Post on 26-Mar-2015
transcript
The Regulatory Framework for Electronic Communications:
Regulation v. Competition
European Parliament Hearing – May 30, 2005
Duco Sickinghe (CEO)
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 Telenet 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 technological change and evolving industry standards in the markets for Telenet’s services and Telenet’s ability to introduce new technologies or services; Telenet’s ability to maintain and upgrade its network and obtain adequate equipment; Telenet’s integration of its recent acquisitions; adverse regulatory, legislative, tax or other judicial developments; and factors that are not known at this 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 materially 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 analyst 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.
The Notes described herein have not been registered under US Securities Act of 1933, as amended (the “US Securities Act”), or any state securities laws.
This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this communication or any of its contents.
The securities referred to in this document have been sold.
“Safe Harbor”
Introduction to TelenetTelenet in a snapshot …
Telenet’s location in Europe
Netherlands
Belgium
Wallonia
Flanders
Germany
Luxembourg
95% Cable TV penetration
Competitive infrastructures lead to higher broadband growth
(31 dec 2004)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
share of largest technology B
road
ban
d p
enet
rati
on
per
h
ou
seh
old
Denmark
The Netherlands
Belgium
Portugal
Austria
Sw eden Finland
ItalyUKSpain
LuxembourgFrance
Germany
GreeceIreland
Source : ECTA
Facility-based competition is most effective : countries close to 50/50 % DSL- Cable have highest BB penetration
Broadband wholesale pricing should not hinder ‘make or buy’ decission
Infrastructure investment is best assurance for creating growth & innovation
34%
39%43%
45%48%
50%52%
55%
3%
10%
18%
26%23%
30%
36%
2000 2001 2002 2003 2004 2005 E 2006 E
Hou
seho
ld p
enet
rati
on (
%)
Broadband
Internet
PC
Source: ISPA, Telenet analysis
Flanders leading broadband penetration
Result: Telephony growth in a Declining Market
Bron: BIPT, IDC, Belgacom & Telenet analyseEnkel PSTN lijnen (excl. ISDN); RES+SOHO
2%
7%
11% 12%15%
18%
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
1999 2000 2001 2002 2003 2004 E
0%
5%
10%
15%
20%
25%
30%
35%
40%Belgacom Telenet Market share
Where have we come from?
89,3
681,1
2000 2004
2004
• € 75 M net free cash flow
• Total Debt/ LQA Ebitda 5,1x
• Cash on balance sheet € 146 M
• Ample access to liquidityRevenue in € Million
Telenet today: a balanced revenue mix
• In 2005: internet > CATV
• First player in VOIP in Europe
20042004
Analog Cable TV
BB Internet
Total Revenues: € 681.1 Million
Fixed Telephony
Telenet Solutions
Canal+
Triple Play: Other cable operators (Coax networks)(Revenue Split 2004)
27%3%
56%
2%
12%
Cable TV BB Internet Telephony DTV/Premium TV Corporate Services
28%
9%30%
10%
23%
(B)
Sources: Analyst reports
21%
62%
11%
6%
Other Operator Benelux
Other Operator Western Europe
Economies of scale – Revenue 2004
0 500 1000 1500 2000 2500
Carrier & others
Video
Internet & data
Fixed Voice
Mobile
€ Millions0 500 1000 1500 2000 2500
Total
N/A
N/A
5540 m€ 681 m€8:1
3:1
10:1
N/A 4,8% revenue of Belgacom
Many challenges are coming on multiple fronts …
Competition • Price & performance
pressure• Strong financing means• New players in each
market−Belgacom in iDTV−Mobile players in fixed services
−Fixed players in mobile services
Technology • New
platforms/frequencies• IP convergence
Consumers • One supplier• One integrated customer
service • Lower pricing
Services • VoIP• MVNO• iDTV• Mobile video, …
Triple play & convergence
… and are primarily driven by triple play and convergence at each level
Services
Networks
Access devices
Players
•New platform frequencies (WiMax, DVB-H)•Evolution to all IP
•Fixed/mobile convergence
•Data
•Home gateways
•Fixed/mobile handsets
•Telco’s into TV services•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
•Voice •Video
… and are evolving in order to allow for a full triple play with everything over IP
COAX
DataVide
oVoic
e
Network
Transport
Service
IP / MHP / DVB
FIBER xDSL WIFI UMTS
TV over DVB: Interactive Digital TV
• Set-top box probably best medium to close Belgian digital divide
• Cost of Set-top box is about 20% of price PC
Broadband penetration
Cable penetration
55%
34%
PC penetration
43%Internet penetration
Opportunitydigital TV
95%
COAX xDSL MVNOWiFi FIBER
IP DVB MHP
DATAVIDEOVOICE
NETWORK
TRANSPORT
SERVICE
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 (i)
Regulatory issues (ii)
3. Access to content
i) Danger of leverage of financial power by incumbentii) 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