The new rules of engagement are being written by Communications Service Providers’ customers. Embrace new service models to capture their attention.

1. TRASHTHE
RULEBOOKThe new rules of engagement are being
written by CommunicationsService
Providers’customers. Releasing trapped
value to make investments in future B2Cand
B2B growth is urgent in order to survive.
#NewAppliedNow
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2. 2Copyright © 2018 Accenture. All rights reserved.
THE INDUSTRY IS BEING
SQUEEZED FROM ALL SIDES
TOP-LINE GROWTH IS STALLING
REVENUES HAVE LEVELED OFF
CUSTOMERS ARE FINDING
NEW WAYS TO ENGAGE,
DIGITALLY
AND DIGITAL DISRUPTORS
ARE UNDERMINING THE
TRADITIONAL BASE OF SERVICES
THERULES
HAVE
CHANGED

3. The commoditized core business isn’t
profitable and there’s ongoing
substitution with low cost, digital
alternatives. Shareholders are being
kept with dividend yields and share
buybacks.
3Copyright © 2018 Accenture. All rights reserved.
SHIFT&
DISRUPTION
OFVALUE

4. 4Copyright © 2018 Accenture. All rights reserved.
Barriers to entry & market boundaries are
collapsing and traditional approaches to
growth are no longer sufficient. Existing
asset values and historic positions of strength
are eroding.
CHANGING
RULESOF
THEGAME

5. Ongoing reduction of customer
stickiness and loyalty. Incumbency is
no longer an advantage – CSPs are
not an essential part of the users’
daily digital routine.
5Copyright © 2018 Accenture. All rights reserved.
THELIQUID
CUSTOMER
ISHERE

6. Infrastructure-bound, with vertical
integration and siloed operating models.
CSPs have un-scalable legacy operating
and technology models and legacy,
engineering-based workforces.
THETELCO
PLAYBOOK
ISOUTDATED
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7. Copyright © 2018 Accenture. All rights reserved. 7
14%
15%
16%
17%
18%
19%
20%
2011 2012 2013 2014 2015 2016 Q3 2017
(TTM)
EBITA Margin
Rising investment levels have yielded lower returns… And marginal returns have declined
13%
14%
15%
16%
17%
2011 2012 2013 2014 2015 2016 Q3 2017
(TTM)
Capex / Revenue Pre-Tax ROIC
Source : Company reports, Accenture Analysis
INVESTMENTINTHEPIPEISINCREASINGWHILE
PERFORMANCEISDECREASING

8. Traditional CSP Play resulting in
incremental dividend optimization
Current valueFuture value
US$Bn
-500
0
500
1,000
1,500
2,000
2,500
2012 2013 2014 2015 2016
COMMUNICATIONS
INCUMBENTS ARE DEEPLY TIED TO THEIR
(DECLINING) CORE BUSINESS…
CSPSCANTRYTO
OPTIMIZEA
DIVIDENDPAYING
UTILITYPLAY…
Source: Reported revenues, Accenture analysis
8Copyright © 2018 Accenture. All rights reserved.

9. Disruptive investments in options
to ensure high future value
Current valueFuture value
….WHEREAS DIGITAL DISRUPTORS FOCUS
ON FUTURE VALUE CREATION
Source: Reported revenues, Accenture analysis
0
200
400
600
800
1,000
1,200
1,400
2012 2013 2014 2015 2016
DISRUPTERS
US$Bn
…ORESCAPETHE
COMPRESSIONAND
RE-BUILDFUTURE
VALUEONTHE
DIGITALPLAYING
FIELD
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10. 20.0
8.1
6.2 5.9
5.1
4.4 4.3
3.4
2.8 2.3
1.7
10
DISRUPTIVEBUSINESSESAREBORNDIGITAL
They operate as a platform and have built on a different tech culture
YEARS
Disruptive businesses
have demolished the
time to become a
$1BN DOLLAR
BUSINESS
S&P500
/DAX
Avg
Unicorns
Copyright © 2018 Accenture. All rights reserved.
Source: comScore, Traction metrics, The Economist; oneweb.world; Accenture
*$110-120 in cities without Google vs $70 in cities where Google offers its fiber patch.
**Google estimate of $5 per served customer up to 120M served customers.
***Comcast Capex FY15, only Cable Business
* ACCENTURE, 2017 I CMT Connect - Communications & Media Industry Research

11. 11
Create an ecosystem
of partners, customers &
developers
Own the full digital
experience and engagement
(cloud, network and devices)
Operate as 2-sided platforms
vs focusing on products
Based on data driven
feedback loop
Different business
model, the more you use
the more you grow
Have a different tech culture
(fail fast and learn)
They have no legacy
DISRUPTIVEBUSINESSCHARACTERISTICS
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12. 12
DISRUPTERSCONTINUOUSLYUNDERMINE
TRADITIONALSOURCESOFCSPSTRENGTH
VOICE & DATA
PRODUCTS
LAST MILE
OPERATORS
HYBRID WIFI/
WIRELESS MODELS
HOME
DEVICES
Structural separation to
provide an open playfield.
Provision of internet
access to remote
populations using
emerging technologies
(e.g. drones)
‘Wi-Fi First’ providers of
connectivity, utilizing
‘freemium’ business
models
High consumer
engagement
for social apps such as
Facebook, WhatsApp,
and YouTube
Home devices designed
to be at the center of any
customer digital need and
powered by AI
Copyright © 2018 Accenture. All rights reserved.

13. DIGITALDISRUPTERS AREENCROACHINGONCSP
CUSTOMERS……….
Subsidizing services to
monetize data
Shifting consumption
away from incumbents
Appropriating future
industry value
Generating new value
for customers:
establishing standards
incumbents cannot easily
match or exceed
Getting “Consumerized” –
serving B2B and B2C with
the same services
Growing asymmetrically
in new customer driven
domains
Using platform and scale
to win
Competing globally with
divergent business models
Driving scale through
open-ness and platform
and ecosystem
interoperability
Being customer-centered,
data-driven
Aggressively moving into
ambient devices
BUT CHALLENGED ON
TRUST AND SECURITY
13Copyright © 2018 Accenture. All rights reserved.

14. BUTWHATIFTHIS
COULDBEFLIPPEDTO
ARACETOTHETOP?
Cost savings are
now re-invested
to fuel future
growth
WITHOUTINVESTING
INAFUTUREGROWTH
MODELIT’SARACETO
THEBOTTOMFORCSPS
CSPs are currently
just surviving by
optimizing their
core business to
save costs and pay
dividends
14Copyright © 2018 Accenture. All rights reserved.

15. 1. TRANSFORM THE CORE BUSINESS
…by building more competitive cost structures to improve
flexibility, increase profits, and drive up investment capacity.
2. GROW THE CORE BUSINESS
…by redirecting some of that investment capacity
to drive incremental growth in the core business.
3. SCALE NEW BUSINESS
…while identifying new sustainable business models which
leverage and monetize key control points and scale them
(at the risk of core business cannibalization).
4. PIVOT WISELY
…by keeping an eye on pace and balance. The “core” and
“new” businesses usually need to co-exist for a substantial
period of time.
15
SCALINGNEWGROWTHISADELIBERATEAND
PERPETUALCHANGEJOURNEY,NOTASINGLEEVENT
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16. Leverage the valuable heritage of telecoms
experience – customers, billing relationships,
networks, security, and trust - to embrace new
competitive advantage and find new growth.
16Copyright © 2018 Accenture. All rights reserved.
PLAYTO
YOUR
STRENGTHS

17. 17
FOURCSPGROWTHSCENARIOSEMERGE
Copyright © 2018 Accenture. All rights reserved.
CUSTOMER BASED ECO
SYSTEM PLAY
CONTINUUMOFOPTIONS
INFRASTRUCTURE-BASED
NETWORK PLAY
Multi-sided
platform model
Digital mobile
only attacker
Vertically
integrated
service provider
Connected Industry
Orchestrator
Establish cloud-platform business, enriched by
OTT/industry partners
Monetizing the core business with digital
services and customer interactions
Monetizing the core business with differentiated
services / content bundles
Managing intelligent, open, self-service
digital networks
Pervasive
Network

18. NETWORK ROLE NETWORK INVESTMENT STRATEGY
▪ Drive the most cost competitive in-
country connectivity (all digital,
portfolio simplification)
▪ Open to shared or outsourced networks
▪ Software defined and agile control
points to build customer intimacy
▪ Foundation capability to provide
connectivity services
▪ Provides critical control points: SIM
cards, CPEs
▪ Differentiating capabilities ahead of
competition (low latency, own IPs, MEC,
topology of services)
▪ Provides critical control points:
connected objects and ubiquitous
policy management
▪ Focus on best quality, features and
coverage
▪ Walled garden for distinctive network
capabilities and control points
▪ Articulated organization and tech platform
for service creation and exposure
Multi-sided
platform model
Connected Industry
Orchestrator
SUCCESSDEMANDSADEPARTUREFROMTODAY’S
MODELSANDCOMPETENCIES–ANDPLAYINGTOONEOF
THECSP’SCORESTRENGTHS–THENETWORK
Pervasive
Network
As an
Enabler
for New
Growth
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19. INTELLIGENT OPERATIONS
Transform the operating model towards
customer-centricity and agility while
leveraging automation (RPA, AI) into the
core culture.
PROGRAMMABLE PLATFORMS
Transform the cost base and the customer
experience by creating software defined,
programmable and reusable solutions,
driven by insightful data and end to end
orchestration.
DYNAMIC NETWORK SERVICES
Rapid launch of software driven services to keep
pace with client desires and expectations (B2B,
B2C, 5G) supporting a Multi-sided platform model
as well as a Connected Industry Orchestrator
model.
GROW + TRANSFORM THE CORE
MIGRATIONS/DEPLOYMENT
Ultra lean management of legacy network, in
parallel to accelerated migration towards new
stack and deep densification of Fiber & 5G.
Needs a two speed approach to migrate and
sustain while building the new
THE PERVASIVE
NETWORK
OUTSIDE IN INSIDE OUT
THEPERVASIVENETWORKISDRIVENBYINSIDEOUT,AND
OUTSIDEIN,TRANSFORMATION
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20. MULTI-SIDED
PLATFORM MODEL
CONNECTED INDUSTRY
ORCHESTRATOR
SCALENEWGROWTHBYMAKINGALEAPTONEW
MODELSANDCOMPETENCIES
KEY
CHARACTERISTICS
SUCCESS
FACTORS
Superior bundling of
mainly self-owned
services, incorporating
acquired rights to high
–demand, exclusive
content at premium
fees.
Secure, reliable and smart
connectivity with open APIs,
digital management and
operations capabilities.
Specialized network
clouds/value added services
supported by real-time AI.
Strong identity
management capabilities,
API driven, agile & open
platform. Subsidising
elements of the service
proposition, open to self
cannibalization.
Exclusive content.
Advanced customer
segmentation & targeting
via content/viewership/
user analytics.
Consolidated, mega-network.
Hyper-lean operating model.
Wholesale & Retail Smart
Connectivity Provider B2B2X
model. Outcome based
connectivity monetization.
Maximize reach via
ecosystem of partners,
customers and
developers.
Digital/Mobile pure
play bringing Digital &
Core together across
products and support
channels.
Mobile focused,
innovative and agile
service factory. Digital-
first care & operating
model.
DIGITAL MOBILE
ONLY ATTACKER
VERTICALLY INTEGRATED
SERVICE PROVIDER
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21. 21Copyright © 2018 Accenture. All rights reserved.
RIDINGONTHEDISRUPTIVE
TRENDS,THECSP CANREINVENT
ITSELFASANESSENTIALPART
OFAUSER’S
DAILYDIGITALROUTINE

22. 22Copyright © 2018 Accenture. All rights reserved.
Look for new growth
opportunities in B2C
and B2B
Become embedded in the
digital routine of
consumers, and provide
platforms and vertical
services for enterprises.
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23. 23Copyright © 2018 Accenture. All rights reserved.
Launch a digital
transformation
program
Revisit competitive
positioning, business
models and services in B2C
and B2B markets. Enforce
the rotation to a relevant
platform play.
23Copyright © 2018 Accenture. All rights reserved.

24. Move to hyper-
personalization for
customers
Adopt user-centric,
community oriented,
data-driven experience
design. Leverage the
credibility of telcos around
trust, security,
privacy and proximity.
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25. Update technology and operating models
Build software-defined, highly reliable, secure data
highways, specialized network clouds and smart
connectivity, including 5G. Anchor multi-sided, cloud-
based platforms increasingly on edge devices for reliability
and security, allowing telcos presence, proximity and trust
advantage.
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26. 26Copyright © 2018 Accenture. All rights reserved.
Success demands a departure from today’s
models and competencies if CSPs are to
scale new growth models.
PICK
YOUR
PLAY

27. TOROTATETOTHENEWSUCCESSFULLY,CSPS
NEEDTOMODIFYTHEIRDNA
• The future of work evolves from
“jobs” to “roles” in a liquid model
• Workforce development, training
and capability building become
central tasks
• Operating model transformation will
blur traditional foundational models
and establish agile collaboration
• Empowerment is at
the center of future
performance management
OPERATING
MODEL
• Hyper-individualization and
contextualization of services
• Future service models manage the
tradeoff between Revenue Per
Customer and Reach
• Investment and capital allocation
ruled by platform economics and (for
product development and innovation-
related processes) - flexibility over
efficiency
BUSINESS
MODEL
• Customers expect that services
understand them and not the other way
around
• CSPs need to adopt
a more customer-centric, data driven,
experience designed approach
• Channel specificities
and audiences will be managed
consistently through a system
of engagement
• Co-creation and continuous learning
to improve the experience
CUSTOMER
ENGAGEMENT
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28. • CSPs will operate software defined
and virtualized pervasive network
stacks
• Key capabilities are centered around
providing digital highways,
specialized network clouds and
smart connectivity
• Network transformation follows a
smart combination
of customer centric and efficiency
driven approaches
NETWORK
• CSPs need to operate
a digital multi-speed IT and network
stacks to get on with the digital
portfolio as soon
as possible
• Federation of decoupled platforms
across IT and Network
• IT and networks will be a central part
of day-to-day value creation, and the
engineering teams will have to become
true business partners
TECH
STACK
NEWGROWTHMODELSNEEDANEWAPPROACH
TOITANDNETWORKINVESTMENT
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29. Unleashing trapped value through
cost optimization is just the first
step. We help you reinvestsmartly
and scalenew growth in a future
business model that stays true to
your core.
TUNEUP
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30. Copyright © 2018 Accenture. All rights reserved.
FORMORE
INFORMATION