Service Excellence

We believe that the transformation of our operations must necessarily begin at the root of the very reason for our existence: our customers. Accordingly, we are transforming the products and services we offer, to make them more flexible and far reaching, and we are changing our internal processes to create an interconnected operating system that may enable us to deliver a unique experience to our customers.

The technological changes that we have implemented have allowed us to keep up with the exponential growth of data traffic, the increased consumption of video content, and the new trends concerning the use of smartphones and Cloud services.

Customer satisfaction

G4-27, G4-PR5

In 2015, we redefined our strategic goals in order to make customer satisfaction our top priority and place it at the center of our business decisions. Since then, we have experienced a material improvement in our direct interactions with our customers given the level of care and cordiality displayed by our customer service staff.

We provide all of our customers with access to in-person, telephone, and/or online support, depending on the country where they are located.

Customer interaction 2016

81%

In-person

18%

Telephone

1%

E-mail

Given the large number of requests submitted through these channels, in recent years we have sought to diversify our customer support resources through the inclusion of additional options in our websites and the deployment of the Mi Telcel, Mi Telmex, and Mi Claro applications. Notwithstanding the above, in-person and telephone support remain our customers' preferred options and, accordingly, we strive to upgrade them continuously in order to improve our customer ratings.

To further improve our level of customer satisfaction, we have implemented several self-assessment tools and various corrective actions. In 2016, we surveyed 807,205 customers in 10 countries, and received positive feedback about our Internet service, the quality of our signal in terms of availability and call continuity, the performance of our data services, our sales processes, the cost of our service plans and equipment, the timeliness of our billing processes, the availability of airtime recharges, and the resolution of grievances.

By the same token, we identified various opportunities for improvement, including the supply of information on new products and services, our range of online and automated post-sale transactions, our response times and level of first contact resolution, the positiveness and memorableness of the experience we deliver, the waiting times of our call centers and Customer Service Centers, the clarity of the information we supply, the size of our customer service network, our technical support capabilities, our post-sale service, and the level of coordination with our technical area to address deep-rooted issues that affect our customers' service.

We also identified certain grievances with respect to WiFi coverage and stability, the insufficiency of the amount of megabytes of data included in our service plans, and service disruptions.

We have adopted the Net Promoter Score (NPS) index, which allows us to measure the monthly value generated by our customers and to determine whether we are actually meeting their needs and expectations. The NPS measures the likelihood that a customer will recommend us based on his or her experience. In 2016, we achieved NPS scores above 50% in several countries, including 81% in Peru, 65% in the Dominican Republic, 60% in Paraguay, 55% in Mexico (Telcel), and 54% in Uruguay.

In addition, in 2013 we began developing a tool for introducing technological innovations in our Big Data analysis as a means for understanding our customers' experience with the use of our devices and customer support channels, and for identifying potential areas of improvement.

This tool helps us improve our customers' experience by allowing us to get to the bottom of service disruptions (which we cannot accomplish through the NPS), to improve our revenues through the prevention or early resolution of issues, and, more importantly, to reduce the number of customer grievances.

We are a proud pioneer in the use of this tool —that is fully customer oriented— and expect to implement it in all countries within two years.

Responsible marketing

G4-PR7

All of our communications and marketing strategies for the dissemination of service and product information, and all of our communications with our stakeholders, reflect the corporate principles and values set in our Corporate Governance Policies and our Code of Ethics, and comply with the laws of the countries in which we operate.

Given the importance assigned by our customers and users to the maintenance of sound marketing practices, we are in the process of developing a responsible marketing policy that we will release in 2017.

Supply chain

G4-12, G4-EC9, G4-LA14, G4-LA15, G4-LA16, G4-EN32, G4-EN33

All of the products and services required for our operations are purchased locally using a strategic, centralized model that maximizes the use of our subsidiaries' synergies. As a result, 43% of our procurement budget is used with strategic suppliers, and 55% is used in Mexico and Brazil, which allows us to achieve significant economies of scale while optimizing our budget and expenditures. In each of the countries in which we operate, we retain strategic suppliers for services that are of a local nature, which relate primarily to the maintenance of our networks, and to our customer service platforms and call centers.

At each of our mobile and fixed-line business units that serves to the mass residential and corporate markets, we maintain commercial relationships with all of the leading suppliers of products and services to the technology and telecommunications industries, which allows us to remain at the forefront of technology and to deliver value propositions to our customers. We currently have more than 21 thousand suppliers worldwide.

In Mexico, we purchase in excess of 90% of our supplies locally.

Additionally in 2016, we conducted performance reviews for 1,137 thousand suppliers², in order to identify irregularities, best practices, and potential areas of opportunity.

For example, in Telmex we provided advice on anti-corruption practices to the 100% of our suppliers (1,487), as well as an aggregate of 1,032 hours of training on such practices to 156 suppliers.

We also reviewed 80 suppliers for environmental performance in Colombia and Ecuador, to identify their impacts for the generation of waste and pollution, and for water, energy, and fuel consumption.

In both countries, we identified increases in the generation of regular and special waste, fuel spillages and leakages, excessive levels of water and oil consumption, instances of air and soil pollution due to fuel and coolant spillages, and inadequate hazardous waste management practices.