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Wholesale Optimization

Workshop description
Document 1.0, January 2012 Created by Client Management

..............3 6 7 8 9 10 Intelligence ...................................................... 3 Workshop objectives ........................2 2...................................... 3 NeuString Workshop concept and process...............................................1....................................................................................4 4..3................................ 7 Discounted IOT ..................................3 4.................................................................................................................................................................................... 9 Workshop participants ........ Advanced ............................................................. 7 New discount agreement coverage ..................................................................................................................................................2 4 4...... 4 Identification ..............................................................1 4.....................................................................................................................Error! Bookmark not defined................................................................................................................................... 4 Market conditions ...............................................................................................1 2. 5 Decision ............... 8 Premium ......................................................................................................................................... 6 KPI ............................................................................ 4 Analysis...............5 5 5........................................ 7 Current discount agreement coverage ........................................................................................................................................................................................................1 5........................................................................................ 10 Page 2 of 11 .... 5 Implementation.................................................................................2............................................................................1..........................................................................................................................................................3 2.......................................................................... 5 Quantification .............. 9 Timing and planning ................................................................................................... 9 Action ........................... 3 2..................................................... 8 Standard ........................................................................................................ 7 Budget creation .................2 3 3.............................................................................2....................................................................................................................................................2 2..............................................................................................3... 6 Standard IOT............................................................................................................................................................................................................................................. 4 Historical trends ............................................ 6 Post workshop documentation...................................................................................................................................................................................................1 3..... 6 Scope of Workshop ........................2 4...................................................................................................................................................1 2.............................1 2.............................................................. 10 Workshop agenda .....................................................1 2.......................................................................................................2 5.........................................................................2 2............................................................................................................................. 9 Venue ................................................................................................................................................................................................... 5 Prioritization ........................................................................................... 8 Workshop prerequisites ........................................... 5 Evaluation .................Wholesale Optimization Workshop Description Contents 0 1 2 Introduction ..............................................................................................................................................................................................

1 Workshop objectives NeuString is aiming to provide the operator with a framework that will result into an optimized wholesale roaming business. e. i. revenue retention at current levels. Furthermore.g. analyzed and predicted based on the results of the first workshop. new steering strategies The specific objective of the workshop will be agreed upon with the individual operator and will be related to the selected workshop modules as described in section ‎ 4. additional optimizations are identified. NeuString offers to share the knowledge gained through close partnerships with our clients and the experience of our consultants who have been working with the financial aspects of roaming for more than 10 years. NeuString facilitate the workshop. NeuString offers the workshop as an initial workshop for new clients and a follow up workshop for existing clients. The follow up workshop includes a session where predicted profit optimizations are benchmarked against the actual results. Investigation initiatives. i.e. The outcome of the workshop is a detailed reporting presenting the recommended optimizations to be used for final approval. the workshop also adds other benefits such as in-depth evaluation of the current situation. The concept of the NeuString Optimization Workshop is:      To provide a thorough financial analysis of the current roaming business To identify areas for optimization To quantify the identified optimizations To assess and quantify the potential risks To prepare a documented business case In addition to investigating the financial impact.Wholesale Optimization Workshop Description 0 Introduction The NeuString Wholesale Optimization Workshop is a professional service offered to mobile operators targeting to optimize inbound revenues and minimize outbound costs. new discount partners.e. In addition to the financial objective operators could also have objectives related to the list below:     Increased budget control Improved time to market Detailed KPIs and monitoring reports. a certain percentage of cost reduction or a list of targeted discount partners at a set IOT level. by providing our experienced consultants’ intellectual capital. All analysis and simulations are based on the operators’ own data and current situation. analysis models and a ‘state of the art’ analysis and simulation tool. 2 NeuString Workshop concept and process As the market leading provider of business analytics tools. the financial consequences of shifting volumes from one partner to another based on a new and more favorable discount structure. The process is illustrated in the figure below: Page 3 of 11 . workshop material. An operator may have a specific financial goal. impact of regulatory decisions and consequences from mergers and acquisitions.

2. 2. The focus will be determined by the selected module. The focus will be determined by the selected module. The period of time will depend on the amount of data received. The elements which are typically covered during the analysis are:     Service type distribution and evolution Inbound/Outbound ratios Top destinations by charge and/or volume Roaming partner tier distribution (Groups. Page 4 of 11 . Discounted IOTS.1.2 Market conditions The market conditions are used to gain and share the understanding of what external factors should be taken into consideration.2 Analysis At this stage of the workshop the intelligence gathered is used to identify and quantify optimizations.1 Intelligence First part of the workshop is about collecting intelligence necessary to secure an optimal result.Wholesale Optimization Workshop Description Intelligence Historical trends Market conditions Analysis Identification Quantification Decision Evaluation Prioritization Action Implementation KPI The process is further detailed in the following sections. Ideas will be exchanged and discussed and a preliminary quantification of the possible scenarios will be provided.1. PNA etc) This phase is used to share information regarding the operator’s specific internal strengths and weaknesses in order to set and align objectives. 2. 2.1 Historical trends The historical trends are used to give an overview of the operator’s specific situation. The elements which are typically covered during the analysis are:     Presentation and discussion on examples and information about market regulations Discussion and information sharing on operator positioning in the market Group/alliance strategic relationships which should be taken into consideration Knowledge sharing on pricing levels and evolution within the region This phase is used to share information regarding the markets opportunities or threats in order to set and align objectives. This means understanding the operator’s current situation and what challenges are being faced.

The participants will also agree on the preferred format and content of the business case documentation.g. meaning that revenue enhancement. forecasting and discounting have been created the next step is to evaluate the scenarios based on the agreed upon objectives and goals:      Revenue growth.2. retention or win-back should be prioritized before cost optimization. 2. This could be in the form of specific revenue and cost implication or as a more long term element. The criteria should be agreed on amongst the workshop participants and should be aligned with the objective and goals set early on. Page 5 of 11 . which will be part of the overall workshop documentation.3. the last step before action is to agree on prioritizations. the financial and market impact will be quantified. growing the retail market or establishing a strategic partnership with a roaming partner or group.Wholesale Optimization Workshop Description 2. This step can be considered as a structured brainstorming session where the workshop participants.2.3 Decision The previous workshop phases have provided detailed intelligence and analysis of the operators business.3. discuss which areas of the selected scope should be evaluated.2 Prioritization Based on the optimization scenarios which have been prepared during the previous steps.1 Identification For most operators there will be a number of areas that can be addressed. The identification will be based on the provided intelligence and take into consideration the historical trend and the market conditions.1 Evaluation Once the simulations.2 Quantification As soon as the possible areas for optimization are identified. These are the basis for deciding on what scenario should be pursued. win back Cost control or minimization IOT plan parameters and retaliation risk assessment Discount optimization and financial impact overview Volume impact evaluation The evaluation phase may include fine tuning or minor adjustments to already created optimizations. The overall net impact could also be taken into consideration as could the overall probability of securing a deal with a roaming partner. 2. so that only the scenarios most optimal for implementation are included in the Post workshop report. which supports an overall goal of the wholesale business e. retention. 2. Selection criteria could be whether the operator situation entails focus on the inbound revenue. Quantification will include a detailed analysis of the impact of for example alternative pricing and/or changes to the volumes – depending on the selected workshop module. 2. Scenarios will be preselected and improved. guided by the consultant.

monthly. NeuString has a broad understanding of the challenges being faced in the market. Based on this experience NeuString offers different modules that will set the scope of the workshop – as per the diagram below: Inter operator tarifs Discount agreements Control and monitoring Standard IOT Current discount agreement coverage Budget Creation Discounted IOT New Discount agreement coverage Each workshop module can be selected and combined based on the operator current situation and prioritization. The implementation phase will address the following elements: Technical capabilities and/or limitations Commercial options and notice Operator resources and bandwidth 3. KPIs can include for example: Overall performance Regional performance Agreement specific growth rates Discount coverage IOT levels All indicators can be set based on charges or volumes. This is to ensure that implementation is completed and that the expected results are achieved.Wholesale Optimization Workshop Description 3 Action The final step in the workshop may be the most important. Through a close dialogue with many operators throughout the world.2 KPI Once the implementation plan has been completed and agreed upon with the workshop participants.1 Implementation Implementation activities will be very dependent on the specific workshop modules selected and the optimizations identified. Elements not covered in the standard modules can be defined and agreed upon separately. It is important to have a plan. absolute values or growth rates. but in order to realize the potential optimization. The final phase aims to support the client in agreeing on a detail implementation plan and agree on specific milestones to be closely monitored. Additionally indicators can be weekly. Page 6 of 11 . 3. a set of key performance indicators should be defined. 4 Scope of Workshop The mobile roaming market has been evolving over the last few years to be more competitive and margins may be difficult to maintain. per quarter or per ½ year. index or percentages. action needs to be taken and the actual results need to be monitored.

meaning partners with the highest potential measured either in charge or volume. meaning that both loss and gain distribution within the participating entities will be analyzed. An evaluation of the overall potential will be made with due consideration to potential revenue reduction versus the cost optimization. The prioritization areas can be either geographical. however execution/realization of identified optimizations are dependent on actual negotiations. group or operator specific. To evaluate the IOT. The analysis will be focused on non-discounted roaming partners as the standard IOT changes will not impact the volumes already covered by discounts.1 Standard IOT This module is focusing on evaluating and optimizing the current standard IOT and is typically relevant if the pricing has not been reviewed within the last 12 to 18 months. The financial impact of all selected discount optimization scenarios will be evaluated. roaming partners not relevant to the agreed upon level of pricing. The financial impact may therefore include multiple scenarios based on different potential market reactions.2 Discounted IOT The purpose of this module is to evaluate the creation of a discounted IOT to be offered either within a group or alliance or to be offered to roaming partners within a specific strategic area. price sensitivity and potential volume shifting will be taken into consideration and high risk roaming partners will be identified. 4. The prioritization areas can be either geographical. will not be included in the analysis. 4. Favorable negotiation or high risk positions Page 7 of 11 . Favorable negotiation or high risk positions will be identified in order to evaluate possible optimization scenarios. Regional regulations may also require an evaluation of the IOT.4 New discount agreement coverage The focus of this module is to identify and prioritize the expansion of the discount coverage. In many cases a destination will include multiple discount coverage and thus consideration to roaming partner retaliation historical and future strategic importance is also part of the analysis. meaning partners with the highest potential measured either in charge or volume – but which are not already covered by existing agreements. The fairness principle will be applied to ensure that pricing levels are justified based on the current volume exchange. This module will in many cases be applied within a group and will therefore include an evaluation both on group and individual affiliate level. based on the expected effectiveness/execution can be documented and evaluated. Depending on the expected application of the discounted IOT. The focus will be on tier two roaming partners. inbound/outbound ratios at a called destination level will be evaluated. These could be based on revenue retention or win back scenarios in addition to cost reduction through either new discount schemes or steering optimization. Traffic redistribution and market share optimization will be included and multiple scenarios. When making suggestions for changes. The focus will be on tier one roaming partners.Wholesale Optimization Workshop Description 4. 4.3 Current discount agreement coverage This model reviews and analyses top destinations already covered by existing discount agreements. group or operator specific.

However specific IOT changes or discount scenarios may not be detailed. Page 8 of 11 .5 Budget creation The focus of this module is to create a full budget for a defined period including the definition of specific performance indicators.1 Core The Core report provides an overview of the workshop objective. The delivery of the workshop is closed upon the completion of the workshop documentation which will be provided no later than 10 working days after the completed session. Revenue. 4. The operator decides which approach should be taken. including the recommendations based on the outcome of the workshop. Critical performance indicators will be identified and monitoring and follow up procedures will be defined. In this report recommendations are detailed to a higher extent and the element of probability evaluation is added. A management summary highlights the process and the optimizations identified. 5. Each report is detailed in the sections below. A detailed benchmark analysis to historical performance and general market trends will be conducted. considerations for longer term impact will be included as well. In some cases a destination will already have existing discount coverage and thus consideration to roaming partner retaliation historical and future strategic importance is also part of the analysis.2 Advanced The Advanced report is an extension of the Core. the process and the selected optimization scenarios.Wholesale Optimization Workshop Description will be identified in order to evaluate possible optimization scenarios. The different reports are Core . These could be based on revenue retention or win back scenarios in addition to cost reduction through either new discount schemes or steering optimization. whether to use “Top/Down” or “Bottom/Up”. It is a prerequisite for this module that relevant discount agreements and forecasting expectations be prepared and brought to the workshop. Risk areas will be identified and alternatives will be suggested. as this areas is covered by other modules 5 Post workshop documentation The operator can select the level of reporting required after the workshop. The documentation can be used to share the workshop findings and as basis for final approval of the agreed upon actions. This reporting includes benchmarking on multiple parameters such as Gross. Cost and volumes. Additionally simulations settings for the selected scenarios will also be provided for further analysis if necessary. The financial impact of all selected discount optimization scenarios will be evaluated. Net. Based on the information exchanged during the workshop. however execution/realization of identified optimizations are dependent on actual negations. Advanced and Premium report. Each selected optimization scenario will be detailed in a business case report. 5. The content and format will be based on NeuString Standard business case reporting. Based on general market expectations multiple scenarios and/or versions of the budget can be created.

A 1 hour conference call is held to align expectations and agree upon a workshop outline and prioritization. A suggested procedure for monitoring the progress and the expected results will also be added. 6 Workshop prerequisites The preparation of the workshop is an extensive dive into an operator’s current situation. Each session will be focused on a different step of the workshop process. Please note that some information is essential for successfully completing the workshop and that such information needs to be received by NeuString prior to conducting the workshop and no later than two weeks prior to the scheduled workshop dates. NeuString will facilitate the workshop and provide materials. Combinations of the modules can be discussed – as can the scope of the individual modules to accommodate the available client resources. The action plan is a separate document that defines milestones and KPIs that have been agreed upon during the final phase of the workshop. An alternative to the face to face meeting is the split approach of 4 times 1½ hour WebEx session. methods and models to support the achievement of the objectives. 8 Workshop participants The recommended participants to the workshops may vary slightly according to the selected module. For each scenario evaluation.Wholesale Optimization Workshop Description The Advanced report’s comprehensive documentation will contain multiple scenarios for each optimization. all scenarios addressed during the workshop will be outlined and detailed in the NeuString standard business case report. Therefore. 5. The preferred method is face to face with participants. The client will receive a request for information detailing the specific requirements. This requires 1 full day per selected module.3 Premium The Premium report is an extension of the Advanced report as it adds the element of an action plan. dependent on the preferred workshop module and the operator priority. Information exchanged can range from information about ongoing discount negotiations to strategic financial goals. however in general the following roles are relevant: Page 9 of 11 . Timeframes for the actions will be including the identification of critical milestones. Background information and specific market knowledge and knowledge about internal policies and procedures will however have great impact on the workshop. we do strongly recommend the client to use the information in this paragraph in order to prepare for the workshop and to assign the relevant specialists and decision makers to the workshop. The workshop outline will be provided to the workshop participants 2 days prior to the workshop session. The action plan will include all the agreed upon optimizations and the necessary tasks to execute. Information is shared regarding the challenges the operator is facing in relation to the agreed upon objective. 7 Venue NeuString consultants conduct the workshop based on two venues.

Onsite 09:00 09:30 09:30 10:30 Introduction and workshop outline and objectives Intelligence -Historical trends -Market situation Analysis .Wholesale Optimization Workshop Description     Budget responsible Negotiators IOT responsible Controllers It is recommended that participants have the necessary mandate to decide on scenarios evaluated during the workshops.Impact quantification Lunch Decision . Depending on the scope and venue of the workshop the duration is 1 day for face to face and 2 weeks for the WebEx sessions. The workshop documentation will be sent no later than 10 workdays after completion of the workshop. assuming all requested material has been provided by the Client.Scenario identification . We strongly recommend that workshop participants are well prepared and that information about the workshop is distributed to all participants well in advance. It is our suggestion that this document and all communication regarding the content of the workshop are distributed to all the participants.Scenario impact evaluation . 9 Timing and planning The workshop shall be committed by both parties no later than two weeks prior to the expected workshop date. This means that additional items might be added and that some items might be removed. The two weeks will be used for preparing intelligence reports and preliminary analysis as well as to verify completeness of the information exchanged. All changes to the agenda shall be mutually agreed.Prioritization Action . Sharing information and objectives prior to the workshop will improve the output and significantly increase the value of the workshop. 10 Workshop agenda The agenda for the workshop set forth below is preliminary. Time prioritization can be changed as well.Implementation .KPI 10:30 - 12:30 12:30 13:30 - 13:30 15:30 15:30 - 16:30 16:30 - 17:00 Page 10 of 11 . The final agenda will be put together during the planning of the workshop and will be adapted to the Client’s specific needs.

Impact quantification Decision .Prioritization Action -Implementation -KPI Summary and closing of workshop Session 3 Session 4 Page 11 of 11 .Wholesale Optimization Workshop Description WebEx sessions Session 1 Introduction and workshop outline and objectives Intelligence .Market situation Session 2 Analysis .Scenario impact evaluation .Scenario identification .Historical trends .