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Broadband For Digitization

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Presentation during Broadband World Forum, Dubai 2011

Presentation during Broadband World Forum, Dubai 2011


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  • 1. Booz & Company Dubai, March 14, 2011 Conference PresentationDigitizing MENA EconomiesWinning Broadband StrategiesBy Hadi RaadPrincipal - Communication, Media, and TechnologyThis document is confidential and is intended solely forthe use and information of the client to whom it is addressed.
  • 2. A number of trends are gaining pace globally, driving a shift intelecom market traction Key Communication Trends Increased Device Usability Virtualization of Services  Greater availability of more lifestyle-  Cloud computing adapted devices  Over-the-top media growing in importance  Proliferation of touch screens (e.g. TV, movies, books)  Extended battery life  … Increased Mobility Applications Ecosystem  Extended independence of consumers,  Increasing number of customizable and (e.g. remote work, affordability of travel,) compatible applications  Dependency on supporting technology  More complementary products away from home and enterprise  …  … Technology Savvy Consumers Bandwidth Demand & Supply  Natural demand developing from next  Operators are continually investing in more generation of users (“Generation C”) capacity and upgrading networks  … – VDSL / Fiber deployments – LTE deployments  …Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 1
  • 3. A new perspective of convergence across industries is breakingtraditional silos allowing consumers to benefit from digitization Digitization of Economies Society Digitization will have broad implications on societies and economies Government Health  Making the US power grid 5% more effective Digital Presence through smart grids will save the CO2 Transport Education equivalent of 53m cars1) Broadband  Utilities loose 25-50% of treated water to Infrastructure leaks that could be remedied with appropriate smart infrastructure2) Media &  Congested roads in US cost 4.2bn work Energy hours and 10.6bn l petrol that could be Enter. saved with smart traffic mgmt  4.6bn mobile phones deliver location Smart Cloud Digital information today Systems Goods  Humans generate 100m tweets per day, Retail Industrial creating extensive data on preferences3)  Digital universe “data exhaust” reaching ~35 Home trillion GB 4) (created and processed in the Financial Convenience Services year)  79% of workers depend on internet and telecoms today Sources: Booz & Company analysis 1) IBM 2010 estimate 2) Lux Research 3) Twitter Status 10/2010 4) IDC/EMC estimatesBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 Archive number 2
  • 4. The challenges are rising to efficiently design and deploy thecomponents required for Digital Economies Overall Needs NON-EXHAUSTIVE Smart Systems Digital Presence Digital Goods  Library management systems  Virtual classrooms  Collaborative content software Education  Student information systems  E-learning and distance learning  E-learning repositories  Hospital info. and workflow systems  Electronic Health Ordering Health  Electronic Health Record  Pharmacy portals  Chronic disease devices  E-government management systems  E-government portals  Digital signatures Government  Routing and scheduling systems  Electricity usage and distance Utilities  Smart grid systems control portals  Automatic stock deployment systems  e-stores  Digital books Retail  m-commerce  E-games, m-games, etc. Commercial  Payment processing network Banking  Authentication technologies  Mobile consumer banking  Digital wallets  Traffic flow simulators  E-kiosks Mass Transport  Routing and scheduling systems  Digital tickets  Road charging  Fleet vehicle tracking  Ad performance optimization  Digital voting systems  Digital content (IPTV, VoD, etc.) Media  Audience measurement  Digital advertising Smart systems adding intelligence Digital presence substitution of Electronically accessible digital to technology infrastructure and physical presence through online goods de-materializing traditional back-office processes and mobile communication physical goodsSource: Booz & Company analysisBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 3
  • 5. E-Health services, for example, create new markets by empoweringpatients and enhancing treatment opportunities for providers E-Health - Solutions and Customers EXAMPLES Smart Systems  Health education portals offer Digital Presence effective solutions to create Digital Goods awareness  E-Health programs cater to needs of increasing healthcare consumption • Online / mobile health  Electronic health records information enable quick and increase transparency, enable flexible access fraud detection and save costs Health • Mobile monitoring devices Authority offer new treatment solutions for an ageing society Patient Health Patient Insurance Operator  Support systems  New revenue sources can be (scheduling,…) enable cost- generated from disease effective services management Health care  Clinical decision support Profes-  Tele-diagnostic and tele- Hospital/ systems & e-prescription consultation present cost- Pharmacy sional increase patient safety effective solutionsSource: EU commission, US NIH, Booz & Company analysisBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 6. As adoption curves continue to accelerate, digital economiesapplications could penetrate mass markets in few years INDICATIVEYears Adoption Curves are Accelerating Up and Coming Start-Ups in the35 Digitization Realm  Layar - Augmented Reality on30 smartphone Years to Reach 25% Penetration of  2m users, 1000 active layers, 4000 Population1 active developers25  Fitbit - Digital Self Healthcare  Wearable sensor, collecting caloric20 intake, number of steps, blood sugar level, blood pressure, sleep patterns,15  Green Goose - Digital Life Sensors  Sensors to measure energy consumption, automobile usage,10 water and heat usage 5  TaKaDu - Smart Infrastructure  Locates and predicts water-network events 0Telephone Radio TV PC Mobile Internet Smart Social Digital Phone Media Economies Source: FCC, census.gov, Booz & Company Analysis ? 1) US PopulationBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 7. Digitization solutions are already driving transformation intraditional sectors achieving significant economic benefits EXAMPLES Examples of Digitization Applications Sector Digitization Solutions Example Expected Benefits  Xcel Energy installed 20,000 smart  Smart metering systems meters, connected them via fiber-optic  Save 10% on consumer bills Utilities  Smart distribution systems network, launched website to track power  Reduce peak demand by 15% use and offered dynamic pricing plans  Singapore integrated Intelligent  Real-time direct traffic flow Transportation System to automatically  Automatic systems for reducing  Reduce car fatalities by over 15% Transportation charge drivers for using congested roads, congestion  Reduce congestion time by over 20% adjust traffic lights, measure average  Intelligent public transportation speeds and provide parking-guidance  Intelligent real estate solutions to  Effectively manage larger  Songdo Smart City in South Korea manage building energy populations developed applications to remotely control Real Estate efficiency, security, utility supply  Reduce congestion times appliances, receive remote healthcare and  Remote appliance and security  Save on energy needs digitally interact with gov’t control  Provide remote social services  Remote systems for diagnostics  Ability to electronically deal with 750  Federal Government E-Health Program of chronic diseases million prescriptions per year Health developed electronic prescription system  Electronic health records  Improved supply of pharmaceutical on a national scale  Intelligent emergency response productsBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 6
  • 8. Digitization will swiftly drive the need for high-bandwidth nextgeneration broadband such as FTTx and LTE Emerging Applications Requirements Tele Medicine Tele Learning Interactivity Level Multi-location Collaboration Virtual Sports Utility Computing Grids Social Networking Virtual Laboratories Email Rich Media HD/ Next Generation TV Browsing Video Conferencing 64 - 256 Kbps 512 Kbps - 2 Mbps 20 Mbps - 1 Gbps Effective Bandwidth Access Type Narrowband 1st Generation Broadband Next Generation Broadband Typical Technology Dialup, 2G DSL, 3G FTTx, LTE1)1) Long Term Evolution NetworksSource: Booz & Company analysisBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 7
  • 9. In particular, Video could grow to represent more than half of thetotal internet traffic Consumer Global Internet Traffic YouTube Total Uploaded Video (‘000 TB x Month)(Hours per minute) (2005-2009) 32.128 35 35 30 24 25 20 20 16 25.168 15 10 +40% 17.751 Video 10 6 8 (55%) (PC, TV, ambient) 5 CAGR = 70% 0 Time 18.600 13.430 H1 07 H2 07 H1 08 H2 08 H2 09 H1 10 H2 10 (53%) US Average Download Minutes of Video 9.242 12.726 (50%) 800 per User per Month 732 (2005-2009) 5.283 9.629 8.755 (42%) File Sharing 600 7.722 (30%) 2.804 (31%) CAGR = 24% 6.021 6.248 400 318 +876% 1.251 5.022 (34%) 208 (39%) 4.083 Internet 200 142 3.345 4.016 4.748 (Web, Mail, 75 95 2.421 3.110 (15%) (16%) 1.425 1.868 (19%) (17%) Gaming, Voice) 0 CAGR = 27% 2005 2006 2007 2008 2009 2008 2009 2010 2011 2012 2013 Source: Comscore, Cisco, Booz & Company analysisBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 10. Digitization breadth and scale could span geography, connectingpeople, institutions, and devices … Breadth and Scale of Digital Economy Services Scale of coverage City level City/ State Digital Digital Health Government City-wide connected E-Education Neighbourhood District transportation Work Local connected industry transportation Home Leisure level Industries Finance/ E- commerce Neighbourhoods Home level Smart Home Breadth of integrated services Connecting people Connecting institutions Connecting devices Connecting people to devicesEnablers Smart ICT Solutions ICT Infrastructure Digital Communities  Deployment of smart systems that  Build up of pervasive and intelligent  Sophisticated and innovative use of ICTDescription allow users to access resources and ICT infrastructure by integrated communities capabilities more efficiently3/16/2011Booz &Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptCompanyMarch 2011 9DATE
  • 11. … entailing the need for high speed broadband even in lessdense/rural areas Importance of High Speed Broadband in Rural AreasNON-EXHAUSTIVE Description Example Initiatives  Telemedicine offers the opportunity  A tele-pathology system developed in Japan allows Improved to bridge the gap between pathologists using high-definition video and remote- Healthcare healthcare services in rural and controlled microscopes to examine tissue samples urban areas from patients living in rural areas  South Korea developed the Education Broadcast  E-learning and online video tutorials Better Service (EBS) to help children in rural areas better can be a powerful tool to improve Education prepare for a national aptitude test through access to educational services in rural areas free video tutorials  The US government is active in promoting tele-  High speed broadband enables tele- Employment working for the federal government in order to working in rural areas and creates Opportunities promote employment in rural areas as well as reduce rural entrepreneurs traffic congestion  The Rural eGov project of the European Union aims  Broadband allows residents and Access to Government to study the needs of SMEs in rural areas for businesses in rural areas to have Services governmental and public services and offer policy access to e-government services recommendations to EU governmentsBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 10
  • 12. However, a digital divide still exists even in developed markets Broadband Household Penetration Urban vs. Rural - (in %) - 2009 Urban Rural 39 +15 28 28 26 24 +4 24 23 23 21 +14 +10 +7 16 16 16 14 14 +2 14 +7 9 France Italy UK Spain Germany Sweden Greece USSource: iDATE Consulting & Research, 2009Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 13. Digitization in MENA is expected to accelerate, driven byincreasing maturity along four enablers Digitization Momentum in the MENA Region 1 Improved Governments’ 2 Advent of Next Generation Readiness Broadband  Government in several MENA countries  MENA operators building next have reformed and are ready to generation broadband infrastructure implement long-term planning of and have reduced connectivity costs national policies by 40% since 2008  Governments now pushing for  Operators designing supply side implementation of ICT solution and e- initiatives and are developing tailored Programs across ministries/ agencies sectoral digitization solutions MENA Digitization Trends 3 Growing Consumer Demand 4 Increased Adoption of ICT by  MENA consumers accustomed to Enterprises online and mobile services with an  Adoption and spend on ICT services expected yearly increase in apps by Enterprises in the MENA on the rise - downloads of 44% till 2014 growing at twice the average of global peers  Penetration rate of fast fixed and mobile broadband connectivity to rise to  MENA Enterprises integrating 24% (households) and 34% (users) by advanced ICT solutions without the 2014 respectively hurdle of legacy systemsSource: Booz & Company analysisBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 12
  • 14. Regional governments have significantly prioritized ICT on theirpolicy agenda and national development plans EXAMPLES Digitization Momentum in MENA – Governments National Development ICT Demand ICT Vision and Strategy ICT Investment Plans Stimulation GCC ICT Investments2 National Development National ICT Strategy (2010-2012) Plans of Jordan 2012 e-Maroc 2010 KSA 90 Abu Dhabi Economic UAE 46 Vision 2030 ICT2015 Kuwait 17 Qatar 15 Qatar National Vision E-Government Oman 8 Total 2030 Strategy $180 Bn Bahrain 5 Kuwait 5- Year Development Plan MENA region recorded Government authorities are ICT authorities in region fastest increases in releasing significant are actively influencing Bahrain Economic Networked Readiness funds to develop and the increase in ICT Vision 2030 Index1, reflecting efficiency integrate ICT within demand through various of ICT strategies government entities initiatives1) Global Information Technology Report 2009-20102) GCC ICT Infrastructure Report by Kuwait Financial Centre (Markaz)Source: Booz & Company analysis3/16/2011Booz &Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptCompanyMarch 2011 13DATE
  • 15. Regional telecom operators are offering Next GenerationBroadband, at declining prices Residential ADSL Availability Broadband Prices1) as % of GDP per Capita (PPP) (Selected MENA Countries) (Selected MENA Countries) 4 Mbps 8 Mbps 10 Mbps 16 Mbps 24 Mbps 15.5% Egypt 9.0% Bahrain 10.3% Egypt Jordan 7.0% Jordan 8.5% Bahrain 4.6% Kuwait 7.3% KSA 5.0% Lebanon 4.7% Morocco Oman 4.0% Oman 4.7% Kuwait 1.6% Qatar 2.1% KSA Qatar 1.5% 2008 UAE 1.8% UAE 1.6% 2010  Telecom operators and ISPs have rolled out an  Broadband prices in the MENA region have infrastructure capable of providing high connection significantly dropped over the last two years enabling speeds to users people to select faster connections1) Annual Broadband prices ae for 1Mbps connectionSource: Arab Advisors, Booz & Company analysis3/16/2011Booz &Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptCompanyMarch 2011 14DATE
  • 16. MENA consumers are accelerating their adoption of broadbandand smart phones … MENA Customer Technology Adoption Fixed Broadband Mobile Broadband Smart Phones Adoption in Users in MENA Users MENA MEA (2009-2012) (Millions) (2009-2014) (Millions) (In ‘000s) (2009-2014) +31% 107 26,141 74 77 +36% 21,455 67 +73% 17,127 54 66 12,875 37 39 8,845 20 22 5,661 7 12 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014  Broadband Households Penetration is  Smartphone sales CAGR over 2010-2014 over 60% in the UAE, 30% in KSA, and  User penetration should leap from 2% range between 14% (KSA) and 28% (Egypt) should reach 24% in the region by to 34% from 2009 to 2014  Smartphone users are 3x more likely to use 2014 broadband1) Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, KSA, Syria, Tunisia, UAE, YementSource: Informa, WBIS 2009 Ovum, Gartner, Booz & Company analysis3/16/2011Booz &Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptCompanyMarch 2011 15DATE
  • 17. … and are increasingly more sophisticated and adept in digitalmedia MENA Customer Sophistication Indicators Mobile Apps Downloads Most Common Ratio of Facebook (‘000)(2008-2014) Internet activities Users in MENA (% of MENA respondents) (2009) (% of Population) (2009) 1,234.3 1% Listening to radio In May 2010 Facebook had around 0.3% Iraq +44% 1,036.7 3% VOIP Calls 15 Mn active users in the MENA region 2.7% Egypt Downloading music, 824.8 3% videos… 4.9% KSA 619.6 4% Watching videos / TV 425.3 6% Online games 8.6% Jordan 249.9 8% Emails 8.6% Tunisia 136.5 14% Social networking 16.6% Lebanon 15% Chatting 2008 2009 2010 2011 2012 2013 2014 43% Getting information 21.9% UAE  Number of apps downloads will increase at  MENA internet consumers are active users of  Facebook penetration of internet a yearly rate of 44% – 15% of which are new online applications: games, video users is amongst the highest in the paid streaming, VoIP, etc. worldSource: Ovum Mobile Apps Forecast 2010, Middle East & North Africa Twitter Demographics & User Habits Survey August 2009, Arab Media Outlook 2009-2013, SpotOnPR3/16/2011Booz &Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptCompanyMarch 2011 16DATE
  • 18. To capture digitization opportunity, Telcos need a clear positioningon infrastructure, applications, and monetization business models How to Win the Broadband Game? Strategic Imperatives 1 A Right to Play 2 A Right to Compete 3 A Right to Win Broadband Broadband Business Models Infrastructure Ecosystem  Demand-driven FTTx rollout  Positioning in the broadband  Infrastructure  Harmonized investment in ecosystem deployment business Wireless broadband (WiFi,  Horizontal Services models Wimax, LTE)  Vertical applications  Innovation stimulation  Government investment support partnerships (e-education, m- business models / Demand stimulation ? health, etc)  Monetization business  Content partnerships modelsBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 17
  • 19. Operators mass broadband technology strategy will depend on anumber of market specific considerations CONCEPTUAL Integrated Infrastructure Perspective: Key Trade-Offs Urban Suburban Rural 1 Right cut-off-point? Technology Commercial Availability Coverage Which technology? 100% (VDSL vs. FTTH) Density Ongoing FTTx 0% ~2013 LTE ~2016 full deployment 2 Fixed-Wireless-Mobile 3 complementarity? ongoing Rural copper 3G substitution? 2G ongoing possibly discontinued in 2016 4 2G/3G switch-off? Copper ongoing 5 ADSL2+ Case for extension of ADSL2+ capability?Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 18
  • 20. A clear positioning is needed in the broadband ecosystem tocapture the market opportunity Broadband Ecosystem & The Battle for future Profits Content Providers Ho Service Providers s r izo ce nt vi Over-The-Top Providers r a ls Content se er al vi tic c es er , A rvice eting e-gove V Payments En Se Mark s Me tainm es Mobile ter or dia en e-t rnment St ital Sm ra d s & , pp ar ou e rce ns tG Dig Cl rvic me po rid m e-ed Se -co BS t rt uc atio m L , , n merce Co-opetition battle Over the Top Services e- comcial for future profit e-health so erce comm pools Pads & Tablets Home Automation TVs & STBs Devices Gaming Cell & Smart phones Computers Systems Integrators / Systems Integration IT Services Operators Network Device Players Managed Services Network Operations Connectivity Services Software Fiber Switches Routers Servers Infrastructure Copper m-to-m Devices Satellite Wireless MobileBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011 19
  • 21. OTT players are capturing value in the new ecosystem by securingthe right positioning and crafting attractive value flow models Categories of Application Leaders Philosophy Own natural Distribute Bridge to User generated points of Value capture unique content physical world content concentration model A Commerce Transaction-based Music Store B Customer Super Pass Subscription-based Analytics C Super Pass No examples found Advertising-based Music Store Monopoly on particular Creating own format Leverage efficiencies Develop a framework aspects of consumer’s and developing an of online world for to house user interests and ecosystem around productivity in generated content concentrated branding the format physical world Limited models yetBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 22. OTTv players, for example, are capturing growth in video throughcreative business models and efficient partnering Examples of OTT (over the top) Offers US Video Content Sites - April 2010 - Google TV .com Apple TV Unique Viewers Videos / Viewers - in mn. - - per month - Google sites/ 136 96 Partners YouTube Hulu 39 25 Aggregate all Microsoft sites 40 16 Provide Provide high video content Professional quality video Viacom Digital 39 10 across Mission content of content via platforms stations via iTune store Yahoo! Sites 50 8 (Broadcast TV, the internet (sell through) YouTube, Web) Vevo 44 8 Set-top box Streamed content Set-top box linked connected to online on PCs to iTunes store Fox Interactive 44 7 Description Internet Limited Audio and video CBS Interactive 39 8 (or in Sony TVs) advertising content Turner Digital 33 9 Business Targeted Targeted Hardware sale + Model advertising advertising share of content Facebook 41 6 Status To be launched ~50m viewers Launched 2005 TV Format Invaders TV Station own SitesNote: Excludes video server networksSource: ComScore, Insight Express, TopTenReviews.com, Booz & Company analysisBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 23. Players are threatening telcos’ positioning either through owningunique interfaces or providing core telecom services Illustrative Scenario of an Applications Player’s EXAMPLE Strategy to Compete on Telecom Operator’s Turf Non-Telecom Services Core telecom Services  Yahoo!, with its applications and content rich portal Attract with attracts customers from Operator’s portal and has Appealing cannibalized Operators’ email service Free Internet  Skype offers free pc-pc internet calling Portal calling  Yahoo! offers free toolbar and suggests making Yahoo! as customers’ homepage  Yahoo! further solidifies its relationship with  Skype offers a simple, convenient, and consumers by locking them into subscription based cost-effective way for people Enter into Cheap VoIP services - such as personal, classifieds etc anywhere in the world to communicate Contract Calls  Yahoo! partners with other service providers, such as from their computers over the Internet Expedia, to offer travel services to landlines and mobile phones  Yahoo! partners with billing agency (Paypal etc) to 1 process customer transactions  Skype offers mobile apps that enables Start Billing Convergence  These payments could be per transaction basis (flight VoIP applications over mobile with Mobile booking) or on monthly basis broadband  Yahoo! enters into partnership with customer care 4Offer Customer firms to manage post-sale customer service on transactions such as flight bookings, a call center to Service provide better customer service. This takes away Telecom Operator’s last contact point with customers Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.ppt March 2011
  • 24. To stay relevant, Telecom operators need to keep control of corecomponents: Digital ID across devices and location awareness Network providers had limited reaction … …despite having strengths in key areas Discussion Single Login  Telecom operators reaction to date has generally been limited  Operators, in general, have so far reacted to such developments through actions such as: Digital ID With commerce - – Trying to sustain business by banning emerging products (e.g. T-Mobile blocks Skype usage on mobile phones) – Profiting from increasing innovation of other players by forming alliances to (e.g. AT&T - iPhone exclusivity) Across devices – Offering additional products and services by moving into quadruple play (cable television, broadband internet access and fixed line and mobile telephony) with premium content Social context - Social ID Location awareness Area of strength forSource:, Booz & Company analysis network providerBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 25. Time is not to Telcos’ advantage - OTT players have already startedstaking claim on core components, such as digital and social IDs Strategic Thrusts To Gain Control of Sources of Value Digital ID Social ID Location Single Login With commerce Across devices Social context awareness Facebook has leveraged Dominant social Introduced its dominance in social Facebook ‘Facebook ‘Facebook App’ networking to establish a networking ‘Facebook Connect Credits’ across devices single login and include platform Places’ location awareness Google maps; Google enjoys device ubiquity via Android but Google social Android location Google Pay has had limited success search awareness in the social space capabilities Apple has the strongest Ping - a social walled garden and has network for music recently made a foray in social networkingNote: See appendix for more detail on player strategies Relative position ofSource: Booz & Company analysis strengthBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 26. Facebook has leveraged its dominance in social networking toestablish a single login and include location based offerings Digital ID Social ID  Facebook Connect allows users to log  Dominant Social Network - More than into external sites while adding basic 500 million active users with 50% of FB features users active daily  Users carry their FB social graph and  Users spend over 700 billion minutes per FB identity around the internet month on Facebook  Facebook Places is a location based  Facebook Credits are virtual service that currency that users use to buy virtual – allows users to update their location goods in games and applications on the and connect with contacts in that area Facebook Platform. – “Places Deals", allows users to find local deals  Facebook receives 30% of all revenues  Facebook Applications - Over 200  Social Search tie up with Microsoft’s million active mobile users Bing.com allows search relevant to user’s social circle and can be location  2nd most downloaded app on the iTunes based. Store. Comes pre-installed on AndroidSource: Secondary Research, Booz & Company analysisBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 27. Google has leveraged platform dominance- Android OS andGmail- to provide a digital ID Digital ID Social ID  Google Social Search allows users to  Single Sign On, Gmail allows users to find content relevant to their social circle log into all Google websites including (Twitter and Gmail contacts) by logging Blogspot, Youtube, Google Apps and in through a Gmail ID. Google Checkout  Filters searches displaying contacts’  Google Checkout is a single sign in reviews and recommendations first Digital ID and an e-commerce aggregator as it allows secure online shopping straight from Google Search  Google Maps offers a route planner for traveling by foot, car, or public transport and a location based urban business locator for numerous countries around  Google’s strategy is to make Android a the world. Is currently the most popular ubiquitous platform across devices global location based searched engine. – dominant mobile OS (25% smartphone market share)  “Location Awareness” uses Google – Android also integral to Google TV Maps’ location based services on the – Android forms the basis of the Android mobile platform coupled with Chrome browser Google’s social search capabilitiesSource: Secondary Research, Booz & Company analysisBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 28. The right to win for telcos is a function of the right businessmodels for investment, innovation, and monetization Business Models Infrastructure  Network Sharing ? Investment Business  Ventures / Public-Private Partnerships ? Models  Content Delivery Networks ? Market demand  Business models with service providers – Minimum Guarantees ? Competitive pressure Innovation Business – Tiered Quality of Service ? Models – Revenue Sharing ? Service Attractiveness  Engaging the developers community Supply competitiveness  Flat Fees ? Monetization  Pay per View/download/Use ? Business Models  Advertisement funded models ?  Combination ?Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.ppt16-Mar-11March 2011 27
  • 29. In the game of changing business models, operators shouldleverage their key assets Assets of Operators in Value Chain Battle + + + End Customer Consumer Knowledge Digital ID Infrastructure Relationship  Direct customer interface  Basic contract data enable  A single digital identity  Owned/operated due to contractual socio-demographic selection across platforms infrastructure relationship  Data packet inspection  IP detection enables  Bi-directional communication  Billing and collection provides behavioral insights Seamless identification means, also as key enabler  Location data enable across platforms for sustainable customer location profiles relationships and insight generationSource: Booz & Company analysisBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011
  • 30. Thank You Hadi Raad Principal hadi.raad@booz.com www.booz.comBooz & Company Hadi Raad - Broadband for Digitization vBBWF110314.pptMarch 2011

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