Developing Value Added Services (VAS) and Product Roadmap for Telecoms Operators

Developing Value Added Services (VAS)
and Product Roadmap for Telecoms Operators
By ALI Saghaeian
Chief Analyst & Consultant
Telecoms, IT, and Media
Saghaeian [at] gmail.com

Objectives
• How is VAS products life cycle
• What are Product/Service
Development Steps
• Understanding VAS function in the
organization
• Learning VAS customer value
proposition
• Developing the product roadmap
• Defining the product description
• Understanding go-to-market
approaches
• Reviewing a sample
product description
and a template for
development
• Brainstorming for
Operator’s new
product ideas,
segmenting and
scoring
Exercise

Agenda
• Reference framework for VAS product and platform launch
• VAS customer value proposition (CVP) design
• Service Management Life Cycle
• VAS categorization for different business models
• VAS function in the organization
• Sample VAS Product Descriptions
• The framework and Principles to design the product roadmap
• Developing Product Ideas and shortlisting for future development
• Template for Operator’s 5-year Product Roadmap

Reference framework for VAS product and platform launch

VAS customer value proposition (CVP) design

VAS value chain supported by 5 key capabilities for VAS delivery

Service Management Life Cycle

8
Voice
Broad-
band
Data
centers
Call
centers
Desktop
Appli-
cations
Business
processe
s
Basic
services
Value
added
services
Out-
sourcing
• VoIP
• Voice VAS
• Voice mail
• Voice VPN
• Voice
consulting
design &
integration
Out-
tasking
• Managed
voice (e.g.
Centrex)
• Hosted PBX
• Outsourced
voice
• Internet
gaming
• Video on
demand
• Access
managemen
t
• Managed
content
delivery
• Outsourced
broadband
access
Security
• Security
maintenance
• Security VAS
(e.g. Authorized
access)
• Security HW/SW
sourcing
• Security consulting
• Enterprise security
policy
development
• Managed
security
solutions (e.g.
firewall)
• Security
management
• Security
outsourcing
• Hosting and
storage
management
• Data Centre
and
Web development
and solutions
• Data centre/
hosting
consulting,
design and
integration
• Data Centre
management
• Data Centre
outsourcing
• Basic VAS
services
(e.g. IVR,
CTI)
• HW/SW
maintenance
• Call Centre
VAS
• Remote
monitoring
• Call centre
consulting,
design &
integration
• Call Centre
infrastructur
e and IVR
systems
managemen
t
• Live help
(Call Centre)
outsourcing
Data
connection
• Basic data
connection
service (i.e.
Leased lines)
• Data connection
monitoring
• Data SLAs
• IP VPN
• WAN/LAN
consulting, design
& integration
• Managed IP
VPN
• Cloud services
• (e.g. IaaS)
• HW/SW
maintenance
• SW
upgrade
• Desktop
consulting
design &
integration
• PC/server
managemen
t
• CPE leasing
and
managemen
t
• Desktop
outsourcing
• Application
management
and
maintenance
• Unified
communicatio
ns
• Collaboration
applications
(messaging, e-
learning)
• Customized IT
solutions
• IT professional
services
• Cloud
services
• Application
on demand
(e.g. SaaS)
• Basic
applications
managemen
t
• IT
maintenance
• Customized
business
solutions
• Business
processes
optimization
(BPO)
• IT
department
outsourcing
VAS
Communication services Connectivity services IT services
Managedservices
• Basic voice
product and
service
management
Basic
services
Telecom ICT
VAS can be categorized into 4 groups, each with a different
business model requiring different capabilities from Operator

9
Product/Service Development Steps
Preparation Implementation Running Pilot Lunching Product
Stage Procedures
Preparation Research, Documentation, Taking
Commercial Department & Board Approvals
Implementation Consulting and managing all the procedures
through Network, IT, Regulatory & any other
necessary departments or 3rd parties for
implementation
Running Pilot Managing and monitoring Pilot processes,
delivering necessary data to pricing for
finalized tariffs
Lunching Product Managing and Monitoring Products

10
Developing Products Based on Roadmap
 Achieving more customers in new markets as a leader company
 Using maximum ability of Operator’s telecom infrastructures
 Increasing more revenue and profit
Project
Benefits
 Moving toward new technologies & Services
 Making new ways for gaining revenue
 Respond to Market’s need
Project
Context
Strategic focus
area
(from main
focus areas )
Contributing
KPIs
Objectives : Adding new products based on market’s need in order to attract more Customers
for buying and using Operator’s products which gains more revenue for the Company
Operator’s BUs
involved
Departments , 3rd
Parties
Estimated Budget

11
Key steps in VAS product life-cycle
Marketing and VAS department activities in key steps of VAS
products life cycle
Product ideation
• Share ideas based on platform
capability
Product business case
Prototype
Acceptance/Business
model
Roll-out
Monetization
Retirement of product
VAS Department Activities Marketing Department Activities
• Share ideas on what market
wants
• Develop business case for
products finalized on ideation
• Support business case
development
• Support prototyping in case
required
• Prototype with the help of
vendors or internal
• Conduct acceptance testing and
create business model of VAS
• Support acceptance testing and
business model development
• Validate roll-out• Negotiate contract and roll-out as
per business model
• Monetize products as per the
business case and provide feedback
• Support monetization if required
• Commercially retire the product and
initiate technical retirement
• Retire the product technically

12
Roles and responsibilities are defined with the RACI methodology
Responsible  Owns the project and task
 Will conduct work and coordinate task
 As to whom “R” is accountable
 Who must approve on work before it is effective?
 Overall responsibility for the task
 Has information/ capability necessary to complete work
 Provides input to help perform the task
 Must be notified of the activity or results but not consulted
The RACI methodology determines, for key processes, who is…
Accountable
Consulted
Informed

13
Marketing and VAS department responsibilities matrix in key steps
of VAS product life-cycle
• Conduct VAS product ideation and finalize the
products for business case creation
• Develop VAS product business case
• Develop VAS prototype based business case
• Conduct acceptance testing of VAS prototype
• Develop business model for VAS prototype
• Negotiate contract with vendor
• Roll-out the VAS prototype as per business model
• Monetize the VAS product (4Ps)
• Maintain the VAS product
• Provide feedback on product refinement
• Refine product based on feedback
• Commercially retire of the product
• Technically retire the product
Marketing department
A/R
A/R
C
VAS department
R
C
A/R
A/R C
A/R
C A/R
A/R C
C A/R
A/R I
C A/R
Key steps of VAS product life cycle
A/R I
I A/R
C A/R

14
VAS function in the organization: high level overview
General
description
• The role of VAS function is to ensure that the B2B relationships in the VAS ecosystem
are addressed properly
• The function will streamline primarily the efforts related to content sourcing, VAS product
engineering and VAS platform management in the different service categories
(communication and entertainment)
• The function will also support the organization commercial units in the marketing and
sales of VAS to end customers
Current status
of department
• Where is a VAS unit/department positioned in the organization?
• How much specialization of the VAS unit alongside the major service categories (i.e.
communication and entertainment)?
• Are content sourcing and management of relationships with content providers is
addressed?
• Any solid platform to support the commercial units in the development of attractive VAS
propositions?
Objectives / Key
considerations
• The objective of VAS function is to address the B2B relationships of the VAS ecosystem
focusing on:
− Building network/IT delivery capabilities needed for VAS (i.e. IN platform, content
management platforms, VAS billing, etc.)
− Effective management of relationship with providers of VAS content, applications and
services
− Creation and development of large database of content for each VAS category to
address adequately the market demand and customer needs

15
A proposed organizational structure could be designed around
the major functional areas related to the provisioning of VAS
Head of VAS
Content and applications
management
• Content sourcing from
external providers related to
communication and
entertainment VAS
• Regular content update and
retirement (i.e. Upload and
removal from VAS servers)
• Adaptation of content for the
different delivery channels
and CPEs (i.e. TV, PC,
Tablet, Smartphone)
• Applications delivery and
management
VAS platforms management
Product engineering and
concept testing
• Vendor relationship
management
• VAS platforms management
(i.e. Licenses, functionality
upgrade, etc.)
• Integration of VAS platforms
with the network and IT
infrastructure
• Product engineering based
on the product design made
by marketing, i.e. VAS
delivery capabilities
• Concept testing of new VAS
products and services
(technical)
• UAT and end-to-end field
tests (i.e. from VAS platform
to network to CPE)

16
B2B and B2C VAS activities are different by nature, hence they
need to be done by the respective units that have the necessary
organizational capabilities, knowledge and competences
• Relationships management with vendors of VAS
platforms and IT infrastructure (i.e. IN platform,
content management platform, etc.)
• Management of contractual relationships with
external providers of content and VAS
applications
• User acceptability testing (UAT) of content
delivery, VAS applications and ICT services
• Technical delivery of content and VAS
applications to provinces
• Marketing of VAS, i.e. elaboration of service
offerings and customer propositions around the
4Ps (product, price, promotion, place)
• Relationships with regulatory bodies regarding
VAS (i.e. approval of prices)
• Final approval of business model and commercial
conditions related to delivery of VAS content,
services and applications by external partners
• Sales of VAS on retail basis to end users (e.g.
business and residential)
B2B activities B2C activities
VAS function commercial function

17
A comprehensive classification on customer and products is
required, however, the effort to implement is huge
• Categorization of customer based on :
– Customer Type ( Residential, Business, Wholesale)
– Main company ( Mother company)
– Branch company (under mother company)
– Province & City
• Categorization of products base on:
– Product Type (Mobile Broadband, Messaging, VAS, Managed Service, Voice)
– Product Name
– Province & City
• This categorization should enable functions to generate flexible reports, for example:
– Revenue by Product
– Revenue by Customer type
– Revenue by Customer name
– Revenue by Province
– Product by Customer
– ….
High level requirements on customer and product identification

18
New voice tariffs (rebalancing) & VoIP services
Overview
 New tariffs by offering different voice packages, each package is targeting the customer with
different usage behavior, subscription fee is obligatory for the package, which is including the
free limited minutes usage
 Besides new tariffs, VOIP package is providing for inter-city and international long distance
call, and each package is targeting the customer with different long distance usage behavior.
Benefits to Customers
 Value for money, cheaper price for higher usage
Target Segments
 Residential customer
 SOHO
 SME
 Large Enterprise
Key Features
 Unified voice price through all provinces
 Optional voice package including different voice usage
 Optional VoIP voice package for inter-city and
international long distance through pre-dial number
Value lever
Strategic importance
Revenue enhancement
(w/o CAPEX)
Revenue enhancement
(w/ CAPEX)
Benefits to Operator
 Improve offering value proposition
 Revenue of XXX (To be determined)

19
Large
enterprises
SMEs
SOHO
Critical success factors
• ‘End to End’ capability to ensure connectivity and IT applications working
seamlessly
• Customised solution offering, built on the specific needs of the customer
with low ‘Time To Market’
• Quality and reliability of the solutions offered (not solely cost advantage)
- important to incentivise clients to adopt multi year support contracts
- vital to gain confidence of clients, wary of provider switching costs
• Offering of standard (e.g. internet security packages and PC Backup) or
semi-customised solutions (e.g. vertical solutions) with a focus on cost
containment and ease of use
• Ability to access sophisticated solutions (accounting, CRM etc) at lower
cost of entry, e.g. flexible pay-per-use (utility computer) and shared
infrastructures (to minimise investments in IT)
• Service offering that simplifies processes for SMEs (e.g. payroll),
minimising operating “headaches”
• Simplicity of offering, ease of use
• Pricing
• Complex and
competitive market
• Customisation requiring
sophisticated skills /
dedicated divisions
• Requires solution
standardisation and
capability to sell /
distribute locally
• Can be addressed
through partnerships
A successful integrated ICT proposition requires a differentiated
offering, customised according to the specific needs of the client

20
Product roadmap development
A three step framework is used to design the product roadmap
Telecom market analysis
1A
Operator positioning
1B
Existing product portfolio
assessment
1C
• Analyze the telecom market
development
• Conduct regulatory analysis
• Analyze Operator market proposition
• Generate insights from Operator
strategy and segmentation analysis
on offerings
• Conduct competition analysis for
both residential and business market
• Identify existing offerings
• Analyze existing products’
performance
• Conduct benchmarking
• Identify Operator gap against
industry best practice
2
• Conduct brainstorm session
• Develop design principles
• Conduct brainstorming
• Feasibility study
• Product business case analysis
• Prioritize the products
• Create new product roadmap
Product profiling and go-to-
market approach
3
• Develop the product description
• Develop the product
implementation work plan
• Develop product go-to-market
approach
Fact-base analysis

21
We can categorize Operator existing products into four phases
Slow growth
Penetration: Low
Introduction Growth Maturity Decline
Bubble size denotes revenue
Revenuegrowth
Low
High
High growth
Penetration: Middle
Flat or limited growth
Penetration: High
Negative growth
Penetration: From high to low
• Product entry the
market,
• Customer start to
attempt the product
• Product confirm by
the market
• Number of
subscriberaccelerativ
e growth
• Product accept
widespread by the
market
• Growth rate slowing
down
• Targeted market
saturated
• Start to replace by
substitute
Source: Product Life Cycle Theory
Penetration

22
The development of product roadmap rests on five guiding principles
• “Fix the basics”
– Unify product offerings across provinces
– Elaborate product definitions for all existing products to have common understanding at Operator
level
– Identify key products and roll-out nation-wide
• Protect the revenue base and focus on fast growing markets
– Defend fix voice revenue
– Focus on the fast growing broadband market
• Diversify the product portfolio and expand “horizontally” and “vertically” following the demand potential
– Benchmark shows that all operators expand beyond traditional communication services
– Enhance competiveness and value proposition to markets, especially Business segment
• Introduce the key “enablers” for major products
• Balance the portfolio considering the “Quick-win” initiatives and CAPEX intensive developments
– Ensure impact within 12 months via Quick with initiatives based on existing technologies / network
– Ensure sustainable revenue growth in the long term via improving product delivery capabilities with
new CAPEX
1
2
3
4
5

23
Four-step approach to develop product roadmap for Operator
Idea
generation
Prioritization Categorization
Conduct
brainstorming
workshop to
generate ideas
Collect inputs from
strategy project
Separate ideas
into product vs
non-product
categories
Conduct financial
feasibility study
1 2 3 4
Product
roadmap
No. of
Ideas
/Products
Total ideas Shortlisted
ideas
Final
products
Developed 5-year
product roadmap
Defined high level
overall product
roadmap schedule
Evaluate ideas
based on “Effect”
and “Benefit”
matrix
TBD
Recommendations
from strategy
Brainstorming
workshop

24
All new ideas will be evaluated based on “Efforts” and “Business
benefits” dimension
Efforts Business benefits
• Requirement for new IT systems,
network upgrades, facilities, etc.
• Need to employ external vendor
• Timeline for implementation
• Know-how
• Human resources (i.e. number of
people) needed for the respective
development
• Organizational capabilities
• Approximate cost estimation
• Expected amount of additional
(incremental) generated revenues
• Reduction of churn
• Reduction of operational cost
• Increase of EBITDA
• Incremental increase of customer
acquisitions, respectively increase of
customer base
• Incremental increase of usage and
MOU
• Gain of sustainable competitive
advantage (SCA) over major
competitors
• Improvement of corporate image
• Increase of customer satisfaction
which translates into increased
customer loyalty

25
Ideas will be shortlisted for future development
Median = 1.2
Median = 1.2
Short-term
development
(Quick wins!)
Mid-long term
development
0.0
0.5
1.0
1.5
2.0
2.5
0.0 0.5 1.0 1.5 2.0
Business benefits
Efforts
0- Low, 1-Middle, 2-High
Fail to pass screening

26
5 years product roadmap aligns with Operator’s vision and our
guiding principles
Considerations
Strategic
Financial
2016 2017 … 2020
Strategic importance
Revenue enhancement (No major
CAPEX)
Revenue enhancement (Major
CAPEX). E.g., ICT, convergence
Quick win Mid-long term
Market
development
1. Fix the basic
5. Balanced portfolio –
Quick Win
1. Fix the basic
2. Protect revenue
3. Diversify
4. Enablers
3. Diversify
5. Balanced portfolio -
CAPEX

27
The Operator 5-year product roadmap
20182016 2017 2019 2020
Strategic
importance
Revenue
enhancement
(No major
CAPEX)
Revenue
enhancement
(with CAPEX)
ICT and
convergence
services
provider
Short
Term
Mid Term Long Term

Any Questions?
28
ALI Saghaeian | saghaeian@gmail.com

Developing Value Added Services (VAS) and Product Roadmap for Telecoms Operators

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