SAARC Elite Networking Forum

Transcription

1 SAARC Elite Networking Forum 1

2 OTT Threat and Mobile Network Operator Response New Strategies for OTT Disruption Martin Jasinski September

3 Agenda Market Background & Projections Key OTT Impacts on MNO Core Business Tactical Opportunities using OTT methods Thoughts on Strategic Directions 3

4 South Asia Region by Numbers Subscriber Growth by Technology 0.8 % Unique Subscribers Annual projections for mobile subscribers as a % of total population, indicate that 3G and 4G adoption only starts to match 2G/2.5G by Mobile internet Mobile internet > 2G Mobile internet > 3G + 4G 0 Q Q Q Q Q SIMs per unique subscriber ~1.89 average 0.6 % Market Penetration 3G and 4G market penetration remains relatively low for the next 3 years Total Mobile internet Mobile internet > 2G Mobile internet > 3G + 4G 0 Q Q Q Q Q GSMA Wireless Intelligence 4

5 South Asia Region by Numbers Smartphone Adoption and Technology Penetration 45.00% Smartphone Adoption Smartphone adoption shows strong growth in region, driven by access to low cost Smartphones 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Q Q Q Q Q But very low market penetration for 4G for the next 3 years 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Market Penetration% Q Q Q Q Q G 3G 4G GSMA Wireless Intelligence 5

6 Mobile = 65% of India Internet Traffic 2nd ranked global mobile internet access Source: Source: Statcounter, 5/15. 6

7 Mobile = 41% of India e-commerce More mobile commerce than most other countries *Mobile e-commerce penetration defined as % of total e-commerce sales made via mobile devices. Source: Morgan Stanley Research. 7

8 India Ranked #1 or #2 Market for Global OTTs WhatsApp = India is the single largest market Source: Facebook, WhatsApp (per Facebook earnings call and statement by Neeraj Arora of Whatsapp), LinkedIn (per Company blog, press release, and earnings), Amazon, Twitter. YouTube data per Google.c 8

9 Global Impact of OTT on MNO Revenues The telecommunications industry will lose a combined $386 billion between 2012 and 2018, from customers using over-the-top (OTT) voice From applications to The 2020 decline we expect will come that OTT mostly VoIP from will lost cost revenue the global on telecoms international industry calls $479bn and on roaming lost cumulative fees. revenues, which Ovum report, quoted in Fortune Magazine (July 2014) represents 6.9% of cumulative total voice revenues. Ovum analyst Jeremy Green (July 2012) Global annual SMS revenues will fall down from US$120 billion in 2013 to US$96.7 billion by 2018, due to increasing adoption and use of Over-The-Top (OTT) messaging applications. Informa WCIS Forecast (2013) 9

10 Further impact on control of customer experience With the advent of smartphones, MNOs have been losing control of the mobile customer experience it s all about handsets, mobile OS and mobile apps now MNOs are providing the enabling connectivity service and maintain an important billing relationship, but their value is more and more commoditized 10

11 So what can MNOs do (Part 1)? Opportunities for Creative Tactical Response New Revenues from Roaming Additional Revenues from Messaging Locking Down the Enterprise Opportunity 11

12 1. Revenue Potential From Silent Roamers Customers have been educated not to use data roaming services. Need to find new ways to encourage data roaming usage International roamers find different ways to avoid paying perceived high roaming: Local SIM Roamer buys a local SIM card and uses it for voice (and data) with local tariff Wi-Fi Roamer uses Wi-Fi for data roaming when travelling Silent Roamers Roamer is in a visited network area, but switches off data (and voice) services 12

13 1. Roaming - Thinking Outside the Box Generating roaming Revenue from Silent Roamers, with Wi-Fi VoIP Calling Plans TATA Worldwide Network Mobile Set with White-Label App Voice/SMS/Web MNO APP International Roamer PSTN CALL Home MNO Voice Trunk Closest POP Wi-Fi Network GSM Network MNO APP National Roamer MNO APP Home Wi-Fi Revenue sharing between partners 13

14 1. Roaming Value Added Roaming Solution Flexible and superior method for data roamer service delivery US PCEF PGW/GGSN UK PCEF PGW/GGSN SG PCEF PGW/GGSN Product Description Internet access closer to roamer s current location instead of routing home Virtualised extension of packet core functions outside home market Home operator maintains full control over roamers Product Features Globally redundant RBO sites in UK, USA, and Singapore Uses 3GPP standard interface for remote policy management Complementary to IPX/GRX service Highly flexible and adaptable to your network and roaming operations Real-time policy management and full visibility over roaming plan enforcement Supports existing billing and data-clearing processes 14

15 2. Messaging There is Growth in A2P SMS P2P vs A2P/P2A Messaging Revenue Projections for Asia-Pacific region Source: Ovum Mobile Messaging &U Traffic Forecast 15

16 2. Messaging - A2P SMS Growth Comes With Threats SMS ecosystem shift & the surge in SMS threats MNOs lose between $2B-$5B in annual revenues due to SMS grey routes Bypassed A2P International SMS Spam, Fraud affecting Customers & Partners Flooding of network High CAPEX & OPEX for Fraud Prevention Revenue Leakage due to bypass Revenue opportunity missed Customer Satisfaction Disputes with Partners Reversals Network capacity issues High Cost of doing business CAPEX Investment Complex Deployments Technology Obsolescence 16

17 2. Messaging - Protection with Managed SMS Firewall Safeguard Revenue, Network & Subscribers from harmful SMS threat SMS Source - CSPs, Enterprise OTTs, & Hackers, Spammers IGPs SMS/A2P Hubs MNOs/MVNOs Centralized & carrier grade SMS firewall hosted on TCL signaling network Customer MNO 17

18 3. The Enterprise Opportunity Beyond traditional connectivity Focus on E2E Solutions Enterprise Mobility BYOD, MDM, Security, IMSI management, Field Service, Workforce Management UCC Voice & Video communications and collaboration Focus on QoS, managing SLAs, improving security M2M SIM management, connectivity, security, vertical industry application support, multi-imsi solutions XaaS Infrastructure-as-a- Service, Platform-asa-Service, Softwareas-a-Service Connectivity-as-a- Service, Security-asa-Service Network to Application: A Mobile Network Operator is an end-to-end enterprise service provider who can offer single SLA for the entire solution stack 18

19 Where is the value created in M2M Hosting / SaaS / CaaS (0-10% of deal) Devices / Hardware (15-50% of deal) Network (5-14% of deal) Service Delivery Platforms (1% of deal) Application Platform (1% of deal) Vertical Applications (30-70% of deal) Analytics (1% of deal) Professional Services (0-20% of deal) Vertical solution providers, rather than carriers, are capturing the bulk of the value 20

20 So what can MNOs do (Part 2)? Longer-term Strategic Opportunities Pragmatic Models for Profitable Co- Operation New ways of monetizing mobile data Network as a Service 21

21 1. Co-Operation and Co-Opetition Pressures combine to make co-operation more attractive Regulatory Pressure Fulfilment of regulatory mandates Market Pressure Threat from OTT, through service redefinition and revenue losses Operator co-operation Technology Pressure New service rollout and regional coverage Consumer Pressure Consumer choice and consumer protection 22

22 Cooperation Example 1: One Store in South Korea Integrated Android app portal from SK Planet, KT and LGU+ Apps are compatible with devices on all 3 MNO networks and are portable if a subscriber changes the provider 152M app downloads since launch in mid-june % increase in downloads as compared to March-April for individual app stores 23

23 Cooperation Example 2: Hulu in USA Joint Venture of major USA content providers Disney, Comcast NBC, Fox working together to provide streaming subscription service - both free (Ad supported) and premium Over 9M paid subscribers (Q1 2015) Expected to reach $1B in revenue in

24 2. Mobile Advertising Revenue Opportunity Massive re-allocation of advertising spend about to happen Source: KPCB, Internet Trends

25 2. New Ways to Monetize Mobile Data Establish market-wide mobile platforms for advertising $s and content delivery Opportunity to monetize subscriber demographic data provide additional info to ad networks to increase add value (e.g. subscriber type pre-paid or post-paid, phone type, location, socio-demographic info, etc.,) and delivered through a common exchange platform Enable new monetization schemes, such as Sponsored Data, where content sponsors pay for user data access to specific apps or sites (no Net Neutrality impact) 26

26 Why Consider Sponsored Data? New Revenue, Digital Inclusion, Subscriber Data, New Business Models Incremental wholesale data revenue Opportunity to activate no-data plan subscribers Monetize subscriber demographic data Enabling enterprise and Ad-driven business models 27

27 Content Publishers Social Networks M2M Handset Manufacturers Software Publishers 3. Network as a Service Integrating the service with the network assets for competitive advantage Enabling future digital services which are tightly connected to your own Network and interoperable with other MNO partners: M2M Solutions Rich Communications Services Network SDK VoLTE Network API ViLTE Network APIs 28

28 In Conclusion MNOs have many assets that enable them to compete on their own terms Feature MNO OTT Network Assets Customer & Billing Relationship Service Diversity Ability to offer E2E Solutions Single SLA Network API Exposure Complex VAS Solutions 29

29 Thank you! 30