ICT Outlook 2011

Seoul 22nd February, 2011

Agenda

• 09:00 – 09:30 : Outlook 2011: The Overall ICT Perspective,

Nitin Bhat, Partner & Head of ICT Practice

• 09:30 – 10:10 : Telecoms Outlook 2011

Jayesh Easwaramonmy, Vice President,

• 10:30 – 11:10 : Cloud Computing: What is in Store?

2

• 10:30 – 11:10 : Cloud Computing: What is in Store?

Nitin Bhat

• 11:10 – 11:40 : Collaboration: What is the Outlook?

Sunghoon Hong, Consultant

• 11:40 – 12:00 : Q&A and End of Briefing

Outlook 2011: The Overall ICT Perspective

Nitin Bhat

Agenda

1

2

State of the Industry

ICT Outlook

4

#1: Aggressive phase of Mobilization gains momentum

Voice centric

Initial seeding to

monetize 3G networks

Market Seeding Phase Pre 2008

Data Deluge phase2008-10

2015

Packet data exceeded

voice data on mobile

networks in 2010

Growth driven by large

screen – PC centric

Multi-device world

Smartphone is mass

market -Smartphones

to be 60% of mobile

sub base in APAC

Value of Mobility exceeds the Value of incremental bandwidth at home

5

monetize 3G networks screen – PC centric

and early rise of

smartphones

More mobile BB

devices than fixed BB

devices

sub base in APAC

Developed markets to

carry 8-10 IP devices

Internet of things

#2: Tablet PCs are a game changer for both consumers and enterprisesAfter a brief slowdown in 2009, globally the PC market is expected to retain an

impressive pace of growth

218.5239.4

271.2287 292.7

351.3384.0

0

100

200

300

400

500

2005 2006 2007 2008 2009 2010 2014

Global PC Sales (Units)

• The proportion of Mobile PCs (including

Laptops, Notebooks, Netbooks, Tablet PCs)

has surpassed that of Desktop PCs

• Currently the share of Tablet PCs is estimated

at around 10% of the Portable PC market

6

• The most common applications of the tablet

are for consumers to access “content”

(reading, video, games) online and offline

• Apple will have a commanding share of global

market while initiatives by NEC, Dell, Toshiba,

Samsung will accelerate the device adoption4% 8% 10% 12%

15%

57%60% 62% 63% 63%

39%32%

29%25%

22%

0%

10%

20%

30%

40%

50%

60%

70%

2010 2011 2012 2013 2014

Tablet PCs Portable PCs (minus Tablets) Desktop PCs

Forecast Incremental Market Share for PCs

#3: IPTV in its current form is dead on arrival

IPTV only works if

Comparable channels to cable – Korea, France , HK

Regulatory issues cleared

Smart TV

Started off with simple premise – I want Youtube on my TV

Is now getting integrated with apps world like the

7

Content must provide clauses

If not7 IPTV is not a comparable TV services and the on-demand feature is not high on consumer demand

with apps world like the smartphone

Leading to new business models like LG – Orange or LG –DIvX TV

Looks like TV manufacturers will use global scale to ‘capture aggregation value’

#4: Touchscreen ubiquity is redefining user experience

• Falling Prices

• Ease of integration of touchscreen ICs

• Improvements in building technology

Drivers

Mobile Phones

PCs

Mobile Internet Devices

8

Devices

Banners and Hoardings

Tourism and Entertainment

#5: Telco wholesale business models are evolving

A pure play wholesaler is born • Broadband as a national utility

and GDP accelerator

• Financial returns

• Change in market structure to

facilitate investments

• New models of infrastructure

development especially on

OSS BSS to help RSPs

flourish

9

• Pure spread play necessitates

service innovation with

prudent cost management

• Different Models – BT

Wholesale, Opennet , Chorus

(NZ)

• Commercial emulation

through JVs –

KPN/Reggefiber, other

European JVs

#6: Telcos are evolving to smart enable businesses

Transform to Enable

Telecom as a sector

Telecom inside

Predominantly

consumer focused Smart enabler

� Marketing & Advertising

Illustrative

10

Consumer Segment

Business Segment

� Marketing & Advertising

� Over the Top Experience

� Content Delivery

� ICT services

� Cloud paradigm

� Industry enhancement

APAC ex Japan Cloud Computing Market Size, 2010

#7: Increasing adoption has created a > US$1.1 billion Cloud Computing market

9% 1%

100% = US$1.1 billion

11

Source: Frost & Sullivan

90%

SaaS IaaS PaaS

With a 90% share of the market, SaaS is the dominant segment of the With a 90% share of the market, SaaS is the dominant segment of the Cloud market in the Asia Pacific region.Cloud market in the Asia Pacific region.

Adoption level and type of cloud

10%

� Amongst cloud users, 91% use SaaS, 69% IaaS, 47% PaaS. � 1/3rd of cloud users currently use all three. � Points to a decreased time to adoption amongst existing users

#7: Almost one-fourth of enterprises in APAC have started using Cloud Computing

12

77%

6%

7%

23%

Not adopted yet Public cloud Private cloud Hybrid cloud

Source: Frost & Sullivan

N = 330

#8: Social Networks + Collaboration is driving richer communication in an enterprise

Cloud ServicesCloud Services

Big Big

• Web Collaboration

• Video Conferencing

Synchronous

13

Social AppsSocial Apps

Big Opportunity?

Big Opportunity? • Project Management &

Team Collaboration

• Social Applications (Wikis, Blogs, Communities etc.)

• Content Management solutions

Asynchronous

Agenda

1

2

State of the Industry

ICT Outlook

14

Top 10 Mega Trends for the future

1. Urbanization: Mega Cities, Mega Regions, Mega Corridors, Smart Cities

2. E-Mobility: Over 40 Million Electric 2 Wheelers and 4 Wheelers will be

Sold Annually Around the Globe in 2020

3. Social Trends: Geo Socialization and Generation Y

4. SPACE JAM: Congested Satellite Orbits

5. World War 3: Cyber Warfare

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5. World War 3: Cyber Warfare

6. RoboSlaves: Pervasive robotic technology with AI

7. Virtual World: Fluid Interfaces and Haptic Technology

8. Innovating to Zero!: Zero Emission Technologies

9. Emerging Transportation Corridors

10. Healthcare economics inflection: Shift to prevention and monitoring from diagnosis and treatment

#1: The next 10 years would be very different from the last 10 years

Penetration

Till 2010

Growth in connected

devices

Till 2020

0.9

5

6

80

Connections (bn) Connected devices (bn)

16

Explosive growth >12% Mature Growth

Telecom Outside

Telecom inside

4-5%

� Smart enabler � Acquisition focused

#2: Future of Telcos, 7well, it will be a “?”

“Google wants telcos to deliver networks with the service quality and security needed to produce a great end-user experience (of Google).”

Dr. Eric Schmidt, Google CEO Innovation mostly happening outside

telcos

Commoditization of networks

accelerates

17

““Some people” want AT&T to act as a dumb pipe that just keeps getting bigger and bigger.”

Former AT&T CEO Ed Whitacre

accelerates

• Fixed line – 100 yrs

• Mobile voice – 20 yrs

• Mobile data – 10 yrs

• Cloud computing – 5 yrs

Telco stocks – are becoming a dividend

play

#3: Shift from PC to Mobile Computing Era is perfect storm

• Appification of all Telco services by 2015

• Over 2 mn apps

• By 2015, Mobile BB users will be twice of fixed BB users

Increasing penetration of

Mobile Devices; Greater than PCs

Open OS Platforms Encouraging Development of a range of applications

18

• Soft SIMs to be a reality

• LTE • Augmented

Reality

• 2 GHZ of processing Power with rapid advances in battery and screens

• Tablets to be 16% of base

Maturity of several technologies

End-to-End Virtualization

Reducing Demands from

Consumer Devices

#4: IPTV will move to Smart TV as part the broader Smart Home evolution Smart TVs will account for 50% of the developed market TVs by 2013

19

Swapping of content from

Mobile to TVTV Manufacturer Portals OTT Set Top Box based

#5: Wholesale models will cover greater areas of network infrastructure

A mobile operator today is faced with complex challenges

Mobile emulates fixed broadband

Leading to a change in economics of mobile broadband

Backhaul Kbps per provisioned user

40

...

At 4-5 GB per month 1Pay as you go

Avg = 200 MB Flat rate with fair usage policy

Avg =1 GB

Passive Infrastructure

Sharing –

Common Tower Co – GTL

Transmission

Infrastructure Sharing –Evaluated/Commercial

20

Current

3

• 12-15 times increase in

backhaul capacity

• More number of cells to

manage RAN capacity

• Limited availability of

spectrum

...

Fully unlimited package

Avg = 3-5 GB

Heavy p2p users

MB/month/user

Evaluated/Commercial

/Backhaul Monetization –

Pooling –Net4Mobility JV -4G , MBNL

3G (Tmobile and 3),

Active Sharing/ Pure

Wholesale – Harbinger

Capital , TOT MVNOs

The Home Network Mobility on steroids Internet of things

‘S’ City

Planning

‘S’ Business‘S’ Citizen

‘S’ Buildings

#6: The connected future would be drive significant changes around business models, GTM strategies and margins

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• 8-10 Devices per home

• Universal Remote

6 bn

• 5-6 Devices per individual

• Touch as the default input

mechanism

20 bn

• Smart cities

24 bn

‘S’

Energy

‘S’ Mobility

#7: Cloud Computing Model will see Acceleration and will drive further IT commoditization

Mainframe Era PC / Client-ServerEra

Internet Era Cloud Computing

Factors driving market transition :

- Inefficient IT usage- Ubiquitous broadband- Increasing commoditization

of IT resources

22

1970’s 1980’s 1990’s 2000’s1970’s 1980’s 1990’s 2000’s

Mainframe Era - Hardware focused

- Centralized

- Dumb terminals

Era - Prominence of

software

- De-Centralized

- Power to the user

Internet Era - Ubiquitous access

- “Webification” of

Apps

- Enterprise mobility

Cloud ComputingEra - Utility basis

- Multi-tenant

- Self-service

Source: Frost & Sullivan

#8: Collaborative Communications would be further driven by the pervasiveness of video in the enterprise

Video Conf/

TelePresence Enterprise

Social Software

Pervasive

Video

3D/ Virtual

PresenceAudio Web Conf

Augmented

Collaboration

23

Source: Frost & Sullivan.

Email

IP Tel

IM/Presence

Hosted UC

Presence

2000 2010 2015

KTS/PBX

Conf

Context &

Presence-Aware

Processes

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For Additional Information

Donna Jeremiah

Corporate Communications

Asia Pacific

+603 6204 5832

djeremiah@frost.com

Mi Ok Lee

Corporate Communications

Asia Pacific - Korea

+82 2 6710 2033

Miok.lee@frost.com

26

Nitin Bhat

Partner

Asia Pacific

ICT

+65 6890 0999

nbhat@frost.com