cps presentation upgrades1

Executive Briefing

Proprietary & Confidential

ObjectiveObjective

• “Education is the key to success”-Professor John Henry Jackson

• Cost cutting strategies

• Useful industry

information

• Solutions

Cellular HistoryCellular History

• On October 13th 1983, Ameritech executive Bob Barnett called the grandson of Alexander Graham Bell using the now legendary Motorola DynaTAC 8000X which cost $3,995.

• At the time, Fortune magazine's Stephanie N. Mehta pointed out that "the sound quality wasn't pristine, and the conversation wasn't especially scintillating".

• From that day to last year, things have changed dramatically. The analog mobile phone was replaced by digital, and texting, email, music, web browsing and social networks have taken over the world thanks to this now ubiquitous device.

• In 2007, the number of cell phone subscriptions in the planet reached 3.3 billion, half of the people on planet Earth.

Cellular Phone/Plan HistoryCellular Phone/Plan History

• Ameritech Mobile's 1983 service plans for the DynaTAC started at $50 a month and 40 cents per peak minute, or 24 cents/minute during off-peak hours

• The device had an LED display, a two-inch flexible antenna, 30 (count 'em, 30) speed dial numbers, and just 35 minutes of talk time. No camera, no GPS (please), no Web browser (after all, there wasn't a Web yet), and no text messaging.

Copyright CPS Inc 2009

Wireless Industry Financial PictureWireless Industry Financial Picture

• Annual service revenues reaching $148 billion by year-end 2008

• Wireless data service revenues for the year 2008 rose to more than $32 billion. This represents a 39% increase over 2007, when data revenues totaled $23.2 billion. Wireless data revenues for 2008 amounted to nearly 22% of all wireless service revenues

• December 2008, 270+ million wireless users. 2008 increase 15 million subscribers

• Wireless customers using more than 2.2 trillion minutes in 2008, an increase of 100 billion minutes from 2007


Verizon Wireless Financial PictureVerizon Wireless Financial Picture

• Total quarterly revenues of $12.8 billion, up 12.3 percent year over year. Full-year revenues were $49.3 billion, up 12.4 percent.

• 12.3 percent increase in total revenues; data revenues up 41.4 percent;

• The wireless business reported a 13% increase in profit and nearly 9% gain in revenue.

• Wireless operating income margin reached 29.7 percent, up 350 basis points on a year- over-year basis.

• Verizon Wireless added 5.8 million organic net new retail customers in 2008 -- expected to be the most of any U.S. wireless carrier.

Source: Verizon’s Online News Center


AT&T Wireless Financial PictureAT&T Wireless Financial Picture

• AT&T posted net income of $3.2 billion, or 53 cents a share for the 1rst Quarter 2009

• The wireless business reported a 13% increase in profit and nearly 9% gain in revenue.

• AT&T activated 1.6 million new iPhone accounts during the quarter

• wireless customers using more than 2.2 trillion minutes in 2008, an increase of 100 billion minutes from 2007


Sprint Wireless Financial PictureSprint Wireless Financial Picture

SPRINT NEXTEL REPORTS

FOURTH QUARTER AND FULL-YEAR 2008 RESULTS

• Free Cash Flow* of over $500 million in the fourth quarter and $1.8 billion for

• Cash balance of $3.7 billion at the end of the quarter; total liquidity of $5.1

• Stable ARPU sequentially with increasing data contribution throughout 2008

ARPUARPU

Average Revenue Per User

• A metric used by investors and analysts to measure the financial performance of a wireless carrier company.

• ARPU is the average amount of revenue a company collects from each user per month.

• Companies often try to boost this number by selling extra services to users such as data plans, messaging, and downloadable content.

““Can you hear me now?”Can you hear me now?”

• Wireless account manager from the carrier is the resource most used to consult on wireless spending

• Wireless account manager from carrier limited in what can be creatively offered on your account

• Wireless account manager from carrier can’t offer solutions that put money in your pocket

FREE???FREE???

What Carriers offer - is it really FREE???

If…..• Equipment fails (cheap/low quality)

• Lost Calls

• Lost Sales

• Lost Revenue• Replacement Options

• Temporary Models

• Incompatible Upgrades

• Lost Calls

• Lost Sales

• Lost Revenue

Cellular Account Challenges - UpgradesCellular Account Challenges - Upgrades

• Consumer cell phones are used for an average of 18 months – Corporate devices used longer due to costs

• Then they are disposed, replaced, or upgraded

• Many times devices are broken, become outdated, new technology simply doesn’t work, or EOL arrives BEFORE plan terminates

US Environmental Literacy Council 2006

Upgrades - Upgrades - liabilityliability or or assetasset??

• If Premium upgrades are a cost, they’re a liability

• If they don’t, they’re an asset

Upgrades - Upgrades - liabilityliability or or assetasset??

• No asset more useful than CA$H!

• Not just savings, but cash

• How do we do this?

Upgrades – Upgrades – Which one describes you?Which one describes you?

• Are you handing this to the Carrier?

• In both monthly billings AND for your upgrades?

• Get on the receiving end!

Upgrades – Upgrades – The Carrier’s OfferThe Carrier’s Offer

How much will I pay for iPhone 3G? If you are upgrade eligible and your account is in good standing, you will pay $199 for 8GB (black) and $299 for 16GB (black or white). Two-year contract required.

If you are not currently upgrade eligible, you may have the option to purchase an early upgrade priced at $399 for 8GB (black) or $499 for 16GB (black or white). Two-year contract required. This pricing is available only at an AT&T Store and is currently not available online.

We now offer a offer a no-commitment option of $599 for 8GB and $699 for 16GB to existing AT&T postpaid customers in stores only. Certain restrictions do apply.

Upgrades – the Corporate viewUpgrades – the Corporate view

"The basic process begins with understanding where the money is going," says Ken Dulaney, vice president of mobile computing at Gartner. "Communication costs are one of the most uncontrolled areas for most enterprises. Vendors have made it so complicated that people ignore it."

Wireless Optimization - UpgradesWireless Optimization - Upgrades

• Extra Cost

• Unused upgrades

• Management of upgrades

• Logistics

• Implementation

Equipment ReplacementEquipment Replacement

What do you do when the device breaks?

• Down time

• Logistics

• Lost Sales/Revenue

• Units NOT “on your shelf”

• Equipment replacement NOT “at your fingertips”

EOL ReplacementEOL Replacement

• High cost of insurance• Deductibles• Insurance hassle• Down time• Attachment

compatibility

DiscontinuedDiscontinued Models – Upgrade?Models – Upgrade?

• Motorola I-355 phones discontinued - $500.00 bar code scanning attachment non-compatible on new model

• Upgrade option not cost effective

HybridHybrid Technology – Upgrade Options?Technology – Upgrade Options?

• Sprint hybrid handsets not compatible with the “add-on” application

• Customer NOT eligible for additional upgrades

ETFs = Loss of Upgrades?ETFs = Loss of Upgrades?

• Client needs to disconnect 200 cellular devices at a cost of $200.00 each

• = $40,000.00 headache

$$$$$$$$$$$$$$$$$$$

Discontinued Models SolutionsDiscontinued Models Solutions

• Purchase the unusable upgrades

• Provide I-355’s loaded with Comet Tracker

• Total solution - Client received 50% of the total field units plus 4 Blackberry 8350i’s at no cost to client

HybridHybrid TechnologyTechnology SolutionSolution

• Supply free replacement units that fit the customer needs

• The client becomes fully integrated with useful applications

ETFETF Solution Solution

• Purchase the upgrades

• The client received $15,000.00 in equipment

• $55,000.00 PAID to Client

“Corporate Purchasing Solutions has been a great resource for me to utilize over the last 6 years. I have been able to be more creative than the average rep in providing strong account management to my customers.”

-David , Sprint Nextel

Business Solutions Account Executive

Take control of your wireless equipment costs!

Choose the Largest wireless equipment consulting company in the U.S.!

Let Corporate Purchasing Solutions turn the fine print* in your wireless contract into dollars in your bank account!

*CPS does claim to do what is says and that’s a guarantee! That’s why you will be satisfied, not only with the solutions CPS will provide, but with the service “after the sale” – since at CPS, your not just a client, you are a measure of our success. We look forward to our success being your success!

*CPS does claim to do what is says and that’s a guarantee! That’s why you will be satisfied, not only with the solutions CPS will provide, but with the service “after the sale” – since at CPS, your not just a client, you are a measure of our success. We look forward to our success being your success!

I believe that if you show people I believe that if you show people the problems and you show them the problems and you show them the solutions they will be moved the solutions they will be moved

to actto act. . – Bill Gates