Growth in Mobile Broadband and its Implication for Spectrum Joe Guan, Spectrum Policy Manager Asia Pacific Government & Regulatory Affairs, GSMA 7 August 2015, Bangkok

GSMA BY THE NUMBERS Here’s a snapshot of the GSMA’s reach around the world. I think will skip this slide, as I believe most of you are already aware of GSMA & its activities Background info The role of the GSMA is extremely important in this context. We are uniquely able to coordinate a collective response to the challenges faced by our members, and to engage productively with regulatory authorities and policymakers. Our work as the mobile industry association can be divided into four broad areas: a forum for industry, a market think tank, an advocate for the industry, and bringing the wider mobile ecosystem together at Mobile World Congress, Mobile Asia Expo and other conferences and events. In addition to our 800+ mobile operator members, our associate members include handset makers, software companies, equipment providers, internet companies, and media and entertainment organisations. As our members have called for more regionally-focused support and policy expertise, we have expanded beyond London and Brussels to regional business and regulatory centres such as Hong Kong, Buenos Aires, Nairobi, Brasília, Dubai and Delhi. Our expanding work on many fronts reflects the growth of the industry — which is now providing 3.2 billion individuals with mobile services.   For reference, GSMA’s official office list: London, Barcelona, Brussels, Atlanta, Santiago Sao Paulo, Brasilia, India, Hong Kong Shanghai, Nairobi Plus homeworking staff in 17 additional countries.

WHO WE ARE

DIGITAL ECONOMY INITIATIVES Speaking points The roll-out and adoption of mobile broadband services is on the rise everywhere, and this is being accelerated through the gradual release of the Digital Dividend. Continued progress is exceedingly important, and especially for developing economies. The mobile sector — and the provision of mobile broadband — creates value that radiates out through the economy. Mobile network operators create economic value directly — by offering a valuable service to citizens, employing people, paying vendors for services, paying taxes and investing in infrastructure and spectrum licences. But it doesn’t end there. The mobile industry supports an array of businesses: Device manufacturers and operating system developers are driving innovation in the race to make smartphones faster, lighter and more intuitive to use. Network infrastructure vendors are striving for further efficiencies, as they seek to support the network demands of tomorrow at lower cost. Content providers are harnessing the new hardware and software innovations to generate new products and services.   Even beyond the industry ecosystem, mobile strengthens every sector in the wider economy by increasing productivity and providing access to email, applications and the internet at any time. It gives people important new ways to learn and to do business and to buy things. This effect is even stronger in developing countries than in developed economies. Some telling statistics: A 10 percent increase in the penetration of broadband services in low- and middle-income countries accelerates economic growth by 1.38% (World Bank analysis of 120 countries). A 10 percent increase in broadband household penetration delivers a boost to a country‘s GDP that ranges from 0.1 to 1.4%. (McKinsey & Co) A 10% increase in mobile penetration increases productivity by 4.2%. (Deloitte) A 10% increase in 3G penetration increases GDP per capita growth by 0.15%. (Cisco) A 10% increase in broadband penetration translates into a 1.5% increase in a country’s labour productivity over the following 5 years. (Booz & Co) A doubling of mobile data use leads to an increase in GDP per capita growth of 0.5%. (Wireless Intelligence) Countries with 80% broadband penetration are more than twice as innovative as countries with 40% penetration. (Booz & Co) Source: Analysys Mason Building Thailand’s Digital Economy and Society Report

THE SMARTPHONE EVOLUTION Credit: www.layman.org

Source: GSMA Intelligence Mobile Economy 2015 THE WORLD IS GOING 4G Speaking points The roll-out and adoption of mobile broadband services is on the rise everywhere, and this is being accelerated through the gradual release of the Digital Dividend. Continued progress is exceedingly important, and especially for developing economies. The mobile sector — and the provision of mobile broadband — creates value that radiates out through the economy. Mobile network operators create economic value directly — by offering a valuable service to citizens, employing people, paying vendors for services, paying taxes and investing in infrastructure and spectrum licences. But it doesn’t end there. The mobile industry supports an array of businesses: Device manufacturers and operating system developers are driving innovation in the race to make smartphones faster, lighter and more intuitive to use. Network infrastructure vendors are striving for further efficiencies, as they seek to support the network demands of tomorrow at lower cost. Content providers are harnessing the new hardware and software innovations to generate new products and services.   Even beyond the industry ecosystem, mobile strengthens every sector in the wider economy by increasing productivity and providing access to email, applications and the internet at any time. It gives people important new ways to learn and to do business and to buy things. This effect is even stronger in developing countries than in developed economies. Some telling statistics: A 10 percent increase in the penetration of broadband services in low- and middle-income countries accelerates economic growth by 1.38% (World Bank analysis of 120 countries). A 10 percent increase in broadband household penetration delivers a boost to a country‘s GDP that ranges from 0.1 to 1.4%. (McKinsey & Co) A 10% increase in mobile penetration increases productivity by 4.2%. (Deloitte) A 10% increase in 3G penetration increases GDP per capita growth by 0.15%. (Cisco) A 10% increase in broadband penetration translates into a 1.5% increase in a country’s labour productivity over the following 5 years. (Booz & Co) A doubling of mobile data use leads to an increase in GDP per capita growth of 0.5%. (Wireless Intelligence) Countries with 80% broadband penetration are more than twice as innovative as countries with 40% penetration. (Booz & Co) Source: GSMA Intelligence Mobile Economy 2015

SMARTPHONE ADOPTION TREND Source: GSMA Intelligence Mobile Economy 2015

SMARTPHONE ADOPTION TREND Source: GSMA Intelligence Mobile Economy 2015

SMARTPHONE ADOPTION TREND Source: GSMA Intelligence Mobile Economy 2015

SMARTPHONE ADOPTION TREND Source: GSMA Intelligence Mobile Economy 2015

THAILAND’S BROADBAND PENETRATION IS RISING Speaking points The roll-out and adoption of mobile broadband services is on the rise everywhere, and this is being accelerated through the gradual release of the Digital Dividend. Continued progress is exceedingly important, and especially for developing economies. The mobile sector — and the provision of mobile broadband — creates value that radiates out through the economy. Mobile network operators create economic value directly — by offering a valuable service to citizens, employing people, paying vendors for services, paying taxes and investing in infrastructure and spectrum licences. But it doesn’t end there. The mobile industry supports an array of businesses: Device manufacturers and operating system developers are driving innovation in the race to make smartphones faster, lighter and more intuitive to use. Network infrastructure vendors are striving for further efficiencies, as they seek to support the network demands of tomorrow at lower cost. Content providers are harnessing the new hardware and software innovations to generate new products and services.   Even beyond the industry ecosystem, mobile strengthens every sector in the wider economy by increasing productivity and providing access to email, applications and the internet at any time. It gives people important new ways to learn and to do business and to buy things. This effect is even stronger in developing countries than in developed economies. Some telling statistics: A 10 percent increase in the penetration of broadband services in low- and middle-income countries accelerates economic growth by 1.38% (World Bank analysis of 120 countries). A 10 percent increase in broadband household penetration delivers a boost to a country‘s GDP that ranges from 0.1 to 1.4%. (McKinsey & Co) A 10% increase in mobile penetration increases productivity by 4.2%. (Deloitte) A 10% increase in 3G penetration increases GDP per capita growth by 0.15%. (Cisco) A 10% increase in broadband penetration translates into a 1.5% increase in a country’s labour productivity over the following 5 years. (Booz & Co) A doubling of mobile data use leads to an increase in GDP per capita growth of 0.5%. (Wireless Intelligence) Countries with 80% broadband penetration are more than twice as innovative as countries with 40% penetration. (Booz & Co) Source: Analysys Mason Building Thailand’s Digital Economy and Society Report

HOW CAN THIS GROWTH BE SUPPORTED? FOUR MAIN WAYS MOBILE NETWORKS CAN SUPPORT RISING DATA Increasingly spectrum efficient technologies (e.g. 3G to 4G to 5G) Denser networks (e.g. more cell sites inc. small cells) Wi-Fi offload (i.e. shifting data on to Wi-Fi networks as much as possible) Using more mobile spectrum This astonishing growth in data means we need to carefully consider how mobile networks can be augmented to support it There are 4 main ways this can be done:- Firstly, we can use new technologies like LTE and LTE-Advanced to squeeze more data through existing spectrum Secondly we can deploy more base stations so we can re-use spectrum more frequently – typically by splitting cells or deploying more macrosites or small cells – this is happening but is expensive! Thirdly, we can shift data off licensed spectrum on to Wi-Fi And finally we can license more spectrum for mobile broadband – this is the most cost-effective way of increasing capactity Make no mistake , mobile operators cannot choose from these options – the gravity of the mobile broadband challenge means they rely on all of them! In fact, the latest mobile technologies like 4G and eventually 5G too are very speccrum-hungry However, for the purposes of this presentation we’re going to focus on issues surrounding licensing more spectrum

MORE DATA = MORE SPECTRUM KNOW YOUR NATIONAL MOBILE SPECTRUM REQUIREMENTS FOR 2020? The ITU predicts that on average a total of 1340–1960MHz will be required for mobile services worldwide by 2020 GSMA research shows a further 600-800MHz should be made available by 2020 This accounts for the use of other capacity enhancing methods More spectrum need to be released both in the near- and long-term Existing identified mobile spectrum will be essential to support data rises for the next 5-10 years 2.3GHz, 2.6GHz and 700MHz bands to help realise the Digital Economy New spectrum to be allocated and/or identified for mobile at WRC-15 BUT, the total amount of spectrum allocated to mobile is not enough given the rate of data growth The ITU predicts around 1340-1960MHz will be required by 2020 Crucially this takes into account new technologies (like LTE and LTE-A), more cell sites and growing Wi-Fi offload Currently around 1GHz of spectrum is allocated to mobile in the ITU’s radio regulations GSMA research shows that the mobile industry needs around 600-800MHz of additional spectrum that should be made available at WRC-15 so it is ready for use after 2020 It can take a decade to get new spectrum at a WRC, build equipment, free bands, license and launch So spectrum at WRC-15 may not be in use until 2020-2025, or longer, when data traffic will be massively higher than today The exact number will vary according to data growth, population density and the existing amount of spectrum allocated PUT SIMPLY – WITHOUT ADDITIONAL SPECTRUM MOBILE NETWORKS COULD SLOW, CONSUMER PRICES COULD RISE AND THE SOCIOECONOMIC BENEFITS OF MOBILE WILL BE LIMITED Background Info: This is also in addition to the spectrum that has already been allocated to mobile which regulators should license asap in a transparent process that will encourage ongoing network investment. The process of securing new bands takes around 10 years meaning that spectrum allocated at WRC-15 won’t be available to be licensed by regulators until the 2020-2025 timeframe when they will be urgently required Even countries with relatively low mobile data usage benefit from new mobile allocations Countries which use the spectrum first create low cost devices for those who use it later (through economies of scale) WITHOUT ADDITIONAL SPECTRUM MOBILE NETWORKS WILL STRUGGLE TO MEET GROWING DATA DEMANDS RESULTING IN SLOWER SPEEDS, HIGHER PRICES AND THE SOCIOECONOMIC BENEFITS OF MOBILE WILL BE LIMITED

IDENTIFIED SPECTRUM BANDS Asia Pacific Region Coverage Bands (<1GHz) Capacity Bands (>1GHz) 703 748 758 803 1710 1785 1805 1880 10 MHz 20 MHz The 700 band: 2x45 MHz The1800 band: 2x75 MHz 824 849 869 894 1920 1980 2110 2170 20 MHz 30 MHz The 850 band: 2x25 MHz The 2100 band: 2x60 MHz 880 915 925 960 2300 2400 10 MHz Speaking points Internationally harmonised frequency bands for mobile can differ somewhat from one region to another. For example, the first Digital Dividend band in Asia Pacific is different from the Digital Dividend band used in Europe, the Middle East and Africa. This slide shows the bands that have been internationally identified for IMT (or international mobile telecommunications) in Asia, including the lower-frequency coverage bands and the higher-frequency capacity bands. Full allocation of these bands by countries would amount to approximately 15% of the usable radio spectrum. As we’ll discuss in a moment, the mobile sector generates about 50% of the economic value created by the use of spectrum. [Note: In Japan, this slide will be questioned because it misses 1.5GHz band.] The 900 band: 2x35 MHz The 2300 band: 100 MHz 2500 2570 2620 2690 TDD The 2600 band: 2x70 MHz with 50 MHz unpaired TDD

TARGET NEW BANDS FOR MOBILE GSMA had agreed widespread support for 4 new mobile allocations Sub-700MHz UHF (470-694/ 8MHz) L-Band (1350-1518 MHz) 2.7-2.9 GHz C-Band (3.4-4.2 GHz) EXISTING IDENTIFIED MOBILE BANDS 450–470MHz Digital Dividend (700/800MHz) 900MHz 2.3GHz 3.4–3.6 GHz 2.6GHz 1.8GHz 2.1GHz The GSMA has identified four frequency ranges where the spectrum requirement for future mobile broadband could be best satisfied at WRC-15 and where existing services could continue to use parts of the bands through coordination and spectrum planning These are based on detailed studies which assess how different services can share the frequency bands and the economic benefits of change These encompass coverage and capacity bands to ensure citizens in villages can benefit as well those in towns and cities It is essential that governments around the world agree a common target mobile bands at WRC-15 to ensure spectrum is harmonised which is essential for low cost devices The 4 bands are: Sub-700MHz UHF (470-694/8MHz) 2.7-2.9GHz L-Band (1300-1518MHz) C-Band (3.4-4.2GHz) 470-694/8 MHz 3.4-3.8 GHz TARGET BANDS FOR WRC-15 2.7-2.9 GHz 1350- 1518 3.8-4.2 GHz

EFFICIENT SPECTRUM UTILISATION = SHARING We encourage regulators to look at ways of sharing bands Most bands are not allocated exclusively for one service in the Radio Regulations Sharing is possible if we consider realistic scenarios – not worst-case Opponents to mobile are emphasising highly unrealistic, worst-case scenarios L-band (1350-1518 MHz): 500km exclusion zone based on 1 km tall LTE base stations 2.7-2.9 GHz: Exclusion zones that are hundreds of kilometres wide – ignoring practical solutions We encourage regulators to look at ways of sharing bands Most bands are not allocated exclusively for one service in the Radio Regulations Sharing is possible if we consider realistic scenarios and not the worst case Possible by segmenting bands or geographic sharing Numerous incumbents are emphasising highly unrealistic scenarios L-band (1350-1518MHz): some argue exclusion zones would be 500km wide and require a 7.8 MHz guard band BUT this was premised around 1km tall LTE base stations. A study with more realistic heights found a 2km exclusion zone was adequate and a 3 MHz guard 2.7-2.9 GHz: some argue need for co-channel exclusion zones that are hundreds of kilometres wide. But 0.5 km is possible for uplink and 1km for downlink with appropriate guard bands and emission limits C-band: Some argue in favour of tens of hundreds of km co- channel exclusion zones but IMT small cells should be able to co-exist with satellite given <5MHz guard band All GSMA RECOMMENDED NEW MOBILE BANDS FOR WRC-15 CAN BE SHARED

WHAT’S 5G? NO FORMAL DEFINITION AGREED - THERE ARE TWO SLIGHTLY DIFFERENT VISIONS Service level upgrade: Extremely reliable, near universal coverage, high speed mobile broadband that can cost effectively support growing traffic (especially video) and better support low-power IoT Uses 2G, 3G, 4G & potentially others Generationalist level upgrade: Achieves much higher data rates, lower latency and ubiquitous connectivity. Few applications require all these demands (e.g. virtual reality, tactile internet and autonomous/connected cars) As with traditional generation upgrades it exclusively uses next-generation radio access technology BUT, the total amount of spectrum allocated to mobile is not enough given the rate of data growth Currently around 1GHz of spectrum is allocated to mobile in the ITU’s radio regulations The ITU predicts around 1340-1960MHz will be required by 2020 Crucially this takes into account new technologies (like LTE and LTE-A), more cell sites and growing Wi-Fi offload GSMA research shows around 600-800MHz should be made available at WRC-15 so it is ready for use after 2020 PUT SIMPLY – WITHOUT ADDITIONAL SPECTRUM MOBILE NETWORKS COULD SLOW, CONSUMER PRICES COULD RISE AND THE SOCIOECONOMIC BENEFITS OF MOBILE WILL BE LIMITED

5G PERFORMANCE – TECHNICAL TARGETS AND CHALLENGES 5G – CHALLENGES AND CONSIDERATIONS 5G PERFORMANCE – TECHNICAL TARGETS AND CHALLENGES Higher Speed >10Gbps 30x 4G More Connections 1,000k/km² 100x 4G Lower Latency ~1ms 1/10th of 4G Network Slicing Multiple Virtual Networks Mobile Broadband and Verticals New Spectrum New Air Interface New Architecture BUT, the total amount of spectrum allocated to mobile is not enough given the rate of data growth Currently around 1GHz of spectrum is allocated to mobile in the ITU’s radio regulations The ITU predicts around 1340-1960MHz will be required by 2020 Crucially this takes into account new technologies (like LTE and LTE-A), more cell sites and growing Wi-Fi offload GSMA research shows around 600-800MHz should be made available at WRC-15 so it is ready for use after 2020 PUT SIMPLY – WITHOUT ADDITIONAL SPECTRUM MOBILE NETWORKS COULD SLOW, CONSUMER PRICES COULD RISE AND THE SOCIOECONOMIC BENEFITS OF MOBILE WILL BE LIMITED Higher bands to meet demands of speed and capacity, ability to aggregate all bands To support mass connectivity and increase spectral efficiency One Physical Network (hard) supporting Multiple Virtualised Networks (soft) Numeric Source : NGMN 5G Whitepaper and Vendor Updates

WHAT ARE THE 5G SPECTRUM POLICY CONSIDERATIONS? 5G – CHALLENGES AND CONSIDERATIONS WHAT ARE THE 5G SPECTRUM POLICY CONSIDERATIONS? NO CLEAR AGREEMENT ON 5G SO IMPOSSIBLE TO ACCURATELY PREDICT SPECTRUM NEEDS, BUT… Spectrum discussions need to begin given long timeframe to free spectrum Agreeing a dedicated WRC-19 agenda item at WRC-15 (through Agenda Item 10) will be a vital first step National regulators and regional ITU groups need to support a mobile agenda item for WRC-19 Governments must not be distracted from identifying additional harmonised mobile broadband (IMT) spepctrum at WRC-15 5G likely to require significant additional capacity spectrum Spectrum above 6GHz is a good target as very wide bandwidths are more commonly available 1-6GHz (inc. refarmed IMT spectrum) provide capacity but can also cover wider areas and suit macro base station use cases 5G will require coverage spectrum to provide nationwide services, not just urban hotspots Sub-1GHz spectrum is vital for digital inclusion, in-building penetration and also low-power Internet of Things applications Wider range of mobile licensing regimes are possible with 5G Exclusive licensing: Essential to guarantee QoS and encourage network investment Flexible shared licensing: Higher 5G frequency ranges suit sharing as small coverage areas mean more manageable interference SUB 1-GHz FREQUENCY RANGES TO BE EXPLORED FOR 5G 1-6 GHz (inc. refarming) ABOVE 6 GHz (inc. mm waves)

WHAT’S AT STAKE: MORE THAN JUST MHz Mobile industry contribution to the Asia Pacific regional economy THESE BENEFITS WILL BE RESTRICTED WITHOUT ACCESS TO SUFFICIENT SPECTRUM Source: GSMA Intelligence Mobile Economy 2015

THANK YOU jguan@gsma.com