Achieving Cost-Effective And Successful Communication With Your Customers

Achieving Cost-Effective And Successful Communication With Your Customers Thomas Rößler, 27 th September 2004 O 2 Germany Gmb. H & Co. OHG

Content n The company O 2 Germany n Determining how to successfully communicate and distribute prepaid services to your target market. n Leveraging your communications channels to maximise service usage and attract higher spending customers. n Examining how to market additional services at the point at which customers access their account details and recharge their accounts n Targeted products, services and promotions. n Exploiting new segmentation and profiling data to ensure that you are communicating the right services to the right customers individually.

The Company O 2 Germany 1 Company Profile Mobile Network Customer Numbers O 2 Germany Sales & International Communications With O 2 Market Share Germany & ARPU Employees

Company Profile n O 2 Germany (formerly VIAG Interkom) is a subsidiary of mm. O 2 plc. n Network operator owning its own mobile telephone network. n Innovative postpaid and prepaid products, mobile data services. n More than 6. 3 million customers (more than 2. 6 million prepaid customers) since June 2004 in Germany. n Strengths of O 2 Germany: one of the leading innovators in mobile data services, exceptional service O 2 Genion Homezone, almost total mobile phone coverage via O 2 Germany’s mobile network and national roaming through the D 1 network, established sales channels. n Owns an UMTS licence. n Goal of O 2 Germany: consistent growth, continuous increase in market share (revenue and customers)

Mobile Network n GSM 1800 (E 2) mobile communications network. n Appr. 10, 000 GSM and appr. 1, 500 UMTS base stations in operation. n Intelligent network which enables the Genion and Prepaid functionality. n Virtually nation-wide coverage via O 2 Germany’s mobile network and the national roaming using the D 1 network. n National GPRS roaming in the D 1 network, nation-wide data transfer approaching ISDN speed in Germany. n Even faster data transfer with UMTS (Laptop card for GPRS/UMTS already offered). n WLAN - very high transmission speed over 400 business relevant hotsports such as airports or hotels. © O 2 Germany, August 2004

Customer Numbers O 2 Germany & ARPU © O 2 Germany, status 30 June, 2004 * base: quarter-ARPU © O 2 Germany, status 30 June, 2004

Sales & International Communications With O 2 n Appr. 470 o 2 shops throughout Germany n Own shops, Partner shops, Franchise, Shop-in-shops with Vobis n Currently around 9, 000 specialist dealers, wholesalers and other established sales channels. n International roaming with more than 298 partners in 148 countries enabling convenient calling round the world. n International GRPS roaming with more than 30 partners for very widespread data communication – GPRS roaming: 44 networks in 43 countries – GSM roaming: 296 networks in 142 countries © O 2 Germany, August 2004

Market Share Germany, based on Revenue for FY 2003/2004 O 2 10. 3% E-Plus 11. 9% T-Mobile 40. 8% Vodafone 37. 0% Source: quarterly and annual reports (for Vodafone & O 2: revenue FY 03/04; E-Plus & T-Mobile: cumulative revenue for April 03 to March 04) © O 2 Germany, status 31 March, 2004

Employees * since March 2001 without employees of BT Ignite © O 2 Germany, status 30 June, 2004

The Project 2 Project Framework The Marketing Engine To Serve All Your Prepaid Customers Architectural Overview

Project Framework n Project was initially a cost saving initiative, therefore the business case was crucial (CAPEX and OPEX consideration); See also optimized H/W configuration). n Timeframe was limited for realisation (window of opportunity). n Sicap PABQ (Prepaid Account Balance Query) application was selceted to reduce costly IVR calls which are offered for free to Prepay customers to check the balance. n No/limited IT impact to eliminate dependencies from IT release planning. n Almost no Marketing involvement required, except definition of access code: * 1 0 1 #

The Marketing Engine To Serve All Your Prepaid Customers n Two rack units support all Prepaid customers. n 2 x SUN Netra T 1 AC 200 as an optimized hardware configuration to radically optimize the CAPEX investment. n Sicap IWU and UMB application deployed on the same redundant SUN servers (two servers in total). n Capacity is more than sufficient and can be easily expanded by quickly adding more licenses (software based).

Architectural Overview n Architecture is open for additional internal and external application service developments. n OIS (Open Interface System) integration via Corba/XML (new for Sicap). n Sicap UMC initially choosen as an interim O&M tool (new). n Proprietary Interface to be developed (Corba/XML) towards SCP account via Open Interface System (OIS) utilizing Corba/XML

Marketing Aspects 3 USSD As An Important Marketing Channel Increasingly Success With USSD Service Usage Additional Services Realised Applications & Services Under Investigation

USSD Application As An Important Marketing Channel 1. Marketing insists now on using the USSD string as a communications channel on a permanent basis (other than originally planned). Your balance is 9, 35 EUR Your Advertisement could be here ‘ ler ion l ‚Ki cat pli Ap 2. USSD campaigns are on a permanent basis now (24 h change process); Two campaings can run in parallel. 3. USSD is a fast service (appr. 7 s response), cheap in operation, flexible to Marketing plans and extremly effective! 4. USSD advertisement string as a Marketing Channel multiplies the replies to service promotions and APRU generation. Note: Maximum length of USSD string limited with Trium handsets (non GSM standard) limits the advertisement text possible !

Increasingly Success With USSD Service Usage ~ 350 k ~ 700 k

Additional Services Realised n Added account expiry date information as an application. – Business Case to reduce inquiries to the customer care center. – individual promotion text possible. n Added Sicap UMB (USSD Menu Browsing) application. * 1 0 0 # : to access the USSD menu * 1 0 1 # : for balance inquiries * 1 0 2 # : for balance expiry date information Note: Watch your access network capacity !

Applications & Services Under Investigation n Enable nationwide usage of USSD by USSD stage 2 in national roaming environment or HLR ´update´ to support stage 1. n Service Provider Support (MVNOs with own brand). n Investigate and eventually promote International Roaming usage. n Investigate Alternative Recharge applications. n Take ideas from this Prepaid Mobile Conference. . .

Thank You For Your Attention ! n Questions & Answers n Contact: thomas. roessler@o 2. com n O 2 Can Do !