idc gti -program overview oct 2013
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IDC Global Telecom Indicators
October 2013
Revenues, Financials & Connections
Global, Regional, Country Level Details
500+ Carriers
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Revenue, Connections & FinancialIndicators
Global Telecom IndicatorsH1 2013 Results
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500 Carriers Analyzed in 146 Countries
Source: IDC Global Telecom Indicators, Oct 2013
All publicly traded carriers are included,represents 90%+ of total market
IDC proprietary database of financial and operational statistics for
fixed, mobile and cable TV operators from Jan 2005 to present.
Financials
$960 billion revenues
$152 billion operating income
$311 billion EBITDA
$145 billion capital spending
Connections(end of Jun 2013)
6.13 billion wireless connections
538 million fixed broadbandconnections
851.4 million fixed access lines
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Standard Data Set Per OperatingCompany
Revenues
Wire line Market Residential Small business Enterprise/MNC Wholesale
Product Wireline voice Wireline data
Wireless voice Wireless data Wireless equipment Non-connectivity
Connections
Wireline Broadband Access line Traditional pay TV IP TV Wholesale
Wireless GSM, CDMA
Post-paid, pre-paid 3G LTE Wholesale/MVNO
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Financials
Operating income
EBITDA Capex
Operating expenses
ForTotal companyWirelineWireless
Operational Metrics
Wireless Blended APRU Data ARPU Contract churn Pre-pay churn MOUs Net adds Gross adds
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Methodology and Sources
Methodology has a basic three step process
1. Capture revenues and operational statistics from financial reports including
Annual/Half-year//Quarterly reports; 10K/ 10Q/ 20F; Regulatory Reports, transcripts,presentations, results bulletins, etc.
2. Apply IDC proprietary analysis to breakout reported data into GTI standard market,product and operational categories.
3. Regular feedback from regional analysts for the data models/breakouts.
The ongoing quarterly research and analysis includes:
Update based on carrier reporting intervals: quarterly or semi-annually
Calculate quarterly results for all carriers with semi-annual only reporting.
Collect/report data in local/reported currency
Apply standard IDC exchange rates for conversion to $US and Euros.
Process re-statements for accounting, M&A, pro-formas, de-scoping, etc to adopt most current viewsand apply to history where appropriate.
Convert individual carrier reporting into the GTI standard data set per operating company.
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Benefits
One-stop source of financial and operational statistics for all
public carriers and few large private carriers in the world.
Consistent worldwide coverage of telecom operators, mobileoperators, cable TV operators.
Monitor carrier performance through financial and operationalresults.
Historical view of markets and carriers from Q1 2005 topresent.
Analyze country markets by product and carrier.
Identify best-in-class carrier group and operating company.
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Applications
Market share analysis
Growth and performance benchmarking
Addressable market targeting
Target and seize new opportunities
Increase investment value
Navigate challenges
Peer group analysis
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H1 13 Connections Mix
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Americas :1.5 B : 19%yoy : 2%
EMEA2.5 B : 32%yoy : 3%
APAC3.9 B : 49%yoy : 5%
Wireless
6,132 M: 79%
Fixed Access851 M: 11%
-2% Q/Q-5% Y/Y
+1% Q/Q+6% Y/Y
Pay TV282 M: 4%
+1% Q/Q+5% Y/Y
+1% Q/Q+8% Y/Y
Fixed Broadband538 M: 7%
477
224
229
272
286
316
366
518
537China Telecom
Bharti Airtel
Telefonica
China Unicom
Vodafone
America Movil
France Telecom
DT
VimpelCom
Geography 7.8 Billion Connections Carriers
Top 10 groups= 46% of base
Wireless in emerging markets dominates
China nearing in 1.2 billion wireless connections .
India subs base undergoing corrections due to which therewas a slight slow down in total sub base.
MEA will pass 1 billion wireless connections in Q3 2013.
LatAm will pass 640 million wireless connections by end of2013 .
6 of top 10 carriers are focused in emerging markets.
40% plus of VF, FT, TEF connections in emerging markets.
Importance of emerging markets Critical source of sustained revenue
growth.
Innovative business models and costflexibility drive higher earnings.
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H1 2013 Revenue Development
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123 125
455 468
123
455
H1 12
297
952
62
291
931
H2 12 H1 13
Wireless Services
Wireline Services
Non Telco Services
Handset53
300
931
63
Wireless handset sales increased by $9billion in
H1 13 from $53 billion in H112. US and Japanaccount for 45% of sales.
Non-telecom services revenues gaining importantmomentumvideo, hosting, cloud, professionalservices, security, etc.
Wireline benefits from improvement in broadbandrevenue and stabilization of PSTN line losses.
Wireless driven by sustained level of net adds,continuous push of data revenue, increasedsmartphone penetration.
123
35 7243
77
55 30
57
105
JapanAPeJ CEMA Lat.Am N.Amer W.Eur
2010
46
199
7 1326
81
522
105
822
78
15
89
265
10
86
203
Regional Revenues by Product, H1 2013
+8%
-15%
-4%
-1%
+1%
+2%
+17%
-3%
0%
0%
Revenue in USD billion
Source: IDC GTI, Oct 17, 2013
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H1 13 Capital Trend
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157
152 149 161 170
76
129
65
2012
315
145
2011
143
+8%
2010
281
132
2009
282
130
2008
311
153
2007
271
142
+4%0%-9%
304
+15%
Wireline
Wireless
H1 2013
140
Wireline 46%Wireless54%
48%Wireline 52%
Wireless
2012
2007
0
5
10
15
20
25
30
35
2007 2008 2009 2010 2011 2012
Japan
LatAmChina
34% 34%
27%27% 27%
26%
US
W.Europe
Capital* Spending Ratios
Source: IDC GTI, Oct 17, 2013*Excludes spectrum license fees.
Capital* Spending Per Year ($ Billion)
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H1 13 Earnings
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310314
H1 2013H1 2012
-1%
EBITDA ($ billion)
Margin 33% 32%
Efficiency Drivers
Handset costs, especially smartphones, especially iPhone. Higher upgradefees, new upgrade policies, new data pricing plans, sourcing JVs, commonreference designs.
Customer managementprocess re-design, self-care, e-bill
Networkoperations optimization, network sharing
Balancing acquisition vs. retention. Focus on high value customers, notvolume.
Personnel costsshops, sales force, call center.
Cell site costssite and tower rental and utilities, transmission.
Interconnection and roaming costs.
Vodafone Egypt
Grameen Phone
MTN Nigeria
49%
49%
48%
48%
47%
47%
MTN Iran
Telkom Indonesia
Comcel Colombia
Indosat
URS Ukraine
Megafon
PLDT
66%
53%
51%
51%
Earning s before Interest, Taxes, Depreciation and Amortization.
10 Most Efficient Carriers*Based on Q213 EBITDA Margin
Source: IDC GTI, Oct 17, 2013
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Top 20 Carrier Groups by Revenue
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China growth driven by net ads
Unicom growth driven by 3Gscale momentum
Americas growth driven by:
Smartphones and mobile dataat AT&T, VZ, Sprint
Net ads and mobile data atAmerica Movil and Telefonica
Negative resultsTEF, TI, BT Europe affected by weak
economic conditions andregulation in Europe
NTT faces competition, pricecompression
Inorganic growth factors are
neutralized through pro formas Comcast (NBC),
Telecom Italia (TelecomArgentina),
Vimpelcom (Orascom, Wind)
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13
14
15
18
18
18
20
23
25
27
31
32
35
37
38
49
56
59
63
Verizon
AT&T
Telecom Italia
KDDI
China Unicom
China Telecom
France Telecom
America Movil
Comcast
Vodafone
Telefonica
DT
China Mobile
NTT
Telstra
British Telecom
VimpelCom
DirecTV
Sprint
Softbank
H1 2013 Rev (Billion $)
4%
-1%
14%
0%
2%
1%
3%
-7%
4%
5%
1%
0%
14%
19%
9%
-6%
15%
1%
7%
-1%
H1 13 Growth %In Reported Currency
Growth in reported currency, excluding FX effect Source: IDC GTI, Oct 17, 2013
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Delivery VehicleMS Excel Dashboard
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The database is delivered to clients through a Dashboard exclusivelydesigned for GTI.
S/W requirements for viewing the dashboard
- Windows XP/Vista/7
- MS Excel
The database covers operator data from all the five regions i.e. APAC, NA, WE,CEE, ME&A . However, can also be delivered as per clients requirements interms of customized geography as mentioned below.
-USA & Western Europe-BRIC Countries
-Canada, Lat Am, CEE, MEA, Japan, AP.
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SnapshotWelcome Page
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Contains Analyst contact infoalong with the introduction
to the database.Instructions on how
to read the pivottables
Contains Glossary forterminologies used in
the database.
M&A Info which has
caused changes in theOperators financials or
any other metrics.
Pivot table interface forRevenues, Connections
and Key FinancialIndicators filtered basedon individual carriers and
Carrier Groups.
Dashboard toobtain
customizedmetrics as per
userrequirements.
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SnapshotTrend Data Revenue
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Product Category refers totypes of services i.e. Wireless,
Wire line & Other (includesother non core income)
Product Category is furtherdivided into Voice, Data,Equipments and Others
(Include TV, ICT, Data Centersetc).
Wire line revenues arefurther split into Residential ,
SMB, & MNC
Carrier Revenues pivot table allows the user to select a particular operator or a group and choose a
specific category and a sub category with in that for a chosen period.
By default the revenues are in Millions of USD & Euro
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SnapshotTrend Data Connections
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Connections are mainly categorized into Wireline, Wireless & TV Subs. And wireline is further classified
into Wireline access lines, Wireline retail broadband subs etc and Wireless into GSM (Prepaid/Postpaid),CDMA (Prepaid /Postpaid) subscribers for all or for the chosen carrier/carrier groups.
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SnapshotTrend Data Financials
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EBITDA, CAPEX andOperating Income are the
thee Key financial Indicatorstracked in GTI.
All the three KFIs arefurther sub categorizedunder Wireless and
Wireline.
EBITDA , Operating Income and CAPEX are the three key financial indicators that are tracked in GTI and
all the three are further sub categorized under Wireless and Wireline.
By default the values are in Millions of USD & Euro
C i G R ki R
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Carrier Group Ranking RevenueDashboard
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Filter Section allows user to
customize the output based onRegion , Currency, Country,Product Category i.e . Wireless
, Wireline etc. and Subcategory which is Voice, Data,
Equipments etc.
The GUI provides the user to modify the end result based on various filters placedon the left hand side and same time comparing the results with the sequential
quarter and the same quarter year before.
It also provides others analysis such as growth rates , market share, ranking andgrowth vs Market along with graphical representation for Group revenue & share &YOY Growth
C i G R ki C ti
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Carrier Group Ranking - ConnectionsDashboard
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The GUI for Connections is some what similar to the revenue one and provides the user to modify theoutcome based on their requirement.
The time period can be selected as either Yearwhere in the data is displayed & compared for the currentyear and the previous one. And when selected as Quarterthe comparison is made for the recent 2 Quartersand the same quarter in the previous financial year.
C i G R ki Fi i l
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Carrier Group RankingFinancialsDashboard
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This particular GUI helps users to quickly know the top 15 companies in terms of Capital spending or
EBITDA or the ones with highest operating income in wireline and Wireless category or the company as awhole.
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Analysts
Mark Winther
Courtney Munroe
Venkatesh Mahale
Ragupathy Vellappa