Broadband For Digitization

Booz & Company Dubai, March 14, 2011 Conference Presentation

Digitizing MENA Economies
Winning Broadband Strategies

By Hadi Raad
Principal - Communication, Media, and Technology

This document is confidential and is intended solely for
the use and information of the client to whom it is addressed.

A number of trends are gaining pace globally, driving a shift in
telecom market traction
Key Communication Trends

Increased Device Usability Virtualization of Services
 Greater availability of more lifestyle-  Cloud computing
adapted devices
 Over-the-top media growing in importance
 Proliferation of touch screens
(e.g. TV, movies, books)
 Extended battery life
 …

Increased Mobility Applications Ecosystem

 Extended independence of consumers,  Increasing number of customizable and
(e.g. remote work, affordability of travel,) compatible applications
 Dependency on supporting technology  More complementary products
away from home and enterprise  …
 …

Technology Savvy Consumers Bandwidth Demand & Supply

 Natural demand developing from next  Operators are continually investing in more
generation of users (“Generation C”) capacity and upgrading networks
 … – VDSL / Fiber deployments
– LTE deployments
 …
Booz & Company Hadi Raad - Broadband for Digitization vBBWF110314.ppt
March 2011
1

A new perspective of convergence across industries is breaking
traditional silos allowing consumers to benefit from digitization
Digitization of Economies

Society
Digitization will have broad
implications on societies and economies
Government Health
 Making the US power grid 5% more effective
Digital Presence through smart grids will save the CO2
Transport Education equivalent of 53m cars1)
Broadband
 Utilities loose 25-50% of treated water to
Infrastructure leaks that could be remedied with
appropriate smart infrastructure2)
Media &  Congested roads in US cost 4.2bn work
Energy hours and 10.6bn l petrol that could be
Enter.
saved with smart traffic mgmt
 4.6bn mobile phones deliver location
Smart Cloud Digital information today
Systems Goods
 Humans generate 100m tweets per day,
Retail Industrial
creating extensive data on preferences3)
 Digital universe “data exhaust” reaching ~35
Home trillion GB 4) (created and processed in the
Financial Convenience
Services year)
 79% of workers depend on internet and
telecoms today

Sources: Booz & Company analysis
1) IBM 2010 estimate 2) Lux Research 3) Twitter Status 10/2010 4) IDC/EMC estimates

March 2011 Archive number
2

The challenges are rising to efficiently design and deploy the
components required for Digital Economies
Overall Needs NON-EXHAUSTIVE

Smart Systems Digital Presence Digital Goods
 Library management systems  Virtual classrooms  Collaborative content software
Education  Student information systems  E-learning and distance learning  E-learning repositories
 Hospital info. and workflow systems  Electronic Health Ordering
Health  Electronic Health Record  Pharmacy portals  Chronic disease devices

 E-government management systems  E-government portals  Digital signatures
Government

 Routing and scheduling systems  Electricity usage and distance
Utilities
 Smart grid systems control portals

 Automatic stock deployment systems  e-stores  Digital books
Retail
 m-commerce  E-games, m-games, etc.

Commercial  Payment processing network
Banking  Authentication technologies  Mobile consumer banking  Digital wallets

 Traffic flow simulators
 E-kiosks
Mass Transport  Routing and scheduling systems  Digital tickets
 Road charging
 Fleet vehicle tracking
 Ad performance optimization  Digital voting systems  Digital content (IPTV, VoD, etc.)
Media  Audience measurement  Digital advertising

Smart systems adding intelligence Digital presence substitution of Electronically accessible digital
to technology infrastructure and physical presence through online goods de-materializing traditional
back-office processes and mobile communication physical goods

Source: Booz & Company analysis

March 2011
3

E-Health services, for example, create new markets by empowering
patients and enhancing treatment opportunities for providers
E-Health - Solutions and Customers EXAMPLES
Smart Systems
 Health education portals offer Digital Presence
effective solutions to create Digital Goods
awareness
 E-Health programs cater to needs of
increasing healthcare consumption
• Online / mobile health
 Electronic health records information enable quick and
increase transparency, enable flexible access
fraud detection and save costs Health • Mobile monitoring devices
Authority offer new treatment solutions
for an ageing society

Patient
Health
Patient
Insurance

Operator

 Support systems  New revenue sources can be
(scheduling,…) enable cost- generated from disease
effective services management
Health care
 Clinical decision support Profes-  Tele-diagnostic and tele-
Hospital/
systems & e-prescription consultation present cost-
Pharmacy sional
increase patient safety effective solutions
Source: EU commission, US NIH, Booz & Company analysis

March 2011

As adoption curves continue to accelerate, digital economies
applications could penetrate mass markets in few years
INDICATIVE
Years
Adoption Curves are Accelerating
Up and Coming Start-Ups in the
35 Digitization Realm

 Layar - Augmented Reality on
30 smartphone
Years to Reach 25%
Penetration of  2m users, 1000 active layers, 4000
Population1 active developers
25
 Fitbit - Digital Self Healthcare
 Wearable sensor, collecting caloric
20 intake, number of steps, blood sugar
level, blood pressure, sleep patterns,

15  Green Goose - Digital Life Sensors
 Sensors to measure energy
consumption, automobile usage,
10 water and heat usage

5  TaKaDu - Smart Infrastructure
 Locates and predicts water-network
events
0
Telephone Radio TV PC Mobile Internet Smart Social Digital
Phone Media Economies
Source: FCC, census.gov, Booz & Company Analysis
?
1) US Population

March 2011

Digitization solutions are already driving transformation in
traditional sectors achieving significant economic benefits
EXAMPLES
Examples of Digitization Applications

Sector Digitization Solutions Example Expected Benefits

 Xcel Energy installed 20,000 smart
 Smart metering systems
meters, connected them via fiber-optic  Save 10% on consumer bills
Utilities  Smart distribution systems
network, launched website to track power  Reduce peak demand by 15%
use and offered dynamic pricing plans

 Singapore integrated Intelligent
 Real-time direct traffic flow
Transportation System to automatically
 Automatic systems for reducing  Reduce car fatalities by over 15%
Transportation charge drivers for using congested roads,
congestion  Reduce congestion time by over 20%
adjust traffic lights, measure average
 Intelligent public transportation
speeds and provide parking-guidance
 Intelligent real estate solutions to  Effectively manage larger
 Songdo Smart City in South Korea
manage building energy populations
developed applications to remotely control
Real Estate efficiency, security, utility supply  Reduce congestion times
appliances, receive remote healthcare and
 Remote appliance and security  Save on energy needs
digitally interact with gov’t
control  Provide remote social services

 Remote systems for diagnostics  Ability to electronically deal with 750
 Federal Government E-Health Program
of chronic diseases million prescriptions per year
Health developed electronic prescription system
 Electronic health records  Improved supply of pharmaceutical
on a national scale
 Intelligent emergency response products

March 2011
6

Digitization will swiftly drive the need for high-bandwidth next
generation broadband such as FTTx and LTE
Emerging Applications Requirements

Tele Medicine Tele Learning
Interactivity
Level Multi-location
Collaboration
Virtual Sports
Utility Computing Grids

Social Networking
Virtual Laboratories
Email Rich Media
HD/ Next Generation TV
Browsing Video Conferencing

64 - 256 Kbps 512 Kbps - 2 Mbps 20 Mbps - 1 Gbps Effective Bandwidth

Access Type Narrowband 1st Generation Broadband Next Generation Broadband

Typical Technology Dialup, 2G DSL, 3G FTTx, LTE1)

1) Long Term Evolution Networks

March 2011
7

In particular, Video could grow to represent more than half of the
total internet traffic
Consumer Global Internet Traffic
YouTube Total Uploaded Video (‘000 TB x Month)
(Hours per minute) (2005-2009) 32.128
35
35
30
24
25 20
20 16 25.168
15 10
+40% 17.751 Video
10 6 8 (55%) (PC, TV, ambient)
5
CAGR = 70%
0 Time 18.600 13.430
H1 07 H2 07 H1 08 H2 08 H2 09 H1 10 H2 10 (53%)

US Average Download Minutes of Video 9.242
12.726 (50%)
800 per User per Month 732
(2005-2009) 5.283
9.629
8.755 (42%) File Sharing
600 7.722
(30%)
2.804 (31%) CAGR = 24%
6.021 6.248
400 318 +876% 1.251 5.022 (34%)
208 (39%)
4.083 Internet
200 142 3.345
4.016 4.748
(Web, Mail,
75 95 2.421 3.110 (15%)
(16%)
1.425 1.868 (19%) (17%) Gaming, Voice)
0 CAGR = 27%
2005 2006 2007 2008 2009 2008 2009 2010 2011 2012 2013
Source: Comscore, Cisco, Booz & Company analysis

March 2011

Digitization breadth and scale could span geography, connecting
people, institutions, and devices …
Breadth and Scale of Digital Economy Services
Scale of
coverage

City level
City/ State

Digital
Digital Health Government
City-wide
connected
E-Education
Neighbourhood District

transportation
Work

Local connected industry
transportation
Home Leisure
level Industries
Finance/ E-
commerce
Neighbourhoods
Home

level
Smart Home Breadth of
integrated services
Connecting people Connecting institutions Connecting devices Connecting people to devices

Enablers Smart ICT Solutions ICT Infrastructure Digital Communities

 Deployment of smart systems that
 Build up of pervasive and intelligent  Sophisticated and innovative use of ICT
Description allow users to access resources and
ICT infrastructure by integrated communities
capabilities more efficiently

3/16/2011Booz &
Company
March 2011
9
DATE

… entailing the need for high speed broadband even in less
dense/rural areas
Importance of High Speed Broadband in Rural Areas
NON-EXHAUSTIVE
Description Example Initiatives

 Telemedicine offers the opportunity  A tele-pathology system developed in Japan allows
Improved to bridge the gap between pathologists using high-definition video and remote-
Healthcare healthcare services in rural and controlled microscopes to examine tissue samples
urban areas from patients living in rural areas

 South Korea developed the Education Broadcast
 E-learning and online video tutorials
Better Service (EBS) to help children in rural areas better
can be a powerful tool to improve
Education prepare for a national aptitude test through access to
educational services in rural areas
free video tutorials

 The US government is active in promoting tele-
 High speed broadband enables tele-
Employment working for the federal government in order to
working in rural areas and creates
Opportunities promote employment in rural areas as well as reduce
rural entrepreneurs
traffic congestion

 The Rural eGov project of the European Union aims
 Broadband allows residents and
Access to Government to study the needs of SMEs in rural areas for
businesses in rural areas to have
Services governmental and public services and offer policy
access to e-government services
recommendations to EU governments

March 2011
10

However, a digital divide still exists even in developed markets

Broadband Household Penetration
Urban vs. Rural - (in %) - 2009

Urban
Rural 39

+15
28 28
26
24 +4 24
23 23
21
+14 +10
+7 16 16 16
14 14 +2 14
+7
9

France Italy UK Spain Germany Sweden Greece US

Source: iDATE Consulting & Research, 2009

March 2011

Digitization in MENA is expected to accelerate, driven by
increasing maturity along four enablers
Digitization Momentum in the MENA Region
1 Improved Governments’ 2 Advent of Next Generation
Readiness Broadband
 Government in several MENA countries  MENA operators building next
have reformed and are ready to generation broadband infrastructure
implement long-term planning of and have reduced connectivity costs
national policies by 40% since 2008

 Governments now pushing for  Operators designing supply side
implementation of ICT solution and e- initiatives and are developing tailored
Programs across ministries/ agencies sectoral digitization solutions
MENA
Digitization
Trends
3 Growing Consumer Demand 4 Increased Adoption of ICT by
 MENA consumers accustomed to Enterprises
online and mobile services with an  Adoption and spend on ICT services
expected yearly increase in apps by Enterprises in the MENA on the rise -
downloads of 44% till 2014 growing at twice the average of global
peers
 Penetration rate of fast fixed and mobile
broadband connectivity to rise to  MENA Enterprises integrating
24% (households) and 34% (users) by advanced ICT solutions without the
2014 respectively hurdle of legacy systems

March 2011
12

Regional governments have significantly prioritized ICT on their
policy agenda and national development plans
EXAMPLES
Digitization Momentum in MENA – Governments

National Development ICT Demand
ICT Vision and Strategy ICT Investment
Plans Stimulation
GCC ICT Investments2
National Development National ICT Strategy
(2010-2012)
Plans of Jordan 2012
e-Maroc 2010 KSA 90
Abu Dhabi Economic UAE 46
Vision 2030 ICT2015 Kuwait 17
Qatar 15
Qatar National Vision E-Government Oman 8 Total
2030 Strategy $180 Bn
Bahrain 5

Kuwait 5- Year
Development Plan MENA region recorded Government authorities are ICT authorities in region
fastest increases in releasing significant are actively influencing
Bahrain Economic Networked Readiness funds to develop and the increase in ICT
Vision 2030 Index1, reflecting efficiency integrate ICT within demand through various
of ICT strategies government entities initiatives

1) Global Information Technology Report 2009-2010
2) GCC ICT Infrastructure Report by Kuwait Financial Centre (Markaz)

3/16/2011Booz &
Company
March 2011
13
DATE

Regional telecom operators are offering Next Generation
Broadband, at declining prices
Residential ADSL Availability Broadband Prices1) as % of GDP per Capita (PPP)
(Selected MENA Countries) (Selected MENA Countries)
4 Mbps 8 Mbps 10 Mbps 16 Mbps 24 Mbps 15.5%
Egypt
9.0%
Bahrain
10.3%
Egypt Jordan 7.0%

Jordan 8.5%
Bahrain
4.6%
Kuwait
7.3%
KSA 5.0%
Lebanon
4.7%
Morocco Oman
4.0%
Oman
4.7%
Kuwait 1.6%
Qatar
2.1%
KSA Qatar
1.5%
2008
UAE 1.8%
UAE 1.6%
2010

 Telecom operators and ISPs have rolled out an  Broadband prices in the MENA region have
infrastructure capable of providing high connection significantly dropped over the last two years enabling
speeds to users people to select faster connections
1) Annual Broadband prices ae for 1Mbps connection
Source: Arab Advisors, Booz & Company analysis

3/16/2011Booz &
Company
March 2011
14
DATE

MENA consumers are accelerating their adoption of broadband
and smart phones …
MENA Customer Technology Adoption
Fixed Broadband Mobile Broadband Smart Phones Adoption in
Users in MENA Users MENA MEA
(2009-2012) (Millions) (2009-2014) (Millions) (In ‘000s) (2009-2014)

+31% 107 26,141
74 77 +36% 21,455
67 +73%
17,127
54 66
12,875
37
39 8,845
20 22 5,661
7 12

2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014

 Broadband Households Penetration is  Smartphone sales CAGR over 2010-2014
over 60% in the UAE, 30% in KSA, and  User penetration should leap from 2% range between 14% (KSA) and 28% (Egypt)
should reach 24% in the region by to 34% from 2009 to 2014  Smartphone users are 3x more likely to use
2014 broadband

1) Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, KSA, Syria, Tunisia, UAE, Yement
Source: Informa, WBIS 2009 Ovum, Gartner, Booz & Company analysis

3/16/2011Booz &
Company
March 2011
15
DATE

… and are increasingly more sophisticated and adept in digital
media
MENA Customer Sophistication Indicators

Mobile Apps Downloads Most Common Ratio of Facebook
(‘000)(2008-2014) Internet activities Users in MENA
(% of MENA respondents) (2009) (% of Population) (2009)

1,234.3 1% Listening to radio In May 2010
Facebook had around
0.3% Iraq
+44% 1,036.7 3% VOIP Calls 15 Mn active users in
the MENA region 2.7% Egypt
Downloading music,
824.8 3%
videos…
4.9% KSA
619.6 4% Watching videos / TV

425.3 6% Online games 8.6% Jordan

249.9 8% Emails
8.6% Tunisia
136.5
14% Social networking
16.6% Lebanon
15% Chatting
2008 2009 2010 2011 2012 2013 2014
43% Getting information 21.9% UAE

 Number of apps downloads will increase at  MENA internet consumers are active users of  Facebook penetration of internet
a yearly rate of 44% – 15% of which are new online applications: games, video users is amongst the highest in the
paid streaming, VoIP, etc. world

Source: Ovum Mobile Apps Forecast 2010, Middle East & North Africa Twitter Demographics & User Habits Survey August 2009, Arab Media Outlook 2009-2013, SpotOnPR

3/16/2011Booz &
Company
March 2011
16
DATE

To capture digitization opportunity, Telcos need a clear positioning
on infrastructure, applications, and monetization business models
How to Win the Broadband Game?
Strategic Imperatives

1 A Right to Play 2 A Right to Compete 3 A Right to Win

Broadband Broadband
Business Models
Infrastructure Ecosystem

 Demand-driven FTTx rollout  Positioning in the broadband  Infrastructure
 Harmonized investment in ecosystem deployment business
Wireless broadband (WiFi,  Horizontal Services models
Wimax, LTE)  Vertical applications  Innovation stimulation
 Government investment support partnerships (e-education, m- business models
/ Demand stimulation ? health, etc)  Monetization business
 Content partnerships models

March 2011
17

Operators mass broadband technology strategy will depend on a
number of market specific considerations CONCEPTUAL

Integrated Infrastructure Perspective: Key Trade-Offs

Urban Suburban Rural
1 Right cut-off-point?
Technology Commercial Availability Coverage Which technology?
100% (VDSL vs. FTTH)

Density
Ongoing
FTTx
0%

~2013
LTE ~2016 full deployment
2
Fixed-Wireless-Mobile 3
complementarity?
ongoing Rural copper
3G substitution?

2G ongoing
possibly discontinued in 2016
4
2G/3G switch-off?

Copper ongoing 5
ADSL2+ Case for extension of
ADSL2+ capability?

March 2011
18

A clear positioning is needed in the broadband ecosystem to
capture the market opportunity
Broadband Ecosystem & The Battle for future Profits
Content Providers

Ho

Service Providers
s r izo
ce nt
vi

Over-The-Top
Providers
r a ls

Content
se er
al vi
tic c es
er

, A rvice eting
e-gove
V

Payments
En

Se Mark
s
Me tainm

es
Mobile
ter

or
dia en
e-t

rnment

St
ital
Sm
ra

d s
&

,

pp
ar ou e rce
ns

tG Dig Cl rvic me
po

rid m
e-ed Se -co BS
t
rt

uc atio m L
, ,
n merce Co-opetition battle
Over the Top Services e- comcial for future profit
e-health so erce
comm pools
Pads & Tablets Home Automation
TVs & STBs Devices Gaming
Cell & Smart phones Computers

Systems Integrators /
Systems Integration
IT Services

Operators
Network

Device Players
Managed Services
Network Operations
Connectivity Services

Software
Fiber Switches Routers Servers
Infrastructure
Copper m-to-m Devices Satellite Wireless Mobile

March 2011
19

OTT players are capturing value in the new ecosystem by securing
the right positioning and crafting attractive value flow models
Categories of Application Leaders

Philosophy Own natural
Distribute Bridge to User generated
points of
Value capture unique content physical world content
concentration
model

A
Commerce
Transaction-based

Music Store

B
Customer
Super Pass
Subscription-based Analytics

C Super Pass

No examples found
Advertising-based
Music Store

Monopoly on particular Creating own format Leverage efficiencies
Develop a framework
aspects of consumer’s and developing an of online world for
to house user
interests and ecosystem around productivity in
generated content
concentrated branding the format physical world
Limited models yet

March 2011

OTTv players, for example, are capturing growth in video through
creative business models and efficient partnering
Examples of OTT (over the top) Offers US Video Content Sites
- April 2010 -
Google TV .com Apple TV
Unique Viewers Videos / Viewers
- in mn. - - per month -
Google sites/
136 96
Partners YouTube

Hulu 39 25

Aggregate all Microsoft sites 40 16
Provide Provide high
video content
Professional quality video Viacom Digital 39 10
across
Mission content of content via
platforms
stations via iTune store Yahoo! Sites 50 8
(Broadcast TV,
the internet (sell through)
YouTube, Web)
Vevo 44 8
Set-top box Streamed content Set-top box linked
connected to online on PCs to iTunes store Fox Interactive 44 7
Description Internet
Limited Audio and video CBS Interactive 39 8
(or in Sony TVs) advertising content
Turner Digital 33 9
Business Targeted Targeted Hardware sale +
Model advertising advertising share of content
Facebook 41 6

Status To be launched ~50m viewers Launched 2005
TV Format Invaders TV Station own Sites
Note: Excludes video server networks
Source: ComScore, Insight Express, TopTenReviews.com, Booz & Company analysis

March 2011

Players are threatening telcos’ positioning either through owning
unique interfaces or providing core telecom services
Illustrative Scenario of an Applications Player’s EXAMPLE
Strategy to Compete on Telecom Operator’s Turf

Non-Telecom Services Core telecom Services

 Yahoo!, with its applications and content rich portal
Attract with attracts customers from Operator’s portal and has
Appealing cannibalized Operators’ email service Free Internet
 Skype offers free pc-pc internet calling
Portal calling
 Yahoo! offers free toolbar and suggests making
Yahoo! as customers’ homepage
 Yahoo! further solidifies its relationship with  Skype offers a simple, convenient, and
consumers by locking them into subscription based cost-effective way for people
Enter into Cheap VoIP
services - such as personal, classifieds etc anywhere in the world to communicate
Contract Calls
 Yahoo! partners with other service providers, such as from their computers over the Internet
Expedia, to offer travel services to landlines and mobile phones
 Yahoo! partners with billing agency (Paypal etc) to
1 process customer transactions  Skype offers mobile apps that enables
Start Billing Convergence
 These payments could be per transaction basis (flight VoIP applications over mobile
with Mobile
booking) or on monthly basis broadband

 Yahoo! enters into partnership with customer care
4
Offer Customer firms to manage post-sale customer service on
transactions such as flight bookings, a call center to
Service
provide better customer service. This takes away
Telecom Operator’s last contact point with customers

March 2011

To stay relevant, Telecom operators need to keep control of core
components: Digital ID across devices and location awareness
Network providers had limited reaction … …despite having strengths in key areas

Discussion
Single Login
 Telecom operators reaction to date has generally been limited

 Operators, in general, have so far reacted to such developments
through actions such as: Digital ID With commerce -
– Trying to sustain business by banning emerging products
(e.g. T-Mobile blocks Skype usage on mobile phones)
– Profiting from increasing innovation of other players by
forming alliances to (e.g. AT&T - iPhone exclusivity) Across devices
– Offering additional products and services by moving into
quadruple play (cable television, broadband internet access and
fixed line and mobile telephony) with premium content
Social context -
Social ID
Location
awareness

Area of strength for
Source:, Booz & Company analysis network provider

March 2011

Time is not to Telcos’ advantage - OTT players have already started
staking claim on core components, such as digital and social IDs
Strategic Thrusts To Gain Control of Sources of Value

Digital ID Social ID

Location
Single Login With commerce Across devices Social context
awareness
Facebook has leveraged
Dominant social Introduced its dominance in social
Facebook ‘Facebook ‘Facebook App’ networking to establish a
networking ‘Facebook
Connect Credits’ across devices single login and include
platform Places’
location awareness

Google maps; Google enjoys device
ubiquity via Android but
Google social Android location
Google Pay has had limited success
search awareness in the social space
capabilities

Apple has the strongest
Ping - a social walled garden and has
network for music recently made a foray in
social networking

Note: See appendix for more detail on player strategies Relative position of
strength

March 2011

Facebook has leveraged its dominance in social networking to
establish a single login and include location based offerings

 Facebook Connect allows users to log  Dominant Social Network - More than
into external sites while adding basic 500 million active users with 50% of
FB features users active daily

 Users carry their FB social graph and  Users spend over 700 billion minutes per
FB identity around the internet month on Facebook

 Facebook Places is a location based
 Facebook Credits are virtual service that
currency that users use to buy virtual
– allows users to update their location
goods in games and applications on the and connect with contacts in that area
Facebook Platform.
– “Places Deals", allows users to find
local deals
 Facebook receives 30% of all revenues

 Facebook Applications - Over 200
 Social Search tie up with Microsoft’s
million active mobile users
Bing.com allows search relevant to
user’s social circle and can be location
 2nd most downloaded app on the iTunes
based.
Store. Comes pre-installed on Android

Source: Secondary Research, Booz & Company analysis

March 2011

Google has leveraged platform dominance- Android OS and
Gmail- to provide a digital ID

 Google Social Search allows users to
 Single Sign On, Gmail allows users to find content relevant to their social circle
log into all Google websites including (Twitter and Gmail contacts) by logging
Blogspot, Youtube, Google Apps and in through a Gmail ID.
Google Checkout
 Filters searches displaying contacts’
 Google Checkout is a single sign in reviews and recommendations first
Digital ID and an e-commerce
aggregator as it allows secure online
shopping straight from Google Search  Google Maps offers a route planner for
traveling by foot, car, or public transport
and a location based urban business
locator for numerous countries around
 Google’s strategy is to make Android a the world. Is currently the most popular
ubiquitous platform across devices global location based searched engine.
– dominant mobile OS (25%
smartphone market share)  “Location Awareness” uses Google
– Android also integral to Google TV Maps’ location based services on the
– Android forms the basis of the Android mobile platform coupled with
Chrome browser Google’s social search capabilities

Source: Secondary Research, Booz & Company analysis

March 2011

The right to win for telcos is a function of the right business
models for investment, innovation, and monetization
Business Models

Infrastructure  Network Sharing ?
Investment Business  Ventures / Public-Private Partnerships ?
Models  Content Delivery Networks ?
Market demand

 Business models with service providers
– Minimum Guarantees ? Competitive pressure
Innovation Business
– Tiered Quality of Service ?
Models
– Revenue Sharing ?
Service Attractiveness
 Engaging the developers community

Supply competitiveness
 Flat Fees ?
Monetization  Pay per View/download/Use ?
Business Models
 Advertisement funded models ?
 Combination ?

16-Mar-11
March 2011
27

In the game of changing business models, operators should
leverage their key assets
Assets of Operators in Value Chain Battle

+ + +

End Customer
Consumer Knowledge Digital ID Infrastructure
Relationship
 Direct customer interface  Basic contract data enable  A single digital identity  Owned/operated
due to contractual socio-demographic selection across platforms infrastructure
relationship  Data packet inspection  IP detection enables  Bi-directional communication
 Billing and collection provides behavioral insights Seamless identification means, also as key enabler
 Location data enable across platforms for sustainable customer
location profiles relationships and insight
generation


March 2011

Thank You

Hadi Raad
Principal
hadi.raad@booz.com
www.booz.com

March 2011

Broadband For Digitization

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