DNA Finland Ltd. Telecom Forum 2003 Role of mobile challenger - PowerPoint PPT Presentation

DNA Finland Ltd. Telecom Forum 2003 Role of mobile challenger operator CEO Ari Tolonen

Finnet Close to the Customer – as a Team Finnet Close to the Customer – as a Team

The roles of companies in the Finnet Group Customers Companies and consumers Nationwide companies Operators 33 local telephone companies Finnet Oy Finnet Association DNA kalvot / 11/10/03 / 3

Key financial indicators of the Finnet Group € million 1-6 /2003 1-6 / 2002 change % Net sales 447 366 + 22 Profit for the financial year 28 0,5 Investments 66 70 - 6 Equity ratio 71% 75% No. of employees 5,132 4,292 + 20 2003 2002 change % No. of mobile subscriptions 710,000 209,000 + 340 No. of fixed-line subscriptions 800,000 800,000 DNA kalvot / 11/10/03 / 4

Finnet Oy • DNA Finland • Finnet Com • DNA Plus • Suomen 3 KTV Finnet Verkko Suomen 2G Kaukoverkko Ysi DNA kalvot / 11/10/03 / 5

DNA for consumers • dna mobile services • dna Internet connections and services • Digital TV services • Voice call services for fixed-line subscriptions DNA kalvot / 11/10/03 / 6

DNA Finland Ltd. • Finland’s third largest mobile operator utilizing GSM, GPRS and UMTS-technology • Owned by Finnet Oy • Sister company Suomen 2 G Oy – holds a GSM and UMTS license in Finland • Established in November 1999 • Started its commercial activities in February 2001 • Personnel at work 400 • Turnover in 2002 was 111 million € • Turnover estimate in 2003 is over 240 million € DNA kalvot / 11/10/03 / 7

GSM subscriptions and market shares Q3 / 2003 estimate 86 759; 1,9 % 23 000; 0,5 % Sonera 476 713; 10,3 % Radiolinja 277 280; 6,0 % TMF DNA Saunalahti Other 1 304 306; 28,3 % 2 441 000; 53,0 % DNA total 753.993 subscriptions, market share 16,3%

Broadband subscr. and market shares Q3 / 2003 Sonera Elisa 46 000; 14,6 % 100 000; 31,8 % Finnet Other 70 000; 22,3 % 98 000; 31,2 %

Our Services The Future

Estimated size and increase in Finnish IT- and Telecom-markets in 2000-2004 Million IT-market Telecom-market euro 12 000 10 000 8 000 6 000 4 000 2 000 0 2000 2001 2002 2003 2004 Source: Market-Visio, IT-investoinnit, -kustannukset ja –hankkeet Suomessa 2002-2005 (published 6/2003) DNA kalvot / 11/10/03 / 11

Fixed-line and mobile telephone connections in Finland 1990-1.9.2003 Fixed-line connections Mobile telephone connections 5 000 4 500 4 000 thousands 3 500 3 000 2 500 2 000 1 500 1 000 500 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 (1.9. estimate) Sources: Ministry of Transport and Communications, Statistics Finland and Mobile Communications DNA kalvot / 11/10/03 / 12

GSM-penetration in Finland 2000 - October 03 e 100 % 95 % 90 % 85 % 80 % 75 % 70 % 65 % 60 % 55 % 50 % October 2000 END Q1 / 2001 Q2 / 2001 Q3 / 2001 2001 END Q1 / 2002 Q2 / 2002 Q3 / 2002 2002 END Q1 / 2003 Q2 / 2003 Q3 / 2003 2003 e Penetration 71,0 % 72,9 % 75,1 % 76,7 % 79,5 % 80,0 % 82,0 % 83,4 % 87,0 % 86,4 % 87,6 % 88,7 % 88,6 %

Outgoing minutes of GSM mobile phone calls and change-% in Finland in 1995-2002 Million minut es Change-% Million minutes Change-% 8 000 200 7 000 175 6 000 150 5 000 125 4 000 100 3 000 75 2 000 50 1 000 25 0 0 1995 1996 1997 1998 1999 2000 2001 2002 Source: Statistics Finland, Telecommunications in Finland 2002 DNA kalvot / 11/10/03 / 14

Number of short messages and value of SMS market in Finland 1999-2003 EUR Number of short messages Value of SMS market Million million 1 600 200 1 400 175 1 200 150 1 000 125 800 100 600 75 400 50 200 25 0 0 1999 2000 2001 2002e 2003e e = Preliminary data Sources: Ministry of Transport and Communications; Short message market 2000-2003 and Telecommunications statistics 2002 DNA kalvot / 11/10/03 / 15

Fixed telephones and mobile telephones in households, % Fixed-line connect ions, percent age of households Mobile t elephone connect ions, percent age of households % % 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 1976 1981 1985 1990 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 August 2003. Sources: Statistics Finland: Consumer Survey, On the road to the Finnish Information Society DNA kalvot / 11/10/03 / 16

The price indices of voice communications in 1995-2002 (1995 = 100) 200 150 100 50 0 1995 1996 1997 1998 1999 2000 2001 2002 100 85,3 78,8 73,4 68,4 66,1 64,2 62 Mobile calls Local services 100 103,5 108,2 121,1 126,1 135,5 141,8 147,6 100 92,4 92,1 92,8 97,5 101,3 105 108,8 Long-distance calls 100 87,8 86,1 69,4 62,8 59 57,7 57,7 International calls 100 93 90,7 88,7 85,8 85,6 85,2 84,6 Total Source: Ministry of Transport and Communications/ Price level of the Finnish telecommunications charges 2002, 15/2003 DNA kalvot / 11/10/03 / 17

Future trends of the wireless services • 3G network infrastructure will be limited to urban areas and (E)GPRS networks will be dominant elsewhere in Finland • Service and network operators will have increased traffic but decreased margins • Voice ARPU reduces but messaging and VAS ARPU increases. • Potential ARPU at 2007 is € 45.0 (today ~ 40 €) • Mobile device will substitute fixed telephony in voice traffic and data traffic overtaking voice in fixed lines • In 2005 3G starts to accelerate and by 2007 more than 50% of mobile traffic volume is 3G based • Mobile devices will be used for micro payments, bookings, and entertainment • Entertainment will be the main driver on consumer market • Fast mobile data will be the most important VAS service for business users DNA kalvot / 11/10/03 / 18

The bubbles burst, the needs remain • The importance of telecommunications for the society is increasing all the time • Networking of companies and services changes the conventional methods of operation • Customers become more demanding • Closeness and security are highlighted DNA kalvot / 11/10/03 / 19

Finnet in brief Our Strategy

The role of Finnet in the future • The third full service operator with 25% of the Finnish telecom services market • Applies technologies and services to meet the customers’ needs better or faster than others • Serves and makes decisions close to the customer • Produces nationwide services in a networked and rapid manner DNA kalvot / 11/10/03 / 21

Our Strategy Networking • Efficiency is achieved through common processes, and added value is produced through local service Proximity • We make business decisions close to the customer • We concentrate on serving customers in Finland Difference • We stand out from our competition due to reasons related to geography and ownership • Our values, methods of service and operational models are different from others’ DNA kalvot / 11/10/03 / 22

Focus areas 1. Customers 1. Customers • Operations based on good • Operations based on good understanding of customer needs Marks: understanding of customer needs Marks: and expectations and expectations • Be a local and trusted service • Be a local and trusted service � Today � Today provider and partner provider and partner � Goal � Goal 2. Operations 3. Products 2. Operations 3. Products • Carefully selected product • Excellent operative • Carefully selected product • Excellent operative effectiveness and portfolio which is based on effectiveness and portfolio which is based on flexibility flexibility customer segmentation customer segmentation • Good competitiveness • Good competitiveness • Solid and stable basic • Solid and stable basic and proven quality and proven quality services services • Right timing in new service • Right timing in new service introduction introduction DNA kalvot / 11/10/03 / 23