idc gti -program overview oct 2013

8/21/2019 IDC GTI -Program Overview Oct 2013

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IDC Global Telecom Indicators

October 2013

Revenues, Financials & Connections

Global, Regional, Country Level Details

500+ Carriers


2/20

Mar-14 IDC

Revenue, Connections & FinancialIndicators

Global Telecom IndicatorsH1 2013 Results

2

500 Carriers Analyzed in 146 Countries

Source: IDC Global Telecom Indicators, Oct 2013

All publicly traded carriers are included,represents 90%+ of total market

IDC proprietary database of financial and operational statistics for

fixed, mobile and cable TV operators from Jan 2005 to present.

Financials

$960 billion revenues

$152 billion operating income

$311 billion EBITDA

$145 billion capital spending

Connections(end of Jun 2013)

6.13 billion wireless connections

538 million fixed broadbandconnections

851.4 million fixed access lines


3/20

Mar-14 IDC

Standard Data Set Per OperatingCompany

Revenues

Wire line Market Residential Small business Enterprise/MNC Wholesale

Product Wireline voice Wireline data

Wireless voice Wireless data Wireless equipment Non-connectivity

Connections

Wireline Broadband Access line Traditional pay TV IP TV Wholesale

Wireless GSM, CDMA

Post-paid, pre-paid 3G LTE Wholesale/MVNO

3

Financials

Operating income

EBITDA Capex

Operating expenses

ForTotal companyWirelineWireless

Operational Metrics

Wireless Blended APRU Data ARPU Contract churn Pre-pay churn MOUs Net adds Gross adds


4/20

Mar-14 IDC

Methodology and Sources

Methodology has a basic three step process

1. Capture revenues and operational statistics from financial reports including

Annual/Half-year//Quarterly reports; 10K/ 10Q/ 20F; Regulatory Reports, transcripts,presentations, results bulletins, etc.

2. Apply IDC proprietary analysis to breakout reported data into GTI standard market,product and operational categories.

3. Regular feedback from regional analysts for the data models/breakouts.

The ongoing quarterly research and analysis includes:

Update based on carrier reporting intervals: quarterly or semi-annually

Calculate quarterly results for all carriers with semi-annual only reporting.

Collect/report data in local/reported currency

Apply standard IDC exchange rates for conversion to $US and Euros.

Process re-statements for accounting, M&A, pro-formas, de-scoping, etc to adopt most current viewsand apply to history where appropriate.

Convert individual carrier reporting into the GTI standard data set per operating company.


5/20

Mar-14 IDC

Benefits

One-stop source of financial and operational statistics for all

public carriers and few large private carriers in the world.

Consistent worldwide coverage of telecom operators, mobileoperators, cable TV operators.

Monitor carrier performance through financial and operationalresults.

Historical view of markets and carriers from Q1 2005 topresent.

Analyze country markets by product and carrier.

Identify best-in-class carrier group and operating company.


6/20

Mar-14 IDC

Applications

Market share analysis

Growth and performance benchmarking

Addressable market targeting

Target and seize new opportunities

Increase investment value

Navigate challenges

Peer group analysis

6


7/20Mar-14 IDC

H1 13 Connections Mix

7

Americas :1.5 B : 19%yoy : 2%

EMEA2.5 B : 32%yoy : 3%

APAC3.9 B : 49%yoy : 5%

Wireless

6,132 M: 79%

Fixed Access851 M: 11%

-2% Q/Q-5% Y/Y

+1% Q/Q+6% Y/Y

Pay TV282 M: 4%

+1% Q/Q+5% Y/Y

+1% Q/Q+8% Y/Y

Fixed Broadband538 M: 7%

477

224

229

272

286

316

366

518

537China Telecom

Bharti Airtel

Telefonica

China Unicom

Vodafone

America Movil

France Telecom

DT

VimpelCom

Geography 7.8 Billion Connections Carriers

Top 10 groups= 46% of base

Wireless in emerging markets dominates

China nearing in 1.2 billion wireless connections .

India subs base undergoing corrections due to which therewas a slight slow down in total sub base.

MEA will pass 1 billion wireless connections in Q3 2013.

LatAm will pass 640 million wireless connections by end of2013 .

6 of top 10 carriers are focused in emerging markets.

40% plus of VF, FT, TEF connections in emerging markets.

Importance of emerging markets Critical source of sustained revenue

growth.

Innovative business models and costflexibility drive higher earnings.


8/20Mar-14 IDC

H1 2013 Revenue Development

8

123 125

455 468

123

455

H1 12

297

952

62

291

931

H2 12 H1 13

Wireless Services

Wireline Services

Non Telco Services

Handset53

300

931

63

Wireless handset sales increased by $9billion in

H1 13 from $53 billion in H112. US and Japanaccount for 45% of sales.

Non-telecom services revenues gaining importantmomentumvideo, hosting, cloud, professionalservices, security, etc.

Wireline benefits from improvement in broadbandrevenue and stabilization of PSTN line losses.

Wireless driven by sustained level of net adds,continuous push of data revenue, increasedsmartphone penetration.

123

35 7243

77

55 30

57

105

JapanAPeJ CEMA Lat.Am N.Amer W.Eur

2010

46

199

7 1326

81

522

105

822

78

15

89

265

10

86

203

Regional Revenues by Product, H1 2013

+8%

-15%

-4%

-1%

+1%

+2%

+17%

-3%

0%

0%

Revenue in USD billion

Source: IDC GTI, Oct 17, 2013


9/20Mar-14 IDC

H1 13 Capital Trend

9

157

152 149 161 170

76

129

65

2012

315

145

2011

143

+8%

2010

281

132

2009

282

130

2008

311

153

2007

271

142

+4%0%-9%

304

+15%

Wireline

Wireless

H1 2013

140

Wireline 46%Wireless54%

48%Wireline 52%

Wireless

2012

2007

0

5

10

15

20

25

30

35

2007 2008 2009 2010 2011 2012

Japan

LatAmChina

34% 34%

27%27% 27%

26%

US

W.Europe

Capital* Spending Ratios

Source: IDC GTI, Oct 17, 2013*Excludes spectrum license fees.

Capital* Spending Per Year ($ Billion)


10/20Mar-14 IDC

H1 13 Earnings

10

310314

H1 2013H1 2012

-1%

EBITDA ($ billion)

Margin 33% 32%

Efficiency Drivers

Handset costs, especially smartphones, especially iPhone. Higher upgradefees, new upgrade policies, new data pricing plans, sourcing JVs, commonreference designs.

Customer managementprocess re-design, self-care, e-bill

Networkoperations optimization, network sharing

Balancing acquisition vs. retention. Focus on high value customers, notvolume.

Personnel costsshops, sales force, call center.

Cell site costssite and tower rental and utilities, transmission.

Interconnection and roaming costs.

Vodafone Egypt

Grameen Phone

MTN Nigeria

49%

49%

48%

48%

47%

47%

MTN Iran

Telkom Indonesia

Comcel Colombia

Indosat

URS Ukraine

Megafon

PLDT

66%

53%

51%

51%

Earning s before Interest, Taxes, Depreciation and Amortization.

10 Most Efficient Carriers*Based on Q213 EBITDA Margin

Source: IDC GTI, Oct 17, 2013


11/20Mar-14 IDC

Top 20 Carrier Groups by Revenue

11

China growth driven by net ads

Unicom growth driven by 3Gscale momentum

Americas growth driven by:

Smartphones and mobile dataat AT&T, VZ, Sprint

Net ads and mobile data atAmerica Movil and Telefonica

Negative resultsTEF, TI, BT Europe affected by weak

economic conditions andregulation in Europe

NTT faces competition, pricecompression

Inorganic growth factors are

neutralized through pro formas Comcast (NBC),

Telecom Italia (TelecomArgentina),

Vimpelcom (Orascom, Wind)

11

13

14

15

18

18

18

20

23

25

27

31

32

35

37

38

49

56

59

63

Verizon

AT&T

Telecom Italia

KDDI

China Unicom

China Telecom

France Telecom

America Movil

Comcast

Vodafone

Telefonica

DT

China Mobile

NTT

Telstra

British Telecom

VimpelCom

DirecTV

Sprint

Softbank

H1 2013 Rev (Billion $)

4%

-1%

14%

0%

2%

1%

3%

-7%

4%

5%

1%

0%

14%

19%

9%

-6%

15%

1%

7%

-1%

H1 13 Growth %In Reported Currency

Growth in reported currency, excluding FX effect Source: IDC GTI, Oct 17, 2013


12/20Mar-14 IDC

Delivery VehicleMS Excel Dashboard

12

The database is delivered to clients through a Dashboard exclusivelydesigned for GTI.

S/W requirements for viewing the dashboard

- Windows XP/Vista/7

- MS Excel

The database covers operator data from all the five regions i.e. APAC, NA, WE,CEE, ME&A . However, can also be delivered as per clients requirements interms of customized geography as mentioned below.

-USA & Western Europe-BRIC Countries

-Canada, Lat Am, CEE, MEA, Japan, AP.


13/20Mar-14 IDC

SnapshotWelcome Page

13

Contains Analyst contact infoalong with the introduction

to the database.Instructions on how

to read the pivottables

Contains Glossary forterminologies used in

the database.

M&A Info which has

caused changes in theOperators financials or

any other metrics.

Pivot table interface forRevenues, Connections

and Key FinancialIndicators filtered basedon individual carriers and

Carrier Groups.

Dashboard toobtain

customizedmetrics as per

userrequirements.


14/20Mar-14 IDC

SnapshotTrend Data Revenue

14

Product Category refers totypes of services i.e. Wireless,

Wire line & Other (includesother non core income)

Product Category is furtherdivided into Voice, Data,Equipments and Others

(Include TV, ICT, Data Centersetc).

Wire line revenues arefurther split into Residential ,

SMB, & MNC

Carrier Revenues pivot table allows the user to select a particular operator or a group and choose a

specific category and a sub category with in that for a chosen period.

By default the revenues are in Millions of USD & Euro


15/20Mar-14 IDC

SnapshotTrend Data Connections

15

Connections are mainly categorized into Wireline, Wireless & TV Subs. And wireline is further classified

into Wireline access lines, Wireline retail broadband subs etc and Wireless into GSM (Prepaid/Postpaid),CDMA (Prepaid /Postpaid) subscribers for all or for the chosen carrier/carrier groups.


16/20Mar-14 IDC

SnapshotTrend Data Financials

16

EBITDA, CAPEX andOperating Income are the

thee Key financial Indicatorstracked in GTI.

All the three KFIs arefurther sub categorizedunder Wireless and

Wireline.

EBITDA , Operating Income and CAPEX are the three key financial indicators that are tracked in GTI and

all the three are further sub categorized under Wireless and Wireline.

By default the values are in Millions of USD & Euro

C i G R ki R


17/20Mar-14 IDC

Carrier Group Ranking RevenueDashboard

17

Filter Section allows user to

customize the output based onRegion , Currency, Country,Product Category i.e . Wireless

, Wireline etc. and Subcategory which is Voice, Data,

Equipments etc.

The GUI provides the user to modify the end result based on various filters placedon the left hand side and same time comparing the results with the sequential

quarter and the same quarter year before.

It also provides others analysis such as growth rates , market share, ranking andgrowth vs Market along with graphical representation for Group revenue & share &YOY Growth

C i G R ki C ti


18/20Mar-14 IDC

Carrier Group Ranking - ConnectionsDashboard

18

The GUI for Connections is some what similar to the revenue one and provides the user to modify theoutcome based on their requirement.

The time period can be selected as either Yearwhere in the data is displayed & compared for the currentyear and the previous one. And when selected as Quarterthe comparison is made for the recent 2 Quartersand the same quarter in the previous financial year.

C i G R ki Fi i l


19/20Mar-14 IDC

Carrier Group RankingFinancialsDashboard

19

This particular GUI helps users to quickly know the top 15 companies in terms of Capital spending or

EBITDA or the ones with highest operating income in wireline and Wireless category or the company as awhole.


20/20

Analysts

Mark Winther

Courtney Munroe

Venkatesh Mahale

Ragupathy Vellappa

idc gti -program overview oct 2013

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