Er det penger i bredb

1
Er det penger i bredbånds-telefoni?Arild Nilsen,
CEO Telio Holding AS
2
Who and what is Telio

• Founded 2003 by VoIP veterans
• Management and advisory board include many of the
  worlds pre-eminent SIP and VoIP experts
• The leading access independent primary line
  replacement VoIP provider in Europe.
• Adjusted for market size, fastest growing VoIP
  provider in the world
• The first and largest Internet Premium Services
  Operator in Norway
• Serving close to 90.000 end users in Norway,
  Denmark and Holland
• Profitable from first year of commercial
  operations.

3
Er det penger i bredbånds telefoni?

• TJA?

4
Hvem tjener penger i bredbåndstelefoni?

• I USA er det mer enn 1100 VoIP operatører
• FÅ ELLER INGEN HAR OVERSKUDD
• I Norge er det ca 35 VoIP operatører
• KANSKJE BARE TELIO SOM HAR OVERSKUDD?

5
Hvorfor er det slik?

• Telio halverte den årlige snittprisen for en
  vanlig telekomkunde når vi startet
• Fra ca 4600 kr/år til ca 2300 kr /år
• Satte standard for nye aktører
• Valg av forretningsmodell er kritisk
• Modell med 0 fastavgift dømt til å mislykkes
• Ingen fastavgift til å drive organisasjonen
• Attraherer de som ringer lite
• Modell med høy fastavgift og gratis ringing
  fungerer
• Gir fastavgift til å drive organisasjonen
• Attraherer de som ringer mye og de får høy verdi

6
Er det mulig å tjene penger fremover?

• Ikke trivielt, men umulig med feil
  forretningsmodell
• Men, ikke nok med riktig forretningsmodell
• Krever god execution dvs både godt management og
  dyktige ansatte
• Med en ekstremt lean and mean organisasjon
• God forståelse av hvor bransjen går og hvilke
  muligheter/trusler
• som IP kommunikasjon gir
• og evne til å implementere endringer raskt
• Telio tilfredstiller disse kriteriene
• Over 30 VoIP operatører i Norge
• De fleste vil dø ut
• eller fusjoneres inn i større selskap fordi de
  ikke behersker alle kriterier

7
Hva tror Telio fremover?

• Er VoIP bare reduserte priser på fasttelefoni?
• Eller er det den fullkomne deregulering av
  telekom?
• Og har vi bare sett starten på endringene?

8
The key drivers of growth of IP

• Technology IP fundamentally changes how the
  different components of a communications network
  relate and interact with each other.
• Money Old network structures were natural
  monopolies. Economic benefits to consumers of
  moving to the open, competitive structure of IP
  are ENORMOUS.

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Internet fundamentally changes howthe parts of a
network relate to each other
This is NOT just another telecom technology
shift
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100 years ago a similar shift happenedin another
communication network!
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Consumers constant search for cheaper and
better is the engine of change

• Voice revenues globally are more than 1000 (one
  thousand !) billion USD per year
• In Norway, Telios pricelist applied on fixed and
  mobile networks would give 10 billion NOKs back
  to the consumer, reducing voice revenues in
  Norway from 30 to 20 Bn NOKs
• Worldwide, this would reduce voice revenues by
  some 30

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The implications for incumbents ?
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No, not the apocalypse, but....

• It is the end of service providers as signaling
  and transport providers
• Internet is the transport provider
• With peer-to-peer SIP even the signaling move
  to the edges
• Success in an open IP based world will come to
  those able to best define the new natural value
  adding roles in different market segments.
• Value add potentials will differ by customer
  segment and evolve over time.
• Customer loyalty must constantly be re-earned
• Being perceived as fair and caring is
  paramount
• Maximizing ARPU may even destroy value !!!

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The business implications of IP going wireless
will be dramatic

• The distinction between fixed and wireless voice
  become meaningless
• Nearly triples available market size
• Make it obvious for consumer that VoIP limited to
  POTS replacement become inferior product
• Make it clear that bundling voice with fixed
  broadband access may not be most natural bundle
• Enhanced competitiveness of access independent
  VoIP providers because separation of access and
  service is built into the genes
• May force cellular carriers to transform
  themselves to wireless ISPs

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The roadmap to an all-IP world
OLD WORLD
NEW WORLD
MVNO
VMO
PSTN replacement xtra IP features
All IP voice - fixed and mobile
VOICE
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Fixed mobil convergence critical part of long
term strategic positioning
All IP fixed-mobile convergence
The sun always shines on IP
Good Vibrations
Fixed line replacement
Born to run
Desperado
Norway
International
Markets
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and the convergence between historically
disparate services will not stop..

• Media convergence
• Convergence between voice, video and text
• Presence awareness
• GPS combined with call screening/status info
• Find me/follow me services
• The network becomes your secretary

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But what about quality of service (QoS)...

• Applications specific QoS issues should be solved
  at the endpoints/in software.
• Network based QoS techniques are all variations
  of emulating circuit switching in a packet
  network! How does that make sense ?
• The cheapest, best and most scalable approach to
  network based QoS is increased bandwidth!

19
and what about stricter regulation......

• Regulation of VoIP sold as replacement service
  is a good thing!
• Telecom is mission critical society
  infrastructure
• VoIP is many things and consumers easily
  confused about what is what
• but...
• Important that the regulation of VoIP does not
  inhibit innovation
• Blueprint of PSTN regulation is bad idea,
  especially with regard to emergency services

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On IP, one business model does not fit all

• If you try to be something for everyone, you risk
  being nothing to anyone gt Know your target
  customers !
• Substitute product requirements very different
  from supplement product requirements.
• An attractive offer for a high volume user very
  different than an offer for a low volume user.
• Important features for a tech savvy user very
  different from a regular John Doe.

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Successfully attracting high volume callers
Minutes usage per day (in and outgoing)
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In short The world order has changed
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Successful execution not easy going forward

• Superior understanding of the technological
  opportunities and challenges of VoIP
• Superior understanding of the market
  opportunities created by IP-networks
• Superior understanding of the threats and
  challenges of moving VoIP to replacement product
• Superior understanding of the sources of revenues
  and costs in both a VoIP and telecom operation
• Extremely targeted market approach 100
  better for 20 of market preferable to 20
  better for 100 of market.
• A managed network
• A no frills low cost operation
• A superior team to execute the above !!!