IT International Buyers and Global Export Forum 2012, Toronto

March 20, 2012

Five Trends and Opportunities in the U.S. Telecom Market

Agenda

1. Five Telecom Trends/Opportunities ▫Unified Communications▫Cloud Communications▫Mobile Applications▫Business Model Disruption for Operators▫The New End-User Experience

2. Opportunity Matrix Summary for IT

March 20, 2012J Arnold & Associates

Unified CommunicationsTrends and Opportunities•Telecom vendors need to move on from hardware• IT wants to get away from capital-intensive spending•Telecom-centric value proposition outmoded now•UC provides a framework for multimodal needs•Presence is the secret sauce•Allows IT to leverage their resources•Concept not well understood – it’s a service•Great opportunity when properly positioned

March 20, 2012J Arnold & Associates

Cloud CommunicationsTrends and Opportunities•Cloud is gaining acceptance for communications•Great way to support virtualization/globalization•Confusing language – ASP, hosted, managed, etc.•Many variations – IaaS, PaaS, CaaS, etc.•Undermines need for physical networks•Big driver for data centers and software vendors•Giving rise to another major opportunity – Big Data•Opens the door for more OTT/free providers

March 20, 2012J Arnold & Associates

Mobile ApplicationsTrends and Opportunities•Device-driven market is unprecedented•Ripple effect accelerating need for 4G/LTE, WiFi, etc.•Operator’s worst nightmare – everyone wants it•Consumer expectations driving business needs•BYOD creating new challenges for IT•New business models needed to monetize apps•Operators are now in the apps/experience business•GPS, LBS, mobile search, mobile commerce, mobile

video, voice activated apps will surpass telephony

March 20, 2012J Arnold & Associates

Business Model Disruption for OperatorsTrends and Opportunities•Network traffic growth outpacing revenue growth•Video poised to become the biggest traffic driver•Web is already the biggest traffic driver on the LAN•Voice traffic is growing, but most is free•VoLTE will have similar impact as VoIP, but faster•Many alternatives now to bypass incumbents•With cloud, anyone can be a carrier – MSO, utility…•Operators only have 2 assets that matter –

subscribers and phone numbers

March 20, 2012J Arnold & Associates

The New End User ExperienceTrends and Opportunities•Everyone wants/likes/expects free•Smartphones not actually used much for voice•Quality and reliability of mobile calls still poor•Smartphones poised to become the only device used•Subscribers want moments, not minutes•Subscribers will pay for services that deliver value•Opportunities for both content creation and content

consumption•Need to protect that experience – mobile storage,

privacy apps, content filtering, DRM, etc.

March 20, 2012J Arnold & Associates

Opportunity Matrix Summary for IT

March 20, 2012J Arnold & Associates

ImminentEmerging

IT Impact:High

IT Impact:Low

Timetable

Unified Comms

MobileApplications

Questions/Discussion

Jon ArnoldPrincipalJ Arnold & AssociatesP: 416-907-8659E: jon@jarnoldassociates.comW: www.jarnoldassociates.comB: http://jonarnold-analyst.blogspot.ca/

March 20, 2012J Arnold & Associates