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OVUM KEYNOTE

P R E S E N TAT I O NThe Five New Industry Realities (and What You Should Do About Them)

R I C H A R D M A H O N YGlobal Director, Consulting | Ovum



NOBODY ISTOO BIG TO FAIL



NOBODY ISTOO SMALL TO SUCCEED



Reality 1: The pace of change will accelerate

Industry drivers

1. +1bn connections in 4 years

In the next four years, another billion cellular connections will be added

3. Traffic doubles in 2 years

‘18 105K PB – ‘20 212K PB

2. Things double in five years

‘16.3bn consumer devices Up 107% from 2017

1. Global cellular connection 2015-22 2. Cellular traffic by service 2015-20

3. Global installed base of connected consumer devices by type, 2015-22

0%

20%

40%

60%

80%

100%

2015 2020

% t

ota

l ce

llula

r tr

affi

c Other data

Communications

Social networking

Web browsing

Music

Games

Video

-

5

10

15

20

2015 2016 2017 2018 2019 2020 2021 2022

Bill

ion

s

Other smart homeSmart utilitiesSmart securitySmart appliancesSmart hubsSmart speakersMedia streamersSmart TVsTV STBsVR headsetsWearablesTabletsSmartphones Source: Ovum

Source: Ovum

0

2E+09

4E+09

6E+09

8E+09

1E+10

1.2E+10

Fixed broadband Mobile subscriptions

Source: Ovum

Source: Ovum



A shift in market power

Leading group of CSPs has grown less than 4% CAGR since 2009 Leading group of ICPs has achieved a greater then 4X revenue growth since 2009

Source: Ovum Source: Ovum

Leading ICP Revenue GrowthLeading CSP Revenue Growth

Represents a shift in the monetary power within the industry

$0

$100

$200

$300

$400

$500

$600

$700

$800

2009 2010 2011 2012 2013 2014 2015 2016 2017

ICP

Re

ve

nu

e (

$b

n)

Leading ICP Revenue GrowthAlibaba

Tencent

Facebook

Microsoft

Google

Amazon

Apple$0

$100

$200

$300

$400

$500

$600

$700

$800

2009 2010 2011 2012 2013 2014 2015 2016 2017

CS

P R

eve

nu

e (

$b

n)

Leading CSP Revenue GrowthSoftBank

KDDI

Charter

Comcast

China Tel.

NTT

China Mobile

Verizon

AT&T



Reality 2: A new internet reality

By 2022 27% of the spend on network infrastructure worldwide will be from 32 internet players

2017 2018 2019 2020 2021 2022

Fixed CSPs $43 $45 $46 $49 $51 $55

Mobile CSPs $40 $41 $40 $43 $46 $49

ICPs $16 $20 $25 $29 $34 $39

$-

$10

$20

$30

$40

$50

$60

Fixed CSPs Mobile CSPs ICPs

Network capex ($bn)

300 Fixed CSPs

100 Mobile CSPs

32 ICPs



Reality 3: A frictionless reality

Source: Ovum

Technology will be more pervasiveMobile AR share of installed base, 2017–22



Reality 4: An artificial reality

Global annual AI revenue by technology

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

2017 2018 2019 2020 2021 2022 2023

Annual Artificial Intelligence Revenue by Technology, World Markets: 2017-2025

Machine Learning Computer Vision Natural Language Processing Machine Reasoning Strong AI Deep Learning



If the wrong man uses the right means, the right meanswork in a wrong way

““



A digital panopticon





Reality 5: A more local reality (proximity becomes critical)



Reality 5: A more local reality (proximity becomes critical)

The service edge is moving

N E T W O R K E D G EO N S I T E

R E S P O N S I V E N E S SC O N N E C T I V I T Y/

L O C AT I O N



What you do about these new realities?

Managing our new realities

A faster reality• Challenge your growth scenarios

• Manage change through Ovum

A new internet reality • New wholesale models

• Sell Amazon et al cloud services

• Focus local management

A frictionless reality • Promote new tech in the home (e.g. AR)

• Bring together the services – enable simplicity

An artificial reality • AI enable your network

• Personalise and automate

services

• Enable privacy management

• Take on the role of service broker

A local reality • Become very good at connectivity

• Invest local infrastructure

• Invest in local compute

• Invest in local services/content

• Pursue 5G

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