How to Make Money With 3G_ TIM Part 2

8/6/2019 How to Make Money With 3G_ TIM Part 2

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1 © Nokia Siemens Networks Presentation / Author / Date

Customer Confidential

How to Make Money with 3GPresentation to TIM, 2007

Diana Coll, Solution Marketing





Agenda

• Strategic options for introducing 3G – Business model and service differentiation

– Operator case studies

• Where are you in the map? benchmarking of 2&2,5G Services

• Understanding the end-user motivation for 3G services

– Killer service or killer experience?

– Managing the end-user experience

• How can we help you?





Where are you in the map?

Examples (not with real data) aboutbenchmarking of Services in Brazil


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Examples of benchmarking of services using Fit 4Business tool

N o t u s

i n g r e a

l d a t a

N o t u s i n g r e

a l d a t a

N o t u s i

n g r e a

l d a t a

N o t u s i n g r e

a l d a t a




In search of the killer application

hat services do people use?

martphone360 – UK, Germany, France

G Usage Tracker – UK, Italy, December 2006




DATA USAGE DISTRIBUTION – BOTH 3G & 2.5GA

73%0%

3%

0%

12%

3%

0%

0%8%

1% browser

config

games

infotainment

messaging

multimedia

pim

productivity

unknown

utilityBase: 5.7 GB of packet data





68719

1518 834

55

91 81 77 8268

78 797365

Few times a week or more

8 74630 823 19 1824

89 80 78 81 6880 74 7374

MMS/ Video Instant Multimedia Mobile E-mail Video 3G data Mobile Digitalpicture callingmessaging/ content/ internet sharing card TV streamingBroadcast

messaging chatting entertainment TVservices

MMS & video calling most regularly used features- Italy seeshigher usage incidence. IM used more regularly in UK

Usage frequency and satisfaction towards each feature - Total%

CAUTION: * Small base <100Base: All respondents (402), UK (202), Italy (200)

+ All feature users answering - base varies† Item asked in Italy only

Total

7 9411823282638

86 77 78 7970 6874

86

Satisfaction(Top 3 boxes*

**

*

*

*

*

*

**

N/A N/A

††





Communication Services in APAC

Mobile Internet and e-mail are the most popular after MMS Video Calling is picking up

20

1

3

6

1

2

10

1

MMS IM Email Send Email

Receive

PTT Video

Calling

mobile

Internet

mobile

blogging

26

76

78

0

6

2

MMS IM Email Send Email

Receive

PTT Video

Calling

mobile

Internet

mobile

bloggingSource: NSN APAC Pulse - Base: All main mobile phone users

+ All function users answering - base varies - average calculated excluding zero

Usage last month (%)




Customer ConfidentialSource: NSN APAC Pulse - Base: All main mobile phone users


2 2

6

8

10

mobileTV videoTVondemand VideoDownloading Music(Audio

Streaming)

Music(Audio

Downloading)

2 2

7

6 6

mobileTV videoTVon

demand

VideoDownloading Music (Audio

Streaming)

Music (Audio

Downloading)

Video and Music Downloading the most popular - TV is picking up

Usage last 6 months (%)

Entertainment Services in APAC





With O2 tipped as the winner of the heavily contesteddeal to provide Apple’s iPhone in the UK ….

Vodafone has struck an exclusive deal with Omnifone, a UK technologycompany, giving mobile customers unlimited access to music from labels such as

Universal for £1.99 a week.So long as customers continue to subscribe, they retain all their downloads.

Arun Sarin, Vodafone’s chief executive, has repeatedly highlighted how the firstversion of the iPhone will not run on 3G mobile networks. By operating on 2.5Gnetworks, customers get slower internet browsing.

The Financial Times Limited 2007

September 10th 2007

http://online.vodafone.co.uk/dispatch/Portal/appmanager/vodafone/wrp?_nfpb=true&_pageLabel=template02&pageID=VIRTUAL_HOME





Social networking and mobility are key drivers for revenue growth

• Community services are predicted tobecome the most important revenue

generator for the mobile content industryfive years from now, followed by TV, musicand games.

• Brazil % of internet users who are fanof social networks (41%) is the secondhighest in the world, behind that of SouthKorea (55%)

Communities fulfill many of our deepest human needs and

have become an important part

of the lifestyle of millions of people:

* Source: eMarketer (12/2006).





One-third of mobile users say they belong to online community, and 2in 5 expect online communities being mobile

25

75

Jul 07

Yes

No

2

8

14

36

2

34

1

Jul 07

Unprompted - Top mentions

%

Incidence of being a member of any

online community

%

Any

Orkut

MSN

YouTube

Yahoo

Gazzag

MySpace

Incidence of sharing self-

generated content

Base: All main mobile phone users

Mentions below 1% not shown

Base: All online community members - Jul 07 (216)

57

42

1

Jul 07

Yes

No

Don’t know

Expectation of availability of

online community on mobile

phone

%





Focused communitiesFocused communities / specific user groups

Religion, language, etc.

Society, school, church

Loyalty schemes

Private/closed communitiesFamilies, friends, sports teams, hobby clubs

Enterprise

Open Internet communitiesMerging the internet & telecommunication

communities

Operator communitiesCommunities created by operators themselves around their

customer base

Muslim.com Muslim.com

Maximizing opportunityDiscovering Communities: The kind of community and your role in the communityecosystem will determine the revenues that can be expected

Potential role

Access provider

Service provider

Service provider

Service provider

http://www.muslim.com/search/?s=Muslim


http://www.google.com/a/

http://www.google.com/a/help/intl/en/admins/editions.html

http://www.youtube.com/

http://www.ebay.com/


http://www.istra.com/vrsar/images/taxi.gif

http://www.three.co.uk/index.omp





The most successful mobile UGC community so far?

Brazilian case:





End users are attracted to bundled services which best reflecttheir lifestyle and consumption patterns.

Some highlights from Nokia Siemens Networks 3G Usage Tracker

Understanding the end-user motivation for 3Gservices

Concerns/ barriers for 3G usage/subscription






CO

NCERN

Moreimportant

Lessimportant

Relevance of 3G services

Cost of service

Network coverage &Reliability

Many of the findings are equally applicable to 2G and 3G services

Current

popularity of 3G /

connectivity

Security

• Some concerns surrounding cost of usage for surfing and video calling• Risk of ‘hidden’ costs from both network providers and websites

-> prefer a fixed pricing plan

• Consumers feel frustrated when signal is lost or inconsistent between provider• 02 and Vodafone are perceived to provide the most reliable coverage.

• An issue with consumers being able to steal data from tapping into the users s• If a phone is stolen, data could be retrieved and used for fraud.

• Many consumers still have 2G phones therefore it is not always

possible to video call other consumers.

• Lack of informative marketing communications outlining 3G features-> not all consumers understand how 3G can be relevant for them,and utilise all of 3G’s benefits.

From Qualitative







CO

NCERN

Moreimportant

Lessimportant

Relevance of 3G services

Cost of service

Network coverage &Reliability

Many of the findings are equally applicable to 2G and 3G services

Currentpopularity of

3G /connectivity

Security

• Some concerns surrounding cost of usage for surfing and video calling• Risk of ‘hidden’ costs from both network providers and websites• Personal has already reduced its price since launch by 25%.

• 3G Coverage is limited to 3 cities

• An issue with consumers being able to steal data from tapping into the users s• If a phone is stolen, data could be retrieved and used for fraud.

• 3G Terminal and Laptops low penetration (but improving)• Availability of 3G Data Cards

• Lack of informative marketing communications outlining 3G features-> not all consumers understand how 3G can be relevant for them,and utilise all of 3G’s benefits.

From Qualitative

3G i A i P i i b i





3G in Argentina – Pricing barriers

€0-45

€45-90

€90-135

€135-more

18

15

9

8The Samsung A706

and LG MU500,

costing €166, are the

cheapest 3G phones

on offer but are still

on the high end of

price levels.

Average number of phones offered online by

Movistar and Personal by price level.

Note: These prices are under contract and the list does

not include smart phones.

Source: Operator web pages, company interviews, TeleGeography, Nokia Siemens Netwroks BI, CAMOCA

€ 16.00

€ 21.00

€ 27.00

€ 12.00

€ 21.00

€ 31.00

€ 0.00

€ 5.00

€ 10.00

€ 15.00

€ 20.00

€ 25.00

€ 30.00

€ 35.00

€ 40.00

1MB 2.5MB 5MB

Speed

M o n t h l y s e r v i c e p r i c

Telefonica Telecom

HSDPA offerings are up to 100%

more expensive than DSL offerings.

Notes:

-Speed is maximum offered.

-DSL prices are monthly average over a 24-

month period.

-The cost of data cards or DSL installation

services are not accounted for.

• we compare the prices of wireless broadband against current broadband offerings from incumbent operators.

Fl t t b i ti i f d f bil i t t & t iAPAC





60 5650 46

37 4045 48

33312 2 1 4

Mobile internet Mobile TV

streaming/

Digital

Broadcast TV

Video

downloading

Music/ voice

downloading

Charged per usage

Subscription to flat rate

None of these

Don’t know/ refused

Most preferred charging method of respective services - Total

%

Base: All users or all who are interested in using the respective services: Mobile internet (1883), Mobile TV/ video (1756), Music/ voice downloading (1724),

Note: Digital broadcast TV asked in Japan only

Flat rate subscription is preferred for mobile internet & streaming

services. Per usage charge for downloading

Source: NSN APAC Pulse - Base: All main mobile phone users


M i t i





Managing customers experienceDrivers influencing acquisition and churn thus CLTV

• Cost• Network

coverage/quality/perf • Calling plans• Customer service

• Brand

• Cost• Network

coverage/quality/perf • Calling plans• Customer service• Service portfolio

Western EuropeStable growth

declining ARPUNorth America

Stable growth

declining ARPU

Emerging Asia:

Strong growthlow ARPU

• Calling plans• Cost• Network quality/

performance• Billing format/accuracy• Brand

Eastern Europe

Strong growth

declining ARPU

• Cost• Network coverage/quality• Calling plans• Customer service• Brand

Africa:

Strong growth

low ARPU

• Cost• Network

coverage/quality/perf

• Calling plans• Device offerings• Customer service

LAM:

Strong growth

declining ARPU

China:

Strong growth

low ARPU

• Cost• Network

coverage/quality• Customer service• Calling plans• Loyalty schemes

• Cost• Calling plans• Network

coverage/quality/perf • Loyalty schemes• Customer service

Source: Nokia Siemens Networks, Gartner and Informa customer acquisition and retention research for mobile and fixed networks, 2007





How can we help you?

Four steps to revenue growth





Four steps to revenue growth

Implementing

winning businessmodels

Introducing new

differentiatingservices

Managing

the customer experience

Opportunities

in newsegments

Service

Strategy

Service

Strategy

Implementing a winning business model





Implementing a winning business modelPlayers are growing their addressable market

Flexible bundles to matchmultiple lifestyles:Mobile

VoiceFixedVoice

BroadbandInternet

TV

Fixedprovider

Mobileprovider

ISP

Hybridprovider

Cableoperator

Differentiating with an innovativebusiness modelUsing advertising as funding, Blyk, thepan-European free mobile network for

young people chose Nokia SiemensNetworks to supply, build and host theentire operationof its core network.

Maximum share of customer wallet





Maximum share of customer walletUsers like service bundles that match lifestyles/consumption patterns

Mobile TV

Stationary Internet

IPTV homeinfotainment

Internet

At home/office

TV

On the move

Mobile Internet

8€ 2€

40€

20€

• Web2.0 communities• Premium VoIP

Inner multiplay area -

Differentiation & Up Sell

10€

BroadbandARPU estimate

Meeting the needs of people lifestyle





Sources: Mobilizing applications vision paper by NSN COO RTP,MIBA 2007 by Nokia

Meeting the needs of people - lifestyle

Myself, My family,

My friends, My colleagues- One-to-one connections

- Voice, text

- Customizable infotainment

My trustedcommunities• Belonging, sharing and

connecting• Easily find people I know or

work with• Safely meet people and share

experiences

Everybody

Every brand

Everywhere

• 3rd party products,services, content

• Social consumption

• Targetedadvertising

Connecting people to what really matters enriching





Marketplace

EverybodyEverywhere

File & contentdistribution, securetransactionsAdvertising and

other targeted thirdparty revenuestreams

Global reach

Meeting Place

My trustedcommunities

Belonging & Sharing

Publishing my stories,pictures, other user created content…Group messaging across

operators and devices

Sources: Mobilizing applications vision paper by NSN COO RTP,MIBA 2007 by Nokia

Connecting people to what really matters – enrichinglife

My Place

My FamilyMy Friends

Emotional engagement

>70% of allcalls, SMSvideo calls,pictures

Me

Me

Infotainment

Individual

consumption

Customized Offerings Generate Personal Value





Customized Offerings Generate Personal Value – Build Communities Through End-User Segmentation

Segment key customer groups

… based on detailed end-user research

& target with service bundles… based on time, service, usage and value.

Profile A – ‘Young explorer’

Heavily into social networking and all

new ways to interact with peers. Video

is central to how they communicate

Profile B - ‘Pragmatic leader’

Senior business role, so it’s vital they stay in

regular contact with colleagues, clients and

suppliers while travelling and in the field

Profile C - ‘Life builder’

Content from browsing, TV and music arekey to their total mobile experience. They

need to feel ‘connected’ all of the time.

Profile A bundle Profile B bundle

Profile C bundle

MMS

LBS

Mobile

TV

Voice

SMS

Video calling

Video sharing

Push E-mail

PoC

Browsing

IM

Video Blog

Managing the customer experience





Managing the customer experienceDriving revenue through life-time value

€With device management

and MMS optimization, a

European CSP with 10 million

subscribers and average

MMS price of 0.40 €,experienced a 10% increase

in MMS success rate,

resulting additional

5.9 M€

annual revenues.

Implementing new innovative services





Implementing new innovative servicesCompetitive advantage over the service lifecycle

Launch Maximize Ramp

down

CreateGrow &

Capture

“We chose NSN because they clearly showed theright combination of experience and competence inthis business-critical area. We can now look forward toreducing our time to market for new services andincreasing the number of services to our customers.Having NSN integrate the solution and operate the servicearchitecture will help us achieve these goals” John Shen, CTO, Hutchison Telecom Indonesia.

= Cost of serving customer base

= Accumulated revenues from users

Pre-profit phase

Period of profits

Innovate

Opportunities in new segments:





Opportunities in new segments:Services for Small and Medium Enterprise Customers

Mobile, fixed &cable operators

Voice, Data

High ARPU

Low Churn

Big Growth

Using an online mobileprefab element trackingservice provided by anEuropean operator, aconstruction companyeliminated stoppages onconstruction sites withassociated direct costs of 5000 € / day per site. Theoperator proved that withsmall investments it’spossible to create areproducible service for arelatively small segmentwhich can have a positiveimpact in the business of enterprise customer.

Enterprises (SME)

Outsourcing

ProductivityCost savings

Low ICT Knowledge

Mobility

Drivers

New competition

New opportunities are openingup for operatorsbut also to new competitors

Technology

Software as aService

Enablers

Identifying the opportunity





position yourself in the

business modelecosystem

identify key areas of

improvement

assess the financialimplications

benchmark against thecompetition

Examples of Fit for Business workshops run by our Solutioneers

Identifying the opportunity

System evolution to match new consumer and





Marketplace Services(100 )

Partner Services(20-100)

Re

venue

/service

0

Mobile Music

Core Services(~ 20)

# of Services

Call & Share

Integrated

eMail

BusinessServices Games

InfoVoice

SMS/MMS/IM

Push

To X

IP &Mobile TV

Quadplay Community

Location WEB2.0

∑ Revenue

Ringtones

Specific effort justified

Environment must enable fastcreation of new services,flexible business models and

winning e2e- partnerships(internet community,content…)

Environment must exposechargeable capabilities andenable 3rd parties to leverageassets (e.g. authentication,payments, usage patterns etc)

TelevotingmCommerce

Virtual

worlds

System evolution to match new consumer andbusiness expectations

Embracing the Internet – and capturing value





Any content or application

g p g

Converged network

• Manage bandwidth and Quality of Experience

• Manage application specific usage• Charge per service

• Leverage identity data

Any Device

A bad user experience equals

http://www.mozilla.com/en-US/firefox/




For internal use

"It's the experience that differentiates our brand"

Sanjiv Ahuja - Orange CEO 28 March

2007

p q

a bad brand experience to the customer

"It´s not about the killer

application, it´s about the

killer experience." Hamid Akhavan, CTO T-Mobile





Backup material

Will be updated to cover our current offering

We can help you make a positive





p y pdifference at every stage

Differentiate by monitoring, analyzing, managing, charging and bundling services in real time Intelligent Packet

Core and Convergent Charging and Care

Industry-leading Value Added Services portfolio and end-user applications

New service creation Network and service optimization

Integrated provisioning Service management

Hosting solution

Care

Solution and business consulting

Innovate Launch MaximizeRamp

downCreate

Grow & Capture

by leveragingour extensiveresearch andknowledge base

services ina way thatencouragesand enablesrapid serviceadoption

serviceprofitability viaserviceassurance,revitalization andoperationalefficiency

services whileoptimizingCAPEXand OPEX

with shortesttime to marketand minimizedservicedevelopmentcosts

the massmarketthrough fullyscalablesolutions

Network simplification andend to end user experience management are key





end to end user experience management are key

Multi-Access

Network Architecture Vision

IP Networking, Transportand Aggregation

Service Core andApplications

OperationandBu

sinessS

upportSystems

Single, converged

Network

Single, converged

Network

Common services across

all access domains

Common services across

all access domains

People and ‘places’





Serving end-usersas privateindividuals

Serving end-users asmembers of communities

Serving end-users asconsumers and brandambassadors

How to Make Money With 3G_ TIM Part 2

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