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Dr. Girish PathakPresident, ITE Services Inc.
Transformation of Caribbean Service Providers
CANTO conference, June 21 2006
… unleashing the business potential of digital convergenceITE servicesITE services
agenda
macro technology trends, 1996-2005
case for transformation @TELUS, circa 2001
the transformation – before, after and the process … 2001-04
emerging business issues/opportunities, 2005-06
transformation at a Caribbean service provider … 2006
checklist for service providers
ITE Services … value proposition
q/a
… unleashing the business potential of digital convergenceITE servicesITE services
macro technology trends, 1996-2005
I. user interface … global adoption of internet browsers and search-engines
II. applications … success of commercially-off-the-shelf software applications and (outsourced) services
III. broadband access … both wire-less and wire-line
IV. network connectivity … convergence to IP, capable of delivering voice, data, and video applications
V. underpinning of the digital era, silicon technology … unabated pace of progress, as per Moore’s law
… unleashing the business potential of digital convergenceITE servicesITE services
case for transformation at TELUS, 2001
TELUS, $5B Canadian monopoly in west, emerges as a fledgling national player from many acquisitions, and a new management team
strong presence in BC, Alberta, and some parts of Quebec & Ontario telecom market is on a wild ride … dot-com bust of 2001 … pending contract negotiations between management and union
network heterogeneity is reflected in rising costs (CapEX and OpEx) specially, capital intensity (CpEx/Rev) has to come down from 20s
TELUS lacks network-enabled competitive advantage or differentiated value proposition in the national business marketplace
Bell Canada is viewed as the market and technology leader
go-to-market organizations, with revenue of $7B, find legacy network costs, coverage, and reliability an easy scapegoat
… unleashing the business potential of digital convergenceITE servicesITE services
the xFormation – before, after, process
product mix of 42% voice, 27% mobile, and 16% LD
$2+B EBIDTA with 2+M mobile & 200K HSIA subs (bare 30% of the total broadband subs)
$5+B full service provider
The stock price is around $15.00
product mix of 36% mobile, 35% voice, and 20% data
$3-B EBIDTA with 4M mobile & 700K HSIA subs (about 45% of the total broadband subs)
$6+B full service provider
enterprise value rose by 40% during 2001-04, stock at $20.00
services, people, technology, systems
customer set profitability
… unleashing the business potential of digital convergenceITE servicesITE services
emerging business issues/opportunities
revenue … major parts under attack Wire-line revenue under attack … wireless substitution & VoIP Wireless, with lower barriers of entry, under intense competition
competition … on all, traditional and non-traditional, fronts [regional] wireless providers and cable providers non-facility based VoIP providers, ISPs, etc.
technology … legacy infrastructure, the biggest drag On the other hand though, IP-based infrastructures promise step difference in capabilities,
optimization of CapEx & OpEx; and will offer requisite reliability/QoS, if engineered well
customers … among all issues there is a silver lining Consumers … interested in trusted partner, in face of tech complexity at home Businesses … interested in outsourcing non-core competencies
market dynamics … consolidation of equipment as well as of service providers
… unleashing the business potential of digital convergenceITE servicesITE services
xFormation at a Caribbean SP
to protect and grow profitable revenue base in wire-line and wire-less business
to bring customer-relevancy & efficiency in all operations using state of the art technologies, process discipline & automation
to diversify product-mix from exposure to substitution, bypass or leap-frog technologies
to develop new long-term (sustainable) growth opportunities
… unleashing the business potential of digital convergenceITE servicesITE services
checklist for service providers
1. Are we relevant to (and engaged with) our customers, both businesses & consumers?
More specifically, do our key customers invite us during their strategic planning, whether they are private or public entity?
2. Is our network and operations cost-efficient? Are we in leading quartile?
3. Are our services enabling strategic differentiation in the capabilities of businesses or communities that we serve?
Do we have leading edge services and networks?
… unleashing the business potential of digital convergenceITE servicesITE services
ITE Services … value proposition
for telecom/cable business or ICT executives• help successfully execute transformation from legacy to leading-edge
products, technology/operations, and to develop strategic clients … using proven methodology
• provide distinctive assessment of ICT technologies … using proprietary tools
• help deliver breakthrough improvements in the effectiveness of IT organizations utilizing proprietary metrics
for technology investors• superior financial analysis on IT & telecom investments
