ROSTELECOM. Development of Mobile Business Segment.

Transcription

1 ROSTELECOM Development of Mobile Business Segment

2 Most successful incumbents actively develop mobile services Europe Asia Pacific North America Latin America 2

3 mobile telecommunications is a key strategic growth area for traditional incumbents Verizon, CAGR Revenue % Comments -6% Fixed-line AT&T, CAGR Revenue % Fixed-line Wireless 8% Wireless Mobile traffic, especially in the mobile data segment, is now a key revenue driver globally for universal incumbents enabling providers to differentiate themselves by offering bundled services Orange France, CAGR Revenue % 3-4% Fixed-line Source: Companies reporting, traditional incumbents Wireless

4 Developing Rostelecom s mobile is a strategic priority Rostelecom has a large radio frequency resource and mobile es in various Russian regions Development of the mobile is centred on providing wireless broadband services 2G: 900/1800 MHz (GSM) 3G: 2100 MHz (UMTS) 450 (CDMA) Transition to a single brand Creation of multi-standard network (GSM/UMTS/LTE) Start of network construction and launch of 3G services in in GSM regions and strategically important start-up regions 4G: 800 MHz (LTE) 2600 MHz (LTE) CDMA 450 MHz LTE 800 MHz GSM 900 МHz GSM 1800 МHz UMTS LTE LTE 2100 МГцz MHz 2600 МHz MVNO model Realization of synergies from fixed-line (integrated operation of transport networks, joint support functions, and sale of B2B packages) 4

5 The development of mobile telecommunications also strengthens Rostelecom s investment case......according to a survey of sell-side analysts conducted by TASS-Telecom on the development of Rostelecom s mobile : If there is no mobile data service, then we cannot talk about an integrated operator as the use of the Internet is shifting to the mobile segment. Consumers use Internet more and more, therefore people should be able to access the Internet everywhere. If you do not have this mobile data component in your, then you are obviously losing out to competitors present in this market. "The Company needs to find new ways of generating growth, and that is why Rostelecom is trying to develop its fixed-line broadband and cloud solutions, as well as its mobile segment. This [mobile] segment is a powerful source of growth, which demonstrates stable growth rates, with data transmission services having quite good prospects for the coming years." Alexander Vengranovich, OTKRITIE Focusing on the development of its mobile assets would be a logical step for Rostelecom as developing mobile is currently a global trend. Developing mobile data and infrastructure is key. "In my opinion, it make sense for Rostelecom to develop its mobile from a commercial point of view. Mobile data has significant growth potential, as opposed to, for example, long-distance and local telecommunications." "The future lies in mobile telecommunications, so if they [Rostelecom] do not develop it, they may be left with nothing." 5

6 The market for mobile networks is significantly larger than the fixed line, developing at twice the rate of growth By 2016 the mobile market in Russia will have exceeded the size of the fixed line telecoms market by 1.9 times The mobile broadband market will grow faster than the fixed-line and fixed-line broadband market in Russia by 1.7 times RUB, bln CAGR 11-16,% RUB, bln CAGR 11-16,% % % % % 2011 Mobile Fixed-line Mobile broadband Fixed-line broadband 2016 The size of the mobile telecoms market in Moscow and the Moscow region, where Rostelecom plans to launch 3G services, is comparable with Russia s fixed-line market (180 and 200 bln, respectively) Source: Iks-consulting, OVUM, Rostelecom 6

7 Rostelecom is successfully developing a mobile in the company s regions... Rostelecom has GSM networks in 30 RF regions, giving 60 mln people access to its services Nizhny Novgorod Oblast 82% 18% Perm Krai 53% 47% Khanty-Mansi Autonomous Okrug (KhMAO) 31% 69% Yamalo-Nenets Autonomous Okrug (YaNAO) 34% 66% Market share Rostelecom Other operators Ulyanovsk Oblast 80% 20% Tyumen Oblast (excl. YaNAO and KhMAO) 80% 20% 78% Krasnoyarsk Krai 75% 25% Irkutsk Oblast The Republic of Buryatia 50% 50% 30% 70% Source: J son&partners, Company s estimates Regional presence on a selective basis, 2011 г. 7

8 and is seen as the leading telecommunications provider operating in all market segments Rostelecom is seen as the leading universal* operator Compliant with the definition universal telecommunications operator, on a scale from 1 to 5 While in the mobile telecoms segment, Rostelecom is seen as a 5 th operator nationally, with Big 3 brand awareness in certain regions Prompted recognition level (100% interviewees) 4,27 96% 4,11 96% 4,04 96% 4,00 59% 3,95 52% * Operating in all telecoms segment Source (Consumer Research): WCIOM, InDepth 8

9 In 2012/13 Rostelecom is launching 3G services where it has GSM networks, with 5 new regions also about to offer 3G Plan for the launch of 3G UMTS networks November 2012 Irkutsk Saint Petersburg Voronezh Moscow N.Novgorod 1 st quarter of 2013 Krasnoyarsk Nizhny Novgorod Vladivostok Arkhangelsk Ufa Murmansk Syktyvkar Perm Yekaterinburg Chelyabinsk Tyumen Kurgan Salekhard Khanty-Mansiysk Omsk Novosibirsk Tomsk Красноярск Kemerovo 2 nd quarter of 2013 Ural Volga Region Saint Petersburg Krasnodar Tambov Novosibirsk Norilsk Barnaul Abakan Kyzyl Gorno-Altaysk Tura The Sakha republic (Yakutia) Ulan-Ude Irkutsk Yakutsk 4 th quarter of 2013 Moscow and Moscow region Anadyr Magadan Palana Blagoveshchensk Khabarovsk Birobidzhan Petropavlovsk-Kamchatsky Yuzhno-Sakhalinsk Vladivostok Comments Mobile assets were transferred to a single brand in September 2012 Rostelecom is investing in new mobile telecommunications networks in a number of Russia s regions Rostelecom is constructing networks in 5 regions (Moscow and Moscow region, St.Petersburg and Leningrad Oblast, Krasnodar Krai, Samara Oblast, Novosibirsk Oblast), where it previously did not have GSM networks 9

10 Rostelecom is implementing an extensive network construction programme to launch its 3G services The pace of construction work is up to 2 times faster than the BIG3 when they launched 3G in Launch of 3G network in Irkutsk region in November BS +700 BS/ month BSUMTS Test launch of 3G network and the first call made in St. Petersburg on December 3, 2012 Installation of the first base station (BS) in Moscow region on December 4, 2012 The number of Russian Federation regions covered exceeds BIG 3 coverage at the point of 3G launch in

11 11