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  • TD-LTE: Global Market Scenario

    Kunal Bajaj, Partner & Director India

    India – Pioneering TD-LTE Deployment Workshop

    19th September 2011

  • 2

    Confidential

    Growth of Data Demand

    Role of LTE and Business Models

    Adoption of TD-LTE

    Challenges and Ecosystem Development

    Contents

  • 3

    Confidential

    Globally, mobile data traffic is likely to grow at a high rate due to

    adoption of high bandwidth services such as video

    Global Mobile Data Traffic Growth (Petabytes per Month, 2011 – 2015)

    Source: Analysys Mason, Cisco VNI Mobile 2011

    570

    835

    1,192

    1,676

    2,334

    2011 2012 2013 2014 2015

    Expected Global Mobile Data Traffic by Application Category (2011 – 2015)

    29%

    12%

    53%

    1% 5%

    22%

    6%

    66%

    0% 5%

    Data File sharing Video VoIP M2M

    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

  • 4

    Confidential

    Data consumption will also be propelled by the introduction of new

    devices which give better user experience over high speed networks

    eBook

    Smartphones

    Portable

    Gaming

    Devices Netbooks /

    Laptops

    Mobile IPTV

    Mobile

    Connected

    TV

    Tablets

    Source: Analysys Mason, Cisco VNI Mobile 2011

    Note: 1. Figures represents expected CAGR for different type of devices

    Expected Global Growth in Mobile connections by Device Type (2011 – 2015)1

    -2%

    21%

    30%

    42%

    59%

    Basic Mobile Phones

    MBB Devices

    Smartphones M2M Devices

    Tablet

    • 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

  • 5

    Confidential

    Global operators have not been able to meet the growing data

    demand through existing wireless technologies

    Source: Analysys Mason, Company Website, News Articles

    AT&T Mobile Data Volume Up 8,000% Over Last Four Years (PB/Month)

    0.0

    4.0

    8.0

    12.0

    2007 2008 2009 2010

    PB / Month

    Increase in Capex of AT&T Mobility (USD Billion)

    20.1

    31.9

    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

  • 6

    Confidential

    In addition, the increase in mobile data traffic is not expected to

    result in proportionate growth in revenues

    Comparison of the Network Economics of Mobile Networks

    Source: Analysys Mason

    Time

    Traffic volume

    Network cost

    Revenue

    Dominated by Data

    Network costs outstrip revenue

    Dominated by Voice

    Operators are prioritizing

    services for high-end customers

    to maintain QoS / end-users

    experience

    Operators in developed

    markets are not aggressively

    offering smartphone type

    bundling for large screen

    devices such as tablets

    Operators across the world are

    dropping their flat-rate plans as

    they are not sustainable

    Discontinuation

    of Flat-rate Plans

    Service

    Prioritization

    Limited Bundling

    of Large Screen

    Devices

  • 7

    Confidential

    Growth of Data Demand

    Role of LTE and Business Models

    Adoption of TD-LTE

    Challenges and Ecosystem Development

    Contents

  • 8

    Confidential

    LTE is fast emerging as the technology of choice as it is well

    positioned to address the issues of capacity and network cost

    Source: Analysys Mason, GSA, Morgan Stanley

    Global Commitments for Various Wireless Technologies (No. of Networks)

    79

    34 39

    80

    122

    54

    80

    128

    HSDPA HSUPA HSPA+ LTE

    6 Months after 1st Commercial Launch

    12 Months after 1st Commercial Launch

    Network Cost Per MB for Various Wireless Technologies (US cents per MB)

    42.3

    21.2

    7.6

    3.8 3.4 1.7

    GPRS EDGE WCDMA HSDPA HSPA+ LTE

    Cost per MB is falling significantly with

    technology evolution

  • 9

    Confidential

    However, LTE network deployment will differ across operators

    based on their business model

    Source: Analysys Mason

    Evolution of LTE Roll-Out Under Various Business Models

    • Focused deployments to reduce network congestion and expand coverage over time

    in a managed tech migration path

    • Typically, integrated incumbents are most likely to adopt this approach

    • Limited and selective deployments for use as a marketing message in branding next-

    generation capability to consumers

    • Typically, spectrum-constrained operators (such as M1 in Singapore) are most likely

    to adopt this approach

    • An aggressive deployment with business rationale of offering premium service as well

    as potentially reducing network cost

    • Typically, mobile-only operators (such as CSL in Hong Kong) are most likely to adopt

    this approach

    Ubiquitous

    LTE

    Hot-Zone

    LTE

    LTE for

    Marketing

    1

    2

    3 Time to deploy

    P o

    p u

    la ti

    o n

    c o

    v e ra

    g e

    1

    2

    3

  • 10

    Confidential

    Growth of Data Demand

    Role of LTE and Business Models

    Adoption of TD-LTE

    Challenges and Ecosystem Development

    Contents

  • 11

    Confidential

    While FDD-LTE is being adopted globally, 75% operators are also

    interested in TD-LTE to utilize their allocated TDD spectrum

    Note: 1. Based on survey conducted by HeavyReading among 102 mobile operators

    Operator Attitude towards FDD and TDD LTE (2010)

    Source: Analysys Mason, Heavyreading

    25%

    29%

    16%

    12%

    9%

    6%

    4%

    • In many countries, such as India, Sweden and

    Norway, TD-LTE spectrum (2.3GHz and 2.6GHz)

    has been auctioned recently. For some countries

    across Europe, Asia and Latin America auctions

    of 2.3GHz and 2.6GHz spectrum bands are

    planned over the next few years

    • While in some countries (such as Taiwan)

    2.3GHz / 2.5GHz technology neutral TDD

    spectrum has been allocated, and such

    operators are also expected to deploy TD-LTE

    • It is also expected that some of the WiMAX

    operators (such as Clearwire in US, Yota in

    Russia, Vividwireless in Australia and Far

    EasTone in Taiwan) will consider migrating to

    TD-LTE

    Lead with TDD; Unlikely to

    use FDD

    Lead with TDD; Long term

    potential to introduce FDD

    Lead with TDD; Medium term

    potential to introduce FDD

    FDD & TDD both deployed

    within 3 years of each other

    Lead with FDD; Medium term

    potential to introduce TDD

    Lead with FDD; Unlikely to

    use TDD

    Lead with FDD; Long term

    potential to introduce TDD

  • 12

    Confidential

    This interest is driven by availability of unpaired & comparatively

    cheaper spectrum for offering mobile broadband services

    Note: 1. Figure in parenthesis indicate year of spectrum auction

    Availability of TD-LTE Spectrum Across the Globe

    Source: Analysys Mason, NSN

    Auction Price (USD / MHz / Pop) for Various Spectrum Bands1

    Availability of 2.3 / 2.6 / 3.5 GHz Spectrum

    Key TD-LTE

    Spectrum

    Bands

    2.3 GHz (100MHz)

    2.6 GHz (20 – 190MHz)

    3.4 – 3.6GHz (400MHz)

    0.01

    0.01

    0.01

    0.03

    0.06

    0.18

    0.18

    0.02

    0.08

    0.12

    0.04

    0.06

    0.09

    0.60

    1.16

    0.07

    0.08

    0.10

    0.17

    0.31

    0.31

    0.48

    0.53

    0.57

    0.61

    0.65

    0.96

    2.35

    3.48

    5.95

    6.24

    Finland (2009)

    Norway (2008)

    USA (2009)

    Germany (2010)

    Norway (2007)

    Sweden (2008)

    Denmark (2010)

    Canada (2005)

    South Korea (2005)

    India (2010)

    USA (2003)

    USA (2002)

    USA (2005)

    USA (2000)

    USA (2008)

    Norway (2003)

    USA (2008)

    Germany (2010)

    Poland (2000)

    India (2010)

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