E-Business in Telecommunications:
The Impact of the Internet on the Communications Industry
April 13, 2000
Contents
• Introduction - impact of the Internet on the communications industry
• Household Market
• Corporate Market
Notice: PricewaterhouseCoopers Proprietary Information. Not for use/disclosure outside PwC except under written agreement.
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Introduction
Despite playing a leading role in providing services for the Internet, the
telecom industry lags other segments in generating revenues through EBusiness initiatives
E-Business Revenues by Industry
- 2003 Projections -
40%
Source: Business Week
37%
30%
Percent of
Total
20%
Industry
Revenues
17%
12%
10%
6%
6%
5%
0%
E-Business
Market Size
Computing &
Electronics
Travel
$410B
$67B
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Energy
Financial
Services
Retail
Telecomms
$170B
$80B
$108B
$15B
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
4-Box Model
PwC uses a 4-box model to explore the implications of the Internet within the
telecom industry
Degree of change to business model
PwC’s 4-Box Model
Restructuring the value chain to
create ‘many-to-many’ relationships,
new value propositions & new
business models
Box 4:
Convergence
Transformer
Companies entering new industry
sectors and competing outside of
their core business areas
S
E
Box 3:
Industry
Transformation
Connections with trading partners
and process changes across the
value chain
C
Box 2: Value Chain Integration
Enabler
S
E
Enhancing current channels and
adding new channels to market
C
Box 1: Channel Enhancement
Enabler
Transformer
Role of E-Business
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E-BizTelecom021100, 3/12/2016
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E-Business as an enabler
Planned Activities
Current Activities
Our recent survey of telecom companies in the US and Europe revealed that
E-Business investments are focused almost entirely on channel enhancement
and value chain integration activities
Box 1:
Box 2:
Channel
Enhancement
Value Chain
Integration
• Bill presentment, review,
payment
• Self-service inquiries
• Individual product sales
• Order entry and status
• Employee enrolment
• Performance monitoring
• Online account management
• E-procurement
• Electronic catalogues
• Account profiles
• Account access
• Product info/training
• Real-time inventory and
transactions
• Web-based CRM
• Integrated order provisioning
• Network performance
• Integrated purchaser/
vendor
• Network activation
• Capacity provisioning
• Real-time cross-selling
• Virtual reps
• E-HR (salary/
benefits admin)
• Financial and sales
management and
reporting
Source: PwC Survey of Telecom E-Business Plans
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DRAFT - For Discussion Purposes Only
E-Business as a transformer
We anticipate significantly more Box 3 and Box 4 activities as the industry
transforms through the adoption of current and future E-Business
applications
Box 3:
Industry
Transformation
• Personalization and
recommendations
across broad service set
(wholesale and retail)
• Price buyer services
• Personal router
management
• Traffic geolocation
mapping
• Network E-products
• Multi-provider tracking
• Billing aggregator
• Total network inventory
analysis and
marketplace (public,
competitor, corporate)
• 3G wireless infocom
applications
Box 4:
Convergence
• Home network
services provision
• Household services
management
• Integrated infocom
services provision
• Personal infocom
services
management
• Applications and
coms service
hosting and
provision
Sources: PwC Survey of Telecom E-Business Plans, PwC Telecommunications
Industry Visioning, internal review of E-Business activities across industries
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5
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Impact by market segment
The impact of the Internet should be analyzed by market segment, given
fundamental and increasing differences among the household, corporate and
mobile segments
Mass Market
Corporate
Mobile
• The skills and products needed to
serve business customers are now
very different from those needed to
effectively serve the mass market
• The introduction of new services
(advanced data services in business
markets, mobility, Internet access,
etc) in both markets has resulted in
differing end-user requirements for
both groups
Products
Skills
Competitors
Value Chains
Geographic Scope
Network
Branding / Bundling
Processes
Key Success Factors
Valuation Metrics
• The geographic focus of the market
segments differ - mass markets are
more local, corporations are more
global
• In addition, the operational demands
associated with effectively serving
customers with complex product
requirements are very different
Today we will focus on the Mass Market and Corporate Market
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
We will explore three areas related to the impact of the Internet on the
communications industry
The Internet as a ...
Customer segments
source of demand for
telecom
products/services
Mass Market
• Services
• Access
• Applications
enabler
transformer of business
models
Buyers
Sellers
Exchanges
S
E
C
Auctions
Supplier Enterprise Customer
Aggregators
Corporate
• Telecom services
• Professional services
• Backbone capacity
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S
E
Tomorrow’s Business
Focus
C
Supplier Enterprise Customer
Today’s Business
Focus
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
The Internet as a ...
Customer segments
source of demand for
telecom
products/services
Mass Market
enabler
transformer of business
models
• Services
• Access
• Applications
Corporate
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Consumer spending
Consumers have over the past 10 years increased their spending on
telecommunications services as a percent of total household spending from
2.76% to 3.57%, belying the notion that telecommunications is a utility category
Monthly Spending per US Household on Telecom
Services (1940-1998)
1996 Real $
$140.00
• Consumer spending on core
telecommunications products has
outstripped underlying economic
growth by a factor of two, three and
sometimes four
• Since 1978, spending on multichannel television services has
grown more than 14% per year, with
cable penetration standing at over
66% in 2000
$120.00
$100.00
$80.00
• Internet usage has increased from
20% of households in 1997 to 30%
of households in 1999. This number
is expected to double over the next
5 years, reaching over 60% by 2003
$60.00
$40.00
$20.00
19
4
19 0
4
19 2
4
19 4
4
19 6
4
19 8
5
19 0
5
19 2
5
19 4
5
19 6
5
19 8
6
19 0
6
19 2
6
19 4
6
19 6
6
19 8
7
19 0
7
19 2
7
19 4
7
19 6
7
19 8
8
19 0
8
19 2
8
19 4
8
19 6
8
19 8
9
19 0
9
19 2
9
19 4
9
19 6
98
$0.00
Telephone Service
Cable Service
Cellular Service
Internet Access
Satellite Video
Sources: Census Bureau, Department of Commerce, FCC Industry Analysis Division, Paul Kagan Associates, CTIA, Simba, AOL Annual Reports, Lehman Brothers
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E-BizTelecom021100, 3/12/2016
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Change in Components of Spend
In the future, traditional telecom services will become a smaller portion of
overall service value; new services will be offered and could include retail
transactions, entertainment, equipment leasing and billing
Intermediary Plus
A Communications Solutions Provider
Bill Summary
Network Connections (flat rate)
High Speed Access
Mobility
Unified Messaging
Digital Television Services
DBS Package
VOD
Hong Kong Gangsters (Movie)
Miss Internet Pageant (Event)
European Cup Final (Sports)
Monthly Internet Services
Daily Customized News Service
Appliance Monitoring
Remote Security
Publix Grocery Delivery Services
Amazon.com Book of the Month
$70.00
$65.00
$12.00
$60.00
$2.95
$3.95
$7.95
On-Net Purchasing
Victoria’s Secret
1-800 Flowers.com
On-Line Mall
Equipment Leasing/Financing
HAN w/HCC
Mobile Web Surfers (2)
Total - All Services
$5.00
$6.00
$15.00
$120.00
$20.00
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$59.95
$49.99
$275.00
$15.00
$10.00
$797.79
Where local and long
distance calling is free !!
• Since 1970, household spending on
telecommunications as a percent of
discretionary spending has tripled.
New communications services will
perpetuate this trend
• The total pool of value available to
telecom service providers is not fixed,
but expanding rapidly
• In the not-so-distant future, one-stop
shops will supply all basic and
advanced telecommunications,
entertainment and online purchasing
needs -- with one bill and one point of
customer contact
• Conservative assumptions regarding
the proportion of consumer spending
moving to Web-enabled channels over
the next five years generates the
monthly bill to the left. This will double
the growth rate of the traditional
telecommunications industry, adding
$50 billion annually to the new industry
value chain in the U.S. alone
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Home Area Network
A variety of needs in the household market are increasing demand for
bandwidth and driving the development of new applications that support the
emergence of the home area network (HAN)
Home Area Network
Needs
• Sharing of:
– Peripherals: printers,
Digital Terrestrial
TV
Telephone return
path
Satellite to TV
Telephone return
path
scanners, cameras
– Internet access
Smart
Device
– Files and application
– Multimedia and games
• High bandwidth for voice and
video applications
Terrestrial
Wireless
(Narrow &
Broadband)
• High speed access for
telecommuting
• Automation of home devices
such as environmental controls
and security systems
HCC
Local
Telco
Exchange
Fiber
& Copper
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TV
Cable
Company Local
Server
Broa
dban
d
Wirel
ess.
Mobil
e
Fiber
& Coax
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Broadband technologies
Increased demand for local bandwidth and exponential growth in Internet
traffic is generating the development of multiple forms of broadband access
and an increase in backbone capacity
12,000
• xDSL and cable modems are predicted to
be the dominant forms of local broadband
access
Forecast of North American
Residential Broadband Access
328%
• xDSL is being driven largely by telco’s
who can build on their existing networks to
provide broadband service
83%
• Cable modem’s are being deployed by
cable operators over existing cable TV
lines already deployed in millions of US
households
CAGR
xDSL
Revenues (Millions U$S)
10,000
Cable
Modem
8,000
• Satellite technology is less developed than
xDSL and cable modems, and will
therefore take longer to be deployed
6,000
-
4,000
Broadband
260%
Satellite
2,000
Satellite systems are well suited to
provide service to developing regions
because there is no need to deploy
last mile infrastructure
Broadband
Wireless 113%
0
1998 1999 2000 2001 2002 2003
Source: 1999 Communications Industry Researchers, Inc
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Home Area Network Applications
New applications and household devices that will increase the convenience
and comfort of the home user will result from the emergence of the Home
Area Network and deployment of broadband access
New Applications
Broadband
Satellite
High-speed
Access
Terrestrial
Wireless
(Narrow &
Broadband)
xDSL
HCC
Local
Exchange
Cable
Modems Local
Server
Fiber-tothe-home
New Generation CPE
• Control center for home
Voice and video
applications
• Digital video
networking
• Video-on-demand
• Interactive
programming
• Internet telephony
• Videoconferencing
• Internet radio
• Distance learning
Services
Monitoring / Home
Automation
• Security
• Electricity
• Heating
E-Commerce/Home
shopping
communications
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Home Area Network Applications
An intelligent interface will develop, combining content and transport
ILLUSTRATIVE
A Vision Of The Future Intelligent Interface
Facility (Home And/Or Office)
Communications
Intelligent Interface
Entertainment
COMMUNICATIONS
Voice
Visual
Data
Office
Applets



Facilities
Management
Electricity
Heating
Security
OFFICE
ENTERTAINMENT
Visual
Voice
Data
FACITILITIES
MANAGEMENT
Electricity
Heating
Security
Key Characteristics
• Voice activated
• Intelligent search
Source: Forrester Research, Telephony, PwC analysis
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
There are a number of key value imperatives in the new household
communications industry
Key Value Imperatives
•
Access network providers
•
Capture content spending
•
Capture on-net spending
•
Enable new applications
•
Support the HAN
•
Establish net currency
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
The Internet as a ...
Customer segments
source of demand for
telecom
products/services
enabler
transformer of business
models
Mass Market
Corporate
• Telecom services
• Professional services
• Backbone capacity
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16
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
The Internetworking Revolution
The internetworking revolution is transforming the corporation and creating
new opportunities for telecom providers to service their emerging needs









Growth of enterprise-wide
applications
ERP (eg SAP, Oracle)
Knowledge Management
(Lotus Notes)
E-mail (MS Mail)
Video Conferencing
Internetworking
Revolution
Global Competition
Privatisation and liberalisation
Free trade (WTO, Single
market, NAFTA)
Emerging markets competition
Global manufacturing,
servicing and marketing trend
Electronic channels to market
Interoperability around Internet
Technologies
 TCP/IP
 HTTP
 HTML,XML, Java




Telco opportunities

“The Global LAN”

Growth of E-business

Unbundling of the
Corporation
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“Death of distance”
Optical fibre physical medium
Transmission technologies
(SDH/Sonet)
Packet switching (frame relay
ATM, IP)
Telecom sector liberalisation
(CLECs, infrastructure)
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
The Global LAN
The global area network constitutes the virtual private network of the global
enterprise, provided either end to end across owned facilities or through local
service level agreements
“The Global LAN”
Global
Network
Desktop (LAN/WAN Integration)
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WAN
Desktop (LAN/WAN Integration)
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
The Global LAN
The creation of the global area network creates new opportunities for telecom
providers in providing new services such as managed network services and
network integration for advanced voice and data products
US Managed Network Services Revenues: 1998 - 2002
Advanced Data
60,000
Advanced
Data
50,000
US$ billion
40,000
56,324
Total CAGR: 22%
Advanced
Voice
44,792
36,688
30,378
30,000
25,353
• ATM
•
Frame Relay
•
SMDS
•
X.25
•
Corporate Internet Access
Advanced Voice
20,000
10,000
•
800/900 Services
•
VPN
•
Dedicated Access
0
1998
•
1999
2000
2001
2002
In market research undertaken by PwC in 1999; 40% of corporate customers had already established a global
buying function for communications products, revealing the expectations of corporations to receive true global
solutions, and not piece-meal national solutions
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19
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
E-Commerce growth
The growth in E-Business will generate increased bandwidth demand and will
provide new outsourcing opportunities in IT and communications services
Growth in US E-commerce Transactions (Billions U$S)
1600
1400
1200
Total CAGR:82%
$1,330
B-to-B
B-to-C
$840
1000
$500
$250
400
200
2000
2001
$110
$80
$50
$30
$20
1999
the creation of vertical
marketplaces and increased supply
chain integration require
infrastructure and will be a major
driver of demand
- will lead to increased outsourcing
$110
0
-
• The economics of the global economy
will drive corporations to use the
Internet to improve efficiencies and
focus on their core competencies
800
600
• Both Business-to-Consumer and
Business-to-Business commerce, will
drive bandwidth demand
2002
2003
Source: Forrester Research
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of non-strategic IT and
communications activities
(infrastructure, applications,
network management, operations
and IT support)
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Unbundling of the corporation
As corporations increasingly outsource core IT, communications and
operational activities to focus on their own core competencies, the
internetworking providers will have to fundamentally change their business
model from a network-centric focus, to a customer and solutions-centric
focus
IT/(E)-Business Consulting
Systems Integration
Applications Hosting
Web Hosting
Tomorrow’s Business
Focus
Network Management
Customer Care
Billing
Service Assurance
Service Activation
Product Development
Today’s Business
Focus
Capacity Provisioning
Network Design and Integration
Customer Relationship
Management
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21
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
On-Net (Corporate)
Customer ownership
Customer ownership in the corporate market will shift from communications
service providers to application and information service providers
Business Customers
Application and Professional Services Provider
End-to-End Communications Service Providers
Billing
and
(Customer
Management)
Product and Content Providers
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22
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Market success
Customer and solution-centric companies are showing signs of success in
the market when compared to network-centric service providers
• Customer-centric companies, like Level 3, were able to increase their stock price by
271% over the past two years
• Integrated telecom companies like Bell Atlantic and AT&T have only increased their
stock by 29% and 16% respectively over the past two years
Level 3
Bell Atlantic
AT&T
• Application service focused companies like Exodus Communications were rewarded by the
market with an increase in stock price of 3,216% since March 1998
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23
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
The issue for operators is to decide where to play in the value chain
IT Services
IS/IT Consulting

IT/IS
Consulting
Corporate
Network
Integration
Systems Integration





Application
Development

Systems
Integration
Software
Integration
and Support
Hardware
Integration
and Support
IT Training
and
Education
Communications Services



Network
Consulting
and
Integration
Corporate
Network
Management


IS
Outsourcing
Desktop
Management
Services

Application
Outsourcing
Services
Business
Process
Outsourcing
Process
Services


Managed
Voice
Services
Managed
Data
Service





Network
Management
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Basic Access
and
Transport
Services
Managed
Network
Services
Local
Service
LD
Service
Dedicated
Access
Network
Infrastructure
Provision




Dark Fibre
“Right of
Way”
Private
Circuits
IRUs
Wireless
Private
Circuits
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
A number of players are currently addressing this opportunity ...
EQUANT
Corporate
and Network
Management
Managed
Network
Services
Basic Access
and
Transport
Services
Network
Infrastructure
Provision
IS/IT Consulting
Systems Integration
Corporate
Network
Integration
Non core
Mid
Core
Core
Core
Core
Non core
Non core
Non core
Non core
Non core
Core
Core
Core
Non core
Mid
Core
Core
Core
Core
Mid
Core
Core
Mid
Mid
Non core
Non core
Non core
Core
Mid
Mid
Core
Non core
Non core
Non core
Non core
Mid
Core
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25
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Value Imperatives
Key Value Imperatives
•
Enter the human capital business
•
End-to-end 100% ownership
•
Own the desktop
•
Be global
•
Build Wholesale Business
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E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
The Internet as a ...
Customer segments
source of demand for
telecom
products/services
transformer of business
models
enabler
S
E
C
Mass Market
Supplier Enterprise Customer
Corporate
Supplier Enterprise Customer
S
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E
C
27
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
E-Business Initiatives
Telco’s are pursuing a variety of E-Business initiatives in eMarketing, eSales
and eCare to more effectively interact with the customers
Selected Customer Touchpoints
Develop
Products/
Services
Perform
Marketing
Sales
eMarketing
•
• Quickly test and
deploy alternative
pricing, terms, or
product strategies in •
days rather than
months
• Use agents to develop •
pricing or promotion
response
• Customer
segmentation
capability
•
• Widespread access to
real time
service/product
availability
• Push product
•
information and
tailored promotions to
customers
•
• Extend brand
• Provide rapid alerts to
changes in inventory,
pricing and promotions
• Identify customers at
risk of churn
Develop
customized
products
Integrate various
products and
services offerings
Improve new
product take rates,
and bring products
to market more
quickly
Simulate and
rapidly test new
product ideas
through online
research or direct
customer inquiry
Differentiate
product offers
Establish key
customer focus
groups to
collaborate in
product packaging
Service Activation
& Assurance
eSales
• Reduce cost of sales
through electronic
transactions
• Provide real time
inventory of product
availability
• Establish one touch
and done customer
product inquiry order
• Synchronize demand
forecasts with
inventory
• Provide high value
customers with
tailored services
• Promote real time
cross-selling and upselling
• Enable the timely
and accurate
distribution of sales
leads
• Create and manage
price, terms,
conditions, service
level agreements
and contracts
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Customer
Care
Billing
eCare
• Collect order
information, and
generate service
order
• Provide on-line credit
validation
• Reduce product
delivery costs
• Enable customers of
low value commodity
products self
activation of service
• Enable account
management from
sales through
implementation
among equipment,
network facilities,
suppliers and
customers
• Collaborative
management of
network services and
inventory
management
• Communicate test
and turn-up of
service/service
activation
• Automatically
• Electronic billing,
update resource
review and
loads, service and
inquiry
provisioning
• Electronic bill
schedules, force
payment
management and
provide updates to
customer order
tracking files
• Provide intelligent
virtual service
representative
• Allow widespread
monitoring and
management of
customer
• Provide
information and
internet-based
training on new
products/services
• Improve timeliness
and quality of
service
• Monitor and track
performance vs.
SLAs
28
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
The Case for eCare
By focusing on the customer rather than on the enterprise, the web provides a
more efficient and effective medium for the delivery of telecom services
Efficiency
Effectiveness
eMarketing
• Decreased customer churn
• Improved profitability comparisons for different
prospect types
• Accurate profitability comparisons for orders
from different channels
eSales
• Decrease lead turnaround time
• Increase margin contribution
• Decrease sales cycle
• Decrease promotion cost/discounts per order
• Decrease training time
• Decrease average time per sale
eMarketing
• Improved customer loyalty (win-back)
• Increased analysis of marketing program
effectiveness
• Improved visibility to win-rate comparisons for
different prospect types
• Extending the life of customer
+
eSales
• Increase cross/up selling
• Increase margin contribution
• Increase average order size
• Increase win/loss information
eCare
•
•
•
eCare
• Increased speed and accuracy of resolution
• Increased outbound call capacity
•
Decreased cost per service customer
Notice: PricewaterhouseCoopers Proprietary Information. Not for use/disclosure outside PwC except under written agreement.
Increased customer satisfaction
Increased lead conversion rates
Additional sales channels through live contacts
and teleweb
29
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Customer Markets
The distinct character and needs of the each market suggests that the
household market should focus on marketing and sales activities, whereas
the corporate market should focus on customer care
Market
Customer
Base/Needs
Household • Over 15
million
customers
• Bundling
emphasis
Corporate
Product/
Service Offering
• Standard
service
offerings
• Voice and
simple data
• Less than 1 • Customized
service offerings
million
customers • Voice & data
• Hosting
• Solutions
(web/applications)
emphasis
• Network
management
• Negotiated pricing
• Contracts, SLAs
master service
agreements
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Economics
Care Needs
• Very high
• Routine
volumes
interactions
• TBR < $100/ • Simple
month
inquiries
• Fixed pricing • Service
availability
• Lower margin
services
• Routine and
• Very high
complex
volumes
interactions
• TBR < $100/
• Service
month
availability
• Higher margin and SLA
services
reporting
Degree of
Loyalty
• Low
• Customers
price
sensitive
ePriorities
eMarketing
and eSales
• Long-term
relationships
eCare
• Billing
analysis
30
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
The Internet as a ...
source of demand for
telecom
products/services
enabler
transformer of business
models
Buyers
Sellers
Customer segments
Exchanges
Mass Market
Auctions
Aggregators
Tomorrow’s Business
Focus
Corporate
Notice: PricewaterhouseCoopers Proprietary Information. Not for use/disclosure outside PwC except under written agreement.
Today’s Business
Focus
31
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Introduction to Web-based business models
New business models are already beginning to impact the way telecom
services are packaged and marketed
Web-based Competitive Segmentation
eRetailers
LD
Beyond
LD
eRetailers are
Definition facilities based
service providers
that use the Internet
as a sales and
delivery channel
V-o-IP LD
providers
Unified
Messaging
Free ISP’s
Markets
Revenue
Model
reseller
Aggregators
Supply
directory
Auctions
Demand
Supply aggregators - consolidate Demand
telecom and/or other services on a aggregators
portal or other platform.
consolidate
the needs of
Resellers
Directories act
fragmented
usually capture as “neutral
markets to
retail revenues, navigators”
gain
complete the
allowing buyers
purchasing
entire
to comparison
power with
transactions on shop,
suppliers
their web site,
customize,
and many times evaluate and
provide billing
purchase
and customer
products/service
care to the end- s on the Web
users
Household
Wireless
Small Business
Household
Wireless
Small Business
Household
Wireless
Small Business
Household
Wireless
Small
Business
Advertising.
Commerce revenue.
Licensing fees
Advertising.
Retail revenues
Volume/
wholesale
discounts
Transaction
commissions
Advertising
Bounties/
commissions
paid by service
providers
Advertising
Transactions
commissions
Notice: PricewaterhouseCoopers Proprietary Information. Not for use/disclosure outside PwC except under written agreement.
Exchanges
Exchanges
provide a market
mechanism for
trading
commodity
assets online.
They work
effectively when
there are multiple
buyers and
sellers, the asset
is a defined and
uniform good
and there is
market liquidity.
Large
Business
Wholesale
Advertising
Transactions
commissions
Subscription
fees
Traditional
Reverse
Traditional
auctions are
seller driven
online
auction for
wide variety
of products
and
quantities
Reverse
auctions
are buyer
driven
online
auctions
where
there is
one buyer
and many
suppliers
Large
Business
Wholesale
Small
Business
Large
Business
Advertising
Transactions
commissions
Subscription fees
32
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Web-based players
Most new telecom eMarketplace players fall in the Supply Aggregator
category
Communications Industry Web-based Business Models
Aggregators
eRetailers
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
1stUp.com
Dialpad.com
Deltathree.com
eVoice
Fax Sav
(Mail.com)
Juno
Linx Comm.
Net2Phone.com
NetZero
OneBox.com
Phone.free.com
RocketTalk
Talk.com
ThinkLink
U-Reach.com
Z-Tel
Auctions
Supply
directory
reseller
• BuyTelco.com
• CollegeClub.
com
• Essential. com
• Extant
• MVX.com
• ServiSense
• Telegea.com
• Telstreet.com
• Universal
Access
• Utility.com
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
BizBuyer
• Demandline.
com
BuyersZone
• Accompany.
DealTime.com
com
Decide.com
Lowermybills.com • Mercata.com
MyRatePlan.com
MySimon.com
OfficeClick.com
Onvia.com
Point.com
Reasonware.com
ShopNow.com
Simplexity.com
LetsTalk.com
Totally Wireless
(ePhones.com)
Notice: PricewaterhouseCoopers Proprietary Information. Not for use/disclosure outside PwC except under written agreement.
Exchanges
Demand
•
•
•
•
Traditional
Reverse
• Bandwidth.com
• BandX
Arbinet
• CommerceOne • Band-X
Band-X
• FreeMarkets
Enron
• imandi.com
RateChange
• Killerbiz.com
• Priceline.com
33
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Summary of impact
Emerging web-based business models will have varying impact on different
sectors of the communications industry
Communications Industry Web-based Business Models
Aggregators
Supply
eRetailers
reseller
directory
Auctions
Demand
Exchanges
Traditional
Reverse
Consumer
• Local
• LD
LD
coming
• Wireless
• Internet Access
• Vertical Services
*
• BellSouth.com
Non-complex
Businesses
• Local
• LD
• Wireless
• Internet Access
• Vertical Services
• BellSouth.com
Complex
Businesses
• Local
• LD
• Wireless
• Internet Access
• Wholesale
• BellSouth.com
* Note: Harvey ball refers to Entertainment services, not Vertical services
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34
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Summary of strategic alternatives
Telco’s should aggressively manage those business models that represent the
most opportunity for growth and the largest threat of disintermediation such
as supply aggregators, both resellers and directories
Summary of Strategic Direction
Fight
Ignore
Join
Support
Buy Stake/
Acquire
Create
High
Business
Impact
Low
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35
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only
Notice: PricewaterhouseCoopers Proprietary Information. Not for use/disclosure outside PwC except under written agreement.
36
E-BizTelecom021100, 3/12/2016
DRAFT - For Discussion Purposes Only