1. Frost & Sullivan
TMT Practice – Strategy and Business Plan
Telecom, Media and Technology Practice
Outlook for 2012 and beyond

2. Agenda
1 State of the Industry 2011
2 ICT Outlook 2012
2

3. 2011 State of the Industry: Summary
1. The post PC era is here – with mobile dominating every discussion
(~ 150 mn smartphones and ~ 5 million tablets)
2. Data revenue growth has been robust for most markets; however data deluge
has cost challenges
3. Rise of mega Platforms – they have hit Telco core e.g. SMS revenues
4. Telecom Operators are struggling to find growth in their core business – voice
5. Telecom operator margins are declining so profitable data growth is key
6. Cloud computing continued to gain momentum in the region with > 40% growth
in revenues accruing to public cloud providers
7. Social web has truly arrived
8. IT spending would grow by around 7-8 percent in the year 2011 with cloud ready
architecture, analytics and social media as top of mind concerns
9. Fiber deployments in developed countries gained momentum in 2011 early LTE
deployments in 2011
10. Smart TV shipments gained momentum changing the plans of TV service
providers
11. Mobile marketing grew at a scorching pace
3

4. Agenda
1 State of the Industry
2 ICT Outlook 2012
4

5. #1: Post PC era will transform APAC into the largest
mobile internet market
Global Trends Asia Pacific Trends
Mobile device sales Mobile internet growth
~ 480mn
1250 mn
Tablets
~ 380mn
600 mn
Netbook ~ 155mn
PCs ~ 150mn
Netbook Tablets
Smartphones PCs
Desktop
Desktop Smartphones
PCs
PCs
2011 2011
2011 (e) 2011 (e)
• In APAC, mobile devices have overtaken PCs in 2011
• ‘Browsing minutes’ to exceed voice minutes by 2012
• Mobile internet market lead by China, India and Indonesia will double
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6. #1: Mobile Platforms hitting critical mass across
smartphones and tablets
Mass market phase will aggravate the challenges for operators, vendors and
enterprises alike
Device Driven
Market Seeding Mass Market Phase Networked Society
growth
Upto 2008 2011- 2015 2015+
2009-11
Video driving the growth Wide penetration of
• More mobile BB of mobile date traffic devices and networks
• Initial seeding to devices than fixed BB
monetize 3G devices Data Traffic per user Cross industry business
networks (Moore’s Law): Doubling models
• Packet data exceeded nearly every 18 months
• Flat rate as a voice data on mobile Information ubiquity
demand simulation networks in 2010 Smartphone is mass
mechanism market
• Apps are the new
internet 80% of internet users to
have mobile internet
IT needs to support such
devices
Initial creation of new
business models –
healthcare, automotive
6

7. #2: Platform play across the ICT sector would be the
critical value generator
3 ecosystems are converging in the mobile computing ecosystem with diverse
approaches
1990s 2000s 2010s 2015 2020s
Collision PhaseConvergence Phase
Computing Client-Server PC as PC as Cloud
Cycle Computing Workhorse Entertainme Computing
Web
nt/Personaliz
OS
ed Laptops/Netboo
ks Tablets
Mobile
Mobile 2G Based Fixed BBSmartphone Mobile Cloud Customized
Cycle Comm Growth s internet Tablets/phone
s
Apps Soft SIMs
Internet
Cycle Email/ Web Web Web 3.0 +
2.0 Aug
Reality
Digitization – Digital Video overtook
Mobile devices
Graph not to scale content overtook analog static pages sold> Fixed
content devices
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8. #2: Platform play across the ICT sector would be the
critical value generator
By 2015 there will 2-3 platform choices for each need and 2-3 overall integrated platforms.
Microsoft acquired Skype in 2011 and we can expect to see more action in the coming year.
In Asia Pacific, SKT re-organized to SKT and SK Planet to focus on platform business
globally.
Facebook Apple’s platform Google platform
platform
Communication Inhouse? ?? Skype
Platforms (Acquired)
Entertainment Itunes /app Youtube Xbox/PS3
Platforms store Hulu ?
Information Platforms
Google Microsoft?
(monetized by ads)
NFC NFC PayPal
Commerce Platforms
enablement enablement Operator
alliance
Participation/SNS Google +
Platforms Twitter?
Experience Platforms iOS RIM (Acquired?)
Android
– OS + Web
8

9. #3: Fixed Broadband and 3G/LTE will provide options
for high speed access
Fixed Broadband – Asia Pacific 3G/LTE – Asia Pacific
1.25 bn
375mn
212mn
466mn
2011(e) 2016(f) 2016(f)
2011(e)
• The fixed broadband market continues to grow in Asia Pacific region despite
of the heavy penetration of 3G/LTE.
• MBB through dongles will touch 41mn in 2011 and reach around 100mn by
2014
9

10. #3: Fixed Broadband and 3G/LTE will provide options
for high speed access
In general, LTE technology enables mobile operators in mature markets
to command a significant price premium over their existing 3G services. Loose correlation
between advertised
Most have increased data volume caps with introduction of service. speed and premium
90%
80% CSL (Hong Aggressive pricing
Kong), 21, 84.3% charging large
4G Premium over 3G (in %)
70% Tele2 premiums for LTE
(Sweden), 80, 74.2% service
60%
50% Vodafone Conservative pricing:
(Germany), 21.6, 42.9 charging a premium
T-Mobile
40% for LTE but allowing
% (Germany), 42.2, 37.0 TeliaSonera for reduction due to
30% % (Sweden), 80, 25.1% churn and competition
20% NTT DoCoMo
(Japan), 37.5, 8.7% Telenor
Verizon Wireless (Sweden), 80, 14.3% Strategic pricing:
10% charging based on
(USA), 8.5, 0.0%
specific constraints like
0% network quality and
0 10 20 30 40 50 60 70 80 90 expansionary plans
Average LTE Speed (in Mbps)
Note: MetroPCS has been omitted in the
chart as it has never offered 3G services.
10

11. #4: “Internet of Things” will further accelerate as more and
more devices, equipment and gadgets get connected creating
opportunities for value creation and new business models
The Home Network Mobility on steroids Internet of things
‘S’ Citizen ‘S’ Business
‘S’ City
Planning ‘S’ Buildings
‘S’ Mobility ‘S’
Energy
• 8-10 Devices per home • 5-6 Devices per individual • 500 per sq km
• Universal Remote • Touch as the default input • Smart cities
mechanism
6 bn 30 bn 44 bn
• Rapid commercialization of enabling technologies
• Demand for such services in select sectors driven by productivity requirements
• Emergence of early business models to monetize the opportunity
11

12. #5: Cloud computing is set to become mainstream in Asia
Pacific region. Platform-as-a-service (PaaS) is set to be the
new battleground in the cloud computing industry
Hybrid clouds lead the way; Cloud adoption growing at a rapid pace
6,000 5,807
16% 5,000
3% 4,284
4,000
US$ millions
71%
29%
3,132
3,000
10%
2,224
2,000
1,575
Not adopted yet Public cloud Private cloud Hybrid cloud 1,124
1,000
Note
Survey done with IT Managers and CIOs in 0
Australia, Hong Kong, China, India, Singapore 2010 2011 2012 2013 2014 2015
and Malaysia in Q2 2011. 64% with >500
employees and 36% with 200 to 499
employees.
APEJ Cloud Computing is market
expected to grow at 39% for the 2010-
2010-
2015 period.
12

13. #5 Platform-as-a-service (PaaS) is set to be the new
battleground in the cloud computing industry
The cloud value chain will disintegrate and consolidate later
Yr1 Yr7
Current View (2010) Interim View (2011-12) End game
Software Software
Reseller Reseller
Device Presentation
SaaS Application
Management
Tenancy Managers Preferred
PaaS partnershi
2-3 end
ps of SPs
Platform to end
with
cloud
software (
players
Brokers/Aggregators retail
model)
IaaS
Synchronization
Hosters/Infrastructure
Source: Frost & Sullivan
13

14. #6: The world of TV is going to change forever – click for
1000 channels
Smart TV, Social TV and internet video will transform TV
TV gets social and viral TV becomes an app Free flow of internet video and
broadcast video
14

15. #7: Big Data and Analytics will see reaching the chasm in
2012 and get deployed through variety of platforms and be
enabled by emerging technologies
Data is expected to increase dramatically over the next decade; Data from machine
communication and IOT is expected to exceed social media in the next half decade
Contextual
Mining
Growth Areas @ Analytics
Queries, Network
Reporting, analytics, Operations performan
Research ce &
Advance analytics, Utilization
CRM analytics,
Data warehouse generation
Organization financial /
Big
strategy analytics
In-line and predictive analytics
Data
Sentiment
Move more towards cloud Industry
Analysis &
Specific
Text
Solution
Analytics
Security
15

16. #8: Enterprise communications would become richer, more
collaborative and increasingly move towards the cloud
Improving Declining Telecom
Infrastructure Costs
Rich
Communications
- Pervasive video Shift from Capex
Increasing - Context & presence aware to Opex
Globalization
Consumerization Generation Y
of IT
Collaborative Cloud workforce
- Native and new
Communications
- Conferencing
- ESN
16

17. #9: Telco transformation will evolve
Telecom operators need to look at revenue growth and profitability growth
Telecom Transformation
Services/Business Network Customer Mgmt Organizational
Transformation Transformation Transformation Transformation
Protect/ New Revenues Reduce cost per bit Increase agility Be ready
• Enterprise ICT • Segmentation of • Faster rollout of • Process re-engineering
Services mobile broadband services
• Cloud • Knowledge acquisition
• Data Centers • Demand and pricing • Customer centricity
• Mgd services management • Metric definition
• Unified comms • Automation/ IT Factory
• Migration to LTE
• Appifying Services
• Backhaul optimization
• Devices
• IP Migration
17

18. #9 Telcos should be a pragmatic pipe and invest effectively
Telecom operators need to look at revenue growth and profitability growth
Smart Pipe Strategy Dumb Pipe Strategy
People reward difficult complex behavior
If you are so smart , why aren’t you rich ? more than simple behavior, but simple
-Nicholas Taleib, The Black Swan behavior is more effective - Warren Buffet
Pragmatic Pipe
18

19. #9: Consumer’s communication behaviour is changing
Communication doesn’t mean voice and SMS any more
19

20. #9: Network transformation is key to achieve the ambitions
of a pragmatic pipe
Metamorphosis of networks – Small is Big
Small Cells– rapid scaling of sites Sharing
• Light Radio pioneered by ALU, HP and • Active sharing
Freescale shows how SDR, VLSI and smart
power management will change the scale and • All – IP networks
scope of BTS
• Antenna collapsed into the cell – the cube can
be as small as 10 cms
Femtos More of the same
• USB drive form factor for • Spectrum refarming
femtos
• Hetnet
• Femtos can be added to
other devices like gateways • Offloads
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21. #10: Digital Engagement will change marketing
Gamification So-Lo-Mo Mobile marketing
21

22. #11: Security will be the Achilles Heel
Huge security issues – in every data that is shared
IBM : No passwords by 2016
22

23. #12: ICT as an enabler will continue to gain momentum as
telcos, SIs, ISVs etc. move beyond pure ICT industry to
drive growth, value and margins in the future
. Urban Planning Healthcare Automotive
SMART LIVING
Electric Vehicles
SMART PUBLIC SPACE Financial Services Retail
*****
Virtual Shopping
Consumer Electronics Energy Biotechnology
From 2D to 3D
HDTV
Morphing
Solar PV Cells
Travelling Wave Reactor (TWR)
23

24. #13: World of flexible materials- Sneak preview for 2013
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25. Summary
Till 2010 Till 2020
80
5
Growth in
Penetration connected 6
0.9
devices
Connected devices (bn)
Connections (bn)
Explosive 4-5%
>12% Mature Growth
growth
Telecom Acquisition focused Smart enabler
Telecom inside
Outside
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26. Thank You
Global Growth Partnership Company
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