Managing Growth & Profits
in the Yottabyte Era
© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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Chetan Sharma Chetan Sharma ConsultingConsulting
• Market Research– Research and Forecasting– Competitive Analysis– Market Sizing
• Strategy– Consumer & Enterprise
• Roadmap• Product and Technology
Strategy• Technical Due-Diligence• R&D• Business Plan
Development• Revenue Models
• Intellectual Property– Strategy, Audit, & Policy
• Alcatel Lucent• Disney• Motorola• KTF• Comcast• Infospace• Startups• Others
– Patents, Infringement analysis– Patent Mining and Valuation– Litigation – Consulting & Testifying Expert
• Qualcomm vs. Broadcom (ITC)• Sony Ericsson vs. Samsung (ITC)• FedEx vs. Katz• AT&T Mobility• Sprint Nextel vs. Verizon Wireless• Everypath and E*Trade vs. Ajaxo• Others
8 yr old Seattle based Strategy firm exclusively focused on Mobile Advisor to major operators, brands, startups, VCs, and Fortune
500 firms around the world. Strategy for each of the top 6 global mobile data operators Have a unique 360o view of the ecosystem
© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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Mobile Ecosystem TRENDS
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Mobile Ecosystem is getting Mobile Ecosystem is getting ComplexComplex
Fixed broadband networkoperator
TV creation & distribution
SearchOther CE
creation & distribution
Software & applications
Mobile Operators
Social Networking
mPayments
Home networkin
g & automatio
n
Games
Fixed video network operator
Music creation &
distribution
Print creation & distribution
Movie creation &
distribution
Mobile device creation &
distribution
Consumers
Source: Adapted from T-Mobile USA, Inc.
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Broadband requirements are Broadband requirements are increasingincreasing
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Flat Rate EconomyFlat Rate Economy
• Surge in data usage is enticing consumers to go flat rate• Flat Rate prices are coming down (more bundling with data - $40 all
you can eat voice/data)• US – 20%, Japan – 70%+
– Willcom the company that started it all went bankrupt earlier this year
Raises some questions• How do you fund media when flat rate pricing keeps coming down? Is
advertising the only answer?• Can Cellular take it? Can operators maintain profitability per MB? WiFi
and Femtocells to the rescue?• How do you manage the surge? Usage caps, network expansion?
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Arrival of the yottabyte era
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Source: Calit2
Hiperwall – Highest Resolution Display on the planet287 million pixels, 70 monitors, 10Gbps connections
© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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What is Yottabyte?What is Yottabyte?
1 Yottabyte = 1024 bytes (or 1012 terabytes)
In 2009• Global IP Traffic > 177,984,000 terabytes• Global Mobile Data Traffic > 1,760,000 terabytes
(1%)
By 2013• Global IP Traffic > 667,044,000 terabytes
(x3)• Global Mobile Data Traffic > 54,300,000 terabytes (x30)
(8%)Sources: Cisco, Chetan Sharma Consulting, 2010
© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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Two (Multi-Billion) Types of Two (Multi-Billion) Types of OpportunitiesOpportunities
• Technologies that help manage the data growth– HSPA+, 4G, WLAN, Femtocell, Optimization, Congestion
management, Policy Management
• Technologies that take advantage of the data growth– Analytics, Intelligence, User experience, Advertising,
Privacy and Identity management
© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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Data Consumption TrendsData Consumption Trends
Sou
rce:
T-M
obile
, 20
10
Source: Verizon
© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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Mobile Data Traffic GrowthMobile Data Traffic Growth
15 Times
29% of the mobile traffic
90% of the mobile traffic
34% of the revenues
17% of the revenues
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Wireless vs. WirelineWireless vs. WirelineBy 2013, Mobile will lag Wireline traffic by only 5 years
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Traffic distribution by device Traffic distribution by device typetype
• ATT carries almost 50% of the US data traffic• ATT - 0.6% of the subscriber base consumes 40% of the smart/super phone traffic • By next year, smart/super phones will exceed data card traffic (US)
• However, Signaling consumes more resources than data • Signaling traffic is growing over 50% faster than the data traffic • Smartphone signaling traffic is 8x that of data card signaling (source: Airvana)
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Revenue vs. UsageRevenue vs. Usage
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Unpredictable sources of data Unpredictable sources of data growthgrowth
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SOLUTIONSSOLUTIONS
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Implications of Traffic GrowthImplications of Traffic Growth
• Network Evolution Strategy• Network Operation Strategy• Network Storage Strategy• Devices• Carrier Customer Support• Application Developers• Business/Pricing models• Regulatory regimes
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Different IP network needs Different IP network needs
Web Browsing
Th
rou
gh
pu
t
Delay Tolerance/Bufferability
VoIP
Vid
eo c
on
fHQ audio
Bu
lk F
ile
Tra
nsf
er
Hig
h Q
ual
ity
Vid
eo D
ow
nlo
ad
E-commerce
Str
eam
ing
V
ideo
VoiceMsg
Tel
emed
icin
e/T
elet
rain
ing
Rea
l ti
me
HD
Vid
eo
Current Internet Applications
Growing Internet Applications
Managed Network Applications
Key:
Gaming
“Burstiness”
Source: AT&T
© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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Carrier Strategy FactorsCarrier Strategy Factors
• Spectrum position• 3G and 3.5G technology deployment lifecycle• Existing Broadband infrastructure investments• Network traffic and distribution of devices and traffic• Demographics and subscriber growth• Short-term and Long-term customer acquisition strategies in consumer
and enterprise segments• Network Coverage and Pricing Plans• Competitive position• Financial resources• Multi-play position and strategy• Others
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Solutions to mitigate data costsSolutions to mitigate data costs
Multi-pronged strategy is essential– WiFi/Femto-Cell deployment– Faster LTE– Fiber/Light deployment (backhaul)– Network Sharing– Core traffic Offload– Congestion Management– Incentives to fill the troughs– Incentives/Loyalty programs– Network Optimization– Broadcast Mobile Video– Redefine Smart phones– Education – Developers, Consumers– New Business Models– New Services
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Management of Data Requires Management of Data Requires Multiple StrategiesMultiple Strategies
2G
4G
3G
Core Network
Radio Access Network Core Network
Mobile Backhaul
Fiber
Microwave
Copper
LightNetworks
GGSNRNC SGSN
Offloading Traffic
WiFi/FemtoCell
Offloading Traffic
Inte
rnet
Ser
vice
s
Compression/Optimization of Data Traffic
Policy Management
Compression/Optimization
Optimization
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Bottom-LineBottom-Line
Need to have a Strategy – by applications (video, browsing, apps)– by users (heavy/medium/low consumption)– by time of day (peak, off-peak)– by location (indoor, outdoor)– by business models (flat rate, tiered, mix, adv)– by device types (data cards, smart/super phones,
feature phones, others)– by spectrum– by backhaul (copper, fiber, light, microwave)
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LTE doesnLTE doesn’’t help significantly in the t help significantly in the short-termshort-term
No major impact initially
LTE alone is not going to make a significant dent for the next 2-3 yearsSimilarly, getting more spectrum will only go so far
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Need a holistic approach to data Need a holistic approach to data managementmanagement
By pursuing a holistic strategy, costs can be lowered by at least 70% in 5 years
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CONTEXT DRIVEN CONTEXT DRIVEN ECONOMYECONOMY
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Context drives everythingContext drives everything
Knowledge(about User)
Transactions(from User)
Demographics/ Explicit Profile
Interests/ Implicit Profile
Sensor data
User Intent
Location
Presence
Physiological parameters
Calendar
Address Book
Social Community
Intellectual Community
M2M
Preferences
Devices in the vicinity
3rd Party Sources
Browsing, Watching, Previewing, Flipping
Purchasing, Payments
Communications
Search (Local, Online, Media)
User Experience
Gifting
Advertising
Pricing
Security/ Authorization
DRIVES
Source: Chetan Sharma Consulting, 2010
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Analytics frameworkAnalytics framework
Static, BatchReporting
CustomizedAlerts
Statistical Analysis
PredictiveAnalytics
EmbeddedPredictiveAnalytics &
Optimization
Drill Down
Ad-Hoc Reporting
Intelligence from Data, Effort
Com
pet
itiv
e A
dva
nta
ge,
Impac
t on R
even
ues
ANALYTICS
Sou
rce:
Mob
ile A
dver
tisin
g, J
ohn
Wile
y, 2
008
© Chetan Sharma Consulting, All Rights Reserved April 20, 2010
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SummarySummary
• Problem Statement: Massive Data Usage Coming• Growth will need to be managed at various levels
– Network/Device– Application/Developers– Consumer/Enterprise Expectations– Business Model– Regulatory
• Opportunities in – Management of data growth – Understanding of data (and consumer behavior)
• Enhancing user experience, launching new services
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Thank YouThank [email protected]/chetansharma