Lars Torstensson INTRODUCTION

Transcription

1 Lars Torstensson INTRODUCTION 1

2 But is he going to tell me something I don t know? At what price are you going to sell 4G? When are you going to launch? 2

3 Mats Granryd WELCOME 3

4 Market presence and offered products Sweden Full product suite Norway Full product suite Estonia Mobile, Fixed telephony Latvia Mobile Lithuania Mobile Netherlands Full product suite Germany Mobile, Fixed broadband & telephony Austria Fixed broadband, Fixed telephony Croatia Mobile Kazakhstan Mobile 4

5 Net sales per market and segment Share of net sales per market H Net sales by market and segment H SEK Million 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Sweden Netherlands Norway Austria Croatia Lithuania Latvia Kazakhstan Germany Estonia Other Mobile Fixed telephony Fixed broadband Other operations Majority of net sales originates from Sweden, Norway and the Netherlands Remaining markets contribute no less than 25% of net sales Mobile is the largest product area in terms of net sales, representing 70.8% of total net sales 5

6 Benefitting from a mobile evolution Demand growth European mobile data usage MB Tele2 Sweden - Mb/week Strong spectrum portfolio Jun-11 Jan-12 Jun-12 Jan-13 Jun-13 3G 4G 2G Tele2 is a leading infrastructurebased challenger with attractive offers Tele2 is uniquely positioned to capitalise on mobile data and internet growth 6

7 The Netherlands are of high importance from a Tele2 Group perspective Netherlands share of Net Sales H Netherlands share of EBITDA H % 21.2% Netherlands Other Netherlands Other...and the importance will grow over the coming years 7

8 Bob Bunnik MARKET OVERVIEW 8

9 Market: Consolidation Fixed broadband Mobile (3 MNOs & their main brands) Convergence Strategy Quad Play Cable: mobility through WiFi, plus MVNO+limited own-roll-out M&A FttH players Full-MVNO on TMNL, transition to MNO NL is a concentrated and competitive market: 4 out of 5 players have a converged strategy 9

10 Convergence from a customer perspective Residential: Packaging convergence Business: Real technical convergence True Convergence is about providing seamless access and convenience ( one-stop-shop ) Services Access Devices Fixed and mobile are converging, providing seamless access on any device and network. Partnerships are key to enhance the value proposition for both consumer and business. 10

11 Mobile market price levels: NL vs. EU EU Mobile Data price comparison EU Mobile Voice price comparison Average cost per minute ( cents) in mobile communications, 2011 Up to 100x difference In Data-only tariff volume allowances in EU27 774% difference in Phone call prices across the EU The Netherlands mobile market behaves as a protected market with very high price levels. 11 Sources: REWHEEL (2013), EU27 Mobile Data Cost Competitiveness Report and EU Digital Agenda Scorecard 2012 (Aug. 2013)

12 Mobile market: 4G positioned as premium KPN Vodafone The Dutch market is moving towards flat-fee Voice & SMS but still with high price levels. 12

13 Mobile market shares and value Revenue Market Shares (x%) NL Mobile Service Revenue s (meur) KPN T-Mobile Vodafone Voice Non-Voice Stable market share development, growth within mobile data 13 Sources: Tele2 research and TelecomPaper Q2-2013

14 Mobile handset market development Very high smartphone penetration in the Netherlands SIM-only sales continuous to increase NL: 66% 35% SIM-only May 2013, up from 26% May 2012 A 4G-centric mobile operator could capture most value at lowest cost. 14 Source: Comscore Data Gem

15 A technology shift in fixed broadband Bandwidth demand pushed by TV & Video Internet Internet (VoIP/ Mobile) Internet (VoIP) TV TV Internet VoIP xdsl FttH Internet (Mobile) OTT-TV Fixed Broadband penetration: a technology shift 48% 45% 42% 39% 36% 34% 7% 10% 13% 17% 20% 23% 45% 45% 45% 45% 44% 43% Cable FttH DSL The addressable market for DSL is declining with clear growth in fiber 15 Sources: TelecomPaper (Q2-2013), Dutch Broadband

16 Fixed business services shift to mobile & IP Dutch enterprise telecom services Fixed Services Revenue split meur meur 100% 100% 25% Mobile services 46% 55% Traditional fixed voice 41% 21% IP voice 8% Internet access 21% 20% Fixed services 54% 45% Ethernet services 6% 13% IP VPN Digital leased lines 19% 5% % 2% 2015 Business market value is also shifting to mobile and All-IP. FttO regulation more favorable for alternative operators. 16 Sources: Tele2; Gartner, 2011; IDC, 2011; Cap Gemini Consulting analysis

17 Key trends in the business segment Trends affecting the SME market Decline in Voice usage Anywhere, anytime access on any device Fixed and Mobile convergence Consumerisation : from investing to using (Cloud) Trends affecting the LE market Cloud/Hosted PBX is growing Fixed and Mobile are integrating Security is of increased importance Increasing ICT complexity Business market converges into ICT business with increased attention for security. 17

18 Key take-away: Significant growth potential in mobile Residential growth in Mobile Data & Fixed Broadband on Fiber B2B growth in Hosted Voice and Mobile, Fiber to the office increasingly important Seamless fixed-mobile operators will be able to capture market value: 4G and fiber will be pivotal. 18

19 Bob Bunnik Q&A PART 1 19

20 Günther Vogelpoel THE NEW TELCO 20

21 Our Strategic Stronghold Residential, B2B & Wholesale LTE Radio Network xdsl Fiber to the Site FIBER BACKBONE Fiber to the Home Residential Fiber to the Office B2B Fiber to the X Wholesale Tele2 is uniquely positioned in the Dutch market with own fiber access and 4G. 21

22 Tele2 the new Telco 4G only 2G & 3G & 4G 4G 22

23 Data is the future 2700 Total Data Revenue NL (x meur) Provide customers with propositions that makes it easy to use data 23 Source: Telecompaper

24 Our ambition: growth Mobile residential* >20% Broadband residential* >15% Business* >10% Converged Player Transition is the name of the game Mobile: transition from MVNO to 4G MNO Broadband: transition from copper (DSL) to Fiber 24 * Market share

25 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Thousands Strong Sales with MVNO Customer Net Additions (x1000) Growth Tele2 base YoY Q112 Q212 Q312 Q412 Q113 Q Tele2 KPN Vodaphone T-Mobile 0 Tele2 is the only company that has shown continuous growth in the last 6 quarters. 25 Source: Telecompaper

26 Transition to MNO Smart distribution Success of smartmix proposition continues New brand position 4G ready & 4G experience Tele2 has a unique beneficial position to be competitive on mobile and fixed broadband. 26

27 MNO progressing well Grow in MVNO Off load data to 4G network New brand platform Passive NWS Agreement with TMNL Smart distribution Selected vendors Secured new MVNO deal 27

28 Thousands Bring fixed broadband back to growth Broadband development Tele2 base Tele2 Consumer Broadband market share Total base DSL 30% 25% Ziggo KPN DSL UPC Others KPN DSL KPN Fiber Tele % % % 5% - Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 0% Q2-12 Q3-12 Q4-13 Q1-13 Q2-13 Declining Tele2 base, preparation for transition to high speed broadband Incumbent aggressively attacks Cable. FttH fastest grower 28 Source: Tele2 Research & Telecompaper

29 High speed broadband coverage growing 15% Addressable market >30MB 10% % 33% 15% 25% 15% 57% 13% 19% 33% 50% VDSL Tele2 VDSLKPN FttH Unreachable Adding VDSL (off-net by KPN) The addressable market increases to 45% in 2014 Wholesale KPN VDSL access with Tele2 services Adding on-net FttH The addressable market increases to 70 % in 2015 Tele2 FttH last mile via KPN with regulated prices 29 Source: Tele2 Research

30 Why will we be successful? Synergy 4G network and FttH Own fiber backbone FttH rollout momentum Capture value in converged services Customer demand higher speeds Leveraging on existing customer base Tele2 has a unique beneficial position to be competitive on mobile and fixed broadband. 30

31 Joachim Horn MNO ROLLOUT 31

32 Key criteria for designing coverage Spectrum availability Targeted quality and performance Expected traffic Population density, distribution and migration pattern Topography Type of buildings 32

33 50% 100% Population coverage* Demography and geography impacts coverage Sweden Netherlands SWE NL Total surface (km2) 450,300 41,540 Non water or forest 28.5% 72.4% Population 9,5 M 16,7 M 15% 30% Sites Population per km2 non forest / water** *Approximate Source: WorldBank.org 2011 **Assuming no inhabitants in forest or water areas

34 Outdoor Indoor Signal strength Penetration loss Tele2 has a very powerful spectrum position 10 MHz in 800 MHz Ideal for coverage 20 MHz in 2.6 GHz Ideal for capacity 2.6 Difference indoor/outdoor 800 Signal loss when covering indoor Wall Coverage Km2 800MHz 2600MHz Distance [km] enabling a competitive and cost efficient rollout 34

35 Network planning done, site sharing deal signed, suppliers chosen and rollout started Population coverage over time* 100% 75% 50% 25% 0% Time Approx. 3,500 sites for initial rollout Priority to achieve full coverage Competitive capacity, speed and quality First sites being finalized 35 * Approximate

36 Leveraging synergies with our backbone and FttH Consumer Small business POP LTE = Tele2 infrastructure = Rented from Reggefiber Microwave 36

37 Principles of site sharing with T-Mobile NL Antenna 2G 3G 4G 4G X X X T-Mobile base station T-Mobile core network Tele2 base station Backhaul Tele2 core network RRH* Passive sharing of infrastructure and antennas Sharing of backhaul, power and field services is optional Majority of sites will be shared with T-Mobile, first sites available soon 37 *RRH = Remote Radio Head

38 Network procurement done Equipment Vendor Main decision criteria RAN Core Mainly price Similar quality and capabilities of different vendors Vendor capabilities Vendor experience IMS/Voice over LTE platform Existing references Vendor experience Vendor flexibility 38

39 Cost per site Rollout versus license investments CAPEX for initial rollout* Comparison radio equipment cost Sweden reference NL 172 MEUR 161 MEUR MEUR License Network rollout SE 2003 SE 2008 SE 2013 SE share 2013 NL 2013 Competitive equipment prices keep investments low 39 *Approx. 3,500 sites

40 LTE supports carrier grade VoIP, i.e. Voice over LTE First carrier grade voice over IP-solution in mobile Future proof Over-The-Top competitive service Generally available from beginning of 2014 (standardization, chipsets) Dec. 2012: Tele2 first live VoLTE trial in EU Tele2 targets to offer VoLTE early 40

41 VoLTE brings substantial benefits Better sound Less delay Up to 6x faster establishment times Spectral efficiency No national roaming costs 41

42 Preparing Tele2 s customer base for LTE 60% 50% LTE enabled handsets sold by Tele2 NL Top tier handsets likely to support VoLTE from % 30% US and Asian operators to launch VoLTE within next months 20% 10% 0% Jul 2012 Jul 2013 Potential upgrade of existing LTE handsets with VoLTE More than 50% of handsets sold in July 2014 are already LTE enabled 42

43 How we will ensure quality Full LTE coverage with best in class ambition Building our own network based on newest technology without legacy Ambition to achieve a full LTE coverage as soon as possible Keep our customers in the Tele2 network throughout the country Quality design is based on KPI:s which beats best in class in Sweden Seamless coverage experience for Tele2 customers (2G and 3G) National Roaming Agreement Similar setups working very well in Tele2 Norway and Croatia Proven CSFB* technology to deliver voice (2G and 3G) to 4G customers Tele2 was the first operator in Europe to launch CSFB (2011) 43 *CSFB = Circuit Switch Fallback

44 Tele2 will have a very competitive IT landscape New IT architecture Ahead of the pack legacy free Flexible best of breed system, fully agile approach All current and future business needs, fixed and mobile Customer benefits Transparent and clear communication to the customers Online focus: My Tele2, customer portals and apps Real-time information for consumption and charging Architecture defined, suppliers chosen and development started 44

45 Key take-aways In control for best customer experience Building our own network Implementing a competitive IT landscape All legacy free Planning done, suppliers chosen, implementation started Initial rollout of 3,500 sites, most of which are shared Supporting business success with competitive cost position Working on early launch of VoLTE for true 4G experience 45

46 Günther Vogelpoel Joachim Horn Q&A PART 2 46

47 Fedor Hoevenaars B2B OPERATION 47

48 B2B has a clear # 2 position in fixed services Strong customer base Broad service spectrum ATM S CASINO S TRAINS SCHOOLS & UNIVERSITIES HEALTHCARE Own infrastructure One of the largest fiber optic networks Total length 5,213 km Access to 55 radio nodes 48

49 Incumbent is dominant in B2B 4% 5% 16% 16% Business Market Share: IP-VPN Connections Business Market Share: Fixed Voice Connections 8% 4% 4% 6% 7% 58% 13% 58% Business Market Share: IP-VPN Connections 8% 4% 4% 13% 6% 7% 58% KPN Tele2 UPC Ziggo Vodafone Eurofiber Other Tele2 is the only full-service alternative 49 Sources: OPTA Structural Market Monitor Q1 2013

50 Mobile drives B2B revenue development Mobile Fixed B2B Mobile growth taking of in 2015 when network reached full coverage and quality Overall revenue growth from all segments: SME and Enterprise Continued decline in fixed voice MoU and traditional voice service being replaced by Hosted Voice. Our strength in Data (VPN/Internet) remains highly important for the future Overall strong revenue growth in B2B driven by mobile, where fixed remains important 50 *Not based on actual figures

51 Relevance of 4G in B2B Increased productivity 67% Cust costs Won more business Increased employee well-being / motivation 39% 37% 47% How can LTE improve the processes we already have? Improved customer satisfaction 4G hasn't benefited my business Don't know Supported new ways of working Other 11% 9% 6% 4% 3% 0% 20% 40% 60% 80% What s totally new? 4G is a perfect complement to our Fixed business 51 Source: Arthur D. Little Analysis

52 Full service provider, serving all segments Direct: Account Management Corporate Indirect: Partners and Telesales SME Online and Retail SOHO Sales channel expansion in SME is part of our growth strategy in B2B 52

53 Convergence is creating momentum Transition to integrated services We rather partner than invent ourselves 4 themes lead our proposition development and partner selection Customer Centricity Cloud/Hosted PBX is growing Fixed and Mobile are integrating Anywhere, anytime access on any device Security is of increased importance Business Continuity Tele2 Fixed & Mobile Collaboration Cost Control Increasing ICT complexity By adding mobile to our portfolio the addressable market is doubled 53

54 Customers Partners Our B2B strategy proves to be successful Corporate SME Wholesale Large bank 54

55 Business Continuity Take away: converged connectivity is opening the market Corporate Customer Centricity SME Tele2 Fixed Mobile Convergence Cost Control Wholesale Collaboration SOHO With 4G capabilities Tele2 is able to address the entire business market 55

56 Conclusions >20% >15% >10% Continue growth & build 4G Back to growth & benefit from synergy Maintain fixed & grow mobile 56

57 Fedor Hoevenaars Q&A PART 3 57

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