Your SlideShare is downloading. ×
0
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Sms Marketing Execution Plan 220502  Short Version V2
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Sms Marketing Execution Plan 220502 Short Version V2

1,237

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,237
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
34
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. SMS Marketing Execution Plan Discussion Document May 23rd, 2002
  • 2. Agenda The Opportunity Relevance to Alltel Implementation Plan
  • 3. The Opportunity SMS is a Global Phenomenon SMS has had explosive growth over the past 2 years in all continents … Global SMS Message Traffic Source: GSM World, EMC, Merrill Lynch, Mobile Streams DCI. Billions per Month CAGR:214% Message Traffic by Region Source: Merrill Lynch.
  • 4. The Opportunity Revenue Contribution … and has become an important revenue source to operators all around the world. Sources: Baskerville, Company releases, DCI analysis. By Country Sources: Merrill Lynch, DCI analysis. Selected Carriers 53% 56% 72% NA 31% SMS Penetration
  • 5. The Opportunity Key Success Factors Abroad Overseas experience indicate that key milestones need to be achieved to create an environment that fosters SMS adoption. Selected SMS Market Ramp-up Source: EMC, Merrill Lynch. Million Messages per Month Interoperability Prepaid SMS Portugal UK Germany
    • Interoperability agreements implemented across all of Europe enabling SMS messaging across all GSM networks in Europe
    • Pricing schemes to reduce barriers to entry
      • Pay per message sent (zero charge to receive)
      • Calling Party Pays
      • Pre-paid SMS offers
    • 100% of handset base is 2-way SMS enabled
    • Benefits of SMS proactively communicated
    • SMS focused promotions
    Key Success Factors
  • 6. The Opportunity Barriers to SMS Adoption in US are Coming Down
    • Recent third party inter-carrier agreements in the US will enable ~75% of US subscribers to send and receive text messages across different networks by July 2002.
    • Major US carriers offer “pay-per-message plans” and AT&T has introduced “calling party pays” for text messaging setting a trend for the future.
    • SMS enabled handsets in the US are expected to reach 99% of base by 2004 up from 57% last year.
    • Using conservative estimates based on international benchmarks and the recent moves by US carriers we expect SMS revenues to total $2.6B by 2004, equivalent to 2.8% of total industry revenues.
    Barriers to SMS adoption in the US are crumbling fast and the market is set to take off.
  • 7. The Opportunity Interoperability Will Reach 75% of US Subscribers by July Date Total Subs (*) Vendor
    • Interoperability is going to drive SMS traffic & revenue growth
    • In December 2001 one month after interoperability was launched 30% of AT&T’s SMS traffic was inter-carrier
    • AT&T’s inter-carrier volume increased 65% from December 2001 to January 2002
    • InphoMatch, reports that it processes over 1M messages a day
    Comments Recent third party inter-carrier agreements in the US will enable ~75% of US subscribers to send and receive text messages across different networks by July 2002. Interoperability AT&T Wireless Nov 01 17.2M InphoMatch Century Tel Mar 02 0.7M InphoMatch Cincinnati Bell N/A 0.5M InphoMatch Cingular Mar 02 21.3M MobileSpring PrimeCo Mar 02 NA NA Sprint PCS Apr 02 12.7M MobileSpring Verizon Wireless Apr 02 28.7M InphoMatch VoiceStream Jan 02 6.3M InphoMatch (*) 3Q01. Nextel Jul 02 8.2M Wireless Services Corp.
  • 8. The Opportunity Pricing Plans Send Plan 1 Plan 2 Plan 3 Major US carriers offer “pay-per-message plans” and AT&T has introduced “calling party pays” for text messaging setting a trend for the future.
    • 10 ¢
    • 100 messages for $4.99/month
    • N/A
    • N/A
    • 10 ¢
    • 100 messages for $2.99/month (sent and received)
    • 250 messages for 5.99/month (sent and received)
    • 500 messages for $9.99/month(sent and received)
    • 10 ¢ (post)
    • 5 ¢ (pre)
    • 100 messages for $2.99/month
    • N/A
    • 600 messages for $7.99/month
    • 5 ¢
    • 50 messages (included in the National & Regional plans)
    • 500 messages (Included in Talk & Text Plan)
    • 500 messages for $2.99/month (Ping Pong Add-on Plan)
    • Not offered
    • Unlimited usage for $5/month
    • N/A
    • N/A
    Receive Bucket Plans
    • Free
    • 10 ¢
    • 2 ¢ (post)
    • 5 ¢ (pre)
    • N/A
    • 5 ¢
    Pay-per-message
  • 9. The Opportunity SMS Enabled handset Forecast Text Friendly Handset Form Factor Examples SMS enabled handsets in the US are expected to reach 99% of base by 2004. US SMS Enabled Handsets Sources: Yankee Group, Morgan Stanley, DCI analysis. SMS Handsets (M) 54.4 72.5 117.2 197.2 Handsets (Millions) SMS Handset Penetration
  • 10. The Opportunity US SMS Penetration and Revenue Forecast Using conservative estimates based on international benchmarks and the recent moves by US carriers we expect SMS revenues to total $2.6B by 2004, equivalent to 2.8% of total industry revenues.
    • General:
    • Mobile penetration in US reaches 68% in 2004, yielding 199M subscribers
    • Average monthly bill remain around $45.5 in the forecast horizon
    • SMS Specific:
    • Usage rises from 15 messages per user per month in 2002 to 40 in 2004
    • Average price per message falls from $0.17 to $0.9 per message
    • SMS penetration of user base rises from current 3% to 30% in 2004
    • Benchmarks:
    • European mobile penetration: 71%
    • SMS penetration: >50%
    • Messages per user per month: ~50
    CAGR 01-04 Source: Yankee Group, Merrill Lynch, Morgan Stanley, DiamondCluster Analysis. Assumptions US Subscriber and SMS Penetration Forecast 135% 16% Rest of Subscribers % SMS Penetration SMS Revenues Industry Revenues 127M 158M 180M 199M % of Total $58B $71B $82B $90B $0.2B $0.5B $1.1B $2.6B 0.2% 0.7% 1.3% 2.8%
  • 11. Agenda The Opportunity Relevance to Alltel A Winning Strategy
  • 12. Relevance to Alltel Opportunity for Alltel
    • A well executed SMS strategy can result in approximately $88 M in revenues for Alltel by 2005.
    • The SMS business opportunity requires a $6-10M outlay and has an expected NPV in excess of $120M.
    • SMS services has an estimated EBITDA margin of >80% and under the current scenario can contribute up to $340 M over 5 years.
    • In addition to short-term return, an effective SMS product would prepare ALLTEL and its subscriber base for future data offerings and increase long-term adoption of wireless data.
    SMS offers Alltel a cheap path to developing a portfolio of data services ahead of any major commitment to 3G.
  • 13. Relevance to Alltel Revenue Impact Revenue Forecast A well-executed SMS strategy can result in approximately $138 M in revenues for Alltel in year 5. Users Usage Pricing Additional Assumptions (*) EOP. Key Revenue Drivers Sources: Yankee Group, MSDW, DCI analysis.
    • Messaging user base grows from 3% of network subscribers to 47% in year 5
    • Messaging usage climbs from 15 messages per messaging user per month to 60 in year 5
    • Average price per message falls from $0.27 in the first year to today to $0.08 in year 5
    • Interoperability introduced by end of year 1
    • Pay-per-message billing product introduced by end of year 1
    ILLUSTRATIVE Revenues ($M) Messaging revenues (M) Messaging penetration (% of base) 1.4 M 2.3 M 30 40 $0.15 $0.11 7.6M 7.9M Users (*) Msg/User (*) Revenue/ Message (*) Subscribers (*) 0.2 M 15 $0.27 7.3M 2.8 M 40 $0.10 8.1M 2.9 M 40 $0.10 8.2M
  • 14. Relevance to Alltel Payback The SMS business opportunity requires a $6-10M investment with an expected NPV of over $120M. Financial Analysis ($ M)
    • Investment Requirement: $6-10 M including SMSC purchase, marketing and implementation
    • EBITDA margin: more than double typical voice margins (36%)
    • NPV >120 M (incl. Terminal Value)
    • Near-immediate break-even and pay back in just 16months
    Comments Year Capex EBITDA Evolution Year 70 % EBITDA margin 79 % 86 % 86 % 86 % 0.10 SMS ARPU 0.40 1.00 1.30 1.40 Source: DiamondCluster Analysis. ILLUSTRATIVE
  • 15. Relevance to Alltel Preparing for the Future: SMS as a Lead into Mobile Data In addition to short-term return, an effective SMS product would prepare ALLTEL and its subscriber base for future data offerings and increase long-term adoption of wireless data.
    • Uncover data-using segments and understand how different segments respond to offers, pricing plans, communications, and promotions
    • Not applicable
    Customer Segments
    • Learn which offer types are most appealing
    • Understand how customers use data
    • Increase customer familiarity with integrated data and voice plans
    Offer Design
    • Test different pricing schemes (buckets, bundles, per kilobyte/megabyte)
    • Realize how customers prefer to be charged for data
    • Get subscribers used to data pricing models (buckets, bundles, per kilobyte/megabyte)
    Pricing
    • Introduce wireless data to sales staff and distribution channels
    • Test data-specific messages, mediums and promotions
    • Teach customers data capabilities
    • Reduce subscribers’ psychological barriers to using mobile data
    Communication & Promotion
    • Learn user preferences for handset functionalities related to data use
    • Make subscribers comfortable using their handsets for data applications
    Handsets Preparing the Operator Preparing the Subscriber Base SMS can mitigate mobile data risks SMS teaches subscribers to use their handsets for other applications beside voice Key Benefit
  • 16. Agenda The Opportunity Relevance to Alltel A Winning Strategy
  • 17.
    • Target high potential users within the subscriber base: Teen, Students, Young Professionals, SMEs
    A Winning Strategy Strategic Guidelines A successful SMS strategy requires an action plan to reduce barriers to adoption in order to create the viral effect required to drive usage.
    • Upgrade SMS platform to address market requirements
    • Enable all subscribers to use the service as default
    • Focus on peer to peer messaging first but develop selective content offers (e.g. ringtones)
    • Introduce bill per message price plan
    • Introduce Calling Party Pays concept (free to receive)
    • Develop communications program to educate customers as well as sales force and customer service representatives
    • Incorporate 2-way SMS as a standard feature in all new handsets
    • Establish interoperability agreement with third party IC providers
    • and IM players
    Pricing Strategy Interoperability Handset Offer Design Communication and Promotion Customer Segments
  • 18. A Winning Strategy Implementation Framework Implementing the strategy requires aggressive cross-functional coordination between marketing, sales, and the technical support functions. Program Management Billing Network/ SMSC Integration Sales and Customer Service Handset Strategy Construct and Monitor Business Case Marketing Plan Inter- Operability
  • 19. A Winning Strategy Implementation Plan: Business Case Program Management Interoperability Sales and Customer Service Construct and Monitor Business Case Handset Strategy Marketing Initiatives
    • Estimate current SMS support costs
    • Estimate incremental investments/costs to support market strategy:
      • SMSC
      • Network
      • Billing
      • Applications
      • Marketing and promotions
    • Forecast monthly subscriber and revenue growth
    • Evaluate/design the organization structure required to deliver growth
    Tasks Deliverables
    • Business case model and budget with 3 year pro-forma projections
    • Peak (“busy hour”) volume projections and capacity needs
    • Recommendation on organization structure to support growth
    Billing Network/SMSC Integration
  • 20. A Winning Strategy Implementation Plan: Marketing Initiatives
    • Identify and segment high potential SMS users within the base
    • Define offer(s), pricing strategies and respective value proposition
      • Design focus groups to test the offering
      • Adjust service offerings and pricing strategies based on focus groups results
      • Refine service offering requirements and timelines from a technical and customer service point of view
    • Define communication and promotion strategy and plan
    • Launch SMS offerings
    Tasks Deliverables
    • High priority customer segmentation
    • Service offering(s) prioritized by segment
    • Pricing strategy
    • Partnership requirements
    • Communication and promotion strategy and plan
    • Campaign launch
    • Measurement and evaluation of results
    Program Management Interoperability Sales and Customer Service Construct and Monitor Business Case Marketing Initiatives Handset Strategy Billing Network/SMSC Integration
  • 21. A Winning Strategy Implementation Plan: Technical Support Coordination Dramatic growth must be anticipated and prepared for at all levels.
    • Evaluate interoperability options
    • Evaluate SMSC capabilities against future volume and service requirements
      • Busy hour traffic
      • Reporting and troubleshooting
      • Data capture for billing requirements
    • Evaluate Network capabilities against forecasted traffic
    • Evaluate billing capabilities against future service needs
    Tasks Deliverables
    • Inter-carrier vendor (ICV) comparison and selection recommendation
    • SMSC vendor comparison and selection recommendation
    • Network traffic forecast
    • Billing services needs and timeline
      • Per-message
      • Downloads/alerts
      • Games, IM
      • Roaming
    Program Management Interoperability Sales and Customer Service Construct and Monitor Business Case Handset Strategy Marketing Initiatives Billing Network/SMSC Integration
  • 22. A Winning Strategy Implementation Plan: Sales and Customer Service Support In order to fully capitalize on the SMS opportunity, the “front line” must be involved, trained, and excited about the service.
    • Identify current communication methods and support for field and customer service
    • Develop internal communication strategy, plan and materials tied to marketing strategy
      • Sales
      • Customer service
      • Regional marketing
      • Network support
    • Develop internal promotion to create interest/excitement around the service
    Tasks Deliverables
    • Internal communication plan
    • Internal promotion plan
    Program Management Interoperability Sales and Customer Service Construct and Monitor Business Case Handset Strategy Marketing Initiatives Billing Network/SMSC Integration
  • 23. A Winning Strategy Implementation Plan: Program Management One of the primary benefits of program management is to eliminate “surprises” and minimize or eliminate deadline slippage. Tasks Deliverables
    • Detailed master workplan with schedule, deadlines, and interdependencies
    • Weekly status reports/discussions
    • Periodic management progress reports
    • Preparation and launch completed on time and within budget
    • Identify current state of program
      • Interview key stakeholders
      • Identify and document current projects, schedules
      • Identify inter-project dependencies
    • Facilitate cross functional communications
      • Track and report progress against baseline
      • Encourage adherence to deadlines
    • Resolve issues
      • Identify roadblocks
      • Form ad-hoc teams to tackle issues
      • Monitor impact on overall plans
    Program Management Interoperability Sales and Customer Service Construct and Monitor Business Case Billing Marketing Initiatives Network SMSC
  • 24. A Winning Strategy High Level Plan for Launch Task Month 1 Alltel can leverage DCI’s expertise in this area to speed time to market and be in a position to fully launch a competitive SMS offer in just 6 months. Month 2 Month 3 Month 4 Month 5 Month 6 Month 7
    • Business Case
      • Estimate investment Requirements
      • Build revenue and cost model
      • Evaluate Organization Requirement
    • Marketing Plan
      • Identify and segment potential users
      • Define offer and pricing strategy
      • Define communication and promotion plan for launch
      • Execute plan
    • Interoperability
      • Prepare and issue RFP
      • Evaluate and execute
    • SMSC/Network
      • Prepare and issue RFP
      • Evaluate and execute
    • Billing
      • Evaluate billing requirements
      • Execute
    • Program Management
      • Track and report progress
      • Identify and mitigate risks
    Launch
  • 25. A Winning Strategy Implementation Project Structure Project Lead Marketing Initiatives SMSC Roll Out DCI Steering Committee Subject Matter Experts Alltel DCI Alltel Alltel Billing System Roll-Out Alltel Interoperability Handset Strategy Alltel Sales and C.Care Training Alltel Business Case DCI PMO DCI Project Areas DiamondCluster team would be deployed in the marketing initiatives, including partnership evaluation, business case development, program management as well as interoperability negotiation support. DCI Alltel

×