Informa presentation for tc3

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Presentation from Andy Castonguay from Informa. Delivered at TC3 in Sunnyvale last week.

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Informa presentation for tc3

  1. 1. What you need to know about telecomsoperators’ growth and innovation strategiesAndy Castonguay, Principal Analyst
  2. 2. Informa Telecoms & Media Informa Telecoms & Media delivers strategic insight, key market data and forecasts. We’ve been helping our clients make better business decisions for more than 25 years. Our aim is to be accessible, responsive and connected both to markets we serve and our clients’ business goals. We have 65 analysts in nine research offices offering pragmatic advice to the leading global operators and builders of communications infrastructure. These analysts are informed, objective and a ready to apply practical ‘real world’ experience to your business challenges and opportunities.
  3. 3. Our methodology: talk andlisten to the industry9/18/2012 www.informatandm.com 3
  4. 4. Today’s discussion points The state of the telecoms operator business Operators’ next big bets Relationship with OTT players Getting the most out of your relationship with telecoms operators
  5. 5. Key Observations of Operator VC &Innovation Strategies Operators are banking on innovation to save them from a future as a dumb pipe. Venturing is now being absorbed into the overall strategy for partnering and new services. Operators from outside of the U.S. are looking to partner with firms from Silicon Valley. “Digital” initiatives have been set up across several divisions in some telcos while others are setting up dedicated units
  6. 6. With Few Exceptions, Operators FaceChallenging Global Mobile DynamicsGlobal mobile revenues ($m), 2009 2010 2011 20122009-2012 Total 845,954 894,979 961,583 1,005,7431,200,000 Voice 645,808 654,811 670,755 668,373 Data 200,146 240,168 290,828 337,3701,000,000 800,000 Total 600,000 Voice Data 400,000 200,000 0 2009 2010 2011 2012 www.informatandm.com 6
  7. 7. Operators resorting to “non-telecoms” benefitsbecause they cannot differentiate their core products 18/09/201 www.informatm.com ©Confidential 7 2
  8. 8. Today’s discussion points The state of the telecoms operator business Operators’ next big bets Relationship with OTT players Getting the most out of your relationship with telecoms operators
  9. 9. Fixed and mobile broadband accessrevenues are growing by 20% + per year www.informatandm.com 9
  10. 10. Laptops, tablets, e-readers: operators wantto connect your devices to their network www.informatandm.com 10
  11. 11. In M2M evolution, operators want to movefrom (dumb) connectivity to (smart) services 2012 2015 Decision support, reports and alerts, analytics Security, demand response, performance management Consulting, integration, software development M2M revenue Communications services,distribution associated communications hardware Source: Informa Telecoms & Media www.informatandm.com 11 ©All rights reserved
  12. 12. M2M and cloud hold huge promise buttheir potential has been overhyped M2M revenues are generating $4.6bn annually for mobile operators. Telco cloud revenues will be worth $5.7bn in 2012 www.informatandm.com 12
  13. 13. Operator focus is moving away from theconsumer market to B2B and B2B2C • The “two-sided business business-model has never really got much traction. • Operators still believe in the strategy of exposing their APIs but monetisation is difficult. • Operators are (slowly) starting to verticalize their enterprise divisions. • In many verticals operators will pursue both B2B2C and B2C business models. • Carrier billing is gaining momentum. www.informatandm.com 13
  14. 14. In an IP world operators need to lookbeyond the(ir) network www.informatandm.com 14
  15. 15. Today’s discussion points The state of the telecoms operator business Operators’ next big bets Relationship with OTT players Getting the most out of your relationship with telecoms operators
  16. 16. Video has become a major headache formobile operators, opportunity for partners • Although monetization options will multiply around new video-on-demand 0.4% and digital-locker services, most video streaming will continue to be 19.7% consumed for free. • Piracy will also continue to undermine Traffic Revenue revenue-generating efforts, especially 80.3% 2011 99.6% in emerging markets. • Operators’ video and TV offerings will Mobile video become increasingly irrelevant as over- Other services 0.7% the-top players take center-stage via smartphone apps. 34.3% • OTT services – from movie rentals, to 65.7% catch-up TV and e-commerce sites – Traffic Revenue will help turn video streaming into a 2016 99.3% mainstream activity on phones, engaging 35% of mobile users globally by 2016. Source: Informa Telecoms & Media www.informatandm.com 16 © Informa UK Limited 2012. All rights reserved
  17. 17. How can operators generate revenue fromOTT partners and 3rd parties? Marketing support / distribution Embedded apps / device real estate / devices? Network prioritisation / guaranteed QoS Revenue share for premium services Local caching / CDNs www.informatandm.com 17
  18. 18. Today’s discussion points The state of the telecoms operator business Operators’ next big bets Relationship with OTT players Getting the most out of your relationship with telecoms operators
  19. 19. Operators are desperate to become moreinnovative. You can help them in 3 ways1. Create new revenue streams New services and applications Revenue share2. Enhance core services Slowing price erosion Improving customer loyalty Attracting new consumers3. Improve processes / Networkefficiencies / Retail www.informatandm.com 19
  20. 20. Operators are stepping up their VCactivities in Silicon Valley www.informatandm.com 20
  21. 21. “Digital” units are becoming the focal point:Telefonica Digital sets the standard www.informatandm.com 21
  22. 22. Top 5 areas of operator VC focus1. Social networking, media & entertainment2. Advertising3. Cloud services4. Applications5. M2M www.informatandm.com 22
  23. 23. Thank you! Andy Castonguay Principal AnalystQuestions? acastonguay@informa.com

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