User-Centric Broadband: Alcatel’s vision for growth IDATE - November 25, 2004 Philippe Germond,...

User-Centric Broadband: Alcatel’s vision for growth

IDATE - November 25, 2004

Philippe Germond, Alcatel

User-Centric Broadband: Alcatel’s vision for growth All rights reserved © 2004, Alcatel

From the Internet Bubble to the Broadband World

High Traffic Growth

Low $ Value

High Traffic Growth

Low $ Value

Internet wave I

Internet wave II: The Broadband World

High Traffic Growth

High $ Value

High Traffic Growth

High $ Value

Will the addressable $ pie grow?

3 questions for Service Providers:

How will they grab a larger share of the pie?

Alcatel’s “User-Centric Broadband” vision for success


Internet Wave II: The Broadband World

Question #1

for Service Providers:

Question #1


Will the Addressable

Pie Grow?

Will the Addressable

Pie Grow?


Opportunity for Voice & Data Communications: Maturing Market

Source: IDATE, DigiWorld 2004Source: IDATE, DigiWorld 2004

Emerging markets: growth from increased mobile penetration

Developed markets•Fixed telephony decreasing (fixed-mobile substitution, pricing models)

•Still increasedmobile usage

•Increased broadband penetration (fixed & mobile)

VoIP threat


4.6 m

2 m

0.7 m

Broadband demand has proven elastic to price decreases and bandwith growth

X 3Price drop

Bandwidth X 2Users X 6

<1 k<1 k 60 k

60 k

700 k700 k

Total lines

Unbundled lines

X 1k

… in two years

Unbundled lines

512 Kb 1 Mb

Example: French fixed broadband marketExample: French fixed broadband market

1

0

2

3

4

5

10

0

20

30

40

50

Mid 2002 Mid 2003 Mid 2004

Users (m) Monthly fees (€)

€

€

€


150M paid downloads (oct 04): value is ease-of-use with iPod and “clear conscience”

From free dial-up access to €30/month triple play broadband service

Free + Premium Services (mobile access & extra content) for specific segments (ex: avid investors)

From “Free” to “Free + Premium”:customer segments pay for specific value & simplicity

Future model is combination free + premium services

Premium value: immediacy, personalization, richness, legal, mobile access...


A lot of unmet needs beyond access

Source: Alcatel focus group research, April 2004Source: Alcatel focus group research, April 2004

Hierarchy of Broadband NeedsHierarchy of Broadband Needs

Connect Me

Organize Me

Entertain Me

Empower Me

Key Success Factors will be CUSTOMER VALUE and EASE OF USE

Translating UnmetNeeds into ServicesTranslating UnmetNeeds into Services

Examples of ServicesExamples of Services

VirtualAssistant

Virtual Watchman

Video on demandVideo on the go

Message ManagementAutomatic Synchronization

Network Back-Up

Video-TelephonyReal-time Quality and Cost-Based Routing


Will the Addressable Pie Grow?

COMMUNICATIONS

*Source: ALCATEL based on various analyst sources*Source: ALCATEL based on various analyst sources

The Opportunities in:• Consumer• Small & Medium Business

Where is the market disruption (big opportunity to grow)?

Voice and Data Communication

(€1000Bn)*


(€1000Bn)*


The Opportunity for Communications

Hierarchyof Broadband Needs

Connect Me

Organize Me

Entertain Me

Empower Me

Will Video Communicationscome of age?

Source: Alcatel Video Research, Dallas, Philadelphia, London, Milan; Alcatel August 2004Source: Alcatel Video Research, Dallas, Philadelphia, London, Milan; Alcatel August 2004

REMOTE MONITORING“Track what is important to me”

CONTENT EXCHANGE“See what I see”

EMOTION SHARING“Feel what I feel”


(€1000Bn)


(€1000Bn)


The Opportunity for Communications

BROADBANDENTERTAINMENT

Connect Me

Organize Me

Entertain Me

Empower Me

Hierarchyof Broadband Needs

Will Interactive Videocome of age?

Will Mobile Entertainmentcome of age?

Broadcastand Content

(€300Bn)


(€300Bn)

Interactive Video Mobile Entertainment


MORE PERSONALIZED“Primetime” becomes “My Time” From “Broadcast” to “User-Centric distribution” (ex: VoD)

MORE PERSONALIZED“Primetime” becomes “My Time” From “Broadcast” to “User-Centric distribution” (ex: VoD)

MORE ACCESSIBLEEntertainment goes mobileMORE ACCESSIBLEEntertainment goes mobile

MORE INTERACTIVEEntertainment and Communications habits converge “View together”Mobile phone becomes remote control

MORE INTERACTIVEEntertainment and Communications habits converge “View together”Mobile phone becomes remote control

Source: Alcatel Video Research, Dallas, Philadelphia, London, Milan; Alcatel August 2004

Unmet User Needs in Video Entertainment: Opportunity for Broadband

User-CentricBroadband

Video

User-CentricBroadband

Video


Service Providers and Content Providers: Alcatel Facilitates Conditions for Joint Growth

Conditions for joint growth:

Broadband security against piracy

User-Centric Digital Rights Management

Early release for Video on Demand


Will the Addressable Pie Grow?The new Consumer Market for Service Providers

+COMMUNICATIONS ENTERTAINMENT


(€300Bn)


(€300Bn)

Video CommunicationsInteractive Video

Mobile Entertainment


(€1000Bn)


(€1000Bn)


Will the Addressable Pie Grow?The Small and Medium Business (SMB) Opportunity

SMB Mass MarketPacks for mainlysingle site SMBs

1Ms

SMB Mid MarketSolutions for

multi site SMBs100ks

SMB demand simplicity•ICT integration•One-stop shopping & support

Telcos can leverage•Brand•Local footprint

Need to sort out•Offering (ICT bundle)•Channel strategy

Sources: Alcatel, Eurostat, BNP Paribas, IDC, AMI Partners, Frost&SullivanSources: Alcatel, Eurostat, BNP Paribas, IDC, AMI Partners, Frost&Sullivan


Question #2


Question #2



How to Grab

a Larger Share

of the Pie?

How to Grab

a Larger Share

of the Pie?



(€300Bn)


(€300Bn)

Video CommunicationsInteractive Video

Mobile Entertainment


(€1000Bn)


(€1000Bn)

New Competition for the Consumer Opportunity

+COMMUNICATIONS ENTERTAINMENT

MS.NET MODEL

CABLE

OPERATORS

SATELLITE

BROADCASTERS

CONTENTPROVIDERS


Alcatel sees 3 stages of evolution

BroadbandServices

BroadbandServices

User-Centric BroadbandServices

User-Centric BroadbandServices

Multiple new Connectivity

Services

Multiple new Connectivity

Services

20051995 2000 2010

New Services

Adoption


What consumers tell us: they want MORE DIVERSITY

Hierarchy of Broadband NeedsHierarchy of Broadband Needs

Connect Me

Organize Me

EntertainMe

EmpowerMe

Users want a DIVERSITY of devices

and connectivity

Users want a DIVERSITY of devices

and connectivity++Users want a DIVERSITY of services

Users want a DIVERSITY of services

Source: Alcatel focus group research, April 2004Source: Alcatel focus group research, April 2004

MobilityMobility

SecuritySecurity

ComfortComfort CostCostOptimalTrade-Off


Users demand SIMPLICITY

Diversity of services, devices and connectivity creates COMPLEXITY

Network will manage COMPLEXITY for the User

Any device, Any broadband

Single Authentication

Consistent Personalization

Transparent Synchronization

NETWORK ORCHESTRATES for SIMPLE EXPERIENCE


Service Providers are in key position to increase CUSTOMER APPEAL & LOYALTY

Service Providers’key opportunities

Service Providers’key assets

CommunicationNetworks

Customer relationship(invoice, support interactions,

behavioral data)

Brand

Rewarding experience (Quality of Service, Choice of Connectivity, one-Stop Shopping)

Single customer profile(single bill, single reference for parameters & data)

Trusted Guardian(security and privacy)


Broadband Video Strategy for Service Providers: Communications enable new User Entertainment Experience

Phase 3:Differentiate

long-term

Phase 3:Differentiate

long-termUSER-CENTRIC BROADBAND SERVICES

Phase 1:Market entry

Phase 1:Market entry

FIXED SERVICE MOBILE SERVICE

TRIPLE PLAYSERVICE BUNDLE

2.5G BASICMOBILE VIDEO

Phase 2:Secure

anddevelop

Phase 2:Secure

anddevelop

PERSONALIZED ANDINTERACTIVE EXPERIENCE

VIDEO-TELEPHONYINTEROPERABILITY

PERSONALIZED ANDINTERACTIVE EXPERIENCE

VIDEO-TELEPHONYINTEROPERABILITY


Alcatel’s

“User-Centric

Broadband”

vision for Service

Provider success

Alcatel’s

“User-Centric

Broadband”

vision for Service

Provider success



Enabling User-Centric Broadband

The bestaccess

networkavailablefor whatthe user

needs to dohere & now

A servicedeliveryplatform

managinga single

customerprofile

A transportthat providesthe required

Qualityof Service

BusinessEnvironment

An

y C

on

ten

t

Every

Term

inal, E

very

wh

ere

Each

Use

r

ConsumerEnvironment


User-Centric Broadband Architecture

UniversalBroadband

Access

Wireline

WirelessSatellite

Mobile

Service

Delivery

Platform

Service Aware Edge

& Data

Aware Transport

BusinessEnvironment

An

y C

on

ten

t

Every

Term

inal, E

very

wh

ere

Each

Use

r

ConsumerEnvironment

Integration & Operations

Operations & Business Support Systems


Mastery of Key TechnologiesAlcatel End-to-End IntegratorBusiness environment IP-PBX: Europe #1 Contact centers: WW #1 Voice infra: within top 4

Wireline accessWW #1

Wireless accessTelecom satellite: WW #1LMDS: WW #1

Mobile accessWithin top 4 GSM, fastest growingEvolium JV vith Fujitsu: largest 3G installed base

Service Aware Edge & DataAware Optics Optics: WW #1 Wireless transmission: WW #1

NB switching: WW #1 ATM/FR: #2 IP multiservice routers: leader

Service Delivery Platform Extensive suite Leading positions in rating,Mobile Prepaid,Video applications

Services Professional services: within top 3

Network outsourcing: WW #1


France Telecom

Alcatel is FT’s partner for IMS-enabled services


Alcatel and BT

Speed to Market

Customer Experienc

e

Cost Transformatio

n

21CN

Alcatel is BT’s partner for:21CN

Project BluePhone

BT Communicator


Alcatel and SBC

Alcatel is SBC’s partner for Project LightspeedOct. 21st, 2004


Alcatel Broaden Your Life


www.alcatel.com

User-Centric Broadband: Alcatel’s vision for growth IDATE - November 25, 2004 Philippe Germond,...

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