1. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.
13. 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. 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
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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. 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. 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. 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. 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.
20. 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. 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.
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22. 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.
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23. 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).
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24. 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. 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. 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. 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. 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.
30. 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.
32. 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. 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 $1.4 trillion globally by 2020.
Not surprisingly, there is risk associated with this
kind of capital outlay. An analysis of 45 carriers
by the telecommunications research firm Ovum
published in 2014 found a CapEx increase of 3
percent year-over-year but revenue growth of
just 0.6 percent. According to Ovum and GSMA,
the largest association of mobile carriers in the
world, the industry’s compound annual growth
rate (CAGR) between 2014 and 2019 will improve
to as much as 2.5 percent. In past years, that
number reached as high as 4 percent.
The low return on investment puts
pressure on carriers to find new ways
to increase revenue, which is tricky
in a market that is still developing,
highly competitive, and that faces
increasing costs to comply with new
government regulations.
CARRIERS ARE RESPONDING
34. 34
(US$ 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. 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. 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
38. 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. 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
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40. 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. 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. 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. 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
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44. 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. 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. 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.
48. 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
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CARRIER SPONSORED ACCESS AND DATA
BRAND/PROVIDER SPONSORED MODELS
DIRECT-TO-CONSUMER INFRASTRUCTURE
1.1
1.2
1.3
LOCAL EMPOWERMENTO2
IOT
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FINANCIAL SERVICES
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49. 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.
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50. 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
51. ACCESS SPONSORSHIPS
51
FREE BASICS/
INTERNET.ORG
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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.
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52. 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
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ACCESS SPONSORSHIPSO1
53. 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.
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ACCESS SPONSORSHIPSO1
54. 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
55. 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. 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. 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. 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. 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. 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
61. 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
63. 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. 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.
65. 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. 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
67. 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
69. 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
70. 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.
72. 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. 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
74. 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.
76. 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. 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
79. 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. 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.
82. 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. 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. 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. 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
87. 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. 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
91. 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
93. 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
95. 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
97. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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
112. 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. 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. 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. 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. 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. 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. 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