Wireless Opportunities In A 4G World

Transcription

1 Wireless Opportunities In A 4G World October 17, Jackson Ave., Suite 218 New Orleans, LA Jackson Street, Suite 101 Denver, CO

2 Current Wireless Industry Traditional US wireless voice market fully saturated Connections now the benchmark, not subscribers Penetration now over 100% Smartphones near 50% penetration Growth is now focusing on capturing ancillary devices Consumers are pretty happy Verizon s postpaid contract customers stay 9.9 years AT&T: 8.6 years Sprint: 4.7 years T-Mobile: 4.0 years MetroPCS: 2.5 years Leap: 1.9 years

3 Verizon Completing LTE launch Finalizing spectrum war chest Reliance on network All The Right Moves Look for corporate LTE products and devices AT&T Scrambling to assemble spectrum Initializing LTE rollout Reliance on marketing and devices Look for corporate LTE products and devices Sprint Improving operationally and financially 4G/Clearwire a distraction Focus is to re-establish itself as a competitor Coverage particularly LTE an issue Carrier Strategies T-Mobile Reassessing life after AT&T Recapitalizing brand and network Have spectrum for LTE, but not much Where does capital come from? US Cellular Staying in existing footprint Strong customer care focus Reasonably well positioned for LTE 2

4 Tracking Value Creation 3

5 Tracking Value Creation 4

6 Verizon and AT&T Pulling Away in Subscriber Race 5

7 Postpay Race Isn t Close At All 6

8 Handsets Data is for users 13 and older Smartphone penetration likely to top 50% in 2012 Apple constitutes a third of smart phone market, more of the tablet For small carriers, Android access absolutely critical 7

9 MetroPCS Handset Selection Huawei M835 Huawei M835 HTC Wildfire S LG Connect 4G LG Esteem Samsung Admire Samsung Admire Red LG Optimus M+ Samsung Galaxy Attain 4G ZTE Score Samsung Galaxy S LightRay Huawei Activa 4G Blackberry Curve LG LG Samsung Kyocera Huawei Samsung Huawei M735 Beacon Select Contour Presto Pinnacle Freeform III Blue 8

10 Handset Acquisition Issues LTE band plans make handset acquisition increasingly difficult CDMA/GSM divide Band plans PCS: Band 2 850: Band 5 AWS: Band 4 EBS/BRS: Band 7 700: Band 12 (A, B, C), Band 17 (B,C), Band 13 (Upper C) Spectrum iphone 5 Example Band CDMA GSM 850 MHz 5 PCS 2, A B/C UC 13 AWS GHz 7 Unconfirmed by Apple Larger channels size creates capacity With LTE, larger channel sizes increase spectral efficiency Verizon/T-Mobile trade highlights the advantages of contiguous spectrum blocks Look for in-market PCS swaps in the future to create spectrum 9

11 Handset Ecosystem Driving Network Development Smartphone data usage increasing Average user in 2011 consumed 150 MB monthly; up from 55 in 2010 Android users consume more than iphone in US Any network today must plan for all-smart phone subscriber base Tablets and dongles significant sources of data traffic, too Operators face a triple layered growth issue Increasing devices Increasing usage for all devices Managing multiple network types Spectrum, spectrum, spectrum 10

12 Where Growth Is How are carriers attracting new revenue? Smartphone: 50% penetration this year Tablets: 70% Apple Notebooks, to a much lesser extent US Tablet Growth (MM) Pricing CTIA notes that the average bill fell 1% in last 18 months Carriers mandate data plans to match phone selection Stickiness of text charges despite free alternatives Shared data plans make switching even more difficult How do carriers attract competitors subscribers? Network speed Handsets Source: emarketer.com 11

13 National Spectrum Positions Average spectrum depth of the four national carriers 12

14 Fixed Wireless: Clearwire 13

15 CDMA rollup All for sale For sale today Leap Metro Mounting pressure US Cellular Ntelos Rural CDMA carriers Higher band spectrum becomes more popular WCS, 2.5 GHz, G-band DISH is a wildcard Only enhances AT&T, VZW and US Cellular s positions in rural markets In-market PCS swaps LTE spawns new bedfellows New subscribers are imbedded devices in products Regionals and rurals have no shot at this business What Might Change 14

16 Other Wireless Options Fiber Fiber to the tower: don t wait to be asked Fiber backbone: push statewide networks out as far as possible Non-traditional WiFi Offload from carrier WiFi networks The growth opportunity in Europe Revenue opportunities for ILECs TV white spaces 3.6 GHz: NN spectrum Agency Best viewed as something extra to keep customers around 15