CMD2011 - Gunther Vogelpoel - Market Area Western Europe

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  • Grow long term NL cash flows:Fixed-Mobile markets converge on the long termMVNO to MNO transition will lead to significant organic revenue growth and grow long term cash flows in the NetherlandsStrong Group experience in Mobile:We are a Group of mobile companies, The opportunity is now:Spectrum value is set to increase with the take-up of mobile data traffic, making spectrum assets attractive investment casesOpportunity to become an MNO is now. The upcoming auction will set the scene till 2030:
  • Newcomer = bidder not owning 900 MHz yet, so non-MNOs reserved spectrum can not be sold to NOs first 5 years Tele2 (and other newcomers) can bid on all spectrum40% of geography in year 5 of the license for 2x10 MHz 800 spectrumAll licenses last till 2030 (17 years), synchronised with 2.6 GHz end-date and 2.100 (to be auctioned 2015)Final debate in Dutch Parliament to increase competition & newcomer reservation on 15th September 2011
  • Mobile home telephony cuts the cord to the incumbent. Customers are for the first time not stuck with incumbent for fixed telephony!
  • CMD2011 - Gunther Vogelpoel - Market Area Western Europe

    1. 1. Capital Markets Day 2011<br />Market Area Western Europe<br />Günther Vogelpoel<br />
    2. 2. Market Area Overview<br />Outlook<br />Netherlands: Grow in mobile and SME, Upcoming license auction<br />Austria: Continue growth in B2B<br />Germany: Develop mobile product<br />
    3. 3. Netherlands<br />
    4. 4. Strong Presence in Fixed Services<br /><ul><li>Strong presence through three segments
    5. 5. Full product portfolio
    6. 6. Own fibre network
    7. 7. Brand value, 15 years of presence
    8. 8. One out of four TV providers
    9. 9. B2B high quality reference list</li></ul>Residential<br />B2B<br />Wholesale<br />Sales: EUR 370mn<br />Sales: EUR 180mn<br />Sales: EUR 70mn<br />
    10. 10. Operational Performance<br />Net SalesSEK Million<br />EBITDASEK Million<br />EBITDA-CAPEXSEK Million<br /><ul><li>Solid financials
    11. 11. Top line under pressure
    12. 12. Integration costs already in 2011</li></li></ul><li>Our Strengths<br />Residential strengths:<br /><ul><li>Maximize value in customer base
    13. 13. Solid position in DSL and growing in Triple Play product
    14. 14. Now on-net and off-net TV
    15. 15. VDSL: increased bandwidths to compete with coax
    16. 16. Best deal: low price, high quality</li></ul>Business strengths:<br /><ul><li>High margin operation
    17. 17. Supports a wide range of businesses and institutions </li></ul> across the country<br /><ul><li>Mission critical services</li></li></ul><li>How?<br />Business Outlook for 2012<br />How?<br />Overall objective B2B market: <br /><ul><li>Topline growth
    18. 18. Strengthen Tele2’s position in the market as the alternative to KPN through the integration of Bbned
    19. 19. Lower costs through standardization and quality improvement</li></ul>Strengthen position & capabilities in SME segment:<br /><ul><li>Standardize portfolio for SME
    20. 20. Increase distribution through indirect channels </li></li></ul><li>Evaluating a move from MVNO to MNO<br /><ul><li>Grow long term cash flows.
    21. 21. Strong Group experience in mobile.
    22. 22. The opportunity in NL is unique and now. The upcoming auction will set the scene till 2030.</li></li></ul><li>Auction Conditions<br /><ul><li>Auction planned for Q1 2012
    23. 23. 2x10 MHz reserved in the valuable 800 MHz band for new entrants.
    24. 24. Auction start-price per 2x5MHz 800 license is EUR 35 mn.
    25. 25. Roll out obligation for low frequencies will be stricter than for high frequencies.
    26. 26. Network sharing is allowed, not frequency sharing.</li></li></ul><li>The Opportunity is Now<br />3. Technology<br />& Business Models<br />1. Government<br />& Regulation<br />2. Market<br />Opportunity<br />Data Uptake<br />From low starting point<br />Spectrum Auction<br />Unique newcomer allocation<br />New Devices <br />& Services<br />All focus on data use<br />Net Neutrality<br />2nd country in the world enforcing net neutrality<br />Low Competition<br />High price/cost incumbents<br />LTE<br />Approaching <br />critical mass<br />3. Technology & business models will change! Tele2 is able to provide (disruptive) high speed data & voice propositions. MNO’s are unwilling to cannibalise on high profit levels .<br />1. Government stimulates competition & newcomers: exclusive 2X10 MHz reservation for ‘newcomers’ (without 900 MHz)!<br />2. Tele2 NL already has strong (fixed) presence, brand, MVNO experience & national fiber network.<br />
    27. 27. Austria<br />
    28. 28. Operational Performance<br />Net SalesSEK Million<br />EBITDASEK Million<br />EBITDA-CAPEXSEK Million<br /><ul><li> Maximize value in residential.
    29. 29. Top line growth in B2B.
    30. 30. Profit contribution solid.</li></li></ul><li>B2B Sales Engine<br /><ul><li>180% increase in B2B sales intake (H1 2011 vs. H1 2010).
    31. 31. EBITDA margin to 21% from 15% (H1 2011 vs. H1 2010).
    32. 32. 31% increase in operational cash flow (Q2 2011 vs. Q2 2010).</li></li></ul><li>Germany<br />
    33. 33. Operational Performance<br />Net SalesSEK Million<br />EBITDASEK Million<br />EBITDA-CAPEXSEK Million<br /><ul><li> Overall decline in top line.
    34. 34. Strong operational performance </li></ul>in sustaining profit levels.<br />
    35. 35. Shifting to Value in Our Customer Base<br />Tele2<br /><ul><li>Customer pays for voice usage.
    36. 36. Price plans include pay-per-minute and flatrates.
    37. 37. TELE2 handles any customer service with respect to voice telephony, invoicing, etc.</li></ul>Current<br />situation<br />TELE2<br />Traffic<br /><ul><li>Customer typically pays EUR 16.07/month for fixed voice access line; can cancel with 6 warning days.
    38. 38. DTAG handles any customer service with respect to the access line, e.g., technical requests.</li></ul>Telekom Deutschland<br />Accessline<br /><ul><li> Overall decline in top line.
    39. 39. Strong operational performance </li></ul>in sustaining profit levels.<br />
    40. 40. Tele2 Germany is Going Mobile<br />Future<br />situation<br />MNO<br />INCUMBENT<br />
    41. 41. <ul><li>Onesingleinvoicefrom Tele2.
    42. 42. Keepsfixlineextensionandtariff.</li></ul>Mobile Home Telephony: Our Value Proposition<br />Convenience<br />Lower fees<br />New handset<br />MNO<br /><ul><li>Subsidized, high quality “DECT look-a-like“ phone.
    43. 43. Savings of more than 2 € every month.</li></li></ul><li>

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