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Dr. Girish Pathak President, ITE Services Inc.

Dr. Girish Pathak President, ITE Services Inc. Transformation of Caribbean Service Providers CANTO conference, June 21 2006. agenda. macro technology trends, 1996-2005 case for transformation @TELUS, circa 2001 the transformation – before, after and the process … 2001-04

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Dr. Girish Pathak President, ITE Services Inc.

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  1. Dr. Girish PathakPresident, ITE Services Inc. Transformation of Caribbean Service Providers CANTO conference, June 21 2006

  2. agenda • macro technology trends, 1996-2005 • case for transformation @TELUS, circa 2001 • the transformation – before, after and the process … 2001-04 • emerging business issues/opportunities, 2005-06 • transformation at a Caribbean service provider … 2006 • checklist for service providers • ITE Services … value proposition • q/a

  3. macro technology trends, 1996-2005 • user interface … global adoption of internet browsers and search-engines • applications … success of commercially-off-the-shelf software applications and (outsourced) services • broadband access … both wire-less and wire-line • network connectivity … convergence to IP, capable of delivering voice, data, and video applications • underpinning of the digital era, silicon technology … unabated pace of progress, as per Moore’s law

  4. case for transformation at TELUS, 2001 • TELUS, $5B Canadian monopoly in west, emerges as a fledgling national player from many acquisitions, and a new management team • strong presence in BC, Alberta, and some parts of Quebec & Ontario • telecom market is on a wild ride … dot-com bust of 2001 • … pending contract negotiations between management and union • network heterogeneity is reflected in rising costs (CapEX and OpEx) • specially, capital intensity (CpEx/Rev) has to come down from 20s • TELUS lacks network-enabled competitive advantage or differentiated value proposition in the national business marketplace • Bell Canada is viewed as the market and technology leader • go-to-market organizations, with revenue of $7B, find legacy network costs, coverage, and reliability an easy scapegoat

  5. product mix of 42% voice, 27% mobile, and 16% LD $2+B EBIDTA with 2+M mobile & 200K HSIA subs (bare 30% of the total broadband subs) $5+B full service provider The stock price is around $15.00 product mix of 36% mobile, 35% voice, and 20% data $3-B EBIDTA with 4M mobile & 700K HSIA subs (about 45% of the total broadband subs) $6+B full service provider enterprise value rose by 40% during 2001-04, stock at $20.00 the xFormation – before, after, process services, people, technology, systems customer set  profitability

  6. emerging business issues/opportunities • revenue … major parts under attack • Wire-line revenue under attack … wireless substitution & VoIP • Wireless, with lower barriers of entry, under intense competition • competition … on all, traditional and non-traditional, fronts • [regional] wireless providers and cable providers • non-facility based VoIP providers, ISPs, etc. • technology … legacy infrastructure, the biggest drag • On the other hand though, IP-based infrastructures promise step difference in capabilities, optimization of CapEx & OpEx; and will offer requisite reliability/QoS, if engineered well • customers … among all issues there is a silver lining • Consumers … interested in trusted partner, in face of tech complexity at home • Businesses … interested in outsourcing non-core competencies • market dynamics … consolidation of equipment as well as of service providers

  7. xFormation at a Caribbean SP • to protect and grow profitable revenue base in wire-line and wire-less business • to bring customer-relevancy & efficiency in all operations using state of the art technologies, process discipline & automation • to diversify product-mix from exposure to substitution, bypass or leap-frog technologies • to develop new long-term (sustainable) growth opportunities

  8. checklist for service providers • Are we relevant to (and engaged with) our customers, both businesses & consumers? • More specifically, do our key customers invite us during their strategic planning, whether they are private or public entity? • Is our network and operations cost-efficient? • Are we in leading quartile? • Are our services enabling strategic differentiation in the capabilities of businesses or communities that we serve? • Do we have leading edge services and networks?

  9. ITE Services … value proposition • for telecom/cable business or ICT executives • help successfully execute transformation from legacy to leading-edge products, technology/operations, and to develop strategic clients … using proven methodology • provide distinctive assessment of ICT technologies … using proprietary tools • help deliver breakthrough improvements in the effectiveness of IT organizations utilizing proprietary metrics • for technology investors • superior financial analysis on IT & telecom investments

  10. ITE Services Inc.expertise, integrity, and independence Contact: Girish.Pathak@ITEservices.net; 617 281-1919

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