MCMC

Talent Gap Study

Feb. 2016
 Draft for discussion

Talent Management

Do we even know what Talent is needed?

PwC | page 2
 What are some of the themes shaping our broader world?
How does this all effect me?

Malaysians access 2012

the internet via
smartphones more
Seven 2014 of the data that
exists today was

90%
compared to times more connected created in the
devices than people
67% computer or
tablets by 2020
last 2 years

houses could almost People look for information on:

Of be powered every

40% Smartphones
sold in SEA are
7000
day with just the
energy burned by
under USD 100 active users of the
$ 100 Nike+ App 60% 51% 22%

0.5% 3 #1 If Facebook was a

of data is only 12 country, it would be
the second most
currently populous in the
analysed Years taken for fixed broadband and #2 world (after China)
smartphone to reach 100mn users

Source: Canalys, Google Consumer Barometer, PwC analysis

PwC | page 3
 Globally, operator service revenues are stagnating; data based applications and
usage are the primary growth areas

Global Mobile Operator Revenue, US$ bn

CAGR (%)
0%
1,300 +4%
1,200 VoIP 22%
1,100 Apps 36%
1,000 VAS / Digital 9%
900

800 Internet / Data

22%
700
Access

600

500

400

300 Voice Telephony -7%

200

100
SMS / MMS -16%
0
2012 2013 2014 2015 2016 2017 2018
Source: Gartner, Statistica, WeAreSocial, YouTube, Internet Retailer, Strategy& Analysis

PwC | page 4
 Internet Industry life-cycle
We are now entering the 3rd and largest internet growth wave the age of the internet of
things
Age of Fixed Internet Age of Mobile Internet Age of Internet of Things
Wave 1 Wave 2 Wave 3
10x Wave 2
50,000 2020
50.1 billion
45,000
2019
40,000 42.1 billion
2018
34.8 billion
Billions of devices

35,000
2017
30,000 2016 28.4 billion
22.9 billion
25,000 2015
18.2 billion
20,000 2014
14.4 billion
15,000 2013
1992 2012 11.2 billion
10,000 1,000,000 8.7 billion
2003 2009
5,000
0.5 billion IoT inception
0 Year
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: Goldman Sachs Global Investment research, PwC& analysis
PwC | page 5
 Shareholder perspective: The industry as a whole is no longer seen to have a
growth story

Q. What do you think will be the source of value creation in Telecom

stocks you hold?
Income/Dividend Yield 36%

M&A/ consolidation 18%

Benchmark/defensive 17%

Operational turnaround 15% 52% of financial investors who

Growth prospects
Better regulation
Others
hold telecom stocks, do not see
9%
any industry story in telecoms at
6% all and only 9% see a growth story
3%

Source: Citibank Investor survey 2014

PwC | page 6
 We are seeing significant moves and fundamental departures from core business
in a bid to return to profit
Vertical
Consolidation
Separation
News
2015 BT to acquire EE for 12.5Bn Minute factory" model through
to create the largest quad-play a first of its kind full network
operator with fixed and 4G data outsourcing partnership on
leadership in the UK revenue share

Partnerships
News
Softbank buys 57.6% stake in
Brightstar and then moves entire
sales organization to brightstar to
combine with device margins

Investments in WiFi Network Sharing

2014 Telstra commits AUD100Mn 2012 Vodafone enters into

to create a public wireless network network sharing agreement with
of 2 Mn hotspots in Australia O2 to generate combined savings
of 1Bn by 2015
Source: Press reports

PwC | page 7
 The Malaysian mobile sector we also see a similar stagnation; with high data
growth visible

Mobile penetration in Malaysia (%, 2010-15 Q2) Mobile data penetration in Malaysia*) (%, 2010-14)

141% 145% 149% 145%

127% +23%
120% 69%
61%
50%
36%
31%

2010 2011 2012 2013 2014 Q2 2015 2010 2011 2012 2013 2014

Market ARPU in Malaysia (MYR, 2006-15) Mobile data ARPU (US$, 2014)
65 27.2
62.7
23.0 22.5
58.4 20.5 19.8
60
16.1
54.8 54.8
55
10.2
51.1
5.8
50 48.5 48.2 4.2
47.0 46.6 47.0 2.3 1.4 1.3 0.7
45
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
*) Estimated using total subscribers of 3G & 4G phones in Malaysia
Source: MCMC, Bank of America, BMI, PwC Entertainment & Media Outlook, Strategy& Analysis
PwC | page 8
 Strategic choices will then define returns expected and inherent challenges

ILLUSTRATIVE

Characteristics of Strategic Archetypes

Business we are in .. How can you create value Anticipated TSRs Challenge
1
Assets Leadership High CapEx,
Connectivity Coverage/Fixed 4-5% declining returns,
Game investments heavily regulated

2 Access to resource or
niche markets Low margin, high
scale business
Communication 0-15%
many unconventional
Network effect players
3
Strong & organized
Solutions 10-30% global, regional and
Innovation & IP
local competitors

PwC | page 9
 From
Sales-driven

Product-driven

Mass-market

Reactionary

Transactional

Evolutionary change

PwC | page 10
 From
To
Sales-driven
Customer-driven
Product-driven
Solution-oriented
Mass-market
Micro-customized
Reactionary
Anticipatory
Transactional
Lifetime-value
Evolutionary change
Exponential improvement
PwC | page 11
 Draft

Never before
has change occurred
in such short
periods of time.

PwC | page 12 Image credit | flickr.com

 Moving at the speed of social
In Asia successful social platforms are being adopted at a rate unseen before in.
The requirement to identify and respond to changing trends has never been greater

Blink and youve missed it; in 2009 Smartphones changed things

Number of years taken to reach 100m users in China. Various technologies, platforms and applications

1985 1990 1995 2000 2005 2010 2015

Feature phones 1987 15 2001
Fixed broadband 1999 12 2010
QQ 1999 12 2010
Digital TV 2002 10 2011
Renren 2005 6 2010
Smartphones 2009 3 2011
Sina Weibo 2009 2 2010
Tencent Weibo 2010 2 2011
WeChat 2011 1.5 2012

Social media isnt just big but its moving at a faster rate than most business leaders have ever experienced
before. To remain relevant you must keep your finger on the social pulse

Source: PwC analysis

PwC | page 13
 Lots of catching up to do
Today the South East Asian eCommerce market is heavily underpenetrated with less than
1% of the retail market being transacted online compared to 8% in China

Despite low penertration today, the South East Asian eCommerce market is poised for growth
eCommerce market size for Southeast Asian Countries (million USD), 2013

Indonesia Thailand Philippines

8.7%
0.1% of total 0.2% of total 0.3% of total
retail market 14,662 retail market retail market

9,380
6,415 US eCommerce
5,738
4,183 as % of total retail
2,246 3,152
879
1,866 1,549 (2013)
135 344 166 371 832 184 374 761

2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018

Vietnam 0.2% of total Malaysia 0.2% of total Singapore 1% of total

7.8%
retail market 3,387 retail market 3,377 retail market

1,336 1,552 1,340 China eCommerce

713 938
527 328 322 460 657 as % of total retail
32 82 208 69 151 225
(2013)

2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018

Source: UBS ASEAN eCommerce: Is ASEAN at an inflection point for eCommerce? (2014) and PwC analysis
PwC | page 14
 Smartphones get serious
Southeast Asians are using their Smartphones everyday, everywhere much more than PCs.
They are also highly engrained in the shopping process, particularly pre-purchase

Southeast Asians with a smartphone already use it all the time, everywhere

92% 68% 96% 85% 80%

use the Internet on use the Internet on
Smartphones daily PCs daily at home at work on the go

But theyre not just browsing the web they are informing purchase decisions

70% of ASEAN smartphone users use their device during the shopping process. And heres how

To inspire To evaluate To transact To review

looking for ideas trying to make purchase decisions making the transaction writing a review

51% 29% 14% 13%

Source: Google "Our mobile Planet" (2013)

PwC | page 15
 From a lifecycle perspective; are you able to support all of the stages of a
purchasing process?

Word-of-mouth (WOM)
Engagement
Observation Expert opinions
Discovery
Pre- Evaluation
Brand commitment
strength Commitment
Consideration Pay
Compare

Transact
Buy
Awareness

Discover Engage Transact

Post-
Exploration commitment
Service
Experience
Advocacy Bond Fulfillment
Passion
Reflection
Repeat Emotion
Allegiance Action Validation
Re-engagement need
New
consideration
PwC | page 16
 Which of the following companies would you be prepared to buy an insurance
policy from?

Internet retailer Technology company Social network

25% 9% 16% 9% 9% 5%

China Global China Global China Global

Source: PwC, Insurance 2020 (2014)

PwC | page 17
Have you got
talent to disrupt?

PwC || page
PwC page18
18
 Draft

Todays Digital natives will likely become your most important group of customers
and mid management of employees before too long

2015 2035
85+ 85+ 85+ 85+
80 - 84 80 - 84 80 - 84 80 - 84
75 - 79 75 - 79 75 - 79 75 - 79
70 - 74 70 - 74 70 - 74 70 - 74
65 - 69 65 - 69 65 - 69 65 - 69
60 - 64 60 - 64 60 - 64 60 - 64
55 - 59 55 - 59 55 - 59 55 - 59
50 - 54 50 - 54 50 - 54 50 - 54
45 - 49 45 - 49 45 - 49 45 - 49
40 - 44 40 - 44 40 - 44 40 - 44
35 - 39 35 - 39 35 - 39 22.3% 35 - 39 23.0%
30 - 34 30 - 34 30 - 34 30 - 34
25 - 29 25 - 29 25 - 29 25 - 29
20 - 24 20 - 24 20 - 24 20 - 24
15 - 19 27.3% 15 - 19 27.4% 15 - 19 15 - 19
10 - 14 10 - 14 10 - 14 10 - 14
5-9 5-9 5-9 5-9
0-4 0-4 0-4 0-4
`
2,000 1,500 1,000 500 -0 500 1000 1500 2000 2,000 1,500 1,000 500 -0 500 1000 1500 2000
0
Source: Department of Statistics, PwC analysis
Southeast Asia Digital Consulting Digital mega trends in South East Asia
24
Thank you

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