Frequencies challenges related with LTE broadband development in Poland 8 May 2012

1. Frequencies challenges related with LTE broadband development in Poland8 May 2012 Maciej Zengel – Orange Polska

2. Broadband penetration in Poland (2009-2011) Broadband penetration in Poland (households, B2C) 3 460 Broadband volumes (2011) 6.9 M 3.5 M Source: Orange Polska estimation

3. Fixed or mobile network: which one to push for countrywide BB access? Orange Polska is a Group with strong fixed and mobile broadband arms Fixed broadband offer is based on: xDSL in urban areas (transfer speed up to 30 Mbps), FTTH (up to 80 Mbps) CDMA in 450 MHz as support in rural areas Mobile broadband: HSPA + / HSPA+DC in 2100 MHz (up to 42 Mbps) in urban CDMA in 450 MHz (up to ca. 6 Mbps) in rural High speed broadband offer for less urbanized areas needed to be developed in next years. • Orange PL is facing strategic decisions: • Which network to develop? Fixed, mobile or both? • Which frequencies do we need for mobile BB?

4. Poland’s spectrum overview – current situation TENDER planned 3Q2012* TENDER(s) planned 2013 Sferia 6 MHz Digital Dividend Band 30 MHz LTE band for rural areas 800 MHz 824 830 832 862 MHz Play 5.0 MHz Aero2 5.0 MHz Plus2.8 MHz T-Mobile 4.4 MHz Plus 6.2 MHz T-Mobile 4.6 MHz Orange 6.8 MHz 900 MHz 880,1 885,1 890,1 892,9 897,3 903,5 908,1 914,9 CenterNet 10 MHz Centernet10 MHz Mobyland 10 MHz Mobyland 10 MHz Orange9.6 MHz T-Mobile 7.2 MHz T-Mobile7.2 MHz PLUS 7.2 MHz Plus7.2 MHz 25 MHz T PLUS 1800 MHz LTE band for dense areas 1710,1 1720,1 1729,9 1754,9 1760,3 1770,1 1777,7 1784,9 MHz 1757,5 Orange 14.8 MHz T-Mobile 14.8 MHz Plus 14.8 MHz Play 14.8 MHz 2100 MHz MHz 1920,5 1935,3 1950,1 1964,9 1979,7 70 MHz Aero2 50MHz 2600 MHz LTE band for dense areas MHz 2570,0 2500,0 2620 * According to latest information offer submitting period may take a place from mid July to mid September. For FDD band only half of duplex presented

5. Frequency challenges on Polish broadband market tenders in 2012& 2013 URBAN RURAL Capacity issue Range issue 450 MHz 1800 MHz 2100 MHz 900 MHz 2100 MHz 2600 MHz 800 MHz • Low frequencies critical to expand high speed mobile broadband service range and to compete effectively on countrywide level • No possibility to launch veryhigh speed broadband (>20 Mbps) in 450 MHz. • 900 MHz enables development of HSPA+ in rural, however, 5 MHz frequency block needed • LTE-A and carrier aggregation solution for very high data rates should also impact long-perspective decision of operators on spectrum acquisition

6. Why do we need 800 MHz to develop LTE? LTE candidate Bands Second digital dividend? 800 MHz 450 MHz 900 MHz 1800 MHz 2100 MHz 2600 MHz 700 MHz • Wide range of 800 MHz cell • Lower investment expanses in rural areas • Better indoor coverage • Improved quality of service • Supporting LTE • High speed broadband offer, higher quality of service FREQUENCY BEST FOR URBAN AND DENSE URBAN AREAS (CAPACITY) BEST FOR RURAL AREAS (COVERAGE)

7. Enough spectrum for all? 800 MHz ? 3x10MHz? 1800 MHz 5x5MHz? 2600 MHz 3x20MHz + 1x10MHz? New entrants? SPECTRUM RISK MITIGATION Tender / Post-tender co-operation Focus on „urban” spectrum 1800 + 2600 plus further consider microcells network solutions for indoor coverage Use the capabilities of 3G networks (mid-term) Second digital dividend (future)

8. LTE development requires frequencies but not only fibre optic transmission development LTE core 800 MHz network investments 1800 MHz 2600 MHz BTS upgrade frequency resources traffic offload femto cells cooperation development Wi-Fi pico cells tender terminals availability what about fixed broadband? offer / services High prices expected in 800 MHz auction may encourage operators to cooperate

9. Thank you