3 years later

1

• 3 years later
• Telecoms current state of health
• IDATE International Conference 2003
• Yves GASSOT

2
Three years after the bubble burst... Wheres the
growth?

• Back in the black

Net profits for the worlds leading carriers
(Billion EUR)
Source IDATE
3
Evolution of European carriers net debt
80 000
70 000
60 000
1Q02
50 000
2Q02
3Q02
Million EUR
40 000
4Q02
1Q03
30 000
2Q03
20 000
10 000
0
Deutsche
France
British
Telecom Italia
Telefónica
KPN
Telekom
Telecom
Telecom

4
Three years later...

• ... But a sharp decline in growth

Evolution of leading carriers TO
(Billion EUR)
Source IDATE
5
Declining growth rates

• North American market stalled...
• ... a sharp decline in Europe...
• ... but still steady growth in Asia-Pacific
• Evolution of the world market by region
• (constant exchange rates)

Source IDATE
6
The China effect
China cellular subscribers and mobile density
7
Diminishing growth

• Market components

Source IDATE
8
Successful migration to 3G
Source IDATE
9
Fixed revenues and consumption dropping

• The internet effect... and fixed-mobile
  substitution

Source IDATE
10
What about data?

• ... Data market value growth on a downward trend
• Evolution of the world market, by segment
• (constant exchange rates)

Source IDATE
11
Broadband a growth relay?

• Tremendous growth of broadband subscribers,
  thanks notably to lower tariffs.
• Growth of broadband subscribers

Source IDATE
12
Broadband a growth relay?
Broadband subscribers (DSL Cable) per 100
inhabitants
Source IDATE
13
Conclusion (1)

• Spectacular financial revival
  
• Clear decline in growth rates
• Threat of telecoms commodization?
• ... But considerable potential contingent on
• stepped-up investments in innovation,
• more user-centric marketing (streamlined
  segmentation, bundling, user-friendly, pricing)
• pro-active partnerships with other ICT players
  (as opposed to being just a pipe manager)
• regulation geared to efficient and durable
  competition

14
Conclusion (2)

• Hence the theme of this years Conference
• Telecom - Internet - Media Advantage Services! 
• Illustrated by four key areas for carriers in the
  5 coming years, namely
• Winning Services 1 Corporate and business
  markets How to increase revenues
  when tariffs are dropping?
• Winning Services 2 Beyond telephony the next
  generation in Personal
  Communication
• Winning Services 3 Mobile services in the age of
  3G
• Winning Services 4 Always on at home who will
  pay for what? Or how to
  create value on broadband networks?