TRASH THE RULEBOOK WINNING IN THE DISRUPTION ERA FOR COMMUNICATIONS SERVICE PROVIDERS

Transcription

1 TRASH THE RULEBOOK WINNING IN THE DISRUPTION ERA FOR COMMUNICATIONS SERVICE PROVIDERS BORIS MAURER TM Forum Digital Transformation World - May 2018 #NewAppliedNow

2 Enterprise Value $B INVESTOR OPTIMISM HAS WANED WHILE DISRUPTORS HAVE SEIZED THE FUTURE CSP Future Value Erosion Disruptor Future Value Accretion América Móvil Emirates Telecom Verizon SoftBank KPN SK Telecom AT&T Telefónica Telecom Italia PTT BCE Windstream Orange Singapore Telecom TELUS Hellenic Comcast China Telecom Bharti Airtel China Mobile CenturyLink Telephone and Data Systems Telia Swisscom NTT Vodafone MTN Iliad SA Liberty Deutsche Telekom VEON KDDI Telstra BT Telenor KT Corp (46.6%) (51.6%) (61.8%) (67.0 %) (0.3%) (0.7%) (2.2%) (2.8%) (2.9%) (5.0 %) (5.8%) (7.6%) (8.3%) (8.4%) (10.2%) (10.9%) (12.3%) (13.0 %) (14.2%) (15.0 %) (15.8%) (18.3%) (20.0 %) (20.6%) (23.4%) (29.1%) 24.1% 23.2% 10.8% 15.0 % 9.7% 8.6% 3.5% 6.3% 3.2% 2.8% 1,400 1,200 1, Disruptive investments in options to ensure high future value Future Value Change = Ø -10.2% [(avg FV) - (avg FV)] / [ avg Invested Capital] Source : Company reports, Accenture Analysis Future value Current value Copyright 2018 Accenture. All rights reserved. 2

3 INCREASING INVESTMENT IN THE PIPE HAS LED TO DECLINING PERFORMANCE Rising investment levels have yielded lower returns 17% And marginal returns have declined EBITA Margin 20% 16% 19% 18% 15% 17% 14% 16% 15% 13% Q (TTM) 14% Q (TTM) Capex / Revenue Pre-Tax ROIC Source : Company reports, Accenture Analysis Copyright 2018 Accenture. All rights reserved. 3

4 % OF WORKFORCE W/ANALYTICS SKILL TELECOM COMPANIES ARE LAGGING IN READINESS FOR DATA-DRIVEN TECH CULTURE 25% 20% 14% OF TELCO WORKFORCE WITH ENGINEERING AND/OR ANALYTICS SKILLS COMPARED TO 53% FOR DISRUPTORS Facebook Google 15% Netflix Deutsche Telekom 10% Amazon Telefónica Time Warner BCE Sprint Verizon T-Mobile 5% Telecom Italia CenturyLink Orange B AT&T 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% % OF WORKFORCE IN ENGINEERING Source: LinkedIn, Accenture Analysis Copyright 2018 Accenture. All rights reserved. 4

5 CSPS RISK MISSING FUTURE GROWTH OPPORTUNITIES FROM RAPID ADOPTION OF NEW DIGITAL SERVICES IN BOTH B2C AND B2B While the overall industry is growing, CSPs are predominantly caught in the stagnating traditional core. B2C B2B THE NEW: DIGITAL/CLOUD % % * * THE TRADITIONAL CORE % % % 510 REVENUES ( BN) * In 2020 addressable market potential; Gartner: Market Opportunity Map for Communications Service Providers, Worldwide (February2016); , Nov 2016, incl Q updates; Accenture Analysis IT 2020* * COMMS Copyright 2018 Accenture. All rights reserved. 5

6 PICK YOUR PLAY Network Innovator, Ecosystem Player? We believe there are four scenarios emerging for CSPs to scale new growth models. #NewAppliedNow Copyright 2018 Accenture. All rights reserved.

7 SCALE THE NEW CONTINUUM OF OPTIONS TELCO EVOLUTION INTO ECO-SYSTEM ORCHESTRATORS CUSTOMER BASED ECO SYSTEM PLAY SCENARIO MULTI-SIDED PLATFORM MODEL DESCRIPTION LONG TERM PLAY Establish cloud-platform business enriched by OTT/industry partners DIGITAL MOBILE ONLY ATTACKER Monetizing core with digital services and customer interactions VERTICALLY INTEGRATED SERVICE PROVIDER Monetizing core with differentiated services / content bundles LONG TERM PLAY INFRASTRUCTURE-BASED NETWORK PLAY CONNECTED INDUSTRY ORCHESTRATOR Managing intelligent, open, self-service digital networks Copyright 2018 Accenture. All rights reserved. 7

8 CSPS CAN MONETIZE THE ECO-SYSTEM BY EITHER PROVIDING SERVICES DIRECTLY TO CUSTOMERS OR ENABLING PARTNERS CORE ECOSYSTEM SERVICES Security & Authentication, e.g. make edge devices trust anchors Supply & Demand Matching, e.g. B2B market places Create Interoperability, e.g. data exchange across verticals along the value chain ENTERPRISE HOME Services direct to B2X customers VALUE-ADDED SERVICES & ECOSYSTEM SUPPORT Service Integration Mgmt, e.g. for E2E traceability across various data sources Predictive analytics, e.g. predictive maintenance & demand simulation Collaboration Tools and transaction engines, e.g. open source & crowd dev Immersive reality and simulation, e.g. ubiquitous AR/VR enhanced support Remote Management, e.g. service components of engines without touching VALUE CREATION VIA ECO-SYSTEM SERVICES VALUE CREATION VIA ECO-SYSTEM ENABLEMENT MOBILITY QUALITY OF SERVICE SECURITY IDENTITY MANAGEMENT PROXIMITY Enabling B2B2X partners Application Software Provisioning: Development of problem-driven software applications (e.g. matching) Network Provisioning: Eco-system value creation through the enablement of data exchange by provision of network bandwidth (e.g. DTAG, Telefonica & BT) Professional Service Provisioning: Deployment and integration services, consulting services, and support & maintenance services (e.g. Telco PS & Accenture) Platform Provisioning & Operations: Eco-system value creation through the provision, maintenance and support of a cloud-based platform (e.g. Microsoft, IBM & Accenture) Copyright 2018 Accenture. All rights reserved. 8

9 THE OPERATING MODEL MUST SUPPORT ONBOARDING AND CULTIVATING DIGITAL SERVICE PROVIDERS DECOUPLE FROM ECO-SYSTEM ORCHESTRATOR COUPLE TO ECO-SYSTEM EMERGING NEW PRODUCTS & SERVICES SERVICES Health Connected Home In-home network Messaging Internet Data Telephony Cloud & Online Payment (NFC) TELCO Security TV Engagement TV Mobile Digital Assistant Wholesale TV Industrial IoT Billing as a Service CONTROL POINTS Mobile Phone Router Direct access to the Home Retail Stores TV/STB SIM-card Managed Workplace Content Subscriptio ns IoT network Copyright 2018 Accenture. All rights reserved. 9

10 POLICY-DRIVEN NETWORKING & MEC ALLOW CSP S TO CONQUER CRITICAL CONTROL POINTS CORPORATE OFFICES Managed LAN REGIONAL NETWORKS / COLO / ETHERNET BACKBONE CLOUD MPLS / IP VPN/SD - WAN Broadband / Internet LTE Regional Network Managed Wi-Fi Mobile Network PUBLIC CLOUD IOT EDGE COMPUTING MOBILE NETWORKS PRIVATE CLOUD Key Policy Alignment Points CSP specific Key Policy Alignment Points Enterprise on prem workloads Key Policy Alignment Points Enterprise off prem workloads Copyright 2018 Accenture. All rights reserved. 10

11 TECHNOLOGY REVOLUTION WITH 5G DRIVEN BY DATA IN A DISTRIBUTED CLOUD TOPOLOGY % OF ENTERPRISE-GENERATED DATA processed outside traditional data center or cloud TELCOS INCREMENTAL REVENUE POTENTIAL from 5G BUSINESSES 69% X7.5 75% CONSUMERS 23% 10% New capabilities required in distributed computing architectures, remote management and edge security GOVERNMENT 14% 0% 20% 40% 60% 80% 100% Most Important Somewhat Important Neutral Not Very Important Least Important Source: GSMA, Global Mobile Trends 2017, September 2017 Copyright 2018 Accenture. All rights reserved. 11

12 VALUE CREATION IS EVOLVING FROM COMPETITION WITH OTT TO A COMPLEMENTARY MODEL PAST PRESENT FUTURE Services Hard-Bundle of Services and Connectivity Fixed Fee (Connectivity) Pay-per-Use (Services) Connectivity Fixed Fee Transaction Based Connectivity Marketplace Services and Connectivity strictly bundled through a closed Network Technology Limited competition, strongly dominated by Network Incumbents High barriers for new entrants OTT players compete with Telcos to sell content/digital services over the IP Layer. Limited/zero cooperation with operators Operators strategies not well defined, struggling to define how compete on services, while monetizing the physical network asset Operators newly a key actor of the digital marketplace providing: Premium infrastructure (Network Slicing, MEC) Common platform/enablers for Industry X.0 Enhance cooperation with partners through the Telco open-platform: Content/Media (OTT players) Home service providers (home automation, home security etc.) Public administrations (e-health, Smart cities etc.) Industry X.0 vertical partners Copyright 2018 Accenture. All rights reserved. 12

13 CREATING MARKET VALUE IS SHIFTING TO A TRANSACTION BASED REVENUE MODEL FROM stand alone, one-product service provider TO one to many, diversified communication services enriched with eco-system originated offers Service Service Fee Service Service Fee Marketplace Partner Ecosystem Service Access Key Value Elements Recurring charges (per service and contract commitment) Number of transactions Value per transaction Copyright 2018 Accenture. All rights reserved. 13

14 #NewAppliedNow STEP FORWARD It s time to lead or lose. boris.maurer@accenture.com Copyright 2018 Accenture. All rights reserved.