Redefining Boundaries - Total Telecom Festival 1 Dec 2015
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The document summarizes findings from a global study of C-level executives, including those from the telecommunications industry. It finds that executives expect increased competition from both within and outside their industries. They see emerging technologies like cognitive computing, the Internet of Things, cloud and virtualization as major drivers of change. However, some telecom companies are better prepared for disruption. These "Torchbearers" focus more on customers, are more innovative in their business models and revenue streams, and are willing to be first-to-market with new offerings. To thrive in the digital future, all companies must move with speed, scale and scope.
Redefining Boundaries - Total Telecom Festival 1 Dec 2015
- 1. Redefining Boundaries Insights from the Global C-suite Study Rob van den Dam Global Telecommunications Industry Leader IBM Institute for Business Value
- 2. For this study we surveyed business leaders… Chief Executive Officers (CEOs) Chief Financial Officers (CFOs) Chief Human Resources Officers (CHROs) Chief Information Officers (CIOs) Chief Marketing Officers (CMOs) Chief Operating Officers (COOs) 818 643 601 1,805 723 657 ©2015 IBM Corporation2 were from Telecommunications 295
- 3. ©2015 IBM Corporation3 …from more than countries North America Central and South America Western Europe Middle East and Africa Central and Eastern Europe Asia Pacific Japan
- 4. ©2015 IBM Corporation 10 December 20154 What’s putting the world’s top executives on edge?
- 5. ©2015 IBM Corporation5 CxOs are terrified of outsiders making a land grab More competition expected from other industries More competition expected from within the same industry Business landscape change (in 3 to 5 years) 54%29% 76% Telecom industry….. any many more Digital Disruptors
- 6. ©2015 IBM Corporation 10 December 20156 “The ‘Uber syndrome’ – where a competitor with a completely different business model enters your industry and flattens you.” Judy Lemke, CIO, Schneider, United States
- 7. ©2015 IBM Corporation7 CxOs expect industry convergence to have the biggest impact on their business Industry convergence The “anywhere” workplace Rising cyber risk The redistribution of consumer purchasing power The sustainability imperative Alternative finance and financing mechanisms The sharing economy Top trends to impact business (in 3 to 5 years) Total CEO CFO CHRO CIO CMO COO 70% 60% 50% 40% 30% 20% 10% 0% 80% Telecom
- 8. ©2015 IBM Corporation8 CEOs again selected technology as the most important external force that will affect their enterprise External forces impacting the enterprise (in 3 to 5 years) 2006 2008 2010 2012 20152004 Technology factors Market factors Regulatory concerns Macro-economic factors Socio-economic factors Globalization People skills Geopolitical factors Environmental issues 2013
- 9. ©2015 IBM Corporation9 In coming years, CSPs expect increased impact from cognitive, SDN/NFV, eSIMs, IoT and energy savings Which of the following TECHNOLOGIES will be most important for the industry? SPECTRUM EFFICIENCY BIG DATA MOBILE PAYMENTS CLOUD COMPUTING ENERGY SAVINGS INTERNET OF THINGS SDN/NFV eSIM/ VIRTUAL SIM COGNITIVE COMPUTING SECURITY SOLUTIONS 80% 72% 71% 69% 66% 51% 50% 44% 24% 19% COGNITIVE eSIM/ Virtual SIM VIRTUALIZATION ENERGY SAVING INTERNET OF THINGS 2020 67% 67% 68% 52% 65% 64% 76% 73% 82% 90% NOW
- 10. ©2015 IBM Corporation10 Cognitive computing to enable CSPs to derive ‘deeper’ contextual insights 89% 8% 33% 53% 1-2 yrs 3-4 yrs >=5 yrs … of CSP executives familiar with cognitive computing believe it will play a critical role in the future of their business 94% of executives familiar with cognitive computing indicated that they are likely to invest in it in future Analytics • addresses predefined problems • provides accurate definitive answers • handles information with known semantics • interacts in formal digital means (e.g. commands, screens) Cognitive • addresses ambiguous problems within context • provides answers with a margin of error • handles information without explicitly knowing semantics • interacts in natural language
- 11. ©2015 IBM Corporation11 Cloud-based networking to deliver services over an open, agile and cost-effective infrastructure Services SDN NFV 2014 2015E 2016E 2017E 2018E 2019E 2020E Billions $ 175 $ 150 $ 125 $ 100 $ 75 $ 50 $ 25 $ 0 NFV and SDN spending expected to grow to nearly $157B by 2020 RCRWireless, Sept 17, 2015 AT&T shows how serious it is about SDN, NFV and open source FierceWireless, Aug 20, 2015 AT&T wants to virtualize 75 percent of its network by 2020. Agility, faster TTM Elasticity Cost take-out Network monetization
- 12. ©2015 IBM Corporation12 CSPs are trying to secure leading positions in the technology infrastructure for the IoT Global Machine-to-Machine Growth and Migration from 2G to 3G and 4G 2014 2015E 2016E 2017E 2018E 2019E BillionsofM2MConnections 2G 3G 4G LPWA 45% CAGR 2014 -2019 0.5B 0.7B 1.1B 1.6B 2.3B 3.2B 29% 13% 35% 23% 1% 32% 67% 3.5 3.0 2.5 1.5 1.0 0.5 0.0 Cisco Visial Networking Index AT&T Inc has big plans for the IoT WorldBizToday, Sept 24, 2015 Vodafone buys Italian car technology company Cobra Automotive for £115m The Telegraph, June 16, 2014 Orange invests in LoRa network for IoT DigitalTVEurope, Sept 21, 2015
- 13. ©2015 IBM Corporation13 The eSIM has a huge potential to modernize the way connectivity is delivered to consumer and IoT devices OVERALL MARKET GROWTH OVERALL MARKET GROWTH 478M 639MEMBEDDED M2M SIM CONNECTIONS 2020 EMBEDDED M2M SIM CONNECTIONS 2020 PROPRIETARY EMBEDDEDSIM GSMA EMBEDDEDSIM SPECIFICATION 2020 2019 2018 2017 2015 2016 2014 2013 2020 2019 2018 2017 2015 2016 2014 2013Fragmented market growth slower Open market approach promotes market growth Apple SIM: bad news for mobile operators? Mobile Industry Review, Oct 24, 2014 The Apple SIM lets customers easily switch between mobile operators without having to swap SIM cards. GSMA gets boost from operators for embedded SIM M2M tech Mobile Europe, Oct 7, 2015 The GSMA's embedded SIM specification has now been backed by 23 operators, ……
- 14. ©2015 IBM Corporation14 Cost savings & environmental responsibility are driving reasons for looking into energy saving technology • New technologies are more energy efficient • 75% less consumption between LTE and 3G (stand-by feature) • Advanced techniques of cooling mast sites • Increase use of renewable energy • TCO reduction up to 30% with solar energy-based base stations • More mobile network sharing • 20% cost savings from network sharing • Use of multi-RAN platform • More and more use of software
- 15. ©2015 IBM Corporation15 We have identified a small group of leading innovators that financially outperform: Torchbearers Torchbearers 100% are Leading Innovators 20% of Leading Innovators are Outperformers; thus 5% of the total population are Torchbearers * Peer level Market Followers Leading Innovators 24%42%34% 2% 5% 20% * Outperformers in growth and profitability
- 16. ©2015 IBM Corporation16 59% 52% More decentralized decision-making Greater focus on new markets More competition expected from other industries Market FollowersTorchbearers 69% 57% 62% 45% more 38% more 13% more 21% Telecom 76% Telecom 70% Telecom 56% Torchbearers are better placed to take on the disrupters
- 17. ©2015 IBM Corporation17 Torchbearers pay more attention to their customers than to their competitors 60% 49% Customer feedback 42% 54% Competitors External sources to identify the next wave more 22% less 22% Market FollowersTorchbearers Telecom 44% Telecom 43%
- 18. ©2015 IBM Corporation18 Torchbearers are far more concerned with preparing to change how they go to market 70% 56% Revenue model 64% 51% Customer segments Parts of the business most impacted by the next wave more 25% more 25% Market FollowersTorchbearers Telecom 77% Telecom 58%
- 19. ©2015 IBM Corporation 10 December 201519 “Uber has a market cap that exceeds the market cap of all the car rental companies combined, and it’s only an app.” CMO, Transportation, United States ©2015 IBM Corporation19
- 20. ©2015 IBM Corporation20 Torchbearers are more likely to have deployed a more future-oriented business model 38% 29% Open (ecosystem) 27% 20% Platform Business model types (currently using) more 31% more 35% Market FollowersTorchbearers Telecom 51% Telecom 44%
- 21. ©2015 IBM Corporation21 Whether launching a new business model or a new product offering, Torchbearers prefer to be first 80% 41% 80% 41% Preference to reach the market first more 95% Market FollowersTorchbearers Telecom 65%
- 22. ©2015 IBM Corporation22 Prepare for the digital invaders Create a panoramic perspective Be first, be best, or be nowhere ©2015 IBM Corporation22
- 23. ©2015 IBM Corporation 10 December 201523 Speed ©2015 IBM Corporation23 Scale Scope
- 24. ©2015 IBM Corporation24 What’s next? ibm.com/csuitestudy