Comptel

Introduction:
Comptel is a software company specialized in telecommunications that enables operators to control the
supply and demand of digital services. Comptel’s software combines the physical and virtual
communications networks of operators with their client systems. The company develops, sells and
delivers solutions and services globally. Comptel’s revenue in 2015 was 98 million euros and operating
profit 8.5 million euros. The company employs 750 people in 20 countries and it has serviced almost 300
telecommunications operators in 90 countries during its history.

The company has two business units as well as a new product area developed by an internal start-up.

The Intelligent Data unit develops software that collects and analyzes information from the operator’s
network.

The Service Orchestration unit operates within the Fulfillment product area automating service delivery
processes for operators.

Comptel’s business model is based on software licensing, integration projects and maintenance, which
encompasses support services, software maintenance and continuous Managed Services service
agreements. The company’s digital sales channel solution FWD, which is developed by the company’s
internal start-up, is based on a SaaS business model.

NXT unit and the FWD product Comptel’s organization also includes the NXT unit, which represents
the company’s internal start-up and it aims to develop new cloud-based services. The unit’s first
commercial product is FWD, the digital sales channel solution, which was launched at the end of 2015
and it was initially utilized in Finland by DNA. With the help of FWD, pre-paid subscription users can
purchase data from their operator with time-based pricing in small batches directly from their
smartphones. This simple (but technologically complex) solution solves one of the most central issues
for pre-paid operators in developing countries i.e. data monetization. The challenge in developing
countries is unclear data pricing models that are based on the amount of data traffic as well as data
subscription prices that are out of reach for many people, which has made it challenging for operators to
make money on data traffic. By selling mobile data in small junks on timebased micropayments, FWD
brings data subscriptions within reach of everyone. For operators, the refined approach of FWD stems
from them being able to generate new revenue by practically hiking prices. Comptel itself operates the
FWD service for example in a public cloud, but operators offer it to consumers as their own white label
solution. Consumers must therefore download the application on to their phones or it must be offered
readily installed on their phones in order use the service. Comptel invested roughly 3 million euros into
this unit last year and this unit does not yet generate meaningful revenue for the company.

Business model: In the FWD product, Comptel’s business model is an interesting opening towards a
SaaS based business model. The products revenue is mostly based on so-called channel commissions (or
revenue share), from which Comptel gets a revenue share based on how much sales the product
generates for the operator. This makes the solution highly scalable for Comptel. FWD is an entirely
cloud-based service.

No competition for FWD yet

In our understanding, Comptel’s new FWD solution is unique in its own class so far in the market.
According to our understanding, there have however been numerous attempts to build similar software
but due to the immense complexity of the technology and the billing system, no one has been successful
in accomplishing this. Internally developed self-care applications by operators may be able to offer a
similar kind of service to end-users, but their development is expensive and the customer experience is
usually weak. Similar solutions to FWD however are bound to be launched by competitors at some
point, which is why it’s important for Comptel to grab as much market share as quickly as possible.

FWD: concept expandable to many areas

Comptel invested roughly 3 MEUR into their FWD solution last year and the company brought the
product to the market at the end of the year. The product’s developmental challenges have among
other things included a wide range of different Android hardware. The application has recently become
available for the iPhone as well. We estimate that the company will continue significant product
development investments in FWD based on the feedback available from the market. Currently the
product has been developed for the sale of pre-paid data but we see numerous potential possibilities for
expansion for example in sponsored data, post-paid data, roaming, and the sale of different types of
digital services through FWD. We estimate that Comptel will also invest in these areas in the future even
though the focus is currently on ramping up sales for their pre-paid solution.

FWD forecast: potential jackpot

Revenue is largely based on revenue share channel commissions. We assume that fixed maintenance
and start-up fees don’t create significant revenue.

FWD achieves a level of 9 million users next year. This requires the product to succeed for example in
one large operator in a developing country. After this we estimate the user base to grow to a 90 million
user level in 2020.

The ARPU through FWD is around 1 EUR/month (globally). For reference, this means a market where
the average monthly ARPU is 4-5 dollars with data’s share of ARPU being 15-30 %. Nigeria and Indonesia
are examples of these type of markets.

The channel commission level at the beginning is 5.5 % and through new competition it decreases to 3.5
% in 2020. As a reference for the channel commission level we use an 8-10 % level, which is a typical
cost for an operator for traditional brickand-mortar sales channel. FWD has to be able to offer a clear
discount here in order for the solution to be lucrative for operators. In our forecast 1.1 billion in revenue
goes through FWD in 2020 out of which Comptel earns 38 MEUR.

The product is completely scalable. The cloud capacity required by the growing user base requires only
marginal additional costs. The fixed cost structure will however increase through investments in product
development, sales and marketing. As a result, FWD will reach operating profit of even over 50 % as the
user base grows to 40 million users according to our estimate.

FWD forecast
2015 2016 2017 2018 2019 2020
Users (in millions) 1 9 20 45 90
ARPU, EUR 12.0 12.0 12.0 12.0 12.0
Sales through FWD, MEUR 11 108 240 540 1080 Channel
commission 5.5 % 5.0 % 4.5 % 4.0 % 3.5 %
FWD revenue, MEUR 0.6 5.4 10.8 21.6 37.8 Costs
-3.0 -3.6 -5.0 -7.1 -9.9 -13.8 EBIT -3.0
0.4 3.7 11.7 24.0 EBIT-% -506 % 7 % 35
% 54 % 63 %

Company Valuation multiples

Valuation level 2015 2016e 2017e 2018e
Share price 1.83 1.47 1.47 1.47
Market cap 201 161 161 161
Enterprise value 204 156 153 152

OTHER BUSINESS UNITS:

Intelligent Data unit:
The core competence of Comptel’s Intelligent Data unit is the handling and processing of vast amounts
of data in operator networks. This unit comprises the company’s EventLink technology platform, which
includes several readily integrated software products (SoftBlade), such as mediation and analytics
products. The unit’s revenue in 2015 was 42.5 MEUR and its operating profit margin 13.7 %.

Mediation software has been one of Comptel’s core businesses since the beginning and its share of
Intelligent Data’s revenue is still significant according to our understanding. Mediation software collects
information moving in physical networks from hundreds of different interfaces. This information is
mediated or modified into a form where it can be input into the operator billing system. In practice,
thanks to this software the operator correctly bills clients for its service use. The demand for mediation
software is supported by the need for operators to collect information on a growing number of variables
(such as Company description and business model Comptel is a software company specialized in
telecommunications, that enables operators to control the supply and demand of digital services.
Comptel’s software combines the physical and virtual communications networks of operators with their
client systems. The company develops, sells and delivers solutions and services globally. Comptel’s
revenue in 2015 was 98 million euros and operating profit 8.5 million euros. The company employs 750
people in 20 countries and it has serviced almost 300 telecommunications operators in 90 countries
during its history. The company has two business units as well as a new product area developed by an
internal start-up. The Intelligent Data unit develops software that collects and analyzes information from
the operator’s network. The Service Orchestration unit operates within the Fulfillment product area
automating service delivery processes for operators. Comptel’s business model is based on software
licensing, integration projects and maintenance, which encompasses support services, software
maintenance and continuous Managed Services service agreements. The company’s digital sales channel
solution FWD, which is developed by the company’s internal start-up, is based on a SaaS business
model. Revenue structure 2015 Source: Comptel 7 information on location, users, information collected
by sensors, communication between machines (M2M) etc.) through the growing amount of devices
connecting to networks. In traditional billing information mediation software, the market’s growth
outlook is modest as operators have already made investments in these systems.

Policy Control software keeps track of the rules in the operator’s network. It is for instance
responsible for data limitations taking effect once the maximum has been reached. Comptel is a
challenger in this product area with its new Monetizer product that launched in 2015. The analytics
integrated with Policy Control can predict the behavior of operator customers and then offer the best
service solution. The market for Policy Contol software is growing rapidly.

Analytics software is sold by the company primarily as an integrated part of other solutions. With the
help of analytics, information collected by mediation software can be changed into smart automated
actions.

Service Orchestration unit:

Service Orchestration solutions are responsible for CSP’s efficient resource allocation and automating
service delivery processes. These solutions make sure that the ordered service is activated automatically
and promptly in the network. The demand for these solutions is driven by the fact that traditionally the
service delivery process of operators is associated with a lot of back-office work stages that can be
automated with software. The unit’s revenue in 2015 was 55.3 MEUR and operating profit margin 9.3 %.

Fullfilment software, also known as a delivery process solution, practically encompasses the whole
Service Orchestration product package. Comptel calls their Fulfillment product FlowOne. When a
customer places an order, this solution checks which resources are available in the network and
activates the ordered services. These are large projects in size and the market demand for Fulfillment
solutions is growing rapidly. The highest demand for these solutions focuses primarily on managing the
complexity of fixed networks.
Provisioning is another historical strength of Comptel and as a product it has historically been the
company’s bread and butter. In practice, this software provisions SIM-cards meaning it activates orders
into the communications network. Inventory on the other hand represents the operator’s information
storage about what physical and logical network elements the operator has, i.e. what type of
connections and resources are available in the operator’s network. Comptel’s Inventory systems are the
legacy of the purchase of EDB Telecom’s information network system business.

LotusFlare

We are making mobile internet more affordable through partnerships with operators and mobile apps.
We give users full control of their data usage, make it easier to engage with mobile content, and allow
users to customize their experience.

AVAILABILITY

We are making mobile internet more available through innovative access technology, bringing high-
speed connectivity to rural areas across the world. This will provide true universal access.

PRODUCTS

DYNAMIC RATING PLATFORM

This platform is used by Mobile Operators and MVNOs to bypass traditional billing system and create
flexible, app based data plans on the fly.

DIGITAL SERVICES PLATFORM

This platform is used by Content Providers, OTTs, Mobile Operators and MVNOs to design, develop and
launch next generation digital experience. We provide a fully hosted solution.

GROWTH PLATFORM

This platform is used by Content Providers, OTTs, Mobile Operators and MVNOs to drive user growth
(new user acquisition and engagement) and monetization on their mobile properties.

DATAEYE

DataEye, Lotus Flare's Android app, saves its users mobile data and battery life by letting them manage
their mobile data usage. App-based data control means that there is no loss of data due to unwanted
background traffic. Users can also get access to more content for the same cost.
HOW CAN LOTUSFLAREDRIVE GROWTH

ENGAGEMENT FOR APPS

LotusFlare’s platform dynamically rates mobile data, attracting new users and increasing engagement,
all while significantly improving user experience. 

CONSUMERS FOR OPERATORS

LotusFlare drives more mobile data revenue and subscribers through dynamic rating, top-ups, data up-
selling, and more.

CONNECTIVITY FOR USERS

LotusFlare helps people enjoy content and use mobile apps freely without having to worry about the
cost of mobile data.

Revenue: less than 1 million dollar(https://www.owler.com/iaApp/12057898/lotusflare-company-

profile )

Data eye app have 1 million downloads in android

Verizon PopData: time-based mobile data for

just a few cents per GB
Verizon has introduced a new offer called PopData: paying for a short period of intensive LTE use at
low nominal rates (USD 2 for 30 minutes, USD 3 for an hour). While the commercial success will
likely be limited, the concept is interesting. Verizon targets the service at customers with limited data
allowances who may sometimes want to use a large amount of data, without having to top up for
another month.

Telkom South Africa

Time Based Data Bundles

Buy yourself some time with Telkom’s time-based internet bundles. You choose how much time you
need online – surf the net for an hour, a day or a weekend!
A Time Based internet bundle is an internet bundle that lets you connect and surf the internet for a
particular amount of time.
 Hourly and Daily Bundle Features include
 Anytime data 
 Time Based bundles allows you to connect and surf the internet for a specific time. 
 National coverage giving access to both Telkom Mobile 3G network and MTN 3G roaming network.
 Hourly and Daily internet bundles are only available to existing and new prepaid customers.

Hourly Data Bundle

 75 MB Anytime data.
 Valid for one hour after activation

Daily Data Bundle

 150 MB Anytime data.

 Valid for 24 hours after activation depending on the time of purchase

Weekend Bundle Features include

Weekend Data Bundles

 500 MB or 1 GB Anytime data
 National coverage giving access to both Telkom Mobile 3G network and MTN 3G roaming network
 Time Based bundles allows you to connect and surf the internet for a specific time. 
 Valid from Midnight Friday to Midnight Sunday 
 Available for purchase by existing and new Prepaid, Top Up and Postpaid customers

Openwave Mobility
Openwave Mobility is a leading software innovator that provides mobile carriers around the world with
video optimization and data plan management solutions that create new revenue opportunities and
dramatically reduce costs.

Openwave Mobility’s Mobile Data Monetization solution gives subscribers the ability to control
what they buy, when they buy it, and in terms they can understand. Equally it gives operators
innovative new ways to engage with their subscribers and to monetize data leading to incremental
revenues and reduced churn. The solution provides new application-based price-plans such as
 “video as a service” and allows operators to notify its users of time critical events and notifications,
empowering them to make the decision to purchase which ultimately leads to increased adoption
of new services by as much as 4X and proven churn reduction.

With Openwave Mobility’s Mobile Data Monetization solutions operators around the world are
increasing mobile data revenues and customer satisfaction by:

 Offering new service oriented price plans. The premium service-based mobile data charging
solutions can be rapidly deployed, allowing the user to purchase inline at point of interest, or on
demand.
 Targeting promotions. Carefully selected products and services based on actual subscriber browsing
habits.
 Engaging customers in real-time to drive upsells, prevent bill shock and enhance loyalty.
 Empowering subscribers to take control of their data spend through a rich self-care interface.

Pricing Applications, Driving Revenues, Reducing Churn

Video Pass
Video content continues to be the greatest contributor to growth in mobile data usage. Currently data
plans have MB or GB based caps. Usually subscribers cannot relate MBs/GBs to the minutes a
particular video will consume. This inability to comprehend the amount of data used per video and its
impact on subscribers’ data plans results in lost data usage and lost opportunity.

PPI Pricing’s Video Pass allows video to be recognized and charged as a separate data service.
Subscribers are provided with options that can be easily understood:

 Charge based on time rather than data consumed

 Allow to upgrade or recharge once the existing service is consumed

Video Pass enables the operator to seamlessly roll out video as a premium service offering. The user
can subsequently manage their video plan through a service self-care function. Video Pass has helped
operators to realize an increase in revenue and heighten their subscriber loyalty.

Roaming Pass
We have all come across the “bill-shock” stories. Unfortunately this has led to a general “fear” of
using data whilst abroad and many consumers simply switch off data services when roaming.
 PPI Pricing’s Roaming Pass enables the operator to seamlessly roll out data roaming as a premium
service to a target set of roaming consumers. Upon real-time detection the roaming consumer is
immediately offered a number of simple service oriented roaming plan options. For example:

 Roaming web only pass for 24 hours or a pass which allows web and video use only, or
 Opt in to optimization services - compresses all content to ensure least consumption of data

Tether Pass
Many devices today allow tethering or the setting up of a local Wi-Fi hotspot. For some operators
this can prove to be a problem as the target device is consuming much more data than originally
envisaged and can lead to significant erosion of profit margins.

With PPI Pricing Tether Pass the operator can detect tethering and immediately offer the subscriber
the ability to purchase a temporary or recurring tethering plan as an add-on to their existing plan. For
example a tethering pass can be:

 Offered as a Day Pass or a Month Pass, or

 Added to the consumer’s existing plan for a fixed monthly fee

Day Pass
There are many “non-data” users who nevertheless would use data services occasionally on an as-
needs basis, as well as others who use data services in a specific way eg: to access Facebook or
email. Lastly, there are those who do not use data services at all and need encouragement to do so.

PPI Pricing’s Day Pass enables the operator to offer these casual data users a choice of easy to
understand casual plans aligned with their online activity. For example:

 A 24-hour pass for general access

 A week pass for extended use
 A pass for access to specific set of sites such as social media, news, videos, music

The key is there is no upfront long term initial commitment. Equally the operator now can on-board a
new set of data users who previously were not actively using their device for mobile data services.

Shared Plan
It may be desirable and more cost effective for an individual with several devices, a family, or a
small enterprise to consolidate his/her data usage into a single plan.

PPI Pricing’s Shared Plan:

 Allows sharing of a single data allowance amongst group of members or devices
 All group members have visibility of the remaining shared plan allowance through self-care
 All members are notified by SMS when the plan data allowance is running low or has run out
 The group owner, the billed party, has the authority to top up the account through self-care

Openwave Mobility delivers over 40 billion transactions daily and over half a billion
subscribers worldwide use data services powered by its solutions. Openwave Mobility's
global customer base consists of industry leading mobile operators including AT&T, Bell
Mobility, Bouygues, Deutsche Telekom, Du, Etisalat, KDDI, Qtel, Sprint, Taiwan Mobile,
Telefonica Moviles, Telstra, Telus, T-Mobile, Virgin Mobile, Vodacom and Vodafone.

REVENUE : $50+ million in annual revenue (https://www.linkedin.com/in/johnpgiere )