2. 2
The Digital Revolution
“The Digital Revolution refers to the advancement of technology
from analog electronic and mechanical devices to the digital
technology available today. The era started to during the 1980s
and is ongoing. The Digital Revolution also marks the beginning
of the Information Era.”
-Techopedia
4. 4
Vinyl Records gave way to CDs, then MP3’s and now streaming audio
VHS tape gave way to the CDs, then DVD and Blu-ray and now streaming video
Pay-phones gave way to Cell Phone
Film photography transitioned to digital photography
Mail evolved to E-Mail
Last 20-30 years:
5. 5
Digital Revolution: Information Storage
1980 : Less than 1% of the world’s information was in digital format
2002: The year when digital information storage surpassed analog
storage format
2007: 94% of Information was in digital format
2014: More than 99% was in digital format
6. 6
Digital Revolution: Information Storage
World Information Storage Capacity:
1986: 2.6 (optimally compressed) Exabytes
2014: ~ 5000 exabytes (5 Zettabytes)
7. 7
Digital Revolution: Access
Free transfer of Information
Easy access to Information which was previously difficult or impossible to
access
Digital Revolution changed how the world functions and communicates
8. 8
Digital Revolution: Internet Users
Around 46% of the world population has an internet connection today. In
1995, it was less than 1%. The number of internet users has increased
tenfold from 1999 to 2013. The first billion was reached in 2005. The second
billion in 2010. The third billion in 2014.
10. 10
Digitization
Defining ‘digital’ Digitization at its simplest means the conversion of
analogue information into digital information. As digitization capabilities
extend, virtually every aspect of life is captured and stored in some digital
form, and we move closer towards the networked interconnection of
everyday objects. The impact of this is a real-time global exchange of
information between multiple connected devices (fixed and mobile).
11. 11
Digital Revolution: What does this Mean
for Businesses?
Businesses that ride the tidal wave that is the digital revolution are
steadily wiping out those that don’t like Blockbuster.
Competitive Edge offered by Digitization:
Multiple employees can access the same document from anywhere at the
same time instead of one at a time for physical documents
Greater integration of business documents
12. 12
Digital Revolution: What does this Mean
for Businesses?
Application of classification / indexing for easier access management
Streamlining Internal as well as external business processes
Streamlining business operations with applications like Enterprise Resource
Planning
Redefining customer engagement
Create new business models
13. 13
Digital Revolution: Impact On Telecom
Operators
Telecoms that adapted the digital gained huge competitive advantages:
Access to customers, Ease of use, User experience, Features, etc
Streamlined internal processes
Position themselves as innovators
Telecoms not taking advantage of the digital are at a huge disadvantage
Evolution of INTERNET COMPANIES and OTT PLAYERS
15. 15
INTERNET COMPANIES
In simplest terms, an internet company is a company which bases its services
on the internet, usually with little or no physical service provision.
17. 17
OTT Companies
The OTT service providers deliver audio, video and other media over the
internet and bypass the traditional operator’s network. Since, the OTT
players do not require any business or technology affiliations with network
operators for providing such services, they are often known by the term
"Over-The-Top" (OTT) applications
18. 18
OTT and Network Operators
While it appears streaming services threaten to take over the
entertainment industry, OTT services require an Internet
connection and users need a broadband connection that are
distributed by most cable providers.
Streaming services only work if you have access to high-speed
Internet.
19. 19
OTT Companies
OTT companies fall under the umbrella of internet companies. However all
internet companies are not OTT companies.
Internet
Companies
OTT
Players
22. 22
Rapid Adoption of OTT Services
• Data Rate of Skype 3 mb / Min , 50 kbps
• Call Rates jazz Rs 1.00 / 30 seconds ~ Rs 2.00 / min
• Jazz Average Data Rate (Package):
17 paisa/ mb OR Rs 0.17 / mb
Translates to 51 paisa / min, 25.5 / 30 seconds
23. 23
Rapid Adoption of OTT Services
Jazz earns about 1 Rupee per 30 seconds for a normal call.
VoIP Call Results in only a fourth of normal voice call revenue
Highest impact on international call revenue; People almost always use
VoIP for cross border calls
However, VoIP’s Quality of Service, one of its major drawbacks
Operators still retain the better voice quality
24. 24
OTT and Network Operators
While it appears streaming services threaten to take over the entertainment
industry, OTT services require an Internet connection and users need a
broadband connection that are distributed by most cable providers.
The increased usage of OTT services results in increased data usage which
somewhat makes up for the revenue loss from call and text based services,
for now.
Streaming services only work if you have access to high-speed Internet.
There exists a dependency
Opportunity
25. 25
Digital Revolution: Mobile Apps
A mobile app is a software application developed specifically for use
on small, wireless computing devices, such
as smartphones and tablets, rather than desktop or laptop
computers
One of the primary means of OTT players’ revenue
26. 26
Mobile Apps Usage
The 21st century has seen a rapid increase in mobile app usage which
is a direct result of smartphone penetration
Apps like Whatsapp, Snapchat, Instagram, etc have redefined
connectivity, entertainment, user engagement, etc.
WeChat : https://www.youtube.com/watch?v=VAesMQ6VtK8
How China is Changing Your Internet
28. 28
How Are Apps Monetized?
OTT Players use different strategies to monetize their apps
OTT can largely be broken down into three different revenue models
Subscription-based services such as Netflix
Free and ad-supported services such as Hulu
Transactional services such as iTunes, Video On Demand and
Amazon Instant Video that allow users to pay for individual pieces
of content
29. 29
Freemium (Gated Features)
Basic Core Services Are Provided For Free While More Advanced Features
Must Be Paid For
Gift Economy
34. 34
To Stay Relevant, Telecoms Must Transform
Themselves and Brace Digitization
• Telecoms have now realized that in order to retain their customers who are
being tempted by substitutive OTT services, they must come up with new
and innovative ideas and digital solutions.
• The consumer of the 21st century is much less tolerant and will switch to
the best service being provided if anything feels short of perfect
• The internet has made it so that the whole world is now a single market
place; you are no longer just competing with the player next door, but with
the whole world
35. 35
O.T.T. (Over The Top) Players
Free transfer of Information
Easy access to Information which was previously difficult or impossible to
access
Digital Revolution changed how the world functions and communicates
37. SWOT Analysis
37
1. Introduction
2. SWOT
3. Three
4. Four
5. Five
6. etc
Existing Brand Image
Existing Market Share
Capable Sales Force
Capable Marketing Team
Existing Infrastructure
Excellent customer service
Can Compete on the same ground
as OTT players
Chance to Capture Back
Cannibalized Market Share From
OTT Players
Compete More Vigorously in the
App Market
Mutually Profitable Partnerships
With Other Internet Companies
New Competitors
Risk Averse Customers in Pakistan
Internet Usage 3G usage limited to
areas
Facebook Aquila Drone, Google Loon
SWOT
STRENGTHS WEAKNESSES
THREATSOPPORTUNITIES
Customer database
(know-how of how to
entice them)
Experienced in Surviving
in a Competitive
Environment
High Conversion Cost
Possible Voice Quality Loss
Smaller Target Audience
Difficult to Verify Online Users
Only smartphone users can
utilize an internet companies
services to their fullest
Lack of relevant expertise
Customers cannot get
connected everywhere
Getting the current
workforce acquainted to
a new set of techniques
Telecom Operator Moving Into The Internet Market
38. SWOT Analysis
38
1. Introduction
2. SWOT
3. Three
4. Four
5. Five
6. etc
• Strong Brand Image
Company Brings With It An Established and Trusted Name
• Existing Market Share
Has an Existing Customer base Right From the Start
• Capable Sales Force
Competitive Team Experienced In Driving Sales Under Dynamic Environments
STRENGTHS
39. SWOT Analysis
39
1. Introduction
2. SWOT
3. Three
4. Four
5. Five
6. etc
• Capable Marketing Team
With Years of Telecom Marketing Experience Behind Them, The Marketing
Team Is Used To Working In Challenging Environments
• Existing Network Infrastructure
Unlike Most OTT And Internet Companies, An Established Network
Infrastructure Is At Their Disposal (Towers, Coverage, Cables, etc.)
• Easier To Get Customers To Try Your Service
STRENGTHS
40. SWOT Analysis
40
1. Introduction
2. SWOT
3. Three
4. Four
5. Five
6. etc
• Excellent Customer Service
The Excellent Customer Service That Cellular Companies Bring Will Give Them An
Edge Over Competitors
• Customer Database (Know-how Of How To Entice Them)
Existing Customer Profiles And Knowledge Of Customer’s Tastes Allow For Better
Customizability, Personalization And Customer Retention
• Experienced In Surviving In A Competitive Environment
STRENGTHS
41. SWOT Analysis
41
1. Introduction
2. SWOT
3. Three
4. Four
5. Five
6. etc
WEAKNESSES
• Only Smartphone Users Can Utilize An Internet
Company’s Services To Their Fullest
• Lack of relevant expertise
Familiarizing With An Alien Idustry, Might Have To Outsource Some Conversion
Processes, Risk Losing Some Control
• Smaller Target Audience
Will Risk Losing Major Segments As Customers
42. SWOT Analysis
42
1. Introduction
2. SWOT
3. Three
4. Four
5. Five
6. etc
WEAKNESSES
• Conversion Cost
• VoIP: Possible Voice Quality Compromise
Tower Based Audio Transmission Generally Has A Better Voice Quality, VoIP Might
Not Deliver The Same
• Smaller Target Audience
Will Risk Losing Major Segments As Customers
43. SWOT Analysis
43
1. Introduction
2. SWOT
3. Three
4. Four
5. Five
6. etc
WEAKNESSES
• Verification Of Online Users Difficult
Tracing Online User And Verifying Identity Is Quite A Complex Task
• Coverage Difference
Internet Coverage Differ From Traditional Cellular Coverage, Customer May Not
Get Connected Everywhere They Could Before
44. SWOT Analysis
44
1. Introduction
2. SWOT
3. Three
4. Four
5. Five
6. etc
OPPORTUNITIES
• Compete In A New Market (Apps, E-Commerce, Etc.)
• Capture Back Cannibalized Revenue From OTT Players
• Mutually Profitable Partnerships With Existing Players
Operators Can Use Partnerships To Position Themselves As Innovators
Enchance Customer Experience
Expanded Services And Market Reach
Limit Risk And Investment In Content Production
45. SWOT Analysis
45
1. Introduction
2. SWOT
3. Three
4. Four
5. Five
6. etc
THREATS
• New Competitors
Company Brings With It An Established and Trusted Name
• Threat To The Interdependence Of Internet Companies
And Mobile Operators:
Facebook Aquila Drone, Google Loon Project, Free Global Internet Coverage
Programs
• Risk Losing Risk Averse Customers
46. 46
Mobile Operators Vs OTT Players
Although telecom operators are in a reactionary mode to the
challenge by OTT service providers, they are well-placed to confront
them. Here are a few counter plays mobile operators can use to deal
with OTT players:
• Blocking OTT
• Bundling with OTT
• Partnering with OTT
• Developing their Own Services
47. 47
Partnering With OTT Players
• There is a saying that if you cannot beat them, join them.
• Saving RnD Investments
• Eliminating Risk; Not moving into a market where we have no experience
and instead using each others resources for mutual benefit
• Operators keep the traffic and gain share of revenue
• However, there is always the issue of loss of control over the quality of
service
May adversely affect their relationship with customers
48. 48
Partnering With OTT Players: Example
DiGi Communications, Malaysia & Reliance communication, India’s
partnership with Whatsapp:
• Customers get unlimited access to Whatsapp in return for a fee
49. 49
Digital Revolution: Access
Free transfer of Information
Easy access to Information which was previously difficult or impossible to
access
Digital Revolution changed how the world functions and communicates
