Social Networks and Telecoms Convergence


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Fixed-mobile convergence, communities and the challenges of subscriber base (and revenue) protection. The role of Web 2.0 business principles and techniques.

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Social Networks and Telecoms Convergence

  1. 1. Fixed-Mobile Convergence Summit 2007 SOCIAL NETWORKING AND CONVERGENT SERVICES Vladimir Dimitroff Sanderson & Neale
  2. 2. Social Networking - What is all the noise about? <ul><li>Networking existed before the Pyramids; it is an inseparable attribute of society </li></ul><ul><li>The wider meaning of ‘social’: interconnections at family, community, economic, political and… ‘social’ levels </li></ul><ul><li>21 st Century networks: the digitalisation of communities; Main implications: </li></ul><ul><li>- the disappearance of distance (global village) </li></ul><ul><li>- the shrinking of time (instant interactions) </li></ul><ul><li>- exponential growth </li></ul><ul><li>What all this means to business? To an inherently network business (telecoms)? </li></ul>
  3. 3. Social Networking - Fundamental principles <ul><li>Based on shared needs : from fundamental needs (to stay in touch, be part of a ‘family’) to niche interests (hobby, profession, faith, political ties). </li></ul><ul><li>The value of a network is exponentially related to the number of ‘nodes’ in it. (How powerful is a team of one member? How useful was a single telephone?) </li></ul><ul><li>Some ‘nodes’ are more connected than others! </li></ul><ul><li>- quantity of connections, frequency of interactions and depth of relationships </li></ul><ul><li>- influence and influencers </li></ul><ul><li>Communities Dominate*: why you can never ‘manage’ or ‘run’ a digital social network. </li></ul><ul><li>* “Communities Dominate Brands” by T. Ahonen and A. Moore, 2006 </li></ul>
  4. 4. Social Networking, mobile and convergent telecoms <ul><li>‘ Social networks’ before convergence: voice, SMS, IM/chatrooms, mobile gaming, mobile front-ends for SN portals </li></ul><ul><li>Mobile communities currently number 50M members worldwide, to grow to 174M by 2011(ABI Research) </li></ul><ul><li>Examples of community / SN applications and services: </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>The ‘other’ convergence: telecoms and (broadcast) media </li></ul><ul><li>MTV ‘Mobile Junk 2.0’: uploading mobile UGC to web sites  downloading to mobiles  voting  broadcast on MTV channels (MTV, VH1, Nickelodeon, Comedy Central) </li></ul><ul><li>“ Nobody is as clever as everybody” </li></ul><ul><li>Alan Moore, co-author of “Communities Dominate Brands” </li></ul>
  5. 5. Generation ‘ C ’ (for c ontent) <ul><li>Social networks thrive around interactions and content </li></ul><ul><li>Content exists within the interactions, but also separately as object of exchange and consumption. This can be </li></ul><ul><li>- professionally created for mass consumption </li></ul><ul><li>- created within the community for sharing </li></ul><ul><li>From ‘the audience of one’ to the UGC explosion - and back (the ‘long tail’ effect) </li></ul><ul><li>The example of video content: </li></ul><ul><li>TV </li></ul><ul><li>video clips </li></ul><ul><li>‘ see what I see’ </li></ul>
  6. 6. What’s different with convergence? <ul><li>Convergence is a journey : </li></ul>Fixed Mobile Bundles Converged billing Dual mode / UMA IMS / S I P Full IP integration
  7. 7. Challenges of convergence - and opportunities <ul><li>Fundamental difference between the fixed and mobile phone: </li></ul><ul><li>- The home line is ‘family’ ( shared ) and just needs ‘to be there’ for everyone and work reliably </li></ul><ul><li>- The mobile phone is highly personal , people identify with their phones and have very specific preferences </li></ul><ul><li>2/3 of mobile MOU takes place from within the home (O2 Germany) </li></ul><ul><li>The challenge of pricing/economy expectations </li></ul><ul><li>- BT Fusion started marketing ‘cheap’ mobile calls; their learning experience: value to people with poor mobile coverage, now fast surfing is in their message </li></ul><ul><li>- TIM Unica still shouts ‘Parli gratis…’ </li></ul><ul><li>The opportunities of added value </li></ul>Image source: BT Fusion
  8. 8. Potential adopters and target communities <ul><li>So, who would be our ideal converged subscribers? </li></ul><ul><li>Demographics: four generations exist side by side in today’s marketplace: </li></ul><ul><li>- Veterans born before 1946 </li></ul><ul><li>- Boomers born from 1946 to 1964 </li></ul><ul><li>- Gen Xers born from 1965-1980 </li></ul><ul><li>- Gen Yers (Millennials) born after 1980 </li></ul><ul><li>There are significant differences in how quickly and completely these groups embrace technology and how they learn and communicate. Gen Yers prefer to learn in teams or networks , using multimedia, and learning experientially (like video gaming). Gen Y decision-making is much more collaborative </li></ul><ul><li>Counter-intuitive trend: >50% of active MySpace members are older than 35 </li></ul><ul><li>Behaviour/lifestyle segments (DiamondCluster research): </li></ul><ul><li>- &quot;technophiles“ - mainly males in their late teens to early 30s; already on a mobile contract, above average usage of cable TV, VoIP, broadband and mobile phone services. </li></ul><ul><li>- &quot;convenience seekers“ - adults in their late 20s to mid 40s in a household with children, and above-average buyers of mobile services. </li></ul>
  9. 9. Potential adopters and target communities <ul><li>‘ Social’ networking exists in the business community, too: </li></ul><ul><li>- 60% of workers now travel for business and the figure keeps rising (IDC) </li></ul><ul><li>- 30.3M mobile professionals worldwide, growing to 41.1M by end of 2007; only 21% equipped for mobile email (Gartner) </li></ul><ul><li>- CRM and SFA seen as leading applications to be deployed (IDC) </li></ul><ul><li>Music is not only a huge industry, but also one of the main shared subjects around which many (digital) social networks are formed </li></ul><ul><li>‘ Hybrid’ communities and convergence model variations: the Skype / T-Mobile / Sony case </li></ul><ul><li>Mobile gaming is a vast </li></ul><ul><li>(and growing) industry: </li></ul>Source: Telephia / eMarketer Inc.
  10. 10. ‘ Show me the money!’ <ul><li>Generation ‘ C ’ (for c a$h) </li></ul><ul><li>One lucrative target community is that of digital traders: </li></ul><ul><li> users who joined online communities are </li></ul><ul><li>- spending 54% more money in total </li></ul><ul><li>- paying 24% higher prices </li></ul><ul><li>- earning 6 times as much per month </li></ul><ul><li>- winning 25% more auctions </li></ul><ul><li>Resulting in 56% increase in sales for e B a y </li></ul>
  11. 11. ‘ Show me the money!’ <ul><li>Monetizing social networks on converged services : </li></ul><ul><li>Direct operator revenues (subscription and/or traffic) </li></ul><ul><li>- Trend towards flat rate mobile data drives usage of services </li></ul><ul><li>- Similarly, ‘at home’ speed/cost will boost uptake </li></ul><ul><li>Advertising: variety of evolving models </li></ul><ul><li>- AdMob served 1Bn mobile ads in its 1 st year </li></ul><ul><li>- Search advertising on mobile expected to explode </li></ul><ul><li>Brand sponsorships (of relevant communities) </li></ul><ul><li>Community-specific revenue (merchandise, UGC) </li></ul><ul><li>Already worth $3.45Bn in 2006 (IHT). Data traffic will soon dominate over voice and data revenues will be the main source for operators by 2014 (ABI Research). </li></ul><ul><li>Notable deals by Vodafone with MySpace, YouTube, eBay and Google Maps. </li></ul>
  12. 12. Wrapping up - a checklist <ul><li>Have you got a clear, long-term convergence roadmap ? </li></ul><ul><li>Do you know your target communities ? </li></ul><ul><li>Are you building strong content capabilities ? </li></ul><ul><li>- through acquisition and in-house production </li></ul><ul><li>- through strategic alliances and partnerships </li></ul><ul><li>- through the power of UGC </li></ul><ul><li>Think stakeholders : are you ready to accept the customers as your employees - and investors? </li></ul><ul><li>If you answer positively, you are on a firm path to long-term success! </li></ul><ul><li>Q&A ? </li></ul>
  13. 13. Thank you! Vladimir Dimitroff Director PRISM Consulting (UK) Ltd 22 Cheviot Drive Charvil Reading RG10 9QD United Kingdom Phone: +44 (0)7947034944 E-Mail: [email_address] Austria • Czech Republic • Germany Hungary • Italy • Malta • Poland • Russia Spain • Switzerland • Turkey • UK