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A global analysis of LTE spectrum requirements and business models
 

A global analysis of LTE spectrum requirements and business models

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Presented by Daniele Tricarico, Senior Analyst, CALA on 25 August 2011 at FOROS TECNOCIMIENTO 2011, BOGOTA, COLOMBIA ...

Presented by Daniele Tricarico, Senior Analyst, CALA on 25 August 2011 at FOROS TECNOCIMIENTO 2011, BOGOTA, COLOMBIA


Available to download from: http://www.cintel.org.co/capacitacion/2011/foros2011/presentaciones/CINTEL-TIGO-FOROS2011-Informa_Telecoms_&_Media.pdf

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    A global analysis of LTE spectrum requirements and business models A global analysis of LTE spectrum requirements and business models Presentation Transcript

    • Make better business decisionswww.informatm.com 8/29/2011 1©Confidential
    • A global analysis of LTEspectrum requirementsand business modelsFOROS TECNOCIMIENTO 2011BOGOTA, COLOMBIA25 August 2011Daniele TricaricoSenior Analyst, CALA29/08/2011
    • Agenda: A global analysis of LTE spectrum requirementsand business models 1. Sizing the LTE opportunity 2. LTE spectrum requirements and availability 3. LTE spectrum: Initial findings 4. Status quo of devices 5. LTE business models: A global analysis of the go-to-market strategies of early LTE adopters • Addressing the opportunity: Options for operators • Marketing and pricing LTE 6. LTE business models: Initial findings 7. Informa viewpoint www.informatm.com 3 ©Confidential
    • Sizing the LTE opportunitywww.informatm.com 8/29/2011 4©Confidential
    • Mobile data: Operator strategy focused on growing datarevenues to offset declining voice revenues Latin America, data revenues as a % of Latin America, mobile ARPU, data VS total service revenues, 2009-15 voice, 2010 & 2015 Source: Informa Telecoms & Media 29/08/2011 5
    • Forecasts: LatAm migration from GSM to WCDMA hasbegun and from WCDMA to LTE will be next Latin America, network technology transition, 2011-2016 Source: Informa Telecoms & Media www.informatm.com 6 ©Confidential
    • HSPA is now widespread in LatAm and globally, HSPA+and LTE trials are followingHSPA LTE trials in LatAm• 64 networks in service • Argentina -Personal, June 2010 in 2.6 GHz• 27 countries • Argentina - Telefonica, December 2010 in• 62 million subs by end-2011 1.7/2.1 GHz• 358 million subs by end 2015 • Brazil: Oi, June 2011 with 4 vendors in the 2.6 GHz band11 HSPA+ commercial launches • Chile: Entel PCS, December 2009 in 2.6 GHz• CellularOne (Bermuda) • Mexico: America Movil, Lab test of 1.7 / 2.1• Digicel (Bermuda) GHz• Entel Movil (Chile) • Nicaragua: Claro trialling in 700 MHz• Movistar (Chile) • Peru: Telefonica first field data call, June 2010• Movistar (Ecuador) in 700 MHz• Alegro (Ecuador) • Uruguay: ANCEL, 2H 2011, in 1.7 / 2.1 GHZ• Digicel (French West Indies)• Iusacell (Mexico)• Claro (Panama)• AT&T (Puerto Rico)• T-Mobile (Puerto Rico) Source: Informa Telecoms & Media (1Q11)
    • LTE commercial launches by network, 1Q11 Source: Informa Telecoms & Media www.informatm.com 8 ©Confidential
    • Forecasts: Next year will see the peak of new launches LTE network launches, 2009-2014 and beyond Source: Informa Telecoms & Media www.informatm.com 9 ©Confidential
    • Forecasts: LTE subscriptions to surpass 100 millionin 2014 Global, LTE subscriptions, 2011-2016 Source: Informa Telecoms & Media www.informatm.com 10 ©Confidential
    • Forecasts: LTE will still account for less than 5% ofglobal connections in 2015 Early uptake by end-2010: Projected LTE uptake, 2009-2015 • Verizon = 65,000350.000.000 • TeliaSonera = 10,000300.000.000 across all markets250.000.000 • NTT DoCoMo = 1,200200.000.000150.000.000100.000.000 50.000.000 North America: 0 • US to hit 2.3m connection Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 by end-2011 Africa Americas Asia Pacific Europe: Eastern Europe: Western Middle East USA/Canada • US to reach 67m by end- 2015, equivalent to16% of total connections • Canada to contribute 3.4m be end-2015 Source: Informa Telecoms & Media www.informatm.com 29/08/2011 11 ©Confidential
    • LTE spectrum requirements and availability www.informatm.com 8/29/2011 12 ©Confidential
    • LTE core bands Band FDD/TDD 700MHz FDD 800MHz FDD 900MHz FDD 1800MHz FDD 2100MHz FDD 2600MHz FDD 2300MHz TDD 2600MHz TDD Source: Informa Telecoms & Media www.informatm.com 13 ©Confidential
    • Adoption of spectrum bands: North and LatinAmerican LTE network deployments www.informatm.com 29/08/2011 14 ©Confidential
    • Popular LTE band combinations by region Source: Informa Telecoms & Media www.informatm.com 15 ©Confidential
    • Colombia to release 300MHz spectrum in next three years• The National Agency of Spectrum (ANE) and the ICT Ministry (MINTIC) plan to release 300MHz of spectrum for mobile broadband services in the next two to three years.• The new spectrum awards will be in line with the universal access plan, dubbed Vive Digital. A key priority for the government is to expand broadband access, by either fixed or mobile broadband technologies.• Of the 300MHz of spectrum to be awarded, 30MHz will be in the 1900MHz band, 90MHz in the AWS band (1.7-2.1GHz), 90MHz in 2.6GHz and 90MHz in 700MHz.• The government plans to auction 2 x 10MHz blocks per channel per operator and a number of 2 x 20MHz blocks, which is seen as ideal for LTE.• Spectrum will be awarded on a technology-neutral basis, although the AWS band is likely to be used for HSDPA and HSPA+, and 2.6GHz and 700MHz spectrum for LTE. On lower bands, there will be conditions requiring coverage of rural areas. www.informatm.com 29/08/2011 ©Confidential
    • LTE spectrum initial findings: 2600MHz is popularglobally, 700-800 for initial launches, support for 1800• The 2600MHz band remains the most popular globally for initial launches of LTE, favored by almost half of operators surveyed by Informa Telecoms & Media.• The bands around 700MHz to 800MHz are expected to be the next-most-widely used for initial launches.• There is evidence of growing support among operators for the 1800MHz band, which is regarded as providing an ideal combination of coverage and capacity.• All regions will see deployments in multiple bands. Up to 10 bands are expected to be used in any single region.• Band pairings will be a feature of many markets, with a lower band for coverage in rural and less densely populated areas, and a higher band for capacity in dense urban and urban areas, and in hot spots. www.informatm.com 29/08/2011 17 ©Confidential
    • Licensing and early deployment findings:2600MHz in a handful of countries, 700Mhz popular inUS, low-midrange spectrum in Germany• Spectrum in the 2600MHz band has been licensed in only a handful of countries in Europe and Asia Pacific.• With a few exceptions, licensing of the digital-dividend bands will be subject to uncertain timescales due to the problems of freeing up spectrum.• Early deployments in the lower frequency bands have been concentrated in the US, where the low cost of using the premium 700MHz band relative to the higher bands has suited the aggressive rollout plans of operators such as Verizon.• Interest in the low-to-midrange frequency bands was also apparent in Germany’s spectrum auctions, where some operators placed a higher value on the spectrum bands around 800MHz than on those around 2600MHz. www.informatm.com 18 ©Confidential
    • FDD VS TDD: FDD sees most uptake but growingsupport for TD-LTE• Major TDD markets are China and India. There is also interest from Japan, South Korea, Saudi Arabia and Taiwan, among others. Region Country TDD band Launch date• Networks launching in 17 countries by end-2014. Africa Uganda 2300 Dec-12• Asia Pacific Japan 2600 Dec-12• Widely available and cheaper than FDD. South Korea 2300 Dec-13 Taiwan 2600 Dec-13• Better meets the asymmetric demands of data China 1900 Dec-12 2300 Dec-12 traffic such as Internet and video. 2600 Dec-12 India 2300 Sep-12• Provides LTE migration path for WiMAX 2600 Mar-13 operators. Eastern Europe Czech Republic 2600 Jun-12 Estonia 2600 Dec-10• Has vendor support including: Latin America Poland Brazil 2600 2600 Dec-12 Dec-14  Ericsson, Huawei, NSN, ZTE, Alcatel-Lucent Middle East Saudi Arabia 2600 Dec-11 (infrastructure) North America US 2600 Dec-13  Qualcomm, ST-Ericsson, Altair, Sequans, ZTE Western Europe France 2600 Mar-13 (chipsets) Greece 2600 Mar-14  Nokia, Quanta, ZTE, Huawei, Coolpad (devices) Italy 2600 Dec-12 Portugal 2600 Jun-12 Spain 2600 Dec-12• China Mobile/Apple developing a TD-LTE iPhone. Source: Informa Telecoms & Media• Industry support for converged TDD/FDD LTE ecosystem. www.informatm.com 19 ©Confidential
    • LTE TDD: Tangible progress driven by China Mobilewith support from Vodafone and Verizon Source: China Mobile 2011 Interim Results presentation www.informatm.com 20 ©Confidential
    • Forecasts: Band/Mode fragmentation to make the LTEpicture even more complex in years to come Core band market share as a proportion of global addressable market, 2011 and 2016 Source: Informa Telecoms & Media *Core bands www.informatm.com 21 ©Confidential
    • Forecasts: Western Europe to exploit 2600MHz FDD butstrong growth in LatAm Global addressable market for 2600MHz FDD band, 2011-2016 Source: Informa Telecoms & Media Note: Figures refer to year-end www.informatm.com 22 ©Confidential
    • Forecasts: Most 700MHz FDD in North America,LatAm needs more clarity on digital dividend Global addressable market for 700MHz FDD band, 2011-2016 Source: Informa Telecoms & Media Note: Figures refer to year-end www.informatm.com 23 ©Confidential
    • LTE spectrum Initial findingswww.informatm.com 8/29/2011 24©Confidential
    • LTE Spectrum: Key findings (1)• Informa Telecoms & Media expects to see LTE adoption limited by spectrum fragmentation, which risks undermining the benefits this technology could offer. One of the main challenges here is to create economies of scale for enabling devices.• There will be a distinct regional focus in terms of which bands are adopted, but relative market shares among the core bands will change as the global addressable market expands, new spectrum is licensed and more operators re-farm legacy services to free up existing spectrum for LTE.• The high-end bands at 2300MHz and 2600MHz will address the largest market in terms of subscriptions over the forecast period, accounting for 44% of the total addressable market by 2016. www.informatm.com 29/08/2011 25 ©Confidential
    • LTE Spectrum: Key findings (2)• The 1800MHz band is attracting widespread interest for its combination of coverage and capacity, and is likely to see a high level of adoption in Western Europe and Asia Pacific.• The relative addressable market share of some bands associated with early launches of LTE, such as the 700MHz and 2100MHz bands, will be reduced over time.• The 900MHz band is losing out to the 800MHz band when it comes to LTE coverage.• In some markets new bands will appear, as in Japan where NTT DoCoMo expects to roll out LTE in the 1500MHz band from 2012, and in the US where Informa expects Sprint’s LTE rollout to boost the addressable market for the 800MHz band from 2013. www.informatm.com 29/08/2011 26 ©Confidential
    • Status quo of deviceswww.informatm.com 8/29/2011 27©Confidential
    • LTE devices: The size of the challenge is significant• Device vendors will have to offer LTE multiband devices in order to achieve global economies.• Mobile devices already support existing modes (e.g., four GSM/GPRS bands, one UMTS band, Wi-Fi/Bluetooth band and GPS). Adding more antennas is challenging in terms of industrial design.• Operators want to ensure that users can take advantage of LTE’s high bandwidth when the service is available to them and switch to legacy services in regions where there is no LTE coverage.• Device vendors will have to rationalize the number of LTE bands they want to support, in order to meet conditions of cost, power consumption and device size. www.informatm.com 29/08/2011 28 ©Confidential
    • LTE devices: Here they come Commercially-available todaySamsung Craft Samsung GT-B3710 Pantech UPL290 LG VL900 IP Wireless USB Samsung Galaxy modem Indulge And coming very soon… Questions •Battery life? •VoLTE handsets? •Spectrum bands? •Price points? Samsung i520 Motorola Droid HTC Thunderbolt Bionic www.informatm.com 29/08/2011 29 ©Confidential
    • LTE devices: Status as of 1H11• Majority of the services are accessible via portable routers, USB dongles, Wi-Fi routers and connected netbooks; only two are using smartphones and tablet devices.• 71 mobile device models announced so far: 52% support the 700MHz band 25% support the 2600MHz band 17% support the 1800MHz band 14% support the 800MHz band 11% support the 2100MHz band 11% support AWS 4% support the 900MHz band.• 57% of current LTE mobile devices are single LTE band, 17% are dual LTE band and only 26% are LTE tri-bands or more. www.informatm.com 29/08/2011 30 ©Confidential
    • LTE business modelsA global analysis of the go-to-market strategies of early LTE adopters www.informatm.com 8/29/2011 31 ©Confidential
    • Addressing the opportunity: Options for operatorswww.informatm.com 8/29/2011 32©Confidential
    • LTE opportunity: There are threats and opportunities torolling out LTE early www.informatm.com 33 ©Confidential
    • LTE roadmap: Operators are phasing LTE network rollouts, in line with previous strategic objectivesTeliaSonera’s LTE rollout road map Network rollouts are in line with strategic objectives, whether a rural rollout or targeting an improved experience for high-end urban users Verizon’s LTE rollout road map Vodafone Germany’s LTE road map, 2010-2011 www.informatm.com 34 ©Confidential
    • We can identify four different LTE operator types: 1) Opting into a global technology standard 2) Taking the early technology lead 3) New service model 4) Offering DSL-like services in rural areas www.informatm.com 35 ©Confidential
    • LTE operator type 1: Opting into a globaltechnology standard (Verizon Wireless)• Verizon must make a success of LTE if it is to be the strongest player in the US mobile broadband market.• It has fashioned a potentially significant advantage with an incredibly bold strategy that saw it become the first operator in the US to launch a large-scale LTE network.• The operator is aggressively encouraging take-up of 4G services and has taken the radical step of not charging a premium for LTE:• Verizon is trying to differentiate itself from its rivals by persuading the country’s increasingly data-hungry mobile users that it offers the best mobile broadband experience available. www.informatm.com 36 ©Confidential
    • LTE operator type 2: Taking the early technologylead (Telia Sweden)• TeliaSonera wanted to demonstrate technology leadership by claiming an industry first and, at the same time, reinforce its brand image for technology leadership in the Nordic markets where it launched.• By launching LTE first, TeliaSonera also wanted to gain an early lead in the market for LTE subscribers, targeting early adopters and certain segments of the enterprise market ahead of its rivals with the speed and latency improvements that LTE has over 3G.• Telia is also the only operator in Sweden to guarantee certain speed levels with 4G, which may be crucial to consumers that value quality rather than price when choosing a 4G provider. www.informatm.com 37 ©Confidential
    • LTE operator type 3: New model (network level)– Joint network (Net4 Mobility)• As for 3G (with Telia), Tele2 decided to link up with a competitor to roll out an LTE network, creating Net4Mobility, a 50/50 joint venture with No. 3 operator Telenor.• With this move Net4 Mobility wants to challenge TeliaSonera in the race to provide widespread LTE in Scandinavia.• Tele2 is upbeat on the prospects of users replacing fixed-broadband services with LTE. According to a survey Tele2 carried out, 50% of Swedes said that they would drop their DSL subscription and replace it with 4G. This is indicates that 4G can be priced as in competition with fixed broadband. www.informatm.com 38 ©Confidential
    • LTE operator type 3: New model (service level) –Wholesale (Cyfrowy Polsat)• There are currently more than 500 MVNOs in the world. Data MVNOs are likely to add significantly to this number with the rollout of LTE.• Polish DTH TV operator, Cyfrowy Polsat, is launching LTE mobile broadband via a jointly-run wholesale LTE network of Polish mobile operators, Mobyland and Centernet.• Cyfrowy Polsat is to offer LTE with its other bundled telecoms services as the technology will prove vital in fighting off competition from its rivals.• Cyfrowy Polsat has rolled out LTE in rural areas where fixed broadband penetration is low in order to get the lion’s share of Internet subscriptions.• Availability of LTE devices in 1800MHz is vital to drive the uptake of LTE mobile broadband. The operator has cleverly secured strong agreements with manufacturers to make dual-mode LTE and HSPA+ devices,incl. USB modems. www.informatm.com 39 ©Confidential
    • LTE operator type 4: Offering DSL-like services inrural areas (Vodafone Germany)• Because LTE offers excellent signal propagation in lower frequencies, some operators are focusing their initial LTE rollouts on rural areas.• Vodafone Germany, which had to launch LTE in rural areas first to meet licensing requirements, has launched LTE as a home-zone-only service in these areas to target households without any type of broadband connection. Vodafone Germany’s LTE roadmap, 2010-2011 www.informatm.com 40 ©Confidential
    • Marketing and pricing LTEwww.informatm.com 8/29/2011 41©Confidential
    • LTE marketing: No real surprises - 4G is thedominant marketing term of choice for LTE early adopters Region Country Operator Service brand Europe: Western Sweden Tele2 4G USA/Canada USA MetroPCS 4G LTE USA/Canada USA Verizon Wireless 4G LTE • Operators appear to be set on using 4G Asia-Pacific Japan NTT DoCoMo Xi (Crossy) as the marketing term of choice for LTE Europe: Western Denmark Telia Denmark 4G • 4G used to build upon the well- Europe: Western Finland Sonera 4G entrenched user understanding of 3G Europe: Western Norway Netcom Netcom 4G equating to faster mobile data speeds • Operators need to educate users of Europe: Western Sweden Telia Sweden Total 4G the benefits of “4G” to successfully Europe: Eastern Poland Mobyland 4G LTE establish a premium against other competing technologies Europe: Eastern Poland Centernet 4G LTE LTE - Turbo • Selling speed and technology, not Europe: Western Germany Vodafone Internet the experience www.informatm.com 29/08/2011 42 ©Confidential
    • LTE marketing: Operators are positioning the benefitsof LTE against their existing 3G networks Faster Faster uplink downlink Source: Telenor Sweden Always-on Low and stable latency connection Source: Verizon Wireless
    • LTE marketing: Theoretical speeds are very prevalent,but some operators are being more practical in theiradvertising Downlink Uplink Region Country Operator (Mbps) (Mbps)• LTE speed premium on the Europe: Western Sweden Tele2 Up to 80 Up to 40 downlink features heavily in Not Not USA/Canada USA MetroPCS communicated communicated marketing activities• Wide variations in speeds USA/Canada USA Verizon Wireless 5 to 12 2 to 5 advertised between early LTE Asia-Pacific Japan NTT DoCoMo Up to 37.5 Up to12.5 operators (from 12 to 80Mbps) Europe: Western Denmark Telia Denmark 35 14• Theoretical peak speeds are Europe: Western Finland Sonera 20 to 80 3 to 5 still being used, but some Europe: Western Norway Netcom 20 to 80 3 to 5 operators urge caution about Europe: Western Sweden Telia Sweden 20 to 80 3 to 5 average practical speeds Europe: Eastern Poland Mobyland Uo to 73 Up to 25 achieved Europe: Eastern Poland Centernet Up to 73 Up to 25 Europe: Western Germany Vodafone Up to 50 Up to 10 www.informatm.com 29/08/2011 44 ©Confidential
    • LTE marketing: “LTE services” are being positionedto target consumer and business segments Consumer segment Business segment Online gaming File transfers Video & File audio transfers streaming Real-time video Corporate VPN communications Video on demand www.informatm.com 29/08/2011 45 ©Confidential
    • LTE pricing: Early pricing for LTE data plans havedemonstrated a significant premium to 3G(+) Monthly price for selected LTE• LTE data plans are typically plans 100 priced at a large premium to Price per month ($) 90 existing mobile broadband tariffs 80 70 (3x in Sweden) 60 50• Average monthly charge is 40 30 approximately $60 with an 20 10 inclusive data cap of around 5Gb 0 MetroPCS MetroPCS MetroPCS Vodafone Vodafone Vodafone Vodafone Telia Sweden Tele2 Verizon Wireless Verizon Wireless Netcom• Prices as high as $90+ per Sonera NTT DoCoMo NTT DoCoMo Telia Denmark Telia Denmark month for some operators to experience full LTE benefits www.informatm.com 29/08/2011 46 ©Confidential
    • LTE pricing example: Verizon encourages high-endusers mobile data onto the LTE, and low-end users onto 3G Verizons LTE price plans (non-smartphone) compared with 3G price plans, 2Q10Over time, Verizon will introduce a usage-basedpricing model for LTE. There are many differentflavours of this, and Verizon says all options areunder consideration. Because it plans to offer alarge array of device types, Verizon says it willcharge a base rate for connecting a device to thenetwork and also charge for the amount ofbandwidth used. Source: Informa Telecoms & Media www.informatm.com 47 ©Confidential
    • LTE pricing: Examples of three different pricingapproaches:• Aggressive (Verizon Wireless) Signing up as many users as possible to 4G with 4G price plans price on a par with 3G. USB modems only available on 4G plans.• Cautious (Telia) Telia charges a 30-50% premium on a like-for-like monthly download allowance between 4G and 3G services. New pricing scheme in Sweden this August.• Conservative (Telenor) Price services higher than rivals to allow room for reductions while ensuring high-end users don’t churn to rivals (e.g., Telenor). www.informatm.com 48 ©Confidential
    • Evolution of LTE price plans: LTE offers more scopeto approach pricing from different angles than 3G Source: Informa Telecoms & Media www.informatm.com 49 ©Confidential
    • LTE business models Initial findingswww.informatm.com 8/29/2011 50©Confidential
    • LTE deployments are overwhelmingly targeted atreaching high-spending customers in urban areas• Regulation has been the only driver behind rural LTE Network deployment strategies of early LTE adopters deployments.• Even deployments using low- frequency spectrum bands (700, 9% 900) have targeted urban areas Urban-first initially. deployment Rural-first• High-frequency deployments (2.1, deployment 2.6) have focused exclusively on 91% urban areas and traffic hotspots.• Operators in all cases are planning major coverage expansion activities during 2011-2012. Source: Informa Telecoms & Media www.informatm.com 29/08/2011 51 ©Confidential
    • Video, including streaming and downloads, will drive thegreatest volume of traffic on LTE networks Which service or application will drive the greatest volume of traffic on LTE networks? (Informa survey) Source: Informa Telecoms & Media www.informatm.com 52 ©Confidential
    • Early signs reveals LTE is changing the usage behaviour of first users to migrate• TeliaSonera’s survey of its LTE user base revealed: – 90% of users upgraded from a 3G subscription – 54% would not consider returning to 3G – 65% of users acquired LTE as a complement to a fixed BB connection – 26% of users now work more on a mobile basis – 23% of users download large files more often – 16% of users browse the internet more often – Dongle users up to 17GB per month! www.informatm.com 29/08/2011 53 ©Confidential
    • LTE market: The transition to LTE will alter marketstructures Source: Informa Telecoms & Mediam, LTE Survey 2011, n=517 www.informatm.com 29/08/2011 54 ©Confidential
    • LTE early launches: What has worked and what hasn’tWhat works? What doesn’t?• Guaranteeing speeds (Telia in • Offering unlimited downloads from the Sweden does this and it provides outset. How can operators develop something tangible that users are their service offering from here? willing to pay for). • Charging too much of a premium• Having good coverage (Verizon unless an operator doesn’t want to Wireless offers this and is able to encourage user uptake. claim something approaching “nationwide coverage”). • Launching with a big fanfare and limited (or in the case of Globacom in• Targeting new user groups, e.g., rural Africa – no) network coverage. areas and new service models. The jury is still out on which pricing model works best www.informatm.com 55 ©Confidential
    • Informa viewpointwww.informatm.com 8/29/2011 56©Confidential
    • Informa viewpoint (1)• Even before international roaming between LTE networks becomes an issue, the need to support intra-regional and even within-country roaming will govern band selection as part of the necessary rationalization of bands supported by LTE devices. LatAm needs to encourage more consolidation and integration.• Devices are already coming to market but scale is needed to bring prices down. Handset manufacturer will not only need to support multi-mode but also to rationalise band selection.• Early global deployments show that FDD at present is prevalent ,but watch out for TD developments. Operators with TD spectrum can have international support (Vodafone, Verizon and China Mobile), meaning that roaming will work etc. 2012 is likely to see commercial momentum for TD.• LTE is a much more powerful tool than 3G. Operators should allow maximum flexibility in the overall LTE service bundle: pricing; data downloads; guaranteeing quality/ speed of service; charging different rates for different types of service area are all levers that operators should retain as much control as possible over. 29/08/2011 www.informatm.com 57 ©Confidential
    • Informa viewpoint (2)• Video will be a key driver of LTE uptake. Operators should consider how to communicate the benefits of video over LTE compared with video over 3G. LTE is a transformational technology, which is changing usage patterns and habits.• To date, operators are re-mapping their 3G strategy onto LTE. In Sweden, the only country where all 3 operators have launched LTE, we are seeing same competitive and market dynamics. However, LTE can be an opportunity to innovate business models.• Partnerships are at the core of new business models, either at service level (MVNOs) or at network level (network sharing). LatAm players have the opportunity to learn from early-adopters to decide whether LTE can represent an innovation beyond its pure technical merits(Orange and T-Mobile will share their LTE network in the UK). Operators should considert he potential for LTE partnerships in LatAm. 29/08/2011 www.informatm.com 58 ©Confidential
    • Informa T&M viewpoint (3)• Innovation also entails new pricing models. Pricing is the most important decision facing an operator and, after the timing of the launch, represents the biggest single factor in determining service uptake. Operators should avoid pricing LTE services expensively and without clarity, and ensure that they engage well with partners and potential partners.• Pricing and correct market positioning can make or break LTE mobile broadband offerings. Already operators are re-thinking the notion of access evolving from flat rates whereby customers are charged per MB or per hour, to pricing models whereby customers are charged by access to applications or clusters of applications. This new idea of “unlimited” plan, no longer means “unlimited traffic” but rather “unlimited access to what the client needs”.• Early adopters have primarily focused on covering densely populated and more affluent urban areas, but we are seeing increasing interest for LTE “DSL on the move” as an alternative to provide rural connectivity. Depending on local conditions (spectrum availability etc.) LTE-mobile broadband has scope in LatAm as an alternative to fixed line for rural connectivity. 29/08/2011 www.informatm.com 59 ©Confidential
    • Thank you!¡Gracias!Daniele TricaricoSenior Analyst, CALAInforma Telecoms & MediaEmail:daniele.tricarico@informa.comTwitter: @DTricarico29/08/2011