Teaser for Telecom Pricing Seminar - graphical way to introduce some of the Value & Pricing Challenges faced by Telecom Operators -

1. Strategic
Management of
Value & Pricing
for Mobile

2. Web 2.0
Paradigm

3. 14 Mobile Megatrends
1. From mega-portals to me-portals.
2. Content is aging; Content communication is king.
3. The internet is reaching into the phone.
4. The war of the application environments.
5. Value in mobile software is bubbling up.
6. OEMs go for services and vertical propositions.
7. Brand as the new form of equity in handsets.
8. Network operator strategies are shifting.
9. Browsing is out; engaging experiences are in.
10. Browser proxies bring the internet to the masses.
11. Open source is disrupting the status quo.
12. Nokia is now a tier-0 OEM.
13. Mobile is transforming to a FMCG business.
14. Channel ARPU: a new source of revenue.
Source: Andreas Constantinou, Ph.D. Research Director, VisionMobile

5. w e stern european* mobile content sales (in M€)
Western European mobile content sale (in M€)
7, 86 8
C A GR
v i d e o / TV / i n t e ra c t ion
m u s ic , r in g t o n e s & r i n g ba c k t o n e s
2,629
o t he r n o n m u s i c p e r s o na li z a t i o n
ga m es
o t he r in f o r m a t io n & e n t e r t a i n m e n t
+ 38%
2,289
3, 07 1
+ 17%
516
698
1,054
+ 1% 1,054
677 + 21%
415 1,197
409 + 24%
2006 2 0 11
source : Jupiter Research (11/2006)

6. So What ?
•New Customers
•New Business Models
•….

7. Mobile 3.0?
The whole world in my hands
= My Device is Me

8. WHAT DO WE DO WITH OUR MOBILE PHONES?
COMMUNICATION PERSONAL NEWS BITES PASSING TIME
SMS PRODUCTIVITY News Play video games
eMail Check Weather Product Info/reviews Download ringtones
Picture Messaging Tech news Download
Search the Web
Send/Receive Health/Sport wallpapers
Maps/Directions
Videos Social Sports Information Download videos
Movie info
Networking Entertainment News Download music
Stock Quotes
Blogging Horoscope
Financial news
Business
directories
Restaurant info
Trading Stocks
Transactions

9. Networked
Customers

10. 2 Way Value / Pricing Model
Service Providers
Brokers / Intermediaries
Telco Broking services
Retailers
VA Services
B2B VAS
Millions of
Channel Partners
Government Telco Customers
$ $
Platform
Advertisers Thousands of
Distribution
Distribution
Segments
Content Owners
Telco Retail

11. New Business Models emerging
Ad subsidized Free
Mobile Voice
Service Telephony
Wi-fi Community Ad subsidized
with Innovative Internet
Revenue Model Access

12. So What ?
•New Customers
•New Business Models
•….
•New activities
•New challenges
•…

14. Location based services

15. Advertiser…

16. Customer centric
MY PERSONAL DATA Contextual MY RELATIONSHIPS
Core customer data Knowledge of
Name, Address, personal and
Gender, National ID, business interactions
Profile & Preferences My bank, school,
workplace, friends
MY DEVICES MY INTERACTIONS
User ID linked to Naming and tracking
physical device or non-human resources
token; configuration .mobi domains, web
SIM, USIM, SoftSIM, serial browsing history,
number, profile & settings QR codes read
MY IDENTIFIERS MY STUFF
MY CONTEXT Digital Lifestyle
Identity and persona
creation for user User real-time activity Aggregators & PIM
Number, address or ID Pictures, Videos, Bookmarks,
provisioning; porting; avatars and environment History, Files ; Calendar,
Location, Motion, Address Book, To Do, Notes
Temperature, On/Off,
Roaming, In-call

17. So What ?
•New Customers
•New Business Models
•….
•New activities
•New challenges
•…
•A new Vision
•…

18. The Vision
A seamless,
far-reaching,
ever-present,
high-capacity,
Personal
personal
Broadband
broadband
communications
platform

19. So What ?
•New Customers
•New Business Models
•….
•New activities
•New challenges
•…
•A new Vision
•…
…. But….

20. Houston, we have a problem
•ARPU is stagnant
•Data represents less
than 15% of revenues
•Threats on Voice traffic
•New Competitors
flocking in
•Consumers perceive
Telco offers as
undifferentiated

21. What are you selling ?
…. To Whom ? ….

23. Value Proposition
What are your
product ratings vs
competition?
Product Quality
Service / Convenience /
Experience Availability
Perceived
Value
Brand/Image
What drives
Consumers’ Value
Perception?

24. User Content
Experience
Handsets
Network /
Coverage Price/
Promotion

25. Buying criteria for mobile customers in %
(Germany)
25% customer
customer customer
customer
24% customer
20%
19%
17%
15%
13%
10%
10% 10%
9%
5%
5%
0%
Qos/Coverage Pricing Handsets Community
First tier MNOs Second tier MNOs
Source: Arthur D. Little Analysis 2006

26. Feel you’re not getting
enough return on your
marketing investment?…

27. Value & Raising price …increases
by 1%… profit 12%
Pricing are the
101 9
largest Profit 8
levers… Operating
26
profit
• COGS
100
66
Sales Fixed
costs

28. Visibility
Experience
Quality
Brand
Value /
Price
SPMG
can help you
Find the right Balance

29. Value & Pricing strategy
Research Actions Results
Attitudes / Value Drivers Pricing & Value levers  Sales growth
 Segment share
Convenience
Experience
Quality
Brand
 Value Proposition
Consumption funnel
 Marketing Spend
 Profitability / ROI
 Price
%  Product quality
% %
% repeat  Promotion
trial use
awareness

30. How do you Stand out ?

31. SPMG can help you
•Understanding Customers’ Value Drivers
•segment & fence Market
•Develop Targeted Value Propositions
•Define Effective Business Models
•Select the right Price level
•Evaluate Potential & Target price for new products
•Optimize Clients’ Lifetime Value

32. Experience / Brand Advocacy

33. Bottom Line Impact
CompX acquired an
average of 20 000
new clients per month
Pricing research showed that a
different client focus and lower
9.95 upfront fees should greatly enhance
new client acquisitions
Indeed, that difference
9.30 translated into a trebling of
new client acquisitions & over
€300Mio in extra profit
20 000 60 000

34. Introduction to
Strategic Pricing Management Group

35. 1-Introduction
• Strategic Pricing Management Group (SPMG) is a Leading pricing strategy
Consultancy. We help large organizations achieve their profit goals by analyzing their
price challenges, and by helping them to develop and implement a price strategy that
captures the most value from their products and services
Currently, Strategic Pricing Management Group is present in 10 countries and is
doing projects in the five continents.
Projects developed in the last year
SPMG Group Offices.

36. International Offices
North America
Canada – H.Q United States
Michael Hurwich, CEO & President Alain Meloche , Vice-President
Zoltan Lorantffy, Director ameloche@youneedpricing.com
Info@youneedpricing.com
Europe
Europe Western Europe - France
Loic Le Corre, Managing Partner Eric Jacolin, Partner
llecorre@youneedpricing.com ejacolin@youneedpricing.com
Western Europe - Germany Central and Eastern Europe - Hungary
Heinz Otto Luehr , Partner Eniko Pongracz, Partner
holuehr@youneedpricing.com epongracz@youneedpricing.com
Asia
China -Hong Kong Indonesia - Tangerang
Edward Chan P, Eng, Partner Erwin Husin, Partner
echan@youneedpricing.com ehusin@youneedpricing.com
Latin-America
Brazil - Rio de Janeiro Mexico – Mexico City
Alex Carneiro, Partner Miguel Legorreta, MBA , Partner
acarneiro@youneedpricing.com mlegorreta@youneedpricing.com

37. Strategic Pricing Management Group –
Range of services
• Client/Consumer Value Drivers research
Research
• Price change impact research
• Transactional analysis/ Modeling
• Client Value & Satisfaction studies
• Product potential & ‘Willingness to pay’
• Client/Consumer segmentations
Strategy
• …..
Pricing
Advisory
• Value Based Pricing
• Pricing Strategies & Tactics
• Competitive Pricing / Price Wars
• Implementing Price Increases
Solutions
• Channel Pricing
Pricing
• New Product Launch
• ….
• Sales Force Training / Motivation
• Support/ Training of Pricing / Marketing teams
Support
• Decision Support Systems
• Deployment & management of ‘Test Platforms’
• Product/Service Full Cost Analysis
Management
• Pricing Process deployment
• Pricing & Competitive Intelligence & Benchmarking
Pricing
• …..
• Development / Reinforcement of Pricing Capabilities
• Redeployment of Pricing Processes
Process
• Management & optimization of ‘client conditions ’
• Multi-Channel Pricing / Pricing Corridors
• Change Management
• Value Propositions / Design to Price
• Pricing Software implementation Page 37
• …..

38. Strategic Pricing Management Group Europe
Specificity of approach proposed
• Senior Project Management team Important direct involvement of Key Senior staff on project
• Process & Change Management Dedicated Pricing Management Practice – full use of most effective
Expertise change & project management methodologies
• Client Integration Shared case team with systematic knowledge transfers
Consensus building
Only Pricing… but all aspects of Pricing.
• Unique Pricing Expertise Case Experience
•Case Experience De Facto standard for Professional Pricing Organizations
•World Class pricing Framework Unique Benchmark database, developed over 20 year of Pricing
•Benchmarks consulting
• Strong Analytical capabilities Strong Analytical capabilities
Strong B2B & B2C research & benchmarking capabilities
•Market Research
Strong analytical & statistical capabilities
•Statistics
•Modeling Recognized expertise in a priori modeling of impact of strategies
•Decision Support Tools Tools used for project to be left to Air Liquide for future use after
project is completed