NextGen Networks 2 - LTE Whats changing mobile IP?

16 November 2011 - Frdric PUJOL f.pujol@idate.org

Content
Introduction Mobile connectivity & smartphones LTE devices

LTE networks status & tariffing

LTE spectrum: valuation and fragmentation risks Conclusions

Introduction

Mobile status: Europe vs. USA

Mobile turnover Data revenues share (end-2010)

+1% (2010/2009) -3% (2Q11/2Q10) 26.2% 29-32% (BoA)

+5,2% (2010/2009) +6% (2Q11/2Q10) 33.2% 37% (BoA)

Mobile CAPEX
LTE launch date/ pop. covered

Almost flat
End 2009 (Sweden) Limited launch except in Germany

+18% (2Q11/2Q10)
End 2010 VZW: 110 M pop (05/2011) 66% pop mid-2012 $50 (-0.2% y-to-y) 98.5%

Mobile ARPU (end-2010) Mobile penetration (end-2010)

$22.5 128%

Fragmented markets
Smartphone penetration (end-2010) Vodafone: 19%

4 carriers have 93% of the subscribers

Verizon: 32%

The USA are clearly leading LTE deployments with massive coverage and heavy investments
Source: IDATE & BoA

Mobile status: GDP and mobile revenues

Economic slowdown effect on wireless revenues

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

Source: BoA

Mobile traffic increase

Mobile traffic usage is getting close to DSL
7-15 GB

2010 traffic figures (per broadband subscription - not at scale)

7 GB

Mobile data consumption trends Average traffic consumption per user observed in 2010
Teliasonera Sweden: 14 - 15 GB Yota Russia: 13 GB*

1-2 GB

Clearwire : 7 GB SK Telecom : 7 GB CSL HK : 6 GB

200 MB

1 MB

1 mn of MP3

Firtst monthly cap for AT&T

6.6 MB per day

Monthly cap for many 3G subscriptions

33 to 66 MB per day

Monthly usage on Clearwires network

233 MB per day

Monthly usage on DSL networks

233 to 500 MB per day

*One customer used 2 Terabytes of data in a single month (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, social Networking, video streaming

Facebook increased its mobile traffic consumption by 200% during the 1H2010 while Twitter grew 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

Total mobile traffic

Mobile traffic forecasts 2010-2020

Total worldwide mobile traffic will reach more than 127 EB in 2020, representing an 33 fold increase compared with 2010 figure. We anticipate that the total voice and data traffic will reach 45 EBytes in 2015 compared to less than 2 EBytes in 2009. The bulk of the traffic will be video traffic.
Total mobile traffic (EB per year)
140.00 120.00

Yearly traffic in EB

100.00 Europe 80.00 60.00 40.00 20.00 2010 2015 2020 Americas Asia Rest of the world World
Network capacity units:

Source: IDATE for UMTS Forum

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

Mobile connectivity & smartphones

Mobile Internet usage: already here, and geared for growth

2010: 21.2% mobile Internet penetration, or 1.1 billion subscriptions worldwide Leading region: Asia Pacific
27.0% penetration rate, or 691M users

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

North America to overtake Asia Pacific by

2015
North America will climb to 43.6% penetration Asia Pacific to grow to 39.1% penetration

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
90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
2008 2009 201 0

EU27 will remain behind these two regions,

but will enjoy healthy growth to 35.1%

Mobile Internet penetration, 2011-2015 forecasts
90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
201 1 201 2 201 3 201 4 201 5

France USA

Germany Japan

Italy South Korea

Spain Europe

UK World

World Spain

Europe UK

France USA

Germany Japan

Italy South Korea

Source: IDATE

Source: IDATE

Mobile connectivity devices: not just about smartphones

Connectivity devices provide the better value compared to smartphones
ARPU for connectivity devices can be more

than double that of smartphones

Particularly strong with business use Also means they consume more traffic

and overall shipments will maintain a steady growth By around 2013, embedded connectivity devices will out-ship external ones
Decreasing module prices, user friendliness
Shipment and breakdown of mobile connectivity devices, 2011-2015 (thousands)

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
35 30 25 20 15 10 5 0
Smartpho ne iP ad Do ngles Netbo o ks/lapto ps

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

Source: IDATE

Source: IDATE

Smartphone shipment penetration forecast

Advanced countries: US, EU5 and Japan
USA: Currently leads, and will continue to lead

Emerging countries: BRIC

Brazil: Roughly in line with worldwide

smartphones shipment penetration

EU5: Whilst behind the US, will show steady

penetration
China: Whilst they have a massive population,

growth higher than worldwide penetration

Japan: Starts as laggard, but expected to

smartphone penetration expected to remain relatively low for now

Russia: Expected to show steady growth, a little

become 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

behind China
India: Expected to show the least and slowest

growth of penetration
% of smartphone shipments, 2010 - 2015

70% 60% 50% 40% 30% 20% 10% 0%

201 0 201 1 201 2 201 3 201 4 201 5

60% 50% 40% 30% 20% 10% 0%

201 0 201 1 201 2 201 3 201 4 201 5

World
Source: IDATE

EU5

USA

Japan
Source: IDATE

World

Brazil

Russia

India

China

Smartphone shipment forecast

The heavyweights: China, US, EU5 2011: US leads number of smartphones shipped, followed by the EU5 and then China 2013: Whilst US continues to lead, China catches up with EU5 2015: China to overtake the US to become the nation to ship the most smartphones China, due to its massive population, will ship the most smartphones despite their lower penetration rates
Total number of smartphone shipments, 2011 - 2015

Remaining BRIC countries and Japan

Compared to China, the other BRIC

countries have much smaller total shipments Japan, despite its high smartphone penetration rate, remains low in terms of total shipment numbers due to the country itself being much smaller. They are, however, ahead than any of the EU5 nations on an individual basis.
Total number of smartphone shipments, 2011 - 2015

120 000 100 000 80 000 60 000 40 000 20 000 0

201 1 201 2 201 3 201 4 201 5

120 000 100 000 80 000 60 000 40 000 20 000 0

201 1 201 2 201 3 201 4 201 5

China
Source: IDATE

USA

EU5
Source: IDATE

Japan

Brazil

Russia

India

LTE devices

LTE devices: positioning and strategies of main players

LTE devices roadmap Already close to 200 LTE devices available

LTE: a game-changer in the mobile industry?

For chipset manufacturers, it will be seen that, in order to be able to succeed, the increased capabilities of mobile devices increasingly 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 the device 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 or Samsung 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
Source: IDATE

Review of LTE devices availability

Dongles & mobile hot-spots Mobile handsets: early developments

Samsungs first LTE dongle

Novatel MiFi 4510L mobile hotspot

Early LTE handsets: Samsung Craft and Galaxy Indulge AT&Ts first smartphones HTC Thunderbolt, Verizon, first LTE Smartphone

AT&Ts first mobile hotspot and dongle

Dongles and personal hot-spot devices prove to be popular

Voice supported on 3G networks

Tablets

Other connected devices

ZyXEL LTE fixed router Sierra Wireless M2M LTE gateway Motorola Xoom tablet Samsungs GalaxyTab 10.1

Tablets are an important part of the device offer

Routers for rural areas (Germany, Verizon)

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

Review of LTE devices availability

USB dongles and mobile hotspots
Novatel MiFi 4510L mobile hotspot

Manufacturer Epicom Huawei Novatel Samsung

Device name Unknown Huawei Mobile WiFi E589 Novatel MiFi 4510L Samsung SCH-LC11

Chipset used Qualcomm Qualcomm MDM 9200 Qualcomm MDM 9600

Modes Unknown LTE/HSPA/GSM LTE/CDMA EVDO/1x RTT LTE/CDMA EVDO/1x RTT

Bands Unknown 2600, 2100, 1800, 900 MHz 700 MHz for LTE 700 MHz for LTE

Launch date Q3 2011 Q3 2011 Q1 2011 March 2011

Thanks to more mature chipsets being available commercially and more LTE networks being launched worldwide, the device 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

Review of LTE devices availability

Mobile handsets: early developments
The early launch of the first LTE handset (Samsung Craft) on the US market (in 2010) has come sooner than expected HTC was the first mobile device manufacturer to launch an LTE-powered smartphone, the Thunderbolt, for the Verizon network The table below is a summary of announced LTE handsets. Most of them are for the Verizon Wireless Band 13 (700 MHz) LTE network, and are powered by a Qualcomm chipset.
Manufacturer HTC Device name Thunderbolt Specifications 1 GHz Snapdragon processor / MDM 9600 / Android 2.2 / 4.3" capacitive screen / 8 GB / 8 MP camera + rear-facing camera / DLNA support HTC Thunderbolt, Verizon, first LTE Smartphone Early LTE handsets: Samsung Craft and Galaxy Indulge

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

Craft Galaxy Indulge Samsung Stealth 4G

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

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

Source: IDATE

Review of LTE devices availability

Tablets: LTE as differentiating advantage?
The tablet segment is bristling to establish itself on the mobile device market quickly, especially as mobile device manufacturers do not want to let Apple grab the whole of the pie Motorola was the first to announce an LTE-based version of its Xoom tablet in January 2011 Below is a summary of announced and expected LTE tablets on the market:
Manufacturer Motorola Device name Xoom Specifications 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 1 GHz Dual core Coretex A9 processor / QNX / 7" capacitive screen / 16 - 32 - 64 GB / 5 MP camera + 3MP rear-facing camera / HDMI / 400g 1.2 GHz Coretex A8 Hummingbird processor / Android 2.2 / 7" capacitive screen / 2 GB / 5 MP camera + 1.3 MP rearfacing camera / DLNA / 400g Launch date Q3 2011 Comments First launched with 3G only, it will 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. Motorola Xoom tablet

RIM

Playbook

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 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 appropriate OS for tablets.

Samsung

Galaxy Tab 4G

end of Q2 2011 (*)

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

Source: IDATE

Review of LTE devices availability

Machine to Machine communication modules
As far as M2M communication modules and gateways are concerned, some companies have already announced product availability. This is notably the case of Cinterio and, more recently, Sierra Wireless but the case for such use has not yet been proved.

M2M usages are today rather narrowband usages and sensitivity to prices is very high, meaning that M2M LTE devices are not yet particularly relevant.
However, remote video surveillance is seen already as a worthy usage for LTE M2M. Besides, as very few 3G M2M modules are today available, companies may well chose to switch directly from GPRS / Edge module to 4G modules, so as to maximise the communication module life cycle. Below is a summary of available LTE M2M products:
Company Sierra Wireless Cinterion Name of the product Airlink GX440 NA Kind of product M2M gateway NA Specifications Band 13 (700 Mhz), 3G gateway upgradable to 4G to ease transition Reportedly working on it Sierra Wireless M2M LTE gateway

Source: IDATE

Review of LTE devices availability

Other LTE devices
Fixed routers and / or gateways: as for Fixed (Ultra) Broadband Wireless Access, some companies have been devising LTE home gateways to serve grey areas in areas of low population density. This market could be driven by countries such as Germany where MNOs are obliged by their license to deploy broadband in such areas.
ZyXEL LTE fixed router

Kindle store on iPad and Samsung Galaxy Tab

eReaders are, broadly speaking, very specialised tablets with adapted hardware and electronic ink display enabling long-lasting batteries and increased comfort for reading. We do not see, however, the business case for LTE support in these devices, with their very competitive prices. We believe more eReader manufacturers will either 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 one such are now transforming their smartphones into gaming devices rather than adding connectivity to existing gaming devices

Sony Ericsson Xperia Play

Source: IDATE

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
Country USA Austria Poland Canada Hong-Kong Japan Finland Estonia South Korea Latvia Singapore USA Uzbekistan Saudi Arabia Sweden Germany Date 09/2011 11/2010 09/2010 09/2011 11/2010 12/2010 12/2010 12/2010 07/2011 05/2011 06/2011 09/2010 08/2010 09/2011 11/2010 07/2011 Frequency band 700 MHz 2.6 GHz 1800 MHz 1.7/2.1 GHz (AWS) 1800 MHz & 2.6 GHz 2.1 GHz 2.6 GHz 2.6 GHz 2.1 GHz 1800 MHz 1.8 GHz and 2.6 GHz 1.7/2.1 GHz (AWS) 2.6 GHz 2.6 GHz 2.6 GHz 800 MHz Operator Omnitel Rogers Wireless SK Telecom Smart Communications STC T-Mobile TeliaSonera TeliaSonera TeliaSonera TeliaSonera Country Lithuania Canada South Korea Philippines Saudi Arabia Germany Denmark Finland Norway Sweden Date 04/2011 07/2011 07/2011 04/2011 09/2011 04/2011 12/2010 05/2010 12/2009 12/2009 Frequency band 2.6 GHz 1.7/2.1 GHz (AWS) 2.1 GHz 2.6 GHz 2.6 GHz 800 MHz 2.6 GHz 2.6 GHz 2.6 GHz 2.6 GHz

Operator AT&T A1 (Telekom Austria) Aero2 Bell Mobility CSL DoCoMo Elisa EMT LG U+ LMT M1 MetroPCS MTS Mobily Net4Mobility Telenor & Tele2 O2

UCell
Verizon Wireless Vodafone Zain

Uzbekistan
USA Germany Saudi Arabia

08/2010
11/2010 12/2010 09/2011

2.6 GHz
700 MHz 800 MHz 2.6 GHz

Source: IDATE October 2011

LTE deployment roadmap

Geographical mapping of early LTE commercial deployment

In September 2011, 30 operators had launched LTE service and at least 16 more are expected during the second half of the year
Europe

Major deployment for Verizon Wireless: 110 M pop covered at end-2010 and 160 M at mid2011 (nationwide by 2013)
Canada and USA

Limited coverage for European operators except Germany

Asia

Major operators LTE commercial deployment schedule

2009

2010

2011

2012

2013

3GPP WCDMA Operators

LTE subscribers figures Sept. 2011 Verizon Wireless: around 3 million DoCoMo: 390,000 Xi (LTE) subscriptions, with a full-year target of 1.3 million

TD- SCDMA

3GPP2 CDMA operators

Source: IDATE

Enablers of mobile traffic and tariffing trends

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

Source: IDATE

TeliaSonera (Sweden) - 2009

LTE tariffing
Name and scope of rate plan Speed/ Surfzone hotspot speed USB-modem (for contract of 18 months) Data volume Monthly tariff/ rate with discount 1

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

Mellan 4G (Intermediate 4G)

5-10 Mbit/s <22 Mbit/s

10-20 Mbit/s <22 Mbit/s

Included

10 GB

SEK 299 SEK 249

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

Stor 4G (Grand 4G) Promotion price

Included

20 GB

SEK 349 for 18 months2/ SEK 299 for 18 months3

Total 4G Promotion price

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
Plan 4G mobile broadband plans (for 4G USB modems) Monthly fee USD 50 USD 80 Mobile broadband connect and 3G mobile hotspots (for smartphones and feature phones) Mobile broadband plans (tablets, netbooks) USD 20 USD 20 USD 35 USD 50 USD 80 Monthly data Allowance 5 GB 10 GB 2 GB 1 GB 3 GB 5 GB 10 GB Overage fee USD 10 per 1 GB USD 10 per 1 GB USD 20 per 1 GB USD 20 per 1 GB USD 10 per 1 GB USD 10 per 1 GB USD 10 per 1 GB

10-80 Mbit/s <22 Mbit/s

Included

30 GB

SEK 349 for six months4 SEK 249 for 6 months5

Source: IDATE

The LTE wholesale model

Sharing agreement? Will sell LTE capacity

Provides cells sites and helps building theterrstrial LTE network Will sell LTE capacity to MVNOs and distributors

Sells LTE capacity? Sells Mobile WiMAX capacity

Sells LTE capacity

Many actors using new spectrum (satellite LBand, S-band, 2.3 GHz) Consolidation likely in the USA Difficulties in Russia Sharing and wholesale model can be combined

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

Builds a wholesale LTE network in the 1800 MHz band (Poland)

Build a common GSM and LTE network (Sweden)

Builds a wholesale LTE network in the 2.3 GHz band for rural areas

Source: IDATE

LTE subscribers forecasts

By the end of 2015, we forecast that overall there will be more than 379 million LTE subscribers (worldwide). We forecast 13.8 million LTE subscribers at the end of 2011 with the USA representing the bulk of this figure with 11.6 million subscribers. At the end of 2015, AsiaPacific should represent 35.2% of the total, North America 31.4% and Western Europe 22.5%.

400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 2011 Asia-Pacific Western Europe Central & Eastern Europe 1,066 1,103 68 11,635 2012 8,383 4,292 1,547 32,588 247 223 13 872 47,280 2013 29,260 14,946 3,600 58,323 1,027 1,469 108,624 2014 70,402 44,607 11,592 85,535 3,402 5,298 220,836 2015 133,310 85,246 21,879 118,955 11,128 8,493 379,012

North America
Latin America Africa-Middle East Total

Source: IDATE (June 2011)

LTE spectrum: valuation & fragmentation risks

LTE spectrum
Fragmentation is here
Regional harmonisation likely to be the first step
Countries Existing frequency bands 900 MHz 1800 MHz 2.1 GHz 850 MHz 1.7/2.1 GHz (AWS) 1900 MHz (PCS) 2.6 GHz 1.7/2.1 GHz (AWS) 1800 MHz 1900 MHz (PCS) New frequency bands 800 MHz (790-862 MHz Digital Dividend) 2.6 GHz 700 MHz (698-806 MHz) 1.4-1.6 GHz (LightSquared) S-band (Dish)? 700 MHz (698-806 MHz) 2.6 GHz 2.3 GHz 2.6 GHz 850 MHz 1.7/1.9 GHz 2.1 GHz 1800 MHz 2100 MHz 1800 MHz 700 MHz (698-806 MHz planned) 1.5 GHz 800 MHz 700 MHz (698-806 MHz planned) 2.3 GHz 2.6 GHz

Main LTE frequency bands

Europe

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

USA

South America

China Japan

South Korea Rest of Asia-Pacific

Spectrum price
Premium spectrum ( cents per MHz per pop)
600 518.2 500

400

300

EUR 70 cents per MHz per pop in Germany for the DD: very close to the level reached in the USA. In Sweden it sold for EUR 31 cents, in Spain for EUR 54 cents and in Italy for 85 cents. 2.6 GHz spectrum much cheaper: in the EUR 0.1-10 cents range
84.2 5.1 29.9 49.6 20.3 50.6 70.3 10.7 Germany 2.1 GHz 2010 54.5 71.4 31.1

200

100

France 2.6 GHz: 11 cents Italy 2.6 GHz: 6 cents

0 Australia 850 Canada MHz 2004 AWS 2008 France France Free France 2.1 France 2.1 Germany Germany UMTS core 2009 GHz Orange GHz SFR 800 MHz T- UMTS core band 2001 2010 2010 Mobile 2010 band Spain 800 Sweden 800 USA 700 MHz 2011 MHz 2011 MHz 2008

Source: IDATE

TD-LTE: a complement to LTE FDD

TD-LTE: already in commercial service
Migration paths to TD-LTE

The growing interest for TD-LTE can be explained by the following factors Unlike 3G, the TDD and FDD versions of LTE as defined by the standardisation body 3GPP are 90% similar. Availability of (unused) TDD spectrum Ecosystem: there is strong support from leading mobile operators + some WiMAX actors (Yota & Clearwire?) TDD mode in China and in India There is strong potential for TD-LTE in China as it is seen as the natural evolution of the home-grown 3G TD-SCDMA standard; China Mobile, the first mobile operator in the World by the number of subscribers, is currently rolling out its 3G network using the TD-SCDMA technology. The operator claims that 60% of its CAPEX will be reusable for its planned TD-LTE network. A strong ecosystem is appearing as there is also support from BWA actors in India and, in addition, some Mobile WiMAX actors could shift to TD-LTE in the coming years First TD-LTE launch in September 2011

Tests

Initial deployments

Mass market

2010

2011

2012

2013

2014 TD-LTE adoption

TD-LTE selected as natural evolution from TD-SCDMA. Early tests

Will implement a TD-LTE network in 2012/2013

Announced in May 2010 choice of TD-LTE

First commercial TD-LTE launch

TD-SCDMA

Super-PHS
2.6 GHz TDD spectrum

2.3 GHz spectrum

Mobile-WiMAX

Mobile-WiMAX

Went bankruptcy in 2009. Might choose TD-LTE

Source: IDATE
2.6 GHz TDD spectrum 2.6 GHz TDD spectrum

Likely frequency bands for TD-LTE

Operators P1 (Malaysia) China Mobile India Europe Europe Yota (Russia) Clearwire (USA) Willcom (Japan) 3G Technology Mobile WiMAX TD-SCDMA WCDMA and CDMA 2000 WCDMA and TD-CDMA (unused) none Mobile WiMAX Mobile WiMAX Mobile WiMAX Frequency band 2.3 GHz 2.3 GHz 2.3 GHz 2 GHz 2.6 GHz 2.6 GHz 2.6 GHz 2.6 GHz Date 2012 2011-2013 2011-2012 >2013? 2011-2013 2011 2012-2013 2012?

LTE strategies
Reduce costs Reduce costs Reduce costs Competition Need for additional capacity Competition Need for additional capacity Competition Need for additional capacity

Increase ARPU

Provide higher data rates

Increase ARPU

Provide higher data rates

Increase ARPU

Provide higher data rates

Reduce costs

Reduce costs

Reduce costs

Competition

Need for additional capacity

Competition

Need for additional capacity

Competition

Need for additional capacity

Increase ARPU

Provide higher data rates

Increase ARPU

Provide higher data rates

Increase ARPU

Provide higher data rates

Reduce costs Need for additional capacity Competition Competition

Reduce costs

Reduce costs

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

Need for additional capacity Competition

Need for additional capacity

Increase ARPU

Provide higher data rates

Increase ARPU

Provide higher data rates

Increase ARPU

Provide higher data rates

Source: IDATE

32

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 and continuous 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, analyst briefs, presentations

THANK YOU!

36