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MVNOs in M2M and Enterprise space

Presentation

Kuala Lumpur, 17th October 2012

2

Contents

• About Value Partners

• MVNOs in M2M and enterprise space

• Q&A

3

Value Partners: a global management consultiancy...

• An international player

Headquartered in Milan, with offices in 7 countries,

including double-digit growth rate markets

• A strong team of professionals

25 partners, 275 professionals, 23 nationalities

• An excellent track record

Constant growth over the last 18 years

• A large and loyal customer base

Over 350 client served in the past three years, 60% of

which have been with us for over 8 years

• The first to successfully integrate business and

IT expertise

4

…with a global reach - 10 offices with engagements in over 40 countries

Value Partners’ engagements

Value Partners’ offices

São Paulo

Buenos Aires

Milan

London

Rome Istanbul

Singapore

Hong Kong

Beijing

Shanghai

5

Our TMT practice has advised the leading TMT organizations regulators and investors around the world…

Telecoms clients Media clients Investment clients in TMT

SouthernCapital

6

…with a extensive footprint in the Asia Pacific region

Hong Kong

China

Japan

Taiwan

Singapore

Vietnam

Philippines

New Zealand

Macau

India

Nepal

Indonesia

Thailand

Malaysia

Sri Lanka

Australia

ELLIOTT ADVISORS

ELLIOTT ADVISORS

Pakistan

Bangladesh

Selected Asia Pacific clients

7

A selection of our MVNO, Enterprise and M2M experience from around the world

Europe:

• SME and large enterprise MVNO strategy

for British Telco in Italian market

• Premium MVNO offering business users

and HNWI in UK

• MVNO opportunity assessment for leading

Greek bank

• Development and launch of a second

brand focused on youths

• Developed enterprise strategy for

incumbent in Turkish market Asia:

• 2G/3G MVNO strategy for Malaysian Pay TV

operator

• Regional market study to identify potential network

partners throughout Asia

• MVNE strategy for fixed Malaysian operator

• Wholesale strategy for Malaysian mobile operator

• MVNE strategy in SE Asia for leading technology

solutions provider

• Enterprise strategy for leading operator in the

Philippines

• SME strategy and implementation for leading

operator in Indonesia

• M2M and UC strategy for Malaysian operator

Middle East:

• MVNO strategy for Zajoul - Saudi retailer and

distributor of mobile products

8

Contents

• About Value Partners

• MVNOs in M2M and enterprise space

• Q&A

9

In many developed markets, enterprise and M2M MVNOs are still the minority

48

18

31

8 10 10

4 8

2 5 4

1

USA UK Netherlands

Source: MVNOdirectory.com, Value Partners analysis

Consumer segment

Enterprise segment

SME segment

M2M Breakdown of MVNO by type in selected markets

M2M

•Full service

network

operator –

4

•Connectivity

provider - 1

SME

• ICT and UC

provider –

2

•Small

business

soln

provider - 1

•Cheaper

rates and

international

calls - 1

Enterprise

•Local telco

(fixed and

mobile

services) - 6

•Cheaper

rates and

international

calls - 2

M2M

•Network

and

solutions

provider –

2

•GPS

solution

provider – 1

•Smart

metering,

energy

mgmt - 1

SME

• ICT and UC

provider –

8

Enterprise

• ICT and UC

provider –

6

•Cooperative

– 1

•Local telco

– 1

•TLC and

utilities

retailer - 2

M2M

•VAS

provider for

Smart

Homes,

Smart

Buildings

and Smart

Grids -1

SME

•Google

Cloud

Computing

Provider – 1

•FMC

products

retailer, e.g,

pico cells -

1

Enterprise

• ICT and UC

provider –

4

•Mobile

services

provider – 5

•Local telco

– 1

10

M2M connections within Asia Pacific is expected to grow nearly twice as fast as globally

Projected M2M Connections in APAC

Projected M2M Connections in selected Asian

mkts

Millions CAGR

2010 2011 2012 2013 2014 2015

Others

India

Indonesia

Malaysia

Australia

South Korea

Japan

China

117

21

29

42

61

85 +41%

Source: Frost and Sullivan, Value Partners analysis

Millions

0.5

2.3

2011 2015

0.5

2.4

2011 2015

0.5

2.7

2011 2015

+50% +40% +48%

•Driven by Telematics,

m-Payments,

Tracking and mHealth

•6 consumer MVNOs

and 1 M2M MVNO

•Driven by

Telematics, m-

Payments and

mHealth

•No MVNOs

•Driven by Telematics,

Remote Monitoring,

M-Payments, and

mHealth

•1 consumer MVNO

11

M2M players along different parts of the value chain already have MVNO activities

Network operators

Service enabler

(Platform)

System Integrator (Interface)

Resellers Module / Modem

Suppliers

Smart object

suppliers

Service Provider (Seller)

Source: Nokia Siemens Networks, Frost & Sullivan, Informa, Value Partners analysis

Vertical Industries / Customers

15 – 20%

M2M value chain

% of

value 5 – 10% 30 – 40% 15 – 20% 10 – 20%

Areas with existing MVNOs

MVNO

MVNO

MVNO MVNO

MVNO

MVNO

MVNO

MVNO

• Providing connectivity contributes ~3% of mobile operator revenues… • … while providing the platform, interface and being a seller could

generate another 10-12% in revenues

12

Optimized network service provider typically work with multiple MNOs and offers services for more robust network performance Examples of optimized M2M network operator

• Positioned as a premier data MVNO – Multiple Virtual Network Operator –

that provides optimized wireless network for enterprises

• MNOs are AT&T and Vodafone (for GSM) and Sprint (for CDMA) as well

as partnering Iridium for satellite connectivity

• Operates own NOC and offers system integration services

• North America’s largest wireless network developed specifically for M2M

communications – only network optimized for automation and

performance

• MNO is T-Mobile for both GSM and CDMA

• Offers provisioning and device management platform

• Positioned as most comprehensive M2M service provider in Europe – GSM, SMS,

GPRS and 3G

• MNOs include all mobile operators in the UK and international providers – Three,

everything everywhere, Vodafone, O2-Telefonica, JT Global and Vodafone Global

• Has own off-mast network infrastructure – higher end-to-end resilience, security

and manageability

13

The range of services in the unified communications space wide and still evolving

Virtualisation

Real-time session

management

Mobility

Wired and wireless

Video

Rich media

collaboration

Speech

Voice access to

services

Presence

Intelligence in

the network

Policy

Identity and

preference

Source: Cisco, Value Partners analysis

Range of Unified Communication services

IP networks Leased lines/

Wireless leased lines

14

Cbeyond is an example of a successful enterprise MVNO that is expanding its focus beyond providing connectivity Case study of successful enterprise MVNO - CBeyond

• World’s first 100% VoIP local phone network - provides mobile

services through MVNO partnership

• Specifically targeted at SMEs

• Offers core communications…

- Local and long distance phone services

- Mobile services

- Broadband internet access

• …and IT and UC services

- Messaging and collaboration

- Cloud services – cloud servers, cloud PBX

- Data backup and security

- Marketing services – web hosting, web design, domain services

- Installation and support services

• Offers three packages from basic services to enterprise-class and

industry solutions for Lawyers and Healthcare professionals

• Since 2011, has expanded focus from communications-centric

(Cbeyond 1.0) to tech-dependent (Cbeyond 2.0)

15

M2M and Unified Communications require different competences and commercial approach from connectivity services

SMEs

Corporates/ Large

enterprises

M2M

customers

Connectivity

Telephony and

UC solutions

(e.g., PABX, etc)

Vertical-specific

applications

/solutions

Connectivity resold

as part of M2M

propositions

Pro

du

cts

/Se

rvic

es

Customer segments

Source: Value Partners analysis

Telco approach sufficient

- Relatively simple selling

process

System integration

and/or managed services

required - Relatively

more complex selling

process

Commercial approach across products/services and customer segments

16

Therefore, the key takeaways are…

• In the M2M and enterprise space, mobile/connectivity

is either an enabler or part of a larger portfolio of

services...

1

• …and providers require specialist domain

knowledge and expertise to deliver

2

• Commercially, the market will need to be

approached differently from the traditional market

3

• Mobile operators

may not be fully

equipped to play

in this space…

• …and will need to

collaborate with

third-parties

17

Possible business models – Some ideas and examples

Sell as utility

- plain vanilla

cheap lines

1. Adopt discount strategy and compete on

rates – no specialist capabilities required

1

Sell

optimized

network

1. Construct optimized data network possibly

leveraging multiple networks and technologies

– requires specialist network capabilities

2

Sell solutions

and managed

services

1. Provide end-to-end solutions (M2M and/or

UC) where mobile connectivity is one of many

services – requires specific capabilities

3

18

Contents

• About Value Partners

• MVNOs in M2M and enterprise space

• Q&A

19

Contact Information

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