1. Eurasia Mobile MarketsChallenges to our mobile networks & business models.Mobile Network Optimization Eurasia Summit 2011, 20th September 2011.. Dr. Kim Kyllesbech Larsen, Technology EconomicsTechnology, Deutsche Telekom.

2. The mega challenges … Mega bucks Mega bits Mega Hz 2 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

3. The smartphone … The “killer” device and its “killer” applications… 3 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

4. OTT Mobile Apps impact.Mobile revenues in an Apps-centric world could decline rapidly. (Free) OTT VoIP and Messaging Apps can lead to a dramatic loss of most profitable MNO revenues Illustration CS Voice SMS & MMS PS Data 23.01 22.41 By 2015 more than 70% of users have a smartphone 6.2 ? 3.3 3.4 3.8 12.7 15.7 13.0 6.2 6.5 2010A 2015E Mobile centric (“worry-free”) 2015E Apps centric (“doom”) 1 Source 2010 & 2015 Pyramid Research March 2011 Western Europe. 4 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

6. Accelerate LTE deployment.

7. Manage traffic via pricing, policy & control.

8. Spectrum acquisition.Western Europe assessment 5 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

9. Mobile margin doom… 3-player market with equal market share illustration. Mobile Apps offering “free” voice and messaging (picky bagging on data plans) can lead to a dramatic loss of revenue and margin. Capex to Revenue ratio Ebitda & margin modernization LTE Difference primarily due to Revenue Illustration 6 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

10. Uncontrolled data growth ... Apple iTune promotion in NL ... free downloads. 180 GB & 855 Mbps 9× increase in peak throughput. More than twice the total volume. 30+ thsd downloads in the peak. Promotion day Normal 7 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

12. 20% of users generate 80% of traffic.

13. Off-loading is an effective financial remedy … but not easy to achieve!HSPA only, No LTE HSPA No LTE 50% off-load from 2012 HSPA + LTE HSPA + LTE 50% off-load from 2012 8 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

15. 2011+ Ramp-up LTE deployment.

16. 2015 620 mio mobile subs …10% LTE.

17. 2020 670 mio mobile subs …60% LTE.

19. Before 2015 limited LTE deployment.

20. 2017 4.0 bn mobile subs …10%+ LTE.

21. 2020 4.5 bn mobile subs … 60%+ LTE.

22. 2G below 10% after 2018.1 Pyramid Research (April 2011) until 2015. After 2015 technology diffusion model applied to technology development favoring LTE as main conversion technology. 2 China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand, Vietnam. 9 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

23. LTE deployment requires available spectrum. 900 MHz (2G some 3G) 400 MHz 700 MHz (LTE) 800 MHz (LTE) UL (35MHz) DL UL DL UL DL UL (30MHz) DL 1,800 MHz (2G) 1,500 MHz (MSS L-band) UL (75 MHz) DL TDD UL (58 MHz) DL TDD (20 MHz) 2,100 MHz (MSS S-band) 2,100 MHz (3G) 2,300 – 2,400+ MHz DL UL (60 MHz) TDD (100 MHz) DL 3G TDD part TDD (mainly APAC) 3G TDD UL (20 MHz) 2,600 1 MHz (4G & LTE) 3,400 – 3,500+ MHz UL (70 MHz) TDD (50 MHz) DL part TDD This band provides interesting backhaul P2P options in some Greenfield scenarios 1 The shown structure consistent with European band plan. In USA this band is held by Clearwire and primarily used for TDD WiMax. 10 Dr. Kim Kyllesbech Larsen, Mobile Network Optimisation Eurasia Summit 2011, September 20th 2011, Istanbul.

24. Spectrum re-farming … a very complex process...Additional spectrum provides control & mitigate risks. Today situation E.g., GSM 3G Ready for re-farm Complex & Difficult to control Time 2G Add “new” spectrum Migrate Traffic E.g., LTE Illustration 11 Dr. Kim Kyllesbech Larsen, Mobile Network Optimisation Eurasia Summit 2011, September 20th2011, Istanbul.

25. Spectrum demand and availability. There are still large amount of untapped spectrum resources available. 20Hz 3kHz 50MHz 4GHz 300GHz 400THz X-RAY MICROWAVES ULTRA-SOUND INFRARED 4GHz 700MHz 50MHz WHITESPACE TRADITIONAL CELLULAR / MOBILE SPECTRUM RANGE Very High Small BANDWIDTH COVERED UNIT AREA Very Large Very Low With current data growth, by 2030 spectral BW demand could be beyond 4 GHz. 1995 50MHz (900 MHz) Voice Centric 1 2010 340 MHz (900,1800 & 2100 MHz) Voice Centric with mobile data ×7 2015 590 MHz (800, 900,1800, 2100, 2600 MHz) Broadband data centric with voice. ×12+ 1 … 12 Dr. Kim Kyllesbech Larsen, Mobile Network Optimisation Eurasia Summit 2011, September 20th 2011, Istanbul.

26. LTE deployment models.Availability of a wide range of frequencies will be essential for economical network deployment. Throughput / Capacity 2.3 - 3.6 GHz Typical BWs/Operator > 40 MHz Femto-cells Hot- Spots 2.3 To 3.6 GHz Rural Fixed-like Typical BWs/Operators < 20 MHz LTE connectivity Urban – Suburban: Up-to 2100 MHz Rural / Nation-wide: Digital dividend  900 MHz Illustration 13 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

27. Backhaul will force you to re-think network design.LTE’s extremely power-full air-interface, i.e., 100+ Mbps, will require extensive backhaul fiber deployment. LTE air-interface 30mean to 100+peak Mbps (per sector) DWDM DWDM Evolved Packet Core 100 Gbps DWDM eNode 100 GbE DWDM DWDM FTTS1 100+ Mbps 32:1 320:1 eNodes per element 3200:1 BH Throughput 3+ 32+ 320+ In Gbps Illustration 14 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

28. The backhaul challenge … macro vs micro.Distribute mobile broadband traffic differently. Illustration LTE provides up-to 100Mbps per sector AP (e.g., WiFi / Femto,..) Node FTTS1 100+ Mbps 100+ to 40 Mbps 300 – 7,000 active devices per macro-cellular node (dense-urban / urban) 100+ Mbps shared with up to 7,000 devices. Home Environment with ca. 2.3 people per Home 1 connected to Fiber, Cable or VDSL. Up-to 100+ Mbps shared by 2+ people. 1 Average for Western Europe. 15 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

29. Key challenges.What we need to be passionate about. Backhaul -> Gbps will be needed -> Think Fiber and off-loading. Radio nodes -> multi-mode SDR capabilities to mitigate uncertainty . Spectrum -> acquisition and re-purposing of legacy bands. Prepare for early LTE deployment -> might be needed sooner than later. 16 Dr. Kim Kyllesbech Larsen, Mobile Network Optimization Eurasia Summit 2011, September 20th2011, Istanbul.

30. Thank you for your interest! Contact: kim.larsen@t-mobile.nl Mobile: +31 6 2409 5202 http://nl.linkedin.com/in/kimklarsen Acknowledgement: I am indebted to my fantastic team for always being patient with my data requests, for their great suggestions and support in creating this presentation.