Non Stop Music Non Stop Revenues Dan BOABES General Manager Simplus - Romania

Who we are? Simplus - part of the ParlaTel Group, dedicated to innovative mobile applications ParlaTel is a Holding Group of companies, one of the main alternative telecom operators in Romania ParlaTel lines of business: -fixed telephony -ISP -Value Added Services (Premium SMS, Premium IVR)

About Simplus Simplus – mass mediae - revenue share collaborations Contracts with 8 national TV stations OTV

Strategy - I Focuse to specialised TV channels: Music channel – no. 1 Music channel – no. 2 Sports channel – no. 1 News Channel – no. 1

Strategy - II Continuous innovation and new services: Music dedications – Dec 02 SMS chat – Jan 03 SMS voting – Feb 03 Premium IVR – March 03 Ring-tones – Jun 03 SMS News – Jul 03 M-payment – Aug 03 TV Chat – Sep 03 Integrated SMS/IVR app – Dec 03 SMS Games – Feb 04

Romanian music channels AtomicEtno MTV Romania Description 98% Romanian disco music 100% Romanian etno/folk music 60% Foreign music Average rating National coverage %56.3%43.5% Notoriety %65.9%54.8% Target audience % music/shows (estimated) 90%80% Notes: 1 – One rating point = 1.2 million viewers; prime time, Dec 03 2 – According to IMAS study – March – May 2004

Killer applications Music dedications Hangman M-payment TV SMS Chat “Killed” applications One2One SMS chat Ring-tones Integrated IVR/SMS applications

Killer applications Music dedications Description: -SMS messages are received by Simplus servers from the mobile operators -Messages are filtered – automatic (bad words list) and manual (screening by human agents) -Messages are delivered to the broadcast equipment -Text is displayed as a crawling text -Non-stop service

Reasons for success Music dedications -Non-stop service -Easy to use and understand -Occasions throughout the year (Christmas, Easter, St Valentine’s Day, Birthdays etc) -Almost no human intervention -People instantly receives nationwide exposure (“egocentric”)

Killer applications Hangman Description: -The user sends a keyword (“Hangman” –eg.) to a PSMS short code - The system delivers the word to be discovered (“H - N N”) - The user sends letters and receives a number of points for each discovered word Video

Reasons for success Hangman - Non-stop service -Easy to use and understand – people are already accommodated with the game -No human intervention -Players receive their rank after each play (by SMS and website) -Weekly prizes for top players -Low cost/message, high number of repetitive plays -50% of traffic is made close to the deadline (last 24 hours) as players compete for top positions -Fair play system (players have all info, no cheats or tricks)

Killer applications M-payment Description: -The user sends a a high value SMS (1$ - 3$ / SMS) with a code associated with the ordered services - The system delivers a code for payment confirmation - The user uses the purchased service: dial-up access, website access, personalized horoscope, personals etc. Video

Reasons for success M-payment - Non-stop service, comfortable use - Easy to use - No human intervention, completely automatic - Nationwide delivery (Internet dial-up throughout the country etc) - Fair pricing - Easy to adapt data-mining procedures (tracking users purchasing behaviors, monitoring usage a.s.o) - Exploit “other party pays” concept

Killer applications TV SMS Chat Description: -The user sends a a low value SMS to a short code - The message is displayed in a chat window on TV during night hours - A host proposes discussion subject and manages the show content -Messages are filtered for badwords and phone numbers

Reasons for success TV SMS chat - Easy to use - A well known working principle (users are already accommodated with the web chat) - Host can keep alive and encourage conversations - Constant traffic as chatter community is built - Fair pricing (low cost) - Real time (caution: sensitive to technical flaws on the communication chain)

“Killed” applications One2One SMS chat Customer perceives no benefit Other alternative methods of communications at lower cost Ring-tones Difficult to use (codes usage, various phone types etc.) Integrated IVR/SMS applications Too complex procedure

Success pattern - Non-stop service - Easy to use - Completely automatic (“humans bring errors”) - Fair mechanism (users feel served, not cheated) - Instant usage - Adequate awarding to foster competition (prizes)

About failures - There is no universal success recipe - Cultural adaptations needed (the success of a certain could vary widely from country to country) - Simple mechanism, use simple advertising messages - “Try and error” – unavoidable; previous experience counts - Some services have a short lifetime (e.g.: sms-games) of several months compared with music dedication (several years)