MOBILE BROADBAND

1
MOBILE BROADBAND

• Business opportunity for mobile operators

Rachid Chihani Ericsson
2
Hidden Slide
Setting the scene
3
This is Mobile Broadband
4
Everywhere coverage
This is Mobile Broadband
5
Full mobility
This is Mobile Broadband
6
High data speeds
This is Mobile Broadband
7
This is Mobile Broadband

• Broadband access for Laptop users
• Always on, high speed Internet access

• Nation wide coverage
• Stationary and on the move, Indoor and outdoor
• Powered by 3G networks
• WCDMA / EDGE / CDMA2000
• Global availability
• Roaming gives broadband freedom across the borders

8
This is Mobile Broadband
BroadbandEverywhere
9
Hidden Slide
Market drivers
10
Broadband Access
One of the fastest growing new services in history
Lines

• Historic Growth Rates
• Broadband120 CAGR

Broadband take-upis even faster than mobile

• Mobile Telephony110 CAGR

CAGRCompounded Annual Growth Rate,period
1998-2003
Sources Ericsson estimates
11
Broadband everywherethe starting point and the
potential
2004
157 million subscribers
400 million subscribers
2004
2009
12
Established end-user behavior
Key success factor for building a mass market
13
The Personal Computer goes mobile
A mobile terminal is not always a mobile phone
Computer Sales

• PC Trends
• Fast growth
• Shifting from householdto personal device
• Mobility is built-in
• PC is a complement tothe mobile phone
• Equally attractive toenterprise and
  consumermarket

000
Desktop, US
Laptop, US
Desktop, WE
Laptop, WE
Source IDC, 2003
25.7 Laptop PC sequential growth rate 2004E
Source forecast by JPMorgan, August 2004
14
Laptops are cheap enoughfor the mass-market
Could subsidies be used to drive up-take?
550 VAT
550 VAT
Note 14,1 TFT screen, 2,2 GHz Celeron CPU,
Windows XP, Colour printer, 256 Mbyte RAM,
30Gbyte disk, 24X CD-RW/DVD, Misc SW, 802.11b/g
WiFi card, Ethernet card, 56k modem
15
Broadband serving society
Connecting everybody is a top priority!
Mobile Broadband powered by 3G is a key enabler
16
Hidden Slide
Mobile Operator Opportunity
17
Mobile Broadband doubles ARPU
ARPU Comparison (excl VAT)
/month
Mobile tel.
256kb/s
512kb/s
2Mb/s
8Mb/s
ARPU
Source Merril Lynch, Global Wireless Matrix
Q104. Nordic incumbent operators web site.
18
Revenue structure
Broadband services are high quality revenues

• Mobile Broadband
• Significant share of revenues
• Proven mass market appeal
• Permanent revenue stream
• Simple business model
• Mobility premium available

Mobile Broadband Flat rate
Mobile Data Services
GPRS and MMS
Voice, video SMS bucket plan

SMS
Voice
80
2G
3G
Typical User revenue split by service type
Advanced markets, Analysys Research 2003
19
Hidden Slide
Why 3G
20
3G Mobility
and Everywhere coverage
on the move, country side or down town, at home
or work
21
Capitalize on 3Gfor Mobile Broadband
Anywhere globalcoverage
Telecom gradeservice
Open international standards IMT2000
Economy of scale
A huge un-tapped market can be addressed today
22
Capitalize on 3Gfor Mobile Broadband
Leverage existing assets

• Frequency Spectrum
• Subscriber base
• Network
• Sites, Radio and Core network, Transmission
• Operation and Maintenance system and staff
• Subscriber management systems
• Authentication, Charging

23
Mobile Broadband in Europe
A huge un-tapped market can be addressed today
466M
Population
Sources March 2004 EMC Research, Point Topic
2004, Computer Industry Almanac 2004
24
Mobile broadband may look gloomy
Revenue per Megabyte traffic
Revenue per MB (US)
100 000
SMS logo/ringtone
10 000
Mobile Broadband US 80 per month 4 GB per mont
h (avg.)
0.02 US/MB
Premium SMS
1 000
SMS
100
MMS
10
Peak time voice
Video telephony video clips MP3 track
1
Off peak voice
0.1
Peak time voice
Low user
Off peak voice
Mobile Broadband user
0.01
Broadband territory
High user
0.001
Technology
2G
PSTN/ISDN
DSL
3G
3G Evolved
Analysys 2003 Ericsson estimatets 2004
25
...but volumes more than compensate!
Daily capacity per WCDMA site with HSDPA
1 carrier
3 carriers
4Mbit/s x 3 sectors x 3600 s x 24 h/8
130 000 Megabyte/Day
400 Gigabyte/Day
Theoretical revenue potentialUS 1.5 million
per site and year _at_ 1 cent/MB
26
Mobile Broadband
Its already happening
Web advertisements, H2 2004
27
Hidden Slide
Why WCDMA / EDGE / CDMA2000
28
WCDMA
A natural choice for Mobile Broadband

• WCDMA a true globalstandard
• Nation wide coverage
• Economy of Scale
• Future proof WCDMA Evolved
• Roaming on all continents

29
EDGE
A fast track to Mobile Broadband

• 1,4 billion people are justa software upgrade
  away
  
• EDGE/GSM the trueglobal standard
• Nation wide coverage
• Roaming on all continents
• True Mobility
• Economy of Scale

30
CDMA2000
The Mobile Broadband pioneer

• 8.5 million (DO) users today
• CDMA a true globalstandard
• Nation wide coverage
• Economy of Scale
• Broad frequency range
• 450, 800, 1900 MHz and 2.1 GHz
• Future Proof Upgradeable to all Evolutions

31
Summary

• Broadband
• Fast growth
• Established behavior
• Revenues
• Powered by 3G
• Leverage existing assets
• Future proof
• Economies of scale

32
(No Transcript)