7.Taiwan 21-11-06 v1g - Public Television Service 21-11-06... · Acquired through an Asia based MBO...
Transcript of 7.Taiwan 21-11-06 v1g - Public Television Service 21-11-06... · Acquired through an Asia based MBO...
Property of on. Duplication
prohibited without written consent
1
From the Perspective of the Corporate Consultancy
Broadcast Transmission:
Presented By: Hugh Brammar Director of Business Development
Property of on. Duplication
prohibited without written consent
2
The next 20 minutesThe next 20 minutes
Introduction to The Modern Dilemma Revisiting the Broadcast
Value ChainOptions for reducing risk -
focus on the core business
Property of on. Duplication
prohibited without written consent
4
Formerly part of NTL, at the time the world’s largest Transmission Services providerAcquired through an Asia based MBO in 2004Builders of the world’s first Mobile DTT networkAdvanced propagation and coverage planning24/7 operations & maintenance services to broadcasters in AsiaIndependent consultants on Transmission & Digital Migration to Governments and broadcasters in 11 Asian territories
Property of on. Duplication
prohibited without written consent
5
RECENT CONSULTANCIES:
Coverage Planning for IPTV network (Malaysia)State broadcaster digitization (Malaysia)DVB-H implementation (Malaysia)DAB (Hongkong)UNOPSDTT Coverage Planning (Brunei)DTT Implementation (Singapore)2 x Network Performance Assessment & due diligence (Indonesia)Coverage Survey (Thailand)First DTT Transmission in Thailand
Property of on. Duplication
prohibited without written consent
6
A DilemmaA Dilemma
Imperative for new services (revenue streams)
Equal imperative to control costs Focus on core business essential Something has to give! Increased use of Outsourcing Can be rough road if not
correctly advised & implemented
Property of on. Duplication
prohibited without written consent
7
Core Competencies of a Core Competencies of a businessbusiness
Its where the business adds value with its own, inherent ‘know how’
Example: An Airline, its about selling tickets and providing customer service
… NOT in owning and maintaining aircraft
For a bank, its about making money on money, interaction with the customers, finding new business
… NOT in owning and maintaining all its IT systems
For a Hotel, its about selling its rooms; making its guests happy, providing an excellent service experience
… NOT in owning and maintaining the buildings
Property of on. Duplication
prohibited without written consent
8
The Broadcast Value ChainThe Broadcast Value Chain
Property of on. Duplication
prohibited without written consent
9
Infrastructure fundamentalsInfrastructure fundamentalsStrategy Strategy
Long-term assets – deserve a long term strategy, not a ‘Band-aid to survive’ approach.
Develop the business on the Network for the long term, not just survival or the quick turnaround for ill thought out rapid implementation of new services.
Network operators need to be industry leaders in technology and regulatory advancement.
Financial optimisation of Networks can add substantial value to investors, governments and industry
Property of on. Duplication
prohibited without written consent
10
Objectives of focus on coreObjectives of focus on core
Efficient use of capital through:
Allowing broadcaster capital to be deployed to programming or core other uses
Only investing in the parts that are unique to you for the digitisation of transmission equipment
Reduce costs through performance-based contracts and outsourced field force
Reduced cost of capital via innovative financing sources and structures
Property of on. Duplication
prohibited without written consent
11
Times are a changing!Times are a changing!
Many regional Broadcasters are vertically integrated
‘New’ services provide pressure towards consolidation of infrastructure
New opportunity and impetus to focus on core competencies
Property of on. Duplication
prohibited without written consent
12
The problem is ..The problem is .. Many Asian broadcasters view infrastructure
as integral and core. Often Governments are a major stake holder
without deriving any benefit beyond control. Other Broadcasters have no title to the
infrastructure they operate on but retain the risk and cost of support.
Current network owners reluctant to part company with network infrastructure.
So, ‘Vertical Integration’ still rules
Property of on. Duplication
prohibited without written consent
13
The IT industry exampleThe IT industry example Back in the 1980’s, companies dependent on information
technology found themselves facing a serious challenge
Technology was changing so rapidly that the costs and risks
of staying ahead of the curve were skyrocketing
Then came the revelation: In order to benefit from advanced
technology…
A business doesn’t need to manage it
They only need to use it
Property of on. Duplication
prohibited without written consent
14
The The ‘‘DavidDavid’’ solutionsolution Remove the parts that aren’t
‘David’
BUT they still need to be done !
Property of on. Duplication
prohibited without written consent
15
How to benefit from risk How to benefit from risk mitigationmitigation
Understand the Business Case for Outsourcing Non-Core functions…
Identify the expected benefits of outsourcing network operations & maintenance on…
Operating Costs
Network Efficiency
Network Performance
Infrastructure Flexibility
Selecting an appropriate outsource partner to support core business functions
Setting appropriate SLAs* for outsourced network operations and maintenance
*SLA = Service Level Agreement
P2
Property of on. Duplication
prohibited without written consent
16
OptionsOptions
A Broadcaster looking to outsource has, essentially, 2 options:
Acquisition Contracted outsourced support
Property of on. Duplication
prohibited without written consent
17
What have others done?What have others done?
The UK allowed 3rd parties to acquire the entire transmission infrastructure.
Australia has partially followed suit
Malaysia has a hybrid outsourced access & services model
Property of on. Duplication
prohibited without written consent
18
Acquisition?Acquisition?
NTL Broadcast’s first quarter results (2002) from continuing operations included revenues of £49 million ($70m) and EBITDA of £25 million ($36m)
That is an operating profit of 51%Source: NTL Incorporated published results for three months ended 31 March 2002
http://media.corporate-ir.net/media_files/irol/13/135485/quarterly/2002-1.pdf
P9
投影片 18
P9 This still seems harsh ....they will hit the roof ... But I like it ..... We just need to be ready for retaliation I guess, and we probably have more to fear ?
Maybe just say 'A leading Broadcast infra outsourcer in the UK' rather than NTL, but leave the source info on the bottom. ?Patrick, 2006/11/16
Property of on. Duplication
prohibited without written consent
19
Outsourcing meansOutsourcing means……
Retention of asset Same access to knowledge as
with acquisition Access to investment for new
services Guaranteed service levels One stop shop Controllable supplier margins
Property of on. Duplication
prohibited without written consent
20
If a business can do it all now, why change anything?
Improved control, management &
commercial alignment Meaningful metrics
Reports aligned with business interests
Ability to influence and control
Avoidance of micro management
Predictable costs Fixed monthly fees for fixed coverage and availability..
Guaranteed
Better service and/or reduced cost Economies of scale and scope
Increased focus on core activities
Property of on. Duplication
prohibited without written consent
21
BUT!!!!BUT!!!! Outsourcing or, worse, divestment of such an important link in the chain to
your customer (the viewer) is a huge step.
There are significant HR issues in running networks more efficiently.
It requires a tidal change in approach to the business and it is being driven by Digital services.
There are examples elsewhere where the profits generated by the new network owners are, in our view, ‘extraordinary’.
It is very easy to end up with an infrastructure monopoly.
Asia IS NOT Europe or Australia, politics, mindsets and business customs are often very different and every Asian territory is unique.
What works in the ‘West’ does not necessarily work in Asian territories.
Legal and regulatory frameworks in Asia are diverse and very different from those in Europe, US or Australia.
P3
Property of on. Duplication
prohibited without written consent
22
Facts about Facts about ‘‘NewNew’’ servicesservices Most technical arguments for new
generation services are settled…this is now a commercial decision.
Be at the leading edge by all means, but avoid the ‘bleeding’ edge!
New technologies are a driving force towards infrastructure consolidation
Individual vertically integrated service providers are struggling to justify unilateral new service provision
There must be a way to launch new services whilst reducing traditional areas of risk and unpredictability.
Property of on. Duplication
prohibited without written consent
23
The Tools are thereThe Tools are there……
All the tools needed to predict coverage before buying hardware now exist and are readily available
Independent consultants are now experienced and available to support migration, development and avoidance of exploitation
The real decision making power is, therefore, firmly in the hands of the commercial minds
Property of on. Duplication
prohibited without written consent
24 DTT and Managed DTT and Managed InfrastructureInfrastructure
In an analogue world the Broadcaster could be ‘vertically integrated’
In a Digital world the broadcaster cannot be vertically integrated and still expect the business case to work.
Technical MUX management and common standards are areas that should (and do in successful Digital markets) sit within the remit of the Infrastructure Manager.
Property of on. Duplication
prohibited without written consent
25
New Services New Services -- Broadcast or Broadcast or Telephony?Telephony? TV consumer tolerance of lost
connections/service is lower than that of mobile telephony consumers
Delivery will probably be via a hybrid network of both cellular and broadcast sites
This requires a specific operational approach with a focus on reliable long-form content delivery
P8
投影片 25
P8 Maybe more explicit here ... 'In some markets, Telco is dominant' somewhere. This slide makes sense to us but maybe not to othersPatrick, 2006/11/16
Property of on. Duplication
prohibited without written consent
26
Outsourcing StrategyOutsourcing StrategyConstruct the Outsourcing Agreement to build a successful
relationship by….
Seeking advice
Acquisition is NOT the only option
Structuring the deal for flexibility and change
Developing baselines
Setting objectives and negotiating the agreement terms (SLAs)
Defining the services and getting what you pay for
Allocating risk and reward
Avoiding disputes
Managing re-tendering and exit
Property of on. Duplication
prohibited without written consent
27
Summary Summary –– the potentialthe potential Cost savings to broadcasters arising from consolidation of
common functions, which are generally not their core business (i.e. Transmission, Distribution and even Play-out)
Reduced network overheads leading to more profit/reinvestment in programming (core business)
Contractually guaranteed ‘up time’ of all parts of the network
An opportunity to make operations more efficient
Risk mitigation for new service roll-out
One-stop-shop for the entire network
Reduced learning curve for digital technology
Property of on. Duplication
prohibited without written consent
28
Summary Summary –– the riskthe risk Loss of local style of management as huge multinationals take
operational control of networks through acquisition.
‘Extraordinary’ margins enjoyed by some operators may also be expected in Asia
Multinationals’ wider relationships with suppliers may influence decisions pertaining to local contracts
Consolidation needs to be protected from monopolisation to prevent punitive pricing
Long term contractual conditions may look attractive at day one –but will you feel that way in 5 or 10 years in?
Regulation must be tailored to protect the Broadcaster as well as the operator (e.g. caps on annual service charge increases)
Property of on. Duplication
prohibited without written consent
29
When you do outsourceWhen you do outsource……Guiding Principles
Seek experienced advice
Know that any funds invested by the network operator will be recovered with profits.
Win/win collaborative approach throughout the term
Proactive problem solving & joint resolution of issues
Trust will develop through actions
You, the Broadcaster, are the customer Outsourcing (as opposed to acquisition) may be the way to
go in many Asian territories
P10
投影片 29
P10 Maybe add' retainthe control you need' and 'ensure you share in the benefits' could be added. Maybe combine the motherhood n apple pie stuff , confidentiality, trust and proactive ?Patrick, 2006/11/16
Property of on. Duplication
prohibited without written consent
30
Thank You
Malaysia: +(60) 03 2273 3378Singapore: +(65) 6332 6938Thailand: +(66) 2343 1627www.on-ap.com