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3 years later… Telecom’s current state of health IDATE International Conference 2003 Yves GASSOT

3 years later… Telecom’s current state of health IDATE International Conference 2003 Yves GASSOT. Three years after the bubble burst... Where’s the growth? . Net profits for the world’s leading carriers. Back in the black. (Billion EUR). Source: IDATE.

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3 years later… Telecom’s current state of health IDATE International Conference 2003 Yves GASSOT

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  1. 3 years later… Telecom’s current state of health IDATE International Conference 2003 Yves GASSOT

  2. Three years after the bubble burst... Where’s the growth? • Net profits for the world’s leading carriers • Back in the black (Billion EUR) Source: IDATE

  3. Evolution of European carriers’ net debt 80 000 70 000 60 000 1Q02 50 000 2Q02 3Q02 Million EUR 40 000 4Q02 1Q03 30 000 2Q03 20 000 10 000 0 Deutsche France British Telecom Italia Telefónica KPN Telekom Telecom Telecom

  4. Three years later... • Evolution of leading carriers’ TO • ... But a sharp decline in growth (Billion EUR) Source: IDATE

  5. Declining growth rates • North American market stalled... • ... a sharp decline in Europe... • ... but still steady growth in Asia-Pacific • Evolution of the world market by region • (constant exchange rates) Source: IDATE

  6. 300 25% 250 20% 200 15% 150 10% 100 Source: IDATE 5% 50 0 0% 2000 2001 2002 2003 (e) Cellular subscribers (million) Cellular density (%) The China effect… China: cellular subscribers and mobile density

  7. Diminishing growth Market components Source: IDATE

  8. Successful migration to 3G Source: IDATE

  9. Fixed: revenues and consumption dropping The internet effect... and fixed-mobile substitution Source: IDATE

  10. What about data? • ... Data market value growth on a downward trend… • Evolution of the world market, by segment • (constant exchange rates) Source: IDATE

  11. Broadband: a growth relay? • Tremendous growth of broadband subscribers, thanks notably to lower tariffs. Growth of broadband subscribers Source: IDATE

  12. Broadband: a growth relay? Broadband subscribers (DSL + Cable) per 100 inhabitants Source: IDATE

  13. Conclusion (1) Spectacular financial revival + Clear decline in growth rates… = Threat of telecoms’ “commodization”? • ... But considerable potential contingent on: • stepped-up investments in innovation, • more user-centric marketing (streamlined segmentation, bundling, user-friendly, pricing…) • pro-active partnerships with other ICT players (as opposed to being just a “pipe manager”) • regulation geared to efficient and durable competition

  14. Conclusion (2) Hence the theme of this year’s Conference Telecom - Internet - Media: Advantage Services!  Illustrated by four key areas for carriers in the 5 coming years, namely: • Winning Services 1: Corporate and business markets: How to increase revenues when tariffs are dropping? • Winning Services 2: Beyond telephony… the next generation in Personal Communication • Winning Services 3: Mobile services in the age of 3G • Winning Services 4: Always on… at home: who will pay for what? Or how to create value on broadband networks?

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