CMD2011 - Anders Olsson - Commercial Group

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  • TrendsFrom our perspective there are four major trends that are impacting our strategy the next few yearsFirstly, there will be an exponential increase in demand for data. People will use several devices and several SIM cardsPeople will use more and more IP based servicesThere will be a clear shift from voice to dataSecondly, we will see an explosion of connected devicesTablets will become mainstreamM2M applications like electricity meters, parking meters, alarm systems and fleet tracking will continue to growConsumer connected devices like Amazon Kindle, sports devices will become more mainstreamThirdly, we will see the separation of the access layer and the service layerCompetition in the service layer from players like Skype will continue to increaseLastly, there is growth left in the business marketWe see an increase in demand for outsourced services, ICT solutions and cloudWe see growth in the outsourced PBX marketThis is a growth pocket we can tap into Product roadmapOur overall roadmap is strongly focused on profitable growth where we see opportunities, meaningWe aim to keep capitalizing on the rapid growth of mobile data by providing good value for money to our customers.The mobile data growth is fundamentally a good thing for our industry as our services are needed and we intend to take full part of this growth The challenge is of course price levels and increasing competition as in every maturing industryWe aim to grow our market share in profitable customer segments XXXDANIELE?In terms of new revenues, we will selectively explore new business modelsWe will focus on a couple of areas at a time to ensure we take part of future transformations. We are highly selective to keep our costs downOur business segment has been in focus over the last year and we will continue to pursue market share growth in selective segments in this area.
  • TrendsFrom our perspective there are four major trends that are impacting our strategy the next few yearsFirstly, there will be an exponential increase in demand for data. People will use several devices and several SIM cardsPeople will use more and more IP based servicesThere will be a clear shift from voice to dataSecondly, we will see an explosion of connected devicesTablets will become mainstreamM2M applications like electricity meters, parking meters, alarm systems and fleet tracking will continue to growConsumer connected devices like Amazon Kindle, sports devices will become more mainstreamThirdly, we will see the separation of the access layer and the service layerCompetition in the service layer from players like Skype will continue to increaseLastly, there is growth left in the business marketWe see an increase in demand for outsourced services, ICT solutions and cloudWe see growth in the outsourced PBX marketThis is a growth pocket we can tap into Product roadmapOur overall roadmap is strongly focused on profitable growth where we see opportunities, meaningWe aim to keep capitalizing on the rapid growth of mobile data by providing good value for money to our customers.The mobile data growth is fundamentally a good thing for our industry as our services are needed and we intend to take full part of this growth The challenge is of course price levels and increasing competition as in every maturing industryWe aim to grow our market share in profitable customer segments XXXDANIELE?In terms of new revenues, we will selectively explore new business modelsWe will focus on a couple of areas at a time to ensure we take part of future transformations. We are highly selective to keep our costs downOur business segment has been in focus over the last year and we will continue to pursue market share growth in selective segments in this area.
  • Mobile data: we will keep capitalizing on the rapid increase in demand for ubiquitous mobile data services and accelerate the rate of adoption by customers in underpenetrated markets by:Serving our customers’ demand for networks with good coverage, high speed capability and reliability, by continuing to invest in a cost efficient manner in our 3G and 4G networks . Also delivering voice over 4GGiving our customers control and drive a higher return on investment by improving pricingNo longer have unlimited tariffs unless competition has it (ES)Transitioning our data pricing plans to tiered plans and differentiated service levels to our customers. We are looking into tiered pricing based on volume, speed and qualityEnable smooth up-grading opportunities for our customersCarrying a selective portfolio of smartphones and connected devicesSuitable financing options per marketAccelerate further smartphone penetration across our customer base by providing low cost smartphonesEnable pre-paid segment smartphones
  • TrendsFrom our perspective there are four major trends that are impacting our strategy the next few yearsFirstly, there will be an exponential increase in demand for data. People will use several devices and several SIM cardsPeople will use more and more IP based servicesThere will be a clear shift from voice to dataSecondly, we will see an explosion of connected devicesTablets will become mainstreamM2M applications like electricity meters, parking meters, alarm systems and fleet tracking will continue to growConsumer connected devices like Amazon Kindle, sports devices will become more mainstreamThirdly, we will see the separation of the access layer and the service layerCompetition in the service layer from players like Skype will continue to increaseLastly, there is growth left in the business marketWe see an increase in demand for outsourced services, ICT solutions and cloudWe see growth in the outsourced PBX marketThis is a growth pocket we can tap into Product roadmapOur overall roadmap is strongly focused on profitable growth where we see opportunities, meaningWe aim to keep capitalizing on the rapid growth of mobile data by providing good value for money to our customers.The mobile data growth is fundamentally a good thing for our industry as our services are needed and we intend to take full part of this growth The challenge is of course price levels and increasing competition as in every maturing industryWe aim to grow our market share in profitable customer segments XXXDANIELE?In terms of new revenues, we will selectively explore new business modelsWe will focus on a couple of areas at a time to ensure we take part of future transformations. We are highly selective to keep our costs downOur business segment has been in focus over the last year and we will continue to pursue market share growth in selective segments in this area.
  • TrendsFrom our perspective there are four major trends that are impacting our strategy the next few yearsFirstly, there will be an exponential increase in demand for data. People will use several devices and several SIM cardsPeople will use more and more IP based servicesThere will be a clear shift from voice to dataSecondly, we will see an explosion of connected devicesTablets will become mainstreamM2M applications like electricity meters, parking meters, alarm systems and fleet tracking will continue to growConsumer connected devices like Amazon Kindle, sports devices will become more mainstreamThirdly, we will see the separation of the access layer and the service layerCompetition in the service layer from players like Skype will continue to increaseLastly, there is growth left in the business marketWe see an increase in demand for outsourced services, ICT solutions and cloudWe see growth in the outsourced PBX marketThis is a growth pocket we can tap into Product roadmapOur overall roadmap is strongly focused on profitable growth where we see opportunities, meaningWe aim to keep capitalizing on the rapid growth of mobile data by providing good value for money to our customers.The mobile data growth is fundamentally a good thing for our industry as our services are needed and we intend to take full part of this growth The challenge is of course price levels and increasing competition as in every maturing industryWe aim to grow our market share in profitable customer segments XXXDANIELE?In terms of new revenues, we will selectively explore new business modelsWe will focus on a couple of areas at a time to ensure we take part of future transformations. We are highly selective to keep our costs downOur business segment has been in focus over the last year and we will continue to pursue market share growth in selective segments in this area.
  • We will take part in the new growth areas and new business models as we see it as crucial to stay open and transform as suitableOur first priority is and will always be to deliver affordable core communications solutions to our customers. Our services should be easy to useWe should be the most innovative on pricing and offer innovation. ExamplesMBB quick surfer discount LithuaniaFixed communications via mobile Estonia, Sweden Movies in the mobile SwedenMBB free nightime surf campaign LithuaniaFrank phone SwedenMBB multi-SIM and device bundle with 10 SIMs, router and modem in EstoniaWhen we deliver new products, our focus is on delivering proven products that competitors have ”beta-tested” for us. What we do isCopy the products that are successfulMake them simpler and easier to useSell them cheaperThat said, we have set off resources to focus on exploring new business models and taking more risks. The set up here is thatWe only focus on 2-3 areas at a timeWe only develop services where operators can add specific value, such as with connectivity, payments, billing, data etc.
  • TrendsFrom our perspective there are four major trends that are impacting our strategy the next few yearsFirstly, there will be an exponential increase in demand for data. People will use several devices and several SIM cardsPeople will use more and more IP based servicesThere will be a clear shift from voice to dataSecondly, we will see an explosion of connected devicesTablets will become mainstreamM2M applications like electricity meters, parking meters, alarm systems and fleet tracking will continue to growConsumer connected devices like Amazon Kindle, sports devices will become more mainstreamThirdly, we will see the separation of the access layer and the service layerCompetition in the service layer from players like Skype will continue to increaseLastly, there is growth left in the business marketWe see an increase in demand for outsourced services, ICT solutions and cloudWe see growth in the outsourced PBX marketThis is a growth pocket we can tap into Product roadmapOur overall roadmap is strongly focused on profitable growth where we see opportunities, meaningWe aim to keep capitalizing on the rapid growth of mobile data by providing good value for money to our customers.The mobile data growth is fundamentally a good thing for our industry as our services are needed and we intend to take full part of this growth The challenge is of course price levels and increasing competition as in every maturing industryWe aim to grow our market share in profitable customer segments XXXDANIELE?In terms of new revenues, we will selectively explore new business modelsWe will focus on a couple of areas at a time to ensure we take part of future transformations. We are highly selective to keep our costs downOur business segment has been in focus over the last year and we will continue to pursue market share growth in selective segments in this area.
  • TrendsFrom our perspective there are four major trends that are impacting our strategy the next few yearsFirstly, there will be an exponential increase in demand for data. People will use several devices and several SIM cardsPeople will use more and more IP based servicesThere will be a clear shift from voice to dataSecondly, we will see an explosion of connected devicesTablets will become mainstreamM2M applications like electricity meters, parking meters, alarm systems and fleet tracking will continue to growConsumer connected devices like Amazon Kindle, sports devices will become more mainstreamThirdly, we will see the separation of the access layer and the service layerCompetition in the service layer from players like Skype will continue to increaseLastly, there is growth left in the business marketWe see an increase in demand for outsourced services, ICT solutions and cloudWe see growth in the outsourced PBX marketThis is a growth pocket we can tap into Product roadmapOur overall roadmap is strongly focused on profitable growth where we see opportunities, meaningWe aim to keep capitalizing on the rapid growth of mobile data by providing good value for money to our customers.The mobile data growth is fundamentally a good thing for our industry as our services are needed and we intend to take full part of this growth The challenge is of course price levels and increasing competition as in every maturing industryWe aim to grow our market share in profitable customer segments XXXDANIELE?In terms of new revenues, we will selectively explore new business modelsWe will focus on a couple of areas at a time to ensure we take part of future transformations. We are highly selective to keep our costs downOur business segment has been in focus over the last year and we will continue to pursue market share growth in selective segments in this area.
  • The business segment is a growth area for Tele2 and we have a two-pronged strategy here:Firstly, we are launching basic services and add on services across our footprintProper B2B tariffs across Russia and CroatiaSelected add-on services across our markets, such asCalling at local rate across several markets, Baltics launchedBlackberry solutions launched in Sweden, Latvia and LithuaniaSecurity packages launched in SwedenHosted PBX solution in Sweden ????? VERIFYSecondly, we are targetting to grow in the SME segment by taking on a larger portion of their communications needs Delivering outsourced communications solutions such as PBX and switching solutionsDelivering a mixture of fixed, mobile, IT and support as neededDelivering selected cloud solutions through partnershipsThirdly, we wll continue to grow in the Large Public Enterprise segment with customised long term deals at good value
  • TrendsFrom our perspective there are four major trends that are impacting our strategy the next few yearsFirstly, there will be an exponential increase in demand for data. People will use several devices and several SIM cardsPeople will use more and more IP based servicesThere will be a clear shift from voice to dataSecondly, we will see an explosion of connected devicesTablets will become mainstreamM2M applications like electricity meters, parking meters, alarm systems and fleet tracking will continue to growConsumer connected devices like Amazon Kindle, sports devices will become more mainstreamThirdly, we will see the separation of the access layer and the service layerCompetition in the service layer from players like Skype will continue to increaseLastly, there is growth left in the business marketWe see an increase in demand for outsourced services, ICT solutions and cloudWe see growth in the outsourced PBX marketThis is a growth pocket we can tap into Product roadmapOur overall roadmap is strongly focused on profitable growth where we see opportunities, meaningWe aim to keep capitalizing on the rapid growth of mobile data by providing good value for money to our customers.The mobile data growth is fundamentally a good thing for our industry as our services are needed and we intend to take full part of this growth The challenge is of course price levels and increasing competition as in every maturing industryWe aim to grow our market share in profitable customer segments XXXDANIELE?In terms of new revenues, we will selectively explore new business modelsWe will focus on a couple of areas at a time to ensure we take part of future transformations. We are highly selective to keep our costs downOur business segment has been in focus over the last year and we will continue to pursue market share growth in selective segments in this area.
  • TrendsFrom our perspective there are four major trends that are impacting our strategy the next few yearsFirstly, there will be an exponential increase in demand for data. People will use several devices and several SIM cardsPeople will use more and more IP based servicesThere will be a clear shift from voice to dataSecondly, we will see an explosion of connected devicesTablets will become mainstreamM2M applications like electricity meters, parking meters, alarm systems and fleet tracking will continue to growConsumer connected devices like Amazon Kindle, sports devices will become more mainstreamThirdly, we will see the separation of the access layer and the service layerCompetition in the service layer from players like Skype will continue to increaseLastly, there is growth left in the business marketWe see an increase in demand for outsourced services, ICT solutions and cloudWe see growth in the outsourced PBX marketThis is a growth pocket we can tap into Product roadmapOur overall roadmap is strongly focused on profitable growth where we see opportunities, meaningWe aim to keep capitalizing on the rapid growth of mobile data by providing good value for money to our customers.The mobile data growth is fundamentally a good thing for our industry as our services are needed and we intend to take full part of this growth The challenge is of course price levels and increasing competition as in every maturing industryWe aim to grow our market share in profitable customer segments XXXDANIELE?In terms of new revenues, we will selectively explore new business modelsWe will focus on a couple of areas at a time to ensure we take part of future transformations. We are highly selective to keep our costs downOur business segment has been in focus over the last year and we will continue to pursue market share growth in selective segments in this area.
  • Change from volume targets to value targetsChurn rate -> Lost revenuesSales -> Customer lifetime valueEfficient and targeted offeringsLeverage on our customer insight activities.Segmented offers with the right value deal to the right customer.Changes in customer related processesInsert a constant value focus.Integrate customer feedback.
  • We are advanced in our sales channel analysis as we look into all parts of channel specific profitability (ARPU, churn and acquisition cost) by channel (whereas many competitors take only channel specific acquisition cost into account) We move our sales channel mix towards taking in more profitable customers overall and serving the existing base better by: Raising the share of monobrand sales in retail (either through own shop chains or 3rd party models) Increasing our online capabilities to offer better service to our existing customers and make the purchasing and information gathering processes for new customers even more enjoyableReducing the share of phone sales while still leveraging opportunities for additional sales from incoming customer service calls We increase customer experience in all channels by enhanced measurements of our direct/branded and indirect/non-branded channels that capture customer feedback immediately and make it available it directly to store managers and call center managers (measurements can be mystery shopping, NPS tracking, retail manager surveys, exit interviews etc)Direct Sales Force (19%): Doorknockers, Account Manager, Promostand/EventsTelemarketing (5%): Outbound Telemarketing, Inbound TelemarketingWeb (2%): Tele2 Webshop via Tele2 Website, External “Tele2 branded” WebshopBrand Shops (21%):Flagship Store, Midsize Shop, Shop in Shop, Permanent Promo-stands Indirect channels (50%):External „non Tele2 branded“ Webshops, Retailer, Specialized Retailer, Wholesaler, Other Intake (3%)
  • We created our monobrand shop concepts along three core principles: Maximize display of Product & Services - by packaging them in appealing way and have high proportion of shelf space vs. e.g phones and accessories Maximize guidance of customers in the store - by dividing shops into zones (e.g. service, cashier, tariffs, accessories) and marking them clearly on floors and wallsCreate the best shopping atmosphere - by integrating advertising campaigns seamlessly (e.g. via wallpapers, packaging, on shelf displays), by qualitative displays of phones and services (life units, bright and informative packages, technical gadgets to help choosing numbers and tariffs) by displaying abundance of products, encouraging to take products and services off the shelves instead of showcasing them We roll-out our new shop concepts in Russia, Kazakhstan, Sweden and Croatia at full speed Target to have rolled out/converted around 150 shops across these countries, whereof Russia alone accounts for ca. 100. All country concepts are customised to allow for different customer needs (e.g. Russia and Kazakhstan have special section to enable customers select their numbers - a very important status symbol in these countries; Croatia has a special Data section, accounting for the high focus on mobile data by Croatians)different advertising concepts (Russia and Kazakhstan using "Mafia" concept while Sweden and Croatia use the sheep "Frank/Gregor")different location profiles (we differentiate between large, medium and small sized stand-alone formats plus mobile units for permanent installation in e.g. shopping center isles)
  • Change from volume targets to value targetsChurn rate -> Lost revenuesSales -> Customer lifetime valueEfficient and targeted offeringsLeverage on our customer insight activities.Segmented offers with the right value deal to the right customer.Changes in customer related processesInsert a constant value focus.Integrate customer feedback.
  • CMD2011 - Anders Olsson - Commercial Group

    1. 1. Capital Markets Day 2011<br />Commercial Group<br />Anders Olsson<br />
    2. 2. Trends Affecting our Commercial Strategy and Product Roadmap<br />Explosion of connected devices and<br />separation of access and services<br />Increasing demand for data<br />Increased demand of ICT, centrex and<br />cloud solutions for SME <br />Less underlying growth…<br />
    3. 3. Implications on our Commercial Strategy and Product Roadmap<br />Increasing demand for data<br />Capitalize on growth in data<br />Explosion of connected devices and<br />separation of access and services<br />Increased demand of ICT, centrex and<br />cloud solutions for SME <br />Less underlying growth…<br />
    4. 4. Grow Mobile Data<br /><ul><li>Serve our customers’ demand for data with cost-efficient, high-speed, reliable networks
    5. 5. Provide customers with a selective portfolio of smartphones and connected devices
    6. 6. Give customers control and drive a higher return on investment by improving pricing</li></li></ul><li>Trends Affecting our Commercial Strategy and Product Roadmap<br />Explosion of connected devices and<br />separation of access and services<br />Increasing demand for data<br />Increased demand of ICT, centrex and<br />cloud solutions for SME <br />Less underlying growth…<br />
    7. 7. Implications on our Commercial Strategy and Product Roadmap<br />Explosion of connected devices and<br />separation of access and services<br />Offer the most valuable access products and selectively explore new business models<br />Increasing demand for data<br />Increased demand of ICT, centrex and<br />cloud solutions for SME <br />Less underlying growth…<br />
    8. 8. SelectivelyExploreNew Business Models<br /><ul><li>Be selective in exploring new business models</li></ul>New <br />business models<br /><ul><li>Deliver proven new products</li></ul>Proven new products<br /><ul><li>Deliver affordable, easy to use core communication solutions</li></ul>Core communication solutions<br />
    9. 9. Trends Affecting our Commercial Strategy and Product Roadmap<br />Explosion of connected devices and<br />separation of access and services<br />Increasing demand for data<br />Increased demand of ICT, centrex and<br />cloud solutions for SME <br />Less underlying growth…<br />
    10. 10. Implications on our Commercial Strategy and Product Roadmap<br />Explosion of connected devices and<br />separation of access and services<br />Increasing demand for data<br />Increased demand of ICT, centrex and<br />cloud solutions for SME <br />Increased focus on SME<br />Less underlying growth…<br />
    11. 11. IncreaseBusiness Market Share<br /><ul><li>Implement growth measures to drive the SME segment
    12. 12. Selected add-on services across our markets
    13. 13. Explore “One-stop-shop” concept
    14. 14. Delivering outsourced communication solutions
    15. 15. Delivering selected cloud solutions throughpartnerships</li></li></ul><li>Trends Affecting our Commercial Strategy and Product Roadmap<br />Explosion of connected devices and<br />separation of access and services<br />Increasing demand for data<br />Increased demand of ICT, centrex and<br />cloud solutions for SME <br />Less underlying growth…<br />
    16. 16. Implications on our Commercial Strategy and Product Roadmap<br />Explosion of connected devices and<br />separation of access and services<br />Increasing demand for data<br />Less underlying growth…<br />From volume focus to value focus<br />Increased demand of ICT, centrex and<br />cloud solutions for SME <br />
    17. 17. Evolution from Discounter to Best Deal<br /><ul><li>Historically single minded proposition of “price leader”
    18. 18. Markets are maturing and Tele2’s commercial strategy is shifting from volume to value
    19. 19. Evolution from the purely price driven consumers and move to a proposition based on value</li></li></ul><li>Tele2 Sales Channels<br /><ul><li>Indirect Sales Channels is the </li></ul> main channel for acquiring customers<br /><ul><li>We focus our sales channel mix on the channels were we have the highest customer lifetime value
    20. 20. Focus channels are Web and the Tele2 Branded Shops</li></li></ul><li>Tele2 Branded Shops Deliver Valuable Customers <br />Russia<br />Own: 0<br />3rd party: 450<br />Sweden<br />Own: 20<br />3rd party: 0<br /><ul><li>High customer lifetime value from </li></ul> Tele2 branded shops <br /><ul><li>We operate the Tele2 branded shops either ourselves or together with third parties
    21. 21. Continued rollout of the successful Tele2 branded shop concept</li></ul>Latvia<br />Own: 37<br />3rd party: 15<br />Estonia<br />Own: 23<br />3rd party: 10<br />Lithuania<br />Own: 0<br />3rd party: 109<br />Kazakhstan<br />Own: 8<br />3rd party: 3<br />Croatia<br />Own: 0<br />3rd party: 36<br />Western Shop Concept<br />Eastern Shop Concept<br />
    22. 22. From Volume to Customer Value Focus<br /><ul><li>Change from volume targets to value targets
    23. 23. Instead of churn rate we will focus on lost revenues
    24. 24. Within sales we will focus on customer lifetime value
    25. 25. Efficient and targeted offerings
    26. 26. Leverage on our customer insight activities
    27. 27. Segmented offers with the right value deal to the right customer
    28. 28. Changes in customer related processes
    29. 29. Insert a constant value focus
    30. 30. Integrate customer feedback</li></ul>SEK Thousand<br />By decreasing the churn value (as a percentage of revenue) SEK 3 bn will be saved in 4 years, compared to 2010 years churn value levels.<br />
    31. 31. Conclusion<br /><ul><li>Launch new access products and improve capabilities to sell and charge data
    32. 32. Offer the most valuable access products and selectively explore new business models
    33. 33. Increased focus on SME
    34. 34. From volume to value focus</li>

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