Migration to LTE /SAE for a world connectedWojciech PolakLTE Business Development Dallas, January 2009

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Migration to LTE /SAE for a world connected

- Demand ?

- Opportunity ?

- Feasibility ?

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Broadband everywhere

Applications predominantly in internet

Multitude of business

models

5 billion people connected

Our market vision 2015 – the World connected A big opportunity for everyone

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But there are big challenges for our customers

BusinessBusiness

Increasing traffic

Stagnating revenues

Cost pressure

Network complexity

Service provisioning

increasing transport bottleneck

Spectrum cost

5 billion people connected

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Continuous traffic and Subscriber growth

Continuous subscriber growth (2007-2013)

transparent rates for service bundles Advanced terminals HSPA radio networks Internet applications

350% growth in HSPA data volumein 6 months

Video viewing & exchange, Web 2.0 applications

1

2

3

“It was reported in 2007 that YouTube consumed as much capacity as the entire internet in 2000”Internet Innovation Alliance, Daily TelegraphMay 2008

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Stagnating voice revenues

0

5

10

15

20

25

30

35

40

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

EUR

per

mon

th

Voice ARPU Data ARPU

Source: NSN SBD Business Intelligence Status: 01 / 2008

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Milli

on E

UR

per

yea

r

Voice Revenues Data Revenues

Source: NSN SBD Business Intelligence Status: 01 / 2008

2006 2007 2008 2009 2010

Revenue per MB

10% AnnualDecrease

Western EuropeMiddle East & AfricaUS & CanadaChina

*Source: National Regulators ITU. Nokia Siemens Networks April 2007. Ovum 2006 (VoIP). Strategy Analytics (data traffic)

• Data ARPU compensates for falling voice ARPU• (Fair usage) flat rate data tariffs and service

bundles cause volumes to go up• Together with price competition, revenue per

data MB falls

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The revenue development does not follow the traffic increase and the associated cost

Source: Light Reading (adapted)

Price per MByte requires low cost/bit technologies to remain profitable

Voice dominated Data dominated

Traffic volume

Revenue

Time

Network cost (LTE / SAE)

Network cost (existing technologies)

Profitability

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Migration to LTE /SAE for a world connected

- Demand

- Opportunity ?

- Feasibility ?

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Re-use of• Sites and

infrastructure• Backhauling• Frequency bands• HW via SW Load

LTE key benefits for operators and end- user

User experience ARPU

Scalable bandwidthLow cost per Mb

Investment Protection

3G 3.5G LTE

Cost per Mb Optimized spectrum usage, example

2006 2008 2010 2012 2014 2016 2018 2020

850 MHz

850 MHz GSM

or

GSM HSPA

LTE

HSPA LTE HSPA LTE

Throughput Latency

Low Costs

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LTE maximizes flexibility of band refarming

• High spectral efficiency also for smaller bandwidth arrangement• Cost efficient deployment by usage of lower frequency bands• Flexible frequency band refarming scenarios

Urban

2006 2008 2010 2012 2014 2016 2018 2020

Rural2006 2008 2010 2012 2014 2016 2018 2020

or

2.6 GHz

2.1 GHz

2.6 GHz

2.1 GHz

LTEUMTS

UMTSLTE

900 MHz

900 MHz GSM

or

GSM UMTS

LTE

LTE

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Evolution to LTE - a healthy eco system Operator migration paths to LTE

Enabling flat broadband architecture

TD-SCDMAGSM / (E)GPRS

LTE

CDMA

I-HSPA

WCDMA / HSPA

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3GPP Rel 7 Compliant Flat Architecture: I-HSPA Flat Architecture improves latency

GGSN

RNC

HSPA R6

= user plane

SGSN

SAE GW

LTE R8

GGSNInternet HSPA

BTS BTS with RNC

funct.eNB

GGSN

HSPA R7

BTS

RNC

Direct tunnel

Direct tunnel

CDMA2000

entry

point

CDMA2000

entry

point

CDMA2000

entry

point

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Old Dreams become reality: Smooth migration via SW load

SW defined Radio (SDR) already since around 20 years in discussion comes now to picture

• Platforms more and more powerful• Higher layer protocols inherited from previous 3GPP technologies leading to further synergies• Change of technology in BTS, provided same frequency band• Concurrent use of one BTS platform for more technologies e.g. WCDMA, LTE

Flexibility in Core• Concurrent use of Evolved Packet Core (EPC) components for more technologies e.g.

WCDMA, LTE

Results in• Even more flexibility• Faster rollout• Less sites visits• Lower operational costs

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Migration to LTE /SAE for a world connected

- Demand

- Opportunity

- Feasibility ?

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LSTI confirmed performance values in PoC test phase

LSTI initiatives goals/objectives

• drive industrialization of 3GPP LTE/SAE technology

• demonstrate feasibility and capabilities of 3GPP LTE-SAE technology under real world conditions. Indoor & outdoor tests

• accelerate development of 3GPP specification and stimulate LTE/SAE ecosystem

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Nokia Siemens Networks multi-user LTE field trial in Berlin

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Taking the lead in network migration towards LTE

LTE/SAE trial

Commercial launch

Operator service migration to LTE/SAE

LTE proof of concept & network preparation

• LTE lab and field tests• Flexi Multimode BTS (shipping) • IP / Ethernet transport, direct tunnel

• End-to-end LTE / SAE support• Tight co-operation with Nokia devices

• LTE capable devices• LTE roll-out for coverage and capacity

2008

2009

2010

2011-• Volume LTE roll-out with full coverage• Gradual migration of cellular voice services

to LTE

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Conclusions - Our view on mobile broadband for the next decade

Opportunity … simple and flat architecture .. less fragmentation and larger scale . spectral efficiency and spectrum re-farming

Feasibility … industry momentum .. e2e solution for time to market . Nokia Siemens Network – pioneer & leader

Demand … 5 B people connected by 2015 .. applications & content in the internet . experience & costs control

Thank you

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www.nokiasiemensnetworks.comNokia Siemens Networks GmbH & Co. KGSt.-Martin-Str. 7681541 MunichGermany

Wojciech PolakLTE Business Development ManagerWojciech.polak@nsn.comMobile +49 171 9797536Phone +49 89 636 79611Fax +49 89 636 75100