telecom 2020: preparing for a very different future
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Mega market and technological trends are creating a very new world for consumers, businesses and markets as a whole. A potential role for communications service providers in this new world charts a path to growthTRANSCRIPT
TELECOM 2020
Preparing for a very different future
Rob van den Dam
Global Telecom Industry Leader
IBM Institute for Business Value
Content
• How we see the world changing
• Future trends that are happening right now
• Our vision for a Telco in 2020
• Making it happen
• What does YOUR future like?
The acceleration of OTT
50 Million Users100 Million Users (Int)
300 Million Users (China)
200 Million Users
50 Million
concurrent Users
40 Million Subscribers
Google fiber
1.2 Billion Users
255 Million Users
130 Million Users230 Mio Active Buyers
OTT and the new generation
26%
25%
19%
17%
13%
30%
45%
55%
58%
66%
71%
76%
79%
27%
55%
54%
72%
41%
77%
68%SOCIAL NETWORKING
INSTANT MESSAGING / Chat
MOBILE MESSAGING (SMS)
MOBILE VOICE calls
INTERNET VIDEO streaming/download
MICRO-BLOGGING
FIXED VOICE calls
VOIP ((Voice over Internet)
VIDEO CALLING
Emerging Markets (age < 25)
Mature Markets (age <25)
2014 IBM
Global
Consumer
Survey
•35 countries
•22,000
consumers
DAILY USAGE
Source: 2014 IBM Global Telecommunications Consumer Survey
The global OTT players thrive
2004 data as of 9/17/2004. 2013 Market value as of 12/19/2013. 2012 Revenue is TTM.
List excludes Alibaba ($75B), whose private market value would put it in the Top 10.
List also excludes Skype (bought by MSFT in 2011 for $8.5B), YouTube (reported as part of Google) and Paypal (reported as part of eBay)
The market
value of the
Top 15 equals
that of the
Top 100
publicly-
traded CSPs
The top 5
have more
than $115B of
cash on their
balance
sheets
2012/13 2004
OTT and Internet category players
Growth CSPs is stalling
Source: 2014 IBM report: What being global really means
15 largest Global CSPs
The implications for CSPs
Soaring customer
expectations
CSP’s are behind consumer brands in customer experience and risk losing significant revenue year-on-year.
Needs new forms
of innovation
A new kind of CSP is required that involves customers, employees and partners to co-create new kinds of products and services.
With a new enemy
New entrants in your market. Not your normal competitors, and they are innovating faster than you.
3 key forces will drive changesFORCES
Traditional telco model will disappear; new business models & partnerships required to sustain revenue growth
Threats to revenueThe growth in Internet services and subscription
will not offset declines in fixed line, voice calls and SMS
InformationCSP’s have to manage a rich variety of data from both external and internal sources sources
Data and analytics move from back-office to a critical profit enabler driving innovation in the front office
ConsumersConsumers want exceptional service from CSP’s as provided by consumer-oriented brands
Innovate, partner, or die”becomes an unspoken mandate as new entrants reach out directly to consumers and bypass the traditional CSP operator
IMPLICATIONS IN 10 YRS
Major technological advances
Program Learn
Natural
Language
Analytics
DeepQA
Cognitive
Computing
“SyNAPSE”
Silicon
Devices
Nano Scale 1 Billion
Transistors
1,000X1 Trillion Devices
Nano
Systems
Workload
Optimised
Systems
Exascale Software
Defined
Environments1,000X
Big
Data1,000,000X
Real-time Inference
& Knowable
Future
Cognitive systems: Applications
Sensor Networks / Internet of Things
Infrastructure
Buildings
Vehicles
Grids
Metering Billions of end points 100K+ elements,10ms latencyMultiple feedback time-scales
Social Business Five-in-Five
Watson
Human and
knowledge
capital
analytics
TM
Cognitive Sensing Technology:
• Hearing and voice recognition
• Extracting knowledge from
pixels
• Sniffing for healthiness
• Haptic technology for retail
• Healthier molecular based
recipes
How we see the world changing
Human Society
How we see the world changing
Machine-to-machine communication
How we see the world changing
Internet for everyone
Fully open, free to use Wi Fi in the
Moscow metro
How we see the world changing
Mobile as a remote for our lives
To control home heating
And home entertainment
To manage home gaming
Even to control toilet
activities!
How we see the world changing
The instrumented life
How we see the world changing
True peer-to-peer
In short: a new world
• New classes of services
• Connected lives/ mass personalisation
• Business functions as a service
• Industry value chains reconstructed
• Disrupted competitive landscape
Consumers
Business
Government/ Industries
4 themes for CSPs
Four Common Themes
Cost Reduction
Telco industry• Data dwarfs voice
• High growth gone; fight is now for niches and markets further from the core
• Digital, more demanding empowered customers shaped by experiences outside of telco
• Industry consolidation just starting
Media industry• TV everywhere: 195M tablets sold in 2013;
and 5B smartphones by 2018
• Simultaneous consumption: 75% of consumers surf the web and use social media while watching TV
• Audiences become collections of “ones”
Customer Experience
New Revenue Sources
Reinvent the Enterprise
Cost savings
Cost savings: Leveraging synergies
In which AREAS was your organization able to CAPTURE SYNERGIES?
(15 largest Global CSPs)
Ca
ptu
red
syn
erg
ies to
so
me
or
sig
nific
ant e
xte
nt
Priority focus areas
Source: 2014 IBM report: What being global really means
Customer Experience:CSPs are not leaders by any customer measure
No CSPs in Top 25
Telecom lowest among 7 industry groups
No CSP in Top 50
No CSPs in Top 50
No CSP in Top 100
Wireless industry ranked 44 of 50 industries
No CSP in Top 50
Only one CSP in Top 100, O2 at #46
Customer Experience:Look outside the industry for leadership
New Revenues Sources
Exploit remaining
pockets of growth
Business Services
revenue increased
26.4% to $3.2B
Small business
continues to drive
growth: increasing
contribution from mid-
size businesses
Source: Comcast 2013
Earnings Presentation
Enter higher growth
adjacent spaces
AT&T and IBM today
announced its Internet
of Things / M2M
alliance to initially
focus on creating new
solutions targeted for
city governments and
Midsize utilities.
Source: TelecomLead,
February 18, 2014
T-Mobile USA
Network analytics
for operations and
CEM
Source:
https://www.youtube.c
om/watch?v=IBZYJpD
T0vQ
Leverage on
differential insight
Cannibalize before
being cannibalized
iO lets you make
calls, chat and
share images with
other iO users over
the Internet for free
(WLAN and
3G/LTE)
Source: Swisscom
website
Partner
with OTTs
Source: Spotify website
The New Enterprise Model
Developers
ISVs
Banking
Consultants/SIs
Healthcare
Media
Social business
Personal comms
Security
Policy
Analytics
M2M
Etc… Etc…
Managed customer interface, services, platforms
and networks
Service providers
and partnersCSP solutions
Consumers BusinessGovernment/
Industries
Example Players in the services economy today
$1.5B revenue of10K+ Affiliates
Expecting $10B transactions on
mobile in 2012
40% total units sold by outside
sellers
40% new business comes from
non-CRM offerings
API only company reaches
150,000 developers and 1.5M
calls a day
4.5M API invocations per month
In 2020 up to 60% of today’s IT market is
addressable through this delivery model
Over to youWhat does YOUR future look like?
The CSP rolein tomorrows world
1. Lean and mean Network provider OR Smart Teleconnect / Ecosystem provider?
2. Follower OR Leader?
3. Customer driven service company OR Product supplier?
4. Differentiated OR Commoditized?
5. Need for Vertical AND/OR Horizontal integration?
6. Work with new entrants OR Fight them
7. Do it Yourself OR Co-create?
8. Local OR Global?
9. Consolidator OR be consolidated?
Thank you
Rob van den Dam
Global Telecom Industry Leader
IBM Institute for Business Value
www.ibm.com/iibv