Presentation from Marketing and Sales Strategies in Evolving Telecoms 2008 conference which took place in Barcelona on September 22nd - 24th.

1. Telco and IT convergence
as the future business
driver
Tomas Trejbal
Head of Corporate Product Marketing,
Barcelona, September 24th, 2008

2. Agenda
Who? we are
What? Convergent story
Why?
How? what is needed to become reality
Conclusions to take away
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3. Telefónica O2 provides its clients the experience
& size of a world leader…
Telefonica‘s Footprint …serving 23 countries
Dec 2007
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4. Within the Czech Republic Telefónica O2 has a strong
local market footprint
Telefónica O2 in the Czech Republic
 Fully integrated Telco & IT provider
Prague
 ČESKÝ TELECOM + Eurotel Praha in July
2006:
Czech Republic
 Offering the most comprehensive portfolio of
voice & data services in the Czech Republic
 Operating the largest fixed & mobile network
 8 Million fixed & mobile lines in operation
 8700 employees at your service
 Omnicom in 1999 and Deltax Systems in 2007 2007
enable us to offer you information and
communication technologies (ICT) services end-
to-end 2006
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5. … and what was the question?
Convergence with
Telefónica O2
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6. TO2‘s Strategic challenge
Customer wallet is shifting from traditional telecom products and services to
ICT, creating new opportunities but also a challenge to the existing business
model
• Significant new wallet created in the areas originally dominated by IT firms
• Traditional telco revenues in decline
• ICT providers are also positioning themselves to offer traditional telecom services,
pushing telecom incumbents into becoming wholesale providers and losing the end
customer relationship
As a result, most telcos increasingly successful in penetrating areas originally
dominated by IT firms
• Leading players currently generate up to 20% of revenues in the business segment in
ICT
• Moreover, ICT also contributes to protecting revenues from traditional telco business
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7. Current CIO pains
65% of all interviewed CIOs planed changes to their IT delivery
models* within the coming two years
* the mix of activities to focus on and their sourcing
The key drivers for changes in delivery model are:
82% Cost reduction
46% Need for increased flexibility
43% Quality increase
42% More time to focus on core
business
Source: EUROPEAN CIO SURVEY - views on future IT delivery 2006, Capgemini
The survey is based on one-to-one interviews with over 160 CIOs, across 12
European countries, with representation from all industries
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8. Telefónica O2 – network centric ICT system
integrator
Customer environment PABX/LAN Managed Services and Outsourcing
Communications
User devices
Mobile
Video conferencing
Laptop, Audio conferencing
CDMA,
HSDPA
E-mail and SMS Server Hosting
PABX platforms
Voice and data
Telephone network
Data Storage
PC LAN Services Archiving Services
Workplaces Premises Data Centres
End to end SLA Security Premium Care Consultancy
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9. What is needed to become reality?
e.g. which products will to be delivered,
3. Products which features are expected by customers
etc.
e.g. what has to be the sales support and
1. Market Potential
4. Delivery structure for selling managed services
(higher involvement of presales…)
2. BP Targets
5. Value e.g. will be covered by the ICT
Proposit. / communication strategy
Communicatio
n Training/
6. e.g. what is the best way how the sales
Motivation has to be trained and motivated
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10. 1. Market potential
BCG Survey
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11. 2. BP Targets
Corporate & Corporate & Corporate &
Government Government Benefits Government
for you
104 M €
77 M €
22,4 M €
IT solutions IT solutions IT solutions
2006 2007 2010 BP
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12. 3. Products
Managed Services Platform
LAN WAN Hosting

Gold MLAN
Q3 2008 GOLD MWAN Q3 2008 Managed Data Q3 2007
Silver MLAN Storage
 O2 Complete
Office
Q1 2007 Silver MWAN Q3 2008 Managed Server
Hosting
Q4 2007

Desktop Security Voice
Managed
Desktop
Q3 2008 MSS Phase I Q4 2008 Managed PBX Q4 2007 

O2 Computer
Solution
Q3 2007 MSS SG 1-8 2009 IP Centrex Q1 2008 
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12  Service already launched

13. 3. Products
Current status: Next steps:
Managed Hosting
-3 out of 4 total services Managed Archive for Q2
Managed Data Q3 2007
Storage are launched 2008
Managed Server Q4 2007
Hosting
Voice
-Managed PBX is already -Managed PBX Phase II
launched
-ad on features to IP
Managed PBX Q4 2007
-IP Centrex will be Centrex to fit Corporate
IP Centrex Q1 2008
launched in Q2/2008 customers
Desktop
-O2 PC Solution was -Managed Desktop will be
Managed
Q3 2008 launched in September 07 launched in Q3/2008
Desktop
O2 Computer Q3 2007
Solution 13
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14. 3. Products
Security Current status: Next steps:
-Only Service Group I. is -To launch the full scope
MSS Phase I Q4 2008 going to be launched in of services
2008
MSS SG 1-8 2009 -no revenue is expected
from this services.
LAN
-O2 Complete Office is -Silver and Gold Managed
GOLD MLAN already launched LAN are going to be
Q3 2008
Silver MLAN launched in Q3/2008
-Project based
O2 Complete Q1 2007 business(only for limited
Office number of customers)
WAN
-During 2008 we will offer -Silver and Gold Managed
GOLD MWAN Q3 2009 WAN are going to be
Silver and Gold Service
Desk, which are partly launched in Q3/2008
Silver MWAN Q3 2009
similar to MWAN
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15. 4. Product Delivery
„Push Teams“
From Telco oriented sales … to teams, which are able
structure to do consultative selling
Solution Specialists
Nationwide logistic
coverage
Dedicated Dedicated
Key Account Sales
Manager Support Nationwide dedicated
„Gold“ dealers
Sales Team Presales Team
• Main purpose of „Managed Service Push Program“ is to define rules, processes and
responsible persons in order to significantly improve selling Managed Services
1. Principles of selling Commodities
- Sales is active in selling, Presales is supporting Sales on Demand
2. Principles of selling Managed Services
- Sales is active in selling, Presales and marketing together with other
needed teams creates „push environment" for active selling and
solving issue in order to generate new revenue stream
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16. 5. Value proposition
Main benefits for customers
Managed Managed Managed Managed Managed Managed
WAN LAN Desktop Voice Security Hosting
Lower TCO
• Lower TCO
• Better control over CAPEX and OPEX costs
Flexibility
• Investment into new business opportunities instead of infrastructure
• Capacity is increased fluently according to the business opportunities
• Easy management of seasonal and project based jobs
• Investments decrease for finding new business opportunities
People and quality management
• Lower internal Headcount
• Increased competence
• Global SLA from end2end.
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17. 5. Value proposition
Lower TCO
LOWER TCO BETTER CASH FLOW CONTROL
• Pay-per-use concepts • Managed services don‘t generate any
• No capex payments CAPEX
• No operational and admin costs • Services are paid from operational
budgets
• Customers don‘t care about the
technology lifecycle
Buy
In-house
tech. OPEX
MB&R
Conn.
Operation MDS
and
Adm. MSH OPEX
CAPEX
Integrated SLA
Real Business case for Retail client with 500 employees 17
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18. 5. Value proposition
Flexibility
INVESTMENT INTO NEW BUSINESS
SUPPORTING NEW BUSINESS
OPPORTUNITIES INSTEAD OF
OPPORTUNITIES
INFRASTRUCTURE
• You buy only the capacity which you • Service increase is done fluently according
actualy need. to the actual customer requests
• Increases are fluent according to the • There is no technology or staff unused
requests. • No complicated and strategic planning is
• You always use 100% of the bought necessary
capacity.
Unused capacity
Real used capacity
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19. 5. Value proposition
Flexibility
EASY MANAGEMENT OF SEASONAL FOLLOW UP THE CYCLES OF
AND PROJECT BASED JOBS BUSINESS
• The needed capacity is easy bought. • You decrease the subscribed capacity and
• Seasonal activity variances are covered power by 20%
only for the necessary time. • You have no unused technology, or IT
• After this period the capacity is decreased staff capacity
to the bottom level.
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20. 5. Value proposition
People and Quality management
LESS HR ISSUES GLOBAL SLA FROM END TO END
 All the staff costs are included in the  Service availability and operation are
service guaranteed
 Technical specialists are shared among  Service has a defined SLA
more customers = the capacities are used parametersparameters and SLA (Service
effectively. Level Agreement)
 Saved internal headcount  All processes of the delivered services are
 Additional competence according to ITIL standards.
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21. 5. Communication
Current TO2 brand market perception
-Only a very low number of customers is ready to buy IT
services from Telefónica O2
-Highest perception is in Hosting services, here we are
struggling with space
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22. 5. Communication
Message evolution …
2007 2008 2009
• Message • Message
O2 enters IT markets O2 is a trusted ICT
provider
• Content of message • Content of message • Content of message
• Change of strategy • Focus on proper launch of • Focus on multiplication of
towards ICT all product groups success stories
• Introducing our plans • Helping to generate leads • Behaving as established
market player
• Real status • Real status • Real status
10% of products 70% of products 100% of products
70% ready through projects 100% ready through 100% ready through
Limited potetial for projects projects
references Limited potetial for Limited potetial for
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23. 5. Communication
Year 2007 in detail
Conferences PR Case
studies
Active start from Active start from Active start from
Feb 07 Jun 07 Apr 07
+15 conferences +20 articles since +15 case studies •
in 2007 Jan created in
2007
• Reasons
8 product Very low
• Low investments, no
seminars visibility
bigger and visible
actions
Weak follow up Long-term No mass • Inconsistent, more
of leads projects communication
ad-hoc activities
starting of successes
• Low internal
communication
• Overall • Overall • Overall resulting in no internal
alignment and trust
70% 30% 50%
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24. 5. Communication
Communication levels of TO2 ICT Portfolio
O2 enters IT markets
Managed Services Professional Services
Network (O2 Complete Office) TOP GOV (Agricult./Transport)
Voice (Managed PBX, IP Centrex Telematics (eToll, eCall, Traffic
management)
IT (Managed Hosting, Managed DVB-T (Digital multiplex)
Desktop)
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25. 5. Communication
Pillars for 2008
Conferences PR Case Customer ATL
studies seminars BTL
10 conferences PR breakfasts 30 Success Product oriented Strong ATL
with ICT subject Press stories seminars communication
conferences linked with PR
1 special TO2 ICT 20 stories about 4 seminar for activities
conference 100 articles Managed Managed
services services Linked ATL with
1 government BTL campaign
40% about „TO2
conference with is ICT operator“ 10 stories about
strong ICT 30% about Professional 60% focused on
image „Managed services „managed
services“ services
30% about 10% of them as
„Professional video references 40% focused on
services“ „professional
services“
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26. 6. Training
month -3 Product launch month +1 month +4
Product eLearning + Self Ad hoc courses Sales Certification
Seminars training brochure
• Regular every • Together with all
quarter product launches • Only for selected • After launch training
groups with biggest
sales potential
• Limited time scope • Mandatory for all • Mandatory for all
to introduce the sales reps AMs
service to all sales • Full day dedicated for
reps one service
• Big part based on self • Fininhed with face 2
study face testing
• Orientation on
description, key • Courses finished by • Output as
benefits and typical eTesting certification
sales scenarios
Part of the Sales Excellence Flagship project for 2008!
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27. 6. Motivation
KPI
• Include Managed services in sales KPI‘s
• Value of Managed services sales is 5 times higher compared to
Commodities
Special financial bonus
• 1% from new sales on sold managed services for the periond of
April – December 2008
Incentives in cooperation with partners/vendors
• Special bonus for 5 first successfully closed cases to each service
Sales Fleet
• Contest for AMs only for Managed services (cooperation with
channel marketing
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28. Steering meetings
-Follow up on the Managed Services survey Shared
1. Market Potential project. Effective usage of the collected data. responsibility
- Weekly monitoring of the BP fullfilment and Shared
2. BP Targets actual pipeline. responsibility
- Product have to be launched properly, with right
prioritisaton and order according to the revenue Product
3. Products potential, strategical importance, TO2 sales Management
potential
- Define the exact role for account managers and Customer
4. Delivery presales teams Solution
- VP implementation and training/Strategic
Marketing
5, VP/Communication document with detailed communication plan and
its improvement in time and approach
- Detailed training plan considering prelaunch,
regular and certification seminars / Include Marketing
6. Training/Motivation services in sales KPIs. Special motivation for sales
based on new sales revenue.
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29. Conclusions to take away?
1. IT and Telco convergence build by a infrastructure operator is an
idea, which is great for (and not only for) Evolving markets…
2. …It follows the shift of customers vallet from pure telco services
towards IT…
…and supports the launch of new services which are very
3. complicated to be realized in divergent world.
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30. Questions ??
Tomas Trejbal
Telefónica O2 Czech republic
Head of Corporate Product Marketing
e. tomas.trejbal@o2.com
m. +420 720 755 506
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