1. APIs and Business Model Transformation
KPN Consulting
6 February 2013

2. The agenda
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Key Challenges for Telco 2.0 Innovation
What is Application Enablement
How does it contribute to the business
What have we done and where are we going
Lessons learned and next steps

3. The game for Telecom providers is rapidly changing
This causes the break-up of the value chain and service fragmentation
TELCO services
Devices / ClientsConnectivityServices
• Smartphones
• Tablets
• Apps
• Laptops
• M2M
TELCO
Network
OTT services
TELCO services
Break-up of the value chain
FRAGMENTED
SERVICES
FROM
OLD
GAME..
..TO NEW
GAME
FRAGMENTED
USER
EXPERIENCE
TELCO network
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KPN needs to develop an appealing strategy to cope with this

4. We see the innovation game is shifting towards flexible,
agile and low risk development of new services
Telco’s are typically focussed on large scale controlled innovation
Reduce Time to Market by
using the open innovation
power of 3rd parties
Lower costs in developing
and deploying new
services
Key opportunities
New applications that
substitute the traditional
Telco value add services
Growing number of OTT
services that only need a
bit pipe
Key threats

?

Size of the innovation
project, and level of
KPN control
Required % of
innovation successes
>90%
<20%
High
Low
?

?
? 

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5. Telco's can add a set of different assets to its value chain
Create and approach of ‘Building Blocks’
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Messaging
Mobile Fixed
Billing CRM
Subscriber
info
Cloud
App Store
Voice/
Telefony
Location iTV
Networks
- Control
- Status information
- Data streaming
Services
- Device
independency
- Content
Customer Data*)
- Identity
- Billing relation
Distribution power
- Consumers
- Business
KPN.com
Account
Mgt.
KPN
Store XL
BSSOSS
*) All under strict privacy compliancy rules

6. So changing the way we interact with the innovation
power outside is needed
Meet Nigel, our first step into connecting with innovators outside
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7. The agenda
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Key Challenges for Telco 2.0 Innovation
What is Application Enablement
How does it contribute to the business
What have we done and where are we going
Lessons learned and next steps

8. The IT landscape changes rapidly with dedicated apps
APIs are widely and publicly available on the Internet
The IT landscape is dominated
more and more by small
specialized Apps.
Around the globe the number of
available external interfaces
(APIs) is growing explosive.
These combined trends lead to a
growth of applications that
combine these into new
functions and applications
This way of innovation offers
Telco's an opportunity to open up
towards developers.
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9. We see three main areas of value in using APIs
Various strategies to engage with the different developer segments
Type of developers Examples
Head Google, Spotify, Corporates
Mid tail Gaming, Media, Specialists
Long tail Garage developers and start-ups
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Revenue
potential
Head Mid
tail
Long
tail
150 700 10,000+
Developer segments
developers
B2B B2C
ExternalInternal
Cost
Savings
New
business
opportunities
New
business
models
Process & IT
Optimization
Co Creation
Open Data
Community
management
Partner
management
IT
management

10. API Exposure Engine
Services Adaption Layer
Application Enablement platform: secure environment to expose APIs
KPN internal systems and 3rd party system can be connected and exposed
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Application Enablement Platform
Service Orchestration
SMS-C
MMS-C
M2MIMS
3rd party
platforms
BI
Voicemail LBS
Developer
Portal
Application Application Application Application
Policies
Security
Compliancy & privacy
Accounting
Support
Testing
Projects
Financials
OutsideAppsKPNSystems
iTV
Network
data
External secure
interface
Internal trusted
interface
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11. The agenda
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Key Challenges for Telco 2.0 Innovation
What is Application Enablement
How does it contribute to the business
What have we done and where are we going
Lessons learned and next steps

12. DevelopersKPN Assets
Applications/Services
Application
Enablement platform
(Standard APIs)
3rd party services
supermarket
(3PSSM, SDP)
Strong KPN value
propositions
Acceleration
(partnerships,
equity)
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BUILDING THE 2SBM ECOSYSTEM
Application Enablement is one step into the two-sided business
model
And supporting the KPN ambition as integrated access provider
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13. The agenda
13 06-02-2013KPN Strategic Innovation
Key Challenges for Telco 2.0 Innovation
What is Application Enablement
How does it contribute to the business
What have we done and where are we going
Lessons learned and next steps

14. We had a pilot platform up and running and working applications
build on top
Participation in various events to test our ideas and spread the word
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• 11 pilot contracts signed
• 2 Letters of Intent in the funnel
• 2 Applications operational
(BrightBird & Calendar42)
• 1 Press release (BrightBird)
Technology
Voice
iTV
Identity
Handset Info
Customer Profiles
QoS
…
SMS/MMS
LBS
Operator Billing
• Implemented a
pilot platform
• Exposed 3 APIs
based on the
OneAPI standard
• InApp Operator
Billing ready end
of June
• Potential of new
APIs to be
explored
APIs
Business
AmIHome: concept that uses
API location based service
to switch on/off lights and
thermostats if you are not
in the area of your home.
• TNW Hack Battle (event)
• ‘Stekkers van KPN’ (event)
48 people of 21 different companies
attended the first ‘Meet up’ at KPN
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15. The pilot environment cannot scale, to set next step there is a need
for a production environment
But also a discussion started on our business focus…
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Pilot functions Production requirements
Technology
• Reuse existing CallFactory
infrastructure for small scale pilot
• Selected number of developers and
limited number of APIs (3).
• Create an industry grade API
exposure platform to connect a
large number of developers and
multiple API services
Legal &
Compliance
• Pilot contracts with T&C and manual
on boarding of partners.
• Specific Opt-in process only usable
for Location Based Services.
• Online T&C for online on
boarding of developers.
• Generic Opt-In process for
multiple services
Business
• Support of various models like:
o transaction,
o revenue share
o freemium
o multiple price plans
• No mechanism in place to bill
developers for their usage.
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16. The main challenge is addressing all the different
segments
Current insight is that a Telco is not suited to address all segments
16
Large Mid Small
Revenuepotential/customer
Developer segments
Account
Management
Business Development &
Partner Management
Online Portal
Events & International Partners
Different type of APIs
• Common standardized
service (OneAPI)
• Specific, more advanced
API’s (IPTV)
Relevance of Telco customer
to developer
• Able to address Telco
customers via multiple
channels (Google, Apple,
etc.)
Ownership of relation with
developer
• Who is in charge?
• Segmentation
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17. SOCIAL ENERGY!
Case Study
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18. Social Energy! is an example of Open Data Co-Creation
And top-10 finalist of the TEDx Amsterdam Award 2012
Social Energy! was born at the Hack Battle of The Next Web (2012). In 24 hours
Developers created an application where ‘Rules’ could be set based on open data.
• The thermostat lowers the temperature in the home when the mobile phone leaves
the 6 km. perimeter of the house serving people who forget to do this manually.
• The thermostat raises the temperature when the mobile phone is within the 6km
perimeter.
Result: Social Energy! saves energy costs for the consumer in an effortless way
Two ingredients (API’s):
- eThermostaat by Essent
- Location data (LBS) by KPN
The advantage to the end user:
The thermostat lowers automatically
when no one is home
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19. The Open Data Collective is about: Initiators:
• Open data and monetizing the value
• Co-Creation sessions to define new useful data combinations
• Explore new business models and revenue streams
Goal of The Open Data Collective :
- Learn, inspire and use the possibilities of open data
Together we will work on:
- Business models based on open data / open platforms
- Data combinations resulting in market ready propositions based on combined data
Joining the collective will lead to:
- (unexpected) New propositions, new partnerships and a new customer base
Timeline:
Dec 2013Sep 2012
Inspire to open up data
Oct 2012
Create proof and execute
Jan 2013
First presentation
of propositions and
Business models
Start Open
data
collective
Invite
Companies to
Open Data
Collective
First testing of the
propositions and
Business models
Go to market
plan ready
First Co-Creation
session
Dec 2012 Apr 2013
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20. The agenda
20 06-02-2013KPN Strategic Innovation
Key Challenges for Telco 2.0 Innovation
What is Application Enablement
How does it contribute to the business
What have we done and where are we going
Lessons learned and next steps

21. Next steps defined by our lessons learned so far
Including the key challenge: time
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Transform KPN
architecture based on:
• Atomic Services
• Detach services from
network layers
Align a distribution
strategy together with
the business segments
• Leverage on a central
portal
• Innovation
outsourcing
Focus on B2B
approach
• Develop PoCs with
enterprise customers
• Participate in Open
Data Collective
• Find partners for a
Long Tail strategy
InternalExternal
TechnologyBusiness
Provide more valuable
functions via APIs:
• Cloud networking
• Software Defined
Networking
• Big Data Insigths &
Analytics

22. For large companies it is a feasible strategy to let the outside world do
their innovation
Future innovations can only be done in collaboration between the larger
companies
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