LTE industry snapshot

Nils Kleemann, Head MBB Solutions, APAC

For internal use Document ID / v. 0.1 / Life cycle status / Dept. / Author

12/9/2013

2013 Nokia Solutions and Networks. All rights reserved.

 MBB Industry update

Why LTE
Go-to-Market examples with LTE Relevance for Indonesia

For internal use

2013 Nokia Solutions and Networks. All rights reserved.

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

3 12/9/2013
For internal use Document ID / v. 0.1 / Life cycle status / Dept. / Author 2013 Nokia Solutions and Networks. All rights reserved.

Todays 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
Lumia 625
Price: $234.99 (www.amazon.com)
Source: GSA (www.gsacom.com)
For internal use

The availability of LTE-enabled devices at a range of prices has been a contributor to the uptake in LTE

2013 Nokia Solutions and Networks. All rights reserved.

Commercialization of LTE
126.1 mio
Commercial LTE networks (cum.)
300

LTE subscriptions
260

250
200 146 150 100 50 2
222 (Oct 17, 2013)

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

Q2 2013 2.6 bn LTE subs

Covering 65% of world population

46 16

0
2009 2010 2011 2012 2013 - prediction -

2019

Source: GSA (www.gsacom.com)

For internal use

2013 Nokia Solutions and Networks. All rights reserved.

Devices for LTE

1240 devices
More than a third of LTE devices are Smartphones

Devices are so important

because theyre what the consumer develops an emotional connection with, like the iPhone for example

supporting LTE

Nov13
99% of LTE handsets are 3G/multimode
(as fallback)

Source: GSA (www.gsacom.com)

For internal use

2013 Nokia Solutions and Networks. All rights reserved.

 but LTE always needs to fit in operators MBB strategy.

Network capabilities Customer relationship Business model

Service information

Service sellers Services

Seller 1 Seller 2 Seller 3

Operator
End customer
Performance
(speed, latency)

Customer insight

Customer insight

Service Mix / brand

(fixed/mobile, voice/data)

Content / OTT player

(corporate, compete)

Quality
(coverage, capacity)

Pricing / contract
(flat/cap, bundling, devices) Customer insight /

New business models

(service enrichments, device specific adaptations)

Extreme Efficiency
(scale, synergies, automation)
For internal use

experience mgmt
2013 Nokia Solutions and Networks. All rights reserved.

7
2013

The network domain for MBB

Key ingredients

Smart Content Delivery

Winning with Customer Experience

Making money with mobile broadband

Capacity Growth

Simplify Operations

For internal use

8
2013

2013 Nokia Solutions and Networks. All rights reserved.

 MBB Industry update

Why LTE
Go-to-Market examples with LTE Relevance for Indonesia

For internal use

2013 Nokia Solutions and Networks. All rights reserved.

Global drivers for LTE

Data optimized mobile System
Data only LTE
GSM WCDMA CDMA

Technology Convergence
LTE FDD
> 90% harmonized in 3GPP

Voice/Data Voice only

(initially)

WCDMA /HSPA
WiMAX TDSCDMA

LTE Advanced

TD-LTE

GSM/GPRS /EDGE

Better experience
Throughput
100 Mbit 150 50 >42 Mbit <1 Mbit GSM HSPA LTE GSM HSPA 10ms LTE

New / refarming bands

New: 2600MHz 800MHz 700MHz Refarming: 1800MHz 2100MHz 850MHz 2300/2600 (TDD)

Latency

Only technology supporting both: FDD and TDD

For internal use

10
Nokia Siemens Networks 2012

2013 Nokia Solutions and Networks. All rights reserved.

Spectrum being most valuable asset

Capacity Coverage Coverage bands: Up to 4x larger coverage per site Spectrum
carrier aggregation

Modulation
16 64 QAM

Antenna Technologies
2x2 MIMO. 4x4 MIMO

Bandwidth LTE 2.6GHz

Example HSPA+

1900/2100 MHz 1800 MHz/AWS

Refarming

850/900 MHz LTE 700/800MHz (Digital Dividend) Coverage

New bands with excellent coverage

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

11
2013

2013 Nokia Solutions and Networks. All rights reserved.

Key drivers for Single RAN

Examples of operator technology options
Heterogeneous Networks

Coordinated Multipoint

Relaying

1Gbps@day

HSPA/LTE-A
8x

MIMO MIMO

4x

Carrier Aggregation
up to 100 MHz 100 MHz Carrier1 Carrier2 Carrier3
Carrier5

For internal use

12
2013

2013 Nokia Solutions and Networks. All rights reserved.

Typical radio spectrum & ecosystem

2600 TDD 2600 FDD 2300 TDD LTE
TDD LTE LTE WCDMA/HSPA LTE GSM/EDGE LTE WCDMA/HSPA GSM/EDGE 3GPP multitechnology bands TDD LTE

LTE bands in APAC

2100 1800 900/850

EU800 or APAC700

LTE (EU 800)

LTE (APAC 700)

For internal use

13

2013 Nokia Solutions and Networks. All rights reserved.

Close-to-global harmonization potential in 700 MHz

- based on APT-700 band plan / 3GPP Band 28 ITU Region 2
ITU Region 1

CEPT ASMG CITEL ATU APT

ITU Region 3

For internal use

14

APT: Asia Pacific Telecommunity ASMG: Arab Spectrum Management Group ATU: African Telecommunications Union CEPT: Confrence Europenne des Administrations US Band Plan des Postes et des Tlcommunications APT700 FDD Band 28 preference CITEL: Comisin Interamericana de Telecomunicaciones APT-700 FDD Band 28 possible 2013 Nokia Solutions and Networks. All rights reserved.

Strong devices ecosystem in place

1240 LTE devices launched (Nov13)
number of band variants - variety of devices - multimode with 2G/3G technology
870 LTE devices also operate on either HSPA, HSPA+ or DC-HSPA+ networks 426 LTE devices support DC-HSPA+

Huge variety

dongles tablets / laptops routers / hotspots smartphones

15 12/9/2013

For internal use Document ID / v. 0.1 / Life cycle status / Dept. / Author

2013 Nokia Solutions and Networks. All rights reserved.

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 2014 2013
300 Mbps
20+20 MHz 2x2 MIMO

2015+
>1 Gbps
40+ MHz 4x4 / 8x8 MIMO

2012
2010
100 Mbps
20 MHz 2x2 MIMO
For internal use

150 Mbps
10+10 MHz 2x2 MIMO

150 Mbps
20 MHz 2x2 MIMO

16
2013

2013 Nokia Solutions and Networks. All rights reserved.

Voice Evolution with LTE

2G/3G Voice Fallback (CSFB) Voice over LTE (VoLTE) Single Radio Voice Call Continuity (SRVCC)
Seamless voiver handover

LTE
(data only)
Page in LTE

LTE
(data only)
Voice over LTE

LTE
(data only)

WCDMA
GSM

WCDMA
GSM

2G/3G CS voice

since 2011 widely deployed

first networks already deployed (e.g. Korea, US) extremely quick call setup HD voice quality Roaming expected 2014

ensures seamless voice continuity enables handover to 2G/3G outside of VoLTE coverage

For internal use

17
2013

SRVCC isNokia standardized in and 3GPP Rel.9, with enhancements 2013 Solutions Networks. All rights reserved. in Rel.10

 MBB Industry update

Why LTE
Go-to-Market examples with LTE Relevance for Indonesia

For internal use

18

2013 Nokia Solutions and Networks. All rights reserved.

Why launch LTE?

We dont want to invest in our CDMA network anymore. We need to move heavy data users to a more cost-efficient network.

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.

For internal use

19

2013 Nokia Solutions and Networks. All rights reserved.

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

For internal use

20

2013 Nokia Solutions and Networks. All rights reserved.

One (regulator-determined) LTE strategy:

Bringing broadband to underserved areas
"In a first step LTE will enable broadband access in rural areas, where fast access to the Internet has so far been unavailable.
4G coverage at Kyritz

Bruno Jacobfeuerborn, Director Technology Telekom Deutschland

3G coverage at Kyritz

Service name: Call and Surf via Funk

(Call and surf via radio) Residential broadband package Works without DSL
(available in locations without DSL)
Source: Deutsche Telekom

4G (LTE 800MHz) coverage 3G (WCDMA 2.1GHz) coverage

For internal use

21
2013

2013 Nokia Solutions and Networks. All rights reserved.

US: Rapid early rollout and population coverage make a difference in LTE takeup

Percentage of population covered by LTE

100% 75%
Verizon LTE population coverage

50%
AT&T LTE Population coverage

25%

Sources: Informa, Fierce Wireless 2013 For internal use

22

2013 Nokia Solutions and Networks. All rights reserved.

Time since launch does not guarantee LTE success: Q3 2013

Change in Data ARPU since LTE launch
70%
% of LTE subscribers out of total mobile subscribers

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

Bubble size = LTE pop coverage % LTE part of all data plans User action needed to get LTE often premium price

99% +106%
to 10

+14% 99%
to 11

99% +24% +29% 80% to 12

to 17

97% +41%
to 20

+12% 50% 66% to 17 +0%

to 15

95% +7%
to 15

-3% 40% to 5
12

81% -2%
to 9

+28% 61%
to 6

+20% 66%
to 10

LTE as premium or separate plan

Months since LTE launch

24

36

Source: Informa WCIS+, November For internal use 2013

23

2013 Nokia Solutions and Networks. All rights reserved.

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

For internal use

24

2013 Nokia Solutions and Networks. All rights reserved.

Marketing assumptions
At Belgacom, when you say you dont make many calls, they assume you want the cheapest plan and dont want any 4G data

At Sonera Finland, they assume youre just going to use lots of Whats App or Skype and match low calls with high data
100 mins voice 100 texts 50 GB 4G data

For internal use

25

2013 Nokia Solutions and Networks. All rights reserved.

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

If I say I want to do this: But if I say I want to do this:

Belgacom recommends this:

Belgacom recommends this:

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

For internal use

26

2013 Nokia Solutions and Networks. All rights reserved.

Stunning LTE takeup from an emerging market

Maxis Malaysia
All purchasers of an LTEcapable handset automatically get LTE
LTE takeup after is US$15/m for 9 months, out of 1 GB Maxis total subs:

Average LTE takeup in Brazil:

Similar GDP, similar launch dates

14.6% yoy growth in mobile Internet and data usage

LTE at premium price

"Our strategy around improving customer experience as well as focusing on mobile Internet is showing early positive results,"
Morten Lundal, CEO, Maxis

0.2%
Average LTE takeup in Mexico:
Similar GDP, similar launch dates

Cheapest plan

LTE at premium price

3.2%
For internal use

0.1%
US$15 =

27

2% of monthly GDP per capita

2013 Nokia Solutions and Networks. All rights reserved.

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: 28

Informa WCIS, Business Times

For internal use

2013 Nokia Solutions and Networks. All rights reserved.

Selling the LTE handset, not the network

Orange Switzerland
Phones are highlighted, plus a price reduction promotion

For internal use

29

2013 Nokia Solutions and Networks. All rights reserved.

Wide LTE handset range is part of greater LTE success

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

The most successful LTE operators consider the handset to be

part of the network

that also needs rolling out

5
For internal use

30

2013 Nokia Solutions and Networks. All rights reserved.

Source: GSMA Intelligence and tefficient, November 2013

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

$34.00

$32.00

LG U+ ARPU
$30.00 ARPU increased

29%
ARPU in US$
in period, $28.00

56%
of subs are now on LTE

$26.00

$24.00

$22.00

Significant LTE handset penetration is a prerequisite for success

$20.00
For internal use

31

Source: LG U+, August 2013

2013 Nokia Solutions and Networks. All rights reserved.

Top LTE sites vary by country and culture

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

Japan & Korea

On subway trains At subway stations
For internal use

32

2013 Nokia Solutions and Networks. All rights reserved.

 influencing peoples internet usage.

Korea: Long daily commutes to cities with excellent coverage on trains UK: Long daily commutes to cities with no special coverage on trains
Three people reading newspapers Three people listening to music/podcasts No one looking at their smartphone

4G
Everyone looking at their smartphone
For internal use

3G

33

2013 Nokia Solutions and Networks. All rights reserved.

LTEs influence on Wifi

LTE1800
(20 MHz)

EE UK, August 2013:

WCDMA2100
(5 MHz)

WiFi

South Korea: Why would anyone want to use public Wi-Fi when LTE is so much better?
Might not be everywhere Influencing factors: Cost Convenience Quality Public vs private Wi-Fi
2013 Nokia Solutions and Networks. All rights reserved.

Seoul subway speedtest, October 2013 All three networks provided by same operator For internal use
34

 MBB Industry update

Why LTE
Go-to-Market examples with LTE Relevance for Indonesia

For internal use

35

2013 Nokia Solutions and Networks. All rights reserved.

Conclusion and Summary

Massive data
growth on mobile

Data optimized
technology

Coverage
reaching the market rapidly

LTE spectrum
incl. regulatory frame

Ecosystem for LTE

rapidly growing
- 1240 LTE devices - 260 LTE networks - 126 mio subs (Q213)

Better customer
experience (speed,
latency)

Rate plans
- LTE not as a premium - Huge variety of devices to be offered

APT700 extremely
attractive for quick and economic coverage

Seemless integration into 2G/3G

(e.g. voice evolution)

Market
36 12/9/2013

Technology

Success Factors

Indonesia

For internal use Document ID / v. 0.1 / Life cycle status / Dept. / Author

2013 Nokia Solutions and Networks. All rights reserved.