Why citieswill drive traffic growth

© Ericsson AB 2012 | June 2012 | Page 2 (12)

 0

 20

 40

 60

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 100

Estimated world population

distribution, 2017**

Estimated mobile traffic, 2017

**Metro: >4,000 people/sq km, Urban: 1,000-4,000 people/sq km, Suburban: 300-1,000 people/sq km, Rural: <300 people/sq km

Cities will drive Traffic growth

› By 2017, urban and metro areas will generate 60 percent of all mobile traffic, although they will be home to only 30 percent of the population.

› Why is this the case?

Population versus mobile traffic distribution (%)

Suburban

Rural

Urban

Metro

Suburban

Rural

Urban

Metro

30%

60%

(Source: Ericsson)

© Ericsson AB 2012 | June 2012 | Page 3 (12)

Ericsson ConsumerLab City Study 2011

› Conducted in 13 major cities− 1,500 interviews/city

− Sample representative of the advanced online population: 100 million citizensof cities, nearly half of the total population of the 13 cities

› The collected data represents the half of the total population that uses the internet most frequently (at least weekly)

Moscow

StockholmTokyo

Seoul

MumbaiCairo

Johannesburg

London

São Paulo

Los AngelesNew York

Beijing

Hong Kong

© Ericsson AB 2012 | June 2012 | Page 4 (12)

High rate of Smartphone ownership

› Only about 10 to 15 percent of the worldwide installed base of subscriptions uses smartphones (*)

City Study 2011 results:› About 40 percent of city

dwellers own an iPhone or an Android phone

› Major differences exist between cities

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total

ave

rage

Cairo

Joha

nnes

burg

Mum

bai

Stock

holm

Beijing

Mos

cow

São P

aulo

Tokyo

Seoul

Lond

on

Los A

ngele

s

New Y

ork

Hong

Kong

An iPhone An Android phone Another type of mobile phone

(Source: Ericsson ConsumerLab City Study 2011 Base: All (online population)

(*) Source: Ericsson Traffic and Market Report (June 2012)

© Ericsson AB 2012 | June 2012 | Page 5 (12)

Heavy usage of mobile services, incl. high-capacity services

Share (%) who use each service at least five times a day (heavy users)

A total of 7 percent watch videos on their mobile phones more than five times a day

Source: Ericsson ConsumerLab City Study 2011 Base: All (online population)

A total of 14 mobile services are used more than five times a day byat least 10 percent of city dwellers

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

Buy tickets, do small transactions or payments

Use mapping, navigation or positioning services

Check timetables and/or traffic information

Watch video clips/movies/TV

Send/receive MMS/photo messages

Connect to Wi-Fi/Hotspots

Play games

Use instant messaging service

Use the camera and/or video function

Update/write on social networks

Use calendar/diary function

Listen to music and/or radio

Check/read social networks

Use of apps to access internet

Send/receive e-mails

Browsing of the internet

Send/receive SMS/text messages

Make/receive calls

© Ericsson AB 2012 | June 2012 | Page 6 (12)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Use daily Use weekly Use monthly Use less often Don’t use

High mobile-broadband connection rate

(*) Source: Ericsson Traffic and Market Report (June 2011)

› At the end of 2011, about 17 percent of the world’s mobile subscriptions were mobile-broadband subscriptions (*)

City Study 2011 results:› In all, 40 percent of city

dwellers have a mobile-broadband subscription

› More than 30 percent of mobile-broadband users use it daily

› In all, 9 out of 10 mobile-broadband users use it for personal reasons; 5 out of 10for work reasons

Source: Ericsson ConsumerLab City Study 2011 Base: All/mobile-broadband users (online population)

© Ericsson AB 2012 | June 2012 | Page 7 (12)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Every day Every week Every month Less often Never Don’t know

frequent Connection to wi-fi networks outside the home

“Outside your home, how often do you connect your laptop/portable computer or tablet computer to a Wi-Fi network (not via mobile phone)?”

› In all, 40 percent of laptop/tablet owners connect weekly to a Wi-Fi network outside the home

› Daily and weekly usage of Wi-Fi networks is nearly twice as high among citizens in city centers as it is among residents of suburbia

Source: Ericsson ConsumerLab City Study 2011 Base: All/mobile-broadband users (online population)

© Ericsson AB 2012 | June 2012 | Page 8 (12)

High usage of internet services, including high-capacity services

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

Buy products

Distance learning

IP-telephony

Check time schedules/traffic information

Internet banking

Watch longer videos

On-line gaming

Listen to music

Watch video clips

Product info/price comparisons

Social networks: Update/write/upload

Browsing the internet (work usage)

Chat/messaging

Read newspaper/magazines

Work e-mail

Social networks: Read/check

Personal e-mail

Browsing the internet (Personal use)

Share (%) who use each service at least daily

Source: Ericsson ConsumerLab City Study 2011 Base: All (online population)

More than 10 internet services, including high-capacity services such as watching videos, are used daily by at least 30 percent of city dwellers

35%

28%

© Ericsson AB 2012 | June 2012 | Page 9 (12)

The mobile phone: access point to the internet

› A total of 50 percentof city dwellersconnect daily to the internet using their mobile phones

Source: Ericsson ConsumerLab City Study 2011 Base: All (online population)

© Ericsson AB 2012 | June 2012 | Page 10 (12)

0 1 2 3 4 5 6

Total average

Moscow

Johannesburg

Sao Paulo

Cairo

Seoul

Los Angeles

Beijing

Hong Kong

New York

London

Tokyo

Stockholm

Mumbai

Heavy use of online social networks

Source: Ericsson ConsumerLab City Study 2011 Base: Use of online social networks (online population)

› City dwellers access online social networks three to five times a day on average

› The prime driver for usage is staying up-to-date with what family and friends are doing (about 45 percent)

› The third-most common activity is connecting and exchanging ideas with others

Usage of online social networks (times/day)

© Ericsson AB 2012 | June 2012 | Page 11 (12)

ict is important in the workplace

› More than 50 percent of city dwellers consider it critical to have internet access at work

› Having a mobile phoneis critical for 36 percent

› Having mobile broadband and/or Wi-Fi accessis critical for close to20 percent

Source: Ericsson ConsumerLab City Study 2011Base: Working population (online population)

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

Tablet computer

Mobile broadband and/or Wi-Fi

Laptop computer/Netbook

Fixed phone

Mobile phone

Desktop computer

High-speed or broadband internet

Internet in general

Share of working population that views the following products/servicesas critical for their ability to do their job