mobile business overview
TRANSCRIPT
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SingTel Investor Day:Mobile Business Overview
Michael Smith
Managing Director, Consumer11 July 2011
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Forward looking statements - important note
The following presentation may contain forward looking statements by the management of SingTto financial trends for future periods, compared to the results for previous periods.
Some of the statements contained in this presentation that are not historical facts are statements of fwith respect to the financial conditions, results of operations and businesses, and related plans and olooking information is based on management's current views and assumptions including, but not limeconomic and market conditions. These statements involve known and unknown risks and uncertaintieactual results, performance or events to differ materially from those in the statements as origistatements are not, and should not be construed as a representation as to future performance
In particular, such targets should not be regarded as a forecast or projection of future performanceIt should be noted that the actual performance of SingTel Group may vary significantly from such targets
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1 Market overview
3 Future opportunities & strategy
2 FY11 performance
Today
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1 Market overview
3 Future opportunities & strategy
2 FY11 performance
Today
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Source: JP Morgan
Growth in the Australian telco market is driven by mobile
TELECOMMUNICATIONSMARKET REVENUE
MOBILEMARKET REVENUE
CY10CY09CY10CY09
UP2.2%
UP8.5%
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Source: Merrill Lynch
YOY Mobile Subscriber Growth - CY10
2.7%
5.2%
9.8%
15.0% 15.0%
GermanySpain Italy UK France
YOY Data Revenue Growth
-4.8%
0.5%
2.6%
4.4% 4.4%
6.0% 6.2%
9.8%
UK
USAFranceSpainItalyGermany AustraliaSingapore
underpinned by leading subscriber and strong datarevenue growth amongst worlds developed economies
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Key drivers of mobile service revenue growth
Source: JP Morgan
52.4%
Dec-10Dec-08
48.6%
Jun-09 Dec-09 Jun-10
54.4%
49.2%
51.4%
Mobile share of total Telco Revenue
Fixed to Mobile Substitution
CY09
14,733
9,448(64%)
5,285(36%)
CY08
13,515
9,311(69%)
4,204(31%)
CY07
12,182
8,853(73%)
3,329(27%)
CY06
11,131
8,569(77%)
2,562(23%)
Voice Revenues ($Data Revenues ($M)
MBB and handset data grow
UP9%
CAGR
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Source: Optus estimon market disclosu
142837580108
774641618
738
560
Dec-10June-10Dec-09June-09Dec-08
SEQUENTIAL CHANGE IN MOU (MILLIONS), SIX MONTHS TO
SEQUENTIAL CHANGE IN BROADBAND SUBSCRIBERS (000), SIX MONTHS TO
Fixed
Mobile
Sustained fixed to mobile shift for both voice and data
Source: JP Morgan
-862-1,043
-873-634
-855
1,639
1,0161,145
5981,050
Dec-10June-10Dec-09June-09Dec-08
FixedMobile
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Smartphone penetration drives growth in use of data products
58%
74%68%70%
87%89%91%
16%
28%
54%49%50%
85%88%
4%9%
23%27%
11%
57%
78%
InternetPhotosSMS GPS Nav.EmailMMSGames
Non-internet capable mobile phone
Internet capable non-smartphone
Smartphone
12%
36%
73%
95%
18%
50%
77%
95%
Mobile Phone Games ConsoleLaptop/NetbookPC/Desktop eRor
20102009
DEVICES EVER USED TO ACCES2010 vs 2009
FUNCTIONS USED ON MOBILE PHONES,SPLIT BY TYPE OF PHONE OWNED 2010
Source: Nielsen The Australian Online Consumer Report, February 2011** Access via devices like tablets, PVRs / internet enabled TV was not captured in 2009
**
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Consumer Confidence
However various headwinds are emerging
CAGR:
-3%
Dec-10Jun-10Dec-09Jun-09Dec-08
A$/Minute (Mob industry minutes / Pre+Post revenue, ex WBB)
* A$350, + unlimited on-net calls
Westpac Consumer Confidence Index - June 2011
555
88 74
Dec-10
Source: Company disclosures, Optus analy** VHA branded net adds
Mobile net adds for the quarte
Investment in the resources sector is picking up strongly and the outlook remains verypositive... In other areas, cautious behaviour by households are having a not iceabledampening effect.Statement by Glenn Stevens, Governor RBA: Monetary Policy Decision (5 July 2011)
Pricing PressureCompetitive Aggre
**
Increase in plan inclusions
$250
$350$4
50
Included value (A$)
A$49Mar-10 A$49Mar-10A$49Mar-11A$45Mar-11
Umiecses&
sanwk
*
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1 Market overview
3 Future opportunities & strategy2 FY11 performance
Today
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12.5%
14.3%
11.0%10.3%
6.7%
Mar-11Sep-10Mar-10Sep-09Mar-09
OPTUS MOBILE SERVICE REVENUE GROWTH (YoY)
Service revenue growth softens as competitors discount price inclusions increase
Note: All numbers are HY
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Prepaid being impacted by a number of industry dynamics
4,307 4,359 4,404 4,342 4,295
Mar-10 Sep-10Jun-10 Mar-11Dec-10
Optus Subscriber Growth Prepaid (000)
Prepaid subscriber
growth under press Industry prepaid to postpaid Highly competitive market:
Telstras subscriber push
New competitors (e.g. Leb
Vodafones Infinite offe
Higher churn from Optus Int
for Less customers1
+1% +1% -1% -1%
24.825.825.2
26.4
23.6
20
25
30
Dec-10 Mar-11Sep-10Jun-10Mar-10
Optus Prepaid ARPU (A$) for quarter
1: International Calls for Less plan was launched in N
offering attractive rates for international calls
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but Postpaid continues to grow
POSTPAID SUBSCRIBERS (000s)
+139 (+3%) +143 (+3%) +150 (+3%) +151 (+3%)
WIRELESS BROADBAND SUBSCRIBERS (000s)
4,7734,6224,4734,3304,191
Mar-11Dec-10Sep-10Jun-10Mar-10
+88 (+10%) +101 (+10%) +92 (+8%) +94 (+8%)
POSTPAID ARPU YoY GROWTH EXCLUDINGWIRELESS BROADBAND SUBSCRIBERS
Q1 FY11 2%
Q2 FY11 5%
Q3FY11 2%
Q4 FY11 2%
1,2821,1881,096994907
Mar-11Dec-10Sep-10Jun-10Mar-10
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Smartphone penetration and innovative data services driving data grow
OPTUS DATA SHARE OF SERVICE REVENUE
3%
5%
9% 13%18%
2011
40%
23%
2010
36%
23%
2009
33%
24%
2008
28%
23%
2007
24%
20%
SMS % of Service Rev
Non SMS Data % of Service Rev
Note: All numbers are FY end
389,000 live streamsof the 2010 FIFA World
Cup matches
79% increasein Australian Open
Tennis live streaming
Goo
Helping SMBs managetheir communications
Unlimited mobileaccess, within
Australia, to these sites
http://www.google.com.au/imgres?imgurl=http://mobile.optuszoo.com.au/cmsweb/static/images/site/tvandvideo-100x85.png&imgrefurl=http://mobile.optuszoo.com.au/cocoon/content/displayStatic.do?file=static/ausopen.html&usg=__4-DRic2ZMLTeo58r8ReMFFi6KAk=&h=85&w=100&sz=8&hl=en&start=7&zoom=1&tbnid=cTi8YgbLT32F7M:&tbnh=70&tbnw=82&ei=PkjwTe_hHo6SuAO7rfGYBA&prev=/search?q=optus+TV&hl=en&safe=active&sa=N&gbv=2&tbm=isch&itbs=1 -
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OPTUS MBB SUBS (000)
111
486
907
1,282
Mar-11Mar-10Mar-09Mar-08
+375
+421
+375
BROADBAND UPTAKE
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8 9 13
AVERAGE DOWNLOAD TIMES 3MB SONG (SEC)
OPTUS MOBILE CAPEX (A$ MILLION)
575
536495
201120102009
Note: All numbers are FY end
8
AVERAGE UPLOA
Sydney Morni
30 sitesand met
Data tra Tested o
Increased investment leading to network performance improvemen
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Weve deliveredcompetition to
more than14 townsin the last year
Our networkcoverage reaches
97% ofAustralians
Weve expanded
covering
over700,000km2
Fibre backhaul to
over 80% of
metro sites
Weve delivered
1000
in-buildingsolutions,
improving coveragefor our metro
customers
Over
660 mobilesites built
during FY11
In the last three yearsweve invested over
$1.6 billionin the Open
Network
FemtocellLeveraging
fixed network
Optus the leading challenger network
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The Customer Experience program continuesto deliver improvements for our Mobile Customers
Reduction in numberof technical enquiries
through a simplified activatioprocess in Mobile Billing andGeneral enquiries
Faster delivery of onlineorders for mobile handsets
Reduction in early tenurechurn in Post Paid Mobile
Outperforming our major competitor in key CE metrics
+5%
+4%
+7%
Activation
Billing
CustomerService
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1 Market overview
3
2 FY11 performance
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Future opportunities & strategy
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Driving a breakthrough in Customer Experience
Driving a Customer-centric attitude
Fix vital serviceexperience Design for LifeProduct is the Network
Understand the CustomerLink Cust
Experience tClosed Loop Feedback
We are resolving the keyCustomer pain points.
We will continue to investin systems and our people toexceed customer expectations.
We will continue to invest in our networkand will work to close our customersperception gap of our performance.
We will empower our people to drive continuousimprovement by ensuring Customerfeedback is achieved on a timely basis.
We will drive loyaltacquisition, reterewarding of our
We will link CExperience to pe
We will breakout in customer experience
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Device leadership across handsets, tablets and other devices
Number of App
Source: Samsung Secu
10
20
50
iOS
Windows
Blackberry
Android
Symbian
http://images.google.com.au/imgres?imgurl=http://pulse2.com/wp-content/uploads/2009/02/kindle21.jpg&imgrefurl=http://pulse2.com/2009/02/28/the-text-to-speech-feature-on-the-kindle-2-is-legal/&usg=__C8FUWFE_gxCtAihOigM2AFxwgUQ=&h=504&w=504&sz=58&hl=en&start=34&um=1&tbnid=OyDHAi1btQhlcM:&tbnh=130&tbnw=130&prev=/images?q=kindle&ndsp=18&hl=en&sa=N&start=18&um=1 -
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Deliver relevant and personalised digital services to our customers
Lead in online digital experiencewith products and VAS of
RELEVANCE
Optus Smart Safe
secured data accessible on any device easily shared with friends and family
Google Apps Partnership
helping small medium businesses manage range of integrated business tools accessible via a single web portal on a ran dedicated IT helpdesk offering up to 24/7 s
Optus Smart Safe Optus Call BuddyOptus Now
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Leverage distribution to compete
Mar-112009
Branded Retail
Metro
Regional
Mar-11Mar-10
+241
Optus Distribution Landscape
+41
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FItran
COMPLETEupgrade
to HSDPA+
CONTINUEregional
expansion
INVESTin metro
network depth
Mobile 2012 and beyond
Increase our investment in the mobile network
With the continuing significant investment, Optus is the only carrier capaof challenging the incumbent telcos network on both coverage and spee
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Video: Network
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SingTel Investor Day:Mobile Business Overview
Michael Smith
Managing Director, Consumer
11 July 2011