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Smarter Telecom Mr. Prashant Tewari Country Manager, Business Analytics IBM India/SA Welcome and thank you for joining me today to hear more about the.

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Presentation on theme: "Smarter Telecom Mr. Prashant Tewari Country Manager, Business Analytics IBM India/SA Welcome and thank you for joining me today to hear more about the."— Presentation transcript:

1 Smarter Telecom Mr. Prashant Tewari Country Manager, Business Analytics
IBM India/SA Welcome and thank you for joining me today to hear more about the IBM vision for building smarter financial services. The IBM Smarter Planet vision is about the world's infrastructure being leveraged into a collection of intelligent systems… think about it, we’re seeing the expansion of technology change the world in fundamental ways. For the first time in history, almost anything can become digitally aware and interconnected. And we’re continuing to transform these systems and our lives to take advantage of the ongoing technology changes all around us. This presentation looks at the challenges and opportunities for banking and financial services institutions, and outlines some new ways to approach sustainable growth and profitability.

2 The world is smaller and flatter.
The world is connected: economically, socially and technically. The world is smaller and flatter and it’s changing… every citizen, man-made system, organization, city and nation is becoming interconnected. This means new challenges - but also new possibilities for progress. Global integration is making the planet flatter. And through interconnected communications and commerce, it’s becoming smaller. But something else is also going on: organizations and clients are seeing the opportunity to make the planet smarter by linking together systems and automating processes of all kinds. The recent crisis has highlighted just how interconnected and highly complex the global financial system really is. While global integration and product sophistication have had many positive effects, they have also contributed to a number of problems. The world has become a very different place, and our global financial system has failed to keep up the pace. Sophistication in the form of financial engineering has clearly led to many unintended consequences. The government and industry must work together on a renewed financial regulatory architecture … they must also avoid overshooting on the stability side and limiting healthy forms of innovation. In the shadow of wealth destruction, each bank is thinking through … for itself … what it wants to do, what it does not want to do and how to specialize around what clients will value. …and 88% of executives we interviewed worldwide believe that they failed to deliver on their brand promises. And as more and more of the world’s organizations and industries look to capture the potential of a smarter planet – taking advantage of pervasive instrumentation, global interconnection and advanced analytics to become more system-based in their approach – the emerging design point for many of them turns out to be surprisingly simple: the individual, whether as customer, or patient, or traveler, or citizen. Imagine what this industry could do if it applied the same type of rigor to which it innovates products to innovating around the business model and around these basic operating capabilities.

3 The need for progress is clear.
2 billion Over 20% 60-80% People worldwide are not connected either to mobile or fixed telecommunication services. Of subscribers for some European carriers churn within one year, with even higher rates for prepaid customers. Of wireless service providers’ energy consumption comes from powering base stations and mobile switching centers, with only 10-20% coming from powering their data centers. Slide Purpose: To convey that the telecommunications industry still has room for improvement. From a consumer perspective, the industry can improve: 2 billion people don’t have telecom services. Only 20% of the world have internet access, and only 5% of those connected have high speed connectivity. For many, communications services are very expensive. The average cost of broadband (100kbits/sec per month) can be as high as 900% of monthly GNI per capita in low income countries. According to one study, 30% of EU subscribers, do not purchase online due to security and privacy concerns. Telecom service providers themselves can make more progress: Service providers worldwide continue to experience churn. In some European markets postpaid churn is as high as 24%. Prepaid is even higher. In fact, Vodafone reported 48% churn in their prepaid subscriber base in their December 2008 financial reports. In our work with one wireless Indian service provider, we discovered that 60-80% of their energy costs went to the Base stations and Mobile switching centers. Only 10-20% is consumed by data centers. Greenhouse gas emissions from telecommunications networks and handsets will more than double. US fixed voice revenues are expected to decline 8% annually from IT Spending on new digital services, excluding VoIP, may represent 40% to 50% of total current IT spending. IP Traffic is now 95% of total traffic. YouTube alone accounts for 10% of Internet and 20% of HTTP traffic but it is free. As an industry, we need to find ways to make the millions of connected objects relevant and affordable for consumers. We must also begin to address our contributions to the environment – both good and bad. The changing mix of traffic poses far reaching challenges for the industry. And, we need to address some of the problems that have plagued the industry such as decline in ARPU, churn and high cost to deliver new services. The need for progress is indeed clear.

4 The opportunity for progress is clear.
From 6 to 88 million subscribers in 4 years 50% increase in ability to predict churn Reduce energy costs 20-30% Growth in Lower-Income Country Customer Retention Cellular Tower Management Bharti Airtel transformed the way India communicates by extending mobile and multimedia communications to all sectors of the community – adding 1.5 million subscribers per month! IBM’s research team is helping telecom operators measure its impact on customer churn ….helping them improve their ability to predict those customers likely to churn by 50%. Many IBM clients are leveraging technology to reduce operational costs, while becoming “greener” by monitoring & proactively managing power consumption at base stations and mobile switching centers……thus reducing energy costs by 80-90%. Slide Purpose: To introduce and illustrate the concept of smarter planet and smarter telecommunications systems. How can we proceed on the path to a smarter planet? With so much technology and telecommunications capabilities abundantly available, what wouldn't you put smart technology into? What services wouldn’t you provide ? What wouldn't you connect? What information wouldn't you mine for insight? Forward thinking Telcos are doing such things. Telecommunications service providers around the world are undertaking transformations to address the need for change… they will do what they CAN. But the even more compelling reason we must all begin to transform our systems, operations, enterprises and personal lives to take advantage of a smarter world isn’t just because we can. It’s because we MUST. References: Bharti: Churn Prediction: Based on several projects from the Telecom Research Labs. Energy costs: Based on proprietary work with Indian wireless service provider and projects with other service providers. NOTE: For more details on each of these engagements, see speaker notes for slides

5 Today’s Telecom environment is shaped by four drivers and four inhibitors.
Financial Constraints: Limited access to capital Leapfroggin g Effect: Lack of readily available technologie s & resources Complex Processes: with growth in subscriber base & markets Regulation: can potentially stifle growth DRIVERS Growth Opportuniti es: New services, expansion of outreach, new devices & technologie s Competitio n: Global & local – requiring rapid responses to market dynamics Customer Retention: Customer experience strategies Operational Performanc e: Cost reduction, operational efficiency and asset monetizatio n Slide Purpose: For growth markets, highlight what drives the Telco industry, but also what obstacles inhibit the ability to change. This slide is self explanatory. Many of these inhibitors and drivers are not new. However, here are a few notes to highlight: Growth continues, but at a slower pace. The economic environment is having an impact on growth markets, particularly in the ability to investment Growth market operators have the opportunity to avoid the headaches of entrenched processes and legacy infrastructure; however, they may lack the expertise and technologies to capitalize. Retention in growth markets is primarily focused on prepaid subscribers. Some further statistics that point to trends: IT Spending on New Services: IT spending for new digital services, excluding VoIP, may represent 40% to 50% of total current IT spending. Fixed Voice Revenues: US PTSN revenues are expected to decline 8% annually from OSS/BSS Spend: OSS/BSS spending ratios in support of IPTV bundles combined with spending on service deliver may represent 15% of service-specific revenue….2 to 3 times more than for legacy services. Churn: Some Western European countries continue to experience annual overall churn rate as high as 24%. Video over IP: “Telco operator are understandably worried that OTT providers will end up capturing all the value that video over IP promises without the commensurate heavy investments, relegating broadband network operators to the role of simply providing the proverbial dumb pipe.” Innovations: YouTube alone accounts for 10% of Internet and 20% of HTTP traffic but it is free.

6 This mandate for change is a mandate for smart.
To set the leadership agenda, telecommunications service providers must develop a new ecosystem. They are doing so by becoming Instrumented, Interconnected and Intelligent + + = An opportunity for telecommunications service providers to think and act in new ways. Slide Purpose: To summarize the argument made so far in the presentation. To summarize, our world has changed. The telecommunications industry must take a leadership role now to position for the future. And successful change depends on smarter telecommunications systems. The world is at critical inflection point. The crisis in the financial markets has awakened us to the realities and dangers of our highly complex global system. Now, collaboration and transformation leadership within the Telco industry between partners, governments, businesses is a necessity. It is key to our economic recovery in mature markets, growth in emerging markets and ultimately benefits the everyone. This mandate for change is a mandate for smart.

Smarter Telecom providers are transforming business models, operations & customer experiences by…. DIFFERENTIATE THE CUSTOMER EXPERIENCE Launch new innovative services quickly, using real-time analytics to gain deep customer insights and personalize offerings; Monetizing customer data and assets, improving security, and modernizing customer systems to increase revenue and reduce churn. ENABLING NEW BUSINESS MODELS Leverage the continued convergence of telecom, media and Internet to strengthen core businesses, improve competitive position and generate new revenues faster. TELECOM IMPROVE OPERATIONAL EFFICIENCIES Reduce infrastructure and process complexity to improve profitability, reduce costs, manage fund innovation, enable expansion into new markets, and support critical network and business transformation initiatives.

DIFFERENTIATE THE CUSTOMER EXPERIENCE ENABLING NEW BUSINESS MODELS IMPROVE OPERATIONAL EFFICIENCIES SMART is…. Altering traditional business models to extend beyond telecommunications into new business sectors Consolidating or offloading procurement and other supply chain operations and management in order to reinvest the savings into innovation Undertaking a strategic transformation initiative to concentrate on creating value and managing organizational change. Slide Purpose: This is the first of 3 sets of slides that drills into the 3 imperatives. Each set establishes “Smart Is” statements, followed by customer examples of smart telecom systems. This particular slide introduces Smart Is statements for enabling new business models. These Smart Is statements provide a flavor of the kinds of activities our customers are actually doing to enable new business models as well as some of the work we are conducting in our research facilities worldwide.

9 Smarter Telecom: Enable new business models
Telstra: Outsourced its procurement processes and leveraged IBM to achieve greater control, visibility, responsiveness and internal compliance while saving AU$355M over two years. Maxis: Launched a transformation initiative to improve key initiatives such as CRM, business intelligence, convergent billing, sales dealership etc to allow the operator to focus energies on managing the business aspects of change. Slide Purpose: To highlight customers of ours who are applying the concept of Smart Telecommunications Systems to their business. These customers are applying smart telecommunications systems to enable new business models. Many of our customers are rethinking their own business model, particularly the strategic outsourcing approach, where the service provider outsources any number of functional areas to IBM. This allows them to plow the saved money into innovations and to extend their services beyond the typical Telco into retail, banking and other areas. Other customers are forming new kinds of partnerships to help them compete in their markets. REFERENCES Bharti: Maxis: See press release. Telstra: Bharti Engagement Summary Bharti Airtel entered into a comprehensive 10-year agreement with IBM to transform its processes and take on the management of its IT infrastructure. Its new platform provides a standardized framework for Bharti Airtel to integrate its channels and customer-facing processes–enabling a more seamless customer experience, higher customer satisfaction and more profitable growth. Working as its outsourcing partner, IBM has helped Bharti, India’s largest private sector service provider, achieve the following benefits: Grow from 6 to 78M subscribers (as of Sept 08) Process 1.5 million new customers per month Achieve US$4.2B in annual revenues and 25% market share Improve cross-selling and targeting and a more seamless, efficient total customer experience through end-to-end integration of customer-facing processes Optimize business processes and infrastructure through flexible, standardized integration framework Outsource technology to enable Bharti Airtel to focus resources on growing the business Provide a flexible pricing model to help Bharti Airtel avoid major increases in capital expenditures Position Bharti to become known as a “lifestyle enabler” The success of this partnership has resulted in growth for both IBM and Bharti: Mar. 2004: Signed a large outsourcing contract - TCV $746M - for consolidation, transformation, and management of Bharti’s IT infrastructure and applications Dec. 2005: The above TCV went up to ~ $1.2B due to subscriber projection as a result of IBM’s risk/reward deal structure with Bharti. By the end of 2005, the number of subscribers went up from 47M (original commitment in the contract) to 157M Jun. 2006: Signed a $180M Service Delivery Platform contract. Service Delivery platform, based on our open Industry Framework SPDE (Service Provider Delivery Environment), allowed Bharti to encourage 3rd parties to develop applications and roll out new services to the market place cost efficiently and in a timely manner 1Q 2007: $12M for Network Optimization Contract 4Q 2007: $182M for IPTV contract 3Q 2008: $28M (2 contracts) for Data Center Optimization Dec. 2008: The TCV increase was approximately $60M due subscriber projection -- went up from 157M (original commitment) to 257M 4Q 2008: $15M relates to a contract signed by Bharti Retail and Wal-Mart, their partner on the retail side. IBM's contract is related to outsourcing of IT for their back-office operations Maxis Summary Maxis is the leading Malaysian operator with 24 million subscribers. Their strategic goal is to propel themselves to the next threshold, capitalizing on new services that bring value to their customers and extending their business into new markets. To that end, the operator has asked IBM to support a strategic partnership to transform key parts of their business over the next 5 years. This is a very large engagement covers a complete transformation of: Customer Relationship Management Business Intelligence Service Delivery Platform Inventory Management Dealer Sales Management Service Oriented Architecture Implementation Convergent Billing Drilling into plans for CRM Transformation, for example, the IBM solution: Integrates multiple views of the customer into one 306 degree view from billing systems, demographic data, customer care history and more Establishes a unified customer experience across customer touch points such as web, customer care, retail, etc. Provides a common platform for both post and pre-paid customers Consolidates all product offerings into one catalog with consistent pricing Enables a customer care representative to automatically service and up-sell/cross-sell the customer on the same call as well as actually execute the up-sell/cross-sell activity. Enables analysis of campaign effectiveness Offers better product bundles quickly due to standardizing back end operations Provides faster access to information and performance feedback for senior decision makers Includes an intuitive GUI and Custom dashboard to help executives quickly comprehend the KPIs Automates the initiation and follow up on corrective actions based on thresholds For business intelligence, the solution provides: Customer trend analysis on customer usage, recharges and value-added services Product take-up analysis to identify the products that are popular in specific service area, segment of the population. Product bundling analysis to identify the bundling appropriate product together in order to improve sales and increase per customer revenue. Advanced Customer Analytics. Integrating Customer Segmentation, Data Mining, Online Analytical Processing (OLAP) (where the user can slice/dice and drill down) These are only a fraction of the benefits Maxis will receive from their CRM and Business Intelligence and from the other areas of transformation listed above. From a consumer perspective, the work at Maxis will: Improve the quality of Maxis’ response to each customer Offer customers new services more quickly than the competition Lower the cost of advanced services for subscribers Enable a mobile lifestyle Telstra Summary

DIFFERENTIATE THE CUSTOMER EXPERIENCE ENABLING NEW BUSINESS MODELS IMPROVE OPERATIONAL EFFICIENCIES SMART is…. Capitalizing on social networking business analytics to predict subscribers likely to churn as a key part of their retention strategy Analyzing real-time data from the network to identify new revenue opportunities based on a customer’s actual experience Slide Purpose: To convey Smart Is statements covering what some of our customers are doing today, research from our lab, and provocative statements for future opportunities in the area of differentiating the customer experience.

11 Smarter Telecom: Differentiating the customer experience
South African Operator: Using churn management to improve their capability to predict customers churn, by 50%, based on their social network calling patterns. Armed with this information, the operator can launch retention strategies to keep each customer. US Service Provider: Is deploying trials of a customer experience management solution that analyzes usage data generated from the network to assess the subscriber’s actual experience. In one day’s data for 6 million subscribers, the wireless operator uncovered an estimated $4.8 - $7.2M worth of untapped annualized revenue for customers who were unable to access and use the operator’s data network. Slide Purpose: To highlight customers of ours who are applying the concept of Smart Telecommunications Systems to their business. These customers are applying smart telecommunications systems to differentiate their customers’ experiences. Many of our customers are using social networking advancements to better target customers and identify churn candidates. Others are deploying customer experience management systems to leverage network data about the actual customer’s experience and using that to set network priorities and arm customer care reps with better information. Still other service providers are implementing systems that help identify SLA violations and reduce the time to fix network issues – all resulting in a better customer experience. Further, SDP and Smart SOA have been deployed to reduce the cost of launching new services to the market…as well as cutting time-to-market with new services that address customer needs. References African Service Provider: We are in the process of getting a press release approved for this customer. China Telecom – not yet in CRDB, but referenced in SPDE launch materials. US Service Provider: Not allowed to use customer name at this time. South African Service Provider Summary Using software analytics and algorithms developed by IBM Research (Haifa, Israel lab), this operator as part of an ongoing trial, discovered that who a customer is calling is proving to be a reliable predictor of whether and how seriously customers will consider jumping to a competitor. The company found IBM’s new business intelligence analytics are approximately 50% more accurate and timely than previous techniques used to predict churn. Traditional churn methods depend on large warehouses that contain static and “old” data such as billing records or historical calls to customer care. The new IBM solution perceives calling patterns from Call Detail Records – the actual record that is generated when a call occurs. Not only is the information collected in real-time, the IBM solution also handles the nearly 250 million CDRs the network generates in a day. IBM research found that the customers’ network of friends -- some of which subscribe to the services of other telcos -- dramatically influences the enrollment decisions of its own customers. Privacy is preserved by identifying social network patterns based on which number called which other number, and does not record specific conversations. The end result is an increase in the service provider’s ability to predict who turnover. Armed with this new information, the operator can implement strategies to keep that subscriber – perhaps providing a discount or new bundle that better caters to the customers needs. China Telecom Summary China Telecom, the largest fixed line operator in China, had product development problems. Little interaction with their customers led to new services that were technology-based, not market-driven, and did not meet customers’ demands. To build a lasting innovation mechanism, China Telecom launched a 6-month contest that opened up their product development process to their employees, partners, and even customers. They leveraged IBM’s SPDE framework and Idea Factory to identify 576 new product ideas and “productize” 27 new services. Without IBM’s solution, China Telecom would have produced only 259 new ideas, and brought to market only 3 new services. The contest brought in 554 users with the first idea published 10 minutes after launch. Similar to IBM’s own InnovationJam, China Telecom company set up an online collaborative innovation environment with secure content management that exploited IBM’s social network, search and portal solutions, including an IT resources deployment platform and IT/Telecom service catalog. The environment was used to brainstorm ideas, open discussion forums, and write blogs. IBM spearheaded the establishment of an online product innovation and experience centers that included a consumer study lab, interactive customer rooms, and new product show case for collaboration. IBM solution helped analyze entries, conduct online voting, and enable the entire value chain to trial new products. The end result is twofold: 122% increase in new ideas and 800% improvement in new services brought to market; and an enduring product development environment that strengthens the value chain of China Telecom and their partners, employees and customers. US Service Provider Service providers today typically turnover 15-25% of their customer base annually. The service provider wanted to understand their customer’s wireless experience at a new level of granularity in order to reduce churn. To do so, the operator conducted a proof of concept using real-time data from 6 million subscribers. IBM’s customer experience solution was able to identify that an astonishing 400,000 of wireless customers in one 24-hour period could not access the wireless data network. That means they could not download a ring-tone, visit a website, or send a short message – an estimated $4.8 to $7.2M of lost revenue for the service provider. The operator was further surprised to learn that many of these customers were denied network access, not because of network problems, but because they had not purchased the right to use data services in their service plan. IBM’s solution is integrated with probes that are deployed in the network to collect real-time information relating to each customer’s experience with the network. The IBM solution runs on IBM hardware and Tivoli software to analyze and correlate the network information, and through business intelligence software, report the findings to executives, customer care, marketing/offering teams and key account teams responsible for the customer satisfaction of large enterprise accounts. Pre-trial planning and post-PoC impact assessments could be enriched with further consulting services to integrate into the CRM and fulfillment systems, and IBM’s real-time campaign management solution. The service provider has never had this kind of insight into how each customer is experiencing their service. This is invaluable information, as these are customers who do not need to be motivated to “try” mobile data services. With this new intelligence, the operator could: Up-sell mobile data services to these customers for additional revenue Notify customer care of the problems with the data service before the customer calls Encourage more usage of data services (and more revenue) through targeted offers Reduce customer dissatisfaction when subscribers cannot access the data network.

DIFFERENTIATE THE CUSTOMER EXPERIENCE ENABLING NEW BUSINESS MODELS IMPROVE OPERATIONAL EFFICIENCIES SMART is…. Utilizing industry standards to improve underlying operational processes, save money, and speed time to market Applying service management systems and processes in new ways to reduce operating expense and increase efficiencies in high- cost areas Slide Purpose: To convey Smart Is statements covering what some of our customers are doing today, research from our lab, and provocative statements for future opportunities in the area of improving operational efficiencies.

13 Smart Telecom: Improve operational efficiencies
T-Com Croatia: Is redesigning its core business processes from the bottom-up and creating a roadmap to process optimization based on eTOM standards and best practices. SE Asian Service Provider: Is using service and asset management from IBM to manage their tower energy consumption, resulting in 20-30% reduction in power usage and lower operating costs. Slide Purpose: To highlight customers of ours who are applying the concept of Smart Telecommunications Systems to their business. These customers are applying smart telecommunications systems to improve operational efficiencies. We are working with many customers to simplify and streamline their very complicated OSS and BSS processes. The Tivoli Service Assurance portfolio has helped innumerable customers improve their network operations, including reducing faults to the critical few, helping them manage the performance of the network, and monitoring SLAs to avoid costly non-compliance. REFERENCES T-Com Croatia. 7ANMEA?OpenDocument&Site=corp&cty=en_us. Vodafone. Not in CRDB, but publicly shared information. See below as approved by customer. SE Asian Service Provider: This project has not yet completed. When finished, we will pursue a press release and case study. T-Com Croatia Summary T-Com Croatia exemplifies how IBM helped this Croatia’s largest wireline operator apply the concept of Smarter Work. Like many other countries in Easter Europe, T-Com Croatia is experiencing increased demand for broadband services as the population becomes more and more sophisticated Internet users. T-Com Croatia, however, realized that its legacy processes were obstacles to capitalizing on the growth in the DSL broadband market. Offering DSL requires a complex set of processes across demand planning, network planning, order management and – because DSL uses modems – inventory and supply chain management. IBM conducted a thorough process analysis and uncovered many business process breakdowns, which led to customer dissatisfaction. For example, the company deployed DSL in areas with low demand and not in high demand regions; they often experienced modem shortages; the wrong modems were delivered, and more. Process flaws meant the wait for DSL service could be weeks and months. Our unique value was our ability to apply the industry standard enhanced Telecom Operations Map (eTOM) to model the end-to-end process flow for DSL delivery. We brought a full suite of models, methods, guides, tools and techniques to “operationalize” this industry standard which resulted in business results. Our work was so innovative that the TeleManagement Forum, the governing telecommunications standards organization and author of the eTOM framework, publicly recognized IBM’s work on this project. Business benefits achieved include: Increased revenue by deploying DSL in the appropriate growth regions. Faster time to money by shortening delivery times with a streamlined quote-to-service process Increased customer satisfaction and retention Improved competitive position Vodafone Summary In order to transform the company and deliver scale advantages, the company launches ‘One Vodafone’ (from federation to group). The move formed part of Vodafone’s strategic commitment to reduce costs while leveraging its regional scale. Through this engagement, Vodafone has been able to demonstrate to the market benefits of scale, cost reduction and efficiency gains, and drive additional revenue growth. Goals of the engagement with IBM: Drive operational excellence with a balanced view of cost savings, operational risk and business benefits. Enable Vodafone retained function to focus on strategic IT elements, such as strategy and architecture. Implement consistent AD&M (application development and maintenance) processes, enable enterprise architecture and standards, enhance flexibility, and lay the foundation for future rationalization. Leverage the best of Vodafone, IBM and existing providers. Recognize the different OpCo markets and requirements, particularly the need for agility and rapid response. Key aspects of the engagement: One of the largest application services deal signed by IBM. IBM took over the responsibility for application development and maintenance of Vodafone’s various operating companies in Australia, Czech, Greece, Italy, New Zealand, Portugal, Spain, and Ireland. Additional large opportunities included extension of AMS outsourcing (Turkey and Romania), back-office transformation, infrastructure outsourcing and managed services. This engagement continues to deliver value across three levers: a) cost reduction, b) revenue growth, and c) improvement in quality – 25% to 30% in unit cost savings in 2-4 years. While the characteristics of the AD&M engagement remained the same across the growth and major markets, a recent contract with Vodafone Essar in India was tailored for a high growth emerging market – an innovate risk / reward model. Vodafone Essar contract represented a full outsourcing of IT applications, infrastructure, and cross-functional towers. Within twelve months of signing the contract, IBM helped Vodafone Essar to grow its subscriber base from 38M to 61M – a whopping 61% growth. Value Creation Center (VCC): IBM also established a Value Creation Centre (VCC) with Vodafone to leverage industry knowledge by providing access to IBM resources from the Telco community and extended cross industry teams. IBM is investing $10M over the course of the AD&M contract (7 years.) The VCC has allowed us to develop cutting-edge technologies / applications for Vodafone. We recently delivered a new application through VCC called the ‘Vodafone Connect to Friends’. Other areas of experimentation include machine to machine communications and legacy presence. SE Asian Service Provider Summary Cell towers can consume as much as 60-90% of a wireless service provider’s energy usage, compared to 10-20% for data centers. By collecting real-time data from sensors deployed at the cell tower site, managing energy usage, and automating processes, service providers can reduce their energy utilization and operational costs by 20-30%. IBM’s mobile tower operations management solution delivers these benefits through GTS, GBS, IBM hardware for the central systems, and IBM software including Maximo, Netcool, WebSphere, Data Power and Rational. This solution will transform mobile passive infrastructure as today, no wireless service provider monitors and manages cell tower operations and energy usage end-to-end. Sensors are attached to each asset, which is tracked from procurement through deployment. Performance service level thresholds are set for each asset. Sensors collect environmental data, such as temperature, battery life, diesel level, power level fluctuations, door alarms, and any interruptions to cell tower operation. This information is passed to IBM systems that leverage built-in intelligence to correlate and process the data against the business objectives. Alarms are raised when the rules engine determines a pre-set threshold has been breached. The system automatically generates a trouble ticket, and sends an alert to the proper field staff to fix the problem. The system expects a response within a certain period of time, and if the appropriate response is not forthcoming, escalation of the alarm ensues. When the problem at the tower is fixed, a short message is sent to the system and the trouble ticket is automatically closed. Further intelligence is built into the system to look for fraud, determine abnormal spikes in power usage, analyze trends for energy efficiencies, and replicate those configurations with the best energy profiles. End users of the mobile service benefit by: lower energy and operational costs that can translate into cheaper wireless service; improved availability and reliability of the cell tower resulting in better quality of service; and last, cell tower management is one area where service providers can implement a “green” strategy that benefits us all.

14 Why must telecommunications service providers in growth markets take action now?
Old challenges are accelerated by the economic instability, and traditional solutions will not be sufficient to address them. Slower revenue growth and eroding ARPU (average revenue per unit) Slow time-to-marketof new services Inability to target new servicesto specific customers’ needs Access to capital to fund growth Investment decisions on infrastructure and processes critical to future growth Regulatory constraints A smarter planet offers the opportunity to solve problems in new ways. Capitalize on subscriber growth to increase market share Take advantage of economic stimulus and “economic zones” Leapfrog mature markets, who are burdened with legacy infrastructure and processes, to build advanced, standards-based broadband and wireless technologies into core infrastructure Growth markets Slide Purpose: To explain how the current economic environment is the catalyst for change in the telecommunications industry - now. Earlier in this presentation, we reviewed the drivers and inhibitors in the Telco market. The left side of this slide highlights key challenges faced by mature and growth markets. These challenges are not vastly different from those encountered a year or two ago. What is different today is the new economic environment in which we operate. The downturn has made each of these challenges more acute. ARPU and revenue in mature markets are under even more pressure. Growth in emerging markets is slowing. Capital is harder to come by worldwide. And so on. Traditional responses (managing costs) will not be enough. IBM conducted a recent analysis of S&P 500 top stock performers in Those companies whose stock grew an average or 24% year over year (and beat other S&P stocks by an additional 40%) demonstrated 3 behaviors: They focused on value, exploited opportunities, and acted with immediacy. <Source: Google Finance, IBM S&C analysis, Performance period is 12/27/07 to 12/18/08>. This economic downturn represents an opportunity for telecommunications service providers to behave like those successful S&P 500 companies – and use this new environment to position themselves to succeed now and well into the future. This slide identifies some of the phenomenal opportunities before the mature and growth markets because of this new economic environment. -Governments have identified telecommunications systems as key to boosting economies. Investments are being made to upgrade infrastructure, systems and processes. In fact, emerging markets will leapfrog mature countries in terms of telecommunications infrastructure, making broadband and wireless part of the core infrastructure build out. Time is of the essence for telecom service providers to participate. --Despite tough economic conditions, telecommunications services are still in demand. Service providers must identify these growth markets, increase their ability to respond quickly, and maintain a cost structure that allows them to capitalize on the immediate opportunities worldwide When discretionary income is scarce, customers expect more value. They can and will churn to a provider that offers more relevant, affordable, flexible services backed by better customer service. Consumers are also buying differently, forming new kinds of communities, and adopting communications services that bypass the traditional Telco. --Heated competition continues within markets, but new over-the-top competitors and emerging global service providers are additional threats. Survival means innovative services, radical approaches to cost reduction, new business models, new partners and types of partners are all imperative to viability. The best way to capitalize on this window of opportunity is to implement smarter telecom systems that address the 3 imperatives previously outlined in this presentation.

15 Topics we will cover today…….
IBM Telecom Frameworks: Bridging the gap between business & IT Data Management for Telecom Networks: Fault and Performance Management Effective Software Delivery for Telecom Access the information you need - anytime, anywhere Optimizing Business Processes using Filenet BPM Customer Churn & Insight for Telecommunications Dynamic Business Process Management for CSPs DIFFERENTIATE THE CUSTOMER EXPERIENCE ENABLING NEW BUSINESS MODELS IMPROVE OPERATIONAL EFFICIENCIES

16 Thank you

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