Data Convergence and the Convergent Household

Telecommunication companies have invested great sums to build their infrastructures, bringing networks to fruition.

Those infrastructures provide the public with mobile, internet, and other digital services. This intensified with the smartphone.

Today, telecommunications companies are acquiring major media companies to bring both existing and new products, as well as the content it carries, back to their networks.

Why? They know mobile saturation has reached a peak. Mobile operators, in well-established markets, are aware that future growth resides outside of core SIM cards and smartphones.

Vodafone Germany is a great example of a telecommunications company conducting this type of hyper disruption. They are turning to new business models to grow revenues, increasingly connecting the world with content. In Vodafone Germany’s business case, this is about convergence. The merging of mobile, fixed line, cable, and internet (aka the “quad play”).

Vodafone Germany by the numbers

$11.4B

revenues

29.5M

mobile subscribers

6.9M

fixed broadband customers

Vodafone Germany is the largest subsidiary of the Vodafone Group, accounting for 30% of total revenues. As a leading communication company, providing mobile, fixed broadband, TV and voice services, Vodafone Germany seeks to connect for a better future.

Deeming themselves as “the Gigabit company,” Vodafone Germany is building the GigaNetwork through its next generation 5G mobile networks and their acquisition of leading cable network operator, Unitymedia.

As a leading mobile operator, upwards of 60% of Vodafone Germany’s revenues came from mobile subscribers. Through hyper disruption, Vodafone Germany’s business is moving this majority from mobile to fixed and internet, becoming a convergent player. Vodafone’s entire business model and go to market strategy is changing from viewing customers as individuals to viewing customers as households – where fixed line, cable, internet, and mobile services are tightly coupled.

Hyper disruption stemming from an acquisition.

The decision to acquire Unitymedia, shifted Vodafone Germany from being a mobile operator to a fixed operator with mobile capabilities.

Today, for consumers who are both Vodafone Germany mobile customers and Unitymedia fixed line customers have reasonable expectations that their contracts, services, bundles, and future offers are integrated. More so, consumers expect the ability to enter a Vodafone retail store or a Unitymedia store and purchase fixed line services, and vice versa, purchase Vodafone mobile services, immediately following the legal operational day one of the acquisition.

Anna Dimitrova Chief Financial Officer and Strategy Director

Michael Hansen Director, Business Intelligence

Juliette Aucamp Business Intelligence Partner for Consumer

Michael Weichert Head of Central Analytics & Business Partnering Management

Solmaz Karami Head of BI Strategy, Business Architecture and Portfolio Management

Sven Olphey Senior Project Manager of Key Accounts

“With convergence and the convergent household, we need to match customers into a household.”

“Looking at addresses, you start to understand how the customers live together, and suddenly realize there are some people who don't take on their husband's surname when they get married or there's a multi-family house, and so forth.

The assumption was that you had one fixed product within a household. What customer would have two fixed net products in the household? You're talking about an internet connection and then a landline service from two separate providers, or one from DSL and one from cable.

What was really interesting was when we started matching this data together, we realized that there are indeed customers that have two fixed net products in their household, which was something that business did not believe would happen unless it was in a separate state (such as a child away at the university).

So that was a moment where the data had proven the business intuitions wrong.”

Juliette Aucamp, business intelligence partner at Vodafone Germany

Matching customers with households is step one.

Identifying overlapping customers for upselling and cross-selling opportunities will lead to the growth Vodafone Germany seeks.

“It started as an initial idea of wanting to measure household versus customer, and the opportunities around what we deliver, and upselling and cross-selling across a household,” says Solmaz Karami, head of BI strategy, business architecture, and portfolio management at Vodafone Germany.

As the head of BI strategy and portfolio management, Karami shares that “you should ask why stakeholders need something and not what the stakeholders need, because if you lead with the ‘why’ discussion, it brings you to strategy.”

“You bring input and everything you have around it, which makes you know what is the best ‘what’ for the best ‘why.’”

With data being at the core of Vodafone Germany’s business. Karami expanded, “we already execute different matching algorithms across the organization. By bringing them together and defining with the stakeholders our entire KPI reconciliation process, we were quickly able to own the final version and include the Unitymedia acquisition. We presented a viable new business model for Vodafone Germany.”

Combining data and interpreting it in a clever way.

“We brought together an understanding of our common customer base and the households we have together which have completely separate footprints from what Vodafone alone has on the cable side. There is a potential of gaining new households which have cable, and now these households have the opportunity for discounted mobile on top, which is quite interesting for those customers. Bringing this data together, merging it fast, actually allowing the business to go out on the commercial day one with our campaigns and communicating to our customers new offers available to them. That's quite a success on combining data and interpreting it in a clever way.”

Michael Weichert, Head of Central Analytics and Business Partnering

With a legal operational day one rapidly approaching, Vodafone Germany relied on Teradata to combine, model, and score 30M Vodafone subscribers and 7.5M household subscribers to match customer data.

Vodafone Germany quickly identified 17M households where Vodafone and Unitymedia subscriptions may be converged. As consumers, this means one service bundling and a convergence of offers and promotions.

Accelerating business continuity for more immediate returns.

For Vodafone and Unitymedia, quickly integrating businesses means not only being operationally ready on legal day one of an acquisition, but also accelerating business continuity for more immediate returns. With a population of 83M, the revenue growth for up-sell and cross-sell and new customer acquisitions is bright. This is an undertaking that is possible through the speed and scalability of Teradata.

Vodafone Germany's answer:

Quickly identifying overlapping customer bases across mobile, fixed line, cable, and internet services.

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