Walking on Hot Rocks

1
Walking on Hot Rocks D
ick Simpson, CEO, REACH
2
Overview of a Disrupted Industry

• 1990s
• Large Cash Flows
• Infrastructure Assets

3
International Connectivity
Trans-Pacific Lit Submarine Cable Capacity,
excluding US-Australia cables
4
The Perfect Storm
5
Bright Lights
6
Wireless Opportunities

• China
• 1.2 billion people
• 15 wireless penetration
• 60 million customers per year

• Vietnam
• 85 million people
• 2 wireless penetration

• Indonesia
• 200 million people
• 3-4 wireless penetration

• India
• 1 billion people
• 1 wireless penetration

7
Broadband
Broadband and mobile growth in the United States
(millions)
Source ITU World Telecommunications Indicators
Database
8
Broadband Penetration
21
SOUTH KOREA
10
11.5
CANADA
JAPAN
15
HONG KONG
9
Where is the Value Moving to?
10
Focus on the Customer

• Greatest asset customer
• relationship
• Therefore, get closer to
• customers

11
Re-think Cost Base

• Cost structure
• ROI
• Core business
• International network

12
Focus on Core Business

• Do you need to own
• the asset or have the
• use of it?
• Do you have the scale
• to go it alone?

13
Quote
Some companies have figured out that the
network doesnt matter anymore. For the last 100
years, telcos have believed that their business
was owning and operating a complex mesh of wires
and switches. Now,theyre beginning to realize
that their true job is helping people
communicate. And their focus has to shift from
managing infrastructure to making sure customers
are satisfied. Companies still split along
technology lines are missing the point.
(BusinessWeek, October, 2003)