Technology, Media and Telecommunications Predictions 2016
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Technology, Media and Telecommunications Predictions 2016
Welcome and Introduction
Mark Casey
Global Managing Director - Media & Entertainment Practice
Arun Babu
National Leader – Telecoms Practice
Sponsors
THANK YOU
TMT Predictions 2016
Agenda
Time Agenda Item
09h00 - 09h05 Opening and Welcome: Mark Casey
09h05 - 09h50 Presentation of TMT Predictions 2016: Mark Casey, Arun Babu
09h50 - 10h10 Keynote Address: Lorenzo Gonzales - Strategist EMEA Enterprise Group, Hewlett Packard
Enterprise (HPE)
10h10 - 10h50: Panel Discussion:
Facilitator:
Mark Casey
Panel Members:
• Lorenzo Gonzales - Strategist EMEA Enterprise Group, Hewlett Packard Enterprise (HPE)
• Craig Holmes - Vice President, Cognitive Solutions – MEA, IBM
• Dr. Brian Armstrong - Chief Commercial Officer, Telkom Group
• Tim Bishop - Director, Deloitte Digital
10h50-11h00 Competition time and closing remarks
15 years of TMT Predictions! © 2016. For information, contact Deloitte Touche Tohmatsu Limited.
Technology, 2016
Women in IT jobs: it is
about education, but it is
also about more than just
education
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 9
Women in IT jobs: it is about education, but it is also about more
than just education
By end-2016 fewer than 25% of IT jobs in developed countries will be held by women.
South Africa ICT sector has
23% women
The gender gap in IT costs
the UK alone about
$4 billion annually
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 10Women in Computer Science globally have declined dramatically
over the years
US - Computer Science Sweden - Computer Science
1985 37% 2000 30%
2013 18% 2010 24%
UK - Computer Science
2012-2013 17.4%
2013-2014 17.1%
UK
Learnt Coding at School
2012 17% of girls
33% of boys
Against global trends South Africa has nearly 40% of post-school Science, Engineering and
Technology (SET) courses, which provides a significant economic opportunity if we can convert this
larger talent pipeline in to increased gender diversity in the ICT sector
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 11Women in IT jobs: it is about education, but it is also about more
than just education
Hope of things to come
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 12Trailing Millennials are the
pro-PC, not the post-PC
generationTrailing Millennials are the pro-PC, not the post-PC
generation
18-24 year-olds are mobile-centric and fervent PC users and buyers
18-24 year-olds consider smartphones and PCs as
complements, not substitutes
Laptops are the second-most desired device
Large tablets are the devices that are actually being ignored.
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 14It’s not either/or, it’s BOTH © 2016. For information, contact Deloitte Touche Tohmatsu Limited. 15
Millennial ownership of PCs remains high… © 2016. For information, contact Deloitte Touche Tohmatsu Limited. 16
… as does Purchase intent © 2016. For information, contact Deloitte Touche Tohmatsu Limited. 17
Trailing Millennials are the pro-PC, not the post-PC
generation
What are millennials doing on PCs?
PCs still preferred for:
By 2020 or 2025:
Minutes of use of PCs will have likely declined, but PCs will still likely be widely-owned
and valued, required by schools or employers, and used for hours per week.
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 18© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 19
Touch commerce: The
mobile online checkout gets
an express lineMobile commerce gets accelerated Touch commerce enables low friction mobile payments © 2016. For information, contact Deloitte Touche Tohmatsu Limited. 21
Mobile commerce gets accelerated Touch commerce enables low friction mobile payments © 2016. For information, contact Deloitte Touche Tohmatsu Limited. 22
Many use their phones at every opportunity © 2016. For information, contact Deloitte Touche Tohmatsu Limited.
Browsing shopping websites is a lot more popular than
shopping online
Q. How frequently do you use your phone to do any of these: "Browse shopping websites/apps", "Shop for products
online")?
Browse shopping websites/apps (weekly) Make an online purchase of a product (weekly)
60% 57%
50%
40% 38%
40% 37% 36% 34% 33%
32%
29% 27%
30% 26%
21% 20%
20% 18%
13% 13% 15%
11% 11% 9% 10%
9% 7%
10% 5% 6% 6%
4% 2%
0%
Source: Deloitte Global Mobile Consumer Survey, developed countries, May-Jul 2015
Weighted base: Respondents who own or have access to standard phone/smartphone: Australia (1,837), Canada (1,676), Finland (963), France (1,829), Germany (1,821), Italy (1,873), Japan (1,420), Netherlands
(1,886), Norway (925), Singapore (1,903), Spain (1,891), UK (3,682), U.S. (1,828)
© 2016. For information, contact Deloitte Touche Tohmatsu Limited.Graphene: research now,
reap next decadeGraphene: The Wonder Material Graphene is a two-dimensional structure single atom thick, which is a million times thinner than a human hair and stronger than steel. © 2016. For information, contact Deloitte Touche Tohmatsu Limited. 26
Graphene: research now, reap next decade
The wonder material
Very strong
Flexible
Transparent
Impermeable
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 27Graphene: research now, reap next decade
Graphene materials
market Graphene
Tens of millions of $ R&D
Hundreds of
millions of $
$1.3 billion $353 million Investment in developing
“ The Graphene Flagship” Graphene research center understanding of graphene
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 2829
30
Cognitive technologies
enhance enterprise
softwareCognitive goes mainstream in business software
Artificial intelligence is quietly enhancing enterprise decision making
© 2016. For information, contact Deloitte Touche Tohmatsu Limited.Cognitive technologies enhance enterprise software
Growth in cognitive technologies
Mergers & Venture
Acquisitions capital
Cloud Open source
computing AIMedia, 2016
Virtual reality: a billion
dollar nicheVirtual reality is a (small) commercial reality
Technological advance has enabled the launch of VR, which in 2016 will be almost all
about video games.
© 2016. For information, contact Deloitte Touche Tohmatsu Limited.VR does have a commercial future
Enterprise adoption: a year of experimentation
MILITARY
VR will continue to be used in
the military where simulators
have long been commonplace
EDUCATION
ARCHITECTS Teaching via virtual classroom
Creating interactive Digitized tours for prospective
visualizations of students
construction projects
HEALTHCARE
HOSPITALITY Training and education of staff
Hotels can provide VR and members of the public
guides to properties
VR headsets as a virtual
concierge
EMERGENCY SERVICES
Workers have used VR to practice how to
© 2016. For information, contact Deloitte Touche Tohmatsu Limited.
respond to faults with nuclear reactors 39Mobile games: leading, but
less lucrativeMobile is now the largest games category
$32 billion: PC
$28 billion: console
© 2016. For information, contact Deloitte Touche Tohmatsu Limited.Dramatic variation by platform
Platform Titles Revenue per game
$4.8 million per console
game
17k per PC
$2.9 million game
per mobile
800k $0.04million game
© 2016. For information, contact Deloitte Touche Tohmatsu Limited.Mobile games: Leading, but less lucrative
1Size of the installed base
1.75 billion smartphones and tablets 600 million who play 200 million for game
used to play games games on PCs consoles
2Barriers to entry
PC or Console $10s millions to produce Mobile games: Low barrier to entry
games: $10s millions to market Created in hours
Years to develop 800,000 titles available
17,000 titles available
3The business model
Freemium: free download, additional content charged for.Mobile ad-blockers: saved
by the app?Mobile content will be little affected by ad-blockers © 2016. For information, contact Deloitte Touche Tohmatsu Limited.
Why so few ad-blockers installed?
millions
10000 3400
680
1000
100
10
10
1
All mobile devices Mobile devices with OS content blocking Mobile devices with active ad-blocker
support
Few devices have Ad-blockers do
Consumer Ad-blockers don’t
native ad- not remove work within apps
inertia
blockers installed 100% of adsThe award for traditional media resilience goes to …
Cinema !!
… despite the many competing digital media available
© 2016. For information, contact Deloitte Touche Tohmatsu Limited.Top 5 2015 with a combined domestic gross of US$2,75bn
2016 ….. great, but not as great
It’s the social experience and what it says about you
Revenues Admissions Per capita Movie ticket
admissions price
0.79% 1.17% 1.2% 1% above inflation
(2002-2015) (2002-2015) (annually 2005-2015) (annually 1995-2014)
The film industry is declining in some markets, but the pace is very moderate compared to other industries
that face threats from digital and the Internet.
$6.1 billion a year is the estimate of Concession revenues are about 45%,
the cost of piracy to the US studios with margins of about 85%
Average North American – 4 movies per year (2015)
Average 12-24 year old – 6.3 movies per year (2015)US TV: erosion, not
implosionUS TV: erosion, not implosion
The US traditional television market, worth about $170 billion in 2016, will see
a slow and steady erosion in at least 6 areas.
The number of pay- Average pay-TV
Pay-TV penetration
TV subscribers monthly bill
Consumers
Average daily TV Average daily TV
switching to
viewing viewing
antennas for
(overall population) (18-24 year olds)
watching TV
Television is not growing Traditional TV is not dying,
the way it used to disappearing or irrelevantCord cutting action = intent The number of
pay-TV
subscribers
Pay-TV
penetration
Average pay-
TV monthly bill
Consumers Average daily Average daily
switching to TV viewing TV viewing
antennas for (overall (18-24 year
watching TV population) olds)
Despite 7% of pay TV-consumers saying that
they were thinking of cancelling subscriptions,
intent was rarely matched by action and the
decline has been much more muted.
Number of pay-TV subscribers cancelling
1 500 000
1 000 000
1 000 000
500 000 On a base of
170 000 164 000
8 000 100 million
- homes
2012 2013 2014 2015
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 54Resilient subscription rates The number of
pay-TV
subscribers
Pay-TV
penetration
Average pay-
TV monthly bill
Consumers Average daily Average daily
switching to TV viewing TV viewing
antennas for (overall (18-24 year
watching TV population) olds)
90% of channels that are being paid for
are unwatched.
CORD SHAVING
Growth of the average bill
for pay-TV
Substituting a traditional TV package with
6.1% a lower-cost subscription video on
(annually 1995-2015)
demand (SVOD) service
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 55Average daily TV viewing The number of
pay-TV
subscribers
Pay-TV
penetration
Average pay-
TV monthly bill
Consumers Average daily Average daily
switching to TV viewing TV viewing
antennas for (overall (18-24 year
watching TV population) olds)
In 2020, average daily TV viewing in
the US will likely still be over
240 minutes
Daily TV minutes
360
340 344 The same as
340 330 in 1998
320
320
300
2013 2014 2015 2016
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 56Maybe the Millennials will grow up The number of
pay-TV
subscribers
Pay-TV
penetration
Average pay-
TV monthly bill
Consumers Average daily Average daily
switching to TV viewing TV viewing
antennas for (overall (18-24 year
watching TV population) olds)
11% of 18-24 year-olds have never
had a pay-TV subscription
(cord nevers)
Pay-TV penetration
100% 89%
81% 79%
70%
50%
20%
decline
0%
from 2010
2010 2016 2017 2020
© 2016. For information, contact Deloitte Touche Tohmatsu Limited. 57Millennials now spend more time streaming video
content than watching live TV
Live programming 30% 29% 28%
Streaming 32% 38% 31%
14-18 19-25 26-32
Q. When watching television content, what percent of time are you watching the following methods of programming?
Copyright © 2016 Deloitte Development LLC. All rights reserved.Consumers are watching an average of five episodes in a
single sitting, with the youngest Millennials averaging six
NUMBER OF EPISODES BINGED PER SITTING
6 6
5 5 5
4 4
Total 14–18 19–25 26–32 33–49 50–68 69+
2015
Average # of episodes watched
Q. When you binge watch, what is the average number of episodes you watch in a single sitting?
Copyright © 2016 Deloitte Development LLC. All rights reserved.Fewer than one-quarter of multitasking activities are
directly related to the programs that consumers are
watching
PERCENTAGE OF MULTITASKING DIRECTLY RELATED TO THE PROGRAM
34% 33%
27%
24% 23%
18% 19%
Total 2015 14–18 19–25 26–32 33–49 50–68 69+
Q. What percentage of your multitasking activities are directly related to the program you are watching?
Copyright © 2016 Deloitte Development LLC. All rights reserved.European football scores
$30 billionPremium sport remains a key value generator
European football surpasses $30 billion in 2016/2017; further growth is possible.
© 2016. For information, contact Deloitte Touche Tohmatsu Limited.European football scores $30 billion
Football is the super premium sport in Europe
Combined revenues of the 20 EPL
clubs are predicted to surpass $6.5
billion in 2016/2017, more than
double that of the next-highest
European leagueEuropean football scores $30 billion
Football’s rising revenues, and its universal appeal,
make it highly attractive to investors.
Chinese investors have been building their
football investments within their home country
and abroad (UK, Spain).
A quarter of EPL club owners are from North
America and the EPL has secured a six-year $1
billion broadcast deal with NBC from 2016/2017.eSports: bigger and smaller
than you thinkeSports: bigger and smaller than you think
Watching people playing video games is a commercial activity, but a relatively small one .
© 2016. For information, contact Deloitte Touche Tohmatsu Limited.eSports revenues are a fraction of traditional sports
Telecommunications, 2016
The dawn of the Gigabit
Internet age: every bit
countsThe dawn of the Gigabit Internet age: every bit counts The
number of Gigabit per second (Gbit/s) Internet connections will increase to 10 million
2016 2020
10 million 50-100 million
Gbit/s Internet connections Gbit/s Internet connections
70% 90%
Residential connections Residential connections
5%-10% of all
broadband
connections
Higher speeds More applications More devicesThe dawn of the Gigabit Internet age: every bit counts Faster connection speeds can enable more “bursty” connections In 2016 only a limited number of connectivity technologies are likely to be capable of Gbit/s service: FTTH FTTP FTTB DOCSIS 3.1 The faster and more ubiquitous that fiber technologies become, the greater the incentive for cable networks to update their networks, and vice-versa.
The dawn of the Gigabit Internet age: every bit counts
Used smartphones: the $17
billion market you may
never have heard ofUsed smartphones: the $17 billion market you may never
have heard of
In 2016 consumes will sell outright or trade-in approximately 120 million used smartphones, generating
more that $17 billion.
2016 2015
120 million 80 million used
used smartphones, generating smartphones, generating
$17 billion $11 billion
$140 $135
Average value per device Average value per device
The used smartphone market is forecast to Used smartphones market share (total smartphone sales
grow four-five times faster than the overall by units):
smartphone market 2016: 7% 2015: 5% 2014:4%Used smartphones: the $17 billion market you may never
have heard of
Why would you sell a smartphone?
12% of consumers sold their smartphone (mid-2015)
Traded-in with an operator or
device manufacturer
Sold outright
Direct benefits for smartphone vendors
• Increase of annual sales
• Devices more affordable to customers with smaller budgets
• A likely margin in processing used phonesThe rise of the data
exclusiveThe rise of the data exclusive
In 2016, 26% of smartphone users in developed markets will not make any traditional phone calls in a given
week.
A “data exclusive” – someone that
substitutes voice calls for a combination of
messaging (including SMS), voice and video
services delivered ‘over the top’.
Weekly use of standard voice calling among smartphone owners (2012-2015)
100% 89% 87% 83%
77%
80%
60%
40%
20%
0%
2012 2013 2014 2015The rise of the data exclusive
Two contrasting trends with voice
+ VOICE -
Mobile voice volumes
Smartphone owners’
(in minutes): 20%
usage patterns more
increase between
data intensive
2012 and 2015
Communication services used in the last week by ‘data exclusives’ 2015
80%
60%
60% 52% 51% 48%
40%
20% 19% 18%
10% 5%
0%
SMS IM app Emails Social Network VoIP MMS Video calls OtherThe rise of the data exclusive
Data and the future generations
31% of 18-24 year olds reported not making
phone calls on a weekly basis,….
…compared to the average for adults of 22%
This is likely to rise further still, given that upcoming
members of this group are likely very accustomed
to messagingVoLTE/VoWiFi: capacity, reach and capability
VoLTE/VoWiFi: capacity, reach and capability
VoWiFi vs. VoIP
About 100 mobile operators worldwide will be offering at least one packet-based voice service at the end of
2016, double the amount year-on-year, and six times higher than at the beginning of 2015.
For most carriers launching VoLTE or VoWiFi in
2016, the main motivation is likely to be:
• To increase network capacity
• To extend the reach of their voice servicesVoLTE/VoWiFi: capacity, reach and capability
VoWiFi vs. VoIP
A network operator managed and controlled service
•Users: calls less likely to be dropped
•Carriers: more control over the revenue stream
Offers native calling
•No need to open an app to make or receive calls.
The cost of VoWiFi extending reach may be relatively low
•Operators need to deploy an IP multimedia subsystem (IMS)
It can reduce operator costs
•Calls place on a smartphone would be carried over the consumer’s broadband network freeing up some
cellular capacity
•It enables traffic to be off-loaded to another network
Whether an operator launches first one of the two services or it launches both will be influenced by three
factors
Potential cost Need to improve Customers’ interest in
savings indoor coverage enhanced communication
servicesPhoto sharing: trillions and
risingPhoto sharing: trillions and rising In 2016,2.5 trillion photos will be shared or stored online, a 15% increase on the prior year. About three- quarters of this total will likely be shares, and the remainder online backups. The expected network impact of all this sharing will be about 3.5 exabytes, a 20% increase over the previous year.
Photo sharing: trillions and rising
Factors enabling photo sharing
Increase in quality of smartphone cameras
Average camera resolution (MP) (2007-2015)
10.0 9.0
7.9
8.0 6.8
5.9
6.0 4.6 5.0
3.4 4.1
4.0 2.4
2.0
0.0
2007 2008 2009 2010 2011 2012 2013 2014 2015Panel Discussion
Lorenzo Gonzales: Strategist, Hewlett Dr. Brian Armstrong: Telkom Group
Packard Enterprise EMEA Chief Commercial Officer
Lorenzo is a Strategist within HP’s EMEA Dr. Brian Armstrong is responsible for
Enterprise Group, taking the leadership in the strategic growth agenda for the
strategic initiatives of digital transformation Group, as well as group strategy,
and innovation. Lorenzo works with regulatory and transformation office
customers and partners across EMEA as a portfolios. Brian has over 25 years ICT
leader in all aspects of new and emerging experience, in ICT research and
technologies to meet client objectives. development, telecommunications,
technology management, networking
services, and outsourcing.
Craig Holmes: Vice President – Tim Bishop: Director - Deloitte
Cognitive Solutions IBM for Middle East Digital Africa & CTO
& Africa Tim is a Director and Chief Technology
Craig has undertaken a number of MEA Officer at Deloitte Digital Africa. He
leadership roles to champion the Industry provides world-class strategy, digital
and Solutions business in MEA. Having built transformation and ‘Meaningful Mobile'
a SA Telco Industry team in 2011, Craig went solutions to leading global brands in the
on and built the Africa Telco strategy and a enterprise and consumer space. Tim is
team of Industry specialists and CTA’s before passionate in 'Mobilising the Masses',
accepting the role of GMU Communications enabling brands and enterprise to take
Sector VP. Here he was responsible for advantage of the prolific handset usage
defining the Industry strategies and leading and growth across Africa.
the overall delivery thereof.Sponsors
THANK YOUDeloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 200,000 professionals are committed to becoming the standard of excellence. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication. © 2016. For information, contact Deloitte Touche Tohmatsu Limited.
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