Navigating in the Sea of Connectivity

Team Johannesburg

Empower your telcos. Drive data usage.

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How is daily life enhanced by the sea of connectivity?

NOTE:This presentation was created by a team

of MBA students for educational purposes and in no way reflects the

views and beliefs of Ericsson.

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Current StateFuture State

Connectivity is the result of an Ericsson’s led value chain

Networks R&D

Equipment

Telecom Operators

Consumer

Managed Services

Ecosystem Value Chain

Devices Content

= Ericsson Participation

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Device proliferation will necessitate a new business model for telecom operators

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Device proliferation will necessitate a new business model for telecom operators

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Device proliferation will necessitate a new business model for telecom operators

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Device proliferation will necessitate a new business model for telecom operators

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Connectivity will proliferate through two types of devices, used in different ways

Predictable Usage

DefinitionDevice has consistent bandwidth requirements over time

Jan Feb Mar Apr MayExample

Heart monitors

Usage Pattern

Variable Usage

DefinitionDevice requires varying degrees of bandwidth

Jan Feb Mar Apr May

AppleiPad

Usage Pattern

Example

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Variable usage devices must have variable pricing • Ericsson should have a pre-paid and post-paid plans – both

will be variable pricing

Monthly Price Speed (MB/S)Monthly cap on downloads (GB)

$65 18 150

$55 12 150

$35 6 80

$30 3 60

$25 1.5 40

$19.95 0.8 20

Sample monthly post-paid pricing structure

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Drive ‘mobile’ data usage by supporting ecosystem

1. Handsets (smartphones)• Use Sony Ericsson to create handsets that satisfy ‘super

usage’ consumers. Ex. niche gaming handsets

2. Other mobile devices• Smartphones lead data usage, but helping other devices

become connected is key• Ericsson should provide innovation labs, middleware,

device OSs, etc to stimulate growth in these devices

3. Apps and the Ericsson eStore• Enable telecom operators to gain revenue from apps• Provide advanced libraries and protocols to help

developers of specialized apps

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Monetizing from telecom operators

• Aggressively sell managed services to telecom operators– Reduces telecom operators’ operating expenditure by 30-40%– Will free up capital to invest in upgrading to 4G

• Expanding the new ecosystem and supporting telecom operators, device manufacturers, etc will increase data usage; growing the pie means Ericsson will boost revenues

NetworkProducts

Managed Services

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Ericsson should maintain thought leadership

• Ericsson is best placed to influence players in ecosystem– Have relationships with all telecom operators– Will work with devices and support app developers

• Ericsson’s executive leadership should evangelize new business model through conventions, white papers and conversations with other companies’ executives

• Telecom operators can be convinced to change pricing – the move to 4G affords opportunity and increased data usage creates an imperative

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City of Los Angeles Transportation ProjectKey Integration Partners

Thorough execution is key to achieve leadership in this space

Networks R&D

Equipment

Telecom Operators

Consumer

Managed Services

Devices ContentCity of Los Angeles

Integrator

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Uncertainties in this new landscape must be mitigated for Ericsson to succeed

• Consumer adoption

• Competitive landscape shifts

• Emergence of substitutes

• Regulation could delay implementation

• Capability development

• Public acceptance

Inherent Risks to Navigate

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Ericsson can transform the marketplace through connectivity leadership• Ericsson is driving an ecosystem to realize the future of

connectivity

• This future involves new monetization strategies and fee structures across the ecosystem

• This ecosystem will deliver transformational solutions in areas such as transportation

• To achieve this vision, Ericsson will have to navigate a new competitive landscape with considerable risks

• The reward for mastering this new connectivity is the leadership role in a transformed marketplace