The 2020 Digital Partner SEIZING THE OPEN ECOSYSTEM OPPORTUNITY

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1 The 2020 Digital Partner SEIZING THE OPEN ECOSYSTEM OPPORTUNITY NIK WILLETTS, CEO TM FORUM DIGITAL TRANSFORMATION MIDDLE EAST 2018 DUBAI JANUARY 22, TM Forum 1

2 The first 4 generations of mobile followed a repeatable recipe Mobile Technology Consumer Devices Industry Growth Operations & IT 2018 TM Forum 2

3 But in the last decade, connectivity has become a commodity TECH COMPANIES LEAD IN R&D SPENDING Amazon $16.1 billion S&P 500 Index Alphabet Intel Microsoft Apple Johnson & Johnson GeneralMotors Pfizer Ford Oracle $10.0 $9.0 $8.1 $7.8 $7.3 $6.2 $13.9 $12.7 $12.3 Source: Factsheet CSP SHARE OFAVAILABLE EBITDA SCALE & SHARE OF PROFIT S&P 500 Telecommunications Index 10Yr annual return -1.47% commoditisation Total EBITDA Available to CSPs % available EBITDA Volume/scale 2018 TM Forum 3

4 5G open ecosystems represent a $582bn collaborative opportunity New addressable Current operator 5G enabled revenues service revenues CURRENT OPERATOR + 5G ADDRESSABLE REVENUES INCREMENTAL $582BN SPLIT BY INDUSTRY (2026) $bn +20% Industry potential to add 20%+ new revenues by 2026 Media & Enterainment Healthcare Financial Services Automotive 11% 13% 8% 5% 19% $582Bn 2026 Operator addressable 5G digitalization revenues 17% Manufacturing Energy & Utilities 13% 13% Public Transport Public Safety Source: Ericsson & Arthur D. Little 2018 TM Forum 4

5 Seizing the opportunity requires radical business transformation ENHANCED MOBILE BROADBAND CONNECTIVITY PROVIDER Gigabytes in a second ECOSYSTEM ENABLER 3D video, UHD screens Smart Home/Building Smart City Work and play in the cloud Augmented reality Industry automation Mission critical application e.g. remote robotic surgery 5G DEMANDS BUSINESS TRANSFORMATION, NOT JUST NEW TECHNOLOGY Self Driving Car MASSIVE MACHINE TYPE COMMUNICATIONS ULTRA-RELIABLE AND LOW LATENCY COMMUNICATIONS 5G Triangle Diagram Source: ITU 2018 TM Forum 5

6 Successful in transformation requires a clear ambition, executed fast Digital enablement Digital Ecosystem Enabler Digital Partner Traditional CSP Digital CSP Digital efficiency 2018 TM Forum 6

7 Digital enablement Business agility matters more than detailed strategy Blue Ocean Opportunities e.g. 5G, IoT, B2B2x $1.2tn Total industry additional profit * B2B Focus Red Ocean Battlegrounds e.g. Connectivity, Content B2C Focus Digital efficiency Source: World Economic Forum 2018 TM Forum 7

8 Successful transformation happens in concert, not departmental silos Digital enablement LEADERSHIP, CULTURE & ORG. STRUCTURE AMBITION & STRATEGY TM FORUM S INDUSTRY-AGREED DIGITAL MATURITY MODEL HELPS GUIDE THE WAY CUSTOMER & PARTNER CENTRICITY OPERATIONS TECHNOLOGY Digital efficiency 2018 TM Forum 8

9 Success in 5G means transforming core operations & IT ENHANCED MOBILE BROADBAND Smart Home/ Building Mobile Technology Industry Growth Consumer Devices Smart City Autonomous vehicle MASSIVE MACHINE TYPE COMMUNICATIONS ULTRA-RELIABLE AND LOW LATENCY COMMUNICATIONS Operations & IT Zero-touch, AI-driven, software-defined operations (business & technology) Designed to deliver agility, efficiency & interoperability to stay competitive 2018 TM Forum 9

10 It s Time to Transform our Industry TM FORUM S KEY DELIVERABLES AND FOCUS FOR THE YEAR AHEAD 2018 TM Forum 10

11 It s time to rethink the role and operating model for IT 1990s Mindset Cost-centric: Reduce the 5% 2018 Mindset Impact-centric: Transform the 95% IT Rest of Business IT Rest of Business Internal supplier of support systems Monolithic systems design Waterfall management & governance Deep technology expertise Integral to innovation & improvement Modular, API-enabled design Highly agile front-end; super-stable backend Technology & business expertise 2018 TM Forum 11

12 Reimagining OSS & BSS with the Open Digital Architecture Differentiation 2000s IT Mindset Cost-centric: Reduce the 5% 2018 IT Mindset Impact-centric: Transform the 95% CSP domain Digital SP domain Partner domains Operations (processes & people) AI Enabled Operations BSS OSS Open Digital Architecture & APIs Model and Data-Driven Metadata and Microservice Oriented Normalized set of Open APIs Network (physical) Infrastructure (virtual / hybrid) 2018 TM Forum 12

13 The new operating model of the software-driven telco demands INTELLIGENCE Business decisions driven by realtime data, analytics and artificial intelligence Continuous view of end-to-end customer experience, constantly driving product and service evolution and innovation Radically simplified, flexible and modular business processes Componentization of technology into discreet business capabilities through abstraction, APIs and rationalization of legacy systems Zero-touch, closed-loop automation of business and technology operations, enabled by machine learning and artificial intelligence CONTINUOUS IMPROVEMENT & INNOVATION 2018 TM Forum 13

14 We re helping our members address the critical business challenges Navigate Transformation Deliver Business Agility Manage Digital Ecosystems Accelerate and execute urgent business transformation to seize the digital opportunity Dramatically simplify and automate to deliver zerotouch operations fit for the 5G world How to rapidly onboard, manage and grow partnerships that underpin business model transformation to enhance their customer experience, profitability and opportunities to grow TM Forum 14

15 Game-changing industry collaboration focus areas for 2018 CRITICAL CHALLENGES 2018 TM FORUM FOCUS AREAS Navigate Transformation DIGITAL MATURITY DIGITAL LEADERSHIP Model & Benchmark Tracker Network Awards Community Deliver Business Agility Digital Ecosystem Management SIMPLIFICATION, AUTOMATION & INTELLIGENCE Reimagined OSS/BSS for zero-touch operations Open Digital Architecture & APIs Data Analytics & Customer Satisfaction Agile Governance & Security GAME-CHANGING TECHNOLOGIES AI IoE & Smart City Blockchain DIGITAL ECOSYSTEM CREATION Biz Assurance Ecosystem Catalysts 2018 TM Forum 15

16 Let s Collaborate! NIK WILLETTS, NWILLETTS@TMFORUM.ORG