GSMA Intelligence ANALYSIS Global cellular market trends and insight – Q3 2017 October 2017 â GSMA Intelligence gsmaintelligence.com ã info@gsmaintelligence.com • @GSMAi Global cellular market trends and insight — Q3 2017 GSMA Intelligence Insights Welcome to GSMA Intelligence’s 36th quarterly review of regional mobile trends Networks Financials Regional trends We know that you are busy and don’t have time to scan the thousands of operator data points captured in our online database each quarter, so our analyst team has aggregated the latest regional data trends for you in this report World Asia Pacific Northern America 13 The regional slides feature easy to digest statistics and data visuals covering mobile adoption, market structure, network launches, technology migration, and financials Latin America 17 Europe 21 As always, we value your feedback, so please contact us if you wish to discuss this research with our analyst team Commonwealth of Independent States 25 Middle East and North Africa 29 Sub-Saharan Africa 33 Least Developed Countries 37 Contents Global cellular market trends and insight — Q3 2017 GSMA Intelligence Europe Middle East and North Africa Sub-Saharan Africa Least Developed Countries World Asia Pacific Total number of operators 929* 168 120 151 155 65 88 164 167 Total connections (excluding M2M), in million 7,801 4,176 383 690 677 425 690 807 713 % of global total connections (excluding M2M) 100% 53% 5% 9% 9% 6% 9% 10% 9% Operators with live 2G GSM networks 676 107 39 127 131 51 78 143 145 Operators with live 3G WCDMA/HSPA networks 628 119 19 119 140 46 67 118 114 Operators with live 2G/3G CDMA networks 109 20 39 10 14 13 17 Operators with live 4G LTE networks 636 116 68 107 149 43 55 98 70 2G as % of total connections 41% 42% 9% 33% 22% 51% 48% 62% 66% 3G as % of total connections 29% 22% 23% 43% 38% 36% 43% 34% 31% 4G as % of total connections 30% 36% 68% 23% 40% 13% 9% 4% 3% As of Q3 2017 Latin America Commonwealth of Independent States Northern America * Global totals include ‘international’ operations that cannot be classified in any specific regions 4 Networks Global cellular market trends and insight — Q3 2017 GSMA Intelligence Europe Middle East and North Africa Sub-Saharan Africa Least Developed Countries World Asia Pacific ($ billion) $263.0 $105.1 $64.4 $19.2 $39.9 $6.0 $17.0 $11.9 $7.7 Of which non-recurring revenue ($ billion) $46.6 $19.2 $14.7 $2.5 $6.1 $0.5 $2.1 $1.5 $0.5 Of which recurring (service) revenue ($ billion) $216.4 $85.9 $49.7 $16.6 $33.7 $5.5 $14.9 $10.5 $7.3 Of which voice revenue ($ billion) $92.1 $31.2 $18.6 $9.4 $14.9 $3.4 $8.4 $6.5 $5.2 Of which non-voice revenue ($ billion) $124.3 $54.7 $31.1 $7.2 $18.9 $2.1 $6.5 $3.9 $2.1 Of which data revenue ($ billion) $96.8 $43.8 $24.5 $5.5 $14.5 $1.6 $4.6 $2.3 $1.2 Blended ARPU $9.1 $6.8 $42.2 $7.7 $16.3 $4.3 $7.3 $4.3 $3.4 Voice ARPU $4.1 $2.7 $15.5 $4.4 $7.2 $2.7 $4.1 $3.1 $2.5 Data ARPU $4.1 $3.4 $21.1 $2.6 $7.0 $1.2 $2.2 $1.0 $0.6 Q3 2017 Total revenue Latin America Commonwealth of Independent States Northern America Opex ($ billion) $169.6 $67.9 $39.6 $12.6 $27.2 $3.5 $11.9 $7.3 $4.6 Capex ($ billion) $41.7 $16.0 $8.5 $4.3 $6.5 $1.2 $3.1 $2.2 $1.3 EBITDA ($ billion) $93.5 $37.2 $24.9 $6.6 $12.7 $2.5 $5.2 $4.6 $3.1 35.5% 35.4% 38.6% 34.3% 31.8% 42.4% 30.4% 38.5% 40.7% $54.3 $21.6 $16.4 $3.2 $6.7 $1.4 $2.5 $2.6 $1.9 Recurring (service) revenue -0.5% -0.3% -2.3% 4.7% -1.3% -0.7% -3.3% 5.8% 7.3% Data revenue -0.6% -6.2% 6.1% 4.5% 3.1% 9.8% -2.5% 6.7% 12.7% Opex -9.1% -11.1% -0.3% -26.6% -12.6% -14.1% 0.7% 8.0% 4.7% Capex -0.9% -3.2% -2.4% 11.7% -2.2% 1.4% 3.3% -6.8% -15.5% EBITDA -5.4% -7.0% -0.3% -0.7% -11.6% -2.8% -19.4% 14.2% 10.8% EBITDA margin Operating free cash flow ($ billion) Q3 2017, annual growth 5 Financials Global cellular market trends and insight — Q3 2017 GSMA Intelligence Total connections (excluding M2M) vs unique subscribers (million) Market penetration as a percentage of total population 7,801 Connections annual growth (excluding M2M) 5.6% 104% 5,077 4.8% 67% 2.6% Total connections Unique subscribers �� ��� � Prepaid/contract as percentage of connections (excluding M2M) Total connections Unique subscribers 6 World Q4 2017 (million) 596 Q4 2017 560 Q3 2017 76% % contract Q3 2017 Cellular M2M connections 24% % prepaid Q3 2016 399 Q3 2016 CONNECTIONS Global cellular market trends and insight — Q3 2017 GSMA Intelligence Mobile broadband and mobile internet adoption �� � �� ��� � Network technology as a percentage of connections (excluding M2M) Network technology connections annual growth 44% Q3 20 17 76% 30% 59% Q3 20 16 22% 47% 41% 31% 29% Mobile broadband as % of connections 2G Mobile internet as % of subscribers MobileSmartphones broadband as percent Mobile internet as percent of of subscribers asofaconnections percentage connections 56% Q4 2017 54% 50% 6 World 4G 2G 3G -8% 4G �� � �� � �� ��� � ��� 3G coverage as a percentage of total population 4G coverage as a percentage of total population Q3 20 17 Q3 20 17 Q3 20 16 Q3 20 16 64% 82% Q3 2017 Q3 2016 3G -1% 72% 85% 3G 4G TECHNOLOGY Global cellular market trends and insight — Q3 2017 GSMA Intelligence Mobile operator financials ($ billion) ARPU $263 Total revenue $216 Recurring (service) revenue Non-recurring revenue $92 Voice revenue Data ARPU $124 Non-voice revenue $4.1 $97 Data revenue $170 Opex Capex Voice ARPU $42 $93 EBITDA OFCF $4.1 $47 $9.1 $54 Blended ARPU Percentage of recurring (service) revenue Percentage of total revenue 72% 44% 43% 45% 45% 38% 11% Voice Data Q3 2016 2 Regional 6 World 64% 13% Other non-voice Q3 2017 16% 36% 16% Capex % Opex % Q3 2016 EBITDA % Q3 2017 FINANCIALS Global cellular market trends and insight — Q3 2017 GSMA Intelligence Total recurring (service) revenue annual growth Data revenue annual growth Capex annual growth 1.8% -0.9% 16.5% 1.3% 1.6% -13.9% -17.6% -0.6% -0.5% Q3 2016 Q3 2017 Q4 2017 Opex annual growth Q3 2016 Q3 2017 Q4 2017 Q3 2016 Q3 2017 Q4 2017 EBITDA annual growth 1.3% 2.1% 0.9% -9.1% -5.4% Q3 2016 Q3 2017 6 World -11.4% Q4 2017 Q3 2016 Q3 2017 Q4 2017 FINANCIAL GROWTH Global cellular market trends and insight — Q3 2017 GSMA Intelligence Total connections (excluding M2M) vs unique subscribers (million) Market penetration as a percentage of total population Connections annual growth (excluding M2M) 7.9% 102% 5.9% 4,176 2,816 Total connections Unique subscribers �� ��� � Prepaid/contract as a percentage of connections (excluding M2M) Total connections 69% 4.6% Unique subscribers Q3 2016 (million) 321 Q4 2017 299 Q3 2017 82% % contract Asia Pacific Q4 2017 Cellular M2M connections 18% % prepaid Q3 2017 190 Q3 2016 CONNECTIONS Global cellular market trends and insight — Q3 2017 GSMA Intelligence Mobile broadband and mobile internet adoption �� � �� ��� � Network technology as a percentage of connections (excluding M2M) Network technology connections annual growth 51% Q3 20 17 79% Q3 20 16 36% 58% 26% 48% 42% 26% 22% Mobile broadband as % of connections 2G Mobile internet as % of subscribers MobileSmartphones broadband as percent Mobile internet as percent of of subscribers asofaconnections percentage connections 55% Q4 2017 54% 3G 4G -7% -7% 2G 3G 4G �� � �� � �� ��� � ��� 3G coverage as a percentage of total population 2G 3G 4G 4G coverage as a percentage of total population Q3 20 17 Q3 20 17 Q3 20 16 Q3 20 16 81% 71% 84% Q3 2017 50% Q3 2016 Asia Pacific 88% 3G 4G TECHNOLOGY 10 ... Q3 2016 Q3 2017 Q4 2017 Opex annual growth Q3 2016 Q3 2017 Q4 2017 Q3 2016 Q3 2017 Q4 2017 EBITDA annual growth 1.3% 2.1% 0.9% -9.1% -5.4% Q3 2016 Q3 2017 6 World -11.4% Q4 2017 Q3 2016 Q3 2017. .. 6 World Q4 2017 (million) 596 Q4 2017 560 Q3 2017 76% % contract Q3 2017 Cellular M2M connections 24% % prepaid Q3 2016 399 Q3 2016 CONNECTIONS Global cellular market trends and insight — Q3 2017? ??GSMA... America Q4 2017 (million) 93 Q4 2017 88 Q3 2017 76% % contract Q3 2017 Cellular M2M connections 25% % prepaid Q3 2016 69 Q3 2016 CONNECTIONS 13 Global cellular market trends and insight — Q3 2017? ??GSMA