Mobile broadband demand is increasing rapidly in emerging markets due to growing internet and smartphone usage. However, providing quality mobile broadband will be challenging in these markets. Network quality will likely be lower due to higher population densities requiring the same or less spectrum per operator. This will result in fewer kilohertz available per customer and lower speeds, especially at the edge of cells. Pricing will also impact demand, with prepaid plans generating much higher usage than contract plans. The customer experience of mobile broadband in emerging markets may not match that of developed markets due to worse network quality and pricing structures unless substantial network investments are made.

1. Mobile broadbanddemand in emergingmarkets … will itbecomparabletodevelopedmarkets? WiMAX Forum Global Congress 2010, Amsterdam 17th June 2010.Dr. Kim Kyllesbech LarsenInternational Network Economics,Technology, T-Mobile

2. 17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.2Changing market - tomorrow’s world.Social trends and technological indicators.25+ mn Mobile-TV users in APAC1.60+ bn internet users.350+ mn active users.65+ mn mobile users.2.5+ bnphotouploads /month$4.5+ bn mobile gaming revenue3+ bn iPhone Appsdownloads.20+ hrs video uploads / day4.1+ bn mobile users.250+ bn e-mails per day.40+% more than 5 MB.400+ mn registered users. 86+ mn active ebay usersDigitizeSocializeIndividualizeAll IP … All DigitalNetworking and SharingMy-tech NOT Hi-tech

3. Mobile broadband traffic demand is turning red hot. Today’s volume distributionVolume distribution 2020+>>Bytes1100+ (CAGR 50% pa)Bits per second1300+ (CAGR 70% pa)17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.3

4. Asia emerging growth markets 2014 … broadband everywhere? for everyone?1 out of 2 house-hold has a PC.Pop3.2bnMore 60% by 2016.HH0.8bn1 out of 4 house-hold has (fixed) broadband.PC12% 1 in 3 by 2016.M&WBB7%1 out of 14 people will have mobile broadband.1 in 7 by 2016.Considering: China, India, Indonesia, Malaysia, Philippines, Thailand, Vietnam.17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.4

5. Emerging growth market’s mobile broadband quality will be difficult (or very costly) to match to western market’s QoS.IllustrationDelhiAmsterdam2.2 mn pop & 1,200 pop per km2Min. 2×10 MHz @ 2.1 GHz19 mn pop & 12,000 pop per km22×5 MHz @ 2.1 GHz / 1×20 MHz @ 2.3 GHzCoverage requirement 500 (2.1 GHz) to 650 (2.3 GHz)7 kHz to 13 kHzper MBB customer 1100 kHz per MBB customer 11 25% marketshare and 20% mobile broadbandpenetration.17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.5

6. Mobile broadband quality depends (roughly) on distance to cell center, demand density and available bandwidth. IllustrationDL powerQuality (speed, capacity, latency, …)2.1 – 2.6 GHz900 MHzUL powerCell range17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.6

7. The wired, the wireless and the mobile broadband.100+Illustration: relative usage70↑+2011/3Mobile broadband850 MHz – 2.1 GHzBWA2.3 – 2.5+ GHzFixedwithWiFiMobile broadband: hardly any QoS pricing mainly based on volumetric FUP. Wireless & Fixed Broadband business model uses QoS-based pricing.17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.7

8. Devices with a supporting web-based service ecosystem generates substantially more traffic than “normal handsets”Terminal distributionCorresponding volume17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.8

9. Need for speed depends on terminal device, price plan and supporting service ecosystems, e.g., Apps store, iTunes, p2p..IllustrationIncreasinglatencyrequirementsIncreasingbandwidth and volumetricdemand17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.9

10. Streaming takes up 60% of mobile user generated http traffic. URL distributionCorresponding volume per URLNote: abovedistributions do notinclude peer-2-peer traffic.17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.10

11. Device performance drives mobile broadband usage.Illustration: relative volume-based usage versus device (& network) performance. > 20+%3Gs: CPU ARM 600MHz (HSPA7.2Mbps)3G: CPU ARM 412MHz (HSPA 3.6 Mbps)2G: CPU ARM 412 MHz (EDGE 0.237 Mbps) 11 EDGE only market data17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.11

12. Mobile broadband usage versus pricing.Illustration: Volumetric demand versus price planVolumetricdemand34 ×low mobile×34×12×8×216 × low mobilePrepaid mobile ×0.2 of low mobile (contract).Prepaid laptop ×5.5 of low mobile (contract).17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.12

13. Available speed (per customer) is a function of distance from cell center and active customer density within cell.IllustrationDL powerPeak speed Average speedSpeed @ Cell egde and beyondUL powerCell range17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.13

14. Emerging market broadband … “happy” short-term, a tougher future. Tougher future … QoS limitations.Dramatic Hz per customer drop!Relative quality dropsHigh investment level required to maintain quality.Happy start … plenty of quality.Lots of Hz per customer!Good quality.Re-use site-grid or Greenfield with relative low TCO levels.17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.14

15. 17 June 2010Kim Kyllesbech Larsen, Technology - T-Mobile.15The emerging market mobile broadbandcustomer experience will depend on network quality, pricing and device portfolio (prepaid dominated?).demand density per available Hz is likely to be much highercompared to western markets customer is likely to experience worse broadband qualitycompared to that of developedmarkets.

16. 16/06/201016Thankyouverymuch!Acknowledgementgoesto Miruna Anăstăsoaie, Veli-Pekka Kröger and Minoo Abedi.Contact:kim.larsen@t-mobile.nlTel: +31 6 2409 5202http://nl.linkedin.com/in/kimklarsen