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Global digital telecom playbookTelcos reinvent themselves inthe digital age
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About this document
► In an evermore digital world, telcos face increasingly challenging competitive environments and rising customer expectations.
► Operators need to seize digital opportunities and reinforce their positions by moving from being communication service providers to digital service providers.
► The global digital telecom playbook and EY’s Advisory services can help operators with this transformation.
Purpose
Communication service provider
Digitalservice provider
Industry challenges & opportunities
Digital transformation paths
Use cases & best practices
EY expertise & offerings
Market trends & customer perspectives
Content
► All telco operators: incumbent and greenfield, quadruple play, triple play, mobile only, emerging markets and mature markets
► Adjacent industry service providers
Target Audience
111
2
3
4
The digital revolution: market trends and challenges for telcos
Digital transformation path for telcos
Telcos’ digital best practices anduse cases
EY offerings for telcos’ digital transformation
Agenda
11 The digital revolution: market trends and challenges for telcos
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Digital is already part of our daily lives; adoption is driven by customer demand for real-time information and seamless interactions across devices
Sources: TechCrunch; EY analysis
90% of all consumers simultaneously use multiple connected devices.81% of spontaneous purchases are made via smartphone.
€216 is the average European spend on online shopping per year.
TVs now provide a wide range of interactive services.
Social media is turning into a sales and services channel.
More than 241 million tweets are sent every day.
Data traffic via smartphone is predicted to grow 53% by 2020.
In the last two minutes,80 Americans have switched to smartphones.
Consumers are spending over 85% of their time on their smartphones using native applications.
In a typical month, about 300 million apps are downloaded in Germany.
Instagram is growing rapidly and now has more than 400 million active users ... but at the same time, Facebook has 1.5 billion active viewers.
72 hours of video is uploaded to YouTube every minute.As of 2011, Amazon.comsells more electronic books than printed ones.
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With new digital behaviors, customer expectations and needs shift
… telcos have to strive for customer experience excellence.
Unpredictable omnichannel
Augmented realityWin/win big data
Service gamification
As customer behavior and expectations evolve …
Personalization“I am adapting my loans to my projects and capabilities.”
Autonomy“I am managing the level of assistance that I need.”
Consistency in contact points“I am in contact with my telco throughout many channels on
a continuous basis, and I receive consistent notifications across channels.”
Multiscreen and seamless experience“I can access all my services on each of my devices
(with a mobile-first mindset).”
Socialization and simulation“I have access to clear, consistent and transparent
information.”
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0200400600800
1,0001,200
2010
2011
2012
2013
2014
2015
2016
E
2017
F
2018
F
2019
F
2020
F
Telcos face many challenges due to stagnant growth of the industry and increasing direct and indirect competition
OutmodedIT systems
Market consolidation with numerous
M&A deals
Regulatory pressureon pricing
Fully saturated markets
Intense competitionlarge number of players (including
over-the-top (OTT))
Siloedorganizational
structures
Sources: Informa; OVUM; GSMA; EY analysis
Digital will become increasingly CAPEX-demanding for telcos, as data consumption accelerates traffic
on networks
050
100150200250
2010
2011
2012
2013
2014
2015
2016
E
2017
F
2018
F
2019
F
2020
F
02,00,0004,00,0006,00,0008,00,000
10,00,00012,00,000
2015 2016E 2017F 2018F 2019F 2020FVideo Games MusicWeb browsing Social networking Communications
Total global revenues (US$ billions)
Global mobile operator CAPEX (US$ billions)
Global network traffic forecast (PB per year)
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As a response to this downward revenue trend, telecom operators should seek opportunities elsewhere in the digital ecosystem
CommentsGlobal mobile and digital ecosystem value forecast 2010–25
► The mobile and digital ecosystem will grow significantly to a total of US$3.6 billion by 2025.
► Traditional operators will continue to take a smaller share of overall revenues, putting further pressure on free cash flow and investment.
► The two areas with the strongest growth are the Internet of Things (IoT), along with content and video.
► The IoT market will see significant growth to reach US$700 billion by 2025.
► The content and video space will see faster overall growth (25% CAGR).
1) IoT market is defined as that portion addressable by mobile operators.Sources: Informa; OVUM; GSMA; EY analysis
$3 billion
0
$2 billion
$1 billion
$4 billion
17%
12%5%
20252020
8%
13%
19%24%
9%
27%
11%
23%
16%
US$ 3.65 billion
24%
9%
US$ 1.67 billion
19%
32%
US$ 2.36 billion
2015
21%
12%
US$ billion
Voice/SMS IoT and M2MContent and video Advertising Enterprise and cloudData
CAGR
-4,7%
+10,6%
+20,9%
+17,9%
+9,6%
+5,5%
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Telecom operators can leverage four main opportunities to grow their revenues in the digital landscape
Source: EY analysis
Telecom operators How to grow beyond core?
Content and video
(OTT)
IoTand M2M
Enterprise and cloud
Advertising and big
data
22 Digital transformation path for telcos
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To succeed in the rapidly evolving digital ecosystem, telcos need to define clear strategies and paths for digital transformation
► Growth and adjacent business opportunities with OTT offers, M2M/IoT services, cloud services, big data and advertising
► Experience: customer satisfaction measurement (NPS), customer experience management: product and service experience, customer journey design optimization
► Business digitalization: omnichannel blueprint definition (sales and care), design and launch of digital operator (greenfield, sub-brand, MVNO), online sales strategy/performance improvement
► Analytics: customer analytics platform specification and implementation, data monetization (mobile/localization, TV audience measurement)
► IT and technology: reach new customers via internet, provide better quality and faster services, such as, fiber optic cables, new computers
► People, organization and culture: develop internal digital awareness with initiatives, such as, digital HR and digital supply chain, hire new talents and develop a digital organization
► Risk and cybersecurity: secure data collection and manage associated risks
Capturing new digital opportunities
Digital growth and adjacent business
Mor
e
Personalized and improved
experience
Digital driven omnichannel
Advanced customer analytics
Customer-led digital transformation
Cor
e
Digital IT and technology
People, organization and culture evolution
Risk and cybersecurity management
Embracing digital capabilities and shifting culture
Cap
abili
ties
Source: EY strategic framework for telcos digital transformation
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On the road to digital transformation, telcos need to strategize and plan on how to organize for digital, based on their current digital maturity
Dig
ital m
atur
ityH
igh
Low
Implementation complexity HighLow
EstablishedBuilders
TransformersPioneers
Established
Digital ambition dampened by high implementation barriers; digital initiatives launched in pockets leading to low maturity
TransformersDigital ambition to be competitive in the market; quick to implement given their size and scale
BuildersDigital ambition; high abilities to embed digital in existing capabilities; digitizing integrated customer interfaces
PioneersHigh digital differentiation; early digital adopter and drivers of digital innovation
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Large telcos in Europe have initiated three main types of initiatives to address digital transformation challenges
Description and stakes
Group digital initiative(Center of Excellence)
Digitalization of the main brands(Opco)
Launch of a 100% digital sub-brand(e.g., Digital MVNO)
Examples
► Digital initiatives need a momentum at the group level demonstrating that this is a priority.
► Digital strategy should be aligned with corporate and business strategy so that it creates a competitive advantage.
► The digital business unit of a leading mobile network operator (MNO) in Germany is in charge of coordinating most of the digital and innovation initiatives of the group.
► The leading MNO in Spain has created a business unit dedicated to innovation and digital.
► Increasing competition is reducing margins, so telcos must differentiate their offering, increase their customer base and reduce customer relationship costs.
► Customers are becoming increasingly autonomous and able (and willing) to manage the online end-to-end journey, with no human support.
► The leading MNO in France expects 50% of client interactions through digital in 2017 vs. 30% as of today.
► The MNO challenger in France has engaged an agile digital transformation of its main brand.
► Low financial risk (low entry costs, low fixed costs, low exit costs, etc.)
► Short time-to-market (four to six months)
► High innovative impact (on brand perception and processes) operation (e.g., creation of new best practices to be replicated in other business units/countries)
► Differentiation of the offering in a competitive environment
► In France, all mobile operators launched a digital sub-brand to prevent the arrival of ano-frills player.
► An innovative MNO in the UK has successfully launched a digital MVNO.
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Telco operators need to consider six key success factors in order to succeed in the digital landscape
► Network effects and scale are key to success in the digital ecosystem.
► Operators promising new initiatives need to scale, and rapidly.
► Operators need the flexibility to quickly exit unsuccessful ventures and redeploy resources to promising growth areas.
► Building partnerships through collaboration and innovation is key for digital success.
► Operators need to be open and establish partnerships with other operators, established internet players and new entrants.
► No single strategy will be suitable for every operator, as the digital landscape is extremely diverse.
► Successful strategies will vary according to the following:
► Differences in local conditions
► Strategic appetite for digital transformation
► The right skills and assets are required to compete effectively in the digital ecosystem.
► M&As will become an important driver for digital transformation.
► Venture Capital funds andinnovation hubs are also routes to acquire new skills and assets.
► More flexible business models are required to compete effectively in the digital ecosystem.
► Operators should invest in platform-based business models that bring:
► Higher customer engagement
► Growing range of services to be monetized
► Operators should focus on growth levers with the best probability for success:
► OTT
► IoT and M2M
► Big data and advertising
► ICT and cloud-based servicesUnderstand there’s no single winning strategy
Focus on key growth areas
Build or invest for the right skills and assets
Scale rapidly
Realize new business models are key
Develop partnerships
Key success factors
Sources: GSMA; EY analysis
33 Telcos’ digital best practices and use cases
33 Use Case #1: becoming a digital life provider and capturing adjacent business opportunities
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A number of operators across the world are already developing strategies to conquer their space in the rapidly evolving digital ecosystem
Leading MNO in US
► The leading MNO in the US has positioned itself as an innovator in the digital-first mobile, defining a strategy based on three main pillars:► Leading in terms of network
connectivity► Developing new platforms around
digital media and IoT► Developing new services/
applications on these new platforms
► The mobile operator strategy has a clear focus on developing new business models on global digital platforms.
Leading MNO in Spain
► The leading MNO in Spain wants to become a key player in the digital universe, identifying talent and entrepreneurship as key components.
► In order to become a referent digital telecom provider, this mobile operator has set three areas to focus its efforts:► Product development and
innovation► Partnership and venture capital
(innovation investment)► New digital services (M2M,
e-health, financial servicesor cloud)
Leading MNO in China
► The leading MNO in China has identified four emerging areas to focus its efforts:► Smart family► Mobile payment► Internet of Things (IoT)► Cloud computing
and big data
► Growth in these areas sits alongside the goals of strengthening the existing two core business areas: 4G and fiber broadband
Sources: GSMA; company data; EY analysis
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► MNO exceptions with >5% of digital revenues in Asia
► Other telecom players in mature markets <5% of digital revenues
The majority of telecom industry players register less than 5% in digital revenues
Telecom’s digital revenues as % of total revenues (in 2016)
15.0%
11.5%
8.5%
5.0%
3.5%2.5% 2.0% 1.8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Leading MNOJapan
Challenger MNOJapan
Leading MNOSouth Korea
Leading MNOSpain
Leading MNOGermany
Leading MNOFrance
Leading MNOSingapore
Leading MNONigeria
MNO — Mobile Network OperatorNote: Digital services include OTT, big data, APIs, FinTech, IoT/M2M, mobile advertising, cloud services and others. Digital revenues don’t include data revenues.Sources: GSMA; companies’ annual reports 2016, EY analysis
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To capture new revenues, telcos can leverage capabilities and assets to position themselves as vertical players, offering services beyond connectivity
► Camera► Car► Domestic
appliance► Electricity meter
► Network► Connectivity► Availability► Quality
► Platform and solution buildup
► Back-end configuration
► Capabilities enablement
► Interface development
► Packaging/bundling
► Service provisioning
► CRM and analytics► Business customer
sales to end user
Smart chip/module
Smart device/machine
Network connectivity
Service enablement
SI/application/solution
Core businessactivity
MNO possible expansion
MNO core business
Possible partnerships to provide end-to-end service
MNO possible expansion
5%–10% 10%–15% 10%–15% 30%–40% 20%–25%Share of
total value by 2020
Example in the IoT industry
Opportunities for telcos to seize business from applications
Sources: EY analysis; GSMA; Ericsson; Alcatel Lucent; ADL
► SIM card► Sensor► Actor► Aggregator► Transponder
33 Use Case #2: reinventing the customer experience and simplifying the commercial model
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Customer experience improvement is considered a top priority by telcos, and digital is a key facilitator
82%
50%
35% 32% 29% 29%18% 15%
6%
0%
20%
40%
60%
80%
100%
Cus
tom
erex
perie
nce
Cos
t con
trol
Net
wor
k
Org
aniz
atio
n
IT s
yste
ms
New
serv
ices
HR
and
tale
nt
M&A
Oth
er
Source: 2015 Global telecommunications study: navigating the road to 2020, EY, 2015
Improved service levels and personalization can unlock new customer experiences
Customer experience management dominates the strategic agenda
Q: What are your organization’s most important strategic priorities over the next three years? (Top three responses)
Q: What are your organization’s most important initiatives to improve customer centricity? (Top three responses)
69% 69%
53%
31% 31% 28%
9%
0%
20%
40%
60%
80%
100%
Impr
ove
cust
omer
serv
ice
Cre
ate
mor
epe
rson
alis
edcu
stom
erex
perie
nce
Impr
ove
netw
ork
qual
ity
Prov
ide
wid
era
nge
of s
ervi
ces
Prov
ide
flexi
ble
pric
ing
optio
ns
Strik
e pa
rtner
ship
sw
ith o
ther
indu
stry
play
ers
Oth
ers
► Customer experience management is emphatically the top priority for operators (68% citing it as first priority; 82% as top three).
► The drive to focus on customers’ experience dictates other priorities: agility, efficiency and network quality.
► New service development ranks fifth as a top three priority, but second as first priority, underlining how some operators are highly focused on capturing digital growth opportunities.
► Digital native consumers (who have never lived without digital) have high expectations of service providers; when convenienceand quality fail to live up to expectations, these customers are quick to switch providers.
► This is well-recognized by service providers that set customer centricity, customer support, personalized services andnetwork quality as the most important levers at their disposal.
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Customer 2.0 is forcing ecosystem players to provide digital interfaces and consistency of digital experiences across channels
Customer interface evolution: from customer 1.0 to 2.0 experience
► Word of mouth► Traditional media
► Call center► Traditional marketing► Traditional sales
► Voice► Data► Value-Added Services
Customer 1.0
► E-wallets► Video on demand► Music on demand
► Social media► Online communities► Chat
► E-care► Digital marketing► Online sales
Customer 2.0
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In their digital transformation path, telcos have started reinventing the customer experience through digital-driven omnichannels
Aiming for 50% digitization of interactions with its customers by 2018 (vs. just over 30% today)
► The company is offering a low-cost and no-frills service range under its youth-oriented brand, available only online (sales and care).
► Several partnerships to develop a set of self-service apps to encourage digital interaction with its customers (part of omnichannel strategy).
Leading mobile operator in France
Digitizing interactions with its customers, simplifying servicing mechanisms and optimizing costs
► Encourage customer self-care generates ~4%–5% cost reduction per year
► Increase online sales to reduce the number of stores contributes to ~8%–10% cost reduction
► Portfolio simplification reduces marketing expenses by ~5%
► Customer satisfaction increased after these changes
Mobile operator in the Middle East
Increasing its exposure in digital, including development of digital customer experience (digital billing, e-sales and e-servicing)
► The company is targeting various levers of revenue and cost optimization through digital and commits on the following KPIs in its strategy:► Increase e-sales from 10% in
2014 to 18% in 2018
► Decrease servicing costs by 16% in 2018 to focus on self-service portal
Leading mobile operator in Germany
Sources: GSMA; company data; EY analysis
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Putting in place the key enablers to:► Baseline the current customer experience
► Size the value impact and prioritize improvement initiatives with delivery organizations
Journey mapping
CEX analytics platform
CEX value models
Personas
Measurement system
Structure
Incentives Leadership
3
7 8
1 2
5
4
6
A digital-driven omnichannel strategy has a proven impact on customer satisfaction — telcos should develop in-house capabilities to make it work
NPS vs. use of digital channels for sales and service*
Build capabilitiesOptimize performance goals with digital
Digital has a positive impact on customer satisfaction:► The correlation between NPS satisfaction scores and
number of customer digital interactions has been statistically proven in several studies done for different telcos in Europe.
Note: NPS means Net Promoter Score, CEX means Customer Experience
33 Use Case #3: leveraging analytics to improve performance and better address customers
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Telcos best practices: leveraging analytics to boost business performance
Customer analytics:In-house capability of expandable data collection and treatment:► Audience TV data► Customer data► Online behavior
EY Customer Analytics platform allows the leveraging of data and achieving the following performance uplifts:
► Segment customer groups and push product upgrades and cross-selling initiatives
► Increase customer retention and optimize the cost-side of operations (i.e., customer care)
► Measure the correlation between customer satisfaction and customer value
Global telco and cable company
Data monetization:Actor is now focusing on the following offers to monetize and commercialize its data:► Third-party data► Targeted advertising► Consumer measurement
The company monetizes its data to target advertising on linear TV, VOD (on-demand, replay and catch-up) and second screens and to create more granular ad segments:
► Additional revenues up to €50 million in five years
► High margin expected, main costs being data processing IT, internal team and external contractors
► A few million CAPEX investment for the big data infrastructure
Pan-European telco
Big data transformation:Aiming to get additional value from analytics:► Identify new use cases and
revenue streams ► Design the operating model► Prioritize investments
Client would an outline on how to generate additional value from big data and analytics across the firm, quantifying expected benefits and emerging costs, with a clear road map.
The objective is to define the long-term big data transformation enablers while implementing early value quick wins
European pay TV provider
Sources: GSMA; company data; EY analysis
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The EY Customer Analytics platform develops advanced models and visualization tools for customer life cycle management
Description Value for operators
► Build the company customer segmentation
► Provide to operators the customer profiling model framework and blueprint to implement the tool for own purposes
► Monitor business performanceby segment
► Optimize targeting actions per customer profile
► Manage customer base initiatives
► Develop one model to calculateand to monitor in real time the customer lifetime value (CLV) per individual customer
► Derive lifetime value for each individual customer
► Optimize the cost to serve allocation per customer segment
► Track CLV and take actions
► Develop one customer experience (CEX) value driver model to:► Understand the correlation between
customer satisfaction and customer life time value
► Identify the CEX root causes and value drivers per customer profile
► Understand the CEX drivers that impact CLV
► Prioritize the CEX initiativesthat have the most impact on value
► Build business cases for customer experience initiatives
A toolset that works across three data dimensions
Unified platform to support the creation of valuable business insights
A Customer profiling model
Profiles
Static 3P customers / 3P “couch potatoes”
1P customers ready for migration
Legacy 1P CATV customers
Medium Value 3P customers
New customers
Opportunistic and always on the move customers
At risk customers
High Value 3P customers
Mobile-Only customers
4P Customers (Bundle + Mobile)
% Base
39%
9%
14%
13%
3%
3%
2%
14%
1%
0,4%
Description
3P customers with ARPU very similar to Products list prices
Customers that joined as 1P, are active but never migrated to other bundle
Old customers that joined the company before the year 2000
3P customers with ARPU above their 3P counterparts
Customers that joined the company with the 6 most recent months
Young customers, always looking for better options / prices
Customers that are close to the end of their engagement period (around 12m)
3P customers with ARPU well above than their 3P counterparts
Customers with oUKy Mobile option
Customers that add Mobile option to their Bundle
8
2
1
7
5
3
4
6
10
9
Bundle
3P. DTV
1P. CATV
1P. CATV
3P. DTV
3P. DTV
2P. DTV-BB
3P. DTV
3P. DTV
Mobile
3P. DTV + Mobile
ARPU
€55,8
€25,0
€17,0
€74,4
€40,8
€58,8
€54,4
€95,7
€23,0
€78,1
Tenure
13 year
11 years
20 years
14 year
<1 year
5 years
1 year
14 year
<1 year
15 year
Customer lifetime value modelB
Customer experience model
C
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Customer Analytics platform stands as a powerful tool, unifying customer profiling, CLV and customer experience analytics into one model
Advanced customer analytics and business intelligence modules
CLVAutomatic CLV calculation next to each customer and by profile (ARPU, margin, churn, cost to serve)
Value from CEX► Multiple customer satisfaction
analyses (NPS-CLV correlation, super detractors focus, CEX deep dives)
Customer profiling/personasSocio-demo, product, value and usage-driven segmentation —based on statistical approach
Churn prediction► Possible to establish churn
and root cause analysis► Churn prevention analytics
campaigns
– Customer analytics platform data set –
Socio-demo
Product, offers and
CPEs Revenues
Customer movements
Channels and interactionsUsage
NPS Cost-to-serve Digital
12 months revolving history
~200 data points per customer (up to 350)
~12m customers profiled
Data available at customer ID level
Country 1 Country 2 Country 3 Country 4 Country 5
~2.5b data pointsAutomatic monthly update of customer profiling and CLV
Page 29
Telcos can leverage analytics to improve performance and efficiency of both their front-end and back-end activities
Identify new revenue streams
Maximize revenue
Growth Optimization Protection
Improve productivity and efficiency
Improve customer experience and loyalty
Regulatory compliance
Optimize support functions and processes
Commercial
► Improve analytical model supporting lead generation, acquisition, up-selling and cross-selling
► Real time reaction to customer triggers and event
► Content recommendation supporting up/cross sell and acquisition
Customer Service (CC and FS)► Call and contact prediction on
specific events (e.g., social media analysis and speech analytics)
► Call and on field visit avoidance through proactive management
Strategy and business development► Monitoring competitor
behavior using web scraping and bots to gather intelligence and develop tactics
► Brand image analysis► Subs evolution forecast and
simulation
Human resources
► Optimize hiring process► Measure employee
performance► Predict employee attrition
Programming
► Optimizing the programming to increase viewership based on customer behavior data and analyzing the customer and product mix
Advertising
► Introduce targeted advertising revenue stream
► Introduce interactive and targeted advertising in real time
Supply chain and fulfillment► Optimize distribution through
real-time event triggering► Reduce inventory leakage
thru IoT
Technology
► Predictive STB maintenance and life cycle through IoT
► Predict systems, network and signal outages
► Increase cybersecurity through predictive modeling and simulation
Page 30
From similar projects in telco space, EY experienced firsthand the tangible benefits of a robust customer analytics practice
Area Customer analytics-related activity ImpactRevenues New business Data monetization Sell off anonymized customer data +100%–200% revenues
Targeted advertising Target ads based on customer profile +100%–200% revenues
Marketing and sales
Churn Reduce churn by identifying key groups of customers at risk
-10%–20% churn
Customer profiling Increase revenue through personalized offers +1%–3% ARPU
Social Use client feedback to optimize product portfolio and service
-5%–10% churn
Audience and content Analyze viewership for commercial decisions -5%–10% content spend
Billing and collection Reduce fraud and false invoices +1%–2% revenues
Pricing Optimize pricing decisions +1%–3% ARPU
Campaign management Improve campaign efficiency and effectiveness +40%–80% conversion
OPEX Customer operations
Contact center Use call elimination and quality improvement -5%–10% calls
Fulfillment Reduce faults, fallout and cancellations -5%–10% fulfillment costs
Omnichannel Lower cost to serve by improving channel mix and service
-5%–10% cost to serve
Supply chain Reduce truck rolls by better understanding the customers’ reasons
-5%–10% supply chain costs
Corporate Procurement Use client feedback to optimize the spending on CPEs/handsets
-2%–5% spend reduction
HR Increase the learning effectiveness and reduce turnover (call center)
-10%–50% learning costs
Network Network maintenance Predict outages using customer network data -5%–10% maintenance
Illustrative — not exhaustive
Impact of customer analytics-related activities on telecom operators’ performance
44 EY offerings for telcos’ digital transformation
Page 32
EY has established five distinct digital offerings reflecting the holistic set of challenges that digital creates for our clients
Digital enterprise strategy
Incubation and innovation
Experience transformation
Digital operations
Digital trust
We help our clients rethink their business strategy and operating model for a digital age.
We establish an end-to-end innovation capability to incubate new ideas and business models.
We analyze the world of the customer, then design and implement new experiences.
We align, optimize and automate operations and supply chain to deliver on the promise of digital.
We scan the digital risk horizon and help our clients build agility to respond to digital risks.
Page 33
EY possesses a dedicated multidisciplinary team to accompany telcos in their digital transformation
EY has a cross-functional team dedicated to digital transformation
EY digital assistance to reinvent businesses in a digital world
Digital strategy consultants
Data scientists
IT professionals Cybersecurity professionals
Service designers
Change management professionals
Internal multidisciplinary teams dedicated to digital, these are supplemented by functional and sectorial subject matter professionals
A broad range of offers to accompany digital transformations
“Advanced analytics” solutions to inform and simplify the processes of making key decisions
A “digital factory” approach that favors rapid development and appropriation of innovation
A “digital lab” that offers organizations digital transformation support in a joint development spirit
A global and multi-sectorial approach to digital transformation of organizations
Strategy MarketingClient
relation-ships
Financeand
internalaudit
HR
Supplychainand
purchases
ITsystems
Functional professionals
Page 34
EYs digital offers serve telcos transformation
Digital growth and innovation for Telcos
Telcos’ customer experience transformation
Telcos’ operationsdigitalization
1 2 3
Digital growth strategy
Digital innovation anddigital factory
Digital due diligence
Customer experiencedigitalization
Digital-driven omnichannel
Digital Supply Chain
Digital HR
Digital finance
IT digitalization Data governance IT security
Page 35
We work to help deliver digital solutions to your needs, combining our technical, scientific and functional experience
Spend cube 2.0 Social media Audit explorer/satellite
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Purchase To Pay Process Map
CategoryTout Tout
Tout Tout
Non Inter-CompanyInter-Company $182M
$268M
Category
FB01 - Post DocumentFB60 - Enter Incoming InvoicesFBVB - Post Parked DocumentFV60 - Park Incoming Invoices
FBR2 - Post DocumentFBS1 - Enter Accrual/Deferral Doc. $1M
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$132M
$299M
Transaction Code
201201 201202 201203 201204 201205 201206 201207 201208
$20M$40M$60M$80M
Trend
0000031210 - National Vendors0000031300 - Inter-Company Paya..0000031310 - Inter-Group Payables0000031220 - International Vendors
0000031290 - Employee Ledger0000031227 - Vendors With Debit .. $1M
$2M
$3M
$3M
$177M
$261M
Account
9900033592 - XYZ Equipment Poo..0000152477 - Chase NYC
0000123349 - BANK MENDES GA..9900033027 - ABC Enterprise Ltd .. $45M
$45M
$47M
$55M
Vendor
RODRIGES - AnonymousVERCAUC - AnonymousWHEELES - Anonymous
BASWARE1 - AnonymousBARNARI - Anonymous
WF-BATCH - Anonymous $11M
$31M
$36M
$51M
$89M
$197M
User
31 - Invoice $449M
Posting Key
US10 - XYZ USAGB10 - XYZ UK LTD
ES10 - XYZ España SAPL10 - XYZ Polska Sp. zo.o. $12M
$98M
$112M
$200M
Company
CompanyTout Tout $0M $1,348M
Amount
KR - Vendor invoiceP3 - IC PAL Vend InvoiceZ4 - IR - Auto Depot Exp
KZ - Vendor paymentZA - Employees Reclasific
$269M
$171M
$6M
$1M
$1M
Document Type
31_4031_40_5031_40_60
31_7122_31 $0M
$0M
$51M
$169M
$229M
Posting Key Scheme
EuropeAmericaOceania
Asia $4M
$12M
$211M
$222M
Company Group
Company GroupTout
Cyber intelligence
Analyze FEC Resource optimization Supply chain analytics
2. STOCK OVERVIEW
€5.8M
Shipments (1)X Y Z
A
B
C
O
(cov)
€0.0M (ship)
€0.0M (stk)
431 (cov)
€0.1M (ship)
€0.7M (stk)
204 (cov)
€0.1M (ship)
€0.3M (stk)
146 (cov)
€0.1M (ship)
€0.2M (stk)
213 (cov)
€0.3M (ship)
€0.9M (stk)
176 (cov)
€0.2M (ship)
€0.6M (stk)
113 (cov)
€0.2M (ship)
€0.5M (stk)
70 (cov)
€0.6M (ship)
€0.7M (stk)
148 (cov)
€1.8M (ship)
€3.2M (stk)
55 (cov)
€2.5M (ship)
€4.2M (stk)
Sales / Predictability per Segment - CN
931items
# Live EAN (1)
€11.4M
Stock Value (1)
€25.2M
Shipments (2)
€72.7M
Stock Value (2)
3,813items
# Live EAN (2)
X Y Z
A
B
C
O
(cov)
€0.0M (ship)
€0.0M (stk)
369 (cov)
€0.6M (ship)
€5.3M (stk)
188 (cov)
€0.3M (ship)
€1.9M (stk)
123 (cov)
€0.3M (ship)
€1.4M (stk)
238 (cov)
€1.8M (ship)
€8.4M (stk)
160 (cov)
€1.0M (ship)
€3.4M (stk)
90 (cov)
€1.2M (ship)
€3.1M (stk)
181 (cov)
€4.6M (ship)
€15.5M (stk)
108 (cov)
€6.3M (ship)
€14.9M (stk)
60 (cov)
€9.1M (ship)
€18.8M (stk)
Sales / Predictability per Segment - (All affiliates)
MONTH FILTERFebruary 2016
Tout
Tout
CN
(All affiliates)
COVERAGE55
200
300
431
Sales / PredictabilityA/X
A/Y
A/Z
B/X
B/Y
B/Z
C/X
C/Y
C/Z
CBCR data visualization
Weather-sensitive sales Process mining HR cockpit 360° Sales force sectorization
Page 36
EY Advisory has relevant references of telcos digital transformation
Operator type EY support/added valueProject name
Tier 1European telecom
operator
► EY supported the end-to-end digital transformation for the customer experience transformation project, working mainly on:► Identification of the key customer pain points/definition of the customer journey
► Definition and implementation of Customer Experience improvement initiatives
► Run of digital sprints, from “the customer stories” to the “minimum viable product” with a three-month cycle to assist in implementation
Customer-led digital transformation
Global leading operator (Europe,
MENA, APAC)
► End-to-end asset management solution: real time asset tracking, supports redeployment of assets and consequent capex avoidance, Enables supply chain analytics
► Improved monitoring and informed decision making for end to end lifecycle tracking of assets, improved utilization / deployment of existing unused assets
► Use of mobile app to ease field operations and enable real time asset tracking
Digital Asset Management
Tier 1European telecom
operator
► Benchmark of multichannel disruptive initiatives► Assessment of multichannel maturity and performance of six operations
in Europe► Definition of the multichannel blueprint and vision► Detailed specification of 12 concrete multichannel use cases, including
organization, IT and processes impact
Digital-driven omnichannel strategy
and blueprint
MNO in MENA
► Digital maturity assessment vs. best in class► Definition of the three-year digital strategy and road map► Implementation of quick wins: new website launched, mobile app► Specifications of key digital projects: E-care, social CRM
Digital transformation execution
Page 37
EY Advisory has relevant references of telcos digital transformation (continued)
Operator type EY support/added valueProject name
Tier 1 operator in Europe and MENA
► Conducting a Pan-European Digital MVNO feasibility study in four European markets
► Building a disruptive customer value proposition (price, all-inclusive, digital, customer experience)
► Defining a lean organization model and digital-oriented processes
Pan-European Digital MVNO strategy and
feasibility study
Tier 1operator in
New Zealand
► EY and the client worked together to shift the customer service paradigm through digitization in face of declining market dominance.
► This included the following:► Transformation of governance of digital channels► Key risks and controls to manage digital interfaces► Streamlining of social media channels
Shifting the customer service paradigm
Greenfield telecomsoperator in India
► EY supported the client in deploying a large-scale digitization project revolutionizing telecoms in the country.
► Through the EY Go-To-Market strategy and digital operating model for customer operations, the client benefited from the following:► Significant lead time reduction for activation► Paperless activation — a first in India► Customer experience as a differentiator using digital approach► Designed digital concepts
Go-To-Market strategy and digital operating
model design
Tier 1operator in Australia
► EY assisted the client in achieving significant productivity improvements and improved customer services to gain a competitive advantage in the market.
► The process redesign allowed productivity improvements; reductions in costs; and reduction in transaction times, variance and rework, resulting in annualized benefits of approximately US$650m.
Productivity and customer services
transformation program
Page 38
More than 5,000 EY collaborators work on digital-related topics
Customer experience Innovation and incubation
Analyze the company environment to design and implement new
journeys and solutions
Put into place innovation structures to incubate and test new ideas and
business models
Digital strategy
Develop digital strategies aligned with long-term vision and integrated
within the company strategy
1,000 250 950
Digital securityDigital operations and
organization
Understand and manage digital risks, especially fraud and
cyber attacks
Transform and automate operations, and align the organization to
facilitate digitalization and reduce operational costs
Technology and data
Develop and construct the technology underlying digitalization, particularly use and analysis of data
400 1,100 1,600
# of EY collaborators
Page 39
EY digital telecom community
Network convergent
technology and infrastructure
Products and services
Customer interface
operations
Partner and ecosystem
Devices
Fulfilment assuranceand billing
Talent and culture
Enterprise technology
Regulatory
Prashant Singhal, Partner, EY Global Telecoms Leader
Industry subject matter professional, leading transformations for operations and selection, pricing, distribution and launch strategy
Amit Sachdeva, Partner, EY Global Telecoms Advisory Lead
Industry advisor, leading transformations for operations and selection, pricing, distribution and launch strategy
Laurence Buchanan, Partner, EY Digital Advisory Leader
EMEIA Lead digital partner, specializing in digital transformation, customer experience and CRM; has led digital transformation initiatives for clients including TMT, retail, GPS, auto and pharma
Vincent Douin, Partner, TMT Industry, EMEIA
Fifteen years of experience in telecoms, with capabilities/experience in emerging markets, marketing and sales strategy and go-to-market
Patrick James, Partner, UK
Digital strategy transformation specialist, projects across the customer life cycle (CRM and e-commerce platforms implementations) in airlines, telco, banking, insurance, government, automotive and consumer products industries
Pierre Beaufils, Partner, USA
Marketing strategy expert in the TMT industry with 15 years of consulting experience
Bart Van Droogenbroek, Global Telecoms Tax Leader, Luxembourg
Supply chain management as well as financing, holding and intellectual property structures through Luxembourg intermediate entities
Joanna Truffaut, Director, UAE
Has led major engagements in digital transformation, digital business, operating and technology models, digital ventures investments, cybersecurity and innovation
Praveen Shankar, Partner, UK
Leads the UK and Ireland supply chain team in the telecoms, media and technology industry sector
Adrian Baschnonga, Associate Director, UK
Lead analyst at Global telecoms center, responsible for EY’s thought leadership output
Joongshik Wang, Partner, Singapore
Capabilities/experience in commercial due diligence,turnaround strategy, digital business and strategic marketing in telecoms and media industry, payment and retail industry
GK Anand, Director, India
Customer experience and service strategy design, business-wide cost reduction, IT strategy and transformation
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