USD 140 MM in incremental revenues. 7k CC agents using the Pega Marketing application. 160 calls per minute

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3 Pega Oi A Success Story USD 140 MM in incremental revenues 7k CC agents using the Pega Marketing application 160 calls per minute 5MM in total sales and retentions in 1 year (*) Approximate value considering an exchange rate of R$

4 Brazilian Telco Market Context Brazilian Telco Market RGUs (1) Quantity % Paid TV Fixed Broadband Fixed Mobile (75% pre-paid) Continental country (200 million people, 65 million households (3) ) Highly competitive 4 major players Net Revenues (2) Local currency, bn +4% Vivo + GVT Amer. Móvel TIM Oi Sky Nextel Outros USD 46bn market with low growth Key growth opportunities are around Paid TV and broadband Sources: (1),(2) Teleco, (3) IBGE - PNAD

5 Oi Overview Oi has the largest telecom network in Brazil in a very complex environment Covering all 5,000+ Brazilian cities 17.5 million in the Residential segment 11.0 million Fixed lines 5.3 million Broadband 1.2 million Paid TV 51 million in the Mobility segment Strategic goals Main focus on an integrated domicile Increasing RGU per household Increasing Residential ARPU Increasing Customer loyalty Cost reduction with better OPEX control USD 9 billions annual net revenue Source: Oi investor relations. 4Q14. (*) Approximate value considering an exchange rate of R$

6 Challenges and Key Solution Drivers Area Main Challenges Key Solution Drivers Marketing Distribution of the customer base portfolio and pricing points Churn rates and ARPU retentions represent a big impact on the business profitability 1-to-1 marketing Segment-based pricing Agility and independency Channel Operations Fragmented IT Services Huge and complex operations with low process compliance 360 o view of the customer Unified Front-end Immediate adoption 6

7 Solution Overview 360 o view of the customer 1-to-1 marketing Agility and independency Segment-based pricing Unified Front-end Immediate adoption Who is the customer? What to offer? How much to charge? How to sell? Customer profile Adaptive Model ARPU Clustering UX Traffic / CDRs Offer logic Price positioning Dynamic scripts Customer current products Bundling Discounting rules Automated Order Entry Previous interactions Prioritized offers 7

8 System Unification and Simplification Customer identification Survey Next Best Action Actions Management Screens: Before 45 Systems: 12 STC & SISRAF TLV & EZCONET STC & MPN & OI ATENDE & PCP & EZCONET & CANAL CONTAX PCP & INTEGRA & TLV & EZCONET & DNA TLV & EZCONET After Screens: 8 Systems: Pega Marketing Pega Marketing Pega Marketing Pega Marketing Pega Marketing Number of screens Number of systems 8

9 Pega Marketing Integrated Front-end 9

10 Pega Marketing Integrated Front-end 10

11 Pega Marketing Integrated Front-end 11

12 Pega Marketing Integrated Front-end 12

13 Program Structure Setup team NBA Business Service Application Management Continuous NBA improvement Marketing Transformation Channel Transformation Technology Transformation Service Mgmt Incident Management Help Desk Level 2 User Support Service Operation Offer Performance Analysis Customer Value Analysis Offer and Business Logic Configuration Offer Strategy Management Agents Training & Certification Agents Performance Analysis Increased Agility, Performance Monitoring and Continuous Improvement Offer and price strategy updates within 4 hours Oi Marketing empowered to update sales and services scripts directly Ability to pilot strategy changes without channel and IT alignment Real time monitoring of operational and technical KPIs Daily, weekly and monthly reports with marketing, operational and tech KPIs Monthly releases to deploy continuous improvement 13

14 USD 140 MM Achieved in the 1 st Year of Operation Retention +6,3% -10,8% -29,7% %Retained Revenues Cancellation rate Avg Discount (%) Service-to-Sale +55,0% +38,0% +12,3% % Incremental Revenues Conversion rate Delta Avg Ticket (R$) (*) Approximate value considering an exchange rate of R$

15 Roadmap Overview Phase RETENTION 6m 4m DOWNGRADE 5m 4m Running 2 SERVICE TO SALE (parcial) OUTBOUND RETENTION REVERSAL SERVICE TO SALE (100%) 3m 1m 6m 3 PROACTIVE RETENTION COLLECTION 3m 3m Under development 4 TV TRIPLE PLAY 1m 3m MOBILE 3m Future expansions 5 TELESALES QUAD PLAY 1m 1m SMB 1m Setup Rollout Run - OTHER CHANNELS 1m OPERATION OPERATION 15

16 Lessons Learned Start Simple The end state can be as sophisticated as you want, but start simple to get value quickly The solution is easy to change so implement, learn and then improve Be aware of complex strategies and analysis paralysis Focus on parameterization enabling agility and rapid delivery of change Focus on agents needs Walk in their shoes to understand agents requirements and simplification opportunities Use UX to expand agents ability to sell Understand the Data Be aware of data quality and availability to enhance NBA recommendations Focus on implementing, testing and business simulation 16