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Regional and International Strategy Presented by: Paul Pereira. 24 th November 2005. Vision. Gateway to the World. To be the number one NGN Telecom Consortium in the MENA region providing IP Based Value Added services to satisfy the consumer needs profitable and efficiently.
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Regional and International StrategyPresented by: Paul Pereira 24th November 2005
Vision Gateway to the World To be the number one NGN Telecom Consortium in the MENA region providing IP Based Value Added services to satisfy the consumer needs profitable and efficiently.
From TDM to VoIP to IP Multimedia The next generation of communications
THE OLD AND NEWA New Spin on Convergence • The TDM network, with all its Reliability lacks flexibility to create and deliver services quickly. • Carriers have to create rigid silos per service: one each for voice, data, video and special offerings. • Some services cannot be offered. • With the advent of the IMS (IP multimedia subsystem) network architecture, a new approach to enabling convergence is emerging that allows for IP based services.
Agenda The Telecommunications Industry Today. What are the Market Trends. What are the New Technologies. Convergence and Today. The VoIP Dilemma. Paltel Group Strategy. Paltel Regional and International Strategy.
Agenda Continued 2 Today’s Projects and Timelines Budgetary Project Costs In Five Years The Dollars and Sense of it How it All Fits Together. Exit Strategy and Conclusion
The Telecommunications Industry Today • eBay bought Skype for 4bn $ • The Economist • Mobile operators announce fixed line replacement • Mobile operators will block VoIP • FastWeb rolls out new VoIP service • BT Business Services Unit focusing on Enterprise IP solutions. • Teacom invests $120 million in Interoute.
Average margin per user/month ($) +30% +20% Source: Strategy Analytics- June 2005 +10% 1996 2000 2004 2008 2012 Impact of competition and new technologies on classic services -10% -20% Classic Telecom services Revenue trends The Telecommunications Industry TodayService Provider & User trends :Revenue and Margin trends force Service Providers to react
The Telecommunications Industry TodayService Provider & User trends :Users Spending shift from Telecom to Media & Entertainment Relative Growth in Household Expenditures, by Category Education Media & Entertainment Non-profit Organizations Health Care Professional & Financial Services Telecom Housing Transportation & Travel Relative Spending (1994 = 1.0) Household Operations Personal Care Food & Tobacco Utilities Compelling need for Operators to join the value chain for Media-rich services to which End Users are devoting more of their wallet Source: US Department of Commerce, Bureau of Economic Analysis, Dean & Company Analysis
The Telecommunications Industry TodayFixed vs. Mobile Revenues Worldwide There are 1.2 Billion Fixed Lines Globally and 100 million VoIP lines.
What are the Market TrendsThe Path for Growth:How VOIP and IP is changing the world • Countries where VoIP is active—Australia, China, Hong Kong, Japan, South Korea, Singapore, Taiwan, and Thailand— registered a volume of about 175.2 billion minutes VoIP calls in 2004. • Clear evidence of continuous call migration from PSTN to IP platform, total VoIP calling minutes are expected to reach 484.2 billion by 2009. • Over the same time, VoIP service revenue will rise from US$5.5 billion to US$20.8 billion. • In 2004, there were 8.7 million local VoIP lines in Asia. • In Japan, South Korea, Hong Kong, and Singapore, a large portion of long distance calls has already migrated to the IP platform. VOIP is the ENABLER
What are the Market TrendsThe Path for Growth:Stages in the creation of both value and business growth 3-IP Value Added 2- Network “IP” • Access Agnostic • Bringing the Network to You ! • Not just bundling!: Blended Lifestyle services • Complete organizational convergence • Get away from margin squeeze!: New revenue from Blended Services 1-Virtual Bundling • Convergence of network elements • Cap-ex and op-ex control • MPLS enabled network • Leverage existing networks • End user likes one stop shop & savings • Revenue growth via take rate growth, but margin squeeze due to bundle incentives! • Depend on access, network & device VALUE EXISTING NETWORKS NEXT GENERATION NETWORKS IP Value Added is a differentiator
HDTV VoD Premium Video Digital Video DVR Basic Video Long Distance Voice Broadband Data Local Voice Wireless Voice What are the Market TrendsThe Opportunity for Growth:Bundled Services not enough => Blending adds more value Bundling alone will not create lasting incremental value. Blended Servicesincrease revenues, create value Follow me TV Bundling drives commoditization and price erosion 250 Blended video and Data Applications Family Finder 200 Interactive Gaming Feature Driven Monthly ARPU (U.S. Dollars) 150 Long Distance VoD BasicIP TV 100 HDTV Local Voice Broadband Data 50 DVR Premium Video 0 Voice, Video & Data Voice Only Voice & Data 2004 2005 2006 2007 • Everyone is bundling to retain subscribers. • Bundling simplifies billing - does not reduce other Opex. Blended services = Increased revenues, customer loyalty
2004 Non tradtional services Opportunity*:$72B 2007 Non tradtional services Opportunity*:$188B Why so much noise about VoIP??? Reason: VoIP is a key component of new IP services !!! Active Phone Book iLocator IP TV MMS SMS Opportunity for innovative services creating value over IP What are the Market TrendsThe Opportunity for Growth:Rich serviceBlending will improve the business models +30% Revenue opportunity potential for innovative services +20% +10% 1996 2000 2004 2008 2012 Impact of competition and new technologies on classic services -10% Revenue forecast for classic Telecom services -20% * Values estimated based on public analyst info.
Revenue Introduce VoIP Add high-revenue, lifestyle-driven services POTS revenue erosion ≈ 0 2002 2004 2006 2008 What are the New TechnologiesThe value of Blending VoIP with applicationsMore than Voice over IP: It is Value over IP Value for the SP: “IP allows the SP to transition graceful to IMS centric blended lifestyle service offerings” • Characteristics of Lifestyle Services: • - Rich media options • - Interactive • - “Presence” sensitive • Context (e.g., media, device..) • Timeliness • - Highly personalized • My interests (e.g., triathlons) • My community and groups • My availability…. • Value of IP solution: • VoIP as the enabler • Consumer features and elements • Incremental stages for IP add-ons and innovative applications • User Friendly • Strong Customer Support • Strong Branding Lifestyle services help the operator maintain relationships with subscribers, regardless of how they access services
…………………………………… A1 A2 A3 An Am ActivePhoneBook PushtoSpeak WiFi/3GRoaming Presence MMMessaging MobileExtension ………… Different Applications OSA/Parlay Enhanced User experience and SP efficiency Data management Etc. Rules engine Common operations protocol User profile management A12 A23 A1 A2 Amn Programmability ApplicationServers SessionManager Unified SubscriberData Server NetworkController NetworkGateway IMS elements Service Broker HSS/SDHLR Media GatewayControl Function MediaGateway MRFC CSCF BGCF Wireline BroadBand Access Networks PSTN WiFi/WiMax 3G GSM User Interfaces What are the New TechnologiesMaximizing Value over IP with applied Solutions:Technology, Standarization, Integration
Convergence and Today. VoIPSimple, user friendly, common interface accross devices Convergence for the User is about Converging Services into one pipe line.
Ann is here. Convergence and Today. VoIP The value of Blending VoIP + Multimedia User value: Personalization, Convergence, IP enabled services Convergence of Entertainment, Communications, Data Services, Internet, Location services, Surveillance, etc.. Over multiple user terminals, with interfaces adapted to user likes and lifestyles
Convergence and Today. The VoIP Dilemma • Voice is an Application within the Network. • VOIP is an Application Driver. • Need to innovate new business models to become profitable. • POTS Subscriber to Packet Subscriber. • New Revenue Growth. • Minimize Capex Risk. • New Profitability. • Must Focus on the Service not the Technology.
Convergence and Today. The VoIP Dilemma VoIP vs. IP Telephony
Convergence and Today. The VoIP Dilemma IP Convergence Defined
Convergence and Today. The VoIP DilemmaService Convergence across Networks All Media Cable IP Network Internet Video Communications Active Phone Book UnifiedMessaging Mobile / BB Roaming Multicast Service 802.xx Access 2G/3G Presence and Location iLocator Packet Mobile Network Circuit Mobile Network People simply want services that fit their lifestyle and are available anywhere, anytime.
Paltel Group Strategy • Paltel Group • Paltel – Fixed Line • Business Services Division • RE Holdings • Jawwal – Wireless Mobile • Pal Media – Content • Hadara – ISP services • Paltel Central Services
Paltel Group Strategy • Paltel Group • IP Intelligent Positioning. • Customer Centric. Must focus on customer needs. • Must not cannibalize existing revenue streams. • Will offer bundled or blended services under ONE Brand name. • Regionally will structure the services to address the different cultural preferences. • Will offer VOIP services as part of an offering or blended services. • The service companies must clearly communicate to Paltel their transport requirements with respect to new products and services.
Paltel Group Strategy • Paltel – Fixed Line • All networks will converge into one IP network • Paltel will be the network company. This includes FO, switching, IP infrastructure, access infrastructure and transmission etc. • Other group companies the services company • Paltel will migrate to NGN and IP applications • Migrations must create OPEX reductions and increased efficiencies. • All backbone infrastructure will be Paltel. • Testing and planned rollout of new services
Paltel Group Strategy • Paltel • Business Services Division • Will concentrate on offering IT services, billing, Call Center, Solution Integration, telecom consulting, distributorship with vendors. • IT technicians will be positioned in the Business Services Division and strategically placed so as to provide support and service. • Paltel will incubate this division until self supporting to become its own entity. • Provide Call Center solutions to Group and third parties. • Provide services to Group and third parties.
Paltel Group Strategy • Paltel • RE Holdings • All property and buildings will be under the control of the Paltel RE Division. • All maintenance will be handled by a central body in the RE Holdings division. • Building maintenance and cleaning supplies will be purchased through this central body.
Paltel Group Strategy • Jawwal – Wireless Mobile • Jawwal will offer wireless mobility services • Jawwal will expand their service offering to include IP based services • All gateway services will be contracted from Paltel • Jawwal must focus on ways to maximize the frequency assigned and to test extended range wireless technologies • Jawwal must improve their roaming agreements and enforce SLA’s with mobile operators
Paltel Group Strategy • Pal Media – Content • Pal Media will offer Broadcasting Services, Advertising and Production through the Media Center. • Extend the reach of the Media Center into the Region. • Pal Media will focus on Content development, acquisition, partnering and delivery. • Pal media will develop additional revenues from the “Content Exchange”. • Pal Media will explore artists, musicians, producers of short movies, writers etc and create a “Central Market Place” for the “Content Exchange”.
Paltel Group Strategy • Hadara – ISP services • Hadara will offer internet services and all ISP value added services • This includes: hosting, email, internet access, and any application services that are necessary • Provide engineering support to the Business Services division for network management services • Hadara’s services will include: • Channel marketing (VOIP) • Content Hosting • E commerce platforms • Database related development
Paltel Group Strategy • Paltel Central Services • The group must centralize common services such as, Training, PR, CSR, and any other functions that are duplicated across the subsidiary companies • The objective is to reduce the cost of duplicate activities. • Systems (internal communication/intranet) must be put in place to allow for quick and efficient processing of subsidiary company requests.
Paltel Regional and International Strategy • Objective: • TO Build a subscriber base and have the delivery mechanism (bandwidth control) and the content (applications servers) to deliver to the consumer and enterprise (subscribers). • In 5 years 90% of all Paltel’s revenues will come from “IP Value Added Services”. • To Build a SUB $10 ARPU IP Network.
Paltel Regional and International Strategy • IN PURSUIT OF PALTEL REGIONAL AND INTERNATIONAL GROWTH STRATEGY, FOUR ACTIVITIES MUST OCCUR SIMULTANEOUSLY: • Identifying opportunities with extraordinary growth potential in the MENA region. • Creating a portfolio of businesses that will grow the subscriber base rapidly and increase % country penetration. • Developing new and existing business that enhances the revenue generation through the increase of revenue minutes and value added IP services. • Cultivating and leveraging strategic relationships.
Paltel Regional and International Strategy • Build Subscriber Base • ISP’s. (Acquire) • Mobile Networks. (Build/Acquire) • Data Comm Operations. (Acquire) • Bandwidth and Access • Gateways. (Miami Hub and ME Gateways) • ATH. ( Fiber Project) • Satellite. (Globecomm)
Paltel Regional and International Strategy • Content. Development/Acquisition/Partner • ATH. Nap of Levant • Pal Media. Content Acquisition/Partnering • Enabling Technology • VoIP Platform. New Company Rollout • IP Core Network Migration.
Paltel Regional and International Strategy • Delivery Mechanism • Application Server Technology. (Centile) • Pal Media. Content Acquisition/Partnering • IP Value Added Enterprise Solutions. • Business Services Unit. • Integrated Solutions Provider. • Distributorships. • IP Telephony. • Contact Centers. • Group CSR. • 3rd Party CSR. • IP Telephony Services.
Gateway Plan Gateway Established in Israel Paltel Business Services Operational Second Mobile Operator License Paltel Strategic Plan and Regional Investment Plan complete FO Link to TE Complete IP Migration Begins Paltel Contact Center Launched IP Migration Plan Completed and Sent to Vendors VOIP Company Operational Miami Hub Setup Paltel Group Strategy Review VOIP Company Setup Batelco Jordan Complete VOIP Retail Launched Second ISP Acquisition Third Party Application Services NAP of Levant Rollout Timeline of Events and Decisions 4th Quarter 2005 1st Quarter 2006 2nd Quarter 2006 3rd Quarter 2006
Budgetary Project Costs • ISP’s Batelco Jordan 15 million USInvestment in Bayanat (Saudi Arabia) 50 million US Other ISP license 70 million US • GATEWAY Gate Way Miami and FCC 214 LICENSE (start up) 15 million USFO Connection to Flag Telecom (Gaza to Suez) 10 million USInternational Gateway Company 50 million US • VOIP VOIP Company DUBAI (start up) 10 million US • CONTACT CENTER 500 seat IP Contact Center (start up) 10 million US • CONTENT HOSTING AND DELIVERYInvestment in Accelerator Technology Holdings (ATH) 10 million US • MOBILE OPERATORSKazakhstan Operation 15 million USTwo New Mobile License 200 million US • BANDWIDTH (SATELLITE) Globecom (GCOM) 50 million US • DATA COMM Algeria Data Comm License 20 million US • APLICATION SERVER TECHNOLOGY Centile 10 million US Total Investment (these figures are budgetary and approximated) 535 million US
In Five Years • 90% of Paltel’s Revenues will come from IP related services and added Value Offerings. • Paltel will not look like the Traditional POTS that it is Today. • Revenues will be in excess of $1 Billion USD.
In Five Years IF every user contributed $10/month for service = 14.5 million x $10 = $145 million/month OR $1.7 billion per annum Gross Revenues
In Five YearsPotential Opportunity PALTEL Revenues $Millions In 5 years PALTEL will be a Global player with Revenues in excess of ONE BILLION. IP ADDED VALUE SERVICES 2006 2005 2007 2008 2009 2010