Telecoms Research Agenda 2011


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If you are looking to keep a track of Market Intelligence in the Telco market, please look at the Ovum Research plan for 2011.

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Telecoms Research Agenda 2011

  1. 1. Advising you onindustry transformation OVUM TELECOMS 2011 Research Agenda
  2. 2. What’s new in 2011 Welcome to Ovum’s telecoms research agenda, which we ■ Ensured that our analysts are available hope you’ll find valuable in providing the market perspective to you. We recognize that you want to discuss our you need to drive growth in 2011. research and the market with our analysts, which is why we have made it easier for you to make enquiries. As always, we will ensure that you are best placed to maximize value from new and existing markets and will work ■ Broadened the research scope of many alongside your teams to provide research and analysis that practices. We are intensifying our efforts with deeper supports your decision making, no matter where you sit country profiles, a renewed focus on new media, content within the industry. and gaming, and country-level analysis on fixed and mobile access services. You will also see more pricing Our research in 2011, which comes from some of the information and converged analysis across the telecoms industry’s leading analysts, will be as stimulating as ever and and IT teams within Ovum. founded on robust market data. However, there are some key changes as we improve our service. After all, it follows This year we are also introducing the concept of Signature Research, which represents the best of what that as our customers’ markets expand, we too broaden our analysts produce in each of our practices. our horizons. We have laid out the key themes of our 2011 research For 2011, we have: agenda in the pages that follow. Combined with our commitment to service that gives you access to expertise, ■ Expanded our primary research. We will produce real-world experience, and market insight when you need it more primary research, growing the amount of customer – we believe you’ll find this a compelling package. insight research by 20%. You will see more customer and enterprise surveys and we will continue with our Thank you for your business and I look forward to wholesale customer survey. working with you in 2011. ■ Invested in our quality process. To ensure that you can make business decisions with confidence, RICHARD MAHONY everything we publish goes through three stages of DIRECTOR, TELECOMS RESEARCH & ANALYSIS quality review – a standard that we believe is the most stringent in the industry. ■ Invested in new research methodologies, which will mean that our research is not just founded on reliable data, but unique methodologies designed to provide market clarity. ■ Invested in new geographies, with new offices in China and Brazil and expanded operations in Japan, South Africa, and the US. We now offer the broadest geographic reach and the deepest telecoms focus in the industry.2 | OVUM TELECOMS RESEARCH AGENDA 2011
  3. 3. OVUM TELECOMS2011 Research Agenda Telecoms at a crossroads 4 Telco Operations me 24 Key research themes 6 Telco Strategy 26 Practice coverage of Wholesale 28 (C key research themes 8 Components 10 REPORT Research portfolio 30 Consumer 12 EXPERTISE Key benefits DECISION MAK 32 IN e Devices and Platforms 14 Global ive Telecoms Analyzer 33 I sa Emerging Markets 16 Knowledge Center 34 Enterprise 18 Research Store 36 da abas ks 37 Network Infrastructure 20 Consulting Policy and Regulation 22 CONTENTS | 3
  4. 4. 2011 Telecoms at a crossroads Telcos need to “ find ways to tap into the emerging revenue streams which take advantage of their networks ”4 | OVUM TELECOMS RESEARCH AGENDA 2011
  5. 5. JAN DAWSON CHIEF TELECOMS ANALYSTThe evolving telecoms ecosystemdemands new business modelsThe telecoms industry is at a crossroads. Saturation andmarket maturity are driving down prices and causing revenuesto stagnate and decline. Meanwhile, telecoms operators, whichhave always held the pre-eminent position in the market, arelosing power to new players from the online, software andconsumer electronics markets. Large European and NorthAmerican equipment vendors, which once provided telcoswith all the technology behind their products and services, arethreatened both by surging competitors from Asia and by a newbreed of applications and services not rooted in switches androuters but in software in the cloud. Device vendors, onceclearly telco partners with interests aligned with theirs, havenow become competitors in content and service provision.All these changes require a fundamental rethinking of thebusiness models which used to generate substantial revenuegrowth and fat margins but now threaten to produce onlystagnation and decline. Telcos need to find ways to tap intothe emerging revenue streams which take advantage of theirnetworks without generating any revenue for them. Networkequipment vendors need to develop new software-centric,developer-friendly business models. Device vendors needto wa k a thin line between partnership and competition.Regulators, too, need to evolve in their evaluation of andresponses to the market to include new players andbusiness models.In emerging markets, many telcos have found a way toeffectively go back in time and participate in rapidly growingmarkets again. But there, too, some of the same trends will occurover the coming years, and telcos will face similar challenges.But there are also important differences and special challengesin emerging markets, not least how to maintain margins whendisposable income and therefore ARPU are much lower. TELECOMS AT A CROSSROADS | 5
  6. 6. 2011 Key research themes In 2011, we’ll be focusing on seven key research themes to help industry players overcome foreseeable challenges and make the changes necessary to succeed. Each of Ovum’s 10 research practices will tackle the topic areas most relevant to their particular coverage area while the following big picture themes will cut across much of our telecoms research portfolio. 1 THE ROAD TO 2020 Ovum’s Telecoms 2020 report series described a new type of service provider which will emerge in the next ten years: the SMART player. The disruptive competitors which have entered the telecoms market in recent years have largely been platform players, which is to say that they own and operate software platforms which cross the traditional boundaries between fixed and mobile, between computers and televisions, and between voice and data. In addition, they have created interfaces to allow third-party developers to create value on top of their platforms in a way that increases the value of the platform to users and generates revenue and stickiness. SMART players will emerge from among these companies, but telcos also have an opportunity to evolve into SMART players, if they begin taking the first steps now. We will continue our coverage of platform providers such as Google, Apple, Microsoft and others, but will also address the key strategic issue of how telcos can begin to develop their own platforms as a first step on the road to 2020. 2 PLANNING FOR NEXT- GENERATION FIXED AND MOBILE ACCESS As telcos invest in fiber-based local access networks and 4G mobile networks, they are by default locked in to the DSL and 3G business models they have relied on in the past. New strategies and business models are required to fund the investment in next- generation access, and to more closely align costs with revenues. Network equipment vendors and others in the value chain will need to support these changes as they work with service providers. And regulators will need to adapt their market analysis and remedies to next-generation access to incentivize investment while ensuring a level playing field. COST AND PROCESS 3 OPTIMIZATION STRATEGIES Cost reduction is nothing new to telcos, but efforts to cut costs continue, and as the low-hanging fruit has mostly been picked, they must find more sophisticated ways to improve efficiency. This involves transformation of many core operational functions, but it also means making smart decisions about network investments to support burgeoning bandwidth requirements. Equipment vendors will be key to transforming the cost structure of deploying networks, and they and their suppliers including component vendors will need to transform their own businesses to maintain their margins and remain competitive.6 | OVUM TELECOMS RESEARCH AGENDA 2011
  7. 7. PROFITING FROM NEW4 REVENUE OPPORTUNITIES While cost reduction plays a part in protecting margins, telcos need new sources of revenue in order to cover the shortfall caused by declining fixed revenues and stagnating mobile revenues. But there is no single obvious new revenue opportunity to pursue. Rather, telcos must find a slew of new opportunities and focus on those most likely to generate profitable revenue growth in the coming years, across all segments, from consumer to enterprise to wholesale. THE IMPACT OF CLOUD5 BUSINESS MODELS The technology world is abuzz with ta k of the ‘cloud’, and it has become the latest term to suffer from over-application to products and services from a range of providers. But beneath the ‘cloud-washing’ there remains a real shift in business models which has the power to fundamentally impact the telecoms market. Not only is there an opportunity for telcos to become cloud providers in the enterprise market, but telcos will also want to make use of cloud services and architectures internally to deliver their services to all segments. Meanwhile, telcos will have to respond intelligently to competitors using cloud business models. LEVERAGING CUSTOMER6 INSIGHTS What separates the most successful companies from their less successful competitors is often the ability to intuit what customers want and when. Achieving this goal requires a combination of insights into what customers say they want and detailed analysis of customer behavior. Telcos hold much of the data they need to make very good guesses at what customers want, but are often poor at making sense of that data. In addition, their own efforts to approach customers directly about their plans and preferences often fall short either because customers don’t want to share that detail with their provider or because telcos ask the wrong questions. A strategy that combines effective mining of the data telcos already have with insightful analysis of customers’ stated preferences is key to success. UNDERSTANDING7 COMPETITORS AND PEERS In addition to the established competitors from within the telecoms market itself, telcos face an emerging threat from new disruptive competitors with radically different business models. These competitors are not subject to regulation, may offer advertising-funded services for free to end users, and may be much more dynamic and flexible than telcos can be. Holding ground against existing competitors while adjusting to and either working with or battling against new competitors is key to success. In addition, learning from peer best practice is crucial to staying ahead of the game. KEY RESEARCH THEMES | 7
  8. 8. 2011 Practice coverage of key research themes The following pages illustrate how our key research themes will spread across our practice areas in 2011. Devices and Components Consumer Emerging Markets Ente Platforms The road to 2020 Planning for next-generation fixed and mobile access Cost and process optimization strategies Profiting from new revenue opportunities The impact of cloud business models Leveraging customer insights Understanding competitors and peers8 | OVUM TELECOMS RESEARCH AGENDA 2011
  9. 9. Network Policy and Telco Telco Wholesalerprise Infrastructure Regulation Operations Strategy PRACTICE COVERAGE OF KEY RESEARCH THEMES | 9
  10. 10. 2011 Components DARYL INNISS PRACTICE LEADER Optical components quarterly market share report Market context Revenues are segmented by transceivers (long Wireline and wireless network operators continue to experience distance – mostly used in the core network, high bandwidth demand, a trend that is expected to continue medium – mostly used in access networks, and for the foreseeable future. In their efforts to improve margins, short – mostly used in datacom), transmission operators need to decrease the cost of bandwidth while offering discretes, amplifiers, and ROADM components. new services. They are therefore demanding higher capacity at smaller size, lower power consumption, and lower cost per bit. Optical component forecast Component suppliers provide technical innovations and new The forecast includes volumes, prices, and revenues product development that serve as key ingredients to helping of modules and discrete components. It represents operators meet these needs. optical components used in the network core, metro, access, and enterprise-based networks. Our coverage Ovum’s Component research analyses the communications market to identify the ‘real’ growth opportunities in components. Optical components market It provides insight into opportunities for transceivers, ROADMs, Representing a $4.7 billion market on a rolling 4Q basis through 2Q10 amplifiers, and discrete transmission components in core networks where the availability of new products is often the gating item. It analyzes cost of components and equipment used in core and next-generation access including FTTx 17% 19% and 4G wireless. The research also identifies opportunities for component vendors in enterprise (eg. storage and local area networks). 13% 23% 15% 13% Transceiver 1 ver ROADMs tance distance Long Transceiver 2 ver 2 Amplifier distance distance Medium ver 3 Transceiver 3 Discretes sta ce distance Short10 | OVUM TELECOMS RESEARCH AGENDA 2011
  11. 11. 2011 Coverage AreasMarket assessment and than supply. Hence availability of the datacenter that require analysisoutlook for components in components for 100Gbps will be a key to uncover their long-term rolesoptical communications issue. Meanwhile, multi-year revenue and opportunities. opportunities exist at both 10 andComponent companies in optical 40Gbps. We will provide market data A short list of important questionscommunications are on the verge of and intelligence including quarterly includes the following:posting consistent profitable results. shipment data at 40 and 100Gbps, toOvum’s quarterly market share help suppliers, customers, and carriers • Transition to 10Gbps appears toand biannual forecasts provide a understand the market realities. finally be happening. But the coppercomprehensive market perspective solution is also attractive. How is thisto help understand the competitive market opportunity emerging? Next-generation wirelesslandscape and to separate fool’s and wireline access • 40Gbps Ethernet and 100Gbpsgold from real opportunities. Ovum’s technologies cost outlook Ethernet. Where are we, what’s themarket intelligence includes bothbottom-up and top-down analyses. “right” form factor, what’s needed, DSL cost per port sets the industryOvum interviews component and and when will it all be ready? benchmark for competing accesssubcomponent suppliers and technologies, but as fiber is laid in • What are optical engines, who iscorroborates its findings from interviews access networks, a variety of other developing them, and where are theywith network equipment manufacturers equipment in use needs to be cost being used?and network operators. Ovum’s analysis competitive. And the introduction of 4Gof end market drivers, customer and wireless provides another competingcompetitor positioning, and emerging technology for some markets, on yetdemand for products and technologies another cost basis. How does its costhelps position component suppliersfor success. compare to DSL and FTTx? What technology advances are neededAvailability of high to help drive the costs down for thebandwidth transmission different next-generation accessline components for approaches? Our research willnetwork core include building the bill of materials for a series of access equipment,Carriers have crowned 100Gbps analyzing cost, and identifying cost-as the next-generation backbone reduction approaches.transmission rate to help them supportburgeoning bandwidth demand. But Datacenter transformationsthe development cycle will likely be driving new opticalslow due to the technical challenges connection demandinvolved. And ramping these productsin manufacturing will be monitored A host of new technologies andcarefully since demand is larger approaches are being introduced in COMPONENTS | 11
  12. 12. 2011 Consumer MICHAEL PHILPOTT PRACTICE LEADER Consumer executive briefing Market context The report provides a key point summary of the research carried out by Ovum over the last six Broadband Internet access has changed the way we live our months including forecasts, latest consumer trends, lives, the way we communicate, and the way we consume market drivers, and core insights about the services media. The convergence of telecommunications, broadcast, provided to the connected and extended home. and Internet markets has created a burden of choice for Ovum’s Consumer Research Digests will benefit consumers – the choice to consume more than ever before, from additional high-level conclusions and forward- anywhere, anytime, and anyhow. Consequently the consumer’s looking implications. behavior, needs and desires are changing, and business models have to change with them if telcos, vendors, and online service providers are to capture the value resulting from the consumer’s new demands. The digital consumer opportunity Our coverage Ovum’s Consumer practice is focused on this rapidly changing Digital media Extended home Advertising Integrated services marketplace. The core of its research will be focused around the strategies for successfully monetizing online content services, integrated value-add services, and the connected home. The research will study the trends across the whole market, but with a focus on how the broadband, mobile, or integrated service provider can maximize their opportunities within that market. To achieve this we will carry out in-depth research into optimum business models, developer strategies, and consumer demand trends. In 2011 Ovum will also have a research theme on social media as it is integrated into other Broadband service provider opportunity applications and services such as TV and video.12 | OVUM TELECOMS RESEARCH AGENDA 2011
  13. 13. 2011 Coverage AreasContent services and functionality and value to the end user. Social mediaapplications Examples of such services include: Social networking is one of the mostThe online content and application • device security mature and popular of all Internetmarkets are growing rapidly. However, • content backup applications. Its familiarity, even withinonline and over-the-top players are the mass market, means that it is • integrated VoIP applications becoming an increasingly importantstarting to dominate the markets leaving tool within other types of media andlittle space for the broadband service • payments communication. Ovum will analyze howprovider. In order to take advantage of • identity management social networking can be utilized inthis potential revenue stream, service • personalization. other applications and how players canproviders must continue to innovate and monetize such innovation. Research willmove quickly as end-user trends come Ovum’s research will include reports focus on case studies of leading playersand go. and case studies of the latest and the associated business models. developments and best-of-breedOvum will publish in-depth analyst examples/market leaders. Researchreports, player case studies, forecasts, will also include analysis of non-and consumer insights reports in a telco service providers that are also developing such solutions. Consumernumber of key content areas, including: insight reports will include figures• TV on consumers’ willingness to pay for such services, and service provider• music positioning.• gaming Opportunities in the• gambling connected and extended• e-publications. home Content and value-added services are aIntegrated value-added big part of the connected and extendedservices home. However, there is more to the connected home than just content.Much focus today is on the high-end The home network, CPE evolution,content services. However, there are connected device developments &a number of opportunities around the adoption, and e-services all contribute to the wider topic. Working with other‘connected home’ that service providers research teams within Ovum andare in a good position to exploit. Datamonitor, the Consumer group willAlthough not always the case, such look to pull together all aspects of theservices are becoming increasingly topic with an emphasis on the B2Cintegrated to provide even greater opportunities for service providers. CONSUMER | 13
  14. 14. 2011 Devices and Platforms ADAM LEACH PRACTICE LEADER Developer insights: a survey into the future of Smartphone and Market context multiscreen applications Connected devices, whether mobile phones, tablets, set-top Understanding the level of developer support boxes, games consoles, PCs or others, form the focal point among device platforms is critical to evaluate the for the delivery and consumption of telecoms and Internet future success of a given platform. Only the best- services, content, and applications. supported platforms will ultimately attract the best developers, including major content providers, However, the core value in these devices lies less and less in media companies, and brands. Not all will flourish. the physical device itself and more and more in the software platforms that run on these devices. To obtain a comprehensive, unbiased view we survey 300 developers across a range of vertical A number of major industry players are competing for market sectors with the objective of building a deep share in this space – including Apple, Google, Microsoft, Nokia, understanding of their mobile strategy. RIM, and Samsung – for dominance in the home and personal device markets. Our coverage Devices vs. platforms The Devices and Platforms practice addresses the key competitive dynamics in this space by analyzing the major players and their strategies, the threats and opportunities Samsung presented to existing players, as well as future impacts. Android We provide player analysis, forecasts, and tracking of HTC RIM specific device types and platforms to help operators, device LG manufacturers, platform vendors, enterprises, and application DEVICES Nokia PLATFORMS developers make sense of this rapidly changing market. Apple Sony Ericsson Windows Phone Motorola14 | OVUM TELECOMS RESEARCH AGENDA 2011
  15. 15. 2011 Coverage AreasThe evolution of the disruptive business models, strong The opportunities andsmartphone market consumer branding, and existing business cases for relationships into direct competition multi-screen applicationOver the last two years smartphone with telcos. deploymentsales have consistently outperformedthe sales of traditional mobile phones, We will provide regular profiles of Managed device platforms areand during the global recession were the major adjacent players, including increasingly becoming multi-device andthe only part of the mobile phone Google, Facebook, Apple, Microsoft, multi-screen platforms, crossing the and Nokia. We will evaluate these traditional divide between computersmarket that grew at all. players’ strategies and ambitions, and and televisions, and between home-Ovum will focus on mobile operators’ identify the threats they represent for based devices and mobile devices.strategies to bring the economics telcos. But we will also examine the We will examine the process involvedof smartphones (with their ecosystem opportunities for partnerships with in creating and developing multi-of applications and monetization these players. screen applications and services,through app stores) to the mass market from conception to deployment. In Opportunities in theof subscribers. particular, we will focus on the ‘Four Ds’: connected and extended devices, development, deployment, and homeOvum will continue to comprehensively distribution of applications, content,cover the smartphone market by The range of devices which are and services.forecasting smartphone shipments, connected is now extending far beyondtracking new device capabilities, This multi-screen development will home computers and mobile phones. rely increasingly on web technologiesprofiling the main players, and tracking Games consoles, tablet computers including HTML5, Adobe Flashchanges in developer strategies. and netbooks, connected televisions and other rich internet application and set-top boxes, plus other devices frameworks – areas where Ovum hasAdjacent players: such as in-car systems – often driven well-established expertise.opportunities and threats by the same technologies that underliefor telcos smartphones – are increasingly With a focus on specific requirementsTelecoms operators face significant connected not only to the Internet but and differences among verticalcompetition from other telcos and also to each other. markets, this work will provide valuable guidance to developers and valuecable companies, but they are We will be revisiting the concept of system players of all types seeking toincreasingly having to battle against the connected and extended home prioritize development.disruptive competitors coming from during 2011. We will examine how theadjacent industries, most notably platforms and technologies deployedonline service providers and consumer on these devices can both help andelectronics vendors. hinder telcos and other players inThese players represent a significant their attempts to gain control in thisthreat to telcos, as they often bring important space. DEVICES AND PLATFORMS | 15
  16. 16. 2011 Emerging Markets ANGEL DOBARDZIEV PRACTICE LEADER Mobile data in the emerging markets: a regional analysis Market context This study examines the opportunity and the Growth in the mature markets of Asia, Europe, and North best practice service provider strategies in data, America has slowed amid market saturation in many service communications, and applications services in the areas. As a result, many service providers and equipment emerging markets on a regional basis, including vendors continue to look at the emerging economies of separate analysis of Asia, Eastern Europe, Middle Africa, Asia, Eastern Europe, the Middle East, and South and East and Africa, and South and Central America. Central America for customer and revenue growth. In such geographies, large swathes of the population are either un- served, or have very basic communications services. Emerging markets coverage Our coverage Central and South America Eastern Europe, Russia and CIS The Emerging Markets practice highlights the key product and Coverage anchored around Coverage anchored around geographic growth opportunities in the growth economies, and Argentine, Brazil, Chile Russia, Poland and Ukraine and Mexico provides deep insight on the emerging players and markets we evaluate. In doing so, our central focus is on distilling the best practice strategies that will assist service providers and vendors to succeed and prosper in what are often unique and challenging market environments. Middle East and Africa Emerging Asia Coverage anchored Coverage around GCC countries, anchored South Africa, Nigeria around China, and Egypt India, Malaysia, Indonesia, Thailand and Vietnam16 | OVUM TELECOMS RESEARCH AGENDA 2011
  17. 17. 2011 Coverage AreasEmerging market service among consumers and enterpriseprovider strategies and customers in the emerging models This will include insights into hot consumer trends, changes in enterpriseThe focus of this research theme communications spending priorities,will be to provide deep insight into and analysis of SMEs in the emergingthe strategy direction, challenges, markets. The research under this themeexecution, operations, and business will be delivered through in-depthmodels of the service providers in the studies and surveys.emerging markets. This will be achievedthrough case study analysis into Local market analysis:innovative/best practice strategies, industry insights, challenges,as well as cross-player, primary and opportunitiesresearch-led, in-depth analysis ofkey strategy topics. This theme will focus on drawing deep insight from select fast-growingService and marketing or innovative local markets. This willinnovation in the emerging include both local market case studies,markets as well as cross-country analysis of select market segments (e.g. consumerWithin this theme we will drilldown into the innovative services broadband, enterprise mobility)and marketing approaches in the Communications technologyemerging markets (e.g. content and direction and adoption inapplications); pricing innovation (e.g. the emerging marketsdynamic pricing); channel management(e.g. SME channel strategies), and Here we will assess the pace andcommunications services for users nature of changes in technologyat the bottom of the socio-economic adoption in the emerging marketspyramid. This research will be by both users and service providers.delivered through case studies Issues covered will include the adoptionand focused briefs. of WiMAX versus LTE, shifts in the mobile device mix in the emergingCommunications users markets as well as adoption of IPin the emerging markets: services among emerging markettrends and insights enterprises. The research here will beThe focus of this theme will be to delivered through in-depth studies andprovide analysis of the demand patterns focused briefs. EMERGING MARKETS | 17
  18. 18. 2011 Enterprise EVAN KIRCHHEIMER PRACTICE LEADER Global services deals analysis Market context Over 15 leading global telcos now supply us with anonymized detailed contract information, More than ever, enterprise communications is a market in flux: allowing us to build twice-yearly Global Services traditional suppliers face challenges ranging from new delivery Deals Analysis studies. Every six months we plot models, such as cloud, to increasing competition from both new key contracts for major global telcos, highlight upstarts and established service providers with an IT heritage. successes in multinational deals, compare and Unified communications has evolved to include immersive rank operators for MNC market impact, identify video, and service providers are moving up the value chain strategic developments and trends in verticals or to provide application services on top of the networks they geographies, map telco capabilities against MNC already manage. In such a dynamic environment, how can requirements, and identify future market trends. opportunity be distinguished from threat, or indeed, threat be turned into opportunity? Our coverage Enterprise value proposition Ovum’s Enterprise practice covers how businesses interact ve r s dr i Evo with each other, with their employees, and with customers. et l ve rk This includes managed and hosted communications services, a pr evolving communications networks, technologies, applications, omp e tito ack c m Tr rs op te and professional services. With this as our remit, in 2011 we os ul a will focus on unified communications for B2C and business itio rs Bu Stim to employee (B2E) environments, service management and l ie n s ed Ev ye p e delivery (from formulating, selling, pricing and delivering, alua S up rs s tomer n through to support), and convergence (including voice/data, Enterprise te new mar k fixed/mobile, and public/private) – all within a framework of communications ss cu geographic and industry-specific insight. n y se ar gi iver et s As Us e r s del m nd Un hs ice der t s t a n d yo u r s t r e n g a v e an d w e ak ne s s e s er s u en & es ev sal wr rt G ro Suppo Suppliers: • Vendors • Global telcos • Regional telcos • Sls Buyers: • CIO/IT directors • Customer service directors • Telecoms directors From SME to MNC and across key industry verticals Users: • Employees • Customers18 | OVUM TELECOMS RESEARCH AGENDA 2011
  19. 19. 2011 Coverage AreasService evolution obsolescence of legacy fixed telephony Changing telco service platforms, and the changing needs of delivery modelsManaged service evolution is at the enterprises and operators?heart of large telco strategies. In this Ovum will focus on collaboration, • Ovum will cover vendor strategies fortheme we will focus on three key areas: software-as-a-service, and nascent incorporating social media and videomanaged mobility, the provision of IT federated services, extending ouras a service, and the evolution of telco into enterprise communications. coverage of hosted and cloud-basedprofessional services capabilities. What positions will UC vendors find services to cover a broader range of themselves in if and when social applications that fall within the scope of media turns the customer into their collaboration as a service. We will also• Our managed mobility research looks own service agent, and the employee investigate the end-user interest in and at the evolving managed mobility into a knowledge hub? And which impact on telcos for federated services services market. It tracks and rates video-based business applications (business to business peering) for voice the development of the major will strike a chord in the market? and UC applications. In particular we will international providers’ service focus on SaaS (software as a service) portfolios, their approach to service Evolution of business- including services targeted primarily at improvement, organizational changes, to-customer (B2C) the SME market for business productivity partnerships, and the growing role communications applications and virtual desktop. of the systems integrators.• While there is by no means any Ovum will examine emerging Regional views, with a consensus on what IT services technologies which help enterprises specific focus on BRIC and in their quest to provide improved capabilities the major telco should broader APAC dynamics service, with a focus on two key have or be able to deliver, we will areas: the impact of mobility on In this theme, we bring an enterprise cover how operators can position provision of customer service, and new angle to our analysis of BRIC countries. themselves to win more deals for personalization technologies. Specifically, we will profile the MNC IT-centric services. strategies of major global telcos with• Ovum will investigate the major An increasingly mobile customer base respect to their ability to serve Asia- operators’ and vendors’ professional has translated into a requirement Pacific clients. With a focus on China, for companies to provide service to services teams, existing professional our mainland-based analysts will shed customers who are no longer tied to a services investments and future plans. light on regulatory constraints, cultural desk phone or PC. We will cover video barriers, the role of local partners, andVendor UC and mobility and MMS applications for mobile service, the needs of both Chinese enterprises the impact of 4G, and mobile devicestrategies and international businesses seeking strategies for customer care. to establish a mainland presence. AndIn 2011 we will turn to focus on the finally, we will combine our enterprise Proliferation of consumer touchpointsvendor, and in particular on mobility, mobility expertise with Ovum’s and strengthening networks have createdsocial media, and video. emerging markets practice analysis a dilemma for customer-service centers that want to maintain personalized to explore major business mobility• Many UC and applications vendors automated service. We will investigate trends in the Asia-Pacific region, and have long-held mobility portfolios. how technology providers are developing in emerging markets such as India and But how are these evolving given new solutions to provide more natural, Brazil, based on our understanding of the increasing demand for managed personalized conversations in a both operator strategies and enterprise services, the advent of 3G, the customer-service context. buyer behavior in the relevant countries. ENTERPRISE | 19
  20. 20. 2011 Network Infrastructure DANA COOPERSON PRACTICE LEADER Quarterly market share reports Market context This report gathers and analyzes revenue and trend information from more than 30 infrastructure The crossroads where the telecoms industry stands is crowded system vendors. We step beyond the numbers to with players unsure of which direction to take. Networks and provide customers with insight based on in-depth partner ecosystems are evolving to support the massive analysis of competitive and market trends by changes in the ways people and organizations communicate. segment and region/country. Because the exact timing and character of industry evolution is unknowable, infrastructure flexibility is critical. Our coverage Networks and the powerful forces reshaping the telecoms landscape The Network Infrastructure practice provides vendor, financial, and network operator customers with a comprehensive Disruptive view of the trends – including architecture, technology, and competitors product evolution; shifts in buyer requirements; and spending Industry shifts – that affect critical business strategies as networks structural change evolve to support operators’ twin goals of cost reduction and Macroeconomic volatility new revenue growth. Our experienced team builds on a data Ne t wo b ile rk foundation compiled over almost two decades. We offer solid Mo s research and logical analysis to provide customers with critical Diverse guidance so they can step away from the crossroads confident customer that they’re headed in the right direction. needs and expecations Regularatory obligations New service requirements Fix e d Ne t wor k s Investment environment Disruptive Disruptive customers technology20 | OVUM TELECOMS RESEARCH AGENDA 2011
  21. 21. 2011 Coverage AreasNetworks as cost-reduction Ovum will address the theme of Networks as enablers ofenablers: improving network networks as enablers of cost reduction globalization: supportingefficiency through regular reports on technology emerging vs. developed trends, vendor strategies, and marketsTelecoms service providers have had opportunity analyses that focus on thea difficult time growing revenues and Over the past 5–10 years there has been above network topics. a dramatic shift in the size and growth ofprofits due to competitive pressures Networks as new services network infrastructure equipment marketsand the growing costs associated around the world. Some emergingwith explosive traffic growth. As a enablers: supporting new markets, including India and China,consequence, network operators revenue generation have rapidly grown their use of newerhave rightly looked to networks to technologies such as HSPA+, PON, While new network technologiesbe more efficient in terms of cost ROADM, and 40G, while spending in have been used to lower the cost of traditionally higher-growth, developedper bit per kilometre in the core and communicating even as bandwidth has markets in North America or Westerncost per subscriber at the edge. New grown, the network’s role as a platform Europe has cooled down for a host oftechnologies such as 40G and 100G, to support and enable new services reasons. Western European markets,coherent detection, and electronic and business models is just starting for example, have been slow to adoptdispersion compensation make optical to be discussed. The network’s role PON- and ROADM-based WDM networksand packet networks more efficient is expanding beyond simply providing due to unclear or unfavorable regulatory regimes and the willingness to wait foras they improve scalability, while new scalable bandwidth and connectivity a next generation of even more flexiblePON- and DSL-based technologies over a wide range of media to collecting, network elements, respectively. Mobileand WiMAX and LTE do the same storing, managing, and acting on crucial networks, meanwhile, from the RANfor fixed and mobile broadband, information on users’ devices, locations, through backhaul and the core, showrespectively. The expanding role of IP, preferences, and privileges. This regional and country variations based on aEthernet, MPLS, and control planes network-based intelligence should be combination of demographic, geography, usable by network operators to enhance GDP, 2G/3G penetration, protectionism,coupled with software-configurable users’ communications experiences, and other factors. These differences inand programmable capabilities in growth rates and technology preferencesfixed and mobile networks improve and their own financial rewards for create volatile market dynamics. providing a superior experience.operators’ flexibility while maintaining Ovum will analyze the shift of networkcarrier-class manageability and Ovum will explore the network’s role equipment procurements and deploymentslowering operations costs. Optical in enhancing operators’ top lines to emerging markets and the impact thisswitching and OTN (optical transport through mobile and fixed network shift has on buyer behaviour, productnetworking) add further flexibility opportunity analyses, including requirements, and infrastructure vendorand manageability in the network. carrier Ethernet services analysis competitive dynamics. We pay particularNew flat network architectures and attention to comparing and contrasting and forecasts; enterprise vertical country markets within Asia-Pacific andunderlying technologies will further market private and managed network subregions within EMEA and how ahelp operators lower network power research; infrastructure as a service vendor’s strengths and weaknesses in oneconsumption, leading to greener, less (IaaS) research; and subscriber region or country might affect its ability tocostly operations. management research. compete in another region or country. NETWORK INFRASTRUCTURE | 21
  22. 22. 2011 Policy and Regulation MATTHEW HOWETT LEAD ANALYST Global interconnect benchmarks Market context Ovum’s tried and tested interconnect benchmarking model and methodology are internationally accepted The development of regulation shapes the future of the and provide you with the most authoritative marketplace. As regulators intervene in markets, they comparison and analysis of interconnect charges in advantage or disadvantage specific players and change market the industry. Our quarterly benchmarks cover fixed dynamics. In addition, as they set rates for interconnection, origination, fixed termination, mobile termination, local loop unbundling and other forms of network access, local loop unbundling, shared access, and a retail/ they directly impact operator revenues. Understanding current wholesale comparison for Europe, the Americas, developments and future directions in regulation is critical for Asia-Pacific and Middle East & Africa. Raw success in today’s market. interconnect charge data is also provided to enable you to make your own calculations, as Our coverage well as substantial historical trend analysis. Data is presented in easy-to-use charts and Ovum’s Regulation research provides you with a deep Excel spreadsheets. understanding of the impact of regulatory issues that shape the future of the telecoms marketplace and the effect these Regulatory scorecard have on strategies and revenues. Our regulation research and analysis team has a global track record of providing policy and From 2011, Ovum will develop an annual regulatory advice in telecommunications. Our experts follow regulatory scorecard to benchmark the telecoms the world’s key market regulatory developments and assess regulatory framework in a number of ‘best practice’ their relevance at a regional and local level. We undertake countries around the world to compare the cost and quarterly benchmarking, country profiling, and cross country effectiveness of regulatory activity. It will be produced in consultation with NRAs and telecoms operators regulatory analysis. and compare the institutional and legislative environment affecting the sector as well as the application of regulation by NRAs in key wholesale access and retail markets.22 | OVUM TELECOMS RESEARCH AGENDA 2011
  23. 23. 2011 Coverage AreasNext-generation access Our analysis will focus on where and Interconnect(NGA) how regulators are making spectrum available. A particular focus will be on For many operators interconnect hasNGA continues to dominate regulatory traditionally accounted for a sizeable the award of the digital dividend and thedebate as significant investments proportion of revenues. However, 2.6GHz bands which are most likely toare being made by the public and be jointly utilized for deploying mobile the use of standardized costingprivate sectors. How to incentivize methodologies looks set to exacerbate broadband. Through developing aninvestment is still a challenge for the already downward trend in mobile internal database of spectrum awardsmany governments looking to bring termination rates, and some NRAs benchmarks can be made based on thebroadband to all of the population. One will be considering what alternative type of award, and by using population charging principles could be used onceof the key challenges facing NRAs is data we can make comparisons rates fall to fixed call termination to strike the appropriate balance between countries and regions.between creating competition and Our core tracking of interconnect willsupporting investment. Determining Regulating for tomorrow be through our quarterly interconnecthow access will be granted to benchmarking. We will add new Introducing rules to ensure net neutrality,alternative operators and on what basis countries and regions over the course tackling illegal peer-to-peer file sharingis central to this. of the year to ensure a robust set of and extending the scope of the universal data exists from which internationalWe will look at how the migration from service obligation to include more than comparisons can be made.copper to fiber is being managed, what functional internet access are all topicsaccess obligations are being imposed, which have made the headlines recently. Aside from the actual charges, we willand what regulated pricing exists. Working out the details remains the also look in depth at how the ratesWorking collaboratively with other challenge and some difficult decisions were determined by the NRA and stepspractice areas we will also address the need to be taken in the very near that are being taken to reduce androle of government in facilitating and future. Regulators will need to take a harmonize termination rates betweenfinancing rollout. new approach to tackle the regulatory countries. We will also focus on what challenges of tomorrow. future charging principles such asSpectrum policy bill and keep might look like once the Our analysis will focus on how regulators current regimes expires.Spectrum is a finite resource which are approaching these issues bymust be allocated and managed comparing country case studiesappropriately. Significant amounts of from around the world. Analyzing thespectrum will become available over implementation of regulatory frameworksthe next 12 months as operators look will be central to this. How regulatorsto launch next-generation mobile engage with stakeholders and thenetworks. How regulators award this effectiveness of regulatory activity willspectrum and what obligations they also be explored through a regulatoryplace on license holders are key scorecard we will develop over theregulatory issues. course of the year. POLICY AND REGULATION | 23
  24. 24. 2011 Telco Operations CLARE MCCARTHY LEAD ANALYST Telco customer service insights Market context We will survey operators about their customer care operations and evaluate their responses to The telco business has changed dramatically over the last five customers contacting them for support, changes in years. Previously technology reigned supreme, but now the service, or information. customer is the focus of all activities. With cheap credit and debt no longer available, telcos need realistic business cases to justify heavily scrutinized investment decisions. This has called for a comprehensive review of how telcos operate and requires the consolidation and rationalization of people, platforms, and processes. The resulting lean and cost efficient infrastructure should help fixed, mobile, and integrated operators respond more quickly to market and customer demands. Our coverage Many tier-1 operators in mature markets are addressing these issues, but it is likely to be a work in progress for most telcos over the next 10 years. The Telco Operations practice reviews telcos’ operational and transformation strategies and how these strategies are implemented internally. We identify the current challenges and areas of business pain, the future business objectives and activities required to achieve those objectives. Change in emphasis for the telco business metrics Traditional telco metrics Today’s telco metrics Balanced scorecards Financial metrics - capex related Greater weighting on: • Process efficiency - increased RFT & reduced cycle time Operational data - calls & lines Customer satisfaction • Business models - measuring integration & automation 5 year business plan Flexibility of business Product profitability Time to market • Lifetime value of customer Network efficiency Sustainability Share price & generation of shareholder value • Integrated operational efficiency24 | OVUM TELECOMS RESEARCH AGENDA 2011
  25. 25. 2011 Coverage AreasTransformation and Telco Operations identifies the We will continue to look at activitiesoperational strategy review various business pain points, the where telcos can make a difference areas for improvements, and the to both sides of the equation withThe economic and competitive actions telcos can take to improve research on revenue managementpressure on telcos means that their customer offers and support and service assurance. For examplethey must review their operating to more satisfactory levels. effective revenue managementmodel, and how they respond activities will address billingand deliver to customers. Next- Customer centricity accuracy and fraud. This will ensuregeneration network programs have that the telco receives paymentbeen under way for some time, Lack of customer focus is one of for the services it provides. Morebut implementing the NGN or NGA the root causes of failure in the timely service assurance will ensurestrategy and addressing the impact customer experience. It sounds that potential network or servicethis has on the company structure, obvious, but it is only now that we faults are effectively managed outplatforms, and business processes see telcos revisiting their product of the business before they causeare all linked decisions. development and management problems, and more informed policy process and putting the customer management can also improveWe will continue to look at how at the center of process. This telcos’ revenue recognition.telcos are responding to these process can draw on the databasesrequirements, as well as holding information on theresponding to the demands of customer, product, usage, pricingthe cloud and social networks. data and so forth, but to date, telcos have been incredibly badCustomer experience at organizing that data forIn these highly competitive times, commercial gain.a good customer experience is We investigate the changesessential to keeping customers telcos have made to organizingsatisfied and loyal. Most customers their customer data and productform their opinion of the service development processes, whichthey receive from the telcos’ front in turn feed in to an overallline call centers for customer improvement in the customerservice and technical support or experience.through their direct sales outlets.However, the back-office systems, Efficiency and optimizationthe operational and businesssupport systems, which assure Getting more out of existing assetsthe order fulfillment, activation, and expecting more from newbilling and fault reporting assets are prerequisites for growingprocesses, play an increasingly margins. Telcos need to growimportant role in delivering revenues as well as manage the costgood service and reinforcing the base in order to present themselvescustomer relationship. as viable ongoing concerns. TELCO OPERATIONS | 25