Positioning for Success in 4G/LTE

Mobile Broadband Strategies: Helping Companies Profit from Data Consumption trends Business models Brand preferences Revenue flows Buying behavior Demand forecasts Customers Economics Segmentation models Profitability analysis 3G/4G network strategies Service innovation Complementary access technologies Technology Go to Market Pricing strategies Telecoms software Positioning & branding Enabling technologies Channel evolution Page 3 Copyright 2012

4G Is Born Into a Data Centric World SMS got the ball rolling Smartphones and mobile Web fueled data growth Tablets and connected CE devices will take mobile data to new levels Operator competition and differentiation is now a data game Page 5 Source: Yankee Group s Global Mobile Forecast, March 2012 Copyright 2012

Multiple Connected Devices Is the New Norm Creates new challenges in pricing and customer management What devices have you used to access the Internet (or Internet content) in the last month? Feature phone Smartphone France (n=409) Germany (n=479) Italy (n=613) Spain (n=540) U.K. (n=431) France (n=220) Germany (n=288) Italy (n=355) Spain (n=325) U.K. (n=381) 30% 29% 31% 31% 36% 63% 52% 56% 55% 77% U.S. 45% average (across feature phone and smartphone users) Laptop France (n=470) Germany (n=508) Italy (n=546) Spain (n=604) U.K. (n=529) 82% 69% 73% 75% 88% U.S. 88% Tablet France (n=70) Germany (n=133) Italy (n=153) Spain (n=147) U.K. (n=67) 49% 44% 43% 43% 63% U.S. 61% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Page 6 Source: Yankee Group s 2011 European and U.S. Consumer Surveys Copyright 2012 Base: Asked to those who indicate they have Internet service at home and own each device

Quality of Experience Is the Basis for Differentiation Customer experience is multifaceted: Company and brand Products and services Channel Delivery and operations MNOs must ensure consistent, transparent customer interactions and communications Same principles apply to 4G positioning Page 7 Source: Yankee Group s 2011 European Consumer Survey Copyright 2012

Effective Pricing Is Essential for Business Model Sustainability Mobile broadband pricing must be: Sustainable Pricing Is Key to Solving the Data Profit Puzzle Competitive: to reflect today s economic circumstances Transparent: to foster end user confidence in data Sustainable: to achieve viable long term data business models Page 8 Copyright 2012

Operators Must Be True to Their Brands 4G changes a lot but not everything Brand values must be clear and consistent MNOs should leverage 4G to reinforce market position, not change it But 4G also gives MNOs an opportunity to re assess market strategy and target customers Page 9 Source: Yankee Group Research Report, 2010 Copyright 2012

3G Positioning Was Simple Compared to 4G A battle between incumbents and (in some cases) one new entrant New player had to be disruptive But most customers were not ready for 3G data services New entrants strategies had to evolve Page 10 Source: Yankee Group Research Report, 2005 Copyright 2012

Mobile Operators Face Critical LTE Decisions Business Case New services and revenues, or Solution to 3G network overload Products Converged land line/mobile offers, or Aggressive push for land line substitution Timing Technology and market leader, or Pragmatic follower strategy What are some credible positioning options? Page 11 Copyright 2012

No. 1 for Tablets? Target 4G specifically at tablet owners Begin by understanding tablet owners profile, behavior and needs They are younger and have higher incomes than non owners Consumers who intend to buy tablets are already using plenty of data Page 12 Source: Yankee Group s 2012 U.S. Consumer Survey Copyright 2012

No. 1 for Cord Cutters? Percentage of Household Take Up 4G mobile broadband can drive a new wave of land line substitution The opportunity is most obvious among least affluent socioeconomic groups 4G pricing must be appropriate to those customers needs Page 13 Source: Ofcom Communications Market report, August 2011 Copyright 2012 Survey base: Consumers aged 15 and older (n = 9,013)

No. 1 for Families? Lessons from the U.S.? Shared data plans for users with multiple connected devices Appropriate for families or other groups that can share allowances Enables operators to capture more devices and incremental usage Some savings for customers but not drastic Requires a lot of plan math regular vs. shared vs. prepaid Page 14 Copyright 2012

No. 1 for Roaming? Bill shock restricts data roaming. Syniverse Technologies estimates that up to 70 percent of international roamers do not use mobile data. Operators are innovating at last. Common theme is greater price certainty, e.g., flat rate daily or weekly roaming passes. Roaming can be a differentiator. Requires packages that target silent roamers and address the needs of specific user segments Operators can add 3G based roaming packages to core domestic 4G services Page 16 Data source: Estimate based on Yankee Group s Global Mobile Forecast, June 2012 Copyright 2012

Some Takeaways 4G is born into in a datacentric, multi device world where customer experience is king. 4G strategies must be consistent with operators overall market positioning and brand values. Choose your 4G customer targets carefully, get creative with service packaging and go for it! Page 17 Copyright 2012