Dogs and demons in telecom

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  • Dogs & Demons

    in the Telecom world

    Wireless Developer Forum | Beijing | 2007.09

    Benjamin Joffe | Managing Director | Plus Eight Star Ltd

    is 3G

    a dog

    or

    a demon?

  • the mobile professionals community

    Sometimes the most direct route

    to innovation is to look abroad

    and translate what you find

    Tom Kelley

    Author of The Art of Innovation

    Chinese proverb

  • Dog or demon?

  • 288 million 3G subscribers

  • 50% in Japan & Korea

  • Is there any successful

    service or business model?

  • 3G Business models

  • 1Sell 3G licenses

  • 2Sell 3G equipment

  • 3Invest and sell a company

    with 3G name

  • 4Organize conferences

    about 3G

  • But users want quality service!

    Operators need more capacity!

    GSM Association Executive

  • Still I couldnt help but wonder:Is there no business model for

    3G services?

  • the mobile professionals community

    Dogs = innocuous but important

    Demons = grandiose but useless

  • Demons?

  • Video phone

  • Mobile payment

  • Contactless(and networkless)

  • Mobile TV

  • Terrestrial orSatellite Broadcast

  • Most talked-about services

    dont need 3G

  • We are sorry for telecom operators

    who made the mistake of 3G,

    but its not our fault!

    Martin Varsavsky

    CEO, FON

    (worlds largest WiFi network operator)

  • For operators, 3G is essentially a

    waste of money.

    Top executive at one of the most innovative European Telecom operators

    (Very familiar with Asian markets)

    Unfortunately, there is no

    coming back

  • Alternate definition

  • Games

    Girls

    Gambling3G

  • Games

    Girls

    Gambling3G

  • China

  • Fairy Tale?...

  • Horror Story.

    China Mobile changes

    VAS regulations

  • Opaque

    &

    unpredictable

  • Chinese regulation change

    hits MonsterMob11th July 2006

    The news sent MonsterMob's

    share price crashing own 58.9% on

    the London Stock Exchange.

  • Besides the major music labels, I haven't seen

    any foreign content companies make any

    significant revenues in the WVAS space in China.

    APAC General Manager for a leading foreign WVAS provider

    Ex-VP with a leading WVAS SP in China

    Much better to focus on the rest of Asia Pacific.

  • I am often still asked if I believe the wireless value-

    added service sector in China has good short-term

    prospects.

    Perry Wu, ChinaTechNews Editor

    Chinese Mobile Business Model Is Suicide, June 22, 2007

    My answer is still, "No. Absolutely not."

  • Though I work in mobile VAS in China,

    I would rather invest in ventures focusing on

    alternative energies than the mobile industry

    Executive at one of the top 3 VAS providers in China

  • Dogs.

  • Where is the money?

  • Carriers

    content

  • Carriers

    content

    Official content

  • Carriers

    content

    Official content

    Mobile content

  • Carriers

    content

    Official content

    Mobile content

    PC content

  • Carriers

    content

    Official content

    Mobile content

    PC content

    Blue ocean of offline worldlifestyle infrastructure

  • The pie issue

  • Pie = mobile content fees

    (e.g. China = 1bln USD)

  • Lets get a bigger share!

  • Content fees + Data fees

    (e.g. China = 13 bln USD)

    Content fees

  • KDDIs mobile music

    [100 million full songs]

  • KDDIs mobile music

    [100 million full songs]

    Direct effects

    Content revenues 400 mln USD

  • KDDIs mobile music

    [100 million full songs]

    Direct effects

    Content revenues 400 mln USD

    KDDI share (10%) 40 mln USD

  • KDDIs mobile music

    [100 million full songs]

    Indirect effects

    Data fees 500 mln USD

  • KDDIs mobile music

    [100 million full songs]

    Indirect effects

    Data fees 500 mln USD

    Subscribers boost 500 mln USD

  • KDDIs mobile music

    [100 million full songs]

    Factor 20!

    Direct effects = 40 mln USD

    Indirect effects = 1 bln USD

  • (hire consultants)

  • Cyworld Mobile

  • Cyworld Mobile

    3 million users (2006.6)

    Revenues 2006 from mobile: US$30 million

    First screen Photo album Guest book My neighbors

  • Data ARPU

    Most it is results from the continuous

    growth of new services such as MelOn

    (music service) and Mobile Cyworld,as well as increased usage of the data

    flat rate plans.

    SK Telecoms wireless Internet revenue saw a 21% year-on-year increase

    (now 30% of ARPU)

    Shin Bae KIM

    CEO, SK Telecom

    South Koreas #1 mobile carrier

  • Mobile Game Town (DeNA)

    Attract user

    with free games

    Build communities

    with matching games

    Chat

    BBS Journal Clubs

    Avatars

    Get new users with

    Word-of-mouth

  • 3 million members (Feb 07)

    6.7 billion monthly pageviews!

  • Ad partnerships

  • Mobile Game Town

    We started without a real business plan. We just

    thought there are millions of people paying for games, so if we give games for free we should get

    millions of users

    Shogo KAWADA

    COO, DeNA

    (Japans largest mobile SNS)

    We thought we could always find out later what to

    do with them.

  • Moba-Oku (DeNA)

    Mobile Auctions

    1. Take pic

    2. Select category

    3. Enter info

    4. Check

    5. Done!

  • 800,000 paying members

    2.8 million products

    Seller Buyer

    Payment

    Agent

    Post ATM

    Convenience store

    Credit cardPayment

    noticePayment

    Payment notice

    Payment notice

  • Mice Love Rice

  • Mice Love Rice revenues

    From free Internet to mobile

    6 million RBT in one month at peak

    (equivalent to 700,000 CDs)

    iTunes Global Top 10

    Over 20 million US$ in copyright fees

  • As a conclusion

  • Change in carriers policies

  • Difficult environment

    +

    Talent

    +

    Venture capital

    =

    Innovation!

  • No traditional media legacy to protect

    Leapfrog to a digital economy

  • the mobile professionals community

    Thanks!

    benjamin@plus8star.com

    Inside Cyworld

    Inside QQ

    Published research

    Free sample | www.plus8star.com

  • [+8*] (Plus Eight Star Ltd) is a consulting boutique operating from Beijing, China

    To learn more about us, please visit our site at www.plus8star.com.

    The company

    Provide strategic analysis to operators & content providers to anticipate their markets

    Bring best practices in business models, service design and marketing to Internet and mobile companies to

    accelerate their business

    Other services range from M&A advisory, market entry, partners identification to negotiation support

    Our services

    Innovation Arbitrage: bridging differences in market maturity worldwide, using Asia as a source

    Strategic consulting on best practices in mobile and Internet services in China, Japan and South Korea

    Our focus

    Multicultural team covering the 3 markets Hands-on experience with local companies Large network of contacts Cross-market & cross-cultural awareness

    Local expertise and global perspective

    Co-Founder & Organizer | Mobile Monday Beijing

    Leading Information & networking event for mobile professionals in China

    19 sessions since March 2006 2500+ members, 70 presentations www.mobilemondaybeijing.com

    Managing Director | Benjamin Joffe

    8 years in Internet & mobile in Japan, Korea and China Selected as Chinas Top 100 mobile influencers in 2007 Monthly column on Asian innovation in the magazine Asian Business Leaders

    Tel: +86 1371 880 3321 | Skype: benjamin0123 Email: benjamin@plus8star.com

    The future has already arrived. It is just not evenly distributed yet.

    William Gibson

    Science fiction author & father of the cyberpunk genre

    Coined the term "cyberspace" in 1982

    About +8*

    Copyrights 2008. All rights reserved. www.plus8star.comMobile & InternetInnovation Arbitrage

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