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2011

Advising you on
industry transformation
ovUm telecoms

Research Agenda

2011

welcome to ovum Telecoms

Welcome to ovums telecoms research agenda, which we hope youll


nd valuable in providing the market perspective you need to drive
growth in 2011.
As always, we will ensure that you are best placed to
maximize value from new and existing markets and
will work alongside your teams to provide research
and analysis that supports your decision making, no
matter where you sit within the industry.
Our research in 2011, which comes from some of the
industrys leading analysts, will be as stimulating as ever
and founded on robust market data. However, there are
some key changes as we improve our service. After all,
it follows that as our customers markets expand, we too
broaden our horizons.

For 2011, we have:


Expanded our primary research. We will produce
more primary research, growing the amount of customer
insight research by 20%. You will see more customer
and enterprise surveys and we will continue with our
wholesale customer survey.
Invested in our quality process. To ensure that
you can make business decisions with confidence,
everything we publish goes through three stages of
quality review a standard that we believe is the most
stringent in the industry.

Ensured that our analysts are available


to you. We recognize that you want to discuss our
research and the market with our analysts, which is why
we have made it easier for you to make enquiries.
Broadened the research scope of many
practices. We are intensifying our efforts with deeper
country profiles, a renewed focus on new media,
content, and gaming, and country-level analysis on fixed
and mobile access services. You will also see more
pricing information and converged analysis across the
telecoms and IT teams within Ovum.
This year we are also introducing the concept of
Signature Research, which represents the best of what
our analysts produce in each of our practices.
We have laid out the key themes of our 2011 research
agenda in the pages that follow. Combined with our
commitment to service that gives you access to expertise,
real-world experience, and market insight when you need
it we believe youll find this a compelling package.
Thank you for your business and I look forward to
working with you in 2011.

Invested in new research methodologies.


This means that our research is not just founded on
reliable data, but on unique methodologies designed to
provide market clarity.
Invested in new geographies. We have new
offices in China and Brazil and expanded operations
in Japan, South Africa, and the US. We now offer the
broadest geographic reach and the deepest telecoms
focus in the industry.

| ovum telecoms research agenDa 2011

RICHARD mAHoNY
Director, telecoms research & analysis

InformatIon types

telecoms at a crossroads

Analyst opinion

Short event-, news- or trend-driv


analyst team

Benchmark
reports

Assessments of operator and ven


group and competitors

telco operations

Market reports

Key research themes

Practice coverage of
key research themes

components

10

consumer

12

Devices and Platforms

emerging markets

telco strategy

14

reports

core eXpertIse
Corporate and
Strategic Planning

Market segment
wholesale
profiles

Deep dives on optical networking


DWDM backbone, aggregation an
28 segments including ca
application
optical (CPO)

Research
briefs
research
portfolio

Short reports and articles analys


30
vendor news

studies
KeyCase
bene
ts

Analyses of service providers act


32 processes and
operations,
system
KnoWle

decIsIon maKers

Board Members
Surveys
global
telecoms

Executive
Management
Committee

Knowledge center

Vendor profiles

enterprise

network infrastructure

Policy and regulation

18

20

research store
New Product
Development and
Commercialisation

Key BUsIness tasKs

Surveys
analysis of service
Marketp
Annual
andand
five-year
customers),
and
consumer
& ent
planning
analyzer
33
Vendor

Trackers
Strategic
Planners

16

24strategic analysis of evol


Ongoing
consumer, emerging and mature
regulation, and components. Mark
country and market profiles; mar
operator strategy analyses and pr
26
(e.g. interconnect analyses and u

Identify merger and


Forecas
acquisition targets
interacti
Regularly updated tracking of ne
Understand market
Marketse
trends in key telecoms market
dynamics34
and needs
Market
Size, prioritise
Financia
and target market
In-depth examinations of leading
opportunities
product, service and technology

36

Ovums
database of vendor
contr
Market
Research and
Identify
required
Vendor contracts
including
Development
features
andaccess,
functiondata networking
Benchm
database
network services, optical network
Director
sets
consulting
37
Custom
VoD, voice-over-cable, VoIP
and
Marketing Director
Establish ROI
justification
Select appropriate
pricing models

22

Establish cost and


timing of market entry

Customer
Tracking

Marketing Manager
Brand Manager

Identify business
drivers and needs
Target pain points

Custom

Forecas
interacti

Establish minimum
acceptance criteria
contents |
Understand adoption
criteria

2011

Telecoms at a crossroads

Telcos need to
nd ways to
tap into the
emerging revenue
streams which
take advantage of
their networks

| ovum telecoms research agenDa 2011

JAN DAwSoN
CHIEF TELEComS ANALYST

the evolving telecoms ecosystem


demands new business models
The telecoms industry is at a crossroads. Saturation and
market maturity are driving down prices and causing revenues
to stagnate and decline. Meanwhile, telecoms operators, which
have always held the pre-eminent position in the market, are
losing power to new players from the online, software, and
consumer electronics markets. Large European and North
American equipment vendors, which once provided telcos
with all the technology behind their products and services, are
threatened both by surging competitors from Asia and by a new
breed of applications and services not rooted in switches and
routers but in software in the cloud. Device vendors, once
clearly telco partners with aligned interests, have
now become competitors in content and service provision.
All these changes require a fundamental rethinking of the
business models which used to generate substantial revenue
growth and fat margins but now threaten to produce only
stagnation and decline. Telcos need to find ways to tap into
the emerging revenue streams which take advantage of their
networks without generating any revenue for them. Network
equipment vendors need to develop new software-centric,
developer-friendly business models. Device vendors need
to walk a thin line between partnership and competition.
Regulators, too, need to evolve in their evaluation of and
responses to the market to include new players and
business models.
In emerging markets, many telcos have found a way to
effectively go back in time and participate in rapidly growing
markets again. But there, too, some of the same trends will occur
over the coming years, and telcos will face similar challenges.
But there are also important differences and special challenges
in emerging markets, not least how to maintain margins when
disposable income and therefore ARPU are much lower.

telecoms at a crossroaDs |

2011

Key research themes


In 2011, well be focusing on seven key research themes to help industry players overcome foreseeable challenges and make the
changes necessary to succeed. Each of Ovums 10 research practices will tackle the topic areas most relevant to their particular coverage
area, while the following big picture themes will cut across much of our telecoms research portfolio.

THE ROAD TO 2020


Ovums Telecoms 2020 report series described a new type of service provider which will
emerge in the next 10 years: the SMART player. The disruptive competitors which have entered
the telecoms market in recent years have largely been platform players, which is to say that
they own and operate software platforms that cross the traditional boundaries between fixed
and mobile, between computers and televisions, and between voice and data. In addition, they
have created interfaces to allow third-party developers to create value on top of their platforms
in a way that increases the value of the platform to users and generates revenue and stickiness.
SMART players will emerge from among these companies, but telcos also have an opportunity
to evolve into SMART players, if they begin taking the first steps now. We will continue our
coverage of platform providers such as Google, Apple, Microsoft, and others, but will also
address the key strategic issue of how telcos can begin to develop their own platforms as a first
step on the road to 2020.

PLANNING FOR NEXTGENERATION FIXED AND


MOBILE ACCESS
As telcos invest in fiber-based local access networks and 4G mobile networks, they are by
default locked in to the DSL and 3G business models they have relied on in the past. New
strategies and business models are required to fund the investment in next-generation
access, and to more closely align costs with revenues. Network equipment vendors and
others in the value chain will need to support these changes as they work with service
providers. Regulators will need to adapt their market analysis and remedies to nextgeneration access to incentivize investment while ensuring a level playing field.

COST AND PROCESS


OPTIMIZATION STRATEGIES
Cost reduction is nothing new to telcos, but efforts to cut costs continue, and as the lowhanging fruit has mostly been picked, they must find more sophisticated ways to improve
efficiency. This involves transformation of many core operational functions, but it also
means making smart decisions about network investments to support burgeoning bandwidth
requirements. Equipment vendors will be key to transforming the cost structure of deploying
networks, and they and their suppliers including component vendors will need to transform
their own businesses to maintain their margins and remain competitive.

| ovum telecoms research agenDa 2011

PROFITING FROM NEW


REVENUE OPPORTUNITIES
While cost reduction plays a part in protecting margins, telcos need new sources of revenue
in order to cover the shortfall caused by declining fixed revenues and stagnating mobile
revenues. But there is no single obvious new revenue opportunity to pursue. Rather, telcos
must find a slew of new opportunities and focus on those most likely to generate profitable
revenue growth in the coming years, across all segments, from consumer to enterprise to
wholesale.

THE IMPACT OF CLOUD


BUSINESS MODELS
The technology world is abuzz with talk of the cloud, and it has become the latest term
to suffer from over-application to products and services from a range of providers. But
beneath the cloud-washing there remains a real shift in business models, which has the
power to fundamentally impact the telecoms market. Not only is there an opportunity for
telcos to become cloud providers in the enterprise market, but telcos will also want to make
use of cloud services and architectures internally to deliver their services to all segments.
Meanwhile, telcos will have to respond intelligently to competitors using cloud business
models.

LEVERAGING CUSTOMER
INSIGHTS
What separates the most successful companies from their less successful competitors
is often the ability to intuit what customers want and when. Achieving this goal requires a
combination of insights into what customers say they want and detailed analysis of customer
behavior. Telcos hold much of the data they need to make very good guesses at what
customers want, but are often poor at making sense of that data. In addition, their own
efforts to approach customers directly about their plans and preferences often fall short,
either because customers dont want to share that detail with their provider or because
telcos ask the wrong questions. A strategy that combines effective mining of the data telcos
already have with insightful analysis of customers stated preferences is key to success.

UNDERSTANDING
COMPETITORS AND PEERS
In addition to the established competitors from within the telecoms market itself, telcos face
an emerging threat from new disruptive competitors with radically different business models.
These competitors are not subject to regulation, may offer advertising-funded services for
free to end users, and may be much more dynamic and flexible than telcos can be. Holding
ground against existing competitors, while adjusting to and either working with or battling
against new competitors, is the only means to remaining profitable. In addition, learning
from peer best practice is crucial to staying ahead of the game.

Key research themes |

2011

Practice coverage of key


research themes
The following table illustrates how our key research themes will spread across our practice
areas in 2011.
Components

The road to 2020

Planning for next-generation


xed and mobile access

Cost and process optimization


strategies

Proting from new revenue


opportunities

The impact of cloud business


models

Leveraging customer insights

Understanding competitors
and peers

| ovum telecoms research agenDa 2011

Consumer

DeviCes anD
platforms

emerging
markets

enterpri

ise

Network
Infrastructure

Policy and
Regulation

Telco
Operations

Telco
Strategy

Wholesale

Practice coverage of Key Research Themes |

2011

Transceive
Tra
Long dista
Lo

Components

Transceive
Tra
MediumMe
di

Transceive
Tra
Short dista
Sh

ROADMsRO

Amplifier
Am

Discretes
Dis

DARYL INNISS
PRACTICE LEADER

Transceiver 1
Long distance

Market context
Wireline and wireless network operators continue to experience
high bandwidth demand, a trend that is expected to continue
for the foreseeable future. In their efforts to improve margins,
operators need to decrease the cost of bandwidth while offering
new services. They are therefore demanding higher capacity at
smaller size, lower power consumption, and lower cost per bit.
Component suppliers provide technical innovations and new
product development that serve as key ingredients to helping
operators meet these needs.

Our coverage

Optical components quarterly market


share report

Transceiver 1
Medium distance

Revenues are segmented by transceivers (long distance Transceiver 1


Short distance
mostly used in the core network; medium mostly
used in access network; and short mostly used in
datacom), transmission discretes, amplifiers, and ROADM ROADMs
components.

Optical component forecast

Amplifier

Transceive
Tra
The forecast includes volumes, prices, and revenues of
Discretes
Long
dista
Lo
modules and discrete components. It represents optical
components used in the network core, metro, access, and
Transceive
Tra
enterprise-based
19%
19% networks.
17%
17%

Ovums Component research analyzes the communications market


MediumMe
di
to identify the real growth opportunities in components. It provides
insight into opportunities for transceivers, ROADMs, amplifiers,
Transceive
Tra
and discrete transmission components in core networks where the 13%
13%
Short dista
Sh
availability of new products is often the gating item. It analyzes cost
Optical components market
23%
23%
of components and equipment used in core and next-generation
Representing a $4.7 billion market on a rolling 4Q basis through 2Q10
access including FTTx and 4G wireless. The research also
ROADMsRO
15%
15%
Transceiver 1
identifies opportunities for component vendors in enterprise (e.g.
13%
13%
Long distance
storage and local area networks).
19%

Am
TransceiverAmplifier
1
Medium distance

17%

Transceiver 1
Short distance
Discretes
Dis

13%
23%

ROADMs

15%
13%

Amplifier

Discretes

Transceiver
Transceiver
1
1
Long distance
Long distance

ROADMsROADMs

Transceiver
Transceiver
2
2
Medium distance
Medium
distance
Transceiver 1

AmplifierAmplifier

Long distance

Transceiver
Transceiver
3
3
Transceiver 2
Short distance
Short
distance
Medium distance
Transceiver 3
Short distance

10

| ovum telecoms research agenDa 2011

ROADMs

DiscretesDiscretes

Amplifier

Discretes

2011 Coverage Areas


Market assessment and
outlook for components in
optical communications
Component companies in optical
communications are on the verge of
posting consistent profitable results.
Ovums quarterly market share
and biannual forecasts provide a
comprehensive market perspective to help
understand the competitive landscape
and to separate fools gold from real
opportunities. Ovums market intelligence
includes both bottom-up and top-down
analyses. Ovum interviews component
and subcomponent suppliers and
corroborates its findings from interviews
with network equipment manufacturers
and network operators. Ovums analysis
of end market drivers, customer and
competitor positioning, and emerging
demand for products and technologies
helps position component suppliers for
success.

Availability of high bandwidth


transmission line components
for network core
Carriers have crowned 100Gbps
as the next-generation backbone
transmission rate to help them support
burgeoning bandwidth demand. But the
development cycle will likely be slow

due to the technical challenges involved.


Ramping these products in manufacturing
will also be monitored carefully since
demand is larger than supply. Hence
availability of components for 100Gbps
will be a key issue. Meanwhile, multi-year
revenue opportunities exist at both 10 and
40Gbps. We will provide market data and
intelligence including quarterly shipment
data at 40 and 100Gbps, to help suppliers,
customers, and carriers understand the
market realities.

Next-generation wireless and


wireline access technologies
cost outlook
DSL cost per port sets the industry
benchmark for competing access
technologies, but as fiber is laid in access
networks, a variety of other equipment
in use needs to be cost competitive. The
introduction of 4G wireless provides
another competing technology for some
markets, on yet another cost basis. How
does its cost compare to DSL and FTTx?
What technology advances are needed to
help drive the costs down for the different
next-generation access approaches? Our
research will include building the bill of
materials for a series of access equipment,
analyzing cost, and identifying costreduction approaches.

Datacenter transformations
driving new optical connection
demand
A host of new technologies and
approaches are being introduced in
the datacenter that require analysis
to uncover their long-term roles
and opportunities.
A short list of important questions includes
the following:
Transition to 10Gbps appears to finally
be happening. But the copper solution
is also attractive. How is this market
opportunity emerging?
40Gbps Ethernet and 100Gbps
Ethernet. Where are we, whats the
right form factor, whats needed, and
when will it all be ready?
What are optical engines, who is
developing them, and where are they
being used?

Components |

11

2011

Consumer

mICHAEL PHILPoTT
PRACTICE LEADER

Market context

Consumer executive briefing

Broadband Internet access has changed the way we live our lives,
the way we communicate, and the way we consume media. The
convergence of telecommunications, broadcast, and Internet
markets has created a burden of choice for consumers the
choice to consume more than ever before, anywhere, anytime,
and anyhow. Consequently, the consumers behavior, needs, and
desires are changing, and business models have to change with
them if telcos, vendors, and online service providers are to capture
the value resulting from the consumers new demands.

The report provides a key point summary of the research


carried out by Ovum over the last six months including
forecasts, latest consumer trends, market drivers, and core
insights about the services provided to the connected and
extended home. Ovums Consumer Research Digests will
benefit from additional high-level conclusions and forwardlooking implications.

Integrated services

Advertising

Extended home

Ovums Consumer practice is focused on this rapidly changing


marketplace. The core of our research will be focused around the
strategies for successfully monetizing online content services,
integrated value-add services, and the connected home. The
research will study the trends across the whole market, but with a
focus on how the broadband, mobile, or integrated service provider
can maximize their opportunities within that market. To achieve
this, we will carry out in-depth research into optimum business
models, developer strategies, and consumer demand trends. In
2011, Ovum will also have a research theme on social media as it
is integrated into other applications and services such as TV and
video.

The digital consumer opportunity

Digital media

Our coverage

Broadband service provider opportunity

12

| ovum telecoms research agenDa 2011

2011 Coverage Areas


Content services and
applications

a number of opportunities around the

The online content and application markets


are growing rapidly. However, online
and over-the-top players are starting to
dominate the markets, leaving little space
for the broadband service provider. In
order to take advantage of this potential
revenue stream, service providers must
continue to innovate and move quickly as
end-user trends come and go.

are in a good position to exploit. Although

Ovum will publish in-depth analyst reports,


player case studies, forecasts, and
consumer insights reports in a number of
key content areas, including:
TV
music
gaming
gambling
e-publications.

Integrated value-added
services
Much focus today is on the high-end
content services. However, there are

connected home that service providers


not always the case, such services are
becoming increasingly integrated to
provide even greater functionality and
value to the end user. Examples of such
services include:
device security
content backup
integrated VoIP applications
payments
identity management
personalization.
Ovums research will include reports and
case studies of the latest developments
and best-of-breed examples/market
leaders. Research will also include
analysis of non-telco service providers
that are also developing such solutions.
Consumer insight reports will include
figures on consumers willingness to pay
for such services, and service
provider positioning.

Opportunities in the
connected and extended home
Content and value-added services are a
big part of the connected and extended
home. However, there is more to the
connected home than just content. The
home network, CPE evolution, connected
device developments & adoption, and
e-services all contribute to the wider topic.
Working with other research teams within
Ovum and Datamonitor, the Consumer
team will look to pull together all aspects
of the topic with an emphasis on the B2C
opportunities for service providers.

Social media
Social networking is one of the most
mature and popular of all Internet
applications. Its familiarity, even within the
mass market, means that it is becoming
an increasingly important tool within other
types of media and communication. Ovum
will analyze how social networking can
be utilized in other applications and how
players can monetize such innovation.
Research will focus on case studies
of leading players and the associated
business models.

Consumer |

13

2011

Devices and Platforms

ADAm LEACH
PRACTICE LEADER

Market context
Connected devices, whether mobile phones, tablets, set-top
boxes, games consoles, PCs, or others, form the focal point for
the delivery and consumption of telecoms and Internet services,
content, and applications.
However, the core value in these devices lies less and less in the
physical device itself and more and more in the software platforms
that run on these devices.
A number of major industry players are competing for market share
in this space including Apple, Google, Microsoft, Nokia, RIM,
and Samsung for dominance in the home and personal device
markets.

Developer insights: a survey into the


future of smartphone and multiscreen
applications
Understanding the level of developer support among device
platforms is critical to evaluate the future success of a given
platform. Only the best-supported platforms will ultimately
attract the best developers, including major content providers,
media companies, and brands. Not all will flourish.
To obtain a comprehensive, unbiased view, we survey
300 developers across a range of vertical sectors with the
objective of building a deep understanding of their mobile
strategy.

Our coverage
The Devices and Platforms practice addresses the key competitive
dynamics in this space by analyzing the major players and their
strategies, the threats and opportunities presented to existing
players, as well as future impacts.
We provide player analysis, forecasts, and tracking of
specific device types and platforms to help operators, device
manufacturers, platform vendors, enterprises, and application
developers make sense of this rapidly changing market.

Devices vs. platforms

samsung
htc
lg

DEVICES
sony ericsson
motorola

14

| ovum telecoms research agenDa 2011

android
RIM
Nokia

PLATFORMS

Apple
windows Phone

2011 Coverage Areas


The evolution of the
smartphone market
Over the last two years, smartphone sales
have consistently outperformed the sales
of traditional mobile phones, and during
the global recession were the only part of
the mobile phone market that grew at all.
Ovum will focus on mobile operators
strategies to bring the economics
of smartphones (with their ecosystem of
applications and monetization through app
stores) to the mass market of subscribers.
Ovum will continue to comprehensively
cover the smartphone market by
forecasting smartphone shipments,
tracking new device capabilities, profiling
the main players, and tracking changes in
developer strategies.

Adjacent players:
opportunities and threats for
telcos
Telecoms operators face significant
competition from other telcos and
cable companies, but they are increasingly
having to battle against disruptive
competitors coming from adjacent industries,
most notably online service providers and
consumer electronics vendors.
These players represent a significant
threat to telcos, as they often bring

disruptive business models, strong


consumer branding, and existing
relationships into direct competition
with telcos.
We will provide regular profiles of the
major adjacent players, including Google,
Facebook, Apple, Microsoft, and Nokia.
We will evaluate these players strategies
and ambitions, and identify the threats
they represent for telcos. But we will also
examine the opportunities for partnerships
with these players.

Opportunities in the
connected and extended home
The range of devices which are
connected is now extending far beyond
home computers and mobile phones.
Games consoles, tablet computers and
netbooks, connected televisions and
set-top boxes, plus other devices such as
in-car systems often driven by the same
technologies that underlie smartphones
are increasingly connected not only to the
Internet but also to each other.
We will be revisiting the concept of the
connected and extended home during
2011. We will examine how the platforms
and technologies deployed on these
devices can both help and hinder telcos
and other players in their attempts to gain
control in this important space.

The opportunities and


business cases for multiscreen application deployment
Managed device platforms are increasingly
becoming multi-device and multi-screen
platforms, crossing the traditional divide
between computers and televisions, and
between home-based devices and mobile
devices.
We will examine the process involved
in creating and developing multiscreen applications and services, from
conception to deployment. In particular,
we will focus on the Four Ds: devices,
development, deployment, and distribution
of applications, content, and services.
This multi-screen development will
rely increasingly on web technologies
including HTML5, Adobe Flash, and other
rich Internet application frameworks
areas where Ovum has well-established
expertise.
With a focus on specific requirements and
differences among vertical markets, this
work will provide valuable guidance to
developers and value system players of all
types seeking to prioritize development.

Devices and Platforms |

15

2011

Emerging markets

ANGEL DoBARDZIEv
PRACTICE LEADER

Market context
Growth in the mature markets of Asia, Europe, and North America
has slowed amid market saturation in many service areas. As a
result, many service providers and equipment vendors continue
to look at the emerging economies of Africa, Asia, Eastern
Europe, the Middle East, and South and Central America for
customer and revenue growth. In such geographies, large
swathes of the population are either un-served, or have very basic
communications services.

Our coverage
The Emerging Markets practice highlights the key product and
geographic growth opportunities in the growth economies and
provides deep insight on the emerging players and markets we
evaluate. In doing so, our central focus is on distilling the best
practice strategies that will assist service providers and vendors
to succeed and prosper in what are often unique and challenging
market environments.

Mobile data in the emerging markets: a


regional analysis
This study examines the opportunity and the best practice
service provider strategies in data, communications, and
applications services in the emerging markets on a regional
basis, including separate analysis of Asia, Eastern Europe,
Middle East and Africa, and South and Central America.

Emerging markets coverage


Central and South America
Coverage anchored around
Argentina, Brazil, Chile, and
Mexico

Eastern Europe, Russia, and CIS


Coverage anchored around Russia,
Poland, and Ukraine

Middle East and Africa


Coverage anchored
around GCC countries,
South Africa, Nigeria,
and Egypt

16

| ovum telecoms research agenDa 2011

Emerging Asia
Coverage
anchored
around China,
India, Malaysia,
Indonesia,
Thailand, and
Vietnam

2011 Coverage Areas


Emerging market service
provider strategies and
business models

Communications users in the


emerging markets: trends and
insights

Communications technology
direction and adoption in the
emerging markets

The focus of this research theme will


be to provide deep insight into the
strategy direction, challenges, execution,
operations, and business models of the
service providers in the emerging markets.
This will be achieved through case study
analysis into innovative/best practice
strategies, as well as cross-player, primary
research-led, in-depth analysis of key
strategy topics.

The focus of this theme will be to provide


analysis of the demand patterns among
consumers and enterprise customers in
the emerging markets. This will include
insights into hot consumer trends, changes
in enterprise communications spending
priorities, and analysis of SMEs in the
emerging markets. The research under
this theme will be delivered through indepth studies and surveys.

Service and marketing


innovation in the emerging
markets

Local market analysis:


industry insights, challenges,
and opportunities

Here we will assess the pace and nature


of changes in technology adoption in
the emerging markets by both users and
service providers. Issues covered will
include the adoption of WiMAX versus
LTE, shifts in the mobile device mix in the
emerging markets, as well as adoption
of IP services among emerging market
enterprises. The research here will be
delivered through in-depth studies and
focused briefs.

Within this theme, we will drill down into


the innovative services and marketing
approaches in the emerging markets
(e.g. content and applications); pricing
innovation (e.g. dynamic pricing);
channel management (e.g. SME channel
strategies), and communications services
for users at the bottom of the socioeconomic pyramid. This research will be
delivered through case studies and
focused briefs

This theme will focus on drawing deep


insight from select fast-growing or
innovative local markets. This will include
both local market case studies, as well as
cross-country analysis of select market
segments (e.g. consumer broadband,
enterprise mobility).

Emerging Markets |

17

2011

Enterprise

EvAN KIRCHHEImER
PRACTICE LEADER

Market context

Global services deals analysis

More than ever, enterprise communications is a market in flux:


traditional suppliers face challenges ranging from new delivery
models, such as cloud, to increasing competition from both new
upstarts and established service providers with an IT heritage.
Unified communications has evolved to include immersive video,
and service providers are moving up the value chain to provide
application services on top of the networks they already manage. In
such a dynamic environment, how can opportunity be distinguished
from threat, or indeed, threat be turned into opportunity?

Over 15 leading global telcos now supply us with


anonymized detailed contract information, allowing us
to build twice-yearly Global Services Deals Analysis
studies. Every six months we plot key contracts for major
global telcos, highlight successes in multinational deals,
compare and rank operators for MNC market impact,
identify strategic developments and trends in verticals
or geographies, map telco capabilities against MNC
requirements, and identify future market trends.

Our coverage

ve r s

s
eed

S up

Enterprise
communications

te new mar k

s tomer n

rs

As

et s

G ro w

s cu
ses

Bu

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ue

an

dm

ar g

der

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t
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an d w
e ak ne s s e s

hs

r
Suppo

er
v

rev

Us e r s
Un

les
t sa

Buyers: cio/it directors, customer service directors,


telecoms directors
from sme to mnc and across key industry verticals

Users: employees, customers

| ovum telecoms research agenDa 2011

ul a

itio

rs

Suppliers: vendors, global telcos, regional telcos, sls

18

pr

alua

Stim

rs

Ev

l ie

co m p e tito

ve

os

ck
Tr a

Evo
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ice
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iver

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et
rk

op

Enterprise value proposition

ye

Ovums Enterprise practice covers how businesses interact


with each other, with their employees, and with customers. This
includes managed and hosted communications services, evolving
communications networks, technologies, applications, and
professional services. With this as our remit, in 2011 we will focus
on unified communications for B2C and business to employee
(B2E) environments, service management and delivery (from
formulating, selling, pricing, and delivering, through to support), and
convergence (including voice/data, fixed/mobile, and public/private)
all within a framework of geographic and industry-specific insight.

&

2011 Coverage Areas


Service evolution
Managed service evolution is at the heart
of large telco strategies. In this theme we
will focus on three key areas: managed
mobility, the provision of IT as a service, and
the evolution of telco professional services
capabilities.
Our managed mobility research looks
at the evolving managed mobility
services market. It tracks and rates the
development of the major international
providers service portfolios, their
approach to service improvement,
organizational changes, partnerships, and
the growing role of the systems integrators.
While there is by no means any consensus
on what IT services capabilities the major
telco should have or be able to deliver,
we will cover how operators can position
themselves to win more deals for IT-centric
services.
Ovum will investigate the major operators
and vendors professional services teams,
existing professional services investments,
and future plans.

Vendor UC and mobility


strategies
In 2011, we will turn to focus on the vendor,
and in particular on mobility, social media,
and video.
Many UC and applications vendors have
long-held mobility portfolios. But how
are these evolving given the increasing
demand for managed services, the advent
of 3G, the obsolescence of legacy fixed

telephony platforms, and the changing


needs of enterprises and operators?
Ovum will cover vendor strategies for
incorporating social media and video
into enterprise communications. What
positions will UC vendors find themselves
in if and when social media turns the
customer into their own service agent, and
the employee into a knowledge hub? And
which video-based business applications
will strike a chord in the market?

Evolution of businessto-customer (B2C)


communications
Ovum will examine emerging technologies
which help enterprises in their quest to
provide improved service, with a focus on
two key areas: the impact of mobility on
provision of customer service and new
personalization technologies.
An increasingly mobile customer base
has translated into a requirement for
companies to provide service to customers
who are no longer tied to a desk phone
or PC. We will cover video and MMS
applications for mobile service, the impact
of 4G, and mobile device strategies for
customer care.
Proliferation of consumer touchpoints and
strengthening networks have created a
dilemma for customer-service centers
that want to maintain personalized
automated service. We will investigate
how technology providers are developing
new solutions to provide more natural,
personalized conversations in a customerservice context.

Changing telco service


delivery models
Ovum will focus on collaboration, softwareas-a-service, and nascent federated
services, extending our coverage of hosted
and cloud-based services to cover a broader
range of applications that fall within the
scope of collaboration as a service. We
will also investigate the end-user interest in
and impact on telcos for federated services
(business-to-business peering) for voice and
UC applications. In particular, we will focus
on SaaS (software-as-a-service) including
services targeted primarily at the SME market
for business productivity applications and
virtual desktop.

Regional views, with a


specific focus on BRIC and
broader APAC dynamics
In this theme, we bring an enterprise angle to
our analysis of BRIC countries. Specifically,
we will profile the MNC strategies of major
global telcos with respect to their ability to
serve Asia-Pacific clients. With a focus on
China, our mainland-based analysts will
shed light on regulatory constraints, cultural
barriers, the role of local partners, and the
needs of both Chinese enterprises and
international businesses seeking to establish
a mainland presence. Finally, we will combine
our enterprise mobility expertise with Ovums
emerging markets practice analysis to
explore major business mobility trends in
the Asia-Pacific region, and in emerging
markets such as India and Brazil, based on
our understanding of operator strategies and
enterprise buyer behavior in the relevant
countries.

enterPrise |

19

2011

Network Infrastructure

DANA CooPERSoN
PRACTICE LEADER

Market context

Quarterly market share reports

The crossroads where the telecoms industry stands is crowded


with players unsure of which direction to take. Networks and
partner ecosystems are evolving to support the massive changes
in the ways people and organizations communicate. Because the
exact timing and character of industry evolution is unknowable,

This report gathers and analyzes revenue and trend


information from more than 30 infrastructure system
vendors. We step beyond the numbers to provide
customers with insight based on in-depth analysis of
competitive and market trends by segment and region/
country.

infrastructure flexibility is critical.

Our coverage
The Network Infrastructure practice provides vendor, financial,
and network operator customers with a comprehensive view
of the trends including architecture, technology, and product
evolution; shifts in buyer requirements; and spending shifts that
affect critical business strategies as networks evolve to support
operators twin goals of cost reduction and new revenue growth.
Our experienced team builds on a data foundation compiled over
almost two decades. We offer solid research and logical analysis
to provide customers with critical guidance so they can step away
from the crossroads, confident that theyre headed in the right
direction.

Networks and the powerful forces reshaping


the telecoms landscape
Disruptive
competitors
industry
structural change
macroeconomic
volatility
Mo

rk

regulatory
obligations

Fix
e d Ne t wor k s

Disruptive
customers

| ovum telecoms research agenDa 2011

Ne t wo

Diverse
customer
needs and
expectations

new service
requirements

20

b ile

Disruptive
technology

investment
environment

2011 Coverage Areas


Networks as cost-reduction
enablers: improving network
efficiency

Networks as new services


enablers: supporting new
revenue generation

Telecoms service providers have had a


difficult time growing revenues and profits
due to competitive pressures and the
growing costs associated with explosive
traffic growth. As a consequence, network
operators have rightly looked to networks to
be more efficient in terms of cost per bit per
kilometre in the core, and cost per subscriber
at the edge. New technologies such as
40G and 100G, coherent detection, and
electronic dispersion compensation make
optical and packet networks more efficient
as they improve scalability, while new PONand DSL-based technologies and WiMAX
and LTE do the same for fixed and mobile
broadband, respectively. The expanding
role of IP, Ethernet, MPLS, and control
planes coupled with software-configurable
and programmable capabilities in fixed
and mobile networks improve operators
flexibility while maintaining carrier-class
manageability and lowering operations
costs. Optical switching and OTN (optical
transport networking) add further flexibility
and manageability in the network. New
flat network architectures and underlying
technologies will further help operators to
lower network power consumption, leading
to greener, less costly operations.

While new network technologies have been


used to lower the cost of communicating
even as bandwidth has grown, the
networks role as a platform to support
and enable new services and business
models is just starting to be discussed.
The networks role is expanding beyond
simply providing scalable bandwidth and
connectivity over a wide range of media to
collecting, storing, managing, and acting
on crucial information on users devices,
locations, preferences, and privileges.
This network-based intelligence should be
usable by network operators to enhance
users communications experiences, and
their own financial rewards for providing a
superior experience.

Ovum will address the theme of networks


as enablers of cost reduction through
regular reports on technology trends, vendor
strategies, and opportunity analyses that
focus on the above network topics.

Ovum will explore the networks role


in enhancing operators top lines through
mobile and fixed network opportunity
analyses, including carrier Ethernet
services analysis and forecasts; enterprise
vertical market private and managed
network research; infrastructure as a
service (IaaS) research; and subscriber
management research.

Networks as enablers of
globalization: supporting
emerging vs. developed
markets
Over the past five to 10 years there
has been a dramatic shift in the size
and growth of network infrastructure

equipment markets around the world.


Some emerging markets, including India
and China, have rapidly grown their use
of newer technologies such as HSPA+,
PON, ROADM, and 40G, while spending
in traditionally higher-growth, developed
markets in North America or Western
Europe has cooled down for a host of
reasons. Western European markets, for
example, have been slow to adopt PONand ROADM-based WDM networks due to
unclear or unfavorable regulatory regimes
and the willingness to wait for a next
generation of even more flexible network
elements, respectively. Mobile networks,
meanwhile, from the RAN through backhaul
and the core, show regional and country
variations based on a combination of
demographic, geography, GDP, 2G/3G
penetration, protectionism, and other
factors. These differences in growth rates
and technology preferences create volatile
market dynamics.
Ovum will analyze the shift of network
equipment procurements and deployments
to emerging markets and the impact
this shift has on buyer behavior, product
requirements, and infrastructure vendor
competitive dynamics. We pay particular
attention to comparing and contrasting
country markets within Asia-Pacific and
subregions within EMEA and how a
vendors strengths and weaknesses in one
region or country might affect its ability to
compete in another region or country.

Network Infrastructure |

21

2011

Policy and Regulation

mATTHEw HowETT
LEAD ANALYST

Market context

Global interconnect benchmarks

The development of regulation shapes the future of the


marketplace. As regulators intervene in markets, they advantage
or disadvantage specific players and change market dynamics.
In addition, as they set rates for interconnection, local loop
unbundling, and other forms of network access, they directly impact
operator revenues. Understanding current developments and future
directions in regulation is critical for success in todays market.

Ovums tried and tested interconnect benchmarking model


and methodology are internationally accepted and provide
you with the most authoritative comparison and analysis
of interconnect charges in the industry. Our quarterly
benchmarks cover fixed origination, fixed termination,
mobile termination, local loop unbundling, shared
access, and a retail/wholesale comparison for Europe,
the Americas, Asia-Pacific, and Middle East and Africa.
Raw interconnect charge data is also provided to enable
you to make your own calculations, as well as substantial
historical trend analysis. Data is presented in easy-to-use
charts and Excel spreadsheets.

Our coverage
Ovums Regulation research provides you with a deep
understanding of the impact of regulatory issues that shape the
future of the telecoms marketplace and the effect these have on
strategies and revenues. Our Regulation research and analysis
team has a global track record of providing policy and regulatory
advice in telecommunications. Our experts follow the worlds key
market regulatory developments and assess their relevance at a
regional and local level. We undertake quarterly benchmarking,
country profiling, and cross-country regulatory analysis.

22

| ovum telecoms research agenDa 2011

Regulatory scorecard
From 2011, Ovum will develop an annual regulatory
scorecard to benchmark the telecoms regulatory
framework in a number of best practice countries
around the world to compare the cost and effectiveness
of regulatory activity. It will be produced in consultation
with NRAs and telecoms operators and compare the
institutional and legislative environment affecting the sector
as well as the application of regulation by NRAs in key
wholesale access and retail markets.

2011 Coverage Areas


Next-generation access (NGA)
NGA continues to dominate regulatory
debate as significant investments are being
made by the public and private sectors.
How to incentivize investment is still a
challenge for many governments looking
to bring broadband to all of the population.
One of the key challenges facing NRAs
is how to strike the appropriate balance
between creating competition and
supporting investment. Determining how
access will be granted to alternative
operators, and on what basis, is central to
this.
We will look at how the migration from
copper to fiber is being managed, what
access obligations are being imposed,
and what regulated pricing exists. Working
collaboratively with other practice areas,
we will also address the role of government
in facilitating and financing rollout.

Spectrum policy
Spectrum is a finite resource which must
be allocated and managed appropriately.
Significant amounts of spectrum will
become available over the next 12
months as operators look to launch
next-generation mobile networks. How
regulators award this spectrum and what
obligations they place on license holders
are key regulatory issues.

Our analysis will focus on where and how


regulators are making spectrum available.
A particular focus will be on the award
of the digital dividend and the 2.6GHz
bands which are most likely to be jointly
utilized for deploying mobile broadband.
Through developing an internal database
of spectrum awards, benchmarks can be
made based on the type of award, and
by using population data we can make
comparisons between countries and
regions.

Regulating for tomorrow


Introducing rules to ensure net neutrality,
tackling illegal peer-to-peer file sharing,
and extending the scope of the universal
service obligation to include more than
functional Internet access are all topics
which have made the headlines recently.
Working out the details remains the
challenge and some difficult decisions
need to be taken in the very near
future. Regulators will need to take a
new approach to tackle the regulatory
challenges of tomorrow.
Our analysis will focus on how regulators
are approaching these issues by
comparing country case studies
from around the world. Analyzing the
implementation of regulatory frameworks
will be central to this. How regulators
engage with stakeholders and the

effectiveness of regulatory activity will


also be explored through a regulatory
scorecard we will develop over the course
of the year.

Interconnect
For many operators, interconnect has
traditionally accounted for a sizeable
proportion of revenues. However, the use
of standardized costing methodologies
looks set to exacerbate the already
downward trend in mobile termination
rates, and some NRAs will be considering
what alternative charging principles
could be used once rates fall to fixed call
termination levels.
Our core tracking of interconnect will
be through our quarterly interconnect
benchmarking. We will add new countries
and regions over the course of the year
to ensure a robust set of data exists from
which international comparisons can be
made.
Aside from the actual charges, we will
also look in depth at how the rates were
determined by the NRA and steps that
are being taken to reduce and harmonize
termination rates between countries. We
will also focus on what future charging
principles such as bill and keep might look
like once the current regimes expire.

Policy and Regulation |

23

2011

Telco operations

CLARE mCCARTHY
LEAD ANALYST

Market context

Telco customer service insights

The telco business has changed dramatically over the last five
years. Previously, technology reigned supreme, but now the
customer is the focus of all activities. With cheap credit and
debt no longer available, telcos need realistic business cases to
justify heavily scrutinized investment decisions. This has called
for a comprehensive review of how telcos operate and requires
the consolidation and rationalization of people, platforms, and
processes. The resulting lean and cost efficient infrastructure
should help fixed, mobile, and integrated operators respond more
quickly to market and customer demands.

We will survey operators about their customer care


operations and evaluate their responses to customers
contacting them for support, changes in service, or
information.

Our coverage
Many tier-1 operators in mature markets are addressing these
issues, but it is likely to be a work in progress for most telcos over
the next 10 years. The Telco Operations practice reviews telcos
operational and transformation strategies and how these strategies
are implemented internally. We identify the current challenges and
areas of business pain, the future business objectives, and activities
required to achieve those objectives.

Change in emphasis for the telco business metrics

Todays telco metrics

Traditional telco metrics


Balanced scorecards
financial metrics - capex related

Greater weighting on:

operational data - calls & lines

customer satisfaction

5 year business plan

flexibility of business

Product pro tability

time to market

network ef ciency

sustainability

share price & generation of shareholder


value

24

| ovum telecoms research agenDa 2011

Process efciency - increased rft & reduced cycle time


Business models - measuring integration & automation
lifetime value of customer
integrated operational efciency

2011 Coverage Areas


Transformation and
operational strategy review
The economic and competitive pressure on
telcos means that they must review their
operating model, and how they respond
and deliver to customers.
Next-generation network programs
have been under way for some time, but
implementing the NGN or NGA strategy
and addressing the impact this has
on the company structure, platforms,
and business processes are all linked
decisions.
We will continue to look at how telcos are
responding to these requirements, as well
as responding to the demands of the cloud
and social networks.

Customer experience
In these highly competitive times, a
good customer experience is essential
to keeping customers satisfied and loyal.
Most customers form their opinion of the
service they receive from the telcos front
line call centers for customer service and
technical support, or through their direct

sales outlets. However, the back-office


systems, the operational and business
support systems, which assure the order
fulfillment, activation, billing, and fault
reporting processes, play an increasingly
important role in delivering good service
and reinforcing the customer relationship.
Telco Operations identifies the various
business pain points, the areas for
improvements, and the actions telcos can
take to improve their customer offers and
support to more satisfactory levels.

Customer centricity
Lack of customer focus is one of the
root causes of failure in the customer
experience. It sounds obvious, but it is
only now that we see telcos revisiting their
product development and management
process and putting the customer at the
center of process. This process can draw
on the databases holding information on
the customer, product, usage, pricing data
and so forth, but to date, telcos have been
incredibly bad at organizing that data for
commercial gain.

We investigate the changes telcos have


made to organizing their customer data and
product development processes, which in
turn feed in to an overall improvement in the
customer experience.

Efficiency and optimization


Getting more out of existing assets
and expecting more from new assets
are prerequisites for growing margins.
Telcos need to grow revenues as well as
manage the cost base in order to present
themselves as viable ongoing concerns.
We will continue to look at activities where
telcos can make a difference to both sides
of the equation with research on revenue
management and service assurance. For
example, effective revenue management
activities will address billing accuracy
and fraud. This will ensure that the telco
receives payment for the services it
provides. More timely service assurance
will ensure that potential network or service
faults are effectively managed out of the
business before they cause problems, and
more informed policy management can also
improve telcos revenue recognition.

Telco Operations |

25

8,000,000

Connections (000s)

Telco Strategy

7,000,000

Connections (000s)

2011

9,000,000

6,000,000
9,000,000

5,000,000

8,000,000

4,000,000

7,000,000

3,000,000

6,000,000

2,000,000

5,000,000

1,000,000

4,000,000

0
2008

3,000,000

2009

2010

2011

2012

2013

2014

2015

2,000,000
1,000,000
0
2008

2009

2010

2011

2012

2013

2014

2015

JEREmY GREEN
PRACTICE LEADER

9,000,000
8,000,000

partners, and potentially disruptive technologies.

Our coverage
Ovums Telecoms Strategy practice provides a perspective
across the entire fixed, mobile, and integrated communications
marketplace, offering a converged view of the future. Our remit is
to provide clients with insight, across the strategic horizon, into the
strategic challenges facing operators; how we see these market
forces evolving; and our advice to operators on how they should
respond.

Connections (000s)

Connections (000s)

The global mobile and fixed market


outlooks

9,000,000

6,000,000

8,000,000

5,000,000

7,000,000

These reports provide Ovums perspective on market


trends that will shape the mobile industry to 2016. They
2,000,000
4,000,000
are intended as an accompaniment to our mobile and fixed
1,000,000
3,000,000
forecasts, containing analysis of the drivers shaping the
0
2,000,000
mobile
xed telecoms
industries
and our
2008 and fi
2009
2010
2011
2012
2013 forecasts.
2014
4,000,000

6,000,000

3,000,000

5,000,000

1,000,000

0
2008

2009

2010

2011

2012

2013

2014

2015

2015

Global mobile connections by technology, 20082015


9,000,000
8,000,000
9,000,000

7,000,000

8,000,000

Connections (000s)

Todays telecoms operators inhabit an increasingly complex and


challenging environment. They must deal with an explosion of data
traffic (driven by the growth in video and multimedia applications)
and with the introduction of new technologies that are intended to
allow them to carry this traffic profitably. At the same time, they
must integrate disparate fixed, mobile, and broadband services
both to meet enhanced customer demands and satisfy investor,
internal, and operational efficiency imperatives. Moreover, they
must do this in the face of a slew of new competitors, potential

7,000,000

Connections (000s)

Market context

6,000,000

7,000,000

5,000,000

6,000,000

4,000,000

5,000,000

3,000,000

4,000,000

2,000,000
3,000,000
1,000,000
2,000,000
0
1,000,000
2008

0
2008

2009
2009

2010
2010

2011
2011

2G GSM
2G GSM

HSPA
HSPA

CDMA2000 1XRTT
CDMA2000 1XRTT

WCDMA
WCDMA

26

| ovum telecoms research agenDa 2011

2012

2013

2012

2013

2014
2014

2015
2015

LTE
LTE

CDMA 1XEV-DO

CDMA 1XEV-DO

TD-SCDMA (incl. TD-HSPA)

TD-SCDMA (incl. TD-HSPA)

Mobile WIMAX

Mobile WIMAX

2011 Coverage Areas


The future telecoms market
outlook
Fixed, mobile, and integrated operators
will face a myriad of demand, regulatory,
and competitive challenges over the next
decade. Data was supposed to be the
savior, but both fixed and mobile broadband
players are finding that the future threatens
to bring commoditization and poor
margins unless they invest and adapt. It is
crucial that operators adapt to changing
marketing conditions as the telecoms
industry matures, or risk losing investors in
increasingly uncertain financial markets.
We will continue to track the evolution of
the telecoms market over the next five to
10 years. Our highly regarded forecasts
will provide the quantitative perspective
to our five-year outlook. Qualitative
perspectives will be provided by our
mobile and fixed market outlooks. We will
also look at how voice and data services
will develop in the longer term across
fixed, mobile, and integrated operators,
the resultant traffic explosion, and how
operators must respond.

The role of the network


operator in the future
ecosystem
Our Telecoms 2020 series concluded that
the telecoms ecosystem will come to be
dominated by two new entities referred to
as SMART players and LEAN operators.
The SMART (services, management,
applications, relationships, and technology)
role radically extends how some device
vendors and application providers today

provide managed experiences based


on Internet and cloud-based services,
branded devices, open operating systems,
and application stores.
The agnosticism of the LEAN (low-cost
enablers of agnostic networks) model
relates to both applications and devices.
Such players will enable devices and
services of others to function, rather
than supporting one platform or another.
They will compete on price, performance
(including coverage, capacity, and speed)
and flexibility to become SMART player
connectivity providers.
We will be revisiting our Telecoms 2020
research to assess how operators have
responded to date, and the signposts
visible today that point along the road to
SMART and LEAN.

The fixed and mobile nextgeneration access business


case
The growth of high bandwidth services
demands that operators continuously
invest to upgrade their networks. Yet
there is no certainty that there will be
incremental revenue growth from new
services to justify the investment outlay,
especially in next-generation technologies
such as fiber or LTE. Faced with this
dilemma, operators will increasingly seek
ways of minimizing the financial burden of
network upgrades.
Our research will focus on the business
case for next-generation fixed, mobile,
and converged networks. In particular, we

will increase our focus on the convergent


challenges of integrated operators,
especially with regards to how such
operators should invest for the future.
We will also look at the strategies for
reducing the cost of network deployment
and operation, such as network sharing
and open access. This could ultimately
generate interest in the Neutral Host
model for telecoms access. To what extent
this will succeed is the big unknown.

Assessing operator responses


to maturing markets
In rapidly maturing markets, the threat of
commoditization is ever-present. Therefore,
differentiation is a key strategic and tactical
challenge for fixed, mobile, and integrated
operators. Nevertheless, clear differences
exist in how operators can create, position,
and promote services to different audiences
with consequent variations in the results
achieved. Two important success factors
are bundling and convergent strategies. But
merger and acquisition activity, partnerships,
and joint ventures will also be crucial to
generate scale and, in theory, efficiencies.
Finally, the optimization of innovation in the
service portfolio is growing in importance.
Our research will focus on how operators
should respond to the disruptive trends that
are forcing them to decide their future role in
the telecoms industry. We will be analyzing
individual telcos competitive differentiation,
positioning, and corporate performance
to assess how well they have met their
challenges, as well as how they are faring
against their competitors.

Telco Strategy |

27

2011

2009 European wholesale market share

wholesale

BT, 18.1%

Others, 27.2%

France Telecom,
16.2%

Swisscom, 2.5%
Verizon,
2.5%
DAvID
JAmES
TeliaSonera,
LEAD ANALYST2.6%
AT&T, 3.1%
KPN, 4.4%
Market context
Telefonica, 7.3%

Telecom Italia, 8.0%

2009 European wholesale market share

European wholesale market share


Deutsche Telekom,

Since 2005, we have analyzed the results of the major


Telecoms service providers can no longer satisfy all of their
7.9%
BT, 18.1%
players
in the European wholesale market to report on the
customers needs themselves without relying on wholesale
Others, 27.2%
changing size of the market, and to estimate their shares of
services bought from other service providers. Buying services
the national and international wholesale markets for voice
wholesale can decrease time to market, transform capital costs into
and non-voice services.
operational costs, and take advantage of other players experience
and expertise. The wholesale market has become an essential part
Wholesale customer survey
France Telecom,
of the telecoms landscape, with an increasing range of services
16.2%
We have undertaken
a biennial qualitative survey of
Swisscom,
2.5%
being available in an ever more complex
value
web. By offering
wholesaler
customers
since 2003. In this report we
Verizon, 2.5%
wholesale services, players can earn revenues
from competitors,
TeliaSonera, 2.6%
analyze and report on the changing needs of wholesale
AT&T,
3.1%
increase the market for their services, raise the
utilization
of their
Telecom
Italia,
8.0%
customers
and
the
degree to which they believe that their
KPN, 4.4%
infrastructure thereby reducing unit costs, and enable other
players
Deutsche
Telekom, meet those needs.
Telefonica,
7.3%
suppliers
7.9%
to enter otherwise unreachable market segments.

Our coverage
While telecoms service providers across the globe now accept that
providing services on a wholesale basis can be a valuable channel
to market, in the face of increasing competition in the wholesale
market they need to understand how to differentiate themselves
from their competitors. Ovums Wholesale research and analysis
helps players understand and respond to their competitors
strategies, their customers changing needs, and the changing

2009 European wholesale market share

18.1%
27.2%

market for wholesale services.

18.1%

2.5%
2.5%
2.6%
2.5%
2.5%
3.1%
2.6%

16.2%

8.0%
4.4%

3.1%

BT

4.4%

7.3% 7.9%

| ovum telecoms research agenDa 2011

8.0%
7.9%

7.3%

BT

Telefonica

France Telecom

KPN

Telecom Italia

AT&T

Deutsche Telekom
France
Telecom

28

16.2%

27.2%

Telecom Italia

Verizon
Swisscom

Telefonica

Ver

KPN

Sw

AT&T

Oth

Others

TeliaSonera

2011 Coverage Areas


Identifying and targeting
wholesale customer segments
The number and variety of intermediaries
wishing to buy wholesale services has
increased dramatically over the last
decade as wholesale markets have
developed. These wholesale customers
differ significantly in the services they buy,
the criteria they use to select wholesale
providers, and how they do business with
wholesaler service providers. Wholesalers
must understand and respond to these
differences if they are to win and retain
different customer segments business.
During 2011, we will examine the differing
needs of traditional and emerging
wholesale customer segments, such
as resellers, content owners, and the
increasing number of non-telco brands
that must bundle telecoms services to
serve their existing customers. We also
plan to continue our research into the
criteria wholesalers use to segment their
customers, and the effectiveness of that
segmentation.

Value-added wholesale
services
Wholesale is no longer limited to the
sale of long-distance capacity and voice
minutes to intermediaries. Wholesalers
are moving up the value chain to offer
increasingly sophisticated service
bundles, tailored to particular customers

needs. There is a trend towards offering


more and more services from the cloud,
where they are hosted in or around the
periphery of the network, which plays to
many infrastructure-based wholesalers
strengths. Now almost any telecoms
service that is sold to retail customers is
available on a wholesale basis. However,
selling a value-added retail service to
wholesale customers entails more than
simply relabeling it as a wholesale service.
Our research on this theme will explore
the wholesale market for a range of
existing and proposed retail value-added
services. We will investigate the process
of transforming retail services for the
wholesale channel, and the targeting
of value-added services for particular
wholesale customer niches.

Developing wholesale
business models
Players in the wholesale market are
following a variety of different business
models. Some carriers have integrated
their domestic and international wholesale
businesses; others keep them separate.
Some wholesalers have decided to limit
their portfolios to commodity services
(such as voice, transit, and bandwidth);
others offer broad portfolios of increasingly
complex services and service bundles.
In 2011, we will analyze the different
business models being followed in

the wholesale market and assess the


effectiveness of these business models for
players in the industry. We will research
the factors that influence wholesalers
choice of business model and the
effectiveness of these business models in
achieving their aims.

The future of wholesale voice


Although wholesale voice traffic volumes
are continuing to grow, the nature of that
voice traffic is changing. Mobile-originated
traffic is growing faster than fixedoriginated, which is actually beginning
to decline in some markets. However,
competition (particularly from VoIP) and
regulatory pressure to cut termination
rates are combining to cut voice revenues
and margins. An increasing number of
telecoms service providers will turn to
specialists to carry their voice traffic
so they can benefit from their larger
economies of scale and lower costs.
We plan to analyze when and where
wholesale price declines will end and
research the ongoing consolidation of
the international wholesale voice market.
We will examine the long-term impact
of disruptive players and innovative
platforms, such as Skype and Google.
We will investigate the potential market
for value-added wholesale voice services,
including conferencing, network-based
recording, and transcription services.

Wholesale |

29

2011

Research Portfolio
Information Types

Reports

30

Analyst opinion

Short event-, news-, or trend-driven premium analysis from our global analyst
team.

Benchmark
reports

Assessments of operator and vendor strengths relative to their peer group and
competitors.

Market reports

Ongoing strategic analysis of evolving trends in wholesale, enterprise,


consumer, emerging and mature markets, networking, devices, regulation, and
components. Market reports include competitor analyses; country and market
profiles; market trend/share/forecast reports; operator strategy analyses and
profiles; and a range of regulatory reports (e.g. interconnect analyses and
unbundled local loop analyses).

Market segment
profiles

Deep dives on optical networking segments, for example metro WDM, DWDM
backbone, aggregation, and bandwidth management, plus application segments
including carrier Ethernet and converged packet optical (CPO).

Research briefs

Short reports and articles analyzing market events, industry trends, and vendor
news.

Case studies

Analyses of service providers activities and progress in improving operations,


processes, and systems to compete in the market.

Surveys

Surveys and analysis of service providers and equipment vendors (as


customers), and consumer and enterprise end users.

Trackers

Regularly updated tracking of new service, product, and competitive trends in


key telecoms market segments.

Vendor profiles

In-depth examinations of leading vendors and innovators marketing, product,


service, and technology strategies.

Vendor contracts
database

Ovums database of vendor contracts for telecoms product categories including


access, data networking, IP infrastructure, IPTV, managed network services,
optical networking, outside plant, software, switches, VoD, voice-over-cable,
VoIP, and wireless.

| OVUM TELECOMs Research Agenda 2011

Information Types
Market share
reporting

Quarterly market share reporting on the broadband access (DSL, CMTS, FTTx),
optical components, optical networks, switching and routing, and vendor services
markets.
Quarterly tracking of operator financials, contracts and deals, including

Quarterly
industry
results
tracking

publication of contracts and deals database updates, PowerPoint presentations


on operator financial health, and spreadsheets on operator revenues and capex.
Also includes quarterly shipments of Open Mobile Alliance firmware and software,
and a quarterly equipment vendor update reviewing trends in fixed network
equipment spending.
Five-year annual forecasts delivered in Excel spreadsheet format, many
accompanied by written analysis of global, regional, and country markets:
Broadband content: digital television, digital music, gaming, and gambling
Consumer FTTx , cable modem, VoIP
Contact center: CRM agent desktop applications
Contact center: IVR and speech self-selected solutions technologies
Contact center: workforce optimization technologies
Enterprise Ethernet services

Interactive
models

Enterprise mobility and remote access


Enterprise VPN, managed and hosted voice, and conferencing
Fixed voice and fixed Internet services
Mobile broadband users and revenues
Mobile connections, voice, and data, with technology splits
Forecasts

Mobile handsets, smartphones, and tablet devices


Mobile virtual network operator (MVNO)
Optical networking, switching/routing, broadband access equipment
Operator revenue and capex
Parallel optics
SIP trunking
WAN, datacom, and FTTx optical components
Wholesale broadband Internet access
Wholesale managed data services
Wholesale voice traffic and revenues
Wireless backhaul traffic, service revenue, and equipment revenue
Wireless messaging.
For a detailed Forecast Schedule for 2011, please contact us at
enquiries@ovum.com.

Research Portfolio |

31

2011

Key Benefits
CORE EXPERTISE
Corporate and
Strategic Planning

DECISION MAKERS
Board Members
Executive
Management
Committee
Strategic Planners

KEY BUSINESS TASKS


Annual and five-year
planning

Market reports

Identify merger and


acquisition targets

Forecasting reports/
interactive models

Understand market
dynamics and needs

Market share reports

Size, prioritize,
and target market
opportunities

New Product
Development and
Commercialization

Research and
Development Director
Marketing Director

KNOWLEDGE CENTER
TOOLS

Identify required
features and function
sets
Establish ROI
justification

Vendor Matrix

BENEFIT/ROI
Make more effective
strategic and
business decisions,
faster

Market segment
profiles
Financial deals tracker

Market reports
Benchmark reports
Customer surveys

Accelerate delivery
of profitable revenue
streams

Select appropriate
pricing models
Establish cost and
timing of market entry

Customer Tracking

Marketing Manager
Brand Manager

Identify business
drivers and needs
Target pain points

Customer surveys
Forecasting reports/
interactive models

Establish minimum
acceptance criteria

Enhance customer
proposition and
improve customer
targeting

Understand adoption
criteria

Competitor Tracking

Chief Information
Director
Market Research

Identify competitors
sales, product,
messaging, and
channel strategy
Understand strengths
and weaknesses
Understand the
perception of
competitors

32

| Key Benefits

Market reports
Benchmark reports
Profiles and case
studies
Analyst opinion
Research briefs

Maintain or obtain
competitive
advantage

2011

Global Telecoms Analyzer

One interface. Easy comparison. Quick analysis.


Size and segment the global telecoms market with the Global Telecoms Analyzer. A
NEW interactive database providing access to Ovums entire telecoms forecast portfolio,
all in one place.

How can it benefit you?


In one click you have access to over
20,000 individual telecoms forecasts. This
allows you to easily unlock key market
trends, quickly compare data across 50
countries, drill down into a single segment,
or build a custom view combining different
forecasts.
Nearly 2,000 individual product categories
are included, spanning these major
telecoms segments:
Mobile voice, data, and broadband
Fixed (wireline) services
Consumer voice, broadband, digital
music, and telco TV
Enterprise Ethernet, IP VPN, mobility,
and managed services
Wholesale voice, access, and managed
services
Mobile devices (handsets and
smartphones)
Optical networking, packet transport,
and broadband access equipment
Optical components for WAN, datacom,
and FTTx applications
This NEW premium tool also provides
custom charting capability and downloads
to Excel, Word, and PowerPoint formats.

Contact enquiries@ovum.com
to start using now

Global Telecoms Analyzer |

33

2011

Access a full site


index

Knowledge Center

the rst stop for all your


business intelligence needs.
this intuitive research
platform gives you more
than just reports and
spreadsheets.
Ovums Knowledge Center allows you
unlimited access to intuitive interactive
models and thought leading analysis on
critical market events and future trends.
With specialist researchers and analysts
on the ground all over the world, including
emerging markets, the Knowledge Center
provides you with the latest intelligence
from the front line of changing markets.
Why spend time searching unwieldy
research libraries when you can put the
Knowledge Centers time saving tools
to work finding and extracting exactly
what you need in a matter of minutes?
Email Research Alerts allow you to track
competitor activity, new research in your
area of interest, or news and analyst
comment on a daily or weekly basis.

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interested in.

Get in touch with Ask


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you might have or gain further
insight relevant to your business
needs.

34

| ovum telecoms research agenDa 2011

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tab provides a full index
of Knowledge Center
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Customizable My
Home page

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any page you browse to as My
Home. The next time you visit
the site youll enter directly at
this page.

A Saved Search drop-down


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that you use most often is only
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Be the first to know


with Research Alerts
Customizable Research Alerts
notify you daily or weekly about
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Stay in tune with market trends,
track competitor developments,
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Clip, extract, and build


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Contact demo@ovum.com to
book your free training session

Once you have found the


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Knowledge Centers workflow
tools allow you to use and share
the information with colleagues.
You can build your own reports
or presentations from searched
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KnowleDge center |

35

2011

Research Store

Gain access to market


leading research in your
industry.
The Research Store is Ovums online
shop where you can purchase thousands
of research products. Browse through our
portfolio of reports or enter keywords in to
the search box to find the information you
are looking for.

The Ovum Research Store


provides:
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save on some of our most popular titles

Visit the store now:


store.ovum.com

36

| research store

2011

Consulting

one company innite possibilities.


Ovums consulting team draws on a deep vein of thought leadership
and industry expertise from over 80 telecoms analysts based right
around the globe. With access to proprietary primary research data
and industry leader forums, Ovum has a head start over traditional
consultancy firms.

Ovum Telecoms Consulting specializes in


four distinct areas:
Regulation and Policy
Telecommunications
Telecoms IT
Telecoms sourcing

Why Ovum Consulting is different:

FAST

Ovum has access to


intellectual capital
and primary research
resources unmatched
by traditional consulting
rms. Choosing Ovum will
give you a clear head start.

SmART

With decades of experience


in the telecoms industry, our
80+ analysts are resolutely
independent and work under
an Independence Charter
that governs all projects and
research across the rm.

ACCuRATE

Objective opinion
leadership is a mainstay of
what youll get from Ovum
Consulting. However, our
opinions will always be
based on robust research,
enabling us to deliver
fact-based and pragmatic
solutions to our clients.

Contact us for a brochure on our consultancy services:


enquiries@ovum.com

consulting |

37

Technology and Teleco

TM

oms insight. Now Mobile

BlackBerry and Android versions available early 2011


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