VP - Value Killer OTTs in Africa

OTTs Value Killers for Telcos?
Focus on African Operators

Version-N.1.00
25.08.2014
We make ICT strategies work

1
Executive Summary
The current developments in the OTT market increase the pressure on operators. There
is only a short window of opportunity to develop the right response strategy.
Global Data Usage

Growth
Innovation in the field of ICT products and services is significantly changing

human communication behavior and drives data usage on both fixed and
mobile networks, a challenge all Telco operators have to deal with.
The Operator
Profitability Trap
Global data traffic has exceeded voice traffic by far but the generated revenues
can not (yet) cover the required network investments as OTT players claim an
increasing amount of traditional Telco revenues for themselves.
The Rise of OTT

Players
The globally growing number of OTT players with innovative business models
is putting increasing pressure on Telco operators. The market for OTT services
is expected to surpass the traditional Telco services market by the year 2021.
A Regulatory
Imbalance Remains
As a new regulatory balance is not yet in sight, operators need to act quickly
on their own to cater for these challenges and develop adequate OTT
response strategies.
Definition of a
Response Strategy
There is only a short window of opportunity for operators to elaborate a specific

response strategy before their performance is significantly impacted by OTTs.
Operators can choose between a Defend, Attack or a Cooperate Strategy.
Learning from
best practices
By carefully analyzing the strategies chosen by other operators around the

globe, operators can draw upon best practices and benchmarks to support
their decision making.
Detecon
Content
The drivers for fixed and mobile data growth
The operator profitability trap
2. Trends and challenges

3. Possible scenarios for Telco operators
4. Selected case studies
5. Detecons approach
6. Detecons references and publications
7. Authors and contact information
Detecon
1. Overview and introduction
Overview and Introduction: The drivers for fixed and mobile data growth
Innovation in the field of ICT products and services is significantly changing human
communication behavior and drives data usage on both fixed and mobile networks.
The drivers for fixed and mobile data growth
Selected quantified data drivers

Mobile Subscribers (in Million)
+4%
6.657
207
1.919
TV Device Sales (in Million)

+6%
8.506
2.341 +1.029%
256
97
4.383
365
341
+721%
25
-86%
+128%
4.531
159
1.782
-69%
2019
2013
4G / LTE
3G
2019
2013
<3G
M2M Connections (in Million)
Smart TVs
Regular TVs
Active Videocall* Accounts (in Million)

+44%
+16%
494
1.636
199
185
Source:
Source:
Source:
Source:
IC Intelligence Centre (2013) - TV Devices Forecasts

Ovum (2014) - Mobile Subscription and Revenue Forecast
Ovum (2013) - Global Cellular M2M Connections
Strategy Analytics (2013) - VoLTE, OTT Voice & Video Call Forecasts
+%
4
2019
2013
Compound Annual Growth Rate (CAGR)

* e.g. Skype and Facetime
2019
Detecon
2013
Overview and Introduction: The operator profitability trap
OTT players evolve into the service providers of the future at the expense of Telco
operators, pushed them into a severe data transport revenue and profitability trap.
Revenue development in relation to traffic growth
Traffic: in Petabyte
Revenue: Million US $
Minutes: Billion units

Revenue: Million US $
1.654.872
25.000
432.019
376.360
400.000
25,000
20,000
300.000
15.000
266.669
450.000
350.000
813.409
450.509
Unit: Million US $
30,000
403.231
20.000
328.551
157.850
The Telco operator profitability trap
10.000
15.574
17.744
20.217
5.000
250.000
200.000
15,000
150.000
10,000
100.000
5,000
50.000
0
2013
2016
Mobile Network Traffic

Fixed Network Traffic
2019
MNO Data revenues
0
2010
0
2013
2016
2019
Shrinking
margins
2012
2014
EBIT
negative
2016
2018
2020
EBITDA
negative
2022
2024
2026
Mobile Voice Minutes (global)
Revenues
Mobile Voice Revenues (global)
OPEX
CAPEX + Depreciation
The Internet is evolving into an imbalanced media distribution platform (increasing downloads and stagnating uploads)
Data traffic is growing exponentially and significant network investments are needed to meet the future demand
The needed investments can not (yet) be recovered by data revenues and traditional voice revenues continue to shrink
In addition, OTT players re-shuffle the market balance by focusing on the content offering, rather than on the traffic
Operator profit margins significantly decrease over time and require innovative solutions to address these challenges
Source: Analysis Mason (2014) - Fixed network data traffic worldwide

Source: Strategy Analytics (2014) - Wireless Operator Performance Benchmarking Q1 2014
Detecon
The key challenges for Telco operators
Content
The rise of OTT players
The rationale for OTT growth
Categories of OTT services
OTT player monetization strategies
The impact of revenue squeezers
The potential of revenue generators
The current regulatory imbalance
The need to develop adequate response strategies
Operators at the crossroads

Detecon
Trends and challenges: The rise of OTT players
The number of OTT players that offer fully location-independent innovative services is
constantly growing, attracting millions of subscribers with on a global scale.
Source: Detecon Research 2014
Detecon
OTT Landscape - Overview of the most dominant OTT players
Trends and challenges: The rationale for OTT growth
OTT players are expected to surpass established Telcos in the long run by claiming the
majority of revenues from services that are built on top of the operators infrastructure.
Unit: Billion US $
The rationale for OTT growth
The forecasted absolute growth rates

highlight the changing relationship
between traditional vs. future services
OTT service revenues explode as:
+1.720%
+53%
476
458
497
519
540
560
580
600
624
649
675
753
702
526
Services with a large customer

base move from free to fremium
or subscription based models
OTTs expand and focus their

services on mobile platforms, as
the mobile penetration rates rise
and usage behavior evolves
The data analytics and business

intelligence tools evolve,
increasing advertisement funding
368
257
41
2010
58
2011
74
2012
94
2013
Telco Services Market
117
2014
137
2015
180
158
2016
(e)
2017
(e)
2018
(e)
2019
(e)
OTT Services Market
Source: IDATE - World Internet Services Markets 12/2013 and Detecon Forecast (e)
2020
(e)
This revenue explosion is built on the

back of network operators, leaving
them with network expansion costs to
accommodate the data growth
Operators will face severe profitability

challenges in the future
2021
(e)
Detecon
Development of global Telco and OTT services market (2010 2021)
Trends and challenges: Categories of OTT services
OTT players offer a variety of services over Telco infrastructure. Telcos need to leverage
the benefits of complementary services and constrain the impacts of destructive ones.
Breakdown of OTT Internet Services Market in 2017*
The nature of OTT Services
Unit: Million US $
79.299
54.808
Search
40.105
E-commerce
(value added)
28.746
Paid mobile apps

(including games)
Social
23.222
Online games
22.720
Music
OTT VoIP
Destructive Services, e.g.:
130.628
Messaging Services such as

WhatsApp, Line, etc. directly
cannibalize SMS revenues
VoIP Services, such as Skype or

Viber directly cannibalize revenues,
81.569
Revenue decline of international calls e.g.

in high price regions like Africa
65.423
Business calls substituted by

collaboration software such as LYNC
56.351
43.369
12.647
28.869
6.337
7.788
2.104
5.125
58.731
26.544
Other ads
(press, portals, etc)
OTT video
254.197
OTT services can be classified into

different categories, according to their
impact on traditional Telco Business
2013
Source: IDATE - World Internet Services Markets 12/2013

* Data for Messaging not reported via IDATE
2019
Complementary Services, e.g.:
Online Gaming or Video can be

complimentary to Telco business if
data transport costs are covered
Cloud Services are complimentary

depending on positioning (e.g.
hosted storage services)
Detecon
Cloud
(excl. mobile apps)
Trends and challenges: OTT player monetization strategies
The revenues generated by OTTs come from an intelligent mix of content delivery and
advertisement, reducing the operators to mere infrastructure providers or dumb pipes.
Revenue development from OTT services (2010 2017) in Million US$
+240%
OTT Monetization Strategies

1
OTTs focus on content distribution to

monetize on subscription fees and
advertisement revenues
By offering free services financed by

targeted advertisements, OTTs quickly
achieve a significant customer base
which, in turn, drives ad. revenues
Integration with other OTT services

and platforms increases the potential
to cross-sell other high value products
+398%
9.713
7.272
4.534
1.806
1.443
1.155
2010
2011
2012
15.740
2.557
2.167
2013
17.857
2014
OTT Video
2.966
2015
22.580
3.411
2016
3.923
2017
OTT VoIP
OTT Impact
+540%
6.752
2010
11.847
2011
18.277
2012
23.916
2013
Social Network Paid revenues
29.692
2014
34.772
2015
39.409
2016
10
High quality content and higher traffic

push a heavy load on the network and
shift the perception on the Quality of
Service (QoS) offered by the bit pipe,
i.e. the operator transporting the data
2
2
Most OTTs do not (or only partially)

generate revenues from their services
but harm operators traditional ones
3
3
OTTs are viewed as the preferred

service providers and no longer the
operators
43.186
2017
Social Network Advertising revenues
Source: IDATE - World Internet Services Markets 12/2013
Detecon
13.024
20.151
Trends and challenges: The impact of revenue squeezers
Voice, Messaging and Video OTTs can be seen as revenue squeezers, their services do
not only impact traditional Telco revenues but pressure the network infrastructure.
Revenue Squeezers
OTTs offering
competing services
with free(mium)
business models or
high capacity
demanding services
Mobile messaging
~ 49,0,6 bn US $
in SMS revenues
lost to OTT players
in 2014 (globally)
Video / TV Services
Video is expected
to contribute the
single largest
portion of mobile
data traffic, at over
70% by 2016
Greatly harming
operator traditional
revenue streams or
resulting in heavy
infrastructure
investment to support
QoS on OTT service
Source: Ovum 11/13 Consumer VoIP Forecast

Source: Ovum 09/13 Mobile Messaging Traffic and Revenues Forecast
11
Detecon
Voice and Messaging Services
Trends and challenges: The potential of revenue generators
Several OTTs can be identified as revenue creators, as their digital business evolve and
services get pushed into the market generating revenue streams unknown to operators.
Social and e-Commerce Services
Revenue Creators
Cloud, Games and Music Services
OTTs offering
innovative services
with compelling
business models
based on Business
Intelligence data
12
Detecon
Most of business
models are driven by
advertisement
revenues built on the
basis of customer
profile knowledge
Trends and challenges: The current regulatory imbalance
The current trends and developments in the OTT universe causes regulatory authorities
all over the world to struggle with the question of how to treat OTT players adequately.
Growing Imbalance between Telecom and OTT universe
Telecom Universe
OTT| Communication Universe
Heavily regulated industry
Limited/ no regulation
Telco based standards (ITU)
Internet based standards (IETF)
Limited/ slowing growth
Rapid growth
High pre-investment required
Low, scalable investment
Significant employer
Limited direct employment
Moving towards IP
IP based
Traditional business models
Disruptive models (free, freemium,

ad based etc)
13
Detecon
Regulatory Challenge: Deregulation vs. Regulation of OTT?
Trends and challenges: The need to develop adequate response strategies
As a new regulatory balance is not yet in sight, operators need to act quickly on their
own to cater for these challenges and develop adequate OTT response strategies.
Comparison of market conditions
Licensed network operator
OTT player
Network operators business models are

determined by regulatory requirements
OTT Players are usually free of such

limitations
Current market setups have not yet

adapted to the new competitive situation
In addition, many Telco operators lack the

necessary innovation speed and
readiness and run into an innovation
backlog against OTTs
Licensing
Subject to license and

license fee
No service license
required
Quality of
Service
SLAs are included in the

service license
No quality
requirements
Interconnection
Interconnection is
mandated
No interconnect
requirements
Universal
Service
Usually subject to universal

service obligation
Not subject to univ.

service regime
Consumer
protection
Subject to (enforceable)
consumer protection policy
No or little
enforcement power
This causes competition to be highly

dysfunctional to the benefit of the
increasingly dominant OTT players
Legal
interception
Usually part of a license

condition
The result is a significant loss of revenues

in core services while costs for network
expansion remain high
Taxation
Subject to national tax

regime
Results
Country dependent
Conclusion
Service dependent
14
Operators need to act quickly to cater for

these challenges as a new regulatory
balance is not yet in sight.
Detecon
Regulation
The need for action
Trends and challenges: Operators at the crossroads
Operators need to carefully decide how to deal with OTT players as their different types
of business models may determine the sustainable future of operators business.
Operators face a crossroad regarding OTT impact on their business
OTTs business models develop at a

fast pace and change the traditional
revenue split
High Bandwidth Video
Advertisement is the main

revenue source of many OTTs.
Paid subscriptions start to work

for larger customer base OTTs
Fremium apps have thrived as a

innovative monetization strategy
Cloud storage as an add-on

service has ramped profitability
Business Intelligence is the

most powerful tool of content
distributors
Best-effort free services

cannibalize traditional revenues
Profitability level over time
Voice and Messaging
Strategic
decision
needed
Service deployment over time

OTT Perspective
Operator Perspective
15
Flexibility and innovation are the

only way operators can monetize on
future opportunities
Detecon
OTT Business Model

Refinement & Maturity
OTT Business Models
Content

Overview of applicable response strategies
Assessment of adequate response strategies

16
Detecon
Possible scenarios for Telco operators: Overview of applicable response strategies
In principle, Telco operators can choose between three strategic directives to mitigate
the impact of OTT players on their core business: Defend, Attack and Co-Operate.
Overview of the most common response strategies for Telco operators
DEFEND Strategy
Neutralize effect of OTT
service(s)
CO-OPERATE - Strategy
ATTACK - Strategy
Partner with OTT player(s)

and benefit from service(s)
Block OTT player(s)

and service(s)
Response Strategies
for
Telco operators
Emulate service(s) of
OTT player(s)
Sponsored Data Approach
OTTs subsidize user data
17
Detecon
Invest in or acquire OTT

player(s) and gain access
to OTT service(s)
ATTACK - Strategy
Possible scenarios for Telco operators: Assessment of adequate response strategies
Both Defend and Attack strategies have implications on the value propositions
towards the customers and should therefore be assessed carefully.
Assessment
Pro: Can reduce the usage of OTT services and content or

stimulate purchase of additional capacity (download
volume) beyond the usage cap
Contra: Increased administrative efforts and decreased

customer experience. Soft cap only reduces usage, but
does not fully stop it
Pro: This strategy may limit the up take of OTT services on

a network and shift usage towards Telco services.
Contra: Completely banning OTT services on a network or

making these services unattractive by adding an additional
fees can also cause customer dissatisfaction and churn
DEFEND Strategy
service(s) on network
ATTACK - Strategy
Block OTT player(s) and
service(s)
Pro: If successful, emulated services can generate

additional revenue streams or reduce the risk of losing
revenues to OTTs
Contra: Involves additional investments and time

consuming R&D work with the risk of market failure due to
strong position of established players
ATTACK - Strategy
OTT player(s)
18
Example(s)
Telkom SA
introduced soft cap
for fixed BB data
volume (20GB)
AT&T, Vodacom,
DT have soft caps
on mobile BB plans
AT&T and DT
blocked Skype calls
over 3G/4G
network
DT offers VoIP over

3G usage with
special tariff
China Telecom
started proprietary
messaging app.
YiChat
Several European
and Asian operators
launched joyn
Detecon
Strategy
Possible scenarios for Telco operators: Assessment of adequate response strategies
As recent examples have shown, operators aim for increased co-operation with OTTs in
order to leverage the additional revenue potential and expand their service portfolio.
Assessment
Pro: The increasing amount of OTT content on the network

is paid for (sponsored) by the content provider and does
not count towards the customers data plan
Invest in or acquire OTT
player(s) and gain access
to OTT service(s)
Partner with OTT player(s)
and benefit from
service(s)
Example(s)
Contra: May create regulatory constraints and limitations in

the context of the net neutrality discussion. Benefits large
content providers (increased sponsoring) over small players
AT&T recently
launched
sponsored data
platform
DT investigating a
similar approach
Pro: Acquire OTT service and content providers to expand

service base, get immediate access to (paying)
subscribers, benefit from brand and secure revenues
Verizon acquired
Intel Media, a
business division
developing Cloud
TV products
Airtel Nigeria and

MTN Cameroon
launch Whatsapp
data bundle
Vodafone UK
bundles free Sky
Go into LTE tariff
Contra: Depending on Service category, costly network

upgrades are still required. ROI on OTT service
questionable due to potential competition
Pro: Access to OTT brand popularity can increase

customer numbers and drive sales of data plans with
high(er) ARPU
Contra: Direct cannibalization of core services depending

on type of partnership leading to revenue loss in specific
segments
19
Detecon
Strategy
Content

Overview of selected African OTT players
Overview of selected case studies

Case Study 1 MTN Play
Case Study 2 Airtel Nigeria and WhatsApp
Case Study 3 Vodafone Qatar and Go by OSN
20
Detecon
Selected Case Studies: Overview of selected African OTT players
In Africa, a limited number of OTTs is still in a nascent phase with only few subscribers.
Global players hold the dominant position and attract regional operators as partners.
Rationale
All mayor Content Delivery Networks

(CDNs) are still located in the USA,
Northern Europe and South-East Asia
The majority of content is still hosted

outside of Africa, the are only a low
number of Internet Exchange Points
(IXPs) and therefore almost no local
content
Nascent local OTT providers such

as Saya or Mxit are directly
competing with well-established
global players and have difficulties
reaching a critical mass of users
In addition, the primary OTT services

in Africa still are low-bandwidth
services such as messaging due to
low penetration of broadband internet
Satellite Television dominates the TV

sector leaving, causing high market
entry barriers for OTT Video providers
IC Flix
Dubai based unlimited streaming platform
Available in UAE and Neighboring countries
Saya
Ghanaen Messaging Provider - ~ Subscribers
in 35 countries
Key Advantage works on regular feature
phones
eTV
South African Video Provider - Currently ~ 12,000 unique
viewers in South Africa using its e On Demand service
Key Advantage: offers over-the-top video on-demand
and OTT live TV
Mxit
South Africa Messaging Provider - ~ 7.5 Mio Subscribers worldwide
Key Advantage works on regular feature phones
21
Detecon
The Africa and Middle East OTT Landscape
Selected Case Studies: Overview
The following case studies were chosen to assess the impact of OTTs on African Telco
operators and derive region specific strategies for operators based on current trends.
Cooperate Strategy Airtel Nigeria
Nigeria
South Africa
OTT Video, Gaming, Music
MTN creates the content platform

MTN Play to reduce usage of
OTT content and increase brand
perception
Subscribers get mobile access to

content such as games, news
wallpapers, ringtones, music, and
videos
MTN Play is now available to

MTN subscribers in 22 Markets in
Africa and the Middle East
Cooperate Strategy Vodafone Qatar
Qatar
OTT Messaging
Partnership between OTT

messaging player WhatsApp and
Airtel Nigeria
Exclusive WhatsApp-branded
mobile data plan from Airtel to
compensate SMS revenue loss
and increase brand perception
The partnership has been

extended regionally to other Airtel
Markets (e.g. India) and to
include other OTT platforms such
as Twitter and Facebook
22
OTT Mobile Video
Vodafone Qatar has partnered

with Go by OSN to give
customers access to a large
selection of movies and series
The service is currently available

on PCs and Macs, Smartphones
and tablets and subscribers can
take advantage of dual-device
screening
Vodafone is expecting to drive

the update of its recently
launched LTE service through
this value proposition
Detecon
Attack Strategy MTN play
Case Study I MTN Play
With presence in 24 countries and with mobile operations in 22, the MTN Group is the
continents leading provider of integrated ICT services in Africa and the Middle East.
MTN Group Footprint
MTN Group Information

Operations:
Selected MTN Mobile Operators

MTN Nigeria
Market share: 44.9%
Number of subscribers: 57,224,316
Technology: 2G, 3G and WiMAX
Mobile operations in 22 countries
ISP in 13 countries
Subscriber information
MTN Ghana
Market share: 45.5%
Technology: 2G and 3G
MTN Cameroon
Market share: 60.7%
Technology: 2G and WiMAX
Total mobile subscribers: 160,785,231

(March 2014)
3G subscribers: 25,277,615 (March

2014)
LTE subscribers: 500,760 (March

2014)
Financial (annual figures for 2013 (US$)):
MTN Presence Mobile

Network and/or ISP
MTN subsidiaries chosen

for case study analysis
Source: TeleGeography GlobalComms Database March 2014
24
Total revenue: $14.12 Billion
Opex: $9.93 Billion
Capex: $3.12 Billion
EBITDA : $6.18 Billion
EBITDA margin: 43.8%

Detecon
MTN South Africa

Market share: 33.5%
Technology: 2G, 3G and LTE
In its largest markets Nigeria and South Africa, MTN faces strong declines in voice
ARPUs and revenues but is expecting strong mobile growth rates across all markets.
5,11
4
0
n/a
443
480
MTN Ghana
4,12
2012
2013
MTN Nigeria
540
2014
2015
2016
4,17
3,96
3,91
469
539
590
637
2011
2012
2013
2014
400
200
3,85
687
3,80
742
3,75
801
8,79
4270
2015
2016
7,35
3873
2012
5,24
4,60
4,04
3,55
3828
3691
3559
3432
3309
ARPU
in US $
9,60
2314
2014
2015
2016
2011
1000
500
2356
6,60
1995
5,13
4,53
4,00
1898
1806
1719
1636
0
2011
2012
2013
2014
2015
2016
Voice ARPU
3000
2000
1000
0
2017
Source: Strategy Analytics 2014, * Detecon Forecast for years 2014 2017
Voice Revenues
6000
4000
2000
0
Revenue
in Mio. US $
5,82
0,64
0,77
100
0,26
0,37
21
35
46
59
77
2012
2013
2014
2015
2016
3
2
1
0
0
2017
2,40
+62%
1,05
0,46
0,70
38
69
115
189
2012
2013
2014
2015
0,13
15
0,29
2011
1,59
313
2016
517
2017
7,27
+71%
0,93
492
1,15
739
1,82
2,89
0,29
141
1284
2104
2011
2012
2013
2014
2015
4,58
3236
2016
4653
Revenue
in Mio. US $
+23%
1,33
1,58
0,94
1,12
814
1008
1228
1471
428
590
2011
2012
2013
2014
2
0,66
Data Revenues
6000
4000
2000
0
2017
1,89
1733
2000
1000
0
2015
2016
2017
25
600
400
200
0
Revenue
in Mio. US $
ARPU
in US $
50
Revenue
in Mio. US $
10
5
150
100
ARPU
in US $
2017
-14%
8,26
n/a
0.0
0,54
0,45
ARPU
in US $
Revenue
in Mio. US $
5,96
2013
0.5
2017
-14%
Revenue
in Mio. US $
+25%
1.0
2017
2011
562
600
Revenue
in Mio. US $
10
4,40
-2%
ARPU
in US $
10
519
4,56
ARPU
in US $
6
4
2
0
499
4,74
MTN Nigeria
2011
MTN South Africa
4,92
ARPU
in US $
Data ARPU
Detecon
5,50
Revenue
in Mio. US $
MTN Cameroon
-4%
MTN Ghana
ARPU
in US $
Mobile Data Revenues of selected MTN Markets*
MTN South Africa
MTN Cameroon
Mobile Voice Revenues of selected MTN Markets*
The network infrastructure expansion needed for this mobile data growth hits MTNs
EBITDA Margins, as CAPEX can not be recovered if most revenues flow to OTT service.
Margin
in %
100
50
209,09
226,69
237,36
242,88
248,53
254,31
260,22
48,3
47,8
45,2
44
42,8
41,6
40,5
2011
2012
2013
2014
2015
2016
2017
MTN Ghana
MTN Nigeria
+1%
300
338
380
428
50
188
231
37,90
38,70
38,90
39,20
39,60
40,00
40,30
2011
2012
2013
2014
2015
2016
2017
-3%
Mobile Data also accounts for

significant revenue growth, but the
majority of the content is provided by
OTT players free of charge that
freeride on MTNs network while
benefitting from the direct customer
interaction
MTN acts as a bit pipe for OTT

players while facing significant
network cost (CAPEX + OPEX) that
are increasingly difficult to recover
2694
2709
2657
2605
2555
2506
63,10
59,80
57,90
56,20
54,60
53,10
51,50
2011
2012
2013
2014
2015
2016
2017
Margin
in %
To counter this trend, the MTN Group

chose to develop its own content
distribution network labeled MTN
Play
3000
2000
1000
0
EBITDA
in Mio. US $
-1%
1253
1335
1238
1233
1228
1223
1218
42,00
41,70
40,80
40,40
40,00
39,60
39,20
2011
2012
2013
2014
2015
2016
2017
EBITDA
600
400
200
0
EBITDA
in Mio. US $
2873
60
40
20
0
100
EBITDA
in Mio. US $
267
50
MTN needs to significantly expand its

network infrastructure in order to
accommodate the growing demand
for mobile data usage
100
100
300
200
Margin
in %
MTN South Africa
EBITDA
in Mio. US $
-3%
Margin
in %
Rationale
EBITDA Margin as % of Revenue
26
1500
1000
500
0
Detecon
MTN Cameroon
Development of EBITDA and EBITDA Margin (2011 2017)*
MTN Play is a digital platform developed and operated by MTN which offers subscribers
a variety of OTT content which they can access on multiple devices.
MTN Play was launched in 2009 in South Africa and

expanded to other MTN markets
MTN Play is currently offered in 21 out of the 22

countries in which MTN it has mobile operations
MTN subscribers can access content which includes

music, sports, news and information , applications,
games, entertainment, social networking, as well as
various streaming services (e.g. Mobile DVB-T)
The content offered on MTN play is platformindependent and tailored to each MTN market with
options such as local soccer team updates and local
music available
Using MTN Play

User
downloads
application /
access via
the internet
27
User
subscribes
to content /
purchases
once off
Billing via
deduction of
airtime balance,
voucher, mobile
money etc.
A range of mobile handsets and operating systems,

(basic feature phones to smartphones and tablets) is
catered for by MTN Play
The option of either subscribing to content or

purchasing once off is possible
There is flexibility of cost to the subscriber as there

are a variety of services to choose from
Both prepaid and postpaid customers can use the

service
MTN Mobile Money, e-vouchers, loyalty points or

airtime can be used to purchase content
Detecon
Background
MTN holds the necessary market position to monetize on OTT content through MTN Play
but needs to mitigate the risks resulting from the operation of its own platform.
Increased Operational Expenditures (OPEX) for the

initial development and constant maintenance of the
MTN Play platform
The investments into MTN play need to be backed by

strong marketing initiatives to reach a critical mass of
subscribers
OTTs continue to provide attractive content free of

charge resulting in a direct competition between MTN
and OTTs
In order to provide attractive content, partnerships with

content providers need to be negotiated, more
attractive content will be more expensive
In addition, legal and regulatory constraints with

regards to providing local content need to be taken into
account specific local content needs to be sources
individually per country
MTN Benefits
MTN Play revenues are limited to MTNs subscriber

base of currently ~ 160 Million users as external
access to the platform is not possible
MTN shifts monetization of OTT content from OTT

providers back to MTN by offering third party content
and charging the subscribers based on their usage
The resulting increased data usage translates into

higher data revenues out of which MTN can achieve a
larger share
Strong USP compared to competitors by providing easy

access to local content to a large target group (device
independent)
Synergies exist with other MTN products such as

mobile money which can be used to pay for content
Significant potential for customer analytics (data

mining) that can contribute to targeted advertising
Opportunity to partner exclusively with other service

providers (e.g. current partnership with DSTV)
Significant subscribers base due to MTN presence in

22 markets in CASA and MENA region
28
Detecon
MTN Risks
Case Study II Airtel Nigeria and

Whatsapp
Case Study II Airtel Nigeria and WhatsApp
The Nigerian telecommunications market has the highest number of subscribers in

Africa, with 4 major operators providing services to over 126 million active SIM cards.
Overview of major Nigerian telco operators
Country Information
MTN Nigeria
Total Number of Subscribers:
58,355,855
Mobile data Subscribers:
33,835,981 (Apr 14)
The Nigerian mobile market is the largest

in Africa by subscribers, boasting over
126 million active cellular users at the end
of April 2014
Country size km: 923,768
Airtel Nigeria
25,475,672
11,962,651 (Apr 14)
Total population: 174,507,539 (2013)
Active Mobile Sims: 126,958,904 (2014)
Teledensity : 92.42%
Communications Regulatory Body:

Nigerian Communications Commission
(NCC)
Glo Mobile
24,015,713
13,221,754 (Apr 14)
Total Mobile Data Subscribers:

65,813,890 (Q1 2014)
Etisalat Nigeria
19,111,664
6,793,504 (Apr 14)
Total Voice Revenue: $ 7,253m (2013)
Total Data Revenue: $ 1,352m (2013)
GDP 2013 (USD Billion): $ 283.7
GDP per capita 2013 (USD): $1,700
Source: TeleGeography GlobalComms Database 2014

Pyramid research Mobile Forecast Q2 2014
Source: Nigerian Communications Commission (NCC) Industry Overview 2014
30
Detecon
Airtel Nigeria was the first mobile operator to roll out GSM services in the country, now
having the 2nd largest subscriber base with 28.6 million customers.
Business Description
Airtel Nigeria Revenue and ARPU Development

Revenue
in Mio. US $
ARPU
in US $
Airtel Nigeria was the first mobile operator to roll out GSM
services in the country in 2001 (2 days before MTN)
7
6
5
4
3
2
1
0
The company was originally founded as Econet Wireless

Nigeria in 2001, named after the South African holding
company Econet Wireless which held a 5% stake and a
contract to run the Cellco
After several changes of ownership, Zain Group approved an
offer for the majority of its African assets by Bharti Airtel in
June 2010. The Cellco was rebranded under the Airtel
moniker by the end of 2010
6,61
-8%
5,93
1338
1465
2011
2012
5,28
1479
1529
4,55
4,22
1581
1635
3,91
1690
1500
1000
500
0
2013
Revenues
Court cases between Econet and Bharti Airtel about Econets

remaining 5% share of ownership are still ongoing
In April 2014, Airtel Nigeria revealed it had invested over
USD1.7 billion to expand network capacity and improve
network and service quality since Bharti Airtel took over in
2010
4,90
2000
2014
2015
2016
2017
ARPU
Number of Subscriptions and Market Share (m,%)
28.6
Airtel Nigeria plans to launch LTE in 2015. Trial tests were

run successfully in Lagos mid December 2012 with plans to
increase 4G coverage to other major cities
31.6
34.3
36.6
23.1
24.8
19
21%
20%
20%
20%
20%
21%
2011
2012
2013
2014
2015
2016
2017
18.0
Market share
Source: GSMA 2014 ,Telegeography 2014, Detecon Analysis 2014
31
Connections
Detecon
Airtel Nigerias subscriber base only recently surpassed

Nigeria's second national operator (SNO) Globacom in the
first quarter of 2014, turning it into the 2nd largest operator in
the country, behind MTN Nigeria
With the expected uptake of OTT voice and messaging users in Nigeria, SMS traffic on
Airtels mobile network as well as SMS ARPUs are expected to decrease.
Nigerian OTT Voice
xxxxxxxxxxxxxxxxx
and Messaging users (millions)
ARPU
in US $
Messaging
25
20
+43%
15
10
5,84
5,72
5,61
5,50
5,39
1402
2
0
1606
1670
1638
1704
1738
0
2012
2013
2014
2015
2016
2017
ARPU
in US $
2012
2013
2014
2015
2016
2017
Data Services
2011
Development of SMS Traffic on Airtel Nigeria Network

SMS Traffic
in Million
1435
1450
1419
1348
1281
1217
1156
SMS Services
500
0
2012
2013
2014
2015
2016
n/a
0,32
83
2011
2012
ARPU
in US $
1000
2011
2,60
+52%
-4%
2017
0.3
0,64
165
0,91
198
238
286
2014
2015
2016
0.1
343
200
100
0
2013
2017
-2%
Revenue
in Mio. US $
0,27
0,27
0,26
0,26
0,25
0,25
68
74
76
77
79
81
2012
2013
2014
2015
2016
2017
n/a
100
50
0
0.0
32
400
300
1,83
1,29
0.2
2011
Source: Analysys Mason OTT worldwide forecasts 2013, * Detecon Forecast for years
2014 2017
Revenue
in Mio. US $
1000
500
n/a
2011
2000
1500
1500
5,91
Revenue
in Mio. US $
-2%
Detecon
Voice
Voice Services
OTT Users
in Million
Selected quantified data drivers
By partnering with WhatsApp, Airtel intends to reduce the negative revenue impact of
OTT messaging by monetizing WhatsApp usage through specific tariff plans.
Airtel Nigerias partnership with WhatsApp Inc. offers

all Airtel prepaid subscribers a WhatsApp branded data
plan that provides unlimited access to WhatsApp
usage for a monthly subscription fee
This partnership is a first in Nigeria and is currently

exclusive to Airtel
Subscribers who activate Airtel data bundles of 200MB

or more (up to 15 GB per month) also get unlimited
access to WhatsApp messaging without having to pay
for WhatsApp usage via deduction of airtime
Airtel Nigeria WhatsApp and WTF bundle tariffs
All core WhatsApp features are included in the bundle:
Instant messaging and Multi-user messaging
File sharing
Location sharing
Message broadcasting
Audio messaging
Airtel also provides a WTF (Whatsapp, Twitter and

Facebook) bundle that offers unlimited access to all
three OTT platforms
33
Monthly subscription fee for Airtel WhatsApp bundle is:

100 Nigerian Naira (0.62 US $)
Monthly subscription plan for 200MB, which includes

unlimited WhatsApp usage, (i.e. Usage is not taken off
data volume) is: 1,000 Nigerian Naira (6.14 US $)
Monthly subscription fee for Airtel WTF bundle is: 200

Nigerian Naira (1.23 US $)
For WhatsApp activity after expiration of bundle

subscription, Airtel customers will be billed based at
Pay as you use rates of 5kobo (0.003 US $) per
Kilobyte
Detecon
Airtel Nigeria and WhatsApp partnership
The WhatsApp bundle may not be able to fully compensate shrinking SMS ARPUs but
Airtel is expected to benefit from the improved brand perception through the partnership.
Direct cannibalization of traditional SMS revenues as

unlimited WhatsApp usage can be subscribed on a
monthly basis for ~ 0.62 US $ (100 Naira) whereas 200
SMS (to all operators within Nigeria) are sold on a
package price basis of ~ 1.20 US $ (200 Naira)
Airtel Nigeria Benefits
Lack of targeted advertising opportunities as

WhatsApp explicitly does not gather user data for
customer analytics purposes and ad selling
Improved brand perception due to marketing of Airtel

and WhatsApp as unique and exclusive partnership
Stronger USP compared to Airtels local and regional

competitors such as MTN, Glo or Etisalat
Depending on uptake of WhatsApp bundle, data traffic

on Airtels network could increase significantly,
particularly if WhatsApp is used for sharing media such
as pictures
Unlimited WhatsApp usage (outside of tariff plans with

more than 200MB per month) can be used as a sales
argument for up-selling of higher value tariff plans to
existing customers
Cost of partnership, e.g. paying license fees to

WhatsApp for exclusive advertisement of the Airtel cobranded service
Increase in subscribers numbers due to attractiveness

of OTT social messaging bundles
Expansion of WhatsApp partnership into other Airtel

markets such as India with significantly larger
subscriber base
The partnership can facilitate the expansion of the

WhatsApp bundle to include other OTT Services such
as Twitter or FaceBook (WTF Bundle) or even other
platforms in the future
Due to the No Advertising policy of WhatsApp, the

explicit marketing of the partnership is one-sided (Airtel
only) and thereby reaching a reduced audience
34
Detecon
Airtel Nigeria Risks
Case Study III Vodafone Qatar and

Go by OSN
Case Study III Vodafone Qatar and Go by OSN
The Qatari telecommunications market develops in an incredibly fast pace with sky-high
penetration rates. Two operators run to differentiate and introduce new services.
Overview of major Qatart telco operators
Ooredoo
2,593,327
1,075,000 (Apr 14)
Vodafone Qatar
1,327,000
765,000 (Apr 14)
Country Information
The Qatari mobile market is already
highly developed, experiencing over
200% penetration with 50% of data
connections
Country size km: 11,437
Total population: 1,900,000 (2013)
Active Mobile Sims: 3,920,327 (2014)
Teledensity : 203.0%
Communications Regulatory Body:

Supreme Council for Information &
Communications Technology (ictQATAR)
Total Mobile Data Subscribers:

1,840,000 (Q1 2014)
Total Voice Revenue: $ 643.9m (2013)
Total Data Revenue: $ 153m (2013)
GDP 2013 (USD Billion): $ 188.8
GDP per capita 2013 (USD): $98,800
Source: Analysis Mason 2014
Source: TeleGeography GlobalComms Database 2014
36
Detecon
Mobile is a key driver for OTT video demand, Smartphones are significantly driving daily
video usage and OTT take-up in the entire Middle East and North Africa (MENA) region.
Background Information
Fixed Broadband Connections in MENA
Video viewing on handsets is common in MENA. Surveys

show that more than 60% of subscribers in developed MENA
markets with data-enabled handsets use mobile video
25.000.000
+16%
20.000.000
Consumption of free OTT content is more prevalent than paid

content, such as catch-up TV. YouTube usage reported by
Google showed that playbacks in the region doubled y-o-y
15.000.000
10.000.000
Local OTT providers have also gained traction. Istikana, an

OTT video provider with a freemium model, reached 1 million
visits within 4 months of launching its service in March 2011,
and has exceeded 100,000 users a day, after expanding its
support to include portable devices, such as tablets
5.000.000
0
2008
2009
2010
2011
Connections
Increased take-up of Smartphones is encouraging mobile

Internet users in MENA to use data-driving services such as
video
2012
DSL
2013
2014
2015
2016
2017
Fiber
Mobile and Smartphone Penetration in MENA

Penetration
rate in %
As OTT players move from a free ad-supported to a paid

model, they are likely to rely on operators support to
distribute and monetise content
110
120
100
Operators need to prepare their infrastructure and position

the services attractively (for example, as part of data bundles)
to increase the likelihood of consumers paying for them
80
60
31
40
The video formats are demanding in terms of both bandwidth

and capacity, so operators need to deploy networks that can
deliver this level of performance and maintain an acceptable
level of quality of service
20
2009
2010
2011
2012
Mobile
2013
2014
2015
Smartphones
2016
Source: Analysis Mason 2014; TeleGeography GlobalComms Database 2014
37
2017
Detecon
0
2008
MENAs OTT video landscape differs from the rest of the world, as local players have
had room to grow without intensive pressure from established international players.
MENA OTT Video Landscape
The media content creation and distribution market in MENA
is dominated by a relatively small number of satellite TV
broadcasters (such as MBC) and pay-TV providers (such as
OSN)
In the absence of competing international OTT providers such
as Netflix, these large regional media groups have used OTT
to consolidate their market dominance
A new breed of home-grown OTT players has also emerged
during the past 4 years. These companies use cloud-based
streaming and storage capabilities to quickly deploy digital
aggregation and distribution services. These players have
managed to quickly reach consumers across the whole
region using the web as the distribution platform, and
targeting niche segments
Multi Access
These emerging OTT players are increasingly making their

services accessible from a variety of devices, such as mobile
handsets, tablets and smart TVs, because they have
recognised the importance of delivering a multi-screen
experience
The integration of social networking features such as
recommending and sharing helped attract MENAs (mostly
young) mobile and online users
Source: Analysis Mason ,Telegeography 2014, Detecon Analysis 2014
38
Detecon
Most of these services are freely accessible (with advertising

support), but there is growing interest in building sustainable
business models based on subscription fees
The Qatari demand for advanced data offering can already be observed from the uptake
of new services and technologies. Video services are a clear path towards revenue rise.
Qatarixxxxxxxxxxxxxxxxx
Mobile Users (millions)
Video Demand on Qatari Market

Data Share
in %
0.1
4.0
4G
30
3G
25
3.5
3.0
1.0
1.2
1.1
1.7
1.6
1.4
1.8
400
350
300
20
2.0
1.5
1.0
15
2.0
2.0
2.0
2.1
2.1
2.1
2.1
2.1
10
0.0
5
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
405
383
2G
0.5
2Q12
450
1Q14
449
50
0
2010
2011
2012
2013
Data Revenues
Connection Type (millions)
2014
2015
2016
2017
Data Share of Total Revenues
Connections
in 000
4.0
3.5
500
3.0
+25%
400
2.5
3.3
2.0
1.5
2.0
2.3
2.6
3.3
300
2.8
200
0.2
2009
0.3
2010
0.3
2011
Prepaid
Source: Analysys Mason 2014
0.4
2012
0.5
2013
100
0.6
2014
32
2010
Postpaid
417
217
161
142
372
338
301
0.5
0.0
200
100
0%
1.0
250
150
288
243
179
118
427
55
76
93
96
122
139
2013
2011
2014
2015
2016
2012
Broadband Connections
IPTV Connections
Source: Analysis Mason 2014, * Detecon Forecast for years 2014 2017
39
462
156
2017
Detecon
2.5
1.3
Revenues
in Mio. US $
Introduction of OTT Video

Offerings (Go by OSN)
+30%
Vodafone has found in OSN an opportunity to differentiate and attract costumers to its
newly deployed 4G network. OSN brings the benefits of a establish media corporation.
Vodafone has partnered with Go by OSN to give

customers access to a huge selection of movies and
series
The partnership is beneficial to Vodafone since it

works with an experienced local partner which holds a
large media portfolio (content) and network
The content available reaches out to the Arab nationals

as well as to international viewers
This service has been made available with the rollout

of Vodafones 4G network in the country, clearly
indicating the necessity for investment to support such
data-intense applications
Paulo Ferreira, Head of Commercial and Digital, OSN,

stated that: We launched Go by OSN last month and
the response has been overwhelming. There is no
other service in the market that has multiple Hollywood
studio deals which enables Go to play host to the
most critically-acclaimed and diversified Western and
Arabic content. Coupled with Vodafones seamless 4G
network
Vodafone Tariffs and Plans
40
Go, OSNs online TV service, offers Qatar residents

access to entertainment including Hollywood
blockbusters, local Arabic productions, award-winning
TV series and popular kids content. The service is
currently available on PCs and Macs, smartphones
and tablets and subscribers can take advantage of
dual-device screening
With up to a 6 month trial followed by QR37 (10.16 US

$) a month, customers choosing Go by OSN can
access over 500 movies, 150 series and over 100 kids
and family shows
Subscribers can also enjoy up to 8 GB of FREE video

streaming from Go by OSN every month
Detecon
Vodafone and Go partnership
The partnership shows to be promising as it taps a market demand just at the event of a
4G introduction, expected to offer a good service with an acceptable mobile QoE.
Vodafone needs to strategize on the business model

evolution as it needs to assure the return on its investment
for the newly deployed 4G network
The price per MB is not likely to grow but the traffic will grow
at a fast pace, nevertheless this might not be sufficient to
push profitability up
The new video service offering bundled with the 4G network

is an important step to attract new customers and to
differentiate itself from the market leader Ooredoo
Using a partner as OSN can provide access and expertise

which is currently not in place at Vodafone, but the right
interaction points and knowledge transfer need to take
place
The choice of OSN as a partner brings many benefits as it is

already an established company in the media business and
holds a wide network of partners itself
The extended portfolio which covers both the Arab and

international content is very appealing to a market like as
Qatar with its large population of expatriates
Since international OTT media players are not entering the

Arab markets, the service can experience a controlled
growth and adapt to the demands of the region
Video services has shown to be one of the top demands

from the MENA region which will clearly have a positive
impact on (mobile) data usage
Through a smart business model Vodafone can greatly

benefit and monetize from this partnership with OSN. It also
opens doors for smart bundles in case Vodafone grows a
fixed access network in the future
On the group level, Vodafone can use the experience gained

in Qatar to roll-out similar partnerships in other subsidiaries
The magnitude of data explosion with innovative services

has been always unpredictable and the demand for it can
overload the new network and push for unforeseen
investments
The partnership could trigger Ooredoo to also negotiate and
launch a similarly attractive partnership and overtake
Vodafone in this segment, due to its significantly larger
existing subscriber base
Vodafone Qatar Risks

41
Detecon
Vodafone Qatar Benefits
Content

42
Detecon
Our Approach
Detecon proposes a phased approach to assess the impact of OTTs on the business of
our clients and develop an actionable response strategy tailored to their needs.
Detecons project approach
Competitive Analysis and Trend Scouting
Development of Implementation plan
Quantify impact of OTT services on core

business and identify both revenue
squeezers and creators
Definition of clients specific

implementation steps and timelines,
action items and required resources
Analyze and scout OTT environment and

cluster key OTT players into threats and
opportunities
Translation into detailed Roll-out/

implementation plan including Work
packages and Deliverables
Analyze and assess

situation
Define and recommend

strategy
Design and Implement

action plan
Definition of OTT Response Strategy
Define high impact response strategy

based on consideration of all risks and
benefits
Recommendation of clients strategy

and definition of corresponding
prerequisites for implementation
43
Detecon
Project Methodology: Competitive Analysis and Trend Scouting
We support our client in understanding their OTT environment by assessing the impact
of OTTs on their services and by scouting emerging players, technologies and trends.
Competitive Environment and Impact Analysis
OTT Services Trend and Innovation Scouting

Detecon can also assist clients in the following areas:*
Global and regional trends in operator impact area
Innovation Scouting and Opportunity Evaluation
Mobile Messaging by service type*
60
40
20
0
2010 2011 2012 2013 2014 2015 2016 2017 2018

OTT IP messaging
Operator IP messaging
SMS
Silicon Valley Innovation Workshops
Client specific trends in OTT impact area

Revenues and Expenditures in Mn. US $
6.276
6.289
1.072
Q1/10
Voice Revenue
6.273
1.306
Q1/11
Data Revenue
6.031
1.700
Q1/12
1.998
Q1/13
CAPEX
OPEX
* Can also be executed by the Detecon ICT innovation office in the US Silicon Valley
44
Detecon
Messages (trillions)
Detecon will analyze global developments with regards to

service usage and map them against operator portfolio:
Project Methodology: Definition of OTT Response Strategy
Based on the competitive analysis Detecon and the client will define the best response
strategy, including a customized actionable framework supporting the chosen strategy.
Selection of Preferable OTT Response Strategy
Identify suitable strategic response
(e.g. Partner with OTT Player)
Establish partnership type according

to services and positioning of partner
Define target picture with regards to

revenues, subscribers, costs, etc.
DEFEND Strategy
service(s)
ATTACK - Strategy
Partner with OTT player(s) and

benefit from service(s)
Block OTT player(s) and

service(s)
Action Areas for
Telco operators
ATTACK - Strategy
Invest in or acquire OTT player(s)

and gain access to OTT service(s)
OTT player(s)
Development of a customized actionable framework (for chosen partner strategy)

Partner selection
Analyze potential Partner
Evaluate potential Partner,

incl. Due Diligence (if
possible)
Select and Engage

Partner One-Pager
Final decision portfolio
management
Partner relationship
management
Strategic Business Planning
Joint Workshops
Portfolio details,
Road maps & Trends
Sort of services
&capabilities
Revenue Sharing
First & second line support
45
Deal realization
First deals/customers
identified
Pre-sales support from
vendor
Generation bid of quantity
Technical support records
Responsibility matrix
Pricing
Project management
Partner program
management
Quality assurance
Product quality
Service capabilities
Customer satisfaction
Loyalty
Performance Review
Financials
Target achievements
Detecon
Project Methodology: Development of Implementation plan
The successful implementation of the chosen strategy relies on clearly defined targets
and the translation into dedicated programs supported by detailed program plans.
Prioritized and client specific implementation steps
Roll-Out and Implementation Plan
Based on the defined strategy Detecon will further detail the

strategic objectives in operational targets and programs
Detecon will develop a roll-out and implementation plan

based on international frameworks and best practices
Managed programs to support strategy achievement
Detailed Program, interdependencies and resource plan
Optional tool-driven implementation support
46
Detecon
Each program is comprised of a set of projects
Why Detecon
Detecon is a cross sector Management & ICT consulting company combining regulatory
and technology expertise with a profound understanding of the business environment.
DeteconLeverage
Leverage
Detecon
Strategy and
Implementation
capabilities
30+ years of ICT and

Mgmt. Consulting
experience
Profound Regional
Expertise
Our experts understand Telco business , the

competitive environment, future challenges and trends
and will derive the best possible solution for the client
Interdisciplinary teams able to assess all impacts of

OTT activities on the Telco value chain.
Independent advisor understanding

both the Telco and OTT universe
Holistic analyses or specialized

deep dive, according to client needs
Detecon has the necessary skill-set and expertise to

develop custom-tailored actionable OTT strategies
Proof of concept during

implementation phase
Long-standing global track record with regards to

strategy implementation together with the client
OTT Strategies that truly work and

impact the business
Detecon delivered 7.000+ projects covering all areas of

Telco business, setting trends and shaping the industry
Experts with insights from different

projects, clients and industries
Detecon continues to be the ICT consultant of choice for

operators across the globe
Access to a database of international

benchmarks and best practices
Full understanding of clients reality of business and

local market challenges
Consideration of client and regionspecific needs
Profound knowledge of African Telco industry shared

by international experts from 30+ countries
Project team knows clients

business environment
47
Detecon
Differentiation Factors
Integrated Business,
Technology and
Regulatory Expertise
Client Benefit
Content
Tbd

48
Detecon
Publications and References
Over the past years Detecon has continuously published opinion papers and books ,
delivered project studies and presented research results on future key conferences.
Snapshot of our latest publications and studies on OTT players
03/2011 ICT 2032
03/2012 ICT 2032
2012 eBook Publication
03/2014 Study
2014 Book Publication
Cash Cow Information
Scotty, beam me up!
The Future of Cloud
Success Factors for

Information-centric
Companies in 2032
On the possibilities of
offering high-quality
collaboration tools over the
internet.
A roadmap of Technology,
Product and Service
innovations for Telecoms
Policy and Regulatory

Framework for Governing
Internet Applications
Profitability in the Telco

Industry
The Regulatory Authority

of Bahrain
Seven levers assure a

prosperous future
49
Detecon
Detecon Management Report (DMR)
Content
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50
Detecon
Your Contact Persons
Please contact our topic experts at Detecons corporate headquarters in Cologne or at

our regional offices in Johannesburg (CASA) and Abu Dhabi (MENA).
Dr. Arnulf Heuermann
Managing Partner
Detecon International GmbH
Sternengasse 14 16, 50676, Cologne (HQ)
Germany
Mobile: +49 171 2254217 (Germany)
e-Mail: Arnulf.Heuermann@detecon.com
Tim Drflinger
Senior Consultant
Building 27, Woodlands Office Park,
Woodmead 2191, South Africa
Mobile: +27 82 3216730 (South Africa)
Email: Tim.Drflinger@detecon.com
Leonardo Caracas Sales
Consultant
Al Wahda City (1), Commercial Tower
52612 Abu Dhabi (United Arab Emirates)
Mobile: +971 566228123
Email: Leonardo.CaracasSales@detecon.com
Stacey Rukezo
Business Analyst
51
Detecon

Building 27, Woodlands Office Park,
Woodmead 2191, South Africa
Mobile: +27 82 879 7007 (South Africa)
Email: Stacey.Rukezo@detecon.com

VP - Value Killer OTTs in Africa

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OTTs Value Killers for Telcos?

Focus on African Operators

We make ICT strategies work

Global Data Usage

Innovation in the field of ICT products and services is significantly changing

The Rise of OTT

There is only a short window of opportunity for operators to elaborate a specific

By carefully analyzing the strategies chosen by other operators around the

The drivers for fixed and mobile data growth

The operator profitability trap

2. Trends and challenges

1. Overview and introduction

Selected quantified data drivers

TV Device Sales (in Million)

M2M Connections (in Million)

Active Videocall* Accounts (in Million)

IC Intelligence Centre (2013) - TV Devices Forecasts

Compound Annual Growth Rate (CAGR)

Overview and Introduction: The operator profitability trap

Minutes: Billion units

The Telco operator profitability trap

Mobile Network Traffic

Mobile Voice Minutes (global)

Mobile Voice Revenues (global)

Source: Analysis Mason (2014) - Fixed network data traffic worldwide

The key challenges for Telco operators

1. Overview and introduction

The rise of OTT players

The rationale for OTT growth

Categories of OTT services

OTT player monetization strategies

The impact of revenue squeezers

The potential of revenue generators

The current regulatory imbalance

The need to develop adequate response strategies

Operators at the crossroads

3. Possible scenarios for Telco operators

2. Trends and challenges

Trends and challenges: The rise of OTT players

Source: Detecon Research 2014

OTT Landscape - Overview of the most dominant OTT players

Trends and challenges: The rationale for OTT growth

The rationale for OTT growth

The forecasted absolute growth rates

OTT service revenues explode as:

Services with a large customer

OTTs expand and focus their

The data analytics and business

Telco Services Market

OTT Services Market

This revenue explosion is built on the

Operators will face severe profitability

Development of global Telco and OTT services market (2010 2021)

Trends and challenges: Categories of OTT services

The nature of OTT Services

Paid mobile apps

Destructive Services, e.g.:

Messaging Services such as

VoIP Services, such as Skype or

Revenue decline of international calls e.g.

Business calls substituted by

OTT services can be classified into

Source: IDATE - World Internet Services Markets 12/2013