Telco Transformation: Preliminary research results show large variation in strategy and progress

It is a couple of weeks since we started a piece of research focused on the transformation of Communications Service Providers (CSPs).  We thought it might entice more CSP executives to respond to our survey if we gave you a peak at some of the results.  A full analysis will be made available to survey respondents that fully complete the survey.

The survey itself is available here and will take 10 minutes to complete.

It covers:

  • CSP aspirations for digital services
  • Optimal investment levels for digital services and how close CSPs are to this at present
  • Key success factors for implementation of digital services and progress in addressing these

Initial research results

Turning to this last point around implementation key success factors, below is a chart summarising the results of the first 30 or so respondents with two factors revealed (we don't show more lest we prejudice you before you complete the survey):

Source: CEP Transformation Survey, Preliminary research results only

It is clear that, on average:

  • 8 out of 9 of the key success factors are rated as close to or above 'Important'
  • 2 factors are rated as being particularly important - 'Senior management support' being one of these. 
  • All of the factors will take more than 2 years to 'resolve' with several close to averaging over two years (including 'Prioritising digital services'). 

So, in summary, there is a lot of important stuff to get right if CSPs are to transform themselves and successfully adopt new business models and services and it is going to take a while to get there.

Digging a bit deeper shows wide variation

As any statistician will tell you, averages are awfully misleading.  In this case, what they fail to show is the variance from respondents in the two factors we have revealed - 'Senior management support' and 'Prioritising digital services'.  The charts below show the distribution of responses among all participants (with the bubble size representing the proportion of respondents) for both factors.

Source: CEP Transformation Survey, Preliminary research results only

What these show is that:
  • While there is consistency among respondents about the importance of senior management support for CSP transformation, there is huge variability over progress.

o   Worryingly, few respondents feel they yet have the support of senior management - Only 14% rated it as 'Competed, In hand'

o   Perhaps even more worrying is that 25% are unclear on how to progress winning over their senior management team

  • For 'Prioritising digital services' things are even more varied:

o   Wide scope of responses on both importance to change and organisation progress

o   Around 28% feel it is 'Irrelevant' or of 'Limited Importance' and most of these, unsurprisingly feel it will take more than 2 years to resolve or are unclear how to resolve (but presumably don't care much about this) - the 5 bubbles in the bottom right

o   Conversely, 46% feel it is either 'Important' or 'Critical' and are equally sceptical about their organisation's ability to resolve - the 4 bubbles in the top right


Once we have sufficient responses, we will share the detailed results with respondents and give insight about differences by region and, potentially, by individual CSP.   Will also explore how big CSPs think new digital services could become for them over time (in revenue terms) and how much they should be investing (as a proportion of their opex and capex budgets).

The survey itself is available here and will take 10 minutes to complete | 30-Oct-2014 20:02

CSPs/Telcos: How big is digital going to be?

If you work on behalf of a Communications Service Provider (CSP), we would like to ask you to participate in a research programme we are undertaking on transformation. We have already collected some fascinating results and, through your participation, you can have access to these too.

Most Communications Services Providers (CSPs) around the world have embarked on the journey to new (Telco 2.0) business models via the development of 'digital services'.

As part of STL's support to CSPs on this journey, we would like to ask you to contribute to a questionnaire on transformation. It will take only 10 minutes and focuses on 3 big issues:

  • How important should digital services be for CSPs?
  • What is the optimal level of investment in digital services and how close are CSPs to this at present?
  • What are the biggest barriers to successful implementation of digital services and how effective are CSPs at overcoming these barriers?

- Access the survey here -

Please note:

  1. The survey will take only 10 minutes to complete.
  2. Your individual answers will not be revealed to anyone, ever.
  3. A summary of the valuable results will be shared with you.

You can contact us here if you have any questions about the survey. We will also be covering CSPs' digital transformation at Digital Asia 2014, 2-4 December, Bali, and at OnFuture brainstorms in Arabia, Europe and the Americas. | 23-Oct-2014 16:22

Enterprise Mobility: Digital Asia 2014

In the age of the smart device, organisations are adopting Enterprise Mobility to transform how they support and engage employees, customers and business partners.

STL Partners' recent research, has revealed that MNOs are well placed to support their business customers' Enterprise Mobility ambitions. MNOs have a "credibility advantage": enterprises expect Telco's to be able to support them. However, most operators are a long way from seizing this opportunity.

We'll be exploring this topic further as a focused session at Digital Asia 2014 (2-4 December, Bali), the session aims to enable Enterprise Mobility strategists, planners and practitioners to brainstorm and share best practice. The session will include presentations and break-out groups focusing on:

  • What strategy and roadmap should MNOs be putting in place?
  • Which resources and organisational changes will be required?
  • What should the product portfolio look like?
  • When and how should an operator build / Buy / Partner?
  • This focused Enterprise Mobility session includes Monty Hamilton (Director Digital Innovations, Telstra), presenting on how Telstra have adopted enterprise mobility solutions within Telstra to turn their operations into a more efficient organisation, leveraging digital channels and touch-points with customers.

    To register your interest for the focused session 'Enterprise Mobility' at Digital Asia 2014 (2-4 December, Bali) please click here. To find out more on the event please visit | 15-Oct-2014 10:46

    CSPs/Telcos: Is your organisation transforming quickly enough?

    If you work on behalf of a Communications Service Provider (CSP), we would like to ask you to participate in a research programme we are undertaking on transformation.

    Most Communications Services Providers (CSPs) around the world have embarked on the journey to new (Telco 2.0) business models via the development of 'digital services'.

    As part of STL's support to CSPs on this journey, we would like to ask you to contribute to a questionnaire on transformation. It will take only 10 minutes and focuses on 3 big issues:

    • How important should digital services be for CSPs?
    • What is the optimal level of investment in digital services and how close are CSPs to this at present?
    • What are the biggest barriers to successful implementation of digital services and how effective are CSPs at overcoming these barriers?

    - Access the survey here -

    Please note:

    1. The survey will take only 10 minutes to complete.
    2. Your individual answers will not be revealed to anyone, ever.
    3. A summary of the valuable results will be shared with you.

    You can contact us here if you have any questions about the survey. We will also be covering CSPs' digital transformation at Digital Asia 2014, 2-4 December, Bali, and at OnFuture brainstorms in Arabia, Europe and the Americas. | 15-Oct-2014 08:28

    Cloud Services: New Telco 2.0 Research stream iniatated; plus Cloud Services at Digital Asia 2014 speakers include; CEO Telkom Sigma, COO Telstra & Head of Cloud APAC Google

    Cloud is both disrupting and generating opportunities for Enterprise and Telco businesses. With the goal of accelerating the adoption of cloud services by telecoms operators whilst building on several years of ground-breaking Telco 2.0 research, we are initiating the Cloud 2.0 Programme, a set of activities that bring together leading thinking, practice and senior practitioners from telecoms operators, technology companies, and other industry facilitators.

    The programme acts as means to transform and develop operational agility and to provide external enterprise cloud propositions. Led by Bob Brace, Senior Analyst, STL Partners/Telco 2.0 (formerly Head of Cloud at Vodafone), the programme will comprise a stream of dedicated research reports, sessions at our executive brainstorms, and other networking and information sharing activities.

    Future reports in this stream include

  • The role of telcos in the cloud in 2015
  • NFV: Will it live up to the hype?
  • Telstra: a telco cloud case study
  • The first session at our executive brainstorm (with networking opportunities) will be held at Digital Asia 2014 (2-4 December, Bali) covering how Cloud is shifting IT from playing a supporting role to being a core driver of business success. Senior Telco and industry Cloud specialists will explain how they are using cloud to differentiate in their markets, drive operational success and agility, and how cloud computing is now disrupting the networking and security markets.

    Key themes covered in the session include:

  • How Cloud has disrupted the Enterprise
  • Virtualisation affected computing first and now the network - what this means for Enterprises and Telco's
  • How can Telco's differentiate with cloud?
  • Stimulus speakers and panellists include:

  • Bob Brace, Senior Analyst, STL Partners
  • Judi Achmadi, CEO, Telkom Sigma
  • Nathan Bell, COO, Telstra/Telkom JV
  • Cory Franzmeier, Head of Cloud APAC, Google
  • To register your interest for the focused session 'Cloud Services' at Digital Asia 2014 (2-4 December, Bali) please click here.

    We are also initiating coverage of a new research programme on Cloud, and we'd really appreciate your input here. here | 14-Oct-2014 15:19

    Digital Disruption, Innovation and Transformation: Digital Asia 2014

    For several years the telecoms industry has enjoyed the benefits of broadband growth. Now, just as this is slowing, alternate communications solutions threaten to disrupt the industry's core voice and messaging services.

    However, it is not all bad news: there are opportunities for operators to develop new sources of value and many are embarking on this route. We'll be exploring this topic further at Digital Asia 2014, (2-4 December, Bali) and are initiating coverage of a new research programme on Internet-Driven Disruption, focusing on what changes need to be made by the industry to deliver a new business model including:

  • New strategies for creating and dealing with 'digital disruption'
  • Key digital innovations and trends
  • New operational models and metrics - learning from the internet disruptors
  • Stimulus speakers and panellists at the focused Digital Asia 2014 session include:

  • Chris Barraclough, MD & Chief Strategist, STL Partners/Telco 2.0 Initiative
  • Indra Utoyo, Director of Innovation & Strategic Portfolio, Telkom Indonesia
  • Gil Genio, COO Business & International Markets & CSO, Globe Telecom
  • Giles Corbett, Head of Libon, Orange
  • To register your interest for the focused session 'Digital Disruption, Innovation and Transformation' at Digital Asia 2014 (2-4 December, Bali) please click here.

    We are also initiating coverage of a new research programme on Internet-Driven Disruption, and we'd really appreciate your input here. here | 08-Oct-2014 17:55

    Dealing with Disruption: Effective Strategies

    Disruption is now widely spread and relatively well recognised throughout the global economy, but dealing with it is another matter. This challenge is central to the agenda of strategists and decision makers in every industry, particularly among Telecoms, Media, Technology, Retail, Finance, and Consumer Brands. What are the key factors, lessons and strategies for success in the increasingly dynamic and complex digital ecosystem?

    We're developing a major new research stream on 'Dealing with Disruption' to help strategists and decision-makers develop successful new approaches to defending, evolving and growing their businesses, and would very much like your input via the short online survey here to help us shape the agenda. We're also exploring disruption in Telecoms, Cloud, Big Data, Commerce, Content and Enterprise Mobility at Digital Asia 2014, Bali, 2-4 December. To find out more, or if you'd like to join us, please email

    Playing 'The Great Game'

    Back in 2011, when we published Dealing with the 'Disruptors': Google, Apple, Facebook, Microsoft/Skype and Amazon, the key driver was the desire for telcos to a) recognise the threat from, b) understand the drivers of, and ultimately c) develop strategies to deal with the wave of impending disruption from so-called 'Over The Top' (OTT) and Internet-based services. One output of the report was the outline of 'The Great Game' - the battle for key areas of the digital economy, and how the players were using disruptive strategies to build defensible platforms of their own.

    Source: Dealing with the 'Disruptors': Google, Apple, Facebook, Microsoft/Skype and Amazon, STL Partners

    To some extent, the industry has started to get to grips with this emerging landscape. For example, we found major differences in the effectiveness of different telco strategies to pricing threatened services, as illustrated in the following chart from The Future Value of Voice and Messaging (November 2013).

    Source: The Future Value of Voice and Messaging, STL Partners

    The chart shows a vastly higher penetration of OTT apps in Spain, a weakened European economy where each text cost an appreciable amount (c.$0.15) and many times what it would cost in the much stronger US economy, where the effective price was at that time already less than one Cent ($0.01). [NB Text usage and spending is also much higher in the US and much lower in Spain]. We think the lesson from this is that 'free' is not necessarily the issue in all cases of disruption - it is the perception of an inconsequential cost of usage that is key to consumer behaviour in this respect.

    Also, the then-disruptors now face disruption themselves. For example, in Google's Big, Big Data Battle we recently highlighted how Google's core business is under increasing pressure, and we will soon publish further analysis of the struggle between Apple and Samsung. Facebook is continually under scrutiny for signs of the impact of the 'next big thing in social networking', the latest of which being Ello, which bases its disruptive strength on attacking Facebook's advertising revenue stream by promising a private and ad-free service.

    So while the market has developed, it is constantly changing and fast moving. It can be a challenge to stay abreast of it, yet alone develop effective strategies to succeed in it.

    How to play better?

    The general factors that we believe are necessary to develop effective disruptive strategies and responses are:

    • The development of individual and corporate 'digital mind sets' that enable efficient decision making and aligned actions;
    • Increased awareness of and alertness to the possibilities and the speed of change;
    • Better understanding of cross-industry perspectives on lessons, issues, threats and opportunities;
    • The development and adoption of approaches, capabilities and technologies that enable sufficient speed and effectiveness in action.
    To this end we intend to bring the best of our knowledge and experience to bear together with some of the best practitioners in the field through our research and events in the coming year.

    As part of this, our next public event will bring together c.250 senior execs at our Digital Asia 2014 event in Bali to brainstorm:

    • Findings from the Telco 2.0 Transformation Index and how to transform the telecoms technology stack (detailed agenda and speakers here);
    • The latest disruptive developments and strategies that telcos can bring to Cloud and Enterprise Mobility, and how these technologies can themselves transform businesses (detailed agenda and speakers here);
    • The role of Big Data for both commercial ends in telcos and other industries, and for governments and not-for-profit organisations aiming to solve major challenges relating to poverty and the spread of disease (detailed agenda and speakers here);
    • How the Digital Entertainment market is being reshaped by content providers, brands, and other players looking to create new service and distribution models (detailed agenda and speakers here);
    • How Digital Commerce is going mobile, and how players in different sectors can profit in this major disruption (detailed agenda and speakers here).
    To join us, please email . And don't forget: we'd very much like your input to our research programme here . | 01-Oct-2014 17:13

    Apple Pay & Weve Fail: A Wake Up Call

    We've just published a new research paper 'Apple Pay & Weve Fail' The unveiling of Apple Pay and unravelling of Weve (the UK operators' payments venture) looked like bad news for telcos' ambitions in mobile payments in some markets, and highlighted challenges to Google and others' models. Yet there are already successful telco models and favourable market trends that telcos should exploit. So what are the opportunities now?

    You can read an excerpt of the report here. We'll also be exploring the implications at Digital Asia (2-4 December, Bali), and are initiating coverage of a new research programme on Internet-Driven Disruption, and we'd really appreciate your input here. For more on any of these services, please email or call +44 207 247 5003.


    Connected Car: Key Trends, Players and Battlegrounds

    We've just published a new research paper 'Connected Car: Key Trends, Players and Battlegrounds'. Connected cars are set to revolutionise the automotive industry as we know it, turning the car into the 'ultimate mobile device' and driving the growth of M2M in a big way. With Apple, Google, telcos and many others in the chase, we analyse the growth drivers, value chain, and key battles for control of this increasingly complex ecosystem, and outline a new connected car services framework.

    You can read an excerpt of the report here. We'll also be exploring the implications at Digital Asia (2-4 December, Bali), and are initiating coverage of a new research programme on Internet-Driven Disruption, and we'd really appreciate your input here. For more on any of these services, please email or call +44 207 247 5003.


    Extract chart from report: | 17-Sep-2014 16:28

    Digital Asia 2014: Join Telkom Indonesia, Facebook, Globe, WEF, CitiBank, KT Media and many more for New Ways to Innovate & Grow in the Digital World

    The region's leading TMT players will be converging on Bali at the beginning of December for this year's ground breaking Digital Asia 2014 event. Representatives from the world of telecoms, technology, the internet, advertising, financial services, content and entertainment will gather to exchange breakthrough ideas, case studies, methodologies and tools to grow significant new revenues for all parties in the next 12-18 months.

    Taking place at the outstanding Ayana Resort and Spa on the 2-4 December, Digital Asia, run by STL Partners in collaboration with Telkom Indonesia, is focused on catalysing exciting innovations in communications, enterprise services, entertainment and digital commerce that leverage mobile, cloud and big data technologies.

    Confirmed participants (at August 27th) from ABS-CBN, Carlsberg, CitiBank, Deutsche Telekom, Etisalat, Facebook, Globe Telecom, Google, Indosat, KT Media Hub, MapR, Orange, PCCW Global, Shinetown, SingTel, Telekom Malaysia, Telkom Indonesia, and World Economic Forum.
    Register Now to Secure Your Place.

    With a captivating line up of topics to explore across the digital ecosystem, we're excited to announce our detailed agendas are now live.

    Some Agenda Highlights from the 3-day event:

    Register Now to Secure Your Place.

    Key speakers include:

    Key Sponsors include:

    We have a limited number of Sponsor and Speaker opportunities left for Digital Asia. If you would like to get involved, email or call +44 (0) 207 2475003. | 27-Aug-2014 11:55

    Cable Operators are Broadband Operators. And they're better at it than you are

    Leichtman Research recently announced that the US cable operators now have more broadband subscribers than they have TV subscribers. The difference is not much - 49,915,000 broadband subscribers on cable in Q2 versus 49,910,000 TV. A gap of 5,000 subscribers in a 100 million-strong market might seem like a quirk that might well be put down to statistical noise, but this has been coming for some time. The following chart shows customers by product at Comcast since Q1 2011.

    And the real news is in the net-adds numbers.

    In Q2 2014, the cable industry net-added 385,000 broadband subscribers, while the telcos managed 2,000. It might be more accurate to say that the telcos' net-adds were statistically indistinguishable from zero. Although AT&T and Verizon between them signed up 627,000 net adds for either U-Verse or FiOS service, this wasn't enough to soak up the 636,000 net subscribers who churned away from their DSL products. And the shift is accelerating; the Q2 2014 net gain was higher by one-third than that recorded in Q2 2013.

    This shouldn't be news to anyone, though. The years when cable operators were TV-centric businesses that could be considered separately from telcos are long in the past. Thinking of cable operators as TV networks makes as much sense as thinking of Verizon or AT&T as companies whose core business is telephony. These days, they share a common product: broadband. And they've been heading that way for years. This chart, taken from our Triple Play in the USA executive briefing, makes the point. Non-video revenue - i.e. broadband and VoIP - has grown much faster than video for years.

    Broadband is especially important because it is becoming the foundation product in the triple- or quad-play bundle. It is unlikely that anyone will churn their total communications spending in order to get more content. This is especially true in the United States, as the content rightsholders tend to either go for a "distribution first" strategy, breaking the new movie on as many screens as possible, or else to develop a direct-to-consumer relationship. If, however, a customer changes broadband provider, they are much more likely to change phone, mobile, or TV provider. The following chart shows broadband and triple-play customers at Comcast over the past six quarters - the correlation is very close indeed.

    Broadband is also important because it's a product that an ISP produces in-house, without paying tribute to rightsholders. AT&T says it pays as much as 60% of its TV sales right back to content owners.

    We expect broadband net-adds to gravitate to whoever provides the most speed and capacity at typical price points, and this is precisely what is happening in the US market. The following chart, using data from the FCC's Measuring Broadband America, shows that the cable MSOs and Verizon FiOS tend to under-promise and over-deliver on both uplink and downlink speed, while the DSL operators (including AT&T's VDSL-based U-Verse) are doing the precise opposite.

    Better performance in the access network also translates into better prices on a per-megabit basis. The following chart illustrates pricing per advertised, downlink megabit, based on AT&T, Verizon, and Comcast's published offers. Although Verizon's ultra-fast FiOS plans are better at the very top of the market, the cableco wins on price between 25 and 125Mbps, where most of the customers are.

    The cable triumph is reflected in AT&T's official filings justifying the bid for DirecTV. Their arguments shed much light on the interdependence between video and broadband. For example, AT&T CSO John Stankey and SVP of Home Solutions Lori Lee admit that nobody takes the video service on its own merits, but only as an upsell if they've already taken broadband.

    Because the video service lacks scale, its margins suffer due to its poor negotiating position with Hollywood rightsholders.

    And why does the service lack scale? AT&T argues that it can't roll out more broadband because it can't sell enough TV on top to make it worthwhile:

    But they also argue that they can't roll out more TV because they don't have the broadband infrastructure to deliver it:

    And despite that, they've cancelled further U-verse buildout. This may mean they've reconsidered the TV-via-VDSL strategy and they are dropping it in favour of more GigaPower broadband, or it may mean they're doubling down on TV via the DirecTV deal.

    Content is an important part of the bundle. Nobody disagrees with that. But it relies on the broadband infrastructure as much as it finances it, probably even more so. The cable operators seem to have realised that they are in a single ISP market, no matter what the access technology, and that content is an upsell to the core product, broadband. Cable operators have more of it.

    In the UK, for example, Virgin Media recently reported that 40% of its net-adds are taking speeds of 100Mbps or higher, and 15% are taking the 152Mbps top whack.

    The upshot is that despite all the "superfast broadband" hype and the BDUK funding, OFCOM's Communications Market Report shows that Virgin Media accounted for 17% of the total growth in "superfast" connections in 2012-2013 just because it doubled the download speeds for existing customers as a customer-retention giveaway. Is that the inflection point in this curve?

    Also, BT may have received all the BDUK money, but that doesn't mean BT Retail has benefited from it with its content-heavy, football-driven strategy. The following chart, also from the CMR, shows that the indie ISPs, more broadband-focused, have increased their market share at BT's expense while the upgrade money has been flowing and FTTC rolling out. Virgin Media has naturally lost share in "superfast" because it didn't get any. That said, its success in selling 150Mbps plans will no doubt make it feel better.

    So, our conclusions. Cable operators are benefiting from the recognition that broadband, not TV, is the core product in the triple play, and their commitment to continuous improvement in the technology. Content is a great add-on to the bundle, but it cannot substitute for broadband, not least because both your own content and OTT content is dependent on broadband for delivery. And having pushed the limits of the DOCSIS 3 technology again and again, the cable operators still have a strong roadmap ahead from 150Mbps through 300 and 600 to gigabit speeds with manageable amounts of incremental investment. Watch out. | 19-Aug-2014 17:16

    Free-T-Mobile: Disruptive Revolution or a Bridge Too Far?

    We've just published a new research paper 'Free-T-Mobile: Disruptive Revolution or a Bridge Too Far?'. Free's shock bid for T-Mobile USA will stretch its finances and management capacity to the limit. Can Free's package of tactics, technology, and procedures work in the US context?

    You can read an excerpt of the report here. We'll also be exploring the implications at Digital Asia (2-4 December, Bali), and are initiating coverage of a new research programme on Internet-Driven Disruption, and we'd really appreciate your input here. For more on any of these services, please email or call +44 207 247 5003


    Extract chart from report: | 19-Aug-2014 11:22

    Connected Home: Telcos vs Google (Nest, Apple, Samsung, +...)

    We've just published a new research paper 'Connected Home: Telcos vs Google (Nest, Apple, Samsung, +...)'. Since Google acquired Nest for $3.2bn, Apple and Samsung have also entered the complex battle for the connected home. We analyse in-depth why Google wanted Nest, the players' goals and strategies, and what should telcos and others do to stay in the game?

    You can read an excerpt of the report here. We'll also be exploring the implications at Digital Asia (2-4 December, Bali), and are initiating coverage of a new research programme on Internet-Driven Disruption, and we'd really appreciate your input here. For more on any of these services, please email or call +44 207 247 5003


    Extract chart from report: | 06-Aug-2014 13:40

    Google's Big, Big Data Battle

    We've just published a new research paper 'Googles Big, Big Data Battle ' Facing lockout from a growing chunk of the Internet and mounting competition from the Facebook-Microsoft alliance and Amazon, Google's core business is under intense pressure. The search giant's response is to innovate, offering consumers proactive recommendations, as well as reactive search results. Once an interesting sideline, Google Now has become fundamental to the Mountain View company's future. Is the suggestion service good enough to maintain Google's position as the world's leading big data company?

    You can read an excerpt of the report report here We'll also be exploring the implications at Digital Asia (2-4 December, Bali), and are initiating coverage of a new research programme on Internet-Driven Disruption, and we'd really appreciate your input here. For more on any of these services, please email or call +44 207 247 5003


    Extract chart from report: | 31-Jul-2014 12:15

    Cloud 2.0: Your Input Requested Please

    If you are a strategist or decision maker engaged in implementing or evaluating Cloud services, we'd very much value your input to our new Cloud 2.0 Programme here.

    Building on several years of ground-breaking Telco 2.0 research into cloud services, we are initiating a set of activities that bring together leading thinking, practice and senior practitioners from telecoms operators, technology companies, and other industry facilitators.

    Its goal is to accelerate the adoption of cloud services by telecoms operators both as a means to transform and develop operational agility and to provide external enterprise cloud propositions. The programme will be lead by Bob Brace, Senior Analyst, STL Partners/Telco 2.0 (formerly Head of Cloud at Vodafone), and will comprise a stream of dedicated research reports, sessions at our executive brainstorms, and other networking and information sharing activities.

    If you'd like to input to the agenda and design of the programme overall, please take 5 minutes to input to our online research here, as we are collecting feedback on our plans, or contact us directly at We will also be covering cloud at Digital Asia 2014, 2-4 December, Bali, and at OnFuture brainstorms in Arabia, Europe and the Americas.


    Keep Smiling: a Telco 2.0 tribute to Keith McMahon

    We were shocked and saddened to learn this week of the early death of our colleague and friend Keith McMahon. It is a devastating blow for his family and friends, and a huge loss to us all. We understand from his family that he was diagnosed with a brain tumour last Friday 27th June, and died on Monday 30th June. He leaves a wife and two children of whom he was immensely proud, and to whom we offer our deepest condolences.

    Keith started working with us in 2006, eventually closing down his Telebusillis blog to concentrate on his contribution to Telco 2.0. He had a fantastic grasp of the reality behind the numbers in almost every industry but particularly in telecoms, and a real talent for insight - the ability to find, understand, and express important issues well beyond the obvious. His analytical skills were backed by a wealth of practical experience gained in UK altnets and ISPs, in long-haul fibre builds throughout Latin America, and with Brazil's biggest mobile operator.

    He was a great and engaging presenter too - always colourful and often challenging, and a hugely enjoyable person to be with. He will be greatly missed by us all and the many clients, colleagues and friends he amassed throughout his busy and varied life.

    Keith worked across our research and consulting business on many different projects, research reports and other publications. Among the many pieces that Keith either lead or contributed significantly to, in 'BBC's iPlayer nukes "all you can eat" ISP business model' (2008), Keith was characteristically ahead of the curve in understanding the impact of video on broadband business models, and also showed his penchant for brutal attention-grabbing headlines, which he showed again in 'Public Wifi: Destroying LTE/Mobile Value?' (2011).

    As well as contributing significantly to 'Dealing with the 'Disruptors': Google, Apple, Facebook, Microsoft/Skype and Amazon' (2012), he produced this gem on Amazon's business model transformation. More recently, he was part of the team that delivered the Telco 2.0 Transformation Index.

    As a person, Keith was warm, entertaining and fun to be with. He was highly intelligent, creative, and occasionally eccentric. He gave great value to clients and was a treasured colleague, even if his approach to deadlines evoked memories of the nickname he earned building telecoms networks in Latin America - 'Il Pirata'.

    Keith always signed his emails 'Keep Smiling'. As hard as it is in the tragic circumstances of his early death, we would like to remember him with a smile, and hope this short video of Keith reflects a little of the qualities and the joy that we will remember him for.

    (With thanks to Tom Davies at for putting this video together.) | 04-Jul-2014 09:56

    Transformation: Vodafone needs a Telco 2.0 revolution
    Our latest analysis shows that Vodafone, like AT&T and Verizon, needs a revolution in certain areas of its approach to transformation.

    STL Partners has today launched the most recent update to the Telco 2.0 Transformation Index, which features the addition of Vodafone to the 250+ page overall benchmarking report.

    • For a full description of the inputs and methodology behind the Transformation Index, see here
    • For the headline transformation scores broken down by domain, followed by an analysis of Vodafone's current growth story, see here. We'll also be discussing transformation at Digital Asia 2014 (2-4 November) 2014.

    Figure 1 below, taken from the updated benchmarking report, categorises the CSPs surveyed along two dimensions: what they can't control (external market attractiveness, e.g. market maturity, regulation) and what they can control (execution within this context e.g. quality of service offerings, internal organisation and external partnerships).

    Figure 1: Telco 2.0 Execution vs. Marketplace Attractiveness

    One of the key findings from this chart is that Vodafone, AT&T and Verizon are operating in less attractive markets than their peers and, with the exception of Ooredoo, are executing on transformation less well also.

    Focusing on Vodafone, one of the areas of execution STL Partners believes it can improve upon are its Service Offerings: specifically, as discussed here, it falls short of all of its peers except Ooredoo in this regard. The logical question, therefore, is why?

    Vodafone can improve its transformation execution by focusing on specific areas of its Service Offerings

    Before answering this question, some terminology is needed. Figure 2 below gives STL Partners' taxonomy for analysing each CSP's Service Offerings:

    Figure 2: Telco 2.0 Service Offerings Taxonomy

    Using this framework, STL Partners has benchmarked the transformation performance of each CSP within each of the six areas, ranging from traditional 'core' services to 'near-core' areas such as infrastructure services and embedded communications and truly 'digital' own-brand OTT services.

    Figure 3 below provides the highest, lowest and average score for each domain, and positions Vodafone amongst these. (Note: Ooredoo is excluded from the average because, as indicated by its very low score, it is an outlier in terms of Service Offerings. Its less mature (but therefore more attractive markets) have prompted it to keep its focus primarily on Core services.)

    Figure 3: Service Offerings - Vodafone relative to average, highest and lowest scores

    Before looking at Vodafone specifically, three general comments can be made:

    1.  In the three opportunity areas where CSPs have been operating for some time, the average scores are quite high and some CSPs are doing very well (e.g. Verizon in Core Services thanks to its aggressive LTE roll-out and strong FiOS FTTH offering)

    2. Embedded communications, however, sees slightly lower scores (2.2 average compared with 2.4-2.5) since, despite things like M2M needing strong traditional networking skills, they also require new partnerships with enterprises and technology players

    3. In the two newest areas, Third-party business enablers and OTT services, the scores are much lower. These require a new business model encompassing new skills, processes, operational models and new relationships and so are proving challenging for all CSPs.

    Focusing now on Vodafone, it is clear that there are certain areas where Vodafone needs to improve relative to its peers (Vertical industry solutions, infrastructure services) whilst there are others where it leads the way (Embedded communications). There are four key points to be made:

    1. Vodafone performs well at Core services, slightly beating the average score, and its score here will improve over the coming 3-5 years as it uses the Verizon Wireless deal's cash consideration to increase both organic and inorganic network investment. It might have received the lowest score for Own-brand OTT services, but none of the operators surveyed are doing enough here. 

    2. For Embedded communications, Vodafone scored joint-highest. M2M is a big priority for Vodafone and recent big client wins and rapid growth point to good market traction. Interestingly, Vodafone has opted against joining one of the multi-operator alliances and has instead focused on bi-lateral agreements and its own, internally-developed service delivery platform. Vodafone has also partnered effectively to begin offering solutions beyond traditional connectivity. Its broader activities in Vertical industry solutions score less well, however, since these remain M2M-centric and despite good efforts here connectivity remains king. One factor is that Vodafone lacks the SI capabilities of some of its peers.  

    3. In Infrastructure services, Vodafone also scores below average. Looking at IaaS Cloud, for example, Vodafone gained a real play here following its 2012 acquisition of Cable & Wireless Worldwide, but it remains both UK-centric and a relatively small player in an extremely competitive market. 

    4. Vodafone's most well-known activity in Third-party business enablers is M-Pesa, the mobile payments and money transfer service. M-Pesa, with over 19m active users, is widely considered to be the most successful mobile money initiative in the world. In its major markets, Kenya and Tanzania, it has also been important in reducing churn (thus driving substantial indirect revenues). However, Vodafone has faced more challenges as it moved into new markets (e.g. India) and it earns less revenue from here directly than one might expect. 

    Although each of the six CSPs surveyed have made a start in moving to a new business model, all need to accelerate the change process; NTT DoCoMo to be added next

    Despite several operators, such as Vodafone in M2M, showing strength in selective areas, it remains true that none of the CSPs surveyed are doing enough both in terms of their Service Offerings and transformation efforts in general. 

    It will therefore be interesting to see how NTT DoCoMo, often seen as the 'leading light' in terms of telco business model transformation, stacks up relative to its peers. How well is it really doing? In what areas, and where can it improve?

    To find out more about the 250+ page Benchmarking Report, the accompanying 150+ page CSP Analysis Packs, or the Telco 2.0 Transformation Index in general, click here or email | 02-Jul-2014 12:31

    Disruptive Strategy: 'Uncarrier' T-Mobile vs. AT&T, VZW, and

    We've just published a new research paper 'Disruptive Strategy: 'Uncarrier' T-Mobile vs. AT&T, VZW, and' T-Mobile USA's 'uncarrier' strategy has delivered significant net additions, but is it a good strategy - and is the disruption promised by Softbank CEO Masayoshi Son already underway? We compare it to Free Mobile's disruptive approach in France, and the results of its competitors' responses.

    You can read an excerpt of the report here We'll be looking further at telecom disruption at OnFuture Arabia (10-12 November) and Digital Asia (2-4 November) 2014. Email or call +44 207 247 5003 to find out more.

    Extract chart from report: | 26-Jun-2014 12:20

    The $50bn Enterprise Mobility Opportunity: what's stopping telcos winning 500% more business?

    We've just published a new research paper 'The $50bn Enterprise Mobility Opportunity: what's stopping telcos winning 500% more business?'.

    Our new global research among enterprises and telcos shows that many telcos are ideally positioned, but underprepared, to exploit the fast emerging and evolving $50bn Enterprise Mobility opportunity. How can telcos address this gap?

    You can download this report in full for free here. We'll also be exploring the implications at the OnFuture EMEA Brainstorm, 11-12 June in London. Email or call +44 207 247 5003 to find out more.

    Figure 1: What would enterprises consider buying from a telco?

    Source: STL Partners, On-line research, Enterprise >250 employees, Feb 2014(n=101) | 10-Jun-2014 12:21

    Combining Cloud, NFV, and SDN to create agile new services

    This is a guest post by Paulo Campoli, CTO of Cisco's EMEAR Service Provider Segment, who will be presenting at the OnFuture EMEA 2014 Brainstorm in London, June 11-12.

    The industry is going through a huge business transformation. Enterprises want to focus their resources and investments on their core business rather than investing in non-core IT operations. They are looking at consuming network and IT services from the cloud, rather than investing in in-house operations. Consumers are raising their expectations, demanding to have a consistent application experience on any device at any place and at any time. And consumers expect the same experience at work, which drives overall consumerization of IT.

    The market opportunity is huge and can be described as the 'Internet of Everything', as people, machines, and processes are communicating with each other at an exponentially increasing scale. This creates new opportunities for everyone.

    As part of this, Service Providers can apply innovative technologies, like SDN, NFV and orchestration platforms, in their networks to overcome the current rigidity and complexity of today's network infrastructure and operations. This opens new business opportunities.

    Disaster Recovery as a Service is one example of a new enterprise cloud services opportunity. The opportunity is to provide a high-availability cloud service that can be launched quickly while minimizing the operational cost. This service also provides a much higher level of automation than traditional networks would allow, as these services need to execute network configurations for hundred of customers within minutes. Manual processes cannot scale up fast enough to make this new business profitable. Provisioning a new customer must be accelerated from typically 4 weeks down to 1 week. Automation of network connections and Cloud IaaS allow the operator to reserve network resources and connections with guaranteed service levels agreements, enabling a pay-as-you-use business offer to enterprises. The service has become popular with enterprise customers that need high availability and are attracted to the economics of dynamically adjusting storage, compute, and networking resources as business requirements change, paying only for what they need.

    Location Based Analytics is another opportunity that is enabled by new programmatic interfaces that enable interactions between applications and the network. Shopping malls, hotels, and airports benefit from the efficiencies of leveraging small cells and WiFi networks for advanced interactive communications with their customers.

    At airports, passengers benefit from WiFi networks and analytics which shorten the time they spend waiting in lines, and therefore gives them more time to enjoy airport facilities. RFID tracking helps ensure better use of airport assets, such as cleaning equipment, wheelchairs, and vehicles for assisting passengers with reduced mobility. By optimizing the supply chain, 'Asset Tracking' is expected to help speed up airplane turnaround times, another key ingredient of the customer experience. Increased visibility of assets will also save money by eliminating unnecessary orders for equipment that has been misplaced.

    At shopping malls customer experience is shaped by intensifying expectations and new demands. Beyond retail, restaurant, and entertainment destinations, consumers now expect multi-channel experiences that fuse brick-and-mortar shopping with digital services, allowing consumers to buy however and whenever they want.

    After developing platforms to merge existing Telco applications with over the top applications, Cisco sees the need to drive the innovation and agility further into the network, as new technologies such as Software Defined Networking (SDN) and Network Function Virtualization (NFV) that allow programmability, automation and simplification of datacenter and networking platforms become ready for prime time.

    Paolo Campoli (CTO of the SP Segment for Cisco EMEAR) will present at the OnFuture EMEA 2014 Brainstorm in London on June 11th , showing new tools that propel service providers in this business transformation, and how enterprises will benefit from these new network services.

    Cisco believes that enabling fast mobile service creation and innovation combined with the capabilities to quickly deploy and test them in production networks is the way to develop applications and solutions rapidly - at 'web speed'. We believe that applications that interwork with the network will perform better than those applications that run over the top and have to reverse engineer the underlying network behaviour.

    For Service Providers, we see it as key to overcome network rigidity and complexity by leveraging new tools and technologies that make network service creation and deployment easy and fast. In addition it is imperative to leverage service portals like e-stores for Enterprise to easily understand, order and consume these new services in self service fashion. Our ideal is for networks to get the business flexibility and agility to present and adapt to new consumption models, new models like "pay as you go" based on actual consumption or providing hosted network services like security or web servers out of the cloud.

    We hope you will join us for our presentation at the OnFuture EMEA 2014 Brainstorm and share your ideas in our discussions on this subject in London, and look forward to seeing you there. | 30-May-2014 17:54

    Telco 2.0 Transformation Index: Vodafone needs a more convincing growth story

    Vodafone is middle-ranking on transformation, roughly at parity with Verizon, behind SingTel and Telefonica but ahead of AT&T and Ooredoo according to our latest Telco 2.0 Transformation Index research.

    STL Partners has today launched the most recent update to the Telco 2.0 Transformation Index, featuring the addition of Vodafone to existing analysis on Telefonica, Verizon, AT&T, SingTel and Ooredoo. See here for more on the Vodafone report and join us at the OnFuture EMEA 2014 Brainstorm in London, 11-12 June, to discuss telco and digital transformation strategies.

    Figure 1 below, taken from an updated benchmarking report to be launched in May, shows that Vodafone falls short of its European rival Telefonica but matches Verizon - albeit for very different reasons:

    Figure 1: Telco 2.0 Transformation Index Summary Scores

    STL Partners hypothesises that, based on both the capabilities of and challenges facing CSPs, a score of 75 (the purple dashed line in the chart) is what they should be aspiring towards. STL Partners also recognises, however, that transformation is difficult.

    It is clear, therefore, that although Vodafone (like many of its peers) has made a good start in moving to a new, sustainable business model it still has much to do. In particular, Vodafone:

    • Scores the lowest out of all CSPs in the Finance domain
    • Performs reasonably well for its Value Network but only outperforms Ooredoo in its Service Offerings
    • Scores well in Technology but comes out middle-of-the-road for its Marketplace
    For a full description of the inputs and methodology behind the Transformation Index, see here.

    In order to give some insight into the analysis included in the 148-page CSP Analysis Pack on Vodafone, the following extracts provide a snapshot of the story behind Vodafone's results.

    Vodafone's Achilles' heel: struggling headline financials

    Vodafone has endured a challenging run of financial results over the last few years. Headline financials, such as revenue, EBITDA and free cash flow, have all shown worrying downward trends. Figure 2 below shows the case for its last three financial years:

    Figure 2: Vodafone's recent headline financial results

    In recognition of this, Vodafone has been working hard to define exactly what it wants to look like, and is aware that it needs a compelling and consistent growth story for investors if its share price is not to suffer. Its latest vision is called 'Vodafone 2015'.

    Vodafone 2015: is its current growth strategy enough?

    Vodafone 2015 is the vision that senior management has been pitching to investors since 2012. It is, at its core, an articulation of a Happy Piper strategy (a 'scale Data company', a 'strong player in enterprise' and a 'cost efficient organisation') with some 'selective' interest in digital services.

    Figure 3: Vodafone 2015's five key pillars (Source: Vodafone)

    The following analysis looks at the first three pillars:

    • 'A scale data company'
    • By this Vodafone means a "company that brings data at a cost-efficient level through a variety of screens and pipes" (December 2013 Investor Presentation). This has been reflected in both:

      1. Increased organic network investment:
      2. Vodafone plans to use sizable portion of the Verizon Wireless deal's cash consideration to increase its mobile network investment levels. This, combined with investment in spectrum and the launch of its 'Red' post-play plans suggests that Vodafone has learned from Verizon's successful LTE deployment in the USA: aggressive spectrum investment and network roll-outs to achieve greater coverage than competitors and, subsequently, tying customers to long-term post-pay plans.
      3. Efforts to grow in fixed:
      4. Vodafone has been pursuing wholesale (e.g. Netherlands), self-build (e.g. Portugal) and acquisitions (Cable & Wireless Worldwide, Kabel Deutschland and ONO) in an effort to grow its presence in fixed. This is part of a broader quad-play strategy which it sees as key to reversing its fortunes in Europe.

        Although sensible, it is not clear whether these activities alone will prove enough to reverse its fortunes. A key question here, for example, is whether Vodafone's investments in fixed will generate the return on investment it expects - pay-TV, for example, is also open to OTT disintermediation (e.g. by Netflix). 

    • 'A strong player in enterprise'
      Vodafone has stepped up its game in enterprise following the acquisition of Cable & Wireless Worldwide. Among others, it has given Vodafone a real IaaS cloud play in the UK and a large carrier business (it is now the second largest carrier of international voice worldwide). Vodafone has also worked hard to establish a leading position in the European M2M marketplace in terms of both market share (c. 25%) and big client wins (e.g. Volkswagen/Audi).

      With enterprise only representing 25% of its revenues, however, it is not clear whether its enterprise activities are capable of offsetting its struggles in consumer markets.

      To help answer this question, the following chart uses data provided in Vodafone's September 2013 investor presentation and makes the following assumptions:

    Figure 4: Forecast Vodafone enterprise revenues
    • The model predicts a 3.1% annual growth rate for the next 4-5 years. Of particular note is that the product areas forecast to grow the fastest - Hosting & Cloud (12% YoY) and M2M (20% YoY) - are still only small lines of business and, without a step-change in investment, will remain this way in the near future.

      Furthermore, despite growing by 2.2% during its March 2011-12 financial year, Group enterprise revenues stumbled during the next financial year and shrank by 2.8%. This suggests that Vodafone still has work to do here and, ultimately, that its current enterprise activities will not be enough to compensate for continued struggles in European consumer.

    • 'A leader in emerging markets'
    • As detailed in our recently published executive briefing comparing Vodafone and Telefonica's market positioning, Vodafone's activities in emerging markets have three key elements:

      1. 70% of its subscribers are from emerging markets...
      2. ...but only 30% of its revenues...
        This is driven by lower disposable incomes in its emerging markets, reflected in both a considerably higher pre-pay subscriber base and lower ARPUs

      3. ... and with the majority of both of these coming from its extremely competitive Indian market. 
        Taken together, these help explain Vodafone struggling headline financials: despite a concerted effort to grow its presence in its rapidly-growing emerging markets, Vodafone remains heavily exposed to the struggling European marketplace.

    Vodafone: well positioned to turn its fortunes around and reach the Telco 2.0 'pot of gold'

    The results from the Telco 2.0 Transformation Index show that Vodafone, as well as its peers, still has much work to do. Despite its recent struggles, however, Vodafone is well positioned to turn its fortunes around. It has received a substantial injection of capital following the Verizon Wireless deal, enjoys one of the strongest brands of any CSP and has made sensible steps into new opportunity areas (e.g. pay-TV, M2M, cloud) in recent years.

    With a more convincing growth story and a rebalancing of its portfolio towards high-growth opportunity areas it has the potential to not only maintain its share price but also increase it by up to 50% - but only if it successfully executes the appropriate strategies.

    To find out more about Vodafone's efforts in transformation, the Telco 2.0 Transformation Index in general, or to make an enquiry, click here or email | 30-Apr-2014 20:25

    Telefonica leads Vodafone in more attractive markets

    As part of the recently launched Telco 2.0 Transformation Index, STL Partners has been analysing the transformation efforts of major telecoms operators. We are close to completing a major analysis report on Vodafone which will complement those already completed for Telefonica, SingTel, Verizon, AT&T and Ooredoo. Vodafone's scores will also be added to an update of the Benchmarking Report which will be released in May.

    Ahead of the full analysis in May, we've just published a new research paper 'Telefonica leads Vodafone in more attractive markets', in this new report, based on Telco 2.0 Transformation Index analysis, we compare Vodafone's competitive positioning with another European-centric multi-national, Telefonica. The results are surprising and instructive, showing that Vodafone faces substantial challenges if it is to grow in the foreseeable future.

    You can read an excerpt of the report here We'll also be exploring the telecoms strategy at the OnFuture EMEA Brainstorm, 11-12 June in London. Email or call +44 207 247 5003 to find out more.

    Figure 1: Telefonica and Vodafone Market Attractiveness and Competitive Positioning - The Tale of the Tape | 24-Apr-2014 11:41

    Software Defined People: How it Shapes Strategy (and us)

    We've just published a new research paper 'Software Defined People: How it Shapes Strategy (and us)' Much of what we need to know, do or get, can now be delivered through software, pretty much at any place at any time via mobile. It is a key tool, and how we use it increasingly shapes our lives, businesses, work and identities. Why are telcos missing out, and what do businesses of all types need to do about it?

    You can read an excerpt of the report here We'll also be exploring the implications at the OnFuture EMEA Brainstorm, 11-12 June in London. Email or call +44 207 247 5003 to find out more.

    Click the image for more details: | 02-Apr-2014 12:00

    Facing Up to the Software-Defined Operator

    We've just published a new research paper 'Facing Up to the Software-Defined Operator' In this report we see five major trends leading towards the overall picture of the 'software defined operator' - an operator whose boundaries and structure can be set and controlled through software. This presents threats as well as opportunities for industry players selling and wanting to sell to telcos.

    You can read an excerpt of the report here We'll also be exploring the implications at the OnFuture EMEA Brainstorm, 11-12 June in London. Email or call +44 207 247 5003 to find out more.

    Extract Chart from Report | 28-Mar-2014 12:18

    Telefonica's digital re-structure - summary and review of analyst webinar held 12th March 2014

    Eduardo Navarro, until recently Group Chief Strategy & Alliances Officer at Telefonica and since March this year its new 'Chief Commercial Digital Officer', held a webinar for analysts yesterday (12th March) to describe the reasons for the re-structure of Telefonica's digital activities and the closing of Telefonica Digital (TEF Digital) as a separate Business Unit. Eduardo led the establishment of TEF Digital two and half years ago. Below is a summary of what he said and our initial analysis.

    The "light bulb" at TEF Digital; have the lights gone out?

    He said that "nothing had changed in terms of the vision and strategy". The reason for the change was to "remove the barriers to moving fast".

    In particular he said that a year ago he decided that the company needed to bring 'digital' activities much closer to the Operating Businesses (Europe, LATAM, Spain) and now they have implemented that plan.

    He said that TEF Digital had been a success in terms of growing revenues, increasing value to the company and helping to create a 'digital DNA' across the company. However, now is the time to embed this more deeply in the main organisation.

    In practice it means the following:

    • There is a re-structure of the whole Telefonica organisation. Eduardo will be in charge of revenue growth. A new Chief Global Resources Officer will be in charge of cost efficiencies, global platforms and procurement (with an objective to create 1.5 bn Euros of savings).
    • The previous activities of Telefónica Digital, Telefónica Europe and Telefónica Latam will move into the Global Corporate Centre with global leaders for Consumer, Enterprise and New Digital business.
    • Video will move into the Consumer group led by Michael Duncan, M2M/Cloud/Security will move into Enterprise (to give them more powerful go-to-market support), and all other digital activities (advertising, health, home, financial service etc) will stay in a New Digital group run by Stephen Shurrock.
    • A bigger focus on:
      • 'Big Data' and business intelligence/customer data, TEF acting as a custodian of personal data for its consumers and applying the principles [espoused by the World Economic Forum] in terms of enabling trust, transparency, value and control for the consumer.
      • IP Communications: a 'key battleground for telcos', important to 'protect the core'. TEF will leverage the skills and experience developed by TuGo, Topbox, Jajah etc.
    • No offices will be closed - the digital activity will 'align close to where the customers are and where the talent is'. Product 'Centres of Excellence' will be based around the world.

    Measurement will change: since many digital products will be bundled with the core products, 'digital' will be measured against its impact to the overall company's revenues rather than always on an individual product basis.

    The operating model will change: TEF will try to execute on the model of 'Discover, Disrupt, Deliver' - applying a different operating model to projects and products that fit into different categories (eg. M2M in the 'deliver' category, since it is s closer to core telco; Big data in the 'discover' category; IP Comms in the 'disrupt' bucket).

    Eduardo started the analyst webinar by saying that there was a huge opportunity for telcos to win in the next phase of the 'digital revolution', especially as it moves beyond apps, games social media and search to more 'vital' services related to security and trust (healthcare, financial services, etc).

    Our Initial Analysis of this announcement
    • It is a clear attempt to bring the 'Digital' activities closer to the Spanish power base and, implicitly, an indication that that the Telefonica Digital business unit was not performing as well as management would have liked.
    • It is also an indication that Telefonica Digital's 'smorgasbord' approach to service development and delivery was not working. The business unit covered everything from core Telco services such as hosting, cloud and enterprise communications to non-Telco digital activities such as OTT communications, financial services, health, advertising, OTT content etc. Everything in the middle - security, IPTV, customer data etc. was also part of Telefonica Digital's remit. The result, STL believes, was:
      • A lack of focus. Too much going on, too many priorities.
      • A culture clash. The core telco services require traditional infrastructure skills, partnerships, metrics whereas the digital services require new software and marketing skills, new partners and opex- rather than capex-based metrics. Putting the two areas together in Telefonica Digital meant that the business unit was not, quite frankly, digital enough.

    By spinning off more traditional telco services into the operating businesses (both consumer and enterprise), Telefonica has reduced the Digital unit's scope and, despite management's protestations that this is about integrating digital into the rest of Telefonica, it is clear that the true digital services are being ring-fenced within Eduardo Navarro's organisation under Stephen Shurrock. This will give them what they need and what they lacked before: protection from the Telco 1.0 culture.

    NOTE: A full report, How SingTel and Telefonica are making their 'Digital Business Units' more digital (and innovative) will be published next week on the Telco 2.0 Research site. This will cover the shortcomings of existing 'Digital Business Units' together with an appraisal of how SingTel, and now, Telefonica are addressing these issues with recent moves. Contact us for more information. | 13-Mar-2014 17:28

    Self-Disruption: How Sprint Blew It

    Our latest research 'Self-Disruption: How Sprint Blew It' shows how Sprint's necessary shutdown of Nextel turned into a commercial disaster, losing valuable customers, reputation, and market share. Our analysis shows that amidst the drama of the Softbank deal and the complexity of a major network upgrade, SMB customer needs were neglected, and its competitors (VZW, AT&T and T-Mobile) stepped smartly in.

    We'll be discussing the US market further at the Onfuture America 2014 Brainstorm (May 20-21, Mountain View) including insights on from the Telco 2.0 Transformation Index research on AT&T, Verizon, and the overall CSP Benchmarking study.

    Extract Chart from Report | 19-Feb-2014 14:42

    NFC v BLE v SIM v Cloud: the Mobile Marketing and Commerce technology battle

    We'ce recently published a new report that will help digital commerce players assess some tough technology and strategy choices in the on-going mobile marketing and commerce battle.

    The report addresses questions such as:

    • Will bricks and mortar merchants embrace NFC or Bluetooth Low Energy (BLE) or cloud-based solutions?
    • If NFC does take off, will SIM cards or trusted execution environments be used to secure services?
    • Should digital commerce brokers use SMS, in-app notifications or IP-based messaging services to interact with consumers?
    • What are the big players backing, and what will be the key indicators that a specific technology is likely to win?

    You can read an excerpt of the report here and we'll also be covering Mobile Marketing and Commerce at the Onfuture America 2014 Brainstorm (May 20-21, Mountain View) and OnFuture EMEA 2014 (June 10-11, London) - email us at to apply to participate.

    Chart Excerpt from Mobile Commerce Technology Battle Report | 18-Feb-2014 11:16

    CSPs / Telcos: Join our Enterprise Mobility Programme

    If you work on behalf of a Communications Service Provider (CSP) in marketing, strategy, technology, IT or product development/management, we would like to ask you to join and participate in a strategic research programme we are undertaking on Enterprise Mobility.

    This programme will conduct and produce research to help key decision makers define and evaluate their Enterprise Mobility strategy. As part of the programme we will share a report detailing Enterprise customers' needs and challenges in successfully deploying Enterprise Mobility solutions and, also, benchmark CSPs' current offerings against those needs on a regional (non-player specific) basis. Having identified any gaps between customers' needs and telco activities, this research will define a strategy for CSPs to establish a stronger foothold in the enterprise mobility market.

    To participate and receive the research in full, please complete this anonymised 4-minute survey focused on your current Enterprise Mobility offering and portfolio. (NB It does not require you to reveal competitive or strategic information).

    The survey can be found here

    We'll also be exploring Enterprise Mobility in further depth in our research and our executive brainstorms in Silicon Valley (May 20-12) and London (June 10-11).

    For those who would like to know more, below is an introduction to some of the hypotheses that STL Partners is investigating:

    1. In pursuit of agility, efficiency, new revenue sources and closer customer relationships, enterprises are turning to mobility to transform the way employees work with engaging mobile apps that harness device-specific functions and capabilities. These apps generally need to connect to and exchange data with back-office systems, many of which pre-date the mobile era. As a result, organisations are looking to partners to provide the tools, technologies and skills to customise and develop apps, do the heavy lifting of deployment and lifecycle management, and accelerate business value.
    2. Telcos need to identify alternative ways to grow revenues from enterprise customers. These include:
      • Monetising the growth in data creation and consumption to offset the inevitable decline in voice services (from consumer and enterprise markets)
      • Pursuing new service offerings such as Machine-to-Machine (M2M), Cloud Services, and real-time insight from the cellular network
      • Providing infrastructure and technology services that offer flexibility and economies of scale, allowing enterprises to focus on exploring new technologies instead of maintaining and managing existing ones.

    Telcos have a timely opening to take an enterprise mobility proposition to market. However, to date, deployments have been niche and opportunistic rather than part of a long-term strategy.

    In our recent report: The 50bn Enterprise Mobility Opportunity: four steps for Telco to take today, STL Partners identified a four-step structured approach that telcos can embark on today, and gain competence and confidence as they move up the enterprise mobility stack to higher value offerings. The four levels of evolution involve:

    • Level 1 - mobilising their own operations and internal processes

    • Level 2 - offering a managed environment to enterprises for their apps, whether on premise or in the cloud

    • Level 3 - providing hosted mobility together with off-the-shelf enterprise apps, with the option to add "last mile" customisation to the enterprise's specific requirements and provide an enterprise app store

    • Level 4 - providing hosted mobility and developing bespoke, highly differentiated apps that solve customers' unique business challenges

    However, building out these capabilities will require substantial commitment and investment - not only in platforms and tools but also in people, via a transfusion of talent from related industries.
    STL Partners is inviting telcos to participate in a study to explore their appetite for and inhibitors to establishing a foothold in the enterprise mobility market, the findings of which will be revealed in a forthcoming report.

    Access the survey here for a complementary copy of our next in-depth study on Enterprise Mobility

    The survey is split into two sections and explores CSPs' internal and external Enterprise Mobility strategy, ambition and implementation challenges. | 05-Feb-2014 17:12

    Telco 2.0 Transformation Index: SingTel, Telefonica lead AT&T, VZ and Ooredoo (but all need more)

    SingTel and Telefonica: Great Telco 2.0 vision and leading the charge, but still behind where they need to be

    The Telco 2.0 Transformation Index, launched today, gives an overall comparative benchmark and in-depth analysis of the progress of five leading telcos (AT&T, Verizon, Telefonica, SingTel and Ooredoo) in terms of transforming their operations and building new 'Telco 2.0' business models. Overall, it shows that SingTel and Telefonica have made more progress than AT&T, Verizon and Ooredoo, but that all are still at a relatively early stage of maturity and have much still to do.

    In the disruptive context of a $400bn 'digital hunger gap', and core revenues shrinking by 20-30%, the Telco 2.0 Transformation Index provides the first definitive benchmark of how well telecoms operators are equipped to survive, compete and thrive.

    Figure 1 below, taken from the overall benchmarking report, shows the headline output from the Telco 2.0 Transformation Index:

    Figure 1: Telco 2.0 Transformation Index Summary Scores

    The score is based on both the telcos' capabilities and the challenges they face, and a score of 75 (the red dotted line in the chart) would show that a telco has started to deliver significant value through new business models. SingTel and Telefonica, at 60 and 57 respectively, have therefore made a good start relative to their peers but must continue to push forward with their new business models. Verizon (47), Ooredoo (44) and AT&T (39) perform less well overall but nonetheless do well in certain dimensions.

    To see how this is captured by the Telco 2.0 Transformation Index, its methodology must first be understood.

    The Telco 2.0 Transformation Index is an integrated and comprehensive evaluation system for CSPs covering internal and external parameters

    The Telco 2.0 Transformation Index analyses five core domains covering both a CSP's external environment and its internal structures and performance:

    1. Marketplace: the context in which the CSP operates. It consists of the regulatory environment and the alternate service offerings offered by competitors.
    2. Service Offering: what the CSP delivers to customers in particular market segments. It is defined by the CSP's corporate and services strategy.
    3. Value Network: the way the CSP organises itself to deliver service offerings. It includes both the internal structure and processes and external partnerships.
    4. Technology: the technical architecture and functionality that a CSP uses to deliver service offerings
    5. Finance: describes the way the CSP generates a return from its investments and service offerings. It also measures the CSP's success in generating returns.
    The overall Telco 2.0 Transformation score for each CSP is based on scorings for these five domains, which are in turn built up from 'Level 1' and 'Level 2' scores. A maximum of 34 independent parameters are analysed and scored for each CSP.

    This framework is summarised graphically by Figure 2 below:

    Figure 2: The Telco 2.0 Transformation Index builds up from underlying data and analysis

    Armed with this knowledge it is now possible to gain an initial understanding of the CSPs' relative strengths and weaknesses. Figure 3 provides the details:

    Figure 3: Breakdown of the Telco 2.0 Transformation Index Summary Scores

    Two key results are as follows:
    1. The Value Network is the key differentiator between CSPs: Telefonica and SingTel, having both made bold organisational changes, score highly here. However, this has not yet been reflected in the quality of their service offerings.
    2. Verizon, AT&T and Ooredoo are strong in very different domains: Verizon performs well in the Service Offering and Value Network, AT&T performs well in the Service Offering, whilst Ooredoo is strong in both the Marketplace and Technology domains.

    These, however, are only the results: they can tell us the 'what' but not the 'why'.

    The Telco 2.0 Transformation Index also allows the reader to drill down and look at the rationale behind each score in increasing levels of detail. Headline output and analysis, contained within a 230+ slide benchmarking report is reinforced by five 140+ slide 'deep-dive' reports for each CSP which are each in turn accompanied by a data pack detailing every numerical input to the CSP's score.

    It therefore provides a unique opportunity for strategists within CSPs and the vendors and investors they deal with to gain both strategic, contextual knowledge of the industry and dedicated, idiosyncratic knowledge of individual CSPs.

    "If you do not change direction, you may end up where you are heading." - Lao Tzu
    Traditional ('core') revenues continue to shrink and markets are becoming increasingly saturated with OTT competition. However, by changing direction and moving into 'Telco 2.0' services (e.g. cloud, digital commerce) top-line revenue growth can be assured in the long-term.

    With the telecommunications landscape changing at an unprecedented rate, telcos, vendors and investors have never been under so much pressure to understand both how telcos can adapt and thrive in this new environment and how well they are doing. There are invaluable lessons to be learned from the experiences and aspirations of leading CSPs to date. These are what the Telco 2.0 Transformation Index provides: click here to find out more. | 27-Jan-2014 18:37

    How Telcos can add 50% share value: lessons from Google and Unilever's business models

    Transformation can be hugely valuable for telcos if they can grow platform and product innovation revenues to add to their core services. In this post previewing some of the findings from the new Telco 2.0 Transformation Index to be published next week (w/c 20th January) we show how this could work.

    [Ed. For more on the Index, please email or join us at OnFuture America 2014 in Silicon Valley, May 20-21, where we'll be sharing some of the findings.]

    'Platform' and 'product innovation' business models produce higher returns on capital

    Telcos predominantly sell three undifferentiated services to downstream customers: voice, messaging and connectivity. This amounts to an infrastructure-led business model (Telco 1.0). Infrastructure businesses (e.g. Vodafone) are highly capital intensive (high EBITDA margins), and show low innovation (its few products are tied to the capital investment - the network) with relatively low returns on capital.

    The operational and financial business models of both Google and Unilever, however, are very different to that of a Telco. Platform businesses (e.g. Google) require a mixture of capex (to build and maintain the platform) and opex (to run and market it), generate strong innovation, utilise a lot of brands (predominantly from other companies) and enjoy high returns on capital. Product innovation business (e.g. Unilever) have relatively high operating expenses (low EBITDA margins), but these operating expenses generate strong innovation and high returns on capital.

    These differences are summarised in Figure 1 below.

    Figure 1: Mapping the financial/operational differences between Vodafone, Google and Unilever

    The table shows just how much higher the cash return on invested capital (CROIC) is at Google (18%) and Unilever (68%) as opposed to Vodafone (6%). This is naturally reflected in the price to book ratio: Google and Unilever have ratios 2.5 and 4 times higher than Vodafone respectively.

    So if a CSP were to expand so that 15% of its operations are platform-based, that should (in theory at least) lead to a 45% increase in share price. Here's how: suppose an infrastructure-led CSP has a book value of $85m. Figure 1 suggests a price to book ratio of 1.6, implying a total share valuation of ($85m × 1.6) = $136m.

    Now suppose the CSP added a platform business to its existing infrastructure such that 15% of its revenues came from here. Its total share valuation is now ($85m × 1.6) + ($15m × 4.1) = $197.5m - 45% larger than $136m and, since the number of shares has not changed, its share price would also be 45% higher.

    If a CSP were to expand so that 5% of its operations are product innovation based, this should lead to a 22% increase in share price (using the above methodology and the data on Unilever from Figure 1.)

    Telcos need new approaches to generate new value

    Historically, being a good CSP has involved making effective capital investment decisions and operating an efficient network. The internet has changed everything. It has fractured the integration between network and services so that voice and messaging are no longer the sole domain of the CSP. Enter the disruptors - such as Google, Apple and Facebook.

    Inspired by the success of these internet giants, companies of all sizes are rethinking how they do business. They are creating and embracing diverse ecosystems, partnerships and innovation through a culture supportive of collaboration, rapid development and emerging technologies. This new approach is based on a two-sided business model (or platform model) that bridges between upstream customers (sometimes called 'merchants') and downstream customers (or 'end-users'). In For example, in Google's case, the upstream customers are advertisers, and the downstream customers those that view and click on adverts.

    The story does not end here, however: telcos must also learn from the 'differentiators'. As well as adopting a two-sided business model, Telcos must also implement innovation designed for both sides of the market at the core of their infrastructure. Unilever, for example, has thousands of brands sold in over 150 countries; two billion people use Unilever's products every day. The consumer goods market is extremely competitive, and Unilever remains ahead of the game by making product innovation supreme.

    In previous research, such as A Practical Guide to Implementing Telco 2.0 and The Roadmap to New Telco 2.0 Business Models, we have described the strategies and types of products and services that could generate both types of revenue for telcos.

    The skills demanded by the new and existing business models are described by Figure 2 below:

    Figure 2: The skills needed to move to Telco 2.0

    The Telco 2.0 Transformation Index benchmarks how well Telcos are managing this transformation

    The Telco 2.0 Transformation Index - released next week (commencing 20th January) - is designed to support companies throughout the industry as they undertake this journey of transformation. It provides a fast, comprehensive, and high impact strategic reality-check and forward outlook to help Telcos, their partners and investors improve returns on strategic investments and activities. It assesses current market performance and positioning, new services, transformative strategies, and future competitive and collaborative abilities of key Telcos/CSPs against their potential and 'best-in-class' peers.

    For example, Figure 3 below, which is taken from the Telco 2.0 Transformation Index benchmarking report, shows where the five Telcos included in the first tranche of deep-dive analyses - Telefonica, SingTel, AT&T, Verizon and Ooredoo - are positioned along the inverse relationship between operating costs and capital expenditure. This is directly related with the movement from an infrastructure-led business model (high capex, low opex; Telco 1.0), to a platform-based, product-innovation-driven business model (low capex, high opex; Telco 2.0).

    Figure 3: The inverse relationship between capital expenditure and operating costs
    [Ed. For more on the Telco 2.0 Transformation Index , please email or join us at OnFuture America 2014 in Silicon Valley, May 20-21, where we'll be sharing some of the findings.] | 15-Jan-2014 19:02

    Mobile and Data Driven Services: The Third Wave of Disruption

    A new wave of highly disruptive change is starting to roll through the digital economy, centred on the mass impact of new mobile devices and the data they generate. The key changes are underway in digital and mobile marketing and commerce, how people consume many products and services, and how they will work in the future.

    Companies and individuals will need to adapt to these changes or find themselves out-competed in the digital economy. Helping them achieve this will be a major focus for our Research and Executive Brainstorm Programmes in 2014. The agenda for OnFuture America 2014, Silicon Valley, May 2014 is now available here, and there is more on OnFuture EMEA 2014, London in June, Digital Arabia in Dubai in November, and Digial Asia in Bali in December here. To enquire about participation in any of these events, please email us at

    So what's new in mobile?

    There has recently been much talk of the 'battle for mobile', meaning different things to different people and serving various agendas. It was back in 2010 when Google's Eric Schmidt told the GSMA World Congress that everything was now 'mobile first', and he was far from first to talk up mobile.

    But what is 'mobile' really all about now that smartphone penetration is becoming commonplace in many economies? Is it all tech hype and huff or just a statement of the obvious? Well, yes there's certainly some of that, but we believe that a collection of factors is leading to mobile being a driver of huge and highly disruptive changes in the digital economy.

    These change-enabling factors are:

    • Mobile Marketing and Commerce - an increasing momentum in the development of convenient and effective enablers to buying and selling via mobile devices (e.g. ISIS, Weve, iBeacon, NFC etc.);

    • Cloud and Big Data - a massive increase in data and availability of processing power and highly sophisticated analytics on demand, and major developments in approaches to regulation and legislation in the use of data;

    • Entertainment and Content - high familiarity with and use of mobile devices for media and content consumption (in younger generations in particular);

    • The Internet of Things - increasing availability of a broader range of connected devices (e.g. wearables, connected scales, health monitors, etc.);

    • Enterprise Mobility - Increasing availability of comprehensive and integrated mobile enterprise applications to improve productivity;

    • Telco 2.0 Transformation - significant strategic activation in telcos and other industries to transform and deliver new digital services.

    Sum of the Parts = Disruption

    We believe that these trends are collectively changing the digital economy in profound ways that that are inter-related and reach beyond any single factor. Bringing these insights to bear for strategists and decision makers in an actionable way is a core objective for our Research and Executive Brainstorm Programmes in 2014.

    Our latest research Digital Commerce 2.0: New $50bn Disruptive Opportunities for Telcos, Banks and Technology Players shows that mobile marketing and commerce need to be seen in a very different way than the traditional 'siloed' perspectives on 'mobile advertising', 'big data' and 'M-Commerce'. We see these as component parts of the 'wheel of digital commerce'.

    Source: STL Partners Digital Commerce Report

    We're also delighted to be in partnership with mCordis, specialists in mobile marketing, in the design and delivery of our 2014 Brainstorms. mCordis share our vision in this area and bring both deep knowledge of mobile marketing and extensive senior level contacts within the mobile marketing elite across the digital economy.

    To reflect these insights, our OnFuture America 2014 Brainstorm in Silicon Valley will bring together 250 senior strategists and decision makers from telecoms, retail, finance, tech and media to brainstorm and work together on the following agenda.


    • Best Mobile and Digital Transformation Strategies

    • Omni-channel breakthroughs: Strategies for managing customer experience

    • Reflecting What a World of Connected Devices and the Internet of Things Means To You and Your Business

    • The Telco Transformation Index - Reviewing New Benchmarks for Future Business Models

    • Content is King: Consumer Engagement Through Content & Social Media

    • Strategies for Leveraging The Value of Data and Creating a Sustainable Competitive Advantage

    • Big Data, Personal Data, Customer Data: New ways of monetisation


    • Mobile & The New Customer Journey

    • PITCH ME! Innovation Showcase - Demo Sessions and 1-2-1 Networking Meetings of the best in Mobile Marketing

    • Deep Dive Workshops:

    • Advertising & Marketing: Through & With Mobile

    • Mobile Commerce: On device & In Store is Driving Revenue & Customer Satisfaction

    • Measuring for Success: Creating Actionable Insight from Information

    • Customer Love: Loyalty, Service Delivery & Advocacy

    • Mobile Marketing Innovation Road Mapping

    For more detail on the agenda please see here, and for information on how to participate please email or call +44 (0) 207 247 5003.

    The Aftermath of The First Two Waves of Mobile and Data Led Disruption

    The first wave of mobile and data centred disruption comprised the rise of the smartphones, quickly followed by the second wave of mobile applications. Both of these waves were highly visible through the magpie-eye lens of the media with its unerring taste for beguiling sparkling images of status enhancing technology, and stories of wealth creation beyond dreams for a select few.

    Following these waves have been further massive changes in human and organisational behaviours which are perhaps less visible and glamorous but potentially much more profound. As a simple and well known example, mobile phones are now used far more as devices for something else (emails, social media, reading, watching films, playing games) than talking to someone. This has brought with it massive opportunities for some (e.g. social media platforms) - and also dire threats for others (e.g. 'traditional' media).

    The initial changes were largely adaptive - people just started doing new things because the technology enabled it. They hadn't planned out the new stuff particularly, they just played with apps and stuck with the ones they liked, and many in industry continued in adaptive mode - "let's try a few things out and see what happens".

    Telcos for their part were focused on the land-grab of smart phone market share and accompanying ARPU, and then the realisation that the new smartphone players (particularly Apple) suddenly wielded massive power and reach in their markets. Occupying telcos' attention was also the seesaw of anxiety and hope over the prospects of massive data growth, which was thought to lead to either massive new costs or revenues but for the most part lead to little growth, some increased network efficiency and the explosion of WiFi.

    Then services like Whatsapp provided consumers with an economic reason to do something different, providing significant savings on text costs in some markets and making it worth getting a different phone and getting the app. Unfortunately for them, not all telcos reacted swiftly and effectively to this threat, and in some markets Whatsapp and other so-called 'Over The Top' (OTT) Services now have very high penetration and usage.

    Our recent report on The Future Value of Voice and Messaging details these dynamics in depth, and also strategies and lessons in defence against similar disruptive attacks that we will also explore further at our brainstorms and in our research that are relevant not just to telcos but to all digital players.

    In the meantime, major disruptive US tech giants (such as Google, Apple, Facebook, and Microsoft) have been manouvering for several years for new positions of power in the highly interlinked digital economy, and their progress and the rise and fall of other key players will also be a key feature of our analysis.

    Overall though, this third wave of disruption is more complex and nuanced than what has gone before, yet in some ways less surprising. Providing, of course, you are prepared for it. | 09-Jan-2014 07:34

    $172bn Telecoms revenue threat: disruptive defence strategies and growth opportunities

    Our latest report The Future of Voice and Messaging shows that telcos could lose up to $172bn from core revenues in five years, but also how they could make dramatic improvements to their voice and messaging strategies worth as much as $80bn.

    Whether you work for a telco or a business that serves telcos, we believe there are three fundamental ways in which the insights in the report can add value to your business:

    • Optimise your strategy - there's $80bn to play for
    • Base your business on more realistic forecasts and deeper insights
    • Learn how to compete with disruption

    Covering each in turn, the key points are as follows.

    1 Optimise your strategy - there's $80bn to play for

    All is not yet lost, and there are very few areas in which telcos can make a difference to the scale of $80bn, much of which is highly profitable, marginal revenue. Whether you are a telco or a key partner, investing in benchmarking your plans against the best in the market could produce major returns.

    The report shows how telcos can fight to reduce this loss by $80Bn through intelligent optimisation of prices and bundles, service enablement, exploiting new standards such as WebRTC and VoLTE, creative approaches to own brand OTT services, and a greater focus on enterprise communications.

    2 Base your business on more realistic forecasts and deeper insights.

    Our forecasts have been the most prescient, aggressive, and sadly the most accurate, in the market. Even if you don't particularly like what we are saying, how much better would your strategy and investment decisions be if your plans were based on an independent, expert view of the market?

    The report contains an in-depth analysis of the changing needs of both consumer and enterprise markets, and detailed mobile and fixed voice and messaging forecasts for US, Canada, Singapore, Taiwan, UK, Germany, France, Italy, and Spain.

    3 Learn how to compete with disruption

    Invaluable lessons in how to compete with disruptive competition can be found in our analysis of the successes and failures of telcos to deal with the incursion of such services into their heartland revenues. The report contains 'OTT' case studies on e.g. Whatsapp, KakaoTalk, and 'Telco OTT' plays such as TuGo.

    The report comprises a concise executive summary, and totals 260 pages and 163 figures. Further details here. | 11-Dec-2013 19:05

    Telcos could lose up to $172bn from core revenues in 5 years

    Our latest major report The Future Value of Voice and Messaging shows that telcos could lose up to $172bn from core revenues in five years if they don't make dramatic improvements to their voice and messaging strategies.

    The declines are due to so-called 'Over The Top' (OTT) competition, vulnerable pricing structures, economic pressures and societal changes. The research shows how Telcos can fight to reduce this loss by $80bn and improve their relevance to customers through intelligent optimisation of prices and bundles, service enablement, exploiting new standards such as WebRTC and VoLTE, creative approaches to own brand OTT services, and a greater focus on enterprise communications.

    It includes detailed forecasts for 9 major developed markets (US, Canada, France, Germany, Spain, UK, Italy, Singapore, Taiwan), in which the total decline is forecast between $92bn (-25%) and $172bn (-46%) on a $375bn base between 2012 and 2018, giving telcos an $80bn opportunity to fight for.

    The report also shows impacts and implications for other technology players including vendors and partners, and general lessons for competing with disruptive players in all markets.

    One of the most surprising things the report shows is how effective some telco strategies have been in defending against disruptive competitors like WhatsApp. Then again, there are some markets, such as Spain, where the combination of telco pricing and economic conditions have played right into the hands of the so-called 'OTT Players'.

    Equally, there are some great opportunities for telcos to build new value, particularly in the Enterprise market, where some of the more traditional technology companies like Cisco face increasingly disruptive competition from players like Google and Microsoft.

    More on the report

    This report provides an independent and holistic view of voice and messaging market, looking in detail at trends, drivers and detailed forecasts, the latest developments, and the opportunities for all players involved. The analysis will save valuable time, effort and money by providing realistic forecasts of future potential, and a fast-track to developing and / or benchmarking a leading-edge strategy and approach in digital communications.

    It contains:

    • Our independent, external market-level forecasts of voice and messaging in 9 selected markets (US, Canada, France, Germany, Spain, UK, Italy, Singapore, and Taiwan).
    • Best practice and leading-edge strategies in the design and delivery of new voice and messaging services (leading to higher customer satisfaction and lower churn).
    • The factors that will drive best and worst case performance.
    • The intentions, strategies, strengths and weaknesses of formerly adjacent players now taking an active role in the Voice & Messaging market (e.g. Google & Microsoft).
    • Case studies of Enterprise Voice applications including Tropo, Twilio and Unified Communications solutions such as Microsoft Office 365.
    • Case studies of Telco OTT & enterprise Voice and Messaging services such as Telefonica's TuGo and Vodafone One Net.
    • Lessons from case studies of leading-edge new voice and messaging applications globally such as WhatsApp, KakaoTalk and other so-called 'Over The Top' (OTT) Players.
    It comprises a concise executive summary, and contains 260 pages and 163 figures.

    A summary of the report can be found here. | 29-Nov-2013 09:14

    The Future Value of Voice and Messaging: >$80 billion to play for

    Our latest strategy report The Future Value of Voice and Messaging shows how telcos can slow the decline of voice and messaging revenues and build new communications services to maximise revenues and relevance with both consumer and enterprise customers. It includes detailed forecasts for 9 markets, in which the total decline is forecast between -25% and -46% on a $375bn base between 2012 and 2018, giving telcos an $80bn opportunity to fight for.

    It also shows impacts and implications for other technology players including vendors and partners, and general lessons for competing with disruptive players in all markets. It looks at the impact of so-called OTT competition, market trends and drivers, bundling strategies, operators developing their own Telco-OTT apps, advanced Enterprise Communications services, and the opportunities to exploit new standards such as RCS, WebRTC and VoLTE (more here). | 20-Nov-2013 23:36

    Innovation Souq! - 6 Demos in 42 Minutes

    The Innovation Souq session at our Digital Arabia event is a new format in our events that we're hoping to roll out more broadly. Each participant pitches their innovation for 7 minutes, and when all of them are done, the delegates can wander around the souq and meet them informally.

    Etisalat's demo combines mobile payments, advertising, and augmented reality. You can point a mobile device camera at products to see more detail and perhaps offers, and then pay for them using their m-payments service, while the merchant sees this on their POS terminal. The detail we liked, though, was that the AR element doesn't have to be projected over something physical - it could also be registered against scenes in a TV broadcast, opening up a lot of new possibilities for advertising and commerce. Not just those, of course - it also creates some new possibilities for media in general.

    Smartpipe wants to dig into your CDRs and generate advertising opportunities based on insights from them.

    Tmob, a Vodafone-linked mobile payments startup, is using the proximity features that arrived in iOS 7 and Android 4.x to implement location-based offers and surprises. Apple call it iBeacon, and you should probably expect to see more of this.

    Zangbezang is a rather impressive solution that lets you set up offers with geographical and demographic targeting and then redeem them. The transactions element of the cycle is based on QR codes and the smartphone camera, so there's no need for either NFC or a Square-like credit card dongle as all the financial processing happens via a website. There's quite a bit of richness to explore in the targeting and recommendations process.

    NPTV is a cloud platform for producing richer, interactive video with multiple camera options, AR overlays, and the like that the viewers control. Think telemetry or the driver view camera in a F1 race, or the reverse angle camera in a football match. The rendering happens in the cloud, unloading a lot of computing demand from the user's device or your Web servers. As usual with the cloud, there's quite a bit of innovation in the infrastructure that's hidden from the user, including a new chip.

    Telkom Indonesia and EBay are cooperating on a mobile commerce platform for small businesses - the facts that stick with us, though, are that there are 5.7 million blogs in Indonesia and it's the world's second biggest userbase for Opera Mini. That's quite a mobile Web market. | 13-Nov-2013 06:59

    Innovations: Customer Experience, Analytics, Smart Grid, M-Commerce and Monetising Content

    The Innovation Souq! at Digital Arabia in Dubai next week (11th-13th November) has a fascinating line up of demos of innovations by innovators from across the digital ecosystem. We're really looking forward to seeing these short, sharp demonstrations - the rules are that they have to be real innovations that can be applied now. We've also got a fantastic group of participants lined up to see them. [Ed: If you haven't booked yet there are a few spaces left - email or call +44 20 7247 5003 ASAP. ]

    There's such a broad range of innovations on display that it's hard to categorise without doing some a dis-service as many cover more than one area of innovation. However, the main themes we anticipate are:

    • Customer Experience: Accenture will show 'Call Centre 2.0', showing analytics in action enhancing real time customer experience; Intel are showing Communications-Enabled Video Conferencing, enhancing conferencing with APIs; and ZangBeZang are demoing 'Customer Engagement 2.0'.
    • Building on the Data Analytics and Smartgrid themes, IBM are demonstrating city traffic data analysis, and Ericsson 'Enabling the Smart Grid', enabling enterprises such as utilities to use network capabilities to drive third-party innovations.
    • In M-Commerce, Etisalat are demo-ing Mobile-Id-as-a-Service, and Mobile 'Point of Sale' (M-Pos) innovations, while 5th Tier's CEO Tanya Field (ex-O2) is showing Mobile Advertising and Mobile-Id-as-a-Service. Turkey's Tmob are showing Mobile Wallet 2.0, Minutrade 'mobile as a loyalty currency', and Mastercard in-content web payments.
    • Relating to Monetising Content, Etisalat are also showing 'TV Monetisation 2.0', and ex-Rovio COO (Angry Bird, also ex-CEO Tele2 and C-level in Sonera, TeliaSonera and Wataniya) Harri Koponen is demonstrating NPTV's cloud-based real-time interactive video.
    So join us for the Innovation Souq!, the Digital Commerce and Digital Entertainment workshops, and the Digital Economy brainstorm. See you there - or get in touch if you'd like to participate in future innovation demos - email or call +44 20 7247 5003). | 06-Nov-2013 14:23

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