Industry KPIs Study Industry KPIs
Š 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
www.sutherlandglobal.com January 10, 2013
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Industry Industry KPI’s KPI’s -- Telecom Telecom Client • The client is a mobile application provider in the US
Client Ask • The client commissioned SGS to conduct a study to understand the KPIs of telecom market in the US • The client also needed to study the size of the mobile applications market, mobile data market, device sales and churn rates
Sutherland’s Solution • SGS used extensive secondary research using its internal database and to obtain relevant information to achieve the desired outcome of this engagement • SGS used certain third-party databases for telecom sector and thereafter conducted country-wide and cross-country benchmarking of the telecom industry • Generated insights based on complex analysis on the raw and fragmented data available across all the data source
Benefits to the Client • Analysis of the key trends in the KPIs of telecom companies • Detailed understanding of the high growth verticals of the telecom industry • Helped client gauge the market of mobile applications and taking strategic decisions on their product development
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
www.sutherlandglobal.com January 10, 2013
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US Telecom market structure 2005
2012 US Telecom has evolved into a DUO-POLY market during 200512, with AT&T and Verizon currently accounting for 2/3rd of the subscriber market share
Source: Bloomberg
North America – Pre-paid & Post-paid subscribers
Prepaid vs. Postpaid
North America is largely a postpaid market
For 2011, postpaid accounted ~80% of the total subscriber base
Share of postpaid has gradually declined over time
Postpaid share down from 87% in 2000 to 78% in 2011
Source: Bloomberg, Ovum Consulting, Sutherland Research
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
www.sutherlandglobal.com January 10, 2013
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Data revenues – North America & World Data Revenues – World & North America/Share of NA to World
Data Revenue:
350
30%
300
25%
250
20%
Data revenues in North America have grown at a strong rate compared to World
During 2001-10, data revenues in North America grew at a CAGR of 78% compared to world data revenues which grew at a significantly lower rate of 28%
The rapid adoption of new technology is leading to explosive growth in data revenue in North America
200
s n ilo B
15% 150 10%
100
5%
50 0
0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 North America data revenues
Global data revenues
Share (RHS)
Source: Bloomberg, Ovum Consulting, Sutherland Research
North America – Total & Data Revenues
Data Revenue:
Data Remains the Key Driver of Wireless Services Growth in US
The high propensity of US subscriber towards new telecom technology 3G/4G is driving the data revenue growth
Data revenues have been largely contributing to growth in wireless revenues
Source: Bloomberg, Ovum Consulting, Sutherland Research
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
www.sutherlandglobal.com January 10, 2013
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3G Subscriber base & Smartphone penetration North America – 3G subscribers & penetration
3G subscriber base and penetration
US has the highest 3G subscriber base globally by quite a margin compared to other markets
Moreover, it also has a significant room for growth, as the latest 3G penetration stands at around 64%
The strong 3G adoption is driven by the fast adoption of smartphones
Smartphones gained rapid adoption among mainstream consumer segments across markets, nearly 42% of all US mobile subscribers now use smartphones
Source: Bloomberg, Ovum Consulting, Sutherland Research
Smartphone penetration – World & North America
Smartphone penetration
North America has a very high smart-phone penetration rate compared to the world
This is expected to improve at a better rate going forward
This is a critical factor leading to high data revenue growth
Source: Bloomberg, Ovum Consulting, Sutherland Research
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
www.sutherlandglobal.com January 10, 2013
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Device sales & Churn Verizon device sales – Iphone/LTE
Verizon device sales
5.0 4.5
Verizon Iphone sales have been stable over the last five quarters
While LTE device sales have been growing at a strong rate aiding customer acquisition
Verizon’s LTE network provides it with a slight edge, on account of performance and speeds, when compared to HSDPA+ networks
4.0 3.5
s n ilo M
3.0 2.5 2.0 1.5 1.0
Smartphone penetration
0.5 0.0 Q12011
Q22011 Total LTE Device Sales
Q32011
Q42011 iPhone Sales
Source: Bloomberg, Sutherland Research
AT&T Iphone sales
Source: Bloomberg, Sutherland Research
Q12012
AT&T Iphone sales have been stable, despite Iphone being available on more networks now Churn rate – US, Verizon & AT&T
Source: Bloomberg, Sutherland Research
© 2011 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc.
www.sutherlandglobal.com January 10, 2013
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