4G Mobile Broadband Commercial Strategies For Faster Return On Investment in Asia-Pacific

MarketLine Case Study
4G Mobile
Broadband
Commercial strategies for faster
Return on Investment in Asia-
Pacific
Reference Code: ML00022-030
Publication Date: June 2016
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4G mobile broadband: Commercial strategies for faster Return on Investment in Asia-Pacific ML00022-030/Published 06/2016
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OVERVIEW
Catalyst
4G services are exhibiting strong growth in Asia-Pacific, although there are marked differences between the region's
developed and developing markets. Operators are eager to exploit the plentiful growth opportunities on offer and this
case study looks at exactly what those opportunities are, and examines the commercialization strategies players are
adopting.
Summary
 4G services are increasingly gaining ground across Asia-Pacific, with steeper growth rates in emerging
countries compared to developed markets. Despite challenges including the shortage of spectrum and the high
cost of 4G network roll-out, operators are investing in 4G in order to boost data usage to overcome declining
revenues from voice services.
 Operators in the Asia-Pacific region adopt commercialization strategies for their 4G services based upon market
demographics for client segmentation, suitable devices, appropriate pricing strategies and promotional
campaigns to raise awareness and optimal use of distribution networks.
 In developed Asia-Pacific markets, operators are aiming to monetize 4G services by introducing large data
bundles. On the other hand, operators in emerging markets are increasingly bundling devices, VAS and OTT
content services to accelerate the adoption of 4G services.
 Operators in both developed and emerging markets are developing online stores to market their 4G offerings. In
emerging markets, operators largely rely on physical stores to boost adoption in rural areas, where personal
assistance plays an important role in driving adoption of new services.
 With rapidly increasing competition, the quality of services and unique selling points become important success
factors for operators to increase their 4G subscriber base. For example, MNOs with large networks market their
quality of service capabilities (e.g., Telstra in Australia), while new 4G operators with smaller networks focus
their marketing campaigns on affordability and value-for-money (e.g., Airtel in India).

TABLE OF CONTENTS
Overview ............................................................................................................................................................................. 2
Catalyst............................................................................................................................................................................ 2
Summary ......................................................................................................................................................................... 2
4G growing in APAC thanks to smartphones, but spectrum shortage remains hindrance .................................................. 6
4G mobile subscriptions penetration to reach 44.6% 2020.............................................................................................. 7
Smartphone sales to account for over 85% of total handset sales by 2020 in APAC ...................................................... 7
Shortage of spectrum hinders growth of 4G technology, some countries considering refarming spectrum for more
efficient use ..................................................................................................................................................................... 8
Regional mobile operators increasingly rolling out 4G networks across APAC ............................................................... 9
4G commercialization strategies vary ............................................................................................................................... 10
Client segmentation: Operators should develop products and services to target three key segments .......................... 10
Product strategies: Operators offer devices at discounted prices with data plans to boost adoption ............................. 11
Operators price their 4G services based on market conditions, competition, and customers’ willingness to pay .......... 11
Promotion strategies: Operators provide 4G information on their websites to increase service awareness and adoption
...................................................................................................................................................................................... 12
Distribution strategies: Operators use online channels to market their services, but retail stores remain more useful in
rural areas where subscribers need technical guidance ................................................................................................ 13
Commercialization strategies in action .............................................................................................................................. 15
Telstra Australia ............................................................................................................................................................. 15
Client Segmentation: Targets all key segments in Australia with range of products and services ............................. 15
Telstra capitalizes on its robust network by charging relatively high prices for its 4G services .................................. 15
Telstra distributes 4G services through an online store and a network of retail outlets across Australia ................... 16
KT a leading playing in South Korea thanks to innovative services, data-centric plans, and effective promotion.......... 16
KT targets customers with new innovative products and services ............................................................................. 16
KT offers data-centric plans, LTE broadcast services and launch new technology combining WiFi and LTE ............ 17
KT focuses on the high speed of its 4G services, while providing membership plans for existing customers ............ 18
Reliance Jio gaining a strong foothold in India .............................................................................................................. 18
Jio signs many infrastructure sharing agreements for faster roll-out of its services ................................................... 18
Jio to enter the 4G market with a range of services including own smartphone brands and various applications ..... 18
Jio joins hands with several vendors for 4G devices and distribution, also plans to use own retail stores for
distribution.................................................................................................................................................................. 19
NTT DoCoMo targets early adopters via promotions in one of the world's most developed telecoms markets ............. 19
NTT aims at aggressively promoting 4G services to take advantage of early adopters ............................................. 20
NTT launches promotions and provides free OTT services to attract subscribers ..................................................... 20

Conclusions....................................................................................................................................................................... 21
Good commercialization strategies can help companies capitalize on a growing market, particularly in emerging
economies ..................................................................................................................................................................... 21
Appendix ........................................................................................................................................................................... 22
Definitions ...................................................................................................................................................................... 22
Sources ......................................................................................................................................................................... 22
Further Reading ............................................................................................................................................................. 22
Ask the analyst .............................................................................................................................................................. 23
About MarketLine .......................................................................................................................................................... 23
Disclaimer ...................................................................................................................................................................... 23

LIST OF FIGURES
Figure 1: Mobile subscriptions by technology, Asia-Pacific ................................................................................................. 6
Figure 2: 4G subscription penetration 2015 and 2020 ........................................................................................................ 7
Figure 3: Total mobile handset sales in Asia-Pacific, 2014-2020 ........................................................................................ 8
Figure 4: Mobile handset sales distribution in Asia-Pacific, 2014-2020 ............................................................................... 8
Figure 5: 4G spectrum features ........................................................................................................................................... 9
Figure 6: 4G spectrum allocation in APAC countries .......................................................................................................... 9
Figure 8: Asia-Pacific demographics, 2014 ....................................................................................................................... 10
Figure 9: Client segmentation examples with accompanying services .............................................................................. 10
Figure 10: DiGi Malaysia promotion for 4G-enabled device .............................................................................................. 11
Figure 11: Pricing strategies.............................................................................................................................................. 12
Figure 12: Price comparisons for 4G and fixed broadband services in Asia-Pacific.......................................................... 12
Figure 13: Key questions to answer in 4G promotions ...................................................................................................... 13
Figure 14: Popular distribution channels according to market maturity ............................................................................. 14
Figure 15: Telstra's 4G plans, 2016 .................................................................................................................................. 15
Figure 16: Telstra's retail store network, 2016 .................................................................................................................. 16
Figure 17: KT's LTE data-centric plans, 2016 ................................................................................................................... 17
Figure 18: Growth in KT's LTE subscriber base ............................................................................................................... 17
Figure 19: Group voice and video call feature on Jio chat................................................................................................ 19
Figure 20: NTT data volume before being switched to 128kbps connection ..................................................................... 20

4G GROWING IN APAC THANKS TO SMARTPHONES,
BUT SPECTRUM SHORTAGE REMAINS HINDRANCE
4G is still underdeveloped in Asia as a whole, although it should be noted that large differences exist between the
region's developed and developing economies. As a result, there is much scope for growth and 4G subscriptions are
increasing at impressive rates, thanks largely to the enabling effect of soaring smartphone sales. Network operators are
rolling out new 4G networks, but while growth is impressive, it is still limited by a spectrum shortage that is causing some
countries to consider refarming spectrum for more efficient use.
4G to account for nearly 40% of mobile subscriptions by 2020

Mobile subscriptions by technology are disparately distributed between developed and emerging Asian countries.
Developed countries including Australia and South Korea boast high 4G penetration, while 2G/2.5G and 3G are the
dominating technologies in emerging countries such as China and India. However, the common trend across Asia-Pacific
is the increasing adoption of 4G services. 3G/3.5G and 4G subscriptions will grow at CAGR of 11.5% and 25.1%,
respectively, over 2015-2020. Furthermore, countries like Australia and Singapore are planning 2G network shut down,
which will further drive 4G adoption.
4G subscriptions will grow at a faster rate in the emerging countries. Operators in the emerging markets are focusing on
expanding the coverage and ensuring the affordability of 4G services. The availability of low-cost 4G devices will fuel
growth in these markets.
In developed Asian markets, operators are focusing on improving the quality of service - e.g., coverage and data speeds.
There are also opportunities through M2M/IoT deployments, smart cities, connected devices and other data intensive
applications to further increase the service monetization.
Figure 1: Mobile subscriptions by technology, Asia-Pacific
SOURCE: Pyramid Research MARKETLINE

4G mobile subscriptions penetration to reach 44.6% 2020
Pyramid Research forecasts 4G subscription penetration in Asia-Pacific to reach 44.6% in 2020, up from 15.2% in 2015.
This will be driven by operators needing to grow mobile data revenue while meeting the demands for high-speed
broadband services. This includes providing users with access to the Internet in rural areas where there is a lack of fixed
network access.
Figure 2: 4G subscription penetration 2015 and 2020
Smartphone sales to account for over 85% of total handset

sales by 2020 in APAC
Total smartphone sales in APAC are forecast to increase at a CAGR of 5.5% between 2015 and 2020 (outpacing the
overall handset growth of 2.3%). The growth is mainly driven by emerging markets since the smartphone adoption is
already high in developed countries. For instance in Taiwan, Singapore and Australia, smartphone sales accounted for
94.4%, 91.5% and 86.4% respectively, of total sales in 2015.
In emerging markets, smartphone adoption is comparatively low, with smartphone sales accounting for 39.8% and 54.9%
in India and Indonesia, respectively in 2015. However, availability of affordable smartphones, expanding coverage and
rising income levels are supporting the growth of smartphones in the emerging markets.
In Myanmar, consumers are leapfrogging to smartphones after the entrance of two operators – Telenor and Ooredoo – in
2014, ending MPT’s monopoly. The availability of mobile data services (3G, HSPA) and low cost handset has fueled
growth of smartphone ownership. In 2015, 58% subscribers in Myanmar were on a 3G/3.5G network and 88% of handset
sales were smartphones.

Figure 3: Total mobile handset sales in Asia-Pacific, 2014-2020
Figure 4: Mobile handset sales distribution in Asia-Pacific, 2014-2020
Shortage of spectrum hinders growth of 4G technology, some

countries considering refarming spectrum for more efficient
use
The biggest areas of concern hindering the growth of 4G in APAC are the shortage of spectrum and high cost of
deployments. Lower frequency bands (below 900MHz) will enable delivery of cost-efficient coverage to greater land
areas, while high frequency bands will enable offering greater speeds but with lower coverage capability, thereby
increasing the cost of coverage. In APAC, many operators have been using higher frequencies (1800MHz and above) to
deliver 4G services. However, in countries such as South Korea operators have deployed 4G networks in both higher
and lower frequencies. Indonesia and Japan are committed to utilize 700MHz band for 4G to ensure affordability for
users.
Another solution to the spectrum shortage is refarming existing spectrum; Thailand and Malaysia are looking at this
option.

Figure 5: 4G spectrum features
Figure 6: 4G spectrum allocation in APAC countries
Regional mobile operators increasingly rolling out 4G

networks across APAC
Mobile 4G services have been commercially launched in several countries across APAC by a variety of players, including
regional mobile operators and data-only providers.
Countries with mobile 4G services are relatively mature in terms of mobile subscription population penetration and have
operators with strong financial support for network investments.

4G COMMERCIALIZATION STRATEGIES VARY
Understanding components of commercialization strategies can support operator efforts to acquire 4G subscribers in
their local markets. The strategies used can be split into client segmentation, product strategies, pricing strategies,
promotion strategies, and distribution strategies.
Client segmentation: Operators should develop products and

services to target three key segments
Young and tech-savvy consumers are a crucial segment in emerging markets, where 31% of the population is under 14
(versus 15.7% in developed markets). Operators should consider offering data bundles designed for social networking
and OTT (video, music streaming etc.). For example, Vodafone Australia allows music streaming from the OTT app
Spotify to 4G users at discounted rates. A large portion of the population (nearly 58%) in emerging APAC lives in rural
areas, making network deployment essential in these areas.
A residential strategy involves replacing fixed-broadband with 4G, like offering households with the option to subscribe to
a cheaper 4G plan allowing multiple devices to connect. In Indonesia, niche operator Bolt! launched 4G services in
central Jakarta in order to take advantage of the poor fixed-line infrastructure in the city by providing service through Wi-
Fi dongles to residential customers.
Enterprise: 4G provides the QoS required for enabling a mobile workforce (e.g., field force and remote health workers).
Wireless access to data networks is another area where operators can offer faster service provisioning or a backup link.
4G will help support IoT, M2M etc. Operator examples include Telstra and Indosat.
Figure 7: Asia-Pacific demographics, 2014
SOURCE: World Bank MARKETLINE
Figure 8: Client segmentation examples with accompanying services

Product strategies: Operators offer devices at discounted
prices with data plans to boost adoption
Devices: One element that contributed to the success of 4G in the South Korean market is the availability of devices that
match operators’ network capabilities. Availability of 4Genabled devices like smartphone, dongles and modems/MiFi are
crucial to the success of 4G. Increasing PC and IPTV penetration levels in the APAC region are inducing demand of
devices other than smartphone (like dongles, modems, MiFi etc.) for residential usage. Operators like Telstra in Australia
and Digi in Malaysia are offering devices at discounted prices with their 4G starter packs.
Data bundles: Operators in the developed Asian markets, which feature strong demand for online media streaming and
social media applications, offer larger data allowances. For example, Korean operator LG Uplus offers bundles of
unlimited packages starting from $57.70 (KRW68,000) per month. On the other hand, operators in emerging markets are
bundling devices (e.g., smartphones and tablets for personal use and dongles, MiFi etc. for residential use) with their
LTE plans to boost adoption, as being done by U mobile in Malaysia.
Value-added services (VAS): Operators are also developing a variety of VAS offers including OTT video services, music
streaming, roaming services and services for online gaming.
Figure 9: DiGi Malaysia promotion for 4G-enabled device
SOURCE: DiGi MARKETLINE
Operators price their 4G services based on market conditions,

competition, and customers’ willingness to pay
Although 4G services were launched with premium pricing by some operators in the APAC regions, the trend has been
changing to drive adoption of the services. Operators are now selecting their pricing strategies based on several factors
such as the market conditions, disposable income of users, customers’ willingness to pay for quality etc. Where premium
pricing leads to direct monetization, non-premium strategies derive monetization through more data usage.

Some operators in developed APAC markets selected premium pricing for LTE services, as subscribers in these markets
are not only willing to pay more for better quality, but are also selecting higher-end data packages.
Another alternative introduced by operators is data-sharing plans for the indirect monetization of 4G services. These
plans allow subscribers to connect multiple devices, leading to more data usage. Some operators in emerging markets
are offering 4G services with a little or no difference from 3G prices. Operators are also using promotional pricing
strategies such as offering discounted access for specific services (e.g., OTT video) for further boosting data ARPS.
Figure 10: Pricing strategies
Pricing strategies should also take into account prices charged by competitors and fixed broadband connectivity. We find
that prices for 4G services are higher than fixed services.
Lower prices are a crucial factor to gaining subscriber market share in several emerging markets. Operators are targeting
those markets by making available modems/dongles/MiFi for residential use.
Figure 11: Price comparisons for 4G and fixed broadband services in Asia-Pacific
Promotion strategies: Operators provide 4G information on

their websites to increase service awareness and adoption
Operators are highlighting the advantages of 4G technology over 3G in terms of speed and quality. Additionally, a few
operators have launched dedicated online pages for marketing and promotion of 4G services. For instance Korean
operator LG Uplus’ website explains (through graphics) the time required to download songs, mentions about 4G
connectivity speeds, differences between LTE, LTE-A, Wideband LTE etc.
Operators also use marketing campaigns to boost subscriber base for existing products and services as well as advertise
unique selling points of new 4G services.

For instance, Australian operator Optus gives information about superiority of 4G over 3G networks, speed and coverage
of its 4G network, data plans etc.
Regular promotional campaigns are another strategy that operators use to stimulate the interest of subscribers in 4G
services. The offers largely focus on free data offers or discounted access to OTT services. Indonesian mobile operator
Telkomsel offers access to Disney Movie content through Moovigo application to its 4G subscribers only.
Figure 12: Key questions to answer in 4G promotions
Distribution strategies: Operators use online channels to

market their services, but retail stores remain more useful in
rural areas where subscribers need technical guidance
Operators in APAC initially used online channels to create awareness about their 4G service and drive adoption.
Additionally, they also leverage their established direct and indirect sales channels to expand reach of their services.
Direct channels include operator’s retail stores and kiosks, indirect channels include authorized dealers and informal
resellers. The suitability and success of sales channels is determined by market characteristics, for instance, physical
stores are more appropriate to accelerate adoption in rural areas where people tend to visit retail stores for technical
guidance.
Retail PoS: Physical retail sites play an important role in emerging markets in Asia Pacific as users not only go to local
kiosks for tech support but retailers can also guide users regarding 4G connectivity features and benefits, thereby driving
adoption. To ensure significant uptake through this channel, operators need to support the training of staff and resellers
on the adoption and benefits of 4G.
Online PoS: The growing e-commerce market in Asia Pacific is resulting in operators developing partnerships with third-
party companies to sell devices. For example, in India Airtel has partnership with the local e-commerce provider Flipkart
to sell devices with 4G SIM cards.

Figure 13: Popular distribution channels according to market maturity

COMMERCIALIZATION STRATEGIES IN ACTION
Companies across the region are employing commercialization strategies from client segmentation to product strategies,
and from pricing strategies to distribution strategies. This section analyzes some examples in action from powerhouses
such as Telstra, KT, Reliance, and NTT DoCoMo.
Telstra Australia
Telstra has used a number of different strategies, targeting all segments by offering a spectrum of pricing and service
options.
Client Segmentation: Targets all key segments in Australia with range of products
and services
4G mobile technology accounted for nearly 55% of the total mobile subscriptions in 2015 in Australia. In February 2016,
the Australian Communications and Media Authority (ACMA) auctioned spectrum in 1800MHz band, aimed at improving
4G coverage in remote areas. Operators are focusing on LTE expansion and bolstering network capacity to drive wider
4G adoption. Pyramid Research estimates 4G subscriptions to increase to nearly 85% of the mobile subscriptions by
2020.
Telstra offers fixed, mobile, Internet and TV services. It moved very quickly into LTE partly to avoid network congestion of
its HSPA. Telstra is keen on moving its remaining 2G subscribers to 3G/4G networks as it plans to shut down its 2G
network by 2016-end. The quality of network–coverage, data speed and reliability–remains a key selling point for Telstra.
Telstra capitalizes on its robust network by charging relatively high prices for its 4G
services
Telstra’s services bear a relatively higher price tag compared to competitors in the market – a premium for higher quality
of service. Another key differentiator is the breadth of services it offers to consumers and enterprises. It has been
investing into networks to prepare itself for the next level of services such as IoT, eHealth etc. to expand its reach into
new sectors such as healthcare, energy etc. It has undertaken several initiatives including nearly 15 acquisitions,
partnerships, investments and distribution agreements over 2014-2015 to strengthen its position in the eHealth market.
Telstra offers mobile broadband plans as well as devices with an option to repay on monthly basis. It offers 4GX service,
which doubles the 4G bandwidth from the 700MHz band, causing improved coverage and speed in buildings and rural
areas, compared to regular 4G. The devices, such as Telstra 4GX USB + WI-FI plus, Telstra WI-FI 4G Advanced III and
Advance pro - allow users to connect 5-15 Wi-Fi enabled devices such as smartphones, laptop etc. It also uses
promotional offers to stimulate 4G take-up. For instance it offers 1GB of extra data for a discounted price of $7.50
(AUD10) to its 4G users. In 2015, it came out with an offer providing six-month free subscription to the Presto TV and
movie streaming service with its mobile data plans. Another promotion includes free Wi-Fi service over 300,000 Telstra
Air hotspots across Australia for its eligible mobile data users.
Though other operators are gaining popularity among budget-users, Telstra remains the preferred service provider for
premium users, helping to maintain its leading position.
Figure 14: Telstra's 4G plans, 2016
SOURCE: Telstra MARKETLINE

Telstra distributes 4G services through an online store and a network of retail
outlets across Australia
Telstra’s promotional offers mostly include value-added services for free or at a discounted price. The operator offers 12-
months free membership to Apple Music with select 4G mobile broadband plans. The strategy helps attract new
subscribers and increase mobile data usage. Telstra reported that its mobile service revenue increased by 7.2% year-on-
year for the year ended on June 30, 2015 due to rising mobile data usage.
Telstra has a network of 371 retail stores across Australia to provide face-to-face services. The operator also leverages
its online store to sell devices and data bundles, and also enables customers to manage their subscriptions online.
Telstra’s 4G network covered 96% of the Australian population at the time of writing this report. It aims to expand the
coverage to 99% by June 2017. The network expansion enabled the operator expand its 4G service adoption. Telstra
reported a total of 8.9m 4G devices on its network in December 2015. It announced plans to launch the world’s first
1Gbps mobile network along with compatible devices in 2016. It also plans to introduce voice-over-Wi-Fi (VoWiFi) and
video-over-LTE (ViLTE) in 2016. Telstra is currently rolling out LTE-broadcast technology which enables broadcast of
high-quality videos on mobile phones.
Figure 15: Telstra's retail store network, 2016
SOURCE: Telstra MARKETLINE
KT a leading playing in South Korea thanks to innovative

services, data-centric plans, and effective promotion
KT is a leading player in South Korea, the world leader in terms of adoption of 4G services. It has achieved this position
by offering cutting edge services and products and successfully pushing its data-centric plans.
KT targets customers with new innovative products and services

South Korea leads the world in terms of adoption of 4G services, with penetration forecasted to grow from 76.5% in 2015
to 97.5% by year-end 2020. The rapid growth of 4G technology is driven by high penetration of smartphones and
investment in LTE networks by operators, including 300Mbps LTE-A and future 5G deployments. Pyramid Research
estimates smartphones to account for 96.3% of total mobile phones sold in 2020, up from 87.1% by the end of 2015.

KT aims to boost its mobile service revenue by venturing into next-generation IoT/M2M market. It is also focusing on
customer retention through differentiated products and services, for example, a smart energy management solution KT-
MEG and portable security dongle Wiz Stick. KT has plans for nationwide expansions of its super-fast GiGA services
including GiGA internet, GiGA Wi-Fi and GiGA LTE.
KT offers data-centric plans, LTE broadcast services and launch new technology
combining WiFi and LTE
KT is the second largest telecom operator in South Korea after SK Telecom. KT offers most of its services at relatively
lower prices than SK Telecom. It has the widest Wi-Fi coverage in the country and well-organized data plans to suit
different users.
KT places a significant emphasis on data services to better compete in the fierce Korean market. It launched unlimited
LTE plans in Q2 2014 for a fixed monthly fee. Similarly in Q2 2015, KT introduced more granular data plans ranging from
300MB (for $25.40 or KRW29,900) to 30GB (for $84.70 or KRW99,900) per month, giving users more options.
In January 2014, KT became the first operator in the world to launch commercial LTE broadcast services. The service is
particularly useful in high human traffic areas such as sports stadiums and concert halls. Again in 2015, KT emerged as
the first operator to commercialize GiGA LTE network, combining GiGA Wi-Fi and LTE mobile technologies which is
capable of providing speed of up to 1.17Gbps.
The operator’s offerings also include smartphone devices, tablets, used mobile phones, wearables etc. and IoT services
for business segments.
Figure 16: KT's LTE data-centric plans, 2016
SOURCE: KT MARKETLINE
Figure 17: Growth in KT's LTE subscriber base
SOURCE: KT MARKETLINE

KT focuses on the high speed of its 4G services, while providing membership plans
for existing customers
Korea Telecom’s 4G promotion strategy is based on highlighting the download speeds along with affordability of
packages in comparison to other competitors. KT was the first operator to launch data-centric plans which allows
subscribers to select a LTE package based on their data requirements without having to pay anything extra for calling
and texting. Usage over the limit is being charged at excess data rate until the end of billing period.
KT provides membership plans, offering additional discounts to strengthen its postpaid customer base as well as several
promotions are launched often to attract new subscribers.
The operator has a dedicated website, Olleh Shop, to market and sell its services. Subscribers can browse through plans
including bundles and devices such as smartphones, Wi-Fi routers etc.
KT’s prepaid services are also available at retailers like 7- Eleven, GS25, CU and By the Way. Its flagship “Global
Stores” are located at airports and key points in Seoul, Daegu and Daejeon. These stores have translators to provide
services in English, Chinese, Japanese, German and Vietnamese. KT also rents smartphone, Wi-Fi and Mifi (WiMax-
based) routers for those travelling in the country for a limited period through these Global stores.
Reliance Jio gaining a strong foothold in India

The ecosystem for the development of 4G services in India is still at a nascent stage and Reliance Jio is looking to
exploit this with a commercial launch of its 4G services in 2016. It has partnered with leading retailers to boost sales of
devices and services.
Jio signs many infrastructure sharing agreements for faster roll-out of its services
The ecosystem for the development of 4G services in India is still at a nascent stage. However, increasing smartphone
penetration and rising popularity of high bandwidth services indicate a huge potential for the 4G services. We estimate
smartphone sales will constitute 71.7% of the total mobile phone sales in 2020, against 39.8% in 2015. Airtel was the first
telco to launch 4G services in 2012, followed by Aircel (July 2014) and Vodafone (December 2015).
Reliance Jio Infocomm has a pan-India BWA license and plans full-fledged commercial launch of its 4G services in 2016.
Jio has entered into several infrastructure sharing agreements with MNOs and independent tower companies to enable
faster roll out and reducing capex. While Jio is lagging competitors in launching 4G, it is set to be a game changer
through service innovation by bundling connectivity and content.
Jio to enter the 4G market with a range of services including own smartphone
brands and various applications
Reliance Jio launched its first product, a chat application called Jio Chat in April 2015 and is preparing for more ancillary
offerings in 2016. The chat application has many features like doodling, group calling etc. that are not offered by other
popular applications in India such as WhatsApp, Viber, We Chat etc. Jio Chat, unlike other applications, allows delivery
of messages in SMS format to unregistered users.
Reliance is designing its products, keeping in mind the extremely competitive nature of Indian telecom market. It plans to
position itself as a digital content company offering end-to-end solutions and applications for various domains including
communication, education, financial services, entertainment, healthcare, security and government-citizen interfaces. For
instance the television application ‘Jio Play’ will provide television channels with option of recording to watch later.
Reliance also has plans to launch VoLTE, VoWiFi and LTE broadcasting services.
It has already started shipping its own 4G-VoLTE capable smartphone brand called LYF, MiFi devices and 4G SIM cards
across metro cities. Its MiFi devices will be capable of connecting up to ten devices. It also plans to offer its own 4G SIM
card with LYF 4G handsets.
Considering that affordability is a key concern of Indian consumer, it aims to provide cost-effective services to expand its
reach.

Jio Chat application is available for free to users, only having to pay for data. It also plans to allow subscribers watch five
movies a month or one live cricket match without charging anything for data download.
Jio joins hands with several vendors for 4G devices and distribution, also plans to
use own retail stores for distribution
Jio, being a new player in the already mature market, is aiming to increase visibility. The strategy will help the operator
boost take-up of its services after its full-fledged commercial launch, expected in the latter half of 2016.
In January 2016, it launched a promotion offering free movie tickets for a Bollywood movie “Jugni the film” to users who
install Jio Chat on their smartphone.
It has appointed 50 customer acquisition and relationship managers who have been building teams to attain a target of
100m registered users before the end of 2016.
Reliance has launched free Wi-Fi hotspot services in many cities including Bhubaneswar, Ahmedabad, Mussoorie,
Lucknow, Baroda, Surat and Kolkata with an aim to increase its user base by letting them experience high-speed data
service before its commercial launch. It was also selected to provide Wi-Fi facilities at six cricket stadiums for T20 Cricket
World Cup in 2016. It will also help it to better compete with incumbent BSNL, which has been aggressively installing Wi-
Fi hotspots in many locations.
Reliance offers its Jio chat service through Android and iOS application stores. However, its plans to provide the chat
application preloaded with its connections post launch.
The company has also been creating a client application in order to connect devices with its network in an optimized
manner as users can face technical issues in connecting with the network on three different frequencies.
It will also use its own chain of Reliance Retail to sell LYF smartphones. It has signed distribution deals with handset
manufacturers such as LG, Micromax, Lenovo, ZTE etc. Some companies like Huawei, ZTE and Alcatel OneTouch will
also provide Wi-Fi routers, MiFis and dongles to use the telco’s 4G services for residential customers and small and
medium size enterprises.
Figure 18: Group voice and video call feature on Jio chat
SOURCE: Jio MARKETLINE
NTT DoCoMo targets early adopters via promotions in one of

the world's most developed telecoms markets
NTT is one of Japan's largest telecoms services providers and continues to aggressively pursue LTE subscribers in one
of the world's most developed telecoms markets by promoting extensive data plans with specific price bands.

NTT aims at aggressively promoting 4G services to take advantage of early adopters
NTT offers an extensive list of billing plans, mostly focusing on data. Xi billing plans are specifically designed for LTE
subscribers. NTT packages are the cheapest below 3GB. NTT’s plans are more expensive compared to other operators’
plans over 3GB, mainly because it does not offer intra-network free calls and SMS service like its competitors – KDDI
and Softbank.
NTT offers flat-rate data plans of 3GB and 7GB, after which it reduces the transmission speed to a maximum of 128 kbps
until the end of the subscription period. NTT also offers an option to cancel the 128 kbps limit by paying $20 (YEN2,500)
per 2GB for normal transmission speeds.
NTT also offers its own smartphones along with handsets from vendors such as Samsung, Apple, Sony etc.
The operator has 4G data sharing plans designed specifically for family member and corporate users. NTT plans to
deploy 18,000 LTE base stations in 2016.
Figure 19: NTT data volume before being switched to 128kbps connection
SOURCE: NTT MARKETLINE
NTT launches promotions and provides free OTT services to attract subscribers
NTT DoCoMo sells its products and services online, through distributors and its own DoCoMo shops. There are about
2,400 DoCoMo shops across the country.
Soon after the launch of its LTE-A network in Japan, NTT announced the variants of mobile handsets that were
compatible to support data speeds of up to 225 Mbps. For instance the variant of the Samsung Galaxy S6 Edge offered
by NTT is equipped with LTE-A. The move helped the operator accelerate adoption of its LTE services. It also offers
other LTE-A enabled devices such as iPad Air and Retina iPad mini.
In 2014, the operator started offering LTE roaming services in order to enhance the experience of its Japanese customer
base, including popular travel destinations such as the US, France, Hong Kong etc. In 2015, NTT launched VoLTE
international roaming services in South Korea, in cooperation with KT. This is a key step to offer roaming voice and video
calling services.
NTT often runs promotions to stimulate adoption of its LTE services. In May 2014, the operator launched a promotion
campaign granting 100 DOCOMO points, equivalent to nearly $100 in credit, for the subscribers of new multi-line family
plans on purchase of two or more iPads. Currently it offers free domestic calls to subscribers of the Fami-wari MAX50
plan.
NTT collaborated in 2013 with voice call and messaging application provider LINE for DoCoMo’s smartphones. The
service is made available to Xi plan users without additional charges.

CONCLUSIONS
Good commercialization strategies can help companies
capitalize on a growing market, particularly in emerging
economies
Total 4G mobile subscriptions in Asia-Pacific is expected to increase by a CAGR of 25.1% between 2015 and 2020. The
success of operators to realize ROI for 4G services relies on their underlying commercialization strategies.
Client segmentation strategies enable operators to take into account demographic differences between developed and
emerging markets in the Asia-Pacific region. Operators in emerging countries can benefit by offering cost-effective
services to the large young population and residential segment. On the other hand, operators in the developed markets
can benefit from targeting tech-savvy customers with larger data volume bundles, discounted OTT and VAS services.
Product strategies are focused on offering a variety of 4G-enabled devices such as modems/routers/MiFi devices, data
bundles, VAS etc. Operators in the developed markets can raise ARPS through data plans with larger data allowances
up to unlimited data with free calls and text messages. In emerging markets, operators focus on accelerating adoption by
bundling devices with LTE plans as affordability remains a key hurdle in these markets.
Pricing strategies need to take into account income levels and competitor pricing strategies. A few operators, particularly
in developed markets, have selected premium pricing as subscribers are willing to pay for quality and coverage. While in
emerging markets, where users are more price sensitive, operators are bundling devices and VAS services as well as
offering data sharing plans to boost 4G adoption.
Promotional strategies are focused on highlighting the advantages of 4G technologies over 3G through extensive
marketing campaigns. Other promotional strategies involves selling points such as data plans, speed and quality of 4G
services as well as promotional offers of free data, OTT services, devices at discounted prices etc.
Distribution strategies are aimed at leveraging existing direct and indirect sales channels to drive 4G uptake. Operators
use both physical stores and online websites to drive adoption of 4G. Physical stores in emerging markets, where the
majority of users are prepaid with lower ARPUs, play an important role in driving the demand of new services due to tech
support available for the population.
Companies that successfully adopt and execute these strategies stand an excellent chance of exploiting strong growth
opportunities.

APPENDIX
Definitions
ARPS: Average revenue per subscriber
CAPEX: Capital Expenditure. Money spent by a business or organization on acquiring or maintaining fixed assets
FTTH: Fiber to the home
GCC: Gulf Cooperation Council
LTE: Long-term evolution
LTE-A: LTE Advanced
OTT: Over-the-top service. App or service that provides a product over the internet and bypasses traditional distribution
channels
VAS: Value-added services
ViLTE: Video over LTE
VoLTE: Voice over LTE
VoWiFi: Voice over Wi-Fi
Sources
Pyramid Research APAC Insider Reports
Further Reading
Telecommunication Services in Asia-Pacific – MarketLine Industry Profile
Wireless Telecommunication Services in Asia-Pacific – MarketLine Industry Profile
Communications Equipment in Asia-Pacific – MarketLine Industry Profile
Telstra Corporation Limited – MarketLine Company Profile
NTT DOCOMO, INC. – MarketLine Company Profile
KT Corporation - MarketLine Company Profile

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Research team can be contacted at ReachUs@MarketLine.com.
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4G Mobile Broadband Commercial Strategies For Faster Return On Investment in Asia-Pacific

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MarketLine Case Study

Publication Date: June 2016

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 1

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 2

4G mobile subscriptions penetration to reach 44.6% 2020.............................................................................................. 7

4G commercialization strategies vary ............................................................................................................................... 10

Commercialization strategies in action .............................................................................................................................. 15

Telstra Australia ............................................................................................................................................................. 15

KT targets customers with new innovative products and services ............................................................................. 16

Reliance Jio gaining a strong foothold in India .............................................................................................................. 18

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 3

Further Reading ............................................................................................................................................................. 22

Ask the analyst .............................................................................................................................................................. 23

About MarketLine .......................................................................................................................................................... 23

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 4

Figure 2: 4G subscription penetration 2015 and 2020 ........................................................................................................ 7

Figure 3: Total mobile handset sales in Asia-Pacific, 2014-2020 ........................................................................................ 8

Figure 4: Mobile handset sales distribution in Asia-Pacific, 2014-2020 ............................................................................... 8

Figure 5: 4G spectrum features ........................................................................................................................................... 9

Figure 6: 4G spectrum allocation in APAC countries .......................................................................................................... 9

Figure 8: Asia-Pacific demographics, 2014 ....................................................................................................................... 10

Figure 9: Client segmentation examples with accompanying services .............................................................................. 10

Figure 10: DiGi Malaysia promotion for 4G-enabled device .............................................................................................. 11

Figure 11: Pricing strategies.............................................................................................................................................. 12

Figure 13: Key questions to answer in 4G promotions ...................................................................................................... 13

Figure 14: Popular distribution channels according to market maturity ............................................................................. 14

Figure 15: Telstra's 4G plans, 2016 .................................................................................................................................. 15

Figure 16: Telstra's retail store network, 2016 .................................................................................................................. 16

Figure 17: KT's LTE data-centric plans, 2016 ................................................................................................................... 17

Figure 18: Growth in KT's LTE subscriber base ............................................................................................................... 17

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 5

4G to account for nearly 40% of mobile subscriptions by 2020

Figure 1: Mobile subscriptions by technology, Asia-Pacific

SOURCE: Pyramid Research MARKETLINE

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 6

Figure 2: 4G subscription penetration 2015 and 2020

SOURCE: Pyramid Research MARKETLINE

Smartphone sales to account for over 85% of total handset

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 7

SOURCE: Pyramid Research MARKETLINE

Figure 4: Mobile handset sales distribution in Asia-Pacific, 2014-2020

SOURCE: Pyramid Research MARKETLINE

Shortage of spectrum hinders growth of 4G technology, some

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 8

SOURCE: Pyramid Research MARKETLINE

Figure 6: 4G spectrum allocation in APAC countries

SOURCE: Pyramid Research MARKETLINE

Regional mobile operators increasingly rolling out 4G

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 9

Client segmentation: Operators should develop products and

Figure 7: Asia-Pacific demographics, 2014

SOURCE: World Bank MARKETLINE

Figure 8: Client segmentation examples with accompanying services

SOURCE: Pyramid Research MARKETLINE

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 10

Figure 9: DiGi Malaysia promotion for 4G-enabled device

SOURCE: DiGi MARKETLINE

Operators price their 4G services based on market conditions,

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 11

Figure 10: Pricing strategies

SOURCE: Pyramid Research MARKETLINE

SOURCE: Pyramid Research MARKETLINE