Spark New Zealand Limited · NZX:SPK
Spark New Zealand — Investor Day (June 2017)
49 slides from Spark New Zealand's investor day presentation, Jun 30, 2017
Slide 1: Spark New Zealand Ltd Investor Update Session 2 of 3
SPARK NEW ZEALAND LTD INVESTOR UPDATE SESSION 2 OF 3 30 JUNE 2017
Slide 2: Intro
INTRO Simon Moutter Overview of changes in emphasis to elements of the business strategy The Spark HMB market game-plan to use our brands and partnerships to compete and win Jason Paris 1 in a rapidly digitising world The Spark Digital market game-plan to compete and win by adding value and simplify
Slide 3: Spark Connect - Mark Beder
SPARK CONNECT MARK BEDER COO SPARK CONNECT
Slide 4: Delivering the Spark of the future
Delivering the Spark of the future Wireless network leadership +30NPS Lowest cost Outstanding Top 10 Growing Migrate 20% to 25% of copper broadband customers to wireless broadband customer experience operator global key telco segments Network resilience Maintain 99.99% availability +30NPS Technology
Slide 5: Customer demand will continue to drive our network investments
Customer demand will continue to drive our network investments HMB Digital Ventures Always on More data at faster Access to the latest More capacity to Lowest IoT connectivity speeds tech download variety of cost (more devices 10x- content 100x) 200% YoY mobile 60% of voice data usage 90% of mobile
Slide 6: Wireless evolution will allow us to satisfy growing demand cost efficiently
Wireless evolution will allow us to satisfy growing demand in an increasingly cost efficient way 2012 4G 150Mbps Enhanced Mobile Broadband Gigabytes in a second ~Peak 20Gbps 3D video, UHD screens throughput 4.5G Work and play in the cloud 2016 1Gbps Smart Home/Building Augmented reality ~Air Interfa
Slide 7: Delivering New Zealand's best networks will enable…
Delivering New Zealand’s best networks will enable… Wireless network Network resilience Technology evolution Value maximisation leadership • Capacity investments • Deliver fit for purpose • Continuous evolution of • Maximise value in made proactively and network and technology technology assets by s
Slide 8: Wireless will be central to our future
Wireless will be central to our future Long term goals Wireless network • New Zealand’s best wireless network leadership • New Zealand’s lowest cost per GB • Investing in the right technology path Achievements Focus areas • Optimised Single Radio Access Network • Building a resilient core architectu
Slide 9: Network resilience and capacity
Network resilience and capacity Long term goals Strengthening our • Continue to invest in our Optical Transport Network (OTN) network resilience backbone increasing diversity, reach and innovation to keep ahead of the demand curve Achievements Focus areas • National grid like capability with Spark’s
Slide 10: Transitioning from legacy to the future will radically simplify our business
Transitioning from legacy to the future will radically simplify our business Migration off exchange based PSTN to an IP future already commenced Long term goals PSTN/CCN • Through the Converged Communications Network (CCN) we will move to migration IP voice switching and enable new services like Voi
Slide 11: Maximising the value of our networks
Maximising the value of our networks The prize How Power and footprint savings PSTN retirement $30m • • Reduced support and backhaul costs per annum gross reduction in opex • 5 – 7 years Network • Launched 4.5G Leadership lowest cost per GB • First in NZ to deploy 200G OTN • Massive MIMO deployment
Slide 12: Key risks are being actively managed
Key risks are being actively managed Ageing PSTN and legacy data • Actively migrating and decommissioning PSTN and legacy technology data • Not over-investing in single generation of technology Speed of technology innovation • More agile delivery model • Track industry trends and adjust accordingly
Slide 13: New Zealand's best wireless and fibre data networks underpinning growth
New Zealand’s best wireless and fibre data networks underpinning growth in Spark HMB and Spark Digital Wireless network leadership Network resilience Technology evolution Maximising the value of our networks 13
Slide 14: Spark Platforms - Dr Claire Barber
SPARK PLATFORMS DR CLAIRE BARBER CDO SPARK PLATFORMS
Slide 15: Delivering Spark of the future
Delivering Spark of the future Simplifying our journeys and products +30NPS Lowest cost Outstanding Top 10 Growing New customer design approach customer experience operator global key telco segments Experiences are our products of the future +30NPS Journey aligned catalogue and systems Holding Outst
Slide 16: Over the last 4 years we've done a lot of heavy lifting
Over the last 4 years we’ve done a lot of heavy lifting From 3,400+ To 20 core systems legacy systems and 2-300 supporting apps Moving from a spaghetti of legacy systems to a simplified, future-fit service platform architecture 16
Slide 17: We're simplifying our products
We’re simplifying our products Company wide focus on portfolio simplification …delivering… Simpler offers and products Ease of choice for customers Streamlined processes Lower cost to train Digitally enabled journeys A pathway to radically …backed by deep rethink customer experience in customer expe
Slide 18: Designing around the customer, not the tech
Designing around the customer, not the tech A Customer Experience Framework to deliver a blueprint for reusable, consistent design Starting with the customer Focused on the experiences Bringing customer feedback in Constant validation Continual improvement and enhancement Systems Channel Delivery SE
Slide 19: Our new app was designed with customer involvement
Our new app was designed with customer involvement from the get-go 1,200 in-flight ideas from customers Customer ideas like in- app movie ticket purchases implemented .75m downloads since launch through ongoing agile development cycle 24% YoY increase in top-up revenue 19
Slide 20: Experiences are the "Product" of our future
Experiences are the “Product” of our future Our customers experience Spark through Journeys which are delivered through Channels – where Digital is our primary focus Achievements Focus areas • CX (Customer Experience) Framework • Digitisation programme taking a factory defined approach to systematic
Slide 21: This approach works. Xtra Email Help
This approach works. Xtra Email Help We took the worst of the worst -87 NPS Redesigned and tested with customers achieving a predictive +29 Launching in August NPS 21
Slide 22: And we're just getting started: Spark Experience Toolkit
And we’re just getting started: Then use again Spark Experience Toolkit (SET) and again Design once Spark Digital Help and again Reusable patterns = speed and again Reducing : Improving : • Call numbers and average • Time to market Xtra handle time • Cost to deliver by using Spark Labs patterns 22
Slide 23: Journey aligned catalogue
Journey aligned catalogue KPIs: capex, cost to serve, NPS, channel mix, cost by channel and interaction type, transaction volumes and response times, completion rates, exception handling 23
Slide 24: This approach works. Our fibre success.
This approach works. Our fibre success. An empowered, cross functional squad working on the customer journey end-to-end ▲20% growth month on month + NPS We’re handling a ..while delivering a …and calls per order are greater volume of fibre better customer dramatically reducing acquisitions… experien
Slide 25: As the technology curve accelerates exponentially, so too does our opportunity
As the technology curve accelerates exponentially, so too does our opportunity It’s going to be nothing like what we have seen before: • 30x uplift in next 3 years • 2000x uplift within 10 years 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 25
Slide 26: We're embracing data, automation, robotics and A.I.
We’re embracing data, automation, robotics and A.I. to deliver a radical step change Automate Using design thinking and new technology to change the way we work, lower cost to serve and improve experiences Machine Learning and Self- Healing DATA A Data Driven, Knowledge Based, AI Platform Monitor, P
Slide 27: This approach works. Tinkerbot.
This approach works. Tinkerbot. A first edition artificial intelligence robot trained by our customer-facing engineers, proactively looking for customers experiencing poor broadband performance and diagnosing and resolving their issue 40-60% + NPS/eNPS Reduction in call …and very satisfied handling
Slide 28: New ways of working for a different world
New ways of working for a different world Creating a strong culture and engaged teams Human- Agile Empowered Working on Embedded centered teams what matters customer design insights thinking 28
Slide 29: Empowering people to take real ownership
Empowering people to take real ownership… like creating their own induction and training… …and helping develop the tools they use in their jobs every day 29
Slide 30: The size of the prize
The size of the prize • Greater transparency of journey investment and Simplified New ways operational cost journeys A.I. and of • Lower support costs for reduced product sets and and robotics working portfolios products • Operational cost savings through decommissioning and migration off legacy pro
Slide 31: Key risks are being actively managed
Key risks are being actively managed Speed of technology change and • Use open source technology where available and the right fit availability of critical skills and • Leverage global partnerships capability Complexity of migration activity • We have deep experience in large scale, complex migratio
Slide 32: People - Joe McCollum
PEOPLE JOE McCOLLUM GROUP HR DIRECTOR
Slide 33: Strategic shift from Telco to Digital Services launched in 2013
Strategic shift from Telco to Digital Services launched in 2013 has driven positive change • Business portfolio reset from International Telco to NZ Digital Services Company, through effective divestment, investment and acquisition • Dominant old-world brand replaced by portfolio of vibrant new bran
Slide 34: You've seen where we intend to go
You’ve seen where we intend to go +30NPS Outstanding Top 10 Growing customer experience global key telco segments +30NPS Holding Outstanding market share Top-decile customer culture experience Lowest cost Top 10 Growing operator global telco ROI key segments 34
Slide 35: Requiring a world-class market-led company
Requiring a world-class market-led company Listen/ Respond Measure Make it Repeat/renew… engage response more efficient but faster Engage Adapt/agile Performance ”Owners Rejuvenate mindset” 35
Slide 36: In such a fast-changing world, you must give employees a voice
In such a fast-changing world, you must give employees a voice +24 91% 70% eNPS 1-1s 1-1 effectiveness 36
Slide 37: Our mix of employees is tech biased
Our mix of employees is tech biased Finance HR Other Marketing 3% 1% 1% 2% Sales 20% Technology 48% Service 25% 37
Slide 38: We are divided into teams who are mostly good but some need to improve
We are divided into teams who are mostly good but some need to improve HMB Digital Platforms Connect 38
Slide 39: We take leadership of teams seriously
We take leadership of teams seriously 1. Team Leadership 39
Slide 40: 700 leaders through our programme
700 leaders through our programme Survey 2 day 2nd Survey 2nd programme programme ~ 90 days 40
Slide 41: …not all have made it
…not all have made it Start 90 Days End Game ‘Great’ 5 25% 60% ‘Great’ 5 9% 20% 44 57% 52% Exit 40% 33 35% 18% 0% 22 0% 0% 3% ‘Bad’ 11 ‘Bad’ 1% 0% 0% 41
Slide 42: We need to embrace new ways of working
We need to embrace new ways of working Human-centered Agile Empowered Working on Embedded design thinking teams what matters customer insights 42
Slide 43: What does this mean for the future?
What does this mean for the future? Design thinking Agile Skills building 43
Slide 44: Bulk of development is 'on the job'
Bulk of development is ‘on the job’ (1,200 executives) 80 Stretch / 70 developmental jobs 60 Way jobs structured 50 Special projects effectiveness Company Formal training Speed of job moves 40 Formal Role models Traditional training 360-degree performance outside feedback Told strengths/weaknesses 3
Slide 45: There are 3 approaches to development
There are 3 approaches to development: and we back growth Even spread of $ Remedial Growth (invest to improve under- (invest to accelerate top per head performance) performers) Invest in your best people 45
Slide 46: Where are we on the journey?
Where are we on the journey? OK to Good aspiring to be World Class Significant upgrade of leaders • Strong performance cadence • Instilled an ‘owners’ mindset 2000 fewer people than before we started • Broader roles, better productivity More diverse group of capable people in bigger roles (earlier)
Slide 47: Development and succession pipeline
Development and succession pipeline Constantly lifting our Leadership game and raising the bar: • Management / leadership development for “grown ups” • Highly orchestrated Seamless Leadership Team changes from within: • and next level down Big focus on accelerating careers of younger / more diverse,
Slide 48: Valuing the business
Valuing the business “Book value” Intangible assets Leadership drives intangible assets - as a “predictor” of value: • Superior quality of leadership • World class people standards • Results oriented, performance culture 48
Slide 49: Disclaimer
Disclaimer This announcement may include forward-looking statements regarding future events and the future financial performance of Spark New Zealand. Such forward-looking statements are based on the beliefs of and assumptions made by management along with information currently available at the time