Presented at the Broadband Traffic Management Congress in London on November 16th, 2010.

1. Optimizing LTE infrastructure upgrades and CapexBroadband Traffic Management Congress, 16. Nov 2010 Dr. Kim Kyllesbech Larsen, Network EconomicsDirk Schöneboom, Network EconomicsTechnology, T-Mobile.

3. Controlling costs of network expansion without compromising customer experience

4. Modelling future terminal penetration and projecting traffic migration to LTE

5. Understand why LTE is no short-term saviour for operators addressing the capacity crunch

6. Traffic migration in spectrum limited operations

9. Additional carrier

10. Sectorization (6-sector site)

11. Additional Site Today's 3G networks can carry considerably more traffic with only incremental additional costs RAN Capex per upgrade option 3G LTE Capex SW upgrade extra carrier 6-sector site new site new site (co-loc)

13. 10% of users account for > 70% of the data traffic

14. 1% of users account for > 25% of the data traffic

15. 0.1% of users account for > 10% of the total data trafficUnit usage Datacard Other Smartphones iPhone Non-Smartphones

17. The majority of the network can easily accommodate the increase in data traffic Despite the strong growth in data traffic demand, network costs increase only incremental Traffic distribution over sites traffic Capacity limit (today) Tomorrow Today % of sites

18. 20/01/2011 7 Cell BH throughput / user Traffic Management Throughput / user 3G acceptable limit today future Controlling costs of network expansion without compromising user experience Don’t panic if throughput per user goes down… ….because this can be alleviated by traffic management measures  By introducing traffic management measures necessary RAN upgrades can be shifted in time, or even prevented altogether Cell BH throughput / user LTE Throughput / user 3G acceptable limit Action: RAN capacity upgrade today future

20. Result of terminal penetration modelling:

21. In 2015 > 50% of the Datacard customers have LTE-enabled terminals

22. In 2018 > 50% of the Smartphone customers have LTE-enabled terminalsLTE terminal penetration 100 % Datacards 50 % Smartphones

24. When “peak 3G” will be reached, depends on

25. LTE terminal penetration, LTE rollout, LTE frequency deployment band etc It will take several years after LTE launch until 3G traffic stops growing Traffic per terminal technology Traffic per network TB/month TB/month LTE LTE 3G traffic peak (3G terminals) 3G 3G

27. Once we know “peak 3G”, we know when no more capacity upgrades are necessary for 3G

28. From Capex perspective it would be best if 3G traffic demand would be stable over a longer period Use traffic Management measures to “flatten out” the peak demand of 3G in order to minimize 3G Capex during traffic migration to LTE TB/month LTE 3G time today

30. In which spectrum bands LTE can be deployed depends

31. Spectrum demand of legacy technologies

32. Licence duration of existing spectrum assets

33. Availability of new spectrumFuture Spectrum demand (LTE) Future Spectrum demand (Legacy technologies) MHz 2600 MHz 2100 MHz 1800 MHz 900 MHz 2010 2012 2014 2016 2018 2010 2012 2014 2016 2018

35. 3G provides lowest incremental costs

36. LTE is most cost efficient in long-term

37. LTE is no short term saviour for operators addressing the capacity crunch

38. 3G traffic growth will reverse only several years after LTE launch

39. Utilize traffic management measures to flatten out the peak demand of 3G

40. Optimize Capex spend during traffic migration

41. Full utilization of existing 3G assets1 Note: Ultimately the absolute cost matters not the relative cost.

42. Thank You!