1. 1 Infobalt 2002 Jesper Andkaer Pedersen Chief Financial Officer UAB “Bite GSM” Mobile operators and partnership approach

2. 2 Outline  About Bitė GSM  Bitė and partnerships  Case studies in product development  Growth in the future through partnerships

3. 3 Bitė GSM in brief Bitė GSM was established in 1995 Full scale provider of mobile and internet services GSM 900 and 1800 mobile network Data and Internet license Roaming with 155 operators in 74 countries 427 employees TDC is 100% shareholder

4. 4 Focus on value creation through partnerships The operator Mobile market There is an acceleration pressure on the Operator to perform excellent in the market and be cost effective Bitė is viewing partnership as a cost effective way to improve the process of creating value. Financial market Value = result from operation – Investment x cost of capital (shareholder Value)

5. 5 Partnerships and value creation “Vendor ship”Partnership Value creationThrough focus on cost and quality Through focus on synergies Interface with Partner StandardNon-standard CorporationOfficial and governed by rules Non official with shard process and perhaps decisions Dependency of the vendor/partner Company is not depended of the vendor Company is semi depended of the Partner Transaction costLowHigher

6. 6 Purchasing system and process Furniture's Cars Contractor work Partnerships Knowledge transfer Product development Content providers Vendor ships Physical Infra structure Enterprise Resource Planning Handset Value Core/ unique Cost/ Non core What is the optimal relationship ? Focus Activities in the value chain

7. 7 Partnership is a cost effective channel to new competencies Bitė is viewing Partnership as a way to improve significantly our value creating process in a cost effective way. Partnership is giving Bitė access to: Complementary competencies and technology, which together with Bites own capabilities is creating synergies in Bites value chain. Substituting competencies and technology, which is necessary due to the needed high level of skills. Partnering is a cost effective approach to get access to competencies and technologies, which only hardly and very costly can be copied in Bitė.

8. 8 UAB “Havera” Bitė is today already in the game of partnerships!

9. 9 Case study in product development Partnership was established in mobile internet content and applications area, where the development of mobile internet concept required higher level of relationship than “vendor ships”. Bitė and the content provider supplemented each other with the strongest competences: Infrastructure and customer base Know-how about application development and content Market Product

10. 10 Case study in product development A partner is highly involved in the development of Bitės entertainment IVR products to be launched to the Lithuania market. The partner is providing Bitė with: Product ideas Implementation schemes Content Follows up on service usage Bitė providing partner with: IVR machine programming

11. 11 Benefits in both cases Bitė benefits: High value products Low production cost => Attractive product Market differentiation Consistency of concept Partner benefits: Development of mobile infrastructure know-how Opportunity to apply the know-how to other projects and customers Revenue share model

12. 12 Step 6: Education of users POS support Dealers support Step 5: Outsource content aggregators Channel services Simplify the connection process Step 4: Create service brand Cross-promo with partners Education of the market Step 3: Promote transparent business model for partners Sharing principles Cross-promo of services – one of the sharing conditions Step 2: Open billing platform Assist in partners service selling Reduce costs and thus share Step 1: Simplify pricing structures Reduce start-up charges Even based charging – no charging for access the technology Benefits in both cases Bite’s partnership model

13. 13 Partnerships is mainly related to the “high end”of the product hierocracy Capacity and connectivity Applications Content Value to the market Infrastructure Partnerships Vendor ships

14. 14 30 40 50 60 70 80 90 20002001200220032004200520062007200820092010 Nokia Credit  Suisse 2002  perspective Data as the future ARPU driver - but at a lower level

15. 15 The “non-voice”/data part is the future driver and this involves competencies and technologies outside the traditional mobile operators. Bitė view partnership as a very important element in the strategy to grasp our share of the future growth Bitė will grow future business through partnerships Services and applications serving the consumer on the move Entertainment services stimulating consumers leisure time The future is about:

16. 16 Bitė will grow future business through partnerships To perform excellent we will need to team up with excellent value chains from other industries, who have complementary competencies and technologies.

17. 17 Bitė – communication for everyone