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1 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Operational efficiencyBenchmark based on published data [Level 1]
Mature markets*Updated 4 July, 2011
Nokia Siemens Networks
Benchmarkingefficiency.benchmarking@nsn.com
*) Markets with Very high or High UN Human Development Index 2010 (>0,677) and High or Upper ITU ICT Development Index 2008 (>3,64)
2 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
1. Level 1 benchmarkingMobile operators
3 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
4 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 23.5.2011
Telia, SESonera, FI
Netcom, NO
Telia, DK
EMT, EE
LMT, LV
Omnitel, LT
Yoigo, ES
MegaFon, RU
T-Mobile, AT
T-Mobile, CZ
T-Mobile, HU
T-Mobile, NL
T-Mobile, HR
T-Mobile, SK
T-Mobile, US
8
1
9
Cosmote, RO
7 O2, SK
O2, IE
Telefnica, UY 4
Telefnica, VE
10
E-plus, DE
BASE, BE
Bit, LTBit, LV
Telenor, HU2 3
Telenor, RS5
Elisa, EE
3, SE+DK
Si.mobil, SI
6
Vip operator, MKMobiltel, BG
Vip mobile, RSVelcom, BY
SFR, FR
Bouygues Telecom, FR
Tele2, SE
Tele2, NO
Tele2, LT
Tele2, LV
Tele2, EE
Tele2, HR
Tele2, NL
Tele2, RU
Pelephone, IL
Cellcom, IL
Optimus, PT
Turkcell, TR
Astelit Life, UA Astelit Life, BY
Wataniya Telecom, KW
Mobily, SA
TracFone, US
SK Telecom, KR
Avea, TR
AT&T, US
Verizon, US
Sprint Nextel, US
Telus, CARogers, CA
Bell Canada, CA
Mobilcom Debitel, DE
MetroPCS, US
U.S. Cellular, US
Leap Wireless, US
R = 0,92
0
10
20
30
40
50
60
70
0 5 10 15 20 25 30 35 40 45 50
Reven
ue p
er
su
bscri
pti
on
per
mo
nth
[E
UR
]
OPEX per subscription per month [EUR]
Legend1=Cosmote, GR2=Digi, MY3=Telenor, ME4=Vivo, BR5=TIM, BR
6=VIPnet, HR7=Orange, PL8=PTC Era, PL9=Globul, BG10=Oi, BR
Trend line
0% EBITDAmargin line
High competition level means lower EBITDA margin
Mobile: ARPU vs. OPEX per subscription Q1 2011
Mature marketsAverage EBITDA margin 31,7%*Down from 33,9% in FY 2010*) Many operators have not reported in Q1 2011
Trend line: EBITDA margin % lower
with higher ARPU customers
Disproportionate customer acquisition
& retention costs driving OPEX per sub
Average EBITDA margin line
Source: Q1 reports for operators with fiscal year ending December if reported 22 May
Reading guide Reporting period for operators with fiscal year
(FY) ending December.
Operators with
alternative reporting
cycle marked 1) for FY
ending in March or 2) for
FY ending in June
Operator type: publicly reported data in graphical format
Market type
Operators
Data normalized into
common currency
4 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Telia, SESonera, FI
Netcom, NO
Telia, DK
EMT, EE
3
Omnitel, LT
Yoigo, ES
MegaFon, RU
T-Mobile, AT
T-Mobile, CZ
T-Mobile, HU
T-Mobile, NL
8
T-Mobile, SK
T-Mobile, US
7
1
11
Cosmote, RO
Orange, PL
O2, SK
O2, IE
Telefnica, UY 6
Telefnica, VE
12
5
BASE, BE
Bit, LTBit, LV
Telenor, HU2 4
Telenor, RS10
Elisa, EE
3, SE+DK
Partner Orange, IL
MTS, UA
MTS, BY
Si.mobil, SI
9
Vip operator, MKMobiltel, BG
Vip mobile, RSVelcom, BY
SFR, FR
Bouygues Telecom, FR
Tele2, SE
Tele2, NO
13
Tele2, LV
Tele2, EE
Tele2, HR
Tele2, NL
Tele2, RU
Pelephone, IL
Cellcom, IL
TMN, PT
Optimus, PT
Turkcell, TR
Astelit Life, UA Astelit Life, BY
Vimpelcom, RU
Mobitel, SI
Wataniya Telecom, KW
Zain, KW
Zain, BH
Zain, SA
Mobily, SA
TracFone, USMaxis, MYCelcom, MY
SK Telecom, KR
Avea, TR
AT&T, US
Verizon, US
Sprint Nextel, US
Telus, CARogers, CA
Bell Canada, CA
Mobilcom Debitel, DE
MetroPCS, US
U.S. Cellular, US
Leap Wireless, US
R = 0,9173
0
10
20
30
40
50
60
70
0 5 10 15 20 25 30 35 40 45 50
Reven
ue p
er
su
bscri
pti
on
per
mo
nth
[E
UR
]
OPEX per subscription per month [EUR]
Legend1=Cosmote, GR2=Digi, MY3=LMT, LV4=Telenor, ME5=E-plus, DE
6=Vivo, BR7=T-Mobile, PL8=T-Mobile, HR9=VIPnet, HR10=TIM, BR
11=Globul, BG12=Oi, BR13=Tele2, LT
Trend line
0% EBITDAmargin line
High competition level means lower EBITDA margin
Mobile: ARPU vs. OPEX per subscription Q1 2011
Mature marketsAverage EBITDA margin 32,3%*Down from 33,9% in FY 2010*) Many operators have not reported in Q1 2011
Trend line: EBITDA margin % lower
with higher ARPU customers
Disproportionate customer acquisition
& retention costs driving OPEX per sub
Average EBITDA margin line
Source: Q1 reports for operators with fiscal year ending December if reported 1 July
5 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
0,00
0,05
0,10
0,15
0,20
0,25
T-M
ob
ile,
NL
VIP
ne
t, H
R
O2, IE
Yoig
o, E
S
Bell
Canada,
CA
Netc
om
, N
O
Te
lia, D
K
Bouygues T
ele
com
, F
R
Tele
fnic
a, V
E
Telu
s,
CA
Si.m
obil,
SI
T-M
obile
, C
Z
T-M
obile
, S
K
BA
SE
, B
E
TM
N,
PT
T-M
obile
, H
R
EM
T, E
E
Ro
ge
rs, C
A
Telia
, S
E
Optim
us, P
T
Viv
o, B
R
Sonera
, F
I
Tele
nor,
ME
Te
le2
, S
E
Pe
lep
ho
ne
, IL
Pa
rtn
er
Ora
ng
e,
IL
Cellc
om
, IL
T-M
obile
, A
T
T-M
obile
, H
U
TIM
, B
R
E-p
lus, D
E
T-M
obile
, P
L
Mobilt
el, B
G
Tele
fnic
a, U
Y
Tele
nor,
HU
Tele
nor,
RS
Maxis
, M
Y
LM
T, LV
Ora
nge, P
L
Celc
om
, M
Y
Glo
bul, B
G
Cosm
ote
, G
R
Om
nite
l, L
T
DiG
i, M
Y
Tu
rkc
ell,
TR
Spri
nt
Nex
tel,
US
Bit, LT
Ve
lco
m,
BY
T-M
obile
, U
S
Vim
pelc
om
, R
U
Av
ea
, T
R
Tra
cF
one
, U
S
Bit, LV
MegaF
on, R
U
Tele
2,
RU
Cosm
ote
, R
O
MTS
, B
Y
As
telit
Lif
e,
UA
MT
S, U
A
EU
R
Total revenue per minute Total OPEX per minute
Average revenue per minute 0,087 EURAverage OPEX per minute 0,058 EUR
Mobile: Total revenue and OPEX per call minute Q1 2011
Mature markets
Wide spread in the effective revenue and OPEX per call minuteJapan, Netherlands, Norway, France among the most expensive in the world
Lowest effective minute prices in Ukraine, Russia, Turkey
Markets with either high degree of
handset subsidies, low level of
competition or high data revenue
(Japan)
Source: Q1 reports for operators with fiscal year ending December if reported 1 July
6 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
-40%
-30%
-20%
-10%
0%
10%
20%
Telu
s, C
A
Tele
2,
SE
Te
len
or,
RS
Bell
Canada,
CA
Telia
, S
E
Sprint N
exte
l, U
S
Rogers
, C
A
Tele
fnic
a, U
Y
Viv
o, B
R
Velc
om
, B
Y
Netc
om
, N
O
T-M
obile
, H
U
T-M
obile
, U
S
Part
ner O
range,
IL
Sonera
, F
I
Pele
phone,
IL
MegaF
on, R
U
MTS
, B
Y
Te
le2
, R
U
Op
tim
us
, P
T
Ora
ng
e,
PL
T-M
obile
, P
L
Vim
pelc
om
, R
U
Bo
uy
gu
es
Te
lec
om
, F
R
Ce
llco
m,
IL
EM
T, E
E
T-M
obile
, N
L
Yoig
o, E
S
Tele
nor,
HU
Mobilt
el, B
G
Telia
, D
K
Tele
nor,
ME
T-M
ob
ile,
CZ
O2, IE
T-M
obile
, S
K
Ma
xis
, M
Y
Avea, TR
E-p
lus
, D
E
DiG
i, M
Y
Si.m
obil,
SI
Tele
fnic
a, V
E
TM
N, P
T
BA
SE
, B
E
MTS
, U
A
T-M
ob
ile, A
T
Cos
mote
, G
R
Bit, LT
Om
nitel, L
T
Aste
lit L
ife, U
A
TIM
, B
R
LM
T, LV
T-M
obile
, H
R
Glo
bul, B
G
Co
sm
ote
, R
O
VIP
net,
HR
Celc
om
, M
Y
Turk
cell,
TR
Bit, LV
Tra
cF
one, U
S
Total revenue per minute, change 2010->2011 Total OPEX per minute, change 2010->2011
Mobile: Total revenue and OPEX per call minute trend FY 2010 to Q1 2011
Mature markets
61% of the operators do not manage to reduce OPEX per minute as quickly as the price erosion
Some operators manage to increase effective price per minute without decreasing margin
The trend is based on average EUR rates for respective periodsSince 2008, the currency fluctuations have been extreme, meaning that a trend might not be the same in local currencyThis affects both revenue and OPEX, though
Average revenue per minute -7%Average OPEX per minute -6%
Source: Q1 reports for operators with fiscal year ending December if reported 1 July
7 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Telia, SE
Sonera, FI
Netcom, NO
Telia, DK
EMT, EE
LMT, LV
Omnitel, LT
Yoigo, ES
T-Mobile, AT
T-Mobile, CZ
T-Mobile, HU
T-Mobile, NL
T-Mobile, HR
T-Mobile, SK
T-Mobile, US
T-Mobile, PL
Cosmote, GR
Globul, BG
Cosmote, RO
Orange, PL
O2, SK
O2, IE
Vivo, BR
Telefnica, VE
Oi, BR
E-plus, DE
BASE, BE Bit, LT
TIM, BR
Partner Orange, IL
MTS, UA
MTS, BY
Pelephone, IL
Cellcom, IL
Turkcell, TR
Vimpelcom, RU
TracFone, US
SK Telecom, KR
AT&T, US
Verizon, US
Sprint Nextel, US
Telus, CA
Rogers, CA
Bell Canada, CA
MetroPCS, US
Leap Wireless, US
R = 0,2629
0%
10%
20%
30%
40%
50%
60%
0% 10% 20% 30% 40% 50% 60% 70%
EB
ITD
A m
arg
in
Blended churn rate
In the most competitive markets, operators fight for market share with high customer acquisition & retention costs
Mobile: EBITDA margin vs. churn Q1 2011
Mature markets
Trend line
Trend line: Churn has a negative impact on the EBITDA margin
Trend more negative in markets subsidising handsets heavily
Source: Q1 reports for operators with fiscal year ending December if reported 1 July
8 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
EBITDA margin
2010 restored the margin% to 2008 level (average 34%) even if top line suffered
Q1 2011 indicating a margin drop, but not all operators are reporting Q1 2011 Q1 is also seasonally weaker
Effective minute price erosion
Speeding up: 4% in 2010, 7% so far in Q1 2011 [in EUR]
Partially explained by increasing revenue from non-voice services
Churn
Clear correlation between higher churn and lower EBITDA margin
Indicating generally high customer acquisition costs Net OPEX spent on Marketing & Sales 44% of total
ConclusionsMobile, mature markets
9 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
2. Level 1 benchmarkingFixed operators
Note. For fixed, broadband & cable, the following subscription/line definition is used:
Included:
+PSTN/ISDN lines (incl leased lines & phone booths)
+carrier pre-select customers without operator's access line
+xDSL customers
+Cable TV customer
+fibre customers
+Ethernet customers
+WLL customers
+Wholesale customers (PSTN/ISDN, xDSL, ULL)
NOT INCLUDED:
- Internet dial-up customers
- Telephone over broadband bundle customers
- TV over broadband bundle customer
- Internet over broadband bundle customers
10 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Telia, SE
Sonera, FI
NextGenTel, NO
Telia, DK
Elion, EE
TEO, LT
Magyar Telekom, HU
Hrvatski Telekom, HRT-Com, SK
OTE, GR
Romtelecom, RO
TP, PL
Oi, BR
Invitel, HU
Partner Orange, IL
SFR, FR
GVT, BR Tele2, SE
Tele2, NO
Tele2, DE
Tele2, NL
Tele2, AT
Fastweb, IT
Bezeq, IL
Portugal Telecom, PT
Sonaecom, PTZon, PT
Telekom Slovenije, SI
TM, MY
SK Broadband, KR
Trk Telekom, TR
AT&T, US
Verizon, US
Comcast, US
Time Warner Cable, US
Cablevision, US
Telus, CA
Rogers, CA
Bell Canada, CA
Tiscali, IT
Com Hem, SE
Ono, ES
Telenet, BE
Freenet, DE
Netia, PL
Charter, US
Jazztel, ES
Unity Media, DE
UPC, NL
UPC, CH
VTR, CL
J:COM, JP
Ziggo, NL
R = 0,8884
0
20
40
60
80
100
0 10 20 30 40 50 60 70 80
Reven
ue p
er
su
bscri
pti
on
per
mo
nth
[E
UR
]
OPEX per subscription per month [EUR]
Trend line
0% EBITDAmargin line
Fixed, broadband & cable: ARPU vs. OPEX per subscription Q1 2011
Mature marketsAverage EBITDA margin line
Trend line: EBITDA margin % lower
with higher ARPU customers
Average EBITDA margin 33,7%*Up from 32,4% in FY 2010*) Many operators have not reported in Q1 2011
Incumbents above the line, challengers most often below
Source: Q1 reports for operators with fiscal year ending December if reported 1 July
11 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Telia, SE
Sonera, FI
NextGenTel, NO
Telia, DK
Elion, EE
TEO, LT
Telekom, DE
Magyar Telekom, HU
Hrvatski Telekom, HR
T-Com, SK
OTE, GR
Romtelecom, RO
Orange, FR
Orange, ES
TP, PL
Telefnica, CL
Telefnica O2, CZ
Telefnica, AR
Telesp, BR Telefnica, CO
Oi, BR
Invitel, HU
Telenor, NO
Alice, NL
Telecom Argentina, AR
Tellas, GR
HGC, HK
Comstar-UTS, RU
eircom, IE 2)
SFR, FR
GVT, BR
Tele2, SE
Tele2, DE
Tele2, NL
Tele2, ATFastweb, IT
m:tel, BA
Infostrada, IT
Bezeq, IL
Portugal Telecom, PT
Sonaecom, PT
Zon, PT
Telekom Slovenije, SI
Entel, CL
iiNet, AU 2)
PCCW, HK
NTT, JP 1)
KDDI, JP 1)
SoftBank Telecom, JP 1)
eAccess, JP 1)
TM, MY
Optus, AU 1)
SK Broadband, KR
Trk Telekom, TR
AT&T, US
Verizon, US
Comcast, US
Time Warner Cable, US
Cablevision, US
Telus, CA
Rogers, CA
Bell Canada, CA
Tiscali, IT
TalkTalk, UK 1)
Com Hem, SE
Ono, ES
Telenet, BE
Versatel, DE (residential)
Netia, PL
Iliad, FR
Kabel Deutschland, DE 1)BT+Openreach, UK 1)
Charter, US
Jazztel, ES
Unity Media, DE
UPC, NL
UPC, CH
VTR, CL
J:COM, JP
Numbericable Completel, FR
City Telecom, HKBN, HK, 3)
Ziggo, NL
CANTV, VE
R = 0,0359
0%
10%
20%
30%
40%
50%
60%
5% 15% 25% 35% 45% 55% 65% 75% 85% 95%
EB
ITD
A m
arg
in
Broadband of total narrowband & broadband subscription base
Trend line
Fixed, broadband & cable: Broadband subscription ratio vs. EBITDA FY 2010
Mature marketsPredominantly incumbent operators
Predominantly cable operators
EBITDA margin % possibly higher with
a high broadband subscription ratio
A polarised graph: high margins are in the 100%
broadband area (cable operators) or in the
incumbent operator area
Shows that own access infrastructure is
critical for margin
Source: FY reports for operators with fiscal year ending December; 9m reports for operators with fiscal year ending March [marked 1)], 1H reports for operators with fiscal year ending June
[marked 2)], 3m reports for operators with fiscal year ending September [marked 3)] if reported 1 July
12 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Telia, SE
Sonera, FI
Elion, EE Telekom, DE
Magyar Telekom, HU
Hrvatski Telekom, HR
T-Com, SK
OTE, GR
Orange, FR
TP, PL
Telefnica O2, CZ
Telenor, NO
eircom, IE 2)
Portugal Telecom, PT
Telekom Slovenije, SI
eAccess, JP 1)
Optus, AU 1)
Trk Telekom, TR
AT&T, US
BT+Openreach, UK 1)
Jazztel, ES
R = 0,0092
0%
10%
20%
30%
40%
50%
60%
1% 11% 21% 31% 41% 51% 61% 71% 81% 91%
EB
ITD
A m
arg
in
Wholesale of total narrowband & broadband subscription base
Trend line: EBITDA margin % not really affected
by wholesale ratio
Logical that margin would fall as another service provider
wants to make margin on top of the wholesale providers margin
Small sample, though, as many operators dont report wholesale
Fixed, broadband & cable: Wholesale subscription ratio vs. EBITDA FY 2010
Mature markets
Trend line
Source: FY reports for operators with fiscal year ending December; 9m reports for operators with fiscal year ending March [marked 1)], 1H reports for operators with fiscal year ending June
[marked 2)], 3m reports for operators with fiscal year ending September [marked 3)] if reported 1 July
13 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Telia, SE
NextGenTel, NO
Telia, DK
Eesti Telekom, EE
TEO, LT
Deutsche Telekom, DE
Magyar Telekom, HU
Hrvatski Telekom, HR
T-Com, SKOrange, FR
Orange, ES
TP, PL
Mobistar, BE
Telefnica, CL
Telefnica O2, CZ
Telesp, BR Telefnica, CO
Oi, BR
Invitel, HU
Telenor, NO
Tellas, GR
Comstar-UTS, RU
SFR, FR
GVT, BR
OTE, GR
Romtelecom, RO
Portugal Telecom, PT
Zon, PT
Telekom Slovenije, SI
iiNet, AU 2)
KDDI, JP 1)
AT&T, US
Verizon, US
Comcast, US
Time Warner Cable, US
Cablevision, US
Telus, CA
Rogers, CA
Tiscali, IT
Com Hem, SE
Ono, ES
Telenet, BE
Netia, PL
Iliad, FR
Kabel Deutschland, DE 1)
BT+Openreach, UK 1)
Charter, US
Jazztel, ES
Unity Media, DE
UPC, NL
UPC, CH
VTR, CLJ:COM, JP
Numbericable Completel, FR
Ziggo, NL
R = 0,0773
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
1,01 1,21 1,41 1,61 1,81 2,01 2,21 2,41 2,61
EB
ITD
A m
arg
in
Bundled services (Internet, TV, telephony) per broadband subscription
Fixed, broadband & cable: Bundled services ratio vs. EBITDA FY 2010
Mature markets
Trend line
EBITDA margin % higher with a
higher number of bundled
services (Internet, voice, TV) per
broadband subscription
Logical as a new service adds revenue,
but most of the OPEX comes with the
basic broadband connection
Source: FY reports for operators with fiscal year ending December; 9m reports for operators with fiscal year ending March [marked 1)], 1H reports for operators with fiscal year ending June
[marked 2)], 3m reports for operators with fiscal year ending September [marked 3)] if reported 1 July
14 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
EBITDA margin
Up to above 32% no negative effect of recession on margin% in spite of top line effect Q1 2011 margin even 33,7%, but too early to say if a trend shift as not all operators report Q1
Subscription mix
Operators with a high broadband to narrowband ratio have slightly higher margin
But it is key to own the infrastructure
High dependency on wholesale does not really affect margin
More services bundled per broadband connection raise margin
ConclusionsFixed, mature markets
Challengers in fixed are generally having a difficult position while incumbents continue to dominate
Incumbents have an upside bundling voice & TV on top of broadband
15 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
3. Level 1 benchmarkingIntegrated operators
Note. For fixed, broadband & cable part, the following subscription/line definition is used:
Included:
+PSTN/ISDN lines (incl leased lines & phone booths)
+carrier pre-select customers without operator's access line
+xDSL customers
+Cable TV customer
+fibre customers
+Ethernet customers
+WLL customers
+Wholesale customers (PSTN/ISDN, xDSL, ULL)
NOT INCLUDED:
- Internet dial-up customers
- Telephone over broadband bundle customers
- TV over broadband bundle customer
- Internet over broadband bundle customers
16 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Telekom, DE
T-Mobile, CZMagyar Telekom T-Mobile, HU
T-Mobile Online, NL
1
T-Com T-Mobile, SK
Maktel T-Mobile, MK
Crnogorski Telecom T-Mobile, ME
OTE Cosmote, GR
Romtelecom Cosmote, RO
TP Orange, PL
Mobistar, BE + Orange, LU
Telefnica, ES
Telefnica, CL
Telefnica O2, CZ+SK
Telefnica O2, CZ
Telefnica O2, DE
O2 Be, UK
2
Telesp+Vivo, BR
Telefnica, CO
Oi, BR
KPN, NL
TDC, DK
Telenor, NO
Telenor, DK
Telenor BB Glocalnet, SE
Telecom Italia TIM, IT
Telecom Argentina Personal, AR
Elisa, FI+EE
Partner Orange, IL
MTS Comstar-UTS, RU
Telekom Austria mobilkom, AT
SFR, FR
Bouygues Telecom, FR
Tele2, SE
Tele2, NO
Tele2, NL
Swisscom, CH
Belgacom Proximus, BE
Virgin Media, UK
DNA, FI
Bezeq Pelephone, IL
Portugal Telecom TMN, PT
Sonaecom Optimus, PT
Zon, PT
Telekom Slovenije Mobitel, SI
One, MKIpko, Kosovo
Etisalat, AE
Qtel, QA
Claro, CL
Claro, AR+PA+UY
3
Comcel, CO
KT KTF, KR
LG U+, KR
Trk Telekom Avea, TR
AT&T, USVerizon, US
Telus, CA
Rogers, CA
Bell Canada, CA
Tiscali, IT
du, AE
Telenet, BE
Freenet Mobilcom Debitel, DE
Jazztel, ES
R = 0,9145
0
10
20
30
40
50
60
70
80
0 10 20 30 40 50 60
Reven
ue p
er
su
bscri
pti
on
per
mo
nth
[E
UR
]
OPEX per subscription per month [EUR]
Legend1=Hrvatski Telekom T-Mobile, HR2=Telefnica, AR3=Claro, BR
Trend line
0% EBITDAmargin line
High competition level means lower EBITDA margin
Trend line: EBITDA margin % lower
with higher ARPU customers
Disproportionate customer acquisition &
retention costs driving OPEX per sub
Integrated (fixed & mobile): ARPU vs. OPEX per subscription Q1 2011
Mature marketsAverage EBITDA margin 33,9%*Up from 32,5% in FY 2010*) Many operators have not reported in Q1 2011
Average EBITDA margin line
Source: Q1 reports for operators with fiscal year ending December if reported 1 July
17 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
EBITDA margin
Stable at around 33%
ARPU continues to decrease, but so does OPEX per subscription
ConclusionsIntegrated, mature markets
EBITDA margin suggests that theres a benefit of being integrated
The margin lead is most often due to an incumbent market position, though
The operational efficiency for an integrated operator is still much driven by the market position within fixed and access to own fixed infrastructure
A challenger operator might not see the same benefit if becoming integrated as it lacks the incumbent market position
18 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
4. Higher operational efficiency in three steps
Nokia Siemens Networks efficiency improvement model
19 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Higher operational efficiency in 3 stepsNokia Siemens Networks model
Business impact and value
Step 1:
Benchmarking
Step 2:
Assessment
Step 3:
Solution
What are the issues? Why are the issues there? How can we solve the issues?
Review Review
20 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Operational efficiency benchmarking target & characteristics
Target Find out how your operational efficiency compares
with some of the most efficient operators in the world
Get input on which efficiency targets should be set for specific functions
Key characteristics
Company-wide benchmark for mobile, fixed or integrated operators Productivity, cost efficiency & performance is covered for 30 functions Tailored peer groups for operators both in mature & maturing markets Fresh: Peer group data updated three times a year, lifetime max 12 months Minimised workload: Less than 250 straight-forward numbers needed Quick: Ready in 4 weeks with a realistic 2 weeks for your data gathering
255 operator benchmarks done up to end of 2010
Deliverables of this step
Report with 100-150 pages and 390+ KPIs Management presentations including recommendations
What makes it unique?
Our correlation with your strategy & differentiation
Our solution orientation
21 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Analysis steps in Nokia Siemens Networks operational efficiency benchmarking
Quantitative analysis Qualitative analysis
Peergroup
Non-public data for 7-20
selected operators
Department & function
specific
Level 2&3
Peer group
comparison
390+ KPIs*
?
Better
Average
Worse
Str
ate
gy &
dif
fere
nti
ati
on
Positive gapIn line with strategy
Positive gapNot in line with
strategy: Overdoing
Area of further investigation
Above peers (positive gap)
Negative gapIn line: Deliberate
choice
Negative gapNot in line with
strategy
Potentially a problem
Below peers (negative gap)
Operators worldwide
Reported public data
for 400+ operators
Operator-wide
Level 1
National and international comparison
Ben
ch
mark
ed
op
era
tor
*) 429 KPIs for mobile, 429 for fixed and 390 for integrated operators
22 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
Benchmarking team: Contacts
Global capability, local contacts, single communication point:
efficiency.benchmarking@nsn.com
23 Nokia Siemens Networks Level 1 benchmark mature markets.ppt / efficiency.benchmarking@nsn.com / 4.7.2011
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