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24112003 Prof Dr Dres hc A Picot 1

INSTITUTE FOR INFORMATION ORGANISATION AND MANAGEMENTProf Dr Dres hc A Picot LMU

Developments and Directions in Telecommunication Markets

Arnold Picot

Munich School of ManagementLudwig-Maximilians-Universitaumlt MuumlnchenInstitute for Information Organization and Management

Lecture on the International ICT Convention

The revival of the ICT sector Preconditions and enabling factorsUniversity of Padua24th November 2003



Developments and directions in telecommunication markets

1 Characteristics of telecommunication markets

2 Market developments

3 Challenges and opportunities

4 Directions in telecommunication markets










Definitions

Telecommunications in the broader sense

transmission of any kind of data (text charts pictures audio video voice)

Telecommunications inits stricter sense

Two-way communicationbetween somefewsubscribers

Broadcasting

One-way transmission of contents from a sender to a variety of receivers

Information technology

all technologies based on digital technology and microelectronics

Source Zerdick A Picot A Schrape K et al (2001)



Positive Feedback

The cycle of positive feedback The implications of positive feedbackon competition

0

100

Market share (in )

time

50 Battle zone

Winner

Loser

New users supervene

The networkvalue increases

Number of networkusers increases




Some interesting principles

Moores law Gilders law Metcalfes law

1

10

100

97 98 99 00 01 02 03 04

year

offer

demand

US volume of long distance calls (1997 = 1)

1000

10000

time

Benefit costs

0

20

40

60

80

100

120

1985 1989 1993 1995 1998

$MIPS

0

20

40

60

80

100

Costs increase linear to

connections

Benefit increases squared to connections

year

Processor performance doubles every 18

months

Bandwidths triples every year

Networking counts



Development of the value added chain in thetelecommunications market

Time

Intelligent networks

Telecommunications sector

Simple telecommunications value added chain

Provision oftransmissionlines

Provisionof IN

switchingequipment

Introductionof basisservice

Introduc-tion of network -dependentintegrated service

Billing andcustomer

care

Introductionof network -

independent integrated service

Acquisitionsprovisionof point of sale

Introduc-tionof value ndashadderservices

EndConsumer

Implemen-tation oftransmis-sionservice


dependentintegrated service


Billing andcustomer

care




Introductionof value ndash

adder services

End ConsumerProvision of network


Provision ofnetwork

Implementationof transmissionservice

Billing andcustomer care


End Consumer




Value added chain in the telecommunication marketVertical (dis)integration

Provision oftrans-mission lines

Imple-men-tation oftrans-mission service

Introduc-tion of basisservice

Introduc-tion of network ndashdepen-dentintegra-tedservice

Billingandcusto-mercare

Introduc-tionof network ndashindepen-dentintegra-tedservice

Acquisi-tionsprovisionof point of sale


EndConsu-mer

Provi-sionof IN swit-chingequip-ment

Network operator

Service operator

Trader

End consumer

Reseller




Convergence in the TC IT and media sector is a two stageprocess

telecommunications information technology

media

1 1first stage of convergence

2

second stageof

convergence




Convergence changes technologies applications and markets

Examples of convergence

Implementation of different services and applications on a single platformExample Convergence of data and voice communications- Internet telephony -

Convergence of network technologiesExample Convergence of fixed and mobile networks- O2 Genion service ndash phones for both applications -

Merging of industries into one marketExample Convergence of telecommunications IT and media sectors

Base for convergence digitalization and development of the Internet



The convergence of communications services is closelylinked to the internet

change in the meaning ofcommunicationsservices

continuous improvementof data quality

multimedia options of the Internet

increase in transmissioncapacities

bullInternet amp multimediabullInternet telephonybulle-commercebullmobile phones

advantage in costsconcerning transmissionactivities increase in the

number of Internet users

Lack of Internet-basedvoice phoneservice

But



Towards a new value added structure


Producementcreative staffrights developmentof ideas

Contents programsproduction

DistributionIT or consumerelectronicsappliance

Packaging

Provision of networks

Trans-mission service

Integrated service(network independent)

Distribution SMS

Value added Service

Basic-Service (network dependent)

Media

Telecommunications


Telecommunications

Media

Reception appliance

Value Added Services

Navigation

Transmission

Packaging

Contents

Convergence

Media

Manufactureof products

Usersoftware Sales (bundling)

Service

Operating system software

Peripherals + software

Producementcomponentpartssoftware elements











Current development on the German telecommunicationmarket

Development of the number of telecommunications service providers

269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses

Number of providers of telecommunications services whichare not subject to licensing

The addition of the individual figuresdoes not equal the number per capita

11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100

Licensees operating in sectors of licensed service and of services notsubject to licensing are countedsingle Therefore the addition of individual figures does not equal thenumber per capita

Source RegTP (2003)




Fixed-network customers voice phone services

mobile phone services

miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46

Market Volume 2002 611 bn EuroMarket Volume 2001 599 bn Euro


miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159

Market Volume 2003e 626 bn Euro



rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003

Development of minutes of connection

in fixed-telephony services(1997-2003)

Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year

Development of competitor`sshares of minutes in fixed-

telephony services (1997-2003)

6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)




Development of subscribers` numbers and forecast in mobile services

0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727

681Number of subscribers (in tsd)Germany

Number of subscribers (in tsd)Italy

Penetration Rate

In international comparison theGerman penetration rate lies in front of the USA (477) Japan (621) and Eastern Europe (30) In comparison withWestern Europe Germany`spenetration rate lies 4 behindthe average (77)

1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940

Sources RegTP (2003) RegTP (1999) EITO (2003)



Deregulation leads to an increase in competition in private and corporate customer sectors

Structure of competition on the German market (2003)

Long-distance international callsLocal calls

Deutsche Telekom darrService operators uarrcity network operators(eg Netcologne)

Deutsche Telekom darrnational and internationaloperators of ownnetworksuarrservice operators uarr

Deutsche Telekom darr

national and internationaloperators of own networks uarr

private customers

corporate customers

Decrease in market powerdarr

Increase in market poweruarr




Market share of minutes of connection in fixed-telephony networks(1st quarter of 2003)

local calls

909

91

942

58

Internet access(broadband)

47

53

long distance calls

42

58

mobile calls

60

40

international calls Internet access(narrow band)

66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)



The new European directives

In March 2002 the European Parliament and the Councel adopted four directivesand one decision to be implemented by EU members national governments untilJuly 25th 2003

Radio Spectrum Decision

Access Directive

Authorisation Directive

Framework Directive

Universal Service Directive










The Markets for ICT in Europe and around the World

87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e

Western European ICT market growth 1994-2004 in

Market value 2003 607 billion Euro Telecomunications

IT

Source EITO (2003)




Western Europe ICT market growth by segment 2002- 2004 in

-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware

Software ampIT services

Telecommunicationsequipment

Carrier services

2002 2003e 2004e

Market value 2003 607 billion Euro

Source EITO in corporation with IDC (2003)




02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e

Worldwide ICT market growth by region 2002-2004 in






435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe

Other Western Europe

UK

Spain

Nordic

Italy

Germany

France

2002 2006e

Internet users as a percentage of population 2002 and 2006(e)

Percentage of internet users of population




Distribution of broadband internet access in of private households (2003 2008e)

78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly

C z ech R ep ub l ic

M alaysia

B rasi l

V enez uela

C ro at ia

Source Arthur D Little (2003)

2003

2008e



Broadband subscribers (end 2002)

0

2

4

6

8

10

12

European UnionPopulation 380 m

Denmark Italy Finland Portugal Spain Ireland Luxembourg amp Greece

Rep of KoreaPopulation 47 m

AustriaSweden

Belgium

Netherlands

UK

France

GermanySource ITU World Telecom Indicators Database

Users in Mio

Source ITU World Telecom Indicators Database (2003)



Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419

A ustraliaLuxembo urg

P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re

SwitzerlandCanadaSwedenFranceJo rdan

Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany

United StatesA ustria

NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus

SwitzerlandP o rtugal

IrelandFrance

A ustraliaSweden

Luxembo urgUnited Kingdo m

ItalySlo venia

A ustriaIsrael

No rwayGermany

New ZealandM acao China

NetherlandsCanada

United StatesSingapo re

Ho ng Ko ng ChinaB elgium

Ko rea (Rep)Japan

Source ITU Research (2003)

Broadband subscription charges July 2003 Us $ Cost of 100 kbits as of monthly income

Overall subscription charges are important

But factoring in the speed of the connection and income is the more telling story



The telecommunication industry is confronted withdifficulties ndash Many players do not earn their cost of capital

US Telecommunication Players WACC vs ROIC (2002)

10837Wireless

Aggregate

82-34T-Mobile

1175Nextel

7763Verizon Wireless

75102Cingular

10526ATampT Wireless

1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC

ROIC Return on invested capitalWACC Weighted average cost of capitalReturn cost of capital

2 4 6 8 10 120

-2

-4

2

4

6

8

10

12

deg Verizon Wireless

deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg

deg WirelineAggregate

deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile

degWirelessAggregate

ROIC

deg Bell South

Do not returncost of capital

0

Source Booz Allen Hamilton (2003)










Telecom`s Paradoxon

Telecom industry is in crisis in the midst of technological progress and strong user

demand

Source CITI (2003)



The telecom industry is confronted with difficulties

bull Telecom capital spending is down by two thirds since 2000 threatening futureinnovations

bull Some European companies must earn $10 million a day for debt service

bull Telecom firms face costlier access to financial markets as investors adjust theirperception of risk

bull Cellular is reaching saturation while 3G lags behind projections that led to extravagant auction bids in Europe

bull Equipment firms face bankruptcy unless investment picks up

bull RampD and innovation are slowing down with long-term implications

bull Investment slowdown and cost cutting is leading to decline in service quality

How can the telecom industry cope with the new situation




bull New sources of revenues

bull The impact of economies of scale is significant At least an the network level oligopolies seem to be moresucessful in fixed and in wireless

bull Review of strategic positioning

bull Network outsourcing opportunities have to be considered



New Sources of Revenues

bull In 2002 German subscribers sent 21 billionshortmessages via SMS and recently also via MMS

bull Short message services share nearly 14 or more than25 billion euro of providersacute sales revenues (in comparison to 124 in 2001)

bull As shown the number of broadband accesses is risingrapidly

bull The traffic in mobile communication is still rising (voiceand data)

bull New services will offer new business opportunities experimental approach needed



The industry structure comprises too many players

Exemple wireless telecommunication link between number of competitorsand EBITDA Margin ndash also true for other telecom areas with high network and

scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg

Netherlands degdeg Denmark

Austria Turkey deg UK IsraelArgentinia Chile deg

Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg

deg Singapore Southafrica

Finland deg

deg Russiadeg New Zealand Phillipines

deg Switzerland Portugal




Economies of Scale in the wireless industry

Cost per Sub vs Subscribers (National Operators USA)

0

$700

$800

40

$100

$200

$300

$400

$500

$600

Subscribers (in Mio)$0


deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR

AnnualizedOp CostPer Sub

10 20 30




Different strategic positionings are possible

bull bdquobit-pipeldquoconcentrate on traditional key competences therebybecoming utility providers who offer transmissioncapacities as a kind of physical infrastructural layer formanifold specialized suppliers of intermediate and endcustomer services in telecommunications

bull bdquocomprehensive service providerldquoevolve into vertically integrated value added generatorwith broad service portfolio direct contact to theendcostumer and control over the entire value chain

bull bdquoplatform providerldquoconcentrate on design and operation of technologicallyadvanced network IT and service infrastructure as basisfor third party service provisioning



Currently each strategic option evokes openquestions

bull bit-pipe

ndash profitabilityndash revenue sharingndash monopoly and regulation

bull comprehensive service provider

ndash too large a portfolio of necessary horizontal and verticalcompetences to be manageable

ndash efficiency problems due to lacking scale and synergyadvantages

bull platform provider

ndash sustainable competitive advantage possiblendash revenue sharingndash access regulation



Outsourcing considered in some casesin mid term future

Kept in houseNetwork Outsourcing Opportunities

Network IT Products ampcontent

Customer Careamp Billing

Marketing ampSales

Architecture designSystem selection

Pricing(Product Marketing)

Product Servicedefinition (Product Mkt)

Plan Design

customer segmentationservice level definition

billing requirementspecificationDemand Management Service delivery

platform developmentBranding

Network planning andarchitecture

Product (Systems)management QM

Distribution channelmanagement

Network tuningoptimization

Development programming

Service deliveryplatform operations

Billing mediation Advertising

Operate

Network operators Application operationscore system

Content bundling Billing operations Points of Sale

Network maintenance Solution provisioning forcorporate customers

Call Center inbound(technpremium support)

Application andContent development

Infrastructureinstallation

IT Operations Application operations Call Center inbound(regular support)

Logistics

IT InfrastructureData Center

Call Center outboundand overflow

Applications operationssupport systems (finadmin

Bill printingdistribution)

Source Eikelmann(2002) Generally outsourced or under construction already or delivered in par



In the end the markets will decide what strategy

will prevail



Thank you for your attention




Definitions

Positive Feedback


Development of the value added chain in the telecommunications market


Convergence in the TC IT and media sector is a two stage process


The convergence of communications services is closely linked to the internet



Current development on the German telecommunication market














Broadband Prices

The telecommunication industry is confronted with difficulties ndash Many players do not earn their cost of capital


Telecom`s Paradoxon







Currently each strategic option evokes open questions

Network Outsourcing Opportunities

















Definitions





Broadcasting







Positive Feedback


0

100

Market share (in )

time

50 Battle zone

Winner

Loser

New users supervene








1

10

100

97 98 99 00 01 02 03 04

year

offer

demand


1000

10000

time

Benefit costs

0

20

40

60

80

100

120

1985 1989 1993 1995 1998

$MIPS

0

20

40

60

80

100


connections


year


months


Networking counts




Time





Provisionof IN

switchingequipment



Billing andcustomer

care





EndConsumer





Billing andcustomer

care





adder services



Provision ofnetwork




End Consumer













EndConsu-mer


Network operator

Service operator

Trader

End consumer

Reseller






media


2

second stageof

convergence





















But








Packaging




Distribution SMS

Value added Service


Media

Telecommunications


Telecommunications

Media

Reception appliance


Navigation

Transmission

Packaging

Contents

Convergence

Media



Service
















269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses



11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100


Source RegTP (2003)






miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon











Positive Feedback


0

100

Market share (in )

time

50 Battle zone

Winner

Loser

New users supervene








1

10

100

97 98 99 00 01 02 03 04

year

offer

demand


1000

10000

time

Benefit costs

0

20

40

60

80

100

120

1985 1989 1993 1995 1998

$MIPS

0

20

40

60

80

100


connections


year


months


Networking counts




Time





Provisionof IN

switchingequipment



Billing andcustomer

care





EndConsumer





Billing andcustomer

care





adder services



Provision ofnetwork




End Consumer













EndConsu-mer


Network operator

Service operator

Trader

End consumer

Reseller






media


2

second stageof

convergence





















But








Packaging




Distribution SMS

Value added Service


Media

Telecommunications


Telecommunications

Media

Reception appliance


Navigation

Transmission

Packaging

Contents

Convergence

Media



Service
















269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses



11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100


Source RegTP (2003)






miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon













1

10

100

97 98 99 00 01 02 03 04

year

offer

demand


1000

10000

time

Benefit costs

0

20

40

60

80

100

120

1985 1989 1993 1995 1998

$MIPS

0

20

40

60

80

100


connections


year


months


Networking counts




Time





Provisionof IN

switchingequipment



Billing andcustomer

care





EndConsumer





Billing andcustomer

care





adder services



Provision ofnetwork




End Consumer













EndConsu-mer


Network operator

Service operator

Trader

End consumer

Reseller






media


2

second stageof

convergence





















But








Packaging




Distribution SMS

Value added Service


Media

Telecommunications


Telecommunications

Media

Reception appliance


Navigation

Transmission

Packaging

Contents

Convergence

Media



Service
















269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses



11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100


Source RegTP (2003)






miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon












Time





Provisionof IN

switchingequipment



Billing andcustomer

care





EndConsumer





Billing andcustomer

care





adder services



Provision ofnetwork




End Consumer













EndConsu-mer


Network operator

Service operator

Trader

End consumer

Reseller






media


2

second stageof

convergence





















But








Packaging




Distribution SMS

Value added Service


Media

Telecommunications


Telecommunications

Media

Reception appliance


Navigation

Transmission

Packaging

Contents

Convergence

Media



Service
















269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses



11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100


Source RegTP (2003)






miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon




















EndConsu-mer


Network operator

Service operator

Trader

End consumer

Reseller






media


2

second stageof

convergence





















But








Packaging




Distribution SMS

Value added Service


Media

Telecommunications


Telecommunications

Media

Reception appliance


Navigation

Transmission

Packaging

Contents

Convergence

Media



Service
















269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses



11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100


Source RegTP (2003)






miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon













media


2

second stageof

convergence





















But








Packaging




Distribution SMS

Value added Service


Media

Telecommunications


Telecommunications

Media

Reception appliance


Navigation

Transmission

Packaging

Contents

Convergence

Media



Service
















269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses



11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100


Source RegTP (2003)






miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon




























But








Packaging




Distribution SMS

Value added Service


Media

Telecommunications


Telecommunications

Media

Reception appliance


Navigation

Transmission

Packaging

Contents

Convergence

Media



Service
















269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses



11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100


Source RegTP (2003)






miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon
















Packaging




Distribution SMS

Value added Service


Media

Telecommunications


Telecommunications

Media

Reception appliance


Navigation

Transmission

Packaging

Contents

Convergence

Media



Service
















269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses



11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100


Source RegTP (2003)






miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon




















269 395 491 554 611 674 711 772 811 850 861

10661222

13551593 1629

1780 1876 1917 1939 2007 2045

Number of licenses



11031276

1458

1707

Num

bero

f pro

vide

rs

021

998

071

998

021

999

091

999

082

000

022

001

022

000

012

003

082

002

022

002

082

001

1723

18401952

1988 20042060 2100


Source RegTP (2003)






miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon














miscellaneous

cable TV

carrierbusiness

rental lines

326

16

100

360152

46



miscellaneous

cable TV

carrierbusiness

rentallines


351

321

20

105

45

159




rental lines

carrierbusiness

cable TV

359

340

14

101

45141

miscellaneous

Source RegTP (2003)




178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon












178

0

185

12

192

46

210

73

232

124

211

145

200

157

0

50

100

150

200

250

300

350

400

1997 1998 1999 2000 2001 2002 2003



Competitors

DTAG

Total amount

min

utes

of c

onne

ctio

n(in

bn)

178

238

283

355 356

197

357

year



6

407

348

258

19

440

1997 1998 1999 2000 2001 2002 2003 1st quarter

50

25

0

year

Source RegTP (2003)





0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon













0

10000

20000

30000

40000

50000

60000

70000

56126

Num

bero

fsub

scrib

ers

) in

tsd

)

586

953 1768 24823764

55548276

13913

23446

60043

48202

1230 46

68101

170

22

285

727



Penetration Rate


1992 1993 20001996 19981994 1995 1997 1999 2003e20022001

62000

752

year

49926

52589 54076913

867

940











private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon


















private customers

corporate customers







local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon













local calls

909

91

942

58


47

53

long distance calls

42

58

mobile calls

60

40


66

34

miscellaneous

32

68

total

44

56

DTAG

Competitors

Source RegTP (2003)






Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon














Access Directive


Framework Directive












87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon



















87

56

9379 85

6780 86

127

101

134

108

145

121

39

1018

-35

26

-07

3822

-5

0

5

10

15

20

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003e 2004e



IT

Source EITO (2003)





-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon













-69

-16

23

09

26

44

-75

05

3948 45 47

-10

-8

-6

-4

-2

0

2

4

6

Computer hardware



Carrier services

2002 2003e 2004e






02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon












02

25

41

-27

11

26 32

47 4960

104110

12

4557

-4

-2

0

2

4

6

8

10

12

14

WesternEurope

USA Japan RoW World

2002 2003e 2004e







435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon












435

661

438

673

507

704

327580

638

825

348

553

456

678

407

650

0 10 20 30 40 50 60 70 80 90

Western Europe


UK

Spain

Nordic

Italy

Germany

France

2002 2006e







78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon












78

56

4 5

3 1

2 9

2 6

2 3

2 3

2 2

2 1

19

14

12

10

9

7

4

3

2

1

1

8 6

78

71

70

53

4 6

4 4

4 4

4 1

4 0

4 0

4 3

4 6

4 1

3 0

3 4

2 4

2 3

7

3

2 1

0 10 2 0 3 0 4 0 50 6 0 70 8 0 9 0 10 0

Ko rea

Ho ng ko ng

T aiwan

Jap an

Sing ap ur

Swit z er land

U SA

N et her land s

B elg ium

Swed en

A ust r ia

U nit ed King d o m

Sp ain

Germany

F rance

I t aly


M alaysia

B rasi l

V enez uela

C ro at ia


2003

2008e




0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon












0

2

4

6

8

10

12




AustriaSweden

Belgium

Netherlands

UK

France


Users in Mio




Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon











Broadband Prices

$ 9177$ 7954

$ 7366$ 7359

$ 6169$ 5803$ 5784$ 5736

$ 5334$ 5299$ 5182$ 5155$ 5146$ 5056$ 4972$ 4923

$ 4763$ 4616$ 4520$ 4456

$ 4061$ 3964

$ 3834$ 3821

$ 3441$ 3393$ 3318$ 3259$ 3248

$ 2419


P o rtugalItaly

IrelandIceland

Slo veniaLithuania

M altaSingapo re


Ko rea (Rep)Denmark

M acao Israel

UKNo rwayCyprus

New ZealandHK China

B elgiumGermany


NetherlandsJapan

155142

136114

088086

080062061060

055055

048043

039036

030030

024023021021

017017

013012

006006003

lt 001

DenmarkJo rdan

M altaLithuania

IcelandCyprus


IrelandFrance

A ustraliaSweden


ItalySlo venia

A ustriaIsrael

No rwayGermany


NetherlandsCanada



Ko rea (Rep)Japan









10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon













10837Wireless

Aggregate

82-34T-Mobile

1175Nextel


75102Cingular


1153Sprint PCS

854Wireline

Aggregate

6661SprintFON

1025ATampT

7984Alltel

6808Qwest

65109Bell South

8584SBC

777Verizon

WACCROIC


2 4 6 8 10 120

-2

-4

2

4

6

8

10

12


deg Verizon

deg SBC

deg Qwest

Alltel deg

ATampT deg

SprintFON deg


deg Sprint PCS

deg ATampT Wireless

deg Cingular

deg Nextel

WACC

deg T-Mobile


ROIC

deg Bell South


0











Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon


















Telecom`s Paradoxon


demand

Source CITI (2003)































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon







































scale effects

7 6 5 4 3 28

10

20

30

40

50

60

Number of players

EBITDAMargin

01

Hongkong deg



Japan deg

Germany deg

deg France India

Greece degItaly deg

China deg


Finland deg








0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon













0

$700

$800

40

$100

$200

$300

$400

$500

$600



deg Cingular

deg ATampT Wireless

deg Sprint PCS

deg Nexteldeg VSTR


10 20 30











bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon


















bull bit-pipe













Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon















Marketing ampSales




Plan Design











Operate








Logistics









will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon












will prevail







Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon















Definitions

Positive Feedback























Broadband Prices



Telecom`s Paradoxon









developments and directions in telecommunication · pdf fileprof. dr. dres. h.c. a. picot lmu...

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