Transcript Wholesale Innovation Analyzer 2012

Wholesale Innovation Analyzer 2012
Catherine Haslam, Senior Analyst, Wholesale Telecoms
[email protected]
TE012-000455
May 2013
1
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Contents
2

About the Wholesale Innovation Analyzer

Executive summary

2012 wholesale innovations league and summary tables

Detailed analysis of 2012 wholesale innovations

Research methodology
© Copyright Ovum. All rights reserved. Ovum is an Informa business
About the Wholesale Innovation Analyzer

Innovation does not begin and end with the retail sector. Wholesale carriers are also
innovating to bring new services, strategies, and approaches to the market. They are
seeking to differentiate their offerings and to increase their market shares, revenues,
and overall profitability.

This is the second edition of our Wholesale Innovation Analyzer, the aim of which is to
identify and analyze new developments and to rate them according to their potential
impact on the wholesale market and likely success.


3
The Analyzer includes innovations across all aspects of the wholesale telecoms business,
including go-to-market solutions, business models and technology, and individual products and
services.
We have rated a range of wholesale telecoms innovations announced in 2012 against
five criteria:

Size of potential opportunity

Impact on the market

Value of first-mover advantage / uniqueness

Potential for customer take-up

Synergy with the company’s strategy and strengths
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Executive summary (1)

2012 was not as productive as 2011 for wholesale innovation because:
 2011 innovations were impacting on the market
 Wholesale innovation generally involves more parties and therefore has a long
incubation period
 Evidence is emerging to suggest a two-year wholesale innovation cycle – we have seen
more innovations in 1Q13 than in all of 2012

Innovations through 2012 occurred in three main areas:
 Go-to-market solutions that provide “open” structures to bridge the divisions
between proprietary service islands
 Services based on enterprise growth trends and an increasing interest in
wholesaling enterprise-based capabilities
 Technology innovations that increase flexibility and help wholesale customers
deploy or upgrade more easily
4
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Executive summary (2)

2012 innovations showed:
 Strong synergy with company strategies
 Where market opportunity is limited, it is often by elements of the proposition
outside the wholesaler’s control e.g. availability of devices
 In most cases it will be difficult to maintain a first-mover advantage as many
wholesalers share the same capabilities

Best innovation overall during the period:
 Akamai’s Terra Cloud Catalyst

Most innovative company during the period:
 Akamai – with the two highest-scoring innovations, Akamai’s developments
reflected both the importance of cloud models and the end to service and content
delivery islands
5
© Copyright Ovum. All rights reserved. Ovum is an Informa business
2012 Wholesale Innovations League Table
6
Company
Name/description
Launch Date
Innovation
category
Ovum
innovation
score (of 5)
Akamai
“Terra Cloud Catalyst”
May 2012
Business model /
Go-to-market
4.0
Akamai
“Aura Network Solutions”
February 2012
Product /
Go-to-market
3.8
TeliaSonera
International Carrier
100GB bandwidth on demand
November 2012
Technology /
Service
3.8
Tata
Communications
“Global Meeting Alliance”
January 2012
Business model /
Go-to-market
3.6
Colt
Franchise partner channel
April 2012
Go-to-market
3.3
Sprint
Wholesale pay-per-use data access
October 2012
Business model
3.0
Orange
“@first” anti-fraud solution
April 2012
Service
2.6
UK Broadband
Fixed wireless broadband access
via TD-LTE at 3.5GHz
March 2012
Technology
2.4
© Copyright Ovum. All rights reserved. Ovum is an Informa business
2012 Wholesale Innovations Summary
7
Market
size
Impact
on
market
Firstmover
value
Ease of
take-up
Synergy
with
strategy
Overall
score
“Terra Cloud Catalyst”
4
4
3
4
5
4.0
Akamai
“Aura Network Solutions”
5
4
1
4
5
3.8
TSIC
100GB bandwidth on demand
4
4
2
4
5
3.8
Tata
“Global Meeting Alliance”
3
3
4
3
5
3.6
Colt
Franchise partner channel
3.5
3
3
2
5
3.3
Sprint
Wholesale pay-per-use data
access
2
3
3
2
5
3.0
Orange
“@first” anti-fraud solution
2
3
2
2
4
2.6
UK
Broadband
Fixed wireless broadband
access via TD-LTE at 3.5GHz
2
2
4
2
2
2.4
Company
Innovation
Akamai
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Akamai Terra Cloud Catalyst: summary
Description
Akamai has extended its CDN reach by providing a solution to public cloud service providers. Terra Cloud Catalyst
provides Akamai with another channel to market. By taking the technical integration difficulties out of the cloud provider’s
hands and tailoring its pricing models to those of the cloud providers, Akamai is accessing a fast-growing channel based
on the growth and proliferation of IaaS, PaaS, and hosted storage providers.
Strengths
Weaknesses
Extends Akamai’s CDN capabilities through a new channel
to customers Akamai wouldn’t otherwise reach
As a go-to-market initiative, the solution can be replicated
by other CDN providers.
Leverages the fast-growing cloud segment
Provides a solution in a manner and on terms familiar to
cloud providers, reducing barriers to entry
Ovum view
This is an exciting move by Akamai into the cloud, and it has already been taken up by some of the biggest data center
names including Rackspace. It shows a maturity on Akamai’s part, to use the cloud to extend the reach of its CDN rather
than trying to use CDN as a way into the cloud. Demand for CDN capabilities in the cloud will only increase over time, and
Akamai’s solution offers a possible blueprint for the integration of CDN into the cloud. We expect other CDN providers to
develop similar propositions. The only question is whether there is enough revenue in CDN services to justify the addition
of a CDN link to the cloud value chain.
8
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Akamai Terra Cloud Catalyst:
score 4.0
• Targets the fast-growing segments of IaaS, PaaS, and
hosted data centers.
Size of the
opportunity
5
Score: 5
• Completely
aligned to
Akamai’s strategy
to concentrate on
CDN and reach
new customers
through
partnerships.
Score: 4
• The opportunity is global and limited only by the
maturity of cloud providers who might feel they can
provide their own CDN capabilities.
4
3
Alignment with
company strategy
and strengths
2
1
Score: 4
Impact on the
wholesale market
0
Potential for
customer take-up
Uniqueness/value
of first-mover
advantage
Score: 4
• This is all about ease of deployment by cloud providers and
as such minimizes the effort involved to deploy.
• Provides pre-configured bundles and integrated reporting to
make it fast and easy for customers to use.
• There are few practical barriers to customer take-up other
than the development of effective sales practices to add on
CDN services.
• It has already been deployed by some leading data center
providers including Rackspace.
• This is not a new capability, but it does
provide a possible blueprint for
integration of CDN with cloud.
• We expect this to have a significant
impact on the market and that other
CDN providers will follow.
• The impact could be limited by cloud
providers intent on creating their own
CDN solutions.
Score: 3
• It will impact on CDN competitors that have also seen the
potential in cloud.
• It can, and we expect it will, be replicated by other CDN
providers.
• Given that it requires flexibility in management and the ability to
offer dynamic allocation on a wholesale basis that will be difficult
for some to replicate quickly, we expect Akamai to maintain a
competitive advantage in the short to medium term.
For more on Akamai, see further reading
9
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Akamai Aura Network Solutions: summary
Description
Aura Network Solutions is a CDN solution targeted specifically at network owners. It provides a common architecture for
network operators to deliver their own content to sell CDN services to third parties, meaning that an operator’s retail and
wholesale CDN activities can be run from the same platform. It also includes the ability for operators to federate with
Akamai’s own CDN platform to provide reach beyond the operator’s own network. It is sold as a managed service by
Akamai. As such, this is a combination of product, business model, and go-to-market innovation.
Strengths
Weaknesses
Taps into the exponential growth of data traffic, particularly
video, and the emerging trend towards network function
virtualization.
Some operators will still want to completely own their CDN
infrastructure (this is being addressed by the development
of a licensed product to be launched in 2Q13).
Provides the commercial framework and environment that
make it possible for smaller companies without global sales
channels and resources to participate in the market.
The capabilities are replicable by Akamai’s competitors.
Indeed, Edgecast’s OpenCDN replicated the federation
capability within three months.
Combines wholesale and retail capabilities in a single
platform in a market where the channels often overlap.
Ovum view
This represents a shift in the CDN market towards a more mature stage of development in which network operators and
pure-play CDN providers understand their own strengths and are prepared to draw on the strengths of others to
compensate for their weaknesses. It addresses two major operator headaches, providing a common platform for owned
and third-party content and delivering an easy route to a broader global CDN network at a time when content is
increasingly global. For Akamai, it offers a chance to get a share of CDN revenues based on operator relationships it can’t
compete with.
10
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Akamai Aura Network Solutions:
score 3.8
Score: 5
• Aura is the central
element of Akamai’s
network operator
segment strategy.
• Leverages
Akamai's telco
relationships and
technical capabilities
to produce a costsaving approach to
meet increasing
demands for
managed content
delivery.
Size of the
opportunity
5
Score: 5
• Targets the seemingly endless growth of data and
particularly video traffic .
• By providing a route for network operators to extend
CDN off-net, it targets the global CDN opportunity.
4
3
Alignment with
company strategy
and strengths
2
1
Impact on the
wholesale market
0
Potential for
customer take-up
Uniqueness/value
of first-mover
advantage
Score: 4
• The three elements of Aura Network
Solutions – common platform, managed
service model, and federated reach –
combine to reflect important and
necessary developments in the global
CDN market.
• All these features are being replicated
by others, meaning the CDN market is
shifting in line with this innovation.
Score: 4
• A major selling point of Aura is that it substantially reduces time to market for a fully
functional CDN, so time barriers are reduced.
• The usage-based managed service business model means that capex requirements
are significantly reduced.
• As a managed service there are no significant technical obstacles, but many
operators prefer to own all major network elements, and this remains a barrier.
Score: 1
• There are three levels to this innovation –
the common platform, managed service
model, and federated reach – but each is
replicable by others. Indeed, Edgecast
launched its OpenCDN competitor just
three months after Aura hit the market.
For more on Akamai’s Aura, see further reading
11
© Copyright Ovum. All rights reserved. Ovum is an Informa business
TeliaSonera International Carrier 100G on demand:
summary
Description
TSIC has deployed Infinera’s DTN-X product innovation on its North American network and is using it to offer wholesale
customers an on-demand 100Gbps service. Demand for capacity is increasing, but predicting exactly how it will grow is
difficult. This technical innovation provides a more flexible option for TSIC’s customers and a faster upgrade path from
multiple 10G and 40G services.
Strengths
Weaknesses
Meets a customer need among many service providers for
a faster and more flexible upgrade path to higherbandwidth services.
The functionality is based on a product that is freely
available on the market, so differentiation will be shortlived.
Leverages the network strength of TSIC.
Ovum view
This type of technology is an inevitable step for carriers seeking a cost-effective way to help their customers deal with the
unpredictability of the rate of capacity demand growth. We expect many other carriers to follow suit either using Infinera’s
product or solutions from other vendors. This type of offer could become the industry default for high-bandwidth wholesale
services as carriers deploy the technology.
12
© Copyright Ovum. All rights reserved. Ovum is an Informa business
TSIC 100G on demand:
score 3.8
• Supports the main
TSIC strategy to
maximize the return
on its network
investments as
quickly as possible.
• Although initially in North America only, this service
has global potential. Global demand for bandwidth is
ever growing, and deciding to move up the scale is
difficult. This makes the decision much simpler.
Size of the
opportunity
5
Score: 5
• Builds on TSIC’s
existing reputation
for providing
flexibility to specific
customer groups.
Score: 4
• The size of the opportunity is limited only by the
decreasing value of capacity services.
4
3
Alignment with
company strategy
and strengths
2
Impact on the
wholesale market
1
0
Potential for
customer take-up
Score: 4
Uniqueness/value
of first-mover
advantage
• Has potential to impact on the
expectations of customers, and more
carriers will follow as “on demand”
becomes a preferred method for
buying high-capacity bandwidth.
Score: 4
Score: 2
• There are no additional technical requirements for customers
to take up TSIC’s 100G on-demand services.
• Limited first-mover advantage as others will follow.
• This does require a change in mindset among customers used
to buying capacity based on big, long-term decisions. However,
as it fits with and responds to the pressures that customers are
facing, this should not prove a significant issue.
• This is a new approach but one based on a vendor’s
product. It is therefore highly replicable by other
carriers that deploy the product.
• Other vendors are also developing similar products.
For more on TeliaSonera International Carrier, see further reading
13
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Tata Communications Global Meeting Alliance: summary
Description
Tata Communications led the creation of an open ecosystem of interconnected business video services from different
telecoms providers using different vendors. A business model and go-to-market initiative, this takes the telecoms
interoperability mantra into the business video arena. This is achieved through a standard set of processes and
guidelines. In addition, common customer service tools will be used to schedule, conduct, and provide support for video
meetings. The Global Meeting Alliance also enables Tata Communications to monetize its intermediary position through
trunk connection and usage charges.
Strengths
Weaknesses
Takes a standardized telecoms approach into a growing
sector of business communications.
Completely voluntary and relies on the partnership’s ability
to build a big enough network.
Targets markets and customers from traditional segments.
Can be undermined by the emergence of other similar
alliances.
Fits well with established wholesale business practices.
Long-term value relies on Internet-based telepresence and
videoconferencing systems being unable to close the
quality gap.
Ovum view
This is a logical expansion of telecoms practices into a growing market segment. However, its success depends on
providing enough global reach and access to local business customers. The Global Meeting Alliance has excellent
presence in the Middle East and can draw on the enterprise capabilities of Telstra and PT Telekomunikasi Indonesia
International (Telin) in Asia-Pacific. In North America, the Global Meeting Alliance provides an interesting competitive
option to the big two. Tata Communications itself has separate partnerships with AT&T and Verizon, meaning its
enterprise offering is comprehensive. However, from an alliance point of view, Ovum expects developments along the
lines of the airline industry, with two or three competing alliances.
14
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Tata Communications
Global Meeting Alliance: score 3.6
Score: 5
Size of the
opportunity
5
• Aligns completely with
Tata Communications’
stated priority in video
services.
• Leverages the
company’s assets and
experience in
interoperating with
many different video
service providers and
vendor equipment.
3
2
1
Impact on the
wholesale market
Uniqueness/value
of first-mover
advantage
Score: 3
• No new infrastructure is required, and the point of this innovation
is to reduce the technical complexity associated with multi-vendor
and multi-provider services.
• However, it does require all service providers to adopt the same
processes and customer service tools, and that takes time and
training to implement effectively.
• Since launch, only one additional carrier has joined the alliance,
Telin. This suggests that some resistance exists to wider
membership in the alliance.
Score: 3
• As a crossover enterprise/wholesale
service, this sets a precedent for the
interworking of enterprise applications on a
global basis.
0
Potential for
customer take-up
• Although business video is a high-margin
and growing market, revenue from providing
interoperability is limited by cost comparisons
with alternative ways of extending reach.
• The size of the business telepresence and
videoconferencing markets will be limited by
the improving capabilities of Internet-based
video services.
4
Alignment with
company strategy
and strengths
Score: 3
• Its potential impact on the market is limited
in the short term by the willingness of
carriers with strong enterprise businesses to
allow wholesale partnerships that could aid
their competition.
Score: 4
• The Global Meeting Alliance will impact competitors as it
provides an opportunity for those without comprehensive global
reach to compete with those that do.
• The partnership is difficult to replicate in the short term, and
few operators have both the strong telepresence and
videoconferencing background and the translation capability to
take the difficulty out of interworking for participants.
For more on Tata Communications, see further reading
15
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Colt franchise partner channel: summary
Description
Colt is targeting SMEs through its franchise partner channel, a go-to-market innovation. Wholesalers find the SME market
difficult to reach as its requirements are so different from those of large-scale buyers. Rather than use unspecified subwholesalers, Colt is offering its Smart Office portfolio of integrated network, compute, and communications services under
the Colt brand to a limited number of franchise partners. These partners will have full autonomy to offer Colt’s solutions
along with their own.
Strengths
Weaknesses
Fills a significant gap in Colt’s portfolio by targeting SMEs.
Requirement for franchise partners to be exclusive to Colt
will significantly reduce the number of potential partners.
The completeness of the SME portfolio being wholesaled
will differentiate it from the more limited propositions in the
market.
Limited to just a handful of franchise partners as this
requires more effort from Colt than a straight reseller
model.
Easily replicated by others with both wholesale services
and an effective SME portfolio.
Ovum view
This is another example of how an enterprise product can be repackaged for the wholesale market and as such provides
a subtle but real development of the sub-wholesaler model to include more high-quality enterprise services. As consumer
revenue streams are squeezed by OTT services, we expect wholesalers to offer more enterprise services. The use of
franchises also maintains the Colt brand value. However, the exclusivity requirement will limit the willingness of potential
partners to tie up with Colt.
16
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Colt franchise partner channel:
score 3.3
Size of the
opportunity
5
4
3
Alignment with
company strategy
and strengths
Impact on the
wholesale market
2
1
0
• Fits with Colt’s strategy
to use partners to build
new routes to market
around platforms.
Potential for
customer take-up
Uniqueness/value
of first-mover
advantage
• Training, branding, and marketing support and access
to some of Colt's back-office capabilities smooth the
integration.
• However, some integration work is still needed for
franchise partners to build the Colt Smart Office into
their portfolios.
• The exclusivity condition may put off potential
partners, especially as alternatives enter the market.
Score: 3
• This is a well-thought-out crossover
enterprise/wholesale product. The
franchise partners are more than simply
resellers, which will drive the
development of more capable subwholesalers. This should be an
interesting model for others to follow.
• Its impact on the market is limited by
the exclusivity clause, which means Colt
isn’t going as far as it might to develop
this new channel in the longer term.
Score: 2
17
• The SME segment is growing and generally
underserved, making it highly attractive.
• The size of the opportunity is limited by the number of
partners Colt is willing and able to support in each
market and the number of partners that will be
exclusive to Colt. Currently Colt envisions three to five
partners in each regional market.
Score: 5
• Draws on Colt's
network and product
strengths and recognizes
that others have a better
route to market and more
capabilities to support
the SME segment.
Score: 3.5
Score: 3
• There is nothing hugely innovative in the SME Smart Office portfolio that
can't be replicated by others with access to an SME enterprise portfolio.
• Many of Colt’s competitors will not be allowed to wholesale their
company’s retail SME portfolio if their retail divisions remain protective of
this revenue stream. This gives Colt a medium-term advantage.
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Sprint wholesale pay-per-use data access: summary
Description
This is a product innovation that fills a gap in Sprint’s turnkey Mobile Broadband Solution portfolio by creating a Wi-Fi-like
option for potential MVNOs and other service providers. The pay-per-use data access on-demand solution provides
potential service providers with the mobile data and all support services to offer end users a pay-per-use service similar to
that offered by many public Wi-Fi providers. We classify this as a business model innovation.
Strengths
Weaknesses
Leverages the network and business support service
capabilities Sprint has for itself and its MVNO customers.
Targets a highly competitive market that is well served by
Wi-Fi.
Targets a fast-growing market segment that has previously
been out of reach of MVNOs.
It is replicable by other mobile wholesale providers with the
same capabilities.
Requires the purchase or hire of a specific device, whereas
Wi-Fi is built into almost all portable devices.
Ovum view
This, once again, demonstrates that Sprint’s mobile wholesale division is willing to push the boundaries of mobile
wholesale with solutions that are only just hitting the retail market. Pay-per-use mobile broadband is an area identified as
a possible growth market for high-speed mobile broadband to compete with Wi-Fi in public venues. To truly take
advantage of this opportunity, though, requires its provision through third parties without telecoms expertise such as
hotels, event venues, and cafes. This will provide a test case to see if the cellular cost base can compete with Wi-Fi.
18
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Sprint wholesale pay-per-use data access:
score 3.0
Score: 2
Size of the
opportunity
5
Score: 5
• Builds on an existing
core market serving an
increasingly diverse
range of MVNOs.
• Leverages Sprint's 3G
and 4G mobile networks
and more importantly the
flexibility of its
enablement platform.
4
• Targets a market that is already well served by an
alternative technology in Wi-Fi.
• The size of the opportunity is limited by the need for
specific devices and the reach of Sprint’s network.
3
Alignment with
company strategy
and strengths
2
1
Impact on the
wholesale market
0
Potential for
customer take-up
Score: 2
Uniqueness/value
of first-mover
advantage
Score: 3
• A good model that allows 3G and
4G to compete with Wi-Fi for casual
and roaming users.
• Should be replicable by others in
North America and in many other
markets.
• Could be a good idea a bit too late
as Wi-Fi has cornered the market.
Score: 3
• No technical inhibitors, as the proposition is fully packaged and
available to any supplier.
• As a business model it is theoretically replicable
by any mobile wholesaler.
• Limited on a business basis by competition with Wi-Fi, which is
embedded in many of the same devices. Service providers will need
access to an effective distribution channel for devices either created
by themselves or a third party.
• In reality the level of flexibility needed in the rating
and billing systems behind the proposition is not
something most mobile wholesalers have, meaning
Sprint should have a significant first-mover
advantage at least in the short term.
For more on Sprint’s MVNO strategy, see further reading
19
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Orange International Carrier Services @first: summary
Description
Orange’s @first is a product portfolio designed to provide anti-fraud services to operators. This is not an add-on to any
international service offering and represents an attempt by Orange to monetize its anti-fraud capabilities in a separate
revenue stream. Orange identified the need for anti-fraud products some time ago and cited it as a possible differentiator
for carrier voice services in the future. Orange is now taking its anti-fraud capabilities to a new level with this separate
product innovation, although the carrier expects it to work as a support to its existing portfolio rather than a completely
independent product range.
Strengths
Weaknesses
Meets a customer need among mobile operators and
newer/smaller telcos to be helped through the difficult mire
associated with fraud on international services.
Difficult to establish channel to market and credibility
beyond Orange’s existing customer base.
The role of international carrier is one of the few that allows
a new fraud prevention supplier to get through the inherent
reluctance of operators to talk about fraud.
Fraud is a delicate subject and many operators want to
have control over their fraud protection, not to outsource it.
As a carrier, Orange has intimate and internal knowledge of
the interconnection market that allows it to target anti-fraud
efforts more accurately.
Ovum view
This is interesting because it’s an early example of an international carrier taking an inherent capability and productizing it
as an outsourced solution. In fraud protection, Orange has chosen a capability that is undoubtedly in demand, but one we
believe will be difficult to build a business around, although its focus on SIM-box fraud means operators will be more
willing to pay. Fraud prevention is a great add-on to Orange’s international service portfolio, but we expect it to struggle to
gain traction and significant additional revenue as a standalone product portfolio.
20
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Orange International Carrier Services
@first: score 2.6
Size of the
opportunity
5
Score: 4
•Utilizes existing carrier
capabilities.
• Leverages existing
operator relationships
• Fits with Orange’s
strategy to expand into
higher margin businesses
• Orange has worked with
some fraud vendors in
developing @first but it still
takes Orange outside its
traditional business and
into competition with fraud
specialists.
4
3
Alignment with
company strategy
and strengths
2
Impact on the
wholesale market
1
Score: 2
• Targeting a market where all telecoms
and increasingly other service providers
suffer fraud and revenue loss through
international/inter-network transactions.
• The size of opportunity is limited by
the revenue that can be associated with
this alone and the ability of @first to
reach beyond the Orange footprint.
0
Score: 3
Potential for
customer take-up
Uniqueness/value
of first-mover
advantage
Score: 2
• Fraud prevention capabilities from carriers are usually viewed
as value-added customer retention tools rather than revenue
generators. Getting operators to recognise the revenue-enabling
elements is a more complicated sell and involves more
departments.
• Operators need to provide Orange with access to some of their
network capabilities that some will not be comfortable with.
• Provides a test case for the
packaging and separate selling of
capabilities that are part of other
services.
• Its impact on the market is limited by
the difficulties of selling fraud
prevention.
Score: 2
• This will impact fraud solutions providers more than Orange’s
wholesale competitors.
• All global carriers have most of these capabilities and could
package them together if they see Orange gain traction in the
market
• BICS has a substantial mobile money capability that it can
also leverage in the same way.
For more on Orange International Carrier Services, see further reading
21
© Copyright Ovum. All rights reserved. Ovum is an Informa business
UK Broadband 3.5GHz fixed wireless broadband:
summary
Description
PCCW-owned UK Broadband became the first in the world to offer wholesale fixed wireless broadband access based on
TD-LTE technology in the 3.5MHz spectrum most associated with WiMAX. Targeting high-demand niches, this technical
innovation also comes with flexible business models. In addition to a traditional wholesale model, UK Broadband is
offering to build bespoke networks in collaboration with partners to cover specific priorities of that partner, such as a
village, town center, university, estate, or other campus.
Strengths
Weaknesses
Uses an existing, underutilized , large, and lower-cost pool
of spectrum.
Relies on the availability of devices in sufficient numbers
and at a competitive price, which is more difficult in unusual
spectrum bands.
Leverages a lower cost base to fill gaps in coverage of
other broadband services.
Limited by the propagation characteristics of the high
frequency, which struggles over longer distances.
Ovum view
This is an interesting development as it uses the latest 4G mobile technology to breathe new life into the outdated
wireless local loop model. The lower cost of this spectrum when compared to “mainstream” FDD LTE bands gives UK
Broadband a way to address areas other fixed and mobile technologies render uneconomical. However, there are
limitations both from the technology itself and the vendor ecosystem that surrounds it. In order to be successful, there
must be significant activity from the vendor community to build competition and economies of scale that will maintain the
cost benefits. While Huawei is committed to developing TD-LTE products, Ovum believes vendors will spend more effort
on mainstream products in the short term.
22
© Copyright Ovum. All rights reserved. Ovum is an Informa business
UK Broadband 3.5GHz fixed
wireless broadband: score 2.4
• UK Broadband doesn’t
have an existing mobile
business so may struggle
to gain credibility for a
new technology in this
area.
• The size of the addressable market is limited
by its application to areas not covered by fixed
access technologies.
Size of the
opportunity
5
Score: 2
• Builds on UK
Broadband’s existing
wholesale broadband
business.
Score: 2
• It is further limited by the propagation
characteristics of the technology, which make
covering large distances difficult thereby
minimizing its potential for rural coverage.
4
3
Alignment with
company strategy
and strengths
2
Impact on the
wholesale market
1
Score: 2
0
Potential for
customer take-up
• As a technology first, the market
will pay attention, especially as
others in the UK have similar
although not identical spectrum
holdings. However, its application is
limited, meaning that it will make
little overall impact on the wholesale
broadband landscape in the UK.
Uniqueness/value
of first-mover
advantage
Score: 4
Score: 2
• Taking the service does not require significant investment or change
on behalf of UK Broadband’s customers.
• The take-up by end users will be limited by their willingness to wait for
devices and the limited choice of user devices. A smartphone will not be
available until later in 2013 and then only from Huawei.
23
• Only one other company – Spectrum Access –
has spectrum in this band, and that is used for FDLTE and not usable with the same TD-LTE
equipment that is being supported by Huawei.
• The ability of UK Broadband to take advantage of
this technical asset will be limited by the availability
of the right premise and user devices.
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Research methodology (1)


24
Innovation categories

Product/service – innovation in a new product or service launched in the market in 2012.

Go-to-market – innovation in the approach to taking an existing or new product to market, such as through
bundling, partnerships, etc.

Strategy – innovation in a company’s strategy for improving its overall network, market, or revenue, such as
addressing a new market segment or using assets in a new way.

Business model – innovation in the business model (way of deriving profit) being used for an existing or new
product, such as changing the cost base or pricing model but not prices.

Technology – innovation in the underlying technology for a new or existing product or service, such as
combining previously separate technologies or creating a new network structure.
Rating criteria

Size of potential opportunity – the incremental size of the opportunity in terms of revenue. Innovations in
international and national markets are assessed within their own markets.

Impact on the market – whether the innovation creates a new benchmark, product, service, or strategy that
could redefine wholesale in its particular area for the industry. Includes whether others will have to follow.

Value of first-mover advantage/uniqueness – the uniqueness of the concept and the value of first-mover
advantage in the short and longer terms.

Potential for customer take-up – how compelling and how easy it will be for customers to take up the
innovation. Looks at technical and cost barriers weighed against the benefits..

Synergy with the company’s strategy and strengths – whether this is a new venture and how credible the
company is in the market it is innovating in.
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Research methodology (2) and further reading

Scoring


Research


25
Each criterion was scored on a scale of 1 (lowest) to 5 (highest) by the Ovum Wholesale team, drawing on over
60 years of combined telecom industry experience. The scores for the five criteria were averaged to give an
overall score for each innovation.
This report was written based on a mixture of primary and secondary research on the wholesale market
conducted throughout the year. Ovum continuously conducts primary and secondary research into the wholesale
telecoms market around the globe. That process includes briefings with a wide range of telecoms service
providers, wholesale competitors, suppliers, and customers, as well as reviews of publicly available primary and
secondary sources.
Further reading

Tata Communications (wholesale) profile, TE012-000291 (July 2011)

FT-Orange (wholesale) profile, TE012-000361 (March 2012)

TeliaSonera International Carrier profile, TE012-000422 (July 2012)

Mobile Wholesalers Pursue New Opportunity as MVNO Enablers, TE012-000439 (January 2013)

“Akamai shines its Aura on wholesale market,” TE012-000403 (March 2012)

“Akamai solidifies its position in carrier CDN with two moves,” TE012-000438 (November 2012)
© Copyright Ovum. All rights reserved. Ovum is an Informa business
Disclaimer
All Rights Reserved.
No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior permission of the
publisher, Ovum (an Informa company).
The facts of this report are believed to be correct at the time of publication
but cannot be guaranteed. Please note that the findings, conclusions, and
recommendations that Ovum delivers will be based on information
gathered in good faith from both primary and secondary sources, whose
accuracy we are not always in a position to guarantee. As such Ovum can
accept no liability whatever for actions taken based on any information
that may subsequently prove to be incorrect.
26
© Copyright Ovum. All rights reserved. Ovum is an Informa business