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Trends in Asia Pacific’s MVNO market

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ONE DEVELOPMENT´s presentation from Telecoms World Asia 2019, Wholesale track. 27 March in Bangkok, Thailand

Topics:

★ Where are the emerging markets and opportunities?
★ Impact of regulation and market liberalization?
★ How are relationships with network operators evolving in different domestic and sub-regional markets?

Trends in Asia Pacific’s MVNO market

  1. 1. Where are the emerging markets and opportunities? Impact of regulation and market liberalization How are relationships with MNO's evolving in the markets? 26 - 27 March 2019 CEO, ONE DEVELOPMENT www.weconnectthailand.com TRENDS IN ASIA PACIFIC'S MVNO MARKET
  2. 2. 2Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 ONE DEVELOPMENT ● WE CONNECT THAILAND We provide access to a flexible OSS/BSS/VAS platform allowing the MVNOs to launch and control their own service and offers 24/7 PEOPLE IOT MVNO M2M FINTECH A FLEXIBLE TURNKEY SOLUTION THAT SIGNIFICANTLY REDUCES COSTS, LEAD TIME AND COMPLEXITY, ALONG WITH SUPPORT FROM EXPERTS PLATFORM & OPERATIONS AIRTIME DATA / VOICE CONSULTING & SUPPORT We buy and resell nationwide 3G/4G network airtime to the MVNOs, who benefits from economies of scale AIRTIME DATA / VOICE We provide access to a flexible OSS/BSS/VAS platform allowing the MVNOs to launch and control their own service and offers 24/7 PLATFORM & OPERATIONSCONSULTING & SUPPORT We support and consult the MVNOs through all aspects by adding and fully capitalizing on our expertise MNO
  3. 3. 3Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 END OF 2018 • MORE THAN 1300 ACTIVE MVNO‘S IN 79 COUNTRIES The MVNOs represent more than *220 million mobile connections, or approx. 2.46% of the total 8.9 billion mobile connections in the world The number of MVNOs worldwide increased 61% between 2010 and 2018, representing an average annual growth rate of 6% *The number of MVNO connections is estimated to reach 260 million in 2022, and predicted to be worth $84 billion. By 2024 it is anticipated to surpass $120 billion due to IoT/M2M connections. Logos or trademarks shown are for illustration purpose only, and are the property of their respective owners
  4. 4. 4Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 GLOBAL MVNO MARKET SHARES CHANGES FROM 2015 TO 2018 16% 14% 11% 10% 4% 4% 4% 4% 45% 38% 36% 36% 30% 39% 44% 46% 3% 3% 3% 3%2% 3% 3% 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% US LATAM EU APAC ME AF US LATAM EU APAC ME AF US LATAM EU APAC ME AF US LATAM EU APAC ME AF 2015 2016 2017 2018 • The European market (EU) saw its market share lead drop from 45% in 2015, to stand at 36%. • The US witnessed a similar reduction over the same period from 16% to 10%. • In sharp contrast, the Asia Pacific region (APAC) increased from 30% to 46% • Latin America (LATAM), Middle East (ME) and Africa (AF) remained steady at 4% and 3% respectively. MVNO CONNECTIONS ARE GROWING 2.5 TIMES FASTER THAN THE RATE FOR NORMAL MOBILE OPERATORS
  5. 5. 5Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 APAC IS THE WORLD’S FASTEST GROWING MVNO REGION With a predicted compound annual growth rate of over 10% to year 2020, APAC is the world’s fastest growing MVNO region. Governments across the APAC are leveraging MVNO growth to increase competition and enable the digital economy. THE ASIA PACIFIC MVNO MARKET WAS VALUED AT $8 BILLION IN 2017 Sources: GSMA Intelligence | Global Market Insights | Ovum Research | Yozzo.com
  6. 6. 6Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 WHY IS IT HAPPENING NOW ? MOBILE OPERATORS are designed for distribution of mass market telecom services, however In the digital economy this logic shifts from the current supply focus, into a demand driven reality. CONSUMERS in today’s digital economy require personalized, and innovative telecom services, but the mobile operators continue to deliver one-size fits all service and offers. ENTERPRISES are increasingly demanding complete lifecycle services to support their digital business models, only to be met with standard offers of connectivity from the mobile operators. 3G/4G MVNO 5G
  7. 7. 7Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 TELECOMS REVENUES • UP/CROSS-SELL CORE BUSINESS TO GENERATE TELECOMS REVENUES TO UPLIFT / CROSS SELL CORE BUSINESS OTHER NICHES Expat and ethnic segment local and International calls Segments: Rural Thais, tourists, border workers Young, tech-savvy customizing their plans Snail Mobile, upselling its Snail game portfolio Woolworths Mobile Australia, upsell FMCG Customer journey, and service experience SIM for Chinese abroad Free calls to China Mobile Employees and their families as subscribers MVNO 4.0 PENGUIN While many of the early MVNOs focused on providing services similar to traditional mobile operators - but at lower prices, the focus is now more towards bundle offers and niche segmented. Companies with existing customer bases, distribution, or brand value are as MVNOs, up-selling / cross-selling from their existing business line, focusing less on revenue from telecoms services. CHINA MOBILE Full MVNO with a large portfolio of telecom services
  8. 8. 8Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 MOBILE OPERATORS POSITIONING • ONE SIZE FITS ALL = ONE MARKET LOW HIGHPRICING SERVICEOFFERING INNOVATIVE There's is not much difference to spot between the service offers of the traditional mobile operators Traditional Mobile Operators One market One size fits all
  9. 9. 9Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 MVNO POSITIONING VS. MOBILE OPERATORS POSITIONING LOW HIGHPRICING SERVICEOFFERING INNOVATIVE MVNOs today are not just offering the usual data, voice, and SMS - but comes tailored to specific segments. Malaysian MVNO Tune Talk – Get Free Air Asia flights and Free Insurance MVNO Lycamobile: Expats offered voice minutes to home country. Call home. Cubic provides Audi and VW car owners, traveling in, and across EU with a secure and robust in-car high speed connectivity IoT/M2M, Enterprise MVNO’s ”No frills” MVNO’s MVNO’s based on value addition MVNO’s based on convinience Traditional Mobile Operators One market One size fits all Logos or trademarks shown are for illustration purpose only, and are the property of their respective owners
  10. 10. 10Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 EXAMPLE ● VOLKSWAGEN
  11. 11. 11Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 FROM THE OLD MODEL TO THE NEW MODEL Logos or trademarks shown are for illustration purpose only, and are the property of their respective owners
  12. 12. 12Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 STRATEGY • FROM SINGLE BRAND TO MULTI-BRANDS / SEGMENTS OLD MODEL VOLKSWAGEN VOLKSWAGEN GROUP One Brand One Segment One Market Audi Seat Lamborghini Skoda Volkswagen Several brands with specific offers for each market segment NEW MODEL MVNA MVNE OPERATOR One Brand One Segment One Market OLD MODEL NEW MODEL MVNO X MVNO Y MVNO Z Several brands with specific offers for each market segment
  13. 13. 13Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 STRATEGY • FROM SINGLE BRAND TO MULTI-BRANDS / SEGMENTS IIJ CASE • INTERNET INITIATIVE JAPAN (IIJ) CELL© 19 MVNOs CASE • CELL C IN SOUTH AFRICA MVNA MVNE MVNA MVNE 998K MVNO SubscribersDoCoMo MVN-X TELE2 18 MVNOseffortel MVNA MVNE CASE • TELE2 RUSSIA 25 MVNOs MVNA MVNESPRINT USA 14 MVNOs MVNA MVNEDrillisch Germany
  14. 14. 14Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 WHAT’S DRIVING MVNO GROWTH? • WHERE ARE NEW OPPORTUNITIES? STARTUPS FOCUSED ON MOBILE SERVICES ENTERPRISE SEGMENT DIGITAL TRANSFORMATION SMART DEVICE UPTAKE/USAGE EXCESS CAPACITY INCREASED INVESTMENT IN INFRASTRUCTURE INCREASED LOGISTICS, E-COMMERCE AND FINTECH SERVICES TECHNOLOGY EFFICIENCY CLOUD BASED SERVICES MATURING MARKETS MOBILE 1st REGULATORY ENVIRONMENT CHANGE IN CONSUMER PATTERNS ASEAN SPECIALIST MVNE’S IoT / M2M MOBILE OPERATORS
  15. 15. 15Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 INTERNET OF THINGS (IoT) • MACHINE TO MACHINE (M2M) ● Growth due to various National and International programs (Digital Country X, Smart Cities, Smart Villages, UN Climate goals, etc.) ● Increased cross-border trade, new infrastructure, logistics and transportation, smart farming, etc. ● Industry transformation to 4.0 Automotive, Financial, Healthcare, Construction, Travel & Tourism, Energy, Mining, etc.) REGULATORY ENVIRONMENT CHANGE IN CONSUMER PATTERNS ASEAN SPECIALIST MVNE’S IoT / M2M MOBILE OPERATORS The number of licensed cellular IoT connections in China stood at 672 million at the end of 2018, supporting various industrial and smart cities applications. GSMA Intelligence: The Mobile Economy China 2019
  16. 16. 16Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 REGULATORY ENVIRONMENT ● Lower barriers to entry in some markets due to various programs promoting entrepreneurship, SMEs, and startups and prepare them for the 5G era ecosystem. ● Getting un-served segments served I.e. MVNO support programs like in South Korea or the US LifeLine program = Getting everyone onboard. ● Regulators supporting open and healthy competition including mobile number portability (MNP). REGULATORY ENVIRONMENT CHANGE IN CONSUMER PATTERNS ASEAN SPECIALIST MVNE’S IoT / M2M MOBILE OPERATORS Pro: Japan, Singapore, Malaysia. Hong Kong, Australia, China, Korea, Myanmar, Lao PDR. Con: India, Indonesia, Bangladesh, Vietnam, Philippines, Thailand.
  17. 17. 17Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 CHANGE IN CONSUMER PATTERNS ● As markets mature they become highly segmented. Opportunities in niche/segmented markets require unique offerings rather than just competing on price and bundles. ● Higher bandwidth availability and smart handsets/device uptake with consumers seeking matching e-lifestyle services and offers. ● New and changing segments, in an already diverse population, due to urbanization, income gaps, tech skills, social pecking order, new gender definitions, political, etc. REGULATORY ENVIRONMENT CHANGE IN CONSUMER PATTERNS ASEAN SPECIALIST MVNE’S IoT / M2M MOBILE OPERATORS Top-up options available today, along with longer device replacement cycles, limits the customer value, of operators handset subsidies and contract programs
  18. 18. 18Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 ENTRY OF SPECIALIST MVNE’S ● Entry of turnkey MVNE solutions reducing the MVNOs upfront investments, and decreases the time needed to launch and operate. ● Multi-tenant platforms, and bulk purchase, resulting in Economies of scale, and thereby cost savings for the MVNO’s = Higher margins. ● MVNOs getting access to telecom platforms enabling them to launch real-time innovative packages and services to compete in the markets. REGULATORY ENVIRONMENT CHANGE IN CONSUMER PATTERNS ASEAN SPECIALIST MVNE’S IoT / M2M MOBILE OPERATORS Mitigating complexity Many companies, with a strong brand, an existing large customer base or distribution network, are interested in becoming MVNOs, but unfamiliar with telecom technology
  19. 19. 19Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN) ● Increasing demand in business traveling: e-SIM, Dual IMSI and Multi- IMSI, and Increased regional tourism: i.e. MVNO Snail Mobile SIM card. ● MNO’s as MVNO’s to enter other markets via MVNO sub-brands i.e. China Mobile, Telin Telkom Indonesia. ● Open markets, free trade and cross- border co-operation = New markets and lower barriers to entry. REGULATORY ENVIRONMENT CHANGE IN CONSUMER PATTERNS ASEAN SPECIALIST MVNE’S IoT / M2M MOBILE OPERATORS ASEAN Members: Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Combined Population: 651 million
  20. 20. 20Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 MOBILE OPERATORS ● New and increased interest in partnering with MVNOs from the mobile operators, having witnessed case stories from Japan, Malaysia, and more recently in Singapore. ● As markets mature, competition shifts from network quality and coverage, to capitalizing on market differentiation with innovative offers to specific segment needs. ● MVNOs seen as frontline special forces, who use their competitive edge, and own marketing cost to capture mutual market shares. REGULATORY ENVIRONMENT CHANGE IN CONSUMER PATTERNS ASEAN SPECIALIST MVNE’S IoT / M2M MOBILE OPERATORS For BSNL in India, MVNO partners have become a vital part of its wholesale strategy. Same goes for CAT Telecom and TOT in Thailand, after end of their concession deals.
  21. 21. 21Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 THE JAPANESE MVNO MARKET 2018 83 MVNOs 879 “SECONDARY MVNOs” 18.4M MVNO CONNECTIONS 10.6% MARKET SHARE 18 YEARS WITH MVNO POPULATION 127M
  22. 22. 22Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 JAPAN • MVNO MARKET SHARES 2014 TO 2018 6,10% 7,80% 9,40% 10,60 0,00% 2,00% 4,00% 6,00% 8,00% 10,00% 12,00% MARKET SHARE 2014 2015 2016 2017 2018
  23. 23. 23Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 THE CHINESE MVNO MARKET 2018 14 MVNOs 72.7M MVNO CONNECTIONS 4.10% MARKET SHARE 5 YEARS WITH MVNO POPULATION 1.386BN
  24. 24. 24Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 CHINA • MVNO MARKET SHARES 2014 TO 2018 0,16 1,67% 3,50% 4,10% 4,10 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 4,50% MARKET SHARE 2013 2014 2015 2017 20182016
  25. 25. 25Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 THE THAI MVNO MARKET 2018 6 MVNOs 60 MVNO LICENSES ISSUED 350K MVNO CONNECTIONS 0.37% MARKET SHARE 9 YEARS WITH MVNO POPULATION 69M
  26. 26. 26Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 THAILAND • MVNO MARKET SHARES 2009 TO 2018 0,02 0,23 0,57% 0,61% 0,67% 0,16% 0,12% 0,30% 0,37% 0,00% 0,10% 0,20% 0,30% 0,40% 0,50% 0,60% 0,70% 0,80% 2009 MARKET SHARE 2010 2011 2012 2013 2014 2015 2016 2017 2018
  27. 27. 27Trends in Asia Pacific's MVNO market • Allan T. Rasmussen, CEO at ONE DEVELOPMENT | We Connect Thailand • Telecoms World Asia 2019 THAILAND • MVNO MARKET SHARES 2009 TO 2018 0,02 0,23 0,57% 0,61% 0,67% 0,16% 0,12% 0,30% 0,37% 0,00% 0,10% 0,20% 0,30% 0,40% 0,50% 0,60% 0,70% 0,80% Political conflict and Coup d'étatTOTs MVNOs now have more subscribers than TOT Mandatory SIM registration 1 MVNOs on CAT cite unfair competition from CAT’s own retail serviceFive MVNOs launch despite TOT only having 525 2100MHz 3G base stations TOT´s 2100MHz network finally goes nationwide with 10,000 extra base stations TOT picks DTAC to roll out 4G on 2300MHzTOT expands to 1,000 base stations TOT now has 5,320 base stations Phase 2 never starts MVNO Penguin launch MARKET SHARE 60MHz on the 2300Mhz band assigned to TOT for 4G LTE TRUE launches 4G 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
  28. 28. Where are the emerging markets and opportunities? Impact of regulation and market liberalization How are relationships with MNO's evolving in the markets? 26 - 27 March 2019 CEO, ONE DEVELOPMENT www.weconnectthailand.com THANK YOU!

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