Credit bundles as a tool to differentiate, increase market share and revenue

thierry.vandevelde@eservglobal.comsenior product manager

IQPC Convergent Billing, Frankfurt, 24/11/2005

p. 2 | Commercial In Confidence

[back to main menu]

Scope

A toolset of possible strategic directions to increase an Operator’s market share

Convergent prepaid/postpaid campaigns and promotions Introducing convergent prepaid-postpaid products with

existing IN Prepaid and Billing platforms Overview of today’s and tomorrow’s credit distribution

channels : from prepaid scratch vouchers to inter-account credit transfer

Operator case study : Orange Netherlands eRefill

p. 3 | Commercial In Confidence

[back to main menu]

Today's Operators' main strategic objectivesin terms of market share

Acquire new subscribers

Reduce churn(increase loyalty)

Incre

ase

AR

PU

(Reven

ue)R

ed

uce

AC

PU

(Cost)

Operators cannot afford to work just in one direction

p. 4 | Commercial In Confidence

[back to main menu]

A toolsetof possible strategic directions

Incre

ase

AR

PU

Acquire new subscribers

triple play 2.5G-3G mobile office

MVNO's & channels Residential/SOHO CorporateSME

fixed-mobile VPN

Red

uce

AC

PU

pre/postpaidconvergence

new creditdistribution

channels

new networktechnology

Operations, Marketing & CRM benefits

Inter-account,Bank-to-mobile,

Web…

reduce the OPEX per BHCA/BHSA

(could becomecontradictoryobjectives)

Reduce churn

CampaignsPromotions

…because the acquisition cost is high anyway

more tailorised& more real-time

target users based on their likelihood to

churn, and new service usage criteria

NGN services

simpletariffs

bettercontent

substitutefixed

by mobile

…

p. 5 | Commercial In Confidence

[back to main menu]

Traditional promotions and campaignsno convergence between postpaid and prepaid…

Postpaid promotions Subsidise the terminal in

return for a sufficiently long contractual commitment

Then face SIM-unlocking and churn

Prepaid promotions At top-up time, grant free

prepaid credit (typically SMS)

Based on this month's prepaid usage, grant free credit next month (SMS)

Postpaid campaigns Select high or

demographically interesting existing users, based on data warehouse analysis

Usually only traffic Propose to waive some

monthly subscription fees in return for a longer contract

Prepaid campaigns Propose to switch to new

product type, for low price on-net or off-peak traffic

if multiple product types are supported by the prepaid IN system of course

p. 6 | Commercial In Confidence

[back to main menu]

New promotions and campaignsno distinction required between post- & prepaid

New promotions Multi-balance credit bundles

E.g. money + SMS + MMS + ringtones

Channel-dependent bonus Adapt bonus to stimulate the most

cost effective top-up channel (ATM, e-voucher, inter-account, bank-to-mobile, …)

Usage Shorten usage calculation period

e.g. down to one day In-call

Per (Deci-)Second Billing Degressive tariff Every 5 minutes, 1 for free

Credit bundles Buy 100 SMS for this week-end

Friends & Family Virtual Private Network Sponsoring Location based

New campaigns Select users based on their

likelihood to churn Detect lower consumption asap

Select users based on new criteria Incoming calls Number of Friends & Family

numbers Credit transfer Mobile data usage etc

Introduce a Frequent Caller Scheme

E.g. Blue-Silver-Gold with real-time usage calculation and

in-advance threshold notifications not after one month!

Propose credit bundles automatically (IVR, SMS)

Don't wait for people to see an ad!

100%RealTime

p. 7 | Commercial In Confidence

[back to main menu]

Definitionof a Credit Bundle System

GSM, GPRS, IMS

HLR

NGN

CreditBundleSystem

PrepaidIN SCP

Provisioning& CRM

MSCSGSNCSCF

SS7INAPCAP

PostpaidBillingSystem

CDR transfer

SIP

??

purchasing& self-care

SMS, MMS

MAPUCP

SMPPMM4

p. 8 | Commercial In Confidence

[back to main menu]

Examplesof credit bundles

One night for 10€ Unlimited calling & texting from 8pm to 8am, when network is empty

A holiday week for 50€ Ultralow tariff for incoming calls and CAMEL call-back when roaming

100 email-to-sms for 5€ We text you a password when you buy the bundle; fill it in each email

1000 SMS for 20€ + 10 MMS for free Valid one month (ARPU from texting is usually only 10€ a month)

The Worldcup scores via SMS for 10€ Select which groups & teams via web/wap

The Worldcup goals via MMS for 20€ Same remark

The company pack 10000 minutes for 1000€, valid one month, mobile-to-mobile, mobile-to-company

or company-to mobile; only available from your account manager!

The ringtones collection 52 for 52€, we'll send you a new one every week if you don't select one yourself

The WiFi pack 100 hours of WiFi access + 30 free VoIP minutes

p. 9 | Commercial In Confidence

[back to main menu]

Credit bundleshave effects in multiple directions

Incre

ase

AR

PU

Acquire new subscribers

triple play 2.5G-3G mobile office

MVNO's & channels Residential/SOHO CorporateSME

fixed-mobile VPN

Red

uce

AC

PU

pre/postpaidconvergence

new creditdistribution

channels

new networktechnology

Operations, Marketing & CRM benefits

Inter-account,Bank-to-mobile,

Web…

reduce the OPEX per BHCA/BHSA

(could becomecontradictoryobjectives)

NGN services

simple tariffs

bettercontent

fixedmobileconv.

Reduce churn

CampaignsPromotions

…because the acquisition cost is high anyway

more tailorised& more real-time

target users based on their likelihood to

churn, and new service usage criteria

creditbundles

p. 10 | Commercial In Confidence

[back to main menu]

Credit distribution channels

cash

debit card

credit card

bank account parentprepaidaccount

IVRPI

eRefill

scratchvoucher

shop

IVR

Web

parentusage

childusage

childprepaidaccount

EUe-moneydirective

eRefill

e-voucher

PI or IVR

creditbundle

IVRWebSMS

IVRWebSMS

postpaidaccount

invoice

p. 11 | Commercial In Confidence

[back to main menu]

USMS + UAS domain

UniversalBillingEngine(UBE)

domain

eSG Charging Control ServicesService Providers, Product Types, Accounts, Wallets & Balances

Service Provider

WalletPersonal

BalanceContent

Bucket5 valid 7/11

WalletBusiness

BalanceRoaming

BalanceGeneral cash

BalanceSMS

Bucket9 valid 17/11

Product Type

Accountreference

(subscriber)

Default LanguageContact DetailsDefault Wallet Type

Balance type (debit, single use debit, credit, limited credit.)

1 N

1

1

1

N

1

N

BalanceCascade

1

N

#UnitsUnit

Expiry dateLast use date

1

N

WalletType

Personal

1

1

…

IDCLIDescription, languagePIN selected flagPINAccount currencyAllowed/Barring listsFriends & Destination lists, Number TranslationsCredit Card DetailsAudit fields, populated by systemCall Data RecordsAccount Profile Tags

Name & PeriodsRestriction PlansAnnouncements

Call BarringNumber Translations

Bypass NumbersCredit Card recharge rules

Second CurrencyWhat’s NewHelp & Info

Product Type swap policyNode Options

Min. credit BalanceControl Plans

Named EventsTariff Plans

Product Profile Tags

State, Expiry Date# Concurrent accesses

Java basedoperations& self-care

p. 12 | Commercial In Confidence

[back to main menu]

Conclusions

Credit bundles are a new instrument to communicate more effectively with your end users

From mass market products to tailorised, personalised promotions Churn reduction even in low-ARPU prepaid segments

From now on, twin investments in separate prepaid IN & postpaid billing systems should be avoided

Purchasing/self-care channels, rating capabilities, CRM screens, separate marketing campaigns…

Credit bundles are a new product Like scratch vouchers, subscriptions or even credit cards

Credit bundles may be shared among families, communities & businesses

Without encountering the restrictions of inter-account credit transfer

Credit bundles may be the easiest way to introduce next generation services

Email-to-SMS, Content, WiFi, VoIP, IM …

Case study - Orange NL eRefill[back to main menu]

Thank you![back to main menu]