August 26, 2015

Alibaba & Tencent: China’s Digital Disruptors


We’ve just published a new research paper ‘Alibaba & Tencent: China’s Digital Disruptors’. Both Alibaba and Tencent have created formidable Internet ecosystems within China. However, the increasingly competitive Chinese economy is now slowing, and their continued growth depends on weakening the control of Google, Facebook and Amazon over the global digital commerce market. In the first of two reports on China, we examine Alibaba and Tencent’s services, business models, and aspirations, and explain how and why telcos should support their international expansion.

The report is part of the Dealing with Disruption stream, and you can read an excerpt of the report here.

For more information on any of our services, please email contact@telco2.net or call +44 207 247 5003.

Extract chart from the report:

China Blog Thumbnail.png

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August 19, 2015

Do network investments drive creation & sale of truly novel services?


We’ve just published a new research paper ‘Do network investments drive creation & sale of truly novel services?’. Enthusiasm for creating novel so-called “digital” services is pervasive in the telecoms industry. There is a major shift afoot in the way telcos create, integrate, sell and manage value-added propositions. But how much is enabled by - or dependent on - the network itself? In recent years, most investment has been solely for improved connectivity, but there are signs that future network capex might drive new service opportunities directly, rather than just by empowering 3rd parties.

The report is part of the Future of the Network stream, and you can read an excerpt of the report here.

For more information on any of our services, please email contact@telco2.net or call +44 207 247 5003.

Extract chart from the report:

Figure 1.png

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August 17, 2015

SDN Special: AT&T, Cisco, Google, Rift.io - Telco 2.0 News Review

AT&T: SDN is paying off already via faster sales cycles, CAPEX savings. MBB price cut. NSA surveilance.

John Donovan, AT&T’s technology chief, says their SDN transition is already paying off. For example, the cycle time to set up a new managed Ethernet link under their Network on Demand product is down 95%, to an average of 3 days for customers where no wiring work was needed and, perhaps even more impressively, down 82% to 15 days for customers where the carrier needed to pull fibre. Very interestingly indeed, Donovan suggests that their transition to SDN is also a transition to open-source software - the 75% SDN by 2020 target goes with another target of 50% open-source by the same time.

Continue reading "SDN Special: AT&T, Cisco, Google, Rift.io - Telco 2.0 News Review" »

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August 14, 2015

New Telco 2.0 Research: How Telstra Responded to Disruption

When Amazon Web Services began deploying in Australia, it was widely expected that the unique hosting ecosystem dominated by Telstra was about to go through a massive disruption. However, Telstra’s Network Applications & Services division is growing strongly, and the company’s groupwide EBITDA margin is comparable to that of Verizon Wireless. The following chart shows NA&S grew at a 22% annual clip from 2009 to end-2014.

telstra cloud aug 2015 figure 2.png

At the end of 2014, their combined Telco 2.0 businesses overtook fixed voice as a source of revenue.

telstra cloud aug 2015 figure 5.png

Telstra is a fascinating case study of strategic agility in a market with unique constraints and opportunities. In our latest Telco 2.0 Executive Briefing, Telstra: Battling Disruption and Growing Enterprise Cloud & ICT , we cover their strategic pivot from primarily reselling VMWare and Microsoft Office 365 to an “all of the above” strategy covering OpenStack and Cisco Intercloud technology, as well as VMWare vCloud and Microsoft Azure, and analyse their risky but innovative foray into e-health systems via the acquisition of Dr Foster.

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August 10, 2015

Nokia, Apple Music, Xiaomi, Carphone Warehouse, Bharti Airtel: Telco 2.0 News Review

Nokia staffs up with Android devs; Apple denies MVNO plans; Xiaomi production starts in India

The drumbeat about a Nokia re-entry to smartphones continues. Reuters reports that the company is aggressively signing up software engineers with Android skills and looking for joint-venture partners. Apparently there are no plans to resume manufacturing devices, which would be outsourced to the partner. This, of course, would be a disadvantage compared to Apple, Samsung, or Lenovo with their command of the supply chain. However, a software-focused strategy might be a way to get back in with minimal investment.

Apple, meanwhile, has vigorously denied planning to launch an MVNO building on the soft-SIM it introduced for recent iPads.

Continue reading "Nokia, Apple Music, Xiaomi, Carphone Warehouse, Bharti Airtel: Telco 2.0 News Review" »

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August 3, 2015

Nokia, OpenDaylight, Samsung, Euro Carriers, Robots: Telco 2.0 News Review

Nokia Q2s surge; ALU losing less; 359 OpenDaylight devs; SKT/Ericsson 5G cloud; VZW small cells

Nokia Networks’ Q2s are in and they’re impressively strong, with net sales up 9% year on year and net profits ahead 60%. Further, Nokia’s gross margin is now higher than Ericsson’s, suggesting that Nokia’s increasingly edge-focused product line is doing something for them. Nokia’s partner in the forthcoming merger, Alcatel-Lucent, reported that its Q2 generated positive FCF for the first time since 2006 - in other words, the original Alcatel / Lucent merger has taken an awfully long time to work out. Overall, revenue was down 8%, but if you exclude managed services and some other stuff, it was up 6%.

Why you should exclude managed services is another question.

Continue reading "Nokia, OpenDaylight, Samsung, Euro Carriers, Robots: Telco 2.0 News Review" »

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July 27, 2015

Q2 Explosion! AT&T, VZ, Telenor, China Tel, Amazon, Qualcomm, Apple: Telco 2.0 News Review

Carrier Q2s: AT&T saved by lower CAPEX and M2M volume; VZW, Telenor, China Telecom surge

Verizon Q2s are in. Wireless revenue was up 5.3% year on year, with 1.1m postpaid net-adds. Service revenue was down 2.2% as the general shift of emphasis from service pricing to device sales kicked in (device sales are up from $2.4bn to $3.9bn). 87% of wireless traffic is now on 4G.

AT&T, meanwhile, boasted of a 2m net-add quarter, “triple the 634k” recorded in Q2 2014, but on closer examination that included 1.4m M2M net-adds. The postpaid net-adds number was 410k, but this also includes 659k tablets, so the core business result was a net-loss of 249k phone subscribers. Ouch.

Continue reading "Q2 Explosion! AT&T, VZ, Telenor, China Tel, Amazon, Qualcomm, Apple: Telco 2.0 News Review" »

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July 22, 2015

The European Telecoms market in 2020, Report 2: 4 scenarios and 7 predictions


We’ve just published a new research paper ‘The European Telecoms market in 2020, Report 2: 4 scenarios and 7 predictions’. Seven predictions and four scenarios for how the industry might play out in Europe in the next 5 years: ‘Digital Renaissance’, ‘Back to the Future’, ‘Commoditised Utility’ and ‘Telco Trainwreck’. Plus what are the take-outs for other markets?

The report is part of the Executive Briefing Service and Telco 2.0 Transformation stream, and you can read an excerpt of the report here.

For more information on any of our services, please email contact@telco2.net or call +44 207 247 5003.

Extract chart from the report:

Future Europe Part 2 Cover.png

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July 20, 2015

Microsoft, Apple, Google, Huawei, Qualcomm, SKT: Telco 2.0 News Review

New STL Research: Ten forces shape the European telecoms market. Which ones will win?

Microsoft writes off Nokia but phones stay for now; pivoting to a comms-based business; Gigjam; Windows 10 updates

Microsoft bites the bullet and writes off the whole acquisition of Nokia Devices & Services. That’ll be $7.6bn, plus $800m in restructuring costs to pay off the 7,800 people who lose their jobs, so Microsoft has essentially lost every penny it put into the phones business back in 2011. Unsurprisingly, Stephen Elop has left the building. Satya Nadella, meanwhile, says:

I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.

Whatever that means (and Lucy Kellaway addresses this question at the FT). It sounds like the phones are staying, but emphasis is moving elsewhere - surely not to Windows Phone licensing, so more likely towards cross-platform apps and services.

Continue reading "Microsoft, Apple, Google, Huawei, Qualcomm, SKT: Telco 2.0 News Review" »

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July 15, 2015

The European Telecoms market in 2020: Evaluating 10 forces of change


We’ve just published a new research paper ‘The European Telecoms market in 2020, Report 1: Evaluating 10 forces of change’. In the first of two reports, STL Partners evaluates how several powerful forces, within and beyond the control of telcos, look set to change the shape of the European market and considers the options for how these might develop going forward. The forces covered are:

  1. Regulation
  2. Competition
  3. Revenue outlook (for core services)
  4. Technological changes
  5. Capital markets/investor attitudes
  6. Customer attitudes and behaviour
  7. Telco vision and aspirations
  8. Telco culture, skills, partnerships and assets
  9. M&A
  10. Absolute and relative capex and opex (compared with OTT players)

The report is part of the Telco 2.0 Transformation stream, and you can read an excerpt here.

For more information on any of our services, please email contact@telco2.net or call +44 207 247 5003.

Extract chart from the report:

Blog Thumbnail.png

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July 10, 2015

What do telcos need to do to be more agile?


Our latest research How to be Agile: Agility by Design and Information Intensity looks at how agile are telcos today, the barriers and opportunities, and what can be done to improve agility.

We found that the majority of telcos might be described as ‘moderately agile’, and critically, telcos need to move beyond wanting to be agile to taking actions in terms of how they are organised, how leaders and teams are empowered to make decisions, and the metrics they use. See more here.

The Majority of Telcos Profiled themselves as Moderately Agile
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July 6, 2015

APAC Special, NORMA, Fibre Race, no DISH, T-Drones: Telco 2.0 News Review

Chinese slowdown, but €1bn of orders for ALU; Bharti hits No.3; AWS opens in India

The Chinese market for smartphones, PCs, and tablets is expected to grow only 1.3% this year, as against 15.2% last year, according to IDC, and as we know, Apple has got its teeth into the bulk of it. Strategy Analytics concurs, arguing that Chinese smartphone penetration is rapidly converging on the same levels as in Europe and North America, and that therefore, what happens in India will determine what happens in smartphones over the next couple of years. Shipments there are expected to rise 43% this year and exceed those in the USA in 2017. That said, SA has also issued a forecast for 5G handset shipments before any 5G handsets exist, so perhaps a word of caution is in order.

In a new Telco 2.0 Dealing with Disruption report, we identify some of the most disruptive operators. Three of them are based in Asia. Get our in-depth coverage here

Continue reading "APAC Special, NORMA, Fibre Race, no DISH, T-Drones: Telco 2.0 News Review" »

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July 2, 2015

Telco-Driven Disruption: What NTT DOCOMO, KT and Globe got right


NTT Docomo earns 15% of its revenues from non-traditional sources, the largest proportion of any telco worldwide. Our latest ‘Dealing with Disruption’ stream research briefing ‘What NTT DOCOMO, KT and Globe got right’ looks at how DOCOMO did it, what did it learn, and what else can be learned from other telco attempts at disruptive innovation?

As they seek new sources of revenue, many telcos around the world are attempting to disrupt adjacent markets, such as digital commerce, IT, entertainment and financial services. While many of these moves have proved to be too little, too late, several disruptive plays have had a significant impact on both the telco’s revenues and relevance.

As well as NTT DOCOMO’s Smart Life portfolio, these include Globe Telecom’s GCash service and KT’s media business, as well as some of those we looked at in the first report in this series (which included BT Sport, SK Planet and AT&T Digital Life and others). Why do some disruptive moves by telcos succeed and others fail? More here.

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June 29, 2015

Gigabit Race; Sprint CTO; EU Regulators; Alexa Fund - Telco 2.0 News Review

The Gigabit Race: AT&T, Google, Centurylink, Bell, TalkTalk.

AT&T’s GigaPower FTTH rollout has expanded again, with the suburbs of Dallas and Fort Worth targeted with gigabit fibre. The exchange-side Optical Network Terminals (ONTs) are being provided as virtualised functions from their SDN deployment.

Meanwhile, Google has begun deploying fibre in Salt Lake City and Nashville, using the existing power poles. They’ve also started rolling out in Raleigh, North Carolina, this week.

Continue reading "Gigabit Race; Sprint CTO; EU Regulators; Alexa Fund - Telco 2.0 News Review" »

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June 24, 2015

Mobile Authentication: Telcos’ Key to the Digital World?


We’ve just published a new research paper ‘Mobile Authentication: Telcos’ Key to the Digital World?’. Mobile Authentication could be Telcos’ key asset in the digital economy, but they are in danger of losing out through insufficient action. There are good case studies and an excellent blueprint in the GSMA’s Mobile Connect initiative for how to monetise their assets and stay relevant. So why aren’t they getting on with it?

The report is part of the Executive Briefing Service and Dealing with Disruption stream, and you can read an excerpt of the report here.

For more information on any of our services, please email contact@telco2.net or call +44 207 247 5003.

Extract chart from the report:

Digital Identity Ecosystem.png

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Telco 2.0 Strategy Report Out Now: Telco Strategy in the Cloud

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