BCGreport2【网通战略咨询报告2】

Wholesale/ carrier
Current market size
Residential
Med/large enterprise customers
Carriers
Potential traffic per consumer
AGENDA
Business Models • Domestic and international long-distance voice • Wholesale/carrier • Enterprise solutions • Issues going forward
Assessment of market
opportunities
Economic modeling
Choice of business models to pursue and timing
Major issues
What type of regulatory environment will evolve in China?
Will equal access for voice and data be granted and when?
What effect will WTO have?
How will China datacom market develop?
How large is the overall opportunity for a new entrant?
Establish high bandwidth international gateway to differentiate internet access
Superior service with clear positioning
• “The clear alternative to CT”
Enterprise Solutions
METHODOLOGY BEING USED TO DEVELOP BUSINESS MODELS AND OVERALL STRATEGY
Strategic implications and capabilities assessment
Regulatory and competitive analysis
Overall market sizing and revenue forecast by product area
Predicted cash flow profile by business model and selected scenarios
- Current areas of focus
Utilize LMDS in intermediate cities and areas where time to market is critical
POTENTIAL BUSINESS MODELS COVER WIDE RANGE OF PRODUCT/MARKET ALTERNATIVES
Accelerate vendor selection and backbone construction; time to market critical
Wholesale revenue provides significant upside potential
• Majority of wholesale revenue relies on access to mobile carriers
• “Cash cow” for funding other business model development
Pursue prefix and equal access long distance for business customers as soon as possible to begin establishing relationships
CNC AT A CRITICAL STRATEGIC CROSSROADS
Preliminary Conclusions
Offnet VOIP predicted to generate to provide breakeven economics for building backbone1
Recommendations/Decisions to be Made
Focused Deployment • Leverage existing conduits to lay in major urban areas
Superior service and bandwidth • Target CT’s weakness in service and bandwidth
Key strategic principles Regulatory overview Market overview Competition overview Business models Next steps
CONTENT
AGENDA
Business Models • Domestic and international long-distance voice • Wholesale/carrier • Enterprise solutions • Issues going forward
Do not overextend resources in VOIP as it does not fit CNC’s longБайду номын сангаасterm strategy
Create “dial-around” solutions for business and interconnect terms
Aggressive deployment of backbone infrastructure to provide unparalleled bandwidth
Cover POPs in all major calling zones; develop local leased lines network in key locations
Position offnet voice as first product from “China’s first datacom carrier”
How do the market sizing and share assumptions translate into overall top line revenue for CNC?
What capital investments will be necessary to build out metro and long haul fiber networks?
APPROACH TO DOMESTIC AND INTERNATIONAL VOICE BUSINESS MODEL
Objectives
Hypothesized Approach
Capture early revenue from launch of prepaid IP calling cards
Commitment to utilizing IP/DWDM invlolves risk to mobile carrier business
• RFP to vendors should be based on product requirements vs. technology
Enterprise solutions economics very attractive, but substantial complexity and resources involved
ISP
Wholesale/Carrier Target mobile carriers and ISPs with backbone transport; consider supplying fixed-line incumbents
Top 60 POPs by end of year 2000 utilizing mix of leased lines from CT and CNC network
(1) Assuming settlement fees of 10% of revenue
BUSINESS MODELS SUMMARY: THREE CORE ELEMENTS
Overall approach
Where
How
- 17930 -
Long distance voice
Capture early revenue from to fund development of subsequent business models
Roadmap for pursuing business models and
expected financial performance
Integrated approach to CNC business plan
Expected output
Regulatory mapping and CNC share predictions across scenarios
Staging of investments and service launch must consider tradeoff between quality of service and coverage
High-bandwidth international gateway critical Preliminary talks with international carriers to success in both wholesale and enterprise should begin ASAP
Manage pricing and product life cycle effectively to maximize total margin and avoid investing in declining products
Do not overextend ourselves nor blur our “datacom” image
Emphasize quality image/brand to distinguish from CT and Unicom--position calling card as first step in becoming a next generation full services provider
Economic predictions highly sensitive to a set of key assumptions
Scenario modeling will help us decide where to focus
Overarching question: Can CNC successfully pursue all opportunities outlined in the short/medium term?
Capture datacom growth in key business centers with leadingedge products and superior customer service
Top business districts in major urban areas; only the most dense areas in short term
Fight the regulatory battle to ensure favorable approaches to equal access and interconnect
Market calling cards to business customers in the short term for travelling personnel
Opportunity for growth
Products
Emerging datacom
Emerging data niche
Data Voice
Consumer ISP?
Enterprise solutions
Domestic and International Long Distance Voice