Mike O'connor - Wind Mobile

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Mike O'connor - Wind Mobile

  1. 1. WIND Mobile EDAC CONFERENCE OCTOBER 1-4 PETERBOROUGH, ON October 4, 2011
  2. 2. THE MISSION OF WIND MOBILE IS EMBODIED IN The Power of Conversation™ Simply put, we want to create the most unforgettably positive customer experience in Canada. How? By speaking with you, not at or over you. By making every site you visit, every store you set foot in and every call you have with us into a meaningful conversation to help build something better - together. We'll make it as easy as possible to be a customer. You'll have more control over your mobile experience than you've ever had before. And you'll get all this at a price you can afford. The result of this vision, the core of what we all believe, is how it effects you ... our customers, our partners. Dialogue. Simplicity. Control. And Value.
  3. 3. WIND OFFERS – SIMPLE AND TRANSPARENT AND AFFORDABLE 3
  4. 4. WIND MOBILE HAS BUILT CONSIDERABLE REACH IN A VERY SHORT PERIOD OF TIME….. • Brand: WIND Mobile • Network: 3G GSM (HSPA) • Current subscribers (30Aug 2011): 350K+ • Employees: 1,000+ (Direct); 3,000+ (Indirect) • Distribution POS: 485: Branded – 181, Other – 304 • Investment: >$1 Billion CAD 4 *In 2008 Auction, GWMC was award licenses in Northern Quebec. These licenses are not AWS and are PCS extensions and CDMA friendly. 40 MHz 20 MHz 10 MHz GWMC AWS SPECTRUM HOLDINGS Note: Circles represent relative population sizes. 40 MHz 20 MHz 10 MHz GWMC AWS SPECTRUM HOLDINGS 40 MHz 20 MHz 10 MHz GWMC AWS SPECTRUM HOLDINGS 40 MHz 20 MHz 10 MHz GWMC AWS SPECTRUM HOLDINGS Note: Circles represent relative population sizes.
  5. 5. DESPITE ONGOING REGULATORY DELAYS WIND MOBILE AGGRESSIVELY INVESTED AND EXPANDED INTO CANADA 5 Mar 09 Oct 09 Dec 09Jun/Jul /Aug 08 Entrance into Canadian spectrum license auction $220 million bid deposit OTH participates in a consortium to create a new Canadian-owned and controlled wireless operator together with Globalive Communications Payment of CAD442 million for licenses Spectrum granted by Industry Canada providing licenses in all of Canada, except Quebec, covering a population of 26 million CRTC decision declares WIND Mobile non-compliant with Canadian ownership and control rules CRTC decision varied by Canadian Government. WIND Mobile begins operations and opens stores in greater Toronto area December 16th and launched Calgary the 18th of December Feb/Mar 10 Launch in Edmonton and Ottawa Jun/Jul 10 Launch in Vancouver Reach 100k Subscribers Jan-June 2011 Feb 4 Federal Court Ruling in favour of Public and Telus May 18 Appeals Court hears argument in law suit June 8 Court rejects original court decision and upholds original Cabinet Order WIND Mobile reaches 300k subscribers WIND Aug 2011 Launch Kitchener- Waterloo
  6. 6. THE 2008 AWS SPECTRUM AUCTION SET THE STAGE FOR A COMPETITIVE TELECOMMUNICATIONS LANDSCAPE AND RAISED FUNDS BEYOND EXPECATIONS 6 • AWS Auction May 2008-July 2008 • Process insured through “set asides” that new entrants would have fair access to spectrum and competition could prevail • After eight weeks and 331 rounds, 292 licences sold, the Canadian Wireless Spectrum Auction raised $4.3 Billion for the Canadian Government (original expectations quoted at $1 billion) • WIND Mobile -- 30 licences could be the one to emerge as the new national mobile operator • “The auction exceeded our expectations in terms of the level of competitive bidding activity. I hope the industry keeps this competitive spirit alive as it enhances and expands its services with improved access to the spectrum,” said Industry Minister Jim Prentice.
  7. 7. Auction Values of AWS Spectrum $/MHz/POP (All Figures in CDN) WIND MOBILE PURCHASED THE BROADEST AMOUNT OF SPECTRUM OF NEW ENTRANTS AT THE MOST EFFICIENT PRICE 7 Incumbent Operators aggressively bid to lock up national spectrum assets and secure dominant market position….
  8. 8. THE CANADIAN WIRELESS TELECOMMUNICATIONS MARKET IS DOMINATED BY A SUBSET OF INCUMBENTS ON A REGION BY REGION BASIS British Columbia Alberta Saskatchewa n Manitoba Ontario Quebec New Brunswick PEI Nova Scotia Newfoundla nd The North Other 0% 0% 78% 57% 0.8% 0% 0% 0% 0% 0% 10% NE: Videotron 0% 0% 0% 0% 0% 2.8% 0% 0% 0% 0% 0% NE: Public 0% 0% 0% 0% 0.3% 0.2% 0% 0% 0% 0% 0% NE: Mobilicity 0% 0% 0% 0% 0.6% 0% 0% 0% 0% 0% 0% NE: WIND 1% 1% 0% 0% 1.3% 0% 0% 0% 0% 0% 0% Rogers 42% 27% 13% 29% 47% 33% 20% 17% 20% 3% 0% Telus 40% 50% 5% 10% 20% 27% 18% 21% 24% 21% 0% Bell Group 17% 22% 4% 3% 30% 37% 61% 62% 56% 76% 90% 17% 22% 4% 3% 30% 37% 61% 62% 56% 76% 90% 40% 50% 5% 10% 20% 27% 18% 21% 24% 21% 0% 42% 27% 13% 29% 47% 33% 20% 17% 20% 3% 0% 0% 0% 78% 57% 0.8% 0% 0% 0% 0% 0% 10% 0% 0% 0% 0% 0% 2.8% 0% 0% 0% 0% 0% 1% 1% 0% 0% 1.3% 0% 0% 0% 0% 0% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% %MarketShare Wirelesssubscribermarket share, by province (2010) Source: CRTC Communications Monitoring Report, July 2011 Notes: 1. “Other” includes MTS Allstream, Sasktel, and smaller WSPs. 2. “Bell Group” includes: Bell Canada, Northwestel Mobility, Telebec, Northern Tel, Skyterra, Virgin, and Latitude Wireless 3. NE – stands for “New Entrants” – WIND Management estimated splits between New entrants – “New Entrants” refer to the new wireless entities that acquired spectrum in Industry Canada’s 2008 AWS spectrum auction 4. The North includes Yukon, the Northwest Territories, and Nunavut • Most regions are effectively controlled by two large players with a third player taking smaller market shares • The wireless market is dominated by Bell, Telus, and Rogers (ROBELUS) currently controlling almost 95% of the market 8
  9. 9. CANADA IS CONTROLLED BY THREE PLAYERS -- AMONG THE HIGHEST PROFIT MARGINS IN THE WORLD Mobile $17.93B, 43% Internet $6.672B, 16% Wireline Voice $12.51B, 30% Data and Private Line $4.587B, 11% Telecommunications revenues $41.7 billion in 2010 Canadian Wireless Revenues in Billions 2006 2007 2008 2009 2010 Retail 12 14 16 16 17 Wholesale 0.5 0.5 0.5 0.5 0.5 Wireless Total 12.7 14.7 16.0 16.9 18.0 Growth 15.20% 15.5% 9.3% 5.3% 6.6% EBITDA MARGIN 44.1% 44.9% 44.9% 43.1% 41.4% CAPEX 1.7 1.9 6.1 2.2 1.8 1.7% 2.5% 2.7% 4.8% 5.0% 6.3% 8.0% 10.0% 52% 54% 59% 67% 72% 74% 77% 97% 96% 96% 94% 94% 93% 91% 89% 99% 99% 99% 99% 99% 99% 99% 99% 0% 20% 40% 60% 80% 100% 2002 2003 2004 2005 2006 2007 2008 2009 Canadianpenetration rates Wireline Wireline and/or wireless Wireless(Only) Wirelessof Households Source: 2011 CRTC Communications Monitoring Report, July 20119 Top 5 ILECS and Top 5 Cablecos generate 92% of Industry revenues
  10. 10. NEW ENTRANTS PROVIDE COMPETITION IN CITIES LAUNCHED GENERATING SIGNIFICANT ECONOMIC BENEFITS AT THE CITY LEVEL 10 Source: CRTC’s Communications Monitoring Report, Table 5.5.8 and Table 5.5.9 • Averages calculated on market share and population weighted basis – CRTC Source: Price comparison study conducted for the CRTC in April 2011 by Wall Communications Inc Baskets Vancouver Toronto Montreal Average Level 1 Basket (low-volume use, 150 minutes per month) Incumbents 32.29 34.26 34.53 33.69 New Entrants 23.40 25.27 30.58 26.41 Percentage Differential -28% -26% -11% -22% Level 2 (average use, 450 minutes and 200 text per month) Incumbents 51.18 49.51 51.09 50.59 New Entrants 43.05 45.37 51.45 46.62 Percentage Differential -16% -8% 1% -8% Level 3 Basket (high-volume use, 1200 minutes, 200 text and 1GB data per month) Incumbents 99.88 99.88 98.48 99.41 New Entrants 51.35 51.35 98.90 67.20 Percentage Differential -49% -49% 0% -342% Baskets Vancouver Toronto Montreal Average Incumbents 53.32 52.32 52.97 52.54 New Entrants 40.00 40.00 34.96 38.32 Percentage Differential -24% -24% -34% -27% Canadian wireless monthly service rate - incumbents v. new entrants (2010) Canadian wireless monthly Internet service rates - incumbents v. new entrants (2010) WIND markets
  11. 11. CURRENT SPECTRUM HOLDINGS: FAIR AND REASONABLE ACCESS TO SPECTRUM WILL IMPROVE COMPETITION, WIRELESS PENETRATION, AND TECHNOLOGY INNOVATION 11 31% 39% 39% 39% 39% 39% 35% 31% 39% 39% 39% 39% 39% 39% 31% 43% 39% 19% 22% 37% 45% 46% 41% 43% 43% 39% 43% 39% 28% 4% 35% 15% 4% 4% 4% 4% 4% 7% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 15% 7% 15% 15% 22% 11% 11% 4% 7% 20% 1% 8% 1% 19% 15% 19% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Other Videotron Public Mobile Mobilicity Wind SaskTel MTS Bell and Telus Rogers *Graph excludes BRS spectrum (2500-2690 MHz) Source: Ownership percentages are based on charts 4-1, 4-2 and 4-3 of the IC Spectrum Consultation document. All percentages are approximate. • Rogers, Bell, and TELUS are the predominant spectrum holders by regions with close to 80%* of the total spectrum across markets • Bell and TELUS hold significant spectrum in every market nationwide (except Saskatchewan and Manitoba) but have decided not to build out their networks and instead rely on a network sharing agreement to serve their subscribers.
  12. 12. WHILE IMPROVING SINCE THE AUCTION CANADA CONTINUES TO SIGNIFICANTLY LAG DEVELOPED COUNTRIES IN TERMS OF WIRELESS PENETRATION AND INNOVATION62% 64% 73% 84% 93% 94% 98% 100% 104% 104% 105% 107% 111% 113% 114% 115% 119% 120% 120% 122% 122% 129% 133% 139% 143% 144% 147% 150% 156% 156% 156% 160% 160% India China Canada Mexico Japan Morocco USA France S.Korea SouthAfrica Thailand Brazil Belgium Hungary Netherlands G8Average Ukraine Malaysia UK NewZealand Poland CzechRepublic Germany Sweden Singapore Denmark Austria Italy Greece Russia Russia Portugal Finland Canada has the lowest developed market wireless penetration rates with significant room to grow Source: Bank of America 4/28/2011 Global Wireless Matrix +25% +42% 12
  13. 13. COMPETITION IS LEADING TO MORE INNOVATION LOWER COSTS AND SIGNIFICANT DIRECT AND INDIRECT ECONOMIC DEVELOPMENT 13 Why Canada lags • Regional oligopolies have reduced price and product competition steadfastly driving ARPU up and limiting product offerings • Smaller size of market not ensuring optimal conditions • Slower adoption of worldwide technology standards Ready for change •Massive re-investment in cutting edge technology •Increased competition •Mobile device costs over time have decreased •Better speeds and improved technology •No hidden fees •Adopting international best practices •Wireline replacement improving business efficiency •Lower costs to mobile users •Competition driving innovation in application •Innovation in mobile payments, mobile commerce, social media…
  14. 14. NATIONAL, REGIONAL AND LOCAL BUSINESS DEVELOPMENT ORGANIZATIONS PLAY A CRITICAL ROLE IN CREATING A GROWTH BASED ECONOMIC ENVIRONMENT 14 • Drive public awareness on the importance of wireless telecommunications to local business • Direct and indirect employment, income and taxation benefits to local communities • Significant reduction in prices and delivery of advanced products to make local businesses and communities more efficient • Facilitate fair and open access to deploy new infrastructure in communities according to the strict industry standards in place in Canada THE IMPACT OF WIRELESS TELECOMMUNICATIONS – LET’S GET CONNECTED

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