E-merge:Thomas BackelinJohan GertéllBenjamin OzmenPeter Rosenberg Daniel Wändin

Emerging Actors Final Presentation

Emerging Actors May 28, 2002

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Contents

Market Trends Market Trends

5 Hypotheses 5 Hypotheses

Emerging Services - Video Emerging Services - Video

Summary Summary

Stakeholders Stakeholders

Q&A Q&A

Project purpose Project purpose

Our approach Our approach

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Stakeholders

Project members:Project members:

Thomas Backelin(Public Relations)

Johan Gertéll (Human Resources)

Benjamin Özmen (Web Master)

Peter Rosenberg(Administration/Secretary)

Daniel Wändin(Project leader & Contact

person)

Coaches:Coaches:

David Alvén (Coach)

Jonas Willén (Co-coach)

Georg Hodosi(Co-coach)

Principals:Principals:

Göran Sjöström (Telia Research)

Jörgen Nilsson(Telia Research)

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Project purposes:

• To deliver a thorough and objective investigation of actors that are likely to establish an end-customer relationship on the wireless market.

• To provide Telia with a second opinion about future scenarios and market evolvement.

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Appear Networks

Handelsbanken

BMG Sweden AB

Captive

Svenska Bostäder

Scandinavian Online

Birka Nät

Everyday

Digital Route

Ericsson (3 different interviews)

Drott Affärsutveckling

Huvudstaden

IT Kommissionen

Possio

Telia

Avanza

Birka Marknad

ICA Handlarnas AB

Drott bostäder

DigiDoc Open IP

Our approach.

Conducted interviewsConducted interviews

In total: 22 qualitative interviews.

Our approach

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Telecom

Datacom

1G1G

InternetInternet

WLANWLAN

2G

2G

3G 3G

Convergence of datacom and telecomConvergence of datacom and telecom

Shift of value creationShift of value creation

             Infra-

structureProviders

Trans- mission Providers

Market Makers

Service Providers

Content Brokers

Content Provider

Value

Market trends.

• The datacom and telecom industries converge rapidly into a common business.

• More and more of the traditional services will be delivered through IP networks.

• Structural changes and diminishing barriers to entry create opportunities for emerging actors.

• Value have traditionally been created down-stream in the value chain but will move up-stream.

• The importance of owning the customer will increase and actors will strive to establish an end-customer relationship.

Market trends

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Five hypotheses of where to find emerging actors.

ContentProvidersContent

Providers

GlobalConsolida-

tion ofOperators

GlobalConsolida-

tion ofOperators

WISPsWISPsEvolvingONN

EvolvingONN

BrandActorsBrandActors

Emerging Services – Video PresentationEmerging Services – Video Presentation

Emerging ActorsEmerging Actors

Areas where emerging actors striving to establish an end-customer relationship on the wireless market could be found.

1 2 3 4 5

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Brand Actors.1

• Mobile payment solutions threaten to substitute conventional ways of payment.

• Customer loyalty.

• Cooperation with mobile operators.

• Actors operating in a mature business with low margins.

DriversDrivers CandidatesCandidates

• ICA

• Coop

• Ikea

• EMV

• Birka

• Vattenfall

Competitive Pros & ConsCompetitive Pros & Cons

+ Large existing customer stock

+ Brand

+ Trust

- Investments

+ Infrastructure

+ Customer relationship

+ Trust

+ Scale synergies

- Overlapping customer stock

ConclusionConclusion

Less realistic with a time horizon of five years.

Possibly cooperation with mobile operators that want to reduce customer acquisition costs.

Product portfolio extension strategy.

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Evolving Operator Neutral Networks (ONN).2

• Freedom of choice

• Scale synergies:

- Co-invoicing

- Operation & maintenance

- Shared network

• Lowered barriers to entry.

DriversDrivers CandidatesCandidates

• Communication/ local network operators:

- Digidoc Open IP

- ViaEuropa

- Birka

• Up-stream service providers.

• Start-up service providers.

Competitive Pros & ConsCompetitive Pros & Cons

+ Technology Competence

+ De-facto monopoly

+ Scale synergies

- Confusing model?

-/+ Brand

- Reduced flexibility

- Differentiation possibilities

- Transit discrimination?

ConclusionConclusion

Digidoc Open IP: charges end-customers for access and installs wireless access points. Thus, a wireless end-customer relationship is established.

Short-run: possibly new emerging SPs.

Long-run: Oligopoly

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Wireless Internet Service Providers (WISPs).3

• Emerging technologies

• Low entry barriers

- Spectrum regulation

- Investments

• Site attraction

- A site with wireless access may be more appealing to customers than a site without access.

DriversDrivers CandidatesCandidates

• Mobile operator WISPs.

• ISP WISPs.

•Single Spot WISPs:

- Hotels

- Cafés

Competitive Pros & ConsCompetitive Pros & Cons

+ Brand & Trust

+ Customer stock

+ Infrastructure

+ Complementing technology/ customer channel

+ Site ownership

- Roaming

- No broad demand among customers

- Terminals for the broad mass?

ConclusionConclusion

Mobile operators are hindered to enter the WLAN market due to 3G commitments.2nd movers due to market uncertainty.

Marginal impact

No end-customer relationship (services are mainly provided for free)

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Content providers (CPs). 4

• Chargeability problem.

• Decreasing advertising revenues.

• New distribution channel(s) for content.

DriversDrivers CandidatesCandidates

• Any content provider on the Internet, e.g:

- LunarStorm

- Spray

• Large Media Groups:

- Bonnier

- MTG

- Bertelsmann

- Virgin

Competitive Pros & ConsCompetitive Pros & Cons

+ Brand appearance

+ The mutual dependence between CPs and SPs.

- Resources

+ Resources

+ Bargaining power towards SPs.

- Usually not used to have the end-customer relationship .

ConclusionConclusion

Vertical integration is too costly.

Cooperation with operators is the only viable solution.

Various forms of collaboration with operators.

The end-customer will still be owned by the operator.

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Emerging Services

What services will be popular in the future?

VIDEOVIDEO

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Summary:

Brand actors are well positioned to establish an end-customer relation- ship on the wireless market by collaborating with mobile operators.

Evolving ONN will give rise to emerging actors establishing an end- customer relationship on the wireless market.

Single Point WISPs are the strongest candidates for entering the wire- less market. However, these players will only have a marginal impact.

Content Providers will primarily cooperate with operators. Vertical integration is not feasible. Customer ownership remains by the operator.

MMS are next to be launched on a broad basis. LBS will most likely be the most valuable services to end-users.

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Questions And Answers

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