Part of the Orange group

Mobile First

About Sofrecom

Sofrecom, an Orange subsidiary, has developed over 50 years unique know-how about operators’ businesses, making it a world leading specialist in telecommunications consultancy and engineering.Its experience of mature and emerging markets, combined with its deep understanding of the structuring changes affecting the telecoms market, make it a valued partner for operators, governments and international investors. In recent years, 200 major players in over 100 countries have entrusted strategic and operational projects to Sofrecom.In the ongoing digital revolution, Sofrecom assists its customers’ digital transformation, boosting their operational performance and service differentiation. It has developed highly innovative approaches to specific challenges such as customer experience management, B2B, smart services, security, m-banking, e-government and change management.Sofrecom’s strength lies partly in its diversity, with 1300 consultants and experts of 34 nationalities working in 10 agencies around the world.In 2015, Sofrecom earned the AFNOR Diversity Label for its policy of proactively promoting professional diversity, equality and non-discrimination.Sofrecom is above all a network of men and women, a powerful network of know-how and expertise that ties its personnel to customers, Orange experts and industrial and local partners.Sofrecom’s Know-How Network is also the guarantee of effective transfer of know-how and skills for sustainable transformation based on internationally certified methodologies.

Sofrecom, The Know-How Network

CONTENTS

p. 4-5 Digital players’ movements in 2015

p. 6-7 Mobile access

p. 8-9 Mobiles handsets and usages

p. 10-11 A mobile user day

p. 12 Connected objects: what’s the best strategy for operators?

p. 13 The “Four Ds”: pillars of the digital revolution

p. 14 The digital transformation in full swing

p. 15 Asian operators and OTTs: a marriage of convenience?

p. 16 Flux Vision: a marketing innovation based on data analytics

p. 17 Operators as key players in the urban ecosystem

p. 18 Customer scoring: a monetizable asset for operators in mobile financial services

p. 19 Operators and GAFA now part of the FinTech ecosystem

p. 20 “Mobilizing” customer care to make the customer experience even more fluid

p. 21 Orange Smart Store: the smartphone brings a new dimension to the in-store experience

p. 22 The cellphone leverages corporate performance

p. 23 Mobile cybersecurity: a new challenge for enterprises

p. 24 The Sofrecom Know-How Network as seen by…

p. 25 Portraits of four Sofrecom market intelligence experts

Jacques Moulin, Sofrecom CEO

These days everyone uses their cellphone very frequently for email, chat, weather, news and lots of other practical services. Whether it’s a simple “feature phone” designed for an emerging market or a smartphone

in a mature one, the mobile phone is now everyone’s preferred B2C and B2B interface. Here comes the Mobile First era!

In addition to famous apps such as Facebook, WhatsApp and Google Maps, new ones are appearing all the time to enrich the mobile universe. In 2016, there is a lot of talk about SoundCloud for music streaming, News Republic as an aggregator of news channels, Cardboard that will give us a first taste of virtual reality on the smartphone, and TeamViewer for remote access to computers.

Operators are adapting their network capacities to meet users’ needs, making massive investments even if the long-term profitability is uncertain. But the impact of mobile usages is not just a question of infrastructure, since they allow operators to expand their audience and monetize data. How can a close relationship with the end-user be preserved when so many new Over-The-Top (OTT) applications threaten to disintermediate carriers? Can operators innovate to invent compelling new services and remain more attractive than OTTs?

OTTs are very user-centric and promise an exceptional experience. Indeed, the customer experience is probably the biggest transformation challenge faced by telcos and legacy service providers. The only possible response is to provide a seamless multichannel customer experience in order to conserve their contact with end-users – who can instantly report their experience to peers via social networks.

Among the new trends we notice for 2016, it is perhaps virtual reality that will spur operators to review their service value proposition and their ways of interacting with customers. In games, leisure and tourism, access to content is taking on a new dimension with irresistible, immersive augmented reality, which is sure to change – once again – expectations in terms of the “user experience”.

All these evolutions upset today’s operating modes and impose a radical transformation of organizations in order to become “Customer First”.

Sofrecom, The Know-How Network

EDITO 03

Mobile First

Digital players’ movements in 2015

SingTel reveals its repositioning on ICTs and digitalThe Singapore-based operator revamps its brand to rid itself of an entirely telecoms image and clearly affirm its evolution towards ICT and multimedia activities. SingTel has developed its cloud computing business and in 2012 bought out the digital advertising platform Amobee. In mid-2015 it launched its HOOQ video-on-demand service.

Facebook targets professionals with Facebook at WorkThe social network giant tests a pro version with 300 enterprises. FB@Work comes with the main functionalities of the mass-market version, but these are optimized for professional communication. Facebook is also making a strategic entry into the B2B market by leveraging service developments initiated by its own employees.

Telefónica and Orange cooperate on smart citiesThe two operators have joined forces with the IT company Engineering (Italy) and Atos (France) to launch Fiware, an open source community to foster and support the evolution of standards for cloud computing, IoT and big data technologies in order to manage and exploit the data generated by smart cities.

Ooredoo to concentrate on B2B growthThe Qatari operator reached 100 million customers in 2014 in North Africa, the Middle East and Southeast Asia. Now it intends to accelerate its B2B growth in the latter two regions where its wireline and wireless services specifically for small business are already successful.

Twitter launches the Periscope live video appWith Periscope users can broadcast live audio and video content from their smartphone to their social followers so that they can comment on it. Video links can also be shared on Twitter to open discussion threads. With this new free application Twitter is challenging the rival live video streaming app Meerkat launched just a week earlier on 17th March. By August 2015, Periscope had 10 million active accounts on iOS and Android.

MTN launches an IoT platform in AfricaThe African operator and Chinese equipment maker ZTE plan to offer enterprises a solution to control and manage their connected objects and SIM cards. MTN will uniformize its M2M SIM cards so that subscribers can enjoy national call rates across all MTN countries in Africa.

European Commission approves Orange’s buyout of JazztelAfter six months of enquiry, Orange gets the European Commission’s go-ahead to purchase Jazztel and become Spain’s second biggest broadband and mobile provider with a total of 16.4 million subscribers after the takeover. Spain is now Orange’s second market and will in future generate 10% of its income.

BT comes back to mobile by acquiring EE UKAs the convergence trend in Europe continues, Britain’s legacy operator spends £12.5 Bn (€17.7 Bn) to buy out the country’s biggest national mobile operator (24 million subscribers).

Telefónica, NTT and SKT invest in the SigFox Internet-of-Things networkSigFox, a French company specialized in networks serving low-energy communicating objects, has raised €100m from seven investors including Telefonica, NTT and SKT which it will use to expand its networks into new territories. It has already deployed networks in 11 countries and is now attacking the American market. It plans to cover 60 countries by 2020.

Google becomes an MVNO in the USA“Project Fi” enables Nexus 6 smartphone owners to access mobile services via WiFi hotspot networks. If no hotspot is available, the phone switches to Sprint or T-Mobile cellular networks; it always chooses the best network available (“always best connected” principle). The service is billed at $20 per month (unlimited voice and SMS) and $10 per gigabyte.

Apple launches its first three Apple WatchesApple launches three connected watches dubbed Classic, Sport and Edition with price tags from $350 to $17,000 (with an 18-carat gold alloy case!). Sales reached 10 million units by the end of Q3 2015.

ITU unveils its new 5G bible “IMT-2020”Following on from IMT-2000 for 3G then IMT-Advanced for 4G, the IMT-2020 designates all the standards for 5G, in other words all the technologies that will be employed from 2020 to provide wireless communication at speeds up to 20 Gbps and latency time of less than a millisecond. 5G will be an essential component of tomorrow’s omnipresent, heterogeneous IoT networks.

European Parliament decides to end roaming fees from June 2017European members of parliament agree to progressively remove roaming fees for incoming and outgoing calls and for data transfers when travelling abroad. From April 2016, roaming charges may not exceed 5 euro cents per minute for voice calls, 2 cents for SMS, and 5 cents per megabyte for mobile Internet. Charges will totally disappear in July 2017. The European Parliament definitively ratified the new legislation in October.

jan. feb. march april may june

04 HIGHLIGHTS

Mobile First Sofrecom, The Know-How Network

ApplePay launched in United KingdomApple launches its mobile payment service in a second market (after the USA at the end of 2014). The service is compatible with the iPhone 6 and the new Apple Watch now in the shops. The iPhone 6, iPad Air 2 and iPad Mini 3 all allow ApplePay to be used for In-App Payments which are made using the TouchID digital fingerprint recognition function. All the major British banks are supporting the service.

Orange expands in Africa and Middle EastOrange creates a holding covering all its Africa and Middle East subsidiaries (20 countries, 100 million subscribers) to give them improved financial visibility. In parallel, the operator enters discussions with Airtel to acquire four of its African subsidiaries (in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone) and increases its shareholding in the Moroccan operator Meditel to 49%.

Orange launches a crowdfunding platform in AfricaThe Orange Collecte platform enables Orange customers to finance their projects by soliciting funding from their personal networks (family, friends, etc.). Contributors can create a kitty that they feed using their Orange Money electronic wallet. Orange Collecte is now operational in Ivory Coast.

Agreement between Europe and China to develop 5GThe European Commission and China are to create joint research programs that will involve European and Chinese companies in work on 5G mobile. The idea is to create new 5G services and applications, in particular for the Internet of Things. Europe already has similar agreements with South Korea (June 2014) and Japan (June 2015).

Google incorporates cellular connectivity in Android WearThe integration of cellular connection in the Android Wear operating system designed for smartwatches and other wearables opens up new usage possibilities. Watches running Android Wear with their own cellular connection will automatically switch to 3G or 4G network when WiFi or Bluetooth is no longer available, making them totally independent of smartphones.

Orange and Engie team up to deliver electricity in AfricaOrange has signed a partnership agreement with the energy company to supply electricity to rural African communities and to optimize the energy usage of its telecoms infrastructures. The two groups intend to test different electricity delivery means specifically designed for rural populations (who will pay their bills using Orange Money).

Nokia sells Here to three German auto makers for €2.55bnIn an attempt to outpace Google in the autonomous vehicles business, Audi, BMW and Daimler acquire Nokia’s mapping software “Here”. The sale will be finalized at the end of Q1 2016.

Google restructures and creates AlphabetThe creation of the Alphabet holding allows the Californian giant to separate its advertising business from its research and innovation activities which include Life Sciences, Calico and X Lab. This new organization underscores the scale of the Group’s diversification.

Searches via smartphones now exceed those on PCsFor the first time, the number of web searches via mobile devices exceeds those via office computers in ten countries, including the USA and Japan. This will oblige Google to adapt the format of its advertisements to cellphones. Amit Singhal, in charge of Google Search business at Alphabet says the number of Google searches is now 100 billion per month.

Bharti Airtel sells towers in Africa for $1.7 BnBharti Airtel has sold 8,300 mobile sites, confirming the tendency of cellcos to spin off their assets in Africa. The towers sold in seven of Bharti Airtel’s thirteen markets represent 60% of its African assets and will enable the operator to pay off some of its debt. This third wave of sales follows others in July and September.

Nokia shareholders agree to acquire Alcatel-LucentThis rapprochement of the two equipment makers, both of which have suffered financial difficulties, will create a world heavyweight able to challenge two market leaders: Ericsson (Sweden) and Huawei (China). Nokia’s managers say they are confident of their future success in view of the partners’ complementary portfolios and the similarity of their corporate cultures.

Several large American entrepreneurs join forces to create OpenAIOpenAI is a non-profit organization dedicated to research on artificial intelligence. Its prestigious investors, including Elon Musk (SpaceX and Tesla Motors), have chipped in $1M of seed capital. To fill the post of Research Manager, OpenAI has managed to recruit Ilya Sutskever, a deep learning specialist and former manager at Google Research. OpenAI researchers will be encouraged to publish their work and their patents will be shared with the scientific community.

july august sept. oct. nov. dec.

Sofrecom, The Know-How Network

HIGHLIGHTS 05

Mobile First

Mobile access

Sour

ce: I

nfor

ma

WCI

S, S

ofre

com

(Jan

uary

201

6)

Sour

ce: E

rics

son

Mob

ility

Rep

ort (

Nov

embe

r 201

5)

2

4

6

8

10

Dec. 12 Dec. 13 Dec. 14 Dec. 15 Dec. 16 Dec. 17 Dec. 18 Dec. 19 Dec. 20

2G (GSM, CDMA)

4G (LTE)

8.5

6.3

3G (W-CDMA/HSPA, TD-SCDMA, CDMA 2000 1xEV-DO)

5

10

15

20

25

30

Wireline telephones

Wireless telephones

PCs, laptops, tablets

Non-cellular consumer electronics devices

Cellular M2M and consumer electronics devices

Non-cellular M2M

20212015

2.60.4

1.6

2.4

7.1

1.3

10.7

1.5

3.1

2.8

8.7

1.4 + 8%

+ 23%

+ 17%

+ 94%+ 275%

+ 312%

7.3 BILLION MOBILE CUSTOMERS WORLDWIDEMobile user base and penetration at the end of 2015 (millions and % of the population, excluding M2M)

80% OF MOBILE CONNECTIONS WILL BE BROADBAND IN 2020Evolution of the world mobile user base by technology(billions, excluding M2M)

MORE THAN 25 BILLION CONNECTED DEVICES WORLDWIDE IN 2020Evolution of connected devices(billions, CAGR 2015-2021)

North America

428 M(118%)x 5.6%

Latin America

736 M(116%)x 1.7%

User base Penetration x�YoY growth

Eastern Europe

509 M(37%)x 23%

Western Europe

546 M(130%)x 0.7%

Africa,Middle East

1 332 M(90%)x 7.8%

Asia (mature)

Asia (emerging)

3 482 M(90%)x 2.4%

301 M(124%)x 2.5%

Sour

ce: I

nfor

ma

WCI

S (N

ovem

ber 2

015)

06 KEY FIGURES

Mobile First Sofrecom, The Know-How Network

-28%Expected drop in mobile roaming revenues in Europe in 2017 due to application of new European directives.(Juniper, Dec. 2015)

4.77 BnNumber of unique mobile users in the world at the end of 2015, or a “real” penetration rate of 65.5%. (Strategy Analytics, April 2015)

13%

400 MM2M and consumer electronics devices connected to a cellular network worldwide at the end of 2015. The estimated potential figure for 2021 is 1.5 Bn.(Ericsson Mobility Report, Nov. 2015)

Global cellular activity reaches a new milestone

As many SIM cards in the world as humans!

The number of mobile users worldwide increased by 3.3% YoY in 2015, compared to 7% in the previous year. Across the developed countries, the number rose by an average of 2.7%, driven essentially by connected objects in particular in the United States. But four fifths of new mobile subs are now in emerging countries with 200 million net adds this year, two thirds of them in Asia and Africa. India’s market continues to expand vigorously (+7.3%) and their user base has now reached one billion.

However, we observe a slowdown in some emerging markets due to tougher regulation on SIM card registration (Kenya, Rwanda, Uganda, Thailand, etc.). Pakistan lost more than 15 million users over the year, two thirds of them in reaction to the imposition of biometric identity checks on SIM card owners.

Migration to 4G accelerating

The mobile Broadband base (3G+4G) increased by a further 25% this year and now represents almost half the world mobile base. Although 3G still dominates (more than one user in three), 4G has doubled in number to reach the symbolic milestone of one billion users at the year-end 2015, or 14% of the worldwide mobile base.

Network rollouts and extended 4G coverage enabled Europe to double the 4G user base over the last year; in Latin America it even tripled. A large slice of the total growth is in China which alone connected over 250 million net new subscribers, confirming its status as the world’s 4G leader with 350 million subs, well ahead of the US and Japan (200 and 87 million, respectively). The leader in terms of 4G penetration remains South Korea: 70% of its user base at the end of 2015.

Worldwide revenues up 2.9%

Africa, Asia Pacific and the Middle East account for most of the world service revenue growth, but the North-American market is doing well too. Even in Europe things are improving: the 2.4% decline in revenues in 2014 shrank to just -0.3% this year, notably thanks to better data monetization.

Source: Informa WCIS, Sofrecom (January 2016)

Proportion of enterprises in the world mobile user base at the end of 2015. In Western Europe and North America this figure is 20%.(Strategy Analytics, April 2015)

Sofrecom, The Know-How Network

KEY FIGURES 07

Mobile First

Mobiles handsets and usages

Sour

ce: S

trat

egy

Ana

lyti

cs (J

uly

2015

)

Sour

ce: fl

urry

Ana

lyti

cs (J

uly

2015

)

Regular users(<16 times

per day)

Super users(16 > 60

times per day)

Mobile addicts(60+ times

per day)

784

985

440

590

176

280

+ 26%

+ 34%

+ 59%

Q2 2014Q2 2015

THE SMARTPHONE IS NO LONGER THE RESERVE OF RICH NATIONSSmartphone users worldwide (millions and % of the population, end of 2015)

World Western Europe Eastern Europe North America

Latin America Asia Africa, Middle East

AN INCREASINGLY MOBILE WORLD Daily users of mobile apps (millions)

PENETRATION AND USAGES OF POPULAR MOBILE SERVICESService penetration (% of unique mobile users)

Messaging Distractions

20

40

60

80

music (streaming)

video social network

browsinggamesMMSe-mailIMP2P SMS

North America

218 M(59%)x 12%

Latin America

268 M(43%)x 32%

User basePenetrationx�YoY growth

Eastern Europe

147 M(37%)x 23%

Western Europe

225 M(54%)x 8%

Africa,Middle East

233 M(17%)x 44%

Asia (mature)

Asia (emerging)

1 378 M(36%)x 30%

145 M(61%)x 6%

Sour

ce: S

trat

egy

Ana

lyti

cs (J

uly

2015

). T

he u

ser b

ase

refe

rs to

the

num

ber o

f peo

ple

who

ow

n at

leas

t one

sm

artp

hone

.

08 KEY FIGURES

Mobile First Sofrecom, The Know-How Network

$26 BnValue of the world mobile games market in 2015, up from $10 Bn in 2012.(Deutsche Bank, June 2015)

27%Proportion of smartphones deliveries priced under $100 to Africa and the Middle East.(wholesale price, Strategy Analytics, July 2015)

26%

900 MActive monthly users of WhatsApp in September 2015 (+300 M year-on-year). The Facebook subsidiary is the world’s most dynamic and popular OTT messaging service.(Source: WhatsApp, Sept. 2015)

The GAFA - Google, Apple, Facebook and Amazon - are multiplying their initiatives to connect the next billion internauts and to be present along the entire mobile value chainIn November 2015, Facebook claimed to have 1.5 billion users worldwide, or a fifth of the global population! To continue their expansion, Mark Zuckerberg and the other web giants are now targeting emerging countries. With their handsets, applications and networks, their goal is to ultimately connect the 4 billion people who do not yet have Internet access.

After the handsets …

The GAFA have not been slow to emulate Chinese manufacturers and propose super-affordable, entry-level smartphones: in 2015 they launched models under $100 first in Asia and then in Africa. Microsoft and Mozilla released several models early in the year and in August Google extended its Android One program with the Infinix Hot 2 smartphone launched in Nigeria through the operator MTN.

… and the apps

The arrival of these low-cost smartphones is accompanied by “lite”, less data-greedy versions of popular applications. Google has developed an optimized variant of its search engine and is preparing to integrate in YouTube a function that will allow offline video viewing. The Facebook Lite app adapted for 2G networks was launched in Asia and Africa in January 2015, and Facebook has extended its Free Basics by Facebook app to another nine African countries.

… the networks!

The new challenge for all these big web players is network infrastructures. Google and Facebook have started challenging telecoms network operators in order to sell broadband Internet access in “white areas”.Google is pursuing its development of alternative solutions, for example its “Loon” project to deploy a network of high altitude stratospheric balloons, already tested in New Zealand, Brazil, Sri Lanka and Indonesia. In January 2015, it invested $1 Bn in SpaceX which plans to put 4,000 micro-satellites into orbit.In July, Facebook unveiled its “Aquila” project to deploy a network of solar-powered drones equipped with a high-precision laser transmission system carrying data at up to several tens of gigabytes per second. It will be tested in real conditions in the coming months. In October, Facebook announced a partnership with Eutelsat to launch a geostationary satellite in mid-2016 to cover Sub-Saharan Africa. As we see, there is no shortage of initiatives by the GAFA giants. However, a number of crucial questions remain unanswered, not least the allocation of spectrum.

Proportion of purchases made using a cellphone on Cyber Monday (30th November) in the United States, or $799 M out of a total of $3.1 Bn. (Adobe Systems, Dec. 2015)

Sofrecom, The Know-How Network

KEY FIGURES 09

Mobile First

A mobile user day

of British people pick up their cellphone within 15 minutes of waking to read texts and email and to check out their social networks

of Spanish people prefer to have two phones, one for personal use, the other for work

South Koreans pay their public transport tickets using their smartphone

90% of the British use their smartphone in public transport, mainly to send text messages and play games

of British primary and secondary schools use tablets

Half of all European and American mobile users consult the weather forecast on their cellphone

In France and Britain, 90% of people check their personal smartphone at work, 40% even during meetings

of the French use their smartphone when driving, in particular social navigation and real-time traffic applications such as iCoyote and Waze Social GPS Maps & Traffic

of Chinese people do the same within one hour of waking

53%

50%

2 M

70%

40%

100%

Almost

More than

WAKING UP IN THE MORNING

ON THE MOVE AND IN PUBLIC TRANSPORT

AT THE OFFICE OR SCHOOL

Mobile First Sofrecom, The Know-How Network

10 USAGES

of Nigerians shop using their smartphone

of Nigerians use their cell phone to participate in social networks

of Irish teenagers use Snapchat (compared to 38% in the USA)

Worldwide,

of mobile apps time is spent playing games

of British smartphone owners take photos, and two thirds of these upload their pictures to a social network or share them via IM

of Qataris use a fitness application

61% of Kenyan mobile users send and receive payments via their phone

More than 30 billion WhatsApp messages are sent every day

The worldwide average daily YouTube viewing duration on a cellphone exceeds 40 minutes

20%

35%

52% 43%

95%

24%

AFTER WORK, IN PUBLIC PLACES

WITH FRIENDS

AT HOME WITH THE FAMILY

Sofrecom, The Know-How Network Mobile First

USAGES 11

Connected objects: what’s the best strategy for operators?

12 INTERNET OF THINGS

Interview with Pascale VieljeufDigital Strategy and Communication Director, Sofrecom

By the year 2020, between 30 and 212 billion connected objects* could be interacting and generating a deluge of data of all kinds. What are the principal development paths of the Internet of Things?

P. V. The first development area is obviously the individual. More and more people are adopting devices to monitor their activities: after the smartphone, there are now watches, bracelets, jewelry and clothing with communicating sensors. The web giants are throwing their weight into the balance to accelerate the growth of the Internet of Things (IoT). Apple is setting an example with its recent communicating Apple Watches, while Google and the Levi Strauss jeans company are working hand in hand on the Jacquard project to take the lead on ‘Clothes 2.0’. Even more avant-garde, the Chaotic Moon mobile development studio has designed a connected tattoo that picks up and transmits several biometric parameters! In addition to these ‘wearables’, we find onboard sensors in many other places, notably in homes and vehicles where the IoT holds out much promise, improved safety in particular.

The second IoT development path concerns all the possible ‘connected environments’. First, in the professional sphere, offices, factories and worksites will become increasingly smart, which will help to optimize their activities, for example though predictive maintenance and stricter safety rules. Public environments will also generate more information as they become more networked. Emerging smart city concepts give us a first glimpse of a world totally and permanently connected whose citizens will see radical changes such as better regulated traffic, better security thanks to smart surveillance, better monitoring of epidemics, and an amazing range of geo-

contextualized services to meet every imaginable information need. Already we are seeing rapid development of urban monitoring applications to serve citizens. In the environmental field, the ‘smart grids’ already under trial in many places will make substantial energy savings for households and enterprises. Numerous startups are developing ‘green’ applications: floating sensors in rivers that change color to indicate the water quality (The Living), and portable connected objects that measure atmospheric pollution (Plume Labs), to mention just two examples.

How can operators find a role in this complex ecosystem? And should they?

P. V. Several possibilities appear as soon as we consider operators’ traditional assets:

- At hardware level, in parallel with developments projects with direct or FabLab funding, operators are already adapting their networks to serve connected objects and are initiating customers in the new potential usages made possible by activity and other sensors.

- At service level (B2B, B2C), the aggregation and analysis of data streams opens unprecedented opportunities for operators hoping to lead the field on over-the-Internet services. Orange has opened its Datavenue platform, initially reserved for startups, and created new sections (Live Objects and Flexible Data) to enable companies to improve their customer knowledge and create new services and products.

- Finally at network level, operators must address the vital challenge of carrying the ever-increasing data deluge. They will face new and highly specialized network operators, for example ones deploying Low Power Wide Area Networks (LPWAN, which are long-range, low-bandwidth networks connecting low-energy objects). The firm Machina Research predicts that LPWANs like those of Sigfox, LoRa and Neul will be carrying 14% of all M2M data by the year 2024.

In France, Orange will start by equipping 17 cities in 2016 before densifying its network, to ensure optimal quality of service, as and when it signs up with insurers and building managers.

The IoT network battle is only just starting!

“At last the Internet of Things appears to be taking off, bringing unprecedented opportunities for operators who know how to spot

and exploit them.”

* source: Montaigne Institute, April 2015

Mobile First Sofrecom, The Know-How Network

DIGITAL TRANSFORMATION 13

The first “D” is “Digitization”

Everything that can be digitized in our everyday lives will be. If a process or service can be modeled and represented digitally, it can then be sent over a network, stored and processed. These digital representations of real things can then be reproduced, shared and enriched by others. Combined with smartphones, tablets and electronic sensors in homes and enterprises, digitization will engender more and more information.

The second “D” is “Demonetization”

This occurs when digital inventions become ubiquitous, thanks to the immense market reachable via the Internet and cellphones. Their usage becomes massive and revenues come from advertising (when the service is free) or in some form of hybrid free-paid mode. Digital facilitates the creation of new activities because of the low-cost Internet entry ticket.

In this respect, another “D” (“Disintermediation”) also makes its appearance on the road to demonetization: digital platforms eliminate or weaken intermediaries by encouraging the participation of individuals as new contributors. Notable examples include e-commerce, taxi fleet management, holiday rentals and peer-to-peer lending.

The third “D” is “Dematerialization”

This refers to the replacement of mono-task devices such as the still camera by software functions. Smartphone mass production has enabled them to be equipped with multiple features such as the video camera, GPS receiver, answering machine, dictaphone, barcode reader, compass, flashlight, MP3 player, games console and video player.

Software substitution for hardware is seen at large scale in the giant datacenters built by big web players: formerly hardwired functions are being migrated to programmable software. We are seeing a shift of the IT center of gravity towards technologies developed by startups for cellphones.

The fourth “D” is digital “Disruption”

New digital services perturb the business of existing players and can even replace or destroy their traditional operation modes. Its exposes them to new threats, yet also opens up opportunities. The digital wave has attracted new and unexpected players, more agile than their older rivals. They change the rule of the game and make life difficult for traditional providers who are repeatedly obliged to reconcile their business with new ecosystems.

We see that the “four Ds” fragilize established positions but create new markets, first and foremost for new entrants. For legacy operators the order of the day is now “change fast or be changed”.

The “D”ice are cast…

Analysis by Georges NahonGeneral Manager of Orange Silicon Valley

The “Four Ds”: pillars of the digital revolution

Over the last decade we have seen a convergence of GPS-enabled smartphones and banalized IT infrastructure driven by the web giants. The economy is undergoing a decisive transformation imposed by the “four Ds”.

Orange Institute

The Orange Institute is an international think-tank created and managed by Orange since November 2009. It aims to prepare enterprises for the rapid transformations of today’s networked society driven by digital innovation.

The topics selected are generally disruptive developments that can inspire new ideas among members.

Becoming an Orange Institute member offers a rare opportunity to:- become more aware of the potential of innovation in your organization through contact with a multidisciplinary community of experts from universities, industry and the media;- discover new market perspectives in the world’s most dynamic innovation ecosystems, including Silicon Valley, Japan, China, Israel and Europe.

Sofrecom, The Know-How Network Mobile First

The digital transformation in full swing

14 OPERATOR STRATEGY

Interview with Bénédicte Javelot Orange Group Strategy Director

What are the most notable evolutions in operators’ competitive environments today?

B. J. Fixed-mobile convergence is shaping rapprochements between players in all of

Europe’s national markets, and we are seeing concentration of the mobile market as well. These movements are favorable to investment.

We need to remain alert to the recent successes of cable operators who own very high speed broadband landline infrastructures and aim to become major content and Internet access providers.

In Africa, competition is intensifying, though out of phase with that in Europe. Smartphone penetration, expected to reach 30% within four years, and new 3G/4G networks are engendering a proliferation of over-the-top communication offers that threaten operators’ predominantly prepaid voice and SMS revenues.

Do the network initiatives of web giants (GAFA), such as Google’s stratospheric balloons, Facebook’s drones and SpaceX’s satellites, imply a risk of “uberization” of telecoms services?

B. J. No! “Uberization” refers to the exploitation of consumers’ own goods – for example cars anddrivers with Uber or vacation rental propertywith Airbnb – as ressources by a web company. GAFA initiatives do not fit into this pattern: their prime goal is to win audience. The experimental technologies you mention, which are by no means mature, are intended to bring Internet access to people living in white zones in India, Africa, Indonesia and elsewhere. Their inventors hope to provide an economically viable alternative to costly network deployments in these large regions. However, they can’t operate without using operators’ spectrum, so operators foresee value creation opportunities through “coopetition”. Orange is in regular contact with both Google and Facebook on their projects. On the other hand, we are keeping a wary eye on Apple and Samsung’s “electronic SIM card” initiatives which threaten operators. These new-

generation SIM cards, embedded in a device so they can’t be removed, will allow customers to avoid being locked to a specific mobile carrier, letting them sign up to a provider and switch whenever they want.

How do these evolutions overturn operators’ business models?

B. J. I would not say they overturn our business, but they do illustrate how our environment is in perpetual movement. Our reaction to cablecos must be to guarantee durable access to content in order to increase the value of our high-speed networks and pursue our convergence strategy. To counter the OTT offensive in the AMEA zone, the challenge is to launch abundant, attractively priced access offers, as in Europe, and then monetize data to generate new revenues. Embedded e-SIMs will oblige us to accelerate our convergence actions and mobile “shared data plans” to offer consumers global solutions. The GSMA plans to standardize e-SIM to allow operators to maintain control of customer profiles downloaded on the cards.

How is Orange adapting to this new paradigm?

B. J. Open innovation and the “Orange Digital Ventures” fund support our open digital strategy. In anticipation of disruptive market changes, we are buying stakes in startups like Actility, a leader in IoT network, Afrostream, the “African Netflix”, and Afrimarket specialized in cash-to-goods money transfer. Agility is vital… and humility too! We are still learning how to pick up weak signals coming in from our ecosystem and how to spot new technologies we could use to enrich Orange’s connectivity proposition and services.

“Our sector is not directly confronted by a wave of ‘uberization’, but we watch very closely all initiatives

that present any risk of disintermediation.”

Mobile First Sofrecom, The Know-How Network

OPERATOR STRATEGY IN ASIA 15

OTT players use operators’ wireline or wireless network infrastructures to carry free or paid services separate from the operator’s Internet access offers. These popular services, such as Viber, WeChat, WhatsApp and Snapchat, are often bandwidth-greedy.

A rich choice of OTT services

In Asia, OTT-mode Internet services are progressing fast, driven notably by rapid smartphone penetration. Internet access providers’ subscribers (mostly prepaid) have been quick to adopt these free communication apps which reduce the consumption of their talktime and SMS allowance.

Some OTTs are strictly local, such as Zalo in Vietnam and Hike Messenger in India now with 30 million and 70 million users respectively.

Unlike their western counterparts (WhatsApp, Viber, etc.), Asian OTTs like LINE, Kakaotalk and WeChat do not limit themselves to a single service. To impose their brand, they develop one-stop platforms with a complete range of integrated services, including: social networks, games, video chat, cloud storage and even web-based taxi services resembling Uber! If they succeed, they then monetize their user base through advertising, sticker sales, games and new services.

Operators facing multiple challenges

OTT communication services poach operators’ voice and SMS revenues. To make things worse, the enormous traffic they generate is a heavy burden for operator’s 3G networks, especially in Southeast Asia where prepay customers are constantly seeking the most attractive data offers. More than ever before, operators must focus on their fundamentals, in particular data pricing and quality of service. The success of VoLTE (voice over LTE, a 4G technology) is a vital challenge for them, for LTE’s excellent performance in terms of voice quality and latency can deliver a customer experience unrivaled by OTT voice services.

From confrontation to partnership: which defensive strategy is best?

The initial reaction of operators to this new challenge was a declaration of war. They attempted to limit access to their networks or to make leading OTTs pay for it, as in Singapore where they received a sharp warning from the local regulator IDA.

Next they decided it was wiser to make partnerships with leading OTTs in order to jointly develop offers that are now widely used. Singapore operator StarHub offers its prepay customers unlimited access to its LINE calling and messaging app, with prepaid daily or monthly “LINE Data Plans”.

Indonesia’s Telkomsel created “Social Max Data Plans” allowing unlimited use of five apps: LINE, WhatsApp, Path, BBM and Waze.

These partnerships also concern international voice services, another area of rivalry between operators and OTTs in countries with a large diaspora community. In the Philippines, Globe Telecom made a partnership with Libon, the application developed by Orange Vallée, to propose a “Philippines Pack” with attractive calls charges from abroad to the Philippines. China Telecom, going it alone, has launched an in-house VoIP application “Jego” which allows customers outside China to receive calls on China Telecom landline and mobile numbers for free.

Operators are also taking initiatives on content and media. For example, Singtel has launched its own multi-screen video platform in association with Sony Pictures Television and Warner Bros. Its “HOOQ” subscription VOD OTT service is deployed across the operator’s entire footprint (Globe in the Philippines, AIS in Thailand, Airtel in India).

Analysis by Thierry DuboisDirector of Sofrecom Asia Hub

Asian operators and OTTs: a marriage of convenience?

Faced with rapid penetration of Over-The-Top (OTT) services in Asia, operators are testing numerous strategies to defend their market share, including new OTT-like services and packaged offers – and even partnerships with OTT players.

Sofrecom, The Know-How Network Mobile First

Flux Vision: a marketing innovation based on data analytics

16 BIG DATA AND SMART CITIES

Interview with Béatrice FelderManager of Orange Application for Business, OBS subsidiary

Every minute Flux Vision converts 4 million mobile data items concerning tourism, transportation and commerce into statistical indicators. How does it create value for its users?

B. F. Flux Vision was launched in 2013 as a high-performance marketing tool that can substitute for conventional consumer surveys. It uses technical data collected from Orange cellular networks to generate statistics based on massive, anonymous sampling. These indicators refreshed in real time allow public bodies and private companies to analyze, for example, the number of visits to a tourist site, a visitor catchment area or an event, even the paths followed by tourists, and to identify the most popular places. They provide a reliable decision-making aid that can help optimize infrastructures and services. In order to extrapolate the observations made on the Orange network to the entire population, we make local adjustments according to the zones or events being analyzed. Our solution employs exclusive irreversible anonymization processes developed by Orange Labs and conforming to the recommendations of the CNIL, France’s National Commission on Informatics and Liberty. These algorithms delete all data of a personal nature, making direct or indirect identification or re-identification of individuals impossible.

Flux Vision targets French local authorities and enterprises. Could the solution be used outside France?

B. F. At the end of 2015, we started commercializing Flux Vision abroad using the “software publisher” model. Now all cellcos can acquire the software and install it in their information system infrastructure. They are then free to commercialize their own “indicator offers” to public or private clients wishing to improve their knowledge of mobile users’ visits and movements within the operator’s geographic coverage by exploiting indicators generated from cellular network data.

Enterprises today exploit only 7% of the data they generate. How can they use them more profitably?

B. F. Three quarters of all businesses know about Big Data, but to date few have started concrete projects, mainly due to lack of in-house expertise. In response to this need, in 2014 Orange launched Datavenue, a complete catalog of Data and IoT solutions and services drawing on its expertise in cloud computing, data and connected objects. To help customers build a big data environment easily, we also created a kind of test offer called “Starter Kit Flexible Data”.

Can data analytics help operators to optimize their own operational performance and quality of service?

B. F. At Orange, we have already appropriated the benefits of massive data processing. For example, by cross-referencing weather data with customer data we can anticipate local thunderstorm risks and take proactive action with customers in zones threaten by lightning. We send precautionary SMS messages suggesting that they unplug their Livebox. This astute idea improves our operational efficiency and quality of service: it reduces the need for technician interventions by a quarter and calls to our hotline by a third. And customers appreciate that we help them avoid possible service interruptions.

“By providing an accurate vision of data streams within a given

territory, Flux Vision gives enterprises and public authorities the agility

they need to improve their customer service and the quality of life

of citizens.”

Mobile First Sofrecom, The Know-How Network

MIDDLE EASTERN SMART CITIES 17

Cities around the world are starting to see the future benefits of the smart city concept. They are integrating digital technologies in their services to enhance the quality of life for city dwellers and assure sustainable urban development by making cities more efficient, eco-friendly and participative and less costly to run.

The promising Middle Eastern market

Cities in Persian Gulf countries are leading the way on these innovations, thanks to their investment capability, high-speed networks and young technophile ‘digital native’ populations. Smart solutions are one response to the challenges raised by exponential growth of urban populations as the end of the oil boom appears on the horizon. In the United Arab Emirates, for example, whose population has grown from 5 to 10 million in just a decade, Dubai has launched a hundred initiatives to make the city smarter. Its goals are to optimize the well-being and security of its citizens and to become, in time for the World Expo 2020, a showcase of innovation to make the country attractive for businesses, investors and tourists. “Dubai South”, a symbol of this strategic urbanization vision of the Emir of Dubai, Sheikh Mohammed Bin

Rashed Al Maktoum, was unveiled in August 2015. Also known as “The City of You”, this new 145 square kilometer city will become home to a million people and host Dubai’s new international airport by the year 2020.

Other smart city projects in the region include the reconstitution of the “Msheireb” historic districts of Doha in Qatar, and the building in Saudi Arabia of the “King Abdullah Economic City” near Jeddah and the “King Abdullah Financial City” in Riyadh.

Operators at the heart of the urban ecosystem

In such projects the operator becomes a key partner for public authorities and utility companies (energy, transportation, security, health, etc.) to whom he provides the very foundation of any smart city: connectivity with ‘user-citizens’, via wireline and wireless networks, secure infrastructures, service platforms and turnkey user services. This unique positioning places the operator at the heart of the smart city ecosystem. Apart from connectivity, operators will also create value by monetizing the gigantic ‘big data’ streams across their networks. By aggregating and analyzing them in real time, they can generate information vital for city management and interaction

with citizens. This emerging opportunity has spurred Middle East telcos strongly positioned on B2C to start adapting to serve the new promising market of local authorities and enterprises.

Inventing a new collaborative business model

In addition to operators, inventing the city of tomorrow will require contributions from many sectors, including public and private companies, large or small, that have traditionally been competitors and used to operating with a “silo mentality”. The digitization of cities will revolutionize their operating modes and value chains. How can companies collaborate without sacrificing their margins? How can they maintain their customer relationship? How should they share the created value? These are still open questions.

To offer the best replies, Sofrecom Middle East is adapting its consulting services portfolio to the new digital paradigm. With long experience of assisting operators, it has teamed with Orange’s business solutions specialist, Orange Business Services, in order to become a partner of choice in tomorrow’s smart city ecosystem.

Analysis by Abdelkader DaliDirector of Sofrecom Middle-East

Operators as key players in the urban ecosystem

Operators lie at the crossroads of urban networks, mobile connectivity and big data; they are key contributors to the digital solutions that make cities smart and able to interact with their inhabitants. In the developing economies of the Middle East, they are positioning on the emerging smart

cities market which they see as a future growth path, although they are aware it will require a transformation of their business model.

Sofrecom, The Know-How Network Mobile First

18 MOBILE FINANCIAL SERVICES

Smartphone uptake and 3G/4G network development are exacerbating competition in emerging markets. New operators are appearing while OTT players propose free or paid services delivered over the Internet and poach telcos’ voice and data market shares. Operators have little choice to win the loyalty of multi-equipped consumers: they must exploit their three principal monetizable assets to create value through innovation.

Network operators’ three competitive advantages

Their first advantage is the customer base (mostly prepaid in the AMEA zone) which the operator must animate constantly to keep it active and to grow his business. However, this base is the preferred hunting ground for rivals selling new services.

Secondly, operators have the advantage of a dense distribution network working close to consumers with the reactivity needed to push new offers. This sales structure, if well managed, often brings in over three quarters of an operator’s revenues.

The third key advantage is customer knowledge that operators already exploit essentially to segment their clientele and ensure well-targeted sales actions. Yet

customer data hides rich and useful information that could be put to much more profitable use in this part of the world where bank accounts are rare. For instance, operators are among the very few enterprises capable of assessing the financial status and solvency of their customers. This is precious information indeed when launching innovative mobile financial services – loans, insurance, etc. – much appreciated by small business and individuals.

From customer knowledge to smart scoring

Operators have a wide range of indicators enabling them to evaluate customer solvency, almost in real time, in the same way that financial establishments check out people’s credit rating before granting them credit or fixing insurance premiums. Examples of pertinent information include the frequency of mobile talktime top-ups, their geographic footprint as revealed by the number of outgoing and incoming local and international calls, data consumption on social networks, subscription to an Orange Money offer, and timely reimbursement of micro-credits. Armed with this fine, up-to-the-minute knowledge of customer behavior, the operator can propose compelling mobile financial services without running serious risk of unpaid bills. He can even commercialize his

unique customer scoring data to banks, insurers and other finance players who would appreciate such information but lack detailed customer knowledge.

Smart scoring: a ‘virtuous loop’ that creates value

Operators’ airtime credit services are an interesting starting point for customer scoring. As a customer’s solvency rating progressively increases, the operator will be inclined to propose more sophisticated services, for example encouraging him to switch from prepay mobile to a postpaid plan, to buy a smartphone on installments, or to accept credit.

With e-commerce and new mobile usages developing rapidly, customer scoring is become must-have for operators, since it secures transactions and avoids bad debts. It is very definitely a good tool to support growth.

Analysis by Rambert Namy Business Consulting Director, Sofrecom

Customer scoring: a monetizable asset for operators in mobile financial services

Confronted with increasing competition and more restrictive regulations, operators in Africa, Asia and the Middle East are seeking new revenue sources. They have a valuable asset – their customer knowledge – which can be leveraged to develop innovative mobile financial services.

Mobile First Sofrecom, The Know-How Network

FINTECH 19

Financial technology companies – “FinTechs” for short – have been booming since 2014. Predominantly startups with names like Afrimarket, Bolden, KissKissBankBank, Prêt d’Union and Prosper Market Place, they are leveraging digital innovation to reinvent and improve finance and banking services, making them better and more accessible, easier to use and less costly for businesses and individuals.

A disruptive operational, economic and technological model

Since FinTechs don’t do over-the-counter services, they upset the traditional banking business model by showing people that they don’t need to go to a bank. Today 80% of bank account holders manage their banking via their smartphone. FinTechs are attacking banks at several points on their value chain. Accessible only via dedicated online platforms or mobile apps, their disruptive innovations include participative corporate funding (crowdfunding), peer-to-peer loans, payments and money transfers, account and savings management and even virtual currencies. These upstarts are determined to shake up the financial services industry.

A legitimate hunting ground for Orange

Following the example of GAFA’s FinTech solutions – Google Wallet, ApplePay, Facebook money transfer, Amazon Lending, Paypal – Orange affirmed its successful

diversification into mobile financial services in 2008 with its Orange Money launch in Africa then in Europe. And it launched the Orange Cash electronic wallet and contactless payment system in Spain in partnership with MasterCard and in France with Visa. Since January, Orange is in exclusive negotiations with Groupama to develop for France,

Spain and Belgium a radically innovative bank service called Orange Bank inspired by the Orange Finanse mobile bank in Poland.

Operators and GAFA have very large customer bases and solid expertise in digital CRM, making them highly credible providers of compelling financial services within the FinTech ecosystem.

Analysis by Rambert Namy Business Consulting Director, Sofrecom

Operators and GAFA now part of the FinTech ecosystem

By successfully diversifying into mobile financial services, Orange is breaking down the boundaries between banking and telecoms and transforming usages.

Two questions for Thierry Millet Mobile and NFC Financial Services Manager, Orange Group

Can Orange Money leverage the Group’s diversification into mobile banking?

T. M. Fifteen million people in thirteen African countries already use Orange Money to make mobile money transfers and payments. It meets a real need in the many regions where banks are rare but cellphone penetration is high. Riding the wave of this success, we have enriched our range of services with new offers,

including some for people with bank accounts. One such service enables international money transfer between Senegal, Ivory Coast, Mali and Burkina Faso. Others support e-commerce, TV subscription and insurance. We are also working on micro-credit solutions. Africa, which has affirmed its appetency for practical financial services, provides an excellent test bench for ideas ultimately destined for Europe, even if the markets and competitive environments are different. What advantages does Orange Group have to successfully diversify?

T. M. Orange has a strong brand image embodying important values such as security and reliability. It serves 200 million mobile customers around the world and has solid distribution networks across all its territories. And finally, its proven expertise in mobile applications makes it a very credible player as testified by the success of the Orange Finanse mobile bank launched in Poland in partnership with Mbank, which has already seduced 200,000 customers.

Sofrecom, The Know-How Network Mobile First

20 CUSTOMER RELATIONSHIP

The smartphone: a hub for both physical and digital commerce

M-shop, m-payment, m-promotion, m-loyalty, m-assistance, m-care... the smartphone is becoming the epicenter of the CRM strategy of many brands. It provides the formerly missing link between physical stores and the web.

Practical and agile, relational and transactional, it makes life easier in many situations and rehabilitates practices that were starting to worry brands. Darty and La Fnac are even encouraging the common “showrooming” habit, in other words consumers checking out products in a shop then buying them online, which they now recognize as a driver of in-store visits and therefore of potential sales. Darty has even equipped 95 stores with WiFi and reports that 30% of purchases made on darty.com are now collected via its “Click & Collect” mobile-to-store service. The Hointer clothing store in Seattle, USA, is spicing up the in-store experience with an app that allows shoppers to scan the QR code on a pair of jeans, for example, then enter their color and size preferences. The app then displays the number of the fitting room where the garment is waiting to be tried.

Loyalty programs are transforming the smartphone into a “loyalty

wallet”. The “FidMe” app accepted by many chain stores and downloaded by more than 3.5 million European mobile internauts gathers all loyalty cards (barcodes, stampcards), dematerialized coupons and special offers on the user’s phone which is then presented at the check-out.

Regarding mobile payment, the situation is contrasted. Most of 1,000 Shell petrol stations in Britain will propose an m-payment system from spring 2016, in partnership with Paypal. But a Deloitte survey in November 2015 found that 59% of French smartphone owners are not interested in this kind of service.

Outdoor and indoor: geolocation for more agility

Phone geolocation (which requires the user’s opt-in) can be exploited to individualize the “industrial” customer relationship.The “PhoneAddress” app from the Belgian operator BASE makes the geolocated smartphone the actual place of delivery of an order: the delivery man and customer recognize each other thanks to photos exchanged earlier. The cleverness of such a service was confirmed in late 2015 by a MetaPack survey which found that a positive delivery experience spurs 89% of British, 84% of French and 83% of German consumers to shop with the retailer again.

Indoor and in specifically delimited zones, geofencing (virtual perimeters) and beacons open up great possibilities for geomarketing and individualized messages: welcome message on arrival in a shop, guidance and assistance. The smartphone can become a kind of compass: EasyJet is testing beacons to guide its passengers in three large airports. Visitors to the Chateau of Versailles can use their phone as an audioguide, thanks to Orange Beacons.

Coupling of apps with call centers: the digital Aladdin’s Lamp

Solutions like Amazon’s “Mayday” one-click video chat assistance service give the impression of having a “good genie” by your side. Mayday, available 24/7 for Amazon Kindle HD X and Fire smartphones, puts the user in contact with an advisor in less than 10 seconds. This expert can even take remote control of the device. More than three quarters of all queries from Kindle and Fire users now reach Amazon via Mayday. Questioned by Nuance3, 72% of consumers say they have a better impression of companies that offer a customer service application.Smartphone innovations are also driven by a desire for simplification, even automation, of the purchasing act. For example, Domino’s Pizza in the United Kingdom offers its “Easy Order” button (a physical button in a

“Mobilizing” customer care to make the customer experience even more fluid

For consumers, the cellphone is more than a supremely personal object: thanks to its connectivity, it plays an essential role in the customer relationship. Above all, it provides the interactivity that characterizes today’s new consumption modes, and it often serves as a gateway between different sales channels.

Analysis by Valérie Chapuis Customer Experience and Relationship Senior Manager, Sofrecom

Mobile First Sofrecom, The Know-How Network

CUSTOMER RELATIONSHIP 21

mini pizza box) that talks to the Domino’s app on your phone over Bluetooth. Choose your preferred pizza in the app then order it by pressing the button (which glows red when the order is ready!).

SMS as popular as ever

The good old SMS service introduced 22 years ago is by no means a has-been. Despite its rusticity, it is resisting well and is increasingly used by businesses.Its coupling to USSD in Africa has led to some inspiring innovations, such as the “Nandimobile” customer care service in Ghana, “Icivil” birth declaration system in Burkina Faso, “My Healthline” healthcare hotline in Cameroon, and free Wikipedia thanks to partnerships with local telcos.The outlook for texts still looks good in Europe too. SMS is unrivaled for its routing rapidity and reading rate (for messages of interest to the recipient): 98% of texts are read (generally within four minutes of reception), compared to only 29% of tweets, 20% of emails and 12% of Facebook posts. T-Mobile, Virgin Media, Shell and SFR Business Team have used the “NICE Fizzback” SMS solution to poll customers just after an interaction with a vendor or teleadvisor.SMS is widely used for queue avoidance (Starbucks, O2, etc.), which is an important issue in the light of an IFOP study for Wincor Nixdorf in 2014 which revealed that a third of consumers change their mind about a purchase if there is a long check-out queue.

The mobile now a key part of the interchannel experience

Cellphones and smartphones now have undeniable impact on the way

people buy and their expectations in terms of support. Many brands are realizing that mobile presence is just as imperative as presence on the Internet. This necessity is underscored by Google’s new “Mobilegedon” policy of punishing mobile-unfriendly sites by excluding them from the search engine.However, we should not forget that the cellphone is perceived

as a very personal device, which makes owners sensitive to intrusions. Brands would be wise to concentrate on inventing apps and services that create real value, paying particular attention to maintaining an identical level of service across all their channels. The best customer-centric approach is one that assures fluid, seamless mobility, rather than focusing on the phone itself.

Orange Smart Store: the smartphone brings a new dimension to the in-store experience

By Marc Rennard Executive Director and CEO, Orange Middle East and Africa, President of the Sofrecom Board

The bricks-and-mortar shop has traditionally been the main customer relationship vehicle, and it continues to fulfill this important role today. Even the most digital enterprises have understood this: following Apple’s lead, Microsoft and more recently Google have tardily taken the initiative of creating special spaces to express

their brand values and make closer contact with consumers. We try to deeply personalize the customer relationship in our Orange Stores that we see as an invaluable asset and one that we are now evolving to respond to consumer aspirations and to complement the development of other sales channels.

Our Smart Store concept, one facet of this evolution, is characterized by maximal personalization of the welcome experience and “useful waiting time” in thematic, connected spaces that allow visitors to test our brand innovations such as connected objects and financial services. Our new Smart Stores also fully integrate a “mobile first approach” giving the smartphone an essential role and lots of practical services, starting with simply locating the nearest Orange Store. Visitors can use their phone to make an appointment and manage their queuing and their buying path (showrooming, online purchase then in-store pickup, etc.).

These new stores, already numerous across Europe, have very positive impact on customer satisfaction, which is why we are opening others at a steady pace with obsessive attention to detail. As with our new brand identity, we are rapidly adapting these modern outlets for our African and Middle Eastern markets. We already have a store in Jordan and others are planned for 2016.

Sofrecom, The Know-How Network Mobile First

22 PROFESSIONAL MOBILE USAGES

In mature markets, itinerant professions such as maintenance and repair people, delivery men and inspectors now use ‘hardened’ mobile devices - tablets, smartphones, laptop PCs, etc. - with communication and geolocation features. These help them anticipate, track and manage interventions locally or remotely with more fluidity, agility and efficiency than in the past. They are used to scan or input data that are then sent automatically to the enterprise information system to update logistics, sales and financial information in real time. Mobile devices are particularly useful for salespeople, since they can call up a client’s profile, help the vendor give personalized advice and prepare an instant price quote and purchase order for printing and signing on the spot.

The mobile data ecosystem now more structured in AMEA

In Africa, the mobile data ecosystem is maturing and spawning mobile business solutions that boost the business of craftsmen, small traders, liberal professionals, and the like, which represent 55% of the enterprise segment. Landline services are generally underdeveloped, which explains why cellular networks (3G) are expanding and improving (4G). Professional subscribers,

like their own customers, tend to prefer smartphones to desktop computers, not least because there is now a wide range at less than $50. Mobile subscription growth (14% in 2013, 26% in 2015, 42% forecast for 2017) correlates with this smartphone penetration. Moreover, cellphones are increasingly used for financial transactions such as invoice and over-the-counter payments, money transfers and employee wages. In parallel, professional social networks are expanding: in West Africa, Viadeo and LinkedIn have 2.5 and 5.7 million users respectively. Telcos, OTTs and even governments are launching new professional mobile applications.

Mobile apps give enterprises visibility and drive their growth

Mobile applications (mostly for Android) respond to four essential needs of pros and small businesses: visibility, customer relationship management, productivity and internal collaborative working (even external with the suppliers and partners). In practice this means creating and hosting turnkey websites or collaborative marketplaces that make them better known, put their product catalogs online and even enable e-commerce – backed by a secure payment system. And there is a

wide variety of other applications too, for example telephone conference, multi-destination SMS messages, sharing of inventory data, mutual assistance platforms, and social contact networks for sellers and buyers. Some of these are specifically for farmers, healthcare professionals and business managers.

AMEA cellcos – including Orange – are starting to address this emerging B2B market. However, these telecommunications pure players will have to undergo a cultural transformation to become integrators of practical, value-added services for businesses. The recipe for success in today’s dynamic evolutive ecosystem will be to package small, inexpensive, easy-to-install solutions backed by a good level of service.

Analysis by Benoît MénardB2B Director, Sofrecom

The cellphone leverages corporate performance

More and more large companies are adopting professional mobile services to facilitate collaborative working and drive productivity and sales performance. In the AMEA zone, small businesses and “pro” customers are discovering that mobile solutions can leverage their business growth.

Mobile First Sofrecom, The Know-How Network

Mobile cybersecurity: a new challenge for enterprisesInterview with Emmanuel ChristiannSecurity Program Manager, Sofrecom

Why is mobility becoming an increasing security challenge for enterprises?

E. C. New working modes and workspace virtualization inevitably impose freer access

to corporate information systems. In the past, enterprises provided their employees with Windows-based PCs that they owned and configured to protect confidential data; in any case, nomadic computers were rare and used only by itinerant personnel. But today half of all employees use their personal laptop, tablet and above all their smartphone for professional purposes. They log onto their employer’s intranet using devices that also serve their private life: messaging, voice calls, contacts, banking information, photos, videos and lots more. Organizations are unable to clearly delimit their own data from their employees’ private content (which in fact they have no legal right to see). This leaves them two choices: either exploit specialist cybersecurity skills and means to impose secure systems and usages, or open their information systems to personal devices (“BYOD”: Bring Your Own Device). This second choice incurs serious risks, as confirmed by France’s national agency for information system security (ANSSI). Moreover, other factors make data protection complex: the very large number of users, the multiplicity of mobile operating systems (Windows, Android, Apple iOS, etc.) and of cloud-hosted applications, industrial systems networking (Supervisory Control And Data Acquisition systems - SCADA), and the emergence of connected objects (Internet of Things).

To which types of attack does mobility expose enterprises?

E. C. Cybercriminals, often highly organized, have discovered that stealing confidential or sensitive data can be very lucrative. Their attacks on mobiles are increasingly sophisticated, targeted and varied, including remote surveillance of employees via their cellphone cameras, phishing emails to steal bank details, access codes and passwords, ransom attacks that maliciously encrypt files and demand a payment to decrypt them, and theft of enterprise customers’ personal

data. Recently some large groups have been victims of the “fake boss scam” in which a hacker pirates the SIM card of a director’s phone, then calls the Finance Director and orders him to make (in total secrecy) very large bank transfer to an account abroad. While mobility can boost efficiency and service quality, it does expose enterprises to cyberattacks which can be very costly, not least in terms of damage to their image. Yet a recent KPMG study found that although business directors are aware of this issue, only half of them are undertaking serious cybersecurity actions.

What are the solutions?

E. C. Cybersecurity is founded on anticipation, protection and awareness. In France, in application of France’s Military Programming Act of 2013, the ANSSI has defined twelve sectors of critical importance and identified 218 public and private “vitally important operators” needing priority protection against cyberattacks. These enterprises managing sensitive infrastructures (telecoms, energy, transport, etc.) are now under the obligation to create a cybersecurity unit, to analyze their risks and define a security plan. They are also forbidden to connect certain critical systems to the Internet. The most vulnerable businesses are the small ones for whom the most reliable solution is to equip employees with restricted-use phones. In addition to technical protection systems, it is important to make employees aware of the risks and to impose good practices. Senior management and all their staff must understand the sensitive nature of enterprise data in today’s hyper-competitive markets and their individual responsibility to protect the company’s assets.

“Cyberattacks on cellphones increased by 12 percentage points

in 2015, affecting a third of all users!*. As teleworking and ultra-

mobility continue to develop, secure mobile usage is a vital challenge for

enterprises.”

* PwC worldwide study: “The Global State of Information Security® Survey 2016”

Sofrecom, The Know-How Network Mobile First

CYBERSECURITY 23

24 SOFRECOM: 50 YEARS OF TRANSFORMATION AND INNOVATION

50 years of experience serving operators

Marc RennardExecutive Director and CEO,Orange Middle East and Africa,President of the Sofrecom Board

Mari-Noëlle Jégo-LaveissièreExecutive Director, Orange Innovation, Marketing and Technologies

Bruno MettlingDeputy General Manager and Human Resources Director, Orange Group

“Sofrecom has developed strong vertical offers in response to the

needs of telecommunications operators and governments and it now boasts outstanding know-how in Customer Experience Management, B2B, Mobile Financial Services, Security, E-Government and many other specialist fields. Its integrated expertise applied from strategy definition to business, networks and IT implementation helps telecoms players successfully make the digital transformation that will drive their growth. Around the world, Sofrecom supports regulators, governments and operators, in particular Orange Group for whom it plays an absolutely vital role in our development in Africa and the Middle East. 97% of Sofrecom’s clients recognize the added value of its services.”

“Sofrecom analyzes the strategies of players across our entire footprint. This vital market intelligence enables us to anticipate disruptive evolutions in our markets and guides our innovation choices in areas such as 4G/LTE, broadband growth and data monetization. Sofrecom also provides invaluable support as we

move into new activities such as smart metering in Africa, financial modeling of rural electrification and remote meter reading.”

“Sofrecom’s strength lies in its broad expertise,

of course, but also in its commitment to certain values. Everywhere it operates, it has taken positive action to set the highest ethical standards, to promote professional diversity, non-discrimination and equality. With 1,300 male and female employees of 34 different nationalities, Sofrecom clearly upholds cultural diversity. It is hardly surprising that the company is the first one in our Group to earn the AFNOR’s Diversity Label.”

Mobile First Sofrecom, The Know-How Network

SOFRECOM: 50 YEARS OF TRANSFORMATION AND INNOVATION 25

Fabrice Durand, Senior Market Intelligence Consultant

For more than 15 years, Fabrice has analyzed market trends and players’ strategies in the global telecoms ecosystem. He has directed or contributed to a many highly regarded Orange Group market intelligence programs (Badim, MoWiBro, World Telecom Matrix, Better Together, etc.).

Very keen on computer graphics, Fabrice created the “F1gures F4ctory” cell to develop a new and highly visual approach to presenting significant events and weak signals from the telecoms market, to make them easier to comprehend. For the last four years, he has written the “Key Figures” section of our special Mobile World Congress publication.

At work and play, Fabrice is a man who likes a good challenge. His passion for mountaineering recently took him to the summit of the rarely visited 7,000 meter peak Himlung Himal in Nepal.

Michelle Zhu, Senior Business Consultant

Michelle is emblematic of the cultural diversity at Sofrecom and the richness of its Know-How Network. After studying in Shanghai, she enrolled for a masters degree in international business at the ESCP business school in Paris while working for Orange on the communication strategy to accompany its “Conquest 2015” plan.

Although Chinese, Michelle has eagerly espoused the French way of life and she fully grasps the nuances of both Western and Asian cultures. She has been based in Thailand in recent years, working all over Southeast Asia to build Sofrecom’s relations with its partners there and bringing us the benefits of her local knowledge of Asian markets.

Michelle created a market observatory for Thailand’s regulator and has completed strategic marketing missions for operators in the Philippines, Myanmar and Thailand.

Karine Douaud, Consultant and Market Intelligence Manager

An economist by training, Karine has 12 years of experience within Orange Group, including 7 at Sofrecom as a strategic marketing consultant working for telcos in France and abroad.

As one of our top experts in market modeling and scaling, she advises customers on their anticipation and innovation programs and supports their growth by providing data-backed forecasts and making positioning recommendations on the wholesale, B2B and consumer segments. She contributes to Orange Group’s strategic marketing program for its African subsidiaries and has completed missions in Asia.

Maria Macra, Senior Market Intelligence Manager

Maria is an atypical figure in the consulting business. Of Greek-Argentine nationality, she gained her unique experience working for the IDATE and OVUM research and consulting firms and, since 2005, for Sofrecom where she is now one of our leading experts in broadband development, wholesale market optimization and negotiations between regulators and operators. Maria regularly undertakes missions abroad, on all continents, working for operators and international institutions such as the World Bank, European Union, African Development Bank, French Development Agency, and telecoms regulators (INT in Tunisia, NBTC in Thailand).

During her spare time, Maria translates cartoon books (Pierre Duba, Ed, etc.) for the publisher 6 pieds sous terre.

50 years of Market IntelligencePortraits of 4 market analysts from our Prospective team

Sofrecom, The Know-How Network Mobile First

26

“Mobile First” is published by:Sofrecom24, avenue du Petit Parc94307 Vincennes CedexFranceEquity capital: 38 440 000 €Company Registration 672 004 660 (Créteil)

Publication Directors: Pascale Vieljeuf, Valérie Thévenin

Chief Editors: Pascale Vieljeuf, Valérie Thévenin, Clotilde Marielle, Agnès Robin

Editors: Agnès Robin, Clotilde Marielle

Copy Editor and Project Coordinator: Agnès Robin

Writers:p.4-11 Fabrice Durand, Maïlys Brusseel Giraud et Solène Melyon, p.12 Philippe Vion-Dury, p.13 extract from an interview in Les Echos, p.14, 16, 17, 22, 23 Catherine Fressoz, p.15 Julien Rupé, p.18-19, Rambert Namy et Benoît Ménard, p.20 Valérie Chapuis, p.21 Mathieu Berthelot.

Thanks to: Bruno Mettling, Marc Rennard, Marie-Noëlle Jego-Laveissière, Georges Nahon, Béatrice Felder, Bénédicte Javelot, Thierry Millet, Abdelkader Dali, Thierry Dubois et Hervé Cortada, Emmanuel Christiann

Pictures: Guillaume Guérin (p.12, 17, 22, 23), © jesussanz/fotolia (cover), © DigiClack, utemov, fireflamenco, annasunny, artisticco, PrettyVectors, topvectors, dmitry_kadakov, Nataliya Yakovleva/fotolia (p.10-11)

Translation: AeC Traduction

Design: Muriel Bertrand, www.mbdesign.fr

Print: printed by Impression Directe,Roubaix, on Print SpeedEnglish version printed in 300 copies (February 2016)

Sources p.10-11: Deloitte, Pew Research, Orange + TNS, Comscore, WeAreSocial, Instabrand, BBC, Facebook, YouTube, Informate

About data and their use:All information in this document is taken from ‘free’ studies, white papers, press releases, press articles and corporate financial documents.We have tried to mention clearly the sources and dates.

DiscoverOur portfolio of offers

Our publicationsOur references

on our website www.sofrecom.com

https://fr.linkedin.com/company/sofrecom

https://twitter.com/sofrecom

Mobile First Sofrecom, The Know-How Network

EUROPE

Sofrecom S.A.24, avenue du Petit Parc94307 Vincennes Cedex, FranceT + 33 1 57 36 45 00

ldcontact.sofrecom@sofrecom.com

MAGHREB

Sofrecom Algeria6, rue des Frères Kadri - HydraAlger, AlgeriaT + 213 21 60 70 67

abderrahmane.arfa@sofrecom.com

Sofrecom Services MarocTechnopolisBâtiment BO - 2nd floor11100 Sala Aljadida, MoroccoT + 212 5 37 27 99 00

driss.katif@sofrecom.com

Sofrecom TunisiaImmeuble MatrixRue du Lac ConstanceLes Berges du LacTunis, TunisiaT + 216 71 162 800

siwar.farhat@sofrecom.com

MIDDLE-EAST

Sofrecom Middle-EastDubai Internet CityBuilding 3, Office 103P.O. Box 500425Dubai, United Arab EmiratesT + 971 4 446 4792

abdelkader.dali@sofrecom.com

ASIA

Sofrecom IndonesiaGraha Aktiva, 4th floorJI. HR. Rasuna SaidBlok X-I Kav.3Jakarta 12950, IndonesiaT + 62 21 52920350

thierry.dubois@sofrecom.com

Sofrecom MalaysiaC/O MFCCI Business CentreN°2A-6-2, 6th Floor, Plaza SentralJalan Stesen Sentral 550470 Kuala Lumpur, MalaysiaT +60 320355434

alison.grun@sofrecom.com

Sofrecom ThailandZuellig House, 5th Floor1-7 Silom Road, Silom, Bang RakBangkok 10500, ThailandT + 66 2 784 7999

herve.cortada@orange.com

AMERICA

Sofrecom ArgentinaReconquista 609 - C1003ABMBuenos Aires, ArgentinaT + 5411 45 15 90 00

adrian.hettema@sofrecom.com

Sofrecom Silicon ValleyPascale VieljeufT + 33 1 57 36 47 43

pascale.vieljeuf@sofrecom.com

Part of the Orange group

Sofrecom S.A.24, avenue du Petit Parc94307 Vincennes CedexFrancewww.sofrecom.com

France

Algeria Tunisia

Argentina

Silicon Valley

Middle-East

Indonesia

Malaysia

Thailand

Morocco