INVESTOR DAY Christian Gebara - Chief Revenue Officer - Telefônica
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INVESTOR DAY
Christian Gebara
Chief Revenue Officer
São Paulo
March 15th 2016
VIVO’S COMMERCIAL APPROACH
Commercial Key
Approach Levers
Data centric Most Unique Superior Broad and One of
Focus approach competitive all-in-one experience deep usage the most
on value based 3P bundle, B2B through the of Big Data valued and
generation, on best
network
anticipating
the market
Solution
provider
enhancement
of our
to enhance
customer
inspirational
brands in
with a data experience in 4P and 5P traditional experience the market
centric in coverage
and capacity
and digital
channels
and
optimize
approach business
and superior results
customer
experience
|2|
VIVO’S COMMERCIAL APPROACH
Data centric approach based
on best network experience
in coverage and capacity
|3|
DATA CENTRIC APPROACH
COVERAGE SUPERIOR CHANNEL
3,543 cities with 3G+4G
EXPERIENCE
coverage (48%* more than Own stores, dealers, and
closest competitor) digital channels focused on
data penetration
VIVO
Best positioned
to deliver a data
driven portfolio
INNOVATION UNIQUE BRAND
Data as a core feature in all
Aspirational brand with
portfolio
strong quality reputation
(anticipating the market)
(*) Source: Anatel
|4|
2015 RESULTS PROVING OUR DATA CENTRIC
APPROACH RIGHT
KEY RECENT MOVEMENTS 2015 KEY ACCOMPLISHMENTS
• New complete portfolio • Postpaid data consumption increased
(voice, SMS and data) for all by +40%
segments (postpaid, hybrid,
prepaid and SME’s) • Data represented 54% of B2C ARPU in
4Q15
• Increased data allowance
in all plans (up to 30 Gb) • Solid 8.2% ARPU growth in 4Q15 for B2C
• Adding new data driven • Healthy and stable churn rate in
features, such as data sharing postpaid (1.25%)
and carry-over • Positive net portability ratio every
single month in 2015
|5|
VIVO’S COMMERCIAL PRIORITIES WILL CONTINUE TO
DRIVE DATA MONETIZATION IN THE FUTURE
• Continuously increase • Develop alternative
smartphone and data ways to reduce
penetration in all subsidy opex without
segments losing customer
attraction
• Innovate in data services
to differenciate offer and • Increase commercial
avoid price wars efficiency at sales
channels
• Accelerate launching of
new digital services
(apps) leveraging a strong
network of partners
|6|
FOSTERING SMARTPHONE PENETRATION AS A LEVER TO
INCREASE DATA SERVICE REVENUES IN ALL SEGMENTS
P O S T PA I D HYBRID P R E PA I D
Smartphone +3p.p. +10p.p.
+16p.p. +17p.p.
Penetration 88% +25p.p. +29p.p.
75% 78% 69% 66%
% of customer base 53% 49%
with smartphone 28% 21%
2013 2014 2015 2013 2014 2015 2013 2014 2015
+11p.p. +6p.p.
Data Service +4p.p.
+15p.p.
Penetration 91% 97% +20p.p. +10p.p.
80% 86%
67% 71% 68%
% of Smartphones 58%
38%
with Data Services
2013 2014 2015 2013 2014 2015 2013 2014 2015
|7|
4G AS AN IMPORTANT LEVER TO INCREASE
ARPU AND USAGE
ARPU Increase Usage Increase
4G Customer Base
3G 4G 3G 4G
R$/Month MoU/Month MM Customers with 4G Device
9.5
+15% +86% 6.9
5.2
3.5
2.6
1.8
1.3
0.9
0.2 0.5
3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Over 97% of smartphone
3G 4G 3G 4G
sales with 4G devices
|8|
VIVO RENOVA ACCELERATES SMARTPHONE RENEWAL
WITH NO ADDITIONAL SUBSIDY COSTS TO VIVO
Important lever
for value proposition differentiation
100% operated by a 3rd party partner
No operational costs to Vivo
Over 10% of devices sales
through Vivo Renova Program
Supports a more efficient
subsidy strategy keeping
customer purchasing power
|9|
FOR PREPAID CUSTOMERS, VIVO TUDO TURBO
AS AN ACCELERATOR FOR INTERNET ADOPTION
Increasing number of
Continuously growing VT base...
add on’s data packs sold…
MM Customers MM data packs
+45% x 6.5
Launched
Jan/14
2014 2015 4Q14 4Q15
• First to launch an ... Impacting on Prepaid
integrated recurrent offer ARPU growth
for prepaid segment
R$/User/Month
• Continuous focus in
migrating customers to
+6.3%
Vivo Tudo and increasing
loyalty
• ARPU growth through a
more data for more money 2014 2015
strategy
| 10 |NEW FLAVORS OF DATA PACKS WILL BE LAUNCHED
TO REINFORCE VIVO’S MONETIZATION STRATEGY
Specific apps
data pack • Social
networks
• Vivo Redes Sociais
• Vivo Mensagens • Messaging
Leveraging the exploding New opportunity
demand for data, Vivo to BTL campaigns to
will launch segmented Nights & Weekends increase ARPU with
data packs to continue to data pack • Nights good value for
(0:00AM -6:00AM)
increase ARPU • Vivo Noite
• Weekends money for clients
• Vivo Final (Saturdays & Sundays)
de Semana
Discount
on price per MB
versus standard offer
| 11 |FOR HYBRID SEGMENT, HIGHER DATA ALLOWANCES
TO ATTRACT HIGH VALUE PREPAID CUSTOMERS
In 2015 In 2016
Unlimited SMS and On-Net calls
R$39.99 R$54.99 R$69.99 R$84.99
1 GB 1.5 GB 2.0 GB 2.5 GB
25 minutes 50 minutes 75 minutes 100 minutes
off net off net off net off net
Quarterly Net Adds Hybrid Hybrid ARPU
MM Customers
+150%
R$/Customer/Month – Year End
+11%
+15%
1Q15 4Q15 2013 2014 2015
| 12 |DIFFERENTIATION IN POSTPAID THROUGH NEW DATA
DRIVEN FEATURES AND LARGER ALLOWANCES
New 2016 Portfolio launched last November:
More Data for More Money
2GB Postpaid Net Adds Share
R$99.99 3GB 4Q15
R$124.99 %
4GB Competitors
R$169.99 5GB
R$189.99
31
1stData Sharing 6GB
Plan in Brazil R$259.99 7GB 69
R$289.99
Vivo
1st Data
8GB
R$349.99
Rollover Plan in 9GB Positive portability net adds ratio
Brazil R$389.99 every single month in 2015
12GB 15GB
R$439.99 R$489.99
| 13 |INNOVATION THROUGH DIGITAL SERVICES TO
ACCELERATE DATA CONSUMPTION
Complementing the standard Consolidating as a new
…and exploring new apps
service offer with add on’s… source of revenue growth
VAS + Digital Services Revenues
• Insurance
• Financial Services +14%
+22%
• Carrier Billing
• Advanced Voice Services
• Voice mail
• TuGo
• Ringback tone 2013 2014 2015
| 14 |MOREOVER, A NUMBER OF PROJECTS IN PLACE TO
DRIVE COMMERCIAL EFFICIENCY
Commercial Costs End of sales Elimination of 2,700 promoters, rethinking
Commercial Costs* as percentage of total revenues promoters in channel’s value chain by stimulating sales
retail stores from retailers own salesforce
-3.1 p.p.
-1.3 p.p. Optimization Optimized headcount by 7% and 15 stores
of sales force closed, generating about R$2.5MM
for own stores monthly savings without losing postpaid sales
More rational
approach Increased price for prepaid SIM cards
for prepaid in the massive recharge channel
chips pricing
Subsidies
allocated mostly Device subsidy policy exclusively for 4G
2013 2014 2015 to high end postpaid customers
plans
* Commercial costs includes Commission, Subsidy, advertising, ITX, Fistel, SVAs revenue sharing, and others.
| 15 |WITH THE RIGHT COMMERCIAL STRATEGY ALREADY IN
PLACE, VIVO IS BEST POSITIONED TO CAPTURE MOBILE
INDUSTRY GROWTH
• ARPU increase (+8.2% YoY in 4Q15) and postpaid customer base growth
(+11.5% in 2015) as key drivers of Vivo’s mobile revenue growth
• Still a considerable opportunity to increase data penetration and drive
up data consumption in all segments through data driven plans and
digital services
• Unique value proposition differentials as Data Rollover, Smart Data
Sharing, and Digital Services
• More for More: commercial strategy avoiding price war and keeping
portfolio attractiveness
• Commercial efficiency as an important lever to increase profitability
| 16 |VIVO’S COMMERCIAL APPROACH
Most competitive 3P
bundle, anticipating
the market in 4P and 5P
| 17 |MOST COMPETITIVE 3P PORTFOLIO
NETWORK COVERAGE PAY TV
16.7 million homes passed in Superior experience
186 cities nationwide (FTTx) through IPTV and
Interactive DTH
VIVO
Superior value
proposition in 3P
FOCUS ON UBB BRAND SINERGY
GVT’s powerful
Leadership in Ultra Broadband
broadband reputation
offer, with 55% Market Share in
combined with Vivo’s Top
speeds >34 Mbps
of Mind position
| 18 |KEY DECISIONS IN 2015 LED TO SOLID RESULTS
IN FIXED BUSINESS AND SUPPORT LONG TERM STRATEGY
KEY RECENT MOVEMENTS 2015 RESULTS
• UBB footprint expansion and • Premium products’ customer
acceleration of network occupation base double-digit growth: +14%
• Commercial initiatives to maximize in Broadband and +23% in Pay TV
ARPU • Outstanding revenue growth of
• Fixed voice bundling to stabilize +18% in FTTx (FTTH in SP +96%)
declining revenue trend • 55% of Broadband market share
• New Pay TV portfolio to drive >34 Mbps
better sales mix and higher ARPU • Leadership in Pay TV net
• Start fixed-mobile cross-selling for additions (+159k)
customer base
| 19 |FIXED BUSINESS GROWTH STRATEGY IS
SUPPORTED BY DIFFERENT DRIVERS
Continue to grow in ultra broadband and prepare for future data
usage monetization (data caps)
Improve broadband experience and expand its ecosystem
through IoT (Smart Home)
Differentiate Pay TV value proposition even further
(VoD, Everywhere, Multiroom PVR, Real Catch-up)
Protect voice revenues through customer base segmentation and
services bundling
Evolve bundling strategy towards 4P with better value for money
(avoid value destruction)
| 20 |VIVO WILL CONTINUE TO EXPAND ITS FIBER NETWORK
OUTSIDE SP AND INCREASE PENETRATION IN SP
Vivo has the expertise to quickly In SP, fiber network occupation is
capture share in new areas outside SP accelerating
Market Share in New Cities FTTH Homes Passed in SP
(months after launch)
17.3%
13.0%
2013 2014 2015
4.3%
Fiber Network Penetration (%)
M1 M6 M12
Navegantes / SC
38% Market Share after 4 months
85% of sales > 25 Mbps 2013 2014 2015
| 21 |THERE IS STILL SIGNIFICANT
OPPORTUNITY IN SP TO MAXIMIZE
COPPER NETWORK’S RETURNS
in areas with network upgrade
2.7M potential, low competition and
households demand for higher speed broadband
Vivo has successfully upgraded …which is generating higher
a legacy copper area in SP … returns
>10 Mbps availability in Copper Network Broadband Sales ARPU
96%
13%
Before Upgrade After Upgrade Before Upgrade After Upgrade
| 22 |VIVO CAPTURES A SIGNIFICANT PART OF
ULTRA BROADBAND DEMAND, LEVERAGED BY
ITS MODERN NETWORK
Demand for Premium Services
Vivo’s FTTx Customer Base Ultra Broadband Market Share
(>34Mbps)
55%
21% 17%
2014 2015
Vivo Player 1 Player 2
Vivo’s FTTx ARPU Average Speed of Broadband Customer
Base (Mbps)
14.6 Average speed of Vivo’s
FTTx new customers in
2015 was
4.6
34 Mbps
2014 2015 Vivo Market Average
| 23 |INCREASING DEMAND FOR HIGHER SPEEDS AND
DATA USAGE IS AN OPPORTUNITY TO CAPTURE
MARKET VALUE
Data Usage in Vivo is Growing Fast Data Cap Business Model Guidelines
Average Usage
FBB Vivo (GB/mo.) Video OTTs 4% of customers consume 20% of all
already represent data traffic
41% of Vivo’s
data traffic Monetize fixed network
2014 2015 through fair usage concept:
• Different data cap levels
Worldwide monetization models • Promotional data caps
• Upselling to higher speeds
Multiple
Multiple
Single cap Single cap caps with
caps
UL options
Additional benefits:
• Network investments optimization
• Reduce risk of quality issues
| 24 |BROADBAND NEW FEATURES AND SERVICES
WILL REINFORCE OUR SUPERIOR VALUE PROPOSITION
Caching OTT Video Content Wi-Fi Total Smart Home
• Better customer experience • Improving performance in the • Global project in partnership with
with caching roll-out “new” last-mile – Wi-Fi Experience Huawei
• Latency reduction (4x) • New CPE with best Wi-Fi in the • Value proposition centered around
market (Wi-Fi AC) “being at home when you are not”
• Performance improvements
immediately perceived by clients • Additional efforts for Wi-Fi • Self-install kit with optional
extension within customer premises professional services
• Expandable kits
| 25 |VIVO TV VALUE PROPOSITION IS TECHNOLOGY AGNOSTIC
AND UNIQUE IN THE MARKET
Premium Pay TV (IPTV and Interactive DTH) represents
63% of our customer base (+20% in 2015), 89% in 3P bundles Premium Features in Pay TV Offer
Competitors
Cable Player DTH Player
PVR Multiroom
PRODUCT OFFERS
VOD in STB
FULL 3PLAY BUNDLES
HIGH DEFINITION
Cities in the coverage area
Plans 100% HD
Leadership in HD Apps
Channels
Globo HD
100% HD
NON-LINEAR CONTENT without simulcast
On Demand
Catch Up TV
OTT: Live and VoD Real Catch-up
QUALITY
PREMIUM FEATURES
PVR Multiroom/cloud
HIGH AVAILABILITY
HD* Channels 74 72 58
Real Catch-up
Content Quality
Apps / Customized
* Including free-to-air channels
4K Content
| 26 |STRATEGY TO DIFFERENTIATE TV IS PAYING OFF, VIVO WAS
LEADER IN NET ADDS WHILE IMPROVING ARPU AND SALES MIX
Pay TV Sales Mix
Pay TV content
synergies 100%
Pay TV Net Adds 2015 (000s) 71% 83% aligned with
plan in 2016
159 29% 17%
Jan/15 Dec/15
Player 1 Player 2
Low-End Mid/ High-End
Vivo
Pay TV ARPU (R$)
-199 +10%
-332
Source: Anatel, Dec/15 Jan/15 Dec/15
| 27 |FIXED VOICE BUSINESS STABILIZED,
WHILE MARKET CONTINUES TO DECLINE
Brazilian Fixed Voice Market (millions) Fixed Voice Initiatives
• Increased unlimited voice plans sales mix
Lines in Service
• Plans with fixed-mobile minutes included
• Marketing campaigns to promote new
-3.3%
voice offers
Vivo’s Fixed Voice
45.1 45.2 45.1 45.0 45.0 YoY Revenue Growth
44.4 44.2
0.2% 0.8%
43.6 0.0%
-2.4%
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q15 2Q15 3Q15 4Q15
Source: Anatel
| 28 |SEVERAL INITIATIVES IN PLACE TO LEVERAGE
COMMERCIAL EFFICIENCY
Commercial Cost per Unit • Increase sales
force productivity
10.7% • Back office processes
Productivity optimization
& Processes Costs below
• Sales commission revision
inflation in
2015, even
• Focus on more effective with better
sales channels (i.e. online) sales mix
• Revision of
-0.5% Sales Channels commercial contracts
& Contracts
Commercial IPCA 2015 • Product portfolio
integration
Cost 14/15
| 29 |RESULTS FROM CROSS-SELLING TO MOBILE
CUSTOMERS ARE PROMISING
Sales and offers strategy Results and Expectations
• Prioritize premium mobile customers • In 2015, sales were
• Align incentives in mobile channels to 42% higher than the integration plan
promote fixed products • Sales volume expected to grow 240%
• Bundles with better value for money in 2016¹
Product Mix
Leverage current mobile channels
Broadband TV
Stores Online (>25Mbps) (High-end
# stores with mobile and Call-to-action plan)
fixed offers ads in Vivo and
GVT portals +
716 + 6%
89%
Call center
156 Specific trained
teams for inbound
and outbound
2015 2016
Other Channels Cross Sell Other Channels Cross Sell
¹Average sales by quarter in 2016 compared to sales in 2015 Q4
| 30 |VIVO IS THE MOST PREPARED OPERATOR
FOR FIXED AND MOBILE CONVERGENCE UNIQUE BRAND
Aspirational brand with
strong quality reputation
CONSUMER 5P VALUE PROPOSITION SUPERIOR CHANNEL
NEEDS EXPERIENCE
4G HDTV Excellent customer
CONVENIENCE
Single billing
experience through stores
Complete sales and customer and digital channels
care channels – One Stop Shop
UBB Voice DIGITAL SERVICES
QUALITY AS DIFFERENTIAL
Best experience in all bundled
services Apps to complement and
Apps and differentiate 4P offer
GOOD VALUE FOR MONEY more
Digital services as differential
More benefits for 5P Bundles BEST NETWORK
Integrated Loyalty Program EXPERIENCE
Best experience anywhere
(indoor and outdoor)
| 31 |WILL CONTINUE CAPTURING MARKET VALUE IN OUR
KEY SEGMENTS: ULTRA BROADBAND AND PREMIUM
TV SERVICES
Key Messages Robust growth in key segments
• Healthy growth in fixed business nationwide Broadband Revenue
(SP and outside SP) YoY
FTTx +18.3%
• Continue to expand its fiber network and
capture opportunities in copper, where ADSL -1.8%
relevant
2014 2015
• Leveraging its solid position in ultra Pay TV Revenue
broadband and developing new features on YoY
Pay TV to differentiate Vivo´s value +110.0%
IPTV
proposition
Interactive +34.8%
DTH
• Most prepared operator for fixed and mobile DTH +5.2%
convergence, rapidly evolving its offer to 5P
2014 2015
| 32 |VIVO’S COMMERCIAL APPROACH
Unique all-in-one
B2B Solution provider
| 33 |VIVO EMPRESAS: A FULL NETWORK+DIGITAL SERVICE
PROVIDER
SEGMENTED MODEL NATIONWIDE
SERVICES
Segmented commercial and
customer attention model National voice and data
coverage
VIVO
Unique all-in-one B2B
solution provider
MOBILE B2B NETWORK + IT
Simplified, data driven Complete network &
portfolio Digital/IT value
proposition
| 34 |SOLID 2015 RESULTS DESPITE MARKET CONDITIONS
KEY RECENT MOVEMENTS 2015 RESULTS
• New SME post-paid mobile portfolio:
simplification and data bundling • 80% data penetration in new
postpaid additions / migrations
• Cross-sell leveraged by Vivo/GVT
synergies • +25% ARPU in mobile activations
• Good performance on wholesale • +940 new corporate customers
agreement added by synergy
• M2M: managed connectivity • 50%+ share of M2M market growth
platform and commercial focus • 20% growth in digital-based
• Building digital capabilities as a revenues
platform for future growth
| 35 |VIVO EMPRESAS WILL CONTINUE TO LEVERAGE ON
ITS INTEGRATED VALUE PROPOSITION, WHILE BUILDING
THE LEADING DIGITAL PLATFORM IN BRAZIL
Increase mobile data and UBB penetration within
customer base
Maximize synergy potential through fixed & mobile
cross-sell between SME current customer base, and new
acquisitions / retention of Large Corporations
Build the most comprehensive digital platform in Brazil
in order to drive corporate digitization
Focus on Datacenter, Cloud, Security and IoT
Value-based commercial approach, focused on
right-selling and maintaining revenues market share
Increase commercial and post-sale efficiency through
channel optimization and process automation
(e.g.: Salesforce implementation)
| 36 |ADJUSTED SEGMENTATION TO BETTER
ADDRESS CUSTOMERS NEEDS
Segmentation Strategic Drivers
WHOLESALE • Service Telcos and ISPs
Telcos and ISPs • Focus on MVNO growth
CORPORATE • From Revenue to • Growth outside SP and
Largest private and Profitability Digital
public holdings • Defend large accounts • Customized offers
• Focus on Government • Post-sales differentiation
TOP • Growth with • Focus on outside SP,
Mid-sized Profitability targeting customer
corporations • Focus on high totalization
potential and fresh • Specialized attention
• Scalable Portfolio model
SMEs and SOHO • Focus on right-sell and • Simplified portfolio
revenue market share • Scalable attention model
• Launch new sales
channels
| 37 |ON MOBILE, WE ARE SIMPLIFYING
OUR OFFER, LEVERAGING ON
DATA BUNDLING AND ON-NET
Committed ARPU (R$) Data Penetration (%)
+25% +34p.p.
Previous SmartVivo Previous SmartVivo
Portfolio Empresas Portfolio Empresas
| 38 |WE ARE LEVERAGING GVT’S NETWORK TO ACQUIRE NEW
CUSTOMERS AND INCREASE MARGINS FROM EXISTING
ONES, SPECIALLY OUTSIDE SÃO PAULO STATE
• Acquire new customers based on
GVT’s fixed network footprint outside Customers Added1
Sao Paulo
0 944
• Cross-sell for fixed and mobile
jul/15 dez/15
customers based on the strength and
presence of Vivo’s B2B salesforce
1Withouth SME&SOHO
• Increase wallet share of existing
customers, by expanding the services
outside Sao Paulo
• Increase profitability on nationwide
customers by reducing dependency on
third-party resources
• Expand fixed and digital portfolio
nationwide
| 39 |IT WILL CONTINUE TO GROW AT A HIGHER RATE THAN
THE TRADITIONAL TELCO MARKET, SPECIALLY IN VIVO’S
ADDRESSABLE MARKET
IT Market Growth1
+7%
2014 2015 2016 2018 2020
Vivo’s addressable IT Market (2015)1
CAGR 15-20
• Hardware • Security (AntiDDoS, WSG, MSS, CyberSecurity) 24%
• Software • Datacenter (Colocation, Hosting) 13%
90% 10%
• Training R$116Bi R$13Bi • Cloud (Public and Private Cloud, SaaS) 33%
• General Support • Desktop Management (PC as a Service, Outsourcing LAN) 8%
Services Total 16%
1IDC - Latin America Semiannual IT Services Tracker, 2014/2015 | 40 |FOR TOP AND SME CUSTOMERS, VIVO BUNDLES
IT/DIGITAL WITH OUR TRADITIONAL TELCO OFFER
ARPU (R$) PCaaS Market Share %
Voice Ultra
Broadband +38%
Vivo is the leading provider of
19% Managed PC services in Brazil
PC as a Service
Ultra Broadband Ultra Broadband
+ PCaaS
Vivo Gestão
Voice
(Trad./VoIP) Network
de Equipe
ARPU (R$)
Services
+24%
Construto
r de Sites
SVAs
Telco Services Telco Services
Cloud Servers Open Cloud
+ VASs
| 41 |AS SECURITY THREATS HAVE INCREASED IN DIGITAL
ECONOMY, VIVO HAS DEVELOPED A COMPLETE AND
INNOVATIVE SECURITY SERVICES PORTFOLIO
ARPU (R$)
+20%
Innovative Security Digital ID Persistent Metadata file Cyber
Control invasion test protection Security
Telco Services Telco Services
+ Security
Application Security Vivo Anti DDOS Vivo Aplicação
WEB Segura Security Revenues (R$)
(WAF)
+1,8x
Network Security Vivo Filtro Web Vivo Segurança Vivo
(WSG) Gerenciada (MSS) Conexão
Segura 2015 2016
| 42 |VIVO HAS ALSO DEVELOPED THE MOST COMPELLING
VALUE PROPOSITION FOR DATACENTER AND CLOUD
SERVICES WHICH WILL DRIVE FUTURE GROWTH
Cloud/Security
Colocation Space (m²) Revenues (R$)
Hosting
+56%
Private Cloud +80%
Open Cloud
2014 2015 2014 2015
Only TIERIIIx3 DC
in Latin America
Managed
Connectivity
| 43 |VIVO HAS A SOLID PLATFORM IN B2B TO KEEP
GROWTH IN BUSINESS
IT/Digital Services Revenues
• Vivo is the B2B leader in
Mobile segment in Brazil and +14% +20%
Fixed segment in São Paulo
• With GVT integration, Vivo 2013 2014 2015
will strengthen its position Mobile Data Revenues
and will be the B2B national
leader in mobile and fixed +52% 41%
• Vivo value proposition is
2013 2014 2015
unique in B2B market:
UBB Revenues
Mobile, Fixed and Digital/IT
bundled offer with a +47% +34%
segmented commercial and
customer care approach
2013 2014 2015
| 44 |VIVO’S COMMERCIAL APPROACH
Superior experience through
the enhancement of our
traditional and digital channels
| 45 |OFFERING THE RIGHT PRODUCT
THROUGH THE RIGHT CHANNEL
301 2.4k 600k
Vivo stores Dealers Prepaid top-up
points of sales
9.7k 3.8k >7.6k
Telemarketing Door-to-door SME and large
agents GVT+Vivo agents account sales agents
Digital Channels
| 46 |NEW CONCEPT DEVELOPED FOR STORES AND DEALERS
Videowall Vivo Guru
To inforce brand Support the sales
experience and of Smartphones
commercials offers and Apps
TV Lounge Premium Care
Cross-Selling fixed Reserved space
products, with exclusive for premium
fiber and IPTV customers
experience
Queue Sustainable
Management Sales
Vivo optimized stores Paper-less sales
headcount by 7%
through flow sizing tools
Store sales represent 86% of
Vivo’s pure postpaid sales
| 47 |EXCELLENT CUSTOMER
EXPERIENCE THROUGH E-CARE Exponential growth
with more than 8MM
New “Meu Vivo” App downloads
Main features: “Meu Vivo” Accesses
• Data consumption control millions
• Billing information
• Data pack purchases +854% 58
• Schedule store visits
22
6
2013 2014 2015
| 48 |INNOVATIVE NEW DIGITAL CHANNELS ENHANCING
CUSTOMER EXPERIENCE
Vivi Vivo Guru Forum Vivo
Self-service for technical Collaborative channel for
Virtual Assistant
information P&S information
400K Customers
served per month
1MM+ 200k+
accesses per month unique users,
with assertiveness of growing rapidly
92%
| 50 |LEVERAGING E-COMMERCE B2C CHANNELS
Mobile Sales (Transactions) Vivo´s FTTx Sales
Mobile B2C Black Friday Digital Top-Ups % Digital / Total
+41%
33%
+395% +218%
18%
2014 2015 2014 2015 2014 2015 DEC 2014 DEC 2015
Digital is a key channel for
premium BB sales
| 51 |VIVO’S COMMERCIAL APPROACH
Broad and deep usage of Big Data
to enhance customer experience
and optimize business results
| 53 |BUSINESS TRANSFORMATION
THROUGH ADVANCED ANALYTICS_
Broad and deep usage of Big Data to enhance customer
experience and optimize business results
Vivo’s Big Data Advanced Analytics & Big Data
Data Explosion Capacity
PTBs
• Network Optimization
Mobile Networks, • Churn Reduction
Digital Economy, IoT 13
New and Scalable • Media Mix Model
Technologies 87x • Revenue Assurance
Distributed and • Micro-Segmentation
Memory Processing • Customer Journey
2.6
0.14
New Algorithms
Machine Learning 2014 2015 2016 E
& Real time Decision
| 54 |VIVO IS ALREADY USING BIG DATA TO
TRANSFORM BUSINESS
Machine Learning Relevant Contents Business Optimization
Machine Learning applied to Next Customer micro-segmentation Combine customer mobility, usage
Best Offer algorithms to optimize associated with direct marketing and value to network events, quality
the return of BTL campaigns campaigns and customized offers and capacity to optimize Capex
Investment and Customer Experience
25% increase in Up to 2.5x higher 30% relocation of
Services Activation response rates Network Capex
| 55 |VIVO’S COMMERCIAL APPROACH
One of the most valued and
inspirational brands in the market
| 56 |VIVO VALORIZA - VIVO’S LOYALTY PROGRAM
ADDING VALUE TO RELATIONSHIP WITH CUSTOMERS
Goal: To enchant clients elevating satisfaction and loyalty ratings
1 Surprise clients with 2 Reward Customers for 3 Exclusive premium
benefits and fun their monthly spent with experience and service
moments a loyalty program for high value clients
Strategic Partnerships with lead players in the market
More than 50 The most important Exclusive benefits
Half price for loyalty programs in from partners in
theater’s ticket gourmet partners
the country various segments
| 57 |STRONG BRAND WITH ENGAGING AND HIGH-IMPACT
COMMUNICATIONS STRATEGY FOCUSED ON QUALITY AND DATA
CENTRIC POSITION Brand Image
Company Uniqueness Attributes Communication
Strong and Quality Innovation Intelligent
Trustworthy 4G Technology Engaging
Speed High Impact and
Likability
Source: Estudo Comunica 2015, mar/abr 2015, SP, Recife, Curitiba, BH e RJ, 22 grupos
Vivo is the brand with the highest preference and highest recommendation
30 Preference Recommendation
24 40 36
18 17 27 24
P1 P2 P3 P1 P2 P3
Source: Brand Tracking Q4, total Brasil
| 58 |VIVO, ONE OF THE MOST VALUABLE
AND REMEMBERED BRANDS
Main Recognitions
2.6
US$
billion
12x 8x 4G
8th Most Most The fastest
Valuable Trusted TOP of MIND in Brazil
mobile operators
Brand in Brand in
Brazil Telecom Open Signal Report
feb/16
Brand Finance Rev. Seleções/IBOPE Datafolha Top of Mind (opensignal.com/reports)
| 59 |COMBINATION OF 2 STRONG BRANDS FOR A UNIQUE PROPOSITION,
LEADERSHIP AND TRUST FROM VIVO WITH INNOVATION AND
SATISFACTION FROM GVT
Phase 1: Feb 19th to Apr 1st Phase 2: Apr 2nd to 15th Phase 3: Apr 15th to 30th
Direct communication Massive Informative Campaign National Brand Positioning
to GVT Customers Unique identity in all POC
(website, bills, cars, uniforms)
| 60 |VIVO INSPIRATIONAL BRAND
4G ULTRA HDTV VOICE APPS
BROADBAND AND MORE
| 61 |DISCLAIMER These presentations may contain forward-looking statements concerning future prospects and objectives regarding growth of the subscriber base, a breakdown of the various services to be offered and their respective results. The exclusive purpose of such statements is to indicate how we intend to expand our business and they should therefore not be regarded as guarantees of future performance. Our actual results may differ materially from those contained in such forward-looking statements, due to a variety of factors, including Brazilian political and economic factors, the development of competitive technologies, access to the capital required to achieve those results, and the emergence of strong competition in the markets in which we operate. For a better understanding, we are presenting pro forma numbers combining Telefônica Brasil and GVT results for all financial and operational indicators for every period as of January, 2014.
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