Market Driven Service introduction – Strategies for Differentiation and Expansion
description
Transcript of Market Driven Service introduction – Strategies for Differentiation and Expansion
Soc Classification level 1 © Nokia Siemens Networks
Market Driven Service introduction – Strategies for Differentiation and Expansion
Sofia, 2009-04-02
Wim Ketelbueters
Head of Services Solution Sales, WSE, Central East
Soc Classification level 2 © Nokia Siemens Networks
User insights drive service provider business
Service providers can use user insights to:• Improve business
performance• Add value in a changing
business ecosystem
5 billion people connected
* Source: Nokia Siemens Networks market research and analysis
20-30% of users bring 70-80% total value to service providers. Often only 50% of users are profitable.*
Soc Classification level 3 © Nokia Siemens Networks
Reducing churn leads to higher margins
Source: FY 2007 reports for operators with fiscal year ending December; 9m reports for operators with fiscal year ending March [marked A)]; 1H reports for operators with fiscal year ending June [marked B)] – all to the degree reported 28 Mar
Service providers fight for market share with high customer acquisition & retention costs
Churn has a negative impact on EBITDA margins
EBITDA margin
Soc Classification level 4 © Nokia Siemens Networks
Putting customers at the heart of business
Network-centric User-centricApplication-centric
Business competitiveness
Personal, Communities and Converged Services
74% of service providers have started to move to a more customer-focused delivery model over the past 12 months
Network Features Silo ApplicationsReal time and long term user andbusiness insight
Soc Classification level 5 © Nokia Siemens Networks
Moving towards a unified customer viewToday 87% of service providers do not have a unified view of user data
• 87% of CSPs do not possess a unified user data view
Key priorities: • Real time user profiling• Knowledge on
Customer Life Time Value through long term user trends analysis
Do you have plans to have a unified view of customers across the business?
source: Loudhouse Market Research Q3/2007, commissioned by Apertio
Don’t know
No plans
In next 12 – 24months
In next 6 months
Already
42%
14%
8%
14%
22%
5%5%
18%
13%
60%
0%
10%
20%
30%
40%
50%
60%
70%
Marketing
IT
Soc Classification level 6 © Nokia Siemens Networks
User insights improve business performance
Cost and billingTargeted tariff plans, bonus schemes and hybrid offers help Telkomsel Indonesia improve customer loyalty and increase average revenue per user. €
Quality Data revenue increased 5M€ and voice revenue increased by 7M in home environment for a European service provider with 25 M subscribers after applying user insights understanding in service and network optimization.
Customer service 15% reduction in help-desk work orders (330 € each), and help desk solved 30% more 2G incidents and 50% more 3G incidents after a European service provider applied user insights to customer care. Estimated OPEX savings: 2.2 M€ pa
Portfolio Right time to launch new products/services and support for business decisions based on device insights – European service provider.
45% reduction in annual OPEX for customer surveys and internal efficiency gain of over 75% in market research in a European service provider’s CMO
Brand
Soc Classification level 7 © Nokia Siemens Networks
End user insights – Business Ecosystem Will operators loose out on $1 trillion* in Web 2.0?
Broadband bit pipes
Web 2.0
Terminals Fixed/cable
POTSphone
ISDNphone
SIPphone
PCClient TV SIP SIP
Mobilephone PDA
Multiradio Mobile platform
Transform or become a bit pipe?
*LIGHTREADING, VOL. 7, NO.6, JUNE 2007
Soc Classification level 8 © Nokia Siemens Networks
Business model is changing
Subscribers VendorsOperator
Single product delivery model
Business model is changing :
•Convergence of telecom, broadcasting and internet industry
•Role of traditional CSP’s are changing
•Partnership between end user, CSP and partners
Traditional business model
Soc Classification level 9 © Nokia Siemens Networks
Generic Operator Ecosystem
EquipmentVendors
ContentAggregators
Corporate
clientsMVNOs
Core Network Operator
Access Network Operator
End UsersValue Added
Service Providers
Regulator
Fixedoperators
IT PartnersOutsourcing License Owner
Investors
ServiceOperator
ContentProviders
Content Producers/
Owners
Site landlords
Network Operator
Soc Classification level 10 © Nokia Siemens Networks
Communication Ecosystem – Conceptual Framework1. Which ecosystem is it? Operator view
Rel
atio
nsh
ip C
om
ple
xity
Technological Complexity of Offering
High
HighLow
River
Coral Reef
Aquarium
Raft
Soc Classification level 11 © Nokia Siemens Networks
Communication Ecosystem – Conceptual Framework
Rel
atio
nsh
ip C
om
ple
xity
Technological Complexity of Offering
High
HighLow
AquariumRiver
Raft Coral Reef
Soc Classification level 12 © Nokia Siemens Networks
Evolution into different ecosystems emphasises various ”operator” roles
Re
lati
on
sh
ip C
om
ple
xit
y
Technological Complexity of Offering
High
HighLow
River
Coral Reef
Aquarium
Raft
Evolution trends
Service Operator
Content Aggregator
Network Operator
Service Operator
Content Aggregator
Network Operator Critical/
Emphasised
Network Operator
Service Operator
Content Aggregator
Soc Classification level 13 © Nokia Siemens Networks
Evolution drivers
Market foundation(Country and industry macro-economic factors)
Coordination
Complexity
Collaboration
Convergence
Saturation
General Influencers/Drivers
Regulatory evolution
Technology
End-user behaviourand preferences
Competition
Growth
Profitability
Internalcapabilities
External Influencers/Drivers
Internal Influencers/Drivers
Ecosystem position
Environment
Soc Classification level 14 © Nokia Siemens Networks
How to ensure growth?R
ela
tio
ns
hip
Co
mp
lex
ity
Technological Complexity of Offering
High
HighLow
Segmentation
Typically, a Raft operator has to excel at meeting the
market demand and its buying criteria
Price
The River operator ultimately grows by
competing on (market) price for network capacity
Service
By offering new services, the Coral Reef operator
grows the market and its market share
Quality
The Aquarium operator grows by offering high quality and extensive
service portfolio
Soc Classification level 15 © Nokia Siemens Networks
How to ensure profitability?R
ela
tio
ns
hip
Co
mp
lex
ity
Technological Complexity of Offering
High
HighLow
Operational efficiency & Premium services
(Specialisation in operations and/or in market offering)
Capacity utilisation & Volume
(Optimisation of network capacity and maximisation of
volumes)
Premium services & Risk distribution
(High(er) margin on service offering AND distribution of risk
through partner collaboration and coordination)
All
(The Aquarium operator ecosystem implies that an
operator excels at everything, unless a regulated monopoly
limits the number of operators)
Soc Classification level 16 © Nokia Siemens Networks
Risks and barriersR
ela
tio
ns
hip
Co
mp
lex
ity
Technological Complexity of Offering
High
HighLow
RAFT
Dependency on external supply of network capacity reduces the available margin for competition (and error)
RIVER
The large investments in combination with falling prices risk pushing profitability downwards
CORAL REEF
The coordination needs may lead to higher costs and slower market response than required
AQUARIUMA large integrated operation risks being less flexible in a deregulated fast-moving market and may have difficulties staying competitive
Soc Classification level 17 © Nokia Siemens Networks
Communication Ecosystem
Soc Classification level 18 © Nokia Siemens Networks
What can the efficiency calculator show?
Highly inefficient
Least Output
Highest Output
Least Input
Highest Input
Highly Efficient
Efficiency Zone Inefficiency Zone
ILLUSTRATIVE analysis of the
GLOBAL market. This analysis can be
created at a regional level
KT CorpTelenor
AT&T
VerizonCommunications
DeutscheTelekom
Telecom ItaliaNTT DoCoMo
KDDI
PCCW Group
Vodacom GroupMTN Group
BT Group
KPN
China Telecom Corporation
France Telecom
TeliaSonera
Telstra
Telefonica
VodafoneGroup
Comcast
All operators should aim
to be in the yellow zone.
From our analysis there are few if any operators currently in the top left quadrant of
the diagram which is the highly efficiency area.
Nokia Siemens Networks analysis on how efficient operators are
Soc Classification level 19 © Nokia Siemens Networks
Nokia Siemens Networks helps to structure our wealth of information to facilitate knowledge sharing, discussions, and the decision-making process
• Communications Ecosystem: Position your business in the industry and analyze your options for moving ahead
• Differentiation Benchmark: Benchmark your differentiation profile to better understand your current market situation
• Community Finder: Discover the best ways to profit by offering new services to communities
• Customer Value Indicator: Compare your average customer profits against the regional benchmark. See the impact that loyalty has on your bottom line.
• Operational Efficiency Benchmark: Compare your operational efficiency against the top performers in your market
• Consumer Total Cost of Ownership: See how much consumers need to spend to be connected in the low income markets
• Connectivity Scorecard: Compare how well different countries have put communication technology in use
• Business Modeling tools:• Base station energy efficiency comparisons• Hosting (use case: MMS)• Mobile TV• Fixed-Mobile Convergence• Integrated Provisioning• Village Connection / NGM
Soc Classification level 20 © Nokia Siemens Networks
Fit for Business – market radarA unique way of looking at the market dynamics
Drawing on our accumulated consumer, operator and market knowledge and research, our Solutioneers are dedicated to understand and find solutions for your changing business needs.
All this knowledge has been collected in our
unique Fit for Business tool. We can scan and evaluate opportunities together with you for your competitiveness in the areas of both immediate operational effectiveness, and longer-term strategic positioning.
Soc Classification level 21 © Nokia Siemens Networks
Our proven track record
Over 500 systems integration projects globally
More than 160 consulting engagements for over 70 operators globally
More than 200 2G/3G commercial networks optimized,
and more than 80 multi-vendor optimization projects
More than 360 service management CSP installations globally – mobile and fixed
250 charging CSP customers globally – mobile and fixed
Over 45 subscriber data management customers
HLRs serving more than
1 billion subscribers every day
Soc Classification level 22 © Nokia Siemens Networks
Thank You !
Soc Classification level 23 © Nokia Siemens Networks
Appendix
Soc Classification level 24 © Nokia Siemens Networks
Defining the ecosystem type 1/2: defining factors
• Relationship complexity
• Level of dependency on external contributors to deliver its product & service offering to its customer segments:
– Content creation
– Service providers
– Technology platforms: outsourcing
• Granularity of customer segmentation
• Technological complexity of offering
• Technical platforms and;
• Service platforms in operator network
• Degree of ownership of technical & service platforms
Soc Classification level 25 © Nokia Siemens Networks
Defining the ecosystem type 2/2: the viewpoints
Technology • Operators ownership and attitude towards different technologies.
• Approach to research and development (in-house or outsourced).
• % of headcount in network operations & management.
Licensing
• To have the license or not.
Content and value-added services (VAS) • Operators attitude towards content and VAS creation and delivery.
Customer segmentation
• Number and types of segments addressed.
Marketing, retail network and distribution
• Operators means to approach its customers.
• % of headcount in M&S.
Soc Classification level 26 © Nokia Siemens Networks
River
Technology & Licensing• License/no license
– Radio capacity retailer & network manager, or– Radio capacity retailer only, or– Network manager/platform only
• Focus on basic-technology core & access networks– Wide coverage– Flexible platform (neutral to access)– Neutral to packet- or circuit switched
• Lets customers take care of application layer solutions
• Highly adaptive to new access technologies
Content & Value Added Services• No or minimal content & applications
Segmentation • B2B
Marketing, Retail Network & Distribution• B2B• Minimal visibility to individual end-users• Very low personalization
“Offers an environment (or parts of it) for everyone that is willing and able”
River
Examples:
Network providers
Soc Classification level 27 © Nokia Siemens Networks
Raft “No infrastructure, moves easily about its ecosystem ”
Examples:
Resellers, service operators, MVNOs & MVNEs
Technology & Licensing:• Minimal infrastructure (if any)• No license ownership• Indifferent or adaptive to new disruptive technologies
Content & Value Added Services:• Capacity buyer• Content buyer & provider• Focused on parents brand & customer service
(e.g. Wal-Mart)Segmentation
• Highly focused segmentation• Segmentation on distribution (internet users)
Marketing, Retail Network & Distribution• Very aggressive push mode• Maximising visibility to chosen customers segments• Marketing & sales oriented organization• Diverse retail network
(or through main business outlets, e.g. Tesco)• Diverse service offering• Moves quickly and easily in the market • High personalization• Internet as distribution channel• Brand
Raft
Soc Classification level 28 © Nokia Siemens Networks
Aquarium “Solid infrastructure, sets circumstances for its surroundings”
Technology & Licensing•License owner•Own network
–New service platforms–Possibly proprietary solutions
•New disruptive technologies threat
Content & Value Added Services•Restricted outsourcing•Own portal•Own content development•“Gatekeeper”: firm control over external content
Segmentation•Volumes to masses: addressing all segments
Marketing, Retail Network & Distribution•Low personalization•Typically firmly integrated subscriber/retailer network
Examples:
Walled-garden
Aquarium
Soc Classification level 29 © Nokia Siemens Networks
Coral Reef “Neutral to infrastructure and highly prospering and colorful ecosystem”
Technology & Licensing• License owner• Neutral to infrastructure & technology• Network/infra outsourcing• Neutral or adaptive to new disruptive
technologies
Content & Value Added Services• Has highly advanced & open business
network• New innovative cooperation methods
– Revenue sharing– Hosting– Managed Services– Content outsourcing
• High number of agents in its ecosystem
Segmentation• Focus on key segments• Maybe several brands for different
market segments• High personalization
Examples:
Traditional innovators
Marketing, Retail Network & Distribution
•New & innovative service orientation•Diverse subscriber/retailer network
– Few flagship stores– Franchising & partnerships– Very selective on retailers
•Brand
Coral Reef