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Revenue Assurance: What else?From Revenue Assurance to Margin Assurance
GRUPPO TELECOM ITALIA
Lisbon, May the 21st 2015
Evolution of Telecommunications Market
Revenue Assurance and Margin Assurance
Margin Assurance Overview
Margin Assurance Model: Other areas of implementation
Difficulties to verify the margin
Description of Margin Assurance Model
The «Margin Assurance» in Telecom Italia
Index
3
Evolution of Telecommunications MarketComparison between Italian market and European market
Average PRICE for FIXED BROADBAND offering is
HIGHER in Italy than in Europe
Average PRICE for
TYPICAL MOBILE offering
is LOWER in Italy than in Europe
Margin AssuranceSource: AGCOM – Quarterly Telecommunication Markets Observatory
*Average value in Germany, France, Spain, UK.
**Value of "dedicated data-only mobile broadband connections“
26,5
7,7
23,0
24,6
26,8
16,0
21,3
22,4 -
5,0
10,0
15,0
20,0
25,0
30,0
Fisso voce (£)
Mobilebroadband (£)
(**)
Fissobroadband (£)
Mobile voce edati (£)
Ita EU (*)
Mobile voice and data (£/month)
Fixed Voice Service (£/month)
Mobile Broadband
(£/month) (**)
Fixed Broadband (£/month)
Average PRICE for
TYPICAL FIXEDoffering stays IN LINE
Average PRICE for MOBILE VOICE & DATA offering is
HIGHER in Italy than in Europe
Daniele Gulinatti
4
Evolution of Telecommunications MarketThe «NEW» Business Model
Margin Assurance
BONUS
CREDIT NOTES
REFUND PROGRAM
RETENTIONPROGRAM
NEW BUSINESS
MODEL
NEW PRODUCT OFFERINGS
«ALL INCLUSIVE»«FLAT»
FREEBIES
BUNDLE
SUBSIDY
Daniele Gulinatti
5
ASYMMETRY between REVENUES and COSTS
monitoring of the MARGINALITY trend for each service/ bid
Evolution of Telecommunications MarketTraditional offerings vs New offerings – What’s the margin?
Margin Assurance
TIME
EURO
revenues
costs
TRADITIONAL OFFERINGRevenue Control could be still effetctive
margincosts
margin
NEW OFFERINGNOW you need a Margin Control on every single offer
TRADITIONAL OFFERINGRevenue Control could be still effetctive
Daniele Gulinatti
6
Think different
Margin Assurance
Daniele Gulinatti
7
Revenue Assurance and Margin AssuranceRevenue Assurance and Margin Assurance – What’s the link?
Margin Assurance
NEW Business Model
HIGH COMPETITION
PRODUCT CANNIBALIZATION
BUNDLE / FREEBIESBONUS
NEW OFFERING MODEL
NEW SERVICE MIX
Data
Voice Product
OTT SP
SMS
MMS
LTE
REVENUE ASSURANCE
COST ASSURANCE
MARGIN ASSURANCE
Daniele Gulinatti
8
COMPARE measured vs
planned MARGINALITY
Margin Assurance
Margin Assurance OverviewWhat is the Margin Assurance Model?
CHECK of the PROFITABILITY foreach offering
IDENTIFICATION of CRITICAL POINTS
FLEXIBLE MODEL to all type of service/ product
INVOLVEMENT of all CORPORATE STRUCTURES
Control
Monitoring Membership
Flexibility
Daniele Gulinatti
9Margin Assurance
Market sectors in which it’s possible to implement Margin Assurance
Margin Assurance Model: Other areas of implementation
INDUSTRIES
TELCO
INDIRECT REVENUES
Penalties
Rent office
Selling product
Penalties
DIRECT COSTS
ON/ OFF net
Commercial cost
Subsidy
Jackpot’s wins
Suppliers costs
Interconn. costs
Electricity production
Billing cost
Commercial cost
ENERGIES &
UTILITIES
GAMING & BETTING
DIRECT REVENUES
Game credit
Betting
Electricity services
Gas services
Access fees
VoiceSMS MMS
Product
Daniele Gulinatti
10Margin Assurance
Difficulties to verify the margin
BAD-STRUCTURED and complex processes.
INFORMATION SPLITTED between different Functions.
VARIOUS OFFERING solution for the Client.
HIGH COMPLEXITY of IT systems and network.
Intense DYNAMISM OF SERVICES.
Intense HETEROGENEITY of RATES of services/ bids.
Why is it difficult to verify the margins of services/bids?
Daniele Gulinatti
11Margin Assurance
Description of Margin Assurance ModelActions to execute the Margin Assurance model
MARGIN LEVEL
CHOOSE THE MARGIN LEVEL
11
DIRECT MARGIN
CONTRIBUTION MARGIN
EBITDA
DIRECT REVENUES
INDIRECT REVENUES
DIRECT COSTS
DIRECT REVENUES
INDIRECT REVENUES
DIRECT COSTS
COMMERC. COSTS
NWK COSTSDIRECT
REVENUESINDIRECT
REVENUESDIRECT COSTS
COMMERC. COSTS
Daniele Gulinatti
12Margin Assurance
Description of Margin Assurance ModelActions to execute the Margin Assurance model
MARGIN LEVEL
OFFERING
REVENUES & COSTS
ANALYSIS & CONTROLS
MARGIN ASSURANCE
11
22 44
33
ANALYSIS & CONTROL
ROOT CAUSES
ACTION PLANS
Daniele Gulinatti
CHOOSE THE OFFERING
DEVICE
VOICE
SMS
MMS
DATA
VAS
13Margin Assurance
The «Margin Assurance» in Telecom ItaliaChoose the MARGIN LEVEL
• VOICE• SMS• MMS• DATA• ROAMING
• PENALTIES • ON NET• OFF NET• INTERNATIONAL
COSTS • ROAMING COSTS• DEVICES’ COSTS
• COMMISSIONING
MARGIN LEVEL
OFFERING
REVENUES & COSTS
ANALYSIS & CONTROLS
MARGIN ASSURANCE
11
22 44
33
Daniele Gulinatti
CONTRIBUTION MARGIN
DIRECT REVENUES
INDIRECT REVENUES
DIRECT COSTS
COMMERC. COSTS
14
Video – Different Approach
Margin Assurance
Daniele Gulinatti
15
Look at things from a different point of view
Margin Assurance
Daniele Gulinatti
