Martin Geddes's presentation at eComm 2008

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Transcript

  • 1. The Two-sided Telecoms Business Model Re-thinking the phone company 14 March 2008 Martin Geddes, Chief Analyst, STL Partners [email_address]
  • 2. Before we begin…
  • 3. Telecoms is a freight business for bits 10100010111001001001011000110 10000101111101010010010101010 00101010111101010101010001010 010100110101010001001110101011010100100101011101010010101010001010111011110100010101010 01011100100010001011011001010 11100111010000001011001010100 Voice, video, web, messages
  • 4. Container shipping: precedent Containers vs. IP packets
  • 5. Container shipping lessons Value-based pricing of the containers doesn’t work #1
  • 6. Container shipping lessons New technology and lowered costs are not enough #2
  • 7. Container shipping lessons Increasing returns to scale for infrastructure #3
  • 8. Container shipping lessons The ports get the money, not the shipping lines #4
  • 9. Container shipping lessons People pay most for logistics solutions #5
  • 10. … with a twist One sided market Multi-sided market
  • 11. Limits to retail growth
  • 12. Voice & Data Core Service Pressures 2017 % of Total Mobile Voice Minutes, Europe 2007 2012 Traditional Telephony IP-Enhanced Carrier Telephony Private Voice Apps & Handsets Other
  • 13. The telephony interaction pyramid Comm- unities Relationships Conversations Calls Rendezvous VOLUME TELEPHONY SOCIAL NETWORKING
  • 14. Telcos: still not product innovation businesses How well do we as an industry understand what additional needs users have for voice and messaging products, over and above what they have today?
  • 15. Revenue opportunities OPEN APIs PRIVACY FEATURES REAL-TIME SERVICES CALLING FEATURES Strongly Agree Agree N=83 INTERNALLY-DRIVEN INNOVATION EXTERNALLY-DRIVEN INNOVATION
  • 16. Yes, but…
    • What’s the business model?
  • 17. Introducing 2-sided markets
  • 18. Today: Revenue only from 1 Side $ $ Suppliers = Costs End Users = Revenue Telco Content, Apps, Devices Network & Termination Interconnect & Storage Consumers Enterprises SMEs Multi-Nationals Products (partners’) Products (own) Packets & Platters
  • 19. Tomorrow: Revenue from 2 sides $ ‘ Upstream’ Customers ‘ Downstream’ Customers Millions of Customers Thousands of Segments $ Developers Retailers Government Brand Advertisers Content Owners Telco – Retail Content Owners Telco
  • 20. Telcos have many valuable but latent data assets MY PERSONAL DATA MY STUFF MY IDENTIFIERS MY INTERACTIONS MY RELATIONSHIPS MY CONTEXT MY DEVICES MY CREDIT Name Address Gender Profile Preferences SIM SoftSIM Serial Number Device details Location Presence On/Off Roaming Pictures Videos Calendar Address Book Bank School Friends Workplace Browsing History .mobi domains QR Codes Bad debt Demographics Average balance Number SIP address IP Address Email
  • 21. Google Envies Operators in Key Areas
      • Sub-Scale in:
        • Voice & Messaging
        • Billing & Payments
        • Retail sales and customer care
        • Interoperability
      • Limited Knowledge of Customer
    Google increasingly paying for inventory, skills & data MY PERSONAL DATA MY STUFF MY IDENTIFIERS MY INTERACTIONS MY RELATIONSHIPS MY CONTEXT MY DEVICES Weak! MY CREDIT
  • 22. Telco Future: 3 x business models $$ $$ $$ $$ Upstream Partners Downstream End Users Telcos Payments between telcos Payments between telcos Developers Retailers Government Brand Advertisers Content Owners Telco (Retail) Telco Retail Telco Wholesale Millions of Customers Thousands of Segments Telco Platform
  • 23. Examples of 2-sided markets
  • 24. Learning from the master
  • 25. Google: Lowers transaction costs
      • HUGE SCALE
      • FREE products for end users
      • CHEAP advertising for brands
    = +
      • LOW COST per transaction
    +
      • Massive investment in Google platform
  • 26. Betfair: Stock Exchange for Gamblers Bookie Punter ‘ To Win the Champions League’
  • 27. Strong Growth from Big Scale Platform
      • Explodes in 2003 following launch of open API for bookies
      • More transactions than all European stock exchanges COMBINED
  • 28. A New Telco Proposition?
  • 29. Additional Telco Value Proposition Now: Bundled voice, messaging, video and internet access Next: Personalised Logistics Services for Data
  • 30. Logistics Services in the Physical world 1. Distribution Collection Multi-Modal Transport Delivery 2. B2B VAS Tax & Duty Management Documentation Management Denied Party Screening Scheduling & Supply Chain Management Systems Integration Tracking & Monitoring
  • 31. ‘ Personalised Logistics Services … for Data’ 1. Distribution Origination & Capture Multi-Modal Transport Termination & Display 2. B2B2C VAS Identity, Authentication, Security Advertising, Marketing Services Ecommerce Order Fulfilment Billing & Payments Customer Services Telco (2.0)
  • 32. 1. Distribution Platform
  • 33. New Types of Wholesale Products Video Content delivery networks for 3 rd parties Data “ Postage and packing included!” – for data Become supplier for 3 rd party voice services Voice +
  • 34. 2. B2B2C Value Added Services Platform
  • 35. Current Approach: Media & Advertising… $ $ Upstream Customers Revenue Side 1 Downstream Customers Revenue Side 2 Telco Brand Advertisers Consumers Enterprises SMEs Multi-Nationals
  • 36. … but market is too small! Revenue, $ Billions 2006 2010 $2,000bn $2,490bn $425bn $533bn $30bn $62bn Fixed and Mobile Telecoms Global advertising On-line and mobile advertising
  • 37. Open Up More Markets for Telco Platform $ Millions of Customers Thousands of Segments $ B2B2C VAS Distribution Upstream Customers Downstream Customers Developers Retailers Government Brand Advertisers Content Owners Telco – Retail Content Owners Telco Platform
  • 38. VAS: Help Customers Interact More Easily
    • Barriers
      • Identifying Other Party, Authorisation & Security
      • Promoting Offer
      • Conducting transaction
      • Fulfilling Order
      • Billing & Payment
      • Service & Support
    Customers – Revenue Side 1 Customers – Revenue Side 2 Millions of Customers Thousands of Segments Developers Retailers Government Brand Advertisers Content Owners Telco – Retail
  • 39. VAS: Telcos assets well suited
    • Barriers
      • Identifying Other Party, Authorisation & Security
      • Promoting Offer
      • Conducting transaction
      • Fulfilling Order
      • Billing & Payment
      • Service & Support
    Customers – Revenue Side 1 Customers – Revenue Side 2 Telco Capabilities & Assets       Millions of Customers Thousands of Segments Developers Retailers Government Brand Advertisers Content Owners Telco – Retail
  • 40. Value of the opportunity
  • 41. Potential Market of $350+ billion?
  • 42. Making it happen
  • 43. Five things to get right Scale Packaging Rewards Privacy Reliability
  • 44. The Two-sided Telecoms Market Opportunity THANK YOU More info at www.telco2.net/blog
  • 45. An eComm 2008 presentation – http://eCommMedia.com for more