Region II Market Share

AGENDA
Coverage
Fixed-Mobile Convergence Strategy
Launch Offers
Region II Market Share
Brasil Telecom GSM Forecasts
AGENDA
Coverage
Fixed-Mobile Convergence Strategy
Launch Offers
Region II Market Share
Brasil Telecom GSM Forecasts
Coverage
BrT GSM chose the GSM technology
because it is the most modern in the
market
More than 600 localities will be
covered in 2004, besides the main
highways, serving more than 30
million people (82% of the total) in its
operating area
Coverage
Network infra-structure:
More than 1,700 sites at the launch
Largest GSM coverage in the Region by the end of 2004
Main partners: Alcatel and Ericsson
AGENDA
Coverage
Fixed-Mobile Convergence Strategy
Launch Offers
Region II Market Share
Brasil Telecom GSM Forecasts
Fixed-Mobile Convergence
Brasil Telecom GSM is, from its inception, already integrated to Brasil Telecom wireline
business, benefiting from the existing structure.
Brasil Telecom is part of the FMCA
(Fixed Mobile Convergence
Alliance), which has the objective
of promoting the development of
the fixed-mobile strategy globally
and interacting with suppliers in
order to develop new solutions.
Partners: British Telecom (BT),
Rogers wireless, NTT
Communications, Korea Telecom
(KT), CEGETEL and Swisscom.
The integration of telecommunications services can
occur at three different levels
Integration levels
m
Co
i
ex
pl
ty
Integrated transmission
Integrated switching platforms
Common Operating Support Systems
s
se
a
e
cr
in
Integrated IN platforms
Single handset (wireline
(wireline and wireless)
Integrated services:
• Single telephone number
Handsets and services
Packages and bundles
Single bill
One stop shop
Commercial integration
Integration level solely commercial, i.e.
integrated sales and customer care
Integration level sharing services with
existing infra-structure
In many cases it happens through
partnerships between different
operators
Handset integration (fixed and mobile)
Service integration based in an intelligent
network platform, which allows for the
delivery of a package of common services
(e.g. solutions of personal numbers, home
zone services, mobile VPN and mobile
Centrex)
Main goals are convenience (one-stopshop), a single bill and the possibility of
discounts
Business units relatively independent
Commercial
Network integration
Handsets and services integration
Business units with increased need of unified
management
Network
Full integration level of transmission
systems, switching platforms and
network elements, with full integration of
systems to support the operation
Integration of systems and infrastructures is clearly easier for start-ups
that foresee integration, and not for
operators with existing equipment
Final objective of a full integration of
platforms will be reached in the
transmission of switched networks to IP
networks
The Only One to Have – “A Única que tem”
Brasil Telecom GSM is The Only
One to Have Fixed-Mobile
convergence in Brazil
All of the completely new,
singular and exclusive services
can be easily identified by our
consumers by the Stamp: The
Only One to Have
AGENDA
Coverage
Fixed-Mobile Convergence Strategy
Launch Offers
Region II Market Share
Brasil Telecom GSM Forecasts
• Mobile to mobile
intra network
• Mobile to fixed Brt
Choice
of
14
phone numbers to
call at reduced
rates (fixed and
mobile accesses
of BrT)
Free additional
pulses in a fixedline phone of the
Brasil Telecom
GSM customer´s
choice
Bonus Every Month
Use in public
phones, fixedline and mobile
phones
Bumerang 14
Use of CSC 14
warrants
free
minutes
for
local calls:
Unique
Prepaid phone
card
Friends at All Times
Synergic Products and Services
VU-M (Promotion)
Reduced rates for calls originated from fixed-line phones to BrT GSM mobiles
Fixed-Mobile Convergence (Prepaid card/
payphones / DLD / local Calls)
The "ÚNICO“ prepaid card from
Brasil Telecom GSM is exclusive in
the market because it allows
unrestricted use of credits in mobile
phones, fixed-lines and payphones.
The format is also innovative. Brasil
Telecom GSM’s card is the only one
in the market with a round shape and
the only one to offer SMS bonus for
all face values.
Convergent prepaid: Fixed + GSM + Public phones
“Único” (Unique)
Use
R$ 0 to 30.00
R$ 30.00
Buy
R$ 30.00
Virtual
Credits
R$ 30.00
Service
0800
Use
R$ 0 to 30.00
• •By
Bydialing
dialingaatoll
tollfree
freenumber
number(0800),
(0800),BrT
BrTGSM
GSMclients
clientsare
areable
ableto
tocomplete
completecalls
calls
from
fromthe
thewireline
wirelinenetwork
network
• •The
Thetotal
totalbalance
balanceof
ofcredits
creditscan
canbe
befreely
freelyused
usedininany
anyof
ofthe
theaccesses
accesses
(fixed/mobile/pay
(fixed/mobile/payphones)
phones)
Mobile – DLD Convergence
“Bumerang 14”
All the minutes of long
distance calls originated from
BrT GSM’s mobiles made with
the CSC 14 are given back as
bonus in free local calls to any
phone of Brasil Telecom,
fixed-line or mobile.
Fixed-Mobile Convergence (Reduced
VU-M and “Bonus Every Month”)
Every client that buys a BrT
GSM mobile can choose a BrT
fixed-line phone to be credited
free minutes every month, to
be used in local calls to any
other fixed-line phone. Each
mobile can credit only one
fixed-line number, but a fixedline number can be credited by
different mobiles.
Fixed-Mobile Convergence (Reduced
VU-M and “Bonus Every Month”)
The fixed-line clients will pay
less whenever they call Brasil
Telecom GSM mobiles. Fixed
to mobile calls made to
mobiles from other wireless
operators will cost at least
60% more.
“Friends at All Times”
The customer will be able to
choose 14 friends to call with
a reduced rate of only R$ 0.10
(without taxes), at any time of
the day or night, including
fixed-line and mobile phones
of Brasil Telecom (both in the
same local area, the same area
code of the mobile phone).
Promotion: “Fale por menos” (Talk for less)
Today a local call from a Brasil
66%
66%more
more
expensive
expensive
Telecom fixed terminal to another
operators’ mobile phone costs
approximately R$ 0.678*
Brasil
Telecom
fixed
terminal
Operator A
A local call from a Brasil Telecom
fixed terminal to a Brasil Telecom
GSM mobile phone will cost
approximately R$ 0.4068*
Pay
Payless
less
calling
Brasil
calling Brasil
Telecom
TelecomGSM!
GSM!
The
Thecost
costof
ofaalocal
localcall
callfrom
fromaaBrasil
BrasilTelecom
Telecomfixed
fixedterminal
terminalto
toanother
another
operators’
mobile
phone
will
remain
at
least
60%
more
expensive.
operators’ mobile phone will remain at least 60% more expensive.
* Reference DF – regular time
Pay Less - Elasticity
Clients=0.0605344+0.0491557Discount
-0.0012139 Dscount**2+0.0000103Discount**3
S=0.0365898 R-Sq=93.2% R-Sq(adj)=89.1%
• •The
Thegraph
graphshows
showsthe
theresults
resultsof
of
60
the
theresearch
researchabout
aboutthe
thereduction
reduction
of
offixed-mobile
fixed-mobiletariff
tariffattractiveness
attractiveness
Clients
• • From
From30%
30%onwards
onwardsthe
the
difference
differencebecomes
becomessignificant
significantfor
for
more
morethan
than70%
70%of
ofclients.
clients.
• •Brasil
BrasilTelecom
TelecomGSM
GSMwill
willoffer
offeratat
least
least60%
60%to
toits
itsclients.
clients.
Discount (%)
Initial Blow
Pula-Pula
Prepaid
The minutes received
by prepaid clients turn
into credits for use in
the next month.
Post-paid
Pula-Pula
For each monthly bill
paid, the client receives
the value back as
credits for use in the
next month.
Pula Pula
1st
mo
nth
2nd
mon
th
3rd
mon
th
4th
mon
th
5th
mon
th
4th
mon
th
TOT
AL
Value of Bill
100
120
80
70
130
140
Credits Earned
-
100
-
80
-
130
Value Paid
100
20
80
-
130
10
340
Savings
-
100
-
70
-
130
300
640
Mobile Banking
+
Banco do Brasil
SALDO
23/04/04-14:00
RS 1.200,00
Voltar
=
Sair
Banking transactions through BRASIL CHIP, including:
Checking account balances and transactions;
Payment of utilities bills (energy, water, phone, etc...);
Collection payment;
Value Transfers;
Value transfers to prepaid phone cards;
Sale of credits for prepaid phones;
Contract with Banco do Brasil and other seven
financial institutions (confidentiality)
Value Added Services
Services
Communication
Entertainment
Customization
Multimedia
Torpedo
Torpedo Chat
Sounds
Multimedia Torpedo
Mail Box
Torpedo Web
Games
Wall paper
Album
Caller ID
m-Encontra
Portal de Voz
Screen Saver
Multimedia Card
Call Forwarding
Messenger
Quiz
Conference
Wap
Sr da Guerra
Call waiting
tc :)
News
E-mail
GPRS
Banking
Value Added Services
Partnerships
Multimedia
Entertainment
Services
Communication
Banking
Customization
AGENDA
Coverage
Fixed-Mobile Convergence Strategy
Launch Offerings
Region II Market Share
Brasil Telecom GSM Forecasts
Region II Market Evolution
Region II Market Share
Operator
2003
MKT Share
total
Penetration %
Population
1Q04
Subscribers
MKT Share
2Q04
Subscribers
MKT Share
aug/04
Subscribers
MKT Share
Subscribers
57.9%
7,525
57.7%
8,060
56.8%
8,841
55.6%
9,205
21.0%
2,726
20.0%
2,788
20.5%
3,190
21.6%
3,576
20.4%
2,656
21.5%
2,999
21.9%
3,414
22.1%
3,654
0.2%
23
0.2%
25
0.2%
26
0.2%
28
0.6%
74
0.5%
74
0.5%
74
0.4%
74
0.1%
15
0.1%
18
0.1%
19
100%
13,004
31.2%
41,627
* Subscribers and population (thousands)
100%
13,961
33.1%
42,196
100%
15,564
36.9%
42,199
100%
16,556
39.2%
42,199
AGENDA
Coverage
Fixed-Mobile Convergence Strategy
Launch Offers
Region II Market Share
Brasil Telecom GSM Forecasts
Number of Mobile Accesses
Region II reaches 22 million mobile accesses in 2006
(thousands)
2004
Mobile Accesses
in Region II
2005
18,212
2006
20,946
22,011
Penetration Rate in
Region II
43%
48%
50%
Market Growth
40%
15%
5%
24,000
20,946
22,000
20,000
22,011
50%
18,212
48%
18,000
50%
48%
46%
44%
16,000
14,000
52%
42%
43%
12,000
40%
10,000
38%
2004
2005
Mobile Accesses in Region II
2006
Penetration Rate in Region II
Brasil Telecom GSM Forecasts
(thousands)
2004
2005
Client Base
500
1.700
Pre-Paid Sales Mix
75%
77%
Sales Share
6%
21%
Market Share
3%
8%
Real Time Loyalty
Pula–Pula
Convergence
Unique card
Bumerang 14
Friends at All
Times
Bonus Every
Month
Talk for Less
Client Loyalty
Lower Churn
Brasil Telecom
will have reduced
churn when
compared to other
wireless
operators.
Higher NPV
The higher retention
of customers in our
client base reduces
the impact of
acquisition costs and
client maintenance,
which in turn yields
an increase in NPV of
up to 25%.