Will LTE be the Death of the Landline ACE School Ft. Worth, Texas May 7, 2006 By Donn Swedenburg RVW, Inc. (402)

5/8/12ACE School Introduction Rapidly changing technology continues to impact our industry. The rapid emergence of Long Term Evolution (LTE) 4G represents a formidable technology & one more technology “game changer”. Technology advancement has always altered the way people do things.

5/8/12ACE School Presentation Goals Briefly examine industry statistics & trends. Illustrate the rapid emergence of LTE. Identify current barriers to LTE deployment. Conclude with a summary of the issues and opportunities.

5/8/12ACE School By the numbers Total landlines peaked in –Approximately 188 million lines in –Since then, landlines have decreased 1 – 2% yearly, the 2008 total landline count was approximately 123 million lines. –From 2007 to 2009, the percentage of households with landline service only has declined from 23.8% to 14.9%.

5/8/12ACE School By the numbers Percentage of “wireless only” households has increased from 13.6% to 32% from 2007 to These numbers driven by wireless consumer preferences for convenience & mobility and the popularity of certain handset.

5/8/12ACE School Why LTE? The 3GPP LTE standards body moved the fastest. –Established profiles in many frequencies including 700 MHz. –LTE supports much higher data rates than 3G technologies. –The future is about broadband data.

5/8/12ACE School Industry LTE Acceptance In 2010, 3 of 10 wireless companies polled utilized LTE technology. In 2011, it reversed - 7 of 10 wireless companies polled utilized LTE technology in their networks. –Today, data is king & speed is the driver. –700 MHz spectrum auctioned in 2002 & 2009 had a compelling technology to utilize it.

5/8/12ACE School Industry LTE Acceptance LTE’s all IP design facilitates higher speed data rates –It is not unusual for speed tests of lightly loaded 4G LTE to run at 10 – 15 Mbps downstream and Mbps upstream. –The latency target for LTE is 25 ms., but for existing network configurations, ms. Is not unusual today –Voice services still operating on the 3G network.

5/8/12ACE School Industry LTE Acceptance Rapid industry LTE acceptance energized the CPE manufacturing community. –Multiple devices already available including PC dongles, MiFi type devices, fixed indoor and outdoor CPE. –Multiple vendors like BandRich and Ericsson developing devices for various Band Classes. –The VoLTE (Voice over LTE) standard and hardware not finalized yet, but on the way.

5/8/12ACE School The Weak Links Wireless technology requires spectrum. Wireless broadband requires lots of it. –The amount of spectrum available for deployment is still somewhat limited. –The FCC has promised more spectrum for auction, but nothing is scheduled. –Wireless broadband technology requires broadband backhaul networks. –Proportions of various applications will affect spectrum required and backhaul capcity.

5/8/12ACE School Conclusions Erosion of voice landlines will continue. –The voice network will not disappear, but will undoubtedly evolve. LTE will become a major force in delivering telecommunications services –Given enough spectrum and backhaul capacity, expect the wireless providers to begin competing in the fixed broadband market.

5/8/12ACE School Conclusions The emergence of LTE as the technology of choice in wireless can also be a revenue opportunity. –If you have spectrum, it could provide a ground floor opportunity to enter the wireless market for either high mobility or fixed wireless services. –National carriers will undoubtedly need your networks to provide backhaul.

5/8/12ACE School References –PwC Communications, Changes & trends in the North American wireless industry, March, –FCC Wireline Competition Service Bureau, Trends in Telephone Service, –CNN Money, Are landlines doomed?, April 10, 2012.