Global Telecoms Megatrends for today State of the global market Telecoms –mature and yet growing...
Transcript of Global Telecoms Megatrends for today State of the global market Telecoms –mature and yet growing...
Global Telecoms
Megatrends
BMI-T Breakfast Briefing
14th October 2014
Brian Neilson
@brianbmit
Themes for today
State of the global market
Telecoms – mature and yet growing
What’s hot and what’s not (Chilli chart)
TLAs (like OTT)
Telecom company strategies
Industry convergence
Vertical sectors, disruption and enablement
Does Cloud make Rain? – user adoption
Telco evolution
The network is part
of the fabric of
IT…
Price trend example: fixed broadband services
Source: ITU, 2013
Developing
World
Developed
Impact of
competition …
80% decline in 4
years
Developed
Mobile traffic growth outstrips forecasts – by a mile
http://www.itu.int/net/newsroom/wrc/2012/features/imt.aspx
ITU: Assessment of the global
mobile broadband deployments
and forecasts for IMT
Actual data traffic in 2010 was more
than 5 times greater than some of
the estimates prepared for a
previous report.
Not only that, but in 2011 some
operators even experienced a higher
level of actual traffic than a previous
report forecast for 2020.
8
Vid
eo e
xp
losion
, In
tern
et of
thin
gs, C
loud
com
put
ing
...
Significantly cheaper smartphones ... most phones are smart
Banks as telco players
Passé - lingering 2014 Beyond
Downloading …........ ‘Internet TV’
Ongoing price wars …… significantly cheaper data …
OTT content App stores
Digital TV
Media consolesVOD
?
?
Streaming media
Wearable technology
Social media Search, video
Advertising
Wi-Fi Off-loading
LTE, VDSLFree WiFiNetwork capacity management,‘Customer stickiness’
Next generation applications
?
Pervasive devices & databases
Telcos as banks … M-payments
FTTH, Triple play
Chilli ind
ex –
ma
rket im
pa
ct
Voiceover WiFi
?
9
Vid
eo e
xp
losion
, In
tern
et of
thin
gs, C
loud
com
put
ing
...
Significantly cheaper smartphones ... most phones are smart
Banks as telco players
Passé - lingering 2014 Beyond
Downloading …........ ‘Internet TV’
Ongoing price wars …… significantly cheaper data …
OTT content App stores
Digital TV
Media consolesVOD
?
?
Streaming media
Wearable technology
Social media Search, video
Advertising
Wi-Fi Off-loading
LTE, VDSLFree WiFiNetwork capacity management,‘Customer stickiness’
Next generation applications
?
Pervasive devices & databases
Telcos as banks … M-payments
FTTH, Triple play
Chilli ind
ex –
ma
rket im
pa
ct
Voiceover WiFi
?
Next industries to be disrupted: education,
transport, retail, medicine (Prof. Michiu
Kaku)
Globally connectivity will make up only 8% of the total $1200bn M2M market in 2022, traffic even less
$39bn – for connectivity services
Most is devices & installation (2/3) and the ‘service wrap’ (1/3)
Transmission is just the tip of the iceberg – most of the revenue lies in other layers of the value chain –including the service delivery platform
Automotive the next big industry
M2M is still relatively small in the local market
Global M2M connectivity revenue, 2022
0
5
10
15
20
25
30
35
40
Connectivityservices
Serviceenablement
platform
Connectivity Connectivitysupportplatform
Mobilenetworktraffic
M2M
connect
iity
serv
ices
revenue (
$bn)
Source: Machina Research, 2012
A melange of TLAs
Are you
B2B
or
B2C?
or
B
B
C
2
2
OTT
Poss
ibly
with
SalesForce
Google Ad-words
YouTube
Social media …
Private Wi-Fi (user owned APs)
• Already being exploited for the Wi-Fi offload
Public Wi-Fi (HotSpots)
• Opportunity for the carriers to partner to provide the service.
Carrier class Wi-Fi (carrier APs)
• Open for the carrier to leverage with the goal to improve customer experience, to lower the capital unit cost, and to improve ARPU.
Wi-Fi offload solutions – fixed line strikes back
Source: Wireless Spectrum Needs Vs. Wi-Fi Offload Solutions, Dr. Hossein Eslambolchi, 2013
Reasons for carrier Wi-Fi and offload
Basic service
Public spaceCommercial
space
Content / advertising
/ Serviceopportunity
Commercial service
Carrierextension
Public Wi-Fi models (hotspots and hotzones)
Source: BMI-T, WiFi 2.0: Global and South African Market Impact - taking the market by stealth, 2014
Differences by vertical
http://www.huawei.com/minisite/gci/en/index.html?utm_campaign=GCI2014&utm_medium=HWsites&utm_source=de
Industry Competitiveness Index
Huawei surveyed over 1,000 executives from 10 industries as to their ICT investment plans and the benefits they have seen
Some industries are innovating more rapidly than others
While some are in danger of being the next ones to experience serious disruption …
Education, transportation, retail, medicine (Prof. Michiu Kaku)
Vertical focus
One of the things all operators
need to do
Fill niches with tailor-made
connectivity solutions
Operators are still the best in town
at connectivity
They are also leading players in
Data Center-based services
What telcos are doing – Europe
What else
Operational transformation
Value-based pricing
New services
“Telcos are well placed to expand into
cloud and act as the primary sales
channel”
Source: A report for European Telecommunications Network Operators’ Association (ETNO), A.T. Kearney
Revenue growth for telcos (is there any?)
Revenue growth vs
traffic growth
Different drivers
Telcos have to be
intimately involved in
applications – either
directly or indirectly – in
both consumer and B2B
markets
Cloud services will
comprise up to 5% of
telco revenues
Source: A report for European Telecommunications Network Operators’ Association (ETNO), A.T. Kearney
Gartner Says Worldwide Public Cloud Services Market to
Total $131 Billion
http://www.gartner.com/newsroom/id/2352816
Strong demand is anticipated
for all types of cloud services
offerings.
5 global players gravitating to: Amazon, Rackspace, VMWare, Google, Microsoft
Comms-aaS still the largest SaaS market
CRM moves to cloud.
IaaS fastest growing globally, and where many start their journey in SA.
Public Cloud $27bn (excl. advertising, BPaaS) Up 18% in 2013; IaaS up by 47%. BMI-T forecasts R4bn market in SA.
Advertising48%
BPaaS28%
SaaS15%
IaaS 5%
Security3%
PaaS1%
‘Five characteristics of cloud’:
Shared, virtualized infrastructure
Self-service access
Elastic resource pools
Consumable output
User-based usage tracking.
“Communications-as-a-Service” is already widely adopted
Managed firewalls, email and web content filtering, virus and spam detection, fax-to-email …
Offer enhanced security
CRM, best typified by Salesforce and MS Dynamics
Does Cloud make Rain?
‘Hybrid cloud’
approach suits
larger companies:
First implement
applications in a private cloud
environment, getting familiar with the
architecture
Then gradually or selectively implement
some elements in the public cloud
environment – not a case of “all or
nothing”.
Over time you may elect to expand the
range of applications or implement a
hybrid solution, which allows bursting into
public cloud when the situation demands.
What else … out of the Data Centre?
Datacentres become ecosystems: Cloud datacentres will “become much like a breathing and living organism with different
states”.
UC&C in South Africa
According to BMI-T’s research into
cloud computing most of the revenues
from Cloud locally are in Comms-aaS
– hosted Exchange, email & web
filtering, fax etc.
It depends what you count
Unified communication is an umbrella term for
many different elements.
Video conferencing and messaging are strong
performers but most of the attention still focusses
around voice.
Including Comms-aaS … R500m (and
growing)
Counting the UC revenues of Microsoft, Cisco
and PBX vendors … another few hundred
million.
Audio & Videoconferencing … a further
R100m
You could also count SIP trunks … R1.5bn
So at almost R2.5bn … this is real
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SDN … because today’s static architecture is ill-suited to the dynamic computing and storage needs including:
Changing traffic patterns
The “consumerization of IT” (and BYOD)
The rise of cloud services
“Big data” means more bandwidth
Challenges faced by network designers:
Complexity that leads to stasis
Inability to scale
Vendor dependence
Computing Trends are Driving Network Change
www.opennetworking.org
To win in the highly competitive and rapidly evolving connectivity market, service providers must differentiate their portfolios with richer Service Level Agreements (SLAs) that address today’s and tomorrow’s requirements.
Service providers must also adopt go-to-market techniques that tailor IT and connectivity services to specific enterprise verticals, shifting the emphasis from the network to the end-customer’s business requirements.
Vertical focus
Value proposition in the higher education vertical might speak to collaborative multi-site research, or community cloud, and the corresponding Data Centre Connect managed service.
Likewise, a bundled service in the financial sector would speak to the need for ultra-low-latency connectivity between trading locations.
http://www.ciena.com/resources/white-papers/Monetizing-Networks-in-the-Cloud-Era.html?src=PR
Convergence and disruption are impacting on all businesses
Computing Trends are Driving Network Change
Dynamic nature of IT requires a fresh look at the network… and a fresh approach to using telecoms services
Vertical solutions (and value chains) are a key part of operator strategies
Telcos need to be involved in content and applications, one way or another
Cloud is one of the “Next Big Things”
Telcos are well positioned to deliver Cloud services
They need to embrace OTT and partner / enable
The value chain of “Next Big Things” consists of much more than connectivity
Case in point: M2M and the Internet of Things
Summary