1. INFS 5053 Case Study 1 Group E1 INFS 5053 Assignment 2 – Case Study 1 - Group E11

2. Introduction - Why Telco 2.0? We all need telecom services. POTS, mobiles, data, video… How will telcos grow revenue in saturated markets? INFS 5053 Assignment 2 - Tutorial 1 - Group E1 2 From Docter et al. (2007). Falling revenue per User means Telcos have to change their operating model.

3. Introduction(Cont.) INFS 5053 Assignment 2 - Tutorial 1 - Group E13 Service bundling is not the answer. Bundled revenue often at a discount (1 + 1 + 1 < 3). Does not address content. The ‘Telco 2.0’ model has been suggested as the way to grow revenues. So what is Telco 2.0?

4. What is Telco 2.0?1 It is a fundamentally different model for the Telco’s business. A move from a supplier-retail model to a 2-sided model. A move from supplying a pipe to supplying a pipe of stuff the customer wants. The telco becomes involved in more interactions between its customers… …using the infrastructure and systems the Telco already has. But is it really all that new? INFS 5053 Assignment 2 - Tutorial 1 - Group E14

5. What is Telco 2.0?2 Selling services and obtaining revenue from both upstream and downstream customers. Requires good customer intelligence, experience and billing systems. INFS 5053 Assignment 2 - Tutorial 1 - Group E15 From STL Partners 2009b.

6. How does T2.0 Differ from Previous Approaches to the Telco market – Previous Approach Upstream Suppliers Network Equipment Suppliers Backbone Bandwidth Suppliers Telco Controlled Services Bundled Bandwidth Downstream Customers Consumers SMEs Enterprises Public Sector $ $ $ $

7. INFS 5053 Assignment 2 - Tutorial 1 - Group E17 Upstream Customers Developers Retailers Government Media Advertisers Utilities Finance Telco Core Services New B2B Platform Services Downstream Customers Consumers SMEs Enterprises Public Sector $ $ $ $ Strategy / APIs / Technology / Operational Agility How does T2.0 Differ (continued)

8. What does the two-sided model really offer corporate/institutional/government users of voice and data communications? Corporate/institutional/ government users can be both upstream and downstream customers INFS 5053 Assignment 2 - Tutorial 1 - Group E18 From STL Partners 2009b. Requires voice, data and other value-added services. Requires service sales and interaction with downstream customers.

9. What does the two-sided model really offer corporate/institutional/government users of voice and data communications? (Cont.) For downstream customer Better price for voice and data communications More value-added services (STL Partners Ltd, 2009) Identity, Authentication & Security Advertising, Marketing Services & Business Intelligence E-Commerce Sales Order Fulfilment – Off-line Order Fulfilment – On-line Billing & Payments Customer Care Flexibility on service options A new form of relationship between Telco and its customers INFS 5053 Assignment 2 - Tutorial 1 - Group E19

10. What does the two-sided model really offer corporate/institutional/government users of voice and data communications? (Cont.) For Upstream customer Allow interaction with downstream customers through Telco’s platform Provide business opportunities Allow cooperation between upstream customers. INFS 5053 Assignment 2 - Tutorial 1 - Group E110

11. “Just how likely is this, anyway?” “ Wait just a minute there, ” says the Devil ’ s Advocate.

12. Telcos historically :- Large monopolists or ex-monopolists Used to having captive customer bases Used to the profits gained from the above Have entrenched corporate structures and culture that have grown up around this Not friendly to customers or employees Whereas Web 2.0 companies are seen as agile, fast- moving and innovative, and good to deal with Telcos aren’t wanting change as innovators, but defensively, out of necessity

13. Telstra, an Australian example After privatisation: Focused on share price political shenanigans Service deterioration Infrastructure degrading Bandwidth caps on dialup! Deliberately limiting ADSL speeds to well below capability Cable tv rollout failure Low bandwidth limits Anti-competitive behaviour Refusal to upgrade to 21 st c (e.g. fibre optic) From a customer point of view: Large line rental increases Charging people to pay bills by credit card Charging people to pay bills on the internet Charging people to pay in person Doing away with itemised bills Exorbitant landline-mobile rates

14. Traditional Telco revenues are falling Telco 2.0 suggests the provision of services both upstream and downstream However, the Telcos will have to improve in a forward- looking manner, which will require pain now. If achieved, a number of advantages will accrue in both B2B and B2C areas Whether 2.0 adaptations can be achieved is somewhat doubtful, given past history. Even then, they may not keep the Telcos at their current financial levels. INFS 5053 Assignment 2 - Tutorial 1 - Group E114 Conclusion