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Oi Brazil: Convergence made simple
What does convergence mean in practice as more service providers move to offer integrated services? unite hears from Luiz Eduardo Falco, CEO of Brazilian service provider Oi to find out about its experience.
What are the key convergence initiatives that Oi has introduced?
Falco: Two highly successful products have been Oi Total Bill (Oi Conta Total), which is aimed at the higher end of the market, and Oi Total Card (Oi CartãoTotal) for lower income segments.
Oi Total Bill simplifies the consumption of voice telephony by allowing a post-paid subscriber to buy any number of minutes per month and use them across a range of different access types, including fixed lines, mobile and public telephones. Similarly, Oi Total Card is a prepaid card that end-users can top up and then use to make calls over mobile, fixed and public telephones.
Historically, phone bills have been very hard to understand, with different tariffs for local and long distance calls, mobile calls, public telephone booths and so on. Because our products are easy to understand they have gained wide acceptance. People like that they are paying a fair price, and welcome the fact that the products take care of all their needs.
What technological challenges have you faced in developing converged services?
Falco: The TDM network that we operate was not designed for convergence, which created a lot of complexity for us. Without doubt the simplest route to convergence is to first transform the network to an all IP infrastructure and then to develop convergent services. However, we were keen to bring new services to market as quickly as possible and decided to build them on top of the TDM network and it turned out very well.
We can now offer a limited number of convergent services over our network, we are talking about a dozen or so, whereas an IP network could have thousands of convergent services.
What other aspects of a service provider’s business need to be considered to make converged services a success?
Falco: I believe that nowadays, communications is an industry of services more than products. This makes branding very important.
If you are a convergent company offering products and services, you must have a simple and unique branding that helps your customers understand that you are a one-stop shop. If you have several different names, customers don’t know what they are buying from whom.
Yet communications spans such a wide variety of customer segments, from the young and bold to the corporate and more traditional, that it is very difficult to create a single brand that works for all. But this is a process that all convergent companies must go through, because quite simply you cannot converge your service if you don’t converge your identity.
What advice would you give to other service providers travelling along the path of converged services?
Falco: In the end, you have to keep things simple. And this isn’t so easy in the communications business. Years ago, many people thought that the more complicated something was, the more sophisticated it was. At Oi, our success has been the result of delivering simple messages that are easy for customers to understand. I think the service provider that has a good dose of simplicity has a competitive advantage.
As the only truly integrated operator in Brazil, Oi has 30.6 million subscribers: 14.3 million fixed lines, 14.9 million mobile subscribers, 1.4 million broadband subscribers and is a leader in long-distance in Region 1, that is a wide geographical area, covering 16 states of the country.
The company, which is expanding to offer quad-play services starting in Belo Horizonte city, recently acquired a cable TV provider to add TV and video transmission services to its existing broadband and telephony portfolio and intend to deploy this product all over Region 1 as soon as restrictions are over.