LTE Application in Real World

For internal use

©2013 Nokia Solutions and Networks. All rights reserved.

LTE industry snapshot Nils Kleemann, Head MBB Solutions, APAC

12/9/2013 Document ID / v. 0.1 / Life cycle status / Dept. / Author

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For internal use

©2013 Nokia Solutions and Networks. All rights reserved. 2

For internal use


• MBB Industry update

• Why LTE

• Go-to-Market examples with LTE

• Relevance for Indonesia

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For internal use


Market


How relevant is

this for Mobile?

• More and more happens

on mobile devices

• Mobile Video increasing

• Massive traffic growth

• Massive Data to be handled properly

• Price per Gbyte needs to go down

• Competition growing

And Future Growth is Staggering

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Today’s devices’ performance and price

are able to address this market

55% of phones sold in Q3 2013 were Smartphones

80% growth in data traffic in Q3 2013 (y-o-y)

driven mainly by video

• End 2019 video expected to be > 50% of mobile

data traffic

• LTE a strong enabler to support this trend

technically and price wise

The availability of LTE-enabled devices at a

range of prices has been a contributor to the

uptake in LTE

Lumia 625

Price: $234.99

(www.amazon.com)

Source: GSA (www.gsacom.com)

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=jjXHM5DD9LQscM&tbnid=tMaVsZ7-NdSLXM:&ved=0CAUQjRw&url=http://blogs.which.co.uk/technology/smartphones/the-best-budget-smartphones/&ei=DobIUYCNMdKa1AWSp4HgCA&bvm=bv.48293060,d.ZG4&psig=AFQjCNHPY5DxY9Arb16jcGWx5ZQQJbU7Rw&ust=1372179506028989

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Commercialization of LTE


222 (Oct 17, 2013)

0

50

100

150

200

250

300

2009 2010 2011 2012 2013

Commercial LTE networks (cum.)

2 16

46

146

260

126.1 mio LTE subscriptions

Thereof: - N-America: 51.4% - APAC: 43.4% - Europe: 3.7%

Q2 2013

2.6 bn LTE subs Covering 65% of world population

2019 - prediction -

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1240 devices supporting LTE

More than a third of LTE devices are Smartphones

99% of LTE handsets are 3G/multimode (as “fallback”)

Devices for LTE

Devices are so important

because they’re what the

consumer develops an

emotional connection

with, like the iPhone for

example

“

“

Nov’13


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2013

… but LTE always needs to fit in operator’s MBB strategy.

Customer insight End customer

Seller 1

Seller 2

Seller 3 Customer insight

Services

Service information Service sellers

Operator

Customer relationship Network capabilities Business model

• Performance (speed, latency)

• Quality (coverage, capacity)

• Extreme Efficiency (scale, synergies, automation)

• Service Mix / brand (fixed/mobile, voice/data)

• Pricing / contract

(flat/cap, bundling, devices)

• Customer insight /

experience mgmt

• Content / OTT player (corporate, compete)

• New business models (service enrichments, device

specific adaptations)

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2013

The network domain for MBB Key ingredients

Smart

Content

Delivery

Winning with

Customer

Experience

Capacity

Growth

Simplify

Operations

Making money with mobile broadband

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• Why LTE



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© Nokia Siemens Networks 2012

Global drivers for LTE

GSM HSPA LTE GSM HSPA LTE

10ms

100 Mbit 150

<1 Mbit

50 >42 Mbit

Better experience

Throughput Latency

Technology Convergence

LTEAdvanced

TD-LTE

GSM

LTE FDD

> 90% harmonized in 3GPP

WCDMA

CDMA

WiMAX

TD-SCDMA

LTE

Data optimized mobile System

WCDMA

/HSPA

GSM/GPRS

/EDGE

Voice only (initially)

Voice/Data

Data only

New / refarming bands

New:

• 2600MHz

• 800MHz

• 700MHz

Only technology supporting both: FDD and TDD

Refarming:

• 1800MHz

• 2100MHz

• 850MHz

• 2300/2600 (TDD)

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2013

Spectrum being most valuable asset

Modulation Antenna

Technologies Spectrum

6-sector sites, SW features, additional sites, small cells Others:

16 64 QAM 2x2 MIMO. 4x4 MIMO carrier aggregation

Example HSPA+

Capacity

LTE 2.6GHz

LTE 700/800MHz (Digital Dividend)

Bandwidth

Coverage

850/900 MHz

1900/2100 MHz

1800 MHz/AWS…

Refarming

New bands

with excellent

coverage

LTE 2.6GHz

LTE 700/800MHz (Digital Dividend)

Bandwidth

Coverage

850/900 MHz

1900/2100 MHz

1800 MHz/AWS…

Refarming

New bands

with excellent

coverage

“Coverage bands”: Up to 4x larger coverage per site

Coverage

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2013

Examples of operator technology options

1Gbps@day

Key drivers for Single RAN

HSPA/LTE-A

100 MHz

Carrier Aggregation

Carrier1 Carrier2 Carrier3 … Carrier5

up to 100 MHz

MIMO 8x 4x MIMO

Heterogeneous Networks

Coordinated Multipoint

Relaying

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Typical radio spectrum & ecosystem

3GPP

multi-

technology

bands

900/850

1800

2100

EU800 or APAC700

2300 TDD

2600 FDD

2600 TDD

GSM/EDGE

WCDMA/HSPA

LTE

GSM/EDGE

LTE

WCDMA/HSPA

LTE (EU 800)

LTE (APAC 700)

LTE

TDD LTE

LTE

TDD LTE

LTE bands

in APAC

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For internal use


ITU Region 2

Close-to-global harmonization potential in 700 MHz - based on APT-700 band plan / 3GPP Band 28 -

ITU Region 1

ITU Region 3

APT

CEPT

ATU CITEL

ASMG

APT: Asia Pacific Telecommunity

ASMG: Arab Spectrum Management Group

ATU: African Telecommunications Union

CEPT: Conférence Européenne des Administrations

des Postes et des Télécommunications

CITEL: Comisión Interamericana

de Telecomunicaciones

US Band Plan

APT700 FDD Band 28 preference

APT-700 FDD Band 28 possible

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For internal use

©2013 Nokia Solutions and Networks. All rights reserved. 12/9/2013 Document ID / v. 0.1 / Life cycle status / Dept. / Author

Huge variety • dongles • tablets / laptops • routers / hotspots • smartphones

1240 LTE devices launched (Nov’13) number of band variants - variety of devices - multimode with 2G/3G technology

Strong devices ecosystem in place

• 870 LTE devices also operate on either HSPA, HSPA+ or DC-HSPA+ networks

• 426 LTE devices support DC-HSPA+

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2013

Positive Outlook - LTE-Advanced Peak Data Rate Evolution -

• Initial LTE devices 100 Mbps (Cat 3) with contiguous 20 MHz

• Currently devices 150 Mbps (Cat 4) with contiguous 20 MHz

• 150 Mbps with 10 + 10 MHz carrier aggregation in 2013 (e.g. Korea)

• 300 Mbps with 20 + 20 MHz starting in 2014

• Korea even going for three carrier aggregation

100 Mbps

2010

2012

2013

20 MHz

2x2 MIMO

150 Mbps

20 MHz

2x2 MIMO

150 Mbps

10+10 MHz

2x2 MIMO

2014

2015+

300 Mbps

20+20 MHz

2x2 MIMO

>1 Gbps

40+ MHz

4x4 / 8x8 MIMO

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2013

Voice Evolution with LTE

LTE (data only)

WCDMA GSM

Page in LTE

2G/3G Voice Fallback (CSFB)

• since 2011

• widely deployed

LTE (data only)

2G/3G

CS voice

Single Radio Voice Call Continuity

(SRVCC)

• ensures seamless voice continuity

• enables handover to 2G/3G outside

of VoLTE coverage

Seamless

voiver handover

SRVCC is standardized in 3GPP Rel.9, with enhancements in Rel.10

LTE (data only)

WCDMA GSM

Voice over LTE

Voice over LTE (VoLTE)

• first networks already

deployed (e.g. Korea, US)

• extremely quick call setup

• HD voice quality

• Roaming expected 2014

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• Why LTE



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For internal use


Why launch LTE?

We need to move heavy data users to a more cost-efficient network.

We don’t want to

invest in our CDMA

network anymore.

This is a chance for us to win market share.

We need to maintain

our brand position as

a technology leader.

Our competition is

doing it! LTE is the best way to bring high-quality connectivity to rural areas.

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How important is to reach population coverage quickly? … and where.

Coverage is just as important as speed…

… when users fall out of LTE coverage

zones and are switched back to 3G speeds, it is not a nice experience

“

“ European operator

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2013

One (regulator-determined) LTE strategy: Bringing broadband to underserved areas

3G coverage at Kyritz

4G coverage at Kyritz

Source: Deutsche Telekom

4G (LTE 800MHz) coverage

3G (WCDMA 2.1GHz) coverage

• Service name: Call and Surf via Funk

(“Call and surf via radio”)

• Residential broadband package

• “Works without DSL” (available in locations without DSL)

"In a first step LTE will enable broadband access in rural areas, where fast access to the Internet has so far been unavailable.“ Bruno Jacobfeuerborn, Director Technology Telekom Deutschland

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US: Rapid early rollout and population coverage make

a difference in LTE takeup

Sources: Informa, Fierce Wireless 2013

100%

50%

25%

75%

Perc

en

tag

e o

f po

pu

latio

n c

ov

ere

d b

y L

TE

Verizon LTE population coverage

AT&T LTE Population coverage

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0%

Months since LTE launch

% o

f L

TE

su

bs

cri

be

rs

ou

t o

f to

tal m

ob

ile

su

bs

cri

be

rs

50%

70%

40%

60%

30%

20%

10%

12 24 36

Time since launch does not guarantee LTE success: Q3 2013

Source: Informa WCIS+, November 2013

LTE part of all data plans

User action needed to get LTE – often premium price

Bubble size = LTE pop coverage %

99%

99%

99%

95%

97%

81% 66% 61%

50%

40%

80%

66%

+20% to 10€

+28% to 6€

-2% to 9€

+12% to 17€

+24% to 12€

+41% to 20€

Change in Data ARPU since LTE launch

-3% to 5€

+106% to 10€

+14% to 11€

+7% to 15€

+29% to 17€

+0% to 15€ LTE as premium

or separate plan

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For internal use


Successful and unsuccessful Rate and Plan

In the real world pricing is everything, even if you have the

best network. People will still look for value for money, it not about having the cheapest price, but

having the best deal

“

“ MEA operator

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For internal use


Marketing assumptions …

At Belgacom, when you say you don’t make many calls, they assume you want the cheapest plan and don’t want any 4G data

At Sonera Finland, they assume you’re just going to use lots of What’s App or Skype and match low calls with high data

• 100 mins voice • 100 texts • 50 GB 4G data

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For internal use


Belgacom subs: LTE is expensive . . . and why do I want it?

If I say I want to do this:

Belgacom recommends this:

But if I say I want to do this:

Belgacom recommends this:

LTE is 2x the price with no clear value, since clearly I can watch video and stream music at €32

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For internal use


Stunning LTE takeup from an emerging market Maxis Malaysia

US$15 = 2% of monthly GDP per capita

All purchasers of an LTE-capable handset automatically get LTE Cheapest plan is US$15/m for 1 GB

14.6% yoy growth in mobile Internet and data usage

"Our strategy around improving customer experience

as well as focusing on mobile Internet is showing early

positive results," Morten Lundal, CEO, Maxis

LTE takeup after

9 months, out of

Maxis’ total subs:

3.2%

Average LTE

takeup in Mexico: Similar GDP, similar launch dates

LTE at premium price

0.1%

Average LTE

takeup in Brazil: Similar GDP, similar launch dates

LTE at premium price

0.2%

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LTE at no premium is the first step towards mass adoption also in

emerging markets – How is it working for Maxis?

1.No premium pricing lowers

major entry barriers for LTE

2.Several tiers available and

possibility to add more

data as limit approaches

Source: Informa WCIS, Business Times

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Selling the LTE handset, not the network

Orange Switzerland

Phones are highlighted, plus a price reduction promotion

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Wide LTE handset range is part of greater LTE success

Source: GSMA Intelligence and tefficient, November 2013

The most successful LTE operators consider the handset to be part of the network that also needs rolling out

Pop coverage > 65% + at least 10 LTE phones = high LTE penetration

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LTE-capable handsets as a % of all handset sales in LG U+ Korea

Source: LG U+, August 2013

Significant LTE handset penetration is a prerequisite for success

$20.00

$22.00

$24.00

$26.00

$28.00

$30.00

$32.00

$34.00

LG U+ ARPU

ARPU increased

29% in period,

56% of subs are now

on LTE

AR

PU

in

US

$

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Top LTE sites vary by country and culture …

Japan & Korea

On subway trains At subway stations

Australia High-traffic transit + restaurant zones Small businesses and lower-income renting residential

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… influencing people’s internet usage.

UK:

Long daily commutes

to cities with no special

coverage on trains

Korea:

Long daily commutes

to cities with

excellent coverage

on trains

Everyone looking at their smartphone

Three people reading newspapers

Three people listening to

music/podcasts

No one looking at their

smartphone

4G 3G

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For internal use


Might not be everywhere

Influencing factors: • Cost • Convenience • Quality • Public vs private Wi-Fi

LTE’s influence on Wifi EE UK, August 2013:

LTE1800 (20 MHz)

WCDMA2100 (5 MHz)

WiFi

Seoul subway speedtest, October 2013

All three networks provided by same operator

South Korea:

“Why would anyone want to use public Wi-Fi when LTE is so much better?”

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• Why LTE



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Conclusion and Summary


• LTE spectrum incl. regulatory frame

• APT700 extremely attractive for quick and economic coverage

• Massive data

growth on mobile

• Ecosystem for LTE

rapidly growing - 1240 LTE devices

- 260 LTE networks

- 126 mio subs (Q2’13)

• Data optimized technology

• Better customer experience (speed, latency)

• Seemless integra-tion into 2G/3G (e.g. voice evolution)

• Coverage reaching the market

rapidly

• Rate plans - LTE not as

a premium

- Huge variety of

devices to be

offered

Market Technology Success

Factors Indonesia

LTE Application in Real World

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