delta telecom experience: launch and commercial operation...
TRANSCRIPT
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Business Models Used Business Models Used inin CDMACDMA--450 Networks Deployment450 Networks Deployment
DELTA Telecom Experience: DELTA Telecom Experience: Launch and Commercial Operation of CDMALaunch and Commercial Operation of CDMA--450 450
network in North West region of Russianetwork in North West region of Russia
CDMA450 SeminarCDMA450 SeminarHongHong--KongKong
19 November 200419 November 2004
Gennady GolantGennady GolantDeputy CEO,Deputy CEO,
CTO,CTO,JSCJSC ««Delta TelecomDelta Telecom»»
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Delta Telecom Delta Telecom the first cellular operator in Russiathe first cellular operator in Russia
l The first cellular call in Russia was made in Delta Telecom NMT 450 (1G analog network) in Sep.1991
l Delta has NMT 450 license in St.Petersburg and 50% of North-West region of Russia
l Nov. 2002 Delta got CDMA 450 license
l NMT license expire date 1.03.2005
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CDMA450 Network Launch CDMA450 Network Launch
l Dec. 2002 The first CDMA450 network in Russia (SKYLINK ™) was launched in St. Petersburg
l Nov. 2003 CDMA450 was launched in Moscow
l Dec.2003 Licenses for all other regions were issued
l Year 2004Delta Telecom, Moscow Cellular and many other CDMA450 operators* in Russia are integrated under SKYLINK umbrella
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Spectrum reuseSpectrum reuse
Carrier B465.225 MHz
Carrier C466.475 MHzGuard Band
3.75 MHz1.25 MHz
0.35MHz
0.4 MHz
Carrier A463.975 MHz
4.5 ? Hz 467.5 ? Hz
465.85 MHz 467.1 ? Hz
160 ch. 260 ch.
465.65 ? Hz 467.3 ? Hz
Guard Band
210 ch.
463 ? Hz
Only 2x4.5MHz are availableOnly 2x4.5MHz are available
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CompetitiveCompetitive EnvironmentEnvironment
l CDMA is an unknown technology on Russian mobile market- GSM technology has >98% market share
l Strong competition in St. Petersburg :
– October 2002: lTwo national wide GSM operators(? egafon, ? ?S)lPenetration >50%
– October 2004:l4 GSM operators (? ?gafon, ? ?S, BeeLine, ??le-2)
lPenetration >80%
GSM; 98%
Other; 2%
Dec-02
Megafon; 54%
MTS; 38%
Delta/Skylink;
5%
?ele2; 2%
Oct-04Delta/
Skylink; 3%
?ele2; 3%BeeLine;
12 %
MTS; 35%
Megafon; 47%
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Entering the market 2002Entering the market 2002--20032003
lTerminals Issue
– There are > 600 GSM brand name handsets
– ONLY TWO cdma450 terminals in 2002-2003!– Strong support from GSM terminal vendors
(brand service centers and brand advertising)– No «number portability» features in use
lCoverage– GSM coverage area >95% of population in
Russia – cdma450: St.Peterburg and Moscow only
(year2003)
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Entering to the market 2002Entering to the market 2002--20032003
l Roaming– Worldwide GSM international roaming– No international CDMA450 roaming
l Advertising– Lots of advertising of GSM operators
(financial recourses)– Limited recourses from SKYLINK side
Are there any reasons for customers to change
subscription from GSM to CDMA?
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Facing competition challenges.Facing competition challenges. Stage 1Stage 1
Stage I (2003-2004):l In less than 2 years SKYLINK trademark has
become well-known in St.Petersburg:l CDMA450 coverage in St.Petersburg and
region has become close to GSM coveragel CDMA450 Roaming was opened between
Petersburg, Moscow and several regions in Russia and CIS (Byelorussia)
l New terminal vendors and handset types appears
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CDMA450 Terminals CDMA450 Terminals Commercially Available in St.Petersburg Commercially Available in St.Petersburg
Year Year YearYear2002 2002 --2003 2003 20042004
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Facing competition challengesFacing competition challenges Stage 2Stage 2
Stage 2A (tasks for year 2005) :l To increase the number of handsets type
up to 15 models l To have lower prices for Low-end
terminals ($100/unit)l To transfer handsets purchase to dealers
to release significant financial recourses (R-UIM - the first step has been already made)
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Facing competition challengesFacing competition challenges Stage 2Stage 2
Stage 2B (tasks for year 2005) :l Set up handset repair centers (outsourcing)
– Save Delta’s human resources and costs– Vendors have to compensate repair costs
l To set up national CDMA450 coveragel To implement Inter-standard
cdma450/GSM roaming– 1st step – plastic roaming; – 2nd step – dual mode handsets on the base of
Qualcomm MSM 6500)
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l HSPD with the data rate up to 153 kbit/s is the main advantage compared to GSM/GPRS, BUT it is necessary to IMPLEMENT it!
?) For internet access via ??/ PDA– Providing high quality DATA coverage (including
indoor) without «holes» for HSPD with the rate48/76/153 kbit/s
– Providing extra capacity (at least 30% BTS capacity for data)
– Providing the necessary range of data cables, PCMCI cards & CF modules
B) For content access directly from the handset– Implementation of BREW and development of
Russian language content
Implementation ofImplementation ofcdma2000 Competitive Advantagescdma2000 Competitive Advantages
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Main marketing strategy 2002-2004:• Orientation to heavy speaking business subscribers
and mobile internet users who can pay > $50/month
• The retail TERMINALS PRICES ($280 - $350 in 2003 and $180-$270 in year 2004) prevented entering the MASS MARKET
• Tariff packages:Voice+data at the fixed price $50-90/month
l RPLN «1000min+30Mb»l RPLN «1500 min+30Mb»l RPLN «unlimited voice+75Mb»(extra data costs: $0.30/? B )
Entering the marketEntering the marketwith special offer RPLNwith special offer RPLN
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Subscribers and traffic parametersSubscribers and traffic parameters
• Number of subscribers > 80 000 (St.Petersburg)• Average traffic per subscriber:
• MoU = 1500 min.Comparing current MoU with GSM figures in Russia (90-130 min.), it’s
equal to serving 1 mln. subscribers• ARPU = $66
Comparing current ARPU with GSM figures in Russia (10-12 USD), it’s equal to revenue from 350-500 thousand GSM subscribers
• Data = 15MB/sub/month (no data regarding the GSM HSPD figures)
ARPU, $
0
10
20
30
40
50
60
70
80
average inSkylink
average inGSM
MoU, min
0
200
400
600
800
1000
1200
1400
1600
average inSkylink
average inGSM
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Voice & Data Revenue.Voice & Data Revenue.Year growth (Oct.2004/Oct.2003)Year growth (Oct.2004/Oct.2003)
146%
201%
131%
153%
180% 186%
220% 218% 216%
241%249%
292%
326%
120%
125%132%
210%
175%185%
194%
113%
166%158%
407%
100%
140%
180%
220%
260%
300%
340%
380%
420%
Oct-03
Nov-03
Dec-03
Jan-0
4
Feb-0
4
Mar-04
Apr-04
May-04
Jun-0
4Ju
l-04
Aug-04
Sep-0
4Oct-
04
Local traffic
Data
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l January 2004: R-UIM technology was implemented:– R-UIM cards are used across SKYLINK network– Only R-UIM supported new handsets are
purchased from the vendors
l EV-DO trial was successfully finishedl 2.1GHz trial started with 3BTS in Petersburgl Inter standard roaming
– CDMA-450/GSM “plastic” inter standard roaming successful first call was made in October 2004 in St.Petersburg
New solutions tested by Delta New solutions tested by Delta Telecom in Telecom in St.PetersburgSt.Petersburg
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Russian CDMARussian CDMA--450 network status 450 network status and plans in 2004and plans in 2004--20052005
l Year 2004– More than 10 new regional networks under
SKYLINK umbrella launched by the end of year 2004
– Total number of subscribers expected>150 000
– More than 500 BTS were installed l Year 2005
– CDMA-450 coverage on significant part of Russian Federation expected (especially European part)
– Deployment of EV-DO in St.Petersburg and Moscow
– BREW technology implementation (1Q 2005)
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MAIN STRATEGIC RESULTSMAIN STRATEGIC RESULTSin in St.PetersburgSt.Petersburg
l Main result: Delta attracts significant investments
l Revenue from CDMA-450 network 16 times more than NMT revenue (Oct.2004)
l Company’s capitalization increased more than 20 times in 2 years
l Successful example of Delta Telecom’s development proved the CDMA-450 technology to be the right choice for:– NMT-450 Federal Network modernization
– Successful business activity.
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Thank you for your attention!Thank you for your attention!
Gennady GolantDeputy CEO and CTO JSC «Delta Telecom»St.PetersburgTel +7 812 312 9571fa[x +7 812 312 7173Mob.+7 812 970 [email protected]