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

1. Credit bundles as a tool to differentiate, increase market share and revenue thierry.vandevelde@eservglobal.com senior product manager IQPC Convergent Billing, Frankfurt, 24/11/2005

2. 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. 2 | Commercial In Confidence

3. Today's Operators' main strategic objectivesin terms of market share Acquire new subscribers Increase ARPU (Revenue) Reduce ACPU (Cost) Reduce churn (increase loyalty) Operators cannot afford to work just in one direction p. 3 | Commercial In Confidence

4. Residential/SOHO SME Corporate MVNO's & channels fixed-mobile VPN triple play 2.5G-3G mobile office pre/postpaid convergence simple tariffs Operations, Marketing & CRM benefits better content new credit distribution channels substitute fixed by mobile Inter-account, Bank-to-mobile, Web… new network technology NGN services reduce the OPEX per BHCA/BHSA … …because the acquisition cost is high anyway (could become contradictory objectives) Promotions Campaigns more tailorised & more real-time target users based on their likelihood to churn, and new service usage criteria A toolsetof possible strategic directions Acquire new subscribers Increase ARPU Reduce ACPU Reduce churn p. 4 | Commercial In Confidence

5. 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 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) p. 5 | Commercial In Confidence

6. 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! 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 100% Real Time p. 6 | Commercial In Confidence

7. Credit Bundle System HLR Definitionof a Credit Bundle System Provisioning & CRM Postpaid Billing System Prepaid IN SCP SS7 INAP CAP CDR transfer purchasing & self-care MSC SGSN CSCF SIP ? ? MAP UCP SMPP MM4 GSM, GPRS, IMS NGN SMS, MMS p. 7 | Commercial In Confidence

8. 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. 8 | Commercial In Confidence

9. Credit bundleshave effects in multiple directions Residential/SOHO SME Corporate MVNO's & channels fixed-mobile VPN triple play 2.5G-3G mobile office Acquire new subscribers Increase ARPU pre/postpaid convergence simple tariffs Reduce ACPU Operations, Marketing & CRM benefits better content new credit distribution channels credit bundles fixed mobile conv. Inter-account, Bank-to-mobile, Web… new network technology NGN services Reduce churn reduce the OPEX per BHCA/BHSA …because the acquisition cost is high anyway (could become contradictory objectives) Promotions Campaigns more tailorised & more real-time target users based on their likelihood to churn, and new service usage criteria p. 9 | Commercial In Confidence

10. invoice scratch voucher postpaid account shop e-voucher IVR IVR Web SMS Web PI IVR PI or IVR parent prepaid account credit bundle IVR Web SMS eRefill eRefill EU e-money directive parent usage child prepaid account child usage Credit distribution channels cash debit card credit card bank account p. 10 | Commercial In Confidence

11. eSG Charging Control ServicesService Providers, Product Types, Accounts, Wallets & Balances USMS + UAS domain ID CLI Description, language PIN selected flag PIN Account currency Allowed/Barring lists Friends & Destination lists, Number Translations Credit Card Details Audit fields, populated by system Call Data Records Account Profile Tags 1 Service Provider Product Type Account reference (subscriber) N 1 N 1 Default Language Contact Details Default Wallet Type Name & Periods Restriction Plans Announcements Call Barring Number Translations Bypass Numbers Credit Card recharge rules Second Currency What’s New Help & Info Product Type swap policy Node Options Min. credit Balance Control Plans Named Events Tariff Plans Product Profile Tags 1 1 Universal Billing Engine (UBE) domain N 1 1 Wallet Type Personal Wallet Personal Wallet Business Balance Cascade … State, Expiry Date # Concurrent accesses 1 N Balance General cash Balance SMS Balance Content Balance Roaming Balance type (debit, single use debit, credit, limited credit.) 1 N Bucket 5 valid 7/11 Bucket 9 valid 17/11 Java based operations & self-care #Units Unit Expiry date Last use date p. 11 | Commercial In Confidence

12. 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 … p. 12 | Commercial In Confidence

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

14. Thank you! [back to main menu]