Managing Next Generation Revenues

An Interconnect Case Study

Graham Carey, Portal

and

Csaba Hazay, Invitel

PORTAL CONFIDENTIAL 2

Agenda

Market Landscape

Enterprise Solutions

Lifestyle billing

Interconnect case study

Pricing simulations

PORTAL CONFIDENTIAL 3

Service Provider Challenges

Customer Pressure Demand for new services Personalized experience Customer satisfaction

Industry Pressure New entrants Cross-border competition Commoditization

Internal Pressure Operational complexity Decreasing margins Time to market

Technical Pressure Network Interoperability Advanced hardware

capabilities

ServiceProvider

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ServiceProvider

Service Provider Business GoalsSummary

Optimize Value of Customers Attract and retain the right customers Offer high-margin, high-value services Maximize customer lifetime value Optimise interconnect costs

Maximize Profitability Improve revenue

assurance Reduce total cost of

ownership Consolidate business

processes and systems

Enable Business Agility Introduce new services

quickly and cost effectively Real-time response to

market pressures Be prepared for the

unexpected – future-proof your business

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Evolution of Enterprise Solutions

CustomerManagement

Sales Force AutomationService Automation

Marketing

FinancialManagement

ManufacturingFinancials

HR

RevenueManagement

GenerationCapture

CollectionAssurance

Disparate applications across the enterprise have consolidated around three areas of management:

Customers, Financials and Revenues

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Enterprise Transformation

Transition to a customer-focused business– Build a global reach– Integrated customer experience

Convergence of business systems – Need one view of customer– Optimize operational efficiencies

Consolidation of revenue management solutions – To maximize revenue, profitability and

customer satisfaction, the market is evolving toward a unified approach to revenue management

CustomerManagement

RevenueManagement

FinancialManagement

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ServiceProvider

Service Provider Business Goals

Optimize Value of Customers Attract and retain the right customers Offer high-margin, high-value services Maximize customer lifetime value (CLV) Optimise interconnect costs

Maximize Profitability Improve revenue

assurance Reduce total cost of

ownership Consolidate business

processes and systems

Enable Business Agility Introduce new services

quickly and cost effectively Real-time response to

market pressures Be prepared for the

unexpected – future-proof your business

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Agenda

Market Landscape

Enterprise Solutions

Lifestyle billing

Interconnect case study

Pricing simulations

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Scenario 1:converged voice and data services

Reserve tickets

Find me nearestlive band

Order taxi

Purchase meal

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Maximise RevenuesMarginsCustomer satisfaction

Grow Customer baseLifetime value

DeliverRelevant services

Find me nearestlive band

Find me nearestlive band

Order taxiOrder taxi

Purchase mealPurchase mealReserve ticketsReserve tickets

Sacha & JadeSacha & Jade

Business Goals

Know your customers !

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Lifetime value and lifestyle billing

< 6

Dreamingof

mobility

How do we keep our customersas their lifestyles evolve?

16 - 25

Cash rich… credit poor… highly mobile

25 - 55

Credit rich… time starved…

56+

Disposable income… and a distributed family

7 – 15

Fixed allowance

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Agenda

Market Landscape

Enterprise Solutions

Lifestyle billing

Interconnect case study

Pricing simulations

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Invitel’s contribution

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Agenda

Market Landscape

Enterprise Solutions

Lifestyle billing

Interconnect case study

Pricing simulations

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What else can we do? an example from today!

How do we know what is the right tariff for our subscribers?

– One of our existing tariffs – One from our competitors– One of our new tariffs

?

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Scenario - illustration: an example from today!

How do we know what is the most attractive tariff for our subscribers (or subscriber segments)?

– One of our existing tariffs – One from our competitors– One of our new tariffs

Which tariffs would your subscribers move to if they had full knowledge of all the prices and options available from within your tariffs and those of your competitors?

?

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Scenario: ARPU comparisons

60% better off withcompetitor

Only 4% would be better off staying on

current tariff!

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EXCEL GUI!

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Segmenting the Customer base

Targeting the right subscriber segment

Making multiple segments

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Scenario 2: Avg margin & revenue per user

MARGIN vs Revenuey = 0,5864x + 1,0012

R2 = 0,7448

-10,00 €

10,00 €

30,00 €

50,00 €

70,00 €

90,00 €

Revenue (€)

Mar

gin

(€

)

Valuable customers

Low value customers

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Revenue Intelligence

Deliver value orientated view of each customer

Analyse Customer Behaviour Propose tariff migrations, eg prepaid to postpaid Calculate current & future CLV Increase campaign efficiency

Use customer behaviour to analyse market, maximise Customer Lifetime Value (CLV), and optimise IC costs

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Summary: Customer Distribution Plots

$

Lifetime

Margin

•Lifetime and margin position for each customer•Identify ‘best’ and ‘worst’ subscribers•‘Best’ contribute high margin with no risk of churn•Deliver targeted / segmented action plans