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Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
Asian 3G Overview  Business Development 101
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Asian 3G Overview Business Development 101

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  • 1. Asian 3G Overview+ Business Development 101 Greg Tarr CrossPacific Capital/Kodiak Networks gtarr@kodiaknetworks.com
  • 2. Outline •Asian 3G Overview •Asian Business Development/Strategy Model •Asian Channel Issues •Asian Markets and Customer Access •Asia: Global Center of Technology Production •St Paul Ventures/Proquent Systems Asian Case Study •Ascend Communications Asian Case Study •Key Relationships •What Action Do I take Now in Asia/Japan? •About Greg Tarr Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 3. NTT Docomo, SK Telecom, China Mobile Data% ARPU Data % Developing according to Handsets available and Customer spending power(Source:Goldman Sachs 2002) 35% 30% 30% 25% 20% 20% 17% 15% 11% 10% 9% 5% 4% 0% 2002 2005 NTT Docomo SK Telecom China Mobile Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 4. Mobile Data Network Evolution Plan cdma2000 cdma2000 Standard IS-95A IS-95B W-CDMA 1x-RTT 1x-EV-DO Deployment In Service In Service In Service 2002 2003 Schedule D 14.4 kbps 57.6 kbps 144 kbps ~ 2.4 Mbps ~ 2 Mbps L Data Rate U 14.4 kbps 14.4 kbps 64 kbps 153 kbps 384 kbps L Low rate Medium rate High rate Internet Internet VOD access access Multimedia AOD Multimedia/ Application SMS Location /Different Moving Data only Voice Still image Freq. Band image VISS Moving Mobile IP VMS image Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 5. Backward Compatibility 2G/3G Voice/Data Roaming On top of nationwide back-bone network for voice (IS-95A/B network), On top of nationwide back-bone network for voice (IS-95A/B network), KTF will deploy cdma2000 1x/EV-DO & W-CDMA KTF will deploy cdma2000 1x/EV-DO & W-CDMA Coverage plan of each network generation - Voice service : Nation-wide coverage (2G/3G roaming service) - Data service : Provide access to different network with different speed according to market needs 2G data(64k~144kbps) : Nation-wide coverage 3G middle data rate(144k-300kbps) : Major cities (including metropolitan area) 3G high data rate(300k ~ 2Mbps) : Major cities W-CDMA dual mode handset 1x 1x EV-DO handset/ 1x EV-DO/W-CDMA voice roaming 1x data roaming cdma2000 1x W-CDMA dual mode handset 2G 1x handset/ IS-95 A/B , 1x voice roaming 2G data voichigh speed data roaming 1x handset 2G voice 2G/3voice,3G middle speed data roaming 2G/3G voice, 2G low speed data Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 6. Asia leading the World in WLAN Access •SEOUL •TOKYO KOREA •CHINA •15,000 Hot spots YE •350 Hot spots •90 Hot spots Airport, Ritz-Carlton Airport, Okura, Hilton Beijing, Shanghai Subway, Post Office Mini-Stop Convenience Guangzhou,Shenzhen •KT, Hanaro •NTT Communication Leading the world in •Guangdong Telecom WLAN DEPLOYMENT China Netcom W/ 15,000 Access Points •TAIPEI •9 Hot spots Airport, Convention NEW DEVICES •HONG KONG WTC, Au Bon Cafe Expect Seamless Roam •200 Hot spots •Chungwha Telecom Service, Networks, Billing Airport, Pacific Coffee CDMA, W-CDMA, WLAN Starbucks, Pac Place •PCCW SK TELECOM & KT •KUALA LUMPUR •25 Hot spots •MANILA Global Leadership Role Airport, Convention •15 Hot spots Marriott, Chase Coffee Airport, Seattle Coffee VIOLET VENTURES •Airzed Network California Pizza Kitchen •SINGAPORE •PLDT, Airborne Access Leadership Validating •208 Hot spots U.S. VC’s Portfolio& Airport, Convention Shangri-La, Starbucks Korean Portfolio> China •Singtel, Bluengine Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 7. What Do Customers Demand from 3G Services? High Volume Content for a Low Price, Reducing Price/Bit is Critical High Volume Content for a Low Price, Reducing Price/Bit is Critical by discount packet Power of Expression/ package tariff for Price per Transaction heavy users Video/Movie or A Single Title of Music (5MB/965JYEN) Video Clip (100KB/15sec/80JYEN) An obstacle of advanced Music Clip applications/rich contents is (85KB/5sec/68JYEN) the charge per bit. Karaoke (30KB/60JYEN) by discount packet Ringing Melody - package tariff 4 Chords (4KB/8JYEN) 16 Chords (10KB/20JYEN) by basic EZweb tariff Amount of Data per Transaction Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 8. Mobile MultiMedia Services Movie-mail 15 sec max recording 96x80 dpf Smooth movie at 7.5 fps max Capable of dubbing Capable of text superposition Capable of location advice indicated on a map using GPS Capable of movie exchange with PCs Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 9. Top 5 Mobile MultiMedia Services 1st 2nd 3rd 4th 5th Top 5 Contents for 2G Ring-tone Character MSN Emoticon Picture Downloading Downloading (Portal&Mail) (SMS) Downloading Top 5 Applications for 1x Multipack VOD Player Theme Park Go Stop Cartoon Shop Karaoke ※ Source : KTF statistics (Jan, 2003) (Ringtone (Network Game) &Character Downloading) Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 10. New Potential Growth Areas Mobile MultiMedia Mobile Multimedia Services with 3G phones VOD– Video on Demand Case Study: Music Videos MMS– MultimediaMessaging •Korean Pop Group-Noel •Exclusive Release on SKT •11/02=40,000 Users @US$9 •Song Ringtone=1,100 Won •Video Screensaver=1,200W •CD Song=3,500 Won •Full Music Video=10,900W •Mobile Movies2min=5,500W Download & Streaming VOD Phone ↔ Web ↔ Phone Short & long video clip Long Text + Image, MIDI, Video clip Content : Education, Music video, News, Handset with built-in camera Movie preview, Email to Phone (Data Push) SKT Plans TV Phone broadcasting has spent Content : News, Education, MP3, US$22m R&D (US$13Month=15channels) video clip, etc Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 11. Conclusion: Key Korea/Japan Success Drivers/Factors Value to Customers !!! Fast, Easy, Fun & Useful !!! Marketing Drivers Technology Drivers ♦Services on the front line of advertisements ♦Handset Functions Standardized by ♦Less technology platform Focus i.e. (3G) Carrier,not Manufacturer ♦Rapid roll-out: Monthly news of coverage ♦Handset with Color LCD, MIDI and ♦Marketing & Promotions / Customer Training Multimedia Platform for Mobile Internet ♦Many Hi Speed Network Options Services/Products Drivers WLAN, 1X-RTT, 1X-EVD0, W-CDMA ♦Early Adopter: launched data services 1998 ♦ Inherent backward compatibility to ♦Large number- Content/Service Providers IS-95, leading to: Continuous service availability within 2G cdmaOne coverage ♦Killer applications, Win-Win Business Model ♦Uncompromised QoS and service portfolio Tech maturity inherited from IS-95 compared with those of 2G cdmaOne operational records, leading to: No increase in handset Size ♦ No degradation in specs at minimal price No degradation in handset battery life increase compared with 2G cdmaOne phones Korea/Japan expertise in 2G cdmaOne network operations contributing to the ♦ Movie-mail (movie recorder-enabled) stable services offering - CDMA2000 1x phones followed Photo Mail quickly ♦Photo-mail (camera-equipped) phone released on Day One of 1X-RTT in Japan Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 12. Asian Strategy+BD+Customer Roadshow=Sales Executed by BD Advisor w/China,Japan,Korea Customer CTO’s Asia/Japan Business Development Model For Portfolio Step 1 Step 2 Step 3 Step 4 Research, Broaden Recruit Architect Asian Leverage Advisor Regional/Local Management Strategy with for Asian roadshow SI/Channel Candidates w/ VC, CEO, BD & w/Customer CTO Localize Product ChinaJapanKorea Advisor OEM+Channel Trials Track record • Asia is usually priority #3 after U.S./Europe sales, this is faulty strategy as Asian mobile markets are more advanced and have higher Capex growth than U.S./Europe •Working in Japan for 1-2 years does not qualify someone as the Asian expert. Asia covers a larger global area with more diverse language, culture and GDP compared to Europe/U.S. Find rare Regional Experts who know China, Japan, Korea, not the guys “flying in” for 1day a month from Hong Kong/Singapore/U.S. lacking customer CTO “friends”. •VC’s should phase out U.S. Centric views of the world by recruiting Partners/Principals who can reduce risk & enhance portfolio firms network/traction with Asian customers. •Startups hiring an expat to head the region is ok to start but the sooner you can replace them and locate Western Educated locals, the sooner you start scaling revenues. Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 13. Top Tier Asian Channel Can Boost Revenues 80% of Asian Capex comes from Japan, China, Korea Building Asian Channels is complex compared to U.S./Europe.Most U.S. VC’s/portfolio lack local knowledge/Relationships to plan/execute strategy Channel Issues: Selecting/Closing Top Tier Partners Channel Conflict Managing Multiple SI Product Functions Solid Customer Trial Top Launch Customer Service/Training/Price Fragmented regionally Ethics Risk/Low Sales Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 14. Asia=Advanced Mobile/Broadband markets & High CAPEX but COO/CTO customer Access is tough 2004 Global Mobile Internet Users% •As U.S./Euro Carriers slash spending, Asia is a larger piece of CAPEX pie to target. Asia 49% •Carriers in Asia are very loyal to local products/SI’s due to relationships which US outweigh product performance. 29% Europe •i.e. Accenture, Cap Gemini do not have the 22% relationships/skillsets/creditability in China, Source: IDC Japan, Korea to initiate and drive channel revenue for early stage portfolio firms. 2001-2005 Global Telecom Capex •Top Tier Advisors can introduce Portfolio CEO’s to customer COO/CTO’s which Asia 40% speed up trials and the Sales cycle. Most early stage firms never get access to customer COO/CTO’s and waste Rest of World time/money/cycles on customer middle 60% management. Source: Yankee Group Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 15. Asia leads in Semis, Mobile, Broadband &TFT Advisors have to assist in leveraging Asian customers/partners U.S. firms need Asia Sales+OEM Partners Innovation is up in Japan,Korea,Taiwan 2005E Global TFT-LCD Production by 2000 Patent US 1995 Patent US 1990 Patent US Rank Rank Rank Country% 1-U.S. 85K U.S. 56K U.S. 47K Korea 2-Japan 31K Japan 22K Japan 20K 34% 3-Germany 10K Germany 6.6K Germany 7.6K 4-Taiwan 4.6K France 2.8K France 2.9K 5-France 3.8K UK 2.5K UK 2.8K Japan 6-UK 3.7K Canada 2.1K Canada 1.9K 13% Taiwan 7-Canada 3.4K Taiwan 1.6K Switzerland 1.3K 53% 8-Korea 3.3K Korea 1.2K Italy 1.3K 2005 Global Semi Sales by Region% 2004E Global Mobile Handset % (37% Global Sales from Asia) Sony Nokia Ericsson Asia Motorola 38% 7% 40% 14% Ningbo Siemens 1% 8% Japan 23% TCL 1% Sharp Samsung 1% Europe Toshiba Sanyo Kyocera Mitsubishi Panasonic 12% America 19% 3% Others LG 1% 1% 1% NEC 4% 18% 2% 5% 2% Source: JP Morgan, SIA Source: Morgan Stanley Greg Tarr – Asia 3G Overview+ BD101 Proprietary c Copyright Greg Tarr 2004
  • 16. Asian Entry Case Study: St Paul Ventures+Proquent Systems+Violet=Results •St Paul Ventures requested Violet architect a low cost Asian entry strategy for U.S. Com Equip firm Proquent Systems that lacked Asian customer access +market knowledge and could not hire local staff until Asian customer validation Actions Taken: • Asian Strategic Plan Created in 30 days with Greg acting as Interim MD-Asia/Japan • 5 Road Shows in 120 days/10 Asian Countries=30 customers CTO’s/10 OEM Partners • Part Time MIT MBA’s Recruited to handle Chinese/Korean/Japanese follow up Results: • 5 RFP’s Issued with bids and influenced CTO’s on new RFP’s • 5 OEM/Channel Partners negotiating OEM/Marketing agreements • Asian Sales and Engineering team recruited and ready to be deployed Greg Tarr - Asia BD101 Proprietary c Copyright Greg Tarr 2004
  • 17. Channel Case Study: Ascend launch in Asia •Ascend Communications was too small to secure Asia’s largest SI in 1995 •Ascend had to turn to a small, scrappy, cutting edge SI to get Asia jumpstarted Ascend Communications 10Q 11-14-1996 “International sales accounted for approximately 45% of net sales for the nine months ended September 30, 1996 compared to approximately 24% of net sales for the nine months ended September 30, 1995. This increase was principally due to increased sales of the Company's products in Asia and the Pacific Basin. “ •9 Months later, the largest SI in Asia contacted Ascend and signed on •Securing/motivating the right SI relationships with market entry and knowing the Right time to stimulate and broaden the channel without alienating your first partner is critical and can be set up with a top tier Venture advisor Greg Tarr - Asia BD101 Proprietary c Copyright Greg Tarr 2004
  • 18. Greg’s Key Global Relationships Customer CTO/COO’s, Channels, OEM’s, Co-investors,I-Banks Operators Handset/Infrast Corporates/SI I-Bank/Consultant Venture Funds VC Greg Tarr - Asia BD101 Proprietary c Copyright Greg Tarr 2004
  • 19. What action do I take now to grow Asia/Japan? VC/Directors Imperative •Recognize Revenue opportunity and address it before your competition •Recruit Partner/Principal w/ Regional Asian experience to lead Asian BD •Do not be U.S. Centric, Asian Customers have different needs-Visit them •Recruit Top Advisor w/ Japan/China/Korea CTO/COO customer friends Portfolio Business Development, Market Intelligence, BD Execution •Build Asian Advisory Board, plan Asian Road show to build relationships •Build Asian Customer shopping list for input PRIOR to product launch •Recruit Engineers/Sales/Advisors w/Japan/China/Korea language+friends R&D, Fund Raising, VC Relationships, Marketing •R&D in Asia can keep portfolio ahead of competition and reduce costs •Form Relationships with Asian VC’s who can assist in BD, politics, sales •VC/portfolio should raise Asian profile w/ Customers-Conferences& media •GP’s/Directors and Portfolio CEO’s need to visit Asian customers often Venture Partner Greg Tarr gtarr@violetventures.com Menlo Park 650-269-9818 Japan 8180-3407-3333 Korea 8216-9699-3333 Greg Tarr - Asia BD101 Proprietary c Copyright Greg Tarr 2004
  • 20. •BD/Strategy Advisory to U.S. VC’s/Tech Startups- Violet Ventures 7+Years Based in Korea/Taiwan/Hong Kong/Singapore Founders Track Record •(Boston) Advisor- Asian Business Development w/ Top Mr. Tarr founded Violet Ventures Asian Operators CTO’s & advise portfolio firms on BD an angel investor and advisor to top tier U.S. VC’s+portfolio firms. • (Taiwan) Negotiated GP Relationship& wrote PPM for Asia Tech Fund,Wrote Taiwan Tech Investment Strategy He advises St Paul Ventures- US$3b VC Fund and CDP Capital • (Boston) Advisory Board -Asian Business Development, Asia-US$10b PE Fund.As angel SNOWSHORE Shareholder (Matrix/St Paul/Charles River) investor/Advisor, his portfolio •(Boston) Advisory Board, Wrote Asian Strategic Plan, includes 8 Com Equip firms where (St Paul/Nokia Ventures) Interim MD Asia/Japan he has held Interim VP-BD roles. • (Shanghai) Angel Investor w/(Acer, Fidelity, AsiaInfo) At Deutsche Bank Securities he Intro Korean Tech Partners and assist BD/Strategy/Mkt ranked #4 sell side Asian Tech • (Shanghai) Angel Investor w/(Acer, Fidelity, AsiaInfo, analyst after his 1st year, worked Mitsubishi) Intro Korean Tech Partners, assist BD/Mkt in operations at Toyota U.S. HQ • (Seoul) Hired COO, Alliances-Vodafone, Verizon, Sun, and interned for MTV at startup Qualcomm,BusinessPlan,Advisory Board-Shareholder mode. He worked 8 years in Korea, Taiwan, Hong Kong, • (Seoul) Generated 2 Valuations at 3X, Global BD/Mkt, Singapore+ worked in Europe/U.S. Business Plan, Shareholder (CDP Capital) • (Hong Kong) Global BD/Mkt, Strategy, Fund Raising, He attended Pepperdine Business Shareholder, CSFB Tech Conference (Walden) School-MBA (L.A.) + U Colorado - Boulder-BA. He guest lectures at •(Hong Kong) Raised US$100m PE, Wrote Nasdaq S-1 Stanford’s MBA/Engineering Filing, Secured CSFB-IPO, M&A values,Options (GE, JPM) Classes and is on the advisory •(Singapore)-Lead Analyst on US$40m Secondary, Advise board+Judge of Venture Awards Fidelity/ Capital on Equity Purchase, Advisor- post DB at 3GSM World Congress-France •(Asia) Ranked #4 Asian Tech Analyst after 1st Year & 3G Congress-Asia covered Semi, Com, S/W, supported Global TechResearch •(L.A.) Lexus Product Launch, Marketing/Sales/Retail •(N.Y.) Summer Intern 85/84-Startup Mode-Marketing/Sales

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