1 T H E D
O L L A R S S E N S E O F C O N N E C T I V I T Y OGILVYRED THINK SERIES VOLUME 2 MARCH 2016 AND

2 Meanwhile, Gens X, Y,
and Z probably don’t give much thought to the word, if any at all. The difference in perspective exists for many reasons, but the primary one is the fundamental shift in the definition, scope, and impact of telecommunications. This report will explore the brand and marketing opportunities presented by that shift and cite potential scenarios for leveraging it. BOOMERS BABY THE WORD “TELECOMMUNICATIONS” MAY CONJURE LANDLINES, ANALOG DESK SETS, AND POSSIBLY EVEN A SHOE PHONE. FOR

3 WATER ENERGY. MOBILE CONNECTIVITY’S
EXPLOSIVE GROWTH IN THE PAST 15 YEARS HAS MADE IT AKIN TO A UTILITY, LIKE Telecommunications corporations have essentially become utility companies, providing something that people need rather than something they simply want for entertainment, or to connect with family and friends, perform transactions, and do their jobs on the go. With this in mind, it’s interesting to note that access to mobile devices worldwide is growing much faster than access to many of life’s bare essentials. or

4 DIGITAL TRANSFORMATION IN ACTION
Source: World Development Report 2016: Digital Dividends, The World Bank. %ofthepopulation 100 80 60 40 20 0 1990 1995 2000 2005 2010 2015 ON THE ONE HAND, that’s a sobering trend, dictated by the local availability and quality of internet service, not to mention the would- be customer’s financial wherewithal (what devices and service can they afford?). At the same time, access to baseline necessities (clean water, sanitation, energy) tends to rise with the tide of increased mobile connectivity. This is illustrated well in places such as India, China, Russia, and sub-Saharan Africa, where mobile service and access is growing rapidly, but not as well in poorer developing nations. Mobile broadband Internet Mobile phone Improved sanitation Secondary school Electricity Improved water

5 By 2020, mobile technology
will reach an estimated value of $4 trillion worldwide, which represents more than 4 percent of the global Gross Domestic Product. Two factors are driving the expected growth, in a simple supply-and-demand equation: increased mobile access among people who have never been connected will produce more (paying) subscribers to existing services, and the drive to create more services to meet the rising demand. THAT MOBILE TECHNOLOGY CAN BE A FORCE FOR GOOD — AND NO DOUBT WHATSOEVER THAT IT IS AN ECONOMIC FORCE. THERE’S LITTLE DOUBT “Access to the Internet is a fundamental challenge of our time.” - Mark Zuckerberg, Founder of Facebook 2,346 2008 3,210 2012 4,470 2019 2,798 2010 4,191 2017 3,636 2014 2,569 2009 4,020 2016 3,463 2013 4,596 2020 3,013 2011 4,336 2018 3,838 2015 (Millions) UNIQUE SUBSCRIBERS BY REGION Asia Pacific Commonwealth of Independent States Latin America Europe Middle East & North Africa North America Sub-Saharan Africa Source: GSMA: The Mobile Economy, 2015

6 IN SHORT, mobile connectivity
can provide the means to fulfill fundamental needs, like healthcare, education, and social interaction, as well as to utilize advanced services such as financial support, business information, real-time navigation, and banking and commercial transactions. But giving more people the ability to live more efficiently and increase their personal wealth is just part of mobile connectivity’s promise. The growth of machine-to- machine (M2M) communication has created billions of new connection points among the internet of things (IoT), from smart-home devices (thermostats, fridges, televisions, etc.), to connected cars and agricultural machinery. More connection points means more interactions, which in turn creates more brand and marketing opportunities. This produces yet another potential economic driver: The network of connection points is growing exponentially, and with it the demand for more data bandwidth and IP addresses, as well as lower latency.

7 GLOBAL MOBILE DATA TRAFFIC
(Per month, PB) 2013 2014 2015 2016 2017 2018 2019 Source: Cisco VNI Global Mobile Data Traffic Forecase Update, 2015-2020. 1,480 2,523 4,175 6,765 10,666 16,140 24,314

8 While continuing to be
profitable businesses, carriers face an increasing challenge to financially support (e.g. through investments) the increasing demand for data and voice services. Infrastructure costs in developing markets are dropping, thanks to the development of more efficient hardware. But that’s just one part of the economic equation, and carriers now face a conundrum. The increase in demand creates more connection points and data, which in turn require more infrastructure.Thefundamental problem is that the increase in demand doesn’t guarantee the returns necessary to justify the investment in infrastructure growth. This is especially true because many of the new users (that is, the people and businesses creating the demand) that carriers would like to bring online are low- income. Carriers rely on a certain average revenue per user (ARPU) not only to make a profit but also to invest in infrastructure to ensure growth. Things start to unravel if users are ultimately unable or unwilling pay for the increase in connections and data bandwidth at the carriers’ required rate.

9 While the benefits of
connectivity are well documented, actual access, together with the desired bandwidth and data for mobile devices, is restricted by a diverse set of factors. They range in scale from personal (an individual’s ability to pay for service) to infrastructure (insufficient reach and bandwidth, and regulatory constrictions). A complex network of industry players has built the infrastructure to enable wide- spread access as well as the required bandwidth. At the core of this network sit mobile carriers, or Mobile Network Operators (MNOs), that typically own the end-consumer relationship for businesses and individuals.

10 For non-telco brands and
marketers, everything noted to this point provides important context for their ultimate goal: to engage with customers on their mobile devices. However, the marketing industry still struggles with finding the right value offer to a customer, value which would make consumers engage with a brand. Marketers have struggled with developing the right engagement mechanisms for existing users (mobile display ads only take you so far and don’t yet leverage the creative potential that mobile broadband offers). The emergence of a new audience presents an additional challenge, one whose solution is highly unlikely to be found by traditional means. And so, marketers should not simply apply legacy advertising mechanics to a fundamentally new engagement ecosystem. New strategies are required to leverage mobile connections in a more meaningful and effective way.

11 This paper, the second
in the REDThink series by OgilvyRED, acts as springboard for companies, vertical markets, and brands, which will directly or indirectly benefit from enhanced connectivity around the world. It will draw a high-level picture of the current ecosystem and its constraints. It will also highlight innovative concepts currently being used to meet the challenge of providing internet accessibility through mobile broadband. We hope to provide thought starters for carriers as well as for marketers on how to think about new ways to create winning propositions that benefit customers, carriers, and other members of the connectivity ecosystem.

12 1 WHO’S CONNECTED, WHO
ISN’T, AT WHAT COST?

13 1 7 B I
L L I O N Regardless of which source you believe — the United Nations or the U.S. Census Bureau — the world population stands at about 7 billion. Mobile broadband has emerged as a standard utility in technologically developed markets, but elsewhere it is scarce to nonexistent.

14 THREE GROUPS People who
are connected to the internet and use its services People for whom internet service is available but unaffordable (due to prohibitive data costs for instance) Those who are unconnected THIS MEANS THAT THE UNIVERSE OF THE INTERNET BREAKS DOWN INTO ROUGHLY O1 O2 O3 The latest available research indicates that the number of internet users worldwide grew from 1.6 billion in 2008 to 2.9 billion by the end of 2014. This means that more than 4 billion people — or about 60 percent of the world population — are unconnected. About 10 percent to 15 percent of the latter group live in remote and/or badly impoverished places, where internet service simply doesn’t exist. Current estimates put 3G coverage at 5.2 billion people worldwide. However, only 2.5 billion people are connecting to the internet. This means that while another 2.7 billion people may have access, they are not using it.

15 Mobile costs hit poor
nations the hardest. As a result, people decline data plans, and carriers lack profits to improve networks. THEBITE OFMEGABYTES Brazil China U.S. Turkey India 39.25 15.2 13.2 12.83 8.79 HOURSWORKEDTOPAY AMOBILEPHONEBILL India Brazil China U.S. Turkey 1,240 355 200 76 286 HOURSWORKEDTO PURCHASEASMARTPHONE India Brazil China U.S. Turkey 57 43 77 96 49 %OFSMARTPHONEUSERS WITHADATAPLAN Based on Minimum Wage Sources: McKinsey, ITU, Nielsen, Forbes August 2015

16 But even in developed
markets, the ability to pay for connectivity is neither a given nor factored into household budgets. Consumers are very conscious of their data allowances and turn to wifi as often as possible. Consider the statistics: Among the smartphone-dependent population of the United States, 51 percent of users report exceeding their mobile plan’s data allowance; among those people, 15 percent say they “frequently” tap out of data. It’s safe to conclude that restrictive allowances are a significant bottleneck for people who rely heavily on mobile-data usage. About 20 percent of smartphone users say they considered it a financial burden. AFFORDABILITY AND DISCRETIONARY INCOME ARE FUNDAMENTAL DETERMINING FACTORS FOR BEING CONNECTED. In developing nations,

17 In many cases the
costs are “invisible.” If a user has a contract that charges $60 a month for up to 6GB of data, a 360MB game app costs $3.60 for the download alone. Streaming Netflix for an hour under the same plan, at a medium download rate, costs about $7. The people who complain about the high cost of using a smartphone are not simply whining. With the widening income gap and major carriers increasingly targeting high- income customers with plans that cost $60-plus a month for a single device, a significant portion of the population in developing markets is very self-conscious as to when they use their data plan vs. tapping into the increasing amount of free wifi options. This situation is projected to worsen, as more devices per household become connected at the same time that the per-household cost of connectivity increases.

18 THE BOTTOM LINE IS
that the cost of being connected is a significant line item in the household budget -- one that proves prominent on consumers’ minds to the extent that it can potentially be prohibitive to certain segments of the population.

19 2 WINNERS LOSERS MOBILE-CONNECTIVITY
ECOSYSTEM IN THE

20 2is in some respects
a social equalizer, in many ways it benefits some more than others. To understand this apparent contradiction, it’s helpful to know the three basic components of, or players in, the mobile-connectivity ecosystem: WHILE MOBILE CONNECTIVITY

21 INFRASTRUCTURE PROVIDERS, AND IN
PARTICULAR, CARRIERS. Carriers — also called telcos or providers — play the most pivotal role in the ecosystem. They include such companies as Vodafone, Verizon, Airtel, Claro, Singtel, and SK Telecom. The carriers’ power (and thus their value) derives from acquiring or licensing access to the infrastructure that connects consumers with providers of services and content. The providers’ primary function is the very thing that enables mobile connectivity. They operate the network and provide the access point for devices and consumers. O1

22 PROVIDERS OF SERVICES AND
CONTENT. This diverse group includes services such as entertainment companies (Netflix), finance and payment services (PayPal), information providers (news outlets, directories, maps, traffic), educational products, ecommerce outlets, OTT messaging or social media platforms. While the majority of interactions of services and content involve actual consumers, there will be a dramatic increase in machine-to-machine (M2M) protocols as more “objects” beyond mobile devices go online (see IoT). To date, content and service providers have not played a key role in providing access; rather, they have simply relied on the connectivity supplied by carriers, to serve consumers. O2

23 CONSUMERS OF SERVICES AND
CONTENT. “Consumers” is a bit of a misnomer in this context. For the most part, in the mobile-connectivity ecosystem, the term applies to individuals, businesses, or government entities that benefit from the services provided. Consumers have paid carriers for baseline connectivity, and occasionally for access to select services, based on the providers’ service model. With the advent and growth of the IoT — essentially, machines connecting to the infrastructure — we expect a dramatic increase in the exchange of data between machines in the IoT to either individuals (this is called an M2P interface) or machines (as mentioned above, this is an M2M connection). O3

24 INFRASTRUCTURE CONSUMPTION SERVICES &
CONTENT Education, Health Care, Navigation, Entertainment, Cities, Financial Services, Messaging & Social Individual, Business, IoT Carriers, Infrastructure Providers CONSUMERS OF SERVICES & CONTENT

25 are multidimensional and well
documented on several geographical scales: local, city, regional (often, rural versus urban), and national. The extent of a nation’s mobile connectivity, and the benefits arising from that connectivity, depends on many factors. Figuring into the equation are things such as the size and health of a nation’s economy (often, as measured by the GDP and per-capita income); literacy, poverty, and employment rates; technological progress; and a variety of socioeconomic and cultural factors, such as racial and gender equality and access to healthcare. THE BENEFITS OF MOBILE CONNECTIVITY “Around 400 million people in the last year got a smartphone. If you think that’s a big deal, imagine the impact on that person in the developing world.” - Eric Schmidt, Executive Chairman, Google

26 In developing nations with
low connectivity, programs to increase connectivity can show dramatic results. For instance, access to information and transparency about political instability, nutrition, the environment, and living conditions can help predict the outbreak of an infectious disease. A nation’s agricultural production and economy can improve quickly when mobile connectivity gives farmers access to information about such basic things as weather forecasts and commodity prices. Villages and communities that emerge from isolation thanks to mobile connectivity are often able to introduce better health and education programs.

27 In developed nations, the
benefits of higher bandwidth may seem more trivial, providing such luxuries as access to video streaming or graphics-and-data–intensive mobile games. Higher bandwidth can also instantly improve productivity in businesses that rely on data-heavy formats. Research by companies such as Google and Huawei estimates that “increasing the internet connectivity by 10 percent in a country increases the GDP by up to 1.4 percent.”

28 Smart cities constitute another
focal point of development, with the promise of faster predictive emergency response, more efficient energy management, better traffic control and more effective municipal servicing.

29 HIERARCHY OF CONNECTIVITY NEEDS
basicaccess developedmarkets highspeed,lowlatency developingmarkets ENTERTAINMENT BASIC PROVISIONS (UTILITIES) AUTOMATED LIVING & BUSINESS EDUCATION BUSINESS INFRASTRUCTURE HEALTHCARE EXTENDED INFORMATION ACCESS

30 The many potentially profit-generating
benefits to a company also include access to a larger group of consumers/customers outside of their direct physical reach as larger groups of the population connect more frequently. At the company or business level, Verizon predicts that some of the world’s top corporations could become 10 percent more profitable by 2025, if they use IoT products and solutions intensively.

31 2GREATEST CHALLENGE TO THE
ECOSYSTEM? What is the

32 If the benefits of
greater mobile connectivity and bandwidth are all but guaranteed, it’s fair to ask why the services aren’t universally available. The answer is complicated. To achieve greater coverage and meet increased demand, carriers must invest significantly in infrastructure. They must do so in a highly competitive environment, with new carriers entering the market, questions about consumers’ ability or willingness to pay for the voice and data services, not to mention government regulation and taxation. Despite all of the variables, one thingisforsure:demandisandwillcontinue to increase rapidly, so not investing in the delivery system (spectrum acquisition, hardware and cell sites, 5G infrastructure) is simply not an option. 4G3G GLOBAL MOBILE BROADBAND POPULATION COVERAGE 22% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 34% 0% 43% 5% 2% 50% 56% 11% 66% 19% 73% 26% 76% 35% 81% 44% 84% 50% 86% 56% 86% 60% 86% 63% Source: The Mobile Economy 2015, GSMA

33 — in some cases,
with significant investments. In the U.S., T-Mobile’s recent network upgrades reportedly cost $4 billion. That’s just part of category-wide capital expenditures (CapEx) expected to reach $1.4 trillion globally by 2020. Not surprisingly, there is risk associated with this kind of capital outlay. An analysis of 45 carriers by the telecommunications research firm Ovum published in 2014 found a CapEx increase of 3 percent year-over-year but revenue growth of just 0.6 percent. According to Ovum and GSMA, the largest association of mobile carriers in the world, the industry’s compound annual growth rate (CAGR) between 2014 and 2019 will improve to as much as 2.5 percent. In past years, that number reached as high as 4 percent. The low return on investment puts pressure on carriers to find new ways to increase revenue, which is tricky in a market that is still developing, highly competitive, and that faces increasing costs to comply with new government regulations. CARRIERS ARE RESPONDING

34 (US$ BN) TOTAL GLOBAL
REVENUES (US$ BN) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1,029 1,085 1,148 1,244 1,321 1,382 1,124 1,200 1,284 1,353 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 161 183 216 233 236 250 198 229 233 244 GLOBAL MOBILE OPERATOR CAPEX Source: GSMA: The Mobile Economy, 2015

35 In developed markets, carriers
are struggling to justify consumer-service pricing. Criticisms include a lack of transparency and a bias toward wealthy users, which invites scrutiny by consumer-advocacy groups. The core financial issue, which we alluded to earlier, is whether investing in new infrastructure will provide sufficient cost savings and revenue enhancement to offset the decline in consumer pricing. For now, the answer appears to be “no.”

36 Accordingtoonereport,providers’total cost of operations
(TCO) for mobile broadband networking is projected to fall by a factor of three through the year 2018, while selling prices per GB of data are projected to fall by a factor of 10. Increased competition in the marketplace contributes to the falling revenue. The unbundling of long-term service contracts and phone subsidies is driving an increase in churn rates in developed markets. Hence, carriers are increasinglyseekingnewrevenuesources beyond simple data-plan charges. EBITDA Margin GLOBAL PROFITABILITY FOR CARRIERS Source: GSMA: The Mobile Economy, 2015 36.6% 36.4% 33.5% 33.5%33.3% 34.9% 36.9% Q1-Q3 2008 2009 2010 2011 2012 2013 2014

237
SUPPLY
DEMAND
The
EQUATION

38 Let’s look at sticking
points and solutions on both the supply and demand sides. SO, HOW CAN CARRIERS ADDRESS THE MARKET CHALLENGES?

39 In the mobile market,
supply consists primarily of the carriers and their services, as well as the adjacent supplier infrastructure. With lower data rates in developing markets and higher churn rates in developed markets, ARPU is decreasing. SUPPLY O1

40 which they are seeking
to capitalize on by replacing unlimited data plans with tiered plans. Interestingly, carriers are now adding service contingents (e.g. free usage of messenger platforms) for additional fees on top of their tiered plans to capture incremental revenue. In urban areas, however, larger carriers are facing competition and a decreased demand for data services, as new companies offer wifi solutions. At the same time, infrastructure sourcing is becoming more complex and competitive, also due to the entrance of new companies to the market. They are offering higher bandwidth with lower latency, and also more readily employing new technologies — satellites and drones, for example — to introduce connectivity in developing areas. CARRIERS IN DEVELOPED MARKETS ARE SEEING AN INCREASE IN DATA CONSUMPTION,

41 Traditional carriers are also
facing competition from significant players, such as Google, that are providing direct-to-consumer data solutions as mobile virtual network operators, or MVNOs. Currently MVNOs are addressing certain segments in the population with specific needs (e.g., low-cost, specific long-distance destination calling etc.). They do not necessarily provide the largest network or best bandwidth. However, more players besides Google with significant market access might be testing their way into this market soon.

42 Regulation and taxation can
also be an issue; generally speaking, they vary greatly depending on market and do not support a highly innovative business environment. Faced with slowing revenue growth from voice and text services, carriers are seeking new sources of income through value-added services, or VAS. Over-the-top (OTT) providers, such as Skype, WhatsApp, and Line currently own this competitive environment. Carriers are responding now with a GSMA supported platform called RCS (Rich Communications Services). This platform allows carriers to offer similar services as OTT messaging providers (e.g., image or file sharing and VoIP), but without having to tap into the data allowance of the consumer. The success of this platform is likely going to succeed or fail with the quality of the user experience. OTT messenger platforms

43 Demand for basic connectivity
and increased data is driven by three factors: A significant increase in consumers being connected to voice or voice/ data services. A significant increase in the number of connected devices in the IoT. New services requiring higher data bandwidth (video and games, for instance) and lower latency (connected cars, for example). DEMAND O2 O1 O2 O3

44 Ericsson predicts mobile data
usage will grow more than tenfold by 2021, with video streaming accounting for almost 70 percent of traffic. The vast majority of the so-called next billion — that is, masses of new users — will go online via mobile devices. GSMA estimates 1 billion new mobile users over the course of the next five years until 2020, which represents an increase of 27 percent from today’s 3.6 billion users. (PB per month) VIDEO FUELING STRONG MOBILE DATA GROWTH Source: Cisco VNI Global Mobile Data Traffic Forecase Update, 2015-2020 Web/data File sharing Video Audio streaming 2,523 4,175 6,765 10,666 16,140 24,314 2015 2016 2017 2018 20192014

45 not only because of
the increase in new users, but also because data-intensive services grow as connection speeds increase, and people become more comfortable with smaller screens (which is definitely the case). From a consumer perspective, video is by far the No. 1 driver for exponential growth in data demand. At the same time, the growth of the IoT will produce more connection points and data exchanges. According to Cisco, by the year 2019 more than 10 billion devices will exchange an estimated 35 quintillion bytes of information per month. (We don’t have room for all of the zeros here, but for the record, a quintillion is a million raised to the power of 5.) You heard about the traffic jams in New York when the Pope visited? That’s going to be a picnic compared to the radio-wave congestion caused by the increase in connected devices in the IoT. DATA DEMANDS WILL INCREASE

46 So, consumers need more
bandwidth, and 5G is part of the answer. In fact, 5G is even more important to industries such as healthcare and driverless cars. 5G promises to reduce latency and increase data speeds to the extent that autonomous cars will be able to make driving decisions in milliseconds based on real-time information from a variety of sources around them.

47 3 TACKLING CONNECTIVITY CHALLENGE
HOW ARE INNOVATORS the

3 The connectivity market place
is complex, and challenged. But it is equally obvious, that the benefits of enhanced connectivity and increased access to the internet are tremendous and desirable. The logical conclusion is a market that sees a great amount of innovation both from incumbents as well as new entrants. 48 ACCESS SPONSORHIPS O1 CARRIER SPONSORED ACCESS AND DATA BRAND/PROVIDER SPONSORED MODELS DIRECT-TO-CONSUMER INFRASTRUCTURE 1.1 1.2 1.3 LOCAL EMPOWERMENTO2 IOT O3 FINANCIAL SERVICES O4

49 In any case, zero-rating
certain data packages provides a fundamental pillar for later business opportunities. Since consumers, by definition, don’t bear the cost of zero-rating service, it is covered by either carriers, brands or content services. Let’s look at various sponsorship scenarios. Typical access sponsorship is making use of a practice called “zero-rating,” which means providing access to certain content or services at no charge to the consumer. Zero-rating, if misused, draws scrutiny and sometimes harsh criticism, as evidenced by the controversy that surrounded Facebook’s recent attempt to introduce its Free Basics service in India. ACCESS SPONSORSHIPS ACCESS SPONSORSHIPS CAN COME IN A VARIETY OF FASHIONS. O1

The majority of access sponsorships
are underwritten by the carriers, which provide limited data and bandwidth for free. In some cases, this free data is used to gain a competitive product advantage, as T-Mobile did with Binge On. In other cases, fronting partners provide content for free but have agreements with the carriers not to charge for the engagement, as is the case with Facebook’s Free Basics. Either way, carriers have an incentive to zero-rate in order to enhance their product, engage users who will eventually pay for services, and upsell existing subscribers more expensive data plans. 1.1 ACCESSANDDATA CARRIER-SPONSORED 50 ACCESS SPONSORSHIPSO1

ACCESS SPONSORSHIPS 51 FREE BASICS/
INTERNET.ORG O1 Launched in developing markets to provide free low-bandwidth connectivity. Content developers are welcome to provide their products via Free Basics at no cost. As a business tool, it works: about 50 percent of Free Basics users upgrade to paid data plans after their initial free trial expires, providing carriers with a base for subscriber acquisition. O1

52 Launched in 2012 and
reportedly now reaching 600 million people in 60 countries, Wikipedia Zero provides free access to its content. Data is positioned as educational, and access is being paid for by about 80 carriers who believe there is a halo effect on their brands by being associated with an ostensibly educational effort. WIKIPEDIA ZERO O2 ACCESS SPONSORSHIPSO1

53 T-MOBILE U.S. BINGE ON
Following the success of its Music Freedom initiative, which lets users stream music services like Spotify at no cost, T-Mobile launched Binge On. It enables subscribers to watch low-bandwidth (480p) versions of certain video services over their network. Services include Netflix, Hulu, and HBO Go. T-Mobile hopes to pick up more subscribers, but there’s a hitch: the current service is under scrutiny as a violation of net- neutrality, because only select video services are offered. O3 ACCESS SPONSORSHIPSO1

54 APP-BUNDLED DATA PLANS Strictly
speaking, this is not a zero-rating practice, since consumers do have to pay for them. Providers, however, such as Singtel in Singapore, are offering prepaid data plans that include free (up to a daily limit) use of prechosen social or messenger apps, such as Facebook, Line or WhatsApp. The consumer essentially pays a flat fee for all data used by the specifically chosen app. Interestingly but not surprisingly, the free use of WhatsApp does not include the use of its VoIP solution for voice calls. Cell C and other African carriers are pursuing similar offer packages. O4 ACCESS SPONSORSHIPSO1

In some cases, content companies
will pay carriers to compensate for the increase in data usage. 1.2 SPONSOREDMODELS BRAND/PROVIDER 55 ACCESS SPONSORSHIPSO1

56 to a limited set
of Google services (search and Gmail), but are prompted to pay if they surf “too far away” from the original property, but executing multiple click- throughs from a single search. Google reimburses carriers for Free Zone access. App developers can be incentivized to co-sponsor content access through “free data,” and Google is charting the technological waters for certain Android apps to provide “free access.” A recent report noted that Google’s version of zero- rating goes beyond a one- off deal, allowing developers to create apps that live on. Google also offers sponsored access via Google Free Zone, where users have access India’s largest carrier, which also has significant presence in Africa, recently confirmed that it is launching Airtel Zero, which will allow companies to buy data in order to offer their apps to consumers at no cost. ACCESS SPONSORSHIPSO1 O2O1

57 & ACCESS SPONSORSHIPSO1 O3
program (non-Prime members can still access the entire content catalogue for a rental fee per movie/show), and Amazon has found a new outlet to acquire new Prime members on the fly, so to speak. Amazon Prime members are now able to stream Amazon Prime video content for free over JetBlue’s inflight network. It is a win-win deal for the companies. JetBlue is offering an extremely competitive entertainment

58 ACCESS SPONSORSHIPSO1 O3 on
its head, by rewarding consumers with free data for clicking on ads. The mCent app provides over 30 million consumers access to free apps. For each app trial that consumers undertake they are granted free data, paid for by the app advertiser. This model enables advertisers, which include app developers Zynga, Hulu, Saavn, and Kakao to create a trial with a well- documented but previously unengaged audience. Jana has integrated the system into the billing systems of 311 carriers in 93 countries. Used almost exclusively in developing nations, this is essentially an advertising platform for marketers and brands to engage with consumers via their mobile devices. The model works around a well-known impediment to the success of mobile advertising, namely that consumers know that clicking on ads will count against their data plan. Jana has turned this principle

59 passing along the cost
to the advertising app/brand. Opera has also introduced a sponsored web pass, which enables consumers (especially, first-time mobile users) such things as a free day of mobile-internet usage, or a free hour on Twitter. Advertisers sponsor these offerings. Through a feature called App Pass, carriers provide subsidized data access to applications. Carriers can present app offers through the browser, allowing cost- free use of the apps, albeit for a limited time. Carriers decide whether they want to provide this access for free, and capitalize on it with their own brand or by generating revenue by ACCESS SPONSORSHIPSO1 O5

60 Another way to provide
access is based on an ad model where the advertising revenues pay for access through wifi. 1.3 INFRASTRUCTURE DIRECT-TO-CONSUMER ACCESS SPONSORSHIPSO1

LINKNYC This ambitious project will
provide New York City with free, super-high-speed wifi in all five boroughs. LinkNYC is being built by a newly founded company called Intersection. The company builds digital billboards that double as wifi towers. The project is funded by the advertising revenue from these digital billboards (OOH). Intersection and the City of New York will share this revenue. This project allows users to dramatically reduce their data usage while in the city (and thus potentially the revenue for carriers) and it allows tourists from outside of the country to omit roaming fees for data services. The first “links” have already been fired up, and the group expects to have over 2,000 installed throughout the city within a year. O1 61 ACCESS SPONSORSHIPSO1

62 LOCALEMPOWERMENT Especially in developing
markets we are observing a variety of projects to provide basic accessibility by empowering local groups to establish self- sufficient access points. O2

LOCAL EMPOWERMENTO2 Tone is a
OTT service which provides a platform to locally empower communities. It provides connectivity and service in previously underserved regions. One such empowerment program is mFish, in Indonesia. Tone is providing a kit to local fishermen that includes a phone, an educational set, and a SIM card for a local carrier. The data is not free, but it comes at a lower rate for a promotional period to allow the fishermen to understand the value of having access to services such as GPS, local weather, fish maps and chat functionality. The idea is that the service will pay for itself, and thus be “free,” by enabling fishermen to realize cost savings by running their business more efficiently. Just as importantly, mFish overcomes the challenge of digital literacy with an educational introductory kit. This allows local NGOs that work with Tone and the carrier on the ground to educate the fishermen on the usage of the phones. The kit also comes with a solar power-based charger for the phone to overcome any electricity shortages. Local NGO employees also have the opportunity through Tone’s software to directly chat with the fishermen and support them with any queries. 63 O1

64 Tone reinvests 20 percent
of profitsinsocialandenvironmental initiatives. Carriers are paying Tone a portion of the data revenue for this acquisition effort. The government subsidizes the original infrastructure – for instance, the cost of installing cell towers – through a fund to which local carriers contribute.

This Gilat Satcom offering provides
internet infrastructure via a private satellite network to what the company calls a nano-ISP. Examples of nano- ISPs include schools, shops, and churches, where the carrier installs hardware to receive the satellite signals. The carrier resells the signal to nano-ISPs for a very low cost. Prices are expected to be as low as $1 a month, and the network is designed to scale up. It thus enables local entities (nano- ISPs) to become small businesses. 65 LOCAL EMPOWERMENTO2 O2 VILLAGE ISLAND

66 allowing locals internet access
and real-time upstream and downstream data sharing to optimize the supply chain to the local kiosks and measure the efficiency of power generation. In addition, this connectivity allows for a range of other services to be considered, such as real-time medical information sharing or access to market prices for agricultural products. EKOCENTER is run as a social enterprise, meaning it combines philanthropic and commercial interests of Coca-Cola and its partners. For Coca-Cola, there are not only clear, tangible benefits (increased sales inpreviously undersupplied regions), but also intangible benefits to generate positive brand impact with stakeholders and consumers. EKOCENTER At Mobile World Congress 2015 (MWC), Ericsson and Coca-Cola revealed the “EKOCENTER” project, which is intended to bring safe drinking water, solar energy and mobile connectivity to communities in the developing world. EKOCENTER is a modular community market (kiosk) that is run by a local entrepreneur and supplies basic goods and services to underserved communities. Functionality that can be added beyond safe water, electricity and connectivity to jump- start community development includes social facilities and entertainment; power generation for charging phones; cooling/refrigeration of vaccines; education opportunities; and much more. Connectivity is fully integrated, O3 LOCAL EMPOWERMENTO2

This company addresses the lack
of energy availability in certain parts of some developing nations, which ironically are within reach of service but unable to use it for lack of a power source. Intelligent Energy thus addresses two essential elements of connectivity: network availability and power. Intelligent Energy develops portable fuel cell systems that can remotely power phones without access to “the grid,” thus overcoming another large barrier in developing countries that are struggling with energy more than with connectivity provisioning. 67 LOCAL EMPOWERMENTO2 04

68
IOTINITIATIVES
O3

69 When it comes to
connecting the internet of things, the most prominent efforts from a consumer-facing perspective seem to be made in the area of connected cars. AT&T just announced a major deal with Ford to bring more than 10 million connected cars to the street within 5 years. AT&T also now allows users to add their car as another device in a data plan. While adding a car still comes at the cost of a monthly fee, Tesla is offering 3 years of free connectivity to AT&T’s 3G network within its innovative EVs. Carriers including Vodafone and Deutsche Telekom are creating models similar to AT&T’s. CONNECTED CARSO1 IOT INITIATIVESO3

IOT INTEGRATION AT SCALEO2 70
IOT INITIATIVESO3 Many major carriers have announced and piloted IoT connectivity platforms aimed at specific verticals. Telefonica, AT&T, Verizon, Deutsche Telekom, Orange, Telstra and others are tackling topics such as smart cities, connected homes, health tracking, manufacturing and even cattle tracking. In some instances, these platforms have been built for a certain vertical or challenge, while in other examples they are a direct collaboration with a specific brand, such as Coca-Cola or Nestle. At the moment, neither of these platforms seems to drive significant revenue compared to the core business, and remains an innovation opportunity rather than a scalable business play.

71
FINANCIAL
SERVICES
O4

72 Arguably, the industry that
has embraced mobile accessibility the most and made huge strides is the financial services industry – specifically providers of payment solutions, credit/lending services and insurance, particularly in developing nations. In this space, start-ups, established banking players and carriers are working together to provide these services. Vodafone’s m-pesa service in Africa, India, and Eastern Europe is one of the more prominent and successful examples of this. In 2015 in South Africa, the local bank FNB offered its customers pre- and post-paid cell coverage. It currently uses a specific carrier’s cell towers, but says it is open to expanding to other carriers as well. The service is a natural extension of the bank’s financial services business, which includes a rewards program and mobile bill-pay capability. FINANCIAL SERVICES CARRIER INTEGRATIONO1 WITH FINANCIAL SERVICESO4

73 (2001-2014; year-end) NUMBER OF
LIVE MOBILE MONEY SERVICES BY REGION 2001 1 2002 1 2003 1 2004 4 2005 5 2006 6 2007 10 2008 16 2009 38 2010 66 2011 116 2012 174 2013 232 2014 255 As of December 2014, there were 255 live mobile money services in 89 markets. Sub-Saharan Africa South Asia East Asia & Pacific Latin America Middle East & North Africa Europe & Central Asia Source: GSMA: The Mobile Economy, 2015

DELIVERING THE BUSINESS CASE AND
ROADMAP TO BUILD A MOBILE COMMERCE PLATFORM IN EAST AFRICA MOBILE CONSULTING FOR GLOBAL CPG 74 Through in-depth market research, OgilvyRED was able to convince local carriers in Africa that their mobile payments system should be evolved from a peer-to-peer system to a system that allows for payments at retailers. Costs for the SMS, that were required to make payments, were absorbed by the carriers. This in return created brand preference for these carriers in a market, where consumers would typically carry multiple SIM cards. Furthermore, mobile payments were introduced for payments along the supply chain from distributor to retailer. The risk of fraud and simple cash theft was mitigated and all transactions could electronically be accounted for.

75 4 WHAT IS OPPORTUNITY?
the

76 As carriers are trying
to identify new sources of revenue and potential investors in the ecosystem, there is an opportunity for companies and brands to step in to collaborate for success. Beneficiaries differ based on the region and their state of technology maturity. Some (few) companies might be looking towards becoming connectivity providers with direct contact to the end consumers of such services. But the majority should probably be looking at opportunities to create value for the company through sponsorship or subsidizing deals. Third-party platforms, such as Jana and Opera Max, have already shown success by tapping into this space to garner advertising dollars. The challenge with this model will be whether pure sponsoring can be a sustainable tactic given the relatively negative sentiment towards advertisements among consumers. Meanwhile, verticals that will benefit from a more connected ecosystem through IoT are starting to form alliances with automotive and manufacturing companies. While Verizon and AT&T are currently focusing much of their attention on connecting mobile devices to their networks, both appear to be placing greater emphasis on IoT connections and management.

77 MOBILE-ENABLED PRODUCTS AND SERVICES
IN THE DEVELOPING WORLD Source: GSMA: The Mobile Economy, 2015 Note that others include disaster response, energy access, green networks, midentity, NFC and smart cities PRE 2009 2009 2010 2011 2012 2013 2014 0 200 400 600 800 1000 1200 1400 Health MoneyLearning Others

78 4 WHY BRANDS SHOULD
CARE

79 BRANDS ARE STILL STRUGGLINGwith
how to engage with consumers on mobile devices beyond buying media to gain click-throughs. This model is quickly becoming outdated in a new era of consumer behavior. Simply put, mobile users dislike the current mobile-advertising model, and are rejecting it by not clicking through. Companies planning to enter the connectivity space for branding and marketing purposes have to re- evaluate how they can produce value for their enterprises beyond ad clicks.

80 This new way of
thinking and acting as a marketer does not obviate the need to establish and move toward a commercial goal, albeit with greater transparency to consumers. Brand benefits do not necessarily have to be directly tied to revenue or margin (tangible benefits). They can also provide intangible (emotional, psychological) benefits. It also may not be limited to individual companies making investments in providing access and connectivity, as it is likely more economical to form consortiums or industry associations. “BRANDS THAT DO: BUILDING BEHAVIOR BRANDS,” In its paper OgilvyRED explains how modern brands take action to create value instead of just asserting the brand’s message and raison d’étre. The basic tenet is that marketing is a service that delivers real consumer benefits, such as mobile connectivity.

81
4TANGIBLE
BENEFITS

82 THROUGH LONG-TERM BUSINESS MODEL
INNOVATION For example: TANGIBLE BENEFITS New pricing, new revenue sources, new product pipelines. Bringing the next billion online will create a huge market for direct-to-consumer offerings. Increased levels of income will improve consumer ability to pay for incremental goods. Fundamental cost-structure enhancements. In healthcare, for example, better data may be voluntarily provided by patients (mobile users) to help healthcare providers with risk assessment, to reduce the cost of insurance products. O1 O2

83 DIRECT REVENUE INCREASE THROUGH
INCREASED SALES TANGIBLE BENEFITS For example: Through mobile commerce and direct-to-consumer sales. For example, fast-food restaurants could own car connectivity, and the in-car screen for preordering when driving near restaurants. By increasing sales outlets, as the Coke EKOCENTER example illustrates. Product bundling and co- marketing, as shown in the collaboration between JetBlue and Amazon Prime. O4O3 O5

84 TANGIBLE BENEFITS Through efficiency
gains achieved with better value-chain visibility, decreased cost of acquisition, and decreased cost of advertising. In the example of mFish, in Indonesia, brands get direct and highly targeted access to specific groups, directing acquisition investments to the precise audience for a brand. By capturing government subsidies or tax breaks. With more efficient customer servicing rerouting calls to messaging services using Facebook Messenger as a customer service outlet. O7O6 O8 For example: BY INDIRECT BOTTOM-LINE CONTRIBUTION

85 BY INDIRECT BOTTOM-LINE CONTRIBUTION
TANGIBLE BENEFITS By enhancing business decision- making capabilities, such as demand-based pricing on the fly, or using real-time data analysis. Insurance companies, for example, could tailor premium pricing in real time according to data they can collect if they “own” the consumer’s connectivity. 11 For example: (CONTINUED) By providing mobile connectivity to previously unconnected users. Direct marketing through OTT services such as WhatsApp are especially relevant in this case. Messenger platforms are increasingly being used not just for communication but also as transaction touchpoints (e.g., WeChat). Through an increase in customer base and brand exposure, using physical or digital trials, such as Jana has. 1009

86
4INTANGIBLE
BENEFITS

87 Increase perception of brand
as a digital and contemporary leader. Brands that have previously not been perceived as technology leaders can gain advantages. In agriculture, for instance, technology is making vast strides to enable better decision-making, with such simple products as mobile weather forecasting, and data-gathering and data-analysis tools. Improved positioning vis-a-vis indirect stakeholders, such as governmental bodies, NGOs, and supply chain partners (see Coke Ekocenter). Using mobile connectivity to enhance consumers’ perceptions of brands as innovative and service oriented. For example, Tesla is now updating its cars’ operating systems through a 3G connection, which frees owners from having to schedule a service appointment. Allow consumers to see brands as beneficial to communities, as Coke has done with the Coke Ekocenter. CAPITALIZE ON BRAND DIFFERENTIATION INTANGIBLE BENEFITS For example: 01 03 02 04

88 By driving an innovation
agenda and introducing opportunities for first-time mobile users to test and learn about a product. Through talent acquisition and retention. By building a company’s capabilities, exposing it to new technologies, and introducing it to new partners. INCREASE COMPANY FUTURE PROOFING INTANGIBLE BENEFITS For example: 05 06 07

89 4BARRIERS KEY ISSUES SOLVE
to

90
Net Neutrality

91 NET NEUTRALITY According to
Wikipedia, “Net neutrality… is the principle that internet service providers and governments should treat all data on the internet the same, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, or mode of communication.” The moment that companies (whether they are brands, social platforms, or carriers) provide access to content for free or for a lower price than other services, the issue of net neutrality kicks in. The aforementioned example of Facebook’s attempted introduction of Free Basics in India illustrates this point precisely. The message to marketers is that any potential opportunity or proposition must be vetted to ensure that it does not discriminate by limiting access to a single provider, or by allowing access to a single competitor’s product. Services like Jana have solved this equation, since it can be used to access any content or service. O1

92 Transparency of Business Models
to the Customers

93 TRANSPARENCY OF BUSINESS MODELS
TO CUSTOMERS The mobile connectivity ecosystem is not considered by consumers to be transparent. Companies that want to enter the ecosystem should make transparency a priority, to avoid alienating consumers or attracting the scrutiny of regulators. Consumers are not easily fooled and understand the popular phrase, “If you are not paying for it, you are the product.” Examples of success through transparency include Tone, which makes it clear that the company is making money from the mFish solution. This is tolerated and even appreciated by consumers because they perceive mFish as beneficial to the community due to the (transparent) way it has structured deals with the carrier and government. In the United States, Google Fi is showing carriers what it means to communicate with their customers in a simple manner about pricing, avoiding jargon or hidden fees. O2

94 Digital Literacy and Relevancy
of Offers

95 A key obstacle for
many developing markets is digital literacy. People are often not aware of the benefits of the internet, if provided through mobile devices, which are not affordable to large parts of the world’s population. Educational campaigns need to start here, and should not assume that everyone would be online if they just had access to a connection. The second obstacle is that it takes training to become familiar with navigating the offers and services including the pitfalls (e.g. spam, data security). The simpler the offer and value proposition, the better. Last but not least, many services have not been fully adapted into local context (language, data speeds). Especially in developing markets it cannot be assumed that English is the spoken language. Any service which adapts to local language and available bandwidth will have a clear advantage. DIGITAL LITERACY AND RELEVANCY OF OFFERS03

96 5 THOUGHT STARTERSWHY SHOULDN’T
WE...

97 the car’s telematics data.
Healthcare providers could sponsor connectivity for underserved communities in exchange for using the data to move from reactive to proactive prevention mechanisms. By sponsoring access in highly frequented areas, companies could be granted exclusive access to data that is being collected within these areas, allowing for dynamic pricing or product adjustment concepts. Think about an insurance company sponsoring all mobile access along highways, and thus being able to monitor real-time traffic behavior and adjust premium pricing accordingly. An insurance company could also simply pay for the car’s data contract, taking that burden off of the consumer in exchange for TAKE ADVANTAGE RETURN ON INSIGHTS (DATA) THAT MOBILE CONNECTIVITY PROVIDES of the 01 “One of the myths about the Internet of Things is that companies have all the data they need, but their real challenge is making sense of it. In reality, the cost of collecting some kinds of data remains too high, the quality of the data isn’t always good enough, and it remains difficult to integrate multiple data sources.” — Chris Murphy, Editor, Information Week

98 If the healthcare industry
could monitor compliance of medication intake in a real-time manner, it would be able to save billions in post-symptomatic treatment costs by preemptively improving positive outcome rates. Connected pillboxes are making a slow entry to the marketplace, but there are currently no scaled concepts in place to provide them free of data cost or to sponsor the data it takes to communicate with healthcare providers or caretakers. USE MOBILE CONNECTIVITY INTAKE OF MEDICATION 02 to monitor compliance of

99 SOCIAL ENTERPRISE CONCEPT TO
INCREASE BRAND IMPACT CPG/FMCG companies in particular struggle for differentiation because of the broad exposure of their brands and products. Becoming a sponsor of connectivity or empowering local communities through, for example, helping to overcome digital literacy barriers, could significantly boost their value proposition beyond the product, and create a more favorable selling environment. Think about a CPG company helping local women to become small business owners as resellers of data plans, or simply providing them with access to information to build new communal marketplaces. Or, consumer brands might sponsor the local adaptation of non-native content and services into the local language and data ecosystem. Use the 03

100 RETAILERS As carriers are
connecting more and more devices, is there a chance to become a retailer for more than just phones and tablets? What if household appliance manufacturers or home electronics companies sold their goods through the ecommerce sites of carriers? 04 CONSIDER CARRIERS as

101 Carriers already bill for
data plans to their customers, and some (though few) other regular billing activities can be processed through these carrier bills. Are there efficiency and convenience gains to be conceived by integrating other regular billing activities (e.g. utilities, media subscriptions) through a carrier’s system? This would potentially allow for a more comprehensive data view of individuals’ financial transactions and would also provide acquisition opportunities for subscription-based models (especially if these services are based on data usage). 05 FINANCIAL SERVICE COMPANIES CONSIDER CARRIERS as

102 As we are connecting
more and more devices, including our cars, will these brands be selling us connectivity and data plans as well connecting into a multitude of carriers in the background through soft SIM cards? What if major marketplaces or financial service providers become MVNOs? This would let them take ownership of consumer/customer data, contact, and reward activity, directly, through sponsored data. 06 MVNOs CREATE NEW

103 SPONSOR ACCESSACCESS CONTENT With
the advertising industry struggling to find meaningful ways to engage consumers on their phones, could content and the sponsorship of access to content become positive value components in the lives of the consumer and the brands? Consider, for instance, the WhatsApp video channel from Coca-Cola bringing consumers exclusive World Cup video coverage, free of data charges. 07

104 Any company that already
has or is looking into opportunities to sell directly to consumers might have an interest in expanding its potential customer base by providing them with free access to their mcommerce sites. Could marketplaces like OLX, eBay or Amazon or a consortia of brands look into creating unique, “free- of-charge” DTC offerings, providing more convenient and potentially more cost-effective ways for consumers to shop on their phones or tablets? This model could become especially interesting if carriers were paid for data-based on revenue share instead of fixed per-MB pricing. ENABLE E-COMMERCE 08 more

105 Messenger apps (Whatsapp, FB
Messenger, Line, Kik, KaKao Talk) have seen a massive surge in person- to-person traffic. Some of these platforms (e.g. FB Messenger) have already openly started to use their platform for business-to-person communication, opening the system up for customer service channels or even machine-initiated messaging (access or confirmation codes, etc.). Given that messaging is moving towards more video-based platforms, brands might innovate their customer service experience through video chat functionality, with the chat traffic paid for by the brands themselves. USE MESSENGER SYSTEMS CUSTOMER SERVICE 09 to provide

106 If brands engage in
larger-scale provisioning or sponsorship of accessibility, should governments not provide them with tax breaks as the brands are actually creating a community service? 10 PROVIDE RE-COMPENSATION SCENARIOS GOVERNMENTAL INCENTIVES through

107 Loyalty programs are struggling
with creating proper value exchange to promote for repeat engagements with their underlying brands. In developing markets, loyalty programs have long embraced “airtime” as one of the most coveted currencies to their consumers. Can data plans for connected devices not simply be paid off with loyalty points? If a customer can pay for taxis in New York with American Express Membership Rewards points, why can’t the same customer have an American express phone that is paid for via American Express purchases made with the mobile payment option? Why could frequent flyer programs not cover roaming charges with mileage? 11 LOYALTY PROGRAMS BETTER INTEGRATION for PROVIDE

108 With communities or public/private
partnerships providing cities with “free” wifi services that still need individual authentication (e.g., LinkNYC), can companies with preexisting accounts (Amazon Prime, Facebook, carrier accounts) not automatically pre-authorize access? And if these companies tracked movements through these networks, are there relevant offers they could provide in context, e.g. transportation subsidies by knowing when and where their customers are traveling (“Ikea just sponsored your subway ride to our store”)? 12 FREE ACCESS PROGRAMS with in cities INTEGRATE BRANDS

109 13 INCREASED ACCESSIBILITY through
ENGAGE IN GLOBAL TALENT DEVELOPMENT Certain industries (e.g., software, tech sectors) are struggling to grow and identify the right talent going forward. If increased connectivity means more access to education, can there be a long-term investment goal to bring this connectivity to regions where talent will most likely be sourced in the next 10 to 20 years?

110 Parts of the world
are or will soon be struggling with ways to better serve an aging population. If accessibility and connectivity mean better education, improved medical care, and potentially higher mobility, should a consortia from the public and private sectors not invest in overcoming certain levels of digital illiteracy and provide people with generation-specific services independent of a person’s financial capability? Ogilvy & Mather Singapore worked with Singtel to redesign the functionality of a smartphone that was then distributed to Singapore’s aging population. The restructuring dramatically simplified the phone’s interface and functions, allowing less digitally savvy customers to take advantage of basic functions such as games, camera and emergency calls. 14 AGING, CONNECTED POPULATION to serve anPOSITION BRANDS

111
CLOSING
THOUGHTS

112 Not really. Certain institutions
have demanded “the internet” be considered equal to basic life requirements like air and water. But this does not mean that the internet is equally as accessible and abundant (after all, clean water is certainly not ubiquitous or always free). It still requires an enormous amount of investment to keep the internet infrastructure operating, and the cost for this is not as easily redistributed throughout the complex ecosystem that has sprung up. The benefits the internet brings are in some cases hard to measure or attribute to the providers within the ecosystem. These market forces are not trivial, as they relate to trillions of dollars in investment and trillions in potential revenue. ? INTERNET “FREE” FOR Will we ever have

113 Do we have A
HOMEMADE INNOVATION DILEMMA? To me the biggest question for the future is will we really continue in the future to license spectrum – do governments license oxygen? No. The Internet is oxygen, it’s water.” – Vittorio Colao, CEO of Vodafone Group Currently governments are generating a significant income from auctioning off spectrum to carriers. Carriers, in turn, are forced into high-stakes auctions for this spectrum to remain competitive. The lease investment required, however, is directly subtracted from the carrier’s ability to invest further in infrastructure extension. The lack of this investment slows down growth in the economy, at the countrylevel,from enhanced connectivity. Is it worth re-doing the math to see if the benefits of an extended infrastructure investment would not overcompensate for the short term gains from these auctions at the federal level? “

114 WILL WE, IN 5
YEARS, REALLY CARE The simple answer is “maybe.” who provides us with access? Google Fi and Apple are already providing services that are carrier-independent. In many developing countries people carry two SIM cards and phones because the individual carriers services are either cheaper or better based on whether someone is in a rural or metro area, or whether people are making short or long distance calls. Carriers will obviously do everything to keep their brands relevant through a combination of direct (network strength) and indirect (value-added services) value propositions. In a best-case scenario, consumers do not have to worry about connectivity at all, because their devices will be automatically switching to the strongest signals, and their services will be provided by a third party that is invested in the content and service platform rather than the sheer connectivity.

115 WILL CARRIERS BECOME B2B
PLAYERS? If the scenario just described prevails, then carriers could find themselves becoming B2B players at scale and target resell partners (such as banks as MVNOs). This might dramatically decrease their individual cost of acquisition, as they might be selling in bulk. The effect on competition and innovation potential will have to be evaluated in this scenario. ? WHO ARE BUYERS THE and if so

116 THE OPPORTUNITY FOR ALL
When asked what lessons she would provide the audience about marketing in the digital age, Linda Boff, the CMO at GE, said: “Be sherpas for what is new and what is next. I think there is a real role today for marketers to identify what’s around the corner and then to translate that into business terms to help drive growth.” This applies to all companies and brands, whether they provide infrastructure and access, services and content, or are looking to profit from an increasingly connected global population.

117 and then, together, they
might just be able to create a brighter, more connected world while also doing good business. MOBILE ECOSYSTEM PLAYERS, WILL NEED TO COLLABORATE & COEXIST But the whether new or incumbent,

118 CREDITS OGILVY CONTRIBUTORS: Carla
Hendra Caylin Lo Chelsea Jones Devon Cottle Elizabeth Stroud Emily Arnold Jay Kurahashi Sofue Jeremy Katz Jess Kimball Joe Bargmann Mary McFarland Peter Fasano Priyank Mathur Sarah Tran Seth Greenberg Spencer Schrage Sydney Sadler EXPERTS & SOUNDING BOARDS: Colin O’Donnell Chief Innovation Officer, Intersection Derk Hendriksen VP Business Integration & GM EKOCENTER, The Coca-Cola Company Harald Neidhart Founder & Curator at MLOVE Mark Kaplan CEO and Founder, Tone Nathan Eagle CEO & Co-Founder, Jana DESIGN: Lori Argyle AUTHOR: Martin Lange Global Consulting Partner, OgilvyRED

119