Presentation at Total telecom Festival

1. Redefining Boundaries
Insights from the Global C-suite Study
Rob van den Dam
Global Telecommunications Industry Leader IBM Institute for Business Value

2. For this study we surveyed
business leaders…
Chief Executive Officers (CEOs)
Chief Financial Officers (CFOs)
Chief Human Resources Officers (CHROs)
Chief Information Officers (CIOs)
Chief Marketing Officers (CMOs)
Chief Operating Officers (COOs)
818
643
601
1,805
723
657
©2015 IBM Corporation2
were from Telecommunications
295

3. ©2015 IBM Corporation3
…from more than countries
North America
Central and
South America
Western Europe
Middle East
and Africa
Central and
Eastern Europe
Asia Pacific
Japan

4. ©2015 IBM Corporation 10 December 20154
What’s putting the
world’s
top executives on
edge?

5. ©2015 IBM Corporation5
CxOs are terrified of outsiders making a land grab
More competition expected
from other industries
More competition expected
from within the same industry
Business landscape change (in 3 to 5 years)
54%29%
76% Telecom industry….. any many
more
Digital
Disruptors

6. ©2015 IBM Corporation 10 December 20156
“The ‘Uber syndrome’ – where a
competitor with a completely
different business model enters
your industry and flattens you.”
Judy Lemke, CIO, Schneider, United States

7. ©2015 IBM Corporation7
CxOs expect industry convergence to have the
biggest impact on their business
Industry convergence
The “anywhere” workplace
Rising cyber risk
The redistribution of
consumer purchasing power
The sustainability imperative
Alternative finance and
financing mechanisms
The sharing economy
Top trends to impact business (in 3 to 5 years)
Total CEO CFO CHRO CIO CMO COO
70%
60%
50%
40%
30%
20%
10%
0%
80%
Telecom

8. ©2015 IBM Corporation8
CEOs again selected technology as the most
important external force that will affect their enterprise
External forces impacting the enterprise (in 3 to 5 years)
2006 2008 2010 2012 20152004
Technology factors
Market factors
Regulatory concerns
Macro-economic factors
Socio-economic factors
Globalization
People skills
Geopolitical factors
Environmental issues
2013

9. ©2015 IBM Corporation9
In coming years, CSPs expect increased impact from
cognitive, SDN/NFV, eSIMs, IoT and energy savings
Which of the following TECHNOLOGIES will be most
important for the industry?
SPECTRUM
EFFICIENCY
BIG DATA MOBILE
PAYMENTS
CLOUD
COMPUTING
ENERGY SAVINGS
INTERNET OF
THINGS
SDN/NFV
eSIM/ VIRTUAL
SIM
COGNITIVE
COMPUTING
SECURITY
SOLUTIONS
80%
72% 71% 69% 66%
51% 50%
44%
24%
19%
COGNITIVE
eSIM/
Virtual SIM
VIRTUALIZATION
ENERGY
SAVING
INTERNET OF
THINGS
2020
67% 67% 68%
52%
65%
64%
76%
73%
82%
90%
NOW

10. ©2015 IBM Corporation10
Cognitive computing to enable CSPs to derive
‘deeper’ contextual insights
89%
8%
33%
53%
1-2
yrs
3-4
yrs
>=5
yrs
… of CSP executives
familiar with cognitive
computing believe it
will play a critical role
in the future of their
business
94% of executives
familiar with cognitive
computing indicated
that they are likely to
invest in it in future
Analytics
• addresses predefined problems
• provides accurate definitive answers
• handles information with known semantics
• interacts in formal digital means (e.g.
commands, screens)
Cognitive
• addresses ambiguous problems within
context
• provides answers with a margin of error
• handles information without explicitly
knowing semantics
• interacts in natural language

11. ©2015 IBM Corporation11
Cloud-based networking to deliver services over an
open, agile and cost-effective infrastructure
Services
SDN
NFV
2014 2015E 2016E 2017E 2018E 2019E 2020E
Billions
$ 175
$ 150
$ 125
$ 100
$ 75
$ 50
$ 25
$ 0
NFV and SDN spending expected
to grow to nearly $157B by 2020
RCRWireless, Sept 17, 2015
AT&T shows how
serious it is about SDN,
NFV and open source
FierceWireless, Aug 20, 2015
AT&T wants to virtualize 75
percent of its network by 2020.
 Agility, faster TTM
 Elasticity
 Cost take-out
 Network monetization

12. ©2015 IBM Corporation12
CSPs are trying to secure leading positions in the
technology infrastructure for the IoT
Global Machine-to-Machine Growth
and Migration from 2G to 3G and 4G
2014 2015E 2016E 2017E 2018E 2019E
BillionsofM2MConnections
2G
3G
4G
LPWA
45% CAGR 2014 -2019
0.5B 0.7B
1.1B
1.6B
2.3B
3.2B
29%
13%
35%
23%
1%
32%
67%
3.5
3.0
2.5
1.5
1.0
0.5
0.0
Cisco Visial Networking Index
AT&T Inc has big plans for
the IoT
WorldBizToday, Sept 24, 2015
Vodafone buys Italian car
technology company Cobra
Automotive for £115m
The Telegraph, June 16, 2014
Orange invests in
LoRa network for IoT
DigitalTVEurope, Sept 21, 2015

13. ©2015 IBM Corporation13
The eSIM has a huge potential to modernize the way
connectivity is delivered to consumer and IoT devices
OVERALL MARKET
GROWTH
OVERALL MARKET
GROWTH
478M 639MEMBEDDED M2M SIM
CONNECTIONS 2020
EMBEDDED M2M SIM
CONNECTIONS 2020
PROPRIETARY
EMBEDDEDSIM
GSMA
EMBEDDEDSIM
SPECIFICATION
2020
2019
2018
2017
2015
2016
2014
2013
2020
2019
2018
2017
2015
2016
2014
2013Fragmented
market growth
slower
Open market
approach promotes
market growth
Apple SIM: bad news for
mobile operators?
Mobile Industry Review, Oct 24, 2014
The Apple SIM lets customers easily
switch between mobile operators without
having to swap SIM cards.
GSMA gets boost from operators
for embedded SIM M2M tech
Mobile Europe, Oct 7, 2015
The GSMA's embedded SIM specification has
now been backed by 23 operators, ……

14. ©2015 IBM Corporation14
Cost savings & environmental responsibility are driving
reasons for looking into energy saving technology
• New technologies are more
energy efficient
• 75% less consumption between
LTE and 3G (stand-by feature)
• Advanced techniques of cooling
mast sites
• Increase use of renewable energy
• TCO reduction up to 30% with solar
energy-based base stations
• More mobile network sharing
• 20% cost savings from network
sharing
• Use of multi-RAN platform
• More and more use of software

15. ©2015 IBM Corporation15
We have identified a small group of leading
innovators that financially outperform: Torchbearers
Torchbearers
100%
are Leading Innovators
20%
of Leading Innovators are
Outperformers; thus
5%
of the total population
are Torchbearers
*
Peer level
Market
Followers
Leading
Innovators
24%42%34%
2% 5% 20%
*
Outperformers in growth
and profitability

16. ©2015 IBM Corporation16
59%
52%
More decentralized
decision-making
Greater focus on
new markets
More competition expected
from other industries
Market FollowersTorchbearers
69%
57%
62%
45%
more
38%
more
13%
more
21%
Telecom
76%
Telecom
70%
Telecom
56%
Torchbearers are better placed to take on the
disrupters

17. ©2015 IBM Corporation17
Torchbearers pay more attention to their customers
than to their competitors
60%
49%
Customer feedback
42%
54%
Competitors
External sources to identify the next wave
more
22%
less
22%
Market FollowersTorchbearers
Telecom
44%
Telecom
43%

18. ©2015 IBM Corporation18
Torchbearers are far more concerned with preparing
to change how they go to market
70%
56%
Revenue model
64%
51%
Customer segments
Parts of the business most impacted by the next wave
more
25%
more
25%
Market FollowersTorchbearers
Telecom
77%
Telecom
58%

19. ©2015 IBM Corporation 10 December 201519
“Uber has a market cap that exceeds the
market cap of all the car rental companies
combined, and it’s only an app.”
CMO, Transportation, United States
©2015 IBM Corporation19

20. ©2015 IBM Corporation20
Torchbearers are more likely to have deployed a
more future-oriented business model
38%
29%
Open
(ecosystem)
27%
20%
Platform
Business model types (currently using)
more
31%
more
35%
Market FollowersTorchbearers
Telecom
51%
Telecom
44%

21. ©2015 IBM Corporation21
Whether launching a new business model or a new
product offering, Torchbearers prefer to be first
80%
41%
80%
41%
Preference to reach the market first
more
95%
Market FollowersTorchbearers
Telecom
65%

22. ©2015 IBM Corporation22
Prepare for the digital invaders
Create a panoramic perspective
Be first, be best, or be nowhere
©2015 IBM Corporation22

23. ©2015 IBM Corporation 10 December 201523
Speed
©2015 IBM Corporation23
Scale
Scope

24. ©2015 IBM Corporation24
What’s next?
ibm.com/csuitestudy

25. ©2015 IBM Corporation25
IBM.com/iibv
Rob_vandendam@nl.ibm.com