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WASP Model Presentation 26 _ 30 Sept 02

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									WASP Model Presentation



                26 & 30
                Sept 02
                  Agenda
Background and Objectives
Overview
Implications
Phased Introduction
Key Business Principles
WASP Model Tariffs
Billing Options
General
Questions / Discussion
Background
-The need ?
          Rational for a Need for a Model

   Japan has seen phenomenal success.
      Data represents >20% of current ARPU’s
      Estimates to 2005 represent >35%
      J-phone has in excess of 1600 content providers




– European model - revenue share basis. (Recent studies have
  reflected that less than 10% of companies remain profitable if
  mainstream revenue)
     Rational for a Need for a Model
• Nokia Global forecasts

                           2001   2006
    Entertainment          <1%     8%

    Corporate              <1%     5%

    Advertising            <1%     4%
                                         35%
    Transactions           <1%     3%

    Data/Messages           8%    15%

    Voice                  90%    65%
                     Background
 Looking back at some of Vodacom successes:
    The Markets :-
         Introduction of incentives and handset
         subsidies – tried by rest of world
         Introduction of Prepaid – world first
         Introduction of 4U (Per Second Billing) – world
         first
    Internally
         Cost cutting two years ago, one of the most
         efficient head count to subscriber ratios
         Focusing on our core business

We want you to be part of the next wave
         Rational for a Need for a Model


                               THUS
– Vodacom will introduce Western first.

– Vodacom thus “Africanised” the J-phone model.

– This is a joint journey in which both parties MUST win
  in order to maintain a sustainable business model.
       Objectives of the WASP Model

Implement a successful business model
   Vodacom will focus on their core business
   Leverage the expertise of the WASP

WASP and market forces determine the price for content

Allow for Variable content pricing

WASP chooses the bearer for acquisition and delivery of content

Impact of legislation
   Content

Time to market
Definitions
Overview &
 Phases
  Overview of the WASP Model
 A Wireless Application Service
        Provider (WASP)

    is any external party using
        Vodacom’s network

    to offer content or services

to Vodacom’s customers whether for
        a fee or at no charge
     Overview of the WASP Model
 The content or service offered may be
classified as an official service in that it is
  approved to operate on the Vodacom
Network and in which case Vodacom may
         offer additional services,
 or it may be an unofficial service in that it
  has not been approved in which instance
      Vodacom will not offer any additional
  services and in most instances Vodacom
    will be unaware of the service, it simply
  uses the Vodacom network as a transport
                   medium
      Overview of the WASP Model
The WASP Model is a set of standardised specifications and processes
that will enable WASP’s to develop and deploy their own branded
products using the Vodacom network as the transport medium
Vodacom will provide
    The Bearer (Transport) Layer
    Additional Services:
        Hosting (IVR applications only)
        Billing and Collection
        Customer Care (Phase II)
The WASP will provide
    The Service / Content
    Development, maintenance, support, administration and marketing
    The Pricing of Service (within Billing Constraints)
Implications of the WASP Model
Clear separation between Vodacom and the WASP

    Vodacom provides the transport layer, and will set and retain transport
    revenue with no sharing of transport revenues

    Vodacom may provide additional services at a fee

    The WASP will be fully and solely responsible for the WASP Service and
    will set and retain the service revenue, with no sharing of revenues with
    Vodacom

    The WASP will develop, maintain, support and market its services

The model will operate on

    Published standard interface specifications

    Published standard processes and procedures

Vodacom Connect will be the main conduit through which the WASP will
contact and access Vodacom
 Phased Introduction of the WASP Model
          Phase One - Oct 2002                          Phase Two – Mar 2003
Interface specifications offered to WASPs      Additional interface specifications
  Circuit Switched Data Services                USSD
  SMS                                           WIG
  GPRS
  MMS
Billing for WASPs                              Billing for WASPs
Billing will be in the form of premium rated   In addition to a premium based Bearer
Bearer Charges with Bearer and Content         Charge, billing will be in the form of
Charges consolidated on the customer’s bill,   Content Billing Tickets which will show
as per stipulated Tariff Bands.                the Content and Transport Charges
                                               separately.
Network Connectivity                           Network Connectivity
WASPs must connect to the Network              WASPs can connect through a physical
through a dedicated physical connection.       connection or an Internet connection.

Customer Care                                  Customer Care
All WASP service queries are escalated to      Vodacom could offer official WASPs
the WASP.                                      Customer Care services.

Hosting                                        Hosting
IVR                                            Web Hosting
Key Business
 Principles
Key Business Principles Underpinning the
           WASP Model (cont)
Vodacom will
   Provide standard interface specifications and processes
   Provide the transport medium
   Bill for, and retain transport revenue
   Provide additional services at specified fees
   Approve services for which it provides billing services

The WASP is responsible for all aspects of the service
   Service development, maintenance and support
   Marketing
   Defining service charges
   Managing service content
Key Business Principles Underpinning the
             WASP Model

Services will

   Be classified as unofficial or official

   Be legal

   Comply with the specifications and standards

   Official services must comply with the Code of
   Conduct
Revenues
  and
 Tariffs
                WASP Model Structure
Retail Price Plan   A     B    C   D      E
Content Fee




                    WASP Content Revenue

                        Administration Fees

                         SP Revenue
Bearer
 Fee




                        Network Revenue
    WASP Model Components
Content Fees
  Variable; WASP determines fees dependant on bearer and billing
  option.

  WASP retains up to 85% of content fee
  Fixed Bearer across price bands
     WASP Model Components
Administration Fees
  Variable % based

  Utilised to provide for billing and administration, minimise risk and
  hedge against bad debt.

      Contract Fees                           15 -18%
      Prepaid Fees                            28 - 29%
      Content Voucher                         18%
                       SMS Tariffs
Bearer (Vat incl)

    Retail SMS MO                    50c

    Launch incentive                 10% discount

    Additional marketing incentive   3c (Vat excl per SMS
                                     MO)

 Effective cost                      41.5c (Vat incl)

 Note : the Marketing incentive is target and
   performance driven.
                     SMS Tariffs
Wholesale (Vat incl)

  Increase to              20c

  Effective date           1 January 2003

  Launch incentive         Discussions

Premium rated interconnection –
currently being negotiated
               SMS Tariffs
Retail (Vat incl)         Premium Band     Retail      WASP
                                           Rate (Vat   Content
                                           incl)       (Vat incl)
   Principle of premium
                          Premium Band 1      90c         48.5 c
   rated bands

   Admin fee to be        Premium Band 2     R1.00        58.5 c
   adjusted for
                          Premium Band 3     R1.20        78.5 c
ICASA approval
                          Premium Band 4     R1.50        R1.09
Content “unregulated”
                          Premium Band 5     R2.00        R1.59
                 SMS Tariffs

       A worked example:

Refer to the model at: WASP Model
                               MMS Tariffs
Retail (Vat incl)
    Tariff                                   TBA - Road show
    Launch incentive                         TBA
    Additional marketing incentive           TBA
    Principles
           Person to Person
           Stepped tariff according to volume throughput, measured in kB bands

Wholesale (Vat Incl)
    Rate                                     50 c per event plus
                                             R13 per MB
  For example 160K message = 50.2 c
  R13 / 1024 kB = 1.27c / kB
  1.27c / (1024/160) = 0.20
                     GPRS Tariffs
Retail (Vat incl)

  Tariff                           TBA - Roadshow

  Launch incentive                 TBA

  Additional marketing incentive   TBA

Wholesale (Vat Incl)
  Rate                             R13 per MB
                     USSD Tariffs
Retail (Vat incl)

  Tariff                           TBA
                Scheduled
  Launch incentive   TBA

                              –
  Additional marketing incentive   TBA

Wholesale (Vat Incl)
  Rate
                 1 March 03
                       TBA
Billing
Options
           Billing Options Available
Option I – Premium Rated Bearer Charges – Vodacom will
bill and collect a premium rated bearer charge from the
customer

Option I will be available for

   SMS

   Voice

Option II – On Line Process Content / Service Billing Tickets
generated by the WASP

Options II will be available for all bearers excluding voice
Billing Option I – Premium Rated Bearer
                 Charges
                                              1. Customer requests
                   2
                                                 content via the Vodacom
                                                 Network
                   4
                       WASP                   2. The request is routed to
    Vodacom                                      the WASP for fulfilment
    Network                                   3. The Customers account is
                                     7           debited with the value of
                                                 the premium rated bearer
                                              4. The WASP provides the
               3                                 Content to the Customer
           4                                  5. Vodacom collects the
       1
                                                 premium rated amount
                                                 from the customer
                                              6. Vodacom apportions the
                        5                        amounts collected to
                                                 transport revenue,
                               6                 administration fees and
                                                 the balance to the content
                                                 fee due to the WASP
                        Vodacom               7. Vodacom Finance pays to
                         Billing   Vodacom       the WASP the content
Customer                 System     Finance
                                                 charges due
Billing Option II – WASP Billing Ticket On
Line Process
                                                       1.    Customer requests content
                                                             via the Vodacom Network
                1
                                                       2.    The request is routed to the
                6                                            WASP for fulfilment
                        WASP
      Vodacom                                          3.    The WASP will submit a
                                                             billing request to Vodacom
      Network                                 10
                                                       4.    Vodacom will verify that the
                                                             customer is active and that
                                                             funds are available
                    7                                  5.    Vodacom will reserve the
                                                             amounts specified and will
                        3                                    confirm this back to the
                                                             WASP
                            5
            6
        1                                              6.    The WASP will provide the
                                                             content or service
                                                       7.    The WASP will provide
                                                             Vodacom with confirmation
                                                             that the service has been
                                    8
                                                             provided
                                4
                                                       8.    Vodacom will then debit the
                                                             customers account with the
                                        9
                                                             pre-reserved amount
                                                       9.    Vodacom will then apportion
                                                             the payments received
                            Vodacom
                             Billing        Vodacom    10.   Vodacom Finance pays to
 Customer                    System          Finance         the WASP the content
                                                             charges due
Overview
of Process
        Overview of the Process
Register as a WASP
  Application
  Conclude standard contract
  Obtain connectivity into the network
  Obtain connectivity into the billing system (if
  required)
Register product
  Application
  Product testing
  Product configuration
      Overview of the Process cont.

Bill and collect
  Premium rated bearer process
  Content billing ticket – on line process
  Financial settlement process


Customer Care Process
  Service query escalation process
General
      General –Testing Principles
New Bearers e.g. USSD, GPRS

   3 month test window prior to commercial launch

Existing Bearers e.g. SMS IVR

   Test prior to finalisation of physical link and WASP Contract

   Vodacom requirements
      Sign WASP test agreement
      Development of a commercial framework for launch
      WASP must establish an internet connection to the test
      environment
      WASP must adhere to the test framework specified by
      Vodacom
 General – Migration of Existing
            Services
All existing ISP’s to sign WASP agreement
Existing services will have to be migrated –
joint approach to be developed by WASP
and Vodacom
Marketing and advertising criteria to adhere
to Vodacom’s specifications
Interim products or services to be launched
must be advertised as ‘promotional’ with set
start and end dates.
General – Future IVR Developments
 IVR is an application which utilises CSV (circuit switched
 voice).
 IVR encompasses on net and off net components.
 Interconnect facilitates off net offerings
 Currently restricted by no premium rated interconnection on
 bearers.
 Model will be solved by providing on and off net services and
 tarrifing.
 CSV tarrifing is regulated and thus each service must be registered
 with ICASA. The retail rates will not be divided between bearer and
 content, although commercial wholesale model will be.
 Will be lodging tariffs that utilise an event fee with limited duration,
 multiple premium band for on net and off net premium bands.
General – Structure and Contacts
Vodacom Connect Division reports to
Sales Products and Services Group

Director – Chris Ross

EHOD’s –    Commercial : JJ Botha
            Technical : William Yell
  Vodacom Connect Structure

               WASP Interface
                                        WASP
WASP            WASP Help Desk
                  and Admin.         Technical
Business
                                        Buss
Manager
           Enterprise Project Team     Analysis


           Vodacom Functional Groups
               Service Provider
             Vodacom Customer Base

								
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