OPERATOR DIGITAL TRANSFORMATION UNLOCKING EUR15 BILLION BY 2021 THROUGH PARTNERSHIPS WITH OSPs - ITU Open Consultation Meeting
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ITU Open Consultation Meeting
ITU Open Consultation Meeting
OPERATOR DIGITAL TRANSFORMATION
UNLOCKING EUR15 BILLION BY 2021
THROUGH PARTNERSHIPS WITH OSPs
18 SEPTEMBER 2017
DAVID ABECASSIS, PARTNER
© Analysys Mason Limited 2017
ITU Open Consultation Meeting
Digital Transformation to become a ‘Digital Service Provider’:
A strategy adopted by all leading telecoms operators
“Digitisation is no longer a “Telia should be a digital “Digital transformation is “Telenor will evolve into an
possibility - it's a reality. facilitator in society, and impacting every sector of increasingly digital
The transformation of our we should aim to apply our industry, starting with company with a broader
processes, policies and technical skills in new Orange itself […] set of engaging products
systems is the ways” and services reaching an
The Orange Digital
cornerstone of Abraham Foss even larger number of
Leadership Inside (ODLI)
digitisation, as well as CEO, Telia Norge customers, yet deeply
programme was launched
being a facilitator of other rooted in highly efficient
at the end of 2013 to step
priorities” core telecoms
up digital transformation
operations”
across the company”
Sigve Brekke
President and CEO, Telenor
Sources: operator reports and presentations
© Analysys Mason Limited 2017ITU Open Consultation Meeting
Don’t go it alone:
Partnerships with OSPs can accelerate Digital Transformation
Liberty bundles Netflix subscription with its core services, Deutsche Telekom partners with Cisco to implement NFV
providing OSP with a better local market reach while technologies to offer connectivity services to small and
generating additional revenue from taking a share of medium-sized enterprises (SMEs) in three European
Netflix subscription sale countries (Croatia, Hungary and Slovakia)
Vodafone UK provides Android customers with an MTN Business partners with Microsoft to provide a pan-
opportunity to charge the purchases of content in the African cloud platform that offers its business customers a
Google Play Store, such as apps, games, music, video, hybrid cloud solution serviced from MTN’s data centres
and e-books, directly to their monthly bill and powered by Microsoft technology
Selected examples only; sources: operator reports and presentations
© Analysys Mason Limited 2017ITU Open Consultation Meeting
Don’t go it alone:
Partnerships with OSPs can accelerate Digital Transformation
Core business Enhanced technology
Liberty bundles Netflix subscription with its core services, Deutsche Telekom partners with Cisco to implement NFV
development
providing OSP with a better local market reach while & connectivity
technologies to offer operations services to small and
generating additional revenue from taking a share of medium-sized enterprises (SMEs) in three European
Netflix subscription sale countries (Croatia, Hungary and Slovakia)
New business New business
Vodafone UK provides Android customers with an MTN Business partners with Microsoft to provide pan-
opportunities
opportunity to charge the purchases of content in the opportunities
African cloud platform that offers its business customers a
Google Play Store, such as apps, games, music, video, hybrid cloud solution serviced from MTN’s data centres
and e-books, directly to their monthly bill and powered by Microsoft technology
© Analysys Mason Limited 2017ITU Open Consultation Meeting
Three key areas for partnerships and cooperation:
Many examples already exist, much more can be done
Core High-end
Bundled content
Digital ads and ȼ Low-cost
business broadband sales channels smartphones
Enhanced Omnichannel
Infra paid for by Network Productivity
Tech and OSPs
customer
transformation improvements
interactions
Ops
Entirely new
New New consumer New enterprise
sectors (e.g.
business products products
banking)
Source: Analysys Mason, interviews with operators
© Analysys Mason Limited 2017ITU Open Consultation Meeting
Direct and indirect interactions:
Quantifying the impact of two possible mid-term scenarios
Our approach to quantify the cash flow impact We looked at two scenarios, with direct
of interactions at market level interactions as the main difference
Model of direct interactions (partnerships) and Stable financial outlook, with continued
indirect interactions with online service providers Base case
experimentation with partnerships and
forecast interactions on a limited scale
Only interactions with a market-level impact (not
only a competitive advantage)
Operators leverage interactions with
Impact on operators based on a cashflow-based Deepening OSPs across the board, indirect
model (EBITDA – CAPEX) interactions interactions play out fully, direct
interactions in a more limited way
Three explicit operator archetypes, for WE and EE
Much greater focus on direct
Intensive
interactions and partnerships, with a
Extrapolation for MEA cooperation knock-on effect on indirect interactions
Source: Analysys Mason, interviews with operators
© Analysys Mason Limited 2017ITU Open Consultation Meeting
A large opportunity in EMEA:
Up to EUR15 billion in addition cash flow from 2021
Annual incremental cash flow by source in 2021 Potential cash flow benefits by
(EMEA, EUR billion) scenario (EMEA, EUR billion)
Intensive + €15
2.0 50 billion
cooperation:
4.9 40 8
0.9 €15 billion 7
2.3 30
20
3.8 31 31
Deepening
10
interactions:
7.8 0
€7 billion 2016 2021
Core business development Base case
Enhanced technology and operations Deepening interactions
New business development Intensive interactions
Source: Analysys Mason, analysis and modelling
© Analysys Mason Limited 2017ITU Open Consultation Meeting A large opportunity in EMEA: Up to EUR15 billion in addition cash flow from 2021 © Analysys Mason Limited 2017
ITU Open Consultation Meeting
Beyond historical disruption:
The Internet is opening broad opportunities for telecoms operators
Disruption … has already worked its way through the system. What next?
… of Digital Transformation strategies is essential to mitigate the impact of
Successful execution
maturity, commoditisation, competition
… are substantial – up to €15 billion by 2021 (~50% of current cashflows),
Financial benefits
further opportunities from competitive advantages by fast movers
New business … are wide open – the Internet is bringing down barriers to entry not only
opportunities in the telecoms sector, but for telecoms operators in other sectors
© Analysys Mason Limited 2017ITU Open Consultation Meeting
The report is available now on our website
David Abecassis
Partner
david.abecassis@analysysmason.com
Click the report or visit:
http://www.analysysmason.com/digital-
transformation-through-partnerships
@AnalysysMason linkedin.com/company/analysys-mason youtube.com/AnalysysMason analysysmason.com/RSS
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