1. In-flight Cellphone Use What’s the real story and what’s the US missing? Adla Hendry, AeroMobile

2. 100% owned by Telenor, 7 th largest Telco worldwide First and foremost a mobile service provider with an airborne network Regional offices in Dubai, Singapore, Oslo, and Seattle >70 wide body cellular deployments today Commitments from national flag carrier airlines (Emirates, Malaysian Airlines, Turkish Airlines, V Australia, Lufthansa) Hardware sold via Panasonic – branded eXPhone Briefly… an update about AeroMobile AeroMobile / Panasonic Avionics Corporation. Best Achievement in Technology 2008

3. Agenda What’s Happening on the Ground? –Network Evolution –Handset and Application Trends How Does This Translate to the Cabin? What’s the Real Story on Usage? What is the US missing?

4. Agenda What’s Happening on the Ground? –Network Evolution –Handset and Application Trends How Does This Translate to the Cabin? What’s the Real Story on Usage? What is the US missing?

5. Pervasiveness of Cellular... 3.9 billion subscribers, 80% worlds population covered by GSM networks 1991 (first GSM call), 1992 (first SMS sent), 2000 (GPRS launched) Next 5 years Mobile broadband will go mass market outstripping fixed line. GPRS (≈40Kbs), EDGE (≈ 120Kbs), 3G (≈ 384Kbs), HSPA (>1Mbs) and LTE (≈ 100Mb/s) Mobile devices support multiple protocols and have the intelligence to switch between them as appropriate Mobile operators struggling to keep up with new data demands. iPhone, Social Networking, proliferation of Smartphones Mobile communications becoming medium of choice Convenience, immediacy, personalisation & ubiquity Already dubbed the “fourth screen” after television, cinema and pc. First movie released straight to mobile – 28th September 09 Source: GSM Association Cellular services have become ubiquitous over the last 9 years. Aircraft purchase decisions being made for >10 years

6. Cellular Network Speeds Experiencing Exponential Growth The first 4G LTE networks are already being rolled out... UMTS W-CDMA HSDPA/HSUPA GSM / GPRS / EDGE LTE (Long Term Evolution) ~ 200 kb/s(~ 0,5-2 Mb/s) ”ADSL” (~ 5-20 Mb/s) Estimated bit rate per user ~ 400 kb/s Richer services Source: Telenor 2G 2.5G 3G 4G

7. Mobile Devices: iPhones have changed the ‘Rules of the Game’ DeviceExampleFeatures iPhone Heavy focus on media and mobile internet services. Browser usability is key strength Offer camera phone, video and other services Smart Phones OS mirrors PC allowing productivity applications. Often with QWERTY keyboard. Touch screen models & hybrids increasing. 40% penetration expected in 2013. 80% of new Blackberry subscribers have been non- corporate customers Features Phones Converging on Smartphone's but less powerful OS. Targeted at consumer / lower cost [Source Canalys - 2 Nov 09] Handsets support multiple protocols: 2G, 2.5G, 3G, WiFi By 2012, 25% of all handsets shipped in the US will be WiFi-enabled

8. We’re still using significantly more data on our laptops than on our handhelds Laptop Per month: 0.5-20 GB High end Per month: 0.1 GB + always on Low end Per month: 0.03 GB + always on Source: Nokia Siemens Networks N95 10x average user IPhone 3x N95 Laptop 10x IPhone Usage Patterns by Device

9. Growth in Mobile Data Applications 65 Million Facebooks users Worldwide Source: http://www.insidefacebook.com/2009/09/03/worldwide-facebook-mobile- usage-up-300-in-last-12-months/ Mobile Social Networking Usage – US And they’re not all young! Source: comScore

10. Mobile Data Traffic via Handheld Device is Growing Growth is driven by higher capacity networks, faster devices, and burgeoning applications used across all age groups

11. Agenda What’s Happening on the Ground? –Network Evolution –Handset and Application Trends How Does This Translate to the Cabin? What’s the Real Story on Usage? What is the US missing?

12. GSM / GPRS network Access through mobile phone and smartphone (iPhone, Blackberry), laptop with GSM/GPRS card Voice calls, texting (SMS), e-mail and limited web-browsing (GPRS) WiFi or wired IP network Access through WiFi device (laptop or WiFi PDA), Ethernet cable at seat, or seatback IFE “Live “ Internet Web browsing, VPN support, VOIP, Video-conferencing, IPTV

13. Passenger sees on-board network when mobile phone is switched on in-flight No sign-up required: passenger’s home GSM provider has roaming agreements with on- board Service Provider Airborne service appears as line item on passenger’s bill from home GSM provider Exactly the same process as when using roaming abroad Roaming prices set by home GSM provider Roaming charges typically similar to European users using their phones in North America Passenger Experience GSM Network

14. Passenger turns on laptop while in- flight On board WiFi network appears: passengers connect as they would with a terrestrial WiFi network Launching browser brings up the Airline’s customised landing page Passengers have access to Walled Garden with free content: –Panasonic Baseline Content –News, Sports, Financials –Weather (destination city as default) –Current Flight Information (Time to destination, etc.) –Travel Guide –Magazine Rack –Sample Airline-Specific Content –Airline Info –Airline Loyalty Program –Airline Partner Information Passengers access the Internet by using their ISP (or supported roaming provider credentials) or pay with a credit card Supports VPN, corporate e-mail, video streaming, large downloads, etc. Passenger Experience WiFi Network

15. Which Network Will be Accessed in the Air? Passenger behaviour in the air is influenced by their typical behaviour on the ground - people use their mobile devices differently from how they use their laptops Mobile devices typically still first choice for making phone calls when on the go; VOIP over laptop or mobile device more likely to be used at home/in the office Use of mobile device might depend on what network is available, the speed, whether or not it has to be paid for, and the application If a user wishes to use his/her mobile device to check email quickly without logging onto the WiFi network, the GSM/GPRS network can be accessed transparently If a user wishes to use his/her mobile device or laptop to browse the internet, synchronise Outlook mail, download attachments or use a data intensive application, more likely to pay for a WiFi session Passengers will want to use their devices and applications in the air the same way they do on the ground

16. Do I Need both Cellular and WiFi on Board? Yes – if you want to offer the service for the widest possible range of devices, to largest possible number of passengers VOIP not a full alternative to GSM voice –Installation of SIP client required on WiFi Smartphone –Phone number is anonymous –Not used by the mainstream on WiFi handsets Texting (SMS) is still one the most used applications (including Twitter) Blackberry email compression makes GPRS/EDGE a viable technology both technically and commercially Transparency of use of cellular applications – just turn on the phone, no log on required

17. Evolution of Airborne Cellular Networks New high speed cellular protocols (3G, 4G LTE) have much higher data speeds than GSM, GPRS, EDGE Current on-board cellular networks support GSM, GPRS, EDGE 2G, 3G and LTE will co-exist for years to come; devices will support multiple protocols and be backward compatible with the intelligence to select the appropriate protocol Just as on the ground, if a device can’t get a 3G signal, it will drop back to EDGE; if EDGE conditions are poor, it will drop back to GPRS, and finally back to GSM 3G and 4G will eventually reach the cabin and will require suitable off-aircraft links

18. Agenda What’s Happening on the Ground? –Network Evolution –Handset and Application Trends How Does This Translate to the Cabin? What’s the Real Story on Usage? What is the US missing?

19. Continued growth in passenger usage It took 10 months to reach 100,000 passengers but only another 10 months to reach 1 million – customer trial and acceptance of the service is increasing Highest number of active connections on 1 flight was 143 -- Dubai to Manila on 12 Dec 2009

20. Its good to talk! Over 11,000 calls made/received to equipped Emirates aircraft in Feb 2010 Longest call made from the aircraft was 65 minutes -- Dubai to Accra on 11 Oct by an Etisalat customer Highest number of calls made from the aircraft was 82 -- Bombay to Dubai on Sept 20 th 2009 One of the top passengers (in terms of usage), generated on average over 2.5 hours of voice traffic on each of the 7 flights flown over the past 6 months But SMS popular too... Highest number of SMS sent to/from the aircraft was 477 – Casablanca to Dubai on 13 Feb. The highest number of SMS sent from aircraft was 233 on that same flight.

21. Regional trends in usage

22. The Longer the Flight, the More Usage You’ll See

23. Revenue Split per Service – 2009 Revenue from GPRS traffic is the top driver with SMS traffic being second most popular service Over 40% of flights in 2009 were night flights or combination day/night flights -- the use of non-voice services can be partially attributed to the high percentage of night flights

24. Passengers are Using it Regularly Examples of traffic from a single user

25. Driving Cellular Revenue Streams In service experiences prove marketing and passenger awareness is one of the primary drivers for revenue. Perception that cellular phones cannot be used on aircraft Many cellular devices placed in bags and stored in overhead bin. Telco involvement is a key marketing ingredient. Direct subscriber marketing campaigns Location based marketing A trusted source of information Research shows over 60% passengers are unaware / did not see the in flight promotional video

26. Gate banner stands Gate Giveaways Monthly bill envelope FAQ on website News paper bindings Print Media Pocket Guide Raising Passenger Awareness Integrated Messages on IFE

27. The Importance of Marketing 22 mobiles attach at beginning of flight 13 mobiles attached post broadcast marketing message on IFE Blue diamonds depict mobile phones attaching to the on board cellular network.

28. Using IFE to Promote the Service

29. Agenda What’s Happening on the Ground? –Network Evolution –Handset and Application Trends How Does This Translate to the Cabin? What’s the Real Story on Usage? What is the US missing?

30. US Cellular Subscribers OperatorGSM SupportMarket Share VerizonCDMA32% AT&TGSM 1900/850MHz30% SprintCDMA16.6% T-Mobile USAGSM 1900MHz11.6% Onboard GSM network operates at 1800 MHz – it does not currently support CDMA Handsets need to support both GSM and 1800 MHz (dual, tri-, or quad-band) Subscriber also needs GSM international roaming as part of their contract Verizon subscribers can use the AeroMobile service through a service provided by their partner Vodafone Netherlands called CDMA2GSM Sprint sells / leases GSM phones for international travel and offers dual mode CDMA/GSM handsets

31. SMS Usage - US Americans send 4.1 billion SMS text messages every day On average, Americans send and receive twice as many text messages as phone calls per month Surveys show following features and considerations to be most important among cell phone buyers: –Text messaging: 73% –Camera: 67% –Ability to access the mobile Internet: 61% –Music features: 34% –Video: 33% % of age group using SMS in US

32. What are Passengers on US Airlines Missing? The ability to send/receive SMS, use GPRS e- mail without having to pay for a WiFi session The choice of being able to make and receive calls while on board The reassurance of being connected through their personal mobile phone Mary Kirby 19/3/10: “... even I've thrown down a few quid to a make a call in-flight (esp on a long-haul flight). Some things, like telling your 5-year old that you love her before bedtime, are simply worth the money. ”

33. Conclusions Throughput speeds of terrestrial cellular networks are rivalling WiFi networks Mobile devices are also evolving with multiple protocols that dynamically select the most appropriate Passengers want to be able to use the same applications in the air that they use on the ground Having both cellular and WiFi networks on board the aircraft best emulates the experience a passenger has on the ground Airlines need to consider future trends and applications when making a decision for aircraft that will be in service for 10+ years

34. Adla.Hendry@AeroMobile.net Mobile: +44 7943 804 047 34