Which are the most successful LTE operators to date, and why? How have they positioned LTE to drive customer uptake? Which pricing and value propositions are working in the market and which aren’t? What strategies are operators adopting for voice over LTE? How can operators maximize the value of their LTE investments? How have different operator strategies influenced LTE subscription uptake? How are consumers using LTE? How much data are they consuming and what apps are driving growth?

1. LTE launch strategies
What’s working and what isn’t
London, 2-3pm GMT, 29 November 2012
Paul Lambert Thomas Wehmeier
Senior Analyst Principal Analyst
Operator Strategy Operator Strategy

2. LTE is at the top of everyone’s priorities
What will be the single most important area of focus Which technologies and strategies will drive profitable
for telecoms and TV operators in 2013? top-line growth in your organization in 2013?
Network deployments and 4G / LTE
developments (NGN and LTE) Cloud computing
Superfast fixed-line broadband
Customer experience
management Apps and app stores
Converged billing
New digital service developments
(digital services) On-demand video
Machine to machine (M2M)
Efficiencies, cost control and best Multiscreen video
practice
Wi-Fi
Partnerships with other High-definition video
operators and Internet players
Ethernet
SDN
Other (please specify)
Other (please specify)
0% 5% 10% 15% 20% 25% 30% 0% 10% 20% 30% 40% 50% 60% 70%
% of respondents % of survey respondents
Source: Informa’s Industry Outlook Survey 2013, Oct 2012, CSP respondents only, n=280
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3. Where is LTE today? LTE connections by geography, 3Q12
• 111 live networks in 50+ countries ~90% of total global
connections
• Reaching more than 0.5 billion people
• ~50 million connections to LTE networks
• Over 550 LTE-enabled devices, according to GSA
Global commercial LTE network deployments, Nov 2012 Number of LTE-enabled smartphones by operator, Nov 2012
Source: Informa Telecoms & Media

4. Which operators have had the most success?
Top 10 largest LTE operators by connections, 3Q12 • Not charging a premium for LTE
over 3G is used by some of the
Operator LTE connections % of total base Current premium v 3G (%)* most successful LTE operators,
Verizon Wireless 14.9m 13 0
measured by subscriptions.
NTT DoCoMo 6.2m 10 0
• Main strategic LTE tariffing
SK Telecom 5.7m 21 0 choice facing operators is: charge
AT&T Mobility USA 5.1m 5 0 a premium over 3G (if so, how
LG U+ 3.6m 36 0 much?) or price LTE on a par with
KT Corp 2.5m 15 0 3G?
Metro PCS 1.1m 1 0
• LTE operators that charged a
Rogers Wireless 0.8m 8 0
clear premium over 3G are
Yota 0.7m 100** n/a
adjusting their prices to bring
Telstra 0.6m 4 0 them in line with 3G rates.
*Lowest-priced LTE monthly subscription compared with lowest price 3G subscription
**LTE-only network operator
Source: Operators, Informa Telecoms & Media
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5. Ready, set, go. When’s the right time to launch?
External factors driving launch timings Key “business case” drivers
• Spectrum acquisition • Increase total bandwidth availability
• Spectrum refarming & liberalisation • Improve customer experience
• Technology leadership & 1st-mover adv • Lower the cost of data delivery
• Technology transitions (CDMA, WiMax) • Alleviate traffic bottlenecks
• Government stimulus • Drive customer upsell (ARPU accretion)
• Competitive dynamics • Differentiate proposition and grow share
• Vendor push & lemming mentality • Open up new revenue streams
• LTE ecosystem maturity • Enhance competitive positioning
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6. Is there a “smart follower” advantage?
Mature device Network stability & Understanding of
ecosystem reliability usage patterns
Pricing & Voice over LTE Advances in LTE
positioning clarity maturing roaming
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7. What are the lessons learned in how to position
and market LTE to consumers?
Source: AT&T
Speed What can users DO with 4G?
Coverage What are the end-user benefits?
Latency demos on operator websites How will their experience change?
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8. Are any “LTE services” emerging?
Viewdini
Verizon Wireless (US)
Popular services used to promote LTE benefits
Consumer Business
High-definition video High-speed file
Download
streaming and VoD transfers
Personal content
Enterprise cloud
EE Film Upload sharing; consumer
cloud applications
applications
EE (UK)
Online gaming; real- Real-time voice and
Latency time voice and video video communications;
communications corporate VPN
Source: Informa Telecoms & Media
joyn
MetroPCS (US)
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9. Voice “for” LTE, VoLTE & the prospects for voice revenues
Selected early conclusions on voice for LTE Live VoLTE deployments VoLTE branding in Korea
• User perception of interim voice for LTE solutions has • SK Telecom (Korea), August 2012
been “surprisingly” positive • LGU+ (Korea), August 2012
• MetroPCS (US), August 2012
• Clear evidence of a shift to unlimited voice, e.g
Verizon Wireless, EE, Swisscom
• There is a deep level of scepticism about the ability to Potential scenarios for voice
monetise VoLTE/RCS
Best case scenario
• “Rich” and “HD” voice services are “table stakes”, not •Operators will be able to charge a premium for VoLTE/RCS services
•Operators will begin to win-back traffic lost to alternative providers
premium services •Operators will see some incremental increases in voice revenues
Worst case scenario
• The “business case” for VoLTE appears to be based
•VoLTE/RCS will have no impact on traffic erosion to alternative providers
primarily on spectrum usage efficiency •Operators will be unable to charge any premium and prices will continue to decline
•Voice revenue declines will continue and, potentially, accelerate
• Operators are generally committed to VoLTE, but will Likely scenario
not feel rushed to launch •VoLTE/RCS will help slow the decline of traffic loss to alternative providers
•Operators will not be able to charge any premium
•Voice revenues will continue to decline, but at a slower rate
• Operators that begin to approach nationwide
coverage will move quickest to VoLTE
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10. How are consumers using LTE? How much data
are they consuming?
• LTE users consume 2-5x • Customers on Vodafone’s • LTE accounts for 35% of
more data than 3G users fixed-broadband total data traffic
replacement service use
• LTE accounts for 10% of 11.5-12GB per month • LTE will surpass 3G traffic in
traffic despite early 2013
• Users on MetroPCS • LTE smartphone users • LTE smartphone users
unlimited LTE data plans consume ~50% more data consume 8x more data
consume 2-2.5GB on versus 3G smartphones compared to 3G users
average per month
• Average monthly LTE
smartphone usage is 1.6GB
vs 1.1GB on 3G
Source: All data as reported by operators directly
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11. Concluding remarks
LTE is an evolution, not a revolution
Focus marketing on tangible benefits
Align all functions internally around the launch
Price LTE for the mass-market
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12. How can Informa Telecoms & Media help you to
develop your LTE strategy?
Understand Build Monetise
Business case Pricing
Market status
modelling strategy
Future market Technology Segmentation
scenarios strategy strategy
M2M &
Business Go-to-market
wholesale
models strategy
strategy
Risk-reward Device Roaming
analysis strategy strategy
Further reading
Free white paper: http://www.informatandm.com/wp-content/uploads/2012/07/Successful-LTE-strategies-white-paper.pdf
Premium analysis: https://commerce.informatm.com/reports/successful-lte-strategies.html
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13. Thank you.
Paul Lambert Thomas Wehmeier
Senior Analyst | Operator Strategy Principal Analyst | Operator Strategy
@lambertpaul @twehmeier
paul.lambert@informa.com thomas.wehmeier@informa.com