bridging the internet and telecom worlds - cicomra :: les desea un

Soc Classification level 1 © Nokia Siemens Networks

Bridging the Internetand Telecom worlds

Expocomm, September 2008

2 © Nokia Siemens Networks

Service Trends


Web2.0 Megatrends

1. The Web is being reengineered…

2. Empowered devices and consumers…

3. Web or Mobile ? It doesn’t matter…

4. Representing and living in the Web…

5. A new wave of innovation, partnering and media consumption…

Consequences: Changing Business Models and Success Factors…


MEGATREND #1: The Web is being re-engineered From Web 1.0 to Web 4.0

Web 1.0

1990 - 2005

Developing the basic Internet platform and routing network. Making information widely accessible via HTML.

Web “X-end”

300bps – 100kbps

Major carrier investments in global networking infrastructure rollout, focus on capacity expansion and connectivity to the masses

2000 - 2010

All about enhancing the Web User Interface, open programmable systems and connecting people

Web “Front-end”

100kbps – 10Mbps

Partnerships with media companies in the content space, Internet-based social networking applications, advertising business models, IP control systems & QoS

Web 4.0

> 2020

Immersive worlds, man-machine convergence, alternate realities, sensory experiences, personal online agents, hyper-broadband

Web “Front-end”

> 100Mbps

Fundamental shift in business model – new subscriber needs, communications far beyond voice, biotech forms of access, rise of the “Matrix” operator?

Web 3.0

2010 - 2020

The Web becomes intelligent, sentient, aware of its information and able to understand and anticipate its users needs

Web “Back-end”

10Mbps – 100Mbps

Key role to play in defining next generation IP network topology, focus on user-centricity, complete integration of devices into the network application layers

Web 2.0

TIMEFRAME

CYCLE

SYSTEMS

ACCESS

ImplicationsFor Telcos

IMPLICATIONSFOR TELCOS

Bridging Internet and Telecom / Author / Date


#1: Today there is a heterogeneous zoo of Web2.0 offers in the market - the Web2.0 cube

User interest

social content

regional

globalVideo

generic

special

Purpose & motivation

Service origin



#1: Rapid increase of regional social networksExample Germany (Oct. 2007)



MEGATREND #2: End-user devices are becoming powerful nodes fuelling the growth of P2P network traffic and file sharing

Limits Shattered

• Faster CPUs, 3D graphics • Massive storage capabilities• Crystal clear displays• Media-centric

Always Online

• Multiple PDP contexts• Multiple access bearers• Application-driven• Web-centric

Intelligently Connected

• Push instead of pull• P2P applications• Intelligent User Interfaces• Node and presence aware



#2: Consumers are becoming empowered entrepreneurs Web2.0 - The rise of user generated content and „The Prosumer“

VideoVideo

Everything is going “OPEN”: open source, open social, open platforms, open content

Access for individuals to coding resources, knowledge, user groups, forums, blogs and tools to create almost anything digital

Consumers are changing their media consumption habits – classical models of entertainment programming are fast becoming obsolete

Distribution of media via the Internet is quicker, faster and reaches the target audience via ”hyperdistribution”



MEGATREND #3: People no longer distinguishing betw. Web & Mobile It’s ONLY about the Web

Broadband data via a mobile modem on a desktop PC is a viable alternative to fixed line Internet SP’s

Applications are no longer separatedbetween the telecommsdomain and the Internet domain

The average end-user doesn’t know (or care)about the technical difference between the delivery method of an SMS and an MMS message

By default, network operators no longer have voice subscribers, they have Internet subscribers, voice is just an application

Access to IP multimedia video, audio, tv and radio services is no longer a constraint from today’s mobile phones

Source: Nokia Smartphone 360 Survey, 2007

Bridging Internet and Telecom / Author / Date Bridging Internet and Telecom / Author / Date


#3 People no longer distinguishing betw. Web & Mobile All modes of communications shifting to IP, and becoming richer

Voice

Text Messaging

Multimedia Messaging

Music Player

Still Camera

Video Camera

Social Networking

Mobile TV

FM Radio

High-Speed Modem

Web Browser

Navigation

Email

Organiser

Instant Messaging

Weather Station

Online and Offline Gaming

Search Engine

Download Application

File Sharing



MEGATREND #4: People want to represent their identities in the Web The Web represents a means to live life through one (or more) online personas

People upload some of their most trusted secrets with total strangers to connect socially and feel part of a community

The MILLENIAL generation:-teenagers are invested in showing people their IDENTITIES

Facebook and MySpace represent two best examples of the social networking phenomenon

Facebook already allows people to email, IM, SMS, MMS and media share – from their mobile phones!

Space, time and distance are irrelevant in an online world for creating relationships: BLOGGING is creating a richly connected globalconversation

Social Networking sites allow people to feel like they have more control over their Bridging Internet and Telecom of self.


#4: People want to represent their identities in cyberspace. The dawn of the Three-Dimensional Internet is upon us… but at a price?

People are creating 3D identities, called "Avatars" and letting these versions of themselves roam in virtual always-online worlds

SecondLife represents the closest thing to an online parallel universe, complete with governance and a self-sufficient economy

The Web is constantly learning from us, about us, tracking and storing our every online move, purchases and preferences



MEGATREND #5: Web2.0 players innovate in a rapid pace and diversify into the Telco service domain

Fixed Voice


2004H1 2006H12006H1 2005H2 2005H22005H1 2004H2 2004H2 2005H1

Yahoo! Google MSN eBay/Skype

Mobile Voiceand Data

InternetAccess

Takes a stake inBPL venture

Partnershipwith BT

Partnershipwith SBC

Partnershipwith Verizon

Free access inHeathrow Airport

Free Wi-Fi inSheraton Hotels

Google, SkypeFund fon.comWi-Fi startup

Free/Paid Wi-FiIn San Francisco

Free Wi-Fi inMountain View, CA

Mobile search

Mobile IM

Mobile local search

Yahoo! Go Mobile

Mobile IMMobile search

Skype partnersWith Eplus

Handset with Nokia

Mobile local search

Handset with Ericsson

Handset with Motorola

Mobile email

Skype for PDAsPartnership

with 3

Free PC2PCcalls

Acquisition ofTeleo

Acquisition ofMedia Stream

PC2PCvideo calls

Partnership with MCIPC2 Phone calls

Acquisition ofSkype

Free PC2PCcalls

Partnership with Net2Phone

Google TalkFree PC2PC calls

PC2PCvideo calls

PC2 Phone calls to30 countries

PC2PCvideo calls

Acquisition ofDialpad

PC2 Phone calls

Phone2Phone VoIP

Source: Capgemini TME Lab Analysis


Consequences: Telecommunication providers have to define their Web2.0 strategy now !

Fixed and wirelessbroadband as enabler

• Broadband is the growth segment in telecommunications

• Increasing access capacity at low flat-rate prices

Services independent of the network

• Broadband as enabler for all kinds of 3rd party services

• Market boundaries diminish through multi-play bundles

• No vertically integrated prime contractor anymore

Rapid usage growth and innovation

• Strong growth of Web2.0 community services

• „Free of charge“business models

• Expansion towards communication services

• Web2.0 offers start to cannibalize telco provider‘s• Legacy business – e.g. voice and SMS• New growth opportunities - e.g. YouTubeTV vs. IPTV

• Telcos are in danger to become a broadband bit pipe only – multi-play is reduced to multi-access

Urgency to act



Web 2.0 are successfully cannibalizing the usage of telco servicesIn France, the time spent on telco services now constitutes only 53% of the total timespent on communication. Estimated time spent on communications per person in France per week (%)

53%

Telcos

X1.9 4 hrs 25 mins2 hrs 23 mins

IM

Email

SMS

WirelessVoice

Wireline(incl. VoIP)

95%

Telcos47%

OnlinePlayers

GoogleYahooMSN

SkypeAOL

1%2%5%

18%

75%

30%

15%

8%

21%

26%

20052000

Source: Capgemini estimates based on Arcep reports, IDATE, „Telecom 2.0: emerging usages and implications for carriers“, June 2006. MSN Report, „Europes Online Youth“ ; Comscore Media Metrix, Worldwide IM usage, May 2006



The Web2.0 market dynamics change the business success factors for Telco‘s

Telecom Business Web2.0 - Combined Telco & Internet Business

Competitive pricingcustomer attraction in a highlycomparable service landscape

Convenience and personalizationcustomer retention in a highly fragmentedservice, content and contacts landscape

ModularityShort-time-to-market and more variety by integration and win-win-partnerships with ASPs

End-to-endVertically integrated and standardized services solely developed by the provider

Boundless communication and sharingDifferentiation by most attractive platform for user interaction and user generated content

Predefined servicesDifferentiation by selling pre-defined service packages

Cash-in to indirect revenue sourcesUtilization of the customer information for persona-lized advertising and up sell of application bundles

Direct usage chargingMaximum exploitation of users‘ willingness-to-pay within the contract period



ForewordWeb2.0 service strategy development


Typically telco providers own the critical assets for the Web2.0 business

Business success factors


Acc

ess

inde

pend

ency

Transparency on Quality of ExperienceActual network and user profile information

Coordination of service building blocksInfrastructure for flexible 3rd party integration

Premium interactive servicesFeature rich communication platforms, e.g. voice

Customer intimacyUser data as basis for advertising and up sells

Assets for differentiation

Convenience and personalization

Modularity

Boundless communication and sharing

Cash-in to indirect revenue sources


Telco Value Contribution to Web2.0



Communication providers can select out of four basic Web2.0 service strategies

Aggregate established Web2.0 services

Establish own Web2.0 service

Provider engagement

Serviceaccess

Web2.0Goes mobile

Web2.0 aggregation

UbiquitousWeb2.0Platform

Web2.0Platform

Fixed & Mobile

Fixed



Web2.0 Solutions & Evolution


Flexible solutions for the Internet

Supporting your Web2.0 strategy

Efficient service control on any access and deviceConvenience & personalization


Community solutions Boundless communication and sharing

Subscriber data management Customer data mining to cash-in to indirect revenue sources

Service Delivery Framework Modularity for 3rd party appli-cation integration and mash-ups

23 © Nokia Siemens Networks Bridging Internet and Telecom / Author / Date


Example for a Web2.0 application: VideoSharing Blog to YouTube• Jill is sitting in the park waiting for her friend to arrive. Suddenly she notifies that an funny street

performance is taking place close to her. She decides that she would like to post the view on YouTube by using her 3G phone.

• Jill makes a phone call to the “YouTube number”, establishing thereby the SIP registration to the IMS. After listening to the pre-recorder announcement, she opens the camera slide and starts streaming the video to the blog server.

• The video is directly uploaded to YouTube using Jill´s YouTube account, and when Jill completes the recording, she receives an SMS (and/or email) with the link to the video, so she can forward it to her friends.



Example for a Web2.0 application: Start simple…. Identify Me / Central Identity

SMS

Rich Video Share2nd Life

Dating

VisualMailboxGaming

(Converged)Messaging

Voice Call



IMS combines the strength of both:internet and mobile world

Vertical Telcoservices Horizontal Internet services

IMS

BlendedServicesVoice

CS

Data

PS

VoIP

VoIP

Narrowband Broadband

• IMS enables new community based and blended services• IMS enables internet business models

Bridging Internet and Telecom / Author / Date Mobile World Congress 2008 Barcelona


Examples of Internet mash-ups


SDFGoogle Map (location)

Friendster (social network communities)

Google Calendar (calendar)

General Web services (data) – example: EBay

Last.fm (music)

Mash-up (i.e. browser executable scripts,

widgets, player, web page)

SDF with API/SDK capabilities positions Telco in a comparable

position to ISPs such as Google and Yahoo in terms of openness to speed up more innovative long tail services

Japanese music & video crawler from YouTube &

Last.fm

Flickr (pictures)

YouTube (videos)

Starbucks coffee finder

Hotel locations with pictures and videos

Map & location based social community – Ebay & GoogleMap


Connecting the Web2.0 services with mobile users

Aggregation

Operator

Internet communities

et.al

User

User sends content from mobile phone

User views content with any phone or PC browser

• Easy upload of content photo, live video, … , to internet media communities while mobile

• Works with every mobile phonedoesn’t need a dedicated xSP client

• Choice of multiple media communitiesusers choose the content sharing platforms and email destination for their upload

• Boost operator’s trafficvia MMS and 3G video calls



Mobilizing Internet communities –Business model• Mobilizing Internet communities

• allows to participate from huge existing community base and strong xSP brands

• generates new revenue from subscription fees and additional traffic

• will counterbalance by far the possible losses from substituted traffic and interconnection fees

Newtraffic

Servicefees

trafficSubstituted

Net Revenue

Interconnectlosses

Mobilizing Internet communities –highly popular applications with short returnon invest



Monetize your Subscriber relationship

The role of subscriber knowledge will evolve and generate new value chains. We have the solutions in place!

Network independent subscriber management is the key component of tomorrow’s multi-access network.

Subscriber data mining will enable new services e.g. advertising and knowledge brokering

Identity

Profiles

Preferences

Buddies

Services

Location

PresenceUsage

5 Bn peopleconnected

Operatorshave close & trustful

relationship to subscribers and communities

- a key value -



The advertisingopportunity

Each dimension of profiling doubles advertiser value

Purchasing historyCommunities TV channels watched (Sports, News & Info)Device Usage StatisticsDownloadsGamesGamblingFavorite PortalsRSS news feedsAttended MoviesInterestsShops at…

LocationPresence2G/3G coverageARPU/Account balanceWatched TV channel/clip# sent SMS/MMS# PI, av. Session lengthAd click rateCarrierDevice ManufacturerDevice PlatformDevice Capabilities…

Demographics Behavior Context

AgeGenderZip Code, Country Race / EthnicityNationalityLanguageEducationOccupationIncomeMarital statusFamily SizeHobbies (Sport, Travel, Entertainment, Shopping,..)...



Case history:Blyk

Customerchallenges

• Launch innovative new advertising-funded mobile services in highly competitive marketplace

• Minimize complexity and costs

Our solution • Supply, build and host the entire

operation of Blyk's core network

Business benefits

• No infrastructure investments• Rapid roll-out• Full flexibility in core network

operations

“We have full confidence in Nokia Siemens Networks’ability to provide a fully hosted solution for Blyk and its unique way of doing business.”

Kai Friman,Head of Member Operations,Blyk

Real Business Solutions

Problem? Solved.



Summary


Summary: Web2.0 – Engage or stagnate !

Act timely Utilize your assets Monetize Web2.0

• Avoid cannibalization of legacy business

• Secure new growth opportunities*

• Implement new web business models

• Transperency on Quality of Experience

• Coordination of service building blocks /Mash Up

• Premium interactive services

• Customer intimacy

• Exploit indirect revenue sources

• Achieve short term com-munity business impact:‒ +7,5% Revenues‒ -7,5% SAC

*e.g. IPTV vs. Web2.0 TV, SMS vs. IM



Monetizing the subscriber information

Operators have close & trustful relationship to subscribers and communities- a key value -

The role of subscriber knowledge will evolve and generate new value chains.

Network independent subscriber management is the key component of tomorrow’s multi-access network.

Subscriber knowledge will enable new services e.g. advertising and knowledge brokering

Multitude of business models


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