CONFIDENTIALExampleBenchmarksinaCAPEXProjectSummaryThisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinsey&Company.ThismaterialwasusedbyMcKinsey&Companyduringanoralpresentation;itisnotacompleterecordofthediscussion.2BENCHMARKINGCONSIDERATIONSINACAPEXPROJECTBestpracticeprojectbenchmarksBenchmarkingofoverallCAPEX/OPEXindicators•ToplevelCAPEX/OPEXproductivitywasbenchmarkedbaseonpublic,operator-group-wideinformation–CAPEXoverrevenues,asafunctionofrevenuegrowth–CAPEXperline–Revenuesperemployee–Linesperemployee•Notethatthesenumbersallowforindicativeconclusionsonly,sinceitisnotfullypossibletoaccountfordistortingeffects(e.g.,levelofoutsourcing,groupcomposition/structure,varyingaccesslinegrowth,etc.)•Numericalaswellasconceptualbestpracticebenchmarkswillbesystematicallyusedfor–Reviewofbusinesscases(SDH/DWDM,Passportization,Operatingsystems,Broadband)–Investmenttooldevelopment(e.g.,non-recurrentbusinesscase,controlling)Source:Teamanalysis3BENCHMARKINGOFOVERALLCAPEXINDICATORS–CAPEX/REVENUESAttention:WholetelecomgroupsincludedSource:Annualreports,Epsicom,analystreports1999Percent2000OUTSIDE-INANALYSIS2818271720162818111318KPNSoneraPortugalTelecomDeutscheTelecomBritishTelecomTeleDanmarkTelefonicaFranceTelecomTelecomItaliaSwisscom4426242419181716122419Bezeq4BENCHMARKINGOFOVERALLCAPEXINDICATORS–CAPEX/LINESAttention:WholetelecomgroupsincludedSource:Annualreports,Epsicom,analystreports1999EUR2000OUTSIDE-INANALYSIS31743030123417624221914192172149KPNTelefonicaTeleDanmarkBritishTelecomDeutscheTelecomPortugalTelecomSwisscomSoneraTelecomItaliaFranceTelecom460348323235230201176170153176227Bezeq5BENCHMARKINGOFOVERALLCAPEXINDICATORS–CAPEXVS.REVENUESSource:UBSWarburg;teamanalysisRevenueGrowthCAGR2001-2003,percentCAPEXinpercentofrevenuesAverage2001/2003,percent•ExistingcorrelationbetweenCAPEXandrevenuegrowthinmostoperators•Swisscomasrenowncaseof„BestPracticeCAPEXManagement“OUTSIDE-INANALYSIS01020304050051015KPNSoneraSwisscomPortugalTelecomDeutscheTelecomBritishTelecomTelecomItaliaTeleDanmarkTelefonicaFranceTelecomBezeq6BENCHMARKINGOFOVERALLOPEXINDICATORSAttention:WholetelecomgroupsincludedSource:Annualreports,Epsicom,analystreportsRevenues/employee2000,EURthousandLines/employee2000OUTSIDE-INANALYSIS286289232481501233252172230250335TelecomItaliaPortugalTelecomSoneraKPNSwisscomTeleDanmarkDeutscheTelecomBritishTelecomFranceTelecomTelefonica339318301289223211184148293860269Bezeq7BESTPRACTICEBENCHMARKS–PROJECTS(1/3)Source:TeamanalysisKeybenchmarksEXAMPLESDigitalizationDegreeofdigitalizationERatiooflinesdigitalizedtototalnumberoflinesinEuropeanmarketsAssessmentmethodology•Differentiatedroll-outEValueassessmentmethodologyfordifferentiateddigitalizationstrategyperABCarea•Pin-pointingEValueassessmentmethodologyforpin-pointeddigitalizationRevenues•OverallETotaltelephonyrevenuespersubscriber(residentialvs.business)•VASEEstimatedpenetrationandspendinglevelforvariousvalue-addedservicesVoicemailpenetrationEVoicemailpenetrationratesinvariousEuropeancountriesCompetitionEExpectedcustomerlossduetocompetitionovertimeDigitalizationrequirementsERegulatoryrequirementstodigitalizeRevenueimpactIChangesincustomerrevenuesduetodigitalization(showednosignificanteffect)Switchlinecardreserve...
