CGI Voice of the Client Analysis for 2015 in the Global Telecommunications Industry. Includes IT trends analysis and business implications. Key topics for 2015: IT Modernization, Digital Transformation, Customer Experience, Omni-channel strategies, and Outsourcing.

1. © CGI Group Inc. 2015 Confidential
Voice of the Client Program
Insights from client interviews around the world
2015 Edition

2. Confidential
2
17 Countries
Business
44%
IT
56%
This year we conducted 965in-­person client interviews
to listen to their perspectives, refine our thinking, inform our investments,
and evolve our strategy to best serve clients as a partner and expert of choice.
33%
19%9%
7%
11%
6%
6%
4%
3%
1%
Government Financial Services
Utilities Manufacturing
Retail & Consumer Services Communications
Health & Life Sciences Transport
Oil & Gas Post & Logistics
10 Industries

3. Confidential
Our clients are struggling to reconcile two
conflicting objectives
3
• Increasing alignment between business and IT, particularly in the
high performing organizations
• However, business focuses on growth and “change’ while IT is
consumed with “run”
“Run”
Running the
business
Legacy systems
and processes
“Change”
Changing the
business
Building
digital organizations

4. Confidential
Most clients are trying to redirect resources from
“run” to “change” to drive business value…
35%
50%
15%
Increasing Flat Decreasing
23%
42%
35%
Spend on
“running the business”
(85% decreasing or flat)
Invest in
“changing the business”
(77% increasing or flat)
Source: CGI’s 2015 Client Interviews
4

5. Confidential
…but those efforts are hindered by legacy
maintenance costs and demands of cyber security
5
Enterprise
Systems
Mission Critical
Business Systems
Cybersecurity Digital
Transformation
28% 45% 9% 18%
% of IT CapEx Budget spent on
Source: CGI’s 2015 Client Interviews

6. Confidential
Our clients’ global Top Trends and IT Priorities
6
Top Trends Top IT Priorities
1. Increased customer/citizen
expectations
2. Digital transformation
3. Regulatory compliance
4. Cost/budget pressures
5. Cybersecurity
1. Drive IT modernization to
become more agile & reduce cost
of “run” to invest in “change”
2. Develop the capabilities to deliver
the benefits of big data &
business insight
3. Transform and connect with all
stakeholders to become a digital
enterprise (IoT)
4. Protect our stakeholders
through enhanced Cyber Security
5. Embrace new delivery models to
align revenue & costs (SaaS,
Cloud, Mged Srvs/Outsourcing)
Source: CGI’s 2015 Client Interviews

7. © CGI Group Inc. 2015 Confidential
Voice of the Client Program
Insights from the Communications Industry
2015 Edition

8. Table of contents
8
Executive summary1
Overview of findings2
Industry trends3
Business implications4
IT priorities5
IT budget impact6
Areas of innovation7
Special topics8
Solutions9

9. Executive summary
Insights from the communications industry
• New convergent offerings
& product bundles are vital
to replace lost revenues
• Massive focus on customer
experience and agile way
of working
• BI and insights derived will
influence and drive
operations
• Further developing the
ecosystem: partnerships
and new business models
are key accelerators
• Efficiencies: speed to
market, cost reduction, and
agility
• Focus on attracting and
retaining talent
• IT Transformation is
critical for time to market,
efficiency, agility, and
convergent service flexibility
• Omni-­channel for a
personalized customer
journey and interaction
• Industry direction towards
customer self-­service
• Network and IT continue
merging organizationally
and technically
• Business intelligence
• Cybersecurity
• Internet of Things
• Continuation of vendor
consolidation initiatives
• Increased competition
and market saturation
drive push to win battle for
customer and replace lost
revenues
• Continued industry
consolidation for
convergent offerings
• Service expansion and
digital innovation
• Strong focus on partners
and developing the
ecosystem
• Early media innovation
• Enterprise segment focus
• Constraining regulations
Market trends Business implications IT priorities
9

10. Respondent overview – Communications
10
Geographic profileRespondent profile
• 62 clients interviewed across 13 countries
in 2 regions
• Mixture of business and IT interviewees
• Business roles: 32%
• IT roles: 68%
• Range of client representatives from CEO
through VP of Business Lines including
CIO and direct reports
• Mixture of management tiers:
• CEO: 3%
• Line/Function head: 31%
• Other management: 66%
• Example of organizations:
• Bell, Vodafone
• Orange, TeliaSonera
• KPN, BT, DT, Telefónica
• Le Figaro, PagesJaunes, Nokia
Canada
32%
USA
3%
Other
European
36%
UK
10%
Nordics
13%
France
6%
35%
65%
Canada USA
Other European UK
Nordics France
Europe
Americas

11. 11
Overview of findings – Communications
IT priorities
Business implications
47%
48%
50%
53%
70%
0% 10%20%30%40%50%60%70%80%
Increased three way competition
Globalization/ consolidation
Regulators' impact on revenue
Market saturation
Win battle for customer
% of respondents
Key industry trends
35%
42%
58%
65%
71%
0% 20% 40% 60% 80%
Mergers and acquistions
Reduce cost of operations
New business models
Develop new revenue …
Customer experience
% of respondents
42%
53%
55%
60%
82%
0% 20% 40% 60% 80% 100%
Internet of Things
Omni-­channel strategies
Cybersecurity
Data analytics/business
intelligence
IT transformation/ modernization
% of respondents
Key findings
• Service expansion and digital innovation to win
customers and replace lost revenues
• Unprecedented increase in regulator activity
• Improved omni-­channel customer experience for
winning back customers while retaining existing
• Developing the ecosystem: new partnerships and
business models for new revenue streams
• IT Transformation with OSS and BSS modernization
critical for agility, efficiency, and time to market
OpEx flat CapEx flat

12. Key findings
• Service expansion and digital innovation to win customers and replace lost revenues
• Unprecedented increase in regulator activity prompting review of both capital spending plans
and operating expenses
• Continued industry consolidation for convergent offerings
• Strong focus on partners and developing the ecosystem
Industry trends
Overall summary
12
43%
47%
48%
50%
53%
70%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Openness to partnerships
Increased three-­way competition
Globalization/consolidation
Regulators impact on competition/revenue
Market saturation
Win battle for customer
% of respondents

13. Key findings
• Market saturation has
higher weight in Europe
• Perceived regulatory
impact larger in Americas
• Consolidation and
globalization more
prevalent in Europe
• More openness to
partnerships in Europe
compared to Americas
Industry trends
Regional overview
13
77%
29%
71%
24%
47%
12%
66% 66%
42%
58%
53%
58%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Battle for
customer
Market
saturation
Regulators'
impact
Globalization/
consolidation
3-­way
competition
Openesss to
partnerships
Americas Europe
% of respondents

14. Industry trends
Comparison to 2014
14
25%
7%
71%
48%
50%
70%
0% 10%20%30%40%50%60%70%80%
Globalization/ consolidation
Regulators' impact on competition/
revenue
Win battle for customer
2015 2014
% of respondents
Key findings
• Regulatory impact and
intervention highlighted
throughout 2015 responses
with 54% while only 7% in 2014
• Bigger impact of consolidation
in the industry with recent
mergers and acquisitions
with 52% of respondents in
2015 vs. 25% in 2014.
Consolidation has happened
both geographically as well as
into adjacent markets.

15. Key findings
• Customer experience and agile way of working is key for CSPs
• Developing the ecosystem: new partnerships and business models for innovative convergent
offerings for new revenue streams
• Efficiencies: speed to market, cost reductions are priorities
Business implications
Overall summary
15
21%
25%
35%
42%
58%
65%
70%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Drive value from data
Drive cultural/organization transformation
Mergers and acquisitions
Optimize/reduce cost of operations
Develop new business models incl. partnerships
Develop new revenue streams
Customer experience/innovative offerings
% of respondents

16. Key findings
• New business models and use of
partnerships much more prevalent in
Europe
• Optimizing and reducing cost of
operations more of a focus in the
Americas
Business implications
Regional overview
16
77%
69%
15%
46%
72%
63%
78%
38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Customer
experience/
innovative
offerings
Develop new
revenue
streams
Develop new
business
models incl.
partnerships
Optimize/
reduce cost of
operations
Americas Europe
% of respondents

17. Key findings
• IT Transformation is critical for time-­to-­market, efficiency, agility, and convergent service
flexibility along with being defined as a must for simplification
• Newly hired data scientists are evolving data analytics into Big Data and algorithms for better
customer experience, differentiation, and to identify opportunities for new services
• Omni-­channel for a personalized customer journey and interaction
• Industry direction towards empowering customers and driving down costs through improved
customer self service
• Continuation of vendor consolidation initiatives
IT priorities
Overall summary
17
30%
42%
53%
55%
60%
82%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Vendor consolidation/managed services
Internet of Things
Omni-­channel strategies
Cybersecurity
Data analytics/business intelligence
IT transformation/modernization
% of respondents

18. Key findings
• Increasing emphasis on data analytics
and a rise in prevalence of the data
scientist profile, particularly in the
Americas
• Omni-­channel is increasingly perceived
as a minimum requirement and
assumed – rather than a differentiator
IT priorities
Regional overview
18
82% 82%
53% 53%
79%
58% 58%
55%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
IT
transformation/
modernization
Data analytics/
business
intelligence
Omni-­channel
strategies
Cybersecurity
Americas Europe
% of respondents

19. Key findings
Increase
• Significant Increase in spending on
digital / online channels
• IT / Network transformations still large
part of CapEx
Decrease
• Driver to reduce IT resources amplified
by market contraction
• Application portfolio rationalization in
order to direct funding to new
opportunities
• IT and network costs are merging
• Outsourcing / shared service centers
facilitating savings
• Some later stage IT / Network
transformation initiatives are winding
down budgets
Impact on IT budgets
Overall IT budget
19
21%
26%
28%
46%
Increase
Flat
Decrease

20. 9%
5%
16%
0%
35%
7%
9%
7%
12%
> -­
10%
-­8 to -­
10%
-­5 to -­
7%
-­2 to -­
4%
Flat +2 to
+4%
+5 to
+7%
+8 to
+10%
>
+10%
0%
5%
10%
15%
20%
25%
30%
35%
40%
14%
18%
21%
2%
39%
4%
0% 0%
2%
> -­
10%
-­8 to -­
10%
-­5 to -­
7%
-­2 to -­
4%
Flat +2 to
+4%
+5 to
+7%
+8 to
+10%
>
+10%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Impact on IT budgets
OpEx and CapEx budgets
20
Key findings
OpEx
• More than a third (39%) of
respondents indicated flat OpEx
• The majority (55%) indicated
some level of decline in OpEx
CapEx
• Highest frequency stated a flat
CapEx budget
• Balanced spread in CapEx
between increased spend (33%)
and reductions (31%) tied to
stage in journey of the
IT/network transformations
OpEx flat
CapEx flat
OpEx
CapEx

21. 21
Areas for innovation
Customer experience
Innovative products
and services
Digital Transformation
and mobility Internet of Things
Big data and
predictive analytics
IT Transformation
Cloud
Next generation
network
Time to market
Workflow and process

22. Special topic: Digital Transformation
Stage in journey
22
7% 2% 68% 14% 9%
Investigating Proof of concept Transformation in progress
Transformation achieved Not for us
Key findings
• The majority (76%) of CSPs are in the process of transformation
• Small percentage of CSPs (14%) claim to have achieved and completed the digital
transformation
• 90% of CSPs know that transformation is necessary to support the changing business model
Stage in journey
0% 100%

23. Special topic: Cybersecurity
Assessed level of cybersecurity risks
23
Key findings
• More than two thirds (68%) have assessed the level of cybersecurity risk for their organizations
rating it moderate to high
0%
6%
8%
10%
6%
8%
17%
15%
11%
17%
2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
1
Very low
2 3 4 5 6 7 8 9 10
Very high
Don't
know
% of respondents
68%

24. Special topic: Cybersecurity
Completeness of cybersecurity program
24
Key findings
• A very strong 82% of the responses fall into the mid to upper level of cybersecurity program
completeness
• Communications industry is in the higher tier in comparison to the 10 industries surveyed
• Like the IT transformation, the majority are at the later stages of the journey for the cybersecurity
program
0% 0%
2%
7%
9% 10%
21%
33%
16%
2%
0%
5%
10%
15%
20%
25%
30%
35%
1
Very low
2 3 4 5 6 7 8 9 10
Very high
% of respondents
82%

25. Special topic: Cybersecurity
Confidence of protection against threats
25
Key findings
• The majority (77%) report that they feel moderately protected to well protected against threats
0%
2%
5% 5%
11%
7%
21%
36%
11%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
1
Very low
2 3 4 5 6 7 8 9 10
Very high
% of respondents
77%

26. • IT Transformation is
critical for time to
market, efficiency,
agility, and convergent
service flexibility
• Omni-­channel for a
personalized customer
journey and interaction.
• Industry direction
towards customer self
service
• Network and IT
continue merging
organizationally and
technically
• Business intelligence
• Cybersecurity
• Internet of Things
• Continuation of vendor
consolidation initiatives
Solutions – Communications
26
IT priorities
End-­to-­end IT Transformation:
• Transformational outsourcing, business and data migration,
business process and IT post-­merger integration, mainframe offload
• General evolution of network centric BSS systems to a business
service platform for flexibility and time to market
• Legacy application development and management to enable stable
IT environment and allow internal resources to focus on
transformation initiatives
• Partner service delivery platforms to allow for partner sell through,
settlement, and on-­ramping of third-­party services
Digital Customer Experience:
Omni-­channel management, digital commerce with focus on SAP
Hybris, CGI Insight, CGI mobility, CGI Beacons
IPTV service development and platforms for the evolution to IP Video
and setTopBox-­less solutions
Data analytics: churn management, geographical information, CGI
Data2Diamonds™
Cybersecurity: risk assessment, business protection, security
operations, CGI EligoVoice IP
Internet of Things: consulting, business solutions, business
enablement and connectivity platforms
Managed services: Collections360®, cybersecurity, application
management, HR BPO
Focused Solutions
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Industry trends, business implications, IT priorities,
IT budgets
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