Assuring Innovation

CONTENT AND CONVERGENCE THE PERFECT MARRIAGE

Assuring Innovation

Glenn J. KiladisDirector, Marketing

Assuring Innovation

LogicaCMG today

• A major international force in IT services and wireless telecoms

• 20,000+ staff (3,000 in Telecom)

• 35 countries

• $3.0 billion revenues

• 40 years of experience in IT services

• A worldwide client base of blue-chip organizations

• Global Leader in Messaging, Mobile Content Delivery and Payments

300 Service Provider Customers Worldwide (270 Mobile Operators)

Assuring Innovation

Global Telecoms makes up nearly a quarter of LogicaCMG Business

Telco Solutions8%

Telco Product14%

Global Telecoms$659m (22%)

Energy andutilities

$476m (16%)

Industry,distribution

and transport$588M (20%)

Financial services$470m (16%)

Public sector$801m (26%)

GT is 2nd Largest Business

Assuring Innovation

Some Of LogicaCMG’s Major Clients

Assuring Innovation

LogicaCMG in telecoms…our Commitment to the Caribbean

Installations serving 23+ Caribbean, Mexican

And Central American Sovereign Nations

Member Since

2002

Assuring Innovation

Consumer trends for 2005

• More mobiles (1.3Bn) globallythan fixed lines

• Camera phones will outselldigital cameras

• Legal music downloads will exceed retail sales

• Growth of Wireless VoIP phone services e.g. Motorola launch VoIP Skype phone

Assuring Innovation

Wireless Market Trends – Mexico & CALA

• Wireless Subscribers in CALA is rising - annual rate of 25%... Forecast to reach over 186 million subscribers by end of 2006

• Wireless Data Latin America (Central America, Caribbean, Mexico & South America) set to jump from $200 million in 2002 to $5.3 billion in 2006.

• Caribbean is Morphing

– Liberalization means that new entrants and existing operators will co-exist

– Working towards Creation of the CSME (Caribbean Single Market Economy)

• Within Latin America, Mexico one of the largest growth markets

– Mexico's mobile penetration growth 6 percentage points over the next four years, reaching 46% of the population by the end of 2009.

– Mobile data revenue will reach $1.8 billion in Mexico by 2009

Assuring Innovation

The Opportunity for Operators

Basic texting$40bn (33%)

Picture messaging$6bn (5.5%)

Instant messaging; email$7bn (6%)

Audio & video messaging $3bn (2%)

Source: OC&C; Ovum; Strategy Analytics; Analysis; Yankee Group; IDC

Messaging$56bn

CorporateProductivity$9bn (7.5%)

Email & PIM$8bn (6.5%)

Internet access$2bn (1.5%)

Enterprise$19bn

Personalization$6bn (5%)

Music & Audio$3.5bn (3%)

Gaming$7bn (6%)

Video & images$5.5bn (4.5%)

Other$2.5bn (2%)

Entertainment$25bn

Informationupdates

$9bn (7.5%)

Video clipInformation$7bn (6%)

Locationinformation$3bn (2.5%)

Information$20bn

Assuring Innovation

Silo Questions

• Functional– What functions can be provided across silos?– How do cross-silo functions increase bundle uptake?– How do cross-silo functions increase ARPU?

• Value Focused– Which cross-silo functions are valued by customers?– Can a cross-silo function lead to a new bundle?– How is value migration modeled and reflected in the offer?

• Segment Focused– How are functions being added to target desired segments?– How do the cross-silo functions bring additional desired segment customers?

• Market Environment– What are the competitors doing, and how is the cross-silo function making the

bundle offer superior?– How agile and fast can new functions be added?– How accurate is visibility uptake / penetration / ROI models?

Assuring Innovation

Silos by Industry

• Silos of Diverse Technologies

– Video: Cable, Satellite, IP TV

– Telephony: Circuit Switched, VoIP

– Broadband / Portal: Cable, DSL also the Internet Portal

– Cellular: GSM (GPRS), CDMA (1XrTT)

Video Telephony Broadband Mobile

Assuring Innovation

Silos in Technology

IP SS7PLMNIP

MMS WirelessBrowsing

Voicemail SMS

IP

The Next Service…

Rating &Charging

CustomerProfiling

Rating &Charging

CustomerProfiling

Rating & Charging

CustomerProfiling

Rating &Charging

CustomerProfiling

Rating &Charging

CustomerProfiling

Ne

two

rk &

Ser

vice

pro

vid

er

Reality in Many Networks

Assuring Innovation

Network connectivity and the construction of a content delivery and messaging architecture is a means to an end…

users want access to their services, content, applications

Any time, Any where, Any Device

They don't particularly care over what kind of network they travel, how we do it and they do not care about industry

acronyms we all use.

Assuring Innovation

Convergence Trends for 2005

Convergence in Multiple Areas of Telecom

1. Technology Architecture (voice and data)

• Movement towards IP

• Converged Messaging Applications and content delivery via IMS leveraging IP and SIP

2. Simplifying Content Development for delivery to multiple platforms

• Content Anywhere, Anytime, Any Device

3. Operators Bundling Services across traditionally separate “Silos” to Increase Customer Loyalty and Overall Revenue

“Triple or Quadruple Play” Bundling

Video

Broadband / Portal

Telephony (VoIP, LD or Fixed Line)

Cellular

Other Bundling Models…

Local Telephone Long Distance Mobile Television CPE and in-house wiring Other bundled services (etc…)

Assuring Innovation

Convergence & Content

• Introduction new services = creation of networks based on several silos.

• Silos span various business structures, platforms, content delivery systems and technologies

• We need to recognize these silos as we plan for next-generation migration.

• How and what should we address to achieve the best benefits of the next-generation solution?

Cingular’s 4th Quarter Earnings (ended December 31, 2004) saw strong growth in data ARPU by 65%

Primarily fueled by text messaging, mobile instant messaging, mobile email, downloadable ringtones, games and photo messaging. 

Assuring Innovation

Portable Mobile

Current Content Delivery SystemExisting Silo Approach

Fixed

Mobile Broadband and Wireless Broadcast

Services and content specific to device and delivery system

Assuring Innovation

The future of telecoms - unprecedented convergence

FixedMobile

IP to all devices over all delivery systems

Mobile Broadband and Wireless Broadcast

Content and services repurposed for all devices

Assuring Innovation

Proposed IMS Interface for car shot

Sample “UNIFIED INBOX” of the Future

Assuring Innovation

Evolution of key services

VoiceVoice

SMSSMS

MMSMMS

VoiceVoice

DataData

DataData

Current Services Next Generation Services Any Application

Next Generation Initiative

Assuring Innovation

“There is huge

pressure on operators

to change the way

they deal with voice

and data, and the

convergence of the

two……”

Assuring Innovation

Back to IP

• IP technology is changing market dynamics

– Low OPEX and CAPEX

– Thus attracting new entrants

– Combined with WIFI, IP provides alternatives

• IP and is the foundation for the mobile operator’s “flexible data service strategy”

• Migration to IP service networks needs to be managed carefully in order to garantuee continuity

Assuring Innovation

ProducersAuthors &Developers(GUI, Encoding)

AggregationPublishing& Marketing

ISP’s

MVNO’s MobileOperators

WirelessOperators

Broadcaster

Cable TV Companies

Content Creation ContentDistribution

Service design& creation

ContentDelivery

ContentUser

Content Assets

OptimizationCompliance Management

Content Value Chain

Assuring Innovation

2.5G & 3G Supported by IP Content Delivery... Breeding ground for new services

• Video Content in the palm of your hand

• Video Ringtones

• Video Chat

• Remote Surveillance and Diagnosis

• Fixed and Mobile Video Calling

• Video Call Completion

• Video Gaming and QuizzingThe Olympic Case

• Gold Medal Alert

• Live results

• ‘Famous Quotes’

• Olympic Bloopers

• Collectable Clips

• ‘Golden Moments’

Assuring Innovation

Video will play an increasing role

The true power is in synergy

MMS

Video Messaging Person to Person

Content to Persons

Multimedia Album

Video Communications Person to Person, fixed and mobile

Person to Persons

Call Completion

conversation

Video Portals Live and stored content

Streaming and Downloading

2.5G and 3G Mobile

browsing

Assuring Innovation

Three Phases of Successful Bundling

1. Product Portfolio

– Common Relationship Provided By Advances in Technology and/or Changes in Government Regulation

2. Common Touch and Feel (User Experience)

– Common Branding, Terminology, User Interface Similarities

3. Integration

– Unifying content delivery

– Providing Additional Utility to the Subscriber by Increasing the Ease of Use, Functionality and Price Point of the Overall Bundle

– Fighting Price Erosion Inherent in Bundling

– Increasing Stickiness

Assuring Innovation

Convergence in Messaging and

Content Delivery

Assuring Innovation

Proposed IMS Interface for car shot

Sample “UNIFIED INBOX” of the Future

Assuring Innovation

Convergence in Content & Messaging Cingular & SBC

•Manage and listen to wireless and fixed line voice mail messages from a computer with Internet access.

•Receive fax messages… forward them via email or print them out using your computer.

•Read email anywhere, anytime over the Internet from a computer.

•Listen to your voice messages, email messages and fax headers over fixed or wireless line

Assuring Innovation

New World Old World

Assuring Innovation

Network Provider

TelecomsQuality

Commodity

Service Provider

ITFlexibiltyValue

From Present: Silo Content & P2P

Telecoms & Service Provider

TelecomsQualityValue

FUTURE SERVICE PROVIDER ARCHITECTURE

To Future: Horizontal

Assuring Innovation

Step 1 – Enabling a device aware architecture

SS7

SMSC

OAM

Provisioning

Charging

ESMEs / Applications

SS7

SMSC

OAM

Provisioning

ChargingSS7

SMSC

OAM

Provisioning

Charging

MSC/STP MSC/STP MSC/STP

IP

SS7GW

SS7GW

MMSC

Messaging Proxy

GGSN

CustomerCare

Reporting

Centralising common componentsEnable all IP infrastructureAdd horizontal components

Assuring Innovation

Assuring messaging innovation in IMS

• IMS poses challenges for operators:– business case for investment in IMS technology

– migrating the current network and protecting investments

– assuring interconnectivity for all customers

– assuring value and user experience in a changed world

• Messaging Application Server (MAS) fills a currentgap in the current IMS space providing storage,gateway and presence capability and offeringan enhanced user experience

Seamless Migration Strategy is Key

Assuring Innovation

The Operator Challenge - Charging for Messaging and Data Services

Assuring Innovation

Exploiting the Content Value Chain & Convergence

IP framework for Messaging & Content Delivery, enables OPEX reduction, and horizontal introduction of services that level silos

Assuring Innovation

IP & Information Flow = Power

Total Visibility

Assuring Innovation

With IP Comes Intelligence

Assuring Innovation

BUSINESS BENEFIT

Assuring Innovation

CONTENT AND CONVERGENCE: HAVE THE RIGHT DELIVERY ARCHITECTURE

GO TO MARKET WITH THE RIGHT CONTENT DELIVERY ARCHITECTURE

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Glenn Kiladis Director, Marketing