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©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 1
Current and Future Trends
Alexander NTOKO, Project Manager, ITU Electronic CommerceITU Telecommunication Development Bureau (BDT)Email: [email protected] Web: http://www.itu.int/ecdc
Basic E-Commerce Training For Pakistan
Pakistan Telecommunication Authority (PTA)Islamabad, Pakistan
31 March – 5 April 2001
International Telecommunication Union (ITU)
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 2
Agenda
The trend is ConvergenceThe platform is IPThe strategy is AllianceThe focus is ServicesThe future is MobileFrom dot.coms to dot.gones
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 3
Internet Trends
Phenomenal Growth Projections in all Regions.
New Types of Alliances and Partners.
New Business Models and Revenue Streams.
Core Platform for Convergent Services.
Reduced Set-up Costs for Start-ups.
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 4
The Platform is IP
Rapid Evolution in Several PlatformsFixed Networks (dial-up, ISDN, Satellite, leased line)
Digital Mobile Data Services (GSM, WAP, I-mode)
Streaming Media (WebTV, VoIP, Cable Modems)
Household Appliances (TVs, Microwaves, Refrigerators)
Wireless Access (PDA + Mobile, Bluetooth)
Broadband (xDSL, DWDM, UWA, 3G Mobile - IMT2000) Power-line Technology For Internet Access
Fixed Mobile Convergence (FMC)
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 5
The Trend is Convergence
Breaking Industry and Service BarriersBroadcasting Companies --> Voice and Network Services
Telecom Operators --> data network and financial services
Computing Companies --> Broadcasting (TV services)
Financial Institutions --> Data network access Services
Voice Services provided over data networks (VoIP)
Data Services over broadcasting networks (DVB)
Broadcasting services over data networks (WebTV, Radio)
Voice and Data Services over electrical power lines
TV Stations Using Web as another Distribution Channel - MMXI estimated 400% growth in access to TV Web sites
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 6
The Strategy is Alliance
No Single entity holds answer to puzzleBroadcasting Companies + Access Providers = TV-based Internet access and e-tailing
Content Providers + Network Carriers = Distributed Content delivery and Hosting
Mobile Operators + Financial Institutions + Software Firms = Mobile e-Payments
Fixed Operators + Broadcasting Companies = Voice Services via TV Networks
Energy Companies + xSPs = Powerline Internet Access
Operators + Financial Companies = ePayment Solutions
Small Businesses + Big Businesses =Survival
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 7
The Model is Services
Application Service Provisioning (ASP) Deploy, Host, Manage, Rent Access to Applications for businesses from a central location with security, availability and performance.
Issue: Finding the Right Position in the ASP Value Chain
1. Network Access Services (Network Connectivity)
2. Content Distribution Services
3. Community and Hosting Services
4. Business Productivity and Communications Solutions
5. Application Integration and Work-Group Solutions
Network --> Services --> Applications --> Content --> Portal
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 8
Strategies - NSP
Network Service/Access Provisioning (NSP) Reliable, low-cost, high speed access for Businesses and Consumers
Issue: Finding the model for reliable and affordable Internet Access to All.
1. Determine Appropriate Pricing Policy for Services
2. Take Advantage of New access Technologies
3. Forge Strategic Alliances with New Bread of Carriers
4. Migrate from Traffic to Content Delivery Services
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 9
The Forces of Changethe rapid rate of change of technologies and its falling costs,
the convergence of technologies, services and industries and the process of globalisation,
the phenomenal growth of the IP networks (e.g. Internet) and the proliferation of pervasive computing,
the emergence digital wireless mobile data services and technologies (Bluetooth, WAP, GPRS and IMT2000), digital TV, voice recognition, Internet appliances and Broadband IP (xDSL, DWDM, UWA) access,
the increase in mergers, alliances and powerful new players,
the breakdown of geographical, time and industry sector barriers,
are perpetuating the phenomenon of e-convergence and introducing new opportunities and challenges to developing countries.
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 10
E-Business Drivers
o Metcalfe’s Law of Connectivity: The value of a network grows exponentially with the number of nodes. As the number of nodes double the value of the network quadruples ( f(x) = x2 ) creating the conditions for e-business.
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 11
E-Business Drivers
o Moor’s Law: The performance of micro-processors (computing power) doubles every 18 months resulting in cheaper, faster and convergent technologies.
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 12
E-Business Drivers
o Better Shopping Options, Price Comparison, Cost-effective and Rapid Market Expansion.
o Drive to Streamline Business Processes and Customer Demands
o Search for New Revenue Streams by moving up the value-chain as Profits Margins for Voice Traffic Declines.
o Operators Capitalising on Customer-base and Investments.
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 13
The future is Bright. The future is Mobile
Rapid evolution towards Mobile Internet as high speed digital mobile services become widely available. From GSM to High Speed Circuit-Switched Data to General Packet Radio Service to Enhanced Data Rate for Global Evolution to International Mobile Telecommunications (IMT-2000) WAP, I-Mode already delivering Internet services to mobile subscribers.
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 14
M-Commerce
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 15
M-Commerce DriversHigh growth rate expected due to lower deployment cost and speed of deployment.
Mergers and alliances between mobile operators, equipment manufacturers and service providers creating opportunities for new services.
Convergence to IP as platform is facilitating access to existing IP-based services through WAP and I-mode.
Problems of low speed on 2G platforms and limited WAP services will be resolved as migration from circuit-switched to packet-switched networks continues.
Migration from time-based tariffs to volume-based tariffs will create opportunities for IP-based services and content.
Security (SIM and PIN codes) on Mobile terminals (as PSEs) encourage secure e-payment solutions.
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 16
M-Commerce Drivers
Falling prices for high speed processors and reduction in their sizes will transform mobile devices to powerful handheld computers.
Deregulation will increase competition and drive down prices for mobile services.
Pre-paid services will provide low-entry cost for subscribers but might have negative impact on operator revenues as customer loyalty reduces.
These drivers will affect the business models for operators as voice revenues decline.
… But they also present new markets for innovative operators and service providers what can capitalise on the opportunities brought about by these changes.
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 17
M-Commerce Services
Banking - Accounts, Statements, Bill payments and Fund Transfers
Payments - Credit cards, Micro payments and Pre-paid
Trading - Stock quotes, Notifications of events.
E-Government - E-voting and E-administration
Retailing – Subscription and Direct sales
Entertainment - Interactive TV and Live Music
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 18
Mobile Commerce Services
Security Services•Access Control
•User Authentication
•Digital Signatures
•Non-repudiation
•Data integrity
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 19
The dot.com euphoria
What Happened to the New E-conomy?
o Building market share and dominance was vital.o Long term future was justification for high share prices.o Cash and profits were secondary.o Unlimited cash injections from VCs and IPOs.o Business models too complex for VCs and investors.o Having an Internet strategy was a guaranteed component
for success.o More than USD 3 trillion lost when the bubble burst.
©1998-2001 ITU Electronic Commerce for Developing Countries (EC-DC). Page - 20
The dot.com euphoria
From bricks and mortar tobricks and clicks to clicks and clicks to bricks and clicks
Can these pitfalls be avoided?How does this affect e-commerce?