Introducing Analysys Mason
Expertise in pricing
David Eurin
June 2007
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Analysys Mason’s pricing specialists have helped clients
to improve ARPU by 4–8% and obtain higher margins

We have a proven track record in the design and optimisation
of telecoms tariffs, based on an analytical toolset and approach developed
over the last ten years

Our approach integrates:


alignment of pricing strategy with overall strategic objectives and
assurance that short-term pricing decisions support a long-term
vision

quantification of the likely impact of these changes on revenues and
margins
Our extensive experience in telecoms pricing provides insight into the pricing
approaches to adopt:


wide international experience of what works and what
does not work
Alignment of pricing strategy
Overall
strategic objectives
Market demand
and expectations
Pricing
strategy
Regulatory
environment
Quantification of impact on revenue and margins
proprietary tools and proven techniques – such as our
PriceManager tariff analysis engine, the identification of pricing
levers, and the analysis of tariff effectiveness
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Our methodology covers strategic analysis, tariff
development, launch and feedback
Agree strategic
objectives
• Analyse current
situation
• Develop and agree
strategic objectives:

overall

by market
segment
Analyse current
revenue base
• Develop bottom-up
model of revenue
base
• Analyse competitive
positioning and tariff
effectiveness
• Identify key pricing
levers to effect
change
Generate
options
• Brainstorm options
• Benchmark
experiences from
other markets
• Develop options from
key levers identified
previously
Refine options,
prepare and launch
tariffs
Monitor market
response and learn
• Model revenue
• Collect feedback
impact of options

user behaviour,
market share

competitor
response

KPIs
• Undertake primary
market research
• Iterate and develop
final tariffs
• Manage the launch
process
• Evaluate and learn
(‘real elasticities’)
Iterative process (on quarterly basis)
to build on expertise and fine-tune positioning
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Our pricing simulation tool PriceManager performs
tactical positioning analysis to optimise ARPU and margins
PriceManager enables rapid analysis of current position and simulate the impact of future propositions
Price comparison
• Rapid and detailed price comparison
tool, allowing detailed evaluation of the
positioning of tariff plans
• Impact analysis tool, enabling rapid
analysis of new tariff plans
• Rapid comparison of ARPUs resulting
from different tariff plans, customer
profiles and additional options
Tariff plan positioning
• Clear evaluation of the positioning of
tariff plans
• Analysis of competitive positioning and
tariff effectiveness
• Comparative analyses can be created
in seconds, either through a predefined interface or directly by
browsing the model
Impact on revenues and margins
• Analysis of impact on revenues and
margins of new or modified tariffs
(taking into account modified customer
usage)
• Detailed revenue breakdown – for
example, by destination and time of
day
• Profitability analysis of current and
planned tariff plans
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Our pricing expertise has helped operators increase
revenues and market positioning
Project scope
Client
Results
Tariff optimisation
European mobile operator
• Tariffs approved by the board and implemented
• Revenues increased 4–6%
Tariff optimisation
Emerging mobile operator
• Tariffs approved by the board and implemented
• Competitiveness enhanced, increasing market share
• ARPUs increased 6–8%
Tariff optimisation
Emerging fixed-line incumbent
• Tariffs approved by the board and implemented
• ARPUs increased 5–8%
Service launch
and tariff design
European fixed-line operator
• Highly successful launch
• Client is now a major competitor
Review of tariffs
European mobile operator
• Identified key areas of competitive risk and imminent churn
• Recommended and validated new plans
Positioning/communication
European fixed-line incumbent
• Highlighted areas where competitors were better perceived
• Allowed new tariff plans to focus on the most important aspects
PriceManager implementation
European incumbent mobile operator
• Client able to specify tariffs for a major new product launch with clear understanding
of revenue impact
PriceManager implementation
European mobile group
• Identified competitive positioning in each market
Forecasting implementation
Emerging mobile operator
• Fed budget, business plans and holding reporting tools
• Developed precise forecast on traffic and revenue
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The implementation of tariff promotions based on PriceManager
analyses led to a 22% uplift in outgoing national ARPU of a
mobile operator
Business challenge
•
The largest mobile operator active in an intensely competitive and growing market wished to analyse its revenue and margin streams and subsequently
implement profitable, competitive tariff plans and promotions
•
The operator’s objective was to sustain a large market share but not at the expense of reduced profitability
•
•
•
•
•
Implemented our PriceManager tariff analysis and simulation tool
Analysed the operator's subscriber base and identified key subscriber
segments for both retention and usage stimulation purposes
Assisted in the development of new tariff plans and promotions
designed for retaining customers and increasing voice service usage
Helped designed a tariff roadmap for the year to come, in line with the
strategic objectives of the company
Trained the client’s staff in the use of PriceManager
Illustration of output
Outgoing national ARPU (arbitrary units)
Approach
Evolution of outgoing national ARPU of prepay customers
6
ARPU of subscribers taking the promotion
5
4
Monthly ARPU of subscribers taking
the promotion
+64%
+38%
ARPU of all subscribers
3
Monthly ARPU of all subscribers
+42%
2
+22%
1
ARPU of subscribers not taking the
promotion
Promotion
0
Launch
-15 days
Promotion
launch
Launch
+15 days
Benefits and results
•
•
We helped to develop a seasonal promotion and subsequently analysed its impact on ARPU
After a two-week implementation, monthly outgoing national ARPU rose by 22% and overall monthly prepay ARPU rose by 8%
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David Eurin
david.eurin@analysysmason.com
Analysys Mason Limited
Bush House, North West Wing
Aldwych, London WC2B 4PJ, UK
Tel: +44 (0)20 7395 9000
Fax: +44 (0)20 7395 9001
www.analysysmason.com
288-182
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