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What's hot in the mobile world? Dagfinn Myhre, SVP & Head of Research Agenda, Telenor Group


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Key Note VERDIKT conference 2010

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What's hot in the mobile world? Dagfinn Myhre, SVP & Head of Research Agenda, Telenor Group

  1. 1. What's hot in the mobile world? VERDIKT, 1 November 2010 Dagfinn Myhre SVP & Head of Research Agenda Telenor Group
  2. 2. Our industry is experiencing a rare expansion in the importance of our services
  3. 3. Among the largest mobile operators in the world More than 180 million mobile subscribers* Aproximately 40 000 employees Present in markets with 2 billion people Nordic Vimpelcom Norway Sweden Russia Denmark Ukraine Kazakhstan Georgia Uzbekistan Tajikistan Central and Armenia Eastern Europe Asia Kyrgyzstan Thailand Cambodia Hungary Malaysia Vietnam Serbia Montenegro Bangladesh Pakistan India Telenor Group is an international provider of tele, data and media communication services • Mobile operations in 11 markets across the • Among the top performers on Dow Jones Nordic region, Central and Eastern Europe Sustainability Indexes and Asia • A stake of close to 40% in VimpelCom Ltd, • Revenues 2009: NOK 98 bn operating in 10 markets • Headquartered in Norway • Listed on the Oslo Stock Exchange
  4. 4. Telenor Group mobile operations Nordic Norway Sweden Denmark VimpelCom Ltd. Russia Ukraine Kazakhstan Central and Georgia Eastern Europe Asia Uzbekistan Tajikistan Hungary Thailand Armenia Serbia Kyrgyzstan Malaysia Cambodia Montenegro Vietnam Bangladesh Telenor Group holds 39.6% of the economic ownership in VimpelCom Ltd. Pakistan India
  5. 5. Mobile customer yearly growth 2002 - 2009 174 164 143 115 83 53 31 22 2002 2003 2004 2005 2006 2007 2008 2009
  6. 6. Industry changes will create continued opportunities for growth Our industry has changed… • From monopoly to market competition • From national to global players • From telecom to data technology • High growth Yesterday Today Tomorrow …and the change will continue at high speed • Growth flattening • Increased competition • Continued technological development with explosion in mobile data traffic • Stronger focus on partnerships and the enabler role • Software based services • Customer power will grow • Communities and social networks
  7. 7. Growth is driven by technology shifts, innovative services and changing customer behavior Evolution in site capacity from GSM to LTE Five-year evolution in device prices - downlink, sum of voice and data Total capacity per site (Mbps) 96 Internet/ Voice-only Feature phones smartphones 45 28 SE w595 Nokia N97 iPhone 9 Nokia 1112 Nokia 6300 1 4,5 Plain GSM GSM/EDGE 3G Rel.99 Turbo-3G LTE 1800 LTE 2600 50% 30% 20% Year 1995 Year 2010 (15MHz) (HSPA) (10 MHz) (20 MHz) (10 MHz) (10 MHz) (15MHz) Changes in customer behavior: Social networks and the New services way young people communicate -
  8. 8. New competitive dynamics and interdependencies Device User experience Online Content Operating User Communi- Services Market Hardware System Interface cation Device Apps apps market Example: Apple App store Device vendors Core competence Recent moves Example: Google Android Internet Recent Core companies moves competence Example: Orange App shop Mobile Recent Core competence operators moves
  9. 9. Google: Mobile first • Most important segment for internet companies in the future Three important trends 1. Improvements of hardware in mobile devices 2. Increased number of connections between services Eric Schmidt – CEO Google February 2010 3. New services in the cloud
  10. 10. Changing mobile industry – usefulness and user experience important • Major players lead the way • Mobile applications important • Large memory, high quality screens, music, camera, 3G, WiFi, GPS …
  11. 11. Innovation is key to our future We innovate in services that will change the shape of communication and our business - and we do this in close cooperation with our customers and partners in an open landscape of research and exploration
  12. 12. Innovation across three horizons - balance between shorter and longer term initiatives Horizon 3 Uncertainty Horizon 2 Create options for future Horizon 1 business Develop new business Expand and defend core business Time horizon
  13. 13. Customer driven innovation ‒ Customer and brand experience ‒ Based on the daily need of people and business ‒ Co-creation and open innovation processes with customers
  14. 14. Mature markets ….
  15. 15. Emerging markets ….
  16. 16. Mobile consumer behaviour segmentation model May overlap Source: Forrester Research
  17. 17. Network effects When the customers value from a product depends on who else has adopted the product we speak of a network effect M. Katz and C. Shapiro, AER, 1985
  18. 18. Spreading of new services (Norway) MySpace Facebook Twitter
  19. 19. Social networks go mobile • Facebook and Twitter dominate • Comprehensive service innovation for social networking on mobile phones • More than 200 mobile operators in 60 countries offer mobile Facebook solutions* • There are more than 150 million active users currently accessing Facebook through their mobile devices* • People that use Facebook on their mobile devices are twice as active on Facebook than non- mobile users* * Facebook 2010
  20. 20. Telenor research shows that you want what your friends want • Understand social influences on service adoption • Better user experience • Better service offering
  21. 21. Creating value through service innovation Access to the Internet The mobile broadband opportunity • Consumers will gradually embrace the mobile Internet, with large country differences • Access to the Internet will contribute significantly to productivity, FDI, GDP growth, job creation and government revenues Internet users (% of population) South Korea 96.8% Norway 85.7% North America 73.9% Europe 50.1% World average 24.7% Asia 18.5% India 7% -
  22. 22. Access to the Internet It’s about access anywhere, anytime
  23. 23. Access to the Internet A broad range of social benefits Increasing Internet use has extensive social benefits: • Education • Healthcare • Access to government services • Rural development Source: The Boston Consulting Group
  24. 24. Creating value through service innovation Open innovation Innovation with partners • Opening up fixed and mobile networks through significant investments • Opening up the value chain • Partnering spanning from enabling new applications to close cooperation on innovations
  25. 25. Open Innovation Service enablement
  26. 26. Open innovation Location based services TV2 Skattelisten Darkslide. Shows register of Shows all public taxplayers based Flickr pictures at on your location a given location
  27. 27. Open innovation Augmented reality Theodolite Peaks London Tube Wikitude
  28. 28. Creating value through service innovation Financial services The financial services opportunity • Telecom and banks/card companies are increasingly teaming up to create new services • Serving the unbanked - low and variable cost structure through telecom distribution • Telenor has positioned itself to launch innovative services with high impact in one of the most untapped markets in the developing world Example: Pakistan • Telenor Pakistan purchased 51% of Tameer bank, a microfinance bank, in 2008 • Enabling Telenor Pakistan to offer branchless banking
  29. 29. Financial services Services based on mobile handsets Share Discover Purchase Read
  30. 30. Creating value through service innovation Internet of Things The IoT opportunity • Internet of Things a potentially significant market • Telenor becomes a vital part of the customers’ own product offering Example: • Global M2M connectivity provider with dedicated organization, product and services - supporting national OpCo value chains • Separate entity with global focus established in 2008
  31. 31. Internet of Things
  32. 32. Internet of Things ICT in healthcare • Healthcare systems • Medical sensors • Automatic warning aid • Smart house • Robots • Tracking technologies
  33. 33. Internet of Things Telenor Home Monitoring Trial • Identify drivers and inhibitors • Identify organizational effects and potential for cost reductions • Evaluate the system’s impact on the client’s and close relatives’ well being • Identify aspects crucial to user accept and adoption
  34. 34. Further research challenges - who will take part? • Understanding the markets, customers and brand positions to deliver excellent customer experience • Open innovation in the new converged landscape – service innovation • Internet of Things – platforms, ecosystems and business models • ICT in healthcare – services, platforms and cost benefit • Mobile payment - how to make payment more convenient and secure • SFI/NFR application together with NHH and several large partners: – Center for Service Innovation - CSI
  35. 35. Growth comes from truly understanding the needs of people to drive relevant change