This document summarizes the telecommunications market in the Netherlands. It notes that the Dutch mobile market has high price levels compared to other EU countries, with 4 major players pursuing converged fixed and mobile strategies. True convergence involves providing seamless access across devices and networks. The fixed broadband market is shifting from DSL to fiber, while the business market is also converging and shifting value to mobile and "all-IP" services. A 4G-centric mobile operator could capture significant value by providing seamless fixed-mobile services on 4G and fiber networks.

1. 1
MARKET OVERVIEW
Bob Bunnik

2. 2
NL is a concentrated and competitive market: 4 out of 5 players have a converged strategy
Market: Consolidation
Cable: ‘mobility’ through WiFi, plus MVNO+limited own-roll-out
Full-MVNO on TMNL, transition to MNO
M&A FttH players
‘Quad Play’
‘Convergence Strategy’
Fixed broadband Mobile (3 MNOs & their main brands)

3. 3
Convergence from a customer perspective
Fixed and mobile are converging, providing seamless access on any device and network.
Partnerships are key to enhance the value proposition for both consumer and business.
Services DevicesAccess
Residential: ‘Packaging’ convergence Business: Real technical convergence
True Convergence is about providing seamless access and convenience (‘one-stop-shop’)

4. 4
Mobile market price levels: NL vs. EU
• The Netherlands mobile market behaves as a protected market with very high price levels.
“774% difference
in Phone call prices
across the EU”
“Up to 100x difference
In Data-only tariff volume
allowances in EU27”
EU Mobile Data price comparison EU Mobile Voice price comparison
Sources: REWHEEL (2013), EU27 Mobile Data Cost Competitiveness Report and EU Digital Agenda Scorecard 2012 (Aug. 2013)
Average cost per minute (€ cents) in mobile communications,
2011

5. 5
Mobile market: 4G positioned as premium
The Dutch market is moving towards flat-fee Voice & SMS but still with high price levels.
VodafoneKPN

6. 6
Mobile market shares and value
Stable market share development, growth within mobile data
Revenue Market Shares 2005-2012
(x%)
NL Mobile Service Revenue’s 2012-2017
(mEUR)
Sources: Tele2 research and TelecomPaper Q2-2013
3503
3230
2990
2812 2647 2490
2294
2230
2288 2377 2493 2626
0
1000
2000
3000
4000
5000
6000
7000
2012 2013 2014 2015 2016 2017
Voice Non-Voice
0
10
20
30
40
50
60
KPN T-Mobile Vodafone

7. 7
A 4G-centric mobile operator could capture most value at lowest cost.
Mobile handset market development
35% SIM-only May 2013,
up from 26% May 2012
NL:
66%
Very high smartphone penetration
in the Netherlands
SIM-only sales continuous to increase
Source: Comscore Data Gem

8. 8
The addressable market for DSL is declining with clear growth in fiber
A technology shift in fixed broadband
2007 2008 2009 2010 2011 2012 2013 2014 2015
Internet
Internet
VoIP
Internet (VoIP)
TV
Internet
(VoIP/ Mobile)
TV
Internet
(Mobile)
OTT-TV
xDSL FttH
2016
45% 45% 45% 45% 44% 43%
7% 10% 13% 17% 20% 23%
48% 45% 42% 39% 36% 34%
2012 2013 2014 2015 2016 2017
Cable FttH DSL
Bandwidth demand pushed by TV & Video Fixed Broadband penetration: a technology shift
Sources: TelecomPaper (Q2-2013), Dutch Broadband

9. 9
Fixed business services shift to mobile & IP
Digital leased lines
IP VPN
Ethernet services
Internet access
IP voice
Traditional fixed voice
2015
100%
2%
19%
13%
20%
21%
25%
2010
100%
5%
19%
6%
21%
8%
41%
Fixed services
Mobile services
2015
5.249 mEUR
45%
55%
2010
5.268 mEUR
54%
46%
Business market value is also shifting to mobile and ‘All-IP’.
FttO regulation more favorable for alternative operators.
Dutch enterprise telecom services Fixed Services Revenue split
Sources: Tele2; Gartner, 2011; IDC, 2011; Cap Gemini Consulting analysis

10. 10
 Cloud/Hosted PBX is growing
 Fixed and Mobile are integrating
 Security is of increased importance
Increasing ICT complexity
 Decline in Voice usage
 Anywhere, anytime access on any device
 Fixed and Mobile convergence
‘Consumerisation’: from ‘investing’
to ‘using’ (Cloud)
Key trends in the business segment
Business market converges into ‘ICT’ business with increased attention for security.
Trends affecting the LE marketTrends affecting the SME market

11. 11
Key take-away: Significant growth potential in
mobile
Seamless fixed-mobile operators will be able to capture market value: 4G and fiber will be
pivotal.
Residential growth in Mobile Data &
Fixed Broadband on Fiber
B2B growth in Hosted Voice and
Mobile, Fiber to the office
increasingly important

12. 12
Q&A PART 1
Bob Bunnik