Cellular Backhaul @5G World

Lluc Palerm Serra

June 2019

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2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028Delta

Net Growth

Capture

NAM 1.22% 1.60% 2.06% 2.60% 3.14% 3.59% 3.88% 4.04% 4.16% 4.36% 4.39% 3.2% 22.97%

LAM 4.30% 4.99% 5.45% 5.97% 6.29% 6.47% 6.33% 6.17% 5.90% 5.63% 5.37% 1.1% 7.15%

WEU 0.48% 0.76% 1.05% 1.39% 1.74% 1.96% 2.13% 2.24% 2.34% 2.44% 2.49% 2.0% 14.37%

CEEU 0.66% 0.78% 0.95% 1.15% 1.40% 1.68% 1.92% 2.13% 2.27% 2.37% 2.44% 1.8% 11.36%

MENA 1.85% 1.85% 1.89% 1.95% 2.03% 2.14% 2.27% 2.42% 2.62% 2.94% 3.20% 1.3% 6.94%

SSA 5.85% 5.98% 6.13% 6.28% 6.44% 6.61% 6.80% 7.00% 7.19% 7.31% 7.52% 1.7% 8.90%

ASIA 1.06% 1.24% 1.43% 1.66% 1.87% 2.07% 2.28% 2.40% 2.55% 2.78% 2.96% 1.9% 9.04%

TOTAL 1.48% 1.72% 1.96% 2.23% 2.49% 2.72% 2.91% 3.04% 3.18% 3.39% 3.54% 2.1% 9.50%

Note: % of In-Service Units

Source: NSR

• Expanding Satcom’s footprint in the telecom ecosystem• Satellite’s share will more than double in the next 10 years.

Satellite Backhaul Becoming Mainstream

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Satellite Backhaul Share

© 2019 Northern Sky Research – NSR.com

• Trends converging for this market to take off

• Negative Satcom perceptions and educating MNOs on the new capabilities key to unlock growth

The Pieces of the Puzzle Are Coming Together

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Deeper Integration in the Telecom Ecosystem

•Key role in extending broadband coverage

•Demand Elasticity•Emerging new use cases•End-to-end services

Demand Drivers

•Seeking new sources of revenue

•Focus on core services•Minimize CAPEX and Risk exposure

•Expansion of Broadband

Infrastructure Drivers

•Competitive Capacity Pricing•Advanced Ground Segment•Terrestrial Backbone Saturation•Low-end Mobile Radios

© 2019 Northern Sky Research – NSR.com

• Satellite is the most cost-effective option when there is no direct line of sight

• As Satellite TCO continues declining, the crossover point at which Satellite is more cost effective than terrestrial grows rapidly

• Data traffic is highly concentrated. Improving the crossover point will significantly expand the market capture

Satellite (Finally) Has a Compelling Product

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© 2019 Northern Sky Research – NSR.com

• Installed base will grow at double-digit rates over the next 10 years.

• 2G/3G still dominate the installed base, but 4G starts generating the highest installs.

• Regardless of 5G, 4G will pay the bills for the next 10 years

Backhaul Is a Key Driver For Satellite Industry Growth

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© 2019 Northern Sky Research – NSR.com

• Expansion of the installed base and adoption of Broadband services drive exponential capacity demand growth.

• Satellite needs to do a better job in adjusting pricing to meet real market needs.

• MNOs are de-investing in non-core assets and focusing on Urban areas. Growing demand for Network-as-a-Service solutions into rural areas.

Looking Beyond Capacity Leases

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2018 2028

104.3 Gbps

3,2

03.2

Gbp

s

X30.7

Data Traffic

in 10 years

© 2019 Northern Sky Research – NSR.com

• Being part of the mainstream telecom ecosystem

• Satellite needs to be a transparent and very easy to adopt solution

• 4 core segments: Backhaul, Trunking, Mobility & Hybrid Networks

• 1 of every 3 new $ in capacity revenues for Backhaul will come from direct 5G apps

Integrating Satellite into 5G

10

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

USD

Mill

ion

s

Satellite Backhaul: Capacity Revenues Breakdown

Non-5G Capacity Revenues 5G Capacity Revenues

Source: NSR

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