amb 13 03-14 - allan greve - tefficient
DESCRIPTION
Presentatie van Allan Greve (Tefficient) op bijeenkomst Ambassadors, 13 maart 2014.TRANSCRIPT
www.tefficient.com 13 March 2014
How to measure, compare and improve efficiency within telecoms
Benchmarking – and the tale of a wing clipped Dutch opportunityPresentation to Ambassadors of Telecom13 March 2014
tefficient ABAllan [email protected]+45 2546 0055
www.tefficient.com 13 March 2014
Content
Why do we benchmark and how?
• Efficiency and strategy – goes hand in hand• What to measure• How to interpret the measurements
Did greed wing clip Dutch mobile?
• Subscription development in the Netherlands• Mobile data traffic development around the world• Traffic unit pricing and usage around the world• The dilemma in the Netherlands – if there is one
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www.tefficient.com 13 March 2014
How to measure, compare and improve efficiency within telecoms
But first…
…what is tefficient?
www.tefficient.com 13 March 2014
How to measure, compare and improve efficiency within telecoms
An international efficiency specialist
Provides telecom operators and -suppliers with analysis, benchmarks, consulting and coaching
Inventor of
www.tefficient.com 13 March 2014
How to measure, compare and improve efficiency within telecoms
Why do we benchmark and how?
www.tefficient.com 13 March 2014
What is operational efficiency?
Less Same More Muchmore
Less
Same
More
Muchmore
You are here
Input
Output
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www.tefficient.com 13 March 2014
How to improve operational efficiency?
• There are different ways to improve operational efficiency
• Not all of them mean using less!
Less Same More Muchmore
Less
Same
More
Muchmore
You are here
Input
Output
More for less
More for
same
Much more for
more
Same for less
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www.tefficient.com 13 March 2014
Two questions
Where are you?Where do you want to get to?
”Where are you?” is answered by analysis & benchmarking”Where do you want to get to?” is answered by strategy
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www.tefficient.com 13 March 2014
To some people…
Efficiency=
Low unit cost
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www.tefficient.com 13 March 2014
If it was so…
Apple12m to 28.9.2013
NokiaDevices & Services
2013
Net sales 170910 MUSD 10735 MEUR
Gross profit 64304 MUSD 2209 MEUR
Operating incomeOperating profit (non-IFRS)
48999 MUSD -590 MEUR
Operating margin % 28,7% -5,5%
OPEX 121911 MUSD 11325 MEUR
Units sold 264,010 M(PCs, iPod, iPhone, iPad)
250,000 M(Estimate: Q1-Q3 annualised)
OPEX per device (=unit cost)
462 USD 45,3 EUR = 62,1 USDEfficient
?Inefficient?
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www.tefficient.com 13 March 2014
What is efficiency?If it isn’t low unit cost?
• Efficient operators = those with an effective strategic differentiation• Lowest price might well be an effective strategic
differentiation• Others might be:
• Widest sales channel• Widest range of products• Best brand• Best content partnerships• Best customer service• Best network quality• Widest network coverage• Most innovative products• Simplest-to-use products• …
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www.tefficient.com 13 March 2014
Remember
It isn’t Efficiency vs. strategic differentiationIt is Efficiency through strategic differentiation
When you compare efficiency, make sure to take the strategic differentiation into account!• Otherwise Nokia might look more efficient than Apple
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“…differentiation arises from both the choice of activities and how they are performed”
Michael E Porter: "What is Strategy?", Harvard Business Review, November 1996
www.tefficient.com 13 March 2014
Measure a variety of KPIs
Input KPIs• OPEX• CAPEX• Headcount
Output KPIs• Revenue• Customers• Performance• Quality• Innovation• Growth• …
Load/complexity KPIs• Customer behaviour• Country characteristics• …
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tefficient’s benchmark KPIs
Revenue 81
OPEX 155
CAPEX 16
Productivity 132
Subs & channels 77
Performance 47
Load 51
Quality 7
Innovation & growth
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Total 577
Input data points (maximum)
Headcount (2013) 81
Subs & channels (2012, 2013)
104
Revenue & costs (2012, 2013)
105
Size & performance (2013) 64
Total 354
www.tefficient.com 13 March 2014
Interpret the results in the light of the strategic differentiation
Quantitative analysis
Peer groupdata
Worse
Typical
Better
Qualitative analysis
Strategic
differen-tiation
Worse than peers
Better than peers
In line with strategy
Not in line with strategy:
Overdoing
Potential overspend
In line with strategy:
Deliberate choice
Not in line with strategy Issue!
Consequence of strategy, not of inefficiency
Your KPIs• Input• Output• Load/
complexity
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www.tefficient.com 13 March 2014
How to measure, compare and improve efficiency within telecoms
Did greed wing clip Dutch mobile?
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Characteristics of the Dutch mobile market• Focus on handsets rather than services• SIM-only is offered, but not prominently• Preference for binding customers on 24
month contracts (EU may dictate 6 month contracts - see tefficient analysis)
• High level of subsidisation• Price differentiation in mobile data on both
speed and volume
Difference between SIM-only and with subsidised handset is 26 EUR per month.
Equates to 624 EUR over the contract length (price of the handset)
www.tefficient.com 13 March 2014
Mobile market stable, but
Subsidisation has driven contract share
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Source: tefficient public analysis 18 December 2013 (download)
High smartphone penetration in NL
But low mobile data usage
What was the point in driving smartphone
penetration with high subsidisation?
Vodafone reports 59,6% smartphone penetration
December 2013T-Mobile and KPN believed to be at similar
levels
France in a similar situation
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High traffic prices may be successful in a monopolistic market…
Logical relation – high traffic prices and low traffic
1 traffic unit = 1 voice minute, 1 SMS or 1 MB mobile dataSource: FY2012 reported data (not all countries have reported FY2013 yet, hence the slightly old data)
ARPU = 20 EUR
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But mobile is not monopolistic…• Mobile became synonymous with expensive in
NL• Mobile users found alternatives…• Skype• WhatsApp• Wi-Fi (e.g. Homespots)
• …and they got used to it• Operators tried to earn on the alternatives (e.g.
charge for Skype access) but were slapped by the parliament
• Dutch operators now left in a dilemma - or are they?• Will traffic come if traffic prices are reduced?• Or are Dutch mobile operators happy as it is now?
www.tefficient.com 13 March 2014
Helpful tools by tefficient
Efficiency Index Holistic efficiency benchmark
Market analysis
You
300 200 100 0
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Analyse and learn other markets
2nd opinion
“Know your customer”Latest from tefficient:• Shared plans and
data monetization• Quad-play• “Know your
customer”
www.tefficient.com 13 March 2014 28
www.tefficient.com 13 March 2014
How to measure, compare and improve efficiency within telecoms
An international efficiency specialist
Provides telecom operators and -suppliers with analysis, benchmarks, consulting and coaching
Inventor of