1. ​The Business Case around Tariff & Pricing
​Dr. Stefan Schwarz,
​ Director Telecommunication, Media & Entertainment, Teradata GmbH
​26 March, 2015

2. 2
​Big Data
​The C-level view
​Brute force vs. selected action
Agenda
© 2014 Teradata2

3. 3
Big Data – a big hype
Fraud detection
Multi Channel
Pattern
New account
activation paths
In store customer
experienceNetwork analytics

4. 4
“The business model for mobile
operators in developed markets will
go cash flow-negative within the
next strategic investment cycle.“
McCahill, Tellabs
Therefore two main questions that keep most
telco CxOs awake at night:
1.How can I SIGNIFICANTLY reduce opex?
2.How can I generate additional revenues?
As the days of milk and honey are over operators need
to seriously focus on cost and new revenue

5. 5
Typical OPEX Breakdown for a European Mobile Operator
(% of Total Opex)
Source: Capgemini TME Lab Analysis based on operator annual reports and industry reports

6. 6
“On average Telcos spend
approx. 27% of their overall
opex on customer acquisition
& retention!
Source: CapGemini
CapGemini TME Lab Analysis based on operator annual
reports and industry reports

7. 7
Is this still the right thing
to do?

8. 8
Subsidy
Retail
Commission
Post-pay
Some telcos try to act with brute force …

9. 9
But perhaps the axe is not the best tool …
Starting in the late
1880s, the Swiss
Army Knife was used
to open canned food
and disassemble the
Swiss service rifle,
the Schmidt-Rubin
M1889, which required
a screwdriver for
assembly.

10. DISCOVERY
PLATFORM
INTEGRATED DATA
WAREHOUSE
ERP
SCM
CRM
Image
s
Audio
and
Video
Machin
e
Logs
Text
Web
and
Social
SOURCE
S
DATA
PLATFORM
Business Intelligence
Predictive Analytics
Operational
Intelligence
Data Discovery
Path, graph, time-
series analysis
Pattern Detection
Fast Data
Loading &
Availability
Filtering &
Processing
Deep
History:
Online
Archival
ACCESSMANAGEMOVE
UNIFIED DATA ARCHITECTURE
Business Conceptual View
Fast-Fail Hypothesis
Testing
Teradata Customer Management Cases
RETENTIONVALUE MGMTAQUISITIION
Integrated
Comm.,
Price Promo
& Subs
Avoiding
churn
inducing
upsell
Avoid
Useless
retention
Low Affinity
Products
Under-
estimated
Usage
Elasticity
Insufficient
Retention
Manual
Portfolio
Mgmt.
Product
Cannibi-
lization
CEM based
retention
Integrated
Comm.,
Price Promo
& Subs
Avoiding
churn
inducing
upsell
Avoid
Useless
retention

11. 11
Example 1: Churn inducing upselling

12. 12
Use Case Example 1: Avoiding useless retention

13. 13
Avoid useless retention
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
0
2000
4000
6000
8000
10000
12000
10% 14% 18% 22% 26% 30% 34% >38%
Numberofcustomers
Saving potential actual product compared to competition
Churnrate
Price independent churn
Price related churn
20.000
16.666
13.333
10.000
6.666
3.333
0
3% 6% 9% 12% 15% 18% 21% 24%
6%
5%
4%
3%
2%
1%
0

14. 14
Use Case Example 2: Avoid churn inducing upsell activity

15. 15
Avoid churn inducing upsell activity
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
0
2000
4000
6000
8000
10000
12000
10% 14% 18% 22% 26% 30% 34% >38%
Numberofcustomers
Saving potential actual product compared to competition
Churnrate
Price independent churn
Price related churn
20.000
16.666
13.333
10.000
6.666
3.333
0
3% 6% 9% 12% 15% 18% 21% 24%
6%
5%
4%
3%
2%
1%
0

16. 16
Use Case Example 3: Acquiring customers for the
right/best price

17. 17
How can you help reducing product cannibilization?

18. 18
Value of customer management opportunities
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
70,0%
80,0%
90,0%
100,0%
0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0%
Useless Retention
Underestimate
d Usage
Elasticity
Product
Cannibalization
Integrated Subs
& CommisionsInsufficient Retention
Manual
Portfolio
Maintenance
Low Affinity
Upselling Offer
Billing errors
Overall potential calculates as 7,1% of total company revenue
Saving
potential
[% of
opportunit
y value]
Value of
opportunity [% of
company revenue]

19. 19
Summary & Outlook

20. 20
Dr. Stefan Schwarz
Director Industry Consulting Telco,
Media & Entertainment
TERADATA
M: +49-173-74-88381
stefan.schwarz@teradata.com