Copyright 2009 IDC. Reproduction is forbidden unless authorized. All rights reserved.

The Impact of Smartphones on Mobile Data NetworksThe Impact of Smartphones on Mobile Data Networks

Elisabeth RaingeResearch Vice PresidentMay 11, 2011

Jun-11© 2009 IDC

Thinking SmarterThinking Smarter

2

Jun-11© 2009 IDC

AgendaAgenda

State of the industry

Operational challenges

The IP Network Management Experience

Analytics

Essential guidance

Jun-11© 2009 IDC 4

IDCIDC

Corporate Over 45 years old In over 110 countries Over 1000 analysts: global, regional, local Broad customer base: IT professionals, vendors, investment

community Privately held subsidiary of IDG

Elisabeth Rainge, Research Vice President Lead NGN Operations research Over 15 years at IDC in Boston, San Mateo & metro-NYC Started coverage of OSS/BSS (2000), Network Test (1998),

ATCA (2004-2005), IMS (2005), Telecom Analytics (2007)

Jun-11© 2009 IDC 5

Many Hidden DynamicsMany Hidden Dynamics

ServicesRevenue New revenue

Broadband, Quad play, Applications,Managed services

Operational & Capital Costs

$

Time

Marginimproved

Jun-11© 2009 IDC 6

TELECOMS/ICT

TRANS-PORT

RETAIL

MANUF-ACTURING

GOVERN-MENT

ENERGY

FINANCIAL

HEALTHLOGISTICS

Building a Platform Upon Which Industries Can Build Their BusinessesBuilding a Platform Upon Which Industries Can Build Their Businesses

Jun-11© 2009 IDC

Telecom Industry GrowthTelecom Industry Growth

7

821867

3,1992,838

312280

+11%

+13%

-5%

20092008

$697$734 $754$739

+2%

-5%

20092008

Wireless RevenueWireline RevenueWireline access lines

Wireless connectionsBroadband connections

Connections (millions) Revenues ($ billions)

Source: IDC Carriertrak, Jan 10, 2011

WW telecommunications market = $1.46 trillion

Jun-11© 2009 IDC 8

Worldwide: Top 25 Telecom Groups by Total Revenue ($ million, Q4 2009)Worldwide: Top 25 Telecom Groups by Total Revenue ($ million, Q4 2009)

Source:/Notes:

Teliasonera $3,915Korea Telecom $4,050

Telmex $4,167Bell Canada $4,507

Time Warner Cable $4,532KPN $4,943

China Unicom $5,708Telemar Norte Leste S.A $6,645

China Telecom $7,614America Movil $7,689

Softbank $7,749Sprint $7,868

British Telecom $8,482Comcast $9,067

KDDI $9,600Telecom Italia $10,352

Vodafone $16,417China Mobile $17,845

DT $20,8935. Telefonica $21,301

4. Verizon $27,0913. France Telecom $27,679

2. NTT $28,2931. AT&T $30,858

Latin

12%

Europe 32%

Asia

32%

N. Amer24%

Geographic Distribution ofTop 25 by HQ Location

CEMA32%

Latin4%

Europe24%

Asia20%

N. Amer

20%

Geographic Distribution ofSecond 25 by HQ Location

US Cable TV companies are big telecom players #11-Comcast, #20-Time Warner Cable

Source: IDC Carriertrak, Jan 10, 2011

Jun-11© 2009 IDC 9

Worldwide: Top 25 Telecom Groups by Wireless Revenue ($ million, Q4 2009)Worldwide: Top 25 Telecom Groups by Wireless Revenue ($ million, Q4 2009)

Source:/Notes:

Vimplecom $1,946Telenor $1,982

Korea Telecom $2,106Qatar Telecom $2,265

Teliasonera $2,379SK TEL $2,379

MTS $2,397Saudi Tel $2,409

KPN $2,613China Unicom $2,719Telecom Italia $3,103

Zain $3,287MTN $3,769

Softbank $4,810Sprint $6,816

America Movil $7,224KDDI $7,387

DT $10,870NTT $11,433

France Telecom $12,0095. Telefonica $13,100

4. AT&T $13,8173. Vodafone $14,749

2. Verizon $15,7321. China Mobile $17,691

WW wireless market = $754 billion

Single country operators– US: AT&T, Verizon, Sprint– Japan: NTT, KDDI, Softbank– China: China Mobile, China Unicom– Korea: SKTel, Korea Telecom

Multi-country operators– Europe: VF, Telefonica, FT, DT, TI,

KPN, Teliasonera, Telenor– Latin: America Movil– CEE: Vimpelcom– MEA: MTN, Zain, Saudi Tel, Qatar Tel,

Source: IDC Carriertrak, Jan 10, 2011

Jun-11© 2009 IDC

Worldwide: Top 25 Telecom Groups by Wireless Subscriptions Growth (%, Q4 2009)Worldwide: Top 25 Telecom Groups by Wireless Subscriptions Growth (%, Q4 2009)

10

10%10%

13%14%16%16%17%18%19%19%21%22%22%

25%27%

31%31%34%35%35%

46%55%56%58%

63%2. Tata Teleservices Maharastra

3. Aditya Birla Group/IDEA

1. Telemar Norte Leste/Oi

Leap Wireless

4. Reliance Communications5. Bharti Airtel

MTN

PLDTTelecom Argentina

VimplecomAmerica Movil

KPNTelefonica

Hutchison WhampoaMetro PCS

Qatar TelecomVerizon

TracfoneMTNL

VodafoneTeliasonera

AxiataZain

China MobileMegafon

Source: IDC Carriertrak, Jan 10, 2011

India is fastest growing mobile market. Indian operators – Tata, IDEA, Reliance, Bharti, are 4 of the top 5 fastest growing operators.

– Bharti Airtel is largest Indian mobile operator with 143 million subscribers at Sept 30, 2010. In July 2010, Bharti completed acquisition of Zain Group in July 2010, with 40 million subscribers in Africa.

Telemar Norte Leste is an integrated Brazilian operator using the brand name Oi.

– The growth rate reflects the 2009 acquisition of Brazil Telecom. In Sept 2008, Oi had 22 million mobile subs and BrT had 5.3 million mobile subs

Jun-11© 2009 IDC

Worldwide: Top 25 Telecom Groups by Wireline Broadband Subscriptions (thousands, Q4 2009)

Worldwide: Top 25 Telecom Groups by Wireline Broadband Subscriptions (thousands, Q4 2009)

11

2,5422,5562,5682,6662,6822,8122,8673,4533,8473,9083,9704,211

6,5246,9537,0008,0449,2209,289

3. NTT2. China Unicom

1. China Telecom

Korea TelecomTelecom Italia

Time Warner Cable

Telemar Norte Leste S.A

Softbank

British Telecom

Telmex

Telstra

Verizon

SK BroadbandSwisscom

Bell Canada EnterprisesQwest

KPNCHT

CablevisionRogers

Teliasonera

21,68415,93015,789

53,46038,550

24,6394. France Telecom

5. ComcastAT&T

Telefonica 12,884

Source: IDC Carriertrak, Jan 10, 2011

• 2009 WW broadband subscriptions = 312 million.

• China market is 29% of world broadband market.

• US is 18% of world broadband subscriptions.

• Comcast, a US cable TV operator, ranks #5 in the world, ahead of AT&T.

Jun-11© 2009 IDC

Communications Industry Value ChainCommunications Industry Value Chain

1212

BUSINESS

CONSUMER

Regulation

Hard- and software network

infrastructure

Devices Apps and content

= segments where operators enjoy greatest power

Device vendors

Telecom

industry vendors

Luxury brands

VNOs Content provider

Web firms

Software firms

Advertising

System integrators

Voice and data traffic transport

Sales, marketing and branding

Customer service and

advice

Source: IDC

Device vendors IT

vendors

Jun-11© 2009 IDC

DevicesDevices

13

Jun-11© 2009 IDC

Worldwide Media Tablet Forecast 2011-2015Worldwide Media Tablet Forecast 2011-2015

14

Source: Worldwide and U.S. Media Tablet 2011–2015 Forecast, IDC# 227941, April 2011

About 90% ConsumerAbout 33% US in 20113G$ Less than 20%

About 90% ConsumerAbout 33% US in 20113G$ Less than 20%

Jun-11© 2009 IDC

Worldwide PC Forecast 2008-2015Worldwide PC Forecast 2008-2015

15

Source: Worldwide PC 2011–2015 Forecast, IDC# 227779, April 2011

Jun-11© 2009 IDC

Worldwide Mobile Phone Forecast 2011-2015Worldwide Mobile Phone Forecast 2011-2015

16

Source: Worldwide Mobile Phone 2011–2015 Forecast and Analysis, IDC# 227361, March 2011

Jun-11© 2009 IDC

Worldwide Smartphone Forecast 2011-2015Worldwide Smartphone Forecast 2011-2015

17

Source: Worldwide Smartphone 2011–2015 Forecast and Analysis, IDC# 227367, March 2011

Jun-11© 2009 IDC 18

Putting the pieces together:

Context

Jun-11© 2009 IDC

Operations increasingly cross functional teamsOperations increasingly cross functional teams

Network Business UnitsITFinance Legal

Sales, Retail, etc. . . .

Jun-11© 2009 IDC 20

Analytics in Telecom: Company wideAnalytics in Telecom: Company wide

Marketing Customers, products

IT BSS, ERP applications

Network Network engineering

Distribution Retail

Finance Revenue Assurance

Legal & regulatory Data retention

Jun-11© 2009 IDC 21

IDC Decision Management Model: Telecom IndustryIDC Decision Management Model: Telecom Industry

Source:/Notes:Level of uncertainty

Num

ber of Decisions

Degree of Automation

Leve

l of C

olla

bora

tion

Scope of Decision

HIGH

HIGHLOW

LOW

Operational(Policy Hub)

Strategic

Tactical

Source: IDC, 2010

Jun-11© 2009 IDC 22

IDC Decision Management Model: Telecom IndustryIDC Decision Management Model: Telecom Industry

Source:/Notes:Level of uncertainty

Num

ber of Decisions

Degree of Automation

Leve

l of C

olla

bora

tion

Scope of Decision

HIGH

HIGHLOW

LOW

Operational(Policy Hub)

Strategic

Tactical Capacity,Inventory &

Service Balancing

CustomerOffer Acquisition

Decisions

CustomerSegmentation

Strategies

NetworkCoverage

PromotionExecution

FinancialTargets

ServiceDesign

ContentPartnerships

PromotionalPlan

Network & ITOutsourcingDecisions

NetworkDesign

RevenueAssurance

Source: IDC, 2010

Jun-11© 2009 IDC

Getting to Business OutcomesGetting to Business Outcomes

Policy

Charging

Mediation

Subscriber DataManagement Business

Outcomes:

IntelligenceOpportunitiesDiscrepancies

Data Integration

Jun-11© 2009 IDC 24

Mobile App Developer SurveyMobile App Developer Survey

2,363 App Developers

38% are Independents

43% in North America

38% in Europe

13% in Asia/Pacific

5% in Latin America

Repeated Quarterly

Jun-11© 2009 IDC 25

Mobile App Developer Survey ResultsMobile App Developer Survey Results

Jun-11© 2009 IDC 26

Mobile App Developer Survey ResultsMobile App Developer Survey Results

Jun-11© 2009 IDC 27

Mobile App Developer Survey ResultsMobile App Developer Survey Results

Jun-11© 2009 IDC 28

PartneringPartnering

Source:/Notes:

LargeEnterprises

Small-MediumBusinesses

Consumers

Partner

TheService

Account Management

Online

Contact centre

Jun-11© 2009 IDC

Network AnalyticsNetwork Analytics

Network analytics is emerging from:

IT industry analytics

Big data (information management, Hadoop)

Changed competitive environment

Changed usage, with “smarter” changes likely

Divergence of customer satisfaction and infrastructure performance

29

The age of marketing is here:Shaping perceptions is essential

Data is a tool

The age of marketing is here:Shaping perceptions is essential

Data is a tool

Jun-11© 2009 IDC

Supplier (NEP, Test, Network Mgmt) Use Cases

Supplier (NEP, Test, Network Mgmt) Use Cases

End user use casesEnd user use cases

Network processor cardsNetwork processor cards

“DPI” Traffic shaping systems

“DPI” Traffic shaping systems

Ecosystem: DraftEcosystem: Draft

30

Packet CapturePacket Capture

Network Performance Monitoring

Intrusion Detection

Web/App Performance Monitoring

Network Data Probe (Collector)

Network Traffic Monitor

Network InspectionNetwork

InspectionNetwork AdaptersNetwork Adapters

Packet Capture Adapters

Packet Capture Adapters

Network Test Tools: Traffic Generators

Network Test Tools: Traffic Generators

Network Tap (inline)

Jun-11© 2009 IDC

DevicesDevices

31

Jun-11© 2009 IDC 32

The Personalized Communication Imperative The Personalized Communication Imperative

Customer loyalty

Technology advancements

Business models

Usage models

Jun-11© 2009 IDC

My Home Is My CastleMy Home Is My Castle

33

Jun-11© 2009 IDC 34

Essential GuidanceEssential Guidance

Smartphones drive the information management challenge

Exploiting existing sources > creating new sources

Customer experience improvements are top

Consider the intelligence challenge

Empowering relationships by being smarter:

Subscribers

Business partners

Suppliers

The new network management is here

Jun-11© 2009 IDC 35

Elisabeth Rainge

erainge@idc.com

+1 508 935 4636

Twitter @erainge