November 2011

STUDY: 4G + Cloud = Innovation & Profits?

Mobile Network Operator Report

BY:
Bill Lesieur

410 rue des Recollets, Suite 301, Montreal, QC H2Y 1W2 CANADA

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Maravedis 2011 All Rights Reserved

TableofContents
Study Overview ........................................................................................................................................... 4
Questions Addressed in the Study ...................................................................................................... 4
Key Findings and Summary Points ..................................................................................................... 5
Business Drivers in Offering Mobile Cloud Services ......................................................... 5
Business Challenges in Offering Mobile Cloud Services .................................................. 5
Cloud Services, Multiple Devices and Portability ............................................................... 5
Enterprise Mobile Cloud Services ............................................................................................. 6
Data Center and IT Plans ............................................................................................................... 6
Introduction ................................................................................................................................................. 7
Worldwide 4G Launch Status............................................................................................................. 10
Plans for Branded 4G Cloud Services ............................................................................................. 11
Enterprise Market ................................................................................................................................... 16
Operator Profile: A&T Innovation Programs ........................................................................ 20
Enterprise Verticals and Specialized Clouds ............................................................................... 21
Operator Profile: KDDI Targets Verticals with Cloud Technology .............................. 22
Business Drivers ...................................................................................................................................... 24
Business Challenges ............................................................................................................................... 25
OverTheTop Competition ................................................................................................................. 29
APP Stores .................................................................................................................................................. 29
The FourScreen World: Greenfield Operator Profile ....................................................... 32
WiMAX Operator Profile: YTL Communications (Malaysia) ..................................... 32
APIs and Developer Ecosystems ....................................................................................................... 34
CoBranding and Private Labeling ................................................................................................... 36
Wholesale Mobile Cloud Services .................................................................................................... 37
Multiple Devices and Portability ...................................................................................................... 39
Cloud Phones ............................................................................................................................................. 40
Data Center and IT Plans...................................................................................................................... 42
IT Systems Management ...................................................................................................................... 45
ABOUT MARAVEDIS ........................................................................................................................... 47

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TableofFigures

Figure 1: Status of 4G deployment ................................................................................................. 10
Figure 2: Global LTE Forecast 20102016 .................................................................................. 11
Figure 3: Global 4G Subscriber Forecast ...................................................................................... 11
Figure 4: Plans for Offering Branded 4G Mobile Cloud Services ....................................... 12
Figure 5: Plans for offering branded entertainment services ............................................ 14
Figure 6: Mobile Cloud Home Services ......................................................................................... 15
Figure 7: Enterprise Market and Business Users ..................................................................... 16
Figure 8: Mobile Cloud Plans for the Enterprise Market and Business Users ............. 17
Figure 9: Business Drivers in Offering Branded Mobile Cloud Services ........................ 24
Figure 10: Challenges in offering mobile cloud services ...................................................... 26
Figure 11: Top Challenges in Offering Mobile Cloud Services ............................................ 27
Figure 12: Importance of branded mobile cloud services in competing with OTT
players .......................................................................................................................................................... 29
Figure 13: App Store Plans................................................................................................................ 30
Figure 14: APIs and developer ecosystem plans ...................................................................... 34
Figure 15: Storefront Plans ................................................................................................................ 36
Figure 16: Plans to collaborate with cloud application providers ................................... 37
Figure 17: Plans for wholesale mobile cloud services ........................................................... 38
Figure 18: Plans to support multiple devices and portability of applications,
services, and content ............................................................................................................................. 39
Figure 19: Role of 4G cloud phones................................................................................................ 41
Figure 20: Data center and IT infrastructure plans ................................................................ 42
Figure 21: OSS/BSS and SDP plans ................................................................................................. 44
Figure 22: IT systems management vendor plans ................................................................... 46

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Study Overview

The focus of this study is how 4G wireless combined with cloud computing will
drive a new wave of innovation and ROI for operator content, services and
applications. The study is a result of interviews and online surveys with mobile
operators worldwide, and interviews with IT, software and telecom vendors on
solutions and capabilities for mobile cloud.

Questions Addressed in the Study

How are mobile operators aligning their 4G network and mobile cloud plans?
What branded mobile cloud services are operators prioritizing?
What additional services are operators prioritizing for business users?
What is the importance of the enterprise market and business users to 4G ROI
and competitive advantage?
What are the key vertical markets for mobile cloud technology?
What are the primary business drivers and challenges for operators in offering
branded mobile cloud services?
How do the challenges evolve from the planning through launch phases?
What are the opportunities and threats of the OverTheTop (OTT) players to
mobile operators?
What are the opportunities that mobile operators have in creating differentiated
mobile cloud services?
What is the impact of multidevice support and portability of applications,
content and services in the 4G environment?
What app stores do operators plan to use in their 4G network?
Do operators plan to create their own branded app stores?
What is the status of the transformation of data centers, IT infrastructure, and
OSS/BSS environments to support mobile cloud services?
What are the plans for operators to partner with IT systems management
vendors to build out cloud infrastructures?
Do operators plan to support open APIs and create developer ecosystems?
What is the outlook for wholesale mobile cloud services?
What role will cloud phones plan in 4G networks?

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Key Findings and Summary Points

Business Drivers in Offering Mobile Cloud Services
The predominant business driver in offering branded mobile services is to
improve ARPU, followed by other main drivers of improving margins and
reducing churn.

While much of the industry and media attention is on the OverTheTop

(OTT) players, the survey results did not identify OTT as the main driver or
challenge for operators offering mobile cloud services in their 4G network.

Many operators are embracing the adoption of Apple iPhone and Google
Android devices, so many operators are viewing the OTT players as an
opportunistic move to attract and retain subscribers based on the devices, so
operators are trying to balance the coopetition (cooperative competition)
with Apple and Google.

Business Challenges in Offering Mobile Cloud Services

The top challenges identified in offering cloud services were strategy,
investment, and business model, followed closely by network performance.

Reflecting the strategy challenge, most operators are also faced with
organizational challenges of bringing together their IT and network groups
to work on cloud strategies and implementations.

Cloud Services, Multiple Devices and Portability

As for planned offerings, social networking/messaging was the top ranked
mobile cloud services. The top ranking is not surprising as social networking
is often viewed as the glue to bring together a variety of communication,
collaboration, content, presence, location, navigation, entertainment,
shopping, and gaming services.

One of the biggest factors impacting the user experience in upcoming years
will be the support of multiple devices and the portability of applications,
services and content among these devices. Support of multiple devices will

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also fuel the debate that walled app stores are constraining portability
among devices from different manufacturers.

Mobile cloud computing brings together opportunities to provide contextual

aware and dynamic user experiences on mobile devices in conjunction with
machinetomachine (M2M), and sensoraware environments.

Enterprise Mobile Cloud Services

Many operators and their vendors are focusing their mobile cloud efforts on
the enterprise business market, which is expected to represent the largest
and more profitable revenue opportunity for mobile operators. Although
ranked in the middle of the response on offerings, mobile PBX services is
expected to be one of the biggest opportunities for operators to provide
differentiated services.

While there are numerous vertical opportunities for mobile operators to

target, the key areas include industries that are communicationintensive
and/or positioned for transformation through innovative telecom and
mobility solutions. Key verticals for mobile cloud include health, utilities,
government, and transport.

Data Center and IT Plans

The majority of the respondents are in the early phases of strategy/planning
and architecture/design in regard to transforming data centers and IT
infrastructure to support mobile cloud services.

The majority of respondents indicated they are not sure yet in regard to
selecting a systems management vendor to build out their cloud
infrastructure.

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