Mobile Broadband Growth Results June 2010

Mobile Broadband Growth
Reports from HSPA Operators Worldwide
June 11, 2010

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Mobile Broadband Growth – June, 2010 Slide no. 1/41

How mobile broadband is contributing to growth and profitability

Source: Company reports, websites, announcements



Mobile Broadband Growth Success (1)

Celcom, Malaysia – after moderated growth in Q4 09, mobile broadband surged again with the
highest ever net additions of 124,000, a strong 24% increase QoQ. Strong growth was seen
overall in non voice services, with data now contributing 30% to revenue, from 25% a year ago
XL Indonesia in Q1 10 reported data service revenue growth which now contributes 7% of
service revenue – an increase of 58% QoQ
Singapore’s M1 non-voice services continued to grow, contributing 29.8% of service revenue,
up from 25.1% a year ago. This was primarily driven by an increased focus on data usage
In Sweden, according to the Swedish Post and Telecom Agency (PTS) the number of mobile
subscriptions, including voice and data, increased 7% to 11.6 million at end 2009. Subscriptions
for mobile broadband represented the largest share of the increase, up 50% YoY to 1.31
million. Traffic for mobile data services increased in 2009 by 103% compared to 2008,
According to the Communications and Information Regulatory Commission, mobile
broadband in Saudi Arabia grew 488% to 1.41 million subscriptions, representing 51% of all
broadband connections in the country, compared to a 47% share for ADSL




 Tele2 Group has reported a 50% year on year increase for Q1 2010 in the number of
mobile broadband subscriptions

 SFR’s data revenues represented 26.5% of mobile revenues at the end of March 2010,
compared to 21.9% for the same period in 2009, due to the popularity of "smartphones“

 TeliaSonera stated that for the first time in several quarters, Finland and Denmark
reported positive revenue growth in local currencies as a result of strong growth in data
usage and higher equipment sales

 In Taiwan, Chunghwa Telecom reported for its mobile business an annual increase in
total revenue of 2.1%, mainly due to growth in mobile data revenue and increased handset
and datacard sales

 In Bangladesh, Grameenphone has highlighted how data revenues are contributing to
consistent revenue growth. In Q1 2010 data revenues increased 65% and 13% from Q1 09
and Q4 09 respectively



Smartphones

 Growth of the worldwide smartphones more than doubled that of the overall mobile phone market in Q1 2010,
confirming the segment is exhibiting high-growth. According to the International Data Corporation (IDC)
Worldwide Quarterly Mobile Phone Tracker, vendors shipped 54.7 million units in Q1 10, up 56.7% year on year.
By contrast, the overall mobile phone market grew 21.7%. Smartphones accounted for 18.8% of all mobile
phones shipped in Q1 10, up slightly from 14.4% in Q1 09

 The Android operating system (OS) is increasing its smartphones market position, at least in the U.S. in Q1
2010. According to NPD Group, based on smartphone unit sales to consumers last quarter, the Android
operating system moved into second position at 28% behind RIM's OS (36%) and ahead of Apple's OS (21%)

 Since January 2010, the Smartphone share in Ireland has doubled from 8% to 16%, driven by key handsets.

 MAVAM's has revealed that Smartphone users are the most likely to
use handsets for Internet access (14%),against 4% for other devices.

 In Honk Kong, almost half (48%) of respondents own a
smartphone, more than double the global rate of 23%.




 Mobile broadband customer base grows by
130.6%, data accounts for approximately 18% of
revenues




 Remarkable push in data/service revenues:
+5.3% YoY Q1 2010

Venezuela
 Service revenues (+21.1% YoY)boosted by
data services Q1 2010




South Africa

Mobile data revenue market share of 58%

Data revenue1 growth of 32.8%
– Active data users up 29.1%
– Data connect cards up 34.1% to 728k

Data usage up strongly
– Data traffic up 58.4%

Increasing penetration of smartphones
– Up 44.6% to 2.0 million

Increasing penetration of data cards
- Up 34.1% YoY




Vodafone Group Plc announces revenue from mobile data
services reached £4 billion (US$5.8 billion) in 2010

 Group data revenue increased by 19.3 percent to £4 billion ($5.8 billion) from
a total of 50 million active data users across the group

Smartphone use is currently the key driver of data growth, and Vodafone said
it plans to increase the proportion of smartphones from 30% of its total sales mix
to 70% by the end of 2013

 CEO Vittorio Colao, said traffic on the group's networks in Europe increased
100% during the last 12 months, of which 85% was from data cards and 15%
from smartphones. But the mix is shifting to smartphones: in the fourth quarter
last year, total data revenues in Europe increased by 19%, with mobile Internet
traffic increasing by 37% and PC (dongles) traffic by 17%




Mobile revenue Mobile non-voice services

 Post‐paid mobile
revenue increased 10%

 Pre‐paid customer
base expanded 10% &
crossed 1,000,000

 StarHub has announced that total post-paid mobile data traffic on its network
grew to 7.4 petabytes in 2009 from 1.7 petabytes in 2008.



Revenues (NOKm) and EBITDA% Telenor Norway
Telenor Group
 10k net mobile subscriber
growth driven by mobile  Added 5 million new mobile
broadband subscribers Q1 10

 9% mobile revenue growth  Solid mobile revenue growth,
driven by mobile data and
handsets
Revenues (NOKm) and EBITDA%

Telenor Sweden

 8k net mobile subscriber growth

 10% mobile revenue growth in
local currency




 Data revenues up 46% YoY to
€947 million in FY 09

 1.5 million iPhones dispatched
since market launch, 1 million
during 2009

 Growth of non voice revenue
share of service revenues by 4%
T-Mobile USA YoY to 26%

Deutsche Telekom CEO René Obermann is expected to double
revenues by 2015 with €10 billion coming from mobile data traffic.
Obermann said it would double the number of 3G smartphones in
the network to around 8 million by the end of 2010




Mobistar SA

 The use of mobile Internet and SMS
continues to expand in 2010. At the end of
March, the share of mobile data service
revenues amounted to 31 % compared with 27.4
% a year earlier

 Non-SMS mobile data represent 6.4% of total mobile
service revenues (4.9% in 2008)




 Continued Strong Wireless Growth – driven by mobile broadband,
substantial wireless margin expansion



Nation’s fastest 3G network getting faster
 HSPA 7 2 Mbps performing well with
32%-47% increase in data download speeds
where fiber backhaul is in place
 Text messaging grew 50% YoY and picture messaging grew 130% Q4 2009
 Wireless Service Revenue 2009 = $41.3 billion, +2.8 billion YoY, 29% of ARPU



Belgacom (Proximus)

FY 09 revenue up 9.1% to € 303 million
 Driven by increased SMS revenue (+8.1%
YoY) and advanced data revenue (+12.2% YoY)
 Net data ARPU YoY +6.3% to € 6.7 million

KPN - Netherlands




Q1 2010 operating highlights:

 Mobile customers: 1.8m (Net increase:
38,000 QoQ)

 Mobile data as % of service revenue
increased to 15.3%

 Increasing take-up of smartphones will
continue to drive data growth

 M1 CEO Karen Kooi said: "mobile data
revenues increased as a result of a larger
mobile broadband customer base. Non-voice
revenues made up 26% of services revenues,
up from 23.4% a year ago”.




Wireless data revenue growth of 40% Q1 10

 Higher smartphone penetration

 Data device subscribers up 70% YoY

 Data now represents ~21% of service revenues




According to a report from AdMob, smartphone
data traffic grew in February 2010 was up 193%
YoY which AdMob attributed primarily to iPhone™
and Android device usage

 Telecom NZ reported data ARPU at December 2009 was up 19% YoY

 A report by Chetan Sharma revealed that messaging still accounts for the bulk of data business, but media
services such as mobile music, TV and video streaming, voice navigation, games, and location-based services, are
gradually gaining ground. The explosion of apps and app storefronts last year contributed to the mobile data boom.
The total of app downloads hit 7 billion, generating $4.1 billion in revenue - 12% of which came from in-app advertising




Etihad Etisalat (Mobily) Saudi Arabia
Etihad Etisalat passed the one million mobile
broadband subscribers landmark 2009
 Mobily passed 1 million mobile broadband 1,200,000
subscribers in December 2009 1,000,000
800,000
 HSPA is the enabling technology 600,000
400,000
 Since December 2007, data traffic grew 200,000
tenfold reaching 50 terabytes in December 2009 0
2007 2008 2009




HSPA+ entering the mainstream

GSA – June 9, 2010:

114 HSPA operators i.e. more than one third have
committed to deploy HSPA Evolution (HSPA+)

Almost 1 in 5 commercial HSPA operators have
commercially launched HSPA+

Source: GSA report: Global HSPA+ Network Commitments
and Deployments – June 9, 2010
www.gsacom.com/downloads/pdf/Global_eHSPA_network_commitments.php4




NTT DoCoMo
Revenues from Wireless Services
Year ended March 31

*’’PHS services revenue’’ for the years ended March 31,2007 and 2008 has
been reclassified into ‘’Other revenues’’

 No. of data plan subscriptions grew to
670.000
 Smartphone sales recorded steadfast
growth




Telstra

MTN, South Africa

Orange, France




Vivo SmarTone
 Continuing growth
• ↑23% YoY
• Accounts for 33% of
service revenue

 Growth from
• Wider adoption of
smartphones
• Mobile & wireless fixed
broadband

Vivo reported a sustained growth in data and VAS revenues,
up 51.8% and 7.3% respectively in Q1 2010 compared to Q1
2009, and representing 17.5% of net service revenues in the
quarter




Rogers Wireless
 Continued strong smartphone activations helped drive Q1 10 wireless data
revenue up 40% to $416 M or 26% of network revenue

 Activated nearly 1.5 million smartphone customers bringing smartphone
penetration to 31% of postpaid subscriber base

Turkcell

 > 1 million smartphone users

 Number of monthly average
mobile data users increased to
approx. 7 million through
handsets and PCs




SingTel Singapore



Some industry forecasts (1)

According to a study by Cisco “Visual Networking Index (VNI) Forecast and Methodology,
2009-2014 “, mobile data traffic is estimated to surge by as much as 39 times during the
five year period from 2009 to 2014. By 2014, the annual global mobile data traffic is
expected to reach 3.5 exabytes per month i.e. a run rate of over 42 exabytes on a yearly
basis. Mobile data traffic will be the strongest in the Middle East and Africa (MEA) followed
by the Asia-Pacific and North America as revenue from voice gets saturated and operators
focus on alternate sources of revenue

A new report published by Chetan Sharma Consulting, “Managing Growth and Profits in
the Yottabyte Era,” predicts that in 2010, mobile data traffic in the U.S. will exceed 1
exabytes (or 1 million terabytes) - a mobile data traffic milestone that the global industry as
a whole reached in 2009.




 Ericsson has estimated that, by 2015, there will be 3.5 billion mobile broadband users around the world,
compared to the 500+ million that use it at present

 According to a recent Analysys Mason report, the total data traffic volume in 2015 will be more than 30 times that
of 2010. Operators will need to make capital investments to increase capacity in order to meet this demand

 According to In-Stat, “WCDMA-HSPA base stations will be the workhorses of wireless data networks”. 2009 saw
overall deployments of newly deployed macro base stations up 10% on 2008, driven by the rising demand for
smartphones and mobile broadband, meaning that most of the increase will have come from WCDMA-HSPA.
WCDMA-HSPA base stations will account for at least 50% of total revenue in this segment in 2009. By 2013
WCDMA-HSPA will contribute 70% of revenues in the sector

 ABI Research announced that shipments of mobile broadband-enabled consumer products, which includes e-
book readers, mobile digital cameras, camcorders, personal media players, personal navigation devices and mobile
gaming devices will increase 55-fold between 2008 and 2014 with total shipments reaching 58 million units per year
in 2014



Smartphones

According to a report by ABI Research on US mobile operator network traffic, smartphones
and connected computing devices will be the primary drivers of data traffic over the next five
years. By 2014, these device categories will generate more than 87% of total mobile
network data traffic for US operators. The report also states that growth of Android, iPhone
and similar smartphones will cause average smartphone traffic levels to grow by 48% over
the forecast period.

Led by the success of Android, Linux-enabled smartphones are expected to make up 33% of
the total worldwide smartphone market by 2015, according to a new report from ABI
Research. More than 60,000 smartphones are now shipping per day, with Android OS
leading the pack, notes the market researcher. Up to 127 million Linux-based smartphones
may be shipping by 2012.



Smartphones



Leading the Mobile Broadband Revolution
Ralph de la Vega, Chairman of the Board, CTIA

 Mobile broadband growth outpaces every other platform**

 Pew estimates that by 2020, mobile devices will be the
primary Internet devices for most people in the world***

 The average smartphone user generates 10 times the
amount of traffic generated by the average non-smartphone
user*
*Source: Cisco, VNI Mobile, 2010 ** Source: CTIA, Written Ex Parte to FCC, Sept. 29, 2009
*** Source: Pew Internet & American Life Project, Dec. 2008

 Worldwide Machine-to-Machine devices rise to 412 million
by 2014*

* Source: Juniper Research, Embedded Mobile and M2M Strategies 2009-2014, Jan. 2010



Total mobile traffic worldwide forecast

Total Mobile Traffic Worldwide Forecast
20
18
Exabyte 1,000,000,000,000,000,000

CS Voice
16
Petabyte 1,000,000,000,000,000 (c) GSA – Global mobile Suppliers Association
14
Terabyte 1,000,000,000,000
Exabytes

12
Gigabyte 1,000,000,000
10
Megabyte 1,000,000

Mobile Broadband
8
Kilobyte 1,000
6
4
2
0
2008 2010E 2014E
Source of data: Informa Telecoms and Media – March 2010




 UK consultancy firm, Coda Research Consultancy, has predicted that mobile data consumption in the US is set
to reach 327,000 terabytes a month by 2015, indicating a 40-fold rise in mobile data consumption over 5 years

 Mobile data traffic from PC modems and routers is forecast to increase 4-fold between 2010 and 2014, according
to a report by ABI Research. 2,000 petabytes of data will be sent and received in 2010, a figure that will rise to about
8,000 petabytes in 2014

 Semiannual US wireless industry survey was released at CTIA in March 2010 revealing that wireless service
revenues totaled $77 billion for the last half of the year. The real growth is coming from wireless data services - mobile
Web, text messages, and other non-voice services. In the latter half of last year, revenue for wireless data service
totaled > $22 billion, nearly a third of overall wireless services revenue and up 26% YoY. Steve Largent, President
and CEO of CTIA, said in a statement. "Mobile broadband will increasingly play a vital role in people’s lives."

 A study by Juniper Research has forecast that more than 1 in 10 mobile subs will either have a ticket delivered to
their mobile phone or buy a ticket with their phone by 2014, representing a five-fold growth over the next five years.




A Report Predicts Explosive European Growth for Mobile Broadband - According to a CCS Insight report,
Mobile Broadband in Europe, 4Q09 - the total Mobile Broadband subscribers in key European markets will rise
from 22m at the end of 2009 to over 43m in 2011. In addition, total revenue from Mobile Broadband access in the
major markets will rise from less than €6 billion in 2009 to more than €11 billion in 2011
www.ccsinsight.com/reports/491/

Cisco Systems predicts in its Visual Networking Index that mobile-ready devices and mobile video will fuel
enormous global growth in mobile data traffic over the next four years - The Pentagon and broadcast
networks can expect continuing pressure to turn over some of their spectrum to make more airwaves available to
the private sector. According to Cisco Systems, global mobile data traffic increased 160% in 2009 to 90 petabytes
per month. Cisco predicted that "annual global mobile data traffic will reach 3.6 exabytes per month globally or an
annual run rate of 40 exabytes by 2014," (39 fold increase from 2009 to 2014, or a CAGR of 108%) and noted that
such traffic "is growing today 2.4 times faster than global fixed broadband data traffic.“ Cisco says that, by that
date, there will be more than five billion personal devices connecting to mobile networks, as well as billions of
machine-to-machine devices. Video will represent 66% of all mobile data traffic by 2014, up 66-fold from 2009.




Global mobile Suppliers Association (GSA)

The results from an industry survey organized last year by GSA provided an expectation that
HSPA+ mobile broadband technology would enter the mainstream during 2010. GSA
confirms this is now becoming reality as HSPA+ is now commercially launched on almost 1 in
5 of HSPA networks. Several more HSPA+ networks are scheduled to launch in the coming
weeks and months. The eco-system includes 42 HSPA+ devices which have been
announced by 11 suppliers.

61 HSPA+ systems have now entered commercial service in 34 countries, of which 52
support a peak downlink data speed of 21 Mbps and 5 systems support 28 Mbps and the
remaining 4 support 42 Mbps. By the end of 2010 GSA expects that around 95 HSPA+
systems will be in commercial service

Source: GSA report: Global HSPA+ Network
Commitments and Deployments – June 9, 2010
www.gsacom.com/downloads/pdf/Global_eHSPA_network_commitments.php4


Mobile Broadband resources from GSA
- recent surveys, reports and papers

Evolution to LTE: Information Paper - June 7, 2010

WCDMA operators (347 in 144 countries) – April 16, 2010 All these resources
– and more – are
114 HSPA+ network commitments – June 9, 2010 available via the
links on the GSA
HSPA operators survey (341 networks launched) – April 16, 2010 home page
2,349 HSPA Devices survey – April 22, 2010
www.gsacom.com
Digital Dividend update – June 2, 2010

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Mobile Broadband Growth Results June 2010

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Mobile Broadband Growth Results June 2010