There are situations where everyone is wanting connectivity, but they don’t necessarily want the technician inside their homes. So, how does all this remote, installation and troubleshooting work? And the stores are closed like other industries, or with reduced capacity. There are several challenges. The supply chain, phones and boxes that come from China. So, there are many operational challenges for them too, and at the same time, they have their role in helping the community. So, I would say, a good time.

Denise:

André, thanks again for being here with us today. From a data point of view, what is being used and shared in this dynamic of collaboration between companies?

André:

Good morning everyone, thanks for the invitation. I wanted to get a comic strip from Armandinho. It is old, but it is very current. Where the adult asks him: Do you want to transform the world alone? And he says: we are not alone; we are only separated. And we need to get together now.

I think the dynamic is that, we thought we were alone, the isolation gives us the feeling that we are alone, but deep down what we want most is to be together every time to transform this thing. And the data is exactly that example. Claro’s data alone will not transform that. I need to gather the data. And our first step is, we need to gather the data, all the operators, in order to have a complete view of what happens with the country.

The second thing, is to generate efficiency. Because I had data scientists in every company, who were developing the use case. And now I can complement and generate several use cases at the same time. This is the second point.

And the third is that we are betting on getting applications that are fast to develop, that are easy to make decisions, which in this case are applications of isolation, agglomeration, and applications for the definition of risk cases. It is worth mentioning that these applications use anonymized data, grouped data. We are not talking at any time about looking at any individual. Being very didactic, it is almost an accountant.

Every day I get there and count how many people go through that ERB (Base Transceiver Stations). So, there are more people in this ERB than in the other, I say: this place is subject to having more people grouped together, we need to make a decision.

Denise:

Marina, we are going to talk a lot about this importance of applying advanced analytics. Could you please explain to us what this means and what is the value in the current context?

Marina:

I would say that in a volatile context, the value of insight is greater than in a stable context. Where people can be part of a recognition, they can make decisions based on their

experience. In this context, data analytics are helping executives a lot, because they have to make decisions with many factors that are changing at the same time.

On the one hand there is the consumer who is changing the standards, it is a more volatile consumer. We are seeing, experiencing different things, perhaps forced, because the supplier itself is not delivering, or perhaps because it has different functions or objectives, but mainly a different consumer.

Then you have a side of how the analytics help, internal and external joining in order to know more. As I apply tests of new things, new products and services that may be more similar.

At the same time, it has a demand forecast theme. As that analytics, even in this context, helps you to innovate and be a 100% focused demand. Or be a demand that may be 80, 70, or even 50%, but it still helps.

It has the theme of how I help manage my workforce, trackability. Forecasts, factors of things that are happening. It has the assortment, for example, passing in other industries. In the equation we see a supermarket that has categories that are currently “boosting” and other categories that nobody is concerned with buying. How do I use all the data to try to adapt my operations and my delivery to the client, in a context knowing that it is very volatile?

Denise:

André, speaking specifically about Claro, what is the role of data and analytics in the company’s reaction to the crisis?

André:

We divided this into 3 phases. The first, which we call emergency. That is what we are doing to help contain the crisis, which is in fact a collaborative work with other industries supporting governments and public entities to help solve the problem, punctual. We had a lot of work, which was putting together a great team. Data scientists to develop the applications.

We have the second phase, which we are experiencing now, which is the change in consumer behavior. This has given very clear signs of other types of behavior. As we have already said, network consumption increasing dramatically, new geographical distributions of people moving through different locations. We need to understand how this is happening. We have a big factor that is the increase in consumption of Pay TV, which has grown radically to people inside their homes. How do you understand this new behavior? There are things like prepaid recharge that people outside their homes, people are used to going to their recharge points, to recharge, and today, they’re is not on the street to recharge. How do we change this new behavior?

I think that the second phase is to solve the very specific things that we need to solve, and the third, where I think the data will be even more fundamental, is when this new behavior is understood, we create a new company. As we help the data to create a new company to meet this “new world” that everyone is saying will happen from now on.

Denise:

It is a transformative experience for everyone. But André, how did you need to adapt and organize the data area in this context? What has changed in practice?

André:

What changed in practice, which I think was cool, was the purpose. When we started with this “let’s save life, let’s help” thing, it was impressive the mobilization of data scientists to stay up day and night, Saturday and Sunday to try to find the solution and develop their applications on a daily basis. This is in fact something that we are seeing, and people’s behavior is changing radically, in terms of wanting to collaborate.

And from now on, we’re seeing people doing what they can, working twice as hard as they used to. During the day I have to resolve the cause, and at night the company problem. So, if I am going to be honest, there is no specific organizational model. It’s sweat. Sweat, dedication and science. I think we are combining these things and moving forward.

Márcio:

We saw a joke circulating on the internet, of those who had accelerated the digital transformation of their company and the alternative was Covid-19. And I think we are living is really an implementation of ” agile “, the “agile” way to work at scale. Everything André said here and Mariana, the purpose to move and engage people, an extremely volatile environment that you have to be aware of everything that is happening outside and any sign that indicates consumer behavior and perception, helps take decision. You have to connect the whole company together, because the supply chain planning cycles of demand with a high degree of uncertainty are extremely complex and we have to be communicating all the time, and I think this has really helped a company the size of Claro to have the agility of a startup. Because all areas have to be connected, talking, so that we can react to all the movements that are happening, which are very dramatic, very strong and very fast.

Denise:

Now Márcio, returning to the question of the client’s offer. What were the main actions taken to help customers stay connected?

Márcio:

Separating also into phases, we lived a first phase when it all started, where our main concern was to connect people with reliable sources of information. Make them aware of what was happening, and the need for social isolation, which until now is the remedy we have against this crisis, and against the impacts it brings. And for that, we work to make news channels available, both on pay TV and even by streaming, universally and free of charge. We also place our properties through access to subsidized mobile network, access to subsidized Wi-

Fi network, conditioned to people watching videos from the Ministry of Health and SUS (Unique Health Care System). So, the idea was to always throw official information and make people aware that they needed to go home.

The second phase, once people are at home, how do we make them better there. And then there was a negotiation with the Pay TV channels to maximize entertainment options. We also enhance all connections, residential and mobile, so that people have connectivity. We are permanently dealing with this problem of increasing demand on networks. For you to have an idea, the moment immediately after the beginning of the crisis, when everyone went home, the growth in trafficking is equivalent to a week to what we had seen in a year.

So, there is dramatic growth and the situation is not stabilized, and we are just not suffering the impacts of it all because there are a lot of people from networks and suppliers, etc. working to expand the capacity of the networks permanently. So, I think that was the second wave. And the third wave was joining forces with everyone that we could to really help at the moment when we clearly see a part of the population that lives in the informal economy with great difficulty, and small and medium-sized companies and entrepreneurs that also do not have many cash problems with your closed business not working, also needing help . And there, there are a number of initiatives being made to try to help.

Denise:

But Márcio, how are you managing to maintain operations, and what changes did you have to make from the company’s internal point of view?

Márcio:

We had to put in, for example, mobilization of the call center, work from home, and we have a lot of service. There is the entire demobilization process of the on-site points of sale to go to remote and digital. So, it is a really dramatic change to take care of the safety of our technicians who have to continue operating on the street, both to take care of the network, and to install new services or maintenance when the person has no signal. So, all of this required a series of very agile and very intense changes in the way the company operates.

Denise:

Marina, observing experiences from other countries, what should be the main elements of the new standard in Telecommunications?

Marina:

Look, we are certainly seeing a more digital consumer. A consumer who wants more flexibility, because the situation of availability, the recipient will not necessarily have access. So, the possibility of flexibility in choosing a package, upgrading, downgrading, much more easily.

We are seeing the b2b part deeply affected by remote work. Everyone is hoping that some of the good practices they are seeing now, remote work, many meetings are clearly not needed in person. We are learning this.

How the new Telecoms provide packages that have connectivity and security at the same time. Many smaller companies, their systems are not ready to handle security. So, remote work connectivity packages for all businesses. A much more digital and touchless operating model theme. So, how to make the operations center without human people, digital channels, as we said. The facilities part, even more remote.

I think it also has a theme censoring, the famous IoT with themes trackability, sensing, a probable the new wave. And the topic of telemedicine, which is becoming more relevant every day. We are seeing China and Korea using robots and doing remote service. It has the theme of how to think about the network itself, as Márcio said. People are creating different patterns. The use is also much more residential at the moment, because it is working at home against the office. So, rethink how to do network planning in a situation where money is not going to be left over.

There are many challenges at the same time, many people want a service, but they will not have the money to pay. So, the challenge for the market will be to be more open to M&A and ecosystem creation. It is a moment of opportunity for new Telecoms.

Denise:

This subject of remote meetings, has a joke that says that meetings could be replaced by email. Email may be an exaggeration, but a lot of meetings can be replaced by remote, this is a truth that is becoming increasingly clear to us.

Márcio, what changes in consumer behavior do you think will be more structural, even in the post – crisis? And how is Claro doing to prepare for this new normal?

Márcio:

I think we will gradually generate, and we will need to generate, as André said, this awareness of “together”. And that goes through collective consciousness. You can’t get food off the shelf because I’m stocking it at home. You can’t store hand sanitizer because I took everything for myself, because if I took everything for myself and the person next to me doesn’t have it, they will get the virus.

I think it even goes through conscious use of these broadband networks if we understand that everyone is in dire need of broadband right now. There is a time when you can rationalize it. Watching traditional TV costs nothing to the broadband network, watching streaming charges the broadband network. If I have a choice between watching a traditional TV channel or streaming, I’m helping by choosing the TV. If I can make a voice call instead of a video call, because there has been a lot of video calling, as we are doing here now, a voice call relieves the network too. Because voice is much easier to handle.

So, I think that what I see is, first we will need a collective awareness of new values or to recover values of collaboration and do things in a way that reflects the good of society as a whole, and all this gradually happens. which will reflect even in the ways of consuming. More

conscious consumption, more concerned with the environment, that we have started to read that is happening in countries that are already a cycle ahead.

I think we had a great privilege in this crisis that is drastic and global, to have some history, because it started in different geographies with time ahead of ours. And we have been seeing and learning from things that are happening there and that we necessarily have to adapt, because Brazil has a scale and complexity that is different and its own, but it has a lot of learning and signs that we can replicate as well.

Denise:

It is an unprecedented humanitarian crisis. From the point of social responsibility, what has Claro been doing?

Márcio:

We have the Instituto Claro which is brilliantly led by Dani Gomiero, in our case. And Instituto Claro is connected to a series of UNICEF assistance entities, which is one of them, CUFA, Central Única das Favelas, too. A and we have been looking for voluntary mobilizations from our employees, including the campaigns that we will do for our clients, directing for donations to these two entities. Together with the staff of Claro Empresas, Roberto, Douglas, we have launched initiatives aimed at enhancing cash generation for small and medium businesses. A small example is, I buy a paid service voucher now, help the company survive and redeem this service up front when we get back to normal. Because and if we don’t find initiatives like this, the big chance is when we leave and return to normal, this small neighborhood business is not there, because they are very dependent on the short-term cash to generate their business.

So, I think that these are great initiatives, obviously they were working with the government as well. Connect all basic health units, connect these field hospitals that are being built, assist state governments, especially in terms of distance learning to keep children studying in the public-school system.

A new project was recently regulated and we are also taking initiatives with major entities in the health sector. So there are a number of things that we are working on so that the maximum normality of the society’s functioning is really established, and as Marina said, with the awareness that there is no new money, there is a redirection of money and we need to optimize these resources to really help those who need it and make the management get out of this crisis right away with people staying at home and isolating themselves from this virus.

Denise:

Yes. We now have questions from the audience, a question for André. Is there any initiative on the part of operators to support the government in sharing users’ location for monitoring infected people, similar to what China did with WeChat?

André:

Today there are agreements with governments to share data through applications. They are all grouped data. Always anonymous. And this first initiative aims, as I said, the agglomeration indicator, isolation indicators and the risk area indicator. There is still no defined action with respect to individual monitoring of any person.

Denise:

Just a reminder, whoever wants to send questions has to send it to the Q&A profile. Do not sending directly to me. Send it there and then they will send it to me.

A question for you Márcio. Do you believe that what is happening can accelerate the deployment of IoT and 5G in Brazil? Is it necessary to face a new profile of consumption and behavior?

Márcio:

I think that the scenario is still not clear for us to talk about new investments. 5G is a technology that will require a lot of investment. And then I think we have to see how the financial health of businesses and carriers will be. Because as André said, we are being very impacted. Both prepaid business for recharges, as well as all in-person channels and closed stores. Imagine that you have thousands of stores closed and all costs associated with them still in operation. You have the whole question of collection, because we are providing services, they are being extremely used, but we know that there is also a question of income flow in the informal economy of small and medium enterprises, which can generate a chain relationship that is bad for the country as a whole, and as we are a large scale company connected with millions of customers, the entire value chain will suffer if we suffer.

All of this, we are very concerned, and we are still not clear about the real impacts of this entire crisis, and this is what will define the question of investment in new technologies and evolution. Obviously, we want to do all this with the maximum possible speed, it will help a lot. One of the things that has helped in developed countries, is the number of sensors that you have on the street. To monitor this mobility, as André said. So, you have cameras, there are a number of devices that here in Brazil we don’t have yet. There is a lot of room for the country to evolve in infrastructure, in technology, in advanced services, but first we will have to solve the basic equation that is to keep our population well fed with security. All the basic issues of society with the added that now everyone is at home, remote, and in need of connectivity.

Denise:

There’s another question here for you, Márcio. What was different or innovative about customer service?

Márcio:

We had several initiatives that were very accelerated. One of them is WhatsApp service. Today, practically all the services and assistance that we need to do to the customer, both in the residential world and in the mobile world, we are managing to do it through a WhatsApp application. We have an application called DialMyApp, in which when you call the call center,

as the call center was very impacted on the transition process of people leaving their workplace, which are the Call Centers, to their homes, this is a movement, it didn’t happen overnight. The people have the DialMyApp when you call the IVR call center, by the IVR, it directs you to have the service by the application. And this has helped to radically accelerate people to use and download and use these self – service digital apps as well.

And other than that, all the e-commerce sales and remote service via digital platforms, digital recharges, digital payment, digital invoice sending, all of which has accelerated a lot and was quite necessary for that moment.

Denise:

Marina, for companies that are starting to apply analytics, in this context, what are your main advice?

Marina:

I would say that this is the moment to have your ears and eyes well-tuned to understand the new consumer. Clearly there is a job of bringing together internal and many external insights. Because history is not necessarily the predictor of the future. All the signals we get from surveys, social media, with everything that is happening, to try to understand the new consumer, that would be the starting point for me. It is a time to think about capabilities.

André, in that sense, was lucky, because Claro started joining this team a few years ago. So, I was prepared to help the company and the community. Things that in real time cannot be accomplished. So it is, how to think about what are the profiles that the company wants to integrate. And start thinking about a use-case roadmap. Where you will apply short-term analytics.

It has a demand forecast theme, it has an agreement theme for other industries. It has a theme of what kind of product I will offer to my consumers. The concept of where to buy, which has to be refreshed. A very current topic, which are the models of billing customers. Given the situation, it is a point that will be critical for many companies.

Denise:

Now, Márcio, you think that this new collaborative model of Telecoms can become the new normal after the crisis is over, or when it passes will return to that competition?

Márcio:

I think there are several initiatives that make perfect sense for us to work together. It’s like André said, if we tried to address the Covid-19 problem alone, each operator, each had a piece of the solution. When you get together and get a view of the whole, agility, diagnosis, and turning that diagnosis into actions is completely different. So, I think this is just an example of a lot of cool things that you can do and have a common agenda, without obviously leaving aside the competition from day to day, from the traditional business that will follow. We have

an extremely competitive telecommunications market, but it can be seen that there is also room for a sectorial and integrated agenda with all companies.

Denise:

Nice. André, there’s a question for you. Is there any initiative to map potential default in the medium and long term? How can data help with this?

André:

This is a subject that we have already evolved a lot regarding default. For some time now we have created our own means of measuring payment and customer payment behavior.

What are we doing today, taking advantage of this opportunity, further segmenting this type of customer, and understanding, for example, who is impacting the customer in the matter of his payment? Isolation or income? For example, there are people who have no income and will not be able to pay these bills. There are people who, because they are isolated, are simply not having the opportunity to consume and are decreasing their consumption. So these are completely different and complementary things.

What we have done now is to understand a little that each variable of this will affect the consumption of our specific product. Why are there people who have no income and there are people who are isolated, and there are people who are close to things. And that will not only be important in helping us to monitor what is happening. And I think it is an extremely important tool to help other companies to understand their consumers carefully in a different way.

I think there is, in this regard, a lot of opportunity to use the data to better understand what will happen to this world.

Denise:

Márcio, question for you. Given the importance of connectivity for the lives of individuals and essential services such as hospitals, do you believe that there will be greater regulation in the market?

Márcio:

I think the first phase is for us to try really hard. A lot is said about putting consumers in the center, you know, I think it’s time to put Brazilians in the center. And if we think about everything, we need to do to guarantee the well-being and health of all Brazilians, I think we will start meeting many needs and that are emergency, because the virus is in a hurry, hunger does not wait, and so on. So, there are things that need a lot of agility, and the regulation we know doesn’t have that speed. So, I think we have to be close to the governments, and that is what we are trying to do, help and make available where we can help. And gradually resolve all these issues and then discuss what a new world and what a new reality this is and how we regulate it.

Denise:

André, what is the importance of Claro’s partners/Startups ecosystem at this moment, and how do you expect these relationships to evolve after Covid-19?
André:

We have a center that we call Beon, which is really an incentive to these startup issues. There is an ecosystem already set up to use the startup for this type of thing.

In relation to Claro’s own things, we already work using this ecosystem, and we work trying to democratize the data so that this ecosystem uses this to create new businesses or improve our businesses. With regard to Covid in particular, what we are doing with other operators is the first phase, as I said, of ensuring data integration. Develop the first applications or applications that we are already putting into practice, making available to the government. And we have a third phase, which is to make this ecosystem that we assemble data available to, so that partners can unite and use them to work specifically at Covid, whether in terms of health, or in terms of resuming the economic movement.

Denise:

And what measures have been taken in terms of Cyber Security?

Márcio:

Look, this is a big concern, because as everything becomes digital, we cannot think that only the good things in society will be digital. Crime will also be digital.

And I think it is another front, yes, that we have to worry a lot in the case of operators, both to maintain the availability of the service, which are essential, and to guarantee the full functioning of society as a whole. We have seen absurd things happening. These live streams concerts that are directed to donations from serious entities. In the future, someone will copy the channel, put everything as if it were the real live stream, with a QR Code that diverts the money.

WhatsApp is an inexhaustible source of fraud. As far as I understood this emergency aid from the government of “Corona aid”, before it started to be officially paid, millions of people had already been defrauded. So, it is a very big concern that we also have to address as a society, because they play upon disinformation, and trying to emulate initiatives that are very new, such as donations to entities like UNICEF or Central Única das Favelas to get food to those who need. So this security front is really serious and very important.

Denise:

Marina, question for you. Going back to the point where you mentioned about cell phone boxes coming from China, what are the supply challenges, given the difficulty in the global supply chain?

Marina:

With China resuming, we all obviously expected this to be a moment in time that will not affect the next few months. But clearly, when China was at a standstill, we know, most of the equipment comes from there, the suppliers are from there. And not just boxes and handsets, there are many network and equipment suppliers that come from there.

So, clearly, on the one hand you have a consumer who is looking for more and more bandwidth. And you have to change the box, as the equipment in the house does not necessarily support the demand. On the other hand, the rate at which these boxes are delivered is increasing. Because it is already a challenge for these operators, because they lose thousands, millions, in many cases, in the case of operators in Brazil there are millions of boxes. So there is already a very important supply rhythm. In this case, with growing demand, and with disruption of the chain, it is a difficult time.

Now, in a way, we hope, now that China is more or less coming back, it is not a complete normality, but it is a moment of crisis management different from other countries, we hope that all this will be more smoothed out.

Denise:

There’s another question for you here, Marina. How can Geolocation systems be used to create new products?

Marina:

Look, this is a very interesting scope, because each industry has its own use cases. The fact of knowing that I am passing by a store or entering a store of a competitor, a company can pull the customer, making offers. In b2b there is a whole part of sensing and understanding how the goods are moving, the industry.

There is no shortage of business opportunities, clearly. What is lacking in Brazil, in some cases, some companies are more advanced than others, is to put the technology and processes in place to capture the value of these business cases.

Márcio:

Can I also say, Marina, about an initiative that we are trying to do with small and medium- sized companies, where you are at your home and you allow us to use your Geolocation, you opt-in to that application, and because you shared your location, we will do what we call the “push for good”. Which is to send you a recommendation for a small business in your neighborhood that you can use in your daily life.

Again in that idea of trying to help small and medium-sized neighborhood businesses to resist this pandemic, making people aware of buying from the pharmacy that is close to their houses, from the little market near their houses, asking for delivery over the phone from the little restaurant that used to go to. Because if you don’t help these kinds of people, they may not be able to get settled again at the end.

Denise:

Interesting. André, I have a question for you. How will the General Data Protection law continue to be implemented in this scenario at Claro?

André:

We have a specific project regarding the General Data Protection law. We have been working hard for about a year. A large and dedicated team to attend to this. I think in particular; the law is being delayed a bit, it’s the news we have. But I think that nothing changes. I think we continue at the same pace, we have to enforce the law, and regardless of the law, we have to be careful with the consumer in order to avoid invasion of privacy.

It is very important to take care of the data in this scenario. Not only because it involves security, it also involves the individuality of people. And one of the precautions we have is this. We cannot leave a precious good, which is the data, be contaminated by bad things and destroy a business that is extremely potential for us.

Márcio:

Our only intelligence tool to fight an invisible virus that reproduces very fast. I think there is a question of people becoming aware that we use apps that live in localization in our daily lives. We use a smartphone in our daily lives that records a lot of information about where we have been, at what time we were. There are several cases to mention this. And these are individualized information that is on your smartphone. What we are talking about here is grouped information of network signaling, where the smart phone talks to the tower, and because of that, we were able to make a diagnosis if people are moving, and if eventually there is a group that may be raising or increasing the risk of transmitting this virus.

Marina:

I think this point is very important, Márcio. In the sense that, when I am authorized to use more data, individual data, there are many things that can be done, especially at the time of the virus. The problem is that today in Brazil, this is not allowed. In China, yes, for example. In another geography, yes. It is not an unwillingness to have some limitations today.

Márcio:

And for everything, Marina. Including the questions of personalization, customization of the experience that is much talked about in the delivery of digital services, you can only do this from the moment the consumer accepts the risk and the need to share with you some data that help the engines and mechanisms to suggest things that adhere to the context and tastes of that client’s habit.

So, I think that the discussion is very pertinent. We have a lot to evolve in it, and I think what helps in this whole process is that we were really preparing for the implementation of the General Data Protection and Privacy law, which is an extremely strict law. And the fact that we have walked a long way, we are already very mature to make these discussions.

Denise:

Yes, that’s right. Thank you very much, Marina, André and Márcio for bringing us perspectives on collaboration and use of data in the telecommunications industry.

I would like to thank you also from home who stayed with us for the last 45 minutes. Tomorrow, in our next episode, we will talk about the role of Fintecs during and after the crisis, with the president of Neon Payments, Jean Sigrist and Rogério Mascarenhas, who is a senior partner at McKinsey in Brazil.

For a complete McKinsey Talks schedule go to www.mckinseytalks.com. There you can watch the previous episodes, and tomorrow, today’s one will be there. You also find access to the audio versions available on Spotify. So, thanks to you who participated in the discussion today. Thank you from home and see you tomorrow. 

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