Telecoms Loyalty and Churn:

How to retain customers in today’s competitive and convergent markets

December 6, 2011 Moscow

About ETNO

ETNO’s 40 full members and 10 observers from Europe and beyond represent world leading telecoms operators and ICT manufacturing providers.

ETNO members and observers account for an overall turnover of €600 billion and 1.6 million employees.

Through their investment and innovation efforts, ETNO members and observers directly contribute to bringing the benefits of broadband to all, thereby achieving the goals of the Digital Agenda for Europe.

ETNO Objectives

Promote its members’ common interests by developing ETNO positions and communicating them to European Union policy makers

Contribute to the development of a transparent and fair commercial and regulatory environment for the European telecommunications market and for its members when operating outside Europe

Facilitate cooperation and coordination of activities between Members

ETNO membership

Full Members• European entities offering electronic communications networks

Observer Members• E-communications networks and service providers from outside

Europe• ICT equipment manufacturers

ETNO members participate in ETNO 14 technical working groups and contribute to define joint European positions. ETNO members benefit from full insight into EU policy and regulatory developments. ETNO provides its members with a platform for exchange and cooperation among industry players.

*

* T-Group companies who are members of ETNO: Deutsche Telekom, Hrvastki Telekom, Magyar Telekom, Makedonski Telekom and Slovak Telekom,

ETNO observers

ETNO on the International scene

Cooperation Agreements with SAMENA Telecommunications Council (South Asia, Middle East and North African association) and US Telecom. Future cooperation with Latin American operators.

Regular information exchange and joint statements on regulatory and policy issues of common interest.

Joint meetings and events (ETNO/SAMENA first CEO Meeting, Istanbul June 2011, ETNO Forum in Washington November 2011).

Sector member of the ITU.

Telecoms Loyalty and Churn: EU Telco’s strategies

Commitment to enhance Quality of services for both fixed and mobile services

Strengthen the customers’ relationship through ancillary services: security, protection of data, customer care, online alternative dispute resolution mechanism

Offering new type of services that combine services that were before separated: triple play packages combining voice, data tv and bundle offers delivered with better prices for consumers.

Better care for new customers: children protection, safer internet, services to disabled and elderly.

Differentiated mobile and fixed data offers tailored to needs

Customer retention:The European Context

Strong competitive pressure at retail level

Ex-ante regulation at wholesale level

Increased network and platform convergence/ Fixed and mobile substitution

Net Neutrality debate: threat to innovative business models and customer offers?

Changing landscape:

Changing landscape:Consumers are driving

Commercial trends: continued internet traffic growth and fall in out of bundle revenues

Market trends observed in the NetherlandsKPN: Use of instant messaging apps and other ‘over the top’-applications leads to declining SMS traffic; lower out of bundle revenuesCommercial strategies of MNOs include attempt to increase billed ARPU via monthly fees

Cisco VNI finds continued data growthInternet traffic will increase fourfold over next 5 years. Overall, IP traffic will grow at a compound annual growth rate of 32 percent 2010 - 2015.Traffic from wireless devices will exceed traffic from wired devices by 2015

Global Consumer Internet Traffic

4968 6017 7277 8867 11040137974672

8079

12146

17583

24357

33620

2888

3771

5054

6523

8375

10797

0

10000

20000

30000

40000

50000

60000

70000

2010 2011 2012 2013 2014 2015

PB/m

onth

File Sharing Internet Video Other

Rapid traffic increase contrasts with declining revenue for EU telecoms sector

2008

First EU digital Scoreboard*:

Negative revenue growth driven by decline in fixed and mobile revenueDecline in revenue linked to structural adjustments in the sectorDisconnect between network revenues and revenues from OTT applicationsInvestment in mobile and fixed equipment no longer increasing

2009

*Digital Agenda Scoreboard Report, SEC(2011) 708

Managed services and quality of service classes promote innovation and consumer choice

Commercial service differentiation e.g. regarding to quality is a reality in the internet today; emergence of new models should not be restricted ex-ante

Network innovation and quality of service (QoS) increase efficiency of the network and enable new services over broadband. New commercial models on two-sided markets can open up possibilities for new services and attract new customers to internet-based services

Europe should promote open and interoperable standards for IP-based Interconnection at specified quality of service

QoS Interconnection alongside public internet (e.g. IPX-based) and QoS classes alongside best effort services in the public internet

Safeguards against anti-competitive behaviour: Competition on retail broadband markets (infrastructure or service-based)Increased end-user transparencyContinued availability of best effort internetCompetition law tools

More information…

www.etno.eu

#ETNOAssociation