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Broadband with no Boundaries. Expocomm, Buenos Aires September 2008. Applications predominantly in Internet. Applications pre-dominantly in Internet. Multitude of business models. 5 Bn people connected. Broadband Everywhere. Our market vision of 2015 – the World connected. - PowerPoint PPT Presentation
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1 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Broadband with no Boundaries
Expocomm, Buenos AiresSeptember 2008
2 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Our market vision of 2015 – the World connected
Applications pre-dominantly
in Internet
Broadband Everywhere
5 Bn people connected
Multitude of business models
Applications predominantly
in Internet
3 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
What trends are currently changing our industry? From Voice to data
Social trends Mobile communication
everywhere
Richer communication
Traffic
ARPU
Cost
Economic trends Price erosion
New service Strategy
Technological trends Penetration of Internet
Broadband access Requirements for higher profitabilityin the world of communication
• Cheap voice for the mass market• Multimedia applications as a
commodity, and mobility• High bandwidth and capacity
at low cost
The current trends put operator demands in conflict with subscriber requirements: Profitability vs. The market wants ‘more for less’
4 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Content
• Service trends
• End-user insights
• Broadband service strategy development
• Broadband service examples & success stories
• Broadband Solutions & Evolution
• Summary
5 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Worldwide Service Provider Revenues (bn €) CAGR 2007-10
Broadband data is the growth segment in the telecommunications market
-1,1%
3,1%
-11,1%
14,9%
18,6%
10,1%
Mobile Data
Fixed DSL+Internet
Fixed Data IP/Enet
Fixed Data Legacy
Mobile Telephony
Fixed Telephony
Source: Nokia/Nokia Siemens Networks July 2007, Yankee Group Fixed Revenue
352 343 340 336
436 452 468 482 495
31 38 44 50 56
85107
130154 178
348
2844 40 35 31
11810979 95
126
2006 2007 2008 2009 2010
1.0201.080 1.130
1.180 1.230
Broad-band
6 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Mobile internet access is taking off - Worldwide 3G Penetration is hitting 15%
3G relates to WCDMA and CDMA2000 1xEV-DOSource: Strategy Analytics 2007
0%
10%
20%
30%
40%
50%
60%
70%
0 2 4 6 8 10 12 14 16 18 20 22
Quarters after Launch
Japan
Korea
Italy
UK
France
Australia
Portugal
US
3G Subscriber Market Share
7 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Broadband enables VoIP
Services become network independent
time
PSTN
PLMN
Data and IP
broad-band
broad-band
fixednetworks
mobilenetworks
VoIP
WLANdeviceFMC
mobiledevices(device FMC)
VoIP
traffic
WLAN unwires VoIPMobile devices support VoIP over WLANand affect mobile networks… and finally mobile broadband support VoIP as wellVoIP is the first service to become network independent
8 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
NTT Corp 55 5)
Vodafone 192
China Mobile 296
T-Com 50 5)
Verizon 53 4)
AT&T 76 4)
China Netcom 127 4)
Top 5 fixed operators (# subscribers)
Top 5 mobile operators (# subscribers) 5)
Top 5 internet portals (# IM and VoIP subscribers)
China Unicom 163
Telefonica Móviles 118
T-Mobile 92
Source: Nielsen/Netratings 03/06, Nokia Siemens Networks 2007
Benchmark of active user bases (subscribers in million)
4) Status: 31.12.05, source: company pages5) Status: Q3/2006, source: company pages
AOL 533)
eBay/Skype 212+1361)
Google 4672)
1) Members + VoIP users, 10/062) Site users, 10/063) Active IM users, 03/06
MSN 273)
Yahoo 223)
Major internet portals offer VoIP to their large active user base, threatening traditional telcos
9 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Market boundaries are diminishing – different players are increasing their addressable market
• Fixed and mobile Broadband Internet• Bundling with VoIP and home multimedia • Unification of Customer Relationship Management
• Mobile only broadband on the move and at home• Hybrid strategy with additional fixed broadband offer• PSTN substitution with home zone or VoIP on top of
DSL
• MVNO launch • Fixed broadband with VoIP on top as complementary
voice product• IPTV based home multimedia
Multi-play providers are often only virtually integrated, owning no or just one network, and offering services on the other side by utilizing others’ wholesale capacity.
MobileVoice
Fixed Voice
Broadband Internet TV
Expansion towards Quadruple-Play Offers
Hybrid provider
Fixed provider
Mobile provider
ISP • MVNO launch • Fixed boadband Internet with voice flat rate on top• Own community setup
Typical strategies
10 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Content
• Service trends
• End-user insights
• Broadband service strategy development
• Broadband service examples & success stories
• Broadband Solutions & Evolution
• Summary
11 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
The next step for applications is going mobileMobile portals Mobile broadbandContent
• Self-created• Online
distribution
Information• Search, maps• Creation • Publishing
Commerce• Online commerce of
physical and digital goodsWAPEDIA
Work• Mobile
push e-mail
Virtual environments
•Gaming•Dating•Etc…
Communities• Contact networks• Blogs• Recommending,
tagging, swapping content
12 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Large user segments change from being a passive consumer to an actively participating “prosumer“
» Web2.0 is deeply collaborative» Intensive communication over various channels
» Media discovery » Search and social interaction are replacing
media company control
» Terms of consumption» Consumers can time-shift, place-shift, and
device-shift content
» User-generated and selected content » Value of blogs, wikis, video clips and podcasts
etc) increases by tags and comments of others
The users become active part of the Web2.0
13 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
User loyalty is strongly decreasing
%
Likelihood of changing operator/ provider within next three months
3 2 2 4 194 2
7 4 4 3
34 4
6 5 6 5
9109
12 12 13 14
1933 37
4235 41 44
33
44 43
2838
35 3225
<1
21 21 3 2
1
Mrz 04 Sep 04 Mrz 05 Okt 05 Mai 06 Okt 06 Jul 07
Certain not to change
Very unlikely to change
Fairly unlikely to change
Fairly likely to change
Very likely to change
Certain to change
Don't know
Base: All main mobile phone users
14 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Data service quality, service portfolio and service bundles are major sources of subscriber dissatisfaction
%
SatisfactionTop 2 boxes (4-5)
%
70
74
71
65
60
57
55
55
53
49
40
Base: All main mobile phone users
Overall satisfaction
Voice/ reception quality
Network coverage
Brand/ image of network operator
Handset offerings
Tariff structure and bundle offerings
Customer care/ after sales service
Service offerings
Call cost
Quality of data service (including speed)
Data cost
Satisfaction level with current mobile operator overall and with respective aspects
N=603
31
33
33
31
28
26
26
23
22
21
17
39
41
38
34
32
31
29
32
31
28
22
21
17
17
27
22
25
23
27
29
25
26
5
4
6
2
5
6
9
5
10
5
9
1
4
1
4
1
3
3
5
11
8
9
11
3
19
21
3
1
2
3
2
1
4
5 - Very satisfied 4 3 2 1 - Not satisfied at all Don’t know/ refused
15 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Top 3 most influential factors for using broadband content services
Pricing of services
Ease of access
Speed of downloading
Quality of image and sound
Speed of browsing
Up-to-date service content
Popularity of services
Network quality or reception
Variety of content service category/ topics
Knowledge of the benefits/ information of the service
Speed of video/ audio streaming
Variety of information within content service category
Word-of-mouth of services
Ability to download to phone and PC at same time/ cost Base: All who have ever used any content service (184)
%
Prompted – Top mentions
User experience in terms of simplicity, quality, speed and ubiquitous availability is key
31
26
25
21
15
15
15
9
7
4
3
2
66
45
16 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Content
• Service trends
• End-user insights
• Broadband service strategy development
• Broadband service examples & success stories
• Broadband Solutions & Evolution
• Summary
17 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
The user‘s „why, where and how“ questions have to be answered convincingly
Staying connected with peers and personal content
Best available quality and speed on most appropriate device
Convenient usage avoiding cognitive effort
Premium interactive multimedia services• Enhanced Web2.0• Premium VoIP• Converged IPTV
Ubiquitous high speed access• Always best connected - wireless and wireline• Bandwidth evolution from xDSL towards xPON• Bandwidth evolution from HSPA towards LTE & WiMAX
Access independent service availability• Common access method and feature set• Call continuity between stationary and on the move
User desired benefits Key success factors for provider differentiation
„Why should I use it?“
„How complicated is it?“
„Where can I use it?“
18 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Providers competitive advantage – providing premium services ubiquitously and simply
Acce
ss in
depe
nden
t
serv
ice
avai
labi
lity
Premium
interactive
multim
edia services
Ubiquitous high speed access
„Why should I use it?“„H
ow c
ompl
icat
ed is
it?“
„How fast is it? Where can I use it?“
How to gain competitive advantages?
Multi-play
19 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Different broadband use cases have to be covered to maximize share on subsriber‘s wallet
Mobile TV
Stationary Internet(incl. basic VoIP)
IPTV home infotainment
• Web2.0 communities• Premium VoIP• Premium content
Inner multiplay area - Differentiation & Up Sell
Broadband ARPU estimate for active users of the service• Average Western Europe values • Only direct revenues, no advertising considered
Internet
At home / office
TV
On the move
Mobile Internet
8€ 2€
40€
20€
10€
Broadband multiplay arena
20 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Content
• Service trends
• End-user insights
• Broadband service strategy development
• Broadband service examples & success stories
• Broadband Solutions & Evolution
• Summary
21 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Quadruple play packaging is a megatrend in the market
Source: DTAG, 2006
Source: BT, 2005
Source: Wanadoo, 2006
Source: Cascade- A PCCW company @ NGN Asia, 2006
22 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Content
• Service trends
• End-user insights
• Broadband service strategy development
• Broadband service examples & success stories
• Broadband Solutions & Evolution
• Summary
23 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Price per Mbyte has to be reduced to remain profitable
Source: Light Reading (adapted)
Voice dominated
Data dominated
Traffic volume
Revenue
Time
Network cost (€/bit)
Trafficvolume
24 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Availability of access highways Innovating wired and wireless access technologies and standards
GERAN evolution / HSPA & LTE Towards cost efficient high speed mobile access
Radio technologies for IMT-Advanced Increased spectral efficiency, link capacity and coverage
DSL and fiber evolution Towards cost efficient high speed fixed access
ISDN
HDSL
SDSL
G.SDSL
ADSLADSL2
ADSL2+
VDSL
VDSL2
GSM / GERAN
UMTS / HSPA
WLAN / WiMAX
NGMN
GSM / GERAN
UMTS / HSPA
WLAN / WiMAX
NGMN
25 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Availability of access highways… in terms of bit rate, coverage, quality, security
• DSL is the benchmark for end-user experience today
• Requirements on network set by• Innovative services with high
volume traffic (e.g. IP TV)• Interactive Web2.0 based
applications
• Increase bitrates on copper cables utilizing the existing infrastructure• Improve fiber optics to maximize performance-to-cost-ratio• Drive radio access evolution addressing performance and cost challenges• Build-up powerful and flexible backbones for high-volume traffic at high quality
1990 Time1995 2000 2005 2010
100k
1M
100M
1G
10G
10M
GSM 9,6 Kbps
ISDN-BRI2x64+16 Kbps
ADSL3-8 Mbps
Cable40-50 Mbps
GPRS 40-75 Kbps
EDGE 220-384 Kbps
WCDMA 2 Mbit/s
HSDPA 10 Mbps
Fixed Access
Mobile Access
VDSL50 Mbps
FTTH155 Mbps
LTE 100 Mbit/s
4G 1 Gbit/s
Bandwidth (bps)[peak user data rates]
26 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Content
• Service trends
• End-user insights
• Broadband service strategy development
• Broadband service examples & success stories
• Broadband Solutions & Evolution
• Summary
27 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Premium interactiveservices • Premium VoIP to address
the Web2.0 paradigm shift• IPTV with personalized and
interactive content• Strong user, ARPU and
loyalty growth
Ubiquitous high speedaccess• Fast rollout of sufficient
DL and UL capacity needed: VDSL/fiber and HSPA/WiMAX)
• Hybrid fixed and mobile strategy for maximum revenues
Access independentservice availability• User is always best
connected• No complexity
challenges for the user• Service continuity and
simple access to personal service suite
Broadband everywhere….
Enforced competition is re-defining the market• Market boundaries are diminishing, Major internet players are threatening telcos• With broadband access, services become network independent.
User loyalty is strongly decreasing• Data service quality, service portfolio and bundles are major sources of dissatisfaction • Speed, ubiquitous availability, quality of content presentation and simplicity is key
28 © Nokia Siemens Networks Broadband without Boundaries / GHW / September 23rd, 2008
Thank you !