mvno overview - mocome

MVNO Plan

strictly confidential copyright mobile communications media 2010

Business Overview


Who Should Be an MVNO?Mass Media (Best)Media that covers national, International, sports, entertainment and business news. Ready made advertising channel Ready made content unique to its subscribers Ready made users/subscribers

Retailers (average)Outlets as distribution and dealer channel Ready made sales structure Loyal customers

Global Brand (investment intensive)Ready made users/followers


Why Now?In early 2004, Europe and developed market started MVNO structure.There is no proper business model for MVNO to excel. MNO is competing with MVNO due to market is not saturated yet (Subscribers > Population) Technology companies concentrate on selling their network appliances, rather than providing services. Capital intensive for MVNO and gross margin too low to justify investment of over 10-20mil to capture 100,000 subscribers. Time to market may take years to build and develop full network coverage.

In 2010, emergence of Mobile Virtual Network Enabler (MVNE)Cut costs of investing technology CAPEX. Cut monthly overheads of over staffing on technical employees. Matured market is looking for more than just phone calls, SMS and 3G access. Quick time to market.


What is MVNE?A Ready Platform to serve MVNO RequirementsIt is proven Tier 1 platform, extensive features to cater the different needs of MVNOs A Faster time to market. Less risk. Simplified go-to-market approach.

An attractive Commercial Model based risk and rewards.Based on ASP model. No CAPEX investment. Pay only for the services / platform features required


What Do MVNE Offer? The MenuCore Telecom ServicesVoice MO and MT Real Time control SMS Data (GPRS, EDGE, 3G, HSPA) MMS Real Time Converged Prepaid\Postpaid Rating Call Forwarding Call Waiting Call Hold Call Conferencing Call Barring Caller Line Identity Presentation USSD Services VXML IVR

Business Support Solutions:Dealer Management System Dealer Point of Sale Dealer Commissioning Customer Relationship Management Customer Care GUI Customer Registration Information Distribution Inventory Management SIM Card Production SIM Pack Printing Voucher Production Management Trouble Ticketing MNP Interface and workflow Financial Reports Postpaid Billing Dealer eTopup via SMS


What Do MVNE Offer? The Menu (contd)Charging & Billing Solution:Support for Fixed, Mobile and Wimax\Wifi services Real Time Rating and Services Flexible Rating Engine Flexible Reload\TopUp Engine Service Bundling 255 Dedicated Accounts 255 Usage Accumulators Unlimited Friends and Family accounts Community Charging Bonus on Incoming Calls Full Subscriber Lifecycle Management and Notifications USSD Topup USSD Balance Check USSD Call Back for Roaming Camel Roaming Reload Voucher Solution

Value Added ServicesFull Service Delivery Platform for SMS, USSD, Web, WAP and Voice Applications M2M applications Enhanced Call Routing Voicemail Personal Ring Back Tone 3rd Party Content Management Hosted Content Hosted WAP portal USSD Menu Browser Peer to Peer Balance Transfer Missed Call Alert Notification Web Based Self Care OTA announcements Bank Payment Gateway Voice SMS Collect Call Credit Transfer SMS2Email Email2SMS Advertising services


In The Nutshell

MVNO- Branding - Marketing - Product Development - Sales - Customer Management - Business Know-how

N S T

B H

H MSub Brands

VAP Value Added Provider NE Network Enabler NO Network Operator

MVNE MNO Subscribers


Revenue Driver and The Market


Potential Revenue vs Services OfferedThere are 16,000 newly registered users in the market in Malaysia every month. Penetration rate is now 110% People are more accustomed to carry 2 mobile phones or more MNP is well received by end user More mature market developed but lack of vertical market offering in Mobile ServicesMerchant Trade Target Market Total subscribers Offer Voice and Data Packages (2.5G) Offer Voice and Data Packages (3G) Bound by MNO network facility limitations Offer Caller Ring Back Tone Prepaid & Postpaid Full Range of VAS Service Bundling Foreign workers (South Asia) 140,000 YES NO YES YES NO NO Remittance Tune Talk Open Market 60,000 YES NO YES NO NO NO NO XoX Chinese Market 22,000 YES NO YES NO NO NO NO U-Mobile Entertainment Based 1,000,000 NO YES NO YES YES YES NO MVNE Based MVNO NSTP Market 100,000 (12mths) YES YES NO YES TBC YES Cross Selling Media Advertising


Revenue StreamsCore Revenue StreamsVoice calls and SMS Mobile Data and Broadband Packages

Value Added Revenue StreamsAdvertisingWAP, SMS, USSD, Voice Mail, Phone Tone and Caller Ring Back

Ring Back Tone Services Bundled Content Services Unique Packages for Berita Harian, Harian Metro and NSTPSports, Current Affairs, Entertainment and Lifestyle

ARPU (Average Revenue Per User) RM 60Core Revenue RM 40 per month VARSSubscribers RM 5 per month Advertisers RM 15 per month


MVNO Keyword BUNDLINGMarketing ConceptFree Sims to capture subscriber Prepaid and Post-paid Thick MVNO Multi Packages Call rates from RM0.15 0.32 (peak/off peak) Goal IPO

Marketing ConceptBasic Mobile Prepaid Services Loyalty programmes No frills services Subsidised Call Rates Flat RM 0.16 Goal Driver for Air Asia services

Marketing ConceptBasic Mobile Prepaid Services South Asia Low Call Charges Local Call rates from RM0.15 0.33 (peak/off peak) The only Celcom MVNO with Caller RBT Goal Drive Remittance & Money Changing Services

Marketing ConceptSpecific Target Market South Asia Low Call Rates Basic Mobile Prepaid Services Low International VoIP Call Rates Goal Sell more VoIP Product & Services

ChallengesAcquisition of subscribers. All the MVNO above do not have steady stream of followers. All transactional based clientele. strictly confidential copyright mobile communications media 2010

Unique To NSTP - AcquisitionCurrent SubscribersBundle SIM to newspaper subscription (s) Offer different bundling prices for exampleRM 50 get one of the newspaper subscription and RM 10 worth of calls/sms RM100 get two newspaper publication subscriptions and RM 15 worth of calls/sms RM 150 get three newspaper publication subscriptions and RM20 worth of calls/sms

All packages valid for 1 month Instant Revenue for MVNO

New SubscribersBundle newspaper to SIM Offer different bundling prices for exampleRM 20 get one week worth of newspaper (one publication) RM 30 get one week worth of newspaper (two publications) RM 50 get one week worth of newspaper (three publications)

Instant New Readers / subscribers for publication(s).


Bundle Again for RetentionNSTPContent ServicesCheaper News Alert Service (RM 1 per week) Exclusive Downloadable News Alert Application (push email strategy) Exclusive Content Services for Youth & Interactive Services

Caller Ring BackPaid ContentExclusive to NSTP or affiliated companies Unique Label and Artists Caller Ring Back (more for Harian Metro)

Free ContentRadio-based Caller Ring Back News-based Caller Ring Back Advertisement-based Caller Ring Back


Key Driver To SuccessBrandNSTP holds known brand Multi-brand for different market segment (NST, BH and HM) Affiliation to a larger media group

MarketingNSTP has more than 5million readers NSTP holds 3 major publications in the media market with steady readership

Staff Programmes (Family and Friends)Large group Ready made subscribers

Distribution NetworkNews-Stands as distribution/dealer channel


Business Model


Cost Structure & Business ModelNetwork ElementsProvided by MVNE with a setup fee as low as RM500K one time cost Pay as you go model in subsequent month

Marketing ElementsLeveraging on in house advertisement properties

OperationOver heads (from CEO to receptionist) can be as low as RM1.8mil per annum Only needed dealer and distributor managers and sales & marketing teamFull Outsource Commercial Contracts Technical Involvement Manageable cost structure Able to own technology Time to market 6months or less Covered by MVNE Covered by MVNE NO rate may change as it goes NO YES Technology Outsource MVNO sign directly with MNO Covered by MVNE YES knowing fixed wholesale rate YES NO depends on rates negotiation


The MVNO Structure

NSTP 30% Funder 40%

Retailer 10%

Mocome 20%


ContributionNSTPAdvertising real-estate expenses (print advert) The big 3 Brands

MocomeBusiness Knowledge Operational and Technical Knowledge Value Added System Provider

RetailersMust be large group with more than 100 outlets in the country Taking lesser top-up fees (minimize cost of sale)

FunderThe financier of the business


RoadmapRegional expansionWith MVNE, lower setup cost made regional expansion more reasonable Tie up with other giant publishers in neighbouring countries

Break-even pointWith 5mil readers to target, targeting 2 % for the first 18months ARPU of RM30 per month Revenue hits RM36mil averaging 7% net profit (with Retailers in the group)

Long term stragetyTo target at least 15% of the readership Ability to offer more value added and low-cost termination/call rates


Projections1st Half (MYR) Direct Revenue Direct Cost Indirect Revenue Agency Comms Mobile Svc Mobile Svc Mobile AD Mobile AD 0.00 500,000 0.00 0.00 2nd Half (MYR) 1,560,000 1,380,000 200,000 60,000 18 Mths (MYR) 17,753,000 15,712,000 6,413,000 1,924,000 24 Mths (MYR) 82,713,290 73,201,000 28,950,000 8,700,000 Total (MYR) 102,000,000 90,642,000 35,362,000 10,608,000

Gross Profit

(500,000)

205,000

6,596,000

29,776,000

36,136,000

Operating Exp

1,610,000

3,690,000

6,578,000

5,944,000

16,650,000

Profit

(2,110,000)

(3,485,000)

18,000

23,832,000

19,836,000

AssumptionsBased on ARPU of RM 30 per month Plateau in 19 months with 490K subscriber

Cost StructureDealer and MVNE costs are in Direct Cost of sales, Marketing costs will be in Operating Exp

Strategy Aggressive in Year 2 strictly confidential copyright mobile communications media 2010

Thank You


mvno overview - mocome

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