In this presentation, Ronan de Renesse explores various scenarios where 4G retains the ability to help drive mobile data revenue growth, but without the heavy price tag. It was delivered at an event organised by Cambridge Wireless entitled '4G and Beyond: The Mobile Landscape in the UK after the LTE Auction' in London, UK, on 8 May 2013.

1. Source: Analysys Mason, 2013
The Role of 4G in Mobile Data
Monetisation
Presentation for Mobile Broadband SIG
8th May 2013 • Ronan de Renesse, Principal Analyst

2. Source: Analysys Mason, 2013
Smartphones take a large share of data revenues
but LTE has more value to offer to MBB
2
Share of mobile data connections and revenues by device type – UK, 2008 and 2012
The Role of 4G in Mobile Data Monetisation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Connections Data
revenues
Connections Data
revenues
2008 2012
Mobile broadband
Smartphones
LTE

3. Source: Analysys Mason, 2013
0
1
2
3
4
5
6
7
2010
2011
2012
2013
2014
2015
2016
2017
2018
Numberofconnections(million)
Large-screen (LS) Mid-screen (MS)
Tablets are driving a major shift in mobile
broadband device mix
▪ New market data led us to reduce our
MBB forecast significantly
▪ Key assumptions:
– Tethering replaces dongles
– Connected tablets replace laptops +
dongle
– Competition from WiFi
– Attractive fixed broadband bundles
▪ Shift in spend and mobile data
consumption, not an absolute decline
▪ Residential complementary connections
are most exposed
3
Mobile broadband forecast by device
type, UK, 2010-2018
The Role of 4G in Mobile Data Monetisation

4. Source: Analysys Mason, 2013
Tablets could contribute more
4
Tablet owners by device capabilities -
UK
Tablet owners by device origin – UK new
tablets
Source: Connected Consumer Survey, 2013
45%
36%
19%
Wi-Fi only
3G - connected
3G - not connected
22%
49%
29%
Service provider (operator)
3rd party (retailer)
Gift (family and friends)
The Role of 4G in Mobile Data Monetisation
LTE
LTE

5. Source: Analysys Mason, 2013
33% of UK smartphone owners also have a tablet
and a laptop
5
UK smartphone panel by tablet and
laptop ownership
Connectable device ownership for UK
smartphone users
Source: Connected Consumer Survey 2013
2%
59%
33%
6%
Tablet Laptop
Tablet & Laptop Neither
The Role of 4G in Mobile Data Monetisation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Laptop
PMP
HHconsole
Tablet
eReader
ShareofUKsmarphonerespondents
LTE

6. Source: Analysys Mason, 2013
Multi-device works in the US but can it be
applied to Europe?
▪ AT&T and Verizon launched in 3Q 2012
– 2 million subscribers signed up for
AT&T’s plan first 2 weeks after launch.
– 90% of AT&T smartphones are on a
shared plan, more than a quarter are on
a 10GB per month plan.
– Verizon has changed its reporting to
‘average revenue per account’ (ARPA),
reporting an average of 2.64 device
connections per account.
– AT&T reports an average of 3 devices
per account.
6
Price per gigabyte of selected mobile
data plans, USA
Data
plan
Price per gigabye (USD)
AT&T
‘Mobile share’
Verizon Wireless
‘Share
Everything’
1GB
85
(40 + 45 per
phone)
90
(50 + 40 per
phone)
6GB
20.33
(90 + 35 per
phone)
20
(80 + 40 per
phone)
10G
B
15
(120 + 30 per
phone)
14
(100 + 40 per
phone)
20G
B
11.5
(200 + 30 per
phone)
Offered, but not
quoted
The Role of 4G in Mobile Data Monetisation

7. Source: Analysys Mason, 2013
0%
5%
10%
15%
20%
25%
30%
35% Poland
UK
Spain
USA
France
Germany
Percentageofrespondents
LS only MS only LS & MS Tethering Personal hotspot
Europe responds better to tethering than multi-
device tariffs
7
Share of respondents using MBB services, mobile hotspots and tethering – October 2012
Source: Connected Consumer Survey 2013
The Role of 4G in Mobile Data Monetisation
LTE

8. Source: Analysys Mason, 2013
Mobile data pricing strategies are capital to
secure future mobile data monetisation paths
8
Unlimited (capped or throttled)
Maximum available
speed
Reduced speeds
More usage at
maximum speed
Monetisation path
Openly advertised data allowance
More usage at
maximum or reduced
speed
Limited usage at
maximum speed
No more usage until next
billing period
Monetisation path
Truly unlimited
Maximum available speed
Monetisation path
Higher-speed
usage
The Role of 4G in Mobile Data Monetisation
LTE LTE
LTE

9. Source: Analysys Mason, 2013
UK view: volume-based (EE) versus unlimited
(3UK)
9
iPhone 5 32GB 24 months TCOSIM-only smartphone 12 & 1 month deals
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0 5 10 15 20Totalcostofownership(GBP)
Data allowance (GB per month)
EE 3UK_500
3UK_2000a 3UK_2000b
3UK_2000c
-
10
20
30
40
50
60
70
0 5 10 15 20
Monthlyfee(GBP)
Data allowance (GB per month)
EE 3UK_200
3UK_600 3UK_2000
The Role of 4G in Mobile Data Monetisation

10. Source: Analysys Mason, 2013
How long will 4G price premiums hold for?
10
Allowance versus access charge for entry-level 4G LS MBB services – Q4 2012
The Role of 4G in Mobile Data Monetisation

11. Source: Analysys Mason, 2013
Market drivers and inhibitors for 4G adoption
11
Service availability
− Network coverage
− Number of operators with LTE
Service/Network quality
− It’s not just about speeds (e.g. VoLTE,
VAS services)
Cheaper mobile data charges
− 3G/4G tariff differentiation to disappear
2 years after launch, quicker for
handsets
Devices
− LTE devices should be made available
to customers as soon as possible
Expensive mobile data charges
− High 4G price premium hinder overall
adoption
Lack of devices
− Not that many devices yet available on
800MHz and 2600MHz
− 4G devices too expensive
The prepay market
− 46% of UK handset connections are on
prepay tariffs
Devices on long replacement rates
− Tablets have longer replacement rates
than smartphones
The Role of 4G in Mobile Data Monetisation

12. Source: Analysys Mason, 2013
4G UK forecast – 47% of mobile connections will
4G active by the end of 2018
12
4G UK forecasts by device type, 2010-2018
The Role of 4G in Mobile Data Monetisation
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
10
20
30
40
50
60
2012 2013 2014 2015 2016 2017 2018
4Gshareoftotalconnections(%)
4Gconnections(million)
4G M2M
4G MBB
4G handsets
4G% of total

13. Source: Analysys Mason, 2013
Thank you
13
Ronan de Renesse
Principal Analyst
Ronan.deRenesse@analysysmason.com
Twitter: @Ronan_AM
The Role of 4G in Mobile Data Monetisation