Public conference on "LTE: new frequencies 2.6 GHz & 800 MHz – a chance for a new image of mobile telephony?", Friday October 8th, Warsaw, Poland.

1. 1 Techno-economical aspects of mobile broadband From 800 MHz to 2.6 GHz.LTE: new frequencies 2.6 GHz & 800 MHz – a chance for a new image of mobile telephony? Friday October 8th, Warsaw, Poland. Dr. Kim (Kyllesbech Larsen)Technology Economics, T-Mobile

2. 2 Story…..

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4. Changing market.Social trends and technological indicators. Socialize Individualize Digitize 2 x as active ! as fixed users 1.60+ bn internet users. Next 1+ bn by 2015. 25+ mn Mobile-TV users in APAC 400+ mn active users. 100+ mn mobile users. 2.5+ bn photos per month 4.1+ bn mobile users. <10% on mobile internet. 20+ hrs video per day $4.5+bn mobile gaming revenue 10+bn mobile apps downloads. 250+ bn e-mails per day. 40+% more than 5 MB. 400+ mn registered users. 86+ mn active ebay users 17 June 2010 4 2009: 45M Mobile users, 2.8M mobile broadband users, 21M internet users,.3.6M Facebook users (56% female, 65% 18-35), 4

5. 5 The incumbent mobile operator’s near-future … “it aint pretty”! The 3G traffic jam! 3G capacity crunch. Re-farming existing spectrum. New spectrum demand. Empty 2G roads - in time? Re-farming GSM! HSPA+ versus LTE ? Technology timing!

6. 6 The Greenfieldspectrum… “happy” short-term, a tougher future. Tougher future … growth limitations. Fixed-like demand! Dramatic Hz / customer drop! Additional spectrum and/or technology needs! Happy startup … plenty of quality. Lots of Hz per customer! High speed mobile broadband! Great customer experience!

7. 7 Telco Europe is all about efficiency … … avoiding shareholder unhappiness … EBITDA GROWTH REVENUE GROWTH Growth markets OPEX GROWTH Western Europe REVENUE PRESSURE 2010 – 2015 ILLUSTRATION Source: Pyramid Research 2010 & BoA Merrill Lynch 2010 Mobile Matrix.

8. 8 The Poland 2015 … broadband everywhere?, for everyone? Almost all house-hold will have a PC. Population 38mn Trend 1 mobile internet devices will exceed PCs. Mobile Broadband (50%) 430+% PCs (85% HH) 6 out of 10 house-hold with (fixed) broadband 1. Fixed broadband (60% HH) Trend 2 demand for always best connected. 1 out of 2 people will have mobile broadband 2. Trend 3 geometrical growth in data traffic. Source: Pyramid Research 2010. 1 Fixedbroadband: xDSL, Cable, FTTx, … 2 HSPA, LTE.

9. Spectrum benchmarking2.6 GHz requires least 9 times the site density to match 800MHz. 850 MHz DL power UL power (typical limitation for coverage) 2.6 GHZ Large Very small Coverage area ×9 ×1 ×6 ×4.5 2.1 GHz 2.6 GHz 1.8 GHz 900 MHz – 800 MHz (digital dividend) 2×35 MHz 2×30 MHz 2×60 MHz 2×75 MHz 190 MHz Low High Available bandwidth for LTE Illustration

11. High capacity.

13. Very good capacity.

15. Low capacity

16. Very good coverage..18* 0.9 18* 0.9 14* 0.9 700 – 900 MHz 10 0.9 10 0.9 12 0.8 Era Orange Plus Play CenterNet Aero2 Sferia 67 to 62 MHz 40 MHz 112 MHz Illustration * Bands broken up 1 Total view of UL + DL 2 Based on 2009 actual customers.

18. High capacity

20. Bandwidth below 30 MHzis of lowervalue than higher bandwidths.

21. Only urban population should be used for valuation.

22. TDD spectrum is in general of lower value than FDD (i.e., due to propagationn characteristics).

23. Rural - urban coverage.

24. Very good propagation.

25. Lower capacity. 700 – 900 MHz 2 × 30 MHz @ 800 MHz 1 Low-frequency spectrum (≤ 2.1 GHz) is more valuable than higher-frequency spectrum Initial coverage is more valuable than limited coverage and high capacity. Low frequency spectrum can capture more population for significantly less cost. Below 20 MHz spectral capacity limitation will limits the overall spectrum value.

27. Low absolute price compared to GDP.

29. No (real) demand.

30. Government push for new entrant.0.01 India 3 Min FI Large area, low pop density, very low GDP NL4 0.001 0.5 1.0 1.5 2.0 2.5 3.0 US 700 MHz auction 2008, German 800 MHZ – 2.6 GHz auction 2010 Indian 3G / BWA 2.3GHz auction 2010. Dutch 2.6 GHz auction 2010. Austrian 2.6 GHz auction 2010. Auctioned spectrum in GHz

31. The beauty of the “beast” Our customer, the smart-phone and its apps. 13

32. 1 + 1 = 2 (yesterday’s communications). ………… ……………. ……. …… ..... Mobile network Illustration 14

33. 1 + 1 is no longer just 2 (1 device - multi-tasking). Mobile network Apple push notification service (APN). Web 2.0 Illustration 15

34. 16 Mobile broadband versus fixed broadband demand. Lots of small volume events & very high signaling load due to mobile apps notifications High volume / P2P / streaming… 100+ 70↑+ 20 1 1/3 Mobile broadband 700 MHz – 2.1 GHz BWA 2.3 – 2.5+ GHz Fixed with WiFi Mobile industry: hardly any QoS pricing mainly based on volumetric FUP. Wireless & Fixed Broadband business model uses QoS-based pricing. Note: In relative usage

35. 3G on vitamins, HSPA on steroids with HSPA+ & ++.HSPA roadmapoffers substantial speed and ecosystem scale effects. HSPA HSPA+ HSPA+ HSPA++ 84+ Mbps 14.4 Mbps 21- 28 Mbps 42Mbps Network 5 MHz 5 - 10 MHz 10 MHz 15 - 20MHz 1H 2009 1H 2011 1H 2010 2012+ Huawei Data Huawei Data Huawei Stick Card Data Stick Data Sticks / Nov. 09 Netbooks Netbook (June 2010) 31 / 11 5 July 2010 1,000+ Devices1 Samsung Nokia Android Motorola Qualcomm Chipsets ST Ericsson M570-V3 MDM 8200 Qualcomm ST Ericsson M570 & U8500 MDM 8200 Qualcomm Qualcomm MDM8220 MSM 7230 QSC6295 1 iPhone 3Gs supports HSDPA 7.2 Mbps for iPhone 4 & iPAD HSDPA 7.2 Mbps/ HSUPA 5.76 Mbps. 17

36. Current mobile broadband option space. For 3 major operators little existing LTE optionality. 4 top players lack optimum LTE spectrum conditions (i.e., 40 MHz). C+A+S have (currently) the strongest LTE spectrum position in Poland. 18

37. How to perfect existing legacy spectrum – part 1.Re-farm own spectrum is complicated, costly and prone to be service affecting. Migration & re-farming to 3G & LTE. Customer migration from 3G LTE 3G 3G (215 @ 2.1 GHz) 3G  2G After some time 2G to 4G migration. Free LTE LTE 2G 2G (210 MHz @ 1.8 GHz) 2G LTE (210 MHz @ 1.8 GHz) New Customers ILLUSTRATION Note: 3G includes R99, HSPA, HSPA+, similar 2G includes Voice, GPRS & EDGE 19

38. How to perfect existing legacy spectrum – part 2.Re-farming GSM to UMTS in rural area accelerate penetration of mobile broadband. Rural migration & re-farming to UMTS900. Today there are more than 400+ UMTS900 devices. 3G 3G (215 @ 2.1 GHz) 3G  2G Free New Customers 2G (210 MHz @ 1.8 GHz) 3G 3G 3G @ 900  2G @ 900 UMTS900 Rural UMTS 2G 3G (900 MHz) ILLUSTRATION Note: 3G includes R99, HSPA, HSPA+, similar 2G includes Voice, GPRS & EDGE 20

39. New spectrum allows more efficient technology migration. Balancing demand & quality. Dense & Urban Areas 3G  LTE Migration LTE 3G (220 @ 2.6 GHz) 3G 3G  2G (215 @ 2.1 GHz) LTE Free 2G 2G (210 MHz @ 1.8 GHz) Rural to Urban Areas LTE New Customers (210 @ 800 MHz) ILLUSTRATION 21

40. 22 Macro economical benefits of broadband internet access everywhere. Un-economical spectrum pricing will delay and limit such benefits. Mobile broadband smart phones will increase spectrum demand rapidly. Without access to new spectrum resources operators will be growth limited. Re-farming legacy spectrum will be complex, costly and impact quality. Why should we care? Access to new spectrum paramount to ensure existing customer quality.

41. 23 Thankyouverymuch! Contact: kim.larsen@t-mobile.nl Tel: +31 6 2409 5202 http://nl.linkedin.com/in/kimklarsen