Australian Mobile Telecommunications Association Productivity - Connectivity - Mobility Mobile Broadband A Key Economic Driver

Overview Broadband is the centrepiece of the digital age NBN in partnership with latest generation mobile telecommunications will drive our digital economy Aim to deliver - Productivity - Connectivity - Mobility Spectrum is critical mobile infrastructure What do Australian mobile operators need ? –retention of existing bands –access to Digital Dividend (700MHz) and 2.5GHz The risk of indecision – Australia must keep up!

Latest data (June ) Australian Communications and Media Authority The number of 3G subscriptions grew by 88% in from 4.6 million to 8.6 million There were million mobile phone services in Australia at June , up from million The welfare gained by customers (consumer surplus) from using mobile telecommunications services was $3, million compared to $ million for internet services. The ACMA report says the majority of the increase in the consumer surplus is attributable to changes in the mobile telecommunications sector as prices fell and subscriber demand grew In estimating the consumer surplus for mobiles, ACMA calculated that mobile phone calls fell in price by 21.5% and the price of SMS/MMS decreased by 41.5%.

Economic Contributions of Mobile Telecommunications Source: Access Economics 2008

Mobile Broadband - economic contribution Current As at June 2008 there were an estimated 1m mobile broadband connections via fixed CPE, data card, USB modem, handset as modem or embedded connection* Forecast Increasing take up of 3G data services will contribute an additional $2.1 billion to Australia’s economic input by 2010** Annual real household consumption will be 1.4% greater than it would be in a scenario without mobile broadband services^ Real GDP increases by 0.9% more than it otherwise would without mobile broadband^ *3G in Australia: HSPA mobile broadband boom, Ovum, 10 November 2008 **Australian Mobile Telecommunications Industry: Economic Significance and Contributions, Access Economics, 2008 ^ NextG Productivity Impacts Study, Concept Economics, 13 February 2009 Why mobile broadband will continue to drive productivity gains across all sectors of the Australian economy

Demand for Mobile Broadband – Fact or Fiction? Source: Ovum RHK & Internal Ericsson Mobile Broadband includes: CDMA2000 EV-DO, HSPA, LTE, Mobile WiMAX, Other Fixed broadband includes: DSL, FTTx, Cable modem subs and other Broadband subscription forecast Subscriptions (Millions) Fixed Mobile Mobile Broadband 2/3 of all subscriptions by 2012

Global Spectrum Demand Forecast Today: 380 MHz 3.6 GHz: 125 MHz 2.5 GHz: 190 MHz 700 MHz: 126 MHz M.2078: 840 MHz 793 MHz M.2078: 1300 MHz 919 MHz M.2078: 1720 MHz ?? Australia Dec 2013 * For Tier 1 national markets 2.3 GHz: 98 MHz Spectrum bandwidth 2G & 3G 3G, HSPA & LTE 3G & HSPA LTE & 4G 3G & LTE evolving to 4G Source: ITU-R Report M.2078 (2007) Demand Forecast

Retention of existing bands No guarantee that incumbents will retain use of existing spectrum licences Incumbent spectrum licences in 800MHz, 1800MHz and 2100MHz expire from Impacting investor confidence in next generation networks ‘AMTA supports the Minister making a determination under s.82(3) of the Radcoms Act 1992 that mobile telecommunications – including future mobile broadband services are a class of services where reissuing spectrum licences to incumbents is in the public interest’

Getting the most out of the digital dividend Research shows that the Australian Economy will be $7 to $10 billion better off if the Government unlocks the full potential of the digital dividend to support both broadcast and mobile use* Spectrum Value Partners, ‘Getting the Most out of the Digital Dividend’, April 2009 ‘AMTA considers that demand for mobile broadband will require at least 120+MHz of usable UHF spectrum to be allocated to the mobile industry’*^ Support for allocation of the Digital Dividend for mobile broadband use avoids Australia being isolated from the emerging global band plan

Getting the most out of the digital dividend

Reallocation of 2.5 GHz for mobile use > International agreement on International Mobile Telecommunications (IMT) use reached Universal international roaming band for LTE “This is not a healthy environment for business investment” Senator Conroy, RadComs, 2008 Govt announced ‘way forward’ - limited progress No certainty - LTE deployment, ENG redeployment Roll out plans from 2010 (US) - many other countries Australia urgently needs conformity with global band plan

Summary Mobile demand growth (3G) strong and prices falling – ACMA Mobile economic contribution – direct and indirect – Access Mobile Broadband – productivity enabling technology Global and local demand for mobile broadband on the rise Technology pathway – speed and capacity evolution New spectrum allocations – critical future infrastructure Key spectrum issues; –Retention of existing bands – re-issue licences –Digital Dividend (700MHz) – unique opportunity - $7 - $10 billion from optimal allocation – latest research –2.5GHz spectrum band key to 4G and beyond Australia must keep up.