Wireless Broadband - Building the Eco-System

Dr. Mazlan Abbas
Chief Research Director
Wireless Communications Cluster
MIMOS BERHAD

www.mimos.my Copyright © 2009-2010 MIMOS Berhad

5 objectives that were considered by the Ministers to be
crucial for a successful broadband economy in the region.
Widen broadband connectivity
Bali Action

Provide a secure, safe and sustainable environment thru ICT
initiatives
Facilitate effective convergence of services
Plan

Encourage development of content and applications

Develop human resource capacity


The Change is Inevitable


“We create the Internet” “We use the Internet” “We live and breathe in
the Internet”

Create Use Live


A Day in the Life of Mobile
Broadband User


The Worldwide Trend


A Broadband Nation
Need A Healthy DNA


Broadband Network
Devices
alone is insufficient
to transform the
economy
Eco-
system
DNA
Applications Networks

We Need the Right DNA!

Manufacturer

Product
House System
Integrator

Telco
Reseller &
R&D
Distributor

Users

Applications Content
Developer Content Aggregator
Provider
App Stores


The Dumb vs Smart Pipe
Who Controls the Customers?


Who controls and owns the Customers?
Operators or Device Players?

Apple released:
• Jan 2007 – iPhone
• July 2008 – iPhone 3G
• June 17, 2009 – iPhone 3GS
• April 3, 2010 – iPad
• June 24, 2010 – iPhone 4

1.7 Mil iPhone 4 sold in 3 days
> 225K apps
3 Millions iPad Sold
> 11K iPad apps specific
Within 80 Days!

[As of March 2010 – Apple downloads @ 350 apps per sec vs Nokia download @ 22 apps per sec]

Market Share ≠ Downloads

Choosing The RIGHT Business
Model


Option #1
1. Telco-Branded
2. Main Content Provider (CP)
with Owned Content

100%
$ 1.00
Telco

60% to 70% Telco CP 30% to 40%

$ 0.60 $ 0.40
Marketing
CP CP cost
absorbed by
www.mimos.my Telco
Copyright © 2009-2010 MIMOS Berhad

Option #2
1. Telco-Branded
2. Content Aggregator (CA) which
Do Not Own Content
Telco
100%
$ 1.00

CA

60% to 70% Telco CA 30% to 40%

$ 0.60 $ 0.40
Marketing
cost
CP CP CP CA
absorbed by
Telco $ 0.20 $ 0.20
www.mimos.my Copyright © 2009-2010 MIMOS Berhad X% Y%

Option #3
1. 3rd Party Branded
2. CA with Owned Content
Telco
#2
100% $ 1.00

3rd Marketing
CP
cost
absorbed by
CP 50% Telco 3rdCP 50%

$ 0.50 $ 0.50
Telco
#1


Option #4
1. 3rd Party Branded
2. Content Aggregator (CA)
Telco which Do Not Own Content
#2
100%
CP $ 1.00

3rd
CA
CP
Marketing
cost 50% Telco 3rd CA 50%
absorbed by $ 0.50 $ 0.50
CA Telco
#1
CP 3rd CP

X% $ 0.25 $ 0.25 %
Y

Android Market

Windows
App Store
Marketplace

Verizon Media Blackberry App
Store World

Mobile
Telus Mobility App
Store App Stores Ovi Store - Nokia

PlayNow Arena –
Symbian Apps
Sony Ericsson

Samsung App PocketGear App
Store Store


Consumers increasingly
want to access the same
Internet content and
services on their mobile
phones that they can
from fixed access/PCs


A survey from Nielsen Online among
European mobile Internet users
showed a higher proportion accessing
social networks than ever before

The UK saw the highest increase, with
2 million people accessing social
networks from their mobiles, a 249%
increase on last year


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[Facebook Facts: March 2010]


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[Facebook Facts: March 2010]


App store/web service usage will
increase as the installed base of
smartphones grow.

The rise of powerful smartphones
providing a genuinely pleasing user
experience is encouraging people to
access web content


Net Traffic Exponential
Growth!
1% Rule
(Internet Culture)
One will create content, 10 will
"interact" with it (commenting or
offering improvements) and the other
89 will just view it.

90-9-1 Principle
1% of people create content, 9% edit
or modify that content, and 90% view
the content without contributing.
[Sysomos analyzed over 2.5 million YouTube videos that were embedded in blog posts between July and December 2009.]


According to Apple, 58 million iPhone OS devices
have been sold worldwide through September
2009. Of those, it is estimated that just over
40%, (24 million) are iPod Touch devices.

Apple is using the iPod Touch to build loyalty
with pre-teens and teens, even before they have
their own phones (think: McDonalds' Happy
Meal marketing strategy).

When today's young iPod Touch users age by five
years, they will already have iTunes accounts,
saved personal contacts to their iPod Touch
devices, purchased hundreds of apps and songs,
and mastered the iPhone OS user interface.

This translates into loyalty and switching costs,
allowing Apple to seamlessly "graduate" young
users from the iPod Touch to the iPhone.

And now from iPhone to iPad….

The difference in growth rates can be attributed to the App Store providing better
monetization possibilities for application developers than Facebook did through its
first 18 months.

Developers, like all rational companies, pursue markets where the path to revenue
generation is clear.

Broadband – The Malaysian
Approach


Drivers Barriers
Technology Spectrum/Capacity

Slow Internet Demand Low ARPU / Business Model

Limited Fixed Network Coverage

Bridging the Digital Divide Low Literacy Rate

Maturing Mobile Market.
Awareness
Operators seek growth.

Governments Governments

Devices Devices


ADSL > 1.5 M
Wireless > 1 M
Cellular Phones > 100%


Technology
Area Population
Choice
FTTH, ETTH, VDSL, HSPA+,
Zone 1 13,318,703
WiMAX

Zone 2 5,499,180 ADSL2+, HSPA+, WiMAX
As-to-date: 37 % (June, 2010)
Zone 3 8,911,813 ADSL, HSDPA, WiMAX, etc
Total 27,729,696

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Zone 2 + Zone 3
= 14 Million (50%)


Close to 3.4 Billion people live in Rural Area (World
population 6.7 Billion)

In Africa about 70% and in Asia 60%

Often there is NO communications service available

Characteristics of a potential village subscriber
• Income less than USD 3 per day
• Awareness and education level is low
• Lack of basic infrastructure such as power, roads, etc

www.mimos.my Copyright © 2009-2010 MIMOS Berhad 3

Knowledge comes from information
Information is Power
Often, we’ve more power once Connected
Sadly 3.5 out of 5 Malaysians DO NOT
haveaccess to this power


•
Socio-economic value of ICTs

3

2

•

•
1
•
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•

Time

1 3 VALUE GAP
ACCESS GAP
• Improved service • Relevant content
delivery. • Platform for
business ecosystem
USER
EXPERIENCE USER
ATTACHMENT

2
ADOPTION GAP
• Easy to use
internet device
USER
CONFIDENCE

Digital Divide must be tackled from a holistic approach rather than
hardware or connectivity alone

• Aggregating information
dissemination to Rakyat

• Enhancing reach in the
underserved communities


INFO @ A CLICK

• Simplifying the
Internet Information
Access
• Affordable
• Internet Information
Anytime, Anywhere,
Anyone

SERVICE DELIVERY


[Jen-ii™ ID No: 09-00049-0101]

[Idola ID™ No: 09-00050-0101]

•

[Jen-ii™ ID No: 09-00049-0101] •

[Idola™ ID No: 09-00050-0101]

Alternative
Media Intelligent Service
(WWW) Delivery Platform
Mainstream
Media

Government
Services
WiWi™

Jen-ii iDOLA iDOLA2


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Wireless Broadband - Building the Eco-System

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