1. Sus2tución
Fijo
Móvil
W.
Swain
12
June
2012
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2012

2. Agenda
§ Big
Themes
§ General
Framework
§ Why
is
MBB
growing
faster
than
FBB?
§ Is
MBB
a
subs2tute
or
complement
for
FBB?
§ Conclusions
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3. Mobile Internet
projected to exceed
10 billion units/
devices by 2016
Opportunity
ü Yankee
Group
predicts
that
the
total
mobile
service
market
(line
subscrip2ons)
will
exceed
$1
trillion
by
2014
Desktop Internet ü Yankee
Group
forecasts
that
1 Billion+ Units/Devices the
mobile
connected
devices
PC market
(phones,
tablets
and
e-­‐readers)
will
exceed
$435
100 Million+ Units billion
by
2014
ü Yankee
Group
predicts
that
revenues
from
mobile
apps,
cloud
and
adver2zing
will
grow
New Mobile
to
$340
billion
by
2014
Economy ü Yankee
Group
forecasts
the
growth
in
the
value
of
mobile
transac2ons
worldwide
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will
increase
to
$984
billion
by
2014

4. Text
to
Speech
to
Video
1850 1880 1960 1990 2000 2011
Increasing
Bandwidth
Communica9on
modes
do
not
disappear
but
costs
are
transformed
by
technology
and
prices
fall
towards
costs
e.g. Letters to Telegraph to Telex to Fax to Email to SMS to Instant Messaging
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5. Shared
Experiences
To
Personal
Experiences
0% 20% 40% 60% 80%
68%
Live
TV
59%
17%
Game
Console
10%
48%
PC/Laptop
32% Between 48% and
Video Users Mobile
Phone
26%
93% of those under
19%
% who use Under
2 5
Digital
audio/MP3
Player
12% 25 use personal
device at least 7% Total devices at least once
once per day Tablet
5%
Over
2 5
5% per day for video
3%
Handheld
Game
Console
2%
content
Source: Yankee Group U.S. Consumer Survey, 2011 Hispanic Respondents Only
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6. Defined
Place
to
Any
Place
0% 20% 40% 60% 80%
70%
User-­‐generated
videos
54%
36%
Clips
from
TV
shows
20%
35% of those
14%
Full
e pisodes
of
TV
shows under 25 watch
18%
Video Use on a 14% full-length
Full-­‐length
m ovies
Mobile Phone 7% content on their
7% mobile phones
HD
programming
5%
Under
2 5
21%
None
of
t he
above Total
29%
Over
2 5
Source: Yankee Group U.S. Consumer Survey, 2011 Hispanic Respondents Only
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7. Defined
Time
to
Any
Time
0% 20% 40% 60% 80%
68%
Live
TV
59%
Video Users
% who use 1 in 5 use DVRs
device at least 15%
daily
once per day
DVR
/
Time
Shifted
Under
25
22%
Total
Over
25
Source: Yankee Group U.S. Consumer Survey, 2011 Hispanic Respondents Only
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8. Combining
these
trends
favors
Mobile/Wireless
Delivery
for
Video
Content
Defined
Time
to
Any2me
Means
I
Want
It
With
Me
Defined
Place
to
Any
Place
Mobile
TV
or
OTT
TV
on
a
Mobile
TV
or
OTT
TV
on
a
Tablet,
Laptop
or
Large
Smartphone
Screen
Smartphone
IPTV
or
OTT
TV
over
Fixed
Linear
TV
in
the
Living
Room
Broadband
or
WiFi
Shared
to
Personal
Latin Americans are more social so the need for Shared experiences in
Defined Places will persist longer.
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9. Driver
for
Broadband
Growth
is
Video
Although
many
other
Internet
Traffic
in
PB
per
Month
applica2ons
like
Social
70,000
Networking
or
Voip
command
acen2on,
the
60,000 58,214
driver
of
data
traffic
is
Video
in
both
Fixed
and
Mobile
50,000
43,772 Other
Networks.
Voice
over
IP
(VoIP)
40,000
Indeed,
we
might
not
need
Web,
email,
and
data
32,973 Online
gaming
new
mobile
technologies
like
File
sharing
30,000
LTE
were
it
not
for
the
24,477 Video
calling
explosive
growth
of
Video
20,000 17,867
Internet
video
Total
over
Mobile
Networks
both
12,528
via
smartphones
and
via
10,000
dongles
/
modems
/
tablets.
0
2010 2011 2012 2013 2014 2015
Source: Cisco Global VNI, 2012
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10. And
Mobile
Video
Traffic
Grows
As
Well
Just
in
H2/2011,
YouTube
grew
100%
and
HD
YouTube
grew
300%
Video
Streaming
grew
over
9x
Source: Allot Communications, Global Mobile Broadband Traffic Report H2/2011
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11. General
Framework
Page
11
Source:
Yankee
Group
ConnectedView
Mar
2012
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12. General
Framework
Page
12
Source:
Yankee
Group
ConnectedView
Mar
2012
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2012

13. General
Framework
Page
13
Source:
FCC,
Yankee
Group
ConnectedView,
Yankee
Group
Mobile
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Carrier
Monitor
Mar
2012

14. Telecommunica2ons
Revenue
Mix
Tradi2onal
Fixed
Telecom
Latin
America
TEF
Revenues
(Share
of
Total)
revenues
will
flacen
in
terms
100%
of
share
although
obviously
con2nue
to
grow
somewhat
90%
in
absolute
terms
thanks
to
Corporate
Data
and
Fixed
80%
Broadband.
70%
PayTV
is
the
fixed
service
with
the
greatest
poten2al,
60%
M2M
Mobile
D ata
driven
mostly
by
DTH
–
a
Mobile
Voice
wireless
service.
50%
Pay
TV
This
tendency
is
even
Fixed
Broadband
stronger
in
the
graphs
for
40%
Fixed
Voice
Brazil
and
Mexico.
Corporate
Data
30%
We
project
that
Voice
ARPUs
will
con2nue
to
fall
driven
20%
primarily
by
lower
rates,
meaning
that
the
share
of
10%
Data
Revenues
will
con2nue
to
grow.
0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Yankee Group Latin American Forecast, 2012
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15. Why
is
MBB
Growing
Faster
than
FBB?
Demand
Shared
to
Personal
Defined
Place
to
Any
Place
Defined
Time
to
Any
Time
Wait
for
Service
vs
NOW!
Contract
vs
Prepaid
2
to
6
Mbps
vs
42Mbps!!!
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16. Mobile Broadband Cannibalization"
(USB modems, U.K. market data, Q1 2010)
!
Comparison:
All 9% 6%
In Italy 34% of MBB
15-­‐24 12% 11% users do not use
landline BB
25-­‐34 10% 11% Source: Between –
Broadband Report
35-­‐54 11% 6%
Age
July 2010, Company
55-­‐64 6% 2% data
65-­‐74 2% 1%
75+ 1% Fixed
and
mobile
broadband
AB 14% 5% Mobile
broadband
only
C1 10% 6%
Socio-­‐Economic
Group
C2 8% 6%
DE 4% 8%
Own/mortgage 10% 3%
Housing
Rent-­‐private 7% 15%
Rent-­‐government 5% 9%
0% 5% 10% 15% 20% 25%
Percentage
of
Household
Take-­‐up
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16
fcom
Communica@ons
Market
report,
August
2010.
Survey
base:
Consumers
aged
15
and
older
(n
=
9,013)
Source:
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17. Why
is
MBB
Growing
Faster
than
FBB?
Supply
Lots of evidence that carriers (LA and elsewhere) are cutting back FBB
investment (except FTTx)
• No announcements of new ADLS2+ investments and none for VDSL
• Few offers above 6Mbps or very restricted geographically
• Poor quality Outside Plant means upgrading CO equipment isn t the only cost
• Tier 1 vendors selling off their FBB businesses
• Bundling MBB with FBB, encouraging adoption of MBB
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18. Telefonica
Broadband
Offers
Usually
Look
Becer
in
MBB
Than
FBB
Shown
here
are
the
range
of
Speed Range Telefonica Broadband Offers and Entry Prices
speeds
for
FBB
and
the
0 5 10 15 20 25
Headline
speed
for
MBB.
Argentina
FBB US$18.00
Prices
are
for
the
cheapest
Argentina
MBB US$8.09
Postpaid
plan.
Brazil
FBB US$29.76
Brazil
MBB US$16.21
In
AR,
BR
and
CO
the
best
FBB
is
Chile
FBB US$54.35
faster
than
the
best
MBB,
although
in
BR
they
are
close
Chile
MBB US$25.05
and
in
AR,
CO
an
upgrade
to
just
Colombia
FBB US$42.26
HSPA
would
eliminate
the
gap.
In
Colombia
MBB US$12.87
CL
and
PE
the
opposite
is
true.
Ecuador
FBB No
Fixed
Network
(There
is
no
Telefonica
FBB
in
EC,
Ecuador
MBB US$19.00
MX
or
VE.)
Mexico
FBB No
Fixed
Network
Mexico
MBB US$14.87
Headline
prices
for
entry
level
Peru
FBB US$47.70
plans
are
always
cheaper
in
MBB
Peru
MBB US$20.42
although
caps
make
the
customer
experience
completely
different.
Venezuela
FBB No
Fixed
Network
FBB
plans
are
always
unlimited
Venezuela
MBB US$8.27
and
o_en
include
Voice.
Source: Websites, Yankee Group 2012 NOTE: PE is HSPA+ but local regulation prohibits use of 21Mbps “headline”
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19. Is
MBB
Really
a
Subs2tute
for
FBB?
HSPA+,
DC-­‐HSPA
and
LTE
are
becoming
more
efficient
every
day
–
higher
speeds
and
more
capacity
at
lower
cost.
CPE
prices
are
already
compe99ve
(at
least
for
HSPA+
and
DC-­‐HSPA)
Overcome
the
problems
of
bad
copper
If
all
users
in
a
sector
are
streaming
HD
video,
capacity
will
exhaust
very
quickly.
Number
of
users
per
sector
harder
to
predict
than
number
of
users
per
DSLAM
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20. Is
MBB
Really
a
Subs2tute
for
FBB?
§ Incumbent
Fixed
and
Mobile
Operator
in
Denmark
§ LTE
Tes2ng
completed
in
2.6Mhz
in
May
2010
§ Launched
in
10
ci2es
October
2011
§ Delay
from
problems
with
2G/3G
handover
§ Pleased
with
LTE
performance
§ Looking
at
1800Mhz
and
800Mhz
(auc2on
03/12)
§ Doesn t
view
FBB
/
MBB
as
binary
choice
–
complements
not
subs2tutes
§ Both
strategies
require
deep
fiber
investments
Source: Yankee Group 2011
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21. Is
MBB
Really
a
Subs2tute
for
FBB?
MBB
YES
or
Rural?
MBB
FBB?
NO
Low
Fringe
YES
YES
Subs
MBB
Urban?
Density?
NO
NO
MBB
+
DTH
High
HD
NO
YES
MBB
RT
V.
Hi
Video?
Income
FTTH
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22. The
Challenge
is
Video
Esp.
Real
Time
and
HD
If all traffic were just “normal” Internet, latency and
capacity issues would be more tolerable.
The problem is Real Time i.e. Event TV, especially HD
channels which require 4-6Mbps each nearly
dedicated. That means a 42Mbps sector would
saturate with only 7 to 10 active users.
Video conferencing has similar challenges
New multicast LTE technologies (e.g. by
Qualacomm) will eventually aleviate the Linear
TV issue but only in 3-5 years.
The answer is not to deliver Linear HD TV over the
Internet but via Satellite TV.
Normal Internet would use MBB.
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23. What
could
change
about
this
impera9ve?
What
could
impede
it?
§ Lack
of
spectrum
could
prevent
operators
from
responding
to
the
growth
in
broadband
using
Mobile
Broadband
§ A
similar
issue
is
the
backlash
against
towers
–
an
advantage
of
copper-­‐based
solu2ons
is
that
they
don t
go
up
100m
into
the
skyline.
Small
cell
architectures
are
the
mi2ga2ng
strategy.
§ Tiered
plans
and
high
tariffs
could
definitely
put
a
break
on
this
trend
–
or
shim
it
to
WiFi
§ FBB
in
La2n
America
is
s2ll
Flat
Rate
/
Unlimited
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24. Conclusions
§ MBB
has
overtaken
FBB
in
La2n
America
and
Revenues
will
soon
follow
§ The
driver
for
whether
MBB
truly
subs2tutes
for
FBB
is
VIDEO
not
Internet
§ If
all
users
needed
to
do
was
non-­‐video
Internet,
FBB
would
be
DEAD
§ Both
FBB
and
MBB
have
their
roles
in
a
na2onal
broadband
policy
§ Video
usage
and
subscriber
density
are
the
drivers
§ Caps
and
high
tariffs
could
impede
growth
of
MBB
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25. ¡Gracias!
¿Preguntas?
W.
Swain
Managing
Partner,
C3
Comunicaciones
SAS
SVP
Emerging
Markets,
Yankee
Group
wswain@yankeegroup.com
wswainla@gmail.com
www.MacondoTelecom.net
@WSYGLA
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