Telecom strategy review 2015: Europe (part 1)

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Vodafone, Deustche Telecom, Telefonica and other leading European telecommunication companies.

1st part of global telecoms strategy review. Total companies to be reviewed is about 16-18. We looked through their reports, interviews and made our own view on their strategy.

Feel free to contact us with your commentary or if you've found any mistakes.

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Telecom strategy review 2015: Europe (part 1)

  1. 1. Telecom Strategy overlook 2015 Europe: Part 1 TMT Venture research@tmtventure.com
  2. 2.  About  Vodafone  Deutsche Telecom  Telefónica  Contacts Quick look at telecom strategy from market leaders by TMTVenture.com It’s our first market research of global telecom strategy 2015 presentation cycle. We would like to cover all regions and it would be about 18 companies reviews. It consist of companies overview with key stats and cover main topics of companies strategy. We use companies annual reports, market reports and other internet trusted sources. This report start our European market overview. Vodafone, Deutsche Telecom and Telefónica are our first reviewed companies. Best regards, Ivan Zakharov Expert at TMTVenture.com
  3. 3. Vodafone Group plc is a British multinational telecommunications company and the second largest mobile operating group in the world in terms of subscriptions.  HQ: London, Great Britain  Subscribers: 495M (+5%)  Revenue: $64.6B (+11%)  EBITDA: $18.2B (+8%)  CAPEX: $14.3B (+46%)  Employees: 90 000 Vodafone in 26 countries Mobile services (446M sub.) Landline (28M sub.) Broadband (12M sub.) PayTV (9M sub.) Revenue 2014 split by key markets, % 27% 20% 14% 12% 13% 14% Germany UK Italy Spain Vodacom (Africa) India
  4. 4. CAPEX and M&AGeography Highlights Consumer Enterprise Services  Become a data company  Deeper and stronger presence in existing markets  Unified Communications – bundle of mobile and fixed line services  Enterprise expansion - M2M and cloud solutions  Continue to leverage group synergies  Active M&A and Infrastructure investments  Deeper and stronger presence in existing markets (Europe, Africa, India)  Best mobile voice and data (coverage and quality) – 4G/HSPA+  Worry-free usage through Vodafone Red - globally branded pricing plan  Focus is on next-generation networks (fibre or cable)  Upgrade retail presence, modern shops focused on service as well as sales  Strategy and investment is focused on three high-growth product areas:  unified communications  cloud and hosting and  machine-to-machine (M2M)  Become world leader in M2M (22m sim)  Develop Connectivity and leadership in “Connected Car” services provider  Development of Vodafone Global Enterprise  Spread across a globe M-pesa service (20m users) which now is growing fast in India and Africa  Development of content services to stimulate 4G data plans  Bundle content packages with 4G plans  True triple play – broadband, TV, telephone  Launch or buy own TV channel (Sky)  Company is going to expand their services on emerging markets:  India,  Ukraine,  Turkey,  Africa  Increase Europe-based assets profitability  Left several markets: Australia, USA  Double new sites(2G/3G/4G) construction (Project Spring)  M&A activity:  Sell “non-core markets” assets  Buy fixed line operators  Buy enterprise operators  Buy M2M and FinTech providers
  5. 5. Deutsche Telekom AG is a Germany-based company engaged in the telecommunications services and information technology sectors. Mostly known by T-mobile brand.  HQ: Bonn, Germany  Subscribers: 202M (+4%)  Revenue: $70.9B (+4%)  EBITDA: $19.9B (+1%)  CAPEX: $13.3B (+6%)  Employees: 230 000 Deutsche Telekom in 26 countries Mobile services (151M sub.) Landline (30M sub.) Broadband (17M sub.) PayTV (6M sub.) 35% 36% 19% 10% Germany USA Europe Other Revenue 2014 split by key markets, %
  6. 6. CAPEX and M&AGeography Highlights Consumer Enterprise Services  Leading European Telco  Integrated IP networks - develop pan- European operator  Best customer experience – coverage and service quality  First truly converged market offer  Partnership with OTT players rather than competing with them  TV across all screens in Europe  M2M and new technologies leader  Best mobile voice and data (coverage and quality) – 4G/HSPA+  Fully converged bundled tariff plans with most popular OTT services  Focus is on fibre and cable networks  Best customer experience via checking 3rd parties ratings  Customer self service capabilities in one App  Un-carrier strategy for US market  One-stop shop for business with bundled tariffs and partner’s services  Integration of OTT services like: Salesforce, SAP, Cisco  Integration of GTS  Best M2M international coverage and leadership in M2M Car connectivity  Cloud VPN solutions  Specialized healthcare and smart metering solutions  Partnership with security, productivity, personal, entertainment OTT services providers  Bundle content packages with 4G plans  Spread across entire market presence of TV services on both IPTV and Mobile TV with multiscreen experience  Launch own TV channels in several regions  My wallet solution based on NFC  Company is going to expand their services on European market:  Germany  Austria,  Netherlands  Company is planning to stabilize Germany assets profitability  Left several markets: USA (possible JV), UK  Double new sites (4G/5G) construction  Migrate entire fixed network to the Internet protocol (IP) for all customers  M&A activity:  Sell US&UK assets  Active M&A in Austria and Netherlands  No major acquisitions outside Company’s footprint  Minor technology M&A
  7. 7. Telefonica, S.A. is an integrated and diversified telecommunications group operating in Europe and Latin America. Brands: Telefónica, O2, Vivo, Movistar.  HQ: Madrid, Spain  Subscribers: 341M (+6%)  Revenue: $57.0B (-12%)  EBITDA: $65.4B (+10%)  CAPEX: $10.6B (+17%)  Employees: 120 000 Telefónica in 21 countries Mobile services (278M sub.) Landline (39M sub.) Broadband (21M sub.) PayTV (7M sub.) 24% 22% 26% 14% 11% 3% Spain Brazil HispanoAmerica UK Germany Other Revenue 2014 split by key markets, %
  8. 8. CAPEX and M&AGeography Highlights Consumer Enterprise Services  Become a Digital Telco:  Bundled Mobile services  Away from selling minutes to selling Gigabytes  Cloud services for B2C and B2B  Development of Enterprise BU  Active M&A and Infrastructure investments  Increasing efficiency through simplification and cost-cutting  Provide new more data-related and bundled plans  Develop 3G and 4G coverage, especially advanced MIMO and VoLTE  Growth average revenue per access by B2C connectivity and broadband services  Increase the penetration of smartphones by lowering entry price points and seizing upon the prepaid smartphone opportunity  Move M2M/Cloud/Security to enterprise business unit to strengthen it  Develop M2M Alliance with several operators to provide global M2M coverage using jasper over-the-Air technology  Provide API based enterprise solutions for ecommerce  Partnerships with B2B solutions providers  Further development of Telefonica Digital – new business unit. Now on global level  Development of new services in Digital Health, FinTech, mAds and etc.  Development of content services to stimulate 4G data plans, like Movistar Video  Use of BigData inside of the company to provide more personalized services  Simplification of corporate functions from a regional to global model and adapting the structure to the new operating model  Concentration on 3 key markets (Spain, Brazil and Germany) to keep it share in total revenue at level of 66%  Cooperation on Chinese market  Keep CAPEX expenditures on rate 17% of revenue for next 2 years  M&A consolidation on Brazil and German markets to create a synergy  M&A activity:  Sell UK assets  Buy new European assets  OTT and venture investments in following to Digital strategy
  9. 9. TMT Venture research@tmtventure.com Subscribe to our weekly reports at TMTVenture.com  TMT Venture is an educational project launched to get deeper insight in TMT and Venture markets  We make researches in TMT industry  We help startups: define strategy, make financial model, investment presentation, valuation, express startup screening and our experts fund raising support  We help venture investors with: startup and market analysis, knowledge base, searching new startups, due diligence

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