© Copyright All Rights Reserved 2012 Maravedis Inc.

Adlane Fellah CEO Maravedis

Cintia Garza LATAM Analyst Maravedis

Luis Omar Rivera Director Network Engineering Open Mobile

4G Webinar 4G Latin America: Carrier Strategies

August 2012

Agenda

- Introduction

- Maravedis Presentation

- Cintia Garza, Latin America Analyst

- Open Mobile Puerto Rico Presentation

- Luis Omar Rivera, Network Engineering Director

- Q&A

August 2012

4G Latin America: Analysis and Forecasts 2012-2017

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AGENDA

Key Findings

Spectrum Policy

Challenges

LTE Business Case

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Market Drivers Challenges Forecasts

KEY FINDINGS

Smartphones Applications Smartphones

Low cost of Devices Demand

Broadband Penetration Voice over LTE

Spectrum

Monetizing Increasing Demand

Low ARPU High Prepaid Low Postpaid

High Churn Availability of Spectrum(in

some countries)

Subs, Devices & CAPEX

51 million subscribers by 2017.

4G CAPEX to reach an accumulated $13 billion by

2017.

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80% Telecom Revenues

72% Mobile Subscribers

SPECTRUM POLICY

450MHz

700 MHz

1.7/2.1GHz MHz

2.6GHz MHz

3.5GHz MHz

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$11.56 20% 80% 3.02%

ARPU Postpaid Prepaid Churn

70%

CHALLENGES

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UNE - Colombia LTE BUSINESS CASE

DSL, WiMAX LTE

Fixed Mobile

3.5GHz (50MHz) 2.6GHz (50MHz)

Nationwide Nationwide

Convergent Offer (2 & 3 Play)

What are they doing?

Data Data & VoLTE

Strengths Main ISP in Colombia.

Comprehensive service offering.

Various technologies to serve the end-user.

LTE time to market advantage over mobile carriers.

Serves all market segments: Residential, SOHO, business, large corporations.

Access to both FDD and TDD spectrum 2.6GHz and 3.5GHz.

Weaknesses UNE does not have 3G mobile

infrastructure in place.

UNE does not have 3G spectrum.

Unable to do 3G fallback for voice.

Initial LTE offer only includes a USB dongle.

Opportunities UNE can become the main and sole LTE

provider for Soho, SME and large corporations in Colombia.

Opportunity to add mobile TV on LTE.

It is the only WiMAX carrier in Colombia, opportunity for TD-LTE in 3.5GHz.

Threats Market driven by prepaid services.

LTE competition from 3 mobile operators.

Challenges to support Voice Over LTE to compete with mobile players.

Early introduction of LTE Smartphones by competitors.

SWOT ANALYSIS

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For information about this report contact:

Adlane Fellah

Maravedis-Rethink afellah@maravedis-bwa.com

Tel: +1-786-452-6522

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Deploying 4G LTE in a highly competitive Market

Welcome to Puerto Rico! • Some Highlights…

– 100 x 35 mile Island

• Beautiful Beaches, Sunsets and Historical Monuments

• Home of great Artists, Sports Players and five Miss Universe winners

– Population of 3.9 Million

– LATAM High Rate of

• Teledensity

• Mobile Penetration (78%)

• Internet Usage

– US Commonwealth – FCC Ruled

– Competition of 5 Wireless Operators

• AT&T, Claro, T-Mobile, Sprint, Open Mobile

Who are we? • Local Operator in Puerto Rico

• Launched in June 2007 – Formerly known as Movistar Telefónica

• CDMA 1xRTT/EVDO Network – EVDO (7/10)

• 1900, AWS and 700 MHz Spectrum

• High Smartphone penetration and Data Usage – Which lead to our LTE Decision

• FIRST INDEPENDENT CARRIER IN THE LATAM REGION TO LAUNCH LTE

• 4th Operator against Big Carriers in the Island

• Average User Voice Traffic – 2,000 minutes a month

• Average Data Usage per person – 3 Gb a month

LTE Deployment Challenges • Terminal Availability and Ecosystem

– (Band 13 is an advantage)

• Backhaul Bandwith (MW vs Fiber)

• Leased Lines MRC (OPEX)

• Internet Backbone Growth

• All IP Culture

• Vendor Selection

• Vendors Interoperability if an E2E solution is not chosen

• Competition – (All PR operators will be on LTE on 1Q12)

• RRU vs Macro Sites – (Tower Providers MRC)

• Landlords/Tower providers approval – (Bigger antennas and more equipment increase OPEX)

• Do customers really understand 4G vs 3G (HSPA+ vs LTE)?

Speed Test

LTE Real Live Throughput

Driver Test Results (Throughput)

• Please rise your hand how many of you compete with 3 Tier 1 USA based operators and the major LATAM Mobile Operator?

• Lower cost per Mb Delivered • 3G not able to handle highly dense traffic areas : Hot Spots • Improve Customer Experience • Retention and significantly reduce churn • Competitive Situation: AT&T LTE launch in Puerto Rico plus Claro

announcement to launch soon. • Soon will be one of the First market with 3 Commercial LTE Networks

competing for Mobile Broadband Market. Expected all 5 operators to launch LTE by end of 2012.

Reasons for LTE

Phase 1

• 3G Clients to 4G LTE migration campaign Improve 3G clients experience

• Telemarketing to all 3G clients in Metropolitan Area

Phase 2

• 4G LTE sales in stores within the Metropolitan Area

Alliances

•Give Open Mobile’s 4G LTE technology the necessary brand recognition to captivate customers •Branding Campaign :McDonald’s WiFi Internet via Open Mobile 4G LTE network

Open Mobile Strategy

• Migration campaign was carried out

• The campaign involved clients owning 3G dongle devices or hotspot, and switching them to 4G LTE while maintaining commercial characteristics similar to the product on 3G technology

• A daily landing page was presented to 3G clients with the migration promotion

Migration Campaign

• Telemarketing group was prepared to receive calls from these clients and to inform them correctly on the benefits of switching

• Geographical zone was identified and controlled for this migration campaign Metropolitan Area

• Direct Marketing was sent to every 3G client within the Metropolitan Area, presenting promotion to switch technology (migrate)

- On March 1, migration of 3G client to 4G LTE through the established campaign

- The campaign achieved 1,400 migrations by the end of the month

Migration Campaign

Direct Marketing was sent to every 3G client within the Metropolitan Area, presenting promotion to switch technology

Migration Campaign Direct Mailing

Commercial Offers

4G LTE USB Modem & Routers

Novatel MC551 Novatel MiFi 4510 Franklin Wireless R720

November 2012

Premier Event for the 4G Ecosystem

November 14-15, 2012 Bogotá, Colombia

www.4glatinamerica.com info@4glatinamerica.com

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4G LTE Smartphones

Pantech Breakout HTC Cobalt

McDonald’s / McCafé WiFi 4G LTE