SDP Global Summit 2009

Assessing the Impact of New Internet Devices on Ope rators and the Delivery of Content

Martin ProšekVideo & Content Applications Technology DevelopmentTelefónica O2 Czech Republic

15 November 2013 SDP Global Summit 2009 London

Introduction

New mobile phones – Internet devices

Experience from one operator in one European country

Current reality – no “hype” or “bubble” – real customers behaviour

Focus on present and near future

Impact on operator, risks and threats

Expectations from SDP (and what SDP)

Monetization opportunities


About Telef ónica O2 Czech Republic

Telefónica O2 Czech Republic, a.s., is the first integrated operator in the Czech Republic, formed on 1 July 2006 by the merger of the leading fixed line operator, ČESKÝ TELECOM, a.s., and the strongest mobile operator, Eurotel Praha, spol. s r.o., into a single telecommunications organization. The organization is now operating more than seven million lines, both fixed and mobile, making it one of the world’s leading providers of fully converged services.

Telefónica O2 Czech Republic offers the most comprehensive portfolio of voice and data services in this country. Special attention is paid to the exploitation of the growth potential, particularly in the data and Internet sector. Telefónica O2 Czech Republic operates the largest fixed and mobile network including a 3rd generation network, CDMA (for data) and UMTS, enabling voice, data and video transmission. Telefónica O2 Czech Republic also runs the largest network of WiFi hotspots in the country.


O2 CZ Operational Highlights at the End of 2Q 2009

Telefónica O2 Czech Republic maintained solid commercial momentum in fixed and mobile segments in a slower market.

Total mobile customer base in the Czech Republic reached 4,835 thousand at the end of June 2009:

• Contract mobile customers in the Czech Republic grew 12.4% year-on-year to 2,663 thousand.

• Number of prepaid active customers reached 2,172 thousand.

Total number of fixed telephony accesses reached 1,804 thousand in 2Q 2009.

ADSL retail accesses grew to 634 thousand.

The total number of O2 TV customers reached 133 thousand at the end of June 2009.

FYI: Czech Republic population – 10.467 million


About Martin Pro šek

More than 10 years experience in the mobile VAS area.

Leading technical development department in Telefónica O2 Czech Republic.

Responsible for:• projects for new services/platforms

• planning and technical strategy

• involved also in service life-cycle (interacting with content partners)• management of handset capability repository

Areas:• Mobile Portal (WAP and Mobile Internet)

• Mobile Browsing Control

• Video Services (Mobile TV – streaming)• Mobile Advertising

• Mobile Phone Contacts Backup and Restore


CONSUMER OPERATOR

Devices Relation to SDP

Devices are one of 3 main parts of the service delivery environment.

Without end-user devices capabilities there is no service delivery.

OPERATOR

APPLICATIONSAPPLICATIONS

OtherBrowsing Content access& download

VoIPIP Messaging

SERVICE INTEGRATION / ORCHESTRATIONSERVICE INTEGRATION / ORCHESTRATION

NETWORKNETWORK

AAA

SERVICE ENABLERSSERVICE ENABLERS

IDENTITYMGMT& SSO

POLICYMGMT

USERPROFILE

PROVISIONING(API)

BILLING(API)

SERV MGMT(API)

CHARGING

CUSTOMERPROFILE

LOCATION

FRAMEWORK

3rd PartyServices

3RD PARTY FRAMEWORK

SERV SUPPORT

SERV CONTROLSIP

PROXYGROUP MGMT

GSM GPRS UMTS ( CS + PS) IMS (HSS, CSCF)

BSS &OSS

BSS &OSS

Fixed / DSL

DEVICE MANAGEMENTHANDSET

CAPABILITY

BROWSING

WAPPROXY

OPT’n

IP Messaging

PRESENCE

DEVICEMGMT

PORTALFRAMEWORK

DRM

SYNC

BASE APPLICATIONS

SMS MMS email

VoIPIP

CENTREX

APPLICATIONSAPPLICATIONS

OtherBrowsing Content access& download

VoIPIP Messaging

SERVICE INTEGRATION / ORCHESTRATIONSERVICE INTEGRATION / ORCHESTRATION

NETWORKNETWORK

AAA

SERVICE ENABLERSSERVICE ENABLERS

IDENTITYMGMT& SSO

POLICYMGMT

USERPROFILE

PROVISIONING(API)

BILLING(API)

SERV MGMT(API)

CHARGING

CUSTOMERPROFILE

LOCATION

FRAMEWORK

3rd PartyServices

3RD PARTY FRAMEWORK

SERV SUPPORT

SERV CONTROLSIP

PROXYGROUP MGMT

GSM GPRS UMTS ( CS + PS) IMS (HSS, CSCF)

BSS &OSS

BSS &OSS

Fixed / DSL


CAPABILITY


CAPABILITY

BROWSING

WAPPROXY

OPT’n

BROWSING

WAPPROXY

OPT’n

IP Messaging

PRESENCEIP

MessagingPRESENCE

DEVICEMGMT

PORTALFRAMEWORK

DRM

SYNC

BASE APPLICATIONS

SMS MMS email

VoIPIP

CENTREX

BASE APPLICATIONS

SMS MMS email

VoIPIP

CENTREX

PROVIDER


New Mobile Phones

New category of mobile phone – “Internet Devices”Almost every manufacturer offers it.

Evolved from smartphones – devices with Operating System (OS) and browser.

History:2001 early Nokia Communicators, first Windows CE phones and PDAs2002 Nokia Series 60 (e.g. Nokia 7650)

2004 Nokia 6680

2005 early Nokia N-series (e.g. Nokia N70) and E-series (e.g. Nokia E61)2006 Nokia N-series with Safari browser (e.g. Nokia N73, Nokia N95)

2007 Apple iPhone

2008 Apple iPhone 3G, RIM Blackberry 9000

2009 HTC TouchPro22010 ...?

Do not forget pioneering of Opera Mobile...


Capabilities of Internet Device

Fast data – 3G, WiFi

Big screen

Internet browserApplication execution environment

Keyboard/joystick or touch screen

Data storage or memory card slot

...


Mobile Phone Manufacturer Brands in O2 CZ Network August 2009

Nokia clearly dominates

Apple is the last noticeable brand

RIM, HTC and other Internet device vendors have unsignificant share

Siemens5%

LG3%

other brands and

unrecognized5%

Motorola2%

Apple1%

Nokia60%

SonyEricsson15%

Samsung9%


Device Types in O2 CZ Network August 2009

Unique mobile phones detected in O2 CZ network (figure includes inbound roamers).

Enhanced phones (with browser and no OS) have the biggest share.

Smartphones (with browser and OS) have the significant share that is growing.

Note: 16 % phones cannot use Internet at all! These are the old fashioned plain devices. No

browser16%

With browser and OS

10%

With browser

and no OS74%

No browserWith browser and no OSWith browser and OS


Device Types on O2 CZ Mobile PortalAugust 2009

Top 10 phones1. Nokia 6300 November 2006

2. Nokia 3110c February 2007

3. Nokia 6230i March 2005

4. SonyEricsson K550i February 20075. Nokia 2630 May 2007

6. SonyEricsson K750i March 2005

7. Nokia 5310 August 20078. SonyEricsson K770i August 2007

9. Nokia 6500 May 2007

10.Nokia 6070 February 2006

Without OS 93%

With OS7%

With OS Without OS


Popular Devices

Many devices are plain mobile phones – people like them!

Very popular are successors of popular Nokia 6310i – Nokia 6230i and lately also Nokia 6300. These phones are the enhanced.

Important is to not forget cheap phones – e.g. Nokia 1600 (in O2 CZ TOP 5)

And also extremely cheap phones sold by retail chains (Tesco, Lidl...)


Mobile Phone Market

Traditional players

Established manufacturers – Nokia, SonyEricsson, Siemens, Motorola, Samsung, LG...

Growing big Asian vendors – HTC, BenQ, Huawei, ZTE...

New players

IT equipment vendors – Apple, HP, Acer, Gigabyte, Lenovo...

No-name Asian vendors – Beijing, Doubao, Funai, Funkanlagen, Guo Wei, Hon Hai, Huang-Su, Giya, Changhong, Chi Mei, China, Kejian, Konka, Nanjing Panda, Newgen, Ningbo Bird, Peike, SangFei, Sewon, TransAsia, Xiamen, XunChi, Zhong Ling Modern, ZTC...


Mobile Phones Sold by O2 CZ






Mobile Data Modems Sold by O2 CZ


Mobile Devices Sold by O2 CZ

50 mobile phones

• 6 phones without browser

• 19 Internet devices• 6 Nokia smatphones (2 N-series, 3 E-series)

• 2 BlackBerry

• 6 Windows Mobile

• 3 Apple

3 UMTS data modemsNo

browser12%

With browser and OS

38%

With browser

and no OS50%

No browserWith browser and no OSWith browser and OS


Device Types in O2 CZ Network – share prediction

Plain mobile phones share will not decrease rapidly.

New Internet devices share will include netbooks.

Category of data modems is not covered but might significantly grow as well (security/surveilance, telemetry...).

0

10

20

30

40

50

60

70

80

90

100

2004 2005 2006 2007 2008 2009 2010 2011 2012

Years

Per

cent

age

Internet devices

Enhanced phones

Plain phones


What is New in New Mobile Phones?

Rather evolution than revolution.

New mobile phones supports new features or combine them by new way.

Traditional Internet features:

• Internet browsing

• E-mails reading

Content features:

• personalization (wallpapers, ring tones...)• music, video

New applications

• Google Maps, Latitude...• Mobile blogs, social networks support...

• Enhanced reality

• ...


Impacts on Operator

Client side enormously empowered, operators forced to bit-pipe.

Internet devices do not need any intelligence in network.

Demand for content will grow – but not from operators.

Data traffic will grow rapidly.

Recommendation – monetise existing assets and be Smart Pipe for 3rd party application.


Aspects of the Impacts

Growing traffic

• More influenced by operator pricing.

Leaking outside mobile network (to WiFi)

• WiFi coverage is spotty by principle, helps users to learn and not fear to use advanced services (get addict...).

Smart devices with application execution environment

• Operator must enable Smart Pipe to defend position in value chain.

Declining operator content delivery revenues

• Walled gardens are already the past (at least in Europe). If operator is not well established as content provider people tend to use independent providers or even more free Internet services.

Internet browsers• Operator must adapt at least own mobile portal pages (add rich pages).


Adaptation of Mobile Internet Pages – examples

WML 1.X (with images) XHTML simple

XHTML enhanced

XHTML for high-end devices

iPhone

WML 1.1 (text based)


Devices Interoperability

Thousands of device types sold to users already...

Thousands of device types sold each year...

Thousands of new device types developed each year...Interoperability a problem?

Problem when developing application on different platforms (J2ME, Symbian, WM, iPhone...).

Less problem for Internet browsing.

Still need of browser capabilities management – WURFL helps at the beginning.

Operator might provide service – device recognition, device capabilities... Can be monetized.


Coexistence of Internet Devices and SDP

What SDP is needed for Internet Devices?

SDP for on-line Internet browsing access channel → operator gateway (proxy).

Appending parameters to HTTP headers while browsing:

• device description,

• identity (MSISDN, hash/alias...),• user profile exposing (from CRM, user behaviour...),

• location,

• charging (WAP billing),• ...

Comparison of the browsing channel to traditional SDP interfaces exposal:

• not usable for messaging (SMS, MMS),• more usable for user profile transfer to server-side applications,

• more usable for payments – convenient, safe,

• reliable – user confirms the individual actions in browser, no provider acting as man-in-the-middle.


Proxy -based SDP for Browsing

Walled garden broken - portal becomes cross-sale tool for mobile internet tariffs and data packages (free portal services with LPM)

Smart Pipe services for content partners - new revenues opportunity.

On-line channel parameters selling (identity, device description, user profile...)

Mobile Payments across all operators in the country

Mobile Internet measuring (non GSMA approach...)

Proxy ServiceBus

ContentProviders

Adaptors

BSS/OSS

Network

B2BGateways

Mobile Devices

15 November 2013 Confidential

Questions?

Thank you

[email protected]