Uploaded byEmilio Sepulveda
Carriers & OTTs
The document discusses opportunities for carriers and OTT providers in the changing mobile ecosystem. It notes that OTTs are accelerating changes in user behavior and the shift from voice to data revenues. However, the real threat to core revenues comes from local broadband competition rather than OTTs. While OTTs in voice and messaging represent zero new revenue, the overall OTT model provides opportunities to leverage infrastructure, gain closer access to customers, and offer new services like quality of experience guarantees. Telecom companies need to redefine their core assets and value proposition in order to capture new opportunities in this evolving landscape.
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Carriers & OTTs
- 1. Carriers & OTTs Emilio Sepulveda Megève, bics Carrier Event February 2012
- 2. 2009-2012 Where wasthe most value created? Market value creation by sector 1/1/09à1/1/12(1) Other Internet (10 companies: +$112Bn) eCommerce (11 companies: +$125Bn) (+319Bn) Semiconductors (56 companies: +$164Bn) (+$70Bn) Other Mobile Social/Local (Intel, Qualcom, ARM: +$95Bn) (Facebook, Baidu, Groupon, LinkedIn, Mail.ru, Pandora, Tencent: +$164Bn) Tech Bellwethers (Google, IBM, Microsoft, Oracle, HP, Cisco: +$284Bn) Software Mobile (77 companies: +$184Bn) Total value creation $1,517 Bn Source: Capital IQ, Morgan Stanley Notes: (1) Comm Equipment and device manufacturers (Nokia, RIM, Alcatel-Lucent, HTC, Juniper, ZTE) are not included in the chart as these sectors had a negative value creation of ($43Bn), wihich corresponds to a (2,9%) of total value creation 2
- 3. What does theecosystem look like? Apps/OTTs Telcos Handsets Global, no ties to Local silos, tied to Global, no ties to Infrastructure or OS Infrastructure infrastructure 3
- 4. But communications is the operators’ core business … much trouble? Are OTT causing Which option best reflects your opinion on the impact of smartphone Global mobile revenues, voice vs. data, 2009-2016 adoption on usage of operator voice & messaging services? Users are heavily substituting Users are voice & moderately messaging substituting services, 13% voice & messaging No material services, 41% impact, 6% No material impact today, • Revenue erosion comes from local market but we expect users to substitute in competition, not OTTs, and regulators the future, • OTTs only accelerate changes and leverage 40% arbitrage opportunities Source: Informa Telecoms & Media Source: Informa Telecoms & Media www.informatandm.com ©Confidential 4
- 5. Is‘MadeShare from 5%Five Years Agoat all? it about voice Systems = 64% in USA’ Smartphone Operating Smartphone Operating System Market Share, 2005 vs. 2011E 100% Market Share of Smartphone OS 80% Other OS 60% iOS Android Windows Mobile 40% BlackBerry OS Linux Nokia Symbian 20% 0% 2005 2011E Source: Morgan Stanley Research, Gartner. Copyright 2011. All rights reserved. Source: Mary Meeker 45 5
- 6. Should we investin RCS/IMS… platforms? Where is the business rational? Better partner with OTTs selectively • Zero billion incremental revenue opportunity • Harvesting is OK, but why invest? • Only winners are vendors 6
- 7. So what arethe opportunities for us, telcos? What kind of platform/OTT are we? Source: Mary Meeker • Experience as a Service/Experience delivery network • We are an infrastructure platform • No one can get closer to the end user 7
- 8. Are we properlyorganized to overcome? Chairman & CEO César Alierta COO Julio Linares Telefonica Digital Latam Europe Global Resources Mathew Key Santiago Fernández Valbuena José M. Álvarez-Pallete Guillermo Ansaldo • Centralize decisions on services, technology, VC • Deploy centralized platforms and maximize synergies • Let local units take care of market approach and local positioning 8
- 9. What about us,wholesalers? Any opportunity? E2E QoS Behave as Higher wholesale availability customer and security Control and New Visibility Services New OTT model Business enables Models direct access Evolve from to end middlemen customers to enabler 9
- 10. …and allows usto get rid of middlemen and enforce Cascade payment models Money and Traffic flow Marketing Content Ingestion Delivery Advertisers Enablers Agencies Providers Carriers Carriers Broadband Users Example: Content ecosystem Source: Chetan Sharma Telefonica International Wholesale Services
- 11. What is thevalue we add? Closer to the Customer Efficient Network aware & Content aware QoS Security No Incremental Cost for a Better Value E2E Responsibility 11
- 12. Summary • OTTs isaccelarating changes in users behaviour • This change in behaviour means a shift from voice revenues to data revenues • Real threat to core revenues come from local competition in broadband services, fixed an mobile (and regulator activities…) • OTT in voice and messaging is a zero billion opportunity, but the OTT model itself offers lots of opportunities, even for wholesalers • We must rethink what are our actual core assets, how we leverage them and what value can be added as a wholesaler 12
- 13. Thank You ! Morequestions? emilio.sepulveda@telefonica.com 13