Telco survival

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How a moribund industry might just save itself!

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  • Over roughly 50 years, we have seen a series of new classes of computers emerge.
    Each had its collection of technological drivers – not just a specific breakthrough but a confluence of technological advances. If we were to call out one thing it would be integration. As more capability can be squeezed into a certain size/weight/power – suddenly just when the previous class is at full strength an entirely new kind of system emerges.

    With it, a whole new class of applications. Purposes for which we didn’t even think computers were good for.

    What is seldom observed is that each is smaller than the one before, more intimately tied into our lives, and greater in number.

    Today, all the hype is about internet cell-phones and PDAs. However, you are just about to see a new class emerge. This one will be very different. It will be smaller and more numerous, but instead of keyboards and displays, it will be connected to the physical world.

    These are devices that we build today off the shelf. This is where we are in the lab.



























  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little
  • In Gartner‘s “2006 Emerging Technologies Hype Cycle”, Web 2.0 was selected as one of the top key technologies over the coming ten years.

    What Web 2.0 actually stands for seems very unclear.

    When Basecamp asked 1000 of their customers what Web
    2.0 meant to them:
    13% answered that they didn‘t know what it was
    87% who answered yes on the question, nearly everybody came up with a different descriptionSource: Arthur D. Little






























  • Telco survival

    1. 1. Telecommunications… How to survive & prosper in: The 21st Century Peter Cochrane ca-global.org COCHRANE cochrane.org.uk a s s o c i a t e s
    2. 2. We live in a world where change seems to be faster by the day… Stasis is a killer! What we know for sure: Those companies & industries that hold * Technology onto the past always * Competition die…. * Customers …won’t wait
    3. 3. 2000
    4. 4. 2000 It’s the software stupid
    5. 5. It’s the business model stupid 2000 It’s the software stupid
    6. 6. “…the only human that likes change is a wet baby… and even then they cry and scream thro the process…”
    7. 7. IT = The nervous system of business • Reduces cost Supports & empowers • Automates processes • Management • Improves efficiency • Marketing • Mitigates risk • Sales • Improves quality • Support • Improves timeliness • Customers • • • • Unfortunately the telecom industry is not seen as a friend or even a contributor to all this!
    8. 8. Business change cycle…never ending! Standby for the next cycle Threat/ Competition Prosper Opportunity/ Necessity for Survival Change Refinement Business IT Process Technology Operations Product/Service Innovation & Improvement - cost reduction
    9. 9. What is fundamentally fuelling the heat of change?
    10. 10. Decade-on-decade new, lower cost, and higher performance computers emerge: • Platform • Interface to humans & the world • Networking and/or interconnect structure log (people per computer) Electronic/electro -mechanical Mainframe Minicomputer Workstation PC Laptop PDA Explants & Implants in everything & everyone? Based on a slide by David Culler UC/Berkeley year
    11. 11. Raw computing power alone has let us solve many of the limiting problems from the past: Spatial Processing • Interference fundamentally limits efficiency • Spatial processing mitigates self-interference Adaptive Antenna Base Station
    12. 12. We now have all the technology to deliver an infinity of bandwidth to almost any location… …by fiber//re, radio and satellite…we can simultaneously reuse, space, time, frequency & wavelength….all the old limiters have gone!
    13. 13. Disruptive forces Digitization of everything…… and exponential growth Everything/one is getting connected…… and mobile Devices are getting smaller, smarter…… and cheaper Customer demand… and an explosion of broadband
    14. 14. A big mindset change in just 20 years! < 1960/70 > 1980/90 Monopoly Market Me Me The supplier It’s about .. The customer
    15. 15. So what do Telcos have to do to…
    16. 16. So what do Telcos have to do to… 1) Recognize the changes that have happened
    17. 17. So what do Telcos have to do to… 1) Recognize the changes that have happened 2) Identify the changes about to happen
    18. 18. So what do Telcos have to do to… 1) Recognize the changes that have happened 2) Identify the changes about to happen 3) Look for the big opportunities
    19. 19. So what do Telcos have to do to… 1) Recognize the changes that have happened 2) Identify the changes about to happen 3) Look for the big opportunities 4) Change the business model
    20. 20. …and stop asking really dumb questions!
    21. 21. …and stop asking really dumb questions! - How much bandwidth do we need?
    22. 22. …and stop asking really dumb questions! - How much bandwidth do we need? - What will people do with it?
    23. 23. …and stop asking really dumb questions! - How much bandwidth do we need? - What will people do with it? - What are the killer applications?
    24. 24. …and stop asking really dumb questions! - How much bandwidth do we need? - What will people do with it? - What are the killer applications? - Can’t we do it all with wireless anyway?
    25. 25. …and stop asking really dumb questions! - How much bandwidth do we need? - What will people do with it? - What are the killer applications? - Can’t we do it all with wireless anyway? - Haven’t we invested in too much fiber?
    26. 26. …and stop making really dumb assumptions!
    27. 27. …and stop making really dumb assumptions! - Customer use/need is asymmetric!
    28. 28. …and stop making really dumb assumptions! - Customer use/need is asymmetric! - Customers will pay for connectivity!
    29. 29. …and stop making really dumb assumptions! - Customer use/need is asymmetric! - Customers will pay for connectivity! - Network use can be controlled!
    30. 30. …and stop making really dumb assumptions! - Customer use/need is asymmetric! - Customers will pay for connectivity! - Network use can be controlled! - Content can be controlled!
    31. 31. …and stop making really dumb assumptions! - Customer use/need is asymmetric! - Customers will pay for connectivity! - Network use can be controlled! - Content can be controlled! - Maximum penetration is 100%!
    32. 32. …and stop making really dumb assumptions! - Customer use/need is asymmetric! - Customers will pay for connectivity! - Network use can be controlled! - Content can be controlled! - Maximum penetration is 100%! - Government/Regulators understand !!!!
    33. 33. Everything moving to the edge? Networks get dumber as the periphery is getting smarter. Almost everything can be done better at the periphery rather than in the core!
    34. 34. Fundamental threats & opportunities Voice Services: Could be killed by VOIP the Skype model Network: Could be by-passed by wireless WiFi, WiMax, et al Network Services: Anyone can provide netcos have little advantage
    35. 35. Fundamental threats & opportunities Equipment: PCs + Laptops >> appliances IT Dept unnecessary? Security: Users more savvy & effective Security Dept unnecessary? Provision: Employees provide their own IT Companies lose control?
    36. 36. From Telco Tesco/ Carrefour Monopoly 22% Markets Profit Margin Competitive 6% Markets 2% Retail Regime - hard nosed & hot!
    37. 37. Competitors are coming from all directions… …with new and unusual business models..
    38. 38. The Web 2.0 clock is ticking…. • Mobility • Symmetry • More bandwidth
    39. 39. What is Web 2.0? Recent 1000 people survey: * 13% didn‘t know what it was * 87% said they knew what it was but, nearly everybody came up with a different description
    40. 40. Don’t worry… Tim Berners Lee doesn’t know either It seems to be a term coined by Tim O’Reilly in 2004
    41. 41. What Web 2.0? might be…
    42. 42. What Web 2.0? might be… A distributed & global:
    43. 43. What Web 2.0? might be… A distributed & global: * Intelligence
    44. 44. What Web 2.0? might be… A distributed & global: * Intelligence * knowledge base
    45. 45. What Web 2.0? might be… A distributed & global: * Intelligence * knowledge base * communal working medium
    46. 46. What Web 2.0? might be… A distributed & global: * Intelligence * knowledge base * communal working medium Connecting all:
    47. 47. What Web 2.0? might be… A distributed & global: * Intelligence * knowledge base * communal working medium Connecting all: * People
    48. 48. What Web 2.0? might be… A distributed & global: * Intelligence * knowledge base * communal working medium Connecting all: * People * Devices
    49. 49. What Web 2.0? might be… A distributed & global: * Intelligence * knowledge base * communal working medium Connecting all: * People * Devices * Things
    50. 50. What Web 2.0? might be… A distributed & global: * Intelligence * knowledge base * communal working medium Connecting all: * People * Devices Fixed and mobile * Things
    51. 51. What Web 2.0? might be… A distributed & global: * Intelligence * knowledge base * communal working medium Connecting all: * People * Devices Fixed and mobile * Things
    52. 52. What Web 2.0? might be… A distributed & global: * Intelligence * knowledge base * communal working medium The intelligent web…harnessing collective Connecting all: data, information, knowledge & intelligence * People * Devices Fixed and mobile * Things
    53. 53. Most critically… * Information * Knowledge * Wisdom All move to the edge…& become mobile!
    54. 54. So who is in pole position to satisfy this growing need?
    55. 55. Future Competition?? Competition changing market and customer expectations Internet Search Google.com IM/VOIP Google Talk Google Base Convergence WiFi Free WiFi IT portal ICT GoogleBox services WiFi Customer VOIP TV/Vision BlackBox Ad Growth VOIP WiFi Fixed - Mobile Fusion Broadband PSTN POTS/2.5/3G Mobile 2005 2007 2008 2009
    56. 56. We can expect to see more: - Device variants Clients - OS variants - Applications - Mobility - Churn Thinner & smarter clients give us an almost natural solution
    57. 57. Everything is becoming a commodity… •Profits squeezed •Margins eroded •More competition •Fickle customers This will automatically lead to consolidation - more M&A activity
    58. 58. Broadband perception Telco Marketing Model Customer Experience
    59. 59. What should we be doing? - Move to all IP networks - Get out of billing - or get into banking - Move to symmetric broadband - Start the migration to >100Mbit/s - Roll out VOIP - Reduce the number of net nodes by >90% - Drastically reduce staffing - Introduce new services - hit the competition - Buy up ISPs - Change the business model
    60. 60. Go with the latest, most efficient tech, to…realize greater efficiency & savings, & even greater effectiveness!
    61. 61. Stop installing copper and roll out optical fibre everywhere!
    62. 62. So, how in 1986 did FTTH cost in?
    63. 63. So, how in 1986 did FTTH cost in? Not by simple minded upfront costing!
    64. 64. So, how in 1986 did FTTH cost in? Not by simple minded upfront costing! But by whole life costing… by taking advantage of every aspect of fiber!
    65. 65. Costing in for FTTH …
    66. 66. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults
    67. 67. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults 2) Employees in network ~ 25% of faults
    68. 68. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults 2) Employees in network ~ 25% of faults 3) Remote routing of fiber saves ~ 95% work
    69. 69. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults 2) Employees in network ~ 25% of faults 3) Remote routing of fiber saves ~ 95% work 4) Fibre reach removes electronics
    70. 70. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults 2) Employees in network ~ 25% of faults 3) Remote routing of fiber saves ~ 95% work 4) Fibre reach removes electronics 5) Switch nodes/building stock reduced >90%
    71. 71. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults 2) Employees in network ~ 25% of faults 3) Remote routing of fiber saves ~ 95% work 4) Fibre reach removes electronics 5) Switch nodes/building stock reduced >90% 6) Reduced OSS & BSS systems & costs
    72. 72. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults 2) Employees in network ~ 25% of faults 3) Remote routing of fiber saves ~ 95% work 4) Fibre reach removes electronics 5) Switch nodes/building stock reduced >90% 6) Reduced OSS & BSS systems & costs 7) Energy costs reduced by >50%
    73. 73. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults 2) Employees in network ~ 25% of faults 3) Remote routing of fiber saves ~ 95% work 4) Fibre reach removes electronics 5) Switch nodes/building stock reduced >90% 6) Reduced OSS & BSS systems & costs 7) Energy costs reduced by >50% 8) Staffing reduced by > 80%
    74. 74. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults 2) Employees in network ~ 25% of faults 3) Remote routing of fiber saves ~ 95% work 4) Fibre reach removes electronics 5) Switch nodes/building stock reduced >90% 6) Reduced OSS & BSS systems & costs 7) Energy costs reduced by >50% 8) Staffing reduced by > 80% 9) Lead, copper & plastic recovered = $$ income
    75. 75. Costing in for FTTH … 1) Water ingress in copper ~ 50% of faults 2) Employees in network ~ 25% of faults 3) Remote routing of fiber saves ~ 95% work 4) Fibre reach removes electronics 5) Switch nodes/building stock reduced >90% 6) Reduced OSS & BSS systems & costs 7) Energy costs reduced by >50% 8) Staffing reduced by > 80% 9) Lead, copper & plastic recovered = $$ income 10)Year-on-year OPEX fall with new tech
    76. 76. The worst thing we could do? Continue to do what we have always done, because we will continue to get what we have always got….
    77. 77. BIG predictions…
    78. 78. BIG predictions… Positioning systems >> Communications
    79. 79. BIG predictions… Positioning systems >> Communications SensorNets >> All Nets
    80. 80. BIG predictions… Positioning systems >> Communications SensorNets >> All Nets PodCasting >> TV & Radio
    81. 81. BIG predictions… Positioning systems >> Communications SensorNets >> All Nets PodCasting >> TV & Radio Thin Clients >> Thick Clients
    82. 82. BIG predictions… Positioning systems >> Communications SensorNets >> All Nets PodCasting >> TV & Radio Thin Clients >> Thick Clients Home Creativity >> Office Creativity
    83. 83. BIG predictions… Positioning systems >> Communications SensorNets >> All Nets PodCasting >> TV & Radio Thin Clients >> Thick Clients Home Creativity >> Office Creativity Robots >> People
    84. 84. BIG predictions… Positioning systems >> Communications SensorNets >> All Nets PodCasting >> TV & Radio Thin Clients >> Thick Clients Home Creativity >> Office Creativity Robots >> People Machine Decisions >> People Decisions
    85. 85. A world of opportunity & risk…. Thank you, cochrane.org.uk ca-global.org COCHRANE a s s o c i a t e s

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