Detecon Asia-Pacific Ltd.

5G Deployment & Monetization

Sharing Session
08 February 2023
Agenda

01 5G Market & Telco 2030

02 B2B & B2C

03 Technology move

2
5G Market
Potential
5G Market Potential

The demand for better and improved services is increasing as new use cases
are enabled by emerging technologies as well as customer demand

Connectivity demand requirements

Bandwidth Data Protection Network quality Seamless Security Easy to manage Ecosystem play

LEO

Places of network control - network data centres / edge

4
5G Market Potential

Technology adoption speed has increased with each generation, with 5G to

have 5.3bn subscriptions or 56.2% of total mobile subscriptions by 2028

Global mobile subscription (m) Adoption curve per mobile technology Penetration relative to peak penetration
per technology (%)
CAGR
36% 9.403 9.530 100
9.123 9.268
8.796 8.966 100
8.148 8.611
8.072
8.413 90
7.866 186 90
7.679 9 616 1.048
0 1.726 2.401 80
0 3.119 80
3.901
4.653
5.356 70
70
2.731
3.561 4.278 60 60
4.783
5.057
5.138 50
4.950 50
4.740
2.135 4.357 40 40
1.889 4.064
1.690 3.690 30 30
1.412 3.299
1.226 20
1.065
978
20
2.813 889
2.416 2.094 892 10
1.768 1.514 1.359
729 639 10
1.143 936 755
558
573 420 318 0 0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0 5 10 15 20 25 30 35 1995 2000 2005 2010 2015 2020 2025 2030
Historical Forecast
Years since first launch
2G Global 3G Global 4G Global 5G Global
5G 4G 3G 2G
2G 3G 4G 5G 2G Latin America 3G Latin America 4G Latin America 5G Latin America

§ 5G will be the fastest growing technology yet (with § 5G global adoption will be the fastest compared to § In LATAM, 2G, 3G, and 4G were launched ~3
a CAGR of 36% until 2028) previous generations years after global trendsetters did
§ 5G year 1 and 2 are actual historical data. From § Each generation, has a relative faster catchup
year 3 onwards it is forecasted

Source: Telegeography (2022), Omdia (2021)

5
5G Market Potential

Mobile network investments sit around $1.1 trillions between 2020 and 2025,
out of which 80% will come from 5G network rollout

Mobile operator capex-to-revenue by region forecast, 2020–2025 (bn) Highlights

2020
8
51
§ Globally, 5G capex as a share of total capex will increase from
Africa
9
19% in 2018 to 87% in 2025
2025 71
§ 5G requires operators to heavily invest in RAN, to increase
North America
Europe
$192bn 11
network densification and boost capacity
$303bn 2020 60
APAC LATAM § The distribution of core and RAN investments will vary by
13
$476bn 2025 77 region and country, depending on the core network
development level in each country and by each operator
Africa
33
Latin America $54bn 2020 169 § The main 5G investment drivers are:
$72bn Europe
30
2025 184

47
2020 271
North Spectrum Hardware
America 2025 49
316

190 2020
91 Software/
2020 417 Infrastructure
Global 968
APAC licenses
170 70
2025 1,156
2025 509

Total CAPEX (bn) Mobile Revenue (bn)

Source: GSMA Intelligence (2022)

6
5G Market Potential

Worldwide outlook: by 2028, 5G will account for over 50% of the global mobile
subscriptions, being APAC the largest contributor

§ 5G services generated $64bn globally in 2020, representing 7.6% of total 5G mobile subscription forecast, by region (m)
3,400
mobile service revenue. By 2026, it will generate $687.4bn, equivalent to 3,500
3,022 APAC
68.7% of total mobile service revenue worldwide 3,000
2,556 Europe
2,500
2,065 NA
§ By 2028 the total number of mobile 5G subscriptions will reach 5.4bn 2,000 1,625 LATAM
globally, equivalent to 56.2% of total mobile subscriptions worldwide 1,500 1,196
MEA
729
287 362
§ Asia will be the region with the highest growth, followed by Europe, and 500
458 152 219
6 0 151 1 3 13 42 88
North America 0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Total subscription by technology forecast (m) 5G revenue share of total share forecast ($bn)
CAGR
36%

8.966 9.123 9.268 9.403 9.530 700 70

8.611 8.796

Service revenue ($bn)

8.072 8.148 8.413

Service rev. % of total

600 60

mobile share rev. (%)

7.679 7.866
0 9 186 616 1.048 1.726
0 2.401 3.119 3.901 4.653 5.356 5G 500 50
2.731 3.561 4.278 400 40
4.783 5.057 4G
5.138
4.950 687
2.135 4.740
4.357
3G 300 602 30
1.889 4.064 509
1.690
1.412
3.690
3.299
2G 200 411 20
1.226 1.065 308
2.813 2.416 2.094
978 889 892 100 186 10
1.768 729
1.514 1.359 1.143 936 755 573 639 420 558 318 64
0 0 4 0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Historical Forecast 2018 2019 2020 2021 2022 2023 2024 2025 2026

Source: Telegeography (2022), Analysys Mason (2022)

7
Monetization
Challenge
Monetization Challenge

Softwarization and network disaggregation put pressure on telco providers as

hyperscalers, or hardware providers can potentially become competitors

Network disaggregation & sharing Network services as by-product

Cloudification allows the splitting of the physical The rollout of new data centers and the connecting
infrastructure layer from the network control layer which infrastructure – up to business customers premises -
enables new horizontal business players. provides the opportunity to sell that connectivity to business
user directly or to third parties.

Satellite Providers DIY-networks

Worldwide substitutional network layer for fixed access, Companies or municipalities build their own network
mobile access and aggregation / backbone networks and IoT infrastructure as it is seen as so critical to their core business
/ well being
Hardware suppliers
They used to be partners and still are, but network
disaggregation allows them to become competitors too.

9
Monetization Challenge

On the other hand, 5G not only improves on its previous generation, but also
brings in new capabilities and therefore new technical and business challenges

Mobile ARPU by technology Business challenges

80
¡ Challenges with monetization and business models, due to the new
60 2G
applications and services enabled by 5G
USD per month

3G
40 ¡ Competition from major hyperscalers like Microsoft, Amazon, and Google
4G
due to softwarization of network functions/features
20 5G
¡ Declining ARPU of mobile services and low revenue increase
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Cost challenges

Mobile service revenue by technology (bn) ¡ Investments in RAN and infrastructure for densification stemming from
high frequency limited radio propagation
+2%
944 966 985 1.000 ¡ Massive fiber network requirement, due to higher antenna sites well as
885 916
821 834 843 836 837 the increased network traffic
5G
4G
3G
Technical challenges
2G
¡ Increased complexity in planning, deployment and management of 5G
networks. E.g.:
— coexistence of 5G and legacy technologies
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 — managing network slices, and the dynamism enabled by softwarization and
virtualization
Source: Analysys Mason (2022)

10
Monetization Challenge

The monetization challenge stems from the plethora of new services enabled by
5G. Understanding ‘what to sell?’, ‘to whom?’, and ‘at which price?’ is key

§ What 5G services are offered? What is the value proposition?

Voice Network slicing Massive IoT

What?
Data Private network Fixed Wireless Access

§ To whom do we sell these services?

To whom?
B2C B2B Public

§ At which price do we sell these services?

At which
price?
By By By By
volume speed tier resources devices
connected

11
Telco 2030
Detecon’s Telco 2030 POV

Only an ecosystem of operators, hyperscalers and clever service solutions

will allow for wide digitization.
Manufacturing/
Computer Robotics Control
Vision Healthcare & Assistive
Massive Multiplayer Gaming
Assistive Life Sciences Maintenance (AR)
5G Mobile Gaming
y Automotive Content
Self-Driving Creation
Transport only IoT Swarm-Based Automobiles & Delivery
Smart Control
First
Responders 3-D Data
AR/VR/XR Air Traffic Visualization
Control & Modeling
4G
Water, Power
& Oil Utilities

Local content
IT Cloud Backbone RAN

Telco carrier
Core Telco Automated service
edge
assurance

Fixed Transport only

Access

Smart health Content Delivery Transport / QoS Demand

13
Detecon’s Telco 2030 POV

Detecon’s expert opinion on traditional telco shows that business models will
drastically change as vertical disintegration continues

Transformation of Carrier business models

Massive CapEx
putting efficiency
§ The business models will change profoundly
paramount in the next few years as vertical
Opp‘s Risks Assets disintegration continues
Demand Resources Networks
& Regulation Competition & Customers Digital Service § Three types of business models for telcos
arise respectively:
Orchestrator (DSO)
§ The Infrastructure Provider (IP)

Consolidation - Fragmentation - Focusing

§ The Digital Service Enabler (DSE)
Mobile
Telco Competition § The Digital Service Orchestrator (DSO)
Fixed Politics & Regulation § These developments can be attributed to
Telco Drivers & Digital Service five key drivers:
fields of Technology Enabler (DSE)
action
Integrated B2B
§ Industrial policy (Competition)
Telco § New regulatory frameworks (Politics &
B2C
Regulation)
§ Technological developments
Infrastructure (Technology)
Softwarisation Transformational process
accelerated by 3cs (climate, covid, conflicts) Provider (IP) § Changing customer needs (B2B)
disrupting market
entry barriers § Changing competitive environment for
telcos (B2C)

14
Operator Challenges

An increasingly competitive landscape till 2030

dictates some key lessons for telcos.
By 2030 only one or two
Drivers operators per market,
Consolidation, orchestration, automatization and efficiency as prices will keep getting the orchestration/
decreasing.
efficiency game right and
with a large customer base,
B2C
In the residential segment telcos need to play the efficiency game while cooperating will be able to survive
with providers of customer critical cloud-based solutions. as a fully-fledged
B2B
network operator
In the business segment telcos need to carve out niches, together with security/ -
software solution and/or integration specialist where they can really offer a USP all others will be pushed
to specific clients/needs.
into niches or into the arms
Regulation & Public of software players /
A new card and possibly a joker in this game, could be EU regulations requiring
Hypercalers and other large software companies to open their closed ecosystem. hyperscalers.
National regulation and public projects provide well connected providers with
the chance to sharpen the necessary skills required in the new environment.

15
Agenda

01 Telco 2030 & its competitors

02 B2B & B2C

03 Technology move

16
B2B
Customers
B2B

Telcos need to skillfully orchestrate their capability set in order to be

successful in the B2B arena.

B2B segments to play in Positioning in the market Operating model adaptation

Public, government and critical Emphasize orchestration capability Embrace and pioneer network
infrastructure industries and partner ecosystem instead of softwarization/cloudification to
mere connectivity prowess ensure efficiency

Industries in which the telco has Deliver a B2C like service Truly become a digital, software
an established vertical footprint experience & ease of use driven company in culture, mindset
and processes

B2B midmarket segment Realize additional revenue through Organize as agile, fluid company to
(emphasize local footprint, sales paid convenience or expertise add- adapt quickly to new requirements
& service proximity) on services

18
B2B

The share of revenue of the technology growth areas that can be addressed
by telcos in 2030 – Detecon expert opinion.
Telco revenue Growth
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% potential* rate
Quantum Computing Low Very high

Global Blockchain-Service-Market Low medium Very high

Global RPA Low Very high

SD-WAN High Medium Low

Artificial Intelligence (AI) for enterprise low high Medium

Intelligent industrial edge computing High Low Low

BI and analytics software application Low Low Very high

5G Services, incl. private cellular Very high Low

Private Enterprise Networks (VPN) High Medium

New RAN concepts Medium High

Augmented Reality (AR) Low Very high

OSS/BSS Market Low Very high

Big Data (Soft-, Hardware and Services) Low Medium Medium

Global Cybersecurity Spending medium High

IoT Revenue without Hardware Low Low High

Growth rate legend
*telco revenue potential (CAGR 2022-30):
Telco addressable business Hyperscaler Business Not adressable Legend (2030 revenue
in bn USD): high <5% - low high
<$20bn - low medium >15% - high medium
>$140bn - high low
19 low
B2B

Megatrends 2030 Multi-modal

and Use Cases.

Mobility
supported by
Establishing Edge Train
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Energy
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Computin Compu
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6G IoT Systems
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Production chain Development
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Industrialization Globalization Overpopulation Megacities
6 5 4 3 2 1 2 3 4 5 6
Use Case Tech Industry Response Effect Trigger Effect Response Industry Tech Use Case

Fluid Companies

* Tech: technology from the perspective of Telcos

* Industry: relevant industry for mentioned use cases 20
B2C
Customers
B2C Trends

Consumers will adopt increasingly immersive apps in several domains - QoS/

QoE requirements will grow - Future shape of related DBEs still unclear
Innovation towards increasingly immersive experiences Implications
Immersiveness
From stand alone applications
¡ Immersive experiences will complement today’s
to connected virtual worlds - digital experiences, some replacements to follow
Synchronous “metaverse” ¡ QoS/ QoE requirements in general as well as their
persistency variety will grow
New senses Communi- ¡ Consumers will fully adopt cloud-based services;
cation each user will hold multiple subscriptions
Real-time
interactiveness Commerce ¡ Selective adoption of new devices (AR/VR glasses,
Social wearables) and touchless user interfaces (voice,
Depth of 3D Video, Media
gesture, gaze). Smartphones to stay.
experience Gaming Events
¡ Shape of immersive digital business ecosystem(s)
AR, MR, VR (central/ decentral, closed/open, players) still
unpredictable.
Today 2030

Innovative Devices Touchless User Interfaces

Smartphones Smart AR glasses VR headsets 3D holographic Voice Gesture Gaze

foldable wearables displays (naked eye)

22
B2C Trends

In the domains Mobility, Health and Home digital services will satisfy lifestyle
and efficiency needs. The latter drive the integration of B2C and B2B DBEs.
Innovation towards larger and interconnected DBEs Implications

B2C/B2B ¡ Challenges due to urbanization, aging society and

climate crisis increase the demand for digital
Multi Modal
solutions in the domains of mobility, health and home
Autonomous
B2C B2B Mobility Driving ¡ New AI technologies for data analytics and automation
Multi Modal Autonomous increasingly generate respective value add
Mobility Driving
Smart Smart ¡ Lifestyle meets necessities, hence B2C and B2B
Home Grid merge; todays multiple isolated developments will
Smart Smart
Home Grid increasingly merge to larger integrated ecosystems.
¡ Again, a landscape of cloud-based services with a
Digital Smart Digital Smart
Health / Care Cities Health Care Cities large variety of QoS/QoE requirements will evolve.

Today 2030

Consumer IoT Business/Public

New Mobility Smart Home Assisted Autonomous Smart Cities Smart Grid
Ambient Living mobility (OEM) (Municipalities) (Utilities)

23
B2C – Customer Needs
The trends lead to new and heightened challenges across all CX dimensions,
any player in the digital must meet in order to succeed.
Sustainability
Climate neutrality has become a key buying criteria. Growth of
data, cloud solutions, and blockchain technology require a lot of
energy. Highest share of telcos’ carbon footprint (~70%), stems
from up/ down stream partners, which is difficult to manage.
Data Privacy & Security
Consumers expect their providers to guard their data privacy as
well as to guarantee highest data security. However, data are key
for digital business models (e.g. targeted advertising, automation,
personalization), therefore attract cybercriminals too.
Dimensions
Appreciation & Trust
Consumers expect honest, transparent and fair services (e.g., try
and buy, no fine print, clearly structured bills). Combined with
appreciation (e.g. guaranteed cash backs, status level/ loyalty
program) it will build trust, emotional bonding and loyalty.
Convenience
Intuitive and effortless use of (digital) services throughout the
customer journey remains the challenge of experience design.
Immersive applications, zero-touch interfaces and new features,
require new approaches. Interoperability
Network QoS - Ubiquitous and seamless
In/ outdoor connectivity with high QoS remains a challenge due to
the proliferation of devices and new high-bandwidth- and low
latency-hungry apps. Real-time and location-based apps in
mobile scenarios require seamless QoS across networks.
QoE Quality of Experience
QoE refers to users’ actual quality perception during the use of
digital services. It depends on parameters beyond network QoS
such as the device, cloud connectivity, application and the
CX users’ context.
in Digital
Business Choice & Flexibility
Consumers value a wide range of options to select from
(e.g. plans, devices, apps, movies in SVOD, payment
options), flexibly depending on changing needs.
Personalization & Context awareness
Products & services and customer care automatically or manually
adaptable to users’ individual needs and conditions at any given
time of service usage. New challenges arise with e.g.
augmented/mixed reality applications.
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Agenda

01 Telco 2030 & its competitors

02 B2B & B2C

03 Technology move

25
Strategic focus areas

Enhancing the customer experience in 2030 is a network enabled by platforms

that are fully automated which can be successfully monetized.
Grow in technology & business productivity Grow in customer experience
Manufacturing/ Edge and 5G
Offering Computer
Vision Healthcare &
Robotics Control
Assistive
campus
Massive Multiplayer Gaming
Network Slicing 5G Mobile Gaming Assistive Life Sciences Maintenance (AR)
y Automotive Content
Self-Driving Creation
Transport only IoT Swarm-Based Automobiles & Delivery
Smart Control
First
Responders 3-D Data
AR/VR/XR Air Traffic Visualization
Control & Modeling
4G
Water, Power
& Oil Utilities
Enabling Use
Providing Cases
Emmersive AR/VR

Content BSS Backbone RAN

Telco carrier
Connected Cars Core Telco Automated service
edge
assurance Demanding
& more.. Service
Digital Twin Fixed Transport only Assurance
Monetizing the Access (QoS)
Service

Content Delivery Transport / QoS Demand

Processing
Content at the
E2E automation Edge
and QoS Automation
assurance
Monetization

Source: 2021 TH strategy update

26
 The strategic goals of 2030 require action to increase the overall automation
maturity – by 2030 and should reach level 5 of automation maturity.

0 1 2 3 4 5
Level Level Level Level Level Level

Manual Management Assisted Management Partial Autonomous Conditional High Autonomous Full Autonomous
Networks Autonomous Networks Networks Networks

Goal for 2030

This level is the goal for telecom network evolution

System possesses closed loop Zero X* business capabilities are Creation of Autonomous Domains Intent-driven Interactions and to
automation capabilities across: available to end-to-end full lifecycle § Self-Operating/Closed Loop domains adjust the network to the business,
§ multiple services operations of any Autonomous § Collaborate via cross-automation service and resource intent
§ multiple domains Network services domains
§ the entire lifecycle § Expose network & services as a platform
Edge Compute Slicing Slicing based QoS Automated QoS

Enabling technologies NFV/virtualization Cloud alignment Cloudified BSS

Automation maturity levels Just major technologies examples
Disaggregation Legacy retirement

*Zero X: (zero wait, zero touch, zero trouble) experience: Deliver simplicity to the users
27
Telco becoming Software based.

Software Telco

Telcos have to lead a

generational change to Service Innovation & Re-design the
Technology Acceleration
become a software telco. Automation organization

The complete modus

operandi in terms of fixed
and mobile network buildout,
operating networks, ¡ Open architecture ¡ SW/HW Decoupling ¡ Roadmap ¡ New operating model
OSS contributor Network function transformation for new Agile organization
purchasing hardware and ¡ ¡
services
¡

Network Automation platform Up-skilling for new

software, managing the ¡
Service definition and
¡
disaggregation: ¡ Sustainable TCO ¡ requirements
technology ecosystem as — Fixed access reduction realization acceleration
¡ Process framework
well as employee upskilling — Open RAN ¡ RPA introduction ¡ Enable work loads and
¡ Customer centricity
applications
is on the move. — Core ¡ Network failure ¡ Short innovation time
Innovate by
Partnering is key ¡ 5G, network slicing,
automation ¡
partnering in the
to stay competitive edge computing ¡ Slicing automation entire ecosystem
Satellite co-operation ¡ API
¡ ¡ 5G campus, QoS
¡ Operate QoS ¡ AI / ML based services
Future Picture – the network as part of the product

28
The new telco factory must provide four central
capabilities for future success.

Be innovative, Increase flexibility

fast & simple & individuality

Use open source, build developer

Customize products, address
communities, introduce multi
vertical solutions, modularize
vendor sourcing, set up
portfolio, differentiate qualities, …
Ecosystems, use global scale, …

Increase efficiency
Sustainability
& being competitive

Automate processes, optimize staff Set ESG targets, optimize energy

& skills, define core value creation, consumption, centralize
use managed services, optimize production, offer services to
CAPEX allocation, … enable sustainability, …

Technology

29
Thank you.

Falk Schröder

Mobile: +49 171 551 8452

Email: Falk.Schroeder@detecon.com

Thomas Kessler

Mobile: +66 84 5557366

Email: Thomas.Kessler@detecon.com

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