Monetize diferentiate and create value for your customers short version

44
COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. ALCATEL-LUCENT — CONFIDENTIAL — SOLELY FOR AUTHORIZED PERSONS HAVING A NEED TO KNOW — PROPRIETARY — USE PURSUANT TO COMPANY INSTRUCTION December 2012 MONETIZE YOUR NETWORK DIFFERENTIATE & CREATE VALUE FOR YOUR CUSTOMERS Iulian COSTEA – Head of Customer Marketing Middle East, Alcatel-lucent [email protected]

description

MOBILE OPERATOR COMPONENTS FOR A SUCCESFUL STRATEGY - CUSTOMER EXPERIENCE SHOULD BE AT THE CORE OF YOUR BUSINESS - CUSTOMER INTIMACY IS THE MOST VALUABLE ASSET FOR AN OPERATOR - CUSTOMER EXPERIENCE IS THE SECRET WEAPON TO DEFEND THE OTT THREAT - PROTECT YOUR REVENUE BY DEPLOYING REAL-TIME CHARGING CAPABILITIES INSIDE YOUR NETWORK - CONTROL YOUR NETWORK COSTS BY MANAGING PROPERLY THE DATA TRAFIC INSIDE YOUR NETWORK THROUGH YIELD MANAGEMENT

Transcript of Monetize diferentiate and create value for your customers short version

Page 1: Monetize diferentiate and create value for your customers short version

COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. ALCATEL-LUCENT — CONFIDENTIAL — SOLELY FOR AUTHORIZED PERSONS HAVING A NEED TO KNOW — PROPRIETARY — USE PURSUANT TO COMPANY

INSTRUCTION

December 2012

MONETIZE YOUR NETWORK DIFFERENTIATE & CREATE VALUE FOR YOUR CUSTOMERS Iulian COSTEA – Head of Customer Marketing Middle East, [email protected]

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INSTRUCTION

1. TELECOM INDUSTRY TRENDS – OPPORTUNITY OR CHALLENGE

2. THE RIGHT STRATEGY TOUCHES BOTH DIMENSIONS OF YOUR BUSINESS – TOP LINE AND BOTTOM LINE

3. ADDRESS THE REVENUE DIMENSION BY CREATING VALUE FOR YOUR CUSTOMERS

4. CONTROL YOUR CAPEX/OPEX AND DECREASE PER-BIT DELIVERY COST

5. CONCLUSION

AGENDA

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INSTRUCTION

INDUSTRY TRENDS

FIXED BROADBAND CONNECTIONS

2011 2015

532Million

691 Million

MOBILE CONNECTIONS

2011 2015

5.5 Billion7.3 Billion

SMARTPHONE SALES

2011 2015

428Million

1Billion

APPLICATIONS DOWNLOADS

WI-FI PUBLIC SPOTS

2011

18.2Billion

41.7 Billion

2015

2011

1.3 Million5.8 Million

2015

177 Billion

2015

89.4 Billion

2011

+30% +32% +346%

+129% +134% +98%

PUBLIC CLOUDREVENUE

M2MDEVICES

2011 2015

1.1Billion

12 Billion

MOBILE VIDEO USERS

2011

429Million

2.4Billion

2015

+990%

+879%

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INSTRUCTION

INTERNET TRAFFIC DRIVEN BY SERVICES LIKE NETFLIX, HTTP, YOUTUBE

Source: Sandvine, Gartner, Ovum 2012, Traffic Index, 2012 - Bell Labs Modeling

REAL-TIME ENTERTAINMENT ON MULTIPLE SCREENS

BROADBAND AND INTERNET ACCESS ARE DRIVING FIXED AND MOBILE CONNECTIONS

0

1

2

3

4

5

6

7

8

9

2009 2010 2011 2012 2013 2014 2015 2016

GLOBAL CONNECTIONS 2010- 2016

Fixed subscriptions Mobile connections

Fixed broadband connections Mobile broadband connections

CAGR (2011-2015)Fixed Broadband Connections: 9 %

Mobile Broadband Connections: 32 %

BIL

LIO

NS

OF

CO

NN

EC

TIO

NS

4.8 BILLION BROADBAND CONNECTIONS BY 2015. OVER 80% ARE MOBILE

7 BILLION PERSONAL MOBILE DEVICES BY 2016

MOBILE DATA TRAFFIC FOR NAR, EU & APAC 2011- 2016

PB

/MO

NT

H

2016

2011

0

2000

4000

6000

8000

10000

12000

14000

16000

2011 2012 2013 2014 2015 2016

EU APAC NAR

MOBILE DATA TRAFFIC 25x TIMES

VIDEO STREAMING50% OF TRAFFIC

ON Wi-Fi27% OF MOBILE DATA

3G/4G CONNECTIONS99% OF TRAFFIC IN NAR

BY 2016

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INSTRUCTION

TRANZACTIONAL SESSIONS

COMMUNICATION SESSIONS

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INSTRUCTION

Source: Strategy Analytics

THE NETWORK IS THE LAUNCHING PAD BUT THE EXPERIENCE IS THE PRODUCT. COMPETE IN

QUALITY OF EXPERIENCE

CONVERGENCE OF EXPERIENCE

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INSTRUCTION

THE NETWORK AND BUSINESS MODEL ARE UNDER PRESSUREDRIVEN BY MASSIVE GROWTH IN VIDEO, SIGNALING, AND OTTs

How to grow and profit

in this environment?

Sources: 1 Bell Labs Research, 2 Portio Research, 3 Juniper Research

• 25X DATA TRAFFIC BY 20161

2/3rd IS VIDEO STREAMING OR VIDEO COMMUNICATION

• SIGNALING TRAFFIC EXPLODING1

DRIVEN BY 22.6% SMARTPHONE CAGR 46B APPLICATION DOWNLOADS THOUGH

2016

• OTT MESSAGING WILL OVERTAKE SMS/MMS WITH 20B MESSAGES ANNUALLY BY 20162

• 200B OTT VOIP MINUTES ANNUALLY BY 20163From 2012 to 2020, “OTT VoIP will cost the global

telecoms industry $479bn in lost cumulative revenues, which represents 6.9% of cumulative total voice revenues” - Ovum

“In 2012, Ovum forecasts that mobile operators will lose $23.2bn in SMS revenues to over-the-top (OTT) messaging services. By 2016, Ovum expects this number to increase to $54.4bn.” - Ovum

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INSTRUCTION

EXPLODING DATA TRAFFIC AND LTE CREATE NEW OPPORTUNITIES

• ALIGN USAGE AND PRICE WITH NETWORK

COSTS

• BROADEN THE SUBSCRIBER BASE

• INCREASE CUSTOMER LIFETIME VALUE

• BOOST CUSTOMER QUALITY OF EXPERIENCE

• CHANGE OTTs FROM COMPETITORS TO

PARTNERS

• OPTIMIZE NETWORK EFFICIENCY

How to make the most of

these opportunities

?

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INSTRUCTION

1. TELECOM INDUSTRY TRENDS – OPPORTUNITY OR CHALLENGE

2. THE RIGHT STRATEGY TOUCHES BOTH DIMENSIONS OF YOUR BUSINESS – TOP LINE AND BOTTOM LINE

3. ADDRESS THE REVENUE DIMENSION BY CREATING VALUE FOR YOUR CUSTOMERS

4. CONTROL YOUR CAPEX/OPEX AND DECREASE PER-BIT DELIVERY COST

5. CONCLUSION

AGENDA

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INSTRUCTION

OTT PRESURECOMPETITION PRESURE

COST PRESURE REGULATORY PRESSURE

• LOST REVENUE ON VALUE ADDED SERVICES

• PER-BIT DELIVERED PRICE

• VALUE CREATIONTELECOM SERVICE

PROVIDERS

• PRICE EROSION

• TECHNOLOGY LEADERSHIP

• INNOVATION AS DIFFERENTIATION FACTOR

• CAPEX & OPEX REDUCTION

• PER-BIT DELIVERY COST

• SPECTRUM REGULATION

• LICENSING CRITERIAS

TELECOM SERVICE PROVIDERS – DRIVING FORCESTOPLINE AND BOTTOM LINE PRESURES

PROTECT YOUR REVENUE

REDUCE YOUR COST

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INSTRUCTION

Over-The-Top THREAT

CE VENDORSE.g. Sony, Samsung

Joint ventures, acquisitions, and

investments in OTT services

Deep integration with and adoption of OTT services, distribution, and business

models

SERVICE PARTNERSHIPS

SMART ENABLEMENT

APPLICATIONDEVELOPERS

E.g. WhatsApp, Nimbuzz

ONLINE PORTALS

E.g. Tencent, MSN, Yahoo!

DEVICE AND OS VENDORSE.g. Apple, Google, Samsung, Microsoft

SOCIAL NETWORKS

E.g. Facebook, Cyworld

CONTENT PRODUCERS

E.g. Disney, Universal,Warner Brothers

CONNECTIVITYBECOME AN OTT PLAYER

SEARCH PROVIDRSE.g. Google, Baidu

CONSUMER SERVICESVOICE, MESSAGING, TV AND VIDEO, GAMES, MUSIC, COMMERCE, SOCIAL MEDIA

OTT PLAYERS

TELCO RESPONSE

INTERNET TV PROVIDERS

E.g. Hulu, Netflix

ONLINE RETAILERSE.g. Amazon,

Alibaba

• DIFFERENTIATE WITH VAS• USE TELCO NETWORKS TO PROVIDE VAS• HARNESS THE WEB FOR OTT SERVICES

• PARTNER TO OFFER THIRD-PARTY OTT SERVICES • PROVIDE THIRD-PARTY OTT SERVICES AS PART OF THE TELCO OFFERING• ENGAGE WITH OTT PLAYERS TO INTEGRATE SERVICES

• JOINT VENTURES, ACQUISITIONS, AND INVESTMENTS IN OTT SERVICES• DEEP INTEGRATION WITH AND ADOPTION OF OTT SERVICES, DISTRIBUTION, AND BUSINESS MODELS

• SMART ENABLEMENT OF OTT SERVICES• LEVERAGE TELCO ASSETS SUCH AS BILLING, NETWORK APPLICATION PROGRAMMING INTERFACES, CUSTOMER INSIGHTS/ANALYTICS, AND SECURITY TOOLS

• MANAGE CONNECTIVITY TO OTT SERVICES AND PLAYERS• DEFENSIVE STRATEGIES – CAPPING OR “OTT TAXES”• OFFENSIVE STRATEGIES – MANAGED CONNECTIVITY/WHOLESALE

VALUE ADDED SERVICES

“10% POINT INCREASE IN SMARTPHONE PENETRATION COULD COST EUROPEAN OPERATORS BETWEEN

0.5% AND 0.6% IN SERVICE REVENUES FROM VOICE AND MESSAGING” (INFORMA)

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INSTRUCTION

TWO BUSINESS DIMENSSIONS – DEMAND & SUPPLYCREATE VALUE BY ADDRESSING THEM BOTH THROUGH AN ORCHESTRATED STRATEGY

DEMANDSUPPLY

• INTANGIBLE ASSETS• AIRTIME• SPEED• CAPACITY• CONNECTIVITY• CUSTOMER EXPERIENCE

• VALUE CREATION• REAL TIME SERVICES• FLEXIBILITY• RELIABLE SERVICE• USER EXPERIENCE• REWARD

PERISHABLE

VOLATILE

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INSTRUCTION

1. TELECOM INDUSTRY TRENDS – OPPORTUNITY OR CHALLENGE

2. THE RIGHT STRATEGY TOUCHES BOTH DIMENSIONS OF YOUR BUSINESS – TOP LINE AND BOTTOM LINE

3. ADDRESS THE REVENUE DIMENSION BY CREATING VALUE FOR YOUR CUSTOMERS

4. CONTROL YOUR CAPEX/OPEX AND DECREASE PER-BIT DELIVERY COST

5. CONCLUSION

AGENDA

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INSTRUCTION

DESIGN AND DELIVER A MARKET-LEADING CUSTOMER EXPERIENCE

CUSTOMER MANAGEMENT

ANALYTICS EXPERIENCE OPTIMIZATION

CONSULTING

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INSTRUCTION

CUSTOMER MANAGEMENT: SIMPLIFY CUSTOMER INTERACTIONS TO IMPROVE PROFITABILITY. TOUCHPOINTS SERVICE FUNCTION

CHANNELMODEL

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INSTRUCTION

ANALYTICS: USE CUSTOMER INSIGHTS TO IMPROVE BUSINESS PERFORMANCE.

Quality Care Value Customer Satisfaction

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INSTRUCTION

OPTIMIZATION: CREATE AN EXPERIENCE THAT POSITIVELY INFLUENCES USAGE BEHAVIOR TOWARDS STATES OF HIGHER PROFITABILITY

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INSTRUCTION

CONSULTING: DEVELOP A PRIORITIZED ACTIONABLE PLAN TO IMPROVE THE CUSTOMER EXPERIENCE.

Deep Expertise Patented Methodology for CSPs A Prioritized, Actionable Plan

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INSTRUCTION

MOBILE MONETIZATION FRAMEWORK

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INSTRUCTION

MOBILE MONETIZATION FRAMEWORK

1ST STEP: VOLUME BASED - ASSIGN VALUE TO BANDWIDTH

2ND STEP: VALUE BASED - START TO MEASURE AND ACCOUNT FOR DATA, BASED ON THE APPLICATION THEY ARE USING (DPI, POLICY)

3RD STEP: SEGMENTATION/DISCRIMINATION - USING SMARTS FROM POLICY AND CHARGING TO CREATE SERVICE BUNDLES AND PERSONALIZED OFFERS THAT CAN ENCOURAGE MORE USAGE OF THE INFRASTRUCTURE

4TH STEP: NETWORK APIS - ACCESS NEW BUSINESS MODELS

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INSTRUCTION

1. TELECOM INDUSTRY TRENDS – OPPORTUNITY OR CHALLENGE

2. THE RIGHT STRATEGY TOUCHES BOTH DIMENSIONS OF YOUR BUSINESS – TOP LINE AND BOTTOM LINE

3. ADDRESS THE REVENUE DIMENSION BY CREATING VALUE FOR YOUR CUSTOMERS

4. CONTROL YOUR CAPEX/OPEX AND DECREASE PER-BIT DELIVERY COST

5. CONCLUSION

AGENDA

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INSTRUCTION

TRAFFIC VS REVENUE DICHOTOMY

Source: Informa Global mobile network traffic and ARPU Forecast (2011)

DATA TRAFFIC GROWTH AND DECLINING OR FLAT ARPU PUTS SERVICE PROVIDER PROFITABILITY AT RISK

HOW CAN OPERATORS MANAGE DATA GROWTH AND INCREASE REVENUE?

INCREASE REVENUE:

• Deliver personalized services

• Accelerate time to market

• Develop new business modelsREDUCE COSTS:

• Scale and manage capacity

• Reduce cost of operations

• Environment Sustainability

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INSTRUCTION

HIGH LEVERAGE NETWORK A PLATFORM FOR INNOVATION THAT REALIZES THE VALUE OF THE NETWORK

INCREASE REVENUE

• DELIVER PERSONALIZED SERVICES

• ACCELERATE TIME-TO-MARKET

• DEVELOP NEW BUSINESS MODELS

REDUCE COSTS

• SCALE AND MANAGE CAPACITY

• REDUCE COST OF OPERATIONS

• REDUCE FOOTPRINT

Cost

Revenue

VOLATILE

PERISHABLE

• HIGH COST• LOW UTILIZATION

• CREATE VALUE• PERSONALIZATION

A CONVERGED, SCALABLE, INTELLIGENT EFFICIENT ALL-IP NETWORK THAT DELIVERS BANDWIDTH AT THE LOWEST COST PER BIT.

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INSTRUCTION

NETWORK CONVERGENCE STRATEGY

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INSTRUCTION

BUSINESS CASE OVERVIEW

PURPOSE A generalized service provider business model that evaluates an Alcatel-Lucent IMS overlay onto

an existing LTE network, inclusive of a full range of IMS services such as VoLTE, RCS, messaging, and video communications. This is compared to a network which overlays Circuit Switched Fallback (CSFB) for voice.

OBJECTIVES Two primary modes are evaluated.

1. Mode 1: Launch with LTE laptops, then add smartphones and mobile internet devices (e.g., tablets) in Year 32. Mode 2: Launch with all 3 types of devices – LTE laptops, smartphones, and mobile internet devices

In addition to IMS versus CSFB, a migration from CSFB to IMS in Year 3 was studied

SERVICE PROVIDER A Tier-1, French service provider who already has an LTE network or who has decided to use LTE,

which is considering whether to use IMS’ full suite of services or CSFB’ voice-centric service.

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INSTRUCTION

DEMAND: MODELING WILLINGNESS-TO-PAY BASED ON PRIMARY MARKET RESEARCH

Converged Comm. LTE/IMS LTE /CSFB

Messaging

Multi-Screen

Mobile/PC Synch

One-number Voice

Enhanced NAB

Presence enabled Calendar

Video share & calling

Relative Market Value 16x 1x

Video Comm. & Location LTE/IMS LTE /CSFB

Enhanced Mobil Video

Multi-Party Video Call

Mobile Video Monitoring

Location-based Services

Live Messaging

Relative Market Value 5x 1x

Converged Comm. LTE/IMS LTE /CSFB

Unified Messaging

Mobile Extension

Video Conferencing

Video Mail

Web Conferencing

Location Services

Enhanced NAB

Relative Market Value 7x 1x

Video Comm. & Location LTE/IMS LTE /CSFB

Mobil Collaboration

Multi-Party Video Call

Wireless BB Branch Office

Location-based Services

Interactive Mobile Kiosk

Relative Market Value 7x 1x

CO

NS

UM

ER

M

AR

KET

EN

TER

PR

ISE

MA

RK

ET

Source: ALU Primary Market Research, 2009

IMS enables a richer set of services with a higher market value

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INSTRUCTION

PROVIDING A NEW CONVERSATION EXPERIENCE FOR 4G LTE SUBSCRIBERS

CSFB:LEGACY VOICE, MESSAGING

versusversus

IMS:IMS VOICE, VIDEO, RCS, MESSAGING;APIS FOR MANY APPS, QUICKLY

DIRECTLY LAUNCHING IMS ONTO AN EXISTING LTE NETWORK PROVIDES SUPERIOR ECONOMIC RESULTS, WHEN COMPARED TO CSFB OR A CSFB-TO-IMS MIGRATION

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INSTRUCTION

COMPETITIVE TRANSFORMATION – IMS versus CSFB

TELCOS NOW DRIVEN BY COMPETITION FROM ADJACENT MARKETS

Customer experience

Innovation Efficiency

IMS CSFB

IMS CSFB

IMSIMS

IMSIMS

THE “TRANSFORMATION TRINITY” (1)THE “TRANSFORMATION TRINITY” (1)

(1) “What do transforming telcos measure?” Ovum, 30 June 2010 {includes BT, DT, FT, KPN, Telefonica, TNZ, Telstra(1) “What do transforming telcos measure?” Ovum, 30 June 2010 {includes BT, DT, FT, KPN, Telefonica, TNZ, Telstra

NEW METRICS ARE NEEDED (EXPERIENCE, INNOVATION, EFFICIENCY) BECAUSE ONLY FINANCIAL, TECHNICAL, AND NETWORK METRICS NO LONGER PAINT THE COMPLETE PICTURE

IMS ENABLES COMPETITIVE TRANSFORMATION;

CSFB TAKES CARE OF ONLY THE NETWORK’S EFFICIENCY

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INSTRUCTION

HOW IS 4G LTE USED?

OPERATORS USE LTE’S …

High bandwidth with low latency Per-service QoS Spectral and CapEx efficiency

improvement

… TO PROVIDE MOBILE DATA SERVICE WITH

Faster speed Improved experience Multiple concurrent sessions

THAT’S THE DATA STRATEGY, BUT WHAT ABOUT COMMUNICATION SERVICES?THAT’S THE DATA STRATEGY, BUT WHAT ABOUT COMMUNICATION SERVICES?

CSFB provides Voice, only voice Minimizes near-term spending Perpetuates 2G/3G’s CS + PS duality Cost-centric strategy

IMS provides Voice and beyond Connect, share, & organize conversations Full LTE utilization: all-IP, multi-application

concurrency, video, … User-centric strategy

IMS PROVIDES COMMUNICATIONS THAT FULLY UTILIZE 4G LTE’S PERSONAL, UNTETHERED BROADBAND

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INSTRUCTION

WHY IS VoLTE ESSENTIAL FOR 4G LTE?

VOLTE ENABLES COMPETITIVE VOICE AND IS FOUNDATIONAL FOR FURTHER SERVICES

Subscriber’s serviceVoLTE CSFB

OTT/ACP Providers

New conversations Voice-centric Many services

Standards’ value

Global roaming w/ full feature suite XGlobal interoperability w/ full feature suite XEnd to end QoS; also Emergency calling X

Multimedia

All-IP path enables video-comms, etc. X Multiple concurrent services enabled by 4G LTE X Blend voice with video, web, RCS-like, etc. X

Voice

Simultaneous voice and 4G LTE data service X Minimal voice call setup delay X Evolved voice: HD, new features, clickable URL, etc. X

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INSTRUCTION

GO TO MARKET, QUICKLY: A COMPETITIVE LAUNCH STRATEGY

2011 2012 2013 2011 2012 2013

VoLTE: 2nd line VoLTE: mass market

Collaboration & messaging

LTE video communications

Application Enablement Convergence

Use IMS to define the early LTE communications market, fueling profits.Then expand into mass services, having won the initial battles.Use IMS to define the early LTE communications market, fueling profits.Then expand into mass services, having won the initial battles.

Entice subscribers to IMS/LTE, because the service is not available in 3G. Video calls, sharing, storage lockers, social networking, multiscreen, etc. Across LTE, fixed, and web portals.

Entice subscribers to IMS/LTE, because the service is not available in 3G. Video calls, sharing, storage lockers, social networking, multiscreen, etc. Across LTE, fixed, and web portals.

2nd line VoLTE. Price low or free; no incentive to switch to alternative voice providers.

Mass market VoLTE. When ready, sell at a premium. Unbeatable appeal the OTT can’t match due to geographic coverage (legacy handover), global service via roaming, global service inter-operability for all-IP services (HD audio, video), QoS, etc.

2nd line VoLTE. Price low or free; no incentive to switch to alternative voice providers.

Mass market VoLTE. When ready, sell at a premium. Unbeatable appeal the OTT can’t match due to geographic coverage (legacy handover), global service via roaming, global service inter-operability for all-IP services (HD audio, video), QoS, etc.

RCS spans 3G, fixed, and the web; also LTE. Wraps comms with collaboration and messaging.

RCS spans 3G, fixed, and the web; also LTE. Wraps comms with collaboration and messaging.

Quickly create and deploy many apps Innovative apps for the network

Quickly create and deploy many apps Innovative apps for the network

Fully embrace the subscriber, everywhere

Fully embrace the subscriber, everywhere

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INSTRUCTION

COMPARING THE TOTAL COST OF OWNERSHIP

0

50

100

150

200

250

300

350

400

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

M E

UROS

Expenses Comparison

LTE IMS

LTE CSFB

0

5

10

15

20

25

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

M E

UROS

Investments Comparison

LTE IMS

LTE CSFB

0

200

400

600

800

1,000

1,200

LTE IMS LTE CSFB

M E

URO

S

Total Expenses Comparison

Device Subsidies

Opex

Sales & Marketing

General & Administrative

0

10

20

30

40

50

60

70

80

LTE IMS LTE CSFB

M E

URO

S

Total Investments Comparison

Pro-rated Device Subsidies dominate any other investment or expense

IMS’ TCO IS MODERATELY HIGHER

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INSTRUCTION

NETWORK COST OPTIMIZATION

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INSTRUCTION

CAPACITY IS WASTED IN MOBILE NETWORKS TODAY

• A study Alcatel-Lucent conducted for a major Tier-1 operator in North America revealed:

68% average base station busy hour utilization

The busy hour is unpredictable. It differs from base station to base station and even differs day to day for the same base station

13% daily traffic in busy hour

27% base station average utilizationoutside the busy hour during theproductive day (8 a.m. to midnight)

UNPARALLELED DEGREE OF WASTE

LOTS OF CAPACITY FOR LOW PRIORITY TRAFFIC

Percentage of daily load in busy hour of cell

10%

15%

20%

25%

30%

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INSTRUCTION

CONSIDERATIONS FOR YIELD MANAGEMENT IN MOBILE NETWORKS

1. CELL IS THE CRITICAL RESOURCE TO CONSIDER FOR YIELD MANAGEMENT 80% of network cash cost is in the Radio Access Network

Radio Frequency is generally a scarce resource

Core Network peaks are long (8am – midnight) and flat Contrary to cell peaks

Offering less interest for Yield Management then

2. CELL LOAD SHOULD BE CONSIDERED AT EACH CELL INDIVIDUALLY Each cell has a different traffic profile

3. CELL LOAD SHOULD BE CONSIDERED DYNAMICALLY There is no static traffic profile for a given cell

Trends can be observed but cell load is mostly unpredictable

There is a great deal of free capacity in each cell even when people are active 70-90% of the time between 8AM and midnight

Traffic Distribution of 20 Busiest Base Station

0%

5%

10%

15%

20%

25%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

(hour 24 hour clock)

(% o

f d

aily

ba

se

sta

tio

n lo

ad

)

(Done for a Tier-1 mobile operator, using the Alcatel-Lucent 9900 Wireless Network Guardian – WNG)

(Done for a Tier-1 mobile operator, using the Alcatel-Lucent 9900 Wireless Network Guardian – WNG)

Distribution of resource consumption whole network

0%

1%

2%

3%

4%

5%

6%

7%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour

% D

aily

co

ns

um

pti

on

Bytes

Airtime

Signalling

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INSTRUCTION

UNUSED ACCESS NETWORK CAPACITYPLENTY OF NETWORK RESOURCES AVAILABLE FOR MONETIZATION AT VIRTUALLY NO INCREMENTAL COST

RADIO ACCESS NETWORKS RESOURCES:

• Abundance of unutilized capacity

• Meets basic Yield Management requirements: Limited and “perishable” capacity with dynamic demand

OBJECTIVES:

• Reduce overall network costs by lowering cell peak traffic.

• Realize the value of spoiled capacity: Introduce offers that increase RAN usage during off-peak hours at virtually no incremental cost.

In one Radio Cell

Cell Data Traffic Demand* (as % of capacity)

0%

20%

40%

60%

80%

100%

8:00 16:00 0:00

"Spoilage" (unsold) Traffic demand (sold)

Decreased costReduced congestions

Increased Revenue

YIELD MANAGEMENT IS THE PROCESS OF UNDERSTANDING, ANTICIPATING AND INFLUENCING CONSUMER BEHAVIOR IN ORDER TO MAXIMIZE YIELD OR PROFITS FROM A FIXED, PERISHABLE RESOURCE (SUCH AS AIRLINE SEATS, HOTEL ROOM RESERVATIONS OR NETWORK RESOURCE/CAPACITY)

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INSTRUCTION

YIELD MANAGEMENT

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INSTRUCTION

BUILDING BLOCKS OF YIELD MANAGEMENT

VENDORS & PARTNERS

SUBSCRIBER

•USER INTERFACES•DEVICE

ANALYTICS•CONNECTION

MANAGEMENT

•APPLICATION ENABLEMENT

DATA COLLECTION

•NETWORK USAGE ANALYTICS•MARKET ANALYTICS•DEVICE-CLIENT STATISTICS

EXECUTION

•POLICIES & CONTROL•RULES ENFORCEMENT •BILLING•CUSTOMER RELATIONSHIP MANAGEMENT

CAPACITY & PRICING DECISION

•USER BEHAVIOR PREDICTION & SCORING (SEGMENTATION)

•NETWORK CAPACITY ALLOCATION & PRIORITIZATION

•DYNAMIC PRICING

SERVICE PROVIDER

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INSTRUCTION

INTELLIGENT TRAFFIC MANAGEMENTLEVERAGING NETWORK INTELLIGENCE WITH POLICY

5780 DSC (Dynamic Services Controller)

9900 Wireless Network Guardian

Monitor and Analyze

Anomaly Notification

Process and Trigger

Customer Analytics

Enforce and Deliver

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INSTRUCTION

1. TELECOM INDUSTRY TRENDS – OPPORTUNITY OR CHALLENGE

2. THE RIGHT STRATEGY TOUCHES BOTH DIMENSIONS OF YOUR BUSINESS – TOP LINE AND BOTTOM LINE

3. ADDRESS THE REVENUE DIMENSION BY CREATING VALUE FOR YOUR CUSTOMERS

4. CONTROL YOUR CAPEX/OPEX AND DECREASE PER-BIT DELIVERY COST

5. CONCLUSION

AGENDA

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INSTRUCTION

1. CUSTOMER EXPERIENCE SHOULD BE AT THE CORE OF YOUR BUSINESS

I. CUSTOMER INTIMACY IS THE MOST VALUABLE ASSET FOR AN OPERATOR

II. CUSTOMER EXPERIENCE IS THE SECRET WEAPON TO DEFEND THE OTT THREAT

2. PROTECT YOUR REVENUE BY DEPLOYING REAL-TIME CHARGING CAPABILITIES INSIDE YOUR NETWORK

3. DEPLOY ONE CONVERGED, SCALABLE, INTELLIGENT ALL-IP NETWORK THAT DELIVERS BANDWIDTH AT THE LOWEST COST PER BIT

4. CONTROL YOUR NETWORK COSTS BY MANAGING PROPERLY THE DATA TRAFIC INSIDE YOUR NETWORK THROUGH YIELD MANAGEMENT

OPERATOR NETWORK STRATEGY CONSIDERATIONS

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INSTRUCTION

OPERATORS BUSINESS STRATEGY CONSIDERATIONS

IMPROVED CUSTOMER EXPERIENCE

INFRASTRUCTURE AND COST

OPTIMIZATION

NEW REVENUE OPPORTUNITIES

BEST-OF-BREED DATA MINING AND

ANALYTICS

MAINTAIN A STRONG MARKET PRESENCE

Service providers will have to develop services and applications that may well cannibalize their existing revenue streams. While this may affect their bottom lines, it well help them to defend against new disruptive players and remain relevant to their customers.

CREATE NEW PARTNERSHIPS

Forming partnerships will help service providers to increase innovation and time-to-market, which will enable them to exploit new gaps in the market.

LOOK FOR NEW WAYS TO MONETIZE

Existing business models will be hard to maintain, so service providers will need to work hard to find new innovative ways to monetize their services.

TURN CUSTOMER DATA ASSETS INTO REVENUES

Service providers will need to leverage customer data by investing in best-of-breed analytics platforms and capabilities.

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INSTRUCTION

Q & AQ & A

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INSTRUCTION