20061123 Mobilebusiness Keynote Final (1)

8/13/2019 20061123 Mobilebusiness Keynote Final (1)

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E-Business-CommunityVienna, 23 November 2006

Trends in Mobile Data Business

DI Michael Bartz (Sector Manager Capgemini Telecom & Media, Eastern Europe)[email protected], Mobile +43-(0)664-621 86 18


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2006 Capgemini - All rights reserved20061123_MOBILEBUSINESS_KEYNOTE_FINAL.PPT

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Increasing mobility of the workforce will boost mobile service usage inenterprisesNumb er of Mobi le Workers

Source: Capgemini TME Strategy Lab Analysis. DTC enterprise research, UK Labour Force Survey, EU Statistics 2004. IDC, Mobilit y in the U.K. & Ireland - Past the Tipping Point?, April2005. www.itweb.co.za, Managing your mobile workforce, 7 January 2004. www.palmsource, Enterprise adoption of handhelds an d s martphones, 2003. IDC, Usage of mobile operatorsservices by business- an end user survey, July 2004. NetworkWorld, NW500 survey: More handheld devices, please, 7 July 2005. Note: Forrester defines mobile workers as those that spend at least 50% of their time away from their desks.

The proportion of mobile enterprise workforce isincreasing: The number of mobile employees in Western Europe is

expected to reach 80 million by 2007

Enterprises are increasingly feeling the need to provideconnectivity to their mobile workforce: In a survey of 500 IT executives in the U.S over 70% said

that they would invest in laptops, Blackberry and PDAs toequip employees to connect to business applicationsremotely

Number of Mobile Workersin Western Europe (Million)

52

80

2004 2007


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Within the business segment mobile e-mail services will provide the majorgrowth potential

Source: Capgemini TME Strategy Lab Analysis. IBM Business Consulting Services, Upwardly Mobile, July 2004. IDC Research, E nte rprise Mobility Solutions: Vertical Market Analyses,November 2004.Note: The global mobile enterprise applications market is 12.7bn in 2004 with software and services accounting for 40%. EMEA share is 26%. Services/communication revenue going to themobile operator is assumed to be 5% in 2004 which will increase to 20% in 2007.

Mobile operators are mainly network access providers toenterprises currently:

Enterprises rely on application vendors such as IBM andMicrosoft for development and implementation of mobileenterprise applications

Mobile networks are used for Internet or SMS connectivityover which business users access various corporateapplications

But they are beginning to get actively involved inproviding mobile e-mail solutions to enterprises:

Operators offer standardised e-mail solutions to implementmobile e-mail access over various mechanisms such asSMS, Internet, Blackberry devices

Mobile e-mail will continue to drive the corporate mobiledata revenues in the medium term:

Enterprises will broaden the base of employees with

remote and mobile e-mail access E-mail services attuned to SME requirements will drive

revenues

Corporate Mobile Data Revenue in WesternEurope ( billion)

83%

55%

15%

37%

8%2%

2004 2007E

3,0 5,2

BasicConnectivity(Internet + SMS)

Mobile E-Mail

Enterprise Applications

CAGR 2004-2007E

Enterprise Applications

88%

Mobile Email 64%

Basic Connectivity 6%

Corp orate Mobile Data Revenues


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Machine-to-machine (M2M) applications represent an opportunity foroperators to develop and sell standardised solutionsEnterpr ise M2M appl ica t ions available on the c e l lu lar ne twork

Source: Capgemini TME Strategy Lab Analysis. Metering Internation, The GSM/GPRS Industry Moves Into Metering. Qualcomm webs ite. Operator websites.

AutomaticMeterReading

(AMR)

Fleet

management

Point of Sale(POS)

This service enables merchants to process credit card payments wirelessly and is of interest to the bankingindustry

The portability of the solution increases scope for redefining point-of-sale location e.g. couriers, taxis are someof the possible new locations for processing payments by credit cards

Reliance, India has launched a wireless POS service over its CDMA 1xRTT network where merchants canconnect their POS terminals through a CDMA mobile phone (in place of the standard PSTN line) to connect tothe banks network

These services enable fleet location tracking, arrival status updates, vehicle diagnostic data such as fuel status,delays/stops

O2 UK offers the service under PinPoint TRACKER which allows enterprises to constantly track their vehicles'movements

AMR enables remote energy meter reading over the wireless network saving manpower cost while improving

forecast of demand and supply based on periodic monitoring of consumption NESA, Denmarks largest power distributor with over 550,000 customers, is introducing a large -scale AMRsystem relying entirely on GSM mobile communication

Wind in Italy provides between 200,000 and 300,000 GSM data connections for the operation of Enelsnationwide AMR system

Monitoringand

Surveillance

Remote monitoring and surveillance systems enable enterprises to keep track of status and progress ofprojects real time and also manage the security of property and assets

NTT DoCoMo has implemented remote monitoring for Shimizu Corporation, a construction company in Japan,where a camera on the construction site broadcasts the progress of the project to FOMA visual terminals thatcan also be used to control the camera remotely, rotating it through 340 and zooming in and out


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Mobile TV &Video

Mobile Music& Ring Tones

MobileE-Mail &

Messaging

The data revolution is happening in the mobile consumer marketExamples f rom the mo bi le cons um er market

Already in 2004 UK ringtonesales reached 174m ,

216% more than the 80mspent on CD singles. 3,75 million UK customers

now buy over one millionaudio tracks and music

videos per month

Samsung presented10 mega pixel

cameraphone in March2006 (SCH-B600)

France Telecom targets

EUR 400 million by 2008purely from content services

RIMs BlackBerry isincreasingly challenged by new

market entrants : Microsoft,Nokia, Motorola, etc.

Six months after launch, 50%of Orange Frances 3G users

were watching TV on theirmobile

Trendsetter iPod goes mobile: Apple plans launch of iPhone


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Top ten operatorsby data as a percentage of revenue (2005)

Pioneering operators are already generating significant revenue streamsfrom data servicesIncom e f rom m obi le da ta

25%

25%

26%

26%

28%

39%

39%

43%

48%

0% 10% 20% 30% 40% 50% 60%

Indonesia - Indosat

UK - O2

Japan - NTT DoCoMo

Italy - H3G

Korea - SK Telecom

Indonesia - Telkomsel

Philippines - Smart

Philippines - Globe

UK - Hutchison 3G

Source: Informa Telecoms & Media (2005)

Vodafone non-messaging data ARPU(June 2003 June 2005)


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At the individual service level, mobile email and video are the mostpromising

Source: Credit Suisse First Boston, European mobile data trends, April 2005; Capgemini TME Strategy Lab analysis.

SMS

Email

Video

m-Commerce

MMS PTTInformationGames

Internet WAP

Music

IM

Gambling

Ringtone

Graphics

-0,2

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

-40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 160%

M o n

t h l y A R P U

( 2 0 0 9 )

( )

PossibleWinners

PotentialStars

Also

Ran's

Compound Annual Growth Rate % (2004-2009)

Bubble size correlates to2009 data revenues

Market Potent ia l of Con sum er Data Services in Western Euro pe


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Increasing device penetration will help mobile email deliver substantialdata growth but revenues are to pick up pace only from 2008 onwardsMob ile Email

CAGR (2005-2009) = 178%

1 9 55200

556

1.351

3.279

36%

56%

72%

82%

88%92% 95%

2003 2004 2005 2006 2007 2008 2009

Revenue

Email-supported device penetration

Source: Credit Suisse First Boston, European mobile data trends, January 2005; Forrester, Mobile Messaging ForecastEurope 2005- 2010, March 2005; WMRC Daily Analysis, Nokia, RIM Take Aim at Mobile Email, 9 September 2004; WMRCDaily Analysis, Vodafone to Launch Push Email Service, 22 April 2005; WMRC Daily Analysis, Microsoft Licenses EmailTechnology to Symbian, 22 March 2005; Capgemini TME Strategy Strategy Lab Analysis.

Email-supported device penetration is one of the primarydrivers of consumer mobile email revenues: Currently, approx. 70-80% mobile subscribers have an email

client on their phone and this will rise to more than 90% by2009

However, many consumers are unaware that their handsetspossess such capability

European operators are developing strategies to position

mobile email as a prime data revenue driver

Software and device players recognise the potential ofmobile email: Microsoft, licensed its email technology to rival Symbian in

March 2005, enabling Symbian devices to send and receiveemails from accounts managed by MS Exchange

GOOGLE is introducing a custom version of its Gmail emailservice that can run on any phone with Java software

Nokia offers Intellisync Wireless Email for a wide range ofdevices

Motorola has announced it plans to acquire mobile emailprovider Good Technology

Mobile Email Revenue and Device Penetration,Western Europe, 2003-2009, million, %


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Operators and music labels view mobile music as an attractive businessand some players have witnessed some success so farMobile Music

Source: Capgemini TME Strategy Lab analysis, Forrester European Music Download Forecast: 2006 to 2011

Mobile operators like Vodafone are enjoying some degree of

success with mobile music in Western Europe: Music services represent about 10% of Orange UKs data revenues,

with subscribers purchasing as many Orange music downloads as CDsingles

In Spain nearly 10% have downloaded music to their phones so faralready by today (EU-5 average = 5%)

In its first year Sony Ericsson has sold worldwide 15 million devices ofits new Walkman music handsets which has potential to overtake theiPod

Apple prepares counter measures with iPhone (mobile Phone & iPod) Market successes in Asian markets have also been witnessed,especially in countries where migration to 3G has been followed bya significant increase in data usage: Chinas mobile music market grew from EUR 150mn in 2004 to EUR

250mn in 2005Music labels are also interested in mobile music as they can gethigher share of the revenues: Music labels can get 40% of the revenues from full-track music

downloads vs. 12% revenue share for polyphonic ringtones Nokia just finalized its $60 million acquisition of U.S.-based digital

music distributor Loudeye Corp. including music rightsHowever, revenue sharing between the telcos and the musiccompanies results in razor thin margins for these services

European Legal Music Downloads,

2005-2011, million

674

483

269

121

4191

2007 2008

2009 2010

2011

+196%

2005 2006

Sony EricssonW810i Walkman


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Ringtones will continue to dominate revenues in personalisation servicesMobile Person al isa t ion

Source: Coolringtones.blogspot.com, Ringtone sates by type, 7 May 2005. Newsweek web, Dial a song, 4 March 2005. EMI grou p, EMI Musics Digital Strategy, 1 July 2004. International Herald, Wireless:Replacing the brrring with cash -earning tunes, 18 October 2004. MoCoNews, Mobile music best practices from Japan and Korea, 7 March 2005. Moconews, Ringing back the money, 23 September 2004. KTHNumerical analysis and computer science, Digital Music Distribution and the Market needs, 2005. Total Telecom, Ringbacks s et to add mobile ARPU, 4 April 2005. Dutch News Digest, Dutch ringtones market valueat up to 30 million euros, 14 December 2004; New Media Age, Rising ringtone users will outweigh price drops, 10 March 2005 .

2.329

5.216316

1.817

2003 2008

Mobile Graphics

Ringtones

CAGR

42%

17.5%2.645

7.033

Mobile Personalisation Revenues, Worldwide,2003-2008, million

2004 UK ringtone sales reached 174m, 216% more than the 80m spent on CD singles: In the US, ringtones sales are also now twice CD salesRingtones are currently the largest contributors to mobilecontent revenues and innovative ringtone variations are beingdevised to hold user interest in the service: Ring tones currently account 34% of the mobile content revenues Ring tone market has been largely dominated by the music chart

and is expected to continueMusic labels and media houses are entering this market: Ringtones are set to become the number one

marketing tool for record companies and artists tolaunch CD albums

Sony has partnered with Sony Ericsson to bringexclusive James Bond Casino Royale mobiletruetones, ringtones, clips and even handsets

However, current ringtone prices in Europe are

unsustainable and analyst expects prices to fallby 50% by 2009

End use r s a r e cu r r en t ly w i l l i ng to spend m ore money on r ing tones t han on m us ic dow nloads .


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Mobile TV differs from mobile video in terms of technology and contentFur ther d i rec t ions o f Mobi le TV & Video

Mobile TV / Broadcasting Mobile Video (on Demand) Web 2.0Definition Users can watch the same

standard TV program which isprimarily broadcasted forcommon TV sets

User can download/streamvideo clips (news, sports, fun,etc) on demand

User can create, share and viewown content (audio, photo,video) using online portals

Example Orange, France More than 50 TV channels

offered The average time spend for

watching TV is 120 minutes peruser per month

Sonera, Finland 90% of the new 3G customers

have subscribedto Mobile-TV service

AOL handy videos (download) Music videos, funny, clipsT-Mobiles t.zone (stream) Fashion TV, movie trailersVodafone live! Music video, trailer,

entertainnment

youtube.com Upload and share your videos

via the mobile phone Verizon plans to partner with

youtube to provide videostreams to their mobilecustomers

Outlook Mobile TV is starting to fly withmore and more operatorsoffering this service

Customized content is evolving

High content suitability formobile phone users in terms ofduration and content

Still some time required untilattractive service offerings areexisting (e.g. video on demand)

Still time to go until massmarket availability

The mobile phone can becomea key tool in the furtherdevelopment of Web 2.0


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Mobile TV and video is forecasted to double annually during the next fewyearsMob ile Video & TV

Mobile Video and TV Revenues, 2006-2009,Western Europe, Million

Source: Gartner, How to stimulate interest in Mobile Video, October 2005; IDC, Western Europe Mobile Voice and Data Foreca sts 2Q05, October 2005

471

201

1.056

640

401

138

Video

TV

5421

159

2006

456

2007

842

2008

1.528

2009

+112%

Mobile video and TV services will be adopted by at least10% of wireless subscribers in 2009 Mobile TV subscribers in Korea to hit 1 million in

December 2006 with subscription costs less than $20 permonth (based on DMB)

Industry broadcasting standard still needs to evolve toservice large subscriber numbers

Existing 3G technology already provides attractive TV &video services as well as affordable handsets for first waveof interested subscribers

In case of significant user growth the current TV streamingvia standard cellular networks (3G) will create a bandwidthbottle neck

Still unclear which mobile broadcast technology will be theindustry standard (DMB, DVB-H, MediaFlo)


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Users across Europe are indicating a strong interest and a willingness topay for the mobile TV serviceMob ile TV Demand

Prospective users have come up with interestinguser occasions for watching mobile TV

60,8

33,9

28,9

28,9

27,8

21,1

16,1

13,3

33,9

70,6While waiting in a transportation

In a transportation

In the office or at school

On a trip

While walking

In a park

In a fast food restaurant

In a restaurant

In your own room

In a rest room

Source: Capgemini TME Strategy Lab. DigiTAG, Television on a handheld receiver broadcasting with DVB-H, 2005, IPDatacast, BMCO Project Berlin. Company Websites

40-60% of European mobile phone users are interestedin receiving TV on their mobile phone Current usage patterns show that mobile TV is especially

watched during off-peak hours (i.e. morning and noon)The European customer is ready to pay around 10 permonth to use TV on mobile In Berlin, viewers indicate a willingness to pay 8-12 per

month to access 6-8 different television programs


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In parallel the Web 2.0 revolution opens up new business opportunitiesnot only for internet players but also for telecom operators

New online portals growing from day today (e.g. youtube.com,blogger.com,wikipedia.org)

70,000 new blogs perday

Online portals look fornew communicationchannels to share andcrow their content (e.g.content updatethrough mobilehandsets)

3 UK SeeMe TV :

Create and sharevideos with yourmobile. You'll earnmoney every timesomeone watchesyour video on theirhandset. Result: 1 mndown-loads a month

Web 2 .0 as a new bus iness op por tun i ty & chal lenge


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In parallel the Web 2.0 revolution opens up new business opportunitiesnot only for internet players but also for telecom operators

New online portals growing from day today (e.g.youtube.com,blogger.com,

wikipedia.org)70,000 new blogs perday

Online portals look fornew communicationchannels to shareand crow theircontent (e.g. contentupdate throughmobile handsets)

Web 2 .0 as a new bus iness op por tun i ty & chal lenge


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Source: Global technology/ Internet Trends, Morgan Stanley, 9 January 2006; Global ad spend set to maintain steady growth , Carat, 6 September 2005; ABMFinancial Trend Report, JEGI Capital, 14 November 2005.

Media Usage vs. Ad Spending Ratios, US

US ad spendingCAGR 00 -04

In connection to this boom major shifts in ad spending can be observed More money is going to the internet and its players Mobile serv ices as adver t is ing channel

Ad spent behaviour follows changed media usagepatterns Strong internet usage of youth segment is already well

known In the meantime also significant internet usage of overall

population compared to other advertising media achieved US ad spending in internet reflects this trend and grows

+77% per year Leading brands make a rapid shift towards interactiveand personalized advertising Internet and also mobile devices provide ideal technical

conditions for implementation of interactive campaigns Coca-Cola, which spends $ 1.5 billion in advertising per

year on mobile marketing: We should be spending 50% ofour marketing budget [in mobile] within decades

43%

33%

21%

4%

71%

19%

7%4%

Newspapers/ Magazines

Internet

Radio

TV

8,7%21,5%

7,0%

77,5%

Relative media usageper day (Overall)

Relative media usageper day (Youth)


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CE v6.0 2006 Capgemini - All rights reserved20061123 MOBILEBUSINESS KEYNOTE FINAL PPT

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Operators face substantial challenges to keep track of the industry changeOperators challenges

Useracceptance

Financingthrough

advertisement

Contentprovisioning

BillingRights

management

Meeting the needs of dramatically changing

behaviour patterns (Brand new Capgeministudy available now) Create user interfaces and provide handsets

that meet user expectations, e.g. allowingintuitive use

Manage the new digitalmedia supply chain

Multi channel Multi standard Etc.

Obtain and managerelated digital rights foroffered content such as

TV, movies, sounds &music, logos, etc

Consider reshaping thebusiness model and tabinto the new fundingsource of advertising as

it is already commonpractice in the internetbusiness

Ensure accurate invoicing to thecustomer allowing flexible pricing

models (volume, event, packages,flat rates, etc) Master complex billing between

content provisioning and contentdistributing entities

This pr esentat ion is available on ht tp : / /ww w.apa.at /mult im edia/ebc/

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20061123 Mobilebusiness Keynote Final (1)

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