Telco2 Summary Slides Aug07

Slide 1: Towards Sustainable Growth in the Telecoms Value Chain Simon Torrance, CEO, STL Partners simon.torrance@stlpartners.com www.telco2.net + 44 7979 657 682 August 2007

Slide 2: Vertical integration is under attack New Payment Methods More Innovation, choice And cheaper for consumer Independent Retail ? Multi-Network-Capable Phones Alternative service sources New SoftSim Platforms Simple for consumers, but expensive and not innovative Multiple Access Networks © STL Limited • Proprietary and Confidential -2-

Slide 3: Low confidence on how to grow in IP-based world 35% 32% 19% 14% 4% Very Confident Confident Not Sure Unconfident Very Unconfident Source: STL Partners Industry Survey, Dec 2006, Mature Markets only – Japan, South Korea, Australasia, North America, Western Europe, N=335 © STL Limited • Proprietary and Confidential -3-

Slide 4: Don’t Understand Customers’ Needs in Core Voice 60 50 NUMBER OF RESPONDENTS 40 30 20 10 0 Not very well Hardly at all Not sure Quite well Very well Source: STL Partners on-line survey, January-February 2007 © STL Limited • Proprietary and Confidential -4-

Slide 5: Shift in Value of ‘Distribution Systems’ Forecast of the proportion of end-user value* that flows through each major service/content distribution system (* Measured by ‘consumer willingness to pay’ in developed markets, based on STL Partners forecasts) Today 2012 2017 % 80 70 60 50 40 30 20 10 0 Broadband Broadband PSTN and PSTN and Other Broadband PSTN and Other Other Internet Internet SMSC SMSC Internet SMSC Broadband Others PSTN & SMSC NGN Key Internet © STL Limited • Proprietary and Confidential -5-

Slide 6: Business Model Innovation is key Customer Partners Relationships Customer Distribution Value Supply Chain Capabilities Segments Channels Proposition Success or Costs Revenues Failure? © STL Limited • Proprietary and Confidential -6-

Slide 7: Telco 2.0: Catalyst for Innovation & Growth Research Consulting Brainstorms More analysis: www.telco2.net/blog © STL Limited • Proprietary and Confidential -7-