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Reshaping the future with NFV and SDN

Reshaping the future with NFV and SDN

The impact of new technologies on carriers and their networks

A geographically diverse set of Tier 1 carriers is driving initiatives to standardize critical components of network functions virtualization (NFV) and software-defined networks (SDN). Led by AT&T, Deutsche Telekom, NTT, Telefonica and Verizon, among others, these carriers hope to bring new technologies first developed and proven in the data center into their networks. The excitement over NFV and SDN has created renewed interest in the networking business and has fanned debate regarding potential winners and losers. So far, however, there has been only limited analysis of the potential economic and competitive impact of these technologies on the network, operations and the bottom-line.

This joint white paper by Arthur D. Little and Bell Labs aims to fill that gap. It offers our views on the network of the future and discusses the value of fusing carrier networks with the cloud ecosystem, as enabled by these technologies. These changes are both an opportunity and a necessity for telecom operators — and for those that get it right, it will be a game changer.

Released: May 2015

Download File ADL_BellLabs_2015_Reshapingthefuture.pdf (.PDF, 954 Kb)

Telecom and Media

Telecom and Media

How to ride the OTT wave

The telecom and media space is going through significant changes as the way we consume media evolves. In 2014, the move to content digitalization accelerated and we received confirmation of the emergence of key players in the video and music distribution industry.

These new players include Internet giants such as Google, as well as YouTube, Amazon, Apple and Netflix.

Traditional TV and radio players are facing this rising competition on multiple content segments, mainly on price. Also, with the rise of on-demand programs, there is less value in aggregating a large number of channels. Additionally, this new competition increases the prices of premium content.

Leading traditional audio-visual media groups should be able to adapt, fending off pure OTT competition by launching their own OTT services and leveraging their key assets, such as brand, relationships with content providers, technical skills, and last but not least, intimate and long-established relationships with their customer bases. Telecom operators can also create value, monetizing their network by benefiting from the rise in online video usage in two core ways:

  • Charging customers for faster speeds and/or data traffic.
  • Monetizing their network assets with global OTTs.

In this report, which draws from more than 110 interviews with executives from the telecom, media and Internet sector, we focus on the evolution of audio and video content delivery, and on the relationships between the major players in this ecosystem.

If you would like your own full copy of the 14th edition of the joint annual report by Exane BNP Paribas-Arthur D. Little, please contact Isabelle Tisserant.

Released: May 2015

Download File ADL-ExaneBNPParibas_2015_TelcoMediaOtt_ExecSum.pdf (.PDF, 506 Kb)

Media & Entertainment: Flow of Funds

Media & Entertainment: Flow of Funds

Trends and developments in the UK

The UK Media and Entertainment sector has exhibited solid growth to reach GBP 39.1 bn by the end of 2013. Consumer spending on media and entertainment accounted for more than half the total industry inflows, though the proportion coming from advertising is now growing strongly. Both segments exhibit a strong shift towards digitization. Within product genres, and when combining online and offline spend, TV/Video and Gaming exhibit overall revenue growth, whereas Music/Radio and Newspapers/Magazines remain in decline.

Several trends and developments help to distinguish the UK market:

  • Consumers relentless adoption of new device formats and new services, coupled with multi-tasking and media stacking, means UK citizens now spend more than 11 hours of ‘effective’ time every day using communication and media services.
  • Content distributors, including the BBC, are gearing up to respond to these trends, and the generational shifts that underlie them.
  • The continued cross-sector battle between Telecoms and Media giants BT and Sky is exacerbating contents rights inflation, and other actors – notably ITV – are investing heavily in content production.
  • Dynamic new segments like videogaming – where UK-based studios truly create world class content – are growing resiliently and are significant developers of talent, as well as major exporters.

In this report, Arthur D. Little has analyzed the payment flows between the various industry actors. It is apparent the recent beneficiaries have been the contents and rights owners, whereas retailers of physical media have been the hardest hit and are forced to radically adapt their footprints and business models.

Looking forward, we expect continued growth, propelled by further increases in population, advertising spending and take-up of online services. This, coupled with foreign currency effects, will place the UK media and entertainment market well ahead of aggregated European peers in Euro terms for the foreseeable future.

Released: May 2015

Download File ADL_Flow_of_Funds_UK.pdf (.PDF, 1.9 MB)

Value engineering of capital projects

Value engineering of capital projects

Is your business optimizing value over the entire asset lifecycle, from the start?

Large capital projects are often not delivered at the lowest possible cost, nor do they always deliver maximum value at any given cost. Value engineering provides a framework to systematically identify opportunities for cost reduction, whilst maximizing functionality and incorporating innovative ideas and options along the way.

Value engineering of large capital projects typically delivers cost savings of at least 10% and can create great opportunities for value enhancement. Savings as high as 30% are not unheard of.

This Arthur D. Little viewpoint discusses how companies can benefit from applying this technique and explains step by step what they should do to maximize value benefits from capital projects value engineering.

Released: April 2015

Download File ADL_Value_Engineering.pdf (.PDF, 720 Kb)

Big Data: A gold mine in Telcos’ backyard

Big Data: A gold mine in Telcos’ backyard

Extracting maximum value from Big Data

Big Data is an invaluable strategic lever for telecom operators to reverse the revenue decline trend affecting markets worldwide. Big Data enables Telcos to leverage one of their strongest hidden assets, customer insights.

Key topics discussed are strategic considerations, use cases through which Telcos are monetizing their customer insights, operating models Arthur D. Little provides perspectives on some of the most critical issues in order to maximize this potential like necessary strategic considerations, use cases through which Telcos are monetizing their customer insights, operating models and set up of big data initiatives.

Released: April 2015

Download File ADL_BigDataGoldMineforTelcos.pdf (.PDF, 889 Kb)

Driving safety improvement

Driving safety improvement

Improving business performance through strengthened road driver management

As businesses improve safety performance in core operations, risks relating to road transport are stepping into the limelight and concerns are being raised at board level as threats to business performance are becoming clear.  The United Nations has declared 2011-2020 the Decade of Action for Road Safety; it’s time for businesses tackle driving related risk as a strategic business issue.

Released: April 2015

Download File ADL_Driving_Safety_Improvement.pdf (.PDF, 507 Kb)

Time to better leverage LTE?

Time to better leverage LTE?

Benchmarks, dynamics and insights into mobile data services

The current global trend towards tariff reduction highlights the importance of generating and promoting data usage through LTE’s enhanced customer experience. Introducing value-added services can also be a functional way for mobile operators to promote broadband usage; when successfully perceived by customers as a differentiation factor, it can be a rewarding way to enhance the value proposition and support sustainable growth. To better monetize their LTE investments, telecom operators should leverage pricing models that further stimulate data consumption, such as data volume tiered pricing, speed-based differential pricing or bundling of OTT services.

Released: April 2015

Download File ADL_TimeToBetterLeverageLTE.pdf (.PDF, 907 Kb)

Clarity on carrier cloud

Clarity on carrier cloud

Staying the course, despite the odds being stacked against carriers

Carrier’s the world over are actively investing to find their niche in cloud services to drive growth, but few can claim success.

Building a credible cloud service will require to fully understand the market potential for public, private cloud and related services.

Potential entrants need to analyze how cloud technology will shape the market, what are the required technology and software capabilities and how to create a win-win situation through alliances.

Released: April 2015

Download File ADL_ClarityOnCarrierCloud.pdf (.PDF, 685 Kb)

Hybrid Cloud: Built for your benefit

Hybrid Cloud: Built for your benefit

Haven’t thought about the cloud yet? Still concerned about security limitations? Discover the hybrid cloud, a solution that combines the cloud benefits and your security needs

Today “Cloud” is a term that is present in everyone’s ears. Companies across all industries consider the new concept to profit from cost-effectiveness and operational efficiency. Yet there are essential concerns about the technology that keep many potential customers away from taking the last step towards cloud integration. However, these concerns can be dissolved using the “Hybrid Cloud”, that enables tailored solutions including sufficient security rules for proper data protection.

In this Insight, we show the opportunities for companies to enjoy the benefits of cloud without threatening their business through lacking security consideration.

Released: April 2015

Download File ADL_Hybrid_Cloud.pdf (.PDF, 89 Kb)

The China light van segment

The China light van segment

A dynamic market with increasing volume and shifting needs

The light van market in China seems to be a long-forgotten segment for foreign OEMs. The market is mostly in low-tier cities and rural areas where customers have limited budgets. As a result, most foreign OEMs have not paid too much attention to it, despite the size of the market (around 3 million units in 2014). Yet upcoming regulation and a shift in customer usage may modify the current market landscape and open a new door for foreign players.

Released: March 2015

Download File ADL_ChinaLightVanSegment.pdf (.PDF, 844 Kb)