TADS Plenary Celcom Suresh Sidhu

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Suresh Sidhu COO Celcom opening keynote at TADS 21-22 Nov 2013 Bangkok "Operators Need New Telecom Applications and Services to Survive!"

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TADS Plenary Celcom Suresh Sidhu

  1. 1. Day 1 Opening Address: Operators Need New Telecom Applications and Services to Survive! Suresh Sidhu Chief Corporate & Operations Officer Celcom Axiata Berhad Presentation at Telecom Application Developer Summit 21st November 2013
  2. 2. Mobility has been Nothing Short of a Revolution For the World No longer an accessory for a select few but an everyday device… 1989 2000 2013 ...leading to increased mobile penetration across developed and developing nations High end devices significantly multiply traffic Mobile-cellular subscriptions, 2001- 2011, world and by level of development Source: Cisco VNI Mobile Forecast 2013 BDPM Source: ITU World Telecommunication /ICT Indicators database. Company Confidential Slide 1
  3. 3. But A Second Revolution Is In Play: User Behaviours Shifting From ‘Walk & Talk’ To ‘Sit & Play’ Ubiquitous wireless access, increased smartphone adoption & freemium OTT’s driving behavioural changes Voice and SMS Intensive Mobile phone usage behavior shifts from ‘walk and talk’ … Data and Smartphone Adoption …to ‘sit and play’ … via range of smartphones across various price points Traditional voice … … and SMS usage are shifting BDPM Ubiquitous Data Connectivity Shifting towards an “ALWAYS-ON” culture… … with a wide variety of freemium OTT type content and social networking apps 2
  4. 4. Increasing Data Consumption Over Small Screen Devices High mobile penetration and effective phone bundling fuelling the rise of mobile internet adoption Selected study Malaysia Mobile Connections Market Profile Smartphone penetration (forecasted) Malaysia Mobile connections (in million) 23% 28% Legend : Non-smartphone Smartphone 32% 36% 39% 43% 46% 17.1 21.7 14.9 19.4 12.6 8.0 10.0 26.6 26.1 26.3 26.4 26.3 26.1 25.7 2011 2012 2013F 2014F 2015F 2016F 2017F Source: Informa IC Intelligence, Celcom Analysis At 140% mobile penetration but a mere 30% smartphone penetration, small screen data consumption is yet to be fully exploited Source: Based on 2012 statistics from Malaysia Communications and Multimedia Commission BDPM 3
  5. 5. Increasing OTT Adoption Impacting Traditional Revenue Streams As We Know It… Increasing adoption of OTT voice & messaging apps… … continues to impact traditional voice & SMS revenues With increasing adoption via mobile devices Voice and SMS Revenue Trend in Malaysia 51 50 RM mil 46 71% of Facebook’s 1.15b monthly active users connect on mobiles 40 30 30 20 6 4 10 1 22 11 8 4,100 4,050 17 16 4,150 28 23 4,195 4,200 37 40% of Skype’s 300m unique monthly users connect on mobiles 4,000 3,950 3,954 3,900 1 3,850 3,800 Q4 2011 0 % of Global Internet users 40 4,250 1 2 3 4 5 6 7 8 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 9 Years launched Source: BCG analysis, Sofrecom Analysis Note: Figures based on number of registered users Source: Quarterly Reports, Celcom Internal Analysis 4
  6. 6. The Challenge Is To Sustain & Increase Mobile Voice & Messaging Revenues While Embracing An All IP World Loss of voice and SMS revenues as mode of communication shifting away… Hours spent communicating weekly1 40 … increasing time spent on mobile but declining traditional voice communications as we know it Minutes spent per day 50 Social networking 44 SMS Email 30 Video Gaming 40 Mobile voice Reading Browsing Landline voice 30 Audio 20 20 20 12 (27%) 10 10 0 0 1990 1995 2000 2005 2010 7 (33%) 7 (33%) 2011 Messaging 10 (23%) Voice 2016 1. Based on 15-25 year olds mobile customers in the UK Source: Ovum, Analysys Mason, BCG analysis BDPM 5
  7. 7. Operators Need To Stay Relevant In The Marketplace... Need to embrace a culture of shorter product lifecycles and turn-around times, a culture of trial and error with shared risks with partners Lean Product Lifecycle Management 4 C 1 Challenges Operators Face Today 3 Requires new business models and innovative pricing mechanisms in order to cater for new services & apps Lack of innovation from within Lack of in-house innovation and rely upon external elements such as vendors and partners for out of the box solutions Dated business models and pricing mechanisms 2 Gap in apps developer skill-sets Application & Content development requires a different set of skill sets which operators need to embrace and nurture 6
  8. 8. An Adversarial Situation Today... Network Service Providers and OTT players at odds Customer Network Service Provider OTT Players • Multiple Access medium • Falling Profit Margins • Large Hardware CAPEX/OPEX Outlay • Want to monetize Apps & Content • Ride on any access medium (LTE/3G/WiFi) • Increasing Global Adoption • Primarily software driven – “made once download many times “ • Available across mobiles, desktops, tablets SITUATION TODAY BDPM • OTT’s seek unfettered access, net neutrality and direct customer relationships – Network Operators are relegated to “dumb pipes” 7
  9. 9. ...Needs To Be Turned Into A Win-win Revolution will peter out without a common economic union WHAT OPERATORS BRING WHAT DEVELOPERS/OTTs BRING Localization Innovation Financial Strength Regulatory Management Distribution & Retail Presence Faster Time to Market Global Selection Billing & Software Development Kit Preferred Content Multi Access Networks Lower Risk to Operators 7 8
  10. 10. What Is Needed: A Balanced Tri Party Ecosystem Telco operators, OTT players and Developers play a role to support an ecosystem beneficial to all including the consumer TELCO OPERATOR OTT BRANDS • Billing • CONVENIENCE • Local Information • Distribution • QoS/QoE • RELEVANCE • GREATER SELECTION • Single System Convenience • Wide user base of adoption • Social network integration DEVELOPERS • Speed to Market • Low Risk • Always Fresh • Relevant Local Apps BDPM 9
  11. 11. The New Reality… TELCO OPERATOR STILL NECESSARY, BUT VIEW POINT NEEDS TO SHIFT • From charging per minute to share of minute-based model • From walled garden to partnerships • Focus shift from utility to experience DEVELOPERS • CONVENIENCE • RELEVANCE • GREATER SELECTION NEED TO BE AGILE AND WORK WITH BOTH PARTIES • Operators are probably best partners for local or unique cultural needs • OTT brands are the best fit for global marketplaces OTT BRANDS NEED TO FIND WIN-WIN • Operator partnerships are necessary to ensure customers get advantage of the latest technology • The shift to an all data world will not happen without large amounts of CAPEX spent by operators • Solid distribution partnerships will also ensure sustainable future and better monetization BDPM 10
  12. 12. The Celcom Approach… Initiatives moving to create a Tri-Party Ecosystem Adopt and build own brand services - Eg. Escape, Buzzaar Build Alternatives with Partners Eg. Kolony Groom and provide opportunities for App Developers NEXT STEPS Build OTT-like elements into core elements (In discussions) Embrace OTT via charging and partnerships BDPM TIGHTER GO-TO-MARKET WITH CONTENT AND APP DEVELOPERS 11
  13. 13. THANK YOU

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