2. 2009-2012 Where was the most value created?
Market value creation by sector 1/1/09à1/1/12(1)
Other Internet
(10 companies: +$112Bn)
eCommerce
(11 companies: +$125Bn)
(+319Bn)
Semiconductors
(56 companies: +$164Bn)
(+$70Bn)
Other Mobile
Social/Local (Intel, Qualcom, ARM: +$95Bn)
(Facebook, Baidu, Groupon, LinkedIn,
Mail.ru, Pandora, Tencent: +$164Bn)
Tech Bellwethers
(Google, IBM, Microsoft, Oracle, HP,
Cisco: +$284Bn)
Software
Mobile (77 companies: +$184Bn)
Total value creation $1,517 Bn
Source: Capital IQ, Morgan Stanley
Notes: (1) Comm Equipment and device manufacturers (Nokia, RIM, Alcatel-Lucent, HTC, Juniper, ZTE) are not included in the chart as
these sectors had a negative value creation of ($43Bn), wihich corresponds to a (2,9%) of total value creation
2
3. What does the ecosystem look like?
Apps/OTTs Telcos Handsets
Global, no ties to Local silos, tied to Global, no ties to
Infrastructure or OS Infrastructure infrastructure
3
5. Is‘MadeShare from 5% Five Years Agoat all?
it about voice Systems =
64%
in USA’ Smartphone Operating
Smartphone Operating System Market Share, 2005 vs. 2011E
100%
Market Share of Smartphone OS
80%
Other OS
60% iOS
Android
Windows Mobile
40% BlackBerry OS
Linux
Nokia Symbian
20%
0%
2005 2011E
Source: Morgan Stanley Research, Gartner.
Copyright 2011. All rights reserved. Source: Mary Meeker
45
5
6. Should we invest in RCS/IMS… platforms?
Where is the business rational? Better partner with OTTs selectively
• Zero billion incremental revenue
opportunity
• Harvesting is OK, but why invest?
• Only winners are vendors
6
7. So what are the opportunities for us, telcos? What
kind of platform/OTT are we?
Source: Mary Meeker
• Experience as a Service/Experience
delivery network
• We are an infrastructure platform
• No one can get closer to the end user
7
8. Are we properly organized to overcome?
Chairman & CEO
César Alierta
COO
Julio Linares
Telefonica Digital Latam Europe Global Resources
Mathew Key Santiago Fernández Valbuena José M. Álvarez-Pallete Guillermo Ansaldo
• Centralize decisions on services, technology, VC
• Deploy centralized platforms and maximize synergies
• Let local units take care of market approach and local positioning
8
9. What about us, wholesalers? Any opportunity?
E2E
QoS
Behave as
Higher wholesale
availability customer
and security
Control
and
New Visibility
Services
New OTT model
Business enables
Models direct access
Evolve from to end
middlemen customers
to enabler
9
10. …and allows us to get rid of middlemen and
enforce Cascade payment models
Money and Traffic flow
Marketing Content Ingestion Delivery
Advertisers Enablers
Agencies Providers Carriers Carriers
Broadband
Users
Example: Content ecosystem
Source: Chetan Sharma
Telefonica International Wholesale Services
11. What is the value we add?
Closer to the
Customer
Efficient
Network aware &
Content aware
QoS
Security
No Incremental
Cost for a Better
Value
E2E Responsibility
11
12. Summary
• OTTs is accelarating changes in users behaviour
• This change in behaviour means a shift from voice revenues to data
revenues
• Real threat to core revenues come from local competition in broadband
services, fixed an mobile (and regulator activities…)
• OTT in voice and messaging is a zero billion opportunity, but the OTT
model itself offers lots of opportunities, even for wholesalers
• We must rethink what are our actual core assets, how we leverage them
and what value can be added as a wholesaler
12
