WiMAX Forum Global Congress09, 2- 3 June 2009, RAI, Amsterdam, The Netherlands.

1. Maximizing the Growth Market BWA Business Plan WiMax Forum Congress Global09 Amsterdam, June 3rd, 2009. Kim Kyllesbech Larsen Technology, T-Mobile International

2. Story. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. BWA Greenfield in growth markets. BWA spectrum availability. Maximizing the BWA value. Technology migration towards LTE * - when, why & how. Partnerships.

3. Broadband wireless access vision. Technology enables Connected Life and Work …. At home. On the move. At work. Connecting the next 1 billion un-connected

4. Connecting the un-connected at home. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Years Growth markets PC & FBB penetration (of Households) PC FBB: Fixed Broadband BB: Broadband FBB GROWTH MARKETS will drive the demand for Broadband Wireless Access will have a substantial proportion of HH un-connected. will have more than 60% of all new broadband connections fixed broadband infrastructure access is poorly developed. today will drive the demand for Broadband Wireless Access 50% BB ≥ PC Years Mature markets PC & BB penetration (of Households) today

5. Internet connectivity is more than “just” fixed. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Years Growth market PC and broadband penetration (of population) FBB: Fixed Broadband WBB: Wireless Broadband today PC WBB FBB Fixed-based offering (i.e., CPE-based) is often the right starting point for a BWA startup business. Nomadic (i.e., dongles & data cards) and limited-mobility services (i.e., handsets) can be offered within the coverage footprint Explore enhancing the business model towards quadruple play service enablers Access, Voice/text, Broadcast & Mobility.

6. Is a profitable BWA business viable in Growth Markets with very low ARPU? ARPU Zone T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Nominal GDP per capita per month ARPU trends * Only major growth markets considered: China, India, Thailand, Philippines, Vietnam, Indonesia, Malaysia. $0 $10 $20 $30 $40 $0 $200 $400 $600 APAC * Source: Pyramid Monthly spend trends : Mobile <3.5 %> GDP/Capita DSL <10%> of GDP/Capita High prepaid share <87%> with typical >90%. Annual ARPU decline anticipated across all cats. xDSL / Cable Mobile Prepaid Mobile Contract Mobile blend India China

10. TDD spectrum at lower frequencies are scarce. T-Mobile UK & Orange TD-TV T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. UL (75 MHz) DL UL (35MHz) DL UL (70 MHz) TDD (50 MHz) DL 900 MHz 1,800 MHz 2,500 MHz UL (60 MHz) DL 2,100 MHz TDD part TDD 2,300 – 2,400+ MHz part TDD This band provides interesting backhaul P2P options in some Greenfield scenarios 3,400 – 3,500+ MHz China: SD-CDMA alloc. UL DL 400 MHz UL DL 700 MHz Coverage Capacity TDD T D D (20 MHz) (15 MHz) (20 MHz) Source: TeleGeography - WiMAX Research Service, Q4 2008. Note: Ignoring traditional WiMax frequency at 3.6 GHz, 4.9 GHz and 5.8 GHz. Airway in China TDD BSNL in India

13. The potentially biggest entry opportunity in a Growth Market is by targeting the un-exploited households demand for internet access. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. HH PC FBB today +5 Years 10 mio 28 mio 62 mio +1.4% pa 0.7 mio 1.5 mio 1.2mio 0.8 mio 0.4 mio 0.1 mio Subscriptions Opportunistic business model targeting high-value city-based customer segment providing high-quality * broadband wireless access. ILLUSTRATION of TOP-20 City-based coverage business model: * Compared to the relevant market.

14. Business model – building the network. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Years New Sites / Nodes 1 2 3 4 5 12 Illustration Basic Sites Special Sites Capacity Nodes Modernization Nodes 2 10 20 20 Cities covered 2.5 5.2 6.8 7.7 In millions HH coverage 1.0 3.3 5.4 5.7 1 Area covered In thsd km 2 0.1 0.4 0.8 2.3 In millions Subscriptions 1.2 1.5 300 800 1,300 2,100 (unique sites) BWA Nodes 1,600 300 500 500 300 50 50 25 53 55 57 59 61 300 500 500 300 353 562 537 364

17. Business model – financial dynamics. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. 1 2 3 4 5 6 7 8 9 10 11 12 Years Subscriptions Financial Revenue Opex Ebitda GROWTH OPTIMIZATION ARPU $22 pm $15 pm 2.3 mio Illustration 0 0 Market

18. Business model – BWA quality does not need to be pricy. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Yr1 Yr10 38 30 23 15 8 0 ARPU CAGR -3% Subscriptions NPV 10Yr > 0 NPV 10Yr < 0 Illustration ARPU per month 20 50 40 30 10 0 Fixed DSL price range in growth markets $20 – $40 per month

19. Migrating to the next radio access technology – how to continue? T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Next-generation WiMax (802.16m/TDD-LTE) will become available in the next 2 to 5 years (2011 – 2014). Spectrum management issues. Use part of existing spectrum (if capacity allows). Obtain additional spectrum (should always be pursued). Backwards compatibility with previous technology should be safe-guarded (by standardization & innovation). CPE equipment could be designed to be future proof. (i.e., supporting both 802.16e and LTE * ). LTE standard backwards compatible (e.g., 802.16m). (if capacity allows). (should always be pursued). * Subject to chipset availability.

21. The Growth Markets BWA business model is highly promising. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Addressing inherent high demand for internet access. BWA-based DSL is often only option for internet access. Powerful substitute for poor fixed “DSL/cable”. Potential to out-perform UMTS/HSPA in raw IP-throughput and scalability providing an equivalent grid. TDD spectrum is relative cheap (compared to FDD). WiMax is here now!.

22. The mature markets business model might not be as promising. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Broadband & PC penetration window closed. High fixed broadband (i.e., >70% * ) penetration. Very high mobile (i.e., >100%) penetration (saturation). Existing high-quality / multi-faceted broadband service offerings (i.e., multi-play) at relative low pricing. Entering a saturated, highly competitive and efficient market with multiple mobile and fixed operations. * In Western Europe

23. Greenfield challenges to look out for. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Information Technology (not an afterthought) Backhaul connectivity Service management Measure your customer Site sharing possibility (speedy rollout) The right partnering (strategic & financial) Manage bandwidth Regulatory policy & support Backbone & Interconnect connectivity Opportunity based Network rollout Network Turnkey & managed services Technology choice now & tomorrow

24. Partnership. T-Mobile International AG & Co. KG Confidential and Proprietary All rights reserved. No part of this report may be reproduced in any material form without the written permission of the copyright owner. Deutsche Telecom Group is one of the biggest Telco's in terms of purchasing power of Mobile and Fixed infrastructure. Procurement benefits & synergies by leveraging on more than 160 thousand operational radio-nodes. Benefit from network design, planning & operational excellence from operating 17 mobile networks and serving more than 120 mio. customers worldwide. Leverage on Fixed, Mobile and ISP operational know-how.

25. Thank you for your attention. Contact details : [email_address] M +31 6 2409 5202 http://www.linkedin.com/in/kimklarsen Acknowledgement: Many thanks to Stefan Wilhelm (DTAG), Minoo Abedi (T-Mobile), Alan Yeo (DT Asia), Dirk Schoneboom (T-Mobile) for invaluable discussions and challenges and the many entrepreneurs that I have had the privilege to meet and discuss with over the last couple of years.