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Long Term Evolution (LTE) Customising Performance1st May 2013

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Long Term Evolution (LTE)

1. Maravedis Survey, 2011.

2. Telecom Asia and Maravedis Survey, 2011IntroductionThe global mobile broadband industry is at the brink of unprecedented change with investments in Long Term Evolution (LTE) technology driving profitable new business models, partnerships and pricing plans.

LTE is the fastest ever growing network technology with worldwide subscriber numbers growing 428% between Q1 and Q2 in 2011.1 Investments into the development and operation of LTE networks are driven by vastly increased mobile data usage and widespread consumer demand for speed and versatility in line with the emergence of cloud computing, Machine-to-Machine (M2M) and other data hungry applications.

Significantly improved speed, scalable bandwidth, extended coverage and low latency differentiates LTE from existing HSPA (3G) technologies; giving mobile operators the opportunity to provide applications and services not currently viable on 3G network infrastructure.

Mobile broadband operators are using the introduction of LTE as an opportunity to develop improved business models to secure strong returns on network investments. For new business models to succeed, operators must develop solid relationships with device manufacturers, application developers and other industry players.

The nature of newly formed alliances will be determined by how operators intend to compete. There are a variety of value add options that operators will use to sell LTE services to consumers with the most obvious being to charge users for increased throughput speeds, or a premium for performance. LTE will also be positioned to leverage cloud based and Machine-to-Machine (M2M) services.

Device availability has been cited as the primary challenge for mobile operators with spectrum accessibility coming a close second.2 With network deployments utilising either FDD paired or TDD unpaired spectrums across a variety of frequencies in different market conditions, the success of network deployments will depend on the availability of access devices that can be customised to meet individual carrier specifications.

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LTE Technology

Long Term Evolution (LTE) technologies include: 3rd Generation Partnership Project (3GPP) LTE and LTE Advanced. 3GPP LTE represents the latest standard in mobile networking technology; while LTE Advanced is a 4th generation (4G) standard of radio technologies designed to increase the speed and capacity of mobile telephone networks.

LTE succeeds the UMTS / HSPA technologies currently used on 3G networks; promising vastly improved speeds and performance with theoretical delivery rates of up to 100Mbps download and 50Mbps upload.

Through the provision of high data throughput, low latency, improved coverage, simplified worldwide roaming, power and capacity, LTE will significantly improve the end-user experience while broadening community access to broadband services and devices. LTE networks will be of particular benefit to those living or working in areas not serviced by ADSL, cable or fibre.

In addition to providing advanced mobile broadband capabilities, LTE technology enhances existing services and allows for the introduction of new multimedia applications such as video.

Frequencies used are primarily 700, 800, 1800, 2600 MHz. The strong momentum towards deploying LTE in re-farmed spectrum, particularly 1800 MHz (i.e. LTE1800) is continuing.3

Operators can deploy LTE technologies to complement their existing networks, spectrum and objectives.

3. GSA Evolution to LTE report (August 31, 2011)

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TDD LTE & FDD LTEAccording to GSA, initial launches have all been made in LTE-FDD mode; commercial LTE TDD launches are targeted for 2011-2012.

LTE standards support both the Time Division Duplex (TDD) spectrum and Frequency Division Duplex (FDD) technology.

The broad difference between TDD and FDD is that TD-LTE uses TDD unpaired spectrum channels with a single carrier frequency to combine uplink and downlink transmissions, separating signals according to real-time demand. The FDD paired spectrum has two different carrier frequencies, one for uplink and another for downlink transmission.

Most LTE deployments in North America plan to utilise the FDD spectrum. Australia is set to become the first country to deploy an LTE network over the TDD spectrum which was designed to operate in harmony with TD-SCDMA.

3GPP combines LTE TDD and FDD standards – enabling ease of implementation. In both LTE FDD and TD-LTE the transmitted signal is arranged into subframes of 1 millisecond (ms) duration; and 10 subframes make up a radio frame.

Real time demand on mobile devices for uplink and downlinkTime Division Duplex (TDD)

TIMELINE

UPLINK

DOWNLINK

BAND

Uplink and downlink frequencies running simultaneously within a bandFrequency Division Duplex (FDD)

TIMELINE

UPLINK

DOWNLINK

BAND

Frequency 1

Frequency 2

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4. Alcatel-Lucent Bell Labs. Drivers for LTE deploymentAccording to GSA, network capacity, performance management and efficiency are the primary drivers of LTE with opportunities for new products, services and revenue growth fueling its uptake.

A global survey of operators conducted by Telecom Asia and Maravedis (2011) reported that well over half of the respondents surveyed specified an intention to sell value added LTE services to consumers with a focus on charging for increased throughput speeds and lower latency. While a large percentage indicated a willingness to experiment with different ideas such as cloud-based services to leverage LTE, a quarter of the respondents surveyed stated that they did not intend to price and package LTE services differently to 3G.

Mobile broadband operators are in the process of revising their approach to service packages with business models including:

• Charging for speed advantages over 3G

• Pitching LTE as a premium service over 3G

• Positioning LTE as a cost effective proposition

• Tiered service packages

• Unlimited data plan

More granular pricing plans help operators profit from new business models. Mobile operators are evolving from “all you can eat” plans to fixed-price plans where every gigabyte beyond the plan limit comes with an additional charge. This is helping improve revenue and margins, but it’s only an interim step. The next step is a per-click pricing model. With this approach, customers can download or access any content they want, whenever and however they want it, and be charged for their precise usage.4

According to Alcatel-Lucent, mobile operators are exploring various ways to profit from LTE network intelligence through the exposure of high-value network capabilities to application developers. Mobile operators can charge application developers when they incorporate high-value network capabilities (i.e. location, subscriber services and billing – in their app) to improve their position in the application and content value chain.

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Differentiating LTE

Peak data ratesLTE will provide theoretical speeds of up to 100Mbps downlink and 50Mbps uplink. High bandwidth video streaming and Machine-2-Machine (M2M) applications will benefit from considerably higher upload and download speeds and performance.

Increased peak data rates will provide users with speeds equivalent to those of a fixed line connection.

Extended coverageImproved cell edge data rates will benefit wide-area coverage.

LTE also addresses multipath and multiuser interference issues to improve mobility, power and performance.

Scalable bandwidthLTE offers scalable bandwidths, from 1.4MHz to 20MHz. New video-based services may only be possible using LTE which can deliver 3 to 4 times the bandwidth of a 3G network.

LTE networks deliver high definition (HD) video, HD video teleconferencing, and a host of other video-based offerings with exceptionally high quality of experience (QoE).

Low LatencyLTE user latency is significantly lower than in existing 3G technologies. This will enhance the user experience, particularly in multimedia and interactive application environments.

Multiple user supportThe two-dimensional resource scheduling capability of LTE allows for the support of multiple simultaneous users at any allocated time as opposed to the one-dimensional scheduling of 3G technology; thereby supporting the propagation of embedded wireless systems and applications.

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5. Market analysis - overview of the current LTE climate (Alan Hadden, President, GSA)

Evolving from HSPAMobile broadband is driving traffic, revenue and profit growth in markets worldwide.

HSPA laid the foundation of mobile broadband success. Mobile broadband began with WCDMA and first evolved with HSPA. Over the space of five years 100% of WCDMA operators have successfully deployed HSPA networks. This equates to 410 commercial HSPA networks in 162 countries and 1 billion mobile broadband subscriptions by end 2011. Today, 3,227 HSPA user devices have been launched in the market by 264 suppliers; and most operators include mobile broadband in their product offerings.5

July 18, 2011HSPA: cumulative network launches worldwide

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2005 2006 2007 2008 2009 2010 July 18, 2011

Source: GSA reports-HSPA Operator Commitments

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Migration to HSPA+ was the major trend in 2010 delivering higher capacity and performance and an improved mobile broadband user experience. Today, 33% of HSPA operators have launched HSPA+ on 136 networks; and 39 commercial 42Mbps DC-HSPA+ networks have been launched. GSA forecasts 170 commercial HSPA+ networks to be launched by the end of 2011.

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July 18, 2011

HSPA+: Commercial network launches

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3752

81

123136

May 09 Dec 09 Apr 10 Dec 10 Apr 11 July 18, 2011

Source: GSA surveys - Global HSPA+ Network Commitments and Deployments

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LTE commitments are advancing at a significantly higher rate than HSPA.

LTE operator commitments are developingfaster than for HSPA

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Source: GSA reportsHSDPA HSUPA

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HSPA+ LTE

12 months after 1st commercial launch

6 months after 1st commercial launch

LTE represents the next step of network evolution. The technology builds on HSPA and HSPA+ successes and will deliver significant mobile broadband performance gains and efficiencies to the mass market.

This progress will continue with the introduction of LTE-Advanced.

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LTE Devices

Modules

Tablets

Notebooks

PC Cards

Smartphones

Routers

Dongles

Source of data: Status of the LTE Ecosystem report-GSA: July 29, 2011

LTE Devices: 161 products by form factor

GSA has reported a 155% increase LTE devices in 6 months with 45 suppliers launching 161 LTE user devices globally. Routers top the list with dongles, modules, notebooks, smartphones, tablets and PC cards making up the remainder. Only a small percentage of the LTE devices launched are tuned to the 1800MHz spectrum to be used by Telstra and other Australian carriers.

There is currently high global demand for 1800MHz-ready LTE devices. Leading carriers attending the 2011 telecommunications summit in Amsterdam joined the global push for equipment manufacturers to start building routers for this spectrum.

Alan Hadden, President, GSA said ”Growing industry acceptance of the benefits of deploying LTE in 1800 MHz spectrum, which is increasingly supported by regulators and policy makers, confirm 1800 MHz as a core band for LTE globally.”

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LTE in AustraliaThe National Broadband Network (NBN) will give approximately 500,000 Australian homes and businesses the opportunity to receive the performance benefits of the first fixed-wireless LTE network to run on the TDD spectrum. NetComm Wireless will develop the Wireless Network Termination Devices (WNTD) designed to connect rural and regional Australian households and businesses to the 2.3GHz fixed-wireless LTE TDD broadband network to be built, and operated, by Ericsson.

Telstra plans to launch LTE at the end of 2011. Mike Wright, executive director of Telstra network and access technologies, said the carrier had deployed LTE 1800MHz dongles at mobile sites in Sydney, Melbourne, Perth and Brisbane. Re-use of the 1800MHz spectrum (which was initially used for 2G voice calls) will significantly minimise the costs associated with setting up new infrastructure.

LTE and Cloud ComputingCloud computing is facilitating a host of new opportunities for consumer, business and M2M applications. Cloud computing offers immense benefits to businesses lacking the time and resources to purchase, install, configure, secure and upgrade the hardware and software required for their marketing, customer relationship management, human resources, accounting and operational needs.

Operators formulating LTE value add packages have ranked cloud-based services at the top of the list with multiple device/SIM packages ranking a close second.6

LTE and wireless M2MThe M2M market has grown considerably over the past five years. M2M connections increased 68% from 2009 to 2010 and GSM subscriptions for M2M are forecast to reach 1.45 billion in 2016 (Source: Visiongain, 2011).

LTE technology will provide the bandwidth needed to help realise the potential of connected devices central to M2M services, applications and products. For consumers on the enterprise side, M2M has become an integral part of telematics, marketing, monitoring, the smart grid, manufacturing, security and healthcare.

LTE services promise a vast increase in data speed, and the ability for developers to produce more complex and content rich applications that require more data.7

6. Telecom Asia, Aug/Sep 2011, John C Tanner.

7. Visiongain, 2011

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NetComm Wireless and LTENetComm Wireless has developed products that optimise progressive LTE network speeds and capabilities while ensuring compatibility with existing HSPA, HSPA+ and/or EV-DO and TD-SCDMA services.

LTE technologies are customised to meet individual LTE specifications based on individual carrier needs. With network spectrums and frequencies varying between carriers and regions, NetComm Wireless tailors its LTE technologies to provide support for both FDD paired and TDD unpaired spectrum and the entire range of frequencies spanning 700, 800, 1800, 2600 MHz.

NetComm Wireless developed LTE WiFi Routers support worldwide roaming and have the capability to connect consumer, business and industrial users from anywhere within their Internet service provider’s coverage area.

ConclusionLTE represents a major advance in mobile broadband technology. It will enable operators to offer high-performance, mass-market mobile broadband services through a combination of high bit-rates and system throughput with low latency. LTE infrastructure is designed to operate across a wide variety of frequency bands; with support for both FDD paired and TDD unpaired spectrum. The technology supports flexible network configurations and will interoperate with existing technologies.

Mobile operators worldwide are competing to be among the first to offer innovative services on LTE networks for customer acquisition and retention. Returns on network investments will be realised upon the delivery of LTE access technologies specifically developed to meet individual network and market requirements.

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About NetComm Wireless

NetComm Limited (ASX:NTC) is a leading developer of innovative broadband products

for telecommunications carriers and ISPs worldwide. Specialising in fixed and mobile

broadband technologies, NetComm customises products to successfully deliver the

performance capabilities of world-leading carrier networks to home, business and

industrial applications.

Customer premises Equipment (CPE) and Edge technologies are specifically designed to

extend a reliable connection to fringe service areas globally. For 30 years NetComm has

engineered a solid portfolio of world-first data communication products and is today a world

renowned developer of HSPA+, LTE, machine-to-machine (M2M) and fibre access devices.

Headquartered in Sydney, Australia, NetComm has offices in New Zealand, Canada, Middle

East and Europe.

For more information about NetComm visit: www.netcommwireless.com

© 2012 NetComm Wireless Limited. Trademarks and registered trademarks are the property of NetComm Wireless Limited or their respective owners. Specifications are subject to change without notice. Images shown may vary slightly from the actual product. October 2012