Growth in Mobile Broadband Coleago V2.6 13 Aug 09

Growth in Mobile Broadband
Benchmarks and implications for operators
Stefan Zehle, Coleago Consulting

July 2009
1 Global Trends
2 Implications for Mobile Operators
3 Selected Benchmarks
4 About Coleago Consulting Ltd

Content
© copyright coleago 2009 1

Growth in Mobile Broadband - July 2009
1 Global Trends

Global Trends
The Drivers
Following many false

dawns, in 2007 the
factors required to
deliver the long
awaited inflection
point in wireless data Data speeds capable of
delivering a good user
growth have finally experience
coalesced in many A Step Change in Mobile Services
markets
Data optimised and
desirable devices for Data
consumer and business Revenue
applications
Flat fees; pricing

consistent with the
application
Time
Compelling applications
and content

Global Trends
The Drivers – Data Speeds
Gross downlink data

rates of wireless
Mbit/s
technologies can LTE
now deliver a user 100
experience that ADSL-2
customers value and
are prepared to pay HSPDA+
50
for
10
Traditional
Broadband
5
HSPDA
Minimum Acceptable User Experience
1
EDGE
GPRS
0.1
Dial-Up
40
HSCSD
20
CSD
0
Time

Global Trends
The Drivers – 3G Device Adoption
3G
3G Device Adoption
Customer Growthin Selected Markets 3G Device Adoption
In many markets the
3G take-up varies between countries and operators and depends on
adoption of 3G 70%
the handset policy adopted by operators.
devices is making an 60%
% of Customer Base
 3G take-up can be very rapid, 20% adopting 3G in 18 months at
impact on revenue 50%
Telstra (Australia), stimulated by higher handset subsidies.
40%
generation from  In Japan and Korea almost 100% of mobile customers are now
30% 3G enabled.
non-SMS data
20% In emerging markets where operators have less or no control over
services.
10% handsets, the transition to 3G may be slow and lead to delays in
0% freeing up 2G spectrum for refarming to 3G.
Mar-05
Mar-06
Mar-07
Mar-08
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Sep-05
Sep-06
Sep-07
Sep-08
Vodafone (I,E,GB,D) TIM Italy Telefonica Spain
Orange France Singtel Singapore Telstra Australia
Verizon USA SFR France
NTTDoCoMo
NTT DoCoMoMigration
Japan 2Gfrom
& 3G2G
Cellular
to 3G Subscribers The 2G to 3G Migration in Japan Provides a Benchmark
 NTT DoCoMo in Japan provides an example of a company that
has almost completed 2G (mova) to 3G (FOMA) migration. The
60,000 100% process took place during a 6 year period.
90%
50,000 80% – GSM / 3G operators should experience a somewhat faster
Subscribers '000
70% migration, thus freeing up 2G spectrum for refarming.

40,000
60%  The 2G mova service is schedule for shutdown on the 31st of
30,000 50% March 2012.
40%
20,000 30%
– NTT DoCoMo intends to accelerate the migration of residual
20%
customers.
10,000
10%  The problem of dealing with residual customers also occurred
0 0% during the migration from digital to analogue cellular. There are
2003 2004 2005 2006 2007 2008 2009 always a small minority of customers who will not migrate unless
they are forced to. However, spectrum refarming can only
Mova 2G Foma 3G 3G % commence one the last 2G only customer has been migrated.

Global Trends
The Drivers – Pricing
Flat Rate Pricing
Pricing has been
Operators have slashed prices by up to 90% within the space of 2 to
adjusted to near flat 3 years.
rate pricing, thus Depending on the country, different pricing schemes are offered by
making it easy for 3G operators:
customers to  Most operators price by data volume with a stated amount e.g. 5
understand pricing Gbytes or use the term “unlimited, subject to fair use”.
and removing usage  For prepaid customers some operators offer unlimited usage for
one day.
inhibitions.
 Pricing by download speed is rarer, e.g. in Singapore.
 Pricing by duration of connection also rare, and is used for
example in Germany.
UK Mobile Data
Pricing June 2006 May 2009 2006 - 2009
Gbytes in Monthly Cost Per Mbyte Gbytes in Monthly Cost Per Mbyte
Operator Bundle £ Cost £ Bundle £ Cost £ Change %
3 0.5 38.30 0.0766 15 13.04 0.0009 -99%
Orange 1 38.30 0.0383 10 21.28 0.0021 -94%
Vodafone 1 38.30 0.0383 5 21.74 0.0043 -89%
T-Mobile 2 14.47 0.0072 5 26.09 0.0052 -28%

Global Trends
The Drivers - Devices
Rapid Take-Up of Data Optimised Devices
During 2008 the Apple iPhone
Blackberry popularised mobile email, particularly in the corporate
take-up of data segment. This worked fine even with 2G devices because data
optimised devices volumes are low. However, while Blackberry originally focused on the
accelerated business market, young consumers started to adopt the device and
thus catapulted Blackberry into the consumer mass market.
substantially
Blackberry 3G devices now have widespread appeal among young
consumers, particularly for social networking
The launch of Apple’s iPhone set a new benchmark in usability. The
addition of 3G capability and the launch of the app store further lifted
iPhone sales. In markets where handset subsidies are prevalent,
operators who signed exclusivity deals with Apple reaped the benefit
because customers make operator choices based on device
attractiveness.
In this context AT&T Wireless, the largest GSM/HSPA operator in the
USA, provides a good example (source: Earnings Release Q4 2008):
 “AT&T’s postpaid subscriber growth reflects the dramatic success
of iPhone 3G, which was launched in July 2008. AT&T’s fourth-
quarter iPhone 3G activations totaled 1.9 million, and the
company’s total iPhone activations over the last half of 2008 were
4.3 million. Approximately 40 percent of AT&T’s iPhone 3G Blackberry Phones
activations have been to customers who are new to the company.
 AT&T’s iPhone exclusive continues to deliver subscribers with
ARPUs that are on average approximately 1.6 times higher and
churn rates that are significantly lower than those for the
company’s overall postpaid subscriber base.
 During the fourth quarter, nearly 60 percent of the company’s
postpaid net adds came from customers choosing an integrated
device. Over the past year, 3G integrated devices on AT&T’s
wireless network more than doubled. At the end of 2008, 24.9
percent of AT&T’s postpaid wireless subscribers had an
integrated device, up from 13.0 percent one year earlier.”

Global Trends
The Drivers - Application Orientated Devices
Content and Application Optimised Devices Drive Usage
The combination of Blackberry & Social Networking Applications
Blackberry and Apple captured the imagination of consumers with
applications and devices optimised for mobile date, notably social networking. Other
handsets provided players such as Android, are building on the link between devices
the ingredient that and applications or content.
lead to the take-off The data shown in the table below provides an indication of the link
between devices and usage. (Statistics based on a survey of 400
for mobile data iPhone users and 3600 non-iPhone users in the U.K. and U.S. by
usage by Mformation). However, it should be borne in mind that the iPhone
consumers, notably user base is not representative of the total mobile market.
among younger The wide availability of data optimised devices by leading brands is
popularising the mobile internet for wide variety of applications. For
segments of the some users, the mobile phone started to replace the PC as their
population. primary electronic communication and networking device.
Use of Application by iPhone User vs. Other Handsets Android Applications
Use of
applications and Use of applications
services by iPhone and services by
Application users non-iPhone users
Email 81% 39%
Internet 86% 47%
Picture messaging 51% 45%
Location based services 79% 25%
Music downloads 55% 23%
Backup and restore 61% 25%
Instant Messaging 60% 34%

Global Trends
The Drivers – Content and Applications
Content and Applications
Content and Web 2.0 Vodafone UK Featured Mobile Internet Application
The mobile packet data revolution started with simple email,
applications are exemplified by Blackberry, but now encompasses a whole range of
stimulating interest applications, notably those which require a greater bandwidth and
and usage thus generate higher data volumes.
 Facebook is a key application for young consumers, whereas
mobile TV offering, notably sports content as well as YouTube,
appeal across a broader audience.
– “Facebook’s CEO Mark Zuckerberg said it now has 25m
mobile user per month, up from 15m last November and 5m at
the start of 2008. According to unofficial Facebook blog,
AllFacebook, the site now has over 4m daily active users. The
importance of smart phones that are well adapted for this type
of interactive app is clear – over two-thirds of mobile Facebook
users come via the versions that were specifically designed for
the iPhone (1.64m a day) or BlackBerry (1.56m), while the Telstra Australia Featured Mobile Internet Application
generic Facebook implementation attracts just one million.”
– Operators such as Telefonica and T-Mobile launched
integrated dashboard covering many social networking
programs. For example, Telefonica is extending a deal it
pioneered through its UK subsidiary O2, allowing access to
Facebook from any of its networks worldwide.
 Music downloading is also taking off in the UK and elsewhere, but
as yet remains marginal in overall terms.
 The most recent phenomena, downloadable applications,
pioneered by Apple’s app store in conjunction with the iPhone are
very successful and stimulate interest and usage further.
– Many mobile operators now also plan app stores in a bid to
keep some control over the applications.
 Operators realised that the easiest way to promote mobile internet
usage is by featuring big brand names, allowing people to do in
mobile situations what they are already doing via PCs.

Global Trends
Growth in Non-SMS Data Usage and Revenue
Non-SMSData
Non-SMS Data%%of
ofTotal
Revenue
Revenue – Korea & Japan Japan and Korea Provide a Window to the Future
Where technology,
40% SK Telecom in Korea achieves just over 22% of ARPU from wireless
tariffs, devices and
Packet Data Revenue % of Tota

Internet services and packet data accounts for 34% of DoCoMo’s
35%
content have come ARPU.
30%
together non-SMS  Pricing of voice vs. data and the allocation of monthly subscription
25% fees may distort trends slightly. Ultimately the difference between
data spend by
20% voice and data revenue may become rather academic.
customers has
15%  The situation in Japan and Korea is an indication of what
responded. operators in other developed markets could expect
10%
5%
0% Mar-05
Mar-06
Mar-07
Mar-08
Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Sep-05
Sep-06
Sep-07
Sep-08
SK Telekom Korea DoCoMo Japan
Non-SMS
Non-SMSData
Data%%of
ofTotal Revenue
Reveue Markets in Europe, the US and Asia
25% At this early stage of the growth curve, usage and revenue
Non-SMS Data % of Total Revenue
contribution from non-voice services differ a great deal between

20% markets. Even within the EU data revenue spend varies
considerably between countries.
15%
 Many operators in Europe and the US are generating an
increasing % of revenue from non-SMS data.
10%
 For Vodafone’s main European operations non-SMS data
5% services are now the biggest or even only contributor to revenue
growth.
0%
 Telstra in Australia increased the non-SMS data contribution to
Mar-05
Mar-06
Mar-07
Mar-08
Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Sep-05
Sep-06
Sep-07
Sep-08
revenue from 5% to 15% in only two and half years.
 This is achieved by marketing data services aggressively
Vodafone (I,E,GB,D) O2 Europe TIM Italy supported by good price plans, handset subsidies and an
Telefonica Spain Telstra Australia excellent portal.

Global Trends
Packet Data Offsets Declining Voice Revenue
In Maturing Voice Markets Data Revenue is a Rising Star
Many operators with Year on Year Service Revenue Growth
Many wireless operators, particularly in Europe, are experiencing a
stable or declining decline in overall revenues. Some effects are market driven such as
Data
voice revenue now Year Total Data Share of tariff cuts, others due to regulation, notably lower mobile termination
rely exclusively on Operator Country Ending Revenue Revenue Growth (interconnect) rates (MTR) and lower roaming rates in EU countries.
For these operators, growth in data revenue was the only positive
data to deliver top- TIM Italy Italy Q4 08 10.5% 111.9% 30% contribution to top line momentum.
line growth Even for operators who still experience overall revenue growth, e.g.
Mobilkom Austria Q4 08 11.6% 23.3% 62% in North America, non-voice revenue provide the majority of revenue
growth.
T-Mobile Germany Q4 08 0.5% 14.8% only Within the overall data revenue stream SMS is important, but non-
growth messaging revenues, notably browsing, show the highest growth.
Orange France Q4 08 3.8% 27.9% only
growth
Telefonica Spain Q4 08 -1.9% 6.8% only
growth
Telia S,N,DK, FI Q4 08 16.2% 35.2% 33%
Telstra Australia Q4 08 13.4% 36.7% 81%
Singtel Singapore Q4 08 8.1% 11.5% 44%
Verizon USA Q4 08 12.0% 41.4% 73%
AT&T USA Q4 08 13.3% 51.2% 77%
Orange UK Q4 08 -14.8% -7.9% n/a

Global Trends
In many markets voice & SMS ARPU is declining but packet data provides growth
ARPU Declines are Moderated Thanks to Packet Data
In many mature Year on Year ARPU Growth - Q4 2008
 Many operators in mature markets have experienced declining
markets mobile voice related ARPU for some time. The decline was still the norm
packet data is the Voice SMS / Packet during 2007 and 2008.
Related Messaging Data Total ARPU
only ARPU growth  There operators now also experience a decline in SMS related
factor, with voice and Portugal -12.4% -11.3% 71.2% -7.7% revenues.
Telecom
SMS having reached – However some new SMS application such as Twitter, provides
Telstra Australia 0.8% 17.8% 47.2% 10.4% renewed growth in SMS.
maturity
 The only substantial area of ARPU growth are packet data
services revenues. Without the contribution of packet data
Telefonica Spain -10.4% -6.4% 28.0% 10.0% revenue, declines in ARPU would be more pronounced.
TIM Italy 12.4% 1.6% 28.4% 13.0%
Vodafone UK -9.6% 1.5% 27.9% -4.4%
Vodafone Italy -3.0% 1.7% 21.6% -0.5%
Vodafone -12.0% -15.3% 13.6% -9.5%

Germany
Vodafone Spain -12.6% -8.3% 1.6% -11.1%
O2 Germany -15.4% -13.5% 16.1% -12.9%
O2 Czech -2.5% 4.1% 10.6% -0.5%

Republic
M1 Singapore -11.3% -4.4% 2.7% -9.2%

Global Trends
Payback on the incremental cost of 3G customer acquisition
Telstra: Economics of 3G Cost of Customer Acquisition Payback for Higher Handset Subsidies
In markets with
In markets where handset subsidies are important, the higher cost of
subsidised handsets 70
subsidising a 3G / HSPA is worthwhile since payback is relatively
60 Monthly Incremental 3G ARPU $20
the increased 50 short.
Incremental Cost of Customer Acqusition
revenue from data 40  For Telstra (Australia) The incremental 3G data ARPU of AS$ 20
30
services justifies 20
per month provides a 3.5 month payback for the incremental
10 customer cost of acquisition of AS$ 65.
higher subsidies for A$ 0 3G users can use the 3G network which for most operators is still
data orientated -10
relatively empty, thus avoiding incremental 2G network capex.
-20
phones -30 Furthermore low band spectrum (850 / 900 MHz) can be freed up for
-65
-40 refarming to 3G.
-50
-60
-70
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
CoA
AT&Ts iPhone 3G Users are More Profitable

NPV for AT&T Wireless iPhone 3G Subscribers
For AT&T (USA), the higher cost of customer acquisition and the
cost of revenue share is more than offset by the incremental
revenue.
 The Net Present Value (NPV) of an iPhone 3G postpaid
subscribers is more than double the NPV of an average postpaid
subscriber.
 The business case is not only based on the higher ARPU but also
on reduced churn and winning new customers.
Source:
AT&T Q4 2008
earnings release
presentation

Global Trends
HSPA leads to explosive growth in mobile PC connectivity
Europe: % With
% of Pops of Population Using Mobile
3G Data Dongle Data PC Dongles
End 2008 HSPA PC Dongle Penetration is Increasing Rapidly
Higher data speeds
PC dongle penetration in Europe is increasing at a rapid rate. At the
and capacity on 3G Spain 1.6% end of 2008 dongle penetration varied substantially between different
networks have led to France 1.6% European countries, with Austria taking a clear lead.
Belgium 1.6%
the growth of a new  By the end of Q4 2008, dongle penetration in Austria reached
Germany 2.4%
market segment: Sw itzerland 2.7% 12%. This is mainly due to aggressive marketing and low prices.
mobile broadband Netherlands 3.0%  In Finland 6.3% of the population adopted mobile broadband
UK 3.8% during 2008 to lift penetration to 9% as at December 2008.
connectivity for PCs. Ireland 3.8%
Hungary  Telstra in Australia achieved 8.5% at the end of 2008, again as a
4.3%
Denmark 5.5% result of aggressive marketing of its 3G connectivity services.
Sw eden 6.7%  In some markets, for example the UK, the bundling of subsidised
Portugal 6.9% laptops with HSPA dongles is a significant factor in stimulating
Finland 9.0% growth.
Austria 12.0%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

Note: Figures for Sweden as of end June ’08. Various sources.
Mobilkom
Handset &Austria Handset
PC Dongles & PC Dongle
Quarterly Net Adds
Net Adds PC Dongles Contribute to Net Additions
In mature markets data card customers become the main driver in
250 50%
growing customer numbers in terms of active SIMs.
45%
Net Additions in Quarter '000
Data Dongle % of Net Adds

 In Q4 2008, mobile PC customers accounted for over a quarter of
200 40%
net additions for Telekom Austria.
35%
150 30%  By mid 2008 mobile broadband dongle sales in the UK amounted
25% to 30,000 per week.
100 20% – On an annualised basis this is equivalent to an increase in
15% take-up by 2.6 % of the UK population. This growth is now
50 10% also driven by prepaid mobile data connectivity. While at the
5% beginning of 2008 prepaid dongle sales amounted to 10% of
0 0% total sales by June 2008 this had increased to 25%.
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Handset Net Adds PC Dongles Net Adds PC Dongles Net Adds %

Global Trends
For some users HSPA dongles can be a substitute to fixed broadband
Broadband Subscriptions
Broadband Subscriptions by Type - Dec
in Finland 08 2008
– Dec In Finland Mobile Broadband Growth Impacts on ADSL
Evidence for Finland
In Finland mobile broadband penetration of population grew from
and the UK Wireless 2.7% as at Dec ’07 to 9.0% as of Dec ’08, i.e. 6.7% of the population
illustrates that for Broadband Others adopted mobile broadband within a year. This rapid growth impacted
Mobile 1% on demand for ADSL:
some users mobile Broadband
1%
broadband can be a 23%  During 2008 the number of broadband connections in Finland
increased by approximately 336,000 with 100% of this being
substitute to ADSL. mobile broadband. The number of ADSL subscriptions fell by
almost 40,000.
 At the end of 2008 mobile broadband accounted for 23% of all
Cable Modem DSL broadband connections and this figure is increasing.
10% 59%
Substitutional Use in the UK
Real Estate At the end of 2008 mobile broadband penetration in the UK was
Company around 4%. A significant proportion of these mobile broadband
6% customers use their HSPA dongle instead of a fixed broadband
Source: Ficora subscription.
 Figures from Ofcom suggest that around 30% of HSPA dongle
Mobile Broadband Use in the UK – End 2008
Chart Title
users are substitutional.
 ‘3’ said in May 2008 that 50% of its dongle customers were
Substitution substitutional users.
30%
Fixed Broadband in Developed and Emerging Markets
Fixed broadband will always deliver the greater bandwidth required
for large data volumes and applications that require a high, reliable
bandwidth such as video. Fibre is being rolled out in many countries.
Even with new technologies such as LTE, mobile operators could not
deliver the required bandwidth in a cost effective manner.
Complementary However, in emerging markets with a poor fixed network
70% infrastructure, mobile broadband may become a substitute to fixed
broadband. This would mirror the development in voice, where fixed-
mobile substitution was far more rapid in emerging markets than in
countries with a highly developed fixed network.

Global Trends
SMS remains important
SMS vs. Other Data % of Service Revenue SMS Should not be Ignored
Despite the growth in Data % of Revenue
40%  While non-sms data revenue is growing fast, with the exception of
non-SMS data, SMS Japan and Korea, most mobile operators still generate most data
still makes a 35% revenue from SMS.
substantial  Some operators have a relatively high ratio of non-sms data
30%
% of Service Revenue
contribution to revenue compared to SMS data revenue due to their success with
25% Blackberry.
mobile operator data
 In many markets the growth in MMS usage is slow, similar to the
revenue 20%
initial slow growth of SMS usage.
15%  In some emerging markets, SMS is of overwhelming importance,
the Philippines being the prime example.
10%
– In 2008, 57% of SMART’s (subsidiary of PLDT, largest cellular
5% operator in the Philippines) cellular revenue came from SMS
buckets.
0%
O2 (GB, IRL, D, CZ) Q4 08
TMN Portugal Q4 08
DoCoMo Japan Y/E Mar 09
TIM Italy Q4 08
SK Telekom Korea Q4 08
Vodafone (D, GB, F, E) Q4 08
T-Mobile USA Q4 08
M1 Singapore Q4 08
Telefonica Spain Q4 08
Telstra Australia 2H 08
Messaging (SMS) Non-SMS

Global Trends
Slow growth in MMS
Sweden
MMS No of MMS
per Customer / Custtomer
per / Month
Month in Sweden Muted Growth in MMS Usage
While many
 In many markets the growth in MMS usage is slow, similar to the
operators experience 1.2
initial slow take-up of SMS. While many customers may send an
an average of one 1.0 occasional MMS, regular usage remains low. For example, in
MMS / Customer / Month

SMS per customer Finland 25% of mobile users have sent an MMS, but average
0.8 usage per customer per month was less than 0.5 during 2008.
per day or more,
 However, AT&T and Verizon in the US report that MMS usage is
MMS usage is less 0.6
growing well. During Q4 Verizon’s customers send or received on
than one message average 9.4 MMS per month. However, MMS traffic only amounts
0.4
per customer per to 2% of SMS traffic, illustrating the marginal nature of MMS.
month and shows 0.2  The slow growth in most markets may be accounted for by
compatibility issues, the complexity of sending an MMS and more
only slow growth. 0.0 recently substitute applications such as Facebook which have
1H 04 2H 04 1H 05 2H 05 1H 06 2H 06 1H 07 2H 07 1H 08 subsume the functionality of MMS
Consumer Business Blended
StarHub
MMS -Singapore
per Customer per -Month
MMS /- Customer / Month
Starhub Singapore USAGrowth
MMS - MMS per Customer
in the USA per Month
1.4 9.1
8.4
8.1
1.2

7.1 7.2
6.9
1.0 6.1
5.5
5.1 4.8
0.8
4.1 3.8
0.6 3.1
3.1 2.9
2.5 2.4
0.4 2.1 2.0
1.7 1.5 1.7
1.4
1.1
0.8 0.9
1.1 1.0 1.2
0.2 0.4
0.1
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AT&T Verizon

Global Trends
Rapid increase in packet data traffic volumes
Mobile Data
Mobile DataTraffic
Mbytesin/ Sweden
Customer / Month /- Customer
– Mbytes Sweden / Month Exponential Traffic Increases
The emergence of
There is little data publicly available with regards to data usage by
low flat rate pricing 100
mobile PC customers. Some operators in Europe experience
90
lead to a rapid average usage in excess of 2 Gbytes per mobile PC customer per
Mbytes/ Customer / Month

80
growth in data traffic month.
70
driving incremental Figures for Sweden illustrate the explosive growth in data traffic
60
associated with the take-up of mobile PC connectivity.
capital expenditure, 50
With PC connectivity package priced as low at €15 per month for up
in RAN, backhaul 40
to 5 Gbytes, operators who are successful in attracting mobile PC
and backbone 30 customers found that incremental capex was required.
20
capacity. While the 3G (HSPA) RAN capacity is still relatively underused,
10 operators had to spend significant amounts on providing additional
0 transmission capacity from base station sites (back haul) and also in
2H 03 1H 04 2H 04 1H 05 2H 05 1H 06 2H 06 1H 07 2H 07 1H 08 the backbone. This can be costly, especially if sites are connected by
Consumer Business Blended microwave or copper leased lines. Fibre is increasingly used on key
sites as well as innovative solutions such as backhaul via ADSL.
StarHubSingapore,
StarHub Singapore3G
- 3G & Growth
Adoption in DataData
& Mobile Traffic
Traffic Impact on Spectrum Valuations
“Coverage is to voice 180 40% Coleago’s work on spectrum valuations and auctions in North
what capacity is to America, Europe and India confirms that operators require new
160
Mbytes / Customer / Month
35%
spectrum to cope with the anticipated growth in data traffic. The real
data” 140 30% issue is capacity in those areas where most traffic occurs, i.e. the
% of Customers 3G
120 urban sites where usage is highest.
25%
100  Coleago’s findings can be summarised in the phrase: “Coverage
20%
80 is to voice what capacity is to data”.
15%
60  As a result valuations for spectrum in the 2.1 and 2.5 GHz band
40 10%
have increased substantially.
20 5%
How Much is New Spectrum Worth to Your Operation?
0 0%
If you are interested in receiving by email a description of Coleago’s
2Q05
4Q05
2Q06
4Q06
2Q07
4Q07
2Q08
4Q08
methodology to valuing spectrum, please contact Stefan Zehle or

Graham Friend of Coleago Consulting (contact details are provided
Mbytes / Customer / Month 3G % of Base at the end of this document).

Global Trends
Packet data traffic volumes are primarily driven by mobile PC dongle users
Mobile Data Traffic
Network in Finland
Packet Traffic– Six Monthly Periods 06 to 08 Mobile PC Users Drive Traffic Increases
Figures from Finland
While data usage from handset customers is increasing, the rapid
demonstrate that the 3,500
increase in data volumes is primarily due to the take-up of HSPA PC
increase in mobile 3,000
2,900
dongles.
data traffic is  The top left hand chart shows the total packet data traffic on
2,500
primarily driven by mobile networks in Finland for the 6 monthly periods 2006 to
2008. This reached 2,900 Terabytes during July to December
Terabytes
mobile PC take-up. 2,000
2008.
1,500 1,320
 The average monthly traffic per mobile users (handset and mobile
broadband user) grew from 0.9 Mbytes in the 1st half of 2006 to 73
1,000
MBytes in the 2nd half of 2008 (bottom left hand chart).
370
500
150
 This dramatic increase is correlated with the rapid take-up of
30 60 mobile broadband subscriptions as shown in the bottom right
- hand chart.
1H 06 2H 06 1H 07 2H 07 1H 08 2H 08
Source: FICORA
Mbytes
Mobile / Mobile
Data TrafficSub / Month
Finland – MBytes / Customer / Month Finland Mobile
Finland – MobileBroadband
BroadbandTake-Up
Take-up
80.0 600 10.0%
70.0 9.0%
500
Mobile Broadband Subs '000

Mbytes / Mobile Sub / Month
8.0%
60.0
Penetration of Pops
7.0%
400
50.0 6.0%
40.0 300 5.0%
4.0%
30.0 200
3.0%
20.0 2.0%
100
10.0 1.0%
- 0.0%
-
Dec '07 Jun '08 Dec '08
1H 06 2H 06 1H 07 2H 07 1H 08 2H 08
Mobile Broadband Subs '000 Penetration of Population

1 Global Trends

Implications for Mobile Operators
Mobile packet data delivers top line growth but leads to increased capex
The Growth in Mobile Data is a Certainty Business Planning Implications
The growth in packet
Demand, revenue and mobile packet data traffic will grow When revenue and demand on network resources starts to be more
data volumes substantially in developed and emerging markets. Uncertainty driven by voice than data, business plans have to revised. Coleago’s
requires substantial remains over timing and the data traffic volume. In short, mobile business plans take account of the customer take-up, packet data
investment in RAN operators are with regards to data at the point where they were with traffic volumes, busy hour traffic, uplink vs. downlink for mobile
voice when GSM started to take off. Mobile operators now have to handset and mobile PC customers. The payback of the investment in
and backhaul
invest to capture the data revenues. Often the business case new technology and licence tends to be long and hence detailed 10
capacity. includes preventing the loss of the highest ARPU voice customers to year business plans are required.
competitors As mobile operations evolve to provide broadband packet data
Technology Choice and Timing services, the cost and revenue and profile changes.
Operators must ensure that they evolve with the technology eco-  Packet data traffic does not generate traditional interconnect
system. The multiplication of bands (700 MHz, 850MHz, 900 MHz, revenue and costs.
1800 MHz, 1900 MHz, 1700-2100 MHz, 2500 MHz etc), with different  There may be cannibalisation issues and customer acquisition
versions in different regions and technologies within bands (EDGE, and retention costs are different.
UMTS, HSPA, HSPA+, LTE) complicates the choice as to which  In some regions e.g. Africa, there are few IP peering points and
technology to deploy when and in which band. international internet connectivity can be 10 times as expensive as
Not only does it matter what spectrum is acquired but also whether in Europe or the US.
the block sizes are wide enough (wider than 5 MHz) to take full
advantage of the capabilities of LTE. There are commercial
implications with regards to handset ranges to attract customers and
headline access speeds (fastest speed claim), freeing up spectrum
for technology migration (e.g. 3G 900 MHz), roaming and of course
the network cost per bit.

If mobile data traffic takes off existing spectrum will be insufficient
A Small Percentage of Sites Will Encounter Capacity Issues
The need for Industry Demand vs Industry Capacity
Coleago’s research and modelling of forecast mobile data traffic
additional spectrum indicates that the need for spectrum is driven by a limited percentage
to provide capacity of mobile base station sites. These are sites which are located in in
Market Congestion?
for data services is in the most dense traffic areas.
the most dense The chart to the left illustrates this point:
traffic areas.  The area under the demand curve between the two capacity lines*
Capacity provides an indication of the proportion of peak market traffic that
can be addressed by deploying extra spectrum.
 This can be used as a basis to estimate the impact on market
shares of mobile broadband customers, and the impact on voice
revenues through linked accounts.
The Implication of Capacity Constraints
Time In a congested MBB world…
 …“capacity is to data what coverage was to voice”.
Market congestion transforms the mobile broadband industry from a
Peak Traffic per Site buyer’s market to a seller’s market….
 … and spectrum is king
Peak Demand per site (market Key Questions for Mobile Operators
MBit/s average)
per  Will mobile broadband (“MBB”) adoption and usage continue to
second grow at current rates?
per site  When, if at all, will the market become capacity constrained?
 Is lower-band spectrum needed to enhance in-building coverage
and/or to extend the geographic footprint?
 What will happen to existing GSM spectrum holdings?
 What about future spectrum awards / auctions?
Mobile Industry Sites

(ranked by peak demand)

Tackling spectrum auctions and valuations
Spectrum Auction
Benchmark Benchmarks
Spectrum - US$ / –MHz
Auction Results US$/ Pop
/ MHz / Pop New Spectrum for Mobile Data Services
In the longer term
3.5 A significant part of the investment to provide mobile data services
operators need will be the purchase of new spectrum, for example 2.6 GHz
3.0
additional spectrum spectrum. Coleago’s recent work with operators has shown that
to cope with the 2.5 spectrum valuations are increasing again as a result of data traffic.
US$ / MHz / Pop

anticipated data 2.0 The need for additional spectrum to provide capacity for data
services in the most dense traffic areas is best summarised in
traffic densities. 1.5 Coleago’s dictum:
1.0  “Coverage is to voice what capacity is to data.”
0.5 Valuation of New Spectrum

In many markets regulators are now releasing additional spectrum.
-
Often the spectrum award is made by means of an auction which
US 2.1GHz 2007 Rural
US 700 MHz 2008 Rural

US 700 MHz 2008 Urban
Canada 2100 MHz 2008 Urban

US 2.1GHz 2007 Urban
Turkey 2.1 GHz 3G 2008 Aver.
Hong Kong 2.6 GHz 2008

Rogers 1.9 GHz 2000
Canada 1.9 GHz 2000 South.
Canada 2100 MHz 2008 Average

US 2.1GHz 2007 Average
Canada 1.9 GHz 2000 Average
US 700 MHz 2008 Average
Norway 2.6 GHz 2008

Sweden 2.6 GHz 2008
requires operators to value different spectrum blocks.
 Coleago has carried out spectrum valuations for operators taking
into account demand, technology evolution and other commercial
Ontario
issues. Due to the inherent uncertainty, these valuations must
take into account a variety of scenarios.
 If you are interested in receiving by email a detailed presentation
of Coleago’s methodology to valuing spectrum, please contact
Stefan Zehle or Graham Friend of Coleago Consulting (contact
details are provided at the end of this document).

1 Global Trends

Selected Benchmarks
Vodafone and O2 in some European markets
Vodafone- %
Vodafone Non-Messaging Data %Non-Messaging
of Service Revenue of Revenue Data Packet Data Traffic Offsets Declining Voice ARPU
Vodafone and O2
16% While trends between operators and countries are broadly
are examples of
% Non-Messagin Data Revenue

comparable, there are some differences in operator positioning and
14%
major operators in the development of the data market.
12%
Europe who started Following the launch of HSPA, Vodafone Germany aggressively
10% promoted broadband data, targeting especially business customers.
to deliver revenue
8% In contrast O2 Germany, with a more consumer orientated lower
growth from non- usage customer base is lagging somewhat behind.
6%
SMS data services, Operators who had not launched HSPA by the end of 2008 generate
4%
with non-SMS data much less revenue from data services. Examples include E-Plus in
2% Germany and Bouygues in France. The absence of HSPA may lead
accounting for 8% to
0% to increased churn.
15% of ARPU
Q204
Q404
Q205
Q405
Q206
Q406
Q207
Q407
Q208
Q408
Reporting of revenue from data services is not standardised. In most
revenue. cases only incremental data revenue is counted whereas the whole
of the monthly fee is counted as voice revenue.
Germany UK Italy Spain
 A few operators may apportion some line rental revenue to data.
 Some operators include the value of content, others only the data
TelefonicaO2
Telefonica O2Europe
Non-SMS Data % of
- Non-SMS ARPU
Data % of ARPU transport and margin on content.
14% A key feature of European Union mobile markets is that regulated
12%
declines in voice interconnect revenue and mobile roaming charges
% Non-SMS Data ARPU
depress non-data revenue, thus lending added importance to the

10% growth in data revenue
8%
6%
4%
2%
0%
2Q04
4Q04
2Q05
4Q05
2Q06
4Q06
2Q07
4Q07
2Q08
4Q08
UK Germany Ireland Czeck Republic

Selected Benchmarks
Vodafone in key European markets
Vodafone Germany
Vodafone Germany–Monthly ARPU
Voice and - €ARPU
Data Vodafone UK
Vodafone UK -Monthly ARPU
Voice and Data- GBP
ARPU
Without the growth in
30 18% 30 25%
revenue from packet
16%
data services ARPU 25
14%
25
20%
Monthly ARPU €
declines would have
Monthly ARPU
20 12% 20
15%
been much more 10%
15 15
pronounced 8%
10%
10 6% 10
4% 5%
5 5
2%
0 0% 0 0%
Q204
Q404
Q205
Q405
Q206
Q406
Q207
Q407
Q208
Q408
Q204
Q404
Q205
Q405
Q206
Q406
Q207
Q407
Q208
Q408
Voice Related Messaging Voice Related Messaging
Non-Messaging Data Messaging % Non-Messaging Data Non Messaging Data %
Non Messaging Data % Messaging %
Vodafone Spain
Vodafone Spain- Monthly ARPU
Voice and Data- €
ARPU VodafoneItaly
Vodafone Italy- Monthly ARPU
Voice and Data- ARPU
€
40 14% 35 20%
35 18%
12% 30
16%
30
Monthly ARPU €
Monthly ARPU €
10% 25 14%
25 12%
8% 20
20 10%
6% 15
15 8%
4% 10 6%
10
4%
5 2% 5
2%
0 0% 0 0%
Q204
Q404
Q205
Q405
Q206
Q406
Q207
Q407
Q208
Q408
Q204 Q404 Q205 Q405 Q206 Q406 Q207 Q407 Q208 Q408
Voice Related Messaging
Voice Related Messaging Non-Messaging Data Messaging %
Non-Messaging Data Messaging % Non Messaging Data %
Non Messaging Data %

Selected Benchmarks
O2 in key European markets
ARPU
O2 - Germany
Germany – Voice and Data ARPU ARPU
O2 UK -- Voice
UK and Data ARPU
The level and growth
30.00 25% 40.00 35%
in packet data ARPU
35.00 30%
is not necessarily 25.00 20%
30.00
stronger in more 20.00
25%
25.00
developed countries 15%
ARPU €
ARPU €
20%
15.00 20.00
10% 15%
15.00
10.00
10%
10.00
5%
5.00 5%
5.00
0.00 0% 0.00 0%
4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08
Voice Related SMS Non-SMS SMS % Non-SMS % Voice Related SMS Non-SMS SMS % Non-SMS %
ARPU
O2 - Czeck
Czech Republic
Republic - Voice and Data ARPU ARPU
O2 - Ireland
Ireland - Voice and Data ARPU
25.00 14% 60.00 25%
12%
20.00 50.00 20%
10%
40.00
15.00
ARPU €
8% 15%
ARPU €
30.00
10.00 6%
10%
4% 20.00
5.00 5%
2% 10.00
0.00 0% 0.00 0%
4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08
Voice Related SMS Non-SMS SMS % Non-SMS % Voice Related SMS Non-SMS SMS % Non-SMS %

Selected Benchmarks
Telefonica - Spain
Telefonica Spain
Spain –- 3G Take-Up
Adoption Telefonica Spain –Data
Telefonica Spain SMSARPU
vs. Non-SMS Data ARPU
Migration to 3G
6.0 60%
delivers growth in 7,000 26% 30%
24%
packet data revenue 5.0 50%
3G Enabled Customers '000

6,000 25%
21%
5,000 18% 4.0 40%
Data ARPU €
20%
15%
4,000
13% 3.0 30%
15%
3,000 10%
7% 10% 2.0 20%
2,000 5%
4%
2% 5% 1.0 10%
1,000
- 0% 0.0 0%
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
3G Customers '000 3G % PTP SMS ARPU Other Data ARPU % Other Data
Telefonica Spain
Spain –Voice
Voice&and
DataData ARPU
& ARPU Year on Year
Telefonica ARPU
Spain Growth
– Year on Year ARPU Growth
40 20% 30%
35 18% 25%
16% 20%
30
YoY ARPU Growth

14%
15%
25 12%
ARPU €
10%
20 10%
5%
15 8%
6% 0%
10
4% -5%
5 2% -10%
0 0% -15%
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
Voice ARPU Data ARPU Data % Total Voice SMS Other Data

Selected Benchmarks
Mobilkom - Austria
MobilkomAustria
Mobilkom Austria- Voice
Voice &
& Data
Data ARPU
ARPU Mobilkom
Mobilkom Handset
Austria & PC Dongle
- Handset Customers
& HSPA Dongle Customers
Mobilkom Austria is
one of the most 45 40% 5,000 10%
40 4,500 9%
successful operators 35%
35 4,000 8%
generating growth 30%
Monthly ARPU €
Customers '000
30 3,500 7%
from mobile PC 25%
3,000 6%
25
connectivity, partially 20% 2,500 5%
20
15% 2,000 4%
offsetting declines in 15
10% 1,500 3%
voice revenue. 10
1,000 2%
5 5%
500 1%
0 0%
- 0%
1Q08
2Q08
3Q08
4Q08
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
4Q04
2Q05
4Q05
2Q06
4Q06
2Q07
4Q07
2Q08
4Q08
Non-Data ARPU Data ARPU Data % of ARPU Handset Customers PC Dongle Customers PC DongleCustomers
Mobilkom
Mobilkom Austria- Mobile
Austria RevenueService Revenue Telekom Austria
Mobilkom AustriaYear onon
- Year Year Revenue
Year Growth
Revenue Growth
500 52%
450
42%
400
350 32%
Y-o-Y Growth
300
Million €
22%
250
200 12%
150 2%
100
-8%
50
0 -18%
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
Non-Data Data Total Non-Data Data

Selected Benchmarks
TIM - Italy
TIMItaly
TIM Italy- Voice & Data Revenue Breakdown Browsing Generates Most Broadband Revenue
TIM in Italy published
Revenue from data services increased substantially and the growth
figures which 3,000 16%
accelerated in recent quarters.
indicate that growth 2,500
14%
 Revenue from “Interactive Data Services” which excludes
in data revenue is 12% messaging, and focuses on packet data services increased
2,000 rapidly since the widespread adoptions of 3G devices and now
mostly due to an 10%
€ Million
account for 14% of overall revenue.
increase in browsing. 1,500 8%
 Within the “Interactive Data Services” revenue stream, during
6%
1,000 2008 revenue from browsing showed the highest compound
4% quarterly growth rate.
500
2%  While messaging still accounts for the largest part of data
0 0% revenue, growth is very slow.
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
TIM is also successful in growing is mobile PC revenue stream. At
the end of 2008 mobile PC broadband customers accounted for 7%
Voice Messaging Interactive % Interactive of TIM’s customer base.
TIM
TIM Italy Messaging
- Browsing & BrowsingData
& Messaging Revenue
Revenue TIMItaly
TIM Italy- Mobile
MobilePC
PCBroadband
BroadbandCustomers
Customers
600 3,000 8%
7%
500 2,500
6%
% of Customers
400 2,000
5%
€ Million
'000
300 1,500 4%
3%
200 1,000
2%
100 500
1%
0 0 0%
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
Messaging Brow sing Mobile PC Broadband Mobile PC Broadband %

Selected Benchmarks
Portugal Telecom - Portugal
Portugal
Portugal Telecom
Telecom - SMS- SMS & Non-SMS
& Non-SMS Data Data
Revenue PortugalTelecom
Portugal Telecom- Mobile
Mobile Service
Service Revenue
Revenue
The experience of
14% 400
Portugal Telecom
350
Mobile exemplifies 12%
that without a 10% 300
contribution to 250
8%
€ Million
revenue growth from Seasonality 200
6%
150
non-SMS data, the 4%
business would have 100
2%
been unable to 50
0% 0
deliver top line
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
2006
2007
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
revenue growth.
SMS % of Revenue Non-SMS % of Revenue
Voice SMS Non-SMS Data
Year on Year
Portugal Revenue
Telecom Growth
- Mobile % Revenue Y-o-Y Growth
Service Portugal
Portugal Telecom
Telecom Revenue
- Service Growth
Revenue 2008Full Year 2008
Growth
160% 80 69.2
140%
60 No top line
120%
Year on Year Growth
growth without 39.7

100%
40 non-sms data
Euro Million
80%
60% 20
40%
0
20% -1.6
0% -20
-20% -27.8
-40
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
Voice SMS Non-SMS Data Total
Voice SMS Non-SMS Data Total

Selected Benchmarks
Finland
Finland–Mobile
Finland MobileBroadband
BroadbandTake-Up
Take-Up Mobile Broadband Growth Impacts on ADSL
Mobile broadband
In Finland mobile broadband penetration of population grew from
can rapidly take a 600 10.0%
2.7% as at Dec ’07 to 9.0% as of Dec ’08, i.e. 6.7% of the population
substantial share of 9.0% adopted mobile broadband within a year. This rapid growth impact on
Mobile Broadband Subs '000

500
total broadband 8.0% overall broadband market shares:
Penetration of Pops
7.0%  “The number of the subscriptions increased by approximately
market 400
6.0% 336,000, or by 19 per cent year on year, due mainly to mobile
300 5.0% broadband subscriptions whose number rose by over 336,000 in
4.0%
2008. The number of subscriptions based on DSL technology fell
200 by almost 40,000. Not even the deterioration in the economic
3.0%
situation during the second half of 2008 could dampen demand for
2.0% mobile broadband connections, as evidenced by their growth rate
100
1.0% in volume terms in the second half exceeding that in the first half.”
- 0.0%  “The main reason for these [’07 compared to ’08] market share
Dec '07 Jun '08 Dec '08 changes lies behind the spread of mobile broadband
Mobile Broadband Subs '000 Penetration of Population subscriptions. If we exclude mobile broadband subscriptions, no
major market share changes occurred in 2008.”
Broadband
Finland Subscriptions
- Broadband by Type - by
Subscriptions Dec 08 – Dec ‘08
Type Source: FICORA, Communications Markets in Finland 2008
Mobile Broadband as an Alternative to Fixed

Wireless
 The volume of data transferred over mobile communications
Broadband Others
Mobile
networks multiplied during 2008, increasing from around 500
1% 1%
Broadband terabytes to approximately 4,200 terabytes. This data volume
23% transferred over mobile communications networks in 2008
corresponds to roughly one standard CD disk of monthly data
transfer per mobile broadband subscription.
Source: FICORA, Communications Markets in Finland 2008
Cable Modem DSL

10% 59%
Real Estate
Company
6%

Selected Benchmarks
Sweden
% of Customers
Sweden - Mobile Using Data Using Non-SMS Data 1H ‘08
Customers Mobile Data
Sweden Mbytes
- Mobile Data/ Customer / Month
Traffic: Mbytes per- Sweden
Customer per Month
Sweden provides an
60%
example for the 100
growth in data 50%
90
Mbytes/ Customer / Month

80
usages and packet
% of Installed Base
40% 70
data traffic in both 60
the consumer and 30% 50
business market 40
20% 30
segments
20
10%
10
0
0%
2H 03 1H 04 2H 04 1H 05 2H 05 1H 06 2H 06 1H 07 2H 07 1H 08
3G Users
Sweden % of
- 3G All Mobile%Users
Customers of all Mobile Customers Data Card
Sweden - 3G/ Dongle Users %
%of
ofBase
all Mobile Customers
35% 7.0%
31%
5.8%
30% 6.0%
25%
% of all Customers
25% 22% 5.0%
3G Penetration
2.0%
20% 3.7%
20% 17% 18% 4.0%
16%
15% 12% 13% 3.0% 1.5%
1.9%
10% 2.0% 3.8%
1.0%
1.0%
5% 1.0% 2.3%
0.7% 0.9%
0% 0.0% 0.3%
Q4 06 Q2 07 Q4 07 Q4 06 Q2 07 Q4 07 Q2 08
Consumer Business Blended Consumer Business

Selected Benchmarks
Denmark
Mobile Broadband
Denmark Users
– Mobile Broadband Users Laptop Users Generate The Vast Majority of Data Traffic
Evidence from
1,200 “At the end of 2008 there were a total of 302,000 Danish mobile
Denmark indicates broadband data-only subscriptions, e.g. used via USB dongles or
that network demand 1,000 data cards for computers. This corresponds to an increase of more
for mobile data is than 45 percent compared to first half of 2008.”
800
essentially driven by The vast majority of mobile data traffic is generated by mobile PC
users. Based on figures presented by the Danish National IT and
'000
laptop users rather 600
Telecom Agency, during the 2nd half of 2008 mobile laptop users
than handset 400 generated on average 1,658 Mbytes of traffic per month whereas
broadband users. broadband handset users only generated 22 Mbytes per month.
200 Therefore network capacity demand is driven essentially by mobile
laptop users but the revenue per Mbyte of traffic is much lower than
0
for handset users.
1H08 2H08
Handset Mobile PC Dongle
Denmark - Mobile
All Networks Data
Mobile Traffic
Data (Allper
Traffic Networks per Half Year)
Half Year Mobile Data
Denmark TrafficData
– Mobile per Traffic
User per Month
/ User / Month
3,000 1,800 1,658
1,600
2,500
1,400
2,000 1,200
Terrabytes
Mbytes
1,000
1,500 800
1,000 600
400
500 200 22
0 0
1H08 2H08 Handset Mobile PC Dongle
Handset Mobile PC Dongle

Selected Benchmarks
Hungary
Mobile PC
Hungary Penetration
- Mobile Data Dongle Penetration of Population Mobile PC Dongle Usage in a Declining Voice Market
Despite having much 4.7%
5.0% 4.6% Hungary's mobile penetration is above 100%. Voice revenue is
lower per capita 4.3%
4.5% declining, but the growth in mobile data provides some revenue
GDP than for 4.0% growth.
Mobile PC Penetration
example Germany 3.5% Mobile PC user penetration in Hungary jumped rapidly and is now
and France, Hungary 3.0% growing at around 0.2% points per month.
2.5% The monthly data traffic per active data dongle user is around 1.8
saw a rapid take-up
2.0% Gbytes. This means operators have to increase their capital
of mobile data 1.5% expenditure programme to cater for these traffic volumes. The result
dongles for laptops. 1.0% is a reduction in cash flow.
0.5% The impact of the growth of data traffic is exemplified by an extract
0.0% from Pannon’s (one of three mobile operators in Hungary) Q4 08
Feb-09 Mar-09 Apr-09 Financial Report:
 “Revenue in Q4 2008 was HUF 48.5 bn, HUF 1.4bn lower than in
Q4 2007 due to the decrease of interconnect revenues as a result
of termination fee cut from January 2008. 2008 revenue is HUF
4.2bn lower. Handset-related revenue also decreased, but it was
Gbytes /-User
Hungary / Month
Mobile Data Dongle Monthly Traffic / User (Gbytes) partly compensated by higher subscriber base and mobile
2.00 1.83
broadband internet related revenue.”
1.77
1.80  “Capital expenditure was HUF 6bn in Q4, reaching a 2008
1.56 balance of HUF 17.9bn. It is a significant increase compared to
1.60
2007 (14.8bn).”
Gbytes / User / Month
1.40
HUF: Hungarian Forint
1.20
1.00
0.80
0.60
0.40
0.20
-
Feb-09 Mar-09 Apr-09

Selected Benchmarks
Telstra - Australia
Telstra
Telstra 3GAdoption
- 3G Adoption&&Non-SMS
Data Services Revenue
Service Revenue Growth Mobile -Service
Telstra Year onRevenue Growth
Year Mobile Service Revenue Growth
Telstra Australia
100%
shows good ARPU 60%
54%
growth from 3G 50% 80%
47%
services, illustrating
Year on Year Growth

40% 60%
the link between 35%
handset adoption, 30% 40%
PC data dongle % 22%
20% 21% 20%
18%
adoption and 15%
12%
revenue growth. 10% 10% 0%
5% 7%
2%
0% 0% -20%
Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08
3G % of Base Non-SMS Data % of Retail Service Revenue Other Data SMS Voice & Other Blended
Telstra
Telsta 2Gvs.
- 2G vs.3G
3GCustomer
CustomerARPU
ARPU Telstra- 3G
Telstra Mobile
Mobile PC PC Customers
Customers % all
% of of Customers
Base
90 9%
8.5%
80 8%
Mobile PC Customers % of Base

70 7%
60 6.3%
6%
50
A$
5% 5.0%
40
30 4%
3.6%
20 3%
10 2% 2.2%
0
1%
Dec-06 Jun-07 Dec-07 Jun-08 Dec-08
0%
3G ARPU 2G ARPU Dec-06 Jun-07 Dec-07 Jun-08 Dec-08

Selected Benchmarks
StarHub - Singapore
StarHub- Singapore
StarHub - 3G
3G Adoption & Growth in Data
and Traffic
Packet Data Traffic StarHub
StarHub Packet
- 3G Data Traffic
Customer Packetper 3GTraffic
Data Customer
For StarHub in
180 40% 500
Singapore data 438.7
160 450
Mbytes / Customer / Month

traffic has increased 35%
Mbytes / 3G User / Month

140 Soft launch HSPA 400
30%
% of Customers 3G
dramatically since of 3G launch 327.2
120 350
the launch of HSPA, 25% HSPA launch
100 300 4 Aug 07
but MMS does not 20%
80 250
find favour with 15%
60 200 164.0
customers 40 10%
150
102.3
20 5% 78.7
100
0 0% 50 17.3
1.6
2Q05
4Q05
2Q06
4Q06
2Q07
4Q07
2Q08
4Q08
0
2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
Mbytes / Customer / Month 3G % of Base
StarHub- Singapore
StarHub - Voice
Voice & Data ARPU& Data ARPU MMS per
StarHub Customer
- MMS per Usage
Monthly Month per Customer
60 25% 1.4
50 1.2
20%

40 1.0
15%
ARPU
30 0.8
10%
20 0.6
5% 0.4
10
0.2
- 0%
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
0.0
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
Voice Data Data %

Selected Benchmarks
M1 - Singapore
M1 -Singapore
M1 Long TermMonthly
Voice &ARPU SN$ Trend
Data ARPU SMS,
M1 Packet
- Voice, Data
SMS, & Voice
Packet ARPU
Data ARPU
Figures for M1
70 25% 40 12%
demonstrate that
historically the 60 35
20% 10%
growth in data ARPU 50 30
Monthly ARPU S$
8%
did not offset the
ARPU S$
15% 25
40
decline in voice 20 6%
30 10%
ARPU but the growth 15
20 4%
of non-SMS data 10
5%
may actually lead to 10 2%
5
increasing ARPU in 0 0%
0 0%
mature markets. 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
Voice Data % Data
Voice SMS Packet Data Packet Data %
SMS,
M1 Packet
- Mobile Data &Revenue
Service Voice Revenue SN $ Million M1 SMS,
- Service Revenue
Packet Data &%Voice
Voice,Revenue
SMS, Packet
TrendData
160 100%
150 95%
140
90%
130
85%
120
S$ mn
110 80%
100 75%
90
70%
80
70 65%
60 60%
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
Voice SMS Packet Data Voice SMS Packet Data

Selected Benchmarks
Digi Malaysia
DigiMalaysia
Digi Malaysia– ARPU
ARPU Components Digi introduced HSPA 7.2 and commercially launched mobile
Digi introduced
70 7%
broadband in Q1 2009 with aggressive dongle tariffs.
HSPA 7.2 and  While during 2007 and 2008, packet data ARPU did not show
commercially 60 6%
much growth during Q4 2008 packet data ARPU started to take
launched mobile 50 5% off.
Packet Data %
ARPU RM
broadband in Q1 40 4%  In Q1 2009 packet data ARPU made a meaning full contribution to
overall mobile service revenue growth, a key factor being the
2009 with aggressive 30 3%
launch of mobile broadband dongle packages “Broadband done
dongle tariffs 20 2% right”.
10 1%
0 1Q05 0%
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
Voice Related SMS Packet Data % Packet Data
Digi Malaysia
Digi Malaysia–Components
ComponentsofofRevenue
RevenueGrowth
Growth Digi Malaysia Mobile Broadband Tariff Packages
90%
Contribution to revenue Growth
80%
70%
60%
50%
40%
30%
20%
10%
0%
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09
SMS Non-SMS Data Voice Related

Selected Benchmarks
NTT DoCoMo - Japan
NTT DoCoMo
NTT DoCoMo –Japan 2G &of
Diffusion 3G3G
Cellular Subscribers
Technology Japan Provides a Window to the Mobile Data Future
Japan provides an
60,000 100%  NTT DoCoMo in Japan provides an example of a company that
indication what the 90% has almost completed 2G (mova) to 3G (FOMA) migration within
future development 50,000
80% 6 years.
of packet data
Subscribers '000
40,000
70% – GSM / 3G operators should experience a somewhat faster
services may look 60% migration, thus freeing up 2G spectrum for refarming.
30,000 50%  Packet data revenues, driven by the acclaimed iMode application,
like.
40% account for 35% of ARPU for the year ending March ‘09.
20,000
30%  Much of the data traffic is due to applications not yet available
20% elsewhere.
10,000
10% – In 2008 50% of top 10 bestsellers were mobile books.
0 0%
– In 2009 86% of high schoolers read mobile books.
2003 2004 2005 2006 2007 2008 2009
Mova 2G Foma 3G 3G %
NTTDoCoMo
NTT DoCoMo–Japan
iMode I-Mode Penetration
User Penetration NTT
NTT DoCoMo
DoCoMo Japan
– Voice- Monthly
& PacketARPU
Data ARPU
100% 9,000 40%
90%
% of Customers Using I-Mode
8,000 35%
80% 89% 90% 91% 90% 90% 89%
86% 7,000 30%
70%78%
6,000
60% 25%
5,000
YEN
50% 20%
4,000
40% 15%
3,000
30%
2,000 10%
20%
10% 1,000 5%
0% 0 0%
2002 2003 2004 2005 2006 2007 2008 2009 2003 2004 2005 2006 2007 2008 2009
Voice Packet Packet %

Selected Benchmarks
North America
US ARPU
USA (AT&T,
- Voice Verizon,
& Data Sprint) Verizon, Sprint)
ARPU (AT&T, Packet Data Traffic Offsets Declining Voice ARPU
Data services
60 30% By Q4 2008 data ARPU among the major US operators had grown to
revenue is growing 26% of total ARPU. However, the growth in non-SMS data ARPU
well and offsets 50 25% merely offsets declines in voice ARPU rather than increasing total
declining voice ARPU.
40 20%
ARPU US$
ARPU. However T- T-Mobile launched 3G service in 2008 because the company only
acquired suitable spectrum for broadband packet data services in the
Mobile fell behind 30 15%
AWS auction of 2007.
due to the late 20 10%  T-Mobile’s contribution of data to revenue growth is lower than
launch of 3G that for AT&T, Verizon and Sprint. This underlines that non-SMS
10 5% data is also a key revenue growth driver in the USA.
services
0 0% In Canada data revenue had increased to 18% of network revenue by
the end of 2008.
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
Voice Data Data %
% Data
US ARPU
- Mobile Operators: Data % of ARPU Data % of
Canada Network
- Mobile RevenueData % of Network Revenue
Operators:
30% 20%
18%
Data % of Netwokr Revenue

25% T-Mobile falling behind 16%
due to less non-SMS data
% of ARPU Data
14%
20%
contribution
12%
10%
15% 8%
6%
10%
4%
2%
5%
0%
4Q04
2Q05
4Q05
2Q06
4Q06
2Q07
4Q07
2Q08
4Q08
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
AT&T Verizon Sprint T-Mobile Rogers Telus

Selected Benchmarks
North America
Data Contribution
North to Revenue
America - Data Growth
Contribution to Revenue Growth Data is the Main Driver in Revenue Growth
In the US, the cross-
For those operators who have brought to market a good data
Data Contribution to Revenue Growth

over point where 100%
offering, data is now the main determinant of revenue growth in the
90%
data contributes US and will become even more important in future.
80%
more to revenue 70%  In the USA, for both Verizon Wireless and AT&T Wireless in Q4
growth than voice 60% 2006 data revenue contributed more to overall revenue growth
50% than voice.
was reached in Q4
40%  In Q2 2007 the trend towards data revenue growth started to
2006; Canada lags 30% accelerate. By Q4 2008 Verizon generated 73% of revenue
somewhat behind 20% growth from data and AT&T 77%.
10%
 Canada is also becoming dependent on data revenue to generate
0%
overall revenue growth, particularly in the case of Telus.
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
 Other operators, such as Rogers, still achieve excellent revenue
growth from voice, lowering the proportionate impact of data.
Rogers Telus Verizon AT&T T-Mobile However, data revenue growth is already taking off resulting in
excellent EBITDA margin growth.
USA
Data- Contribution
Data Contribution to Revenue
to Revenue Growth Average USA
Growth
65%
55%
45%
35%
25%
15%
5%
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08

Selected Benchmarks
AT&T - USA
AT&T -USA
AT&T - Voice
Voice and
& Data Data ARPU
ARPU AT&T -Year-on-Year
AT&T Voice & DataRevenue
RevenueGrowth - US$ Million
– US$ mn
AT&T, the largest
60 30% 1,800 90%
GSM / HSPA
1,600 80%
operator in the USA, 50 25%
1,400 70%
has been successful
Monthly ARPU US$

40 20% 1,200 60%
in growing revenue
US$ mn
1,000 50%
from SMS and other 30 15%
800 40%
data services.
20 10% 600 30%
400 20%
10 5%
200 10%
0 0% - 0%
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
Q106
Q206
Q306
Q406
Q107
Q207
Q307
Q407
Q108
Q208
Q308
Q408
Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408
Voice ARPU Data ARPU Data % Voice Data Data %
AT&T–USA
AT&T - MMS
Growth per Customer
in MMS Traffic per Month Voice
AT&T –and Data
Voice & Contribution to Revenue
Data Contribution Growth
to Revenue Growth
4.0 90%
3.5
3.5 80%
2.9
70%
3.0
2.4 60%
2.5
50%
%
2.0 1.7
1.5 40%
1.5 1.2 30%
1.0
0.8 20%
1.0 0.7
0.6
0.4 0.5 10%
0.3
0.5
0%
0.0 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408
1Q05
2Q05
3Q05
4Q05
Q106
Q206
Q306
Q406
Q107
Q207
Q307
Q407
Q108
Data Voice

Selected Benchmarks
AT&T - USA
AT&T
AT&T Integrated Device
– Integrated Users
Device Users Integrated Devices
AT&T indentifies the
30% In its Q4 2008 earning release AT&T drew attention to the
number of integrated importance of customers using “integrated devices”, i.e. devices with
25%
data device users as 25% 22% internet functionality, to overall revenue growth.
a key driver for data
% of Postpaid Customers
 60% of 4Q08 postpaid net adds selected integrated devices
18%
revenue growth. 20%  Integrated device subscriber ARPUs average 1.6x postpaid base.
16%
Notably, AT&T
15% 13%
benefited from its 10% 11% The Apple iPhone Contributes to Revenue and Margin Growth
agreement with 10% “iPhone 3G results confirm plan assumption, outlook:
Apple launching the  1.9 million activations in 4Q08 and >4 million in less than six
iPhone in the USA. 5% months;
 ~40% new AT&T subscribers
0% – High ARPU
Q207 Q307 Q407 Q108 Q208 Q308 Q408
– Low churn
– High recurring margin
 Net present value is >2x average postpaid subscriber
AT&T Apple iPhone Users vs. Average Postpaid Customer
 Consistent with previously outlined expectations, the successful
ramp of AT&T’s iPhone 3G initiative helped drive a substantial
sequential improvement in AT&T’s wireless OIBDA margins.
AT&T’s fourth-quarter unadjusted wireless OIBDA service margin
was 35.8 percent, up from 33.5 percent in the third quarter of
2008 and 35.3 percent in the year-earlier quarter.”

Selected Benchmarks
T-Mobile - USA
T-MobileUSA
T-Mobile - Data Contribution
– Data to Revenue
Contribution Growth
to Revenue Growth Data ARPU
T-Mobile USA – Data ARPU %
T-Mobile USA only
45% 20% 18%
acquired 3G 43% 17%
17%
17%
40% 40% 18% 16%
16%
spectrum in 2007 38% 15%
15%
35% 35% 36% 16%
Data % of Total ARPU

34% 13%
and therefore was
Data % of Growth
30% 31% 30% 14% 12%
29% 11%
late to launch 3G 25% 25% 25%
26%27% 12% 10%
25% 9%9%
services. This 20%
21% 10%
7%
8%
8% 6%
resulted in slower 15% 5%5% 5%
6%4%4%
data revenue growth 10% 4%
compared to AT&T 5% 2%
and Verizon. 0% 0%
Q403
1Q04
2Q04
Q3/04
Q4/04
Q1/05
Q2/05
Q3/05
Q4/05
Q1/06
Q2/06
Q3/06
Q4/06
Q1/07
Q2/07
Q3/07
Q4/07
Q1/08
Q2/08
Q3/08
Q4/08
Q3/05
Q4/05
Q1/06
Q2/06
Q3/06
Q4/06
Q1/07
Q2/07
Q3/07
Q4/07
Q1/08
Q2/08
Q3/08
Q4/08
FY/04
FY/05
- Voice&&Data
T-Mobile USA Voice DataRevenue
Revenue & Data
T-Mobile USA - Voice and Revenue
Data ServiceSplit
Revenue
20,000 100% 5% 6% 8%
18,000 90% 7% 10% 9%
16,000 80%
14,000 70%
12,000 60%
US$ mn
10,000 50%
88% 84% 83%
8,000 40%
6,000 30%
4,000 20%
2,000 10%
0 0%
12M 07 12M 07 12M 08 12M 07 12M 07 12M 08
Voice Related Messaging Voice Related Messaging Non Messaging Data

Non Messaging Data ARPU Revenue

Selected Benchmarks
Verizon - USA
Verizon -Voice
Voiceand
& Data
DataARPU
ARPU Verizon
Verizon -Data
3G Enablement
Customers and Data Users
Verizon, the largest
90%
EV-DO operator in 60 30%
Data / EV-DO Customer % of Base

80%
the USA, is equally 50 25% 70%
successful in
Monthly ARPU US$
Data % of ARPU
40 20% 60%
delivering revenue
50%
growth through data 30 15%
40%
services. 20 10% 30%
10 5% 20%
10%
0 0%
0%
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
Q106
Q206
Q306
Q406
Q107
Q207
Q307
Q407
Q108
Q208
Q308
Q408
1Q04
3Q04
1Q05
3Q05
Q106
Q306
Q107
Q307
Q108
Q308
Voice ARPU Data ARPU Data ARPU %
3G Enabled Customers Data Users
Verizon -MMS
MMS Usage Verizon –Music
Verizon Music&&Video
VideoDownloads
Downloads
MMS usage is 8.4 0.3 0.2
9
growing, but still only 0.2
8 7.2
MMS per Customer per Month
Downloads / Customer / Month

amounts to 2% of 6.9
0.2 0.2
7 0.2
SMS usage and 5.5 0.2 0.2
6
music & video 4.8 0.2
5
downloads are as yet 3.8
4 3.1
marginal. 2.5 0.1
3 2.0
1.7
1.4
2 1.1
0.8 0.9 0.1
0.4
1 0.20.2 0.2 0.3 0.3
-
-
1Q04
3Q04
1Q05
3Q05
Q106
Q306
Q107
Q307
Q108
Q308
Q307 Q407 Q108 Q208 Q308 Q408

Selected Benchmarks
Telus - Canada
Telus
Telus Data & Non-Data
Canada Quarterly
– Voice and Revenue
Data Revenue Telus
Telus Canada
Canada Voice
– Voice & Data
and Data ARPU
ARPU
“Growth in data
1,200 20% 70 20%
revenues continues 18%
18% 60
to reflect strength in 1,000
16% 16%
text messaging 14% 50 14%
800
ARPU CN$
CN$ Million
(including incoming 12% 40 12%
text messages) and 600 10% 10%

8% 30 8%
smartphone service 400
6% 20 6%
revenues driven by 4%
200 4%
increased usage and 2% 10
2%
features, data 0 0% 0 0%
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
roaming, migration of
existing subscribers
Voice & Other Data Data % of Netw ork Revenue Voice Data Data %
to full-function
smartphones and
Telus
TelusCanada
Year on–Year
Voice and Data
Revenue YoY Revenue Growth
Growth Telus
TelusCanada – Data % ofto
Data Contribution Revenue Growth
Revenue Growth
EVDO-capable
140% 100%
handsets.” Telus Q4
90%
Quarterly Year on Year Growth
’08 Earnings Release 120%

80%
Quarterly Year on Year

100% 70%
60%
80%
50%
60%
40%
40% 30%
20%
20%
10%
0% 0%
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
Netw ork Revenue Data Voice & Other

Selected Benchmarks
Rogers - Canada
Rogers
Rogers Canada
Canada Voiceand
– Voice & Data
DataARPU
Revenue Extract From Rogers Q4 2008 Earning Release
Roger’s Q4 2008
80 20%  “For the three months ended December 31, 2008, wireless data
results illustrate that 18% revenue increased by approximately 36% over the corresponding
70
data pricing is 16% period of 2007, to $262 million. This increase in data revenue
60 reflects the continued growth of smartphone and air card devices
subject to 14%
which is driving the use of text messaging and e-mail, wireless
ARPU CN$
50
competitive 12%
Internet access, and other wireless data services, partially offset
pressures and higher 40 10%
by the impact of certain data services price reductions made in
8% the second and third quarters of 2008. For the three months
cost of customer 30
6% ended December 31, 2008, data revenue represented
acquisition offsets 20
4% approximately 18% of total network revenue, compared to 14% in
revenue gains. 10 2% the corresponding period of 2007.”
0 0%  “Wireless activated more than 400,000 smartphone devices,
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
including iPhone 3G and BlackBerry devices, during the fourth
quarter of 2008. Approximately 40% of these activations were to
Voice Data Data % subscribers new to Wireless with the other 60% being to existing
Wireless subscribers who upgraded devices, committed to new
multi-year term contracts, and in most cases attached both voice
Rogers
Rogers Data– Contribution
Canada toRevenue
Data Contribution Growth
to Revenue Growth and monthly data packages which generate considerably above
45% average ARPU. Smartphone devices as a percent of postpaid
Data Contribution to Revenue Growth
40% gross additions increased to approximately 49% in the current

35%
quarter from approximately 13% in the same quarter in 2007,
while smartphone devices as a percent of device upgrades
30% increased to approximately 51% in the current quarter from
25% approximately 18% in the same quarter in 2007. Because
20% Wireless incurs significant handset subsidies for each unit
activated, the results of this successful smartphone sales
15%
campaign drove significantly higher acquisition and retention
10% costs at Wireless.”
5%
0%
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08

Selected Benchmarks
Vivo - Brazil
Vivo
VivoBrazil
Brazil– -Data
Data%%of
ofService
ServiceRevenue
Revenue Extract From Vivo Q4 2008 Earning Release
In emerging markets
 “Data revenue plus VAS has continued to represent 10.0% of the
SMS still delivers 12%
Total Service Revenue, having recorded a growth of 20.8% in
growth, but packet 4Q08 over 4Q07. Several factors contributed to this: increase in
Data % of Service Revenue

10%
data services are the number of customers with access to Vivo Zap (mobile
8% internet), of customers with Blackberry handsets and SmartMail,
starting to make an
and the increase in the use of SMS Interactivity, which recorded a
impact. 6% growth of more than 400%. The peer to peer SMS has continued
to be the largest selling service, accounting for 46% of the data
4% and VAS revenue. In December, Vivo had more than 7 million
sole users and more than 570 million of page views in WAP. The
2%
stimulation for usage is achieved by campaigns and broadcast
and development of thematic portals, such as “Eu Vivo Cinema”
0%
(“Camp Rock” and 007 Quantum of Solace”) and “Vivo na
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
Q108
Q208
Q308
Q408
Música”. Mallu Magalhães, who won success in My Space,
launched her 1st album in October 2008 only to Vivo customers.”
Mobile Broadband as an Opportunity in Emerging Markets

July 2009: The chairman of Telecom Italia Mobile (TIM), Gabriele
Galateri, says the firm intends to invest € 3 billion (US$ 4.2 billion) in
its Brazilian unit between now and 2011. TIM Participacoes, trading
as TIM Brasil, is the country’s third largest wireless carrier by
subscribers and has ambitious plans to expand its broadband
internet services in Brazil. Galateri sees the business potential of
mobile broadband because of weaknesses in the country’s fixed
network infrastructure.

1 Global Trends

Coleago Consulting
A leading boutique telecoms, media and technology consulting and training firm
Trusted partner of global and regional telecoms
Based in the UK
players and regulators
Coleago provides Telecoms players around the world trust Coleago
consulting and to provide insight and advice on key strategic and
training services to commercial issues through our broad range of
consulting and training services.
global and regional
telecoms, media and Experience based consulting approach Strategy
We do not use inexperienced associates or
technology players
analysts – all our consultants have a minimum of
Marketing
around the globe 10 years experience and most have over 15 years,
often at board level in operational businesses.
Developed and developing market experience
Coleago has worked with clients in developed
markets and also in some of the most challenging
emerging markets including the Yemen and the Training Networks
Sudan and we have launched and operated GSM
businesses in countries such as Algeria.
Advice covering a broad range of technologies
We have advised clients on wireless, fixed, cable,
satellite and fibre based technologies. We have
specialist expertise in spectrum valuations and
spectrum auctions have participated in more than
Finance
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Operations
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We have developed strategies and business plans
for media companies, TV channels and web based
businesses as well as technology companies.
Innovative training services
Coleago has developed a range of training and
management development programmes, including
a War Game (business simulation)

Coleago Consulting
Experienced based consulting approach
Experienced industry experts
All our consultants
Coleago only recruits and delivers projects with
have a minimum of highly experienced industry professionals with a Partner
10 years telecoms minimum of 10 years experience and the majority
experience and the have over 15 years, often gained in operational Senior
roles at board level in operating companies. Managers
majority have more
We do not use inexperienced juniors or analysts.
than 15 years in the Where low level analysis and research is required
sector we outsource these activities to a low cost, Manager
specialist research firm based in India.
Experience based consulting approach Traditional
Our insight and advice is therefore based on Senior Consultant
Consulting Firm
practical experience and proven processes and Model
methodologies developed over many years.
Clients can be confident that their project will be
delivered by Partner and Senior Manager level Junior Consultant
consultants from start to finish and our solutions
and recommendations will be credible, relevant,
realistic and practical. Analyst
Small, effective teams
Our consultants are highly experienced, multi-
skilled and have extensive project management
experience. This allows Coleago to deploy
smaller teams as we do not require the hierarchy
of traditional consultancies to manage large
teams of juniors. Clients find our small teams
easier to work with and integrate into their own
project teams.
Exceptional vale
By eliminating many of the overheads of
traditional firms we are able to offer end-to-end
partner level consulting at fee rates that provide
exceptional value.

Coleago Consulting
We provide a broad range of consulting services
We specialise in
Strategy Marketing Networks Operations Finance
telecoms business
analysis, planning
and modelling to Environmental Analysis Market Research and
Technology Strategy Interim Management Due Diligence
and Scenario Planning Forecasting
ensure that our
advice and
Industry and Competitor
recommendations Marketing Strategy and Programme and Project Financial Modelling and
Analysis and Network Planning
Market Planning Management Forecasting
deliver increased Benchmarking
shareholder value
Customer Developing Excel
Strategic Resource and Network Audit and Preparing Information
Segmentation and Operational Support
Competency Audits Optimisation Memorandum
Value Analysis Tools
Strategic Analysis, Vendor Selection and Reference Interconnect

Valuation and Fund
Positioning and Geo Marketing RFQ Process Offers and Interconnect
Raising
Planning Management Negotiations
Strategic War Gaming Product and Service MVNO Planning and

Vendor and Programme Spectrum and Licence
and Business Development and Host Network
Management Valuations
Simulations Launch Negotiation
Acquisition and
Churn and Loyalty Technical Due Performance Regulatory Cost
Expansion Strategy and
Management Diligence Improvement Modelling
Opportunity Screening
Regulatory and Pricing and ARPU

Interconnect Strategy Enhancement
Spectrum Strategy and

Auction Bidding
Strategy

Coleago Consulting
We offer an innovative suite of training, development and coaching services
Specialist Telecoms Trainers
Our telecoms War
Game is a unique
Our trainers are first and foremost telecoms The Real Telecoms Finance for Non-
industry experts who are able to gain the respect
and exceptional of programme participants. They are also MBA Financial Managers
management outstanding trainers with a passion for their
subjects.
development
platform and our Telecoms Focus
Dragons’ Apprentice Our programmes are developed exclusively for
the telecoms sector and use real life telecoms
offers a new case studies, examples and benchmarks
approach to team throughout.
building Bespoke Solutions War Gaming & The
We develop bespoke solutions for clients often Dragons‘ Apprentice &
utilising information about their specific markets to
illustrate key points. Coaching
Tailored Deliver
We provide pre-course questionnaires and hold
telephone interviews with every participant to
ensure that each and every delivery contains the
right content delivered at the appropriate level. Investment
Innovative Programmes
Appraisal &
We use simulation tools, role plays and
challenging case studies to provide an Technology Excel Modelling
entertaining and rewarding learning experience.
War Gaming
Our War Game process is the most realistic
simulation of a telecoms market currently being
offered and is the closest thing to running a
telecoms business after actually running a
telecoms business!

Coleago Consulting
Coleago has delivered assignments for telecoms, media and technology companies
Our clients include

fixed and mobile
operators, digital
media companies,
equipment vendors,
and regulators

Coleago Consulting
Coleago specialises in winning mobile licences and spectrum for clients
Coleago’s consulting Country Year Network Client Involvement and outcome

team have unrivalled
France 1994/5 Bouygues Cable & Carried out market research, market forecasting and modelling,
experience in mobile Telecom GSM Wireless positioning, services and tariffing, wrote marketing chapter of bid
business planning to 1800 book. Client was awarded licence.
support licence bids
Hong Kong 1995 People's Phone MSI Carried out market research, market forecast modelling, pricing,
and spectrum GSM 1800 positioning, services and tariffing, wrote marketing chapter of bid
auctions going as far book. Client won licence amidst strong competition.
back as 1994
Singapore 1995 MobileOne Cable & Carried out market research, market forecast modelling, pricing,
GSM 1800 Wireless positioning, services and tariffing, wrote marketing chapter of bid
book. Client successfully won licence.
Poland 1995 GSM 900 Telia Market research and forecast modelling, marketing strategy,
regulatory analysis, negotiations with partner. The client withdrew
because the regulatory conditions posed to great a risk. The partner
went ahead with another operator and subsequently encountered
problems. This vindicated Telia's decision to withdraw.
Austria 1995 GSM 1800 Unisource Market research, product & service design, coverage roll-out,
tariffing. Employed or Mobile Marketing Model and wrote marketing
and coverage section of bid text, assisted with presentation to
regulator. After the bid had been handed in Unisource withdrew the
bid due to political problems among the partners in Unisource.
Belgium 1995 GSM 900 Unisource Market research, product & service design, coverage roll-out,
tariffing. Employed or Mobile Marketing Model and wrote marketing
and coverage section of bid text, assisted with presentation to
regulator. After the bid had been handed in Unisource withdrew the
bid due to political problems among the partners in Unisource.
Finland 1996 Telia Finland Telia Sweden Market research and market forecast modelling, development of a
GSM 1800 local mobile proposition that competes with the fixed network.
Provided inputs into the bid document. Telia won the licence.

Coleago Consulting
We have a proven track record in developed and developing markets
Coleago combines Country Year Network Client Involvement and outcome

market research,
Denmark 1996 Telia Denmark Telia Sweden Carried out market research, market forecasting and modelling,
strategic analysis GSM 1800 positioning, services and tariffing, wrote marketing chapter of bid
and planning and book. Client was awarded licence.
business modelling
Italy 1996 GSM 1800 Unisource Market research and market modelling, marketing strategy, pricing,
to prepare high
coverage roll-out, wrote bid documents. Client withdrew because
quality licence bids plan was not financially viable. The company that won the licence
and pre-qualification (Blu) ran into trouble and is now up for sale, thus vindicating the
Unisource decision to withdraw.
documents which
ensure success Taiwan 1996 FareasTone AT&T Market research, market forecasting, marketing planning, wrote
GSM 900 & Wireless marketing section of bid text. Used our Marketing Model. Client was
GSM 1800 awarded two licences, GSM 900 and 1800.
Brazil 1996/7 800 MHz AT&T Application for three regional licences. Market research, market
Wireless forecasting, marketing modelling, working with banks on financing.
Used our Marketing Model. In a sealed bid auction the client
submitted bids, based on our models, which were lower than those of
the winning applicant and therefore did not win the licences. Our
advice turned out to be correct; the licence winners had to write down
much of their investment because their business plans were too
optimistic.
Mexico 1996/7 1900 MHz AT&T Application for the three best regional licences. Market research,
Wireless market forecasting, marketing modelling. AT&T Wireless changed its
strategy and decided not hand in the bid.
Argentina 1997 1900 MHz AT&T Market research, market forecasting, marketing modelling.
Wireless Regulatory and market uncertainty meant that in the end AT&T did
not submit a bid. The operators who won licences are now looking at
significant write downs.

Coleago Consulting
Coleago has developed licence winning bid books and pre-qualification documents
Coleago combines Country Year Network Client Involvement and outcome

market research,
Belgium 1997 KPN Ufone KPN Market research and market forecast modelling , including a
strategic analysis GSM 1800 complete marketing forecast. Client was awarded licence.
and planning and
business modelling Kuwait 1997 GSM 1800 Telia Carried out a detailed market analysis, employed the marketing
Overseas model and produced a pre-bid document. Telia Overseas did not find
to prepare high the right partners and decided not to apply for a licence.
quality licence bids
and pre-qualification Ireland 1997 Eircell 1800 Eircell Eircell, the incumbent 900 MHz operator, had to present a bid for
documents which additional spectrum. Carried out market research, forecasts, market
modelling. Eircell won the additional spectrum.
ensure success
Norway 1998 Telia Norway Telia Sweden Market research and market forecast modelling, development of a
GSM 1800 local mobile proposition that competes with the fixed network.
Provided inputs into the bid document. Telia won the licence.
Czech 1999 GSM BT Responsible for the financial forecast and business planning leading
Republic towards the valuation and contributions to the financial sections of the
bid book.
Netherlands 2000 Telfort (Ufone) Telfort Mobile Toolkit was used to build the business plan for the 3G auction.
3G Business planning prior to auction and hand-on support throughout
the multi-round auction process, continually adjusting the plan
depending on bid amounts. Licence was won at reasonable price.
UK 2000 BT Wireless BT Wireless Built custom marketing model. BT won licence in auction, after
3G overpaying, by ignoring business plan.
Belgium 2000 BT Wireless BT Wireless Using the Mobile Toolkit carried out an analysis of the business case.
3G Developed marketing strategy and coverage roll-out plan. Specified
and analysed market research. The results showed that a bid would
be very risky and client decided not to hand in bid.

Coleago Consulting
Increasingly we are advising on auction and bidding strategy
Spectrum is Country Year Network Client Involvement and outcome

increasingly being
Canada 2001 Rogers KPN Market research and market forecast modelling , including a
awarded through Wireless 3G complete marketing forecast. Client was awarded licence.
auctions and a
Ireland 2002 Ufone Ireland Ufone Ireland Marketing and financial planning, bid management, wrote sections of
critical element of
3G licence bid text, specified and managed market research. Used Coleago
success is robust Mobile Toolkit. Client was awarded licence in beauty contest.
valuations for the
client but also its Sudan 2003 GSM 900/1800 SabaFon Projected managed and provided consultancy support to the
competitors Sudan preparation of the complete bid book which was awarded highest
ranking in the beauty contest.
Algeria 2004 GSM 900/1800 Wataniya Projected managed the bidding process. Provided consultancy
International support for all aspects of the business planning process.
Recommended the bid strategy and our recommendation resulted in
the successful award of the licence.
Iran 2004 GSM 900/1800 MTN South Project managed the bid process and provided consultancy support
Africa on all aspects of business planning.
Maldives 2004 GSM 900/1800 Wataniya Provided the marketing section for bid book which resulted in the
International successful award of the licence.
Oman 2004 GSM MTC Provided market forecasting and the marketing sections of the bid
book and business plan
Saudi Arabia 2004 GSM MTN Provided bidding strategy and advice to MTN for the 2nd GSM
licence in Saudi Arabia
USA 2006 AWS spectrum Cincinnati Bell Business planning support, scenario planning and valuation for the
auction US AWS spectrum auction

Coleago Consulting
Our recent projects are at the forefront of the mobile market
Our most recent Country Year Network Client Involvement and outcome
project is at the
Egypt 2006 GSM Qtel Provided project management, bid book and business case support
forefront of mobile and bidding tactics and strategy for the 3rd GSM licence in Egypt.
technology and looks
Canada 2008 AWS spectrum Rogers Provided full strategy and business planning support, valuation
to the future of the
auction analysis and bid strategy in the 2008 AWS 2100MHz spectrum
mobile business in auction.
20 years time
India 2008 3G Telenor Provide full market forecasting, market entry strategy and technology
assessments in relation to the value of spectrum in India across the
22 telecoms circles.
United 2009 2.6GHz Orange UK Full strategy, market forecasting, technology assessment modelling
Kingdom and valuation of 2.6GHz spectrum in the UK across a broad range of
scenarios and assumptions. Coleago also provided bid strategy and
advice, workshops and simulations for the auction.

Stefan Zehle, MBA Graham Friend, MA
CEO, Coleago Consulting Ltd Managing Director, Coleago Consulting Ltd
Tel: +44 7974 356 258 Tel: +44 7973 315 434
stefan.zehle@coleago.com graham.friend@coleago.com
Contact
Further information: www.coleago.com


Growth in Mobile Broadband Coleago V2.6 13 Aug 09

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Growth in Mobile Broadband Coleago V2.6 13 Aug 09

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Growth in Mobile Broadband

Benchmarks and implications for operators

Stefan Zehle, Coleago Consulting

2 Implications for Mobile Operators

4 About Coleago Consulting Ltd

© copyright coleago 2009 1

2 Implications for Mobile Operators

4 About Coleago Consulting Ltd

© copyright coleago 2009 2

Following many false

Flat fees; pricing

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Gross downlink data

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70% migration, thus freeing up 2G spectrum for refarming.

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3 0.5 38.30 0.0766 15 13.04 0.0009 -99%

Orange 1 38.30 0.0383 10 21.28 0.0021 -94%

Vodafone 1 38.30 0.0383 5 21.74 0.0043 -89%

T-Mobile 2 14.47 0.0072 5 26.09 0.0052 -28%

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Use of Application by iPhone User vs. Other Handsets Android Applications

Email 81% 39%

Internet 86% 47%

Picture messaging 51% 45%

Location based services 79% 25%

Music downloads 55% 23%

Backup and restore 61% 25%

Instant Messaging 60% 34%

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Packet Data Revenue % of Tota

contribution from non-voice services differ a great deal between

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Telstra Australia Q4 08 13.4% 36.7% 81%

Singtel Singapore Q4 08 8.1% 11.5% 44%

Verizon USA Q4 08 12.0% 41.4% 73%

AT&T USA Q4 08 13.3% 51.2% 77%

Orange UK Q4 08 -14.8% -7.9% n/a

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TIM Italy 12.4% 1.6% 28.4% 13.0%

Vodafone UK -9.6% 1.5% 27.9% -4.4%

Vodafone Italy -3.0% 1.7% 21.6% -0.5%

Vodafone -12.0% -15.3% 13.6% -9.5%

Vodafone Spain -12.6% -8.3% 1.6% -11.1%

O2 Germany -15.4% -13.5% 16.1% -12.9%

O2 Czech -2.5% 4.1% 10.6% -0.5%

M1 Singapore -11.3% -4.4% 2.7% -9.2%

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AT&Ts iPhone 3G Users are More Profitable

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0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

Data Dongle % of Net Adds

Handset Net Adds PC Dongles Net Adds PC Dongles Net Adds %

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O2 (GB, IRL, D, CZ) Q4 08

Vodafone (D, GB, F, E) Q4 08

Messaging (SMS) Non-SMS

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MMS / Customer / Month

Consumer Business Blended

MMS / Customer / Month