Transcript Marketing Strategy

ITU
Strategic Management Workshop
20 December 2005
TE Marketing Strategy
www.telecomegypt.com.eg
Sanaa Soliman
Marketing Director
1
Agenda
 Overview of Telecom Egypt
 History and Strategy of Telecom Egypt
 Marketing Strategy
 Conclusion
2
Overview of Telecom Egypt
Fast Growing Economy in the Middle East
GDP Growth
Selected Statistics (December 2004)
2004-08 Real GDP CAGR
70m
 Nominal GDP:
$77bn
 GDP per Capita:
$1,094
 Fixed Line Penetration:
13.6%
 Fixed Line Subscribers:
10.3m
 Mobile Penetration:
10.8%
 Mobile Subscribers:
7.6m
4.8% 4.8% 4.7%
4.4%
Jordan
3.4% 3.1%
Poland
Egypt
Bulgaria
Czech
Morocco Hungary
USA
EU
Source: Global Insight, Q2 2005.
4.4%
11.0%
Jordan
Morocco
12.1%
Tunisia
6.9%
13.6%
Egypt
Algeria
14.8%
Saudi
Arabia
27.3%
UAE
19.2%
27.6%
Turkey
Kuwait
28.4%
34.0%
Czech
Republic
Russia
35.1%
Poland
Fixed Line Penetration
Hungary
Note: Data as of 2004 Year End.
Source: Telecom Egypt, Global Insight, Mobinil, Vodafone Egypt.
4.1% 3.9%
1.8%
39.3%
 Population:
Source: Analysis, International Telecommunications Union.
3
Overview of Telecom Egypt
Sole Fixed Line Operator in Egypt
Players
Domestic Fixed
Line
 Telecom Egypt is the sole operator in
the voice segment
Recent Developments
 Liberalised, but no alternative
network operators to date
 200+ ISPs in the internet segment
 TE sole network operator
 Telecom Egypt sole provider
international access
 2 new international gateway
licenses to be offered
International
 Mobinil
Mobile
 To be liberalised in January
2006
 Vodafone Egypt
 Third mobile license to be
issued in 2006
Source: Telecom Egypt.
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History and Strategy 150 Years of History
1854
 First telegraph line established between Cairo and Alexandria
1881
 First telephone line between Cairo and Alexandria
1957
 The Arab Republic of Egypt Telecommunications Organisation (ARETO)
established as the exclusive provider of all telecommunications services
in Egypt
1998
 Transformed into a joint stock company and renamed Telecom Egypt
 Telecom Regulatory Agency (TRA) established, later renamed National
Telecom Regulatory Agency (NTRA)
2003
 Law 10 mandated the liberalisation of international access by 1 January
2006
200305
 Acquired and increased minority stake (currently at 25.5%) in Vodafone
Egypt
2005
 Telecom Egypt issued the largest corporate bond in Egypt to date,
raising EGP 2 billion
Source: Telecom Egypt.
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Marketing Strategy
 Key strategic goal is to grow revenues and maintain or improve profitability
 Telecom Egypt has segmented its customer base in order to align its sales and
marketing efforts more closely to the products and services appropriate to each
segment
 Migrate customers from less profitable segments to more profitable ones through
bundling strategy and other marketing incentives
 Telecom Egypt aims to achieve its strategic goals by focusing on three main areas:
 Pricing
 New and improved & products & services (including bundled offerings)
 Enhanced customer experience
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Marketing Strategy
Strategy
Programme
Pricing Strategy
 Rebalanced tariffs to reflect cost of service
 Maintain competitive long-distance and
fixed to mobile tariffs relative to mobile
tariffs
 Evolve toward flatter pricing for volume
customers
 Win back traffic from mobile substitution
 Managed IP-Voice flat tariff schemes
 Volume tariffs
 Post Liberalisation
 Introduce bundled offerings of
subscription and inclusive minutes
 Contract commitments for volume & lines
with reconciliation at period end
New and Improved Products and Services
 Align TDM and NGN IP services platform
to ensure consistent product definition,
price and profitability
 Develop Value Added Service bundles to
stimulate voice traffic
 Develop a single branded portfolio of
bundled voice and data services
leveraging common distribution, customer
care and billing
Segment driven
Ongoing
 Large and medium enterprises – multi-site
managed voice and data solutions with
dedicated or shared business solutions
 All subscribers – develop Value Added
Services bundles which stimulate voice
traffic
 All subscribers – Development of a single
branded portfolio of bundled voice and data
services leveraging common POS,
Customer Care and Billing
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Marketing Strategy
Strategy
Enhance Customer Experience
 Build the technical capability,
process and training to retain
customers
Programme
Segment driven
Ongoing
 Develop segment specific customer care
 Enterprises – Appointment of skilled Key
Account managers to deal with all
requirements, including business sector
specialisation
 Individual subscribers - offer enhanced website segmented by subscriber type with
improved facilities including ordering and
activation of VAS
 More Customer Service outlets in better locations
 24 x 7 Customer Contact Centre offering service
ordering, fault reporting, information services
 Adopt Customer Service Assurance Programme
for all customers with eventual shift to
compensation backed Service Level Agreements
for large customers
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TE Data Strategy
Short term
 Aggressively acquire ADSL customers and grow market share to capitalise on the
current growth in the market
 Provide service differentiation through cutting edge customer service, support and
high speed connections
Medium term
 Retain Existing subscribers, reduce churn and increase ARPU by increasing
customer stickiness through VAS (e.g., IPTV, VoIP, broadband gaming)
Long term
 Single billing
 Postpaid / prepaid billing
 Metered / limited bandwidth services
Source: TE Data.
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CAT Strategy
 Target high value residential and corporate customers
 No teledensity obligations or targets
 Focus on high value customer segments with higher ARPU rather than on
market share
 Compete on quality rather than price by offering superior customer care,
innovative packaging and rapid response time
 Begin by targeting business customers’ requests (new as well as from existing
waiting list) and offer attractive packages for business customers
 Serve corporate customers through a direct sales force. Serve residential
customers through an indirect distribution network of 3,000 shops nationwide
(distributors of prepaid cards, CPE’s, etc.)
Source: Telecom Egypt.
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Conclusion
 Key elements of value creation strategy
 Increasing ARPL
 Tariff rebalancing
 Addressing competitive threats
 New services (broadband and IP services)
 Exploit TE’s position as only fixed line network operator in Egypt
 Optimise asset base
 Disciplined capex strategy
 Targeting profitable new customers
 Exploit growth opportunities in new geographic markets (Algeria) and new product
offerings (triple-play)
 Cultural shift from supply-based to demand-oriented organisation
 Transitioning Telecom Egypt to face the challenges of a progressively more liberalised market
Source: Telecom Egypt.
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