growth codes - presentation

Growth codes Extended strategies edition

Growth Codes 2.0 | Commercial in confidence | © Ericsson AB 2014 | 2015-04-30 |

More subscriptions, more trafficMore Services

Mobile subscriptions

LTE

HSPA

10

9

8

7

6

5

2

4

3

1

0

+ 2.4 billion

Monthly traffic (per application type)

0

15 000

5 000

20 000

10 000

25 000

30 000

Glo

bal m

obile

traf

fic(P

etab

ytes

/mon

th)

2014 2020

Video (55%)

Social networking (15%)

Web browsing (5%)

8X Audio (2%)

Source: Ericsson Mobility Report 2014


But who ismaking moneyON IT?


An Extended group of frontrunners keeps growing

› 20 Frontrunners show revenue growth of 9.6% CAGR*

› Revenues of peers grows with 2.7% CAGR

› The rest at -1.4% CAGR

*) Yearly Revenue Growth Indexed, 2010 = 100Ericsson analysis based on data from Strategy Analytics

Reference Year 2010

20142013201220112010

The rest

Peer

Frontrunner

Index 2010 = 100


The Study

270operators

FinancialAnalysis

20Front

Runners

Strategic Analysis

30operators

Growth Codes

OperatorStrategies


Leading Revenue Growth

Frontrunners identified

Evaluated and identified based on 3 key parameters

~5% or higherFull Year Growth

>25% non-voice revenues in last quarterPositive EBITDA

Profitable Data centric


Different strategies in different markets

Source: Ericsson

EMEAAMERICAS APAC

Quality led Market led Offering led


Different strategies in different markets

Source: Ericsson

Quality led Market led Offering led

EMEAAMERICAS APAC


Interviews Information


What have they done to be that successful?


Innovatingnew revenues

Connectivity and Services as differentiators

Connectivity and Services as commodities

Market &Tech Synergies

Market &Tech Silos

Maximizingold revenues

Problem Focused Opportunity Focused

Frontrunners think differently

Shift of mindset


The Growth Codes

“Streetwise Metrics”Measure and Manage User Experience

“Co-Partnering”Create Strategic Partnerships for Innovation

“Unboxing”Create Innovative Offerings

“Showcasing”Market your Performance Leadership

“Eco-systematic”Embrace Innovation

“Gap Minding”Create Performance Gap to Competitors

Drive Usage Monetize Usage

Growth Codes 2.0 | Commercial in confidence | © Ericsson AB 2014 | 2015-04-30 | Page 14

The Value chain for investment


Is there a common strategy behind their success?


Frontrunners apply a dual approach to growth

Strategies for current growth

Existing Markets & Existing Capabilities New Markets and/or New Capabilities

Strategies for future growth

› IoT & Vertical solutions› Cloud & ICT services› Expand operations and footprint

(e.g. through M&A, geographical expansion or alliance)

› Explore new business models , partnerships and services

› Traditional telecom products & services

› Present markets & segments


Differentiation

Market scope

Customer scope

Product scope

Technology & Operations

How do frontrunners think differently?

Offering-led transformation

Quality-led progression

Market-led adaptation


three Strategies to profitable growth

› End-to-end customer experience focus

› Selective distribution & campaigns› Segmented approach – often

utilize sub brands› Fast followers on new products &

services› Selected strategic partnerships

› High focus on market innovation› One-for-all offerings and targeted

distribution› First to market with new offerings› Several strategic partnerships› High focus on operational

efficiency

Offering-led Transfomation

› Selective customer experience efforts & simplification focus

› Extensive campaigns & promotions

› Vast distribution network› Rely on extensive high-quality

service portfolio & converged offerings

› Few strategic partnerships - extensive own VAS offering

Quality-led Progression Market-led Adaptation

Differentiate on high-performing networks

and brand preference

Differentiate on uniquely designed offerings

redefining customer value

Differentiate on quick adaptation

to market conditions


The Strategies leverage the growth codes

“Streetwise Metrics”

“Co-Partnering” “Unboxing”Create Innovative Offerings

“Showcasing”

“Eco-systematic”

“Gap Minding”

Quality-led Progression

Differentiate on high-performing networks and strong brand preference

Measure and Manage User Experience

Create Strategic Partnerships for Innovation

Market your Performance Leadership

Embrace Innovation

Create Performance Gap to Competitors





This type of strategy is driven by the ability to create a Network Performance gap to competitors in the market through the Gap Minding Code. This is coupled with the ability to “Showcase” this gap through a simple and understandable manner to the end-user. The effect of coupling those two codes together creates a Brand Preference to attract high ARPU segment. Further, to be able to attract consumers there needs to be a focus on creating Innovative Offerings that captures Customer Value effectively. Finally because this strategy creates a solid base for value creation, frontrunners deploying this strategy would be looking out for partners that share a common mind-set to advance innovation and build upon their respective expertise.


Frontrunners in practiceAmerican Operator

› Significant lead in data coverage

› Showcasing extent of coverage visually against the competitors

Quality ledProgression

36%revenue growthover 5 years




“Showcasing”“Gap Minding”


Market-led Adaptation

Differentiate on quick adaptation to market conditions






Embrace Innovation





This type of strategy is driven by and understanding of market needs and end-user preferences. Frontrunners deploying such strategy will always look to understand, measure and manager User Experience through Streetwise Metrics. Because this type of strategy is quick to adapt to market conditions and the need of targeted segments, they need to showcase their User Experience to a selected set of segments. Their ability to mirror offerings that are successful as they are introduced by competitors but add value through further capturing some leftover customer need is vital to their success hence their application of the above codes in harmony.


Frontrunners in practiceGlobal Operator

› Fast follower

› Tailored bundling for targetted segments

› Innovative billing› Re-use strategy into other markets

Market LedAdaptation

28%YoY subscriber growthin targetted segment



Offering-led Transformation

Differentiate on being first to market with uniquely designed offerings


“Showcasing”“Gap Minding”






Embrace Innovation





Offering Led Transformation

This type of strategy is driven by the ability to be internally capable of researching, understanding and mirroring customer needs in the offerings presented. They do understand the need of creating a gap in terms of network performance but targeted towards the segments that that innovative offering is directly impacting. Their unboxing considers very strongly who the end-user is and how to deliver on a perceived high quality of service. They also do not consider the OTT players as a threat but leverages their offerings in expanding bundle variety to cater for a specific segment with more options within.


Frontrunners in practiceAsian Operator

› Embracing innovation

› Improved brand sentiment & NPS through strategic partnering and improved network performance

› Attractive data plans targetting pre-paid users

Offering LedTransformation

13%YoY growth in total revenue


The Strategies put varying emphasis on the growth codes


Differentiate on being first to market with uniquely designed offerings


Differentiate on high-performing networks and strong brand preference


Differentiate on quick adaptation to market conditions

“Streetwise Metrics”Experience-centric KPI:s

“Co-Partnering”Visionary Collaboration

“Unboxing”Redefine Subscription

“Showcasing”Quality-led Marketing

“Ecosystematic”Open-ended Innovation

“Gap Minding”Visionary Investing

Lead by superior network performance

Lead by innovative Marketing & Offering


Frontrunners emerging

Strategy Type

No. of frontrunners




2014 2015

20

30 est.

Market Share

No. of frontrunners

2014 2015

20

30 est.

Market share position: #3



2013

12

2013

12


Successful Operators: Strategies & Growth codes

UNDERSTANDING THE CUSTOMER

ATTRACTIVE MARKET OFFERs

› Frontrunners are outperforming their peers

› ..and stimulating the market

› Growth Codes 2.0 identifies clear strategies and tactics for success

› The number of front runners is set to rise

growth codes - presentation

Technology

confidence ericsson

ericsson analysis

usagegrowth codes

investmentgrowth codes

offering ledgrowth codes

ericsson mobility report

yearly revenue growth

different strategies