Ranking The World's Best MNOs. 2009. Portio Research Ltd

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An innovative look at the major performance metrics of hundreds of Mobile Network Operators worldwide, comparing their performance across a 'level playing field' once Purchasing Power parity (PPP) is …

An innovative look at the major performance metrics of hundreds of Mobile Network Operators worldwide, comparing their performance across a 'level playing field' once Purchasing Power parity (PPP) is used to level off differences in the value of regional and national economies.

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  • 1. Ranking The World’s Best Mobile Operators © 2009, Portio Research. All Rights Reserved 1
  • 2. Ranking The World’s Best Mobile Operators Portio Research Limited. Published June 2009 by Portio Research Limited © Copyright 2009. www.portioresearch.com info@portioresearch.com Disclaimer and Legal Notices Disclaimer Every care has been taken in the preparation of this study to ensure that the information contained herein is accurate, factual and correct to the best of our knowledge, at time of publishing. All opinions, suppositions, estimates and recommendations included in this document are solely the opinions of the authors unless otherwise stated. Portio Research Limited accepts no liability for any loss or damage or unforeseen consequential loss or damage arising from the use of the information contained within this document. The opinions, suppositions, estimates and recommendations within this document cannot be guaranteed, and readers use this information at their own risk. The information published in this document is subject to change without notice at any time, and Portio Research Limited accepts no liability or obligation to inform the reader of such changes. Portio Research Limited do not promote or endorse any specific companies or products, the views and opinions we express in this document are wholly our own assessments, and independent from any external interest or influence. Many terms and phrases and trade names used in this document are proprietary and Portio Research Limited recognises and acknowledges that all trademarks are copyright, belonging to their respective owners. Where possible, this document accords such terms and phrases and trade names to their respective owners. All Rights Reserved. No part of this document can be copied, shared, redistributed, transmitted, displayed in the public domain, stored or displayed on any internal or external company or private network or electronic retrieval system, nor reprinted, republished or reconstituted in any way without the express written permission of the publisher. Forwarding of this electronic document without the correct legal licence is theft. It’s unethical, immoral and against the law. If you have any questions about the legal licence conditions under which this document has been distributed, please contact Portio Research on info@portioresearch.com If you did not buy this document and a colleague or associate has sent it to you, do not assume you are legally entitled to read it, it is your responsibility to ensure you have the correct legal licence to read this document. 2 © 2009, Portio Research. All Rights Reserved
  • 3. Ranking The World’s Best Mobile Operators Contents Introduction ............................................................................................................................12 Performance Measurement 1 – MNO ARPU PPP ................................................................18 Formula and Rationale....................................................................................................................... 18 Rankings ............................................................................................................................................ 19 MNO Strategies ................................................................................................................................. 23 Nextel Brazil .................................................................................................................................... 23 3 The UK ......................................................................................................................................... 26 Rogers Canada ............................................................................................................................... 29 Performance Measurement 2 – ARPU as a Percentage of Disposable Income...............33 Formula and Rationale....................................................................................................................... 33 Rankings ............................................................................................................................................ 34 MNO Strategies ................................................................................................................................. 38 MTN Nigeria .................................................................................................................................... 38 Zain Sudan ...................................................................................................................................... 41 Maroc Telecom Morocco ................................................................................................................. 43 Safaricom Kenya ............................................................................................................................. 45 Performance Measurement 3 – Revenue Growth of the MNO ...........................................49 Formula and Rationale....................................................................................................................... 49 Rankings ............................................................................................................................................ 51 MNO Strategies ................................................................................................................................. 55 life:) Ukraine .................................................................................................................................... 55 BITE Lithuania................................................................................................................................. 60 Oi Brazil........................................................................................................................................... 64 Performance Measurement 4 – MNO Profitability...............................................................69 EBITDA Margin .................................................................................................................................. 69 MNO Strategies ................................................................................................................................. 75 Globe Telecom The Philippines ...................................................................................................... 75 Djezzy Algeria ................................................................................................................................. 78 KPN The Netherlands ..................................................................................................................... 82 Additional Reference Material ............................................................................................................ 86 Average Profit Per User (APPU) ..................................................................................................... 86 Formula and Rationale .................................................................................................................... 86 Performance Measurement 5 – MNO Growth vs. Market Growth .....................................89 Formula and Rationale....................................................................................................................... 89 Rankings ............................................................................................................................................ 90 MNO Strategies ................................................................................................................................. 94 Wind Italy ........................................................................................................................................ 94 TDC Denmark ................................................................................................................................. 97 Vodafone Ireland ........................................................................................................................... 100 Performance Measurement 6 – Significance of the MNO ................................................104 Formula and Rationale..................................................................................................................... 104 Rankings .......................................................................................................................................... 105 MNO Strategies ............................................................................................................................... 109 du The UAE................................................................................................................................... 109 Movistar Venezuela ....................................................................................................................... 114 Mobily Saudi Arabia ...................................................................................................................... 118 Performance Measurement 7 – Successful Growth of Revenue from Data Services ...124 Formula and Rationale..................................................................................................................... 124 Rankings .......................................................................................................................................... 125 MNO Strategies ............................................................................................................................... 129 Smart Communications The Philippines........................................................................................ 129 Telkomsel Indonesia ..................................................................................................................... 133 NTT DOCOMO Japan ................................................................................................................... 138 Performance Measurement 8 – Measuring Subscriber Loyalty ......................................144 © 2009, Portio Research. All Rights Reserved 3
  • 4. Ranking The World’s Best Mobile Operators Formula and Rationale..................................................................................................................... 144 Rankings .......................................................................................................................................... 145 MNO Strategies ............................................................................................................................... 149 KDDI Japan ................................................................................................................................... 149 SingTel Singapore ......................................................................................................................... 153 Chunghwa Telecom Taiwan .......................................................................................................... 158 Performance Measurement 9 – Postpaid Penetration Measure ......................................163 Formula and Rationale..................................................................................................................... 164 Rankings .......................................................................................................................................... 164 MNO Strategies ............................................................................................................................... 169 Telefonica Moviles Peru ................................................................................................................ 169 Comcel Colombia .......................................................................................................................... 172 Vodafone Egypt............................................................................................................................. 175 Performance Measurement 10 – Technology Measure ....................................................180 Formula and Rationale..................................................................................................................... 180 Rankings .......................................................................................................................................... 181 MNO Strategies ............................................................................................................................... 186 Vodacom DR Congo ..................................................................................................................... 186 MTN Sudan ................................................................................................................................... 189 Etisalat Misr................................................................................................................................... 192 Other Leading MNOs’ Strategies ........................................................................................197 China Mobile .................................................................................................................................... 198 AT&T The US .................................................................................................................................. 202 Summary and Conclusions .................................................................................................206 Traditional KPIs................................................................................................................................ 208 Ranking 1: Traditional Approach ...................................................................................................... 212 Ranking 2: Normalised Approach .................................................................................................... 217 Ranking 3: Blended Approach ......................................................................................................... 227 Notes covering a few anomalies, outliers and interesting observations ........................................... 231 Objective Analysis of Regional Performance in Three Core Areas of Success ............................... 234 Overall Ranking 1 – Best MNOs by region for size and growth..................................................... 236 Overall Ranking 2 – Best MNOs by region for extracting revenues from subscribers ................... 237 Overall Ranking 3 – Best MNOs by region for advancing non-voice mobile services ................... 238 Methodology .........................................................................................................................241 Appendices ...........................................................................................................................249 Glossary ........................................................................................................................................ 251 Portio Research Classifications ..................................................................................................... 262 Companies Mentioned in this Report ............................................................................................ 263 About the Authors.......................................................................................................................... 268 Also available from Portio Research Limited ................................................................................. 270 4 © 2009, Portio Research. All Rights Reserved
  • 5. Ranking The World’s Best Mobile Operators List of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: Figure 15: Figure 16: Figure 17: Figure 18: Figure 19: Figure 20: Figure 21: Figure 22: Figure 23: Figure 24: Figure 25: Figure 26: Figure 27: Figure 28: Figure 29: Figure 30: Figure 31: Figure 32: Figure 33: Figure 34: Figure 35: Figure 36: Figure 37: Figure 38: Figure 39: Figure 40: Figure 41: Figure 42: Figure 43: Figure 44: Figure 45: Figure 46: Figure 47: Figure 48: Figure 49: Figure 50: Figure 51: Performance Measurement Indices Used to Measure the Performance of MNOs Worldwide ......................................................................................................................... 12 Monthly ARPU vs. Monthly ARPU PPP – Worldwide Markets (In USD, 2008) ................. 18 Top 20 MNOs Worldwide – MNO Monthly ARPU PPP (2008) ......................................... 19 Top 3 MNOs Worldwide – MNO Monthly ARPU PPP (2008) ........................................... 22 MNOs’ Monthly ARPU and Monthly ARPU PPP – Brazil (In USD, 2008) ......................... 23 MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – Brazil (In Percent, End-2008)........................................................................................................... 24 MNOs’ Blended Monthly Churn – Brazil (In Percent, 2008) .............................................. 24 MNOs’ Monthly ARPU and Monthly ARPU PPP – The UK (In USD, 2008) ...................... 26 MNOs’ 3G Subscriber Base – The UK (In Million, End-2008)........................................... 27 MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – The UK (In Percent, End-2008)........................................................................................................... 27 MNOs’ Monthly Data ARPU – The UK (In USD, 2008) ..................................................... 28 MNOs’ Monthly ARPU and Monthly ARPU PPP – Canada (In USD, 2008) ..................... 29 MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – Canada (In Percent, End-2008)........................................................................................................... 30 MNOs’ Gross Postpaid Subscriber Additions – Canada (In Million, 2008)........................ 30 Data Revenue as a Percentage of ARPU – Rogers Canada (In Percent, 2008) .............. 31 Scatter Plot of Monthly ARPU vs. Monthly Disposable Income – Worldwide Markets (2008) ............................................................................................................................... 33 Top 20 MNOs Worldwide – ARPU as a Percentage of Disposable Income (2008) ........... 34 Top 3 MNOs Worldwide – ARPU as a Percentage of Disposable Income (2008) ............. 37 Subscriber Base and Penetration – Nigeria (2006-2008) .................................................. 38 Factors Hampering Quality of Service in Nigeria ............................................................... 39 Demographic Break-out – Sudan (End-2008) ................................................................... 41 Subscriber Base and Monthly ARPU – Morocco (2006-2008) .......................................... 43 Utilisation of 3.5G Networks by Maroc Telecom (June 2007- February 2008) .................. 44 MNOs’ Subscriber Base – Kenya (In Million, End-2008) ................................................... 45 Safaricom’s Strategies ...................................................................................................... 46 Safaricom’s Targeted Marketing Strategy ......................................................................... 46 Top 10 MNOs Worldwide – Total Revenue & Revenue Growth (2008)............................. 50 Top 20 MNOs Worldwide – Revenue Growth of the MNO (2008) ..................................... 51 Top 3 MNOs Worldwide – Revenue Growth of the MNO (2008) ....................................... 54 MNOs’ Market Share – Ukraine (In Percent, 2006-2008) .................................................. 55 MNOs’ Total Revenue – Ukraine (In USD Million, 2006-2008) .......................................... 56 life:)’s Success Strategies ................................................................................................. 56 life:)’s Innovative Products................................................................................................. 57 life:)’s Range of Services ................................................................................................... 58 MNOs’ Total Revenues – Lithuania (In USD Billion, 2007-2008) ...................................... 60 BITE’s Success Strategies ................................................................................................ 61 BITE’s Key Milestones (2003-2008) .................................................................................. 62 MNOs’ Subscriber Base – Brazil (In Million, End-2008) .................................................... 64 Key MNOs’s Total Revenues –Brazil (In USD Billion, 2006-2008) ................................... 65 MNOs’ Revenue Growth – Brazil (In Percent, 2007-2008) ................................................ 65 Oi’s Revenue Growth Strategies ....................................................................................... 66 Oi’s Subscriber Acquisition Strategies............................................................................... 66 Oi’s Services ..................................................................................................................... 67 Factors Affecting EBITDA Margin...................................................................................... 69 MNOs’ EBITDA Margin and Market Share (In Percent, 2008)........................................... 70 Top 20 MNOs Worldwide – MNO Profitability (2008) ........................................................ 71 Top 3 MNOs Worldwide – MNO Profitability (2008) .......................................................... 74 EBITDA Margin and Total Revenue – Globe Telecom (2006-2008).................................. 75 Globe Telecom’s Success Strategies ................................................................................ 76 Globe Telecom’s Service Innovations ............................................................................... 77 MNOs’ Subscriber Base – Algeria (In Million, End-2008) .................................................. 78 © 2009, Portio Research. All Rights Reserved 5
  • 6. Ranking The World’s Best Mobile Operators Figure 52: Figure 53: Figure 54: Figure 55: Figure 56: Figure 57: Figure 58: Figure 59: Figure 60: Figure 61: Figure 62: Figure 63: Figure 64: Figure 65: Figure 66: Figure 67: Figure 68: Figure 69: Figure 70: Figure 71: Figure 72: Figure 73: Figure 74: Figure 75: Figure 76: Figure 77: Figure 78: Figure 79: Figure 80: Figure 81: Figure 82: Figure 83: Figure 84: Figure 85: Figure 86: Figure 87: Figure 88: Figure 89: Figure 90: Figure 91: Figure 92: Figure 93: Figure 94: Figure 95: Figure 96: Figure 97: Figure 98: Figure 99: Figure 100: Figure 101: Figure 102: Figure 103: 6 EBITDA Margin and Total Revenue – Djezzy Algeria (2006-2008) .................................. 79 MNOs’ Monthly ARPU – Algeria (In USD, 2008) ............................................................... 80 MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base of the MNO – Algeria (In Percent, 2007 & 2008)..................................................................................... 80 EBITDA Margin and Total Revenue – KPN The Netherlands (2006-2008) ...................... 82 KPN’s Success Strategies ................................................................................................. 83 Market Share of MNOs – The Netherlands (2008) ............................................................ 83 KPN’s Segment Strategies ................................................................................................ 84 Top 10 MNOs Worldwide – Monthly APPU and Monthly ARPU (In USD, 2008) ............... 86 Top 10 Countries Worldwide – Y-o-Y Subscriber Growth (2007 to 2008) and Penetration (End-2008) ........................................................................................................................ 89 Top 20 MNOs Worldwide – MNO Growth vs. Market Growth (2008) ................................ 90 Top 3 MNOs Worldwide – MNO Growth vs. Market Growth (2008) .................................. 93 MNOs’ Market Share – Italy (In Percent, December 2006-December 2008)..................... 94 Wind’s Strategies .............................................................................................................. 95 TDC’s Success Strategies ................................................................................................. 97 Revenue by Business Segment – TDC (2008) .................................................................. 98 Vodafone Ireland’s Success Strategies ........................................................................... 100 MNOs’ Market Share - Ireland (2007 & 2008) ................................................................. 101 Top 10 MNOs Worldwide – Market Share (In Percent, End-2008) .................................. 104 Top 20 MNOs Worldwide – Significance of the MNO (2008) .......................................... 105 Top 3 MNOs Worldwide – Significance of the MNO (2008) ............................................ 108 Demographic Break-out – The UAE Worldwide (End-2008) ........................................... 110 du’s Key Success Factors Summarized Worldwide ........................................................ 110 du’s First-time Products in The UAE Market.................................................................... 111 du’s Strategic Marketing Initiatives .................................................................................. 112 MNOs’ Subscriber Base – Venezuela (In Million, End-2008) ......................................... 114 Movistar’s Success Strategies......................................................................................... 115 MNOs’ Market Share – Venezuela (2007 & 2008) .......................................................... 116 MNOs’ Market Share – Saudi Arabia (2007 & 2008) ....................................................... 119 Mobily’s Success Factors ................................................................................................ 120 Mobily’s First Time Services ............................................................................................ 121 Subscriber Base – Mobily (In Million, 2006-2008) ........................................................... 121 Voice Revenue as a Percentage of Service Revenue – Worldwide (In Percent, 20042013F) ............................................................................................................................ 124 Top 20 MNOs Worldwide – Data Revenue Measure (2008) ........................................... 125 Top 3 MNOs Worldwide – Data Revenue Measure (2008) ............................................. 128 MNOs’ Subscriber Base – The Philippines (In Million, End-2008) ................................... 129 Data Revenue Measure – Smart Communications (2006-2008) .................................... 130 SMS Volume – Smart Communications (In Billion, 2006-2008) ...................................... 131 SMS Revenue – Smart Communications (In USD Billion, 2006-2008)............................ 131 SMS Revenue as a Percentage of Data Revenue – Smart Communications (In Percent, 2006-2008) ..................................................................................................................... 132 Voice Tariff-per-Minute to per-message SMS Cost Ratio of Asian MNOs (April 2009) ... 132 MNOs’ Subscriber Base – Indonesia (In Million, End-2008)............................................ 133 Data Revenue Measure – Telkomsel Indonesia (2006-2008) ....................................... 134 SMS Revenue – Telkomsel (In USD Billion, 2007 & 2008) ............................................. 135 SMS Revenue as a Percentage of Data Revenue – Telkomsel (In Percent, 2007 & 2008)............................................................................................... 135 Telkomsel’s Initiatives in Mobile Content Market ............................................................. 136 MNOs’ Subscriber Base – Japan (In Million, End-2008) ................................................. 138 Data Revenue Measure – NTT DOCOMO Japan (2006-2008) ....................................... 139 FOMA and i-mode Subscribers – NTT DOCOMO (In Million, End-2008) ........................ 140 NTT DOCOMO’s Strategies ............................................................................................ 141 NTT DOCOMO’s Handset Series Launched in 2008 ...................................................... 142 Top 10 MNOs Worldwide – Monthly Churn Rate and EBITDA Margin (In Percent, 2008) ........................................................................................................... 144 Top 20 MNOs Worldwide – Measuring Subscriber Loyalty (2008) .................................. 145 © 2009, Portio Research. All Rights Reserved
  • 7. Ranking The World’s Best Mobile Operators Figure 104: Top 3 MNOs Worldwide – Measuring Subscriber Loyalty (2008) ................................... 148 Figure 105: MNOs’ Subscriber Base – Japan (In Million, End-2008) ................................................. 149 Figure 106: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – Japan (In Percent, 2008) ................................................................................................ 150 Figure 107: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – KDDI (In Percent, Q1 2008 – Q4 2008) .......................................................................... 150 Figure 108: KDDI’s Total Customer Satisfaction Policy...................................................................... 151 Figure 109: KDDI’s Retention Measures ............................................................................................ 152 Figure 110: MNOs’ Subscriber Base – Singapore (In Million, End-2008) ........................................... 153 Figure 111: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – Singapore (In Percent, 2008) .......................................................................................... 154 Figure 112: SingTel’s Subscriber Satisfaction and Retention Strategies............................................ 155 Figure 113: SingTel’s Postpaid Plans ................................................................................................. 155 Figure 114: SingTel’s Customised Services ....................................................................................... 156 Figure 115: MNOs’ Subscriber Base – Taiwan (In Million, End-2008)................................................ 158 Figure 116: Chunghwa Telecom’s Subscriber Satisfaction Strategies ............................................... 159 Figure 117: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – Taiwan (In Percent, 2008) .............................................................................................. 159 Figure 118: Chunghwa Telecom’s Initiatives ...................................................................................... 160 Figure 119: Benefits of Postpaid Subscriptions for MNOs .................................................................. 163 Figure 120: Top 10 Mobile Markets Worldwide – Postpaid Subscribers and Mobile Penetration (In Percent, 2008) ................................................................................................................ 164 Figure 121: Top 20 MNOs Worldwide – Postpaid Penetration Measure (2008) ................................. 165 Figure 122: Top 3 MNOs Worldwide – Postpaid Penetration Measure (2008) ................................... 168 Figure 123: MNOs’ Subscriber Base – Peru (In Million, End-2008).................................................... 169 Figure 124: Telefonica’s Strategies .................................................................................................... 170 Figure 125: Postpaid Subscriber Base – Peru (In Million, End-2008)................................................. 170 Figure 126: MNOs’ Subscriber Base – Colombia (In Million, End-2008) ............................................ 172 Figure 127: Comcel’s Strategies ........................................................................................................ 173 Figure 128: Postpaid Subscriber Base – Colombia (In Million, 2006-2008) ....................................... 173 Figure 129: Vodafone Egypt’s Success Strategies............................................................................. 176 Figure 130: Postpaid Subscriber Base – Egypt (In Million, End-2008) ............................................... 176 Figure 131: Vodafone Egypt’s Product Portfolio ................................................................................. 177 Figure 132: Advantages of Technology Evolution .............................................................................. 180 Figure 133: Evaluation of an MNO based on Network Technology and Mobile Penetration .............. 181 Figure 134: Top 20 MNOs Worldwide – Technology Measure (2008)................................................ 182 Figure 135: Top 3 MNOs Worldwide – Technology Measure (2008).................................................. 185 Figure 136: Vodacom DR Congo’s Success Strategies ..................................................................... 186 Figure 137: MNOs’ Market Share – DR Congo (End-2008) ............................................................... 187 Figure 138: Capital Expenditure – Vodacom (In USD Million, 2003-2008) ......................................... 187 Figure 139: Vodacom’s Network Expansion in DR Congo ................................................................. 188 Figure 140: MTN Sudan’s Success Strategies ................................................................................... 189 Figure 141: Subscriber Base – MTN Sudan (In Million, 2006-2008) .................................................. 190 Figure 142: Capital Expenditure – MTN Sudan (In USD Million, 2006-2008) ..................................... 190 Figure 143: MTN Sudan Pay as You Talk – Option Plans .................................................................. 191 Figure 144: MNOs’ Subscriber Base – Egypt (In Million, End-2008) .................................................. 192 Figure 145: Network Deployment – Egypt .......................................................................................... 193 Figure 146: Market Share – Egypt (In Percent, December 2006 - December 2008) .......................... 193 Figure 147: Etisalat’s Strategies ......................................................................................................... 194 Figure 148: MNO Choice – Egypt (December 2007)* ....................................................................... 195 Figure 149: Monthly Churn – MobiNil (In Percent, Q1 2007 – Q4 2008) ............................................ 195 Figure 150: Top 5 MNOs Worldwide – Subscriber Base (In Million, End-2008) ................................. 198 Figure 151: China Mobile’s Success Strategies ................................................................................. 199 Figure 152: China Mobile’s Industry-specific Applications .................................................................. 200 Figure 153: Capital Expenditure – China Mobile (In USD Billion, 2008-2011F).................................. 201 Figure 154: Top 10 MNOs Worldwide – Monthly Average Profit Per User (In USD, 2008) ................ 202 Figure 155: AT&T’s Success Strategies ............................................................................................. 203 Figure 156: Top 20 MNOs Worldwide – Overall Ranking Using Traditional Approach (2008)........... 213 © 2009, Portio Research. All Rights Reserved 7
  • 8. Ranking The World’s Best Mobile Operators Figure 157: Figure 158: Figure 159: Figure 160: Figure 161: Figure 162: Figure 163: Figure 164: Figure 165: Figure 166: Top 20 MNOs Worldwide – Overall Ranking Using Normalised Approach (2008) ......... 218 Top 20 MNOs Worldwide – Overall Ranking Using Blended Approach (2008) .............. 227 Regional Count of Top 10 Operators for Different Approaches ...................................... 230 Focus Areas of the Three Overall Rankings .................................................................... 235 Methodology for Calculating MNO Score for a Performance Measurement Index .......... 243 Methodology for Calculating Normalised Overall MNO Score ......................................... 244 Assignment of weights to different Performance Measurement Indices .......................... 245 Methodology for Calculating Traditional Overall MNO Score .......................................... 246 Methodology for Calculating Blended Overall MNO Score .............................................. 246 Focus Areas of the Overall Rankings and Constituting Performance Measurement Indices. ................................................................................................................................... 247 Figure 167: Methodology for Calculating Overall MNO Rankings – 1, 2 & 3 ...................................... 247 8 © 2009, Portio Research. All Rights Reserved
  • 9. Ranking The World’s Best Mobile Operators List of Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: Table 19: Table 20: Table 21: Table 22: Table 23: Table 24: Table 25: Table 26: Table 27: Table 28: Table 29: Table 30: Table 31: Table 32: Table 33: Table 34: Table 35: Table 36: Table 37: Table 38: Table 39: Table 40: Table 41: Table 42: Table 43: Table 44: Table 45: Table 46: Table 47: Table 48: Table 49: Top 50 MNOs Worldwide – Total Revenue (In USD Billion, 2008) ................................... 13 Top 50 MNOs Worldwide – Subscriber Base (In Million, End-2008)................................. 14 Top 50 MNOs Worldwide – Monthly ARPU (In USD, 2008) ............................................. 15 MNOs Worldwide Ranked 1 to 20 – MNO Monthly ARPU PPP (2008) ............................ 20 MNOs Worldwide Ranked 21 to 50 – MNO Monthly ARPU PPP (2008) ......................... 20 MNOs Worldwide Ranked 51 to 170 – MNO Monthly ARPU PPP (2008) ........................ 21 MNOs Worldwide Ranked 171 to 204 – MNO Monthly ARPU PPP (2008) ...................... 22 MNOs Worldwide Ranked 1 to 20 – ARPU as a Percentage of Disposable Income (2008) ............................................................................................................................... 35 MNOs Worldwide Ranked 21 to 50 – ARPU as a Percentage of Disposable Income (2008) ............................................................................................................................... 35 MNOs Worldwide Ranked 51 to 170 – ARPU as a Percentage of Disposable Income (2008) ............................................................................................................................... 36 MNOs Worldwide Ranked 171 to 204 – ARPU as a Percentage of Disposable Income (2008) ............................................................................................................................... 37 MNOs Worldwide Ranked 1 to 20 – Revenue Growth of the MNO (2008) ....................... 51 MNOs Worldwide Ranked 21 to 50 – Revenue Growth of the MNO (2008) .................... 52 MNOs Worldwide Ranked 51 to 170 – Revenue Growth of the MNO (2008) ................... 53 MNOs Worldwide Ranked 171 to 204 – Revenue Growth of the MNO (2008) ................. 54 MNOs Worldwide Ranked 1 to 20 – MNO Profitability (2008) .......................................... 71 MNOs Worldwide Ranked 21 to 50 – MNO Profitability (2008) ....................................... 72 MNOs Worldwide Ranked 51 to 170 – MNO Profitability (2008) ...................................... 73 MNOs Worldwide Ranked 171 to 204 – MNO Profitability (2008)..................................... 74 MNOs Worldwide Ranked 1 to 20 – MNO Growth vs. Market Growth (2008) .................. 91 MNOs Worldwide Ranked 21 to 50 – MNO Growth vs. Market Growth (2008) ............... 91 MNOs Worldwide Ranked 51 to 170 – MNO Growth vs. Market Growth (2008).............. 92 MNOs Worldwide Ranked 171 to 204 – MNO Growth vs. Market Growth (2008)............ 93 MNOs Worldwide Ranked 1 to 20 – Significance of the MNO (2008) ............................. 106 MNOs Worldwide Ranked 21 to 50 – Significance of the MNO (2008) .......................... 106 MNOs Worldwide Ranked 51 to 170 – Significance of the MNO (2008) ........................ 107 MNOs Worldwide Ranked 171 to 204 – Significance of the MNO (2008) ...................... 108 MNOs Worldwide Ranked 1 to 20 – Data Revenue Measure (2008).............................. 126 MNOs Worldwide Ranked 21 to 50 – Data Revenue Measure (2008)........................... 126 MNOs Worldwide Ranked 51 to 170 – Data Revenue Measure (2008)......................... 127 MNOs Worldwide Ranked 171 to 204 – Data Revenue Measure (2008)....................... 128 MNOs Worldwide Ranked 1 to 20 – Measuring Subscriber Loyalty (2008) .................... 146 MNOs Worldwide Ranked 21 to 50 – Measuring Subscriber Loyalty (2008) ................. 146 MNOs Worldwide Ranked 51 to 170 – Measuring Subscriber Loyalty (2008) ............... 147 MNOs Worldwide Ranked 171 to 204 – Measuring Subscriber Loyalty (2008) ............. 148 MNOs Worldwide Ranked 1 to 20 – Postpaid Penetration Measure (2008) ................... 166 MNOs Worldwide Ranked 21 to 50 – Postpaid Penetration Measure (2008) ................ 166 MNOs Worldwide Ranked 51 to 170 – Postpaid Penetration Measure (2008) .............. 167 MNOs Worldwide Ranked 171 to 204 – Postpaid Penetration Measure (2008) ............ 168 MNOs Worldwide Ranked 1 to 20 – Technology Measure (2008) .................................. 183 MNOs Worldwide Ranked 21 to 50 – Technology Measure (2008) ............................... 183 MNOs Worldwide Ranked 51 to 170 – Technology Measure (2008) .............................. 184 MNOs Worldwide Ranked 171 to 204 – Technology Measure (2008) ............................ 185 Top 10 Operators by Subscribers – Regional (End-2008) .............................................. 208 Top 10 Operators by Total Revenues – Regional (2008) ............................................... 209 Top 10 Operators by Monthly ARPU – Regional (2008) ................................................. 210 Top 20 Operators by different KPIs - Worldwide (2008) ................................................. 211 MNOs Worldwide Ranked 1 to 20 – Overall Ranking Using Traditional Approach (2008) ... ................................................................................................................................... 213 MNOs Worldwide Ranked 21 to 50 – Overall Ranking Using Traditional Approach (2008) ................................................................................................................................... 214 © 2009, Portio Research. All Rights Reserved 9
  • 10. Ranking The World’s Best Mobile Operators Table 50: Table 51: Table 52: Table 53: Table 54: Table 55: Table 56: Table 57: Table 58: Table 59: Table 60: Table 61: Table 62: Table 63: Table 64: Table 65: Table 66: 10 MNOs Worldwide Ranked 51 to 170 – Overall Ranking Using Traditional Approach (2008) ............................................................................................................................. 215 MNOs Worldwide Ranked 171 to 204 – Overall Ranking Using Traditional Approach (2008) ............................................................................................................................. 216 MNOs Worldwide Ranked 1 to 20 – Overall Ranking Using Normalised Approach (2008) . ................................................................................................................................... 219 MNOs Worldwide Ranked 21 to 50 – Overall Ranking Using Normalised Approach (2008) ............................................................................................................................. 219 MNOs Worldwide Ranked 51 to 170 – Overall Ranking Using Normalised Approach (2008) ............................................................................................................................. 220 MNOs Worldwide Ranked 171 to 204 – Overall Ranking Using Normalised Approach (2008) ............................................................................................................................. 221 Top 3 Operators Worldwide for Performance Measurements – Normalised Approach (2008) ............................................................................................................................. 222 Key Strategies Identified for Performance Measurements – Normalised Approach ....... 223 Regional Mix of MNOs in Top 20 List for Each Performance Measurement – Normalised Approach (2008) ............................................................................................................. 225 MNOs Worldwide Ranked 1 to 20 – Overall Ranking Using Blended Approach (2008) 228 MNOs Worldwide Ranked 21 to 50 – Overall Ranking Using Blended Approach (2008) ... ................................................................................................................................... 228 MNOs Worldwide Ranked 51 to 170 – Overall Ranking Using Blended Approach (2008) . ................................................................................................................................... 229 MNOs Worldwide Ranked 171 to 204 – Overall Ranking Using Blended Approach (2008) ................................................................................................................................... 230 Top 10 Regional Operators by Overall Ranking 1 (OR1)................................................ 236 Top 10 Regional Operators by Overall Ranking 2 (OR2)................................................ 237 Top 10 Regional Operators by Overall Ranking 3 (OR3)................................................ 238 Top 20 Worldwide Operators by Different Overall Rankings .......................................... 239 © 2009, Portio Research. All Rights Reserved
  • 11. Ranking The World’s Best Mobile Operators Chapter 1 Introduction © 2009, Portio Research. All Rights Reserved 11
  • 12. Ranking The World’s Best Mobile Operators Introduction Around the world, the market conditions that mobile network operators (MNOs) operate in vary considerably depending on different economic and developmental factors. Therefore, key performance indicators (KPIs) reported by MNOs cannot simply be taken at face value as a means for evaluating their performance or comparing their successes against those of other MNOs in different markets. A level playing field is required to judge the performance of MNOs through the use of suitable performance measurement indices. This study involves evaluating the performance of MNOs using ten all-new performance measurement indices (PMIs). These are shown in the figure below. Figure 1: Performance Measurement Indices Used to Measure the Performance of MNOs Worldwide Significance of the MNO Measuring Subscriber Loyalty Postpaid Penetration Measure MNO Growth vs. Market Growth MNO Profitability MNO Ranking Data Revenue Measure Technology Measure MNO ARPU PPP Revenue Growth of the MNO ARPU as a Percentage of Disposable Income Source: Portio Research Ltd. The rationale behind the selection of these PMIs has been explained later in the report. These PMIs cover a wide range of performance indicators and include normalising factors such as PPP (Purchasing Power Parity), GDP (Gross Domestic Product) growth, population growth, market penetration, number of years of operation, technology employed, etc. MNOs worldwide have been ranked on these ten performance measurement indices and an overall ranking of 204 major mobile network operators worldwide has been calculated from these results. This study also includes a brief analysis of the strategies adopted by high-ranking MNOs after each individual performance measurement chapter. Standard KPIs In this report, we have taken a different approach and normalised each performance measurement index to create a level playing field for MNOs. By doing this we eliminate the undue advantage gained by certain MNOs because of varying market environments. However, industry practice is to evaluate operators on the basis of the following three KPIs: 12 © 2009, Portio Research. All Rights Reserved We have taken a different approach and normalised each performance measurement index to create a level playing field for MNOs.
  • 13. Ranking The World’s Best Mobile Operators • Total Revenues Subscriber Base ARPU • • Total Revenues: The revenue generated by an operator gives an indication of the success of the business model deployed to drive revenues. Total revenues have two components: service revenues and equipment (or handset) revenues. Mobile service revenue is further divided into two segments: voice services and data services. In emerging markets, an MNO focuses on voice services; whereas in developed markets, the focus is on complementing voice services with a range of value added voice and data services. Handset sales – as a source of revenue generation – have more relevance for CDMA-based operators and for MNOs providing handsets at subsidised costs to push the uptake for new services. Operators innovate with these products and service offerings to increase their revenues. The table below shows the 50 MNOs worldwide with the highest total revenue. Table 1: Top 50 MNOs Worldwide – Total Revenue (In USD Billion, 2008) MNO Total Revenue (In USD Billion) Rank MNO Total Revenue (In USD Billion) 1 China Mobile 57.5 2 AT&T The US 49.3 26 TIM Brasil 7.7 27 Bouygues France 7.6 3 Verizon The US 4 NTT DOCOMO Japan 49.3 28 VimpelCom Russia 7.4 43.9 29 MegaFon Russia 7.1 5 Sprint The US 30.4 30 Turkcell Turkey 7.0 6 KDDI Japan 27.2 31 Bharti Airtel India 6.6 7 T-Mobile The US 22.0 32 Claro Brazil 6.4 8 Orange France 15.8 33 Rogers Canada 6.0 9 SoftBank Japan 15.2 34 T-Mobile The UK 6.0 10 Movistar Spain 14.2 35 Vodacom South Africa 5.9 11 Telecom Italia 14.1 36 Telstra Australia 5.7 12 SFR France 13.6 37 Wind Italy 5.6 13 Telcel Mexico 12.3 38 O2 Germany 5.3 14 T-Mobile Germany 11.4 39 Orange Spain 5.2 15 Vodafone Germany 10.9 40 E-Plus Germany 4.7 16 SK Telecom South Korea 10.8 41 KPN The Netherlands 4.6 17 O2 The UK 10.4 42 LG Telecom South Korea 4.5 18 Vodafone Spain 10.3 43 Telus Mobility Canada 4.4 19 Vodafone The UK 10.0 44 4.2 20 China Unicom 10.0 45 21 Vodafone Italy 9.1 46 Bell Mobility Canada Reliance Communication India Movistar Venezuela 22 Vivo Brazil 8.8 47 Optus Australia 4.1 23 Orange The UK 8.8 48 MTN South Africa 4.0 24 MTS Russia 8.0 49 Telkomsel Indonesia 4.0 25 KTF South Korea 7.8 50 Orange Poland 3.8 Rank Limitations Total revenue helps visualise the scale of an MNO’s operations. However, it fails to indicate how successful an operator has been in growing its total revenues. It also fails to take into consideration the state of GDP growth of the country; as higher GDP growth provides more chances for an operator to grow its revenues. Market conditions, such as mobile penetration, also need to be considered to evaluate an operator’s performance in the © 2009, Portio Research. All Rights Reserved 13 4.2 4.1
  • 14. Ranking The World’s Best Mobile Operators market, as emerging markets generally yield low revenue per user compared to developed markets. Therefore, comparing MNOs on the basis of total revenues generated – without considering the market conditions of their country of operation – might not be an effective way of evaluating the operators’ efforts at increasing their revenues. Subscriber Base: The size of an MNO’s subscriber base highlights the popularity and perception of its brand in the minds of users in the market, and illustrates the extent of its hold over and strength within the local wireless market. The rate of subscriber growth also informs us whether an operator is gaining or losing popularity in the market. The table below highlights the 50 MNOs worldwide that have developed the largest subscriber bases. Table 2: Top 50 MNOs Worldwide – Subscriber Base (In Million, End-2008) Rank MNO Subscribers (In Million) Rank MNO Subscribers (In Million) 1 China Mobile 457.3 26 KDDI Japan 30.6 2 China Unicom 179.0 27 TCI Iran 29.8 3 Bharti Airtel India 85.7 28 AIS Thailand 27.7 4 AT&T The US 77.0 29 Comcel Colombia 27.4 5 Verizon The US 72.1 30 Vodacom South Africa 26.5 6 Telkomsel Indonesia 64.7 31 Orange France 26.4 7 63.4 32 Excelcomindo Indonesia 26.0 61.3 33 Globe The Philippines 24.7 9 MTS Russia Reliance Communication India Vodafone India 60.9 34 Oi Brazil 24.4 10 Telcel Mexico 56.4 35 Movistar Spain 23.6 11 NTT DOCOMO Japan 54.2 36 Kyivstar Ukraine 23.5 12 Sprint The US 49.3 37 Vodafone Italy 23.1 13 VimpelCom Russia 46.1 38 SK Telecom South Korea 23.0 14 Vivo Brazil 45.0 39 21.4 15 MegaFon Russia 43.6 40 16 T-Mobile Germany 39.1 41 MTN Nigeria GrameenPhone Bangladesh MobiNil Egypt 17 Claro Brazil 38.7 42 SoftBank Japan 20.0 18 Turkcell Turkey 37.0 43 O2 The UK 19.5 19 TIM Brasil 36.4 44 Telenor Pakistan 19.4 20 Vodafone Germany 36.2 45 SFR France 19.4 21 Smart The Philippines 35.6 46 Vodafone The UK 19.2 22 Telecom Italia 34.8 47 DTAC Thailand 18.7 23 Idea Cellular India 34.2 48 Mobily Saudi Arabia 18.2 24 T-Mobile The US 32.8 49 MTS Ukraine 18.1 25 Mobilink Pakistan 31.6 50 E-Plus Germany 17.8 8 Limitations Although subscriber base is an industry standard used to evaluate an MNO, we believe it does not present a fair picture of efforts made by an operator in a particular market. We intend to support this argument by highlighting the huge dependence that subscriber base has on the population of a country. For instance, the top two operators in the above table are from China - the country with the highest population. The fact that two operators with the highest subscriber base are from a country with the highest population cannot be mere coincidence. This means that an operator could have a large subscriber base even without doing anything extraordinary in the market. 14 © 2009, Portio Research. All Rights Reserved 21.0 20.1
  • 15. Ranking The World’s Best Mobile Operators ARPU: The ARPU (Average Revenue Per User) achieved by an operator reflects the popularity of the services it offers. This KPI can be used to judge the acceptance level of an operator’s offerings among its subscribers. High ARPU levels suggest that the operator has been successful in penetrating its services with innovative and user friendly features. The 1 table below shows the 50 MNOs worldwide with the highest ARPU. Table 3: Top 50 MNOs Worldwide – Monthly ARPU (In USD, 2008) Rank MNO Monthly ARPU (In USD) Rank MNO Monthly ARPU (In USD) 1 3 The UK 74.2 26 Orange France 50.5 2 Bouygues France 63.9 27 Swisscom Switzerland 50.2 3 Vodafone Ireland 63.7 28 T-Mobile The US 50.0 4 O2 Ireland 63.6 29 Mobistar Belgium 47.6 5 Orange Switzerland 61.5 30 Vodafone Spain 47.5 6 Rogers Canada 60.5 31 TDC Denmark 47.0 7 Orange Austria 60.5 32 Orange The UK 46.9 8 Netcom Norway 59.4 33 46.7 9 Telus Mobility Canada 59.2 34 10 3 Austria 58.5 35 Vodafone Australia Partner Communications (Orange) Israel Movistar Spain 11 Meteor Ireland 58.0 36 O2 The UK 44.1 12 Nextel Brazil 58.0 37 KPN The Netherlands 43.2 13 KDDI Japan 57.4 38 Telstra Australia 43.1 14 Telenor Norway 57.2 39 Telenor Sweden 42.7 15 NTT DOCOMO Japan 57.0 40 Sonofon Denmark 42.0 16 55.8 41 Cellcom Israel 41.7 55.6 42 Mobilkom Austria 41.6 18 Sunrise Switzerland Proximus (Belgacom) Belgium SFR France 54.7 43 Nextel Argentina 41.0 19 Etisalat The UAE 54.3 44 SoftBank Japan 40.6 20 53.7 45 3 Italia 40.1 52.8 46 SK Telecom South Korea 40.0 22 Sprint The US Vodafone The Netherlands Telia Denmark 52.1 47 Vodafone The UK 39.7 23 Verizon The US 51.6 48 Elisa Finland 38.8 24 Bell Mobility Canada 51.3 49 Optus Australia 38.5 25 AT&T The US 50.6 50 T-Mobile The UK 38.3 17 21 Limitations Like subscriber base, ARPU too is subject to various local conditions, creating a favourable bias towards some MNOs. In a particular market, ARPU is directly linked to the disposable income of users. This explains why most of the operators in the above table are from Europe and North America, wherein operators can easily generate high ARPU from their higherearning subscribers. However, if an MNO has been successful in generating comparable ARPU in low income markets, such as those in Africa, it deserves extra credit for this. Apart from disposable income, ARPU worldwide varies according to the PPP (Purchasing Power Parity) of a country. ARPU is reported in USD after conversion from the local currency; however, this conversion does not take PPP into consideration, which gives an edge to operators in those countries whose non-PPP exchange rates are high. 1 Please note: Unless otherwise stated, ARPU stands for average revenue per user per month. © 2009, Portio Research. All Rights Reserved 15 46.7 44.7
  • 16. Ranking The World’s Best Mobile Operators The key features of this report include the following: • A comparative analysis of the performance of 204 MNOs worldwide using ten allnew performance measurements. • A brief description of why each performance measurement index has been used to evaluate the MNOs. • An overview of the strategies employed by 33 MNOs who ranked highly across different performance measurement indices. • An overall ranking of all 204 MNOs assessed in this report, calculated on the basis of their results across the ten performance measurement indices. Please note: From an initial assessment of 700-plus MNOs, this complex report has involved extensive data collection for 204 mobile network operators worldwide. Obtaining data for over 200 operators is an understandably lengthy process, and during our collection window in Q1 2009 the latest complete set of available data was for full year end-2008. For this reason, MNOs in this report are ranked on their full year 2008 performance, not 2009. 16 © 2009, Portio Research. All Rights Reserved
  • 17. Ranking The World’s Best Mobile Operators Chapter 2 Performance Measurement 1 – MNO ARPU PPP © 2009, Portio Research. All Rights Reserved 17
  • 18. Ranking The World’s Best Mobile Operators Performance Measurement 1 – MNO ARPU PPP MNO ARPU (Average Revenue Per User) is an important measure of an operator’s performance and its ability to tap the market potential. Operators worldwide have focused on extending the utility of mobile services to increase mobile usage per subscriber and thereby increase ARPU. However, an operator’s efforts are not truly reflected through ARPU values in terms of USD. These values do not take into account the purchasing power of subscribers in different countries, and therefore an observer might overlook the different levels of effort required for pushing the same value of mobile products and services in different countries. The figure below compares the ARPU and ARPU PPP (Purchasing Power Parity) for some of the markets during 2008. 60 50 40 30 20 10 Monthly ARPU Turkey The US The UK Russia South Africa Country Japan India Egypt China Canada Brazil 0 Australia Monthly ARPU and Monthly ARPU PPP (In USD) Figure 2: Monthly ARPU vs. Monthly ARPU PPP – Worldwide Markets (In USD, 2008) Monthly ARPU PPP Source: Portio Research Ltd. The figure shows that markets such as Brazil, Egypt and South Africa – despite having low ARPU compared to developed markets in Western Europe and North America – have ARPU PPP in the ‘above USD 25’ bracket. Therefore, the efforts of MNOs operating in these countries are commendable. As a result, we need to normalise the ARPU values with PPP factor to provide a just picture of an operator’s performance at promoting its services and driving revenues, compared to operators in other markets. Formula and Rationale The formula used for the calculation of this performance measurement is given below: Value = MNO ARPU (In USD) * Purchasing Power Parity Factor for the Country 18 © 2009, Portio Research. All Rights Reserved Brazil, Egypt and South Africa have ARPU PPP in the ‘above USD 25’ bracket.
  • 19. Ranking The World’s Best Mobile Operators Purchasing Power Parity – the normalising factor used in this index to compare MNOs worldwide – when multiplied with real ARPU, scales the ARPU values for MNOs depending on the PPP of the market of operation. An operator might get ahead of the competition using a variety of different approaches, such as a focus on pushing data services, attracting postpaid subscribers, subsidising handsets to enable Value-added service (VAS) uptake, targeting the enterprise segment, effecting network upgrades to create new opportunities of revenue generation. Regardless of whether an MNO is operating in a developed or an emerging market, the operators ranking high in this performance measurement index are the ones who have innovated with their offerings to suit the market requirements. As such there is great value in looking at their strategies. Rankings The figure below shows the Top 20 MNOs based on this performance measurement index. Figure 3: Top 20 MNOs Worldwide – MNO Monthly ARPU PPP (2008) 2 Rank 1 to 10 Rank 11 to 20 1 Bell Mobility Canada, 7.3 Verizon The US, 7.3 MTN Syria, 7.4 Starhub Singapore, 7.4 Sprint The US, 7.4 3Austria, 7.4 Telefonica Slovakia, 7.5 Bouygues France, 7.5 Orange Austria, 7.5 SingTel Singapore, 7.5 Orange Slovakia, 7.7 Partner Communications Israel, 7.6 2 Telus Mobility Canada, 7.7 3 SK Telecom South Korea, 7.7 4 Vodafone Czech Republic, 7.7 5 Rogers Canada, 7.8 Score 6 3The UK, 7.9 7 Nextel Peru, 8.1 8 Nextel Argentina, 9.5 9 Nextel Brazil, 10.0 10 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement index are given below. 2 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 19
  • 20. Ranking The World’s Best Mobile Operators Table 4: Rank MNOs Worldwide Ranked 1 to 20 – MNO Monthly ARPU PPP (2008) MNO Score Rank MNO Score 1 Nextel Brazil 10.00 11 SingTel Singapore 7.53 2 Nextel Argentina 9.48 12 Orange Austria 7.51 3 Nextel Peru 8.08 13 Bouygues France 7.51 4 3 The UK 7.89 14 Telefonica Slovakia 7.46 5 Rogers Canada 7.77 15 3 Austria 7.42 6 Vodafone Czech Republic 7.74 16 Sprint The US 7.42 7 SK Telecom South Korea 7.72 17 Starhub Singapore 7.38 8 Telus Mobility Canada 7.70 18 MTN Syria 7.37 9 Orange Slovakia Partner Communications Israel 7.67 19 Verizon The US 7.31 7.55 20 Bell Mobility Canada 7.29 10 Table 5: MNOs Worldwide Ranked 21 to 50 – MNO Monthly ARPU PPP (2008) Rank Score Rank MNO Score 21 O2 Czech Republic 7.26 36 Vodafone The Netherlands 7.07 22 AT&T The US 7.26 37 Movistar Spain 7.04 23 T-Mobile Slovakia 7.25 38 M1 Singapore 7.03 24 Cellcom Israel 7.24 39 Promonte Montenegro 7.01 25 T-Mobile The US 7.23 40 Meteor Ireland 6.99 26 Vodafone Ireland 7.22 41 Movistar Venezuela 6.97 27 O2 Ireland 7.22 42 Tele2 Croatia 6.94 28 Proximus Belgium 7.20 43 KTF South Korea 6.94 29 Vodafone Spain 7.19 44 Orange Switzerland 6.92 30 T-Mobile Czech Republic 7.17 45 Vodafone Australia 6.92 31 KDDI Japan 7.17 46 Pelephone Israel 6.91 32 NTT DOCOMO Japan 7.15 47 Orange France 6.91 33 LG Telecom South Korea 7.13 48 Netcom Norway 6.88 34 Hutch Thailand 7.12 49 Mobistar Belgium 6.83 35 20 MNO SFR France 7.10 50 T-Mobile Croatia 6.82 © 2009, Portio Research. All Rights Reserved
  • 21. Ranking The World’s Best Mobile Operators Table 6: MNOs Worldwide Ranked 51 to 170 – MNO Monthly ARPU PPP (2008) Rank MNO Rank MNO Rank MNO 51 Cosmote Greece 91 Vodafone Portugal 131 T-Mobile Montenegro 52 Telenor Norway 92 Telenor Sweden 132 Vodafone Italy 53 Vodafone Hungary 93 Asiacell Iraq 133 Globacom Nigeria 54 Telstra Australia 94 Zain Iraq 134 China Mobile 55 Taiwan Mobile 95 Vodafone The UK 135 Vodacom South Africa 56 SmarTone Hong Kong 96 Vodafone New Zealand 136 Sibir Telecom Russia 57 FeT Taiwan 97 137 Tele2 Lithuania 58 Vodafone Egypt 98 138 BITE Lithuania 59 Sunrise Switzerland 99 TIM Brasil CSL New World Mobility Hong Kong PCCW Mobile Hong Kong 139 Omnitel Lithuania 60 Orange The UK 100 Movilnet Venezuela 140 Telecom Italia 61 Orange Spain 101 TDC Denmark 141 MTS Belarus 62 Pannon Hungary 102 T-Mobile The Netherlands 142 HTIL Hong Kong 63 Digitel Venezuela 103 Mobily Saudi Arabia 143 Kyivstar Ukraine 64 DiGi Malaysia 104 VIPnet Croatia 144 Wind Italy 65 T-Mobile Hungary 105 T-Mobile The UK 145 3 Sweden 66 Maxis Malaysia 106 Tunisiana Tunisia 146 Claro Brazil 67 VIP Serbia 107 Tunicell Tunisia 147 Iusacell Mexico 68 Telenor Serbia 108 MegaFon Russia 148 Celtel DR Congo 69 mt:s Serbia 109 Wind Hellas Greece 149 Telcel Mexico 70 Celcom Malaysia 110 VimpelCom Russia 150 MTS Russia 71 KPN The Netherlands 111 Elisa Finland 151 DTAC Thailand 72 Mobiltel Bulgaria 112 MTN South Africa 152 Globul Bulgaria 73 Mobilkom Austria 113 Polkomtel Poland 153 Claro Argentina 74 TCI Iran 114 Entel PCS Chile 154 Bharti Airtel India 75 Etisalat The UAE 115 Telia Sonera Finland 155 Beeline Ukraine 76 Zain Jordan 116 Vivatel Bulgaria 156 Maroc Telecom Morocco 77 O2 The UK 117 MobiNil Egypt 157 Telia Sonera Sweden 78 Zain Sudan 118 Vodafone Romania 158 O2 Germany 79 Chunghwa Taiwan 119 159 MTS Ukraine 80 Telia Denmark 120 160 Claro Chile 81 Orange Poland 121 Movistar Chile Telecom Personal Argentina TMN Portugal 161 Turkcell Turkey 82 3 Italia 122 MTN Iran 162 Vodafone India 83 Vodafone Greece 123 Cell C South Africa 163 Base Belgium 84 Optus Australia 124 Velcom Belarus 164 Vodafone Germany 85 Swisscom Switzerland 125 Sonofon Denmark 165 Movistar Colombia 86 MTN Nigeria 126 DNA Finland 166 Oi Brazil 87 Etisalat Misr Egypt 127 Optimus Portugal 167 Tigo DR Congo 88 T-Mobile Austria 128 Movistar Argentina 168 AIS Thailand 89 PTC Poland 129 Vivo Brazil 169 Zain Nigeria 90 SoftBank Japan 130 Brasil Telecom 170 Tigo Colombia © 2009, Portio Research. All Rights Reserved 21
  • 22. Ranking The World’s Best Mobile Operators Table 7: MNOs Worldwide Ranked 171 to 204 – MNO Monthly ARPU PPP (2008) Rank MNO Rank MNO Rank MNO 171 Safaricom Kenya 183 195 MTN Afghanistan 172 E-Plus Germany 184 196 Globe The Philippines 173 T-Mobile Germany 185 Movistar Mexico Reliance Communication India Claro Peru 197 life:) Ukraine 174 Comcel Colombia 186 Djezzy Algeria 198 175 Tele2 Sweden 187 Telkomsel Indonesia 199 176 188 Vodafone Turkey 200 189 MTN Sudan 201 Mobilink Pakistan 178 Telefonica Peru Telecom Mobile New Zealand Idea Cellular India Nedjma Algeria GrameenPhone Bangladesh Telenor Pakistan 190 Zain Kenya 202 True Move Thailand 179 Avea Turkey 191 China Unicom 203 Excelcomindo Indonesia 180 du The UAE 192 Meditel Morocco 204 Banglalink Bangladesh 181 Tele2 Russia 193 Smart The Philippines 182 Vodacom DR Congo 194 Sun The Philippines 177 The figure below shows the Top 3 MNOs judged on this performance measurement index. Figure 4: Top 3 MNOs Worldwide – MNO Monthly ARPU PPP (2008) Nextel Brazil 1 Nextel Argentina 2 3 Nextel Peru Source: Portio Research Ltd. 22 © 2009, Portio Research. All Rights Reserved
  • 23. Ranking The World’s Best Mobile Operators MNO Strategies Nextel Brazil Ownership: NII Holdings Ltd. Launched: 1997 st Subscriber Base: 1.8 million (31 December 2008) 3 ARPU: USD 58.0 (Monthly, 2008) ARPU PPP: USD 103.6 (Monthly, 2008) st Market Share: 1.2 percent (31 December 2008) st Brazil Mobile Penetration: 76.7 percent (31 December 2008) Technology: iDen Market Environment – Brazil: • The largest market in the Latin American region • Dominated by the big four – Vivo, Claro, TIM and Oi • Predominantly a prepaid market with nearly 81.4 percent of total mobile subscribers in the prepaid segment by end-2008 • 3.5G is operational in the market • Mobile number portability already introduced The figure below shows the ARPU and ARPU PPP of MNOs in Brazil. Figure 5: MNOs’ Monthly ARPU and Monthly ARPU PPP – Brazil (In USD, 2008) Monthly ARPU and Monthly ARPU PPP (In USD) 120 103.6 100 80 58.0 60 40 20 14.2 25.4 29.1 16.3 33.4 29.0 18.7 16.2 12.0 21.5 0 Claro Vivo Brasil Telecom Nextel TIM Oi Operator Monthly ARPU Monthly ARPU PPP Source: Portio Research Ltd. Nextel’s Strategies Nextel Brazil is headquartered in Sao Paulo and offers its services in all the major business centres of the country including Rio de Janeiro, Sao Paulo, Belo Horizonte and Brasilia. It is the only Brazilian MNO to operate through iDen technology (developed by Motorola). The 3 Please note: From an initial assessment of 700-plus MNOs, this complex report has involved extensive data collection for 204 mobile network operators worldwide. Obtaining data for over 200 operators is an understandably lengthy process, and during our collection window in quarter one 2009 the latest complete set of available data was for full year end-2008. For this reason, MNOs in this report are ranked on their 2008 performance, not 2009. © 2009, Portio Research. All Rights Reserved 23
  • 24. Ranking The World’s Best Mobile Operators operator generates ARPU greatly above both the country’s average and that of its counterparts. This trend could be attributed to the following strategies: • Attract a high proportion of postpaid subscribers • Attract and retain high value subscribers • Focus on the enterprise segment • Offer high value products Attract a high proportion of postpaid subscribers Brazil is predominantly a prepaid market where most of the operators have nearly 80 percent prepaid subscribers. However, Nextel is the exception with nearly a full quota of postpaid subscribers. This unconventional approach in the Brazilian market has helped the operator to generate higher ARPU compared to the country’s other MNOs. Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 6: MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – Brazil (In Percent, End-2008) 99.0 100 80 60 40 19.0 20.2 18.6 15.6 17.9 Vivo Claro TIM Oi Brasil Telecom 20 0 Nextel Operator Source: Portio Research Ltd. Attract and retain high value subscribers Nextel has further enhanced its services and products to attract new users and retain its existing high value subscribers, which in turn helped the operator to generate more revenues and higher ARPU with prolonged contracts. Figure 7: MNOs’ Blended Monthly Churn – Brazil (In Percent, 2008) Blended Monthly Churn (In Percent) 7 6.1 6 5 4 3 2.6 2.7 2 1.3 1 0 Vivo Claro Brasil Telecom Nextel Operator Source: Portio Research Ltd. 24 © 2009, Portio Research. All Rights Reserved
  • 25. Ranking The World’s Best Mobile Operators Focus on enterprise segment Nextel has developed various enterprise solutions which have helped enterprises to improve their productivity. The operator also develops customised wireless business solutions. Furthermore, it has built a superior customer support team to assist these businesses in implementing its solutions and managing these applications. Recently, it introduced the BlackBerry Curve 8350i Smartphone in to the local market. The device, combined with the operator’s Push-to-Talk service, makes it ideal for businesses in the country. Offer innovative services and high value products The operator offers Motorola and BlackBerry handsets to its users, which include both enterprise and non-enterprise subscribers, and these devices tend to be more expensive than handsets offered by Nextel’s competitors. However, it also offers several value added services on these handsets enabling an enriched service experience for subscribers. One such solution developed by the operator is Nextel Direct Connect, a long range walkie-talkie service which initiates communication at the press of a button. It empowers the users to set up an instant conference which speeds up communication compared to other normal calls, and it enables the users to achieve efficiency. The table below highlights the importance of factors which enabled the operator to generate high ARPU. Factors Identified Nextel Brazil Focus on postpaid subscribers Focus on enterprise segment Retention of high valued subscribers Innovative services © 2009, Portio Research. All Rights Reserved 25 Nextel has built a superior customer support team to assist businesses in implementing and managing enterprise solutions.
  • 26. Ranking The World’s Best Mobile Operators 3 The UK Ownership: Hutchison Whampoa Limited Launched: 2003 st Subscriber Base: 4.8 million (31 December 2008) ARPU: USD 74.2 (Monthly, 2008) ARPU PPP: USD 62.8 (Monthly, 2008) st Market Share: 6.4 percent (31 December 2008) st The UK Mobile Penetration: 125.5 percent (31 December 2008) Technology: WCDMA Market Environment – The UK: • One of the largest mobile markets in Europe with nearly 76.4 million subscribers at end-2008 • The UK is a highly competitive wireless market and is approaching saturation • Market is dominated by four big players namely – O2, Vodafone, T-Mobile and Orange • World’s most successful MVNO, Virgin Mobile is based in The UK • 3G network launched by all five MNOs • Competition has led to lower voice and data plan prices and the promotion of bundled packages The figure below shows the ARPU and ARPU PPP of MNOs in The UK. Figure 8: MNOs’ Monthly ARPU and Monthly ARPU PPP – The UK (In USD, 2008) 74.2 Monthly ARPU and Monthly ARPU PPP (In USD) 80 62.8 70 60 50 44.1 46.9 37.3 39.7 40 38.3 39.7 32.4 33.6 30 20 10 0 O2 Orange T-Mobile 3 Vodafone Operator Monthly ARPU Monthly ARPU PPP Source: Portio Research Ltd. 3’s Strategies 3 was the first operator to launch 3G networks in the UK. The company bought the largest 3G licenses reserved for any new entrant in the UK and started its operations in March 2003. Since then it has offered several innovative and interesting services to its subscribers over its high speed networks. The operator generates the highest ARPU among all MNOs in the country; this feat can be attributed to the following reasons: 26 © 2009, Portio Research. All Rights Reserved
  • 27. Ranking The World’s Best Mobile Operators • • • Leader in 3G market Focus on higher valued postpaid subscribers Innovative approach to mobile broadband, content and new services Leader in 3G market The company pioneered 3G services in the UK. It has endeavoured to offer better user experiences to its subscribers in terms of data services use over its high speed networks, such as 3G and HSDPA. The MNO has also collaborated with other operators to expand its 3G network coverage. By end-2008 it had nearly 4.8 million 3G subscribers - the second highest in the country. The figure below compares the 3G subscriber bases of UK MNOs. Figure 9: MNOs’ 3G Subscriber Base – The UK (In Million, End-2008) 3G Subscriber Base (In Million) 6 5.1 4.8 5 4 3.5 3.4 T-Mobile Orange 3 2.0 2 1 0 O2 Vodafone 3 Operator Source: Portio Research Ltd. Focus on higher valued postpaid subscribers The operator has shifted its focus to the postpaid segment and limited its activities for the prepaid segment. This move has led to higher ARPU as the postpaid subscribers tend to spend more than their prepaid counterparts. The operator increased its postpaid subscriber base to nearly 68 percent of total subscribers by end-2008 as compared to 62 percent a year ago. As shown in the figure below, this number is the highest for any operator in the UK. Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 10: MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – The UK (In Percent, End-2008) 80 67.9 70 60 50 41.1 39.0 37.7 40 24.4 30 20 10 0 O2 Vodafone T-Mobile Orange 3 Operator Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 27
  • 28. Ranking The World’s Best Mobile Operators Innovative approach to mobile broadband, content and new services 3 is known to offer innovative services to its subscribers in the UK. To popularise and increase the uptake of these services it follows an interesting strategy of offering value added services bundled with voice and SMS services at relatively cheap rates, along with fixed free minutes and text messages. This incentivises subscribers to stick to its network, and thereafter it promotes other data services among its customers. The strategy of providing more value for money has also helped in bringing down monthly churn to 2.6 percent in 2008, compared to 3.6 in 2007. The figure below highlights the use of its data services with monthly data ARPU of USD 24.3 in 2008, again highest among the UK’s operators. Figure 11: MNOs’ Monthly Data ARPU – The UK (In USD, 2008) Monthly Data ARPU (In USD) 30 24.3 25 20 15.2 15 11.5 10.5 8.4 10 5 0 O2 Vodafone T-Mobile Orange 3 Operator Source: Portio Research Ltd. 3 has always set benchmarks in the UK wireless market with its innovative and user friendly services. These include: • 3 Skypephone: 3 and Skype launched a service in October 2007 which allows 3’s subscribers to make Skype to Skype calls and send Skype instant messages from mobile handsets to other Skype users for free. • Google Maps and Search: The company offers Google Search and Google Maps on its Planet 3 mobile portal. • WePay: The operator’s “WePay” service credits users’ account with a fixed amount for every call or SMS they receive. The table below highlights the importance of factors which enabled the operator to generate high ARPU. Factors Identified 3 The UK Leaders in 3G Focus on postpaid subscribers Innovation 28 © 2009, Portio Research. All Rights Reserved 3’s strategy of providing more value for money has also helped in bringing down monthly churn to 2.6 percent in 2008, compared to 3.6 in 2007.
  • 29. Ranking The World’s Best Mobile Operators Rogers Canada Ownership: Rogers Communications Launched: 1985 st Subscriber Base: 7.9 million (31 December 2008) ARPU: USD 60.52 (Monthly, 2008) ARPU PPP: USD 60.52 (Monthly, 2008) 4 st Market Share: 35.8 percent (31 December 2008) st Canada Mobile Penetration: 66.8 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Canada: • Dominated by three players – Bell Mobility, Telus Mobility and Rogers Wireless (all of which made our Top 20 for this performance measurement) • Wireless data use is quite expensive when compared to other major markets • Higher prices for data-plans led to higher ARPU in the country • Operators are increasing their focus on subscriber retention • Increased demand for data services has led to network upgrades The figure below shows the ARPU and ARPU PPP of MNOs in Canada. Figure 12: MNOs’ Monthly ARPU and Monthly ARPU PPP – Canada (In USD, 2008) 60.5 60.5 Monthly ARPU and Monthly ARPU PPP (In USD) 62 60 59.2 59.2 58 56 54 52 51.3 51.3 50 48 46 Bell Mobility Rogers Telus Mobility Operator Monthly ARPU Monthly ARPU PPP Source: Portio Research Ltd. Rogers’ Strategies Rogers Canada is the largest mobile network operator in the country with nearly 8 million subscribers by end-2008. Canada is a high ARPU market, a fact which can be attributed to the high percentage of postpaid subscribers and expensive data plans. Rogers has adopted certain strategies which enable the operator to generate higher revenue per user. These are mentioned below: • Focus on postpaid subscribers • Promotion of data services in both consumer and enterprise segments • Roll out of several Smartphones 4 Please note: The conversion factors for PPP in the US and Canada are 1. © 2009, Portio Research. All Rights Reserved 29
  • 30. Ranking The World’s Best Mobile Operators Focus on postpaid subscribers The operator has the highest percentage of postpaid subscribers in the country. Furthermore, it has launched various strategic plans to attract more postpaid subscribers and prolong their contracts. Rogers was successful in reducing postpaid churn from 1.2 percent in 2007 to 1.1 percent in 2008. The figure below compares the percentage of postpaid subscribers of the three major MNOs in Canada. Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 13: MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – Canada (In Percent, End-2008) 80.3 85 82.3 Telus Rogers 72.3 68 51 34 17 0 Bell Operator Source: Portio Research Ltd. The operator’s postpaid monthly ARPU witnessed an increase of 5 percent in 2008 compared to that in 2007. The success of Rogers’ strategy to increase the percentage of postpaid subscribers is reflected in the figure below, which clearly shows that in 2008 Rogers experienced the highest number of gross postpaid additions. Gross Postpaid Susbscriber Additions (In Million) Figure 14: MNOs’ Gross Postpaid Subscriber Additions – Canada (In Million, 2008) 0.6 0.54 0.48 0.5 0.4 0.30 0.3 0.2 0.1 0.0 Bell Telus Rogers Operator Source: Portio Research Ltd. Promotion of data services in both consumer and enterprise segments Canadian operators, including Rogers, charge comparatively higher prices for mobile data services compared to other major operators worldwide; this is somewhat responsible for the country’s higher ARPU. Rogers has been able to grow the demand for its data services among its subscribers, a trend which is depicted in the figure below. The data revenue generated by Rogers’ subscribers in the year 2008 stood at approximately USD 893 million. In 2008, the operator’s data revenue increased by nearly 39 percent over 2007, and 30 © 2009, Portio Research. All Rights Reserved
  • 31. Ranking The World’s Best Mobile Operators represented 16 percent of the network’s revenue, compared to 13 percent in 2007. This growth in revenue was due to increased uptake of services pertaining to mobile Internet. Data Revenue as a Percentage of ARPU (In Percent) Figure 15: Data Revenue as a Percentage of ARPU – Rogers Canada (In Percent, 2008) 20 17.5 14.4 15 11.2 10 5 0 2006 2007 2008 Year Source: Portio Research Ltd. The operator has targeted those subscribers which are more likely to use services such as voicemail, caller line ID, text messaging and other data services. Apart from the consumer segment, it has promoted its services among the enterprise segment by offering services such as mobile business solutions, corporate voice plans etc. Roll out of several Smartphones Rogers activated more than 1.2 million Smartphone devices in 2008. Approximately 57 percent of these activations were done for existing subscribers who upgraded their plans and signed multi-year contracts. These included both voice and data plans for most users thus enabling the operator to generate an above average ARPU. Furthermore, to better the experience of data services use for its subscribers, Rogers introduced higher speeds of 7.2 Mbps over its 3.5G networks. Smartphones accounted for 41 percent of device upgrades in 2008 for the operator, compared to 12 percent a year ago. The operator launched iPhone 3G in July 2008 and within six months had activated nearly 0.4 million devices. It introduced various voice and data plans specifically for iPhone 3G which offered data usage from 400 MB to 2 GB, and unlimited voice minutes in the evenings and at weekends. The table below highlights the importance of factors which enabled the operator to generate high ARPU. Factors Identified Rogers Canada Focus on postpaid subscribers Promotion of data services Roll out of Smartphones © 2009, Portio Research. All Rights Reserved 31 Rogers activated more than 1.2 million Smartphone devices in 2008. The operator launched iPhone 3G in July 2008 and within six months had activated nearly 0.4 million devices.
  • 32. Ranking The World’s Best Mobile Operators Chapter 3 Performance Measurement 2 – ARPU as a Percentage of Disposable Income 32 © 2009, Portio Research. All Rights Reserved
  • 33. Ranking The World’s Best Mobile Operators Performance Measurement 2 – ARPU as a Percentage of Disposable Income The revenue generated per subscriber by an MNO in a market depends on the disposable income of the users in the country and the operator’s ability to create revenue generating streams to cash-in on these opportunities. The more adaptive and pro-active operators are regarding the modeling of products, services, and pricing plans to suit local needs, the greater their chances to generate revenues. With the increasing maturity of developed as well as emerging markets in using voice as well as non-voice services, operators are offering products such as video calls, multimedia services, and information-related offerings. However, as far as judging an operator’s ability to tap market potential is concerned, ARPU is not a fair measure of an operator’s performance on a worldwide level. As ARPU alone may not accurately reflect an operator’s innovativeness to boost ARPU levels in a low income market, the ARPU as a percentage of disposable income may be a better permormence measure. Formula and Rationale The formula used for the calculation of this performance measurement is given below: Value = MNO ARPU (In USD) / Disposable Income per Person per Month (In USD) The figure below shows a scatter plot of a country’s monthly ARPU against ‘disposable income per head’ for the year 2008. Figure 16: Scatter Plot of Monthly ARPU vs. Monthly Disposable Income – Worldwide Markets (2008) 70 Monthly ARPU (In USD) 60 Japan 50 The US France The UK Israel 40 Australia 30 Venezuela South Africa Germany 20 10 India 0 0 Russia China 500 1000 1500 2000 2500 3000 3500 Disposable Income per head per month (In USD) Monthly ARPU Linear (Monthly ARPU ) Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 33
  • 34. Ranking The World’s Best Mobile Operators The figure above indicates that there is a strong correlation between the disposable income of a country and ARPU. However, we can see there are some markets showing above average performance (plots lying above the linear correlation line) both in high ARPU as well as low ARPU markets. Therefore, to keep track of how innovative an operator may be in these markets, we will instead use ARPU as a percentage of disposable income. Limitations: This performance measurement index may be a bit biased for emerging countries with low penetration. As the mobile services in these markets have been primarily taken up by the early adopters (or urban population) who are willing to pay a premium for the services, the ARPU might be on the high side compared to what it would have been if the penetration were higher. Also, African markets have lower wireline penetration and wireless is proving a more effective and cost effective mode of telecommunication. Therefore, wireless is growing swiftly in these markets and is grabbing a larger share of the available spending power. Rankings The figure below shows the Top 20 MNOs based on this performance measurement index. Figure 17: (2008) Top 20 MNOs Worldwide – ARPU as a Percentage of Disposable Income 5 Rank 1 to 10 Rank 11 to 20 1 Etisalat Misr Egypt, 6.2 Tunicell Tunisia, 6.2 Tunisiana Tunisia, 6.2 Asiacell Iraq, 6.2 Zain Iraq, 6.2 Vodafone Egypt, 6.4 Nextel Peru, 6.4 Nextel Argentina, 6.5 Zain Jordan, 6.7 MTN Sudan, 6.7 Nextel Brazil, 6.8 MTN Afghanistan, 6.4 2 GrameenPhone Bangladesh, 6.7 3 Maroc Telecom Morocco, 7.0 4 Zain Kenya, 7.5 5 Zain Nigeria, 7.8 Score 6 Safaricom Kenya, 8.3 7 Globacom Nigeria, 8.9 8 Zain Sudan, 9.2 9 MTN Nigeria, 10.0 10 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement index are given below. 5 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. 34 © 2009, Portio Research. All Rights Reserved
  • 35. Ranking The World’s Best Mobile Operators Table 8: MNOs Worldwide Ranked 1 to 20 – ARPU as a Percentage of Disposable Income (2008) Rank MNO Score Rank MNO Score 1 MTN Nigeria 10.00 11 2 Zain Sudan 9.19 12 GrameenPhone Bangladesh Nextel Argentina 3 Globacom Nigeria 8.92 13 Nextel Peru 6.42 4 Safaricom Kenya 8.31 14 MTN Afghanistan 6.38 5 Zain Nigeria 7.84 15 Vodafone Egypt 6.37 6 Zain Kenya 7.49 16 Zain Iraq 6.23 7 Maroc Telecom Morocco 7.04 17 Asiacell Iraq 6.23 8 Nextel Brazil 6.83 18 Tunisiana Tunisia 6.21 9 MTN Sudan 6.73 19 Tunicell Tunisia 6.21 10 Zain Jordan 6.72 20 Etisalat Misr Egypt 6.19 6.68 6.54 Table 9: MNOs Worldwide Ranked 21 to 50 – ARPU as a Percentage of Disposable Income (2008) Rank MNO Score Rank MNO Score 21 Meditel Morocco 6.18 36 Telenor Pakistan 5.74 22 MTN Syria 6.14 37 Djezzy Algeria 5.72 23 Etisalat The UAE 6.09 38 Mobilink Pakistan 5.72 24 Bharti Airtel India 6.07 39 Smart The Philippines 5.62 25 Banglalink Bangladesh 6.05 40 Sun The Philippines 5.59 26 MobiNil Egypt 6.02 41 Globe The Philippines 5.57 27 Vodafone India 6.00 42 TIM Brasil 5.53 28 Hutch Thailand 5.96 43 du The UAE 5.49 29 China Mobile 5.93 44 DiGi Malaysia 5.49 30 MTN South Africa 5.91 45 Maxis Malaysia 5.48 31 Cell C South Africa 5.85 46 Celcom Malaysia 5.48 32 Idea Cellular India 5.84 47 China Unicom 5.46 33 Telkomsel Indonesia 5.82 48 Vivo Brazil 5.45 34 Vodacom South Africa Reliance Communication India 5.80 49 Brasil Telecom 5.45 5.79 50 Excelcomindo Indonesia 5.44 35 © 2009, Portio Research. All Rights Reserved 35
  • 36. Ranking The World’s Best Mobile Operators Table 10: MNOs Worldwide Ranked 51 to 170 – ARPU as a Percentage of Disposable Income (2008) Rank MNO Rank MNO Rank MNO 51 91 Vodafone Hungary 131 T-Mobile Montenegro 92 3 The UK 132 Vodafone Spain 53 Movistar Colombia Telecom Personal Argentina DTAC Thailand 93 Pannon Hungary 133 Orange Austria 54 Nedjma Algeria 94 Claro Chile 134 Vodafone Portugal 55 Movistar Venezuela 95 T-Mobile Hungary 135 Polkomtel Poland 56 Movistar Argentina 96 Movistar Mexico 136 3 Austria 57 Tigo Colombia 97 Orange Slovakia 137 True Move Thailand 58 Comcel Colombia 98 Kyivstar Ukraine 138 Proximus Belgium 59 Claro Brazil 99 Pelephone Israel 139 Movistar Spain 60 Turkcell Turkey 100 KDDI Japan 140 SingTel Singapore 61 AIS Thailand 101 MegaFon Russia 141 Bell Mobility Canada 62 Mobily Saudi Arabia 102 NTT DOCOMO Japan 142 MTS Russia 63 SK Telecom South Korea 103 VimpelCom Russia 143 Globul Bulgaria 64 Digitel Venezuela 104 Telefonica Slovakia 144 SFR France 65 Telefonica Peru 105 Celtel DR Congo 145 Starhub Singapore 66 Entel PCS Chile 106 Tigo DR Congo 146 Telia Denmark 67 Claro Argentina 107 Vodacom DR Congo 147 KPN The Netherlands 68 Movistar Chile 108 MTN Iran 148 Vodafone Ireland 69 Iusacell Mexico 109 Vivatel Bulgaria 149 O2 Ireland 70 Claro Peru 110 Taiwan Mobile 150 TMN Portugal 71 Oi Brazil 111 Vodafone New Zealand 151 SoftBank Japan 72 Vodafone Czech Republic 112 FeT Taiwan 152 Vodafone Australia 73 Telcel Mexico 113 Beeline Ukraine 153 Optimus Portugal 74 Avea Turkey 114 Orange Poland 154 Orange The UK 75 Movilnet Venezuela 115 Velcom Belarus 155 Orange France 76 Promonte Montenegro 116 VIPnet Croatia 156 Cosmote Greece 77 117 T-Mobile Slovakia 157 Telenor Sweden 118 Rogers Canada 158 Mobistar Belgium 79 LG Telecom South Korea Partner Communications Israel Tele2 Croatia 119 MTS Ukraine 159 Orange Spain 80 TCI Iran 120 PTC Poland 160 Meteor Ireland 81 VIP Serbia 121 Chunghwa Taiwan 161 TDC Denmark 82 mt:s Serbia 122 162 Telstra Australia 83 Telenor Serbia 123 163 O2 The UK 84 KTF South Korea 124 Telus Mobility Canada Vodafone The Netherlands Bouygues France 164 Netcom Norway 85 T-Mobile Croatia 125 Sibir Telecom Russia 165 M1 Singapore 86 Mobiltel Bulgaria 126 BITE Lithuania 166 Elisa Finland 87 O2 Czech Republic 127 Tele2 Lithuania 167 Telenor Norway 88 Vodafone Turkey 128 Omnitel Lithuania 168 Telia Sonera Finland 89 Cellcom Israel 129 Vodafone Romania 169 T-Mobile The Netherlands 90 T-Mobile Czech Republic 130 MTS Belarus 170 3 Italia 52 78 36 © 2009, Portio Research. All Rights Reserved
  • 37. Ranking The World’s Best Mobile Operators Table 11: MNOs Worldwide Ranked 171 to 204 – ARPU as a Percentage of Disposable Income (2008) Rank MNO Rank MNO Rank MNO 171 Sprint The US 183 195 172 Verizon The US 184 173 Vodafone Greece 185 T-Mobile The UK Telecom Mobile New Zealand SmarTone Hong Kong 197 PCCW Mobile Hong Kong CSL New World Mobility Hong Kong life:) Ukraine 174 Vodafone The UK 186 Sunrise Switzerland 198 Tele2 Sweden 175 Orange Switzerland 187 T-Mobile Austria 199 O2 Germany 176 Sonofon Denmark 188 Wind Hellas Greece 200 Vodafone Germany 177 DNA Finland 189 3 Sweden 201 Base Belgium 178 Optus Australia 190 Vodafone Italy 202 HTIL Hong Kong 179 Tele2 Russia 191 Swisscom Switzerland 203 E-Plus Germany 180 AT&T The US 192 Telia Sonera Sweden 204 T-Mobile Germany 181 T-Mobile The US 193 Telecom Italia 182 Mobilkom Austria 194 Wind Italy 196 The figure below shows the Top 3 MNOs judged on this performance measurement. Figure 18: Top 3 MNOs Worldwide – ARPU as a Percentage of Disposable Income (2008) MTN Nigeria 1 Zain Sudan 2 3 Globacom Nigeria Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 37
  • 38. Ranking The World’s Best Mobile Operators MNO Strategies MTN Nigeria Ownership: MTN Group (76.1 percent) Launched: 2001 st Subscriber Base: 23.1 million (31 December 2008) ARPU (estimated): USD 16.5 (Monthly, 2008) Disposable Income per Person per Month: USD 30.3 (2008) st Market Share: 37.8 percent (31 December 2008) st Nigeria Mobile Penetration: 42.6 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Nigeria • Nigeria is witnessing a stupendous growth in its mobile subscriber base and is one of the leading mobile markets in the Middle East and African region. • The market experienced tremendous growth during 2006-2008 – with the subscriber base growing at a CAGR (Compound Annual Growth Rate) of 50.5 percent. Figure 19: Subscriber Base and Penetration – Nigeria (2006-2008) 50 43.1 60 40 50 40 26.2 23.5 63.0 30 20 10 30 20 Penetration (In Percent) Subscriber Base (In Million) 70 38.3 10 27.8 0 0 2006 2007 2008 Year Subscriber Base Penetration Source: Portio Research Ltd. • • Power infrastructure expansions in Nigeria have been inadequate to cope with the subscriber growth and required network capacity expansion to support the desired Quality of Service (QoS). • Provision of Unified Access Service licenses – which allow subscribers to roam outside the immediate service area of their operator – has lowered the entry-level barrier for entering operators and therefore intensified competition. • 38 Focus of the Nigerian operators is on low income consumers and per second billing is prevalent. The rising concern of the Nigerian regulatory body regarding sub-standard QoS among Nigerian MNOs led to its intervention in 2007. The regulatory body put a ban on the promotional campaigns run by the MNOs till it was convinced that the required level of quality had been reached. The factors which hampered QoS in the country are explained in the figure below. © 2009, Portio Research. All Rights Reserved
  • 39. Ranking The World’s Best Mobile Operators Figure 20: Factors Hampering Quality of Service in Nigeria Explosive Subscriber Growth Intensifying Competition and Reduction in Tariffs Network Congestion and Regulatory Interference  Nigeria experienced extra-ordinary growth after 2001 as a result of network expansion by the MNOs  It became a leading market in Africa in subscriber-terms  With MTN Nigeria and Meditel looking to increase their share of subscriber additions, tariffs were slashed to attract more subscribers  This resulted in high voice and data traffic which challenged the network capacity.  Heavily burdened operator networks saw a significant drop in quality of service; this situation forced regulatory bodies to intervene  During 2007, the regulatory body started strict monitoring of MNO’s QoS and instructed them to maintain desired levels of quality. Source: Portio Research Ltd. MTN’s Strategies • Overcoming challenges related to Quality of Service (QoS): MTN Nigeria overcame the challenge of providing high quality service – while achieving high rates of subscriber growth – by making huge network investments. Failure in ensuring QoS and the ensuing high rate of dropped calls and data service failures would have resulted in a huge opportunity cost. The main steps taken for ensuring high QoS are given below:  Aggressive capital investment program to expand network capacity, including new site construction and upgrades of existing sites  Launch of 3.5G network to increase voice capacity  Increase in network resilience through the addition of redundancy rings and the introduction of new technologies such as ASON (Automatically Switched Optical Network)  MTN’s digital microwave transmission, the 3,400km Y’elloBahn – the most extensive digital microwave transmission infrastructure in Africa – helped significantly in enhancing call quality on MTN’s network. • Differentiated offerings – ‘One Network’: MTN Nigeria provides its subscribers with connectivity to the group's 'One Network', allowing seamless roaming for MTN subscribers in Cameroon, Benin and Ghana.  ‘One Network’ enables the subscribers to recharge their prepaid accounts while traveling in the participating countries by buying vouchers in these countries. Subscribers are charged local rates in the country they are calling from and there are no charges for receiving calls.  The success of this service prompted the operator to expand it across all 21 MTN operations in the Middle East and African region in the first quarter of 2009. • Popularising non-voice services: The operator offers services such as ring back tones to create demand for data services and counter declining ARPU. MTN Nigeria was the first Nigerian operator to launch 3G products in 2006. It looks to leverage © 2009, Portio Research. All Rights Reserved 39
  • 40. Ranking The World’s Best Mobile Operators high speed networks to create more opportunities for revenue generation by pushing data services targeted at enterprise users. The following table shows the strategies that led to the success of the operator. Factors Identified MTN Nigeria Overcoming QoS challenges MTN’s One network Popularising non-voice services 40 © 2009, Portio Research. All Rights Reserved
  • 41. Ranking The World’s Best Mobile Operators Zain Sudan Ownership: Zain Group (61.0 percent), Celtel International (Zain Group’s subsidiary, 39 percent) Launched: 1997 st Subscriber Base: 5.2 million (31 December 2008) ARPU: USD 16 (Monthly, 2008) Disposable Income per Person per Month: USD 36.1 (2008) st Market Share: 48.8 percent (31 December 2008) st Sudan Mobile Penetration: 27.0 percent (31 December 2008) Technology: GSM and EDGE Market Environment – Sudan • Handset prices are a major barrier to increasing mobile penetration • During the period 2005-2008, the price of acquiring a SIM has been slashed from 6 over USD 50 to approximately USD 1.5 • Low ARPU market with about four-fifths of the subscriber base using entry-level handsets • Increasing competition between Zain Sudan, MTN Sudan, and Sudatel Telecom (CDMA) • Low penetration level (24.0 percent) presents latent growth opportunity for operators. • Young demographics, with approximately 21 percent in the 15-25 years age group. Figure 21: Demographic Break-out – Sudan (End-2008) 7 20.9% 28.6% 41.1% 0.5% Below 15 years 15-24 years 25-49 years 8.8% 50-74 years Above 74 years Source: CIA – The World Factbook 8 6 Source: http://www.arabianbusiness.com/544237-connecting-sudan Please note: The figures may not add up to 100 percent because of rounding-off errors. 8 Source: https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html 7 © 2009, Portio Research. All Rights Reserved 41
  • 42. Ranking The World’s Best Mobile Operators • With the civil disturbance under control in Darfur (in southern Sudan), and the Government of Southern Sudan, in late 2007, allowing Zain and MTN to expand their mobile services there, the country may witness swift growth in subscribers in the next couple of years. Zain’s Strategies • Encouraging high usage among prepaid subscribers: Sudan is primarily a prepaid market with both major operators Zain and MTN having above 95 percent prepaid subscribers as of year-end 2008. Zain – in addition to drawing subscribers to postpaid plans – is trying to attract prepaid subscribers towards high usage and to reward loyalty through a number of appealing prepaid plans. The operator provides low call rates during off-peak hours and also offers low charge rates for communication within a chosen community. • Targeting youth segment: Zain Sudan targets the youth segment, primarily university students, through dedicated packages such as ‘Lamatna’. The service provides the facility of ‘community charging’ to students. The service also provides discounts for calling and texting within a community, with an added feature of bonus SMS and voice minutes. The service became popular among the targeted group and 9 attracted 0.1 million subscribers within the first two months of launch in mid-2008. • Using music services for driving ARPU: Zain has been successful in creating mass interest for music-based services. Ring Back Tone (RBT) has emerged as a killer application in this low ARPU market. RBT garnered 0.6 million users in two months of launch in the second half of 2008. By end-2008, the service was being 10 used by more than half of the subscribers of Zain Sudan. The operator has also added more value to the service by introducing options such as karaoke. • Bringing down the entry barriers: The re-branding of Mobitel to Zain in September 2007 was accompanied by a reduction in service pricing by about 6-7 percent, provision of rewards and step-charging. The operator also launched ultralow cost handsets to lower the entry barrier. • Encouraging inter-state calls while roaming: Zain Group has provided a ‘One Network’ service across 16 countries in the Middle East and African region since April 2009. The service enables travellers to use their local SIM card to make calls 11 at local rates and receive incoming calls at USD 0.22/minute (50 piasters/minute). It also facilitates recharges using local airtime cards while using their home network service functionality. Factors Identified Zain Sudan Encouraging high usage among prepaid subscribers Targeting youth segment Pushing music services Bringing down entry-barriers Zain’s One Network offering 9 ‘Source: http://comm.ae/2009/01/21/feeling-the-squeeze/ Source: http://comm.ae/2009/01/21/feeling-the-squeeze/ 11 Source: http://www.sd.zain.com/autoforms/portal/home 10 42 © 2009, Portio Research. All Rights Reserved Sudan is primarily a prepaid market with both major operators Zain and MTN having above 95 percent prepaid subscribers as of year-end 2008.
  • 43. Ranking The World’s Best Mobile Operators Maroc Telecom Morocco Ownership: Vivendi Universal (53.0 percent), the Kingdom of Morocco (30 percent) Launched: 1994 st Subscriber Base: 14.5 million (31 December 2008) ARPU (estimated): USD 12.9 (Monthly, 2008) Disposable Income per Person per Month: USD 56.9 (2008) st Market Share: 32.6 percent (31 December 2008) st Morocco Mobile Penetration: 64.8 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Morocco • Morocco is predominantly a prepaid market with prepaid subscribers forming approximately 95.5 percent of its subscriber base. • Maroc Telecom and Medi Telecom are the two major operators in the market; Maroc Telecom had approximately 65.0 percent market share as of end-2008. • Despite subscriber additions primarily coming from the low income segments, ARPU has been steady. Figure 22: Subscriber Base and Monthly ARPU – Morocco (2006-2008) 11.7 Subscriber Base (In Million) 11.1 12 10 20 8 15 10 20.0 22.3 6 4 15.9 5 Monthly ARPU (In USD) 11.9 25 2 0 0 2006 2007 2008 Year Subscriber Base Monthly ARPU Source: Portio Research Ltd. • Major MNOs launched 3.5G networks in mid-2007 – with a full launch in major towns/cities following in mid-2008; the Moroccan market is showing encouraging signs for the uptake of data services. • Operators are pushing the utilisation of 3.5G networks forward by offering unlimited voice and data offerings. Maroc Telecom’s Strategies • Attracting users for new offerings: Maroc Telecom has lowered the access fee and basic plans to swiftly penetrate the low income groups. With penetration passing 60 percent in 2008, this strategy is intended to lower the entry level barriers. This move encourages subscribers to sample new services at attractive prices, and therefore gives the operator more chance of selling new products. © 2009, Portio Research. All Rights Reserved 43
  • 44. Ranking The World’s Best Mobile Operators • Increasing ARPU – Complimenting voice services with data services:  International MMS and personalised ringtones: Maroc Telecom launched International MMS and personalised ringtones in 2007. The move was intended to encourage the youth segment to adopt data services.  Leveraging high-speed networks for launching value-added offerings: Maroc Telecom launched 3.5G mobile Internet services in June 2007, and has since launched more services based on its high-speed networks to push voice and data revenues. 3.5G networks have improved the efficiency of the networks in providing voice services. Also, for increasing the popularity of new product offerings based on 3.5G networks, the operator enables 3.5G handset users to make video phone calls at the same perminute rate as voice-only calls; and to browse the company's Mobile Zone portal and download videos, music, games and ringtones at faster rates (up to 3.6Mbps),as well as to access high speed Internet services. Figure 23: Utilisation of 3.5G Networks by Maroc Telecom (June 2007- February 2008) Pushing voice & data services Jun 2007: Launch of '3G+ Mobile Internet' for postpaid subscribers Jan 2008: Full launch of 3.5G voice/data services (with more than 400 base stations) for prepaid and postpaid subscribers under '3G+' brand Feb 2008: Launch of two high speed, unlimited access mobile Internet packages Source: Portio Research Ltd.  The launch of a 3.5G network provides an opportunity for Vivendi, a major stakeholder in the firm, to push its music and video games content. Unlimited voice and data offerings: The operator intends to increase the appetite of Moroccan subscribers for mobile services through unlimited access plans. This will help the MNO to promote its advanced data services in the near future. Factors Identified Maroc Telecom Morocco Attracting users for new offerings High-speed networks Unlimited voice and data offerings 44 © 2009, Portio Research. All Rights Reserved
  • 45. Ranking The World’s Best Mobile Operators Safaricom Kenya Ownership: Kenyan Government (35 percent) and Vodafone Kenya (40 percent) Launched: 1996 st Subscriber Base: 12.8 million (31 December 2008) ARPU (estimated): USD 7.9 (Monthly, 2008) Disposable Income per Person per Month: USD 21.8 (2008) st Market Share: 81.0 percent (31 December 2008) st Kenya Mobile Penetration: 40.9 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Kenya: • Growing competition from Celtel and Orange Kenya • High percentage of population is rural • Predominantly prepaid market • Requirement of high CAPEX (capital expenditure) for expanding coverage The figure below shows the subscriber base of the major MNOs in Kenya. Figure 24: MNOs’ Subscriber Base – Kenya (In Million, End-2008) Subscriber Base (In Million) 14 12.8 12 10 8 6 4 3.1 2 0 Celtel Safaricom Operator Source: Portio Research Ltd. Safaricom’s Strategies Safaricom is Kenya’s biggest wireless operator with over 80 percent market share (at end2008). The operator has developed its product portfolio to suit the market conditions and requirements. Furthermore, it has flooded the wireless market with advanced and innovative services and has been able to generate higher demand for data services among its subscribers. It is also the only Kenyan operator with 3G networks. Although the majority of Kenya’s subscribers belong to low income groups, Safaricom has succeeded in popularising its services and generating fairly high ARPU, with the help of strategies mentioned in the figure below. © 2009, Portio Research. All Rights Reserved 45
  • 46. Ranking The World’s Best Mobile Operators Figure 25: Safaricom’s Strategies Safaricom’s Strategies Targeted Marketing Innovative Services Aggressive Data Promotion Ample Recharging Channels Source: Portio Research Ltd. Targeted Marketing Safaricom has very cleverly positioned its services in the Kenyan market with clear target segments for each service. The three major aspects of this strategy are: • High value services • Variable tariffs • Low income group focus The figure below briefly explains this strategy. Figure 26: Safaricom’s Targeted Marketing Strategy High Value Services • Services for enterprise segment such as Bulk SMS • Services for high value subscribers such as those available on Safaricom Live and premium rate services Targeted Marketing Variable Tariffs • Various tariff plans launched to suit users with varied usage needs • Jimbabie offers call rates from USD 0.06 to USD 0.1 • Super Taifa Tariff offers flat rates Low Income Focus • Bamba 20, lowest denominated top up card introduced • Call pulse changed to per second billing • Simu Ya Jamii –a community service– for users who cannot afford handsets Source: Portio Research Ltd. 46 © 2009, Portio Research. All Rights Reserved
  • 47. Ranking The World’s Best Mobile Operators Innovative Services Safaricom is reknowned for the innovative services it has launched in the Kenyan market. Some of these services are highlighted below: • M-PESA: This is an award winning mobile banking service and Kenyans were the th first to avail this service. As of 30 September 2008, there were 4.1 million users of 12 this service, registering a 550 percent year-on-year growth. • SMS2Email: This allows a user to send an SMS from a mobile handset to a PC. • tXt: A mobile chat service that enables a subscriber to send an SMS simultaneously to multiple users. • Get it 411: This allows users to get information, such as news, sports, traffic, horoscope etc., through SMS. • Flashback 130: This is a service which users avail to be called back, by sending a message. Aggressive Data Promotion Safaricom has recently begun aggressively promoting data services, and the deployment and expansion of its 3G network is playing its part in boosting the service experience for these services. The data services offered by the MNO include BlackBerry solutions, mobile TV, and Safaricom E-mail. Safaricom is the largest mobile data and Internet services provider in the country and is witnessing a steady growth of its 3G users. As of 30th September 2008, there were 4.1 million users of M-PESA, registering a 550 percent year-on-year growth. Ample Recharging Channels The operator has created adequate channels for its prepaid users to recharge their accounts anywhere and at anytime, thus providing them with unrestricted opportunities to use its services. The various prepaid recharge options are: • Bamba20 • Scratch Cards/Vouchers • Virtual Airtime • ATM Top-Up • Ongea 24/7 • Sambaza • Paymate 150 • Indirect Top Up Method The table below highlights the factors and their importance, responsible for high ARPU generation by the operator. Factors Identified Safaricom Kenya Targeted marketing Innovative services Aggressive data promotion Ample recharging channels 12 Source: Company Reports © 2009, Portio Research. All Rights Reserved 47
  • 48. Ranking The World’s Best Mobile Operators Chapter 4 Performance Measurement 3 – Revenue Growth of the MNO 48 © 2009, Portio Research. All Rights Reserved
  • 49. Ranking The World’s Best Mobile Operators Performance Measurement 3 – Revenue Growth of the MNO Revenue growth is an important performance measurement to assess the efforts of an MNO in improving its performance. With falling prices – owing to competition and focus on subscriber acquisition – in many of the markets, MNOs face the challenge of increasing revenues through subscriber addition and by creating more revenue generating streams. Limitation When we calculate the revenue growth of an operator for a year, there is a distinct bias in the favour of MNOs which are operating in emerging markets with high subscriber growth, or who are in their first few years of operation. Revenue growth can also be boosted by the GDP growth of a market – high GDP growth increases the living standard of people and creates more avenues for operators to push their services. Therefore, in order to normalise the measurement of revenue growth, we have to take into account the GDP growth and mobile penetration of the country. Formula and Rationale The formula used for the calculation of this performance measurement index is given below: Value = (Revenue Growth of MNO - GDP Growth of Country)*Mobile Penetration of the Country The formula is intended to measure revenue growth against GDP growth to reward the players who are performing despite GDP growth showing a downtrend or stagnation. Mobile penetration has been used as a multiplying factor to give more weight to the matured markets, as low penetration markets have a natural tendency to show high revenue growth through high subscriber additions. A look at the top 10 highest revenue generating MNOs and their revenue growth during 2008 helps put into perspective the performance of MNOs. The figure below depicts the total revenue and revenue growth of the top 10 MNOs worldwide. © 2009, Portio Research. All Rights Reserved 49
  • 50. Ranking The World’s Best Mobile Operators Figure 27: Top 10 MNOs Worldwide – Total Revenue & Revenue Growth (2008) 70 25 20 60 14.1 15.6 50 14.0 15.1 15 9.8 12.4 10 40 30 6.0 5 57.5 49.3 49.3 20 0 43.9 -5 30.4 27.2 22.0 10 -12.3 15.8 15.2 -10 Revenue Growth (In Percent) Revenue (In USD Billion) 22.3 -15 0 China Mobile AT&T The US Verizon NTT Sprint The US DoCoMo The US Japan KDDI Japan T-Mobile Orange SoftBank The US France Japan Operator Revenue Revenue Growth Source: Portio Research Ltd. MNOs generating the highest mobile revenues during 2008 are primarily from the developed markets such as the US, Japan and Western European geography, with the notable exception of China. However, these MNOs have not figured very high in the ranking table using this performance measurement, mainly because of the following reasons: • Some of the emerging markets have very high subscriber growth while holding off the decline in ARPU through the introduction of value added products and services. • MNOs in developed markets have felt the pinch of economic slowdown in pushing their services. 50 © 2009, Portio Research. All Rights Reserved
  • 51. Ranking The World’s Best Mobile Operators Rankings The figure below shows the Top 20 MNOs based on this performance measurement. Figure 28: Top 20 MNOs Worldwide – Revenue Growth of the MNO (2008) 13 Rank 1 to 10 Rank 11 to 20 DNA Finland, 7.2 Vodafone Ireland, 7.2 SingTel Singapore, 7.2 Cosmote Greece, 7.3 Orange Poland, 7.4 Meteor Ireland, 7.5 Asiacell Iraq, 7.6 MTS Russia, 7.6 mt:s Serbia, 7.8 FeT Taiwan, 7.9 Maxis Malaysia, 7.9 Oi Brazil, 8.3 2 Vodafone Czech Republic, 7.6 3 Tele2 Lithuania, 8.0 4 Digitel Venezuela, 8.1 5 T-Mobile The Netherlands, 8.6 Score 6 Zain Iraq, 9.3 7 BITE Lithuania, 9.3 8 Tele2 Croatia, 10.0 9 life:) Ukraine, 10.0 10 1 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement index are given below. Table 12: MNOs Worldwide Ranked 1 to 20 – Revenue Growth of the MNO (2008) Rank MNO Score Rank MNO Score 1 life:) Ukraine 10.00 11 7.81 2 Tele2 Croatia 9.99 12 3 BITE Lithuania 9.31 13 mt:s Serbia Vodafone Czech Republic MTS Russia 4 Zain Iraq 9.27 14 Asiacell Iraq 7.57 5 T-Mobile The Netherlands 8.64 15 Meteor Ireland 7.46 6 Oi Brazil 8.29 16 Orange Poland 7.43 7 Digitel Venezuela 8.13 17 Cosmote Greece 7.29 8 Tele2 Lithuania 8.02 18 SingTel Singapore 7.25 9 Maxis Malaysia 7.91 19 Vodafone Ireland 7.25 10 FeT Taiwan 7.89 20 DNA Finland 7.24 7.61 7.59 13 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 51
  • 52. Ranking The World’s Best Mobile Operators Table 13: MNOs Worldwide Ranked 21 to 50 – Revenue Growth of the MNO (2008) Rank Score Rank 21 Vivo Brazil 7.23 22 T-Mobile Czech Republic 7.23 23 Tunisiana Tunisia 24 MegaFon Russia 25 MNO Score 36 Globul Bulgaria 6.99 37 Pelephone Israel 6.98 7.22 38 PCCW Mobile Hong Kong 6.98 7.21 39 Excelcomindo Indonesia 6.96 Cell C South Africa 7.21 40 Tigo DR Congo 6.96 26 Nedjma Algeria 7.20 41 Orange Slovakia 6.95 27 Vodafone India 7.18 42 Etisalat The UAE 6.93 28 Wind Italy 7.17 43 Optimus Portugal 6.91 29 Cellcom Israel 7.17 44 Polkomtel Poland 6.90 30 VimpelCom Russia 7.13 45 Movistar Chile 6.89 31 Avea Turkey 7.10 46 Vodafone The Netherlands 6.89 32 PTC Poland 7.06 47 Vodafone Portugal 6.88 33 Movistar Argentina 7.03 48 TMN Portugal 6.86 34 E-Plus Germany 7.00 49 Claro Argentina 6.83 35 52 MNO Telia Denmark 7.00 50 Kyivstar Ukraine 6.82 © 2009, Portio Research. All Rights Reserved
  • 53. Ranking The World’s Best Mobile Operators Table 14: MNOs Worldwide Ranked 51 to 170 – Revenue Growth of the MNO (2008) Rank MNO Rank MNO Rank 51 T-Mobile Croatia 91 Movistar Venezuela 131 Vodafone Egypt 52 Movistar Mexico 92 MTN Iran 132 Swisscom Switzerland 53 Vodafone Italy 93 MTN Afghanistan 133 MTN Nigeria 54 Omnitel Lithuania 94 du The UAE 134 China Mobile 55 Claro Brazil 95 Etisalat Misr Egypt 135 Telus Mobility Canada 56 Mobily Saudi Arabia 96 VIP Serbia 136 Brasil Telecom 57 T-Mobile Slovakia 97 Tigo Colombia 137 Idea Cellular India 58 Base Belgium 98 3 Sweden 138 NTT DOCOMO Japan 59 Taiwan Mobile 99 Tele2 Russia 139 Vodafone Spain 60 Telenor Serbia 100 Beeline Ukraine 140 KPN The Netherlands 61 101 Nextel Peru 141 Bell Mobility Canada 102 Sibir Telecom Russia 142 Proximus Belgium 63 Sonofon Denmark Telecom Personal Argentina Telia Sonera Sweden 103 Nextel Argentina 143 64 Bouygues France 104 Hutch Thailand 144 65 Orange Spain Partner Communications Israel TCI Iran 105 Nextel Brazil 145 TIM Brasil Reliance Communication India Vodafone Romania 106 Verizon The US 146 Telenor Sweden 107 Safaricom Kenya 147 MTN Syria 68 AT&T The US 108 Bharti Airtel India 148 Vodafone Germany 69 Orange France 109 Tunicell Tunisia 149 T-Mobile Germany 70 Starhub Singapore 110 VIPnet Croatia 150 Sunrise Switzerland 71 KDDI Japan 111 Telenor Pakistan 151 Entel PCS Chile 72 T-Mobile Montenegro 112 Vodafone Australia 152 DTAC Thailand 73 Tele2 Sweden 113 SoftBank Japan 153 Orange The UK 74 Banglalink Bangladesh 114 Movilnet Venezuela 154 Meditel Morocco 75 Globacom Nigeria 115 Celcom Malaysia 155 Telcel Mexico 76 Optus Australia 116 Mobiltel Bulgaria 156 Vodafone Turkey 77 Zain Nigeria 117 O2 Ireland 157 Chunghwa Taiwan 78 Vivatel Bulgaria 118 Comcel Colombia 158 Celtel DR Congo 79 T-Mobile The US 119 Mobilkom Austria 159 Vodafone Hungary 80 Claro Peru 120 Telia Sonera Finland 160 TDC Denmark 81 Djezzy Algeria 121 T-Mobile Hungary 161 O2 The UK 82 SFR France 122 Movistar Spain 162 Velcom Belarus 83 O2 Czech Republic 123 Pannon Hungary 163 3 Austria 84 Rogers Canada 124 Turkcell Turkey 164 Sun The Philippines 85 Orange Switzerland 125 Smart The Philippines 165 Orange Austria 86 DiGi Malaysia 126 MTS Ukraine 166 Telenor Norway 87 O2 Germany 127 Telecom Italia 167 88 Telstra Australia 128 M1 Singapore 168 89 MobiNil Egypt 129 Netcom Norway 169 Wind Hellas Greece GrameenPhone Bangladesh Vodacom DR Congo 90 Telefonica Peru 130 Mobistar Belgium 170 AIS Thailand 62 66 67 © 2009, Portio Research. All Rights Reserved MNO 53
  • 54. Ranking The World’s Best Mobile Operators Table 15: MNOs Worldwide Ranked 171 to 204 – Revenue Growth of the MNO (2008) Rank MNO Rank MNO Rank MNO 171 Promonte Montenegro 183 Vodafone New Zealand 195 Vodafone Greece 172 Zain Sudan 184 MTN South Africa 196 Zain Kenya 173 MTS Belarus 185 HTIL Hong Kong 197 True Move Thailand 174 Elisa Finland 186 Telefonica Slovakia 198 Globe The Philippines 175 Claro Chile 187 MTN Sudan 199 Sprint The US 176 188 KTF South Korea 200 China Unicom 189 T-Mobile Austria 201 LG Telecom South Korea 178 Vodacom South Africa Telecom Mobile New Zealand 3 Italia 190 Mobilink Pakistan 202 T-Mobile The UK 179 Maroc Telecom Morocco 191 Telkomsel Indonesia 203 180 Iusacell Mexico 192 SmarTone Hong Kong 204 SK Telecom South Korea CSL New World Mobility Hong Kong 181 Movistar Colombia 193 Vodafone The UK 182 Zain Jordan 194 3 The UK 177 The figure below shows the Top 3 MNOs judged on this performance measurement index. Figure 29: Top 3 MNOs Worldwide – Revenue Growth of the MNO (2008) life:) Ukraine 1 Tele2 Croatia 2 3 BITE Lithuania Source: Portio Research Ltd. 54 © 2009, Portio Research. All Rights Reserved
  • 55. Ranking The World’s Best Mobile Operators MNO Strategies life:) Ukraine Ownership: Turkcell (54.2 percent) and Ukrainian SCM Holdings (45.8 percent) Launched: 1998 st Subscriber Base: 11.2 million (31 December 2008) Total Revenue Growth: 27.3 percent (2007 to 2008) GDP Growth: 2.1 percent (2007 to 2008) st Ukraine Mobile Penetration: 120.5 percent (31 December 2008) Technology: GSM and EDGE Market Environment – Ukraine: • The nominal penetration of Ukraine’s mobile market is more than 100 percent; however, the actual figure hovers around the 60-70 percent mark as this market is 14 host to multiple SIM-cards, which account for an additional 30 percent. • NGN (Next Generation Network) technologies are being deployed with the aim of modernizing fixed-line networks and offering convergence services • MNOs are increasingly focusing on network expansion and enhancing broadband services. • Fiercely competitive market with three leading players – Kyivstar, MTS, and life:) fighting for market share. • Broadband witnessing sluggish growth due to the country’s underdeveloped Internet sector. The figure below shows the developments in the market share of Ukrainian MNOs during 2006-2008. Figure 30: MNOs’ Market Share – Ukraine (In Percent, 2006-2008) 15 Market Share (In Percent) 120 3.8 3.6 4.6 11.4 16.2 20.2 40.8 36.8 32.7 43.9 43.4 42.5 2006 2007 2008 100 80 60 40 20 0 Year Beeline life:) MTS Kyivstar Source: Portio Research Ltd. The figure below shows the total revenues generated by Ukrainian MNOs during 2006-2008. 14 15 Source: http://www.life.com.ua/getfile.php?lng=en&id=256&name=en_28092007.pdf Please note: Figures may not add up to 100 percent because of rounding off errors. © 2009, Portio Research. All Rights Reserved 55
  • 56. Ranking The World’s Best Mobile Operators Figure 31: MNOs’ Total Revenue – Ukraine (In USD Million, 2006-2008) Total Revenue (In USD Million) 3000 2,466.2 2500 2000 1500 2,138.0 1,701.7 1,490.0 1,740.0 1,608.0 1000 500 440.0 200.4 260.0 111.6 88.0 44.3 0 2006 2007 2008 Year Kyivstar MTS life:) Beeline Source: Portio Research Ltd. life:)’s Strategies Figure 32: life:)’s Success Strategies life:)’s Success Strategies Network Coverage Brand Perception Innovative Products EDGE Technology Subscriber Centricity Range of Services Source: Portio Research Ltd. Initially, starting as the fifth operator in the wireless market of Ukraine, life:) became the third largest GSM operator within a year of launch. It is also the leading MNO in terms of new subscriber acquisitions and covered almost 93.7 percent of the country’s population by end16 September 2008. life:) has been able to accomplish various milestones in terms of network roll-out, growth in revenue and subscriber base, and expansion of its sales network, as a result of the following strategies incorporated by the operator: • • 16 Brand Perception – life:) has implemented certain specific branding changes in order to develop better connections with its subscribers. The logo has been transformed to “everything is possible” from the earlier motto of “life is getting interested”. The MNO believes that the new style and happy smiley will infuse subscribers with optimism and help them in believe in the future. Network Coverage Enhancement – Despite the economic turmoil, the investment plans of the operator have not been dampened. In 2008, it focussed on strengthening its network, and it intends to enhance the quality and coverage of its Source: http://www.life.com.ua/getfile.php?lng=en&id=379&name=en_23122008.pdf 56 © 2009, Portio Research. All Rights Reserved
  • 57. Ranking The World’s Best Mobile Operators 17 • • network in 2009. life:) increased its coverage by 8.6 percent last year. Some of the operator’s implemented and planned steps include the following: • Partnership with Huawei: life:)’s agreement with Huawei is seen as an integral step in its continuing commitment to network enhancement. 3,000 3G compatible base stations will be installed by Huawei, with the initial phase starting in the Western Ukraine and Crimea region. The partnership is expected to assist the operator for future 3G operations. The operator plans to invest nearly USD 200 million in 2009 to increase its network 18 capacity. EDGE technology was pioneered by life:) in the Ukraine market. The operator has been able to offer extensive EDGE coverage, with 66.1 percent of the sites supporting it. It plans to expand its coverage to an additional 20 cities, adding to the 119 cities it already serves. This would definitely aid the operator in offering innovative communication services. Innovative Products – life:) entered the Ukrainian market in 2005 with Kyivstar and MTS already having a strong foothold. In order to mark its presence, the operator pioneered a range of innovative products/services. life:) has been able to offer more than 150 value added services within three and a half years of its entrance into the Ukraine market. Some of these include: • Advanced Video MMS – Sending video MMS to non video phones • life:) SIM menu – Advanced applications such as myInfo, easy refill, etc. • USSD End of Event notification – SMS/MMS notification about balance status • SuperPassword – Access to all life:) services • Missed Call Notification Service • Balance Transfer Service • MeloRing, Voice SMS, Push-to-Talk, Mobile TV, etc. • Free life:) – Package with no charge for communication within the network Figure 33: life:)’s Innovative Products life:) SIM Menu USSD End of Event Notification Advanced Video MMS Free life:) life:) Innovative Product Portfolio Push-ToTalk Mobile TV MeloRing Balance Transfer Missed Call Notification Service Source: Portio Research Ltd. 17 18 Source: http://www.life.com.ua/getfile.php?lng=en&id=394&name=en_31032009(2).pdf Source: http://www.life.com.ua/getfile.php?lng=en&id=393&name=en_31032009.pdf © 2009, Portio Research. All Rights Reserved 57 life:) plans to invest nearly USD 200 million in 2009 to increase its network capacity.
  • 58. Ranking The World’s Best Mobile Operators • Range of Services – One of the main reasons for life:)’s success in the Ukraine market can be attributed to various package solutions, promotional offers and attractive prices. Some of the most interesting packages include the following: • Whirlwind of Opportunities – Laptop and Mobile Internet • Promotional Offer ‘Two Zeros’ – Free calls within the life:) network as well as to other networks • ‘Roaming life:)’ – Roaming calls to any number at just USD 0.4/min (UAH 2/min) • life:) bonus – Loyalty programme giving subscribers a lot of advantages • ‘life:) Thousand’ – For a monthly fee of just USD 1.9 (UAH 10), subscribers can send 1,000 SMS every 30 days. • ‘life:) Territory’ – Online portal for sharing, communicating and storing content • ‘Easy Change’: Subscribers who switched from other operators can avail this service and keep themselves informed about the calls made on the old number through an SMS. Figure 34: life:)’s Range of Services Roaming life:) Two Zeros Easy Change life:) Territory life:) Range of Services life:) Bonus life:) Thousand Source: Portio Research Ltd. • Subscriber Centric – The operator focused on providing its users with high quality services and keeping them updated about their latest offering. Some of the measures taken in this direction include: • 458 exclusive life:) shops and customer service centres have been opened in 178 cities • Subscribers have the option of ordering life:) services via 34,600 nonexclusive shops • Two call centres are available 24/7, providing services in three languages (Ukrainian, Russian and English). The following table lists the key factors that have led to the proliferation of the operator: 58 © 2009, Portio Research. All Rights Reserved
  • 59. Ranking The World’s Best Mobile Operators Factors Identified life:) Ukraine Brand Perception Network Coverage Innovative Products Range of Service Subscriber Centricity © 2009, Portio Research. All Rights Reserved 59
  • 60. Ranking The World’s Best Mobile Operators BITE Lithuania Ownership: Mid Europa Capital Partners Launched: 1995 st Subscriber Base: 1.7 million (31 December 2008) Total Revenue Growth: 50.0 percent (2007 to 2008) GDP Growth: 3.2 percent (2007 to 2008) st Lithuania Mobile Penetration: 142.5 percent (31 December 2008) Technology: GSM and WCDMA (HSDPA) Market Environment – Lithuania: • Small but highly competitive market with the presence of three established players (Omnitel, Tele2, and BITE) • Leader in terms of mobile penetration among the Baltic States, resulting from the extremely high SIM card penetration • Mobile broadband is making rapid strides, with operators taking full advantage of the investments in 3G and HSDPA networks • Internet market pretty well developed with broadband accounting for 90 percent of connections The figure below shows the total revenues generated by Lithuanian MNOs during 20072008. Figure 35: MNOs’ Total Revenues – Lithuania (In USD Billion, 2007-2008) 19 0.8 Total Revenue (In USD Billion) 0.7 0.6 0.03 0.02 0.5 0.4 0.42 0.37 0.3 0.2 0.1 0.25 0.19 0.0 2007 2008 Year BITE Omnitel Tele 2 Source: Portio Research Ltd. 19 Please note: Figures may not add up to 100 percent because of rounding off errors. 60 © 2009, Portio Research. All Rights Reserved
  • 61. Ranking The World’s Best Mobile Operators BITE’s Strategies Figure 36: BITE’s Success Strategies Product Service Innovation Usercentric Approach Attractive Options BITE Lithuania Success Strategy Source: Portio Research Ltd. BITE Lithuania is the third largest MNO operating in the country. It has witnessed a positive growth in both its subscriber base and revenues over the years. The operator has focussed on the following strategies in order to maintain positive revenue growth: • Product Service Innovation: One of the primary reasons for the success of the operator has been its focus on the development of products and services. • In 2006, the Lithuanian market witnessed a rapid proliferation of mobile Internet (highest speed in the European region), which provided the operator with the required impetus to offer this to its subscribers. BITE’s subscribers were the first to use HSDPA communication at speeds almost ten times higher than 3G communication. The service, which initially began with five cities in June 2006, expanded to 16 towns by January 2007, and had almost covered 50 percent of inhabitants in 19 towns by August 20 2007. Subscribers had the added benefit of using this service abroad with Vodafone Mobile Connect, introduced by BITE and Vodafone. • One of the most interesting innovations in the Baltic countries’ wireless market was the BITE HotSpot service. The device enabled users to enjoy wireless Internet services, be it at home or at work. • The operator also introduced a broad portfolio of mobile Internet services on the 3G portal. The most notable were broadcasts of 20 TV channels, 300,000 original sound call melodies, and daily news and youth 21 magazines. 20 21 Source: http://www.bite.lt/en/about/media/pr/archive/2007/show/3061 Source: http://images.bite.lt/bite/files/new/pub/bitegroup_net/en/pdf/BITE.annual.report.2006.pdf © 2009, Portio Research. All Rights Reserved 61
  • 62. Ranking The World’s Best Mobile Operators Figure 37: BITE’s Key Milestones (2003-2008) 2003 •BITE Plus portal – mobile Internet on the phone launched 2004 •BITE Online introduced •Reached 500,000 subscribers 2005 •BITE users able to view TV and read newspaper on mobile – first time in Lithuania 2006 2007 2008 •Fastest 3G mobile Internet implemented •Mobile Internet reaches speed up to 7.2 Mbps •New brand identity launched Source: Portio Research Ltd. • • 62 User-centric Approach: BITE has always tried to provide the best services to its subscribers, and this has led the company to invest extensively in service innovations. Some of these include: • The operator has renovated its 34 existing outlets and also opened up nine new outlets in 20 cities and towns. A major advancement has been the addition of special consultants to assist subscribers with the use of modern equipment. • In order to provide the best service, BITE also launched Internet self-care tools and a help centre on its website. This enables users to find the right information more efficiently. • BITE invited its ‘golden customers’ to the BITEland festival in Juodkrantė for the fourth consecutive time in 2006. The entire event had nearly 10,000 guests who were reportedly treated in a very elegant and stylish manner. ‘Silver customers’ had the privilege of attending music works as well as a colourful Broomstick show featuring dancers and musicians playing with brooms, sticks, etc. BITE was the first Lithuanian operator to reduce international call rates (as a part of European Union roaming regulations). Outgoing and incoming calls were reduced by nearly 46 and 39 percent respectively in all 27 EU member states, except for Latvia where call charges were further reduced owing to the operations of the MNO in that particular country. The operator was the first to introduce the option of creating and sending MMS from “MMS studio” to its subscribers. © 2009, Portio Research. All Rights Reserved
  • 63. Ranking The World’s Best Mobile Operators The following table lists the key factors that led to the success of the operator: Factors Identified BITE Lithuania Product Service Innovation User-centric Approach Attractive Options © 2009, Portio Research. All Rights Reserved 63
  • 64. Ranking The World’s Best Mobile Operators Oi Brazil Ownership: BNDESPar (31.4 percent), Fiago (25 percent), AG Telecom (19.3 percent), L. F. Tel (19.3 percent) and Fund. Atlântico (5 percent) Launched: 2002 st Subscriber Base: 24.4 million (31 December 2008) Total Revenue Growth: 64.7 percent (2007 to 2008) GDP Growth: 5.3 percent (2007 to 2008) st Brazil Mobile Penetration: 76.7 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Brazil: • The largest mobile market in terms of subscriber numbers in Latin America • Dominated by the big four – Vivo, Claro, TIM and Oi • Predominantly a prepaid market with nearly 81.4 percent of total mobile subscribers being prepaid by end-2008 • 3.5G has been launched in the market • Mobile number portability implemented in the country The figure below shows the subscriber base of the major MNOs in Brazil. Subscriber Base (In Million) Figure 38: MNOs’ Subscriber Base – Brazil (In Million, End-2008) 50 45 40 35 30 25 20 15 10 5 0 45.0 38.7 36.4 24.4 5.6 1.8 Vivo Claro TIM Oi Brasil Telecom Nextel Operator Source: Portio Research Ltd. The figure below shows the total revenues generated by the four largest Brazilian MNOs according to their total revenues during 2006-2008. 64 © 2009, Portio Research. All Rights Reserved
  • 65. Ranking The World’s Best Mobile Operators Total Revenue (In USD Billion) Figure 39: Key MNOs’s Total Revenues –Brazil (In USD Billion, 2006-2008) 22 30 25 3.6 20 6.4 2.2 15 5.2 1.6 3.7 7.7 10 6.8 5.0 5 8.8 6.5 5.0 0 2006 2007 2008 Year Oi Claro TIM Brasil Vivo Oi’s Strategies Oi is the fastest growing mobile network operator in Brazil, witnessing over 50 percent annual growth in its subscriber base between 2007 and 2008. Recently it completed the acquisition of Brasil Telecom, which has further strengthened its position in the Brazilian wireless market. Oi is the fastest growing Brazilian MNO, not only in subscriber-terms but also revenue. The figure below compares the revenue growth of operators between 2007 and 2008. Figure 40: MNOs’ Revenue Growth – Brazil (In Percent, 2007-2008) Revenue Growth (In Percent) 60 53.3 56.5 50 36.7 40 30 20 24.1 12.0 13.1 TIM Brasil Telecom 10 0 Claro Vivo Nextel Oi Operator Source: Portio Research Ltd. The following figure highlights how Oi has attained such a high revenue growth rate. 22 Pleas note: Figures may not add up to 100 percent because of rounding off errors. © 2009, Portio Research. All Rights Reserved 65
  • 66. Ranking The World’s Best Mobile Operators Figure 41: Oi’s Revenue Growth Strategies Focus on Subscriber Acquisition Attractive Services Convergence of Services Oi’s Revenue Growth Strategies Source: Portio Research Ltd. Focus on Subscriber Acquisition With nearly 77 percent mobile penetration, Brazil is still a growing wireless market and operators are leaving no stone unturned in order to attract more subscribers and improve their market share. Oi’s subscriber acquisition strategy is targeted at the same goal. To increase its wireless revenue, the operator has realized the need to strengthen its subscriber base and to achieve this it has come up with various strategies. These are outlined below. Figure 42: Oi’s Subscriber Acquisition Strategies Subscriber Acquisition Strategies Acquisitions New Operations In 2008, Oi acquired Amazonia Celular and Brasil Telecom In Q4 2008, Oi started its operations in Sao Paulo, a high growth region Source: Portio Research Ltd. 66 © 2009, Portio Research. All Rights Reserved
  • 67. Ranking The World’s Best Mobile Operators Convergence of Services The operator has made committed efforts to converge its various services such as fixed, mobile and Internet, in order to make them more convenient and innovative for its users. Such moves have encouraged the uptake of all services including mobile, and developments such as rising fixed to mobile interconnect tariffs have helped the MNO to increase its operational revenues. Attractive Services To increase subscribers’ loyalty and popularize its services for higher use, Oi has launched various interesting services which have further enabled it to amass higher revenues from its users. Some of these services are discussed in the figure below. Figure 43: Oi’s Services Oi Ligadorse Oi Conta Total • A bundled product offering • Primary reason behind the growing postpaid subscriber base of the operator • Service with benefits such as virtual and low recharge • Prepaid cards can be used with fixed and public phones as well Data and VAS • A rise in the number of 3G subscribers and increasing SMS volumes have increased Oi’s wireless revenues substantially Source: Portio Research Ltd. The table below highlights the importance of factors which have led to the rise in Oi’s wireless revenue. Factors Identified Oi Brazil Focus on subscriber acquisition Attractive services Convergence of services © 2009, Portio Research. All Rights Reserved 67
  • 68. Ranking The World’s Best Mobile Operators Chapter 5 Performance Measurement 4 – MNO Profitability 68 © 2009, Portio Research. All Rights Reserved
  • 69. Ranking The World’s Best Mobile Operators Performance Measurement 4 – MNO Profitability EBITDA Margin The profitability of an MNO is a primary point of interest for the stakeholders to measure the success of an MNO. The performance of an operator on this front can be assessed by observing their EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) margin. This is dependent on a number of factors including an operator’s strategy on competitive pricing and the provision of subsidies, government regulations, and cost of subscriber acquisition. It has been observed that owing to the presence of simpler business models, and a focus on partnering and the application of best practices for network evolution, emerging markets display better profitability than developed markets. EBITDA margins for developed markets generally fall in the 30-35 percent range, whereas emerging markets typically place above 40 percent. The main factors affecting the EBITDA margins are mentioned in the figure given below. Figure 44: Factors Affecting EBITDA Margin Low tariffs due to high competition High handset subsidies Factors affecting EBITDA margin High churn rate High subscriber acquisition cost Source: Portio Research Ltd. The presence of strong competition forces operators to adopt aggressive pricing strategies and increases the cost of subscriber acquisition; these factors result in lower EBITDA margin. These issues are relevant in both emerging markets – with a large number of players or new entrants – and developed markets – especially those with Mobile Number Portability (MNP). The figure below shows a set of ten MNOs covering a wide range of EBITDA margins with their market share. © 2009, Portio Research. All Rights Reserved 69
  • 70. Ranking The World’s Best Mobile Operators Figure 45: MNOs’ EBITDA Margin and Market Share (In Percent, 2008) 62.0 61.8 60.0 100 57.5 80 40 3.2 52.0 0 51.5 49.8 42.5 -20 -3.5 -40 40 -42.3 22.5 20 -63.1 12.0 9.1 0 19.0 -60 4.6 EBITDA Margin Banglalink Bangladesh Beeline Ukraine Claro Chile Orange France Kyivstar Ukraine KPN The Netherlands Djezzy (Orascom) Algeria Smart The Philippines -80 Operator 60 -4.2 47.7 VIP Mobile Serbia 20 Market Share (In Percent) 65.4 60 Tele2 Croatia EBITDA Margin (In Percent) 80 Market Share Source: Portio Research Ltd. The statistics in the figure above show that high market share is generally associated with high EBITDA margin. High market share results in higher interconnection revenue generated by more incoming calls to the network. The scale of operations and large turnover also make the pro-active network upgrade and launch of new services financially viable. The number of years of operations also plays a role in the EBITDA margin. For example, Serbian MNO VIP Mobile experienced a negative EBITDA margin of around 63.1 percent. This was because the player – with the launch of its mobile network operations in Q3 2007 – is new in the Serbian market and is following an aggressive pricing strategy to win subscribers. Operators are looking to strike a balance in making their offerings attractive and keeping their EBITDA margins up. They are looking to improve their EBITDA margins through proactive network roll-outs to stay ahead of the competition, switching-off legacy infrastructure, and migrating to IP-based infrastructure to provide a better quality of service. Rankings The figure below shows the Top 20 MNOs based on EBITDA margin. 70 © 2009, Portio Research. All Rights Reserved
  • 71. Ranking The World’s Best Mobile Operators Figure 46: Top 20 MNOs Worldwide – MNO Profitability (2008) 23 Rank 1 to 10 Rank 11 to 20 MTS Belarus, 8.9 mt:s Serbia, 8.9 MTS Russia, 8.9 Vodafone Egypt, 8.9 Maxis Malaysia, 9.0 Telcel Mexico, 9.0 China Mobile, 9.0 Tunisiana Tunisia, 9.0 Tunicell Tunisia, 9.0 Mobiltel Bulgaria, 9.1 MTN Nigeria, 9.2 Orange France, 9.1 8.4 Kyivstar Ukraine, 9.2 8.6 KPN The Netherlands, 9.3 8.8 Djezzy Algeria, 9.3 9.0 Maroc Telecom Morocco, 9.4 9.2 Globe The Philippines, 9.4 Score 9.4 Telkomsel Indonesia, 9.4 9.6 Smart The Philippines, 9.4 9.8 Etisalat The UAE, 10.0 10.0 8.2 Operator Source: Portio Research Ltd. The rankings of MNOs based on EBITDA margin are given below. Table 16: MNOs Worldwide Ranked 1 to 20 – MNO Profitability (2008) Rank MNO Score Rank MNO Score Mobiltel Bulgaria 9.08 1 2 Etisalat The UAE 10.00 11 Smart The Philippines 9.42 12 Tunicell Tunisia 9.02 3 Telkomsel Indonesia 9.40 13 Tunisiana Tunisia 8.99 4 Globe The Philippines 9.40 14 China Mobile 8.99 5 Maroc Telecom Morocco 9.38 15 Telcel Mexico 8.97 6 Djezzy Algeria 9.30 16 Maxis Malaysia 8.96 7 KPN The Netherlands 9.29 17 Vodafone Egypt 8.92 8 Kyivstar Ukraine 9.23 18 MTS Russia 8.91 9 MTN Nigeria 9.18 19 mt:s Serbia 8.91 10 Orange France 9.15 20 MTS Belarus 8.91 23 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 71
  • 72. Ranking The World’s Best Mobile Operators Table 17: MNOs Worldwide Ranked 21 to 50 – MNO Profitability (2008) Rank MNO Score Rank MNO Score 21 Asiacell Iraq 8.86 22 Velcom Belarus 8.86 36 Rogers Canada 8.76 37 Vodafone Romania 8.75 23 MegaFon Russia 24 Etisalat Misr Egypt 8.85 38 VimpelCom Russia 8.75 8.85 39 Globacom Nigeria 8.73 25 Vivatel Bulgaria 8.85 40 AIS Thailand 8.72 26 Comcel Colombia 8.85 41 Celcom Malaysia 8.72 27 Movistar Venezuela 8.82 42 Wind Italy 8.72 28 T-Mobile Czech Republic 8.81 43 DiGi Malaysia 8.72 29 8.81 44 Telecom Italia 8.72 8.81 45 3 Italia 8.72 31 O2 Czech Republic Vodafone Czech Republic MTS Ukraine 8.79 46 Sibir Telecom Russia 8.72 32 MobiNil Egypt 8.78 47 Vodafone Italy 8.71 33 Zain Jordan 8.77 48 Taiwan Mobile 8.70 34 Telenor Serbia GrameenPhone Bangladesh 8.77 49 Zain Sudan 8.70 8.77 50 T-Mobile Croatia 8.68 30 35 72 © 2009, Portio Research. All Rights Reserved
  • 73. Ranking The World’s Best Mobile Operators Table 18: MNOs Worldwide Ranked 51 to 170 – MNO Profitability (2008) Rank MNO Rank MNO Rank MNO 51 Movistar Spain 91 Movistar Chile 131 Nextel Peru 52 China Unicom 92 Cellcom Israel 132 Bharti Airtel India 53 Safaricom Kenya 93 Tigo Colombia 133 Orange Switzerland 54 Telstra Australia 94 Telia Sonera Sweden 134 O2 Ireland 55 Proximus Belgium 95 Base Belgium 135 3 Sweden 56 Meditel Morocco 96 Turkcell Turkey 136 Orange Austria 57 T-Mobile Hungary 97 Telenor Norway 137 3 Austria 58 Chunghwa Taiwan 98 Nedjma Algeria 138 Telia Sonera Finland 59 Orange The UK 99 Starhub Singapore 139 BITE Lithuania 60 Telus Mobility Canada 100 Polkomtel Poland 140 T-Mobile Montenegro 61 TMN Portugal 101 HTIL Hong Kong 141 Nextel Argentina 62 M1 Singapore 102 Digitel Venezuela 142 63 Cosmote Greece 103 Mobilkom Austria 143 64 Vodafone Hungary 104 NTT DOCOMO Japan 144 Vivo Brazil Vodafone The Netherlands Tele2 Lithuania 65 Pannon Hungary 105 145 Claro Peru 66 Globul Bulgaria 106 146 TCI Iran 67 Excelcomindo Indonesia 107 AT&T The US Partner Communications Israel Netcom Norway 147 MTN Iran 68 Entel PCS Chile 108 Orange Spain 148 MTN Afghanistan 69 Promonte Montenegro 109 PTC Poland 149 PCCW Mobile Hong Kong 70 FeT Taiwan 110 Omnitel Lithuania 150 Elisa Finland 71 Zain Iraq 111 Vodafone Spain 151 3 The UK 72 Vodafone New Zealand 112 Tele2 Russia 152 Vodafone India 73 Mobistar Belgium 113 Telefonica Peru 153 T-Mobile The US 74 Mobilink Pakistan 114 SK Telecom South Korea 154 Nextel Brazil 75 Orange Slovakia 115 Vodacom South Africa 155 Vodafone Ireland 76 T-Mobile Slovakia 116 Tele2 Sweden 156 MTN Sudan 77 Telefonica Slovakia 117 Claro Argentina 157 KDDI Japan 78 SFR France 118 Idea Cellular India 158 SoftBank Japan 79 119 T-Mobile Austria 160 KTF South Korea 121 Vodafone Greece Telecom Personal Argentina Cell C South Africa 159 81 SingTel Singapore Reliance Communication India Vodafone Germany 161 82 Bell Mobility Canada 122 Bouygues France 162 83 Wind Hellas Greece 123 DTAC Thailand 163 O2 The UK CSL New World Mobility Hong Kong Movistar Mexico 84 124 Mobily Saudi Arabia 164 SmarTone Hong Kong 125 Pelephone Israel 165 Movistar Colombia 86 Verizon The US Telecom Mobile New Zealand T-Mobile Germany 126 Zain Nigeria 166 Optus Australia 87 Swisscom Switzerland 127 Movistar Argentina 167 Movilnet Venezuela 88 E-Plus Germany 128 Oi Brazil 168 Vodacom DR Congo 89 Vodafone Portugal 129 MTN Syria 169 Sunrise Switzerland 90 VIPnet Croatia 130 MTN South Africa 170 True Move Thailand 80 85 © 2009, Portio Research. All Rights Reserved 120 73
  • 74. Ranking The World’s Best Mobile Operators Table 19: MNOs Worldwide Ranked 171 to 204 – MNO Profitability (2008) Rank MNO Rank MNO Rank MNO 171 Meteor Ireland 183 O2 Germany 195 Brasil Telecom 172 Sprint The US 184 Avea Turkey 196 du The UAE 173 Tigo DR Congo 185 Telia Denmark 197 life:) Ukraine 174 Claro Brazil 186 DNA Finland 198 Hutch Thailand 175 Vodafone The UK 187 Vodafone Australia 199 Claro Chile 176 Telenor Sweden 188 Vodafone Turkey 200 Beeline Ukraine 177 Sonofon Denmark 189 T-Mobile The Netherlands 201 Banglalink Bangladesh 178 LG Telecom South Korea 190 Telenor Pakistan 202 Zain Kenya 179 Optimus Portugal 191 Sun The Philippines 203 Tele2 Croatia 180 Celtel DR Congo 192 Iusacell Mexico 204 VIP Serbia 181 T-Mobile The UK 193 Orange Poland 182 TDC Denmark 194 TIM Brasil The figure below shows the Top 3 MNOs judged on EBITDA margin. Figure 47: Top 3 MNOs Worldwide – MNO Profitability (2008) Etisalat The UAE 1 Smart The Philippines 2 3 Telkomsel Indonesia Source: Portio Research Ltd. 74 © 2009, Portio Research. All Rights Reserved
  • 75. Ranking The World’s Best Mobile Operators MNO Strategies Globe Telecom The Philippines Ownership: Singapore Telecommunications (45 percent), Ayala Corporation (34 percent), and Public Stocks (21 percent) Launched: 1994 st Subscriber Base: 24.7 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 21.6 percent (2007 to 2008) st The Philippines Mobile Penetration: 71.2 percent (31 December 2008) st Market Share: 36.1 percent (31 December 2008) Technology: GSM and WCDMA (HSDPA) Market Environment – The Philippines: • Country has significant mobile penetration of 71 percent despite the region’s low income levels • Competition exists among the two leading players – Smart and Globe – which together constitute nearly 60 percent of The Philippines market • The overall telecom market is gaining momentum, characterized by increased competition, evolving business models, technology enhancement, etc. • The Philippines accounts for one of the highest SMS volumes worldwide • Uptake of 3G has been quite slow as a result of various factors, including expensive 3G handsets, and high tariffs for non-SMS data traffic • The Philippines VAS (value added services) market is witnessing strong growth as most companies are developing of wireless applications providing content services. EBITDA Margin and Revenues – Globe Telecom: The figure below shows the EBITDA margins and revenues for Globe Telecom during 20062008. Figure 48: EBITDA Margin and Total Revenue – Globe Telecom (2006-2008) Total Revenue (In USD Billion) 1.5 65.0 57.0 70 60 50 1 1.5 0.5 1.3 1.2 40 EBITDA Margin (In Percent) 68.0 2 30 0 2006 2007 2008 Year Total Revenue EBITDA Margin Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 75
  • 76. Ranking The World’s Best Mobile Operators Globe Telecom’s Strategies Figure 49: Globe Telecom’s Success Strategies Rebranding Globe Telecom Success Strategy Enhancing Usability Service Innovations Source: Portio Research Ltd. Globe Telecom is the second largest mobile network operator in The Philippines. Globe is quite well-known in the mobile segment due to the innovative services provided by the operator in The Philippines market. Besides innovative services, the MNO has also practised the following strategies in order to corner a staggering 65 percent EBITDA margin in the wireless segment. • Re-branding: As a step to effectively align its products and services for all subscribers (including business), Globe came up with a new branding strategy. This new strategy meant that all the products and services in the mobile and broadband category would have ‘Globe’ as a common brand. Besides helping the operator in aligning its services and innovation under an umbrella brand, the re-branding also helped the company in streamlining its service and support. • WiMAX Service: Globe has been the first operator in The Philippines to launch WiMAX services. The MNO’s network is one of the biggest broadband networks in the South East Asian region. The package will allow users to enjoy Internet access at speeds of 512 Kbps for a minimum package of USD 16.47 per month (PHP 795 per 24 month). • • 24 Enhancing Usability: The MNO has partnered with Nokia Siemens Networks in order to upgrade its prepaid charging system. The enhancement helped the operator in enriching the experience of its subscribers and also improving its operational efficiency. As a result of the upgrade of its prepaid system, Globe Telecom has been effectively able to decrease its charging platforms considerably, thereby reducing hardware footprints and power consumption. Service Innovations: Globe has gained prominence in The Philippines wireless market for devising an innovative service and product portfolio. Some of the major service innovations include: Source: http://www.philstar.com/Article.aspx?articleId=451934&publicationSubCategoryId=66 76 © 2009, Portio Research. All Rights Reserved Upgrade of prepaid charging system has helped Globe Telecom in enriching the experience of its subscribers and also improving its operational efficiency.
  • 77. Ranking The World’s Best Mobile Operators Figure 50: Globe Telecom’s Service Innovations Globe Telecom’s Service Innovations Duo – Mobile and Landline in One Share-A-Load Credit Transfer Globe GCASH Plan Duo Subscription Source: Portio Research Ltd.     Duo – Mobile and Landline in One: The operator launched a total convergent solution ‘Duo – Mobile and Landline in One’ in partnership with Acision (a leading messaging company) which would work on both fixed and mobile networks for postpaid subscribers. This subscription-based service intends to improve network traffic, primarily voice, by offering free calls within a city zone. The service provides unlimited calls from mobile to landline and viceversa to the Duo subscribers. Share-A-Load: This innovative service allows postpaid, prepaid and TM subscribers to transfer prepaid call and text credits to other Globe and Touch Mobile Prepaid subscribers via SMS. The loading service allows the transfer of amounts ranging from nearly USD 0.02 to USD 3.18 (PHP 1 to PHP 150), and can also be used internationally in countries including Hong Kong and 25 Japan. Globe GCASH: This is another ground-breaking service from Globe Telecom, wherein subscribers’ phones are converted into mobile wallets. It offers a range of services such as buying goods, transfering money personto-person, receiving domestic funds and international remittances. It is the only telecom company in The Philippines to introduce such a platform. This service was awarded “Best Mobile Messaging Service” in the GSM Association Awards 2005. Plan Duo Subscription: This service allows Globe subscribers to carry two numbers (one mobile and one landline) in a single SIM card. Subscription to 26 this service comes at a price of USD 8.32 per month (PHP 399 per month). The following table lists the key factors central to the operator’s success: Factors Identified Globe Telecom The Philippines Re-branding Enhancing usability Service innovations 25 26 Source: http://www.freephilippinesimcard.com/globe_share_a_load_philippines.php Source: http://www.yugatech.com/blog/telecoms/globe-offers-plan-duo-service/ © 2009, Portio Research. All Rights Reserved 77 Globe GCASH is a popular service from Globe Telecom, wherein subscribers’ phones are converted into mobile wallets.
  • 78. Ranking The World’s Best Mobile Operators Djezzy Algeria Ownership: Orascom Telecom Holding SAE (49.6 percent), Oratel International Ltd. (31.1 percent), Moga Holding Ltd. (8.2 percent), AIG African Infrastructure Fund IIC (7.9 percent) and Cevital s.p.a. (3.2 percent) Launched: 2002 st Subscriber Base: 14.1 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 5.2 percent (2007 to 2008) st Market Share: 50.4 percent (31 December 2008) st Algeria Mobile Penetration: 82.9 percent (31 December 2008) Technology: GSM Market Environment – Algeria: • Dominated by the big two – Djezzy and Nedjma • One of the fastest growing wireless markets in the Middle East and Africa • Operators have launched different brands to target different segments The figure below shows the subscriber base of the major MNOs in Algeria. Subscriber Base (In Million) Figure 51: MNOs’ Subscriber Base – Algeria (In Million, End-2008) 16 14.1 14 12 10 8 6 5.1 4 2 0 Nedjma Djezzy Operator Source: Portio Research Ltd. EBITDA Margin and Revenues – Djezzy Algeria: The figure below shows the EBITDA margins and revenues for Djezzy Algeria during 20062008. 78 © 2009, Portio Research. All Rights Reserved
  • 79. Ranking The World’s Best Mobile Operators Figure 52: EBITDA Margin and Total Revenue – Djezzy Algeria (2006-2008) Total Revenue (In USD Billion) 64.7 63.1 62.0 60 1.5 1 2.0 50 1.8 1.5 0.5 40 0 EBITDA Margin (In Percent) 70 2 30 2006 2007 2008 Year Total Revenue EBITDA Margin Source: Portio Research Ltd. Djezzy’s Strategies Djezzy is Algeria’s biggest mobile network operator with more than fifty percent of the country’s subscribers. The operator offers both voice and data services to its corporate and retail subscribers. The MNO also generates the highest ARPU and EBITDA margins in the country. This achievement could be attributed to the following: • Commitment to maintain leadership in the market • Focus on high ARPU generation • Launching innovative services and products to improve revenue and EBITDA margin Commitment to maintain leadership in the market While the operator launched its wireless operations in the country three years after Algerian Mobile Network, Djezzy soon became market leader owing to its expertise in network deployment, sales and marketing. Today its networks cover nearly 95 percent of the country’s population, and it has revealed plans to further invest in the expansion of the network and improve the quality of its services. This investment is aimed at better serving subscribers and gaining their loyalty. Nedjma, the second largest player, challenged its dominance by launching aggressive pricing plans for new services. This resulted in the adoption of a new branding strategy by Djezzy, which led to the emergence of its new brand named Allo. This brand was targeted at budget users with low prices. The Allo brand became highly popular among the masses and enabled the operator to capture a larger subscriber base and in turn maintain its leadership crown in the Algerian market. In November 2008, the operator chose Nokia Siemens Networks, to build a single subscriber database. This database was intended to gather valuable insights on subscribers’ usage habits and to improve its product portfolio accordingly. Focus on high ARPU generation The operator generates the highest ARPU in the country. Although over the years operators in the country have witnessed a decline in their ARPU, Djezzy still holds the upper hand in terms of revenue generated by its subscribers. The figure below compares ARPU of the major players in Algeria. © 2009, Portio Research. All Rights Reserved 79 Djezzy generates the highest ARPU in Algeria.
  • 80. Ranking The World’s Best Mobile Operators Figure 53: MNOs’ Monthly ARPU – Algeria (In USD, 2008) Monthly ARPU (In USD) 14 12.1 12 10 7.8 8 6 4 2 0 Nedjma Djezzy Operator Source: Portio Research Ltd. There are several reasons behind high ARPU generation by the operator. One of them is its strategy to target different subscriber segments with different brands. It operates through separate brands to serve high value subscribers such as those from the enterprise sector, and other users which avail its services only for basic purposes and are more price sensitive. Another factor which has aided its cause of high ARPU is its growing interest in the postpaid segment. The operator launched ‘Millenium’, a product which proved to be highly successful in attracting more postpaid subscribers – in fact doubling their number between 2007 and 2008; this opened further channels of recurrent revenue generation. The figure below compares the contribution of postpaid subscribers to the total subscriber base of the two leading Algerian MNOs. Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 54: MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base of the MNO – Algeria (In Percent, 2007 & 2008) 5 5 4 4 3 3 2 2 1 1 0 4.4 2.7 2.6 1.2 2007 2008 Year Nedjma Dejzzy Source: Portio Research Ltd. 80 © 2009, Portio Research. All Rights Reserved
  • 81. Ranking The World’s Best Mobile Operators The figure above clearly shows the growing percentage of postpaid subscribers for Djezzy, whereas in Nedjma’s case there has been a decline from 2007 to 2008. This increasing percentage has enabled the operator to sustain high ARPU generation, which in turn has resulted in higher revenues and EBITDA margin. Launching innovative services and products to improve revenue and EBITDA margin To retain the title of market leader in the wireless market, an operator has to be dynamic with its product portfolio and come up with innovative services to reduce churn and keep its subscriber base intact. On this front, Djezzy has done a commendable job by updating its portfolio and keeping its users interested. Furthermore, the operator offers attractive postpaid and prepaid tariff plans to the users which strengthen its hold over the Algerian market. The operator introduced a loyalty program called Imtiyaz. This program accumulated points for the subscribers based on their mobile phone use, which could later be redeemed for benefits such as free airtime, handsets or other gifts. Some other initiatives taken by the operator are discussed below: • Recently, Djezzy announced its plan to launch a WAP download portal named “Yalla”. The portal will offer innovative services for the download of music, video and games onto mobile handsets. • In October 2008, Djezzy teamed with Western Union to offer mobile remittance services in selected markets, including Algeria. The table below highlights the importance of factors which resulted in high profitability for the operator. Factors Identified Djezzy Algeria Focus on high ARPU Leader in the market Innovative services and products © 2009, Portio Research. All Rights Reserved 81
  • 82. Ranking The World’s Best Mobile Operators KPN The Netherlands Ownership: KPN Telecom Launched: 1994 st Subscriber Base: 9.8 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 4.1 percent (2007 to 2008) st Netherlands Mobile Penetration: 117.9 percent (31 December 2008) st Market Share: 49.8 percent (31 December 2008) Technology: GSM and WCDMA (HSPA) Market Environment – The Netherlands: • The country hosts one of Europe’s most sophisticated and advanced fibre infrastructures • The acquisition of Orange by T-Mobile has led to the emergence of three MNOs in The Netherlands wireless market – KPN, T-Mobile, and Vodafone • 3G is acting as the driving force behind the increase in subscriber numbers; however, the market for high-end data services is still in its nascent stage as a result of low consumer enthusiasm • All three operators are providers of wholesale services to MVNOs (Mobile Virtual Network Operators) and resellers and have been able to cover almost 90 percent of 27 the population via their 3G networks • Owing to extensive government investment, the country has one of the highest levels of broadband penetration worldwide EBITDA Margin and Revenues – KPN: The figure below shows the EBITDA margins and revenues for KPN during 2006-2008. Figure 55: EBITDA Margin and Total Revenue – KPN The Netherlands (2006-2008) 61.8 70 60 4 50 3 36.6 2 39.5 3.8 40 4.6 4.3 30 20 1 EBITDA Margin (In Percent) Total Revenue (In USD Billion) 5 10 0 0 2006 2007 2008 Year Total Revenue EBITDA Margin Source: Portio Research Ltd. 27 Source: http://www.budde.com.au/Research/Netherlands-Mobile-Market-Overview-Statistics-Forecasts.html 82 © 2009, Portio Research. All Rights Reserved
  • 83. Ranking The World’s Best Mobile Operators KPN’s Strategies Figure 56: KPN’s Success Strategies Portfolio Reduction and Simplification Technology Upgrades KPN Success Strategy Source: Portio Research Ltd. KPN is the biggest operator in The Netherlands having captured almost half of the market. The operator targets both consumer and business segments with its wireless and wireline services. KPN has been able to revamp the declining trend of negative EBITDA in The Netherlands by registering an EBITDA margin of approximately 61.8 percent for 2008. This has largely been possible owing to the following strategies. Figure 57: Market Share of MNOs – The Netherlands (2008) 27.1% 49.8% 23.1% KPN T-Mobile Vodafone Source: Portio Research Ltd. Portfolio Reduction and Simplification: The operator decided to reduce and simplify its product and services portfolio both at the front-end (retail segment) and at back-end (network operations). These cost reductions benefitted KPN in two ways–first and foremost the amount saved was used for re-investment in revenue growth and secondly, the reduction helped in improving margins. The consumer and business segments were targeted with the following strategies: • Consumer Segment: The primary focus of the operator was to achieve growth but reduce costs. The MNO had various brands, namely KPN, Hi, Het Net, XS4ALL and Telfort, all targeted at different consumer segments; therefore, it decided to reduce and simplify the entire portfolio. One of the key initiatives in this direction was:  Planet brand moving to the KPN brand in June 2008 KPN was able to achieve the following milestones: © 2009, Portio Research. All Rights Reserved 83
  • 84. Ranking The World’s Best Mobile Operators    Voice: Noteworthy decrease in net line loss was achieved as a result of a focus on user retention in PSTN lines Mobile: Focus on postpaid and data products led to a better portfolio Video Services: Digitenne (DVB-T)’s success helped the operator in increasing its subscriber base by 56 percent in 2008 compared to 2007 • Business Segment: In order to maintain its EBITDA growth the MNO has implemented the following steps:  Mobile Business market development: Having a sophisticated and betterequipped 3G network than other operators, the MNO decided to develop the mobile business market by targeting data services such as laptop data cards, BlackBerry, PDA and Machine-to-Machine  KPN intends to enhance its online application portfolio, housing/hosting initiatives in order to capture the emerging ICT areas.  In order to nurture subscriber loyalty, KPN has implemented the NetPromotor Score (NPS), wherein the user’s feedback is assessed for improvements. • Technology Upgrades: The mobile data services market in The Netherlands is witnessing steady growth, which provided KPN with the impetus to upgrade its entire network.  In 2008, the operator switched to an advanced HSDPA (High-Speed Downlink Packet Access) network from the entire UMTS (Universal Mobile Telecommunications System) network, which helped it to offer the best speed to its subscribers in The Netherlands  KPN intends to connect the UMTS sites through fibre optics and also introduce LTE (Long Term Evolution) in the coming years  The operator’s mobile GSM and UMTS core networks are expected to be replaced by integrated GSM-UMTS IP-based core networks in 2008-2009 in order to gain further cost benefits Figure 58: KPN’s Segment Strategies Consumer Segment Business Market Wholesale and Operations • Simplified Multi-brand portfolio • Stop Line Loss • Subscriber and ARPU growth • • • • Moving up the value chain into managed ICT services Migration to IP services Simplified portfolio Legacy services phase out • Proactive network roll-out • Switching off legacy infrastructure Source: Portio Research Ltd. 84 © 2009, Portio Research. All Rights Reserved The mobile data services market in The Netherlands is witnessing a steady growth, which provided KPN with the impetus to upgrade its entire network.
  • 85. Ranking The World’s Best Mobile Operators The following table lists the key factors central to the operator’s success: Factors Identified KPN The Netherlands Product reduction and simplification Technology deployment © 2009, Portio Research. All Rights Reserved 85
  • 86. Ranking The World’s Best Mobile Operators Additional Reference Material Average Profit Per User (APPU) An alternative way of judging an operator’s profitability is APPU per month. This is an indicator of how well an operator has balanced its aggressive pricing and subsidies to attract more subscribers while keeping an eye over profits. Formula and Rationale The formula used for the calculation of APPU is given below: Net Profits of MNO (In USD) Average Subscriber Base of MNO (2008)*12 Value = The APPU calculated using this formula has been used to rank the operators worldwide. The figure below shows the top 10 MNOs according to this performance measurement. 70 Top 10 MNOs Worldwide – Monthly APPU and Monthly ARPU (In USD, 2008) 60.5 58.0 57.2 55.6 60 50 41.0 36.9 40 30 52.8 50.6 47.5 31.4 28.9 22.5 19.3 20 13.7 12.4 12.3 12.3 11.6 11.0 10.7 10 Monthly APPU Vodafone The Netherlands Operator Cosmote Greece Vodafone Italy AT&T The US Nextel Brazil Nextel Argentina Vodafone Spain Telenor Norway Proximus (Belgacom) 0 Rogers Canada Monthly APPU and Monthly ARPU (In USD) Figure 59: Monthly ARPU Source: Portio Research Ltd. For all the MNOs mentioned in the figure above, their APPU is over 20 percent of their respective ARPU. APPU can be a measure of profitability of an MNO. However, there are some challenges in using this as a fair judge of an MNO’s efforts for increasing profitability. Some of the challenges are mentioned below: • It is difficult to rank MNOs operating in different countries using an APPU performance measurement index because during the calculation of profits, tax is levied by the local government and may vary broadly across different countries. Therefore, using APPU can put some operators in an advantageous/disadvantageous position despite their performance. • MNOs in different stages of their establishment with respect to network launch and operations might be incurring varying capital expenditure owing to network 86 © 2009, Portio Research. All Rights Reserved
  • 87. Ranking The World’s Best Mobile Operators • expansion requirements. Therefore, judging a relatively new operator with negative profits (net loss) due to high capital expenditure might not provide a complete picture of its performance. Data for net profits are not released by a number of MNOs for their country level operations. Hence, it is difficult to use this performance measurement to rank a large number of players. EBITDA Margin vs. APPU When we compare the APPU performance measurement index with an EBITDA margin performance measurement index (as a less biased measure for profitability), the EBITDA margin performance measurement index fares better than the APPU performance measurement index. This argument is based on the aforementioned points and furthermore, EBITDA margin is less affected by varying regulations, development stage of an MNO in a market, and has better data availability. EBITDA margin is more dependent on factors such as existing competition and market share and these factors are more admissible rather than the above mentioned factors. © 2009, Portio Research. All Rights Reserved 87
  • 88. Ranking The World’s Best Mobile Operators Chapter 6 Performance Measurement 5 – MNO Growth vs. Market Growth 88 © 2009, Portio Research. All Rights Reserved
  • 89. Ranking The World’s Best Mobile Operators Performance Measurement 5 – MNO Growth vs. Market Growth The subscriber growth of an MNO is an indicator of the appeal of its pricing plans and quality of its service. However, an MNO’s subscriber growth cannot be compared in absolute terms with that of another MNO operating in another market because of various factors. For example, the operators might be operating in markets at different levels of penetration. Or they might be at different stages of their service launch, which might enable them to achieve higher year-on-year subscriber growth owing to a low previous year subscriber base. The emerging markets have experienced tremendous growth during 2008. The Top 10 markets which witnessed the highest 2008 subscriber growth are shown in the figure below: Figure 60: Top 10 Countries Worldwide – Y-o-Y Subscriber Growth (2007 to 2008) and Penetration (End-2008) 160 139.6 62.0 140 60 47.1 50 46.5 45.0 120 43.0 41.3 41.0 40 38.4 37.4 67.7 80 57.5 30 20 100 34.5 54.6 29.9 60 40.9 37.4 32.2 40 21.3 12.5 10 0 Penetration (In Percent) Subscriber growth (In Percent) 70 20 DR Congo Kenya Saudi Arabia Bangladesh Egypt Nigeria Afghanistan Indonesia India Iran 0 Country Subscriber growth Penetration Source: Portio Research Ltd. Nearly all the countries shown above have sub 100 percent penetration and mobile services that are getting popular among the rural population. It is easier for an MNO in these markets to increase its subscriber base compared to MNOs operational in saturated markets. Therefore, to evaluate the success of an operator’s strategy in increasing its subscriber base, subscriber growth has to be seen with respect to the subscriber base growth in a country. The study may also be useful in evaluating an operator’s performance in saturated markets especially those with MNP (Mobile Number Portability) regulation, where MNOs look to attract competitor’s subscribers to increase their market share. Formula and Rationale The formula used for the calculation of this performance measurement index is given below. © 2009, Portio Research. All Rights Reserved 89
  • 90. Ranking The World’s Best Mobile Operators Subscriber Base Growth of MNO * Market Share of MNO Subscriber Base Growth of the Country Value = The objective of using this performance measurement is to evaluate the aggressiveness of an MNO compared to its peers. Furthermore, the comparison has been normalised by using the market share of the MNO in the numerator to input a weight for the scale of its operations, so as to blunt the effect of extraordinary y-o-y growth shown by an operator in the first few years of operations. Rankings The figure below shows the Top 20 MNOs based on this performance measurement. Figure 61: Top 20 MNOs Worldwide – MNO Growth vs. Market Growth (2008) 28 Rank 1 to 10 Rank 11 to 20 Zain Iraq, 8.1 Beeline Ukraine, 8.1 Asiacell Iraq, 8.1 MTN Iran, 8.1 Chunghwa Taiwan, 8.2 Pol komtel Poland, 8.2 Safaricom Kenya, 8.2 Vodafone New Zealand, 8.1 3 mt:s Serbia, 8.2 SingTel Singapore, 8.2 Telenor Norway, 8.2 China Mobile, 8.3 Vodafone Italy, 8.4 Telefonica Slovakia, 8.4 4 Vodafone Ireland, 8.4 5 Sonofon Denmark, 8.5 Score 6 3Italia, 8.6 7 TDC Denmark, 8.7 8 life:) Ukraine, 9.1 9 Wind Italy, 10.0 10 2 1 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement are given below. 28 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. 90 © 2009, Portio Research. All Rights Reserved
  • 91. Ranking The World’s Best Mobile Operators Table 20: MNOs Worldwide Ranked 1 to 20 – MNO Growth vs. Market Growth (2008) Rank MNO Score Rank MNO Score 1 Wind Italy 10.00 11 SingTel Singapore 8.23 2 life:) Ukraine 9.06 12 mt:s Serbia 8.19 3 TDC Denmark 8.66 13 Safaricom Kenya 8.19 4 3 Italia 8.59 14 Polkomtel Poland 8.18 5 Sonofon Denmark 8.53 15 Chunghwa Taiwan 8.16 6 Vodafone Ireland 8.42 16 MTN Iran 8.15 7 Vodafone Italy 8.37 17 Vodafone New Zealand 8.15 8 Telefonica Slovakia 8.37 18 Asiacell Iraq 8.15 9 China Mobile 8.27 19 Beeline Ukraine 8.13 10 Telenor Norway 8.24 20 Zain Iraq 8.13 Table 21: MNOs Worldwide Ranked 21 to 50 – MNO Growth vs. Market Growth (2008) Rank MNO Score Rank MNO Score 21 Mobilkom Austria 8.12 36 VIP Serbia 8.05 22 Comcel Colombia 8.12 37 Swisscom Switzerland 8.04 23 Cosmote Greece 8.10 38 MTN Syria 8.04 24 du The UAE 8.09 39 Pelephone Israel 8.03 25 T-Mobile Montenegro 8.08 40 Base Belgium 8.03 26 Telcel Mexico 8.08 41 Meditel Morocco 8.03 27 Movilnet Venezuela 8.07 42 8.03 28 Tunisiana Tunisia 8.07 43 29 Tele2 Lithuania 8.07 44 Telia Denmark Partner Communications Israel TMN Portugal 30 T-Mobile Hungary 8.06 45 SK Telecom South Korea 8.02 31 Cellcom Israel 8.06 46 Zain Jordan 8.02 32 SoftBank Japan 8.06 47 Celtel DR Congo 8.02 33 Avea Turkey 8.06 48 Zain Sudan 8.02 34 Telefonica Peru 8.05 49 Velcom Belarus 8.02 35 Telia Sonera Sweden 8.05 50 HTIL Hong Kong 8.02 © 2009, Portio Research. All Rights Reserved 91 8.03 8.02
  • 92. Ranking The World’s Best Mobile Operators Table 22: MNOs Worldwide Ranked 51 to 170 – MNO Growth vs. Market Growth (2008) Rank MNO Rank MNO Rank MNO 51 Movistar Chile 52 Maroc Telecom Morocco 91 O2 Ireland 131 T-Mobile The US 92 Telkomsel Indonesia 132 Telstra Australia 53 54 Maxis Malaysia 93 VIPnet Croatia 133 Wind Hellas Greece O2 The UK 94 Tele2 Croatia 134 55 DNA Finland 95 T-Mobile Croatia 135 56 Etisalat The UAE 96 Turkcell Turkey 136 Vivo Brazil Telecom Mobile New Zealand Vodafone Australia 57 Movistar Spain 97 Vodafone Portugal 137 Proximus Belgium 58 Vodafone Czech Republic 98 Vodacom DR Congo 138 Entel PCS Chile 59 3 The UK 99 Oi Brazil 139 KDDI Japan 60 Orange France 100 T-Mobile Czech Republic 140 NTT DOCOMO Japan 61 Mobiltel Bulgaria 101 Tigo DR Congo 141 PTC Poland 62 Sunrise Switzerland 102 Globul Bulgaria 142 Vivatel Bulgaria 63 MegaFon Russia 103 T-Mobile The Netherlands 143 Movistar Argentina 64 Optus Australia 104 Telenor Pakistan 144 Movistar Venezuela 65 MTN South Africa 105 E-Plus Germany 145 Globacom Nigeria 66 MTS Belarus 106 Globe The Philippines 146 Movistar Colombia 67 Vodafone Spain 107 DTAC Thailand 147 Vodafone Germany 68 Mobily Saudi Arabia 108 Banglalink Bangladesh 148 Vodafone India 69 AT&T The US 109 Vodafone The UK 149 Digitel Venezuela 70 BITE Lithuania 110 Meteor Ireland 150 VimpelCom Russia 71 Etisalat Misr Egypt 111 KTF South Korea 151 72 Pannon Hungary 112 T-Mobile Germany 152 73 113 Vodafone Egypt 153 114 Movistar Mexico 154 O2 Germany 75 TCI Iran Vodafone The Netherlands Tunicell Tunisia LG Telecom South Korea Reliance Communication India Cell C South Africa 115 True Move Thailand 155 Bell Mobility Canada 76 PCCW Mobile Hong Kong 116 MTS Russia 156 Bouygues France 77 MTN Afghanistan 117 Bharti Airtel India 157 Djezzy Algeria 78 Vodacom South Africa 118 O2 Czech Republic 158 T-Mobile Austria 79 Smart The Philippines 119 Telia Sonera Finland 159 Optimus Portugal 80 Rogers Canada 120 Claro Chile 160 TIM Brasil 81 Claro Peru 121 Zain Nigeria 161 Vodafone Romania 82 Verizon The US 122 T-Mobile Slovakia 162 DiGi Malaysia 83 Claro Argentina 123 Claro Brazil 163 3 Sweden 84 Celcom Malaysia 124 164 China Unicom 85 Sun The Philippines 125 165 Zain Kenya 86 AIS Thailand 126 KPN The Netherlands GrameenPhone Bangladesh Excelcomindo Indonesia 166 3 Austria 87 SFR France 127 Tele2 Sweden 167 Idea Cellular India 88 Telus Mobility Canada Telecom Personal Argentina MobiNil Egypt 128 Elisa Finland 168 Vodafone Turkey 129 Mobistar Belgium 169 M1 Singapore 130 MTN Nigeria 170 Vodafone Greece 74 89 90 92 © 2009, Portio Research. All Rights Reserved
  • 93. Ranking The World’s Best Mobile Operators Table 23: MNOs Worldwide Ranked 171 to 204 – MNO Growth vs. Market Growth (2008) Rank MNO Rank MNO Rank MNO 171 MTN Sudan 183 Brasil Telecom 195 Omnitel Lithuania 172 Orange Spain 184 Nextel Peru 196 Orange Austria 173 FeT Taiwan 185 Telenor Sweden 197 Kyivstar Ukraine 174 Taiwan Mobile 186 Orange Switzerland 198 Orange Poland 175 187 Nextel Argentina 199 Mobilink Pakistan 188 Sibir Telecom Russia 200 T-Mobile The UK 177 Tele2 Russia CSL New World Mobility Hong Kong Orange The UK 189 Netcom Norway 201 Sprint The US 178 Telenor Serbia 190 Nextel Brazil 202 Orange Slovakia 179 Tigo Colombia 191 Starhub Singapore 203 MTS Ukraine 180 Nedjma Algeria 192 Hutch Thailand 204 Telecom Italia 181 SmarTone Hong Kong 193 Iusacell Mexico 182 Promonte Montenegro 194 Vodafone Hungary 176 The figure below shows the Top 3 MNOs judged on this performance measurement index. Figure 62: Top 3 MNOs Worldwide – MNO Growth vs. Market Growth (2008) Wind Italy 1 life:) Ukraine 2 3 TDC Denmark Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 93
  • 94. Ranking The World’s Best Mobile Operators MNO Strategies Wind Italy Ownership: Wholly owned subsidiary of Weather Investments Launched: 1999 st Subscriber Base: 16.7 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 6.9 percent (2007 to 2008) st Italy Mobile Penetration: 142.8 percent (31 December 2008) st Market Share: 20.3 percent (31 December 2008) Technology: GSM and WCDMA (HSDPA) Market Environment – Italy: • Italians are very receptive to data services; the market’s affinity for data services including GPRS, MMS, and other multimedia services based on 3G/3.5G networks is creating opportunities for operators to increase revenues. • The entrance of virtual mobile network operators has intensified the already existing competition among four major operators. The figure below shows the market share of Italian MNOs during 2006-2008. Figure 63: MNOs’ Market Share – Italy (In Percent, December 2006-December 2008) 43.6% 43.9% 30% 27.1% 27.5% 25% 19.8% 41.8% Market Share (In Percent) 45% 40% 35% 27.7% 20.3% 18.8% 20% 15% 9.5% 9.8% 10.2% Dec-06 Dec-07 Dec-08 10% 5% 0% Month Telecom Italia Wind 3 Italia Vodafone Source: Portio Research Ltd. • • 94 Prepaid subscribers formed over 80 percent of the Italian mobile subscriber base by end-2008; considering the high percentage of prepaid subscribers, the market has high data usage – which is generally not associated with prepaid markets The market has pioneered evolving technologies innovative offerings (triple play; quadruple play, fixed-mobile convergence); and is among the leading markets in mobile television © 2009, Portio Research. All Rights Reserved
  • 95. Ranking The World’s Best Mobile Operators Wind’s Strategies The commencement of operations by 3 Italia intensified the competition in the Italian market. Furthermore, the presence of MNP has aggravated the challenge of winning subscribers in a market where penetration has already crossed 140 percent. Wind is focusing on holding on to market share through attractive pricing and innovative services. Some of the strategies are mentioned below: Figure 64: Wind’s Strategies Strategy Products Targeting user segments • Youth segment: ‘Noi 2 Big’ and ‘Wind Campus’ plans to satisfy high community calling needs • Ethnic groups: ‘Call your country’ plan and ‘Promo Card’ • Competitors’ subscriber base: ‘Passa a Wind’ • Business segment: Attracting low-use business subscribers Encouraging data use • ‘SuperInternet SIM’ cards to cater to data-only needs • BlackBerry Internet Service for the consumer segment • Discount of up to 100 percent on HSPDA devices when opting for flat or semi flat offers Pricing and packaging • Change from data traffic based traffic model to event based pricing model for i-mode mobile e-mail and MMS • Extension of products from consumer segment to business segment • Provision for bundled offers customised according to target groups Source: Portio Research Ltd. • • • • • 29 Targeting community calling needs: Wind Italy offers attractive plans such as ‘Noi 2 Big’ consisting of a bundle of 1,000 minutes per month for calling chosen numbers at a monthly fee of USD 5 (EUR 4), and ‘Wind Night’ for unlimited calls from 11 pm to 7 am at USD 2.5 (EUR 2.0) per month. Targeting youth segment: The operator targets university students through ‘Wind Campus’ plan – launched in November 2008 – which offers 1,000 minutes and 1,000 SMSs to the campus community at USD 6.3 (EUR 5.0) per month. The plan also enables free of charge web-browsing and provides a blend of voice, SMS, and Internet options especially designed for the youth segment. Rewarding high use: Wind Italy offers ‘Promo Card’ at USD 6.3 (EUR 5.0) per month which enables subscribers to earn a bonus of USD 1.3 (EUR 1.0) for each minute of outgoing calls to be accumulated over a month. Targeting ethnic groups: The ‘Call your country’ option provided by the operator is aimed at increasing the appeal of international calling plans for ethnic groups. The offer was enhanced through the ‘Promo Card’ plan in November 2008. Rewarding subscribers switching to Wind Italy: Under the ‘Passa a Wind’ offer, Wind Italy doubles up the recharge value of a voucher (during the first six months), up to USD 62.5 (EUR 50.0) per month, for consumers switching to Wind Italy via 29 MNP. Source: http://www.windgroup.it/download/investitori/bilanci_eng/Eng_WIND_Group_Consol_31_12_08.pdf © 2009, Portio Research. All Rights Reserved 95 Wind Italy launched ‘Wind Campus’ plan in November 2008 to target university students.
  • 96. Ranking The World’s Best Mobile Operators • Differentiated data offerings:  ‘SuperInternet SIM’ cards to cater to data-only needs: Wind Italy offers a SIM enabled on packet switching traffic only to provide a ‘SuperInternet SIM’ intended for Internet, SMS, MMS, and WAP service consumption.  BlackBerry Internet service for the consumer segment: Through the launch of this service during 2008, the operator tested high-end mobile service offerings on the consumer segment. The operator has increased the appeal of the service by providing easy installation through SMS. Factors Identified Wind Italy Identification of potential target groups Differentiated offerings Pricing and packaging Rewarding loyalty and high use 96 © 2009, Portio Research. All Rights Reserved
  • 97. Ranking The World’s Best Mobile Operators TDC Denmark Ownership: TDC Group Launched: 1992 st Subscriber Base: 3.0 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 5.6 percent (2007 to 2008) st Denmark Mobile Penetration: 120.6 percent (31 December 2008) st Market Share: 47.8 percent (31 December 2008) Technology: GSM and WCDMA (HSDPA) Market Environment – Denmark: • In spite of high penetration levels, the market is growing steadily. • Demand for data services is providing the impetus for growth among the main operators – TDC, Telia Denmark, and Sonofon • 3G services have a widespread presence across the country, with all the major MNOs planning to roll out HSDPA upgrades • Among the European countries, Denmark has displayed impressive uptake of broadband and digital media services, with the analogue switch-off expected by end2009. TDC’s Strategies Figure 65: TDC’s Success Strategies Customised Product Offerings Targeting Business Segment TDC Success Strategy Innovative Services Source: Portio Research Ltd. TDC leads the Danish mobile market accounting for nearly 48 percent of the subscriber base in 2008. The revenues for the Group are primarily constituted by five business segments namely Business Nordic, Fixnet Nordic, Mobile Nordic, YouSee, and Sunrise. © 2009, Portio Research. All Rights Reserved 97
  • 98. Ranking The World’s Best Mobile Operators Figure 66: Revenue by Business Segment – TDC (2008) 13.7% 21.7% 8.3% 22.4% 31.0% Business Nordic Fixnet Nordic 2.9% Mobile Nordic YouSee Sunrise Other activities Source: Portio Research Ltd. In a market having more than 100 percent penetration, the operator has been successful in increasing its subscriber base owing to the following strategies: • Targeting Business Segment: Business Nordic group has catered to the requirements of the business segment effectively by launching various products exclusively for this segment. This includes Turbo 3G services based on HSDPA technology to cater to the demand for mobile e-mail. Business Nordic has also introduced bundled services wherein mobile broadband access (TDC Flex Data) has been bundled with TDC wireless hotspots in airports, trains, hotels, conference centres, cafés, etc. across Denmark. • Customized Product Offerings: Fixnet Nordic introduced various products/offerings targeting the needs of different groups:  Only company in Denmark to introduce unlimited music downloads of more than two million tracks for its broadband and mobile subscribers at no extra charge, via its ‘PLAY’ service in 2008  Owing to the decrease in subscriber base of traditional landline telephony and also to counter migration between mobile and VoIP, Fixnet came up with various flat-rate products. TDC Telefoni (a PSTN subscription) was launched wherein the users enjoyed the choice of call-forwarding and free subscription.  Convergence Product: Fixnet Nordic launched a convergence product ‘Duét’ which bundled landline and a mobile subscription. It also includes an advanced forwarding function between subscribers’ landline and mobiles. The subscriber base for this service reached 371,000 subscribers in 2008. • Innovative Services: Mobile Nordic has continually improved the user experience by introducing new, innovative services for its users. The company launched a new service where the users can view the caller’s name and address even if the contact is not pre-stored in the subscriber’s mobile handset. It also launched a service where the user can see the sender’s name and context of the SMS without opening the inbox. The following table lists the key factors that led to the growth of the operator: 98 © 2009, Portio Research. All Rights Reserved TDC Denmark launched a service where the user can see the sender’s name and context of the SMS without opening the inbox.
  • 99. Ranking The World’s Best Mobile Operators Factors Identified TDC Denmark Targeting business segment Customized product offerings Innovative services © 2009, Portio Research. All Rights Reserved 99
  • 100. Ranking The World’s Best Mobile Operators Vodafone Ireland Ownership: Vodafone Group Launched: 1993 st Subscriber Base: 2.6 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 13.0 percent (2007 to 2008) st Ireland Mobile Penetration: 128.0 percent (31 December 2008) st Market Share: 44.0 percent (31 December 2008) Technology: GSM and WCDMA (HSPA) Market Environment – Ireland: • The market is dominated primarily by three players namely Vodafone, O2, and Meteor. • The Mobile market is witnessing fierce competition owing to the entry of MVNOs. This has caused changes to the wireless landscape, including the failure of Smart Telecom (fourth 3G operator) and the consolidation of Meteor as a mobile arm of Eircom • Mobile broadband is growing fast as a result of flat-rate data plans • The broadband market is quite under-developed compared to other European countries; however, Government efforts to enhance the local loop unbundling is helping the market to register growth, albeit slow Vodafone Ireland’s Strategies Figure 67: Vodafone Ireland’s Success Strategies Attractive Tariff Plans First Time Services Bundled Offerings Vodafone Ireland’s Success Strategies Source: Portio Research Ltd. 100 © 2009, Portio Research. All Rights Reserved
  • 101. Ranking The World’s Best Mobile Operators Vodafone Ireland is the biggest MNO in Ireland with a market share of 44 percent and a subscriber base of 2.6 million at end-2008. Vodafone Ireland has been able to sustain its market position as a result of the following strategies: Figure 68: MNOs’ Market Share - Ireland (2007 & 2008) 2007 32.3% 18.9% 44.5% 4.3% 2008 31.8% 18.6% 44.0% 5.6% Vodafone O2 Meteor 3 Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 101
  • 102. Ranking The World’s Best Mobile Operators • Attractive Tariff Plans: Vodafone Ireland has launched exciting tariff/price plans for its subscribers:  New Perfect Fit 400 and 600 postpaid plans have been launched, wherein the users enjoy the flexibility of calling other Vodafone users free of charge. This plan has lifetime validity and is available to new as well as existing subscribers. Vodafone subscribers can also enjoy the additional benefit of free voicemail.  The company introduced the Prepay tariff - which has no signing or connection fee - for the Polish community. Looking at the vast Polish community in Ireland, Vodafone targeted this group with special tariff plans as Poles considered mobile as their primary means of communication. The subscribers pay USD 0.1 (9 cents) per minute to Polish landline numbers and USD 0.3 (25 cents) per minute to Polish mobile numbers. • First Time Services: The operator has pioneered various new services in Ireland’s wireless market. These include:  Vodafone Mobile Internet: Vodafone Ireland has integrated the Internet and mobile through Vodafone Mobile Internet by partnering with popular websites such as eBay, Google, MySpace, etc., in order to deliver a rich user experience. This service does not require a handset upgrade and a subscriber with a 2.5G/3G handset can use this service for USD 13.8 per 30 month (EUR 9.99 per month).  3G services: Vodafone was the first Irish operator to launch 3G data services and 3G broadband  Vodafone Unlimited Data: The operator launched a flat-rate 3G mobile Internet service. This service is available at USD 77.3 (EUR 49) per month and allows unlimited e-mail and Internet access anytime.  The package also allows subscribers to enjoy Vodafone’s 3G broadband network using HSDPA technology. This service comes at a cost of approximately USD 77.3 (EUR 49) per month offering a 31 speed of 1.2 Mbps.  Sky Mobile TV: The MNO has been the pioneer in launching Mobile TV in this country. The host of services include 24-hour news channels, sports,and entertainment.  The operator also introduced Windows Mobile, which provides remote access to Microsoft Outlook, Word, Excel, PowerPoint, etc. A number of handheld devices support this service. • Bundled Offerings: In order to increase its business subscriber base, Vodafone Ireland has come up with the ‘Vodafone Office’ plan, which is a broadband and phone bundle package. It offers free local and national calls from Vodafone landlines along with the choice of 3 MB or 7.6 MB Vodafone broadband. The following table lists the key factors that have led to the operator’s success: Factors Identified Vodafone Ireland Attractive tariff plans First time services Bundled offerings 30 Source: http://www.vodafone.ie/aboutus/media/press/show/BAU003151.shtml?date=August+26%2c+2007 Source: http://www.vodafone.ie/aboutus/media/press/show/BAU004000.shtml;jsessionid=5DB41A2F1149F816076462D957 56ECC7?date=Tue+May+27+14%3A32%3A00+IST+2008 31 102 © 2009, Portio Research. All Rights Reserved Vodafone Ireland has integrated the Internet and mobile through ‘Vodafone Mobile Internet’ by partnering with popular websites.It has also come up with the ‘Vodafone Office’ plan, which is a broadband and phone bundle package.
  • 103. Ranking The World’s Best Mobile Operators Chapter 7 Performance Measurement 6 – Significance of the MNO © 2009, Portio Research. All Rights Reserved 103
  • 104. Ranking The World’s Best Mobile Operators Performance Measurement 6 – Significance of the MNO Significance of an MNO has been included as a measure of an MNO’s penetration in its market of operation. The factor can be used to evaluate the contribution of an operator to 32 the mobile penetration in a market. However, when using an operator’s market penetration as a measure of its significance we face two problems. First, using this significance performance measurement index may make the evaluation biased in favor of MNOs operating in a market for a longer time. Second, the absence of a normalising factor accounting for the addressable population in the country of operation may not present the full picture, as an operator may have lower market penetration owing to population demographics. The figure below shows the Top 10 MNOs Worldwide based on subscriber market share. Figure 69: Top 10 MNOs Worldwide – Market Share (In Percent, End-2008) 71.7 Market Share (In Percent) 67.4 66.8 65.6 65.0 62.5 61.7 Swisscom 71.9 70 mt:s Serbia 74.7 Maroc Telecom 82.6 80 Telenor Norway 90 60 50 40 30 20 10 TCI Iran Comcel Colombia Telcel Mexico China Mobile Etisalat The UAE Safaricom Kenya 0 Operator Source: Portio Research Ltd. The top 3 players in terms of market share mentoned in the figure above are Safaricom Kenya, Etisalat the UAE and China Mobile. Number of years for their operation on 2G (and above) networks are 13 years, 15 years and 12 years respectively. Formula and Rationale The formula used for the calculation of this performance measurement is given below: Value = Subscriber Base of the MNO Population of the Country (10-74 Years) * No of Years of Network Operation of MNO (2G & Above) 32 Please note: An operator’s market penetration refers to its contribution to the mobile penetration in the country. If there are ‘n’ operators in a country, the sum of their market penetrations will add up to mobile penetration in the country. 104 © 2009, Portio Research. All Rights Reserved
  • 105. Ranking The World’s Best Mobile Operators The formula is intended to normalise MNO scores by taking into account the two aforementioned factors – country demographics and number of years of 2G (and above) operation of an MNO. Also, the ratio of subscriber base of an MNO to the population in 1074 years for the country of operation can be considered as the effective mobile penetration of an operator. This replaces the conventional mobile penetration of an MNO and aims to provide a level playing field for MNOs operating in different markets. Rankings The figure below shows the Top 20 MNOs based on this performance measurement index. Figure 70: Top 20 MNOs Worldwide – Significance of the MNO (2008) 33 Rank 1 to 10 Rank 11 to 20 Mobiltel Bulgaria, 6.0 VIPnet Croatia, 6.0 Movistar Colombia, 6.1 Tunisiana Tunisia, 6.1 VIP Serbia, 6.2 Djezzy Algeria, 6.2 MTS Belarus, 6.2 Claro Peru, 6.2 Globul Bulgaria, 6.3 MTN Iran, 6.4 mt:s Serbia, 6.4 Cosmote Greece, 6.3 2 T-Mobile Montenegro, 6.6 3 Etisalat The UAE, 7.0 4 Comcel Colombia, 7.0 5 Movilnet Venezuela, 7.4 Score 6 Telefonica Peru, 7.4 7 Movistar Venezuela, 7.7 8 Mobily Saudi Arabia, 7.9 9 du The UAE, 10.0 10 1 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement index are given below. 33 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 105
  • 106. Ranking The World’s Best Mobile Operators Table 24: MNOs Worldwide Ranked 1 to 20 – Significance of the MNO (2008) Rank MNO Score Rank MNO Score 1 du The UAE 10.00 2 Mobily Saudi Arabia 7.86 11 Globul Bulgaria 6.32 12 Cosmote Greece 6.28 3 Movistar Venezuela 7.70 4 Telefonica Peru 7.41 13 Claro Peru 6.21 14 MTS Belarus 6.20 5 Movilnet Venezuela 7.35 15 Djezzy Algeria 6.20 6 7 Comcel Colombia 7.02 16 VIP Serbia 6.15 Etisalat The UAE 6.97 17 Tunisiana Tunisia 6.12 8 T-Mobile Montenegro 6.57 18 Movistar Colombia 6.09 9 mt:s Serbia 6.44 19 VIPnet Croatia 6.04 10 MTN Iran 6.39 20 Mobiltel Bulgaria 5.99 Table 25: MNOs Worldwide Ranked 21 to 50 – Significance of the MNO (2008) Rank MNO Score Rank MNO Score 21 Tele2 Lithuania 5.99 36 Movistar Spain 5.80 22 Asiacell Iraq 5.92 37 Telenor Norway 5.78 23 Promonte Montenegro 5.92 38 Pelephone Israel 5.78 24 Digitel Venezuela 5.88 39 Kyivstar Ukraine 5.77 25 Telstra Australia 5.88 40 Smart The Philippines 5.77 26 Zain Iraq 5.87 41 Telefonica Slovakia 5.77 27 Claro Argentina 5.84 42 Cellcom Israel 5.76 28 Vivatel Bulgaria 5.84 43 Starhub Singapore 5.76 29 5.83 44 T-Mobile Czech Republic 5.75 5.83 45 Vodafone New Zealand 5.74 31 Swisscom Switzerland Partner Communications Israel MobiNil Egypt 5.82 46 Omnitel Lithuania 5.74 32 Etisalat Misr Egypt 5.82 47 KPN The Netherlands 5.74 33 Orange Slovakia 5.82 48 Vodafone Ireland 5.74 34 Telecom Italia 5.81 49 Tunicell Tunisia 5.73 35 T-Mobile Croatia 5.80 50 TMN Portugal 5.73 30 106 © 2009, Portio Research. All Rights Reserved
  • 107. Ranking The World’s Best Mobile Operators Table 26: MNOs Worldwide Ranked 51 to 170 – Significance of the MNO (2008) Rank MNO Rank MNO Rank MNO 51 Tele2 Croatia 91 Vodafone Spain 131 Sunrise Switzerland 52 O2 Czech Republic 92 Wind Italy 132 MegaFon Russia 53 Movistar Chile 93 Telenor Serbia 133 3 The UK 54 Vodafone Egypt 94 MTS Russia 134 Vivo Brazil 55 SingTel Singapore 95 Zain Jordan 135 O2 The UK 56 DNA Finland 96 Mobistar Belgium 136 life:) Ukraine 57 Vodacom South Africa 97 Vodafone Italy 137 DiGi Malaysia 58 98 Polkomtel Poland 138 TIM Brasil 99 Orange Spain 139 Globacom Nigeria 60 Velcom Belarus Telecom Personal Argentina Vodafone Romania 100 M1 Singapore 140 VimpelCom Russia 61 T-Mobile Hungary 101 China Mobile 141 Avea Turkey 62 O2 Ireland 102 T-Mobile Germany 142 Orange Switzerland 63 Telia Sonera Sweden 103 AIS Thailand 143 Verizon The US 64 SK Telecom South Korea 104 Elisa Finland 144 AT&T The US 65 T-Mobile Slovakia 105 Telcel Mexico 145 Sonofon Denmark 66 Maxis Malaysia 106 Optimus Portugal 146 67 Mobilkom Austria 107 NTT DOCOMO Japan 147 68 108 Chunghwa Taiwan 148 109 Meditel Morocco 149 Telkomsel Indonesia 70 Vodafone Greece Telecom Mobile New Zealand Turkcell Turkey SFR France Vodafone The Netherlands Globe The Philippines 110 Celcom Malaysia 150 DTAC Thailand 71 Entel PCS Chile 111 HTIL Hong Kong 151 Claro Brazil 72 TDC Denmark 112 PTC Poland 152 Oi Brazil 73 Orange Poland 113 Vodafone Germany 153 Zain Nigeria 74 Proximus Belgium 114 Orange France 154 Vodafone The UK 75 T-Mobile The Netherlands 115 MTN Syria 155 Orange The UK 76 T-Mobile Austria 116 Telia Denmark 156 T-Mobile The UK 77 MTS Ukraine 117 MTN South Africa 157 Claro Chile 78 True Move Thailand 118 3 Italia 158 Movistar Mexico 79 Meteor Ireland 119 Pannon Hungary 159 Bell Mobility Canada 80 Telenor Pakistan 120 FeT Taiwan 160 KDDI Japan 81 Safaricom Kenya 121 KTF South Korea 161 Cell C South Africa 82 Vodafone Portugal 122 MTN Nigeria 162 O2 Germany 83 Base Belgium 123 BITE Lithuania 163 Sun The Philippines 84 Nedjma Algeria 124 Optus Australia 164 Vodafone Turkey 85 Wind Hellas Greece 125 Vodafone Hungary 165 MTN Afghanistan 86 Vodafone Czech Republic 126 Tele2 Sweden 166 PCCW Mobile Hong Kong 87 Telia Sonera Finland 127 Orange Austria 167 E-Plus Germany 88 Movistar Argentina 128 168 Rogers Canada 89 TCI Iran 129 169 LG Telecom South Korea 90 Maroc Telecom Morocco 130 Taiwan Mobile CSL New World Mobility Hong Kong Netcom Norway 170 3 Sweden 59 69 © 2009, Portio Research. All Rights Reserved 107
  • 108. Ranking The World’s Best Mobile Operators Table 27: MNOs Worldwide Ranked 171 to 204 – Significance of the MNO (2008) Rank MNO Rank MNO Rank 171 Tigo Colombia 183 SmarTone Hong Kong 195 172 Sprint The US 184 Zain Kenya 196 Reliance Communication India Vodafone India 173 Telenor Sweden GrameenPhone Bangladesh Mobilink Pakistan 185 Tele2 Russia 197 Iusacell Mexico 186 Excelcomindo Indonesia 198 Sibir Telecom Russia 187 T-Mobile The US 199 Hutch Thailand 176 3 Austria 188 Vodacom DR Congo 200 Idea Cellular India 177 Telus Mobility Canada 189 China Unicom 201 Nextel Peru 178 Bouygues France 190 Banglalink Bangladesh 202 Nextel Argentina 179 Vodafone Australia 191 Brasil Telecom 203 Tigo DR Congo 180 Zain Sudan 192 Bharti Airtel India 204 Nextel Brazil 181 MTN Sudan 193 Celtel DR Congo 182 SoftBank Japan 194 Beeline Ukraine 174 175 MNO The figure below shows the Top 3 MNOs judged on this performance measurement. Figure 71: Top 3 MNOs Worldwide – Significance of the MNO (2008) du The UAE 1 Mobily Saudi Arabia 2 3 Movistar Venezuela Source: Portio Research Ltd. 108 © 2009, Portio Research. All Rights Reserved
  • 109. Ranking The World’s Best Mobile Operators MNO Strategies du The UAE Ownership: UAE Federal Government (40 percent), Mubadala Development Company (20 percent), TECOM Investments (20 percent) and public shareholders (20 percent) Launched: 2006 st Subscriber Base: 2.5 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 66.7 percent (2007 to 2008) st Market Share: 25.3 percent (31 December 2008) st UAE Mobile Penetration: 214.2 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – The UAE: • Population – 4.6 million; population in 10-74 year age-group – 3.9 million (31 Decmber 2008) • Mobile market comprises of two operators – Etisalat and du • Wireless market with highest penetration worldwide • st Etisalat’s monopoly broken by du Astronomical Mobile Penetration This astronomical mobile penetration figure (214.2 percent) could possibly be skewed by a massive and fluctuating level of migrant workers who enter the UAE and – while recorded in prepaid penetration figures (when they purchase a SIM) – are not necessarily included in the population statistics. Data retrieval from the UAE is one of the markets that prove notoriously difficult and, in the absence of knowing how long a SIM card is considered to be active for; we have used official population and subscriber figures at face value to arrive at our conclusions. Please be aware of these factors when studying this report. du’s Strategies du is one of two leading telecom players in the UAE. The brand ‘du’ was unveiled by Emirates Integrated Telecommunications Company (ETIC), the UAE’s second largest telecom provider, in February 2006. The company launched wireless services across the UAE at the start of February 2007, and ever since has witnessed a rapid surge in its subscriber numbers – surpassing almost 1.5 million users by end-2007 (after just ten months of operations). The launch of the brand has been aided by the UAE’s favourable demographic factors which comprise a large chunk of the target population. Also, the market is a huge attraction for 34 immigrants. It is estimated that The UAE population will reach 5.7 million by 2015. The following figure shows the demographic break-out of The UAE market. 34 Source: http://www.census.gov/ipc/www/idb/country/aeportal.html#DI © 2009, Portio Research. All Rights Reserved 109 du has witnessed a rapid surge in its subscriber numbers adding nearly a million subscribers in 2008.
  • 110. Ranking The World’s Best Mobile Operators Figure 72: Demographic Break-out – The UAE Worldwide (End-2008) 84.9% 0.2% 14.9% 0-9 years 10-74 years 75 and over Source: CIA – The World Factbook The figure below highlights the factors behind du’s success. Figure 73: du’s Key Success Factors Summarized Worldwide Strategic Launch Time First Mover Advantage du’s Success Strategy Range of Services Offered Pricing Accessibility and Usability Strategic Marketing Source: Portio Research Ltd. Strategic Launch Time When the du brand was launched by ETIC in the beginning of 2006, the national economy was witnessing a boom. The UAE market was also in the process of establishing itself as an international hub for commerce, tourism, services, etc. Furthermore, consumer demands 110 © 2009, Portio Research. All Rights Reserved
  • 111. Ranking The World’s Best Mobile Operators and ambitions were rising owing to the growth of the young population in this market. All these factors helped to create a favourable environment for the uptake of du’s services. First Mover Advantage du has been the pioneer in introducing various services in to the UAE’s wireless market. Such regional firsts include Pay by the Second, International Video Calling, Mobile TV, Mobile Payments, and Mobile portal – ‘MyWorld’. It was also first to launch the Number Booking service, which facilitated the entire process of getting a preferred number without going through the hassle of queuing up in the shops. Figure 74: du’s First-time Products in The UAE Market Pay by the Second Mobile Portal – My World Mobile Payments du’s First Time Products International Video Calling Mobile TV Source: Portio Research Ltd. Accessibility and Usability du’s self-care service includes useful features that enhance the usability for its customers. Through this service, users have the choice of selecting the products and services as it suits, and have control over their monthly and Pay as You Go plans. Besides helping subscribers keep track of their monthly plan bills and total recharge per month, the self-care service also allows them to register for mobile payments, activate as well as set their Me&Mine numbers, and buy SMS and data bundles, etc. The operator has also ventured into partnerships with big retailers in the UAE to increase its distribution network and enhance the overall accessibility for the subscribers. du has been extensively working with various Government departments to increase the coverage area, as a measure to address the concern of network coverage faced by all players in The UAE. Strategic Marketing du’s marketing strategy focussed on a lot of initiatives in order to gain a strong foothold in a saturated market where playing only on price differentiation would be ineffective. The operator took the following initiatives in this direction: • Number Booking campaign: Before the launch of its wireless services, du’s promotional strategy included the launch of its Number Booking campaign in November 2006. This campaign focused on the importance of mobile numbers for users. It gave subscribers the choice of switching to a new operator without changing their existing number. During © 2009, Portio Research. All Rights Reserved 111 du has ventured into partnerships with big retailers in the UAE to increase its distribution network.
  • 112. Ranking The World’s Best Mobile Operators this campaign, users received a passcode for mobile handsets and du line (with the existing number) from any du authorized dealer. The cost of retaining the same number 35 with prefix-055 was nearly USD 27 (AED 100). As a part of its promotional strategy, du came up with exciting introductory offers. The operator provided a SIM for USD 15 (AED 55) loaded with USD 14.7 (AED 54) worth of talk time – which meant that it effectively cost only a nominal USD 0.3 (AED 1) to the 36 subscriber. Me & Mine product: To target specific market segments, du came up with the Me & Mine product. Keeping in mind that the UAE is host to a large immigrant population, this offer allowed subscribers a 10 percent discount on two selected international numbers, without any annual fee. Free incoming calls during Haj: With the Haj pilgrimage being one of the most important and special moments in the life of Muslims, du provided the facility of free unlimited incoming calls to all its subscribers (postpaid and prepaid) roaming in Saudi Arabia between 27 November – 20 December 2008. This free facility required no additional registration or subscription charge. Other promotional campaigns: This included a joint promotion with Barclaycard wherein the operator offers a free SIM card and a fixed credit to a new credit card applicant. • • • • Figure 75: du’s Strategic Marketing Initiatives Number Booking Campaign Joint Promotions (e.g. Barclays) du’s Marketing Strategy Me & Mine Product Free Incoming Calls during Haj Source: Portio Research Ltd. 35 36 Source: http://www.du.ae/en/about/press-releases/du-launches-retain-your-numbere2809d-campaign.html Source: http://www.almalcapital.com/files/news_pdf/Initial%20Telecoms%20Sector.pdf 112 © 2009, Portio Research. All Rights Reserved
  • 113. Ranking The World’s Best Mobile Operators Pricing du has never focused on price differentiation as it could be easily replicated by the incumbent player (Etisalat) and would eventually lead to margin losses for both. However, the tactic to introduce “Thank You” among pre-registrants seems to have paid off for the operator. The highly lucrative subscriber offer, designed to compel them to switch operators, includes the following: • The postpaid monthly subscription charges are waived for three years and it does not include any service bundle • The prepaid subscribers need not pay any yearly subscription for two years • Subscribers are imparted with free credit equivalent to their connection fee Range of Services Offered Owing to the technological advancements worldwide and the uptake of these technologies by various age groups, du has also initiated the following services for the UAE market: • du partnered with Nokia Intellisync to provide a wireless e-mail platform, which is compatible with various devices and offers advanced functionality. Also, it will help in providing solutions to a range of sectors from consumer to SME to large corporations. • Owing to the proliferation and rapid uptake of its video conferencing over IP service (Telepresence), du is also planning to launch the next-generation video conferencing facilities for its business users. The operator plans to run this service in partnership with application provider MASERGY and Interoute (a European telecom carrier). This service will enable business users to have virtual meetings and overcome the cost of travel. The following table lists the key factors that have led to the operator’s success: Factors Identified du The UAE Strategic launch time First mover advantage Accessibility Strategic marketing Pricing Range of services © 2009, Portio Research. All Rights Reserved 113 du partnered with Nokia Intellisync to provide a wireless e-mail product and solutions to enterprise segment.
  • 114. Ranking The World’s Best Mobile Operators Movistar Venezuela Ownership: Owned by Telefónica Móviles Launched: 1991 st Subscriber Base: 10.6 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 12.2 percent (2007 to 2008) st Venezuela Mobile Penetration: 108.7 percent (31 December 2008) st Market Share: 36.9 percent (31 December 2008) Technology: CDMA2000 1x, EV-DO, GSM and WCDMA (HSDPA) Market Environment – Venezuela: • Population – 26.4 million; population in 10-74 year age-group – 20.5 million (31 Decmber 2008) • Boasts one of the highest mobile penetrations in Latin America. Country’s ratio of 37 mobile handsets to fixed line is nearly 4.5:1 (September 2008). • Strong growth in subscriber numbers despite the country’s penetration surpassing the 100 percent mark. • CDMA remains the leading technology, though MNOs are turning to GSM • Initial dominance of prepaid service in the country; however, focus is gradually shifting towards postpaid. st Figure 76: MNOs’ Subscriber Base – Venezuela (In Million, End-2008) 14 11.9 Subscriber Base (In Million) 12 10.6 10 8 6 4.7 4 2 0 Digitel Movistar Movilnet Operator Source: Portio Research Ltd. 37 Source: http://www.budde.com.au/Research/Venezuela-Telecoms-Mobile-Broadband-and-Forecasts.html 114 © 2009, Portio Research. All Rights Reserved
  • 115. Ranking The World’s Best Mobile Operators Movistar Venezuela’s Strategies Figure 77: Movistar’s Success Strategies Technology First Mover Movistar Success Strategies Focus on Network Coverage Promotional Offers Source: Portio Research Ltd. Movistar, formerly Telcel Bellsouth, is the second largest mobile operator in Venezuela after Movilnet. Both Movistar and Movilnet have strong subscriber bases (in excess of 10 million); however, owing to the entry of Digitel, the market has been subject to further competition, and the market share of the new player has reached a substantial twenty percent within two years of its launch. The market share of the mobile operators in Venezuela during 20072008 is depicted in the figure below: © 2009, Portio Research. All Rights Reserved 115
  • 116. Ranking The World’s Best Mobile Operators Figure 78: MNOs’ Market Share – Venezuela (2007 & 2008) 38 2007 39.9% 20.4% 39.6% 2008 42.8% 20.3% 36.9% Movistar Movilnet Digitel Source: Portio Research Ltd. With the entry of Digitel, the competition has intensified and this has led to a reduction in Movistar’s market share, it has been able to increase its subscriber base by nearly 12 percent in the year 2008 over the corresponding 2007 figure owing to the following strategies. • 38 Technology First Mover: Movistar offered better technology to overcome the rising challenge faced by the new entrant as well as to sustain the competition provided by leading player, Movilnet. The steps taken by the operator to tap the high-end of the market include: • Switch to GSM: Venezuela is one of the few countries in the Latin American region with CDMA as the leading technology. However, operators are now switching to GSM, with Movistar being the first. The operator deployed its GSM network in December 2006 in some specific areas; however, the widespread commercial coverage eventually took place at the beginning of 2007. The leading operator Movilnet launched its GSM network in May 2008. This helped the MNO to increase its subscriber base during the interim. • 3G/3.5G/HSDPA Uptake: The first 3G UMTS mobile service in the country was launched by Movistar in December 2008, giving it first mover Please note: Figures may not add to 100 percent because of rounding-off errors. 116 © 2009, Portio Research. All Rights Reserved
  • 117. Ranking The World’s Best Mobile Operators advantage. The operator commenced services in the Greater Caracas, region offering speeds up to 1Mbps over a 3.5G network, and then gradually expanded services to the central and western regions. • • Focus on Network Coverage: Movistar is making huge network investments in order to expand its capacity and enhance its overall coverage. • The MNO made an investment worth USD 10 million in the initial three months of 2008, in order to deploy 40 GSM radio base stations in 39 Venezuela, mainly to boost remote coverage. Further, the operator deployed 11 GSM cells in west Venezuela and installed an additional 45 to enhance coverage. • Movistar Venezuela also extended its fibre-optic network, with an additional 365 km of cable linking various cities, to provide better mobile and fixed line services. Another 1,000 UMTS base stations are expected to be deployed in the country. In the first phase of 3.5G deployment, the operator made an investment worth USD 25.6 million (VEF 55). An additional amount worth approximately USD 105 million (VEF 225 million) is expected to be spent in 40 order to have nationwide coverage. Promotional Offers: The operator is trying to win subscribers through its promotional offers/differentiated offerings. • Advantage for Prepay Telpago subscribers: The MNO has introduced a promotional offer wherein the subscribers can avail a bonus worth 300, 650 or 1,000 free seconds on recharge of USD 9.3, 18.6, and 27.9 (VEF 20, VEF 40, and VEF 60) respectively. In the case of online recharging, the user 41 bonus doubles. • Anniversary month offer: In order to celebrate the Movistar brand, the operator came up with a lucrative offer wherein subscribers on purchasing specific handsets enjoyed the benefit of 500 SMS, 2,000 seconds (voice call), 7 MB Internet traffic, etc. The promotional offer was available during 42 March-April 2009. • With the launch of 3.5G services, the operator intends to expand its portfolio of value added services. The following table lists the key factors that led to the proliferation of the operator: Factors Identified Movistar Venezuela Technology first mover Focus on network coverage Promotional offers 39 Source: http://marketmettle.com/knowtelefonica/31-telefonicawatch-issue-200803 Source: http://www.telegeography.com/cu/article.php?article_id=26491 41 Source: http://wirelessfederation.com/news/14944-movistar-launches-promotional-offer-for-telpago-subscribersvenezuela/ 42 Source: http://wirelessfederation.com/news/14880-movistar-celebrates-anniversary-month-launches-promotionvenezuela/ 40 © 2009, Portio Research. All Rights Reserved 117 The first 3G UMTS mobile service in the country was launched by Movistar in December 2008, giving it first mover advantage.
  • 118. Ranking The World’s Best Mobile Operators Mobily Saudi Arabia Ownership: Public Investors (40 percent), Institutional Investors (33 percent) and Etisalat (27 percent) Launched: 2005 st Subscriber Base: 14.8 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 34.5 percent (2007 to 2008) Saudi Arabia Mobile Penetration: 139.6 percent st Market Share: 41.2 percent (31 December 2008) Technology/coverage: GSM and WCDMA (HSPA) Market Environment – Saudi Arabia: • Population – 28.1 million; population in 10-74 year age-group – 20.3 million (31 Decmber 2008) • Strong growth in subscriber numbers • 3.5G networks operational in the country • Third national GSM player joined STC and Mobily in August 2008 st Mobily’s Strategies Mobily, the trading name of Etihad Etisalat Company, is the second largest operator in Saudi Arabia and started operations in May 2005. Services offered by Mobily fall under two headings, namely Personal and Business. The Personal division caters to the needs of subscribers by offering prepaid and postpaid plans, 3.5G solutions, messaging, and data solutions, to name a few. While the Business division targets corporate clients with its BlackBerry, bulk SMS and Mobily connect business services. Mobily broke Saudi Telecom’s wireless monopoly by winning the Kingdom’s second GSM license. The operator has been able to secure a market share of 41 percent (by end 2008) within four years of launch. 118 © 2009, Portio Research. All Rights Reserved
  • 119. Ranking The World’s Best Mobile Operators Figure 79: MNOs’ Market Share – Saudi Arabia (2007 & 2008) 2007 60.0% 40.0% 2008 52.8% 41.2% 6.0% Mobily STC Zain Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 119
  • 120. Ranking The World’s Best Mobile Operators The figure below shows the key success factors for Mobily Saudi Arabia. Figure 80: Mobily’s Success Factors Mobily’s Success Factors First Mover Key Partnership Pricing Source: Portio Research Ltd. First Mover Mobily has been the pioneer in many new services in Saudi Arabia, including: • Value added services: Value added services offered by the company include MMS, location based services (LBS), and international roaming for prepaid SIM cards along with GPRS and GPRS EDGE roaming. It also introduced a ‘call me’ service, which allows disconnected connections to send free SMS. • Mobily Business and BlackBerry Service: A business brand concept was first introduced by Mobily in the Saudi market. The operator came up with ‘Mobily Business’, which is targeted at the corporate sector, and is completely different from the MNO’s consumer offering. This also led to the introduction of BlackBerry services for the first time in Saudi Arabia – offered by Mobily in partnership with Research in Motion (RIM) and Emitac Mobile Solutions (EMS). The operator also introduced attractive price plans targeted at corporate clientele, which helped it to add big names such as Saudi Arabian Agricultural Bank (SABB), Samba Financial Group, and Saudi Pepsi Cola to its client list. • High End Services: With the introduction of its 3.5G network in June 2006, the operator enjoyed the first mover advantage of offering 3G services. As a result, the Saudi market was host to services such as video calling, multiplayer gaming, mobile TV, etc. By end2007, Mobily had a 3G subscriber base of 3 million which increased to 4.5 million by end-2008. Recently, it has upgraded its network to 3.75G status. 120 © 2009, Portio Research. All Rights Reserved Mobily Saudi Arabia came up with ‘Mobily Business’ targeting the corporate sector.
  • 121. Ranking The World’s Best Mobile Operators Figure 81: Mobily’s First Time Services Value Added Services Mobily’s First Time Services Mobily Business and BlackBerry Service 3.5G Network Source: Portio Research Ltd. Key Partnership Etisalat has strategically used the direct and indirect sales channels to establish its brand (Mobily) in the Saudi market. This also aided Mobily to achieve its sales and revenue targets in 2006. Currently, Mobily’s revenues are primarily generated from voice. However, with the subscriber focus increasing towards data services, the company is trying to capitalise on this segment. For instance, Mobily ventured into a partnership with Bayanat Al-Oula – a leading Data service provider in Saudi Arabia – for approximately USD 400 million in September 2007. This collaboration helped Mobily increase its subscriber numbers via high quality data communication services. Bayanat Al-Oula became a subsidiary of Mobily Saudi Arabia 43 following an acquisition in March 2008. Figure 82: Subscriber Base – Mobily (In Million, 2006-2008) 14.8 16 Subscriber Base (In Million) 14 11.0 12 10 8 6.0 6 4 2 0 2006 2007 2008 Year Source: Portio Research Ltd. 43 Source: https://www.zawya.com/story.cfm/sidZAWYA20080318075716/SAR%201.5b%20Mobily%20acquisition%20of%20B ayanat%20approved © 2009, Portio Research. All Rights Reserved 121
  • 122. Ranking The World’s Best Mobile Operators Pricing Mobily has tried to play on the pricing aspect in order to create a strong foothold in the market and gain a substantial market share. As a measure to diminish the effect of churn and also to ramp up its market share against the entry of Zain, the operator introduced lucrative offers including free WiMAX installation and modems, cheap call rates, and also established a roaming alliance with Etisalat in the UAE and Egypt. Also mindful of the importance that the Haj pilgrimage holds in the life of Muslims, Mobily offered a special range of initiatives including: • The Rihal prepaid package introduced by the operator during the Haj period, came at an attractive price of USD 13.3 (SAR 50), providing credit worth USD 13.3 (SAR 50). Also, subscribers were afforded the flexibility of calling a particular country at reduced prices, 44 just by sending the country’s dialling code to 1100 via an SMS. • Free high speed Internet connectivity through Wi-Fi was offered to Haj pilgrims. • National and International call rates were heavily subsided for one month, with call provision for as low as USD 0.03 to desired numbers. • Prepaid subscribers were entitled to up to 70 percent free credit on top-ups of amounts 45 greater than USD 16 (SAR 60) for two weeks. In order to make a mark in the Mobile TV segment, Mobily came up with an ‘unlimited’ package for mobile television. This initiative came after the success of its flat rate unlimited mobile Internet package. The following table summarizes the key factors attributable to the success of the operator: Factors Identified Mobily Saudi Arabia First mover Key partnership Pricing 44 45 Source: http://www.mobily.com.sa/portalu/wps/wcm/connect/EE/home/About+EE/Company+news/en/News071 Source: http://comm.ae/2009/01/11/price-wars-in-the-kingdom/ 122 © 2009, Portio Research. All Rights Reserved Mobily came up with an ‘unlimited’ package for mobile television to push mobile video services.
  • 123. Ranking The World’s Best Mobile Operators Chapter 8 Performance Measurement 7 – Successful Growth of Revenue from Data Services © 2009, Portio Research. All Rights Reserved 123
  • 124. Ranking The World’s Best Mobile Operators Performance Measurement 7 – Successful Growth of Revenue from Data Services Telecom markets worldwide are experiencing a decline in ARPU. The decline can be attributed to a number of factors. In emerging markets, this is primarily owing to a large portion of subscriber additions coming from low-income groups; low consumer awareness about value added services and low affordability of service-capable handsets. In developed markets, there has been a decline in service pricing due to increasing competition and voice services have a reached a point of saturation in terms of revenue generation. This has resulted in reduction in contribution of voice revenue to the total revenue. The decline in voice revenue as a percentage of service revenue worldwide is depicted in the figure below. Figure 83: Voice Revenue as a Percentage of Service Revenue – Worldwide (In Percent, 20042013F) Voice Revenue as a Percentage of Service Revenue (In Percent) 100 87.2 85.6 83.9 81.1 80 78.8 76.4 74.0 71.7 69.5 67.3 60 40 2004 2005 2006 2007 2008 2009F 2010F 2011F 2012F 2013F Year Source: Portio Research Ltd. F – Forecasted With increasing pressure on voice services, operators are looking for ways to increase nonvoice ARPU. Efforts have been made by operators in developed as well as emerging markets to find products and services which can enable them to stem the decline in ARPU. The operators in developed markets have leveraged high-speed networks to provide multimedia services; whereas in low-ARPU markets – understanding the constraints of the availability of high-end handsets – MNOs have focused on innovating with service offerings and are providing text-based data services and ring-back tones. The importance of data services in increasing ARPU makes it imperative to track the popularity of data services among the subscriber base of an MNO and to study key success strategies. Formula and Rationale The formula used for the calculation of this performance measurement is given below: Value = 124 Data Revenue as a Percentage of Total Revenue * Market Share Mobile Penetration of the Country © 2009, Portio Research. All Rights Reserved
  • 125. Ranking The World’s Best Mobile Operators The success of MNOs in implementing data services may be evident by observing the share of data revenues in total revenues. However, the selection of data revenue as a percentage of total revenues will not fairly reward the vision and innovation shown by an MNO in implementing data services successfully in markets where overall penetration is low. The penetration factor is relevant because it is easy for MNOs to popularise data services in markets with high mobile penetration. This enables these services to reach a critical mass of subscribers necessary to build a profitable business model. The advantage can be due to a combination of factors, such as the availability of data service capable handsets with the subscribers and an increase in consumer demand for data services with maturing of markets. However, for operators to launch in markets with low mobile penetration they have to be more innovative with the data services, as high-end data services generally do not gain much traction in these markets. Therefore, most successful data services employed by MNOs in markets with low penetration have been customised according to market needs – be it SMS-based mobile banking and remittance transfer services in The Philippines and Kenya, location-based services in South Africa, or ring-back tones in many African markets. Rankings The figure below shows the Top 20 MNOs based on this performance measurement index. Figure 84: Top 20 MNOs Worldwide – Data Revenue Measure (2008) 46 Rank 1 to 10 Rank 11 to 20 SingTel Singapore, 6.5 Vodafone Ireland, 6.5 Swisscom Switzerland, 6.5 Claro Peru, 6.5 Orange France, 6.5 Vodafone New Zealand, 6.6 Telecom Mobile New Zealand, 6.7 KDDI Japan, 6.8 SK Telecom South Korea, 6.9 GrameenPhone Bangladesh, 7.0 1 Telcel Mexico, 7.1 MTN Syria, 7.3 2 Telenor Norway, 7.1 3 Telefonica Peru, 7.2 4 Safaricom Kenya, 8.0 5 China Mobile, 8.2 Score 6 Globe The Philippines, 8.2 7 NTT DOCOMO Japan, 8.5 8 Tel komsel Indonesia, 8.6 9 Smart The Philippines, 10.0 10 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement index are given below. 46 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 125 Successful data services employed by MNOs in markets with low penetration have been customised according to market needs.
  • 126. Ranking The World’s Best Mobile Operators Table 28: MNOs Worldwide Ranked 1 to 20 – Data Revenue Measure (2008) Rank MNO Score Rank 1 Smart The Philippines 10.00 11 2 Telkomsel Indonesia 8.60 12 3 NTT DOCOMO Japan 8.46 13 4 Globe The Philippines 8.23 14 5 China Mobile 8.16 6 Safaricom Kenya 7 MTN Syria 8 MNO GrameenPhone Bangladesh SK Telecom South Korea Score 7.01 6.91 6.80 15 KDDI Japan Telecom Mobile New Zealand Vodafone New Zealand 7.99 16 Orange France 6.54 7.34 17 Claro Peru 6.53 Telefonica Peru 7.21 18 Swisscom Switzerland 6.51 9 Telenor Norway 7.09 19 Vodafone Ireland 6.49 10 Telcel Mexico 7.07 20 SingTel Singapore 6.48 6.65 6.61 Table 29: MNOs Worldwide Ranked 21 to 50 – Data Revenue Measure (2008) Rank Score Rank MNO Score 21 Mobilkom Austria 6.45 36 MobiNil Egypt 6.19 22 Telstra Australia 6.44 37 Excelcomindo Indonesia 6.17 23 Proximus Belgium 6.43 38 Movistar Venezuela 6.16 24 Zain Iraq 6.42 39 Rogers Canada 6.11 25 Vodafone Egypt 6.38 40 Netcom Norway 6.10 26 Maroc Telecom Morocco 6.37 41 Optus Australia 6.09 27 KPN The Netherlands 6.36 42 mt:s Serbia 6.08 28 TCI Iran 6.35 43 Orange Slovakia 6.06 29 Movilnet Venezuela 6.35 44 T-Mobile Croatia 6.05 30 MTS Belarus 6.32 45 Banglalink Bangladesh 6.04 31 Turkcell Turkey 6.30 46 AT&T The US 5.99 32 SoftBank Japan 6.28 47 Telia Sonera Sweden 5.97 33 Comcel Colombia 6.22 48 Velcom Belarus 5.97 34 TDC Denmark 6.22 49 T-Mobile Slovakia 5.96 35 126 MNO Maxis Malaysia 6.21 50 KTF South Korea 5.95 © 2009, Portio Research. All Rights Reserved
  • 127. Ranking The World’s Best Mobile Operators Table 30: MNOs Worldwide Ranked 51 to 170 – Data Revenue Measure (2008) Rank MNO Rank MNO Rank MNO 51 Etisalat The UAE 52 T-Mobile Hungary 91 MTN Iran 131 Orange The UK 92 Omnitel Lithuania 132 FeT Taiwan 53 Verizon The US 54 Asiacell Iraq 93 Digitel Venezuela 133 Telenor Serbia 94 Vodafone Portugal Vodafone The Netherlands Zain Sudan 134 M1 Singapore 55 Telecom Italia 95 135 DNA Finland 56 T-Mobile Czech Republic 96 136 Entel PCS Chile 57 SFR France 58 O2 Czech Republic 97 Celtel DR Congo 137 Vodafone Turkey 98 Vodacom DR Congo 138 T-Mobile The UK 59 Telus Mobility Canada 99 MTN Afghanistan 139 Zain Kenya 60 Vodafone Germany 100 Bharti Airtel India 140 Pelephone Israel 61 Vodacom South Africa 101 MTN Sudan 141 Vivo Brazil 62 O2 The UK 102 Vodafone India 142 Mobilink Pakistan 63 O2 Ireland 103 Telia Denmark 143 Etisalat Misr Egypt 64 China Unicom 104 AIS Thailand 144 MTS Ukraine 65 Orange Poland 105 DiGi Malaysia 145 T-Mobile Montenegro 66 Movistar Spain 106 146 Movistar Colombia 67 Telia Sonera Finland 107 147 Meditel Morocco 68 Djezzy Algeria 108 148 Meteor Ireland 69 Tunicell Tunisia 109 149 DTAC Thailand 70 Tunisiana Tunisia 110 150 Taiwan Mobile 71 VIPnet Croatia 111 151 Vodafone Romania 72 Elisa Finland 112 Vodafone Italy CSL New World Mobility Hong Kong Tele2 Lithuania Telecom Personal Argentina Tigo DR Congo Reliance Communication India Tele2 Sweden 152 E-Plus Germany 73 Polkomtel Poland 113 MTN South Africa 153 Orange Switzerland 74 T-Mobile Austria 114 Chunghwa Taiwan 154 Vodafone Czech Republic 75 Bell Mobility Canada 115 Kyivstar Ukraine 155 Telenor Sweden 76 Mobiltel Bulgaria 116 Globul Bulgaria 156 O2 Germany 77 T-Mobile Germany 117 Movistar Mexico 157 Promonte Montenegro 78 Pannon Hungary 118 Movistar Chile 158 Optimus Portugal 79 Mobistar Belgium 119 Vodafone Spain 159 Vodafone Hungary 80 TMN Portugal 120 Cellcom Israel 160 BITE Lithuania 81 Zain Jordan 121 Mobily Saudi Arabia 161 MTN Nigeria 82 Celcom Malaysia 122 Starhub Singapore 162 Claro Brazil 83 Claro Argentina 123 Sprint The US 163 Avea Turkey 84 Orange Austria 124 MTS Russia 164 T-Mobile The US 85 PTC Poland 125 Base Belgium 165 Telenor Pakistan 86 Movistar Argentina 126 HTIL Hong Kong 166 Bouygues France 87 T-Mobile The Netherlands 127 Sunrise Switzerland 167 VimpelCom Russia 88 Vodafone The UK 128 Vodafone Australia 168 Orange Spain 89 Sonofon Denmark 129 169 TIM Brasil 90 Sun The Philippines 130 Idea Cellular India Partner Communications Israel 170 MegaFon Russia © 2009, Portio Research. All Rights Reserved 127
  • 128. Ranking The World’s Best Mobile Operators Table 31: MNOs Worldwide Ranked 171 to 204 – Data Revenue Measure (2008) Rank MNO Rank MNO Rank MNO 171 Cosmote Greece 172 Wind Italy 183 Tele2 Croatia 195 VIP Serbia 184 LG Telecom South Korea 196 3 Sweden 173 174 True Move Thailand 185 Cell C South Africa 197 Nextel Peru 3 Italia 186 3 Austria 198 Tele2 Russia 175 Zain Nigeria 187 Vodafone Greece 199 Beeline Ukraine 176 SmarTone Hong Kong 188 Vivatel Bulgaria 200 Brasil Telecom 177 life:) Ukraine 189 Wind Hellas Greece 201 Nextel Argentina 178 PCCW Mobile Hong Kong 190 Telefonica Slovakia 202 Sibir Telecom Russia 179 Globacom Nigeria 191 du The UAE 203 Hutch Thailand 180 Claro Chile 192 Iusacell Mexico 204 Nextel Brazil 181 Oi Brazil 193 Tigo Colombia 182 3 The UK 194 Nedjma Algeria The figure below shows the Top 3 MNOs judged on this performance measurement. Figure 85: Top 3 MNOs Worldwide – Data Revenue Measure (2008) Smart The Philippines 1 Telkomsel Indonesia 2 3 NTT DOCOMO Japan Source: Portio Research Ltd. 128 © 2009, Portio Research. All Rights Reserved
  • 129. Ranking The World’s Best Mobile Operators MNO Strategies Smart Communications The Philippines Ownership: Philippine Long Distance Company (PLDT) Launched: 1999 st Subscriber Base: 35.2 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 17.3 percent (2007 to 2008) st Market Share: 52.0 percent (31 December 2008) st The Philippines Mobile Penetration: 71.2 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – The Philippines: • Dominated by the big two – Smart Communications and Globe Telecom • Known as the ‘SMS Capital of the World’ • Nearly 1 billion SMSs are exchanged daily in the country • SMS prices are extremely low, Sun Cellular offers free SMS 47 The figure below shows the subscriber base of the major MNOs in The Philippines. Figure 86: MNOs’ Subscriber Base – The Philippines (In Million, End-2008) Subscriber Base (In Million) 40 35.2 35 30 24.7 25 20 15 10 8.1 5 0 Sun Cellular Globe Telecom Smart Communications Operator Source: Portio Research Ltd. Data revenue measure – Smart Communications: The figure below shows total revenues and the contribution of data services to the total revenues for Smart Communications during 2006-2008. 47 Source: http://www.zdnetasia.com/news/communications/0,39044192,62042583,00.htm © 2009, Portio Research. All Rights Reserved 129
  • 130. Ranking The World’s Best Mobile Operators Figure 87: Data Revenue Measure – Smart Communications (2006-2008) 49.8 47.6 49.6 50 40 1.5 30 2.2 1 1.9 20 1.6 0.5 10 Data Revenues as a Percentage of Total revenues (In Percent) Total Revenue (In USD Billion) 2 0 0 2006 2007 2008 Year Total Revenue Data Revenue Source: Portio Research Ltd. Smart Communications’ Strategies Smart Communications is The Philippines’ largest mobile network operator with nearly 35.2 million subscribers by end-2008. The operator offers innovative services such as Smart Money, Smart Load and Smart Padala. Its GSM network covers more than 99 percent of the 48 country’s population. The percentage contribution of data services to the total revenues for Smart Communications is one of the highest for MNOs worldwide. In 2008, revenue from data services formed approximately 55 percent of the total service revenue. This high percentage of data revenue is primarily because of the extraordinarily high use of text messaging in the country. History of SMS in The Philippines • Launched in 1994 as a free service and remained free till the year 2000 • The six year span of free service made subscribers SMS addicts • In 2001, PLDT and Globe introduced landline texting, extending the reach of the service • The launch of innovative services such as Smart Cinema Club, which allowed subscribers to get information about the latest movies, download logos and movie ringtones, further popularised the service among the masses • The advent of text games in 2001 took the use of SMS to new heights; the country’s first text game “Text to Millions” was launched by Smart • Corporate SMS was launched in 2003 • SMS has become a communication channel between the country’s citizens and Government • SMS is used by all sections of the society from doctors to farmers 48 Source: http://smart.com.ph/corporate/about/company/AboutUs.htm 130 © 2009, Portio Research. All Rights Reserved In 2008, Smart Communications’ revenue from data services formed approximately 55 percent of the total service revenue.
  • 131. Ranking The World’s Best Mobile Operators Astronomical amount of SMS generated The subscribers in the Philippines are simply crazy for text messaging services. In 2008, Smart subscribers alone sent approximately 250 billion SMS, a figure higher than the whole Latin American region. Figure 88: SMS Volume – Smart Communications (In Billion, 2006-2008) SMS Volume (In Billion) 250 238.4 249.7 227.0 200 150 100 50 0 2006 2007 2008 Year Source: Portio Research Ltd. The operator has introduced various services and plans to further capitalize on the popularity of SMS. With such efforts in place, it managed to generate revenue of USD 1 billion from SMS services alone. The figure below compares the SMS revenue of the operator for the period 2006-2008. Figure 89: SMS Revenue – Smart Communications (In USD Billion, 2006-2008) 1.2 SMS Revenue (In USD Billion) 1.0 1.0 0.8 0.9 0.7 0.6 0.4 0.2 0.0 2006 2007 2008 Year Source: Portio Research Ltd. The figure below depicts the contribution of SMS to the total data revenue generated by the MNO during the period 2006-2008. © 2009, Portio Research. All Rights Reserved 131
  • 132. Ranking The World’s Best Mobile Operators Figure 90: SMS Revenue as a Percentage of Data Revenue – Smart Communications (In Percent, 2006-2008) SMS Revenue as a Percentage of Data Revenue (In Percent) 100 93.6 94.6 2007 89.7 2008 80 60 40 20 0 2006 Year Source: Portio Research Ltd. Encouraging price plans for SMS SMS became popular in the country right from the outset. Initially the service was free which helped it to gain momentum in the local market. The popularity of the service grew to the extent that operators were forced to keep SMS prices well below the average price of voice calls. The figure below compares the voice to SMS price ratio for four different Asian operators. It could be easily deduced from the figure that due to high voice to SMS price ratio in The Philippines, SMS has become the preferred mode of communication over voice. Figure 91: Voice Tariff-per-Minute to per-message SMS Cost Ratio of Asian MNOs (April 2009) 6.4 Voice to SMS Ratio 7 6 5 3.5 4 3 2 1.0 1.2 Bharti Airtel China Mobile 1 0 DiGi Malaysia Smart Communications Operator Source: Portio Research Ltd. The table below highlights the importance of factors that have resulted in the MNO’s high level of data revenue generation. Factors Identified Smart Communications The Philippines Excessive use of SMS Encouraging SMS use 132 © 2009, Portio Research. All Rights Reserved
  • 133. Ranking The World’s Best Mobile Operators Telkomsel Indonesia Ownership: Telkom Indonesia (65 percent) and SingTel (35 percent) Launched: 1994 st Subscriber Base: 65.3 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 36.0 percent (2007 to 2008) st Market Share: 47.5 percent (31 December 2008) st Indonesia Mobile Penetration: 57.5 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Indonesia: • Dominated by the big three – Telkomsel, PT Satelindo and Excelcomindo • Competition has intensified in recent years leading to considerable reductions in the price of services • Big SMS market in the region • 3.5G networks deployed in the country • Operators aggressively promoting their content services The figure below shows the subscriber base of the major MNOs in Indonesia. Figure 92: MNOs’ Subscriber Base – Indonesia (In Million, End-2008) 65.3 Subscriber Base (In Million) 70 60 50 36.5 40 26.0 30 20 10 4.5 0 HTIL Excelcomindo PT Satelindo Telkomsel Operator Source: Portio Research Ltd. Data revenue measure – Telkomsel Indonesia: The figure below shows total revenues and the contribution of data services to the total revenues for Telkomsel Indonesia during 2006-2008. © 2009, Portio Research. All Rights Reserved 133
  • 134. Ranking The World’s Best Mobile Operators Figure 93: Data Revenue Measure – Telkomsel Indonesia (2006-2008) Total Revenue (In USD Billion) 31.3 4 31.7 27.4 3 20 2 4.0 4.0 3.2 1 Data Revenues as a Percentage of Total revenues (In Percent) 40 5 0 0 2006 2007 2008 Year Total Revenue Data Revenue Source: Portio Research Ltd. Telkomsel’s Strategies Telkomsel is Indonesia’s largest mobile network operator with approximately 65 million subscribers by end-2008. It offers its services worldwide with the help of 323 roaming 49 partners across 170 countries. It became the first operator in the country to offer 3G services in September 2006, and was also the first operator to launch rechargeable GSM prepaid services in Asia. The MNO offers a variety of data services and generates substantial annual data revenue. The high ratio of data revenue generated by its subscribers could be attributed to the following: • • • High use of SMS services Constant innovation and better services Variety of services for the corporate sector High use of SMS services In most of the major Asian mobile markets, SMS enjoys widespread popularity and Indonesia is no exception. In 2008, Telkomsel’s subscribers exchanged 78 billion SMS, up 58 percent on the corresponding 2007 figure. However, the gain in SMS volume was negated by a 39 percent decline in price per SMS in 2008 as compared to 2007. The operator managed to yield revenue of USD 0.9 billion for the year 2008. 49 Source: http://www.telkomsel.com/web/company_profile 134 © 2009, Portio Research. All Rights Reserved Telkomsel became the first operator in Indonesia to offer 3G services in September 2006, and was also the first operator to launch rechargeable GSM prepaid services in Asia.
  • 135. Ranking The World’s Best Mobile Operators Figure 94: SMS Revenue – Telkomsel (In USD Billion, 2007 & 2008) 1.0 SMS Revenue (In USD Billion) 1.0 0.9 0.8 0.6 2007 2008 Year Source: Portio Research Ltd. The figure below depicts SMS’ contribution to the operator’s data revenue. SMS Revenue as a Percentage of Data Revenue (In Percent) Figure 95: SMS Revenue as a Percentage of Data Revenue – Telkomsel (In Percent, 2007 & 2008) 100 85.0 85.0 2007 2008 80 60 40 20 0 Year Source: Portio Research Ltd. The operator offers various interesting packages and services which have further assisted in increasing the uptake of SMS in the country. • In January 2009, Telkomsel launched “Free 300 SMS” for ‘Kartu As’ users. The subscribers, through a daily registering fee of USD 0.2 (IDR 2,000), could send 300 SMS to all Telkomsel numbers during 00.00-19.00 hours. • In July 2008, it introduced the SMS Asik & Nelpon Sip promotion for Kartu As users, 50 which offered an SMS package of USD 0.1 for 50 SMS per day. For National Customer Day and the Moslem fasting month it offered free SMS for the period 5-26 September 2008 between midnight and six A.M. within its network. • In September 2007, it introduced video SMS services which enabled subscribers to send recorded video messages to other users. • It introduced a service called SMS Me in September 2007, which enabled prepaid users with insufficient credit to send SMS to a recipient who was instead charged for the SMS. 50 Source: Company Reports © 2009, Portio Research. All Rights Reserved 135
  • 136. Ranking The World’s Best Mobile Operators • • In June 2007, the MNO launched a 100 free SMS promotion for Kartu As subscribers, which credited an account with 100 SMS credit if a user sent at least 100 SMS in a month. In May 2007, it launched the simPATI Pake Banyak Gratis Pake Banyak program which offered free bonuses for every six SMS sent by a subscriber during peak time. Constant innovation and better services Apart from SMS, other content services especially ringback tones have kept Telkomsel among the front runners in the wireless data arena. The figure below highlights some of the outstanding services launched by the operator. Figure 96: Telkomsel’s Initiatives in Mobile Content Market • Ringback Tones • • Mobile Payments • • Mobile Video • • Mobile E-mail • • Other Innovations • The operator launched a platform which encouraged subscribers to create their own ringback tones. It enhanced this initiative and allowed other subscribers to download these ringback tones. In March 2009, Telkomsel and Citibank launched a new mobile banking service named Citi Mobile-Thin Client. In November 2007, it launched country’s first mobile wallet service named T-Cash. In August 2008, it launched a 3G Traffic Monitoring service which allowed users to check traffic through 3G video call. In September 2007, it introduced Video Blogging services which enabled subscribers to record and share their videos. In October 2008, it introduced BlackBerry Bold and the Sunset Red BlackBerry Curve 8320. In June 2007, the operator extended its push e-mail solutions to the non-enterprise segment with the launch of You’ve Got Mail service. In August 2007, the operator unveiled its mobile comic service called m-Komik. In March 2007, HALOhybrid postpaid cards were launched which possessed the capabilities of both postpaid as well as prepaid cards. Source: Portio Research Ltd. Variety of services for the corporate sector The operator has targeted the enterprise segment with the following services: • HALOhybrid: This service empowered organisations to regulate the mobile communication cost of their employees. • Mobile Virtual Private Network: With the help of this service, enterprises were able to form a closed user network among its employees enabling them to communicate among themselves using short codes. Other Services: Other services offered by the operator to the enterprise segment included push e-mail, sales force automation, corporate mobile messenger, Web2 SMS etc. The table below highlights the importance of factors that have led to the MNO’s high level of data revenue generation. 136 © 2009, Portio Research. All Rights Reserved
  • 137. Ranking The World’s Best Mobile Operators Factors Identified Telkomsel Indonesia High use of SMS Focus on corporate sector Innovative services © 2009, Portio Research. All Rights Reserved 137
  • 138. Ranking The World’s Best Mobile Operators NTT DOCOMO Japan Ownership: NTT Mobile Communications Network, Inc. and Public Investors Launched: 1993 st Subscriber Base: 54.2 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 1.9 percent (2007 to 2008) st Market Share: 51.2 percent (31 December 2008) st Japan Mobile Penetration: 82.3 percent (31 December 2008) Technology: PDC and WCDMA (HSPA) Market Environment – Japan: • Dominated by the big three – NTT DOCOMO, KDDI and SoftBank • The most advanced wireless market worldwide • Largest 3G subscriber base worldwide • Mobile subscribers are well educated and aware about the technical know-how of wireless services • Sole market where mobile e-mail has surpassed SMS • 4G networks in testing phase • Mobile number portability has been introduced The figure below shows the subscriber base of the MNOs. Figure 97: MNOs’ Subscriber Base – Japan (In Million, End-2008) Subscriber Base (In Million) 60 54.2 50 40 30.6 30 20.0 20 10 0 SoftBank KDDI NTT DOCOMO Operator Source: Portio Research Ltd. Data revenue measure – NTT DOCOMO Japan: The figure below shows total revenues and the contribution of data services to the total revenues for NTT DOCOMO during 2006-2008. 138 © 2009, Portio Research. All Rights Reserved
  • 139. Ranking The World’s Best Mobile Operators Figure 98: Data Revenue Measure – NTT DOCOMO Japan (2006-2008) Total Revenue (In USD Billion) 40.0 40 33.2 40 29.2 30 20 41.4 41.0 43.9 20 10 Data Revenues as a Percentage of Total revenues (In Percent) 50 60 0 0 2006 2007 2008 Year Total Revenue Data Revenue Source: Portio Research Ltd. NTT DOCOMO’s Strategies NTT DOCOMO is Japan’s largest MNO with nearly half of the country’s subscriber base using its network. The operator is known to set benchmarks with its innovations in the wireless arena. For DOCOMO, data ARPU forms a substantial constituent of mobile ARPU, and this could be attributed to the following reasons: • Early start in advanced technologies and platforms • Development of services to meet diversifying subscriber needs • More focus on existing subscriber base utilisation than expansion • Efforts to make services more user friendly Early start in advanced technologies and platforms NTT DOCOMO has always led worldwide operators in terms of technology innovations. In 1999, the operator launched the most popular mobile Internet platform, i-mode, and two years later introduced FOMA, the world’s first 3G commercial mobile service based on WCDMA. After seven years of 3G operations, the MNO has been able to develop the world’s largest 3G subscriber base. This helped the MNO to stabilise the use of mobile data services in the country and to generate higher data ARPU. The operator has already performed a test for the deployment of 4G networks in the near future. © 2009, Portio Research. All Rights Reserved 139
  • 140. Ranking The World’s Best Mobile Operators Figure 99: FOMA and i-mode Subscribers – NTT DOCOMO (In Million, End-2008) FOMA and i-mode Subscribers (In Million) 47.5 48.2 FOMA 50 i-mode 40 30 20 10 0 Platform Source: Portio Research Ltd. Development of services to meet diversifying subscriber needs Mobile e-mail has always enjoyed a greater status in the Japanese market, however, of late several other mobile data services, such as video and music downloads, and mobile payments have achieved higher levels of subscriber interest. NTT has been well aware of these transitions and has come up with suitable services at appropriate times. Osaifu-Keitai, iD and DCMX services were launched by the operator to target the market of small cash payments in the country. By end-2008, it had over eight million DCMX members and more 51 than ten million iD subscriptions. It also took steps to enhance the use of mobile music and mobile video services in the country. For instance, in May 2007, it introduced the Uta-hodai service which offered music downloads for a flat rate. Some of the other innovative services launched by the operator include the imadoco kantan search service which enables subscribers to search for contacts using GPS, and the Area Mail Disaster Information service which provides emergency warnings and disaster information issued by the Japan Meteorological Agency. More focus on existing subscriber base utilisation than expansion The operator primarily focused on subscriber base utilisation rather than expansion to bolster its position in the market. To open up more revenue avenues for its existing subscribers, it came up with new strategies and business models shown in the figure below. 51 Source: Company Reports 140 © 2009, Portio Research. All Rights Reserved NTT DOCOMO focused on subscriber base utilisation rather than expansion to bolster its position in the market.
  • 141. Ranking The World’s Best Mobile Operators Figure 100: NTT DOCOMO’s Strategies • • New Business Model • • • • • New discount services launched in August 2007 Introduced to build long term relationships with subscribers By end-2008 over 30 million users availing services New handset sales model introduced in November 2007 Allowed subscribers to pay handset cost in 12 or 24 installments Flat-rate subscription business allows users to avail data services for flat rates, eliminating pricing apprehensions 15.8 million users availed this plan by end-2008 New Fields of Businesses • • Life assistant business to churn revenue out of nontraffic fields such as credit business International business to target international travelers, enterprises and overseas business deployment Source: Portio Research Ltd. Efforts to make services more user-friendly The operator made constant efforts to bring its services closer to subscribers and easier to 52 use. As of end-2008, it had installed approximately 400,000 iD payment terminals. In the year 2008, it added more variety in the Smartphone series to target the subscribers who prefer specific services over others. The figure below highlights the four new series and their target segments. 52 Source: Company Reports © 2009, Portio Research. All Rights Reserved 141
  • 142. Ranking The World’s Best Mobile Operators Figure 101: NTT DOCOMO’s Handset Series Launched in 2008 docomo PRIME series for users who love multimedia services such as video, games etc. docomo PRO series for subscribers who seek advanced digital tools docomo SMART series for users who want to keep a balance between their personal and professional lives docomo STYLE series for users who want to make a style statement with the latest looks and accessories Source: Portio Research Ltd. The table below highlights the importance of factors that have led to the MNO’s high level of data revenue generation. Factors Identified NTT DOCOMO Japan Early start in advanced technologies Variety of services offered User friendly services Subscriber base utilisation 142 © 2009, Portio Research. All Rights Reserved
  • 143. Ranking The World’s Best Mobile Operators Chapter 9 Performance Measurement 8 – Measuring Subscriber Loyalty © 2009, Portio Research. All Rights Reserved 143
  • 144. Ranking The World’s Best Mobile Operators Performance Measurement 8 – Measuring Subscriber Loyalty Churn is a measure of the number of subscribers who leave an operator or move to another operator’s network. In the face of intensifying competition and aggressive pricing strategies, MNOs face the threat of decreasing subscriber loyalty. Furthermore, with the introduction of Mobile Number Portability (MNP), the inhibiting factor of changing a mobile number – which deters subscribers from switching subscriptions – has been minimised. High churn rates are mostly prevalent in the prepaid segment, and operators are adopting various strategies to increase the loyalty of their prepaid subscriber base and are promoting postpaid plans to stem the churn rate. The adverse effects of a high churn rate for an MNO can be shrinking profit margins and an increase in the effective cost of subscriber acquisition. Therefore, the significance of churn rate for increasing the profitability of an MNO can not be overlooked. The figure below shows the top ten operators worldwide with the lowest churn rates, along with their EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) margins during 2008. The EBITDA margins for seven out of ten of these operators are above 35 percent. Figure 102: Top 10 MNOs Worldwide – Monthly Churn Rate and EBITDA Margin (In Percent, 2008) 50 43.1 Monthly Churn Rate (In Percent) 39.8 1.6 36.7 36.0 27.4 1.2 39.8 39.0 26.4 45 37.1 40 35 29.0 30 25 20 0.8 0.4 0.7 0.8 0.8 0.9 1.0 1.0 1.0 1.1 1.2 1.2 15 10 5 EBITDA Margin (In Percent) 2.0 0 Operator Monthly Churn Telia Sonera Sweden Reliance Communication India Elisa Finland SoftBank Japan T-Mobile Germany Starhub Singapore Chunghwa Taiwan SingTel Singapore KDDI Japan NTT DOCOMO Japan 0.0 EBITDA Source: Portio Research Ltd. Formula and Rationale The formula used for the calculation of this performance measurement index is given below: Value = Churn + Net Additions in Target Segment of the Country (10-74 Years) 144 © 2009, Portio Research. All Rights Reserved
  • 145. Ranking The World’s Best Mobile Operators There are several countries which are experiencing a decline in the addressable population – taken as the 10-74 age-group population in this study. Therefore, the operators in these markets will be at an disadvantage if we use churn alone as a performance measurement. We have tried to counter this factor by adding net additions in the target segment of the market. This is intended to provide a level playing field to the MNOs operating in various markets by toning down the churn rate in the countries where addressable population is declining, and scale up the churn for operators operating in countries with positive growth in the target segment. Rankings The figure below shows the Top 20 MNOs based on this performance measurement index. Figure 103: Top 20 MNOs Worldwide – Measuring Subscriber Loyalty (2008) 53 Rank 1 to 10 Rank 11 to 20 Base Belgium, 9.6 Verizon The US, 9.6 China Mobile, 9.6 Reliance India, 9.6 Pannon Hungary, 9.6 Vodafone Hungary, 9.6 T-Mobile Hungary, 9.6 Mobilkom Austria, 9.7 Telenor Sweden, 9.7 3Sweden, 9.7 Tele2 Sweden, 9.7 Telia Sonera Sweden, 9.7 Elisa Finland, 9.7 Starhub Singapore, 9.7 9.4 T-Mobile Germany, 9.8 9.5 SoftBank Japan, 9.8 9.6 SingTel Singapore, 9.8 9.7 Chunghwa Taiwan, 9.8 Score 9.8 KDDI Japan, 9.9 9.9 NTT DOCOMO Japan, 10.0 10.0 9.3 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement are given below. 53 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 145
  • 146. Ranking The World’s Best Mobile Operators Table 32: MNOs Worldwide Ranked 1 to 20 – Measuring Subscriber Loyalty (2008) Rank MNO Score Rank MNO Score 1 NTT DOCOMO Japan 10.00 2 KDDI Japan 9.93 11 3 Sweden 9.69 12 Telenor Sweden 9.69 3 Chunghwa Taiwan 9.85 4 SingTel Singapore 9.85 13 Mobilkom Austria 9.68 14 T-Mobile Hungary 9.64 5 SoftBank Japan 9.81 15 Vodafone Hungary 9.64 6 T-Mobile Germany 9.79 16 9.64 7 Starhub Singapore 9.73 17 8 Elisa Finland 9.73 18 Pannon Hungary Reliance Communication India China Mobile 9 Telia Sonera Sweden 9.69 19 Verizon The US 9.60 10 Tele2 Sweden 9.69 20 Base Belgium 9.60 9.61 9.61 Table 33: MNOs Worldwide Ranked 21 to 50 – Measuring Subscriber Loyalty (2008) Rank MNO Score Rank MNO Score 21 O2 Czech Republic 9.57 36 Rogers Canada 9.53 22 T-Mobile Czech Republic Vodafone Czech Republic China Unicom 9.57 37 Orange Austria 9.52 9.57 38 T-Mobile Montenegro 9.51 9.57 39 T-Mobile Croatia 9.47 25 3 Austria 9.55 40 VIPnet Croatia 9.47 26 Globul Bulgaria 9.55 41 9.47 27 Mobiltel Bulgaria 9.55 42 28 Vivatel Bulgaria 9.55 43 Tele2 Croatia Partner Communications Israel Telus Mobility Canada 29 Nextel Brazil 9.55 44 Pelephone Israel 9.41 30 Telia Sonera Finland 9.55 45 Bell Mobility Canada 9.41 31 Swisscom Switzerland 9.54 46 SFR France 9.40 32 Sunrise Switzerland 9.54 47 9.40 33 Orange Switzerland 9.54 48 34 Sonofon Denmark 9.54 49 Bouygues France Telecom Mobile New Zealand Vodafone New Zealand 35 Proximus Belgium 9.54 50 MTS Belarus 9.39 23 24 146 © 2009, Portio Research. All Rights Reserved 9.45 9.43 9.40 9.40
  • 147. Ranking The World’s Best Mobile Operators Table 34: MNOs Worldwide Ranked 51 to 170 – Measuring Subscriber Loyalty (2008) Rank MNO Rank MNO Rank MNO 51 Velcom Belarus 52 M1 Singapore 91 Orange The UK 131 Tunisiana Tunisia 92 Vodafone Australia 132 Tunicell Tunisia 53 54 Orange France 93 MTN Afghanistan 133 3 The UK Cellcom Israel 94 Claro Argentina 134 Iusacell Mexico 55 AT&T The US 95 Polkomtel Poland 135 MTN Syria 56 Mobistar Belgium 96 Orange Poland 136 T-Mobile The US 57 Movistar Argentina 97 MegaFon Russia 137 3 Italia 58 Nextel Argentina 98 Tele2 Russia 138 Vodafone Romania 59 Orange Slovakia 99 Sibir Telecom Russia 139 Globacom Nigeria 60 T-Mobile Slovakia 100 Cosmote Greece 140 Promonte Montenegro 61 Telefonica Slovakia 101 Movistar Mexico 141 Meditel Morocco 62 T-Mobile Austria 102 Zain Nigeria 142 Maroc Telecom Morocco 63 Telstra Australia 103 KPN The Netherlands 143 PTC Poland 64 Taiwan Mobile 104 144 Meteor Ireland 65 TMN Portugal 105 145 TIM Brasil 66 Optimus Portugal 106 T-Mobile The Netherlands Vodafone The Netherlands MTS Ukraine 146 TCI Iran 67 Vodafone Portugal 107 Telenor Norway 147 Telenor Serbia 68 Movistar Spain 108 Netcom Norway 148 mt:s Serbia 69 Movistar Chile 109 Comcel Colombia 149 VIP Serbia 70 Entel PCS Chile 110 Movistar Colombia 150 Vodafone The UK 71 Vodafone Germany 111 Tigo Colombia 151 Telefonica Peru 72 E-Plus Germany 112 Telecom Italia 152 KTF South Korea 73 Nextel Peru 113 Wind Italy 153 du The UAE 74 O2 Germany 114 Wind Hellas Greece 154 Etisalat The UAE 75 Vodafone Spain 115 Oi Brazil 155 Vodafone Ireland 76 DNA Finland 116 O2 The UK 156 Etisalat Misr Egypt 77 MTN Sudan 117 Vivo Brazil 157 Vodafone Egypt 78 Avea Turkey 118 SK Telecom South Korea 158 MobiNil Egypt 79 Turkcell Turkey 119 VimpelCom Russia 159 Claro Peru 80 Vodafone Turkey Telecom Personal Argentina Optus Australia 120 Sprint The US 160 Telcel Mexico 121 Claro Brazil 161 Djezzy Algeria 122 Mobilink Pakistan 162 Nedjma Algeria 123 Telenor Pakistan 163 T-Mobile The UK 124 Mobily Saudi Arabia 164 Zain Jordan 85 Banglalink Bangladesh GrameenPhone Bangladesh MTS Russia 125 Movistar Venezuela 165 Asiacell Iraq 86 FeT Taiwan 126 Movilnet Venezuela 166 Zain Sudan 87 MTN Iran 127 Digitel Venezuela 167 Zain Iraq 88 Vodafone Italy 128 Omnitel Lithuania 168 Bharti Airtel India 89 Vodafone Greece 129 Tele2 Lithuania 169 Vodafone India 90 Orange Spain 130 O2 Ireland 170 LG Telecom South Korea 81 82 83 84 © 2009, Portio Research. All Rights Reserved 147
  • 148. Ranking The World’s Best Mobile Operators Table 35: MNOs Worldwide Ranked 171 to 204 – Measuring Subscriber Loyalty (2008) Rank MNO Rank MNO Rank 171 Telkomsel Indonesia 183 Idea Cellular India 195 DTAC Thailand 172 Excelcomindo Indonesia 184 Safaricom Kenya 196 True Move Thailand 173 Claro Chile 185 Zain Kenya 197 Hutch Thailand 174 MTN Nigeria 186 AIS Thailand 198 Globe The Philippines 175 BITE Lithuania 187 Smart The Philippines 199 Vodacom South Africa 176 188 TDC Denmark 200 MTN South Africa 189 Telia Denmark 201 Cell C South Africa 178 HTIL Hong Kong CSL New World Mobility Hong Kong PCCW Mobile Hong Kong 190 Maxis Malaysia 202 Vodacom DR Congo 179 SmarTone Hong Kong 191 Celcom Malaysia 203 Tigo DR Congo 180 life:) Ukraine 192 DiGi Malaysia 204 Celtel DR Congo 181 Kyivstar Ukraine 193 Sun The Philippines 182 Brasil Telecom 194 Beeline Ukraine 177 MNO The figure below shows the Top 3 MNOs judged on this performance measurement. Figure 104: Top 3 MNOs Worldwide – Measuring Subscriber Loyalty (2008) NTT DOCOMO Japan 1 KDDI Japan 2 3 Chunghwa Taiwan Source: Portio Research Ltd. 148 © 2009, Portio Research. All Rights Reserved
  • 149. Ranking The World’s Best Mobile Operators MNO Strategies KDDI Japan Ownership: KDDI Corporation Launched: 1994 st Subscriber Base: 30.6 million (31 December 2008) Y-o-Y Subscriber Growth Rate for KDDI: 3.4 percent (2007 to 2008) Y-o-Y Population Growth in 10-74 year age-group: (-)ve 0.4 percent (2007 to 2008) 54 st Market Share: 28.9 percent (31 December 2008) st Japan Mobile Penetration: 82.3 percent (31 December 2008) Technology: CDMA and CDMA2000 Market Environment – Japan: • Dominated by the big three – NTT DOCOMO, KDDI and SoftBank • The most advanced wireless market worldwide • Highest 3G subscribers worldwide • Predominantly postpaid market • High level of subscriber loyalty high with low churn • Higher switching cost – another reason for low churn • Mobile number portability introduced in October 2006 The figure below shows the subscriber base of the major MNOs in Japan. Figure 105: MNOs’ Subscriber Base – Japan (In Million, End-2008) Subscriber Base (In Million) 60 54.2 50 40 30.6 30 20.0 20 10 0 SoftBank KDDI NTT DOCOMO Operator Source: Portio Research Ltd. KDDI’s Strategies KDDI is Japan’s second largest mobile network operator after NTT DOCOMO, and operates over CDMA networks. The MNO is rated very high on the subscriber satisfaction front and this has helped it to lower its churn rate. Other reasons responsible for low churn are: • High percentage of postpaid subscribers • Total Customer Satisfaction policy • Discount plans and other retention measures 54 Please note: There is a negative growth. © 2009, Portio Research. All Rights Reserved 149
  • 150. Ranking The World’s Best Mobile Operators High percentage of postpaid subscribers Japan is predominantly a postpaid market which has kept the churn rates of the MNOs comparatively lower than other Asian markets. KDDI has increased its postpaid subscriber base over the years in order to further reduce its churn and improve ARPU. The figure below compares the churn and postpaid subscribers percentage of three Japanese operators. 99.9 98.5 92.0 1.2 100 Monthly Churn (In Percent) 1 75 0.8 50 0.6 1.0 0.4 0.8 0.7 25 0.2 0 0 NTT DOCOMO KDDI Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 106: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – Japan (In Percent, 2008) SoftBank Operator Monthly Churn Postpaid Percentage Source: Portio Research Ltd. The figure above shows the relation between churn and penetration of postpaid subscribers. The same relation has been observed between KDDI’s postpaid subscriber base and its churn. This is highlighted in the figure below. Figure 107: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – KDDI (In Percent, Q1 2008 – Q4 2008) 98.3 98.4 98.5 100 75 0.90 50 0.87 0.75 0.65 25 0 Q1 2008 Q2 2008 Q3 2008 Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Monthly Churn (In Percent) 97.9 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Q4 2008 Quarter Monthly Churn Postpaid Percentage Source: Portio Research Ltd. As a result of the increase in percentage of postpaid subscribers, KDDI has been able to achieve reduced churn rates which is clearly evident from the above figure. 150 © 2009, Portio Research. All Rights Reserved
  • 151. Ranking The World’s Best Mobile Operators Subscriber Satisfaction policy KDDI introduced this policy in March 2003 to perform better on the subscriber satisfaction front. The operator assesses its subscribers’ feedback and requests gathered through its service centres, support centres and surveys to improve quality of service and develop new products to suit subscribers’ needs. The figure below describes this policy. Figure 108: KDDI’s Total Customer Satisfaction Policy Total Customer Satisfaction Policy Realisation of satisfaction KDDI takes all feedback and opinions of subscribers seriously in order to realize a level of satisfaction for the subscribers Subscriber orientated thinking and action KDDI tries to assess things from the subscribers’ perspective to offer better quality of service Working with users to create better services KDDI seeks subscribers’ help to develop better services and operations Subscriber evaluation KDDI takes users’ criticism positively and considers it an opportunity to improve their experience Subscriber trust KDDI believes in developing an honest relationship with its subscribers Building and repaying subscriber satisfaction KDDI believes in increasing its profits by building subscriber satisfaction and reward them with more benefits Recognition of excellence KDDI wants its employees to help subscribers in their decisions and actions Source: Portio Research Ltd. Discount plans and other retention measures Mobile number portability (MNP) was introduced in October 2006 in Japan which made MNOs apprehensive about losing market share to competitors. This forced them to come up with interesting services and retention plans to keep their customer base intact. The figure below briefly outlines some of KDDI’s retention strategies. © 2009, Portio Research. All Rights Reserved 151
  • 152. Ranking The World’s Best Mobile Operators Figure 109: KDDI’s Retention Measures Discount Plans • • Launched plans such as Everybody discount and Family discount Introduced flat rate plans for data usage New Services and Handsets • • Improved its music, mobile TV and other entertainment services e.g. LISMO Audio Device Link service Handsets launched to suit the lifestyles of subscribers Source: Portio Research Ltd. The table below highlights the importance of factors which have resulted in low churn for the operator. Factors Identified KDDI Japan High percentage of postpaid subscribers Discount plans and retention measures Total Customer Satisfaction policy 152 © 2009, Portio Research. All Rights Reserved
  • 153. Ranking The World’s Best Mobile Operators SingTel Singapore Ownership: Singapore Telecom Launched: 1993 st Subscriber Base: 2.9 million (31 December 2008) Y-o-Y Subscriber Growth Rate for SingTel: 26.4 percent (2007 to 2008) Y-o-Y Population Growth in 10-74 year age-group: 1.3 percent (2007 to 2008) st Market Share: 46.4 percent (31 December 2008) st Singapore Mobile Penetration: 136.7 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Singapore: • Wireless market comprises three MNOs – SingTel, Starhub and M1 • Low churn market • Full mobile number portability implemented in 2008 • All MNOs offer 3G services • Highly competitive market with very little to choose between the three MNOs The figure below shows the subscriber base of major MNOs in Singapore. Figure 110: MNOs’ Subscriber Base – Singapore (In Million, End-2008) Subscriber Base (In Million) 4 2.9 3 3 2 1.6 1.8 2 1 1 0 M1 Starhub SingTel Operator Source: Portio Research Ltd. Churn Scenario – Singapore: The figure below shows the monthly churn of the MNOs operating in Singapore during 2008 and also depicts the percentage of their subscriber base under the postpaid segment. © 2009, Portio Research. All Rights Reserved 153
  • 154. Ranking The World’s Best Mobile Operators 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 54.1 50.5 50.5 60 40 1.6 1.0 20 0.8 0 M1 Starhub Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Monthly Churn (In Percent) Figure 111: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – Singapore (In Percent, 2008) SingTel Operator Monthly Churn Postpaid Percentage Source: Portio Research Ltd. The figure shows that over half of the subscriber bases of the MNOs mentioned above are postpaid. SingTel’s Strategies SingTel has the highest number of mobile subscribers with over 46 percent market share in Singapore. The operator has led the local market with its innovative wireless services and added more subscribers than its competitors in 2008, enabling it to considerably lower churn. Various strategies adopted by the operator to increase subscribers’ loyalty and satisfaction are highlighted in the figure below. 154 © 2009, Portio Research. All Rights Reserved
  • 155. Ranking The World’s Best Mobile Operators Figure 112: SingTel’s Subscriber Satisfaction and Retention Strategies Attractive Price Plans First to Launch Services Retention Strategies Proactive Approach Customised Services Source: Portio Research Ltd. Attractive price plans The Singaporean wireless market is highly competitive and to survive in such conditions operators have to lure their subscribers with attractive service offerings. Following this logic, SingTel came up with pricing plans which provided it with the competitive edge in the market. These plans served the needs of all categories of subscribers. The figure below shows some of the operator’s postpaid plans and the free services offered with these plans. Figure 113: SingTel’s Postpaid Plans iOne Plus 100 minutes 500 local SMS VoiceMail SMS Plus • • • • iThree Plus 2,000 minutes 2,000 local SMS VoiceMail SMS Plus • • • • • • • • Classic 150 minutes 360 local SMS Voice Mail SMS Plus • • • • 3G Flexi 500 minutes 500 local SMS AutoRoam SMS Plus Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 155
  • 156. Ranking The World’s Best Mobile Operators For prepaid subscribers, it introduced the USD 1.5 EASY Top Up service on payphones – the smallest top up denomination available in the country. The operator also introduced 55 price plans specifically for iPhone 3G users. First to launch services The operator has an impressive record of introducing innovative services in the Singaporean mobile market before anybody else. Such efforts capture new users for the operator and also increase the loyalty of existing subscribers. Below is a list of some recent services introduced by SingTel in Singapore. • PlayNow plus service in collaboration with Sony Ericsson • Nokia Messaging for Nokia E63 with special data plans • Location tracker service • Bloomberg mobile service • iPhone • MobileM@il (a free push e-mail service for postpaid subscribers) SingTel offered personalized services which took care of users with diverse interests ranging from sports to finance news. Customised services The operator realised that different subscribers have different needs and if they are not given appropriate services to satisfy those needs they tend to turn to other operators for the same services. In order to avoid such instances, SingTel offered services which took care of users with diverse interests ranging from sports to finance news. The figure below highlights some of the targeted services offered by the operator. Figure 114: SingTel’s Customised Services Customised Services Sports • EPL • Champions League • Spanish Primera Liga • SMS Score Alerts Finance • Bloomberg Mobile • Dow Jones Financial News • Asian Wall Street Journal Entertainment • mio TV • Korean Dramas • WOW TV Entertainment • Mobile Cartoons Adult Services • Supermodels • Victoria's Secret Special • TOTO Results • 4D & TOTO Lucky Pick • 4D Results Source: Portio Research Ltd. Proactive approach The operator believes in a proactive approach for anticipating subscribers’ needs and responding with appropriate services for them. Efforts made by the operator include: • It launched mio TV service on mobile for the growing demand for video services. • It introduced iPhone 3G to offer better services over next generation networks. • It rolled out a service which enabled users to get real time bus arrival information on their mobile handsets. 55 Source: Company Reports 156 © 2009, Portio Research. All Rights Reserved
  • 157. Ranking The World’s Best Mobile Operators The table below highlights the importance of factors which have resulted in low churn for the operator. Factors Identified SingTel Singapore Attractive price plans First to launch services Customised services Proactive approach © 2009, Portio Research. All Rights Reserved 157
  • 158. Ranking The World’s Best Mobile Operators Chunghwa Telecom Taiwan Ownership: State-run Company with Government’s share approximately 35 percent Launched: 1995 st Subscriber Base: 8.9 million (31 December 2008) Y-o-Y Subscriber Growth Rate for Chunghwa Telecom: 2.6 percent (2007 to 2008) Y-o-Y Population Growth in 10-74 year age-group: 0.6 percent (2007 to 2008) st Market Share: 36.9 percent (31 December 2008) st Taiwan Mobile Penetration: 105.2 percent (31 December 2008) Technology: GSM and WCDMA (HSPA) Market Environment – Taiwan: • Dominated by three operators – Chunghwa Telecom, FeT and Taiwan Mobile • Among the most advanced wireless markets in Asia • All major operators have launched 3.5G networks • WiMAX roll out expected in 2009 • Operators are cutting voice prices and pushing data services • MVNOs are operational in the country The figure below shows the subscriber base of the major MNOs in Taiwan. Figure 115: MNOs’ Subscriber Base – Taiwan (In Million, End-2008) Subscriber Base (In Million) 10 8.9 8 6.2 6.2 FeT Taiwan Mobile 6 4 2 0 Chunghwa Telecom Operator Source: Portio Research Ltd. Chunghwa Telecom’s Strategies Chunghwa Telecom is Taiwan’s biggest mobile network operator with nearly 37 percent market share. The operator is known for its advanced wireless networks and innovative services. By end-2008, it had the highest number of 3G subscribers in the country. With the lowest churn in 2008, Chunghwa’s subscribers turned out to be the most loyal. This high level of satisfaction among subscribers has been achieved through certain strategies which are highlighted in the figure below. 158 © 2009, Portio Research. All Rights Reserved
  • 159. Ranking The World’s Best Mobile Operators Figure 116: Chunghwa Telecom’s Subscriber Satisfaction Strategies Emphasis on quality of service Focus on postpaid segment Better service offerings Subscriber Satisfaction Strategies Source: Portio Research Ltd. Focus on postpaid segment The operator has shifted its focus on to high valued postpaid subscribers and is committed to gain more postpaid subscribers in its total subscriber base. Currently, it has the highest percentage of postpaid subscribers among the three major MNOs. The tendency of switching operators is generally higher in the prepaid segment, rather than the postpaid. Having a higher percentage of postpaid subscribers has helped Chunghwa to keep its churn rate considerably lower than the other MNOs. This is depicted in the figure below. 2.5 92.1 90.1 100 Monthly Churn (In Percent) 77.0 2 75 1.5 0.5 50 2.2 1 1.8 25 1.0 0 0 Chunghwa Telecom Taiwan Mobile Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 117: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – Taiwan (In Percent, 2008) FeT Operator Monthly Churn Postpaid Percentage Source: Portio Research Ltd. The above figure clearly shows that the operator with the highest percentage of postpaid subscribers has the lowest churn rate and vice-versa. The operator added nearly 0.2 million © 2009, Portio Research. All Rights Reserved 159
  • 160. Ranking The World’s Best Mobile Operators postpaid subscribers in 2008, whereas, Taiwan Mobile suffered a decline in its postpaid subscriber base. Emphasis on quality of service In order to retain subscribers, excellent quality of service is absolutely imperative. Chunghwa Telecom seeks to achieve the highest level of quality for its services and for that it took the following steps: • Quality assurance function of its operating units • Dedicated task forces to monitor network performance • Quality evaluation criteria set by the senior management and timely reviews of performance by them Better service offerings To gain the loyalty of its subscribers, an operator needs to offer its best services. Working on the same principle, Chunghwa took various initiatives including the migration of its 2G subscribers to 3G, in order to give its users an opportunity to avail its next generation networks for a richer experience. Other efforts made by the operator are mentioned in the figure below. Figure 118: Chunghwa Telecom’s Initiatives Chunghwa Telecom’s Initiatives Expansion of 3G Chunghwa had 3.6 million 3G subscribers by end-2008; most of them were migrated from its 2G services Discount packages Discount packages were introduced for mPro and mCool New Handsets 75 percent of iPhone contracts were renewals and 25 percent were new subscriptions Strategic Partnerships Collaborated with handset manufacturers and content providers to offer interesting services Exclusive content It offered exclusive content such as Beijing Olympic Games in 2008 and many more Source: Portio Research Ltd. The table below highlights the importance of factors which have resulted in low churn for the operator. 160 © 2009, Portio Research. All Rights Reserved Chunghwa took initiatives for migration of its 2G subscribers to 3G, in order to give its users an opportunity to avail its next generation networks for a richer experience.
  • 161. Ranking The World’s Best Mobile Operators Factors Identified Chunghwa Telecom Taiwan High percentage of postpaid subscribers Quality of service Better service offerings © 2009, Portio Research. All Rights Reserved 161
  • 162. Ranking The World’s Best Mobile Operators Chapter 10 Performance Measurement 9 – Postpaid Penetration Measure 162 © 2009, Portio Research. All Rights Reserved
  • 163. Ranking The World’s Best Mobile Operators Performance Measurement 9 – Postpaid Penetration Measure Postpaid subscribers are viewed as a source of continuous revenue inflow for an operator. They are also associated with low churn and high ARPU. Therefore, operators having greater postpaid subscriber percentages are considered more potent in terms of revenue generation. The characteristics associated with prepaid and postpaid subscribers, and the benefits for the operators in pushing subscribers to adopt postpaid subscribers are mentioned in the figure below: Figure 119: Factors Benefits of Postpaid Subscriptions for MNOs Prepaid Service Transition Strategy Service Features Basic Voice services, long distance, roaming, VAS packages VAS (prepaid), selected data services Usage based fee Pricing and Packaging Limited minutes, payment prior to use Flexible pricing plans, bundling with reward for high use Distribution Channels Top-ups through prepaid cards, use above voucher limit not allowed Increased flexibility, Internet refills using credit cards/ATMs allowed Benefits Postpaid Service Full set of VAS, data services such as mobile E-mail Higher service use, easy to push new services Monthly payment, lower charge rate for bundled service promoting high use Unlimited usage (use based credit limit), Internet payment Higher ARPU Low cost, easy distribution Source: Portio Research Ltd. The benefits mentioned in the diagram above put operators with a higher percentage of its subscriber base as postpaid subscribers at an advantage over competitors. It has been observed that as the markets mature, the percentage of subscriber base with postpaid subscriptions shows an upward trend. The top 10 mobile markets worldwide with the highest postpaid subscriber percentage are mentioned in the figure below. © 2009, Portio Research. All Rights Reserved 163
  • 164. Ranking The World’s Best Mobile Operators 98.0 90.8 90 180 87.2 78.4 80 77.8 160 72.9 72.7 70.3 69.0 70 120 129.4 60 115.4 50 40 94.3 140 99.1 93.6 87.4 82.3 30 86.6 100 80 86.5 60 66.8 Denmark France Norway The US 0 Belarus 0 Canada 20 Taiwan 10 Finland 40 Japan 20 Penetration (In Percent) 99.5 100 South Korea Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 120: Top 10 Mobile Markets Worldwide – Postpaid Subscribers and Mobile Penetration (In Percent, 2008) Country Postpaid Subscribers in Country Penetration Source: Portio Research Ltd. Formula and Rationale The selection of postpaid percentages may not be an effective way of evaluating the efforts of an operator in transforming its prepaid subscribers to postpaid, because in addition to operators’ efforts postpaid percentage is also dependent on market characteristics; and some markets tend to have higher postpaid percentages. Also, the more years of operations of an MNO, the more chance there is for an operator to increase its postpaid subscriber base. Therefore, inclusion of number of years of operation as a normalising factor can make the comparison less biased and also more likely to capture new above-par performers. The formula used for the calculation of this performance measurement is given below. Value = Postpaid Subscribers of MNO as a Percentage of Total Postpaid Subscribers in the Country Number of Years of Operation of MNO (2G & Above) Rankings The figure below shows the Top 20 MNOs based on this performance measurement index. 164 © 2009, Portio Research. All Rights Reserved
  • 165. Ranking The World’s Best Mobile Operators Figure 121: Top 20 MNOs Worldwide – Postpaid Penetration Measure (2008) 56 Rank 1 to 10 Rank 11 to 20 MTN Afghanistan, 6.5 MTN Iran, 6.6 Tunisiana Tunisia, 6.8 MTN Syria, 6.8 MobiNil Egypt, 6.8 MTN Nigeria, 6.9 Zain Iraq, 7.0 Movistar Colombia, 6.7 2 Djezzy Algeria, 7.0 Vodafone Egypt, 7.0 MTS Belarus, 7.0 Asiacell Iraq, 7.1 Comcel Colombia, 7.5 3 Mobily Saudi Arabia, 7.8 4 Claro Peru, 7.9 5 Movistar Venezuela, 7.9 Score 6 Etisalat Misr Egypt, 7.9 7 Movilnet Venezuela, 8.3 8 du The UAE, 8.5 9 Telefonica Peru, 10.0 10 1 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement index are given below. 56 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 165
  • 166. Ranking The World’s Best Mobile Operators Table 36: MNOs Worldwide Ranked 1 to 20 – Postpaid Penetration Measure (2008) Rank MNO Score Rank MNO Score 1 Telefonica Peru 10.00 11 Vodafone Egypt 7.02 2 du The UAE 8.47 12 Djezzy Algeria 7.01 3 Movilnet Venezuela 8.31 13 Zain Iraq 6.97 4 Etisalat Misr Egypt 7.89 14 MTN Nigeria 6.88 5 Movistar Venezuela 7.88 15 MobiNil Egypt 6.83 6 Claro Peru 7.87 16 MTN Syria 6.79 7 Mobily Saudi Arabia 7.82 17 Tunisiana Tunisia 6.77 8 Comcel Colombia 7.52 18 Movistar Colombia 6.68 9 Asiacell Iraq 7.08 19 MTN Iran 6.59 10 MTS Belarus 7.03 20 MTN Afghanistan 6.53 Table 37: MNOs Worldwide Ranked 21 to 50 – Postpaid Penetration Measure (2008) Rank Score Rank 21 TCI Iran 6.50 36 22 Zain Sudan 6.48 37 23 Telstra Australia 6.44 38 T-Mobile Montenegro 6.10 24 Safaricom Kenya 6.44 39 Maroc Telecom Morocco 6.09 25 mt:s Serbia 6.37 40 Telkomsel Indonesia 6.08 26 Etisalat The UAE 6.35 41 Entel PCS Chile 6.07 27 Tunicell Tunisia 6.34 42 Swisscom Switzerland 6.07 28 Globul Bulgaria 6.24 43 Cosmote Greece 6.07 29 VIP Serbia 6.23 44 Globe The Philippines 6.05 30 Velcom Belarus 6.18 45 SK Telecom South Korea 6.05 31 Meditel Morocco 6.18 46 MTS Ukraine 6.03 32 Movistar Chile 6.16 47 China Mobile 6.03 33 Orange Slovakia 6.15 48 T-Mobile Slovakia 6.03 34 Vodafone Romania 6.13 49 Avea Turkey 6.02 35 166 MNO MNO Globacom Nigeria 6.13 50 T-Mobile Croatia 6.00 Telecom Personal Argentina Telenor Norway © 2009, Portio Research. All Rights Reserved Score 6.12 6.11
  • 167. Ranking The World’s Best Mobile Operators Table 38: MNOs Worldwide Ranked 51 to 170 – Postpaid Penetration Measure (2008) Rank MNO Rank MNO Rank 51 Turkcell Turkey 91 TDC Denmark 131 BITE Lithuania 52 Mobiltel Bulgaria 92 TMN Portugal 132 Optimus Portugal 53 VIPnet Croatia 93 MTS Russia 133 Vodafone Greece 54 O2 Ireland 94 3 Italia 134 Orange Spain 55 Kyivstar Ukraine 95 Orange France 135 Wind Italy 56 96 Vodafone New Zealand 136 HTIL Hong Kong 97 Polkomtel Poland 137 Vodafone Germany 98 Tele2 Lithuania 138 99 Telenor Serbia 139 60 Zain Jordan Partner Communications Israel Movistar Argentina Telecom Mobile New Zealand Zain Kenya 100 Orange Poland 140 61 Promonte Montenegro 101 Mobilkom Austria 141 62 Banglalink Bangladesh 102 AIS Thailand 142 Sun The Philippines GrameenPhone Bangladesh KDDI Japan Vodafone The Netherlands Oi Brazil 63 Movistar Spain 103 Vivo Brazil 143 Telus Mobility Canada 64 KPN The Netherlands 104 KTF South Korea 144 Sunrise Switzerland 65 NTT DOCOMO Japan 105 DTAC Thailand 145 life:) Ukraine 66 Proximus Belgium 106 Vodafone Czech Republic 146 Sprint The US 67 Mobistar Belgium 107 Taiwan Mobile 147 Optus Australia 68 Vodacom South Africa 108 Celcom Malaysia 148 Digitel Venezuela 69 Chunghwa Taiwan 109 MTN South Africa 149 Orange Switzerland 70 Telecom Italia 110 PTC Poland 150 O2 The UK 71 Maxis Malaysia 111 Claro Brazil 151 Tele2 Sweden 72 Omnitel Lithuania 112 T-Mobile Austria 152 73 3 The UK 113 AT&T The US 153 74 China Unicom 114 Telia Denmark 154 Vodafone Portugal CSL New World Mobility Hong Kong Orange Austria 75 Starhub Singapore 115 Telia Sonera Sweden 155 Telefonica Slovakia 76 Vivatel Bulgaria 116 FeT Taiwan 156 Claro Argentina 77 Verizon The US 117 T-Mobile The Netherlands 157 VimpelCom Russia 78 Tele2 Croatia 118 Telia Sonera Finland 158 Telenor Pakistan 79 Vodafone Ireland 119 Vodafone Spain 159 DiGi Malaysia 80 O2 Czech Republic 120 Bell Mobility Canada 160 Sonofon Denmark 81 TIM Brasil 121 M1 Singapore 161 Vodafone The UK 82 Smart The Philippines 122 Vodafone Hungary 162 LG Telecom South Korea 83 Pelephone Israel 123 Pannon Hungary 163 3 Sweden 84 T-Mobile Hungary 124 Telcel Mexico 164 Bharti Airtel India 85 T-Mobile Czech Republic 125 Rogers Canada 165 Wind Hellas Greece 86 Cell C South Africa 126 True Move Thailand 166 Bouygues France 87 Mobilink Pakistan 127 T-Mobile Germany 167 Orange The UK 88 Cellcom Israel 128 SFR France 168 Vodacom DR Congo 89 DNA Finland 129 Netcom Norway 169 Vodafone Italy 90 SingTel Singapore 130 Elisa Finland 170 O2 Germany 57 58 59 © 2009, Portio Research. All Rights Reserved MNO 167
  • 168. Ranking The World’s Best Mobile Operators Table 39: MNOs Worldwide Ranked 171 to 204 – Postpaid Penetration Measure (2008) Rank MNO Rank MNO Rank 171 Tigo Colombia 172 174 Zain Nigeria Reliance Communication India MTN Sudan 183 Movistar Mexico 195 Brasil Telecom 184 MegaFon Russia 196 Vodafone Australia 185 3 Austria 197 Tigo DR Congo 186 Base Belgium 198 Idea Cellular India 175 Iusacell Mexico 176 Vodafone India 187 E-Plus Germany 199 Celtel DR Congo 188 Vodafone Turkey 200 Beeline Ukraine 177 178 Telenor Sweden 189 Excelcomindo Indonesia 201 Nextel Peru SoftBank Japan 190 T-Mobile The UK 202 Sibir Telecom Russia 179 Meteor Ireland 191 SmarTone Hong Kong 203 Nextel Argentina 180 T-Mobile The US 192 Claro Chile 204 Nextel Brazil 181 PCCW Mobile Hong Kong 193 Nedjma Algeria 182 Hutch Thailand 194 Tele2 Russia 173 MNO The figure below shows the top three MNOs judged on this performance measurement. Figure 122: Top 3 MNOs Worldwide – Postpaid Penetration Measure (2008) Telefonica Peru 1 du The UAE 2 3 Movilnet Venezuela Source: Portio Research Ltd. 168 © 2009, Portio Research. All Rights Reserved
  • 169. Ranking The World’s Best Mobile Operators MNO Strategies Telefonica Moviles Peru Ownership: Telefonica Group Launched: 1992 st Subscriber Base: 10.6 million (31 December 2008) st Postpaid Subscribers: 9.8 percent (31 December 2008) Y-o-Y Subscriber Growth Rate: 30.6 percent (2007 to 2008) st Market Share: 57.3 percent (31 December 2008) st Peru Mobile Penetration: 63.4 percent (31 December 2008) Technology: GSM, WCDMA, CDMA and CDMA2000 Market Environment – Peru: • Dominated by two MNOs – Telefonica and Claro • One of the high growth markets in Latin America • Network distribution is highly uneven because of varying topographies • Primarily a Prepaid market • Growth of prepaid subscribers outpacing growth of postpaid subscribers • 3G networks operational in the country The figure below shows the subscriber base of the major MNOs in Peru. Figure 123: MNOs’ Subscriber Base – Peru (In Million, End-2008) Subscriber Base (In Million) 12 10.6 10 8 7.2 6 4 2 0 Claro Telefonica Operator Source: Portio Research Ltd. Telefonica Moviles’ Strategies Telefonica Moviles Peru is the largest mobile network operator in Peru with over 57 percent market share, and the only Peruvian operator to offer both GSM and CDMA services. Its GSM subscribers have outnumbered their CDMA counterparts and the MNO is gradually shifting to GSM networks. The operator has the highest number of postpaid subscribers in Peru. This feat can be explained through strategies mentioned in the figure below. © 2009, Portio Research. All Rights Reserved 169
  • 170. Ranking The World’s Best Mobile Operators Figure 124: Telefonica’s Strategies Postpaid leader Initial focus on postpaid segment Telefonica’s Strategies Encouraging the uptake of postpaid services Source: Portio Research Ltd. Postpaid leader Nearly all wireless markets in Latin American region are prepaid dominated and Peru is no exception. The mobile market of Peru is led by Telefonica Moviles and the operator possesses both the highest number of prepaid and postpaid subscribers. The figure below compares the postpaid subscribers of Peru’s two leading MNOs. Postpaid Subscriber Base (In Million) Figure 125: Postpaid Subscriber Base – Peru (In Million, End-2008) 1.2 1.0 1.0 0.8 0.8 0.6 0.4 0.2 0.0 Claro Telefonica Operator Source: Portio Research Ltd. 170 © 2009, Portio Research. All Rights Reserved
  • 171. Ranking The World’s Best Mobile Operators Initial focus on postpaid segment Postpaid subscribers as a percentage of total subscriber base have declined for the Peruvian operators over the years, and Telefonica too has witnessed this trend. However, the MNO was able to minimize the loss of postpaid subscribers initially and fared better than its competitors. For instance, during the period 2004-2005, the postpaid percentage in the total subscriber base for Telefonica fell by just 0.6 percent from 17.7 to 17.1 percent, whereas, Claro’s corresponding figure reduced by over 3 percent,from 15.3 percent to 12.2 percent. Encouraging the uptake of postpaid plans The majority of the Latin American region, including Peru, is experiencing a downward trend in the number of postpaid subscribers. To counter this decline in postpaid subscribers, Telefonica Moviles has come up with region-wide strategies to encourage the uptake of postpaid plans by subscribers. These strategies include attractive postpaid plans bundled with popular handsets and other lucrative offers – such as accumulating travel points ‘LAN PASS’ by using mobile services – for the postpaid subscribers. The table below highlights the factors which enabled the operator to lead in the postpaid segment and their respective importance. Factors Identified Telefonica Moviles Peru Postpaid leader Initial focus Encouraging uptake of services © 2009, Portio Research. All Rights Reserved 171 To counter the decline in postpaid subscribers, Telefonica Moviles has come up with strategies to encourage the uptake of postpaid plans by subscribers.
  • 172. Ranking The World’s Best Mobile Operators Comcel Colombia Ownership: America Movil Group Launched: 1994 st Subscriber Base: 27.4 million (31 December 2008) st Postpaid Subscribers: 13.3 percent (31 December 2008) Y-o-Y Subscriber Growth Rate: 22.9 percent (2007 to 2008) st Market Share: 67.3 percent (31 December 2008) st Colombia Mobile Penetration: 90.4 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Colombia: • Comcel is the clear market leader • Prepaid subscribers dominate market • Growth of prepaid subscribers outperforming growth of postpaid subscribers • Operators focus more on prepaid segment for higher growth • 3G networks are operational in the country The figure below shows the subscriber base of the major MNOs in Colombia. Figure 126: MNOs’ Subscriber Base – Colombia (In Million, End-2008) Subscriber Base (In Million) 30 27.4 25 20 15 10.0 10 5 0 Movistar Comcel Operator Source: Portio Research Ltd. Comcel’s Strategies Comcel is the largest mobile network operator in Colombia with over 67 percent market share. The operator witnessed the highest subscriber growth among all Colombian MNOs in the 2008. In 2008, it became the first operator to launch 3G services in the country. In the postpaid segment, the MNO has performed exceedingly well with nearly half of the country’s postpaid base using its networks. The figure below highlights the factors responsible for this achievement. 172 © 2009, Portio Research. All Rights Reserved
  • 173. Ranking The World’s Best Mobile Operators Figure 127: Comcel’s Strategies Growth of postpaid subscribers Variety of postpaid plans Comcel’s Strategies Source: Portio Research Ltd. Growth of postpaid subscribers Like other Latin American markets, Colombia is also dominated by the prepaid segment. The country’s operators have typically kept their focus on prepaid subscribers to achieve higher growth rates and increase their market share, which has led to a decline in the growth of postpaid users. However, amid such conditions, Comcel managed to achieve positive growth for its postpaid subscriber base and was the only Colombian operator in 2008 which could claim this. The figure below compares the trend in postpaid subscriber growth for Colombia’s two leading MNOs. Postpaid Subscribers (In Million) Figure 128: Postpaid Subscriber Base – Colombia (In Million, 2006-2008) 3.7 4 3.2 3 2 2.9 1.8 1.8 1.6 1 0 2006 2007 2008 Year Comcel Movistar Source: Portio Research Ltd. Variety of postpaid plans To promote its postpaid services, Comcel has come up with tariff plans which are targeted at different sets of users. These users fall into two categories: • High and moderate usage subscribers: Such users are willing to pay higher for more minutes of use and other value added services • Low usage subscribers: To satisfy the needs of these users, the operator offers low priced plans with a few included minutes as well The latest “Endless plan” series launched by Comcel is another initiative taken to popularize postpaid services among its subscribers. Subscribers availing these plans can make calls to numbers of their own choice without being charged for the first five minutes. Apart from voice minutes, each plan holder gets a fixed amount of text messages free of cost. The table © 2009, Portio Research. All Rights Reserved 173
  • 174. Ranking The World’s Best Mobile Operators below highlights the factors which enabled the operator to lead in the postpaid segment and their relative importance. Factors Identified Comcel Colombia Growth of postpaid subscribers Variety of postpaid plans 174 © 2009, Portio Research. All Rights Reserved
  • 175. Ranking The World’s Best Mobile Operators Vodafone Egypt Ownership: Vodafone Group (55 percent) and Telecom Egypt (45 percent) Launched: 1998 st Subscriber Base: 17.6 million (31 December 2008) st Postpaid Subscribers: 4.0 percent (31 December 2008) Y-o-Y Subscriber Growth Rate: 32.1 percent (2007 to 2008) st Egypt Mobile Penetration: 54.6 percent (31 December 2008) st Market Share: 39.5 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Egypt: • Penetration is quite moderate (around 54 percent) despite significant growth in mobile users – reflecting a huge untapped market for MNOs • Market primarily dominated by prepaid subscribers • Nearly half of the Egyptian population resides in rural areas, which is driving MNOs to invest heavily in infrastructure in order to target the low-income rural areas. • Competition in the Egyptian market has been intensified by the entry of the third player, Etisalat, as a result of the innovative services and low prices it is offering • Internet market proliferation in the country, owing to the launch of broadband Internet connectivity in 2004 and subscriber-friendly broadband packages Vodafone’s Strategies Vodafone Egypt is the second largest operator in Egypt accounting for a market share of 39.5 percent in 2008. The Egyptian MNO is part of the UK’s Vodafone Group and was formerly known as Click GSM, before being re-branded to Vodafone Egypt. The operator was able to gain a foothold in this market by introducing the concept of prepaid mobile phone offerings. However, the operator is currently the market leader in the postpaid segment. The strategies which led to this success are depicted in the figure below: © 2009, Portio Research. All Rights Reserved 175
  • 176. Ranking The World’s Best Mobile Operators Figure 129: Vodafone Egypt’s Success Strategies Product Portfolio Enhancement Focus on Postpaid Segment Postpaid Dominance in Prepaid Market Vodafone Egypt’s Success Strategies Source: Portio Research Ltd. Postpaid Dominance in a Prepaid Market Prepaid subscribers account for the majority of the overall wireless market. MobiNil leads the market in terms of market share (45.1 percent) as well as overall subscribers (20.1 million). However, Vodafone Egypt has a strong foothold on the postpaid segment, with the highest number of postpaid subscribers in 2008. This is depicted in the figure below. The operator also recorded a higher year-on-year postpaid subscriber growth (17.3 percent). Postpaid Subscribers (In Million) Figure 130: Postpaid Subscriber Base – Egypt (In Million, End-2008) 0.8 0.70 0.7 0.64 0.6 0.5 MobiNil Vodfaone Egypt Operator Source: Portio Research Ltd. Focus on Postpaid Segment Taking into consideration that the ARPU for postpaid subscribers is greater than the prepaid segment, the former is an extremely lucrative segment for the MNOs. In order to tap this 176 © 2009, Portio Research. All Rights Reserved
  • 177. Ranking The World’s Best Mobile Operators segment effectively, Vodafone has taken the following measures in order to enhance its product portfolio and match the expectations of postpaid users: • In order to increase its revenue per user, the MNO has refined its mobile tariff structure, thereby increasing the price per minute for postpaid subscribers while lowering down the postpaid monthly connection fees. • Vodafone is targeting the business segment and promoting postpaid subscriber use through a wide range of value-added services. • Vodafone also decided to acquire a 3G license. Primarily for the following two reasons:  First and foremost, the operator wanted to counter the competition provided by Etisalat Misr through the launch of 3G services.  Secondly, postpaid subscribers are likely to be heavier users compared to prepaid and more likely to use 3G services such as Internet browsing, etc. Vodafone promoted its 3G services for its postpaid subscribers by following an aggressive pricing strategy: 57  Video Telephony – Approximately USD 0.1 (EGP 0.75) per minute  Mobile TV- Approximately USD 0.1 (EGP 0.50) per minute  Internet Surfing – Nearly USD 0.2 (EGP 1) per day (up to max of 5 MB) and an additional USD 0.8 (EGP 5) for each extra MB 58  Track download – Nearly USD 0.9 (EGP 4.5) per song  Besides this pricing strategy, the operator also offered 20 minutes of free video calling per month in the initial two months following the video calling service launch. Product Portfolio Enhancement Vodafone Egypt came up with the following attractive products and services for its subscribers: Figure 131: Vodafone Egypt’s Product Portfolio Source: Portio Research Ltd. 57 58 Source: http://www.thedailynewsegypt.com/article.aspx?ArticleID=7170 Source: http://www.thedailynewsegypt.com/article.aspx?ArticleID=7170 © 2009, Portio Research. All Rights Reserved 177 Vodafone is targeting the business segment and promoting postpaid subscriber use through a wide range of value-added services.
  • 178. Ranking The World’s Best Mobile Operators • TV Phone: Via ‘Vodafone Live!’, Vodafone Egypt subscribers were able to enjoy Video and Radio streaming for the first time in this country. • Ring Back Tones: This service was pioneered by Vodafone in the Egyptian mobile market wherein a subscriber can select from different songs and set it as their ringtone • Balance Transfer for Vodafone El Kart and El Khat: Vodafone was the first company that gave subscribers the option of transferring small balances from their phones to their peer group, relatives, etc. through this service. • Vodafone World: While roaming, subscribers were able to call and send SMS at flat prices. The following table lists the key factors that have led to the success of the operator: Factors Identified Vodafone Egypt Postpaid dominance in prepaid market Focus on postpaid segment Product portfolio enhancement 178 © 2009, Portio Research. All Rights Reserved
  • 179. Ranking The World’s Best Mobile Operators Chapter 11 Performance Measurement 10 – Technology Measure © 2009, Portio Research. All Rights Reserved 179
  • 180. Ranking The World’s Best Mobile Operators Performance Measurement 10 – Technology Measure MNOs have been upgrading their networks with evolving network technologies to ensure high quality of service and for expanding the range of services. The network is also useful in reducing the cost of deployment and to provide services in a cost-effective manner. Therefore, evolution of a network is as beneficial for reducing operational costs as it is for generating new revenue streams. The figure below depicts the benefits of deployment of evolved technologies such as 3G and 3.5G. Figure 132: Advantages of Technology Evolution Staying ahead of growing capacity requirements: Use of advanced networks and Network optimisation tools to provide congestion-free services Quality of Service Improved Spectral Efficiency: This helps to reduce opex and despite initial high capex is cost-effective in the long run. Targeting Enterprise Segment: High-speed networks are more capable of providing feature-rich Internet services and corporate applications New Revenue Streams Multimedia Services: Advanced networks enable data-centric multimedia services useful in providing a range of content and data services Source: Portio Research Ltd. Formula and Rationale The formula used for the calculation of this performance measurement index is given below: Value = Mobile Network Technology Score of MNO Mobile Penetration of the Country * Number of Years of Network Operation (2G & Above) The figure given below contains a chart depicting the ‘mobile network technology score’ for an MNO – based on technology and mobile penetration in the country of operation at yearend 2008 – used for its evaluation in this performance measurement. 180 © 2009, Portio Research. All Rights Reserved
  • 181. Ranking The World’s Best Mobile Operators Figure 133: Evaluation of an MNO based on Network Technology and Mobile Penetration 90 80 70 Score 60 50 40 30 20 10 0 Below 30 Percent 30-50 Percent 50-70 Percent 70-90 Percent 90-110 Percent Over 110 Percent Penetration (Dec 2008) 2G 2.5G 3G 3.5G Source: Portio Research Ltd. The objective of using this performance measurement index is to evaluate how futuristic an MNO is compared to its peers. Furthermore, the comparison has been normalised by using the number of years of 2G (and above) operation. Also, an operator using higher network technology - even with low penetration - has been considered as more futuristic. For example, Etisalat Misr launched its 3.5G network in May 2007 and became the first Egyptian MNO to launch a 3.5G network. This reflects the operator’s vision in gaining a technological edge and capturing the data-download services market. However, if an MNO is operating in a market for a long period of time, which has over 100 percent penetration, it is expected to evolve its network in order to sustain and bolster its position. Therefore, a lesser score has been assigned for the deployment of advanced networks in this instance, compared to MNOs doing the same in a market with lower penetration levels. The objective of using technology performance measurement is to evaluate how futuristic an MNO is compared to its peers. Limitations: Some of the operators who have not deployed 3G/3.5G networks might not have done so owing to licensing issues and unavailability of spectrum. The delay in deployment due to these issues has not been taken into account. Rankings The figure below shows the Top 20 MNOs based on this performance measurement index. © 2009, Portio Research. All Rights Reserved 181
  • 182. Ranking The World’s Best Mobile Operators Figure 134: Top 20 MNOs Worldwide – Technology Measure (2008) 59 Rank 1 to 10 Rank 11 to 20 Zain Nigeria, 6.4 MobiNil Egypt, 6.4 Vodafone Egypt, 6.4 Movistar Colombia, 6.4 Zain Sudan, 6.4 Movistar Venezuela, 6.5 MTN Syria, 6.6 MTN Nigeria, 6.6 Telenor Pakistan, 6.6 MTN Iran, 6.7 Claro Peru, 7.1 Telefonica Slovakia, 6.9 2 Globacom Nigeria, 7.2 3 Telefonica Peru, 7.4 4 Tigo DR Congo, 7.8 5 Celtel DR Congo, 7.9 Score 6 MTN Afghanistan, 7.9 7 Vodacom DR Congo, 8.2 8 MTN Sudan, 8.4 9 Etisalat Misr Egypt, 10.0 10 1 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement are given below. 59 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. 182 © 2009, Portio Research. All Rights Reserved
  • 183. Ranking The World’s Best Mobile Operators Table 40: MNOs Worldwide Ranked 1 to 20 – Technology Measure (2008) Rank MNO Score Rank MNO Score 1 Etisalat Misr Egypt 10.00 2 MTN Sudan 8.38 11 MTN Iran 6.71 12 Telenor Pakistan 6.62 3 Vodacom DR Congo 4 MTN Afghanistan 8.19 13 MTN Nigeria 6.62 7.94 14 MTN Syria 6.61 5 Celtel DR Congo 7.90 15 Movistar Venezuela 6.53 6 Tigo DR Congo 7.77 16 Zain Sudan 6.38 7 Telefonica Peru 7.37 17 Movistar Colombia 6.38 8 Globacom Nigeria 7.16 18 Vodafone Egypt 6.37 9 Claro Peru 7.15 19 MobiNil Egypt 6.37 10 Telefonica Slovakia 6.86 20 Zain Nigeria 6.36 Table 41: MNOs Worldwide Ranked 21 to 50 – Technology Measure (2008) Rank MNO Score Rank MNO Score 21 Brasil Telecom 6.34 36 Comcel Colombia 5.92 22 VIP Serbia 6.31 37 Mobily Saudi Arabia 5.91 23 Asiacell Iraq 6.24 38 Hutch Thailand 5.87 24 Movilnet Venezuela 6.14 39 MTS Belarus 5.85 25 Idea Cellular India 6.10 40 China Mobile 5.84 26 Safaricom Kenya Reliance Communication India Zain Kenya 6.04 41 du The UAE 5.82 6.02 42 Movistar Mexico 5.80 6.02 43 Vivatel Bulgaria 5.78 5.99 44 Oi Brazil 5.78 5.97 45 Zain Iraq 5.77 31 Sun The Philippines GrameenPhone Bangladesh Banglalink Bangladesh 5.97 46 True Move Thailand 5.74 32 Bharti Airtel India 5.94 47 TIM Brasil 5.74 33 Vodafone India 5.94 48 Smart The Philippines 5.72 34 3 The UK 5.93 49 Nedjma Algeria 5.72 35 Meditel Morocco 5.92 50 Excelcomindo Indonesia 5.72 27 28 29 30 © 2009, Portio Research. All Rights Reserved 183
  • 184. Ranking The World’s Best Mobile Operators Table 42: MNOs Worldwide Ranked 51 to 170 – Technology Measure (2008) Rank MNO Rank MNO Rank 51 China Unicom 52 Tigo Colombia 53 54 55 91 Orange Switzerland 131 mt:s Serbia 92 SK Telecom South Korea 132 Telenor Norway Digitel Venezuela 93 T-Mobile The Netherlands 133 Netcom Norway Bell Mobility Canada 94 T-Mobile Slovakia 134 Vodafone Romania Tele2 Croatia 95 Orange Slovakia 135 Mobistar Belgium 56 Iusacell Mexico 96 NTT DOCOMO Japan 136 O2 Ireland 57 Telkomsel Indonesia 97 Globul Bulgaria 137 Cellcom Israel 58 3 Sweden 98 Orange Poland 138 Vodafone Czech Republic 59 Claro Brazil 99 Chunghwa Taiwan 139 PCCW Mobile Hong Kong 60 3 Austria 100 Starhub Singapore 140 Optimus Portugal 61 Maroc Telecom Morocco 101 Nextel Peru 141 Optus Australia 62 3 Italia 102 SFR France 142 Vodafone Australia 63 Telus Mobility Canada 103 Sunrise Switzerland 143 64 Tunisiana Tunisia 104 Telia Denmark 144 65 105 Orange Spain 145 106 Telcel Mexico 146 T-Mobile Austria 67 Djezzy Algeria Telecom Personal Argentina Claro Argentina M1 Singapore Vodafone The Netherlands T-Mobile Montenegro 107 147 Base Belgium 68 Vivo Brazil 108 148 O2 Czech Republic 69 Verizon The US 109 Pelephone Israel Partner Communications Israel VIPnet Croatia 149 T-Mobile Hungary 70 Velcom Belarus 110 Movistar Argentina 150 Pannon Hungary 71 Globe The Philippines 111 Orange France 151 Telenor Serbia 72 FeT Taiwan 112 AIS Thailand 152 Proximus Belgium 73 Cell C South Africa 113 DTAC Thailand 153 KPN The Netherlands 74 Rogers Canada 114 Meteor Ireland 154 Vodafone Spain 75 Claro Chile 115 KDDI Japan 155 Movistar Spain 76 Entel PCS Chile 116 TCI Iran 156 T-Mobile Croatia 77 Movistar Chile 117 Tunicell Tunisia 157 78 Bouygues France 118 Orange Austria 158 79 AT&T The US 119 Tele2 Lithuania 159 Vodafone New Zealand Telecom Mobile New Zealand Swisscom Switzerland 80 T-Mobile The US 120 Maxis Malaysia 160 HTIL Hong Kong 81 Sprint The US 121 Celcom Malaysia 161 Orange The UK 82 Telstra Australia 122 DiGi Malaysia 162 O2 The UK 83 DNA Finland 123 O2 Germany 163 Cosmote Greece 84 Avea Turkey 124 Wind Italy 164 E-Plus Germany 85 Taiwan Mobile 125 Turkcell Turkey 165 TDC Denmark 86 KTF South Korea 126 MTN South Africa 166 Sonofon Denmark 87 LG Telecom South Korea 127 Vodacom South Africa 167 Vodafone Turkey 88 Mobilink Pakistan 128 Polkomtel Poland 168 BITE Lithuania 89 SoftBank Japan 129 PTC Poland 169 Omnitel Lithuania 90 Vodafone Hungary 130 MTS Ukraine 170 Vodafone Italy 66 184 MNO © 2009, Portio Research. All Rights Reserved
  • 185. Ranking The World’s Best Mobile Operators Table 43: MNOs Worldwide Ranked 171 to 204 – Technology Measure (2008) Rank MNO Rank MNO Rank MNO 171 Telecom Italia 183 T-Mobile Germany 195 VimpelCom Russia 172 T-Mobile The UK 184 196 MTS Russia 173 Vodafone Ireland 185 197 Wind Hellas Greece 174 Mobilkom Austria 186 Vodafone The UK CSL New World Mobility Hong Kong T-Mobile Czech Republic 198 Vodafone Greece 175 Mobiltel Bulgaria 187 Zain Jordan 199 life:) Ukraine 176 SmarTone Hong Kong 188 Elisa Finland 200 Beeline Ukraine 177 Tele2 Sweden 189 Promonte Montenegro 201 Etisalat The UAE 178 Telia Sonera Sweden 190 Nextel Brazil 202 Kyivstar Ukraine 179 Telenor Sweden 191 Tele2 Russia 203 Nextel Argentina 180 Telia Sonera Finland 192 TMN Portugal 204 Sibir Telecom Russia 181 SingTel Singapore 193 Vodafone Portugal 182 Vodafone Germany 194 MegaFon Russia The figure below shows the Top 3 MNOs judged on this performance measurement. Figure 135: Top 3 MNOs Worldwide – Technology Measure (2008) Etisalat Misr Egypt 1 MTN Sudan 2 3 Vodacom DR Congo Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 185
  • 186. Ranking The World’s Best Mobile Operators MNO Strategies Vodacom DR Congo Ownership: Vodacom International (51 percent) and Congolese Wireless Networks (49 percent) Launched: 1999 st Subscriber Base: 4.0 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 24.3 percent (2007 to 2008) st DR Congo Mobile Penetration: 12.5 percent (31 December 2008) st Market Share: 48.2 percent (31 December 2008) Technology: GSM (EDGE) Market Environment – Democratic Republic of Congo: • Population - 66.5 million people (31 December 2008); high growth rate of 3.2 percent. • Very low mobile penetration compared to African countries • Huge untapped market owing to high percentage of rural population • Lack of proper infrastructure results in high capital expenditure st 60 Vodacom’s Strategies Figure 136: Vodacom DR Congo’s Success Strategies Technology First Mover Time of Entry Vodacom Success Strategy Timely Technology Launch Captial Expenditure Key Partnership Source: Portio Research Ltd. • 60 Time of Entry: Vodacom entered the DR Congo market at the time of civil war in 2001 when most of the big companies refrained from market entry. The operator firmly believed that it could use the situation to its advantage and avoid the competition which it faced in other markets. It would also help them in doing away with the quick investment that a new player would have to make in a competitive market in order to establish itself. Vodacom leveraged this market condition by investing slowly and rolling out technologies at a normal pace. The DR Congo market at that time was also subject to extremely low penetration, in both fixed as well as wireless segments. Source: http://www.census.gov/ipc/www/idb/country/cgportal.html 186 © 2009, Portio Research. All Rights Reserved
  • 187. Ranking The World’s Best Mobile Operators Vodacom is presently operating as the number one player in the DR Congo market. The market share of MNOs operating in DR Congo is given in the figure below: Figure 137: MNOs’ Market Share – DR Congo (End-2008) 39.2% 48.2% 12.6% Vodacom Celtel (Zain) Tigo Source: Portio Research Ltd. • Key Partnership: Vodacom devised an easier way of entering into the DR Congo market. It took over the operations of Congolese Wireless Network, although the deal was registered as a joint venture. The MNO was responsible for providing just the capital, whereas Congolese Wireless offered its 20-year license, subscriber base equivalent to 12,000 subscribers and additional fixed assets - which primarily helped Vodacom in establishing itself quite cheaply in this market. Capital Expenditure: Despite the civil war, Vodacom spent heavily on network 61 infrastructure, to the tune of almost USD 94 million in DR Congo . It specifically invested in rural areas, primarily mining cites, border cities and cities housing UN bases as a step to extensively increase its coverage. • Figure 138: Capital Expenditure – Vodacom (In USD Million, 2003-2008) CAPEX (In USD Million) 500 474 400 339 272 300 206 206 193 2006 2007 2008 200 100 0 2003 2004 2005 Year Source: Penn State • 61 Timely Launch of technologies: Vodacom DR Congo has been aggressive in developing and implementing network within the country. In 2002, Vodacom DR Congo Source: http://news.bbc.co.uk/1/hi/business/2010584.stm © 2009, Portio Research. All Rights Reserved 187
  • 188. Ranking The World’s Best Mobile Operators expanded its GSM network by building an 88-base station GSM network connecting 62 cities more than 1,600 kilometres apart within three months. Figure 139: 12/2001: Joint Venture Vodacom’s Network Expansion in DR Congo 5/2002: Launch in 3 cities 12/2002: 15 cities covered 12/2003: 58 cities covered 12/2004: 120 cities covered 12/2005: 183 cities covered 12/2006: 200 cities covered Source: Penn State During the civil war, DR Congo had non-existent infrastructure/roads. The operator made extensive use of air transport for the transfer of equipment, towers, fuel, steel, cement, etc. They also deployed public payphones in rural areas. • Technology First Mover: In DR Congo, Vodacom has been the pioneer in offering GPRS and EDGE for Internet access. The operator is also making headways with regard to the implementation of a 3G network in the country. The following table summarises the key success factors for the operator. Factors Identified Vodacom DR Congo Time of launch Key partnership Capital expenditure Timeliness of launch Technology first mover 62 Source: http://www.africanwireless.com/new_page_8.htm 188 © 2009, Portio Research. All Rights Reserved
  • 189. Ranking The World’s Best Mobile Operators MTN Sudan Ownership: MTN Group Launched: 2005 st Subscriber Base: 2.6 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 24.4 percent (2007 to 2008) st Sudan Mobile Penetration: 27.5 percent (31 December 2008) st Market Share: 25 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Sudan • Population – 40.2 million people (31 December 2008) • New opportunities for MNOs and investors after foreign investment was allowed in 2007 • Low mobile penetration (27.5 percent) – which means a huge untapped market • Two main players – Zain (market leader) and MTN • Mostly prepaid subscribers with postpaid subscribers accounting for only 1.5 percent of total subscribers in 2008 • Really low broadband penetration, and Internet service uptake also slow; implying an enormous potential demand for future Internet services st MTN Sudan’s Strategies Figure 140: MTN Sudan’s Success Strategies Attractive Pricing Options Focus on Strong Network Deployment Distribution Network MTN’s Success Strategies Source: Portio Research Ltd. • Focus on strong network deployment: The Sudanese market is host to intense competition with three operators (two GSM and one CDMA) in a market with a mobile © 2009, Portio Research. All Rights Reserved 189
  • 190. Ranking The World’s Best Mobile Operators penetration of only 25 percent. In 2007, owing to the low tariff and rebranding of other operators, market conditions were quite challenging for the MNO. However, MTN was able to substantially grow its subscriber base to 2.6 million in 2008 (from 2.1 million in 2007) on the back of its technically-sound network. It also offered its subscribers valueadded services such as 3G and international roaming. Figure 141: Subscriber Base – MTN Sudan (In Million, 2006-2008) Subscriber Base (In Million) 3 2.6 3 2.1 2 2 1.1 1 1 0 2006 2007 2008 Year Source: Portio Research Ltd.  In 2007, Sudanese MNOs primarily focused on the deployment of strong networks. As many as 575 base transceiver sites were rolled out in Sudan. MTN Sudan was comfortably able to roll out over 40 sites in Darfur, despite the ongoing conflicts during that time. Further, the MNO was successfully able to cover approximately 42.8 percent of the population by end-2007; the population 63 coverage increased to 45.3 percent by end-2008. MTN also rolled out 1,200 km of fibre cabling from Khartoum to Port Sudan in order to enhance its infrastructural backbone.  Figure 142: Capital Expenditure – MTN Sudan (In USD Million, 2006-2008) 160 140 64 150 CAPEX (In USD Million) 140 120 100 90 80 60 40 20 0 2006 2007 2008 Year Source: Portio Research Ltd. 63 Source: http://www.mtn.com/AboutMTNGroup/GroupFootprint/MiddleEastAndNorth/MiddleEastAndNorth_Sudan.aspx 64 Please note: The 2008 figure is as estimation. 190 © 2009, Portio Research. All Rights Reserved
  • 191. Ranking The World’s Best Mobile Operators • • Expansion of distribution network: MTN has ventured into a partnership with sixteen main distributors. The primary focus of the operator is to extend its network to all rural areas and main cities and be able to support all distribution channels.  MTN is focusing on developing its network in Southern Sudan. The MNO has recently launched a new mobile switching centre (MSC) in Juba as a step to providing consumers in Southern Sudan with affordable access to mobile services. Attractive Options for Subscribers: The operator has been able to cope with the competition in Sudan by launching a host of value added and innovative services, such as Caller Tunez, Voice SMS, prepaid multi-profiles, bulk SMS, 3G connect card, IVR content services, and super clip. It was also the first Sudanese operator to provide persecond billing. It also introduced the Mazazik service which allowed users to replace caller tune with their personalized song.  In 2007, the operator also made major modifications to its Pay as you talk prepaid offer, in order to make it more appealing for its existing and new subscribers. It has also included an additional option of free night calls between 12:30 A.M. and 5:30 A.M. on B-Rahtak and Kalam price plans. Figure 143: MTN Sudan has ventured into a partnership with sixteen main distributors to extend its network to all rural areas and main cities. MTN Sudan Pay as You Talk – Option Plans El Asli • Standard prepaid plan • Mainly for short calls B-Rahtak • Lower call tariffs with monthly fee • Mainly for those who talk a lot Pay as You Talk Plan Kalam • Charge per minute • Mainly for those who make long calls Source: Portio Research Ltd.  As a result of the decrease in ARPU from USD 16 in 2006 to USD 12 in 2007 owing to the existence of dual SIM cards - the MNO also came up with segmented pricing to target different user segments depending on their calling and messaging needs. This helped MTN in increasing use among subscribers. The following table summarises the key success factors for the operator. Factors Identified MTN Sudan Focus on strong network deployment Attractive pricing options Distribution network © 2009, Portio Research. All Rights Reserved 191
  • 192. Ranking The World’s Best Mobile Operators Etisalat Misr Egypt Ownership: Etisalat (66 percent), Egypt Post (20 percent), National Bank of Egypt (10 percent) and Commercial International Bank (4 percent) Launched: 2007 st Subscriber Base: 6.7 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 116.1 percent (2007 to 2008) st Market Share: 15.1 percent (31 December 2008) st Egypt Mobile Penetration: 54.6 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Egypt: • Population – 81.7 million people (31 December 2008) • Mobile market has witnessed significant growth during the past two years • Mobile subscribers in the country increased at a CAGR of more than 57 percent during the period 2006-2008 st The figure below shows the subscriber base of Egypt’s MNOs at end-2008. Subscriber Base (In Million) Figure 144: MNOs’ Subscriber Base – Egypt (In Million, End-2008) 30 20.1 20 17.6 10 6.7 0 MobiNil Vodafone Egypt Etisalat Misr Operator Source: Portio Research Ltd. The entrance of Etisalat Misr in to the Egyptian mobile market not only brought an end to the duopolistic structure but also resulted in the deployment of advanced mobile networks. 65 Etisalat Misr was the first to offer 3G based services in the country. The figure below shows the timelines of the deployment of 3G and above network by the various players. 65 Source: http://www.zawya.com/printstory.cfm?storyid=ZAWYA20080319050337&l=050300080319 192 © 2009, Portio Research. All Rights Reserved
  • 193. Ranking The World’s Best Mobile Operators Figure 145: Network Deployment – Egypt 2G 2.5G 3G 3.5G MobiNil – 1996 MobiNil – 2003 MobiNil – 2008 Vodafone – 1998 Vodafone – 2003 Vodafone – 2007 Etisalat Misr – 2007 Etisalat Misr – 2007 Etisalat Misr – 2007 Etisalat Misr – 2007 Source: Portio Research Ltd. Etisalat’s Strategies • Advanced 3G based Services: Etisalat Misr was able to grow its subscriber base 66 by nearly 1 million in a short span of seven weeks after its launch in May 2007. This can be attributed to the fact that Etisalat Misr was the first company to launch 3G based mobile services in the country. The wide array of services that the company offered to its subscribers – including mobile video and TV services, and mobile Internet – helped it to displace the incumbent operators, MobiNil and 67 Vodafone Egypt. The figure below shows the market share of the three operators from December 2006 to December 2008. Figure 146: Market Share (In Percent) 60% Market Share – Egypt (In Percent, December 2006 - December 2008) 51.5% 52.5% 49.8% 49.2% 47.9% 47.2% 46.6% 46.0% 45.3% 42.3% 41.1% 40.4% 39.9% 39.6% 11.7% 13.0% 14.1% 15.1% 9.8% Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 50% 40% 48.5% 47.5% 46.0% 68 43.7% 30% 20% 10% 4.2% 0.0% Dec-06 Mar-07 7.2% 0.0% 0% Jun-07 Sep-07 Month Etisalat Misr MobiNil Vodafone Egypt Source: Portio Research Ltd. • Attractive Options: Etisalat Misr primarily focused on the quality of service rather than just slashing prices to stimulate demand for its services. However, the company launched a new scheme to penetrate the prepaid consumer segment. The company offered its subscribers ‘Life Time Free Minutes’ under which subscribers 66 Source: http://www.arabianbusiness.com/500043-world-view?ln=en Source:http://www.etisalat.ae/index.jsp?lang=en&type=content&currentid=10c8e15c0b56a010VgnVCM1000000a 0a0a0a____&contentid=2e0ae65d78562110VgnVCM1000000c24a8c0RCRD&parentid=fa58800d1f52a010VgnVC M1000000a0a0a0a____ 68 Please note: The figures may not add up to 100 percent because of rounding off errors. 67 © 2009, Portio Research. All Rights Reserved 193
  • 194. Ranking The World’s Best Mobile Operators were offered five minutes free every month. The main objective of this scheme was to outbid its peers who started offering a lifetime prepaid service and per second billing to subscribers. • Content, Marketing and Distribution Channel: With the launch of an advanced 3G network, Etisalat Misr tried to penetrate the market by offering exclusive content to its subscribers. For instance, Etisalat went into partnership with football team FC Barcelona, which gave it rights to co-brand merchandise and use content to broadcast it on its mobile networks in its operational regions. In addition, the company also introduced some pre-launch schemes that helped it to bolster its position in the market. One such offer allowed a subscriber to book a number that was similar to his current number (of MobiNil or Vodafone Egypt). In order to penetrate the market, the company also signed distribution agreements with companies such as I2, Modern Distribution Co. and Sky Distribution Company. The MNO’s primary objective was to open sale points in strategic locations in Egypt including popular malls and prominent neighborhoods. Figure 147: Etisalat’s Strategies Etisalat’s Strategies Exclusive Content Marketing Distribution Source: Portio Research Ltd. • 194 Positioning: Etisalat Misr positioned itself as the operator that offered better services at lower costs than its peers. A late-2007 survey found that nearly 40 percent of subscribers would switch to the Etisalat network if given the option to keep the same number. The corresponding figures for Vodafone Egypt and MobiNil stood at 13 percent and 8 percent respectively. This is shown in the figure below. © 2009, Portio Research. All Rights Reserved
  • 195. Ranking The World’s Best Mobile Operators Figure 148: MNO Choice – Egypt (December 2007)* 8.0% 13.0% 24.0% 40.0% 15.0% Etisalat Misr Vodafone Egypt MobiNil Satisfied with Current MNO Can't Say Source: Makoob Research *If the subscriber was allowed to use the same number and move to a different MNO With the launch of the Mobile Number Portability Scheme in April 2008, leading Egyptian operator MobiNil witnessed an increase in subscriber churn, as the earlier survey had predicted. This is shown in the figure below. Figure 149: Monthly Churn – MobiNil (In Percent, Q1 2007 – Q4 2008) 12% MNP Introduced Monthly Churn (In Percent) 10% 8% 6% 4% 2% 0% Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Quarter Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 195
  • 196. Ranking The World’s Best Mobile Operators The following table summarises the key success factors for the operator: Factors Identified Etisalat Misr Egypt Advanced 3G based services Attractive options Content, marketing and distribution channel Positioning 196 © 2009, Portio Research. All Rights Reserved
  • 197. Ranking The World’s Best Mobile Operators Chapter 12 Other Leading MNOs’ Strategies © 2009, Portio Research. All Rights Reserved 197
  • 198. Ranking The World’s Best Mobile Operators Other Leading MNOs’ Strategies China Mobile Ownership: State-owned enterprise of People’s Republic of China Government Launched: 1997 st Subscriber Base: 457.2 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 23.8 percent (2007 to 2008) st China’s Mobile Penetration: 47.8 percent (31 December 2008) st Market Share: 71.9 percent (31 December 2008) Technology: GSM and TD-SCDMA Market Environment – China: • Largest mobile market worldwide • Dominated by the big two – China Mobile and China Unicom • Mobile penetration still below 50 percent • Biggest operator China Mobile launched 3G in 2008 • Huge number of potential subscribers in rural areas China Mobile’s Strategies China Mobile Communications Corporation, better known as China Mobile, is the biggest MNO operating in the Chinese telecommunication market, accounting for nearly 72 percent of the market share at end-2008. It is also the world’s number one operator in terms of subscriber base, registering 457.2 million subscribers by end-2008. The figure below displays the subscriber base of the top five MNOs worldwide: Subscriber Base (In Million) Figure 150: 500.0 Top 5 MNOs Worldwide – Subscriber Base (In Million, End-2008) 457.2 400.0 300.0 200.0 133.4 85.7 100.0 77.0 72.1 Bharti Airtel India AT&T The US Verizon The US 0.0 China Mobile China Unicom Operator Source: Portio Research Ltd. Besides its dominance in the Chinese market, the operator also has a presence in Hong Kong and Pakistan (ZONG brand). The MNO has been able to maintain the largest subscriber base as a result of the following strategies depicted in the figure below: 198 © 2009, Portio Research. All Rights Reserved
  • 199. Ranking The World’s Best Mobile Operators Figure 151: China Mobile’s Success Strategies China Mobile Success Strategy Focus on Business Segment Targeting Rural Market Capital Expenditure 3G Development Source: Portio Research Ltd. Targeting the Rural Market Considering the fact that China is home to the largest population globally and the mobile penetration currently standing at just 47.8 percent (December 2008), there is a huge untapped market for the MNOs. The rural market contributed nearly 50 percent of the total subscriber growth for China Mobile in 2008. This market is providing the right stimulus for the operator’s growth, which has forced the MNO to implement the following strategies to increase its subscriber base: The rural market contributed nearly 50 percent of the total subscriber growth for China Mobile in 2008. This market is providing the right stimulus for the operator’s growth. • ‘Lower ARPU, lower Minutes of Usage (MoU), lower cost’: In order to drive rural market development, China Mobile has been aggressively following this strategy. Through better resource utilization and efficiency, it reduced its subscriber acquisition and service costs on a per subscriber basis • Economies of scale achieved through the ‘Lower ARPU, lower MoU, lower cost’ strategy was leveraged in its sales and marketing activities. It used mass broadcasting and economical advertising channels specifically catering to the rural market to boost its growth. • Low-cost distribution channels were also launched in rural areas. • Small denomination recharge and over-the-air-recharging was also promoted among the rural subscribers. Focus on the Business Segment China Mobile is making rapid growth in its corporate clientele with the total corporate subscriber base reaching 2.33 million accounts. The MNO has implemented the following strategies for its business segment: • The operator introduced a wide range of applications focussing on urban and rural development, education and environmental protection, etc. • China Mobile also enhanced the service provisions to multi-national corporate users and trans-provincial users • Machine-to-machine business application was also introduced in various areas in the corporate arena. • In order to cater to the demand for mobile office, production monitoring and service management, China Mobile promoted industry-specific applications based on mobile-terminals. The figure below displays the key industry-specific applications introduced by the MNO in the Chinese market: © 2009, Portio Research. All Rights Reserved 199
  • 200. Ranking The World’s Best Mobile Operators Figure 152: China Mobile’s Industry-specific Applications Source: Portio Research Ltd. Capital Expenditure In order to meet the demands of escalating subscriber numbers, voice usage volume, valueadded business and also to the needs of reconstruction after unforeseen circumstances, such as snowstorms and earthquakes, the MNO’s capital expenditure volume reached nearly USD 19.6 billion (RMB 136.3 billion) in 2008. The operator intends to achieve the following with the planned CAPEX budget for 2009, 2010, and 2011: • • Further aid in the development of value-added business • Integrate the 2G/3G network • Sustain the leading position in the Chinese market • 200 Cater to increasing market demand Reconstruction after natural disasters © 2009, Portio Research. All Rights Reserved
  • 201. Ranking The World’s Best Mobile Operators Figure 153: Capital Expenditure – China Mobile (In USD Billion, 2008-2011F) CAPEX (In USD Billion) 25.000 19.6 20.000 19.3 18.9 15.9 15.000 10.000 5.000 0.000 2008 2009F 2010F 2011F Year Source: Company Annual Report F – Forecasted In 2009, the operator plans to spend 76 percent of the budget on the integration of 2G/3G and the rest for 2G wireless networks, out of which 70 percent will be used for network construction in rural areas. 3G Development The operator is making rapid strides in the development of 3G technology in the Chinese wireless market. China Mobile is leveraging the existing 2G core network and launching innovative 3G services for its subscribers. The MNO has introduced 3G dual mode handsets, which have inter-operability with 2G. It is also sharing the 2G core network, supporting systems and business platforms. On the marketing front, China Mobile has launched the unique 3G logo, while keeping the brand structure unchanged. The following table lists down the key factors that have driven the success of the operator: Factors Identified China Mobile Target Rural Market Focus on Business Segment Capital Expenditure 3G Development © 2009, Portio Research. All Rights Reserved 201
  • 202. Ranking The World’s Best Mobile Operators AT&T The US Ownership: AT&T Group Launched: 1996 st Subscriber Base: 77.0 million (31 December 2008) Y-o-Y Subscriber Growth Rate: 9.9 percent (2007 to 2008) st US Mobile Penetration: 86.6 percent (31 December 2008) st Market Share: 29.2 percent (31 December 2008) Technology: GSM and WCDMA (HSUPA) Market Environment – The US: • Largest North American mobile market • Dominated by the big four – AT&T, Verizon, T-Mobile and Sprint • Among the most advanced mobile markets worldwide • Strong presence of enterprise segment in the mobile industry • Market experiences high ARPU generation • Subscribers have both high awareness and technical know-how of data services AT&T’s Strategies The US is a highly competitive market with key MNOs AT&T, Verizon, Sprint and T-Mobile striving hard for greater market share. Currently, AT&T is the leading wireless operator in the US accounting for 29 percent of the market in 2008. The MNO registered the largest subscriber base (77 million) in 2008 for the US wireless market and ranks fourth in the world in terms of wireless subscribers at end-2008. Figure 154: 28.9 22.5 AT&T The US 11.6 11.0 10.7 Vodafone The Netherlands 12.3 Cosmote Greece 12.3 Vodafone Italy 12.4 Nextel Brazil 13.7 Nextel Argentina 19.3 20 10 Vodafone Spain Telenor Norway Proximus (Belgacom) Belgium 0 Rogers Canada Monthly APPU (in USD) 30 Top 10 MNOs Worldwide – Monthly Average Profit Per User (In USD, 2008) Operator Source: Portio Research Ltd. 202 © 2009, Portio Research. All Rights Reserved
  • 203. Ranking The World’s Best Mobile Operators In Fortune magazine’s 2009 list of Most Admired companies, AT&T ranked number one in the telecommunication industry. The MNO has practised the following success strategies: Figure 155: AT&T’s Success Strategies Source: Portio Research Ltd. • • Content Delivery on Portals: The operator has started offering unique contents on portals such as AT&T blue room and AT&T Smart Limits.  Blue room provides features such as exclusive sports, music, gaming, live performances, original sports contents and video, wide range of commentary on different topics, to name a few.  AT&T Smart Limit collates the wireline, wireless, Internet and video information into one online destination via this portal. Additionally, AT&T has also ventured into partnership with content providers such as TotalVid, Akimbo, Vongo and MobiTV. This has been done to enhance the broadband experience through differentiated entertainment-related services. Wireless Service Offering Portfolio: AT&T has introduced a host of attractive and exciting service offerings in the wireless space. Some of the most innovative services include the following:  MobiTV: This service allows users to view news, sports, entertainment, etc., from more than 30 channels (MSNBC, CNBC, FOX Sports, Discovery Channel, to name a few) on their mobile phones.  Home Monitoring Service: AT&T has launched one of the most revolutionary services which integrates wireless and Internet services and this service is available nationwide. Home Monitoring equips the users with the flexibility of accessing streaming digital video and real-time data virtually anytime and from any place through personal computers as well as AT&T wireless devices.  AT&T Unity: This service offers subscribers free domestic calling to and from AT&T wireless and wireline phones. Through the AT&T Unity plan, the operator has brought together home, business and wireless calling. The following table lists the key factors that have led to the success of the operator. © 2009, Portio Research. All Rights Reserved 203 AT&T has partnered with content providers such as TotalVid, Akimbo, Vongo and MobiTV to provide differentiated entertainmentrelated services.
  • 204. Ranking The World’s Best Mobile Operators Factors Identified AT&T The US Mobile TV and Video Experience Content Delivery on Portals Wireless Service Offering Portfolio 204 © 2009, Portio Research. All Rights Reserved
  • 205. Ranking The World’s Best Mobile Operators Chapter 13 Summary and Conclusions © 2009, Portio Research. All Rights Reserved 205
  • 206. Ranking The World’s Best Mobile Operators Summary and Conclusions Traditionally, corporate performance in the mobile industry is measured in a number of ways: Handset vendors are generally measured based on the number of units shipped and on market share, globally and regionally. Equipment vendors are measured on revenues and profits and market share, and content/application companies tend to be measured on numbers of downloads/users/players and on revenues and profits. Performance at mobile network operators tends to be measured by the number of subscribers, gross revenues, ARPU, churn, data as a percentage of service revenues and profits, as well as market share, but that is generally a sub-set of subscriber numbers within each national market, so not useful as a measure internationally. These measures are fine, but they all suffer from certain shortcomings. Subscriber numbers: As a measure, subscriber numbers shows the size an MNO has achieved, and hence this demonstrates market share within any given market. However, there are limitations to using this metric as a measure of the ‘best’ networks in the world. The data is obviously dependant on the population of each country and the number of competitors working in each market, and it does not fully take into account churn, customer service, market saturation, profitability and so on. China Mobile is the biggest single network in the world as measured by subscriber numbers, and this is down to a number of factors: China is one of the largest countries in the world, China has the largest population in the world and China Mobile faces very few competitors in its huge domestic market. Of course, the management running China Mobile deserves a lot of credit for the sheer size and scale of the operation they run. Managing that many customers on a single network is an immense task, but it is a task which would surely be even harder if they faced another five or six competitors. Revenues: Again, as a measure of the world’s ‘best’ networks, measuring gross revenues is another flawed measure, as there are clearly vast differences in wealth, prosperity and consumer spending power in different parts of the world. Measuring the performance of an MNO by looking at gross revenues in dollar values is not a fair measure of MNO performance when comparing the USA to India, or the UK to Bangladesh, or Germany to Algeria, etc. ARPU has long been used as one of the most popular performance measurement indicators of the mobile industry. However, again this favors the wealthy nations of North America, Western Europe and certain parts of Eastern Asia, so while ARPU makes an excellent yardstick for comparing corporate performance within one national market, or for comparing the performance of one MNO over a period of time, it is not a great way to find the ‘best’ MNOs in the world, or even in each region. ARPU figures achieved by operators in countries in the emerging markets cannot be compared fairly with the high ARPU we see in wealthy markets in the most developed parts of the world. In this report, we have attempted to take all these well known performance measurements and modify them in order to study hundreds of MNOs around the world using a fair set of criteria. We have developed several new performance measurements and we have modified these more traditional measurements, and then we have blended them all together to try to truly identify the ‘best’ MNOs in each major geographical region. The mobile and wireless industry is one of the most aggressive growth sectors in the world today. Even the current economic slowdown has not stopped its growth in many markets around the globe. Worldwide, 2007 to 2011 is a period of particular strategic importance to the mobile industry, with worldwide mobile penetration climbing from 50 percent in 2007 to a forecast 75 percent by the end of 2011. As the more advanced markets have become saturated, the focus of the industry has now split, with the more advanced markets focused on data services while the developing markets continue to pursue growth and market share. 206 © 2009, Portio Research. All Rights Reserved
  • 207. Ranking The World’s Best Mobile Operators The mobile industry was still a very voice-centric business in 2007, but after 2011 many markets worldwide will be far more concentrated on non-voice mobile services. Mobile phones are changing from primarily being voice communication devices to become pocket computers, personal organizers, mobile entertainment and lifestyle devices and anytimeanywhere Internet access portals. MNOs in the most developed markets are now focused on growing non-voice mobile services, reducing churn and increasing ARPU. Markets are fiercely competitive and voice margins are under intense pressure, and MNOs have been working very hard in recent years developing mobile data services, to increase the share of service revenues coming from non-voice services. The tough economic climate in 2008 and 2009 has added pressure to the whole industry, and with voice prices being pushed harder than ever, MNOs have been relying heavily on advanced handsets, advanced mobile data services and mobile broadband service offerings to achieve differentiation and hold on to valuable customers. At the same time, MNOs in developing markets continue to focus on organic growth, network roll-out and winning market share in fast growing markets. These operators face many challenges of their own, including developing networks in extremely low-ARPU rural markets, delivering advanced 3G services to key cities and maintaining Quality of Service (QoS). Churn and customer retention is another battleground altogether in developing markets, where the subscriber base tends to be predominantly prepaid. In low ARPU markets many subscribers tend to use only very basic voice and SMS services, and differentiation is tough to achieve, adding crushing pressure to service margins. This study has used a variety of new performance measurement indices to look at MNOs across all regions and understand how they are performing in relation to one another. The research we conducted has looked at many MNOs using both the traditional measurements and our range of new measurements. This study identified some of the leading players in the industry and their successful strategies to win, and keep, their subscribers. In this summary, we start with the more traditional KPIs (key performance indicators), then we summarize our new performance measurements, and then we blend the old with the new to identify leading players in each major geographical region. © 2009, Portio Research. All Rights Reserved 207
  • 208. Ranking The World’s Best Mobile Operators Traditional KPIs The three following tables highlight the top 10 players in each region for the three traditional KPIs – Total Subscribers, Total Revenues and ARPU. Table 44: Top 10 Operators by Subscribers – Regional (End-2008) Region Rank Asia Pacific Europe North America Latin America Middle East and Africa 1 China Mobile MTS Russia AT&T The US Telcel Mexico TCI Iran 2 China Unicom VimpelCom Russia Verizon The US Vivo Brazil Vodacom South Africa 3 Bharti Airtel India MegaFon Russia Sprint The US Claro Brazil MTN Nigeria 4 Telkomsel Indonesia T-Mobile Germany T-Mobile The US TIM Brasil MobiNil Egypt 5 Reliance Communication India Turkcell Turkey Rogers Canada Comcel Colombia Vodafone Egypt 6 Vodafone India Vodafone Germany Bell Mobility Canada Oi Brazil Zain Nigeria 7 NTT DOCOMO Japan Telecom Italia Telus Mobility Canada Movistar Mexico MTN South Africa 8 Smart The Philippines Orange France Claro Argentina Globacom Nigeria 9 Idea Cellular India Movistar Spain Movistar Argentina Djezzy (Orascom) Algeria 10 KDDI Japan Kyivstar Ukraine Telecom Personal Argentina Mobily Saudi Arabia Rather obviously, the subscriber base of many leading MNOs is a simple product of the size of the market that each MNO operates within. The top 10 for the Asia Pacific region is largely dominated by China and India; Europe is dominated by Russia, Germany and Turkey; North America sees the USA dominate Canada and the top ten for Latin America is dominated by Brazil, Mexico and Argentina. Only the least developed region in the world, Africa and the Middle East shows some less-predictable variety, though of course it’s no real surprise to see MNOs operating in Nigeria, Egypt and South Africa high on the list. 208 © 2009, Portio Research. All Rights Reserved
  • 209. Ranking The World’s Best Mobile Operators Table 45: Top 10 Operators by Total Revenues – Regional (2008) Region Rank Asia Pacific Europe North America Latin America Middle East and Africa 1 China Mobile Orange France AT&T The US Telcel Mexico Vodacom South Africa 2 NTT DOCOMO Japan Movistar Spain Verizon The US Vivo Brazil MTN South Africa 3 KDDI Japan Telecom Italia Sprint The US TIM Brasil Etisalat The UAE 4 SoftBank Japan SFR France T-Mobile The US Claro Brazil MTN Nigeria 5 SK Telecom South Korea T-Mobile Germany Rogers Canada Movistar Venezuela TCI Iran 6 China Unicom Vodafone Germany Telus Mobility Canada Oi Brazil Maroc Telecom Morocco 7 KTF South Korea O2 The UK Bell Mobility Canada Comcel Colombia Vodafone Egypt 8 Bharti Airtel India Vodafone Spain Movistar Mexico Djezzy (Orascom) Algeria 9 Telstra Australia Vodafone The UK Movistar Argentina MobiNil Egypt 10 LG Telecom South Korea Vodafone Italy Movilnet Venezuela Partner Communications Israel As with the previous table, these results are again quite predictable. The top ten MNOs in the Asia Pacific region are dominated by China, Japan and South Korea – China through the sheer size of the market and Japan and South Korea being widely acknowledged as two of the most advanced mobile markets in the world. The top ten for Europe is clearly made up entirely from MNOs in the “Big 5” wealthy Western European nations. In North America the USA dominates Canada again and in Latin America again we see the largest markets – Mexico and Brazil – taking most of the top ten. The Africa and Middle East region shows some changes, the list topped unsurprisingly by the leading MNOs in South Africa, a country always at the very forefront of regional development. © 2009, Portio Research. All Rights Reserved 209
  • 210. Ranking The World’s Best Mobile Operators Table 46: Top 10 Operators by Monthly ARPU – Regional (2008) Region Rank Asia Pacific Europe North America Latin America Middle East and Africa 1 KDDI Japan 3 The UK Rogers Canada Nextel Brazil Etisalat The UAE 2 NTT DOCOMO Japan Bouygues France Telus Mobility Canada Nextel Argentina Partner Communications Israel 3 Vodafone Australia Vodafone Ireland Sprint The US Nextel Peru Cellcom Israel 4 Telstra Australia O2 Ireland Verizon The US Movistar Venezuela Pelephone Israel 5 SoftBank Japan Orange Switzerland Bell Mobility Canada Digitel Venezuela du The UAE 6 SK Telecom South Korea Orange Austria AT&T The US Entel PCS Chile Mobily Saudi Arabia 7 Optus Australia Netcom Norway T-Mobile The US TIM Brasil MTN Syria 8 Vodafone New Zealand 3 Austria Movilnet Venezuela Zain Jordan 9 SingTel Singapore Meteor Ireland Movistar Chile MTN South Africa 10 Starhub Singapore Telenor Norway Iusacell Mexico Cell C South Africa Of the three most popular traditional KPIs, ARPU is certainly the one that offers the best way to compare corporate performance between MNOs, but obviously the metric shows wide variance between rich and poor economies. In this ARPU table we see the Asia Pacific region top ten dominated by the wealthier Asian markets, particularly noting the Australian MNOs; the European top ten is made up entirely from countries from Western and Northern Europe, particularly noting MNOs in Ireland; in North America the Canadian MNOs get some revenge over their large neighbour to the South; Latin America shows a more mixed spread, with MNOs in Venezuela and Chile placing higher in the table (both markets are quite strong SMS markets), and in Africa and the Middle East we see South African MNOs pushed down the table by players from countries in the Middle East. So it is clear that the traditional KPIs are very useful for comparing MNOs within a country, and they are useful for comparing MNOs within markets of comparable population and economic wealth, but beyond this the limitations start to weaken any further comparisons. In the following table we offer a table showing the top 20 MNOs worldwide as measured by these traditional KPIs we have already discussed, plus Churn and Data as a Percentage of Total Revenue. 210 © 2009, Portio Research. All Rights Reserved
  • 211. Ranking The World’s Best Mobile Operators Table 47: Top 20 Operators by different KPIs - Worldwide (2008) KPI Rank Subscribers Total Revenues Monthly ARPU Monthly Churn Data as a Percentage of Total Revenues 1 China Mobile China Mobile 3 The UK NTT DOCOMO Japan Smart The Philippines 2 China Unicom AT&T The US Bouygues France KDDI Japan Globe The Philippines 3 Bharti Airtel India Verizon The US Vodafone Ireland SingTel Singapore SoftBank Japan 4 AT&T The US NTT DOCOMO Japan O2 Ireland Chunghwa Taiwan NTT DOCOMO Japan 5 Verizon The US Sprint The US Orange Switzerland T-Mobile Germany KDDI Japan 6 Telkomsel Indonesia KDDI Japan Rogers Canada Starhub Singapore Orange Austria 7 MTS Russia T-Mobile The US Orange Austria SoftBank Japan Mobilkom Austria 8 Reliance Communication India Orange France Netcom Norway Elisa Finland SingTel Singapore 9 Vodafone India SoftBank Japan Telus Mobility Canada Reliance Communication India Telkomsel Indonesia 10 Telcel Mexico Movistar Spain 3 Austria Telenor Sweden O2 The UK 11 NTT DOCOMO Japan Telecom Italia Meteor Ireland 3 Sweden Sun The Philippines 12 Sprint The US SFR France Nextel Brazil Telia Sonera Sweden Proximus Belgium 13 VimpelCom Russia Telcel Mexico KDDI Japan Tele2 Sweden 3 Austria 14 Vivo Brazil T-Mobile Germany Telenor Norway Mobilkom Austria Telecom Mobile New Zealand 15 MegaFon Russia Vodafone Germany NTT DOCOMO Japan Verizon The US 3 The UK 16 T-Mobile Germany SK Telecom South Korea Sunrise Switzerland China Mobile Vodafone Ireland 17 Claro Brazil O2 The UK Proximus Belgium Pannon Hungary 3 Italia 18 Turkcell Turkey Vodafone Spain SFR France T-Mobile Hungary O2 Germany 19 TIM Brasil Vodafone The UK Etisalat The UAE Vodafone Hungary Telstra Australia 20 Vodafone Germany China Unicom Sprint The US Nextel Brazil Optus Australia © 2009, Portio Research. All Rights Reserved 211
  • 212. Ranking The World’s Best Mobile Operators The next step in our evaluation involved blending together a whole range of performance measurements in order to understand not just which MNO has the most subscribers or makes the most money, but how various MNOs perform across a broader set of criteria. In order to compute such a ranking exercise we have followed three different approaches which are discussed in the sections below. Ranking 1: Traditional Approach This approach uses a quite traditional set of industry standards to compare various MNOs. These standards are listed below. • MNO’s Penetration in the Market – a measure of comparative market share • Subscriber Growth – not total subscribers • Technology Deployed • ARPU • Revenue Growth – not gross revenues • Data Revenue’s Contribution to Total Revenue • Postpaid Subscriber Share • Churn This list of performance measurements are the yardsticks normally used to evaluate the performance of an MNO, or close variations on those yardsticks, and here we blend them together to look at the combined result. As discussed, when applied to MNOs operating in different market conditions, these standards are subject to some basic limitations which are explained below again for clarity. Limitation The standards used in this blended traditional ranking are naturally inclined to favour MNOs in the more developed markets and give those markets a higher score than MNOs in developing markets. Rather obviously, the technology deployed by an operator is bound to be more advanced in developed countries compared to emerging markets. Likewise, ARPU, revenue and data revenue are highly dependent upon the financial conditions (affordability) of local users, where again developed markets score over the developing ones. In a nutshell, when MNO performance is evaluated using these traditional performance measurement indicators, operators in the developed countries will always score higher than operators in developing markets, predominantly because of the disparity in economic conditions. This is evidenced by the fact that the top fifty in our ranking is completely dominated by MNOs in wealthy, highly developed markets. Indeed, the top hundred only features one MNO from Africa and one from Latin America, and a handful of MNOs from Eastern Europe. The section below illustrates the full rankings of worldwide MNOs using this blended traditional approach. 212 © 2009, Portio Research. All Rights Reserved
  • 213. Ranking The World’s Best Mobile Operators Figure 156: (2008) Top 20 MNOs Worldwide – Overall Ranking Using Traditional Approach 69 Rank 1 to 10 Rank 11 to 20 Orange France, 8.8 Etisalat The UAE, 8.8 Swisscom, 8.8 Telia Sonera Finland, 8.8 AT&T The US, 8.9 Telus Mobility Canada, 8.9 Elisa Finland, 8.9 Proximus Belgium, 8.9 SK Telecom, 8.9 3Austria, 8.9 3The UK, 9.0 Rogers Canada, 9.0 SingTel Singapore, 9.0 Telenor Norway, 9.0 Mobilkom Austria, 9.1 Orange Austria, 9.1 SoftBank Japan, 9.4 Verizon The US, 9.2 8 KDDI Japan, 9.5 Score 9 NTT DOCOMO Japan, 10.0 10 7 Operator Source: Portio Research Ltd. Table 48: MNOs Worldwide Ranked 1 to 20 – Overall Ranking Using Traditional Approach (2008) Rank MNO Score Rank MNO Score 1 NTT DOCOMO Japan 10.00 11 3 Austria 8.95 2 KDDI Japan 9.54 12 SK Telecom South Korea 8.91 3 SoftBank Japan 9.43 13 Proximus Belgium 8.89 4 Verizon The US 9.16 14 Elisa Finland 8.88 5 Orange Austria 9.10 15 Telus Mobility Canada 8.87 6 Mobilkom Austria 9.08 16 AT&T The US 8.86 7 Telenor Norway 9.02 17 Telia Sonera Finland 8.84 8 SingTel Singapore 9.00 18 Swisscom Switzerland 8.84 9 Rogers Canada 8.97 19 Etisalat The UAE 8.79 10 3 The UK 8.95 20 Orange France 8.78 69 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 213
  • 214. Ranking The World’s Best Mobile Operators Table 49: MNOs Worldwide Ranked 21 to 50 – Overall Ranking Using Traditional Approach (2008) Rank MNO Score Rank MNO Score 21 Netcom Norway 8.77 36 Movistar Spain 8.43 22 Telstra Australia 8.76 37 Mobistar Belgium 8.41 23 DNA Finland 8.70 38 Sonofon Denmark 8.41 24 Bouygues France 8.66 39 O2 Ireland 8.40 25 SFR France 8.65 40 T-Mobile Austria 8.40 26 Sunrise Switzerland 8.62 41 Cellcom Israel 8.38 27 Vodafone Ireland 8.59 42 KTF South Korea 8.38 28 3 Sweden 8.55 43 KPN The Netherlands 8.34 29 8.54 44 Telia Sonera Sweden 8.31 8.53 45 Optus Australia 8.30 31 Telenor Sweden Partner Communications Israel Orange Switzerland 8.52 46 VIP Serbia 8.28 32 Sprint The US 8.52 47 Chunghwa Taiwan 8.27 33 Bell Mobility Canada 8.51 48 Vodafone Spain 8.26 34 T-Mobile The US Vodafone The Netherlands 8.51 49 Telia Denmark 8.24 8.47 50 Pelephone Israel 8.23 30 35 214 © 2009, Portio Research. All Rights Reserved
  • 215. Ranking The World’s Best Mobile Operators Table 50: MNOs Worldwide Ranked 51 to 170 – Overall Ranking Using Traditional Approach (2008) Rank MNO Rank MNO Rank MNO 51 TDC Denmark 91 131 Telenor Serbia 52 O2 The UK 92 132 Claro Peru 53 O2 Czech Republic 93 Orange Poland CSL New World Mobility Hong Kong Vodafone Hungary 133 Digitel Venezuela 54 Vodafone New Zealand 94 PCCW Mobile Hong Kong 134 Turkcell Turkey 55 Orange Slovakia 95 T-Mobile Montenegro 135 Claro Argentina 56 Starhub Singapore 96 Optimus Portugal 136 MTN Syria 57 MTS Belarus 97 mt:s Serbia 137 Telcel Mexico 58 Tele2 Sweden 98 Telecom Italia 138 Globe The Philippines 59 T-Mobile Slovakia 99 HTIL Hong Kong 139 Telefonica Peru 60 Taiwan Mobile 100 Movilnet Venezuela 140 Claro Brazil 61 101 PTC Poland 141 Oi Brazil 102 Movistar Argentina 142 Celcom Malaysia 63 T-Mobile The Netherlands Telecom Mobile New Zealand Vodafone Australia 103 Smart The Philippines 143 Iusacell Mexico 64 T-Mobile Croatia 104 Movistar Venezuela 144 Movistar Mexico 65 M1 Singapore 105 Meteor Ireland 145 TIM Brasil 66 Etisalat Misr Egypt 106 Vivatel Bulgaria 146 Telefonica Slovakia 67 FeT Taiwan 107 147 Movistar Colombia 68 Mobiltel Bulgaria 108 148 Vivo Brazil 69 Vodafone Germany 109 Vodafone Italy Telecom Personal Argentina du The UAE 149 Sun The Philippines 70 O2 Germany 110 Vodafone Greece 150 Nextel Peru 71 T-Mobile Germany 111 MTN Iran 151 Avea Turkey 72 Orange The UK 112 Omnitel Lithuania 152 Maroc Telecom Morocco 73 T-Mobile Czech Republic 113 Mobily Saudi Arabia 153 DiGi Malaysia 74 T-Mobile Hungary 114 Movistar Chile 154 Globacom Nigeria 75 Cosmote Greece 115 China Mobile 155 Safaricom Kenya 76 Vodafone The UK 116 Tele2 Lithuania 156 MTS Russia 77 Pannon Hungary 117 T-Mobile The UK 157 TCI Iran 78 Velcom Belarus 118 Promonte Montenegro 158 Vodafone Egypt 79 LG Telecom South Korea 119 BITE Lithuania 159 Nextel Argentina 80 TMN Portugal 120 China Unicom 160 81 Vodafone Czech Republic 121 Maxis Malaysia 161 82 Orange Spain 122 Excelcomindo Indonesia 162 Zain Iraq Reliance Communication India Zain Nigeria 83 SmarTone Hong Kong 123 Wind Hellas Greece 163 MTN Nigeria 84 E-Plus Germany 124 Telkomsel Indonesia 164 Banglalink Bangladesh 85 Vodafone Portugal 125 Entel PCS Chile 165 Brasil Telecom 86 Globul Bulgaria 126 Nextel Brazil 166 Bharti Airtel India 87 3 Italia 127 Base Belgium 167 Vodafone India 88 Tele2 Croatia 128 Comcel Colombia 168 MegaFon Russia 89 Polkomtel Poland 129 Wind Italy 169 MobiNil Egypt 90 VIPnet Croatia 130 Vodafone Romania 170 MTS Ukraine 62 © 2009, Portio Research. All Rights Reserved 215
  • 216. Ranking The World’s Best Mobile Operators Table 51: MNOs Worldwide Ranked 171 to 204 – Overall Ranking Using Traditional Approach (2008) Rank Rank MNO Rank 171 Meditel Morocco 183 Idea Cellular India 195 life:) Ukraine 172 VimpelCom Russia 184 Zain Sudan 196 Tigo DR Congo 173 Hutch Thailand 185 MTN Sudan 197 Kyivstar Ukraine 174 Zain Jordan 186 Nedjma Algeria Tigo Colombia 187 199 Zain Kenya 176 Asiacell Iraq 188 Tunicell Tunisia GrameenPhone Bangladesh Vodafone Turkey 198 175 200 Mobilink Pakistan 177 MTN Afghanistan 189 Cell C South Africa 201 Beeline Ukraine 178 AIS Thailand 190 DTAC Thailand 202 Sibir Telecom Russia 179 Claro Chile 191 Djezzy Algeria 203 Celtel DR Congo 180 Vodacom South Africa 192 Tele2 Russia 204 Vodacom DR Congo 181 MTN South Africa 193 Telenor Pakistan 182 216 MNO MNO Tunisiana Tunisia 194 True Move Thailand © 2009, Portio Research. All Rights Reserved
  • 217. Ranking The World’s Best Mobile Operators Ranking 2: Normalised Approach We have established that the traditional measures do not offer a fair way to compare MNOs across different regions and economic conditions, and the rankings from our blended traditional approach favour MNOs in developed markets. In order to address this imbalance, in this study we have developed a range of ten new performance measurements, by normalising the traditional standards. Obviously you have read our detailed results from running each of these ten new performance measurements over the body of this report. Now we have blended those ten new measurements together to create a new overall ranking based ONLY on the ten new normalised metrics, and again we have cast this across many MNOs from around the world. These ten new performance measurements are listed below. • MNO ARPU PPP • ARPU as a percentage of disposable income • Revenue growth of the MNO • MNO Profitability • MNO growth vs. market growth • Significance of the MNO • Successful growth of revenues from data services • Measuring subscriber loyalty • Postpaid penetration measure • Technology measure As you will see from the new ranking, this normalisation has helped many MNOs from developing nations to compare more favorably with their counterparts in highly developed markets, now metrics are being compared across a more level playing field. However, this approach also has flaws, which are explained below. Limitations The normalised approach adopted here slightly turns the tables in the favour of operators in developing nations. For instance, when we normalise ARPU in a country with the disposable income of its citizens, it gives developing markets an edge over developed ones as the disposable income in developing markets tends to be much lower than in developed nations. When measuring ARPU as a percentage of disposable income, this twists the data in favour of MNOs in the developing markets. Another reason why subscribers in developing markets spend a higher proportion of their disposable income on their mobile phones is because they often do not have access to fixed wireline telecoms services. In countries where wireline penetration is low, such as in many African nations, mobile penetration has quickly exceeded wireline penetration. For many people in these countries, a mobile phone is proving to be their first ever experience of telecoms services, and this drives ARPU as a percentage of [low] disposable income much higher, when compared (normalised using PPP) to mobile phone users in developed markets who also have access to a fixed line phone and a separate broadband connection. Furthermore, in many countries, particularly in Asia, mobile phones are providing people with their first ever connection to the Internet, and this again is effectively driving up ARPU when compared to the developed nations where fixed line broadband is already so prevalent. Another of our ten new performance measurements looks at the speed of growth an MNO has achieved. Here again MNOs in the developing markets gain some advantage. MNOs operating in the more developed nations have built economies of scale into the costs of network infrastructure, which have helped bring down the price of GSM (and other standards of) equipment. This helps MNOs in developing nations to roll out network growth faster and cheaper than their counterparts in the developed world were doing ten years earlier. MNOs in developing nations also receive investment from overseas which further speeds the process of network roll out. © 2009, Portio Research. All Rights Reserved 217
  • 218. Ranking The World’s Best Mobile Operators Similar factors are at play when looking at our tenth new performance measurement index, the Technology Measure. Again, we see technology moving forward much faster in some developing nations, where we see the ‘leap frog’ effect as MNOs quickly build out 3G and 3.5G networks only a few years after establishing their first 2G operations. In many of the developed nations, 3G was a hyped-up dream for years before the equipment, standards, handsets, content, software and marketing was all in place to make it a reality. Now these issues have all been resolved, MNOs in developing markets can ‘leap frog’ over interim 2.5G and 3G technologies and move straight to fast 3G and 3.5G networks. All of these factors must be considered, and you will see from the new rankings listed over the next few pages that these new performance measurements do seem to favour the MNOs in the developing markets over those in the developed markets. The top 20 is completely dominated by players from developing nations. The section below shows the ranks of worldwide MNOs using the normalised approach. Figure 157: (2008) Top 20 MNOs Worldwide – Overall Ranking Using Normalised Approach 70 Rank 1 to 10 Rank 11 to 20 Tunisiana Tunisia, 7.9 NTT DOCOMO Japan, 7.9 Zain Sudan, 7.9 Vodafone Egypt, 8.1 China Mobile, 8.1 Asiacell Iraq, 8.1 MTN Syria, 8.1 Smart The Philippines, 8.0 3 Etisalat The UAE, 8.2 Claro Peru, 8.2 Safaricom Kenya, 8.3 Zain Iraq, 8.3 MTN Nigeria, 8.5 Comcel Colombia, 8.3 4 Mobily Saudi Arabia, 8.5 5 Movilnet Venezuela, 8.7 Score 6 Etisalat Misr Egypt, 8.8 7 Movistar Venezuela, 9.0 8 du The UAE, 9.1 9 Telefonica Peru, 10.0 10 2 1 0 Operator Source: Portio Research Ltd. 70 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. 218 © 2009, Portio Research. All Rights Reserved
  • 219. Ranking The World’s Best Mobile Operators Table 52: MNOs Worldwide Ranked 1 to 20 – Overall Ranking Using Normalised Approach (2008) Rank MNO Score Rank MNO Score 1 Telefonica Peru 10.00 2 du The UAE 9.07 11 Claro Peru 8.20 12 Etisalat The UAE 8.16 3 Movistar Venezuela 9.03 4 Etisalat Misr Egypt 8.84 13 MTN Syria 8.12 14 Asiacell Iraq 8.11 5 Movilnet Venezuela 8.75 15 China Mobile 8.08 6 7 Mobily Saudi Arabia 8.53 16 Vodafone Egypt 8.07 MTN Nigeria 8.48 17 Smart The Philippines 7.97 8 Comcel Colombia 8.34 18 Zain Sudan 7.93 9 Zain Iraq 8.30 19 NTT DOCOMO Japan 7.89 10 Safaricom Kenya 8.30 20 Tunisiana Tunisia 7.89 Table 53: MNOs Worldwide Ranked 21 to 50 – Overall Ranking Using Normalised Approach (2008) Rank MNO Score Rank MNO Score 21 MTS Belarus 7.88 36 Mobiltel Bulgaria 7.32 22 Globacom Nigeria 7.87 37 Globul Bulgaria 7.31 23 MobiNil Egypt 7.77 38 T-Mobile Croatia 7.30 24 mt:s Serbia 7.75 39 Orange France 7.29 25 Djezzy Algeria 7.65 40 Swisscom Switzerland 7.28 26 Telkomsel Indonesia 7.61 41 SK Telecom South Korea 7.26 27 MTN Iran 7.56 42 Vodafone Czech Republic 7.25 28 Telstra Australia 7.54 43 Proximus Belgium 7.24 29 SingTel Singapore 7.54 44 T-Mobile Slovakia 7.23 30 Maroc Telecom Morocco 7.53 45 O2 Czech Republic 7.23 31 Orange Slovakia 7.43 46 Cosmote Greece 7.20 32 MTN Afghanistan 7.42 47 7.20 33 Tunicell Tunisia 7.39 48 34 Telenor Norway 7.34 49 KPN The Netherlands Partner Communications Israel T-Mobile Montenegro 35 T-Mobile Czech Republic 7.32 50 Velcom Belarus 7.16 © 2009, Portio Research. All Rights Reserved 219 7.18 7.17
  • 220. Ranking The World’s Best Mobile Operators Table 54: MNOs Worldwide Ranked 51 to 170 – Overall Ranking Using Normalised Approach (2008) Rank MNO Rank MNO Rank MNO 91 SFR France 131 Vodafone Italy 52 GrameenPhone Bangladesh TCI Iran 92 Bell Mobility Canada 132 Elisa Finland 53 Movistar Colombia 93 MTS Russia 133 54 Rogers Canada 94 Pannon Hungary 134 55 Movistar Spain 95 Telia Sonera Sweden 135 3 Italia Reliance Communication India Orange Switzerland 56 Cellcom Israel 96 Nextel Argentina 136 Orange Spain 57 VIPnet Croatia 97 T-Mobile The Netherlands 137 T-Mobile Austria 58 KDDI Japan 98 Wind Italy 138 KTF South Korea 51 59 Vodafone Ireland 99 Promonte Montenegro 139 Sonofon Denmark 60 Starhub Singapore 100 Taiwan Mobile 140 Vodafone Germany 61 Mobilkom Austria 101 Tele2 Croatia 141 Sunrise Switzerland 62 T-Mobile Hungary 102 Polkomtel Poland 142 MegaFon Russia 63 Movistar Chile 103 M1 Singapore 143 Banglalink Bangladesh 64 Vodafone New Zealand 104 Vodafone Romania 144 VimpelCom Russia 65 Verizon The US 105 Kyivstar Ukraine 145 Base Belgium 66 Maxis Malaysia 106 Vodafone Spain 146 Tele2 Sweden 67 Zain Jordan 107 Orange Poland 147 Celcom Malaysia 68 Digitel Venezuela 108 Vodafone Hungary 148 Meteor Ireland 69 Globe The Philippines 109 Orange Austria 149 3 Austria 70 Telefonica Slovakia 110 Telenor Serbia 150 Optimus Portugal 71 Nextel Brazil 111 DNA Finland 151 Telecom Italia 72 Vivatel Bulgaria 112 Vodafone Portugal 152 Orange The UK 73 113 Telia Sonera Finland 153 TDC Denmark 114 Netcom Norway 154 Telenor Pakistan 75 Turkcell Turkey Telecom Personal Argentina Pelephone Israel 115 Claro Argentina 155 Vodafone India 76 Zain Nigeria 116 SoftBank Japan 156 Claro Brazil 77 Chunghwa Taiwan 117 3 The UK 157 O2 The UK 78 118 Nextel Peru 158 Bharti Airtel India 119 Omnitel Lithuania 159 life:) Ukraine 80 MTN Sudan Telecom Mobile New Zealand Movistar Argentina 120 Vivo Brazil 160 TIM Brasil 81 AT&T The US 121 China Unicom 161 3 Sweden 82 Telcel Mexico 122 PTC Poland 162 AIS Thailand 83 Telus Mobility Canada 123 MTS Ukraine 163 Mobilink Pakistan 84 FeT Taiwan 124 T-Mobile Germany 164 Excelcomindo Indonesia 85 Entel PCS Chile 125 165 Vodafone Greece 86 Mobistar Belgium 126 166 DiGi Malaysia 87 TMN Portugal 127 Bouygues France Vodafone The Netherlands BITE Lithuania 167 E-Plus Germany 88 Meditel Morocco 128 Avea Turkey 168 Telenor Sweden 89 Tele2 Lithuania 129 Oi Brazil 169 T-Mobile The US 90 O2 Ireland 130 Optus Australia 170 Movistar Mexico 74 79 220 © 2009, Portio Research. All Rights Reserved
  • 221. Ranking The World’s Best Mobile Operators Table 55: MNOs Worldwide Ranked 171 to 204 – Overall Ranking Using Normalised Approach (2008) Rank MNO Rank MNO Rank MNO 171 Wind Hellas Greece 183 Cell C South Africa 195 T-Mobile The UK 172 Telia Denmark 184 Idea Cellular India 196 Brasil Telecom 173 Sprint The US 185 PCCW Mobile Hong Kong 197 Hutch Thailand 174 Tigo Colombia 186 MTN South Africa 198 SmarTone Hong Kong 175 Vodacom South Africa 187 LG Telecom South Korea 199 Vodacom DR Congo 176 VIP Serbia 188 Vodafone Turkey 200 True Move Thailand 177 Zain Kenya 189 Sibir Telecom Russia 201 Claro Chile 178 Nedjma Algeria 190 DTAC Thailand 202 Tigo DR Congo 179 Vodafone Australia 191 Tele2 Russia 203 Celtel DR Congo 180 O2 Germany 192 Sun The Philippines 204 Beeline Ukraine 181 HTIL Hong Kong 193 182 Vodafone The UK 194 Iusacell Mexico CSL New World Mobility Hong Kong © 2009, Portio Research. All Rights Reserved 221
  • 222. Ranking The World’s Best Mobile Operators The table below further details the top three players ranked for each of the ten new performance measurements discussed in the main body of this report. This data again highlights the ranking bias towards MNOs operating in developing nations. Table 56: Top 3 Operators Worldwide for Performance Measurements – Normalised Approach (2008) Performance Measurement 2 3 1 Zain Sudan 2 Globacom Nigeria 3 life:) Ukraine 1 Tele2 Croatia 2 BITE Lithuania 3 Etisalat The UAE 1 Smart The Philippines 2 Telkomsel Indonesia MNO Profitability Nextel Argentina MTN Nigeria Revenue Growth of the MNO 1 Nextel Peru ARPU as a Percentage of Disposable Income Rank Nextel Brazil MNO Monthly ARPU PPP MNO 3 Wind Italy 3 1 Mobily Saudi Arabia 2 Movistar Venezuela 3 Smart The Philippines Data Revenue Measure 2 du The UAE Significance of the MNO 1 life:) Ukraine TDC Denmark MNO Growth vs. Market Growth 1 3 1 KDDI Japan 2 Chunghwa Taiwan 3 Telefonica Peru Postpaid Penetration Measure 2 NTT DOCOMO Japan Measuring Subscriber Loyalty Telkomsel Indonesia NTT DOCOMO Japan 1 2 3 Etisalat Misr Egypt 1 MTN Sudan 2 Vodacom DR Congo Technology Measure du The UAE Movilnet Venezuela 3 As we have discussed, there are a number of factors which seem to bias the results of these performance measurements in favour of the developing markets. However, this bias in the results does not entirely favour MNOs in developing markets without some merit. Many of the MNOs working in these markets have worked very hard to achieve rapid growth, maximum ARPU and minimum churn. Throughout the body of this report you have read many case studies detailing the successful strategies of these network operators. 222 © 2009, Portio Research. All Rights Reserved
  • 223. Ranking The World’s Best Mobile Operators The table below offers a brief summary of the key strategies adopted by MNOs which have featured high on this ranking list based on the ten new normalised performance measurements. Table 57: Key Strategies Identified for Performance Measurements – Normalised Approach Performance Measurement Key Strategies Identified High ratio of postpaid subscribers MNO Monthly ARPU PPP Focus on enterprise segment Innovative approach for non-voice services Target different segments with different services ARPU as a Percentage of Disposable Income Make services more attractive and affordable Complement voice services with data services Aggressive approach towards subscriber acquisition Revenue Growth of the MNO Services innovation Promotion of data services Increase network utilisation MNO Profitability Focus on high ARPU generation Innovative and attractive services Identify potential subscribers MNO Growth vs. Market Growth Customise product offerings Pioneer with attractive services Focus on network coverage Significance of the MNO Pioneer with attractive services Understand price sensitivity of the market Aggressive promotion of SMS Data Revenue Measure Make data services more user friendly Focus on enterprise segment High ratio of postpaid subscribers Measuring Subscriber Loyalty Attractive price plans Focus on quality of service Initial focus on postpaid segment Postpaid Penetration Measure Encourage the uptake of postpaid plans Attractive price plans Early start in advanced technologies Technology Measure Focus on network expansion and utilisation Launch services to match the technology High ratio of postpaid subscribers SUMMARY Innovation in services Promotion of data services Focus on enterprise segment © 2009, Portio Research. All Rights Reserved 223
  • 224. Ranking The World’s Best Mobile Operators Key strategies identified Driving growth: - Target services to key customer groups. Research we have conducted for this report and for other reports we have written in recent years, has repeatedly shown that services must be designed, tailored, packaged and marketed to suit the needs of specific segments of the market – teens, enterprise users, baby boomers, prosumers, etc. One size does NOT fit all. - Focus on basics. Ensure good network coverage, attractive (and clear, simple) price plans, keep prices competitive on basic services such as voice and SMS, make prices accessible on more advanced services to entice users to use more. - Innovate. Pioneer new services to key segments, such as the teens and young adults, innovate in marketing. - Keep an eye on quality. Ensure quality content partnerships and quality services. Partner with well recognized quality brands. Ensure network quality and quality of customer service, these will dramatically help churn reduction. Driving ARPU: - Focus on the postpaid segment. It is widely accepted that postpaid subscribers are higher value customers than prepaid subscribers. For MNOs, keeping a focus on the postpaid segment of the market helps to keep the customer base in the higher-value end of the market, and helps to combat churn. Enterprise customers obviously form an important sub-set within the postpaid market. - Customize. As noted above, our research has repeatedly shown the value of tailored content, services and tariffs to suit the needs of key segments of the market. - Package voice and data services together. Encourage postpaid subscribers to use more non-voice services by tempting them with attractive bundle deals. Package lots of data services into well priced tariffs, bundling lots of voice minutes, SMS, MMS and other data services in attractively priced deals. - Target the enterprise segment. - Fixed-mobile substitution. Our research shows many African MNOs taking a much greater share of subscribers’ disposable income than their counterparts in wealthier markets. Price voice tariffs to steal voice traffic from fixed networks. Combating churn: - Focus on postpaid. Again, try hard to drive prepaid customers onto postpaid deals. - Quality of service. As previously noted, focus on quality of network coverage, quality of service, innovative services and innovative marketing. - Competitive pricing. Keep tariffs competitive and focus on pricing that makes non-voice services affordable and accessible to customers. Growing data services: - Learn to love SMS. SMS continues to be the often un-loved hero of non-voice services revenues worldwide. Drop prices, push volumes, SMS accounts for over 65 percent of all non-voice service revenues worldwide, and will continue this lead for many years. - Ensure services are accessible. Data services must be easy to use, focus on simplicity, ease of service discovery and clear simple pricing. - Target markets. Yet again, ensure services are tailored and marketed to specific subsegments of the market, such as teens, enterprise segment, etc. Summary: - Focus on quality - Focus on innovation - Push postpaid tariffs - Segment your market - Clear pricing - Push data services - Love SMS 224 © 2009, Portio Research. All Rights Reserved
  • 225. Ranking The World’s Best Mobile Operators As one final measure to help us understand the limitations of using our ten new performance measurements it is useful to understand how the results are affected by regional market variations. The table below shows the regional mix of the top 20 operators for each performance measurement index. Table 58: Regional Mix of MNOs in Top 20 List for Each Performance Measurement – Normalised Approach (2008) Region Performance Measurement Latin America Total Asia Pacific Europe North America Middle East and Africa MNO Monthly ARPU PPP 3 7 5 3 2 20 ARPU as a Percentage of Disposable Income 2 0 0 3 15 20 Revenue Growth of the MNO 3 13 0 2 2 20 MNO Profitability 5 7 0 1 7 20 MNO Growth vs. Market Growth 4 12 0 0 4 20 Significance of the MNO 0 8 0 6 6 20 Data Revenue Measure 11 4 0 3 2 20 Measuring Subscriber Loyalty 8 11 1 0 0 20 Postpaid Penetration Measure 1 1 0 6 12 20 Technology Measure 2 1 0 4 13 20 TOTAL 39 64 6 28 63 200 This table clearly shows regional variation for several of the specific performance measurements. Normalised ARPU has balanced out quite well, with European and North American operators leading the way, as we might expect to see, these being the most advanced markets with the highest use of data services. By contrast, ARPU as a percentage of disposable income shows no entries at all for the European and North American regions, and the table is dominated by MNOs from Africa and The Middle East. As discussed previously, lower levels of disposable income slightly distort this figure, but more significantly, much lower penetration of wireline telecoms services boost the use of mobile phones in this region. In many parts of Africa and Asia, mobile phones are not only the first telecoms services many people have ever had access to, but they also offer many people a first chance to access the Internet and also a first chance to use banking services. As we have discussed in several reports we have previously published, traditional banking services are not available to large segments of the population in many developing countries. In such places, basic mobile payment services offer people a first chance to use banking services. Our best selling report ‘Strategies for Creating End-User Demand for Mobile Data Services’ profiled the GCASH service from Globe Telecom in The Philippines. Further, our market study ‘Strategies for Driving Data ARPU’ looked at the M-PESA mobile banking service from Safaricom in Kenya. © 2009, Portio Research. All Rights Reserved 225
  • 226. Ranking The World’s Best Mobile Operators Such case studies in countries like Kenya and the Philippines and also in Bangladesh show us that banking services are often not available to great segments of the population, and as mobile phone penetration grows, so simple banking services are being made available to people who previously did not have access to any banking services at all. Our study of MPESA (Safaricom, Kenya, see more on page 45 of this report) shows that poor banking infrastructure in Kenya meant that 80 percent of the population of almost 32 million people did not have access to banking services. Mobile penetration in Kenya is over 40 percent now, so in such conditions the mobile platform can extend basic banking services to a far larger segment of the population than existing banking infrastructure. Numerous research studies have also shown that bringing mobile telecoms to developing nations in Africa and Asia is also helping slightly to alleviate poverty. Extending telecoms services to small business owners in parts of Africa, to farmers in China and to entrepreneurs from Latin America to Asia, has been shown to boost business productivity and assist small businesses to grow. It is hardly surprising to see greater ‘ARPU as a percentage of disposable income’ in such countries, where previously large segments of the population have had no access at all to telephony and banking services. These issues help to show the enormous growth potential that still lies ahead for the mobile industry worldwide. At the present time, (time of writing: late May 2009), world population stands at approximately 6.8 billion, and total mobile subscriptions worldwide stands at approximately 4.5 billion, so worldwide mobile penetration is approximately 66 percent. Enormous potential for growth still exists around the world. Equipment vendors continue to build newer and more efficient equipment that will enable mobile networks to cover sparsely populated rural regions at cost-effective build-out prices. Research, such as this study, continues to show that mobile telecoms services are just as popular – or maybe even more popular – in low-ARPU developing markets as they are in the highly developed markets. At present, subscribers in these countries mostly lack the disposable income for such frivolous entertainment activities as mobile music, games, videos, etc. Once these services become affordable and viable in these markets, the opportunity to grow ARPU will grow rapidly. Massive opportunities still exist across Asia, Africa and the Middle East and Latin America, where the growth of mobile services is helping businesses and individuals, and in some ways aiding the global effort to relieve poverty and suffering. We see strong performances from a number of European operators when looking at MNO growth against the rest of the market, growth in profitability, and churn management. Operators in the Asia Pacific region seem to dominate in terms of generating revenues from data services, clearly that strength coming from Japan and South Korea in particular. Again we see operators in Africa and the Middle East leading the way in rapid technology development (the leap frog effect) and in the growth of the postpaid subscriber base too. Both the AME region and Latin America made positive entries here, but it must be remembered that these are typically the world’s lowest postpaid penetration markets, so these gains must be viewed from a very low starting point. Notable by their absence, few of these rankings feature MNOs from North America. Of course, this is another anomaly of the regional markets, as there are far fewer MNOs in North America being tracked in this study than in other regions. Also, with these new performance measures biased slightly in favour of the developing markets, North America is naturally left behind, as one of the wealthiest and most developed regions in the world. 226 © 2009, Portio Research. All Rights Reserved
  • 227. Ranking The World’s Best Mobile Operators Ranking 3: Blended Approach As we have discussed, there are strengths and weaknesses to measuring MNO performance using both the traditional KPIs and our ten new indices which level the economic playing field much more fairly. It remains that both approaches have their own limitations which inhibit the emergence of a complete and true picture of MNOs performance worldwide. The first approach favors developed markets, and the second one backs the developing nations. Hence, to nullify their biased nature, we have come up with a ranking which takes into account both the approaches and creates a much more balanced view for studying the performance of all mobile operators worldwide. The section below illustrates the ranks of worldwide MNOs using this new fully blended approach. Figure 158: (2008) Top 20 MNOs Worldwide – Overall Ranking Using Blended Approach 71 Rank 1 to 10 Rank 11 to 20 MTS Belarus, 8.6 Movilnet Venezuela, 8.7 Orange France, 8.8 Rogers Canada, 8.8 Swisscom Switzerland, 8.8 Proximus Belgium, 8.8 SoftBank Japan, 8.8 du The UAE, 8.8 SK Telecom South Korea, 8.8 Movistar Venezuela, 8.8 Mobilkom Austria, 8.9 Verizon The US, 8.9 Telstra Australia, 8.9 Telenor Norway, 9.0 SingTel Singapore, 9.1 Telefonica Peru, 9.1 KDDI Japan, 9.2 Etisalat Misr Egypt, 9.1 8 Etisalat The UAE, 9.3 Score 9 NTT DOCOMO Japan, 10.0 10 7 Operator Source: Portio Research Ltd. 71 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 227
  • 228. Ranking The World’s Best Mobile Operators Table 59: MNOs Worldwide Ranked 1 to 20 – Overall Ranking Using Blended Approach (2008) Rank MNO Score Rank MNO Score 1 NTT DOCOMO Japan 10.00 2 Etisalat The UAE 9.29 11 Movistar Venezuela 8.85 12 SK Telecom South Korea 8.84 3 KDDI Japan 9.20 4 Etisalat Misr Egypt 9.11 13 du The UAE 8.83 14 SoftBank Japan 8.83 5 Telefonica Peru 9.08 15 Proximus Belgium 8.81 6 7 SingTel Singapore 9.07 16 Swisscom Switzerland 8.80 Telenor Norway 8.97 17 Rogers Canada 8.80 8 Telstra Australia 8.90 18 Orange France 8.77 9 Verizon The US 8.89 19 Movilnet Venezuela 8.72 10 Mobilkom Austria 8.86 20 MTS Belarus 8.65 Table 60: MNOs Worldwide Ranked 21 to 50 – Overall Ranking Using Blended Approach (2008) Rank MNO Score Rank MNO Score 21 Orange Austria 8.62 36 3 Austria 8.35 22 Telus Mobility Canada 8.60 37 DNA Finland 8.33 23 AT&T The US Partner Communications Israel Vodafone Ireland 8.59 38 Bell Mobility Canada 8.29 8.52 39 O2 Czech Republic 8.28 8.51 40 Mobistar Belgium 8.26 26 3 The UK 8.49 41 Bouygues France 8.25 27 Mobily Saudi Arabia 8.45 42 Smart The Philippines 8.24 28 Telia Sonera Finland 8.43 43 O2 Ireland 8.24 29 Movistar Spain 8.40 44 T-Mobile Slovakia 8.22 30 SFR France 8.40 45 Comcel Colombia 8.22 31 KPN The Netherlands 8.39 46 T-Mobile Croatia 8.21 32 Elisa Finland 8.39 47 Mobiltel Bulgaria 8.19 33 Orange Slovakia 8.39 48 Chunghwa Taiwan 8.18 34 Netcom Norway 8.37 49 Starhub Singapore 8.18 35 Cellcom Israel 8.37 50 Vodafone New Zealand 8.18 24 25 228 © 2009, Portio Research. All Rights Reserved
  • 229. Ranking The World’s Best Mobile Operators Table 61: MNOs Worldwide Ranked 51 to 170 – Overall Ranking Using Blended Approach (2008) Rank MNO Rank MNO Rank MNO 51 Pelephone Israel 52 China Mobile 91 O2 The UK 131 Globe The Philippines 92 T-Mobile Germany 132 Meteor Ireland 53 mt:s Serbia 54 Sunrise Switzerland 93 VIP Serbia 133 Wind Italy 94 Telia Denmark 134 Telcel Mexico 55 T-Mobile Czech Republic 95 Vodafone Egypt 135 Movistar Colombia 56 Telia Sonera Sweden 96 Vodafone Germany 136 LG Telecom South Korea 57 Orange Switzerland Vodafone The Netherlands Claro Peru 97 Globacom Nigeria 137 China Unicom 98 Tele2 Croatia 138 Vodafone Romania 99 Vivatel Bulgaria 139 BITE Lithuania 60 Cosmote Greece 100 Movistar Argentina 140 TCI Iran 61 Vodafone Czech Republic 101 Vodafone Portugal 141 Telenor Serbia 62 Vodafone Spain 102 Polkomtel Poland 142 MTN Afghanistan 63 Velcom Belarus 103 143 Telefonica Slovakia 64 T-Mobile Austria 104 144 Vodafone Greece 65 105 145 Djezzy Algeria 106 Orange Spain 146 Claro Argentina 67 Sonofon Denmark Telecom Mobile New Zealand MTN Syria Orange The UK Telecom Personal Argentina Asiacell Iraq 107 Orange Poland 147 HTIL Hong Kong 68 KTF South Korea 108 Movistar Chile 148 Base Belgium 69 3 Sweden 109 Vodafone Hungary 149 PCCW Mobile Hong Kong 70 T-Mobile Hungary 110 3 Italia 150 Excelcomindo Indonesia 71 Globul Bulgaria 111 Vodafone Australia 151 SmarTone Hong Kong 72 Optus Australia 112 Maxis Malaysia 152 Tunicell Tunisia 73 T-Mobile The Netherlands 113 Maroc Telecom Morocco 153 MTS Russia 74 Telenor Sweden 114 MobiNil Egypt 154 75 Taiwan Mobile 115 Nextel Brazil 155 76 FeT Taiwan 116 Tele2 Lithuania 156 Zain Nigeria CSL New World Mobility Hong Kong Oi Brazil 77 MTN Iran 117 PTC Poland 157 Wind Hellas Greece 78 MTN Nigeria 118 O2 Germany 158 Zain Jordan 79 Sprint The US 119 Tunisiana Tunisia 159 Nextel Argentina 80 T-Mobile The US 120 Entel PCS Chile 160 Nextel Peru 81 Safaricom Kenya 121 Zain Sudan 161 Vivo Brazil 82 M1 Singapore 122 Promonte Montenegro 162 Celcom Malaysia 83 TMN Portugal 123 Vodafone Italy 163 84 Zain Iraq 124 Digitel Venezuela 164 85 Telkomsel Indonesia 125 Optimus Portugal 165 Claro Brazil GrameenPhone Bangladesh Avea Turkey 86 T-Mobile Montenegro 126 E-Plus Germany 166 Meditel Morocco 87 VIPnet Croatia 127 Omnitel Lithuania 167 88 Pannon Hungary 128 Turkcell Turkey 168 89 TDC Denmark 129 Vodafone The UK 169 TIM Brasil Reliance Communication India MTN Sudan 90 Tele2 Sweden 130 Telecom Italia 170 Movistar Mexico 58 59 66 © 2009, Portio Research. All Rights Reserved 229
  • 230. Ranking The World’s Best Mobile Operators Table 62: MNOs Worldwide Ranked 171 to 204 – Overall Ranking Using Blended Approach (2008) Rank MNO Rank MNO Rank MNO 171 T-Mobile The UK 183 Vodacom South Africa 195 Tele2 Russia 172 MTS Ukraine 184 Kyivstar Ukraine 196 Mobilink Pakistan 173 Banglalink Bangladesh 185 MTN South Africa 197 Zain Kenya 174 DiGi Malaysia 186 Idea Cellular India 198 Nedjma Algeria 175 MegaFon Russia 187 Brasil Telecom 199 True Move Thailand 176 VimpelCom Russia 188 Telenor Pakistan 200 Tigo DR Congo 177 Bharti Airtel India 189 Cell C South Africa 201 Sibir Telecom Russia 178 Vodafone India 190 Hutch Thailand 202 Beeline Ukraine 179 Iusacell Mexico 191 Vodafone Turkey 203 Celtel DR Congo 180 AIS Thailand 192 DTAC Thailand 204 Vodacom DR Congo 181 Sun The Philippines 193 life:) Ukraine 182 Tigo Colombia 194 Claro Chile As you can see from the data tables, this method of ranking MNO performance creates a far more balanced view and we believe this to be as close and accurate a picture as is possible. MNOs in Japan appear to crowd the top of the list, but this is hardly surprising, as Japan is widely acknowledged as the world’s leading mobile market - an almost entirely postpaid market; high mobile data usage; innovative and always at the forefront of new technology; saturated; high ARPU and all in one of the world’s wealthiest economies. Beyond this dominance of Japanese MNOs, the rest of the rankings seem well balanced, with only the Africa and Middle East region slipping lower down the table, no doubt a result of the economic climate in this region and the lower penetration of mobile services in many African nations. The figure below provides the number of MNOs from different regions securing a place in the top 10 for each of the three approaches we have shown. Regional Count of Top 10 Operators for Different Approaches Figure 159: Regional Count of Top 10 Operators for Different Approaches 7 6 6 5 4 4 4 4 4 3 2 2 2 2 1 1 North America Latin America 1 0 Asia Pacific Europe Middle East and Africa Region Traditional Blended Normalisation Source: Portio Research Ltd. You can clearly see that using the traditional approach, Asia Pacific, Europe and North America lead the way owing to the nature of these more developed markets. On the other hand, for the normalised approach all top 10 operators are from the developing markets of Latin America and the Middle East and Africa regions. The blended approach fairly 230 © 2009, Portio Research. All Rights Reserved
  • 231. Ranking The World’s Best Mobile Operators successfully minimises the bias in both these other two approaches by taking a mix of traditional and normalised KPIs and producing a more balanced ranking as a result. Notes covering a few anomalies, outliers and interesting observations Throughout the report we noticed several possible anomalies worthy of brief discussion. The notes below try to explain some of the extraordinary findings of the study and these notes should also be studied carefully to aid a full understanding of all the research results. Performance Measurement 1 Query: Nextel in Latin America dominates the top 3 rankings Explanation: Nextel has successfully secured a niche market in Latin America, which sees the company taking the top three places in our MNO ARPU (PPP) ranking. Nextel has focussed on attracting postpaid customers, which helps reduce churn and generally means for higher spending, in a region which is predominantly prepaid. Most Latin American countries are 80 percent or more prepaid, and Nextel has focused on winning business from the minority of postpaid customers. This strategy has seen them focus on the enterprise sector; winning high-value subscribers and securing loyalty by offering advanced services (BlackBerry, push-to-talk, etc) at premium prices to the top-end of the market. Performance Measurement 6 Query: Extraordinarily high penetration level in the UAE Explanation: The mobile penetration of the UAE was 214 percent at end-2008. This astronomically high penetration can be partially attributed to the presence of a large group of migrant workers in the Emirates. Abu Dhabi and Dubai both attract vast communities of migrant workers, both labourers working on the endless construction projects and white collar workers to fill the offices and homes that result from all this building. The mobile subscriptions for this segment are included in the subscriber base of the country, reported by network operators, whereas the migrant working population is not fully accounted for in the official national population data. Therefore, the actual penetration level may be considerably lower than the reported value. Performance Measurement 6 Query: You may have observed that Safaricom in Kenya has 82.6% market share after 13 years of operation, yet it secured a lower postion in the ‘Significance of the MNO’ ranking than Etisalat (UAE) which has achieved 74.7% market share (lower) after 15 years in business (longer). Explanation: These markets have contrasting mobile penetration. By year end-2008, Kenya had approximately 41 percent mobile penetration where as the UAE has around 214 percent mobile penetration (see above). Therefore, despite both the players having a large market share the penetration of mobile services in the target population differ significantly, causing this seeming anomaly. Performance Measurement 6 Query: Achieving a high result as a second entrant into a monopoly market Explanation: In the Significance Measure index, two of the top three – du in the UAE and Mobily in Saudi Arabia – were second entrants into monopoly markets. The excellent and rapid subscriber growth these MNOs enjoyed can partly be attributed to the unique market characteristics of such a scenario. Competition is healthy and welcomed in almost any consumer market. Rapid growth can be expected from the new entrant as subscribers welcome the fresh choice, and naturally competition into a former monopoly usually also puts prices under pressure. A similar picture was seen in the Indian mobile market, when the BSNL monopoly was broken. Interestingly, when du launched in The UAE it avoided a direct price war with Etisalat, competing instead on products and services, differentiating its service offering through innovation and new non-voice services. Performance Measurement 7 Query: The dominance of Asian MNOs in our data revenue measure Explanation: You may have noticed that the results for PM7, our measure of the success of developing revenues from data services, show 11 of the top 20 MNOs to be in the Asia Pacific region. There are several explanations for this, and these points are well worth © 2009, Portio Research. All Rights Reserved 231
  • 232. Ranking The World’s Best Mobile Operators understanding. Obviously, the use of non-voice services is very high in both Japan and South Korea, two markets widely acknowledged as world leading markets in the adoption not only of advanced mobile services, but also ‘all-things hi-tech’. Markets such as Japan and South Korea see very high use of mobile e-mail and MMS, but we have also observed that even in low ARPU markets, such as the Philippines and Bangladesh, the use of non-voice mobile services is much higher than in many more developed, wealthier markets in other regions of the world. The use of advanced data services in Japan and South Korea is supported by the evolution of world-leading data services and the availability of a wide choice of high-end handsets; whereas in the emerging markets such as the Philippines, subscribers use SMS in vast quantities, and as a preference to comparatively expensive voice. Performance Measurement 8 Query: Low churn rates in Japan Explanation: Our results show that network operators in Japan enjoy world-leading, enviably low churn rates. All three Japanese MNOs benefit from monthly churn rates of just one percent or lower. These low churn rates in Japan are worth understanding, as many MNOs around the world would benefit greatly from reducing churn rates to such low figures. Where SMS is the most popular mobile messaging format in almost every country in the world, mobile e-mail is also very popular in Japan. In Japan, where postpaid penetration is in the order of 98 percent, mobile e-mail is even more popular than SMS as a messaging format. While MNP (mobile number portability), which was introduced to the Japanese market in October 2006, allows subscribers to keep their phone number when they change network, they cannot keep their e-mail address. This factor makes an outstanding contribution to keeping churn so low, as subscribers clearly do not want to keep changing their e-mail address, forming great loyalty to their chosen MNO. Additionally, another factor aiding the low churn rate is the difference in network technology between the Japanese MNOs. The difference makes the transition of subscribers from one operator to another costlier, as they often need to purchase a new handset and there is often a fee attached to switching. This again helps reduce churn. To further reward subscriber loyalty, Japanese MNOs practice constant innovation, frequently introducing new handsets and all the latest service offerings. Performance Measurement 10 Query: The success of Hutchison’s “3” brand Explanation: It’s impossible not to notice that in PM10, our ranking for how fast an MNO has managed to penetrate advanced network services into any given market, the top 50 rankings are completely dominated by network operators in developing markets. Clearly, it is natural that the ‘mass market’ catches up with the ‘early adopters’ at a faster pace, to paint a somewhat simplified picture of complex global markets. What is worthy of note, is the MNOs appearing on this list from the developed markets. 3 UK appears at number 34 on the list, the first entry from a fully matured, fully saturated market. Further entries from equally mature markets come in as follows: 3 UK – 34 Bell Canada – 54 3 Sweden – 58 3 Austria – 60 3 Italy – 62 Telus Canada – 63 Full credit must be given to Hutchison, and to the Canadian mobile industry. Hutchison have managed to establish an internationally recognised brand in tough, highly competitive markets, which also enjoys excellent high ARPU in several of those markets, notably in Europe. The results from this performance measurement clearly show how difficult it is to establish and grow an all-new brand in highly competitive, saturated, price sensitive 232 © 2009, Portio Research. All Rights Reserved
  • 233. Ranking The World’s Best Mobile Operators markets. These results should be carefully considerd by any player looking for growth opportunities, or any investors looking at establishing new operations. Whilst organic growth can still easily be found in the developing markets, setting up a new presence in fully matured markets is a long and expensive and difficult process. © 2009, Portio Research. All Rights Reserved 233
  • 234. Ranking The World’s Best Mobile Operators Overall Ranking: Objective Analysis of Regional Performance in Three Core Areas of Success Throughout the body of this report we have studied a number of mobile network operators based on a new set of performance measurement criteria. In this summary section we have looked at how those MNO performances can be studied and measured when using more traditional KPIs, our new measurements, and a blended set of both metrics. Throughout this entire study we have shown you many individual and collective ways of looking at MNO performance, including size, growth, ability to extract revenues from subscribers, advances made in non-voice mobile services, advancement of network technology, customer retention and so on. Individually and collectively, these results are very interesting, and the entire study has helped us to identify many of the success factors employed by selected MNOs to help win competitive advantage in these many areas of operation. While informative and interesting, these areas form a basket of diverse performance measurement indices which do not necessarily give an objective indication of the performance of the operators in any one specific focus area. For example, an operator in a highly developed market is unlikely to be looking to achieve rapid growth in subscriber numbers or gross revenues, since the market is likely saturated and highly competitive. In such a scenario, the primary focus of that MNO may instead be on customer retention, ARPU growth and increasing the percentage of revenues from data services. By contrast, an MNO in a developing market may be focussed on growing its subscriber base, winning market share in net subscriber additions, expanding its network to cover more territory and pushing SMS as the main revenue generating non-voice service. Therefore, it might be acceptable for the operators in emerging markets to initially grab a major chunk of the subscriber market share even while operating at low ARPU; and then to focus on pushing value added services to lift data ARPU as time goes by. Based on these differing needs, we have segmented our results into three broad areas of focus which most network operators have some interest in. These are: • • • Best MNOs for size and growth Best MNOs for extracting revenues from customers Best MNOs for advancing non-voice mobile services By using our blended approach (the third, most balanced approach, as identified in the previous pages), and then segmenting the various KPIs and performance measurements to single out factors effecting these three specific areas of focus, we have produced three further Overall Rankings. These new rankings provide a much more specific view of network operator performance based on more ‘real-world’ examples of most MNOs’ typical core areas of focus. We have further presented these results regionally, to normalise any lasting regional economic differences that may still be weighting the results one way or the other. The following figure illustrates the three new overall rankings, and then each ranking, and how it is calculated, is discussed in the text over the following pages. 234 © 2009, Portio Research. All Rights Reserved
  • 235. Ranking The World’s Best Mobile Operators Figure 160: Focus Areas of the Three Overall Rankings Overall Rankings Overall Ranking 1 Covers size and growth of MNOs Overall Ranking 2 Covers the revenues generated by MNOs Overall Ranking 3 Covers MNOs’ initiatives at pushing their data services Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 235
  • 236. Ranking The World’s Best Mobile Operators Overall Ranking 1 – Best MNOs by region for size and growth This overall ranking for size and growth considers the MNO’s performance in its ability to attract and retain subscribers and revenue generation. The MNOs have been ranked using the blended approach, considering the following performance measurement indices: • • • • • • MNO growth vs. market growth Revenue growth of MNO Significance of the MNO Effective churn measure Actual subscriber numbers Actual market share The regional top 10 list for MNOs’ performance in Overall Ranking 1 is given in the table below. This table shows the best MNOs in each region based on size and growth performance. Table 63: Top 10 Regional Operators by Overall Ranking 1 (OR1) Region Rank Asia Pacific North America Latin America Middle East and Africa 1 China Mobile mt:s Serbia AT&T The US Comcel Colombia Zain Iraq 2 SingTel Singapore Tele2 Croatia Verizon The US Telefonica Peru Etisalat The UAE 3 NTT DOCOMO Japan life:) Ukraine Rogers Canada Movilnet Venezuela du The UAE 4 Vodafone New Zealand Swisscom Switzerland Bell Mobility Canada Movistar Venezuela Mobily Saudi Arabia 5 Telstra Australia T-Mobile Montenegro Telus Mobility Canada Telcel Mexico Safaricom Kenya 6 Chunghwa Taiwan Cosmote Greece T-Mobile The US Movistar Chile TCI Iran 7 FeT Taiwan Globul Bulgaria Sprint The US Movistar Argentina Tunisiana Tunisia 8 KDDI Japan Mobiltel Bulgaria Digitel Venezuela Cellcom Israel 9 Telecom Mobile New Zealand Tele2 Lithuania Claro Argentina Asiacell Iraq 10 236 Europe Starhub Singapore Telenor Norway Claro Peru Djezzy Algeria © 2009, Portio Research. All Rights Reserved
  • 237. Ranking The World’s Best Mobile Operators Overall Ranking 2 – Best MNOs by region for extracting revenues from subscribers As markets mature, so ARPU gains in importance. In developed markets ALL operators are looking to generate maximum revenues from each subscriber, as market competition squeezes margins ever tighter. Locking customers into postpaid contracts, which help to combat churn, encouraging fixed-to-mobile substitution and then keeping ARPU from eroding, are core strategic objectives for many MNOs. In the developing markets too, operators cannot afford to ignore ARPU. MNOs in developing markets are growing networks into rural areas where ARPU can be incredibly low, and extracting every last cent of additional revenue from customers can make the difference between profit and loss. This overall ranking for MNOs, based on their success in extracting revenues from subscribers, is calculated again using the blended approach, and utilising the following performance measurement indices: • • • • • • • • MNO ARPU PPP ARPU as a Percentage of disposable income Revenue growth of MNO MNO Profitability Postpaid penetration measure Postpaid subscribers as a percentage of subscriber base Total revenues Actual ARPU The regional top 10 list for MNOs’ performance in Overall Ranking 2 is given in the table below. This table shows the best MNOs in each region based on their ability to extract maximum revenues from their subscribers. Table 64: Top 10 Regional Operators by Overall Ranking 2 (OR2) Region Rank Asia Pacific Europe North America Latin America Middle East and Africa 1 NTT DOCOMO Japan Orange France Verizon The US Nextel Brazil Partner Communications Israel 2 KDDI Japan Bouygues France AT&T The US Nextel Argentina Etisalat The UAE 3 SK Telecom South Korea 3 The UK Sprint The US Movistar Venezuela MTN Nigeria 4 Telstra Australia SFR France Rogers Canada Telefonica Peru Cellcom Israel 5 China Mobile Movistar Spain Telus Mobility Canada Nextel Peru Pelephone Israel 6 FeT Taiwan Telenor Norway T-Mobile The US Movilnet Venezuela Zain Iraq 7 SoftBank Japan Vodafone Czech Republic Bell Mobility Canada Movistar Chile Zain Sudan 8 Taiwan Mobile Orange Austria Digitel Venezuela MTN Syria 9 SingTel Singapore Netcom Norway Movistar Argentina Globacom Nigeria 10 KTF South Korea Proximus Belgium Telecom Personal Argentina Mobily Saudi Arabia © 2009, Portio Research. All Rights Reserved 237
  • 238. Ranking The World’s Best Mobile Operators Overall Ranking 3 – Best MNOs by region for advancing non-voice mobile services As discussed over the previous pages, almost all network operators in almost all markets work hard to maintain ARPU as high as possible. In many developed markets, and in some developing markets, voice prices have been squeezed through competitive pressure and for many MNOs, voice now offers very little margin. Voice also offers very little opportunity to differentiate service offerings between competitors. As a result, many MNOs have spent the last few years pushing data services hard, as these services offer better margins and ways to differentiate service offerings from competitors. In developing markets, SMS forms the vast majority of non-voice revenues, and indeed SMS is still the number 1 non-voice revenue generating service in all regions worldwide. However, in many developed markets other services are now gaining in popularity. Operators need to grow data services aggressively, and this requires fast, modern networks which can handle the capacity and complexity of advanced non-voice services. We have tried to rate the success of operators in advancing non-voice mobile services through the following performance measurement indices, again using our blended approach: • • • • MNO ARPU PPP Data revenue measure Technology measure Actual ARPU The regional top 10 list for MNOs’ performance in Overall Ranking 3 is given in the table below. This table shows the best MNOs in each region based on their success in driving forward non-voice mobile services. Table 65: Top 10 Regional Operators by Overall Ranking 3 (OR3) Region Rank Asia Pacific North America Latin America Middle East and Africa 1 NTT DOCOMO Japan 3 The UK Rogers Canada Nextel Brazil MTN Syria 2 KDDI Japan Vodafone Ireland Telus Mobility Canada Nextel Argentina Etisalat Misr Egypt 3 SK Telecom South Korea Telenor Norway Verizon The US Etisalat The UAE Partner Communications Israel 4 SingTel Singapore O2 Ireland Bell Mobility Canada Vodafone Czech Republic Sunrise Switzerland 5 Telstra Australia Orange Austria AT&T The US Starhub Singapore Vodafone Australia 6 Movistar Venezuela Proximus Belgium Sprint The US 3 Italia China Mobile 7 TDC Denmark Bouygues France Telefonica Slovakia Tele2 Croatia Orange The UK 8 SoftBank Japan Netcom Norway DNA Finland T-Mobile Czech Republic 9 Telefonica Peru Orange France Pannon Hungary Safaricom Kenya 10 238 Europe Nextel Peru 3 Austria TIM Brasil Pelephone Israel © 2009, Portio Research. All Rights Reserved
  • 239. Ranking The World’s Best Mobile Operators The table below highlights the top 20 players worldwide for each overall ranking category as discussed over the previous five pages. Table 66: Top 20 Worldwide Operators by Different Overall Rankings Overall Ranking Rank OR1 – Size and Growth OR2 – Making Money OR3 – Data Services 1 China Mobile Verizon The US NTT DOCOMO Japan 2 Zain Iraq NTT DOCOMO Japan Nextel Brazil 3 Etisalat The UAE AT&T The US 3 The UK 4 mt:s Serbia KDDI Japan Rogers Canada 5 Comcel Colombia Sprint The US Vodafone Ireland 6 du The UAE Rogers Canada KDDI Japan 7 Telefonica Peru Orange France Telus Mobility Canada 8 Mobily Saudi Arabia Bouygues France Telenor Norway 9 SingTel Singapore Telus Mobility Canada SK Telecom South Korea 10 Tele2 Croatia 3 The UK O2 Ireland 11 life:) Ukraine Nextel Brazil Orange Austria 12 Swisscom Switzerland SK Telecom South Korea Proximus Belgium 13 NTT DOCOMO Japan T-Mobile The US Bouygues France 14 Movilnet Venezuela SFR France MTN Syria 15 Safaricom Kenya Partner Communications Israel Etisalat Misr Egypt 16 T-Mobile Montenegro Etisalat The UAE Nextel Argentina 17 Cosmote Greece MTN Nigeria Netcom Norway 18 Movistar Venezuela Movistar Spain Verizon The US 19 Telcel Mexico Bell Mobility Canada Orange France 20 TCI Iran Telenor Norway Bell Mobility Canada © 2009, Portio Research. All Rights Reserved 239
  • 240. Ranking The World’s Best Mobile Operators Global overall rankings - key observations Overall Ranking 1: • Top 3 operators: China Mobile, Zain Iraq, and Etisalat in the UAE. Even with our rankings normalised China Mobile still takes the top spot, primarily because of its huge subscriber base and dominant market share, which is comfortably supported by a reassuringly low churn rate. Zain Iraq has fared well in the revenue growth and market share indices; whereas Etisalat in the UAE secures a high rank owing to its high market share and strong subscriber growth. • Trends: The top 20 ranking is dominated by MNOs operating in the developing markets of the Asia Pacific, Middle East and Latin American regions where the opportunity for growth in absolute subscriber numbers is higher. However, our blended performance measurement recognises more than just the size of an MNO’s subscriber base. These MNOs have scored highly thanks to a combination of factors, including recording growth faster than the other players in their markets; winning subscribers, market share and revenues; and keeping churn under control. Overall Ranking 2: • Top 3 operators: Verizon and AT&T in the US, and NTT DOCOMO in Japan. It comes as no surprise that these players topping the table are based in the two richest economies in the world. These players achieved high scores not just based on gross revenues, but also on high ARPU, high profitability and high penetration of postpaid services, a sign of good churn management and good prospects for ARPU growth. • Trends: The top 20 ranking is dominated by MNOs operating in the developed markets such as The US, Japan, Canada, The UK and France. While a number of the big players in North America, Japan, South Korea and Western Europe were to be expected on this list, it is significant to see that MNOs such as 3 UK and Bouygues Telecom in France also sit very high on the list. Also significant is the high placing of MNOs in Israel, Nigeria, Brazil and the UAE. High positions in this ranking have been helped by strong profitability and high ARPU as a percentage of disposable income, as well as solid revenue performance, solid revenue growth and reliable ARPU figures. Overall Ranking 3: • Top 3 operators: NTT DOCOMO in Japan, Nextel Brazil and 3 in the UK. This overall ranking awards high marks to MNOs who are doing the best job of advancing non-voice mobile services and boosting ARPU as a result. Again the leading Japanese operator makes the top 3, and rightly so, as its iMode service has been a world-leading wireless Internet service for many years. NTT DOCOMO and 3 UK have both performed well under our data revenue measure, and both deliver world class ARPU results. Nextel Brazil has earned its place in the top 3 by delivering the world’s highest ARPU (PPP), among other factors. • Trends: The top 20 ranking is dominated by MNOs operating in North America, Western and Northern Europe, and the developed markets of the Asia Pacific region such as Japan and South Korea. This is only to be expected, even with the ranking weighted by our normalised performance measurements, as these regions are clearly leading the world in terms of 3G penetration and the growth of data services. 240 © 2009, Portio Research. All Rights Reserved
  • 241. Ranking The World’s Best Mobile Operators Chapter 14 Methodology © 2009, Portio Research. All Rights Reserved 241
  • 242. Ranking The World’s Best Mobile Operators Methodology MNOs covered in the study: We have covered 204 MNOs worldwide in this study. The inclusion of MNOs has been subject to the data availability of an MNO’s Key Performance Indicators (KPIs). Selection of Performance Measurement Indices: These have been selected on their ability to capture an MNO’s performance based on Key Performance Indicators such as subscribers, ARPU, churn, data revenue, EBITDA, market share, etc. These KPIs have been used along with normalising factors, such as number of years of 2G operation (and above), and mobile penetration in the market, to provide an even playing field. Calculation of Scores: After the selection of indices, formulae were devised to compute the scores of MNOs. The formulae and the rationales behind them have been discussed in the sections focusing on the ten selected performance measurement indices. Then, within a performance measurement index, the values obtained for all 204 MNOs were normalised (as mentioned in the figure below) in such a way that their sum equals unity. Thereafter, these values were proportionately given scores in the range of 5-10, with 10 being the topranked and 5 being at the ‘bottom’ of the ranking. The methodology used to rank MNOs is represented pictorially in the figure given below. The apparent existence of duplicate ranking scores: In each of the ten performance measurement indices we provide a score (outlined above) for MNOs placing in the top fifty, and there are instances where MNOs rank differently but appear to have the same score. In actuality, these scores were first calculated to four decimal places with each MNO securing a distinct and unique value, before being rounded off to one decimal place for succinct presentation purposes. Please note: From an initial assessment of 700-plus MNOs, this complex report has involved extensive data collection for 204 mobile network operators worldwide. Obtaining data for over 200 operators is an understandably lengthy process, and during our collection window in Q1 2009 the latest complete set of available data was for full year end-2008. For this reason, MNOs in this report are ranked on their full year 2008 performance, not 2009. 242 © 2009, Portio Research. All Rights Reserved
  • 243. Ranking The World’s Best Mobile Operators Figure 161: Methodology for Calculating MNO Score for a Performance Measurement Index Devising formula for selected Performance Measurement Index (PM-X) to provide a level playing field for MNOs worldwide Calculation of MNO Score (MSPM-X) for selected Performance Measurement Index using the devised formula Calculation of Normalised MNO Score (NMSPM-X) for selected PM-X: NMSPM-X = MSPM-X Sum of all MSPM-X within Performance Measurement X Calculation of Final MNO Score (FMSPM-X) for selected index: FMSPM-X = 5 + 5 * (NMSPM-X – Lowest NMSPM-X) (Highest NMSPM-X – Lowest NMSPM-X) Ranking of MNOs for selected Performance Measurement Index Source: Portio Research Ltd. While selecting the three MNOs to be profiled under each performance measurement index, we have tried to avoid the following cases: • Creating multiple case studies of the same player under different performance measurement indices • Creating multiple case studies covering the same country under a performance measurement index Therefore, there might be cases where an MNO has secured a top-3 place but has not been profiled. This approach has been followed to cover as many MNOs and markets as possible. The aim is to capture different strategies adopted by MNOs in markets worldwide, thereby, delivering the best value to our readers. After obtaining MNO scores for 10 selected performance measurement indices, the combined score for each of the MNOs was calculated. These scores were then used to assign weight to each of the performance measurement indices. Thereafter these weights were used to calculate the normalised scores. The scores obtained for MNOs were used to assign overall ranks to the operators. The overall ranking methodology has been explained in the figure given below. © 2009, Portio Research. All Rights Reserved 243
  • 244. Ranking The World’s Best Mobile Operators Figure 162: Methodology for Calculating Normalised Overall MNO Score Calculation of Final MNO Scores (FMSPM-X) for Performance Measurement Indices (X = 1 to 10) Calculation of Combined Score for an MNO: Combined Score for an MNO = Sum of FMSPM-X (X = 1 to 10) Assignment of weights to 10 Performance Measurement Indices based on the correlation of their scores with the combined score Calculation of Normalised Combined Score (NCSMNO) for an MNO using assigned weights: NCSMNO = Sum of products of weight assigned to Performance Measurement Indices and respective MNO Score Overall Ranking of MNOs based on Normalised Combined Score Source: Portio Research Ltd. The figure below shows the weights assigned to each of the performance measurement indices used in the overall ranking of MNOs. 244 © 2009, Portio Research. All Rights Reserved
  • 245. Ranking The World’s Best Mobile Operators Figure 163: Assignment of weights to different Performance Measurement Indices 72 11.4% 13.8% 9.3% 5.3% 18.7% 10.7% 6.5% 9.9% 8.0% 6.5% MNO ARPU PPP ARPU as a Percentage of Disposable Income Revenue Growth of the MNO MNO Profitability MNO Growth vs. Market Growth Significance of the MNO Successful Growth of Revenue from Data Services Measuring Subscriber Loyalty Postpaid Penetration Measure Technology Measure Source: Portio Research Ltd. We have also tried to analyse the performance of MNOs based on the following performance indicators: • MNO Penetration in the market • Subscriber Growth • Technology Score • ARPU • Revenue Growth • Data Revenue as a Percentage of Total Revenue • Postpaid MNO Subscriber Ratio • Churn Rate The methodology followed to rank MNOs based on these KPIs is shown in the figure below: 72 Please note: The figures may not add up to 100 percent because of rounding-off errors. © 2009, Portio Research. All Rights Reserved 245
  • 246. Ranking The World’s Best Mobile Operators Figure 164: Methodology for Calculating Traditional Overall MNO Score Calculation of Final MNO Scores (FMSPM-X) for Performance Measurement Indices (X = 1 to 8) Calculation of Combined Score for an MNO: Combined Score for an MNO (TCSMNO) = Sum of FMSPM-X (X = 1 to 8) Overall Ranking of MNOs based on Traditional Combined Score Source: Portio Research Ltd. The results from the two methods of ranking mentioned above show that normalised ranking is biased towards players from emerging markets, whereas traditional ranking is biased towards MNOs operational in developed markets. Therefore, we have ranked the players based on their performance in both the ranking methods under a blended ranking method. The method uses the sum of scores of an MNO in normalised and traditional ranking approaches and has been explained in the figure below. Figure 165: Methodology for Calculating Blended Overall MNO Score Normalised Ranking Score of an MNO (NCSMNO) Traditional Ranking Score of an MNO (TCSMNO) Blended Ranking Score of an MNO = NCSMNO + TCSMNO Overall Ranking of MNOs based on Blended Score Source: Portio Research Ltd. The overall ranking scores have also been calculated for three focus areas given below: • Size and growth • Extracting revenues from subscribers • Advancing non-voice mobile services The figure below shows performance measurement indices pertaining to a focus area: 246 © 2009, Portio Research. All Rights Reserved
  • 247. Ranking The World’s Best Mobile Operators Figure 166: Focus Areas of the Overall Rankings and Constituting Performance Measurement Indices Overall Ranking 1 Size and growth • MNO Growth vs. Market Growth • Revenue Growth of the MNO • Significance of the MNO • Measuring Subscriber Loyalty • Subscriber Numbers • Market Share Overall Ranking 2 Extracting revenues from subscribers • MNO ARPU PPP • ARPU as a Percentage of Disposable Income • Revenue Growth of the MNO • MNO Profitability • Postpaid Penetration Measure • Postpaid Subscribers as a Percentage of Subscriber Base • Total Revenues • ARPU Overall Ranking 3 Advancing non-voice mobile services • MNO ARPU PPP • Data Revenue Measure • Technology Measure • ARPU Source: Portio Research Ltd. The method of overall ranking on the above mentioned focus areas has been explained in the figure given below. Figure 167: Methodology for Calculating Overall MNO Rankings – 1, 2 & 3 Calculation of Final MNO Scores (FMSPM-X) for selected Performance Measurement Indices Calculation of Combined Score for an MNO: Combined Score for an MNO = Sum of FMSPM-X under a focus area Overall Ranking of MNOs based on Combined Score under a focus area Source: Portio Research Ltd. Descriptions of some of the terms/factors used in the study are provided below: © 2009, Portio Research. All Rights Reserved 247
  • 248. Ranking The World’s Best Mobile Operators 1. Purchasing Power Parity (PPP): Purchasing Power Parity is the amount of adjustment required on the exchange rate between two countries to take into account each currency's purchasing power for identical goods in those countries. For example, USD 1 may be equivalent to ‘x local currency’ of a country according to the exchange rate. However, the cost of goods and commodities in the US available at USD 1 might not be available at ‘x local currency’. If goods are cheaper in that country than in the US, the real measures (such as GDP or ARPU) converted to USD based on exchange rate will have to be scaled up to express them in PPP terms. Therefore, PPP has been used in this study to account for the purchasing power of the population in a country. 2. Disposable income: Disposable income is gross income minus income tax applicable on that income, and hence the amount of income left to an individual after taxes have been paid that is available for spending and saving. 3. EBITDA margin: EBITDA margin is the ratio in percentage of EBITDA to the total revenue earned by an MNO. EBITDA is the earnings of an MNO before accounting for Interest, Taxes, Depreciation and Amortization. 4. Mobile penetration: It is the mobile subscriber base in a country expressed as a percentage of its total population. 5. MNO market penetration: It is the mobile subscriber base of an MNO expressed as a percentage of total population of the country of operation. For your reference, a full Glossary of terms is also provided within this report. 248 © 2009, Portio Research. All Rights Reserved
  • 249. Ranking The World’s Best Mobile Operators Chapter 15 Appendices © 2009, Portio Research. All Rights Reserved 249
  • 250. Ranking The World’s Best Mobile Operators Appendices This market study has been written in a way that avoids excessive use of market acronyms (except where appropriate) and industry technical talk, as we have tried to keep the text open to all readers, not just those with in-depth knowledge of the world’s mobile markets. Because this study covers all geographical regions and many emerging markets, a great deal of the data contained within this study will potentially be of interest to investors, financial analysts, consultants, venture capitalists and others all around the world who do not work within the mobile industry itself every day of their lives. To many of these people, some of the industry technical talk and acronyms may be confusing, so we have attempted to write this study in a self explanatory way that assumes little prior knowledge, but in doing this, some of the speech chosen may seem somewhat "obvious" to our more knowledgeable readers. We hope this offers the best possible solution to everyone, and we hope this does not cause any confusion or inconvenience. Where we have used technical terms or acronyms, we offer an explanation of those expressions below. 250 © 2009, Portio Research. All Rights Reserved
  • 251. Ranking The World’s Best Mobile Operators Glossary 1G or First Generation Packet Data Networks Packet data networks include Cellular Digital Packet Data (CDPD), Advanced Radio Data Information Service (ARDIS) and Mobitex are regional as opposed to national networks. 2G or Second Generation Packet Data Networks The second-generation packet networks recently introduced consist of combined voice and packet data networks based on global standards. 2.5G 2.5G describes the state of wireless technology and capability usually associated with General Packet Radio Services (GPRS) - that is, between the second and third generations of wireless technology. The second generation or 2G-level of wireless is usually identified as Global System for Mobile (GSM) service and the third generation or 3G-level is usually identified as Universal Mobile Telecommunication Service (UMTS). Each generation provides a higher data rate and additional capabilities. There is also a fourth generation (4G) of technology in the planning and research stages. 2.5G protocols extend 2G systems to provide additional features such as packet-switched connection (GPRS) and enhanced data rates (HSCSD, EDGE). 3G or third generation 3G is an International Telecommunication Union (ITU) specification for the third generation 73 (analog cellular was the first generation and digital PCS was the second generation) of mobile communication technology. Third generation Wireless Wide Area Networks (WWAN) communication systems are 74 75 characterised by high-speed data rates (144 Kbps to 2+ Mbps ) suitable for multimedia content. 3G technologies typically are packet-switched and use Code Division Multiple 76 Access (CDMA) technology to communicate. Examples of 3G include EDGE , 1xRTT, HDR 77 and W-CDMA . 3G protocols in mobile telephony support higher data transmission rates, measured in Mbps, intended for applications other than voice. 3G support broadband and bandwidth applications, such as full-motion video, video conferencing and Internet access. 4G or fourth generation 4G or fourth generation WWAN communication systems are characterised by high-speed data rates at 20+ Mbps, suitable for high-resolution movies and television. The initial deployment of 4G communication systems is expected in 2006-2010. The proposed features of these systems include 100 Mbps speed, location sensing and self-tailoring to user needs. AAC Advance Audio Coding: It is an advanced audio compression algorithm used for downloading music files, streaming video, audio and satellite-radio applications. AMR Adaptive Multi-Rate: It is a data compression tool used for coding audio forms, such as speech. It makes use of different modes of encoding, such as ACELP, DTX, VAD and CNG, to tackle unlikely network conditions 73 Personal Communications Service (PCS) Kilobits per second (Kbps) 75 Megabits per second (Mbps) 76 Enhanced Data for Global Evolution (EDGE) 77 Wideband Code Division Multiple Access (W-CDMA) 74 © 2009, Portio Research. All Rights Reserved 251
  • 252. Ranking The World’s Best Mobile Operators AMPS Advanced Mobile Phone System: A 1G standard, which operates in the 800-900MHzfrequency band. It is still widely used in the United States. Average Profit per User (APPU) Measures the average monthly profit generated for each customer unit, such as a handset or pager that an operator has in operation. Average Revenue per User (ARPU) Measures the average monthly revenue generated for each customer unit, such as a handset or pager that an operator has in operation. Backhaul It refers to the process of transmitting voice and data traffic from a remote site to a central site. BMP BMP is an extension for files containing graphics. It is used as a graphics file format on the Microsoft Windows platform. It stores image formats of different bit sizes. It regenerates the image in its own form and does not have any compressing capabilities. However, it can adapt itself to other image software’s running on other operating systems. This graphic format also comes with .DIB (device-independent bitmap), .XBM, .XPM and .TGA extensions. BMP files can support lossless data compression algorithms because of their spare capacities. BoP Bottom of Pyramid: It refers to poorest socio economic groups. BREW Binary Runtime Environment for Wireless: It is an application development platform developed by Qualcomm. It enables wireless users to download and run applications, such as enhanced e-mail, location positioning, games, etc., to BREW-enabled handset. BREW was first introduced and developed for CDMA handsets, but it now supports GSM/GPRS and UMTS handsets as well. Broadcast Technologies for Mobile TV Some of the broadcast technologies for mobile TV worldwide are: 78 DVB-H (Digital Video Broadcast – Handheld): DVB-H technology allows simultaneous broadcast of television, video and radio channels on mobile, and helps operators to preserve network bandwidth for other data and voice services. It has been accepted as the standard by the European Telecommunications Standards Institute (ETSI). ISDB-T (Integrated Services Digital Broadcast – Terrestrial): It is the transmission standard that has been developed in Japan to help the radio and television stations support digital content. DMB (Digital Media Broadcast): It is a transmission standard, which transmits video feed via satellite (S-DMB) or terrestrial (T-DMB) mode. The standard is currently deployed in Korea and is being increasingly used in other parts of Asia as well as Europe. MBMS (Multimedia Broadcast/Multicast Service): This standard allows the transmission of multimedia content over the UMTS and GSM network. 78 Source: http://www.strategiy.com/inews.asp?id=20041127000355 252 © 2009, Portio Research. All Rights Reserved
  • 253. Ranking The World’s Best Mobile Operators BTS Base Transceiver Station: It is the equipment that facilitates the wireless communication between user equipments such as mobile handsets, computers etc., and the mobile network. BWA Broadband Wireless Access: It is a form of fixed wireless access system. CAPEX Capital Expenditure: It refers to the cost of developing a product or system. CDMA Code Division Multiple Access: In a CDMA system, each voice circuit is labelled with a unique code and transmitted on a single channel simultaneously along with many other coded voice circuits. The receiver uses the same code to recover the signal from the noise. CDMA2000 1x CDMA2000 1x: This is regarded as the first phase of CDMA2000 technology used for providing voice and data services over mobile networks. Data speeds of 307kbps are using a single channel while with two channels speeds of 614kbps are possible. Churn Rate It is the rate at which the subscribers cancel their subscription with the existing operator and sign up with another operator. Concatenate It refers to the operation of joining of two character strings end to end Disposable income Disposable income is gross income minus income tax applicable on that income, and hence the amount of income left to an individual after taxes have been paid that is available for spending and saving. DoJa It is a JAVA-based technology/application developed for DOCOMO's i-mode mobile handset. It allows users to access more interactive applications or content than the conventional HTML-based i-mode content. DRM Digital Rights Management: It refers to a set of technologies used for the administration of digital content. It authorises the nature and restricts the frequency of the usage based on the administrative policy settings. It sustains the revenue of the mobile network operator by regulating the usage of content at end user. DSL Digital Subscriber Loop: It is a technology that provides digital data transmission over the copper lines of a PSTN network. DVB-H Digital Video Broadcasting-Handheld is a mobile TV format. Broadcast services can be brought to mobile handsets using this technical specification. EBITDA margin EBITDA margin is the ratio in percentage of EBITDA to the total revenue earned by an MNO. EBITDA is the earnings of an MNO before accounting for Interest, Taxes, Depreciation and Amortization. © 2009, Portio Research. All Rights Reserved 253
  • 254. Ranking The World’s Best Mobile Operators EDGE Enhanced Data rates for Global Evolution: An enhanced modulation technique designed to increase network capacity and data rates in GSM networks. EDGE should provide data rates up to 384 Kbps. EDGE will let operators without a 3G license compete with 3G networks offering similar data services. Emoticon Emoticons are symbols or combination of symbols used to convey emotional content in messages. EV-DO Evolution Data Only, Evolution Data Optimised: It is a wireless radio broadband data protocol being adopted by many CDMA operators. It is being used as a part of CDMA2000 networks in Japan, Korea, the United States and Canada. It provides better data speeds in comparison to GSM technologies such as GPRS and EDGE. ExEn Execution Environment: It is an application developed by Infusio for developing games for higher-end mobile devices. GIF Graphics Interchange Format: It is a file extension to a different kind of bitmap image. This format of file is capable of compressing the size of the file, unlike a normal BMP format file. The compression process does not result in loss of data. This feature ensures the quality of image by simultaneously reducing the downloading times by a considerable amount. This format is only suitable for images of 256 and less colours. It causes limitation in formatting picture files. GPRS General Packet Radio Service (GPRS) is a packet-based standard for mobile communication, which runs at speeds up to 115 kilobits per second, compared with GSM systems' 9.6 kilobits per second. GPRS supports a wide range of bandwidths and makes efficient use of limited bandwidth. It is particularly suited for sending and receiving small bursts of data, such as e-mail and web browsing, as well as large volumes of data. Applications for GPRS may include any of the following: chat, text and visual information, still images, moving images, web browsing, document sharing/collaborative working, audio, job dispatch, corporate e-mail, Internet e-mail, vehicle positioning, remote Local Area Network (LAN) access, file transfer or home automation. GSM Global System for Mobile communications, the most widely used digital mobile phone system and the mobile telephone standard in Europe. It was originally defined as a panEuropean open standard for a digital cellular telephone network to support voice, data, text messaging and cross-border roaming. GSM is now one of the world's main 2G digital wireless standards. GSM is present in more than 160 countries and according to the GSM Association, accounts for approximately 70 percent of the total digital cellular wireless market. GSM is a time division multiplex (TDM) system. Implemented on 800, 900, 1800 and 1900 MHz frequency bands. GUI Graphical User Interface (GUI) is the front-end interface and navigation design of an application. This includes standard formats for representing text and graphics. GUIs have become the standard ways for interaction between users and digital devices. 254 © 2009, Portio Research. All Rights Reserved
  • 255. Ranking The World’s Best Mobile Operators HTML Hyper Text Mark-up Language: It is a syntax based language used for designing web pages. The content of HTML, written in standard syntax, when opened in a web browser takes the form of Web page. The nascent version of HTML was used with easy syntax rules in comparison to existing HTML and MHTML versions of it. In recent times, the official standards of World Wide Web recommend Web developers to use XHTML 1.1, XHTML 1.0 and HTML 4.01 versions. IC An Integrated Circuit which is also known as a chip is a small electronic circuit made out of semiconductor material. IC is used in almost all electronic equipment in use today. iMelody It is a standard format through which music tones can be transferred between devices. The format has volume modifiers to vary the volume throughout the tone duration, codes for flashing phone’s backlight and other features. iMelody was developed by the irDa association (infrared communications). Instant Messaging Instant Messaging is an Internet-based service that alerts users when their friends or colleagues are online and allows them to communicate with each other in real-time through private online chat areas. With instant messaging, users create a list of other users with whom they want to communicate. When a user from their list is online, the service alerts them and enables an immediate contact with the other user. While instant messaging has primarily been a proprietary service offered by Internet service providers such as AOL and MSN, businesses are starting to employ instant messaging to increase employee efficiency and make expertise more readily available to employees. Intranet The intranet is a private network inside a company or an organisation, and uses software similar to that used on the Internet. Companies use intranets to manage projects, provide employee information, distribute data and information, etc. i-mode i-mode is a proprietary packet-based information service for mobile handsets. It delivers information (such as mobile banking, and train timetable) to handsets and enables exchange of e-mail from mobile handsets on the PDC-P network. Launched in 1999 by NTT DOCOMO, i-mode is very popular in Japan (especially for e-mail and transfer of icons). IMPS IMPS (Instant Messaging and Presence Service) is an instant messaging system designed for mobile environments. Presence refers to the availability of a user for communication. IMS IMS IP Multimedia Subsystem is an extension of the GSM / 3GPP GPRS core Network. It uses SIP (Session Initiation Protocol) to set up, maintain and terminate packet-switched voice and multimedia sessions. Interoperability This is defined as the ability of a network to operate with other networks, such as two systems based on different protocols or technologies. J2ME Java2, Micro edition: The Micro Edition of the Java 2 Platform provides an application environment that specifically addresses the needs of commodities in the vast and rapidly growing consumer and embedded space, including mobile handsets, pagers, personal digital assistants, set-top boxes, and vehicle telematics systems. © 2009, Portio Research. All Rights Reserved 255
  • 256. Ranking The World’s Best Mobile Operators Java A simple platform-independent object-oriented programming language used for writing applets that are downloaded from the World Wide Web by a client and run on the client's machine. JPEG Joint Photographic Experts Group: This is the most commonly used format for storage and transmission of images on the Internet. The format uses lossy compression techniques wherein the compressed data is very close to the original form. An advanced form of the JPEG standard known as JPEG File Interchange Format (JFIF) is capable of formatting the size of graphics according the storage capacity of computer and transmission medium. LTE Long-Term Evolution (LTE) is the standard being developed by 3GPP to achieve download rates of 100Mbps, and upload rates of 50Mbps for every 20MHz of spectrum and is termed as a 4G standard. LTE will have support for bandwidths ranging from 1.25MHz to 20MHz. The LTE group is expected to come up with concrete recommendations by September 2007. MIDI Musical Instrument Digital Interface: It is a protocol which acts as an interface between musical notes of an electronic instrument and computer. The orchestral performance and notes are defined (formatted) into a form, which can be understood and played by computers, i.e., MIDI is capable of playing the actual piece of orchestra unlike a recorded version. MNO market penetration It is the mobile subscriber base of an MNO expressed as a percentage of total population of the country of operation. Mobile Number Portability (MNP) MNP is a facility which allows mobile subscribers to retain their mobile number when moving between mobile networks. Mobile penetration It is the mobile subscriber base in a country expressed as a percentage of its total population. MP3 It is an expert compressing tool, which has been widely used in musical content rendering. It is capable of compressing audio files up to 10 percent of its original size. MPEG layer-3 (MP3) format can retain the full quality of an actual song by unperceivable deviations. MVNO Mobile Virtual Network Operator: Term used for a mobile operator who does not own its own spectrum and usually does not have its own network infrastructure. Instead, MVNOs have business arrangements with traditional mobile operators to buy minutes of use (MOU) for sale to their own customers. Node - B It is a term used in Universal Mobile Telecommunications System (UMTS) to refer to the Base Transceiver Station (BTS). Nokia Binary It is an audio format developed by Nokia, which allows mobile users to send ringtones to some Nokia handsets and other brands. It is also known as SCKL, since all the messages begin by //SCKL. 256 © 2009, Portio Research. All Rights Reserved
  • 257. Ranking The World’s Best Mobile Operators OPEX Operating Expenditure: It refers to the ongoing costs for running or operating a product or system. Packet Data Packet data is a method of transmitting information in small packets each containing a certain amount of the information. Packet data networks allow transmission of high-speed data to and from devices connected to the network. Packet Data is similar to dial-up Internet 79 access available in homes or in businesses with cable modems, ADSL lines, etc. PCO Public Call Office: It refers to the telephone facility located in a public place. PCS networks Personal Communications Service Networks: In the U.S., the 1.9 GHz band has been allocated for PCS systems; the allocated spectrum is 120 MHz wide and is licensed as two 30 MHz segments for the 51 major trading areas, and three 10 MHz segments for the 493 basic trading areas. PDA Personal Digital Assistant: A portable computing device capable of transmitting data. This device makes possible services such as paging, data messaging, electronic mail, computing, facsimile, date book and other information handling capabilities. PDC This stands for Personal Digital Cellular, a Japanese cellular standard. PHS system This stands for Personal Handy phone system, a Japanese cordless standard. PIM Personal Information Manager: Also known as a "contact manager," is a form of software that logs personal and business information, such as contacts, appointments, lists, notes, occasions, etc. PNG Portable Network Graphics: This tool replicates the GIF format in it’s functioning with compression as an added feature. This format similar to GIF is capable of working on different platforms, backed by library functions. It is a non-lossy compression tool. Purchasing Power Parity (PPP) Purchasing Power Parity is the amount of adjustment required on the exchange rate between two countries to take into account each currency's purchasing power for identical goods in those countries. PTT Push to Talk is a two way communication system which allows only one user to talk at any given time. This system, comparable to walky-talky is unlike mobile handsets which allow multiple users to speak at the same time. QCP QCP is a format used for ringtones. The format was developed by Qualcomm PureVoice. 79 Asymmetric Digital Subscriber Line (ADSL) © 2009, Portio Research. All Rights Reserved 257
  • 258. Ranking The World’s Best Mobile Operators RAN Radio Access Network: It is a component that exists between the mobile handset and the core network. It performs the radio functionality of the network and provides connection to the core network. SIM card It is a smart card that gives GSM handset its user identity. The card is inserted into a GSM/TDMA or GSM-only mobile handset containing subscriber-related data. The card contains 18 digits code for GSM markets and 20 digits code for TDMA markets. SIM Toolkit Subscriber Identity Module Application Toolkit: It is used by network operators to provide a user friendly interface on a subscribers’ handset to access value-added services provided by them. These applications also provide a mechanism for storing and using any service specific parameters. These applications are built within a SIM card by mobile network operators. SIMPLE SIMPLE (Session Initiation Protocol for Instant Messaging and Presence Leveraging Extensions) is an open standard instant messaging (IM) protocol. SIP Session Initiation Protocol or SIP is a standard multimedia and telephony protocol for initiating an interactive user session over mobile networks. The services under SIP may include call forwarding, number delivery, authentication and other telecoms applications. Smartphone Smartphone is a phone with a microprocessor, memory, screen and built-in modem. The Smartphone combines some of the capabilities of a PC in a phone device. Most of the current models also include a Web browser. SMS TV This is defined as the use of SMS for variety of applications, such as voting, teletext chat for TV programmes. SMSC Short Message Service Centre (SMSC) provides the routing of all SMS or text messages in any mobile network. Similar to e-mail server, the SMSC handles large volumes of messages sent between two mobile handsets or a mobile handset and a software application. SoC System on Chip: It refers to the process of integrating all the components of an electronic system into a single integrated circuit or chip. SS7 SS7 is a global standard for telecommunications defined by ITU Telecommunication Standardisation Sector (ITU-T). The standard defines the procedures and protocol by which network elements in the public switched telephone network (PSTN) exchange information over a digital signalling network to effect mobile (cellular) and wire-line call setup, routing and control. Thin Client Thin Client refers to a client computer or client software in client-server architecture networks. The primary purpose of Thin Client is to convey input and output between the user and the remote server. 258 © 2009, Portio Research. All Rights Reserved
  • 259. Ranking The World’s Best Mobile Operators TIFF Tagged Image File Format: It is a platform free image format, which enables reproduction of an image created on a platform, such as Macintosh, on other platform such as an ordinary PC. It is an advanced tool for storing bit map or graphic image on different platforms. TIFF format supports scanned image, fax and other applications involving editing of image. TDD Time Division Multiplex: This is a scheme for allowing simultaneous transmission and receiving of data at the same frequency, but with the different time slots allocated to them. TDMA Time Division Multiple Access: A TDMA channel is a single FDMA channel divided up in time into multiple time slots. TDMA system is able to transmit multiple voice circuits per channel. Three users can take it in turn to share one radio channel. The channels can vary in bandwidth and depending on the type of system, the time slots can transmit all or part of a voice circuit. Each user's speech is stored, compressed and transmitted as a quick packet, using controlled time slots to distinguish them-hence the phrase 'time division'. It uses 30 KHz channels and a vocoder rate of 8 Kbits/sec. At the receiver, the packet is decompressed. UMTS Universal Mobile Telecommunications System: This is the future transmission network for third generation mobile telephones, as defined by the International Telecommunications Union (ITU). In time, UMTS could reach transmission capacities of 2 Mbits/sec. (compared to 9.6 Kbits/sec. for GSM). Initially UMTS will offer rates of 144 to 384 Kbits/sec. This standard will make the development of new multimedia services having very wide bands and new uses, notably in the transmission of video, images and sound possible. UMTS TDD Universal Mobile Telecommunication System (UMTS) Time-Division-Depleting (TDD): UMTS TDD Mobile Broadband technology is a packet data implementation of the international 3GPP UMTS standard and is designed to work in a single unpaired frequency band. It is designed to generate typical data transfer rates of up to 2 Mbps. UMTS FDD Universal Mobile Telecommunication System (UMTS) Frequency Division Duplex (FDD): It is designed to generate typical data transfer rates of up to 384 Kbps and is suitable for wide area coverage due to potentially high reach. VAS Mobile operators offer various services which are not part of the basic voice offer. These services are availed off separately by the mobile subscribers. It includes services such as SMS, MMS, mobile e-mail, mobile games, mobile music etc. These also include services such as WAP, voicemail, call diversion, etc. vCalender It is a standard format used to exchange information about schedules and activities electronically via an e-mail attachment. vCalender requires a personal information manager (PIM) type of application program. The format was developed by a consortium founded by Apple, AT&T, IBM and Siemens. vCard vCard is an electronic business card used for exchanging personal information digitally. It contains name, address information, company logos, URLs, photographs and sound clips. It was developed by a consortium founded by Apple, AT&T, IBM and Siemens. © 2009, Portio Research. All Rights Reserved 259
  • 260. Ranking The World’s Best Mobile Operators WAP Wireless Advance Protocol: WAP is a specification for a set of communication protocols to standardise the way mobile devices, such as handsets and radio transceivers, can be used for Internet access. The WAP standard is based on Internet standards (HTML, XML and TCP/IP). It consists of a Wireless Markup Language (WML) specification, a WMLScript specification, and a Wireless Telephony Application Interface (WTAI) specification. The WAP protocol is the leading standard for information services on wireless terminals such as digital handsets. Some examples of WAP for accessing information include the following: checking train timings, purchasing tickets, flight check-in, viewing traffic information, checking weather conditions, looking up stock values, looking up phone numbers, looking up addresses or looking up sport results, and there are countless more. WAV It is a widely used audio format for wireless devices which is limited to files less than 2 GB in size. WBMP It is a graphic file format used for sending Web content to wireless devices. The format is designed to support multiple image types for WAP-enabled wireless phones. WiBro Wireless Broadband: The technology was formulated by South Korean telecom industry as an equivalent to mobile WiMAX international standard. Wi-Fi Wireless Fidelity: It is used to provide wireless local area network through enhanced interoperability of the network. Services such as Internet, VoIP phone access, and gaming, etc., can be provided using Wi-Fi. WiMAX Worldwide Interoperability for Microwave Access: It is a telecommunication technology used for wireless data transfer over long distances through point-to-point links as well as mobile cellular type access. It is based on standards that are useful in wireless broadband access. Wireless MAN Wireless Metropolitan Area Network: The technology is used to provide wireless network over a larger area as compared to local area network. WLL Wireless Local Loop: It refers to the wireless devices that are situated in fixed locations. The signal transmissions occur through the air and it provides connectivity to the users in remote and isolated areas without the need for laying new cables. WMA Windows Media Audio: It is a compression format with Digital Rights Management features incorporated in it. It compresses the content to half of what an MP3 can do with the same content. This feature makes it more adaptable to lower memory devices such as handsets. WML Wireless Mark-up Language is an XML and a HTML-based language used for creating content, which can be delivered to wireless hand-held devices. This language supports WAP (Wireless Application Protocol) standards just as HTML supports World Wide Web (http) standards. WML is useful in accessing text on web pages over hand-held devices. 260 © 2009, Portio Research. All Rights Reserved
  • 261. Ranking The World’s Best Mobile Operators W-CDMA Wideband Code Division Multiple Access: The third generation standard offered to the International Telecommunication Union by GSM proponents. This is a 3G technology that increases data transmission rates in GSM systems by using CDMA instead of TDMA. W-CDMA has become the Direct Sequence mode in the ITU's 3G specification, which includes the 1x Multi-Carrier mode (1x MC) and 3x Multi-Carrier mode (3x MC). 1x MC (formerly known as cdma2000) and 3x MC comprise the 3G upgrade paths for operators already using CDMA. © 2009, Portio Research. All Rights Reserved 261
  • 262. Ranking The World’s Best Mobile Operators Portio Research Classifications Geographical Regions: There is sometimes a difference in the way research firms classify the major geographical territories. At Portio Research, we follow 'obvious' geographical lines, but for the record, here are the regional definitions we follow, unless otherwise stated in the report: Western Europe: Standard classification includes Iceland and various islands Central and Eastern Europe: Includes standard list of Central and Eastern European countries, and the Baltic states, Balkans, Russia, Greece and Turkey Asia Pacific: Includes Australasia, the Indian Sub-Continent, Pakistan, Afghanistan, Sri Lanka, Maldives and the Former Soviet Union Central Asian republics North America: Standard classification, including Hawaii and islands to the North Latin America: Includes all South and Central American countries including Mexico, The Caribbean and The West Indies Middle East: Includes Israel and all Middle Eastern countries East of Egypt, South of Turkey and West of Afghanistan Africa: Standard classification includes territories in Western Indian Ocean Mobile Subscribers Generally, we count active SIMs, and we consider active as being used within 3 months, but, of course there is some room for variance, depending on what figures operators themselves publish or report to us when we interview them. When running spot-checks on operator numbers, we are governed by the figures they give us, and as we are all aware, many individuals and companies around the world count their subscribers/subscriptions by a number of different criteria. We refer to "total subscribers" for a network/country or globally, as a count of the total number of active subscriptions those networks have, and as such this can cause a slight distortion of any country-penetration rate. Currency and Monetary Values All monetary values quoted in this report are in US Dollars as the most widely recognised benchmark internationally. The currency conversion has been done on the year average basis. Whilst researching global mobile markets, we use http://www.oanda.com/ for all currency conversion calculations. 262 © 2009, Portio Research. All Rights Reserved
  • 263. Ranking The World’s Best Mobile Operators Companies Mentioned in this Report 3 Austria 3 Italia 3 The UK AIS Thailand Asiacell Iraq AT&T The US Avea Turkey Banglalink Bangladesh Base (KPN) Belgium Beeline Ukraine Bell Mobility Canada Bharti Airtel India BITE Lithuania Bouygues France Brasil Telecom Celcom Malaysia Cell C South Africa Cellcom Israel Celtel (Zain) DR Congo China Mobile China Unicom Chunghwa Taiwan Claro Argentina Claro Brazil Claro Chile Claro Peru Comcel Colombia Cosmote Greece CSL New World Mobility Hong Kong DiGi Malaysia Digitel Venezuela Djezzy (Orascom) Algeria DNA Finland DTAC Thailand du The UAE Elisa Finland Entel PCS Chile E-Plus Germany Etisalat Misr Egypt Etisalat The UAE Excelcomindo Indonesia FeT Taiwan Globacom Nigeria Globe The Philippines Globul Bulgaria GrameenPhone Bangladesh http://www.drei.at/portal/de/privat/Privat_Home_1.html http://www.tre.it/public/home.php http://www.three.co.uk/Home http://www.ais.co.th/en/index.html http://www.asiacell.com/ http://www.att.com/ http://www.avea.com.tr/ http://www.banglalinkgsm.com/ http://www.base.be/ http://www.beeline.ua/ http://www.bell.ca/home/ http://www.airtel.in/ http://www.bite.lt/ http://www.bouyguestelecom.fr/ http://www.oi.com.br/index.html http://www.celcom.com.my/cep/ http://www.cellc.co.za/ http://www.cellcom.co.il/ http://www.cd.zain.com/fr/ http://www.chinamobileltd.com/ http://www.chinaunicom.com.cn/ http://www.cht.com.tw/CHTFinalE/Web/ http://www.claro.com.ar/ http://www.claro.com.br/portal/ http://www.clarochile.cl/ http://www.claro.com.pe/ http://www.comcel.com.co/ http://www.cosmote.gr/ http://www.hkcsl.com/ http://www.digi.com.my/ http://www.digitel.com.ve/ http://www.djezzygsm.com/ http://www.dna.fi/ http://www.dtac.co.th/english/ http://www.du.ae/ http://www.elisa.fi/ http://www.entelpcs.cl/ http://www.eplus.de/ http://www.etisalat.com.eg/ http://www.etisalat.ae/ http://www.xl.co.id/ http://www.fetnet.net/ http://www.gloworld.com/ http://www.globe.com.ph/ http://www.globul.bg/eng/ http://www.grameenphone.com/ © 2009, Portio Research. All Rights Reserved 263
  • 264. Ranking The World’s Best Mobile Operators HTIL Hong Kong Hutch Sweden Hutch Thailand Idea Cellular India Iusacell Mexico KDDI Japan KPN The Netherlands KTF South Korea Kyivstar Ukraine LG Telecom South Korea life:) Ukraine M1 Singapore Maroc Telecom Morocco Maxis Malaysia Meditel Morocco MegaFon Russia Meteor Ireland Mobilink Pakistan Mobilkom Austria Mobiltel Bulgaria Mobily Saudi Arabia MobiNil Egypt Mobistar Belgium Movilnet Venezuela Movistar Argentina Movistar Chile Movistar Colombia Movistar Mexico Movistar Spain Movistar Venezuela mt:s Serbia MTN Afghanistan MTN Iran MTN Nigeria MTN South Africa MTN Sudan MTN Syria MTS Belarus MTS Russia MTS Ukraine Nedjma Algeria Netcom Norway Nextel Argentina Nextel Brazil Nextel Peru NTT DOCOMO Japan O2 Czech Republic O2 Germany 264 http://www.three.com.hk/ http://www.tre.se/ http://www.hutch.co.th/ http://www.ideacellular.com/ http://www.iusacell.com.mx/ http://www.kddi.com/ http://www.kpn.com/ http://www.kt.com/ http://www.kyivstar.ua/en/ http://www.lgtelecom.com/ http://www.life.com.ua/index.php?lng=en http://www.m1.com.sg/ http://www.maroctelecom.com/ http://www.maxis.com.my/ http://www.meditel.ma/ http://eng.megafon.ru/ http://www.meteor.ie/ http://www.mobilinkgsm.com/ http://www.mobilkom.at/ http://www.mtel.bg/ http://www.mobily.com.sa/ http://www.mobinil.com/ http://www.mobistar.be/ http://www.movilnet.com.ve/ http://www.movistar.com.ar/ http://www.movistar.cl/ http://www.movistar.com.co/ http://www.movistar.com.mx/ http://www.movistar.es/ http://www.movistar.com.ve/ http://www.telekom.yu/ http://www.mtn.com.af/ http://www.irancell.ir/ http://www.mtnonline.com/ http://www.mtn.co.za/ http://www.mtn.sd/ http://www.spacetelsyria.com/ http://www.mts.by/ http://www.mtsgsm.com/ http://www.mts.com.ua/ http://www.nedjma.dz/ http://www.netcom.no/ http://www.nextel.com.ar/ http://www.nextel.com.br/ http://www.nextel.com.pe/ http://www.nttdocomo.com/ http://www.cz.o2.com/ http://www.telefonica.de/ © 2009, Portio Research. All Rights Reserved
  • 265. Ranking The World’s Best Mobile Operators O2 Ireland O2 The UK Oi Brazil Omnitel Lithuania Optimus Portugal Optus Australia Orange Austria Orange France Orange Poland Orange Slovakia Orange Spain Orange Switzerland Orange The UK Pannon Hungary Partner Communications Israel PCCW Mobile Hong Kong Pelephone Israel Polkomtel Poland Promonte Montenegro Proximus Belgium PTC Poland Reliance Communication India Rogers Canada Safaricom Kenya SFR France Sibir Telecom Russia SingTel Singapore SK Telecom South Korea Smart The Philippines SmarTone Hong Kong SoftBank Japan Sonofon Denmark Sprint The US Starhub Singapore Sun The Philippines Sunrise Switzerland Swisscom Switzerland Taiwan Mobile TCI Iran TDC Denmark Telcel Mexico Tele2 Croatia Tele2 Lithuania Tele2 Russia Tele2 Sweden Telecom Italia Telecom Mobile New Zealand Telecom Personal Argentina © 2009, Portio Research. All Rights Reserved http://www.o2online.ie/ http://www.o2.co.uk/ http://www.oi.com.br/ http://www.omnitel.lt/ http://www.optimus.pt/ http://www.optus.com.au/ http://www.orange.at/ http://www.orange.com/ http://www.orange.pl/ http://www.orange.sk/ http://www.orange.es/ http://www.orange.ch/ http://www.orange.co.uk/ http://www.pannon.hu/ http://www.orange.co.il/ http://www.pccwmobile.com/ http://www.pelephone.co.il/ http://www.plusgsm.pl/ http://www.promonte.com/ http://www.proximus.be/ http://www.era.pl/ http://www.rcom.co.in/ http://www.rogers.com/ http://www.safaricom.co.ke/ http://www.sfr.fr/ http://www.sibirtelecom.ru/ http://home.singtel.com/ http://www.sktelecom.com/ http://www.smart.com.ph/ http://www.smartone.com.hk/ http://mb.softbank.jp/mb/ http://www.sonofon.dk/ http://www.sprint.com/ http://www.starhub.com/ http://www.suncellular.com.ph/ http://www.sunrise.net/ http://www.swisscom.com/ http://www.taiwanmobile.com/ http://www.irantelecom.ir/ http://www.tdc.dk/ http://www.telcel.com/ http://www.tele2.hr/ http://www.tele2.lt/ http://www.tele2.ru/ http://www.tele2.se/ http://www.tim.it/ http://www.telecom.co.nz/ http://www.personal.com.ar/ 265
  • 266. Ranking The World’s Best Mobile Operators Telefonica Peru Telefonica Slovakia Telenor Norway Telenor Pakistan Telenor Serbia Telenor Sweden Telia Denmark Telia Sonera Finland Telia Sonera Sweden Telkomsel Indonesia Telstra Australia Telus Mobility Canada Tigo (MIC) DR Congo Tigo Colombia TIM Brasil TMN Portugal T-Mobile Austria T-Mobile Croatia T-Mobile Czech Republic T-Mobile Germany T-Mobile Hungary T-Mobile Montenegro T-Mobile Slovakia T-Mobile The Netherlands T-Mobile The UK T-Mobile The US Truemove Thailand Tunicell Tunisia Tunisiana Tunisia Turkcell Turkey Velcom Belarus Verizon The US VimpelCom Russia VIP Serbia VIPnet Croatia Vivatel Bulgaria Vivo Brazil Vodacom DR Congo Vodacom South Africa Vodafone Australia Vodafone Czech Republic Vodafone Egypt Vodafone Germany Vodafone Greece Vodafone Hungary Vodafone India Vodafone Ireland Vodafone Italy 266 http://www.movistar.com.pe/ http://www.sk.o2.com/ http://www.telenor.com/ http://www.telenor.com.pk/ http://www.telenor.co.yu/ http://www.telenor.se/ http://www.telia.dk/ http://www.sonera.fi/ http://www.telia.se/ http://www.telkomsel.com/ http://www.telstra.com.au/mobile/ http://www.telusmobility.com/ http://www.tigo.cd/ http://www.tigo.com.co/ http://www.timbrasil.com.br/ http://www.tmn.pt/ http://www.t-mobile.at/ http://www.t-mobile.hr/ http://www.t-mobile.cz/ http://www.t-mobile.de/ http://www.t-mobile.hu/ http://www.t-mobile.me/ http://www.t-mobile.sk/ http://www.t-mobile.nl/ http://www.t-mobile.co.uk/ http://www.t-mobile.com/ http://www.truemove.com/ http://www.tunisietelecom.tn/ http://www.tunisiana.com/ http://www.turkcell.com/ http://www.velcom.by/ http://www.verizonwireless.com/ http://www.vimpelcom.com/ http://www.vipmobile.rs/ http://www.vipnet.hr/ http://www.vivatel.bg/ http://www.vivo.com.br/ http://www.vodacom.cd/ http://www.vodacom.co.za/ http://www.vodafone.com.au/ http://www.oskarmobil.cz/ http://www.vodafone.com.eg/ http://www.vodafone.de/ http://www.vodafone.gr/ http://www.vodafone.hu/ http://www.vodafone.in/ http://www.vodafone.ie/ http://www.vodafone.it/ © 2009, Portio Research. All Rights Reserved
  • 267. Ranking The World’s Best Mobile Operators Vodafone New Zealand Vodafone Portugal Vodafone Romania Vodafone Spain Vodafone The Netherlands Vodafone The UK Vodafone Turkey Wind Hellas Greece Wind Italy Zain Iraq Zain Jordan Zain Kenya Zain Nigeria Zain Sudan © 2009, Portio Research. All Rights Reserved http://www.vodafone.co.nz/ http://www.vodafone.pt/ http://www.vodafone.ro/ http://www.vodafone.es/ http://www.vodafone.nl/ http://www.vodafone.co.uk/ http://www.vodafone.com.tr/ http://www.wind.com.gr/ http://www.wind.it/ http://www.iq.zain.com/ http://www.jo.zain.com/ http://www.ke.zain.com/ http://www.ng.zain.com/ http://www.sd.zain.com/ 267
  • 268. Ranking The World’s Best Mobile Operators About the Authors Areeb Khan Areeb Khan, lead author of this report, works as a Manager with Portio Research and Evalueserve, and is responsible for project planning, client interface and quality ownership of projects. He is a post graduate in Business Management from Indian Institute of Management, Calcutta. He has been working with Portio Research and Evalueserve since August, 2008. Gaurav Narula Gaurav Narula is working as a Senior Business Analyst with Portio Research and Evalueserve. He has worked on various projects related to telecom domain. He graduated from IT-BHU, Varanasi, India. He has been working with Portio Research and Evalueserve since March 2007. Vikas Kumar Vikas Kumar is working as a Business Analyst with Portio Research and Evalueserve. He has worked on various projects related to telecom domain. He graduated from IIT Delhi, India. He has been working with Portio Research and Evalueserve since July 2007. Deepak Mahajan Deepak Mahajan is working as a Business Analyst with Portio Research and Evalueserve. He graduated from Delhi College of Engineering, India. He has been working with Portio Research and Evalueserve since May 2008. John White John White has been Editor and contributing author for this report. John is Business Development Director for Portio Research and has over 18 years experience in the technical publishing industry. Working in the IT sector previously and in the telecoms industry for the last 11 years, John has extensive experience in the mobile sector. 268 © 2009, Portio Research. All Rights Reserved
  • 269. Ranking The World’s Best Mobile Operators Feedback Form Please use this form to provide feedback about this report. Your feedback is valuable, both to us and also to you – the more you tell us then the better we can make our future reports and directories and hence the better we can serve you in the future. Please be as honest as you like – you can tell us anything here, good or bad - and then you can fax this page to us, anonymously if you prefer, to +44 (0)1249 656967 Ranking the World’s Best Mobile Operators Please tell us what you like about this market study? Please tell us what you don’t like about this market study? Anything else you want to say? Optional: (If you would like a response, further information or further assistance) Your Name: __________________________________________ Your Job Title: ________________________________________ Company: ____________________________________________ Your E-mail Address: ___________________________________ Thank you! We truly appreciate your feedback and we will study your comments carefully, and in the strictest confidence. © 2009, Portio Research. All Rights Reserved 269
  • 270. Ranking The World’s Best Mobile Operators Also available from Portio Research Limited Portio Research Ltd is a UK-based research company focussing on the mobile space, providing reports, handbooks, directories and database products. New and Best Selling Reports in 2009 include: Mobile Handset Shipments Databank 2009 Portio’s exciting new 40 slide presentation provides crucial worldwide and regional mobile handset and smartphone shipment forecasts to 2013. This new presentation is crammed with clearly-presented and vital data including subscriber numbers, handset shipments by region and by vendor, handset revenues, vendor market share, smartphone shipments, and OS shipments. Please click here for more details. Mobile Entertainment Futures 2009-2013 This essential new report provides analysis and growth forecasts for mobile entertainment markets worldwide. With detailed briefings on mobile music, mobile games and mobile video services, as well as projections to 2013 on both a global and regional level, this new study is crammed with invaluable data that helps identify the next growth frontiers for mobile entertainment services and how to tap these future opportunities. Please click here for more details. Mobile Messaging Futures 2009-2013 Back by popular demand, you can now order the 3rd edition of our best selling messaging report. This new edition is even bigger and better than ever before, packed with detailed market analysis, traffic and revenue forecasts and a new 2008 vendor survey. The report gives you all the data you need for SMS, MMS, mobile email an mobile IM markets worldwide, all packed into this massive 382-page report. Please click here for more details. If you have any questions or if we can be of any assistance to you, please contact us by e-mail: info@portioresearch.com Copyright 2009. Portio Research Limited 2009 www.portioresearch.com 270 © 2009, Portio Research. All Rights Reserved
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  • 272. Parachute in a team that delivers effectively at any stage from concept to commercialisation Portio Consult provides critical technology and marketing expertise... We are an experienced, creative and hard working team of people with unrivalled technology, marketing and commercial expertise. Our track record of using cost effective and creative solutions to grow profitable businesses and penetrate new markets demonstrates our ability to deliver outstanding results in the competitive and converging world of telecoms, media, technology and communications. From experience we know that not everyone requires a complete end-to-end service. Our simple and effective approach allows you to select from a menu of services, meaning you can work with us for your smaller bespoke projects such as a market analysis exercise or sales lead generation programme through to more comprehensive technology and marketing programme requirements from concept to commercial success. Simply parachute us in and out as you need and we will deliver you fast and cost-effective results. The expertise that we can deliver as an individual project or as part of our service offerings include: • • • • • • • • • • • • • • • • • • • • • • Concepts to Commercialisation Consulting – helping you to design, develop and deliver products, services and projects within your business. We take you from conceptualisation through to commercial revenues and market presence Technical development consulting and vendor/partner identification and engagement Strategic advice and implementation, backed up by reports, industry opinion and analysis Workshop and educational sessions – linking divergent disciplines (television, internet, telecoms and communications) to create convergent, cross platform concepts Product marketing and management Corporate fundraising – seed, main round, mezzanine Intellectual Property and Legal Process support such as writing and researching patents Comprehensive go-to-market and channel/partner strategy and execution Company and product launches Corporate exit strategies and corporate merger integration programmes Employee mentoring Branding, messaging, positioning and value proposition development Collateral development: brochures, data sheets, white papers, articles, videos, demos, and direct mail Website design and copywriting Influencer outreach with PR, advertising and executive visibility programmes Online and digital media campaigns Sales lead and pipeline generation Exhibition and event planning, execution and support Corporate communications and PR: internal, external, stakeholders, influencers, partners, and crisis management Financial services research and support including quantitative research, financial modeling, sector research reports, pitch books and road show marketing packs Market and company research including competitor or supplier analysis and tracking Primary research such as gathering real-time information from business targets through multilingual phone and web surveys To discuss your specific requirements further please contact: Portio Consult T: +44 (0)208 742 1074 E: info@portioconsult.com W: www.portioconsult.com