This document proposes a syndicated study to provide a bottom-up analysis of the $125 billion telecom value-added services opportunity identified in an earlier top-down study. The new study would model specific opportunity areas like advertising and customer care across geographies and business models to generate detailed forecasts sponsors could use for business cases and partner discussions. Multiple sponsors would share costs. The timeline calls for scoping in early 2010, finalizing the scope in March, securing sponsors in April, conducting the study from May to September, and delivering reports tailored for each sponsor.

1. Syndicated Research
Telco B2B2C VAS opportunity sizing
Bottom-up approach to ‘$125bn’ telecoms opportunity
Philip Laidler
philip.laidler@stlpartners.com
www.Telco2.com

2. 2009 Telco2.0 study provided top-down view of the VAS opportunity
Total Market: $125 Billion
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3. There is a need for a syndicated study
• 2009 Telco2.0 study on The $125Bn „Two-Sided‟ Telecoms Market Opportunity provided a top-down
market sizing: Strong basis for supporting strategic decision-making
• Many operators are now looking to execute. For this, they need:
• Detailed business cases to justify investment
• Use cases, data model, processes and commercials required to engage upstream partners and internal functions
What will services look like and how will they be charged for?
• Some B2B2C VAS could be made up of many simple transactions in the form: API x $/dip x usage
• Some B2B2C VAS could be a transaction commission only (with other APIs free)
• Some could be a service platform with any number pricing schemes (including charging a 4th party)
• Problem is complex, large, “wide-open” and requires building consensus on vision
• Multi-client study provides engagement and shares cost of the exercise
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4. Bottom-up market sizing modelling
• Framing the opportunity – Vocabulary, syntax and grammar of B2B2C VAS business
• Defining 3 „typical‟ business models for each opportunity area
• Characterising and describing the key business model options and associated ecosystems
• “Work up” from specific opportunity areas (generally an intersection of horizontal and
vertical) and aggregate these up to 90% of the $125bn figure
• Partner strategy and business model
• API charges
• Platform access
• Transaction cost/share of revenue
• Volumes & pricing of transactions/usage
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5. Structure
• North America and
Western Europe
Advertising
Advertising • “Potential opportunity”
Advertising
Advertising
Advertising
Advertising
for 2017
Advertising
Advertising
Advertising
Advertising
Advertising • Business models will
not be strictly
comparable, as some
will create more value
than others
Business Business Business
• Different models will
Model A Model B Model C “co-exist” but have
different value for telco
and varying “share” of
opportunity
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6. Opportunity areas – to be reviewed and finalised
1. Marketing & advertising: retail goods (consumer and SME)
2. Marketing & advertising: retail services (consumer and SME)
3. Identity, authentication & security: services and digital media
4. Identity, authentication & security: public sector (consumer and SME)
5. Sales and payments: services, public sector & digital media
6. Offline fulfilment: public sector
7. Customer care: retail goods
8. Business & market intelligence (aggregate data)
9. Public policy, safety & transport (aggregate data)
10. M2M VAS
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7. Process overview
Opportunity
Project scope Straw man
areas refine
finalised business models
definitions
Revised Upstream
Business model
opportunity research &
refinement
areas sector interviews
Modelling Modelling,
Final report and
(W.Europe & specific
model
N.America) geographies
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8. Two main deliverables
• Full report with break-down of opportunity areas
• Opportunity sizing: implications for telco industry
• Review of each opportunity area:
• Findings and conclusions
• Description of 3 business models used: rationale, assumptions and supporting analysis
• Write-up of upstream research and interviews
• Spreadsheet for North America and Western Europe
• Sponsor-specific report (contents and index confidential)
• Broad implications and next steps for sponsor
• Specific location-single opportunity-business model run: Findings and implications for sponsor
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9. Benefits to syndicated sponsorship
• Spread the cost of undertaking the study
• Have a direct say in the study scope and the format of output
• Ensure that forecasts are relevant and can be readily used for:
• Internal business cases
• Upstream partner discussions
• Participate directly (and anonymously) in contributing to the vocabulary and framework
adopted in the study
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10. Timeline, costs & Next steps
• Scoping conversations with potential sponsors: Feb 2010
• Finalise scope and deliverables: March 2010
• Secure (between 4 and 7) sponsors: April 2010
• Undertake study: May-Sept 2010
• Estimated cost per sponsor = £40k
• Understand sponsors‟ objectives in more detail and align deliverables
• Finalise scope, cost and terms
* Final cost will depend on agreed scope and number of sponsors
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