CMD2011 - Niklas Sonkin - Market Area Central Europe and Eurasia

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  • In service revenue Tele2 has been no1 since late 2010
  • Objective is to improve Brand considerationTransformation ProgramSummaryNetwork Upgrade and expansion programBilling System UpgradeBroader Product Portfolio A new Brand and Communications Platform focusing on PLP and Quality Perception.A New retail store concept.Rapidly upgrade the new store concept.B2B Channel Devellopment.Target Residential Postpaid customersTarget Smart Device UsersTarget B2B postpaid SegmentNetwork expansion to reduce reliance on National Roaming.Improve price perception with a targeted pricing strategyInvest in Online and Self Care channelsFocus on Internal Systems and Process improvements
  • Upgraded Billing system to support the new Postpaid Data Plans.Upgrade and Expansion of the UMTS Network to support the Smart Phone Devices.Currently the largest and fastest UMTS Network in Croatia.High quality Service together with cheap prices120% Increase in Postpaid sales month on month with the launch of our First Store.10 Stores will be upgraded by Christmas 2011.All 39 stores will be upgraded by the end of 1H 2012.
  • Main characteristicsValuePopulation – 01.09.201016 400 000Total Area (km2)2 724 900Land Area2 699 700Population density (per sq.km)5,71Telephones – Fixed Lines (01.09.2010)3 940 300Telephones – Mobiles (01.09.2010)18 097 100Internet users (2010)5 300 000GSM Operators3UMTS Licenses3
  • CMD2011 - Niklas Sonkin - Market Area Central Europe and Eurasia

    1. 1. Capital Markets Day 2011<br />Market Area Central Europe and Eurasia<br />NiklasSonkin<br />
    2. 2. Market Area Overview<br />Current Focus<br />Stability and improvements in Baltics<br />Growth in revenue, profits and market share in Croatia<br />Establish Tele2 in all regions and continue to grow rapidly in Kazakhstan<br />Explore geographical expansion opportunities in Central Europe and Eurasia<br />July 2011<br />
    3. 3. Baltics<br />
    4. 4. MacroeconomicKPIs<br />GDP<br />Retail Sales<br />CPI Inflation<br />Unemployment<br />Sources: Central Bank of Estonia,SEB Sweden, Central Bureau of StaticticsLatvia,SEBLithuania<br />
    5. 5. Estonia – Market Facts<br />EBITDA Market Share<br />Revenue Market Share<br />Customer Market Share<br />Key topics<br /><ul><li> CEO and management change in 2011
    6. 6. 4G roll-out starts 2012
    7. 7. Technical upgrade (radio, core swap)
    8. 8. Increase of efficiency going forward
    9. 9. Focus on Smartphones and Data
    10. 10. MTR reductions in 2012</li></li></ul><li>Latvia – Market Facts<br />Revenue Market Share<br />EBITDA Market Share<br />Customer Market Share<br />Key topics<br /><ul><li>Auction for LTE frequencies (2012)
    11. 11. Technical upgrade (radio, core swap)
    12. 12. Maintain high efficiency
    13. 13. Focus on Smartphones and Data
    14. 14. MTR reductions in 2012</li></li></ul><li>Lithuania – Market Facts<br />Revenue Market Share<br />EBITDA Market Share<br />Customer Market Share<br />Key topics<br /><ul><li>Maintainmarket leadership position
    15. 15. Increasefocus on B2B segment
    16. 16. Technicalupgrade (radio, coreswap)
    17. 17. Maintain high efficiency
    18. 18. Focus on Smartphones and Data
    19. 19. MTR reductions in 2012</li></li></ul><li>Croatia<br />
    20. 20. MacroeconomicKPIs<br />GDP<br />RetailSales<br />CPI Inflation<br />Unemployment<br />Eurostat,Croatian bureau of statictics<br />
    21. 21. Croatia – Market Facts<br />Revenue Market Share<br />EBITDA Market Share<br />Customer Market Share<br />
    22. 22. Croatia – Market Facts and New Guidence<br />Estimate<br />EBITDA<br />HRK Million<br />Free Cash Flow<br />HRK Million<br />Estimate<br /><ul><li> Tele2 Croatia is cash flow positive (EBITDA-CAPEX-Change in WC) on quarterly basis from now on
    23. 23. The EBITDA margin for Tele2 Croatia’s operation should reach 20 percent by Q3 2013.</li></li></ul><li>OperationalHighlights and Way Forward<br />Way Forward<br />OperationalHighlights<br />Key achievements<br /><ul><li>Continue revenue market share growth
    24. 24. Continue to improve gross margins
    25. 25. Continue to protect the cost leadership and price leadership positions
    26. 26. Q1 2010: Transformation program commenced
    27. 27. Q2 2010: EBITDA break ahead of plan
    28. 28. Q2 2011: New marketing strategy launched
    29. 29. Q3 2011: Free cash flow milestone achieved</li></li></ul><li>Key Achievements<br /><ul><li>The New Brand Platform – </li></ul> I ovce i novce<br /><ul><li>A New Product Plan – HigherValue Smart PhoneUsers
    30. 30. New Store Concept</li></li></ul><li>Summary KPI Performance<br />Source - Hendal Research Croatia<br />Various KPIs have contributed to our revenue market share and EBITDA growth performance<br />
    31. 31. Kazakhstan<br />
    32. 32. Kazakhstan<br />
    33. 33. Macroeconomic KPIs<br />GDP<br />RetailSales<br />CPI Inflation<br />Unemployment<br />Source: IHS Global Insight, Statistic Agency of Kazakhstan<br />
    34. 34. Kazakhstan Mobile Market Overview<br /><ul><li>Strong growth of the mobile market
    35. 35. High transmission prices
    36. 36. UMTS2100 licenses were issued to the existing GSM operators at a price of 25 MEUR each on January 2011
    37. 37. The fixed line market is dominated by Kazakh Telecom with 3.3 million lines
    38. 38. Relatively low MoU (around 100 min.), compared to neighboring countries, suggests there is room for market competition in Kazakhstan</li></li></ul><li>Tele2 Sweden<br />Asianet Holding<br />51%<br />49%<br />Tele2 Kz<br />Tele2 Kazakhstan Company Overview<br />
    39. 39. Realizedsynergies from Tele2 Group:<br /><ul><li> Commercial know-how, Russia’s launch experience
    40. 40. Marketing platform, Russia’s Mafia concept
    41. 41. Roaming
    42. 42. Network architecture and Roll-out
    43. 43. Procurement
    44. 44. HR
    45. 45. IT
    46. 46. Tele2Way and culture</li></ul>Tele2 Kazakhstan<br />
    47. 47. All Regions Launched by Year-End<br />Petropavl<br />Astana<br />Kostanay<br />Pavlodar<br />Oral<br />Aktobe<br />Semey<br />Karagandy<br />Oskemen<br />Almaty<br />Kyzyl-Orda<br />Aktau<br />Taraz<br />Shymkent<br />
    48. 48. Average MTR in Russia and Kazakhstan<br />USD<br /><ul><li>Memorandum between the operators to make 20% MTR reduction as of Jan 1, 2011
    49. 49. TELE2 KZ reduced MTR with Kcell by 20%, from Nov 15, 2010
    50. 50. TELE2 KZ reduced MTR with Beeline by 15%, from Jan 1, 2011
    51. 51. MTRs will be reduced consequently on a yearly basis</li></li></ul><li>Customer Base MOU and ARPU<br />MoU<br />Min<br />ARPU<br />USD<br />Number of subscribers<br />
    52. 52. <ul><li>Tele2 expects its customer base in Kazakhstan to be able to reach the range of 2.3-2.5 million by year-end 2012.
    53. 53. The EBITDA margin for Tele2 Kazakhstan’s operation should reach break-even by 2H 2013.
    54. 54. Tele2 Kazakhstan is targeting a long-term mobile customer market share of 30 percent.
    55. 55. Long term profitability and ROCE are estimated to be in line with Tele2 Group targets.</li></ul>Long Term Guidance<br />

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