transforming b2c propositions...5. new models for revenue growth messaging as a platform will be key...

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OrangeTransformingB2C Propositions

Jean-Marie Culpin

SAWAS: 12 December 2017


Contents

How can operatorsevolve their offers

to respond to this change2

Consumer propositions areundergoing a significant

transformation1

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Not so long ago, consumer propositions where very different..

Segmented propositions built aroundvoice, messaging and data usage

Distinct Mobile and Fixed offers

Devices subsidies used as key retention lever

Clear differences between Postpaidand Prepay offers

Main competition from local operators

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Today, unlimited is the norm in many countries…

To differentiate from local competitors… and protect usage from OTT players

Started with unlimited voice & messaging– Limited network impact– X-Net in markets where regulators lowered MTRs– Sustained SMS in some Countries, e.g. FR

But now unlimited has moved to data offers– First in US– Now in Europe (Free, €15 Unlimited Everything)– Inevitable that it will come to MEA region

“I declare that the era of the data plan is over”

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… and it’s creating a risk to the economic model of mobile data

Cheap & unlimited data across the portfolio, drives a significant increase in data AUPU

Retail prices per GB are falling fasterthan the costs per GB

Difficult for “premium” operators to respond without starting a “race to the bottom”

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…and it’s becoming the dominant offer structure in Europe

Rationale: The more services taken by a customer, the lower their churn

Created Risks: For operators who didn’t have the complete set of assets– Threat from cross subsidising offers– High M&A activity in Europe to fill gaps

Results: 80% of Postpaid connections in Spainare now convergence; Mobile-Only is niche

First offers: Price saving from combiningtwo products

Ongoing strategy: Upsell more family linesand more services within the bundle

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Subsidies are disappearing from many European Markets

Not our strategy to drive this trend!– But once a major player launches SIM only– Then market becomes set to the lower price– And then it’s hard not to follow

In some Countries subsidies have been completelyreplaced by SIM only– Subsidies reduced by 50% over past 5 years at Group Level– Instalments & leasing provide solutions for customers

who are unable to pay up front

Lower share of device sales in Operator channels– Strong growth from electronics retailers, online channels,

and large OEMs like Apple and Samsung

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Contents

How can operatorsevolve their offers

to respond to this change2

Consumer propositions areundergoing a significant

transformation1

11 Orange Restricted

High level strategy for Orange to respond to this transformation

1. New forms of differentiation within offers

2. Shift market focus away from price

3. Stay ahead of OTT players

4. Retain a strong role in selling devices

5. New models for revenue growth


1. New forms of differentiation within offersInclusive digital services to deepen the customer relationship

Encourage customer to try

And flexibility to change their minds

Portfolio of global and local partners

Must be relevantExclusivity hard to achieve

Bundle services with devicesSmart TV, games

console, wearables…

Inclusive content and services

Bundled or Pick & MixPayment via Orange Bill

Content categories (Global Revenue €Bn)

Ideate DigiWorld Yearbook 2016


1. New forms of differentiation within offersTelia Denmark provides a good illustration on what is possible

Data allowance aligned with services included

Customer pick the services they want

(Operator’s & 3rd parties’)

Showcases coreoffer benefits

Supplement forsome menu items


2. Shift focus away from priceNetwork Marketing to maximise customer’s perception & visibility

Network is stillcritical for customers

New use cases increase pressure on networks(VoD, online gaming…)

Improve the way we market our networks, to ensure customer

perception is at least as good as reality

Customer driven capex

allocation

Engage with customers about the network

Network centric offers and services


2. Shift focus away from priceBuild an emotional connection with customers

Continuously improve

customer experiences

Show empathy and understanding

Reward loyaltyand commitment

Build brand power by driving

meaningfulnessto customers

Implement a customer

engagement strategy

Emotional commitment

=More profitable

relationships


3. Stay ahead of OTT playersEvolve our communication services to retain customer usage…

RCS for enhanced voice & messaging

And drive new MaaP opportunities

Video calling from smartphone, laptops

and PCs

High quality International Calls

to differentiate from low cost OTTs

New voice innovations

VoLTE, WiFi Calling, Super HD Voice…

OTTs dominant on IM, and now targeting

voice and video

Emerging revenue opportunity from Messaging as a Platform (MaaP)


3. Stay ahead of OTT players…and increase Orange reach and value for our customers

Meet customer’s needs:Simplicity, Flexibility and Control

Protect customers

with an enhance call experience

Orange Telephone antispam, caller and

price info

Provide flexibility and

control

Multiple numbers in any device.

Synchronization of services in the

cloud

Services seamlessly

work across multiple devices

SIM and SIM-less

IMS devices / networks open the possibilities for

“comms in the cloud”

Opening of the dialler enables Orange to offer

new features


4. Retain a strong role in selling devicesImprove retailing capabilities and leverage new categories

Build retailing credentials

Become a destination for buying devices,

in store and online

Wide choice of brands

Challengers, Orange Branded Devices, including

in new categories…

Differentiated Orange experienceMultiple payment options, bonus Mbytes for buying

at Orange shops…

A relevant range of connected devices

Smart TVs, Wearables, Connected Objects,

Smart Home, …

Smartphone sales growth slowing

New device categories(Smart TV’s, wearables,

drones, game consoles…)


5. New models for revenue growthIoT creates a new category of devices and services

Start by selling connected objects

Launch home security and assistance offers

Develop smart home ecosystem

Address automotive and wellness verticals

IoT potential confirmed although adoption slower than originally expected


5. New models for revenue growth5G deployment will support our ambitions on IoT

5G enables connectivity in areas of properties not served well by WiFi

5G connects security focussed devices

Devices that will work adequately with WiFi or Bluetooth

Source: Strategy Analytics 2017

5G supports WiFi connectivity in Smart Home

5G provides new driver support systems and the path towards fully autonomous vehicles

5G enables B2Buse cases, including

remote management of machinery


5. New models for revenue growth5G will also support enhanced MBB offers

Improved VR / AR Experience Richer Content Streaming Telepresence

More life-like:Ultra-HD, low latency, broader viewing angle

More immersive VR games: 360 degrees

Better AR e-commerce experience

Ultra-HD video on demand streaming with multi-viewing angles

Broader adoption of HD live streaming (up-linking)

360-degree audio

Nascent holography technology on mobile

Multimodal and multi-dimensional interaction:seen, heard and touched

3D maps

High speed data transmission and low latency upgrade the Mobile Media Experience

Source: Strategy Analytics 2017


5. New models for revenue growthMessaging as a Platform will be key channel for mobile commerce

-Closed pilot for a Business Messaging

-Businesses verified by WhatsAppwith green logo

-Business chats coloured yellow

-Customer can block the business

Pioneered modelin China

Messenger now has

commerce

Business Messaging Pilot

Operators can also target MaaP with

RCS

RCS


5. New models for revenue growth… with the potential for a wide range of use cases

UserInitiated

Non-Commercial Interactions

BusinessInitiated

Commercial Interactions

‒ Business pushes advertising to customers‒ Profiling required to prevent customer spam‒ Depends on local regulation for customer consent

‒ Orange sends direct marketing messages to customers (e.g. new roaming offer…)

‒Customer shops online for something

‒Customer pays for Car parking

‒Customer buys product from vending machine

‒Customer scans a QR code to pay for taxi

‒Customer makes a donation to a charity

‒Customer registers a vote for a reality TV show

‒Customer checks bank balance and transfers money between bank accounts

‒Customer downloads an airline boarding pass or railway ticket onto their phone

‒Customer checks usage on Orange Care Bot

‒Customer requests PUK code from operator

‒Customer registers a child’s birth (MEA)

‒ Courier sends update on parcel delivery

‒ Doctor sends appointment reminder

‒ Airline pushes check-in notification

‒ Train company updates on journey delays


5. New models for revenue growthVideo customer care

New channel for customer care

Provides customers with improved support, particularly for technology related queries

Businesses may be willing to pay forhigh-quality video calls for premiumcustomer

Or zero-rate charges for the end user with Sponsored Data


Thanks

transforming b2c propositions...5. new models for revenue growth messaging as a platform will be key...

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