DigiWorld media Yearbook 2015 An The challenges of the digital world internet 2015 n DigiWorld telecom Smart thinking the DigiWorld Over the past 15 years, the DigiWorld Yearbook has become IDATE’s flagship re- Yearbook port, with an annual analysis of the recent developments shaping the telecoms, DigiWorld Yearbook Internet and media markets, identifying major global trends and outlining scenarios of what lies ahead. 2015 The mission of the Yearbook has expanded as digital technologies take on their central role in transforming various sectors including connected cars, financial and insurance services, healthcare, retail trade and the collaborative economy.

◆

The challenges of the digital world

100 € prix TTC France ISBN : 978-2-84822-402-2

www.idate.org DigiWorld media Yearbook 2015 An The challenges of the digital world internet 2015 n DigiWorld telecom Smart thinking the DigiWorld Over the past 15 years, the DigiWorld Yearbook has become IDATE’s flagship re- Yearbook port, with an annual analysis of the recent developments shaping the telecoms, DigiWorld Yearbook Internet and media markets, identifying major global trends and outlining scenarios of what lies ahead. 2015 The mission of the Yearbook has expanded as digital technologies take on their central role in transforming various sectors including connected cars, financial and insurance services, healthcare, retail trade and the collaborative economy.

◆

The challenges of the digital world

100 € prix TTC France ISBN : 978-2-84822-402-2

www.idate.org View the work in 3D augmented reality on your smartphone or tablet: download the free “DigiWorld 2.0” app from the App Store or Google Play, or scan the QR code on the right.

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Founded in 1977, IDATE* has gained a reputation as a leader in tracking telecom, Internet and media markets, thanks to the skills of its teams of specialised analysts. Now, with the support of nearly 50 member companies – which include many of the digital economy’s most influential players – the DigiWorld Institute offers a rich calendar of activities year-round: • DigiWorld Clubs: a series of monthly meetings in Brussels, London and Paris; international business trips • DigiWorld Events: DigiWorld Future, the European roadshow exploring what lies ahead, and the DigiWorld Summit during DigiWorld Week, the international headline event • DigiWorld Publishing: the DigiWorld Yearbook and Communications & Strategies (DigiWorld Economic Journal) • DigiWorld Collaborative Research: run by IDATE analysts with contributions from outside experts. Four main themes selected for 2015: “Verticals and the digital transition”, “SVOD”, “Africa and the digital promise” and “Platform strategies” For more information, contact: Sophie Monjo Tel: +33 (0) 67 144 456 [email protected]

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* For more details about IDATE and what we do, please go to the back of this publication. IDATE, DigiWorld, DigiWorld Institute, DigiWorld Yearbook, DigiWorld Summit, DigiWorld Week and DigiWorld Future are international trademarks of IDATE. The challenges of the digital world DigiWorld Yearbook 2015

Please welcome this 15th edition of our annual round-up of the outstanding issues and events that are shaping the digital world, and DigiWorld Future: the European roadshow exploring what lies ahead. > The Yearbook is available in French and English, in print and electronic format.

To fi nd out more about IDATE’s consulting activities, market reports and think tanks, visit us online at: www.idate.org Something to say? Please send all comments and suggestions to Hélène Ollivier: [email protected] www.idate.org/ digiworldyearbook

To mark the publication of the 15th edition of its DigiWorld Yearbook, IDATE is hosting a wide- reaching debate on the key trends that will shape the digital economy over the next 10 years.

nd th th Drawing on detailed analyses of the current situation and IDATE expert forecasts for the core digital sectors, the debates will focus on the disruptive trends and issues expected to shake up the industry between now and 2025. www.digiworldfuture.com DigiWorld 2015 6 Foreword Foreword Once againthisyear, Iamdelightedtointroducethelatesteditionofour Dear friendsandcolleagues, Without bringinganydramaticchangetothestructureandcontentof Institute. – andindependenceofourteamsand,ultimately, thevalueofIDATE DigiWorld commitment tothisprojectisatangiblesignofhowmuchtheyrecognisethecompetence members. Soletmetakethisopportunitytoofferthemmysincerethanks.Theirrenewed expertise. And,ofcourse,Ineverforgetthatthisisanannualreportrequestedbyour tably specialisedteamstoexploremarketissuesfromaperspectivebeyondtheirusual just howpowerfullyitexpandsthereachofourInstitute.Itprovidesachancetoinevi- and thisforthreereasons.InmycapacityasIDATE chairman,Ihavebeengratifi ed tosee In themeantime,Ihopethis2015 future editionsevermorerelevant. rather hearfromyouaboutyours.Pleasedosendalongyoursuggestionssowecanmake We arealreadyworkingonsomenewideasfornextyear’s edition.We would,though, experts forthreesectorsupto2025:telecoms,televisionandtheInternet. have shapedthepasttwelvemonths,followedbydevelopmentscenariosforeseenour completed witharesolutelyforward-lookingopeningpartwhichexploresthetrendsthat sector-specifi c analyses.ThetraditionalintroductionbyourCEO,Yves Gassot,hasbeen this year’s editiondoescontainseveralinnovations.We haveaddednewchapterstothe with youwhennextwemeet. Ihopeyouenjoythereport,andlookforwardtodiscussingthese richandfascinatingtopics our membersandpublicpartners. ings inBrussels,LondonandParis,thecollaborativeresearch seminarstobeheldfor conferences beingheldtomarkthereleaseofreport,but alsoourweeklyClubmeet- events programmeandinitiativesoftheDigiWorld Institute:notonlytheDigiWorld Future innovation. Theyarequestionsthatweshallourselvescontinue toexplorethroughthe worthy oftheimportantandcomplexquestionsraisedby acceleratingpaceofdigital DigiWorld Yearbook DigiWorld helpstofuelsomelivelydebate François BARRAULT François DigiWorld Yearbook DigiWorld Chairman of IDATE of Chairman Yearbook , ,

www.idate.org 7 Foreword DigiWorld 2015 8 Content Introduction ...... Introduction 3. 2. 1. Atlas DigiWorld

Ten keytrends 6. 5. 4. 3. 2. 1...... markets media and Contents 6. 5. 4. 3. 2. 1...... markets and services Telecom 8. 7. 6. 5. 4. 3. 2. 1...... economy ICT global The Foreword...... Print media...... Video games...... Recorded music...... Publishing...... Video...... TV viewing...... Video distribution...... Spectrum...... Fixed-mobile convergenceand smallcells.... Outsourcing andnetworksharing...... Ultrafast mobile...... Fixed broadband...... Devices...... Internet services...... Audiovisual services...... IT services...... Telecom services...... Network equipment...... DigiWorld marketsbyregion...... DigiWorld marketsbysector...... 31 69 53 82 80 78 76 74 72 66 64 62 60 58 56 50 48 46 44 42 40 38 36 10 6 5. 4. 7. 6.

6. 5. 4. 3. 2. 1. and players services Internet 6. 5. 4. 3. 2. 1. equipment and network IT, software 6. 5. 4. 3. 2. 1. markets Vertical 6. 5. 4. 3. 2. 1. Consumer Electronics 3. 2. 1. for 2025 Internet, telecom andTVindustryscenarios The InternetofThings...... E‑commerce...... Communication services...... Mobile applications...... Social media...... Online advertising...... SDN andvirtualisation...... Web-scale...... Datacentres...... Cloud computing...... Cellular M2M...... Big data...... The collaborativeeconomy ...... Retail Connected health...... Financial andpaymentservices...... Smart cities...... Connected cars...... Smart toys...... Wearables...... The futureofset-topboxes...... Smart TVs...... Video devicesandUHD...... The smartphoneand itsecosystems...... The futureoftelevision...... The futureoftelecoms ...... The futureoftheInternet...... Content ...... 101 133 114 112 110 108 106 104 146 144 142 140 138 136 130 128 126 124 122 120 117 85 98 96 94 92 90 88 27 24 21 June ...... 160 June ...... 158 May ...... 156 April ...... 154 March ...... 152 February ...... 150 January chronicle DigiWorld Annexes Region profi the globaldigitaldivide? Can satellites,dronesandballoonseradicate Sky beginsitspay-TVconsolidationcampaign Package Europe’s upcomingreviewoftheTelecoms Vodafone acquiresONO Facebook pays21.8billionUSDforWhatsApp The FCCandnetneutrality Index ...... 184 Glossary ...... 182 Asia/Pacifi c ...... 178 North America...... 177 Europe ...... 176 les December ...... 172 December ...... 170 November ...... 168 October ...... 166 September ...... 164 August ...... 162 July BT andEEintheUK YouTube launches YouTube MusicKey Kindle UnlimitedcomestoGermany Alibaba andthebiggestIPOofalltime T-Mobile USrebuffsIliad its telcopopulation,withprovisos The CommissionallowsGermanytocut Africa/Middle-East ...... 180 Latin America ...... 179

www.idate.org 9 Content DigiWorld 2015 10 Introduction Ten key key Ten trends A the workofourteamsspecialists. three mainsectorsupto2025,drawingon events withdevelopmentscenariosforthe We willpunctuatethisreadingofrecent previous Yearbook. taken placesincethepublicationof by theeventsanddiscussionsthathave closely intertwined,andinspireddirectly which, althougheachisdifferent,areoften tunity toshareafewtrendsandqueries But thisfi rst chapterismoreofanoppor- their impactonthemarkets. ing chapterswillexplorethesetopics,and artifi cial intelligencetothatlist.Thefollow- dia. Somewouldalsoadd3Dprintingand Internet ofThings,bigdataandsocialme- changers suchasmobility, thecloud, confi rmed thesignifi cance ofcertaingame of lookingbackovertheyear’s eventsonly developments onadailybasis,theprocess ness itistowadethroughthelatestmarket month. ForwehereatIDATE, whosebusi- pieces onthemaineventsthatmarkedeach news fortheyeargoneby, alongwithfocus the monthlychronicleofdigitalindustry digital shake-up thatisnowoccurring. tify inamore concrete fashionthegreat signifi cant newstageinourabilitytoiden- recent months,wehaveentered intoa We neverthelesssharetheideathat,in at IDATE. to bethemainfocusofour workhere Internet. Itisthisgroupthat continues new mediaand,forsomeyearsnow, the bines videogames,consumerelectronics, professions, acompositegroupthatcom- the variousITandtelecommunications market shareandnewproductrollouts: could besummedupintermsofgrowth, confines oftheindividualsectors,and innovation tookplacelargelyinsidethe Up untilrecently, refl ections overdigital shake-up digital great The 1/ DigiWorld Yearbook, readerswillfi nd s always,inthesecondpartofour kets –todayseems problematicatbest. favour ofnew investments andnewmar- to productivitygainsbeingredeployed in ous circleàlaSchumpeter– whichleads a polarisationofjobsandwealth, thevirtu- result insomanylostassets, andinsuch stress thatbecauseproductivity gainsalso ence ofthegreatdigitalshake-up,butdo Others, meanwhile,donotdenytheexist- for technologiestobefullyappropriated. of statisticaltools,orthetimeittakes reasons forthisparadox,inthelimitations market analystshavesoughttofi nd the “You see the computer age everywhere but but everywhere age computer the see “You 1987 ofNobelPrizewinner, RobertSolow: gains. Echoingthefamousphrasefrom predicated onarapidriseinproductivity inability togenerateanewroundofgrowth out inthenearfuture,havingprovenits vation modelofdigitaltechnologypeter stagnation. Theyexpecttoseetheinno- see allofthesignsamajorperiod reiterate here.Somemarketobservers raise anumberofquestionsthatwewill be anythingbutasmoothride,theyalso While theexpectedupheavalswillsurely unavoidable platforms. and forcingthemtodependonexternal, innovations shakinguptheirecosystem, have allhadtosituptheriskofdigital health andautomotiveindustryleaders the hotelmarket.Butfi nance, insurance, disrupted thetaxibusiness,andAirbnb Everybody knowsabouthowUberhas behaviour torevolutionisethevaluechain. technologies andnewconsumercultural side theindustry, takingadvantageofnew the statusquo,manyofthemfromout- intermediaries arecomingtoshakeup top economicstakeholders.Today, new semination throughtheITinvestmentsof we attemptedtomeasurethepaceofdis- transformation isplayingout.Previously, the phenomenon,butespeciallyhow This meansgaugingnotonlythescaleof in productivity statistics” productivity in . Eversincethen

www.idate.org 11 Introduction 12 DigiWorld 2015 Introduction announced afewyearsbackthat:“ Cutting righttothechase,MarcAndreessen 2/ The telecom example telecom The is eating the world the eating is sive leapincomputing whenhardwarewas enon thatcould becomparedtothedeci- works, usingSDNandNFV – aphenom- phenomenon underwayon telecom net- importance isgiventothe virtualisation eration wirelesssystems.But alittleless fast accessinfrastructures, ornewgen- deploying new, physicalfi bre-based super- formation andtheconstraintsinvolvedin sector. Itisnothardtovisualisethe trans- softwarisation ofthetelecommunications What mayseemevenlessevidentisthe gine ortheFacebooknewsfeed. rithms thatpowertheGooglesearchen- could besaidaboutAmazon,andthealgo- the company’s technicalculture.Thesame original programming,oftenoverlooking for example,focusesonitsinvestmentin A greatdealofthefanfareoverNetflix, rally fi nd anidea,andmadsoftwarechops. start-ups andtheInternetgiantswenatu- Ten trendsthatareshakingupthedigitalworld the economy? is doingto softwarisation What is eatingtheworld Software “Software is eating the world” the eating is “Software players vertical market platforms Horizontal The adventofdata-centricbusinessmodels Anything asaservice…andever-growingdata & New growthordestructionoflong-termgrowth? The greatdigitalshake-up ”. Behindsuccessful Software Software

fixed-mobile convergence for Europe opts a chance? Does Europehave Content isking.Still for Europe t will growth IP traffic e T hat he A xam erable downthe road.Leadingproviders still onlynascent, buttheywillbeconsid- softwarisation oftelecommunications are The issuesandchallengessurrounding this or customers. and tothedemandsofcertain applications to adaptinrealtimetraffi c conditions unify fixed andmobilenetworks, andbeable ible andagile,whichmakesitpossibleto cost effectiveness,theaimistobefl ex- ing inothersectorsofactivity. Alongwith line withtheinexorablepaththatITistak- or lessdistributedcloudarchitectures,in in handwithoperators’adoptionofmore equipment suppliers.Thisideagoeshand easily, andwithouthavingtorelyontheir grade theirnetwork’s functionalitiesmore the mainideaistobeablealterandup- ment inwhichtelecomcarriersoperate, eration inthefi ercely competitiveenviron- As costhasbecomeanessentialconsid- of operatingandmonitoringthenetwork. for whatisessentiallysoftware,incharge to seeoneplanforhardwareandanother telecommunications systems,weexpect puter’s operatingsystem).Intomorrow’s separated fromsoftware(andthecom- doub f orecas p f p l rican e g le t on thefrontlines Telecom markets and consolidation Globalisation

ambitions China’s growing takes all economics Winner Platform

Source: IDATE their products. on theplethoraofdatabeinggeneratedby their business,andtheabilitytocapitalise in-house controloverthetelecomsideof over thereinsastheyseektogaingreater in withthetopOTTplatforms,wouldtake providers, whowillbemoreorlessblended behalf ofthirdparties.Meanwhile,service largely sharednetworkinfrastructureon telco businesstofi nancing andinstalling ing thisscenarioredeployed,reducingthe ever, entirelydiscountthepossibilityofsee- the roleofadumbpipe.We cannot,how- will allowthemtoavoidbeingrelegated to seetheadvantagesofthistrend,which on theirhometurf.Buttelcosalsoneed and (onceagain!)overITgiantstreading ket shareifinteroperabilityisguaranteed, have legitimateconcernsoverlosingmar- Time Warner Cable,willgetthe green top twocable companies,Comcastand Act, themergerbetween country’s Title IIserviceunder theCommunications the FCCdecisiontoclassifybroadband as Today, itseemsmorelikelythat,following are stillbeingscrutinisedby authorities. ers wereportedoninlastyear’s Yearbook place inEurope.OvertheUS,merg- the UnitedStatesanddevelopmentstaking needs tobemadebetweenthenewsoutof 2014. Onceagainthisyear, adistinction dation wasaconstantintheheadlines Despite this,thetelecomsector’s consoli- cess ofcross-bordermergersinthepast. situations andinthe,oftenrestrained,suc- al infrastructure,thediversityofregulatory have withtheState,factofusingnation- found inthetiesthatincumbentcarriers businesses. Explanationsforthiscanbe boast globalbrandsandgrowing Internet’s over-the-top(OTT)giantsthat a largelynationalstructure,unlikethe and multinationals’operations,maintained sector, despitebeingvitaltoglobaltrade For alongtime,thetelecommunications andconsolidation Globalisation 3/ Telekom. In2014,we sawconfirmation mobile operator, 67%ownedbyDeutsche same target:T-Mobile, thefourth largest US thatfellthroughin2014, both withthe ing arethetwomergerattempts inthe to moveintoEurope.Alsoworth mention- out ofVerizon Wireless,overAT&T plans tions raisedin2013whenVodafone pulled deals willprobablyputanendtotheques- quire itssmallestoperator, Nextel.These tor, Iusacell,beforeannouncingplanstoac- control ofthenumberthreemobileopera- sold offitsstakeinAmericaMóvilandtook focused especiallyonMexicowhereAT&T Latin Americanmarkets.Thisinterestis and theexpressionofAT&T’s interestin quashing themergerwithSprint(2013), programming, areactiontotheauthorities bolstering thecompany’s accesstoTV a partialresponsetotheComcastdeal, pay-TV provider. Thistakeoverisatonce ellite serviceproviderandsecondlargest trol ofDirecTV, thecountry’s leadingsat- the UnitedStateswouldseeAT&T takecon- Another majordealthatisstillpendingin exists insomestates. abolish thebanonmunicipalnetworksthat the FCCwhoearlyonstatedhisplansto lines, withthesupportofChairman to workwithcitiesdeploy1Gbitaccess in 2014movedforwardwithitscampaign argument infavourofGoogleFiber, which country’s toptwotelcos.Thisiscertainlyan predict thefuturewirelinestrategiesof ones. Itisbecomingincreasinglyhardto structures butalsotheirhybridandfi bre covered notonlythecarriers’copperinfra- It shouldbementionedthatthesedeals to Frontier, formorethan10billionUSD. of itslandlineoperationsinthreestates 2 billionUSD,andespeciallyVerizon’s sale landline networkassetsinConnecticutfor fact againstAT&T’s recentdivestmentof perfast accessmarket.We cansetthis in general,America’s residentialsu- leadership ofComcast,andcablecos light. Thismergerwouldconsolidatethe

www.idate.org 13 Introduction 14 DigiWorld 2015 Introduction in theworks:Ireland(Hutchison/O2) and have eithergonethroughor are currently pany. Othermergersinnationalmarkets that itissettoacquirefromthenewcom- will beabletomakeuseofthefrequencies knows forcertainwhetherDrillischTelecom proval arenottrifl ing, evenifnobodyyet course, theremediesattachedtothisap- future market. doubt havegonealongwaytoshapingthe brought inmorethan45billionUSD,willno recent AWS-3 auctionsintheUS,which ers. Here,theunexpectedoutcomesof that wouldincludespectrumandsubscrib- carrier isnowonthelookoutforproposals carrier’ strategy. TheGermanincumbent nancial –successofitssubsidiary’s ‘Un- as itwasbythecommercial–ifnotfi- found thatbiddecidedlylacking,bolstered control ofT-Mobile USA.DeutscheTelekom Iliad (Free)tomoveuptheranksbytaking an opportunityforFrenchsuccessstory failed takeoverbidbriefl y appearedtobe three nationalmobileoperators.Sprint’s ready tomakethetransitionfromfour that theFCCandDOJwereclearlynot the sameperiod. earned onretailmarket servicesdecreasedby17%during Aggregate revenue,includingwholesaleincome. Revenue 1. kets sawtheirrevenueshrinkby26% operators inthefi ve largestEuropeanmar- ing thatbetween2008and2014,mobile per country. Here,itisworthremember- operator populationtodecreasethree lessen marketcompetitionbyallowingthe fi nd outwhetherauthoritieswouldagreeto Europe’s biggestmarket.Thegoalwasto something ofatestcaseasitinvolved will givebirthtoanewnationalleader, was (KPN) mergerinGermany. Thedeal,which the nodtoO2(Telefónica) –E-Plus Here inEurope,theauthoritiesfi nally gave convergence fi for opts Europe 4/ xed-mobile 1 . Of the wakeof BT-EE merger, combining Britain. Other deals willoccurintheUK riers andthetopfourmobile operatorsin overlap betweenthetopfour wirelinecar- Orange. Oneyearago,there hadbeenno from jointownersDeutsche Telekom and of theUK’s largestmobileoperator, EE, in 2001,andwhichlastyeartookcontrol quired todivestitselfofitsmobilebusiness of 2014goestoBT, whichhadbeenre- and mobile.Butthemostspectaculardeal ferent relevantmarkets,inthiscasefi xed tion toapprovemergersthatinvolvedif- upon antitrustauthorities’naturalinclina- the marketsandbanks,toplay Liberty Global’s Europeansagatoconvince cable momentumcreatedbyVodafone and SFR. Alticemanagedtocapitaliseonthe control ofitssubsidiary, themuchlarger eventually wonVivendi’s approvaltotake cable companyNumericable(Altice)that tween mobileoperators,itwasthesmall the marketwasexpectingamergerbe- Vodafone hasnooperations,andwhere telco, HellasOnline.InFrance,where going ontoacquiretheGreekwireline ONO formorethan7billionEUR,before cally, acquiringtheSpanishcablecompany In 2014,itcontinuedtoexpand,methodi- Cable &WirelessthenKabelDeutschland. telco engagedinitssuccessfultakeoversof frastructure andproducts.To thisend,the assets bybackingthemupwithwirelinein- back in2012,seekingtoprotectitsmobile the modelintoEuropeanlandscape months, itwasVodafone thatintroduced mote theirquadrupleplaybundlesinrecent grated operatorshavebeenworkingtopro- nies. Beyondthefactthathistoricallyinte- WiFi strategiesofleadingcablecompa- table intheUnitedStates,asidefrom vergence, atopicwhichisnotreallyonthe in theacceleratedpaceoffi xed-mobilecon- Europe in2014.Thatwasmoretobefound But noneofthesewerethebigsurprisein Denmark (Telenor/TeliaSonera) aswell. probably inNorway(TeliaSonera/Tele2) and built inEurope. small cableempirewhichJohnMalonehas see Vodafone takeoverLibertyGlobal,the formational potentialofadealthatwould analysts alsohaveakeeneyeonthetrans- gence ofpan-Europeanoperators.Market other deals,whichwillleadtotheemer- began withnationalintentionswillleadto a dominoeffecttooccur:mergersthat tionals amongsttopEuropeantelcosfor Finally, therearealreadyenoughmultina- the AlticetakeoverofPortugalTelecom. proven bytherecentannouncementof levels thatarefourtimesEBITDA–as and thebanksarenolongerputoffbydebt shortage ofcashonhandtofi nance deals, is slowingorhaslevelledoff.Thereno and thedeclineinrevenuemargins however. Circumstancesareimproving, Our currentassessmentismorenuanced, kets andoperatorsappearedtoofragile. the past,andstateofEuropeanmar- synergies weremuchlesssignifi cant in has beenacautiousone.Thepotential border mergers.Ourpositionupuntilnow egies andsynergies,willleadtocross- driven largelybynationalmarketstrat- swered iswhetherthesedeals,whichare The questionthatnowremainsunan- ficonvergence. xed-mobile internal mobilemarketconsolidationand hierarchies, as well asthedegreeofcontrol long waytodetermining thesector’s future secure successfultakeoverdeals willgoa to appropriatenetworkvirtualisation and kets upto2025,theability of operators development scenariosfortelecom mar- As weshallseelaterinthischapter, inthe market fortelecoms. under wayinBrusselstoachieveasingle would gosomewaytobolsteringthework the emergenceofpan-Europeanoperators work, whilethestillhypotheticalscenarioof cisms oftheEuropeanregulatoryframe- tional marketconsolidationandrecentcriti- a linkbetweentheinexorabletrendofna- In anyevent,itisimpossiblenottodraw is nowanonlineeconomy. that playershaveoverdistributioninwhat members oftheGAFA conclude that,eachintheirownway, the back atourchroniclefor2014wecaneven and ahandfulofdominantplayers.Looking fi ned bytheemergenceofglobalbrands ture likelihood,theInternetwasquicklyde- If telcoglobalisationcontinuestobeafu- economics all,orplatform takes Winner 5/ . Google, Apple,FacebookandAmazon 2. division anditscloudproducts. by closeto15%andhigherstill foritsAWS smartphone, butstillsawitsrevenue climb suffered aresoundingfailure withitsFire ing 2billionUSDforOculusVR.Amazon more some21.8billionUSD,beforespend- over ofWhatsAppinadealfi nally worth market ambitions,anditsewedupitstake- mobile Internet;itnolongerhidesitsvideo also madethesuccessfultransitionto in themobilepaymentmarket.Facebook and nowitisworkingtogainafoothold a streamingservicetoitsmusicbusiness, ver ofBeats,creatinganopportunitytoadd its biggest-everacquisitionwiththetakeo- the lastquarterof2014.Lastyear, itmade released in2007,onparwithSamsung smartphones sincethefirstiPhonewas Apple hassoldmorethan700million success ofitseighthgenerationiPhones. now closeto150billionUSD,thanksthe in marketcapitalisationandcashonhand, siderably bolstereditstopglobalranking acquisition ofNestLabs.Applehascon- Google Carandconnectedthingswiththe ing intosectorssuchasautomobileswith market. Ithascontinuedtodiversify, mov- beneficiary ofthegrowingonlineadvertising provider ofmobileOS,andisstilltheprime engine market,isstillbyfarthelargest Google continuestodominatethesearch dominance growinrecentmonths. 2 quartetsawtheir 15 www.idate.org Introduction 16 DigiWorld 2015 Introduction are aperfectillustration –iscombinedwith social networking sites,OSandappstores fect’ –ofwhichtheleadingsearch engines, the differentclienteles.This ‘networkef- ket, developscrossovereffects between form, whichconstitutesamulti-sided mar- giants’ businessplans.Aneffi cient plat- economics whicharebasedontheInternet expression tothepropertiesofplatform Nobel PrizewinnerJeanTirole, applythis Recent worksbyeconomists,including gree totheexpression‘ The fi rst questionharksbacktosomede- fl uenced agreatdealbytheseparameters. Internet overthecomingdecade,willbein- scenarios below, whichexplorethefuture are farfromresolved.Thelikelihoodofthe on thesectors,anddebatesmatter though theyarehavingaprofoundeffect delve furtherintotheseissueshere,even trust digitalmarketplayers.We willnot can besummedupbywhetherornotthey how consumerfeelingswillchange,which curity andprivacy–and,moregenerally, arenas –includingantitrust,taxation,se- pact thatpublicpolicieswillhaveinseveral templating thissecondquestionistheim- What naturallycomestomindwhencon- their ongoingrise? ing upagainstresistanceandobstaclesto so powerful?Inwhatareasaretheycom- questions remain.WhatmakesGAFA(M) Under thesecircumstances,anumberof and usersofearlierversions. etised: itwillbefreeforagreatmanyOEM Windows 10operatingsystemwillbemon- also workingonchangingthewayitsnew Android versionsofitssoftwaresuite.Itis Windows andOffi ce bydevelopingiOSand the companyseveredtiesbetween of marketshareinconnecteddevices, CEO. FacedwithWindows’ongoingloss decisions, undertheimpetusofitsnew handset business–hasmadetwomajor market afterhavingtakenovertheNokia its abilitytofi nd itsfootinginthemobile Even Microsoft–whichhasyettoprove winner takes all’ takes winner . several markets. the rivalriesthatmaybespreadoutover exorable risenonethelessdoexist,beyond Areas ofresistancetothisseeminglyin- them, andfoldthemintotheirecosystem. Internet giantshavethemeanstoacquire are developingoutsidetheirplatforms,the add herethat,evenifpromisinginnovations way togainaccessthemarket.We will start-ups whooftenseethemastheonly forms, eitherforendusersoryoung fully takeawaythetrueeffi ciency ofplat- the platformmanagers.Butthiscannot party applicationsandthosebelongingto platforms, ordiscriminationbetweenthird- limit theexclusivityagreementsimposedby systems. Antitrustpoliciescanserveto adapt asubtledialecticonopenandclosed fully, theyneedtoconstantlyengageinand also fromInternetusers.To dososuccess- from thirdpartiesandappdevelopers,but efficient meansofcapturinginnovations open ‘innovation’.Platformsareindeedvery form efficiency isalsofuelledbythetrendof let alonesucceed.Indigitalsectors,plat- ing itdiffi cult foracompetitortoemerge, the collectionandutilisationofdata,mak- notions ofeconomiesscale,singularlyin having takenover theIBMPCbusiness, fectly embodied byLenovo.Ten yearsafter in thedevicemarketconfirmed, asper- not surprisedtoseeChinese ambitions in telecomnetworkequipment. We were customed totheinexorablerise ofHuawei 2014 wereinChina.We havebecomeac- of 10newLTE usersaroundtheworldin market. TheGSMAreportsthatfourout fl ourishing intheChinesetelecomservices We knowoftheindustrialtitansthatare els thathavemadeGAFA sosuccessful. are, moreorless,emulatingthemainmod- of courseChina,wefi nd companies that giants. InJapan,SouthKorea,Russiaand tations toglobaldominationbytheInternet We canstartbyunderscoringcertainlimi- ambitions China’sgrowing 6/ development. control overthefi nest talentsinsoftware vals forpromisingyoungstart-ups,and used tocompetingwiththeirnewAsianri- The GAFA quartetisgoingtohaveget cord amountofmorethan25billionUSD. the NewYork exchange,whichraisedare- cially Alibaba’s much-talked-aboutIPOon veteran Chineseportal,Sina–andespe- blogging siteWeibo –aspin-offfromthe Rakuten, followedbythearrivalofmicro- being takenoverbytheJapanesefirm vice markets.2014kickedoffwithViber ment marketfromtheirambitionsinde- or Chineseambitionsinthenetworkequip- us thatwecannolongerseparateAsian But severaleventsinrecentmonthstell Japanese consumerelectronicsmarket. the samedeclinetheyoncetriggeredin positions, astheymaybepoisedtosuffer concerned aboutthefuturesecurityoftheir Korean marketleadersshouldbejustifi ably after onlythreeyearsofoperation.South year, andwhichisvaluedat45billionUSD largest smartphonesupplierinQ4oflast of Xiaomi,whichbecametheworld’s third astonishing stillhasbeenthemeteoricrise smartphone businessfromGoogle.More more signifi cantly, acquiredtheMotorola Lenovo tookoveritsserveroperationsand, use ofGAFA platforms.Allthiswhile also building blocks, raisethecapitalandmake ies toaggregateskills,fi nd thesoftware ingly richenvironmentfound inlargecit- they cantakeadvantageof the increas- selves fromexistingplayersand products, Even iftheydoneedtodistinguish them- sumer basedonanideaandakillerapp. every sector, whocreatevaluefor the con- There isaplacefornewintermediariesin Airbnb, Uberandtheirilkarenotalone. ers inverticalmarketsrecentmonths. the spectacularriseofseveralnewcom- Another sourceofconcernforGAFA is players market andvertical platforms 7/ Horizontal market structureemerge. without afi ght, asnewmodelsanda ing torelinquishcontrolovertheirmargins these marketstodayarecertainlynotwill- healthcare. Theheavyweightsdominating ing sectorssuchasautomotive,bankingor ance fortheGAFA quartet,whenenter- is alsocreatingapotentialareaofresist- phors, theverticalisationofdigitalmarkets At theriskofabusinggeometricmeta- form ofreferenceintheirsector. proving QoSandQoE,tobecometheplat- alike) andtheattentionbeingpaidtoim- targets (consumersandserviceproviders benefi ting fromtherateofgrowththeir also clearthat the ultimatetargetforsome cal monitoring. Asitstands,however, itis es, asintheareaofhealth-related ormedi- which willtranslateintothesale ofservic- can alsoidentifyasecondbusiness model, the first wearablesandsmartwatches.We product sales.Suchisthecase todaywith talising ontherevenueearnedearlier connected solutionrolloutstodayarecapi- that arepossible.Asizeablepercentageof new digitalworld,andthevariouspositions area ofactivitycanbeincorporatedintothe good understandingofthemanywaysan a greatdealofattentionin2014,offers and theInternetofThings,whichattracted In thisrespect,thedevelopmentofM2M young people. some materialgood,particularlyamongst services candiminishthedesiretoacquire the plethoraofcarpoolingandcar-sharing economies. Recently, wehaveseenhow brought aboutthedeindustrialisationofour manufacturing industryandpoliciesthat the somewhatsimplisticoppositionof gument thatwewerelikelytohearwas – musicbeingaprimeexample.Onear- and servicesthatcouldbedigitisedquickly appear toapplychiefl y tothoseproducts For sometime,thedigitalshake-updid and data ever-growing asa service… Anything 8/ 17 www.idate.org Introduction 18 DigiWorld 2015 Introduction a stand-aloneversion. America’s topcablecompanies,announced whose fateiscloselyboundupwiththatof pen aseriesofdealswithISPs.AndHBO, After falteringbriefly, 2014sawNetflix is alsobeingfeltbytelcosandcablecos. time. Butthistrendofdisintermediation more automatic,andtakingplaceinreal nies asadplacementisbecomingmoreand The sameappliestoadvertisingcompa- above alltocutTVnetworksoutoftheloop. mand (VOD),bothfreeandpaid,threatens the adventofOTTdistribution.Video onde- sector, asinothers,isbeingshortenedby cal beforeitstime.Thevaluechaininthis the TVsector, whichwecouldsayisverti- shot ofrecenttrendsbypausingtolookat But ouraimhereistocompletesnap- these pages. tually everyothertopicbeingcoveredin last year–and,forthatmatter, aboutvir- around thecompany’s arrivalinEurope globalisation –astherewasalotofbuzz But wecoulddoitagainwhentalkingabout We havealreadymentionedNetfl ix once. Still. isking. Content 9/ competitive advantage. sources attheirdisposalgivesthemareal trump cardhere,asthediversityofdata jor ‘horizontal’platformsholdapotential still largelyhypothetical,theInternet’s ma- need torecognisethatsuchaprospectis with aviewtomonetisingthem.Evenifwe players liesincollectingandutilisingdata, ried, theyare abletodevoteagrowing had topayhave theirprogrammescar- And, freefromthefeesthat TVchannels them toinvestinever-increasing budgets. best projects.Theirglobalfootprint allows Netfl ix andAmazonareallvyingforthe vice providers.IntheUnited States, HBO, is becomingascarceresourceforTVser- and contentproviders.High-quality here appeartobetheproductionindustry bring downprices,theprimebenefi ciaries If consumerscanhopethatcompetitionwill rapidly globalisetheirbusinesstokeepup. are multinationalsatbest,havingto All thesame,Europeancompanies,which lost thebattletogiantInternetnewcomers. specialised companiesarefarfromhaving As inotherverticalmarkets,thesector’s ITV network. tion company, Leftfield,bytheBritish and thepurchaseofAmericanproduc- companies HalfYard and495Productions, RTL of,respectively, Americanproduction German heavyweightsProSiebenSat1and studio Warner Bros.,thetakeoversby company, Eyeworks,byveteranHollywood year: theacquisitionofDutchproduction the impetusbehindaseriesofdealslast tional productionconglomerates.Thiswas thrust ofthesedealsistocreateinterna- broadcaster integration,theunderlying dition tothistrendofverticalproducer- group), EndemolandCOREMedia.Inad- venture betweentheShineGroup(Murdoch tion companyAll3Media,alongwithajoint Liberty Globaltakecontroloftheproduc- up withthetimes:2014sawDiscoveryand ments byveteranplayers,workingtokeep king. Thishasresultedinmassiveinvest- began openingup:onewherecontentis the TVvaluechain,aneweraoftelevision tors, hadstrengthenedtheircontrolover ming, whoweretypicallynetworkopera- At atimewhenprovidersofTVprogram- have agrowing influenceonourdigital region, eventhough Africawillnodoubt dress thedevelopmentstaking placeinthat tailed inthisDigiWorld Yearbook donotad- vast majorityoftheeventsand marketsde- bright optimismorcrippling despair. The East withoutresortingtoclichés –beit it ishardtotalkaboutAfricaandtheMiddle lation ofoverabillionpeople.Inmanyways, Africa isthesecondcontinentwithapopu- Europe… for forecast double that IP10/ traffi original content. percentage oftheirincometoproducing c growth in Africa will will inAfrica c growth tem, butalsoto freeuplowfrequenciesfor nity notonlyto overhaulthetelevisionsys- transition todigitalTVprovides anopportu- region, including 12 newones in 2014. The 4G: 29LTE licenceshavebeenissued inthe build out3Gnetworks and begin to deploy infrastructure-sharing andoutsourcing, to region. We arealsoseeingacleartrendof European and Indian multinationals in the emergence of African-born, Middle Eastern, very fragmented, but we are witnessing the across thecontinent.Nationalmarketsare the construction of optical fibre routes saw new submarine cables open up, and 2014 iscauseforacertainoptimism.We reigns inmanycountries,thenewsfrom obstacles createdbytheinsecuritythat decades ahead.Withoutunderstatingthe growth fortheInterneteconomyin Saharan Africawillbethechiefsourceof More specifically, alongwithIndia,sub- and theGulfstates. Nigeria, SouthAfrica,Egypt,theMaghreb if thesituationismuchmorenuancedin is naturallyverylimitedanddifficult,even stances, theabilitytoaccessInternet 1% to10%atmost.Underthesecircum- penetration ratesthatrangefrombelow 3G or 4G, and that wireline networks have fewer thanoneinfiveusershasaccessto payment systems. But it is also true that pecially exceptionaldevelopmentofmobile mational powersofthissurge,andthees- of reportshaveunderscoredthetransfor- users havemultipleSIMcards.Anumber close toandevenabove100%,asmany 500 million today–withpenetrationrates lion mobileusersin2000tomorethan market that hasgone from around 15 mil- mobile surgeonthatcontinent,creatinga Everyone is aware of the extraordinary ers ontheplanetin2014livesAfrica. One outofeverythreenewmobilecustom- this introductionwithfinaltrend. Africa in 2014. And why we will conclude its firstDigiWorld Yearbook devotedto world. Which is what led IDATE to publish some thoughtsfromourexperts. for thethreemainsectorsup to 2025,and deliver avarietyofdevelopment scenarios hold instore.Thefollowingpagestherefore tailed explorationofwhatthefuturemight edition of theYearbook, namely a morede- wanted to introduce a new feature in this the industryduringyeargoneby, we In additiontothesetentrendsthatshaped DigiWorld beforethedecadeisup. play anincreasinglyprominentroleinthe the markets of Africa and theMiddle East For allofthesereasons,weexpecttosee formational potentialofdigitaltechnologies. Lagos andJohannesburg about the trans- starting totriggerdebatesinsuchcitiesas the stillfuzzynotionof‘smartcity’is Africans willliveincitiesby2050,and the African continent: more than 50% of metropolises that are springing up on Lastly, innovation will also lie inthe vast zero rating. new pricing schemes, including Facebook’s of white spacesfor TV broadcasting, and of stellations ofLEOmicrosatellites,theuse structure solutions,involvingballoons,con- with pioneer trials of unconventional infra a seriesofannouncementsin2014,along growth fortheirservices:theywerebehind the USseecontinentasanewsourceof Africa. LeadingInternetcompaniesfrom to laythegroundworkforInternetin also satelliteoperatorsthathaveworked And itisnotonlytelecomoperators,but number ofconsumers. at pricesthatareaffordableforagrowing and tabletsarecomingontothemarket mobile systems.Inaddition,smartphones *** 23 March 2015 March 23 Yves GASSOT Yves CEO, IDATE CEO, -

www.idate.org 19 Introduction 20 DigiWorld 2015 Introduction telecom and TV industry scenarios scenarios for 2025 Internet, Internet, T the growingrestrictions imposedbypublic rejection ofhaving theirdatamonetisedand exchanged. Thecombination of consumer limiting theconfi dentiality ofthedatabeing found riskstopublicsafetyarguments for ambivalence, eveniftheysee inthenew- vices. Regulatorsarekeenly aware ofthis novative andusuallylow-costorfreeser- sales targeting),andhavingaccesstoin- (security, privacy, sometimesintrusive all theensuingrisksandinconveniences tween controlovertheirpersonaldata,with stantly havingtoweighthetrade-offbe- majority ofusers.Internetusersarecon- also beingarealsourceofconcernforthe of agreatmanyserviceproviders,while central ingredientinthebusinessmodels towards dataprivacy. Privatedataarea ture attitudesofbothusersandregulators The fi rst mainuncertaintyconcernsthefu- of ecosystems. access toprivatedataandtheopenness are concentratedaroundtwokeyissues: the majoruncertaintiesintoaccount.They tween nowand2025,wefi rst needtotake To analysehowtheInternetwillevolvebe- formation overthenext10years. expanding thepotentialofdigitaltrans- hold, andcontributetoaccelerating ing. Thereislittledoubtthattheywilltake teraction technologies,RFIDand3Dprint- towards realmaturity, aswithmobilein- are beingembraced,manyofthemheading cess andsensors.Nownewtechnologies mobility, socialnetworks,high-speedac- technologies –cloud,analytics/bigdata, on thedevelopmentofcombinationskey of newverticalmarketshasbeendrawing els. Inmorerecenttimes,theconquest ardised technologiesinlowernetworklev- which enabledtherapidspreadofstand- The future of the Internet lay initstechnicallyopenenvironment, he primarydisruptionoftheInternet to thefore. trust suitscouldbringopenstandardsback the of theInternetecosystem.Allsame, counter totheoriginalstateofopenness proprietary technologiesaretendingtorun ing returnsfromlargeplatforms.Their talised onnetworkeffects,andtheincreas- gence ofafewpowerfulplayerswhocapi- software-centric onehasenabledtheemer- connecting ahostofdomains,tomore work-centric universe(TCP/IP)forinter- transition fromaninitiallyveryopen,net- how thevaluechainwillbeorganised.The The secondmainuncertaintyisabout centric businessmodels. companies toswitchmuchlessdata- tection andpublicsafety, willforceInternet authorities, inthenameofconsumerpro- new disrupters inverticalmarketssuchas forming themselves intoplatforms:the will beothercompaniescapable oftrans- and acquisitions.Theirmain challengers of theirplatformthroughdiversification ment, andaresteadilyincreasing thevalue creative environmentforsoftware develop- They benefi t fromtheirexceptionallyfertile and servicestoconsumersbusinesses. vertising revenue,andthesaleofdevices ness modelsthatrelyincreasinglyonad- out fromthepackwiththeirmixofbusi- without rivals,though,whilstalsostanding by publicpowers.Theyarenotentirely ers, orhavingbrutalrestrictionsimposed meeting anyrealresistancefromconsum- concentrating moreanddata,without continue todominatetheWeb. Theyare ‘platform wars’.America’s Internetgiants tinuation ofthecurrentsituation,namely The mostprobablescenarioisacon- scenario likely most the still wars’ ‘Platform ex ante ex regulationofplatformsoranti- 21 www.idate.org Introduction 22 DigiWorld 2015 Introduction and Netflix services exemplifiedbySalesforce,Airbnb outside thosevery economically-disruptive their dataandtolimitdissemination push Internetuserstotakebackcontrolof pled withmorestringentregulation,will trust in platform initiatives,possiblycou- the ‘low-cost islands’ form warisacompletelyoppositetrend: The mostseriousalternativetotheplat- islands’ scenario ‘low-cost The aged toreinventthemselves. weights fromothersectorswhohaveman- major telcos;largeretailchains;andheavy- beyond theirnationalborders;ahandfulof Tencent andAlibabawhomanagetoexpand Netflix forvideo;Asiantitansofthelikes Internet market issmallerbutcontinuesto struggling tomake adent.Asresult, the use ofprivatedata,andwhich todayare have deliberatelychosentomake verylittle panies suchasDuckDuckGo andEllothat ing toprivacy-friendlycompanies, i.e.com- over existingservices.Users are alsoturn- Platform warsscenario Platform Internet servicesworldmarketin2025 Examples of Internet companiesadaptedtoeachscenario Examples ofInternet Four scenariosfortheInternetin2025 Low-cost islands Open innovation Open 229 3% 7% - 7% , > 875 offeringmajorpricereductions World marketgrowth 27%

billion EUR w

scenario +

+ w 10 14 27% %

w %

. . The lack of 2014/2025 23%

Low Availability & openness of data High 10% Pay pertrust Ecosystem x % 1% Platform The ‘open innovation’ vs. ‘pay per trust’ per ‘pay vs. innovation’ ‘open The thorities’ support foropendata–despite of ThingsandHTML5, along with public au- as iscurrentlythecasearound theInternet financed andinstigatedbythe publicsector, development of open standards, possibly tems) completethemodel.It includesthe their owndata(aswithcertain VRM sys- schemes that enable users to monetise ened regulatoryframework,coupledwith tiple suppliers.Aflexiblebutstrength- data (including sensitive ones) from mul- of innovation, combining technologies and innovation’. Thiswouldusherinanewwave velopments basedonthepreceptsof‘open The mostoptimisticscenarioinvolves de- scenarios scribed here. combination of the different scenarios de the mostlikelyfuturewillinvolvesome We neverthelessneedtokeepinmindthat credible inlightofrecentdevelopments. Other scenariosarepossible,butless that limitdevelopmentcosts. be sustainable, thanks to open standards Global InternetservicesmarketCAGRfor2014-2015,byscenario

wars Paid contentandservices Smart productsservices E-commerce commisions Cloud services Other displayads Social ads RTB Search + 9 % + ■ Paidsocialapps ■ Paidcommunications ■ Paidmobileapps ■ Paidonlinegames ■ Paidebooks ■ Paidmusic ■ Paidvideo 12 % Closed - Source: IDATE Source: IDATE over theuseofprivatedatawouldopen number ofsecuritybreachesandscandals our socialenvironment.Anever-increasing nario resultingfromacleardeteriorationin On the flipside, we can sketch out a sce the mostprevalent. keting, andad-basedbusinessmodelsare scenario, consumersaccepttargetedmar- to theplethoraofinnovations.Underthis still enjoy amajor role as points of entry major platforms,evenifsearchengines This wouldleadtodiminishedpowerforthe current results being rather disappointing. Internet servicesworldmarketin2025 Platform warsscenario Platform Examples of Internet companiesadaptedtoeachscenario Examples ofInternet Four scenariosfortheInternetin2025 Low-cost islands Open innovation Open 229 3% 7% - 7% > 875 World marketgrowth 27%

billion EUR w +

+ w 10 14 27% %

w %

2014/2025 23%

Low Availability & openness of data High 10% - Pay pertrust Ecosystem x % 1% Platform quickly lose ground. advertising, andevencloudarchitectures, services andespeciallydevices.Targeted the dominantbusinessmodels are paid munications. Inthis‘paypertrust’world, ticularly in theareas of paymentandcom - advanced capabilitiesinsecuritytools,par- strong brandequitythatuserstrust,and as trustedthirdparties,boastingboth the wayforahandfulofplayerspositioned Global InternetservicesmarketCAGRfor2014-2015, byscenario

wars Paid contentandservices Smart productsservices E-commerce commisions Cloud services Other displayads Social ads RTB Search + 9 % + ■ Paidsocialapps ■ Paidcommunications ■ Paidmobileapps ■ Paidonlinegames ■ Paidebooks ■ Paidmusic ■ Paidvideo 12 % Vincent BONNEAU Vincent Closed

Source: IDATE Source: IDATE 23 www.idate.org Introduction 24 DigiWorld 2015 Introduction T operators can also respondbydeveloping dermining operator revenuestreams.But oped bytheleadingonlineplatforms areun- WhatsApp andOTTvideoofferings devel- On theVoIP front,servicessuchas customer loyalty. play bundles,whichareeffective insecuring panding productlinestoincludequadruple trend, clearlyunderwayinEurope,isex- ity/speed. Thefixed-mobileconvergence heavy consumptionandconnectionqual- that allowoperatorstobettermonetise premium) andformsofcustomertiering way todifferentiationstrategies(low-cost/ access systems(4Gandfi bre) opensthe more orlessrapidrolloutofsuperfast line pricingmodels.Despitewhich,the hand inwithatendencytostream- made tobringdowncosts.Thishasgone By andlarge,substantialeffortshavebeen get backonagrowthpath. Telcos cantakeseveralcoursesofactionto The future of telecoms - thechallengesofradicaltransfor- - moreorlessacommonplaceinother Internet companies. tions andservicesdominatedbythetop more complexvaluechain,withapplica- also meansfi nding theirplaceinamuch keep pacewiththetraffi c explosion.It superfast fi xed andmobilenetworksto calling, andtoinvestmassivelyinnew which hadtraditionallybeenbuiltaround them tooverhaultheirpricingschemes, systems. Thistransitionhasrequired the massiveswitchovertoIP-based mation oftheirenvironmentbroughtby and innovation; war, tothedetrimentofinvestment reduce marketcompetitiontoaprice is weighingonmarginsandtendingto sectors, increasingcompetitionthat to tackle: elecom carriershaveseveralchallenges such as services, andbydevelopingaB2Boffer data traffi c, bypromotingtheirownOTT new pricingschemes,basedonaccessand this market. variations onthedevelopmentscenariofor orientations –wecansketchoutafew in theeconomicclimateandregulatory stantial elements,startingwithchanges we canofcourseaddmoregenericcircum- Based onthesevarioustrends–towhich of scale. ing downpricesandenablingeconomies creasing theferocityofcompetition,bring- help operatorsrebuildtheirmargins,byde- and outsourcing,consolidation,can organised throughinfrastructuresharing Lastly, changesinthewaysectoris or insurance. vertical marketsasconnectedcars,health to generatenewrevenuestreamsinsuch market, andtofosternewopportunities push outtheboundariesofconnectivity by theInternetofThings,arecontinuingto ket, andtheprospectsrecentlyopenedup accelerated developmentoftheM2Mmar- at Internetcompaniesandbusinesses.The ecosystems. gaining increasing dominionovertelecom ments, andthetopInternet platforms in asteadydecreasetelecom invest- lose controloverSIMcards. Thisresults petition remainsfi erce. Mobileoperators ing riskofongoingtinymargins ascom- to theroleofwholesaler, withtheresult- Under thismodel,operatorsarerelegated ing connectivitywholesalefromoperators. cloud/dump devicemodel,andbypurchas- trol ofproductdistributionunderasmart which seesInternetcompaniestakingcon- A firstscenariois‘commoditisation’, scenario ‘commoditisation’ The carrier billing carrier orlocalisationaimed tion andtargetedadvertising. CDN, cloud,authentication,billing,localisa- a selectionofhigh-endsolutionsincluding application providersalsoenjoyaccessto their residentialandenterpriseclientele, ity ofnetworktheyprovideforaccessing Internet companies.Inadditiontothequal- and especiallysmallmid-sizeinnovative tribute mostnew digitalapplicationsand on thesizeof their customerbasetodis- of whomaremultinationalswho capitalise the emergenceofpowerfuloperators, most A thirdscenarioisthe‘digital mall’,with mall’ ‘digital The tems intointermediationplatforms networks, theyhavetransformedtheirsys- to theinvestmentstheyhavemadeintheir customers forconnectivity. Thanks,though, providers. Theycancontinuetobilltheir tion withthetopapplicationandservice terribly wellengagedinhead-oncompeti- tivity’, wherebyoperatorsareagainnot A secondscenariois‘enhancedconnec- ‘Enhanced connectivity’ cellence Telecom operatorscenariosfor2025 s4ELCOSSELLTHEMWHOLESALECONNECTIVITY s)NTERNETPLAYERSGAINAFOOTHOLD Commoditisation platforms? to smart From dumbpipe Wholesale +x -x smart cloud/dumbdevicemodel in distributionwitha % % 2014-2025 undereachscenario for telecomservicesworldwide Average annualgrowthrate , whichareveryattractivetolarge, - 2 Customer relationship %

Verticals par ex- par Product range Smart connectivity

spect tomergers andnetneutrality, aswell the sector’s regulation–suchas withre- plays out.Bythesametoken, changesto major influence onhowthisorthat scenario communications sectorwillcertainly havea consolidation thathasbegun inthetele- The scale,andthustheevolution, ofthe whether privateinitiativeorPPP. competition –andwhichschemesprevail, monopolies, organisedoligopolies,open competition evolves–recreationoflocal itisation’ scenariocouldbeaffectedbyhow also possible.Forinstance,the‘commod- narios, whilevariationsoneachoneare nuanced, combiningseveralofthesesce- The realitywouldnaturallybefarmore planning andtransportation. healthy, energy, security, education, urban as widerangingvideo,music,fi nance, ket. Theyinvestthemselvesfullyinareas against integratorsintheenterprisemar- small andmid-sizeInternetstart-ups, rectly againstthetopInternetplatforms, means thattheyareoftencompetingdi- those developedbyothercompanies.This services themselves–boththeirownand € providers/application developers enhanced connectivityservices to bothendusersandcontent Direct relationships Direct + 2 % + s Theysucceedinoffering 5 % education, transportation…) Connectivity+ s Operatorsdistribute health, energy, security, Digital mall s Operatorsinvest in qualitynetworks (video, music,finance, connectivity offers on theirenhanced vertical services s Theyrely

Source: IDATE 25 www.idate.org Introduction 26 DigiWorld 2015 Introduction the targetmarket,butratherinshare narios donotdiffersomuchinthesizeof Finally, intermsofvalue,thedifferentsce- cide thelikelihoodofscenarios. and topInternetplatforms–willalsode- as thosegoverningcyber-security, privacy Three main scenarios for the global telecom services market mainscenariosfortheglobaltelecomservices Three Growth outlets:fromtraditionaltelecomstonewbusinesses 1 100 1 300 1 500 1 700 1 900 2 100 Billion 500 700 900 € 20152016201720182019202020212022202320242025 2014 Evolve ordie? Digital mall Commoditisation Connectivity+ to secure. continue tocalltelecomoperatorsmanage of thevaluechainwhichthoseweshall vertical products) OTT services,marketplaces, (Integration, M2M,IaaS, New businesses (Connectivity &services) Traditional telecoms Commoditisation Connectivity+ Digital mall Revenue structure Didier POUILLOT Didier 80 69 63 % % %

Source: IDATE V The future of television • the secondimpactis newfoundim- • • the firstimpactofInternet: of impacts: pay-TV subscribernumbers.Thereisatrio enue, andthestagnationordecreasein Western Europe)ofTVnetworks’adrev- hard-copy sales,thedecline(atleastin decrease inliveTVviewers,crumblingDVD tion, whichhasalreadymaterialisedina is thechiefculpritofgrowingdisrup- As withanyverticalmarket,theInternet competition. a dropinpricesresultingfromincreased tisation ofTVcontent,duetopiracyand planet. Thethirdistherelativedemone- by distributingprogrammesacrossthe fully ontheeconomiesofscalegenerated companies thatarecapableofcapitalising ing, istheemergenceofpowerfulglobalised advertising model.Thesecond,countervail- tion ofmedia,andunderminestelevision’s mentation, whichcontradictstheveryno- abundance createdbythemarket’s frag- it isfacingtodayaremany. Thefi rst isthe benefi t fromthisubiquity. Thechallenges video HQ,namelytheTVindustry, maynot phones andotherdevices.Paradoxically, on giantdisplaysinpublicplaces,our audience. nels, whichonly evertargetedamass ing model,atleastforfree-to-air chan- a farcryfromTVnetworks’ longstand- portance ofcustomerrelations, whichis brands foron-demandviewers. sparring offwithpopularprogramme top distribution,andTVchannelswhen network operatorsmaybebyover-the- tems foradvertisingspace,asmanaged mated andreal-timebidding(RTB)sys- Agencies arecutoutoftheloopbyauto- simplifi cation ofthevalue-addedchain. consumers’ high-definitioncameras, ideo iseverywhere:onwebsites, drives advertiserstomovetheirmoney to spread,andreachesatippingpointthat could precipitatethecrisisifitcontinues weighing onpublicbroadcasters.Piracy pay-TV pricesandbudgetaryrestrictions worrying: decreasingadrates,adropin The fundamentalsoftheTVindustryare erosion oftheTVsector’s revenue. the UnitedStatesappeartoheraldaslow are underwayinWestern Europeandin This isourfi rst scenario.Thechangesthat of wealth andredistribution erosion Slow en masse en •the thirdimpactInternetishaving ing cheaperservices). Themiddlelinks,and and downthechain (withconsumersenjoy- programme producersandcontent owners) power, withvaluetravellingupthechain(to ever, alsotriggerashiftin thebalanceof distribution tothecloud.This would,how- in theTVvaluechain,particularly bymoving in productivitygainsthatcanstillbefound This scenariocanbetemperedbythesurge price squeezeforthesector. increasing, whichcreatesthethreatofa TV networksandon-demandservices,are are thesolepointofdistinctionbetween the sametime,programmingcosts,which to targetconsumersmoreprecisely. At plete theprocess. subtitling andevenvoice-overswillcom- proper toeachcountry, andautomated justifi ed programminggridsthatwere away withthedisparatepracticesthat demand viewingmakesitpossibletodo distribution aresteadilybeinglifted,on- lation. Thetechnicalbarrierstoglobal survived thesector’s relativederegu- the publicmonopolyerabutwhichalso guistically rootedmodels,inheritedfrom is toforcearethinkofnationallyorlin- totheInternetanditsability 27 www.idate.org Introduction 28 DigiWorld 2015 Introduction • First, it supposes that veteran TV market becoming areality. is noshortageofobstaclesto thisscenario would allowthemarkettogrow. Butthere individual mobileplans,personalTVplans has beensustainedbytheemergenceof In thesamewaythattelephonemarket tend tobegroup/householdsubscriptions. Internet user. Andpay-TVsubscriptions TV viewerinthesamewayasaregistered basis, butitisnotpossibletomonetisea are ofcoursemeasuredonanindividual to oneofindividualcustomers.Audiences ket switchfromahousehold-basedmarket be muchbrighterifthistrendsawthemar- pastime. TheoutlookoftheTVmarketwould on-demand andanincreasinglyindividual Watching videoswillbecomeincreasingly scenario media’ personal goldenageof ‘new The become themostvulnerable. especially commercialdistribution,would Three TVmarketdevelopmentscenarios do today;that they maintaincontrolover es, intheway thatInternetcompanies players managetoqualifytheir audienc- 120 140 160 180 index 100=2014 100 40 60 80 2014 20152016201720182019202020212022202320242025 Growth ordecline? Commoditisation The newgoldenage Business asusual viewing experience. vide everysubscriberwitha customised mass medium,whilealsobeingabletopro- and optimisethepoweroftelevisionasa tion ofanoxymoron,namelytoreconcile sonal media’infactdependsontheresolu- The futureofthis‘newgoldenageper- The waypay-TVservicesaremarketed• balisation ofthe TVsector:thatofservices, sonal media’would involveathreefoldglo- The scenarioofthe‘newgolden ageofper- trend globalisation The knowledge ofcustomers. Here again,successwillrequiredetailed ly, beforeexpandingtoincludeallplans. plans, nodoubtfornicheproductsinitial- to enabletheemergenceofindividual would alsoneedtochangedramatically, paths. evant datatoserviceprovidersviareturn TV networksarecapableofdeliveringrel- CRM technologies;and,fi nally, thatlive able degree;thattheymasteradvanced ming theyhavefi nanced toaconsider- the on-demandserviceswhoseprogram-

scenario Business asusual (+0.4%) (+1.4%) 39.0 96.7 VOD Transactional services Pay-TV +SVOD Pay services Traditionnal +OTT Free services (X%): CAGR2014/2025 10.5 9.6 America Europe

North (billion EUR) (+0.7%) (-1.5%) (+0.9%) 60.3 (+3.3%) 81.9

Source: IDATE nies intheUS–andtheircounterparts – which are acquiring production compa multiplying between these companies conglomerates. Already, gateways are through thecreationofpowerfulEuropean certain that,inEurope,thiswillbeachieved Contrary topopularbelief,itisbynomeans are allstepstowardsthisconsolidation. neous releaseandimposing strong brands pertise, stemming piracy thankstosimulta- on programmes,poolingtechnologicalex- rights negotiations.Optimisingthereturn of contentproducersand,byextension, Producer Classical TV Self-distribution ofvideoservicesworldwide Three TVmarketdevelopmentscenarios OTT TV Exclusive globalrights 120 140 160 180 index 100=2014 100 40 60 80 rights National 20152016201720182019202020212022202320242025 2014 TV channels Country C Country A Country B where themoneygoes OTT distributionchanges Growth ordecline? Worldwide OTT video agreements exclusive Non- service Commoditisation distributors Commercial A C B The newgoldenage Business asusual sales Integrated Self-distribution Paid peering - Listing Networks cooperation andco-production. develop through increased trans-national financial restrictions,itwillreplaceand for protectingculturalsovereignty. Despite TV sectorwillappearanessentialasset environment, atleastinEurope,thepublic blocs ofpowerfullocalplayers.Withinthis rather thanthecreationofcontinental of globalisationthatislikelytoemerge, Europe to produce. So it is more a process the United States–whicharecomingto

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Gilles FONTAINE, Jacques BAJON Jacques FONTAINE, Gilles

Retail market scenario Business asusual (+0.4%) (+1.4%) 39.0 96.7 VOD Transactional services Pay-TV +SVOD Pay services Traditionnal +OTT Free services (X%): CAGR2014/2025 consumer expenses 3% 10.5 9.6 America Europe 15%

15% North (billion EUR) (+0.7%) SG&A Technology/ Marketing Distribution & otherdirectcosts Programming (-1.5%) 12% Breakdown of 36.9% Netflix (USA) (USA) 4% HBO 46% (+0.9%) 67% 60.3 (+3.3%) 81.9 39% development 2013

Source: IDATE Source: IDATE 29 www.idate.org Introduction 30 DigiWorld 2015 The global ICT economy 1 ICT economy The global 31 www.idate.org 32 DigiWorld 2015 The global ICT economy 1 I different segmentsindetail. from sectortowhenweexaminethe gions. Performancesalsovaryagreatdeal very disparateresultsinthedifferentre- on average.Taking acloserlook,wefind vanced and emerging economies, at least is alsosomethingweareseeinginbothad- significant, however(-1.5%growth).This second halfofthe2000scontinuestobe par performanceofICTmarketssincethe in 2013.Theextentoftherelativelysub- 5.9% incurrentvalue,comparedto+5.3% a wholeisprogressing:globalGDProseby they areinlinewiththewayeconomyas rise reportedin2013.Fromadistance, rate ofgrowthcomparedtothe0.5point make uptheinfrastructure market,which Disparities between thetwosectorsthat Internet) andaccess(devices). es andcontent(telecom, audiovisual and IT supportandbackhaulsystems), servic- by infrastructure(networkequipment and chain oftheICTecosystemchain, namely ments thatmorecloselyemulatesthevalue ferent breakdownofDigiWorld marketseg- port isorganised,andhaveintroducedadif- This year we have revised the way the re- sliding values Market DigiWorld marketsareenjoyingahigher ncreasing by 4.4% in 2014, global The recovery. recovery. The For real? For PC sales. is benefittingfromanunexpected uptickin an end.Meanwhile,computerequipment the switchtoflatscreenTVshascome The impactofthebigleapforwardthatwas endless stringoftechnologicalinnovations. continues itsdownwardsslide,despitean ue) –andaudiovideoequipmentwhich had yetanotherbanneryear(+15%inval- biles –andespeciallysmartphoneswhich naturally needstobemadebetweenmo- Lastly, inthedevicesmarket,adistinction average 4%growth. tremes areTVcontentservices,postingan network operators.Betweenthesetwoex- tively) totheimpassebeingsufferedby are not due entirely (and often only rela- good timesbeingenjoyedbyOTTvendors to applications.Although,inourview, the too value is shifting from physical access indeed (seedetailsonEuropebelow).Here realities –someofwhichareveryharsh age encompasses very disparate regional to ekeouta2%increase.Again,thisaver- year, whereastelecomservicesstruggled vices, whichgrewbyafurther22%last Growth isbeingsustainedbyInternetser- growth overall, is a very disparate one. The secondgroup,whichreported5.1% a networkingredient. attributed tosoftware’s increasingvalueas for thenextfewyears–atrendthatcanbe ed to remain high, at above 5% per annum enjoying acceleratedgrowththatisexpect- On theotherhand,ITservicemarketsare businesses arecuttingbacktheirspending. through theyearsahead,asbothtelcosand ing, atrendthatisexpectedtocontinueon hand, growthinequipmentmarketsisslow- um-term outlooklooksdifferent.Ontheone have narrowed considerably. But themedi- gained 4.4 points over the previous year, growth is weakest: +0.5% for DigiWorld Europe is still by far the region where behind… lagging still markets European including enterprise ITservices,audiovisual their belts.The othersectorsofactivity, both businessesandhouseholds tightening elsewhere aroundtheworld, whichhas continues tobemoretensein Europethan general perspective,theeconomic climate thus onequipmentmarkets. From amore has repercussionsontheirinvestmentsand pressure ontheirmargins,whichnaturally the EuropeanUnion.Telcos arealsofeeling than 10%inEurope,andevenby15%inside retail telecomservicesdecreasedbymore 2008 and2014,retailmarketrevenuefor ily forthepastfi ve orsixyears.Between of whoserevenuehasbeenshrinkingstead- cially toughcompetition,fortelcos–most suffer fromaverytoughclimate,andespe- in 2013.ButEuropeanmarketscontinueto kets: arecessionin2012andzerogrowth very bleakyearsfortheregion’s ICTmar- still animprovementovertheprevioustwo around theglobe,thisverymodestfi gure is in valueforGDP. Ofcourse,aselsewhere markets in2014,comparedtoa3.6%rise rate 2013/2014: Annual growth Billion euros, in2014 Billion euros, DigiWorld marketsbyregion +4.4% 732 3 World € North America 166 1 +4.7% Latin America +6.7% 291 +0.5% 929 Europe in Europe Growth atastandstill Africa/Middle East hope ofstretchingtheireurosfarther. sumers turningtoonlineshoppinginthe more advertisers,andcon- a tremendouspace,attractingmoreand from auserbasethatcontinuestogrowat stand outastheloneexception,benefi ting the squeezeverydirectly. Internetservices services andconsumerdevices,arefeeling a thirdoftheregion’s ICTmarket growth. close to20% increase andaccountedfor services –thelatterofwhich reported IT services,devicesandofcourse Internet trated largelyinafewspecifi c segments: ertheless truethattherecovery isconcen- GDP growth,whichstoodat4.2%. Itisnev- equal –andactuallyslightlyhigherthan the onlyregionwhereICTsectorgrowthwas age pointover2013inthebargain.Itisalso crease lastyear, pickingupanextrapercent- ICT marketsenjoyedaverysolid4.7%in- Over inNorthAmerica,ontheotherhand, energy of a burst enjoy markets … asAmerican +8.4% 224 1123 Asia/Pacific +6.3%

Source: IDATE 33 www.idate.org Introduction 34 DigiWorld 2015 The global ICT economy 1 has onlymoderategrowthpotential. 37% ofglobalmarketrevenue,sonaturally ket is very well developed, accounting for North American TVandvideoservicesmar- in thisareastoppeditsrise2014.The an end,notablyformobile(LTE). Spending period ofintensedeploymentscomesto work rollouts has slowed, here again as a for thepasttwoyears.Spendingonnet- telecom servicesmarkethasbeenailing rate ofincreasesincethemid-2000s, dropped toaround2%.Enjoyingastrong er sectors,growthisholdingsteadyorhas value shotupbyaspectacular14%.Inoth- also increasedforthefirsttime,andsales the average price of the shipped devices the yearbefore.Moresignificantstillisthat United Statesin2014,or6%morethan 160 million smartphonesweresoldinthe products andfromconsumersformobiles. is stillstrong,bothfrombusinessesforIT growth of5%ormorein2014.Sodemand IT servicesanddeviceseachreportedvalue rate 2013/2014: Annual growth Billion euros DigiWorld Markettrends growth Billion euros, in2014 Billion euros, DigiWorld marketsbyregion Annual 3 World +4.4% rate € 732 2012 Accelerated growth 3 439 +3.6% North America 1 +4.7% 166 2013 3 574 +3.9% Latin America +6. 2014 291

3 732 +4.4% 7% +0.5% 929 Europe in Europe Growth atastandstill Africa/Middle East growth potential. advanced thaninChina,stillboaststrong country’s telecom markets, which areless India, heretooforITsegments,evenifthe access lines. Growth is also accelerating in customers and more than200broadband are bynowquitehigh:1.3 billionmobile in telecommarketswhereequipmentlevels year beforeinITsegments,butslightlyless reported slightlyhighergrowththanthe on average.In2014,theChinesemarket of ICT marketvalue growth in the region, growth, singlehandedlyaccountingforhalf markets, Chinaisstillthechiefpurveyorof drag the telecom market down. In emerging NTT’s plummetingrevenuecontinuesto notably onITservicesandhardware,but positive impactonenterprisespending, The recentrecoveryinJapanhashada In Asiathestatusquoremainsunchanged. in Asia growth bolstering still markets Emerging Infrastructure 304 Network +8.4% 2013-2014 224

+3,9% growth rate equipment Annual 877 IT services % & software +4.6

Telecom 1 140

& contents services +2.1% Services 1 Asia/Pacific +6.3% TV & video 408 services +4.0% 123

Internet 275 services +22.0% Access 728 Devices +2.8%

Source: IDATE Source: IDATE events itishosting:World Cupfootballin by thoseofthemajorinternationalsporting the region’s biggestmarketweretoppedup tion of2009.ButtheintrinsicICTneeds past 10yearsinfact,withthesoleexcep- weak economicgrowth–thelowestof recession in2014,andBrazilsufferedvery several countriesintheregionfellintoa wildly fl uctuating economicperformances: from massiveinvestmentschemes,despite as well.LatinAmericacontinuestobenefi t strong intheworld’s otheremergingregions The growthmomentumcontinuestobe itall of because MiddleEast and the itall,Africa of inspite America, Latin cent, inAfricaalonelastyear. past twoyears:by75million,ornineper- by morethan90millionduringeachofthe the endof2014,customernumbersgrew than 1.2billionintheentireAMEregionat mobile customersinAfricaalone,andmore a majordriver:withcloseto900million high growthrates.Marketvolumeisstill the marketsacrossboardarereporting Middle East(AME)areevengreater, andall progress. UserneedsinAfricaandthe kets ispreventingthemfrommakingreal Still, competitivepressureintelecommar- 2014 andtheOlympicGamesin2016. Didier POUILLOT POUILLOT Didier 35 www.idate.org Introduction 36 DigiWorld 2015 The global ICT economy 1.1 to 3.2%in2014. content isduetotheongoingeffervescenceofonline The solidmomentumbeingenjoyedbyservicesand disparate realities. look ataveragegrowthrates,however, wefi nd very the strongestgrowthmomentum.Ifwetakeacloser speaking, itisservicesandcontentthatareenjoying and contentfor49%devices20%.Generally count for31%ofthetotalmarket,accessservices network equipment,ITservicesandsoftware–ac- In thisbreakdown,infrastructurebuildingblocks–i.e. ing themasseparate,wasthecaseinpast. services moredirectlyintothechain,insteadofview- second, inincorporatingInternet/OTTproductsand between telecomsandITnetworkcoreelementsand, resulted, fi rst, inadistinctiononthehardware side and retail/distribution.Amongotherthings,thishas chain: infrastructurebuildingblocks,services,content DigiWorld marketsegmentsthatemulatesthevalue This yearweareintroducingadifferentbreakdownof chain… value the along all Progress excluding Internetservices,rosefrom2.8%in2013 core DigiWorld markets.Growthinthesemarkets,i.e. segments –which`aretypicallybundledtogetheras performances fromalargenumberofmoretraditional whole. Butgrowthisalsobeingcarriedbystronger only afractionofthemarket,arehelpingtosustain 20% annualgrowthand,despitestillaccountingfor Internet serviceswhichcontinuetoboastmorethan fore. Thisimprovementcanofcoursebeattributedto which isupby0.5pointscomparedtotheyearbe- All segmentscombined,growthincreasedto4.4%, markets confi rmed astrongerrateofgrowthin2014. After therecoveryannouncedin2013,DigiWorld surely but slowly recovery: The DigiWorld markets by sector was announcedmuchmorepronouncedin2014. particularly forservice-relatedactivities.Therecoverythat Inlastyear’s edition,weoverestimatedthisgrowth, 1. Global DigiWorld market by sector by market DigiWorld Global Total Devices Internet services TV andvideoservices Telecom services IT services&solftware Billion Network equipment € 3 7 3 1 4439 3913 1241 3732 1164 3574 1140 3 439 1117 1 094 0221 0421 2018 2015 2014 2013 2012 9 0 2 6 835 475 479 761 327 1076 334 424 728 921 275 314 407 708 877 225 304 392 694 839 183 293 378 809 281 1

> Contact:[email protected] sustain theirfuturedevelopment. facturers arefocusingmoreandonservicesto ment willdiminishconsiderably. Whichiswhymanu- and possiblyaccelerate,whilegrowthratesforequip- vices andsoftwarecouldseetheirgrowthholdsteady Looking furtherdowntheroad,however, supportser- ments areprogressinginamorebalancedfashion. Moving higherupthechaintoinfrastructure,develop- thanks toemergingcountries,willdrivemarketsup. erage pricesdropastheimpactofvolume,particularly continue toshiftinfavourofmobiledevices,evenifav- tablet sales.Overtime,thebalanceofpowerwilllikely step, andcompensatingfortheunexpecteddropin PC marketthatisgettingsomespringbackinits a moderaterateofgrowth(+3%in2014),with computer hardwaresegmenthasmanagedtosustain decline forseveralyears.Betweenthesetwo,the dio-video productswhichhavebeensufferingasteady in 2014)isbeingsustainedbysmartphones,andau- tween mobiles,whosehealthyprogress(+6%growth Looking atdevices,wefi nd astrikingcontrastbe- sector every in not … but for morethan20%ofthetelecomservicesmarket. them by2018,atwhichpointtheywilleachaccount of TVandvideoservicesin2012,tobeingonparwith pected togofromgeneratingbarelyhalftherevenue a steadilygrowingshareofthemarket.Theyareex- more than2%growth.SoInternetservicesrepresent thirds ofmarketrevenue,arereportingonlyslightly and telecomservices,whichaccountforclosetotwo eo servicesstruggledtoreachthe4%growthmark, 20% perannuminrecenttimes,whereasTVandvid- services, whoserevenuehasincreasedbymorethan be significantincasesofaveryhighvolumeinternationaltrade. sectors. Forcertaincategories,disparitieswithproductiondatamay and maybecountedtwiceinthecaseofconsumptionoverlapping N.B.: Thedatasuppliedhereareend-marketfiguresforeachsector

Source: IDATE Markets Markets Breakdown of global DigiWorld markets by sector, in 2014 in sector, by markets DigiWorld global of Breakdown sector by growth market DigiWorld Global Source: IDATE Source: IDATE 1 000 2 000 3 000 4 000 Billion € 0 0221 0421 0621 2018 2017 2016 2015 2014 2013 2012 7.4% 10.9% 19.5% Devices Internet services TV andvideoservices Telecom services IT services&solftware Network equipment 8.1% 30.6% 23.5% Network equipment IT services&solftware Telecom services TV andvideoservices Internet services Devices 37 www.idate.org DigiWorld markets by sector 38

DigiWorld 2015 The global ICT economy 1.2 1 both corporateandconsumerspending. the economicclimateishavingadetrimentaleffecton about theirinvestmentswhile,inabroadercontext, In astillshakyeconomy, telcosarebeingverycareful for telecomservices.Plusthetwoareinter-related. sales, bothnetworkequipmentanddevices,butalso on adownwardsslide:thisistrueofallhardware Especially signifi cant arethemarketsthatstill +0.5% in2014forallDigiWorld segmentscombined. over thepasttwoyears,growthisstillveryweak: If theOldContinenthasbeeninchingoutofred Europe still stalled its growth. 30% oftheglobalmarket,butformorethan50% Taken asawhole,emergingcountriesaccountfor and theMiddleEast. in theotheremergingregions,particularlyAfrica Asia-Pacifi c isslowingbutstillstrong,andpickingup of theworld,includingUnitedStates.Growthin ging wellbeyondtheforwardmomentuminrest Europe, whichisreportingaslightuptick,stilllag- ing backtothesameextent,however. Farfromit. recovery. Thisdoesnotmeanthatallarebounc- Virtually everyregionisenjoyinganoverallmarket world the of Europe and rest the DigiWorld markets by region 2013) andasignifi cant 23%increaseinoperator very sizeableinvestments(+56%between2008and works inparticular, withtherolloutofLTE, meantboth riod ofverystronggrowth:upgradestomobilenet- segments, theUnitedStatesisemergingfromape- especially fornetworkequipment.Inbothofthese despite adropingrowthfortelecomservices,and The NorthAmericanmarketisperformingbetter, America… North in trends Disparate Global DigiWorld market by region by market DigiWorld Global World Africa/Middle-East Latin America Asia/Pacifi c Europe Billion North America € 3 7 3 1 4439 3913 3732 1349 3574 1215 3 439 1166 1114 1 073 0221 0421 2018 2015 2014 2013 2012 9 0 2 3 285 361 239 1034 307 1411 955 224 1196 291 929 207 1123 272 1056 925 193 256 993 924 > Contact:[email protected] digit growthin2014. a specialnodtodevicemarketswhichboasteddouble- time, growthinothersegmentsisstillverysolid,with and servicesmarketshavebeenslowingsteadilyover In AfricaandtheMiddleEast,whiletelecomnetwork to acceleratethemodernisationofitsinfrastructure. Football in2014andtheSummerOlympics2016– benefi tting frommajorsportingevents–World Cup This isalsotrueinLatinAmerica,whereBrazil growth global of half than more for account economies Emerging IT servicemarkets. ments arehelpingtodriveupnetworkequipmentand slack. Inallofthesecountries,ongoingsolidinvest- situated betweenthetwoextremes,arepickingup such asIndonesia,MalaysiaandThailand,whichare despite havingacomparablepopulation.Countries ing onlyaboutaquartertherevenuethatChinais, trend inIndiaisroughlythesame,althoughgenerat- even ifgrowththereisslowinggradually. Theoverall China remainsamassivedrivingforceintheregion, vices anddevices.Onthesideofemergingcountries, to struggle,sufferingsetbacksinbothtelecomser- emerging markets.Inthefi rst group,Japancontinues that aregrowingverylittle,andmuchmorevigorous Asia-Pacifi c remainssplitbetweenadvancedmarkets Asia-Pacifi in … and to bolsterdemand. meanwhile, theeconomicrecoveryinUSishelping revenue duringthatsametime.Inothersegments, c

Source: IDATE Markets Markets Breakdown of global DigiWorld markets by region, in 2014 in region, by markets DigiWorld global of Breakdown region by growth market DigiWorld Global Source: IDATE Source: IDATE 1 000 2 000 3 000 4 000 Billion € 0 2012 201320142015201620172018 30.1% 7.8% 6.0% Africa/Middle-East Latin America Asia/Pacific Europe North America 24.9% 31.2% North America Europe Asia/Pacific Latin America Africa/Middle-East 39 www.idate.org DigiWorld markets by region 40

DigiWorld 2015 The global ICT economy 1.3 1 suffered variousfatesoverthepastseveralyears. The world’s toptelecomequipmentsuppliershave 25% inEurope. vanced regions:40%inNorthAmericaandmorethan cantly, withmostofthemarketconcentratedinad- graphical balanceofpowerhasalsochangedsignifi - for publicnetworkequipmentthanin2013.Thegeo- increase againin2014,albeitatamuchlesserrate The globalenterprisenetworkmarketreportedan 2014, withanespeciallydramaticdecreaseforSprint. after alongperiodofincrease,spendingwasdownin 2013 and2014.Meanwhile,intheUnitedStates, where telcospendingshrankbyaround3%inboth in someinstances:thisisparticularlytrueEurope the momentumissluggishatbest,andevennegative 15% inChile.Inadvancedmarkets,ontheotherhand, Brazil overthefi rst ninemonthsoftheyear, andby Telefónica kickeditsspendingupanotch:by13%in China Unicom(7billionEUR).OverinLatinAmerica, (to morethan11billionEURin2014)and+28%for their capexconsiderably:+14%forChinaTelecom country’s twoothernativeoperatorsalsosteppedup spending, makingittheworld’s largestinvestor. The in 2014,reportingcloseto30billionEURannual increased itscapitalexpenditurebymorethan18% the growingpowerofChinesetelcos.ChinaMobile prove tohavebeenayearcelebrate,thanks upgrading effortsinemergingregions.2014mayeven wireline (fi bre) andcellular(4G),butespeciallyby sustained bynewgenerationnetworkrollouts,both The telecominfrastructuremarketisstillbeing networks… telco to Upgrades demand of Revival equipment Network Global network equipment market by region by market equipment network Global Latin America Asia/Pacifi c Europe Billion World Africa/Middle-East North America € 0221 0421 2018 2015 2014 2013 2012 8 9 0 1 334 314 304 293 281 22 19 92 68 80 > Contact:[email protected] in 2014. equipment marketincreasedinvaluebycloseto4% age andprocessing.Taken asawhole,theITnetwork helping tofueldemandforlargesystems,bothstor- The developmentofcloudcomputingandbigdataare server businessin2014. and ofLenovo,whichtookcontrolIBM’s low-end close toaquarteroftheglobalmarket,aheadDell sells themostcomputersworldwide,accountingfor lost itsleadershipinmid-2013,anditisnowHPthat sults varydramaticallyfromquartertoquarter. IBM in othercategories.Fromaregionalperspective,re- hardware: stronggrowthforx86servers,butlosses with varyingperformancesforthevarioustypesof of 2014,itgainedamere0.2%(source:Gartner), reporting veryslightgrowth.Inthefi rst ninemonths Over intheIThardwaresegment,servermarketis systems backhaul their … and restructuring programmes. on amoreevenkeelaftercompletingtheirmassive 2014. MeanwhileAlcatel-LucentandNokiaareback and isexpectedtobeneckwithEricssonin around 16%foritsinfrastructureequipmentsales– the otherhand,isreportingaremarkablerise–of particularly invideoequipment.China’s Huawei,on a markeddropinswitchingandroutinggear, and even itsrevenueinfi scal 2014(endinginJuly)with Market leaderCiscosawitsgrowthratedecline,and 81512130 112 105 23 20 98 68 84 25 22 66 86 25 24 65 88 26 26 63 89

Source: IDATE Markets Players The world's top telecom equipment suppliers equipment telecom top world's The segment by growth market equipment network Global Source: IDATE Source: IDATE 100 150 200 250 300 350 Billion € Alcatel-Lucent 50 0 Ericsson 2012 201320142015201620172018 Huawei Cisco* Nokia 01 02 035 30 25 20 15 10 5 0 iclya ne uy3,21 fiscal yearendedJuly31,2014 * Note:2013network equipmentsales&2012-2013growth -17.5% -0.1% +5.9% -0.2% -3.0%

Billion € Public telecom Corporate telecom IT 41 www.idate.org Network equipment 42

DigiWorld 2015 The global ICT economy 1.4 1 and theMiddleEastarefaringbetter. two years,butdevelopingmarketsinAsiaandAfrica have beenstrugglingtostayabove3%forthepast closing. InLatinAmericainparticular, growthrates form advancedonesbut,hereagain,thegapsare By andlarge,emergingmarketscontinuetooutper- the mediumterm. 3.0% in2014–adeclinethatisexpectedtolastinto dramatic, withgrowthplungingfrom8.7%in2012to US mobilemarketthatthechangehasbeenmost it droppedbackdownto+1.8%in2014.Itisthe past twoyears,afterenjoyingaspikeof4%in2012, growth inNorthAmericahasbeenslowingoverthe the black:-1.4%in2014versus-3.4%2013,while 3 pointsin2014.Europeisinchingitswaybackinto dropping fromcloseto6pointsin2013justover two appearstohavenarrowedconsiderablyin2014, and thelatterupwards–growthgapbetween follow oppositetrajectories–theformerdownwards If EuropeanandNorthAmericanmarketscontinueto America North and Europe between gap Narrowing are progressing. fi nd realdisparitiesinthewaydifferentmarkets Looking atthesituationinmoredetail,wecontinueto cially traffi c, bothofwhichcontinuetobeverysteady. the globe,despiteariseinusernumbersandespe- slowdown isbeingfeltacrosstheboardand more moderate2%in2013and+2.1%2014.This – theglobaltelecomservicesmarketprogressedata with growthcominginat2.6%and2.7%,respectively After arelativelysolidrecoveryin2011and2012– pressure the feeling still Markets Telecom services rable decline:revenuehasbeencutinhalfoverthe The landlinetelephonemarketcontinuesitsinexo- Data fuelling mobile market growth Global telecom services market by region market Global telecomservices Latin America Asia/Pacifi c Europe Billion World Africa/Middle-East North America € 9 1 4 6 1241 1164 1140 1117 1 094 0221 0421 2018 2015 2014 2013 2012 0 0 0 1 121 405 287 309 112 373 278 298 109 363 279 293 105 349 282 288 102 334 292 281 85 > Contact:[email protected] the numberfi ve spotawayfromTelefónica. thanks toitsUSsubsidiary, whichallowedittograb one inthetop10tobereportinggrowthandthatis parate performances:DeutscheTelekom istheonly these leaders,Europeanoperatorsareturningindis- a morethan8%increaseinrevenue2013.Behind the yen.Inasolidfourthplace,ChinaMobilereported The Japanesegiantsufferedfromthebrutaldropof number threespotin2013,behindAT&T andVerizon. Topping thetelcorankingsin2012,NTTslippedto ranks the top Two Americans should pavethewaytoaneweraofgrowth. is nowunderway, coupledwithNGAnetworkrollouts, the mobilemarket’s momentum,theconsolidationthat intense andtheslowtransitionto4Ghashampered hand, wherecompetitionhashistoricallybeenmore will nodoubttaperoffaswell.InEurope,ontheother petitive pressureremainsstrong,revenueincreases nifi cantly:progresstodayismuchslowerand,ascom- and tieredplans,sotoincreasetheirARPUsig- of LTE hasenabledoperatorstobeginsellingenhanced from regiontoregion.IntheUnitedStates,advent by datatraffic, althoughtheoutlookvariesagreatdeal Over inthemobilemarket,growthisbeingsustained struggling totranslatetheirinvestmentsintorevenue. ver toultrafastaccess:inEuropeespecially, ISPsare appear tobebenefi tting fullyfromthesteadyswitcho- landline calling.Thefi xed Internetdoesnot,however, and fi xed Internetmarketsmorethanoffsetlossesin less markedthefi rst timethattheincreaseindata of thetotaltelecomservicesmarket.2014neverthe- past 15years,anditnowrepresentsamere16% 92 813118 103 98

Source: IDATE Markets Players The world's top telecom operators telecom top world's The segment by growth market services telecom Global Source: IDATE Source: IDATE 1 000 1 200 Billion € Deutsche Telekom 200 400 600 800 0 China Telecom América Móvil China Mobile Vodafone* Telefónica 2012 201320142015201620172018 Verizon Orange NTT* AT&T fsa ereddMrh3,21 fiscalyearendedMarch31,2014 * Note:2013telecomservicesales&2012-2013growth 0 13.6% -5.8% 1.4% -1.9% -8.5% 3.4% 8.3% 2.1% 4.1% 1.0% 20 40 60 80 Fixed telephony Mobile services Data &Internet 0 Billion€ 100 43 www.idate.org Telecom services 44

DigiWorld 2015 The global ICT economy 1.5 1 vices createsvalue-addedconnectivityinareasas trend: theintelligencedrawnfrominterconnectedde- the InternetofThingsarealsocontributingtothis demand (customerrelations,development).M2Mand (development, production,sales)andbetteranticipate sales), reactmorequicklytothelatestinnovations ent departments,tobettermanageinventory(orders, makes itpossibletocreategatewaysbetweendiffer- could bemanagedrelativelyautonomously. Bigdata barriers betweencertainfunctionsthatpreviously Among otherthings,thissupposesremovingthe trial, administrative,salesandmarketingprocesses. the workplaceimpliesacompleteoverhaulofindus- ternal processes.Introducingdigitaltechnologiesinto The nextstepinvolvestransformingacompany’s in- relatively small. these marketingtools,andtheinherentrisks,arealso to standoutfromtheircompetitors.Investmentsin norm, andsonolongerreallyameansforcompanies new customerinterfacesarequicklybecomingthe or bydevelopingmoretraditionalroutes.Butthese either byswitchingoverdigital/electronicchannels, offi ce, inotherwordsimprovingcustomerrelations, The fi rst coursesofactioninvolvedchiefl y theirfront setting milestonesforitsimplementation. that, theyhavemadeitpartoftheirlong-termgoals, made itacentralpartoftheirstrategies.Morethan the stakesattachedtothistransformation,andhave Businesses acrosstheboardhavebynowunderstood stages… several in Digitisation transformation ofbusinessesandadministrations. second phasebeganwithamorewidespreaddigital software platforms,alongwithmobilitysolutions.The cluding thedevelopmentofunifi ed andcollaborative stage involvedthedigitisationofworkstations,in- chief drivingforcebehindITservicegrowth.Thefi rst The digitisationoftheeconomycontinuestobe alonghaul transformation: digital The IT services Global IT services and software market by region by market software and services IT Global Latin America Asia/Pacifi c Europe Billion World Africa/Middle-East North America € 0221 0421 2018 2015 2014 2013 2012 0 3 7 2 1076 254 921 301 441 206 877 272 382 194 839 264 363 182 809 259 346 173 255 333 20 27 > Contact:[email protected] arise alongtheway. sources tomeetthelongseriesofdemandsthatwill and ITsolutionprovidersneedtocalibratetheirre- The digitaltransformationisthusfarfromcomplete, the bestpossibleconditions. between stakeholders,toachievethisobjectiveunder gies areusedtomapoutandcoordinateinteractions working towardsacommonobjective:digitaltechnolo- industry optimisation.Everyplayerintheecosystemis is tocreatevaluecollectivelybyseekingoutinter- services thatemploysharenetworks.Theaimhere the ecosystemlevel,throughcollaborativemodelsand ally, thedigitaltransformationmustalsotakeplaceat Looking beyondwhateachcompanyisdoingindividu- Western counterparts. IT companies,whichhasfaroutweighedthatoftheir lar, astestifi ed bythetremendousgrowthofIndian Meanwhile, offshoringisbecomingincreasinglypopu- the Web hashadontelcosoverthepast10years. outsourcing segment–comparabletotheimpactthat cloud computingintroducedhavehadanimpactonthe scape. Thenewpricinganddistributionmodelsthat the shortterm,tosimplifyandstandardiseITland- Cloud-based solutionshelpincreaseeffi ciency and,in tions. Cloudcomputingandoffshoringcanhelphere. tal, butoffsetbyreducedspendingontraditionalsolu- costs forbusinesses,whichshouldnotbeincremen- Naturally, allofthesedevelopmentsaregenerating constraints budgetary by in hemmed … and developers needtokeepinmind. objects isalsocreatingnewsecuritydemands,which and production.Thefactofnetworkingmore wide rangingashealthy, energy, automotive,logistics 22 30 24 32 26 34 35 45

Source: IDATE Markets Players The world's top IT services and software providers software and services IT top world's The region by growth market software and services IT Global Source: IDATE Source: IDATE 1 000 Billion € Accenture**** 200 400 800 600 Hitachi***** Fujitsu***** 0 CSC***** Microsoft* Oracle*** 2012 2013 2014 2015 201620172018 2012 2013 2014 HP** EMC SAP IBM fiscalyearendedOct.31,2013 ** fiscalyearendedJune30,2013 Note:2013sales &2012-2013growth * 1020304050600 -17.1% -11.2% +5.3% -11.8% +3.7% +2.6% +7.9% -8.5% +7.5% -4.5% ** fiscalyearendedMarch31,2014 ***** fiscalyearendedAug. 31,2013 fiscalyearendedMay31,2013 **** *** North America Europe Asia/Pacific RoW Billion € 45 www.idate.org IT services 46 DigiWorld 2015 The global ICT economy 1.6 1 +2.3% inNorthAmericaand+1.9%Europe. whereas Western marketscontinuetolagwellbehind: (+5.9%) andAfricatheMiddleEast(+4.9%), growth in2014(+11.5%),followedbyAsia-Pacifi c Latin Americanwasonceagainhometothestrongest demand (+17.3%). (-6.4%) andamoremoderateincreaseforvideoon a slowingrateofdecreaseforvideohardcopies with alevellingoffoflinearTVmarketgrowth(+3.8%), for theTVsectorof4.1%between2014and2018, and expectstoseeanaverageannualrateofgrowth IDATE forecaststhatallofthesetrendswillcontinue, average -9.2%ayearbetween2010and2013. the declineofvideohard-copysaleshasslowedtoan nual growthbetween2010and2013.Onthefl ipside, ous years:respectively+5%and+38%averagean- TV andVODexperiencedweakergrowththaninprevi- Despite turninginsolidperformances2014,linear 2014 standsat4.9%and4.6%,respectively. 2014. Themarketshareforthesetwosegmentsin tor’s mostdynamicsector:itboasted25%growthin almost caughtupbyvideoondemand(VOD),thesec- Video hard-copysalescontinuetoslide(-7.9%),now its growthworldwidestillstandsatahealthy3.8%. counts forcloseto90.5%ofthetotalmarket,and increase over2013.Linearprogrammingstillac- 407.5 billionEURinrevenue,whichmarksa4% In 2014,audiovisualservicesgeneratedatotal market overall agrowth Still Audiovisual services versus 22.6%forterrestrial.Meanwhile,witha to grow, toreachamarketshareof31.3%in2018, homes, respectively–andisexpectedtocontinue ming to27.4%and29.3%ofthemainTVsetsin now virtuallytiedwithterrestrial–supplyingprogram- in thebattleformainlivingroomset.Satelliteis slowly losingouttosatelliteandthefast-growingIPTV tively stablemarketshare,terrestrialbroadcastingis homes in2014,andappearstohavereachedarela- ming, supplying36.4%ofthemaintelevisionsin While cableisstillthechiefpurveyorofTVprogram- TV… access we how change likely will that behaviour consumer New Global audiovisual services market by region by market services audiovisual Global Latin America Asia/Pacifi c Europe Billion World Africa/Middle East North America € 0221 0421 2018 2015 2014 2013 2012 7 9 0 2 479 424 165 407 155 392 152 378 149 146 12 33 88 99 > Contact:[email protected] tronic sell-through. num), followedcloselybysubscriptionVODandelec- rates inyearstocome(anaverage21.8%peran- services areexpectedtoenjoythehighestgrowth Looking aton-demandproducts,heretooad-funded and 2018,versus+3.2%forpay-TVrevenue. sion: +4.9%annualgrowthonaveragebetween2014 is forecasttobethemainsourceofgrowthfortelevi- is expectedtocontinueplaycatch-up,advertising regions, outsideLatinAmericawheretheTVmarket ucts explainthisreversaloftrends.Ofalltheworld’s and thedevelopmentoflow-costpay-TVOTTprod- thanks inparticulartodigitisedterrestrialnetworks, +4.9% in2014.Theplethoraoffreeprogramming, than TVadvertisingrevenue:respectively+3.4%and and prepaymentformulasisnowgrowingmoreslowly revenue in2014),incomefrompay-TVsubscriptions fi nancing overthepastseveralyears(43%oftotal TV sector’s sourcesofincome.Themain new viewinghabitswillalsohaveanimpactonthe The moreorlessswiftandmassiveadoptionofthese money its earns sector the how … and which accessnetworksareadopted. be decisiveelementsinconsumerchoices,andimpact being chargedandtheproduct’s userinterfacewillall able content,theirqualityandfreshness,theprices business models.Theabundanceanddiversityofavail- of wirelinenetworksassociatedwithtraditionalfor-pay of newconsumerbehaviourpatterns,tothedetriment supply free-to-airprogramming,couldtakeadvantage The wireless,terrestrialandsatellitenetworksthat Web (OTT)couldwellthrowaspannerintheworks. linear broadcastTVandon-demandservicesoverthe current developmentofhybridproductsthatcombine If thesetrendsappeartobefi rmly entrenched,the the others. by 15.1%in2014,althoughstilltailingwellbehind solid rateofgrowth,increasingitssubscriberbase market shareof6.4%,IPTVcontinuestoenjoyavery 41016128 110 106 103 100 101 13 37 94 99 13 41 14 45 15 60

Source: DATE Markets Players The world's top media companies media top world's The segment by growth market services audiovisual Global Source: IDATE, in“Theworldtelevision&videomarket” Source: IDATE, in“Theworldtelevision &videomarket” Walt DisneyCompany 21st CenturyFox* Cox Enterprises Dish Network Time Warner Liberty Global Billion € 100 200 300 400 Comcast 0 DirecTV Viacom 2012 201320142015201620172018 CBS ereddSpebr3,21 year endedSeptember30,2013 * Note:2013audiovisualsales&2012-2013growth 01 02 035 30 25 20 15 10 5 0 +6.0% -0.7% -2.5% +59.0% +1.8% +4.3% +4.5% +11.4% +6.8% -4.9% Public funding Advertising revenue Pay-TV revenue Home videorevenue On demandvideorevenue Billion € 47 www.idate.org Audiovisual services 48

DigiWorld 2015 The global ICT economy 1.7 1 suit, bothintermsofmarketandhome-grownplayers. targeted advertising.E-commerceisEurope’s strong content (andespeciallyproductssuchasSVOD)and to revenueearnedfromcloud-basedservices,digital The UnitedStatesistheclearleaderwhenitcomes 112 EURforAsia-Pacifi c and155EURforEurope. close to350EURperInternetuserin2014versus ductive regionintermsofOTTrevenueperuser: North Americaneverthelessremainsthemostpro- for Internetservicesrevenue. ing sites,etal.In2015,itwilltoptheglobalrankings mobile apps,communicationservices,socialnetwork- singular abilitytomonetiseonlineservices:games, sive populationof850millionInternetusers,andits case inEurope.Theregionalsobenefi ts fromitsmas- rather thanthatofAmericancompanies,asisthe Rakuten, Baidu,Tencent, Alibaba,NHNandDaum, large parttothestrengthoflocalplayerssuchas more than16%from2014to2018.Thisisduein est forecastsforOTTrevenuegrowth:standingat Asia-Pacifi c standsoutastheregionwithstrong- Asia-Pacifi during thatsameperiod. growth of14.6%,comparedto2.5%fortelecoms services market.Thistranslatesintoaverageannual 2018, representingmorethanathirdofthetelecom in 2014,andforecasttoclimb475billionEURby ket, generatingcloseto277billionEURworldwide OTT Internetserviceshavebecomeasizeablemar- make to money starting services OTT services Internet bile applications.Together, theyaccountfor70% of object butonlythevalueofintermediation)andmo- so notfactoringinthevalueofunderlyingphysical merce (measuredhereonlyintermsofvalue-added, types ofapplications:cloud,searchengines,e-com- The bulkofInternetservicesrevenuecomesfromfour engines search and e-commerce mobile, cloud, the around structured Revenue Global OTT services market by region by market services OTT Global Asia/Pacifi c EU-28 Billion World RoW North America € c will take the lead in 2015 in lead the take c will 0221 0421 2018 2015 2014 2013 2012 8 2 7 2 475 327 275 225 183 14 60 42 67 > Contact:[email protected] count forcloseto10%oftheirannualrevenue. content offeringssuchasmusic.Paidmodelsnowac- small andmedium-sizedbusinessesalongwithdigital income frompaidsolutions,marketingproductsfor heavily onadvertisingaresteadilybuildinguptheir But playerssuchasGoogleandFacebookthatlean 21% and43%,respectively, in2010. par withadrevenue:34%versus30%,comparedto exclude cloudservices,paidsolutionsarevirtuallyon vices whichareprimarilyanenterprisemarket.Ifwe majority with53%ofthemarket,includingcloudser- actional services/contentsales)nowrepresentsthe The revenuegeneratedbypaidsolutions(non-trans- tion formulasandpaymentsolutionsthatuserstrust. Airbnb. Thesecompaniesarecapitalisingonsubscrip- Alibaba andAmazon,successstorieslikeUber tion themanye-commercesitessuchasRakuten, WhatsApp, QQ,LINE,DropboxandSpotify, nottomen- millions ofusers.PrimeexampleshereincludeNetfl ix, or low-costmodel–attractingtens,ifnothundredsof managed togeneraterevenuebyusingthefreemium hugely popular, butagreat manycompanieshavealso money-maker online.Ofcourse,freeservicesare free givestheimpressionthatadvertisingisonly The factthatsomuchontheInternetisavailablefor apanacea not is Advertising despite thesteadydevelopmentofm-commerce. reached adegreeofmaturity, particularlyinEurope, sic services.E-commerce,ontheotherhand,has paid communicationservicesandsubscriptionmu- – outdoneonlybyRTB(real-timebiddingforadverts), ket butalsoboastsoneofthehighestratesincrease Cloud computingisnotonlythebiggestInternetmar- 73% in2018). Internet servicesrevenueworldwidein2014(closeto 19 75 50 81 516172 158 116 112 95 96 25 59 31 68 50 95

Source: IDATE The cloud grabs market share away from other OTT services OTT other from away share market grabs cloud The Paid services outearn the free the outearn services Paid Breakdown of global Internet paid services revenue, by business model business by revenue, services paid Internet global of Breakdown service of type by revenue, services paid Internet global of Breakdown Source: IDATE, in“World internetmarkets” Source: IDATE, in“World internetmarkets” Billion € 100 200 300 400 500 0 100% 2012 2013201420152016 20172018 20% 40% 80% 60% 0% 2014 2018 * Ecuigmbl plctos Excludingmobileapplications *** ** Including * Excluding games mobile admsc(lussnls Subscription music Paid music(albums/singles) Paid eBooks Cloud *** Paid mobileapplications** Online games* Communication (VoIP,IPmessaging) OTT video Paid social services Ad funded Paid services commission E-commerce 49 www.idate.org Internet services 50 DigiWorld 2015 The global ICT economy 1.8 Smartphones still out in front in out still Smartphones computer hardwaresalesweresolid. books foreveryregion,exceptEuropewhereonly From ageographicalstandpoint,growthwasonthe downwards spiral. ued toslide,evenif2015couldmarktheendofthis ever, whichincludesreceivers andrecorders,contin- – alsoperformedwell.Theaudiovideosegment,how- Computing devices–PCs,tabletsandperipherals a steadypace,particularlyinemergingmarkets. and especiallysmartphones,continuedtoriseat By andlarge,therevenueearnedfrommobilephones, the segmentsandregions. – albeitonethatisdistributedveryunevenlybetween device marketreporteda3.5%increaselastyear Valued at686billionEURworldwidein2014,theICT trends disparate Very Devices 2014 wasthedownturnintabletsales,whichtotalled The mostsurprisingeventinthecomputersegment PC vs. Tablet est smartphonesupplier, aheadofLenovo. According toIDC,Xiaomiisnowtheglobe’s thirdlarg- ers inparticular, marketing muchcheapermodels. for AppleinQ4)tosuppliers,andChinesesuppli- both lostmarketshare(despiteaspectacularrebound The twosmartphoneleaders,SamsungandApple, 6%, whichistellingoftheongoingpressureonprices. terms ofrevenue,however, growthstoodatscarcely out ofeverythreehandsetssoldwasasmartphone.In in 2014,or27%morethan2013.Moretwo 1.3 billionsmartphonesweresoldaroundtheworld Global ICT device market by region by market device ICT Global Latin America Asia/Pacifi c Europe Billion World Africa/Middle-East North America € 0221 0421 2018 2015 2014 2013 2012 9 0 2 6 835 322 761 178 187 283 728 169 179 266 708 160 175 258 694 166 166 247 168 166 47 67 > Contact:[email protected] South Korea)arestillstrugglingtogetbackontrack. gree, theadvancedmarketsofAsia-Pacifi c (Japanand ket isholdingsteadywhileEuropeand,toalesserde- at 30%formobiledevices.TheNorthAmericanmar- in particular, valuegrowthstandsatcloseto20%,and growth isatitshighest.InAfricaandtheMiddleEast users arebuyingequipmentforthefi rst time,that Understandably, itisinemergingmarketswheremany squeeze the feeling markets European equipment continuetheirfreefall,however. have reachedcruisingspeed.Salesforphotographic lion in2013,accordingtoGfKwhichbelievesthatwe screen TVsweresoldin2014,comparedto5.6mil- high defi nition. InFrance,forinstance,5.8millionfl at further bolsteredbytechnicalprogresssuchasultra let saleshadapositiveeffectonlargescreensales, from theWorld Cup,andperhapsthesluggishtab- as expected.Television salesnodoubtgotaboost ment continuesitsdecline,butnotasdramatically The lastmajordevicesegment,audio-videoequip- the rise. In termsofvalue,thecomputermarketisalsoon by 1%overallin2014,theywereupQ4. turned inbycomputersales:althoughtheydecreased 2013. Equallysurprisingwasthestrongperformance strong quarter, saleswereactuallydowncomparedto crease in2013.InQ4,whichistraditionallyavery 5% fromthepreviousyear, comparedtoa50%in- 230 millionunitsworldwide–increasingbylessthan 48 70 54 73 57 74 69 79

Source: IDATE Markets Players Market share for smartphone sales in 2009 and 2014 2009 and in sales smartphone for share Market segment by growth market device ICT Global Source: IDATE Source: IDATE Billion € 200 400 600 800 171 millionshipments 100 150 0 50 0 1.5% 2012 201320142015201620172018 2009 36.4% 40.4% 3.5% 14.7% 3.5% 1200 300 600 900 1255 millionshipments 0 3.2% 3.6% 4.8% 2014 3.3% 4.7% 5.2% 5.6% 15.3% 25.2% 26.3% 2.5% Other Nokia Sony Ericsson TCL ZTE LG Xiaomi Huawei Lenovo Apple Samsung Mobile phones IT devices Other CE 51 www.idate.org Devices 52 DigiWorld 2015 Telecom services and markets 2 and markets services Telecom 53 www.idate.org 54 DigiWorld 2015 Telecom services and markets 2 2014 Brazil, toname onlytwo. structuring as well,includingMexicoand markets haveseenthebeginnings ofare- investigated byantitrustauthorities. Other Cable andAT&T-DirecTV –arestillbeing ers oflastyear–Comcast-Time Warner player, T-Mobile. Andthetwobiggestmerg- unable togetitshandsonthenumberfour third largestmobileoperator, Sprint,was the partofauthorities.Themarket’s come upagainstaveryrealreticenceon been ongoingforseveralyearsnow, has tion offi xed andmobilemarkets,whichhas Over intheUnitedStates,consolida- stabilise. even ifweareseeingoperatormargins expect theconsolidationtrendtocontinue, the topBritishmobileoperator, EE.We for thefi rst timesince2001byacquiring the UK,BTgettingbackinmobilegame control ofSFRinFranceand,overthere national deals:Altice-Numericabletaking Germany, SpainandGreece,twomajor telcos, followingacquisitionsbyVodafone in and inmergersbetweenfi xed andmobile tional mobilemarkets(Ireland,Germany) resulted infewerplayersoperatingna- cially inEurope.Marketconsolidationhas begins in Europe Consolidation er-acquisition deals,espe- was abanneryearformerg- loons anddronescouldalsocatchon. new unconventionalplatformssuchasbal- access solutionstowirelinesystems,while a roletoplayassupplementaryhigh-speed medium earthorbit(LEO/MEO)–alsohave lutions –bothgeostationaryandlow access inemergingcountries.Satelliteso- prime purveyorsofwidelyavailableInternet ongoing 3Gandnow4Grolloutsarethe tical fi bre networksindevelopedcountries, If LTE networksarenotlikelytoreplaceop- access linesinthesemarkets. now accountsfortwo-thirdsofbroadband broadband (VDSL,FTTH/BandDocsis3.0) high-speed mobile.Byandlarge,ultrafast broadband andbytheconvergencewith more orlessrapidtransitiontoultrafast development isbeingshapedlargelybythe In developedcountriestoday, broadband’s and mobile fi race: broadband ultrafast The account for90% ofmobilesubscriptions By theendof 2018, LTE isexpectedto senting 7%oftheworld’s mobile accounts. a baseestimatedat510million, repre- in 2014,andChinaendedthe yearwith lion markforLTE customerswasreached scribers attheendof2014. The 500mil- which washometo100millionLTE sub- up untilnow, havebeenjoinedbyChina which havebeendriving4Gdevelopments The UnitedStates,JapanandSouthKorea, LTE of rise swift very The ongoing increaseintraffi c. infrastructures, tobeablehandlethe needed replacementoffixedandmobile simultaneous accelerationinthemuch- rethink theirbusinessmodels,butalsoa requires themtorevisetheirpricingand more complexInternetvaluechain,which integration ofoperatorsintothemuch evolving. Thisincludestheproblematic common groundinthewaysectoris tions remainveryspecifi c, thereissome If nationalandregionalregulatorysitua- xed translate intoa steadyriseindatatraffi c. the development oftheLTE ecosystem,will prices andlow-endmodels, coupled with uity ofthesmartphone,thanks tolower smartphones. Thegrowingand near-ubiq- sold worldwide,ofwhich1.2 billionwere translated into1.9billionmobile phones Telephone salesroseby6%in2014,which into accountandhandledseamlessly. the InternetofThingsalsoneedtobetaken rounding Machine-to-Machine(M2M)and but thespectaculardevelopmentssur- shorter latencyandincreasedautonomy, pect toseespeedsof10Gbpseventually, dense andmorefl exible networks. We ex- ertheless likelytodelivermoreagile, standardisation hasnotyetbegun.Itisnev- 5G isalreadybeingdiscussedwidely, but and homespots. cally, andconnectthemtoWiFihotspots ier toidentifysmartphoneusersautomati- by PasspointandHotSpot2.0makeiteas- lets. Thelatestimprovementsusheredin traffi c generatedbysmartphonesandtab- offl oading ofasizeablepercentagethe therefore hasanimportantroletoplayin networks, willcontinuetoincrease.WiFi accounts for50%ofdatatraffi c onmobile and unicastnetworks.Video, whichalready foreshadowing themergerofbroadcast mercial servicerolledoutinSouthKorea, broadcast mode,sawapioneerpre-com- macro network.Anotherrecentinnovation, coordination betweensmallcellsandthe networks, akaHetNets,willenablebetter ture: carrieraggregation.Heterogeneous speeds of300Mbpsthankstoitschieffea- 2014, whichmakesitpossibletodeliver of operatorsrolledoutLTE-Advanced in Duplex (TDD)–arecompatible.Anumber Division Duplex(FDD)andTime Division the world,anditstwoversions–Frequency remaining 4Gtechnologybeingusedaround Long Term Evolution(LTE) isnowtheonly making reallystrides. started laterinEurope,butcoverageis in JapanandSouthKorea.4Grollouts schemes. tiate themselves,andrevamptheirpricing tors, allowingthemtofi nd waystodifferen- This shouldbeapositiveadvanceforopera- mised forMachine-to-Machine. Power WideArea(LPWA) networksopti- also valuable,forbothWiFi and newLow spectrum toLTE, unlicensedspectrum is the useofnewfrequencies,and refarming ing usedforTVbroadcasting.Alongwith and 600MHzbandsthatiscurrentlybe- highly covetedspectruminthe700MHz the seconddigitaldividend:auctioningoff are expectedtobeallocationyearsfor tion. Generallyspeaking,2015and2016 sector’s growthanditsindustrialorganisa- remains averyinfl uential ingredient inthe lion USD,servesareminderthatspectrum expectations byraisingcloseto45bil- United States,whichsurpassedtheFCC’s The successofAWS-3 auctionsinthe commodity aprecious still Spectrum their networkfunctionalitiesinrealtime. agile, managingtheparametersgoverning from multiplesources,andbecomemore banking ontheabilitytoemployhardware more openmarkets,whileoperatorsare Operator supplierscanhopefor, orfear, the network.Severaleffectsareexpected. the systemusedtooperateandsupervise schism betweennetworkequipmentand software splitincomputing,creatinga trigger asplitcomparabletothehardware/ Virtualisation (NFV).Thesechangeswill (SDN), combinedwithNetworkFunctions velopment ofSoftware-Defi ned Networking is inthearenaofsoftware,withde- convergence offi xed andmobilesystems, doubt alsohavearoleinfurtheringthe Another overridingtrend,whichwillno up software down, costs networks: Changing Frédéric PUJOL Frédéric 55 www.idate.org Introduction 56

DigiWorld 2015 Telecom services and markets 2.1 2 connections. and particularlyonvideo,whichisimprovedbyfaster a greatdealonwhatuseismadeofthenetwork, The extentoftherevenuebeinggenerateddepends much moregradual. dermine ambitionsandprogressinmobilenetworksis growth isstillstrong,evenifrolloutcostsoftenun- speed mobilesystems.Inemergingcountries,volume tion toultrafastaccess,andconvergencewithhigh- ing shapedchiefl y bythemoreorlessrapidtransi- above, broadband’s progressintheseregionsisbe- a greatmanyindustrialisedcountries,aswenoted Having reachedanadvancedstageofdevelopmentin 901.2 millionattheendoflastyear. phone lines,whosenumbersareshrinking:totalling 2014, broadbandlinesaresteadilyovertakingclassic Estimated at719.3millionworldwidetheendof to grow, albeitmoreslowlythaninthelate2000s. The numberofhigh-speedaccesslinescontinues lines phone outnumber to set lines access High-speed broadband behindultrafast force Driving Fixed broadband the dominantformofaccess:inUnitedStates, speed lines.Insomecountries,ithasevenbecome Docsis 3.0)nowrepresentsmorethanathirdofhigh- Worldwide, ultrafastbroadband(chiefly VDSL,FTTH/B, close toandevenabove40%insomecases. eral Europeancountries,suchastheNetherlands,are 15% inChina.DensitylevelsSouthKoreaandsev- in theUnitedStatesandJapan,comparedtojustover per 100people–naturallydiffers:standingat31% terms ofdensity–measuredinthenumberlines gether accountforscarcely15%.Thesituationin base: tocompare,Europe’s fi ve biggestmarketsto- account forcloseto50%oftheworld’s broadband spot Japan,onefi fth. Thesethreemarketscombined half thatnumberoflinesandJapaninthree number twospot,theUnitedStatesreportsbarely China isbyfartheworld’s biggestmarket.Inthe With morethan200millionhighspeedaccesslines, base global the of 30% to close to home China Fixed broadband subscribers by region by subscribers broadband Fixed Latin America Asia/Pacifi c Europe North America subscribers Million World Africa/Middle-East 0221 0421 2018 2015 2014 2013 2012 4 7 1 5 857 757 385 231 122 719 344 210 115 679 325 202 111 641 305 193 108 287 183 104 51 12 39 79 25 64 21 59 18 55 15 51 > Contact:[email protected] Europe’s fi ve biggestmarketscombined. er, foracustomerbasethatisslightlysmallerthan broadband revenueintheUnitedStatesis50%high- to morethan60%intheUnitedStates.Asaresult, 18% ofthetotalbaseasmid-2014,compared ultrafast broadbandaccountsrepresentedlessthan means lessofanimpactonrevenue.IntheEU-5, in thesameproportionsasUS,whichnaturally Europe, customernumbershavenotyetincreased broadband planshadlessofanimpactonARPU.In Elsewhere intheworld,introductionofultrafast ISPs chargeextraformanagedVoIP. a pay-TVoption.AlsoworthnotingintheUSisthat AT&T’s U-Verse oftenexceeds100USD,ifitincludes access revenue:amonthlybillforVerizon’s FiOSor ticular areplayingalargepartinbolsteringultrafast to boosttheiraccessrevenue.TVservicesinpar- US, increasedconnectionspeedshaveallowedISPs broadband ARPUexceeds40EURamonth.Inthe In theUnitedStatesandJapan,butalsoinSwitzerland, EUR 40 topping ARPU has optedlargelyforFTTH/B. much lessprevalentthanintheUS.Meanwhile,Asia made moresimilarchoices,largelybecausecableis VDSL (AT&T) orFTTH(Verizon). InEurope,ISPshave HFC/Docsis 3.0.Telcos thererespondedbydeploying footprint oftheCATV networkstoupgradethem cable companieswereabletocapitaliseonthevast country insidethesameregion.InUnitedStates, widely fromregiontoregion,andevencountry access subscribers.Thetechnologiesemployedvary sents morethanaquarteroftheworld’s ultrafast According tothelatestestimates,fi bre nowrepre- of 2014,thecountry’s FTTH/Bbasevirtuallydoubled. in thisdirection:betweentheendof2012and new technologies.Chinaisalsomakingrapidstrides 60% ofallbroadbandconnectionsarebasedonthese Japan andinSouthKoreaparticular, morethan

Source: IDATE ** This figure doesnottakeFTTx+LANarchitectureintoaccount Atmid-2014,therewere,intotal,1.3millionFTTxsubscribers inIsrael. Thisfigure doesnottakeIsraelintoaccount,whereVDSListhemainarchitecturedeployed. * Ultrafast broadband gaining ground gaining broadband Ultrafast Very open technological choices technological open Very FTTx market share by region, as of mid-2014 of as region, by share market FTTx broadband ultrafast and broadband for share market in Change Source: IDATE in“World FTTxmarket” Source: IDATE in“World FTTxmarket” North America64.3millionsubscribers Latin America2.5millionsubscribers 20% 10% 20% 30% 40% 50% 70% 60% 0% 20% 65% 15% 13% EU-5 67% Africa/Middle-East* 1.4millionsubscribers USA 33% Europe** 40.9millionsubscribers 20% South Korea 47% 100% Asia/Pacific** 89.0millionsubscribers 4% Japan 96% mid '14 mid '13 mid '12 mid '11 VDSL FTTx/D3.0 FTTH/B 57 www.idate.org Fixed broadband 58 2.2 DigiWorld 2015 Telecom services and markets 2 advanced markets. cantly in2014,andisbynowsubstantialmost Geographical coverageforLTE increasedsignifi- 10 millionLTE customers. largest marketandfi fth worldwide,withmorethan of 2014,or355millionusers.GermanyisEurope’s ed for70%oftheworld’s LTE customersattheend latter nowrelegatedtothirdplace–togetheraccount- made upoftheUnitedStates,ChinaandJapan– region bytheendof2014.Theleadingtriumvirate, propelled thecountrytonumbertwospotin touted rolloutofLTE servicesinChinalate2013 is laggingbehindNorthAmericaandAsia.Themuch up andrunning.Fromaregionalperspective,Europe the morethan330commercialnetworksthatare 25 millionnewcustomerssigningupeachmonthto (+148% in2014,+248%2013),withanaverage The growthmomentumwasverylivelyagainin2014 use bythattime. representing justunderonethirdofallSIMcardsin by 2018,theirnumbersshouldbecloseto2.3billion, customers areexpectedtobereachedin2016and, senting 7%ofallSIMcards.Thefi rst onebillionLTE stood at510milliontheendofyear, repre- took the500millionmarkin2014,andtheirnumbers mobile data.AccordingtoIDATE, LTE customersover- LTE providesaresponsetoincreasingdemandfor Korea South and Japan States, United the including countries, several in dominates now mobile Ultrafast LTE of rollout swift The mobile Ultrafast developed markets,afterhavingbeenfi rst introduced of LTE-Advanced was confi rmed in2014several ports, ofVoice overLTE (VoLTE) plans. Theadvent LTE, andintheemergence, accordingtoseveralre- launch ofLTE-Advanced, anoptimisedversionof in rapidlyincreasingnationalcoveragelevels,the deployment ofultrafastmobile.Theyhaveresulted Massive investmentshaveenabledtheaccelerated policy industrial astrong to thanks evolutions its and LTE LTE customers by region by customers LTE Latin America Asia/Pacifi c Europe North America subscribers Million World Africa/Middle-East 0221 0421 2018 2015 2014 2013 2012 92651862311 876 511 206 59 28 27 1 0 3 > Contact:[email protected] across Europe. dividend (700MHzband)isahotly-debatedtopic services. Today, whattodowiththeseconddigital by allocatingadditionalfrequencyresourcestomobile The fi rst digitaldividendprovidedapartialresponse, governments toseekoutnewspectrumresources. plications andnewuserbehaviourispushingfederal growing needscreatedbynewtechnologies,ap- and tofacilitateinternationalroaming.Inaddition,the regions iscrucial,bothtoachieveeconomiesofscale Harmonising thespectrumthatisusedbetween ber offrequencybands,dependingontheregion. Ultrafast mobile,chiefl y inFDDmode,usesanum- it wants everybody Spectrum: jointed bands,butalsointhenetworkcore. improvements, includingcarrieraggregationfordis- frequency bandsabove6GHz,andbringwithitseveral 5G isexpectedtofollowthroughfromLTE, usinghigh has createda‘5GPPP’partnershiptobolsterR&D. in 2018.HereEurope,theEuropeanCommission ready planningfull-scaletrialsattheWinterOlympics taken aleadinLTE thatithopestokeepwith5G,isal- chiefl y ofChina,JapanandSouthKorea,whichhas preparing forit.TheAsiancontingent,composed even ifthemobileecosystem’s playersarealready 5G isnotexpectedtoseethelightofdayuntil2020, policies and considerations economic of focus the already 5G trend shouldgatherpacein2015. 2014, andnotablyintheUnitedStates.Thatsaid, South Koreain2013wasfolloweduponlytimidly cy. AsforVoLTE, theearlyinitialrolloutofservicesin multiplexing andfurtherincreasingspectrumeffi cien- cells withmacrocellsonthesamechannel,optimised opments suchascarrieraggregation,combiningsmall capacity ofupto1Gbpsbycombiningtechnicaldevel- in SouthKorea2013.LTE-Advanced coulddelivera 025491166 409 439 264 225 200 80 25 95 3 3 819418 129 68 9 9 1168 150 21 23

Source: IDATE LTE hugely popular in Japan, South Korea and the United States United the and Korea South Japan, in popular hugely LTE US enjoying a strong lead astrong enjoying US Top 10 LTE markets by customer numbers, as of mid-2014 mid-2014 of as numbers, Top customer 10 by LTE markets population) the of (% mid-2014 in LTE coverage Source: GSMA Source: IDATE Million subscribers USA 79 74 92 97

USA Verizon

AT&T 140 T-Mobile France UK 03 69 30 70 Bouygues Telecom 54 41 43 75 SFR EE France

UK Orange O2

7.6 Vodafone 5.5 3 9 17 52 77 71 Switzerland Vodafone Germany

Deutsche Telekom

O2 Germany Russia Japan China 41 South Korea Megafon 99 99 99 99 KDDI 14.9

2.9 SoftBank 100 32.6 Hong Kong LG U+ Australia DOCOMO 100 SKT 9.1 100 38.8 KT Autralia 775 87 Telstra South Korea Japan

Optus 59 www.idate.org ultrafast mobile 60 2.3 DigiWorld 2015 Telecom services and markets 2 sharing schemes,amodelthatalsoenablesthem Mobile operatorsintheUKwerepioneersnetwork- ture themselves. or insuffi cient resourcestomanagetheirinfrastruc- management, especiallysmallertelcosthathavefew creasing useofoutsourcingcontractsfornetwork development ofLTE, operators havebeenmakingin- and customers,whilealsocuttingcosts.Withthe allows operatorstofocustheirenergyonservices an outsidevendortomanageallorpartofanetwork, Network outsourcing,aprocessthatinvolveshiring sizeable percentageoftheircapex. building andacquiringadditionaltowersrepresentsa interested insharingtowersandbasestations,as ning anddeployments.Mobileoperatorsareespecially from theoutset,byundertakingsharednetworkplan- tion oftakingadvantagethesesharingschemes Operators deploying4Gnetworksthushavetheop- The resultingsavingscanreachashigh30%. sive) andthenumberofsitescoveredbycontract. depend onwhichelementsareinvolved(activeorpas- greater savingsthanoutsourcing,buttheirextentwill radio equipment.Network-sharingschemesenable involves networkelementssuchasantennaeandother base stationsandtowers,activesharing,which able tomobilenetworks:passivesharing,involving and operatingcosts.Therearetwoapproachesavail- tion oftheirnetwork,asawaytoreducerollout Operators havethepossibilityofsharingallorapor- to LTE Business models that smooth the transition strategies. outsourcing dealsbeingsignedaspartoftelcos’global we areseeingmoreandnetworksharing quickly, whilekeepingahandleoncosts.WithLTE, to rolloutnewmobileproductsandservicesmore it outsourcingornetworksharing–thatenablethem pushing operatorstoadoptnewbusinessmodels–be Technological developmentsaregoingalongwayto deployments newservice operators’ for Economic responses Outsourcing and sharing network > Contact:[email protected] end, withHPandIBMheadingthepack. trend. ITcompaniesarealsopresentontheservices Nokia, arethusbenefittingfromthisoutsourcing Huawei and,toalesserextent,Alcatel-Lucentand helping tooffsetlossesinhardwaresales.Ericsson, to securecontractswithmobileoperators,whichis outlet forcertainequipmentsupplierswhocontinue Meanwhile, managedservicesarebecomingagrowth and IndusTowers beingtwoexamples. ly intheUnitedStatesandIndia–AmericanTower ted withradioantennaebegantospringup,particular- Very quickly, companiesspecialisingintowersoutfi t- rollouts, particularlyfortowersandbasestations. The network-sharingmodelbeganwith3Gnetwork providers service for outlets Growth of 2015. its mobilebasestationsassharedsitesbytheend business. Itscompany-widetargetistohave35%of segment, inthedifferentcountrieswhereitdoes Orange. Theoperatorhasbecomeveryactiveinthe egies employedbymultinationaloperatorssuchas Network sharingisnowanintegralpartofthestrat- tract topooltheirpassivenetworkelements. Meanwhile, O2andVodafone havealsosignedacon- joint venturecreatedin2010andrecentlysoldtoBT. merly EverythingEverywhere),theOrange/T-Mobile further strengthenedwiththecreationofEE(for- to save4billionUSDin2017.Theagreementwas sites, decommissionedmorethan5,000andhope The operatorshaveconsolidated12,000shared venture in2007,withacontractthatrunsto2031. and 3weretheforerunners,creatingMBNLjoint rose fromtwotofi ve inonlyafewyears.T-Mobile costs. Thenumberof4GnetworksinBritainthus to meettheircoverageobligationswhileminimising The most common network-sharing arrangement mostThe common network-sharing Network sharing incorporated into operators' global strategy operators' into incorporated sharing Network Orange: existing network sharing agreements sharing network existing Orange: sharing network Passive Source: GSMA Source: IDATE basedonOrange Africa UK Spain Poland France rnecutisTp Sharing dealdetails Type Orange countries Full RANsharing Mast sharing Shared compound Shared compound Full RANsharing Antenna A BTS/Node B Network A BTS/Node B Shared BSC/RNC Network A Antenna A Antenna B asv SeveraldealsconcludedwhereOrangehavetransferringpassiveinfrastructure CreationofEverythingEverywherewithT-Mobilein2011 Passive Active ActivesharingwithVodafoneconcludedin2007 Active CreationofNetWorks!,ajoint-venturecompanywithT-Mobilein2011 Today,40%ofruralinfrastructuressitesshared Active Passive BTS/Node B Network B BSC/RNC Network B BSC/RNC Shared to towercompaniesinGhana,Uganda… Active sharingdeal,expectedtogenerateup 189MGBPperyearfrom2015 generating cumulativecostsavingsof160millionEURover4years between the2MNOs.40%savingsexpectedpersite, At theendof2011,morethan4300basestationsshared Expected 29%reducecostsi.e.320millionEURovertheperiod2011-2015 to around10000sites Active sharingdealaimingtoreducefrom6000-7000sitesperoperator network B network A network B network A Core Core Core Core network elementsandplatforms Shared core Site sharing Shared compound network elementsandplatforms Shared core Network A BTS/Node B Network A Network B Antenna A Mast A Network B Network A BSC/RNC Network A Access Access MSC MSC Network B Network A HLR HLR transmission HLR BTS/Node B Network B BSC/RNC Network B Antenna B Mast B Core ring SG SN/GGSN Network A SG SN/GGSN Network B VAS platform Shared network B network A OMC Shared Core Core 61 www.idate.org Outsourcing and network sharing 62 DigiWorld 2015 Telecom services and markets 2.4 2 create thelargestmobileconcerninUK. turn droveHutchisontoacquireO2fromTelefónica, to T-Mobile (DeutscheTelekom) jointventure,EE.Thisin turn tothemobilemarketbyacquiringOrangeand Finally, inDecember2014,BTmadeaspectacularre- thus bolsteringOrange’s marketshareinthatcountry. wireline operatorandthirdlargestmobileoperator, a dealthatwouldgivebirthtoSpain’s secondlargest takeover bidforfullcontrolofSpanishtelco,Jazztel, Orange, inSeptember2014announcedafriendly SFR andsewedupitsmobileassets.Meanwhile In June2014,FrenchcablecoNumericableacquired a dozencountriesacrosstheOldContinent. 2014, acablecompanywhosefootprintcoversaround and ONOinSpain,itsetitssightsonLibertyGlobal Europe: afterCable&Wireless,KabelDeutschland ness, Vodafone madeseveralcableacquisitionsin States. Historicallypresentonlyinthemobilebusi- since itspull-outofVerizon WirelessintheUnited tive playerintheEuropeanconcentrationmovement, recent months.Vodafone isnodoubtthemostproac- alised throughaseriesofmergersandacquisitionsin The mergeroffi xed andmobileoperatorshasmateri- trend convergence fi the to testifying M&A of A host carriers thatofferquadrupleplaybundles. costs. OutsideofEurope,itistypicallyonlyincumbent rates, aswelladministrative,salesandmarketing These plansgoalongwaytoreducingoperatorchurn underpinned marketconsolidationdealsintheUK. over IP–arewidelyavailableinSpainandFrance, mobile andlandlinecalling,InternetaccessTV In 2014,quadrupleplaybundles–i.e.thatinclude quadruple play the of Impact and small cells Fixed-mobile convergence ment ofsmallcellsareoperators’twomaintechnical mobile infrastructure.WiFioffl oading andthedevelop- a rateof60%to70%year, isputtingastrainon Mobile datatraffi c, whichcontinuestoincreaseat convergence fi to keys WiFi: and cells Small xed-mobile xed-mobile > Contact:[email protected] and marketingsynergies. that theystillneedtoworkonachievinginfrastructure mobile convergencedeals.Itneverthelessremains Operators stillhaverelativelylittlehindsightonfi xed- early 2015,CablevisionrolledoutaWiFi-onlyplan. and Scratchpioneeredthismodelin2014and, which helpstoreduceusers’bills.RepublicWireless with cellularnetworksemployedonlytofi ll thegaps, based onmakingWiFitheprimaryaccessnetwork, fi rst’ model,outoftheUS.Asitsnameimplies,itis A final recentinnovation istheintroductionof‘WiFi macro network. coordination betweensmallcellsandtheoperator’s the featuresofLTE-Advanced, andwillenablebetter Heterogeneous networks,akaHetNets,areoneof States, whileEuropeappearstostillbelaggingbehind. Today’s marketisbeingdrivenbyChinaandtheUnited explosion indatatraffi c, andvideotraffi c especially. ily addingsmallcellstotheirnetwork,handlethe The secondunderlyingtrendinvolvesoperatorsstead- less integrationofWiFiintomobilenetworks. service andautomatichandoverwillmeanmoreseam- Further downtheroad,abilitytomanagequalityof customers whenconnectedtoWiFiaccesspoints. will enablemobileoperatorstobettermanagetheir Carrier WiFi, Carrier quarters ofallmobiledatatraffi c. fl oading toWiFiisusedveryheavily, involvingthree responses tothissituation.InWestern Europe,of- WiFi tomatically, andtoauthenticateconnectthem 2.0 makeiteasiertoidentifysmartphoneusersau- enhancements usheredinbyPasspointandHotSpot role thatWiFiplaysinoffl oading traffi c, thelatest by cellularbasestations.Inadditiontotheimportant traffi c isrelayedbyWiFiaccesspoints,rather than has theadvantageofreducingcapexwhenmobile hotspots hotspots orWiFimanagedbyamobileoperator, and homespots . Thesenewfeatures Rapid growth of small cells sustained by Asia-Pacifi by sustained cells small of growth Rapid Wide range of power and capacity and power of range Wide The properties of small cells small of properties The forecasts growth cell small Global Source: IDATE in“SmallcellsandcarrierWiFi” Source: IDATE in“Smallcellsand carrierWiFi” uoai Atmtc uoai rmna Automatic ormanual Automaticormanual Automatic Power Automatic Configuration Capacity Femtocell Location Indoors Indoors Indoors/outdoors Outdoors Coverage Million units 12 15 6 9

- hnes 63 hnes 26 hnes 32-64channels 32-64channels 16-32channels 4-8channels

0421 0621 2018 2017 2016 2015 2014 10-20 m 20 mW Enterprise 200 mW 10-50 m femtocell c 0 W 200mW-2W 200 mW-2W 50-100 m Picocell Metrocell Up to1km scenario Pessimistic scenario Median scenario Optimistic 63 www.idate.org Fixed-mobile convergence and small cells 64 2.5 DigiWorld 2015 Telecom services and markets 2 • Also onthelistispossibleuse,furtherdown • The 2.7–2.9GHzband,whichhasbeenassigned • The Cband(3.4–4.2GHz),whose3.4-3.6GHz • The Lband(1300–1518 MHz),ofwhichaportion the UHFband(470–694MHz),contiguouswith • bands forEurope: Item 1.1ontheagenda.Thereareseveralcandidate fi cation of newfrequencybandsforultrafastmobileis Additional mobilespectrumallocations,andtheidenti- the changestointernationalspectrumassignments. ments andadministrationsonhandareduetoratify Conference inNovember2015(WRC-15),thegovern- At theforthcomingWorld Radiocommunication bands frequency New such that,accordingtotheITU, data trafficaresettogrowintheyearsaheadis The tremendouspaceatwhichmobileservicesand IMT for spectrum additional of 1200 MHz mobile ultrafast needsfor spectrum Growing Spectrum starting in2020. signed frompreviousapplicationsandavailabletouse International MobileTelecommunications (IMT),reas- of additionalspectrumisexpectedtobeallocated 2018 or2019,forexample. something thatcouldberatifi ed atafutureWRC,in the road,ofhigherfrequencies,i.e.above5GHz, lower downthelistofpriorities. veillance, butuseddisparatelyacrosstheregions,is chiefl y tocivilaviationandmilitaryaeronauticalsur- mobile inregions2and3(Americas,Asia-Pacifi c). Adjacent sub-bandshavealsobeenidentifi ed for ITU region1(Europe,AfricaandtheMiddleEast). sub-band hasalreadybeenidentifiedforIMTin is highonthelistofcandidates. digital radiobroadcastingandrelativelyunderused, 1452-1492 MHzsub-band,currentlyreservedfor has alreadybeenallocatedtomobileservices.The stakeholders oneitherside. ing isthesubjectofheateddiscussionsbetween joint allocationtomobileservicesandTVbroadcast- for terrestrialbroadcastingservices.Asubsequent 700 MHzband,andcurrentlyemployedinEurope at least least at 1200 MHz > Contact:[email protected] to explode. this scarceresourceasmobiledatatraffi c continues is noambiguityabouttheavidinterestbeingshownin mobile operatorsnodoubtdrovethebidsup,there Even iftheparticipationofDishNetworksalongside not classifi ed aspremiumonlyafew monthsback. in arecord40billionUSD,forfrequenciesthatwere Recent AWS-3 auctionsintheUnited Statesbrought tion scheduledforlate2015. tween 2017and2019,followingafrequencyalloca- starting in2016,withservicesupandrunningbe- to mobileoperators.TheFrenchplanhasthetransfer announced thatthe700MHzbandwouldbeassigned countries inEurope,includingFrance,havealready gests thedecisionbemadeatnationallevel.Some an interimassessmentaround2025,butalsosug- the 470-690MHztobroadcastersup2030–with 700 MHzbandupto2020,inexchangeforassigning bile operatorswouldhaveexclusiveaccesstothe gests asimplefrequencysharingarrangement–mo- uplink anddownlinkfrequencies.TheLamyreportsug- additional spectrumand25MHzduplexgapbetween CEPT ispushingforabandplanwith2×30MHzof public protectionanddisasterrelief(PPDR)services. and telecomoperators,enablesallocationsto band thatprotectstheinterestsofbothbroadcasters Europe willlikelyfocusonthechoiceofaplanfor also duetobeexaminedatWRC-15.Discussionsin (694-790 MHz)formobileservicesinRegion1are The conditionsforusingthe700MHzband in Region3. under theAPT(Asia-Pacifi c Telecommunity) bandplan band hasalreadybeenallocatedtomobileservices certain commercialLTE services.Addedtowhich,the States, the700MHzbandisalreadybeingusedfor existing servicesinthecontiguousband.InUnited due tocomeintoeffectstartingin2015,protect was identifi ed forIMTinRegion1atWRC-12,and tors, andcurrentlyusedbyTVbroadcasters,theband use ofthe700MHzband.Covetedbymobileopera- Item 1.2ontheagendaforWRC-15concerns band MHz 700 the for case The Most countries are adopting the APT plan APT the adopting are countries Most New premium resources premium New Possible arrangements for the 700 MHz band in Europe Europe in 700 band MHz the for arrangements Possible 700 band MHz the of Status Source: IDATE Source: CEPT n al 04 ≥2015 andearly2014 NewZealandOct2013 Africa/Middle-East Latin America Asia/Pacific Europe North America

Sub-option 1.2 Sub-option 1.1

Option 1

9 0 733 703 698 0-8 H ATlkl ≥21 ≥2015 ≥2013 APTlikely 703-788 MHz 9-0 H Mil P ≥21 ≥2015 ≥2014 Japan,Australia, MainlyAPT 698-806 MHz APT 698-806 MHz 0-8 H ATlkl 05 Probablyin2017-2020 ≥2015 APTlikely 703-788 MHz 5-9 H UA 08 Yes:LTEintheUSA 2008 USA 758-798 MHz 0 H ad adpa Alcto Commercialservices Allocation Bandplan 700 MHzband 0 3 5 788 758 733 703 0 3 5 788 758 733 703 38+Y (30+5+3+Y)MHz Uplink Uplink 30MHz Uplink 30MHz X MHz 736 MHz 3+Y (25+X) MHz SDL 5 5 8 791 788 758 753 Downlink 30MHz Downlink 30MHz 38 (30+5+3)MHz Downlink 65 www.idate.org Spectrum 2.6 66 DigiWorld 2015 Telecom services and markets 2 incomplete digitalswitchoverinanumberofregions. positions indevelopingcountries,capitalisingonthe in Europe,alongsidedirectinvestmentstofi rm up the satellitemarket,inbothUnitedStatesand Mergers andacquisitionshavealsotakenplacein content providers. of scale,andincreasingtheirnegotiatingpowerwith or expandingtheirfootprint,generatingeconomies in recentmonths,withtheaimofeitherconsolidating seemingly endlessseriesofmergersandacquisitions Wireline distributionoperatorshavebeenengagedina Growing consolidation adopting newstrategiestostayinthegame. ment ofOTTvideoservices,networkoperatorsare tive marketplace,andfacedwiththeswiftdevelop- functionalities andcoverage.Inthisfi ercely competi- coexist, albeitwithnotabledifferencesinproperties, of networkscapabledistributingvideocontentnow ment inthefullthroesofamajorupheaval:number solutions areemblematicofthisdistributionenviron- and theincreasinglycentralroleofIPnetworks The riseintime-shiftedviewing,multi-deviceviewing distribution video in upheavals causing technologies and behaviours Changing IP the for era strategies their rethinking Operators Video distribution ated bythemostpopularsites.Moresignifi cant still, negotiate billingschemesforthevideotraffi c gener- are questioningexistingagreements,andstartingto and sopotentiallyrival–services,someoperators in OTTvideotraffi c generatedbyothercompanies’– between thesetwoareasofactivity. Withtheincrease Internet, wirelinetelcosarerethinkingthebalance While alsomanagingconsumeraccesstoTVand the distributionprocess. broadcasters, strengtheningtieswithviewers)from management, serviceprovision)anddownstream(for has occurredbothupstream(contentpreparationand uct andtodiversifytheirrevenuestreams.Thisshift their business,toprotecttheappealofprod- creasingly fraught,operatorshavehadtorethink As thesituationintheircorebusinessbecomesin- business? wrong the in operators Are Breakdown of TV households worldwide, by network by worldwide, households TV of Breakdown Satellite Millions households IPTV Cable Terrestrial 4. 5. 6. 8. 613.7 527.7 380.7 580.1 454.3 441.2 569.1 429.6 458.4 559.3 404.7 475.7 546.7 380.2 496.8 0221 0421 2018 2015 2014 2013 2012 939. 0. 2. 161.4 121.4 108.3 94.1 79.3 > Contact:[email protected] still remainstobedoneonthenascentUHDfront. beefing uptheirmulti-deviceTVplans,whileeverything their ownservices.Lastly, anumberofoperatorsare into ISPline-ups,despitetheriskofthemoutshining OTT services,startingwithNetfl ix, beingincorporated eligibility issues.We arealsoseeingthemostpopular live andon-demandTVservices,toremedylimited cast-broadband solutions,withaviewtointegrating This trendincludesthedevelopmentofhybridbroad- QoE and QoS enhanced in investing also Operators many cablecompanieshavealreadybegun. ultimate stagewouldbeamigrationtoall-IP, which other issuethatbroadcastersarecontemplating.The The increasingintegrationofIPintodistributionisan- to OTTserviceproviders. tapped solutioncouldlieinmonetisingtheseservices ing surgeinvideotraffi c. Asecond,stilllargelyun- Internet networksthatarehavingtohandletheongo- CDN systems,asawaytooffl oad traffi c fromtheir Wireline operatorsaredevelopinganumberoftelco- distributors lookingtobecomemorefl exible andagile. viewer end,andoperator-as-a-servicesolutionsfor of switchingovertoTV-as-a-service solutionsonthe opex invideodistribution,withtheultimatetarget opens thewaytoanewbalancebetweencapexand The progressbeingmadeinvirtualisingsolutionsalso and managingservices,moreservicesavailable. distribution solutionmeansmorefl exibility increating mand for‘TVEverywhere’,whilecentralisingtheTV in thesearchformosteffi cient responsetode- Cloud TVtechnologiesaregraduallybeingadopted, infrastructure their of use optimal make to working also Operators their energyonInternetconnectivity. the questionofwhetherwirelinetelcosshouldrefocus access, andtherevenueeachonegenerates,raises the disparategrowthmomentumofTVandInternet

Source: IDATE Broadcast and wireline networks embracing IP embracing networks wireline and Broadcast Cloud TV adapts to new viewer behaviour viewer new to adapts TV Cloud Features of cloud TV cloud of Features operators network of positions possible of Summary Source: IDATE in“Video distributionoperators” Source: IDATE in“CloudTV” QoE improved and services New optimization Network Integration Vertical Integration Horizontal Monetisation security Content content Any Anywhere device Any Anytime solutions IP Videomanagement Deployment ofhybridbroadcast-broadbandsolutions mobile operators Network hostingto Possible IPIntegrationinbroadcast emerging markets? DTT Transitionin operators Terrestrial broadcast Dhldifhd df still needstobeproven Large-scale sustainabilityofliveOTT Does thecloudsatisfydemandfor… devices Yes, deliverytomultiplescreensand and on-demandconsumption Yes, thankstocloudstorage and contentdeliveryfrommultiplesources Yes, thecloudallowsunlimitedstorage conditions video anddeliverytonetwork Yes, thankstotechnologiesadapting devices Yes, deliverytomultiplescreensand on-demand consumption Yes, thankstocloudstorageand platforms Development ofB2C opportunities UHDTV (4K/8K) opportunities Emerging markets operators Satellite Internet andtripleplayaccess ldfil i li i f d Cl > Centralisedbilling > Targetedadsinsertedinthevideostream > DigitalRightsLockers(DRL) > DRMmanagement > LiveOTT,large-scalesustainabilitytobeproven > Consumptiontrackingandrecommendationfor > "Unlimited"storage > Centralisedproduction,postproduction > Adaptationofthevideobitrateaccordingtoavailable > Multiscreendeliveryplatforms,networkagnostic > Adaptationofthevideoformattoconsumptionscreen > Unifiedinterfaceadaptedtoallscreens,centrallymanaged > Multiscreendeliveryplatform > (S)VOD > catch-upTVservices > nPVR:videorecordinginthecloud Cloud functionalities or theinterface TV/VOD/catch-up services bandwidth andnetworkused thanks toadaptivestreaming Integration ofexistingOTTservices Development ofTVEverywhereservices Deployment ofcloudtechnologies distribution Move towardsall-IP Telco CDNdevelopment services Move towardsfixed-mobile New revenuesstreamslinkedtovideo-relatedtraffic Shift towardsconnectivity Focus onvideodistributionandservices and telecommunicationsoperators Consolidations ofcable operators Cable development LTE Broadcast operators Telecommunications 67 www.idate.org Video distribution 68 DigiWorld 2015 Contents and media markets 3 media markets Contents and 69 www.idate.org 70 DigiWorld 2015 Contents and media markets 3 and videogame). video toalesser degree)orglobal(music kets arestilllargelynational (booksand publishing; theimpactofwhether themar- is higherforbookpublishingthan forgame the totalcostpriceofcontent, which cost ofproducingahardcopy comparedto products andgames,butnotformusic;the such asexclusivewhenitcomestovideo than formusic;thewayrightsarehandled, which areamorerecentproductforbooks of digitalreaderstailoredtoconsumption, of theirdigitaltransitions:theavailability rules, whichexplainsthedisparatepace ent sectorseachobeytheirowneconomic of anewmarket:casualgaming.Thediffer- – thelatterclearlybolsteredbyadvent thirds ofthevideogameindustry’s revenue revenue, 43%ofmusicrevenueandtwo ucts representmorethan30%ofvideo in theworldofbookpublishing,digitalprod- ment. Althoughstillarelativelyminortrend products isaffectingeverycontentseg- The movefromphysicalgoodstodigital onprices andpressure products New A content value by the digital chain upset chain upset transition • But theprimebenefi• ciaries ofthisdigi- Piracy appearstohavestoppedexpand- • The shifttodigitalisputtingpressureon • •Progress madeinsubscriptionmodels several commontrends: Despite thesedifferences,wecanpinpoint with their30% commission,areultimately for electronic distribution. Onlineshops, increasing, itisbecausemargins arelower If rightsowners’shareofsales revenueis chain value new the of heart the at Distribution gains allowthemtocuttheircosts. not leastbecausetechnicalproductivity a dropinrevenueforrightsowners, the marketdoesnotautomaticallymean than forphysicalcontent.Soadropin tual propertyisalwayshigherfordigital that goestotheownersofintellec- the percentageofconsumerspending publishers, andrightsownersingeneral: tal transitionarecontentproducersand slowly thanInternettraffi c asawhole. P2P sitesappearstobeincreasingmore States, thetraffi c generatedbyunlawful low-cost legalplansonoffer. IntheUnited some degreebythegrowingnumberof ing, orattheveryleastbeenthwartedto petition frompiracy. passed ontothem,andbecauseofcom- hard copiestodigitalmodelswillbe the savingsgeneratedbyswitchingfrom because ofconsumerexpectationsthat vidual songsratherthanwholealbums, music becausesalestodayareforindi- tion-based pricingmodels:inthecaseof prices, becauseofthesenewsubscrip- seller, Amazon. the physicalanddigitalbehemothbook- like ScribdandOyster, andespeciallyby digital rentalmodel,ledbynewcomers lion subscribers),booksareadoptingthe at theendof2013)andvideo(67mil- for streamingmusicservicesworldwide a cuefrommusic(21millionsubscribers now allowunlimitedconsumption:taking •Network operators,whosegrossmar- Consumers areturningawayfrompre- • On-demand viewingisdiluting theuser• called intoquestionbyseveralphenomena. panies, whoseroleasdistributorisbeing packages, suchascableandIPTVcom- and print,theassemblersofcontent also massmediasuchastelevision,radio ing entitiesinthephysicalworld.Butitis more effi cient thandistribution-broadcast- substantially higherthanpay-TVpackage gins forthesupplyofInternetaccessare tually want. to accessthepremiumchannelstheyac- subscribe toabasicpackagebeable to liberatethemselvesfromhaving pay-TV packages.Sotheynaturallywant hundreds ofchannelsincludedintheir households watchfewerthanfi ve ofthe packaged bundles.NorthAmerican nel, wason-demand. which airedin2013onthatsamechan- viewing forthethirdseasonofHomeland, from on-demandviewing,and68%of American cablechannelShowtime,came first seasonofDexter, broadcastby however: 31%oftheaudiencefor nounced forcertainkindsofcontent, only marginally. Thetrendisverypro- viewing isstartingtoshrink,albeitstill relationship withtheTVbrand:linear as incommercialandtechnicaldistribution. as muchontheproductionsideofthings, sector canavoidaperiodofconcentration, ble. ItseemsunlikelythatEurope’s content more than500on-demandservicesavaila- fragmented –aprimeexamplebeingthe sold byEuropeancompaniesappearvery to thesecompanies,theproductsbeing world’s SVODcustomers.Whencompared and thatNetfl ix aloneboasted66%ofthe sites hadacombinedmarketshareof80%, States, thatthetopthreemusicstreaming for 63%ofmusicdownloadsintheUnited membering that,in2013,iTunes accounted ing signsofconsolidation.Soitisworthre- media sites,thecontentindustryisshow- gines, e-commercecompaniesandsocial seen withtheworld’s leadingsearchen- lows companiestogoglobal.Aswehave only simplifi es thevaluechain,butalsoal- The transitiontoelectronicdistributionnot all? takes Winner networks. vice providerswhowouldpaytousetheir sign agreementswithover-the-topser- out ofthelatterbusiness,andinstead margins, arewonderingwhethertopull Gilles FONTAINE, Jacques BAJON Jacques FONTAINE, Gilles 71 www.idate.org Introduction 72

DigiWorld 2015 Contents and media markets 3.1 3 subscribers withpremiumcontent. have alsoenteredthefray, workingtoprovidetheir ing AmericanSVODcompanies,Netfl ix andAmazon, outperforming theveteranbigfournetworks.Thelead- in theUSaretopproducersofTVprogrammes, producing originalseries:today, basiccablechannels created. Anditisnotonlythemajornetworksthatare their audiencesaroundthenationalseriestheyhave French ones)andpremiumchannelsareallbuilding European networks(withthenotableexceptionof jor sportingevents.AmericanTVnetworks,thetop er, i.e.featurefi lms andTVseries,alongwithma- The mostpopularcontenthasnotchanged,howev- fi and subscription viewership for vital series: Original ingly popular. more onthehomeTVaswell–isbecomingincreas- shifted viewingonalternativescreens–andmore TV viewingistendingtohavereacheditspeak,time- viewing, andthedigitisationofcontent.Whilelinear of connectedscreens,time-shiftedandon-demand much TVviewinghaschanged,withtheproliferation It isbynowalmostacommonplacetotalkabouthow and personal goingglobal Getting TV viewing on thegrowingnumberofindividualscreens,topush SVOD productsinparticular, willworktocapitalise ster advertisingrevenue.Second,paidservices,and can personalisetheirads,whichinturnwillhelpbol- of theiraudiences,whichmeansthatadvertisers FVOD, areabletoprovidestreamlinedqualifi cation the onehand,freeservices,includingcatch-upand tually helpchangethewaycontentismonetised.On The growingtrendofindividualTVviewingcouldeven- linear broadcasting. content allthemorecrucial,particularlyoutsideof advertising market,maketheirabilitytomonetise and pay-TVsubscriptions,aswelltensionsinthe price ofTVrights,coupledwithstagnatingaudiences On thebroadcastersideofthings,increasein monetisation of forms new for Looking VOD market share by region by share market VOD Asia/Pacifi c Europe North America revenue market video global % of World Latin America gures .%38 .%55 7.3% 5.5% 7.5% 5.5% 5.4% 4.7% 9.5% 5.6% 4.7% 3.9% 3.9% 7.1% 4.7% 3.8% 3.2% 3.1% 6.2% 3.8% 3.0% 2.5% 2.5% 5.2% 2.9% 2.0% 4.2% 0221 0421 2018 2015 2014 2013 2012 > Contact:[email protected] change inthewaylocalcontentismonetised. fore leadnotonlytoglobaliseddistribution,butalsoa The growingindividualisationofTVviewingcouldthere- France andinGermany. to investinoriginalproductionsoverseas,notably brands. Meanwhile,Netfl ix hasalso announcedplans der howlongtheycanholdtheirownagainstglobal September 2014–itiscertainlylegitimatetowon- CANALPLAY wasreporting520,000subscribersin local playersarerelativelysuccessful–inFrance, ing onlywithlocalcompanies.Whilesomeofthese 2014. Andineachofthesecountries,itiscompet- of itsserviceincloseto50countriesbytheend in onlyafewyears,havinglaunchednationalversions services. Netfl ix tookholdasaninternationalbrand ing thedevelopmentofmarketssuchason-demand The effectsofthispiecemeallandscapeareimped- to bemadeupofmanysmallerandscatteredstudios. the Europeanindustrydoesnothave,asitcontinues the majorHollywoodstudiosacommercialcloutthat The verticalintegrationoffi lm andTVproductiongives tenuous positionthantheirAmericancounterparts. Here, Europeanplayersappeartobeinamuchmore potential export its harm could industry scattered Europe’s sometimes evensimultaneously. channel onlyhoursafteritisbroadcastintheUS–and see anAmericantelevisionseriesaironaEuropean a bidtounderminepiracy, itisnolongerunusualto airs intheUnitedStatesanditsreleaseEurope.In ing trendofshorterdelaysbetweenwhenashowfi rst tribution isimperativeforaTVseries,hencethegrow- global andsimultaneousreleasestrategy. Globaldis- cinema, Americantelevisionstudioshavecreateda sary forearningaprofi tontheseinvestments.Aswith video andbrandedmerchandisesalesarealsoneces- On theproducersideofthings,internationalsales, individual subscriptions. consumers toswitchfromgroup/householdplans

Source: IDATE Top networks no longer the only series producers series only the longer no Top networks Strong tendency to consume local content, despite abundance of American programmes American of abundance despite content, local consume to tendency Strong Origin of fi 2013-2014 the for season studios American by produced series of Number Source: IDATE estimatesin“FutureTV2025“ Source: EAObased ondataprovidedbyInfomedia/ROVI 100% 70% 80% 90% 10% 20% 30% 40% 50% 60% ction series aired on TV networks TV on aired series ction 0% S rneIay Spain Italy USA France Germany UK Average Europe 150 3.1 30 SVOD services Premium pay-TV Basic cablechannels Networks 2 (15) 120 viewed series Top 10most series inthe Share ofnational National works imported works European coproductions European Other countries coproductions International

73 www.idate.org TV viewing 74 3.2 DigiWorld 2015 Contents and media markets 3 – butitislosingitsrelativeshareofthemarket. in 2014,whichis14.5%morethantheyearbefore the biggestVODmarket–generating5.3billionEUR by 34%.Thedownloadtorent(DTR)segmentisstill while earningsfromelectronicsellthrough(EST)rose VOD (SVOD)revenueincreasedby35.2%in2014, were themostdynamicinrecentmonths.Subscription The VODmarketandtheforhard-copysales various formsofelectronicvideodistribution. 2014, 38.1%oftheindustry’s revenuecamefromthe 210.7% toreach12.3billionEUR.Thismeansthat,in 2010. Duringthissameperiod,VODrevenueroseby 20.1 billionEURin2014,whichis31.2%lessthan the sector’s biggestsourceofincome,generating Revenue fromvideohardcopiescontinuetobe 2013, andthefi rst increaseinsevenyears. lion EURin2014,whichmarksa2.4%increaseover different formsofvideoondemand(VOD)–at32.4bil- video salesandrentals,therevenueearnedon IDATE estimatestheglobalvideomarket–including air the on back Growth: go? wayto only the VOD: Subscription Video of majorbrandssuchasNetfl ix andAmazonPrime by farthebiggestmarkets,carriedsuccess North America,andespeciallytheUnitedStates,is scriptions toanSVODserviceworldwidein2014. IDATE estimatestherewere84.5millionsub- ingly popularwithusers. subscribing toanonlineservicearebecomingincreas- day’s digitalworld,downloadingtorentandespecially the dominantmodelinphysicaluniverse,butto- content ischanging.Buyinghardcopiesofvideoswas The wayusersaccessprofessionally-producedvideo Europe in SVOD for stage anew 2014: Global video market by segment by market video Global Physical video ofwhich digitalrent ofwhichdigital sales ofwhichrental Digital video ofwhichretail Billion € ofwhich subscriptions Total 0221 0421 2018 2015 2014 2013 2012 31.7 17.8 24.1 2.4 4.1 1.2 7.6 6.3 31.6 16.2 21.8 3.5 4.6 1.7 9.8 5.6 > Contact:[email protected] plans, stoodataround66%in2014. al stand-aloneSVODmarket,i.e.excludingbundled IDATE estimatesthatthecompany’s shareoftheglob- Netflix continuestodominatetheSVODmarket. Netherlands. in France,maxdomeGermanyandVideoland inthe Apple iscompetingwithlocalplayers,suchasOrange downloads in14countries.Inmostofthesemarkets, is availableincloseto110countries,andpermanent Looking atESTandDTR,theiTunes VODrentalservice heavyweights. oligopolies, withmostofthemdominatedbyAmerican tinental ones,thedifferentVODmarketsappeartobe by ahostofnationalplayers,orattheveryleastcon- hard-copy marketstoalesserextent,arepopulated While linearTVmarketsaroundtheworld,andvideo inevitable? oligopolies global Are rently availableonlyintheUKandGermany. for theAmazonvideoservicewhich,inEurope,iscur- 200 countries,maywellforeshadowabroaderrollout pany’s e-commercesitewhichisaccessibleincloseto vice withAmazonPrimesubscriptionstothecom- Instant Video. This abandoning LOVEFiLMInstantforAmazonPrime worked toharmoniseitsvideodistributionbrand, markets: GermanyandFrance.Meanwhile,Amazon service insixmorecountries,includingtwomajor European market.Netflixrolledoutitsstreaming 2014 markedanewstageintheirconquestofthe around theglobe. Instant Video, whichcontinuetoexporttheirproducts 32.4 12.3 15.2 20.1 4.7 5.3 2.3 4.9 rebranding 33.4 14.8 14.3 18.7 5.9 6.0 2.9 4.3 , andlinkingtheser- 35.4 20.0 12.2 15.4 8.3 7.5 4.1 3.3

Source: IDATE in “Content Economics” Subscription driving on-demand services on-demand driving Subscription Three American players dominate the European market European the dominate players American Three SVOD subscription growth in Europe, the US and worldwide USand the Europe, in growth subscription SVOD Footprint of top US VOD services in Europe, end of 2014 of end Europe, in services USVOD top of Footprint Source: IDATE in“ContentEconomics” Source: IDATE iTunes -DTRonly iTunes -DTR+EST Amazon PrimeInstantVideo Netflix 100 Million subscriptions 80 20 40 60 0 2010 2011 20122014 2013 Europe World USA 75 www.idate.org Video 76 3.3 DigiWorld 2015 Contents and media markets 3 (7%) andLatinAmerica(3.4%). 2014, wellaheadofAsia-Pacific(12.3%),Europe generating morethantwothirdsofe-booksalesin North Americanshaveembracede-readersthemost, adoption differagreatdealfromregiontoregion. (26.1%) andLatinAmerica(3%).Thelevelsofe-book enue, followedbyNorthAmerica(31.1%),Asia-Pacific edly accountingfor34.2%ofbookpublishingrev- Europe isstillthebiggestbookmarket,single-hand- represents a16.7%shareofthemarket. e-book salescameto8.1billionEURin2014,which over thepastthreeyears.Revenuefromelectronicor wide in2014,afi gure thathasdecreasedby15.8% majority ofindustryrevenue:40.1billionEURworld- to 2013.Printedbooksalescontinuegeneratethe at 48.2billionEURin2014,astablefi gure compared IDATE estimatestheglobalbookpublishingbusiness maker money main the still copies Hard which isconsumedasandcanbecarriedanywhere. can beexplainedbytheverynatureofbookitself, this intermsofbothvolumeandsales.Thesituation lagging furthestbehindinthetransitiontodigital,and fi rsttohavebecomeindustrialised.Today, itistheone Book publishingistheoldestmassmedium,and digital to A slowtransition Publishing July 2014.ThisAmericanheavyweight’s arrivalinto tered thefraywithlaunchofKindleUnlimitedin the world’s leadingonlinebookseller, Amazon,en- in France,whichuseasubscriptionmodel.In2014, Scribd andOysterintheUnitedStatesYouboox 2013 sawtheemergenceofdigitallibraries,suchas libraries digital subscription-based of Emergence Global publishing market by segment by market publishing Global Physical ofwhich digitalsales Digital Billion ofwhichdigitalsubscriptions Total € 0221 0421 2018 2015 2014 2013 2012 904. 824. 50.1 48.6 35.0 48.2 38.6 48.2 40.1 49.0 42.0 44.6 0.0 4.4 4.4 > Contact:[email protected] ately, ane-bookcostsmuchless. to producethanaprintedbookwhereas,proportion- ment. Anenhancede-booknaturallycostsmuchmore United States,costissuesarehamperingitsdevelop- If theenhancedbookgotofftoapromisingstartin • innovative technologicalprocessesthatmakeit • giving readerstheabilitytoaccessbonuscontent Two maintypesofimplementationarepossible: experience thatgoeswellbeyondthewrittenword. enhanced e-booksthatcanofferreadersamultimedia such asEPUB3,digitalopensuptheabilitytocreate copies ofprintedbooks.Thanks,though,toformats Most ofthecurrentcrope-booksaresimplydigital in enhancedbooks? lie publishing of future the Does cannibalise theirindividualbooksales. tend withthereluctanceofpublisherswhofearitwill Added towhichthistypeofserviceishavingcon- totalling only129millionEURworldwidein2014. only atinyfractionofthepublishingindustry’earnings: revenue generatedbye-bookrentalsstillaccountsfor tions todigitallibrariesaroundtheworldin2014.The IDATE estimatesthattherewere2.3millionsubscrip- scriber numbers,whichtodayareverylow. the marketplacewilllikelybolsterdigitallibrarysub- 0.1 6.2 6.2 characters. ers tocreatetheirownstoryaroundtheavailable tion, launchedbyLindenLabin2013,allowsread- tive experience.Forinstance,theVersu applica- possible totransformreadingintoatrulyinterac- such asmusic,photosorvideos; . 0015.1 10.0 0.1 7.9 8.1 . 14.3 0.2 9.8 0.8

Source: IDATE e-book growth not dwindling offsetting sales Europe: world's largest publishing market publishing largest world's Europe: Regional breakdown of publishing revenue in 2014 in revenue publishing of breakdown Regional digitisation of rate and growth, market publishing Global Source: IDATE in“ContentEconomics” Source: IDATE in“ContentEconomics” Billion € 10 20 30 40 50 60 0 2010 3.0% 31.1% 0121 032014 2013 2012 2011 North America Latin America Europe Asia/Pacific 39.8% 26.1% 100% 10% 20% 30% 40% 50% 70% 80% 90% 60% 0% rate invalue Dematerialisation Physical Digital 77 www.idate.org Publishing 78 DigiWorld 2015 Contents and media markets 3.4 3 though 75.6%oftransactionsinvolvecomputerfi les. less thanhalfofthesector’s revenueworldwide,even Even today, revenuefromdigitalmusicrepresents record highof20.8billionEURwasreachedin1999. cord industry’s retailmarketrevenue,whoseall-time and electronicpiracyhavehadarealimpactonthere- Over time,thecombinedeffectofdigitaltransition report doubledigitalgrowth:18.7%in2014. market, whilethedigitalmusicmarketcontinuesto ticular thankstoongoingsolidresultsintheJapanese is stillholdingon(-5.3%comparedto2013)inpar- compared to2013.Revenuefromhard-copysales market in2014at14.3billionEUR,whichisupby5% in 2014.IDATE estimatestheglobalrecordedmusic 2013. Thisreturntosteadygrowthwasconfi rmed earned ondigitalsales,themarketbegantoclimbin copy saleswereoffsetforthefirst timebytherevenue during whichlossesascribedtothedeclineofhard- After aturnaroundperiodbetween2010and2012, market the of part alarge still sales Hard-copy hard-copy sales. industry stilldependsheavilyontheresistanceof growing popularityofstreamingservices,evenifthe a comebackforgrowth,thanksinlargeparttothe various formsofelectronicpiracy. But2013marked It wasalsothehardesthitbydevelopmentof electronic distributionchannelsonamassivescale. music sectorwasthefi rst contentindustrytoadopt the formofsmall,standardisedfi les, therecorded digital, andsongswerequicktobecomeavailablein Because musicproductionwasoneofthefi rst togo back groove its Market getting music Recorded tions tostreamingmusicservicesworldwideatthe According toIDATE, therewere30millionsubscrip- music recorded for growth of source chief services: music Streaming Global recorded music market by segment by market music recorded Global ofwhich subscriptions ofwhichdigitaltrackssales ofwhichdigitalalbumssales Digital Billion ofwhichadvertising Total Physical € 0221 0421 2018 2015 2014 2013 2012 271. 431. 15.9 14.7 14.3 13.6 12.7 0.8 0.8 1.8 1.5 4.9 7.8 > Contact:[email protected] down toaround8.9billionEURin2018. as lawfulonlineproductsgaininpopularity, coming 2011. Theselossesareexpectedtocontinueshrink which is14.3%belowtherecordhighreachedin piracy worldwidetotalled10.8billionEURin2013, IDATE estimatesthatlossesattributabletoelectronic authorisation oftherightsowners. music fi les tolawfulstreamingplatformswithoutthe exchange sites,directdownloadanduploading to illicitdistributionchannels,startingwithP2Pfi le penalised bythelostrevenuethatcanbeattributed The recordedmusicmarketcontinuestobeseverely piracy to due losses in A decrease • while subscriptionrevenuesurgedby132.1%be- • ad revenuegrewby65.3%between2012and rates ofincreaseinrecenttimes: These twosourcesofrevenueenjoyedtheirhighest basic service,andarichersubscription-basedservice. the freemiummodelthatcombinesanad-fundedfree Streaming musicservicesowepartoftheirsuccessto United States). with closeto10million(ofwhich9inthe totalling 14.1millionin2014,aheadofNorthAmerica the biggestmarketintermsofsubscribernumbers, the symbolic10millionmarkinMay2014.Europeis part toSpotifywhosepayingcustomerbasepassed end of2014.Thisgrowthcanbeattributedinlarge 1.1 1.2 1.8 1.7 5.9 7.8 tween 2012and2014,upto1.8billionEUR. 2014, upto1.4billionEUR; 1.4 1.8 1.9 1.9 6.9 7.4 1.6 11.0 2.5 1.9 2.1 8.1 6.6 2.4 4.1 2.1 2.3 4.9

Source: IDATE in “Content Economics” Growing popularity of subscription services subscription of popularity Growing Subscription: chief source of growth for digital music digital for growth of source chief Subscription: Breakdown of digital music revenue worldwide, in 2014 in 2018 and worldwide, revenue music digital of Breakdown worldwide and US, Europe the in services streaming music for growth Subscriber Source: IDATE in“ContentEconomics” Source: IDATE in“ContentEconomics” 26.1% 19.5% 10 15 20 25 30 35 Million subscriptions 0 5 2010 2011201220132014 2014 3.4 26.9% 27.5% 21.9% 37.7% 2018 21.2% Europe Others USA 19.2% Advertising Subscriptions tracks sales Digital albums sales Digital 79 www.idate.org Recorded music 80 3.5 DigiWorld 2015 Contents and media markets 3 and handheldconsolesneartheendoftheirlifecycles. 2016, beforeslowingasthelatestgenerationofhome The videogamemarketwillenjoystronggrowthupto • the remarkableriseofonlineandmobilegaming: • the startoflifecycleforlatestgeneration There aretwophenomenafuellingthistrend: lion EURin2018,orbyanaverage+8.5%ayear. will growfrom61.9billionEURin2014to85.7bil- The globalvideogamemarket,includinghardware, and bydematerialisation byconsoles sustained Growth Video games ence thankstolargertouchscreensthansmartphones. tablets, whichmakeforanevenbettergamingexperi- mobile gaminghasbeenspurredbythesuccessof the industry’s mainsegment,whilethepopularityof and mobilegaming.Onlinegameshavehowbecome more andwiththeincreasinglypopularonline These veteransegmentsareindeedhavingtocompete rolled out. in 2008whenthelastgenerationofmachineswas 37% ofthetotalmarketin2014,downfrom78% suffered aparticularlydramaticdecline:representing the marketasawhole.Gamingonhomeconsoleshas offl ine computergames–arelosingtheirinfl uence on ket –i.e.gamingonhomeandhandheldconsoles, So-called traditionalsegmentsofthevideogamemar- gaming mobile and online against up segments gaming ‘Traditional’ Global video market by segment by market video Global Smartphone gamerevenue Computer onlinegamingrevenue Computer offl ine gamesales Handheld consolesgamesales Handheld consoleshardwaresales Home consolegamesales Billion Total Tablet game revenue Home consoleshardwaresales ing, and15.6%formobilegames. 2014 to2018willamount9.9%foronlinegam- IDATE estimatesthataverageannualgrowthfrom will followsuitin2015; sales startedtoclimbagainin2014,andsoftware PS4 andtheWiiUfromNintendo.Homeconsole home consoles:theMicrosoftXboxOne,Sony € 0421 0621 2018 2017 2016 2015 2014 61.9 75.2 83.185.7 85.7 15.8 17.819.9 21.8 23.0 12.9 17.920.8 21.9 21.4 9.3 10.1 13.614.312.1 3.5 4.6 5.8 7.0 8.2 9.3 10.712.1 13.4 14.7 1.3 1.11.0 0.8 0.7 4.9 5.45.6 5.7 6.3 4.1 3.93.5 2.9 2.1 > Contact:[email protected] • • • • • 2015 for trends industry main Five to 74%by2018. erations. Thispercentageisexpectedtoincrease subscriptions andcommissionsonexchangeop- tribution andonlinesales,including market revenuetodaycomesfromelectronicdis- Dematerialisation games formobiledevicesandcomputers. revenue, including5.1billionUSDinsalesforvideo 2013, theChinesefi rm reported9.7billionUSDin publishers, EAandActivisionBlizzard.Infiscal now outearnsthetwoAmericanheavyweightgame A newgloballeader.ChinesetelecomgiantTencent that showcasesindependentgames. casual gamesand,fi nally, bytheSteamstoremodel console games,inpartbythesuccessofsocialand which developmentcostsarelowerthanforhome enabled inpartbytheubiquityofmobiledevices,for tus quoin2014.Thisrisk-takingisencouragedand try personalitiessoughttobreakawayfromthesta- The independencephenomenon working togainasolidfootholdinthismarket. Oculus VRcausedastir. Now SamsungandSonyare video game.In2014,Facebook’s takeoverofthefirm reality goesalongwaytoimprovingimmersionin Is virtualrealitythefutureofvideogames? change withthisgenerationofmachines. able lead,anditseemsunlikelythesituationwill Japanese consolemakerhenceboastsaconsider- of 13.5millionunitsPS4asOctober2014.The retail outlets.Meanwhile,Sonyannouncedthesale reported shipping10millionunitsofXboxOneto Xbox Onevs.PS4 . InNovember2014,Microsoft . Morethanhalfofvideogame . Agreatmanyindus- item selling item Virtual , Source: IDATE Games going digital going Games US: biggest home console base console home biggest US: Biggest markets for home console sales in 2014 in sales console home for markets Biggest 2014 in 2018 market and video global the of Breakdown Source: IDATE Source: IDATE 47% 10 12 14 Million units 0 2 4 6 8 S aa emn UK JapanGermany France USA 2014 53% 26% 2018 74% Wii Wii U PS3 Xbox 360 PS4 Xbox One Physical Digital 81 www.idate.org Video games 3.6 82 DigiWorld 2015 Contents and media markets 3 line products. newspapers aretendingtobundletheirprintandon- the priceofprintversion.To counterthistrend, since thepriceofanonlinesubscriptioniswellbelow These paywallshaveneverthelesspulledpricesdown, accessible onlytopayingreaders. increasing useofpaywalls,i.e.makingcertaincontent of newspapersinNorthAmericaandEurope,with the numberofpaidsubscribersforonlineversions and inAfricatheMiddleEastand,second,arise ing madebyprintnewspapersinAsia,LatinAmerica behind thisencouragingtrend:fi rst, theprogressbe- for thefi rst timesince2008.Therearetwoelements Newspaper circulationnumbersincreasedin2013 up the on back circulation Newspaper pure players. ad markethasbeenvirtuallywipedoutbyInternet and bycompetitionfromtheWeb. Andtheclassifi ed revenue hasbeenaffectedbythisdropincirculation and withtheomnipresenceofnewsonWeb. Ad 24/7 newsoutletsonradioandTVhavedeveloped, bly agingreadershipisnotbeingrenewed,asother sales andcirculationhavedroppedastheirinexora- fering theeffectsofdigitaltransition.Newspaper three oftheindustry’s mainsourcesofincomearesuf- ket characterisedbyaplethoraoffreecontent.All Print mediacontinuesitsdiffi cult adaptationtoamar- online access for paying onreaders Betting Print media digital revenuerosebyamere50millionUSD. which plummetedby1.6billionUSDin2013,while offsetting lossesinprintpublications’adrevenue, United Statesin2013)andonlineadrevenueisnot tal adrevenue.Butgrowthisslowing(+1.5%inthe sites worldwiderepresentaround15%oftheirto- The advertisingrevenueearnedbynewspapers’web- ad revenue print compensating not adrevenue Digital Print media advertising revenue worldwide revenue advertising media Print Advertising revenues Billion $ Ofwhich digital Digital advertisingshare (%) .%66 .%85 9.9% 8.5% 7.4% 6.6% 5.9% 0921 0121 2013 2012 2011 2010 2009 749. 468. 84.7 89.9 94.6 96.5 97.4 5.7 > Contact:[email protected] maintaining tieswithbothcustomersandadvertisers. mass inreadership,bothfreeandpaid,whichisvitalto amortise newsproductioncostsandachieveacritical consolidation ofthesector, drivenbytheneedtobetter the digitaltransitionappearstohaveresultedina source ofincomeforprintmediacompanies.Lastly, larly e-commerceproductsthatwillbecomethechief are onlyloss-leadersforasetofservices,andparticu- consists ofacknowledgingthatnewsandinformation budget cutsbeingforcedonpublications.Anotherpath this imperativeisalsocomingupagainstthemassive ing, isatackthatseveralnewspapersaretaking.But original content,andparticularlyininvestigativereport- publication attractiveandworthwhile.Reinvestingin plored fromaspecifi c anglethatmakesaccessing produce newswhich,ifnotexclusive,isatleastex- One oftheresponsesoncontentsidecanbeto websites, andsocuttingthemofffromadvertisers. brokers agglomeratingtraffi c fromaswatheofmedia is alsoplayingoutinthesaleofadspace,withonline destination websitetoahostofaggregators.Thistrend the dailypapersaresteadilylosingtheirpositionas to grazeandconsumecontent‘piecemeal’.Asaresult, blers ofcontentthreatenedbyusers’growingtendency networks, newspapersareseeingtheirroleasassem- change. Fromamoregeneralperspective,aswithTV lines ofarticles,withoutearninganyadrevenueinex- content availableforfree,whetherphotosorthefi rst to bysearchengines,theyalsomakeaportionoftheir exposure byhavingtheircontentreferencedandlinked loop thatprintpublicationsarefacing.Whileenjoyvital is emblematicofthedangerbeingcutout ers, whichhasbeenparticularlyfraughtinGermany, The confl ict betweenGoogleandprintmediapublish- streams revenue new of search in media print loop, the of out Cut 6.4 7.0 7.6 8.4

Source: WAN-IFRA Drop in newspaper circulation stemmed thanks to thriving Asian and Latin American markets American Latin and Asian thriving to thanks stemmed circulation newspaper in Drop Newspapers rely heavily on adrevenue on heavily rely Newspapers Breakdown of US newspapers revenue in 2013 in revenue USnewspapers of Breakdown 2013, 2009 and region by between circulation newspaper daily in Change Source: WAN-IFRA Source: Newspaper AssociationofAmerica -25% -20% -15% -10% 10% -5% 0% 5% 29% 4% 4% 8% New/Other revenue New/Other revenue Circulation revenue Niche/Non-daily Direct marketing Advertising -Digital Advertising -Print 9% 46% Australia/Oceania Africa/Middle-East Latin America Asia Europe North America 83 www.idate.org Print media 84 DigiWorld 2015 IT, software and network equipment 4 equipment network and IT, software 85 www.idate.org 4

new data that are building up in informa- Who benefi ts tion systems. New digital sales channels, including social networking sites and mo- most from bile applications, are helping enrich existing CRM systems. But the revolution comes the latest especially from people’s virtually permanent state of connection to an electronic com- munications network – both via their own IT industry devices and now through other machines (M2M) – which is producing a plethora of developments? new data including real-time location and hourly meter readings instead of the previ- ous annual ones. This means that infor- mation and storage systems need to be rethought and rescaled. This vast quantity of data – which are often available in real time and in unstructured formats – is being utilised more and more by big data solu- tions that are taking over from analytics solutions. The markets emerging from these new technologies (big data, M2M) are still quite small, however, and growing at only a mod- erate pace for such innovative solutions. T and software are at the heart of a great Businesses are having to grapple with a Imany technological disruptions that are multitude of developments to be managed opening the way to profound changes in a at once, and are therefore opting for those number of vertical market processes, al- solutions that allow them the fastest return beit with varying degrees of maturity. The on their investment, and particularly those

IT, software and network equipment IT, most widely adopted IT solutions centre that generate productivity gains by auto- 86 on interaction with customers, and corre- mating what had previously been manual spond more to disruptions in behaviour, as tasks, as in the early days of computing. with M2M and social media. The growing Adoption levels are still very low compared use by business of information technolo- to potential, as enterprises are overhaul- gies to monitor their various activities has ing their IT systems very gradually and still helped achieve gains in productivity, and so making use of only a fraction of the data to contribute to the steady growth of the available to them. IT sector. Some innovations are coming to The softwarisation of IT undermine these developments, however, infrastructures helping improve vertical industries’ bottom DigiWorld 2015 line by reducing costs, while also meaning a The already sizeable cloud computing mar- loss of value for the IT sector. ket continues to grow at an impressive The profusion of data changing pace. The cloud itself represents a real the scale of IT disruption in the way IT services are dis- tributed, and in pricing structures: sub- New technologies for interacting with us- scription-based models, customers billed ers/customers make it possible to capture only for the (on-demand) resources they barriers toentry. new solutions,takingadvantageoflower more andsmallercompaniesadopt IT marketasawholecouldfi nd growthas ing unitpriceswaydown.Despitewhichthe which includetheInternetgiants–aredriv- to allITinfrastructure,newentrants– markets. Taking asoftware-basedapproach software, serverandnetworkequipment Service (IaaS)areallshakinguptraditional a Service(SaaS)andInfrastructureas Network asaService(NaaS),Software industry asawhole.AswithSDN/NFVand a signifi cant destroyerofvaluefortheIT nies thatadoptthem,theyalsorepresent able directbenefi ts reapedbythecompa- markets, bolsteredbytheoftenconsider- If thecloudandSDNarebothfast-growing alisation toprotecttheirmargins. advantage ofthesavingsenabledbyvirtu- are adaptingtothenewparadigm,taking manufacturers andtraditionalITcompanies ing (SDN)atthesystemslevel.Equipment same istrueofsoftware-defi ned network- tions, typicallyasawaytosavemoney. The for businessesmovingtowardsthesesolu- surges. Sothecloudismoreofatransition system innotime,notablytohandletraffi c ability toincreasecapacityandrescalethe coming chiefl y fromthefl exibility andthe cloud ones,withfunctionalvalue-added not, however, markedlydifferentfromnon- actually used.Consumptionpatternsare ated services. including equipment,softwareandassoci- entire chainwithanexpandedproductline, the infrastructurebusiness,goingafter are workingtobecomecentralplayersin resulting pressureonprices,ITcompanies their otherservices.Inresponsetothis whose rewardswillbereapeddirectlyby overall developmentofdigitaltechnologies, these newservicesissecondarytothe giants, generatingsolidmarginsfrom tions inthemarketplace.ForInternet ers, competingdirectlywithotherITsolu- and soldassolutionsforoutsidecustom- satisfy in-houseneedsarelaterrejigged These infrastructure-relatedinitiativesto servers andIoTdataexchangeprotocols. cables, andinsomeinstancesWeb-scale and datacentres,CDN,bigdata,submarine even theirownnetwork,aroundthecloud to buildouttheirownITinfrastructures,and panies, whichhasdriventheInternetgiants off-the-shelf solutionssoldbymajorITcom- stances, theirneedscannotbesatisfi ed by margins aretypicallyveryslim.Inmanyin- sive scale,atverylowcostsasper-user solutions capableofoperatingonamas- growth hasoftenrequiredthemtodesign the Internetheavyweights.Theirveryswift and ahandfulofnewentrants,including The biggestwinnersareverticalmarkets giants Internet the for advantage Competitive Vincent BONNEAU Vincent 87 www.idate.org Introduction 4.14 Big data A paradigm shift brought on by the data surge

There is no single defi nition for ‘big data’. It refers both relative continuity with traditional analytics solutions – to data properties and to the specifi c methods used which are capable of managing semi-structured data – to process them. ‘Big’ refers to the volume of data logically implies a disparity between market value and involved, without any minimum threshold having been actual adoption levels for the technology, which still established, and typically to data of varying formats, stand at around only a third of all businesses. Added i.e. unstructured data as opposed to traditional struc- to the usual obstacles of any new IT project – notably tured data. This volume is increasing as the amount integration with existing systems, ROI, security and of real-time data being generated increases: coming data privacy – are the need for new data science skills from social media sites and sensors located in mobile and the quality/freshness of the data. phones and connected things. Traditional solutions are The only companies that really need to adopt big data incapable of managing unstructured data. technologies in the here and now are those that deal Processing methods derive directly from data min- with massive amounts of data of varying formats, and ing and business intelligence technologies. Big data need to process them in virtual real time. This is true technologies also make use of several new technolo- of large Internet companies, of course, along with gies for processing and visualising the data. The main players in other sectors, such as fi nance and tele- technologies are the software solutions used by big coms, that handle large volumes of daily transactions. data infrastructures or frameworks – for instance, …. but a revolution for the IT world MapReduce, initiated by Google, or Hadoop – which ensure distributed processing across clusters of As the volume of data increases, so does their value, computers, and management of unstructured data- especially when cross-referenced with various other bases. Mo new key technologies come from, or were data. This process is expected to result in businesses borrowed by, the Internet giants (Google, Facebook, breaking open their silos, i.e. each division controlling Amazon) who already had control over massive and protecting their own data in-house, as isolated amounts of data, and could not wait for new solutions data have very little intrinsic value. This is of course to be introduced into the marketplace. a culture revolution in the market’s approach to data, The main disruption therefore lies with the data them- but one that also needs to be reconciled with privacy selves, particularly those coming from end users who and management policies. are now easier to capture thanks to online develop- But even if the silo-based approach is disrupted, a ments and the development of adapted, notably cloud- great many players do not have control over enough based, software infrastructure. data of their own, which means they will need to turn Still a relatively small market … to third-party data, either via API or brokers/aggrega- tors such as Axiom or Experian. Big data will, then, Strictly speaking, the big data technologies market require more profi cient management of the exchanges

IT, software and network equipment IT, today is still dominated by traditional IT companies that take place between internal information systems – along with the Internet heavyweights that do not and the data available from outside parties. 88 monetise these technologies directly – and it is still relatively small. It is estimated at 7.6 billion EUR This approach naturally opens up a host of opportuni- worldwide in 2014, most of which comes from hard- ties for big data specialists, beyond the ones that ware sales, thus representing less than 10% of the today are focused on optimising internal processes analytics market from which it derives. And its fore- (production, monitoring the logistics chain, sales and cast growth rate of an average 18.5% per annum over customers relations). Instead, they look at how to the next several years is by no means spectacular for monetise the data with third parties wanting to de- an emerging tech market. velop and market new services. Initially, however, the There are several reasons for this, despite the solid vast majority of the benefi ts are expected to come state of technological maturity, outside of image and from vast improvements to internal processes. video analysis solutions. The fact that the main techno-

DigiWorld 2015 logical building block is open source, combined with the > Contact: [email protected] Expectations of big data differ from sector to sector to sector from differ data big of Expectations Equipment suppliers still dictate big data, for now for data, big dictate still suppliers Equipment Opportunities for big data in fi in data big for Opportunities Top big data players in terms of revenue of terms in players Top data big Source: IDATE Source: Wikibon product: Physical Core Connected objects Plenty ofadnetworksandalsosome insights solutionsforthirdparties. Could focusmoreoncoresales and up-sell/cross-sellissecondary. PWC Accenture Palantir SAS Institute SAP Dell HP IBM 1368 Software 545 Oracle Teradata Data monetisationthrough value-added services advertising/insights Some potentialwith Retail Big datarevenuesin2013 nance, telecoms, retail and connected things connected and retail telecoms, nance, (million $) 480 518 1 Software 418 1 Integration 312 415 Software 491 869 652 External focus improvement (geo-fencing,in-storetracking, Telecom Positioned essentiallyoncoresales focus Internal digital loyaltycard) Key opportunitiesasintermediairies (wallet, cashback)andup-selling Hardware /Integration Primary ICTcategory Software /Integration Finance Integration Hardware Hardware Software Digital product: Core 89 www.idate.org Big data 90 4.2 DigiWorld 2015 IT, software and network equipment modules bytheendofperiod. for aglobalmarketof45.5billionEURand573million 13% intermsofvalueand26%volume, average annualgrowthisexpectedtoreachmorethan the wayintermsofrevenue.Betweennowand2018, sion oftheChinesemarket,whereasEuropestillled market, aheadofEurope,largelythankstotheexplo- 30%. In2012,Asia-Pacifi c wasthebiggestM2M value grewbyaround10.7%andmarketvolume which 6.9billionEURforconnectivity. In2013,market 230 millionmodulesand28billionEURinrevenue,of In 2014,theglobalcellularM2Mmarketrepresented purpose devicessuchastabletsorcomputers. from carstophotocopierse-books,butnotmulti- it totalkothermachines.Thiscanincludeanything which aconnectivitycomponentisaddedthatallows object thatoperatesinanindependentfashion,andto chine inthiscasebeinganintelligent,single-function fers tocommunicationsbetweenmachines–ama- As itsnameimplies,Machine-to-Machine(M2M)re- market afast-growing Still Cellular M2M generating substantialsavingsintheB2Bworld.The The vastmajorityofM2Mapplicationsareaimedat and software services IT by generated revenue of Bulk to employ–stillneedbeovercome. number ofobstacles–notleastthebusinessmodels down theroad,suchaseHealth,amarketwhere in termsofvolume,areexpectedtotakeofffurther Other marketsthatareequallypromising,especially as witheCallinEurope. particular byregulationsinvariouspartsoftheglobe, The automotivesectorisalsobooming,buoyedin more thanabillionmodels,alltechnologiescombined. take consumerelectronicsby2017andaccountingfor sidered oneofthemostpromising,forecasttoover- growth intheshortterm.Theutilitiesmarketiscon- reaching maturity, somesegmentswillenjoystrong remote managementofproductionmachines–are its pioneerapplications–notablyinsecurityandthe M2M isdevelopingthroughverticalmarkets.While term short the in drivers market M2M top utilities: and Automotive Cellular M2M market by segment by market M2M Cellular Communication &associatedservices Hardware &associatedservices Billion Total Software &ITservices € 0421 0621 2018 2017 2016 2015 2014 773. 473. 45.5 29.0 39.6 25.3 34.7 22.4 31.3 20.2 27.7 18.0 2.9 6.9 > Contact:[email protected] big datacapabilities. data managementsolutions,pushingtheircloudand operators areshiftingtheirfocustomorecomplex they evenprovideend-to-endsolutions.Today, certain For someapplications,suchasfl eet management, in dataintegrationfortheircustomers’ITsystems. a modulemanagementplatform,andarepositioned ment products.Mosttelcosattheveryleastsupply high value-added,andbeyondsimplenetworkmanage- But operatorsarelookingincreasinglytoserviceswith 2.8% inEurope). bile operators’revenueforconnectivityalone(around Europe. In2018,M2Mcouldaccountfor1.5%ofmo- lion EURworldwidein2018,and3.5billion services aloneareexpectedtorepresent12.5bil- smart metersintheUKisacasepoint.Access not millionsofSIMcards–theO2deployment low churnoutandcontractsforseveralthousandif low ARPU,theprojectshaveaverylonglifespan, ket. M2Moffersinterestingprospectsinthat,despite working toestablishasizeablepresenceinthemar- new businessafewyearsback,mosttelcosarenow Although reticenttobecomedirectlyinvolvedinthis connectivity beyond opportunities for looking Telcos suppliers. M2M buildingblockssuppliedbytelcosandmodule ments thusinvolvetraditionalITintegrators,using to existinginformationsystems.Thebiggestdeploy- M2M systemsincreaseswhentheyareconnected IT services–keepinginmindthattheaddedvalueof two thirds)comesfromsoftwareandtheassociated As aresult,thebulkofmarket’s value(around tions theycangenerate. streams byrecoveringthem,butalsointheapplica- mise processes.Value thereforeliesinmanagingdata before thankstoremotemonitoring,andsoopti- tomated fashion,aswelldatathatneverexisted had previouslybeenculledmanually–inamoreau- objective istobeablecollectexistingdata–that 3.1 8.0 . 0712.5 10.7 3.2 9.1 3.7 4.1

Source: IDATE Asia leads the way in volume in way the leads Asia Disparate market development, by vertical sector by vertical development, market Disparate M2M development by vertical sector vertical by M2M development region by M2M modules cellular of base Installed Source: IDATE in“World M2Mmarket” Source: IDATE in“World M2Mmarket” Number of M2M terminals Transport Point-of-sale Industrial Security led nueCretdpomnsPlt n hr emMid-longterm Pilotsandshortterm Currentdeployments Already inuse (SCADA) Million units 100 200 300 400 500 600 (Fleet) 0 0321 0521 072018 2017 2016 2015 2014 2013 Automotive Utilities Tabletsanddongles Consumerelectronics (energy) (TéléMatics) maintenance) (machines monitoringand Industrial equipement Smart grid Utilities Healthcare Consumer electronics (waterandgas) Health Auto insurance Office equipment (Intelligent transport) Smart cities Environment Home automation Consumer electronics Automotive (advancedapps) North America EU-28 Asia/Pacific Latin America RoW (infotainment) (PAYD)

91 www.idate.org Cellular M2M 4.34 Cloud computing Growing cloud cover

Cloud computing – which makes it possible to de- scandals only exacerbated existing concerns over data liver scalable and typically virtualised IT resources privacy, and the massive company hacks that have on the Internet – is a fast-growing phenomenon, and made headlines in recent years have raised questions a solution that is being adopted by more and more over the security of cloud services – even if the sys- businesses. The cloud is starting to benefit from tems that were hacked were not pure cloud services. increasing awareness amongst users, well beyond Businesses and public players alike want more ‘local’ company CTOs. cloud services, as opposed to international ones. SaaS and IaaS: main cloud boosters Meanwhile, on the cloud computing companies’ side of the equation, datacentres are steadily reaching The global cloud computing market is expected to very high occupancy rates, which requires them to continue to enjoy steady growth up to 2018 at least, continue to invest in new infrastructures to meet the increasing by an average 22% a year. This very solid growing demand. The development of new datacentres growth can be attributed in particular to the sizeable is taking place within a situation of shrinking margins development of infrastructure as a service (IaaS) solu- for cloud products, and for IaaS products in particular. tions, which are forecast to represent 43% of the These very slim margins are pushing the top players cloud computing market in 2018, compared to 34% to develop their own infrastructure, and no longer rely in 2014. The SaaS (software) segment will continue to on veteran IT infrastructure suppliers. be the biggest earner, however, whereas platform-as- a-service (PaaS) will remain a niche segment, aimed A market still dominated by the top Internet chiefl y at IT departments and developers. and IT companies, but competing more and more with telcos in some segments Over the past several years, cloud computing has been working to make itself known to the various com- The IaaS segment requires massive investments, pany departments, and to consumers. And the efforts and most providers that populate it are IT or Internet of the top cloud computing companies efforts are now heavyweights, starting with Google, Amazon and IBM. paying off, as the technologies are no longer being PaaS solutions are being supplied by only a handful of adopted just by corporate IT departments, but also major IT companies and a few pure players focused by other departments such as accounting and hu- on developing integrated big data solutions. Software man resources, and by administrations and a host as a service, on the other hand, is a market open of professions. to a greater number of new entrants, and currently populated by a large number of companies of varying Clear advantages but still real reticence due sizes. The fi ercest battlefi eld today is over the content to security and privacy concerns of applications. Cloud computing offers a number of advantages for Telcos, meanwhile, are concentrating their efforts

IT, software and network equipment IT, businesses big and small: increased profi tability, fl exi- chiefl y on infrastructure as a service solutions, but bility and simplicity, in addition to giving the companies moving gradually into SaaS and PaaS. Some are also 92 that use it (especially large corporations) the ability to adopting wholesale or broker strategies that allow convert a portion of their capital expenditures (capex) them to resell their cloud products to other telcos that into operating expenses (opex). Advantages will vary do not want to invest massively in developing their own from company to company, however. The economic in-house solutions. scorecard for the early adopters of cloud computing Cloud computing is also opening up an array of op- has revealed a total cost of ownership that is often portunities in neighbouring sectors such as gaming, below the TCO of operating one’s own infrastructure. media and big data. But there is still reluctance over managing and stor- ing what may be sensitive data in the cloud. The NSA > Contact: [email protected] DigiWorld 2015 Enterprise cloud computing market, by region Billion € 2014 2015 2016 2017 2018 North America 29.7 37.2 45.7 55.3 66.0 EU-28 18.3 22.6 27.4 32.8 38.7 Asia/Pacifi c 11.9 15.1 18.8 23.0 27.8 RoW 4.1 5.3 6.7 8.5 10.5 World 64.0 80.2 98.7 119.7 143.0 Source: IDATE SaaS and IaaS: two largest cloud computing segments computing cloud largest two IaaS: and SaaS A host of cloud-centric initiatives cloud-centric of A host The different cloud computing market segments market computing cloud different The segment by market, computing cloud the of Breakdown Source: IDATE Source: IDATE throughvirtualisationand/orparallelcomputing Infrastructure IaaS Storage PaaS Platform Applications Services SaaS Client Billion € 120 150 90 30 60 0 0421 0621 2018 2017 2016 2015 2014 Datacenters spreadovertheworld,accessible Databases andstoragesystems Application frameworkdevelopment Remote applications,SaaS Web services,fromtheproviderorathirdparty Specific softwareclientfordeliveryofcloudservices (e.g. MapReduce,EC2) (e.g. S3,SimpleDB,BigTable…) (e.g. Django,RubyonRails,Microsoft'sAzure,Force.com…) (e.g. GoogleApps,Salesforce,Skype…) (e.g. OpenID,GoogleMaps) (e.g. GoogleGears)

IaaS PaaS SaaS 93 www.idate.org Cloud Computing 4.44 Datacentres An edifi ce at the heart of the data explosion

Today’s datacentres are information warehouses, so Furthermore, the heat generated by the datacentre is as not to say factories, enabling a host of online ser- used to heat offi ces or nearby housing. vices, whether for businesses, consumers or public The construction of giant datacentres requires sector players (administrations, local authorities). careful planning Initially designed to provide telecom services such as intranet storage, extranet and e-mail, they are now Streamlining smaller datacentres by combining them used massively by social networking sites, search into one giant structure requires their owners to con- engines, e-commerce sites and websites to store sider several location-related criteria. These new da- what can be massive data fi les (videos, images, other tacentres consume a great deal of power, require a content), and to host cloud applications and process larger staff and occupy more surface area. big data. They house infrastructure with massive com- Criteria such as the cost, reliability and availability of puting capabilities, but which continue to be very heavy energy, price per square metre, local taxes, the cost energy consumers. The main issues that datacentre and availability of labour, the climate (cold climates operators are facing today are property and energy- preferred) have now become very important. One of related, rather than infrastructure-related. the fi rmest criteria is access to telecoms infrastruc- ture. A datacentre needs to be connected to several Streamlining and densifying datacentres optical fi bres, and be able to serve as a point of peer- to cut costs ing to other Internet networks. Existing datacentres have had to evolve and upgrade The development of local needs drives the need their IT equipment as it gradually becomes obsolete. for smaller, local modern datacentres Historically dedicated to telecoms services, they have watched these services move to the cloud. The com- The massive Internet datacentres that exist today typ- panies operating datacentres today are working to ically cover vast geographical areas, several thousand upgrade and streamline their infrastructures that have kilometres wide, to be able to serve most current become out-dated – particularly in terms of available and potential customers. There are also more local power. Another major trend amongst these fi rms is datacentres that cover a single region within a radius increasing the ‘density’ of their installations, to pack of several hundred kilometres, and deployed closer to in as many IT resources (computing power, storage end users. There is a growing demand for these local space) per square metre as possible inside their facilities from both public sector players and small premises, to be able to handle the exponential in- and medium-sized businesses that want to store their crease in the amount of data to process. Some opera- data and host their services locally, and help boost tors have elected to deploy large datacentres devoted the local economy in the bargain. These players want to cloud services, and to centralise their own in-house to be able to confi de their infrastructures, their ap-

IT, software and network equipment IT, systems. plications and their products to trusted third parties, 94 Datacentre owners are also looking to cut the energy and know where their data is stored. In France, and in consumption of their buildings and infrastructures as other countries around Europe, regional and national much as possible, which together account for 25% of cloud providers have emerged, operating home-grown their operating costs. Cooling systems, which repre- datacentres that meet the needs of local companies. sent a sizeable percentage of the power consumed, are evolving and greener technologies are being adopt- > Contacts: [email protected], ed that employ water and/or wind for natural cooling. [email protected] DigiWorld 2015

Inventory of datacentres by region North America Europe Asia/Pacifi c Rest of World Total Number of datacentres 1 484 1 276 479 202 3 441 Source: IDATE, based on Data Source: IDATE, center Map, December 2014 Datacentres mobilising two types of company: manufacturers and operators and manufacturers company: of types two mobilising Datacentres Datacentres concentrated largely in North America and Western Europe Western and America North in largely concentrated Datacentres Geographical distribution of datacentres ecosystem the in role players' different The Source: IDATE Source: Datacentermap.com 205 80 37 12 4 179 4 50 Design, constructionandphysicalaspects 14 142 244 7 323 4 6 13 and consulting Construction 16 and cooling Hardware and realty publisher Software supplier Design Power 24 2 2 3 206 61 308 3 92 16 75 138 7 74 3 97 19 32 49 3 3 11 27 4 Operation andmarketingofITservices 8 2 33 28 38 of in-housedata Production companies 9 Internet Hosting Telcos giants 14 52 17 54 5 7 24 8 3 14 2 31 31 24 95 www.idate.org Datacentres 4.54 Web-scale Very large-scale cloud computing

Web-scale IT infrastructures are similar to those de- have created dedicated teams to develop and main- ployed for cloud computing, albeit on a much larger tain their servers, which deal directly with component scale. The concept itself comes from the infrastruc- suppliers. This has naturally been a real blow to the tures deployed by the Internet giants which scan the business of veteran IT equipment suppliers: they have globe, and include a great many massive datacentres. lost huge markets, while Internet and cloud computing The extreme industrialisation of cloud services heavyweights have, in theory, slashed their costs. The term ‘Web-scale’ refers to a particular way that Extending the concept to traditional businesses infrastructures are managed. They need to be highly The different Web-scale systems have given rise virtualised: a virtual infrastructure can be set up and to particular software-related needs, enabling very dismantled in minutes, if not seconds. Datacentres large-scale data processing and distributing mas- are becoming increasingly dense, i.e. they are con- sive computing tasks over a huge number of server centrating as many servers as possible into the space clusters. Certain companies have thus specialised in they have, and as much computing power and data developing these systems, and are now selling them on each server. This densifi cation means datacentres to other businesses. By the same token, certain online that are relatively energy effi cient. The ultimate goal titans such as Facebook, have become involved in R&D of this strategy is to have virtually unlimited comput- consortia to develop Web-scale solutions. We have ing capacity, and virtually infi nite storage space, all already seen this phenomenon with big data, wherein streamlined to the nth degree. The concept of Web- Google, Facebook and Amazon developed solutions for scale also encompasses other technologies, such as their own purposes, which were then reused by other APIs for automating data exchanges between servers pure players to develop dedicated software. Other and Web services, as well as software-defi ned net- Internet companies employ very large-scale process- working (SDN) that enables an easier fl ow of data be- ing methods to optimise the infrastructures owned by tween several datacentres by virtualising the portion traditional enterprises, which have data or applica- of the network in charge of these exchanges. tions hosted in several datacentres. These solutions Value destruction for IT equipment suppliers allow client companies to access the data hosted at the different sites, very quickly, as though they were The companies that today are capable of deploying all hosted on a single server. Virtualised storage tech- Web-scale systems had, in the past, been heavy nologies, such as network attached storage (NAS), consumers of computing and storage server infra- make it possible to create this type of solution on a structure. They had relied on veteran IT equipment smaller scale, even with only a few servers. Reusing suppliers such as IBM, Dell or HP for their hardware. Web-scale technologies delivers this type of fl exibility Over the past several years, however, the Internet gi- on a larger scale, involving several sites and several

IT, software and network equipment IT, ants and many of the top vendors of cloud computing dozen or several hundred servers. products (OVH, Google and Amazon) have begun to 96 develop their own servers, to cut their infrastructure acquisition and maintenance costs. These companies > Contact: [email protected] DigiWorld 2015 Cloud equipment markets losing steam losing markets equipment Cloud Open Compute Project: cloud, Internet and IT equipment market stakeholders market equipment IT and Internet cloud, Project: Compute Open Open Compute Project members Project Compute Open Business spending on cloud infrastructure worldwide Source: IHSTechnology Source: OpenCompute Project 100 150 200 250 Billion $ 50 0 2011 0221 0421 062017 2016 2015 2014 2013 2012 97 www.idate.org Web-scale 4.6 98 DigiWorld 2015 IT, software and network equipment structure andgeneratenewrevenuestreams. who areworkingtooptimisetheirinvestmentsininfra- technical andeconomicresponsesavailabletotelcos for highquality. SDNandNFVarethusamongstthe new constraintsofapplications,andbyuserdemands network architecturesthatarebeingassailedbythe energy effi cient. Theywillgraduallyreplacetelecom networks morefl exible, open,scalable,effi cient and ing interfaces.Thesetechnologiespromisetomake and theassociatedcomplexprocessofinterconnect- NFV istheabilitytodoawaywithphysicalcomponents deploying networkfunctionsassoftware.Theappealof virtualisation, orNFV, anotherconceptthatinvolves universe, SDNisoftencoupledwithnetworkfunctions network moreeasilyprogrammable.Inthetelecoms control overthenetworkhardware,andsomake fined networking(SDN)istousesoftwarecentralise corporate datacentres.Theideabehindsoftware-de- to takeholdonnetworks,afterhavingbeenadoptedby SDN andvirtualisationareparadigmsthatstarting medium inthe term disruption A major technological virtualisation and SDN core ofthemarketshiftsfromhardwaretosoftware. telcos, andofalteringtheirbusinessmodelsasthe pable ofthreateningtheirlongstandingbondswith cially mindfulofthesedevelopments,whichareca- Traditional telecomsequipment suppliersareespe- in theirnetworks. erators whoareactuallydeployingthesetechnologies and telecomsequipmentsuppliers,amongstop- cooperation wearewitnessingbetweenthevariousIT tance ofthesenewconceptsisrefl ected inthestrong the workbeingdoneonNFVledbyETSI.Theimpor- sation initiatives,OpenFlowandOpenDaylight,in from thesetwoworldsareinvolvedinSDNstandardi- vergence betweenITandtelecoms.Various players network industry, resultingfromanacceleratedcon- Substantial changesareexpectedinandaroundthe players telecom and IT forward-looking by populated ecosystem An SDN and NFV markets by region by markets NFV and SDN World RoW Asia/Pacifi c Europe Million North America € 0421 0621 2018 2017 2016 2015 2014 6 1 4 4 1040 741 548 313 162 1 7 1 8 4608 1854 1221 3183 1275 839 2315 925 609 1370 550 362 816 334 221 9142338493 328 233 144 99 > Contact:[email protected] these newconceptsareputintoplay. gradual one,whichnaturallylimitsthedegreeto network directlyasthemigrationprocesswillbea adopt SDNandNFV–thiswillnotaffecttheirentire the concept.Itwillbeprimarilylargeoperatorsthat 19% by2018,asmoreandoperatorsembrace at amere5%in2014,butisexpectedtoincrease weight oftelcosinthismarketismarginal,standing exponentially, toreach4.6billionEURin2018.The 816 millionEURin2014.Itwillcontinuetogrow The globalSDNandNFVmarketisestimatedat lies indefi ning usecasesforthesenewsystems. availability ofSDNandNFVsolutions,thecomplexity In additiontostandardisationissuesandtheactual integrated intotelconetworksatamuchslowerpace. cloud computingcompanies.Virtualisation isbeing was designedfordatacentres,andimplementedby The fi rst SDNequipmentavailableinthemarketplace in datacentres virtualisation and SDN of adoption Pioneer applications tothecloudby2018. AT&T hasinfactplannedtomove90%ofitsinternal their planstomigrateanewnetworkarchitecture. Telefónica haveallincorporatedSDNandNFVinto than theydotoday. AT&T, DeutscheTelekom, NTTand livery applicationsandservicesfastermoreeasily by thepromisesofcostsavings,andabilitytode- sation effortsasinproofsofconcept.Theyaredriven interest inNFVandareinvolvedasmuchstandardi- Meanwhile, top-tiertelcosareexpressingagreater ment ofthefi rst SDNandNFVsolutions. volved instandardisationefforts,andthedevelop- Alcatel-Lucent andHuaweiarethemostactivelyin- protocols, equipmentmanufacturersCisco,Juniper, Taking disparateapproachestoimplementingthe

Source: IDATE Telcos' gradual adoption of SDN and NFV and SDN of adoption gradual Telcos' SDN and NFV providing telcos with technical and economic solutions economic and technical with telcos providing NFV and SDN Global distribution of SDN and NFV, by type of customer of NFV, type and SDN by of distribution Global How the network optimisation market is positioned is market optimisation network the How Source: IDATE in“World networkoptimisationtechnologiesmarket” Source: IDATE in“World networkoptimisation technologiesmarket” +60% +1% Growth rate Transparent caching Telco Wifi optimisation High potential markets Web equipment CDN Billion € 1 0 2 3 4 DPI 2 billion€ 0421 0621 2018 2017 2016 2015 2014 PCRF SDN/NFV ilo 50billion€ 7 billion€ backhaul Mobile OSS/BSS

Mature markets +20% Total traffic: +41% Mobile traffic: traffic growth Reference point: equipment Wireline telcos Wireless telcos Entreprises Cloud providers Cloud in 2018 Market value 99 www.idate.org SDN and virtualisation 100 DigiWorld 2015 Internet services and players 5 and players services Internet 101 www.idate.org 102 DigiWorld 2015 Internet services and players 5 A of geographicalandsectoralpowershifts. changing, orratheritssizeis,astheresult But thenatureofInternetecosystemis some cases,favouralternateapproaches. taken byregulatorsanduserswhich,in ened anytimesoon,despitethepositions that theirmarketdominancewillbethreat- and SouthKorea.Itdoesnotseemlikely perpowers, particularlyinChina,Russia global giants–allUS-bornandlocalsu- market isstillcontrolledbyahandfulof ware environment –andinmostinstances systems around typicallyproprietarysoft- sealed bytheconstructionof closedeco- around afewkeyservices, andlater Initially, thisdominancewasestablished er degree. based musicservice)andTwitter, to aless- as Netfl ix (SVOD),Spotify(subscription- the dominionofseriouschallengers,such outdone inonlyafewsegmentsthatare in thenumberonespot.Thesegiantsare virtually everymarketsegment,andoften Apple, FacebookandGoogle:presentin nated bythefourtitansthatareAmazon, Most Internetmarketsaresolidlydomi- wars platform The rate ofgrowth,theInternetservices s marketscontinuetoenjoyasolid power shifts? Upcoming Upcoming 150 billionUSD–caneasilyafford. and theirwarchests–ofbetween50 for WhatsApp)thattheInternetgiants sums (some21.8billionUSDultimately some ofwhichhavereachedastronomical ing putintoplacethroughacquisitions, The platform-centricapproachisalsobe- myriad formsofonlineadvertising. which canthenbemonetisedthroughthe and/or bycapturingusers’personaldata, the formofcommissionsforpaidservices derived fromhavingcontroloverusers,in gaming. Asaresult,theycapturethevalue any otherrole.Agoodexampleismobile being soldbyotherparties,withoutplaying ies inthedistributionofahostservices nies topositionthemselvesasintermediar- This approachhasallowedInternetcompa- of devicestetheredtotheirownappstore. strengthened bythedevelopmentofarange ertheless remains thecasethatinitiatives platforms’ competitive advantage.Itnev- frameworks cangoalongway toreducing ards, andthereinforcementof certainlegal er. Addedtowhichdevelopments instand- help strengthenlocalplayers’ marketpow- heavyweights. Nationalregulations canalso advertising, andsothepowerofAmerican development ofcertainformstargeted rective ondataprotection,wouldreininthe the EuropeanUnion,withreformstodi- cies, whicharealreadybeingdiscussedin second, competitionissues.Stricterpoli- in response,fi rst, todataprotectionand, likely resultfrommajorregulatorychanges, The disappearanceofplatformswouldmost marginal. ly solutionssuchasDuckDuckGoremain continues toincrease,andprivacy-friend- (PRISM) andmajorhacks,consumption private data.Despiteaseriesofscandals ing greaterandmoredirectcontroloftheir would needtochangetheirattitudes,tak- will disappear. Forthattohappen,users It ispossiblebutunlikelythatplatforms achance? have Do alternatives than actualplatforms.And,unliketheir as service-providingconglomeratesrather the West. Still,mostarestillpositioned more widelyadoptedinAsia-Pacifi c thanin transactional servicesthathavebeenmuch particularly whenitcomestopaidand All oftheseplayersarecrediblethreats, originally calledWeixin. names, aswithTencent anditsWeChat, the rebrandingofproductswithEnglish as Rakuten(Ebates,KoboandViber), and the waveoftakeoversbycompaniessuch that includeAlibaba’s recentIPOintheUS, outside theirborders,withprimeexamples These Asianplayersareslowlyexpanding of Americansolutions. also managedtocounterthedevelopment such asRakuten,NaverandDaum,have of globalrevenue.OtherAsiancompanies has alreadyhandedthemasizeableshare small numberofmarketsegmentsinChina Tencent andAlibabawhosedominanceofa a fewChinesebehemothssuchasBaidu, foreign platforms.Thisisespeciallytrueof are stillvulnerabletothegrowingpowerof any realdanger, America’s Internetgiants While theplatformdoesnotappeartobein ascending Asia collaborative economy. countries andafewrareareassuchasthe symbolic thanconcrete,exceptincertain in thisdirectionhavethusfarbeenmore to solidifytheirplatform. the softwarechopsthatwouldallowthem counterparts intheUnitedStates,fewhave connected fi tness. stance, connectedcars,grocerysalesand by diversifyingtheirbusinessinto,forin- as well,throughacquisitions(Nest)and giants takecontrolofthesenewmarkets leaders couldemerge,unlesstheInternet remain unusedbyexistingplatforms.New Web, alsoownagreatdealofdatathat tourism –whichrelyincreasinglyonthe markets –notablyfi nance,retailandtravel/ tion. Bythesametoken,leadersinvertical initiative andwithnofi nancial compensa- shared withthirdparties,oncustomers’ and verylittleonthedatawhichareoften (relatively expensive)objectsanddevices, ket leadersarefocusedmoreonselling of new, largelyuntappeddata.TheIoTmar- things, makeitpossibletocapturearange array ofobjectsinvolved.Theseobjects,or ised, notablytotakeaccountofthevast being usedareopensourceorstandard- ers andobjects.Manyofthetechnologies Things (IoT)relyonaplethoraofnewplay- developments surroundingtheInternetof the frontiersofdigitalsector. Current The Internettodayextendswellbeyond could reshuffl andverticals Things of Internet The e the deck e the Vincent BONNEAU Vincent 103 www.idate.org Introduction 104

DigiWorld 2015 Internet services and players 5.1 5 bile sincetheirIPO. onstrating thesuccessintheirstrategicfocusmo- Facebook wasamuchclosersecondwith28%,dem- ing, whileGoogleremainedontopwith45%share, with 7%.However, whenlookingatmobileadvertis- tising marketin2013,withFacebookadistantsecond ing. Googleheldapproximatelyhalfoftheonlineadver- Facebook, andparticularlyinmobiledisplayadvertis- This marketisdrivennotonlybyGooglebutalso reach 61billionEURby2018,withaCAGRof16.2%. passed 33billionEURin2014,andisforecastto In termsofmarketvalue,displayadvertisingsur- wide behindGoogle. ranks asthesecondmostusedsearchengineworld- East AsiaandalsoinRussia.BaiduofChinafact kets inwhichthelocalplayersdominate,notably conducted, byfar. Thereare, however, somemar- the searchmarketworldwideintermsofsearches a CAGRof15.6%.Googleisthedominantleaderin in 2014toover92billionEURby2018,representing grow, upfromaglobalmarketofover51billionEUR Nevertheless, themarketisexpectedtocontinue having existedsincetheearlierdaysofInternet. mature market,withthetechnologiesandknow-how The onlinesearchmarketcanbeconsideredavery competition more sees market display the while Google, by dominated market A search revenues forroughlyone-third. tal onlineadvertisingrevenues,anddisplay advertising revenuesaccountingforsome60%ofto- have beenrelativelystableovertheyears,withsearch enue sharesbetweenthesetwoadvertisingformats formats aresearchanddisplay. Thebalanceofrev- EUR in2014.Themostdominantonlineadvertising surpass 163billionEURby2018,upfrom93 The globalonlineadvertisingmarketisforecastto display market competitive amore with together market search A mature Online advertising The online advertising market by region by market advertising online The EU-28 Billion World Asia/Pacifi c USA € 0221 0421 2018 2015 2014 2013 2012 697. 31196163.5 58.6 27.5 47.7 109.6 38.2 20.5 93.1 34.4 32.2 18.3 78.0 30.4 26.0 16.8 66.9 26.4 21.4 15.2 22.8 > Contact:[email protected] acquisition ofMoPub,amobileRTBplayer, by Twitter. have startedtoprovideRTBontheirsites,andthe notable arecommercialgiantsAmazonandeBaywho brands toembracethetechnologyaspublisher. Also competition inRTB,andmoreurgencyforotherlarge inventory intothemarket.Thisalsomeantincreased launch ofFBXwasarguablyadefi ning moment,adding ogy, includingbothGoogleandFacebook. Facebook’s RTB ishowInternetgiantshaveembracedthetechnol- for theincreaseineCPM.Anothergrowthdriver vant, andthuseffectiveinventory, whichcompensates advertisers haveaccesstomuchmoretargeted,rele- inventory; however, theuse ofRTBmeansthatthe means thattheyhavetopaymoreadvertisein tiser’s pointofview, however, theincreaseineCPM effective thantraditionalinventory. Fromtheadver- targeted advertisingspaceinrealtime,whichismore 1,000 impressions),sinceRTBcanprovidebetter Cost PerMille,theadvertisingrevenuegeneratedper of view, theyseeanincreaseineCPM(theeffective advertisers andpublishers.Fromthepublisher’s point being theincreaseinROIwhichRTBbringsforboth of RTBisdrivenbyseveralfactors,themostobvious and itissettoaccountfor30%by2018.Thegrowth advertising revenuesalreadycamefromRTBin2014, the advertisingmarketsince2012.18%ofdisplay RTB hasbeenthefastestgrowingsegmentwithin highest biddergetstoshowtheiradthetarget. with advertisingspace,anauctiontakesplaceandthe these targetcriteriavisitsawebpageorapplication their adstothesetargets.Whenausermatching – andhowmuchtheyarepreparedtopayshow ous personaldatasuchasdemographicsandlocation pre-determine theirtargets–usersaccordingtovari- compete fordisplayadvertisingspace.Advertisers time bidding(RTB),anautomatedsystemto Of particularnotewithindisplayadvertisingisreal- market advertising display the of talk the bidding), (real-time RTB

Source: IDATE Search still the top display format display top the still Search RTB the fastest growing adsegment growing fastest the RTB RTB market and display ad market share market ad display and market RTB format by market advertising global the of Breakdown Source: IDATE, in“World internetservices” Source: IDATE, in“World internetservices” 100% 80% 20% 40% 60% Billion € 10 15 20 0% 0 5 0021 0221 0421 0621 2018 2017 2016 2015 2014 2013 2012 2011 2010 0221 0421 0621 2018 2017 2016 2015 2014 2013 2012 10% 15% 20% 25% 30% 35% 0% 5% Display and assimilated Search marketing Other revenues RTB of displayrevenues as a% 105 www.idate.org Online advertising 106 5.2 DigiWorld 2015 Internet services and players up oftheirpublishingplatformtoallusers. plication acquiredinNovember2013,andtheopening with itsintegrationPulse,anewsap- as ofend-April2014,andisseekingtospurgrowth ed socialnetwork,reported187millionactiveusers be justifi ed. Finally, LinkedIn,theprofessionally-orient- ahead ofTwitter, andthustheacquisitionappearsto hold withtheyoungergeneration,isnowinthirdplace by Facebookin2012andgivingthemastrongerfoot- than halftheusersofFacebook.Instagram,acquired competitor, Google+,isa distant secondwithless users ayearbefore.Bycontrast,theirclosestglobal September 2014,upfrom1.19billionmonthlyactive reported 1.35billionmonthlyactiveusersasofend- Facebook continuestodominatethismarket,witha EUR by2018,representingaCAGRof17.3%. at 21billionEUR,andisexpectedtogrow40 market, continuestogrow. In2014,themarketstood Social media,andinparticularthesocialnetworking of thegrowth market globalFacebook healthy the remains juggernaut, leadingthe Social media Here alsomobileisincreasinglybecomingthemain The pictureisalittledifferentinAsia-Pacifi c, however. lion fewerthantheirtotalmonthlyactiveusercount. 1.12 billionmobilemonthlyactiveusers,only0.07bil- 2014. Asofend-September2014,Facebookreported 45%, representingtwo-thirdsforthethirdquarterof revenues, in2013thismobileweightingincreasedto mobile accountedfor11%oftheirtotaladvertising as clearlydemonstratedbyFacebook;whilein2012 an increasingshifttomobileastherevenuedriver, mainly generatedthroughadvertising.Thereisalso nations, isthatthesocialnetworkingmarketvalue Particularly intheUS,andalsotrueformostEuropean revenue paid of portion in Asia-Pacifi except market, the driving advertising Mobile Social media market by region by media market Social EU-28 Billion World Asia/Pacifi c USA € c where the Far East sees high high sees East Far the c where 0221 0421 2018 2015 2014 2013 2012 221. 122. 40.2 26.2 21.2 16.4 12.2 . . . . 5.0 18.9 11.4 13.8 3.4 6.7 11.3 2.8 5.4 8.5 2.3 4.2 6.1 1.7 3.3 > Contact:[email protected] so, whethertheycanresist. quisition offerswillbemadeforthemin2015,andif interesting toseewhetheranymorelarge-scaleac- over 100millionmonthlyactiveusers,anditwillbe on thesource.ItisestimatedthatSnapchatnowhas mum of10billionUSD,even20USDdepending 23 investors,withthecompanybeingvaluedatamini- an aggregateamountof486millionUSDbetween fi ling releasedonthelastdayof2014,ithadraised continued torisein2014,andaccordingtheSEC tion offerfromFacebook.ThepopularityofSnapchat they hadturneddowna3billionUSDcashacquisi- the headlinesinNovember2013whenitwasrevealed deleted oncetherecipienthasseenthem.Itfi rst hit photos andvideosaswellmessages,whichare of 2014wasSnapchat,asocialnetworkforsharing One ofthehottestpropertieswithinsocialnetworking their independence maintaining 2014, of star rising the Snapchat, comes fromdirectpaidservices. majority oftherevenuesinAsia-Pacifi c asawhole also integratingpaidgameswithinitsnetwork,alarge active usersasofend-September2014.WithQzone only toFacebookwithareported629millionmonthly who ownsthesocialnetworkingserviceQzone,second the magnifyingeffectofChina,homeTencent lives orweapons)isnotuncommon.Addedtothis making one-offpayments(tobuy, forexample,extra rience, wherepayingamonthlysubscriptionand/or form acriticalpartofthesocialnetworkingexpe- Particularly inJapanandSouthKorea,paidgames ated throughpaidrevenuesasopposedtoadvertising. revenue driver, butthemajorityofvalueisgener-

Source: IDATE Huge regional disparities Huge regional Facebook still the global heavyweight, ahead of China's Qzone China's of ahead heavyweight, global the still Facebook The world's top seven social networking sites networking social seven top world's The 2018: in ad-funded market media social of breakdown Regional Source: IDATE, in“World internetservices” Source: IDATE, basedoncompany reports 100% 1500 1200 Million MonthlyActiveUsers 80% 20% 40% 60% 900 300 600 0% 0 Facebook Sept.-14 USA Sept.-14 Qzone Google+ Oct.-14 EU-28 Instagram Dec.-14 Oct.-14 Twitter LinkedIn Apr.-14 Asia/Pacific Snapchat Aug.-14 vs. Paid Ads paid paid 107 www.idate.org Social media 108 5.3 DigiWorld 2015 Internet services and players mobile applications. subscriptions shouldbepaidforaccesstovarious counterpart, anditisseenasstandardthatmonthly where mobileInternettookoffbeforeitsfi xed line population. ThisisduetothecultureinFarEast, likes oftheUSandEuropedespiteitsmuchsmaller tions market,providingforalargermarketthanthe torically beentheleaderinpaidmobileapplica- Asia-Pacifi c, pushedparticularlybyJapan,hashis- and videoapplications. specifi c marketssuchaswallpapers,music,e-book purchases andsubscriptions,butexcludescontent- paid businessmodelssuchasdownloads,in-app This forecastincludesalltypesofmobileapplication resents aglobalCAGRof8.7%from2014to2018. from anestimated29billionEURin2014.Thisrep- pected tosurpass40billionEURby2018,growing The worldwidepaidmobileapplicationsmarketisex- East bythe dominated be to continues market paidmobileapplications The applications Mobile app purchasingwillcontinue,andthatby2018more app advertising.Infact,weforecastthattheriseofin- apps, withtheremaining8%beinggeneratedfromin- erated inthisway;69.5%wasstillgeneratedbypaid 2014 22.5%ofmobileapplicationrevenuesweregen- became morepopular, andIDATE estimatesthatby mobile appsincreased,thein-apppurchasingmodel chasing wasstillrare.However, asthepopularityof In theearlydaysofmobileapplications,in-apppur- to maximisetherevenuepotentialfordeveloper. not mutuallyexclusive,andcaninfactoftenco-exist vantages withintheapp.Thethreerevenuemodelsare to accessthemoreadvancedfunctionsorvariousad- tionalities, butrequirespaymentoncewithintheapp lows freeaccesstothemobileappanditsbasicfunc- mobile app.In-apppurchasing,ontheotherhand,al- subscription model,requiredtogainaccessthe advertising. Paidappscanbeaone-offpaymentor applications; paidapps,in-apppurchasing,and There arethreetypesofrevenuemodelsformobile mobile for applications generator revenue main the become to purchases In-app Paid mobile apps market by region by market apps mobile Paid EU-28 Billion World Asia/Pacifi c USA € 0221 0421 2018 2015 2014 2013 2012 722. 883. 40.2 31.9 28.8 24.4 17.2 . . . . 6.4 22.3 6.7 5.1 15.5 5.6 12.8 4.4 5.1 10.2 3.3 4.0 7.9 2.0 2.5 > Contact:[email protected] provision ofGoogle+). elsewhere, inpartusingthedatagainedthrough not aproblemasGoogleitselfgeneratesrevenues obvious revenuegenerationmechanism,butthisis another source.Bywayofexample,Google+hasno on in-apppurchases,advertising,orrevenuesfrom require anyfeestodownloadoruse;theyarereliant is thatnoneofthesemobileapplicationsinthetop10 Also worthnoting,inrelationtotheparagraphabove, remain tocommunicateandinteractwithoneanother. and needsoftheusersthroughtheirsmartphones various apps(‘there’s anappforthat’),thecoredesire phones oftodayprovidingforvariousservicesthrough That said,thistrendshowsthatdespitethesmart- hold asignifi cant shareofthesmartphoneOSmarket. tions arepre-installedintoAndroidOSphoneswhich plications holdanadvantagehere,sincetheirapplica- applications. ItshouldbenotedthatGoogle-basedap- nine mobileappsoutoftenaresocial/communication ular, butascanbeseenfrom thefi gure theremaining munication applications.GoogleMapsisthemostpop- installed) areheavilyskewedtowardssocialandcom- in termsofpercentageuserswiththeapplication The tenmostpopularmobileapplications(measured dominate the most installed mobile applications andapplications Social communication sation strategiescanbeconsidered. providing theapplicationforfree,afterwhichmoneti- lent. Thishighlightsthetrendandimportanceoffi rst applications, halfofthemwereunder1EURorequiva- load, andwithintheremaining10%ofpaidmobile the market,roughly90%ofthem,werefreetodown- 2014, thevastmajorityofapplicationsavailableon to increaseslightly, upto14%in2018.Already to 33%.Revenuefromin-appadvertisingisexpected from thismodel,withtheshareofpaidappsdropping than halfofthemobileapplicationrevenueswillcome

Source: IDATE In-app purchases becoming mobile apps' chief source of income income of source chief apps' mobile becoming purchases In-app Social and communication apps top the ranks the top apps communication and Social Top 10 smartphone apps worldwide apps Top 10 smartphone source by market apps mobile global of Breakdown Source: IDATE, in“World internetservices” Source: GlobalWeb Index Facebook Messenger Weixin/WeChat Google Maps WhatsApp Instagram Facebook YouTube Google+ Twitter Skype 100% 80% 20% 40% 60% 0% 0221 2015 2013 2012 11% 0421 072018 2017 2016 2014 17% 22% 22% 22% 27% 30% 35% 44% Paid In-app Ads 54% application installed % ofuserswiththe 109 www.idate.org Mobile applications 110 5.4 DigiWorld 2015 Internet services and players are nolongeracashcow. SMS bundlesareseenasstandard;voiceand markets whereunlimitedand/orabundantvoiceand value bythemselves.Thisisparticularlythecasein commodity, meaningtelcosarebringingdownmarket es forlessandless,makingthemmorea telcos areofferingtheirvoiceminutesandmessag- and alsothroughcompetitionamongstthemselves, from thetelcos.Rather, through thethreatofOTTs a caseofOTTcommunicationstakingrevenuesaway 0.2%, thusneithergrowingnordeclining;itisnot market isexpectedtoremainsteadywithaCAGRof for 3%.Duringthistime,thetelcocommunications pected todouble,buteventhenitwillonlyaccount communication market.By2018,thisfi gure isex- OTT accountsforonly1.4%oftotalvaluetheglobal lated ascommunicationrevenues. and thuspartoftheiradvertisingrevenuesarecalcu- networks canbethoughtofasacommunicationtool, and alsoashareofsocialnetworkingrevenues– (such asSkype),IPmessagingWhatsApp) The marketiscomposedofthreesegments:VoIP lion EURby2018,representingaCAGRof21.6%. 10 billionEURin2014,andwillgrowto23.7bil- The OTTglobalcommunicationmarketexceeded telcos the awayfrom revenues OTTs, taking for not are they but growth market Impressive services Communication for, fi nally, some21.8billionUSDwasoneofthebig munication market.FacebookacquiringWhatsApp Still, thereisagooddealofinterestinthisOTTcom- not ledtoasignifi cant increaseinrevenues. billions ofmessagesinaday, but ultimatelythishas remain; WhatsAppmayboastabouthandlingtensof but againintermsofrevenuegeneration,questions messaging servicesarereceivingalotoflimelight, profi tability inthisbusinessisextremelydiffi cult. IP ing thejuggernaut,buttheirfi nances suggestthat VoIP hasexistedformorethanadecade,Skypebe- strategy aplatform of part form services communication OTT OTT communication services market by region by market services communication OTT EU-28 Billion World Asia/Pacifi c USA € 0221 0421 2018 2015 2014 2013 2012 . . . . 7.6 23.7 4.2 7.9 13.9 4.4 2.7 4.7 10.8 3.3 2.2 3.7 7.7 1.8 1.7 2.9 5.5 1.0 1.3 2.2 > Contact:[email protected] to thefore. thus OrangeSpainbringstheirOTTservice(Libon) In Spain,however, OTTpenetrationisveryhigh,and thus Orangebringsthetelcoservicetoforefront. penetration (andevenincreasingSMSvolumes),and to thecountry. ForexampleFranceseesverylowOTT penetration ofOTTcommunicationservicesaccording the countryandontelco,heavilyinfl uenced bythe mobile). Whichstrategiesarefolloweddependson GSMA-led initiativetobringOTT-like capabilitiestothe (telcos providingtheirownOTTservice);orJoyn(the as Skypepartneringwithvarioustelcos);telco-OTT dant amountsofminutesand/orSMS);partner(such the useofOTT);bundle(provideunlimitedorabun- rise ofOTTcommunicationservices:block(prohibit There arefi vemaintelcostrategiesinresponsetothe profi country each to adapted be to need strategies Telco response LINE games. of Tencent, whileLINE’s mainrevenuegeneratoris ing paymentserviceTenpay underthesameparent also deployingaplatformstrategy:WeChat combin- been moresuccessfulintermsofrevenuegeneration, tively behindWhatsAppformonthlyactiveusers,have from theFarEast,whicharesecondandthirdrespec- games andcommerce.ThelikesofWeChat andLINE through differentmeanssuchasadvertising,paid base andreach,whichinturncanbeusedtomonetise services, buttousethemastoolsincreaseuser to generaterevenuesdirectlyfromthecommunication part oftheplatformstrategy, wherebytheaimisnot Alibaba investinginTango. Suchstrategiesforma such asSkypebyMicrosoft,Viber byRakuten,and topics of2014,withotherlargeprofi le acquisitions le

Source: IDATE OTT still only a tiny share of the communication services market services communication the of share atiny only still OTT Different countries, different communication strategies communication different countries, Different Penetration rates for IP messaging and top suppliers in 11 in countries suppliers top and IPmessaging for rates Penetration services communication from revenue vendor OTT Telco and Source: IDATE in“Communicationservices” Source: IDATE in“Communication services” South Korea Argentina Germany Billion € 0221 2015 2013 2012 France 6 6 5 5 5 6 764 761 758 757 759 762 767 Japan Brasil China Spain 11 72 24 21 17 14 11 8 5 USA Italy UK Penetration of IP messaging HIGH HIGH HIGH HIGH HIGH HIGH HIGH HIGH LOW MED MED 0421 072018 2017 2016 2014 What'sApp What'sApp What'sApp What'sApp What'sApp What'sApp What'sApp What'sApp WeChat Line Kakao Talk Dominant provider(s) Messenger Line Kik Messenger Pinger Messenger revenues communication OTT revenues communication Telco 111 www.idate.org Communication services 112 5.5 DigiWorld 2015 Internet services and players and socialintegration. no needforaphysicalproperty, targetedadvertising product range,andincreasedcosteffi ciency through digital advantages,suchasawideraudiencereachand been abletocombinelocaladvantagestogetherwith retailers movingintoe-commerce.Suchplayershave are Internetplayers,asopposedtothetraditional It isalsoworthnotingthattheleadersine-commerce Alibaba inChina,RakutenJapanandOzonRussia. however, thesetendtohavetheirownleader, suchas countries. Incountrieswithastronglocalpresence, Germany. Asimilarpatternfollowsinmanyother is inconsequencethelargeste-commerceplayer main approach,suchasamazon.deinGermany, which the e-commercegiantAmazontakesalocaliseddo- cultures ofeachcountryand/orregion.Forexample, but alsotheabilitytoadaptspecifi c needsand of e-commerceislocalisation:notleastthelanguage, of 10.2%and8.8%respectively. Animportantaspect same period,whiletheUSandEU-28willseeCAGR to drivethegrowthwithaCAGRof14.7%forthis CAGR of12.5%.InparticularAsia-Pacifi c isexpected to almost1.9trillionEURby2018,representinga 1.2 trillionEURin2014.Itisexpectedtoexpand The globale-commercemarkethasreachedalmost market the driving players byInternet approach Localised E-commerce the previousyear, anditisexpectedtoreach16%by value in2014camethroughthemobile,upfrom8% casts that,globally, 10%ofthee-commercemarket are undertakenthroughthemobiledevice.IDATE fore- widespread, andanincreasingamountoftransactions perience. The‘mobilefi rst’ strategyisbecomingmore becoming anintegralpartoftheonlinecommerceex- Mobile commerce,orm-commerce,isincreasingly rise the on within e-commerce Share m-commerce of E-commerce market by market region E-commerce EU-28 Billion World Asia/Pacifi c USA € 0221 0421 2018 2015 2014 2013 2012 6 3 0 7 698 1882 498 505 479 1358 390 379 1175 403 355 342 998 333 318 307 845 262 277 270 > Contact:[email protected] the record-breakingAlibabaIPO. to meetoriginalexpectations,beingovershadowedby despite beingsomewhatlacklustreinthattheyfailed panies surpassedthevaluationofonebillionUSD, through Cdiscount)andBrazil.Allthreeofthesecom- ants Casino,withitsmainoperationsinFrance(also Cnova isthee-commercearmofFrenchretailgi- which launchedandfundedZalandobackin2008. is aleadinge-commercefocusedstart-upincubator online-only fashionretailers,whileRocketInternet Zalando, basedinBerlin,isoneofEurope’s largest Internet alsowentpublicinthelastquarterof2014. that wentpublic;allofZalando,CnovaandRocket only Alibaba,however, from thee-commercesector 16 billionUSDraisedupuntilthispoint.Itwasnot had beentherecordholderfortechnologyIPOswith Ltd, whichraised22.1billionUSDin2010.Facebook the previousrecordheldbyAgriculturalBankofChina raising arecord-breaking25billionUSD,overtaking Alibaba, theChinesee-commercegiant,wentpublic matter, 2014willlikelyberemembered astheyear Concerning technologyIPOs,oranyIPOsforthat Alibaba just not IPOs, related e-commerce of A raft of whichm-commerceisbased. transpired tothegeneralmassmorerecently, ontop In theWest, theconceptofmobileInternethasonly 2000s, withmobileInternetaccessbeingthenorm. itself hadalreadybeenestablishedbackintheearly bile commerce,asthemobileInternetinfrastructure and SouthKoreaaredistantleadersintermsofmo- between 2014and2018isforecastat26.2%.Japan 2018. TheCAGRoftheglobalm-commercemarket

Source: IDATE M-commerce nowM-commerce an integral e-commerce of part E-commerce still not fully global fully not still E-commerce Top e-commerce players in Germany and China and Germany in players Top e-commerce Global m-commerce market, and e-commerce market share Source: IDATE, in“World internetservices” Source: Bloomberg, Statista

Amazon Germany.de 5787 100 150 200 250 300 Billion €

Otto 1880 50 0

Zalando 702 2012 2010 2013 sales(million€)

Notebooksbilliger.de 499 Germany 0121 2017 2013 2011 Bon prix 411

Cybersport 404

Tchibo 400

Conrad 390

Alternate 367 2018 2014

H&M 304 2015 5.0% 2.2% 2016 22.7% 19.3% 2013 salesmarketshare(%) Other Amazon China Suning JD.com (Tencent) Tmall (Alibaba) China 10% 15% 0% 5% revenues M-commerce revenues e-commerce as a%of 50.8% 113 www.idate.org E-commerce 5.6 114 DigiWorld 2015 Internet services and players Internet ofThingsatthattime. objects isexpectedtoaccountforamere1%ofthe and only4%forM2M.Thedeployedbaseofconnected of the‘things’,comparedto11%forsmartdevices by 2020,withconnectedobjectsaccountingfor85% Web. Therewillbe80billionconnectedthingsinuse also requireanintermediatedevicetoconnectthe used. TheIoTalsoincludeswearables,manyofwhich nection –inwhichcaseanintermediarydevicewillbe the electroniccomponentsrequiredforadirectcon- object totheInternet,evenifitisnotoutfi tted with machine sincetheIoTmakesitpossibletoconnectany and M2M,butgoingwellbeyondbasicmachine-to- The IoTcoversawiderangeofobjects:smartdevices exchange informationandincreaseitsintrinsicvalue. – whichisviewedasthenetworkofnetworksto object orthingiscapableofconnectingtotheInternet The ideabehindtheInternetofThings(IoT)isthateach under samebanner the concepts Multiple InternetThe ofThings personal data. are generatingamassiveamountofdata,andnotably bracelets, glasses,thermostats,scalestocameras– where agrowingarrayofnewsmartobjects–from things aredesignedprimarilyfortheconsumermarket As withwearables,smartdevicesandconnected solutions consumer to more and more turning giants Internet the adventofSIGFOXandLoRatechnologies. impact onmarketvolume,bolsteredinparticularby Sensor networksareexpectedtohaveaconsiderable rate IoTsolutionswillstillbein-houseB2Bprojects. type ofsolution.Inthemediumterm,mostcorpo- to fullymanagethelargedatabasesneededforthis and anentirelynewinfrastructure–makingitpossible the bestoptionforoutfi tting objectswithvirtualtags technology, combinedwithNFCdevices,whichtodayis single company. Open-loopdeploymentsrequireRFID closed logisticalloops,i.e.controlledentirelybya is developingaroundverticalmarkets,primarilyinside Internet ofThings.AswithM2M,theThings B2B applicationsarebasedlargelyonM2Mandthe purposes Most industrial applications for in-house > Contact:[email protected] end users. they generateisjustrawdatathatoflittleuseto out aserviceattachedtotheobject,information by theendoffi rst year, mostlybecause,with- studies haveshownthatuserstireoftheirwearables slow andevenstagnateinthenearfuture:several adoption ratesforthesenewwearablesarelikelyto based onfi tness apps.Withoutthisservicelayer, to theutilisationofdataaswithcoachingservices These newservicesareexpectedtoemergethanks ate value-addedservices,ontopoftheobjects. platform istheelementthatmakesitpossibletocre- information anddatafromtheirvariousobjects.The manufacturers’ APIs,thankstowhichtheycancollect forms, suchasRuntasticandRunKeeperfor Specialised playersarefocusedonsupplyingplat- IoT of success the to key is Service able tech able big datamarketleaders. Google, Amazon,Microsoftandthelikearealready data techniques.Allthiswhilekeepinginmindthat and especiallybycross-referencingthemusingbig collection ofdatageneratedfromthevariousobjects, monetising. Theseservicescoulddevelopthroughthe data andutilisethem,viaservicesthattheyplanon and WatchKit forApple–whichallowthemtocollect Android Wear andGoogleFitforGoogle,HealthKit their footprintbypushingsoftwareplatforms– being primeexamples.Theyarealsoestablishing maker, Nest,andtheMicrosoft acquisitionofNokia that does:theGoogletakeoverofsmartthermostat Apple andtheiWatch –orbyacquiringthecompany Glass, Google’s Chromecast,AmazonandKindles, ther bydesigningthemin-house–suchastheGoogle Some arefocusedontheproductsthemselves,ei- comes tomonetisingthesedata. companies inthemediumterm,especiallywhenit markets thusrepresentarealopportunityforthese as withonlineadvertisingforGoogle.ConsumerIoT of theirrevenuefromtheutilisationpersonaldata, Meanwhile, mostclassicInternetgiantsearnthebulk andtheyaretakingadvantageofproduct wear- Internet of Things tops the bill The Internet of Things: four very distinct concepts distinct very four Things: of Internet The What is the Internet of Things? of Internet the is What category by objects, connected of Growth Source: IDATE Source: IDATE information device, or specifichubs connectivity connectivity a smartphone Through an Indirect Machines Direct typically Billion units 10 20 30 40 50 60 70 80 or STB 0 2013 points ofsale,remotehealthmonitoring… Connected cars,smartmeters,alarms, 2014 Internet ofObjects Supply andretailchains (RFID, NFC,QRCode) Second screens Primary value connectivity without 2015 M2M

2016

2017

Activity trackers,fitnessgadgets… Connected information (can beinrealtimeordiffered Wearables &gadgets through synchronisation) 2018 Primary value connectivity devices from M2M IoO devices Communicating 115 www.idate.org The Internet of Things 116 DigiWorld 2015 Consumer Electronics 6 Electronics Consumer 117 www.idate.org 118 DigiWorld 2015 Consumer Electronics 6 want tooffer. plications layer thatalltheseotherdevices other devices,andthegateway totheap- phones arebecomingremote controlsfor high-end market;andfinally becausesmart- only holdtheirownbytargeting asmaller, GPS devices.Thesespecialised devicescan as handheldconsoles,digitalcamerasand are graduallycannibalisingunitaskerssuch taken holdasmultipurposedevicesthat els; second,becausemobilephoneshave markets willhingeonlower-pricedmod- massive salesintheChineseandIndian momentum inemergingmarkets,evenif continue toclimbthanksthegrowing consumer electronics:fi rst, becausesales gradually becomethecentreofgravityfor In manyrespects,smartphoneshave the smartphone around revolving market, A converging with connected completes its convergence convergence electronics electronics computing Consumer Consumer remote servers. intelligence andlocalstoragecapabilitiesto monality liesintransferringthedevice’s speakers andcloudgaming,whosecom- virtualising set-topboxes/DVRs,connected ing products.Thisappliestoprojectsfor facturers totheprovidersofcloudcomput- sulting revenuecouldshiftfromtheirmanu- value ofthesehouseholdmachines,andre- in devicestothecloudcoulddiminish tion, movingfeaturesthatonceresided In thisenvironmentofubiquitousconnec- to circulateinsidethehome. band solutionsthatenablenetworkcontent and theintroductionofbroadcast-broad- for relayingonlinecontenttothetelevision, interfaces, solutionssuchasChromecast cially videodevices:commonmulti-screen ments andthoseofotherdevices,espe- ways betweenpersonalcomputingenviron- network. Therearemoreandgate- ther directlyorindirectlythroughahome more canallbeconnectedtotheWeb, ei- puting. Stereos,televisions,camerasand consumer electronicsandconnectedcom- perfect illustrationoftheconvergence smartphones inthecurrentmarketarea The starringroleandeconomicweightof tions remotely. toys andtheability tocontrolhomefunc- monitoring tools,domesticdrones, smart revenue? added generate objects connected Will ics products:watches, the newgenerationofconsumer electron- of theInternetThings(IoT) arealityin the mainfocusisonmaking the promises lets, aswelltelevisions.Today, however, creasingly high-endsmartphonesandtab- introduction of4K)arehelpingcreatein- ments inpicturequality(withtheupcoming ing sizeofscreensandongoingimprove- sales. Asistypicallythecase,increas- novation isthekeytoarevivalofCEmarket ural decline,nowmorethaneverbeforein- At atimewhenpricesareinstateofnat- wearable tech wearable , self- market thatSamsungalsoplanstotarget. frontier fortheiroperatingsystems,a Home Kit,seethesmarthomeasnew Google Thread,andApplewithits connected objectsthemselves.Googlewith thermostat, arestartingtomanufacture which, aswithGoogleanditsNestsmart by thesenewapplicationsfordailylifeand specialised inmanagingthedatagenerated compete withtheInternetgiants,entities nected thingsuniverse?Theyarehavingto tronics suppliersmakeitinthenewcon- to performashoped.Canconsumerelec- turers whosesmartTVappstoresfailed same cannotbesaidoftelevisionmanufac- only onegeneratingsolidearnings–the devices –withApplebeingapparentlythe perimpose alayerofservicesovertheir smartphone makershavemanagedtosu- services tiedtotheirproducts.Whilesome ability toearntherevenuegeneratedby reopens theissueofhardwaresuppliers’ This newgenerationofconnecteddevice home devices. position inmanagingthesenewIP-based boxes, telcosareworkingtoforgeasolid Already enjoyinganinroadwiththeirIP different segments. opt tospecialiseinhigh-endproductsthe market’s ongoingconsolidation,unlessthey few appeartobeinapositionresistthe able todevelopaviableservicelayer. Very critical massofdevicesalesquickly, tobe different marketsegments,andachievea sharpen theirITskills,bepresentinthe need toincreasetheirinvestmentsinR&D, retailers, consumerelectronicssuppliers of theretailmarketaroundtoponline mestic markets,andwiththeconcentration markets whoarebenefi tting fromhugedo- to contendwithnewrivalsfromemerging In amorecomplexenvironment,having Consolidation continues Gilles FONTAINE, Jacques BAJON Jacques FONTAINE, Gilles 119 www.idate.org Introduction 120

DigiWorld 2015 Consumer Electronics 6.1 were smartphones. ephones soldworldwide,orcloseto1.2billionunits, 100 USD.Thisexplainswhy, in2014,64%ofthetel- and growth rates.Thedistinctionbetweensmartphones tries isstillunderconstructionandenjoyinghigh ment market,whereasthemarketindevelopingcoun- reached maturityandhasbecomelargelyareplace- more advancedcountries,thesmartphonemarkethas sentially smartphonesthatmakethedifference.In (Brazil, Russia,India,China)countries.Here,itises- below growthinthemoredynamicdevelopingBRIC Western Europe,JapanandSouthKorea,waswell more advancedcountries,i.e.inNorthAmerica, lion handsetsworldwide.Growthinthetraditionally by closeto6%,whichtranslatesintosalesof1.9bil- The mobilephonemarketgrewonlyslightlyin2014: inAsia momentum and slowing growth End smartphone of and itsecosystems The smartphone it tookthreeyearstogofromsmartphonescapable stantial developmentinthemarket2014:while greater mobilitythatLTE delivers.We sawasub- to beabletakeadvantageofthehigherspeedsand market, withusersbuyinganewgenerationhandset LTE networksworldwide hasdriventhereplacement a fewyearsago.Atthesametime,rolloutof population thatcouldnothaveaffordedasmartphone ingly affordableproducts,andtheabilitytotargeta competition inthemarketplace,haveenabledincreas- the decreasingpriceofcomponents,combinedwith that havebeengeneratedoverthepastseveralyears, the LTE ecosystem.Thankstotheeconomiesofscale on theonehandand,other, thedevelopmentof tion costs,andsoincreasinglyaffordablesmartphones, market volumetocontinuerise:decreasingproduc- There aretwotrendsinparticularthatallowing ecosystem LTE the of growth remarkable The phone feature a high-endandlow-endsmartphone,thanbetween today, thereisprobablyabiggerdifferencebetween evant, asentrylevelmodelsaresteadilydisappearing: Mobile phone sales worldwide sales phone Mobile Total mobilephones units Billion Smartphones penetration rate ofwhichsmartphones feature phones feature andasmartphonethatcostslessthan isbecominglessandrel- 0021 0221 042018 2014 2013 2012 2011 2010 3 0 0 3 4 85% 64% 53% 40% 30% 23% 0.3 0.5 0.7 1.01.3 1.9 1.3 1.61.7 1.8 2.02.3 > Contact:[email protected] on theservicessideofthings. competitive landscape,upheavalsarealsoplayingout source ofincome.Sobehindthesechangesinthe ing inmindthatadvertisingisstillthecompany’s chief on whichGoogleearnsnoadvertisingrevenue–keep- with Google,andofferingotherlocalservicesinstead, version ofAndroid,AOSP, whichrequiresnocontract ing devicemakersareinfactadoptingtheopensource hides amorecomplexreality. Moreandmoreemerg- market sharein2014)termsofdevicenumbers preted. Android’s marketdomination(acloseto85% array ofhardwaresuppliers,mustnotbemisinter- Android’s apparentdomination,sustainedbyawide services andconnectedobjects–amovementinwhich ability tocreateacompleteecosystemthatincludes well beyondjustsellinghandsets,andextendintothe newcomers arevyingforposition.Thechallengesgo Behind marketleadersSamsungandApple,ahostof tive landscapeandcoremarketissuesarechanging. phones 4G-capableastimegoeson,thecompeti- cal maturity, whichwillmakemoreandsmart- broadband connections.Butbeyondthistechnologi- a throughputthatisoftengreaterthancertainfi xed FDD andTDD,alongwithvoiceoverLTE, anddeliver handsets haveupto20differentLTE bands,both handsets weresoldin2014.Today, themostevolved ployed untilDecember2013,closeto100million4G In China,wherethefi rst LTE networkswerenotde- new challenges hides that maturity A technological use ofspectrumaggregation. naturally goeshandinwithoperators’increasing with speedsofupto450Mbps,animprovementthat pear. In2015,somesmartphoneswillbecompatible phones featuring300MbpsLTE capabilitiestoap- delivering 150Mbps,ittookonlyayearforsmart- of deliveringspeeds100Mbpstoonescapable

Source: IDATE Behind Apple and Samsung, an ever-changing cast of characters of cast ever-changing an Samsung, and Apple Behind Beyond Android and iOS: is there room for anyone else? anyone for room there is iOS: and Android Beyond Change in market share for mobile platforms, 2011 2014 and platforms, mobile for share market in Change supplier by volume market smartphone of Breakdown Source: IDATE estimatesaccordingtomanufacturers Source: IDATE estimatesaccording tomanufacturers 11.2% 1.6% 16.3% 100% 19.8% 80% 20% 40% 60% 0% 0921 0121 032014 2013 2012 2011 2010 2009 3.4% 2011 47.7% 13.5% 2.6% 2014 0.6% 83.4% Samsung Apple Huawei Lenovo LG Xiaomi ZTE Sony TCL Nokia Others Others Symbian OS Blackberry Phone Windows iOS Android 121 www.idate.org The smartphone and its ecosystems 122 6.2 DigiWorld 2015 Consumer Electronics it UHD. words changingthescaleofnon-UHDcontenttomake the selectionofavailablecontenttodevelop,inother UHD deviceswillemployupscalingwhilewaitingfor fully amortisedtheirHDequipment. their investments,notleastbecausetheyhaveyet taking, andmarketplayersarewisetobecautiousin vices. ProducingUHDcontentisaverycostlyunder- users haveoutfi tted themselveswithcompatiblede- producers arenodoubtbidingtheirtimeuntilenough On theotherhand,UHDcontentisslowincomingas saw ondisplayatCES2014. manufacturers nowhaveaUHDproductline,aswe eras andcamcordersaswellDVRs.Allofthetop home opticaldiscplayers,cinemaamps,cam- all CEmarketsegments:televisions,videoprojectors, expanded signifi cantly overthe pastyear, andthisin The rangeofUHDconsumerelectronicsproductshas coming in slow is content but expanding, products UHD of Selection eral yearsbythetechnicalendofTVindustryplayers. 4096×2160 pixels,whichhasbeenemployedforsev- even thoughthetermactuallyreferstoaresolutionof of pixelsFullHDresolution–hencethe4Kmoniker, 3840×2160 pixels,whichisfourtimesthenumber lution standard.Itisbasedonaresolutionof Ultra HighDefi nition (UHD)isanewpicturereso- UHD: bolstering sales TV Video devices and UHD rather comparable. price rangesforUHDandLCD-LEDtelevisionsare offering relativelylowretailprices.Asaresult,the ers arelookingforawaytorevivesalesquickly, by ucts. Afterthefailureof3Dtelevisions,manufactur- in awaythatwouldordinarilyapplytomatureprod- cle, andmanufacturersaresettingUHDpricepoints Today, LCD-LEDTVsarenearingtheendoftheirlifecy- The typicallifecycleofatelevisionissixtoeightyears. technology… display OLED with UHD of convergence Televisions: Global TV sales by region by sales TV Global Asia/Pacifi c Europe North America units Million Total Latin America 9. 9. 8. 9. 308.4 167.6 291.5 157.5 287.5 156.6 291.4 157.9 293.1 150.6 0321 0521 2018 2016 2015 2014 2013 672. 202. 23.8 72.0 22.6 44.9 67.4 22.0 44.0 65.1 23.7 43.8 65.8 26.7 44.0 71.5 44.4 > Contact:[email protected] holds willownanUltraHDtelevision. year uptothen.In2018,7.1%oftheworld’s house- 73.5 millionin2018,meaningsaleswilldoubleevery world in2014,afi gure thatwebelievewillincreaseto In all,4.5millionUHDtelevisionsweresoldaroundthe set soonerthanplanned. be capableofinspiringhouseholdstoreplacetheirold with thesmart-OLED-UHDtechnologytriumviratewill In particular, IDATE believesthattelevisionsoutfi tted combine OLEDandUHDbegintobewidelyavailable. of UHDandOLEDtelevisions,astelevisionsthat to reachmaturity, thankstoadecreaseintheprice in 2016,asvalue-addedconnectedTVproductsbegin But themarketisforecasttostartgrowingonceagain remain relativelyunchangedin2015. around theworldin2014,afi gure thatisexpectedto ning ofaslump.291.4milliontelevisionsweresold smart-LED-HD-1080p sets,2014markedthebegin- and 2012,ashouseholdsoutfi tted themselveswith If theTVmarketenjoyedstrongsalesbetween2006 2016 by growth market revive should … that located behindthescreen. are backlitwitheitheramatrixofdiodesortubes LCD andLEDdisplays,ontheotherhand,pixels emits lightinresponsetoanelectricalcurrent.With the emissivelayerisafi lm oforganiccompoundthat are onlyafewmillimetresthick.WithanOLEDdisplay, than LCDorLED,andtodesigncurveddisplaysthat er imagesthataremoreluminousandhighercontrast OLED technologymakesitpossibletogeneratesharp- gan takingpre-ordersinAugustSouthKorea. televisions thatcombinethetwotechnologies;itbe- technology. AtIFA 2014,LGunveileditsnewlineof a convergenceofUHDresolutionandOLEDdisplay TV manufacturersarepositioningthemselveswith

Source: IDATE TV supplier pricing strategies stimulating UHD sales UHD stimulating strategies pricing supplier TV 73.5 million UHD TVs will be sold worldwide in 2018 be73.5 will worldwide sold million UHD TVs UHD TV sales by region by sales UHD TV 2014 in technologies, TV various of lifespan and price retail Average Source: IDATE Source: IDATE adopters market Mass Early Sales volume 01234567 Million units 10 20 30 40 50 60 70 > 8000€ 0 2014 Launch 4.5 3 000-4€ 11.1 2015 OLED UHD 2 000-500€ Growth 2016 22.7 OLED 41.4 2017 1 000-500€ UHD Maturity 71.7 2018 North America Europe Asia/Pacific Latin America LED LCD Decline 800 -1000€ Years 123 www.idate.org Video devices and UHD 124 6.3 DigiWorld 2015 Consumer Electronics control whichhasyettoproveitself,recommendation to connecthouseholddevicesaTVinterface,voice TVs intosmartovernight,andmadeitpossible were beingdeveloped:streamingsticksthatturned have beenshared,whilecomplementarysolutions liness isthekeytosuccess.Knowledgeandplatforms The markethasbynowacknowledgedthatuserfriend- failure GoogleTV–orRoku. as AndroidTV–whichmadeacomebackafterthe gether andrelyinsteadonthird-partysolutionssuch manufacturers electedtoabandontheplatformalto- bolstered bytheintegrationofHTML5.Later, some forms availabletodevelopersthanksonlinetools, to developcommonplatformsandmaketheseplat- A seriesofmanufacturerallianceswerethusformed chief aimofsellinghardware. Only Applehasnavigatedthissuccessfully, withthe in termsofconsumerproductsandbusinessmodel. device, platformandservicesisacomplexundertaking veloping applications,andthattheintegrationof of platformsdiscouragescontentprovidersfromde- software isnotintheirDNA,thatthefragmentation Manufacturers arerealisingthatcreatinguser-friendly exist, proprietarysystemsdoseemtobefadingaway. Even ifthetwoecosystems,i.e.openandclosed,co- content, borrowedfromtheworldofportablescreens. to theapplication,coremodelofinteractivitywith activity) orease.Somanufacturersshiftedtheirfocus in termsofusage(TVviewingtendstobeagroup ing marketwasnotsuitedtotheTVscreen,either starting withtablets,confi rmed thattheWeb brows- The proliferationof problems the to Solutions tion ofTVcontent,andhighpricetags. clunky viewinginterface,adisparateandpaltryselec- the platformandservicesavailabletousers,a etary systemsthattoooftensoughttointegrateboth geared tousingtheInternetonTVscreen,propri- first waveofsmartTVs:thefactthattheywere There areseveralexplanationsforthefailureof versions pioneer of Failure strategies their rethink manufacturers TV TVs Smart Smart TV shipments by region by shipments TV Smart Asia/Pacifi c Europe North America units Million Total Latin America companion devices companion inthehomes, 0221 0421 2018 2015 2014 2013 2012 119. 2. 4. 240.1 107.5 70.1 149.5 44.9 55.5 47.6 120.7 42.3 40.0 94.9 39.3 38.6 28.1 71.1 33.3 31.7 20.5 26.8 22.7 . . . . 17.7 4.1 2.8 1.8 1.1 a Service a > Contact:[email protected] beyond theoldhometelly. that havearisenforallstakeholders,andextendwell perience insideandoutsidethehome,arechallenges TV solutions,anddeliveringaunifi ed multi-screenex- connected environment.Theriseofcentralisedcloud plays, attheexpenseofhardware,inanincreasingly distribution isstrengtheningtherolethatsoftware Lastly, theITworld’s growingprominenceinvideo in customers’homes. vices, andthattheyhavetheirownhardwareinstalled through theInternetconnectionofconnectedde- tors thatcontrolthedeliveryportionofequation by nomeansrisk-free,keepinginmindthatitisopera- up aspotentialrivalsforwirelinenetworkoperatorsis ers canaimforasimilarposition,settingthemselves selves uptotheOTTuniverse.EvenifsmartTVsuppli- room distributionsolutions,arealsoopeningthem- smart TVmanufacturersviaapplicationsandmulti- and IPTVcompanies,whichtodaycanpartnerupwith A newcompetitivelandscapeistakingshape.Cable content providers,and‘traditional’videodistributors. as possible,withaviewtodelivering are seeingdevelopinvolvesmakingoneselfasopen a revenuesharingscheme.Anotheroptionthatwe advertising testsdoexist)orpay-TVearningsthrough the hopeofearningashareadrevenue(targeted viders asanaggregationportalisoneoption,with Trying toimposeone’s ownplatformonservicepro- and thebestTVgeneraterevenuefromthat? Focus onsales,ortrytodeliverthebestofWeb A complex equation the TVuniverseonsameinterface. a desiretoofferthebestofWeb andthebestof decisions arebeyondthegraspofmanufacturers,with Netfl ix leadingthecharge,hasshownthateditorial In addition,thesuccessofOTTvideoservices,with ties tocloudTVsolutions. and customisationtoolsthathaveincreasinglydirect (PaaS)solutionthatisopentodevelopers, Platform as as Platform

Source: IDATE Growing ubiquity of smart TVs smart of ubiquity Growing Two opposite trends: open access and competition and access open trends: opposite Two The smart TV platform ecosystem platform TV smart The region by rate penetration household TV Smart Source: IDATE in“ConsumerElectronics” Source: IDATE in“NewTVplatforms” 120% 150% % ofhouseholds 90% 30% 60% 0% partnerships 2009 Licensing & Alliances & integration standards Vertical 0021 0221 0421 0621 2018 2016 2017 2015 2014 2013 2012 2011 2010 FTA related TV world related Pay-TV Giants Internet world platforms Viral TV set manufacturers CE equipment Latin America Asia/Pacific Europe North America Streaming box 125 www.idate.org Smart TVs 126 6.4 DigiWorld 2015 Consumer Electronics for DTT. (DVB-S2 tuner),muchlikethehybridgeardesigned ing aresurgenceofinterestinintegratedtelevisions the momentumoffreesatelliteTVoffersistrigger- thanks toanInternetconnection.Ontheotherhand, screen, multi-room,pushVOD)and/orhybridservices to provideviewerswithadvancedliveservices(multi- fering feature-richSTBs(IPconnectivity, harddrives) ways compensatedfortheirlackofinteractivitybyof- A morepremium-orientedproduct,DTHplanshaveal- have enabledaworldwithoutset-topboxes. encrypted programmes,conditionalaccessmodules ushered inthefi rst built-intunersontelevisions.For already wellunderway. DigitalterrestrialTV(DTT) The decreaseinSTBsforterrestrialreceptionis pioneers market Broadcast • thebeginningofmarginalisationset-topboxes • the introductionofnew, moreconnectedand • IP videosolutionsbasedonclient-serverarchitec- the set-topboxmarketinseveralfundamentalways: The developmentofonlinevideoproductshasaffected obsolete? boxes set-top make environment viewing new the Does cloud? homeorinthe at Is future the ofset-top future boxesThe media gatewaythatservesasbothSTBandmodem. change isstartingtotakeplacewiththeadventof (television, Internet,telephone).Butafi rst waveof scribers, allowingthemtomanagetriple-playbundles invariably representsafundamentallinkwiththeirsub- For pay-TVproviders,theequipmentinusers’homes networks IPTV and cable for options New STB shipments, by region by shipments, STB Asia/Pacifi c Europe North America units Million Total Latin America devices. with afi rst responseintheformofhybridTV/IP that donottakethisIPenvironmentintoaccount, personal, ifnotindividual,TVviewingservices; lises TVviewing; weakens thestatusofalinearTVdevicethatcentra- demand servicesonalltypesofscreen,andthus tures, whichfacilitatesusers’propensitytouseon- 0221 0421 2018 2015 2014 2013 2012 997. 40129189.2 126.7 29.3 112.9 18.2 71.9 94.0 19.3 16.1 57.9 75.5 17.1 15.5 44.7 59.9 15.6 13.1 34.2 13.9 10.7 . . . . 15.0 5.5 3.4 2.0 1.1 > Contact:[email protected] boxes isentirelypossible,butstilladistantprospect. viewing universethatislessdependentonset-top needs tobedigitised,asdothehomedevices.ATV Africa, alargeswatheofexistinginfrastructurestill TV services.Moreover, inAsia,LatinAmericaand allows userstoaccessclassicTVservicesandcloud new pathhaveoptedtokeepaminimalistdevicethat As itstands,veryfewoperatorswhoaretakingthis evolution A long-term integrated intoahomegateway. hold incustomers’livingrooms,ifitisnotalready give operatorsanincentivetokeeptheDVRasafoot- competition betweenconnectedTVplatformscould But onecentralissueremains:thedevelopmentof own equipment. ship, withconsumersfi nancing devicesthroughtheir ble changeintheconfi guration ofthepay-TVrelation- a profi tcentrewithrentals.Thiswouldleadtoapossi- investments inhomedevices,eveniftheycanbecome devices. Thistrendanticipatesadecreaseinoperator to deployhomogenoususerinterfacesdifferent addition, acentraliseduserinterfacemakesitpossible ers toadaptmorequicklychangesindemand.In for moreflexible operations, andallowsserviceprovid- Centralising themanagementofvideocontentmakes fl operational improve to Working do awaywiththeseintermediarydevicesentirely. nected devicesinthehome,operatorscouldeventually consumers. Bythesametoken,byrelyingoncon- production ofnew, smallerandcheaperdevicesfor handled bythenetwork.Thisinturnallowsfor of advancedSTBs,asmosttheirfunctionscanbe of TVcontentandservicescallsintoquestionthevalue new viewerbehaviours.Thecentralisedmanagement are creatingcloudTVsolutionstostayinsyncwith With thedevelopmentofIPvideoservices,operators exibility

Source: IDATE OTT video and cord-cutting undermining STB growth STB undermining cord-cutting and video OTT Cable: No. 1 in the STB market thanks to digitisation to thanks market STB the 1in No. Cable: Breakdown of global STB shipments by type of network, in 2013 in 2018 and network, of type by shipments STB global of Breakdown region by shipments STB Digital Source: IDATE in“ConsumerElectronics” Source: IDATE in“ConsumerElectronics” 18% Million units 100 150 200 50 0 13% 0321 0521 072018 2017 2016 2015 2014 2013 30% 2013 39% 15% 13% 30% 2018 North America Latin America Europe Asia/Pacific 41% IPTV Terrestrial Satellite Cable 127 www.idate.org The future of set-top boxes 128 6.5 DigiWorld 2015 Consumer Electronics The manufacturers by dominated ecosystem An prove processesandproductivity. world, incorporatingthesesolutionsinabidtoim- We arealsoseeingsomerolloutsinthecorporate the chiefsegments,particularlyintermsofvolume. even iffi tness, well-beingandlifestylenaturallyremain These objectsareusedforarangeofapplications, radio technology. device/concentrator, usuallythankstoshort-range nected, typicallyindirectly, totheInternetthrougha ity trackersthatareoutfi tted withsensorsandcon- as bracelets,watches,glasses,helmetsandactiv- Wearable technologyreferstoeverydayobjectssuch devices New connected Wearables information/data fromthedifferentobjects.The manufacturers’ API,whichallowthemtocollect as RuntasticandRunKeeper, benefi t fromproduct via thesupplyofplatforms.Mostspecialists,such Data-centric companiesareinvolvedinthemarket when userspurchaseaTimex smartwatch. maker Timex: ayear’s worth ofconnectivityisincluded segment, notablythroughapartnershipwithwatch- not consideredvital.OnlyAT&T hasinvestedinthis absent fromthismarketsincecellularconnectivityis In termsofconnectivity, mobileoperatorsarelargely of theirrevenue,bothtodayandoverthelongterm. around productsalesashardwaregeneratesthebulk the latestcompanionscreen.Theirstrategyisbuilt bles areseenasthelatesthardwareinnovation,or with high-endproducts(connectedwatches),weara- tioned inthismarket(SonyandSamsung),typically particular). Forsmartphonesuppliersthatareposi- others insportingequipment(NikeandAdidas, ing inaccessories(Garmin,SuuntoandPolar) from thesportinggoodssector, withsomespecialis- focused chiefl y onbraceletsandtrackers.Others are specialists, suchasFitbit,WithingsandJawbone, coming fromavarietyofsectors.Somearewearable makers oftheseobjects,whichtherearemany, Global wearable tech sales by category tech Global wearable Glass Wristband Watch units Million Total Other wearables valuechainislargelydominatedbythe 0421 0621 2018 2017 2016 2015 2014 23 15 3571 01246 53 > Contact:[email protected] Glass wassellingforasmuch1,500USD. involved. Althoughcurrentlyonhiatus,theGoogle not leastbecauseofthetremendousrangeprices Here too,fi gures willvaryforthedifferentcategories, In 2018,wearablesaleswillgenerate22billionEUR. due tocomeonthemarketin2015. 2018, andspurredchiefl y bytheAppleWatch thatis the market,withprojectedsalesof80millionunitsby of wearable.Smartwatchesareexpectedtodominate – althoughthefi gure will varydependingonthetype translates intoanaverageannualincreaseof70% sold in2018,comparedto10million2013,which IDATE estimatesthat123millionwearableswillbe boom wearables upcoming The the mediumterm. from ahandfuloftrials)andevenremainmarginalin data resellingwillbelesslikelyintheshortterm(aside to seethesupplyofservicesbasedonpersonaldata, through a‘servicising’model.If,however, wedostart of scenariosarepossible:directsalethedataor these datamaynotbeasimpleaffair, evenifanumber or nottheyconstituteprivatedata.Somonetising data generatedbyanobject,andparticularlywhether how fastthischangeoccurswilldependonthetypeof these wearablestoothercompanies.Whetherand as supplierscanreuseorsellthedatageneratedby tive partoftheirbusiness.Thiscouldverywellchange bles isproductsales,whichtodayarethemostlucra- The mainbusinessmodelforthesuppliersofweara- sales product on chiefl based model A business based onfi tness applications. utilisation ofthesedata,suchascoachingservices These newservicesareexpectedtoemergefromthe sign value-addedservicesfortheobjects. platform istheelementthatmakesitpossibletode- 56 15 55 79 20 06 y 9123 99 15 52 58 15 2 0

Source: IDATE Smart watches the top wearable market wearable top the watches Smart A new data-centric economy data-centric A new Innovating with business models business with Innovating category by worldwide sales wearable of Growth Source: IDATE, in“Wearables anditsverticals” Source: IDATE, in“Wearables anditsverticals” Vertical industryplayers 10 15 20 25 Billion € 0 5 Wearable maker purchase Data 0321 0521 072018 2017 2016 2015 2014 2013 Data configuration Traditional deal device cost(in€) Discount onthe purchase Device configuration New deal end userbill(in€) Discount onthe End user Watch Wristband Glass Others 129 www.idate.org Wearables 6.6 130 DigiWorld 2015 Consumer Electronics gies. In been updatedbytheintroductionofdigitaltechnolo- Smart toyscanbeexistingwhosedesignhas game distributionplatform. mat orboard,gameboardand/ormanager, orvideo the connectedsmarttoycanplayseveralroles:game Thanks totheapplication,deviceassociatedwith developed bythefi rm, LesEditionsVolumiques. proving thepopularityofanewconcept:videotoy. and morethan175millionactionfi gures weresold, protocol, whichisusedbythe but twoinparticularappeartobetakinghold:theNFC allow thetoyandplatformtotalkeachother, dedicated device.Severaltechnologiesareusedto with ascreen:tablet,smartphone,homeconsoleand connected objects(thetoy, ortoys)andaplatform be avideogameorsimpleanimation,oneseveral up ofthreeelements:avideoapplication,whichmay industries: videogamesandtoys.Asmarttoyismade of theconvergencetwoverydifferententertainment Smart toyshavebecomeanewmarketsegment,born segment market anew of creation the … behind Skylanders In 2011,videogamepublisherActivisionlaunched Skylanders: isborn segment A newmarket toys Smart tures, concepts, asisthecasewith Smart toyscanalsoexpressorembodyentirelynew as thebanker, thusenhancingplayers’experience. or tabletisplacedinthecentreofboardandacts the venture land,usingthecontroller. ByFebruary2014, appears onscreenasaplayableavatarinanepicad- to agameconsoleorperipheral.Thecharacterthen designed tobeplacedonaportalthatisconnected Infi nity Infi Global video game, smart toy and toy market toy and toy smart game, video Global Smart toymarket Billion Billion Toy market Video game market Skylanders series,andelectrostaticsensing,notablyas Skylanders € Monopoly Zapped Monopoly . Littleactionfi gures offantasticalcrea- a disruptive innovation … franchisehadgenerated2billionUSD, areoutfi tted withanRFIDtagand , forinstance,asmartphone Skylanders Skylanders . and Disney Disney 0321 0521 2018 2016 2015 2014 2013 586. 656. 67.8 68.4 66.8 61.9 66.5 55.3 66.1 47.7 65.8 41.3 . . . . 7.4 4.7 3.4 2.2 1.3 > Contact:[email protected] the videogameandtoymarkets. 2018, atwhichpointtheywillrepresent11%ofboth and areforecastbyIDATE toreach7.4billionEURin Smart toyswerea2.2billionEURmarketin2014, smart toys. side thehomewillnodoubthelpbolstersaleof The nearingubiquityofsmartphonesandtabletsin- Germany, ItalyandSpain. game inFrance2013,andnumberonetheUK, is listedbyNPDGroupasthesecondbest-selling notable successesinclude for 2012by developed bySophisti,andnamedGameoftheYear Smart toysareenjoyingaboom.Alongside A 7.4 2018 by billion EUR market • A modelemployedbyvideogamepureplayers, • A modelemployedbyAAAvideogamecompanies: A modelemployedbytoymanufacturers:thevaluelies • try thecompanycomesfrom. smart toymarket,andusuallydependonwhichindus- Several businessandpricingmodelscoexistinthis Nukotoys andLesEditionsVolumiques. the emergenceofyoung,innovativestart-upssuchas Lego) haveinvestedinsmarttoys.We arealsoseeing major toymanufacturers(notablyMattel,Hasbroand Video gamemarketplayersbigandsmall,aswell prices and models business of A range thereby enablinguserstotestitbeforebuying. can beusedevenifthetoyhasnotbeenpurchased, ment, andusuallyfree.Insomecases,theapplication in thetoy. Thevideoapplicationisusedasanenhance- which isacombinationofthefi rst two. to bemorelucrativethanthesaleofgameitself. ed smarttoysthatusersneedtocollectisdesigned tively expensivetobuy. Butthepurchaseofassociat- the valueliesinvideoapplication,whichisrela- Creative Child Magazine Child Creative GameChanger . Furby Boom Furby whichwas Skylanders,

Source: IDATE Smart toys forecast to generate more than 10% of video market revenue in 2018 in revenue market video of 10% than more generate to forecast toys Smart Smart toys: 2% to 11% of the toy market in fi in market toy the of 11% to 2% toys: Smart Smart toy share of toy market revenue market toy of share toy Smart revenue market game video of share toy Smart Source: IDATE Source: IDATE 10% 12% 10% 12% 8% 0% 2% 4% 6% 8% 0% 2% 4% 6% 0321 0521 072018 2017 2016 2015 2014 2013 0321 0521 072018 2017 2016 2015 2014 2013 ve years' time 131 www.idate.org Smart toys 132 DigiWorld 2015 Vertical markets 7 markets Vertical 133 www.idate.org 134 DigiWorld 2015 Vertical markets 7 T along withmanyoftheproducts. structures themselvesarebeingdigitised, picking upspeed,asaportionoftheinfra- tures. Today, thedigitaltransformationis goods andservicesproductioninfrastruc- IT-based supervisionof(largelyunchanged) rethinking salesprocesses,coupledwith velopment. Thepreviousstagewasoneof retail chains. the automotive sectorandbytraditional products, whilestillusedrelatively littleby to thesaleoftransportand travel-related Digital technologyhasalsobecome central are morenumerousandavailable 24/7. can beplannedwhich,with the Internet, and services,lesstopurchasesthat not applytothesaleofdigitalproducts fast distributionofproducts.Thisdoes to providetheactual-sizedisplayorvery chief purposeofphysicalpointssaleis relatively intangible.Inmanycases,the The businessofsellingis,bynature, habits consumer to tailored processes Sales entering intoanewstageintheirde- he Internetanddigitalmarketsare Internet sector Coopetition with the even incomparisontocallcentres. forums, FAQ andotherdigitalassistants, ate substantialsavingsfromautomationvia true ofafter-salesservices,whichgener- sions paidtothirdparties.Thesameis work, evenwhenfactoringinthecommis- to operatethanaphysicaldistributionnet- different saleschannelsarelessexpensive Provided theyachieveacriticalmass,these its isnottheonlythinghappeninghere. So tailoringprocessestoconsumerhab- sites onprices,usercomments,andsales. fected bythegrowingimpactofbrokerage ing sites.Thetravelindustryisdirectlyaf- way ofpaymentsolutionsonsocialnetwork- payment methods,fromPayPaltoNFC,by fi nance isadaptingtoaplethoraofnew munication andmappingtools.Asaresult, consumer forums,infomediarysites,com- cal), socialnetworkingsites,mobileapps, time: searchengines(whichmaybeverti- ers, therewheretheyspendmostoftheir them withopportunitiestointeractus- marketplaces andlocationsthatprovide marketing effortsandbudgetstodigital industries areshiftingtheirdistributionand aimed attheconsumermarket.Vertical in everysectorofactivity, particularlythose Digitisation isclearlymakingclearinroads transformation liesinproduct disruption latest The tures andproducts themselvesremained tions (cloud,SDN…). However, infrastruc- proved overtimebyaseries ofITinnova- signifi cant productivitygains, furtherim- of computer-basedtoolsthat enablevery personnel, suppliers)thanks totheuse and managementofresources (inventory, chiefly aroundimprovingthesupervision Up untilnow, developmentshavecentred its infrastructureandphysicalproducts. on otherkeyaspectsofanenterprise,i.e. nance), itsimpacthasbeenlessdramatic deal essentiallyinintangibles(notablyfi - cesses evenif,outsideofbusinessesthat Digitisation hasaffectednotonlysalespro- rials andmodels.Today, 3Dprintersare produce virtuallyanythinguserawmate- of 3Dprintingthatwillallowanyoneto ics andespecially, furtherdowntheroad, shaken upbythedevelopmentofrobot- The productionofphysicalgoodsisbeing duction ofdigitaltechnology. universe, isprofoundlyalteredbytheintro- uct/service, andespeciallytheproduction users’ idleresources.Hereagain,theprod- software platformsthatprovideaccessto to allproductsandservices,isbuiltaround consumer-to-consumer (C2C)transactions The collaborativeeconomy, whichexpands no screen. ity, suchasthemanywearablesthathave ucts thatareworthlesswithoutconnectiv- nesses. Therewillbemoreandprod- and monitoringofpatientswithchronicill- the developmentofremotehomecare while connectedhealthequipmentenables paves thewayforautonomouscar, product thatchanges.Theconnectedcar and evenRFID),itistheverynatureof a multitudeoftechnologies(cellular, LPWA printing. Withconnectivity, anddeliveryby things, thecollaborativeeconomyand3D tion, withthedevelopmentofconnected digital ecosystemwillbeaveritablerevolu- This newstageinthedevelopmentof related settings. ing customerloyaltyaccounts,andallthe mentary supportservices,suchasmanag- gave risetowhatwereessentiallycomple- tion forpointsofsale.Digitaltechnologies compared tothemorefundamentaldisrup- largely untouchedbythesedevelopments, consumer models. already relativelyaffordable,eventhe them directly. er customerbase–andcompetingwith – probablytradingtheirmarginsforalarg- fi rms, toreachtheircommercialtargets to choosebetweenpartneringwiththese Vertical marketleaderswillthereforeneed all thesearetypical. and digitalwalletsfromvirtuallyeveryone– and healthproducts(GoogleApple), the grocerybusiness(GoogleandAmazon) Android andiOSincars,diversifi cation into ready manyandgrowing:theGoogleCar, Pioneer initiativesinthisdirectionareal- talising ontheirexistingcustomerbase. build acompleteverticalbusiness,capi- the rewardsofintermediary, ifnotto At theveryleast,thisallowsthemtoreap just digitalproductsandservices. segments, andsoextendingwellbeyond customer relationsplatforms,coveringall popular devicestopositionthemselvesas vices, intermsofusertraffic, and/orhugely their centralpositionsinahandfulofser- The Internetgiantswillbeabletoleverage sectors thataremoreB2Coriented. of theloop,particularlythoseoperatingin to contendwiththethreatofbeingcutout table. Buttraditionalbusinessesarehaving thanks toproductivitygainsisstillonthe ditional sectors.Theabilitytocutcosts force arethinkofbusinessmodelsintra- This newwavewillreshuffl e thedeckand companies? Internet for role What Vincent BONNEAU Vincent 135 www.idate.org Introduction 136

DigiWorld 2015 Vertical markets 7.1 the smartphoneforinfotainmentapplications. the on-boardsystemfortelematicsservices,andof fi nal solutionisacombinationofthefi rst two:useof as theneedtousesmartphone’s miniantenna.The nectivity, albeitwithcertaintechnicalconstraintssuch option consistsofusingasmartphonetomanagecon- is dedicatedentirelytoconnectedservices.Another tion, i.e.withthemodulebuiltintocaritself,asit most technicallyadvantageousisanon-boardsolu- technical solutionsbeingemployedtoday, ofwhichthe In termsofimplementation,therearethreemain applications thatareavailable. which ismoreakintothemobileInternetthanks driving andcar-relatedservices, fi eld aretelematics,whichessentiallybasedon The mainconnectivityapplicationsintheautomotive outside thevehicle. access withotherapplicationsordevicesinsideand municate withtheoutsideworld,andtosharethis equipped withInternetaccessthatallowsittocom- The conceptoftheconnectedcarreferstoa vehicles Smarter Connected cars ing, andevenshrinkingincertainpartsoftheglobe, time whentheirtraditionalmobilerevenueisfalter- of theirbiggestmarketsintermsvolume.Ata already involvedinthesector, asitrepresentsone manufacturers. ThetopM2Mmobileoperatorsare ate traffi c thattheycouldbillforindirectly, viacar- is, ofcourse,welcome,asconnectedcarsgener- This opportunityfortelcostoearnadditionalrevenue seen asaspringboardfortheUSmarket. integrate 4Gmodulesintoalltheirnewcarsisbeing recent GeneralMotorsannouncementaboutplansto looking forotherwaystogeneraterevenue.Here,the kick-start themarket,car-manufacturersarealso regulations, suchaseCallinEurope,thatwillreally three maintypesofplayer. Whileitissecurity-related The valuechainfortheconnectedcarispopulatedby ecosystem the steering Car-makers Annual connectivity revenue from connected cars connected from revenue connectivity Annual Key applications Network requirements services of Type vices (soon) · Augmented-realityser- music andvideo) · On-demandcontent(radio, High bandwidth Entertainment infotainment

> Contact:[email protected] will beverygradual. plans. Inanyevent,adoptionoverthenextfi ve years ing onavarietyofbusinessmodels,includingshared to subscribe,telcosandcar-makersarealreadywork- ingness topayfortheseservices.To encouragethem But thechiefuncertaintieslieinusers’abilityandwill- tems, andindirectconnectionsviasmartphones. in bothdirectconnectionsdeliveredbyon-boardsys- cars isexpectedtoreach8billionEUR,ifwefactor In 2018,connectivityrevenuegeneratedbyconnected connected vehicles. dominate themarket,accountingforclosetohalfofall cars by2018,atwhichpointintegratedsystemswill IDATE forecastsamarketof420millionconnected uncertainties lingering despite swift, be to expected Growth geographical location. on users’centresofinterest,correlatedwiththeir able ittoevenfurtherimproveitsadtargeting:data company isalsolookingtocollectdatathatwillen- Google ispushingforanewbuilt-intechnology. The a newtechnologyforinterfacingwithitsproducts, the sametack,however. WhereasAppleisproposing taken intoaccount.AppleandGooglearenottaking tablet orlaptopcomputer, whichnowneedstobe is anotherconnecteddevice,justlikeasmartphone, For Internetcompanies,thestrategyisclear:car tion plans(B2C)backinearly2014. (B2B2C sales)evenifAT&T didunveildirectsubscrip- features. Today, wholesaleisstillthedominantmodel mobile InternetconnectionandtheuseofWiFihotspot tially heavyconsumerofbandwidth,viatheon-board being viewedasanothermobiledevice,andapoten- an opportunityforsupplementaryincome,withcars providing mobileconnectivitytovehiclesrepresents · Search · Email · News Low bandwidth oieItre Telematics Internet Mobile · Traffi c information · Location-basedservices · Driverassistance Average bandwidth

Source: IDATE The connected car becoming a very attractive market for telcos for market attractive avery becoming car connected The Built-in solutions expected to dominate the market the dominate to expected solutions Built-in Connected car population, by implementation method implementation by population, car Connected features their and services car connected Different Source: IDATE, in“Connectedcars” Source: IDATE, in“Connected cars” Billion € 8 0 2 4 6 Million units 100 200 300 400 0 0321 0521 072018 2017 2016 2015 2013 2014 0321 0521 072018 2017 2016 2015 2013 2014 systems Embedded systems integration Smartphone systems Tethered 137 www.idate.org Connected cars 138 DigiWorld 2015 Vertical markets 7.2 or in-housepolicies. strategy, thedesiretoprotecttheircompetitiveedge, the in-houseexpertise,orbecauseoftheirbusiness too technicallycomplextodoso,i.e.theynothave these dataarenotsharingthem,eitherbecauseitis main closedfornow. Andsomeofthepartieswhoown are easytocapturethanksAPIs,othersourcesre- online, throughopendataschemesorsocialnetworks processing thenanalysis.Whiledatathatareavailable stages beforetheybecomeuseful:collection,prior ter. Fromatechnicalstandpoint, datarequireseveral potentially long-lastingapplicationsisnosimplemat- Still, navigatingthepathfromdatatoimplementing fabric ingeneral. of living,developingtourismandthelocaleconomic increased energyeffi ciency), improvingthestandard tection (airquality, sewageandwastemanagement, risk management(fl oods, fi res), environmentalpro- ter mobility, moreeffi cient governmentprocedures, day-to-day livesorthewaycityismanaged:bet- prove certainaspectsofurbanlife,whetherincitizens’ possibilities fortheirutilisation.Theycouldhelpim- This profusionofurbandatacreatesavastpalette of urban data opened up utilisation by Vast possibilities initiatives. es aswell,theyattachthemselvestosmartcity and onethatistendingtodevelopamongstbusiness- up accesstopublicdata.Thisisanongoingtrend, also benefi tted fromopendatainitiativesthatopened the pastseveralyears,anumberofsmartcitieshave es’ customerdataandsocialnetworkingsites.Over phones throughNFCtagsandQRcodestobusiness- ranging fromadministrative,sensors,users’smart- massive quantitiesofdatafrommultiplesources, nectivity insidecitiesnowmakeitpossibletogenerate Technological innovationsandthenearubiquityofcon- opendata? after next What cities Smart > Contact:[email protected] of initiative. equity thattheygainbybeinginvolvedinthistype to monetisetheirdata,orcapitaliseonthebrand mobility. Meanwhile,privatesectorplayerscouldseek well-being ofthecity’s residents, oroptimisingtheir anticipating risks(fl oods, fi re, theft),orimprovingthe and otherwise.Asmartcityprojectmaybeaimedat must servetheinterestsofallparties,bothfi nancial overall projectmanager. The chosenbusinessmodel and whomaintainstheapplications.Andis analyses them,whokeepsthedatabasesuptodate establish whowillstorethedata,processesand ness model.Governancemustmakeitpossibleto relate chiefl ytogovernance,anddefi ningaviablebusi- the planningstage.Theissuesbeingdiscussedtoday go beyondopendataschemes,anumberarestillin have beenrolledoutoverthepastseveralyearsthat their ownsetofinterests.Althoughseveralprojects cated bytheinvolvementofvariousplayers,eachwith The processofdevelopingsmartcitiesisalsocompli- to lasting initiatives road the on obstacles of anumber Still in differentcitiesforjustthispurpose. hackathons (i.e.appdesigncontests)havebeenheld the applicationthatisthendeveloped.Anumberof on residents’needsinaspecifi c area,whichinform trials. Otherprojectsbeginbycollectinginformation puts citizensatthecentreoflarge-scalesmartcity urban projects.Thecreationoflivinglabsinparticular are steadilybecomingkeytothedevelopmentofnew who hadbeenlittleinvolvedinmostearlierinitiatives, start-ups, industryplayers)andcitizens.Thelatter, sector players(sensorsuppliersandmanagers,local (local authorities,theState,administrations),private the involvementofthreeparties:publicsectorplayers range ofdatasourcescannotbeimplementedwithout Generally speaking,initiativesthatarebasedona board on be to needs Everyone The smart city built around fi around built city smart The The city: home to a host of data sources data of ahost to home city: The The main vertical markets involved in smart cities smart in involved markets vertical main The Main data sources for the smart city smart the for sources data Main Source: IDATE, in“SmartCity” Source: IDATE, in“SmartCity” Car pooling Bike sharing Smart economy Smartenvironment Public management Smartliving City traffic Smartgovernance Smart mobility transport Citizen information Civil registry procedures Administrative ve main verticals Internet/Web User devices Tags Sensors Public administration City departments/ Internal databases Enterprises/ Culture Health, Education, (floods, pollution) Risk management Urban planning Social cohesion Safety andsecurity Other opendatadatabases Social media(Tweets,Facebookstatus,photos) Movements Physiological data(e.g.heartrate) GPS Building accesstags Indoor locationtags Urban furnitureIDtags Tourist informationtags Road trafficcounters Water/gas leaks Parking spaces Smart meters Public transportschedules Civil registry(birth,marriage,etc.) Administrative procedures Land registry Shop/retail data Product data Infrastructure data(factoryproduction) Customer data Waste Electricity Gas Sewage Running water economic fabric Developing the Tourism Mobile payment Retail business 139 www.idate.org Smart cities 140 DigiWorld 2015 Vertical markets 7.3 gain usertrust. by theseonlineupstarts–whostill,however, needto of P2Pfundstransferservice,theymaybethreatened And althoughbanksarecurrentlytheleadingproviders user numbersthataremuchhigherthananybank. soon toEurope.Thesesocialnetworkingsitesboast notably FacebookintheUnitedStatesandcoming and, morerecently, throughsocial networkingsites, from thebanks,alternativesystemssuchasPayPal person paymentsystems,withproductsavailable Equally noteworthyisthedevelopmentofperson-to- with otherlocaloperatorsandcertainbanks. in certainpaymentsystems,workingpartnership to theirmobilephonebill.Operatorsarealsoinvolved giving customerstheabilitytochargesmallpurchases market, offeringseveraldifferentsystems,suchas Telcos alsoplayaroleinthisnon-bankshareofthe several Frenchbanks. being thePaylibsystemthatwasrecentlylaunchedby to captureashareofthemarket–primeexample this area,andeventhebanksthemselvesareworking ing acreditcard.Thereisnoshortageofinitiativesin most ofthesesystemsarestillbasedlargelyondebit- followed byGoogleWallet, KwixoandBuyster. But banks, accountfortherest.LeadingwayisPayPal, native paymentsystems,i.e.thatarenotmanagedby for non-cashtransactions(onlineandinshops)alter- If creditcardscontinuetobethemainmethodused e-payments for method acentral still cards Credit are expectedtooutnumberonlineones. transactions (involume).In2015,mobile Meanwhile, onlinepaymentsaccountfor8%ofallsale transactions worldwidethatyear(onlineandinshops). according toCapGemini,or5%ofallthenon-cash 18 billiontransactionsaroundtheglobein2013, 16% by2018.Intermsofvolume,itrepresented 10% ofrevenuein2014,andexpectedtoclimb increasing shareofe-commercesales,representing ment services.Mobileisalsoaccountingforasteadily end: person-to-personpaymentservices,in-storepay- mobile bankingproducts,particularlyonthepayment ers ofITservicesandinfrastructures,whichbenefi t Actors fromthefi nancial sectorsareheavyconsum- products newpayment wayfor the Mobile paving Financial and payment services Evolution of contactless payment systems NFC-enabled mobile devices units Million NFC mobilepayment users 0221 0421 2018 2015 2014 2013 2012 161572755551907.4 555.5 277.5 145.7 51.6 . 272. 39166.0 53.9 28.0 12.7 5.0 > Contact:[email protected] a success. use andsecured,thereisnoguaranteethatitwillbe on boardwithitssystembut,evenifitiseasierto has managedtoconvinceretailersandbankscome countries, nortopersuadeconsumersuseit.Apple to exportitsin-storemobilepaymentsystemother States forseveralyears.Googlehasnotyetmanaged Google Wallet thathasbeenavailableintheUnited nothing reallynew, asitistechnicallysimilartothe the lasttoenterfray. Apple’s paymentsolutionis ted withNFCcapabilities–Applehavingbeenoneof of speculationoverwhetherthedevicewouldbeoutfi t- The arrivaloftheiPhone6putanendtoseveralyears fail? to bound or innovation true Pay: Apple them topayfortheirordersinanyStarbucksoutlet. customers aQRcode-basedmobileappthatallows retail chains.AgoodexampleisStarbucksthatoffers NFC-based andnot,mostofwhichareoperatedby Other mobilepaymentsystemsexistaswell,both easier tousethancreditcards. to which,mobilepaymentsystemsarenotnecessarily be themainobstaclestotheirwidespreaduse.Added security andreliabilityofthesesystemscontinueto Users’ lackofknowledgeandconcernsoverthe notably ad-related,purposes. tion data,whichcanbeusedsubsequentlyforvarious, relationship withusersandownershipofthetransac- At stakearenotonlythesecommissions,butalsothe ness modelisbasedonacommissioneachsale. piece, nomatterhowsmall,ofthispiewhosebusi- retailers, technicalplatforms…)areallfi ghting fora The playersinvolvedinthesesystems(banks,telcos, credit cardintegratedintotheirmobilephone. in ashop,contactlessfashion,usingvirtual payment, whichallowsshopperstopayforsomething most widely-usedservicesiscontactlessNFCmobile into physicalshops,throughmobilewallets.Oneofthe These alternativesystemsarealsomakingtheirway payment? mobile for agoldmine shops: Brick-and-mortar

Source: IDATE Strong increase in NFC mobile payment transactions payment mobile NFC in increase Strong A host of alternatives to credit cards credit to alternatives of A host The different online and in-shop payment systems payment in-shop and online different The transactions payment mobile NFC of number the in Growth Source: IDATE in“Mobileandonlinepaiement” Source: IDATE Visa, MasterCard, Ex. Traditional Credit card Amex cards Remote onlinepayment 10 20 30 40 50 Billion € 0 wallet/checkout, Buyster, Kwixo ClickandBuy, 0221 0421 0621 2018 2017 2016 2015 20122014 2013 Ex. Paypal, payment system Amazon Online Google Fixed payment with operator Payforit, Boku, Bango, PayVia Ex. Internet+, payment system Online billing Premium SMS Carrier billing Orange Money, Ex. M-PESA, payment account Mobile Wanda bank with Starbucks, Ex. Flashiz, payment Non-NFC physical system Paypal Mobile payment Microsoft Wallet In-store payment application Ex. Vodafone SmartPass, payment prepaid NFC Google Wallet, payment virtual Ex. ISIS, card Cityzi, NFC MCX 141 www.idate.org Financial and payment services 142 DigiWorld 2015 Vertical markets 7.4 conditions includingdiabetesandsleepapnoea. They canaidinthepreventionofchronicillnessesor wide rangeofequipment(includingconsumerdevices). sors todayarequiteinexpensiveandinstalledona resources ofhealthcareestablishments.Medicalsen- – toavoidhavingmobilisethealreadyoverburdened services tiedtoinvalidsandthoseinneedofhomecare nectivity canalsoplayavitalroleinthedevelopmentof robotics. Whencombinedwithcertainsensors,con- and evenremotevisitsthankstoprogressmadein cess, telemedicineenablesanalysesanddiagnoses, growing andnear-ubiquityofhigh-speedInternetac- tal innovationssuchasMRI.Taking advantageofthe to leadingedgeequipment,blendingmedicalanddigi- creation ofnewhealth-relatedproducts,inaddition On theotherhand,digitaltechnologiesdoenable through, forexample,socialsecurity. ment ofinsurancesystems,bothprivateandpublic are notreallycustomers,perse,giventheinvolve- not widelyused.Moreover, healthcaresystemusers very expensiveandofferinglimitedbenefi ts iftheyare around themostbasicfunctions,inadditiontobeing medical fi les areevolvingveryslowly, andmanybuilt formation issomewhatlimited.Systemsforsharing intermediaries). Inthecaseofhealthcare,thistrans- processes (onlinesalesthatreducethenumberof tralised monitoringofcollecteddata)andtheirsales brought totheirinfrastructure(with,forexample,cen- digital revolution,fi rst inthetransformationithas A greatmanyindustriesarebenefittingfromthe chiefl found healthcare in revolution digital The monitoring. ageing population,throughremotemanagementand ing check-upsanddatatransfers–tocareforthe errors, tobettertreatchronicillnesses–byautomat- biggest issues,includingtheabilitytoreducemedical make itpossibletoaddresssomeoftheindustry’s efi ciaries ofthedigitaltransition.Digitaltechnologies The healthcaresectorcouldbeoneoftheprimeben- healing modelinneedof A business Connected health tions andprotocolswhenitcomesto datacollection. ity. Themedicalfield issubjecttoagreatmanyregula- fi nancing, andinvery demanding levelsofresponsibil- care industrysolutionsarefacinglieintherealmof diffi culties thatthedevelopmentofthesenewhealth- In additiontodataprivacyandethicalissues,themain challenges economic of aslew Still y in new products products new y in > Contact:[email protected] all workingtocapturedatafromplatforms. manufacturers suchasGoogle,AppleandSamsung– the Internetgiantsandleadingconsumerelectronics ing brandsareworkingtogainafoothold,alongside health-related sectorsthatwearabletechandsport- and theservicescarryhighpricetags.Itisinthese the revenueitgeneratesissubstantialasgear quite small,andthemarketstillneedstoproveitself, wearables market.Althoughthevolumeofsalesisstill are sizeableandgrowingmarkets,especiallythe users areoftenwillingtopayforthemselves.These also extendsintohealth-relatedandsportdevicesthat rigours attachedtomedicaldata,thehealthsector On theborderofmedicalfi eld, andfreefromthe handful ofchronicillnesses. the developmentofportablemedicalequipmentfora clude systemsformanaginghospitalstructures,and full controloverthechainofresponsibility. Thesein- medical ITcompaniesaswelltelcos,andenabling business (B2B)approach,implementedbyleading few majorsolutions,withmosttakingabusinessto More andmoreinitiativesarebuildinguparounda B2C? to B2B From real fi nancial payoffinexchange. manage, permanentmonitoring)withoutofferingany creating moreconstraintsfordoctors(instrumentsto tions arelikelytobenefi t insurancecompanies,while is alsorelativelyimbalanced:themostprofi table solu- solutions haveyettoprovetheireffi cacy. Thesystem avoid thepositionof‘blindpayer’whenanumber rollouts inruralareas.Insurancecompanieswantto as innewobjectsoutfi tted withsensorsandnetwork any playerwillingtomaketheinitialinvestmentssuch instances, thereisnoidentifi ed requestingbody, or ferring medicalimagingsystemstothecloud.Inother ing costsalmostimmediatelyby, forexample,trans- care establishmentsthemselves,withaviewtoreduc- Digital technologiesaredeployedprimarilyinhealth- tions isparticularlycomplicatedtoputintoplace. The businessmodelusedformosthealthcaresolu- lems, fromfearofpossiblenegativerepercussions. are stayingawayfromthemostcriticalmedicalprob- number ofplayers,includingcertainmobileoperators, wearable, andnotvalidatedbyadoctor, areuseless.A The datacollectedbyanoutsidedevice,typicallya More than half of all deaths due to chronic illness chronic to due deaths all of half than More The stakes surrounding connected health are colossal are health connected surrounding stakes The Potential adoption of mobile health services up to 2017 to up services health mobile of adoption Potential world the around death of causes Main Source: World HealthOrganisation Source: PwCanalysis 100 Million users 80 20 40 60 0 Chronic patient Million ofdeaths 10 20 30 40 50 60 0 condition At riskof chronic condition Lifestyle (60% ofalldeaths) 35 million condition At riskof lifestyle Independent which arepreventable (below theageof60), non communicablediseases Premature deathsfrom diseases (abovetheageof60) non communicable Other deathsfrom Injuries nutritional conditions maternal, perinataland Communicable diseases, ageing 10% adoption No action: 100% adoption Potential: 143 www.idate.org Connected health 144 DigiWorld 2015 Vertical markets 7.5 products, tobolsterupselling. data tothirdparties,suchassuppliersofbrand-name purposes, butalsointhepossibilityofresellingthese quantities ofdata,bothinanalysingthemforitsown industries intermsoftheuseitmakesmassive new opportunities:retailisoneofthemostadvanced tional brick-and-mortarchains.ICThavealsocreated online playershaveemergedasdirectrivalsfortradi- pers canchoosewhereandhowtheyshop,new now abletounderstandconsumerbehaviours,shop- dous impactonconsumptionpatterns:retailersare The arrivalofICTintheretailsectorhashadatremen- outlets’ margins. to increaseproductivityandultimatelyimproveretail chain, alongwithproducttraceability, whichserves a granularviewofstocklevelsthroughoutthesupply interactive serviceswithcustomers.Theyalsoprovide expanding outsidetheirusualchannels,andthrough ers withtoolsthathelpthemincreasetheirsalesby at leastsomeoftheissueshand.ICTprovideretail- and communicationtechnologies(ICT)canhelpsolve main challengesfacingretailerstoday. Information alty andoptimisingthelogisticschainaretwo Delivering bettercustomerservicetogenerateloy- solutions with retailers providing ICT Retail process. Retailerscannowpushcustomisedoffersto rience inshops,andacceleratethedecision-making create newservicesthatimprovetheconsumerexpe- connectivity (WiFiLTE, RFID)technologiesarehelping card. Butdevelopmentsinmobile(smartphone)and compare pricesbeforebuying,ormanagetheirloyalty obtain moreinformationordiscountsonproducts,to and reviews,possiblyonasocialnetworkingsite,to of shopsthatallowconsumerstosharetheirviews tail sectorhaveessentiallybeenapplicationsoutside In additiontosales,thetechnologiesusedbyre- retailers helping technologies Key > Contact:[email protected] the companywithitsvideoondemandservice. ing agoodcaseinpoint,anacquisitionthatendowed fi cation strategy:theWal-Mart takeoverofVUDUbe- result, veteranretailershaveadoptedadigitaldiversi- such asGooglethatboastapowerfulfootprint.As broad geographicalcoverage,andwithInternetgiants and Alibabawhichbenefi t fromacriticalmassand compete withmarketplacessuchasAmazon,Rakuten vices andapplicationsthankstoICTarealsohaving But retailersthatarethusdevelopinginnovativeser- to havingacquiredthebigdataspecialist,Dunnhumby. data, viaits16millionloyaltycardholders,inaddition has provenemblematicinitsuseofamultitude sions dedicatedtoinnovationandtechnology. Tesco giants, Wal-Mart andTesco, haveevencreateddivi- gies andarerollingoutaslewofinitiatives.Two retail Retail chainsarecontinuingtoinvestinnewtechnolo- retailers online vs. Veteran mise marketing,paymentandlogisticschannels. being deployedincreasinglyinshops,asawaytoopti- Lastly, servicesthatmakeuseofNFCandRFIDare this industry. 3D printingisthelatesttechnologytocreateastirin shop andvirtualchangingroomsforclothingretailers. rewarding shopperswithloyaltypointswheninthe experiments withgamifi cation oftheretailexperience, These includevirtualshoppingbuddies,assistance, tailers aredreamingupevermoreinnovativeservices. such asaugmentedreality, GPSandsensors.Andre- ence isagrowingtrend,enabledbynewtechnologies desire tomakein-storeshoppinganinteractiveexperi- their location,andhopetotriggeranimpulsebuy. This shoppers ontheirmobilephoneinrealtime,based Social media, video and mobile promising to boost margins by 54% 54% by margins boost to promising mobile and video media, Social Websites and applications are the top priorities top the are applications and Websites Planned retail sector investments investments sector retail Planned data big from companies retail for savings and gains Expected Source: CiscoIBSG2012 Source: TLT RetailGrowth StrategiesSurvey Total (average) SG&A Gross margin Revenue Marketing andadvertisinginitiatives Marketing customerservices Refurbishing existingstores Website andmobilesites International expansion Product development Productivity discounting Avoided effect Supply-chain effect Product mix Out-of-stock basket size Average traffic Customer Opening newstores Extending stores Staff facilities IT systems Logistics Promotion optimisation trend-sensing Event-and optimisation Pricing optimisation Assortment sensing Event-and-trend- based engagement Location-,sentiment- trend-sensing Event- and Social 1-3% 0-2% 2-4% 6% signage Context-aware optimisation Labor inputs management Inventory strategy Replenishment optimisation Placement management Inventory promotions semi-individual context-aware, optimisation, Placement 22.7% Video 31.8% 36.4% -%0-2% 0-2% -%5-7% 5-7% 4-6% 2-4% -%3-5% 0-2% -%3-5% 0-2% 17% sensing Event- and-trend promotions Location-based optimisation Promotion optimisation Pricing promotions targeted Individually Behavior analysis 50.0% 50.0% Mobile 2-4% 17% 5-7% 68.2% optimisation Assortment negotiations supplier Optimisation Informed Distribution &logistics optimisation Sourcing Distribution &logistics Inventory management 72.7% 72.7% 72.7% 72.7% Other 90.9% 0-2% 5-7% 14% Total (average) 1.4 3.3 3.7 3.8 4.1 4.7 4.7 4.8 5.3 5.6 6.6

Ranked importance of investment in 2014 54% 21% 5% 3% 9% 2% 8% 6% 145 www.idate.org Retail 146 7.6 DigiWorld 2015 Vertical markets down pricesacrossthemarket. terms ofvolumedoesseemsignifi cantenoughtodrive was thecasewithWeb 2.0.Further, itsimpactin between 2%and4%ofthemactuallycontribute–as employing themostadvancedservices,evenifonly tions, withcloseto10%15%ofInternetusers The phenomenonhasalreadyreachedmassivepropor- booking ataxiandundertakingoddjobs. hitherto bytheWeb, including,intherealmofsales, involves localservicesthathavebeenlittleaffected sharing resourcesisverylow. To somedegreeitalso es givethingsawayforfree,asthemarginalcostof to offerverycompetitivepricing,andinsomeinstanc- dustries. Thecollaborativeeconomycreatestheability tools –whichisnotwithoutimpactingtraditionalin- garage, basement,bicycle,variousskillsorspecialty sources –suchashome,car, savings,storagespace, The underlyingpremiseistoshareunderusedre- such aseBay. merce isrelativelywelldevelopedthankstocompanies creation ofphysicalgoodsandservices.C2Ccom- to sharingITresources(P2P),butalsoextendsthe ware ordigitalcontent(Wikipedia,OpenStreetMap), resources, fromtheproductionofopensourcesoft- the Internet.Itisalreadyarealityforrangeofdigital involvement inproducingservicesisnothingnewon cess, andsharetheirownresources.User/consumer duced byhavingInternetuserscontributetothepro- things further, upendingthe wayservicesarepro- The developmentofthecollaborativeeconomytakes nied useoftheservices. same, andparticularlythedigitaltoolsthataccompa- these serviceswereproduced,however, stayedthe comparison engines,onlinemarketplaces.Theway nels: theWeb, socialmedia,mobileapplications,price gence ofnewintermediationandinformationchan- production (back-offi ce ITsystem),andwiththeemer- of theinfrastructuresthatenabledthemtomonitor transformation upuntilnow, digitisingjustaportion tion andhousing,hadonlyundergoneapartialdigital A greatmanyserviceindustries,suchastransporta- of services production the transforming now also Digital industry service the of transformation digital The collaborative economy The by companiessuchasExpedia.Without adoubt,the tribution platform,muchliketheB2C approachtaken aggregators, providingaconsumer-to-consumer dis- lution areplayersthatpositioned asresource The championsofthiscollaborativeeconomyrevo- heavyweights new Internet Emergence of > Contact:[email protected] and paytheresultingtaxes. people rentingouttheirhomestoregister withthecity on servicessuchasAirbnbinlate2014,requiring city ofSanFranciscoimposedveryspecifi c measures services theyprovideareverylocal.Soitwasthatthe sion schemesthatInternetcompaniesemploy, asthe theory, cannotseeksuccourinthe(alleged)taxeva- taxes fromthecompaniesprovidingserviceswhich,in least, federalgovernmentswanttobeablecollect and lateronlyinBerlinHamburg.Atthevery against Uber, whichwasinitiallybannednationwide, tle hasbeenunderwayinGermanysincelate2014 not hesitatetoforbidcertainservices.Alegalbat- are workingtoprotecttraditionalbusinesses,anddo to regulateonlineactivitiesupuntilnow. Governments cluding inthosecountriesthathavebeendisinclined caused anoutcryindifferentpartsoftheworld,in- The developmentofthecollaborativeeconomyhas ownership. with peoplebecominglessattachedtotheideaof rates and,toalesserextent,bychangesinlifestyle, the abilitytodeliverpracticalservicesatcompetitive the growthmomentumisstillstrong,sustainedby heavy competitionfromcomparablesolutions.But themselves onthemoreprofessionalend,dueto TaskRabbit, aresufferingandworkingtoreposition are enjoyingthesamemomentum.Some,suchas Not allstakeholdersinthecollaborativeeconomy by regulation thwarted somewhat A development the tensofbillionsUSDatend2014. of AirbnbandUberallowedthemtoreachvaluationsin stake inUberortheAlibabaLyft. Thesuccess Avis inZipcar–orshareholdings,suchastheGoogle by FrenchrailwaycompanySNCFinBlaBlaCarand primarily viaacquisitions–suchastheinvestments sectors havealsoenteredthecollaborativeeconomy, Heavyweights fromdigitalindustriesandtraditional rather meagre. case aswhatcontributorsreceiveinexchangecanbe for crowdfunding–althoughthelatterisaspecial between individualsandKickstarter, amongothers, sented: TaskRabbit foroddjobs,Venmo forcashloans rentals. Othermajorareasofactivityarealsorepre- taxi-like service,andAirbnbwithitsshort-termhome two mostemblematiccompaniesareUberandits Uber and Airbnb top the list of the largest start-ups largest the of list the top Airbnb and Uber Adoption of collaborative services based on the same services principlesas e-commerce collaborative of Adoption Main reasons for using collaborative economy services, end of 2013 of end services, economy collaborative using for reasons Main start-ups Chinese and European American, predominant the of value Market Source: Source: Vision Critical Snapchat Pinterest Jingdong Cloudera Dropbox Zalando Palantir SpaceX Square Xiaomi Spotify Airbnb Uber Wall Street Journal Street Wall Product/service quality Access overownership Couldn't findelsewhere 1 ilo 4.8billion 115 million 9mlin4.9billion 49 million 150 million oa qiyfnigLatestvaluation Total equityfunding 347 million Sustainable lifestyle 9 ilo 6.0billion 495 million 2 ilo 4.0billion 521 million 0.8 billion . ilo 5.0billion 0.8 billion 507 million Recommendation 0.9 billion . ilo 4.1billion 1.2 billion 1.6 billion Connect locally Connect online Convenience . ilo 7.3billion 2.2 billion Better price Curiosity Other plcto o orms eetsaigtascin?" or site " ? peer-to-peer a using for transaction sharing reasons recent following most the of your each for were application important How "

9.3 billion 10.0 billion 10.0 billion 10.0 billion 10.0 billion 6% 13% 13% 13% 17% 18% USA 23% 24% 26% 26% 27% 27% 29% 30% Europe 36% 40% 40% 18.2 billion China 47% Asked Dec2013-Jan2014 aet Ya Roundsof Year Latest Nv 03 06 6 7 2006 Nov. 4 2013 2008 Mar. 8 2014 2002 Dec. 8 2012 Oct. 2008 7 2013 May 2008 4 2014 Oct. 2009 7 2014 2004 Nov. 3 2012 2004 Sept. 5 2013 2012 Nov. 4 2013 Jan. 2007 7 2014 2010 Aug. 5 2013 2008 April 2014 2009 June 2014 Neo-sharers Re-sharers 55% valuation date 60% one funding founded 73% 75% 147 www.idate.org The collaborative economy 148 DigiWorld 2015 DigiWorld chronicle chronicle DigiWorld 149 www.idate.org 150 January DigiWorld 2015 DigiWorld chronicle • The Washington CourtofAppealstrikesdown • • The EuropeanCommissionopensanenquiryintothe • The EuropeanCommissiongreenlightsthemerger • The Chinesegovernmentannouncesthetemporary • • The UK’s largestmobileoperator, EE(ex-Everything public offeringonhold. venture, whichmeansputtingtheirplanned initial to changetheownershipstructureof theirjoint (50-50 split),announcedthattheywerenotgoing partially infavourof to accesstheirnetwork.Thisruling,whichis blocking servicesorchargingcontentproviders Order, andparticularlythosethatforbidISPsfrom several oftheprovisionsinFCC’s OpenInternet 12.5 billionUSD. mobile phonemaker, Motorola largest acquisitionever, afteritstakeoverof 3.2 billionUSDincash.ThisisGoogle’s second (fi re alarms,connectedthermostats,etc.)for Nest Labs Google announcesthetakeoverofstart-up studios, andEurope’s mainpay-TVproviders. between severalmajorAmericanproduction provisions containedinthelicensingagreements pay-TV services.Thepurposeistoexaminecertain restrictions imposedonthesupplyofcross-border of around20billionEUR. Group, withastaffof130,000andannualrevenue the globe’s biggestadagency, PublicisOmnicom Omnicom agency, andthesecondlargest,Americanfi rm Publicis announced backinJuly2013betweenFrance’s third biggestbehindtheUnitedStatesandJapan. already represented14billionUSD,makingitthe without theconsoles,China’s videogamemarket country, whichhadbeeninplacesince2000.Even lift onthebanvideogameconsolesalesin 2.4 billionUSD. the transferofseveralfrequencylicences,for the acquisitionof700MHzbandspectrumand signs anagreementwith T-Mobile USA,DeutscheTelekom’s USsubsidiary, equal shareholders, Everywhere), quashesitsplansforanIPO.Itstwo under theTelecommunications Act. possibility ofclassifyingISPsasTitle IIproviders of uncertaintybyrevivingthedebateover , theworld’s thirdlargestadvertising . Thismergerisexpectedtogivebirth whichspecialisesinsmartobjects Verizon, opensupaperiod Orange Verizon Wirelessfor andDeutscheTelekom , inMay2012for

• • • • • • • • After havingtakenoveritsPCbusinessin2005, • The SouthKoreangovernmentannouncesthelaunch the Eurosport Discovery Communications Altice staff bycloseto30%. 314 layoffs.Inlessthanayear, Zyngahascut its Natural Motion, the acquisitionofCaliforniaanimationstudio specialises infreeonlinemobilegames,announces Zynga, aSanFrancisco-basedcompanythat most ofthe 12.5 billionUSDin2012,willneverthelesskeep which hadboughtthebusinessfromMotorola for 2.91billionUSDincashandshares.Google, the Motorola The world’s biggestPCmaker, Lenovo starting with Liberty Global’s stableofcablepropertiesinEurope, debt, thecablecompanyisexpectedtojoin Ziggo. Nowvaluedat10billionEUR,including Liberty Global 400 millionUSD. an artifi cial intelligencespecialist,forcloseto by takingcontrolofBritishstart-up, Google makesitslargesteveracquisitioninEurope their legalbattles. UMTS andLTE technologiesthatputsanendto announces anagreementwith over thenext10years patents, aswellallthosethatwillberegistered Google thatcoversallofthetwofi rms’ existing Samsung 2.3 billionUSD. China’s Lenovobuys scheduled tostartin2017. rollout schemein2020.Full-scaletrialshavebeen of amorethan1billionEUR5Gmobilenetwork 902 millionEUR. the endof2015.TheoperationvaluesEurosportat 51%. TF1keepsitsoptiontoselloff49%before market valuationat5.7billionEUR. price of28.25EUR,whichputsthecompany’s the Amsterdamexchange,withanopeningshare cable company, Numericable , themainshareholder(40%stake)inFrench signsa10-yearcross-licensingdealwith Motorola Mobility smartphonedivisionfrom UPC intheNetherlands. increasesitsbidforDutchfi rm, InternationalTVnetworkfrom20%to for527millionUSD,aswell IBM’s serveroperationsfor . Themanufactureralso increasesitsstakein , launchesitsIPOon portfolioofpatents. Ericsson DeepMind , acquires overGSM, Google , , The FCC and net neutrality net and FCC The The FCCbeganbylaunchinga On 14January2014,theFederal services, andsothrowingextra market classifi ed asTitle II favour ofhavingtheentireISP November 2014spokeoutin waded intothedebate,andin users. ButPresidentObama excluding relationswithend and serviceproviders,while the relationshipbetweenISPs common carriageservices)on Act (typicallyreservedfor Title IIoftheCommunications regulations containedunder solution, imposingthestrict spoke initiallyofapossiblehybrid option, theChairmanofFCC not wantingtodiscountany thousands ofresponses.While public consultationthatreceived the UnitedStates. heated netneutralitydebatesin This rulingkickedoffayearof fast lanesforcertaincompanies. Internet services,ornegotiating blocking orimpedingaccessto provisions forbiddingISPsfrom which hadfi led suitagainstFCC DC sidedpartiallywithVerizon, Appeals CourtinWashington The FCChasthusstrengthenedits Finally, inFebruary2015, powers, comparedtothesystem symmetrical regulation. time!) andtelcos’oppositionto Association (NCTA) atthe Cable &Telecommunications was headoftheNational (now ChairmanWheeler any commoncarriageregime with cablecos’oppositionto fact backtrackedwhenfaced the early2000s.Hehadin FCC ChairmanPowellbackin decision madeby(Republican) important departurefromthe services underTitle IImarksan Reclassifying Internetaccess or unbundlingobligations. regulations, i.e.pricecaps scheme tointroduceutility-like did notplanonleveragingthis underscoring thattheFCC Title IIclassifi cation forISPs, clear stanceinfavourof Chairman Wheelertooka Congressional majority. and Republicanswhichhavea opposition fromthetoptelcos weight behindtheoption,despite > Contact:[email protected] in court. will notonceagainbechallenged thinking thattheFCC’s decision is nothingthatpreventsusfrom incorporating NBC.Plus,there of anagreementsignedwhen obligations, undertheterms remains subjecttonetneutrality country’s leadingISP, Comcast, fi nish bymentioningthatthe management rules.We will need forreasonablenetwork will continuetorecognisethe been reintroduced.SotheFCC the caseifunbundlinghad markets –aswouldhavebeen America’s Internetorbroadband to createanygreatshakeupin regulation doesnotappearset this newstageinnetneutrality with ComcastandVerizon. But that Netfl ix signedin2014 agreements, suchastheones interconnection andpeering to takingacloserlookat and theFCChascommitted covered bynetneutralityrules, Plus themobileInternetisnow Court decisionofJanuary2014. in forcebeforetheAppeals 151 www.idate.org January February 152 DigiWorld 2015 DigiWorld chronicle • • • • At theMobileWorld CongressinBarcelona,Finnish • On 10February, Google • The EuropeanCommissionhasnegotiatedan • • customers aroundtheglobe. Viber Media,aSkyperivalthathas280million plans tospend900millionUSDacquire Japanese e-commercegiant,Rakuten subscribers intheUnitedStates. over closetoathirdofallInternetandpay-TV entity, withrevenueof86.8billionUSDandcontrol and TWCwouldresultinthecreationofamassive value of66.9billionUSD.ThemergerComcast By addingthedebttakeover, thedealgivesTWCa 45.2 billionUSDinshares(or23%ofitscapital). will seeComcasttakecontrolofTWCfor their planstomerge.Thefriendlytransaction Comcast bolster subsidiary, integrator Belgacom Vivendi announcesthatitisinexclusivetalkswith Android smartphone. is duetobefoldedinto hardware supplier behind second highestmarketcapitalisationintheworld, the fi rst time,andbecomingthecompanywith closing ofoiltitan of closeto394billionUSD,outearningtherecord on theNewYork StockExchangewithamarketcap obtained unprecedentedconcessionsfromGoogle. Commissioner, JoaquinAlmunia,believestheyhave market thatbeganthreeyearsago.DGCompetition its dominantpositioninthespecialisedsearch to theinvestigationintocompany’s abuseof agreement with Partners, forcloseto400millionEUR. to Japaneseprivateequityfi rm, JapanIndustrial Sony announcesthesaleofitsVAIO PCdivision on Akamai and cutitscosts,bydiminishingdependence Facebook (CDN), inthesameveinas Apple wantstobuilditsowncontentdelivernetwork Apple (472billionUSD). SFR’s lineofenterpriseproducts. andTime Warner Cable(TWC)announce , togaincontroloveritsservertraffi c forthecompleteacquisitionoflatter’s . Google, ExxonMobil Nokia –whosedevicebusiness Telindus, whichwillhelp Microsoft whichcouldputanend closesitsdayoftrading Netfl (388billionUSD)for ix,Googleand –unveilsitsfi rst , announces • • The Canadiangovernmentpocketsarecord • Social networkinggiant • The PresidentofTurkey announcesthatInternet • The mediationbetweentheheadof • operator • UK • Google confi the biggestspenders. (1.14 billionCAD)and Rogers Communication the new700MHzhigh-speedfrequencyband. out 97licencestoeightCanadiancompaniesfor process thatbeganon14January, Ottawahanded mobile phonefrequencies.Attheoutcometo 5.27 billionCADfromthelatestauctionsfor users amonth. of WhatsApp,whichboastsmorethan450million paid foranything–isduetothemassivepopularity size oftheamount–mostFacebookhasever smartphones, the acquisitionofinstantmessagingappfor or containsdiscriminatoryoffensivecontent. it decidesthatthesiteisanassaultonprivatelife, block anywebsitewithoutacourtorderorruling,if telecommunications authority, TIB,theabilityto most controversialarticlethatgivestheTurkish restriction lawswillstayineffect,includingthe to startinMarchtheUnitedStates. disputes, endsinastalemate.Anewtrialisdue to settletheirmutually-launchedpatentviolation and hiscounterpartfrom increase itsstaketo50%. of Greektelecommunicationsgroup, Deutsche Telekom exceeded expectations. auction thatbroughtin7.2billionEUR,whichwell operators bidfortheavailablespectrum,inan Indian subsidiary, foratotal2.3billionEUR.Seven 900 MHzand1800bandfrequenciesforits customers. that itwillnowpayComcastdirectly to reachits provider toreachComcastcables.The dealmeans Comcast Netfl Provo, Utah. in KansasCity, Missouri,Austin,Texas and in newlocations.Theserviceisalreadyavailable cities, byexpandingtalksoverGoogleFiberrollouts ixpensapaidpeeringagreementwith . Upuntilnow, Netfl ix hadusedabackbone rms itsdesiretoworkwithAmerican Vodafone announcestheacquisitionof WhatsApp, is readytobuyanadditional10% (3.29billionCAD), BCE (566millionCAD)were Facebook for21.8billionUSD.The Samsung announces , J.K.Shin, Apple, Tim Cook, OTE, andso Telus Facebook pays 21.8 billion USD for WhatsApp 21.8 WhatsApp pays billionFacebook USDfor The underlyingstrategicimpetus In February2014,Facebookmade Source: Statista Value of selected tech company acquisitions company tech selected of Value Similar moveshaveendedin away Facebook’s youngerusers. growing quicklyanddrawing quite smallatthetime,but by anybodyelse–evenifitwas and preventitbeingtakenover eliminate adirectcompetitor, aim ofthefi rst wasaboveallto and WhatsAppisthesame.The for theacquisitionsofInstagram Apple-Beats Electronics. Facebook-Oculus VR,andeven Motorola, Google-NestLabs, than Microsoft-Nokia,Google- business, forthatmatter:more YouTube, orfora hardware than Microsoft-SkypeorGoogle- a servicethusfar, evenmore Internet giantshavepaidfor the mostthatanyof Instagram in2012.Itisalso previous acquisitions,notably the socialnetworkinggiant’s is colossalcomparedtoanyof WhatsApp. Thesuminvolved taking overDutchcompany, its biggesteveracquisitionby Microsoft > Facebook > Facebook > Microsoft > Google > Google > Yahoo! > Microsoft > curr>Aqie Billion$ Acquirer >Acquiree Google > Google > 1.0 1.1 1.2 1.6 3.1 3.2 7.2 minimal, andthetwoservices danger ofcannibalisationseems overlap withWhatsApp.Butthe active users,someofwhom application whichhas500million Messenger, thecompany’s IM to eliminatearivalFacebook again, theacquisitioncomes year afterafi rst yearfree.Here model, chargingusers1EURa out foritsoriginalsubscription day. WhatsAppalsostands WhatsApp usersuseitevery social networkingsite:70%of even moreimpressivethanany and boastingstatisticsthatare like Skypeinonlyafewyears, overtake moreveteranplayers 2015 –havingmanagedto to 700millionbythestartof takeover, afi gure thatrose active usersatthetimeof Facebook –withover450million app beforeitwastakenoverby world’s biggestOTTmessaging WhatsApp wasalreadythe takeover ofSnapchatin2013. and laterGoogle’s attempted failure, includingFacebook’s 8.5 12.5 21.8 > Contact:[email protected] The amountpaidforthe will notreallyserveitspurpose. to Microsoft–theacquisition especially Skypethatwasresold as Flickr, eBaywithPayPal,and certain Web 2.0propertiessuch which Yahoo! failedtodowith some degreeofintegration– stay veryindependent.Without into Facebook,andtheirservices tend nottobeoverlyintegrated earnings, etc.–newacquisitions integration intoGoogle’s Live Messenger, YouTube’s merger ofSkypeandWindows which renamedLOVEFiLM,the giants, however–e.g.Amazon etc.). UnliketheotherInternet payment system,marketplace, can beimposed(adbrokering, lucrative intermediationtools ecosystems, insideofwhich spent ontheirrelativelyclosed for bothusernumbersandtime Internet giants.Theyarebattling the platformwarbetween strategies beingemployedin to beentirelyinlinewiththe the acquisitiondoesappear amount paidisquestionable, justify anysuchvaluation.Ifthe services suchasSkypecannot generated byOTTmessaging user), andthelowrevenue (close to50USDperactive from apurelyfi nancial standpoint acquisition remainsexorbitant interface. an unclutteredandad-free is moreakintoSkype,with of services,whereasWhatsApp Messenger, offeringamultitude similar inmanywaystoMSN model. FacebookMessengeris branding, featuresandbusiness strategies, notablyintermsof each withrelativelydifferent continue tocoexistseparately, 153 www.idate.org February 154

DigiWorld 2015 DigiWorld chronicle March • Launched inJuly2013theUnitedStates, • German cablecompany, PrimaCom, • New proofofmobilegiants’fi xed-mobile • The USgovernmentsaysitisreadytocedeits • After afailedattemptatreconciliationbetween on theirtelevision,usingthehome’s Wi-Finetwork. content selectedfromaPC,tabletorsmartphone available inFrance.Thisdongleallowsuserstoview Google’s ChromecastHDMIstreamingdeviceisnow continues itsconsolidation. cableco, acquisition inJune2013ofGermany’s numberone subsidiary through onthe2012mergerbetween 30%, uptoatotalofclose1.3million.Following PrimaCom willincreaseitscustomerbaseby 270,000 DeutscheTelekabel subscribers, Deutsche Telekabel the acquisitionofregionalcablecompany, 7.2 billionEUR. Spain’s largestcablecompany, ONO convergence policy:theUK’s Vodafone acquires Europe andemergingcountries. the InternetviaICANNisbeingquestionedby when thecountry’s longstandingsupervisionof The newsoftheUSwithdrawalcomesatatime and handitovertoasystemofglobalgovernance. central roleinassigningInternetdomainnames, Apple forpatentviolations. that theSouthKoreancompanywillhavetopay judge setsanoffi cial fi ne ofaround930millionUSD Apple and Kabel Deutschland Samsung Unitymedia . Byfoldinginthe inmid-February, aCalifornia and KabelBW, andVodafone’s , Germany’s cablemarket announces , for Liberty Global

• • • After • • of King DigitalEntertainment sewn upbytheendofJune2014. 400 millionUSDincash,andplanstohavethedeal pay closeto2billionUSD,chiefl y insharesand for videogames.Thesocialnetworkinggiantwill fi rm Facebook provider, Wipro. is themainshareholder)andIndianITservice Canopy (ofwhichtheFrenchcompany, Atos, Telstra andCanada’s Allstream partners citedfortheprojectareAustraliantelco network ofinterconnectedclouds.Amongthe over twoyearsinitsInterCloudproject:agiant announcing planstoinvestmorethan1billionUSD American telecomequipmentmanufactureris sales downby3.1%inthefi rst halfof2014,the the cloudcomputingmarketwithasplash.With non-calendar fi scal year(April-June). on fi nalising thedealinthirdquarterofits certain performancetargetsaremet.Disneyplans second oneofupto450millionUSD–provided with afi rst instalmentof500millionUSDanda deal couldbeworthasmuch950millionUSD, channels, reporting5.5billionviewsamonth.The one ofthelargestsupplierscontentfor Disney announcestheacquisitionof cellular operator. subscribers, makingitJapan’s fourthlargest entity willhavemorethan10millionmobile Willcom process ofmergingwithathirdentityownedby over sistercompany, eAccess, SoftBank disappointing IPOontheNewYork exchange. 97 millionusersaroundtheworld,launchesa Candy Crush Candy Oculus VR IBM and conglomerate.TheneweAccess/Willcom subsidiary announcestheacquisitionAmerican , whichdesignvirtualrealityheadsets SAP, itis , thegamethathashooked , Yahoo! Japan,plansontaking Cisco’s turntoenter , theUK-basedpublisher whichisitselfinthe , cloudspecialist Maker Studios YouTube , Vodafone acquires ONO acquires Vodafone After havingtakenoverGermany’s drop inprofi ts. forecast for2014,anda60% between 2010andwhatwas a 38%lossinrevenueSpain Spain alone.Vodafone reported whole, andbycloseto30%in across theEuropeanUnionasa mobile servicesshrankby12% retail revenuegeneratedby Between 2008and2013,the with mobilemarketdefl ation. stay inthegame,whenfaced that isthepriceithastopay But theBritishcompanybelieves Spain (around4billionEUR). current mobileoperationsin value attributedtoVodafone’s represents closetodoublethe and 12timesONO’s EBITDA) (which putitatbetween10 estimated byfi nancial markets on thelowerendofspectrum merger. Thisvaluation,whichis the synergiesgeneratedby to Vodafone, whenfactoringin reduced to7.5times,according EBITDA in2013,amultiple is morethan10timesONO’s for 7.2billionEUR.Theamount leading cablecompany, ONO, in March2014ofSpain’s for Europewiththeacquisition mobile convergenceambitions Vodafone confi rmed itsfi xed- Deutschland, in2013,theUK’s largest cablecompany, Kabel Source: IDATE Vodafone's footprint in Europe in fixedtelecomservicesGermanythroughits localsubsidiaryArcor Germany: purchaseofKabelDeutschlandinJune 2013.Vodafonewashistoricallyactive Spain: purchaseofONOinMarch2014 UK: purchaseofCable&WirelessWorldwidein April 2012 Notes: mobile mobile+fixed Portugal Ireland UK If theBritishgrouphadalready Spain will bethelargestproviderof the dealiscomplete,Vodafone the country’s population.Once households inSpain,or57%of superfast accessto10million with atargetofdelivering covered bytheONOnetwork, concentrated inthoseareasnot New expenditureswillbe its joint-venturewithOrange. FTTH rolloutsscheduledfor around 250millionEURonthe merger willenableittosave Vodafone estimatesthatthe it entirelytoDocsis3.0. since 1998,havingupgraded 7 billionEURinitsnetwork ONO hadinvestedaround coverage foralimitedoutlay. networks, andincreasesits backhaul capacityforits4G direct accesstosubstantial these dealsgivetheoperator Second, andequallyimportant, increased customerloyalty. prospect ofhigherARPUand play bundles,withtheresulting opens thewaytoquadruple broadband retailmarketplayers mind. First,mergingwithfi xed deals –withadualobjectivein up anotchwiththeselatest Orange), ithastakenthings Spain (FTTHjointventureswith (via itsArcorsubsidiary)and fi xed market,inbothGermany been ontheoffensivein Netherlands Germany Italy Malta Albania Hungary Czech Republic > Contact:[email protected] From abroaderperspective,this in andtakecareofitthemselves. players fromoutsideEuropestep consolidation liesinseeing off theinevitableEuropean operators. Thedangerinputting creation oftrulypan-European strategies resultinginthe market supportforoffensive prerequisite toobtainfi nancial national mergersseemtobea synergies arelessevident,and deals uptonow. Potential more elusiveforinternational for thefi rst, theyhavebeen loans appeareasytosecure not cross-borderones.Ifbank market consolidationdeals,and of theseoperationsarenational and JazztelinSpain…Butall deal plannedbetweenOrange takeover ofSFRinFrance,the the Netherlands,Numericable’s Liberty GlobalintheUKand in theUK,acquisitionsby Ireland, Germanyandannounced mobile operatorsinAustria, momentum: mergersbetween that appearstobegaining telecom marketsacrossEurope mergers andacquisitionsin takeover ispartofawave in themobilemarket. and fi rm upitsnumbertwospot fi xed superfastaccessinSpain, Greece Romania Turkey 155 www.idate.org March 156 DigiWorld 2015 DigiWorld chronicle April • In accordancewith theagreementsigned • The EuropeanCourt ofJustice(ECJ)overturns from bid the in increase latest the • Despite • • The EuropeanParliamentadoptsproposed • Two FrenchITservicecompanies,Sopra and for 1.42billionUSD. of 100%OrangeDominicanato in November2013, Union’s Charteroffundamentalrights. on thisdirective’s compatibilitywiththeEuropean Austria hadpetitionedtheEuropeanCourttorule 24 months.NationalauthoritiesinIrelandand the parties’locationsforanywherefromsixto providers tokeepinformationontraffi c and in March2006,thatrequiredtelecomservice the directiveonkeepingpersonaldata,adopted of Atos. (15 billionEURincash), Video andpartnervendors’libraries. stream programmesfromAmazonPrimeInstant available onlyintheUnitedStates,allowsusersto device, whichsellsfor99USDandidcurrently market withthelaunchofAmazonFireTV. This Amazon joins Parliament andthedifferentEuropeangovernments. place betweenthenewCommission,future into effect,however, adebatewillneedtotake spectrum policies.Beforetheregulationcancome rules, andharmonisingcoordinatingnational charges insidetheEU,strengtheningnetneutrality 15 December2015aretheeradicationofroaming Among thecoremeasurestobeintroducedon regulation onasinglemarketfortelecoms. France, behind would bethethirdlargestcompanyofitskindin 35,000 employeesin24countries,thenewentity forecast toreach3.1billionEUR,andmorethan a publicexchangeoffer. Withrevenuethatis Steria, confi rm theirplanstomergethrough keeping a20%stakeintheoperator. 2 billionEURduringonefi scal year. Vivendi isalso combined entity’s EBITDA-Capexisatleastequalto for anadditional750millionEURpay-outifthe will earn13.5billionEURincashandbeeligible company ofFrenchcableco and 7millionwirelinecustomers)–to – France’s secondlargesttelco(21millionmobile Apple and IBM and Orange Google inthesmartTV Cap Gemini Vivendi choosestosell fi nalises thesale Numericable Altice, , andahead Altice . Vivendi Bouygues , parent SFR

• Brazilian senatorsadoptapronetneutralitybill. site, • Microblogging • • After havingreluctantly signedafi rst agreement • China’s biggeste-commercecompany, Alibaba • Xavier Niel,theheadof • After severalmonthsofprocedurestosecurethe • • In responsetoapetitionfromthetopnetworks, or application” or content, origin or destination, the service, device device service, the destination, or origin content, must relayonlinetraffi c Article 9ofthebillstipulatesthatoperators 4 billionUSD. day oftradingwithamarketcapmorethan shaky stateoftechstocks,closingthefi rst Twitter, launchedasuccessfulIPO,despitethe division for3.5billionUSDincash. takeover of specialised inbarcodesolutions,announcesthe Zebra Technologies paid peeringagreementwith with Comcast IPO ontheNewYork exchange. comes notlongbeforeAlibaba’s muchanticipated one Chinesevideosite, 1.22 billionUSDtoacquiresharesinthenumber tandem withaprivateequityfi rm, willbespending Principality ofMonacoownstheremaining45%. Communications Monaco Telecom, byacquiring 321.8 millionEURofhisownmoneytobuy fi gure announcedbackinSeptember2013. to beworthjustover5.44billionEUR,theoriginal giants, takeover willenableittorivalthesector’s reigning its patentsto fi nalises thesaleofitsmobilephonebusinessand approval ofthedifferentanti-trustauthorities, the premiumcablechannel’s hugelypopularseries. customers tohaveunlimitedstreamingaccess (owned by Amazon signsanexclusiveagreementwith streaming servicelaunched2012beshutdown. on AmericanTVnetworks’requestthatthe the USSupremeCourtisbeingcalledontorule Apple and Time Warner), toallowAmazonPrime Motorola inFebruary2014, . Microsoft ’ 55%stakeinthecompany. The Samsung , anAmericancompany Weibo, oftencalledtheChinese Solutionsenterpriseservices Youku Tudou. Thisdeal . Microsofthopesthatthis Iliad, spends “equally, regardless of its its of regardless “equally, . Thedealisexpected Verizon. Cable &Wireless Netfl ixpensanew HBO Aereo , in Nokia Europe’s upcoming review of the Telecoms Package Package Telecoms the of review upcoming Europe’s The fi rst twoprovisionsmet More thansixmonthsafter (Regulation Package” “Telecoms - 2013/0309) - to achieve a Connected Continent Continent Connected a achieve to electronic communications and and communications electronic for a European single market for for market single European a for immediately withoppositionfrom licences andasecondarymarket. incorporating 25-yearfrequency across theEuropeanUnion, spectrum management the introductionofharmonised The thirdprovisionconcerned starting on15December2015. when travellinginsidetheEU, charged forvoiceanddatacalls that Europeancustomersare international roamingfees aimed toeliminatetheadditional services. Thesecondprovision being extendedtospecialised little allowanceforexceptions Commission, andprovidingvery than theoneproposedby neutrality, morestringent a verystrictdefi nition ofnet The fi rst commitsEuropeto three regulatoryprovisions. adopted atextcentredaround 2014 theEuropeanParliament communications, on3April to asinglemarketforelectronic for acceleratingthetransition Neelie Kroesunveiledherplans Bringing thislegislativeeffort to asymmetricalregulation,i.e. up orscalebacktheplacegiven sparring overwhethertoramp doubt seethevariousfactions in 2015.We willthereforeno review oftheTelecoms Package the fi rst consultationsonits The Commissionalsobegan work beingdoneinBrussels. to completionisnottheonly the endofJune2015. project safelyintoport,before to steertheConnectedContinent up tothenewLatvianpresident governments. Itwillthereforebe reached aconsensusbetween presidency endedwithouthaving a fairuseclause),theItalian of roamingcharges(including provisions governingtheend more fl exible andintroducing making netneutralitymeasures spectrum management, proposals forharmonised Despite havingabandoned in thefi nal quarterof2014. under thenewItalianpresident, Council wereduetoresume between theParliamentand text wasvotedin,negotiations were replacedsoonafterthe the ParliamentandCommission the partofgovernments.Butas third metwithreservationson telcos while,unsurprisingly, the > Contact:[email protected] Outside ofelectronic On adifferentnote,itwillneedto sector. acquisition dealsinthetelecom the manypendingmergerand position, andinvestigating Google’s abuseofitsdominant years-long antitrustinquiryinto includes bringingtoacloseits the Commission’s agendaalso (TTIP) negotiations.Finally, and InvestmentPartnership arise fromTransatlantic Trade discussion thatwillnodoubt the like–andtopicsof Apple, Facebook,Amazonand practices engagedinbyGoogle, evasion –whichbringstomind sights ontheOECD’s workontax The Commissionalsohasits copyright regimesinEurope. and duetobeginonharmonising the 1995dataprivacydirective, work isbeingdoneonreviewing communications, majorlegal funds willbeallocated. rollout objectives,andhowthe Agenda superfastbroadband will gotowardsachievingDigital 315 billionEURJunckerplan be determinedhowmuchofthe dominant marketplayers. which imposes“remedies”on 157 www.idate.org April 158 DigiWorld 2015 DigiWorld chronicle May • • • • Britain’s • • Offi cial launchofChina’s largestMVNO,T.Mobile, • • • A Californiacourtorders 324 billionJPY(2.3EUR). conglomerate, inwhatwastobeadeal worth a mobileservicescompanybelongingtothesame SoftBank Yahoo! Japan,asubsidiaryoflocaltelecomgiant, patent warbetweenthetwosmartphonegiants. lawsuits. Thisdrawsaclosetolong-running at puttinganendtotheseriesofpatentviolation Apple and 1.67 millioncustomers. France’s largestMVNO, entered intoexclusivenegotiationstoacquire delicate processoftakingcontrol Numericable more than23millionsubscribers. estimated 10billionEUR,wouldguaranteeBskyB Sky DeutschlandandItalia.Thedeal,worthan with a39%stake),viewtoacquiring with 21stCenturyFox for thenewcorporation. agree onabusinessmodelandorganisationchart their project.Thetwocompanieswereunableto world’s largestadvertisingagency, offi cially abandon “between equals”wasduetogivebirththe Publicis incumbent mobileoperators. issued inChina,tocompetewiththecountry’s three Digital Group a subsidiaryofChinesecompany, Telephone World Republic andTogo –for650millionUSD. – Benin,Ivorycoast,Gabon,Niger, CentralAfrican subsidiaries insixfrancophonecountriesAfrica in MarocTélécom Etisalat a lawbackin2000,banningvideogameconsoles. closed sincetheChinesegovernment’s adoptionof American fi rm’s entryintoamarketthathasbeen Media, startinginSeptember2014.Thismarksthe with BesTVNewMedia Xbox OneconsoleinChinathroughapartnership Microsoft company hadaskedfor. damages, wellbelowthe2billionUSDCupertino patent violations,topay , fi nalises thesaletoVivendi ofitsstake andOmnicom, , renouncesitsplanstotakeover BSkyB announcesthatitisintalks announcesthatitwillbemarketingits Google , whichisalreadyengagedinthe . Atotal19MVNOlicenceshavebeen signafriendlyagreementaimed , transferringownershipofits (itsbiggestshareholder whose35billionUSDmerger , asubsidiaryof Apple 119.6millionUSDin Virgin Mobile,andits Samsung , accusedof SFR, has Shanghai eAccess , • After havingcompletedtheinvestigationthat • • • IT serviceprovider • • • subsidiary Commission approves began inNovember2013,theEuropean announce planstomergethroughashareswap. country’s secondlargestonlineportal,Daum.net, messaging service,and Kakao, ownerofTalk; SouthKorea’s leading cloud computingcompany. in adrivetocreateEurope’s newnumberone 620 millionEURbidforFrenchITgroup, of satelliteoperator AT&T announcesthetakeover, for48.5billionUSD, Belgium, Switzerland,LuxembourgandAustria. also announceditsupcominglaunchinGermany, part ofitsexpansionintoEurope,thecompanyhas in theUK,NetherlandsandScandinavia.As of whichareintheUS,Netfl ix hasalsosetupshop 48 millionsubscribers,morethanthreequarters 10 EURamonth.Alreadyboastingmorethan in Francebeforetheendofyear, forlessthan Netfl Latin America. to anewpay-TVgiantintheUnitedStatesand the nodfromanti-trustauthorities,wouldgivebirth boards, thetransaction,whichstillneedstoget received unanimousapprovalfrombothcompanies’ by anti-trustauthorities,however. largest mobileoperatorsstillneedstobeapproved This mergerbetweenthecountry’s thirdandfourth US –totakecontrolofits owns Sprint Japanese mobileoperator Deutsche Telekom music service,BeatsMusic. for Appleisthecompany’s subscription-based Beats Electronics with thetakeoverofstereoheadphonemaker, Apple announcesitsbiggestacquisitionever network capacity. submitting toanobligationcede30%ofits virtual operators(MVNOs)toenterthemarket, newly formedentityhasagreedtoallowtwomobile subsidiary, O2Ireland,for850millionEUR.The ixannouncesthatitsservicewillbeavailable Hutchison3G’s , thenumberthreeoperatorin , for3billionUSD.Themainprize hasacceptedtheofferfrom Atos announcesa DirecTV HutchisonWhampoa Daum, operatorofthe takeoverof T-Mobile USAsubsidiary. SoftBank . Havingalready –whichalready Telefónica Bull, Sky begins its pay-TV consolidation campaign consolidation pay-TV its begins Sky • in Italy, SkyItalia hadto • in theUK,BSkyBishaving This offensivemayseem British pay-TVproviderBskyB Source: IDATE Sky subscriber growth in the UK, Germany and Italy and Germany UK, the in growth subscriber Sky control oftheGermansubsidiary. launching atakeoverbidforfull in SkyDeutschland,before Sky Italia,andits57%stake full ownershipstakeof acquisition ofthelatter’s 21st CenturyFoxforthe is intalkswithshareholder agree toshareitsrightswith by theDiscoverygroup; considerably sincebeingbought muscle hasbeefedup Eurosport whosefi nancial also againstBeINSportand to competewithBT, but between pay-TVproviders: when competitionisheatingup rights inparticular, atatime sporting rights,andfootball focus inthisrespectcouldbe investment. Themainareaof scale, toearnareturnonits for aboveallareeconomiesof the Britishcompanyislooking than itsownin2013.What that reportedlowergrowth taking overtwobusinesses paradoxical: BskyBwouldbe 100 150 Million subscribers 50 0 0820 0021 022013 2012 2011 2010 2009 2008 Securing therightstoAmerican It islessthenationalrightsto • in Germany, SkyDeutschland that wouldbehardtochange. was anorminthemarketplace selling rightscountryby stressed thatthepracticeof competition authoritiesinfact green-lighting thedeal,Europe’s pan-European rights:when it willnotbeeasytoobtain for economiesofscale.But is anotherpossibletarget feature fi lms andTVseries investments. on earningareturnthese is onewaytogetaheadstart in severalofthetargetmarkets are atstake.Havingchannels to nationalchampionshipsthat the veryleastEuropean–rights ability tosecureglobal–orat and biddingsystems,thanthe subject todifferentschedules each ofthematches,whichare Deutsche Telekom. of themtooperator but retrocededaportion owns therightstoBundesliga, upped itsbid,albeitinvain; Mediaset, whileEurosportalso > Contact:[email protected] Also worthmentioningisthatif Ultimately, then,theunderlying 0% 2% 4% 6% 8% partnerships. but onlythroughcommercial it alreadysellsinGermany, triple playbundles–which its customerbasetorollout it wouldbeabletoleverage more controloverdistribution, an ISPinthosemarketstogain to ItalyorGermany, i.e.become BskyB seekstoexportitsmodel investment. customers tohelpamortiseits from ahugepoolofpotential new SkyEuropewillbenefi t 19 millionsubscribers,the crucial competitiveedge.With in one’s owncontentlendsa than everbeforeinvesting American programmes,more to paytoppriceforthebest with enoughcashonhand their domesticmarket,and made powerfulbythesizeof Netfl ix, AppleandAmazon, the adventofrivalssuchas of originalcontent.Facedwith lies nodoubtintheproduction rationale forthesetakeovers Sky Deutschland Sky UK Sky Italia Total growthrate 159 www.idate.org May 160 DigiWorld 2015 DigiWorld chronicle June • • The EuropeanCommission andSouthKoreahave • The FCCannounces thelaunchofaninquiryinto • The CourtofJusticetheEuropeanUnionconfi rms • • Japan’s • • • • for whichthepatentswereputupascollateral. secured loanof2billionEURtakenoutinlate2012, of patents,aftercompletereimbursementasenior Alcatel-Lucent willregainfullownershipofitsportfolio iBooks Store. with publishersandpricefi xing e-bookssoldonthe class actionsuit,accusingthecompany ofcolluding consumers andseveralUSstatesthat hadfi led a Apple hasreachedanamicableagreement with by theendof2015. common defi nition for 5Ganditsapplications, This collaborationisduetoculminatewitha developing future5Gtechnologyandstandards. signed anagreementinSeoultoworktogetheron as Verizon andComcast Netfl agreements betweencontentproviders,suchas dominant positionintheprocessormarket. the CommissionhadaccusedIntelofabusingits violating competitionregulations.InMay2009, Commission imposedon the 1.06billionEURfi ne thattheEuropean Google MapsandEarth. 500 millionUSD.Skyboxtechnologywillbeusedfor construction company, SkyboxImaging Google confi rms theacquisitionofmicrosatellite interacting withhumans. a consumerrobotwithemotions,andcapableof that SoftBankboughtin2012,introducePepper, businesses. Bros. inparticular)andtelevision( publications, tofocusinsteadonitscinema( Time Warner fi nalises thesaleofitsprint networking site’s internet.orgproject. is intendedtobolsterthecohesionofsocial markets anon-demandmobileInternetsolution, Facebook Mediaset’s Spanishsubsidiary. in acquiringtheremaining22%whichareownedby the 56%ownedbyPrisa,andconfi rms itsinterest Canal+, isreportingthatitpaid750millionEURfor Prisa. Telefónica, whichalreadyowns22%of Digital+), asubsidiaryofmediaconglomerate, de Television Digital Telefónica completesitstakeoverof ix,andInternetserviceproviders(ISPs)such SoftBank ’s takeoverofFinnishstart-upPryte,which andFrance’s Aldebaran (known asCanal+,andformerly . Intel fi ve yearsago,for HBO, CNN Distribuidora , for , astart-up ...) Warner • • telco • Mexican • The USSupremeCourtrulesinfavourofthe • Senators inFrancepassthelawondistantbook • • • Twelve Germanpublishersandroyalties collection • telco • US for 5.64billionUSD(7.3includingdebt). carrier, twtelecom,aformerTime Warner subsidiary, YouTube, Google+andBlogger. – tofocusonitsfarmorepopularservices, suchas Orkut socialnetwork–probablyinSeptember 2014 Google announcesthatitwillbeshuttingdown its 325 millionEUR. values Virgin Mobile, France’s largestMVNO,at France. AnnouncedinMay2014,this operation holding companyfor of OmeaTelecom (formerlyOmerTelecom), a for subsidiary Altice announcesthesignatureofafi nal agreement to aclosemorethan20-yearalliance. value of71.22billionUSD,andwhichputsanend 6 billionUSD,basedonAmericaMóvil’s market of itsequityownedby violating copyrightby“stealingtheirsignal”. 21st CenturyFox top AmericanTVnetworks( prices 5%higherthanclassicbookshops. shipping, andwhichwillrequirethemtomaketheir law thatforbidsonlinebooksellersfromofferingfree sales, commonlyreferredtoasthe“anti- the plannedmerger. help securetheEuropeanCommission’s approvalof Telefónica Deutschlandhopesthisconcessionwill belonging tothesoonbemergedO2 Drillisch Telefónica O2concludesanagreementwithMVNO ancillary copyrightlaw. of newspaperarticles,isviolatingGermany’s Google, whichhasrefusedtopaydisplaysnippets cartel offi ce toextendcopyrightlaws,arguingthat society, VGMedia after oneyear. in thenewcompany, withtheoptionofsellingit close to13.5billionEURandwillkeepa20%stake between have pennedthefi nal agreementforthemerger Vivendi, Altice its takeoverofSunMicrosystemsin2010. acquisition fortheAmericansoftwarecompanysince and restaurantsoftware.Thismarksthelargest MICROS Systems,acompanythatspecialisesinhotel Oracle confi rms thetakeover, for5.3billionUSD,of , guaranteeingitaccesstothenetwork Level 3announcesthetakeoverfellow SFR andNumericable.Vivendi willreceive andNumericable Numericable’s fullacquisition America Móvil ) thathadaccused , havelobbiedGermany’s anti- Virgin Mobile’s operationsin AT&T inadealworth CBS, NBC acquires the8.27% announcethatthey Aereo of , ABCand /E-Plus Amazon . ” Can satellites, drones and balloons eradicate the global digital divide? digital global the eradicate balloons and drones satellites, Can In December2014,Googletook After havingbetonsatellite 2014 wasalsotheyearthat In June2014,Googleconfi rmed space agency, CNES,toshare a partnershipwithFrench another stepforwardbycreating delivery system. company’s airborneInternet drones areduetocompletethe for increasedautonomy, these solar panelsontheirwings drones. Outfi tted withlarge a manufacturerofhigh-altitude Titan AerospaceinApril2014, development, Googleacquired To acceleratetheproject’s rural andunder-developedareas. to deliverInternetaccess powered high-altitudeballoons to launchanetworkofsolar- May 2013.Theprojectaims the announcementofLoonin through onitsstrategywith operational, Googlefollowed fi rst 12satellitesarenow O3B Networks,whose a stakeinsatelliteoperator technology earlyonbyacquiring that arecurrentlydeprived. 4 billionpeopleontheplanet Internet accesstothemorethan and balloons,asawaytobring technologies suchasdrones an interestinunconventional Google andFacebookrevealed Maps andGoogleEarth. frequent updatestoGoogle benefi ts ofwhichincludemore its ownfl eet ofsatellites,the will endowthecompanywith microsatellites. Thisacquisition that specialisesinbuilding Skybox Imaging,acompany industry withthetakeoverof its interestinthespace But thesetwoOTTgiantsare The ConnectivityLab’s ambition With thesamegoalofbringing Created byGregWyler, who within theOneWeb consortium. the dealontheircollaboration Qualcomm andVirgin sealed rival projects.InJanuary2015, also comingupagainsttwonew solar-powered drones. British fi rm, Ascenta, amakerof Facebook alsoacquiredthe regions. Aroundthatsametime, for moresparselypopulated and low-earthorbitsatellites to servecertainurbanareas, for severalmonthsatatime, 20,000 metresabovetheearth that arecapableofstaying region: solar-powereddrones on thedensityoftarget access systems,depending is toinstallseveralInternet can beaccessedforfree. operators todeliveraportalthat network useslocaltelecom 2G networkcoverage.Thesocial populations thatatleasthave foundation isaimedchiefl y at of technologicalleaders,the based onaglobalpartnership Created byMarkZuckerbergand without accesstotheInternet. the planetwhoarecurrently two-thirds ofthepeopleon initiative thatseekstoconnect Lab, aspartofitsInternet.org Facebook launchedConnectivity population, inMarch2014 the Internettoworld’s operational before2020. balloons arenotexpectedtobe are currentlyunderway, butthe making realstrides,andtrials balloons. TheLoonprojectis their expertiseinstratospheric > Contact:[email protected] It willbeinterestingtotrackthe Meanwhile, entrepreneur South America. markets, startingwithAfricaand are high:openingupnew The stakesforOTTcompanies global Internetaccessnetwork. will enablethedeploymentofa coming months,toseewhich projects’ progressoverthe 10 billionUSD. puts thecompany’s worthat for 10%ofSpaceX,which Fidelity, paid1billionUSD Google andprivateequityfund, partners: inJanuary2015, backing fromsomeheavyweight years todevelop.Itenjoys and requiremorethanfi ve expensive (upto10billionUSD) fl eet of4,000satellites),more constellation wouldbelarger(a supply Internetaccess.This of microsatellites,alsoto plans tolaunchaconstellation company, SpaceX,alsohas exploration andspacecraft Elon Musk,headofspace four years’time. solution willbeoperationalwithin but thepartnershopetheir plans’ commercialavailability, been revealedfortheaccess is notyetfi nal. Notimetablehas LauncherOne, althoughthedeal orbit at1,200kmbyVirgin’s are duetobelaunchedinto traditional installations.They 100 kgeachandcheaperthan light satellites,weighingaround a constellationof648ultra- connect theplanetbylaunching joint-venture isalsoseekingto Google’s satelliteprojects,the had previouslyheadedup 161 www.idate.org June 162 DigiWorld 2015 DigiWorld chronicle July • The EuropeanCommissionfi nally givesthegreen • • • • • Italian TVconglomerate • French paymentterminalsupplier, Ingenico • of KPNsubsidiary, E-Plus light for specifi c sectorsofactivity. of some100iPhoneandiPadapplications aimedat two long-timefoes,isduetoresultinthecreation businesses. This“historic”contractbetweenthe partnership todesignmobileapplicationsfor Apple and for asetprice. new entity’s spectrumismadeavailabletoMVNOs, was announcedbackin2013,provided30%ofthe Commission gaveitsapprovalforthedeal,which latest operatortoenterthemarket.TheEuropean 780 millionEUR.Through Irish subsidiary, O2,toHutchisonWhampoa, Telefónica sewsupthesaleof100%its incumbent carrier. telco nowownscloseto50.8%ofAustria’s failed attemptstotakecontrolof Telekom Austriathatwereincirculation.Afterits America Móvil share, justbehind operators, creatingacompanywith40%market of Norway’s secondandthirdlargestmobile (547 millionEUR).Thedealmarksthemerger Tele2’s Norwegianassets,for5.1billionSEK TeliaSonera announcesthetakeoverof leader. Telefónica tobecomeSpain’s undisputedpay-TV a total365millionEUR.Theoperationwillallow Distribuidora deTelevision Digital,toTelefónica the saleofits22%stakeinSpanishplatform, transaction processing. that specialisesininternationale-commerce 820 millionEURfor possible takeoverof Orange putsanendtoitsdiscussionsoverthe spectrum toMVNOs. aimed atreallocating30%ofthenewoperator’s contingent onaseriesofcommitments,ultimately was originallyannouncedbackinOctober2013,is the newentity. Theapprovalforthedeal,which 5 billionEUR,KPNwillretaina20.5%shareof Telefónica Deutschland’s (O2)takeover IBM announceawide-reaching buys up23.47%oftheshares Telenor. GlobalCollect Bouygues Telecom. Mediaset . Inadditiontothe 3, Hutchisonownsthe , aDutchcompany hasfi nalised KPN, theMexican , willpay for , for • Britain’s • Canadian mediaandtelecomcompany, BCE, • • • • • After • The fi rst digitalinfrastructure“Project bond”has • Italy 21st CenturyFox close to4.9billionGBP(6.2EUR)for 3.95 billionCAD(2.7EUR). its publicminoritystakeholdersforanestimated announced thatBCEwillbebuyingtheinterestsof and its44%ownedsubsidiary, BellAliant, advertising companyfromCalifornia. Yahoo! pays300millionUSDfor largest shareholder, with incumbent, ofwhich decisive steptowardscuttingitsstakeintheItalian redeemable for Telefónica hasissued750millionEURbonds hardest hit,accountingfor12,500ofthelostjobs. which Microsoft 15% ofitsstaff.Itispeopleworkingfor Microsoft T-Mobile USAatcloseto27billionUSD. mobile operatorintheUS.Theofferthusvalues carrier, DeutscheTelekom T-Mobile USA,asubsidiaryofGermany’s incumbent offered 15billionUSDincashfora56.6%stake Iliad, parentcompanytoFrenchoperator, Free , has and Level3 replace thebackboneservicesprovidedby services tothecountry’s sparselypopulatedareas. broadband sector, andwillbringaccesstodigital Bank (EIB),isinsupportofFrance’s superfast issuance, guaranteedbytheEuropeanInvestment been issuedinFranceandEurope.Thisbond way forthemergerbetweenNumericableand the threeNumericableshareholders,andpaves This transactionputsanendtothepactbetween owned byprivateequityfunds,CarlyleandCinven. the previous40%,afterhavingacquiredshares rights ofcablecompany Altice nowowns74.59%ofthecapitalandvoting pay-TV giant,withabaseof20millionsubscribers. with AT&T. This Netfl . ThedealisexpectedtocreateaEuropean ixhassignedaninterconnectionagreement Comcast BSkyB reportsthatitwillbelayingout announces18,000layoffs,orcloseto . inFebruaryand Telecom Italiashares.Thismarksa paid peering paid recentlyacquired,whowillbethe ’s pay-TVassetsinGermanyand Telefónica iscurrentlythe Numericable 14.8%. andthefourthlargest agreementcomesto Verizon inApril, Flurry , comparedto , amobile Nokia, have Cogent SFR. The Commission allows Germany to cut its telco population, with provisos with population, telco its cut to Germany allows Commission The It tookEuropeanauthoritiesayear In July2013,Telefónica announced Source: IDATE Mobile services retail revenue in the EU-5 the in revenue retail services Mobile subsidiary. acquire theSpanishtelco’s Irish weeks earlier, togetthenod Hutchison hadtoacceptafew are inlinewiththosethat imposed onTelefónica inGermany subscribers. Theremedies reports morethan1.7million on O2andE-Plusnetworks Drillisch, whichalreadyoperates 10%. ThechosenMVNOis with theoptionofanadditional MVNO, overafi ve-year period, new entity’s spectrumtoan provisos: selloff20%ofthe agree toseveralCommission their approval,Telefónica hadto to green-lightthedeal.To win sector’s defl ation beganin2008. consolidation inEurope,sincethe what hasseemedaninevitable deal becameemblematicof Europe’s largestmarket,the (33.9 million).Taking placein (36.6 million)andVodafone mobile market,aheadofT-Mobile biggest MNOinthecountry’s operators isduetocreatethe and numberfour(19.3million) three (23.4millioncustomers) marriage ofGermany’s number stake inthenewentity. This 5 billionEURanda17.6% German subsidiary, O2,for KPN, andthemergerwithits the acquisitionofE-Plusfrom 100 Billion € 20 40 60 80 0 0820 0021 2012 2011 2010 2009 2008 Mergers betweenmobileoperators Several nationalregulatory spectrum auctions.Butantitrust will notrunsohighatupcoming is arealpossibilitythatbidding price warswillend,andthere ignited thatmargin-destroying eliminates acompetitor, hopeis the remediesimposed,deal is sharedand,ifweoverlook 4G networktobuild,maintenance both CapExandOpEx:asingle maximum synergiesintermsof in thesamemarketgenerate number onemobileoperator, EE. BT’s announcedtakeoverofthe more recentlyintheUKwith and thirdlargestfi xed ISP, and second largestmobileoperator acquired SFR,thecountry’s where cablecoAltice-Numericable deepen. ThisistrueinFrance, mobile convergencetrend we arealsoseeingthefi xed- involving twomobileoperators, expected outcomesofmergers isolated cases.Alongside can saytheyhavenotremained in GermanyandIreland,butwe the repercussionsofdeals is ofcoursetooearlytogauge market fromfourtothree.It population inEurope’s biggest that wouldreducetheMNO and therisksofaconsolidation effectiveness oftheseprovisos, reservations aboutthe authorities expressed 2013 2014 > Contact:[email protected] heavyweights. world, andwiththatofInternet par withtheirpeersaroundthe scale andnegotiatingpoweron operators enjoyingeconomiesof same amountofchoice,butwith continuing toofferconsumersthe challenge atthatpointwillliein of pan-Europeanoperators.The ing intheemergenceofahandful and morewithstrategiesresult- markets willbecombinedmore that therestructuringofnational to sell.Finally, itseemsprobable plans orquadrupleplaybundles mobile operatorswithoutwireline NGA networkinfrastructure,and to survivewithouttheirown allow fi xed superfastoperators seen hownationalmarketscan companies, itremainstobe infrastructure belongstocable market, andcompetingfi xed antitrust rulesinitsdomestic carrier isoftensubjecttostrict organisation. Asanincumbent are shapingthemarket’s future control fi xed infrastructurethat some degree,itisoperatorsthat double acompany’s EBITDA.To result indebtlevelsmorethan balked atfi nancing dealsthat empire inEurope.Theyhavenot Global’s creationofasmall and Spain(Ono),onLiberty in Germany(KabelDeutschland) Vodafone’s bigcableoffensive fi nancial marketshavesmiledon bundles. We willalsoaddthat ability tomarketquadrupleplay incumbent carrier, namelythe that istypicallyreservedtothe bringing acompetitiveadvantage backhaul power, inadditionto will requiremoreand when superfastmobilesystems out networksynergies,atatime share. Thesedealsarenotwith- no shiftfi xed ormobilemarket tions, totheextentthattheydo issue withfi xed-mobile opera- operators. Theyhavelessofan to mergersbetweenmobile authorities arenaturallyhostile 163 www.idate.org July 164 DigiWorld 2015 DigiWorld chronicle August • • At theoutcomeofitspublicbuybackoffer, French • • • A groupofRussianhackersgotitshandson • • Microsoft to cybersecurity. fi rm, aswellacommonentitydevotedentirely the creationofEurope’s largestcloudcomputing at 620millionEUR,anditisexpectedtoresultin offer, whichwasissuedinJune2014,valorisesBull high-performance computingspecialist.Thebuyback of thecapitalandvotingrights IT serviceprovider, Atosislikelytoown84.25% of theworld’s intra-bankfundtransfers. information securityspecialistthatmanages80% pays 890millionUSDfor which specialisesindigitalsecuritysolutions– Gemplus InternationalandDutchcompany, Axalto, Gemalto fourth largesttelcoat28.2billionUSD. subsidiary at19billionUSD,whichvaluesAmerica’s set thepriceforits67%stakeinT-Mobile USA July, sayingitwastoolow. takeover bidthatFrenchcompany T-Mobile USAhasrejectedthe11.2billionEUR biggest everprivatedatatheft. with 500millione-mailaddresses,makingitthe 420,000 websitesfromaroundtheglobe,along around 1.2billionpasswordsfromcloseto ordered topayApplehundredsofmillionsdollars. the UnitedStateswhereSamsunghasalreadybeen endless reciprocalpatent-relatedlawsuits,exceptin Samsung from shareholdersoverthenext12months. repurchase 6billionUSDofClassACommonStock The BoardofDirectorsatFoxultimatelyvotesto market, citingthelatter’s refusaltoconsiderit. for Time Warner, itsmainrivalintheAmericanTV 21st CenturyFox Samsung’s useofMicrosoftpatentsforAndroid. two companiessignedin2011,andwhichgovern of violatingthetermspatentagreement –bornofthe2006mergerFrance’s and Apple fi les suitagainstSamsung withdraws its80billionUSDbid decidetoputanendtheir SafeNet Deutsche Telekom , anAmerican Bull, theFrench Iliad madeinlate , accusingit has • After havinggiventhenodtodealon2July • After • • After thetakeoverof • German semi-conductorsupplier, Infi • The Germangovernmenthasadopteditsdigital • When announcingitsannualresults, subsidiary, for Telefónica totakecontrolof Commission givesitsfi nal agreementfi nal 2014, withcertainprovisos,theEuropean into exclusivetalkswiththeSpanishcarrier. was alsohopingtogetitshandson–Vivendi enters to 7.45billionEUR–apropertythat bid for which Google leading videoplatformandcommunityforgamers, 970 millionUSDincash,of Amazon announcesthetakeover, for Hellas Online strategy byincreasingitsshareinGreektelco, Vodafone pursuesitsfi xed-mobile convergence ever acquisitionforInfi neon. International Rectifi 3 billionUSDbidforitsAmericancompetitor, in 1999aftersplittingfrom speeds ofaminimum50Mbpsnationwide. security, oneoftheobjectivesistoprovideInternet agenda. Inadditiontoabillonpromotingonline network (SDN)solutions. prepare forthegrowinguseofsoftware-defi ned router sales(itscorebusiness),andishavingto equipment pioneerissufferingfromplummeting reorganisation comesatatimewhenthenetwork 8% ofitsstaff,overthecourseayear. This announces closeto6,000jobcuts,oraround for asetprice. operator’s spectrumavailabletothreeMVNOs, Telefónica hasalsoagreed tomake30%ofthenew KPN willretaina20.5%shareofthenewentity. Telefónica announcedthatitwasuppingits Vivendi’s Braziliansubsidiary, GVT,from6.7 E-Plus hadalsobeeneyeing. (HOL), from18.5%to91.2%. . Inadditiontothe5billionEUR, er.Thiswouldbethelargest Kabel Deutschland Twitch, theworld’s Siemens KPN’s German neon,created , revealsa Cisco also Telecom Italia andONO

, T-Mobile US rebuffs Iliad rebuffs US T-Mobile The demandfromDTappeared Deutsche Telekom turneddown Source: IDATEbasedon operators Monthly mobile ARPU in Europe and the United States United the and Europe in ARPU mobile Monthly the USDepartmentofJustice reluctance fromtheFCCand SoftBank wasdealingwith Iliad offerwasturneddown, but, atthetimewhen the SoftBank-Sprintproposal to increasethechancesof deal, butwithoutsuccess. local partnerstosweetenthe to thetable.Iliadsoughtout brings spectrumandsubscribers the idealbuyerwouldbeonethat Deutsche Telekom hintedthat that appealtoshareholders. the kindofsignifi cant synergies Plus thedealwouldnotgenerate a veryrealdifferenceinsize. things incommon,thereremains T-Mobile andFreedohavesome market, inlessthantwoyears.If and morethan12%ofitsmobile of France’s broadbandmarket accruing amorethan24%share biggest successstories, as oneofthedigitaleconomy’s 13 billionEUR–isperceived valuation standsatcloseto company –whosemarket surprise, evenifFree’s parent offer fromIliaddidcomeasa its Americansubsidiary. The over allitsshares(67%)in wanted 19billionUSDtohand the US.TheGermanincumbent fourth largestmobileoperatorin Iliad forcontrolofT-Mobile, the a 11.2billionUSDofferfrom 10 15 20 25 30 35 € 2012 The fi rst concernsthelikelihood Under thesecircumstances, to protectitsmarketshare. much moreaggressivestrategy a changeinmanagement,and T-Mobile wenthandin hand with but thewithdrawalofitsbidfor continues tolosesubscribers, bottom lien.Sprint,meanwhile, on thetwodominantoperators’ share haveweighedveryheavily the substantialgainsinmarket Verizon andAT&T. Upuntilnow, 4G network,tokeeppacewith to investbuildoutanational time whenitneedstocontinue expense ofitsmargins,andata its marketshare,albeitatthe which hasenabledittobolster strategy calledUn-carrier has developedanaggressive CEO, JohnLegere,T-Mobile the guidanceofitsfl amboyant fi gure). Forayearnow, under in plummetingARPU(see waged inEurope,whichresulted of apricewarsimilartotheone two majorquestions. market’s organisationraises a changeintheUSmobile 39 billionUSD. attempt toacquireT-Mobile for authorities blockedAT&T’s back inAugust2011,antitrust should rememberthat,already from fourtothree.Here,we the mobileoperatorpopulation the sectorthatwouldreduce (DOJ) overaconsolidationin 2013 Italy Total EU-28 Germany Spain UK France USA > Contact:[email protected] The secondquestionconcernsthe in Wi-Fi. companies’ ongoinginvestments Comcast’s andothertopcable the UScouldalsobereshapedby Lastly, themobilelandscapein for approvalfromauthorities. DirecTV, whichtodayis waiting AT&T’s hoped-formerger with Such adealwouldbesimilarto into talkswithDeutscheTelekom. make amoveforSprint,orenter auctions, isexpectedtoeither outspent Verizon attheAWS-3 had 45MHzofspectrumand DISH Network,whichalready largest satelliteTVcompany, before then.Thecountry’s second will alterthemarket’s structure and weexpectthatcurrentdeals auctions hasnotyetbeenset, But thetimetableforthese lacking low-frequencyspectrum. operators thatarecurrently advantage insomebandsto carry provisosthatwillgivean for 2016,areexpectedto to TVstations–scheduled frequencies currentlyassigned freeing up600MHzband as two-sidedsincetheyinvolve the nextauctions–referredto of subscribers.Itistruethat connections toagreaternumber aggregation todeliverfaster instance byemployingcarrier onto thepremiummarket,for 4G networknationwide–tohold and T-Mobile havedeployeda the means–evenonceSprint heavyweights th spend, respectively. Thetwo roughly 10billionUSDtheydid of the18billionUSDand outbidding T-Mobile, instead spectacular 45billionUSD)by late 2014(whichbroughtina during theAWS-3 auctionsin assets intheintermediatebands could haveshoreduptheir low frequencyspectrum.They particular controlmostofthe change. AT&T andVerizon in operators, andhowthiswill between thefournational unequal allocationofspectrum erefore have 165 www.idate.org August September 166 DigiWorld 2015 DigiWorld chronicle • After sixyearsofinvestigation,theEuropean • • • • American ITcompany, currentlyintheprocessof • • • • Philips 138 millionEURonfourchipsetmakers– Commission announcesthatithasimposedafi ne of Minecraft Swedish gamestudio Microsoft 10 years. next twotofi ve years, andathirdofthemwithin signing up10%ofFrenchhouseholdswithinthe service, arrivesinFrancewithhighambitions: Netfl 4 November. close on10September, butwillbeextendedto July, thisfriendlytakeoverbidwas initiallydueto investigation intothetransaction.Launchedinearly telco, Liberty Global building openandhybridcloudsolutions. an USfi rm thatprovidesopensourcesoftwarefor business withtheannouncedtakeoverof restructuring itsoperations, through aconvertiblebondissuance. and upto1.5billionifdemandisstrongenough, Twitter announcesplanstoraise1.3billionUSD, payment. are outfi tted withachipsetforNFCcontactless iPhone 6Plus,andoftheAppleWatch, allofwhich release oftwonewsmartphones,theiPhone6and Apple CEO,Tim Cook,offi cially announcesthe the resultingentityfrom38%to25.6%. Telecom wasforcedtoagreereduceitsstakein scandal at Oi –amarriagethatwasputtothetestby the newtermsofmergerwithBrazilianoperator Portugal Telecom continent tomorethan20,000. increases thenumberoftowersitmanageson which isthelargestofitskindeverinAfrica,IHS to manage9,151towersinNigeria.Withthisdeal, leader inNigeriawitha46%shareofthemarket– a contractwithSouthAfricanoperator telecommunications infrastructureinAfrica,signs IHS Towers, aleadingproviderof between September2003and2005. ix,thepopularAmericansubscriptionVoD Ziggo, followingtheEuropeanCommission’s , Samsung . willshellout2.5billionUSDtobuy Banco EspíritoSanto prolongsitstakeoverbidforDutch andRenesas shareholdersgivetheirapprovalto Mojang HP beefsupitscloud , publisherof –forpricefi xing . InJuly, Portugal MTN Eucalyptus Infi –and neon, , • Responding tothe argumentsputforthbyits • As partofinquiry that hasbeenongoingsince conglomerate • Japanese • • Chinese e-commercegiant • Russia’s telco • Danish • PayPal onlinepaymentsubsidiary. in 2015,separatingitsauctionbusinessfrom announces itsplanstosplitthecompanyintwo shareholders, Americanonlineauctiongiant companies. compared totheaverage12.5%imposedonother corporation payslessthan2%taxonitsprofi ts, from anillegaltaxregimeinIreland,wheretheUS Apple ofhavingbenefi tted formorethan20years June 2014,theEuropeanCommissionaccuses as 3.4billionUSD. DreamWorks, inadealthatcouldbeworthasmuch take controlofAmericananimationstudios, shareholder. Telecom Italia,ofwhichitwillbecometheleading business astheagreementalsoincludesastakein telecom property, Vivendi hasstill keptafootinthe deducted. Despitethesaleofitslastremaining around 450millionEURinbankdebtneedstobe cash: 4.66billionEURincash,fromwhich to Telefónica, for7.2billionEURinsharesand agreement tosellisBraziliansubsidiary, Vivendi announcesthesignatureofafi nal it hasbrokenallglobalrecords. 170 billionUSDandraisingjustover25USD, IPO onWall Street.Withanestimatedvaluationof will gotoVimpelCom. estimated 300millionUSD,ofwhich135 in WindMobile (1.7 billionEUR)incashandnodebt. Sachs andQuadrangle,forcloseto12.5billionDKK Norwegian cablecompany, Get,fromGoldman in Spain. mobile telco,consolidatingOrange’s marketshare second largestfi xed telcoanditsthirdlargest 3.4 billionEUR.ThedealwillgivebirthtoSpain’s bid forfullcontrolofSpanishtelco, Orange announcesthelaunchofafriendlytakeover VimpelCom preparestoselloffitsstake TDC announcesthetakeoverof Canada.Thedealisworthan SoftBank Alibaba isintalksto launchesits Jazztel GVT, , for eBay Alibaba and the biggest IPO of all time time all of IPO biggest the and Alibaba Today, Alibabaoperatesprimarily In September2014,Alibaba Source: FactsetResearchSystems Amounts raised by the biggest Internet IPOs in the United States United the in IPOs Internet biggest the by raised Amounts by Baidu(searchengine against theallianceformed particularly whensparringoff even ifcompetitionisfi erce, several Internetsegments, in Chinawhereitdominates Chinavasion, andXiaomi. Pictures afterhavingtakenover to contentacquisitions:Alibaba AutoNavi, oftenintherun-up with Youku Tudou andmapswith other arenas,includingvideo acquired sharesinahostof AliWangwang). Ithasalso communications (Laiwang, cloud computing(Aliyun)and including payment(Alipay), into arangeofotherservices, C2C (Taobao), andsteadily from B2BintoB2C(Tmall)and wide. Itbeganbyexpanding Alibaba hasdiversifi ed farand as ane-commercecompany, sector, forthatmatter. Starting in 2012–andanyother which raised16billionUSD ever –biggerthanFacebook’s offering inthehigh-techsector It isthebiggestinitialpublic to 25billionUSDintheprocess. United States!)andraisedclose launched anIPO(inthe Shanda Games King Digital Facebook JD.com Renren Alibaba Yandex Twitter Google Zynga 0.5 0.8 1.0 1.0 1.4 1.8 1.7 2.1 Its strikepowernaturallymakes America’s Internettitans. it aseriouscompetitorfor in Singapore). the digitaluniverse(SingPost (an Uberrival),andevenoutside in OTTcommunications)andLyft companies Tango (achallenger of China,notablybyAmerican series ofinvestmentsoutside and Russia),hasmadea and amajorplayerinIndonesia (mobile browserleaderinIndia, which itacquiredinlate2014 and Brazil,alsoviaUCWeb, already presentinB2BRussia of 2014weredisappointing.Itis Global, whoseresultsattheend e-commerce concernwithTmall also launchedaninternational global approach.Alibabahas naturally lendthemselvestoa The company’s salesactivities Ebates intheUnitedStates. of PriceMinisterinFranceand vein asJapan’s Rakuten:owner on foreignmarkets,inthesame most likelytolaunchanassault probably theChinesecompany and mortarretailer).Alibabais and DalianWanda Group(brick networking withQQandWeChat) communication toolsandsocial leader), Tencent (leaderin > Contact:[email protected] 16.1 and playingtothemasses. too, byadoptingcertaincodes competitor forUScompanies, Alibaba couldbecomeaserious the Internetgiantseventually. numbers willnaturallyattract in Russia,whosemassiveuser particularly inAsia/Pacifi c and the planet’s emergingmarkets, DNA are.Butitisoneinallof players withsoftwareintheir markets, inthesamewaythat North AmericanorEuropean is notyetreallyathreatinthe especially withUCWeb. Alibaba in China–cloudcomputingand has notreallycaughton,even the AliyunmobileOS–which into softwaredevelopment,with of servicesanditsfi rst forays model, infact,withaportfolio sketching outtheplatform approach. Alibabaisonly fi rm, thantoaplatform-based combined withaventurecapital various e-commercecompanies akin tothatofconglomerate Alibaba’s approachtodayismore different fromWestern ones. But theChinesemodelisquite Billion $ 25.0 167 www.idate.org SeptembER 168 October DigiWorld 2015 DigiWorld chronicle • • • • The EuropeanCommissionfi nally givesthe • • The EuropeanCommissionannouncesthestart • After gettingthego-aheadfromEuropean • • The Frenchgovernmentconfi rms thatauctionsfor • Following inthestepsof offer hadbeenrejected. its rival, 1.56 billionGBP(1.96EUR)after outbidding and Bluetoothsolutionsspecialist, Qualcomm i.e. 67%ofshares,wasrejected. Deutsche Telekom’s entire stake inT-Mobile USA, a secondhigherbidofcloseto18billionUSDfor Deutsche Telekom is givinguponitsplanstotakecontrolof Free’s parentcompany, Iliad, region, servingabaseof91.8millionsubscribers. carrier ispresentinsome20countriesthe Africa-Middle Eastoperations.France’s incumbent Orange isexaminingthepossibilityofanIPOforits channel, Film1. of commitments,includingthedivestiturepay-TV This approvalisneverthelesscontingentonaseries owns thecountry’s secondlargestcableco, company, Ziggo,toLibertyGlobal greenlight forthesaleoflargestDutchcable United StatesandintheUK. service inGermany, whichisalreadyavailableinthe Amazon announcesthelaunchofitsKindleUnlimited and Amazon agreements establishedbetweenLuxembourg of anin-depthinvestigationintothetaxation 22 billionUSD,including4.59incash. of mobileapplication Commission, Hewlett-Packard Enterprise enterprise servicesoperations,andbecalled the company’s infrastructure,softwareand and becalledHPInc.,theotherwillcombine one willcombineitsPCandprinterbusinesses separate companiesbytheendoffi scal 2015: HP announcesthatitwillbesplittingintotwo actual reassignmentbetween2017and2019. telecom operators,willtakeplacein2015andthe being usedbytelevisionandduetobereallocated the 700MHzfrequencyband,whichiscurrently boxes startinginNovember. Netfl Orange announcesthatithassignedadealwith ixtoprovidetheSVoD platformonitsset-top Microchip Technology willbebuyingBritishchipsetmaker . Facebook subsidiary, T-Mobile USA,after WhatsApp completesitstakeover Bouygues Telecom andSFR, . announcesthat , whoseJuly2014 forcloseto which already CSR, for

UPC. • • IBM’s saleofitsailingprocessorbusiness • Brussels putsanendtotheproceedingslaunched • The EuropeanCommissionrefersanappealagainst • The EuropeanCommissionfi nes SlovakTelekom • After ahugeoutcryfromthepopulation, • the • After • France’s competitionauthoritygivesitsapproval, • The FCCextendsthedeadlineforitsinvestigation are onboard( perspective, however, asonlyahandfulofoperators offensive movefromAppledoesneedtobeputinto two switchproviderseasily. Theimpactofthis operator andadataplanfromtheirtablet, universal SIMcardthatallowsuserstoselectan Apple’s newiPad4Gisoutfi tted withanApple the Europeanmarket. of beingsubsidisedanddumpingtheirproductson of AbuDhabi,isnowoffi but ownedbyentitieswithtiestothegovernment to GlobalFoundries and thesolutiondoesnotcoveriPhones. equipment manufacturers, more thanayearagoagainsttwoChinesetelecom regulatory authority. guarantee theindependenceofitsnationaltelecom Union, havingconsideredthatBelgianlawdoesnot Belgium totheCourtofJusticeEuropean dominant positioninthetelecomsector. its parentcompany, DeutscheTelekom at arateof50eurocentspergigabyte. tossed abillthatwouldhavetaxedInternet traffi c Hungarian governmentannouncesthat itshas in threeyears. Viber Mediahopestosell10millionmobilephones The Japanesee-commercegiantandownerof on Japanesetelco Rakuten of theterritory. 57% oftheFrenchpopulationandmorethan80% 11,500 towersdeployedoveranareathatcovers January 2014.Theagreementinvolvessharing of amobilenetworksharingdealsignedin Bouygues Telecom its cablenetworkavailabletothecompetition. imposed onNumericablearetheobligationtomake subsidiary, Numericable. with provisos,forthesaleof additional information. – DirecTV into theComcast– becomesanMVNOinJapan,piggybacking mergers,togiveitselftimegather Numericable –SFR AT&T, Sprint andSFRhashoutthedetails , acompanybasedinCalifornia NTT DOCOMO Time Warner CableandAT&T cial. Among theconditions , T-Mobile USAand Huawei and merger, SFR toAltice ’s network. , forabuseits ZTE, accused

EE) and Kindle Unlimited comes to Germany Germany to comes Unlimited Kindle Europe’s topbookpublishers After theUKinSeptemberand Source :IDATEbasedonservices Examples of ebook services subscription a doublethreat:furtherloss publishers, KindleUnlimitedis the onlinepriceforbooks.For November 2014–andsetting which waseventuallysettledin Amazon intheUnitedStates, confl ict betweenHachetteand the unit–astestifi ed bythe model ofsellingbooksby points thatincludethetraditional strained atbest,withsore biggest onlinebooksellerare relationship withtheworld’s new subscriptionmodel.Their themselves withAmazon’s do notwanttoassociate independent publishers. on Amazonorfromsmall are eitherworksself-published available inGerman,andall Europe. Only40,000titlesare lacking, asitisintherestof service inGermanyissorely abundance ofthetotaloffer, the of 650,000titles.Despitethe unlimited accesstoalibrary 9.99 EUR,subscribershave in GermanyOctober. For Unlimited e-bookrentalservice Amazon launcheditsKindle and Franceinlate2014, before movingintoItaly, Spain Unlimited Amazon Kindle nil S E-books USA Entitle evc onr Offer Country Service cidUAE-books USA USA Scribd Oyster oSrb rneEbos>5 0 Unlimitedaccess >50000 E-books France YouScribe oBo rneEbos>1 0 Unlimitedaccess >15000 E-books France YouBoox koeGrayEbos>6 0 5booksfor >65000 E-books Germany E-books Germany/UK Skoobe Blloon S E-books USA Audio-books Audio-books Audio-books E-books Publishers donotformanentirely It hasalsotriggereddiscussions services: ScribdandOyster. much smallere-bookrental catalogue totwosimilar, but over asmallportionoftheir and HarperCollins–havehanded Macmillan, Simon&Schuster Three ofthem,however– works listedonKindleUnlimited. deal withAmazontohavetheir the UnitedStateshassigneda of thetopfi ve publishersin united front,however. Notone available onKindleUnlimited. rights oncetheirworkbecomes a decreaseintheirauthor’s the conclusionappearstobe self-publish throughAmazon, destroys value?Forauthorswho in pricethatautomatically Or doesitinduceadecrease population, andsothemarket? service helpincreasethereader book sales.Doesthenew complements orundermines over whetherKindleUnlimited undercutting theirbooksales. model –andthefearofrentals price lawandthesubscription compatibility betweenitssingle- has involveddebatesoverthe their works–whichinFrance of controloverthesaleprice 0 0 niie ces9.95USD Unlimitedaccess > 1000 0 0 niie ces9.99USD Unlimitedaccess > 600000 0 0 Pricingbasedonthe > 200000 0 0 Unlimitedaccess > 500000 aao Tariffmodel Catalog ..Pricingbased on n.c. downloaded permonth number oftitles to thecompletecatalog to thecompletecatalog per-page flatrates to thecompletecatalog simultaneous rental One lastpointworthmentioning > Contact:[email protected] France’s MinisterofCulture. e-books inlibraries,producedfor sequence ina2013reporton hypothesis ofasalesandrental the start.IDATE detailedits the bookrentalbusinessfrom libraries whichhavebeenin subscription services–butalso further cutoutoftheloopby and onlinesales,willbe have beenruinedbye-books bookshops –manyofwhich debate alsoconcernstraditional is thatthebooksalesvs.rental meaningless inthedigitalworld. publishing cheaperpaperbacksis high-price hardbacks,before traditional practiceofreleasing more necessarygiventhatthe This sequenceappearsallthe what themoviebusinessdoes. publication date,similarto window sequencebasedon tantamount tocreatingarelease new releases.Thiswouldbe selling onlyhardcopiesof subscription services,while their back-cataloguethrough taking shape:monetising But anewstrategyisalso their toesintothisnewmarket. The aimofcourseistodip Tariff 4 bookspermonth) to 27.99USD (2 bookspermonth) 14.99 USD 8.99 USD 9.90 EUR (1000 pages) to 6.99GBP 3.99 GBP(500pages) 9.99 EUR 9.90 EUR 169 www.idate.org October November 170 DigiWorld 2015 DigiWorld chronicle • After sixmonthsof bitterdispute, • • • • Four privateequityfi rms –Canadianfi rms • • After themergerwith • With amarketcapof408billionUSD, • Swedish equipment manufacturer, Ericsson, • Like • German printmediagiant, a subsidiaryofthe streaming musicservice. YouTube launchesYouTube MusicKey, apaid platform, Yahoo! announcesthetakeoverofonlineadvertising 1.4 billionUSDbackinJune2012. already soldaround5%ofChinaUnicomfor ongoing divestments.TheSpanishcarrierhad (Hong Kong)for687millionEUR,aspartofits Telefónica sellsa2.5%stakein TDF, valuedat3.6billionEUR. operator, andtowerpartnerwithmobileoperators, assets ofFrance’s leadingbroadcastingnetwork Britain’s Arcus–joinforcestotakecontrolofthe Brookfi eld andPSP, APGfromtheNetherlandsand takeover of800millionUSDdebt. customers, for2.5billionUSD,includingthe third largestmobileoperator, with8.6million AT&T announcesthetakeoverof long-term cross-licensingdealwith French advertisingagency, Publicis, unseats over twoyears. executed: thecompanyhascutitsstaffby10% top oftheausterityplanthatisalreadybeing its costsby9billionSEK(970millionEUR),on announces theimplementationofaplantoreduce agreement fore-bookandprintsalesintheU.S.”. announce thattheyhavesigneda“multi-year only twoweeks,provedtoocostly. its papers.Themeasure,whichwasineffectfor publishing snippetsandsummariesofarticlesfrom Google, electsnottobantheInternetgiantfrom is lockedinanintellectualpropertydisputewith as ofJune2014. 1.35 billionUSDandprofi ts of85.9millionUSD, fi rm,Sapient American digitalmarketingandcommunications that itwillbespending3.7billionUSDtoacquire the highestmarketcaponplanet. spot, behind Samsung ExxonMobil BrightRoll , whichisreportingannualrevenueof Apple (661.8billionUSD)whichhas , LGannouncesthatithassigneda Lagardère , for640millionUSD. andmovesintothenumbertwo Omnicom Axel Springer group,and fellthroughinMay, Iusacell China Unicom Hachette Livre announces Google Microsoft , Mexico’s , which Amazon .

, • • • After havingacquired • company • Cable • Following theEuropeanParliament’s adoptionof a • • • Netherlands, toacquireits40%stakein Reggeborgh KPN announcesanagreementwithitspartner, Cable &Wireless infrastructure inheritedfromitsacquisitionof BT Openreachaccesslinesandthewireline fi xed broadbandproductsintheUK,combining Vodafone announcesthatitisrevivingitssuperfast the Rockstar the Netherlands( Apple and (Virgin Media),Germany( several keymarketsforVodafone, suchas the UK in some12countriesacrossEurope, including Liberty Global convergence strategybysettingitssights on confi rms itsplanstostepupfi xed-mobile Kabel DeutschlandandONO incumbent carrier. now offering7.4billionEURforthePortuguese After havinguppeditsinitialbid,thecompanyis Brazil’s Oiforthetakeoverof Altice hasenteredintoexclusivetalkswith 20%, andtheremaining20%willbeafreefl oat. 60% ofthenewNumericable-SFRentity, Vivendi 13.36 billionEURincash.Numericablewillown two mobileoperator, SFR,fromVivendi for the conclusionofitstakeoverFrance’s number companies canbetargetedsuccessfully. competition rules,toensurethatglobalInternet to theEuropeanCommissionforareviewofEU – FranceandGermanydraftacommonrequest tantamount toaskingforGooglebedismantled be splitfromothercommercialservices–whichis non-binding resolution,callingforsearchenginesto the UK,afterhavingleftitbackin2002. EE, withaviewtoreturningthemobilemarketin with Telefónica, ownerof BT announcesthatitisintalks,ontheonehand, suit fi amicable agreementthatwillclosethebookon Google announcesthatitisclosetoreachingan with Google putting anendtoa10-yearpartnership Mozilla’s FirefoxbrowserintheUnitedStates, Yahoo! willbecomethedefaultsearchenginefor company. for 610millionEUR,andsotakefullcontrolofthe led againstitforviolatingAndroidpatentsby BlackBerry . , anFTTHnetworkoperatorinthe consortium,whichincludes , acablecompanythathasfootprint Numericable . UPC/Ziggo) andIreland. . Cable &Wireless O2 and,ontheother, with Unitymedia KabelBW (Spain), (Altice)announces Portugal Telecom Vodafone , Microsoft Reggefi ), .

ber , YouTube launches YouTubeYouTube Key Music launches This rolloutispartofYouTube’s YouTube hasrolledoutabeta by OpinionWay andHadopiin According toasurveyconducted unique visitorsinJanuary2014. 2 billionhitsand29.5million YouTube generated morethan according toMédiamétrie, in onlinemusic.InFrance, steady risetomajorplayer service. Google PlayMusicstreaming also includesaccesstothe view offl ine. Thesubscription songs andvideostolistenor have theoptionofdownloading a newappisopened.Usersalso smartphone screenislockedor the backgroundevenwhen the musiccontinuestoplayin users listeningontheirmobile, free musicvideostheywant.For users canwatchasmanyad- Europe. For9.99EURamonth, countries, inNorthAmericaand streaming serviceinseven version ofitsYouTube MusicKey The offensiveispartofYouTube’s competition betweenthe Key shouldhelpstimulate The arrivalofYouTube Music of afi eld ofsome30players. subscriptions worldwide,out for 80%ofstreamingmusic three sitestogetheraccount at thesametime.These and 3.5millionforPandora through theirmobileoperator) (including thosewhosignedup 5 millionsubscribersforDeezer May 2014,comparedtoaround 10 millionpaidusermarkin which reachedthesymbolic by thesuccessofSpotify fast-growing market,exemplifi ed plan toforgeitselfaplacein base intopremiumsubscribers. convert aportionofitsuser for YouTube whichishopingto Music Keyisjustanaddedstep on Deezer. Sothelaunchof on YouTube twiceasmuch France saytheylistentomusic 2013, 54%ofInternetusersin > Contact:[email protected] According toourforecasts, The stakesforthemusicbusiness quarter in2014. at thatpoint,comparedtoone record musicmarket’s income will representclosetohalfofthe 13.9% increaseover2014.It in 2018,whichrepresentsa will standat7.3billionEUR revenue fromstreamingservices 1.8 billionEUR. 55.5% duringthattime,tototal subscription revenueshotupby reach 1.5billionEUR,andthat between 2011and2014,to ad revenuegrewby30.1% today. IDATE estimatesthat market’s mainsourceofgrowth downloading. Itisalsothe and graduallyclosinginon listening torecordedmusic, increasingly popularwayof are high:streamingisan the streamingsegment’s growth. different players,andaccelerate 171 www.idate.org November December 172 DigiWorld 2015 DigiWorld chronicle • Norwegian telco, • Norwegian • Norway’s competitionauthorityputsthebrakeson • The world’s numberoneproviderofurban • The timetablefor the seconddigitaldividend,i.e. • • German mediaconglomerate, • • • The EuropeanCommissionannouncesthelaunch furniture. 15 January2015. rival, of Tele2’s Norwegianoperationstocountrymanand the 5.1billionNOK(closeto550millionEUR)sale for thedeploymentof announces aglobal15-yearcontract with advertising andstreetfurniture, 30 June2019. of thefrequenciesbetween1October2017and allocation inDecember2015,andactualhandover by TVbroadcasting,hasbeensetinFrance: the 700MHzbandthatiscurrentlybeingused variety ofthird-partyVNFs. market platform:anopenonlinemarketplacefora for managedservicesproviders,includingitsVNF to promoteitsSDN/NFVvirtualizationsolutions Ciena createsanewdivisioncalledAgility, sites, SeLogerandImmonet. company’s propertiesaretheonlineclassifi ed ad venture, stake intheir announces theacquisitionofGeneralAtlantic’s 30% Virgin Mobile. for Altice,after 7.4 billionEUR.Thisisthethirdmajoracquisition of PortugalTelecom Altice sealsthedealfortakeover the previousroundoffundraisinglastJune. reached 40billionUSD,vs.17USDduring The valuationofthestillunlistedcompanyhas (1.2 billionUSD)since Uber managesthelargestfundraisingcampaign Commission’s approval. will needtomakecertainconcessionswinthe of Spanishtelco, of anin-depthinvestigationinto market, justbehindtheleader, TDC. European Commission,willhavea40%shareofthe new entity, whichstillneedstobeapprovedbythe subsidiaries, tocreatea50-50jointventure.The TeliaSonera, announcethemergeroftheirDanish TeliaSonera. Thefi nal decisionisexpectedby for446millionEURincash.Amongthe Axel SpringerDigitalClassifi SFR andFrenchMVNO, Jazztel Telenor, andFinnish-Swedishtelco, fromBrazil’s Oi,for small cells small Facebook for3.4billionEUR.Orange Axel Springer, Orange ’s backin2011. initsstreet JCDecaux ’s takeover edsjoint Vodafone, , • Chinese fi• Chinese rm • The FCC’s AWS-3 auctionsthatbegan inmid- • • Private equityfi rm, ApaxPartners,thecurrent • • • After theUnitedStates,Germany, theUK,Italy • In responsetothecreationofataxbelevied • • at 45billionUSD. company thatwascre ated only fouryearsago 1.1 billionUSD,puttingthevalueofthis third largestsmartphonevendor–has raised some marketanalysts,hasbecomethe world’s agencies, bringinarecord45billionUSD. the DepartmentofDefenceandothergovernment frequencies which,upuntilnow, havebeenuseby November for1700MHzand2200band top fi ve ITserviceproviders. United Statesandbecomeoneoftheworld’s The dealwillallowAtostotripleitssizeinthe Xerox’s ITservicebusiness Atos announcesthetakeoverofUSveteranfi rm for 2.3billionEUR. to aholdingcompanyrunby France Telecom in2011for1.5billionEUR,sells owner of confl icts betweenthetwocompaniesoverpatents. cross-licensing contracts,inabidtolimitpotential Google and and Orange4%. through, DeutscheTelekom willown12%ofBT for 15.7billionEUR.Oncethedealhasgone joint venture, negotiations with Orange and 700,000 works,including20,000inFrench. users canhaveunlimitedaccesstomorethan of KindleUnlimited.For9.99EURamonth, and Spain, media publishers. News inSpain,andrekindlesthedebatewithprint articles, on thesearchengineforusingsnippetsofpress from thesale. controls 67%ofthecarrier, wants25billionUSD Brazil’s secondlargesttelco. offer 15billionUSDforrival, Oi, Telefónica andClaro balloons. to theplanet’s deadzonesusingstratospheric for ProjectLoon,itsplantosupplyInternetaccess in thesummerwithFrenchspaceagency, CNES, Google confi rms thatitpennedapartnershipdeal Google Orange Amazon Verizon signanagreementover Deutsche Telekom Xiaomi EE, Britain’s largestmobileoperator announcestheclosureofGoogle Switzerland,acquiredfrom BT forthesaleoftheir50-50 announcesthelaunchinFrance –which,accordingto (ownedby for1.05billionUSD. Iliad bossXavierNiel TIM Participações Telecom Italia,which enter intoexclusive America Móvil , ) , BT and EE in the UK the in EE and BT More than10yearsafter Source: IDATE Consolidation in the telecommunications sector in the UK the in sector telecommunications the in Consolidation acquisitions ofCable&Wireless offensive: aftertheconsecutive on afi xed-mobile convergence already knowthatVodafone is that thestoryendsthere.We both casesitseemsunlikely BT isinadifferentvein,but to four. Thedealplannedby of MNOsinBritainfromfi ve already reducedthenumber mobile businessestoformEE, Deutsche Telekom’s local six yearsagoofOrangeand sector intheUK.Themerger of thetelecommunications to evengreaterconcentration This dealcouldbeaprelude trend ontheOldContinent. ficonvergence xed-mobile It isalsopartofagrowing only inthewirelinemarket. in Europe,tobeoperating incumbent carriers,atleast BT wasoneoftheveryfew an endtoasingularsituation: their EEjoint-venture,marked Deutsche Telekom toacquire exclusive talkswithOrangeand the Britishincumbentwasin game. Theannouncementthat Telefónica, BTisbackinthe off andlatersaleofO2to operations, throughthespin- divesting itselfofitsmobile Liberty Global purchase in 2013 Virgin Media agreement Talktalk MVNO CWW Sky BT Here, theBritishmarketisreally

partnership? been deemedtoolowtoraise distorted wouldnodoubthave dangers ofcompetitionbeing too low. Fortheremainder, the takeover bidsonlyforbeing entrant, Yoigo, hasturneddown TeliaSonera, whichownsfourth hinges solelyonthefactthat of fourmobileoperators In Spain,theongoingexistence of othercountriesinEurope. up andbeingtakenbyanumber only followingthepathopened now thecaseinGermany. down tothreeoperators,asis player andshrinktheUKmarket they wouldeliminateyetanother Hutchison, cometofruition, Three, subsidiaryofHongKong’s if discussionsbetweenO2and of mobilemarketconsolidation, Also furtheringtheprospects lookout formobileproperties. ISP, Sky, appearstobeonthe satellite pay-TVproviderand Virgin Mediaaswell.Meanwhile, would allowittogetitshandson on LibertyGlobal,adealthat raising thebar, setitssights group couldgoafterTalkTalk or, (see theFocusforMarch), in GermanyandONOSpain in theUK,KabelDeutschland

(planned for2016) MVNO agreement MVNO agreement target (takeoverof ucaepurchase Liberty Global?) purchase in2012 4% inmergedentity MVNO agreement 12% inmergedentity EE planned Vodafone merger > Contact:[email protected] So thepaceofconsolidationis Three 02 to awirelinecarrier? mobile operators?Eachattached 2001). Andtomorrow?Three (with theexceptionofBTuntil from domesticwirelinecarriers virtually allofthemindependent Home tofi ve mobileoperators, in Europeforseveraldecades. advanced competitivelandscape market representedthemost the UKsosingularisthat but whatmakestheBTdealin accelerating acrossEurope, chapter inthetale. this iscertainlynotthelast precedent setbyGermany. And not impossible,lookingatthe for antitrustauthorities.But have beenamuchhardersell largest mobileoperatorwould the country’s secondandthird Telecom: amergerbetween particularly withBouygues the saleofSFRtoNumericable, In France,alongbattlepreceded scrutinised closelybyBrussels. impact onprices,andisbeing far moreconcernsoverits however, appearlikelytoelicit takeover ofJazzteldoes, authorities. Orange’s planned any redfl ags forantitrust purchase) (before

50% 50% BT’s

T-Mobile UK Orange UK jv in2009 agreement purchase Hutchison Telefónica

173 www.idate.org December 174 DigiWorld 2015 Region profiles profiles Region 175 www.idate.org 176 DigiWorld 2015 Region profiles Europe Macro-economic data Macro-economic Subscribers Markets Digital TVhomes Pay-TV homes Broadband subscribers Cellular customers GDP (billion TV homes(millions) Population (millions) Fixed telephonelines Total Devices Internet services TV andvideoservices Telecom services IT services&solftware (billion Network equipment (millions) € ) as a%ofinhabitants € as a%ofTVhomes as a%ofTVhomes sa%o naiat 95 79 64 52 22.7% 25.2% 26.4% 27.9% 29.5% as a%ofinhabitants sa%o naiat 2.%105 3.%138 139.0% 133.8% 132.0% 130.5% 128.5% as a%ofinhabitants ) 61351 2. 71291 0. 20 252.5 17801.3 17 122.9 16 525.6 16 123.5 6. 8. 9. 1. 1164.2 1115.4 1097.5 1083.2 1 064.1 2. 4. 5. 6. 285.3 197.4 262.1 230.8 189.8 251.7 210.5 190.5 185.5 241.4 202.0 210.1 180.7 225.5 192.5 219.8 176.2 182.9 231.5 243.9 8. 8. 8. 8. 295.7 837.7 289.0 833.4 285.9 831.6 283.3 829.9 281.0 828.0 0221 0421 2018 2015 2014 2013 2012 2018 2015 2014 2013 2012 2. 2. 2. 5. 1034.3 177.9 955.5 168.9 286.5 301.1 928.8 160.3 277.7 271.7 924.6 166.5 278.5 264.1 923.9 167.7 282.4 259.1 292.2 255.4 02 52 80 07 96.5% 66.8% 90.7% 27.6% 65.7% 88.0% 25.3% 64.9% 85.2% 24.3% 63.8% 80.2% 23.2% 62.7% 22.1% 0221 0421 2018 2015 2014 2013 2012 41.6 98.9 68.2 90110134110.0 103.4 101.0 49.8 99.0 67.7 58.6 66.2 68.4 65.3 95.5 63.3 America North Macro-economic data Macro-economic Subscribers Markets Digital TVhomes Pay-TV homes Broadband subscribers Cellular customers GDP (billion TV homes(millions) Population (millions) Fixed telephonelines Total Devices Internet services TV andvideoservices Telecom services IT services&solftware (billion Network equipment (millions) € ) as a%ofinhabitants € as a%ofTVhomes as a%ofTVhomes sa%o naiat 0.%143 0.%108 114.4% 110.8% 109.1% 104.3% 101.3% as a%ofinhabitants sa%o naiat 25 90 62 39 19.4% 23.9% 26.2% 29.0% 32.5% as a%ofinhabitants ) 35451 0. 45241 7. 17 641.5 15273.4 14 552.4 14 004.9 13 504.5 7. 1. 6. 1. 1349.0 1215.3 1165.6 1113.5 1 072.6 1. 2. 2. 3. 139.0 111.8 131.3 121.9 112.0 418.8 126.8 114.6 112.2 396.4 121.5 111.5 112.7 387.7 116.6 108.0 113.1 367.4 104.3 102.0 354.4 113.8 2. 3. 3. 3. 139.0 366.2 133.9 357.9 132.3 355.2 130.6 352.4 129.0 349.7 0221 0421 2018 2015 2014 2013 2012 2018 2015 2014 2013 2012 6. 6. 7. 7. 186.7 165.1 179.1 309.4 441.2 155.2 175.2 298.0 382.5 152.4 166.4 292.9 362.9 149.0 166.3 287.8 345.5 145.7 281.0 333.3 03 30 58 81 100.0% 80.4% 98.1% 33.3% 83.6% 95.8% 32.0% 84.8% 93.0% 31.4% 86.2% 90.3% 30.6% 87.6% 29.8% 0221 0421 2018 2015 2014 2013 2012 66.7 79.6 80.9 83.8 93.0 65125157.6 112.5 96.5 85.7 85.5 88.0 71.1 89.0 177 www.idate.org Region profiles 178 DigiWorld 2015 Region profiles Pacifi Asia/ Macro-economic data Macro-economic Subscribers Markets Digital TVhomes Pay-TV homes Broadband subscribers Cellular customers GDP (billion TV homes(millions) Population (millions) Fixed telephonelines Total Devices Internet services TV andvideoservices Telecom services IT services&solftware (billion Network equipment (millions) € ) as a%ofinhabitants € as a%ofTVhomes as a%ofTVhomes sa%o naiat 10 05 00 .%8.4% 9.5% 10.0% 10.5% 11.0% as a%ofinhabitants sa%o naiat 04 50 89 19 98.5% 91.9% 88.9% 85.0% 80.4% as a%ofinhabitants ) c 62641 0. 89382 5. 26 074.9 20458.3 18 903.8 17 509.2 16 236.4 9. 0. 9. 5. 4126.7 3750.7 3595.6 3408.2 3 192.3 7. 0. 4. 8. 4188.4 4083.0 4046.6 4 009.6 3 972.1 0. 8. 6. 3. 819.4 655.9 638.5 385.5 572.7 564.4 343.7 353.6 543.3 484.6 325.4 387.5 514.2 406.5 305.4 403.1 479.5 287.4 420.8 437.8 1. 3. 5. 6. 909.5 869.0 852.3 834.7 817.0 0221 0421 2018 2015 2014 2013 2012 2018 2015 2014 2013 2012 4. 5. 6. 8. 321.9 1410.6 282.6 405.3 1196.3 253.6 265.6 373.0 1122.6 206.4 1056.2 257.6 362.6 194.3 993.1 246.5 348.9 182.3 333.6 173.3 98 81 62 35 90.1% 72.1% 73.5% 65.9% 66.2% 63.7% 58.1% 61.6% 49.8% 58.7% 0221 0421 2018 2015 2014 2013 2012 59.8 88.2 91.8 .%76 .%84 9.2% 8.4% 8.0% 7.6% 7.2% 81153124129.8 112.4 75.2 94.0 105.3 98.1 54157171.8 128.3 115.7 106.2 95.4 99.6 America Latin Macro-economic data Macro-economic Subscribers Markets Digital TVhomes Pay-TV homes Broadband subscribers Cellular customers GDP (billion TV homes(millions) Population (millions) Fixed telephonelines Total Devices Internet services TV andvideoservices Telecom services IT services&solftware (billion Network equipment (millions) € ) as a%ofinhabitants € as a%ofTVhomes as a%ofTVhomes sa%o naiat 1.%151 1.%102 124.8% 120.2% 118.0% 115.1% 111.2% as a%ofinhabitants sa%o naiat 83 78 74 65 14.4% 16.5% 17.4% 17.8% 18.3% as a%ofinhabitants ) 4. 4. 6. 6. 9101.4 5567.7 4866.3 4 349.8 3 941.3 6. 9. 1. 3. 788.8 738.8 101.5 717.9 106.0 693.1 107.1 662.8 108.9 3. 4. 4. 5. 160.0 632.1 150.2 614.5 146.5 608.5 142.8 602.4 139.4 596.2 0221 0421 2018 2015 2014 2013 2012 2018 2015 2014 2013 2012 5. 7. 9. 0. 360.6 307.2 121.1 290.8 112.3 272.5 108.9 256.4 105.5 102.3 08 87 80 63 93.0% 47.9% 76.3% 42.3% 68.0% 40.2% 58.7% 37.1% 50.8% 70.8 34.2% 47.6 51.1 0221 0421 2018 2015 2014 2013 2012 66.5 32.6 27.4 19.2 .%92 .%1.%12.5% 10.4% 9.8% 9.2% 8.6% 8.5 83.8 52.9 55.3 69.5 36.9 29.7 19.7 11.2 96146148.8 114.6 99.6 58.9 59.4 72.7 41.1 31.7 22.4 14.2 63.5 63.8 74.0 45.4 34.4 23.5 17.5 91.0 76.6 79.3 79.3 60.3 45.3 25.8 28.8 179 www.idate.org Region profiles 180 DigiWorld 2015 Region profiles Middle-East Africa/ Macro-economic data Macro-economic Subscribers Markets Digital TVhomes Pay-TV homes Broadband subscribers Cellular customers GDP (billion TV homes(millions) Population (millions) Fixed telephonelines Total Devices Internet services TV andvideoservices Telecom services IT services&solftware (billion Network equipment (millions) € ) as a%ofinhabitants € as a%ofTVhomes as a%ofTVhomes sa%o naiat 38 78 26 68 94.7% 86.8% 82.6% 77.8% 73.8% as a%ofinhabitants sa%o naiat .%58 .%58 5.8% 5.8% 5.8% 5.8% 5.8% as a%ofinhabitants ) 2. 4. 8. 0. 5176.7 1495.3 4008.1 1402.9 3687.5 1372.7 3 441.8 1 342.9 3 221.7 1 313.6 6. 4. 3. 1. 1416.3 1218.1 1133.6 1045.4 969.2 3. 4. 4. 5. 179.4 155.1 148.4 142.3 136.6 0221 0421 2018 2015 2014 2013 2012 2018 2015 2014 2013 2012 9. 0. 2. 3. 284.6 238.6 224.2 206.9 193.4 49 05 58 12 87.0% 21.5% 71.2% 18.8% 65.8% 17.9% 60.5% 17.1% 54.9% 74.9 16.1% 22.0 15.1 75.9 0221 0421 2018 2015 2014 2013 2012 47.0 12.4 85.5 20.1 22.3 .%13 .%18 2.6% 1.8% 1.5% 1.3% 1.1% 6.1 86.1 24.3 17.8 77.6 48.0 12.9 92.3 21.9 23.5 8.3 76104156.1 110.4 97.6 26.6 21.0 79.3 76134118.3 54.1 103.4 13.5 97.6 24.0 24.5 10.5 29.2 24.7 81.2 57.0 14.0 26.2 24.8 13.0 38.5 39.2 86.9 69.2 15.0 35.2 25.7 21.1 181 www.idate.org 182 DigiWorld 2015 Glossary Glossary IT ISP IPTV IPO IP IoT IoO IMT ICT IaaS HTML5 HFC HetNets HDMI HD GSM GPS GDP GAFA FVOD FTTH FTTB FDD eCPM EBITDA DVD DVB DTT DTH DOCSIS CTO CRM CE CDN CapEx C2C BRIC B2C B2B AWS ARPU API 5G 4G 3G Information Technology Internet ServiceProvider Internet ProtocolTelevision/ TV surIP Initial PublicOffering Internet Protocol Internet ofThings Internet ofObjects International MobileTelecommunications Technologies Information andCommunication Infrastructure asaService HyperText MarkupLanguage5 Hybrid FiberCoaxial Heterogeneous Networks High Defi nition Multimedia Interface High Defi nition Communications Global SystemforMobile Global PositioningSystem Gross DomesticProduct Google, Apple,Facebook,Amazon Free Video onDemand Fiber To TheHome Fiber To TheBuilding Frequency DivisionDuplex Effective CostPerMille Depreciation, andAmortisation Earnings BeforeInterest,Taxes, Digital Versatile Disc Digital Video Broadcasting Digital Terrestrial Television Direct toHome Specifi cation Data OverCableServiceInterface Chief Technology Offi cer Customer RelationshipManagement Consumer Electronics Content DeliveryNetwork Capital Expenditure Consumer to Brazil, Russia,India,China Business toConsumer Business to Advanced WirelessServices Average RevenuePerUser Application ProgrammingInterface 5th (cellular)Generation 4th (cellular)Generation 3rd (cellular)Generation VRM VoLTE VoIP VOD VDSL UMTS UHF UHD UFB TV TDD TCP/IP TCO SVOD STB SMS SME SIM SDN SaaS RTB RFID R&D QR code PPP PC PaaS P2P OTT OS OpEx OLED OEM NFV NFC NAS NaaS MVNO MNO MEO M2M LTE LPWA LEO LED LCD Vendor RelationshipManagement Voice overLongTerm Evolution Voice overIP Video onDemand Very HighSpeedDigitalSubscriberLine System Universal MobileTelecommunications Ultra HighFrequency Ultra HighDefi nition Ultra-Fast Broadband Television/TV set Time DivisionDuplex Protocol Transmission ControlProtocol/Internet Total CostofOwnership Subscription Video onDemand Set-Top Box Short MessageService Small andMediumEnterprise Subscriber IdentityModule Software-DefiNetworking ned Software asaService Real-Time Bidding Radio FrequencyIdentifi cation Research andDevelopment Quick Responsecode Public-Private Partnership Personal Computer Platform asaService Peer to Over-The-Top Operating System Operating Expenditure Organic Light-EmittingDiode Original EquipmentManufacturer Network FunctionsVirtualisation Near FieldCommunication Network AttachedStorage Network asaService Mobile Virtual NetworkOperator Mobile NetworkOperator Medium EarthOrbit Machine to Long Term Evolution Low-Power, Wide-areanetwork Low EarthOrbit Light-Emitting Diode Liquid CrystalDisplay 183 www.idate.org Glossary 184 DigiWorld 2015 Index AT&T: Generalintro.,1.4,Intro. chap.2,2.1,4.6, Ascenta: FocusJune Arcor: FocusMarch Apple: Generalintro.,1.8,3.2,Intro.chap.5,5.6, American Tower: 2.3 América Móvil:Generalintro.,Chron.June,July, Dec. Amazon: Generalintro.,1.7,Intro.chap.3,3.1,3.2, Altice: Generalintro.,Intro.chap.2,Chron.Jan., Allstream: Chron.March All3Media: Generalintro. Aliyun: FocusSept. AliWangwang: FocusSept. Alipay: FocusSept. Alibaba: 1.7,Intro.chap.5,5.4,5.5,7.5,7.6, Aldebaran: Chron.June Alcatel-Lucent: 1.3,2.3,4.6,Chron.June Akamai: Chron.Feb. Airbnb: Generalintro.,1.7,7.6 Aereo: Chron.April,June Adidas: 6.5 Activision Blizzard:3.5 Activision: 6.6 ABC: Chron.June 495 Productions:Generalintro. 21st CenturyFox:Chron.May, June,July, Aug., 3: 2.3,Chron.July Nov., Focus Aug. 6.5, 7.1,Chron.May, June, July, Oct., Sept., Oct.,Nov., FocusFeb.,May March, April,May, June,July, Aug., chap. 7,7.1,7.3,7.4,Chron.Feb., Intro. chap.6,6.1,6.3,6.5, May, Oct. June, Aug.,Oct.,Nov., Dec.,FocusFeb., 5.5, 5.6,Intro.chap.7,7.5,Chron.April, 3.3, 4.1,4.3,4.5,Intro.chap.5,5.1, Focus July April, June,July, Oct.,Nov., Dec., Chron. April,Sept.,FocusSept. Focus May Index Deutsche Telekabel: Chron. March Dell: 1.3,4.5 Deezer: FocusNov. DeepMind: Chron.Jan. Daum: 1.7,Intro.chap.5,Chron.May Dalian Wanda Group: FocusSept. CSR: Chron.Oct. CORE Media:Generalintro. Comcast: Generalintro.,Intro.chap.2,Chron.Feb., Cogent: Chron.July Cnova: 5.5 CNN: Chron.June CNES: FocusJune Claro: Chron.Dec. Cisco: 1.3,4.6,Chron.March,Aug. Ciena: Chron.Dec. Chinavasion: FocusSept. China Unicom:1.3,Chron.Nov. China Telecom: 1.3 China Mobile:1.3,1.4 Cdiscount: 5.5 CBS: Chron.June Casino: 5.5 Cap Gemini:7.3,Chron.April Canopy: Chron.March CANALPLAY: 3.1 Cablevision: 2.4 Cable WirelessCommunications:Chron.April Cable &Wireless:Generalintro.,2.4,Chron.Nov., Buyster: 7.3 Bull: Chron.Aug. BT: Generalintro.,Intro.chap.2,2.4,Chron.Nov., BSkyB: Chron.May, July, FocusMay BrightRoll: Chron.Nov. Bouygues Telecom: Chron.April,July, Oct., BlackBerry: Chron.Nov. BlaBlaCar: 7.6 BesTV NewMedia:Chron.May Bell Aliant:Chron.July Belgacom: Chron.Feb. Beats Electronics:Generalintro.,Chron.May, BCE: Chron.Feb.,July Banco EspíritoSanto:Chron.Sept. Baidu: 1.7,Intro.chap.5,5.1,FocusSept. Axel Springer:Chron.Nov., Dec. Axciom: 4.1 Axalto: Chron.Aug. Avis: 7.6 AutoNavi: FocusSept. Atos: Chron.March,April,Aug.,Dec. April, June,July, Oct., FocusJan.,Aug. Focus Dec. Dec., FocusMay, July, Dec. Focus Dec. Focus Feb. Google: Generalintro., 1.7,3.6,4.1,4.3, GlobalFoundries: Chron.Oct. GlobalCollect: Chron.July Global: FocusSept. Get: Chron.Sept. General Motors:7.1 Gemalto: Chron.Aug. Garmin: 6.5 Frontier: Generalintro. Free: Generalintro.,Chron.July, Oct.,FocusAug. Flurry: Chron.July Flickr: FocusFeb. Fitbit: 6.5 Fidelity: FocusJune Facebook: Generalintro.,1.7,3.5,4.1,4.5, Eyeworks: Generalintro. ExxonMobil: Chron.Feb.,Nov. Experian: 4.1 Expedia: 7.6 Eurosport: Chron.Jan.,FocusMay Eucalyptus: Chron.Sept. Etisalat: Chron.May Ericsson: 1.3,2.3,Chron.Jan.,Nov. E-Plus: Chron.June,July, Aug.,FocusJuly Endemol: Generalintro. Elon Musk:FocusJune Ello: Generalintro. Electronic Arts(EA):3.5 EE (anciennementEverythingEverywhere): eBay: 5.1,7.6,Chron.Sept.,FocusFeb. Ebates: Intro.chap.5,FocusSept. eAccess: Chron.March,May dunnhumby: 7.5 DuckDuckGo: Generalintro.,Intro.chap.5 Dropbox: 1.7 Drillisch: Generalintro.,Chron.June,FocusJuly DreamWorks: Chron.Sept. Distribuidora deTelevision Digital:Chron.June,July Disney: Chron.March DISH Network:2.5,FocusAug. Discovery Communications:Generalintro., DirecTV: Generalintro.,Intro.chap.2,Chron.May, Digital Classifi eds: Chron.Dec. Deutsche Telekom: Generalintro.,1.4,2.4,4.6, 5.6, Intro.chap.6, 6.1,6.3,6.5, 4.5, Intro.chap.5, 5.1,5.2,5.3, Focus Feb.,June,Sept. Chron. Feb.,March,June,Oct.,Dec., Intro. chap.5,5.1,5.2,5.4,5.5,7.3, Dec. Chron. Jan.,Oct.,Nov., Dec.,Focus July, General intro.,Intro.chap.2,2.3,2.4, Chron. Jan.,FocusMay Oct., FocusAug. Dec., FocusMay, Aug.,Dec. Chron. Jan.,Feb.,May, July, Aug.,Oct., LINE: 1.7,5.4 Linden Lab:3.3 Liberty Global:Generalintro.,2.4,Chron. Jan.,March, LG: 6.2,Chron.Nov. Level 3:Chron.June,July Les ÉditionsVolumiques: 6.6 Lenovo: Generalintro.,1.3,1.8,Chron. Jan. Lego: 6.6 Leftfi eld Entertainment: Generalintro. Laiwang: FocusSept. Lagardère: Chron.Nov. KPN: Generalintro.,Chron.July, Aug.,Nov., Kobo: Intro.chap.5 King DigitalEntertainment:Chron.March Kickstarter: 7.6 Kakao: Chron.May Kabel Deutschland:Generalintro.,2.4,Chron. Kabel BW: Chron.March Juniper: 4.6 JCDecaux: Chron.Dec. Jazztel: 2.4,Chron.Sept.,Dec.,FocusMarch,Dec. Jawbone: 6.5 Iusacell: Generalintro.,Chron.Nov. ITV: Generalintro. International Rectifi er: Chron.Aug. Intel: Chron.June Instagram: 5.2 Ingenico: Chron.July Infi neon: Chron.Aug.,Sept. Indus Towers: 2.3 Iliad: Generalintro.,Chron.April,July, Aug.,Oct., IBM: Generalintro.,1.3,2.3,4.3,4.5,Chron.Jan., Hutchison Whampoa:Chron.May, July Hutchison: Generalintro.,2.4,Chron.May, Focus Huawei: Generalintro.,1.3,2.3,4.6,Chron.Oct. HP: 1.3,2.3,4.5,Chron.Sept.,Oct. HIS: Chron.Sept. Hellas Online:Generalintro.,Chron.Aug. HBO: Generalintro.,Chron.April,June Hasbro: 6.6 HarperCollins: FocusOct. Half Yard: Generalintro. Hachette: FocusOct.,Chron.Nov. GVT: Chron.Aug.,Sept. Sept., Oct.,Nov., FocusMarch, Dec. Focus July Dec. March, Aug.,Nov., FocusMarch,July, Dec., FocusAug. March, April,July, Oct. July, Dec. June, Nov. June, Aug.,Nov., Dec.,FocusFeb.,April, Chron. Jan.,Feb.,March,April,May, Intro. chap.7,7.1,7.3,7.4,7.5,7.6, 185 www.idate.org Index 186 DigiWorld 2015 Index ONO: Generalintro., 2.4,Chron.March,Aug.,Nov., OneWeb: Focus June Omnicom: Chron.Jan.,May, Nov. Omea Telecom: Chron.June Oi: Chron.Sept.,Nov., Dec. Oculus VR:Generalintro.,3.5.Chron. March, O3B Networks:FocusJune O2: Generalintro.,2.3,2.4,4.2,Chron.May, June, Numericable: Generalintro.,Intro.chap.2,2.4, Nukotoys: 6.6 NTT DOCOMO:Chron.Oct. NTT: Intro.chap.1,1.4,4.6 Nokia: Generalintro.,1.3,2.3,5.6,Chron.Feb., Nintendo: 3.5 Nike: 6.5 NHN: 1.7 Nextel: Generalintro. Netfl ix: Generalintro.,1.7,2.6,Intro.chap.3, Nest Labs:Generalintro.,Intro.chap.5,5.6, NBC: Chron.June,FocusJan. Naver: Intro.chap.5 NaturalMotion: Chron.Jan. MTN: Chron.Sept. Mozilla: Chron.Nov. Motorola: Generalintro.,Chron.Jan.,April, MoPub: 5.1 Monaco Telecom: Chron.April Mojang: Chron.Sept. Mobility: Chron.Jan. Microsoft: Generalintro.,3.5,5.4,5.6,Chron. MICROS Systems:Chron.June Microchip Technology: Chron.Oct. Mediaset: Chron.June,July, FocusMay Media: FocusDec. MBNL: 2.3 maxdome: 3.2 Mattel: 6.6 Maroc Telecom: Chron.May Maker Studios:Chron.March Macmillan: FocusOct. Lyft: 7.6,FocusSept. LOVEFiLM: 3.2,FocusFeb. LinkedIn: 5.2 Focus March,July, Dec. Focus Feb. July, Nov., FocusJuly, Dec. Nov., FocusMarch,July, Dec. Chron. Jan.,April,May, June,July, Oct., April, July, FocusFeb. Focus Jan.,May Feb., April,May, June,July, Sept.,Oct., 3.1, 3.2,Intro.chap.5,6.3,Chron. Intro. chap.6,Chron.Jan.,FocusFeb. Focus Feb. Focus Feb. Feb., April,May, July, Aug.,Sept.,Nov., Showtime: Intro.chap. 3 Shine Group:General intro. Shanghai Media:Chron.May SFR: Generalintro.,Intro.chap.2,2.4, Chron.Feb., Scribd: Intro.chap.3,3.3,FocusOct. Scratch Wireless:2.4 Sapient: Chron.Nov. SAP: Chron.March Samsung: Generalintro.,1.8,3.5,Intro.chap.6, Salesforce: Generalintro. SafeNet: Chron.Aug. Runtastic: 5.6,6.5 RunKeeper: 5.6,6.5 RTL: Generalintro. Roku: 6.3 Rogers Communication:Chron.Feb. Rockstar: Chron.Nov. Rocket Internet:5.5 Republic Wireless:2.4 Renesas: Chron.Sept. Reggefi ber: Chron.Nov. Reggeborgh: Chron.Nov. Rakuten: Generalintro.,1.7,Intro.chap.5,5.4,5.5, Qzone: 5.2 Qualcomm: Chron.Oct.,FocusJune QQ: FocusSept. Pulse: 5.2 Publicis: Chron.Jan.,May, Nov. Pryte: Chron.June ProSiebenSat1: Generalintro. Prisa: Chron.June PrimaCom: Chron.March PriceMinister: FocusSept. Portugal Telecom: Generalintro.,Chron.Sept.,Nov., Polar: 6.5 Philips: Chron.Sept. PayPal: Intro.chap.7,7.3,Chron.Sept.,FocusFeb. Paylib: 7.3 Pandora: FocusNov. Ozon: 5.5 Oyster: Intro.chap.3,3.3,FocusOct. OVH: 4.5 OTE: Chron.Feb. Orkut: Chron.June Orange: Generalintro.,2.3,2.4,3.2,5.4, Oracle: Chron.June OpenStreetMap: 7.6 Focus Feb.,July, Dec. April, May, June,July, Oct.,Nov., Dec., April, May, Aug.,Sept.,Nov. 6.1, 6.5,7.4,Chron.Jan.,Feb.,March, 7.5, Chron.Feb.,Oct.,FocusSept. Dec. Focus March,Dec. Chron. Jan.,April,July, Sept.,Oct.,Dec., Titan Aerospace: FocusJune Timex: 6.5 Time Warner Cable:Generalintro.,Intro.chap.2, Time Warner: Chron.April,June,Aug. TIM Participações:Chron.Dec. Three: FocusDec. TF1: Chron.Jan. Tesco: 7.5 Tencent: Generalintro., 1.7,3.5,Intro.chap.5, Telus: Chron.Feb. Telstra: Chron.March Telindus: Chron.Feb. TeliaSonera: Generalintro., Chron.July, Dec., Telephone World DigitalGroup:Chron.May Telenor: Generalintro., Chron.July, Dec. Telekom: Chron.July Telefónica: Generalintro.,1.3,1.4,2.4,4.6, Telecom Italia:Chron.July, Aug.,Sept.,Dec. Tele2: Generalintro.,Chron.July, Dec. TDF: Chron.Nov. TDC: Chron.Sept.,Dec. TaskRabbit: 7.6 Taobao: FocusSept. Tango: 5.4,FocusSept. TalkTalk: FocusDec. Suunto: 6.5 Sun Microsystems:Chron.June Steria: Chron.April Starbucks: 7.3 Sprint: Generalintro.,1.3,Intro.chap.2, Spotify: 1.7,3.4,Intro.chap.5,FocusNov. SpaceX: FocusJune Sopra: Chron.April Sophisti: 6.6 Sony: 3.5,6.5,Chron.Feb. SoftBank: Chron.March,May, June,Sept., SNCF: 7.6 Snapchat: 5.2,FocusFeb. Slovak Telekom: Chron.Oct. Skype: 5.4,Chron.Feb.,FocusFeb. Skybox Imaging:Chron.June,FocusJune Sky: Chron.May, FocusMay, Dec. SingPost: FocusSept. Sina: Generalintro. Simon &Schuster:FocusOct. SIGFOX: 5.6 Siemens: Chron.Aug. Chron. Feb.,Oct. 5.2, 5.4,FocusSept. Focus Dec. Dec., FocusJuly, Dec. Chron. May, June,July, Aug.,Sept.,Nov., Chron. May, Oct.,FocusAug. Focus Aug. Zynga: Chron.Jan. ZTE: Chron.Oct. Zipcar: 7.6 Ziggo: Chron.Jan.,Sept.,Oct.,Nov. Zebra Technologies: Chron.April Zalando: 5.5 YouTube: Chron.March,June,Nov., Focus Feb.,Nov. Youku Tudou: Chron.April,FocusSept. Youboox: 3.3 Yoigo: FocusDec. Yahoo!: Chron.March,May, July, Nov., FocusFeb. Xiaomi: Generalintro.,1.8,Chron.Dec.,FocusSept. Xerox: Chron.Dec. Withings: 6.5 Wipro: Chron.March Wind Mobile:Chron.Sept. Willcom: Chron.March Wikipedia: 7.6 WhatsApp: Generalintro.,1.7,Intro.chap.5,5.4, Weibo: Generalintro.,Chron.April WeChat: 5.4,FocusSept. Warner Bros.:Generalintro.,Chron.June Walmart: 7.5 VUDU: 7.5 Vodafone: Generalintro.,intrro.Chap.2,2.3,2.4, Vivendi: Generalintro.,Chron.Feb.,April,May, June, Virgin Mobile:Chron.May, June,Dec. Virgin Media:Chron.Nov. Virgin: FocusJune,Dec. VimpelCom: Chron.Sept. Videoland: 3.2 Viber Media:Generalintro.,Intro.chap.5,5.4, VG Media:Chron.June Verizon Wireless:Generalintro.,2.4,Chron.Jan. Verizon: Generalintro.,1.4,2.1,Chron.Jan.,April, Venmo: 7.6 UPC: Chron.Jan.,Oct.,Nov. Unitymedia: Chron.March,Nov. UCWeb: FocusSept. Uber: Generalintro.,1.7,7.6,Chron.Dec., Twitter: Intro.chap.5,5.1,5.2,Chron.Sept. Twitch: Chron.Aug. tw telecom:Chron.June T-Mobile: Generalintro.,Intro.chap.2,2.3,2.4, Tmall: FocusSept. Chron. Feb.,Oct.,FocusFeb. Focus March,July, Dec. Chron. Feb.,March,Aug.,Nov., Dec., Aug., Sept.,Nov. Chron. Feb.,Oct. June, July, Dec.,FocusJan.,Aug. Focus Sept. Focus July, Aug. Chron. Jan.,May, July, Aug.,Oct., 187 www.idate.org Index IDATE SMART THINKING THE DIGITAL ECONOMY Since 1977, IDATE’s teams of specialists have earned a global reputation for inde- pendent, high quality analysis of digital industry markets, through three closely linked areas of activity:

• DigiWorld Institute, a European think tank with nearly 50 members, and an annual programme that includes monthly Club meetings in Brussels, London and Paris, a series of high-level events such as DigiWorld Future and the DigiWorld Summit, along with fl agship publications, the DigiWorld Yearbook and COMMUNICATIONS & STRATEGIES, and Collaborative Research Programmes.

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Our research catalogue is broken down into four streams that cover ten specifi c categories. Each provides insights into key markets through a comprehensive set of deliverables: data- sets, reports and slide decks.

Future Networks Telecom Strategies Media Strategies Internet Economics Wireline Telecom Television Connected Objects Players & Markets & Video OTT

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Titles from our catalogue include:

• World FTTx market • World telecom • World TV & video • M2M • World LTE market players & markets services market • Wearables • Public safety • Telecom consolidation • Netfl ix in Europe and its verticals spectrum & systems in Europe • Audiovisual industry • Connected cars • Network optimisation • Increasing ARPU going global • Real-Time Bidding technologies • World OTT market • Cloud TV • World online • Telco cloud • The Future of Internet • World video games advertising • Telcos & digital market • Data Monetisation services strategies • Serious gaming

Information: Isabel Jimenez - +33 (0) 467 144 404 – [email protected] COMMUNICATIONS & STRATEGIES THE DIGITAL ECONOMY AS SEEN BY THE WORLD'S TOP ACADEMICS COMMUNICATIONS & STRATEGIES (The DigiWorld Economic Journal) is an interna- tional quarterly journal that publishes peer reviewed papers, and offers a forum for the fi nest socioeconomic analyses of the telecoms, internet and media sectors.

With more than 20 years’ experience, and the support of a prestigious International Editorial Board, COMMUNICATIONS & STRATEGIES became a top reference journal in the fi elds of public policy, industrial organisation and corporate strategies. It has the CNRS seal of approval, and is listed on a large number of academic databases around the world.

Published in English, each issue delivers a topical Dossier that includes several academic papers, supplemented with interviews of industrialists and policy-makers. In addition to the Dossier, we regularly publish a selection of papers that cover compelling innovations. The "Features" rubric contains short papers offering factual analyses of recent developments in the industry's key issues, as well as book reviews.

Latest issues Upcoming • No. 94 (2nd Q. 2014) • No. 98 (2nd Q. 2015) Video game business models Ex ante regulation in and monetisation e-communications: towards a new balance of symmetric • No. 95 (3rd Q. 2014) and SMP remedies? The future of patents in communication technologies • No. 99 (3rd Q. 2015) The Economics of Platform • No. 96 (4th Q. 2014) Markets: Competition Challenges and prospects or Regulation? of the smart city • No. 97 (1st Q. 2015) • No. 100 (4th Q. 2015) Big data: Economic, business Special Jubilee Issue and policy challenges Digital innovation, productivity and growth

Information and subscription: Sophie Nigon www.comstrat.org Tel : +33 (4) 67 14 44 16 – [email protected] Digital-First ICT players vs. the new disrupters

37th international conference on the future of the digital economy Every year, the DigiWorld Summit is the rendez-vous of reference for digital industry play- ers. Kicking off with IDATE experts’ analysis, each sessions allows industry luminaries to trade views and work together on unravelling today’s issues, and the challenges that lie ahead for the digital world. Europe’s fl agship event for understanding upcoming disruptions and their impact on the telecom, internet and media markets. Key actors from the digital sectors Debates & Networking • Analysis from IDATE experts • Plenary sessions devoted to the central • Views of top-level executives and experts, theme, with high level keynotes and from international leaders and start-ups roundtables • Candid input from public policy makers • Multiple associated events during and regulators DigiWorld Week: video games, the Internet • Original contributions from internationally of Things, Future Networks, Future TV… renowned economists • Networking (and fun!) events: receptions, nightcaps, meetings… DigiWorld Week For its second edition, DigiWorld Week – an entire week dedicated to digital issues and innova- tion – will take place from 14 to 22 November. An opportunity to dig deeper into the chosen themes: connected health, start-ups, MOOC, 3D printing and more, thanks to an exciting, jam-packed programme from our partners: conferences, workshops, hackathons, exhibitions...

2 000 attendees 150 speakers 100 partners 25 nationalities

Information, programme & sponsoring: Christine Barre Tel: +33 (0) 467 144 447 – [email protected] Printed in may 2015 SEP, Nîmes Dépôt légal mai 2015