Telecom Trends, Challenges &...
Transcript of Telecom Trends, Challenges &...
Telecom Trends, Challenges & Opportunities
2Telecom trends / Ogilvy Asia_082412
* As at 31st March 2012
RM16.4bn (USD5.5bn)Revenue in 2011
Over RM44.1bn* (USD14.2bn)Market cap
AXIATA GROUP AT A GLANCE
10Countries
>20,000Employees
>207*million customers
Pakistan Iran Thailand
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THE LEADER IN EMERGING ASIA MOBILE TELECOMSONE OF THE THREE MAJOR TELCO GROUPS IN SOUTHEAST AND SOUTH ASIA
Non-mobile assets
#1
#3 #3
#3
#3
#2
#3
Affiliates
Subsidiaries
Note: Data as at end Mar 2012. Market position w.r.t. subscriber base
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MOBILE TELECOM’S QUICK STATSAN INDUSTRY FOR THE DECADE
1.2bPersonal
Computers
1.1bLandline Phones
1.6bTelevision
Sets
1.0bRegistered Vehicles
1.7bCredit Card
Users
2.3bInternet Users
2.2bUnbanked Persons
3.9bRadio
Receivers
6.3bMobile Lines
4.4bUnique Users
1.2tIndustry Revenue
1.8b3G
Users
1.6bHave No Electricity
4.2bHave a
Toothbrush
5.0bHave a
Job
4.2bUse SMS
1.0bFacebook
Users
1.4bEmail Users
2.1bMMS Users
2.3t*Internet
Revenue*BCG G20 Internet Economy Value (2010)
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TECH CYCYLES TEND TO LAST 10 YEARSTHE NEXT COMPUTING CYCLE BEGAN WITH THE iPHONE LAUNCH IN 2007
Mainframe Computing
1960s
Mini Computing
1970s
Personal Computing
1980s
Desktop Internet
Computing1990s
Mobile Internet
Computing2000s
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1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
1,000
2,000
3,000
4,000
5,000
6,000
FIRST GENERATION OF RE-IMAGINATION - AFTER 125 YEARS, LANDLINES WERE SURPASSED BY MOBILES IN 2002
Global Fixed Telephone Lines vs. Mobile Subscriptions, 1994-2012
2006 LandLines
Peaked at 1.3b
2002 : Inflection PointMobile > Landlines
2012 6.3b Mobile Subscribers
Fixed Telephone Lines
Mobile Subscriptions
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RE-IMAGINATION OF COMPUTING DEVICES
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RE-IMAGINATION OF CONNECTIVITY
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RE-IMAGINATION OF LIFE STORIES
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RE-IMAGINATION OF NEWS & INFORMATION FLOW
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RE-IMAGINATION OF NOTE TAKING
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RE-IMAGINATION OF PHOTOGRAPHY
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RE-IMAGINATION OF MAGAZINES
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RE-IMAGINATION OF MUSIC
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RE-IMAGINATION OF SOUND
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RE-IMAGINATION OF VIDEO
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RE-IMAGINATION OF NAVIGATION & TRAFFIC INFO
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RE-IMAGINATION OF COUPONS & LOCAL SERVICES
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Marketing & Advertising Smart poster Targeted consumer information Leisure Data Collection
Ticketing Transport ticketing Airline check-in Parking Venue access
Payments Point-of-sale payment Vending machines Utilities Multiple cards
Loyalty Loyalty schemes Personalized offers Incremental services Multiple cards
Information Sharing Peer-to-peer vCard distribution Social networking and
location based services Call request SMS notification Education
Vouchers and Coupons Vouchers Social media Consumer reach Targeted marketing
Identity Health Public health Prescription tracking Events Workforce management Asset tracking Vehicle information
Access Control Smart poster Targeted consumer information Leisure Data Collection
RE-IMAGINATION OF TELECOMS
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Note: Data on left-hand side as of Q1 2012Source: SNL, Euromonitor; Facebook, Pyramid, Endgaget, Appdata, GlobelWebIndex, KPCB Top Mobile Internet Trends 2011, IDC Mobile VoIP report, Google report: the mobile movement, BCG analysis
Consumers radically shifting their behavior to the online world
...and mobile also becoming integral part of daily life
of people shopping on smart phones
use applications
watch videos
What are people willing to give up for Internet usage on Smart phones?
43%Beer
36%Chocolate
34%Superbowl
tickets
26%Highheels
20%Cable TV
Social: 901 MnFB users
VOIP: 250 Mn Skype
users
Shopping:400 Mn users
Gaming:250 Mn users
Apps: 15 Bn+
Apple apps downloadedMusic: 10 Bn+
iTunes songs downloaded
A FUNDAMENTAL SHIFT IN CONSUMER BEHAVIOR IS TAKING PLACE FROM BRICK-AND-MORTAR TO DIGITAL SERVICES
79%68%48%
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DIGITAL SERVICES REPRESENT A HUGE GROWTH POTENTIAL FOR TELCOS AS DISPLACEMENT OF OFFLINE REVENUE CONTINUES
Mobile Advertising
Mobile Payments
Digital Commerce
Mobile Remittances
Digital Ad spend > Print Ad spend for the
first time in 2010
+60% mobile payment transactions in 2012
(USD 172 Bn)
USD 5 Bn mobile sales at eBay in 2011 (+455% since 2009)
35% annual growth globally – USD 55 Bn
market in 2016
Source: Press search, Gartner, Juniper Research
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MOVIES – DIGITAL SERVICES APPSAMAZON PRICE CHECK – GROUPON NOW – TESCO
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BUT UNFORTUNATELY, ‘PURE INNOVATION’ WEB PLAYERS ARE THREATENING FUTURE MOBILE GROWTH…
Many potential opportunities for monetization are now being delivered native with mobile as just a bit pipe
Operator service OTT service
Backup service
Radio service
Video service
Picture service
Messaging service
• Per SMS charge or bundled with price plan
• Per MMS charge or bundled with price plan
• Monthly TV package with 3G service
• Additional charges for extra channels
• Monthly radio service
• Phone book solution with monthly recurring fee
• Full and incremental SIM backup
• Free text messaging, now includes free voice calls
• Native integration with phone camera linked to share on FB/Picasa.
• Native integration with phone to view Youtube,
• Free radio service – ability to created own stations based on preference
• Ability to share playlist
• Free 5GB storage service• Synchronization between devices
From To
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…AND MAKING OUR INDUSTRY NO LONGER A GROWTH INDUSTRYEven low penetration markets are under revenue pressure: growth slowing disproportionately to penetration increase
Few markets are still ‘growth markets’… …despite high penetration levels
22%20%
15%
6%8% 8%
6%5%
4% 4%2%
31%
28%
18%
14%
10%9%
6%4%
3% 3% 2%
47%
42%
40%
32%
18%
14% 14%
11%9%
7%6%
43%
37%
25%
18%
15% 15% 15%
8%7%
5% 5%
44%
38%
32% 33% 34%
27%
21%
15%
10%8% 7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Revenue Growth - Axiata MarketsMalaysiaIndonesiaSri Lanka
86%
98%108%
120%
131%140%
147%153%
157% 160%
44%
69%
81%
97%
109%
120%129%
137%144%
150%
41%
52%
65%
80%90%
98%104%
109%113%
116%
23%
29% 35%44%
52%59%
65%70%
75% 79%
17% 26%
42%
60%
72%
82%91%
98%105%
111%
20%29%
44%
62%
77%
92%102%
110% 116%123%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Market Penetration - Axiata MarketsMalaysiaIndonesiaSri Lanka
Source: Frost & Sullivan
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Nationwide retail presence
Customer relationship
Trusted, ubiquitous
brand
We will focus on leveraging our core mobile assets…
…but offer Voice, Messaging and Digital Services, anywhere, anytime and on any device
Anywhere
Anytime
Any service
Any device
Mobile network / platforms
Mobility-Centric
Lifestyle Services
MOBILE OPERATORS OWN CORE ASSETS THAT WE CAN LEVERAGE TO OFFER MOBILITY-CENTRIC LIFESTYLE SERVICES
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Content-based
DIGITAL SERVICES OFFER ATTRACTIVE GROWTH OPPORTUNITIES ACROSS AN INCREASING SET OF PRODUCT CATEGORIES
Digital Services Ecosystems
Mobile Advertising Digital Commerce Localized Data Services (LDS) Mobile Financial Services
Segment-specific e.g.
Career
Classified
Games
Music
Sports
Service-based
Coupons
Dining
Travel
Cloud Machine-to-machine Mobile Health
Regional players
Payment (NFC)
Payment (Non-NFC)
Mobile Banking
Remittance
Con
sum
ers
Acc
ess
Mer
chan
ts, E
nd-c
onsu
mer
s an
d us
ers
Over-the-top voice
Over-the-top
messaging
Over-the-top entertainment(video/ IPTV)
Existing services
Adjacent space
Enabling services and infrastructure
Relationship
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MobileAccessibility,
Immediacy
Multi-deviceCapability
Brand
Customer Service
AdvertisingInventory
Customer knowledge
Customer Locator
DistributionNetwork
Social NetworkIntegration
Local market knowledge
Billing
Extensive mobile subscribers base
Multiple devices access capabilities
Established trusted brand
Existing 24/7 customer service and walk-in centers
Advertising real-estate across multiple channels
Behavioral and spending data (demographics)
Customer locator
SnS1 deployment and zero-rated SnSsites
Extensive local market insights
Extensive coverage of distribution network
Existing billing relationship with customers
1 Social networking services
DEVELOPING MARKETS MOBILE OPERATORS ARE UNIQUELY POSITIONED TO PLAY IN THESE SPACES
Competitive Advantage
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07:00• Wake up to
have quick breakfast
12:00• Pay for lunch at
McDonalds using mobile paytments
00:00• Go to bed
08:00• Attend
morning classes and receive ads on mobilefor special promotion at McDonalds
20:00• Have dinner
with friends while downloading music from XL Entertainment
07:30• Check Twitter and
Facebook before going to class
21:00• Look up Wikipedia on
internet to research for class homework
22:00• Takes short breaks in
between by watching Youtube and browsing Lojai on my mobile for new products
Angga
11:00• Send Whatsapp
to classmates to meet at McDonalds
15:00• Play Warcraft against my friend on
Android phone to kill time between classes
• Send BBM to class project team to set up time for meeting
Source: Face-to-Face interview conducted in Indonesia
DIGITAL SERVICES CAN ALLOW TELCOS TO BE MORE RELEVANT TO CONSUMERS BEYOND CONNECTIVITY SERVICES
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Click on display ad on mobile
portal
Consider offer based on location
and popularity
Select and confirm offer to purchase
Pay for offer using mobile money
account
Unlock exclusive deals based on
past transactions
AwarenessM-Ads
ConsiderationLocalized Digital Svcs
PurchaseM-Commerce
PaymentM-Payment
LoyaltyLocalized Digital svcs
Advertiser will be charged
based on CPC/ CPM/ CPL or other agreed
rate
Payment provider
charges for transacting sale ~ 1-2% of gross
value
Merchant spends on loyalty –
typically 1% of gross value
Platform owner charges for
facilitating sale –typically 5% of
gross value
Share of LDS revenue will be captured in
localized ad spending & commerce
Advertising revenue
LDS transaction fee
Advertising revenue
Commerce revenue
Commerce transaction fee
based on commerce
value
Payment transaction fee
based on commerce, and other
payment value
LDS transaction fee
Advertising revenue
Commerce revenue
Note: Numbers are indicative and can vary by merchantsSource: BCG analysis
DIGITAL SERVICES ARE HIGHLY INTERDEPENDENT AS THEY FOLLOW THE CUSTOMER WALK-THROUGH
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MILLION DOLLAR QUESTION: WHICH ONE TO FOCUS ON?!
How do we?...
Internet users / world population
Converting RAW DATA into ACTION is the new challenge!
Reach
Engage
Monetize
time spent online / week1
Online advertising share of total advertising spend
14%
31%
>8% eCommerce share of total retail…
16%
Source: ITU, World Bank, Trade Sources, Euromonitor, Forrester, UN Department of Economic and Social Affairs, Goldman Sachs1 Assumes 8hrs sleep per day and 2.5hrs spent at meals per day