Thomas Rößler, 27th September 2004O2 Germany GmbH & Co. OHG

Achieving Cost-Effective And Successful Communication With Your Customers

Content

The company O2 Germany

Determining how to successfully communicate and distribute prepaid

services to your target market.

Leveraging your communications channels to maximise service usage and

attract higher spending customers.

Examining how to market additional services at the point at which

customers access their account details and recharge their accounts

Targeted products, services and promotions.

Exploiting new segmentation and profiling data to ensure that you

are communicating the right services to the right customers

individually.

The Company O2 Germany

1Company Profile

Mobile Network

Customer Numbers O2 Germany

Sales & International Communications

With O2

Market Share Germany & ARPU

Employees

Company Profile

O2 Germany (formerly VIAG Interkom) is a subsidiary of mmO2 plc.

Network operator owning its own mobile telephone network.

Innovative postpaid and prepaid products, mobile data services.

More than 6.3 million customers (more than 2.6 million prepaid customers) since June 2004 in Germany.

Strengths of O2 Germany: one of the leading innovators in mobile data

services, exceptional service O2 Genion Homezone, almost total mobile

phone coverage via O2 Germany’s mobile network and national roaming

through the D1 network, established sales channels.

Owns an UMTS licence.

Goal of O2 Germany: consistent growth, continuous increase in market

share (revenue and customers)

Mobile Network

GSM 1800 (E2) mobile communications network.

Appr. 10,000 GSM and appr. 1,500 UMTS base stations in operation.

Intelligent network which enables the Genion and Prepaid functionality.

Virtually nation-wide coverage via O2 Germany’s mobile network and the

national roaming using the D1 network.

National GPRS roaming in the D1 network, nation-wide data transfer approaching ISDN speed in Germany.

Even faster data transfer with UMTS (Laptop card for GPRS/UMTS already offered).

WLAN - very high transmission speed over 400 business relevant hotsports such as airports or hotels.

© O2 Germany, August 2004

Customer Numbers O2 Germany & ARPU

4.1 4.3 4.6 4.8 5.0 5.35.6

66.3

0

1

2

3

4

5

6

7

End o

f Jun

02

End o

f Sep

02

End o

f Dec

02

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f Mar

03

End o

f Jun

03

End o

f Nov

03

End o

f Dec

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f Mar

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f Jun

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Mill

ion

s

PostpaidPrepaidTotal

© O2 Germany, status 30 June, 2004

44 45 45 43 46 46 45 44 45

1111 11 11 10 11 12 12 11

05

101520253035404550

Eu

ro

Postpaid

Prepaid

© O2 Germany, status 30 June, 2004

* base: quarter-ARPU

Sales & International Communications With O2

Appr. 470 o2 shops throughout Germany

Own shops, Partner shops, Franchise, Shop-in-shops with Vobis

Currently around 9,000 specialist dealers, wholesalers and other established sales channels.

International roaming with more than 298 partners in 148 countries enabling convenient calling round the world.

International GRPS roaming with more than 30 partners for very widespread data communication

– GPRS roaming: 44 networks in 43 countries

– GSM roaming: 296 networks in 142 countries

© O2 Germany, August 2004

Market Share Germany, based on Revenue for FY 2003/2004

Source: quarterly and annual reports (for Vodafone & O2: revenue FY 03/04; E-Plus & T-Mobile: cumulative revenue for April 03 to March 04)

T-Mobile40.8%

Vodafone37.0%

E-Plus11.9%

O210.3%

© O2 Germany, status 31 March, 2004

Employees

0

1000

2000

3000

4000

5000

6000

* since March 2001 without employees of BT Ignite

© O2 Germany, status 30 June, 2004

2Project Framework

The Marketing Engine To Serve All

Your Prepaid Customers

Architectural Overview

The Project

Project Framework

Project was initially a cost saving initiative, therefore the business case

was crucial (CAPEX and OPEX consideration); See also optimized H/W

configuration).

Timeframe was limited for realisation (window of opportunity).

Sicap PABQ (Prepaid Account Balance Query) application was selceted to

reduce costly IVR calls which are offered for free to Prepay customers to

check the balance.

No/limited IT impact to eliminate dependencies from IT release planning.

Almost no Marketing involvement required, except definition of access

code:

##110011**

The Marketing Engine To Serve All Your Prepaid Customers

Two rack units support all Prepaid

customers.

2x SUN Netra T1 AC200 as an optimized

hardware configuration to radically

optimize the CAPEX investment.

Sicap IWU and UMB application

deployed on the same redundant SUN

servers (two servers in total).

Capacity is more than sufficient and can

be easily expanded by quickly adding

more licenses (software based).

Architectural Overview

NW -3

[IF -3]

[IF -2]STP

NW -2

[IF -1]

[IF -4]

MSC-HLR

NW -1

SCP

NW -5

OIS

NW -4

TRö

OA & M

NW -7

[IF -5]

Application Server

NW -9

[IF -8]USSD CBS

NW -8

[IF -7]

MDS

IT -1

UM BIW U

[IF -9]

UMC

NW -6

Provision ing

[IF -5]

[IF -6]

S icap USSD G ateway(PABQ )

ExistingInterface

Interface to beImplemented

O ut ofScope

Architecture is open for additional

internal and external application

service developments.

OIS (Open Interface System)

integration via Corba/XML (new

for Sicap).

Sicap UMC initially choosen as an

interim O&M tool (new).

Proprietary Interface to be

developed (Corba/XML) towards

SCP account via Open Interface

System (OIS) utilizing Corba/XML

3USSD As An Important Marketing

Channel

Increasingly Success With USSD

Service Usage

Additional Services Realised

Applications & Services Under

Investigation

Marketing Aspects

USSD Application As An Important Marketing Channel

Your balance is9,35 EURYourAdvertisementcould be here

Marketing insists now on using the USSD string as a communications channel on a permanent basis (other than originally planned).

USSD campaigns are on a permanent basis now (24h change process); Two campaings can run in parallel.

USSD is a fast service (appr. 7s response), cheap in operation, flexible to Marketing plans and extremly effective!

USSD advertisement string as a Marketing Channel multiplies the replies to service promotions and APRU generation.

‚Killer‘

Applica

tion

Note: Maximum length of USSD string limited with Trium handsets (non GSM standard) limits the advertisement text possible !

Increasingly Success With USSD Service Usage

~ 350k

~ 700k

Additional Services Realised

Added account expiry date information as an application.

– Business Case to reduce inquiries to the customer care center.

– individual promotion text possible.

Added Sicap UMB (USSD Menu Browsing) application.

: to access the USSD menu

: for balance inquiries

: for balance expiry date

information

Note: Watch your access network capacity !

##000011**

##110011**

##220011**

Applications & Services Under Investigation

Enable nationwide usage of USSD by USSD stage 2 in national roaming

environment or HLR ´update´ to support stage 1.

Service Provider Support (MVNOs with own brand).

Investigate and eventually promote International Roaming usage.

Investigate Alternative Recharge applications.

Take ideas from this Prepaid Mobile Conference.....

Thank You For Your Attention !

Questions & Answers

Contact: thomas.roessler@o2.com

O2 Can Do !