Analysys Mason capability overview
Delivering profitable small screen strategies
Amrish Kacker
Dec 2010
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Contents
Key issues
Strategic options
Analysys Mason overview and relevant expertise
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The mobile data opportunity exists in both dongle broadband
and handset data
Framework for mobile data: dongle broadband and handset data
Mobile broadband traditional
Internet services
Entertainment
Information
Communications
Mobile music
Mobile video
Email
Mobile applications, games and personalisation
Data access (including browsing, social networking, etc.)
Devices: smart phones / feature phones / basic phones,
white-box versus branded
Platforms: advertising, m-commerce / payments, data
back-up, user interface
Big screen experience: dongle,
embedded devices
Small screen experience: handsets
Network access technologies: HSPA, Wi-Fi, WiMAX, DVB-H, etc.
Network core / transmission technologies: fibre, microwave, etc.
This presentation focuses on small screen data - access and apps / games
/personalisation. The big screen opportunity is covered in a separate document
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The low active user base, but high revenue yield, provides
strong motivation for developing an app store business
Active user base for non-voice services
Revenue for data services
X 10
10.00
SMS
Revenue yield ( USD / mb)
Ringtones/images
Caller tunes
Data access
Free games/apps
download
Mobile music
X 10
0.10
< 1% across the user
base / 60% for
iPhone users
Paid games/apps
download
0%
1.00
20%
40%
60%
% active users
Developed markets
Developing markets
Source: Analysys Mason project, M:Metrics
80%
0.01
Dongle
data
access
Handset data
access
Apps
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5
100%
Voice / SMS only
(no GPRS)
% of installed base
Proprietary ‘closed’
OS – Java-based
(MIDP 2.0 / MIDP 1.0)
36%
80%
57%
60%
46%
40%
37%
20%
Open OS – S60, iPhone,
Android, Windows,
BlackBerry, etc.
18%
0%
6%
2009
Smart phones
Feature phones
2013
% feature phones installed base
Distribution of handsets: emerging Asia
60%
% installed base of smartphones
Feature phones will constitute 50% of the installed device
base by 2013 – device fragmentation is a challenge
70%
Basic phones
50%
40%
30%
20%
10%
0%
Top 10 models
Top 20 models
Top 10 models
Top 20 models
60%
50%
40%
30%
20%
10%
0%
• 25–50% of feature phones and basic phones are ‘white-box’ handsets
• ‘White-box’ handset profiles are typically unknown (e.g. supported Java libraries for apps)
Source: Analysys Mason project
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Handset data yields are declining as well so apps / content
can help manage yields
1,800
4.0
1,600
3.5
1,400
3.0
1,200
2.5
1,000
2.0
800
Challenges to profitability in mobile data
Yield (NOK/MB)
Traffic (GB thousand)
Norway case study: handset and dongle
Internet traffic and yield* (1H 2008 and 2009)

Dongle revenues have grown 75%, but traffic has
increased 175% – dongle revenues are growing
faster in emerging markets

Handset revenues have grown a mere 10% while
traffic has more than doubled, decreasing yields

Dongle traffic is 10 times the handset traffic,
implying significantly more capex (and at much
lower yield)
1.5
600
1.0
400
200
0.5
0
0.0
1H 2008

1H 2009

Traffic: Handset
Yield: Handset
Handset yields are 9 times the dongle yields –
similar ratios exist for emerging markets
Traffic: Dongle
Yield: Dongle
Handset and dongle yields have both declined
36% and 48% respectively in the last year
(*) Yield is calculated on a revenue/MB basis
Source: Analysys Mason, Norwegian Post and Telecom Authority
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This presentation focuses on delivering a profitable
mobile dongle service through three effective initiatives
Framework for mobile data:
dongle broadband and handset data
Mobile broadband
traditional Internet services
Entertainment
Information
Key initiatives to deliver mobile data
Commercial initiatives to understand and deliver
mobile broadband profitability
Communications
Mobile
music
Mobile video
Email
I
Assessing the market opportunity for handset data
and identifying winning business models
Mobile applications, games and
personalisation
Data access (including browsing, social
networking, etc.)
II
Devices: smart phones / feature phones /
basic phones, white-box versus branded
Platforms: advertising, m-commerce /
payments, data back-up, user interface
Big screen experience:
dongle, embedded devices
Enabling the key drivers for handset data –
pricing, device, user interface and app stores
Network optimisation initiatives to offload traffic
and optimise backhaul costs
Small screen experience: handsets
Network access technologies: HSPA, Wi-Fi, WiMAX, DVB-H, etc.
Network transformation through network / RAN
share for improved cost economics
Network core / transmission technologies: fibre, microwave, etc.
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Contents
Key issues
Strategic options
Analysys Mason overview and relevant expertise
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9
Assessing the drivers for addressing the opportunity
Framework for market opportunity
Operator drivers
Others (Music
/ Video / etc)
Services
a
Personalisation /
Games/Apps
b
c
Access /
Internet
1
User habits
Dongles / Embedded
Basic phone
Feature phone
UI / Discoverability
App store
Data pricing
Smart phone
Handsets
2
Devices
Network advances
3
Device capabilities
Market drivers
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Ongoing market trends drive and constrain the
opportunity
2
1
3
Network advances
User habits
Largest global mobile data traffic =
HTTP streaming
Device capabilities
LTE (2x20MHz)
100%
LTE (2x5MHz)
36%
HSPA+
19%
29%
HSUPA
19%
27%
HSDPA
% of installed base
80%
57%
60%
46%
40%
37%
20%
W-CDMA
HTTP Streaming
HTTP Download
VoIP & IM
HTTP browsing
P2P
Other Apps
EDGE
18%
0%
6%
2009
Smart phones
Feature phones
2013
Basic phones
GPRS
GSM
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Operator drivers need to be assessed in depth
a
UI / Discoverability
c
b
App store
Data pricing
End-users
iPhone
Home
Screen
Widgets
Aggregate
widgets +
Store front
Payments
+ live
updates
Aggregate
widgets
Network /
Subscriber
Intelligence
Application
platform
Application
delivery
framework and
development
support
Zero-click
access
Idle
Active
Mode of use
Store front-end
Commercial /
Marketing
agreements
Premium drivers
Extent of involvement
ODP
Social
networking
Device
specific
Marketplace
Development Environment
Application Development: Aggregators / Developers
Heavy data
users
Usage
(Apps/
Volume)
Bandwidth
Application acquisition
Occasional
data users
Time
limited
Dongle
Stand
alone
Add-on
to Voice
Bundled
with voice
Service offering
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The content in emerging markets needs to innovate with
different channels of delivery
Current app
store focus
Evolving developed market
operator app store
Download +
device
capabilities
Download +
packet data
Smart
phone
Device type
b
Evolving app stores for
emerging market
Feature
phone
Basic
phone
IVR*
SMS
Download +
network API
Delivery channels
*IVR = Interactive voice response
Source: Operator websites, Apple, Ovi
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Contents
Key issues
Strategic options
Analysys Mason overview and relevant expertise
Ref: 6644-206
14
Contents
Key issues
Strategic options
Analysys Mason overview and relevant expertise
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15
Analysys Mason is the world’s premier adviser in
telecoms, IT and media providing an integrated offering
Global presence and experience
Integrated service offering
Strategy
Planning
Market
intelligence
Review
Assignments completed
Implementation
Analysys Mason office

Through our global presence, we deliver strategy advice, operations support and market intelligence to leading operators,
regulators, financial institutions, broadcasters, vendors and enterprises in over 80 countries

Our people have had a major influence on the industry for more than twenty years
w
led the liberalisation of telecoms across Europe and Asia, and mediated in policy issues for operators and regulators
w
supported several hundred transactions and licence acquisition processes for operators and financial institutions
w
provided strategic and operational support to major operators in the roll-out and expansion of businesses across the
sector, enhancing enterprise value
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Overview of capabilities and experience
16
Analysys Mason bring unique skills in content services,
group-wide strategy and local expertise
Experience in mobile content
Experience in group-wide initiatives
• Our team has vast experience in the mobile
applications business. Our team members have
direct experience of established applications
standards, securing commercial rights to major
global brands for use in mobile, designing,
implementing and operating application
development and distribution IT solutions, and
negotiating operator distribution agreements
• We have worked on a wide range of groupOur skills and
experience
wide initiatives, from development of group
strategy to traffic and cost modelling to group
wide procurement
• We can draw on this experience to ensure
that our recommendations take account of
group-wide issues and gain buy-in across the
group
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Overview of capabilities and experience
17
Analysys Mason has substantial experience in
applications and platforms [1/3]
Project focus
Client
What we achieved
Developing a group
Regional Mobile
initiative for an
operator
Application ecosystem
For a major mobile operator group, we assessed the potential benefits and risks of adopting a
group-wide approach to developing a mobile application programme, both commercially and
technically. This involved a detailed review of the business models for app stores, visits to each
of the operating companies to assess their current approach and initiatives on mobile
applications (and VAS in general), and a review of technical capabilities across the group
Advice on market
opportunity and
product strategy
3D graphics
applications
company
For a 3D graphics software company, we provided an overview of intellectual property licensing
precedents in the area of mobile communications devices. The client used our work as input to
its negotiating strategy with potential customers, who were seeking to use the client's 3D
graphics software in mobile phones for applications such as mobile gaming and m-commerce.
In addition we reviewed the product positioning in a mobile entertainment value chain and
estimated revenues as part of its negotiations with mobile operators
Handset technology
assessment
Handset
manufacturer
Supported a global handset vendor in the assessment of key technologies as part of a process
to validate the integrity of its technology database. The project assessed new technologies that
are being driven by handset vendors, operator services and platforms, and proprietary
technology vendors. The results of the project were a critical input to the client's development of
a technology roadmap for handsets
Assessment of new
online competitors
US mobile
operator
Provided an overview of the competitive threats from the key major online players, including
Google, as a basis for the mobile operator to assess the threat and opportunity from the new
entities in the mobile applications space
Assessment of mobile Investment
video content software company
For an Asian investment company, we assessed the commercial readiness of a software
system that allows video content to be displayed on certain types of mobile phone. Our work
enabled our client to verify that the video player could be installed on a phone not owned by the
software developer and could be used to view video content while away from the developer's
facility
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Overview of capabilities and experience
18
Analysys Mason has substantial experience in
applications and platforms [2/3]
Project focus
Client
What we achieved
Validation of product
features for
middleware platform
Platform provider
We supported a mobile middleware platform provider in validating its product feature set. The
process involved comparing the existing features against those of selected competitors as well
as understanding the commercial deployment of key technologies on which the features
depended. An additional output from the project was the identification of key issues for the
overall product portfolio and target segments. The results of the project were a critical input for
the client in the finalisation of its overall product and market strategy
Review of provider of
mobile application
platforms
Equity investor
On behalf of an equity investor, conducted a high-level review of a company developing an
infrastructure-based platform for the provision of wireless services (applications and content) to
mobile operators. The project involved looking at competition in the wireless services market in
Europe, assessing the management and business plan of the company and evaluating the
issues involved in applying the concept outside Europe. Our work informed the investment
decision of the client
Evaluation of mobile
multimedia service
provider
Venture capital
company
Evaluation of the business proposition of a mobile multimedia data services provider on behalf
of a venture capital company. The project involved a meeting with the potential investee to fully
understand its technology as well as the business proposition. The results of our work
highlighted the opportunity that was offered by the technology, and also raised critical
questions that needed to be addressed for greater clarity on the magnitude of the opportunity
Feasibility study on
mobile advertising and
premium content
Platform company
Study focused on the major European markets as well as two major Asian markets with specific
focus on understanding the attractiveness of the service to advertising agencies and content
providers. The approach included collation and analysis of public information as well as
interviews with advertising agencies and content providers. The output of the project was a
market sizing of the service, discussion around potential business models, as well as a
qualitative assessment of the benefits and concerns as perceived by the potential users
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Overview of capabilities and experience
19
Analysys Mason has substantial experience in
applications and platforms [3/3]
Project focus
Client
What we achieved
Market entry strategy
Mobile content
operator
For a leading Japanese mobile content provider, Analysys provided advice on the European
market. Using scenario planning techniques, we developed a market entry strategy for our
client. This included an assessment of how the client could utilise its position in the Japanese
market to its benefit in Europe, advice on the initial countries to target, and an analysis of the
attractiveness of various potential partners in Europe, including media companies,
entertainment platform providers, mobile portals and network operators
Mobile entertainment
platform market
Mobile
entertainment
company
For the Board of a Finnish mobile entertainment company, we presented our view on key
trends in the mobile entertainment market, with particular reference to the critical success
factors for mobile entertainment platform providers. Our presentation stimulated strategic
debate with the Board members, as part of a fundamental strategy review
Assessment of
Media company
revenue potential of
mobile content delivery
For a leading media group, assessed the potential revenue models for the delivery of content to
mobile phones in the UK. This study involved assessing the value of the client's content to its
potential customers, benchmarking current market practices, developing a comprehensive set
of potential revenue models and recommending the most attractive options for the client's
immediate needs
Review of mobile
content availability
In partnership with Network Strategies Limited, supported the Australian Broadcasting Authority
(ABA) in its efforts to better understand the market for new mobile services. The objective of
the project was for the ABA to acquire a deeper insight into the availability of different types of
adult content and potential options for managing access to eligible individuals. We provided an
overview of key developments in the European and Asian markets, including key regulatory
initiatives
Media regulator
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Overview of capabilities and experience
20
We also have substantial experience working on
group-wide initiatives [1/2]
Project focus
Client
What we achieved
Regional mobile data
strategy
Regional group
operator
Analysys Mason supported Group Strategy with the development of a regional group strategy
for data services. The project defined the market opportunity and the role for the Group in
accelerating the take-up of profitable services
Cost modelling and
product profitability
analysis for multicountry service
provider
Worldwide
telecoms service
provider
Analysys Mason specified, designed and implemented a a network costing and product
profitability analysis tool for a global telecoms service provider to improve its understanding of
product profitability and inform its discounting policy on particular bid decisions for bespoke
network solutions. Successful completion of the project required close interaction with
stakeholders throughout the organisation and across numerous countries to specify the precise
outputs required, a practical calculation methodology involving a feasible set of inputs, and a
robust technical approach.
The project outputs were used to prioritise cost improvement programmes and inform bespoke
bid decisions, which we estimate will improve annual profitability by GBP10 million. The client
appreciated our careful handing of the cross-organisation buy-in and change management
process as well our commitment to deliver results within tight internal deadlines. The project's
success was recognised at the highest levels within the organisation
Development of a
group-wide
procurement and
contacts function
Middle Eastern
telecoms operator
Analysys Mason was commissioned by a Middle East operator to establish and implement a
group-wide procurement and contracts function. The work required engagement with the
client’s network operations in 16 countries to discuss the impact of implementing group-wide
procurement on their local purchasing and supply chain organisations and to plan for their own
alignment with new group function. Analysys Mason delivered an impact study and route-map
to manage the required changes in all 16 operators. We were subsequently appointed to be
responsible for the programme management of changes across the various subsidiaries
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Overview of capabilities and experience
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We also have substantial experience working on
group-wide initiatives [2/2]
Project focus
Client
What we achieved
Market entry strategy Pan-European
Analysys Mason supported a pan-European networking solutions company in developing a
for packaged
networking
market entry strategy for packaged solutions in Europe. The objective of the project was to
solutions
solutions company assess and prioritise the opportunity for packaged WAN/LAN solutions in different European
markets. The prioritisation framework was used to assess the risk and opportunity in developing
packaged solutions. Recommendations for market entry included assessing whether a LAN or
WAN based entry was the most appropriate to exploit the opportunity
Cross-country total
cost of ownership
analysis
Multi-country
mobile operator
For a major mobile operator operating across a number of countries in Europe, we examined the
total cost of ownership (TCO) of its business voice solution for small and medium businesses in
Spain, Italy, UK and Germany. We commissioned a survey of eighty representative companies,
which provided us with data about their current telephony infrastructure, usage and expenditure.
Based on this, we developed a series of case studies comparing the total existing fixed and
mobile telephony spend of typical businesses with the cost of equivalent provision using our
client’s solution. These case studies were designed to form the basis for marketing collateral.
They also provided valuable information to our client concerning the characteristics of
businesses which would be most likely to benefit from its voice solution
Group procurement
of IT systems and
infrastructure
Hutchison 3G UK
Analysys Mason managed the end-to-end procurement of major IT systems and infrastructure on
behalf of the Hutchison 3G Group. Responsibilities included the collation of all requirements and
specification information, alignment and rationalisation leading to the creation of a joint RFP that
met the needs of all the participating companies. We were also responsible for managing various
inputs for the joint evaluation and subsequent negotiations with preferred suppliers
Due diligence of
individual country
operations
International
mobile operator
Due diligence of an international mobile operator with several operations in Western Africa for an
international private equity fund. The project involved carrying out management interviews in
each of the countries of operation. We also reviewed each operation: the market, the regulatory
and technical background, and conducted benchmarks with similar operations in comparable
countries to provide an opinion on the reasonableness of the business plans under review for
each market
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Analysys Mason Pte Ltd
#10-02 Robinson Centre
61 Robinson Road
Singapore 068893
Tel: +65 6493 6038
Fax: +65 6720 6038
www.analysysmason.com
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