informa presentation for tc3
DESCRIPTION
Presentation from Andy Castonguay from Informa. Delivered at TC3 in Sunnyvale last week.TRANSCRIPT
What you need to know about telecoms operators’ growth and innovation strategies
Andy Castonguay, Principal Analyst
Informa Telecoms & Media
Informa Telecoms & Media delivers strategic insight, key market data and forecasts. We’ve been helping our clients make better business decisions for more
than 25 years.
Our aim is to be accessible, responsive and connected both to markets we serve and our clients’
business goals.
We have 65 analysts in nine research offices offering pragmatic advice to the leading global operators and
builders of communications infrastructure.
These analysts are informed, objective and a ready to apply practical ‘real world’ experience to your
business challenges and opportunities.
04/12/2023
www.informatandm.com 3
Our methodology: talk and listen to the industry
Today’s discussion points
The state of the telecoms operator business
Operators’ next big bets
Relationship with OTT players
Getting the most out of your relationship with telecoms operators
Key Observations of Operator VC & Innovation Strategies
Operators are banking on innovation to save them from a future as a dumb pipe.
Venturing is now being absorbed into the overall strategy for partnering and new services.
Operators from outside of the U.S. are looking to partner with firms from Silicon Valley.
“Digital” initiatives have been set up across several divisions in some telcos while others are setting up dedicated units
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With Few Exceptions, Operators Face Challenging Global Mobile Dynamics
2009 2010 2011 20120
200,000
400,000
600,000
800,000
1,000,000
1,200,000
TotalVoiceData
2009 2010 2011 2012
Total 845,954 894,979 961,583 1,005,743
Voice 645,808 654,811 670,755 668,373Data 200,146 240,168 290,828 337,370
Global mobile revenues ($m), 2009-2012
Operators resorting to “non-telecoms” benefits because they cannot differentiate their core products
12/04/2023
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The state of the telecoms operator business
Operators’ next big bets
Relationship with OTT players
Getting the most out of your relationship with telecoms operators
Today’s discussion points
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Fixed and mobile broadband access revenues are growing by 20% + per year
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Laptops, tablets, e-readers: operators want to connect your devices to their network
In M2M evolution, operators want to move from (dumb) connectivity to (smart) services
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11
2012 2015
M2M revenue
distribution
Consulting, integration, software development
Security, demand response,performance management
Decision support, reportsand alerts, analytics
Source: Informa Telecoms & Media
Communications services, associated communicationshardware
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M2M and cloud hold huge promise but their potential has been overhyped
M2M revenues are generating $4.6bn annually for mobile operators.
Telco cloud revenues will be worth $5.7bn in 2012
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Operator focus is moving away from the consumer market to B2B and B2B2C
• The “two-sided business business-model has never really got much traction.
• Operators still believe in the strategy of exposing their APIs but monetisation is difficult.
• Operators are (slowly) starting to verticalize their enterprise divisions.
• In many verticals operators will pursue both B2B2C and B2C business models.
• Carrier billing is gaining momentum.
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In an IP world operators need to look beyond the(ir) network
Today’s discussion points
The state of the telecoms operator business
Operators’ next big bets
Relationship with OTT players
Getting the most out of your relationship with telecoms operators
16
19.7%
80.3%
Mobile videoOther services
34.3%
65.7%
Video has become a major headache for mobile operators, opportunity for partners
Source: Informa Telecoms & Media
0.4%
99.6%0.7%
99.3%
2011
2016Traffic
Traffic
Revenue
Revenue
•Although monetization options will multiply around new video-on-demand and digital-locker services, most video streaming will continue to be consumed for free.
•Piracy will also continue to undermine revenue-generating efforts, especially in emerging markets.
•Operators’ video and TV offerings will become increasingly irrelevant as over-the-top players take center-stage via smartphone apps.
•OTT services – from movie rentals, to catch-up TV and e-commerce sites – will help turn video streaming into a mainstream activity on phones, engaging 35% of mobile users globally by 2016.
www.informatandm.com © Informa UK Limited 2012. All rights reserved
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How can operators generate revenue from OTT partners and 3rd parties?
Marketing support / distribution
Embedded apps / device real estate / devices?
Network prioritisation / guaranteed QoS
Revenue share for premium services
Local caching / CDNs
Today’s discussion points
The state of the telecoms operator business
Operators’ next big bets
Relationship with OTT players
Getting the most out of your relationship with telecoms operators
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Operators are desperate to become more innovative. You can help them in 3 ways
1. Create new revenue streams New services and applicationsRevenue share
2. Enhance core services Slowing price erosionImproving customer loyaltyAttracting new consumers
3. Improve processes / Network efficiencies / Retail
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Operators are stepping up their VC activities in Silicon Valley
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“Digital” units are becoming the focal point:Telefonica Digital sets the standard
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Top 5 areas of operator VC focus
1. Social networking, media & entertainment2. Advertising3. Cloud services4. Applications5. M2M
