How Will Operators Evolve Messaging asThey Migrate to the NGN?
Ronald Gruia
Principal Analyst, Emerging Telecoms
January 20th 2011January 20th 2011
Today’s Presenter
Ronald Gruia, Principal Analyst
Frost & Sullivan
Functional Expertise14 years of telecom industry expertise accumulated at Frost & Sullivan (10 years) and Nortel Networks (4
years). Particular expertise in:
2
years). Particular expertise in: - NGN Transition: LTE (4G), IP Multimedia (IMS) and VoIP applications, services and standards- Telco 2.0: business models, next-gen VAS (Value Added Services), service brokering - The Enterprise of the Future: IP Telephony, WLANs, Unified Communications, Speech, IVR apps
Industry Expertise- Strong experience base covering telecom and power systems industry: - U.S. Patent holder: principal inventor of an algorithm optimizing a multimedia application- 100+ speaking engagements at telecom conferences and industry shows- Featured columnist at IMS / NGN Magazine; wrote articles for Processor Magazine and TMC.net- Quoted on Business Week, Financial Times, Forbes, Wired, API, Reuters, MarketWatch, etc.- Appearances on CNBC (US), BNN, Report on Business Television and TechTV (Canada), Decision
TV (Brazil) and Telecom TV (UK, live from Spain)
How Messaging Will Evolve as Carriers Transition to the NGN
Agenda
• A 360-Degree View of the Global Next-Gen Messaging Market
• Voicemail: Still the Primary Call Completion Service…
• Messaging Drivers - VM Global Regional At-A-Glance Outlook
• RCS: Panacea to Messaging Industry Woes?
3
• RCS: Panacea to Messaging Industry Woes?
• Platform Consolidation Drives OPEX Savings
• Faster Time-to-Market Needed for Introduction of New VAS
• Enabling the Monetization of New Assets
• A Look into the Future
• Conclusions
A 360-Degree View of the Global Next-Gen Messaging Market
Frost & Sullivan conducted 35 in-depth interviews with operators
around the world for its Next-Gen Messaging Study
Operator Regional Breakdown
23%
31%
North America
4
17%
29%
North America
Latin America
Europe/MEA
Asia/Pacific
Emerging versus mature market operator discussions split:
• 16 mature (46%)
• 19 emerging (54%) Source: Frost & Sullivan
Research Methodology
Primary research (other sources): conducted additional interviews:
• GSMA - to further evaluate the potential of the RCS initiative
• NGN Forum - to gain additional insight on the LTE / IMS rollout schedules of some operators and the uptake of IMS alongside the 4G introduction
• Sr. Wall Street Research Analysts - to obtain another independent
5
• Sr. Wall Street Research Analysts - to obtain another independent opinion of the advent of new messaging paradigms in a new all-IP 4G world
• Google executive - to get an “over-the-top” perspective on the future of VAS
• Triangulating the above information w/ in-house data and our own VAS/messaging industry know-how
Voicemail: Still the Primary Call Completion Service…
• Global penetration estimated at ~ 50% on average (across all regions)
• Service represents ~ 3 to 10% of total wireless operators’ revenues
• The average subscriber gets about 2-4 messages / week
• “Premium” (high volume) users typically get 1-3 messages / day
However:
• Some subscribers do not use the service
6
• Some callers do not leave messages
• Not every message is retrieved
Clearly something needs to be done to improve call completion rates
• iPhone creating demand for visual VM
• Visual interfaces becoming a de-facto standard (e.g. RCS)
• Visual experiences is becoming a key market differentiator
• Move to a single “converged” mailbox (multi-access, single storage)
Europe & MEA
North America
RegionNet Subscriber
AdditionsIncrease in Service
PenetrationPlatform Churn /
Maturity
� �
Overall
Growth Potential
Messaging Drivers - VM Global Regional At-A-Glance Outlook
� � ��
� �
7
Europe & MEA
Asia/Pacific
Attractive Un-attractive��
��
* Potential shown over forecast period (2009-2013)
Latin America �
� � ��
�
� �
�
�
Source: Frost & Sullivan
RCS: Panacea to Messaging Industry Woes?
• Jury is still out (based on the feedback from our operators)
• Some SPs still skeptical despite membership in the RCS consortium
• Others pointed out to issues such as:
• Handsets - need more than a SIP stack for IMS support, proprietary implementations and what will the required subsidy levels be like?
• Interoperability - big issue: also, if OEM models are the same for all SPs, then where will the differentiation be?
8
then where will the differentiation be?
• Battery life issue - all presence updates may translate into heavy usage of the cell phone battery and shorten the useful life for each charge-up
• Control issue - RCS is too focused on features intrinsic to the handset & the mobile network while mesh-ups are happening on the web
• Too late? - Social networking support only coming in R4
• These issues along with business cases need to be resolved but in
the interim, SPs and vendors should focus on specific use cases
Platform Consolidation Drives OPEX Savings
• Common converged platform that can support multiple services in a single consolidated, flatter, all-IP architecture
• Support of various types of mobile messaging: SMS to/from mobile IM, social networking, MMS from UGC sites, VM/SMS to/from e-mail, VM2MMS, etc.
• Benefits:
• System capacity increase (e.g. 10:1 migrating to IPVM from legacy VM)
• Solution footprint (e.g. usually a 50-70% decrease in terms of floor space)
• Power consumption (e.g. typically a 40% reduction in total power consumption)
9
SOA-Based Consolidated Framework
Subscriber Data
Enablers (NAB, Presence, Location, etc.)
Shared Components
Common OA&M
SMS MMS IPVMMsg.
RouterService Broker
Converged Messaging Supporting Various Clients
Faster Time-to-Market Needed for Introduction of New VAS
Identify NewApplications
PrototypeRapidly
ConductTrials
Market LaunchModify andAugment
Scale
TTM (Time-To-Market) Needs toBe Drastically Reduced
10
• “Service velocity” is becoming more and more important for service providers as they also worry about these “at the edge” players such as Google and Apple
• Operators are beginning to achieve some TTM gains via the introduction of an IMS-like converged networks architecture that can enable them to introduce new services quicker and to fail existing ones faster and more cheaply
• Typical TTM for a new service reduced from 15 months to <6 months
Enabling the Monetization of New Assets
Operator assets:
� Brand, subscriber identity (Name, address, age, devices, etc.)
� Subscriber data (usage, patterns, history, etc.)
� Location (motion, context, …)
� Rich presence
� Customer relationships
Connectivity (for cloud computing ecosystem)
11
� Connectivity (for cloud computing ecosystem)
� Interoperability with legacy services
� Fine-grained billing systems (sometimes already leveraged for MVNOs)
How to better monetize these assets:
� Focus on two-sided business models and “upstream” customers
� Open up interfaces to enable third party development of apps that can leverage the above assets
� Explore new apps: targeted mobile advertising and sponsored services
A Look into the Future: Messaging Evolution
• Start simple: threading all message types from a particular user (e.g. e-mails, voice mails, SMS/MMS messages, etc.)
• Implement a rules-based engine that adapts to a user’s preferences
• Over time can blend in more enablers to the NAB (Network Address Book, adding contextual presence info, location, etc.)
• Utilize the NAB as a launch pad for different messaging applications
• Offer “smart converged messaging”, in which VM is an integral part of an “all-
12
• Offer “smart converged messaging”, in which VM is an integral part of an “all-encompassing” solution:
User elects:
What to send &
Who to send it to
Operator Cloud
Operator determines the status & equipment of receiver
Voice Mail
SMS
MMS
IM (client or via SN site)
Operator chooses best delivery mechanism for message to be sent
A next-gen solution eases the integration of VM into this all-encompassing offering
Conclusions
• Messaging will follow the core network infrastructure trend and shift to IP
• To ensure success, new VAS will need the same SMS success ingredients
• Market will likely see more consolidation happen in 2011/2012
• Pricing erosion will make vendors consider tapping into new sources of revenue including new sponsored services and targeted mobile advertising. Messaging clients in the future could have some ad sponsorship and could be invoked from a NAB or even perhaps an augmented reality application
13
augmented reality application
• The future should bring a converged messaging client with a common look-and-feel across different touch points, and shared enablers (network address book, contextual presence, location and an inter-working spec with other operators, be it RCS or something else)
• Vendors will assist operators as they evolve gradually to the NGN by providing “transitional elements” (messaging gateways, service brokers, etc.) to help ease the migration. Vendors will also have to provide a clear and practical roadmap for the winding down of legacy platforms
Q & A Session
Thank You
14
Ronald F. Gruia
Program Leader - Emerging Telecoms, Principal Telecom Analyst
�[email protected] � +1-416-490-0493
Twitter: http://twitter.com/rgruia
Thank You
Next Steps
� Request a strategic approach document for a Growth Partnership Service or Growth Consulting Services to support you and your team to accelerate the growth of your company. ([email protected])1-877-GoFrost (1-877-463-7678)
� Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan Global Congress on Corporate Growth, September 11-14 2011, Fairmont San Jose, San Jose, CA
)
15
Fairmont San Jose, San Jose, CA(www.gil-global.com)
� Register for Frost & Sullivan’s Growth Opportunity Newsletter and keepabreast of innovative growth opportunities(www.frost.com/news)
Your Feedback is Important to Us
Growth Forecasts?
Competitive Structure?
What would you like to see from Frost & Sullivan?
16
Emerging Trends?
Strategic Recommendations?
Other?
Please inform us by taking our survey.
Frost & Sullivan’s Growth Consulting can assist with your growth strategies
Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter
http://www.facebook.com/FrostandSullivan
http://www.linkedin.com/companies/4506
17
http://twitter.com/frost_sullivan
http://www.linkedin.com/companies/4506
http://www.slideshare.net/FrostandSullivan
For Additional Information
Ronald Gruia
Program Leader & Principal Analyst,
Emerging Telecoms
(416) 490-0493
Brian Cotton, PhD
Vice President
Information & Communication Technologies
(416) 490-0983
18
Jake Wengroff
Global Director, Social Media Strategy and Research(210) 247-3806
Angie Montoya
Global Analyst Briefing Coordinator
Marketing
(210) 247-2435
Top Related