem. With many diverse types of wireless technologies in the Western world and Japan (such as GSM and iMode) there have been problems of seamless integration between standards and technologies.

Trends and fundamental drivers

The four scenarios are based on a set of »fundamental drivers«, shaping the develop-ment of the wireless world. From the fundamental drivers 14 trends of particular importance have been identified. These are trends whose direction and rate of change are uncertain. They are used as »defining dimensions« of the scenarios.

Trend 1. Development will be more user driven
Up until today it can be argued that vendors and technology have driven the wireless development. This will probably change. The scenarios differ according to the extent the development is user driven and to what segments that are most important drivers.

Trend 2. User mobility will increase
In the future we will probably travel more and longer and we will spend more time commuting. The scenarios vary according to how fast traveling will increase and by means of transportation.

Trend 3. The service and application market will grow
The future market for wireless services will probably be much larger than today, consisting of both complex and basic services. The scenarios differ along a dimension ranging from an abundance of different services and service types to rather few.

Trend 4. User security, integrity, and privacy will become more important
Guaranteeing security, integrity, and privacy is an important problem facing industry. The difficulty and complexity of this issue suggests that it might not be solved by 2015. The scenarios differ according to whether these issues are solved or not.

Trend 5. Real or perceived health problems due to radiation will become more important
A big threat to the industry is health problems, real or perceived, due to radiation from devices etc. Research might indicate that the radiation in fact is dangerous. The scenarios are differentiated according to how big a problem these health issues are.

Trend 6. Environmental issues will become more important
The trend towards increasing environmental awareness will continue. Two areas of special importance are: energy consumption and potentially detrimental substances used in e.g. terminal cases. The scenarios vary in terms of how big these problems are.

Trend 7. Spectrum will become an increasingly scarce resource
Today, most of the spectrum is locked-in by legacy users, e.g. operators, the military and television broadcasters. The shortage is forcing operators to build unnecessary expen-sive infrastructure. Growing usage will aggravate this problem. The scenarios vary according to how much spectrum that is released and whether for licensed use.

Trend 8. The wireless industry will grow
All scenarios are based on the assumption that the wireless communications industry will grow during the coming decade, both in size and scope. The question is how fast.

Trend 9. The big NICs will continue their positive development
There are many signs of positive developments in the most important NICs, e.g. China, India, and Russia. These telecom markets are very large, they grow rapidly and new companies are established with an ambition of becoming global players. The scenarios vary according to how important the big NICs become on the wireless scene.

Trend 10. Market concentration in the wireless industry will change
The future structure of the wireless industry is an open issue. We might see an increased concentration with a few market leaders wielding great market power or a fragmented marketplace where the market leaders have little power. The scenarios differ according to how the industry structure will develop.

Trend 11. The fight for market dominance in the wireless industry will intensify
The merging of telecom, datacom, and media into a single industry will have an important impact on the existing telcos. It is not clear which industry will emerge as the winner. The scenarios differ on whether the traditional telcos sustain their industry dominance or not.

Trend 12. Short terminal usage time and complexity management will become increasingly important problems
Power consumption in the mobile devices and how to simultaneously manage many complex and heterogeneous wireless systems are two crucial technical problems. The scenarios vary according to if these problems are solved or not.

Trend 13. 3G will be implemented
Currently one of the most important issues for the wireless industry is the deployment of 3G. It seems clear that 3G will be implemented, but the question is at what speed and to what extent. The scenarios differ as to the success of implementing 3G.

Trend 14. Protecting IPR on content will become increasingly difficult
The problem of protecting IPR (intellectual property rights), especially on content, is very important for the industry. The scenarios are differentiated according to if these problems are solved or not.

Fundamental Drivers
Underlying the trends used to define the scenarios is a set of fundamental drivers, valid in all scenarios. We believe they will be valid in the next decade. The drivers are a compilation of »common wisdom« from a number of areas: technology, socio-economics, politics, business, the telecom industry, and user values.

Technological Implications and Research Issues

Creating the scenarios gave us the opportunity to place ourselves in the middle of four different future worlds. Here we will introduce a set of statements, »technical implica-tions«, derived from the scenarios. Assuming they are true in 2015 means that the underlying problems and bottlenecks we face today have been solved. The next step is to identify the key research areas for industry and academia in order to create a »positive« wireless future. The technical implications can be summarized as follows:

• The wireless infrastructure will be heterogeneous
• Very high-rate and efficient air-interfaces will exist
• Much of the access infrastructure will be ad-hoc deployed
• Traffic will be IP based
• Cost per transmitted bit will be very small
• No harmful radiation from base stations
• Decreased power consumption of the wireless systems
• Terminals will have a wide range of shapes and capabilities
• Wireless terminals will be cheap, very small, and modularized
• Usage time without charging the battery will be very long
• User interfaces will be highly developed and advanced
• M2M will be everywhere
• Wireless devices will be harmless to people and environment
• Wireless services will become a commodity
• Services will be independent of infrastructure and terminals
• Tele-presence and emotional communication will be drivers
• Global roaming and seamless service will be possible
• Broadband services will be available for all transportation systems
• The end-user will be ‘always best-connected’
• Ubiquitous computing will be everywhere
• Very high level of security can be provided

Seven key research areas
The figure on the following page illustrates seven research areas that were formulated based on the technical implications. The five levels of the figure range from the physical layer in the bottom to the level of the user using a wireless service. These layers represent research areas that coincide quite well with traditional academic disciplines and research groups. The areas on either side of the layers are examples of two fields that are clearly cross-disciplinary in nature. One important conclusion is that the traditi-onal academic research tradition with well-established and very specialized areas of research will not suffice in the future. The need for cross-disciplinary research as a complement is becoming increasingly important.

Air-Interfaces and protocols
With the increasing use e.g. multimedia services, there will be a need for very high rate and efficient air-interfaces. Air interfaces of at least 100 Mbps for wide area coverage and up to 1 Gbps for very short-range personal communication seems to be needed. OFDM (Orthogonal Frequency Division Multiplexing) and UWB (Ultra Wide-Band) are interesting technologies. Other interesting areas are smart antennas (for terminals and base stations) and MIMO channels (Multiple Input Multiple Output).

Resource management
Due to the high cost of developing, building, maintaining, and operating wireless infrastructures in general and cellular infrastructure in particular, efficient resource management will become increasingly important. With resources we mean spectrum, power, and available infrastructures. The large amount and multitude of services in the future will challenge the resource management policies much more than in today’s networks. The necessary data rates may vary substantially, from perhaps 10 Kbps for a voice call to 100 Mbps for a data back-up session. Examples of important areas are:

• Sharing of infrastructure and/or spectrum by many operators
• Dynamic spectrum allocation between different services and systems according to the demand at certain times during the day
• Flexible allocation of network capacity in time and space
• Taking advantage of the commonly asymmetric traffic patterns
• Decentralized resource management for large and complex networks
  

System integration
Providing seamless services and global roaming in a very complex world with a multitude of air-interfaces and system architectures will be difficult. Infrastructures and terminals have to be adaptive, e.g. by employing flexible software radios and modular system design. The key issues are complexity management, decentralized system control, multi-mode and adaptive radios, and standardization of interfaces.

New and advanced services
In the future a multitude of new services will be introduced. Of special interest are location aware services and smart spaces and media. Moving the computers into the network and making them ‘invisible’ to the end user are important features of the future wireless world. Being always connected and having access to computational resources will lead to ubiquitous and seamless services enhanced by smart spaces with a multitude of displays and sensors surrounding the user. However, these services need to be provided in a scalable manner. The same application has to be adapted for low or high data rates, for small or large screens, for low or high price etc.

Usability
At present, the user interfaces of wireless terminals is based mainly on either physical or virtual buttons (existing on a small touch sensitive screen) or input devices like joy-sticks or roller wheels. Most user interfaces are based on proprietary models and are neither standardized, nor intuitive for the user. Research should be focused on devel-oping more user and human centered systems where the technology disappears behind the scenes into task-specific devices, integrated in everyday things.

Low cost infrastructure and business models
A problem with conventional cellular systems (2G, 3G etc.) is that they don’t scale in bandwidth in the economical sense. A large part of the infrastructure cost is related to e.g. network planning and site work. Economies of scale, and certainly Moore’s Law, are not applicable on site acquisition, road works, erecting towers etc. Also, the cost depends rather weakly on the basic radio technology (e.g. the air interface) since current modulation and signal processing technologies are quite advanced and so close to the theoretical limits (Shannon’s Law) that not even a radical improvement in processing capabilities will significantly improve performance. Users are accustomed to be connected anytime and anywhere (i.e. large coverage areas and high availabil-ity), meaning that these parameters hardly can be compromised. If affordable multimedia services are to be possible, i.e. higher data rates at constant or lower cost, either some of the other Quality of Service parameters have to be sacrificed or archi-tectures with radically lower cost factors have to be developed. Another important issue is to develop business models where all important actors on the market can make money. Agreements on revenue sharing between e.g. service providers, content owners, and operators have to be developed as well as roaming agreements between actors operating different networks.

Health and environmental issues
The effect of electromagnetic radiation on the human body is an area of crucial importance for the wireless community. As of yet, no generally accepted scientific research has proved that usage of wireless terminals is dangerous, at least not with the radiation levels allowed today. However, there is a need for more research in this area, especially studies of the long-term effects of radiation on the human body. The impact of the communication infrastructure on the environment is another important issue. One important area is the power consumption in the systems to drive computers, servers, base stations etc. Towers, underground cables, high power transmitters, and access roads to base station sites can also have a negative impact on the environment and on esthetical values.

Creating the Scenarios

Even a very limited literature search shows that there is an incredible amount of scenarios out there. Given the specific aims of our effort, we have of course been more inspired by some scenarios than others, the most important being: the scenarios created in the 4GW project of the Personal Computing and Communications program, the »Book of Visions« by the Wireless World Research Forum, The Swedish Technology Foresight by the Royal Swedish Academy of Engineering Sciences (IVA), and »Beyond Mobile« a study carried out by people at the consultancy Kairo. We have also been inspired by Peter Schwartz’ numerous works on scenario creation.

The standard method for scenario development is a very structured process. It is derived from a hypothesis driven, high speed, working method and is built on quickly identifying what’s most relevant, on cutting the ambiguities. Complexity is reduced in an iterative process where less important scenario dimensions are dropped. Ideally, you end up with identifying the two most important dimensions. If these are assumed to be independent, you can illustrate the scenario space in a two-by-two matrix. Finally, four scenarios are formulated, each in one corner of the matrix.

The Wireless Foresight project partly followed this approach. The main difference is that we have been striving to keep method and format for the scenarios open. When formulating the four final scenarios, we chose to explore what we believe are important topics for the future of the industry. We did not have the ambition of reducing the complexity to two independent variables illustrated in a two-by-two matrix. We have instead developed the scenarios by combining 14 trends in different ways, giving us more freedom in the creation. These trends are in turn derived from a set of fundamental drivers of development, assumed to be true in all scenarios.

Nevertheless, this approach is traditional in the sense that it takes off from the world as it looks today and by identifying driving forces and trends, attempts to say something about the future. The starting point is the present. As a complementary approach, we tried to start from the other end as well, trying to put ourselves in 2015 looking back. This has been done by posing provocative questions and looking for weak signals. This approach has been fruitful in removing the thinking from the bonds of the present. Examples of provocative questions are: How would the wireless world look if base stations can be bought and installed by any user at a very low cost and the user can earn money from providing wireless access to others? What if radiation from mobile terminals proves to be harmful to humans after lengthy exposure? What will happen if one or several of the world’s large service providers for wireless access goes out of business due to large debts? What if government, due to security issues, decides not to release more of the spectrum?

The work was conducted in an iterative manner. On numerous instances we went back and did alterations and changes to work in progress. Preliminary ideas, drafts etc. were been presented and discussed at several occasions in different environments and with experts from various fields, both from industry and academia. These external experts aided in identifying important trends, research issues etc. They also provided a sanity check of our thinking and gave us feed-back in various ways.

There are several important challenges facing the wireless industry in the next ten to fifteen years. Here we highlight a few topics we consider especially important. As opposed to the rest of the report, we are directly expressing our own views here. The discussion is based on topics we believe are critical for a positive development and where industry can stumble if things go wrong or are left unresolved.

Threat from disruptive market change
At first sight, the traditional mobile industry looks very impressive with advanced R&D, high revenues, and billions of users. Products from equipment vendors have a reliability, complexity, and sophistication unheard of anywhere else. But the weak-nesses are there, just below the surface. Equipment and systems are complex and hard to control centrally. Complexity and small production volumes make the products very expensive and product development rather slow. This is less of a problem when the only customers are large operators. But the telco vendors and operators, living in a world of long planning cycles and billion dollar orders, are seriously threatened by attackers with a completely different business model – the datacom industry. What the telco industry might overlook are new technologies that can be used as entry points to attack this status quo: IP, unlicensed spectrum, self-deployed networks, ad-hoc and peer-to-peer networks, self-configurable network elements, and open APIs. The players in the fast moving datacom industry are masters at exploiting weaknesses and finding soft points for attack. They understand that users prefer cheap products here and now – if these products can meet their immediate needs for an acceptable service quality. The market accepts unreliable and simple products if the price is low enough. This is a classical setting for a so-called disruptive market change.

Speed up the process of spectrum release
Radio spectrum shortage is one of the most important inhibitors for further industrial development. If governments allocate more spectrum to the wireless industry, growth will be much faster and prices for the consumer will be lower. For historical reasons, most spectrum is locked-in by legacy users, the military, and television broadcasters. Wireless consumer communication has been given less than a tenth of all usable spectrum between 0.5 GHz and 5 GHz, causing a shortage in urban areas and forcing operators to build unnecessarily expensive infrastructure.

3G and the telco debt threat
An obvious threat for the wireless industry is the enormous debts left from the financial hype a few years back, in particular from the 3G auctions. In addition, European operators are now facing future investments of the same magnitude for building the 3G networks. The business case for 3G would be more reasonable if it was allowed to grow organically with usage and if the large costs for erecting mast towers all over Europe when building new networks could be lowered.

Complexity management
In a future world with billions of users seamlessly connected over a number of heterogeneous networks, complexity will be much higher than today. Hand-over, roaming, personal context sensitive user profiles, billing, and uninterrupted sessions will be unmanageably complex to control centrally.

Radiation a problem, real or perceived
The complicated problem of electromagnetic radiation from wireless terminals and base stations has to be taken very seriously by industry. Even if, as many experts argue, the radiation levels permitted today are in fact harmless, it is a threat to industry that needs to be dealt with. The problem is that »no proof of danger« is not the same thing as »proof of harmlessness«. If users are afraid, it is a problem, justified or not.

Better batteries in wireless devices
With the very rapid development of processor power and memory capacity, the power consumption of wireless terminals will increase dramatically. At the same time, battery capacity develops much slower. It will be very hard to convince the mass market of using power hungry services if battery time drops too much.

Usability and the user in focus
In contrast to the technology driven development in the past, the wireless future will become much more user driven. Usability and intuitive user interfaces will be very important when service access is achieved through a tiny display.

Cheaper infrastructure and viable business models
The current mobile cellular infrastructures have been deployed under a high-cost business model, which has been possible to maintain by high revenues from the users. This is not a viable way forward. Users will not be prepared to see their average wireless bills increase several hundred percent, which is necessary if future wireless multimedia would be carried over traditional networks. Therefore, innovative new ways of providing wireless bandwidth at affordable costs in a world of many heterogeneous networks have to be developed. An example of an important cost driver to avoid in the future is the traditional macro-cell infrastructure with tower masts.

All industries mature
Looking back into history, it seems evident that all industries, even though considered hi-tech in the early days, eventually matured and entered a phase with slower technological development. A phase with profitability being driven by efficiency in manufacturing and large volumes, leading to low production and distribution costs. The question is not if, but when telecom and wireless will mature.