1. Market leader strategies:case Sonera Seminar on Mobile operator strategies and games Valtteri Hietaluoma

2. Agenda Market leader strategy in general Telia-Sonera´s market leader strategy Nature of mobile operator business

3. Barriers • Entry barriers: • Investments, skills and other charges needed to enter into business. • Exit barriers • Costs on abandoning the product or business • Market equilibrium • If free entry and exit exists, demand and supply should be in balance (=market equilibrium) then profits always should be nominal

4. Exit barriers Low High Low, stable Returns Low Entry Barriers High, stable returns High, risky returns High Barriers and profitability Low entry barrier  lot of competition  low returns Low exit barrier stability in supply and demand  stable returns Low, risky returns

5. Market leaders tasks • Expanding the total markets • expansion is risky; failure can be fatal • Protecting the market share • customer satisfaction • quality • benchmarking • Expanding the market share • product innovation • market segment innovation • distribution innovation • promotion innovation

6. Agenda Market leader strategy in general Telia-Sonera´s market leader strategy Nature of mobile operator business

7. Demand in MOB • different demand in different market  different strategies • in growing mobile phone penetration areas focus is on capturing market share • in mature market focus is on operations cost efficiency, because ARPU falls • Saturation point is almost reached in Europe • penetration wont grow anymore

8. Supply in MOB • Relatively low entry barrier • roaming  no network investments needed • lot of competition • ARPU will continue falling • Relatively low exit barrier • license can be resold • little employees and infrastucture needed • play-off phase? • lot of exits may occur

9. Exit barriers Low High Low, stable Returns Low Entry Barriers High, stable returns High, risky returns High Barriers and profitability Low, risky returns Mobile operator business

10. UMTS • high price paid for licenses • hype is over • UMTS breakthrough delays • payback delays

11. Trends • Growth from where? • from out-market • from services • by differentiating products • marketing is playing key role in this process • Exits may occur various ways • mergers • aquisitions • bankcruptcies

12. Agenda Market leader strategy in general Telia-Sonera´s market leader strategy Nature of mobile operator business

13. Telia-Sonera´s Group Strategy • Concentrate on Nordic and Baltic region • boost margins • consolidate position • improve operational efficiency • Customer-oriented approach • product- and service offerings packages • user-friendly services • benchmark the European service industry

14. Mobile operator´s market shares in Finland 1.3.2003

15. TeliaSonera Finland Oyj

16. TeliaSonera Finland oyj´s growth areas: • broadband services • Get acces customers • Start introducing value added services • mobile data services • introduce new multimedia person-to-person and content services

17. Thank you!