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Mobile Applications: OTT Threats & Opportunities

PwC Strategy. Mobile Applications: OTT Threats & Opportunities. Andicom Cartagena. Draft. September 6th. Section 1. Preliminary considerations about OTT. Mobile Applications: OTT Threats & Opportunities • Andicom. 1. Agenda. Page. Section 1 – Preliminary considerations about OTT.

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Mobile Applications: OTT Threats & Opportunities

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  1. PwC Strategy Mobile Applications: OTT Threats & Opportunities Andicom Cartagena Draft September 6th

  2. Section 1 Preliminary considerations about OTT Mobile Applications: OTT Threats & Opportunities • Andicom 1

  3. Agenda Page

  4. Section 1 – Preliminary considerations about OTT OTT is Internet • Definition of OTT: unmanaged distribution of content over IP (i.e. Internet with the exception of IPTV) • So OTT is the core of Internet but it became a hot topic since Telecom revenues are slightly increasing / decreasing • The development of Online video and the increase in the demand for bandwidth • Operators failure to develop revenues beyond their core access and voice businesses • The nascent competition between OTT players and operators for VoDand TV services Mobile Applications: OTT Threats & Opportunities • Andicom 3

  5. Section 1 – Preliminary considerations about OTT OTT – Be careful with the figures (and even more with the forecasts) OTT vs. Operators electronic video sales (in US$m) OTT an US specificity? Source: PwC Media Outlook Mobile Applications: OTT Threats & Opportunities • Andicom 4

  6. Section 1 – Preliminary considerations about OTT Frontiers between fixed and mobile Internet access are blurring but have no disappeared • There are 2 reasons while differences are still existing between fixed and mobile Internet access • The mobile bandwidth is still scarce and controlled by mobile operators • The mobile advertising opportunity is still uncertain • The role of applications • The mobile specificity Global mobile apps & advertising revenues Average CPM (USA, 2011, in US$) Source: KPCB, PwC analysis Mobile Applications: OTT Threats & Opportunities • Andicom 5

  7. Section 2 Opportunity or threat? Mobile Applications: OTT Threats & Opportunities • Andicom 6

  8. Section 2 – Opportunity or threat? The OTT challenge is yet to come in Latin America – how to make customer pay for the video • Latin America consumer traffic evolution (in PB per month) 780 6503 Source: Cisco, PwC analysis Mobile Applications: OTT Threats & Opportunities • Andicom 7

  9. Section 2 – Opportunity or threat? Tiered pricing: be careful what you wish for • Net neutrality is less of a debate in the mobile world as mobile spectrum is recognized as a scarce and expensive resource • Tiered pricing is already a reality in many markets • But tiered pricing may lead to radical pricing changes for historical services Mobile Applications: OTT Threats & Opportunities • Andicom 8

  10. 35 Section 2 – Opportunity or threat? The real question is on Telecom operators innovation capability • Average European Telco Revenues [2000 = 100%] • Revenues in 2010 from innovations in last 5 years [EUR BN] Innovación Negocio Core Nota: Telco Europea= media de Deutsche Telekom, France Telecom y Telefónica Source: Annual reports, JP Morgan; Merrill Lynch; Mobile Applications: OTT Threats & Opportunities • Andicom 9

  11. Section 2 – Opportunity or threat? Operators have a terrible track record in terms of innovation and of launching Internet services • Since the early days of Internet, operators tried to develop Internet services • Most of the projects failed not because of • Bad ideas • Lack of financing • Poor R&D capabilities • Access to customers or distribution capabilities • Lack of billing capability ... but because of • Vision • Global reach • Management Many failures Successes came from pure players Mobile Applications: OTT Threats & Opportunities • Andicom 10

  12. Section 2 – Opportunity or threat? Telecom operators will have to find growth relays to counterbalance the growing commoditization of their historical services • BANKING • M-payment • Mobile banking • HEALTH • Fitness Monitoring Solutions • Elderly and handicapped people support • ENERGY • Smart Metering • Smart Grid • SECURITY • IC Security • Security@Home • Data harbour • E-Mobility services • DIGITAL ADVERTISING • Mobile Advertising • Online Advertising • In-Game Advertising • HOME • Remote management • Smart Home • Never alone Service • ICT Support • Interactive Advertising • Digital Signage CLOSE TO CORE BUSINESS • CLOUD SERVICES • SaaS, IaaS, PaaS • Private Cloud • Public Cloud • MOBILITY • M-Payment • Mobile Content Enabling • Location services • (IP)TV & Mobile TV • ENTERTAINMENT • Interactive & WebTV • VoD • Producción TV • Games & Gambling • INTERNET • Portals • E-Commerce • Social networks • Online Banking • Music & Radio Online • News & E-Books • E-Learning • Translatio n services • QoS Upload • Online Data storage Mobile Applications: OTT Threats & Opportunities • Andicom 11

  13. Section 2 – Opportunity or threat? Thank you Vincent TEULADE vincent.teulade@fr.pwc.com +33 1 56 57 89 58 +33 6 82 66 92 49 Mobile Applications: OTT Threats & Opportunities • Andicom 12

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