4th Annual Capital Link Conference

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Feb 17, 2014 (3 years and 4 months ago)

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New York, 30 October 2000

4th Annual Capital Link Conference

Dimitris Kouvatsos CFO

Trends in European Telecoms

European Market Liberalisation


Current Status


Data and related value added services
liberalised in late 1980’s / early 1990’s


Mobile markets liberalised with the
introduction of digital cellular systems
(GSM / 2G)


Fixed line voice last segment to be liberalised


Driven by EU and national governments


Aiming to improve service supply and
technology deployment


Broader framework for fixed market
liberalisation set by EU directives


Recommended time frame and broad
definitions for national regulatory regime


National regulators responsible for
implementing EU
-
directives


Fully Liberalised

Market

Pre 1998

1998
-
2001

1.1.1998

Post 2001

Tagus

Loire

Danube

Po

Ebe

Orkney

Islands

Hebrides

Shetland

Islands

DENMARK

FINLAND

ALBANIA

CROATIA

ANDORRA

PORTUGAL

SPAIN

FRANCE

IRELAND

KINGDOM

UNITED

SWEDEN

RUSSIA

LATVIA

ESTONIA

LITHUANIA

POLAND

BELARUS

UKRAINE

ROMANIA

MOLDOVA

HUNGARY

BULGARIA

GREECE

TURKEY

MACEDONIA

SERBIA

NORWAY

GERMANY

BELGIUM

NETHERLANDS

AUSTRIA

SLOVENIA

BOSNIA AND

HERZEGOVINA

SWITZ.

CZECH

REPUBLIC

MONACO

SLOVAKIA

ITALY

Tagus

Loire

Danube

Po

Ebe

Tagus

Loire

Danube

Po

Ebe

Orkney

Islands

Hebrides

Shetland

Islands

DENMARK

FINLAND

ALBANIA

CROATIA

ANDORRA

PORTUGAL

SPAIN

FRANCE

IRELAND

KINGDOM

UNITED

SWEDEN

RUSSIA

LATVIA

ESTONIA

LITHUANIA

POLAND

BELARUS

UKRAINE

ROMANIA

MOLDOVA

HUNGARY

BULGARIA

GREECE

TURKEY

FYROM

SERBIA

NORWAY

GERMANY

BELGIUM

NETHERLANDS

AUSTRIA

SLOVENIA

BOSNIA AND

HERZEGOVINA

SWITZ.

CZECH

REPUBLIC

MONACO

SLOVAKIA

ITALY

Overview of the Greek Telecoms Market

Few Barriers Remaining to Full Market
Liberalisation

In the Process


Fixed line market liberalisation (January 2001)


4
-
7 WLL licences (before year
-
end 2000)


New Telecom law
-

draft submitted


NTPC
-

Independent Regulatory Authority


Interconnection Regime for fixed line operators


UMTS licences (Q2 2001)


Local Loop Unbundling


Number portability and carrier pre
-
selection (January 2003)


Equal access


Universal Service Obligation

Future issues

Greek Fixed
-
Line Market Overview

Strong growth potential from higher utilisation and introduction of VAS services

Lines vs. Revenues

GDP / Capita vs. Fixed Line Penetration

EU

AVERAGE

Luxembourg

Sweden

Denmark

Netherlands

France

Germany

Finland

UK

Greece

Belgium

Austria

Spain

Italy

Ireland

Portugal

40

45

50

55

60

65

70

75

0

10,000

20,000

30,000

40,000

GDP per capita (US$)

Fixed line penetration (%)

Source
: IDC

Source: IDC

5,200
5,300
5,400
5,500
5,600
5,700
5,800
5,900
6,000
6,100
6,200
1998
1999
2000
2001
2002
2003
(000s)
2,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
3,000
(US$m)
Total lines
Total fixed revenues
5,200
5,300
5,400
5,500
5,600
5,700
5,800
5,900
6,000
6,100
6,200
1998
1999
2000
2001
2002
2003
(000s)
2,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
3,000
(US$m)
Total lines
Total fixed revenues
Contract Market Share

0%

4Q1999

33.0

22.1

44.9

20%

40%

60%

3Q1998

4Q1998

1Q1999

2Q1999

3Q1999

1Q2000

2Q2000

Panafon

STET

CosmOTE

Greek Mobile Market Overview

Total Market Share

0%

30%

60%

3Q1998

4Q1998

1Q1999

2Q1999

3Q1999

4Q1999

1Q2000

2Q2000

39.4

29.2

31.4

Panafon

STET

CosmOTE

Wireless Penetration
-

1H 2000

0%

10%

20%

30%

40%

50%

60%

70%

80%

72

Finland

63

Norway

60

Italy

53

Spain

52

Portugal

64

Sweden

62

Austria

59

Denmark

52

Switzerland

Belgium

46

Greece

46

France

47

Germany

44

Netherlands

50

UK

49

Ireland

51

First third entrant to capture #2 position

30%
40%
50%
60%
70%
80%
0%
10%
20%
30%
40%
50%
Internet Pentration (%)
Main Line Penetration (%)
Greek Internet Market Overview

Internet vs. Main Line Penetration

European PC Penetration (%)

Greece

Portugal

Spain

Italy

France

Belgium

Austria

Germany

Netherlands

UK

Denmark

Finland

Sweden

54%
47%
37%
33%
32%
32%
30%
29%
28%
20%
20%
18%
7%
0%
10%
20%
30%
40%
50%
60%
Denmark
UK
Sweden
Netherlands
Finland
Germany
Austria
Belgium
Portugal
Spain
France
Italy
Greece
Low PC and Internet penetration
-

High growth potential

OTE Corporate Restructuring

Accelerating Developments


Shareholder and Corporate Issues


Board of Directors expanded to 15 members


CEOs of 3 main subsidiaries


1 additional minority shareholder


Executive Committee established


Internal restructuring


Articles of Association in line with private corporate Law (L2190), as
it stands today


Preparation for liberalisation


New round of tariff rebalancing


New Telecoms Law soon to be approved


Search for a strategic ally


Initial expressions of interest received


Expected close by Q2 2001

Realising Value from Reorganisation


Exit from non
-
core assets


OTE Leasing
(
strategic sale
),

OTE Exchange
(
liquidation
)

and OTE


Insurance
(
strategic

sale
)


Realise value from current asset base


CosmOTE IPO


Formation of OTE International


Formation of Real Estate subsidiary


New initiatives


OTE Global (
international wholesale carrier business
)


OTE
Com

(
dedicated salesforce for packaged corporate solutions
)


CosmoONE (
B2B JV
)


Under development


Digital TV


Strategic review of Directories business

Fixed Line

Fixed Line
-

Preparing for Competition


Greek fixed line market to be liberalised
in January 2001


OTE market share erosion potential
exists


First emerging fixed line competitors
deploying infrastructure


CLECs: COLT, Grapes, SilkRoute


Others: Panafon, STET Hellas,
Public Power Corporation





Fixed wireless access competitors




Continued voice tariff rebalancing


95% network digitalisation


Data/ IP


Hellascom (upgrading/ doubling capacity)


ADSL pilot installation


180,000 FTTC customers by year end


IP network deployment


ATM 40 PoPs available (Frame Relay Option)


Digital TV Platform: Interactive Service/fast internet


20,000 km of fibre already installed with 1 million circuits
to be offered commercially


Innovative service offerings


Strengthening of business customer distribution and
service approach



45% broadband
WLL
coverage of Attica region



(June 2001)

OTE Preparation

Emerging Competition

Mobile

CosmOTE Strategy

IPO allows the market to assess

wireless business and unlock shareholder value

To Become the Leading Wireless Operator in Greece

Strong


brand name/

management
team


Custo
mer
Orient
ed


Pricing


Superio
r
Networ
k



Innovati
ve


services
offering




World
Class


Partner
-
ships





Voice

and
Data
Oppo
rtunit
y



Best

Positioned

for the

Future

Largest spectrum

Synergies with OTE group

Access

for All


SMS

SIM Microbrowser

WAP

Voice Recognition

Top

Content


Open architecture

World
-
class partnerships

Microsoft

Yahoo!

Virgin Megastores


Offering

Tailored

to Customer

Needs

MyCosmos

Personalized

Information & Services

Focus on Wireless Data Opportunity

Internet

Greek Penetration / Number of Users

Greek Internet Access Market Revenues

Source:
IDC

Strong Growth Projections for the
Near Future

Source:
IDC

0

50

100

150

200

250

1998

1999

2000

2001

2002

2003

(

m)

Wholesale

Value
-
Added Services

Business Access

Home Access

Greek e
-
commerce Spending

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1998

1999

2000

2001

2002

2003

2004

2005

(

m)

Business goods and services

Consumer goods and services

Source:
Forrester Research

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1998

1999

2000

2001

2002

2003

0%

5%

10%

15%

20%

25%

30%

35%

Number of users ('000)

Penetration (%)


Strong Internet growth projections
for Greece (2000
-
03 CAGR or 36% in
terms of penetration)

OTEnet Strategy

Leading ISP in Greece


Accelerated corporate activity
from new

management team


Ongoing discussions with content providers for partnerships


Exploring acquisitions (domestic and international)


Review of distribution channels and methods


WAP gateway and content


Headline news, financial news, cinema, hotels, pharmacies etc.


e
-
commerce (platform already available)


Several vertical portals to be launched


Automotive, health, publishing, various online marketplaces etc.


Free e
-
mail, calendar and directory services


LMDS/ ADSL access trials


Unified Messaging

International Investments

OTE Group
-

International Reach

OTE
now
addresses a total
customer base

of
50
m


Telecom Serbia


20%


Population:

10.6m


2.2m lines (34% digital)


105,000 mobile subscribers

RomTelecom


35% (51% voting right)


Population: 22.8 m


3.7m lines (48% digital)


CosmoRom operation end May

Armentel


90%


Population: 3.1 m


547,000 lines (18% digital)


8,000 mobile subscribers

International

Albanian Mobile
Communications


85% (CosmOTE & Telenor)


Population: 3.3m


12,000 subscribers


Integrated approach to international
investments


Formation of
OTE International

to
integrate and manage international
holdings


Appointment of dedicated executives


Intention to integrate networks




MakTel privatisation is
currently in progress


All licenses include fixed
and mobile operations


All international investments
are net income positive

Group Vision and Strategy

Group Vision and Strategy

OTE
-

From
R
egional PTT to Modern Telco


Focus in high growth sectors



Mobile telephony



Data



Internet


Enhance competitive position post
-
liberalisation



Network advantage



Service integration



One
-
stop shopping



Roll
-
out converging technologies and broadband



IP Platform



Broadband access network



UMTS



Create shareholder value


Acquisition


Corporate restructuring


Exploit synergies in international investments

Thank

you