Artyom Dudin Nadezhda Korosteleva
Team
“Spring!”
29/04/13
Sofia Pulikovskaya Artyom Storozhenko
$ Promotion
Services Technology
Market
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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To take the leading position in the Mobile Internet market by Q4 2017 MTS should implement all 16 initiatives Technology
Services
Promotion
Outsource
NFC Special offers
M2M
Stream video Stream music
OTT Retail
Stream web surfing
VoLTE
Market
New devices
RCS
New marketing strategy
Flexible data transmission management
New segments New tariffs
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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$ Promotion
Services Technology
Market
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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The amount of subscribers will slightly increase while the market of smartphones will boost more than 3 times by 2018
Amount of smartphones
Amount of subscribers Number of subscribers, %
80
Number of smartphones, %
80
70
70
60
60 50
50
40
40
30
30
20
20
10
10
0
0
2013 2014 2015 2016 2017
2013 2014 2015 2016 2017
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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If not implementing any initiatives the Company will suffer from overloaded traffic channels
160
Trafic increase,%
Increase of consumption:
140
Video
6
120
Audio
100
Game
8 10
Revenue, bln RUR
Growth of traffic is higher than growth of revenue
80 60 40
4% annual growth 34
20 0 2013
2014
2015
2016
2017
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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“Big three” overview has shown MTS tariff plans pros and cons by current moment Cell-phones/Smartphones 149R 50MB p/day – Moscow | 299R 100MB p/day – all Russia 4G 190R / 390R
690R
50Mb p/day /3 Gb
6 Gb
Unlim /3 Mbit/sec
5 Mbit/sec
Moscow
Russia
Unlim :150R + 13R p/day Prolong:100R+0R P/day :0R+19R
Tablets 400R for 4Gb 390R
690R
4G / 990R
4G / 1290R
3 Gb
6 Gb
10 Gb
20 Gb
3 Mbit/sec
5 Mbit/sec
10 Mbit/sec
20 Mbit/sec
Moscow & MR
Russia
Russia
Russia
Unlim: 150R + 13R p/day
0R + 600R p/day
USB-modems 500R
700R
1000R
1400R
-
4 Gb
7 Gb
12 Gb
25 Gb
-
All Russia 390R
690R
-
4G / 990R
4G / 1290R
3 Gb
6 Gb
-
10 Gb
20 Gb
3 Mbit/sec
5 Mbit/sec
-
10 Mbit/sec
20 Mbit/sec
Moscow & MR
Russia
-
Russia
Russia
Unlim:
150R + 13R в p/day
0R + 600R p/day
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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$ Promotion
Services Technology
Market
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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MTS infrastructure expenses have been estimated at 1.9 bln RUR without outsource services
Annual network operational costs without Nokia-Siemens Network outsourcing
1. bln 9 RUR
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Outsourcing of infrastructure maintenance allows MTS to cut operational costs by 8.6% in a long term period
Nokia-Siemens Networks outsourcing coverage
In a short term period MTS should outsource network operation to Nokia-Siemens Networks in two mostly populated districts: Northwestern and Volga Federal Districts. It will save up to 105 mln RUR
• Previous cooperation practice with NokiaSiemens Networks saved up to 20% of operational costs in the Central Federal District
In a long term period MTS should continue the cooperation with Nokia-Siemens Networks and expand into three other districts: Southern, North Caucasian and Ural Federal Districts. This expansion will help to save up to 60 mln RUR
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Flexible data transmission management will provide reduction of data flow on MTS network by 22%
In peak hours speed of Internet connection in Moscow center can fall to 59,2 Kbit/sec.
720p
For example downloading 2 minute YouTube HD video will take half an hour
240p/360p/480p
If MTS orders “smart data” technology the “traffic overload problem” will be redundant
Our system of flexible data transmission management will provide separate stream channel for each individual user Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Bring communications and improve customer experience by embedding social networking into everyday mobile devices Personalized advertising**
The business benefits: Presence*
- Enhanced end-user experience
Man-to-machine communications* Network address books & groups** Social communities**
File sharing*
Video enrichments*
- Increased customer retention - Opportunities to deliver new revenue-generating services such as interactive advertisements with service framework
It is better for MTS not to develop a new RCS but to cooperate with Nokia Siemens Networks (our certified partners) to implement their existing RCS solution
Enhanced phone book** Chat*
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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M2M is a perspective trend for Mobile Internet development in B2B sphere
Increasing amount of traffic Information flow growth Boosting amount of information which needs to be held Industrial networking: 1) monitoring cars 2) monitoring houses 3) flats 4) cargoes 5) traffic jams 6) products 7) long distance control 8) extractive industry 9) processing industry 10) VoLTE Changes: 1) clever dwelling 2) safety transport systems 3) new applications
4) number of commands to be executed 5) usage of smartphones 6) navigation
Services: 1) contactless communication 2) data exchange complex 3) communications as Wi-Fi 4) cloud computing Info: 1) communications protocols 2) data exchange formats 3) data transfer
MTS Mobile Internet Increasing flow of messages and other monitoring protocols will demand growing space for transmission and holding
Systems: Radio-frequency identification (RFID) Glonass/GPS
Technology: 1) Mobile Internet 2) Broad band Internet
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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$ Promotion
Services Technology
Market
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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So, how does the Mobile Internet work?
Content Media: Audio Video Booking Gaming
Online services
Skype Viber What’s up
Enabling technology services Entertainment: VK RuTube Odnoklassniki RCS Mobile TV
Connection: Calls Messages Surfing the net
OTT Social nets Video portals LTE, 3G, GPRS
Services: Navigation Payments
Geolocation Banking system
GPS Glonass NFC, M2M
User interface Apps Mobile Interface Programs Devices: Smartphones Game consoles Operating system
User
Software Internet browsers Media players
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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If not implementing any initiatives the Company will suffer from overloaded traffic channels
160
Increase of consumption:
140
Video
6
120
Audio
100
Game
8 10
Trafic increase,%
Growth of traffic is higher than growth of revenue
80 60 40
4% annual growth 34
20 0 2013
2014
2015
2016
2017
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Analyzed value chain of the Mobile Internet content we point out those KPIs that will give 80% of business effectiveness
Content Media: Audio Video Booking Gaming
Online services
Skype Viber What’s up
Enabling technology services Entertainment: VK RuTube Odnoklassniki RCS Mobile TV
Connection: Calls Messages Surfing the net
OTT Social nets Video portals LTE, 3G, GPRS
Services: Navigation Payments
Geolocation Banking system
GPS Glonass NFC, M2M
User interface Apps Mobile Interface Programs Devices: Smartphones Game consoles Operating system
User
Software Internet browsers Media players
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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We give each individual user experience they want and are willing to pay for
320 RUR
Video Music Surf
20 RUR 180 RUR 10 RUR
Our system of flexible data transmission management will provide separate stream channel for each individual user
+17 % ARPU annually
It is the new businessstrategy for MTS that will make our customers happier
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Replacing unlimited tariff plans with differentiated by speed of channel: GSM + 3G and LTE, MTS gets a new financial model
Tariff plans
Conditions
Super MTS
300 RUR (5 Mb for free, then 9,90 RUR for 1 Mb)
MAXI
New tariff plans
Conditions (phones)
MTS Natana LTE
1200 RUR (10 Gb for free)
500 RUR (70 Mb for free)
MTS Change LTE+TV
1700 RUR (10 Gb for free + 2 days of free TV)
Red Energy
50 Mb for free
ULTRA
2500 RUR (1 Mb for free all Russia)
MTS Llenge Business
2500 RUR (12 Gb for free all Russia)
MTS Tablet MTS Connect-4
400 RUR (100 Mb for free, 1 day of free TV) 1 Mb for 1,5 RUR, or no limits for 30 RUR p/day
New tariff plans
Conditions (USB-modem)
MTS MAXI LTE
1000 RUR (10 Gb for free)
MTS MAXI LTE+TV
1500 RUR (10 Gb for free + 2 days of free TV)
MTS MAXI Business
2200 RUR (12 Gb for free all Russia)
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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$ Promotion
Services Technology
Market
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Retail revenue will increase by 60% in next 5 years
To organize a separate shopwindow of: Promoting LTE services of MTS
Promoting phones providing LTE connection
MTS should develop its own phone range that provides LTE-connection Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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For LTE services promotion MTS should introduce its own smartphone that will create low-cost segment of LTE market
MTS Phone o Dual-core processor with HD support o Operation system – Android o Camera 5 MP o Display: HD, 4 inches o Provides LTEconnection o Price: 6000 RUR
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Flexible sales will help MTS to increase the number of clients up to 7%
Discounts for students & pensioners
Exchange of an old router for a new one for a fee
Special offers for loyal clients
A qualitative approach in services to make our clients happier
Such system will provide:
A step-by-step transition from 3G to LTE in next 5 years Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Our task is to HELP Homer become HAPPIER with LTE connection
3G or LTE?
Surely LTE! LTE should be promoted as a peculiar service Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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$ Promotion
Services Technology
Market
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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The company will build up a successful business on data transfer, implementing 4 steps of monetization
Monetization will be run in 4 steps
Providing 4G for every one by various marketing ways
Retail
Services
$
Technology
Promotion
Services Technology
Competitors
All services are available only for subscribers Cost reduction, traffic channels offloading
New tariff system
Market
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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New business model of MTS development will put the Company on the 1st place on Mobile Internet market by Q4 2017
700
Revenue
19% per year
ARPU,%
600 500
Costs
8.6% per year
400
300
+ 73 bln RUR annually MTS â„–1 in 2017 on the Mobile Internet market Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Road map of initiatives implementation 2013 2014 2015 2016 2017 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Service outsource Northwestern Volga
Cost reduction 50-100 mln RUR Cost reduction 50-70 mln RUR Cost reduction 30-50 mln RUR
Southern & North Caucasus
Cost reduction 30-50 mln RUR
Ural Flexible Data Transmission Management.
Research Pilot
RCS M2M
Instal.
Preparation Prep.
Pilot Moscow
VoLTE Tariff plans Subscription services
NFC
Instal.
Prep. Prep.Pilot Promo
Promotion Promotion
Pilot Msc,SPb
Promotion
Prep.Pilot Promo Prep.Pilot Promo
Prep.
Pilot
Promotion
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Road map of LTE implementation 2013 Moscow and MR
SPB Sochi
Nizhniy Novgorod Volgograd Rostov-na-Donu Samara Kazan Novosibirsk Ekaterinburg Chelaybinsk Omsk Ufa Perm
2014
2015
2016
2017
9,7 bln RUR 18,3 bln RUR 3,2 bln RUR
5,5 bln RUR 11,1 bln RUR 6 bln RUR
4,6 bln RUR 6,6 bln RUR 6,4 bln RUR 6,3 bln RUR 10,7 bln RUR 7,3 bln RUR 9 bln RUR 10,2 bln RUR
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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MTS will cover 18 cities with LTE network by Q4 2017
18 cities 53 mln people 21.2 mln house holders
Final Changellenge Cup Russia 2013 >> English section>>Team SPRING!
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Thanks for your attention! We are pleased to answer your questions