06 Xavier Rodriguez-Martin - Oni Communications

8/6/2019 06 Xavier Rodriguez-Martin - Oni Communications

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A practitioner's view on NGA

Xavier Rodrguez-Martn, Chairman & CEO, Oni Communications


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investing in NGA

: : Onis distinctive businessmodel to maximise RoI

: : The global challenges ahead

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Introduction to Oni www.oni. t/indexUK.htm

Single next generation Portuguese operator focused

exc us ve y on t e corporate mar et, w t amarket share

130 M in revenues, 2/3 IP-based data services

27 M EBITDA, 2 M net profit

400 M invested in NGN: 10,000 km of fibre routes, 2n

European IP-MPLS network, 1st Iberian soft switches

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investing in NGA



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Two forces:while networks want to converge...

Access throu h different means: fibre co er

coax, radio

uppor ng a arge num er o g a serv ces:voice, data, Internet, video

Interaction and customization facilitated by IT

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... business models tend to diverge

Dominant convergences

Clients withCarriers

Telecom + IT Corporate

Specific technologies,systems and processes

xe + mo e

each segmentResidentialBroadcast + telecom

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The two forces provoke dilemmas

Network convergence favours an integratedapproach; business model divergence favours a

segmen e approac

efficiency) andservice providers (focus favours

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Which force weights more whendeciding on NGA strategy depends

1. History and size

2. Degree of market maturity

3. Regulation

4. Politics

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1. History and size

existence of several national networks

copper and cable incumbents

Market shares of the different operators

Qualit of the ast liberalization rocess

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2. Market maturity: segmentation

Operator 1.0: Operator 2.0:

Addressing all the market Addressing part of the

Gain Penetration Gain Maturity

Building a large company

structure

mar et w t cost contro

Building a slim company

Positioning!

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2. Market maturity: strategic implications

Operator 1.0: Operator 2.0:

destructive competition,zero-sum game

towards segmentation-based,strategic competition

Me-too strategies

More innovation

Permanent price deflation

Difficult financial erformance

successful, in different ways, inthe same market

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2. Market maturity: telecoms 8management traps

-.

2. Growth at any price

3. Fixed cost allocation

instead of sustainable profitability

lack of robust mana ement accountin s stems

4. Strategic optimism

hides inconsistencies in cost allocation

waiting for the next big thing

5. Potential synergies

6. Growing market

different traffic profiles, technologies, skills

everybody running after the same ball

. or o o

8. Activity

-

confusing activity with results

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3. Regulation

De ree of vertical se aration

Protection of investment in fibre networks

Alignment of ex-anteregulator (ie telecomsregulator) with ex-postregulator (ie

competition authority)

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4. Politics

Telecoms are oliticall relevant

Innovation leadership

Economic relevance

Portu al: o ortunit to lea fro historical under-

performance

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investing in NGA



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Oni: applying the operator 2.0 model

In business, the majority is always wrong. The future is not

logic. The stone age did not end by lack of stones

Anticipation is key: 3.5 years ago we exited the residentialbusiness and focused on corporate and carriers carrier

Profitabilit is directl associated with focus and differentiation

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What a business model is

Value ro osition

target segment, P&S offering and revenue model

value chain, cost model and organization

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and a different operating model

40% of revenue on fibre access

Cost leadership through mass customizationand selective

Processes, systems, skills and culture customized forcorpora e c en s es company o wor n or uga ,Heidrick & Struggles)

Telco-IT integratormodel based on partnerships

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investing in NGA

: : Onis distinctive business modelto maximise RoI


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The challenges ahead are huge

Certainties and uncertainties for decision makin

: : Technology

: : Economics

: : Regulation

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Certainties

r an u ure or e ecoms

-

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Certainties: a brilliant future for telecoms

-

NGA will fuel dematerialization of value chains

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Certainties: short-term challenges aresignificant

era za on a e n urope

Current business models have accumulated a lot oftension and can be leapfrogged

The telecoms industry has a short memory

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This is a short-memory industry

The Internet bubble in 2000The Internet bubble in 2000

drivers consultants + manufacturers +(investors + investment bankers)

leadership engineers economists lawyers

,,cool downcool down

+ +

leadership lawyers

economists

engineers.Fiberpolitics!

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Certainties: NGA is thedriver for change

s a e cross roa o macro- ren s

demographic (i.e. health)social (i.e. education, justice)

. . ,

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certainties: NGA is thedriver for change

Value in the network and not only above level 2 (IPand beyond)

ecosystem. New apps will allow to escape frombroadband h er-com etition

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Uncertainties

Unbalanced risk-return binomial: how to move from

poetry to maths without loosing motivation

revenue gap increase the risk on RoI

Difficulty to anticipate regulatory issues will giveextra work to competition authorities

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Managing time is crucial

Right timing what we usually refer as luck

Anticipation allows to create temporarymonopolies

Procrastination the worst management sin

ong- erm approac us nesses are mara ons, no

sprints

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A few last observations

C cles are conse uence of human condition: from

greed to panic...and from panic to greed (coming soon)

a ua e n ormat on s not cons ere a commo tyany more. Ideas are scarce...and we have to make

Strate is back. Execution is not the onl im ortantthing any more

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Vision without action is adaydream.

Action without vision is a

n g mare

Japanese proverb


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A practitioner's view on NGA

Xavier Rodrguez-Martn, Chairman & CEO, Oni Communications

06 Xavier Rodriguez-Martin - Oni Communications

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