For internal use
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LTE industry snapshot Nils Kleemann, Head MBB Solutions, APAC
12/9/2013 Document ID / v. 0.1 / Life cycle status / Dept. / Author
2
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• MBB Industry update
• Why LTE
• Go-to-Market examples with LTE
• Relevance for Indonesia
3
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©2013 Nokia Solutions and Networks. All rights reserved.
Market
12/9/2013 Document ID / v. 0.1 / Life cycle status / Dept. / Author
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
4
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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)
5
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Commercialization of LTE
Source: GSA (www.gsacom.com)
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 -
6
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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
Source: GSA (www.gsacom.com)
7
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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)
8
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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
9
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• MBB Industry update
• Why LTE
• Go-to-Market examples with LTE
• Relevance for Indonesia
10
For internal use
©2013 Nokia Solutions and Networks. All rights reserved.
© 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)
11
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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
12
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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
13
For internal use
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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
14
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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
15
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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+
16
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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
17
For internal use
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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
18
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• MBB Industry update
• Why LTE
• Go-to-Market examples with LTE
• Relevance for Indonesia
19
For internal use
©2013 Nokia Solutions and Networks. All rights reserved.
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.
20
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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
21
For internal use
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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
22
For internal use
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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
23
For internal use
©2013 Nokia Solutions and Networks. All rights reserved.
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
24
For internal use
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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
25
For internal use
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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
26
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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
27
For internal use
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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%
28
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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
29
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Selling the LTE handset, not the network
Orange Switzerland
Phones are highlighted, plus a price reduction promotion
30
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5
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
31
For internal use
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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
$
32
For internal use
©2013 Nokia Solutions and Networks. All rights reserved.
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
33
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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
34
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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?”
35
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• MBB Industry update
• Why LTE
• Go-to-Market examples with LTE
• Relevance for Indonesia
36
For internal use
©2013 Nokia Solutions and Networks. All rights reserved.
Conclusion and Summary
12/9/2013 Document ID / v. 0.1 / Life cycle status / Dept. / Author
• 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
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