1 / 40

María José Aguado Gómez Shangai, November 2nd

The perspective of an operator. María José Aguado Gómez Shangai, November 2nd. Index. 1. Telefónica The environment for Digital Convergence Telefónica España: The best starting position Telefónica España: An ambitious strategy that will extend our leadership. 2. 3. 4. Telefónica.

destiny-butler
Download Presentation

María José Aguado Gómez Shangai, November 2nd

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The perspective of an operator María José Aguado Gómez Shangai, November 2nd

  2. Index 1 • Telefónica • The environment for Digital Convergence • Telefónica España: The best starting position • Telefónica España: An ambitious strategy that will extend our leadership 2 3 4

  3. Telefónica

  4. Services Diversified and large offering of products & services Fixed line voice and other basic services @ Telefonica has experienced a deep transformation over the last twenty years 2006 1984 X 21 Clients 8.9 million subscribers 203,2million subscribers(*) X 20 Spain with a population of 38 million Worldwide Latin America, Europe, Africa & Asia > market potential of 760 million Footprint x x3 Human Resources More than 230,000 employees 67,000 employees X22 x10 x52 Revenues: 52.9 Bn€ (*) Assets: 108.9 Bn€ (**) Mkt Cap: 83,9** Bn€ (*) Revenues: 2.3 B€ Assets: 10.3 B€ Mkt. Cap: 1.6 B€ Financial Data Note: Financial data as of the end of 1984 Note: Financial data as of * Dic 2006 ** Jun 2006

  5. Index 1 • Telefónica • The environment for Digital Convergence • Telefónica España: The best starting position • Telefónica España: An ambitious strategy that will extend our leadership 2 3 4

  6. The environment is characterized by fast change and transformation Globalization Convergence among sectors ”Coopetition” Competence and Cooperation All the agents of the sector are affected by these tendencies Breaking and dynamicInnovation GrowingEfficiency The Consumeris “the king”

  7. Telecommunication Operators The competence is being consolidated around global players Number of players Infrastructure providers Mobile handset providers Latin-American market 62% 2 55% of the market 76% of the market North America market 4 4 54% 2 West Europe market 60% 4 Source : Bloomberg

  8. The convergence is a progressive tendency All the services at a unique mobile handset Management of all the communication and entertainment services Integrated Mobile Handsets Residential Gateway Convergence Content Ubiquity Dual Handsets Unique handset for mobile voice (GSM) and fixed voice (WiFi) TV at home, at the PC and at the mobile Instant Messaging F-M Personal TV On-line communications at the PC and at the mobile Entertainment, information and communication services at the TV

  9. A New Global Digital World has emerged 0.4 IP Digital Network 2001 2006 Service providers Customers Devices Network Digital services and content Broadband users Mobile x25 x13 2001 2006 • 6,400 m MMS sent per year • 65 m online community members Telecom operators • 513 m mobile phones Bandwidth >90% x40 2001 2006 PC Broadband Access F+M Internet players • 193 m PC’s Multimedia equipment • 1.5 m IPTV users • 36 m mobile games downloads • 72 m blog users • 24 mhouseholds with game consoles Other service providers Traffic • 44% households with digital cameras IP traffic: New consumer trends New business models Hyper connectivity Proliferation Bandwidth and volume Note: Data for 2006 in Telefónica markets Sources: Pyramid, Euromonitor, Yankee, Ovum, WCIS, Comscore and internal estimates

  10. The role of Mobile Digital Convergence Extracting value of industry transformation GLOBAL GOALS Sources of growth Integrated delivery Benefits of scale • Mobility and Broadband are driving a New Digital World around the customer providing plenty of opportunities • We have aligned our organisation to capture these opportunities

  11. Sources of growth 35% +23 p.p. -3 p.p. x 2 x 8 x 10 x 10 x 6 x 7 Mobile Fixed > 135%* in Spain, UK and Germany Mobileaccess/population Fixedaccess/households Mobile voice will continue growing Voice (Penetration) 94% 71% 64% 61% >50% in Spain, UK and Germany >70% in Spain, UK and Germany Broadband Broadband will be the dominant access type 3Ghandsets /customerbase Fixed BB/households Penetration 35% 35% 19% 4% Higher bandwidth Bandwidth (Mbps) ~14 100 1.4 10 Mobilemusicaudiousers IPTVcustomers Demand explosion for digital services and content Digital services (Millions) ~7 ~9 1.5 1.1 2006 2010E 2006 2010E * Including M2M Note: Data in Telefónica markets Sources: Pyramid, Yankee, and internal estimates

  12. Integrated delivery 55 To address customer needs To achieve operational excellence Integrated delivery will facilitate a set of opportunities... ...and technology will enable it • Access to any type of service from any type of device in a seamless way • Attractive, easy and user-friendly customer experience Bundles* Telefónica’s markets Millions “All IP” networks and platforms x 2 ~55 26 2006 2010E Content Digitalisation • Efficiency improvement • OpEx and CapEx reduction • Better use of resources • Better quality • Key differentiation factor • Sustainability of price premium *Includes 2P and 3P bundles

  13. Benefits of scale 55 The New Global Digital World ... ...provides new opportunities Customer needs are increasingly more global • Global procurement • Common development of Product & Services • Common operations Lower OpEx and CapEx Global scale Suppliers are more global Faster time-to market Knowledge sharing Technology is more global • Best practices transferred across countries • Faster deployment of services

  14. Index 1 • Telefónica • The environment for Digital Convergence • Telefónica España: The best starting position • Telefónica España: An ambitious strategy that will extend our leadership 2 3 4

  15. 18.1 Spain will maintain a positive macro environment … and market trends Positive macro environment… CAGR 06-10E Spain Euro zone • Increasing demand for telecommunication services • New users • Room to increase adoption rates • Business opportunity beyond connectivity +2.9% +2.2% • GDP: +€119bn • Private consumption: +€66bn • Population: +1.5m people +2.8% +1.8% +0.9% +0.2% Population: 45 MM Source: “Consensus Forecast” for GDP and private consumption; INE and Eurostat for population

  16. 0.9 We are in the best starting position to capture this growth THE BROADEST AND DEEPEST RELATIONSHIPS THE MOST SATISFIED CUSTOMERS THE STRONGEST COMMERCIAL REACH A REFERENCE IN EFFICIENCY

  17. 46.20 The broadest and deepest customer relationships > 45 million accesses The broadest … • >35% exclusivity in Households • >50% exclusivity in SMEs and SOHO • >70% exclusivity in Corporate … the deepest … Market share (FY2006) Fixed Broadband Mobile 59% … with the best customers 56% 50% 46% Share of revenues Share of accesses Share of revenues Share of accesses Source: CMT, Telefónica, companies press releases

  18. 6.27 We have the most satisfied customers Wireless Wireline Global satisfaction index (Q2 07) Residential; TV and Broadband customers 6.99 6.85 “Best ISP” The strength of our networks and operations allow us to offer the best customer experience Global satisfaction index (Q2 07) 6.71 6.49 6.21 Lowest churn Source: Asociación Internautas feb-07; Telefónica; CFI

  19. 20 The strongest commercial reach with outstanding growth opportunities >7,300 points of sale … >4 million customers/month … more than twice the number of exclusive points than any other competitor ≈2,600 sales force for Corporate and SMEs … >75,000 interactions/month ≈10,000 call center positions … 13.5 million contacts/month Online channels … >15 million visits/month

  20. 305 We are a reference in efficiency Employees (wireline) dec-06 • 25% reduction in wireline business workforce in Dec.02-Dec.06: • Redundancy plan (ERE) • Application of “lean operations” to all business processes 99,902 86,315 82,000 64,109 in 1997 55,705 32,397 Increase in Accesses per Employee (wireline) (Dec.07E/Dec.02) +70% +40% Accesses/equivalent employee* Accesses/employee Source: ML European Broadband Matrix Q2 07, Telefónica. * Includes own workforce and outsourced employees

  21. Index 1 • Telefónica • The environment for Digital Convergence • Telefónica España: The best starting position • Telefónica España: An ambitious strategy that will extend our leadership 2 3 4

  22. Our winning mindset is our key value driver Lead the mobile space More customers More revenue/ customer Lead the broadband business REVENUE GROWTH Lead the growth in entertainment Controlled churn Lead the Corporate business

  23. 7.0 We will lead the rapid growth of the mobile data business Strong data adoption and usage … Mobile BB/laptops (market) >70% 20% Data ARPU /ARPU dec-06 dec-10E • New services: • Applications on the move • Access to leading services from mobile • Speed and ease of use 20%-25% 14% • 80% 44% 3G roll-out 2006 2010E • 80% population coverage with HSDPA by 2010E … supported by commercially oriented roll-out of 3G networks Non P2P SMS data revenue/data revenue 3G handsets/customer base >70% • Progressive upgrade of handset base 9% 5% dec-06 jun-07 dec-10E

  24. 1.000 We will keep enhancing our services • Enhanced messaging (SMS 2.0) • Fulfilling group communication and mobile-PC communication needs P2P communications • Easing browsing system • New partnerships (GYM) • Open access navigation • Extending mail services to residential business • Enhanced handset navigation capabilities Browsing & Connectivity • Strengthening content offer based on communities • Enhanced TV offering Multimedia • Advertising: 1st Spanish mobile portal to include advertising • M- commerce • Betting … New businesses

  25. 23 We will lead the mobile voice business 1% 10-14% %M2M More customers Mobile penetration (market) Mobile customersMillions • 135% CAGR 06-10E 107% • 120% 104% Including M2M 105% +5%/+6% 103% • 120% 21.5 • Proactive customer acquisition focused on value • Maintain a “Best in class” churn rate dec-06 jun-07 dec-10E dec-06 dec-10E Outgoing trafficBn minutes • Expanding MoU through innovative pricing schemes leveraging community effect More voice usage >+8% 27.7 Outgoing MOU (Q2 07/Q2 06) +3.5% +1.8% 2006 2010E Excluding M2M Reported

  26. 1.000 Our actions are yielding good results MOBILE SPACE Mobile Data Mobile voice Outgoing ARPU Data Growth Postpaid net adds. Jun.07/Jun.06. Thousands 1,526 8.6% 1,356 408 390 349 309 1.5% 472 Q2 06 Q1 06 Q3 06 Q4 06 Q1 07 Q2 07 157 43 Increase in data usage in Q2 07: X7 year-on–year x2 quarter–on-quarter Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Last 12M Source: Telefónica, companies’ press releases

  27. 1.000 New services and enhanced functionalities in Q4 07 e-Mail for the mass market • Blackberry service for 5€/month • “Mail Express” for 2€/month • 1st player in the world to launch: • Smartphone Blackberry 8120: convergence in access (WiFi/GPRS) and services (multimedia applications and e- mail) • BlackBerry Unite:downloads of content from a BlackBerry smartphone to a PC More functionalities • Sony-Vaio laptops with embedded exclusive 3.5G modules • 1st player in the world to launch Novaltel’s HSUPA modem New devices for laptops connectivity • From 26 to 42 TV channels • Agreements with key players: FOX, CNN, Paramount Comedy, Cartoon Networks… Enhanced TV offering

  28. 16,000 Increased demand for broadband Average bandwidth 2010E: 10x vs. 2006 Mobile 7 Mbps 2 Mbps IP Telephony 0.2 Mbps 0.2 Mbps BB Internet 10 Mbps 5 Mbps Videotelephony 1 Mbps 1 Mbps Peer to Peer 10 Mbps 20 Mbps Videoconference 4 Mbps 4 Mbps SDTV 0.32 Mbps 4 Mbps Online Games 0.5 Mbps 1 Mbps HDTV 12 Mbps 0.5 Mbps 3DTV 16 Mbps 0.7 Mbps x 9 Total communications traffic in Spain* Thousands Terabytes 18,000 x 7 2,200 300 2000 2006 2010E * Telefónica estimates

  29. 48.2 We will lead the massive adoption of broadband connectivity services Massive use of fixed Broadband BB Market Million accesses BB customers Millions 11.0-12.0 6.1-6.8 6.7 3.7 dec-06 dec-10E dec-06 dec-10E 56% 53%-57% • From 42% to 75% BB penetration in households with fixed access Retail BB Market share Market-driven fiber deployment Wireline BB Coverage % loops • Selective deployment by zone Sustaining BB revenue per access • Enhanced speeds • Higher contribution from VAS (Imagenio, security, maintenance…): ≈30% of BB ARPU in 2010E vs. 16% in 2006 ~€1bn capex 2007-2010E >80 54 >40 • 25 0 0 dec-10E dec-06 dec-10E dec-06 dec-06 dec-10E 10 Mb 30 Mb 100 Mb

  30. Entertainment: A new digital TV in Q4 07 Enhanced functionalities and new content • Access to most of the content of the 4 leading TV channels in Spain broadcasted during the last week PAST TV SHIFT TV • Capability to pause live TV channels • Rewind TV • Instant recorder • Personal recorder PVR • From 120 to 160 channels • New thematic packages (immigrants, children …) • Prescreening of series • Soccer summaries • New theatrical releases Enriched content

  31. Entertainment: the consumer as the decision maker • Past TV • Shift TV • PVR: • Rewind TV • Instant recorder • Personal recorder • New content Entertainment value proposition Today Q4 07 Q3 08E To be developed • Real video on demand • Most flexible Pay TV offer in the market • EPG • T- commerce • HDTV • Multiroom • Advanced EPG • Advanced PVR • Photo and video sharing • Interactive advertising • Imagenio on the move • Advanced T- commerce • Other advanced functionalities

  32. 4.8 This will support the growth of the Pay TV market We are driving the growth of Pay TV market… …and new functionalities will boost the growth Pay TV Market growth Imagenio customers Millions >20% Total market Additional growth potential leveraging new functionalities Areas with Imagenio coverage >8% 1.2-1.4 1.0 0.4 Jun.07/Jun.06 dec-06 dec-10E • Commercialization in bundles • Continuous learning to improve customer experience

  33. 1 We are working closer with key partners Mobile PC TV Services and Content (Cross-platform approach) • Partnerships with third parties to develop and offer innovative services and applications • Partnerships to acquire and distribute content • Aggregation and distribution of content • Modularity, flexibility and advanced functionalities as main differentiation factors • User Generated Content offerings (e.g. web 2.0.) leveraging Telefónica’s own platforms and 3rd party products

  34. 1 Digital services and content will further contribute to growth Mobile PC TV • Develop new services with open garden approach: • Information (e.g. search) • Communication (e.g Instant Messaging) • Entertainment (e.g. Music, TV) • Stimulate Internet usage, monetising it through data traffic, advertising and pay-per-use • Foster friendly data-enabled handsets • Attract online audience and monetize it, mainly through advertising • Internet TV + Music (Terra TV, Pixbox) • Communities (e.g. “Espacio Terra”) • User Generated Content (e.g. “Tú Reportero”) • “Personal TV” based on IPTV • Satellite to reduce time-to-market • Cable only to leverage existing assets (e.g. Perú) Mobile data active users* Millions Terra unique users Millions Pay TV customers Millions x 4 x 2 x 5 ~5 ~70 ~90 44 17 1 2006 2010E 2006 2010E 2006 2010E * Non SMS data active users for the last 3 months

  35. 11,6% … and it will radically transform our revenue profile Telefónica Españarevenue structure CAGR 06-10E +2.0%/+3.5% €19.8bn €15.7bn Capturing the full potential of BB and wireless data 30%-32% 20% Fixed and mobile data Mobile and fixed voice and access Wholesale and other* 11% 69% 62% 52%-55% 19% 18% 14%-16% FY2002 FY2006 FY2010E * Includes Wholesale, Interconnection, consolidation adjustments and others (Group companies, handsets, others)

  36. We are leveraging integration to better serve our customersand to be more efficient… Full integration of key functions: single management team Full integration of IT and operations to capture synergies and develop common platforms under a new operating model …while maintaining our commercial focus Full integration in Corporate business Integrated stores In Residential and SMEs, convergent market research, cross selling and convergent P&S

  37. Content Extracting value of industry transformation GLOBAL GOALS Sources of growth Integrated delivery Benefits of scale Through this triple effort we will enhance our leadership and competitive position, providing superior growth and returns

  38. 1.000 In summary… Sources of growth + + Integrated delivery ~€7.5 bn Synergies for the 2007-2010E period Benefits of scale > 290 m Accesses in 2010E Industry transformation is creating the New Global Digital World ~50 m 3G users ~20 m Fixed BB accesses (OpEx+CapEx)/ revenues reduction 2006-2010E > 5 p.p.

  39. Telefónica: a unique incumbent ON MARKET LEADERSHIP ON GROWTH WITH A WINNING MINDSET

  40. 40

More Related