Trends - Global Technology Media & Telecommunications

industry
First update
Contents

01. Executive Summary 04. Connected devices

Insights and takeaways on the key trends
02. 5G
Market Scenario
Arrival of the network – UK and other regions
5G trials, rollout and future in the UK
03. Artificial Intelligence
Rising adoption
From expert to everywhere
Role in the UK market
Rising trend of smart speakers
Increasing innovation for consumers
Connected devices and IoT in UK telecom
05. Content- TV, eSports and Media
WIP
WIP
06. Digital business models
WIP
07. Cyber security- Blockchain
WIP

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TMT trends- Executive Summary WIP
Insight Takeaway
1 • In 2018, 72 operators started testing 5G. However, only 25 operators are expected to
 5G adoption curve is likely to enhance in the next 12-24 months however, it it will likely
launch 5G services by 2019 with another 26 launching it in 2020.
take years for 5G to replicate 4G’s marketplace dominance. Multiple telecom operators are
5G ‒ Globally, Europe, North America and Japan are the first to have progressed over 5G likely to move towards the solution due to speed, latency, penetration, and capacity
network field trials whereas One Plus and LG to trial smartphones
 Smartphone manufacturers and chipset suppliers are expected to deliver the first 5G-
 In the UK, 5G solution would be deployed in the busiest cities of the region with enabled mobile phones by mid-2019
focus on mobile, modems and fixed-wireless access (FWA) devices for adoption
2 • Initially, AI’s benefits have accrued to technology companies with strong IT infrastructure  Firms are using three key aspects to develop their AI solution. These include:
Artificial and costly data science skills
o Finding a solution to an internal challenge or opportunity
Intelligence – However, since 2018, adoption of AI is being driven by usage of cloud-based AI software
o Perfecting the solution at scale within the company
and services. This in turn has enhanced industry investments
(AI)  However, the UK region has been an early adopter (including BT-EE, Vodafone, Sky,
o Launching a service that quickly attracts mass adoption
City Fibre and others) through investments and skill assessment workshops  Partnership with start-ups (in aid to reduce AI skill gap) is expected to be a key trend in 2019
3 • The industry for smart speakers-internet connected speakers with integrated digital  Telecom providers have started using IoT to enhance revenue across consumer segment
Connected assistants- was worth £4.0 bn in 2018, selling 164 mn units at an average price of £34.
– The UK is expected to be the third largest smart speaker market in 2019, after the
Devices US and China. The region is expected to represent 8% of all shipments in 2019
• BT-EE, Vodafone and Three UK have been using IoT for their enterprise segments

4
Content- TV,
eSports and
Media

5
Digital business
models

6
Cyber security-
Blockchain 3
3
5G: Market scenario
In 2019, launch of 5G services is expected to provide users with faster speed, lower latency and higher capacity (spectrum capacity of 700MHz, 3.4-
3.8MHz and 24.25-27.5 MHz) to carry multiple connections simultaneously. Standards for 5G would be fully defined until the 2019 World
Radiocommunications Conference (WRC-19)

5G network arrives: augment and enhance Percentage of data mobile-only homes, 20171
existing LTE networks Speeds
up to
100
GBps United United
The 1st year of 5G in 2019 will be similar to Canada Spain France Turkey Russia
States Kingdom
the 1st year of 4G in 2010 24% 15% 9% 27% 16%
19% 5%

1000
times greater lower faster
faster capacity latency speed
than 4G
2019

1 million each As 4G
dominates 5G
20 begins to
5G emerge
phones Handset
vendors 60%
5G hotspots, 40%
25 by 2019
modems 20%
operators 0% Latency -
5G fixed launch 5G 2019 2023 1ms, 50
wireless access network times
better
than 4G

Note: 1) Data for percentage of data mobile only homes, 2017 is expected to be similar for 2018 4
Source: Deloitte TMT Predictions 2019; 5G vs 4G 4
5G: Arrival of the network – UK and other regions
5G is expected to be launched in mid-2019, however it will likely take years for 5G to replicate 4G’s marketplace dominance, in the same way it took
several years for 4G to replace 3G. Telecom operators across Europe, North America and Japan are the first to have progressed over 5G network field trials

Rising commercial field trials

In 2018, various operators in North America, Europe and Japan started field trials for 5G rollout. By 2019, 25 operators are expected to launch 5G services with another 26 operators launching
1 the service in 2020. 5G trials have indicated the following speed and latency records:
‐ The record for 5G lab transmission has been 1 terabit per second and the record for field trial stands at 35Gbps
‐ The speed for 5G is expected to be slower than 35Gbps with expected peak speed of 1Gbps in ideal conditions. 5G is expected to have lower latency as compared to 4G networks indicating
reduction in time taken for data transmission to support IoT enabled applications such as autonomous vehicles, performing remote surgery and haptic feedback

Increased investment in denser fibre network

2 Operators have pre-loaded spending in denser fibre networks (in anticipation of 5G networks in future) by purchasing 5G-ready radio hardware that can be upgraded to 5G software upgrades in
future.
‐ In 2018, UK government emphasized its plans for full fibre broadband across 15 mn premises as 5G is expected to provide a more cost-effective way of providing ultra-fast connectivity to
homes and businesses

Early Spectrum auctions

3 Early spectrum auctions for 5G include Australia (3575–3700 MHz), the UAE (3300–3800 MHz), Finland (3410–3800 MHz), Italy (3600–3800 MHz and 26 GHz), Ireland (3600 MHz), Latvia (3400–
3450 MHz and 3650–3700 MHz), Spain (3600–3800 MHz), South Korea (3420–3700 MHz and 26.5–28.9 GHz), Mexico (2500–2690 MHz) and the UK (3400 MHz) in 20182
‐ 17 countries have formally announced plans to auction 5G spectrum between 2018 and the end of 2020 and 13 have planned spectrum allocations in bands that can potentially be used for
5G
‐ In the short term, 5G will be used majorly for mobile connectivity through smartphones, modems and hotspots and, broadband connectivity

5
Source: 1) Deliotte TMT Predictions-2019 2) Early spectrum auctions 3) Deloitte UK TMT trends report 4) Key Takeaway 5
5G trials, rollout and future in the UK
UK mobile subscribers are expected to witness 5G availability in major areas starting in mid-2019. Companies such as BT-EE, Vodafone, Three UK are
expected to deploy the solution for smart cities, augmented and virtual reality, vehicle and mobile communication
Area of coverage
► EE announced its plans to launch 5G services across London, Birmingham, Cardiff, Belfast,
Manchester, and Edinburgh first, followed by Bristol, Glasgow, Coventry, Hull, Leicester,
Leeds, Liverpool, Newcastle, Nottingham and Sheffield in 2019.
► The first 1,500 sites for deployment account for 15% of the UK’s entire population 1
► Vodafone UK plans to launch 5G in Cornwall and the Lake District in mid-2019, along with
trials in Birmingham, Bristol, Liverpool, Cardiff, Glasgow, London and Manchester
► Three UK to begin 5G trials after mid- 2019 starting in Central London followed by other sites
in the busiest areas of the UK. To provide 5G as a residential broadband alternative to fiber,
cable and copper, Three UK partners with SSE Telecoms and Huawei for network rollout
► In December 2018, City Fibre and Arqiva announced 5G small cell pilot trial in the London
Borough of Hammersmith and Fulham
► University of Surrey in the UK has established a 5G innovation centre (5GIC) that is being used
as a testbed wherein researchers and partners test and develop 5G wireless solutions for both
urban and rural network
Note:1) Digital Catapult is a digital technology innovation centre based in the UK; Additional services: EE is also planning to provide to its customers the OnePlus 5G smartphone and a 5G home router
Source: 1) BT-EE area; 2) BT- Annual report 2018; 3) Three UK annual report ; 4) Arqiva and City Fibre; 5) University of Surrey- 5G network trial
Network trial
► In April 2018, BT secured 40MHz of 3.4GHz spectrum at a cost of £304 mn for building 5G
mobile network. In November 2018, EE conducted the first 5G trial tests.
► The trial network had included 5G NR and LTE co-site deployments, separating uplink /downlink
onto different bands and attained speeds of 970Mbps across 4G in Wembley Stadium using a
Huawei Mate 10 Pro device2
► In 2017, Vodafone UK tested 5G in car-to-car communications. In 2018, the firm announced UK's
first 5G holographic phone call and in October, 2018, started a 5G trial in Salford and Greater
Manchester, further installing antennae under manhole covers to pave the way for 5G in
December 2018. During the year, Vodafone also acquired 3.4GHz spectrum in 50MHz band
► As a part of Three’s 5G network preparations, the firm secured 20 MHz spectrum for the roll-out
of cell site technology across urban areas; deployed cloud based core network in data centres
with a capacity of 1.2TB/s and an infrastructure spend of £2 bn in 5G in 2018
► During the period, Three also demoed 5G home broadband in London using Huawei routers,
obtaining download speeds of 80Mbps to 100Mbps (peak download speeds up to 2Gbps) 3
► For 5G testing, the two companies are creating a 15km high density fibre network which is
multi-operator capable and provides the bandwidth for mobile network operators (MNOs) to
explore advanced technology including centralised C-Ran architecture and 5G. The network
consists of a fibre ring with over 90 cabinets to enable the sharing of the infrastructure4
► In 2018, 5GIC partnered with the Digital Catapult to capture data generated by IoT applications.
In collaboration with King's College London and Bristol University, the centre is creating a "5G
Hub", linking three 5G testbeds. The project is also supported by the Department for Digital,
Culture Media & Sport (DCMS) with £16m of funding
6
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Artificial Intelligence: Rising adoption
Till date, numerous organizations have lacked expertise and resources to take advantage of Artificial Intelligence (AI). However, since 2018, adoption of AI
is being driven by usage of cloud-based AI software and services

Artificial Intelligence: Early adoption towards cloud1 Investments in AI across different sectors- 20182
Doing High
Low AI investment/ high returns High AI investment/ high returns
more with
less in- Technology, Media and
In 2018, 58% of
the
house entertainment/ telecommunications
expertise Industrial products and services
organisations
used cloud During 2018,
enterprise
2.6x 38% of the
software with

Return on investment
organisations
embedded AI reported Professional services
Early adopters
are more likely moderate-to-
to acquire AI via extreme AI
cloud services skills gap
vs. traditional IT Financial services and insurance

Consumer products
AI
72%
organisation obstacles
s are using Data Life Sciences and health care
enterprise Integration Government/public sector (including
software Implementation education)
with AI
capabilities

Low Low AI investments/ low returns High AI investments/ low returns

Average ROI of AI
deployments globally is 16% Low High
Investments

Note:1) The reported statistics are for 2018; 2) The dotted lines in the investments graph represent the median ROI and median AI investments, cross-industry 7
Source: 1) AI- Early adopters; 2) AI investments across different industries- Deloitte 7
Artificial Intelligence: From expert to everywhere
In 2018, companies have accelerated their usage of cloud-based AI software and services. Cloud has been useful in driving full scale AI implementations
with better return on investment (ROI). However, the UK region has been an early adopter through investments and skill assessment workshops

Increased investments in AI
From 2016-18, global AI industry received over $24 bn in investments. Additionally, major IT companies acquired 115 AI focused start-ups in 2017, an increase of 44% than in 2016. These
1 investments have been due to advances in machine learning and deep learning neural networks and the ways these technologies are helping firms to improve their operations, develop new
offerings and provide better customer service at lower cost1
‐ In 2018, firms such as Verizon used AI to enhance network management (SD-WAN and wLAN services); Orange Business Services is using AI to speed up root cause analysis, address network
issues, and streamline customer support; and in Asia, Singtel aims to develop an AI lab. Improving operational efficiency is one of the key focus areas for telecom organisations in the UK
‐ In Apr’18, UK government invested £1 bn into the UK AI industry in partnership with US tech firms, European telco’s and Japanese Venture Capitalists to develop new, efficient and accessible
products and services4

Deployment of cloud for early adoption

2 Early 2018 witnessed an increase in the deployment of AI solutions despite of lack of top talent, access to huge data sets and massive computing power. Through cloud, organisations can access
services that have these shortfalls. With this, partnership with multiple AI start-ups providing cloud based development tools and applications has also increased effectively.
‐ In 2018, Atos and Google Cloud launched AI labs in London; Oracle opts for AI expansion in the UK through deployment of cloud services; Softbank invested $29.5 mn in UK based AI start-up
‘Engineer.ai’3 ; UK technology firm ‘Sage’, announced an investment of £60 mn in shifting customers to the cloud; Oracle plans to double the size of its Reading AI lab in the UK to accelerate
innovation and help users take advantage of critical technologies5
‐ In Nov’18, Three UK invested more than £2 bn in developing a fully integrated cloud-native core network in new data centres to support its 5G infrastructure in future6

Reduction in skill gap

3 Rising innovations have led to faster growth and effeciency for businesses however there has been a lack of digital skills in 2018. According to Accenture7, the digital skills gap has costed the UK
£141 bn in GDP growth in 2018. However, multiple organisations in the region have invested in reducing the gap
‐ In 2018, cybersecurity was reported as a key AI concern and majority of the organizations have proactively integrated cybersecurity planning into their AI initiatives. Also, during the same
year, around 44% of the organizations globally appointed senior executives to develop and expand AI solutions and 42% to launch companywide AI centers of Excellence1
‐ In Sep’18, Vodafone UK launched initiatives (workshops and skill assessment programmes) to reduce skill gap for digital sectors such as AI, IoT and cloud services

8
Source: 1) TMT trends-AI; 2) AI- Global players; 3) Softbank invests in AI; 4) Investments in UK; 5) Oracle; 6) Three UK; 7) Accenture- report on AI skill gap 8
Artificial Intelligence: Initiatives in UK telecom
The UK has witnessed a 30% increase in productivity and 25% increase in cost savings with adoption of AI solutions such as Machine learning, Natural
language processing (NLP) and Computer vision7. Firms such as BT, Vodafone, Sky, City Fibre and others are using AI to enhance user experience and
business performance
AI and Network
security
Since 2018, BT has been trialling AI innovations
that will detect network anomalies in large
volumes of data, and learn patterns of how
malware propagates1
► The firm is using Saturn systems to visually
filter the information and support its
internal analysts in performing
investigations
► Using AI, BT has identified seven use-cases
to defend its infrastructure. These include:
• Network operations monitoring and
management; Predictive Maintenance;
Fraud Mitigation; Cybersecurity;
customer service (robots); Intelligent
Customer Relationship Management
(CRM) systems2
Source: 1) BT-EE Annual Report; 2) BT- AI infrastructure; 3) Vodafone- Loyalty program; 4) Vodafone and Predictive analytics; 5) Vodafone annual report-2018; 6) Vodafone partners with IBM; 7) UK and AI; 8) Sky UK and Adobe;
9) UK Government; 10) AI as the key strategy
Vodafone has been using predictive analytics
through its large, global and varied data pools
to enhance its customer service and reducing
costs due to a smaller required workforce4
► In Jan’19, Vodafone UK partnered with IBM
for a £423.4 mn cloud contract to support
next generation technology such as
machine learning and 5G6
► In Nov’18, the firm launched an AI based
loyalty programme ‘Very Me Rewards’ for
its customers in the region to provide free
treats and money off vouchers3
► During 2018, Vodafone group deployed AI
across both service and sales segments and
simplified the access and use of services,
for example, via touch ID login and
integrated virtual assistants5
Machine
learning and
digital service
AI and
Personalisation
Sky has used AI to make smarter decisions
about its products and services offered to its
UK customers
► In Jul’18, the firm implemented Adobe’s
Sensei (AI and machine learning
framework) to integrate customer data
and make real-time recommendations and
enhance business performance8
► The medium and long term objectives of
Sky are focused on delivering personalised
omnichannel experiences, both online and
offline. For this, the firm has been using a
range of technologies including Audience
Manager and Adobe Analytics within the
Adobe Analytics Cloud platform
UK government has taken multiple initiatives in
the AI segment in partnership with City Fibre
and other local organisations. The key
initiatives are:
► In Jan’19, UK government invested £26.6
mn in micro robots to repair underground
fibre network in the region and eliminate
disruption caused by the 1.5 mn road
excavations every year9. City Fibre and
local UK universities also became a part of
this project
► In 2018, the government has also
underlined AI as the key strategy under its
‘Industrial Strategy for UK government’
program, aiming to put the UK at the
forefront of the artificial intelligence and
data revolution by 203010
AI and Cost
saving
9
9
Connected Devices- Rising trend of smart speakers
The industry for smart speakers-internet connected speakers with integrated digital assistants- was worth £4.0 bn in 2018, selling 164 mn units at an
average price of £34. The UK is expected to be the third largest smart speaker market in 2019, after the US and China. The region is expected to represent
8% of all shipments in 20191,2
Smart speakers- Fastest growing devices Smart speaker adoption by region, June 2018

63% increase in
revenue in 2019
United United Urban
164mn units Canada Germany Australia
States Kingdom China
shipped 9% 10% 9%
20% 12% 22%
$7.08 bn worldwide in
2018 (67%
$4.0 bn increase y-o-y)

2019
2018

Smart speakers are

Majority of voice the seventh most
used device on a
assistants on
daily basis
smartphones, tablets They are majorly
and computers have used for the
never been used purpose of listening
music, weather
updates and to set
alarms

10
Source: 1) Deloitte TMT predictions report- Global; 2) Deloitte TMT Predictions report- UK 10
Connected Devices: Increasing innovation for consumers WIP

Connected Devices are providing multiple benefits including enhancing operational efficiency and cost savings

Increasing use of voice recognition in call centers

In Jan 2019, BT used robotic voice automation to prevent nuisance calls.
1

Product expansion through the launch of smart home devices

2 xxx

xx

3 xxx

11
Source: 1) Deloitte TMT predictions report- Global; 2) Deloitte TMT Predictions report- UK 11
Connected Devices and IoT in UK telecom WIP

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Lorem BT expands its proposition to the B2C segment

BT has been using Internet of Things (IoT) propositions coupled with
solutions to serve high street retailers, large logistics groups and utilities.
The firm has also been offering IoT connectivity to its wholesale partners in
the UK through its EE mobile network
► During 2018, the firm had four products in its IoT portfolio that have BT-EE
largely been used by mobile and fixed network companies for secure Lorem ipsum dolor sit amet
communication with their devices1
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► In May’18, BT had announced its plans to launch a range of Smart tempor incididunt ut labore et dolore magna
Home products across its network by 2019. Through this, the group aliqua. Ut enim ad minim veniam, quis nostrud
aims to expand across the B2C segment2 exercitation ullamco
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Lorem Vodafone driving revenues through enterprise IoT
Vodafone has driven its business performance through its IoT division. The
firm has providing these solutions across Agriculture, Mobility, Buildings
and Retail business segments in the UK region4
► During 2018, the firm enhanced its IoT service revenues by 14%, Vodafone
adding more than a million SIMs per month and scaled its IoT services Lorem ipsum dolor sit amet
businesses in key verticals including automotive and financial services consectetur adipisicing elit, sed do eiusmod
in the UK region tempor incididunt ut labore et dolore magna
► In Nov’18, the firm launched its “V by Vodafone” consumer Internet of aliqua. Ut enim ad minim veniam, quis nostrud
exercitation ullamco
Things (IoT) business to support customers in managing their
Vodafone application3
D
o The firm has also been innovating to develop IoT solutions that
support its 5G initiatives for 2019

12
Source: 1) BT-Annual Report; 2) BT-EE Smart Home; 3)Vodafone- Annual Report; 4) Vodafone IoT innovations 12