Connectivity RT Presentation

8/13/2019 Connectivity RT Presentation

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22ndto 23rdAugust, 2013

Shangri La Hotel

Singapore

A STRATEGY FOR ASEAN

Organiser Co-Organiser


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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent

Network ASEAN Forum 2013

CONNECTIVITY

22nd - 23rdAugust 2013


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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 3SNG 130822 - Connectivity ro ... on v10

Connectivity contextHighly dynamic ecosystem with

critical role for ASEAN economic development

ASEAN telecommunications markets dominated by mobile - >2/3 of revenue in most

markets except Singapore

Continued strong growth rates beyond mobile penetration rates of 100%, with slight declines

in ARPU

Region characterized by high variance in market structure- by ARPU levels, pre- vs.

postpaid, levels of data usage/smartphone ownership

Competition tends to be highly concentrated around top 3 players (>80% share), still with

strong role of domestic-only telcos with select regional players

Ongoing massive shift to data and 3G on the back of rapidly declining smartphone prices;

emerging markets to date showing better monetization on traffic than developed markets

Fixed connectivity in most markets at low levels of development with


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Agenda

International roaming

OTT in ASEAN

New services - Mobile money/virtual CC; potentialfor mobile advertising

Regulatory maturity in ASEANspectrum,

interconnect, local content requirements


5/17This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 5SNG 130822 - Connectivity ro ... on v10

Roaming charges in ASEAN countries are significantly

higher than in Europe and vary across Telcos

Data charges(per MB)

Voice charges- calls made(per min)

Voice charges- calls

received(per min)

SMS charges

Range

n/a

Note: Charges are for usage within/across ASEAN countries; charges vary based on call or usage destination; charges exclude VAT

Source: Telco websites



ASEAN

APT

APEC

Roaming regulations in ASEAN would need to be

strengthened to reduce charges

EUROPES REGULATION ON ROAMING IS HOLISTIC &

WELL-ENFORCED

INITIATIVES ACROSS ASIA NOT COMMONLY

ENFORCED, THUS LESS IMPACTFUL

Holistic regulatory approach to international data

roaming services

Protect consumer interest

Good compliance in all member states

Ofcom, UK communications regulator, helps enforce

roaming regulation

2009

2011

2007

Roaming III: Caps retail prices for data roaming

- Customers can sign up for a mobile roaming contract withforeign operators while traveling

Public consultation on 2007 regulation; results not

satisfactory

Roaming II: Cut in SMSand wholesaledata

roaming charges

- Cut-off mechanism available once bill reaches50

Roaming I: Cap wholesale & retail charges for voicecalls

Note: ATRC: ASEAN Telecommunication Regulators Council; APT: Asia Pacific Telecommunity; APEC: Asia Pacific Economic Cooperation

Source: Ovum Regulatory Status of International Roaming

Adoption of the Addendum of ATRC*

Intra-ASEAN Mobile Roaming Rates to

reduce roaming charges; countries to

implement when ready

Bilateral initiatives common

- Malaysia & Singapore

- Malaysia & Brunei

- Singapore & Brunei

1

2

3

Addresses transparency measures &

bill shock

Aims to remove regulatory barriers

that cause high input costs for roaming

Issued guidelines on provision of info

to consumerson roaming &

substitute technologies



Agenda


OTT in ASEAN






OTT services in ASEAN markets are growing;

likely a threat to SMS revenue

SMS AS A SOURCE OF REVENUE HAS BEEN

DECLINING LIKELY DUE TO GROWTH IN OTT SERVICES

Many market drivers supporting substitution to OTT

services

Increasing Smartphone penetration

Low pricecompared to regular voice

Ease of access

- Apps and app marketplaces

- Telcos start to bundle VoIP (in particular smaller Telcos infragmented markets)

Technological development

- Improved sound quality on 3G networks

- Deployment of high capacity all-IP networks (e.g. LTE)

- Availability of alternative networks (Wi-Fi)

- Features e.g. video conferencing

Net neutrality regulation undermine attempts to block

VoIP in certain markets

Increase in consumer demand as users of dedicated

VoIP expect mVoIP

Note: Non-voice revenue include data, messaging & VAS; does not include all Telcos in each countries

Source: Wireless Intelligence; Gartner; Ovum; Informa



ASEAN players are expanding networks, partnering

with OTT players & pushing apps usage

Focus on network upgrades,innovative pricing and productmix to increase data uptake

OTT threat mgt. primarilythrough partnerships and ownapp stores

Network expansion (3G)

- >50% CAPEX in 2011 allocated for

this

Launched money remittanceservice, tracking &monitoring system etc.

Network expansion (3G)

- Contracted NSN in 2012

Expanding mobile data and

VAS offerings like app store,music, games etc.

INDONESIA SINGAPORE

*Rich Communications Services provide similar r ich-featured messaging standards as OTT apps

Source: Analyst reports; Bain analysis

Expanding its LTE network

Working with alliance partnerVodafone Group on aninteroperable RCS* platform

Expanding VASofferingslikeNFC movie ticketing service, e-bookstore, NFC app etc.

Upgrading its 4G & LTE network

Launched new VAS offeringssuch as several mobile apps,mobile payment service usingNFC, e-book service etc.

MALAYSIA

Focuses on content bundling topromote wireless data services

Offers deals with OTTs such asSkype & Deezer (music streamingservice)


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Agenda


OTT in ASEAN





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A significant portion of the ASEAN population is still not

served by the formal financial sector

Note: Banked population defined as percentage of the population 15 years and older that has a formal relationship with a bank or other financial institution via a current

savings account, checking account, credit card or a combination of these products

Source: Euromonitor

Banked

Unbanked


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Rapid growth in mobile usage presents a unique channel to

reach both banked and unbanked segments

Source: USAID, Sybase, Bain analysis

In contrast [to the banking sector], the

Indonesian telco sector has been extremely

effective in moving down market. Combining

FS expert with the broad market capabilities of the

mobile telco channel presents a unique

oppor tuni ty for govt and commercial entities todevelop new business opportun i t ies

- USAID Report

With the Indonesian population at

approximately 250 million people, these new

mob i le banking services will help us attract new

customers and expand our market share

significantly

- Strategy & Finance DirectorCIMB Niaga

EXAMPLE INDONESIA - MOBILE PENETRATION

OVERTOOK BANKING PENETRATION SINCE

06

PRESENTING AN OPPORTUNITY TO TARGET

BOTH BANKED AND UNBANKED SEGMENTS IN

INNOVATIVE WAYS


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Opportunities in mobile money along three categories of

usage

Transactions Services Mobile Commerce Mobile Banking

Source: Bain analysis

1 2 3

Utility bill payments

Remittances (domestic,

international) Cash-in/cash-out

- Via banks, retailers, agents

- Including government cash

payments

Stored value account

Mobile top-up

Mobile wallet-to-wallet

transfers (P2P)

M-Wallet

Traditional Payments

- E.g., online shopping, online

games, media, virtual products

Mobile consumer services

Mobile shop/portal services

Mobile Banking

Banking inquiries

- E.g., account balances, SMS

alerts

Mobile/online savings

accounts Mobile/online loan

applications and

disbursements

Insurance

- E.g., customer loyalty, mobile

ads, coupons and offers

Mobile marketing services

- New mobile merchant payment

technology (mobile POS, P2P on

the spot, )

Mobile merchant services

- New mobile consumer payment

technology (NFC, QR code, )


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Agenda


OTT in ASEAN

New services - Mobile money/virtual CC; potential

for mobile advertising

Regulatory maturity in ASEANspectrum,interconnect, local content requirements

R l t h ll ASEAN i il ith t ti l


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Regulatory challenges across ASEAN similar with potential

for learning from other marketsselect examples

Spectrum Interconnect Fiber rol lout

Various approaches

to shaping

competition, from

focusing on few key

players to fostering

new entrants

Increasing emphasis

on assigning

common spectrum

blocks across ASEAN

to facilitate

connectivity (e.g.

digital dividend blocks

by 2020)

General trend to

reduce interconnect

charges across

markets, e.g. recent

efforts in Thailand,

which typically enable

more level playing

field for challengers

Few exception like

SMS Interconnect in

Indonesia to reduce

amount of spamming

Loc al content

Emerging trend to

push local economic

participation in

technology sectors

related to telecoms,

with efforts particularly

in Indonesia

Questionable net

benefits as

competition gets

disrupted

Only Singapore and

Malaysia with broad

rollout to date

Key future challenge to

enable broad-based

rollout in other ASEAN

markets, where telco

economics often do

not justify

investments but

significant multiplier

benefits for other

sectors are expected

various forms of

public/privatepartnerships can be

used


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THANK YOU

Organiser Co-Organiser

Connectivity RT Presentation

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Transcript of Connectivity RT Presentation