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Telecom Italia WirelineSetting the Tone for Continued Growth

Riccardo Ruggiero

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The Wireline growth approach

Core VoiceBusiness

Broadband

EuropeanProjects

Increase loyalty and

expand usage

Expand market

penetration and enrich

user experience

Expand growth

opportunities in broadband

• Increase bandwidth• Content strategy• Private and public WiFi

• New generation of handsets (corded and cordless) with mobile-like interface

• Phones equipped with video capabilities • Simple, effective, user-friendly Value

Added Services

• Develop broadband facility-based operations in selected areas

• Leverage on assets and capabilities successfully developed in the domestic market (seamless platform)

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Core Voice Business

Broadband

European Projects

Agenda

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New generation of handsets

Expand the range of Aladino’s cordless family:

• Expand the range of handsets with mobile-like functionalities and user-friendly interface

• Extend the features to access new services (EMS, MMS, videocall, etc.)

• Continue to improve the “look and feel” and ease of use of terminals

Increase loyalty and expand

usage

Aladino Menu

MessagesCall

Register

HandsetSetting Base

Setting

ClockTI

Services

Registration

GamesContacts

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Aladino’s Cordless Family:low-end/mid range segments

<€70

€70-100

over€100

LoudspeakerCall ID registrySMSAlphanumeric memory

Download of logos and ring tonesSIM reader Color displayLoudspeakerCall ID registrySMSAlphanumeric memory

ALADINO SLIMSlim (lithium batteries)5 games, 15 imagesMultiple phone books with PIN-controlled accessPoliphonic ringtones

ALADINO YOUNGColor Display


usage

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Aladino’s Cordless Family:high-end segment

>€100

Trendy and „exclusive“Small, handySophisticated designDownload of logos and ring tonesSIM reader Color displayLoudspeakerCall ID registrySMSAlphanumeric memory

ALADINO MICRO Small size phone

ALADINO MMSMMS with integrated cameraT9

ALADINO FLIP MMSMMS with integrated cameraT9


usage

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Aladino WiFi

Multi-number enabler (personal communication)

Color graphic display (65.000 colors)

SIM Card reader

Contacts (300 numbers)

VIP List

SMS/MMS/EMS

Call ID registry

Icon menu

Multilanguage menu

Games

Polyphonic tones

Colored images as wallpaper

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The new corded multifunctional Videophone

- Monitor: color, 3.5 inches LCD, imagequality control, hinged base

- SMS messages and E-Mail- Messages to national Fax numbers- Downloadable Poliphonic Ring Tones- Phone book- List of last 20 received calls- List of last 20 unanswered calls- List of last 20 dialed calls- Incoming call ID display- Loudspeaker- Mute- Microphone power controls- Alarm Clock- Calendar- Italian and English menu- Available with PABX interface


usage

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Not only a videophone

The Videophone does not only enablevideocommunication, but gives access to allTelecom Italia services


usage

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Videocommunication Proposition

In a world of “plain old phones”, most of which rented, the launchof innovative phones equipped with video capabilities is a unique opportunity tocompletely renew the largeinstalled base of terminalsand enable it for VAS usage


usage

• Offer to be launched in April

• Service Coverage: 100%from day 1

• One single traffic pricealigned to long distance average prices (no distinction between local-national or peak-off peak)

• Terminal selling proposition: Buy or Rent

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VAS: 4 star Services

SERVICES

• Voice messages

• Voice mail• Contacts• Wake up call• Exact Time

INFO

• Pharmacy• Taxi• Traffic• Flash News• Weather• Stock

Exchange

LEISURE

• Horoscope• Movie

Theatres• Quiz

TI PRODUCTS

Residential• Alice• Hellò Sempre• Hellò Forfait• ISDN• Registro

Chiamate, Segret., STS, Rubrica, Chat SMS

• Tutto4starBusiness• Smart• Teleconomy• ISDN• Registro

Chiamate, Segret., STS, Rubrica

• Tutto4Star

EMERGENCY

• Polizia• Carabinieri• Vigili del Fuoco• Guardia di

Finanza• Guardia costiera• Telefono

Azzurro• Antincendi

Boschi• Emergenza

Sanitaria

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VAS Package Example: “Tutto 4 star”

CHAT SMS• Unlimited fixed to fixed SMS• Unlimited fixed to fixed voice messages• 10% discount on Fixed to Mobile SMS

• Calls ID Registry

SERVICES

• Voice messages

• Voice mail• Contacts• Wake up call• Exact Time

INFO

• Pharmacy• Taxi• Traffic• Flash News• Weather• Stock

Exchange

LEISURE

• Horoscope• Movie

Theatres• Quiz

TI PRODUCTS

Residential• Alice• Hellò Sempre• Hellò Forfait• ISDN• Registro

Chiamate, Segret., STS, Rubrica, Chat SMS

• Tutto4starBusiness• Smart• Teleconomy• ISDN• Registro

Chiamate, Segret., STS, Rubrica

• Tutto4Star

EMERGENCY

• Polizia• Carabinieri• Vigili del

Fuoco• Guardia di

Finanza• Guardia

costiera• Telefono

Azzurro• Antincendi

Boschi• Emergenza

Sanitaria

• Unlimited access to all 4* services

Integratedpackage at 2.95 €/month (VAT included)

Launchedin January2004

+

+

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Voice Core Business

Broadband

European Projects

Agenda

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Faster ADSL for everybody: more bandwidthat no additional cost

• All 256/128 Kbps Alice clientsupgraded at no additional cost to640/256 Kbps

• All Alice 640 clients enjoyed a reduction in the monthly fee(from 49,95 €/month to 36,95 €/month)

• All Smart 256/128 Kbps clientsupgraded at no additional cost to640/256 Kbps

• All Smart 640/128 Kbps clientsupgraded at no additional cost to1280/256 Kbps

SmartAlice

Download 640 Kbps

Upload256 Kbps

Download 640 Kbps

Upload256 Kbps

Launched on March 14th 2004

BusinessResidential

Expand market penetration and

enrich user experience

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Rosso Alice, the new “Shopping Center” for broadband content

• PC based, effective interface

• Payment (“just 2 clicks”)• on your phone bill, or• with credit card

• Accessible from any broadbandconnection (not only Alice customers)

www.rossoalice.it

Launched

on March

14th 2004



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Rosso Alice: six content areasSPORT MUSIC MOVIES

NEWS ON-LINE GAMING VIDEO COMMUNITY



Mikado/Bim +* MGM, Universal, Fandango, Cinecittà, Medusa, Warner, Playboy, LuckyRed

Vitaminic – BMG – Sony – EMI – Warner

Matrix, Melazeta, BoontyStudio Vit +*Game Network, Ubisoft

Soccer Milan (MP Web), Inter, Juventus (includes live eventslike Italy’s Cup Final)

Live editions of “La7” News, plus mini video-news

* prospect

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Rosso Alice Commercial Proposition

Package Model : example of multiple contents sold in one package at flat rate price on a monthly basis

1.MILLEGIOCHI (60 Web Games): 2.CINEMA and SUPER Tv (135 movies on demand)3.MUSIC: MTV

Pay per Use Model : some examples•MUSIC BOX: one song from 0,75 to 1,79€, one album from 8,99 to 14,49€

•CINEMA TOP: recent box office hits from 2,00 to 2,50€

Subscription Model : some examples• INTER SHOW: 3,75 € /mo.•BEST OF TV: 4,00 € /mo.



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PCs: the “heart of home communicationand entertainment”

Ease of use

Portability

Interaction

ComputingPower

State of the art

technology

VOD

Work

Games

Music

Photo

News

Mail

Community



Pc penetration on

Italian

households >50%

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• Expand coverage to support market growth, increaseservice appeal and stimulate usage

• direct hot spots development (Major location)• “hot spots in a box” solutions (Minor location)• roaming agreements for international coverage

(Boingo, WBA)

• Increase size of the potential client base• enabling as many users as we can• launching co-branded “WiFi pre-enabled” terminals

• Segmented tariffs and tailored access options

WiFi Strategy Expand market penetration and


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WiFi Offer

WiFi is an appealing “feature” to extend Broadband penetration and usage

COVERAGE PLANLarge Hot Spot: in houseSmall Hot Spot: implemented through a commercial offer proposed to bars, restaurants, cinemas…

ITALY

USA: BoingoEurope&Asia: WBA (Wireless BB Alliance)

ABROAD

TAILORED OFFERBusinessSME Residential

Flat FeePay per UsePrePaid Cards: 5h, 24h, 7 days

PUBLIC AREA

A wide range of offers to fulfill the needs of all customer segments’

PRIVATE ENVIRONMENT Launched

Oct ‘03Launched

May 03

WiFi Private Network• BUSINESS

WiFi LAN• SME

Domestic Cordless Access

• CONSUMER



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WiFi Coverage and Clients Expand market penetration and


Dec 03 Dec 04

272

5,000/5,500

172

262

Dec 03

352

15thMar 04

Major Locations

Minor Locations

WiFi Coverage (in Italy) WiFi enabled customers‘000 customers# active locations

15thMar 04

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Home Vision : The Past

Game Station

TVDesktop



POTS

PSTN

BroadbandNetwork

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PSTN

Home Vision : The Future Expand market penetration and


Remote upgrade / management

BroadbandNetwork

On line Game Station

(Unlimited) Aladino WiFiVideo/MMS personal Phones

PSTN Video/MMS Phone

(Unlimited) PCs(laptop or desktop)with Video over DSL

Video over DSL

• Modular Upgradable Gateway, enabling traditional (PSTN) and innovative (IP) services

• Broaband wired and wireless (DECT and WiFi) LAN, connecting multiple devices (phones, PCs, STB, ….)

• Advanced Personal communication: terminal and services personalization, multi-number, …

Aladino DECT Video/MMS Phone(up to 5 phones)

Set top Box

Broadband LAN

Wi-Fi

Wi-Fi

DECT

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Voice Core Business

Broadband

European Projects

Agenda

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Business Idea:Create a broadband facility-based operator for the provision of communication and value added services to Consumers, SOHO and SME in selected areas, capitalising on assets and capabilities successfully developed in the domestic market

The business idea

An innovative business model:Focus on broadband access and Value Added Services Facility-based infrastructure Focus on selected areas instead of nationwide coverage

TI Wireline intends to seize the biggest european opportunity of the next 2/3 years: broadband growth

Expand growth opportunities in

broadband

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Key strategic elements

• Target: Consumers, SOHO and SME clients

• Focused coverage: the most attractive areas in target markets, with gradual extension. Investments and costs linked to business development and revenue generation: co-location roll-out strictly linked to capacity optimization

• Innovative and integrated (broadband + voice-services) value proposition; applications and value added IP based services

• Facility-based model:. Fully IP based. Backbone and MAN ownership . ULL access

• Effective and efficient distribution channel management (direct and indirect channels)

• In-house control of Customer Care (Billing and Client Relationship) andCustomer Service systems (Provisioning and Assurance) based on a state-of-the-art platform developed for the domestic market (seamless platform)

• Customer oriented lean organization, fully integrated with TI Wireline central functions

• Target: Consumers, SOHO and SME clients

• Focused coverage: the most attractive areas in target markets, with gradual extension. Investments and costs linked to business development and revenue generation: co-location roll-out strictly linked to capacity optimization

• Innovative and integrated (broadband + voice-services) value proposition; applications and value added IP based services

• Facility-based model:. Fully IP based. Backbone and MAN ownership . ULL access

• Effective and efficient distribution channel management (direct and indirect channels)

• In-house control of Customer Care (Billing and Client Relationship) andCustomer Service systems (Provisioning and Assurance) based on a state-of-the-art platform developed for the domestic market (seamless platform)

• Customer oriented lean organization, fully integrated with TI Wireline central functions


broadband

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ConsumerHigh level

Consumer entry level

SOHO

SME

Business

Yesterday’s HanseNet

target segments

Addressable market

extension

Optimization and extension of product portfolio, by targeting all customer segmentsOptimization and extension of product portfolio, by targeting all customer segments

German Operation Relaunch:Repositioned Target and Revised Offer


broadband

Transparency• No minimum contract period• No penalty if customers change their mind• Clear voice tariff structure• Modem always included

Innovation• Introduction/enhancement of innovative

services such as tv based services, innovative terminal, voice VAS, ....)

Offer Structure• Pricing innovation• Improved competitiveness

Addressable Market Extension Revised Offer

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Web

ShoppingCenters

Door 2 Door

• Simple and fast interface to order • Variety of self services offered• Available 24/24 and 7/7

• Presence in every Media Market and in every large shopping center of Hamburg

• Home visits of qualified agents

Call Center • Available 24/24 and 7/7• Sales, Service and technical hotline

German Operation Relaunch: Redesigned Sales Channel Approach


broadband

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German Operation Relaunch:Improved quality of service

• Introduction of seamless European technologies for Customer Relationship Management and Billing (Kenan, Siebel)

• Introduction of seamless European IP based network infrastructure

• Introduction/Deployment of existing innovative services (through new platforms and handsets)

Adoption of TI Wireline platforms, know-how and assets

• Call Center 24/24 and 7/7 for sales and assistance (previously Mon-Fri8-17)

• Easy-to-use services

• Efficient Customer Service and End to End time provisioning (less then 20 days from 2nd quarter of 2004)

• Innovative services

Objectives


broadband

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Metropolitanareas

• Marseille/Aix• Nice• Lyon• Paris

% population coverage about 18%

French Operation: Coverage expansion plan

• Up to a maximumof 13 cities

about 35%

At launch Medium-term

Central offices in

ULL

129by the end of

2003

About 240 by the end of

2004


broadband

New cities: Strasbourg, Lille, Bordeaux, Nantes

about 24%

March 2004

204by the end of May

2004

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French Operation:Network, CC and IT infrastructures

• Backbone and MAN in optical fibre:• 1900 Km of fibre at launch• 3000 Km of fibre planned for the

end of 2004

• Access via ULL (initial use of wholesale offer to shorten time tomarket)

• Native IP network

• Main technological partner:• Alcatel

Facility Based Network

• Call Centres insourced:• 1 Call Centre in Marseille• 1 Call Centre in Amiens

• State-of-the-art informationsystems exploiting the Italianinfrastructure:

• CRM• Billing• DataWarehouse …

• Main technological partners:• Siebel/Kenan• Accenture

Superior Customer Care and IT


broadband

PO


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French Operation: Offer Segmentation

ADSLbandwidth

Alice means …

ADSL andPhone offer

1200 kps

640 kps

256 kps

ADSL and

PhonePhoneADSL

Pay per use

Flat

First operator in France to introduce:• ADSL with no monthly fee; • Bundle of ADSL and line rental (both metered and unmetered)

First operator in France to introduce:• ADSL with no monthly fee; • Bundle of ADSL and line rental (both metered and unmetered)


broadband

VoiceVAS

Broad Band VAS

Content VAS

• Innovative and advanced handsets (Aladino)

• Voice portal (à la 4star)• SMS/MMS• Advanced voice mail

• Advanced messaging• Video communication• Multi access Parental control

• Broadband portal (a la RossoAlice)

Offer Structure Planned Services

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European Projects: Total Customer Portfolio Expand growth opportunities in

broadband

Dec 02 Sep 03 Dec 03 Mar 15th 04

70,5

86

105

129

German Operation

1.7AverageMonthlyAdditions(‘000)

6.3 9.6

Oct 03 Dec 03 Mar 15th 04

6

45

95

French Operation‘000 customers ‘000 customers

Daily acquisitions* (units)

600 2,100

* peak in the period

wireline 3 setting the tone final - gruppo telecom … · setting the tone for continued growth ......

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