2011-04-11 And there is ample evidence of these trends when we consider some key facts just over the last 3 years... We expect about 3.8B MBB subs by 2015... Growing from 600M in 2010 which will double this year The app market, which barely existed 3 years ago, is now generating 15B downloads this year.
MOST APPLICATIONS TODAY ARE ‘OVER THE TOP MODELS
This means something has got to give, if we are to see networks become the fundamental enabler for the deployment of content and vital services, operators need to find new business models. I’d like to share some brief examples now of business models that are working today – that can provide inspiration for how future local content and application providers can think about revenues beyond advertising.
Key messages: Amazon Kindle is an early example of invisible mobile broadband ************************************************ Slide owner: BNET Customer Business Development Latest update: January 2010 Best before: December 2010 ************************************************ Amazon Kindle is an early example of what we call “invisible mobile broadband”. In this case, the internet player succeeded to attract users in a way few operators do: Kindle sold more (~500k units) in its first year than iPod. Sprint Nextel and AT&T are enablers behind Amazon’s e-book. The operators provide wireless connectivity, invisible to the consumer. There is no direct relationship between the user and the operator – no invoice, hardly any information, and sometimes no awareness of who is providing the connectivity. Amazon pays the operator a share of the service revenues. E-books put light on what coming business models for portable devices may look like.
Telia started out trying to become a content provider, signing up with Universal, Sony BMG etc selling downloadable songs for 99SEK (10EUR) per month. Along comes Spotify, first on PC’s but with the introduction of the iPhone they made it work on SmartPhones, now on Android as well as Symbian platform = basically any phone with enough screen to handle the User Interface. With 7Million songs accessible any time using a Streaming service they have quickly grown to over 7Million users across a number of countries in Europe so far. On phones it is only possible to use the Premium service costing 99SEK, on PC’s one can use a free service that is Ad based (with somewhat lower quality as well). Instead of letting Spotify stay as an over the top service slowly killing their own offering, Telia decided to partner with Spotify. Providing 4.5 Millions (50%) subs in Sweden, a strong brand, QoS functionality and the ability to potentially provide Spotify on their Set Top Box (connected to Stereo!) they are now getting some revenue from Spotify and both are benefiting from the partnership.
Sources: http://mediacentre.o2.co.uk/content/Detail.aspx?ReleaseID=561 http://www.o2.co.uk/abouto2/affiliates/o2media/blockbuster http://www.mobileindustryreview.com/2009/10/o2-top-up-surprises-shows-52-response-rate.html http://www.getmemedia.com/ideas/case-study-pizza-hut-drive-footfall-and-delivery-to-door-with-o2/o2-media.html Pay and Go customers of O2 can play Top-Up surprises game. SILVER <$15 GOLD >$15 Silver game :Customers win gifts such as discounts of EURO 10 on shopping , free photo prints etc. Gold game :Customers win bigger prizes and offers three surprises to choose from (Fragrances, DVDs, free minutes, text messages or browsing) . Retailers and Brands such as Blockbuster pay for ad campaigns and for every offer availed by the customers of O2. 13% of Top Up Surprises players engaged with the Pizza Hut 2for1 special offer. 80% of customers choosing a surprise selected Pizza Hut special offer surprise The Priority Moments Application received more than 500, 000 registrations within the first month of launch
2010-11-10 Mobile Broadband has come to a point where it ’s not only about optimizing technologies and services anymore. It’s also about exploring a whole new way of doing business. The new era of Mobile Broadband requires us to rethink how we innovate, operate, partner and make money. In short, it requires us to Unplug.
Sustainable business models telco perspective for two-sided models-stephanie huf
STEPHANIE HUF VICE PRESIDENT & HEAD OF MARKETING AND COMMUNICATIONS ERICSSON SOUTHEAST ASIA AND OCEANIA SUSTAINABLE BUSINESS MODELS - TELCO PERSPECTIVE FOR TWO-SIDED MODELS www.e-asia.org
APPS - 0 > 15B IN 3 YEARS 5,500,000,000 mobile subscriptions >100 models tablets 15,000,000,000 downloaded apps 200,000,000 smartphones* shipped 2010 3,000 HSPA devices 79% are internet users in the US *excl. Symbian ** Global average for Android and Apple users 300 MB/month/smartphone user** 2,000,000,000 internet users 3,500,000,000 mobile subscriptions 80,000,000 smartphones* shipped 2008 630 HSPA devices 72.5% are internet users in the US 1,460,000,000 internet users 300 mobile MoU
WHAT MAKES AN APPLICATION LOCAL? GLOBAL APPS – CAN OFFER LOCAL EXPERIENCE ON GLOBAL PLATFORM FACEBOOK, YOUTUBE CHANNELS, SALESFORCE, CONTENT, CHANNELS, ADS CAN BE LOCAL LOCAL INFORMATION OR LOCATION DRIVEN REQUIREMENTS - TRAFFIC, HEALTH SERVICES, UTILITIES, E-GOVT, MONITORING AND ALERTS, CONTROLLED CONTENT, M2M LOCAL BUSINESSES - DIRECTORIES, LOCAL BUSINESS & BRANDS
FOR TELCOS - MOST APPS TODAY ARE “OVER THE TOP” <ul><li>APP REVENUE MODELS TODAY BASED ON: </li></ul><ul><ul><li>ADVERTISING </li></ul></ul><ul><ul><li>DOWNLOAD – APP STORE </li></ul></ul><ul><ul><li>SUBSCRIPTION </li></ul></ul><ul><ul><li>TRANSACTIONS </li></ul></ul><ul><ul><li>SPONSORSHIP </li></ul></ul><ul><ul><li>BUNDLE WITH OFFLINE – IE NEWSPAPER, GYM, </li></ul></ul>
“ OVER THE TOP” CONTENT IS SQUEEZING THE TELCOS INNOVATION & DIFFERENTIATION NEEDED TO SUPPORT TELCO INVESTMENT CASE DATA TRAFFIC GROWING 10x BY 2016 <ul><li>VIDEO & APPS </li></ul><ul><li>IMPROVED EXPERIENCE </li></ul><ul><li>SUB GROWTH </li></ul>Cost
SMART TELCOS ARE RETHINKING MOBILE BROADBAND MODELS TIERED PRICING 2-SIDED BUSINESS MODELS
TRANSPARENT MBB BUNDLES EG: AMAZON KINDLE E-BOOK READER PAY PER DOWNLOAD REVENUE SHARE TO OPERATOR revenue share Typically $5-20 per e-book
SUBSCRIPTION PARTNERSHIPS 99SEK <ul><li>99 SEK / month </li></ul><ul><li>Unlimited music on </li></ul><ul><li>phone & PC </li></ul>
TELCO IN THE VALUE CENTER – O2 LOYALTY MODEL, BLOCKBUSTER Downstream Customers Side 2 Upstream Customers Side 1 Telco Service O2 provides a platform for delivering mobile ads and various loyalty programs by retailers Top-up Surprise Services Retailers, Event Organisers and Other Brands Subscribers Revenue Retailers and brand owners provide a share of its incremental revenues with O2 Revenue Subscribers incentivised to recharge frequently and stay loyal to the operator Service O2 delivers mobile coupons under “Top-up Surprises” service.
IT ’S TIME TO... Logistics Sales Marketing Education (blueprint style) Your Business Your Potential Your Assets Your Mind (animated) Customer Care Communications Meetings Anything… Finance Channels Ecosystem B2B
TELCO IN THE VALUE CENTER – FLYNET – IN FLIGHT INTERNET Downstream Customers Side 2 Telco Service Manages authentication, authorization and accounting , billing and revenue sharing with the roaming partners Subscribers Revenue Lufthansa pays revenue share to Deutsche Telekom depending on the adoption rate. Revenue Premium rate service. Service Inflight and Lounge Internet access. Charged on usual mobile bills. Upstream Customers Side 1