Royal KPN NV · EURONEXT:KPN
Royal KPN NV — Investor Presentation (June 2005)
40 slides from Royal KPN NV's investor presentation, Jun 21, 2005
Slide 1: VoIP Seminar
VoIP Seminar 21, 22 June 2005 Amsterdam / London
Slide 2: Safe harbor
Safe harbor Certain statements contained in this presentation constitute forward-looking statements. These statements may include, without limitation, statements concerning future results of operations, the impact of regulatory initiatives on our operations, the OPTA investigation into discounts giv
Slide 3: Agenda
Agenda • Marcel Smits • KPN VoIP strategy • Paul Hendriks • Network and Operations • Consumer and Business VoIP propositions • Marcel Smits • Regulatory landscape • Conclusion •Q & A 3
Slide 4: KPN VoIP strategy
KPN VoIP strategy Marcel Smits CFO
Slide 5: The cornerstones of our strategy
The cornerstones of our strategy Attack Defend Exploit Leadership of converging communications market 5
Slide 6: Developments in other countries indicate that VoIP uptake could be significant
Developments in other countries indicate that VoIP uptake could be significant Key VoIP drivers in other countries • Broadband penetration • IP VPN penetration • Broadband competitive landscape • Regulatory attitude towards incumbent • Price levels and tariff setting • Installed (hybrid) IP PBXs • I
Slide 7: Structure and shape Dutch market
Structure and shape Dutch market Most dynamic and competitive in Europe Trends impacting revenue in Dutch telecom market Mobile-only households1 Broadband penetration2 12% 45% 6% 8% 27% 15% 2002 2003 2004 2002 2003 2004 A battle on several fronts Voice battle Broadband battle Regulatory environment
Slide 8: Netherlands has highest broadband penetration
Broadband penetration in EU1 Netherlands has highest broadband penetration Broadband penetration per inhabitant, cable + DSL + other (fiber) 20% 17.9% 18.4% 16.2% 15.0% 12.6% 11.2% 10.1% 10.3% 10% 8.4% 8.5% 8.3% 7.7% 0% Finland Netherlands Spain Italy Germany Sweden Belgium Denmark Portugal Austria
Slide 9: Increasingly competitive VoIP offerings
Increasingly competitive VoIP offerings Segment Key players Comments • Many competitors Corporate compete across the C O L T individual market segments Large • Emerging VoIP market offers entry for new competitors Medium accounts Small accounts Consumer / SoHo 9
Slide 10: Business market – Focus on Access Anywhere and TCO
Business market – Focus on “Access Anywhere” and TCO • Access Anywhere, across several dimensions – Application – Service – Device – Time – Place At home On the move Applications Any application, Any service, Any device, Any time, Any place WWW Head office Internet • Total Cost of Ownership – Lower
Slide 11: Consumer market
Consumer market What behavior do we currently observe • More MSN minutes than voice minutes in the Netherlands • Teenagers interacting in groups on the Internet • Increasing number of web cams • Promising results new fixed devices • Security is imperative More dimensions to communication exist and m
Slide 12: Technological developments enable VoIP
Technological developments enable VoIP • Increases efficiency / cost reduction – Platform reduction / rationalization – IP based networks are more cost efficient • Increases functionality – Relevant services added to plain calling – Quality of Service – Allows for better security management • Reduce
Slide 13: Now is the time to introduce VoIP
KPN strategy: Go for VoIP • Developments in other countries indicate that VoIP uptake will be significant • Structure and shape of the Dutch market • Consumer and business customer behavior indicate nascent demand • New technology is available and offers only upside to the customer • More and more c
Slide 14: Network and Operations
Network and Operations Paul Hendriks Programme manager VoIP
Slide 15: All over IP, IP over All
All over IP, IP over All A new world is emerging All IP is the enabler to achieve • New revenue streams based on a new service model • Cost reductions through rationalization of the portfolio and platforms Applications and services Applications Services IP-Edges All over IP, IP IP over All Fibre tra
Slide 16: Benefits of new technology
Benefits of new technology Introducing a new service model and rationalizing portfolios and platforms New service model Rationalization ‘Stovepipes’ • No more ‘stovepipes’ • Almost any current • Decoupling of service will be phased applications, services, 2005 out networks and devices • Only applica
Slide 17: In 2005 start of NextGen, All IP infrastructure
In 2005 start of NextGen, All IP infrastructure Restructuring Figurative 2005 - 2006 Service Voice Service Platforms IP VPN Internet Layer Leased Lines Core Voice ATM SDH MPLS Core network Optical Networking IP edge Voice Leased ATM Epacity IP edge IP edge Edge Switching Line edge edge Fast Internet
Slide 18: All IP Network in 2010
All IP Network in 2010 Restructuring Figurative 2007-2010 2007-2010 changes Service Single Service Multi Play Services Platforms Delivery and Layer Control Platform Core Single Core MPLS Core Network based on network Ethernet Optical Networking SDH terminated Edge ATM terminated Ethernet Edge First
Slide 19: Consumer and Business VoIP propositions
Consumer and Business VoIP propositions
Slide 20: InternetPlusBellen
In a complex world KPN makes VoIP simple and secure Customer’s remarks ? • Please explain VoIP to me… • Make it easy for me… • Take away my risks… • I’m trusting KPN… • KPN’s offer is compelling… KPN introduces in the consumer market InternetPlusBellen € 34.95 per month 20
Slide 21: Unique selling points
Unique selling points Simplicity as a distinctive hallmark • Flat rate (Telephony and broadband internet access) • Reliability (KPN’s network, security, number portability) • All inclusive (Home installed by KPN, helpdesk, free services) • Convenient (High cost control, Triple Play with TV) • Additi
Slide 22: Simplicity = Experia Box
Simplicity = Experia Box Dial-up • Keep current phone number and phone • Basic services such as Voicemail and Caller Identification Video calls • With fixed video phone or PC • Also from and to UMTS phones Experia Box Wireless Internet • Four e-mail addresses, webmail • Newsgroups, virus scan, spam
Slide 23: Simplicity = transparent tariffs
Simplicity = transparent tariffs Unlimited ADSL (800 kb) Option and unlimited calls in the Including unlimited evening calls € 2.50 extra weekend to all fixed line numbers in the Netherlands € 34.95 Option Always unlimited calls Allways unlimited calls to other InternetPlusBellen subscribers € 10 ex
Slide 24: Product offering of key competitors
Product offering of key competitors Company Offer Message Communicated price Telephony for TV Combine and benefit Subscription calls from € 9.95 customers Calls and internet package from 24.95 (ADSL speed 512 kbs, excl. metered traffic) Telephony for internet Cheap telephony Subscription calls fro
Slide 25: Distribution through multi-brand ISP approach
Distribution through multi-brand ISP approach High Price ADSL Direct Low Low Value High 25
Slide 26: Upscaling the VoIP consumer proposition along several dimensions
Upscaling the VoIP consumer proposition along several dimensions 2005 Q2 Q3 Q4 ISP’s •Additional phone numbers •Teleconferencing •Chatting •Video calls Services •E-mail and voicemail •Secure wireless network •IP TV •E-mail black •Voicemail •ADSL2+ and white list •Below the line marketing •Above the
Slide 27: Revenue building blocks
Revenue building blocks Illustrative Internet ISP Broadband Broadband Line sharing Connection Connection Voice Voice Voice Voice Full ULL Cable Alternative KPN Voice Alternative VoIP Alternative KPN Triple Play DSL and Voice DSL provider ISP Voice + provider + KPN Voice KPN Voice Internet + Internet
Slide 28: KPN's VoIP positioned as a breakthrough product
KPN’s VoIP positioned as a breakthrough product ‘Traditional business’ : ‘The new world’ : with regulated prices, little Innovative, future-proof, innovation, mass market customized solutions, attractive TCO Aspect CPE1 •No new investments needed, •Potentially significant investments little innovati
Slide 29: VoIP business product portfolio
VoIP business product portfolio IP Centrex Voice and Multimedia Services from KPN network enabling more flexibility without high investments VoIP VPN Inbound and outbound calling. (IP) PBX on one or more locations connected through cost effective IP Bridge Large Added value Managed VoIP With (IP) ph
Slide 30: Client relationships
Overview of competition from IP Communications perspective “Enabler” of • Top 3,000 clients increasingly require at business processes least Managed Services • “Product Suppliers” and “Service Partners” can only be successful if they cooperate “Process with parties that have expertise higher up Perf
Slide 31: Regulatory landscape
Regulatory landscape Marcel Smits CFO
Slide 32: EU New Regulatory Framework (NRF)
EU New Regulatory Framework (NRF) General • New law has come into force in The Netherlands on May 19, 2004 and in Germany on June 26, 2004; implementation in Belgium delayed • Market definitions and dominancy tests will be based on general competition law instead of current sector specific criteria
Slide 33: Update on regulation in the Netherlands
Update on regulation in the Netherlands • Market analysis mobile markets, March 17, draft OPTA decision – All mobile operators designated as SMP1 on own networks for termination – As of July 2008 call termination rates equal – KPN Mobile no longer designated as operator with SMP1 – Subject to consul
Slide 34: VoIP in the EU
VoIP in the EU • The European Commission proposes a “light touch” approach towards regulating VoIP – “the roll-out of new IP-based services will not be hindered by regulatory hurdles – New technologies should be able to flourish and deliver better services at lower cost to Europe’s businesses and ci
Slide 35: VoIP in the Netherlands
VoIP in the Netherlands • OPTA stated that under the Current Regulatory Framework, OPTA can not regulate KPN’s retail VoIP service – KPN has commercial freedom in launching its “InternetPlusBellen” retail service • OPTA is currently implementing the New Regulatory Framework – Design decisions on mar
Slide 36: Expected outcome in the Netherlands under the New Regulatory Framework
Expected outcome in the Netherlands under the New Regulatory Framework • In the ERG position paper on VoIP OPTA stated – “the impact of VoIP services on the fixed telephony and broadband market is very limited up until now. Since we are planning to publish our concept market decisions on the fixed t
Slide 37: Conclusion
Conclusion
Slide 38: Conclusion
Conclusion • Now is the time to introduce VoIP – Conditions are right and all prerequisites are in place • KPN is in the process of building an all IP network infrastructure – Enabler for new revenue streams and cost reductions • We have launched compelling VoIP products in the Dutch market – For bo
Slide 39: Q&A
Q&A
Slide 40: For more information please contact KPN Investor Relations
For more information please contact KPN Investor Relations Tel: +31 70 44 60986 Fax: +31 70 44 60593 Mail to: [email protected] www.kpn.com