Australian Mobile Australian Mobile Telecommunications AssociationTelecommunications Association

Productivity - Connectivity - Mobility

Mobile Broadband

A Key Economic Driver

Overview

• Broadband is the centrepiece of the digital age

• NBN in partnership with latest generation mobile telecommunications will drive our digital economy

•Aim to deliver - Productivity - Connectivity - Mobility

•Spectrum is critical mobile infrastructure

•What do Australian mobile operators need ?–retention of existing bands

–access to Digital Dividend (700MHz) and 2.5GHz

•The risk of indecision – Australia must keep up!

Latest data Latest data (June 30 2008)(June 30 2008)

Australian Communications and Media AuthorityAustralian Communications and Media Authority

• The number of 3G subscriptions grew by 88% in 2007-08 from 4.6 million to 8.6 million

• There were 22.12 million mobile phone services in Australia at June 30 2008, up from 21.26 million

• The welfare gained by customers (consumer surplus) from using mobile telecommunications services was $3,287.80 million compared to $317.50 million for internet services. The ACMA report says the majority of the increase in the consumer surplus is attributable to changes in the mobile telecommunications sector as prices fell and subscriber demand grew

• In estimating the consumer surplus for mobiles, ACMA calculated that mobile phone calls fell in price by 21.5% and the price of SMS/MMS decreased by 41.5%.

Economic Contributions of Mobile Telecommunications

Source: Access Economics 2008

$6.47 b

$7.73 b $14.20 b

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Direct Contribution Indirect Contribution Total Contribution

$ b

illi

on

Mobile Broadband - economic contribution

Current

• As at June 2008 there were an estimated 1m mobile broadband connections via fixed CPE, data card, USB modem, handset as modem or embedded connection*

Forecast

• Increasing take up of 3G data services will contribute an additional $2.1 billion to Australia’s economic input by 2010**

• Annual real household consumption will be 1.4% greater than it would be in a scenario without mobile broadband services^

• Real GDP increases by 0.9% more than it otherwise would without mobile broadband^

*3G in Australia: HSPA mobile broadband boom, Ovum, 10 November 2008

**Australian Mobile Telecommunications Industry: Economic Significance and Contributions, Access Economics, 2008

^ NextG Productivity Impacts Study, Concept Economics, 13 February 2009

Why mobile broadband will continue to drive productivity gains across all sectors of the Australian economy

Demand for Mobile Broadband – Fact or Fiction?

Source: Ovum RHK & Internal Ericsson

Mobile Broadband includes: CDMA2000 EV-DO, HSPA, LTE, Mobile WiMAX, OtherFixed broadband includes: DSL, FTTx, Cable modem subs and other

Broadband subscription forecast

Su

bsc

rip

tio

ns

(Mill

ion

s)

2005 2006 2007 2008 2009 2010 2011 2012

Fixed

Mobile

0

300

600

900

1200

1500

1800

2100

Mobile Broadband 2/3 of all subscriptions by 2012

Top right corner for field-mark, customer or partner logotypes. See Best practice for example.

Slide title 40 pt

Slide subtitle 24 pt

Text24 pt

Bullets level 2-520 pt

2009-06-022

~2014

~1000 Mbps

Operator dependent

Operator dependent

Today, most regional areas have access to average 8Mbps services with HSPA+

TechnologyMobile Broadband speed evolution

HSPA+

LTE

LTE - Advanced

2010

~150 Mbps

10-100 Mbps

5-50 Mbps

2009

42 Mbps

1-10 Mbps

0.5-4.5 Mbps

Market impact

Peak rate

Typical user rate downlink

Typical user rate uplink

Global Spectrum Demand Forecast 2010 - 2020

Today:

380 MHz

3.6 GHz:125 MHz

2.5 GHz:

190 MHz

700 MHz:

126 MHz

M.2078:840 MHz

793 MHz

M.2078:1300 MHz

919 MHz

M.2078:1720 MHz

??

2010 2015 2020

Au

stra

lia

Dec 2013* For Tier 1 national markets

2.3 GHz:98 MHz

Sp

ectr

um

ban

dw

idth

2G

& 3

G

3

G,

HS

PA

& L

TE

3G

& H

SP

A

LT

E &

4G

3G

& L

TE

e

volv

ing

to

4G

Source: ITU-R Report M.2078 (2007) Demand Forecast 2010-2020

Retention of existing bands

No guarantee that incumbents will retain

use of existing spectrum licences

Incumbent spectrum licences in 800MHz,

1800MHz and 2100MHz expire from

2013 -17

Impacting investor confidence in next

generation networks

‘AMTA supports the Minister making a determination

under s.82(3) of the Radcoms Act 1992 that

mobile telecommunications – including future mobile

broadband services are a class of services where

reissuing spectrum licences to incumbents is in the public

interest’

Getting the most out of the digital dividend

• Research shows that the Australian Economy will be $7 to $10 billion better off if the Government unlocks the full potential of the digital dividend to support both broadcast and mobile use*

•Spectrum Value Partners, ‘Getting the Most out of the Digital Dividend’, April 2009

‘AMTA considers that demand for mobile broadband will require at least 120+MHz of usable UHF spectrum to be allocated

to the mobile industry’*^

• Support for allocation of the Digital Dividend for mobile broadband use avoids Australia being isolated from the emerging global band plan

5

6

7

8

9

10

40 MHz 60 MHz 80 MHz 100 MHz 120 MHz 140 MHz

1. Mobile ubiquitous / FTA market conservative

2. Mobile ubiquitous / FTA market aggressive

3. Mobile complementary / FTA market aggressive

4. Mobile supplementary / FTA market conservative

- UHF value maximised

UHF spectrum allocated to mobile broadband (MHz)

Net

val

ue

add

ed (

$b

n)

Getting the most out of the digital dividend

Reallocation of 2.5 GHz for mobile use

•2000

•2008

•2009

•2010 >

• International agreement on International Mobile Telecommunications (IMT) use reached

• Universal international roaming band for LTE

• “This is not a healthy environment for business investment” Senator Conroy, RadComs, 2008

• Govt announced ‘way forward’ - limited progress

• No certainty - LTE deployment, ENG redeployment

• Roll out plans from 2010 (US) - many other countries 2011 - 2013

Australia urgently needs conformity with global band plan

SummarySummary

• Mobile demand growth (3G) strong and prices falling – ACMA

• Mobile economic contribution – direct and indirect – Access

• Mobile Broadband – productivity enabling technology

• Global and local demand for mobile broadband on the rise

• Technology pathway – speed and capacity evolution

• New spectrum allocations – critical future infrastructure

• Key spectrum issues;

– Retention of existing bands – re-issue licences

– Digital Dividend (700MHz) – unique opportunity - $7 - $10 billion from optimal allocation – latest research

– 2.5GHz spectrum band key to 4G and beyond

• Australia must keep up.