IP fjarskipti ehf Marketing VoIP services in a mature and demanding market Arnthor Halldorsson

Transcription

1 IP fjarskipti ehf Marketing VoIP services in a mature and demanding market May 17, 2005

2 Introduction Hive is the brand name for B2C services of IP fjarskipti. Hive is a next generation operator that will provide triple-play services (video, voice, and data) over a state of the art ADSL2+ broadband network to households in the greater Reykjavik region Triple-play means that the operator only has to pay once for the infrastructure supporting the delivery of video, voice, and data services, thus creating a cost advantage compared to traditional vertical networks Unlike Siminn and Og Vodafone, who are building walled gardens with proprietary services and content, Hive believes in Open Networks and building a portfolio of independent 3rd party services

3 Hive Today Hive brand established as the new (third) operator in the market Network access service (B2B) launced fall 2004 Hive service (B2C) launched on November 23 rd, 2004 Network deployed & fully operational Covers 64k homes in the greater-reykjavik area Plan to build out to Selfoss, Vestmannaeyjar in Q2/05 State-of-the-art ADSL2+ technology Internet Point of Presence 2x155 Mbits on the Cantat-3 overseas cable (The latter to be commissioned June 1 st ) Ensures independence of Hive from competitors (Siminn, OG Vodafone)

4 Trend: Digital Convergence Devices Services Voice Data Triple Play Video Networks Switched Broadband IP Broadcast

5 Hive Product Offering Targets Internet Offering Higher bandwith/more speed than known before Managed residential gateway Backbone that can truly deliver media content QoS Media offering IPTV trials ongoing Content with IPTV rights secured VoD capabilites Telephony Offering (VoIP) In the planning phase Zyxel 2602 combined router with ATA and POTS backup Wirelss VoIP phones

6 Core Asset ADSL2+ Network

7 Global market trends Increased Broadband Penetration Maturing VoIP Technology Improving VoIP Business Economics Undetermined Regulatory Environment Changing Competitive Dynamics

8 The New Era of Consumer Communications Customers increasingly use multiple services for communications Wireless has become the primary (or only) line for a growing number of users and web-based communications are rising in importance at the expense of phone service The standalone landline phone is being displaced by cordless phones, home gateways and other devices connected to each other.

9 Global Trend: Increased Broadband Penetration Global Broadband Subscribers M I L L I O N S North American Broadband RHK Market Forecast: Annual Global Broadband, Sept 2004 Other Cable DSL Key Trends!Broadband access is forecast to grow 80% by 2008!DSL dominates outside of NA!Cable continues to dominate in NA!Fiber To The Home emerges Will drive demand for Voice over Broad Band

10 Global Voice Over Broadband Connections Global Growth of VoBB 25 M lines in service by % in the USA In-Stat/MDR. IN TX Hear This: Broadband IP Telephony, May % growth in VoBB connections over 5 years

11 US Voice Over Broadband Consumer and Business Market Revenue Assumptions 134 % CAGR Consumer service $30- $35 month 5,505 K consumer lines in 2008 Business service $50 month 608 K business Lines in 2008 In-Stat/MDR. IN TX Hear This: Broadband IP Telephony, May 2004 Opportunity is in the consumer market

12 Migration Trends: North American Household Voice Connections by Type Source: North American Consumers Move to Internet Voice Connections (Gartner Inc., June 2004) Conventional VoIP Wireless Only

13 Iceland leads Europe in number of Broadband connections Source: Pollara Inc. Research Commissioned by Nortel Networks

14 Estimated Icelandic Voice Market Value Voice Voice Telephony services ISK 19 billion GSM Services 11 billion Landline Services 8 billion Estimated Wireless market: 40,000 GSM enterprise connections 125,000 GSM Private Post-paid connections 90,000 GSM Prepaid connections 22,000 NMT Tetra users (?) Estimated Landline market 100,000 Private numbers 90,000 Enterprise numbers Home Broadband market Over 80% penetration of 102,000 homes, thereof approximately 50,000 ADSL connections (1 Mbits 20 Mbits with majority at 2 Mbits)

15 Icelandic market attributes High Broadband penetration 50% of all homes connected High PC ownership Over 80% of the population has access to the internet High Mobile phone penetration Mobile phone penetration at or above 90% High Communication spend The average home spends anywhere from ISK per month on phone and internet bills (usd )

16 Consumer VoIP Options Phone to Phone Works like a calling card Originates and terminates on PSTN VoIP used for long-haul transportation PC to PC Originates and terminates on PC Fully VoIP throughout Originates on PC and terminates on PSTN PC to Phone IP Device to Phone Gateway converts call from analog to digital Solutions include IP phones, and broadband analog telephone adapters (ATA)

17 The VoIP Opportunity Increased broadband penetration drives VoIP service uptake Subscribers use their broadband service for low-cost on-net and international phone calls. Any Cable or DSL Modem ATA Adapter Any Analog Telephone Plug-n-Play No Router Required Toll-Quality VoIP Remote Management and Upgrade NAT/Firewall Traversal Auto-Switch to PSTN for Emergencies Internet Service Server PSTN Gat eway PSTN

18 VoIP is Currently a Cost-Based Proposition US customers surveyed: Why are you interested in VoIP? Source: Pollara Inc. Research Commissioned by Nortel Networks

19 The Broadband Phone Purchase Decision Traditional Service Voice over IP Service Status Quo High Voice Quality Power Backup Multiple Extensions Emergency Services Lower Cost Local Service Lower Cost IDD Flat Rate options Lower Roaming Cost Soft-phone For an Increasing Number of Consumers, the Cost Benefits Outweigh the Limitations over Traditional Phone Service

20 Attributes that need to be fulfilled regardless! Interconnected always (must work for all calls) Good voice quality Wireless connectivity within home Low entry fees Low installation costs Number portability Low cost is just what gets customer attention their focus will quickly shift towards

21 ..Value Added Services PSTN Line Integration Personal Agent Web Site PC or Web-Based Soft Phone Call Screening IM and Presence Integration Simultaneous Ringing Voice and Video Calling Sequential Ringing Collaboration Tools Contacts Management Voice Mail GUI Wireless Phone Integration Multi-party Video Conferencing Differentiation holds the key to lasting competitive edge

22 Broadband phone service must mirror current landline service All U.S. Online Households Source: Pollara Inc. Research Commissioned by Nortel Networks

23 Targeting the Right Segments with the Right Service US Market Opportunity Segment All HH TAF Broadband Teen 12% 21% 35% Full Nest 38% 58% 55% Home Office 17% 26% 29% Sources: Yankee Group, 2004; Nortel NetworksPrimary Research, 2002 Service Requirements Must Work for All Calls Must Allow for Mobility Within the Home Must Have Good Voice Quality Target Key Segments and Create Service Bundles Designed Around their Behavior Home Office Households with Teens Full Nester Households (Single/married w kids) Source: Pollara Inc. Research Commissioned by Nortel Networks

24 International market leaders PC to PC PC to Phone IP Device to Phone Skype Free World Dial-up Voiceglo Net2Phone Skype-out/in Voice Pulse Packet 8 Primus AT&T Vonage Typical Pricing $ $ Unlimited Calls to US and Canada Includes Voice Mail, call waiting, caller ID, 3-way calling and call forward Offering a lower cost alternative to conventional voice

25 Summary As broadband connectivity grows and network QoS improves, VoIP will become a primary service Competitive threat will push Broadband providers towards VoIP and other VAS to increase value of service Cost based value proposition will lead the way The Global Internet offers access to other national voice markets over VoIP => takes the distance from IDD calling. Will cause abolishment of intercarrier compensation Wherever there are re-filing opportunities (arbitrage), VoIP will find it VoIP users can avoid fixed line and mobile carriers to make calls around the world

26 THANK YOU!