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
Capital Markets Day 2011<br />Market Area Western Europe<br />Günther Vogelpoel<br />
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 />
VDSL: increased bandwidths to compete with coax
Best deal: low price, high quality</li></ul>Business strengths:<br /><ul><li>High margin operation
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
Strengthen Tele2’s position in the market as the alternative to KPN through the integration of Bbned
Lower costs through standardization and quality improvement</li></ul>Strengthen position & capabilities in SME segment:<br /><ul><li>Standardize portfolio for SME
Increase distribution through indirect channels </li></li></ul><li>Evaluating a move from MVNO to MNO<br /><ul><li>Grow long term cash flows.
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
2x10 MHz reserved in the valuable 800 MHz band for new entrants.
Auction start-price per 2x5MHz 800 license is EUR 35 mn.
Roll out obligation for low frequencies will be stricter than for high frequencies.
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 />
Shifting to Value in Our Customer Base<br />Tele2<br /><ul><li>Customer pays for voice usage.
Price plans include pay-per-minute and flatrates.
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.
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.