Evolution of Telecoms Services in Europe Marta Muñoz Méndez-Villamil Research Director, EMEA Telecommunications
Agenda Global ICT trends European telecom market realities Evolution of the consumer Helping the European enterprise Telecom SP positioning IDC Visit us at IDC.com and follow us on Twitter: @IDC 2
Third Platform for ICT Industry Growth Trillions of Things Billions of Users Social Business Mobility 2011 Big Data/ Analytics Cloud Services Millions of Apps Hundreds of Millions of Users LAN/ Internet PC 1986 Client- Server Tens of Thousands of Apps Millions of Users Thousands of Apps IDC Visit us at IDC.com and follow us on Twitter: @IDC 3
Evolving Telecom Ecosystem IDC Visit us at IDC.com and follow us on Twitter: @IDC 4
European Connectivity Markets 200 180 160 140 120 100 80 60 40 20 0 Spending on Legacy Services ($B) CAGR -6% 2012 2013 2014 2015 2016 2017 Legacy Fixed Data TDM Voice Mobile Messaging Mobile Voice 250 200 150 100 50 0 Spending on Growth Services ($B) CAGR 6% 2012 2013 2014 2015 2016 2017 IP VPN Internet Access IP Voice Mobile Data Ethernet 350 300 250 200 Spending on Connectivity ($B) Growth CAGR -1% 150 100 50 0 Legacy 2012 2013 2014 2015 2016 2017 Source: IDC European Telecom Services Database, 2Q2013 IDC Visit us at IDC.com and follow us on Twitter: @IDC 5
250 200 European Telecom Associated Markets Spending on Associated Services ($B) CAGR 8% UCC Security 150 100 50 0 2012 2013 2014 2015 2016 2017 Mobility Services Network Equipment & Services Cloud & DC Services Consumer Content 500 400 300 200 100 0 Spending on Connectivity and Associated Services ($B) Associated Growth Legacy CAGR 2% 2012 2013 2014 2015 2016 2017 Source: IDC European Telecom Services Database, 2Q2013 IDC Visit us at IDC.com and follow us on Twitter: @IDC 6
Fixed Broadband Penetration Every Country is Different Fixed and Mobile Broadband Penetration in Europe in 2012 CH NL NO DK BE FR DE GB FI Average for WE is 31% SE ES AT GR IT PT Average for WE is 55% Mobile Broadband Penetration Source: IDC European Telecom Services Database, 2Q2013 IDC Visit us at IDC.com and follow us on Twitter: @IDC 7
Personal and household devices that access digital content are proliferating And lots of those devices leave the house, at least occasionally
Consumers and the Cloud Source: IDC ConsumerScape 360 Survey, 2012 (n=4850) IDC Visit us at IDC.com and follow us on Twitter: @IDC 9
Consumer Market Trends Industry Next-gen Broadband gathers pace Regulators realise they need to incentivize investment Focus on cost reduction persists Core Services Mobile price plans follow fixed line plan evolution OTT apps an increasing draw for consumers Mobile ops focus on adding value to access Fixed line broadband still emphasises digital TV as a cornerstone of added value Devices & Platforms Multiple Internet device usage growing Mobile devices increasingly predominate in shaping patterns of Internet usage Internet connected TVs are gaining traction TV-centric ecosystem of digital entertainment is still up for grabs IDC Visit us at IDC.com and follow us on Twitter: @IDC 10
The love-hate triangle: an expanding and shifting competitive landscape Network operators Add new service revenue streams Build value-added into access services Use services to generate demand for devices Differentiate Lock users in Device & platform vendors Diversify revenues, improve margins Hold user details & content Customerfacing service provider Maintain visibility with the customer Use devices to drive users to content & services Personalise services, target ads Expand user base Over-the-top service providers IDC Visit us at IDC.com and follow us on Twitter: @IDC 11
Business Market Trends Generic Enterprises are looking for cost optimization and innovative, flexible features/solutions Hybrid networks increasingly common Enterprises looking for added value (performance management, application monitoring, bandwidth provisioning, and SLA capabilities). Network services increasingly part of solution selling strategy. Operators should beware of dedicating too little attention to bread and butter services Core Services Next generation access key IP-VPN and Corporate IA markets mature Growth area is Ethernet Enterprise Voice TDM market in permanent decline SPs need to push IP Voice as aggressively as they can IP Voice comes with added value in the form of UCC and Cloud IDC Visit us at IDC.com and follow us on Twitter: @IDC 12
Do you Know your Enterprise Clients? Priorities One stop shopping? Upgrade infrastructure/ increase capacity Data backup & recovery Improving WAN/ network security Improving the performance of apps on Business apps on mobile devices IP voice and data convergence UCC Cloud services Enabling enterprise social networking Putting video over the WAN Fixed and mobile services Voice and data services Network services and IT or cloud services Moving to Pay-as-you-Use model Sacrifice contract terms for discounts Buying services through an online marketplace 0% 10% 20% 30% 40% 50% Buying preferences Quality of service and support Technology innovation Geographical coverage Contract flexibility The ability to provide mobile and fixed- 003 003 003 003 003 003 003 Provider Selection Priorities A broad service portfolio Vertical/ industry expertise Moving from CPE to Cloud service strategy Hosted/Cloud solutions 0% 10% 20% 30% 40% 50% 60% 70% 002 003 IDC 003 Visit us at IDC.com 003 and follow us on Twitter: @IDC 13 Pricing Source: IDC European Enterprise Survey 2013 (n=720)
Businesses and the Cloud Users prefer ITSP for Cloud IaaS Why not buy Cloud from NSP? Dont want to buy Cloud and connectivity from same provider NSP lacking skills at present NSP less innovative on Cloud NSP ITSP Bad experience with NSP Cloud SaaS NSP is expensive 0% 10% 20% 30% 40% Impact of Cloud adoption on Network NSP CaaS ITSP Increase bandwidth Use WAN optimisation Use a CoS mechanism NSP ITSP Use VPN instead of the Internet Buy a higher quality network service Change network service providers No change to network IDC Visit us at IDC.com and follow us on Twitter: @IDC 0% 10% 20% 30% 40% 14 Source: IDC European Enterprise Survey 2013 (n=720)
Firms now entering next phase of Enterprise Mobility 2011/12 Consumerization 2013+ Mobile First? ios + Blackberry Silos Executive Jewellery BYO Device Experimental Apps (mainly B2C) IT Night Job Risk Management Point Solutions Fluid, Multi-OS >50% of employees BYO Tools Widespread Apps (B2E/B + 2 nd Gen B2C) Dedicated Mobile IT & CoEs Business Enablement Platform Architecture Source: IDC Mobile Enterprise Strategies IDC Visit us at IDC.com and follow us on Twitter: @IDC 15
Mobility Solutions Channel Getting Serious Through which channel(s) would you consider purchasing a mobile enterprise solution as a trusted partner? Source: IDC EMEA Enterprise IDC Visit us Mobility at IDC.com Surveys and follow 2012 us on - Twitter: EU Sample, @IDC N800 16
Telcos as Next-Gen SPs Strengths The Network Communications is at the centre of life Customer relationship Innovation Brand Weaknesses Agility & flexibility Speed of transformation Next-gen skill sets Partnerships Business Model Opportunities Traffic is growing Internet of things Big Data Leveraging Cloud Next-gen partnerships Threats Low position in emerging eco-system Traffic is growing dealing with it Next-Gen innovation Next-Gen brands OTT IDC Visit us at IDC.com and follow us on Twitter: @IDC 17
IDC Opinion Telecoms is still a good business to be in. The network is key to delivering Services to customers. The challenge is to focus on customers and services, not just the network. The glass is half-full, not half empty IDC Visit us at IDC.com and follow us on Twitter: @IDC 18
Gracias/Thank You Marta Muñoz Méndez-Villamil Research Director, IDC EMEA Telecommunications mmunoz@idc.com +34 677 584 055 IDC Visit us at IDC.com and follow us on Twitter: @IDC 19