TD-LTE: Global Market Scenario - Sep. 2011

India – Pioneering TD-LTE Deployment WorkshopTD-LTE: Global Market ScenarioKunal Bajaj, Partner & Director India19th September 2011

2Contents Growth of Data Demand Role of LTE and Business Models Adoption of TD-LTE Challenges and Ecosystem Development Confidential

3Globally, mobile data traffic is likely to grow at a high rate due toadoption of high bandwidth services such as video Expected Global Mobile Data Traffic by Global Mobile Data Traffic Growth Application Category (2011 – 2015) (Petabytes per Month, 2011 – 2015) 66% 2,334 53% 1,676 29% 1,192 22% 835 12% 570 6% 5% 5% 1% 0% Data File sharing Video VoIP M2M 2011 2012 2013 2014 2015 2011 2015• Consumers are using mobile data for much more than just emails• Global mobile data traffic is expected to increase 4 times by 2015 Confidential Source: Analysys Mason, Cisco VNI Mobile 2011

4Data consumption will also be propelled by the introduction of newdevices which give better user experience over high speed networks Expected Global Growth in Mobile connections Tablets by Device Type (2011 – 2015)1 59% MobileeBook Connected TV 42% 30% 21% Smartphones Mobile IPTV -2% Portable Gaming Netbooks / Basic Mobile MBB Smartphones M2M Tablet Devices Laptops Phones Devices Devices• New form factors consume more data as well as provide a better experience on high D/L – U/L speeds• Large screen devices are ideal for video services and other high bandwidth applications Note: 1. Figures represents expected CAGR for different type of devices Confidential Source: Analysys Mason, Cisco VNI Mobile 2011

5 Global operators have not been able to meet the growing data demand through existing wireless technologies AT&T Mobile Data Volume Up 8,000% Increase in Capex of AT&T Mobility Over Last Four Years (PB/Month) (USD Billion) PB / Month12.0 31.9 8.0 20.1 4.0 0.0 2007 2008 2009 2010 2001 - 2005 2006 - 2010 • AT&T has witnessed about 80x increase in data traffic over the last four years after it launched the iPhone, primarily driven by enhanced browsing capability of iPhones along with increased usage of Apple app store • With expected 8x–10x mobile data volume growth over next five years, to support such data growth AT&T is planning to expand its LTE deployments to cover 95% US population by 2015 / 2016 Confidential Source: Analysys Mason, Company Website, News Articles

6In addition, the increase in mobile data traffic is not expected toresult in proportionate growth in revenues Comparison of the Network Economics of Mobile Networks Operators across the world are Discontinuation dropping their flat-rate plans as of Flat-rate Plans Traffic volume they are not sustainable Network cost Network costs outstrip revenue Operators are prioritizing Service services for high-end customers Revenue Prioritization to maintain QoS / end-users experience Operators in developed Limited Bundling markets are not aggressively Time of Large Screen offering smartphone type Devices bundling for large screen Dominated by Voice Dominated by Data devices such as tablets Confidential Source: Analysys Mason

8LTE is fast emerging as the technology of choice as it is wellpositioned to address the issues of capacity and network cost Global Commitments for Various Wireless Network Cost Per MB for Various Technologies (No. of Networks) Wireless Technologies (US cents per MB) 42.3 128 122 79 80 80 21.2 54 39 34 7.6 3.8 3.4 1.7 HSDPA HSUPA HSPA+ LTE GPRS EDGE WCDMA HSDPA HSPA+ LTE 6 Months after 1st Commercial Launch 12 Months after 1st Commercial Launch Cost per MB is falling significantly with technology evolution Confidential Source: Analysys Mason, GSA, Morgan Stanley

9However, LTE network deployment will differ across operatorsbased on their business model Evolution of LTE Roll-Out Under Various Business Models • An aggressive deployment with business rationale of offering premium service as well Ubiquitous as potentially reducing network cost 1 LTE • Typically, mobile-only operators (such as CSL in Hong Kong) are most likely to adopt 1 this approachPopulation coverage • Focused deployments to reduce network congestion and expand coverage over time 2 Hot-Zone in a managed tech migration path 2 LTE • Typically, integrated incumbents are most likely to adopt this approach 3 • Limited and selective deployments for use as a marketing message in branding next- LTE for generation capability to consumers 3 Time to deploy Marketing • Typically, spectrum-constrained operators (such as M1 in Singapore) are most likely to adopt this approach Confidential Source: Analysys Mason

11While FDD-LTE is being adopted globally, 75% operators are alsointerested in TD-LTE to utilize their allocated TDD spectrum Operator Attitude towards FDD and TDD LTE • In many countries, such as India, Sweden and (2010) Norway, TD-LTE spectrum (2.3GHz and 2.6GHz) Lead with TDD; Unlikely to has been auctioned recently. For some countries 4% use FDD across Europe, Asia and Latin America auctions Lead with TDD; Long term of 2.3GHz and 2.6GHz spectrum bands are 6% potential to introduce FDD planned over the next few yearsLead with TDD; Medium term potential to introduce FDD 9% • While in some countries (such as Taiwan) 2.3GHz / 2.5GHz technology neutral TDD FDD & TDD both deployed 12% within 3 years of each other spectrum has been allocated, and such operators are also expected to deploy TD-LTELead with FDD; Medium term 16% potential to introduce TDD • It is also expected that some of the WiMAX Lead with FDD; Long term 29% operators (such as Clearwire in US, Yota in potential to introduce TDD Russia, Vividwireless in Australia and Far Lead with FDD; Unlikely to 25% use TDD EasTone in Taiwan) will consider migrating to TD-LTE Note: 1. Based on survey conducted by HeavyReading among 102 mobile operators Confidential Source: Analysys Mason, Heavyreading

12This interest is driven by availability of unpaired & comparativelycheaper spectrum for offering mobile broadband services Availability of TD-LTE Spectrum Across Auction Price (USD / MHz / Pop) for the Globe Various Spectrum Bands1 UK (2000) 6.24 2.3 GHz (100MHz) Germany (2000) 5.95 Netherlands (2000) 3.48Key TD-LTE Italy (2000) 2.35 Spectrum 2.6 GHz (20 – 190MHz) Denmark (2001) France (2010) 0.65 0.96 Bands USA (2006) 0.61 Greece (2001) 0.57 3.4 – 3.6GHz (400MHz) France (2010) 0.53 Australia (2001) 0.48 Belgium (2011) 0.31 India (2010) 0.31 Poland (2000) 0.17 Germany (2010) 0.10 USA (2008) 0.08 Norway (2003) 0.07 USA (2008) 1.16 USA (2000) 0.60 USA (2005) 0.09 USA (2002) 0.06 USA (2003) 0.04 India (2010) 0.12 South Korea (2005) 0.08 Key TD-LTE Canada (2005) 0.02 Bands Denmark (2010) 0.18 Sweden (2008) 0.18 Norway (2007) 0.06 Germany (2010) 0.03 Band: USA (2009) 0.01 2600 2300 Norway (2008) 0.01 Finland (2009) 700 2100 0.01 Availability of 2.3 / 2.6 / 3.5 GHz Spectrum Note: 1. Figure in parenthesis indicate year of spectrum auction Confidential Source: Analysys Mason, NSN

13So far, only 3 commercial contracts for TD-LTE have been publicallyannounced, and they are mainly small scale and dual mode Publically Announced TD-LTE Commercial Contracts (As of August 2011) Operator Country Spectrum Band Description • Aero2 has already deployed FDD-LTE in the 1800MHz band and is now Aero2 2.5GHz and likely to be the first operator (globally) to deploy a commercial TD-LTE Poland 900MHz bands network (50MHz) • Huawei is expected to supply the end-to-end TDD-LTE EPC (Evolved Packet Core) solution. Commercial services to be launched in 2011 2.6GHz • Hi3G will be launching both FDD and TDD versions of LTE to maximize (50 MHz of TDD data throughput Sweden and Denmark spectrum in Sweden • ZTE has been selected to build the TDD/FDD LTE dual-mode network in and 25 MHz in both countries; commercial services are expected to be launched in 2011 Denmark) / 2012 • Expected to start offering TD-LTE based fixed wireless broadband services from 2012. NetComm will build the network for NBN using TD- 2.3GHz and LTE chips supplied by Sequans Communications Australia 3.4GHz • Plans to cover approximately 4% of the population outside the fibre footprint using TD-LTE network Confidential Source: Analysys Mason, News Articles

14In addition, there are ~32 trials that have been conducted globally,with most of these operators likely to deploy TD-LTE in near future Global TD-LTE Trial Networks (August 2011) TD-LTE Trial Networks TD-LTE Publicly Announced Commercial Contracts TD-LTE Trial Networks TD-LTE Publicly Announced Commercial Contracts• Largest deployments are in Asia by China Mobile, Reliance Industries and Softbank. They are expected to deploy TD-LTE in next 1 – 2 years• European operators with TDD spectrum (or in countries where TDD spectrum is likely to be auctioned in near future) are also interested in TD-LTE networks to augment capacity beyond current networks (3G / FDD-LTE) Confidential Source: Analysys Mason, GTI

15Anticipated scale from large planned deployments by China Mobileand Reliance are also driving momentum for TD-LTE China India• Large scale TD-LTE trials in 6 cities with • Performed TD-LTE field trial with Ericsson population greater than 100m each in both towards end 2010 in 2.3GHz. Invited major 2.3GHz and 2.6GHz bands vendors to demonstrate capabilities and talking• Commercial need for TD-LTE as the main data to tower companies to lease 60,000 towers technology due to the failure of TD-SCDMA • Announced commercial launch end 2011,• Main backer behind Global TD-LTE Initiative although it is likely that this could slip to 1H 2012 (GTI) to accelerate ecosystem and push for • Apart for Reliance, other BWA spectrum winners FDD/TDD interworking such as Airtel, Qualcomm, Tikona and Aircel are also reportedly planning to deploy TD-LTE• Expected large scale deployment in China and India will lead to increased momentum for making it a global standard apart from adding sufficient critical volumes for achieving the economies of scale• This has led to operators across the globe starting to consider TD-LTE as a solution to use already allocated TDD spectrum and address the growing mobile data demand Note: 1. xx Confidential Source: Analysys Mason, News Articles

16It is expected that India will have approx. 25 mn TD-LTE users by2016, primarily driven by low penetration of wireline infrastructureIndia TD-LTE Active Subscriber Projections India TD-LTE Rollout Timeline and Projections (Million, FY 2012 – 2016)1 25 Jan 11 Jun 11 Jan 12 Jun 12 Jan 13 Jun 13 Dec 13 Conducted field Commercial launch Already committed trail expected by to TD-LTE 11 in 2010 end 2011/2012 deployment Launch in Urban 4 TD-LTE handsets areas and restricted will be available - 1 to hotspots. Initial for large scale devices to be dongle2012 2013 2014 2015 2016 adoption. LTE roll based targeted out in rural areas towards enterprise not before 2014 and SMBs Note: 1. Figures are for Financial Year, e.g, 2015 figures represent data as of March 2015 Confidential Source: Analysys Mason

17In India, multiple technologies will co-exist with each playing animportant role in providing end-to-end service to consumers Role of Multiple Access Wireless Technologies in India Rural Areas Tier II / III Cities Metro / Tier I Cities Tier II / III Cities Rural Areas TD-LTE Expected primarily in top cities (Up to 100 Mbps) across the country Intermittent presence across Wi-Fi urban areas (emerging as a technology for data offloading) 3G Expected to cover entire urban (Up to 21.1 Mbps) areas by 2012 More than 90% 2G / 2.5G population (Up to 200 Kbps) coverage Confidential Source: Analysys Mason

19Maturity of the TD-LTE ecosystem will reduce the cost of networkdeployment as well as user terminal devices TD-LTE Initiatives by Various Technology Companies and OEMs • About 18 semiconductor companies / OEMs are investing in TD- LTE. Qualcomm has recently announced trial of a mobile processor with integrated modem for TD-LTE / FDD-LTE / EVDO / HSPA+ Chipset and technologiesTerminal Devices • Also, several terminal device vendors have started pre-commercial launch of TD-LTE based dongles as well as other devices such as handset, tablets and CPE • All the key equipment OEMs are investing in R&D for development of TD-LTE infrastructure equipment and solution. Most of these vendors are developing platforms that support both TDD and FDD Infrastructure versions of LTE Equipment • These vendors are already conducting trials along with the key operators that are planning to deploy TD-LTE (such as China Mobile, reliance Industries, Airtel and Softbank) to demonstrate the technology capabilities under various scenarios Confidential Source: Analysys Mason

20Dongle based TD-LTE service is likely to be launched initially, butwill evolve with technology maturity and launch of handsets Device Ecosystem Evolution for TD-LTE • It is expected that first TD-LTE services will be 2011 2012 2013 / 14 launched commercially by 1H 2012. Initial Data Card and CPE LTE Data LTE VoIP • The initial customer base will be enterprise, Devices / Tablets Smartphones Based Access SMB and individual segments in urban areas for dongle / modem based access on Data Only Data Only Data & VoIP PCs/laptops/netbooks • With the evolution of TD-LTE terminal device ecosystem and common FDD and TDD chipset Initial service Device OEMs to Ecosystem will platforms, device vendors such as Samsung arelaunch is expected launch tablets and evolve further toto be dongle based data devices support voice over expected to launch data handsets and tablets LTE (VoLTE) on that would help in targeting mass market Targeted primarily Targeted towards handsets in thetowards enterprise, individuals for on- next 2 to 3 years • Most operators will initially fall-back on 2G / 3G SMB & individual the-go data access technology for offering voice services to its users for data access customer. Voice over LTE will take a few years to develop Confidential Source: Analysys Mason

21Some other challenges will need to be addressed for large scaleadoption of TD-LTE • Operators will have to address the issue of interference within the TDD band that occurs as MNOs base stations are unsynchronised Interference • There is also interference between TDD channels assigned to different operators as a result of the transmit and receive timeslots not being synchronised • The TD-LTE ecosystem is not completely evolved and has limited equipment availability. This Device might lead to limited CPE / device flexibility among end-users Proliferation • GTI aims to support and promote the convergence of FDD and TDD variants to reach large economies of scale and global roaming, however this might take some time • Transitioning to voice over LTE will be important as voice is a hygiene service and will Voice over LTE continue to generate bulk of mobile revenue (~65% of total revenue in 2015) globally & Technology Handoffs • Handoffs between different technologies will be the key in providing seamless end-user experience Backhaul • As data takes off, bandwidth pressures will be felt in backhaul and transmission Enhancement • Operators need to invest and expand backhaul to provide good customer experience Confidential Source: Analysys Mason

22 Kunal Bajajkunal.bajaj@analysysmason.com Analysys Mason Limited BD-4th Floor, Big Jo’s Tower,Netaji Subhash Place, Pitampura New Delhi – 110034, India Tel: +91 (0)11 47003100 Fax: +91 (0)11 47003101 www.analysysmason.com Confidential

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TD-LTE: Global Market Scenario - Sep. 2011

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