Daytona Sessions vol.1 - Johan Ragnevad - Five years - an Internet eternity, a mobile operator "soon"

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  • 1. 5 years – An Internet eternity, a mobile operator “soon” Lessons learned from more than ten years of struggle 1 November 2007 Daytona Sessions, Stockholm Johan Ragnevad
  • 2. inCode Strategy & Technology Group provides Telecoms and Media industry clients with a complete range of business consulting services License bid strategy and bid preparation Market analysis and Market analysis and Market research, competitor analysis and strategy options business strategy business strategy Trial and launch plan development and management Business demand modeling Business case and pro forma financials Supply chain and Supply chain and Procurement and Strategic Sourcing: RFPs, vendor selection and management financial analysis financial analysis Customer loyalty and churn management Spectrum strategies and usages Architecture roadmap options Technology strategy Technology strategy Technology and vendor evaluations Operational requirements: OSS, BSS, CRM Business opportunity assessments Financial analysis Investment support Investment support Technical and Market due diligence Operational strategies ...to customers from BBC, Microsoft, Nokia and Ericsson, to NTT DoCoMo, Sprint, 3, Verizon and Xfera © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 1
  • 3. Five years on... Has our message changed? The 3G Business Case - ”Bitpipe is not an ugly word” Northstream report, Autumn 2001 Bid Book vs Reality ”Enable horizontally layered service network capabilities” © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 2
  • 4. The mobile phone changed a multi-decade old stable growth curve GSM Source: Gapminder © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 3
  • 5. Internet has moved from niche to everybody’s content & communication platform in 15 years PC Subsidies Source: Gapminder © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 4
  • 6. While the Telecom world focussed on carrier-grade quality and features, the market chose the good-enough and coolest GPRS WAP 3G X.400 ISDN digitel MMS © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 5
  • 7. One ecosystem works... (finn fem fel) Third parties $$ $ $ $ $ © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 6
  • 8. Separation of access from content has not materialised in the mobile world Internet Access Application Internet Service Service End users Providers Providers Applications/ Services ”Mobile Internet” Access Application Service Operators End users Developers Applications/ Services © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 7
  • 9. Something has happened... Mobile Data Traffic Flat fee HSPA/3G (EDGE) 2006 2007 © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 8
  • 10. © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 9
  • 11. Mobile operators still(!) can enable key capabilities addressing Internet limitations More than Identify! Alert! 2.8 Billion Pay! mobile phones © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 10
  • 12. So, when? Soon?? Not if done the old-fashioned telecoms way... MMS development in networks Approximate timeline Standards National bodies 3GPP MMS interworking and 3GPP2 service common in cooperate to launched by Europe, but MMS Several MMS try and enable nearly all globally, still Inter-working MMS traffic is growing, standardized by infrastructure MMS operators in on the drawing established in especially in Europe and 3GPP contracts signed interworking Europe* board US North America 1990s 2000 2001 2002 2003 2004 2005 2006 2007 * Informa, ”Mobile Communications”, 18 March 2003 © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 11
  • 13. Vodafone live! is dead, Long live the mobile Internet! © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 12
  • 14. A range of approaches will continue to be seen for a couple of years… Web-based Proxy-based Mobile operator Bespoke handset mobile services mobile browser WAP portal centric solutions Choice of content Operator service creation involvement Dedicated server No Yes Yes Yes # of supporting handsets Service examples © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 13
  • 15. Opening up network capabilities in a web-centric manner is a logical step in the evolution of the network operator business Required level of operator Incremental involvement service in service revenues creation Core operator revenues Voice, data, SMS, voice mail A web-centric approach can High lead to cost benefits in the High VAS revenue segment, and open up the new “long tail” revenue segment VAS revenues Examples: Premium SMS, MMS, mobile portal services, Blackberry, mobile TV, Medium navigation, etc. Medium “Long tail” revenues Operator “capability retailing”: Services created by SME, SOHO, individual Low developers or private individuals Low Number of services © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 14
  • 16. Aiming at “long tail” revenues in a web-centric model can be a way for operators to foster and benefit from innovation A: “Bit-pipe” scenario: Device vendors and Internet companies aiming at increasing their share A: “Bit-pipe” scenario: Device vendors and Internet companies aiming at increasing their share of customer ownership of customer ownership Example initiatives: End-to-end services: • Nokia Ovi • Media downloads • Apple iTunes Data flat rate plans • Content sharing • Samsung FunClub • Communities Operator network • Yahoo Go • Navigation (GPS) • “Google phone” • Messaging B: “Web-centric” scenario: Operators positioning themselves as innovation enablers B: “Web-centric” scenario: Operators positioning themselves as innovation enablers Operator offering: New revenues from: • Open API access Technology and business • 3rd parties and enablers for “capability private persons • Sample apps, SDKs creating services retailing” retailing” • Simple pricing • Transforming selected • Nationwide operator Operator network ideas into own- access branded services © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 15
  • 17. There is no five-year plan for the Internet, but a manifest and predictions can still be used to enable ”mobile internet” – an eternity on the Internet: –”soon” in the telecoms world: iTunes: Four years to 3 billion songs sold MMS: Five years from first device to today’s usage Youtube: 18 months from launch to acquisition for USD 1.65 billion 3G: Five years to reach 150 million devices Facebook: 3.5 years to become the 7th most visited website in the world ”It’s the value pipe, stupid” Mobile operators will - Embrace the dominating end-user business model of separating access from content - Acknowledge that a free market approach with creative chaos is more likely to increase mobile internet user value - Aim at free distribution to build user base and subsequently capture long tail & advertising revenues - Excel at access - Enable continued Internet innovation towards mobile, identifiable, immediately reachable and paying- capable users © 2007 inCode. Proprietary and Confidential. All Rights Reserved Page 16