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NextGen Networks 2 - LTEWhat’s changing mobile IP?

16 November 2011 - Frédéric [email protected]

mailto:[email protected]

mailto:[email protected]



Content► Introduction

► Mobile connectivity & smartphones

► LTE devices

► LTE networks status & tariffing

► LTE spectrum: valuation and fragmentation risks

► Conclusions



3



Introduction



Mobile status: Europe vs. USA

Mobile turnover +1% (2010/2009)-3% (2Q11/2Q10)

+5,2% (2010/2009)+6% (2Q11/2Q10)

Data revenues share (end-2010) 26.2%29-32% (BoA)

33.2%37% (BoA)

Mobile CAPEX Almost flat +18% (2Q11/2Q10)

LTE launch date/ pop. covered End 2009 (Sweden)

Limited launch except inGermany

End 2010

VZW: 110 M pop (05/2011)66% pop mid-2012

Mobile ARPU (end-2010) $22.5 $50 (-0.2% y-to-y)

Mobile penetration (end-2010) 128%

Fragmented markets

98.5%

4 carriers have 93% of thesubscribers

Smartphone penetration (end-2010) Vodafone: 19% Verizon: 32%

Source: IDATE & BoA

► The USA are clearly leading LTE deployments with massive coverage and heavy investments



Mobile status: GDP and mobile revenues

► Economic slowdown effect on wireless revenues

Source: BoA

► The 2008-2009 slowdown had a significant impact on wireless revenues in Europe



Mobile traffic increase

Mobile traffic usage is getting close to DSL Mobile data consumption trends

Teliasonera Sweden: 14 - 15 GB

Yota Russia: 13 GB*Clearwire : 7 GB

CSL HK : 6 GB

SK Telecom : 7 GB

Average traffic consumption per user observedin 2010

Source: IDATE from operators

Mobile broadband traffic mimics the kind of traffic seen on fixed broadband networks

► Mobile users are running similar applications as on fixed networks: IM, Skype voice call, socialNetworking, video streaming…

Facebook increased its mobile traffic consumption by 200% during the 1H2010 while Twittergrew by 310% in the meantime (Source: Allot)

Video represents 50% of the world's mobile traffic in 2010

► Moving from traditional voice in favor of data-centric, bandwidth-intensive applications

*One customer used 2 Terabytes of data in a single month (2010)

1 MB

1-2GB

1 mn of MP3Monthly capfor many 3Gsubscriptions

7 GB

Monthly usageon Clearwire’s

network

200MB

2010 traffic figures

(per broadband subscription - not at scale)

Monthly usageon DSL

networks

7-15GB

Firtst monthlycap for AT&T

6.6 MB per day 33 to 66 MB per day 233 to 500 MB per day 233 MB per day



Mobile traffic forecasts 2010-2020

► Total worldwide mobile traffic will reach more than 127 EB in 2020, representing an 33 fold increasecompared with 2010 figure.

► We anticipate that the total voice and data traffic will reach 45 EBytes in 2015 compared to less than2 EBytes in 2009. The bulk of the traffic will be video traffic.

Network capacity units:

Source: IDATE for UMTS Forum

-

20.00

40.00

60.00

80.00

100.00

120.00

140.00

2010 2015 2020

Y e

a r l y

t r a f f i c

i n

E B

Europe

Americas

Asia

Rest of the world

World

Total mobile traffic (EB per year)

Note: mobile traffic on licensed spectrum only (Wi-Fi excluded)

Total mobile traffic



Mobile connectivity & smartphones



Mobile Internet usage: already here, and geared for growth

2010: 21.2% mobile Internet penetration,or 1.1 billion subscriptions worldwide

2015: 37.0% mobile Internet penetration,or 2.67 billion subscriptions worldwide

►Leading region: Asia Pacific

● 27.0% penetration rate, or 691M users

● largely thanks to Japan, who has close to

80% mobile Internet penetration

►North America: 26.0% penetration rate

►EU27: 17.9% penetration rate

Mobile Internet penetration, 2008-2010 Mobile Internet penetration, 2011-2015 forecasts

►North America to overtake Asia Pacific by2015

● North America will climb to 43.6% penetration

● Asia Pacific to grow to 39.1% penetration

►EU27 will remain behind these two regions,but will enjoy healthy growth to 35.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2008 2009 2010

France Germany Italy Spain UK

USA Japan South Korea Europe World

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2011 2012 2013 2014 2015

World Europe France Germany Italy

Spain UK USA Japan South Korea

Source: IDATE Source: IDATE



Mobile connectivity devices: not just about smartphonesConnectivity devices provide the better value

compared to smartphones…

… and overall shipments will maintain a

steady growth

►ARPU for connectivity devices can be morethan double that of smartphones

● Particularly strong with business use

● Also means they consume more traffic

►Tariffs for users are also more favourable

● Per GB price cheaper for connectivity devices

● Smartphone data tariffs are still unstable

Price per GB comparison between devices, UK

Shipment and breakdown of mobile connectivity devices, 2011-2015(thousands)

►By around 2013, embedded connectivitydevices will out-ship external ones

● Decreasing module prices, user friendliness

0

5

10

15

20

25

30

35

Smartphone iPad Dongles Netbooks/laptops

Note: the tariff with the best per GB value is shown in this figure




Smartphone shipment penetration forecast

Advanced countries: US, EU5 and Japan Emerging countries: BRIC

► USA: Currently leads, and will continue to leadsmartphones shipment penetration

► EU5: Whilst behind the US, will show steadygrowth higher than worldwide penetration

► Japan: Starts as laggard, but expected tobecome one of the leaders in next few years

● Smartphone shipment penetration was lower than

that of the world up to 2010, but by end 2011,

expected to be one of the leaders

% of smartphone shipments, 2010 - 2015


% of smartphone shipments, 2010 - 2015

► Brazil: Roughly in line with worldwidepenetration

► China: Whilst they have a massive population,smartphone penetration expected to remainrelatively low for now

► Russia: Expected to show steady growth, a littlebehind China

► India: Expected to show the least and slowestgrowth of penetration

0%

10%

20%

30%

40%

50%

60%

70%

2010 2011 2012 2013 2014 2015

World EU5 USA Japan

0%

10%

20%

30%

40%

50%

60%

2010 2011 2012 2013 2014 2015

World Brazil Russia India China



Smartphone shipment forecastThe heavyweights: China, US, EU5 Remaining BRIC countries and Japan

►2011: US leads number of smartphonesshipped, followed by the EU5 and then China

►2013: Whilst US continues to lead, Chinacatches up with EU5

►2015: China to overtake the US to becomethe nation to ship the most smartphones

►China, due to its massive population, will

ship the most smartphones despite theirlower penetration rates

Total number of smartphone shipments, 2011 - 2015


Total number of smartphone shipments, 2011 - 2015

►Compared to China, the other BRICcountries have much smaller totalshipments

►Japan, despite its high smartphonepenetration rate, remains low in terms oftotal shipment numbers due to the countryitself being much smaller. They are,however, ahead than any of the EU5 nationson an individual basis.

0

20 000

40 000

60 000

80 000

100 000

120 000

2011 2012 2013 2014 2015

China USA EU5

0

20 000

40 000

60 000

80 000

100 000

120 000

2011 2012 2013 2014 2015

Japan Brazil Russia India



LTE devices



LTE devices: positioning and strategies of main players

LTE devices roadmap

Already close to 200 LTEdevices available

Source: IDATE

► For chipset manufacturers, it will be seen that, in order to be able to succeed, the increased capabilities of mobile devicesincreasingly require competencies in various areas not limited to baseband. In our judgement, this will see Qualcomm,NVIDIA and ST-Ericsson establishing themselves as Tier 1 players in this market

► For mobile device manufacturers, the challenges will be to have the best possible integration of 4G into existing devices,with, of course, a series of challenges: technical, cost, IPR (Intellectual Property Rights) and Time To Market. Each of thedevice manufacturers has so far adopted different strategies. Some, such as Apple, have adopted a cautious approach,waiting for the technology to mature for mass market adoption. On the other hand, device vendors such as HTC orSamsung and LG have entered the market very early in an attempt to differentiate themselves and increase market share.

In the long term, however, we do not see early LTE adoption into devices as an entry barrier for newcomers

LTE: a game-changer in the mobile industry?



Review of LTE devices availability

Early LTE handsets:Samsung Craft and

Galaxy Indulge

Voice supported on 3G networks

HTC Thunderbolt, Verizon, firstLTE Smartphone

Dongles and personal hot-spot devices prove to be popular

Tablets are an important part of the device offer Routers for rural areas (Germany, Verizon)

Novatel MiFi 4510L mobile hotspot

Dongles & mobile hot-spots

Tablets

Mobile handsets: early developments

Other connected devices

Motorola Xoom tablet

ZyXEL LTE fixed router

Sierra Wireless M2M LTE gateway

Samsung’s first LTE dongle

AT&T’s first mobile hotspot and dongle

AT&T’s first smartphones

Samsung’s GalaxyTab 10.1

►30 Modules, 11 Tablets, 10 Notebooks, 2 PC Cards, 27 Smartphones, 70 Routers, 47 Dongles - Source: GSA 11/2011

►700 MHz: 106, 800 MHz: 42, 1800 MHz: 41, 2600 MHz: 52, 800/1800/2600 MHz: 32, AWS: 35




USB dongles and mobile hotspots

Manufacturer Device name Chipset used Modes Bands Launch date Epicom Unknown Qualcomm Unknown Unknown Q3 2011 Huawei Huawei Mobile WiFi E589 Qualcomm MDM 9200 LTE/HSPA/GSM 2600, 2100, 1800, 900 MHz Q3 2011 Novatel Novatel MiFi 4510L Qualcomm MDM 9600 LTE/CDMA EVDO/1x RTT 700 MHz for LTE Q1 2011 Samsung Samsung SCH-LC11 LTE/CDMA EVDO/1x RTT 700 MHz for LTE March 2011

Source: IDATE

Novatel MiFi 4510L mobile hotspot

Thanks to more mature chipsets being available commercially and more LTE networks being launched worldwide, thedevice market has evolved faster than expected

The first multi-mode dongles have been released

The basic USB dongles were naturally followed by MiFi devices




Source: IDATE

Early LTE handsets: Samsung Craft andGalaxy Indulge

The early launch of the first LTE handset (Samsung Craft) on the USmarket (in 2010) has come sooner than expected

HTC was the first mobile device manufacturer to launch an LTE-poweredsmartphone, the Thunderbolt, for the Verizon network

The table below is a summary of announced LTE handsets. Most of themare for the Verizon Wireless Band 13 (700 MHz) LTE network, and arepowered by a Qualcomm chipset.

HTC Thunderbolt, Verizon, first LTESmartphone

Manufacturer Device name Specifications HTC Thunderbolt 1 GHz Snapdragon processor / MDM 9600 / Android 2.2 / 4.3" capacitive screen / 8 GB / 8 MP camera + rear-facing camera / DLNA support

LG Revolution 1 GHz Snapdragon processor / MDM 9600 / Android 2.2 / 4.3" capacitive screen / 16 GB / 5 MP camera + rear-facing camera / HDMI / DLNA support

Motorola Droid Bionic 4G Dual core 1.2 GHz Cortex A9 processor / MDM 9600 (*) / Android /4.3" capacitive screen / 16 GB / 8 MP camera + rear-facing camera / HDMI / DLNA support

Samsung

Craft Feature phone / Samsung CMC 2200 + Via Telecom / Proprietary OS / 165 MB internal memory + SD memory card / 3 MP camera

Galaxy Indulge 1 GHz Hummingbird Samsung processor / Android 2.2 / 3.5” Capacitative screen / micro SD slot / 3.2 MP camera + 1.3 Mp rear facing camera /

Stealth 4G 1 GHz Hummingbird (Cortex A8) processor / MDM 9600 / Android 2.2 / 4.3" capacitive screen / 16 GB / 8 MP camera + rear-facing camera / HDMI / DLNA

support

Mobile handsets: early developments




Source: IDATE

Motorola Xoom tablet

Manufacturer Device name Specifications Launch date Comments Motorola Xoom Nvidia Tegra 2 Dual core Cortex A9 1 GHz processor /

MDM 9600 (*) / Android 3.0 / 10.1" capacitive screen / 32

GB + SD card / 5 MP camera + 2 MP rear camera / HDMI /

725g

Q3 2011 First launched with 3G only, it wil l be hardware-upgraded to LTE in Q2 2011.

SD Card and Adobe Flash support not functional when launched but

expected to come with software upgrade.

RIM Playbook 1 GHz Dual core Coretex A9 processor / QNX / 7"capacitive screen / 16 - 32 - 64 GB / 5 MP camera + 3MP

rear-facing camera / HDMI / 400g 2nd half of 2011 Will come first in a WiMAX edition for Sprint, and later in an LTE version,

probably for Verizon. Will support Android application through a porting of the

Android Dalvik Java virtual machine.

Samsung Galaxy Tab 4G 1.2 GHz Coretex A8 Hummingbird processor / Android 2.2 /

7" capacitive screen / 2 GB / 5 MP camera + 1.3 MP rear-

facing camera / DLNA / 400g end of Q2 2011 (*) Samsung is constantly updating its specs depending on competitors. It is

thus still unclear if the version finally released will have these characteristics

or not. Android 2.2 is, among others, not the most app ropriate OS for tablets.

ZTE - Light LTE 1.2 Ghz undefined processor / Android 3.0 / 10 ”

Capacitative screen / 4/8/16/32 GB / 5 MP camera + 1.3 MP

rear facing camera - Planned for Q1 2012 It is not clear if V11 LTE tablet and Light LTE tanlets are the same devices.

The baseband will support FDD LTE / HSPA / WCDMA / Edge

The tablet segment is bristling to establish itself on the mobile device marketquickly, especially as mobile device manufacturers do not want to let Applegrab the whole of the pie

Motorola was the first to announce an LTE-based version of its Xoom tabletin January 2011

Below is a summary of announced and expected LTE tablets on the market:

Tablets: LTE as differentiating advantage?




Source: IDATE

Sierra Wireless M2M LTE gateway

Company Name of the product Kind of product Specifications

Sierra Wireless Airlink GX440 M2M gateway Band 13 (700 Mhz), 3G gateway upgradable to 4G to ease transition

Cinterion NA NA Reportedly working on it

As far as M2M communication modules and gateways are concerned, somecompanies have already announced product availability.

This is notably the case of Cinterio and, more recently, Sierra Wireless but thecase for such use has not yet been proved.

M2M usages are today rather narrowband usages and sensitivity to prices is veryhigh, meaning that M2M LTE devices are not yet particularly relevant.

However, remote video surveillance is seen already as a worthy usage for LTEM2M.

Besides, as very few 3G M2M modules are today available, companies may wellchose to switch directly from GPRS / Edge module to 4G modules, so as to

maximise the communication module life cycle. Below is a summary of availableLTE M2M products:

Machine to Machine communication modules




Source: IDATE

ZyXEL LTE fixed router

Fixed routers and / or gateways: as for Fixed (Ultra) BroadbandWireless Access, some companies have been devising LTE homegateways to serve grey areas in areas of low population density. Thismarket could be driven by countries such as Germany where MNOsare obliged by their license to deploy broadband in such areas.

eReaders are, broadly speaking, very specialised tablets with adaptedhardware and electronic ink display enabling long-lasting batteriesand increased comfort for reading. We do not see, however, thebusiness case for LTE support in these devices, with their verycompetitive prices. We believe more eReader manufacturers willeither enter the tablet market with a device proposition or adapt their

content distribution platform to be available on smartphone

Mobile gaming devices: some companies – Sony Ericsson is onesuch – are now transforming their smartphones into gaming devicesrather than adding connectivity to existing gaming devices

Kindle store on iPad and Samsung Galaxy Tab

Sony Ericsson Xperia Play

Other LTE devices



LTE networks status & tariffing



LTE commercial services

The LTE ecosystem is growing from strength to strength with more than 200 operators already having

announced their commitment to LTE technology

Source: IDATE – October 2011

Operator Country Date Frequency band AT&T USA 09/2011 700 MHz A1 (Telekom Austria) Austria 11/2010 2.6 GHz Aero2 Poland 09/2010 1800 MHz Bell Mobility Canada 09/2011 1.7/2.1 GHz (AWS) CSL Hong-Kong 11/2010 1800 MHz & 2.6 GHz DoCoMo Japan 12/2010 2.1 GHz Elisa Finland 12/2010 2.6 GHz EMT Estonia 12/2010 2.6 GHz LG U+ South Korea 07/2011 2.1 GHz LMT Latvia 05/2011 1800 MHz M1 Singapore 06/2011 1.8 GHz and 2.6 GHz MetroPCS USA 09/2010 1.7/2.1 GHz (AWS) MTS Uzbekistan 08/2010 2.6 GHz Mobily Saudi Arabia 09/2011 2.6 GHz Net4Mobility – Telenor & Tele2 Sweden 11/2010 2.6 GHz O2 Germany 07/2011 800 MHz

Operator Country Date Frequency band Omnitel Lithuania 04/2011 2.6 GHz Rogers Wireless Canada 07/2011 1.7/2.1 GHz (AWS) SK Telecom South Korea 07/2011 2.1 GHz Smart Communications Philippines 04/2011 2.6 GHz STC Saudi Arabia 09/2011 2.6 GHz T-Mobile Germany 04/2011 800 MHz TeliaSonera Denmark 12/2010 2.6 GHz TeliaSonera Finland 05/2010 2.6 GHz TeliaSonera Norway 12/2009 2.6 GHz TeliaSonera Sweden 12/2009 2.6 GHz UCell Uzbekistan 08/2010 2.6 GHz Verizon Wireless USA 11/2010 700 MHz Vodafone Germany 12/2010 800 MHz Zain Saudi Arabia 09/2011 2.6 GHz



LTE deployment roadmapGeographical mapping of early LTE commercial deployment

Major operators LTE commercial deployment schedule

Source: IDATE

Canada and USA

Europe

Asia

3GPP WCDMA

Operators

TD- SCDMA

3GPP2

CDMA

operators

2009 2010 2011 2012 2013

In September 2011, 30 operators hadlaunched LTE service and at least 16 more areexpected during the second half of the year

Major deployment for Verizon Wireless: 110 Mpop covered at end-2010 and 160 M at mid-2011 (nationwide by 2013)

Limited coverage for European operatorsexcept Germany

LTE subscribers figures Sept. 2011

Verizon Wireless: around 3million

DoCoMo: 390,000 Xi (LTE)

subscriptions, with a full-year

target of 1.3 million



Enablers of mobile traffic and tariffing trends

Source: IDATE

►Towards more differentiation (device type, speed…), more QoS management



LTE tariffingTeliaSonera (Sweden) - 2009

► EUR 62 per month including the usage of 30 GB data per month

► Additional data volume costs € 8.7 per 2GB and € 12.9 for 5GB

MetroPCS (USA) - 2010

► The $55 plan includes unlimited voice, texting and LTE data access

► LTE-capable Samsung Craft for $299

A1 Telekom (Austria) - 2010

► Plans LTE commercial service in Vienna in the 2.6 GHz band

► 30 GB of data a month at speeds of up to 150 Mbps for €90 per month

Vodafone (Germany) - 2011

► 7.2 Mbps downstream for €39.99 per month with a cap of 10 GB

► For a downlink speed of 50 Mbps and 30 GB cap, the monthly cost is

€ 69.99

Source: IDATE

Plan Monthly fee Monthly data

Allowance

Overage fee

4G mobile broadband plans (for 4G USB modems) USD 50 5 GB USD 10 per 1 GB

USD 80 10 GB USD 10 per 1 GB

Mobile broadband connect and 3G mobile hotspots

(for smartphones and feature phones)


Mobile broadband plans (tablets, netbooks) USD 20 1 GB USD 20 per 1 GB




Name and scope of rate plan Speed/‘Surfzone’

hotspot

speed USB-modem(for contract

of 18 months)

Datavolume

Monthly tariff/rate with

discount 1 Mellan 4G (‘Intermediate 4G’) 5-10

Mbit/s

<22 Mbit/s Included 10 GB SEK 299

SEK 249

Stor 4G (‘Grand 4G’) – Promotion

price

10-20

Mbit/s

<22 Mbit/s Included 20 GB SEK 349 for

18 months2/

SEK 299 for

18 months3 Total 4G – Promotion price 10-80

Mbit/s

<22 Mbit/s Included 30 GB SEK 349 for

six months4

SEK 249 for

6 months5

http://www.telia.se/privat/produkter_tjanster/mobilt-bredband/abonnemang/mobilt-bredband-mellan-4g/mobilt-bredband-mellan-4g.page

http://www.telia.se/privat/produkter_tjanster/mobilt-bredband/abonnemang/mobilt-bredband-stor-4g/mobilt-bredband-stor-4g.page

http://www.telia.se/privat/produkter_tjanster/mobilt-bredband/abonnemang/www.telia.se/privat/produkter_tjanster/mobilt-bredband/abonnemang/mobilt-bredband-stor-4g/mobilt-bredband-stor-4g.page








http://www.telia.se/privat/produkter_tjanster/mobilt-bredband/abonnemang/mobilt-bredband-stor-4g/mobilt-bredband-stor-4g.page

http://www.telia.se/privat/produkter_tjanster/mobilt-bredband/abonnemang/mobilt-bredband-mellan-4g/mobilt-bredband-mellan-4g.page



The LTE wholesale model

Source: IDATE

Sells MobileWiMAXcapacity

Will sell LTEcapacity

Provides cellssites and

helps buildingtheterrstrial

LTE network

Build a common GSM and LTE

network (Sweden)

Will sell LTE

capacity to

MVNOs anddistributors Sells LTEcapacity

Sharingagreement?

Sells LTEcapacity?

Builds a wholesale LTE network inthe 2.3 GHz band for rural areas

Builds a wholesale LTE network in

the 1800 MHz band (Poland)

Plans to build a wholesale LTEnetwork in the S-band (USA)

Many actors using newspectrum (satellite L-

Band, S-band, 2.3GHz…)

Consolidation likely inthe USA

Difficulties in Russia

Sharing and wholesale

model can becombined



LTE subscribers forecasts

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Asia-Pacific 1,066 8,383 29,260 70,402 133,310

Western Europe 1,103 4,292 14,946 44,607 85,246

Central & Eastern Europe 68 1,547 3,600 11,592 21,879

North America 11,635 32,588 58,323 85,535 118,955

Latin America 247 1,027 3,402 11,128

Africa-Middle East 223 1,469 5,298 8,493

Total 13 872 47,280 108,624 220,836 379,012

2011 2012 2013 2014 2015

Source: IDATE (June 2011)

► By the end of 2015, weforecast that overall there willbe more than 379 million LTEsubscribers (worldwide).

► We forecast 13.8 million LTEsubscribers at the end of 2011with the USA representing thebulk of this figure with11.6 million subscribers.

► At the end of 2015, Asia-Pacific should represent35.2% of the total, North

America 31.4% and WesternEurope 22.5%.



LTE spectrum: valuation &

fragmentation risks



LTE spectrum

► Regional harmonisation likely to be the first step

Americas: DD (700 MHz), AWS, 2.6 GHz

Europe: DD (800 MHz), 1800 MHz, 2.6 GHz

Asia Pac: 2.3 GHz, 2.6 GHz

► In the USA, LightSquared will use specific bands (1.4-1.6

GHz…)

► Roaming is not a priority today

Source: IDATE

Main LTE frequency bandsFragmentation is here Countries Existing frequency bands New frequency bands

Europe 900 MHz

1800 MHz

2.1 GHz

800 MHz (790-862 MHz – Digital Dividend)

2.6 GHz

USA 850 MHz

1.7/2.1 GHz (AWS)

1900 MHz (PCS)

2.6 GHz

700 MHz (698-806 MHz)

1.4-1.6 GHz (LightSquared)

S-band (Dish)?

South America 1.7/2.1 GHz (AWS)

1800 MHz

1900 MHz (PCS)

700 MHz (698-806 MHz)

2.6 GHz

China 2.3 GHz

2.6 GHz

Japan 850 MHz

1.7/1.9 GHz

2.1 GHz

700 MHz (698-806 MHz planned)

1.5 GHz

South Korea 1800 MHz

2100 MHz

800 MHz

Rest of Asia-Pacific 1800 MHz 700 MHz (698-806 MHz planned)

2.3 GHz

2.6 GHz

Legend: Currently used by LTE Likely use by LTE Other mobile frequency bands

5.1

84.2

29.9 20.3

49.6 50.670.3

518.2

10.7

54.531.1

71.4

0

100

200

300

400

500

600

Australia 850

MHz 2004

Canada

AWS 2008

France

UMTS core

band 2001

France Free

2009

France 2.1

GHz Orange

2010

France 2.1

GHz SFR

2010

Germany

800 MHz T-

Mobile 2010

Germany

UMTS core

band

Germany

2.1 GHz

2010

Spain 800

MHz 2011

Sweden 800

MHz 2011

USA 700

MHz 2008

Premium spectrum ( € cents per MHz per pop)

► EUR 70 cents per MHz per pop in Germany for

the DD: very close to the level reached in theUSA. In Sweden it sold for EUR 31 cents, inSpain for EUR 54 cents and in Italy for 85 cents.

► 2.6 GHz spectrum much cheaper: in the EUR0.1-10 cents range

► France 2.6 GHz: € 11 cents

► Italy 2.6 GHz: € 6 cents

Spectrum price



TD-LTE: a complement to LTE FDD

Source: IDATE

► TDD mode in China and in India

There is strong potential for TD-LTE in China as it is seen asthe natural evolution of the home-grown 3G TD-SCDMAstandard;

China Mobile, the first mobile operator in the World by thenumber of subscribers, is currently rolling out its 3G networkusing the TD-SCDMA technology. The operator claims that60% of its CAPEX will be reusable for its planned TD-LTEnetwork. A strong ecosystem is appearing as there is alsosupport from BWA actors in India and, in addition, someMobile WiMAX actors could shift to TD-LTE in the comingyears

► The growing interest for TD-LTE can be explained by

the following factors

Unlike 3G, the TDD and FDD versions of LTE asdefined by the standardisation body 3GPP are 90%similar.

Availability of (unused) TDD spectrum

Ecosystem: there is strong support from leadingmobile operators + some WiMAX actors (Yota &Clearwire?)

Likely frequency bands for TD-LTE

TD-LTE: already in commercial service

► First TD-LTE launch in September 2011

Migration paths to TD-LTE

TD-SCDMA

Mobile-WiMAX

Super-PHS

TD-LTEadoption

Mobile-WiMAX

2.6 GHz TDD spectrum

2.3 GHz spectrum A n n o u n c e d i n M

a y 2 0 1 0 c h o i c e o f T D - L T E

T D - L T E s e l e c t e d a s n a t u r a l

e v o l u t i o n f r o m T D - S C D M A .

E a r l y t e s t s

W i l l i m p l e m e n t

a T D - L T E n e t w o r k i n 2 0 1 2 / 2 0 1 3

W e n t b a n k r u p t c y i n 2 0 0 9 .

M i g h t c h o o s e T D - L T E

Tests Initial deployments Mass market

2010 2011 2012 2013 2014



First commercial

TD-LTE launch

Operators 3G Technology Frequency band Date

P1 (Malaysia) Mobile WiMAX 2.3 GHz 2012

China Mobile TD-SCDMA 2.3 GHz 2011-2013

India WCDMA and CDMA 2000 2.3 GHz 2011-2012

Europe WCDMA and TD-CDMA (unused) 2 GHz >2013?

Europe none 2.6 GHz 2011-2013

Yota (Russia) Mobile WiMAX 2.6 GHz 2011

Clearwire (USA) Mobile WiMAX 2.6 GHz 2012-2013

Willcom (Japan) Mobile WiMAX 2.6 GHz 2012?



32

Need foradditional

capacity

Reduce costs

Competition

Increase

ARPU

Provide

higher datarates

Need for

additionalcapacity

Reduce costs

Competition

Increase

ARPU

Provide

higher data

rates

Need for

additionalcapacity

Reduce costs

Competition

Increase

ARPU

Provide

higher data

rates

Need foradditional

capacity

Reduce costs

Competition

Increase

ARPU

Provide

higher datarates

Need foradditional

capacity

Reduce costs

Competition

Increase

ARPU

Provide

higher datarates

Need foradditional

capacity

Reduce costs

Competition

Increase

ARPU

Provide

higher datarates

Reduce costs

Competition

IncreaseARPU

Reduce costs

Competition

IncreaseARPU

Reduce costs

Competition

IncreaseARPU

Need foradditionalcapacity



Providehigher data

rates

Providehigher data

rates

Providehigher data

rates Source: IDATE

LTE strategies

IDATE has identified five

key drivers as reasons for

MNOs to migrate to LTE:►Reduce costs

►Need for additional

capacity

►Increase ARPU

►Provide higher data

rates

►Competitive pressure



Conclusions



Conclusions

Mobile sector still dynamic in the USA, struggling in Europe

Devices:

Smarphones representing a growing part of devices shipments

LTE devices coming slowly to the market

The US market is currently the priority for LTE device manufacturers

LTE networks

RAN available, LTE commercial networks in 2010

IMS core networks being built, key to VoLTE offering

LTE delivers the expected data rates and latency

LTE-Advanced: probably earlier than expected

LTE is seen as a solution to congestion and saturation network issues in dense areas

LTE spectrum

Fragmentation risk

Regional harmonization likely

MNOs strategies

New technology path

More capacity/ higher data rates

Network sharing developing and wholesale operators appearing



The “IDATE Watch Services” are specifically designed to provide operators,

vendors, government bodies and regulators with a comprehensive andcontinuous analysis of the issues that impact the markets

> FTTx Watch Service > LTE Watch Service

Database - a unique, continually updated

market database, providing market data by

country and by technology and forecasts

Insights - Monthly views on key issues

Market reports - in-depth analysis

Analyst Access - consulting hours, analystbriefs, presentations



THANK YOU!

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idate digiworld summit 2011

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