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Infobalt 2002

Jesper Andkaer Pedersen Chief Financial Officer

UAB “Bite GSM”

Mobile operators and partnership approach

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Outline

About Bitė GSM

Bitė and partnerships

Case studies in product development

Growth in the future through partnerships

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Bitė GSM in brief

• Bitė GSM was established in 1995 • Full scale provider of mobile and internet services • GSM 900 and 1800 mobile network • Data and Internet license

• Roaming with 155 operators in 74 countries • 427 employees • TDC is 100% shareholder

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Focus on value creation through partnerships

The operator

Mobile market

There is an acceleration pressure on the Operator to perform excellent in the market and be cost effective

Bitė is viewing partnership as a cost effective way to improve the process of creating value.

Financial market Value = result from operation – Investment x cost of capital (shareholder Value)

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Partnerships and value creation

“Vendor ship” Partnership

Value creation Through focus on cost and quality

Through focus on synergies

Interface with Partner

Standard Non-standard

Corporation Official and governed by rules

Non official with shard process and perhaps decisions

Dependency of the

vendor/partner

Company is not depended of the

vendor

Company is semi depended of the

Partner

Transaction cost Low Higher

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Purchasing system and process

Furniture'sCars

Contractor work

PartnershipsKnowledge transfer

Product developmentContent providers

Vendor shipsPhysical Infra structure

Enterprise Resource PlanningHandset

Value

Core/unique

Cost/Non core

What is the optimal relationship ? F

ocu

s

Activities in the value chain

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Partnership is a cost effective channel to new competencies

Bitė is viewing Partnership as a way to improve significantly our value creating process in a cost effective way.

Partnership is giving Bitė access to:

Complementary competencies and technology, which together with Bites own capabilities is creating synergies in Bites value chain.

Substituting competencies and technology, which is necessary due to the needed high level of skills.

Partnering is a cost effective approach to get access to competencies and technologies, which only hardly and very costly can be copied in Bitė.

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UAB “Havera”

Bitė is today already in the game of partnerships!

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Case study in product development

Partnership was established in mobile internet content and applications area, where the development of mobile internet concept required higher level of relationship than “vendor ships”.

Bitė and the content provider supplemented each other with the strongest competences:

Infrastructure and customer base

Know-how about application development and content

Market

Product

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Case study in product development

A partner is highly involved in the development of Bitės entertainment IVR products to be launched to the Lithuania market.

The partner is providing Bitė with:

Product ideas

Implementation schemes

Content

Follows up on service usage

Bitė providing partner with:

IVR machine programming

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Benefits in both cases

Bitė benefits:

High value products

Low production cost

=> Attractive product

Market differentiation

Consistency of concept

Partner benefits:

Development of mobile infrastructure know-how

Opportunity to apply the know-how to other projects and customers

Revenue share model

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Step 6: Education of usersPOS support

Dealers support

Step 5: Outsource content aggregatorsChannel services

Simplify the connection process

Step 4: Create service brandCross-promo with partners

Education of the market

Step 3: Promote transparent business model for partnersSharing principles

Cross-promo of services – one of the sharing conditions

Step 2: Open billing platformAssist in partners service selling

Reduce costs and thus share

Step 1: Simplify pricing structuresReduce start-up charges

Even based charging – no charging for access the technology

Benefits in both casesBite’s partnership model

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Partnerships is mainly related to the “high end”of the product hierocracy

Capacity and connectivity

Applications

Content

Value to the market

Infrastructure

Partnerships

Vendor ships

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Nokia

CreditSuisse

2002perspective

Data as the future ARPU driver- but at a lower level

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The “non-voice”/data part is the future driver and this involves competencies and technologies outside the traditional mobile operators.

Bitė view partnership as a very important element in the strategy to grasp our share of the future growth

Bitė will grow future business through partnerships

Services and applications serving the consumer on the move

Entertainment services stimulating consumers leisure time

The future is about:

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Bitė will grow future business through partnerships

To perform excellent we will need to team up with excellent value chains from other industries, who have complementary competencies and technologies.

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Bitė – communication for everyone