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GLGi: 4G Cellular - The What, Why and When

GLGi: 4G Cellular - The What, Why and When. Pradeep Samudra Independent Consultant. Council Member Biography

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GLGi: 4G Cellular - The What, Why and When

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  1. GLGi: 4G Cellular - The What, Why and When Pradeep Samudra Independent Consultant

  2. Council Member Biography Pradeep Samudra, now an independent consultant at Tellabs, was most recently (10/06) a Vice President at Samsung Telecommunications. He has over 25 years of experience in the telecommunications industry. He is a holder of 7 recent patents and 6 pending applications in the area of Wireless/IP/MPLS/ATM routing and is knowledgeable about the  business and technologies of 3G/4G/CDMA/GSM/ WiMAX/xDSL/FTTx/VoIP and IPTV technologies. He is also experienced in developing and marketing broadband and wireless network systems and products. Mr. Samudra has spoken at internationally recognized conferences on topics ranging from market and technology forecasts, planning and deployment. He was a member of the Board of Directors for the prestigious industry standards alliance, ATIS. Recently he managed nationwide VoIP deployment and an IPTV trial in the US. He is knowledgeable in the telecom vertical segment, key players, their strategies, prospects for agents of change and in next-gen wireless technologies such as 3G/3G LTE/Super 3G and 4G, broadband access and core networks. © 2007 Gerson Lehrman Group Inc., All Rights Reserved

  3. Table of Contents • A Quick Review of Cellular Technologies • Definition of 4G • Why do we need 4G? • Technologies, standards bodiesand vendors/proponents • The market dynamic: A global perspective • Global Trends • The Time Line for 4G • Enablers and Inhibitors © 2007 Gerson Lehrman Group Inc., All Rights Reserved

  4. About GLG Institute GLG Institute (GLGiSM) is a professional organization focused on educating business and investment professionals through in-person meetings. It is designed to revolutionize the professional education market by putting the power of programming into the hands of the GLG community. GLGi hosts hundreds of Seminars worldwide each year. GLGi clients receive two seats to all Seminars in all Practice Areas. GLGi’s website enables clients to: • Propose Seminar topics, agenda items and locations • View and RSVP to scheduled and proposed Seminars • Receive a daily briefing with new posts on your favorite tickers, subject areas and from trusted Council Members • Share Seminar details with colleagues or friends © 2007 Gerson Lehrman Group Inc., All Rights Reserved

  5. Gerson Lehrman Group Contacts John Aronsohn Vice President, TMT Gerson Lehrman Group 850 Third Avenue, 9th Floor New York, NY 10022 212-984-3673 jaronsohn@glgroup.com Aaron Liberman Managing Director, Sales and Marketing Gerson Lehrman Group 850 Third Avenue, 9th Floor New York, NY 10022 212-984-3684 aliberman@glgroup.com Carly Pisarri Process Manager Gerson Lehrman Group 850 Third Avenue, 9th Floor New York, NY 10022 212-750-1435 cpisarri@glgroup.com © 2007 Gerson Lehrman Group Inc., All Rights Reserved

  6. IMPORTANT GLG INSTITUTE DISCLAIMER – By making contact with this/these Council Members and participating in this event, you specifically acknowledge, understand and agree that you must not seek out material non-public or confidential information from Council Members. You understand and agree that the information and material provided by Council Members is provided for your own insight and educational purposes and may not be redistributed or displayed in any form without the prior written consent of Gerson Lehrman Group. You agree to keep the material provided by Council Members for this event and the business information of Gerson Lehrman Group, including information about Council Members, confidential until such information becomes known to the public generally and except to the extent that disclosure may be required by law, regulation or legal process. You must respect any agreements they may have and understand the Council Members may be constrained by obligations or agreements in their ability to consult on certain topics and answer certain questions. Please note that Council Members do not provide investment advice, nor do they provide professional opinions. Council Members who are lawyers do not provide legal advice and no attorney-client relationship is established from their participation in this project. You acknowledge and agree that Gerson Lehrman Group does not screen and is not responsible for the content of materials produced by Council Members. You understand and agree that you will not hold Council Members or Gerson Lehrman Group liable for the accuracy or completeness of the information provided to you by the Council Members. You acknowledge and agree that Gerson Lehrman Group shall have no liability whatsoever arising from your attendance at the event or the actions or omissions of Council Members including, but not limited to claims by third parties relating to the actions or omissions of Council Members, and you agree to release Gerson Lehrman Group from any and all claims for lost profits and liabilities that result from your participation in this event or the information provided by Council Members, regardless of whether or not such liability arises is based in tort, contract, strict liability or otherwise. You acknowledge and agree that Gerson Lehrman Group shall not be liable for any incidental, consequential, punitive or special damages, or any other indirect damages, even if advised of the possibility of such damages arising from your attendance at the event or use of the information provided at this event. © 2007 Gerson Lehrman Group Inc., All Rights Reserved

  7. 1. What is 4G? Cellular Technologies 2G-4G LTE/SAE – Long Term Evolution (3GPP)/System Architecture Evolution MIMO – Multiple Input/Multiple Output OFDMA – Orthogonal Frequency Division Multiple Access TEF – Technology Evolution Framework (3GPP2/CDG) UMB – Ultra Mobile Broadband 3G = 1st Gen of Mobile Broadband4G = Wireline Substitutable and Mobile Pradeep Samudra December 2007 Page 7 of 27

  8. 1. What is 4G? Wireless Technology Evolution to 3.9G CDMA GSM/UMTS IEEE Cellular IEEE LAN CDMA (IS-95A) GSM TDMA IS-136 IEEE 802.16 IEEE 802.11 2G CDMA (IS-95B) GPRS 802.11g 2.5G cdma 2000 E-GPRS EDGE WCDMA FDD/TDD TD-SCDMA LCR-TDD 802.11a 3G 1xEV-DO Rev 0/A/B HSDPA FDD/TDD HSUPA FDD/TDD Fixed WiMAX 802.16d WiBRO 802.11g 3.5G UMB 802.20 HSPA+ Mobile WiMAX 802.16e 802.11n LTE E-UTRA 3.9G Pradeep Samudra December 2007 Page 8 of 27

  9. 1. What is 4G? ITU’s Vision for the Next Gen Access Pradeep Samudra December 2007 Page 9 of 27

  10. 1. What is 4G? The Next Gen Vision “Commercial services in multi-user environments targeting peak data rates approaching 100 Mbps for “highly mobile” users and up to 1 Gbps for nomadic(low mobility or stationery) users” Distinctions between Portability, Nomadicity and Mobility are eliminated. Connectivity is ABC – Always Best Connected. Pradeep Samudra December 2007 Page 10 of 27

  11. 1. What is 4G? Goal: A Unified Architecture Pradeep Samudra December 2007 Page 11 of 27

  12. 1. What is 4G? Integration Challenge: The Next Gen Universe Pradeep Samudra December 2007 Page 12 of 27

  13. 1. What is 4G? The Service Continuity Challenge Pradeep Samudra December 2007 Page 13 of 27

  14. 1. What is 4G? 3G: Some Unfinished Business Technical • Improved coverage (e.g., residences) • Inter technology roaming • Inter carrier compensation(esp. data services) Financial • Balance sheet cleanup (debt reduction) • Capacity Utilization • Business Models for New Services The goal of Universal, Ubiquitous, and Interoperable Service at affordable price has not yet been achieved. Pradeep Samudra December 2007 Page 14 of 27

  15. 1. What is 4G? So What is 4G? • Another incremental increase over 3.9G? • 5  7  14  40 Mbps of HSPA • Just another “fat pipe”? • Limited to OFDMA? • WiMAX+, UMB and LTE are variations (all use OFDMA DL). • Non-compatible Heterogeneous Networks? • Non-roaming, closed networks • Non-IMS based? • P2P, Web 2.0 domination With a definition not based on IMT-A, 4G can have a difficult time meeting cost and connectivity goals Pradeep Samudra December 2007 Page 15 of 27

  16. 1. What is 4G? A Look at Fundamental Requirements Pradeep Samudra December 2007 Page 16 of 27

  17. 2. Why 4G? Trends in New Applications Pradeep Samudra December 2007 Page 17 of 27

  18. 2. Why 4G? Key Business Trends • Global Telecom Spending Patterns Realigning • Early growth in international capex, US capex lag • Rise in Mobile Data Revenues Internationally • ARPUs up by 25% CAGR, US [< 5% CAGR] • 50% Rise in Mobile Voice Subscribers [+1.4B] • International +100%, US +15% • Emerging markets to remain unsaturated through 2012 • Mobile broadband subscribers up 275% [+750M] • New Mobile Services Taking Hold – SK/Japan/Nordics • Provide impetus to mobile data services • Operators Consolidating Domestically While Expanding Overseas • E.g., AT&T Mobility  India, Telefonica (+TIM)  CALA Pradeep Samudra December 2007 Page 18 of 27

  19. 2. Why 4G? Examples of Mobile Data Services Mobile TV Technology Options Unicast 3G - MachBlue by Orange (UK) Bcast OFDM - Vcast by Verizon (US) Bcast DVB-H - KT, SKT (SK) Pradeep Samudra December 2007 Page 19 of 27

  20. 2. Why 4G? Projected Capacity Needs - Developed Market (EU) Pradeep Samudra December 2007 Page 20 of 27

  21. Source: The FTTH Council 2. Why 4G? A Perspective: Wireline Demand Pradeep Samudra December 2007 Page 21 of 27

  22. 3. The Global Dynamic The Three Horses of 3G Pradeep Samudra December 2007 Page 22 of 27

  23. 3. The Global Dynamic The Four Horses of 4G APAC – Asia Pacific [SKT, NTT, Vodafone] CALA – Central and Latin America [Telefonica] EMEA – Europe, Middle East, Africa [Vodafone, DT, Telefonica] NA – North America [Sprint, Verizon and AT&T] €€€ - Strong, €€ - Medium, € - Weak Pradeep Samudra December 2007 Page 23 of 27

  24. 2 0 1 2 2 0 0 6 Markets Saturated by/before 2012 Room to Grow Beyond 2012 , July 2007 3. The Global Dynamic Global Mobile Penetration Rates 81% of the 1.4B new additions will be pre-paid with ARPUs of $6 (vs post-paid ARPU of $37), using GSM (2G) for voice, in effect, delaying bandwidth and service deployments to these markets. Pradeep Samudra December 2007 Page 24 of 27

  25. 3. The Global Dynamic Major Mobile Operators - Europe Pradeep Samudra December 2007 Page 25 of 27

  26. Data Service Revenues: A Case Study (Sprint) Sprint’s WiMAX Strategy (“XOHM”) of “Open Access” creates new openings in their walled garden. As an open access operator, challenges related to security, privacy and billing are compounded due to complexity of multiple “virtual providers”. Billing options to include flat (advanced payment) or transaction based. By 2012, sales of unsubsidized devices (non-laptop) are expected to contribute significantly to the top line. These include handsets, cameras, printers, Internet tablets, PDAs, gaming and video devices. , Oct 2007 Google is close to a deal with VerizonWireless and SprintNextel over its new mobile phone. An agreement is likely to reached within two weeks for launch of a Google phone in the middle of 2008.  The central feature of the Google handset will be an openoperatingsystem that will encourage developers to create apps beyond search, interactive communications and social networking.  (Wall Street Journal Oct 31, 2007) Elephant in the Room: How to compensate for ICI? (i.e., Network Roaming Agreements*) Mechanisms (e.g., IPSphere) not likely to be in place till ’09-10 * Sprint exited agreement with Clearwire partly due to lack of a viable ICI (Reuters, 11/9/07). Key Requisite: “Open Access” Pradeep Samudra December 2007 Page 26 of 27

  27. 4. The 4G Timeline Accelerators of the 4G Timeline • Business Need and Opportunity • Technology Pull • Rate of Innovation • Disruptive Technologies • Standardization • New Revenue Opportunities • Developments in the Wireline World 700 MHz may prove to be the most significant accelerator of 4G Pradeep Samudra December 2007 Page 27 of 27

  28. 4. The 4G Timeline What Can Give 4G a Pause? • 3G Reaching Maturity and Profitability • Development and Deployment of IMS and Multi-service Interoperable Networking • Validation of Radio Technologies • Cost and Availability of Spectrum • Migration Cost • Migrating CDMA2000 to 1xEVDOrA (Verizon Wireless) $6B over 3 years for a nationwide footprint • Viable Business Model for Service Offering • Backhaul Capacity • Issues Related to Content Ownership • Concurrent Development of the Ecosystem Pradeep Samudra December 2007 Page 28 of 27

  29. Beneficiaries of 3G/4G Timeline • Mobile Operators (basic service revenue) • Top 4 - VZW AT&T T-Mobile SprintNextel • Operators providing service to other verticals • e.g., healthcare, automotive, retail, etc. • Vendors providing product related service to operators • ERIC, ALU, CSCO, TLAB, CIEN, ADC, JNPR, NSN • Vendors providing professional services to operators • Application SW providers – mostly startups • Webcos: GOOG, YHOO, MSFT, Adobe • Security appliance makers – mostly small pre-/post-IPO. • Quality/measurement tools maker and user companies • Agilant, Anritsu, small private co’s Pradeep Samudra December 2007 Page 29 of 27

  30. Summary • 4G Definition Informal • 4G at Hype Stage • 2012-15 Likely Deployment • Near-term Investment Opportunities • 3G Application Developers • Spectrum Lessees • Selected Equipment Vendors • Global Operators Pradeep Samudra December 2007 Page 30 of 27

  31. Backup Slides Pradeep Samudra December 2007 Page 31 of 27

  32. Competitive Access Technologies Bold font = strength of the technology * Typical of the several possible Pradeep Samudra December 2007 Page 32 of 27

  33. WCDMA (3GPP) Performance Roadmap • 3G LTE • MBMS • Enh UL Ph2 • Enh UL • HSDPA Ph2 • (GRAKE) • HSDPA • R99 2004 2005 2006 2007-8 2009 WCDMA OFDM (Targets) Latency (ms) Capacity DL (Mbps/5 MHz) Peak DL(Mbps/5 MHz) Capacity UL (Mbps/5 MHz) Peak UL (Mbps/5 MHz) • 10-15 10 • 4-5* 8-10 • 14* 25 • ~2 4-5 • 4-6 12.5 • 100 • 2.5 • 4.3 • 1 • 0.384 • 75 • 2.5 (4-5) • 14 • 1-2 • ~2 • 30-50 • 4-5 • 14 • ~2 • 4-6 • 150 • 1 • 0.384 • 1 • 0.064 OFDM on 20 MHz gives 100 / 50 Mbps in DL / UL resp. 2x2 ant.enna assumed for the DL * With 2x2 MIMO in DL these numbers will be higher Pradeep Samudra December 2007 Page 33 of 27

  34. Cdma2000 Roadmap (Source: CDG) Pradeep Samudra December 2007 Page 34 of 27

  35. About GLG Institute GLG Institute (GLGiSM) is a professional organization focused on educating business and investment professionals through in-person meetings. It is designed to revolutionize the professional education market by putting the power of programming into the hands of the GLG community. GLGi hosts hundreds of Seminars worldwide each year. GLGi clients receive two seats to all Seminars in all Practice Areas. GLGi’s website enables clients to: • Propose Seminar topics, agenda items and locations • View and RSVP to scheduled and proposed Seminars • Receive a daily briefing with new posts on your favorite tickers, subject areas and from trusted Council Members • Share Seminar details with colleagues or friends © 2007 Gerson Lehrman Group Inc., All Rights Reserved

  36. Gerson Lehrman Group Contacts Nick Goodman Vice President Gerson Lehrman Group 850 Third Avenue, 9th Floor New York, NY 10022 212-750-1878 ngoodman@glgroup.com Christine Ruane Senior Product Manager Gerson Lehrman Group 850 Third Avenue, 9th Floor New York, NY 10022 212-984-8505 cruane@glgroup.com © 2007 Gerson Lehrman Group Inc., All Rights Reserved

  37. IMPORTANT GLG INSTITUTE DISCLAIMER – By making contact with this/these Council Members and participating in this event, you specifically acknowledge, understand and agree that you must not seek out material non-public or confidential information from Council Members. You understand and agree that the information and material provided by Council Members is provided for your own insight and educational purposes and may not be redistributed or displayed in any form without the prior written consent of Gerson Lehrman Group. You agree to keep the material provided by Council Members for this event and the business information of Gerson Lehrman Group, including information about Council Members, confidential until such information becomes known to the public generally and except to the extent that disclosure may be required by law, regulation or legal process. You must respect any agreements they may have and understand the Council Members may be constrained by obligations or agreements in their ability to consult on certain topics and answer certain questions. Please note that Council Members do not provide investment advice, nor do they provide professional opinions. Council Members who are lawyers do not provide legal advice and no attorney-client relationship is established from their participation in this project. You acknowledge and agree that Gerson Lehrman Group does not screen and is not responsible for the content of materials produced by Council Members. You understand and agree that you will not hold Council Members or Gerson Lehrman Group liable for the accuracy or completeness of the information provided to you by the Council Members. You acknowledge and agree that Gerson Lehrman Group shall have no liability whatsoever arising from your attendance at the event or the actions or omissions of Council Members including, but not limited to claims by third parties relating to the actions or omissions of Council Members, and you agree to release Gerson Lehrman Group from any and all claims for lost profits and liabilities that result from your participation in this event or the information provided by Council Members, regardless of whether or not such liability arises is based in tort, contract, strict liability or otherwise. You acknowledge and agree that Gerson Lehrman Group shall not be liable for any incidental, consequential, punitive or special damages, or any other indirect damages, even if advised of the possibility of such damages arising from your attendance at the event or use of the information provided at this event. © 2007 Gerson Lehrman Group Inc., All Rights Reserved

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