Telenor's - Ericsson

executive summary
»»»
66 EBR #3 2010
solution for managing these
tensions.
Although no two-network consolidation
environments are the
same, it is possible to develop a
plan that avoids the pitfalls and
ensures engagement across all
stakeholder groups.
It is vital for the executive team
to establish and implement a
structured approach that will:
actively manage the tensions
between the two operators and
the network sharing team,
identify the appropriate operating
model and governance
structure early in the process,
ensure that everyone in the
company has bought into the
decisions and agreement, and
establish the roles and engagement
model of key delivery
partners early in the process.
The value-driving role of
devices – and what to expect
By Martin Zander, page 54
▶ The early days of the wireless
device industry were dominated
by vertically integrated
key players that controlled design,
production and marketing
of mobile phones, and also the
mobile communications infrastructure.
Mobile broadband for pcs and
smartphones has since experienced
rapid growth, with the
pc industry influencing the
wireless device industry in several
ways. The importance of
ecosystems has also increased
as products have become increasingly
linked to value contributors
outside the single
company domain.
The value chain has continued
to be transformed, with more
clearly defined roles for handset
vendors and chipset suppliers.
The handset vendors have
integrated vertically upwards in
the value chain, and phones
now come with services, bypassing
and, in some cases,
competing with the operators’
service offerings.
There is a general pattern common
to all the stages outlined
so far, and this is likely to continue
into the future:
Increased interdependency:
Managing ecosystems has now
become part of a company’s
core strategy.
Transformation of the value
chain: It shifts between vertical
and horizontal integration in an
infinite loop. These movements
appear in different parts of the
value chain at the same time.
Wireless convergence: Single
device convergence has now
reached a level where it has
started to diverge into different
shapes and form factors. The
central value will be in the services
you connect to more than
the device.
Looking ahead, the key trends
are that:
Everything and anything gets
connected: Take-up of mobile
broadband in the pc industry
is strong and the next growth
areas will be m2m and consumer
electronics.
Ecosystems – the new world
order: Today a company must
manage and balance the interests
of standardization bodies,
partners and open-source communities
as well as third-party
developers.
The cloud is taking over: Mobile
cloud computing means that
we are moving towards an
infrastructure where both storing
and processing of data take
place outside the mobile device.
Same service – any screen: Content
and service convergence
across multiple screens is the
next opportunity to create
value. Some view this as a key
development and an alternative
to diversification into services.
Continued value shift from
hard to soft: For device manufacturers,
differentiation and
value addition are increasingly
coming from integration with
software, content and services.
Smartphones will continue to
evolve. They will be among an
expanding range of smart devices
that will include tablets,
netbooks, e-readers or entrylevel
smartphones. We will also
see the growth of connected
devices. These will require optimized
thin modems that are
multi-mode capable.
The introduction of new device
categories will increase the de-
mand for more simplified solutions.
For example, a wlan
chipset can be embedded in any
device by any manufacturer and
distributed globally; this kind of
wireless device is completely
disconnected from the network
as well as from whoever is paying
for the data traffic.
Simpler ways of connecting
wireless devices, like wlan,
may erode traditional telecom
revenue models that are based
on network-managed subscriptions,
unless ways to simplify
them are found.
The upcoming demand for
simpler plug-and-play solutions
is a great challenge for
both operators and device
manufacturers but it has already
demonstrated its potential
in creating new business
opportunities for the whole
industry.
Realize the promise of M2M
– make it work out of the box
By Jahangir Mohammed, page 58
▶ Despite the economic downturn,
the m2m market has remained
buoyant. It is a market
full of promise, with the ability
to revitalize the global economy.
Previously, because of high
costs, only large organizations
were able to afford to build and
maintain their own dedicated
data networks. But as business
models have advanced and
chipsets have become cheaper,
we are witnessing widespread
adoption, with an array of commercial
and consumer devices
emerging from manufacturers
all over the world.
Each vertical is different and
has specific needs. However,
from a network standpoint all
devices are similar in their requirements:
they need a module,
connectivity, a management
platform and a sim card
to connect to the network, and
are therefore subject to the
same challenges.
Connected devices are typically
not being built by traditional
handset manufacturers.
More than 60 percent of connected
device launches are
delayed because of application
redesign needs, and up to 80
percent of device applications
create problems.
Mobile operators and eco system
vendors must ensure they offer
the technology and support
necessary to power the development
of these devices. Imagine
a plug-and-play module, ready
to connect out of the box.
What enables connected device
manufacturers to be successful
is the ability to run this aspect
of their business as a service
provider. And this requires very
tight integration and support
from their operator partners.
Operators, for their part, must
have the solutions in place that
enable their customers to become
service providers. Eliminating
this level of business
complexity for device manufacturers
allows for larger scale
and faster time to market.
Even in the most industrial of
cases, an excellent user experience
is still a vital aspect of a
solution’s success. Operators
must have the platform and
systems in place to eliminate
the complexity of embedded
mobile connectivity. This starts
in the development phase by
providing device manufacturers
with the design tools to
build a high-quality product.
It’s true that m2m is a low arpu
business for mobile operators.
The key metric that operators
should consider is margin. The
key to high margins in a low
arpu business is eliminating
costs. Operators should therefore
choose a highly automated
m2m platform so as to reduce
the costs of providing these
services.
For enterprises looking to build
a connected device business,
the economics come down to
the business model. Using a
connected devices platform to
employ advanced upselling and
cross-selling techniques can
yield significant revenue opportunities.
For module and chipset manufacturers,
the economics come
down to scale. Eliminating many
of the cost and complexity barriers
will help fuel the market.