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Community Communcations Presentation

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This presentation is about a recent development in the markets of the big telcos and the big internet players: Communication service providers and social networks are about to merge. A new class of …

This presentation is about a recent development in the markets of the big telcos and the big internet players: Communication service providers and social networks are about to merge. A new class of business is evolving - community communication service providers. Or communication communities. Such as Facebook and Skype, Google+ and GoogleVoice.

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  • 1. Community Communications The next Over-The-Top generation of services and what has this to do with the old-fashioned term MVNO.© TRADUM - better business
  • 2. Trends in a converging Industry called ICT co2© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 2
  • 3. OTT services challenge Telco providers in their core businessIMS Research: Service revenues in the OTT market will grow at an averagerate of 32% through 2016, reaching $16.4 billion. WhatsAppà Free online messaging, voice and video calling services are digging into classic revenue streams of telco providers.© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 3
  • 4. What does OTT – Over-The-Top – really mean?Definition of the expression “Over-The-Top”: •  Surpassing a goal or quota. •  Excessively expressive or dramatic. •  Over the breastwork, as an attack in trench warfare.© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 4
  • 5. What happened to the MVNO Market?•  On July 1, 1991, Finnish Prime Minister Harri Holkeri made the worlds first GSM call.•  In 1999, Virgin starts operating the first full MVNO in the UK, after regulatory approval in 1998. Nokia 101 (1992)•  In 2011, about 500-600 MVNOs are active around the world.•  By 2015, Informa predicts 186 million MVNO subscribers.© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 5
  • 6. What is a Mobile Virtual Network Operator? •  „MVNO“ in a wider sense is used as an umbrella term for providers of mobile telephony services, without own radio spectrum, and without own radio network, but with different levels of technical and process integration. Enhanced Network (Full) Mobile Classic Service Service Mobile Virtual Network Dealer / Branded Sales Data Service Service Provider / Provider Network Operator Reseller Partner Provider Provider (ISP) (ESP) (NSP) (MVNO) (MNO)RadioLicense & ✔NetworkNumber ✔ ✔RangesCore Network ✔ ✔ ✔Services / ✔ ✔ ✔ ✔VASCustomer ✔ ✔ ✔ ✔ ✔CareBilling, ✔ ✔ ✔ ✔ ✔ ✔PricingBranding and ✔ ✔ ✔ ✔ ✔ ✔ ✔AdvertisingSales & ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔Distribution MVNO in a wider sense © TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 6
  • 7. What is “White Label”?White Labeling, or branded reselling is a Multi Channel Marketing Strategy.•  Origins of the term “White Label”: •  A white label record is a vinyl record with a white, non-branded label, produced to test market response of the recorded music.•  Classic markets for white label products: •  Retail – e.g. ALDI with its own brands for food, detergents, apparel •  Household Appliances & Electronics – washing machines, TV-sets, radios… •  Credit Cards – Visa and Master card co-branding with Lufthansa, Amazon, etc. …•  More recent markets for white label products: •  Mobile Phones – e.g. BenQ manufacturing mobile phones for several large international brands, or VERTU (built by Nokia) •  SaaS Internet services, like white label Social Media Solutions© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 7
  • 8. White Label Definition•  A product or service, where the provider of the service purchases a fully supported product from another source, then applies its own brand and identity to it, and sells it as its own product.•  The purchaser assumes the seller is selling its own product.© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 8
  • 9. Reasons for a White Label Strategy•  Market testing / moving into new markets •  Testing without disclosing the brand name or localization of brand•  Plant utilization / scaling the business •  Optimize cost driven commodity production by maximizing factory utilization•  Destroy your own business / in-house competition / diversification •  Increase overall market share and create a challenge for own brands•  Value chain split •  Companies focusing on their core skill – production versus sales/marketing•  Market niche positioning / creating new product / service bundles •  Companies addressing clearly defined market niches with a different message© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 9
  • 10. White Label Social Media Solutions •  With the internet, mass market B2C Forrester WaveTM: Community services became possible. Platforms, Q1’09 •  A new category of services was created: Internet Portals, like CompuServe, AOL, T-Online, Yahoo!, Ning or Google. •  As a result, every major consumer brand developed their own “portal”. •  Today, social networking sites have taken the lead. •  facebook, Xing, LinkedIn, mySpace have been outpacing the classic portals. •  Social Media Solutions are offered as SaaS white lable service. Source: Forrester Reserach, 2009© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 10
  • 11. Gartner Hype Cycle© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 11
  • 12. Social Network Subscriber Numbers •  > 600 million members •  > 100 million members •  > 1 million user accounts •  > 800 million user accounts© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 12
  • 13. The Creation of Over The Top Value Chainsco2 - community communication services are emerging•  Major players are joining forces and driving the convergence of value chains including Social Networks and Communication Services, creating integrated OTT co2 platforms.•  All of them have in common: •  millions of registered users •  international reach •  cloud based services •  messaging features •  (video) calling functionality•  Some offer: •  outbound to classic telephony •  inbound from classic telephony •  close interaction with carriers for inbound/outbound termination •  close cooperation with mobile or fixed line network operators in terms of revenue share models •  rumor: dynamic carrier selection (free choice of mobile operator) granting independence of MNOs© TRADUM - better business 15-Nov-11 © TelcoMobile™ International 13
  • 14. World Mobile Market Saturation Fixed  and  Mobile  Telephone  Lines  per  100  Inhabitants,  2000-­‐2010*   90   Mobile   80   76,2   Fixed  Line   70   60   Per  100  inhabitants   50   40   30   20   17,27   10   0   2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010*   *Es@mates   The  developed/developing  country  classifica@ons  are  based  on  the  UN  M49,  see:     hNp://www.itu.int/ITU-­‐D/ict/defini@ons/regions/index.html   Source:    ITU  World  Telecommunica@on  /ICT  Indicators  database      •  90% of the world population have access to mobile phone services© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 14
  • 15. MNOs are on a Dead-End StreetComparison between Mobile Operators and Social Networks:•  International Brands•  B2C markets targeting millions of customers•  Core product is a commodity•  Stable platforms with established processes•  MNOs have a high technical complexity and difficult processes•  MNOs have high infrastructure cost and scalability issues•  MNOs have an old industry attitude: they are slow and self-focused© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 15
  • 16. Solution Scenario: Splitting up the Value Chain•  The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market by Michael Treacy andFred Wiersema a)  Product Leadership b)  Customer Intimacy c)  Operational Excellence Technology Processes CRM Services … …© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 16
  • 17. MVNO Market Share Forecast 250   Millionen   Subscribers   MVNO  Share  of  Wireless  Market,  2003-­‐2015   14   W.Europe  &  N.   America   World  Average   12   200   10   Per  100  inhabitants   150   8   6   100   4   50   2   0   0   2003   2004   2005   2006   2007   2008   2009   2010   2011*   2012*   2013*   2014*   2015*   *Estimates Source: PYRAMID RESEARCH, Telegeography© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 17
  • 18. MVNO Classifications Roaming Cost Business LifeStyle Improvement Social Retail Brand Discount Network Ethnic Fixed / Mobile Convergence ? The Missing MVNO Class© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 18
  • 19. MVNO Operating Models Self-Operated MVNE MVNA MVNO MVNO MVNO Sales & Distribution Sales & Distribution Sales & Distribution Branding & Branding & Branding & Advertising Advertising Advertising Billing Pricing Billing Pricing Billing Pricing Customer Care Customer Care Customer Care MVNA VAS VAS VAS MVNE IN, HLR, SMSC IN, HLR, SMSC IN, HLR, SMSC Number Ranges Number Ranges Number Ranges MNO MNO MNO Radio Access, Voice, Radio Access, Voice, Radio Access, Voice, Data, SMS Data, SMS Data, SMS© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 19
  • 20. Thread: Apple Dynamic Carrier Selection© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 20
  • 21. The Issue of Sitting at the Bottom End without Realizing it Value Added Services Communication Services Customer Accounts Accessfor Voice, Data, Messaging (National, International, MNO MNO MNO Roaming)© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 21
  • 22. The Black Swan Theory by Nassim Nicholas Taleb•  The Black Swan Theory or Theory of Black Swan Events is a metaphor that encapsulates the concept that The event is a surprise (to the observer) and has a major impact.•  After the Black Swan appeared, the event is rationalized by hindsight. Source: Wikipedia© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 22
  • 23. UC / UM© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 23
  • 24. Wrap-Up•  Commoditization will continue putting pressure on the MNOs.•  Saturated markets do require differentiation of target groups.•  In this case White Label is an established marketing strategy.•  The MVNO market essentially is a classic White Label market.•  There is need for access. Do what you do well and do it better.•  Sun Tzu: Know your enemies. If you can’t beat them, join them.© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 24
  • 25. Conclusion: MVNOs are OTT service providers!A MVNO is a mobile communications service provider,which is purchasing a White Label mobile telephony servicefrom a Mobile Network Operator,which may be enriching such services with their own Value AddedServices (VAS),and which is selling such syndicated mobile services under their ownbrand to their specific target market segment.© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 25
  • 26. Contact André Panné Managing Director TRADUM UG (haftungsbeschränkt) Schönstrasse 65-B 81543 Munich Germany© TRADUM - better business 25-27 May 2011 Executive Telecoms Summit 26

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