© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Camille Mendler Vice President Telecommunications Strategies [email protected]

© Copyright 2006. Yankee Group Research, Inc. All rights reserved.

Camille MendlerVice PresidentTelecommunications [email protected]

Where’s The Money?New Carrier Business Models In the Age of Declining Greenfield Markets

NetEvents Global Press Summit Hong Kong© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Page 2December 1, 2006

• The industry struggles to break the status quo and post-2000 doldrums

• Emerging ecosystems accelerate service innovation potential and disrupt traditional business models

• Uncertain market demands drive increased service velocity

• Need to shift from a communication to a media and application focus for innovation

• Lofty investments in new entrant web players increase market uncertainty

What’s the way forward?

The Market in Review


Commerce CentricCommerce Centric

Amazon.com

eBay

Ad-Supported Search CentricAd-Supported Search Centric

Yahoo!Google

CE CentricCE Centric

Sling Media

Community CentricCommunity Centric

MySpace

Craigslist

Sina

Media CentricMedia Centric

BitTorrent YouTube

News Corp Apple

Network Communications Network Communications CentricCentric

Vonage

P2P Communications P2P Communications CentricCentric

AIM

Google Talk

Skype

Network CentricNetwork Centric

Vodafone

Verizon Wireless China Mobile Sprint

Telecom Italia France Telecom

Seeking Business Models in a Fluid EnvironmentDigital Media and Internet Disrupt The Status Quo

Comcast


Fragmented Markets and Business ModelsTraditional Subscriber-Centric Models Are Under Attack

AR

PU

or

Eq

uiv

alen

t

Number of Users

ARPU: $271.6 million

subscribers(YE 2005)

Vonage

ARPU: $5051 million

subscribers(YE 2005)Verizon Wireless

ARPU: $8.60247 million subscribers

(YE 2005)

China Mobile

ARPU: $2.70402 million subscribers

(YE 2005)

Yahoo!

Google

ARPU: ~$0.2075 million

subscribers(YE 2005)

Skype

Pure Equipment Sell: ~$200

Sling Media

Source: Company Annual Reports and Yankee Group

Comcast

ARPU: $5321.4 million

video subscribers

(YE 2005)

ARPU: Average revenue per user


Where Does Value Lie? Perceptions Differ Sharply

AR

PU

or

Eq

uiv

alen

t

Number of Users

Vonage

Verizon Wireless

Vodafone

China Mobile

Yahoo!

GoogleSkypeSling Media

Source: Company Annual Reports and Yankee Group

Value in the Subscriber

Value in the Community

eBayMySpace

YouTubeCraigslist

TIM

H3G

Sprint


Determining the Future: Who’s on Top?Option One - The Imperialists

Who: Telcos, wireless operators, cable cos

Business Model: Subscription

Primary Asset: Consumer context (location, services, profile, usage)The managed network

Devices: Terminal handset, set-top box, home gateway

Locus of Innovation: Internal

Image Source: Flickr


Determining the Future: Who’s on Top?Option Two – The Guerillas

Who: Portals, Web 1.0 survivors, Web 2.0 entrants, CE vendors, PC vendors, venture capital firms, millions of consumers

Business Model: Advertising supported, subscription, transaction, barter, no business model at all

Primary Asset: Audience, community, open standards

Devices: Laptops, PCs, game consoles, DVRs, web tablets, portable audio devices, portable video devices

Locus of Innovation: The crowd, the visionaries, the startup, the dormitory

Image Source: Flickr


Conclusions

• Business models – take your pick in today’s market• Quality vs. quantity in definition of value• In the words of Cole Porter: “Anything Goes”


Thank You

Camille MendlerVice PresidentTelecommunications [email protected]+44 (0)207 307 1085

For schedules, please visit our web site:

www.yankeegroup.co

m

Come and visit us at one of our upcoming Live! events or tune in to one of our free webinars.

November December

• December 4-8 ITU Telecom Forum (event); Hong Kong

• November 21 The Anywhere Consumer (webinar)

• December 7 The Economics of Delivering Triple Play to the Home (webinar)

• December 19 Managing and Securing the Anywhere Network (webinar)

• January 8-11, 2007 First Annual Mobile Broadband and Content TechZone at CES (event); Las Vegas, NV

January, 2007

• January 12 Evolution of the Anywhere Enterprise (webinar)

Documents

© Copyright 2006. Yankee Group Research, Inc. All rights reserved. Camille Mendler Vice President Telecommunications Strategies [email protected]