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The New Incumbents: Anti-trust in the Digital Economy
 

The New Incumbents: Anti-trust in the Digital Economy

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This analysis evaluates the asset strategies of 'incumbents' past and present, including AT&T's Bell System, Google and Ericsson.

This analysis evaluates the asset strategies of 'incumbents' past and present, including AT&T's Bell System, Google and Ericsson.

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  • This is an insightful analysis of the issues in Anti-trust. For someone who is usually interested in the human - machine - human perspective on trust, this brought into sharp focus the machine to machine dialogues.
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    The New Incumbents: Anti-trust in the Digital Economy The New Incumbents: Anti-trust in the Digital Economy Presentation Transcript

    • THE NEW INCUMBENTSAnti-trust in the digital economyCamille MendlerPrincipal AnalystInforma Telecoms & Media June 2012 www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • 2012: A yearof anniversaries 100th Anniversary Sinking of the Titanic 200th Anniversary Birth of Charles Dickens 60th Anniversary Queen Elizabeth II’s coronation www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Here’s onethat’s beenforgotten 30th Anniversary Modification of Final Judgment www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • A landmarkanti-trustsettlement Leads to break up of The Bell System By 1984, seven RBOCs arise Picture: Flickr/Hiddenpower www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Then, AT&T’sincumbencywas deemedharmful AT&T’s vertically integrated organization had stifled competition (notably in long-distance communications and telecom equipment) Picture: Flickr/Jenkinslawlibrary www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Now, anti-trustfocuses elsewhere “Accumulating data about you isnt just a strange hobby for these corporations. Its their whole business model. And you are not their client. You are their product.” U.S. Senator Al Franken Speech to the American Bar Association March 29, 2012 www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Whiletelcos decidewhat’s core Brands Spectrum O&M R&D Wholesale Cloud BillingStreamlining activities Over Analytics the Top Verticals Payments Access M2M Customers Picture: Flickr/roger.karlsson www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Non-telcosare collectingdigital assets (in 1982) World’s largest World leader World leader private company telecom equipment digital search Let’s compare ‘incumbents’ past – and present Picture: Flickr/dsearls www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Innovationarsenals 1982 Patents 20,000 30,000 24,500 Owned Bell Labs Ericsson Labs via Motorola Mobility (now Alcatel-Lucent) and acquisitions alone asset Related Software asset and services No asset World’s 5th largest Examples: Google search, software company; Android, BigQuery, Chrome, Inventions include owns AT&T spinoff Google+, GoogleApps, UNIX, C++ Telcordia Google Talk Hardware Western Electric World’s largest World’s 4th largest equipment division mobile network equipment server manufacturer vendor www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Networkinfrastructure U.S 1982 white space Spectrum spectrum database administrators (approval pending) Builds, operates mobile networks Owned Fiber asset Developed Builds, operates Metro, long-distance, Related optical laser fiber networks sub-sea fiber assets asset No Wi-Fi asset Bought Wi-Fi Metro Wi-Fi networks vendor BelAir in U.S. and Nairobi, Kenya Technicolor Satellite Broadcast services division World’s 1st comms Satellite backhaul O3b satellite system satellite, Telstar 1 services (launching 2013) www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Consumptionenablers 1982 Devices Western Electric, LG-Ericsson, Motorola Mobility American Bell ST-Ericsson, M2M Device Connection Platform Owned asset Content Related Examples : YouTube, asset Content distribution Google TV, Google Earth, services with Akamai Google Play, StreetView No asset Advertising Admarket platform AdWords, AdSense Payment $ IPX multimedia brokering & Ericsson Wallet payment system Google Wallet www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Lessis nowmore 1982 Employees 104,525 32,467 1,040,000 Revenue per employee *adjusted for inflation $156,538* $278,210 $1,167,339 www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Who’s mostsuccessful? 1982* Revenue $162.8 $30.2 $37.9 billion billion billion Market cap $131 $27.5 $192 billion billion billion ROIC 10% 9.8% 18.8% *adjusted for inflation www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • World populationtouched 12.8% 14.3% 2.6%* * in 1982 108 million 900 million 1 billion subscribers via managed networks unique visitors per month (also 4 million enterprises on GoogleApps) www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • In 1982, AT&Twon a sweetenerto break up The Personal Computer ‘Man’ of Year for 1982A move into computers*A new age ofPersonal Communicationwas dawning* It failed. www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Now, personalcommunicationis the anti-trustissue European Union Argentina Search, Search, advertising advertising United States South Korea Search, Search, StreetView Android Wi-Fi ‘slurping’ India UK Online StreetView advertising Wi-Fi ‘slurping’ www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Verticalintegrationisn’t evil The world’s What matters most valuable is how company has a it’s managed controlled ecosystem It’s also fighting an anti-trust lawsuit alleging price fixing of e-books Picture: Flickr/Leo Reynolds www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • The digital economyis expanding As machines join the ‘conversation’ New privacy challenges in a post-PC world www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Differenttastesare evident Telcos become more virtual Digital content Bon appétit! Device makers Personal offer virtual goods devices Internet firms become Network infrastructure more physical Picture: Flickr/free range jace www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Canregulators 1. Need for velocitykeep up? 33 years to settle the AT&T-DoJ suit; 11 years for Microsoft-EU suit 2. Wider scope Diversity of virtual assets (eg: new gTLDs) Today’s anti-trust 3. Defining abuse challenges Unaligned policies (eg: EU vs US) 4. Who to protect Consumers and/or competitive firms 2012 will be as important for anti-trust as 1982 Picture: Flickr/dgray_xplane www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Marketobservations • Value creation Concentrated in social, mobile & virtual assets • Value enablers Physical assets remain critical • Regulatory bias? Virtual asset focus for Internet firms Physical asset focus for telcos & hardware firms • Stakeholder roles Blurring in a multi channel, multi platform world www.informatandm.com The New Incumbents: June 2012 @cmendler © All rights reserved
    • Contact Camille Mendler Principal Analyst, Informa Telecoms & Media camille.mendler@informa.com +44 7766 13 15 28 Twitter: @cmendlerwww.informatandm.com The New Incumbents: June 2012 @cmendler© All rights reserved 22