MB T. About Nokia MBiT Index. Index

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1 India Mobile Broadband Index 2018

2 About Nokia MBiT Index MB T Index Nokia MBiT Index is a report on mobile broadband performance in India. It aims to provide valuable insight, data and analysis on mobile broadband and traffic growth in India, by co-relating these trends with various demand and supply-side drivers of the connectivity ecosystem such as handsets and devices, content, subscriber usage patterns and network investments by mobile operators. This edition of the MBiT Index evaluates 2G,, and overall data traffic growth trends at a pan-india and circle category level, and data consumption per user on 2G, and for It highlights the current device ecosystem for, and VoLTE devices in India as well as users data usage patterns in terms of type of content being consumed. Key developments on the content and OTT side of the market are covered, along with learnings from international operators on the path forward for LTE. Finally, key use cases and future roadmap for 5G are also highlighted. MBiT Index has been created based on Nokia s analysis of data obtained from various sources. It analyses mobile broadband traffic trends only at a consolidated level and does not intend to provide a comparative analysis of data growth for different operators. 2 India Mobile Broadband Index 2018

3 data traffic grew exponentially in 2017 driven by holistic growth across the country Substantial additions to LTE device base, cheaper data tariff and availability of locally relevant content led to increase in traffic to 2.3x y-o-y was the key driver behind increasing users appetite towards data consumption, which also drove growth in data traffic, while 2G data traffic decreased in 2017 On a Pan-India level, constituted 82% of data traffic; Category A and B circles witnessed the highest increase in payload Strong growth in data usage per user contributed to exponential growth in payload in 2017; users on average are estimated to consume ~11GB per month in 2017 Driven by availability of affordable devices, and device base grew 1.1x and 1.7x respectively; VoLTE handsets achieved scale with an estimated base of 162 million Video contributed to 65-75% share of mobile data traffic; within video, OTT usage is driven by cheaper data plans, and launch of locally relevant as well as original content Indian operators could use LTE-A/LTE-Pro to increase their market share and ARPU, and reduce churn, as achieved by operators globally 5G use cases including embb, mmtc and urllc can find prominence in development of smart cities, and provide access to low-latency public services in India India Mobile Broadband Index

4 India Mobile Data Trends Pan-India mobile data usage in Petabytes PB per month, December¹ 2,400 1, Payload 2G Payload Payload Total payload 7.5x x Y-o-Y Growth* 2, % 1, % % Dec Dec Dec Dec Dec-17-20% Source: Nokia 1 PB = MB The Indian telecom market witnessed a paradigm shift in data consumption, with traffic capturing 82% share of total data traffic in December 2017 and continued to drive growth in total data traffic carried over mobile networks in India, contributing to 99% of total traffic in December 2017 Overall traffic grew 144% in 2017, driven by surge in and data consumption. Access to high-speed internet increased appetite for overall data consumption in the country Increase in device penetration, aggressive network rollout, lower data prices, and development of video and locally relevant content ecosystem have all contributed to the rise in traffic Falling data prices, bundled data plans, better coverage footprint, offload of on to, and better device availability have contributed to growth in payload Data subscribers by technology in December Incumbents have increased their site base by 115% in G Source: TRAI, Operators reports, Analysys Mason Gap between and coverage has significantly reduced in Jio s traffic in 2016 was shown separately in the previous version of MBiT, since their services were not monetised in 2016; 2 Refers to active data subscribers * Represents Y-o-Y growth for Dec-16 to Dec-17 4 India Mobile Broadband Index 2018

5 Mobile Circle-wise Snapshot Metro payload (contributed to 13% of overall payload) Category A payload (contributed to 37% of overall payload) 2G 300 Y-o-Y Growth* 144% 137% 2G 868 Y-o-Y Growth* 150% 142% Dec Dec Dec % -25% Dec Dec Dec % -21% Source: Nokia Source: Nokia traffic grew rapidly by 137%, and constituted 82% of the Metro payload traffic grew by 240% in 2017, while contributing to 17% of Metro payload 2G traffic declined in 2017 by 25% Category B payload (contributed to 37% of overall payload) traffic grew by 142% in Category A circles, and it constituted 80% of Category A payload traffic grew by 256%, while contributing to 18% of total traffic in Category A circles 2G traffic declined in 2017 by 21% Category C payload (contributed to 14% of overall payload) 2G 869 Y-o-Y Growth* 150% 139% 2G 323 Y-o-Y Growth* 118% 108% Dec Dec Dec % -19% Dec Dec Dec % -17% Source: Nokia Category B circles witnessed significant growth in traffic, growing by 139%, and contributing to 82% of category traffic in 2017 traffic also displayed strong growth of 326% in 2017, while constituting 17% of category traffic 2G payload decreased by 19% in 2017 Source: Nokia Category C displayed an increase in traffic by 108%; while constituted 85% share of category traffic traffic in category C circles grew by 367% in G traffic declined by 17% in 2017 data traffic witnessed a significant growth across all circle categories, with Category A and Category B circles witnessing the highest absolute increase in payload * Represents Y-o-Y growth for Dec-16 to Dec-17 India Mobile Broadband Index

6 Monthly Average Data Usage Per User Exponential increase in data traffic is accompanied by a significant increase in data consumption, with usage reaching ~11GB/user/month Average data usage/month (MB) 2G - multiple 2017: 3.6x 11,048 2,970 10,604 data consumption at ~11GB per user sustained the usage levels seen in 2016 (when data was not fully monetised) Increased appetite for data consumption in 2017 resulted in an increase in data usage The growth in usage is driven by affordable data packs, better network coverage, device capabilities and availability of relevant content Source: Nokia, Analysys Mason Data usage on mobile device per sub - on both mobile (+) and fixed/wi-fi networks3 MB / month 12,000 10,000 8,000 6,000 4,000 2,000 0 UK 11,095 South Korea 10,029 France 9,599 India ,859 Japan 8,275 Italy 7,050 Spain 6,315 Singapore 5,750 India ,434 Malaysia 5,001 Thailand 3,351 Indonesia 2,507 Data usage on mobile devices in India has reached the levels of some of the developed markets in 2017 Mobile device usage on Wi-Fi network Mobile device usage on mobile network Source: Analysys Mason Given limited fixed broadband household penetration of 7% in India, mobile broadband, particularly, is driving uptake of high-speed internet, unlike other markets with higher penetration of fixed broadband There remains headroom for further growth in data payload in India, driven by higher adoption of mobile broadband in the country figures for global benchmarks 6 India Mobile Broadband Index 2018

7 2017 Device Ecosystem Installed base of and capable devices base grew by 1.1x and 1.7x respectively in 2017 due to the availability of affordable handsets Handset prices and availability There has been a sharp decline in handset prices over last year with average selling price of an entry-level LTE device falling from ~INR 3000 in 2016 to ~INR 1500 by July Availability of LTE handsets increased significantly in 2017, driven by introduction of affordable LTE handsets In addition, the increasing popularity of VoLTE capable smartphones (117.3 million shipments in 20175) is another noticeable trend in 2017 / capable device base in India Over 90% of smartphones shipped in 2017 support, highlighting a waning demand for 6 Increase in capable device base is accelerated by the replacement of handsets with newer handsets 162 million VoLTE capable devices (74% of LTE capable device base in 2017) / capable device penetration by circle category (% of active subscriber base) 1.2x x Source: Nokia, Analysys Mason x 1.7x capable device penetration reached 22% at a pan-india level in 2017 from 12% in This trend of increase in capable device penetration is seen across all circle categories Metro circles (31%) have the highest penetration of capable devices LTE band ecosystem (% LTE-capable devices) 59% 31% Metro 45% 43% 39% 35% 23% 19% 22% 17% Category A Category B Category C Pan-India Source: Nokia, Analysys Mason LTE capable devices are estimated to support 3-5 bands on an average In India, LTE is predominantly deployed on spectrum bands of 800, 1800, and 2300MHz, which is also reflected in terms of LTE device penetration by spectrum band LTE700 LTE800 LTE900 LTE1800 LTE2100 TDD2300 TDD2500 LTE % 23% 50% 60% 71% 87% 93% 98% Source: Nokia, Analysys Mason 4 Price for entry-level device supporting LTE irrespective of being smartphone or featurephone 5, 6 Cybermedia Research India Mobile Broadband Index

8 Data Consumption Patterns Contributors of mobile data consumption Mobile data traffic by content category 8-10% 4-8% 15-18% Source: OTT and VoD player interviews, Analysys Mason Key trends in video data consumption Availability of Hindi and regional language content, as well as proliferation of original OTT-only series (such as Inside Edge, On Air with AIB, and Sarabhai v/s Sarabhai Take 2) have led to a higher demand for OTT video services In 2017, Hindi and regional languages comprise >90% of popular videos watched on YouTube India Proliferation of OTT video content has also resulted in an increase in popularity of long-format videos (>3-5 min long) Time format of most popular videos on YouTube India 10% 90% 65-75% % Source: Vidstatx, Analysys Mason Video streaming Browsing Social Media Others 75% Short-format Long-format Video streaming remains a key driver of data traffic driven by rapid adoption, and contributing to 65-75% of mobile data traffic This is driven by improvement in network quality (lower buffering), better devices (larger screen size), cheaper data plans, and availability and adoption of new content (OTT video) Active users of YouTube and OTT platforms % traffic on mobile networks Monthly active users (mn) YouTube Conventional streaming 225 Operators OTT apps Hotstar Voot Amazon Netflix Sony LIV TVF Play ALT Balaji Source: OTT and VoD player interviews, Analysys Mason A majority of OTT video content is consumed on mobile networks, driven by higher adoption of mobile broadband (user growth by 60% in 2017), with fixed broadband subscriber base remaining relatively stable at 18 million in OTT platforms gaining popularity Includes apps such as Airtel TV, Vodafone Play Live TV, Idea Movies &TV, JioTV and JioCinema Subscription-only Hybrid Free 0% 100% Key trends in Social media and communication On average, an Indian user spends 200 minutes per day on mobile apps with 38% of the time spent on social media and communication Facebook (241 million active users as on July 2017), and Whatsapp (>200 million active users in 2017) are the most popular social and IM applications respectively Video contributes to 65-75% of mobile data traffic, driven by the emergence of OTT players, and their focus on producing relevant local content 8 India Mobile Broadband Index 2018

9 Path Forward for LTE Global developments in LTE Globally, operators are reaping benefit of increased throughput by adopting LTE-A / LTE-A Pro technologies: carrier aggregation (CA), advanced MIMO7 and higher order modulation (like 256-QAM8) Technology Features Benefits CA Aggregate up to 5 component carriers Aggregated bandwidth of up to 100MHz 4x4 MIMO Transmit multiple data streams via multiple antennae Improved user throughput 256-QAM Transmit higher data per waveform Higher network capacity9 Impact of LTE-A on churn (%) Impact of LTE-A on CMS10 (%) Impact of LTE-A on data ARPU (USD) Dec 2012 Mar 2013 Launch of 2 band CA Jun 2013 Sep 2013 Dec Jun 2013 Launch of 2 band CA Dec 2013 Jun 2014 Singtel StarHub Dec 2014 M Mar 2014 Sep 2014 Mar 2015 Launch of 2 band CA Sep 2015 Source: Company Reports, Analysys Mason SK Telecom witnessed a reduction in its customer churn from 2.4% to 2.1% by increasing its throughput Singtel doubled its throughput to 300Mbit/s, and witnessed a market share increased by 3.4% T-Mobile Germany doubled its throughput to 300Mbit/s, and witnessed its Data ARPU increase from USD7.8 to USD8.1 Path forward for LTE in India While many Indian operators have already adopted 2-band CA, 3-band CA can also be deployed, particularly after the recent consolidation in the industry Leveraging 3-band CA with aggregated downlink bandwidth of 32.5MHz across 850MHz, 1800MHz and 2300MHz LTE bands in circles like Mumbai and Delhi can result in estimated peak speed of up to 160Mbit/s Taking cue from developed markets, Indian operators have also started commercial trails and deployment of 4X4 MIMO in major cities in second half of 2017 Evolution of networks towards 5G With booming data consumption, there is a need to decentralize networks towards the source of data generation, and therefore decrease latency of applications Indian operators need to virtualise their legacy networks by deploying Cloud-RAN technology to support the growing demand for low latency data, and to scale up their current networks to support 5G LTE-A / LTE-Pro and Cloud RAN could help Indian operators enhance customer experience, and witness reduced churn, increased market share and higher ARPU 7 Multiple Input, Multiple Output 8 Quadrature Amplitude Modulation 9 Devices supporting 256-QAM are very low currently 10 Refers to Customer Market Share in India Mobile Broadband Index

10 5G Use Cases and Spectrum Roadmap 5G can support the development of smart cities, and improve access to low-latency public services such as healthcare and education in India Snapshot of 5G use cases in a Metropolitan city Smart homes & buildings Smart cities Massive machine-type Communications (mmtc) Gigabytes in a second Voice Enhanced MBB (embb) 3D video, UHD screens Emergency services Self-driving cars Work & play in the cloud Augmented & virtual reality 5G use cases applicable in the context of India mmtc can support the deployment of the government s 100 smart cities mission through installation of smart meters, smart poles, and CCTV cameras Industrial automation Ultra-reliable, low latency communications (urllc) urllc can enable low latency healthcare (through remote medical facilities delivered at Public Health Centres by making use of BharatNet optical fibre infrastructure) and digital education services (through remote virtual classrooms 5G use cases are centred around three core themes Enhanced MBB enables over 100Mbit/s to indoor and outdoor locations, and over 1Gbit/s in dense indoor locations, with end-to-end (E2E) latency <5ms mmtc to support large numbers of connected devices and enable Smart City solutions requiring moderate data speeds but wider coverage and scale urllc with <1ms latency to support automated technologies requiring high precision and real-time communication like robotic manufacturing, and remote surgery Global 5G spectrum roadmap Internationally, industry interest spans across low frequency (700MHz), mid-frequency (3.3 5GHz), and high-frequency bands (20 30GHz and 30+GHz) Expected timeline for 5G commercial launch Standards (PP) Release 15 Release 16 Release 17 and beyond Non-standalone Standalone C-band (3.3 5GHz) remains the prime focus for 5G as it provides optimal mix of coverage and capacity Events 5G network PyeongChang Winter Olympics Pre-commercial trails UEFA EURO Tokyo Summer 2020 Olympics Commercial deployment India and developed markets 5G spectrum roadmap and deployment in India Source: Analysys Mason, Industry reports In India, the focus has been on sub-700mhz spectrum band and a part of C-band (3.Hz) Availability of V-band (56-66GHz), and E-band (71 76GHz and 81 86GHz) for backhaul wireless deployment will be pivotal in the proliferation of 5G technology Commercial launch of 5G in India is expected by 2020, in-line with other developed markets, driven by operators investing in virtualised networks as part of their rollout 10 India Mobile Broadband Index 2018

11 Going forward, adoption of is expected to increase further, driven by the availability of affordable LTE devices and proliferation of OTT-video content in local languages is expected to drive the bulk of data traffic in 2018, as the adoption of increases beyond Metros and Tier-1 cities With increasing availability of affordable VoLTE handsets (VoLTE devices expected to reach 70-80% penetration in Metros in the next 2-3 years), operators will look to offload a significant fraction of 2G voice traffic onto VoLTE Proliferation of OTT video is further expected to boost data consumption, and OTT players are expected to transition into production houses to develop original vernacular content Operators need to consolidate their market position by leveraging global learnings through deployment of LTE-A / LTE-Pro and Cloud-RAN to enhance customer experience 5G could provide a fillip to the government s role in promoting Smart cities mission, and low-latency use cases for BharatNet fibre network The next wave of growth in Indian broadband market could come from the untapped base of 500 million featurephone users, who could potentially leapfrog from 2G to India Mobile Broadband Index

12 7th Floor Building No 9A DLF Cyber City, DLF Phase III Gurgaon , Haryana, India About Nokia: We create the technology to connect the world. Powered by the research and innovation of Nokia Bell Labs, we serve communications service providers, governments, large enterprises and consumers, with the industry's most complete, end-to-end portfolio of products, services and licensing. From the enabling infrastructure for 5G and the Internet of Things, to emerging applications in digital health, we are shaping the future of technology to transform the human experience. nokia.com Nokia is a registered trademark of Nokia Corporation. Other product and company names mentioned herein may be trademarks or trade names of their respective owners. networks.nokia.com/india Mobile Broadband Index 2018 SR EN