Analyst Viewpoint Overall, STL Partners has identified six opportunity areas

for mobile operators to exploit using a Full-service Telco 2.0 strategy.

Opportunity Type

Core services Approach

Improving revenues and customer loyalty by better design, analytics and smart use of data in existing services.

Vertical industry solutions (SI)

Delivery of ICT projects and support to vertical enterprise sectors.

Infrastructure services

Optimizing cost and revenue structures by buying and selling core Telco ICT asset capacity.

Embedded communica- tions

Enabling wider use of voice, messaging and data by facilitating access to them and embedding them in new products.

Third-party business enablers

Enabling new Telco assets (e.g., customer data) to be leveraged in support of third-party business processes.

Own-brand OTT services

Building value through Telco-owned online properties and ‘Over-the-Top’ services.

Source: STL Partners

Regional approaches to smartness may vary As global operators continue to experience a slowdown in revenue growth, they tend to focus on maintaining margins by reducing costs. It should not be surprising, then, that most operators in North America, Europe and Asia-Pacific appear to be pursuing a Happy Pipe/smart network strategy.

14 | TELLABS INSIGHT Q1 Typical Services

Access, Voice and Messaging, Broadband, Standard Wholesale, Generic Enterprise ICT Services (inc. SaaS).

Systems Integration (SI), Vertical CEBP solutions, Vertical ICT, Vertical M2M solutions and Private Cloud.

Bitstream ADSL, Unbundled Local Loop, MVNOs, Wholesale Wireless, Network Sharing, Cloud - IaaS.

Comes with data, Sender pays delivery, Horizontal M2M Platforms, Voice, Messaging and Data APIs for third parties.

Telco-enabled Identity and Authorization, Advertising and Marketing, Payments. APIs to non-core services and assets.

Online Media, Enterprise Web Services, Own Brand VOIP services.

“The Full-Service Telco 2.0 strategy focuses on smart services, driven by a network that offers a strong customer experience.”

Those carriers aim to maximize capital, reduce operating costs and improve network performance through approaches such as: • Physical network sharing • Peering data traffic rather than charging (and being charged) for transit

• Wi-Fi offload • Distributing content more efficiently through the use of multicast and CDNs

• Efficient network configuration and provisioning • Traffic shaping/management via deep-packet inspection and policy controls

• Advanced device management approaches. Vodafone Asia-Pacific is a good example of an operator

pursuing a Happy Pipe strategy. Yota in Russia and Lightsquared in the United States are similarly content being Happy Pipers. In general, Asia-Pacific has the most disparate set of

markets and operators. Markets vary radically in terms of maturity, structure and regulation, and operators seem to polarize into extreme Happy Pipers (e.g., Vodafone APAC, China Mobile, Bharti) and Full-Service Telco 2.0 players (e.g., NTT Docomo, SK Telecom, SingTel, Globe). In Europe, Telefonica represents the operator with the most

complete Telco 2.0 vision. Telefonica has built and acquired a number of smart services that appear to be gaining traction, including O2 Priority Moments, Jajah, Tuenti and Terra. Recent structural changes at the company, including the creation of Telefonica Digital to focus on opportunities in the digital economy, further indicate the company’s focus on Telco 2.0 and smart services. The sheer scale of the 2 leading mobile operators in

the United States, AT&T and Verizon, means that they are taking a different approach to Telco 2.0. Although they are collaborating in one or two areas, there is a high degree of what one interviewee described as “Big Bell dogma”—the

API: Application Programming Interface CDN: Content Delivery Network

CEBP: Communications- Enabled Business Process DSL: Digital Subscriber Line

IaaS: Infrastructure-as-a-Service

ICT: Information and Communications Technology M2M: Machine-to-Machine MVNO: Mobile Virtual Network Operator

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