网通的战略咨询报告书(英文版)(ppt 52页).ppt

,CONTENT,KeystrategicprinciplesRegulatoryoverviewMarketoverviewCompetitionoverviewBusinessmodelsNextsteps,AGENDA,BusinessModelsDomesticandinternationallong-distancevoiceWholesale/carrierEnterprisesolutionsIssuesgoingforward,Economicmodeling,Choiceofbusinessmodelstopursueandtiming,RoadmapforpursuingbusinessmodelsandexpectedfinancialperformanceIntegratedapproachtoCNCbusinessplan,Majorissues,Expectedoutput,HowdothemarketsizingandshareassumptionstranslateintooveralltoplinerevenueforCNC?Whatcapitalinvestmentswillbenecessarytobuildoutmetroandlonghaulfibernetworks?Predictedcashflowprofilebybusinessmodelandselectedscenarios,Assessmentofmarketopportunities,HowwillChinadatacommarketdevelop?Howlargeistheoverallopportunityforanewentrant?Overallmarketsizingandrevenueforecastbyproductarea,Regulatoryandcompetitiveanalysis,WhattypeofregulatoryenvironmentwillevolveinChina?Willequalaccessforvoiceanddatabegrantedandwhen?WhateffectwillWTOhave?RegulatorymappingandCNCsharepredictionsacrossscenarios,Strategicimplicationsandcapabilitiesassessment,METHODOLOGYBEINGUSEDTODEVELOPBUSINESSMODELSANDOVERALLSTRATEGY,-Currentareasoffocus,CNCATACRITICALSTRATEGICCROSSROADS,PreliminaryConclusions,Recommendations/DecisionstobeMade,OffnetVOIPpredictedtogeneratetoprovidebreakeveneconomicsforbuildingbackbone1WholesalerevenueprovidessignificantupsidepotentialMajorityofwholesalerevenuereliesonaccesstomobilecarriersEnterprisesolutionseconomicsveryattractive,butsubstantialcomplexityandresourcesinvolvedHigh-bandwidthinternationalgatewaycriticaltosuccessinbothwholesaleandenterpriseEconomicpredictionshighlysensitivetoasetofkeyassumptions,Acceleratevendorselectionandbackboneconstruction;timetomarketcriticalCommitmenttoutilizingIP/DWDMinvlolvesrisktomobilecarrierbusinessRFPtovendorsshouldbebasedonproductrequirementsvs.technologyStagingofinvestmentsandservicelaunchmustconsidertradeoffbetweenqualityofserviceandcoveragePreliminarytalkswithinternationalcarriersshouldbeginASAPScenariomodelingwillhelpusdecidewheretofocus,Overarchingquestion:CanCNCsuccessfullypursueallopportunitiesoutlinedintheshort/mediumterm?,(1)Assumingsettlementfeesof10%ofrevenue,OverallapproachWhereHow,BUSINESSMODELSSUMMARY:THREECOREELEMENTS,EnterpriseSolutions,Capturedatacomgrowthinkeybusinesscenterswithleading-edgeproductsandsuperiorcustomerserviceTopbusinessdistrictsinmajorurbanareas;onlythemostdenseareasinshorttermFocusedDeploymentLeverageexistingconduitstolayinmajorurbanareasSuperiorserviceandbandwidthTargetCTsweaknessinserviceandbandwidthUtilizeLMDSinintermediatecitiesandareaswheretimetomarketiscritical,Wholesale/Carrier,TargetmobilecarriersandISPswithbackbonetransport;considersupplyingfixed-lineincumbentsCoverPOPsinallmajorcallingzones;developlocalleasedlinesnetworkinkeylocationsAggressivedeploymentofbackboneinfrastructuretoprovideunparalleledbandwidthEstablishhighbandwidthinternationalgatewaytodifferentiateinternetaccessSuperiorservicewithclearpositioning“TheclearalternativetoCT”,Longdistancevoice,CaptureearlyrevenuefromtofunddevelopmentofsubsequentbusinessmodelsTop60POPsbyendofyear2000utilizingmixofleasedlinesfromCTandCNCnetworkPositionoffnetvoiceasfirstproductfrom“Chinasfirstdatacomcarrier”DonotoverextendresourcesinVOIPasitdoesnotfitCNCslongtermstrategyCreate“dial-around”solutionsforbusinessandinterconnectterms,-17930-,Enterprisesolutions,POTENTIALBUSINESSMODELSCOVERWIDERANGEOFPRODUCT/MARKETALTERNATIVES,Opportunityforgrowth,Currentmarketsize,Wholesale/carrier,ConsumerISP?,DomesticandInternationalLongDistanceVoice,Residential,Med/largeenterprisecustomers,Carriers,Potentialtrafficperconsumer,Products,Emergingdatacom,Data,Voice,Emergingdataniche,AGENDA,BusinessModelsDomesticandinternationallong-distancevoiceWholesale/carrierEnterprisesolutionsIssuesgoingforward,APPROACHTODOMESTICANDINTERNATIONALVOICEBUSINESSMODEL,Objectives,HypothesizedApproach,CaptureearlyrevenuefromlaunchofprepaidIPcallingcards“Cashcow”forfundingotherbusinessmodeldevelopmentPursueprefixandequalaccesslongdistanceforbusinesscustomersassoonaspossibletobeginestablishingrelationshipsManagepricingandproductlifecycleeffectivelytomaximizetotalmarginandavoidinvestingindecliningproductsDonotoverextendourselvesnorblurour“datacom”image,FighttheregulatorybattletoensurefavorableapproachestoequalaccessandinterconnectMarketcallingcardstobusinesscustomersintheshorttermfortravellingpersonnelEmphasizequalityimage/brandtodistinguishfromCTandUnicom-positioncallingcardasfirststepinbecominganextgenerationfullservicesproviderEstablishmechanismstolinkmarketingexpenditureswithrevenueandmargingrowthbyproducttoensureeffectiveinvestmentEmphasizelowcosttargetedmarketingandloyaltyprogramsDonotoverextendAlwaysemphasizeadvancedtechnologyandevolutiontofullservicesprovision,DOMESTICANDINTERNATIONALVOICESUMMARY,PreliminaryEconomics,PhaseICapEx(2000,2001):3.8BRMBFiber/construction:2.4BRMBIP/DWDMequipment:720MRMBPOP/VOIP:530MRMBOSS/Networkmanagementsystem:100MRMBOpExexpectedtobe30%ofrevenueby2002Marketshareandrevenueestimates-2002OffnetDLD:30%OffnetILD:30%$2BRMBIPIntl.termination:27%5yearNPV:Essentiallybreakevenconsideringoffnetvoicealone1,KeyIssuestobeAddressed,InterconnectagreementswithlocalPTAs;attempttoobtainblanketpolicyfromMIIInternationalgatewaylicenseandconnectivitySettlementchargescommensuratewithVOIPpricingDevelopmentofbusinessoffnetstrategyScalable“dial-around”solutionsinshorttermEqualaccesslongertermQualityofserviceforvoice,mustapproachswitchedqualityrapidlyPointofdiminishingreturnsforaddingVOIPgatewaysvs.strategicvalueofprovidingcoverage,(1)Highlysensitivetosettlementfees,LARGEMARKETWITHPOTENTIALTOGAINSHAREQUICKLY,Newentrantstypicallygainsharequickly,Example:IDDandDLDservices,Marketsizeable-off-nettrafficaccountsfor15%oftotalDLD/ILDrevenueby2004,Source:ChinaTelecomannualreports;CNCsteaminputs;BCGsurveys,analysisvariousbenchmarks;BCGanalysis,Voicerevenue,Shareassumptions,CNCRevenue(RMBBN),Off-NetDLD,%oftotalCNCrevenue,100%,76%,37%,30%,23%,16%,Off-NetILD,InternationalTermination,19993%80%1%3%80%1%5%80%0%,Off-NetDLDOff-netshareoftotalDLDGeographiccoverageofCNCCNCsharewithincoverageOff-NetILDOff-netshareoftotalILDGeographiccoverageofCNCCNCsharewithincoverageInternationalTerminationIPshareoftotalGeographiccoverageofCNCCNCsharewithincoverage,200010%60%25%11%60%25%11%60%20%,200117%75%29%18%75%29%18%75%25%,200223%90%33%26%90%33%24%90%30%,200330%100%30%33%100%30%30%100%30%,200432%100%28%35%100%28%35%100%31%,PRELIMINARYECONOMICSFORLONGDISTANCEVOICEMODEL(PHASEIBUILDOUT)VOIPRevenueAloneJustifiesBuildingBackbone,5yearPV(1)(MRMB),CapEX,OpEx,Revenue,5yearNPV15%:,-500MRMB,5yearIRR:,12%,EssentiallybreakeveneconomicsforoperatingbackboneforVOIPonly,VOIP(2),Backboneconstruction,Backbone,InternationalterminationIDDDLD,IPPOP/AccessplatformOSS,Presentvalueofcashflows,(1)Assuming15%costofcapital(2)Includingsettlementchargesestimatedat10%ofVOIPrevenue,andmarketing/salesat10%ofrevenue(3)BackboneOpExchargesallocated1/3eachtoVOIP,wholesale,andenterprisebusinessmodeleconomicsSource:BCGbenchmarkdatabase;industryinterviews;BCGanalysis,AGENDA,BusinessModelsDomesticandinternationallong-distancevoiceWholesale/carrierEnterprisesolutionsIssuesgoingforward,APPROACHTOWHOLESALE/CARRIERBUSINESSMODEL,Objectives,HypothesizedApproach,DevelopwholesalebusinessastrafficgeneratortoimproveeconomicsofbackbonethroughhigherutilizationBecomethewholesalecarrierofchoicewithtechnologicallysuperiorserviceofferingsincludinghighbandwidthinternationalgatewayconnectivityConsiderwholesalingaccesstoCT,Unicom,andJitongdependingoncompetitiveimplicationsSuperiorcustomerservicewithclearpositioning“TheclearalternativetoCT”,AggressivedeploymentofbackboneinfrastructureConnectingtop15citiesbyendof2000andexpandingtotop50citiesby2002Seekpartnershipstoestablishhighbandwidthinternationalgatewayconnectivity-absolutelyessentialfordifferentiatingCNCofferingDevelopinterconnectioncapabilitiesinallmajorPOPsandmobilebasestationsinkeygeographicallocationsWholesaleaccesstoincumbentproviderswherefeasible,butdonotwholesalesourcesofcompetitiveadvantage(e.g.,enhanceddataservicessuchasIPVPNs)RolloutproductofferinginstagedmannertoensurequalityofserviceInternetconnectivityMobileinterconnectAccessportstobackbone,WHOLESALE/CARRIERSUMMARY,PreliminaryEconomics,PhaseICapEx(2000,2001):100MRMBISPaccessplatform:50MRMBOSS/Provisioningsystems:50MRMBOpExexpectedtobe10%ofrevenueby20021Marketshareandrevenueestimates-2002Mobile(backbone):15%ISPs:9%1.1BRMBAccessports:100%2Darkfiber:100%25yearNPV:$2.1BRMBAssumeslaunchdateof3Q2000forleasedlinesandrelativelyaggressivemobilesharesPotentiallytoooptimistic,KeyIssuestobeAddressed,Backbonetechnologyplatform-QOSforvoicevs.lowercostdeployment?High-bandwidthinternationalgatewayparamounttodifferentiatingISPaccessFavorableregulatorybackingforcourtingregionalCTmobilecarriersEnsuringexistingVOIPgatewayscanservewholesaleneedsRevenueopportunityofwholesalingdarkfibervs.enablingcompetitionOrganizationalchallenges,(1)IncludingallocationofbackboneOpEx(2)MarketestimatesbasedonrevenuegenerationbyCNCalone,POTENTIALWHOLESALECUSTOMERSINCLUDEISPs,MOBILEOPERATORS,ANDFIXEDLINECARRIERS,ISPsoffersignificantpotentialifCNCcanprovidesuperiorbandwidthaccessandtointernationalgatewayCurrentsatisfactionamongregionalISPsverylowInternationalgatewaylicenseinconjunctionwithhighbandwidthtrans-oceaniccarrieralliancecouldprovidevastlysuperiorserviceMobilecarrierswillbesearchingforlowercostalternativestocarrylongdistancetrafficduetointensifyingcompetitionCNCsnewhighcapacityVoIPnetworkandinternationalgatewaylikelytoyieldlowercostsFixedlinecarrierspotentiallylookingforalternativesExistinglong-haultransportinfrastructurelimitedChinaTelecomcouldevenbeapossiblecustomergivencurrentfocusonincreasingresidentialteledensity,OVERALLWHOLESALEMARKETSIZEISSUBSTANTIALANDGROWINGATAMODESTRATEAnticipatedPriceDecreaseinLeasedLinesLimitsOverallRevenueGrowth,LeasedLines-ISP,MarketSize(RMBB),15,Total,LeasedLines-Mobile,99-04CAGR,AccessPorts,LeasedLines-Paging,18,18,20,22,26,28,4%,41%,1%,152%,(1),9%,(1)01-04CAGRSource:CNCteaminputs;foreignbenchmarks;BCGanalysis,DarkFiber,68%,(1),CARRIERSSEEKINGALTERNATIVES.,ISPsdefinitelyseekingalternativestoCT,Mobilecarrierslikelytofollow,“Weneedatelecomserviceproviderthatisnotourcompetitor.”-Founder,Eastnet“ChinaTelecom,withtheirownnetworkdevelopmentplans,tendstostarveusoncapacityortoforceustopayinadvanceforexcesscapacity.”-Manager,Infohighway“ThefactthatittakesChinaTelecomtwomonthseverytimeweneedanextralinemakesitverydifficulttohaveourowncustomers.Wewantanotheroperatorwhocangetusleasedlinesfast.”-Manager,Infohighway,Mobilecarriersmightconsiderdivertingpartoftheirtraffictoalternativeserviceproviderswith:moreattractivepricinghigherqualityservicehigherbandwidthInterviewswithregionalmobilecarriersandUnicomneedtobeconductedtoverifypotential,BUTTECHNOLOGICALLIMITATIONSANDCOMPETITIVECHALLENGEAREIMPORTANTFACETSTOMANAGE,CompetitiveChallenge,TechnologicalLimitations,MobilecarriersmaybehesitanttouseVOIPtechnologyforprimaryapplicationsCarrierscurrentlyaddressingsoundqualityasamajorimprovementinitiativeVOIPhasyettodelivertoll-qualityvoicetransmission,evenonlandlineMobilecarriersmaytakeviewthatVOIPcouldfurtherdegradevoicequality,ChinaTelecomlikelytohaveadvantageincompetingshareofCTMobilesbusinessStrongformerintra-CTconnectionevenaftersplitExtensivebackbonecoverageandlargeTDMbasedcapacityUnicomMobileServicesbusinessastoughtarget,Buildpresencebyofferinglow-costtrialsandbackupcapacity,LobbyforclearregulationfromMIIonfreedomofchoiceforcarriers,PREDICTEDWHOLESALEECONOMICSADDSIGNIFICANTVALUETOVOIPBUSINESSMODELAdditionalCapExandOpExMinimal,5yearPV(1)(MRMB),CapEX,OpEx,Revenue,5yearNPV15%:,2.1BRMB,5yearIRR:,40%,Wholesalecriticaltoenhancingprofitabilityofbackbone,VOIP,Backboneallocation,DarkFiberAccessportsISPsMobileoperatorsVOIP,VOIPISPaccessOSS,(1)Assuming15%costofcapitalSource:BCGbenchmarkdatabase;industryinterviews;BCGanalysis,OSS/provisioning,Presentvalueofcashflows,8,000,7,000,5,000,1,000,6,000,-3,000,-4,000,AGENDA,BusinessModelsDomesticandinternationallong-distancevoiceWholesale/carrierEnterprisesolutionsIssuesgoingforward,APPROACHTOENTERPRISESOLUTIONSBUSINESSMODEL,Objectives,HypothesizedApproach,Capturestrongshareamongmedium/largebusinessbyofferingenhanceddatacomsolutionsGoaltoestablishclearpositionasbestservice/qualityproviderinmajormarketsUtilizemostcosteffectivedeploymenttechnologiestocovermajormetroareasMinimizehead-to-headcompetitionbyofferingdifferentiated,data-centricproducts-attempttodrivedatacommarketDevelopimageasfast,responsivesolutionsproviderEnablecompetitiveadvantageforbusinesscustomersthroughdatacomForbuildingmanagers:maketheirbuildingsmoreattractivetotenants,DeploymenttotargetkeybuildingsinmajormetropolitanareasFourcitiesbyyear2000/01Top15citiesby2001Fiberinmostdenseurbanhi-riseareasandLMDStocomplementandservelessdenseareasInitialleadproductswillbelowcostvoiceoverIPandhighbandwidthinternetaccessMigrationtofulldatacomsolutionsascustomerbaseandcapabilitiesgrowQualitycustomerservicemoreimportantshorttermthanfullproductofferingEmphasisoneaseofuseandfastprovisioningversuscompetitors-exploitCTsweaknessesEducationofcustomersonuseofdatacomproductsascompetitiveweaponsMarketingpartnerwithkeybuildingmanagers,ENTERPRISESOLUTIONSSUMMARY,PreliminaryEconomics,PhaseICapitalInvestment(2000,2001):1.1BRMBFirstfourcities(assumingfiber):650MRMBAdditional11cities1:400MRMBOpExexpectedtobe40%ofrevenueby2002Marketshareandrevenueestimates-2002OffnetVoice2:20%Existingdata:10%1.1BRMBEmergingdata:5%5yearNPV:Roughly1.2BRMBAssumeslaunchdateof3Q2000fordataservicesLikelytoooptimistic,KeyIssuestobeAddressed,RightofwayforexistingductsanddiggingPartnershipstrategyforhighbandwidthIGWRightstoLMDSfrequencyspectrumArethe15citiesdesignatedforPhaseIbuildouttheright15citiesforlocalaccess?Tradeoffbetweenpureeconomicsbycityvs.strategicvalueofprovidingend-to-endconnectivityWhatisarealistictimeframeforlaunch?Magnitudeoforganizationalandhumanresourcerequirements,(1)AssumingLMDScapitalandrevenue2timesFuzhouestimateforcities11-15;3timesFuzhouestimateforcities5-10(2)Assumesnolocalvoicerevenuethrough2004,ENTERPRISESOLUTIONSBUSINESSMODELMOSTCOMPLEXWITHHIGHCAPEXANDOPEXREQUIREMENTS.,BuildingmetropolitanfiberringstoofferaccesstomediumandlargebusinessesposessignificantchallengeOperatingexpensesrequireddwarfslonghaulnetworkcostsonapercitybasisComplexityinobtainingnight-of-wayvariesbydistrictswithineachcityDesigningfiberrouteandnetworkconfigurationrequiressignificantexperienceConvertingcustomerstofullCNCservicemaynotbeaseasyasitseemsonsurfaceInitialriskforcompaniesutilizingnewentrantCoverageissuesforofferingservicetoallbusinesslocationsExperiencedsales-forcewithestablishedrelationshipsamust,BUTCOMPRISESTREMENDOUSUPSIDEPOTENTIAL,InternetAccess,LeasedLines,ILD,DLD,Local,Other,Portal,BroadbandContent,WebHosting/Collocation,ExistingServices,EmergingServices,98-04CAGR,124%,40%,-10%,7%,11%,IPVPN,BroadbandNetworkApplications,71%,83%,186%,98%,111%,286%,00-04CAGR,Marketsize(RMBBN),Marketsize(RMBBN),78,96,187,Overall,16%,Overall,86%,3,32,Source:CNCteaminputs;foreignbenchmarks;BCGanalysis,CUSTOMERNEEDSEXISTTHRUGHOUTTHEVALUECHAINCTsOfferingYieldsSignificantGaps,Learn,Buy,Get,Use/support,Pay,Customervaluechain,Needsidentified,HowdatacomservicescanhelptheirbusinessAssistancedeployingsolutions,Quickerandmoreconvenientapplicationchannels,Rapidandreliableprovisioning,Faster,reliablerepairservices,Prompt,customizedbilling,LackcustomerfocusSolutionsvirtuallynon-existentMostlyone-wayproductmarketing,NocustomerinputforprovisioningCTdeterminesqueuewithoutspecifictimingNopenaltiesformissedappointments,NegligentrepairserviceSlowfulfillmentBCGanalysis,STAGEDPRODUCTINTRODUCTIONNECESSARYTOMANAGEQUALITYHypothesizedProductIntroductions,Voice,Data,2000,2001,2002,2003,2004,2008,PhaseIindustryinterviews;BCGanalysis;realestateagencyinterviews;fieldanalysis,Powerprovisioning,etc.,Fiberconstruction,Rightofway,Presentvalueofcashflows,MEDIUMSIZEDCITIESWITHHIGHGDP/CAPITASUCHASFUZHOUBESTSERVEDWITHLMDSSOLUTION,Fiberlength:Alongroad:#LMDSstation:,5000M1,LakeFiberalongroadRailwayRailwaystationRoadLMDSstationMajorbuildingsAreaserved,S,(1)MoredetailedfieldanalysisrequiredtomapbuildingsandmosteffectiveLMDSpositioning;assumes3.5kmradiusforLMDSarea(2)Assumehalfofthebuildingsareprimebusinessbuildingsforeconomicmodeling,S,R,PRELIMINARYFUZHOUECONOMICSUTILIZINGLMDSVERYFAVORABLE,5yearPV(1)(MRMB),CapEX,OpEx,Revenue,5yearNPV15%:,20MRMB,5yearIRR:,60%,LMDSsolutionsformediumsizedcitieswillplayacriticalroleindevelopingenterprisesolutions,SGindustryinterviews;BCGanalysis;realestateagencyprovideddata,Bldgequipment,SpectrumfeesFibertoPOP,Presentvalueofcashflows,OTHERCITIESOFSIZEABLEPOPULATIONBUTRELATIVELYLOWGDP/CAPITAMAYNOTWARRANTINVESTMENTExample:Shijiazhuang,RailwayRoadLMDSstationMajorbuildingsAreaserved,S,S,(1)MoredetailedfieldanalysisrequiredtomapbuildingsandmosteffectiveLMDSpositioning;assumes3.5kmradiusforLMDSarea(2)Assumehalfofthebuildingsareprimebusinessbuildingsforeconomicmodeling,OVERALLECONOMICSAPPEARMARGINALFORSHIJIAZHUANG,5yearPV(1)(MRMB),CapEX,OpEx,Revenue,5yearNPV15%:,-3MRMB,5yearIRR:,5%,Citieswithoutdensebusinessdistrictsmaynotbeattractiveenterprisemarketsregardlessofoverallsize,SGindustryinterviews;BCGanalysis;realestateagencyprovideddata,Spectrum,CPEBldg.equipment,Presentvalueofcashflows,OVERALLREVENUEANDMARKETSHAREEXPECTATIONS:ENTERPRISESOLUTIONS,Predominatelyvoice(DLD/ILD)revenueinthefirsttwoyears;migratingtodataandInternetservicesby2002,CNCrevenue(RMBBN),InternetAccess,LeasedLines,ILD,DLD,Shareassumptions,OtherEmergingServices,WebHosting/Collocation,Source:CNCteaminputs;foreignbenchmarks;BCGanalysis,19993%80%1%3%80%1%0%0%0%0%0%0%,DLDOff-netshareoftotalDLDGeographiccoverageofCNCCNCsharewithincoverageILDOff-netshareoftotalILDGeographiccoverageofCNCCNCsharewithincoverageLeasedLi