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Marc Jadoul May 2014
THREE CONSUMER MARKET TRENDS THAT ARE IMPACTING TELECOM INDUSTRY
WHILE HUGELY POPULAR, THE LINEAR TV CHANNEL MODEL IS RIPE FOR REPLACEMENT.
THE TREND HAS BEEN THAT MOBILE WAS WINNING. IT'S NOW WON.
IN ABOUT TEN YEARS WE MAY FIND OURSELVES WITH MAYBE TEN OF THESE DEVICES ON OUR BODY.
3
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THE TREND HAS
BEEN THAT MOBILE
WAS WINNING.
IT'S NOW WON.
Eric Schmidt Executive Chairman, Google
Source: http://mashable.com/2013/12/30/eric-schmidt-predictions-2014
3
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4
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MASLOW’S HIERARCHY REDEFINED
Source: http://www.simplypsychology.org/maslow.html
PSYCHOLOGICALfood, water, shelter, warmth, …
SAFETYsecurity, stability, safety
BELONGINGNESS & LOVEintimate relationships, friends
SELF-ESTEEMprestige & feeling of accomplishment
SELF-ACTUALIZATIONachieving one’s full
potential & creativity
5
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MOBILE DATA TRAFFIC KEEPS GROWING
Browsing
Music
Video
Games & Apps
Other
2013 2014 2015 2016 2017 2012
5,326
PB
21,500
PB
Source: Strategy Analytics, Handset Data Traffic (2013)
6
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DEMAND FOR (DENSE) WIRELESS ACCESS
IN PUBLIC PLACES IS RISING
Sports stadium
Train/bus station
Airport
Office
Hospital
Shopping mall
Convention center
High street
School
Hotel
Supermarket
Retail shop
Multi Dweller Units
House
0.0 0.1 0.2 0.3 0.4 0.5 0.6
Average Mb/s per 10m2
Source: Ruckus Wireless (2012)
7
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EVEN WITHIN THE HOME,
MOBILE MULTIMEDIA IS BECOMING PERVASIVE
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017
Outdoor mobile data usage Indoor mobile data usage
70%
80%
90%
100%
iPad iPhone Blackberry
% OF USE INDOORS
Source: Mobile Experts (2012), GigaOM (2012)
8
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SMARTPHONE AND TABLET VERSUS… EVERYTHING ELSE
Source: The Nielsen Company, 2012
25%
64%
10%
21%
65%
13%
25%
56%
11%
14%
72%
11%
3%
16%
64%
18%
26%
49%
22%
3%
12%
60%
25%
16%
56%
24%
3%
22%
50%
23%
13%
55%
30%
9%
56%
32%
3% Internet
Connected TV Smart Phone
Internet to TV Player
GPS Gaming Console
Portable Gaming Console
Portable Media Player
eBook NetBook Laptop PC Desktop PC
TABLETS ENHANCE
THESE DEVICES
TABLETS REPLACE
THESE DEVICES
Use device more Don’t use device Use device less Same device usage
9
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SMARTPHONES AND TABLETS
TEND TO PLAY DIFFERENT ROLES
67% 65%
53%
31%
74%
68%
51%
49% 75%
74%
65%
60%
58%
34%
22%
20%
Living room
Bedroom
Kitchen
Home office
While traveling
Car
Public trarnsport
Daily commute
Restaurant
Friend’s house
Outdoors
Work
Other
Library
School
In stores
Where do you access
the internet on your
SMARTPHONE ?
72% 63%
40%
26%
48%
18%
15%
9%
30%
28%
26%
20%
14%
12%
10%
8%
Living room
Bedroom
Kitchen
Home office
While traveling
Car
Public transport Daily
commute
Restaurant
Friend’s house
In stores
Where do you access
the internet on your
TABLET?
Outdoors
Work
Other
Library
School
Source: Forrester Research (2013)
10
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NEED FOR DIFFERENT ‘MIXES’ OF
MOBILITY, CAPACITY AND COVERAGE
Macro coverage Small cells & Wi-Fi
Mainly low bandwidth services
Often high bandwidth services
Full mobility Nomadic usage
11
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NOMADIC VIDEO IS SOARING WITH A 73% CAGR
200,000
160,000
120,000
80,000
40,000
0
180,000
140,000
100,000
60,000
20,000
2010 2011 2012 2013 2014 2015
Home video users (premium content)
Nomadic video users (premium content)
Mobile video users (premium content)
Source: The NPD Group (US, 2011)
13
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DEFINING THE IDEAL NETWORK FOR WIRELESS NOMADS
a wireless HetNet mixing 3G/4G
macro cells, small cells and Wi-Fi
automatic network discovery,
selection and authentication,
with seamless handover between
cellular and Wi-Fi access
a high-capacity, fiber-based mobile
backhaul and transport network
14
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14
Source: http://www.dezeen.com/2014/03/10/interview-fitbit-designer-gadi-amit-wearable-technology/
IN ABOUT TEN YEARS WE MAY FIND OURSELVES WITH MAYBE TEN OF THESE DEVICES ON OUR BODY, OR MAYBE WOVEN INTO OUR CLOTHES, MAYBE EVEN UNDER OUR SKIN.
Gadi Amit Designer, Fitbit Activity Tracker
15
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SENSORS AND ACTUATORS EVERYWHERE
(*) Sensors in the Nike+ Fuelband: 3-axis accelerometer, ambient light sensor; (**) Sensors in the Samsung Galaxy S4: accellerometer,
barometer, geomagnetic sensor, gesture sensor, Hall sensor, gyroscope, proximity, RGB light, temperature/humidity; (***) Sensors in today’s
cars: air–fuel ratio, blind spot monitor, crankshaft position, curb feeler, defect detector, engine coolant temperature, Hall effect sensor,
manifold absolute pressure, mass flow, oxygen, parking sensors, radar gun detector, speed, throttle position, tire-pressure, torque, transmission
fluid temperature, turbine speed, variable reluctance, water-in-fuel, water-on-windshield, wheel speed, etc.
9 **
FUEL2
*
100+ ***
16
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THE NEXT STEP IN INTERNET EVOLUTION
Pre-
internet
Internet of
CONTENT Internet of
SERVICES Internet of
PEOPLE Internet of
THINGS
SOCIAL
WEB WEB 2.0 WWW H2H M2M
+ + + +
17
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THE “INTERNET OF THINGS” IS COMING
AND IT’S GONNA BE BIG (NO… HUGE)
$8.9 TRILLION GLOBAL REVENUES BY 2020
212 BILLION “THINGS” IN 2020
Source: IDC 2013, http://enterpriseinnovation.net/article/idc-internet-things-poised-change-everything-1713674431
18
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WEARABLE TECHNOLOGY ON THE GO
Sources: http://www.policymic.com/articles/65371/galaxy-gear-watch-could-be-a-goldmine-for-advertisers
http://mashable.com/2013/11/17/taptap-wristband-communication-relationships
19
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DIGITAL LIFE IN THE CONNECTED HOME
Source: http://www.lgnewsroom.com/ces2012/view.php?product_code=95&product_type=95&post_index=1828
20
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CONNECTED CARS SOON AN EVERYDAY REALITY
Source: http://reviews.cnet.com/8301-13970_7-57570801-78/at-t-general-motors-to-sell-4g-lte-connected-cars-next-year
€ 45,000
€ 40,000
€ 35,000
€ 30,000
€ 25,000
€ 20,000
€ 15,000
€ 10,000
€ 5,000
€ 0
2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E
(millions)
IN-VEHICLE SERVICES
HARDWARE
TELEMATICS
SERVICE
PROVIDERS
TELECOM
SERVICE
PROVIDERS
21
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WHY THIS IS HAPPENING RIGHT NOW
IoT
22
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SOME CHALLENGES RELATED TO THE IOT
SCALABILITY
PERFORMANCE
MANAGEABILITY
INTEROPERABILITY
SECURITY
MONETIZATION
HORIZONTALIZATION
VERTICALIZATION
PARTNERING
INNOVATION
REGULATION
GLOBALIZATION
GOVERNANCE
IDENTITY
PRIVACY
TECHNOLOGY BUSINESS SOCIETY
23
COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED.
WHILE HUGELY
POPULAR,
THE LINEAR TV
CHANNEL MODEL
IS RIPE FOR
REPLACEMENT.
Reed Hastings Netflix CEO
Source: http://qz.com/203192/the-track-changes-version-of-netflixs-vision-for-the-future-of-tv/
COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED.
24
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WHICH ONE OF THESE WOULD YOU MISS DOING THE MOST?
TOP-5 MENTIONS AMONG ADULTS
Source: Business Insider (May 2014)
42%
13%
32% 34%
48%
58%
68% 69%
22%
47%
36% 26%
17%
7%
2% 15%
18%
15%
20% 15% 14%
11%
3%
7% 4%
4% 8% 7% 8% 12%
13%
2% 2% 4%
3%
9%
TOTAL Aged 16-24
Aged 25-34
Aged 35-44
Aged 45-54
Aged 55-64
Aged 65-74
Aged 75+
Read newspapers/ magazines
Listen to the radio
Go online
Use a smartphone
Watch television
25
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TV VIEWERS ARE LOOKING FOR A
MORE FLEXIBLE VIDEO EXPERIENCE
Device flexibility
Location flexibility
Interaction flexibility
Schedule flexibility
Content flexibility
Plan flexibility
?
26
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THE VIDEO DELIVERY MODEL IS SHIFTING
Sources: Bell Labs, 2012
4.8 HOURS
PER DAY
7.0 HOURS
PER DAY
2012 2020
PayTV linear PayTV VOD Video comm Cloud video OTT video
27
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ONLINE VIDEO TRAFFIC WILL HAVE
AN ENORMOUS IMPACT ON NETWORKS
Source: Bell Labs, 2012
0
20,000
40,000
60,000
80,000
100,000
2012 2013 2014 2015 2016 2017
Linear TV - Multicast
Managed VoD - Unicast
OTT Video - Unicast
Average traffic at Tier 2 CO
UNICAST TRAFFIC DOMINATES NETWORK BANDWIDTH
MULTICAST TRAFFIC HAS MINIMAL IMPACT
Mbps
28
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THE YOUNGER THE VIEWER,
THE MORE THEY WATCH ONLINE TV
MILLENIALS
Source: The New York Times, 2013
GEN X
BOOMERS
No TV Mostly online video TV + online video Mostly TV
29
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HOW MUCH BANDWIDTH DOES
AN AVERAGE HOUSEHOLD USE?
~45 Mbps
Father watching with friend a
soccer match in HD on large
flat screen TV
Mother watching an HD
movie on regular TV screen
Daughter watching an HD
video on her tablet
In the background, two HD
videos being recorded
Son starting an online streamed
multiplayer video game
10 Mbps
8 Mbps
8 Mbps
1-2 Mbps
2x8 Mbps
30
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BUT… 10 YEARS FROM NOW, HALF OF NORTH
AMERICAN HOUSEHOLDS MAY ALREADY BE ON 4K TV
Source: ABI research, BI Intelligence, March 2014
0%
25%
50%
75%
100%
2012 2017 2022 2027 2030
NETFLIX HAS ANNOUNCED THAT MORE 4K ULTRA
HD CONTENT IS COMING TO ITS VIDEO LIBRARY.
THE HEVC COMPRESSION FORMAT OFFERS A
BITRATE OF JUST OVER 15 MBPS.
2024 2014
31
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DVR FUNCTIONALITY IS SLOWLY MIGRATING
FROM THE SET TOP BOX TO THE CLOUD
2013 2017
Source: SNL Financial LC, 2014
STB-based DVR HHs
Network DVR HHs
Cloud DVR HHs
BY END 2017, TRADITIONAL SESTBBASED DVR HOUSEHOLDS STILL DOMINATE,
BUT NETWORK AND CLOUD DVR HOUSEHOLDS WILL HAVE GROWN TO 13%
32
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WITH MORE OTT COMPETITION,
PAY TV PROVIDER VOD GETS UNDERUSED
HOW MANY VOD PURCHASES DOES YOUR HOUSEHOLD MAKE ON
AVERAGE, EACH MONTH, FROM YOUR PAY TV PROVIDER?
Source: Digitalsmiths, Q2-2013 Video Discovery Trends Report (US & Canada)
ZERO
ONE
TWO 5.6%
73.8%
11.2%
33
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WHY DO CONSUMERS PREFER OTT ALTERNATIVES
TO TV PROVIDER VOD?
Source: Digitalsmiths, Q2-2013 Video Discovery Trends Report (US & Canada)
Ability to watch on smartphone
Ability to watch on tablet
Easier to find content
Don't have VOD
Better selection
Convenience
Cheaper
Other
34
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THE FUTURE OF TV
Personalized; understanding a viewer’s
purpose/need in the moment; social,
interactive, profile and context-based.
Broader choice of content; linear,
on-demand and OTT.
Multi-screen with a seamless CX;
cross device search & discover functions.
Cloud-based VOD and DVR;
ultra HD and 4K TV are coming.
35
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Michel Combes CEO Alcatel-Lucent
INNOVATION IS HAPPENING
EVERYWHERE — IN THE
APPLICATIONS, IN THE
CLOUD AND CERTAINLY
STILL IN THE NETWORK
WHETHER IT IS
VIRTUALIZED OR NOT —
IT IS EXCITING TO BE A
PART OF MAKING THAT
HAPPEN.
35
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Source: htttp://broadbandworldforum.com/interview-with-michel-combes-ceo-alcatel-lucent/