Digital Value Chain 

James McEachern
Manager ‐ Application Enabler Standards 
Nortel Networks
 Today’s Business Challenges
• Hyper Competitive Environment
• All out battle for the digital home
Traditional Traditional Over-the-Top
• New competitors are being enabled Competitors Telecom SP Providers
by ubiquitous broadband access
• MSO’s aggressively adding voice
• Telco’s responding with video Getting
squeezed…

• Over-the-top providers are a new

threat.
• Google Voice, Skype, Vonage
• Traditional SPs are left out of the
over-the-top business model
• High risk of being relegated to “just
pipes”
• SP’s need new services strategies to
differentiate and compete

2
 Service Bundles
Total U.S. Households

80%
70% Consumers
60% that do not
subscribe to a
(%)

50% Bundled bundle are as

unlikely to
40% Households churn as those
Quad Play in a bundle
30%
20% Triple Play
10%
0%
2006

2007

2008

2009

2010

2011

Source: IDC > Industry dynamics are driving service providers to create new
packages; consumers will continue to adopt bundles.
However,
> Bundling is losing its effectiveness as consumers move from
bundle to bundle in search of savings.
So…
> The integration of voice, video, and broadband applications
delivered over a wireless or wireline network becomes the next
important strategy.

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Key Reasons Not to Churn
I trust and value the 9%
12% TV
company providing
16% Broadband
the service 20%
Voice
It's the best service 25% Wireless
available in a similar 25%
22%
price range 30%
8%
I'm in a bundle and don't 10%
want to lose my discount 8%
4%
30%
There is no other 25%
comparable service 16%
available 9%
21%
I haven't really 19%
considered switching 26%
27%
0% 10% 20% 30% 40%
Source: IDC

Bundles no longer create stickiness

Innovative services can create stickiness
Source: IDC, 2007
4
Realities in the new Communications world

• Advertising is not the only answer

$2 Trillion
2008
2012

$1 Trillion

$500 Billion

Telecom Services Global Ad Interactive

Fixed + Mobile Revenue Ad Revenue

• Advertising can augment a model for carriers, not be the model

Sources: - Global Telecom Market Status and Forecasts: Hot Telecom

- The Kelsey Group
Service Convergence

Service Silos Service Convergence

Voice Mobile Video PC Unified Experience

Fixed Phone Mobile Phone TV Home PC

Identity enabled converged services with a common

user experience that converges communications across
devices inside and outside the digital home
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 The single-sided model

service providers consumer

Increasing sales

carrier

Diminishing
sales

• carriers sell to consumers

the double-sided model:

service providers consumer

Increasing sales

carrier

Increasing
sales opportunity Diminishing
sales

• carriers sell to consumers and service providers

 The carrier's (latent) assets
MY PERSONAL DATA
Core customer data
Name, Address,
Gender, National ID,
Profile & Preferences
MY DEVICES
User ID linked to physical
device or token;
configuration
SIM, USIM, SoftSIM, serial
number, profile & settings
MY IDENTIFIERS
Identity and persona
creation for user
Number, address or ID
provisioning; porting; avatars
(micro-)payment, order fulfillment and
MY CONTEXT
User real-time activity
and status
Location, On/Off,
Roaming, In-call
MY TRUST
Carrier Brand/Business value
roaming agreements, secure
distribution networks, sophisticated
processing capability, trusted brand,
near universal subscriber base
MY RELATIONSHIPS
Knowledge of personal
and business interactions
My bank, school,
workplace, friends,
address book
MY INTERACTIONS
Naming and tracking
non-human resources
.mobi domains, web
browsing history,
QR codes read
MY DATA
Digital Lifestyle
Aggregators & PIM
Pictures, Videos, Bookmarks,
History, Files ; Calendar,
Address Book, To Do, Notes
Third-Party Applications – Web 2.0

i-Phone consumer
100,000 + .
.
.
third-party
Google
Developers .
.
.

Amazon

i-Phone receives 8500 new or updated Apps per week!

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Third-Party Applications – Telco Today

Telco A
consumer
100,000 + Telco B

third-party Telco C
Developers
.
.
.

Telco x

Fragmentation reduces appeal to 3rd

rd party developers

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Third-Party Applications – Standard APIs

to underlying communication services

Telco A
consumer
100,000 + Telco B

Consistent access
third-party Telco C
Developers
.
.
.

Telco x

Creates critical mass for 3rd

rd party developers

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Third-Party Applications – Value Proposition

What will appeal to application developers?

• Consistent access to underlying services that telecom operators can provide...
• authentication, security
• ability to readily customize the new services
• ease of integration
• ability to monetize
¾ common “telecom world” interface for web developers
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Standards Initiatives
• ATIS SON Forum
• Service Enablers
• 3rd Party Interfaces
• Catalog of enablers
• Data Model requirements
• Name Space requirments
• IT Infrastructure virtualization
See: http://www.atis.org/SON/

• GSMA
• Rich Communications Suite (RCS)
• OneAPI

• OMA
• TMF
• OASIS

Coordination
Coordination between
between standards
standards forums
forums is
is increasing.
increasing.
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Web Services/SOA: The key to Application Velocity
Reinvent the Applications Space

Telecom IT Enabler Building Blocks New Services

Months/Years Days/Weeks

High

> Marriage of IT and Telecom technologies Short Tail:

Core Operator Revenues
using web services/SOA to transform

Revenues
service development Med

Long Tail:
New services/business
> Dramatically increased service velocity models
• Rapid prototyping Low

• Rapid deployment Number of Services

• Promotes experimentation
• Service, business models…
• Productize only those services that get traction in
the market

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Real World Example

> Click-to-call targeted

advertising
> Click-to-call yellow
pages or customer
service
Click-to-call ads
> Click-to-purchase ads
with credit card
validation
> Communications Click-to-purchase ads
enabled services
leverage the Nortel CM
9520
Click-to-call yellow pages

Web Services Exposure Enables Mashup Composition of new

Services and Applications on TV & PC
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 Service Evolution:
From Service Silos to Converged Services
Location
Andrew
Susan
Alert

Consumer
Mobile
Mash-ups
Extension
Differentiation

Mobile TV
IPTV Communications
on PC

Communications
on TV

Converged Services
Service Silos Enhanced Services

Bundled Services

Innovation

• More than the sum of bundled services

• Exponential increase in services
¾ Service Oriented Networks
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