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									                                             The Regulatory
                                             Framework for Electronic
                                             Communications:

                                             Regulation v. Competition
                                               Duco Sickinghe (CEO)




European Parliament Hearing – May 30, 2005
“Safe Harbor”
 This presentation includes forward-looking statements. These forward-looking statements include all matters that are not
 historical facts, statements regarding Telenet’s intentions, beliefs or current expectations concerning, among other things,
 Telenet’s results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which Tele net
 operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend
 on circumstances that may or may not occur in the future. Specific factors that might cause these uncertainties include, but are
 not limited to: Telenet’s business plan, which may undergo changes in the future; Telenet’s history of losses; Telenet’s
 substantial leverage and restrictions contained in the agreements governing its debt; the potential fluctuations in Telenet’s
 operating results; Telenet’s competition; Telenet’s potential inability to attract and retain subscribers; rapid technologica l
 change and evolving industry standards in the markets for Telenet’s services and Telenet’s ability to introduce new technolog ies
 or services; Telenet’s ability to maintain and upgrade its network and obtain adequate equipment; Telenet’s integration of it s
 recent acquisitions; adverse regulatory, legislative, tax or other judicial developments; and factors that are not known at t his
 time.

 Telenet cautions you that forward-looking statements are not guarantees of future performance and that its actual results of
 operations, financial condition and liquidity and the development of the industry in which Telenet operates may differ materi ally
 from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if Telenet’ s
 results of operations, financial condition and liquidity and the development of the industry in which Telenet operates are
 consistent with the forward-looking statements contained in this presentation, those results or developments may not be
 indicative of results or developments in future periods. Telenet does not undertake any obligation to review or confirm anal yst
 expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events that occur or
 circumstances that arise after the date of this presentation.

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 any state securities laws.

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 person should not act or rely on this communication or any of its contents.

 The securities referred to in this document have been sold.
Introduction to Telenet
Telenet in a snapshot …
Telenet‟s location in Europe


                                 Netherlands
                 Belgium


                           Flanders

                                               Germany


                                  Wallonia




                                               Luxembourg




95% Cable TV penetration
 Competitive infrastructures lead to higher
 broadband growth
Facility-based competition is most
effective : countries close to
50/50 % DSL- Cable have highest                                                                         (31 dec 2004)
BB penetration
                                                                 45%        Denmark
                                                                 40%                             Belgium




                                     Broadband penetration per
                                                                 35%                 The Netherlands
                                                                 30%




                                            household
                                                                                                                              Finland

Broadband wholesale pricing
                                                                                                                   Sw eden
                                                                 25%      Portugal                                                      Luxembourg
                                                                                                                                                     France      Italy
                                                                 20%                               UK
                                                                       Austria                                                                           Germany
should not hinder „make or buy‟
                                                                                                                      Spain
                                                                 15%
                                                                 10%

decission
                                                                                                                                                 Ireland
                                                                 5%                                                                                              Greece
                                                                 0%
                                                                   50%      55%        60%       65%       70%     75%        80%       85%     90%        95%      100%
                                                                                                        share of largest technology



Infrastructure investment is best
assurance for creating growth &
innovation



  Source : ECTA
  Flanders leading broadband penetration


                                                            55%
                                                     52%
                                              50%
                                       48%
    Household penetration (%)




                                45%
                                                            43%
                                                     39%                             Broadband
                                              36%
                                                            34%
                                       30%
                                                                                     Internet
                                                     26%
                                23%
                                              18%                                    PC

                                       10%

                                3%



                                2000   2001   2002   2003   2004   2005 E   2006 E




Source: ISPA, Telenet analysis
 Result: Telephony growth in a Declining Market

                            Belgacom                 Telenet      Market share
        2.000                                                                      40%

        1.800
                                                                                   35%
        1.600
                                                                                   30%
        1.400
                                                                                   25%
        1.200

        1.000                                                              18%     20%
                                                                15%
         800
                                              11%         12%                      15%
         600
                               7%                                                  10%
         400
                   2%                                                              5%
         200

           0                                                                       0%

                 1999         2000            2001       2002   2003      2004 E




Bron: BIPT, IDC, Belgacom & Telenet analyse
Enkel PSTN lijnen (excl. ISDN); RES+SOHO
Where have we come from?


                           681,1                      2004
                                   • € 75 M net free cash flow


                                   • Total Debt/ LQA Ebitda 5,1x


   89,3                            • Cash on balance sheet € 146 M


   2000                     2004   • Ample access to liquidity
          Revenue in € Million
 Telenet today: a balanced revenue mix
                   2004

       Total Revenues: € 681.1 Million

                  Fixed Telephony


BB Internet
                                                            • In 2005: internet > CATV
                                                 Telenet
                                                Solutions
                                                            • First player in VOIP in Europe




     Canal+
                                    Analog Cable TV
Triple Play: Other cable operators (Coax networks)
(Revenue Split 2004)
                                                                   Other Operator Benelux


                                      (B)
                                                              3%           27%            12%
                                                                                                  2%
                            23%
                                                                             56%
         28%                                10%

                                                               Other Operator Western Europe
                                      30%
               9%                                                          21%
                                                                                     6%
                                                                                            11%



                                                                            62%




    Cable TV            BB Internet               Telephony            DTV/Premium TV                  Corporate Services


 Sources: Analyst reports
   Economies of scale – Revenue 2004



         Mobile                                          N/A

    Fixed Voice                                          10:1

 Internet & data                                         3:1

          Video                                          N/A           4,8% revenue of Belgacom

Carrier & others                                         N/A

                  0   500    1000   1500   2000   2500          0    500      1000     1500       2000   2500
         € Millions

                            Total    5540 m€             8:1        681 m€
Many challenges are coming on multiple fronts …
                                            Technology
                                        • New platforms/frequencies
                                        • IP convergence



 Competition                                                            Consumers
• Price & performance pressure                                        • One supplier
• Strong financing means                          Triple play &       • One integrated customer
• New players in each market                      convergence           service
   −Belgacom in iDTV                                                  • Lower pricing
   −Mobile players in fixed serv ices
   −Fixed players in mobile
    serv ices

                                              Services
                                        •   VoIP
                                        •   MVNO
                                        •   iDTV
                                        •   Mobile video, …
… and are primarily driven by triple play and convergence
at each level

Services        •Data                    •Voice                    •Video


                        •New platform frequencies (WiMax, DVB-H)
Networks                           •Evolution to all IP
                               •Fixed/mobile convergence

Access                              •Home gateways
devices
                                 •Fixed/mobile handsets

                          •Telco’s into TV services
Players          •Fixed players into mobile services (MVNO)
                  •Mobile players into fixed services (xDSL)

           In the long run, any service on any network via an integrated access
                                   device by any player
… and are evolving in order to allow for a full triple play
with everything over IP


Service                   Video Voice     Data




Transport                      IP / MHP / DVB




Network       COAX     FIBER       xDSL          WIFI   UMTS
TV over DVB: Interactive Digital TV

                                             • Set-top box probably best
       PC penetration      55%
                                               medium to close Belgian digital
 Internet penetration    43%                   divide

 Broadband penetration   34%

    Cable penetration                 95%
                                             • Cost of Set-top box is about 20%
                                               of price PC
                               Opportunity
                                digital TV


                                                 SERVICE        VOICE            VIDEO                DATA



                                                 TRANSPORT          IP                   DVB           MHP



                                                 NETWORK     COAX        x DSL   WiFi          MVNO      FIBER
Regulatory issues (i)
Convergence leads to Triple Play offerings
                     BUT        assymetric regulation still required
1. Mobile
   WiMAX spectrum should be granted to alternative operators:
   i) in order to serve as mobile complement and to
   ii) tackle F2M substitution
   iii) level playing field with mobile & fixed incumbents
2. VoIP
   Need to regulate VoIP services offered by the incumbent:
         Especially cost based retail pricing for incumbent
          “This decision will further the goal of building sustainable competition in local telephone markets.
          Under this decision, incumbent local exchange carriers – those with market power – cannot
          price their local VoIP services below cost to stifle competition.” (CCTC, May 12, 2005)
Regulatory issues (ii)
3. Access to content

        i) Danger of leverage of financial power by incumbent
        ii) Public broadcasters should remain neutral (non-exclusivity contracts)
        iii) Technology neutral approach towards copyright

Timing transposition new Regulatory Framework

Belgian Electronic communication bill adopted by Parliament April 21, 2005
Conclusions
• Infrastructure competition:
“The best performing countries in the Union and abroad are characterised by a
  significant degree if facility-based competition […]”
                       Commission Communication (COM (2004) 369final)
“NRAs should allow the infrastructure-based rivals to the incumbent to set call
  termination charges which allow them to recover the efficiently incurred
  costs of an operator of their size and topology.”
                       OVUM study, Barriers to competition, Nov 2003


• Asymmetric regulation is still required to achieve sustainable competition
  across the European Union (Mobile spectrum, VoIP, access to content)
Regulation v. Competition

								
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