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Final presentation on the strategy for the KPN Group Belgium in the Strategy seminar at the Solvay Brussels School of Economics and Management (MA2 students). ...

Final presentation on the strategy for the KPN Group Belgium in the Strategy seminar at the Solvay Brussels School of Economics and Management (MA2 students).

Team:
Céline Abi Abdallah
Pablo Castiel Gazier
Eugénie Verhasselt
Jean-Charles Vanderlinden

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  • Highly positive NPV for recomended strategy\n
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  • KPN has had a heavy success in IPTV services in the Netherlands with:\na constant progress in quaterly addings\n50k quaterly net addings after 3 years\n
  • ajouter le CAGR en bas?\n
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  • Double win:\n- Advertising costs and R&D give the 20% advantage (we have assumed we made 0% margin before)\n- The ZTE phones are much cheaper than the other phones 105€ average smartphone retail price vs 241€ for Belgium (56,4%) discount\n
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Transcript

  • 1. CÉLINE
ABI
ABDALLAH
‐
PABLO
CASTIEL
GAZIER
‐
EUGÉNIE
VERHASSELT
‐
JEAN‐CHARLES
VANDERLINDENSTRATEGY
SEMINARKPN
GROUP
BELGIUM
‐
SETTING
THE
GROUNDS
FOR
FUTURE
GROWTH 1
  • 2. ACKNOWLEDGEMENTS WE
WOULD
LIKE
TO
THANK: THE
SOLVAY
BRUSSELS
SCHOOL
OF
ECONOMICS
AND
MANAGEMENT OUR
PROFESSOR
OLIVIER
HAMOIR OUR
ASSISTANT
NICOLAS
LEEUW
 JEAN‐PAUL
PHILIPPOT
(RTBF
GENERAL
ADMINISTRATOR) FOR
THEIR
CONSTRUCTIVE
FEEDBACK,
VALUABLE
INSIGHTS
AND
RICH
LEARNING
EXPERIENCE THE
INFORMA
GROUP THOMAS
WEHMEIER
(PRINCIPAL
ANALYST,
MOBILE
OPERATORS) DEXTER
THILIEN
(RESEARCH
ANALYST,
MOBILE
OPERATORS) KALYAN
MEDAPATI
(SENIOR
ANALYST,
FIXED
TELECOMMUNICATIONS) FOR
THEIR
CONTINUOUS
SUPPORT
AND
PROVIDING
BEST
IN
CLASS
INTELLIGENCE THE
BELGIAN
INSTITUTE
FOR
POST
AND
TELECOMMUNICATIONS
(BIPT) DIRK
APPELMANS
(SPOKESMAN)FOR
HELPING
US
UNDERSTANDING
THE
COMPLEX
BELGIAN
TELECOM
LANDSCAPE
AND
INVITING
US
TO
THE
IBPT
INDUSTRY
 INFORMATION
EVENT
ON
THE
UPCOMING
3G
AND
4G
AUCTION
IN
BELGIUM
  • 3. { ‣ MARKET
OVERVIEW ‣ KPN
ISSUESGOALS
FOR
TODAY ‣ OPPORTUNITIES ‣ FINAL
STRATEGY ‣ Q&A
SESSION
  • 4. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MARKET
OVERVIEW:
BUSINESS
LANDSCAPE
 TELENET B2C
Telecom
market
(bn€)
‐
2009 Service Cable 2.609 1.879 809 Revenue €1,299
b€ 7% Reach Flanders BELGACOM 27% 30% Service Fixed
line
+mobile 33% Revenue €6,60
b€ 4% 34% 2% Reach Na]onwide 53% 55% 39% KPN
GROUP
BELGIUM 16% Service Mobile Mobile Fixed TV NUMERICABLE Revenue €0,785
b€ Service Cable B2B
Telecom
market
(bn€)
‐
2009 Reach Na]onwide 1.269 1.885 Revenue €0,046
b€ 3% Reach Brussels 27% 34% 4% Others 9% Telenet KPN
Group Mobistar VOO MOBISTAR Belgacom 63% 60% Service Cable Service Mobile Revenue €0,143
b€ Revenue €1,665
b€ Reach Walonia Reach Na]onwide Mobile Fixed 4Source
:
Annual
Reports
2009/2010,
Company
websites,
IDATE,
Jupiter.
  • 5. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MARKET
OVERVIEW:
MARKET
TRENDS Broadband
&
TV
Market
(M
subscriptions) Mobile
Phone
Market
(M
subscriptions) 5M 14M Flat
Markets 4M 11M 3M 7M 1M 4M TV
market Broadband
market Number
of
Households Mobile
phone
market Belgian
popula]on 0M 0M 2002 2004 2006 2008 2010 2012E 2014E 2016E 2002 2004 2006 2008 2010 2012E 2014E 2016E Fixed
Phone
Market
(M
subscriptions) Multiplay
Market
(M
subscriptions) 5M 5M Down
Market Up
Market 4M 4M 3M 3M 1M 1M Fixed
phone
market Number
of
Households Mul]play
market Number
of
Households 0M 0M 2002 2004 2006 2008 2010 2012E 2014E 2016E 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E 2016E 5Source
:
Team
analysis,
Informa
Group,
Company
annual
reports,
The
Economist
Business
Intelligence.
  • 6. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MARKET
OVERVIEW:
KPN
GROUP
BELGIUM MARKET
SHARE KPIs ARPU
mobile
(€/month) Revenue
break‐down
2009
(%) «KPN

is
a
mobile
telecommunicaHon
provider
 20.0
€ posiHoned
as
an
innovator
in
products
and
 15.0
€ services
via
a
segmented,
mulH‐brand
approach.» B2C B2B 10.0
€ 95% 5.0
€ 0
€ 2008 2009 2010 Belgium
in
KPN
Royal Mobile
Market
share
‐
volume
and
value Key
financial
indicators
(m€) in
revenue in
EBITDA 30
% 900M€ 5% 5% 23
% 675M€ 15
% 450M€ 8
% 225M€ 0
% 0M€ 2008 2009 2010 2008 2009 2010 95% 95% Subscrip]ons
(#) Value
(€) Total
revenue Ebitda Point
of
Sale
(#) Fixed
Market
share
‐
volume Capex
(m€/y)
and
%revenue 800 800 4.6
% 17% 150M€ 600 4.4
% 13% 113M€ 400 4.3
% 9% 75M€ 200 69 59 4.1
% 4% 38M€ 0 3.9
% 0% 0M€ Dealers Allo
Telecom Base
Shops 2008 2009 2010 2008 2009 2010 6Source
:
Team
analysis,
Annual
reports,
IBPT,
Press
releases.
  • 7. KPN
ISSUES
  • 8. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MOBILE:
4TH
ENTRANT
WILL
CAPTURE
8,3%
MARKET
SHARE
BY
2016 RATIONAL MODEL
‐
CABLE
OPERATOR • Auc]on
in
2.1GHz
and
1,8Ghz
band
will
start
in
 5,000,000 July
2011
for
poten]al
4th
entrant
(3G
license) • License
is
required
to
launch
within
18
month
 3,750,000 Number
of
B2C
clients (20%
coverage
provide
na]onal
roaming) CABLE
OPERATOR 2,500,000 • High
investment
in
license
and
 infrastructure
is
required. 1,250,000 Market
share
:
8,28% • But
s]ll
alrac]ve
:
 ‐ Convergence
as
a
LT
interest. ‐ Defensive
move
against
Mobistar
 0 and
KPN Dec‐11 Jun‐12 Dec‐12 Jun‐13 Dec‐13 Jun‐14 Dec‐14 Jun‐15 Dec‐15 Jun‐16 Dec‐16 Belgacom
Mobile Mobistar KPN
Group
Belgium Fourth
entrant INTERNATIONAL
PLAYER • Small
market
with
low
growth. • But
s]ll
alrac]ve
:
 • Very
high
probability
that
cable
operators
buy
a
license
together
(coverage
request) ‐ High
%
of
prepaid. • Worst
case
scenario
(entry
of
cable
operator)
taken
into
account
in
all
models. ‐ Belgian
=
Price
sensi]ve
belgian. • Too
late
to
take
any
acdon. ‐ Low
switching
cost
 8Source
:
Team
Analysis,
Informa
Group,
The
Economist
Business
Intelligence,
KPN
Investor
Presenta]on,
Early
mover
advantage
and
empirical
analysis
of
european
mobile
phone
market,
Meryl
Lynch
mmC.
  • 9. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MOBILE:
TERMINATION
RATES
TO
NEGATIVE
IMPACT
OF
‐168M€
NPV RATIONAL MODEL 20.0 19.5 20 18.0 18.5 18.5 19.0 300M€ 15 14.0 12.0 11.4 225M€ 10 5.7 150M€ 4.8 5 Proximus 2.9 Mobistar KPN
Group
Belgium 1.1 75M€ 0 2001 2003 2005 2007 2009 2011 2013 MTR
Asymmetry
in
Europe
 0M€ 60% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Diff
btw
Op1
&
Op2 Revenue Profit Cost 45% Diff
btw
Op1
&
Op3 30% • Trial
in
progress
but
low
chances
of
success 15% • Nega]ve
impact
of
‐168M€
NPV
over
5
years
(2011‐2016) 0% • No
acdon
can
be
taken UK Austria Spain Germany
 Ireland
 Belgium
 9Source
:
Team
analysis,
Informa
Group,
Corporate
annual
reports,
IBPT.
  • 10. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MOBILE:
GROWING
DEMAND
FOR
MOBILE
DATA Total
mobile
data
traffic
per
user
global
(MB
per
month) peak
time
usage
of
actual
3G
network
in
urban
areas 500MB 100% 407MB 375MB 75% 250MB 210MB 50% 100MB 125MB 46MB 9MB 20MB 25% 0MB 2008 2009 2010E 2011E 2012E 2013E 0% TOTAL Voice Video P2P Data 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% CAGR
(2008‐2013E) 115% 97% 137% 87% 98% Network
u]lisa]on
in
peak
]me Limit
of
technology
(Noise
issue) • Need
for
data
will
be
mul]plied
by
4
by
2013 • Average
CAGR
is
above
114% • Need
to
increase
the
network
capacity 10Source
:
Comscore,
Morgan
stanley
research,
AT&T,
Cisco
2008,
Ovum.

  • 11. SHOULD
KPN
EXIT
THE
BELGIAN
MARKET?
  • 12. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A SHOULD
KPN
EXIT
THE
BELGIAN
MARKET? KPI MATURE
MARKET
EBITDA
MARGIN
BENCHMARK Orange
(France
Telecom) KPN
GB
‐
Free
Cash
Flow 60% 130M€ 48% 98M€ 35% 65M€ 33M€ 23% 0M€ 10% KPN
Royal
should
keep
its
Belgian
subsidiary 2005 2006 2007 2008 2009 2010 Orange
ES Orange
PL BASE
BE Orange
FR • KPN
GB
KPI
are
in
KPN
Royal
benchmark Change
in
NOPAT
+
DA
/
Capex • KPN
GB:
5%
revenue
and
5%
EBITDA
of
KPN Vodaphone • 10,6%
Free
Cash
Flow
CAGR 60% 60% • KPN
GB
is
in
line
with
EU
EBITDA
margins 45% 30% 15% 48% 0% ‐15% 35% ‐30% ‐45% 23% ‐60% 2006 2007 2008 2009 2010 10% Voda
UK BASE
BE Voda
ES Voda
IT Belgium Germany Netherlands Total 12Source
:
Team
analysis,
NBB,
Belfirst,
Companies
Annual
reports.
  • 13. STRATEGIC
OPPORTUNITIES { ‣CURRENT
REVENUE
STREAMS ‣ NEW
REVENUE
STREAMS
  • 14. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MVNO:
DISCRIMINATE
THE
MARKET
WITH
LAUNCH
OF
TWO
MVNOS MVNO
MARKET
SEGMENTS Clients
number
(k)
and
MVNO
% 1,750,000 13% 1,312,500 10% GEOGRAPHICAL
&
MIGRANT MEDIA
&
ENTERTAINMENT • ay
yildiz • groupe
rossel 875,000 7% • chiama • vlaamse
mediamaatschappij • zoniq • het
belang
van
limburg • Ortel
mobile • rtl
group 437,500 3% RETAILER BANKING • Carrefour • / 0 0% • aldi 2006 2007 2008 2009 • phone
house TELECOM/CONVERGENCE %
of
total number
of
MVNO
clients • allo
telecom • Toledo
mobile DISCOUNT DATA BELGIUM FRANCE GERMANY NETHERLANDS UK • Simyo • Mobile
viking Market
share 12%
(2009) 6,5%
(2010) 30%
(2010) 20%
(2009) 15%
(2006) BUSINESS
&
M2M CHARITY • Base
business • ello
mobile Number
MVNO
companies 36 40 103 42 29 14Source
:
ARCEP,
Press
review,
IBPT,
Annual
reports,
BuddeComm
2008.
  • 15. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MVNO:
DISCRIMINATE
THE
MARKET
WITH
LAUNCH
OF
TWO
MVNOS ACTION MODEL Launch
of
2
new
MVNO
 100M€ CAGR 2012‐2016 • 21%
market
share
with
217
point
 RETAILER 15,8% of
sales. 75M€ (COLRUYT) • Only
major
retailer
not
proposing
 telecom
product 12,2% • In
depth
analysis
must
be
done
to
 50M€ MEDIA
 iden]fy
best
brand &
 • Poten]al
value
capturing
in
 ENTERTAINMENT 26,4% content
value
chain 25M€ • With
one
(or
more)
of
the
4
 biggest
retail
bank BANKS 0M€ • Legal
issues
must
be
taken
into
 2011 2012 2013 2014 2015 2016 account Profit Revenue Cost Bull Bear RISK
FACTOR NPV
(5
years
)
 • Have
to
convince
partners
before
other
MNO. • Full
MVNO
might
change
network. • Legal
issues
might
slow
down
launch
process. Probability Fit
factor 

72.097
k€ 15Source
:
Team
analysis,
wireless
Inteligence,
Vandercammen
M.
et
Jospin‐Penet
N.
La
distribu]on
2009,
Nielsen,
Belfin
(Insight
consul]ng),
Centre
pour
l’égaité
des
chances,
CIM,
astel.be,
bemobile.be.
  • 16. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A SHIFT
TO
POSTPAID
&
REDUCTION
OF
CHURN:
INCREASE
TOP
AND
BOTTOM
LINE HIGH
%
OF
PREPAID
WITH
LOW
ARPU EBITDA
margin
vs
churn
rate
‐
2010 50% Postpaid
vs
prepaid
Users ARPU
2010
€/month 40% EBITDA
margin 20% 30% 80% 20% 10% Blended
churn
rate: Postpaid
churn
rate: 00% 36% 0% 10% 20% 30% 40% 50% 60% 70% 64% KPN
Belgium
Yearly
revenue
relation
to
%
of
prepaid 1.5b€ 1b€ Revenue 43% 57% 0.5b€ 0
€ 13
€ 25
€ 38
€ 50
€ Prepaid
revenue
 
Postpaid
revenue Total 0b€ Postpaid ARPU Postpaid 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Prepaid ARPU Prepaid %
of
prepaid 16Source
:
Team
analysis,
Informa
Group,
Corporate
annual
reports,
Nokia
Siemens
Networks,
Company
websites.
  • 17. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A SHIFT
TO
POSTPAID
&
REDUCTION
OF
CHURN:
DEVELOPMENT
OF
HOTSPOT
+
3G peak
time
usage
of
actual
3G
network
in
urban
areas Mobile
broadband
cost
per
Bit
as
%
of
EDGE 100% 100% 100% 75% 75% 50% 50% 25% 20% 25% 15% 10% 6% 5% Network
u]lisa]on
in
peak
]me Limit
of
technology
(Noise
issue) 0% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% EDGE WCDMA
(3G) HSDPA
(3,5G) HSPA+ WIFI
(Current) LTE
(4G) • Leasing
:
2000€
monthly
for
tower
+
150€
for
backhaul • CAPEX
:
50‐100€
per
Wi‐Fi
access
point WIFI
 3G
TOWER • Large
reach
(Few
kilometers
depending
on
spectrum
used) • Small
reach
(Max
100
meters) (HOTSPOT) • Low
speed
(Up
to
21,6
Mbytes
if
in
reach
of
3
sectors) • Fast
speed
(Up
to
100Mbytes
if
connected
to
FTTH) LOW
DENSITY
OF
POPULATION
&
LOW
TRAFFIC HIGH
DENSITY
OF
POPULATION
OR
HIGH
TRAFFIC Con]nue
improvement
of
3G
network
coverage
 (leverage
current
partnership
with
Mobistar) 17Source
:
Team
analysis,
Morgan
stanley
research,
AT&T
  • 18. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A SHIFT
TO
POSTPAID
&
REDUCTION
OF
CHURN ACTION MODEL More
post‐paid
offers CAGR 2012‐2016 • Bigger
price
range
for
postpaid
offers 230M€ 13,9% Joint
Smartphone
sales 181M€ • Subven]on
of
150€/smartphone
to
 1
€ all
postpaid
clients 132M€ 32,3% Call
to
shik 83M€ • Train
vendors
to
propose
postpaid 3,7% • Call
center
to
propose
1/year
an
 34M€ alrac]ve
shiu Wifi
hotspot
in
traffic
zone ‐15M€ • Wifi
coverage
of
all
traffic
points 2011 2012 2013 2014 2015 2016 • 2400
antennas
in
3
years Profit Revenue Cost Bull Bear RISK
FACTOR NPV
(5
years
)
 • Wifi
deployment
may
take
more
]me. • Effec]veness
of
joint
sales
depends
on
other
MNO. • Segment
only
interested
in
prepaid Probability Fit
factor 
207.837
k€
 18Source
:
Team
analysis,
Annual
report,
Press
review,
Morgan
Stanley
Research,
IBPT,
Cisco.

  • 19. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MULTIPLAY:
226M€
OPPORTUNITY MARKET
SUCCESS KPN
CAPABILITIES Exploding
Multiplay
Market
(HH)
 4,000k
HH KPN
royal +400k/year 3,000k
HH • Leader
in
all
four
markets
and
mul]play
in
NL
 • Proven
success
in
IPTV 2,000k
HH 1,000k
HH 0k
HH 2009 2010 2011 2012 2013 2014 Become
a major
player
 71%
of
HH
will
have
a
mul]play
package
by
2014 in
the
 muldplay Mobistar
‐
Number
of
Residential
fix
clients 
market 60,000 +45% 45,000 30,000 15,000 0 2009 2010 Fixed
broadband
+
voice Starpack 19Source
:
Team
analysis,
Mobistar
presenta]on
to
analysts
2010,
Informa
Group,
BCG.
  • 20. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A MULTIPLAY:
226M€
OPPORTUNITY ACTION MODEL Cover
all
muldplay
segments CAGR 2012‐2016 270M€ • Add
a
TV
offer
to
launch
TV
 mul]play
ranges
(71%
of
market) • Fast
follow
Mobistar’s
4‐play
 35,6% 202M€ offer 133M€ 55,4% 24,7% Launch
of
a
markedng
campaign
to
raise
awareness 65M€ • 5M€
first
year
then
2,5M€ • Focus
on
3‐play
and
4‐play • Mass
media
(TV,
Billboards,
Press) ‐4M€ • POS 2011 2012 2013 2014 2015 2016 • Direct
marke]ng
(KPN
user
calls) Profit Revenue Cost Bull Bear RISK
FACTOR NPV
(5
years
)
 • Increased
compe]]on
in
mul]play • Late
entrance • 5
years
of
high
growth
(leads
to
satura]on) Probability Fit
factor 
226.405
k€ 20Source
:
Team
analysis,
Telenet
presenta]on
to
analysts
2008‐2010,
Mobistar
website,
The
Economist
Business
intelligence
operators
annual
reports,
IBPT,
Morgan
Stanley.
  • 21. STRATEGIC
OPPORTUNITIES { ‣ CURRENT
REVENUE
STREAMS ‣NEW
REVENUE
STREAMS
  • 22. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A VALUE
CHAIN Financial
Services:
26.600M€ Hardware Network Content 6b€ 6b€ 6b€ 4.8b€ 4.8b€ 4.8b€Market
Size 3.6b€ 3.6b€ 3.6b€ 2.4b€ 2.4b€ 2.4b€ 1.2b€ 1.2b€ 1.2b€ 0b€ 0b€ 0b€ IT
Services Hardware PC Wireless Wireline TV Multiplay Software Gambling Music/VideoVideo
GamesShare 18% 13% 5% 27% 11% 7,5% 2,8% 10% 7,4% 1,9% 1,1% • High
value
markets. • High
value
in
the
souware
and
gambling
 • Decreasing
ARPUs
over
]me. • Coupled
offers
have
been
legalized
and
start
 market.Industry
Trends • Mobile
market
is
saturated
(121%
 coming
to
the
market. • Other
content
markets
are
very
small. penetra]on). • Low
PC
penetra]on
53,5%

(vs
75%
for
EU)
 • Belgacom
is
making
a
move
towards
video
 • Government
conflict
of
interest
due
to
 expected
to
rise
to
71,2
by
2014. games. 53,3%
stake
in
Belgacom. • 0,7%
of
GDP
spend
on
hardware. • There
is
a
growing
need
for
content
on
 • Convergence
strategy. • Hardware
private
labels
are
rising
(eg:medion). demand. 22Source:
Team
analysis,
Economist
Intelligence
Unit,
IBPT,
Informa
Group,
GfK/BEA,
Sta]s]que
du
système
financier
Belge,
Press
review.
  • 23. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A HARDWARE
PRIVATE
LABEL
16M€
OPPORTUNITY ACTION MODEL 15,000€K ZTE
as
partner CAGR 2012‐2016 • 79€
for
a
classic
phone
(17%
discount) • 149€
for
a
smartphone
(40%
discount) 7,9% 11,250€K • Will
drive
addi]onal
traffic
to
store
 due
to
exclusivity
effect 7,500€K 7,9% Image
:
ZTE
for
Movistar
La]n
America 7,9% 3,750€K Retail
private
label
margin
advantage 0€K Brand 90
% 10
% 2011 2012 2013 2014 2015 2016 Private
Label 70
% 30
% EBIT Revenues Costs EBIT
‐
Bull EBIT
‐
Bear RISK
FACTOR NPV
(5
years
)
 • Low
profit. • Time
consuming
partnership. • New
market. Probability Fit
factor 16.572k€ 23Source
:
Team
analysis,
Morgan
Stanley
2009,
McKinsey
handset
market
research
2009,
Gy
retail
and
technology

Benelux
2009,
BCG
Private
label
cost
advantage,
Informa
Group,
cellulartec.com,
ZTE
website.
  • 24. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A UNLEASH
THE
PING‐PING
15M€
POTENTIAL ACTION MODEL 12,000€K Enter
the
NFC
payment
market CAGR 2012‐2016 • Consumer
use
of
cash
is
 predicted
to
decrease 42% 9,000€K • First
step
in
the
26,6
billion
 43,7% financial
services
market 6,000€K Seal
a
fair
deal
with
other
operators • 33%
of
revenues
for
each • Shared
ownership
of
Tunz/Ping‐ping 3,000€K Launch
of
a
markedng
campaign
to
raise
awareness 31,7% • 300k€
total
investment
by
all
3
operators 0€K • Internet
adver]sing
(websites,
social
networks) 2011 2012 2013 2014 2015 2016 • POS EBIT Revenues Costs RISK
FACTOR NPV
(5
years
)
 • Deal
between
telecom
operators
is
s]ll
unclear. • Proton
rela]ve
failure
(‐14%)
last
year. • New
market. Probability Fit
factor 15.336k€ 24Source
:
Team
analysis,
Company
website,
Gartner
2010,
Eurostat.

  • 25. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A LAUNCH
OF
A
KPN
APP‐STORE
WITH
GAMBLING
AS
23M€
CASH
COW ACTION MODEL Launch
of
a
kpn
app‐store 15,000€K CAGR 2012‐2016 • Launch
of
exclusive
apps
with
gambling
as
flagship • Partnerships
with
other
app‐stores
(ovi,
android...) 39,1% 11,250€K • Low
cost
adver]sing
campaign
(SMS),
POS 45,2% Gambling
app
in
partnership
with
Loterie
nadonale 7,500€K • Apps
based
on
Loterie
Na]onale
games • Gamble
by
SMS • Directly
charged
on
phone
bill 3,750€K Low
costs
markedng
campaign 0% 0€K • SMS 2011 2012 2013 2014 2015 2016 • POS • Base/partners
website EBIT Revenues Costs EBIT
Bull EBIT
Bear RISK
FACTOR NPV
(5
years
)
 • New
market. • Slower
adop]on
of
e‐gambling. • Gambling
brand
damage. Probability Fit
factor 22.979k€ 25Source
:
Team
analysis,
Lolerie
na]onale
annual
report
2009,
Lolerie
Na]onale
website,
Juniper
reseach.
  • 26. FINAL
STRATEGY
  • 27. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A FINAL
STRATEGY
ASSESSMENT STRATEGY
ASSESSMENT
MATRIX RANKING Increased
value
at
stake Shik
to
postpaid #1 5 Shik
to
postpaid MVNO Probability Muldplay #2 4 Muldplay MVNO #3 Ping‐ping #4 3 App
store/Gambling Ping‐ping App‐store/Gambling #5 2 Hardware
PL #6 Hardware
PL 1 1 2 3 4 5 +
invest
in
4G Fit 27Source
:
Team
analysis.
  • 28. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&A FINAL
STRATEGY:
KPN
EBIT
WATERFALL 400M€ 82,5 370,4 79,2 316,4 300M€ ‐0,8 ‐0,2 85,7 260,4 ‐27,6 2009
EBIT
level ‐0,7 ‐7,0 ‐15,5 ‐109,9 204,9 200M€ 142,4 175,2 ‐
0,8 ‐
0,3 171,5 ‐0,8 ‐
28,7 ‐2,1 ‐19,6 ‐35,7 100M€ ‐43,8 ‐116,9 0M€ 2011 2012 2013 2014 2015 2016 Region
1 End
of
year
EBIT y/y
organic
change
in
EBIT y/y
addi]onal
regula]on
cost y/y
addi]onal
cost
of
projects y/y
addi]onal
revenue
of
projects Un]tled
1 28Source
:
Team
analysis.
  • 29. MARKET KPN
ISSUES OPPORTUNITIES FINAL
STRATEGY Q&AWRAP‐UP Shik
to
postpaid Net
5
year
NPV • • Muldplay • Terminadon
rates 280M€
 • MVNO • 4th
entrant • Ping‐ping • Data
overload • App‐store/Gambling • 4G 29
  • 30. CÉLINE
ABI
ABDALLAH
‐
PABLO
CASTIEL
GAZIER
‐
EUGÉNIE
VERHASSELT
‐
JEAN‐CHARLES
VANDERLINDENSTRATEGY
SEMINARKPN
GROUP
BELGIUM
‐
SETTING
THE
GROUNDS
FOR
FUTURE
GROWTH 30