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WINNING IN THE DISRUPTION ERA FOR COMMUNICATIONS SERVICE PROVIDERS TRASH THE RULEBOOK BORIS MAURER TM Forum Digital Transformation World - May 2018 #NewAppliedNow
WINNING IN THE DISRUPTION ERA FOR COMMUNICATIONS SERVICE PROVIDERS
TRASH THE RULEBOOK
BORIS MAURER
TM Forum
Digital Transformation World -
May 2018 #NewAppliedNow
Copyright © 2018 Accenture. All rights reserved. 2
(67.0%)
(20 .0%)
(15.0%)
(12.3%)(10 .9%)(10 .2%)
(8.3%)
(2.2%)(0 .7%)
2.8%3.2%3.5%
6.3%8.6%9.7%10 .8%
15.0%23.2%24.1%
(23.4%)(20 .6%)
(15.8%)
(14.2%)(13.0%)
(7.6%)(5.8%)(5.0%)
(2.8%)
(0 .3%)
(61.8%)(51.6%)
(46.6%)(29.1%)
(18.3%)
(8.4%)
(2.9%)
Ø -10.2%
Telstra
MTN
BT
VEONKDDI
Vodafone
Swisscom
Deutsche TelekomLiberty
Iliad SA
NTT
Bharti Airtel
Orange
China Mobile
Telia
China Telecom
Hellenic
Telephone and Data Systems
Comcast
Singapore Telecom
CenturyLink
TELUS
KT Corp
Telefónica
SK Telecom
Telenor
SoftBank
PTTTelecom Italia
AT&T
Verizon
WindstreamBCE
América MóvilEmirates Telecom
KPN
Future Value Change =[(avg 2015-2017 FV) - (avg 2013-2015 FV)] / [2012-2017 avg Invested Capital]
CSP Future Value Erosion 2012-2017
0
200
400
600
800
1,000
1,200
1,400
2012 2013 2014 2015 2016
Disruptive investments in options to ensure high future value
Current valueFuture value
Disruptor Future Value Accretion 2012-2016
En
terp
rise
Va
lue
$B
Source : Company reports, Accenture Analysis
INVESTOR OPTIMISM HAS WANED WHILE DISRUPTORS HAVE SEIZED THE FUTURE
INCREASING INVESTMENT IN THE PIPE HAS LED TO DECLINING PERFORMANCE
Copyright © 2018 Accenture. All rights reserved. 3
14%
15%
16%
17%
18%
19%
20%
2011 2012 2013 2014 2015 2016 Q3 2017(TTM)
EBITA Margin
Rising investment levels have yielded lower returns… And marginal returns have declined
13%
14%
15%
16%
17%
2011 2012 2013 2014 2015 2016 Q3 2017(TTM)
Capex / Revenue Pre-Tax ROIC
Source : Company reports, Accenture Analysis
TELECOM COMPANIES ARE LAGGING IN READINESS FOR DATA-DRIVEN TECH CULTURE
Copyright © 2018 Accenture. All rights reserved. 4Source: LinkedIn, Accenture Analysis
Amazon
Netflix
AT&T
Verizon
Telefónica
Deutsche Telekom
Time Warner
Orange
Telecom Italia
T-Mobile
B…
Sprint
CenturyLink
BCE
0%
5%
10%
15%
20%
25%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
% O
F W
OR
KF
OR
CE
W/A
NA
LY
TIC
S S
KIL
L
% OF WORKFORCE IN ENGINEERING
14% OF TELCO WORKFORCE WITH ENGINEERING AND/OR ANALYTICS SKILLS
COMPARED TO 53% FOR DISRUPTORS
CSPS RISK MISSING FUTURE GROWTH OPPORTUNITIES FROM RAPID ADOPTION OF NEW DIGITAL SERVICES IN BOTH B2C AND B2B
Copyright © 2018 Accenture. All rights reserved. 5
While the overall industry is growing, CSPs are predominantly caught in the stagnating traditional core.
578817
2020*2016
307598
2020*2016
869 951
2020*2016
833 953
2020*2016
515 510
2020*2016
THE
TRADITIONAL
CORE
THE NEW:
DIGITAL/CLOUD
IT COMMS
B2BB2C
In 2020 addressable market potential; Gartner: Market Opportunity Map for Communications Service Providers, Worldwide
(February2016); 2016–21, Nov 2016, incl Q4 2016 updates; Accenture Analysis.
REVENUES (€BN)
+9%
+2%
+18%
+3%
0%
PICK YOUR PLAYNetwork Innovator, Ecosystem
Player? We believe there are four
scenarios emerging for CSPs to scale new growth models.
Copyright © 2018 Accenture. All rights reserved.#NewAppliedNow
TELCO EVOLUTION INTO ECO-SYSTEM ORCHESTRATORS
Copyright © 2018 Accenture. All rights reserved. 7
MULTI-SIDED PLATFORM
MODEL
CONNECTED INDUSTRY
ORCHESTRATOR
VERTICALLY INTEGRATED
SERVICE PROVIDER
DIGITAL MOBILE
ONLY ATTACKER
Establish cloud-platform business
enriched by OTT/industry partners
Monetizing core with digital services and
customer interactions
Monetizing core with differentiated
services / content bundles
Managing intelligent, open,
self-service digital networks
SCENARIO DESCRIPTION
CUSTOMER BASED ECO
SYSTEM PLAY
INFRASTRUCTURE-BASED
NETWORK PLAY
CO
NT
INU
UM
OF
OP
TIO
NS
LONG TERM PLAY
LONG TERM PLAY
SC
AL
E T
HE
NE
W
CSPS CAN MONETIZE THE ECO-SYSTEM BY EITHER PROVIDING SERVICES DIRECTLY TO CUSTOMERS OR ENABLING PARTNERS
Copyright © 2018 Accenture. All rights reserved. 8
QUALITY OF SERVICE | SECURITY IDENTITY MANAGEMENT | PROXIMITY
ENTERPRISE
VALUE CREATION VIA ECO-SYSTEM ENABLEMENT
VALUE CREATION VIA ECO-SYSTEM SERVICES
CORE ECOSYSTEM SERVICES
Security & Authentication,
e.g. make edge devices
trust anchors
VALUE-ADDED SERVICES & ECOSYSTEM SUPPORT
Supply & Demand
Matching, e.g. B2B
market places
Create Interoperability,
e.g. data exchange across
verticals along the value chain
Service Integration Mgmt,
e.g. for E2E traceability
across various data sources
Collaboration Tools and
transaction engines, e.g.
open source & crowd dev
Remote Management,
e.g. service components of
engines without touching
Predictive analytics, e.g.
predictive maintenance &
demand simulation
Immersive reality and
simulation, e.g. ubiquitous
AR/VR enhanced support
Services
direct to B2X
customers
Application Software Provisioning:
Development of problem-driven software
applications (e.g. matching)
Network Provisioning: Eco-system value
creation through the enablement of data
exchange by provision of network bandwidth
(e.g. DTAG, Telefonica & BT)
Professional Service Provisioning:
Deployment and integration services, consulting
services, and support & maintenance services
(e.g. Telco PS & Accenture)
Platform Provisioning & Operations:
Eco-system value creation through the provision,
maintenance and support of a cloud-based
platform (e.g. Microsoft, IBM & Accenture)
Enabling
B2B2X
partners
MOBILITY
HOME
THE OPERATING MODEL MUST SUPPORT ONBOARDING AND CULTIVATING DIGITAL SERVICE PROVIDERS
Telephony
Internet
TELCO
Cloud &
Online
Data
Security
TV
Engagement
Industrial
IoT
Billing as a
Service
Messaging
Payment
(NFC)
Wholesale
TV
TV Mobile
Health
Connected
HomeIn-home
network
Digital
Assistant
Retail
Stores
Content
Subscriptio
nsRouter
SIM-cardDirect
access to
the Home
Mobile
Phone
Managed
Workplace
TV/STB
IoT
network
SERVICES
CONTROL POINTS
COUPLETO ECO-SYSTEM
DECOUPLE FROMECO-SYSTEM
ORCHESTRATOR EMERGING NEWPRODUCTS & SERVICES
Copyright © 2018 Accenture. All rights reserved. 9
POLICY-DRIVEN NETWORKING & MEC ALLOW CSP’S TO CONQUER CRITICAL CONTROL POINTS
Copyright © 2018 Accenture. All rights reserved. 10
REGIONAL NETWORKS / COLO / ETHERNET BACKBONECORPORATE OFFICES
MobileNetwork
MOBILE NETWORKS
Regional Network
MPLS / IP VPN/SD - WAN
Broadband / Internet
LTE
PRIVATE CLOUD
PUBLIC CLOUD
IOT
EDGE COMPUTING
Managed LAN
Managed Wi-Fi
CLOUD
Key Policy Alignment Points –CSP specific
Key Policy Alignment Points –Enterprise on prem workloads
Key Policy Alignment Points –Enterprise off prem workloads
TECHNOLOGY REVOLUTION WITH 5G DRIVEN BY DATA IN A DISTRIBUTED CLOUD TOPOLOGY
Copyright © 2018 Accenture. All rights reserved. 11
14%
0% 20% 40% 60% 80% 100%
23%
69%BUSINESSES
CONSUMERS
GOVERNMENT
Most Important Somewhat Important Neutral
Not Very Important Least Important
10%
75%
2017 2022
X7.5
New capabilities required in distributed computing
architectures, remote management and edge security
% OF ENTERPRISE-GENERATED DATA
processed outside traditional data center or cloud
TELCOS INCREMENTAL REVENUE POTENTIAL
from 5G
Source: GSMA, Global Mobile Trends 2017, September 2017
PAST FUTUREPRESENT
Services and Connectivity strictly
bundled through a closed Network
Technology
Limited competition, strongly
dominated by Network Incumbents
High barriers for new entrants
Connectivity
Marketplace
OTT players compete with Telcos to
sell content/digital services over the
IP Layer. Limited/zero cooperation
with operators
Operators strategies not well defined,
struggling to define how compete on
services, while monetizing the physical
network asset
Services
Transaction
Based
Operators newly a key actor of the digital
marketplace providing:
• Premium infrastructure (Network Slicing, MEC)
• Common platform/enablers for Industry X.0
Enhance cooperation with partners through the
Telco open-platform:
• Content/Media (OTT players)
• Home service providers (home automation,
home security etc.)
• Public administrations (e-Health, Smart
cities etc.)
• Industry X.0 vertical partners
Hard-Bundle of
Services and
Connectivity
Connectivity
Fixed Fee
(Connectivity)
Pay-per-Use
(Services) Fixed
Fee
VALUE CREATION IS EVOLVING FROM COMPETITION WITH OTT TO A COMPLEMENTARY MODEL
Copyright © 2018 Accenture. All rights reserved. 12
Copyright © 2018 Accenture. All rights reserved. 13
Service Service
Fee
FROMstand alone, one-product
service provider
TOone to many, diversified communication
services enriched with eco-system
originated offers
Service Access
Recurring charges (per service
and contract commitment)
Number of transactions
Value per transaction
Service Service
Fee
Partner
Ecosystem
Marketplace
Key Value
Elements
CREATING MARKET VALUE IS SHIFTINGTO A TRANSACTION BASED REVENUE MODEL
STEPFORWARDIt’s time to lead or lose.
Copyright © 2018 Accenture. All rights reserved.
#NewAppliedNow
