• Dr. Ray Mota is a recognized expert in the telecom industry for his

area of expertise in networks, managed services, cloud computing,

operational efficiency and business modelling.

• He brings a talent for complex technical and critical thinking and

provides strategic direction, sharp analysis and expert advice on

networking issues.

• With over 25 years of experience in the telecom industry, he is the

Advisory board member of National Energy and Sustainability

Institute, Ethernet Technology Summit, Xchange Everything Channel,

VistaPointe.net and Telecom Executive Exchange.

Focus on the process - not the outcome

SERVICE PROVIDER:

DIFFERENTIATION IN THE

DIGITAL ERA

MAURITIUS

2016

www.acgcc.com >

Ray Mota CEO and Principal Analyst

rmota@acgcc.com

Twitter: @rmota

Quick Indian Observations

Global Market Trends

The Challenges and the Opportunity

Suggested Framework 

Transformation and Agility

Business Model — How do you make money?

Call to Action

AGENDA – TRADITIONAL SP to

DIGITAL SP

www.acgcc.com >

United States

Japan

United Kingdom

India

India’s overall IT spend as a percentage of GDP is significantly lower than the global average

GLOBAL IT LANDSCAPE – IMPACT

ON GDP

www.acgcc.com

Size of circle represents size of IT spend in the country

>

% of Broadband Penetration Increase

1% 5% 10%

Studies estimate a 1.6% increase in regional GDPs with every 5% increase in broadband services penetrations (integrated across consumer, business, mobile & fixed)

% o

f G

DP

Gro

wth

BROADBAND – IMPACTS GDP

GLOBALLY

Lots of room for growth in India Government investments in technology of USD 26 Billion in FY2015 driving domestic market

0

1

2

3

4

www.acgcc.com >

> www.acgcc.com

CLOUD – SPEND INSIDE THE DC

> www.acgcc.com

Facebook expectation to spend between $4.0 and $4.5 billion in CapEx in 2016

0%

15%

65%

75%

2009 2015

OpEx/Rev

Profit/Rev

48 Service Providers - Cost and Profit

OpEx – BIGGEST ISSUE TO

RESOLVE

> www.acgcc.com

$0

$45

2009 2015

Service Provider - ARPU

Fixed Data

Fixed Voice

Mobile Voice

Mobile Data

ARPU – CAGR are FLAT or

NEGATIVE

> www.acgcc.com

>

CHALLENGES ARE ON GOING

www.acgcc.com

Differentiating

with compelling

Services-

offerings

Rapid

Innovation –

New Customer

Growth

Time to

Market &

Time to

Revenue

Rapid service

rollout – test,

deploy, bill

Increase

Customer

ARPU and

APPU

Climbing the

value-chain for

higher margins

and reduced

churn

Differentiation

& Stickiness for

Growth &

Traction

Accumulation

builds profit

margin

Stalled

Innovation…

Running in Mud

Churn adds

cost without

growth

>

EXECUTIVE WORKSHOP SP’s KEY OBJECTIVES

MOVING FROM TRADITIONAL SP TO DIGITAL SP

www.acgcc.com

Service Provider’s Top

Goals and Objectives

1. Create Innovative

Serv ices / Differentiate

2. Grow Revenues

3. Improve Customer Experience

4. Reduce Cost

5. Flexibility / Time to Market

Service Provider’s Top

Threats and Challenges

1. Organizational

Change

2. Over the Top

3. Skill Sets for New

Capabilities

4. Legacy Network

5. Regulation / Political

Service Provider’s Top

Network Opportunities

1. Simplify Network

Architecture

2. Decommissioning of Legacy

3. Faster Time to Market

4. Bridge Fixed & Mobile

/ Convergence

5. Virtualization

6. Partner with OTT to

Distribute Content

Question: What are your top 10?

Question: How many of these go away if we bring CapEx down to x%?

2002 - AT&T

2009 - SuproNet

2014 - China 3 Samples a misconfigured router in China affects 618 Million internet users for 8 hours.

3

a misconfigured router from SuproNet, a Czech ISP, caused internet services outages worldwide.

Nationwide disruption for 3 hours because of misconfiguration of OSPF in a backbone router.

>

NETWORK DISASTERS

www.acgcc.com

Differentiation

& Stickiness for

Growth &

Traction

Portals Line of Business

Applications

Business Systems & Analytics

Endpoints

System & Applications Development

IT Catalogue & Service

Management

Service Orchestration and Management

Physical Infrastructures

VNFs

“Reduce risks of innovation while scaling”

> www.acgcc.com

STRATEGY: CREATE AGILE

SERVICE DELIVERY PLATFORMRE

ON GOING

More Than Just

Virtualizing Equipment

YANG

• Modeling Language • OpEx savings • Service Agility • Simplified Network Configuration

NETCONF

• Transactional Protocol • Reducing human errors • XML based • Eliminate box by box configuration

CLI

• Vendor Proprietary • Very difficult • Box by box configuration • Increasing his OPEX

SNMP

• Lots of proprietary MIBs • It is very slow • Not efficient • Not purpose-built for

configuring network

> www.acgcc.com

>

Lagging Service Provisioning Costs Money and Customers

Predicted

Demand

Time

Capacity

Compute Storage

Capacity/Cost Performance

Traditional

IT Capacity Rollout

Opportunity

Cost

You Just Lost

Customers

Actual

Demand

SOLUTION: Enable “Infrastructure-as-a-Service Model”

BIGGEST CIO/CTO’S CHALLENGES

www.acgcc.com

Adaptable Resources – Capacity Matches Demands

>

Approach is to list many opportunities and then narrow the list by a series of screenings.

Market Size Market Growth Profitability Competit ive Intensity

Initial Long-List of

Potential Opportunities

Initial Assessment

Target Services

Attractiveness Screen

Fit Screen

Leverages client’s Strengths Provides Platform for Growth

Enables Sustainable Competitive Advantage

MPLS VPN

IaaS

SaaS

Managed Router

Security as a Service

Cloud host ing

Managed security service

Cloud-enabled call center

NOC outsourcing

Ethernet services

IT Services

Server and Desktop management

Unified communications

Bundled services

Services

Strategic

Judgment

Eliminate “small” opportunities Consolidate like opportunities

Eliminate opportunities with no apparent fit

OVERVIEW OF APPROACH

www.acgcc.com

>

Rev

enu

e o

r C

ost

Time

You just quantified

Service Velocity and

Effectiveness B’

A’

A

B

New Company-based Breakeven

Traditional Breakeven

Reduced Time to Effectiveness

Effectiveness of Service Portfolio Results/Efficiencies with New Company Digital SP Traditional SP

Revenue (A)

[CapEx + OpEx] (B)

Improve service effectiveness by ~40% Reduce CapEx and OpEx by 30%+ with new co vs. traditional Decrease time to revenue

> A’ B’

A B

www.acgcc.com

FRAMEWORK FOR QUANTIFYING

YOUR VALUE

OpEx

CapEx

TCO COMPONENTS & PROFIT TREE

> www.acgcc.com

The basic infrastructure for SGi LAN virtualization

> www.acgcc.com

REAL USE CASE – SGI-LAN

PMO

Relative Service Creation Agility is 32%, i.e., (MTRI for Sv)/(MTRI for SP), where MTRI = Mean Time to Resource Introduction (in this case a service). The time variable could be days/weeks/months; So In this case, the FMO service creation takes an average of 1/3 of the time it takes the PMO to Introduce the same service.

> www.acgcc.com

SERVICE CREATION – PMO vs

FMO

Focus on Revenue Generation with Rapid Service Deployment

> www.acgcc.com

REVENUE GENERATION

Potential Impact of VoWi-Fi on Spectrum Spending

Country Auction

Year

Total Amount paid by bidders

Reserve Price

Total Amount paid as a

multiple of Reserve Price**

Total Spectrum Capacity

Auctioned (MHz)

Price per MHz

Average Annual Spectrum saved

With VoWi-Fi Penetration

(1% Year 1 & 15% Year 5)

Average Annual Financial Benefit*

(Secondary market resale or delayed spend)

USA 2015 $ 41 Billion $ 11 Billion 3.7x @ 273% 65 MHz $635 Million 14 MHz $445 Million

UK 2013 $ 3.7 Billion $ 2.0 Billion 1.8x @ 81% 250 MHz $15 Million 9 MHz $7 Million

Germany 2015 $ 5.7 Billion $ 1.7 Billion 3.4x @ 235% 270 MHz $21 Million 18 MHz $19 Million

Korea 2013 $ 2.2 Billion $ 1.3 Billion 1.7x @ 69% 90 MHz $25 Million 4 MHz $5 Million

India 2015 $17 Billion $ 10 Billion 1.7x @ 69% 401 MHz $42 Million 11 MHz $23 Million

www.acgcc.com

* A projected 5 year average that assumes prices stay flat from last auction at a 20 year amortization rate

**Increased traffic on wireless networks increases the demand for the spectrum

Estimated Impact of VoWiFi

>

GOOGLE Fi PROJECT SUPPORTS

Google getting into market – Wait and see will increase CHURN !!!

How Google does it?

Project Fi is able to seamlessly transition your calls from Wi-Fi to cell networks without ever dropping your conversation.

What is it?

Plan starts with the Fi Basics for $20 per month. This includes: • Unlimited domestic talk and text • Unlimited international texts • Low-cost international calls • Wi-Fi tethering • Coverage in 120+ countries Then it's $10 per GB for data. $10 for 1GB, $20 for 2GB, $30 for 3GB and so on. That's it. With no annual contract required. Pay for what you use.

> www.acgcc.com

BUSINESS CASE – TIMELINE SIMULATION

Poor Coverage is the leading cause for Subscriber Churn

Ideal Profit Potential i f no demand & capacity lag

exis ts

Current Profi tability assuming no demand and

capacity gap

No Capacity Addition– Loss in revenue with Opex nearly

constant

LTE Capacity Addition– Increased Capex with deferred profit

WiFi Capacity Addition – Quicker capacity and profit realization

Value Potential through WiFi

Cal ling Capacity Addition

Pro

fita

bili

ty (

Net

Rev

enu

e –

TC

O)

> www.acgcc.com

ECOMONIC IMPACT

Proven Business Case

A 7% VoWiFi penetration rate first year and 27% by the 5th year will impact the bottomline by $2.2 billion Just by saving one cent per minute per subscriber will impact income sheet in the billions. The cost of waiting is too high

> www.acgcc.com

>

MORE THAN JUST NETWORK AGILITY

www.acgcc.com

Understand the Use Cases that are being successful

Service Agility

Business Agility

Network Agility

Customers

value on-

demand

services

SPs benefit

from rapid

service

deployment

SPs need to

deploy cost-

effective,

agile

network

0

1

2

3

4

1% 5% 10%

% G

DP G

row

th

% Broadband Penetration Increase

Create your economic vision and goals (increase profit, customer

productivity, company capabilities, return on capital)

Evaluate opportunities App (SaaS)

Compute, Store (IaaS)

Develop (PaaS)

Х

Router, Switch

Firewall, ADC, CDN, .. Data Center

Go virtual, master the next generation’s

playbook, leverage importance of Visibility & Security

Pilot new offerings, refine, and expand (by opportunity)

Create Pilot Offer

Introduce to Trial Participa

nts

Evaluate Results

Refine and

Enhance

Launch to

Broader Market

Harvest the benefits .. repeat

CALL TO ACTION: EMBRACE TRANSFORMATION &

CREATE OPPORTUNITIES EVERYWHERE

> www.acgcc.com

FOCUS ON THE PROCESS – NOT THE OUTCOME

> www.acgcc.com

Back-up Slides

Big Data Mobility DC ITaaS

Expect Big Data to have an impact on

business – just need Use

Cases

Mobile access to enterprise

application is a key driver for increasing enterprise

productivity

Enterprise Data Centers are

becoming too cost prohibitive.

Virtualization and cost reduction is a

priority. Data Center

Transformation!!!

IT as a Service is growing rapidly, so enterprises could focus on

their core business objective

Cloud

IT spending will shift from buying and maintaining hardware and software to subscribing to cloud services

INDIA - EVOLING TRENDS

www.acgcc.com >

INDIAN CIO RANKING

1. Security

2. Cloud Services

3. Consolidation & Optimization

4. BB & Wireless Connectivity

5. Budget & Cost Control

6. Talent Management

7. Strategic IT Planning

8. Mobility

TOP 10 – CIO

PRIORITIES

9. Disaster Recovery

10. ERP/CRM >

Facebook expectation to spend between $4.0 and $4.5 billion in CapEx in 2016

>