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8/13/2019 Connectivity RT Presentation
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22ndto 23rdAugust, 2013
Shangri La Hotel
Singapore
A STRATEGY FOR ASEAN
Organiser Co-Organiser
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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
Network ASEAN Forum 2013
CONNECTIVITY
22nd - 23rdAugust 2013
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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 3SNG 130822 - Connectivity ro ... on v10
Connectivity contextHighly dynamic ecosystem with
critical role for ASEAN economic development
ASEAN telecommunications markets dominated by mobile - >2/3 of revenue in most
markets except Singapore
Continued strong growth rates beyond mobile penetration rates of 100%, with slight declines
in ARPU
Region characterized by high variance in market structure- by ARPU levels, pre- vs.
postpaid, levels of data usage/smartphone ownership
Competition tends to be highly concentrated around top 3 players (>80% share), still with
strong role of domestic-only telcos with select regional players
Ongoing massive shift to data and 3G on the back of rapidly declining smartphone prices;
emerging markets to date showing better monetization on traffic than developed markets
Fixed connectivity in most markets at low levels of development with
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Agenda
International roaming
OTT in ASEAN
New services - Mobile money/virtual CC; potentialfor mobile advertising
Regulatory maturity in ASEANspectrum,
interconnect, local content requirements
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Roaming charges in ASEAN countries are significantly
higher than in Europe and vary across Telcos
Data charges(per MB)
Voice charges- calls made(per min)
Voice charges- calls
received(per min)
SMS charges
Range
n/a
Note: Charges are for usage within/across ASEAN countries; charges vary based on call or usage destination; charges exclude VAT
Source: Telco websites
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ASEAN
APT
APEC
Roaming regulations in ASEAN would need to be
strengthened to reduce charges
EUROPES REGULATION ON ROAMING IS HOLISTIC &
WELL-ENFORCED
INITIATIVES ACROSS ASIA NOT COMMONLY
ENFORCED, THUS LESS IMPACTFUL
Holistic regulatory approach to international data
roaming services
Protect consumer interest
Good compliance in all member states
Ofcom, UK communications regulator, helps enforce
roaming regulation
2009
2011
2007
Roaming III: Caps retail prices for data roaming
- Customers can sign up for a mobile roaming contract withforeign operators while traveling
Public consultation on 2007 regulation; results not
satisfactory
Roaming II: Cut in SMSand wholesaledata
roaming charges
- Cut-off mechanism available once bill reaches50
Roaming I: Cap wholesale & retail charges for voicecalls
Note: ATRC: ASEAN Telecommunication Regulators Council; APT: Asia Pacific Telecommunity; APEC: Asia Pacific Economic Cooperation
Source: Ovum Regulatory Status of International Roaming
Adoption of the Addendum of ATRC*
Intra-ASEAN Mobile Roaming Rates to
reduce roaming charges; countries to
implement when ready
Bilateral initiatives common
- Malaysia & Singapore
- Malaysia & Brunei
- Singapore & Brunei
1
2
3
Addresses transparency measures &
bill shock
Aims to remove regulatory barriers
that cause high input costs for roaming
Issued guidelines on provision of info
to consumerson roaming &
substitute technologies
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Agenda
International roaming
OTT in ASEAN
New services - Mobile money/virtual CC; potentialfor mobile advertising
Regulatory maturity in ASEANspectrum,
interconnect, local content requirements
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OTT services in ASEAN markets are growing;
likely a threat to SMS revenue
SMS AS A SOURCE OF REVENUE HAS BEEN
DECLINING LIKELY DUE TO GROWTH IN OTT SERVICES
Many market drivers supporting substitution to OTT
services
Increasing Smartphone penetration
Low pricecompared to regular voice
Ease of access
- Apps and app marketplaces
- Telcos start to bundle VoIP (in particular smaller Telcos infragmented markets)
Technological development
- Improved sound quality on 3G networks
- Deployment of high capacity all-IP networks (e.g. LTE)
- Availability of alternative networks (Wi-Fi)
- Features e.g. video conferencing
Net neutrality regulation undermine attempts to block
VoIP in certain markets
Increase in consumer demand as users of dedicated
VoIP expect mVoIP
Note: Non-voice revenue include data, messaging & VAS; does not include all Telcos in each countries
Source: Wireless Intelligence; Gartner; Ovum; Informa
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ASEAN players are expanding networks, partnering
with OTT players & pushing apps usage
Focus on network upgrades,innovative pricing and productmix to increase data uptake
OTT threat mgt. primarilythrough partnerships and ownapp stores
Network expansion (3G)
- >50% CAPEX in 2011 allocated for
this
Launched money remittanceservice, tracking &monitoring system etc.
Network expansion (3G)
- Contracted NSN in 2012
Expanding mobile data and
VAS offerings like app store,music, games etc.
INDONESIA SINGAPORE
*Rich Communications Services provide similar r ich-featured messaging standards as OTT apps
Source: Analyst reports; Bain analysis
Expanding its LTE network
Working with alliance partnerVodafone Group on aninteroperable RCS* platform
Expanding VASofferingslikeNFC movie ticketing service, e-bookstore, NFC app etc.
Upgrading its 4G & LTE network
Launched new VAS offeringssuch as several mobile apps,mobile payment service usingNFC, e-book service etc.
MALAYSIA
Focuses on content bundling topromote wireless data services
Offers deals with OTTs such asSkype & Deezer (music streamingservice)
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Agenda
International roaming
OTT in ASEAN
New services - Mobile money/virtual CC; potentialfor mobile advertising
Regulatory maturity in ASEANspectrum,
interconnect, local content requirements
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A significant portion of the ASEAN population is still not
served by the formal financial sector
Note: Banked population defined as percentage of the population 15 years and older that has a formal relationship with a bank or other financial institution via a current
savings account, checking account, credit card or a combination of these products
Source: Euromonitor
Banked
Unbanked
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Rapid growth in mobile usage presents a unique channel to
reach both banked and unbanked segments
Source: USAID, Sybase, Bain analysis
In contrast [to the banking sector], the
Indonesian telco sector has been extremely
effective in moving down market. Combining
FS expert with the broad market capabilities of the
mobile telco channel presents a unique
oppor tuni ty for govt and commercial entities todevelop new business opportun i t ies
- USAID Report
With the Indonesian population at
approximately 250 million people, these new
mob i le banking services will help us attract new
customers and expand our market share
significantly
- Strategy & Finance DirectorCIMB Niaga
EXAMPLE INDONESIA - MOBILE PENETRATION
OVERTOOK BANKING PENETRATION SINCE
06
PRESENTING AN OPPORTUNITY TO TARGET
BOTH BANKED AND UNBANKED SEGMENTS IN
INNOVATIVE WAYS
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Opportunities in mobile money along three categories of
usage
Transactions Services Mobile Commerce Mobile Banking
Source: Bain analysis
1 2 3
Utility bill payments
Remittances (domestic,
international) Cash-in/cash-out
- Via banks, retailers, agents
- Including government cash
payments
Stored value account
Mobile top-up
Mobile wallet-to-wallet
transfers (P2P)
M-Wallet
Traditional Payments
- E.g., online shopping, online
games, media, virtual products
Mobile consumer services
Mobile shop/portal services
Mobile Banking
Banking inquiries
- E.g., account balances, SMS
alerts
Mobile/online savings
accounts Mobile/online loan
applications and
disbursements
Insurance
- E.g., customer loyalty, mobile
ads, coupons and offers
Mobile marketing services
- New mobile merchant payment
technology (mobile POS, P2P on
the spot, )
Mobile merchant services
- New mobile consumer payment
technology (NFC, QR code, )
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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 14SNG 130822 - Connectivity ro ... on v10
Agenda
International roaming
OTT in ASEAN
New services - Mobile money/virtual CC; potential
for mobile advertising
Regulatory maturity in ASEANspectrum,interconnect, local content requirements
R l t h ll ASEAN i il ith t ti l
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Regulatory challenges across ASEAN similar with potential
for learning from other marketsselect examples
Spectrum Interconnect Fiber rol lout
Various approaches
to shaping
competition, from
focusing on few key
players to fostering
new entrants
Increasing emphasis
on assigning
common spectrum
blocks across ASEAN
to facilitate
connectivity (e.g.
digital dividend blocks
by 2020)
General trend to
reduce interconnect
charges across
markets, e.g. recent
efforts in Thailand,
which typically enable
more level playing
field for challengers
Few exception like
SMS Interconnect in
Indonesia to reduce
amount of spamming
Loc al content
Emerging trend to
push local economic
participation in
technology sectors
related to telecoms,
with efforts particularly
in Indonesia
Questionable net
benefits as
competition gets
disrupted
Only Singapore and
Malaysia with broad
rollout to date
Key future challenge to
enable broad-based
rollout in other ASEAN
markets, where telco
economics often do
not justify
investments but
significant multiplier
benefits for other
sectors are expected
various forms of
public/privatepartnerships can be
used
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THANK YOU
Organiser Co-Organiser
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