Eastern Europe
Western Europe
Reduction of factor costs
Efficiency improvement of remaining activities
4.
3.
2.
Reduction of unnecessary activities
1. Demand management
Source:
UBS; Wireless Matrix (BoA, Merril Lynch); Informa Telecoms & Media; CISCO; IEEE; Oliver Wyman Research. Only IP traffic included in Fixed BB.
70%
90%
80%
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
60%
100%
European Telco cost reductions in OpEx per subscriber
Other industries have faced similar challenges already: Telcos responded to revenue decline by cutting costs by 20–30+% in 8 years
1.
Range on front office spending broader than for back and middle office functions driven by greater ability to flex compensation – also performance dependent
Source: Company filings and Annual Reports; Oliver Wyman proprietary data and analysis
~ -10% to 15%
-10%
-15%
Back and middle office
Front office
-10% to 15%
-5%
-10%
2018(target)
2015
2010
Wholesale banking cost reductions 2010-2020 target, %
The banking industry has cut costs due to regulatory pressure and digitization, with more to come over the next few years
~50x
~10x
2.
Based on analysis from Profitero
1.
Amazon.com
Amazon.com
Traditional Retailer
Traditional Retailer
Estimated using products listed on Office Deport and Amazon websites, excluding 3rd party resellers
Source: Amazon.com, Officedepot.com, ZDnet.com / Profitero, Oliver Wyman analysis
… Responding More Rapidly…
… Making Better Decisions
Fewer Decision Makers…
Price Changes per Day
"
The Amazon team was able to use [pricing] data in discussions with their supplier, who in turn realized that their own pricing errors had given Amazon’s competitor a price too low”
Case Study: The Power of Data
Office supplies only
SKUs per Merchant
Amazon can make better decisions more quickly and with fewer people