4G Technology Evolution, Indian ecosystem and Usage Trends

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A look at how telecom technology evolution has led to 4G networks, an analysis of potential of 4G for various stakeholders such as Telcos and Media Broadcasters especially in India and key challenges for deployment

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4G Technology Evolution, Indian ecosystem and Usage Trends

  1. 1. 4G Telecom Trends Global Trends and Key Success Factors for Indian deployment 1 Priyom Sarkar 10/22/2013
  2. 2. 4G (LTE) Technology and Implications 2
  3. 3. 4G (LTE)- Index Technology Evolution   LTE Architecture Global LTE Ecosystem    Network rollouts Devices Indian Situation Key Impact on Broadcast Sector Sector    3 4G User Profile
  4. 4. Mobile technologies have evolved from voice focused to data focused with speeds reaching 170 Mbps with 4G 1G • 1980 2G • 1991 2.5G+ • 1999 3G • 2001+ 3.5G • 2005 4G • 2010 (not to scale) 170 Mbps Theory 42 Mbps 21.1 Mbps 10-15 mbps Realized Downlink Speeds 5-8 Mbps 2Mbps 384 kbps 128 kbps 14.4 kbps 2-3 Mbps 384-400 kbps 100-130 kbps 20-50 kbps Note: 5MHz bandwidth considered in all cases 9.6 kbps Analog GSM, CDM A (Digital introduced) GPRS, EDGE (interim marketing release) WCDMA (UMTS), CDMA 1x EV-DO (Reliable Video experience) HSDPA, HSUPA, HS PA + (Interim marketing release) LTE, WiMax (speeds comparable to FBB) Sources: 3GPP Alliance, UMTS Forum, Informa Telecoms & Media, Motorola, ZTE, Huawei, internal analysis GSM: Global System for Mobile communications, TDMA: Time Division Multiple Access, GPRS: General Packet Radio Service, EDGE: Enhanced Data rates for GSM Evolution, (W) CDMA: (Wideband) Code Division Multiple Access, EV-DO: Evolution Data-Optimized, HSDPA: High-Speed Downlink Packet Access, HSUPA: HighSpeed Uplink Packet Access, TD-SCDMA: Time Division Synchronous Code Division Multiple Access, LTE: Long Term Evolution, FBB: Fixed Broadband 4
  5. 5. 4G Architecture is optimized for fast speeds    LTE: Evolution from separate switching core sub-domains to one common IP core facilitating faster access Voice is also treated as data (Voice over Internet Protocol – VoIP) VoIP can be VoLTE (nascent – for data only operators) or CSFB (falls back to 2G for voice) Source: Ericsson 5
  6. 6. Strong demand is expected for these high speed networks 10000 Mobile Subscriptions by technology (in mn) LTE: 126 mn on Q2,’13 8000 LTE 6000 WCDMA/HSPA GSM/EDGE only TD-SCDMA 4000 CDMA Other 2000 0 2009   2010 2011 2012 2013E 2014P 2015P 2016P 2017P 2018P LTE Technology is already commercial and maturing quickly LTE subscriptions projected to reach 2 billion by 2018 from 126 mn as on Q2 2013 Source: Ericsson, gsacom.com 6
  7. 7. Network operators worldwide have geared up to meet expected user demand First commercial LTE networks were launched by TeliaSonera in Norway and Sweden in December 2009 213 commercially launched LTE networks and 406 commercial network commitments in 81 countries 50 pre commitment trials in 9 more countries    7
  8. 8. TDD-LTE Deployments have started but lag FDD deployments   8 Presently 21 commercial LTE TDD networks exist Further 39 LTE TDD networks are either under trial or planned
  9. 9. Over 1000 LTE Devices exist but are primarily concentrated towards FDD mode 362 850 FDD LTE Devices 322 265 265 247 231 230 229 142 128 Mobile 2300 Tablet Module 5 16 3% Femtocell 11% 1 1% 222 TDD LTE Devices 164 MHz TD LTE Smartpho ne 12 8% 147 104 49 49 13 Dongles 32 22% Routers incl Hotspots 81 55% Spectrum (MHz), Band 1064 LTE User devices have been announced from 111 manufacturers 2600 and 1800 MHz have the highest devices support   For 2300 MHz, 147 products in the market as on Aug, 2013 Lack of ecosystem may reduce attractiveness as handsets may not support international roaming because of incompatible bands, duplex modes and frequencies in different countries   As on Aug, 2013; Source: gsacom.com 9
  10. 10. In India, Major data push is expected to come from Reliance Jio, Bharti and Aircel * Metro Delhi Mumbai Kolkata Circle A Maharashtra Gujarat Andhra Pradesh Karnataka Tamil Nadu/Chennai Circle B Kerala Punjab Haryana Uttar Pradesh (East) Uttar Pradest (West) Rajasthan Madhya Pradesh West Bengal Circle C Himachal Pradesh Bihar Orissa Assam North East Jammu & Kashmir Standalone BWA Circles Standalone 3G Circles 3G + BWA Circles Circles with no 3G / BWA Standalone BWA    22 NA NA - 2 12 1 7 Standalone 3G 9 13 13 9 3G + BWA 11 11 9 13 5 8 9 22 - NA NA NA 22** 5 NA NA 17 1 NA NA 21 1800 MHz liberalized** *Bharti has purchased Qualcomm’s BWA licenses in Delhi, Mumbai, Haryana and Kerala **Videocon has won spectrum (1800 MHz) in six circles : Bihar, Gujarat, Haryana, MP, UP (E) & UP (W) in Nov, 2012 auction. As the spectrum is liberalised, operators can use the airwave for any technology Augere is trying to sell off its 4G spectrum in Madhya Pradesh – further consolidation expected as stated by Mr. Sibal Source: DoT, GoI 10
  11. 11. 3G uptake has been slow in India 3G Active Subs (mn, Mar,13) 3G Site Coverage 30,000 45% 25,604 9.7 20,000 30% 17,481 3.3 11,659 5.1 31.7 10,000 19% 15% 16% 13% 6.4 0 7.2 0% Airtel RCOM   Bharti Idea Vodafone Others* Total* Idea 3G Sites RCom % of total sites Active 3G subs: ~32 mn out of 870 mn total subs on Q1, 2013 (3.5 % penetration) Average 3G site coverage:16.5% for top 3 players in 3G Source: mobiThinking, lughtreading.in, IDFC, internal analysis 11 *Others and Total approximated from June 12 ratios of top 4 vs. others
  12. 12. Indian 4G scenario is nascent and suffers from lack of ecosystem support Duplex Mode: Time Division FDD Better Range Lower latency TDD Spectrum: 2300 MHz 2300 700 Requires less spectrum Faster downlink possible More developed ecosystem Higher signal interference No. of towers/ capex required one third Lower coverage Better device compatibility  Globally most 4G devices are compatible with FDD  China Telecom recently announced $8bn tenders for TDD devices – ecosystem to develop rapidly with RIL / Indian players using TDD  Auction for 700 MHZ spectrum going to be key for Indian 4G deployments as economics improve dramatically  Content availability is low (recently TataSky announced LiveTV on mobile, Zee Anmol a FTA GEC is also available on Mobile platform) 12
  13. 13. 4G handsets need to be priced optimally in price sensitive Indian market Indian 3G/4G* enabled Phones 13 100% 1 6 130 5 >40k 30k-40k 237 20k-30k 50% 115 10k-20k 192 6 Phone Sales in India (mn) 680 81 4 76 122 4 118 123 2 120 175 6 188 11 169 177 219 16 203 244 267 291 353 318 57 93 127 171 29 215 209 198 191 182 <10k 1 0% 4G 3G Feature Phones Smartphones Total  *None of the 4G devices shown above presently support 2300 MHz TD-LTE  Only 13 devices supporting 4G (non 2300 MHz TD-LTE) vis-à-vis 680 supporting 3G; after unified licensing scheme, these devices may eventually support networks for different operators  More than 90% of 4G devices are above 20k (all but 1) vis-à-vis 55% for 3G  Smartphones expected to rise from 12% in 2013 to 49% of new sales in 2017  Huawei (Ascend P1) and LG (Optimus G) and Karbonn have announced plans to launch devices soon  Operators such as RJIL, Bharti, Videocon, etc. are testing voice calling on 4G  Operators may overcome limited devices support via MiFi personal routers Source: pricedealsindia.com compiled by comparing across online retailers, , IDC 13
  14. 14. 4G is changing user behaviour 65+ 2% 55-64 7% Who is the user? (Age group) Music & app downloading and streaming 11% Video What is s/he doing? Downloading , Uploading & Streaming 26% 18-24 21% 45-54 16% 35-44 23% Web Browsing & Email 40% 25-34 31% File Sharing and Storage 2%  More than half are in 18-34 years old  Avg 4G user is 5 yrs younger than 3G customer  Almost even split between male and female (58-42) Source: EE H1 report from UK market 14 Social Media 13% Video Calling & other 8%  26% of time spent is on video and ~55% of all video watched is through Youtube (~15% overall)  A quarter of 4G users spend three or more hours on the mobile internet every day – strong engagement
  15. 15. Broadcasters need to optimize their offering to take advantage of 4G opportunity Programming • LTE opens up opportunity for VoD and Catchup TV on Mobile Networks • Broadcasters need to identify and evaluate different pricing options for video units that may be most attractive for VoD Multi-Screen Support • Videos need to be available in multiple screens– mobile, tab, laptop, TV, etc. Multi-Format Support • Push towards higher resolution (1080p, 4K and 3D) –for better realization Targeting 15 • Focus on youth programming (52% users 18-34 years old)

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