Experiencia de voz en 4G

Experience voice in 4G Cartagena , 27 August 2013 Dario Talmesio Principal Analyst Operator Strategy

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About Informa Telecoms & Media Informa Telecoms & Media delivers strategic insight, key market data and forecasts. We’ve been helping our clients make better business decisions for more than 25 years.

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02/09/201 3

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Our analysts

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Where is LTE today?

LTE connections by geography, 3Q12 ~90% of total global connections

•

182 live networks in 75 countries (August 13)

•

Reaching almost 1 billion people

•

~125 million connections to LTE networks at 2Q13end

•

Over 948 LTE-enabled devices, according to GSA US

Global commercial LTE network deployments, August 2013

LTE Cumulative Live Networks 200 150

100 50 0 2009

2010

2011

Source: Informa Telecoms & Media

2012

2013

Japan

Korea

Rest of the world

Number of LTE-enabled smartphones by operator, 2012-end 2012

Today LTE is still a USA & Asia (success) story 140.000.000

120.000.000

100.000.000

80.000.000

60.000.000

40.000.000

20.000.000

3Q11

4Q11 Africa

9/2/2013

Americas

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1Q12 Asia Pac

2Q12 Eastern Europe

3Q12 Western Europe

4Q12 Middle East

1Q13

2Q13

US / Canada

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But LTE is at the top of everyone’s priorities What will be the single most important area of focus for telecoms and TV operators in 2013?

Which technologies and strategies will drive profitable top-line growth in your organization in 2013?

4G / LTE

Network deployments and 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 practice

Multiscreen video

Partnerships with other operators and Internet players

High-definition video

Wi-Fi Ethernet SDN

Other (please specify)

Other (please specify) 0%

5% 10% 15% 20% 25% 30% % of respondents

0% 10% 20% 30% 40% 50% 60% 70% % of survey respondents

Source: Informa’s Industry Outlook Survey 2013, Oct 2012, CSP respondents only, n=280 9/2/2013

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What are the main challenges?

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And what opportunities?

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LTE to reach almost 16% Global penetration by 2018-end LTE Forecast By region Technology Market Share, 2018

1.600

LTE 15.8% W-CDMA 49,8%

Others 6,3% CDMA 5,9% GSM 22.2%

Subscriptions (millions)

1.400 Africa

1.200

Americas

1.000

Asia Pacific

800

Europe: Eastern

600

Europe: Western

400

Middle East

200

USA/Canada

0 2013

2014

2015

Africa

73m

Americas

82m

2016

Asia Pacific Europe: Eastern

USA/Canada

2018

685m 63m

Europe: Western Middle East

2017

182m 14m

260m

Cellular subscription forecast - technology split for 2018

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LTE: Which operators have had the most success?

Top 10 largest LTE operators by connections, 2Q13 Operator

LTE connections

% of total base

Current premium v 3G (%)*

Verizon Wireless

31.1m

26

0

AT&T Mobility USA

17.3m

16

0

NTT DoCoMo

14.2m

23

0

SK Telecom

11.0m

41

0

Sprint Nextel USA

9.2m

17

0

KT Corp

6.0m

37

0

LG U+

5.9m

50

0

KDDI

5.3m

14

0

Softbank Mobile

5.3m

16

0

T-Mobile US

4.7m

11

0

• Not charging a premium for LTE over 3G is used by some of the most successful LTE operators, measured by subscriptions.

• Main strategic LTE tariffing choice facing operators is: charge a premium over 3G (if so, how much?) or price LTE on a par with 3G? • LTE operators that charged a clear premium over 3G are adjusting their prices to bring them in line with 3G rates.

*Lowest-priced LTE monthly subscription compared with lowest price 3G subscription Source: Operators, Informa Telecoms & Media

9/2/2013

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What are the lessons learned in how to position and market LTE to consumers?

Source: AT&T

Speed Coverage Latency demos on operator websites

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What can users DO with 4G? What are the end-user benefits?

How will their experience change?

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Are any “LTE services� emerging?

Vodafone Sky Sports & Spotify

Popular services used to promote LTE benefits Consumer

Business

High-definition video streaming and VoD

High-speed file transfers

Upload

Personal content sharing; consumer cloud applications

Enterprise cloud applications

Latency

Online gaming; realtime voice and video communications

Real-time voice and video communications; corporate VPN

Download

EE Film EE (UK)

Source: Informa Telecoms & Media

joyn MetroPCS (US)

9/2/2013

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How are consumers using LTE? How much data are they consuming?

•

25% of LTE usage is video, 15% music

•

43% of users use less or not public Wi-Fi

•

Users on MetroPCS unlimited LTE data plans consume 2-2.5GB on average per month

•

Customers on Vodafone’s fixed-broadband replacement service use 11.5-12GB per month

•

LTE accounts for 35% of total data traffic

•

LTE will surpass 3G traffic in early 2013

•

LTE smartphone users consume ~50% more data versus 3G smartphones

•

LTE smartphone users consume 8x more data compared to 3G users

•

Average monthly LTE smartphone usage is 1.6GB vs 1.1GB on 3G

Source: All data as reported by operators directly 9/2/2013

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But consumers are also using IP-Voice and IP-Messaging service

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Selection of options available for LTE voice

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Will LTE rejuvenate the voice market?

Voice “for” LTE, VoLTE & the prospects for voice revenues Selected early conclusions on voice for LTE •

User perception of interim voice for LTE solutions has been “surprisingly” positive

•

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 monetise VoLTE/RCS

VoLTE branding in Korea Live VoLTE deployments • • •

SK Telecom (Korea), August 2012 LGU+ (Korea), August 2012 MetroPCS (US), August 2012

Potential scenarios for voice Best case scenario

•

“Rich” and “HD” voice services are “table stakes”, not premium services

•

The “business case” for VoLTE appears to be based primarily on spectrum usage efficiency

•

Operators are generally committed to VoLTE, but will not feel rushed to launch

•

Operators that begin to approach nationwide coverage will move quickest to VoLTE 9/2/2013

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•Operators will be able to charge a premium for VoLTE/RCS services •Operators will begin to win-back traffic lost to alternative providers •Operators will see some incremental increases in voice revenues Worst case scenario

•VoLTE/RCS will have no impact on traffic erosion to alternative providers •Operators will be unable to charge any premium and prices will continue to decline •Voice revenue declines will continue and, potentially, accelerate Likely scenario •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

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Metro PCS: first US operators to introduce VoLTE services in mid-2012

9/2/2013

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SK Telecom: largest VoLTE deployment to date HD Voice: Service name for VoLTE - 4.5 Million Users (May 2013)

9/2/2013

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Verizon: Roadmap to VoLTE’ s launch in 2014 Completed LTE Rollout (June 2013) 500th U.S. market covered with 4G

Verizon LTE now covers 298 million people across the U.S., reaching 99% of its 3G footprint LTE network is handling 57 percent of its total data traffic.

Deployment of small cells on late 2013 Now focussing on adding voice capabilities to the 4G network. (VOLTE) VOLTE to commercially launch in early 2014 with a more widespread rollout and not a series of market-by-market launches 9/2/2013

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Operators Survey: Primary voice solution for LTE? What do you think will be the primary solution for voice over LTE for the next 2-3 years?

0,7% VoLTE

9,7% 0,0%

Circuit-switched fallback

7,6% 41,0%

Dual radio Unmanaged OTT VoIP (e.g. Skype, Viber, etc) Operator-managed OTT VoIP

41,0% Other (please specify)

Source: The status of the LTE ecosystem 2013, Informa Telecoms and Media

9/2/2013

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Operators Survey: When is VoLTE going live?

When do you plan to go live with VoLTE services?

13,4%

6,7%

2013

15,4%

29,5%

2014 2015

2016 2017+

34,9%

Source: The status of the LTE ecosystem 2013, Informa Telecoms and Media 9/2/2013

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Primary voice solution for LTE? What do you think will be the primary solution for voice over LTE for the next 2-3 years?

0,7% VoLTE

9,7%

0,0%

Circuit-switched fallback

7,6% 41,0%

Dual radio

Unmanaged OTT VoIP (e.g. Skype, Viber, etc)

Operator-managed OTT VoIP

41,0% Other (please specify)

Source: The status of the LTE ecosystem 2013, Informa Telecoms and Media 9/2/2013

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Concluding remarks LTE is an evolution, not a revolution VoLTE will gradually happen as a barer technology Barriers are still there: coverage, penetration, roaming Business case for VoLTE as a rich-communication enabler is still unproven but further developments are expected in 2014-15 OTT-communication services are well established and will wok on parallel with operators’ services

9/2/2013

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Questions?

9/2/2013

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Informa Telecoms and Media dario.talmesio@informa.com @dariotalmesio http://www.linkedin.com/pub/dario-talmesio/0/950/2a Dario Talmesio Principal Analysts M: +440794907031 F: +442070175077