The Future of Telecom (Petro Chernyshov Business Stream)

Lviv IT Arena The Future of Telecom

Peter Chernyshov, President of Kyivstar

IS IT SNAFU OR FUBAR SITUATION IN TELECOM?

25,4

mobile users

mln

100 %

shares owned by the international

telecommunication group VimpelCom

taxes paid to the budget of the country

47 bln

investments made in the

development of telecom market

in Ukraine

31 bln

in Ukraine

18 years

Kyivstar is the biggest Ukrainian mobile operator, a part of VimpelCom Group (NASDAQ Quoted)

EBITDA margin: The European telecom market, Q2'16

Kyivstar – is European telecom leader in EBITDA margin (№ 1 of 58 companies) with the index 55 %, ahead of the next operator, the Velcom Belarus, by 7 p.p.

Giffgaff uses the network of O2 to create virtual mobile operator of new generation. No call-center, no support, no offline retail.

Amazon Sells Kindles with built-in SIM cards

Google Fi project allows smartphones to connect to the network with the highest speed — no matter 4G it is or Wi-Fi

Telecom companies are becoming dumb pipes

1 2 3

The quantity of users of OTT on smartphones in the world, bln

By the end of 2017, there will be 2.9 bln users of OTT services on smartphones

The revenues of mobile operators in Western Europe, bln

Revenues from voice and SMS are declining faster than other segments

Revenues of Telecom Companies are falling

Revenues of telecom companies are decreasing globally, while OPEX & CAPEX are growing.

In the same time, OTT services become more and more popular

The falling of revenue from voice and SMS is the main reason for falling of telecom companies’ revenue

Minutes, bln SMS, mln Mobile data, TB

2014 Q2

2015 Q2

2016 Q2

414 445

376

2014 Q2

2015 Q2

2016 Q2

38,9 41,6

42,4

2014 Q2

2015 Q2

2016 Q2

3238 4924

8352

The consumption model is changing

2018 2015 20XX

New technologies and services drive telco capacity

26 000 Operations per second

1 000 000 Operations per second

1 000 000 XXX Operations per second

Innovations are vital for new values creation

Biotech

VR

Reality+

+

?

Block chain

loT

Fintech

20% of IT systems will be upgraded

How Kyivstar reacts

To achieve necessary scalability we’ll move to NoSQL

To reduce expenditures we move to open source solutions

To achieve real time cooperation with clients we unify data model for all BSS applications

To improve customer experience we implement omni-channel approach for all touch points = DIGITAL STACK

1 2 3 4 5

Example #1 — Digital Stack

Online Channels

Customer Management, Interaction, Support, Sales

Customer Order Management

Product Management

Billing, Mediation, Printing, Resource and Policy Management

Service Activation, Messaging

Integration

very old old rather new

Example #1 — Digital Stack

Online Channels

Customer Management, Interaction, Support, Sales

Customer Order Management

Product Management

Billing, Mediation, Printing, Resource and Policy Management

Service Activation, Messaging

Integration

MFS

Digital Full stack solution

Functional application

Managed server

Messaging layer

Common infornmation layer

Cloud execution environment

Example #2 — Big Data&Machine Learning

NPS prediction

Churn rate optimization

Target audience

Geo positioning data

Smart service offer

Future proof data management platform (DMP)

75% of detractors can be successfully defined

Since 2013 churn rate has fallen 1.5 times. Best rate in the world among similar Telco (monthly churn 1,5%)


NPS prediction Churn rate optimization

Machine learning allows to define our target audience for different products even on anonymous prepaid market (f.e. age, gender, interests, gamers, multy SIM users)


Target audience

• Points of presence optimization • Targeted geo advertising • City traffic management • Smart cities (smart parking, lighting etc.) • Big boards advertising placement optimization


Geo positioning data

We define those, who has high propensity to buy an offer. By sending them personal proposition our conversion rate increased up to 30%


Smart service offer

We are building 1,5 PB DMP platform based on Open Source technologies, same as used for Twitter and Google


Future proof data management platform

Personal Offer

Campaign Management

solution

Campaign management solution

Real time analytics of undefined users and creation of personal offers

5-18 % average response rate * *depending on channel

Big Data

Example #3 — Zoryana

75% of customers return to Zoryana

75%

70% of customers

give positive feedback

about chatbot

70%

Over 400K dialogs since

April 2016

400K

5K unique answers

5K

Based on natural language processing

technologies

Plugmee a hub that

connects all wireless sensors and devices to

single dashboard

Pibox a cloud storage and messenger in one

app, an easy way to send large files, even

RAW photos or 4k video in original

quality.

Virbox Teleport a platform for travelling in

VR360 format.

Example #4 — Partnership with VDNG-TECh

Open to mobile technology

entrepreneurs and startups from 8

countries

3 winners from Ukraine will join other regional

winners in the semi-finals

3 top winning teams will get $20 000, $15 000

$10 000 and go to Global Mobile Challenge held at Mobile World Congress

Example #5 — Eurasia Mobile Challenge

APPLY TILL OCTOBER 20 AT WWW.EURASIAMOBILECHALLENGE.COM

Get ready for the nearest future

5G

MFS

eSim Mobile

ID

IoT

Connected cars

Personal assistants

Clouds Virtual Reality &

Augmented reality

Innovation is hard because ‘solving problems people didn’t know they had’ and 'building something no one needs’ look identical at first.

Aaron Levie, Box

You have to make every single detail perfect. And you have to limit the number of details.

Jack Dorsey, Twitter

Not having a clear goal leads to death by a thousand compromises.

Mark Pincus, Zynga

I don’t know the key to success, but the key to failure is trying to please everyone.

Bill Cosby, actor, author

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Thank you