LTE in Asia Pacific: Outlook and Monetization Strategies
-
Upload
sherrie-xiaoyu-huang -
Category
Technology
-
view
541 -
download
4
Transcript of LTE in Asia Pacific: Outlook and Monetization Strategies
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Webinar
LTE in Asia-Pacific: Outlook and
Monetization Strategies
14 October 2014
Sherrie Huang and Nipun Jaiswal
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
APAC
Our research portfolio includes 30 programmes covering
the complete depth and breadth of the telecoms sector
2
Deliverables: research programmes include a combination of:
Reports: forecasts, quantitative modelling and survey reports, with in-depth analyses of critical industry challenges and opportunities
Viewpoints: targeted analysis of key trends and topics (technology trends, innovative business models, best-practice strategies and case studies)
Comments: brief informed opinion on industry and competitive developments
Trackers and databases: regularly updated databases of KPIs, services pricing and offers, roll-out initiatives and spectrum auctions.
Network Technologies
Spectrum Fixed Networks Wireless Networks
Practices Programmes
Consumer Services
Enterprise and M2M IoT and M2M Solutions SME Strategies
Telecoms Software Strategies
Data programmes Application programmes
Telecoms Software Forecasts
Service Assurance Telecoms Software Market Shares
Revenue Management
Infrastructure Solutions Service Fulfilment Service Delivery Platforms
Customer Care
MEA
Regional Markets
Europe
European Core Forecasts
Telecoms Market Matrix
European Country Reports
The Middle East and Africa
Asia–Pacific
Global Telecoms Forecasts
Telecoms Software Markets
Customer Experience Management Software Strategies
Digital Economy Software Strategies
Analytics Software Strategies
Software-Controlled Networking
CSP IT Strategies
Mobile Services Mobile Devices Fixed Broadband and Multi-Play
Next-Generation Services
Digital Economy
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies 3
LTE Adoption in Asia–Pacific and forecast
LTE network deployment status and key LTE technologies
Impact of LTE on mobile data traffic
Consumer behavior towards LTE
How to monetize LTE?
Sneak peak at 5G
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies 4
Emerging Asia–Pacific (EMAP)
Bangladesh
China
India
Indonesia
Malaysia
Pakistan
Thailand
Vietnam
Developed Asia–Pacific (DVAP)
Hong Kong
Singapore
Taiwan
Japan
South Korea
Australia
Australia
South Korea
Singapore
Hong Kong
Taiwan
India
Pakistan
Malaysia
Indonesia
Bangladesh
China
Thailand
Japan
Vietnam
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
DVAP drove early global LTE uptake, but the number of
LTE connections in EMAP will overtake DVAP’s by 2017
5
Figure 1: Global LTE connections, and DVAP’s and EMAP’s shares,
2009–2018 [Source: Analysys Mason, 2014]
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
200
400
600
800
1 000
1 200
1 400
1 600
2009
2010
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
Pe
rce
nta
ge
of
glo
ba
l LT
E c
on
ne
ctio
ns
Co
nn
ectio
ns (
mill
ion
)
Global DVAP share EMAP share
The world had more than 200 million
LTE connections by the end of 2013,
accounting for just 3% of total mobile
connections.
1
LTE has been concentrated in a few
key markets, particularly Japan, South
Korea (DVAP) and the USA. 2
EMAP is set to become the dominant
world LTE market – its 420 million
connections will account for 27% of
LTE connections worldwide by 2018. 3
By then, only 11% of connections in
EMAP will have migrated to LTE, so
the region will continue to have
considerable untapped potential
beyond 2018.
4
HISTORICAL FORECAST
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
LTE has already achieved sharp adoption in DVAP…
6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
50
100
150
200
250
300
350
200
9
201
0
2011
201
2
201
3
201
4
2015
201
6
201
7
201
8
Pe
rce
nta
ge
of
co
nn
ectio
ns
Co
nn
ectio
ns (
mill
ion
s)
2G 3G 4G
2G 3G 4G
Connections:Share:
Figure 2: Mobile connections in DVAP, breakdown by technology,
2009-2018 [Source: Analysys Mason, 2014] Japan’s NTT DoCoMo launched the
world’s second commercial LTE
network – behind TeliaSonera in
Sweden – in December 2010.
1
LTE has seen fast adoption in the
region, reaching 28% of SIMs by the
end of 2013 (and over 35% currently).
LTE will overtake 3G in DVAP in 2015.
2
3G connections have shown a sharp
decline since 2012, a year after LTE
launch in the region. 3
2G has been in strong decline since
before the launch of 4G, and will
almost disappear entirely from the
region by 2018.
4
HISTORICAL FORECAST
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
…while it is only just taking off in EMAP right now…
7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
Pe
rce
nta
ge
of
co
nn
ectio
ns
Co
nn
ectio
ns (
mill
ion
)
2G 3G 4G
2G 3G 4G
Connections:Share:
Bharti Airtel in India launched the
region’s first commercial LTE services
in April 2012, although this was only a
pure broadband service. The first full
scale LTE service (including mobile
handsets) was launched in Malaysia
by Maxis, in January 2013.
1
EMAP will be the region with the most
number of LTE connections in the
world, given its size (accounts for half
of the world’s population).
2
Although 2G is declining rapidly, it will
continue to be dominant in EMAP
even through 2018 (helped largely by
India), while 3G’s share of total mobile
connections is starting to plateau due
to 4G (influenced heavily by China).
3
Figure 3: Mobile connections in EMAP, breakdown by technology,
2009-2018 [Source: Analysys Mason, 2014]
HISTORICAL FORECAST
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
4G
pe
rce
nta
ge
of
co
nn
ectio
ns
Australia
Hong Kong
Japan
Singapore
South Korea
Taiwan
Bangladesh
China
India
Indonesia
Malaysia
Pakistan
Thailand
Vietnam
…though intra-region is very diverse, with China and
Malaysia expected to drive most of EMAP penetration
8
Figure 4: LTE adoption in APAC, by country, 2009-2018 [Source: Analysys Mason, 2014]
HISTORICAL FORECAST
LTE adoption in
DVAP took off after
(due to two-year
contract obligations)
a year of launch
DV
AP
E
MA
P
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies 9
LTE Adoption in Asia–Pacific and forecast
LTE network deployment status and key LTE technologies
Impact of LTE on mobile data traffic
Consumer behavior towards LTE
How to monetize LTE?
Sneak peak at 5G
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
DVAP operators have successfully switched-on their LTE networks
whereas most EMAP operators are still at a planning or trial stage
Figure 5: Operational and planned LTE networks, June 2014, [Source:
Analysys Mason’s Wireless network tracker, 2014]
Figure 6: Status of EMAP LTE networks, June 2014, [Source: Analysys
Mason’s Wireless network tracker, 2014]
EMAP has the highest number of LTE networks in
planning and trial stages in the world. EMAP also has
the second highest number of LTE networks in world.
Majority (59.0%) of LTE networks in EMAP are in
planned/trial stage whereas majority (58.8%) of the
networks in DVAP are already operational.
Countries such as India, Indonesia and Vietnam are the
leading countries in terms of the number of planned and
trail LTE networks in EMAP.
Western Europe has the highest number of operational
LTE networks in the world.
Figure 7: Status of DVAP LTE networks, June 2014, [Source: Analysys
Mason’s Wireless network tracker, 2014]
10
16 1830 30 25 34 29
626 12
12 24 28 17 32
10
65
6 2 1 1214
11
0
20
40
60
80
100
ME
NA
SS
A
DV
AP
NA
LA
TA
M
CE
E
EM
AP
WE
Num
ber
of
LT
E n
etw
ork
s
Operational Planned Trials in progress
In deployment
Operational
Planned
Testing
Trials in progress
EMAP
Total number of LTE
NWs: 78
In deployment
Operational
Planned
Testing
Trials in progress
DVAP
Total number of LTE
NWs: 51
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
FD-LTE achieves widespread adoption in the region whereas TD-LTE
to remain specific to a few niche markets such as China
Figure 8: FD-LTE and TD-LTE network deployments, Asia-Pacific, June 2014 [Source: Analysys Mason, 2014]
11
India
Pakistan
Malaysia
Indonesia
Bangladesh
China
Thailand
Japan
Australia
South Korea
Singapore
Hong Kong
Taiwan
India
Pakistan
Malaysia
Indonesia
Bangladesh
China
Thailand
Japan
Australia
South Korea
Singapore
Hong Kong
Taiwan
Vietnam Vietnam
Planned deployments or trials
in progress Operational network
FD-LTE TD-LTE
Sri Lanka
No Activity
Sri Lanka
Total FD-LTE
networks: 61
Total TD-LTE
networks: 24
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
LTE-A Releases 10, 11 and 12 will change the way operators use and
manage spectrum for mobile services
12
Figure 9: Key features in LTE-A Releases 10, 11 and 12 [Source: Analysys Mason, 2014]
Release 11 (available 2014)
Gigabit download speeds and improved automated management functions
Release 10 – initial LTE-A release (available in 2013)
CA , improved network performance and HetNets
Release 12 (available about 2015)
Improved operations benefits and technology upgrades
LTE TDD-FDD joint operation including carrier aggregation.
LTE-A core features:
Carrier aggregation
HetNet
SON
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Carrier Aggregation makes the spectrum-rich richer: MNOs are
testing and launching peak download speeds of 200Mbps+
CA: Carrier Aggregation
Figure 10: Peak download speeds demonstrated through LTE Carrier
Aggregation [Source: Analysys Mason, 2014]
13
Country Operator Maximum
download speeds
(Mbps)
• Australia • Telstra
• Optus
• 300 (Launched)
• 220 (TD-LTE)
(Launched)
• China
• China
Telecom
• China
Mobile
• 260 (FDD-TDD)
(Trial)
• 250 (FDD-TDD)
(Trial)
• Hong Kong • CSL • 300 (Demo)
• Singapore • SingTel • 300 (Launched)
• Philippines • Smart • 200 (Trial)
• South Korea
• LG Uplus
• KT
• SK
Telecom
• 150 (Launched)
• 225 (Launched)
• 225 (Launched)
2 Operators with multiple spectrum
positions benefit the most.
3
DVAP operators are front runners
in terms of commercializing LTE-A
CA.
1 LTE-A CA changes the strategy for
spectrum use in mobile networks.
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
DVAP operators are the first and only ones (besides US operators) in
the world to launch VoLTE services
Country Operator VoLTE status
Hong Kong HKT-PCCW Launched
Hong Kong 3 HK Launched
Japan NTT DoCoMo Launched
Singapore SingTel Launched
South Korea SK Telecom Launched
South Korea KT Launched
South Korea LG Uplus Launched
USA AT&T Launched
USA Verizon Wireless Launched
USA T-Mobile-
MetroPCS
Launched
Figure 11: VoLTE launch status, June 2014, [Source: GSA, Analysys
Mason, 2014]
14
2
Operators are offering VoLTE
calls for LTE subscribers at no
extra cost
1
DVAP has dominated VoLTE
deployment and adoption thus
far.
3 Benefits of VoLTE for consumers
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies 15
LTE Adoption in Asia–Pacific and forecast
LTE network deployment status and key LTE technologies
Impact of LTE on mobile data traffic
Consumer behavior towards LTE
How to monetize LTE?
Sneak peak at 5G
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
EMAP will have the highest growth rate in the world for
cellular data traffic, but still lag behind DVAP in usage
16
Figure 12: 5-year growth multiples for cellular data traffic, by region,
2013–2018 [Source: Analysys Mason, 2013]
Figure 13: Average monthly cellular data usage, 2013, and 5-year
growth multiple for mobile data traffic, 2013–2018, Asia–Pacific
[Source: Analysys Mason, 2013]
0
2
4
6
8
10
12
14
16
18
20
22
0
200
400
600
800
100
0
120
0
1400
Gro
wth
multip
le (
1 =
201
3)
Usage (MB/month/pop)
Bangladesh
India
Thailand
Pakistan
IndonesiaMalaysia
TaiwanAustralia
South Korea
Japan
Hong Kong
Singapore
China
EmergingAsia–Pacific
DevelopedAsia–Pacific
0
2
4
6
8
10
12
WE
CE
E
NA
SS
A
DV
AP
Wo
rld
LA
TA
M
ME
NA
EM
AP
Gro
wth
mu
ltip
le (
1 =
20
13
)
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
0.0
1.0
2.0
3.0
4.0
5.0
2011 2012 2013 2014 2015 2016 2017 2018
Da
ta u
sa
ge
on
3G
/4G
(G
B p
er
mo
nth
pe
r u
se
r)
DVAP EMAP
Mobile data usage proliferates as subscribers transition
from 3G to LTE and as LTE adoption increases
17
Figure 14: Growth multiples for cellular data traffic, by operator
[Source: Analysys Mason, 2014]
Figure 15: Growth multiples for cellular data traffic, by region [Source:
Analysys Mason, 2014]
0.0
0.5
1.0
1.5
2.0
2.5
Vodadone(UK)
Vodadone(Italy)
Japan SKT (Korea)
Da
ta u
sa
ge
per
su
bscrib
er
(GB
per
mo
nth
)
3G LTE
2.3x 3.4x 1.6x 2.0x 0.0
0.5
1.0
1.5
2.0
2.5
Vodadone(UK)
Vodadone(Italy)
Japan SKT (Korea)
Data
usage p
er
subscriber
(GB
per
month
)
3G LTE
3.0x
6.0x
6.4x
6.9x
5.3x
5.6x
Mobile consumers’ data usage clearly
shoots up on a 4G network as
compared to on a 3G network as the
faster speeds allow the consumer to
access more.
1
The difference between data usage on
a 3G network and on a 4G network is
lesser in markets of heavy data use
such as Japan and South Korea.
2
Data usage in DVAP (predominantly
LTE) will grow 5 times from 2013–
2018, but only 4 times in EMAP. 4
Data usage in DVAP will grow much
faster than in EMAP, despite its
existing higher level, driven by mass
adoption of 4G in the region.
3
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies 18
LTE Adoption in Asia–Pacific and forecast
LTE network deployment status and key LTE technologies
Impact of LTE on mobile data traffic
Consumer behavior towards LTE
How to monetize LTE?
Sneak peak at 5G
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
More than 60% of people know what LTE is, and put more
importance on speed than price, especially for EMAP
19
Do you know what 4G LTE is and do you have it?
What would make you use your mobile Internet
service more? (choose more than one)
Approximately 35% of respondents in
Malaysia and Indonesia do not know
what LTE is. Advertising and educating
them is important for operators.
1
Nearly 40% of consumers in Malaysia
and Indonesia know what LTE is but
still do not have it. Operators should
make a bigger push to find out why.
2
Consumers, especially in Indonesia,
are being constrained in their data
usage by the data allowance, and
would like to use more if affordable.
4
Although cheaper price for data is
extremely important for consumers,
faster data speeds are still higher up in
their priority list.
3
0% 20% 40% 60% 80%
South Korea
Malaysia
Indonesia
Percentage of respondents
Cheaper pricefor data
Higher dataallowance
Faster dataspeed
0%
20%
40%
60%
80%
100%
SouthKorea
Malaysia Indonesia
Pe
rce
nta
ge
of
resp
on
de
nts
No, I do not knowwhat it is
No, but I have heardthe term
Yes, I know what it isbut I do not have it
Yes, and I have a 4GLTE mobile servicealready
Source: Connected consumer survey 2013, Analysys Mason.
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Although a faster network ranks highly on consumers’
wishlist, LTE is quite low, likely due to high device prices
20
What attracted you to this provider? (choose more
than one)
In developed markets, consumers take
fast networks and adequate coverage
as given and these become less of a
differentiating factor.
1
4G is still viewed as expensive in price
sensitive developing markets
(probably due to devices which are
limited and very costly).
2
Some of the other key considerations
for consumers are handsets offered
and their price, and which operator
their friends and family use.
4
The good news for operators is that as
much as the price of data is important
for consumers, it does not dwarf the
importance of network coverage,
quality and speed.
3
0% 10% 20% 30% 40% 50% 60%
South Korea
Malaysia
Indonesia
Percentage of respondents
Price of data Better coverage
Faster network It has 4G LTE
Source: Connected consumer survey 2013, Analysys Mason.
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Majority of people are willing to pay a premium for LTE;
this behavior is more pronounced in emerging markets
21
When you next change your contract or handset,
would you be prepared to pay extra for 4G LTE?
The readiness of consumers to pay a
premium for LTE services decreases
as the service becomes more
commonplace.
1
Nearly 40% of consumers in South
Korea are unwilling to pay any
premium for LTE services, but this
resistance reduces in markets where
LTE is still not widespread.
2
Nearly 80% of consumers in Indonesia
are willing to pay a premium for LTE. 3 0%
20%
40%
60%
80%
100%
South Korea Malaysia Indonesia
Pe
rcen
tage
of
resp
on
de
nts
Sorry, I don't understand the question
Yes (more than EUR5 per month)
Yes (EUR3 - 5 per month)
Yes (EUR1 - 2 per month)
No
In emerging markets, people are more
willing to pay a premium for LTE,
especially where there’s no LTE yet.
4
Source: Connected consumer survey 2013, Analysys Mason.
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies 22
LTE Adoption in Asia–Pacific and forecast
LTE network deployment status and key LTE technologies
Impact of LTE on mobile data traffic
Consumer behavior towards LTE
How to monetize LTE?
Sneak peak at 5G
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies 23
Category Strategy Rationale
Tariff
structures
Speed as tier differentiator Focus on quality of experience
No need to worry about right-sizing
4G only on top-level tiers Effective for upselling early adopters on to the highest price.
Unlimited Effective marketing
Unlimited voice & SMS: Focus on value of data while monetising legacy.
Content and
services
4G-specific content
bundles
Best-in-class content: A strong differentiator
Focus: ↑ Customer stickiness & Data consumption.
Potential revenue-share: a new revenue stream
Cloud storage
Requires fast & reliable Internet connectivity: Differentiate 4G
Utilise increased uplink capacity
Data-intensive: ↑ Data consumption.
Extending
connectivity
Multi-device or shared data Those on multi-device plans Get more subsidized devices
Those on family plans Use more data
Tethering Connecting other devices Use more data (typically > mobile broadband price)
Can be problematic for unlimited tariffs
Wi-Fi out-of-home access Wi-Fi hotspots: Complementary to cellular coverage
↑ Data usage out of the house.
Other International roaming
Voice/messaging roaming: Useful value-add for many higher-end customers
Bundled data roaming: ↑ Data consumption abroad & Monetization potential
Need to exam roaming agreements
Many of the strategies designed to differentiate 4G tariffs
involve bundling with other service elements Figure 16: Potential operator strategies for differentiating 4G services [Source: Analysys Mason, 2014]
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Tariff structures: In the long term, operators’ tier structures for
handset data must tackle the ‘running out of runway’ problem
24
Tariff
Structure
Content &
Services
Extending
Connectivity
Figure 17: Approaches to structuring mobile handset data tariffs [Source: Analysys Mason, 2014]
The main approaches: volume-based and speed-based pricing; many tariff structures are, in practice,
‘two dimensional’.
Operators need to move customers up the price tiers faster than prices decline. If there are no upsell
opportunities, then only price erosion remains. ‘Running out of runway’ problem.
Approach Advantages Disadvantages
Volume-based Addresses the ‘running out of runway‘
problem
Volumes might appear abstract to many users
and difficult to self-monitor
Need to manage overage
Does not differentiate between 3G/4G/LTE-A
Speed-based
No overage problem if unlimited
Hybrid speed–volume pricing addresses
the ‘running out of runway problem’
Easy to communicate to customers
Aligns well with fixed broadband pricing
Unpredictability of cellular environment equates
to poor speed level guarantees
Potential cost impact of high-volume users
A service deemed to be ‘fast enough’ might limit
upsell opportunities
Unlimited
Unlimited voice & SMS vs Unlimited data
Strong differentiator
Easy to communicate to customers
No overage problem
Fewer active upsell opportunities
Potential cost impact of high-volume users
Restrictions imposed (for example, not allowing
tethering) may prove unpopular
The most
common
Normally
3G vs 4G
Disruptive
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Core Tariff
Elements
Music
Video
Cloud Storage
Gaming
VoIP
Content and services: Operators should offer premium content for
high-end and popular OTT apps for lower-end customers
Increasingly, the bundling of video content
with LTE is considered a key way to
differentiate and upsell LTE.
Operators should focus on bundling
services that foster high engagement, to
make their tariffs more attractive and to
gain high-usage customers.
Example: SK Telecom (South Korea)
T freemium: content for LTE subscribers
Movies, TV shows, e-Books and other
multimedia content only available to LTE
subscribers
Source: SK Telecom, Analysys Mason, 2014
25
Tariff
Structure
Content &
Services
Extending
Connectivity
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Singapore: Operators increasingly partner with providers of OTT
communications services to drive the take-up of mobile data
All offer a selection of core prepaid tariffs + Top-
up plans and add-ons (catering for specific
usage patterns, such as high volumes of
international calls or mobile data).
All offer top-up plans: Retail value >> The
combined theoretical value.
Partnership with popular regional OTT players
Starhub WeChat and Line Plans for Prepaid
Customers: Happy is non-stop WeChat from
40 cents/day.
SingTel Prepaid social data plans: Facebook,
WhatsApp, Opera mini surf & mail, Line,
WeChat Prepaid subscriber base ↑ 4.9% in
the year to December 2013 (highest growth in
Singapore).
KPI 4Q 2013
Mobile (active SIM) penetration of the
population 145.3%
Prepaid subscribers as a percentage of the
subscriber base 43.6%
Prepaid ARPU (per month) SGD14.0
Postpaid ARPU (per month) SGD63.2
Figure 18: Mobile KPIs for Singapore [Source: Analysys Mason, 2014]
Operator Description Pricing
SingTel Separate Social Data Plans
offer unlimited usage of
individual services:
Facebook, LINE, Opera
Surf, WeChat and
SGD0.50 per day or
SGD6.00 for 30
days for all services
except LINE, which
is double the price
StarHub LINE Prepaid Plan offers
unlimited access to LINE
SGD0.40 per day,
or SGD6.00 for 30
days
Figure 19: Selected add-ons featuring popular OTT communication
and online services [Source: SingTel, StarHub, 2014]
26 26
Tariff
Structure
Content &
Services
Extending
Connectivity
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Extending connectivity: Multi-device plans fitting to multi-device
ownership are increasingly adopted to maximise potential revenue
Shared data tariffs encourages users to choose larger data
allowances.
Multi-device sharing plans are becoming more common
catering to the multi-device ownership are increasingly
adopted to maximise potential revenue.
Extending connectivity is an opportunity to increase tablet
connectivity; but operators need to reduce costs to match
perceived value
Pricing Type of plan Shared element
Monthly device or SIM
connection charge
Multi-device (Additional SIM for tablet,
USB modem or MiFi)
Data allowance
Multi-user (Also called “Family plans”) Data allowance
Voice and messaging service
No monthly device or SIM
connection charge
Second SIM for mobile broadband Data allowance
1According to our global connected consumer survey data.
27
Tariff
Structure
Content &
Services
Extending
Connectivity
About 29% of
smartphone
owners own
both a tablet
and a laptop. 1
Figure 20: Types of multi-device tariff structure [Source: Analysys Mason, 2014]
LTE in Asia-Pacific: Outlook and Monetization Strategies
© Analysys Mason Limited 2014
LTE monetization: The availability of affordable handsets is the key
and prepaid will become important, especially for emerging APAC
28
• Premium & OTT
• OTT partnership
• Popularity ↑
• Preferred in EMAP
• Late movers in DVAP
• Plan structure
• Extending connectivity
• Multi-play
• Multi-mode
• Scale ↑
• Variety
• Affordability
Handset Tariff
Content Prepaid
Offering LTE to
more is important
for late movers.
First movers are
often able to charge
premium for LTE.
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Data gifting
Unlimited calling
Volume-based
flat-rate plans
M ulti-network
Mobile network
FTTH
CATV
Wi-Fi
other networks.
M ulti-device
smartphones
tablet computers
ebook readers
PCs, etc.
M ulti-use
available for use
in the manner the customer requires
at any place
and at any time
KDDI’s success story unpinned by its “3M strategy”:
Good tariff plans with the right bundles lead to synergies
Source: KDDI, Analysys Mason.
29
Conte
nts
, applic
ations,
serv
ices
Turn-around
in ARPU Subscriber
base ↑ Historical
low churn Data rev &
sub base ↑
…
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies 30
LTE Adoption in Asia–Pacific and forecast
LTE network deployment status and key LTE technologies
Impact of LTE on mobile data traffic
Consumer behavior towards LTE
How to monetize LTE?
Sneak peak at 5G
LTE in Asia-Pacific: Outlook and Monetization Strategies
© Analysys Mason Limited 2014
Early 5G specifications are expected to be introduced in 2015 in
3GPP Release-14, with initial deployment expected from 2020
31
2011 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019
5G (2015)
Standardization
begins
(3GPP Rel-14
onwards)
LTE
(2008)
Introduction
in Rel-8
LTE-Advanced
(2011)
Introduction in
Rel-10
2020 2021
5G vision &
requirements
(2013 –2014)
4G (2008-2017)
LTE and LTE-A standardization, 3GPP Release-8 to Release-14
5G Standardization
5G Deployment
2022
5G
targeted
launch
5G Trials and Testing
Figure 21: Evolution of mobile technology standards with timeline for 4G and 5G. [Source: Analysys Mason, 2014]
15G to be introduced in Release 14/15, Available at: http://www.3gpp.org/news-events/3gpp-news/1614-sa_5g.
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
Key Takeaways
LTE has achieved sharp adoption in DVAP while its only just taking off in EMAP right now.
LTE-Advanced will change the way operators use and manage spectrum for mobile services
Mobile data usage proliferates as subscribers transition from 3G to LTE and as LTE adoption increases
Consumers are willing to pay a premium for LTE and this behavior is more pronounced in emerging markets.
The key to monetize LTE in the long term is offering affordable LTE to wider audience. Handset, content/service and multi-device are critical.
32
© Analysys Mason Limited 2014
LTE in Asia-Pacific: Outlook and Monetization Strategies
We are uniquely positioned to offer research and consulting to
telecoms, media and technology TMT sectors
33
Our focus is exclusively on telecoms, media and
technology (TMT).
We support multi-billion dollar investments, advise
clients on regulatory matters, provide spectrum
valuation and auction support, and advise on
operational performance, business planning and
strategy.
We have developed rigorous methodologies that
deliver tangible results for clients around the world.
Consulting
Cambridge • Dubai • Dublin • Edinburgh • London • Madrid
Manchester • Milan • New Delhi • Paris • Singapore • Washington DC
We analyse, track and forecast the different
services accessed by consumers and enterprises,
as well as the software, infrastructure and
technology delivering those services.
Research clients benefit from regular and timely
intelligence in addition to direct access to our team
of expert analysts.
Our dedicated Custom Research team undertakes
specialised and bespoke projects for clients.
Research
TMT INDUSTRY
DYNAMICS
Maximising
operational
efficiency Reducing
churn and
acquiring
customers
Positioning for
the digital
economy
Leveraging
the next
generation
and virtual
networks
Monetising
data services
LTE in Asia-Pacific: Outlook and Monetization Strategies
© Analysys Mason Limited 2014
Contact details
34
Boston
Tel: +1 202 331 3080
Fax: +1 202 331 3083
Cambridge
Tel: +44 (0)1223 460 600
Fax: +44 (0)1223 460 866
Dubai
Tel: +971 (0)4 446 7473
Fax: +971 (0)4 446 9827
Dublin
Tel: +353 (0)1 602 4755
Fax: +353 (0)1 602 4777
Johannesburg
Tel: +27 11 666 4786
Fax: +27 11 666 4788
London
Tel: +44 (0)20 7395 9000
Fax: +44 (0)20 7395 9001
Manchester
Tel: +44 (0)161 877 7808
Fax: +44 (0)161 877 7810
Milan
Tel: +39 02 76 31 88 34
Fax: +39 02 36 50 45 50
New Delhi
Tel: +91 11 4700 3100
Fax: +91 11 4700 3102
Paris
Tel: +33 (0)1 72 71 96 96
Fax: +33 (0)1 72 71 96 97
Singapore
Tel: +65 6493 6038
Fax: +65 6720 6038
Madrid
Tel: +34 91 399 5016
Fax: +34 91 451 8071
Sherrie Huang
Head, Asia–Pacific Programme
Nipun Jaiswal
Analyst
Satvik Singhania
Research Analyst