How a moribund industry might just save itself!

1. Telecommunications…
How to survive & prosper in:
The 21st Century
Peter Cochrane
ca-global.org COCHRANE
cochrane.org.uk a s s o c i a t e s

2. We live in a world where
change seems to be faster
by the day…
Stasis is a killer!
What we know for sure:
Those companies &
industries that hold
* Technology
onto the past always
* Competition
die….
* Customers
…won’t wait

3. 2000

4. 2000
It’s the software stupid

5. It’s the business model stupid
2000
It’s the software stupid

6. “…the only human that likes
change is a wet baby… and
even then they cry and scream
thro the process…”

7. IT = The nervous system of business
• Reduces cost Supports & empowers
• Automates processes • Management
• Improves efficiency • Marketing
• Mitigates risk • Sales
• Improves quality • Support
• Improves timeliness • Customers
• •
• •
Unfortunately the telecom industry is not seen
as a friend or even a contributor to all this!

8. Business change cycle…never ending!
Standby for the next cycle
Threat/
Competition Prosper
Opportunity/
Necessity for Survival
Change Refinement
Business
IT
Process Technology
Operations
Product/Service Innovation & Improvement - cost reduction

9. What is fundamentally
fuelling the heat of
change?

10. Decade-on-decade new, lower cost, and higher
performance computers emerge:
• Platform
• Interface to humans & the world
• Networking and/or interconnect structure
log (people per computer)
Electronic/electro
-mechanical
Mainframe
Minicomputer
Workstation
PC
Laptop
PDA
Explants & Implants in
everything & everyone?
Based on a slide by David Culler UC/Berkeley
year

11. Raw computing power alone has let us solve
many of the limiting problems from the past:
Spatial Processing
• Interference fundamentally limits efficiency
• Spatial processing mitigates self-interference
Adaptive
Antenna Base
Station

12. We now have all the technology to deliver an
infinity of bandwidth to almost any location…
…by fiber//re, radio and satellite…we can
simultaneously reuse, space, time, frequency
& wavelength….all the old limiters have gone!

13. Disruptive forces
Digitization of everything…… and exponential growth
Everything/one is getting connected…… and mobile
Devices are getting smaller, smarter…… and cheaper
Customer demand… and an explosion of broadband

14. A big mindset change in just 20 years!
< 1960/70
> 1980/90
Monopoly
Market
Me
Me
The supplier
It’s about ..
The customer

15. So what do Telcos have to do to…

16. So what do Telcos have to do to…
1) Recognize the changes that have happened

17. So what do Telcos have to do to…
1) Recognize the changes that have happened
2) Identify the changes about to happen

18. So what do Telcos have to do to…
1) Recognize the changes that have happened
2) Identify the changes about to happen
3) Look for the big opportunities

19. So what do Telcos have to do to…
1) Recognize the changes that have happened
2) Identify the changes about to happen
3) Look for the big opportunities
4) Change the business model

20. …and stop asking really dumb questions!

21. …and stop asking really dumb questions!
- How much bandwidth do we need?

22. …and stop asking really dumb questions!
- How much bandwidth do we need?
- What will people do with it?

23. …and stop asking really dumb questions!
- How much bandwidth do we need?
- What will people do with it?
- What are the killer applications?

24. …and stop asking really dumb questions!
- How much bandwidth do we need?
- What will people do with it?
- What are the killer applications?
- Can’t we do it all with wireless anyway?

25. …and stop asking really dumb questions!
- How much bandwidth do we need?
- What will people do with it?
- What are the killer applications?
- Can’t we do it all with wireless anyway?
- Haven’t we invested in too much fiber?

26. …and stop making really dumb assumptions!

27. …and stop making really dumb assumptions!
- Customer use/need is asymmetric!

28. …and stop making really dumb assumptions!
- Customer use/need is asymmetric!
- Customers will pay for connectivity!

29. …and stop making really dumb assumptions!
- Customer use/need is asymmetric!
- Customers will pay for connectivity!
- Network use can be controlled!

30. …and stop making really dumb assumptions!
- Customer use/need is asymmetric!
- Customers will pay for connectivity!
- Network use can be controlled!
- Content can be controlled!

31. …and stop making really dumb assumptions!
- Customer use/need is asymmetric!
- Customers will pay for connectivity!
- Network use can be controlled!
- Content can be controlled!
- Maximum penetration is 100%!

32. …and stop making really dumb assumptions!
- Customer use/need is asymmetric!
- Customers will pay for connectivity!
- Network use can be controlled!
- Content can be controlled!
- Maximum penetration is 100%!
- Government/Regulators understand !!!!

33. Everything moving to the edge?
Networks get dumber as the
periphery is getting smarter.
Almost everything can be done
better at the periphery rather
than in the core!

34. Fundamental threats & opportunities
Voice Services: Could be killed by VOIP
the Skype model
Network: Could be by-passed by wireless
WiFi, WiMax, et al
Network Services: Anyone can provide
netcos have little advantage

35. Fundamental threats & opportunities
Equipment: PCs + Laptops >> appliances
IT Dept unnecessary?
Security: Users more savvy & effective
Security Dept unnecessary?
Provision: Employees provide their own IT
Companies lose control?

36. From Telco Tesco/
Carrefour
Monopoly
22% Markets
Profit
Margin
Competitive
6% Markets
2% Retail Regime - hard nosed & hot!

37. Competitors are
coming from all
directions…
…with new and
unusual business
models..

38. The Web 2.0 clock
is ticking….
• Mobility
• Symmetry
• More bandwidth

39. What is Web 2.0?
Recent 1000 people survey:
* 13% didn‘t know what it was
* 87% said they knew what it was
but, nearly everybody came up with
a different description

40. Don’t worry…
Tim Berners Lee doesn’t know either
It seems to be a term coined by Tim O’Reilly in 2004

41. What Web 2.0? might be…

42. What Web 2.0? might be…
A distributed & global:

43. What Web 2.0? might be…
A distributed & global:
* Intelligence

44. What Web 2.0? might be…
A distributed & global:
* Intelligence
* knowledge base

45. What Web 2.0? might be…
A distributed & global:
* Intelligence
* knowledge base
* communal working medium

46. What Web 2.0? might be…
A distributed & global:
* Intelligence
* knowledge base
* communal working medium
Connecting all:

47. What Web 2.0? might be…
A distributed & global:
* Intelligence
* knowledge base
* communal working medium
Connecting all:
* People

48. What Web 2.0? might be…
A distributed & global:
* Intelligence
* knowledge base
* communal working medium
Connecting all:
* People
* Devices

49. What Web 2.0? might be…
A distributed & global:
* Intelligence
* knowledge base
* communal working medium
Connecting all:
* People
* Devices
* Things

50. What Web 2.0? might be…
A distributed & global:
* Intelligence
* knowledge base
* communal working medium
Connecting all:
* People
* Devices Fixed and mobile
* Things

51. What Web 2.0? might be…
A distributed & global:
* Intelligence
* knowledge base
* communal working medium
Connecting all:
* People
* Devices Fixed and mobile
* Things

52. What Web 2.0? might be…
A distributed & global:
* Intelligence
* knowledge base
* communal working medium
The intelligent web…harnessing collective
Connecting all:
data, information, knowledge & intelligence
* People
* Devices Fixed and mobile
* Things

53. Most critically…
* Information
* Knowledge
* Wisdom
All move to
the edge…&
become mobile!

54. So who is in pole position to
satisfy this growing need?

55. Future Competition??
Competition changing market and customer expectations
Internet
Search Google.com
IM/VOIP Google Talk
Google Base Convergence
WiFi
Free WiFi
IT portal
ICT GoogleBox
services
WiFi Customer
VOIP TV/Vision
BlackBox Ad Growth
VOIP WiFi Fixed - Mobile Fusion
Broadband
PSTN
POTS/2.5/3G
Mobile
2005
2007
2008
2009

56. We can expect to see more:
- Device variants
Clients
- OS variants
- Applications
- Mobility
- Churn
Thinner & smarter clients give
us an almost natural solution

57. Everything is becoming a
commodity…
•Profits squeezed
•Margins eroded
•More competition
•Fickle customers
This will automatically lead
to consolidation - more
M&A activity

58. Broadband perception
Telco Marketing Model
Customer Experience

59. What should we be doing?
- Move to all IP networks
- Get out of billing - or get into banking
- Move to symmetric broadband
- Start the migration to >100Mbit/s
- Roll out VOIP
- Reduce the number of net nodes by >90%
- Drastically reduce staffing
- Introduce new services - hit the competition
- Buy up ISPs
- Change the business model

60. Go with the latest,
most efficient tech,
to…realize greater
efficiency & savings,
& even greater
effectiveness!

62. Stop installing copper and roll out
optical fibre everywhere!

63. So, how in 1986 did FTTH cost in?

64. So, how in 1986 did FTTH cost in?
Not by simple minded upfront costing!

65. So, how in 1986 did FTTH cost in?
Not by simple minded upfront costing!
But by whole life costing… by taking
advantage of every aspect of fiber!

66. Costing in for FTTH …

67. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults

68. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults
2) Employees in network ~ 25% of faults

69. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults
2) Employees in network ~ 25% of faults
3) Remote routing of fiber saves ~ 95% work

70. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults
2) Employees in network ~ 25% of faults
3) Remote routing of fiber saves ~ 95% work
4) Fibre reach removes electronics

71. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults
2) Employees in network ~ 25% of faults
3) Remote routing of fiber saves ~ 95% work
4) Fibre reach removes electronics
5) Switch nodes/building stock reduced >90%

72. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults
2) Employees in network ~ 25% of faults
3) Remote routing of fiber saves ~ 95% work
4) Fibre reach removes electronics
5) Switch nodes/building stock reduced >90%
6) Reduced OSS & BSS systems & costs

73. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults
2) Employees in network ~ 25% of faults
3) Remote routing of fiber saves ~ 95% work
4) Fibre reach removes electronics
5) Switch nodes/building stock reduced >90%
6) Reduced OSS & BSS systems & costs
7) Energy costs reduced by >50%

74. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults
2) Employees in network ~ 25% of faults
3) Remote routing of fiber saves ~ 95% work
4) Fibre reach removes electronics
5) Switch nodes/building stock reduced >90%
6) Reduced OSS & BSS systems & costs
7) Energy costs reduced by >50%
8) Staffing reduced by > 80%

75. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults
2) Employees in network ~ 25% of faults
3) Remote routing of fiber saves ~ 95% work
4) Fibre reach removes electronics
5) Switch nodes/building stock reduced >90%
6) Reduced OSS & BSS systems & costs
7) Energy costs reduced by >50%
8) Staffing reduced by > 80%
9) Lead, copper & plastic recovered = $$ income

76. Costing in for FTTH …
1) Water ingress in copper ~ 50% of faults
2) Employees in network ~ 25% of faults
3) Remote routing of fiber saves ~ 95% work
4) Fibre reach removes electronics
5) Switch nodes/building stock reduced >90%
6) Reduced OSS & BSS systems & costs
7) Energy costs reduced by >50%
8) Staffing reduced by > 80%
9) Lead, copper & plastic recovered = $$ income
10)Year-on-year OPEX fall with new tech

77. The worst thing we could do?
Continue to do what we have
always done, because we will
continue to get what we have
always got….

78. BIG predictions…

79. BIG predictions…
Positioning systems >> Communications

80. BIG predictions…
Positioning systems >> Communications
SensorNets >> All Nets

81. BIG predictions…
Positioning systems >> Communications
SensorNets >> All Nets
PodCasting >> TV & Radio

82. BIG predictions…
Positioning systems >> Communications
SensorNets >> All Nets
PodCasting >> TV & Radio
Thin Clients >> Thick Clients

83. BIG predictions…
Positioning systems >> Communications
SensorNets >> All Nets
PodCasting >> TV & Radio
Thin Clients >> Thick Clients
Home Creativity >> Office Creativity

84. BIG predictions…
Positioning systems >> Communications
SensorNets >> All Nets
PodCasting >> TV & Radio
Thin Clients >> Thick Clients
Home Creativity >> Office Creativity
Robots >> People

85. BIG predictions…
Positioning systems >> Communications
SensorNets >> All Nets
PodCasting >> TV & Radio
Thin Clients >> Thick Clients
Home Creativity >> Office Creativity
Robots >> People
Machine Decisions >> People Decisions

86. A world of opportunity & risk….
Thank you,
cochrane.org.uk
ca-global.org
COCHRANE
a s s o c i a t e s