redefining boundaries - total telecom festival 1 dec 2015

Redefining Boundaries Insights from the Global C-suite Study

Rob van den Dam

Global Telecommunications Industry Leader IBM Institute for Business Value

For this study we surveyed business leaders…

Chief Executive Officers (CEOs)

Chief Financial Officers (CFOs)

Chief Human Resources Officers (CHROs)

Chief Information Officers (CIOs)

Chief Marketing Officers (CMOs)

Chief Operating Officers (COOs)

818

643

601

1,805

723

657

©2015 IBM Corporation 2

were from Telecommunications

295


…from more than countries

North America

Central and

South America

Western Europe

Middle East

and Africa

Central and

Eastern Europe

Asia Pacific

Japan

©2015 IBM Corporation 10 December 2015 4

What’s putting the

world’s

top executives on

edge?


CxOs are terrified of outsiders making a land grab

More competition expected

from other industries


from within the same industry

Business landscape change (in 3 to 5 years)

54% 29%

76% Telecom industry ….. any many

more

Digital

Disruptors


“The ‘Uber syndrome’ – where a

competitor with a completely

different business model enters

your industry and flattens you.”

Judy Lemke, CIO, Schneider, United States


CxOs expect industry convergence to have the biggest impact on their business

Industry convergence

The “anywhere” workplace

Rising cyber risk

The redistribution of

consumer purchasing power

The sustainability imperative

Alternative finance and

financing mechanisms

The sharing economy

Top trends to impact business (in 3 to 5 years)

Total CEO CFO CHRO CIO CMO COO

70%

60%

50%

40%

30%

20%

10%

0%

80%

Telecom


CEOs again selected technology as the most important external force that will affect their enterprise

External forces impacting the enterprise (in 3 to 5 years)

2006 2008 2010 2012 2015 2004

Technology factors

Market factors

Regulatory concerns

Macro-economic factors

Socio-economic factors

Globalization

People skills

Geopolitical factors

Environmental issues

2013


In coming years, CSPs expect increased impact from cognitive, SDN/NFV, eSIMs, IoT and energy savings

Which of the following TECHNOLOGIES will be most important for the industry?

SPECTRUM EFFICIENCY

BIG DATA MOBILE PAYMENTS

CLOUD COMPUTING

ENERGY SAVINGS

INTERNET OF THINGS

SDN/NFV

eSIM/ VIRTUAL SIM

COGNITIVE COMPUTING

SECURITY SOLUTIONS

80%

72% 71% 69% 66%

51% 50%

44%

24%

19%

COGNITIVE

eSIM/ Virtual SIM

VIRTUALIZATION

ENERGY SAVING

INTERNET OF THINGS

2020

67% 67% 68%

52%

65% 64%

76% 73%

82%

90%

NOW


Cognitive computing to enable CSPs to derive ‘deeper’ contextual insights

89%

8%

33%

53%

1-2 yrs

3-4 yrs

>=5 yrs

… of CSP executives familiar with cognitive computing believe it will play a critical role in the future of their business

94% of executives

familiar with cognitive computing indicated that they are likely to invest in it in future

Analytics • addresses predefined problems • provides accurate definitive answers • handles information with known semantics • interacts in formal digital means (e.g.

commands, screens)

Cognitive • addresses ambiguous problems within

context • provides answers with a margin of error • handles information without explicitly

knowing semantics • interacts in natural language


Cloud-based networking to deliver services over an open, agile and cost-effective infrastructure

Services

SDN

NFV

2014 2015E 2016E 2017E 2018E 2019E 2020E

Billions

$ 175

$ 150

$ 125

$ 100

$ 75

$ 50

$ 25

$ 0

NFV and SDN spending expected to grow to nearly $157B by 2020 RCRWireless, Sept 17, 2015

AT&T shows how serious it is about SDN, NFV and open source FierceWireless, Aug 20, 2015

AT&T wants to virtualize 75 percent of its network by 2020.

Agility, faster TTM

Elasticity

Cost take-out

Network monetization


CSPs are trying to secure leading positions in the technology infrastructure for the IoT

Global Machine-to-Machine Growth and Migration from 2G to 3G and 4G

2014 2015E 2016E 2017E 2018E 2019E

Bill

ions o

f M

2M

Connections

2G 3G 4G LPWA

45% CAGR 2014 -2019

0.5B 0.7B

1.1B

1.6B

2.3B

3.2B

29%

13%

35%

23% 1% 32%

67%

3.5

3.0

2.5

1.5

1.0

0.5

0.0

Cisco Visial Networking Index

AT&T Inc has big plans for the IoT WorldBizToday, Sept 24, 2015

Vodafone buys Italian car technology company Cobra Automotive for £115m The Telegraph, June 16, 2014

Orange invests in LoRa network for IoT DigitalTVEurope, Sept 21, 2015


The eSIM has a huge potential to modernize the way connectivity is delivered to consumer and IoT devices

OVERALL MARKET GROWTH

OVERALL MARKET GROWTH

478M 639M EMBEDDED M2M SIM CONNECTIONS 2020

EMBEDDED M2M SIM CONNECTIONS 2020

PR

OP

RIE

TA

RY

E

MB

ED

DE

D S

IM

GS

MA

E

MB

ED

DE

D S

IM

SP

EC

IFIC

AT

ION

2020

2019

2018

2017

2015

2016

2014

2013

2020

2019

2018

2017

2015

2016

2014

2013 Fragmented

market growth slower

Open market approach promotes

market growth

Apple SIM: bad news for mobile operators? Mobile Industry Review, Oct 24, 2014 The Apple SIM lets customers easily switch between mobile operators without having to swap SIM cards.

GSMA gets boost from operators for embedded SIM M2M tech Mobile Europe, Oct 7, 2015 The GSMA's embedded SIM specification has now been backed by 23 operators, ……


Cost savings & environmental responsibility are driving reasons for looking into energy saving technology

• New technologies are more energy efficient

• 75% less consumption between LTE and 3G (stand-by feature)

• Advanced techniques of cooling mast sites

• Increase use of renewable energy • TCO reduction up to 30% with solar

energy-based base stations

• More mobile network sharing • 20% cost savings from network

sharing

• Use of multi-RAN platform • More and more use of software


We have identified a small group of leading innovators that financially outperform: Torchbearers

Torchbearers

100% are Leading Innovators

20% of Leading Innovators are

Outperformers; thus

5% of the total population

are Torchbearers

* Peer level

Market

Followers

Leading

Innovators

24% 42% 34%

2% 5% 20%

*

Outperformers in growth

and profitability


59% 52%

More decentralized

decision-making

Greater focus on

new markets


from other industries

Market Followers Torchbearers

69% 57%

62% 45%

more 38%

more 13%

more 21%

Telecom

76% Telecom

70% Telecom

56%

Torchbearers are better placed to take on the disrupters


Torchbearers pay more attention to their customers than to their competitors

60% 49%

Customer feedback

42% 54%

Competitors

External sources to identify the next wave

more 22%

less 22%


Telecom

44% Telecom

43%


Torchbearers are far more concerned with preparing to change how they go to market

70% 56%

Revenue model

64% 51%

Customer segments

Parts of the business most impacted by the next wave

more 25%

more 25%


Telecom

77% Telecom

58%


“Uber has a market cap that exceeds the

market cap of all the car rental companies

combined, and it’s only an app.”

CMO, Transportation, United States



Torchbearers are more likely to have deployed a more future-oriented business model

38% 29%

Open

(ecosystem)

27% 20%

Platform

Business model types (currently using)

more 31%

more 35%


Telecom

51% Telecom

44%


Whether launching a new business model or a new product offering, Torchbearers prefer to be first

80%

41%

80% 41%

Preference to reach the market first

more 95%


Telecom

65%


Prepare for the digital invaders

Create a panoramic perspective

Be first, be best, or be nowhere



What’s next?

ibm.com/csuitestudy


IBM.com/iibv

[email protected]