Presentated at CANTO 2013, July 17, 2013 José Villalobos Senior Consultant Region Latin America and the Caribbean

1. Monetizing LTE
How LTE can help operators
become more profitable
José Villalobos
Senior Consultant, Latin America & Caribbean

2. Public | © Ericsson AB 2013
LTE Growth
and Drivers

3. Public | © Ericsson AB 2013
fastest developing
Technology
Source: GSA, May 2013
146
46
16
2
175
73
2013
+30
+102
+100
+14
248
2010 201220112009
+132%
Commercial LTE network launches - cumulative totals
Forecasted
› Latin America LTE
subscriptions (Pop Coverage)
› 2012: 200k (5%)
› 2018: 95M (over 50%)
› Early adopters:
› Puerto Rico
› Dominican Republic
› Antigua and Barbuda

4. Public | © Ericsson AB 2013
better devices and
cool apps
Other
Encrypted
Software
download &
update
Social Networking
Web browsing
Audio
Video
File Sharing
X2
MOBILE DATA TRAFFIC
DOUBLED BETWEEN
Q4 2011 AND Q4 2012
Source: Ericsson Source: Ericsson
Mobile data traffic breakdown, 2012

5. Public | © Ericsson AB 2013
Exploring the Drivers
Source: Infonetics Research, LTE Deployment Strategies:
Global Service ( n = 19, July 2012)
Source: Informa Telecoms & Media. 52 operators with
live LTE networks globally (as at April 24, 2012)
5%
Offer LTE as fixed
broadband service
16%
Lack of spectrum 26%
Denser network coverage 32%
Natural evolution of existing
generation to the next one
11%
Ability to run single network
for voice and data
Opportunity to build a more
efficient mobile packet network
37%
Current data network exhaustion 58%
Higher peakrate 58%
Increase ARPU 63%
Lower Latency 68%
Better spectral efficiency 79%
7%
31%
35%
24%
3%
Create new revenue streams based on LTE
Other
Current networks do not offer sufficient capacity
To enter mobile data market for the first time
Build brand value through technology leadership
What is your primary motivation for
deploying LTE?
Percent of respondents Rating 6 or 7

6. HOW IS LTE impacting
Profitability??
1 LTE launched (LGU+ & SKT)
~11% LTE penetration
~28% LTE penetration
2
3
SKT LGU+ KT KOSPI

7. Public | © Ericsson AB 2013
107
Million
(>1M TDD)
LTE SUBSCRIPTIONS
May 2013
Source: WCIS
2
Billion
LTE SUBSCRIPTIONS
END 2018
Source: Ericsson
Dec
2010
34%
SKT
NTT
LGU+
KT
Sprint
32%
MetroPCS
53% 29%
AT&T
13%
Softbank
11%
Telstra
5%
10%
19%
22%
Verizon
LTE Subs (M)
Non-LTE Subs (M)
Dec
2010
Sep
2011
Jul
2011
Jul
2012
Jan
2012
Sep
2011
Sep
2010
Sept
2011
Feb
2012
USA
54
Korea
22
Japan
16
Australia
5
Rest of
World
10

8. Public | © Ericsson AB 2013
ARPU Uplift due to LTE
-15
-10
-5
0
5
10
15
20
3Q11 4Q112Q111Q11 1Q12 2Q12 3Q12 4Q12 1Q13
SKT
KT
LGU+
3Q11
3Q11
1Q12
Service ARPU, % Change YoY
First LTE Smartphone
Source: Operator Quarterly Reports
50
41
34
+21%
+48%
LTESmartphoneBlended
ARPU
ARPU 4Q12 (KRW ´000)
Source: SKT IR 4Q.2012
› 8X (SP)› 1.5X (SP)
› 2-5X
(LTE users)
Source: Disclose by Operators

9. Public | © Ericsson AB 2013
LTE DATA Monetization
Data Allowance
3G LTE
No Change
550MB
1.1GB
2GB
5GB
9GB
13GB
@ Launch Q2 2012
Removed unlimited plan
Higher Tariff Plan with
understanding of 3G ave
data.mth/subs + trends
Increase the bucket size
SKT Smartphone Plan
(3G vs LTE)
Monthly (USD) Data Allowance
3G LTE 3G LTE
All-in-one 34 vs LTE34 30 30 100MB 350MB
All-in-one 44 vs LTE42 38 37 500MB 700MB
All-in-one 54 vs LTE52 47 45 Unlimited 1.2GB
All-in-one 64 vs LTE62 56 54 Unlimited 3GB
All-in-one 79 vs LTE72 69 63 Unlimited 5GB
All-in-one 94 vs LTE85 82 74 Unlimited 7GB
LTE based residential Broadband
Caribbean Residential Internet
Source: Pyramid Research, 2012
Source: Disclose by Operators
Source: Operator Web Page
9%
9%
51%
1%
27%
3%
Cable FTTXNarrowband
xDSL FWA WiMAX

10. Public | © Ericsson AB 2013
customer
loyalty
Drivers of loyalty to operator brand (NPS)
LTE
LTE
Source: LGU+ Analysis

11. Aiming
for LTE
monetization
Spectrum
and Network
Branding
and
Marketing
Service
and Device
Portfolio
Positioning
and Pricing
Strategy

12. Public | © Ericsson AB 2013
LTE ecosystem
316 Smartphones
Source: GSA, Jul, 2013
USA
US700
AWS
Mexico
AWS
Colombia
2600
Uruguay
AWS
Paraguay
AWS/1900
Brazil
2500/2600
Chile
2600
Europe
2600
1800
Puerto Rico
US700/2100
Antigua & Barbuda
US700
Dominican Rep.
1800/1900

13. Public | © Ericsson AB 2013
GSM
Macro
LTE
WIFI
850
900
1800
1900
AWS
2100
2600
700
Indoor
Micro
Pico
HSPA
Data
Voice
CDMA
Application coverage concept

14. Public | © Ericsson AB 2013
Boosting the need for LTE
Source: Wireless Intelligence, September 2012

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positioning and Pricing
PREMIUM
PRICING
MBB
EXTENSION
BRAND
REFRESH
2
14
3
MBB Ext Brand Refresh
1
LTE Smartphone Data Plan
(Top 20 LTE Subs Operators)
Speed-Consumption Hybrid
Consumption-based
Unlimited
Source: Operators Web Pages, Jul 2013
Source: Wireless Intelligence, Analysis Mason
Dongle tariff
› 49% speed-based (Aug 2012)
› Western Europe (2Q12 to 4Q12)
› 33% operators merged 3G/LTE
› Price decreased by 6%

16. Public | © Ericsson AB 2013
CLEAR value benefits
User z (Germany)
Source: Speedtest.net

17. Public | © Ericsson AB 2013
LTE Monetization
LTE Growth and
Drivers
- Fastest Adoption
- MBB Demand
- Video Apps
- Revenues
Brand
Spectrum
Performance
How is LTE
Impacting
profitability?
- Subs
- ARPU
- Better Pricing
- DSL-liked
- Customer
loyalty
Aiming for LTE
monetization
- Ecosystem
- App Coverage
- Smartphones
- Clear Value
Proposition
- Price levels
- Transparency

18. Public | © Ericsson AB 2013
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