Oren Michaels's Presentation at Emerging Communication Conference & Awards 2010 America

Managing Growth & Profits

in the Yottabyte Era

© Chetan Sharma Consulting, All Rights Reserved April 20, 2010

3http://www.chetansharma.com

Chetan Sharma Chetan Sharma ConsultingConsulting

• Market Research– Research and Forecasting– Competitive Analysis– Market Sizing

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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

http://www.chetansharma.com/



http://www.chetansharma.comhttp://www.chetansharma.com




Mobile Ecosystem TRENDS




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.




Broadband requirements are Broadband requirements are increasingincreasing




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?




Arrival of the yottabyte era




Source: Calit2

Hiperwall – Highest Resolution Display on the planet287 million pixels, 70 monitors, 10Gbps connections







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




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




Data Consumption TrendsData Consumption Trends

Sou

rce:

T-M

obile

, 20

10

Source: Verizon




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




Wireless vs. WirelineWireless vs. WirelineBy 2013, Mobile will lag Wireline traffic by only 5 years




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)




Revenue vs. UsageRevenue vs. Usage




Unpredictable sources of data Unpredictable sources of data growthgrowth




SOLUTIONSSOLUTIONS




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




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

E-mail

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




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




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




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




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)




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




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




CONTEXT DRIVEN CONTEXT DRIVEN ECONOMYECONOMY




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




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




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




Thank YouThank [email protected]/chetansharma
