Nec FS WP

THE EMERGING
MEGATRENDS
G20 Economies Best Practices
What Every Telecom CEO Needs to Know
Copyright 2015 Frost & Sullivan. All rights reserved.
Table of Contents
A. Introduction The Future of Telecommunications: A CEOs Perspective

- Telco Challenges OTT Threats & Network Transformation
- Telco Opportunities Big Data, Wearables & IoT
3
5
6
B. The New Megatrends: Global Best Practices Every CEO Needs to Know
1) Survival in a Post-Voice World
2) Big Data Transformation
3) National Secure Service by Government supported by Telecoms
4) Dealing with SIM Free Threats and Opportunities(Apple SIM)
5) Embracing the Industrial Internet Service (B2B IoT)
6) Smart ARPU with Wearable Devices (Consumer IoT)
7) Software Defined Everything, Pay per Use (no more Capex)
8) Carriers Revenue Model in 5G Age
9) Network Neutrality, Carriers vs Free ride Innovator
10) Customer Churn Management
7
9
11
13
15
17
19
21
23
25
C. Investing in the Future The Importance of Partners
27
D. Final Thoughts
28
THE EMERGING MEGATRENDS
Introduction The Future of

Telecommunications: A CEOs Perspective
The telecom industry is going through both types of transitions right now, thanks largely to a few
major factors. These include the continuing deluge of data, and how and where to store it for
analytics purposes; the steady improvement in both performance and power savings in the new
generation of processors; the rapid development of cloud services; and vastly improved network
bandwidths and data movement speeds. For example, network and software systems need to
prepare for new services to come, such as mobile banking, machine-to-machine communication,
and cloud-based services. Leading TSPs are in varying stages ranging from planning and
implementation for aggressive revamps of their network architecture and business models. For
instance, rather than keeping voice and data traffic on separate networks, mobile operators are
realizing the increased efficiency and quality of service that takes place when they consolidate
traffic onto LTE networks. Over the past year, several mobile operators AT&T, Verizon, T-Mobile
have built out their LTE coverage and launched VoLTE updates.
This increasing convergence between web and telecommunications technologies throughout 2014
has led to significant communication breakthroughs for businesses and the over-the-top (OTT)
service providers and mobile operators who provide these services. This convergence will
continue into 2015, creating new opportunities for some and eliminating others. This whitepaper
identifies ten key trends that will shape the future of the telecommunications domain, while
evaluating the relative and inter-dependent impact of each of these trends.
Agenda of C-Level Officers in the Telecommunications Industry

Customer Churn
Management
Survival in a PostVoice World
Network Neutrality,
Carriers vs Free ride
Innovator
Big Data
Transformation
Carriers Revenue
Model in 5G Age
National Secure Service

by Government
supported by Telecoms
Dealing with SIM

Free Threats and
Opportunities
(Apple SIM)
Software Defined
Everything, Pay
per Use
(no more Capex)
Embracing the
Industrial
Internet Service
(B2B IoT)
Smart ARPU with

Wearable Devises
(Consumer IoT)
Source: Frost & Sullivan

3
Key Agenda for Top Management Officer to

address by 2025 Telecommunications Industry
Impact vs Certainty of Key 10 Agendas in Telecom Industry
The charts shows the level of impact and certainty in each megatrend by 2025.
The size of bubbles are entire market size of each megatrends in 2025.
High Impact/Low Certainty
High Impact/High Certainty
5.0
5.0
*(7) Software Defined Everything, Pay per Use (no more Capex)
US$ 279 Billion
*(3) National Secure Service by Government supported by Telecoms
US$ 49 Billion
*(1) Survival in a Post-Voice World

US$ 1,486 Billion
*(2) Big Data Transformation

US$ 86 Billion
*(5) Embracing the Industrial Internet Service (B2B IoT)
US$ 324 Billion
Overall Mean (3.5)
*(4) Dealing with SIM Free Threats and Opportunities(Apple SIM)
US$ 86 Billion
*(6) Smart ARPU with Wearable Devices (Consumer IoT)
US$ 261 Billion
Level of Impact
*(9) Network Neutrality, Carriers vs Free ride Innovator

US$ 90 Billion
*(8) Carriers Revenue Model in 5G Age

US$ 1,001 Billion
*(10) Customer Churn Management

US$ 38 Billion
Overall Mean (3.4)
Note:
Blue Bubbles are Opportunity
Red Bubbles are under Threats
Green Area : Business as usual
Pink Area : Immediate opportunity
Blue Area : Strategic opportunity
0.0
Low Impact/Low Certainty
5.0
Level of Certainty
Low Impact/High Certainty

Market Definition:
*(1) Global Digital Contents Market (include Advertising, Video/Audio Entertainment, Video Games, Education, Print)
*(2) Global Big Data Analytics Market (include Application, Infrastructure/Networking, Storage, Compute)
*(3) Global Managed Security Service Market (include Cloud/Hosted, Management/Monitoring, Assessment Services)
*(4) Global Connected Devices Market (include Communication Module, Services, Sensor Module)
*(5) Global IoT Market (include Devices, Networking, Platform, Application and Services)
*(6) Global Wearables Market (include Glasses, Fitness Band, Watches, Camera,3D Motion Trackers)
*(7) Global Software Defined Everything Market (include Networking, Storage, Datacenter)
*(8) Global Mobile Broadband Market (include Mobile Broadband Subscription)
*(9) Global CDN Market (include Analytics and Monitoring, Encoding and DRM, Transparent Caching, VCMS, Video Indexing)
*(10) Global Loss to Churn Market (include Subscriber Acquisition Cost, Loss Subscription Revenues)

Telco Challenges OTT Threats & Network
Transformation
Despite the exponential growth in mobile and broadband penetration and consumer demand for
telecommunications services, TSPs are increasingly being plagued with high churn rates,
declining mobile ARPU, declining revenue for the fixed business model, and rising threats from
OTT players.
The model of the traditional telco is aggressively being revamped, propelled forward by consumer
expectations. Carriers are the modern shape-shifters, moving from single-play wireless or wireline
voice services to triple-play or even quadruple-play offerings, bundling together voice, broadband,
television and wireless services.
This represents the next milestone for TSPs: the opportunity to gravitate towards a future where
they can act as content aggregators, streamlining and converging practically every aspect of a
consumers digital experience. This hands over the reigns to telecommunications providers on
their own home-turf, as OTT providers are unlikely to reach the scale and infrastructure strength to
be able to provide single-platform integration capabilities.
Network transformation is rapidly being perceived as

an urgent necessity, instead of a mere competitive
differentiator. Operators have realized that unless
they do something quickly to carve out their places in
the overall digital communications picture, they will
be marginalized and turned into nothing more than
suppliers in the highly commoditized bit-pipe market.
By taking the direction of universal, platform-agnostic
content aggregators, operators can leverage their
unique positioning to cash in on OTT by combining
their one-on-one customer relationships and
network-based features while delivering OTT
content.

Telco Opportunities Big Data, Wearables & IoT
Telecommunications companies are facing a multiple challenges that challenge their core
business. This primarily revolves around three Cs: Costs, Consumers, and Competition. These
challenges outline clear opportunities for TSPs for network transformation and new service rollouts.
Firstly, telecommunications service providers (TSPs) are under the increased pressure to roll out
new services while controlling the costs of the current solutions so they can invest in whats
coming next. This is being increasingly countered by investments into revamped network
architectures such as 5G, SDN and big data analytics. Secondly, TSPs are struggling with
customer retention. With the deluge of OTT providers and TSP alternatives for customers to
choose from, consumers are increasingly less loyal.
The primary opportunity for TSPs here involves positioning themselves as content and service
aggregators: by offering converged platforms with multi-play services and end-to-end lifestyle
management solutions such as B2B and B2C IoT, TSPs can focus on customer retention and
quality customer care. Thirdly, CSPs are struggling under new net neutrality laws, paving way for
strong OTT competitors. Here, TSPs are increasingly finding opportunities to leverage their
leading network infrastructures to dominate newer avenues such as telehealth, big data-enabled
Artificial Intelligence, security and city-wide communications, public security and utilities
frameworks.
These parallel trends reflect one primary common

differentiator: the traditional TSP model is expanding
past the usual definitions to enter new industry
verticals, matching investments with a wide range of
consumer and enterprise centric business cases.
A major consideration for telecommunications
operators here is revamping their back-end architecture
to accommodate this vision. To achieve this objective,
TSPs need to collaboratively work with and evaluate
technology vendors specializing in OSS/BSS solutions
to transition their charging and billing capabilities to
support new services such as virtualized network
functions, VoLTE and cloud-based service delivery.
Evolving this critical backbone architecture will ease
and accelerate the transition for green-field
deployments within operator networks.
SURVIVAL IN
A POST-VOICE WORLD
The Modern TSP:
An Adaptive Shapeshifter
Despite the exponential growth in mobile and broadband
penetration and consumer demand for telecommunications
services, TSPs are increasingly being plagued with high churn
rates, declining mobile ARPU and declining revenue for the fixed
business model. The model of the traditional telco is
aggressively being revamped, propelled forward by consumer
expectations. Carriers are the modern shape-shifters, moving
from single-play wireless or wireline voice services to triple-play
or even quadruple-play offerings, bundling together voice,
broadband, television and wireless services. This represents the
next milestone for TSPs: the opportunity to gravitate towards a
future where they can act as content aggregators, streamlining
and converging practically every aspect of a consumers digital
experience.
Convergent Services Propelling

a Changing Telco Model
Carriers who rely solely on voice revenue streams are
facing the brunt of consumer withdrawal, with alternative
voice channels swiftly emerging. However, as an
encouraging parallel trend, consumers are swiftly
warming up to the concept of being able to access all
three key services Internet, landline and TV from a
single provider. In the US, for instance, AT&T, Verizon,
Comcast, Cox, and Time Warner all offer quad-play and
have scored highly with American consumers due to
significant discounts being available to consumers, with
providers that are open to negotiation and offering deals.
Voice: The Telco Constant

Telecoms companies globally are under
pressure to find new sources of growth. For
instance, a wireless operator might be
incentivized to merge with a telecoms
juggernaut to maximize its service offerings
and benefit from multiple revenue streams.
While TSPs will have to aggressively pursue
revenue streams outside of voice, voice
communication is nowhere near to seeing its
demise: voice will remain the communications
backbone, particularly in prepaid lines of
business. For MVNOs and Low Cost Carriers
(LCCs), the voice model will remain the
traditional go-to source of revenues for a
while, as these carriers lack the deep pockets
of other TSPs to be able to successfully
monetize the transfer from voice to data, at
least in the near future.
Key Agenda for C-Level Officer

Gain footing in innovative technologies such as
Artificially Intelligent Voice (AIV). Use cases include
AIV as a personal lifestyle aggregator.
This could range from carrier-branded personal
assistants that aggregate all voice streams (cellular
and VoIP) to AIV applications that provide a singletouch view into all aspects of a consumers life.
Leverage customer experience as a competitive
differentiator.
CASE STUDY
SURVIVAL IN A POST-VOICE WORLD
Frances Free Mobile Pushes for Reinvention of the Carrier Model
In early 2012, Free Mobile was launched by the French entrepreneur Xavier Niel. Utilizing a blend
of Wi-Fi, HSPA+ 3G, femtocells and its all-fiber backbone, Free offers unlimited voice, texting and
data over the mobile networks. The company hit the market with a revolutionary offering: 3GB for
20 euros ($28) with unlimited calls and texts, plus no fixed contract term. Though the company
had limited infrastructure and leased spectrum from Orange to boost capacity, the offer struck a
chord with consumers: Free grabbed four percent of the market, or about 854,000 subscribers, in
just three months. As of the end of 2013, Free had 8 million customers, giving it a 12 percent
share of the French market, just behind Bouygues. The company's data plan is now even better,
as well: 20 euros for unlimited texts and calling, with 20GB of 4G data included per month. To top
it off, it's about to start selling contracts and activated SIM cards directly from vending machines,
as pictured below. Free has essentially positioned itself as a broadband service provider with one
unique exception: it believes that everything else from voice to IPTV to storage is just a
feature that rides on data service. This approach has helped it radically differentiate itself from the
rest of the telecom industry that has traditionally counted on metered minutes and billable items.
VISION FOR 2025: Telecommunications incumbents will see rising competition from small freeride innovators who stray away from traditional voice-focussed billing plans. While voice will
remain an integral communications component, consumers will be more inclined to select their
preferred operators based on the quality and cost of their data services, expecting high voice
service qualities to be a given. This shifting consumer preference will require telecommunications
operators to come up with unique and innovative pricing, bundling and marketing offers that are
centred around their double, triple or multi-play offerings such as data, TV or OTT content.
BIG DATA
TRANSFORMATION
Megatrends by 2025
Granular, focussed data that leads to actionable insights, when
paired with the automotive, deep learning capabilities of AI, can
cause tangible improvements in vast sub-industries such as the
contact center space. Considering the overall big data
landscape, faster movers such as Telefonica (Telefnica
Dynamic Insights) and Verizon (Verizon Precision Market
Insights), have created new business units to use big data as an
external service. A secondary tier of emerging developers in this
space are instead taking the approach of creating new
partnerships in the market research and advertising markets and
employing new big data analytics and data-as-a-service
platforms internally in order to accelerate their understanding
and revenue with new services. A third tier will soon emerge,
where TSPs rise beyond these use cases to use big data as a
catalyst for multi-stream domain aggregation with a smarter,
more focussed usage of the marriage between big data and AI.
Monetizing Big Data Insights

The realistic bottom-line benefits of big data can only be
evidenced if TSPs actually progress to a process-driven
monetization effort that funnels usable big data insights
through the correct channels (product managers, sales,
marketing, network and IT managers).
In todays scenario, TSPs are actually transitioning Big
Data into real opportunities. For instance, a key use case
for TSPs is the indirect monetization of big data by
implementing usable insights to reduce churn rates. TMobile USA, for instance, has managed to reduce their
churn rate by 50 percent in one quarter - a significant feat
considering its subscriber base of 33 million customers.
Data in the B2B Field

TSPs are more likely to start using Big Data
analytics for their internal processes
(marketing and customer care) before offering
this as a service externally. The use of Big
Data analytics to build new data services to
be sold to external partners is immature, but
holds the potential for significant revenue
streams. In the short term, revenues are likely
to be restricted by privacy and regulatory
issues that are reducing the ability of TSPs to
offer these new services, whereas OTT
players are less impacted by the same
regulations. TSPs would typically not be likely
to actually release data to third-parties, but
instead would profit more by providing the
data as a service, which gives them stricter
control over who and how often their
customer base is contracted.

Establish itself as a data aggregator to compete with
over-the-top threats.
Establish new partnerships with players outside of
the ICT industry; including market research, media
and advertising.
Identify and track the type of data that commands a
premium from external parties.
Employ data-as-a-service platforms internally to
accelerate learning of new products and services.
CASE STUDY
BIG DATA TRANSFORMATION
Verizons Precision Market Insights Clear the Path for B2B Big Data
Through Verizons Precision Market Insights business line, Verizon is using data collected from
subscribers that have opted in to its Verizon Selects programme to provide access to microsegments of the market that are made available in the Precision range of data services. Verizon
Selects enables location, web browsing habits and mobile application usage data, as well as other
information including customer demographic and interest data, to create specific insights.
Verizon has two broad service types under this division. The first service uses aggregated
anonymous data for location, browser and mobile application usage habits to provide
segmentation information for use by marketing companies looking to address groups of
subscribers. The second service is built around a programme to make ads more targeted for each
subscriber, so when a subscriber sees an ad on a websites or in an app, the ad is especially
relevant. Verizons Precision Market Insights division began collecting and selling data on its
customers last year, but that information was mostly being used for analytic purposes, such as to
give stadiums and malls statistics and information about cellphone users in particular locations.
The company is now shifting its focus away from analytics, and specifically towards the targeting
and measurement of advertising.
VISION FOR 2025: Telecommunications providers will move from merely using big data insights
for their internal operational and customer-focussed agendas, but will evolve into central focal
points within a data-centric ecosystem. TSP incumbents will leverage their network resource
potential to harness large amounts of data from city/nation-wide networks, including millions of
connected industrial, wearable and utility-focussed (meters, sensors, etc.) IoT and consumer
telecommunications devices. The data harnessed would serve as a central repository for both B2B
sales as well as internal telco usage, harnessing stronger consumer insights for both telecomenterprise partnerships as well as telecom-government partnerships.
10
NATIONAL SECURE
SERVICE BY GOVERNMENT
SUPPORTED BY TELECOMS
Building A Collaboratively Secure Future
The concept of security, particularly for IT industry veterans,
has always been partially two-pronged, with a firm line
separating physical security from cyber security. This line is, and
has for a while been getting thinner and thinner. Crimes
instigated by cyber perpetrators have transitioned into real,
tangible damage to physical assets, public safety and human
lives. From a defence perspective, this has lead into strong
revenue opportunities for partnerships between TSPs and
government organizations, in the mutual interest for public
safety. Leading TSPs, for instance, are winning more
government contracts for services such as secure public Wi-Fi
and defence due to the profitable synergies between local
governments and telcos.
Security: The New Telecom

Opportunity
The National Security Agency was publicly reported to
having collected the telephone records of millions of US
customers of Verizon. Reports such as this have
consistently damaged public view of TSPs: a perception
that has the potential to turn a 180 degree spin. The
focus of TSPs is progressively returning to securing the
network core, as privacy concerns converge with
security. When clubbed together with home security,
organizational security, and public environment safety,
TSPs security-as-a-service model would serve to shift
their perceived value as communications providers to
providers of lifestyle necessities.
Collaborative Infrastructure :
Security as a Shared Goal
2015 has ushered in an era where a higher
level of expectations lay on the part of TSPs
in securing their own networks to deliver this
reassurance to their subscribers. This
represents a forward momentum for national
policy, too, where government institutions are
making security a stronger part of their
legislative views. USA, for instance, has a
collaborative
framework
between
the
government and TSPs such as Verizon,
Sprint and AT&T for citizen security. UK is
another example: not only have nine of the
world's largest weapon makers and telecoms
providers (including British Telecom and BAE
Systems) teamed up to bolster the country's
cyber security, but BT was also entrusted with
delivering the entire network for Londons
2012 Olympics.

Position the TSP as a security incumbent: Along with
B2C security solutions and B2B security solutions,
prioritize key focus for collaborative areas in the B2G
(Business to Government) space, for Governmentowned, TSP-operated network opportunities.
Prioritize both city-wide networks as well as
cyberspace networks focussed on national borders,
capable of supporting utility meters, sensor data,
payment data, home security, border security, etc.
11
CASE STUDY
NATIONAL SECURE SERVICE BY
GOVERNMENT SUPPORTED BY TELECOMS
Obamas IT Security Transformation: Call for Government Collaboration with
IT Sector
During a 2015 White House Summit on Cybersecurity and Consumer Protection, Obama signed
an executive order creating a framework for how companies can better share cyber data with the
government. The order creates "hubs" that will allow businesses to share security information with
one another and will also give corporations access to classified threat information that could
potentially help protect them. Reports of cyberattacks have increased five-fold since 2009, and
President Obama has made cybersecurity a priority in 2015. To that end, his administration
announced a new cybersecurity agency called the Cyber Threat Intelligence Integration Center,
which will be tasked with analyzing and quickly sharing intelligence information. This new
approach to IT security is built around the foundation of collaboration, and encourages U.S.
companies to partner both with each other and with government agencies. The order lays out a
framework for expanded information sharing designed to help companies work together, and work
with the federal government, to quickly identify and protect against cyber threats. Already, security
vendors like Palo Alto Networks, Fortinet and Symantec have banded together to form the Cyber
Threat Alliance to share threat intelligence.
VISION FOR 2025: Telecommunications operators will increasingly be regarded as a more
collaborative partner for national and local governments, instead of just service providers. This will
ensure that TSPs can, along with technology vendors, form a partner ecosystem to aid national
security goals, as well as generate more revenue from the public sector through government
contracts.
12
DEALING WITH SIM

FREE THREATS AND
OPPORTUNITIES (APPLE SIM)
2025 vs 2015: The Revamped Consumer
2015 has seen a fundamental change in customer definition. The
I mindset is been increasingly replaced by a family-centric
mentality, reinforced by the success of initiatives such as
DoCoMos Family Wide billing plan. In this regard, the Apple SIM
is the quintessential disruptive technology, simultaneously
empowering the modern customer and pushing TSPs to become
innovators. While currently only on the iPad, the possibilities of
the Apple SIM on the iPhone are endless. Consumers would
have to power to see, for example, competing offers from
different operators. TSPs are fighting back: Verizon, for instance,
has refused to buy into Apples call-out for participating TSPs,
preferring to rely on its competitive edge in 4G LTE and premium
pricing strategies. This has set the stage for the future, where
leading TSPs with strong consumer satisfaction and network
dominance will be able to resist the disruptive pull of phenomena
like the Apple SIM.
TSPs Still Have The Victors Turf

The biggest concern here revolves around which TSPs
will have the potential to be the Goliaths here and
successfully defend their turf. Most iPhones, for instance,
are sold through wireless carriers, who would actively
resist the idea of hooking their customers up with SIM
cards that facilitate easy switching. By contrast, the iPad
is mostly sold by Apple through the Apple Store. This
forms the crux of the issue: with all the hoopla around the
disruptive potential of the Apple SIM, Apple does not
really have a plan yet to overthrow the wireless mobile
market.
The Inevitability of a MultiDevice Future

The Apple SIM dilemma raises an important
issue. Operators have so far been focussing
on expanding their reach into services, with
dual-play, quad-play and multi-play options.
These services span a vast number of
devices that consumers are rapidly branching
out to, to fulfil diverse and scattered digital
consumption preferences. Consumers may
have as many as 15 connected devices each,
as they move sequentially between different
screens during the same day. This shifts the
focus from hardware to software: a gateway
opportunity for TSPs to avoid consumer
hardware/device dependence and lock-in.
Software-defined
SIMs
are
eventual
possibilities in this gateway approach, with
which TSPs can counter disruptive trends to
lean into a more hardware-agnostic model.

Pursue the ultimate aim of becoming multi-channel
content, service and device aggregators. Instead of
fighting the increasing consumer power, TSPs will find
it easier to compete on the basis of who can provide
this power more seamlessly to the consumer.
Diversification into the broader digital landscape
would mean that TSPs can be the one-stop hub,
centralizing all aspects of the consumer digital
experience.
13
CASE STUDY
DEALING WITH SIM FREE THREATS AND
OPPORTUNITIES (APPLE SIM)
The Apple SIMs Power to be a Gatekeeper for Carriers
In the US and UK, the LTE versions of the iPad Air 2 and iPad Mini 3 will come with a
reprogrammable SIM card the Apple SIM that can switch to different carriers via the Settings
menu in iOS. In theory, this allows consumers to switch between their AT&T contract and perhaps
a pre-paid T-Mobile deal, to get the best of both worlds. In the future, when the Apple SIM
inevitably rolls out to the iPhone, consumers might be able to open up Settings and select one
carrier for cheap international calls, and then switch back to their main carrier for data. When they
travel, rather than having to hunt down a local SIM card, Apple SIM would let them easily use a
local carrier for cheap data and calls.
Acting as a gatekeeper to the carriers could potentially give Apple an enormous amount of power.
For instance, until or unless Verizon gets on board, it could find itself hurting this holiday
season when people unwrap their brand new iPad Airs and try to connect them to the cellular
network. If Verizon isnt an option in Apples pull-down menu of carrier choices, Verizon loses its
chance at that initial connection. Apple could use that power over carriers to get better rates for its
customers or pit the carriers against one another during the initial provisioning process. With this,
the Apple SIM has brought with it the disruptive potential of transforming the telecommunications
space into one that is centred around software-programmable SIMs, which would prompt carriers
to amp up their competitive edge.
VISION FOR 2025: Telecommunications providers will have to guard their territories against
device manufacturers and technology vendors such as Apple and Google. Strategies such as SIM
lock-in might prove to be a losing battle around stealthy alternatives such as the Apple SIM, and
might only serve to further alienate customers who choose to pick service providers that allow
them further flexibility. However, the level of impact and certainty for disruptive threats like the
Apple SIM is low towards 2025: the likelihood of the Apple SIM being available for the iPhone in
the next 5 years is low it currently makes sense for the iPad which tends not to be subsidized by
the operators, but there is less incentive (for the networks) to offer this for the iPhone, as the
handsets true cost is usually subsidized and they want to lock customers in for 2 year contracts.
14
EMBRACING THE
INDUSTRIAL INTERNET
SERVICE (B2B IoT)
Catalyzing the Internet of Future
with the Internet of Things
The underlying impact of the IoT trend centers around the
eventual probability that by 2025, the number of devices
connected to the Internet will aggressively catch up to, and
possibly outnumber, the number of people themselves. In
todays reality, telecommunications giants like BT, Verizon,
Comcast and Deutsche Telekom are moving fast: they all have
partnerships with white-label IoT vendors, propelling a B2B2C
model to provide IoT devices as a service directly to consumers.
Additionally, other carriers have launched a solid foray into the
B2B2B industrial IoT market. Case in point: SoftBank, which has
partnered with General Electric (GE) to license GEs PredixTM
platform for the Industrial Internet.
A Seismic Shift Towards B2B2B IoT

TSPs such as Verizon swiftly moving into the B2B
market, with IoT solutions such as connected cars.
Verizon has rolled out Verizon Vehicle, which faces stiff
competition from the likes of General Motors OnStar unit
a reflective trend that indicates the battle for dominance
in the IoT market between telecommunications service
providers and automotive providers. Technology vendors
however have, for the most part, settled into the role of
manufacturers or white-label vendors. Vendors such as
iControl, Nest and ARM sell their products through
leading service providers, who can offer their subscribers
home security and smart utilities solutions. This further
strengthens TSPs growing role into the multi-play,
convergent service market.
The Challenge: Monetizing IoT

To date, most IoT-related carrier attention has
been on the connected car sector, along with
the utilities and public safety sectors, to a
lesser extent. The relative lack of a clear
monetizing framework here is due to the
basic framework of the IoT - lots of endpoints
but relatively low bandwidth requirements
which does not play immediately to carriers'
strengths. Telecoms are looking ahead to
companies, not consumers. Consumers are
just the solution for today, but the long-term
potential is in all those refrigerators that need
connecting to buy your groceries, all those
self-driving cars that need connecting to pull
directions and all those wireless pills that
need connecting to measure and send back
cholesterol levels in your stomach.

Carriers need to leverage on IoT and their potential
role as content and device aggregators to break down
silos, which as been the primarily bottleneck in
organizational efficiency. TSPs can create platform
ecosystems, improving new-service creation.
Model themselves as leaders of both the B2B2B and
the B2B2C IoT market to counter sinking voice
revenue, imbalance between data costs and earnings,
and new competitors like Facebook and Google.
15
CASE STUDY
EMBRACING THE INDUSTRIAL INTERNET
SERVICE (B2B IoT)
SoftBank-GE Partnership marks Significant Growing Potential in Industrial IoT
Marking the first step to monetize its Predix software platform, General Electric Company chose
Japanese telecom giant SoftBank Corp. as the first licensee for its Predix software platform that
connects industrial devices. The Predix software is designed to add intelligence to the Internet of
Things (IoT) applications. It allows companies to connect their machines, data and people and run
industrial-scale analytics. The software is installed in both the machines and the cloud, thus
allowing the devices to connect and communicate. Per the licensing agreement, SoftBank will
leverage GEs Predix software platform to develop targeted applications for industries like shipping
and manufacturing. The partnership will create apps, which will empower companies to forecast
failures in advance and optimize supply chains, product enhancement and distribution inventory.
GE has been expanding its partnerships for the global delivery of this platform. For example,
Cisco has already decided to deploy Predix software inside its networking products, beginning with
a specialized computer router for harsh environments like oil fields. Intel has built a reference
architecture that integrates Intel processors with the GE software. Verizon and Vodafone provide a
broad range of wireless connectivity solutions, which are optimized for Industrial Internet solutions.
GE also has an alliance with AT&T, Inc., which connects its machines and assets through the
AT&T global network and highly secure cloud.
Under the SoftBank-GE alliance, SoftBank will be using GE's Predix App Factory for the
development of the applications which are expected to be released in 2015.
VISION FOR 2025: TSPs will act as the middle-man between energy, utility and industrial
technology giants, and technology vendors, using their vast, city-spanning network resources.
Fast moving TSPs will be able to harness large and stable installed bases by 2025. For example
Comcast and ADT together already share a large percentage of the total smart home security
market in the United States, by reselling white-label technology from smart home security
technology vendors.
16
SMART ARPU WITH

WEARABLE DEVICES
(CONSUMER IoT)
The Future Outlook: Sensors-as-a-Service
With wearables connected to the IoT, people will be able to
monitor, analyze and control everything important to them. For
example, a user will be able to receive a notification on their
smart watch when their child arrives home from school or if their
pet leaves their backyard. Sensors spell out the future consumer
in virtually every aspect of their lifestyle: power and utilities,
automotive,
hospitality,
healthcare,
industrial,
retail,
entertainment, and financial services. With everything from
refrigerators to parking spaces to houses falling under the sensor
forte, TSPs have the leading potential to tie in all of these
devices onto their networks and enable service provisioning
directly to consumers homes.
The Immersive Power of Consumer

Empowerment
The Internet and social media age have already brought
consumers empowerment in the form of power via
access to information. The Internet of Things extends
this,
but
fundamentally
facilitates
consumer
empowerment in the form of doing: controlling, allocating,
conserving, monitoring, and accomplishing. And this
defines the crucial push across the line from want to
need consumers, at least for the next 3-5 years, will
see IoT as a "nice to have" and not as a necessity. They
could, for instance, live without their garage door being
automated. If TSPs permeate into every aspect of a
consumers lifestyle, IoT can spell out a windfall with
consumers perceiving it as a necessity instead.
Industrial IoT vs Consumer IoT

If industrial IoT is more likely to be money in
the bank, consumer IoT has the potential to
define loyalty in the long run. While wearable
devices are the consumer face of the Internet
of Things, and where recognition of IoT
appears to begin, wearables are slowly
transitioning to enterprise and public sector
markets, too, for a higher revenue generating
potential. However, the wearable in its
essence is and will always be a consumer
technology. TSPs need to build their business
models in a two-tiered manner: to maximize
profit centers in the B2B space through
consumer-focused devices, and to focus their
innovation around the consumer. With the
latter, consumer identification and brand
loyalty to fast-moving IoT TSPs can spell
higher ARPUs and lower churn.

To counter commoditization, TSPs, unlike retailers
and device manufacturers, can leverage on two
unique advantages in B2C IoT: 1) they have a billing
relationship, and 2) they have a direct connection
into the home and work environments.
TSPs
can
increase
their focus
on
consumer
satisfaction by pairing wearables with analytics,

providing clearer in-roads into customer behavior,
enable faster customer service, marketing and care.
17
CASE STUDY
SMART ARPU WITH WEARABLE DEVICES
(CONSUMER IoT)
The Organizational Wearable: BPs Incorporation of Fitbit into Corporate
Wellness Goals
BP in 2013 provided 14,000 employees, 6,000 spouses, and 4,000 retirees with no-cost Fitbit
trackers as part of a wellness program that reduced the company's health care costs to below the
U.S. average growth rate of 6%. A growing number of companies are issuing tracking devices to
employees, giving employees a means of tracking their own fitness and allowing managers to
keep tabs on the health of the firm as a whole. BP, which has partnered with StayWell Health
Management to offer employees the use of a Fitbit tracker, measures the number of steps taken
every day, among other things. A million-step challenge is one of the many facets of the BP
Wellness Program, encouraging employees to make physical activity part of their daily routine in
order to improve their health and earn wellness points along the way. The idea: BP benefits from
a healthier workforce both in terms of daily productivity and also in the context of rising health care
premiums, and employees benefit from the health effects of regular activity. This directly ties in
with BP's incentive strategy: to be eligible for BP's premium health care plan option, each
employee must earn 1,000 wellness points during the course of the year.
VISION FOR 2025: The telecommunications opportunity in the wear-ables market is huge; global
enterprises are already making devices such as the Fitbit an integral part of their corporate
strategy, capitalizing on employee wellness, retention and remuneration. When paired together
with central communications functions such as voice calls and data abilities, wearables will be a
natural line of business within the telecom value chain by 2025. However, by 2025, the level of
impact and certainty caused by this trend is lower than that of industrial IoT, as consumer
wearables are still not perceived as a necessity.
18
SOFTWARE DEFINED
EVERYTHING, PAY PER USE
(NO MORE CAPEX)
From the Sandbox to the Market
As the hype around SDN dies down, realistic implementations
are beginning to crop up in service provider and enterprise
networks with the gradual maturing of the technology. While it is
still to early for enterprises to embrace SDN with a rip-andreplace mentality, many are evaluating how to automate network
provisioning and gain the error-free efficiency that virtualization
engineers can hugely benefit from. Automation is emerging as
the most profitable and feasible use case, a logical next step in
the SDN migration journey. TSPs are also beginning to work with
OSS/BSS vendors to adapt their back-end architectures for the
service assurance and performance management capabilities
required by SDN networks.
Pricing Flexibility: SDNs BeginnerFriendly Pay-As-You-Go Approach

While SDN is still a maturing technology space, licensing
models are gradually being defined by vendors. A key
benefit that SDN offers is the ability to allow its customers
to pay per usage, easing service providers and
enterprises into the initial buy-in phase while it is still too
early for a mature implementation. Since initial capacity
requirements are usually low (and on a trial basis) and
may scale up as their maturity in this area grows;
customers benefit greatly from being able to pay as they
scale up instead of investing in a one-time SDN platform
now despite having fewer virtualize, production-ready use
cases.
Leaving Legacy Behind

SDN has, at its best, been primarily perceived
as a cost-savings initiative, instead of a
hugely revenue-generating initiative. This is
likely to be true in the short term, where initial
ROI will be in the form of cost-savings.
However, when implemented as a full-scale,
network-wide field-grade technology in the
long term, SDN offers multiple revenue
generating avenues. Key use cases for
revenue-generation opportunities with SDN
include: repurposing existing services with
SDN to lower prices and increase margins,
increasing time to market, and customizing
customer experiences and creation of SLAs
for separate customer tiers and premium
pricing (for instance, in the case of Wi-Fi,
SDN bandwidth can be controlled so premium
subscribers get the strongest bandwidth).

Empower networking staff to successfully educate
themselves on - and evaluate SDN, enabling a more
successful transition away from legacy networks.
Use convergent innovation to leverage on the
complementary
benefits
of
using
multiple
technologies for service creation and network

transformation: analytics, NFV,5G, IoT and SDN.
Evaluate vendors for long-term strategies to avoid
vendor lock-in.
19
CASE STUDY
SOFTWARE DEFINED EVERYTHING, PAY PER
USE (NO MORE CAPEX)
Deutsche Telekoms Software-Defined Migration to All-IP Next Generation
Networks
DT introduced TeraStream: an all-IP network that delivers triple-play and other services from the
cloud, as a model for next-generation operator networks. DT created this model to satisfy their
need to move to dramatically simplified networks to be able to match the Internet services giants,
particularly OTT players who have the advantage of being able to move very fast as they are
software-oriented. With TeraStream, DT aims to move to drastically simplified IP networks,
IP/optical integration and an infrastructure cloud model (carrier datacenters) that hosts all manner
of functions, applications and content.
The TeraStream model consists of a simplified IP backbone infrastructure supported by softwaredefined networking (SDN) and network functions virtualization (NFV) capabilities. DT's
fundamental decision at the start of this process was that it needed to break away from the
proprietary world that telcos have worked in for so long and build new networks on open standards
technology, not proprietary software. The ultimate goal is that the next-generation network will
become less of a burden and free up DT to focus on services, to be programming services,
instead of re-architecting the network and the OSS. DT has so far been testing out its TeraStream
model at Hrvatski Telekom, its regional operator in Croatia.
VISION FOR 2025: Tier 1 telecommunications incumbents are already in the fast-mover status in
terms of SDN technology, with a significant number of leading operators already running test
implementations of SDN. By 2025, SDN will be perceived as a competitive necessity, instead of a
mere innovative R&D venture, with SDN-enabled operators being able to provide a wider range of
competitive services and enhanced network qualities with lower CapEx.
20
CARRIERS REVENUE MODEL

IN 5G AGE
Balancing the Business Case
Carriers will inevitably be forced to have 5G networks in place in
order to remain competitive. Every carrier offers smartphones
and a data planwith this commonality, carriers will need to
leverage on their ability to provision superior network quality and
coverage to establish themselves as outright industry leaders
and consumer favorites. The inevitability of 5G by 2025 is
apparent; a large majority of Tier 1 and Tier 2 operators already
have concrete 5G roadmaps in place. This calls for a drastic
change in the current operator business model in order to derive
the true value of 5G: a call that plenty of operators do not want to
currently take, being content with their current 4G capabilities.
However, this underlines the crux of the issue: 5G will cease to
be perceived as a network transformation technology, and will be
most profitably utilized as a competitive leverage to provide
newer services and higher quality SLAs.
Building the Network of the Now to

Begin the Network of the Future
As mobile operators gear themselves up for 5G, many of
them are beginning to realize that they can no longer rely
on current network infrastructure to actually support 5G in
a way thats profitable. Case in point: rooftop base
stations. Why would a customer splurge on a 5G contract
and a 5G-ready smartphone, if they arent able to get
superfast download speeds? When connected to fiber
networks, small cells, for instance, can collectively deliver
up to Gigabytes per second of capacity, making entire
cities 5G ready in a cost effective way. Up until recently,
the size of small cell boxes prevented their widespread
use. The technology has since matured significantly and
is now more ready for roll-outs in operator environments.
Call for Cross-Sector Collaboration

The feasibility of a cost-optimal deployment of
5G depends on stronger collaboration
between TSPs and Internet Service Providers
(ISPs). TSPs are increasingly favoring
revenue-sharing model in order to offset the
high initial costs of 5G deployments and be
able to roll out capital-intensive 5G services.
With such a model, TSPs can competitively
protect their turf against ISPs such as Google
and YouTube, which benefit from fast internet
services but which do not contribute to their
construction costs. In contrast, telecom
operators are investing hundreds of millions
of dollars every year on capital expenditure.
Reinventing business models is the crucial
first step to 5G, with the possibility of crosssector collaborative models between media
firms, telecom operators, and internet firms.

TSPs need to identify and build 5G use cases around
new revenue opportunities that can seize market
share from other industries (the key reasons for the
profitability of 3G and 4G). For instance, AT&T, TMobile and Verizon have launched VoLTE in select
markets across the United States, combating growing
market share from OTT threats for VoIP revenue.
TSPs need to pre-plan for flat networks and 5G rollouts with complementary tools (SDN and NFV).
21
CASE STUDY
CARRIERS REVENUE MODEL IN 5G AGE
AT&Ts 5G Vision: Modelling the Future of the Wireless
AT&T is in the process of building it's 5G strategy. Their 5G roadmap includes not only high speed,
high bandwidth requirements that come with AT&T's LTE Advanced, but also the Internet of Things
requirements for low-powered low-data devices, ultra-long battery life plus dense capacity in urban
areas. AT&T recognizes that these requirements probably won't be handled with just one air
interface or one spectrum band, and plans to create a 5G-fuelled network of networks to handle
these requirements.
AT&T will still be using LTE Advanced along with things like Wi-Fi, potentially a low-powered
network, potentially a millimeter wave network that will add capacity in the millimeter wave band in
the 10+ Gig range. And then it will likely have SON HetNet capabilities to provide seamless
interoperability between those networks. 5G will also touch on contextual awareness. It will have
different requirements and no single air interface will provide all those user expectations across
the board. It will be a different definition from the 2G, 3G and 4G definitions.
AT&T's LTE Advanced is planned to be a big part of what 5G offers, as will Wi-Fi. Small cells,
DAS, SON capabilities that interface those will be a part of 5G. Antenna technologies like massive
MIMO that will give AT&T high capacity and spectral efficiency and venue locations, and AT&T
plans to deliver all those in a 5G scenario.
VISION FOR 2025: By 2025, 5G will be capitalized on less for providing high overall network
speeds and more about providing the services people need at the appropriate quality of service.
By 2025, billions of new devices with less predictable traffic patterns will join the network, including
cars, machine-to-machine (M2M) modules, video surveillance that requires 24-7 bandwidth, or
even a biohazard sensor that sends out tiny bits of data each day. Hence, by 2025, Operators will
be focusing on using 5G to match the right speed to the right application, which will define
operators competitive value propositions in the incoming IoT age.
22
NETWORK NEUTRALITY,
CARRIERS VS FREE RIDE
INNOVATOR
Short Term Struggle; Long Term Gains
Operators, while actively resisting net neutrality in the present,
can stand to indirectly benefit from it in the long run. If an
incumbent TSP could kill incipient or potential competition by
leveraging on biased network lays, that would kill both innovation
and competition. Innovation is what will create the data
revolution that the next level of telecom transformation heavily
requires. Digital cities, e-governance, financial inclusion, nextlevel advances in education and healthcare all these depend
on ubiquitous, high-speed broadband and innovation in the
universe of applications and services that can be accessed by
broadband. Net Neutrality underpins all this, and operators would
not necessarily benefit in the long run by thwarting this to focus
on short-term revenue.
Combating the OTT Threat

Net neutralitys purpose is centred around encouraging
internet innovation and content. However, it has the
domino effect of providing an unfair advantage to
incumbent OTT players over cash-strapped start-ups and
other innovators. For TSPs, a primary OTT threat comes
from the lack of regulatory restrictions around OTT
applications. While it is essential to have OTT
communication service providers brought under a
regulatory framework, OTT application services providers
such as Whatsapp and Skype, who are merely the end
users of the internet need not be brought under any
licensing/regulatory regime.
Carrier Strategy: Entering OTT

Grounds for Diversification
With network neutrality vastly favoring carriers
over OTT players, carriers are increasingly
going the OTT route themselves in order to
expand into profitable new revenue streams.
Service providers such as Verizon and Comcast
have been actively broadening their M&A activity
into the content delivery business. For example,
Verizon has acquired CDN provider EdgeCast,
which provides CDN services to the likes of
Twitter, Pinterest, and Hulu. Verizon had also
previously acquired digital media streaming
company UpLynk. Together, the two acquisitions
would strategically enable Verizon to provide for
more of an end-to-end offering around streaming
video. Such strategies form a feasible workaround for TSPs to navigate around the
bottlenecks presented by net neutrality.

TSPs need to effectively launch efforts in new service
streams such as IoT and security to offset short-term
revenue losses. Additionally, leverage on acquiring
and provisioning OTT services to form new revenue
streams, minimizing roadblocks due to net neutrality.
Counter the drawbacks of net neutrality to develop
revenue streams from new services. For example,
TSPs can develop telehealth services that would let
healthcare companies pay for priority delivery.
23
CASE STUDY
NETWORK NEUTRALITY, CARRIERS VS FREE
RIDE INNOVATOR
Netflix: From Underdog to Pay TV Challenger
Since Netflix launched its streaming service seven years ago, it has evolved to become more than
just an aggregator and distributor of other people's content and more of a programmer, which has
helped catch subscribers' attention with high-profile original programs such as "House of Cards"
and "Orange Is the New Black." Netflix has a wide range of partners who have continually helped
it develop into both a content aggregator and a provider of mass-appeal original content. Partners
IMAX and Weinstein Co., for instance, will produce "Crouching Tiger, Hidden Dragon: The Green
Legend" for 2015. Comedian Adam Sandler has signed a deal to make four feature films.
Dreamworks will produce 300-plus hours of programming for kids. Which such projects are likely
to increase overall costs, Netflix is seeing rapid progress as these initiative achieve returns on
their investment with a strongly growing subscriber base and increase cord-cutting or cord-shaving
from amongst its pay TV customers. Netflix models itself as a permanently flat-fee, commercialfree, unlimited viewing option, as opposed to having ad-supported or pay-per-view content. It
doesn't see itself as a generic video company that streams news, shorts, user-generated content,
music video or reality. Rather, it's "a movie and TV series network". Netflix is also unique in its
approach to customer service, customer care and user experience: for instance, it uses algorithm
technology to recognize personal choices its subscribers make -- such as turning off a show after
a few minutes or watching one over and over -- and tailors options for subscribers. This has
increasingly prompted rising demand for such tailored services from customers, particularly from
their existing communications service providers and pay TV operators.
VISION FOR 2025: By 2025, major telecommunications incumbents will either directly enter the
CDN business, or indirectly carve out a stake in the CDN landscape by strategic mergers and
acquisitions in this area. This will go directly head-to-head with independent local OTT vendors.
Customers, however, will have a strong incentive to choose operator-provided content (for
example, Shaw Communications success with its video-on-demand service, Shomi, in Canada)
due to their attractive pricing and bundling offers with existing communications offerings.
24
CUSTOMER CHURN MANAGEMENT

Telco Churn: The Constant Dilemma
Churn reduction strategies for telecommunications operators
have evolved through the years, especially as a result of new
advances such as the widespread usage of data analytics, and
the renewed focus on customer satisfaction and personalization.
One of the key indicators of a TSPs performance in its target
market is post-paid churn. In the United States, for instance,
3Q14 saw AT&T and Verizon with the best customer retention
among US telecom companies. They had a churn rate of 1%.
However, Sprint had the worst churn rate. Its churn rate was
~2.2%. AT&T attract customers to new subscription plans like
the Next program. Verizon has superior network performance
and has also improved retention by moving their customers to
new plans like EDGE. Sprint, on the other hand, is strategically
attempting to improve its churn rates by initiatives such as its
planned upgrade to a LTE network.
Analytics: The Customer

Personalization Catalyst
The importance of customer loyalty is increasingly
occupying center stage, especially since consumers now
have a plethora of traditional TSP as well as OTT
alternatives to choose from. It is important, hence, for
TSPs to focus their strategies beyond market capturing to
one of capturing value and providing personalized care.
The usage of customer data as a tool to provide
personalized recommendations, marketing and customer
care can be leveraged as a competitive tool. The ability to
capitalize on certain under utilized assets, for example
information generated within the network, will enable
CSPs to more effectively capture value and to monetize
their relationships with their customers.
Data-Driven Approach to the

Customer Lifetime Value
Customer lifetime value is the present value of
all future value generated by a subscriber during
the course of the business relationship with the
CSP. A holistic approach is needed to maximize
the value generated from this relationship;
Starting from prospecting and subscriber
acquisition to managing this relationship, and
finally to subscriber retention. CSPs have to first
identify the subscribers that they will like to
acquire, and having invested significantly to
acquire this subscriber will next need to identify
opportunities to growing the wallet share of each
subscriber. CSPs need to manage their
interactions with their subscribers to improve
customer experience and increase customer
loyalty so as to retain high value subscribers.

Prioritize a data-focussed approach to the launch of
new services, marketing and customer care with
targeted Go-To-Market and marketing strategies
based on internally collected subscriber usage data.
Recognize the impact of customer service and service
quality: with a large number of customers displaying
loyalty based on the highest service and network
performance they find, carriers need use analytics to
enable in smarter computing and increase in capacity
25
CASE STUDY
CUSTOMER CHURN MANAGEMENT
T-Mobiles Churn Rate Reduction Using Analytics
In order to fully use all of their data, T-Mobile USA decided to combine a lot of subscriber and
network data together among multiple databases and source systems. They used several tools to
store all the data, analyse it, search it and visualize it. Drilling down to the specifics of this
systems, churn rates are optimized by using a tribal customer model. This model is based on the
fact that there are people who have high influence on others due to their large social network and
who are well connected to different (online) groups. If one of these customers switches telecom
providers, it could cause a domino effect and lead others in his or her network to do the same. For
each of these customers, an additional metric called the Customer Lifetime Value (CLV) is
calculated, based on level of influence on other customers. This new CLV allowed T-Mobile USA to
determine to most valuable customers.
Next to that, the churn expectancy of a customer is based on three different analyses: billing
analysis, drop-call analysis, and sentiment analysis. These different analyses are combined into
an integrated single-view for customer care. This system, called Quick View, offers agents and
retail store associates multiple key indicators including the customer lifetime value in a splitsecond on one screen. Additional information regarding high-value subscribers is sent
automatically to the agent as well as customer-specific offers such as a new service plan.
This approach by T-Mobile caused a drop in monthly leaving customers. From almost 100,000
customers leaving in the first quarter in 2011, they managed to bring it down to 50,000 lost
customers in the 2nd quarter in 2011.
VISION FOR 2025: By 2025, leading CSPs will be treating data-enabled churn reduction as a key
operational tool rather than a sandbox-grade R&D effort. Consumer retention will be a key
strategic goal and KPI for big data analytics platforms, where consumer loyalty will be a defining
factor for customer care and targeted marketing initiatives.
26
INVESTING IN THE FUTURE

THE IMPORTANCE OF PARTNERS
The Many-Pronged Approach: Collaborative Reinvention
For an effective TSP transformation, collaboration is key to a successful transition. No TSP can do
it all by themselves. Its one thing to expand solution capability, its another to try to be all things to
all consumers and fail. Leading TSPs are forming strategic partnerships with solution vendors and
other service providers in order to collaborate with resource centers who bring areas of specialty
they dont have. More innovative TSPs are exploring partnerships with OTT vendors, too. Most
operators, having realized that the threat of OTTs will not be stopped by blocking their apps, or by
trying to stimulate usage of traditional services, believe that partnerships are the best way forward.
Partnering with OTTs should enable operators to stop being a mere delivery channel, and gain a
share of the revenue from apps and services which run over their networks. And with services in
the open market evolving fast, and consumer behavior shifting faster, partnering will enable
operators to formulate business models that are nimble, adaptable and mutually beneficial to all
parties.
With these collaborative models, TSPs gain the unique ability to converge products; a mash-up
approach of combining traditional communication products with innovative digital services and
content. For example, an operator could partner with a music streaming app that needs a new
channel to market. Such a collaboration would enable the developer and the operator to offer a
new, attractive price plan for the service, charged directly to the end customers phone bill. Such
collaborations would strongly aid TSPs in the eventual goal of becoming multi-stream content and
service aggregators, claiming a greater share of both the enterprise and customer wallet.
TSPs are divided in their approach to investing in the

future: a large number of Tier 2 and Tier 3 TSPs
traditionally prefer to be secondary responders, lying in
wait for larger incumbents to make the first moves into
new technologies that are traditionally perceived as
being riskier. However, leading TSPs are increasingly
investing more into their R&D efforts for sandbox trials
of SDN, Big Data platforms and 5G implementations.
There is a progressive shift in investments here, too.
Budgets are gradually being allocated to field and test
trials of new technologies outside of sandbox
environments, indicating improving risk-taker attitudes
towards actual deployments. This indicates a
significant divide in long term and short term profit
goals: while several TSPs have been eying short-terms
views so far, they are albeit gradually taking a more
big-picture view into the future of their service offerings
and profit-maximizing capabilities.
27
FINAL THOUGHTS
The Convergent Service Provider: An Emerging Reality
Todays telecommunications landscape is experiencing a tangible divide with operators either

positioning themselves as innovators or secondary responders.
While the former would benefit from eventual long term profit generation, the latter has the unique
advantage of stepping back to avoid risky lack of ROI. Currently, the line that divides these two
fields remains the perceived risk of investment. However, with rising urgency caused by shifting
consumer preferences and fast rising competitors, this line is being characterised more by
innovation than by investment risk.
TSPs who are fast movers into new network architecture, collaborative service provisioning and
entries into nascent markets such as B2B and B2C IoT are able to reap faster profits due to
improved time to market.
A crucial catalyst here is the consumer. While TSPs have traditionally constructed their service
portfolios over and around consumer needs, consumers now have significantly more decision
making power, prompting TSPs to provide more customer- focussed product, service, care
options. A multi-tiered approach here can serve a dual purpose: by leveraging the benefits of
collectively implemented technology tiers (analytics, SDN, virtualized service delivery, IoT-as-aService) TSPs can both, capture a larger chunk of the overall consumer and enterprise digital
lifestyle market, and displace competitors on their home turf.
The eventual reality of the telecommunications industry sees a high potential in the transformation
of the traditional TSP from a multi-play incumbent to an all-play digital leader. This evolution will, in
turn, be significantly dependent on TSPs strategic ability to evaluate the mutually dependent
synergies between the ten key trends highlighted in this whitepaper: Post-Voice strategies, Big
Data, collaborative National Security, SIM free opportunities, industrial and consumer IoT, SDN,
5G, Network Neutrality and customer churn.
28

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THE EMERGING

Copyright 2015 Frost & Sullivan. All rights reserved.

A. Introduction The Future of Telecommunications: A CEOs Perspective

C. Investing in the Future The Importance of Partners

THE EMERGING MEGATRENDS

Introduction The Future of

Agenda of C-Level Officers in the Telecommunications Industry

Survival in a PostVoice World

National Secure Service

Dealing with SIM

Smart ARPU with

THE EMERGING MEGATRENDS

Source: Frost & Sullivan

Key Agenda for Top Management Officer to

High Impact/Low Certainty

High Impact/High Certainty

*(1) Survival in a Post-Voice World

*(2) Big Data Transformation

*(9) Network Neutrality, Carriers vs Free ride Innovator

*(8) Carriers Revenue Model in 5G Age

*(10) Customer Churn Management

Overall Mean (3.4)

Low Impact/Low Certainty

Low Impact/High Certainty

Source: Frost & Sullivan

THE EMERGING MEGATRENDS

Introduction The Future of

Network transformation is rapidly being perceived as

THE EMERGING MEGATRENDS

Introduction The Future of

These parallel trends reflect one primary common

Convergent Services Propelling

Voice: The Telco Constant

Key Agenda for C-Level Officer

THE EMERGING MEGATRENDS

THE EMERGING MEGATRENDS

Monetizing Big Data Insights

Data in the B2B Field

Key Agenda for C-Level Officer

THE EMERGING MEGATRENDS

THE EMERGING MEGATRENDS

Security: The New Telecom

Key Agenda for C-Level Officer

THE EMERGING MEGATRENDS

THE EMERGING MEGATRENDS

DEALING WITH SIM

TSPs Still Have The Victors Turf

The Inevitability of a MultiDevice Future

Key Agenda for C-Level Officer

THE EMERGING MEGATRENDS

A Seismic Shift Towards B2B2B IoT

Source: Frost & Sullivan

The Challenge: Monetizing IoT

Key Agenda for C-Level Officer

THE EMERGING MEGATRENDS

THE EMERGING MEGATRENDS

SMART ARPU WITH

The Immersive Power of Consumer

Source: Frost & Sullivan

Industrial IoT vs Consumer IoT

Key Agenda for C-Level Officer

satisfaction by pairing wearables with analytics,

THE EMERGING MEGATRENDS