Competitive Business Case

UBI – Dec/2003
Alex Cutrim / Suzana Roma
 Layered, Multi-Player Mobile Industry
Creates Complex Business Environment

Corporate Personal
Consumer

Service
Vodafone, T-Mobile, …
Provider
s
Telecomm. Core network switching and transmission
Equipments equip., wireless handsets, satellite equip.,…

Basic Components Processors, electronics, plastics,…

 Service Providers - Abundance of Players
VoiceStream Wireless Southern Linc
Alltel AT&T wireless group Dobson Comm. Sprint PCS
Century Tel. Dynamic Mobile Data Vodafone
Cellular One
Centennial Comm. T-Mobile
Cingular Wireless Winphoria
GoAmerica Triton PCS Networks
Metricom Western Wireless Nextel Comm.
MCI WorldCom

Cell phone - Dominated by Top 5 Towering Service - Major Players

American Tower
Nokia Corporation Crown Castle
Motorola 14600 towers, USA, Brazil, Mexico International
Telecommunications Australia, P.Rico, UK, USA
AT&T, Sprint
Spectrasite Comm., Inc.
Ericsson 8000 towers. USA, Canada
Pinnacle Towers,
Alcatel Siemens Information SBA Comm., Inc. Inc.
2300 towers. USA, Canada
and Communications 3700 towers. USA, P.Rico

Components - No clear leaders, fragmented

Texas Instruments
Bluetooth capabilities, wireless
Good Morning Electronic infrastructure, RF products Sanyo
Information Battery maker: Nokia, Ericsson, Motorola
Taiwan based
Supplies: Nokia, Ericsson, Motorola, Siemens Geo Tex Creative Plastics
 Visions of a Near Future…

Estimate of 1 Billion mobile subscribers by 2003!

 Visions of a Farther Future…
Connecting OBJECTS with BUSINESS APPLICATIONS
for added-value products and services

Employee

ERP dB
Consumer

Business

CRM
Mobile Network

House

TV
Car www.com
 The Challenge
Integrating the plethora of systems and The real challenge is connecting
protocols along the value chain Business Interests to a Common Goal
Cellphones, PDAs,
smartphones, Java, XML,
blackberry,… Employee XHTML, VXML,…

Microsoft, Symbian, dB
ERP
Palmsource,… Consumer

Business
Mobile Network
CRM
GSM, CDMA,
TDMA, GRPS,
House UMTS, EDGE,
W-CDMA,… WAP, Windows,
TV Linux,…
www.com
WLAN, Car
bluetooth,…
 … under a changing Technological
Landscape
3rd Generation: Broadband Digital
WCDMA
Voice and Extended Data (MMS)
Higher connecting users => populated
CDMA2000
3G areas

EDGE

UMTS
GPRS (GSM)
2.5G 2nd Generation: Digital
Voice and Data (SMS)
Intel tracking: extended batt. life
2G
(850 MHz)

Limitation on # connecting users TDMA

GSM CDMA

1st Generation: Analogue

Limited to Voice Services
Always-on: limited batt. life=>
1G limited mobility
Subject to cloning/fraud
Opposing Strategies Will Slow the
Expansion Process
Standardization of Diversity in
Technologies Technologies

Synergies in value Complexity of

chain Hardware

Efficiency, Lower Abundance of

Investments Equipment Types

Increased Service Increased Equip.

Value Revenues

Profit
Service Providers Telecomm. Equipment
In the End, Consumer will Decide
Diversity of Standardization of
Technologies Technologies
More
Servic
e
Proliferation of
Consolidation
Devices / Providers
Faster
Limited Transmission,
Transmission More Power
Higher Start-up Higher On-going
Costs Costs

“You Pay for What “You Get What You

We Have” Pay For”
Rapid Expansion in Mobile Internet Use Will
Test Capability of Providers to Keep Up

Mobile Internet Users

194
2000
2005

MM
89
79
52
30
7 2 0.1
Europe North America Latina Asia-Pacific
America
 Vodafone T-Mobile
Mission We help people find information, entertainment or We will deliver the best customer
assistance wherever they are. experience in mobile communication
– the true freedom to move- on a
global scale.

Vision Our vision is to be the world’s mobile telecommunication Our core slogan is “Get More” more
leader- enriching customer’s lives, helping individuals, value for money, more freedom of
business and communities be more connected in a choice, more options, more services;
mobile world. without more expenses.
They will prefer Vodafone because the experience of
using Vodafone will be the best they can find.
We will lead in making the mobile the primary means of
personal communication for every individual around the
world.
Through leadership,our scale, our scope and our
partnerships, we will bring online mobile services to the
world.
Objectives The Company’s objective is increasingly focused on Global brand for global movers:
voice and data revenue growth and margin customers are on the move round the
improvement. globe and want to use their mobile
Provide the best possible return for the shareholders. phones everywhere.
To extend our operational leadership of the industry . Transnational Company: be one team
To extend service differentiation Individual Markets and Cultures
To provide our customers with safe, reliable products
and services that represent good value for money.
 Growth
Strategy
Research
& Global
Developme Presence
nt
Competitiv
e
Assessme
nt
Organization
al Products
Structure

Market
Image
Growth Strategy
Vodafone
Increase marketing focus on our
established high quality customer base
Invest in delivering Vodafone branded,
easy to use, customer propositions for
mobile voice and data. One worldwide
brand => Brand awareness => preference
Maximize the benefits of scale and scope,
through the use of partner network
agreements, by increasing equity interests
in business where the group has existing
shareholdings
Understand, anticipate and respond to the
needs of our customers and provide them
with innovative products and services
Make further acquisitions or disposals of
business
T-Mobile
Provide its customer seamless trans-
Atlantic services
A recognizable brand, present on
international markets, assuring the same
high quality everywhere
Subsidiaries are still responsible for
performance in their countries. They know
best what their customers want and need,
and will be the ones from whom the
important ideas will come
Global Presence
Vodafone
123 million customers spanning
the key global cellular markets in
28 countries
Still, its global strategy appears
less than clear outside its
European heartland, especially in
the United States
In the United Kingdom, it carved
out a position of market
dominance against a powerful
rival, partially owned by the former
telecom monopoly, BT
$300 Billion in acquisitions
T-Mobile
Deutsche Telekom and its
subsidiaries and affiliates provide
wireless services to approximately
82 million customers worldwide
It is the first to operate a trans-
Atlantic mobile network based on
GSM
Its subsidiaries and affiliates are
among the first operators to use
the future oriented GPRS
Products
Vodafone
Vodafone Live!: bringing customers a world of
colour, sound and pictures
Acquisition of Vizzavi is expected to continue
to drive a significant part of the Group's growth
in future years
Mobile Office from Vodafone: high speed data
card enabling customers to access their normal
business applications when out of the office
A customised Vodafone branded GPRS data
card provides optimal service on Vodafone
network
Wireless Office: replace desk phones or
replace their entire PBX
Blackberry: advanced wireless handhelds,
software and services
Connected by Vodafone: descriptor applied to
mobile data solutions provided through
partnerships between Vodafone and leading
mobile device manufacturers
T-Mobile
Lifestyle and mobility:
The company is broadening its mobile multimedia services
spectrum
Color displays, multitonal ringing, Java capability and GPRS
connections have made many mobile multimedia services more
attractive, faster and easier
T-Mobile t-zones are characteristic for this next content generation.
Six popular channels: t-info, t-sports, t-news, t-games, t-music.
More than 100 partners with over 500 services providing a wide
variety of content
Making the Office Mobile:
The products provide secure, efficient communication between the
mobile employees by optimizing essential office applications, such
as e-mail and office Outlook.
Products already available: Mobile Access Portal, Mobile Service
Portal, BlackBerry Solution or the T-Mobile MDA and Sidekick
New technologies: Acquisition of UMTS licenses in six european
countries
Mobile messaging: The company launched GPRS in 2002 in
Europe
Market Image
Vodafone
For many early British mobile users,
Vodafone became synonymous with
the mobile phone, as in “call me on my
Vodafone."
Vodafone live!: Best Consumer
Wireless Application or Service at the
GSM Association Awards, and, most
recently Best New Service at the
World Communications Awards and
Best Network Service at the Mobile
Choice Consumer Awards
High profile sponsorship of Ferrari
and Manchester United
Vodafone Hopes to Make Global
Mobile Mean More Than Wireless
Voice
T-Mobile
As part of its brand philosophy, the
company will strengthen its
commitment to quality and a superior
range of voice and data products
The T-Mobile brands symbolizes
reliability, attractiveness, and
innovation throughout Europe and the
United States.
Spokestar Catherine Zeta-Jones
A recognizable T-Mobile brand,
present on international markets,
assuring the same high quality
everywhere, is an important
orientation.
Organizational Structure
Vodafone
It developed global
functions for supply chain, IT
and technology
management.
T-Mobile
One team: Main activities,
such as marketing, platform
harmonization, procurement,
and brand migration will be
managed centrally in future
Individual markets and
cultures: Subsidiaries are
responsible for performance
in their countries
Research and Development
Vodafone
NTT DoCoMo and J-Phone (owned partially by
Vodafone) launch 3G network
Vizzavi is Vodafone’s 50/50 joint venture with
media giant Vivendi. Essentially it is looking to be
the Yahoo! of the mobile internet.
Joined forces with Google to bring advanced
search capabilities to mobile internet portal
Vodafone made a joint-venture with Oracle to offer
field workers access to key business systems.
Vodafone partnerships with SAP and Hewlet-
Packard to collaborate on Mobile Enterprise
solutions
Vodafone and Microsoft join forces to create
programming standards for software that will
eventually link computers and mobile phones
Launches Global Blackberry Solution. Has worked
closely with Research In Motion to deliver
customized BlackBerry solution.
T-Mobile
Lucent Technologies and T-Mobile launched a
joint pilot project to evaluate secure high-speed
data services using 3G UMTS technology.
Signed agreements with content providers: MTV,
Universal Mobile, AOL, Aspiro, CNN, Digital
Bridges, E*Trade, MapQuest, NGame, Picofun,
PocketBoxOffice, PocketThis, Sabre,
TicketMaster & CitySearch, Upoc, ViAir’s,
Zagata
Microsoft partners with T-Mobile HotSpot to
promote Wi-Fi access for Windows Mobile
Customers
T-Mobile will deploy 3G Lab’s Trigenix product:
the goal is to enable users to create their own
personalized interface.
Working closely with Research in Motion to offer
Blackberry terminals supported by the operator’s
GRPS and “push” e-mail services.
 Growth
Strategy
Research
& Global
Developme Presence
nt
Competitiv
e
Assessme
nt
Organization
al Products
Structure

Market
Image
 Vodafone T-Mobile
Strengths Global reach, Agile, opportunistic
strategic executer, with current
industry enabler possibilities
Weaknesses Technology base in Lack of long-term
US, “over focus” on focus
global Brand strategy
Opportunities Leverage global Keep close distance
capabilities to drive to leader to avoid
mobile standards risks
Threats Value for money of Value for money of
3G derived mobile 3G derived mobile
services, price paid services
for 3G licenses
 Executive Summary
Vodafone is well positioned to become the
World’s true leader in Mobile services
 Focused, global, execution
 Leveraging global presence to drive mobile
industry to deliver increased value
The real power of a global player is not in
leveraging seamless global services
T-Mobile has the technological global
competitive edge to be in the forefront of
the industry
 Does not appear to be committed to this
 Vodafone’s Choice for Verizon in the US
appears to be driven by quality opposed to
strategy
Are you encouraged to switch providers based in WNP?

Verizon 22.6 Verizon is based on the

T-Mobile US 37.6 CDMA platform
37.0
Not one of Verizon
AT&T

Qwest 38.2
Wireless services carry
US Cellular 34.8
the Vodafone brand
Cellular One 33.3
Cricket 33.1
“Put option” on $10 billion
Sprint PCS 32.2 45% stake can be
Cingular 27.1 exercised by Vodafone
Nextel 24.5
 AT&T Wireless and T-
Alltell 24.4 Mobile USA are GSM
TracFone 12.2
 Reference Sources
BIGresearch New York Times
CeBit News PMN Publications
CNET News.com Qualcomm
Duke University Reuters
Gartner Robert Kahn, “Father of the
Internet”
GlobalWirelessNews
The Motley Fool
GSM association
This Is Money.com
gsm world T-Mobile International
Intermarket Group Vodafone
Microsoft Wall Street Journal
MIT University World Investment AK
MULTEX Yahoo! Finance
About the Authors
Alex Cutrim is an Electronics Engineer major
He has extensive practical background in
Strategic Intelligence functions
He has worked in several areas of The Coca-
Cola Company and Sony
alexc@domain.com.br

Suzana Roma is a Statistician major

She has broad experience with applied statistics
to Marketing Intelligence
She has worked in several consumer oriented
companies such as Coca-Cola, Telemar
(Telecom) and Fininvest (Bank)
suziroma@yahoo.com