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Beyond LTE Launch

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Keynote delivered at European CTO Telecoms Forum looking at Telco World beyond the initial roll-out and path to 5G. Will Marketing lapfrog out of the Access-based thinking and really sell what Technology enable with converged broadband networks, cloud and visualization supporting IoT, Industry 4.0, Connected Car@s (or X in general) and so forth.

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Beyond LTE Launch

  1. 1. 1 Dr. Kim Kyllesbech Larsen, Group Technology, Deutsche Telekom. Strategies to Achieve Maximum Profitability. European CTO Telecoms Forum 18th January 2016, Amsterdam, The Netherlands. Beyond Launch
  2. 2. 2 Messaging revenue decline (with Smartphones & OTT uptake) Voice revenue decline (mostly faster than data revenue uptake) Cash and margin pressure from new technology introduction. Cash and margin pressure from sustaining data demand. The Mobile Broadband Journey! … So Far
  3. 3. 3 Customer Economics to Consider. 0 – 25% 25%– 80% Beyond 80% ARPU Decline Customer Growth Slows Increasing Customer Acquisition Cost Revenue stagnation & decline Profitability Pressure Attractive urban areas All urban & Sub-urban areas Rural Areas Note: “Crossing the Chasm” is attributed to Geoffrey Moore from his book “Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers”.
  4. 4. 4 Time USERS ARPU SERVICE REVENUES Time SMS REVENUE VOICE REVENUE DATA REVENUE TOTAL REVENUE DIGITZED REVENUES (The 4th Wave*) ? * The 4th Wave is attributed to CHETAN SHARMA, MobileFutureForward. The very basics … Mistakes & Mess deadly for profitability! Mistakes, Incompetence & Mess don’t really matter!
  5. 5. Technology Drivers
  6. 6. 6 Mobile Broadband Status 2015. Source: 2011 – 2014 “Implementation of the EU regulatory framework for electronic communication – 2015”, EU Commision, Brussels, 19 May 2015 (Final). 2015 presenter's guestimate. 85% of HH with LTE coverage. 80% of pop have mobile broadband access
  7. 7. 7 Fixed Broadband Status 2015. Source: 2011 – 2014 “Implementation of the EU regulatory framework for electronic communication – 2015”, EU Commission, Brussels, 19 May 2015 (Final). 2015 presenter's guestimate. 30% of HH with 30 Mbps or more. 13% of HH with 100 Mbps or more.
  8. 8. 8 Illustration WEU – Technology migration. Technology penetration from a user perspective. Million subscriptions Source: Pyramid Research; From 2019 onwards presentors extrapolations. 5G?
  9. 9. 9 Mobile Economics 2010 - 2014. Mobile Revenue has declined faster than Opex leading to a decline in profitability. CAGR 2010 – 2014. Source: BoA ML October 2015, “Global Wireless Matrix”.
  10. 10. 10 Source: Pyramid Research. Voice Revenues R.I.P ... Long live Data
  11. 11. 1111 Telco at a Cross-road -€ SMS Revenue In decline Voice Revenue In decline Data Revenue Slow to pick up The traditional mobile access-based business model of Voice, SMS & Data inevitably will decline. +€? Access decline Monetizing 4th Wave
  12. 12. 1212 Towards 4th Wave-enabled Telco Technologies. Converged Access Internet of Things Internet of Industries Connected Vehicles Converged Apps Vehicular Autonomy E2E Latency < 1 ms Very High Redundancy. Medium BW requirements E2E Latency ~ 1 - 50 ms Very high availability Elastic BW requirements E2E Latency ~ 50+ ms Privacy & Security protection Extreme elastic BW requirements Ultra-high Availability Very high security required Elastic E2E Latency requirements FTTx + LTE  5G Ultra-Efficiency requirements Cloud & Virtualization Seamlessness across all platforms e.g., Fixed, Mobile & other screens Ultra-Personalization Industry 4.0IoA IoT
  13. 13. “Todays” Access Telco Environment New 4th Wave Telco Environment New competitive climate enabled by Technology  The 4th Wave Era. 
  14. 14. 14 +€? What we strive for!
  15. 15. 15 Our Industry Challenge. Technology Marketing 3G  4G  5G “1G” Cloudisation Virtualization Convergence Access-based thinking.
  16. 16. 1616 100 Gbps DWDM 10 GbE Illustration Technology Convergence… a critical enabler for the Digitized Society! OLT MSAN Cellular Wholesale NG-CN Data Center(s) w. Cloud, XaaS, SDN/NFV, CDN, … Note: Croatia Telekom (Deutsche Telekom), Croatia’s largest telecommunications company, first one to deploy the new TeraStream cloud-enabled transport & data center architecture (in partnership with Cisco). MSAN: Multi-Service Acccess Node, OLT: Optical Lite Termination. Sources: Peter Lothberg (DTAG) https://ripe67.ripe.net/presentations/131-ripe2-2.pdf & http://www.internetsociety.org/deploy360/blog/2014/01/videoslides-case-study-of-terastreams-ipv6-implementation-ripe67/ Small cell Node Small cell Small cell Small cell Intelligence & Services Moves to Cloud & End-User Devices Target Min 100+ Mbps at consumer edge R1 R2 Pure Switching & IP Routing
  17. 17. 17 MOBILE CONVINIENCE HOMEDigitized! RETAIL Content SECURITY DEFENCE HEALTH SURVAILANC E SMART GRID DATA MINING TOURISM PROFESIONA L SERVICES TRANSPORT BIONICS QoE ENVIRONMENT
  18. 18. 18 Mobile 1,400+ Billion US$ (55% Data) Global Digitized Economy 2020 Fixed 440+ Billion US$ (60% BB) Mobile Banking 400+ Billion US$ Public Cloud 370+ Billion US$ Mobile Health 60+ Billion US$ M2M 140+ Billion US$ Mobile App 30+ Billion US$ Mobile Digital Advertising 170+ Billion US$ (70+% of Total) Smartphones 250+ Billion US$ Mobile Content 8+ Billion US$ Another Trillion Dollar+ Economy in the most obvious Digital Services. Managed Cloud Services 4+ Billion US$ Sources: http://www.statista.com/ premium account. Typically up-to 2020 has been projected based on available data. This applies to the following page as well.
  19. 19. 19 Mobile 1,400+ Billion US$ (55% Data) Global Digitized Economy 2020 Fixed 440+ Billion US$ (60% BB) Mobile Banking 400+ Billion US$ Public Cloud 370+ Billion US$ Mobile Health 60+ Billion US$ M2M 140+ Billion US$ Mobile App 30+ Billion US$ Mobile Digital Advertising 170+ Billion US$ (70+% of Total) Smartphones 250+ Billion US$ Mobile Content 8+ Billion US$ Another Trillion Dollar+ Economy in the most obvious Mobile Digital Services Entertainment & Media 2,500+ Billion US$ Travel & Tourism 9,800+ Billion US$ (<10% Online) Internet of Things 7,000+ Billion US$ Residential Financial Transaction Volume 5,000+ Billion US$ (50+% Online Penetration) Note: 2013 had Globaly ca. 30% Internet Users Healthcare 11,000+ Billion US$Medicine 1,400+ Billion US$
  20. 20. 20
  21. 21. 21 First production vehicle designed through crowdsourcing. Design chosen through a vote by open design community. Developed at a fraction of normal development budget. Co-creation process: Engage customers through Co-creation!
  22. 22. 22 Engage customers through Co-creation! 250+ thousand product ideas since 2008! Product ideas
  23. 23. 23 Network Architecture New business models will appear. NG-DC, Cloud, NVF, SDN, Metro-CDNs, NG-transport! Disruptive Business Models 3rd parties delivers core network functionality (e.g., HSS, PCRF, etc..) 3rd parties delivers BSS / OSS cloud services (off- the-shelf) 3rd party, Sharing, Wholesale, media companies, MNO/MVNO CDN & SDNs.
  24. 24. 24 Rapidly towards The challenges we face are NOT Technology! It is how to Quantum Leap Marketing
  25. 25. 25 Thank you! Dr. Kim Kyllesbech Larsen Follow Dr. Kim on Twitter @KimKLarsen Blog: www.TechNEconomyBlog.com Presentations: http://www.slideshare.net/KimKyllesbechLarsen Acknowledgement: I am indebted to my wife Eva Varadi for her great support, patience and understanding during the creation of this presentation. Further, I would also like to thank Chetan Sharma (Future Mobile Forward) for his incredible inspirational papers on “The 4th Wave”.

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