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PositioningforSuccessin4G/LTE

DeclanLonerganVPResearch,YankeeGroup

August21,2012

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A Virtuous (or Vicious) Cycle

AVirtuousCycleIsDrivingtheMobileEconomy

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MobileBroadbandStrategies:HelpingCompaniesProfitfromData

Customers Economics

Technology

Businessmodels

Revenueflows

Pricingstrategies

Serviceinnovation

Channelevolution

Positioning&branding

Demandforecasts

Profitabilityanalysis

Brandpreferences

Segmentationmodels

Buyingbehavior

Consumptiontrends

Complementary

accesstechnologies

Telecomssoftware

3G/4Gnetwork

strategies

Enablingtechnologies

Customers

Technology

Customers

Technology

EconomicsCustomers

Technology

EconomicsCustomers

GotoMarketTechnology

Customers

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Agenda

TheContextforLTE

PositioningOptions

Takeaways

October2:YankeeGroupWebinarAroundtheWorldWithLTE

Hosts:RichKarpinski

andKenRehbehn

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4GIsBornIntoaDataCentricWorld

SMSgottheballrolling

SmartphonesandmobileWebfueleddatagrowth

TabletsandconnectedCEdeviceswilltakemobiledatatonewlevels

Operatorcompetitionanddifferentiationisnowadatagame

Source:YankeeGroupsGlobalMobileForecast,March2012

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MultipleConnectedDevicesIstheNewNorm

WhatdeviceshaveyouusedtoaccesstheInternet(orInternetcontent)inthelastmonth?

88%75%

69%73%

82%

77%55%52%56%

63%

36%31%31%29%30%

49%44%43%43%

63%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

U.K.(n=67)Spain(n=147)Italy(n=153)

Germany(n=133)France(n=70)

U.K.(n=529)Spain(n=604)Italy(n=546)

Germany(n=508)France(n=470)

U.K.(n=381)Spain(n=325)Italy(n=355)

Germany(n=288)France(n=220)

U.K.(n=431)Spain(n=540)Italy(n=613)

Germany(n=479)France(n=409)

Source:YankeeGroups2011EuropeanandU.S.ConsumerSurveysBase:AskedtothosewhoindicatetheyhaveInternetserviceathomeandowneachdevice

Feature

phone

Smartphone

Laptop

Tablet

Createsnewchallengesinpricingandcustomermanagement

U.S.45%average(across

featurephoneand

smartphoneusers)

U.S.61%

U.S.88%

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QualityofExperienceIstheBasisforDifferentiation

Source:YankeeGroups2011EuropeanConsumerSurvey

Customerexperienceismultifaceted:

CompanyandbrandProductsandservicesChannelDeliveryandoperations

MNOsmustensureconsistent,transparentcustomerinteractionsandcommunications

Sameprinciplesapplyto4Gpositioning

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EffectivePricingIsEssentialforBusinessModelSustainability

Mobilebroadbandpricing

mustbe:

Competitive:toreflecttodayseconomiccircumstances

Transparent:tofosterenduserconfidenceindata

Sustainable:toachieveviablelongtermdatabusinessmodels

SustainablePricingIsKeytoSolving

theDataProfitPuzzle

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OperatorsMustBeTruetoTheirBrands

4Gchangesalot butnoteverything

Brandvaluesmustbeclearandconsistent

MNOs shouldleverage4Gtoreinforcemarketposition,notchangeit

But4GalsogivesMNOs anopportunitytoreassessmarketstrategyandtargetcustomers

Source:YankeeGroupResearchReport,2010

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3GPositioningWasSimpleComparedto4G

Abattlebetweenincumbentsand(insomecases)onenewentrant

Newplayerhadtobedisruptive

Butmostcustomerswerenotreadyfor3Gdataservices

Newentrantsstrategieshadtoevolve

Source:YankeeGroupResearchReport,2005

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MobileOperatorsFaceCriticalLTEDecisions

BusinessCaseNewservicesandrevenues,orSolutionto3Gnetworkoverload

ProductsConvergedlandline/mobileoffers,orAggressivepushforlandlinesubstitution

TimingTechnologyandmarketleader,orPragmaticfollowerstrategy

Whataresomecrediblepositioningoptions?

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No.1forTablets?

Source:YankeeGroups2012U.S.ConsumerSurvey

Target4Gspecificallyattabletowners

Beginbyunderstandingtabletowners profile,behavior andneeds

Theyareyoungerandhavehigherincomesthannonowners

Consumerswhointendtobuytabletsarealreadyusingplentyofdata

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No.1forCordCutters?

Source:Ofcom

CommunicationsMarketreport,August2011Surveybase:Consumersaged15andolder(n=9,013)

4Gmobilebroadbandcandriveanewwaveoflandlinesubstitution

Theopportunityismostobviousamongleastaffluentsocioeconomicgroups

4Gpricingmustbeappropriatetothosecustomers needs

PercentageofHouseholdTakeUp

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No.1forFamilies?

LessonsfromtheU.S.?Shareddataplans foruserswithmultipleconnecteddevicesAppropriateforfamilies orothergroupsthatcanshareallowancesEnablesoperatorstocapturemoredevicesandincrementalusageSomesavingsforcustomers butnotdrasticRequiresalotofplanmath regularvs.sharedvs.prepaid

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No.1forPrepaid?Rememberthis?Prepaidavailabilitycreatedasurgein3Gadoption

Source:YankeeGroupResearchReport,2005

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No.1forRoaming?

Billshockrestrictsdataroaming.Syniverse Technologiesestimatesthatupto70percentofinternationalroamersdonotusemobiledata.

Operatorsareinnovatingatlast.Commonthemeisgreaterpricecertainty,e.g.,flatratedailyorweeklyroamingpasses.

Roamingcanbeadifferentiator.Requirespackagesthattargetsilentroamersandaddresstheneedsofspecificusersegments

Operatorscanadd3Gbasedroamingpackagestocoredomestic4Gservices

Datasource:EstimatebasedonYankeeGroupsGlobalMobileForecast,June2012

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SomeTakeaways

4Gisbornintoinadatacentric,multideviceworldwherecustomerexperienceisking.

4Gstrategiesmustbeconsistentwithoperatorsoverallmarketpositioningandbrandvalues.

Chooseyour4Gcustomertargetscarefully,getcreativewithservicepackagingandgoforit!

Page18 Copyright2012

DeclanLonergan

dlonergan@yankeegroup.com

Readblogsat

blogs.yankeegroup.com

Fanusatfacebook.com/yankeegroup

FollowusonTwitter@YankeeGroup

ThankYou!

Slide Number 1Slide Number 2Mobile Broadband Strategies: Helping Companies Profit from DataAgenda4G Is Born Into a Data-Centric WorldMultiple Connected Devices Is the New NormQuality of Experience Is the Basis for DifferentiationEffective Pricing Is Essential for Business Model SustainabilityOperators Must Be True to Their Brands3G Positioning Was Simple Compared to 4GMobile Operators Face Critical LTE DecisionsNo. 1 for Tablets?No. 1 for Cord-Cutters? No. 1 for Families? No. 1 for Prepaid?No. 1 for Roaming?Some TakeawaysSlide Number 18