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• Wake everyone up!
• The Own-Lease-Rent-Subscribe Continuum
• Understanding the Subscription & Sharing
• Why Telcos are Best Positioned to be Significant
• Key Challenges
• Take Outs
• The “great Australian dream” – owning a home
• The traditional/historical way to access an asset
• Finance often plays an important role
• Gives the lessor almost all of the benefits of
ownership but without tying up capital
• Finance is an essential part
• Sometimes indistinguishable from owning with
finance (e.g. car lease vs hire-purchase)
• An agreement where a payment is made
for the temporary use of a good, service
or property owned by another
• Further down the continuum from leasing
• Getting access to a resource, or regular
supply of a product on a regular basis
• A new way of looking at how people ‘buy’ ‘things’.
• Utility trumps ownership.
• Shift in consumers spending habits.
• Goods are repackaged as services.
• It can be anything: cloud-based software & services,
media/content, groceries, consumables.
• Just another XaaS?
• Infrastructure is expensive and ties up capital.
• Companies want to shift fixed costs to variable
• Consumers want capital to be used for assets,
not liabilities (cf. Rich Dad, Poor Dad)
• Ownership shifts up the supply chain and is
replaced with subscription.
• For a telco, does this sound familiar?
• Tradition Business Model:
• Value of the sale is the value of items sold.
• Each sale is a one-off transaction
• Customer is only your customer for one single
• Customers might be anonymous, so CRM is a
• Loyalty is a bolt-on system
• Subscription Economy Business Model:
• Value of the sale is the ‘Customer Lifetime
• A sale results in multiple transactions and a
revenue stream over time
• Customers cannot be anonymous
• You can/must communicate with them
• Loyalty is a key part of the business model
• Revenue = Customers x ARPU
• Customers (month N)
= Customers (N – 1)
+ New Customers
• Key metrics of performance are customer
acquisition cost, acquisition rate, cost to serve,
• Instead of repeat purchase, you subscribe
once and continue until you cancel.
• Inertia works for the vendor rather than
• Dramatic impact on the marketing process –
consider Dollar Shave
What motivates customers to participate:
• Value – cheaper access to a resource
• Sharing – better use of resources
• Trust – will you be there next month?
• Simplifying the purchase decision/cycle
• Tapping into the power of communities
• The original sellers of subscription services
• Experience in pricing services, cross-
• Already have billing relationships with
• Telco ‘hard’ services converging to cloud
services, e.g. Virtual PBX
• Billing – much more complex with multiple
products and bundles
• Pricing – understanding margins, true cost,
value of marginal increase in ARPU
• Selling & supporting multiple products
• Mixed regulatory environment
• TCP Code impact
• Lack of control of the supply chain
• The ‘Subscription Economy’ is here
• It has been here for a long time, just known
by other names
• Telcos are in the best position to take
advantage of it
• Position now for the next (NBN?) wave
• Billing Bureau have been doing this for
nearly 20 years; started in telco and now
expanded to subscription and services.
• We live and breathe it.
• Experts in convergent billing and automation
and scalability of billing & related processes.
• Cloud billing will only become more
complex; we have already done it all.
• Any questions?? All clear as mud?
• For more information, contact
• Lesley Kelly; Sales and Marketing
03 8611 1111; firstname.lastname@example.org
• David Werdiger; Chairman
0412 389 389; email@example.com