This document discusses the impact of new internet devices on mobile operators. It provides an overview of internet devices and their growing capabilities. Usage data from one European operator shows enhanced phones remain most common, but smartphones are growing significantly. The operator sells a variety of phones, with internet devices becoming more prominent. This shift empowers users and challenges operators' traditional business models. Operators must adapt by enabling third-party applications and monetizing existing assets like identity services. A proxy-based service delivery framework could help operators offer value-added services to content providers and enable new revenue streams like mobile payments.

1. Assessing the Impact of New Internet Devices on Operators
and the Delivery of Content
Martin Prošek
Video & Content Applications Technology Development
Telefónica O2 Czech Republic

2. Introduction
New mobile phones – Internet devices
Experience from one operator in one European country
Current reality – no “hype” or “bubble” – real customers behaviour
Focus on present and near future
mpact on operator, risks and threats
Expectations from SDP (and what SDP)
Monetization opportunities
15 November 2013
SDP Global Summit 2009 London

3. About Telefónica O2 Czech Republic
Telefónica O2 Czech Republic, a.s., is the first integrated operator in
the Czech Republic, formed on 1 July 2006 by the merger of the
leading fixed line operator, ČESKÝ TELECOM, a.s., and the strongest
mobile operator, Eurotel Praha, spol. s r.o., into a single
telecommunications organization. The organization is now operating
more than seven million lines, both fixed and mobile, making it one of
the world’s leading providers of fully converged services.
Telefónica O2 Czech Republic offers the most comprehensive
portfolio of voice and data services in this country. Special attention is
paid to the exploitation of the growth potential, particularly in the data
and Internet sector. Telefónica O2 Czech Republic operates the
largest fixed and mobile network including a 3rd generation network,
CDMA (for data) and UMTS, enabling voice, data and video
transmission. Telefónica O2 Czech Republic also runs the largest
network of WiFi hotspots in the country.
15 November 2013
SDP Global Summit 2009 London

4. O2 CZ Operational Highlights at the End of 2Q 2009
Telefónica O2 Czech Republic maintained solid commercial momentum in
ixed and mobile segments in a slower market.
Total mobile customer base in the Czech Republic reached 4,835 thousand
at the end of June 2009:
• Contract mobile customers in the Czech Republic grew 12.4% year-onyear to 2,663 thousand.
• Number of prepaid active customers reached 2,172 thousand.
Total number of fixed telephony accesses reached 1,804 thousand in 2Q
2009.
ADSL retail accesses grew to 634 thousand.
The total number of O2 TV customers reached 133 thousand at the end of
June 2009.
FYI: Czech Republic population – 10.467 million
15 November 2013
SDP Global Summit 2009 London

5. About Martin Prošek
More than 10 years experience in the mobile VAS area.
Leading technical development department in Telefónica O2 Czech Republic.
Responsible for:
• projects for new services/platforms
• planning and technical strategy
• involved also in service life-cycle (interacting with content partners)
• management of handset capability repository
Areas:
• Mobile Portal (WAP and Mobile Internet)
• Mobile Browsing Control
• Video Services (Mobile TV – streaming)
• Mobile Advertising
• Mobile Phone Contacts Backup and Restore
15 November 2013
SDP Global Summit 2009 London

6. Devices Relation to SDP
Devices are one of 3 main parts of the service delivery environment.
Without end-user devices capabilities there is no service delivery.
OPERATOR
FRAMEWORK
3rd Party
Services
APPLICATIONS
APPLICATIONS
VoIP
IP Messaging
Browsing
Content access
& download
AAA
Other
IDENTITY
MGMT
& SSO
DRM
SERVICE INTEGRATION / /ORCHESTRATION
SERVICE INTEGRATION ORCHESTRATION
3RD PARTY
FRAMEWORK
SERVICE ENABLERS
SERVICE ENABLERS
SIP
PROXY
GROUP
MGMT
PRESENCE
LOCATION
USER
PROFILE
PORTAL
FRAMEWORK
IP
Messaging
SERV CONTROL
SYNC
IP
CENTREX
SMS
MMS
email
CONSUMER
CUSTOMER
PROFILE
CHARGING
BASE APPLICATIONS
VoIP
POLICY
MGMT
SERV SUPPORT
PROVISIONING
(API)
BROWSING
WAP
PROXY
OPT’n
DEVICE MANAGEMENT
HANDSET
CAPABILITY
DEVICE
MGMT
OPERATOR
BILLING
(API)
SERV MGMT
(API)
NETWORK
NETWORK
GSM
GPRS
UMTS ( CS + PS)
Fixed / DSL IMS (HSS, CSCF)
BSS &
BSS &
OSS
OSS
15 November 2013
SDP Global Summit 2009 London
PROVIDER

7. New Mobile Phones
New category of mobile phone – “Internet Devices”
Almost every manufacturer offers it.
Evolved from smartphones – devices with Operating
System (OS) and browser.
History:
2001
2002
2004
2005
2006
2007
2008
2009
2010
early Nokia Communicators, first Windows CE phones and PDAs
Nokia Series 60 (e.g. Nokia 7650)
Nokia 6680
early Nokia N-series (e.g. Nokia N70) and E-series (e.g. Nokia E61)
Nokia N-series with Safari browser (e.g. Nokia N73, Nokia N95)
Apple iPhone
Apple iPhone 3G, RIM Blackberry 9000
HTC TouchPro2
...?
Do not forget pioneering of Opera Mobile...
15 November 2013
SDP Global Summit 2009 London

8. Capabilities of Internet Device
Fast data – 3G, WiFi
Big screen
nternet browser
Application execution environment
Keyboard/joystick or touch screen
Data storage or memory card slot
..
15 November 2013
SDP Global Summit 2009 London

9. Mobile Phone Manufacturer Brands in O2 CZ Network
August 2009
Nokia clearly dominates
Nokia
60%
Apple is the last noticeable brand
RIM, HTC and other Internet
device vendors have unsignificant
share
SonyEricsson
15%
other brands
and
unrecognized
5%
15 November 2013
SDP Global Summit 2009 London
Apple
1%
LG
3%
Motorola
2%
Siemens
5%
Samsung
9%

10. Device Types in O2 CZ Network
August 2009
With
browser
and OS
10%
Unique mobile phones detected in O2 CZ
network (figure includes inbound roamers).
Enhanced phones (with browser and no OS)
have the biggest share.
Smartphones (with browser and OS) have the
significant share that is growing.
Note: 16 % phones cannot use Internet at all!
These are the old fashioned plain devices.
With
browser
and no OS
74%
No
browser
16%
No browser
With browser and no OS
With browser and OS
15 November 2013
SDP Global Summit 2009 London

11. Device Types on O2 CZ Mobile Portal
August 2009
Top 10 phones
1. Nokia 6300
2. Nokia 3110c
3. Nokia 6230i
4. SonyEricsson K550i
5. Nokia 2630
6. SonyEricsson K750i
7. Nokia 5310
8. SonyEricsson K770i
9. Nokia 6500
10.Nokia 6070
November 2006
February 2007
March 2005
February 2007
May 2007
March 2005
August 2007
August 2007
May 2007
February 2006
With OS
7%
Without
OS 93%
With OS
15 November 2013
SDP Global Summit 2009 London
Without OS

12. Popular Devices
Many devices are plain mobile phones – people
ike them!
Very popular are successors of popular Nokia
6310i – Nokia 6230i and lately also Nokia 6300.
These phones are the enhanced.
Important is to not forget cheap phones – e.g.
Nokia 1600 (in O2 CZ TOP 5)
And also extremely cheap phones sold by retail
chains (Tesco, Lidl...)
15 November 2013
SDP Global Summit 2009 London

13. Mobile Phone Market
Traditional players
Established manufacturers – Nokia, SonyEricsson, Siemens, Motorola, Samsung, LG...
Growing big Asian vendors – HTC, BenQ, Huawei, ZTE...
New players
T equipment vendors – Apple, HP, Acer, Gigabyte, Lenovo...
No-name Asian vendors – Beijing, Doubao, Funai, Funkanlagen, Guo Wei, Hon Hai, Huang-Su,
Giya, Changhong, Chi Mei, China, Kejian, Konka, Nanjing Panda, Newgen, Ningbo Bird, Peike,
SangFei, Sewon, TransAsia, Xiamen, XunChi, Zhong Ling Modern, ZTC...
15 November 2013
SDP Global Summit 2009 London

14. Mobile Phones Sold by O2 CZ
15 November 2013
SDP Global Summit 2009 London

15. Mobile Phones Sold by O2 CZ
15 November 2013
SDP Global Summit 2009 London

16. Mobile Phones Sold by O2 CZ
15 November 2013
SDP Global Summit 2009 London

17. Mobile Data Modems Sold by O2 CZ
15 November 2013
SDP Global Summit 2009 London

18. Mobile Devices Sold by O2 CZ
50 mobile phones
• 6 phones without browser
• 19 Internet devices
• 6 Nokia smatphones (2 N-series, 3 E-series)
• 2 BlackBerry
• 6 Windows Mobile
• 3 Apple
With
browser
and OS
38%
3 UMTS data modems
No
browser
12%
With
browser
and no OS
50%
15 November 2013
SDP Global Summit 2009 London
No browser
With browser and no OS
With browser and OS

19. Device Types in O2 CZ Network – share prediction
100
90
80
Percentage
70
60
Internet devices
Enhanced phones
Plain phones
50
40
30
20
10
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
Years
Plain mobile phones share will not decrease rapidly.
New Internet devices share will include netbooks.
Category of data modems is not covered but might significantly grow as well (security/surveilance,
elemetry...).
15 November 2013
SDP Global Summit 2009 London

20. What is New in New Mobile Phones?
Rather evolution than revolution.
New mobile phones supports new features or combine them by new way.
Traditional Internet features:
• Internet browsing
• E-mails reading
Content features:
• personalization (wallpapers, ring tones...)
• music, video
New applications
• Google Maps, Latitude...
• Mobile blogs, social networks support...
• Enhanced reality
• ...
15 November 2013
SDP Global Summit 2009 London

21. Impacts on Operator
Client side enormously empowered, operators forced to bit-pipe.
nternet devices do not need any intelligence in network.
Demand for content will grow – but not from operators.
Data traffic will grow rapidly.
Recommendation – monetise existing assets and be Smart Pipe for 3rd party application.
15 November 2013
SDP Global Summit 2009 London

22. Aspects of the Impacts
Growing traffic
• More influenced by operator pricing.
Leaking outside mobile network (to WiFi)
• WiFi coverage is spotty by principle, helps users to learn and not fear to use advanced services
(get addict...).
Smart devices with application execution environment
• Operator must enable Smart Pipe to defend position in value chain.
Declining operator content delivery revenues
• Walled gardens are already the past (at least in Europe). If operator is not well established as
content provider people tend to use independent providers or even more free Internet services.
nternet browsers
• Operator must adapt at least own mobile portal pages (add rich pages).
15 November 2013
SDP Global Summit 2009 London

23. Adaptation of Mobile Internet Pages – examples
WML 1.X (with images)
XHTML simple
WML 1.1 (text based)
XHTML enhanced
XHTML for high-end devices
iPhone
15 November 2013
SDP Global Summit 2009 London

24. Devices Interoperability
Thousands of device types sold to users already...
Thousands of device types sold each year...
Thousands of new device types developed each year...
nteroperability a problem?
Problem when developing application on different platforms (J2ME, Symbian, WM, iPhone...).
Less problem for Internet browsing.
Still need of browser capabilities management – WURFL helps at the beginning.
Operator might provide service – device recognition, device capabilities... Can be monetized.
15 November 2013
SDP Global Summit 2009 London

25. Coexistence of Internet Devices and SDP
What SDP is needed for Internet Devices?
SDP for on-line Internet browsing access channel → operator gateway (proxy).
Appending parameters to HTTP headers while browsing:
• device description,
• identity (MSISDN, hash/alias...),
• user profile exposing (from CRM, user behaviour...),
• location,
• charging (WAP billing),
• ...
Comparison of the browsing channel to traditional SDP interfaces exposal:
• not usable for messaging (SMS, MMS),
• more usable for user profile transfer to server-side applications,
• more usable for payments – convenient, safe,
• reliable – user confirms the individual actions in browser, no provider acting as man-in-the-middle.
15 November 2013
SDP Global Summit 2009 London

26. Proxy-based SDP for Browsing
Content
Providers
Walled garden broken - portal becomes crosssale tool for mobile internet tariffs and data
packages (free portal services with LPM)
Smart Pipe services for content partners - new
revenues opportunity.
On-line channel parameters selling (identity,
device description, user profile...)
Mobile Payments across all operators in the
country
B2B
Gateways
Proxy
Service
Bus
Adaptors
Network
Mobile Internet measuring (non GSMA
approach...)
Mobile Devices
15 November 2013
SDP Global Summit 2009 London
BSS/OSS

27. Questions?
15 November 2013
Confidential

28. Thank you
martin.prosek@o2.com