Consumer fixed market in Sweden 26 June 2014 Mats Lundquist, Head of Broadband & TV, Telenor Sweden
Agenda
• Introduction • Market overview • Strategic focus
Focus areas Telenor Sweden • Improve customer experience • Monetize mobile data
• Strengthen fixed 3-play position • Continue operational excellence improvement
3
Stable financial development despite competitive market EBITDA (SEK bn) and EBITDA margin
Telenor Sweden revenues (SEK bn) Fixed
Mobile 4000
40.00%
EBITDA
3.1
2.9
2.9
EBITDA %
3500
35.00%
3000
30.00%
3.0 3.4
30%
2500
8.9
9.4
9.2
8.3
2000
24%
24%
1000
3.6
22%
3.1
1500
7.6
2.4
10.00%
500
5.00%
0
2009
4
2010
2011
2012
2013
20.00%
15.00%
2.9
2.7
25.00%
25%
0.00%
2009
2010
2011
•
Fixed decline in DSL and voice
• Cost efficiency program
•
Fixed growth in 3-play over fibre
• Mobile contribution
•
Mobile revenue growth affected by lower handset sales
• Turnaround fixed
2012
2013
Consumer mobile
Business mobile
Consumer fixed broadband*
1.8m subscriptions 19% revenue market share
0.7m subscriptions 22% revenue market share
0.7m fixed BB subscriptions 23% revenue market share
Telenor
5
Telia
“3”
Tele2
Comhem
Other
*Incl. acquisition of Tele2’s fiber and cable business
Second largest operator with solid market positions
Overview of fixed in Telenor Sweden
Customers as of Q1 2014 (k)
vs Q1 2013* Broadband
675
TV
Voice
521
340
+133
+231
+20
Q1 2014: Revenues SEK 853 million (+27% YoY)*
6
* Tele2 acquisition included from Q1 2014
Agenda
• Introduction • Market overview • Strategic focus
Market trends
1. Fibre growth with SDU as the next arena after a period of consolidation
2. Continued shift from closed to open business models
3. Major shift in TV Market – driven by OTT and bundling of 3 play
4. Early signals of possible quad play based on improved customer experience of broadband, mobile and content
8
Fixed consumer decline explained primarily by voice and DSL 25,000
20,000
15,000
10,000
5,000
0 2007
2008
Fixed Broadband - Fibre TV with other operators
9
Source: PTS
2009
2010
2011
Fixed Broadband - Cable Fixed Broadband - xDSL
2012
2013
TV with Telecom Operators Fixed Voice
2014
2015
2016
2017
Swedish broadband development driven by fiber access* 100% 90% 80% 70%
Fibre household penetration ** ~50% - MDU 75% - SDU 15%
60% 50% 40% 30% 20% 10% 0% 2007
2008
2009
2010
2011
2012
2013
2014
2015
Fibre share of households
Cable share of households
xDSL share of households
Consumer Mobile Broadband "Household Penetration"
Other accesses (not paid for/dial-up) share of households
* Subscribers ** Homes connected with fibre out of 2.5 million MDUs and 2 million SDUs
10
Source: PTS and Telenor analysis
2016
2017
Fibre growth in open networks
Swedish fibre market (connections) 2,500,000
•
Model established by public owned REOs and metro networks. Followed by Telia Open Fibre
•
In MDUs, landlord makes investment in in-house LAN and leases to communication operator (CO) which installs active equipment.
•
CO runs and maintains network and signs SPs.
•
SPs offer a variety of products to the end user. Few 3-play offerings.
100% 90%
2,000,000
80% 70%
1,500,000
60% 50%
1,000,000
40% 30%
500,000
20% 10%
0
0% 2008
2009 Closed
11
2010
2011 Open
Source: PTS and Telenor analysis
2012
2013
Share open
2014
Consumer fibre customer base and growth in 2013
1,200
Other 154k (+25) Comhem 35k (+27)
1,000
Alltele 67k (+2) Bahnhof 69k (+5) Bredband2 89k (+6)
800
600
Telia 329k (+66)
400
Tele2 117k (+14)* 200
Telenor 280k (+24) 0 2012
12
* Owned by Telenor since January 2014 Source: PTS
2013
Fixed revenue growth 16%
Telia
Tele2
Telenor
Comhem
12% 8%
4% 0% -4%
0.9% -4.5%
-8% -12%
-1.8% -7.1%
-7.6%
2009
2010
-0.9%
-0.3%
2013
LTM Q114
-5.3%
-16% -20% -24% 2007
2008
2011
2012
Comments Q1 2014 Telia reports strong customer numbers all over (broadband, TV and telephony) Tele2 revenue decrease accelerates Telenor has turned negative trend Comhem is growing on revenues again after another strong customer growth quarter
Source: Annual reports
13
*Telenor revenues include acquisitions retroactively.
Agenda
• Introduction • Market overview • Strategic focus
Bredbandsbolaget’s brand position Bredbandsbolaget is the main brand with a clear position as a premium brand with strong customer experience. Ownit brand used as an attacker brand for take over market.
Experience More
Fastest broadband
First with the latest
Most satisfied customers
Brand Target Group: Maximalists 15
Increased scale in fibre and TV through acquisitions and organic sales Consumer fibre market share* 27%
35%
Telenor fibre universe 2010-2014 1,000
100%
900
4%
730
800
34%
75%
700
544
600
580
500
50%
395 400
200
Telenor
Com Hem
Other
385
300
25%
Telia
29%
Telenor #1 position within fibre
34% 28%
25%
22%
Customer market share TV**
100 0
0%
2010
2011
2012
2013
28%
2014
14% 18%
Telenor TelenorFiber fibreUniverse universe (hc)
40%
Telenor TelenorFiber fibreUniverse universe Market market share(%) share (%)
Telia
Telenor
Com Hem
Other
Telenor #2 position within TV
16
* Homes connected ** Including Canal Digital DTH Source: PTS and Telenor analysis
Main strategic areas 2014 Internet for all - Home • •
Increase penetration and ARPU Improve TV-offering
• •
Expand in open networks Develop SDU offer
Brand preference consumer” Brand preference consumer”
Efficient operations • Integrate Tele2 • Improve delivery process
17
Loved by customers
• •
Implement NPS Increase speed
Ambition to strengthen 3-play position Improved TV-offering:
Fibre ARPU - Bredbandsbolaget
• New packaging in 2013 • Basic, Flex and Large through 1-play
2-play
3-play
Distribution of fibre customer base
1 play 2 play 3 play
18
own content agreements • Premium packages through C More and Viasat
• New IPTV platform in H2 2014 • Multiscreen in 2015 • SVOD in 2015
Focus areas Telenor Sweden • Improve customer experience • Monetize mobile data
• Strengthen fixed 3-play position • Continue operational excellence improvement
19
Consumer fixed market in Sweden 26 June 2014 Mats Lundquist, Head of Broadband & TV, Telenor Sweden
