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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 1

Current and Future Trends

Alexander NTOKO, Project Manager, ITU Electronic Commerce

ITU Telecommunication Development Bureau (BDT)

Email: ntoko@itu.int Web: http://www.itu.int/ecdc

Basic E-Commerce Training For Pakistan

Pakistan Telecommunication Authority (PTA)

Islamabad, Pakistan

31 March 5 April 2001

International Telecommunication Union (ITU)

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 2

Agenda

The trend is Convergence

The platform is IP

The strategy is Alliance

The focus is Services

The future is MobileFrom dot.coms to dot.gones

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Internet Trends

Phenomenal GrowthProjections in all Regions.

New Types of Alliances and Partners.

New Business Models and Revenue Streams.

Core Platform for Convergent Services.

Reduced Set-up Costs for Start-ups.

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The Platform is IP

Rapid Evolution in Several Platforms

Fixed Networks (dial-up, ISDN, Satellite, leased line)

Digital Mobile Data Services (GSM, WAP, I-mode)

Streaming Media (WebTV, VoIP, Cable Modems)

Household Appliances (TVs, Microwaves, Refrigerators)

Wireless Access (PDA + Mobile, Bluetooth)

Broadband (xDSL, DWDM, UWA, 3G Mobile - IMT2000)

Power-line Technology For Internet Access

Fixed Mobile Convergence (FMC)

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The Trend is Convergence

Breaking Industry and Service BarriersBroadcasting Companies --> Voice and Network Services

Telecom Operators --> data network and financial services

Computing Companies --> Broadcasting (TV services)

Financial Institutions --> Data network access Services

Voice Services provided over data networks (VoIP)

Data Services over broadcasting networks (DVB)

Broadcasting services over data networks (WebTV, Radio)

Voice and Data Services over electrical power lines

TV Stations Using Web as another Distribution Channel -MMXI estimated 400% growth in access to TV Web sites

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 6

The Strategy is Alliance

No Single entity holds answer to puzzleBroadcasting Companies + Access Providers = TV-basedInternet access and e-tailing

Content Providers + Network Carriers = Distributed Content

delivery and HostingMobile Operators + Financial Institutions + Software Firms =Mobile e-Payments

Fixed Operators + Broadcasting Companies = Voice Services

via TV NetworksEnergy Companies + xSPs = Powerline Internet Access

Operators + Financial Companies = ePayment Solutions

Small Businesses + Big Businesses =Survival

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 7

The Model is Services

Application Service Provisioning (ASP)Deploy, Host, Manage, Rent Access to Applications forbusinesses from a central location with security, availabilityand performance.

Issue: Finding the Right Position in the ASP Value Chain

1. Network Access Services (Network Connectivity)

2. Content Distribution Services

3. Community and Hosting Services4. Business Productivity and Communications Solutions

5. Application Integration and Work-Group Solutions

Network --> Services --> Applications --> Content --> Portal

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 8

Strategies - NSP

Network Service/Access Provisioning (NSP)

Reliable, low-cost, high speed access for Businesses andConsumers

Issue: Finding the model for reliable and affordable InternetAccess to All.

1. Determine Appropriate Pricing Policy for Services

2. Take Advantage of New access Tech

nologies3. Forge Strategic Alliances with New Bread of Carriers

4. Migrate from Traffic to Content Delivery Services

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 9

The Forces of Change

the rapid rate of change of technologies and its falling costs,

the convergence of technologies, services and industries and theprocess of globalisation,

the phenomenal growth of the IP networks (e.g. Internet) and theproliferation of pervasive computing,

the emergence digital wireless mobile data services andtechnologies (Bluetooth, WAP, GPRS and IMT2000), digital TV,voice recognition, Internet appliances and Broadband IP (xDSL,DWDM, UWA) access,

the increase in mergers, alliances and powerful new players,

the breakdown of geographical, time and industry sector barriers,

are perpetuating the phenomenon ofe-convergence and introducingnew opportunities and challenges to developing countries.

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 10

E-Business Drivers

o Metcalfes Law of Connectivity: The value of anetwork grows exponentially with the number ofnodes. As the number of nodes double the valueof the network quadruples ( f(x) = x2 ) creating theconditions for e-business.

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 11

E-BusinessDrivers

o Moors Law: The performance of micro-processors(computing power) doubles every 18 monthsresulting in cheaper, faster and convergenttechnologies.

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E-BusinessDrivers

o Better Shopping Options, Price Comparison,Cost-effective and Rapid Market Expansion.

o Drive to Streamline Business Processes and

Customer Demandso Search for New Revenue Streams by

moving up the value-chain as Profits

Margins for Voice Traffic Declines.o Operators Capitalising on Customer-base

and Investments.

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 13

The future is Bright. The future is Mobile

Rapid evolution towards Mobile Internet as high speed digital mobile servicesbecome widely available. From GSM to High Speed Circuit-Switched Data toGeneral Packet Radio Service to Enhanced Data Rate for Global Evolution toInternational Mobile Telecommunications (IMT-2000) WAP, I-Mode alreadydelivering Internet services to mobile subscribers.

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 14

M-Commerce

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M-Commerce Drivers

High growth rate expected due to lower deployment cost

and speed of deployment.

Mergers and alliances between mobile operators,equipment manufacturers and service providers creatingopportunities for new services.

Convergence to IP as platform is facilitating access toexisting IP-based services through WAP and I-mode.

Problems of low speed on 2G platforms and limited WAPservices will be resolved as migration from circuit-switched

to packet-switched networks continues.Migration from time-based tariffs to volume-based tariffs willcreate opportunities for IP-based services and content.

Security (SIM and PIN codes) on Mobile terminals (as

PSEs) encourage secure e-payment solutions.

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 16

M-Commerce Drivers

Falling prices forhigh speed processors and reductionin their sizes will transform mobile devices to powerfulhandheld computers.

Deregulation will increase competition and drive down

prices for mobile services.Pre-paid services will provide low-entry cost forsubscribers but might have negative impact on operatorrevenues as customer loyalty reduces.

These drivers will affect the business models foroperators as voice revenues decline.

But they also present new markets for innovativeoperators and service providers what can capitalise onthe opportunities brought about by these changes.

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 17

M-Commerce Services

Banking - Accounts, Statements, Bill payments andFund Transfers

Payments - Credit cards, Micro payments and Pre-paidTrading - Stock quotes, Notifications of events.

E-Government - E-voting and E-administration

Retailing Subscription and Direct sales

Entertainment - Interactive TV and Live Music

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Mobile Commerce Services

Security Services

Access Control

User Authentication

Digital Signatures

Non-repudiationData integrity

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The dot.com euphoria

What Happened to the New E-conomy?

o Building market share and dominance was vital.

o Long term future was justification for high share prices.o Cash and profits were secondary.

o Unlimited cash injections from VCs and IPOs.

o Business models too complex for VCs and investors.

o Having an Internet strategy was a guaranteed componentfor success.

o More than USD 3 trillion lost when the bubble burst.

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1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 20

The dot.com euphoria

From

bricks and mortarto

bricks and clicks toclicks and clicks to

bricks and clicks

Can these pitfalls be avoided?How does this affect e-commerce?