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Fixed Consumer Seminar
London, 15 June 2006
2
Safe harbor
Certain statements contained in this presentation constitute forward-looking statements. These statements may include, without limitation, statements concerning future results of operations, the impact of regulatory initiatives on our operations, our and our joint ventures' share of new and existing markets, general industry and macro-economic trends and our performance relative thereto, and statements preceded by, followed by or including the words “believes”, “expects”, “anticipates” or similar expressions. These forward-looking statements rely on a number of assumptions concerning future events and are subject to uncertainties and other factors, many of which are outside our control that could cause actual results to differ materially from such statements. A number of these factors are described (not exhaustively) in our 2005 Annual Report and Form 20-F.
All figures in this presentation are unaudited and based on IFRS. This presentation contains a number of non-GAAP figures, such as EBITDA and free cash flow. These non-GAAP figures should not be viewed as a substitute for our GAAP figures. Our non-GAAP measures may not be comparable to non-GAAP measures used by other companies.
All market share information in this presentation is based on management estimates based on externally available information, unless indicated otherwise. Certain figures may be subject to rounding differences.
3
Agenda
Robin Clements, Interim Director Consumer VoiceFixed Consumer Voice
Karin Valk, Director Consumer BroadbandFixed Consumer Internet
Ludolf Rasterhoff, Director TV and MediaFixed Consumer TV
Michiel Buitelaar, Director Consumer MarketFixed Consumer
Michiel Buitelaar, Director Consumer MarketConclusions
Eelco Blok, Board member responsible for FixedIntroduction
Fixed Consumer KPN’s strategy in the battle for the consumer
Michiel Buitelaar, Director Consumer Market
5
The Dutch consumer marketDynamic and competitive
Dutch consumers are rapidly adopting new technologies
The Netherlands is one of the most competitive markets in Europe
Broadband penetration2
Traditional competitors
‘Mobile only’ households1
6% 8%12%
16%
2002 2003 2004 2005
2%4%
6%9%
13%
Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06
VoIP lines in % of broadband3
15%27%
45%58%
2002 2003 2004 2005
New competitors with different business models
1 Households without fixed line or cable telephony connection; management estimates2 Percentage of households with a broadband connection; management estimates3 VoIP excluding peer-to-peer applications
6
Trends and strategyAttack-Defend-Exploit strategy counters line loss trends
• Attack: Broadband, VoIP, Digital TV, IPTV• Defend: Multibrand, multi-channel, service• Exploit: Customer Lifecycle Management (CLM)
0
6,000
Voice minutes (bn)
Q1 ’04 Q1 ’05 Q3 ’05 Q1 ’06
# lines (mn)
4.0
Line loss
Q3 ’04
171138
272 239
28%
44%
24%
42%
-/- 15%
Contracting voice revenues
Q1 ’04 Q1 ’05 Q3 ’05 Q1 ’06 Q3 ’04
6.0
Access Traffic
7
Multiplay, market leader in the new worldFour technology ‘skills’ enabling attractive combinations of products/services
Dominate the basic products
Differentiate with services
Mobile/Wireless
Internet Fixed Voice TV
InternetFixed Voice
Internet TV
Mobile/Wireless
TV InternetMobile/
Wireless
Mobile/Wireless
FixedVoice
VoIP
IPTV
DVB-H
Mobile VoIP
Mobile Internet
8
Multibrand strategy Reach specific customer groups with segmented brands
Value
Pric
e
Premium brands• XS4All; top quality and innovative
internet
• MINE; premium interactive television
• KPN; high quality and reliable
• Planet; internet and content, market leader
• Hi; fun and contact with your mobile
Value brands• Telfort; value-for-money
• Digitenne; digital TV
• Het Net; no-frills, no nonsense internet
• Simyo; no-frills pre-paid bundles for mobile
• SLIM; no-frills bundles for fixed phones
9
Multiplay portfolioProvide attractive bundles and value added services under our multibrands
Digital TV
VoIP
Internet
GamingMobile
News
VoIP
Digital TV
Internet
Voice
MSNArchive TVFilms
InternetFootballMobile (UMTS)Music
MusicFilmsInternetVoIPVoIP
MobileMobileMobileDigital TVIPTVVoIPInternetInternet
Serv
ices
10
• Score well in customer satisfaction• Excellence in service installation• Easy-to-use manuals• Availability of helpdesks
• Stores– Primafoon (Mainstream)– 576 (Youth market)– KRAL (Audio visual)
• Web, kpn.com• Largest call center in the
Netherlands• Retail partners
Market leader in serviceMulti-channels
Distribution and serviceWidespread distribution and excellent level of service
11
Return on investment withtargeted marketing• Increases ARPUs in
specific segments• Increases loyalty• Reduces churn• Proactively targets high-
value customers
ROI
Marketing based on ROI principleCLM as a tool to increase loyalty, reduce churn, cross and upsell
Database driven quantitativemarketing• One-on-one marketing• Know exact value of
customers• Simultaneous trial of
similar customers; to analyze conversion rates
CLM
Fixed Consumer VoiceIn the driver’s seat
Robin Clements, Interim Director Consumer Voice
13
• Cable companies making inroads in voice market
• Alternative DSL operators struggling for survival
• Fading business model for CPS operators• Internet companies (MSN, Google, eBay)
challenging (voice) business model
Increasing competition• VoIP is rapidly replacing traditional voice• Broadband is everywhere, services on
the rise• Consumer demand fragmenting, requiring
personalization
Changing customer demand
Trends continue …‘Mobile only’ households1 VoIP lines in % of broadband 2
1 Households without fixed line or cable telephony connection; management estimates2 VoIP excluding peer to peer applications
13% 14% 15% 16% 17%
Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06
2%4%
6%9%
13%
Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06
Voice in the Netherlands A challenging market
14
Our visionVoice is moving from telephone lines to customer’s personal environment
• Households to . . .
• Just telephones to . . .
• Dutch homes to . . .
• Standardized products to . . .
• Stand-alone offerings to . . .
• Offered with brands from KPN
. . . individuals
. . . a diversity of devices
. . . people everywhere
. . . personalized services
. . . a feature within an application
To be offered with brands from KPNand partners
From… To…
15
Our strategy
Attack
Defend
Moving from traditional telephony to new (IP) voice services…
…while sustaining our leading market share in the traditional voice market
16
Traditional competitorsReach: national
1.1 mn CPS usersIntroduction WLR
CPS Winback programs
Putting our strategy into actionA multibrand and CLM based answer to all competitive offerings
Cable operatorsReach: > 90% of
Dutch households6 mn TV customers
1.7 mn broadband and 600k telephony
customers
InternetPlusBellen &
Slim
Alternative DSL operators
Reach: 50% - 80% of Dutch households
> 1 mn broadband and100k – 150k telephony
customers
Cross sell and loyalty programs
Internet playersReach: everyone with
Internet accessMSN claims 5.8 mn
users
KPNCommunicator
KPN Instant messenger
Exploring newbusiness models
17
Voice market share up almost 4% in just one yearWinback programs and bundles prove to be successful
70%
60%
Market share voice minutes(excl. VoIP)
Q1 ’04 Q3 ’04 Q1 ’05 Q3 ’05 Q1 ’06 April
z
65%
• CPS winback programs (CLM based)– Market share CPS operators declining
• Innovation pays off
• Successful loyalty program
• A significant number of customers now have bundles, leading to reduced churn
– Penetration minute bundles has reached 29%
• New (flat fee) bundles capture the opportunities of changed regulatory framework
– BelVrij– BelNaar Mobiel– BelBuitenland
640 800 1,288 1,444 1,446 1,390
Q3 '03 Q1 '04 Q3 '04 Q1 '05 Q3 '05 Q1 '06
11%15%
24%27% 28% 29%
Bundle penetration Number of bundles
X 1,000 Bundles
18
Innovation in traditional voice pays offBundled cordless phones reduce churn and increase ARPU
Q1 ’05 Q3 ’05 Q1 ’06 April Q2 ’05 Q4 ’05
Cordless handsets bundled with voice bundle
166
• Attractive cordless phones combined with minute bundles for a monthly fee with a 3 year contract
• A large and continuously innovating handset portfolio
• Reduced churn
• Fixed-to-mobile call main driver of ARPU increase
• Intention to use this concept for InternetPlusBellen
X 1,000
19
• Leading edge Customer Lifecycle Management– Increase revenue per customer through upsell program– Decrease churn by a targeted cross-sell program– Segmented approach on value and on churn risk– Direct marketing execution
• KPN loyalty program– 2 mn high value customers
• Positioning KPN as a relationship brand• Key tool to achieve CPS churn targets• High response on advice mailings
advice empathetic
cross selling
Telephony Telephony+ TV
Telephony+ Internet
Triple play
Multiplay reduces churnCustomer Lifecycle Management
Loyalty Program
Loyalty program and Customer Lifecycle ManagementA loyal customer base is key for us
20
Multibrand approach• Using our prominent brands for different
market segments• Besides national also regional
campaigns• Multi distribution strategy• Low cost voice-only product (Slim)• VoIP client to support a variety of
applications and devices
InternetPlusBellen proposition• One bundle for VoIP and broadband
internet as of € 34.95• No fixed line needed• No hassle with your current number,
handset and computer• Flat fee calling• High scores in quality research1 amongst
customers
We take full advantage of the VoIP opportunity
KPN brands
Bas
ic
Voice Voice/Internet
Prem
ium
1 TNS Nipo research
21
Results so far• KPN is the fastest growing VoIP
player• More than 127k contracts signed
until Q1 2006• Many VoIP subscribers are also new
broadband customers• At this stage of the growth, ARPU
impact is positive
• Mass introduction with television campaigns is yet to come…
We are on track
2946
73
103
Jan '06 Feb '06 Mar '06 Apr '06
Jan '06 Feb '06 Mar '06 Apr '06
> 35%> 30%
KPN market share in VoIP adds
KPN VoIP subscriptions X 1,000
22
Short clip ‘InternetPlusBellen’
23
• Mobile only and migration to VoIP affect PSTN and ISDN lines
• In 2005 this trend accelerated because in particular cable operators acquired a significant number of customers
• However, since 2006 we are able to successfully counteract this trend
• Marketing campaigns are now targeted at customers who are likely to churn and in regions were cable is successful with VoIP offerings
Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06
Line migration from switched to VoIP
Positive impact VoIP Strong consumer demand for KPN VoIP beginning to impact line loss trend
-67 -67-77
-117-127
Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06
Net line loss1X 1,000
Total migration Migration to competition
1 PSTN/ISDN line loss -/- growth VoIP -/- growth ADSL only
24
, our new low cost voice brand
• The advent of VoIP fueled customer’s perception that the regulated fixed telephony subscription is expensive
• In a world of multiplay propositions KPN’s single play voice customers are potential targets for competitors
• Introduction of our low cost voice brand Slim
• Main target group: Customers with a high propensity to churn
• Slim acts as a ‘Trojan horse’: upselling to InternetPlusBellen and Mine
Moves from competitors. . .
. . . ask for a smart counter attack . . .
• No monthly line rental• € 19.95 for a bundle of 500 minutes• Free Internet access as a gift (128 Kb)
IP based
Customer perception as starting point
25
ConclusionsIn the driver’s seat
• Competition is fierce, but…
• KPN is successful with a clearly defined, aggressive strategy
• Moving from traditional telephony to new (IP) voice services…
• …while sustaining our leading share in the traditional voice market
Fixed Consumer BroadbandStepping stone for future services
Karin Valk, Director Consumer Internet
27
Broadband in the NetherlandsThe market defined
• Dial-up since 1993 and broadband since 1998• 72% internet penetration1 (UK: 58%2)• 62% broadband penetration1 (UK: 33%2)• Growing market
– Number of households: 4.348 million1
• Highly competitive market– Infrastructure players (cable), service providers (ISP) and KPN– Competing on voice, broadband and TV– New players up the ante e.g. MSN, Google and Yahoo
• Competitors coming from a different starting position– IP initiatives at KPN vs enhanced product offering from cable– Microsoft Messenger
1 Percentage of households as of Q1 20062 Percentage of households as of December 2006 (Source: Ofcom)
28
Broadband penetration by population3
Broa
dban
d lin
es p
er 1
00
popu
latio
n
Broadband in the Netherlands (continued)Penetration development and relative position of the Netherlands
2002 2003 2004
15%27%
45% 58%
2005
NL
• In the Netherlands, 7 out of every 10 households has internet access
• Penetration of broadband is one of the highest in Europe and worldwide 3rd
• Dutch spend the most time online (~47 hours per month)2 after the Israelis, Finns and South Koreans
1 As a percentage of households2 ComScore World Matrix3 Source: Point Topic
Q1 06
62%
Broadband penetration1
29
Broadband in the Netherlands (continued)How the pie is divided
Breakdown2Subscribers1
4,348 mnMarket
760kAlternative DSL
1,721 mnCable
581k 495k 242k 276k
Other 273k1,867 mn
1 As of Q1 20062 Management estimates for Cable and Alternative ADSL providers
23%
8%4%
32%
4%29% UPC/Chello
@HomeCasemaMultikabel/QuicknetZeelandnetCAI Westland
25%
16%
34%
1%24%
VersatelTiscaliBBNedWanadooOther
30
Highly competitive market Competing on voice, broadband and TV
√√√√
√√√√
√
√√√√
√
√√√
√√√
√√√√√
√√√√√√
√√√√
Mobile VoiceFixed VoiceDigital TVAnalogue TVCableADSL
DS
L op
erat
ors
Cab
leop
erat
ors
31
Highly competitive market (continued)Competition on multiplay is on full speed
Cable: VoIP, Cable internet & TVCasema midi:• Internet/Voice from € 29.95 month• Unlimited calls: € 9.95 month• TV: € 14,95 month
CPS: VoIP, ADSL, TV & MobileScarlet One:• Internet/Voice from € 39.95 month• Unlimited calling included• TV: € 7.45 month
ISP’s: VoIP, ADSL & MobileWanadoo family:• Internet/Voice from € 29.95 month • Plus € 9.67 month KPN• Unlimited calling after call set up
Consumer• Confused by multitude of offerings• Afraid she now is paying to much• Would appreciate guidance from KPN
KPN: Fixed voice, VoIP, ADSL, TV & Mobile• InternetPlusBellen: internet/voice from € 34.95 month • Unlimited calls: € 9.95 month• TV: € 7.95 month
“Get rid off KPN”
32
Setting the contextHow we became the leading broadband provider
• KPN was relatively late to the game (2001)• Optimal production process and focused marketing enabled rapid upscaling
– Some 500k installations at peak (2004)• Multibrands targeting different segments in the market• Overtaken cable as leading broadband provider in Q4 ‘04• Continued growth, both organic and through acquisition
525 775175
418
913
1,3641,0351,721
1,867
1,500
11
65
760
470
303
0
1,000
2,000
3,000
4,000
5,000
Q1 '02 Q1 '03 Q1 '04 Q1 '05 Q1 '06
1 Of which currently approximately 80% consumers and 20% business (management estimates)2 Excluding Bitstream
X 1,000 Broadband connections1
Other ADSL2KPN ADSLCable
33
March ’061.1% (Broadband)40k (DSL)
June ’06 1.3% (Broadband)57k (DSL)
September ’051.4% (Broadband)50k (DSL)
July ’051.6% (Broadband)60k (KPN ADSL)
February ’050.8% (Broadband)28k (DSL)
January ’050.1% (Broadband)5k (DSL)
Date acquiredMarket share# Customers
Growth through acquisitionsSuccessful acquisitions continue to drive up our market share
34
Multibrand portfolioCovering specific customer segments needs
Value
Pric
e
35
Our multibrand portfolio in more detail
• Brand image: No-frills, no nonsense
• ADSL customers: 495K1
• Dial-up customers : 270K1
• Successes: ‘Effie’ award for most effective advertising campaign
• Brand image: High quality and reliable
• ADSL customers: 276K 1
• Dial-up customers: -• Successes: KPN one of
the first incumbents to launch a ‘naked’ DSL service. Wireless offered as standard. Most trusted brand in NL
• Brand image: Top quality and innovation
• ADSL customers: 242K1
• Dial-up customers: 32K1
• Successes: Winner of best buy award from the Consumentbond (Consumer watchdog). Ranked #1 ISP in Computable magazine
• Brand image: Content and internet market leader
• ADSL customers: 581K1
• Dial-up customers: 176K1
• Successes: Largest ISP and winner of ‘Gouden Loeki’ for best consumer advertising
1 As of Q1 2006
36
Short clip ‘Modern Technology’Best Dutch TV commercial
37
Retention
Customer Lifecycle ManagementGenerating value by managing our customers
Cross-sell
• Customers with multiple products have a lower churn rate
Upsell
• Program in place to migrate dial-in customers to ADSL (>50% conversion)
• Customers about to churn are sent to a ‘save’ team across all product line (telephony, TV, and internet)
Telephony Telephony+ TV
Telephony+ Internet
Triple play
0%
20%
40%
60%
80%
100%
A M J J A S O N D J F M A
0
5,000
10,000
15,000
20,000
Saves Net conversion
38
Move away from bandwidthGetting deep into the houses and lives of consumers
www.hethuisvanmorgen.nl
(Wireless) internet (Video) calls IPTV
39
Innovative services Our current roadmap
PC Veilig
2nd half 2006DatastoringWebdisk
AvailableMusic downloadingMusicStream
AvailableAt home maintenanceServiceThuis
AvailableVideo uploading and broadcastingShoobidoo
2nd half 2006
2nd half 2006
2nd half 2006
2nd half 2006
Available
Introduction
Photo sharing and printing
Internet security package
Remote Security
Messenger
Hotspots
Service
Online Fotoservice
PC Veilig
InBeeld
KPN Communicator
Wi-Fi
Name
40
• Introduced in March 2006 by our ISP Planet
• Priced at € 4.95 per month
• In the near future we will expand ServiceThuis to include InternetPlusBellen (our VoIP offering) and IPTV and later ServiceThuis will also target the SoHo-markt
Innovative services (continued)ServiceThuis
41
Prices of new servicesBroadband enabling potential upside
Telephony
€ 18 per month
Internet
€ 20 per month
VoIP(InternetPlusBellen)
€ 35 per month
IPTV
€ 19.95 per month
Traditional services IP-based services
Potential new innovative services
42
Conclusions
• Broadband market in the Netherlands is rapidly growing and highly competitive
• Broadband is our stepping stone towards all IP services
• We are well on track, growing with our multibrand portfolio and through acquisitions
• We are market leader, bigger than all cable companies combined
• Leading position in broadband enables us to drive new services such as voice, TV, music and ServiceThuis
43
Fixed Consumer TVThe third pillar of KPN’s multiplay offering
Ludolf Rasterhoff, Director TV and Media
44
0%
20%
40%
60%
100%
8%
10%3% 1%
78%
Analogue cable Digital cableSatelite KPN DVB-TOther
Dutch TV marketLagging behind on digital TV, but rapidly changing
> 90% cable penetration, with many regional playersPredominantly analogue due to limited innovation by cable operatorsOn average 30 to 35 analogue channels in basic package for € 15 per monthUnderdeveloped market of approximately € 1.4 bnDigital TV is now emerging, trend accelerated by KPN TV offerings
TV market shares Maturity curve digital TVRegional footprint cable
Source: Informa 2004
UPCEssent KabelcomCasemaMultikabelDelta KabelcomfortCAIWCoges KabelREKAMONSKabel NoordSt. CAI HarderwijkKabel TV BrunssumSt. Kabelnet VeendamSt. CAI-IJsselsteinTEBECAIOther
Canada 42.0%Ireland 45.3%USA 47.0%UK 57.2%
Germany 11.4%Japan 13.7%Switzerland 14.7%Portugal 15.2%Spain 17.1%Italy 18.3%Denmark 19.2%France 21.5%
Finland 26.6%Hong Kong 32.0%New Zealand 36.0%Malaysia 36.0%Sweden 37.8%
Czech Republic 2.1%Hungary 4.0%Greece 5.2%Netherlands 5.8%Austria 7.0%Poland 7.4%Belgium 9.5%
emerging growing mature
Source: VECAI Management estimates
45
Different services offering and infrastructure used to meet customer needs
Multibrand strategy enables KPN to grasp both the premium as well value for money segment of the untapped digital TV market
People’s TV
Missed episodeVoD
Personal recording
Pausing live TV
Better images & sound
More channels
‘Interactive digital TV’ via IPTV
Value for money‘Basic digital TV’ via DVB-T
KPN TV strategyTwo complementary services to meet all customer needs
Premium services
46
Digitenne (DVB-T)Multiplay: Tapping the TV market while retaining the customer
Value for money propositionBasic 25 TV / 18 radio channels for only € 7.95
Plug and play
‘whenever’: personal recorder
‘wherever’: outdoor, car
Key pillar of our multiplay offeringImportant loyalty instrument to reduce churn
>90% has at least one additional KPN subscription
~70% cancelled their cable connection
Strong uptake to 207k since launch in Q4 2004Fastest growing TV operator
>7% market share in population coverage area
Creating turmoil in the TV marketInnovation trigger for cable operators
Cable has lowered their digital subscription fees
Strong uptake KPN TV
75 98 126 150 184 207
Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06
X 1.000
47
DigitennePreparing for the next growth phase
Nozema acquisitionNetwork roll-out and DVB-T/DVB-H license secured
Acceleration of network roll out to nationwide coverage by early 2007
Analogue frequencies will be switched of October 2006
Rebranding to Digitenne by KPNOffered via two brands: Digitenne and TV by KPN
Digitenne has high brand recognition
Enhanced scope with DVB-HDigital, handheld and interactive service offering
Technical pilot conducted on interactive services during summer 2005
Mobile TV services to be commercially launched in 2007
~50% pop coverage DVB-T
48
KPN launching interactive TV‘the new way to watch TV’
48
49
Mine strategy (IPTV)Phased development of interactive TV: From appointment TV to Me TV
Appointment TV
Distributor
Personalized TV
Facilitating whenever and whatever
Your ownTV channel
Bringing internet,IP Media to TV
Your ideal TV evening
Personal guide
Me TV: Your ideal TV moment
Providing whenever, whatever and wherever
KPN’s added value as premium service provider
2006 2007 2008 2009
50
BillingChoiceLoyalty
KPN’s roleProviding choice and leveraging existing customer relationship
KPN is best positioned to offer the full range of servicesLargest Dutch service provider; 6.7 mn fixed-lines, 2.2 mn internet and 8.1 mn mobile customers
Trustworthy billing partner with national coverage in network, distribution and branding
Cost efficient and long track record
51
Premium service€ 149.95 Mine tunerMonthly subscription € 19.95
Enhanced functionalityReplay TVHard disc recordingEPGMissed episode
Access to more than 500 filmsExclusive Blockbuster partnership Contracts signed with
Warner BrosDutch Film works RTL Entertainment
More than 60 channelsPublicCommercialOtherTheme
Mine propositionPremium service in respect to both content and functionality
VoD
Service
Pricing
Content
52
Unique contentUnique partnerships resulting in unique, exclusive content
‘Uitzending gemist’Easy access to all missed episodes from the public channelsExclusive TV functionality, already huge success on the internet
‘NostalgieNet’Theme channel containing the golden oldies of Dutch public channels
Club TVAll about the top Dutch soccer teamsMatches available after 24 hoursJoint exploitation of exclusive content
Endemol Joint VentureExclusive content for theme channels and VoD Production of cross media programming materialDeveloping new forms of advertising
53
Short clip ‘Club TV’All about the top Dutch soccer teams
Football channel
54
MediaMallEnabler for your own TV channel
55
Advertising opportunitiesSeveral options to capture the opportunity of personalized advertising
‘Ad insertion’ for targeted advertisingFilmDirect (VoD)
BanneringEPG
Theme channels
Promotional URLs linkingEPG
Search Mine
‘Walled garden’
‘Promotion &
Trailer’
Personalized advertising
56
InteractivityOpen platformPersonalization
New content pricing models
EPGEasy recordingTime shiftingVideo on Demand
Local TV, MediaMallTV MagazineAdvertising
Film promotional channelUser generated content
Club TVNostalgie NetAdditional 20 TV channels
60 TV & 60 radio channels> 500 moviesCatch up TV
HD ready settopboxConnect own devices
New design settopboxInstall it yourself package
New design remote control
Mine tuner with personal recorder
Mine Light2 TV-propositionTrue Multiplay packagesRetail availability
Combined packages: ADSL, TV & VoIPCustomer driven innovation
ADSL & TV1 TV-propositionDirect sales availability
H1 ’07: DiscoverQ4 ’06: UpscaleQ3 ’06: Full launchQ2 ’06: Launch
Product roadmapContinued evolution towards Me TV
Services
Content
Hardware
Proposition
57
~60% pop coverage IPTV
ADSL2+ completed by the end of 2005; ~60% of households can be offered minimum of 12 Mb/s
Technical pilot on VDSL to increase capacity to more than 20 Mb/s
Technology perspective Operational for nearly 60% of households
Connecting 1 TV set at launch, 2 TVs by the end of 2006
3 to 4 Mb per channel based on MPEG 2
Developing MPEG 4 to double capacity
Stable
Scalable
HD ready by Q1 2007
58
Medium termToday
BasicDigital image and sound
Broadcast channels
BasicDigital image and sound
Broadcast channels
PremiumMultiplay value propositions
Trust worthy billing partner
Brand preference
Cross medial reach
Differentiating content
PremiumPersonal recorder in standard offer
First true on demand offer
Consumers prefer KPN brand over cable brands
National coverage with IPTV, DVB-T and UMTS
Competitive positioningMine is the leading innovator and premium service compared to cable
59
Conclusions
Two complementary brands/services to tap TV market
Successful inroad in TV market with Digitenne
Mine is stepping stone towards multimedia company
Providing choice and leveraging customer relationship
Exclusive partnerships with leading content providers
Developing Mine together with customers and business partners
At launch the most innovative TV service in the Netherlands
Management strengthened with media experience
Strong progression in third pillar of multiplay strategy towardsmultimedia company
60
Fixed Consumer Summary
Michiel Buitelaar, Director Consumer Market
61
Conclusions
• Attack-Defend-Exploit strategy to face challenging market dynamics
• Delivering on what we promise
– Aggressive on VoIP to counter line loss
– Consistent growth in broadband to deliver new services
– IPTV launched as stepping stone towards multimedia company
– Attractive roadmap of new services
• Leveraging our market leadership in Telephony, Mobile and Broadband with multiplay to be market leader in multimedia
• Multibrand, multi-channel and CLM as key drivers