From Infrastructure to Ecosystem

Customers are holding our hands

Osman SultanChief Executive Officer

Abu-Dhabi TELECOMS CEO Summit

MECOM

Dubai 16th May 2011

The world did not stop changing in few short decades

Industrial revolution - Land

- Labor- Capital- Manufacturing

from

to

Information society- Brainpower/creativity- Digitized Information- Globalization

3

Innovation in the Context of the Arab world

Historical

Modern

Present Day

The Arab World led intellectual and Scientific pursuits in the ancient world

The Industrial Revolution passed us by

The knowledge society is the opportunity for all countries in the world…

Will we sit back and let this go?...

But it has been the same simple story … (perhaps as old as civilization)

Transport Experience & Lifestyle

Content

Transport

Experience &Lifestyle

Content

Video

Music

NewsEvents

Movies

Dynamic Production & Packaging

Component Content

Players Publishing, Music, Cinema, Press

Broadcasting & Distribution

Channels

Telecom operatorsTV and Cable networksBroadband networks

Benefit & Value

Users

IndividualsSOHOCompaniesStudents

Design & Interface

Appliances

ComputersHome AppliancesPDAs, Mobile PhonesDigital cameras, Gaming devices

Interaction

Innovation through transformation of borders

Customers

Devices

MTCOperators

BROADCASTINGMOBILEFIXEDInfrastructure

Web WAP IPTVEmailSMS

Th

e w

orl

d o

fC

on

tent

Applications New Virtual Space

Gates

Th

e w

orl

d o

fO

pera

tors

To UserGenerated

Content

From ContentCreation…

..through ContentAggregation

ApplicationsApplications MyTub

e

DESIGND

ATA

CONTENT

Communication is enabling huge opportunities of creativity / Historical

Changes • everyone can design a page

as a window to the world

• everyone can create and share images or movies

• everyone can become publisher or broadcaster

Our learning universe is in constant transformation

- A transforming telecommunication world, an exploding media world.

- new environments, new behaviors, new cultures- fast technology, more capabilities, more speed, more capacity

Change = Evolution Rapid Change = Disturbance

Disruptive Change = Crisis New Technologies

New Capabilities

Behaviors

New New Business Models

New Competition

New Flows

New Civilization Models ??

Applications will be a high-growth area contributing to mobile data revenues. With operators gaining little or no revenue share from vendor-operated application stores,

“Do-Nothing” is not an option

Note 1: Captured numbers are industry numbers and not just for operators. Note 2: All the numbers indicate content revenues, and do not include access (data) revenuesSource: Capgemini TME Strategy Lab analysis; Informa, “Global Mobile Network Traffic 2007-2012”; Informa, “Global Messaging End User Forecasts”, Nov. 2008; Morgan Stanley, “Mobile Internet”, Dec 2009; Nielsen, “Mobile Media Europe: State of the EU5 Union”, Mar 2009; ComScore, “The Next Big Things: Mobile Internet & Applications - Gaining Momentum”, 2009

Compound Annual Growth Rate of Mobile Services , Worldwide, % (2009-2013)

SMS

Email

Mobile TV

m-Commerce

MMS Location based

Games

Images

Applications

Music Streaming

IM

Music Download

Ringtone

Video

-20%

0%

20%

40%

60%

80%

100%

120%

-5% 5% 15% 25% 35% 45% 55%

Applications are potentially a huge market

with high growth

possibility

Under-developed

Mature

High-growth

Bubble size correlates to forecasted 2013 data revenues

Con

sum

er

Pen

etr

ati

on

Est

imate

s, %

, 2

01

3

CAGR, Revenue and Consumer Penetration of Various Mobile Data Services, Worldwide, 2009-2013

key assets available to the operator in the app market

Locally relevant & operator specific content

Control of network and experience

quality

Control over Payments

Tools &Monetizatio

n

An In-depth Customer

Base Insight

Example: Data packages based on tiers or partnerships with 3rd parties to guarantee (for a premium) network quality for data-intensive apps.

Examples: Creation of custom Apps, Apps utilizing operator-specific or local content such as news, events, location information, consumption tracking.

Example: Monetization engine for 3rd party services through simple m-payment systems.

Example: Geographical location, usage patterns , content purchases, Demographics, relationships.

Direct App Sales

In-app advertisin

g

Promo apps

Subscription Apps

Usage based apps

Possibility of future revenues as a result of application upgrades

Operators’ Stake Developers’ Perspective

Quick monetization method Additional revenues through sale of

virtual goods

Instead of managing individual developers, operators deal with a few large ad-serving players

Cross selling of paid applications through the free ad-supported ones

Popularity based revenue share arrangement with operators

Upfront payment to operators or payment based on number of downloads

Large business houses can create applications that promote their products

Improves quality of applications on store – Mostly useful applications which

can sustain usage over time go for subscription model

Source of continuous revenue High price premium content can be

sold as moderately priced subscription application

Operators charge based on usage of applications , which are hosted on the cloud

Quick provision of application upgrades to all users helping improve user stickiness

Enablers

Return facility within a time period, simpler payment modes

Better analytics for intelligent targeting

Improved browser traversing

‘Lite’ test application or a free cancellation facility

Reliable Networks

Source: Capgemini Strategy Lab analysis; Hopkinson Report, ”Which iPhone App revenue model has the most profit potential?”, July 2009; Boxuk.com, “Monetizing your Web App: Business Model Options”, Feb 2009

Approach

operators can adopt multiple monetization models from the sale of

apps

An Integrated Ecosystem With Multiple Components Impact

GOVERNANCE

MARKET

PEOPLE

INSTITUTIONSCOMMUNITY

Setting the new players as agents of change

in evolving societies facing a restructuring model

ensuring the adequate supply and development of knowledge workers

demystifying and humanising technology to promote usage, growth and development

establishing the corporation as a social citizen

But more essentially:

Ensuring a fair and ethical practices in driving development.

Enabling in our organisations the creation of new Structures, Systems, and “Spirit”.

Building a culture of continuous change

Transforming the traditional and hierarchical model to a process–oriented and customer–focused model

Building the ability for learning and knowledge management

And more than ever…”Think Globally, Act Locally”If not addressed, this is often the biggest threat to

successIf not addressed, this is often the biggest threat to

success

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Addressing the opportunity of 21st Century Digital Arabia

The New Digital Age.

• No Arabic destinations of note• The broadband story is unfolding almost everywhere• A Young and increasingly savvy audience• Diversity of people, but common threads

This creates significant business opportunities for regional players

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21st Century Digital Arabia

Systematically addressing the 3 screens…in 3 languages

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20

and looking to the future6th sense – ubiquitous networked reality

The promise of a “brave new world”?

An Act of Faith:

Communication and Digital Life are accelerating the transformation in this

region.

Generation Digital Arabia is out there.

Thank you