Key note contribution to SE Asia Coms 2010 conference on how mobile operators need to adapt their business models and network strategies to the new market environment created by mobile broadband and mobile apps for smartphones.

1. Operator strategies in a new market environment.South East AsiaCom 2010, Kuala Lumpur, Malaysia 20th July 2010. Dr. Kim Kyllesbech LarsenInternational Network Economics, Technology, T-Mobile

2. Story….. 2 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

3. Changing market.Social trends and technological indicators. Socialize Individualize Digitize 2 x as active ! as fixed users 1.60+ bn internet users. Next 1+ bn by 2014. 25+ mn Mobile-TV users in APAC 400+ mn active users. 100+ mn mobile users. 2.5+ bn photos per month 4.1+ bn mobile users. <10% on mobile internet. 20+ hrs video per day $4.5+bn mobile gaming revenue 10+bn mobile apps downloads. 250+ bn e-mails per day. 40+% more than 5 MB. 400+ mn registered users. 86+ mn active ebay users 17 June 2010 3 3 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

4. APAC growth markets 2014 … broadband everywhere? for everyone? 1 out of 10 pop will have mobile broadband. 16 bn Mobile apps at least 1 in 5 by 2016. $9 bn Apps revenue 5 mobile apps per mobile subs. 40+ apps per broadband subs. 4 bn Pops ca. 60-$cent revenue per mobile app. 0.4 bn Mobile BB 6+% of regions data revenue. Source: Pyramid Research. 4 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

5. Devices with solid application-based ecosystem generates substantially more traffic than “normal” handsets. Terminal distribution Corresponding volume 5 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

6. Streaming takes up 60% of mobile user generated http traffic. URL distribution Corresponding volume per URL Note: abovedistributions do notinclude peer-2-peer traffic. 6 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

7. The wired, the wireless and the mobile broadband. 100+ Illustration: relative usage 70↑+ 20 1 1/3 Mobile broadband 850 MHz – 2.1 GHz BWA 2.3 – 2.5+ GHz Fixed with WiFi Mobile broadband: hardly any QoS pricing mainly based on volumetric FUP. Wireless & Fixed Broadband business model uses QoS-based pricing. 7 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

8. The incumbent mobile operator’s near-future … “it aint pretty”! The 3G traffic jam! 3G capacity crunch. Re-farming existing spectrum. New spectrum demand. Empty 2G roads - in time? Re-farming legacy spectrum! 1 MHz in LTE ≈ 5 MHz in 3G. Is it too little too late? 8 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

9. The Greenfield … “happy” short-term, a tougher future. Tougher future … growth limitations. Fixed-like demand! Dramatic Hz / customer drop! More spectrum for growth? Happy startup … plenty of quality. Lots of Hz per customer! Higher speed than HSPA+? ROI optimized? 9 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

10. The beauty of the “beast” Our customer, the smart-phone and its apps 10 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

11. Worldwide now. 10+ billion apps downloads. 2+ apps per mobile sub. 20+ apps per mobile internet user. Drives usage up. 11 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

12. 2014 worldwide. Volume in Exa Bytes! 40+ billion apps downloads. 6+ apps per mobile sub. 26+ apps per mobile internet user. 12 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

13. 1 + 1 = 2 (yesterday’s coms). ………… ……………. ……. …… ..... Mobile network ILLUSTRATION 13 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

14. 1 + 1 is no longer just 2 (1 device - multi-tasking). Mobile network Apple push notification service (APN). Web 2.0 ILLUSTRATION 14 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

15. User, device & application initiated interactions. 1 : m ≈ 1 : 1 User & application initiated bandwidth demand. Device & application (IP addr, keep alive, …) driven signaling resources 1. ILLUSTRATION 1pdp context, radio bearersetup & release, ... 15 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

16. Application initiated (push) interactions. ≈ 1 : 1 m : 1 Application initiated bandwidth demand. Application driven signaling resources 1. ILLUSTRATION 1radio bearersetup & release, pdp context open, ... 16 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

17. New paradigm for operators – user demand is no longer the only customer experience and financial driver. User experience / Capex + Opex / (Volume). Application demanded resources. User demanded throughput & coverage. ILLUSTRATION 17 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

18. Mobile applications stimulates network utilization, and drivers up throughput & signaling load. Site / TRX floor space Spectrum Node Processing capacity Backhaul bandwidth Backbone bandwidth Core Switching, control & policy Web Apps servers content WiFi– Femto HS offload Additional spectral capacity (if available) RNC GGSN SGSN Packet Core Web 2.0 Node LL -> MW -> Fiber -> + Colors + Colors Node + CPU (up-to system limit) Apps specific policies Apps proxies +CPU (up-to system limit) Allocated pdp context Optimized radio resource management (control plane) ILLUSTRATION 18 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile.

19. 20 July 2010 Kim Kyllesbech Larsen, Technology - T-Mobile. 19 Take a-way. 1 + 1 is not just 2. Understand the mobile apps impact on your network. Application management & policing is very important.

20. 20/07/2010 20 Thankyouverymuch! Contact: kim.larsen@t-mobile.nl Tel: +31 6 2409 5202 http://nl.linkedin.com/in/kimklarsen