4. Mobile status: Europe vs. USA
Mobile turnover +1% (2010/2009) +5,2% (2010/2009)
-3% (2Q11/2Q10) +6% (2Q11/2Q10)
Data revenues share (end-2010) 26.2% 33.2%
29-32% (BoA) 37% (BoA)
Mobile CAPEX Almost flat +18% (2Q11/2Q10)
LTE launch date/ pop. covered End 2009 (Sweden) End 2010
Limited launch except in VZW: 110 M pop (05/2011)
Germany 66% pop mid-2012
Mobile ARPU (end-2010) $22.5 $50 (-0.2% y-to-y)
Mobile penetration (end-2010) 128% 98.5%
Fragmented markets 4 carriers have 93% of the
subscribers
Smartphone penetration (end-2010) Vodafone: 19% Verizon: 32%
► The USA are clearly leading LTE deployments with massive coverage and heavy investments
Source: IDATE & BoA
5. 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
6. Mobile traffic increase
Mobile traffic usage is getting close to DSL Mobile data consumption trends
7-15
GB Average traffic consumption per user observed
2010 traffic figures
in 2010
(per broadband subscription - not at scale)
Teliasonera Sweden: 14 - 15 GB
7 GB
Yota Russia: 13 GB*
1-2 Clearwire : 7 GB
GB
SK Telecom : 7 GB
200 CSL HK : 6 GB
MB
1 MB
Monthly cap Monthly usage
1 mn of MP3 Firtst monthly
for many 3G
Monthly usage
on DSL *One customer used 2 Terabytes of data in a single month (2010)
cap for AT&T on Clearwire’s
subscriptions network networks Source: IDATE from operators
6.6 MB per day 33 to 66 MB per day 233 MB per day 233 to 500 MB per day
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
7. Mobile traffic forecasts 2010-2020
Total mobile traffic
► 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
100.00
Yearly traffic in EB
Europe
80.00 Americas
Asia
60.00 Rest of the world
World Network capacity units:
40.00
20.00
-
2010 2015 2020
Source: IDATE for UMTS Forum
Note: mobile traffic on licensed spectrum only (Wi-Fi excluded)
9. Mobile Internet usage: already here, and geared for growth
2010: 21.2% mobile Internet penetration, 2015: 37.0% mobile Internet penetration,
or 1.1 billion subscriptions worldwide or 2.67 billion subscriptions worldwide
► Leading region: Asia Pacific
► North America to overtake Asia Pacific by
● 27.0% penetration rate, or 691M users 2015
● largely thanks to Japan, who has close to ● North America will climb to 43.6% penetration
80% mobile Internet penetration
● Asia Pacific to grow to 39.1% penetration
► North America: 26.0% penetration rate
► EU27 will remain behind these two regions,
► EU27: 17.9% penetration rate but will enjoy healthy growth to 35.1%
Mobile Internet penetration, 2008-2010 Mobile Internet penetration, 2011-2015 forecasts
90% 90%
80% 80%
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
2008 2009 2010
2011 2012 2013 2014 2015
France Germany Italy Spain UK World Europe France Germany Italy
USA Japan South Korea Europe World Spain UK USA Japan South Korea
Source: IDATE Source: IDATE
10. Mobile connectivity devices: not just about smartphones
Connectivity devices provide the better value … and overall shipments will maintain a
compared to smartphones… steady growth
► ARPU for connectivity devices can be more ► By around 2013, embedded connectivity
than double that of smartphones devices will out-ship external ones
● Particularly strong with business use ● Decreasing module prices, user friendliness
Shipment and breakdown of mobile connectivity devices, 2011-2015
● Also means they consume more traffic (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
11. Smartphone shipment penetration forecast
Advanced countries: US, EU5 and Japan Emerging countries: BRIC
► USA: Currently leads, and will continue to lead ► Brazil: Roughly in line with worldwide
smartphones shipment penetration penetration
► EU5: Whilst behind the US, will show steady ► China: Whilst they have a massive population,
growth higher than worldwide penetration smartphone penetration expected to remain
► Japan: Starts as laggard, but expected to relatively low for now
become one of the leaders in next few years ► Russia: Expected to show steady growth, a little
● Smartphone shipment penetration was lower than behind China
that of the world up to 2010, but by end 2011, ► India: Expected to show the least and slowest
expected to be one of the leaders growth of penetration
% of smartphone shipments, 2010 - 2015 % of smartphone shipments, 2010 - 2015
70% 60%
60%
50%
50%
40%
40%
30%
30%
20% 20%
10% 10%
0% 0%
2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015
World EU5 USA Japan World Brazil Russia India China
Source: IDATE Source: IDATE
12. Review of LTE devices availability
Dongles & mobile hot-spots Mobile handsets: early developments
Samsung’s first LTE dongle Novatel MiFi 4510L mobile hotspot Early LTE handsets:
Samsung Craft and
Galaxy Indulge
AT&T’s first smartphones
HTC Thunderbolt, Verizon, first
LTE Smartphone
AT&T’s 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 Samsung’s 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
14. 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 mid-
2011 (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
LTE subscribers figures Sept. 2011
3GPP WCDMA
Operators
Verizon Wireless: around 3
million
TD- SCDMA DoCoMo: 390,000 Xi (LTE)
subscriptions, with a full-year
target of 1.3 million
3GPP2
CDMA
operators
Source: IDATE
15. Enablers of mobile traffic and tariffing trends
►Towards more differentiation (device type, speed…), more QoS management
Source: IDATE
16. TeliaSonera (Sweden) - 2009
LTE tariffing
Name and scope of rate plan Speed/ USB-modem Data Monthly tariff/
► EUR 62 per month including the usage of 30 GB data per month ‘Surfzone’ (for contract volume rate with
► Additional data volume costs € 8.7 per 2GB and € 12.9 for 5GB hotspot of 18 months) discount 1
speed
MetroPCS (USA) - 2010 Mellan 4G (‘Intermediate 4G’) 5-10 Included 10 GB SEK 299
Mbit/s SEK 249
► The $55 plan includes unlimited voice, texting and LTE data access <22 Mbit/s
► LTE-capable Samsung Craft for $299
Stor 4G (‘Grand 4G’) – Promotion 10-20 Included 20 GB SEK 349 for
A1 Telekom (Austria) - 2010 price Mbit/s 18 months2/
<22 Mbit/s SEK 299 for
► Plans LTE commercial service in Vienna in the 2.6 GHz band 18 months3
► 30 GB of data a month at speeds of up to 150 Mbps for €90 per month Total 4G – Promotion price 10-80 Included 30 GB SEK 349 for
Mbit/s six months4
Vodafone (Germany) - 2011 <22 Mbit/s SEK 249 for
6 months5
► 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 Monthly fee Monthly data Overage fee
Allowance
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 USD 20 2 GB USD 20 per 1 GB
(for smartphones and feature phones)
Mobile broadband plans (tablets, netbooks) USD 20 1 GB USD 20 per 1 GB
USD 35 3 GB USD 10 per 1 GB
USD 50 5 GB USD 10 per 1 GB
USD 80 10 GB USD 10 per 1 GB
Source: IDATE
17. The LTE wholesale model
Sharing
agreement?
Will sell LTE
capacity
Provides cells Sells LTE
sites and capacity?
helps building Sells Mobile
theterrstrial
LTE network
WiMAX
capacity Many actors using new
Will sell LTE spectrum (satellite L-
capacity to
MVNOs and
distributors Sells LTE
Band, S-band, 2.3
capacity
GHz…)
Consolidation likely in
the USA
Plans to build a wholesale LTE
network in the S-band (USA)
Builds a wholesale LTE network in
Difficulties in Russia
the 1800 MHz band (Poland)
Sharing and wholesale
model can be
combined
Builds a wholesale LTE network in
the 2.3 GHz band for rural areas
Build a common GSM and LTE
network (Sweden)
Source: IDATE
18. LTE subscribers forecasts
400,000
► By the end of 2015, we 350,000
forecast that overall there will
be more than 379 million LTE 300,000
subscribers (worldwide). 250,000
► We forecast 13.8 million LTE 200,000
subscribers at the end of 2011
150,000
with the USA representing the
bulk of this figure with 100,000
11.6 million subscribers.
50,000
► At the end of 2015, Asia- -
Pacific should represent 2011 2012 2013 2014 2015
35.2% of the total, North Asia-Pacific 1,066 8,383 29,260 70,402 133,310
America 31.4% and Western Western Europe 1,103 4,292 14,946 44,607 85,246
Europe 22.5%. 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
Source: IDATE (June 2011)
20. LTE spectrum
Fragmentation is here Countries Existing frequency bands New frequency bands
Main LTE frequency bands Europe 900 MHz
1800 MHz
800 MHz (790-862 MHz – Digital Dividend)
2.6 GHz
► Regional harmonisation likely to be the first step 2.1 GHz
USA 850 MHz 700 MHz (698-806 MHz)
Americas: DD (700 MHz), AWS, 2.6 GHz 1.7/2.1 GHz (AWS)
1900 MHz (PCS)
1.4-1.6 GHz (LightSquared)
S-band (Dish)?
Europe: DD (800 MHz), 1800 MHz, 2.6 GHz South America
2.6 GHz
1.7/2.1 GHz (AWS) 700 MHz (698-806 MHz)
1800 MHz 2.6 GHz
Asia Pac: 2.3 GHz, 2.6 GHz 1900 MHz (PCS)
China 2.3 GHz
► In the USA, LightSquared will use specific bands (1.4-1.6 2.6 GHz
Japan 850 MHz 700 MHz (698-806 MHz planned)
GHz…) 1.7/1.9 GHz
2.1 GHz
1.5 GHz
► Roaming is not a priority today 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
Spectrum price
Premium spectrum (€ cents per MHz per pop)
600
518.2
500
► EUR 70 cents per MHz per pop in Germany for
400
the DD: very close to the level reached in the
USA. In Sweden it sold for EUR 31 cents, in
300 Spain for EUR 54 cents and in Italy for 85 cents.
200 ► 2.6 GHz spectrum much cheaper: in the EUR
0.1-10 cents range
100 84.2
70.3 71.4
29.9 20.3
49.6 50.6
10.7
54.5
31.1 ► France 2.6 GHz: € 11 cents
5.1
0
Australia 850 Canada France France Free France 2.1 France 2.1 Germany Germany Germany Spain 800 Sweden 800 USA 700 ► Italy 2.6 GHz: € 6 cents
MHz 2004 AWS 2008 UMTS core 2009 GHz Orange GHz SFR 800 MHz T- UMTS core 2.1 GHz MHz 2011 MHz 2011 MHz 2008
band 2001 2010 2010 Mobile 2010 band 2010
Source: IDATE
21. LTE strategies
Reduce costs Reduce costs Reduce costs
Need for Need for Need for
Competition additional Competition additional Competition additional
capacity capacity capacity
Provide Provide Provide
higher data
Increase
ARPU rates
Increase
ARPU
higher data
rates
Increase
ARPU
higher data
rates IDATE has identified five
Reduce costs Reduce costs Reduce costs key drivers as reasons for
MNOs to migrate to LTE:
Competition
Need for
additional
capacity
Competition
Need for
additional
capacity
Competition
Need for
additional
capacity
►Reduce costs
►Need for additional
capacity
►Increase ARPU
Increase
Provide
higher data
rates
Increase
Provide
higher data
rates
Increase
Provide
higher data
rates
►Provide higher data
ARPU ARPU ARPU
rates
Reduce costs Reduce costs Reduce costs
►Competitive pressure
Need for
Need for Need for
additional
additional additional
capacity
capacity capacity
Competition Competition Competition
Provide
Provide Provide
Increase higher data Increase Increase
higher data higher data
ARPU rates ARPU ARPU
rates rates
21
Source: IDATE
22. Questions
Is the feature phone dead?
What could be the features and functionalities of future smartphones?
What price range for smartphones in 2012?
How many operating systems will survive?
What will be the economic burden of the associated application stores?
Is there a real risk of operator disintermediation via Soft SIM card strategies?
