Trends in Telecommunications: Global & Local. September 2012

Transcription

1 Trends in Telecommunications: Global & Local September 2012

2 Agenda Global Telco trends Fixed Communications Global Mobile Communications - Global Mobile Communications Hong Kong

3 Mobile Computing 5 th Major Computing Cycle Source: The Mobile Internet Report, Morgan Stanley, December 15, 2009

4 (2009) Mobile Internet larger than Fixed Internet in next 2 years Source: The Mobile Internet Report, Morgan Stanley, December 15, 2009

5 Google Predicts Mobile Web traffic to exceed PC Web traffic by end 2012

6 Most IP Traffic growth in the next 3 years will result from Internet Traffic, predominantly Fixed Internet Traffic. Major growth driver being video traffic. Source: Cisco VNI, 2011 Exabyte = 1 Bn Terabytes

7 Bandwidth Drivers User behaviour shifts to multi-media streaming, cloud applications, online storage etc Proliferation of connected devices e.g. tablets, smartphones, Smart TVs, cameras etc Resolution of media content continues to enhance and viewing experience keeps improving, e.g. HD, 3D, UHD 4K

8 Agenda Global Telco trends Fixed Communications Global Mobile Communications - Global Mobile Communications Hong Kong

9 Fixed Line Substitution After 125 Years, Landlines were surpassed by Mobiles in 2002 Source: KPCB, ITU International Telecommunications Union

10 Landline Office Phones to be obsolete by 2017 Smartphones set to become the primary business tool for communication by 2017, particularly bring your own devices (BYOD) Paying line rental seen as a waste of expenditure. Source: Virgin Media Business UK CIO Poll, Aug 2012

11 Don t right off Fixed Network Operators just yet Source: PCCW

12 Source: ITU FTTH in high demand worldwide

13 Hong Kong s global FTTH/FTTB ranking Source: Fibre to the Home Council

14 What s driving FTTH/FTTB demand? Ultra Fast Broadband demands for Intelligent Homes Ull Source: PCCW Future TV all IP based Entertainment devices large screen, high definition

15 Agenda Global Telco trends Fixed Communications Global Mobile Communications - Global Mobile Communications Hong Kong

16 Who is using a Mobile Device today. 6.1Bn services 87% Global pop n Practically Everyone!

17 How often are they using their mobile device?

18 Mobile users are now transacting on their devices Mobile Commerce expected to grow from $8.8Bn in 2012 to $28.7Bn in 2015 (US) Source: Barclays Capital. Mobile commerce, including banking, payments, coupons and ticketing

19 Tablets accelerating the Mobile Commerce trend 68% of tablet owners say they have used their tablet to make a purchase Source: e-tailing Group

20 Some Fast Facts Of the 6.1 Bn Mobile Subscribers, China makes 1.05 Billion. (17%) Penetration of Mobile services in Asia Pacific - from just 12 per cent in 2002 to 78 per cent by end 2011 Mobile operators in Asia Pac investing ave of 16.3 per cent of CapEx to Income ratio Pre-paid services still dominate in Asia Pac (84 percent) versus 66 percent in Europe and 15 per cent in USA/Canada Source: GSMA, Facebook

21 Some Fast Facts (continued) 27% of U.S. Households are now mobile only (not fixed line connection) Ericsson expects there to be 5Bn Mobile Broadband connections by 2015 Facebook 2x traffic on mobile vs. web Social Networking becoming the primary communication hub (FB 500 Bn mins/mth, Voice Bn mins/mth) Source: GSMA,,Facebook

22 Still in the early days with Smartphone adoption Source: Business Insider

23 Apple Increased sales QoQ Quarterly Sales of iphone iphone, iphone3, iphone3gs, iphone4 Source: Asymco

24 Android Phone sales have ramped even faster 4x Source: KPCB, Gartner, Morgan Stanley Research

25 2 million iphone 5 pre-orders in first 24 hours Source: Asymco 33 million sales in first quarter

26 Mobile OS Down to a two horse race Source: Statcounter Global Stats

27 The Battle for Control of the Convergence Ecosystem: 5 Potential scenarios Source: McKinsey Future Devices article Nov 2011 How to Win Conditions required Device Centric Win Platforms Win Social Networks Win Mobile Operators Win Content Providers Win End to End Device Producers dominate the converged market and own the end-user relationship Players such as Google or Microsoft dominate by controlling the OS across Mobile, TV & PCs. SN platforms such as Facebook control comms, gaming and UGC Operators control the user experience, content & services aggregation space Media conglomerates & content players control media & content aggregation and owning key apps and services One or a few device vendors dominate Controlled E2E environment acceptable to users OS is Mobile or TV dominated by one to two players itunes CDP loses dominant position SN becomes leading and unifying platform SN breaks cyclical pattern longer term stickiness Operators maintain tight value chain thru customisation Operators extend into TV, Devices etc Global consolidation in media and content Content remains core revenue generator

28 The Battle for Control of the Convergence Ecosystem: 5 Potential scenarios Source: McKinsey Future Devices article Nov 2011 How to Win Conditions required Device Centric Wins Apple Wins Platforms Win Google or MS Wins Social Networks Win Facebook Wins Mobile Operators Win? Wins Content Providers Win Amazon Wins End to End Device Producers dominate the converged market and own the end-user relationship Players such as Google or Microsoft dominate by controlling the OS across Mobile, TV & PCs. SN platforms such as Facebook control comms, gaming and UGC Operators control the user experience, content & services aggregation space Media conglomerates & content players control media & content aggregation and owning key apps and services One or a few device vendors dominate Controlled E2E environment acceptable to users OS is Mobile or TV dominated by one to two players itunes CDP loses dominant position SN becomes leading and unifying platform SN breaks cyclical pattern longer term stickiness Operators maintain tight value chain thru customisation Operators extend into TV, Devices etc Global consolidation in media and content Content remains core revenue generator

29 Agenda Global Telco trends Fixed Communications Global Mobile Communications - Global Mobile Communications Hong Kong

30 HK One of the world s most competitive mobile markets Source: Merrill Lynch, Wireless Intelligence, OFTA Statistics

31 High Smartphone penetration Hong Kong (61%) is the third highest globally. Source: TomiAhonen Consulting & Asymco.com research, Dec 2011

32 The mobile data usage explosion (4x YoY)

33 Major Benefits of LTE Improved spectrum efficiency: 2-4 times better compared to HSPA LTE Offers Double Digit Improvement on cost/performance vs. existing technologies Much Lower Latency Spectrum flexibility - deployed on existing mobile bands e.g. 900, 1800, and 2100 MHz Lower Network complexity and cost Source: OFTA

34 Key Issues for Hong Kong Mobile Operators Declining EBITDA from 06/07 to 10/11 Three major players: 2.3%, 1.3%, 2.0% decline respectively Voice Revenue rapid decline Roaming revenue under pressure substitute products, price focus Increased Data Revenue not bridging the gap Market saturation Higher retention and acquisition costs Maintaining primacy of the Customer Relationship (from the OTT players) Market disruption from network upgrades with LTE etc Operating Cost pressures: Higher Network Utilisation Retail & Cell Site Rental costs Systems upgrades to support Customer Centricity Mobile Operators need to move up the value chain!

35 The Future is Mobile Is there any doubt?

36 Thank You Peter Smith Director, Wavelength Consulting