1. Source: Analysys Mason, 2013 The role of 4G in mobile data monetisation Presentation 8 May 2013 Ronan de Renesse, Principal Analyst

2. Source: Analysys Mason, 2013 Smartphones take a large share of data revenues but LTE has more value to offer to MBB 2 Share of mobile data connections and revenues by device type – UK, 2008 and 2012 The role of 4G in mobile data monetisation LTE

3. Source: Analysys Mason, 2013 Tablets are driving a major shift in mobile broadband device mix ▪ New market data led us to reduce our MBB forecast significantly ▪ Key assumptions: – Tethering replaces dongles – Connected tablets replace laptops + dongle – Competition from WiFi – Attractive fixed broadband bundles ▪ Shift in spend and mobile data consumption, not an absolute decline ▪ Residential complementary connections are most exposed 3 Mobile broadband forecast by device type, UK, 2010-2018 The role of 4G in mobile data monetisation

4. Source: Analysys Mason, 2013 Tablets could contribute more 4 Tablet owners by device capabilities - UK Tablet owners by device origin – UK new tablets Source: Connected Consumer Survey 2013 The role of 4G in mobile data monetisation LTE

5. Source: Analysys Mason, 2013 33% of UK smartphone owners also have a tablet and a laptop 5 UK smartphone panel by tablet and laptop ownership Connectable device ownership for UK smartphone users Source: Connected Consumer Survey 2013 The role of 4G in mobile data monetisation LTE

6. Source: Analysys Mason, 2013 Multi-device works in the US but can it be applied to Europe? ▪ AT&T and Verizon launched in 3Q 2012 – 2 million subscribers signed up for AT&T’s plan first 2 weeks after launch. – 90% of AT&T smartphones are on a shared plan, more than a quarter are on a 10GB per month plan. – Verizon has changed its reporting to ‘average revenue per account’ (ARPA), reporting an average of 2.64 device connections per account. – AT&T reports an average of 3 devices per account. 6 Price per gigabyte of selected mobile data plans, USA Data plan Price per gigabye (USD) AT&T ‘Mobile share’ Verizon Wireless ‘Share Everything’ 1GB 85 (40 + 45 per phone) 90 (50 + 40 per phone) 6GB 20.33 (90 + 35 per phone) 20 (80 + 40 per phone) 10G B 15 (120 + 30 per phone) 14 (100 + 40 per phone) 20G B 11.5 (200 + 30 per phone) Offered, but not quoted The role of 4G in mobile data monetisation

7. Source: Analysys Mason, 2013 Europe responds better to tethering than multi- device tariffs 7 Share of respondents using MBB services, mobile hotspots and tethering – October 2012 Source: Connected Consumer Survey 2013 The role of 4G in mobile data monetisation LTE

8. Source: Analysys Mason, 2013 Mobile data pricing strategies are capital to secure future mobile data monetisation paths 8 Unlimited (capped or throttled) Maximum available speed Reduced speeds More usage at maximum speed Monetisation path Openly advertised data allowance More usage at maximum or reduced speed Limited usage at maximum speed No more usage until next billing period Monetisation path Truly unlimited Maximum available speed Monetisation path Higher-speed usage The role of 4G in mobile data monetisation LTE

9. Source: Analysys Mason, 2013 UK view: volume-based (EE) versus unlimited (3UK) 9 iPhone 5 32GB 24 months TCOSIM-only smartphone 12 & 1 month deals The role of 4G in mobile data monetisation

10. Source: Analysys Mason, 2013 How long will 4G price premiums hold for? 10 Allowance versus access charge for entry-level 4G LS MBB services – Q4 2012 The role of 4G in mobile data monetisation

11. Source: Analysys Mason, 2013 Market drivers and inhibitors for 4G adoption 11  Service availability  Network coverage  Number of operators with LTE  Service/Network quality  It’s not just about speeds (e.g. VoLTE, VAS services)  Cheaper mobile data charges  3G/4G tariff differentiation to disappear 2 years after launch, quicker for handsets  Devices  LTE devices should be made available to customers as soon as possible  Expensive mobile data charges  High 4G price premium hinder overall adoption  Lack of devices  Not that many devices yet available on 800MHz and 2600MHz  4G devices too expensive  The prepay market  46% of UK handset connections are on prepay tariffs  Devices on long replacement rates  Tablets have longer replacement rates than smartphones The role of 4G in mobile data monetisation

12. Source: Analysys Mason, 2013 4G UK forecast – 47% of mobile connections will 4G active by the end of 2018 12 4G UK forecasts by device type, 2010-2018 The role of 4G in mobile data monetisation

13. Source: Analysys Mason, 2013 Thank you 13 Ronan de Renesse Principal Analyst Ronan.deRenesse@analysysmason.com Twitter: @Ronan_AM The role of 4G in mobile data monetisation