Distribution session

Vodafone Open Office

Mumbai, India

Sunil Sood, Director Business Operations West and South

Sanjoy Mukerji, Director Business Operations North and East

30 November - 1 December 2011

1
 India scale
Country Population (m)
China 1323 Spans 3.3m sq. km
India 1180 across 35 states and union
United States 302 territories ~ 6X of France
Indonesia 245
State of Uttar Pradesh
Uttar Pradesh 191
Brazil 189
would be the 5th largest
Pakistan 165 country in the world
Bangladesh 147
Russia 143 Urban population 28%
Nigeria 131 of total1
Japan 127
Bihar 121 Per capita income 2010-11
Maharashtra 108 US$11502
Mexico 107
Philippines 89
Madhya Pradesh 88
West Bengal 88
Vietnam 84
Germany 82
1 - Census 2001, Ministry of Home Affairs
Egypt 79 2 - CSO, India
Ethiopia 75

2
 India: Telecom market structure
3 15
Ave. ARPU Ave. RPM
(US$)1 Mobile penetration1 (US$)1
3.5 70% 0.01

3 Metro circles2
Large cities; high purchasing power, high population density,
cosmopolitan
160% penetration

Delhi
5 A circles
States with highest earning power
84% penetration

8 B circles
Majority of population in rural, low infrastructure development
Kolkata
63% penetration
Mumbai

6 C circles
Relatively lower earning power, limited infrastructure
Chennai 50% penetration

1. Bank of America Merrill Lynch Global Wireless Matrix 28 September 2011

3 2. Chennai and Tamil Nadu treated as one circle as per TRAI reports
 Zonal operation structure
Circle

First level of
Zonal Head General management

Customer Credit &

All Channels Marketing
Service Collection
Network

Proximity to the customer

Channel specialist
Uniform experience
Speed to market
Empowered service touch points
4
 Channel structures

Vodafone

Indirect Channel Exclusive Retail Direct Channels Modern Trade B2B Business

2 tiered distribution Exclusive Selling directly to the Large format outlets Enterprise
model Sales and service end customer / chain stores VGE
For mass market Primary focus on Focused on postpaid Future growth driver National A/C
reach postpaid, terminals for Data & 3G
SME
Focused on prepaid & data
Includes fixed line
and data

Multi product channel strategy for uniform customer experience

5
 Indirect channel challenges

593k villages, 92% have population of less than 10k1

66% of population in villages of less than 10k1
Ratio of Urban to Rural per capita is 2.72
Tele-density - Urban 163%, Rural 35%3
Predominantly prepaid market
Unorganised retail

1. Census 2001, Ministry of Home Affairs

2. Central statistical organisation estimates 2004-05
6 3. TRAI performance indicator report AMJ-11
 Indirect channel (Tier 1) urban
Key Metrics
Vodafone
Unique electronic Top up outlets -
1.3 outlets per 1,000 population
Unique activating outlets - 60% of
Distributor electronic top up outlets
Daily activating outlets - 21% of
activating outlets
Data selling outlets - 40% of
electronic top up outlet
Distributor Sales
Retailer Executives Distributor Sales Executives - 1 for
every 60 outlets
Retailer Retailer

Retailer Metrics used for target setting

SIM, recharge vouchers
and e-top up and performance measurement
Sell SIMs and Recharge

Urban as defined by census

Distribution by trained distributor manpower as per company determined norms

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 Indirect channel (Tier 2) rural Direct distribution to
village clusters
within 20kms

20KM

2 Tiered distribution sales and service model to Main

Cluster of
increase presence and relevance Town 40KM
villages
serviced by
Associate
Associate distributors appointed to cater to distributor

35KM
rural population, responsible for 4 to 7 cell-sites
in designated area Cluster of
villages
serviced by
Associate distributor also responsible for Associate
distributor

providing service

Advantage of Associate Distributor

Son of soil, familiarity with local environment
Low cost, viable and scalable
Customer service closer to the rural customer

8
 Indirect channel (Tier 2) rural

Cell-site & distribution planned using

geographic information system mapping.
2443
Census population superimposed
1339

2263
All villages listed within cell-site coverage
1951

3524
Distribution norm for outlets and extraction
766
fixed for sales force by village
5 km

2443
1126

Cell-site location Population

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 Indirect channel reach

Indirect Channel partners Multi Brand outlet reach

1,400,000
9,000

8,000 1,200,000

7,000
1,000,000
6,000
800,000
5,000

4,000 600,000

3,000
400,000

1,098,465

1,250,608
2,000

346,384

434,421

415,471

740,718

680,052

963,033

778,730

867,267
200,000
2,321

1,519

3,335

3,293

3,619

5,646

3,726

7,913

3,859

8,454
1,000

0 0
MAR 08 MAR 09 MAR 10 MAR 11 Sep 11 MAR 08 MAR 09 MAR 10 MAR 11 Sep 11

Distributors Associate Distributors Activation Outlet EtopUp outlet

23.5K channel partner sales force serving 1.25 million multi brand outlets in 360K town and villages

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 Exclusive retail

Vodafone exclusive retail

Vodafone Mini Store Vodafone Mini Store -

Vodafone Store
Urban & Semi Urban Rural

Experience Convenience Service & Trust

Service advantage Entrepreneurial model Differentiator in rural

Home of the Smartphone Low cost market Face of brand

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 Exclusive retail footprint

Vodafone Stores 465 681 348 217 369

Vodafone Mini Store

7,125 1,151 2,497 1,827 1,105
(Urban & Rural)

Total 7,590 1,832 2,845 2,044 1,474

The widest presence of exclusive retail in the country, servicing over a million walk-ins, selling 33%
of total postpaid, and 8% of prepaid acquisition every month

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 Direct channels

Direct Sales Agent Tele-calling Super Call Centre

Out bound tele-calling setup, Call transfer from inbound

Feet on street, cold calling with feet on street fulfillment call center, Upselling to
model existing customer base

Analytics based data

Immediate transfer to a DSA
provided- pre to post
tele-calling set up
migration

Channel managed by the Business Partner under supervision of the Vodafone Channel Manager

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 Geographic identification for opening new outlets

Upload on a map tool

Geo coordinate mapping of Capture on an Excel Sheet
all Retailers

Appoint new
retailers
Identify Visible Gaps Bring Vodafone Closer to the customers

Focused approach to outlet expansion

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 Multi brand outlet & customer engagement: Mera(My) offer
Personalised monthly activation target
based on past 4 months performance
Customised incentives based on quality
and ARPU
Activation
Personalised recharge offer based on
last month performance Customised offer for customer and retailer
Customised incentives based on target
volume
Dial in #121, the offer is played based on
previous behaviour
Recharge
Involvement of trade in upselling
and retention

Booster Entertainment Incentivising improvement

Build efficiency in target setting
Weekly booster on Special FREE VAS for retailer to drive Dial Ins Effective utilisation of acquisition costs
Minimum Daily Activations Jokes and Radio
Bonus Card Sale Voice Chats
Quiz

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 Multi brand outlet segmentation quality focus

Retailers categorised based on their quality

H
of acquisition and revenue
Quality is determined by the retention and
High quality High quality the ARPU of the customer acquired by the
Low revenue High revenue
retailer
Revenue L H
Basis their position on the grid, relevant
Low quality Low quality decisions are taken
Low revenue High revenue Payout for acquisition
Loyalty program
L
Differentiated service
Quality

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 Capability - empowerment of sales
1. Retailer Name
Vodafone Passbook
2. Town Name
3. FOS/DSE name May11,Etop Com 1796,OTF
4. Dist Name 12513, QPS Early Bird 2520,
FTD, MTD and last MTD Apr QPS 17520, MNP
Gross UB last MTD:- 25 Recharge Sch 150, MNP Sch 0,
Gross UB MTD:- 15
MNP *121 Com 220,
Etopup tertiary last month:
12000 Anya12895, Kul 47614.
Etopup tertiary this month: Hamara wada kamai sabse
6000 JYADA
Data pack sold

Pre sales call preparation Cell-site info Retail delight

Current activation target vs. Performance in a town/village Settlement statement with
Actual, vs. LMTD cluster retailer
Etop up balance Used for acquisition cost planning All details can be accessed
Data packs sold Relative position to competition by a pull sms
Retail segment and action planning to improve
share-customer & acquisition
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 Analytics - cell-site intelligence approach
Mar-10 Oct-10 Jun-11
Platinum 6 6 6 Rajasthan District Map
Gold 11 15 17
Cell-site treated like a factory Silver 10 9 7
Ganganagar

Bronze 5 2 2 Hanumangarh

All business metrics measured at cell-site level

Churu
Information extracted for every cell-site Bikaner Jhunjhunu

Sikar Alwar
Jaisalmer Nagaur Bharatpur
customer market share Jodhpur Jaipur Dausa
Dhaulpur
acquisition market share Ajmer Tonk Sawai Karauli

quality of subs Barmer Pali

Bhilwara Bundi
traffic patterns (STD, ISD, On net, local) Jalore Rajsamand Kota Baran
Sirohi Chittaurgarh

VAS Udaipur Jhalawar

Agglomeration of information on geographic Dungarpur

Banswara
/AD/Distributor/Zonal basis
Relative position for developing strategy for;
acquisition, brand activity etc.

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 Vodafone Indias unique distribution capabilities

Zonal structure
Associate distributor model
Exclusive rural retail-mini stores
Management information tools at the individual POS level
Cellsite-based analysis and geo mapping
Best practice sharing between circles

Effective and efficient implementation engine

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