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22.10.200322.10.2003 Valtteri HietaluomaValtteri Hietaluoma

Market leader strategies:Market leader strategies:

case Soneracase Sonera

Seminar on Mobile operatorSeminar on Mobile operator

strategies and gamesstrategies and games



Agenda Agenda



BarriersBarriers

Entry barriers:Entry barriers:

– Investments, skills and other charges needed to enterInvestments, skills and other charges needed to enter

into business.into business.

Eit barriersEit barriers – !osts on abandoning the product or business!osts on abandoning the product or business

Market e"uilibriumMarket e"uilibrium

– I# #ree entry and eit eists, demand and supplyI# #ree entry and eit eists, demand and supplyshould be in balance $%market e"uilibrium& then pro#itsshould be in balance $%market e"uilibrium& then pro#its

al'ays should be nominalal'ays should be nominal



Barriers and pro#itabilityBarriers and pro#itability

High, riskyreturns

HighHigh

Low, stableReturnsLowLow

High, stablereturns

HighHigh

LowLow

E n t r y B a

r r i e r s

E n t r y B a r r i e r s

Exit barriersExit barriers

Low, riskyreturns

(o' entry barrier(o' entry barrier lot o# competitionlot o# competition lo' returnslo' returns

(o' eit barrier(o' eit barrier stability in supply and demandstability in supply and demand stable returnsstable returns



Market leaders tasksMarket leaders tasks

Epanding the total marketsEpanding the total markets – epansion is risky) #ailure can be #atalepansion is risky) #ailure can be #atal

*rotecting the market share*rotecting the market share

– customer satis#actioncustomer satis#action – "uality"uality – benchmarkingbenchmarking

Epanding the market shareEpanding the market share

– product innovationproduct innovation – market segment innovationmarket segment innovation – distribution innovationdistribution innovation – promotionpromotion innovationinnovation



Agenda Agenda



+emand in MB+emand in MB

di##erent demand in di##erent marketdi##erent demand in di##erent market

di##erent strategiesdi##erent strategies

– in gro'ing mobile phone penetration areas #ocusin gro'ing mobile phone penetration areas #ocus

is on capturing market shareis on capturing market share

– in mature market #ocus is on operations costin mature market #ocus is on operations cost

e##iciency, because A-* #allse##iciency, because A-* #alls

Saturation point is almost reached in EuropeSaturation point is almost reached in Europe – penetration 'ont gro' anymorepenetration 'ont gro' anymore



Supply in MBSupply in MB

-elatively lo' entry barrier-elatively lo' entry barrier – roamingroaming no net'ork investments neededno net'ork investments needed

– lot o# competitionlot o# competition

– A-* 'ill continue #alling A-* 'ill continue #alling

-elatively lo' eit barrier -elatively lo' eit barrier – license can be resoldlicense can be resold

– little employees and in#rastucture neededlittle employees and in#rastucture needed play/o## phase0play/o## phase0

– lot o# eits may occur lot o# eits may occur



Barriers and pro#itabilityBarriers and pro#itability

High, riskyreturns

HighHigh

Low, stableReturnsLowLow

High, stablereturns

HighHigh

LowLow

E n t r y B

a r r i e r s

E n t r y B

a r r i e r s

Exit barriersExit barriers

Mobile operator business

Low, riskyreturns



M1SM1S

high price paid #or licenseshigh price paid #or licenses

hype is over hype is over

M1S breakthrough delaysM1S breakthrough delays payback delayspayback delays



1rends1rends

2ro'th #rom 'here02ro'th #rom 'here0 – #rom out/market#rom out/market

– #rom services#rom services

– by di##erentiating productsby di##erentiating products

– marketing is playing key role in this processmarketing is playing key role in this process

Eits may occur various 'aysEits may occur various 'ays

– mergersmergers – a"uisitionsa"uisitions

– bankcruptciesbankcruptcies



Agenda Agenda



Telia-Sonera´s Group StrategyTelia-Sonera´s Group Strategy

!oncentrate on 3ordic and Baltic region!oncentrate on 3ordic and Baltic region

– boost marginsboost margins

–consolidate positionconsolidate position

– improve operational e##iciencyimprove operational e##iciency

!ustomer/oriented approach!ustomer/oriented approach

– product/ and service o##erings packagesproduct/ and service o##erings packages – user/#riendly servicesuser/#riendly services

– benchmark the European service industrybenchmark the European service industry



Mobile operator4s market shares inMobile operator4s market shares in

5inland 6.7.89975inland 6.7.8997



1eliaSonera 5inland y1eliaSonera 5inland y



1eliaSonera 5inland oy4s gro'th1eliaSonera 5inland oy4s gro'th

areas:areas:

broadband servicesbroadband services

– 2et acces customers2et acces customers

–Start introducing value added servicesStart introducing value added services

mobile data servicesmobile data services

– introduce ne' multimedia person/to/person andintroduce ne' multimedia person/to/person and

content servicescontent services

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