Daytona Sessions vol.1 - Johan Ragnevad - Five years - an Internet eternity, a mobile operator...

5 years – An Internet eternity, a mobile operator “soon”

Lessons learned from more than ten years of struggle

1 November 2007Daytona Sessions, Stockholm

Johan Ragnevad

© 2007 inCode. Proprietary and Confidential. All Rights Reserved

inCode Strategy & Technology Group provides Telecoms and Media industry clients with a complete range of business consulting services

Market analysis and business strategy

Market analysis and Market analysis and business strategybusiness strategy

Supply chain and financial analysisSupply chain and Supply chain and financial analysisfinancial analysis

Technology strategyTechnology strategyTechnology strategy

Spectrum strategies and usages

Architecture roadmap options

Technology and vendor evaluations

Operational requirements: OSS, BSS, CRM

License bid strategy and bid preparation

Market research, competitor analysis and strategy options

Trial and launch plan development and management

Business demand modeling

Business case and pro forma financials

Procurement and Strategic Sourcing: RFPs, vendor selection and management

Customer loyalty and churn management

Investment supportInvestment supportInvestment support

Business opportunity assessments

Financial analysis

Technical and Market due diligence

Operational strategies

...to customers from BBC, Microsoft, Nokia and Ericsson, to NTT DoCoMo, Sprint, 3, Verizon and Xfera


Five years on...Has our message changed?

Northstream report, Autumn 2001 ”Bitpipe is not an ugly word”The 3G Business Case

-Bid Book vs Reality

”Enable horizontally layered service network capabilities”


The mobile phone changed a multi-decade old stable growth curve

Source: Gapminder

GSM


Internet has moved from niche to everybody’s content & communication platform in 15 years

Source: Gapminder

PC Subsidies


While the Telecom world focussed on carrier-grade quality and features, the market chose the good-enough and coolest

WAPGPRS

ISDNX.400 digitel

MMS

3G

http://en.wikipedia.org/wiki/Image:Jeff_Bezos_2005.jpg


One ecosystem works... (finn fem fel)

$

$$ Third parties

$ $ $


Separation of access from content has not materialised in the mobile world

End usersApplication

Service Developers

Operators

End usersApplication

Service Providers

Internet ServiceProviders

Access

Applications/Services

Access

Applications/Services

Internet

”Mobile Internet”


Something has happened...

Mobile Data Traffic

2006 2007

HSPA/3G(EDGE)

Flat fee


Mobile operators still(!) can enable key capabilities addressingInternet limitations

Identify!

Alert!

Pay!

More than

2.8 Billion

mobile phones


So, when? Soon??Not if done the old-fashioned telecoms way...

2000 2001 2002 2003 2004 2005 2006 2007

Several MMS infrastructure

contracts signed

Inter-working established in

US

Standards bodies 3GPP and 3GPP2 cooperate to

try and enable MMS

interworking

National interworkingcommon in Europe, but globally, still

on the drawingboard

MMS development in networksApproximate timeline

1990s

MMS standardized by

3GPPMMS traffic is growing,

especially in Europe and North America

MMS service

launched by nearly all

operators in Europe*

* Informa, ”Mobile Communications”, 18 March 2003


Vodafone live! is dead,Long live the mobile Internet!


A range of approaches will continue to be seen for a couple of years…

Web-basedmobile services

Proxy-basedmobile browser

Mobile operator WAP portal

Bespoke handset centric solutions

Choice of content

Operator service creation involvement

Dedicated server No Yes Yes Yes

# of supporting handsets

Service examples


Opening up network capabilities in a web-centric manner is a logical step in the evolution of the network operator business

Required level of operator involvement

in service creation

High

Medium

Low

Incremental service

revenues

Number of services

Core operator revenuesCore operator revenues

VAS revenuesVAS revenues

““Long tailLong tail”” revenuesrevenues

Examples: Premium SMS, MMS, mobile portal services, Blackberry, mobile TV,

navigation, etc.

High

Medium

Low

Operator “capability retailing”: Services created by SME, SOHO, individual

developers or private individuals

Voice, data, SMS, voice mailA web-centric approach canlead to cost benefits in theVAS revenue segment, andopen up the new “long tail”

revenue segment


Aiming at “long tail” revenues in a web-centric model can be a wayfor operators to foster and benefit from innovation

Operator offering:• Open API access• Sample apps, SDKs• Simple pricing• Nationwide operator

access

End-to-end services:• Media downloads• Content sharing • Communities• Navigation (GPS)• Messaging

New revenues from:• 3rd parties and

private persons creating services

• Transforming selectedideas into own-branded services

Technology and business Technology and business enablers for enablers for ““capability capability

retailingretailing””

A: “Bit-pipe” scenario: Device vendors and Internet companies aiming at increasing their share of customer ownership

A: “Bit-pipe” scenario: Device vendors and Internet companies aiming at increasing their share of customer ownership

Operator networkOperator network

Data flat rate plansData flat rate plans

B: “Web-centric” scenario: Operators positioning themselves as innovation enablersB: “Web-centric” scenario: Operators positioning themselves as innovation enablers

Example initiatives:• Nokia Ovi• Apple iTunes• Samsung FunClub• Yahoo Go• “Google phone”

Operator networkOperator network


There is no five-year plan for the Internet, but a manifest and predictions can still be used to enable ”mobile internet”

”It’s the value pipe, stupid”

Mobile operators will

- Embrace the dominating end-user business model of separating access from content

- Acknowledge that a free market approach with creative chaos is more likely to increase mobile internet user value

- Aim at free distribution to build user base and subsequently capture long tail & advertising revenues

- Excel at access

- Enable continued Internet innovation towards mobile, identifiable, immediately reachable and paying-capable users

– an eternity on the Internet:

iTunes: Four years to 3 billion songs sold

Youtube: 18 months from launch to acquisition for USD 1.65 billion

Facebook: 3.5 years to become the 7th most visited website in the world

–”soon” in the telecoms world:

MMS: Five years from first device to today’s usage

3G: Five years to reach 150 million devices

Daytona Sessions vol.1 - Johan Ragnevad - Five years - an Internet eternity, a mobile operator...

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