True value through convergence
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- Derick Waters
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1 True value through convergence Mobility Solutions Colin Horton Marketing Manager Europe and Africa Residential telecoms issues Either no coverage or.. Multiple providers & multiple technologies, creating Multiple bills (voice & data, mobile & fixed) Multiple numbers Multiple devices Multiple end-user experiences Multiple customer care contacts Fixed Voice Mobile Voice & Data Fixed Data Combined Residential & Mobile Voice & Data Proprietary information - Lucent Technologies 2
2 true Market Trends Seamless Communications! Cable Internet Active Phone Book Video Communications Unified Messaging IP Network 2G/3G Mobile / BB Roaming Presence and Location ilocator Multicast Service 802.xx Access Packet Mobile Network Circuit Mobile Network People simply want services that fit their lifestyle and are available anywhere, anytime. Proprietary information - Lucent Technologies 3 Global Market Trends Users Consumer Teen/Youth Machines Vertical Markets SMB Business Enterprise Consumer Tomorrow Yesterday One-Size Fits All Web Browsing Gaming Content Voice M-commerce Simple Apps Connectivity e-learning Audio Photos Video Vertical-specific Location-based s Smart Phone Increased Device Fragmentation PDA Network computers Data-capable Phone Computer Phone PC Camera Phone Circuit 2.5 G WWAN PAN Limited Public WiFi WLAN Cable DSL 3G WWAN IP Core Fiber to the Premises Wireless Fabric Devices Networks Proprietary information - Lucent Technologies 4
3 Roadmap to NG Lifestyle Enhanced Current Focus 2007 And beyond Converge Communication Converge wireline/wireless telephony services /cellular Mobile HSD (HSDPA) Blended text and voice services Presence enabled services. E.g. PTT Wireless/Wireline VoIP over wireless & wireline User profiles spanning multiple CPE devices Unified portal service access Migrate Existing Voice Service to VoIP - Expand Into Next Generation Lifestyle Multimedia content services and messaging Video telephony / conferencing Interactive gaming Intelligent agent services Real-time video communication Entertainment video on Mobiles IP communication services span text, voice and video services A unified services architecture enables converged services Proprietary information - Lucent Technologies Verizon Wireless Nextel AT&T Wireless Sprint PCS Cingular 3Q03 4Q03 1Q04 2Q04 EasyMobile Fresh Carphone Mobile Market Reality Today Quarterly Subscribers, Net Adds Average Revenue Per User!" #$"%& T-Mobile USA Proprietary information - Lucent Technologies Easy Mobile/Carphone 6 0 1Q01 ' 2Q01 3Q01 4Q01 Average Price per Minute 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 Minutes of Use 3Q03 AT&T Wireless Cingular Nextel Sprint PCS Verizon Wireless T-Mobile 4Q03 1Q04!" #$"%& 2Q04
4 Operator Drivers Leveraging Opportunity to Retain Sub Ownership Retain ownership of the home subscriber Better quality, more integrated services than competition. Differentiate services through compelling Mass Market offers Easy to use, custom service bundles aligned to target market segments Consistent branding and common user experience Take share of telecom wallet through transparent, access agnostic services Wireless, broadband (WiFI DSL & cable), Includes seamless handover Accelerate new service introduction Home control and application centralization simplify service deployment and consistency Leverage common applications infrastructure to reduce costs Proprietary information - Lucent Technologies 7 Market Drivers : End User Perspective Service Bundling One device all my services, regardless of location. Integrated (wireless/fixed), single provider voice and data service gives equivalent capabilities to existing office communications systems, whether in the office or traveling on the road. Enhanced by a more visual user interface real time menu choices on handling calls and specifying importance Integration of multi-media messaging and calling allows users to choose voice, text, image, files, or video to most efficiently express their concepts and collaborate remotely. View accessibility and status of other work group members graphical presence icons that can initiate communications. Key End User Features : Seamless handover between access domains Common service look and feel across domain Common Buddy Lists across services One-Stop Billing and Customer Care support Proprietary information - Lucent Technologies 8
5 What s Driving the Change.. Regulatory Changes Local Number Portability IP Voice Telephony IP Data Spectrum Maturity of Key Technologies + 3G Spread Spectrum xdsl DOCSIS + WiFi VoIP (QoS) IP Multimedia Subsystem Standards Softswitch & Packet Core Converged Devices MIMO/BLAST Source: SBC s 2003 Analyst Conference 11/14/03 Reduced Barriers to Entry Trend Bundling Grand Slam Voice, Data, Video/Entertainment, Mobility Proprietary information - Lucent Technologies 9 Consumer Voice Convergence DSL/Cable broadband used for backhaul to network convergence gateway Move POTS phones to VoIP adaptor Add WiFi access point/router for indoor mobiles and Internet access Dual-mode Mobile phones can use either outdoor network or indoor WiFi WiFi Mobiles & Dualmode Wireless Mobiles DSL / Cable WiFi Access Point, Router DSL / Cable modem VoIP IAD POTS phones Residence Proprietary information - Lucent Technologies 10
6 Convergence In Action: Mobile Professional!" % & % & *! "# $ % & '! "# $ ( % (& #"+,., )! "# $ /"+ 0 1 Proprietary information - Lucent Technologies 11 Converged Network Scope Converging Voice -Lower access costs - Extend subscriber footprint Wireline Voice (Ckt & VoIP) One Number Wireless Centrex Wireless Voice (Ckt & VoIP) Full IMS Compliance -Increase revenues through new service offerings IP Centrex Web Portal Service Control Converged Packet Network Presence and Location Push to Talk Wireless Multimedia Converging Data -Lower network costs with common platforms Wireline Data IP Mobility Wireless Data Network convergence enables new hybrid services should be consistent across multiple networks Proprietary information - Lucent Technologies 12
7 Evolving to Lifestyle Feature Driven Value Driven Lifestyle Driven LOW Differentiation, Stickiness & Revenues HIGH Implication Definition Capacity and throughput limited by available network bandwidth Not typically context sensitive Low interaction with end users Only offer static information Table stakes services Driven by technology, not end user needs Low operator differentiation High end user churn Low end user willingness to pay Difficulty sustaining operator revenues Easily replicated by all operators Simple combinations of feature driven services Enhances and enables more complex communication More context sensitive Higher levels of interactivity Integrated voice and data services help end users Cross the Chasm, leading to behavioural change vs. pure data services Are highly interactive, context sensitive & location aware Don t ignore continued importance of voice Offer subscriber personalization to provide stickiness Deliver value by meeting end user lifestyle needs Increasing voice & data traffic on the network Significant & sustained operator revenues Reduced end user churn Differentiation between operators Proprietary information - Lucent Technologies 13 Roadmap of Potential How do we get there Feature Driven Value Driven Lifestyle Driven Instant Messaging Push to Talk Voice Messaging Picture Messaging Video Clip Alerts Video Clips on Demand Ringtones Screensavers Weather/Traffic information Business finder Mapping services Currency Converter Downloading Management apps on handsets Voice Control Emergency Call Person/Asset Tracker Communication Entertainment Convenience Safety & Security Active Phonebook Instant Conferencing Instant Video Wireline Displacement Bundles Quiz s Voting Gaming Single/Multi Player Gaming Location based Gambling Live Wire Music Portal Finding Places Personal Organiser Location enabled M-advertising and M-Coupons M-Payments Panic Alarm Personal Security Guard Navigation Service Family Communications Portal Community Bulletin Boards Live Wire Plus! (Personal Preference setting) Dating Time Out Portable Travel Agent Activity Agent Guardian Angel Health Monitor Home Security Emergency Service Solutions Focus Proprietary information - Lucent Technologies 14
8 $4B $3B $2B $1B 0 Where s the new revenue coming from? The Consumer 40% increase in revenue-per-year Instant Messaging Unified Live Wire Communications Push-to- Talk IP TV Location-Based Service Media/ Content Activity Agent Portable Travel Agent LIFESTYLE DRIVEN FEATURE DRIVEN INCREMENTAL MONTHLY ARPU Lifestyle - Rich media entertainment - Interactive - Context sensitive - Highly personalized $5.47 $1.23 $3.34 $ Lifestyle services help the operator maintain relationships with subscribers, regardless of how they access services Source: Lucent Primary Market Research and Modeling, 2004 Proprietary information - Lucent Technologies 15 Emerging Advertising Models Offer Opportunity Advertising Landscape IM Spam Delivery Method Push Opt-In/Out Pull Pop-ups spam National broadcast advertising Direct Mail Local broadcast Advertising Banner Ads Billboards Local Newspapers Trade Magazines Cable TV Advertising Electronic Supermarket Coupons Local Magazines Traditional Search Engine Ads *MTV Google AdWords Contextual Ads (Google AdSense) Google AdWords Smart Malls SMS-based advertising Amazon Recommendations LBS drive-by ads Contextual Ads (Amazon) Opt-in profile-driven LBS Ads Locationbased search Area of high privacy concern Acceptance contingent on consumer opt-in and high degree of personalization in push advertisements Yellow Pages Dumb Not highly targeted Mostly passive pull advertising (billboards, non-targeted banner ads) Targeted Ad Characteristics Smart Highly targeted based on factors across time Past behavior Current needs Current state (e.g., Location) Emerging technologies Advertising models are changing in both delivery method and modality, creating an opportunity to leverage networks in new ways 035a, ,LUCCON01A.ppt Proprietary sbg, information - Lucent Technologies 16
9 To Deliver Lifestyle, the Approach to Service Delivery Needs to Change How would you send a picture to your PTT Group? Individual Using Point Solutions IM PTT Location Media/Content IM (Presence,AAA) PTT emrs MPC/ISG PDE ISG emrs Blended Lifestyle Leveraging IMS Platforms IMS Platform PTA Live Wire Activity Agent Communities IM PTT ISG Presence & Availability LSS MPC/ISG LSS+MGW ISG Supported by Point Solutions Supported by a Common IMS Platform IMS Platform IM IM (Presence,AAA) IM PTT PTT IMS: IP Multimedia Subsystem IM PTT Location Unified Comm. emrs PTT ISG Presence & Availability SD-HLR Home Subscriber Location MPC/ISG LSS emrs Media Resource PDE MPC/ISG Unified Com Unified Comm. LSS MGC/MRC/MGW/eMRS Unified Comm. LSS+MGW emrs Media Resource SD-HLR Home Subscriber 1. Point Solutions are expensive and don t readily support new lifestyle targeted blended services 2. Core Networks need to embrace the IMS Service Delivery Framework Proprietary information - Lucent Technologies 17 Active Phone Book A key building block for Blended Simple interface to unify all communications across fixed and mobile end points for Contact management Media management (Voice, Video, , IM, Collaboration etc.) Common directories and addressing across applications Presence, Availability, Location and Policy Sharing across applications Improved interface and context sensitivity driving usage and ARPU increase Communication services Enhanced content Proprietary information - Lucent Technologies 18
10 The Convergence Trend The Move From Technology Centric to a User Centric Model Virtual Bundling to address end-users desire for a unified communication experience that delivers voice, video and data services Brand Brand extension extension into into new new segments segments and and new new service service areas areas Moves Moves the the share share of of telecom telecom wallet wallet Dependent Dependent on on Access, Access, network network and and device device Network IP Initial Convergence of Network Elements at physical layers Delivers Delivers OpEx OpExand and CapEx CapEx control control Delivers Delivers carrier carrier grade grade security, security, reliability reliability and and performance performance Requires Requires unified unified operations operations environment environment Delivers Delivers interoperability interoperability through through open open standards standards Leverages Leverages legacy legacy network network strength strength Value over IP - Complete Network Convergence at Every Layer to EFFICIENTLY deliver a full seamless LIFESTYLE experience Delivers Delivers end-to-end end-to-end control control over over customer customer experience experience New New revenue revenue and and improves improves customer customer stickiness stickiness Access Access and and Device Device independence independence High High speed speed service service deployment deployment Maintains Maintains intelligence intelligence in in the the network network Proprietary information - Lucent Technologies 19 Summary Different stages and steps for convergence. Convergence allows a better experience for the end user and new opportunities. Increased revenue for Operator and reduced Churn. Architecture advantages. IMS is the basis of fixed/mobile convergence IMS puts the Value in IP TM Proprietary information - Lucent Technologies 20
11 Thank you Proprietary information - Lucent Technologies 21
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