Competitive Business CaseCompetitive Business CaseUBI – Dec/2003UBI – Dec/2003

Alex Cutrim / Suzana RomaAlex Cutrim / Suzana Roma

Layered, Multi-Player Mobile Industry Layered, Multi-Player Mobile Industry Creates Complex Business EnvironmentCreates Complex Business Environment

Corporate Personal

Consumer

Basic Components Processors, electronics, plastics,…

Telecomm. Equipments

Core network switching and transmission equip., wireless handsets, satellite equip.,…

Service Provider

s

Vodafone, T-Mobile, …

Good Morning Electronic InformationTaiwan basedSupplies: Nokia, Ericsson, Motorola, Siemens

SanyoBattery maker: Nokia, Ericsson, Motorola

Texas InstrumentsBluetooth capabilities, wireless infrastructure, RF products

Geo Tex Creative Plastics

Components - No clear leaders, fragmented

NokiaMotorola Telecommunications

Ericsson

Alcatel Siemens Information and Communications

Cell phone - Dominated by Top 5

Service Providers - Abundance of Players

Towering Service - Major PlayersAmerican Tower Corporation14600 towers, USA, Brazil, Mexico

Crown Castle InternationalAustralia, P.Rico, UK, USAAT&T, Sprint

Pinnacle Towers, Inc.2300 towers. USA, Canada

SBA Comm., Inc.3700 towers. USA, P.Rico

Spectrasite Comm., Inc. 8000 towers. USA, Canada

Alltel AT&T wireless group

Cellular One

Cingular WirelessCentennial Comm.

Century Tel.

Dobson Comm.

Dynamic Mobile Data

GoAmerica

MCI WorldComMetricom

Nextel Comm.

Southern LincSprint PCS

T-MobileTriton PCS

Vodafone

VoiceStream Wireless

Western Wireless

WinphoriaNetworks

Visions of a Near Future…Visions of a Near Future…

Estimate of 1 Billion mobile subscribers by 2003!

Visions of a Farther Future…Visions of a Farther Future…Connecting OBJECTS with BUSINESS APPLICATIONS for added-value products and services

Mobile Network

Business

House

ERP

CRM

dB

CarTV

www.com

Consumer

Employee

The real challenge is connecting The real challenge is connecting Business Interests to a Common GoalBusiness Interests to a Common Goal

The ChallengeThe ChallengeIntegrating the plethora of systems and protocols along the value chain

Mobile NetworkBusiness

House

ERP

CRM

dB

CarTV

www.com

Consumer

Employee

Cellphones, PDAs, smartphones, blackberry,…

WLAN, bluetooth,…

WAP, Windows, Linux,…

Java, XML, XHTML, VXML,…

GSM, CDMA, TDMA, GRPS, UMTS, EDGE, W-CDMA,…

Microsoft, Symbian, Palmsource,…

… … under a changing Technological under a changing Technological LandscapeLandscape

1G1G

2G2G

3G3G

1st Generation: Analogue

Limited to Voice Services

Always-on: limited batt. life=> limited mobility

Subject to cloning/fraud

2nd Generation: Digital

Voice and Data (SMS)

Intel tracking: extended batt. life

Limitation on # connecting users

3rd Generation: Broadband Digital

Voice and Extended Data (MMS)

Higher connecting users => populated areas

2.5G2.5GGPRS (GSM)

EDGE

UM

TS

GSMTDMA(850 MHz)

CDMA

WCDMA

CDMA2000

Opposing Strategies Will Slow the Opposing Strategies Will Slow the Expansion ProcessExpansion Process

ProfitProfit

Diversity in Technologies

Complexity of Hardware

Abundance of Equipment Types

Increased Equip. Revenues

Standardization of Technologies

Synergies in value chain

Efficiency, Lower Investments

Increased Service Value

Service ProvidersService Providers Telecomm. EquipmentTelecomm. Equipment

In the End, Consumer will DecideIn the End, Consumer will DecideStandardization of

TechnologiesDiversity of

Technologies

Consolidation

Faster Transmission, More Power

Higher On-going Costs

Proliferation of Devices / Providers

Limited Transmission

Higher Start-up Costs

More Servic

e

“You Get What You Pay For”

“You Pay for What We Have”

Rapid Expansion in Mobile Internet Use Will Rapid Expansion in Mobile Internet Use Will Test Capability of Providers to Keep UpTest Capability of Providers to Keep Up

7

194

2

89

0.1

5230

79

Europe North America LatinaAmerica

Asia-Pacific

Mobile Internet Users

2000

2005

MM

VodafoneVodafone T-MobileT-MobileMissionMission We help people find information, entertainment or We help people find information, entertainment or

assistance wherever they are.assistance wherever they are.We will deliver the best customer We will deliver the best customer experience in mobile communication experience in mobile communication – the true freedom to move- on a – the true freedom to move- on a global scale.global scale.

VisionVision Our vision is to be the world’s mobile telecommunication Our vision is to be the world’s mobile telecommunication leader- enriching customer’s lives, helping individuals, leader- enriching customer’s lives, helping individuals, business and communities be more connected in a business and communities be more connected in a mobile world. mobile world.

They will prefer Vodafone because the experience of They will prefer Vodafone because the experience of using Vodafone will be the best they can find. using Vodafone will be the best they can find.

We will lead in making the mobile the primary means of We will lead in making the mobile the primary means of personal communication for every individual around the personal communication for every individual around the world.world.

Through leadership,our scale, our scope and our Through leadership,our scale, our scope and our partnerships, we will bring online mobile services to the partnerships, we will bring online mobile services to the world.world.

Our core slogan is “Get More” more Our core slogan is “Get More” more value for money, more freedom of value for money, more freedom of choice, more options, more services; choice, more options, more services; without more expenses.without more expenses.

ObjectivesObjectives The Company’s objective is increasingly focused on The Company’s objective is increasingly focused on voice and data revenue growth and margin voice and data revenue growth and margin improvement.improvement.

Provide the best possible return for the shareholders.Provide the best possible return for the shareholders.

To extend our operational leadership of the industry .To extend our operational leadership of the industry .

To extend service differentiationTo extend service differentiation

To provide our customers with safe, reliable products To provide our customers with safe, reliable products and services that represent good value for money.and services that represent good value for money.

Global brand for global movers: Global brand for global movers: customers are on the move round the customers are on the move round the globe and want to use their mobile globe and want to use their mobile phones everywhere.phones everywhere.

Transnational Company: be one teamTransnational Company: be one team

Individual Markets and CulturesIndividual Markets and Cultures

Competitive

Assessment

Research &

Development

Global Presence

Growth Strategy

Products

Market Image

Organization

al Structure

Growth StrategyGrowth Strategy

VodafoneVodafone T-MobileT-MobileIncrease marketing focus on our Increase marketing focus on our established high quality customer baseestablished high quality customer base

Provide its customer seamless trans-Provide its customer seamless trans-Atlantic servicesAtlantic services

Invest in delivering Vodafone branded, Invest in delivering Vodafone branded, easy to use, customer propositions for easy to use, customer propositions for mobile voice and data. One worldwide mobile voice and data. One worldwide brand => Brand awareness => preferencebrand => Brand awareness => preference

A recognizable brand, present on A recognizable brand, present on international markets, assuring the same international markets, assuring the same high quality everywherehigh quality everywhere

Maximize the benefits of scale and scope, Maximize the benefits of scale and scope, through the use of partner network through the use of partner network agreements, by increasing equity interests agreements, by increasing equity interests in business where the group has existing in business where the group has existing shareholdingsshareholdings

Subsidiaries are still responsible for Subsidiaries are still responsible for performance in their countries. They know performance in their countries. They know best what their customers want and need, best what their customers want and need, and will be the ones from whom the and will be the ones from whom the important ideas will comeimportant ideas will come

Understand, anticipate and respond to the Understand, anticipate and respond to the needs of our customers and provide them needs of our customers and provide them with innovative products and serviceswith innovative products and services

Make further acquisitions or disposals of Make further acquisitions or disposals of business business

Global PresenceGlobal Presence

VodafoneVodafone T-MobileT-Mobile123 million customers spanning 123 million customers spanning

the key global cellular markets in the key global cellular markets in 28 countries28 countries

Deutsche Telekom and its Deutsche Telekom and its subsidiaries and affiliates provide subsidiaries and affiliates provide wireless services to approximately wireless services to approximately 82 million customers worldwide82 million customers worldwide

Still, its global strategy appears Still, its global strategy appears less than clear outside its less than clear outside its European heartland, especially in European heartland, especially in the United Statesthe United States

It is the first to operate a trans-It is the first to operate a trans-Atlantic mobile network based on Atlantic mobile network based on GSMGSM

In the United Kingdom, it carved In the United Kingdom, it carved out a position of market out a position of market dominance against a powerful dominance against a powerful rival, partially owned by the former rival, partially owned by the former telecom monopoly, BTtelecom monopoly, BT

Its subsidiaries and affiliates are Its subsidiaries and affiliates are among the first operators to use among the first operators to use the future oriented GPRSthe future oriented GPRS

$300 Billion in acquisitions$300 Billion in acquisitions

ProductsProducts

VodafoneVodafone T-MobileT-MobileVodafone Live!: bringing customers a world of Vodafone Live!: bringing customers a world of

colour, sound and picturescolour, sound and pictures

Acquisition of Vizzavi is expected to continue Acquisition of Vizzavi is expected to continue to drive a significant part of the Group's growth to drive a significant part of the Group's growth in future yearsin future years

Lifestyle and mobility:Lifestyle and mobility:The company is broadening its mobile multimedia services The company is broadening its mobile multimedia services spectrumspectrumColor displays, multitonal ringing, Java capability and GPRS Color displays, multitonal ringing, Java capability and GPRS connections have made many mobile multimedia services more connections have made many mobile multimedia services more attractive, faster and easierattractive, faster and easierT-Mobile t-zones are characteristic for this next content generation.T-Mobile t-zones are characteristic for this next content generation.Six popular channels: t-info, t-sports, t-news, t-games, t-music. Six popular channels: t-info, t-sports, t-news, t-games, t-music. More than 100 partners with over 500 services providing a wide More than 100 partners with over 500 services providing a wide variety of contentvariety of content

Mobile Office from Vodafone: high speed data Mobile Office from Vodafone: high speed data card enabling customers to access their normal card enabling customers to access their normal business applications when out of the officebusiness applications when out of the office

A customised Vodafone branded GPRS data A customised Vodafone branded GPRS data card provides optimal service on Vodafone card provides optimal service on Vodafone networknetwork

Making the Office Mobile:Making the Office Mobile:The products provide secure, efficient communication between the The products provide secure, efficient communication between the mobile employees by optimizing essential office applications, such mobile employees by optimizing essential office applications, such as e-mail and office Outlook.as e-mail and office Outlook.Products already available: Mobile Access Portal, Mobile Service Products already available: Mobile Access Portal, Mobile Service Portal, BlackBerry Solution or the T-Mobile MDA and SidekickPortal, BlackBerry Solution or the T-Mobile MDA and Sidekick

Wireless Office: replace desk phones or Wireless Office: replace desk phones or replace their entire PBXreplace their entire PBX

New technologies: Acquisition of UMTS licenses in six european New technologies: Acquisition of UMTS licenses in six european countriescountries

Blackberry: advanced wireless handhelds, Blackberry: advanced wireless handhelds, software and servicessoftware and services

Mobile messaging: The company launched GPRS in 2002 in Mobile messaging: The company launched GPRS in 2002 in EuropeEurope

Connected by Vodafone: descriptor applied to Connected by Vodafone: descriptor applied to mobile data solutions provided through mobile data solutions provided through partnerships between Vodafone and leading partnerships between Vodafone and leading mobile device manufacturersmobile device manufacturers

Market ImageMarket Image

VodafoneVodafone T-MobileT-MobileFor many early British mobile users, For many early British mobile users,

Vodafone became synonymous with Vodafone became synonymous with the mobile phone, as in “call me on my the mobile phone, as in “call me on my Vodafone."Vodafone."

As part of its brand philosophy, the As part of its brand philosophy, the company will strengthen its company will strengthen its commitment to quality and a superior commitment to quality and a superior range of voice and data productsrange of voice and data products

Vodafone live!: Best Consumer Vodafone live!: Best Consumer Wireless Application or Service at the Wireless Application or Service at the GSM Association Awards, and, most GSM Association Awards, and, most recently Best New Service at the recently Best New Service at the World Communications Awards and World Communications Awards and Best Network Service at the Mobile Best Network Service at the Mobile Choice Consumer AwardsChoice Consumer Awards

The T-Mobile brands symbolizes The T-Mobile brands symbolizes reliability, attractiveness, and reliability, attractiveness, and innovation throughout Europe and the innovation throughout Europe and the United States.United States.

High profile sponsorship of Ferrari High profile sponsorship of Ferrari and Manchester Unitedand Manchester United

Spokestar Catherine Zeta-JonesSpokestar Catherine Zeta-Jones

Vodafone Hopes to Make Global Vodafone Hopes to Make Global Mobile Mean More Than Wireless Mobile Mean More Than Wireless VoiceVoice

A recognizable T-Mobile brand, A recognizable T-Mobile brand, present on international markets, present on international markets, assuring the same high quality assuring the same high quality everywhere, is an important everywhere, is an important orientation.orientation.

Organizational StructureOrganizational Structure

VodafoneVodafone T-MobileT-MobileIt developed global It developed global

functions for supply chain, IT functions for supply chain, IT and technology and technology management.management.

One team: Main activities, One team: Main activities, such as marketing, platform such as marketing, platform harmonization, procurement, harmonization, procurement, and brand migration will be and brand migration will be managed centrally in futuremanaged centrally in future

Individual markets and Individual markets and cultures: Subsidiaries are cultures: Subsidiaries are responsible for performance responsible for performance in their countriesin their countries

Research and DevelopmentResearch and Development

VodafoneVodafone T-MobileT-MobileNTT DoCoMo and J-Phone (owned partially by NTT DoCoMo and J-Phone (owned partially by Vodafone) launch 3G networkVodafone) launch 3G network

Lucent Technologies and T-Mobile launched a Lucent Technologies and T-Mobile launched a joint pilot project to evaluate secure high-speed joint pilot project to evaluate secure high-speed data services using 3G UMTS technology.data services using 3G UMTS technology.

Vizzavi is Vodafone’s 50/50 joint venture with Vizzavi is Vodafone’s 50/50 joint venture with media giant Vivendi. Essentially it is looking to be media giant Vivendi. Essentially it is looking to be the Yahoo! of the mobile internet.the Yahoo! of the mobile internet.

Joined forces with Google to bring advanced Joined forces with Google to bring advanced search capabilities to mobile internet portalsearch capabilities to mobile internet portal

Signed agreements with content providers: MTV, Signed agreements with content providers: MTV, Universal Mobile, AOL, Aspiro, CNN, Digital Universal Mobile, AOL, Aspiro, CNN, Digital Bridges, E*Trade, MapQuest, NGame, Picofun, Bridges, E*Trade, MapQuest, NGame, Picofun, PocketBoxOffice, PocketThis, Sabre, PocketBoxOffice, PocketThis, Sabre, TicketMaster & CitySearch, Upoc, ViAir’s, TicketMaster & CitySearch, Upoc, ViAir’s, ZagataZagata

Vodafone made a joint-venture with Oracle to offer Vodafone made a joint-venture with Oracle to offer field workers access to key business systems. field workers access to key business systems. Vodafone partnerships with SAP and Hewlet-Vodafone partnerships with SAP and Hewlet-Packard to collaborate on Mobile Enterprise Packard to collaborate on Mobile Enterprise solutionssolutions

Microsoft partners with T-Mobile HotSpot to Microsoft partners with T-Mobile HotSpot to promote Wi-Fi access for Windows Mobile promote Wi-Fi access for Windows Mobile CustomersCustomers

Vodafone and Microsoft join forces to create Vodafone and Microsoft join forces to create programming standards for software that will programming standards for software that will eventually link computers and mobile phoneseventually link computers and mobile phones

T-Mobile will deploy 3G Lab’s Trigenix product: T-Mobile will deploy 3G Lab’s Trigenix product: the goal is to enable users to create their own the goal is to enable users to create their own personalized interface.personalized interface.

Launches Global Blackberry Solution. Has worked Launches Global Blackberry Solution. Has worked closely with Research In Motion to deliver closely with Research In Motion to deliver customized BlackBerry solution.customized BlackBerry solution.

Working closely with Research in Motion to offer Working closely with Research in Motion to offer Blackberry terminals supported by the operator’s Blackberry terminals supported by the operator’s GRPS and “push” e-mail services.GRPS and “push” e-mail services.

Competitive

Assessment

Research &

Development

Global Presence

Growth Strategy

Products

Market Image

Organization

al Structure

VodafoneVodafone T-MobileT-MobileStrengthsStrengths Global reach, Global reach,

strategic executer, strategic executer, industry enablerindustry enabler

Agile, opportunistic Agile, opportunistic with current with current possibilitiespossibilities

WeaknessesWeaknesses Technology base in Technology base in US, “over focus” on US, “over focus” on global Brand strategyglobal Brand strategy

Lack of long-term Lack of long-term focusfocus

OpportunitiesOpportunities Leverage global Leverage global capabilities to drive capabilities to drive mobile standardsmobile standards

Keep close distance Keep close distance to leader to avoid to leader to avoid risksrisks

ThreatsThreats Value for money of Value for money of 3G derived mobile 3G derived mobile services, price paid services, price paid for 3G licensesfor 3G licenses

Value for money of Value for money of 3G derived mobile 3G derived mobile servicesservices

Executive SummaryExecutive Summary

Vodafone is well positioned to become the Vodafone is well positioned to become the World’s true leader in Mobile servicesWorld’s true leader in Mobile services Focused, global, executionFocused, global, execution Leveraging global presence to drive mobile Leveraging global presence to drive mobile

industry to deliver increased valueindustry to deliver increased valueThe real power of a global player is The real power of a global player is notnot in in leveraging seamless global servicesleveraging seamless global services

T-Mobile has the technological global T-Mobile has the technological global competitive edge to be in the forefront of competitive edge to be in the forefront of the industrythe industry Does not appear to be committed to thisDoes not appear to be committed to this

Vodafone’s Choice for Verizon in the US Vodafone’s Choice for Verizon in the US appears to be driven by quality opposed to appears to be driven by quality opposed to

strategystrategy

Verizon is based on the Verizon is based on the CDMA platformCDMA platform

Not one of Verizon Not one of Verizon Wireless services carry Wireless services carry the Vodafone brandthe Vodafone brand

““Put option” on $10 billion Put option” on $10 billion 45% stake can be 45% stake can be exercised by Vodafoneexercised by Vodafone

AT&T Wireless and T-AT&T Wireless and T-Mobile USA are GSMMobile USA are GSM

Are you encouraged to switch providers based in WNP?

12.2

24.4

24.5

27.1

32.2

33.1

33.3

34.8

38.2

37.0

37.6

22.6

TracFone

Alltell

Nextel

Cingular

Sprint PCS

Cricket

Cellular One

US Cellular

Qwest

AT&T

T-Mobile US

Verizon

Reference SourcesReference Sources

BIGresearchBIGresearchCeBit NewsCeBit NewsCNET News.comCNET News.comDuke UniversityDuke UniversityGartnerGartnerGlobalWirelessNewsGlobalWirelessNewsGSM associationGSM associationgsm worldgsm worldIntermarket GroupIntermarket GroupMicrosoftMicrosoftMIT UniversityMIT UniversityMULTEXMULTEX

New York TimesNew York TimesPMN PublicationsPMN PublicationsQualcommQualcommReutersReutersRobert Kahn, “Father of Robert Kahn, “Father of the Internet”the Internet”The Motley FoolThe Motley FoolThis Is Money.comThis Is Money.comT-Mobile InternationalT-Mobile InternationalVodafoneVodafoneWall Street JournalWall Street JournalWorld Investment AKWorld Investment AKYahoo! FinanceYahoo! Finance

About the AuthorsAbout the Authors

Suzana Roma is a Statistician majorSuzana Roma is a Statistician majorShe has broad experience with applied statistics She has broad experience with applied statistics to Marketing Intelligenceto Marketing IntelligenceShe has worked in several consumer oriented She has worked in several consumer oriented companies such as Coca-Cola, Telemar companies such as Coca-Cola, Telemar (Telecom) and Fininvest (Bank)(Telecom) and Fininvest (Bank)suziroma@yahoo.comsuziroma@yahoo.com

Alex Cutrim is an Electronics Engineer majorAlex Cutrim is an Electronics Engineer majorHe has extensive practical background in He has extensive practical background in Strategic Intelligence functionsStrategic Intelligence functionsHe has worked in several areas of The Coca-He has worked in several areas of The Coca-Cola Company and SonyCola Company and Sonyalexc@domain.com.bralexc@domain.com.br