Presentation for the Latin America Spectrum Conference 2012

Amit Nagpal

How much of a game-changer is LTE?Technology developments and regulatory implications

25 October 2012

How do we resolve the “capacity crunch”?

Source: Cisco, 2012

Global mobile data traffic forecast Decoupling of traffic from revenues

Source: Light Reading

2

Spectrum is part of (but not the only) answer

Deployment of next generation more spectrally efficient technologies (e.g. HSPA+/LTE)

Acquisition of new frequencies and re-farming of existing bands

Off-loading of traffic onto fixed networks (WiFi and femtocells)

Deployment of new sites

3

Source: Vodafone

LTE provides significant performance improvements

Source: Huawei

4

LTE/HSPA+ carrier performance

Channel bandwidth Peak data rate(downlink)

LTE-Advanced (5 2x20MHz) 3000Mbps

LTE 2x20MHz 150Mbps

LTE 2x15MHz 112.5Mbps

LTE 2x10MHz 75Mbps

DC-HSPA+ 2x10MHz 42Mbps

LTE 2x5MHz 37Mbps

HSPA+ 2x5MHz 21Mbps

LTE makes more efficient use of available spectrum

Source: Real Wireless

5

Theoreticalincrease inspectral efficiency

Real-world estimate (takingaccount of networkconfigurations,technology take-upby consumers etc)

Three-foldimprovementbetween 2011and 2016(CAGR of 25%)

• The amounts of low frequency spectrum available for award are limited (e.g. 2x30MHz of spectrum in European digital dividend band)

• Is it better to have more competing network infrastructures each making less efficient use of the spectrum (smaller channel widths) or to have fewer competing infrastructures but with each operator making more efficient use of the spectrum?

Wider channels present a challenge for regulators

15MHz channel 15MHz channel

10MHz channel 10MHz channel10MHz channel

5MHzchannel

10MHz channel10MHz channel5MHz

channel

20MHz channel 10MHz channel

Alternative options forassignment of 60MHz

of spectrum(examples)

6

Frequency sharing between operators is one possibility

ARCEP in France is allowing operators to share frequencies in order to provide high speed services to rural communities

Maintains the benefit of three competing infrastructure players in urban areas

7

Country Frequency sharing information

Denmark • Not mandated but allowed if negotiated commercially (providing approval is granted by the regulatory authority)

France • Operators holding the lower 20MHz of the 800MHz band are mandated to share frequencies when approached under reasonable commercial terms.

• Frequency sharing is only permitted to cover priority roll out zones – sparsely populated areas (18% pop. in 63% area)

Ireland • Considered by the regulator and competition authority on a case by case basis

Carrier Aggregation Technology provides a solutionWhat is carrier aggregation?• With the development of LTE towards LTE-Advanced, operators will

be able to virtually aggregate their spectrum holdings in order to deploy a larger LTE carrier

• This will allow operators to deploy LTE at higher peak rates, without having to own contiguous spectrum

AT&T to aggregate acquired spectrum• In 2011, AT&T acquired Qualcomm’s unpaired 700MHz spectrum

holdings• AT&T is planning on aggregating the spectrum with its existing AWS

(1700/2100MHz) band in order to increase the speed offered over its current LTE network

• AT&T is pushing for carrier aggregation utilising LTE rather than waiting for LTE-Advanced technologies and is aiming to deploy compatible networks from 2014

Carrier Aggregation Technology (CAT) is a central component of LTE Advanced (Release 10)• CAT will allow up to 5 2x20MHz channels to be combined to offer

data rates of up to 3Gbps

2x10MHzActual carrier

2x10MHzActual carrier

2x20MHzVirtual carrier

700MHz 850MHz

LTE carrier aggregation

Note: Carrier aggregation technologiescan also be used to aggregate

non-contiguous spectrum blockswithin the same frequency band

8

Combining frequency sharing and CAT may be required

The European Union has a target to provide minimum 30Mbps broadband to 100% of households by 2020

A recent presentation by Nokia Siemens Networks suggested this could be achieved using LTE-Advanced with carrier aggregation of all the spectrum in the 700MHz and 800MHz bands

9

Source: ‘Bringing Mobile Broadband to Rural Areas’, presentation by UlrichRehfuess, Head of Spectrum Policyand Regulation, Nokia Siemens Networks,presented at WIK Mobile broadband –Competitive dynamics and policyimplications conference,11-12 September 2012

Is the provision of telecoms network infrastructure

heading back to being a monopoly business?

Final question ….

10

Annex

Introduction to Aetha Consulting

11

A.1

Trusted advisor to the telecoms industry,undertaking data-driven and quantitative assessmentsto support strategic and regulatory decisions

Aetha Consulting helps players in the telecommunications industry to develop creative and sustainable solutions to the challenges facing them in a constantly changing environment

We specialise in undertaking rigorous, data-driven and quantitative assessments to support major strategic and regulatory decisions. We work with our clients to develop the tools and methodologies appropriate to solve each new business problem as it arises

Our staff have been contracted to advise on key industry issues, including: market strategy development, radio spectrum policy, spectrum valuation and auction support

We are committed to quality and exceeding our client's expectations. We have a strong track record of successful assignments with operators, regulators, and manufacturers, as well as financial and legal institutions

Aetha Consulting

12

We help operators and regulators to analyse the opportunities and threats arising out of changes in their radio spectrum holdings

Spectrum management experience

Our staff have supported operators in over 25 spectrum auctions worldwide in the last 10 years including:

• 800MHz and 2.6GHz (4G) auctions in Europe including Austria, Germany, Italy, the Netherlands and Switzerland

• 2.1GHz (3G) auctions in Asia including India, Hong Kong, Singapore and Taiwan

• New entrant licence acquisition opportunities in countries such as the AWS auction in Canada and 2G/3G auctions in Egypt, Iran, Kuwait, Libya and Qatar.

Our consultants have assisted regulators to award spectrum including supporting the UK andDanish Governments with awards of 420MHz, 800MHz, 1.5GHz, 2.1GHz and 2.6GHz spectrum

13

Since Aetha was founded in July 2011 we have worked for over 20 clients

The topics covered have included a wide range of topics across our service portfolio

• 900MHz and 1800MHz auction support

• Appeal against wholesale price decision

• Competitor spectrum valuations

• Cost model for mobile services (various models and review projects)

• Digital dividend case studies

• Independent valuation of GSM spectrum

• Independent valuation review for 800MHz auction

• IPTV business plan for broadband operator

• NGA access pricing advice

• Number portability

• Premium TV content valuation advice

• Reserve price analysis

• Spectrum auction support (numerous projects for operators and regulators)

• Spectrum policy advice

• Spectrum re-farming paper

• Strategy review for fixed operator

• Support to operator on regulatory consultation document (various projects)

• Target and budget setting

Recent company track record

• ComReg (Ireland)

• Eircom (Ireland)

• GSM Association

• IBPT (Belgium)

• KPN

• Millicom

• Ofcom (UK)

• Oger Telecommunications

• Orange

• P4 (Poland)

• QinetiQ

• Sky

• SUTEL (Costa Rica)

• Talk Talk Group

• TDC (Denmark)

• Telecom Italia

• Telefónica

• Telenor

• Tigo (Colombia, Paraguay)

• Türk Telekom

Clients * Projects *

* The client and project lists are in different orders, so each line on the right hand list does not necessarily correspond with the same line on the left hand list

14

Amit NagpalPartneramit.nagpal@aethaconsulting.comTel: +44 7546 912355

Contact details

Aetha Consulting Limited Coton Hall 10 Brookfield Road Coton Cambridge CB23 7PT United Kingdom www.aethaconsulting.com

15

Graham JohnsonPartnergraham.johnson@aethaconsulting.comTel: +44 7500 961907