telecom • internet • media

DigiWorld Yearbook 2012
➜ The challenges
of the digital world

DigiWorld Yearbook 2012

Game changers for a new digital world H

yper-connectivity is here, illustrated by the surging numbers of mobile users in every country on the planet, and by the impact of smartphones on Western markets. Alongside this, bitter battles have been raging between industry heavyweights in recent months. At stake: their control of services and applications in the cloud, and their ability to manage and monetise the massive amounts of ‘big data’ being accumulated. Concurrently, the telcos – especially in Europe – are struggling to redefine themselves, faced as they are by over-the-top players muscling into the fray. Their challenge is to secure a return on the investments required to deploy new superfast networks, both wireline and wireless.

ISBN : 978-2-84822-294-3

DigiWorld Yearbook 2012

Paris) and international business trips • DigiWorld Events: the annual DigiWorld Summit and a series of specialty seminars on this year’s game changers • DigiWorld Publishing: the DigiWorld Yearbook and Communications & Strategies (DigiWorld economic journal) • DigiWorld Collaborative Research: run by IDATE analysts with contributions from outside experts. the three main themes being explored in 2012 are: ‘Distributing Content in the Cloud’. DigiWorld Institute and DigiWorld Yearbook are international trademarks of IDATE . This book has been edited under the direction of Hélène Ollivier and Didier www. without the prior written permission of IDATE. IDATE has gained a reputation as a leader in tracking telecom.idate. The DigiWorld Institute therefore offers members the opportunity to participate in the following: • DigiWorld Clubs: a series of monthly meetings in a European capital (Brussels. All rights reserved. Translation: Gail Armstrong. DigiWorld. with the support of close to 40 member companies – which include many of the digital economy’s most influential players – the newly rebranded DigiWorld Institute has entered into a new stage of its development. London.. Internet and media markets. Now. None of the contents of this publication may be reproduced. stored in a retrieval system or transmitted in any form. One key direction for us will be increasing the emphasis on our European think tank activities.IDATE creates the DigiWorld Institute Founded in 1977. thanks to the skills of its teams of specialized analysts. +33 (0) 467 144 444 Fax +33 (0) 467 144 400 email: The data provided in the DigiWorld report and the analyses and opinions it contains do not necessarily reflect the views of Foundation member companies. including electronically. Graphic design and production: Jacques Lucchino Graphics: Mathieu Tanguy © IDATE 2012 ISBN: 978-2-84822-294-3 ISSN: 1776-0151 IDATE. ‘Smart City’ and ‘from NGANs to Next Gen Telcos’. Paul Osborn. IDATE BP 4167 F 34092 Montpellier Cedex 5 France Tel. www. collaborative research). reports) and the DigiWorld Institute ( > 14 & 15 November 2012 .DigiWorld Yearbook 2012 ➜ The challenges of the digital world Please welcome this 12th edition of our annual round-up of the outstanding issues and events that are shaping the digital Something to say? Please send all comments and suggestions to Sophie Monjo: s. publications. events. visit us online at: www. > Available in English and French for e-books and iPad To find out more about IDATE (consulting.digiworld.

6 DigiWorld 2012 Foreword Foreword .

through our think tanks. our market reports. In order to promote and underpin our work of debate and exchange – whose highlights include the annual DigiWorld Summit and our DigiWorld Clubs in Brussels. The diversity of our membership is a trusty guarantor of our independence. François BARRAULT Chairman of IDATE www. Please. and his teams. you will find a condensed version of the analyses delivered throughout the year in some 40 specialised market reports. partner and keynote speaker. Internet and media industries. A great deal of importance is lent to the observatory aspect of the ‘DigiWorld Institute by IDATE’. in our three market watch services and in a host of support assignments for our clients.I had the honour and pleasure of being elected Chairman of IDATE in late 2011. Together. client. I should also like to pay tribute to the support provided by our members. we need to create a credible system for keeping track of the latest innovations and market developments. and whose many facets – not to mention the tremendous quality of its teams of specialists – I had appreciated as a member. Francis Lorentz – whose eleven years of excellent and committed work I should like to salute – and which has got underway under the guidance of our CEO. we must maintain the quality and independence of our analyses. and until the next time we meet. The aim of this exciting project is to transform our institute into a more European organisation with an international outreach. our dialogues and your suggestions. It was an organisation that I had already known well for several years. This monitoring process took on momentum when. Of course. in particular on the Internet and in all new viral media. I should begin by saying that my interest lies to a large degree in the plans that are underway to transform IDATE. we can grow the Yearbook into a European and world reference work that serves our overall community in its daily steps of transformation and evolution. therefore. Yves Gassot. We need to enrich it. and to let it become essential reading in the discussions about digital Foreword 7 . eleven years ago. our analyses. only just out of its starting blocks. At this stage. In some ways. allow me to point out that the opinions expressed in this document are solely those of our teams.idate. We must improve its circulation and its outreach. for me. London and Paris – and to offer public and private sector players the resources of a think-tank (as in our collaborative research programmes). it comprises the ‘best of’ the work performed by our analysts and consultants over the previous 12 months. which include gradually reorganising our operations under the DigiWorld brand. These are what account for the sterling reputation enjoyed by our market reports on the latest developments in the telecom. to whom I extend my heartfelt thanks. In addition to the expertise of our teams. this annual report is. IDATE launched this annual review. while welcoming new players into our thriving and ever-evolving ecosystem. enjoy this edition to the utmost. The institute needs to strengthen its collaborative research capabilities by creating an open and relevant platform for industry players and public authorities to think together about the future. This was a project supported by my predecessor. In its current embodiment. and provide solid datasets and thought-provoking analysis. In this edition of the Yearbook.

....48 Television services ....54 DigiWorld markets by region ................................ 7.........................................................................46 IT equipment ....... 2................................................92 TV access........................................................................................... 3...........116 Music industry being retuned .................................................................................. 6............................ 2.............................................................138 E-commerce ................................. 2..............................................110 Video games powered by innovation ..........................66 DigiWorld markets in Asia-Pacific (1/2)................................................................................................................................................................................................ 1.................................................... 1.......................................................... 7...............84 Mobile access .............94 The digital home: era of the Internet-ready device .......................... 4............................ 1....................................122 Online advertising ....................................................................................................................................................................... 9................ 8.....................................................................50 Consumer electronics .....................................................................26 ICT and growth .........................................112 Bundles loosening the strings .142 Smart cities .....114 EBooks ......... Momentums compared ............................................. 1..................................... 7........................................................................................................................................................................98 Chapter 6: The new markets of the Internet ....................................................................................................................................................................108 Economics of the cinema: the great shake-up ...7 Part 1: DigiWorld Atlas Introduction ......................................................................................................... 6.............30 ICT stock prices .........................................................................118 Radio ................................................................................................................................................................................................................42 Telecom equipment ............................................................................................................................................. 8.......................................................................130 Mobile Internet ........................134 Open data ......................................................................................... 8................ 5........................................................................................................ 2. 4...........................................................................................................................................................76 Contents 8 DigiWorld 2012 Chapter 5: Consumer services and content .............................................................................................................................................................. 4..................................................................... 4......................................................................................................40 Telecom services......................................................................................... 4.................................................................................................................................................................................................................................................................................................................. 6.........................88 Mobile handsets ... 5.........................................................................................................74 Wireline access......................................................................................................28 ICT production..................................................................................................................................................Contents Foreword ................................................................106 The DTT comeback ...................................... 3................................................................................................................................................................. 10............................................................................................................................................................................20 1.................................................. 3..............................................................................................................................124 ..86 LTE (Long Term Evolution) ...................120 Print media and the Web ................................................................................................................... 1........... 2. 5.............................................................................................140 M2M and the Internet of things ...32 DigiWorld markets by sector ........................................................................144 Chapter 2: Markets and players .........................104 Connected TV & OTT content.................................................................................................................................................................................................... 5............. 7.62 DigiWorld markets in North America .......................................................................132 Social networks ..................................................................................................................................................................................................... 4....................................................................................... 7.............................................................................................................................. 5.........52 Internet services ....11 Chapter 1: The DigiWorld in the global economy...................82 The fibre issue .................. 3............................................................................................................68 DigiWorld markets in Asia-Pacific (2/2).... 3................... 6..................................................34 Chapter 3: Geographical shifts: just the way it is? ..........................................................................................................................56 Chapter 4: Access and devices......................................................................................................................... 8..................96 Future challenges for TV networks ..............................70 DigiWorld markets in Latin America .................................................................................................. 6.............................................................72 DigiWorld markets in Africa-Middle East ......................................................... 2...............64 DigiWorld markets in Europe .......... 3................................................................44 IT and software services ......................................90 Spectrum: the mobile broadband bottleneck..............................................136 Cloud computing ................

.....................................................................................................159 July .............................................................................................................................................153 April .............................................................................................................................................................. T-Mobile: chronicle of a failed merger............................................................................................148 Dahlia TV pulls the plug Contents The price of 4G spectrum ..........................................................................................................................................................................................................................................................................................................................................................................................................................................171 Country profiles France ...............................................................................177 Spain ...........................................................................................................................................................................................................155 May .........................175 Italy ....................................................................................................................154 Telco consolidation in emerging markets ...........................................................................................................................................................................................................................................................179 Brazil .................................................................151 March.......................................................................................150 AOL buys The Huffington Post ............................149 February ...................183 Japan ......................................................................................................................................................................................................idate........................................................................................160 Is cord-cutting really affecting America’s pay-TV market? ....................................................................................................184 South Korea .................................................................................................................................................................................................................................................157 June ..........................189 www..............................................................................................................................................................................................................................................................................................................................................................182 India ..................................................................168 Decembre ......................................176 Russia ........................................................................................................................................................................................................187 Index ..........................................................................................174 Germany .................................................................181 China ......................................................................................................................................................................................................................180 United States ...........................................................................Part 2: DigiWorld chronicle January ..........................................................................................................................................................................................................162 Just how far can the patents war go?.................................................................................167 November .............................................................................................................................178 United Kingdom.......................................................................................................................................................163 September ..........................................................................................................................................................................................................................................................169 9 ................................................161 August ...166 Netflix at a turning point .........................................................................................................................................................................................................................................................................................165 October..........................158 Launch of Google+ ..........................................................................................................................156 Wholesale operators to perform large-scale LTE rollouts? .................152 Net neutrality still sparking debate...............................................170 AT&T.....................185 Annexes Glossary .................................................................................164 Spotify comes to Facebook .....................................................................................

10 Introduction DigiWorld 2012 Introduction .

It is the leading supplier of Apple components but. www. more than Google enjoyed as revenue over the entire year (37. counterattack and be able to negotiate.5 billion USD to get its hands on Motorola 11 Introduction . we have Google. namely Nokia and RIM. appears capable of sustaining a third mobile operating system over the long term. cash flow1 and market capitalisation. and now with their tablets and their many apps. It had the highest sales of any smartphone on the planet in the last quarter of the year. 4. Profits exceeded 1 billion USD a week. Google spent 12. If we look only at the percentage of handsets operating on Android. in order to defend themselves. It has managed to make the iPad its second source of profits. In November 2007. In addition. 5. Of course. with which Nokia was forced to ally itself in early 2011. the Android SDK was made available to developers. On the one side. The company has 100 billion USD cash on hand.2011 Patent wars… belonged in many ways to devices – a conclusion that led us to choose “Will the device be king?” as the central theme of our Summit in November. Meanwhile. Apple has broken all records in recent months in terms of revenue. if not faced up to. could threaten its position. Apple has sold more than 50 million iPads since March 2010. It was in August 2005 that Google took control of startup Android. profits. They had a combined 55% share of the smartphone market in Q4 2011. Next. it is hard not to mention the paradoxical position occupied by Samsung. A great deal of ink was devoted to the top two market players. On the other side. As happened with the iPhone. with a business model built on the comfortable margin the company enjoys on the sale of these devices.9 billion USD). which puts in neck-and-neck with Exxon for the world’s highest market capitalisation. So let us start with that. The flipside of all this drama is that the main protagonists have sought to strengthen their portfolio of patents at all costs. Samsung became a favourite target for Apple who launched a series of lawsuits against manufacturers in the Android camp. and who more than five years ago3 recognised that the mobile Internet was going to take over. and we shall finish with a few words about the state of the telecommunications sector. Microsoft also stood out for its takeover of Skype in 2011 for The ongoing love affair between consumers and their smartphones. equal to that of HP and more than Verizon or Cisco. As for its market cap. it also became the leading supplier of Android smartphones which are holding their own entirely against the iPhone5. particularly in Europe.3 billion USD. a move which. It was not until October 2008 that the first Android-equipped handsets were shipped (by HTC). with an impressive list of complaints involving virtually all of the market’s major players. as of Q4 20112. only Microsoft4. these two rivals still occupy very distinct camps. continued to make headlines last year. or 73% more than the year before – in other words. we shall look at what we believe are the three major disruptions at work in the digital world. 1. Steve Jobs unveiled the first iPhone in January 2007 which was in shops by June of that year. After having been abandoned by HP. a veteran Web player who earns most of its income from advertising thanks to sponsored links. its rivals (notably Samsung and Amazon) will need more than a year before being able to compete with Apple in this new market.5 billion USD. The fourth quarter earnings of Apple in 2011 amounted to 46. As a result. its OS is open source and has been spectacularly successful – adopted by all handset vendors. The bitterness of the battle between Apple and Android played out on the patents front in 2011. When looking at what appears to be a twohorse race between Apple and Google. over the course of 2011. with the obvious exception of Apple and the two companies that have been losing ground these past few months.idate. 3. we have a seller of integrated and relatively closed system devices. it stood at 415 billion USD as of the latest published figures (Q4 2011). doubling its tablet sales in a single year. Apple and Google. 2. it was Google who ended the year with a slight advantage on the smartphone front… but it is Apple that emerges victorious if we look at the success of the latest iPhone.

and new services in areas such as social TV. regardless of whether they are employing a wireline or wireless network.Internet giants’ income statement. … and platform battles Looking beyond the ferocious competition between smartphones and their operating systems. Ericsson. but is one of the top destinations on the mobile Internet. namely that devices are only the visible portion of this ecosystem that is made up of a complex and still uncertain interplay of platforms located along the value chain. the goal being to allow consumers to move seamlessly from their smartphone to their tablet. combining a tablet and a TV screen.5 E-commerce 3. Microsoft. This is paving the way to new products. EMC. and now has more mobile than fixed users.6 83.8 33. Then.9 9. to this scenario we need to add the meta-platforms of social networking sites and the Web itself. Facebook has not invested in producing its own devices.7 196.000 patents. online shops and data processing platforms. It is also creating sizeable challenges for app developers and vendors. in the last quarter. Introduction 6. This popularity has not secured it any direct source of income as yet. The first earns most of its income from its online retail business. through a personal hotspot or a multi-device plan.7 Smart devices 48. It made its mark on two fronts in 2011 in the arena of devices.0 514.8 PC software Source: IDATE 12 DigiWorld 2012 Mobility and its 17. At every level. At least two other players warrant a mention here: Amazon and Facebook. 2011 Billion $ Turnover Net income Capitalisation Main source of revenues 127. HTML5 should help open things up. and to telcos’ access networks. it launched the Amazon app store for Android smartphones and tablets. it released an affordably-priced tablet called the Kindle Fire. competing directly with the Android market. while Intel has got its foot in the door with its Medfield SoC.0 100 ? Advertising 37. computer or TV screen. which will only replicate the fragmentation of proprietary ecosystems.1 23. Which leads us to the second point. there are subtle strategies at 7. RIM and Sony for the acquisition of a set of Nortel patents. there are at least three major points that really stood out in the discussions that took place during the DigiWorld Summit last November in Montpellier. Of course.1 0. The first has to do with the new environment created around the proliferation of devices and displays. however.5 268. which is backed by tremendous IT and logistics skills. . so it can only lobby for access to the ecosystems dominated by the leading OS and smartphone players6.8 Advertising (search/sponsored links) 72. This is a fierce battlefield that is currently dominated by Qualcomm (49% market share for smartphones) and ARM which licences its architecture for the vast majority of chipsets being used.7 1. with some degree of success. All this is expected to occur smoothly. after having been outbid by a consortium made up of Apple. provided we do not end up with multiple versions of it. Early in the year. from the choice of processor7 and OS to app stores.

Smartphones will enjoy an increasingly large share of the market in the coming months thanks to models priced at 100 USD and less. while on the other side of the market (namely vendors. and which employ a dynamic combination of open access and lock-in techniques. Data now account for the majority of traffic on mobile networks. China recently reported having one billion mobile users.idate. access will be charged for. advertisers and the like). So. Introduction . Chips OS Applications Store Store. In Kenya. This results in particular pricing strategies: for instance. Social.4 billion mobile handsets were sold in 2011 – which is around one for every five people – of which close to a third were smartphones. Which brings us to the third main point to emerge from the discussions. 2) content in the cloud. 13 www. cellular networks are converging more and more with wireline and wireless (WiFi) fixed networks. 425 million accessed the site via mobile – a number that is expected to keep on growing. they already outsold personal computers last year. based on two-sided approaches8. Operating cellular networks is the main source of income for telecom carriers the world over. Of course. Mobile everywhere Probably two thirds of developers today are working on mobility. The game changers Every year at this time. Of the 845 million Facebook users around the planet at the end of 2011.Two-sided markets Consumers Networks access Devices can cover most of the major trends at work by naming three core disruptions that are affecting all of the digital economy’s stakeholders: 1) mobile everywhere. Two-sided markets are characterised by platforms that create interdependence between two types of user. and doubling roughly every year. But we shall come back to that later. But there is growing talk of substitution. IDATE estimates the number of LTE users around the globe at the end of 2011 at over 5 million. Without overlooking the reductive aspect of this exercise. consumers will be given access to a certain type of platform for free in a bid to maximise user numbers. the M-Pesa mobile payment system is used by 15 million people who have no bank account. namely the uncertainties over the position in the marketplace for telcos who are now having to reinvent themselves. Web Networks Content Source: IDATE work. to be able to handle rising bandwidth. This is truer still in emerging economies which are gaining access to telephony and the Internet through cellular networks. it is the ecosystem that makes the difference. and 3) big data. The process naturally takes place in tandem with the writers of the various chapters of this report. “will the device be king?” Well. both in-house and with our members. of whom more than 60% are located in the United States. we debate which topic to choose as the central theme of our next 9. More than 1. Fourth generation mobile networks – which are being ushered in by the LTE now being deployed in several Western markets9 – is poised to deliver connection speeds that are equal and often higher than what ADSL networks can supply. I think we 8.

their preferences. and the growing number of sites offering Introduction . end 2011 100% 80% 60% USA Japan 40% South Korea Germany Sweden 20% 0% Verizon Wireless AT&T NTT DOCOMO LG U+ SKT Deutsche Vodafone Telia Telekom Sonera Source: IDATE 14 DigiWorld 2012 A few months back. their unparalleled expertise that comes from their control over these massive installations. their friends (social graphs) and location at any given time. anytime. the ones that users carry with them at all time. their existing server capacity. Cable continued to dominate the American fixed broadband market in 2011. Getting back to the consumption side of the equation. that the main source of change in hightech lies in innovation and the power of the consumer market. Here we find the ‘consumerisation’ phenomenon which has acknowledged. search. ousting downloading and peer-to-peer. The Internet giants have already deployed 10. to our content and applications. when acquiring the spectrum that belonged chiefly to Comcast and Time Warner. and to find them when switching from one screen to another. It is true that in the last days of 2011. This is the underlying thrust of the creation of a massive database on users. and even monitor our health when necessary. all these elements can readily translate into solutions tailored to smaller enterprises. LTE would be the solution used to supply them with superfast access. The best known examples are undoubtedly the infrastructure services sold by Amazon (AWS) and the Google desktop applications (Google Apps). Content in the cloud To have access anywhere. invariably requires configurations where these files and apps are stored in the cloud. They are the ones that allow us to connect to other devices.LTE coverage. Verizon10 was saying that for the 40% of its fixed subscribers who did not have an optical fibre line. the clearest illustration of content in the cloud over the past several months probably comes from the fact that streaming is now such a commonplace. machines and sensors. guarantee our identity and authorise transactions. While by no means dismissing the major disruption that the switch to cloud computing represents in the development of businesses’ information systems. Cellular networks will also be vital to the Internet of things which will involve a growing number of connected products. gigantic data centres to deliver their communication. the explosion of consumer use of the Web has no doubt given the Internet giants a solid headstart in preparing for the IT environment of the future. which drove some analysts to advise Verizon and AT&T to focus their efforts on LTE. their behaviour. Mobile systems are also the ultimate in personal access. Their brand name clout. for several years now. browsing and online shopping solutions. Verizon was quick to sign a sales agreement with the two cable giants. This change in the pecking-order is thanks to the popularity of music services like Spotify and Deezer.

such as search engines. Let us steer clear here of the blackand-white view that big data equals Big Brother. Interaction with other websites and players. In his introduction to Chapter 6. On this topic it is also worth exploring the work of Harvard professors and think-tanks on the concept of Vendor Relationship Management (VRM). preferences.streaming of films and TV programmes that may (Netflix) or may not (MegaUpload) comply with copyright laws. both personal and otherwise. insurance and banking. This information gathering process has of late gained another dimension with the massive popularity of social networking sites. makes it possible to create a new generation of services and to improve existing ones. It brings a new dimension to the gathering and use of such information. 15 www. the Internet heavyweights and advertisers remain circumspect. and find the best way to ensure their rights are respected (cf. Another contributor to this phenomenon are such services as iCloud11 and Dropbox that allow anyone to store their files. They find ads in line with their centres of interest less intrusive. The unveiling of iCloud on 6 June 2011 was the last public appearance of Steve Jobs before he passed away on 5 October. The availability of massive amounts of data. They appreciate recommendations based on something one of their ‘friends’ has bought. They began gathering this personal information through the profiles which users complete themselves. In comparison. content in the cloud is certainly the main route to online delivery being taken by the entertainment industry today. but they are willing to give their credit card number to a company like Amazon or Apple. Internet companies were quick to suss out the role they could have in the business models attached to these metadata. and so access them from anywhere. automated translation and image recognition. and non-personal information through the cookies that track the behaviour of an IP address travelling the Web. notably through 11. They do not like to divulge personal information. Vincent Bonneau believes that the only way to rein in the development of these practices is by reinforcing copyright compliance checks. And it is here that we can no doubt glean considerable differences in the equity of top brands and their desire to protect it12. APIs and app stores. This only shores up the role of intermediary occupied by a few select companies of the likes of Google and Facebook. Big data Driving this huge surge in traffic is an explosion in the quantity of data. anytime. The notion of big data first emerged from data warehouses. data mining and analytics in traditional sectors such as *** 12. in the cloud. Introduction . are another way of accessing third-party data. Here too. Internet users are increasingly aware and street-wise. the introduction to Chapter 5 by Gilles Fontaine). whatever.idate. combined with structured and unstructured data processing technologies. and especially of how users and the law react to the issue of privacy and personal data protection. who have achieved a deserved notoriety) on the Net. which have focused a great deal of energy on building juggernaut advertising departments and their own payment solutions such as ‘CheckOut’ (Google) and ‘Facebook Credits’. This information is employed to boost the value of advertising space or to secure sales commissions. that is available on users and their environment via the Internet of things. By combining streaming and storage capabilities. It gives a starring role to the various distributors who have made their bones (meaning. which drove Google to attempt to rival Facebook with Google+. It is through them that content producers will need to fashion their online presence.

The decrease in call termination charges has had a negative impact on operator income. not without assets. Optimistically. In addition to lagging behind when it comes to the mobile Internet. although the difficulties being faced by its telecommunications sector today are a real cause for concern. and thousands of enterprises devoting themselves to a new wave of innovation. for instance.9% in 2011.40 USD per user. which we believe is largely counter-cyclical16. even if it has also meant a decrease in costs. We do nevertheless see higher penetration levels for smartphones15 and a substantially higher percentage of income coming from data in North America – accounting for 38% of retail market revenue there. mind you. 16. Europe did nevertheless lead the way in the liberalisation of telecom markets. on the other. and we expect eventually to see a player drop out of the German.5% growth for the EU compared with + 4. Google. Compare. with 1 billion USD in profits for earnings of 3. compared to barely 31% on average in the European Union. Austrian and Belgian markets as well. Data published by Facebook as part of the run-up to its IPO underscore three trends: 1) its profitability. helps to underscore the extent to which Silicon Valley continues to lead the charge. This is nothing new for fixed services. The upcoming Facebook IPO. We are in danger of seeing a price war that would drastically reduce telcos’ income and their margins17. Greek telcos have reported losses of 15% on the year. They are not alone.71 billion USD. or to regional players that can rival them. other factors are also responsible for this gap. as is the case in the biggest Asian markets and in Russia. Amazon. Verizon Wireless. Consumers would only benefit in the short term as the situation would probably hamper future investments. this is no longer the case. and Spanish and Portuguese telcos 7% to 9%. The new landscape to emerge from the combination of these three points will be the focus of the next IDATE DigiWorld Summit on 14 and 15 November 2012. or 4. It cannot lay claim to be home to any of the global Internet leaders. it will be worth keeping an eye on France and how the situation resulting from the arrival of a fourth mobile network operator evolves. average smartphone penetration levels amongst Vodafone subscribers in Europe (25% at the start of 2012) with the 45% penetration reported by its jointventure in the US. Over the past several quarters. 14. and 3) a second source of income by building up its platform strategy which today accounts for only 17% of revenue. The expected valuation is between 75 and 100 billion USD.7% for North America in 2011. with a market cap that is expected to be spectacular14. for instance. chasing hard on the heels of Zynga. And this at a time when 15. The double-digit growth enjoyed by broadband access only temporarily offset the decline in calling and landline subscription revenues. this could have been attributed this gap to the fact that Europe had a more mature mobile market. 17. but up from 5% in 2010. Swiss. Europe is.With each of these three key points13. It has done well. More surprising is the roughly five-point gap in growth rates that 13. The steady drop in fixed network income is equally significant on both sides of the Atlantic. we find the presence and skills of Apple. 2) the potential to earn additional revenue with mobile. with a low-cost segment on the one side and. Microsoft and Facebook at work – different though they may be amongst themselves. An impoverished telecom industry? The European Union market for telecom services posted negative growth of – 1. Here. however. Three or four years ago. which is due in large part to the markets of southern Europe. The recession has also revealed some cracks in what was once thought to be an impervious sector. having paved the way for suppliers and partners. Increased competition is also having an effect. Groupon and LinkedIn. Today. we can hope to see an accelerated differentiation in the marketplace. a segment offering a combination of QoS commitments in customer relations and network performance. and in creating high quality solutions in terms of infrastructure and the services on offer. 16 DigiWorld 2012 has set in between the European and North American mobile markets since 2008: – 0. Consolidation seems the more widespread trend at work in such markets as the Netherlands and the UK. Introduction . the bulk of which is earned by Zynga (12% of Facebook’s total revenue). an area that is still under-exploited.

Of course. Even the analysts may change their minds and wonder. each with three or four competing telcos. 19. Plus the unsustainable levels of debt resulting from the “guilty exuberances” of the early part of the 21st century have largely been eradicated by the revenue 17 www. on the whole. as some did recently when KPN published its latest results. are suffering from shrinking revenue and margins and which are investing 18. The situation in European telecommunications is thus mediocre at best. they have had no shortage of hurdles to overcome since the markets were deregulated. Europe is no longer the leader in deploying new generation networks. So we have operators in Europe which. It is worth remembering that although AT&T was able to acquire T-Mobile for 39 billion USD.Mobile services market growth in EU-27 and in the US 12% 10% 8% 6% 4% 2% 0% -2% 2007 2008 2009 2010 2011 2012 EU-27 USA Source : IDATE telcos in Europe are already spending less than their counterparts in America and Asia. It also seems likely that the failed AT&T merger. whether the priority given over the past few years to cash on hand and dividends. the liberty which Telefónica took in 2011 in announcing that it would be cutting its dividends will be followed in the coming months by similar announcements by other operators19.idate. will result in additional mergers in the US market. No doubt. As for LTE. It is under these circumstances that telcos are having to contend with a radical change in their environment. the explosion of the mobile sector did go a long way in softening the blow of liberalisation. it should be said that. Introduction . coupled with its need for spectrum. did not make these companies especially vulnerable. at the expense of investments in the network and customer relations. And this at a time when the prospect of a single market enabling the emergence of huge pan-European operators still lies very much in the realm of theory. the state of the sector’s consolidation there is a far cry from the Europe telecommunications market which is a checkerboard of 27 distinct markets. and the problems that T-Mobile and Sprint are facing. That said. the two entities would have had a combined market share of 42%. Financial markets have put the top carriers in the high-yield securities category: their performance is measured essentially by their ability to generate free cash flow that will guarantee their dividend commitments. and at worst alarming. Even if the AT&T/T-Mobile18 merger was quashed in the United States following antitrust concerns and objections from the FCC. It does seem like that by 2020 only just over half of Europeans will have access to a fibre connection. despite pioneer rollouts in Scandinavia and Germany.

This paradigm shift is a difficult one get through. The first consequence of this is that their business models need to concentrate on creating value around providing access. If they are to re-endow both mobile and fixed access with value by designing a new way to segment the market. Additionally. not only in Europe. need to adapt to a situation where applications are by and large out of their hands and controlled by overthe-top (online) players. Today. and to seek to provide operators with the means to evolve. caught between the top device makers21 and Internet platforms. especially through devices. although probably in a secondary fashion. allowing them to incorporate premium quality solutions into their line-up. Otherwise. Examples include mobile contactless payment systems using Near Field Communication (NFC) and integrated Rich Communication Suite (RCS) solutions designed to put initiatives back in the hands of mobile operators. we are not there yet. Whatsapp and BlackBerry Messenger. We should pay it more attention. All of the players in the ecosystem need a robust telecom infrastructure. For starters. We should point out that. but it is abrupt enough for European and national public authorities to acknowledge.6 million iPhones in 3 months! . 21. latency). Introduction Yves GASSOT. and spurred the development of the mobile Internet. and where traffic is going through the roof. the absence of many European players in the leadership of the new digital ecosystem is a major cause for concern. if these changes in direction are opportunities to distinguish oneself from the competition. Luckily. and compete with OTT services such as Skype. all operators. usage levels. we can point out that the telecommunications does not appear destined to be classified a mature sector. It is no small challenge for telcos to hold their own against the global titans that are the leading Internet companies and device-makers. they will need to go hand-in-hand with an increased focus on cooperation to ensure that the services integrated into the access ecosystem are fully interoperable20. To end on a positive note. integration of applications (guaranteeing QoS if necessary) and functions. revenue can also be generated through deals with OTT players. CEO.18 DigiWorld 2012 and operating margins that were scarcely affected when the bubble burst. And here. we could see a real impoverishment of the sector in the coming years. operators will need to introduce such factors such as quality (speed. IDATE February 2012 20. The second is that they need to find ways to monetise this growing volume of traffic to sustain ongoing investments in bandwidth. and the demand generated by new applications. telcos need to put an end to flat-rate plans based on segmentation by number of calling minutes and which included unlimited data traffic – although they did help to limit the rise of competing Voice-overIP services. The profits alone of Apple in Q4 2011 exceeded the total revenue earned by AT&T Wireless which sold 7. A clutch of solutions are already in view. and weakened by price wars. given the growing amount of bandwidth being consumed by Internet users.

19 .

20 The DigiWorld in the global economy DigiWorld 2012 .


The DigiWorld in the global economy


The DigiWorld in the global economy

DigiWorld 2012


The continental divide


he markets of the DigiWorld managed to eke out a modest 4.3% rate of increase in 2011, up to close to 3,070 billion EUR. In addition to the still uncertain economic environment in most corners of the world – especially in manufacturing and then, specifically, in the Eurozone – this average performance can be attributed to profound shifts taking place in ICT sectors. We shall take a closer look at these internal shifts in the next chapter.

Lasting changes Casting further back in time, it is interesting to measure how these markets have evolved over the past 20 years. Let us start with two series of figures. On the one hand, DigiWorld markets posted annual growth rates of over 15% throughout the 1990s – more precisely since 1993 – before suffering a brutal downswing after the dotcom bubble burst. Growth picked up again after 2003, but only managed to rise to the 7% mark in 2007 before the global financial crisis hit in the autumn of 2008. The recovery since then has resulted in less than 5% growth over the past two years. DigiWorld markets have thus undergone three cycles over the past two decades: shorter and shorter cycles (even if we cannot predict for sure when the current one will end), and in particular ones that ended with successively lower growth rates. On the other hand, the ICT market share of global GDP, which rose from below 7% at the start of the period to close to 9% in 2000, has been shrinking ever since – dramatically at first and then slowly but steadily from 2003 onwards. There was, at best, a brief respite in 2009 at the height of the credit crunch, and, at the time, many paid tribute to the relative resilience of the ICT sectors. These long-term trends are, in fact, a reflection of the fact that information and communication technologies have gradually become commodities – in other words, basic mass market goods and services – and so the trajectory of their value has followed in kind. Even new businesses

such as online services cannot escape the rule: their growth is entirely volume-based. As for prices, not only are they not rising, but they often have no correlation with those charged for the products and services they are replacing, VoIP and landline telephony being a prime example. Only smartphones appear, at first glance, to be bucking the trend, capitalising both on high volume sales – with users replacing their old handsets more quickly than usual – and prices that have remained high. Even here we find destructive elements, including embedded features on smartphones that make them rivals for other types of device; the way that spending on devices cuts into spending on services; plus those manufacturers that are being squeezed out of the market (cf. the plummeting Nokia share price). By the same token, when looking at things from a geographical perspective, the tremendous growth momentum being sustained by a few huge emerging markets is due to an increase in user numbers, and not in ARPU. Further, the impact of these growth pockets dwindles the more we move into the poorest regions: the rise of mobile telephony in rural areas of India over the past two years has brought down average per-user revenue there to among the lowest in the world. Decreasing growth rates, both intrinsic and relative, are therefore a reality: ICT sector revenues are progressing at an ever slower pace, and their direct contribution to the economy as a whole is also shrinking over time. However, we examine volume and the indirect impact of these sectors on the economy, an entirely other picture emerges. Never before has usage developed at such a pace: Internet traffic is growing by an average 60% a year in advanced economies, and mobile data traffic is doubling year on year. This is not without causing problems for those players operating the ‘pipes’ and the connections through which all this traffic is travelling: they need to find the means to invest in delivering ever more capacity, as well



and its indirect impact on total factor productivity in the United States and the major European markets. Other reasons can be given for why European ICT markets are struggling. First confirming the steady decrease of the digital economy’s contribution to GDP throughout the 2000s. starting in 1980 – reveals a contribution of 37% in the United States and only 26% in Europe. The digital economy’s share of GDP is an average three points higher in the United States than in Europe. the issue takes on a geo-strategic aspect as well: will Europe’s efforts allow it. This explosion in usage is very much a reality and. of investment and of skills. In the American stimulus package. in a broader sense. A recent report from CoeRexecode took a detailed look at this issue . slipping to less than a quarter in Europe. the report establishes that not all countries are equal when it comes to these indicators – with especially sizeable gaps between America and Europe. we also need to mention spending on R&D although. The digital sector’s contribution to growth stands at more than 30%. the United States has the upper hand. Europe in fact boasted a sizeable lead in the area of telecommunications. through fragmented markets 24 DigiWorld 2012 The DigiWorld in the global economy . as a result of which it was able to impose a number of standards on the global market. it has been in virtually identical proportions for each: going from 32% to 26% in the US and from 19% to 15% in the EU-15. underscoring that: “The objective of this Agenda is to chart a course to maximise the social and economic potential of ICT. In light of the figures cited earlier. Among the key ingredients in competitiveness. knowing that. ICT and growth The purpose of that report was to measure the direct impact of the accumulation of digital capital. the measures would only have an impact in the medium to long term. The European Digital Agenda expresses this expectation in a broader sense. most notably the Internet. Even the European Commission has held up high this litany of handicaps (ranging from the lack of interoperability. we spoke of several recent national stimulus programmes that put ICT front and centre. but the IP era has stripped it of its assets. This is a gap we also find when looking at business spending on ICT on either side of the Atlantic: telecom and IT hardware and software accounted for more than a quarter of company spending in the United States in 2008. on the contrary. in any event. with a gap that has been widening since the early 2000s. with a direct impact (as a production factor) which is generally less than its indirect effect (on productivity gains in the economy as a whole). with growth in the US at roughly half the rate of GDP growth and. More specifically. A look at securities – this time measured over a longer period. here again. Although this spending has dropped considerably since the start of the 2000s. at least to narrow the gap? Nothing seems less certain. on average. the economy sees a ten-fold return on that investment”. it was said that “For every dollar invested in broadband. alongside the particularly acute nature of the financial crisis in the Eurozone. if not to catch up with the States. A new chance for Europe? When writing this chapter last year.1 as the means to monetise the growing number of services which their systems enable in both the retail and wholesale markets. This choice was rooted in the belief that ICTs are powerful levers of growth and that a euro (or a dollar) invested in these sectors can earn multiple returns. as equipment levels rise. the measurements then revealed the very significant contribution that digital capital made to growth. Up until the end of the 1990s. compared to only 15% in Europe. a vital medium of economic and societal activity…” The main questions at the time concerned the timeline. among them the fact that it is made up of a host of national markets with different rules and cultures. its trend is continuing to fuel economic growth as a whole.

Didier POUILLOT 25 www. but rather takes a crosssectoral. all.encompassing approach to the DigiWorld and its position with respect to the economy as a whole.idate. Well said.and disparate responses to the challenges at hand and over to a lack of confidence…) to shore up its argument that only a common policy could transform this scattered ecosystem into “a well-functioning virtuous cycle of activity”.org Introduction . this first chapter is not divided into sectors. but it is a long road from the point of formulating hope-filled utterances to the point of overhauling an entire industry. As in past editions.

data and image transmission. down on both sides.0% 6.1.2% 2011 3 069 4. The DigiWorld in the global economy Externalities greater than direct effects What emerges above all from this quick comparison is that. Among the world’s largest markets.2% More than 4% growth in 2011 After dipping by 2. Japan stands out for having ICT markets that outperformed the economy as a whole. These new activities. all the same.7% and the economy as a whole by 3. In times of recession.7% that year. ICT markets are less prone to dramatic fluctuations and are not – or at least no longer appear to be – a balancing variable. As the recovery gets under way.3% growth.8% 41 832 8. Growth there is.3% 6.8%. • consumer electronics: audio and video equipment. as experienced three years ago.6% 2008 2 874 4. private systems. the opposite trend is playing out in the Africa-Middle East region. PCs and peripherals.4%. above all. however. A parallel trajectory appears to have played out in 2011. which is nevertheless one to three points below national GDP growth. based on digital technologies. DigiWorld markets were back on a growth trajectory by 2010 – increasing by 4. > Contact: d. Although slowing. are the focus of a dedicated chapter (Chapter 6). at least in terms of revenue.7% 6. data transmission equipment.pouillot@idate.1% Source: IDATE .1 Momentums compared Europe on the wrong side of the gap What is the DigiWorld? We define the DigiWorld as encompassing all those sectors that are already.1% 43 876 -1.7% 47 269 7. compared to 7. Although this was above what had been projected a year ago.1% in 2009 due to the grim economic climate worldwide.2% and +3. this is no doubt further proof of the resilience of ICT sectors that was observed during the height of the global financial meltdown in 2009. the momentum in emerging markets is still ensuring more than 10% growth on average. that both their direct impact (capital output ratio of both ICT goods and services) and their externalities (the impact on productivity of ICT take-up) continue to increase. both at the intermediary level (as in search or e-commerce) and in the area of content aggregation (such as with online video or app stores). their positive influence on reviving the economy has been greater this time round than their own growth.3% 6. more and more services and applications are developing within the new digital economy. • telecommunications equipment: public network equipment.7% (in current value) during that time.6% 44 468 6. The momentum is not. 26 DigiWorld 2012 DigiWorld contribution to global GDP DigiWorld markets (million €) yoy growth Global GDP (million €) yoy growth DigiWorld as a % of GDP 2007 2 747 6. these markets remained relatively intact and were even held up as a central path to recovery in a great many national stimulus plans. which generate revenue for more traditional data transmission and processing markets. although they are affected by the overall economic climate. the industry’s growth was nevertheless below that of the economy as a whole.4% 2010 2 944 4. software and associated services. Meanwhile. On the periphery of these core segments. the same across the board: the ICT markets of Europe now stand alone. with DigiWorld markets reporting 4. The gaps are smaller in the rest of the world. • computer hardware: mainframes.5% in current value. This would strongly suggest.2% growth for global GDP.9% in 2011 whereas GDP gained 5. or on the verge of being. • computer software and IT services: data processing. growing by a mere 0. namely: • telecommunications services: fixed and mobile telephony.3% 50 671 7. especially in North America where ICT markets grew by 2. handsets.5% 2009 2 813 -2. with ICT markets enjoying much stronger growth than GDP in 2010 – standing at +10. • television services. respectively. as global GDP grew by 7.

Recovery in DigiWorld markets… Comparitive annual growth of current GDP and DigiWorld markets in North America 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 DW markets GDP Source: IDATE … weaker than in the economy as a whole Comparitive annual growth of current GDP and DigiWorld markets in Europe 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 DW markets GDP 27 Source: IDATE Momentums compared .idate.

9% 3.8% 2. the recession has affected ICT spending in Europe even more than on the other side of the pond. if Europe were to raise its spending on ICT to match the United States. Eighty two percent of American households had a computer at the start of 2011. ‘L’économie numérique et la croissance: poids. statistics of the Information Society . Even if this is due in part to chronically low spending overall.4% … it hurts its economic growth Europe also lags behind in the percentage of total capital expenditures that is devoted to ICT. then its GDP growth would get a fivepoint boost by 2020.3% 3.5% 2007 2. although spending in Europe rose substantially over the course of the 2000s.8% na na 2010 2.9% 2. while the United States is somewhere between the two.4% 2.2% 3. as Western European businesses… revealed that ICT investments (in other words IT hardware and services and telecom equipment and services) as a percentage of gross fixed capital formation (GFCF)2 in Europe are regularly 10 points below what is found in the United States. the situation has gone from relatively equal per-capita spending at the start of the 1990s.8% 3.9% 2.pouillot@idate. the result being that. but it is nonetheless emblematic of the lead that North America enjoys in terms of ICT take-up and usage.0% 2.9% 2.8% 2.8% 2. the market research firm coe-Rexecode 1. May 2011 2.5 points depending on the year.3% 2. Germany.7% 3.5% 2009 2.6% 3. compared to an average 68% in Europe. according to which. The impact of the digital revolution on growth.5% 2.8% 2. and keeping in mind that this would mean a 50% increase. In a study published in 20111. the UK.5% 2006 3. stood at around 7.1% na na Source: Eurostat.5% 2.1% 2.5% 2.9% 2.5 hours a month per person in 2010 in the United States.6% 2.6% 3.9% worldwide in 2009 – growth trajectories still vary from region to region.8% 2.1.8% 2008 2.5% 2. the British exception is confirmed when looking at current spending on ICT compared to GDP.1% 3. it nevertheless remained well below spending in North America. with the UK outspending both Germany and France by 0. fixed and mobile combined. impact et enjeux d’un secteur stratégique’.9% na na 2009 2.5 to 2. both directly – in other words the ICT sectors share of GDP – and indirectly – such as productivity gains thanks to the use of ICT – is greater overall in the United States than in Europe.8% 2008 2. 2011 28 DigiWorld 2012 Global spending on ICT by segment in EU-27 Information Technology expenditure EU-27 France Germany United Kingdom USA Japan Communications expenditure EU-27 France Germany United Kingdom USA Japan 2006 2. The DigiWorld in the global economy > Contact: d.2% 2. This conclusion is shared to some degree by a recent report from Oxford Economics4. Calling traffic.4% na na 2010 2.9% 2. ‘Capturing the ICT Dividend: Using technology to drive productivity and growth in the EU’. France.7% 3. namely the value of acquired physical assets (minus disposals) 3.9% 2.9% 2. compared to an average of only 5 hours in the five biggest European markets.6% 2.7% 3.6% 3. but current ICT spending (as a % of GDP) that is well above average. with sometimes very sizeable gaps further back in the past. while American businesses spend twice as much on IT software and services. to Europe now spending roughly one third less than the US (see Chapter 3 for details on average spending).7% 3.7% 3.2% 3.7% 3. the EU-15 and Japan 4.5% 2. The Coe-Rexecode report covers the United States.8% 2007 2. Prices and market structure no doubt account for this gap to some degree. All in all. since 2009.2 ICT and growth The growing influence of digital When Europe takes backseat to the US in the area of ICT… Within the global trend of steadily declining ICT expenditures over the past four years – reaching a nadir of -3. Of particular note is the fact that. Japan stands out among the countries examined in the report3 for having among the lowest rates of ICT investments as a percentage of GFCF.8% 2. Gross fixed capital formation. The UK is the sole exception amongst the top European markets. The gap that began to appear in the 1990s was never closed.4% 2. per employee.

Coe-Rexecode ICT and growth . in current prices 37% 32% 27% 22% 17% 12% 7% 1980 1984 1988 1992 1996 2000 2004 2008 EU-15 Japan USA France UK Germany 29 www.American businesses increasing their ICT spending… Private-sector productive investment levels in the US 12-month growth (%) 40 30 20 10 0 -10 -20 -30 -40 1970 1975 1980 1985 ICT 1990 1995 2000 2005 2010 Total excl. ICT Source: Coe-Rexecode … and well outspending European and Japanese businesses Evolution of investment in digital capital’s share of Source: OECD .idate.

France has made much slower progress. during which the ICT sectors production dropped by more than half. media electronics production levels have yet to recover from the dramatic drop that began well before the recession. The Swedish recovery can of course be attributed to a large degree to telecom hardware production. production enjoyed a swift recovery in 2009. going from an index of 100 in 2000 to 220 in 2011 in terms of volume. it was the manufacture of computer and electronic components that allowed the American ICT industry to revive its production momentum. The US is also one of the countries that has enjoyed the steadiest recoveries since 2009.pouillot@idate. before dropping off more or less sharply from early-2010 onwards: in South Korea. Hardware production has remained more or less flat since mid-2009. production levels in 2011 even dropped to 2001 levels. several industrialised countries had regained the ICT production levels they had just before the global economic meltdown that began in the second half of 2008. and is not yet back to its early 2008 levels. Meanwhile.1. enjoyed a very healthy recovery – sustained in large part by electronic components and TV sets. however. After a serious slump in 2008-2009. the industry suffered a lengthy slump throughout the entire 2000s. falling below 80. Television and telecom hardware were the hardest hit in both countries while computer production fared better. In the UK. South Korea lost “only” 30%. Japan hit historical lows after 2008. Looking at the individual sectors. and the dip and slight uptick in 2010 have done little to change the situation. but uneven In 2011.3 ICT production Recovery is underway. In both cases. back in 2005. > Contact: d. however. especially. or the 40% decline suffered by the Japanese industry during that same period. whereas the record low for South Korea was 120. with only a brief uptick in 2006. Going from an industrial production index of 100 in 2000. albeit with different departure points and rather disparate variations in degrees of intensity. The 10%–12% drop reported between mid-2008 and the start of 2009 in the States does indeed seem modest compared to the 20%–25% decrease that German businesses posted between autumn 2008 and mid-2009. and in Sweden for that matter. … but more tentative for developed Asian markets and. it should also be said that the recovery there began in spring 2009 – three to 15 months earlier than in other parts of the world – and started from a production level that had been only slightly affected. sustained solely by media electronics. The situation has played out very differently in the biggest European Solid performance for North American firms… Industrial production levels have improved the most in the United States during this time. Europe Over in Asia. Not all national markets or the various sectors have performed equally since then. and still a far cry from the peaks enjoyed in late 2000 and in early 2007. thanks to its national champion Ericsson. production in Germany. Japan and South Korea have been experiencing relatively similar trajectories. posting a decline of just over 10% in the second half of 2008 which was followed by a very timid recovery. 30 DigiWorld 2012 The DigiWorld in the global economy Growth of ICT goods output Beginning… France Germany Sweden United Kingdom USA Japan South Korea 2000 = 100 index Source: Coe-Rexecode 2008 101 181 114 55 202 134 157 2009 83 141 89 47 177 80 131 2010 89 146 83 46 192 121 154 2011 97 184 97 53 216 123 146 2012 96 195 100 na 226 105 123 . While Japan experienced a 40% decline in production between mid-2008 and the start of 2009. and electronic components production in Japan reached an all-time high in 2011. While not taking anything away from how American companies have performed. 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 60 30 40 20 10 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20 France South Korea USA Germany Sweden Japan UK Source: Coe-Rexecode ICT production .mm3) 300 200 170 130 100 70 50 (2000=100 .Production levels in industrial countries still unstable… ICT production: communication equipment (2000=100 .mm3) 300 200 150 100 31 www.mm3) 400 250 150 100 (2000=100 .mm3) 150 100 60 40 60 40 20 20 15 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 10 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 France South Korea USA Germany Sweden Japan UK Source: Coe-Rexecode … in both telecoms and IT ICT production: PCs (2000=100 .

and more specifically a few major IT industry players such as Apple and 1. Internet companies stand out. the PER of the social networking giant will still be in the neighbourhood of 100. and was worth as much as Microsoft (262 billion USD) and Google (197 billion USD) combined at that time. … sustained largely by IT and Internet stocks Taken individually. but better when viewed over a longer period. In addition. the first in spring 2010 and the second in the summer of 2011. the stock market darlings of recent months have clearly been the Internet giants.12 2008 78 96 94 72 71 69 49 122 97 86 Sep.4 ICT stock prices Apple and all the rest Concentration of market value on American exchanges … The sharp drop in stock market prices in autumn 2008. Meanwhile. when looking at ICT market momentums (see Chapter 3 for more details). On the whole. The situation in Asia. 14 2008 100 100 100 100 100 100 100 100 100 100 Dec.pouillot@idate. such as the past 15 years. while telecom industry players have been much more shaken. It is also worth mentioning that. Only two mini-depressions spoiled the recovery. these two have among the highest market caps today: Apple. had climbed back to levels enjoyed in 2008 and earlier. is among the most highly-rated company in any sector. 32 DigiWorld 2012 The DigiWorld in the global economy Change in share prices for a selection of ICT sector companies Week beginning… Apple (NASDAQ) Deutsche Telekom (Xetra) France Telecom (Paris) Google (NASDAQ) IBM (NYSE) Microsoft (NASDAQ) Nokia (NYSE) NTT (NYSE) Verizon (NYSE) Vodafone (London) Mar. however: Google has a price-earnings ratio (PER)1 of over 20 and Amazon stood at a remarkable 133 in mid-February 2012. though still far from the record highs of the Internet bubble in 2000. operators and manufacturers in the region’s emerging nations – and especially China – continue to make tremendous strides. which affected every exchange around the globe. > Contact: d. 7 2011 281 88 76 135 139 92 26 118 106 119 Sept 9 2011 298 71 58 120 140 92 19 111 104 108 Feb. requires the separation of Japan from the rest of the region. which are measured primarily through the NASDAQ Index. tech stocks have performed at the same rate as all other sectors combined over the past three years. when speaking of the United States. both in their domestic and in export markets. The price-earnings ratio (PER) refers to relationship between a company’s current share price and its per-share earnings. The recovery that began in Europe in 2009 has been more moderate. Tech stock prices in the United States. with 468 billion USD as of mid-February 2012. was followed by a more or less strong recovery whose variations were especially acute at the regional level. In terms of multiples. This is a record that even Facebook – which will probably have launched its IPO by the time this report is published – will be unable to match: with a predicted valuation of around 100 billion USD. 15 2012 393 78 55 138 167 107 16 116 112 116 Source: Yahoo! Finance . for net profits of 1 billion USD in 2011. still struggling to recover from the collapse that lasted from 2000 to 2002. these solid performances are coming chiefly from IT and Internet companies. Market caps on the Japanese exchange continue to suffer from protracted crisis in the nation’s high-tech industry. and unlike in the United States. and even some signs of weakness have been seen as Technology Media Telecommunications (TMT) stock prices fell during the summer to their lowest point since 1997. 11 2009 136 83 88 108 102 89 47 113 92 92 June 11 2010 200 82 77 112 111 92 30 94 84 93 Mar.1. tech stocks in Europe have performed below the market average over the past three years. Along with Google.

Tech stock back in the pink in the US… Fluctuations in Nasdaq and SP500 stock prices in the US January 1998=100 300 200 150 100 70 50 30 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 20 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 NASDAQ Composite SP 500 Source: Coe-Rexecode 20 11 … but on a downwards slide in Europe Fluctuations in ICT and general stock prices in Europe (Eurostoxx) 31 december 1997=100 400 300 200 150 100 70 50 30 33 www. Media and Technology Sectors General Index Source: Coe-Rexecode 20 11 ICT stock prices .org 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 Telecommunication.idate.

34 Markets and players DigiWorld 2012 .

II Markets and players 35 .

36 Markets and players DigiWorld 2012 2 Next Gen DigiWorld .

second. despite having slowed after an especially strong year in 2010. This progress in equipment markets is especially noteworthy for being concentrated in two sectors: telecommunications (+8. Taking a more historical perspective. of revenue.3% growth posted by DigiWorld markets in 2011. on the flipside. Proof of this can be found in the steady decline in growth rates for telecom services. even if some voices in recent months have hinted at a possible revival of PC sales. Underpinning this is a host of questions over the shift of pay-TV to OTT applications. telecom markets thanks to smartphones and. social networking and online services – whose value is rooted in new economic schemes and which often undermine the models that have sustained veteran players up until now. for instance. Only the trajectory of IT markets – services and software in particular – appears to be reacting directly to the economic situation of the moment. whether pressure on ad revenue or.1%) and IT (+7. Meanwhile telecom services are bringing up the rear. a structural change due to deep-seated changes in the ICT ecosystem. due in part at least to markets catching up after weathering the worst of the recession. hardware markets posted significantly higher growth than services in 2011. with a modest 3. firstly. it is TV that performed the best (+5. One may choose to emphasise the widening gap in the growth trajectories of DigiWorld markets and of the economy as a whole – as explored in the previous chapter – while still paying tribute to the enabling role of the ICT sector in this trend. This was seen all too well in Greece whose market lost more than 27% in value between 2008 and 2011. however slight.2% growth rate last 37 www.4%).5 to 2-point drop in growth to be seen at present: is it just a temporary thing resulting from a still shaky economy. or even destruction. we find opposing forces at work – although both appear to derive from enduring trends.T here are several ways to interpret the moderate 4. having enjoyed a recovery. including the Czech Republic. one can compare current growth rates with those of the mid-2000s and wonder about the 1. Introduction markets to. After fairly solid performances in 2010. or a combination of the two? Structural changes Without a definitive answer one way or the other. to IT markets thanks to tablets. This immediately impacted a portion of the industry. the rise of on-demand TV. They embrace all the new Internet services – such as search. Spain (–10.2%) – with consumer electronics markets worldwide having failed to grow. but also to a lesser extent in Ireland (–14% in three years). does buckle under extreme circumstances. in 2011. The devices side of the equation is also feeling the pinch from the transfer of a large chunk of market share from traditional consumer electronics Industrial shifts Taken as a whole. alongside these various shifts that are hitting the core of DigiWorld sectors. Reporting a 4. IT software and services are nevertheless on the road to recovery in a still uncertain economic climate. We have also discovered that the relative resilience of the services sector during the worst of the credit crunch.2% increase. Over in the services sector. . Finally. alongside pressure on network equipment markets. more long-term trends are also being affected by the development of peripheral markets that rely on ICT to deliver innovative solutions. In television services. a look at the figures would tend to point more to long-term adjustments at work. and the resulting shift.idate. albeit with nuances depending on the sector and the region (see the next chapter for a more detailed look at geographical shifts). Slovakia and Hungary. the relatively similar momentum last year can be taken as a sign that things are clambering back onto solid ground.5%) and several countries in Central Europe. as witnessed in 2009.

has also been affected by new Internet services that both create value for the whole. The massive switch to IP is having a huge impact on the financial situation of telcos. but naturally grab some of it away for themselves. carving a canyon between this now thriving segment and the glum state of affairs in the rest of the industry. is that they are enjoying very solid growth. by way of all the intermediary and aggregation functions. In a number of the world’s advanced markets.2 year. telecommunications is also the sector where the largest regional performance gaps are to be found. especially by reconfiguring their partnership strategies: telcos are siding with content and application providers. the challenge now is to find the right model to ensure that everyone along the chain gets their fair share. Further. The upheavals caused by these innovations are. The figures on latest market developments are but the visible portion of a massive and far-reaching trend that stretches down to the very fundaments of DigiWorld industries. have tempered many an enthusiast’s penchant to move onto the next stage and to enter into very costly rollouts. fixed broadband revenue is now growing only slightly. A cultural revolution Business in the sector. A parallel can also be drawn here with what is happening in devices where a handful of players have taken the smart device market by storm. and TV networks are signing up new online distribution platforms. One of their most outstanding characteristics. video sites. Alongside consumer electronics. with the other half being spread out between a great many online services and content such as social networking sites. at a time when traditional DigiWorld businesses are losing steam. while landline calling revenue continues its downward spiral: still in the EU. markets that are largely content with their existing solutions.5% in 2011. while the potential growth outlet that could be forged by the upgrade to ultra-fast broadband is not yet in view. in fact. however. It is an overriding trend that strengthens the role 38 DigiWorld 2012 Markets and players . The European Commission has actually assessed the cost of achieving the targets set out in its Digital Agenda at between 180 and 270 billion EUR. Telco investments in new generation access networks have been limited up until now.2%. be they ADSL or cable. Half of that comes from the core activities of search and cloud computing. which is telling of the ongoing pressure on telco business. The new Internet markets are very fragmented and still generate relatively little income: setting aside e-commerce – most of whose income comes from the sale of goods and services and not from the platform itself – these Internet markets account for less than 5% of DigiWorld sales in Europe.5 billion EUR or +3. in a number of instances. These feature notably the cableco dominance of the broadband market in the US and the diminishing influence of NTT in the Japanese ADSL market. Given the way things are developing. from supplying access and devices to supplying content. device makers are sizing up OS providers as partners. the first generation of digital economy players are working hard to bring on their business models. fixed telephony revenue dropped to 7 billion EUR in 2011 (–8. and most of the really significant developments in advanced markets have resulted from very specific competitive situations. in the double digits for most. Faced with the inevitable. smart devices and more are all ingredients in increasingly sought-after changes in the marketplace. and more widely in all DigiWorld core services. uncertainties over regulatory options and. In Europe. print media and magazine apps. New generation networks. music sites. online services.5%) while income from broadband access grew by only 1. being felt throughout the entire ICT ecosystem. online gaming. for instance. hesitations over technical choices. mobile services have stopped growing: this is especially true in the European Union where the segment actually shrank by 0.

Didier POUILLOT 39 www.that ICTs play at every level. Yes. Introduction .idate. and which places our introductory remarks in some long-term perspective. ICT markets are evolving in a way that is relatively separate from economic cycles. because of their influence on the whole. ICT markets will likely continue to experience a growing dichotomy between the rise in usage and their ensuing rise in revenue. And. ICT markets are bound to grow at a lesser pace than the activities they support. yes.


DigiWorld markets by sector
Looking beyond the figures
The recovery that began in 2010 continued on through last year, resulting once again in steady overall growth of 4.3% worldwide. Hardware segments again fared the best again in 2011, with telecom and computer sales revenue increasing by 7%. Growth rates in the services market were not as strong, ranging from between 3.2% for telecommunications to 5.4% for television, with IT and software services in between the two at 4.4% – although services still account for 70% of DigiWorld markets. While their contribution to industry revenue is vital, they are helping above all helping to drive the momentum which is now being sustained by new Internet markets.

… and services
The changes at work seem less dramatic in the services segment. At the height of the financial crisis, services did suffer slower growth and even a slight setback for some – namely IT services in general and telecom services in Europe – but in many instances it was to a much lesser degree than in the economy as a whole. And it was indeed services that allowed us to measure the DigiWorld’s resilience of the DigiWorld during that time. That said, it has not been all smooth sailing for these segments, and all are being increasingly affected by changes in technical architectures, in consumers’ behaviour and, ultimately, in prevailing business models. In the telecommunications market, it is the growing ubiquity of IP that is no doubt the biggest bringer of change, and now bound up as it now is with the future of the mobile Internet. In the world of IT, it is cloud computing and its various as-a-service iterations (SaaS, IaaS…) that are revolutionising classic client-developer paradigms: these new architectures also constitute challenges for telcos who need to offer the right network solutions to match. If television markets appear to have been the least affected thus far, questions over ad revenue, of which a growing percentage could go to Internet players, will have to be faced eventually.
Nota: The data supplied here are end-market figures for each sector and may be counted twice in the case of consumption in overlapping sectors. We have nonetheless eliminated the possibility of double counts as much as possible in cases where the scope of two sectors overlaps, such as mobile handsets and home computers, were eliminated from CE markets and counted only in the telecom segment (mobiles) or the IT segment (computers). Furthermore, the data are based on consumption. For certain categories, disparities with production data may be significant in cases of a very high volume international trade.

Big changes afoot in hardware…
2011 will serve to confirm that equipment and device markets, which had been the hardest hit by the recession in 2008-2009, are indeed back to on track, reporting revenue levels significantly above four or five years ago. This nevertheless comes at the price of major upheavals on both the technological and industrial fronts. In the telecom market, the recovery has been due chiefly to the huge popularity of smartphones which have driven up sales volumes – with (more than 1.5 billion handsets sold worldwide in 2011, of which more than a quarter were smartphones – ), and to the ongoing decrease in average prices. Over in the computer market, PCs are having to contend with growing competition from tablets, of which more than 60 million found their way into consumers’ hands in 2011, which is triple the number in 2010. Meanwhile, the consumer electronics sector as a whole is suffering directly from increasing overlaps with the two previous segments, and so it is focusing its efforts more and more on television sets, themselves which are feeling the pinch as well. These upheavals are all raising questions over about the future of veteran businesses, and especially over the transitions their core players will have to make through, and what risks this will entail.

DigiWorld 2012

Markets and players

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Global DigiWorld market by sector
Billion € Telecom services Telecom equipment Software and computer services Computer hardware TV services Consumer electronics Total 2009 1 047 237 675 296 282 277 2 813 2010 1 071 259 693 320 308 293 2 944 2011 1 105 280 723 343 325 293 3 069 2012 1 146 294 758 361 344 293 3 197 2015 1 277 368 885 389 386 293 3 598

Source: IDATE

Growth still driven by equipment except consumer electronics…
Global DigiWorld market growth by sector

Billion € 3 500 3 000 2 500 2 000 1 500 1 000 500 0 2009 2010 2011

TV services Software and computer services Telecom services

Consumer electronics Computer hardware Telecom equipment

Source: IDATE

… but services markets still the biggest earners
Breakdown of global DigiWorld markets by sector, in 2011


Telecom services Telecom equipment Software and computer services 11% Computer hardware TV services Consumer electronics 36%

9% 24%

Source: IDATE


DigiWorld markets by sector


Telecom services
Game change
Markets back on the up, except in Europe
After posting only slight growth in 2010, the global telecom services market reported moderate growth last year of around 3%, which is still well below its pre-recession rate of progress. This is due as much to the still uncertain economic climate as the structural changes taking place as a result of the maturity of several segments and regional markets. Emerging economies continue to be the key source of growth around the globe, while things remain tense in the more advanced economies, especially in Europe where the downwards slide is not over yet. The worldwide market for telecom services came to just over 1,100 billion EUR in 2011, with mobile services still accounting for the lion’s share (58%) while, over in the wireline segment, the switch in core business from telephony to the Internet, and especially to broadband and ultra-fast broadband access, is accelerating. Mobile data services have been enjoying very steady growth these past four years (2008-2011), which has helped at least partially offset the dramatic pause in growth in calling revenue growth. Web. As mobile connection speeds rise, and with 4G now in sight, mobile broadband offers an attractive alternative in those regions without a proper landline system, and where network overload is not yet an issue. The revenue generated by wireline data services continues to rise steadily, spurred by the revived momentum of fixed Internet services, and especially broadband and superfast broadband access in advanced markets.

Advanced markets still suffering
Telecom services revenue in advanced markets is expected to have dropped slightly in 2011, for the second year in a row. Between the financial crisis of 2009, the European debt crisis in 2011 and the spectacular spate of natural disasters that shook the globe last year, advanced telecom services markets lost more than 1.5% in value in the three years between the end of 2008 and the end of 2011. This unprecedented situation in the telecom market marks an historic turning point, and the end of an era. In Europe, we do one cannot expect to be out of the woods until 2014. Only a handful of European countries – namely the Netherlands and Sweden in Western Europe, and Ukraine, Russia and Turkey if we stretch the borders – are expected to see telecom revenue rise in 2011, while a few countries such as Greece and Spain are still in dire straits. In advanced economies outside of Europe, we are seeing huge disparities in market performance – between the United States which is back on a solid footing and Japan which continues to lose ground.

Market sustained by volume and robust growth for mobile data services
Buoyed up by the explosion in mobile data traffic from smartphones, tablets and other connected devices, mobile broadband continues to breathe life into a market suffering from decreasing falling calling revenue, while volume is still a major factor in emerging markets. Landline calling has been on an apparently inexorable decline since 2002, due to the combined effect of users replacing their landlines with mobile lines, including in emerging countries/regions suffering from a chronic lack of wireline infrastructure, and their massive shift to the

Markets and players

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DigiWorld 2012
Global telecom services market by region
Billion € North America Europe France Germany Italy Spain United Kingdom Asia/Pacific China India Japan Latin America Africa/Middle East World 2009 260 305 41 50 30 26 39 303 85 17 108 108 70 1 047 2010 264 304 42 49 29 25 39 314 89 19 107 114 76 1 071 2011 267 301 41 49 28 24 38 333 97 22 106 120 83 1 105 2012 271 302 39 49 28 23 38 356 106 25 106 127 91 1 146 2015 288 315 39 50 29 24 40 418 124 37 109 144 111 1 277

Source: IDATE

1% +7.0% +54% -0.3% +3.Markets Global telecom services market growth by segment Billion € 1 200 1 000 800 Data and Internet Mobile services Fixed telephony 600 400 200 0 2009 2010 2011 2012 Source: IDATE Players The world’s top telcos AT&T NTT* Verizon Deutsche Telekom Telefónica China Mobile Vodafone* France Télécom America Móvil KDDI* 0 43 +1.2% Telecom services .2% -1.4% +7.2% 20 40 60 80 100 Billion € Note: 2010 Telecom service sales & growth 2009-2010 (%) * fiscal year ended March 31. 2011 Source: IDATE www.0% +1.2% -1.idate.

and by improving their traffic management Opportunities opened up by new gen networks Markets and players 44 DigiWorld 2012 Equipment suppliers are hoping to benefit from broadband network rollout plans. especially in more sparsely populated areas. which obviously allows them to save on infrastructure costs – a prime example being Everything Everywhere. Nokia Siemens Networks is in the process of selling off its wireline operations. This would mean only meagre revenue for equipment manufacturers compared to what 3G rollouts have brought in. So they are relying more and more on co-investment and open access models. especially in sparsely populated areas where the classic model of combining the supply of access and a service may not be financially feasible. while ZTE is now in the top 10 too. Telcos are exploring alternative solutions to handle their capacity problems. third generation deployments are now tapering off. with Ericsson snapping up what remained of the dismantled Nortel. Acceleration of co-investment and open access models Operators today are faced with a dilemma brought by weak growth of their revenue and the need to invest in infrastructure to meet the expected ongoing surge in traffic.2. When it comes to LTE network deployments. On the other end of the spectrum. of which half with bandwidth of at least 100 Mbps – is clearly aimed at encouraging operators to invest in their networks. and this during already very tough financial times. This programme will likely involve both public and private investments – estimated at more than 270 billion EUR – to reach the target. now moving beyond their borders. including more efficient spectrum solutions. Added to which. both of which are losing ground and scrambling to shore up their margins. Open access networks. Network sharing has become a necessity for operators. equipment manufacturers in China continue their steady rise. and Nokia Siemens Networks taking control of the Motorola’s mobile business. offloading more traffic via Wi-Fi and smaller cells. which can come in various forms. > Contact: t. are also especially appropriate at this juncture and are being adopted more and more as a way to finance FTTx network rollouts. behind Cisco and Ericsson. and laying off a quarter of its staff in the bargain. and the economics of new access technology (FTTx and LTE) deployments are only accentuating the trend. These new schemes involve two or more operators sharing all or a portion of the network. operators are still being careful with their spending. Huawei has climbed to number three spot amongst the globe’s world infrastructure suppliers. The issue of financing is on the table. The credit crunch affected the financial results of the Alcatel-Lucent and Nokia Siemens Networks megamergers. Chinese hardware makers have made real strides and are contributing to the deployment of new generation networks (NGN). Global telecom equipment market by region Billion € North America European Union France Germany Italy Spain United Kingdom Asia/Pacific China India Japan Rest of the World World 2009 58 56 8 9 7 6 10 72 29 10 18 51 237 2010 63 57 9 10 7 6 10 79 32 12 19 59 259 2011 65 59 9 10 7 6 10 92 39 15 19 64 280 2012 68 62 9 10 7 7 11 98 42 16 19 67 294 2015 74 71 11 12 8 8 13 138 59 26 22 86 368 Source: IDATE .ramahandry@idate. especially when seeking to achieve 3G coverage targets. the network shared by T-Mobile and France Telecom-Orange in the UK. and the players are looking at network sharing schemes. we are witnessing deep-seated shifts in the telecom equipment industry which is being shaken up by changes in operators’ investment models. The initiative taken by the European Commission – whose Digital Agenda requires Member States to adopt the target of providing all citizens with a connection of a minimum 30 Mbps by 2020.3 Telecom equipment Industrial landscape shaken by more upheavals Once again. Mergers and acquisitions continued to make headlines. Note: 2010 Telecom equipment sales Source: IDATE Telecom equipment .Markets Global telecom equipment market growth by segment Billion € 300 250 Other Infrastructure services Core network equipment Mobile access Wireline access Enterprise equipment End-user devices 200 150 100 50 0 2009 2010 2011 2012 Source: IDATE Players The world’s top telecom equipment suppliers Cisco Nokia Samsung Ericsson Huawei Alcatel-Lucent Motorola Nokia Siemens Networks LG NEC ZTE Sony Ericsson 0 5 10 15 20 25 30 35 Billion € 45 www.

is tending to tighten up a little more. On the flipside. while where. and in the different parts of the world where they do business. businesses continue to slash their IT spending for the foreseeable future. Innovation hubs There are three areas of innovation that have begun to redraw the IT landscape. and still today in Europe’s most financially fragile European countries like such a Greece. solutions for the business world. Cloud computing is a key part of this trend. infrastructures. economic worries are being felt affecting at the operational level – in other words. with e-mail and online services. A major source of concern across the board. the United States and the BRIC countries. Even in the search for innovative solutions. By comparison. devices. > Contact: f. • the integration of various communication media within the enterprise combining such legacy networks like as the telephone and the post. which has traditionally been very scattered. compare and steer a company’s business. going beyond the classic concept of analysing data to measure. • analytics. and especially investment Markets and players More for less There are several ways for businesses to cut their IT costs: • by consolidating the different elements of existing solutions. which involves pooling and outsourcing their most expensive components. which is manifesting itself especially through the development of tablets and smartphones which businesses are using for sales and marketing. security remains one of the major biggest challenges for businesses’ IT activities. • by virtualising their system. the IT services industry. in Australia. production and logistics activities. • and by cutting back on the number of suppliers they use – employing a smaller group of vendors who are capable of meeting the needs of their customers’ various areas of activity. are still being much more cautious than their German counterparts in Germany. reusing consumer market 46 DigiWorld 2012 Global IT services and software market by region Billion € North America Europe France Germany Italy Spain United Kingdom Asia/Pacific China India Japan Latin America Africa/Middle East World 2009 275 230 35 46 15 12 46 132 13 6 79 23 15 675 2010 282 232 35 47 15 12 45 138 16 7 80 25 16 693 2011 295 239 37 49 15 12 46 144 18 8 80 27 18 723 2012 310 244 37 51 15 12 46 155 22 10 83 30 19 758 2015 350 275 41 57 16 13 51 194 36 15 92 39 27 885 Source: PAC .2. stakeholders have begun investing heavily in solutions that will allow them to boost their performances. and for customer support functions. Among client sectors. clients want to get more for less from their IT providers. It was hit hard in 2009. social networking. and moving into real-time analytics and big data to improve their reactivity and the efficiency of their decision-making. or the connected enterprise. along with sharing solutions and offshoring. manufacturing sectors as a whole have begun spending again. etc and the like. although the local political and economic situation can naturally have a sizeable impact on market behaviour: French car-makers. and expected to gain in prominence over time: • mobility. along with the public sector are still feeling the pressure of the debt and deficits. As a result. This means using standard solutions with a minimum amount of customisation. the Germany’s plan intent to put an end to its nuclear energy programme has thrown cold water on the plans of German country’s power companies. for instance.4 IT and software services The integration challenge Of all the DigiWorld’s services sectors. but also for their own in-house management. where IT often plays a key role in sectors with growth potential.nassah@pac-online. Italy and Portugal. applications and more to create a more flexible system. that of IT services is clearly the most vulnerable to the state of the economy. on another plane. banking.

4% + 8.8% + 7.2010 (%) Source: PAC IT and software services .3% 0 10 20 30 40 50 60 Billion € 47 www.3% + 10.2% + 14.2% + 6. in 2011 6% 20% North America Europe Asia/Pacific RoW 41% 33% Source: PAC Players The world’s top IT services and software providers IBM Microsoft HP Oracle Fujitsu Accenture SAP CSC NEC Hitachi + 9.idate.0% + 16.8% + 6.Breakdown of the global IT services and software market by region.4% Note: 2010 sales & growth 2009 .3% + 1.

the IT hardware market confirmed that it was back on solid ground in 2011. 48 DigiWorld 2012 Global IT equipment market by region Billion € North America Europe France Germany Italy Spain United Kingdom Asia/Pacific China India Japan Latin America Africa/Middle East World 2009 82 93 12 17 7 5 13 84 23 7 32 20 17 296 2010 88 97 13 18 7 5 14 93 28 8 34 22 19 320 2011 94 101 14 19 7 6 14 102 34 9 35 24 21 343 2012 98 102 14 19 7 6 14 112 39 10 36 26 23 361 2015 91 105 13 18 7 6 14 135 57 13 34 30 29 389 Markets and players Source: PAC . manufacturers of computer and PC components (such as chipsets. compared to 360 million computers – these new devices are catching on like wildfire and. and well below the growth rate in 2010. like as Intel and AMD have already started to do. which marks a 4% increase over the year before. and like as Cisco and HP have done by focusing more on mobility. and possibly to spill over into 2013.) manufacturers can either remain focused on their current business and set their sights on emerging markets where new devices are still out of reach. HP is still the leader in the server market in terms of volume. it is x86 servers that continue to drive the market but. enjoying solid performance in emerging markets.6% growth (source: Gartner). 1. with growth expected to top 60% – which translates into over 100 million units sold during the year. So the hour of choice is at hand on the manufacturing side of things. but losing revenue in Western Europe and North America. In other words. Steve Jobs spoke in mid-2011 of signs that we are entering the post-PC era. the crisis in the Eurozone has been detrimental to spending. reporting 7. In one of his last interviews. On the whole. at least in the most heavily equipped regions. Are the concerns that were raised in late 2010 over the impact of a double-dip recession that were raised in late 2010 truly a thing of the past? Not entirely. especially in Asia and Eastern Europe. Or they can go with the flow and invest in mobile devices. While the trend is still only nascent – 50 million tablets sold in 2011. The situation in the PC market is still tough and. Analysts are predicting that 2012 will prove much the same: tablet sales will continue to skyrocket. etc. the hard drive supply problems caused by the floods in Thailand throttled the supply chain in the second half of 2011.5 IT equipment Growth despite it all After the recovery in 2010. more locally.neck with HP. Plus.and. analysts believe the PC market has reached its peak. like what just as is happening with computers. the economy as a whole is still struggling and. from a broader perspective. smartphones and other types of reader that is weighing on the traditional PC market more and more1. Pressure on prices is growing and cutting into suppliers’ margins. In terms of revenue. Beyond the cyclical aspect – the surge in sales in 2010 having in large part been compensation for the huge slump the previous year – it is the growing competition from tablets. Change in balance in the server market The server market is evolving in disparate ways in the different corners of the globe. IBM is moving up the ranks and is now neck. even if along with Dell and IBM it is losing ground to smaller players like Lenovo. the strong upswing and solid sales in 2010 were automatically followed by a decline. Growing pressure on the PC market More than 350 million PCs were sold worldwide in 2011. IT hardware markets are not progressing at the same pace across the board. however. even if we expect the consequences to be felt even more acutely in 2012. and hard drives. in advanced markets at least. With close to 30% of sales worldwide.2. In any event. shifting the balance of production by moving into components for these new devices.

5% 0% 5% 10% 15% 20% 25% 30% 35% 40% Note: global market share (units sold in Q3 2011) & sales growth in volume (Q3 2010 .Q3 2011) Source: IDC IT equipment Shake up in global PC-manufacturer rankings .2% + 0.1% -1.6% -20.idate.Breakdown of the global IT equipment market by region. in 2011 13% 27% North America Europe Asia/Pacific RoW 30% 29% Source: PAC The world’s top PC manufacturers as of Q3 2011 49 HP Lenovo Dell Acer Group Asus Others + 5.3% + 36.6% +30.

Disparate levels of digitisation Both cable and terrestrial are paying for lagging behind in their digitisation. is nevertheless expected to follow the same trajectory as North America. namely satellite and IPTV. which is 5. the growth outlook is positive. increasing its market share from 15. 56% of cable households and 77% of terrestrial households are still analogue. If Whilst cable increased its market share slightly during that time. 45% in Africa and the Middle East and 55% in Latin America. Only the American market is reporting a significant decline.2.6% in the European Union.0% in North America). IPTV in the meantime is thriving. Europe. In both these regions.5% growth posted in 2010. increasing by 6. especially in Latin America and in Africa and the Middle East. More than 80% of households in the European Union and 88% of North American households have access to a digital offering. suffering especially from the fact that coverage is naturally confined to the most densely populated areas. While terrestrial broadcasting is expected to keep losing market share across the board.5% to 22% in five years. that had been on the heels of extremely slight ( Markets and players Terrestrial broadcasting losing steam Of course pay-TV services are increasing their market share at the expense of the main source of free TV programming. this figure had dropped to 37% in 2011.3% of the world’s TV households. While 50% of the globe’s world TV-owning households were using 50 DigiWorld 2012 Global TV services market by region Billion € North America Europe France Germany Italy Spain United Kingdom Asia/Pacific China India Japan Latin America Africa/Middle East World 2009 108 80 11 13 9 5 12 63 10 7 31 22 9 282 2010 117 86 12 13 9 6 13 69 13 8 33 27 10 308 2011 121 89 13 13 9 6 13 74 14 9 33 30 10 325 2012 125 93 13 13 10 6 14 80 16 10 35 35 11 344 2015 124 103 14 14 10 6 15 95 20 14 36 50 14 386 Source: IDATE . and we expect to see growth figures will likely start slipping into the red in 2014.9%) growth in 2009. notably those delivered over connected television.6 Television services Relatively unscathed market TV services generated a total income of close to 325 billion EUR in 2011. and Western Europe in particular. from 34% to 37%. pay-TV continues to be the core driving force for now. which means they have access to a smaller number of channels and a lesser picture quality. that figure had fallen to 40% by 2011. and from competition from new networks.leborgne@idate. namely terrestrial broadcasting. the terrestrial network as their chief source of television programming in 2006. Pay-TV still driving growth… for now The chief source of income for the television industry’s chief source of income since 2009. +7. competition from online services. cable is likely to start stagnating and even lose ground in some of the more mature markets. +3. > Contact: f.2% in Asia-Pacific) than in Western ones (+2. it is satellite that has benefitted the most from the decline of terrestrial TV’s decline. Whereas 98% of satellite networks have been digitised. the North American market is nearing saturation.4% more than in 2010. compared to only 35% in Asia-Pacific. Everywhere else. With a pay-TV penetration rate of close to 89% of households.8% in Latin America.5%) as subscribers (+0. All the same. things are progressing quickly: while North America and the EU accounted for 55% of the world’s digital households in 2006. as much in terms of revenue (+2. While progress was weaker than the 9. Progress does appear to be healthier in emerging markets (+14.8% in 2011. either free-to-air or paid. is expected to start having a real impact in 2014-2015 – drawing subscribers away from pay-TV services and giving advertisers a reason to shift their spending to new TV platforms. in other words equal to cable subscribers.6%). though it still only accounts for 3.

6% -1.4% +2.8% +6.3% Note: 2010 audiovisual sales & growth 2009-2010 (%) * fiscal year ended June 30.3% +2. 2010 ** 2009 fiscal year Source: IDATE Television services .5% +13.* Comcast NBC Universal Viacom Dish Network ARD** BSkyB** 0 +11.5% +3.8% +5.idate.2% 5 10 15 20 Billion € 51 www.6% +8.Markets Global TV services market growth by segment Billion € 350 300 250 200 150 100 50 0 2009 2010 2011 2012 Subscription fees Advertising revenues Public fundings Source: IDATE Players The world’s top media companies DirecTV Walt Disney Time Warner News Corp.

television sales reached 8. In developed markets. the consumers’ swift consumer adoption of multipurpose Internet-ready devices. however. So the market is being sustained chiefly by emerging economies where equipment levels still have tremendous room to grow. market value dropped by 10%. although all are losing momentum. Audio-video equipment. It is the swift development of mobile networks and the coinciding outlook for affordably-priced smartphones (the digital ‘Swiss army knife’) are nevertheless changing the game. given the still limited development of digital access (broadband) and broadcasting (DTT. … and substitution The growing popularity of multi-purpose devices. Indeed. despite the popularity of new generation units (LED. the UK. finally. which is 200. whereas video game consoles and embedded devices (GPS or built-in video systems for cars) fared quite well. Analysts believe the market enjoyed a one-off high last year due to the analogue broadcasting switch-off.e. Users are replacing these ‘classic’ devices with IT and telecom hardware – i. Sales revenue dropped by close to 5% in the US and Canada in 2011. are included in telecommunications (fixed and mobile phones. sales in the core segments were not necessarily down but the impact of lower prices was keenly felt. was especially hard hit. especially not in Europe. and that any future growth in sales revenue will necessarily be driven by the popularity of large screens and the adoption of connected televisions. Of all the major markets in the region. In terms of volume. to offset declining revenue. only Germany managed to stay the course and even then it was more or less. When we take a closer examination. both desktop and laptop in all their different permutations). 52 DigiWorld 2012 Consumer electronics market in the US Billion $ In-home technologies* In-vehicle technologies Anywhere technologies** CE enhancements Total 2007 35 12 36 19 102 2008 37 13 40 20 110 2009 34 8 38 19 100 2010 31 9 41 20 100 2011 28 9 38 20 96 2012 27 10 38 20 95 * excluding home IT (PC. and by close to 10% in France. as most other consumer electronics devices. IP boxes) or IT (home PC. for the most part. portable communication (mobile handsets. printers…) ** excl. the second half of the year remained tense.7 million units in 2011. Spain and the Netherlands. in Japan. confirming that the sector is on solid ground. such as DVRs and new-generation game consoles (see section on the ‘connected home’) is also pulling down sales for veteran audio and video peripherals. if the impact that of the terrible catastrophe of March 2011 had on the consumer electronics market was apparently short-lived and relatively minor. In France. during which sales revenue 1. at least in the most advanced regions. This trend is not enough. smartphones and tablets – . which includes televisions along with cameras and camcorders. the bulk of the devices being sold are not Internet-ready. After a very bleak first six months. Markets and players European market suffering from shrinking prices … The European market shrank further still in 2011. the situation is playing out very differently.2.7 Consumer electronics Caught in a vice Consumer electronic sales1 increased at roughly the same pace in 2011 as they had in the previous year (4%). and an encouraging start for 3D sets). we see shows that this average rate of growth hides very widely varying regional trajectories and. cable and satellite) networks in these countries. and the North American share of global revenue dropped below 25% for the first time ever. that market nonetheless still continues to feel the effects of structural shifts that are causing a strain in all of the world’s advanced markets. And. with losses dropping further still in France. in addition to IP boxes and DVRs. Home video equipment. smartphones) Source: CEA . reporting -8% to -14% decreases in sales revenue. while unit sales will be sustained by users buying multiple sets. plummeted by more than 20% in Italy. for instance.000 more than the previous year and a record high but.

2005-2012 Millions 9 6 low growth scenario high growth scenario 3 0 2005 2006 2007 2008 2009 2010 2011 2012 Source: Simavelec Very disparate equipment levels in TV homes % of TV homes equipped with… 100% 53 80% 60% Europe USA Japan 40% 20% 0% Flat screen TV HDTV DVD player/recorder DVR Blu-ray player Source: Screen Consumer electronics .idate.The TV market has reached its peak in France Growth of TV sales in France. IP Network www.

social networking sites generate their earnings from both sources of income. which is a software-based service.0 services. respectively. have enjoyed a CAGR of 30% between 2006 and 2011 for the former. Next come content-based > Contact: v. in 2010 Billion € Software-based services Content-based services E-commerce margin Total USA 25.bonneau@idate. Taking the market as a whole.3 3. Online video’s ad revenue increased by an annual average of 95% annually between 2009 and 2011.8 Internet services Strong growth despite the crisis The Internet services market is thriving. followed by the EU-27 at close to 37 billion EUR. Online search. so still has a lot of room to grow in terms of value. for instance. Markets and players 54 DigiWorld 2012 Software-based services the prime source of value When comparing the various online service markets. along with the mobile Internet.9 8. the Internet services sector is booming and expected to overtake the access market in the coming years. however. then music and e-books with 12% and 7%. of content-based services in the US and of software-based services in Japan.3 1. video accounts for more than half (53%) of the segment’s revenue.2 Source: IDATE . Internet services segmentation IDATE defines the Internet services market as the sum of the following segments: • software-based services and Internet services market in selected countries. followed by social networking at 6% and paid mobile apps at 4% – with other online advertising accounting for the remaining 5% of income. with 154 EUR per capita. Software and content-based services have two main sources of income: advertising and paid services. and 73% in Japan. Meanwhile the market’s two main market segments.2 5. they can also earn direct revenue from the sale of virtual goods that are used on the site. with the rise of Web 2. but also the Internet of things and mobile software.8 2. however. and 28% between 2008 and 2011 for the latter. for instance. we it can be seen that software-based services still have a roughly 60% market share in the United States and the EU-27. Paid gaming came in second with 16%. it is Japan that is in holds second spot with 126 EUR. which is also software-based. the United States led the way in 2011 with earnings of 51 billion EUR. However. followed by print media which generates 28%.2 26. earns all of its income from advertising. and social networking sites in particular. • e-commerce. then e-commerce with only around 7% to 10%. calling and e-commerce markets. In terms of relative value. • content-based services and applications: both online and mobile content. well ahead of the EU-27 at 72 EUR per capita. The revenue generated by the sale of Internet access products still outweighs revenue earned on services strictly speaking. while the revenue earned by paid services climbed by 94% a year on average between 2007 and 2011.2 37. generating 35% and 34% respectively. namely search and cloud computing. although the United States leads the way here as well.7 EU-27 18.6 3.1 13. And each every one of these markets is enjoying very healthy growth. Meanwhile. There are some specifically regional trends. then Japan whose market was worth just over 16 billion EUR last year. apps and online video – combined with the already established and monetised search. such as the relative significance of e-commerce in the EU-27 (10% of the market). Looking at contentbased services.2. whereas cloud computing. It is a relatively young market. services with a roughly 30% share of the market (20% in Japan).7 Japan 9. through the value-added provided by the Internet and not the total value of the goods and services sold online. which include not only SaaS/cloud computing and Web services. earns its income from charging users for the service. All Internet services segments growing steadily A further breakdown of software-based services shows that search and cloud computing accounted for the majority of revenue in the EU-27 in 2011. free and paid. Although they are primarily adfunded.

Stronger productivity for Internet services in the US Internet services revenue per capita in 2010 € 35 30 25 20 15 10 5 0 USA EU-27 Japan Content-based services Software-based services Source: IDATE Internet services .idate. video and cloud computing by far the Web’s biggest earners Breakdown of Internet services revenue in Europe in 2010 Software-based services 5% Content-based services 55 4% 6% Search Saas/Cloud computing Games (paid services) Social networks Paid mobile applications Other online advertising 12% 35% Video Press Music E-book 28% 53% 7% 16% Source: IDATE www.

56 DigiWorld markets by region DigiWorld 2012 .

idate.III DigiWorld markets by region 57 .

3 Geographical shifts: just the way it is? 58 DigiWorld 2012 DigiWorld markets by region .

the gap widened once again last year. especially in the mobile segment where LTE networks are already covering 50% of the American population. The IT.T North America leads the charge.2%. Accounting for more than two thirds of the world market. software and services markets are the chief driving forces of the ICT industry in North America. out for having a very well developed television market.7% growth compared to only 1. especially for smartphones. Europe is again lagging behind North America. advanced regions still have a solid influence over global trends. North America also stands 59 www.5 points less than in 2010. The equipment market also got a real boost from North American telcos’ investments. with emerging regions reporting 10. it is still one of the world’s largest in terms of volume.8% of the previous year. have been a real drain on cash flow. emerging regions increased their share of the global ICT market by close to two points. This has only served to consolidate their influence which was already stronger in North America than anywhere else in the world. not only in calling minutes but especially when it comes to data.5%. up to 32.5%. to such an extent that the leading telco subsidies. Their relative contribution to ICT sector sales still outweighs their economic weight: in 2011. more strongly than ever… North America alone accounts for 30% of the all DigiWorld markets. The overall growth rate of the ICT industry. with revenue growth dropping on both sides of the pond but down to less than 1% in Europe in 2011. In 2011. thanks to a higher growth rate than advanced … while Europe continues to slide Although on a downwards slide. by five to six points more than in Europe: in 2011. enjoying a healthier momentum than other sectors of the DigiWorld last year. reveals sizeable nuances on both sides: in advanced regions. with the momentum in the North American market helping to drive a steady rise in revenue in areas where European markets appear to have stalled. hardware. Consumption levels are high as well. even though a lot of their money in 2011 was spent on acquiring spectrum. even though it suffered significantly in 2011 from pressures in the pay-TV market. Handset sales are skyrocketing. ahead of telecommunications (36%) which is the top earner in the rest of the world. the consumer electronics (CE) market suffered a real setback of close to 5% last year. . Europe is still the number two region in terms of revenue. accounting for close to 28% of the global market – but is now on equal footing with Asia-Pacific.5% for developed regions. Although the telecom market generates a smaller percentage of income than it does in the rest of the world. This was already the case in 2010 and was truer still last year. nevertheless. in 2011 is well below the 3. which is just 0. these segments are by far the largest income earners. it is hard to compare two such different regions. aside from handsets and computers/tablets. growth in the US stood at 4. Meanwhile.7%. After levelling off slightly during the early part of the recovery in 2010. generating 12% of DigiWorld revenue. in large part due to plummeting prices. At 42%. 2. Of course. It nevertheless remains that European markets have been steadily losing ground on the Introduction he ongoing shift in regional power between DigiWorld markets that got underway early in the 2000s is nowadays increasingly driven by structural influences. while on the other side of the pond average growth rates shrank by an average 0. mobile services revenue in the United States was growing steadily. A closer look. the combined GDP of advanced economies represented just under 64% of global GDP. This is true as well on the technological front. In the mid-2000s.idate. especially for flat screen TVs. having already had an accelerating jolt from the global financial meltdown. and where close to 42% of mobile users had a smartphone at the end of 2011.

Australia and New Zealand. reporting 4% growth and a steady momentum in 2011. more significantly. but their momentum is flagging and even moving into the red. The overall state of the economy is nonetheless sustaining demand. still well behind the United States but pulling ahead of Japan. second. Excluding IT. At this rate. Of course. because they account for close to 36% of the entire ICT market and. sharing several features with China and India. after having played catch-up in 2010. Germany has climbed back to more than 2% growth. The CE situation is especially worrisome – its 8% decrease in revenue comes despite a significant increase in unit sales. and reporting virtually zero growth in 2011. are largely confined to Europe. Together they account for half of DigiWorld markets’ revenue in that part of the world. Even though there has not been a massive difference from year to year. At the other end of the spectrum. China will become the world’s second largest market by 2015. Alongside these two regional titans. Another sector that had a very tough time last year is consumer electronics.8% in 2011). respectively. Licences to perform LTE trials were issued back in 2010. The many faces of emerging markets On the other side are developing countries which continue to post very solid growth rates: their top two regional representatives. dropping close to a point over the past two years. also being felt in North America. Meanwhile. South Korea. Television services grew more than 50% from 2008 to 2011. a portion of sales are being lost to other devices. The situation in Latin America is somewhat different.8%) in 2010. In the largest markets in Western Europe. ARPU levels are a far cry from are seen in the most advanced markets – mobile retail ARPU in India has fallen below 1. growth in two countries has actually slipped into the red: Italy for the third year in a row. after enjoying a brief respite in 2010. even enjoyed accelerated ICT market growth in 2011 of 13% and more than 15%. of which 10% are 3G customers.9% compared to 0. Asia is an especially disparate region. One perfect case in point is Vietnam whose mobile customer base has grown by close to seven times over the past five years. to reach 133. 60 DigiWorld 2012 DigiWorld markets by region .3 global stage. and Spain. as much for IT from the business segment as for handsets and communication and entertainment services from consumer segment. because even a slight decrease hurts this sector that is already in the red (-0. although they account for close to a quarter of sector revenue. and especially to handsets which are increasingly feature-rich and putting such unitaskers as portable MP3 players and GPS devices out of business. In addition to growing pressure on prices. whose growth has been steady (4% for hardware) and even increasing in the software and services (by 2. is allowing telcos in these countries to generate positive margins despite tiny per-customer revenue. TV services are still major breadwinners and appear to be back on track. China and India. It includes telecom markets that have been liberalised for 15 to 20 years now in a great many countries. all DigiWorld sectors are pulling the European market down.5 million at the end of 2011. a number of smaller Asian markets are enjoying equally spectacular growth. which makes them more mature markets with naturally lower growth rates that that found in Asia. spurred by pay-TV whose revenue almost doubled during that period: the popularity of the small screen has also boosted consumer electronics sales. namely Japan. with a heavy representation in its advanced markets.50 EUR a month – but the massive influx of new customers is more than compensating and. telecom services are hugely influential there: first. This is thanks especially to pay-TV subscriptions and less to licensing fees which. This is especially true of Japan whose ICT markets have been shrinking steadily since the mid-2000s.

idate. The economic and political situation in very numerous countries in the region is still fragile. which are often cited as an example of these countries’ ability to embrace new technologies. and especially how it shapes up within the two sides. All in all.Finally there is the Africa and Middle East region which still has real potential to grow. is still up for grabs: has Europe definitively lost its lead to the United States? Will Africa manage to live up to its potential? More broadly. or will current differences gradually disappear? Didier POUILLOT 61 www. given the present low equipment levels in virtually every category. of which very few have a smartphone. while it is true that the balance of power will continue to shift in favour of emerging Introduction . the 600 million SIM cards inventoried in Africa still translate into only three out of 10 inhabitants with a cellphone. will local ICT markets continue to have distinctive features. and a cautious approach is called for regarding any forecasts for the medium term – despite (or because of?) the role that communication technologies have played in many of the uprisings that have occurred there since the start of 2011. the rate and scope of the shift. Even in the area of mobiles.

With per-capita spending of more than 2. with among the highest equipment levels of anywhere in the world: 70% of households have broadband access.091 EUR. The overall growth momentum in North America is slight (+2. average per-capita spending rose a mere 0. following +2. however. Average per-capita spending on ICT services and equipment in North America stands around just over 2. first because of proportionately smaller customer bases. Average per-capita spending in Asia-Pacific is a mere 120 EUR.675 EUR on average.1 DigiWorld markets by region Recovery confirmed. but especially because of much lower percustomer spending which – especially when it comes to services – is largely due to the standard of living.600 EUR to 120 EUR depending on the region This shift is not. The rest of the world fared better. The global recession thus really serves to accentuate the structural changes occurring naturally in the regions.5% in 2011. except in Europe Shift in the balance of power slowly accelerating As in previous years. and especially in customer spending 62 DigiWorld 2012 DigiWorld markets by region Billion € North America Europe Asia/Pacific Latin America Africa/Middle East World 2009 868 847 725 224 148 2 813 2010 904 861 771 245 163 2 944 2011 931 872 825 263 179 3 069 2012 960 883 880 280 194 3 197 2015 1 008 946 1 067 335 241 3 598 Source: IDATE . around 40% of mobile customers have a smartphone and close to 90% of TV households have a digital service. and to a lesser degree thanks to newly industrialised and smaller developing nations such as Vietnam and Malaysia. in both cases having increased by 7% in 2011. but has increased by more than 10% annually for the past two years. These figures are naturally much lower in emerging countries. the UK. and have slipped from 75% in 2007. In Europe as a whole. up to 1. with most emerging markets still posting double-digit growth. which also includes negative growth for countries like Italy and Spain. and home to very high equipment levels. and rising steadily (+1. in the various regions. they did lose close to two points in 2011. with the drop in large part attributable to the gloomy situation in Spain and Italy. These gaps in growth rates are driving a slow shift in the balance of power between the regions. Japan is closer to North America. erasing the huge gaps in equipment levels.3% in 2010). but even in looking solely at the five big Western European markets – Germany. DigiWorld markets by region Average spending ranges from 2. European markets were especially sluggish last year. and for sectors such as telecommunications and especially CE.450 EUR.7% compared to 2010.3. Despite the bleak situation in Japan – which in 2010 enjoyed the sole (very meagre) increase of the past five years – the Asia-Pacific region is powering forward thanks to China and India. the overall steady growth rate in 2011 hides very disparate realities in the different regions. Italy and Spain – then per-capita spending is still only 1. reporting less than 1% growth on average.7%) but even slighter than in 2010.600 EUR. respectively. Furthermore it decreased in 2011. The continent naturally encompasses very different national situations. especially in the consumer electronics market. France. Average per-capita spending in Latin America stands at around 470 EUR and at just over 150 EUR in the Africa and Middle East region. North America and the industrialised countries of Asia-Pacific – still account for close to 68% of the global market. Although advanced economies as a whole – encompassing Europe. Latin America and the Africa and Middle East region are still enjoying solid growth: over 8% and 10%. or two thirds what it is in North America.

org Source: IDATE DigiWorld markets by region . by region Billion € 150 120 90 North America 60 30 0 -30 -60 -90 2008-2009 2009-2010 2010-2011 Europe Asia/Pacific Latin America Africa/Middle East 63 www.idate. by region 6% 9% 30% North America Europe Asia/Pacific Latin America 27% Africa/Middle East 28% Source: IDATE … but growth coming from Asia/Pacific DigiWorld markets’ contribution to growth.North American markets still out front… Breakdown of DigiWorld markets in 2011.


DigiWorld markets in North America
Back to normal?
The North American share of the global ICT market shrank again in 2011, down to just over 30%. It is still the world’s largest earner, ahead of Asia-Pacific and Europe – which is remarkable for a region that accounts for 25% of global GDP and only 5% of the world’s population. More significant still, of all advanced economies, it is the one that has enjoyed the strongest recovery since 2009: +3.8% in 2010 and +2.7% in 2011, and this in virtually all segments of the DigiWorld. Even those sectors that are reporting very slight growth, such as telecommunications services which were up by a mere 1.1% in 2011, and those posting negative growth (-4.8% for CE), are all outperforming Europe as a whole and Japan. The specific features of the North American ICT markets include the overrepresentation of IT, especially software and services, and TV to a lesser extent. Telecom services account for a smaller share of income than they do in any other region, including Europe, despite being very mature and boasting high ARPU. In fact, the multiple handset phenomenon is less common in North America than it is in other parts of the world – 90% of North American customers are pay-as-you-go – while more than 50% of America’s broadband customers access the Web via cable, and the TV component of triple play bundles is still supplied by legacy systems for the most part, and not by IPTV solutions. sales have been flat. Although performing better than their European counterparts in terms of relative value, the top American telcos are being very careful with their spending. Growth for IT hardware and systems is still high, buoyed by a replacement cycle that the recession pushed back two years. On a bleaker note, consumer electronics posted a noticeable decrease of around 5%, on the heels of a very slight recovery in 2010, and the market’s value appears caught in an inexorable decline.

Revolving trends in services
Over in the services sector, it is telecom services that are performing the worst – due in large part to huge pressure on landline calling. Mobile services are still riding high, with relatively steady growth thanks to data services, while the broadband market, whose customer growth rate is shrinking automatically, is nevertheless enjoying a steady rise in average revenue per user – spurred in particular by the deployment of superfast access and associated premium solutions. Growth for IT services and software stepped up in 2011, no doubt reflecting the desire of businesses to take back control and improve their management systems – a trend that goes hand-in-hand with the above-mentioned hardware replacement cycle. The TV services market has been struck by a dramatic setback, however, after enjoying a boost from a revived advertising market in 2010. This sharp decrease in growth is the sign of a market grappling with a new set of competitive pressures, with telcos as the chief culprits, and this in an already saturated pay-TV market and fierce rivalry with the Web for advertising dollars.

DigiWorld markets by region

Slower growth in equipment markets
After spending 2010 catching up, North American equipment markets posted lower growth rates in 2011. In the telecom sector, while device sales have been sustained by the popularity of smartphones, network equipment

DigiWorld 2012

DigiWorld markets in North America
Billion € Telecom services Telecom equipment IT software and services IT equipment TV services Consumer electronics Total 2009 260 58 275 82 108 82 865 2010 264 63 282 88 117 83 897 2011 267 65 295 94 121 79 921 2012 271 68 310 98 125 78 950 2015 288 74 350 91 124 74 1 000

Source: IDATE

Advanced IT markets…
Breakdown of DigiWorld markets in North America by segment, in 2011


13% Telecom services Telecom equipment IT software and services IT equipment 10% TV services Consumer electronics




Source: IDATE

… contributing to growth more than ever before
Annual growth of DigiWorld markets in North America, by segment

6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% 2008-2009 2009-2010 2010-2011 Telecom IT Media Total


Source: IDATE

DigiWorld markets in North America


DigiWorld markets in Europe
Gloomier and gloomier
DigiWorld markets grew by a mere 1% in Europe in 2011, which is by far the weakest performance of any region. Down slightly compared to average growth rates the year before, the slim progress in achieved in 2011 does hide some considerable adjustments that come to light upon closer inspection. While the momentum in telecom markets has ramped up only slightly, with meagre growth rates in both 2010 and 2011, and even negative when looking at services, a stronger recovery can be seen in IT service markets and steadier progress in hardware. One outcome of these trends is that the balance of power between telecom and IT markets continues to shift in Europe, with telecommunications now accounting for 42% of the ICT market, and IT for 40%. The European TV and consumer electronics markets are both reporting a dramatic drop in growth rates, which has translated into real losses for the industry. With the sector as a whole on a downwards slide, the European market share of the global DigiWorld has shrunk by close to one point annually for the past two years, falling to 27.7% in 2011. 2010, then took a turn for the worse last year. This can be attributed in large part to the situation in the French telecom services market where growth tumbled from 0.8% in 2010 to -2.4% in 2011. The resulting trepidation of telcos to spend naturally had a negative impact on the equipment market. The French ICT market as a whole grew by less than 0.5% in 2011, which is still better than most of the region’s largest markets, aside from Germany, but is by no means exceptional.

… in a European market that is losing its footing
Europe as a whole is being outperformed by all other regions, in all ICT sectors except television where it is faring better than North America. Even here, the region’s relatively steady growth is due chiefly to the healthy momentum in Eastern Europe. The poor performance of European markets compared to the rest of the world was already visible in 2010, and the gap has remained at just over three points for the past two years. Not all sectors, however, are following the same trajectory, with weak performances for telecom services and especially consumer electronics, but the gap is narrowing more or less in the four other sectors. In most instances, however, it has been the significant decrease in global market growth in a given sector that has allowed Europe to ‘recover’ somewhat, rather than any home-grown impetus. The only exception here is IT services which enjoyed a sizeable recovery in 2011, with a growth rate that rose from 0.8% in 2010 to 2.9% last year.

DigiWorld markets by region

The end of the French exception…
In addition to disparate situations in the sectors, European markets have also been behaving very differently in recent months. Some, notably Greece and Spain, have been falling deeper into recession, whilst others have inched towards recovery, namely Germany and the UK to a lesser extent, and one particular case, namely France. After weathering the financial meltdown relatively well, the French ICT market enjoyed a solid 3.1% increase in

DigiWorld 2012

DigiWorld markets in Europe
Billion € Telecom services Telecom equipment IT software and services IT equipment TV services Consumer electronics Total 2009 305 56 230 93 80 66 829 2010 304 57 232 97 86 66 842 2011 301 59 239 101 89 61 849 2012 302 62 244 102 93 60 862 2015 315 71 275 105 103 54 923

Source: IDATE

by segment 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% -7% -8% 2008-2009 2009-2010 2010-2011 Telecom IT Media Total 67 Source: IDATE DigiWorld markets in Europe .idate. in 2011 7% 11% 35% Telecom services Telecom equipment 12% IT software and services IT equipment TV services Consumer electronics 7% 28% Source: IDATE … dragging down the market Annual growth of DigiWorld markets in Europe.Telecom markets leading the charge… Breakdown of DigiWorld markets in Europe by segment.

and singularly in Japan. The Japanese telecom services market has not grown at all since the mid-2000s. also worth citing are the national programmes that have got underway in several other advanced countries in the region.3. Telecom services. As a result. with a usage rate among the highest in the world. The prime example is the Australian NBN1 which aims to build a single nationwide infrastructure delivering connection speeds ranging from 12 Mbps to 1 Gbps depending on the technologies employed. In terms of government policies. 68 DigiWorld 2012 DigiWorld markets by region DigiWorld markets in Asia-Pacific Billion € Telecom services Telecom equipment IT software and services IT equipment TV services Consumer electronics Total 2009 303 72 132 84 63 88 742 2010 314 79 138 93 69 98 792 2011 333 92 144 102 74 103 849 2012 356 98 155 112 80 103 903 2015 418 138 194 135 95 106 1 087 Source: IDATE . and at a cost estimated at around 30 billion EUR. and is still by far the country with the most homes passed for fibre access. wireline and satellite) to private sector operators. particularly those devoted to ultra-fast broadband rollouts. in fact – on the contrary. before falling back to a more reasonable rate of growth in 2011 (+6. or a fifth of the global total.3%. Japan losing ground… The markets are much less dynamic in the region’s advanced countries. but held steady at +6.7% and expected to starting climbing in the near future. Still. The momentum in other sectors has remained solid. for instance. Price decreases. the Asia-Pacific region share of DigiWorld markets has shrunk from 41. further aggravated by the severe natural disasters that shook the country early last year. spurred by a political will and sustained by a very solid industrial fabric. 1. with the Japanese GDP having shrunk by 2%. The decrease is due primarily to trends in two very different sectors: on the one hand.6% in 2011. The National Broadband Network is a government initiative to build a superfast broadband network and resell access (fibre. South Korea is a frontrunner in new generation networks and services. On the other hand is the consumer electronics sector whose growth fell to 0% last year. at least in the region’s emerging economies (see below). usually for the sake of competition. offering proof of the huge needs still left to fill. Much like Japan. Japan is still home to one of the highest levels of customer spending. revenue dropped by more than 10% between 2006 and 2011. with average per-customer revenue of around 840 EUR for telecom services alone. have naturally brought down ARPU. … even to the region’s other advanced economies The South Korean market seems to be under less pressure.2% in 2009 to 36. Although their decline had been less dramatic. revenue growth flatlined last year in other DigiWorld sectors – all of which enjoyed a slight recovery in 2010. This is not a sign that equipment or consumption levels are declining there: Japan continues to be a frontrunner in the mobile Internet. To compare: ARPU in the United States stands at 760 EUR. with IT hardware and TV services getting the heaviest bump. Virtually the whole of Japan is covered by now. however. The economic situation.4 DigiWorld markets in Asia-Pacific (1/2) Still strong potential ICT market growth in the Asia-Pacific region slowed slightly in 2011.5%). are growing at a lesser pace but have been gradually getting back on track since 2009. with growth in 2011 estimated at 1. with rate of penetration that stands at 42%: 46 million premises have been passed for FTTH. telecom equipment which enjoyed extremely strong growth in 2010 and drove the regional DigiWorld industry forward that year. is of course partly to blame for these poor performances. DigiWorld markets in Asia-Pacific (1/2) . by segment 12% 10% 8% 6% 4% 2% 0% -2% -4% 2008-2009 2009-2010 2010-2011 69 Telecom IT Media Total Source: IDATE www. in 2011 12% 9% Telecom services Telecom equipment IT software and services IT equipment 12% TV services Consumer electronics 39% 17% 11% Source: IDATE … for fast-growing markets Annual growth of DigiWorld markets in Asia-Pacific.A slowly evolving structure… Breakdown of DigiWorld markets in Asia-Pacific by segment.

In addition to these two giants. Lastly. with a special nod going to Vietnam and its 133. to the impact of substitution – with TV losing out to the Web in particular. The services market is growing less dramatically.9% compared to 4. India. as in advanced countries. whereas media. which means close to 170% growth during that time. trailing behind Malaysia whose equipment levels are roughly the same as in China.5 million mobile customers at the end of 2011. on average. The decrease in China is nowhere near as dramatic as it is in the West. nevertheless. once again posting double-digit growth last year.50 EUR a month in 2010. for mobile phones of course – with 140 million new customers in 2011 – but not only this: broadband and superfast broadband access networks are also developing at a spectacular pace. there were 101 million premises passed for FTTH/B. with annual growth of around 20%. The situation is much more disparate when looking at fixed broadband access where. The telecom equipment market has enjoyed an especially strong recovery. At the end of 2011. the Indian market growth rate has been consistently higher than that of China over the past several years. and landline access is still very little developed. and well behind Thailand and Vietnam. still trails behind with a market worth roughly one third that of China. it is also the case that the already low average per-user revenue has continued to drop over time: mobile retail ARPU slipped below 1. The rate of mobile penetration is close to or over 100% in a number of these markets. a sign of ongoing pressure on ARPU: in the mobile market. revenue has dropped by an average 4% to 5% over the past three years. both services and hardware. looking specifically at ICT markets. Second. First. the DigiWorld market share of GDP is slightly higher 70 DigiWorld 2012 Geography of DigiWorld markets in the Asia-Pacific zone Billion € Japan China India Other countries Total 2009 306 183 53 200 742 2010 312 203 62 215 792 2011 311 229 71 238 849 2012 314 253 79 257 903 2015 325 327 117 318 1 087 Source: IDATE . however. for a subscriber base of close to 21 million – out of a total broadband customer base of 150 million. both in ICT sectors and in the economy as a whole.3% in China. with China and India leading the charge. some three indicators that add some nuance to this gap. underscores the relationship between ICT and growth. Of course. a number of other emerging countries in the region have been experiencing solid rates of increase in ICT equipment and usage levels since the mid-2000s. however. the Indian telecom services market is the one reporting the highest increase in revenue: a very respectable 16% in 2011. with growth rates still hovering around 10%: slightly more for TV services and slightly less for CE. are back on track. TV services and consumer electronics have slowed significantly – due. IT markets. Accelerated growth in China… China is in fact reporting an accelerated rate of growth for 2011. On the whole. which translates into a density of close to 150%. There are. as it is everywhere else. the situation in most of the region’s other emerging countries is closer to that found in India. in India: 4. still boasting annual growth rates of around 20%. are very dynamic. A steady decrease in this figure is discernible over time which. compared to 10% to 12% for landline calling – which is being offset to some extent by the rise of broadband access. up to 13%. Equipment levels are rising. DigiWorld markets by region … but still behind India The region’s second largest emerging market in terms of revenue.3.5 DigiWorld markets in Asia-Pacific (2/2) Growth still steady in emerging economies The region’s emerging markets. More impressive still is the net increase of 582 million customers in three years – or more than 16 million a month. India is reporting spectacular rates of increase in terms of customer numbers – especially in telecommunications where the mobile customer base has gone from 347 million at the end of 2008 to 929 million at the end of 2011.

in 2011 28% 37% Japan China India Other countries 8% 27% Source: IDATE … still Asia’s powerhouses Annual growth of DigiWorld markets in Asia-Pacific. by country 20% 71 Japan China 10% 5% India Other countries 0% Total -5% -10% 2008-2009 2009-2010 2010-2011 Source: IDATE www.idate.Chinese and Indian markets… Breakdown of DigiWorld markets in Asia-Pacific by 15% DigiWorld markets in Asia-Pacific (2/2) .

Fruits of market liberalisation These same telecom markets have nevertheless been progressing steadily over the past 20 years. down on the bottom rung of the ladder. It has been sustained by a relatively healthy advertising market. with the sole exception of 2009. Today. and slight in stature at that.3. the Latin American television services market nevertheless grew by more than 50% between 2008 and 2011 – or by 15% annually. and this for both hardware and services: spending has kept up with regional economic growth itself in the double digits since 2003. As it gears up to hosting major international sporting events – World Cup Football in 2014 and the Summer Olympics in 2016 – Brazil is being especially splashy with its cash. and account for 45% of the ICT industry revenue in the region. a few countries. their share of the global market grew by 0. are reporting equipment levels close or equal to what we find in Eastern Europe. TV services have enjoyed especially strong growth recently. IT markets are also powering ahead. carrying through from previous years.5%. One corollary of this growing prominence of TV is that consumer electronics are in relatively good shape in Latin America. their only rival here being the Middle East and Africa. Looking at fixed broadband access. Even taking this ‘bad’ year into account. 72 DigiWorld 2012 DigiWorld markets by region DigiWorld markets in Latin America Billion € Telecom services Telecom equipment IT software and services IT equipment TV services Consumer electronics Total 2009 108 28 23 20 22 28 230 2010 114 33 25 22 27 31 251 2011 120 35 27 24 30 34 271 2012 127 36 30 26 35 35 290 2015 144 46 39 30 50 39 347 Source: IDATE .3 points to 8. pay-TV revenue rose by 17% (2009) followed by more than 25% last year. Brazil still trails behind in this area. the region boasts particularly high penetration and usage levels: the average mobile density stood at 110% at the end of 2011. Mexico and Brazil – helped to create a strong momentum in equipment levels.2% all segments combined – and. telecom equipment markets grew at a lesser pace last year. at 271 billion EUR.6% – proof positive of ongoing efforts by operators A thriving television market As mentioned earlier.8% growth rate and. Chile. added to which there is still real room for growth in areas where advanced markets have hit their apex. The early deregulation of the bigger national markets – in the late 1980s/early 1990s in primarily Argentina. which is close to that fond in the advanced markets of Europe and North America. on average. although still by a healthy 7. with each contributing more or less equally to overall growth: the only standouts. with Latin America being home to more than 10% of the global base. telecom services at 6%. with rates of progress topping 9% in 2011. As in 2010. Mexico and especially Uruguay. After the surge in 2010. Television generates 11% of the DigiWorld sector revenue in the region. gaps in performance levels between the various sectors were narrow. except for the hiccup in 2009. to expand and upgrade their networks.6 DigiWorld markets in Latin America Lasting growth The DigiWorld markets in Latin America made solid progress again in 2011 – +8. but especially by the phenomenal success of pay-TV: even at the height of the global recession. including Argentina. however. with a sizeable portion of ICT spending being on TV products. were TV services with a remarkable 14.

in 2011 13% 11% Telecom services Telecom equipment IT software and services IT equipment TV services Consumer electronics 44% 9% 10% Source: IDATE … but growth driven by other sectors Annual growth of DigiWorld markets in Latin America.idate.Still leading edge telecom markets… Breakdown of DigiWorld markets in Latin America by DigiWorld markets in Latin America 13% . by segment 20% 73 Telecom 15% 10% IT Media 5% Total 0% -5% 2008-2009 2009-2010 2010-2011 Source: IDATE www.

the mobile Internet indeed represents a real opportunity for the development of a broadband market that is currently hampered by the lack (and the high price) of fixed access solutions.3% share of the regional total. growth rates have consistently been higher in the South. 74 DigiWorld 2012 DigiWorld markets by region DigiWorld markets in Africa-Middle East Billion € Telecom services Telecom equipment IT software and services IT equipment TV services Consumer electronics Total 2009 70 23 15 17 9 14 147 2010 76 26 16 19 10 15 162 2011 83 29 18 21 10 17 178 2012 91 30 19 23 11 17 193 2015 111 40 27 29 14 19 241 Source: IDATE . growth rates are substantially higher again in the southern part of the region: excluding South Africa. and the gap is widening: the average rate of increase for telecom services revenue in 2011 was around 9% in the north and 12% in the South. where the two sides are slightly more balanced. In sub-Saharan Africa. and. After performing remarkably well in 2010 (+16%). in terms of volume. In the mobile segment. In terms of momentum. In terms of its relationship to GDP. while media. it is slightly below Latin America. So the market still has tremendous room to growth. the DigiWorld markets of Africa and the Middle East are estimated at 178 billion EUR in 2011.3. offered a remedy to the difficulties the people had in accessing traditional communication and media networks. excluding South Africa. which marks just over 10% growth compared to the year before. During the chaos. This solid progress meant the region gained some weight on the international scene. and as high as 14% if we remove South Africa from the equation. especially because of the trend of using multiple SIM cards: according to the most positive estimates. The other DigiWorld sectors in the region are progressing in various ways. on the other hand. is still substantial and underscores the tremendous room for growth in the latter group. and singularly the Internet access they allowed. actual equipment levels are much lower than that. The contrast between North and South is especially visible in this sector. revenue there grew by 15% in 2011 compared to 10% in MENA while. Added to this. Libya and Egypt. South Africa alone accounts for roughly a third of that block’s 37. although it still only accounts for 6% of total revenue worldwide. the development gap between on the one hand. however. especially in terms of income with more than 60% of revenue and barely one third of the population. starting with Tunisia. Enabled by the introduction of affordably priced smartphones (50 to 80 USD). despite the recent political turmoil in that part of the world. IT markets as a whole enjoyed accelerated growth. the countries of MENA (Middle East/North Africa) still accounted for 62. customer numbers continued to rise by more than 20%. which today concentrate most of the region’s ICT markets. Can mobile deliver universal access? If the penetration rate has now climbed to over 60% in Africa as a whole.7% of the regional total in 2011. sub-Saharan Africa. In terms of revenue. telecom hardware markets were much less dynamic last year.7 DigiWorld markets in Africa-Middle East Potential remains high Taken as a whole. telecommunications networks. TV services and consumer electronics grew by slightly less than the year before. North Africa and the entire Middle East. though they still grew by around 10%. North-South divide is still very strong Africa and the Middle East continue to be the region where telecom services account for the largest share of the DigiWorld: 47% compared to 44% for Latin America and less than 40% in all the other regions. one out of every three African has a mobile phone. first in terms of new customers and second thanks to the mobile Internet.

in 2011 9% 6% Telecom services Telecom equipment 12% IT software and services IT equipment TV services Consumer electronics 10% 47% 16% Source: IDATE … but growth coming from a variety of sources Annual growth of DigiWorld markets in Africa-Middle East.idate.Markets sustained by telecoms… Breakdown of DigiWorld markets in Africa-Middle East by segment. by segment 12% 75 10% 8% Telecom 6% IT Media Total 4% 2% 0% 2008-2009 2009-2010 2010-2011 Source: IDATE DigiWorld markets in Africa-Middle East .

76 Access and devices DigiWorld 2012 .

IV Access and devices 77 .idate.

4 Fixed and mobile networks go super-fast. while devices swirl in an endless cycle of innovation 78 DigiWorld 2012 Access and devices .

future developments for 4G are already taking shape. mobile WiMAX. In addition to the deployment of LTE and the acquisition of additional spectrum. and the size of network cells will need to be reduced as well. Meanwhile. IP is now steadily making its way to mobile systems. Further. given the roadmaps for LTE rollouts and LTE-compatible handsets.000 and 20.000. at a time when mobile data traffic is exploding.Major transformations underway on wireline and wireless networks Superfast broadband is making its way to access networks. While video now accounts for the majority of traffic on all access networks.idate. Europe will have trouble making up for time lost in largescale LTE rollouts and in making additional spectrum available. With the introduction of LTE. 79 www. These figures are expected to expand tenfold over the coming decade. Mobile traffic explosion forcing changes to network architecture The most pressing issue today is bringing the needed changes to mobile networks to handle the ongoing surge in data traffic. Here. The growing trend of baseband processing in the cloud is another key change in mobile access systems. and so mark the (slow) beginning of the end for packet-switched calling on cellular networks. also known as HetNets. On wireline networks. as has been the case with 2G and 3G. femtocell and WiFi networks. VoLTE (Voice over LTE) will be making its way to the United States this year. along with the functionalities of heterogeneous networks. South Korea appears to be one of the driving forces behind 4G and one of the best positioned to usher in 5G further down the road. micro-cellular. The transition will nevertheless take five to ten years. A mobile infrastructure in a large Western European country is made up of between 12. the switch to optical fibre and FTTx in particular appears confined to only a few regions. with the deployment of myriad small cells with a range of only several metres. One shockwave is that. whereas China Mobile has a network of 800. with the integration of macro-cellular. As a result. even if 99% of calling traffic is still handled by packet switching. This results from LTE and the future LTE-Advanced – which the ITU is calling “true 4G”.org Introduction . there are sizeable disparities between European operators who are investing less than their counterparts in the United States and in a great many Asian markets. which will be followed by LTE-Advanced for high-speed networks. The latest improvements make it possible to integrate WiFi into network management with the same authentication. security and quality of service features. Some developed countries are betting instead on legacy copper networks to deliver the last mile.000 base stations. even if it is chiefly only visible in Asia for now. IP continues to change the approach to access: after having accelerated the decline of switched wireline access. simply having access to additional spectrum alone will not be enough to handle the need for increased capacity. Cellular network configurations now take optical fibre systems into account as fibre is being used more and more for backhauling. with pipes that are forever expanding. delivering 1 Gbps in low mobility and 100 Mbps in high mobility – having virtually eclipsed their sole competitor. mobile operators are working to better integrate carrier-grade WiFi into their networks to have an efficient means of offloading traffic. mobile networks are expected to no longer be burdened by conflicting standards. its optimisation is becoming vital on mobile networks. using VDSL2 vectoring which can supply 50 Mbps but cannot extend more than 1 km from the cabinet. In addition. and ill-suited to developing countries. Mobile infrastructures are being continually upgraded with the deployment of HSPA+ and LTE.

to control a home networking system. and wireless access will gradually be incorporated into this environment. Any doubts over the future of tablets were put to rest. The question. while the devices themselves are getting smarter and taking on a growing array of tasks. which is also an issue with data centres. and Chinese and Taiwanese players will prove redoubtable rivals in this segment. The digital home is tending to move towards better integration of the various displays. A wide variety of devices populates the home: game consoles. M2M modules. 2011 was the year of the smartphone. which meant an accelerated decline for the “good old” feature phone. Samsung – which will have the highest mobile handset sales in 2012. the Lumia. coming soon. Increasingly powerful and varied devices The variety of Internet-ready devices is growing in terms of both size and shape. although premium OTT content will no doubt give it a run for its money. new projects are popping up in both the United States and Europe. In developed countries. alongside Android and Apple’s iOS. and of mobile TV in general. Apple rose to the Number Three spot in terms of mobile sales in 2011. A thriving sector The effervescence of the access market is reaching a peak as mobile operators work to build ever faster networks. Also worth mentioning is that triple play IP boxes. it is worth wondering about the respective roles that broadcasting and LTE-Advanced networks will play by the end of the decade. which are always on. is whether LTE-Advanced will ultimately be able to replace terrestrial broadcasting networks using its broadcast component. Africa and the Middle East in 2015. then. The market will continue to evolve with the upcoming release of midrange smartphones priced at under 100 EUR. while terrestrial broadcasting uses the frequencies best suited to broadband coverage. pulling ahead of LG which also failed in its bid to enter the smartphone fray. connected TVs. Providing them with a sleep mode would help make them less of a drain on power resources. gaming capabilities. ADSL boxes are becoming increasingly feature-rich with the gradual integration of femtocells. DSL (IPTV) and satellite networks. These various developments will probably be a good source of growth for operators’ triple and quadruple play bundles. IPTV boxes. managing ubiquity and multiple interfaces. Nokia. TV programmes are broadcast chiefly over cable. multimedia gateways and hard drives. While the latest World Radiocommunication Conference (WRC-12) wrapped up with an agreement to look into a second digital dividend for Europe. which finds itself in the same boat and which still did not believe in the future of tablets just 18 months ago. born of its collaboration with Microsoft. to name but a few. With the failure of MediaFlo in the US. Manufacturers’ market share will be shaken up. the ability to manage content sharing between devices and. wireless routers.4 Is a single network inevitable for both high-speed mobile and broadcasting? One of the overriding trends in today’s television market is the growing prominence of pay-TV. It is also worth wondering about the role which wireless broadcasting networks will be given over the next five years in backing up classic cellular systems. but there is no guarantee they will be successful. especially given mobile operators’ reluctance to sign deals with new entrants. appears to have found the glimmer of an answer to its troubles with its first ever smartphone. These two companies will enjoy the support of mobile operators eager to see a third environment develop. Meanwhile. overtaking Nokia which is now losing steam – is going head-tohead with Apple in the smartphone and tablet segments. this will usher them into the mass market. with the range 80 DigiWorld 2012 Access and devices . and predictions are that they could overtake PC sales in the not too distant future. are heavy consumers of energy. Blu-ray players.

and help bring down the cost of LTE rollouts. due to GPS interference issues. Two other main factors in the equation are market consolidation and pooling network resources. router. such as Kenya and Mexico. especially in Germany. tablet. Over in the wireline market. Innovation in the arena of mobile services will go by way of support for connected devices. in an interesting twist. and pressure is growing on call termination and roaming charges. M2M or video device) or usage. and in the United Introduction and variety of devices continually expanding and the Internet becoming increasingly mobile. creating faster services. particularly around AT&T and Sprint/Clearwire. the idea of creating a single shared LTE network in certain developing countries. A partial response can be found in the major changes that have been introduced over the past two years in the way mobile data traffic is billed.idate. At a time when calling revenue is down. They will accelerate as unlimited data plans gradually disappear and are replaced not only with capped plans and tiered pricing. Frédéric PUJOL . Italy and Spain.81 www. mergers can be expected between business-market companies. This year will also present an opportunity to assess the viability of the wholesale LTE projects of various operators: although LightSquared in the US has lost any chance of entering this segment. but also as a further segmentation of prices emerges. competition from OTT services is up. the challenge for European cellular operators is how to increase their data services revenue to offset declining calling revenue. Likewise. as illustrated by the interest of Vodafone in Cable & Wireless. A growing number of network sharing agreements will likely emerge. there could well be an accelerated market consolidation in the European mobile sector. Because of declining profit levels. its fellow operator Clearwire – along with Yota in Russia – is in the process of switching from mobile WiMAX to LTE. according to the type of device (smartphone. cloud computing and embedded telematics systems. appears to be taking hold.


Wireline access
The inexorable rise of broadband
Dial-up user numbers shrinking steadily
The number of POTS lines is shrinking year by year. The trend that started in advanced countries – in North America and Japan in the early 2000s, and two to three years later in Europe and South Korea – has been spreading to a number of emerging countries, starting with China and India since the mid-2000s. The base of classic phone lines shrank by more than 10% worldwide between the end of 2005 and the end of 2011, to just under 1.1 billion – which translates into 16.4 lines per 100 inhabitants, and an even more dramatic decrease in terms of revenue (27%). In the United States and France, the two countries most affected by this trend, the landline base has decreased by more than 40% in ten years, and this in terms of both user numbers and revenue. This decline is due chiefly to users switching to new solutions. Initially, they opted for mobile which delivers more universal access and is more immediately available in regions poorly served by wireline networks, but gradually they also took on board other applications such as VoIP and instant messaging. The growing ubiquity of broadband is helping to amplify the trend, while also opening the way for a much broader array of services (see Chapter 6). is the still sluggish growth in most emerging countries, with the notable exception of China. Over the past few years, China has been singlehandedly responsible for more than a third of global growth, and is now home to over a quarter of the world’s broadband subscribers. In terms of equipment levels, several European countries have caught up with South Korea, the world leader for quite some time: today, over 90% of households in the Netherlands have a broadband connection, while the rate of equipment across Scandinavia stands at around 80% (Eurobarometer survey, March 2011). Among the largest European markets, France and the UK are reporting the highest broadband penetration rates: at close to 70%, France is now on an equal footing with the United States and both are well ahead of Japan.

From broadband to ultra-fast broadband
National markets nevertheless differ on the technological front as well and, as a result, in the connection speeds and services on offer. Close to six out of 10 high-speed connections worldwide are delivered over DSL, a figure that rises to an average 7 out of 10 in Europe. Cable modem is in second place, with a particularly solid foothold in the United States where it accounts for around 50% of broadband connections, and in several countries in Europe, including the Netherlands and Belgium where it has a roughly 40% share of the market. Today, however, deployments are geared more and more to fibre, either as upgrades to existing networks – switching up to VDSL or FTTLA – or with new FTTH/FTTB system rollouts, as detailed in the following section. > Contact:

Access and devices

More than one fixed broadband connection for every two landlines in 2011
There were an estimated 600 million broadband connections in use around the globe at the end of 2011. The base has practically tripled since 2005, although the rate of increase has been slowing steadily as take-up levels in most industrial countries are already high, which means relatively little room for further growth. Added to this

DigiWorld 2012
Fixed broadband subscribers worldwide
Million subscribers North America Europe France Germany Italy Spain United Kingdom Asia/Pacific China India Japan Latin America Africa/Middle East World 2009 91 155 20 25 12 10 19 188 103 8 32 33 10 477 2010 93 168 21 27 13 11 20 222 126 11 34 39 12 534 2011 96 179 23 28 13 11 21 260 152 14 35 47 16 599 2012 100 195 24 28 14 12 22 304 179 20 36 56 21 676 2015 115 239 27 29 17 14 25 457 242 71 40 85 45 942

Source: IDATE in “World telecom services market”

The switch to VoIP – the French example
Comparative fixed voice customer base growth, by type of service

Millions 35






5 2006 2007 2008 2009 2010 2011

PSTN subscriber lines

Broadband lines with VoIP

Source: IDATE, in “World telecom services market”

DSL still ahead
Breakdown of fixed broadband subscribers worldwide, by technology

283 million subscribers 9% 3% 14% DSL 23% Cable modem FTTH/B Others

600 million subscribers 9%


DSL Cable modem FTTH/B Others 64% 18%

Source: IDATE in“FTTx watch service”

Wireline access


The fibre issue
The inevitable future of access networks
In mid-2011, there were more than 112.6 million FTTx subscribers around the globe, which marks a roughly 15% increase since the start of the year. This rate of increase is well below the approximate 39% growth reported during the previous six months which saw a spike in FTTx subscriber numbers in China, although the pace there has since levelled off. FTTH/B continues to be the most widely deployed architecture, accounting for more than 67 million subscribers worldwide, and around 180 million homes passed. Growth could well continue, with FTTN+VDSL connections making real strides in the medium term, if recent announcements from operators investing their hopes in technological developments around VDSL2 are anything to go by. FTTLA (fibre to the last amplifier), which is being deployed by cable companies, still lags well behind but has real potential to grow, especially in North America where more than 65 million homes can already access this new network. We also find sizeable disparities within the regions. Whether in Europe or Asia, some countries are making tremendous strides in the area of FTTx rollouts, such as Russia, Ukraine, China and India, while others are progressing much more slowly. On the whole, the most dynamic markets are those where classic broadband networks are not reliable enough to support the services that users want, and especially TV and video. Meanwhile, the more stable markets have reached a certain degree of maturity – having achieved peak coverage and penetration rates – or are in the midst of a structural phase of establishing a regulatory framework or assessing investment requirements and the like.

The FTTx migration issue
Ultra-fast broadband coverage continued to be a major priority for a number of access providers in 2011, as they prepare to meet a considerable rise in demand. They will truly need to put efficient marketing and sales plans into place very quickly if they are to offset their massive expenditures, as subscriber migration to a superfast service is by no means a foregone conclusion. According to a survey of broadband and ultra-fast broadband subscribers in four countries – France, Sweden, Japan and the United States – expected price hikes and satisfaction with their current service are, in fact, proving to be major impediments to switching. Furthermore, residential customers tend not to be proactive, and the switch to fibre will need to be steered by strong vendor-led marketing campaigns that explain the benefits of upgrading to FTTx, other than just having a faster connection – think of innovative services and applications, pricing and more – even if increased bandwidth remains the chief selling point.

Regional hierarchy unchanged
Asia-Pacific still boasts a comfortable lead over the rest of the world, accounting for 73% of the world FTTH/B subscribers. Japan is still the biggest market with 20.8 million FTTH/B subscribers as of mid-2011, but things are picking up in China which posted 14% growth in the first half of the year, compared to 5% for Japan. This will no doubt affect national rankings in the not too distant future. Thanks to the healthy growth momentum in the East, combined with solid potential in Russia, Europe comes second in the regional rankings, with more than 10 million FTTH/B subscribers in June 2011. This leaves third place to the United States, home to 7.3 million FTTH/B subscribers and with a more even distribution of the different types of fibre access network: FTTN+VDSL accounts for close to 36% of the country’s FTTx connections.

DigiWorld 2012

Access and devices

> Contact:

FTTx subscribers worldwide by technology, mid-2011
Source: IDATE in “FTTx watch service”

Million subscribers North America Western Europe Central & Eastern Europe Asia/Pacific Latin America Africa/Middle East World

FTTH/B 7.4 2.9 7.3 49.5 0.1 0.4 67.5

VDSL 5.1 2.6 0.0 0.5 0.9 0.3 9.4

FTTLA 0.0 3.0 0.7 0.0 0.0 0.0 3.6

FTTx+LAN 0.0 0.2 2.0 30.0 0.0 0.0 32.2

Total FTTx 12.5 8.7 9.9 79.9 1.0 0.7 112.7

in “FTTx watch service” Ongoing technical progress Connection speed by technology ADSL2+ ~ 10-20 Mbps PON/P2P 100+ Mbps VDSL2 ~ 40 Mbps 85 copper network fibre optic network FTTB/C VDSL2 Vectoring ~ 100 Mbps CO FTTN VDSL2 ~ 40 Mbps FTTN FTTB/C FTTN VDSL2 ~ 50 Mbps VDSL2 Bonding ~ 80 Mbps VDSL2 Vectoring ~ 100 Mbps Source: FTTH The fibre issue . from Alcatel-Lucent www.idate.FTTH/B finally making headway in Europe FTTx subscribers in the main regions around the world Million subscribers 250 200 150 Rest of the World Asia/Pacific 100 Europe North America 50 0 2009 2010 2011 2012 2013 2014 2015 Source: IDATE.

Not only is individual per-customer traffic decreasing. especially due to high-volume offers. which accounted for 30% of the world’s mobile customers at the start of 2011. the two pioneers where 3G is the most common form of cellular access. More than one in three new customers comes from China or India whose penetration levels at the end of 2011 were a very solid 74% and 78%. it now stands at only just over 2 USD a month. albeit more so in North America. on the other hand. or by 30% in two years! the steady decrease in average per-minute prices (-13% in France between mid-2009 and mid-2011. Hungary and New Zealand. largely due to equipment levels there already being very high. the world mobile user base grew by 14% during the year. This trend will continue and gradually make its way to those emerging countries that are still trailing behind: in China. On the data services side of things.8 million at the end of 2009 to 14. The pace is relentless: before we can even catch our breath. has been weighing on operator income for several years. with especially strong rates of increase in emerging economies in Asia-Pacific. in other words the extent to which the decline in average calling revenue can be offset by the increased use of data services. Customer numbers in Europe and North America. with some even posting negative growth: in Greece. more recently.4 million at the end of 2011. 3G customer numbers more than doubled in 2011 and accounted for 12% of the base by year-end. This decline in calling revenue is due. the focus is more on achieving a balance between calling and data revenue. In the European Union. cellular customer numbers dropped from 20. to 86 DigiWorld 2012 Access and devices > Contact: m. which is reporting around 20% annual growth. advanced markets generate around 60% of all mobile services revenue. have been growing at a much slower pace in recent times. Shrinking ARPU is a concern across the board. first. The huge surge in data traffic has. for instance. however: although they account for less than 30% of the world mobile customers. though. but not necessarily to the same degree. more than a third of mobile customers was 3G-equipped at the end of the year. to the staggering popularity of smartphones: in the United States and the UK especially. European and North American markets have made tremendous strides in this area in recent years. for instance) but is further aggravated by a decrease in calling traffic. the first footsteps of 4G are already making their mark.3 Mobile access Momentum interrupted Equipment levels still rising in emerging markets Totalling some 6 billion customers at the end of 2011. for instance. it is estimated that around 50% of revenue today is earned on text messages – a segment where pressure on prices. but so too is mobile calling traffic in general in such countries as the UK. The ARPU challenge The average revenue per user (ARPU) varies a great deal between Asia and the countries of the West. In several European countries. Latin America and in the Africa and Middle East region. This can be put down to the increased coverage since the mid-2000s Mobile customers worldwide Million customers North America Europe Asia/Pacific Latin America Africa/Middle East World 2009 308 978 2 124 508 617 4 535 2010 329 997 2 635 568 735 5 263 2011 345 1 031 3 110 634 865 5 987 2012 359 1 060 3 545 684 981 6 628 2015 387 1 117 4 461 783 1 270 8 017 Source: IDATE . Increasingly ubiquitous 3G From a technological standpoint. the switch to 3G has made solid progress.4. helped to sustain a strong increase in revenue. In advanced countries. the morose economic climate only aggravated the decreased growth rate. as detailed in the next section. Beyond Japan and South Korea. the massive influx of low-cost customers automatically brings its own average revenue – to such a degree that. respectively. in a country like India.baudry@idate. than in Western Europe and developed markets in Asia where growth is closer to 10%. the breakdown between 2G and 3G customers was reversed in 2011. In emerging markets. contributed less than 8% of new customers during the year. These two regions.

in 2011 and 2015 2011 6 million customers 14% 6% 16% 17% 11% North America Europe Asia/Pacific Latin America Africa/Middle East 10% 2015 8 million customers 5% 14% North America Europe Asia/Pacific Latin America Africa/Middle East 52% 56% Source: IDATE in “World telecom services market” Proportion of 3G/4G customers in Europe and North America 80% 70% 60% 50% 40% 30% 20% 10% 2008 2009 2010 2011 2012 EU-27 2013 2014 2015 87 www.Asia/Pacific gaining weight Breakdown of mobile customers by North America Source: IDATE in “World telecom services market” Mobile access Switching to 3G and beyond .idate.

88 DigiWorld 2012 > Contact: f. home automation and remote surveillance. we can expect to see a broad range of LTE-enabled solutions such as smart metering. apace with the increase in data traffic. not least the fragmentation of LTE spectrum and. In terms of services. there were more than 9 million LTE subscribers – of whom more than half were Verizon Wireless customers in the United States – employing more than 30 LTE networks worldwide. Further down the road. Even though a number of LTE-compatible devices have been available since early 2011 – smartphones. The 4G ecosystem is spreading quickly. In January 2012. and over 200 cellular operators are now deploying the technology. along with Yota in Russia. telematic and HD video capabilities. LTE could give operator income a boost. Sprint and Dish have elected to invest heavily in LTE. and new rate plans are being introduced that have raised both bitrates and monthly caps on traffic. whereas over in North America cellcos increased their spending on mobile networks by around 10 billion USD from 2009 to LTE subscribers worldwide Source: IDATE in “LTE watch service” Thousands North America Western Europe Central & Eastern Europe Asia/Pacific Latin America Africa/Middle East World 2009 0 1 0 0 0 0 1 2010 70 65 7 2 0 0 144 2011 6 039 1 368 46 1 815 0 126 9 393 2012 31 623 4 816 1 547 9 846 769 883 49 484 2015 139 248 86 405 24 286 165 539 34 770 32 266 482 513 . with mobile operators investing only gradually. In developing countries. thanks to confirmed operator interest in long term evolution and in “true 4G”. Upsets on the horizon In terms of spending on mobile network. with expenditures that grew by a very slight 2. while supplying even faster connections than LTE. the evolution of mobile WiMAX) standards had been accepted as the standards for the next generation of mobile systems. There are nevertheless still some stumbling blocks for LTE. LTE-Advanced. of course. but also South Korea and Japan – and increased competition in the United States now that Clearwire. operators in Europe are working to minimise the impact of LTE. By the end of the year. and with LTE-Advanced they are expected to reduce per-Gb prices by 10 times on wireless channels. In developed countries. to be followed by LTE-Advanced starting in 2013. the lack of compatible devices. with low latency and the ability to use to large channels of up to 100 MHz. are all adopting roughly the same business model. will make use of the increased bandwidth supplied by LTE. and on supplying Verizon Wireless in particular. M2M modules – manufacturers having been concentrating on the American market. The wholesale operator model appears bound to emerge with LTE in a number of countries. Dish and Clearwire in the United States. LTE rollouts picked up speed in 2011.4. The tug will come with massive growth potential in Asia-Pacific – led by China and India with TD-LTE. referred to as “MT-Advanced” or “true 4G”.4 LTE (Long Term Evolution) Coming soon: “true 4G” Relatively swift take-off and very healthy growth prospects After the pioneer launch by TeliaSonera in Stockholm in late 2009 and the first deployments in 2010.6% in 2010. tablets. along with services in the cloud such as online gaming. They enable bitrates of up to 1 Gbps in low mobility and 100 Mbps in high mobility. Access and devices LTE bolsters technical performances and helps bring down mobile access costs One of the main reasons mobile operators are deploying LTE is to deliver faster connections – up to a maximum 50 to 70 Mbps downstream – and to handle the tremendous surge in data traffic. No-one doubts that LTE will dominate the 4G landscape and will overshadow mobile WiMAX. These fourth-generation systems are more spectrum-efficient than 3G.16m (or WirelessMAN Advanced. pujol@idate. sharing a single LTE infrastructure will enable market players to earn a swift return on their investments. There will likely be more than 800 million LTE accounts worldwide by the end of 2016. LightSquared. The adoption of 4G in Europe has been slower. dongles. routers. as is the way in the early days of every new generation of mobile system. especially since LTE TDD and FDD duplex schemes will cohabitate and complete one another on both networks and devices starting this year. the ITU announced that LTE-Advanced and 802. with strategies that involve distribution via MVNOs and/or mobile operators.

8 Kbps 384 Kbps 3.6 Kbps 50 Kbps 70 Kbps 100 Kbps 250 Kbps 350 Kbps 800 Kbps 5. freq.4 Mbps 9. reuse=4) GPRS (4 slot) EDGE (4 slot) UMTS (Rel-99) HSDPA (Rel-5) HSDPA (Rel-7) HSDPA (Rel-8) LTE(Rel-8) 4x4 LTE-A (Rel-10) 4x4 Occupied bandwidth Peak (single user) Average (10 users/cell) Cell Edge (10 users/cell) 89 www.Emergence of LTE in the main geographical regions LTE commecial rollouts 2009 3GPP WCDMA Operators 2010 2011 2012 2013 TD-SCDMA 3GPP 2 CDMA operators Sizeable rise in connection speeds Technical properties of mobile networks Throughput Format GSM (1 slot) (10 users.idate.6 Mbps 42 Mbps 84 Mbps 300 Mbps 600 Mbps 9.6 Mbps 2.2 Kbps 36.6 Kbps 81.6 Kbps 36.34 Mbps 7.4 Mbps Source: Agilent Technologies LTE (Long Term Evolution) Source: IDATE .org 1 MHz 4 MHz 4 MHz 5 MHz 5 MHz 5 MHz 10 MHz 20 MHz 20 MHz 9.6 Kbps 236.2 Kbps 30 Kbps 80 Kbps 120 Kbps 240 Kbps 1.

With an outstanding performance of more than 75 million units sold.1% and 12. the new partnership of the latter with Microsoft has yet to bear fruit.carle@idate. validation process and in-app purchase – are some of reasons why Google will have a harder time turning a profit. Samsung appears to have been the big winner this year. are among the core challenges for the platform’s development. the smartphone has been making its way across the globe as economies of scale have enabled manufacturers and component suppliers to lower handset prices. ahead of both Apple and Nokia. which translates into a 44% increase year-on-year. > Contact: b. From an economic perspective as well. than its Android equivalent. LG and RIM come to mind – and in that of services where. On the manufacturer side of the equation. well exceeding its initial sales target of 30 million smartphones. marginalising veteran players. We predict that. by 2015.1%. have punished the development of applications for this new platform.4. This all happened without any real novelty to lend a hand. This question of An industry in upheaval: veterans under pressure This deep-seated change in the marketplace has also resulted in economic upheavals in the industry. along with the issue of protecting both the device and the interests of rights holders from hacking and copyright violations.5 Mobile handsets Smartphone: the little growth engine that could After a sluggish time in 2009. with unit sales increasing by 15. on average. the relatively different models used by the app stores – in terms of payment system. the years 2010 and 2011 were especially kind to the mobile handset market. they accounted for 27% of the 1. The Google Android OS runs more than 46% of the smartphones sold last year. There Apple reigns supreme with a 60% share of the market. thanks to a stable operating system and a very large community of developers. Nokia. operators have traditionally enjoyed a position of strength. respectively. world’s largest supplier of smartphones. and offer a wider range of price points. the South Korean manufacturer is now the 90 DigiWorld 2012 Access and devices Mobile handset sales worldwide Million units North America Europe Asia/Pacific Latin America Africa/Middle East World 2009 180 260 454 120 119 1 133 2010 186 287 528 159 144 1 304 2011 182 289 654 164 172 1 461 2012 185 305 670 173 166 1 500 2015 202 325 797 174 182 1 680 Source : IDATE estimates .0) for tablets. They all lie within an environment where business models are not yet set in stone. For applications that are available for both systems. This has been both in the arena of hardware – the troubles that have hit Palm. the delayed release of Honeycomb (Android 3. App stores: a still fledgling ecosystem The battle over applications is less clear-cut.5% of total sales in 2010. but is still struggling to make a dent in the tablet segment.46 billion mobile phones sold worldwide in 2011. thanks to their role as retailers and their control over the network powering the handsets. Although initially confined to advanced markets. along with its lack of stability. just over 51% of mobile phones sold worldwide will be smartphones. Although the selection of Android apps has grown considerably. notably when distributing content through recurring payment schemes. Smartphones account for a growing percentage of mobile phone sales – going from only 20. it is estimated that the iOS version will earn four times more revenue.

idate. by platform 91 600 000 500 000 End 2008 400 000 300 000 200 000 100 000 0 End 2009 End 2010 End 2011 Apple App Store Google Play (ex Android Market) Nokia OVI Store RIM App World Microsoft Windows Phone 7 Market Source: IDATE estimates Mobile handsets . development of local suppliers from emerging markets. esp. India & China Source : IDATE estimates Huge surge in available applications Number of applications available.Smartphones redrawing the competitive landscape Market share for the globe’s top mobile handset suppliers (all types combined) 100% Others* Sony Ericsson 80% Motorola HTC 60% RIM ZTE 40% Apple LG 20% Samsung Nokia 0% 2007 2008 2009 2010 2011 * in 2011.

and more than 30 have been identified worldwide for 4G. The prices paid for spectrum in Western Europe rose to impressive heights in 2011: the digital dividend frequencies sold for the equivalent of 0.2. 800 MHz and 1800 MHz bands are being used for pioneer rollouts. Sweden and France).70 EUR in 2010.7/2. The main trends in the realm of spectrum in 2011 included ongoing digital dividend allocations in Europe (Italy.6 GHz (LightSquared) . The European Union is having to contend with the additional challenge of harmonising spectrum policies within its area. by region Countries Europe USA South America China Japan South Korea Rest of Asia-Pacific Existing frequency bands 900 MHz . the 2. 2. however.1. putting pressure on mobile operators to increase bitrates and network capacity. Other developments worth mentioning include work on the possible reassignment of L-band from digital radio to mobile broadband.1 GHz 1800 MHz . Fourth generation mobile networks will make use of various combinations of frequency bands in the different parts of the globe. where digital dividend frequencies were auctioned off in 2008. Highly fragmented LTE spectrum… Five frequency bands were being used for LTE systems in 2011.6 GHz-band spectrum auctions and progress in refarming the 1800 MHz band for use by LTE systems.2. In Japan.S-band (Dish)? 700 MHz (698-806 MHz) .1 GHz 850 MHz .7/1. > Contact: f.2100 MHz 1800 MHz New frequency bands 800 MHz (790-862 MHz .1800 MHz 1900 MHz (PCS) 850 MHz -1.2.5 GHz 800 MHz 700 MHz (698-806 MHz planned) . while the US. …but successful auctions for premium spectrum Auctions for the 2.3 GHz . In Germany. with the latter bringing in considerable sums to State coffers. The 1800 MHz band has become a very attractive choice for LTE as GSM traffic in this band is declining quickly. North American and European authorities are pushing for more flexible rules for available frequencies. There is a real risk of fragmentation.1 GHz (AWS) .85 EUR per MHz per person in Italy.2.6 GHz 1.2.6 GHz Currently used by LTE Likely used by LTE Other mobile frequency bands . (cf. which has resulted in their growing interest in securing new frequencies and in refarming the bands currently being used for 2G and 92 DigiWorld 2012 Access and devices In addition to increasing the amount of spectrum assigned to wireless broadband. see table below). In the United States. along with the onset of investments in white space networks in the United States and the UK. and a great many countries in Asia-Pacific and Europe can potentially reassign it to LTE.6 GHz.4 1.6 GHz 700 MHz (698-806 MHz planned) . dividend) . as they are managed individually by each Member State. and roughly the same in the United States in 2008.5 EUR in Spain and 0.1800 MHz -2. the price came close to 0.3 GHz .6 GHz Source: IDATE 2. which is putting pressure on chipset and handset manufacturers.31 EUR in Sweden. in Europe. LTE was first deployed in the 700 MHz and AWS (Advanced Wireless Services) bands. Main frequencies used. In the United three-year lead in freeing up and assigning new frequency bands to mobile broadband.1 GHz band. The first commercial services in this band have got off the ground with dongles. NTT DOCOMO employs the 2.7/2. along with South Korea and Japan to a lesser extent. The Radio Spectrum Policy Plan (RSPP) continues its slow progress in Europe.6 Spectrum: the mobile broadband bottleneck Radio spectrum challenges and options Mobile data traffic continues to skyrocket.1 GHz (AWS) 1900 MHz (PCS) .6 GHz and 800 MHz (digital dividend) frequency bands are ongoing in Europe.2. LTE services have been developing since 2010 with some success.9 GHz .pujol@idate. 0.1. continue to have a two.2.6 GHz 700 MHz (698-806 MHz) 1.

idate.1 GHz 2010 USA 700 MHz 2008 93 www. LTE services in Europe 3GHz IMT Source: IDATE Shrinking gap in premium spectrum prices in developed countries Price of premium spectrum in a selection of countries € cent per MHz per inhabitant 600 500 400 300 200 100 0 Australia 850 MHz 2004 France UMTS core band 2001 France Free 2009 Germany 800 MHz T-Mobile 2010 Germany UMTS core band Spain 800 MHz 2001 France 2.1 GHz Orange 2010 France 2.6 GHz band: more auctions in Europe.4 2500 IMT 2690 Source: IDATE Spectrum: the mobile broadband bottleneck L-Band in Europe: towards use as a supplementary downlink band? LTE in the 1800 MHz band: growing interest in Asia/Pacific and in Europe . first commercial services in the USA and in Germany 900 862 915 960 GSM 925 1GHz Mobile Services (IMT) PMR Broadcasting Fixed services Unlicensed 1GHz 1350 L-Band 1427 1479 1492 1785 1900 2GHz 2010 Satellite VHF 174 223 410 470 1375 1400 1452 UHF 790 1517 1710 IMT 880 1164 180518801920 1920 S-Band 2010-2015 2110 2170 2200 2300 2GHz UMTS core S-Band 2400 2483 2.1 GHz SFR 2010 Sweden 800 MHz 2011 Canada AWS 2008 Germany 2.The frantic search for new radio spectrum Main spectrum trends White Spaces: first developments in the USA and in the UK 200 100MHz 300 400 500 380 430 450 600 700 800 Digital Dividend: auctions in many countries.

which was hit harder than market leader DirecTV. as revealed by the swift decrease in Netflix subscribers when the company changed its pricing models in the summer. which is nevertheless below the 7.99 USD/month for its premium service. Top US cable company Comcast lost 442.4. and by the termination of its distribution deal with Starz after it refused to pay a tenfold increase for streaming rights. while satellite pay-TV is still in good shape. their computer.99/ USD month per service – and unlimited access to premium quality content. their mobile phone or tablet. which is largely free. while Hulu was logging more than 27 million unique visitors in September 2011.8% rise in subscriber numbers in 2011. this growth momentum is also found in the sector’s revenue. respectively. both companies have quickly become very popular. in 2011 – while emerging countries are in the process of catching up and enjoying steady growth: pay-TV subscriber numbers rose by 7. which grew by close to 5% in 2011. cable companies are having to contend with a sizeable rise in cancelled accounts and satellite pay-TV providers are experiencing much more sluggish growth. while Number Two satellite pay-TV provider Dish Network. – Hulu offers some of its content for free and charges 9. Terrestrial television.2% and 4. Satellite ranks second with close to a quarter of the customer base. The first reason is because these new premium offers have proven somewhat fragile. Those in North America and Europe are showing major signs of saturation – growing by 1. Veteran players keeping up with the times Although cord-cutting is a reality for pay-TV providers in the US. either live or on-demand. veteran pay-TV providers are responding quickly to changes in the marketplace. accounts for only 1% of world pay-TV households. and on any other customised platform.000 subscribers in the first three quarters of 2011. Meanwhile. at least for the here and now.4% in Latin America and by 12.7 TV access Is cord-cutting really a threat? Pay-TV market expanding steadily More than half of the world’s TV households subscribe to pay-TV. on their TV. In any event. it does need to be put into perspective. followed by IPTV in a distant third place with just a 6% share of subscribers.6% growth posted in 2010. Although to a lesser degree.leborgne@idate. The markets are not all developing at the same pace. cablecos and telcos continue to have ties with consumers: Comcast in fact reported 823. By selling affordably-priced services 94 DigiWorld 2012 > Contact: f. accounting for close to two-thirds of pay-TV households.000 Pay-TV households worldwide Million households North America Europe Asia/Pacific Latin America Africa/Middle East World 2009 113 148 353 30 10 654 2010 113 156 385 36 11 702 2011 114 163 413 43 12 745 2012 115 169 440 50 14 787 2015 115 185 490 66 20 877 Source: IDATE . consuming an average of more than 3 hours of video a month. while Netflix charges 7. lost 188. reporting close to 12% growth last year. Cable is by far the leading system. reporting a 5.9%.000 new broadband customers in first nine months of 2011.1% in Asia-Pacific. The pay-TV sector is enjoying a steady rate of increase. and rolling out rival solutions designed to allow viewers to access all or a portion of their usual programming. Sizeable disparities between networks and regional markets If cable still dominates the pay-TV sector. Second. by 8. both of whom appear capable of undermining the classic pay-TV market. Hulu and Netflix.4% in the Africa and Middle East region. its growth today is weak – standing at a mere 2% in 2011 – and it is starting to lose market share to satellite and especially to IPTV which enjoyed a very solid 32% rate of increase in 2011. Access and devices Premium OTT likely to give pay-TV a run for its money The pay-TV market in the United States is feeling the impact of two relative newcomers. Netflix had a base of around 24 million subscribers in autumn 2011.

3% 2015 6.1% 27.4% IPTV Cable Satellite Terrestrial 37.9% 37.4% 29.Terrestrial loses a sizeable chunk of viewers to satellite and IPTV Change in the various broadcasting networks’ share of viewers worldwide 2011 3.7% Source: IDATE in “World television market” Connected TV will be a slow grower Billion € 8 7 6 5 4 3 2 1 0 2011 USA Billion € 8 7 6 5 4 3 2 1 0 EU-5 95 www.idate.0% OTT over Connected TV OTT over PC 2015 2011 2015 Note: includes advertising and paying revenues Source: IDATE TV access Comparison of OTT revenue on PC and connected TV .2% IPTV Cable Satellite Terrestrial 36.

are available. smartphone) and able to connect to the Web.8 The digital home: era of the Internet-ready device Internet-readiness driving CE industry growth Close to 560 million Internet-ready (or connectable) devices were sold worldwide in 2010: mobile phones. game consoles. 6. The digital home will only flourish and become profitable once appropriate business and pricing models. This objective is centred firmly around the user and the user experience. multimedia gateways. Video-on demand is naturally one of these services. They will need to adapt to a sedentary environment and make their way to fixed connected devices in the digital home. tablets. content needs to be able to travel from one device to another inside the home and nearby. easily and at no extra cost to the user. This is a challenge primarily for TV broadcasters who are working to win back a portion of viewers who have left them for the Web. multiplatform interfaces. multimedia hard drives. Continue to track user behaviour patterns to keep pace with their evolution. app stores and home services such as energy management applications. with the technology acting only as the enabler. Close to 300 million of these devices are portable (game consoles. smartphones and media tablets. Develop interoperable. social media. along with video games. a pointer. App stores have been key to the success of MP3 players. 8. Smartphones alone accounted for 45% of connectable devices sold in 2010. Develop content and service distribution solutions on connected devices. home shopping and customisable capacity. Encourage the emergence of a new brand of interactivity that lessens the space between TV viewers and their programmes. 4.michaud@idate. which is going the way of greater interactivity. Here. They will help improve the seamless ubiquity of services. Accessories enabling interaction in the digital home are still poorly suited to their purpose. Consumption will only develop within a fluid environment offering easy and natural interaction. 10. 9. > Contact: l. and increasingly exacting user behaviour. This comes as the result of the convergence between a technology whose frontiers are continually expanding. tablets. Allow content to be ubiquitous in the digital home. 3. including User experience a crucial ingredient in the digital home In their bid to conquer the digital home. applications. while TV sets need to be equipped with a camera 96 DigiWorld 2012 Connected device sales worldwide Million units North America Europe Asia/Pacific Latin America World 2011 191 212 279 53 735 2012 226 264 382 71 943 2013 258 316 503 91 1 167 2014 287 375 629 117 1 408 2015 306 426 727 145 1 605 Source: IDATE . Once acquired. They represent just over half of all consumer electronics devices sold that year. which include ubiquitous payment solutions. and an end-to-end one stretching from searching for content to buying and delivering it. Connected devices with intuitive. to improve the efficiency and flow between the user and her devices. immersive and reactive interfaces. Enhance and improve the television operating system and user interface. STBs and digital media boxes. for content management services and for distributing interactive services tied to TV programmes. facial expression and gesture recognition would enable the emergence of new customised solutions. either directly or through a home network. Blu-ray players. 1. a secondary screen (possibly a touch-screen) and a keyboard. The connected TV will be able to make use of the Internet connection to browse the Web and to network with other devices in the home. 5.4. 2. gaming. televisions. 7. The Internet connection needs to be exploited to deliver a library of value-added content and applications. applications and content from one device to another. Remote controls need to be outfitted with an accelerometer. Access and devices Ten keys to digital home development There are 10 factors that will ensure the successful development of the digital home. IPTV boxes and more. device makers are working to provide consumers with two types of user experience: a multimedia one with video. The digital home: era of the Internet-ready device . by region 97 100% 80% Latin America 60% Asia/Pacific Europe 40% North America 20% 0% 2011 2012 2013 2014 2015 Source: IDATE www.Explosion of multimedia mobile devices Breakdown of connected device sales worldwide. by type of device 2011 735 million units 6% 6% 6% TV sets STB Digital Media Boxes Computers 58% Portable Media Devices 24% 63% 2015 1 605 million units 10% 6% TV sets STB Digital Media Boxes Computers Portable Media Devices 9% 12% Source: IDATE in “World television market” Asia/Pacific increasing its market share Breakdown of connected device sales worldwide.

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5 The new fundamentals of the content industry 100 DigiWorld 2012 Consumer services and content .

the content industry is steadily becoming a wholesale industry targeting a set of third-party distributors. The change is a more recent one for TV programmes. and increasingly so with television. with distribution windows that set the sequence for showing a film or programme. Disintegration of traditional functions The various segments of the content industry find themselves at different stages of this disintegration of ties between the production of content and its distribution. on DVD and on television. Microsoft Xbox) or offering a combination of a physical and a digital rental service (Netflix). The problem is a familiar one for TV and cinema. records. 101 www. bundling services with a device (Apple. producers and publishers still need to review their business models. and so breaking the link between TV production and classic TV broadcasting networks. who are suffering especially from a lack of a broad sales area. and one that is steadily making its way into the music industry. The newcomers triggered a profound change in revenue models by introducing ad-based funding for content. albeit with their particular editorial bent. wire services could expand their role of producing a single piece of content that is then picked up by the various media. copyright offered a legal security blanket when distributing content over various channels. This principle is commonplace in the world of film production. Copyright (ever more) crucial In the old economy. In TV and cinema production in particular. As a result. In the digital world. but new online video sites are putting a great deal of emphasis on TV series. video games. Here. creating copyright and optimising distribution channels has become a business in itself for producers and publishers. The economics of content are thus hard to apply to news: while other segments produce a unique piece of content. So digital actually opens up new windows for them: principally in catch-up TV. Netflix. This initial phase quickly ushered in new distributors who gained a foothold through various avenues such as technological innovation in the case of Amazon. and it appears that brick-and-mortar retailers. The first phase in the shift to electronic distribution involved a transposition of traditional models: from the sale of CDs to the sale of MP3 files. PPV and subscription VoD. Meanwhile. Depending on the country. news and gaming sectors.A wholesale industry In the old media economy. the higher the price for distributing it. from renting DVDs to renting films in VoD. Amazon and Steam are. Attaching value to a piece of content lies chiefly in the ability to set a price according to the customer and the sales window. availability in public libraries and later the release of the paperback edition. based on the idea that the more recent it Introduction .idate. In the world of book publishing. DVDs and such like. the core business of producers and publishers alike was to sell cultural goods: books. the traditional sequence is of hardcover release. these windows may be set by regulation or governed by contractual relations. Regardless of how successful the distribution schemes being tested by iTunes. are the big losers in the electronic switchover. The news industry is a segment unto itself. while it is only just emerging in the book publishing. they severed the ties between the production of content and its ultimate consumption. These new retailers now dominate online content distribution. Such windows exist in a more informal fashion in other segments of the content industry as well. newspapers actually produce very similar information. The production of news and its distribution by newspapers and magazines are still largely intertwined. Films have traditionally been designed to be shown on various media: in theatres. from marketing games on cartridge or disc to selling their downloadable versions. a distinction needs to be made between films and television programmes. More fundamentally still. and by promoting unlimited consumption plans.

it is true. Multilingualism and the Digital Single Market” – Communication & Strategies No. The main arguments for this approach include the ability to limit piracy of works. financing and distribution. they will be unable to turn out enough product to amortise their distribution apparatus. though. Similarly. such as Studio Canal and Europa Corp. For further reading. 102 DigiWorld 2012 Consumer services and content 1. This lack of critical mass becomes all the more troublesome as the digital revolution creates a more complex system of distribution windows. Some have suggested replacing this approach of different price tiers for different windows to having all content made available on all distribution channels and in all markets at the same time. catch-up TV and VoD. The growing number of distribution channels. all the major publishing houses are made up of a variety of smaller imprints. They are. generating and optimising distribution rights. Does a single company need to assume all of these functions? In the American movie industry. coming up against regulatory architecture that places the producer at the centre of the entire system. A few film industry players in Europe. 82 – Q2 2011 Gilles FONTAINE . the main publishers rely on a stable of development studios to design and produce the games. to which publishers have responded by creating collections of low-priced games. in fact. control over production. New media economics The new media distribution models are fairly well documented: producers having to choose between live TV. the role assigned to TV and film producers in Europe seems to be a special case. and financing and distribution on the other. one of the key research themes selected by the DigiWorld Institute being launched by IDATE. are working to promote a model that involves a separation between pre-production and production on the one side. they are having to wear a great many hats without necessarily having the required expertise or the financial chops to do so successfully: without the needed capital. increasingly. The reality is that it has yet to be proven that the additional income generated by this approach would offset the revenue lost on adapting the price of content to each market and each distribution window. Here. What is a producer? Creating and managing copyright requires a raft of talents: creativity. In the gaming industry. This is. too: record companies farm out production to the labels which. and of the role that classic distribution has in creating copyright1. compilation albums offer the music industry a window to capitalise on old material. should give rights holders an incentive to be systematic in their approach to distribution windows. music services switching from ad-funded to subscription-based models. studios essentially play two roles: financing films and managing their distribution rights. Being in charge of production. pre-financing and the ability to optimise distribution windows. using different pricing models. Here. Similarly. and the impact of eBook readers on the book distribution channel. ongoing discussions inside the European Commission over facilitating a Europe-wide digital copyright scheme appear to have a poor understanding of the particular economics of content. To some extent. this model is found in the music industry. see Olivier BOMSEL. The creation and production of TV programmes are largely the dominion of independent production companies. What remains to be examined are the new economics of content production within an industry whose core business is. “Do You Speak European? Media Economics. are often their subsidiaries but which have a relatively wide berth on the creative front. and the need to expand the marketplace for European content to help amortise production costs. a window has opened up for the sale of used games.5 over in the gaming sector.

org .idate.103 www.

They also need to curry the favour of rights holders who may be tempted to target viewers directly and do away with the middlemen. breadth and depth of choice. which is two minutes more than in 2009 – even in developed countries that are already home to heavy TV viewers. we are seeing a tremendous rise in the time-shifted viewing of these same programmes. There is also the increase in time-shifted viewing and in the use of digital video recorders – by now a common feature in pay-TV set-top boxes – along with the growing numbers of followers of catch-up TV … despite steady viewing figures Live TV viewing nevertheless continues to increase – with a global average of 3 hours and ten minutes a day in 2010. and by developing their own on-demand services. They will have contend with aggressive tactics from consumer electronics manufacturers and Internet companies seeking to move their way up the value chain by acquiring the rights to content.5.2% increase over 2010. which will therefore boost audience figures for both at once. This marks a 12. their financing and even their programming. with users in the United States engaging in this type of viewing for an average 10 hours and 46 minutes a month. Consumer services and content Managing the switch to multiscreen and multitasking There are two other major trends at work: the use of displays other than the TV set – starting with desktop and laptop computers. combining quality. > Contact: f. the United States and France said they used catchup TV services and watched time-shifted programming. At the same time. and so directly to their ad revenue. design. are affecting TV channel viewership. At the start of 2011. Key among them is the audience fragmentation – in itself not a new phenomenon – caused by the rapid development of multi-channel offers on both free-to-air and pay-TV services. usually TV and the Web.leborgne@idate. Otherwise Apple. are gradually becoming the weak link in the chain. users need simple and customised tools that allow them to have full control over their viewing experience. and later 3D. • offer a better user experience: in an increasingly complex environment. namely TV channels and pay-TV providers. Around 40% of smartphone and tablet owners in the United States say they use their device while watching television. TV channels need to reclaim their leadership by providing viewers with the finest possible service. recommendations and safety. both technical and in viewer behaviour. This presents TV broadcasters with the following ‘mustdo’ tasks: • guarantee a quality of service that the Internet cannot: this includes guaranteed bitrates and the ability to deliver high-definition programming. and their popularity with viewers. • make the job easier for end-users by guiding them through a universe where the amount of content to choose from is growing virtually exponentially. the TV networks. around one third of people in Britain. Increased pressure on viewership… Several factors are converging to create an added threat to TV channel audiences. both in terms of viewer numbers and individual viewing time. multimedia players and tablets – and multitasking. This is best summarised as the simultaneous 104 DigiWorld 2012 Growth of the installed base of connected TV sets Source: IDATE in “Connected TV markets” Million units North America USA Europe (27) France Germany Italy Spain United Kingdom World 2011 25 22 22 3 6 3 1 3 69 2012 41 37 45 7 11 6 2 5 136 2013 60 54 76 11 16 10 3 7 223 2014 78 70 113 16 21 15 4 8 323 2015 95 85 157 20 25 18 5 8 435 . innovation. channels are having to reinvent themselves Yesterday’s core television industry players.1 Future challenges for TV networks Is channel-less TV inevitable? The tides of change. consumption of several media. To stay in the game. Samsung and Google could well become the television stars of the future. but also portable devices such as smartphones.

taking in to the Web” www.OTT threatening managed services Growth of the global video market. by distribution mode Billion € 450 400 350 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Mobile OTT Managed Source IDATE in “Future TV 2020.idate. taking in to the Web” Source: The challenge for ad departments & brokers Breakdown forecast for video ad revenue in France in 2020 Billion € 5 105 Productors 2.5 Distributors TV networks 0 Core scenario TV networks lose control of advanced services Distributors earn a fraction of live TV advertising revenue Source: Source IDATE in “Future TV Future challenges for TV networks .

Online video is driving the connected TV momentum in the US TV programme suppliers are especially proactive in the United States.1. Here. Roku and Boxee. Only those companies that offer a combination of device and services have made their way across the Atlantic. NBC. • the need for other players. ZDF and ARD (RTL being conspicuously absent) are available on at least two connected TV platforms. as with Samsung Apps. > Contact: j. In France. In Europe. especially in countries such as France where they have to compete with managed IPTV and digital cable. The connected VoD market is being sustained by the sector’s heavyweights and Internet veterans. which is due out in early 2012.5. NBA and NHL. and to a larger number of connected television platforms since TV manufacturers are having to compete with independent set-top box/DVR makers such as TiVo. They have a jump on Europe thanks to a selection of online content that was already more vast. RAI and RTVE) stands out for its virtual absence from the Consumer services and content European connected TV services offer very little catch-up On the whole in Europe. VOD and local Internet services are few and far between. particularly in the realm of sport with such renowned players as ESPN. Fox and dozens of thematic channels and rights holders. • the crucial need for the platforms to be standardised to enable the development of applications. are having in becoming full-fledged providers of connected TV solutions. and by the quality of their interface. will provide a good metric of the potential for multiple platform deployments. In all three countries. all of which makes it easier for viewers to embrace the service. all of them proprietary thus far. the public service (France Televisions. HbbTV is competing with YouView in the UK and MHP in Italy. notably Google and Yahoo!. more than with content which is rarely exclusive. This situation warrants these observations about prevailing features: • the difficulty that Internet companies. catch-up TV is made available chiefly through connected TV solutions through a central platform. either by launching their own service. 106 DigiWorld 2012 Evolution of the global market for OTT video on TV Million € USA Europe Rest of the World World 2010 7 1 1 9 2011 61 21 7 89 2012 279 131 49 459 2013 492 255 107 853 2014 745 449 206 1 400 2015 1 233 753 411 2 397 Source: IDATE . and especially the makers of Internet-ready set-top boxes to differentiate themselves through the high-end features outfitting their media centres. which handles the online distribution of programming from ABC. Added to this. or by developing an online store. and the richest selection of OTT services. Hulu Plus. the success of the BBC iPlayer has stirred the market. Fox Sports.2 Connected TV & OTT content United States still has an edge over Europe The United States is home to the widest selection of over-the-top (OTT) content for the connected television. A market spurred by television manufacturers It has been TV suppliers that have rolled out the most connected TV solutions. Netflix and Amazon.bajon@idate. Germany stands out with a wealth of catch-up TV offers. Over in the UK. the leading terrestrial channels have a spotty record when it comes to connected TV. national services featuring catch-up TV. Italy and Spain. given that all the top TV manufacturers have developed their own proprietary solution. as Sony has done with Qriocity/Video Unlimited. meanwhile. namely Apple TV/iTunes and Sony (Qriocity/ Video Unlimited). but the future success or failure of the YouView standard. The services run by ProSiebenSat. • the temptation for TV manufacturers to try to capture the revenue generated by OTT service aggregation and distribution.

in “World connected TV market” Connected TV & OTT content .org LG Apps TV Source: IDATE.Professional video sites attractive to viewers Most popular video sites and programmes watched online 80% 70% 60% Short clips 50% 40% 30% 20% 10% 0% Base: Broadband Internet users Catch-up TV Streaming platforms Premium VOD Live streaming Source: IDATE survey 2010 (USA. UK and France) Today’s connected TV market run by manufacturers Positioning of 10 key players in the connected TV distribution chain Content production Services packaging Delivery Platform Connected Devices 107 www.idate.

7 36. and by the development of two-way solutions from cable and IPTV providers.0 7. Consumer services and content More and more hybrid broadcasting solutions After the first IPTV providers had shown the way. if not a fully-fledged platform. at least a partner for new-generation and on-demand video services.3 The DTT comeback The rise of hybrid solutions Until now.0 8. Mobile operator Bouygues Telecom has already begun doing so in France.9 11. digital terrestrial television (DTT) is back in the news. All the same. Certain recent events may nevertheless put DTT back at the heart of things.2 0.3 9.6 1.7 12.6 10. This development could also generate positive externalities for general-interest TV channels.2 19.0 67. and which currently employs MHEG-5 IC.1 1. usually for free.5.5 Source: IDATE in “World television market” .8 3.1 22. which is due to occur in a great many countries.4 2012 14.5 10.3 10.0 14. signs are emerging of the combined distribution of DTT and IPTV.6 10.9 42. MHP is driving the development of hybrid television. starting with satellite pay-TV. This would provide a solution to the main weakness of broadcasting networks.2 95.2 16. It will in fact play a central role in optimising the use of scarce spectrum resources.3 1. Today.1 2011 14. allowing them to overcome the obstacle of one-way distribution to become. uncertainty reigns in Europe as several standards are developing at once: HbbTV (a in France and Germany).9 11. the market will not develop without harmonised standards for hybrid solutions. giving them the opportunity to take back control of the content being broadcast and enhance the selection without the need of intermediaries.2 53.0 9.4 186. A more specific advantage for the terrestrial networks is that virtually all connected televisions have a DTT tuner. Are connected devices the way back in for DTT operators? The next stage in the development of digital terrestrial TV’s could lie in making the network bidirectional.8 44.8 10.3 2.6 8. while over in Norway and Italy.4 The second wave of analogue switch-offs. having decided to put an end to its managed IPTV service and to focus instead on 108 DigiWorld 2012 Growth of DTT households Million households North America Europe France Germany Italy Spain United Kingdom Asia/Pacific China Japan Latin America Africa/Middle East World 2009 12.5 1.6 9. which makes it possible to: • target secondary televisions in the home.8 9. It will also be interesting to see how much room is given to high definition services. the digitisation of TV services has penalised terrestrial broadcasting whose revenue has been threatened by the fact that it costs as much to deliver one analogue TV channel as a multiplex of digital channels.7 24. while Telecom Italia is taking things one step further with its Cubovision service. We expect to see new TV multiplexes that will help enhance the selection of programming available to viewers.0 56.7 10.5 50. marketing a hybrid solution that combines Internet and OTT video with DTT channels.3 9.0 11. This will make it possible to expand the coverage of triple play services to include live broadcasting offerings.6 9.5 0.3 11. scheduled for 2011-2012 in Europe Thanks to the switchover from analogue to digital TV broadcasting.4 2. • deliver hybrid DTT + Internet solutions that do no require users to subscribe to a pay-TV service (whether bundled or not).2 54. > Contact: j. relying on connected solutions to supply Internet connectivity.7 19.7 2010 13.6 0.2 11.4 10. its market share is being affected by the development of other forms of reception.0 17. the YouView standard which is expected for 2012 in the UK.1 0.3 62.1 2015 18.3 76.8 10.3 126. Furthermore. enabled by hybrid set-top boxes.3 48. notably LTE.9 8.bajon@idate.9 11.5 153.3 13. Added to this is the digital dividend: it will enable mobile network operators to ‘recoup’ what are known as the golden frequencies to launch new services.

implications of Connected TV” The DTT comeback .2012: the end of analogue broadcasting in Europe Planned analogue switchoff dates 2006 2007 Netherlands Finland Sweden Switzerland Germany Denmark Norway Belgium Spain Austria. Russia Turkey June November April October November December July 2012 2008 2009 2013 2014 2015 2018 2010 June End Source: IDATE in “Economics of the digital transition” Increasingly hybrid TV distribution services Percentage of households with an OTT-compatible system (digital cable.idate. UK Greece Bulgaria. France Portugal Hungary. Latvia Estonia Croatia Luxembourg December September October January November October December March April June July October December 2011 Slovenia Czech Republic. Italy. 50% 40% 2010 30% 2015 20% 10% 0% France Germany Italy Spain UK USA Source: IDATE in “Hybrid TV outlook. Lithuania. IPTV) IP enabled networks 60% 109 www. Ireland. Slovakia Poland Iceland Ukraine Romania Belarus.

The fact that Hollywood movies are such popular fare in the export market means that a blockbuster can earn more in foreign box office receipts than in domestic sales.000 to 400. handle both production and distribution. they are unable to invest in several projects at once – which would allow them to pool their risks – nor to invest enough in scripts.5 to 2 million tickets in those same theatres. along with the steadily growing number of 3D films in cinemas. The top network channels have been gradually pulling films from their roster.5. but do not have the same budget as the major networks when acquiring the rights to films. this lack of exposure is due to the fragmented state of the European cinema industry. Theatrical release is a much larger part of a film’s financial equation in the United States than it is for European films. and probably around 50% for French films. Free specialty channels have picked up the slack to some degree. Although growing quickly. compared to a third for British films.fontaine@idate. • The physical video market is in steady decline. and particularly the spread of pay-TV. 400 in the UK and 200 in Germany. while an American film will sell around 1. A more recent development has been the stagnation and even decline in subscriptions to cinema channels. at least in prime time.4 Economics of the cinema: the great shake-up What will replace the DVD? Film revenue under threat The three pillars of the film industry economy are in crisis. are also small companies. This is due to the growing ubiquity of multiplexes and their additional services. and replacing them with TV programming – generally sitcoms and dramas. European films are generally exported to only a few markets outside their own. > Contact: g. Operating on very small budgets. as more and more content comes available online – which goes to confirm that TV channels may well have a much smaller hand in financing films in Consumer services and content Hollywood cinema more diversified The American film industry naturally benefits from the development of television at home and around the globe. and which appear to only converge when it comes to American film. Fourteen of the 20 largest European distributors are subsidiaries of American firms which. • The role that TV channels play in distributing films is being called into question. The steady rise in ticket prices is nevertheless enabling a slight increase in box office takings.000 tickets in European cinemas. at least in developed countries – although they do still have considerable room to grow in developing countries. in most cases. • Box office receipts are stagnating. There are some 600 film production companies in France. which means that a European film needs a different distributor to handle each national release. if not in volume at least in terms of revenue. which are responsible for financing prints of a film and for marketing campaigns. or in splashy international marketing campaigns. Very few European distributors operate in several markets. for instance. as DVD sellers continue to cut their prices in a bid to sustain their market. A fragmented film industry In addition to national tastes that differ a great deal. European films generally sell around 300. 110 DigiWorld 2012 European Union box office figures Millions France Germany Italy Spain United Kingdom EU27 2004 196 157 116 144 171 1 013 2005 176 127 106 128 165 899 2006 189 137 106 122 157 932 2007 178 125 116 117 162 920 2008 190 129 112 108 164 925 2009 201 146 111 110 173 980 2010 (prov) 207 127 123 97 169 961 Source: EOA . We nevertheless estimate that revenue from TV channels accounts for 20% to 25% of an American film’s total income. VoD is not offsetting the shrinking sales of DVDs. European film distributors.

org Economics of the cinema: the great shake-up .Fewer people going to the movies Evolution of box office sales in a selection of countries Index 100 : 2004 100 95 Germany Spain France 90 85 UK 80 Italy USA 75 Japan 70 2004 2005 2006 2007 2008 2009 Source: Observatoire Européen de l’Audiovisuel Theatrical release only a fraction of a film’s earnings Breakdown of box office receipts in the UK in 2009 14% 26% 111 Free channels Pay TV DVD VOD Cinemas Box office 16% 3% 41% Source: UK Films Council www.idate.

0 56. 41. subscriptions. IDATE also predicts that the affiliation between smartphones and tablets via app stores and in their complementary usage is such that. Web browsing. half of the income of the video game sector – in all. and so keeping up with gamer expectations.0 2015 22.6 5. all platforms combined.michaud@idate. are helping revive the gaming experience and gameplay. from the gaming house of Zynga. Revenue generated worldwide by digital sales for handheld consoles could climb from 195 million EUR in 2011 to 522 million EUR in 2012.9 1. Gaikai and G Cluster. boasts up to 90 million. in “World video game market” . commissions on exchange operations and virtual real estate deals. This included the sale of virtual goods. and are developing a particular taste for the ephemeral and for short games. and this will give a real boost to digital distribution on these devices. Facebook.1 1. Video games will prove their ability to gain a foothold on these new devices that make use of their Internet connection in the same way that IPTV does today.2 1.7 3.3 16.3 2. video. smartphones.9 2.5 2. Convergence between smartphones and handheld consoles is now a reality Consumer services and content Mobile phone manufacturers have been successful in transforming their handsets into game consoles. Cityville. IDATE estimates that.0 1. the connected TV will make home consoles obsolete. Despite this. Playcast Media.9 1.5.2 4. the more interaction between them develops. The social network has introduced a new paradigm based on the way these sites are used: gamers have broader interests than on specialty sites. the greater will be their combined growth.3 2012 15. At the end of 2011.9 3. The audience for a game can skyrocket in no time and experience huge fluctuations. > Contact: l.3 4. tablets.9 16.7 1.5 55. A host of companies are working to deploy cloud gaming platforms that target computers.3 1.1 22. and spikes over a lifecycle that rarely exceeds 24 months. Although this concerns all devices.7 2. 73% of the sector’s revenue will be generated through a digital channel.2 4.9 2. the latest gaming platform! The social networking site and its partners have managed to create a solid match between gaming content and audience. the impact of digital sales is coming more slowly to the home console segment. This will induce a tremendous influx of innovation further down the chain. of which the most proactive include Onlive.2 1.3 53.4 1.3 1.8 2.8 2. connected TVs and set-top boxes. Tablet gaming: expected to take off in 2011-2012 The popularity of gaming is also giving the tablet market a boost.2 53. typically featuring music. the Playstation Vita. and more and more games are being downloaded for tablets.2 2011 16. e-commerce and TV.7 2.4 16.5 Video games powered by innovation Digital distribution and online gaming: potential confirmed All gaming platforms now have digital capabilities At the end of 2011.3 1.2 1. A good audience for a social game is measured in the tens of millions of active players per month.3 1.9 2.8 29.1 20.5 3.8 16.0 1.0 17. Emergence of games on connected TV and cloud gaming The next challenge on the horizon for the gaming industry is the connected television.1 billion EUR – came from the digital distribution of games and online gaming.1 2010 16.9 Source: IDATE.0 16. at the end of 2015.2 1. consoles are providing access to an increasingly broad array of content that is more likely to interest other members of the family. Sony Computer Entertainment released a WiFi and a 3G version of its latest handheld console. By using the cloud to stream games in the home. 112 DigiWorld 2012 Global video game market (hardware and software) Billion € North America Europe France Germany Italy Spain United Kingdom Asia/Pacific Latin America Africa/Middle East World 2009 17. These devices have filled a gap in home devices and in gaming practices. Their particular features such as the large touchscreen display and inclinometer. while console-makers are now able to equip their devices with calling features.3 78.3 4.5 16.2 1.2 2.7 2.

in “World video game market” Online gaming outperforming other platforms Online gaming revenue by platform Billion € 50 113 www. 2011-2015 Billion € 80 70 60 50 40 30 20 10 0 2011 2012 2013 2014 2015 Mobile Game Market Online Computer Software Market Offline Computer Software Market Handheld Console Software Market Handheld Console Hardware Market Home Console Software Market Home Console Hardware Market Source: 40 30 Online 20 Mobile Home console Handheld console 10 0 2011 2012 2013 2014 2015 Source: IDATE.Solid growth outlook Growth of the global video game market.idate. in “World video game market” Video games powered by innovation .

8 0.6 7.5 2012 10.4 0. at least in Europe. These offers are delivered through a hybrid DTT-broadband access set-top box that makes it possible to combine a package of live TV channels and OTT.4 42. Examples include Verizon which was bundling its top-tier access service with its most expensive pay-TV package.4 9.6 1.2 1. more generally.6 2015 13. such as Telstra has done in Australia.6 56.2 0.1 0.5 2.2 23.2 11.fontaine@idate.2 0.1 8.8 2010 6.4 45.6 33.8 16.2 0.9 0. a single triple play or a range of bundles while all bundling policies deliver the same advantages. 114 DigiWorld 2012 IPTV households worldwide Million households North America Europe France Germany Italy Spain United Kingdom Asia/Pacific Latin America Africa/Middle East World 2009 5.5.0 0. these are products being offered in saturated broadband markets and aimed at a segment of the clientele overlooked by heavy traffic and all-inclusive bundles.7 0. the first approach involves incorporating the top Internet destinations into a package of services managed by the telco.2 1.7 0. In both instances.1 12. The British pay-TV provider Sky provides a good example of how enhancing a service will give a considerable boost to revenue.4 1. including the inability to access the premium channels of top pay-TV companies. Over in Germany. by building a video solution that is only available online. cable companies. have also combined a pay-TV offering with their access Consumer services and content Enhancing media services The content services being delivered by telcos are getting mixed reviews. By developing high-end set-top boxes that are billed on top of the price of a basic package. in other words the ability to access programming on several TVs in the home. Deutsche Telekom is marketing a TV and telephony bundle without Internet access. but they do run the risk of being cut out of the loop by video services available on the open Web.1 0.5 2.2 0. At the same time. unappealing subscription VoD services.7 1. These bundling practices have taken on a variety of formats: video options.1 0. for instance. it banks on consumer appetite for multifunctional devices. on-demand services.6 Bundles loosening the strings Sell content or sell a service? More flexible bundles Telecom carriers have systematically sought to bundle a video service with their Internet access solutions. The third. In addition.9 1. Video without IPTV? Telcos have become content distributors. finally.9 0.4 2.5 Source: IDATE in “World television market” .3 95.2 2011 8. telcos are also paving the way to more appealing pay-TV products.1 25.8 0. free catchup TV services. albeit with mixed success in Europe. as well as relying on existing services – possibly the ones that enjoy strong brand equity. but now allows customers to combine a high-end access product with a basic TV package. This approach helps to diversify telcos’ spending on content. Some nevertheless view over-the-top content as an opportunity. The second involves distributing these packages on the Web.9 0. by targeting the connected TV market. it alleviates traffic congestion on the bandwidth allocated to IPTV and. called Entertain Pur.8 0.0 6.8 1. > Contact: g.7 3.1 8. and especially the release of a high-definition DVR with a hard drive. Some changes in bundling practices have been seen in recent months.1 22. more radical approach views the Web as an alternative to IPTV: • an alternative in that small portion of the country where it is too expensive to offer IPTV (as with Telecom Italia and Vodafone in Spain).2 35. The business model is based on the sale or rental of the box.1 16. • or. namely offering users a simple one-stop solution. plus a commission on the video services being distributed. at least those that have begun digitising their networks.5 19. The recent uptick in its ARPU can be attributed to the introduction of two new options: multiroom. increasing per-customer revenue and decreasing churn rates.8 3.9 0. very low profits for VoD services.4 4. To tap into this opportunity.

org 30% TV channel operation Transport & distribution Programmes 60% 10% Source: IDATE Bundles loosening the strings .idate.Distributors’ weight in the equation Breakdown of pay-TV resources in France Billion € 6 4 2 0 2005 2006 2007 2008 2009 2010 Distributor Editor Producer Source: IDATE Free-to-air TV’s reliance on advertising Breakdown of an ad-funded TV channel’s resources. in 2011 115 www.

which makes content available to any device. such as music and print media. Amazon has been the most The e-book market Million € North America USA Canada EU-5 Germany France Italy Spain United Kingdom Japan Total 2009 331 315 15 56 17 19 2 9 10 494 881 2010 794 769 25 105 24 25 9 13 33 558 1 457 2011 1 211 1 170 41 400 72 84 28 122 94 627 2 238 2012 1 585 1 512 73 674 149 151 59 159 156 708 2 967 2015 2 259 2 093 166 1 472 389 282 218 269 314 1 718 5 449 Source: IDATE in “E-books. The cloud model. Meanwhile. games and applications.K. with expected growth rates of more than 60% in Europe for the years ahead. Japan). to subscription formulas and even ad-funded rentals. we even find telcos operating retail platforms. These three digital titans are going head-to-head with national retail chains such as Barnes & Noble and Fnac. The business model is based chiefly on sponsored links. are also able to sell their eBooks directly. Disney or Lonely Planet. Similarly. Apple has incorporated eBooks into its content strategy through iTunes and the App Store.7 EBooks A new chapter for this thriving marketsor A market ready for take-off The electronic book market is gathering a real momentum. shrinking by 1% to 5% depending on the country – with only Germany reporting growth. and now accounts for 4. publishers with strong brand recognition. as is the norm with printed books. Coming at it from a different angle. the price of an eBook. markets & forecasts” .5. > Contact: s. or close to 10% of total book sales. A decisive element in the market’s Consumer services and content 116 DigiWorld 2012 Disparate competition landscape The electronic book market is also a new battlefield for the Internet giants. such as Harlequin. This leadership is due to the array of titles on offer. however. be enough to offset the publishing industry’s overall decline. is also being pushed by Amazon. although Google also operates a paid service. a large selection of digital titles and especially very aggressive pricing – in some instances selling at a loss. Englishspeaking countries dominate the market. Relatively little value destruction between now and 2015 The printed book is suffering from a recession in most parts of the world. There are some changes occurring along the digital value chain. pure players like Kobo and a variety of niche players. with its 3G-compatible Kindle. and especially to the paperback release.lubrano@idate. with a market totalling more than 600 million EUR in 2011 and a particularly strong readership on mobile phones. Plus the advent of digital is opening up new opportunities for publishing: decreased production costs for publishers. and driven by the ability of digital distribution to cut out the middleman: the author of Harry Potter. is also being adjusted according to its printed version. Meanwhile. along with the ability to create new formats such as enhanced books that incorporate video. such as heavyweights like Amazon. This destruction of value is nevertheless relatively meagre when compared to other content industries. for instance. Google has been involved in digitising the world’s library for years now and had digitised more than 15 million works by 2011. but is having to contend with opposition from publishers wanting to reduce the commissions they pay the platform. and especially the United States where eBook sales exceeded 1 billion EUR in 2011.5% of book sales in developed countries (North America. This tremendous rate of progress will not. access to social networking sites. with the centre of gravity shifting towards retailers. the electronic book market is powering forward. plans to distribute her books directly in digital format on a dedicated site. aggressive thus far. J. On the other end of the value chain. with losses of around 4% expected between 2010 and 2015. Japan also has a solid edge. EU-5. Upcoming adjustments in the digital ecosystem Pricing models are starting to change from per-book purchases. most of which are in the public domain. Apple and Google. Rowling. the lack of regulation which allows for low prices and the widespread adoption of e-readers and tablets.

markets & forecasts” EBooks .idate. markets & forecasts” Digitisation creating new opportunities for the sector The e-book value chain 117 Author Publisher Conversion house Aggregator & digital warehouse Retailer Communication network Device Reader Author Link also present in the print value chain New link of the ebook value chain Network Optional link of the ebook value chain New forms of intermediation Device Source: IDATE in “E-books.Rising e-book sales not offsetting the decline of print Evolution of the book market (North America. Japan) Billion € 60 50 40 30 Digital Paper 10 20 0 2008 2009 2010 2011 2012 2013 2014 2015 Source: IDATE in “E-books. EU-5.

Apple had a 66.6 2007 6.3 0.1 4. Online music shops are the emerging model. which appears to be the one that has adjusted best to the consequences of a digitised music market.3 1. combined with a number of local giants. Digital music sales are on the rise.6 1. or a decrease of close to 26% in five years and a 40% drop over the past ten years.5 0. ahead of Amazon (13. it benefits from the economies of scale generated by the global rights to its artists’ works.2 1. Chains such as Wal-Mart are steadily losing their share of record sales. to 10% in 2009 and 5% in 2010 – confirms that digital music will not offset losses in physical sales. Subscription services. Their waning growth – dropping from 29% in 2008.8 21.9 billion USD in 2010. The American market. on the other hand. are both suffering from overhead costs that are much too high for their level of business and given the instability of their shareholders.8 Music industry being retuned Is subscription the right model? Digital growth: the beat goes slower Record company music sales continue to decline. on the other hand. and brick and mortar shops have been unable to carve themselves a place in the digital market.2% share of music sales in the United States.7 1. which is as big a market as recorded music.1 1. and to promotional services and merchandising – the aim being to capitalise on its investments in its artists through a variety of channels.4 118 DigiWorld 2012 Recorded music sales in a selection of countries (record companies) Billion $ USA France Germany Italy Spain United Kingdom China Japan World 2006 6.9 Source: IFPI . are still only fledgling: Spotify was reporting just one million paid subscribers in March 2011.6 0.1 4.5. a Vivendi subsidiary. where music has been selling online for the longest.9 1. New models emerging Ringtones have become an only marginal segment of digital music.5 0.6 0.3 1. Consumer services and content Brick and mortar retailers: the big losers in the digital revolution Retailers are the biggest losers in the traditional music value chain.8 18.1 4.5 0. having skidded down from 21.3 1. The company has also taken a proactive approach to the concert business. and sites are sharing ad revenue with record companies.4 2010 4. 7% in Germany and the UK and 17% in France – thanks especially to an Orange broadband bundle that includes a subscription to Deezer. accounting for 5% of digital revenue in the United States. are starting to generate a significant income.4 0.0 15. Majors adapting to the new world Of the four largest record labels in the world.9 1. and have been replaced by song and album sales which generate 78% of recorded music revenue.4 0. but it does not add up to much. The world’s largest. the Universal policy is geared to getting users to adopt a paid model.1 1. While Sony Music has managed to maintain an even keel.5 0. Warner and EMI.1 4.4 1.4 2009 4.8 0.2 0. the two other major labels.8 20.3 17.3%). and now account for 29% of all revenue generated by recorded music. it is Universal Music Group.6 0.2 1.1 1. but growth there slowed to a mere 1% in 2010.4 0. Paid online services.1 2008 5.2 0.1 4.michaud@idate.2 0. digital sales account for 50% of recorded music sales. Sceptical about its advertising revenue being able to finance online music sites. > Contact: l.3 billion USD in 2006 to 15. In the third quarter of 2010. accounting for 7% of revenue in the United States.2 0.

Digital music generates around 30% of revenue Breakdown of recorded music revenue (record companies) 2006 2010 10% 3% 5% 29% Physical Digital Performance rights Physical Digital Performance rights 66% 87% Source: IFPI Digital growth is slowing Digital music sales in Europe Million € 1000 250% 119 800 200% 600 150% 400 100% 200 50% 0 2004 2005 2006 2007 2008 2009 2010 0% Digital revenues Annual growth rate Source: IFPI Music industry being retuned .

2 34.7 2010 17.8 2012 18. The audience is broken down equally between listening to FM and AM stations on the Web and listening 120 DigiWorld 2012 Spending on radio advertising Source: Zenith Optimedia Billion $ (current prices) North America Western Europe Asia/Pacific Rest of the World World 2009 17. Although Pandora generates a solid amount of traffic. The Internet is also increasing radio listening in the workplace. The Pandora model An IPO in 2011 based on a valorisation of 2.fontaine@idate. As such. listeners can also skip over a song.3 5. Unlike online music services. the company is enjoying a swift increase in ad revenue: reporting a turnover of close to 140 million USD for the fiscal year ending in January 2011. Time-shifted listening in the form of podcasts is also becoming increasingly popular: according to that same survey. A sizeable portion of listening (25%) is done in the car. The downturn in 2008-2009 resulted in a 14% decrease in ad revenue.1 5.8 32. Although currently in the red.8 5. nevertheless.5 35.9 4. the company is not planning on introducing paid services. followed by a slight recovery in 2010-2011.8 3.5. but numbers are growing Growing array of devices Radio is the ubiquitous medium.0 4.7 4.4%) due largely to language-related factors. a quarter of consumers in the US are podcast listeners. and radio is contributing to the gradual incorporation of online services into vehicles.8 6. > Contact: g.9 Radio What’s the best way to tune in to the Web? Dependence on ad revenue Unlike television and print media.9% in 2000. with the notable exception of Spain (9.8% of ad revenue) since advertising markets are local. it is especially vulnerable to changes in the economic climate.4 5. a percentage that has been shrinking steadily – down from 8. Relatively few people use their mobile phone to listen to the radio today.6 billion USD brought the Pandora model to many people’s attention. There are.1% of global ad revenue in 2010. it still cuts into Pandora’s profit levels. It is estimated that any household listens to the radio on six or seven different devices. compared to Western Europe where it earns only a 5. which is a good thing since subscription radio has consistently failed to catch on. adding to the time spent listening on a good old wireless receiver. Regular online listeners spend close to 10 hours a week tuned into the radio.0 32. of which 86% is ad revenue.2 . Radio was earning 7. Consumer services and content Internet radio becoming a commonplace A survey conducted by Arbitron and Edison Research in the United States in 2011 reveals that 34% of consumers had listened to Internet radio in the past month. virtually all radio industry income comes from advertising. Around half of the company’s income is paid out in royalties and.5 6.0 2011 17. sizeable disparities in different regions. although this percentage is decreasing. rather than just a series of tracks. Although convergent with online music services such as Spotify and Deezer.6% share of ad monies.6 31.1 6. with radio occupying a more significant place in North America (10. the viability of its business model still remains to be proven.1 4. or around half the amount of listening time reported by the traditional radio audience.6 3.1 2013 19. available on an impressive range of devices. Pandora has maintained its radio roots and offers listeners a selection of customisable radio stations. Pandora’s strength lies in the accuracy of its customisation algorithm which is based on analysing listener tastes.2 5. Unlike classical radio stations.4 4. to Internet-only stations.

0% 8.5% 6.0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Zenith Optimedia The medium of mobile use Breakdown of radio listening in France in 2009 4% 121 www.0% 7.5% 8.0% 6.5% 9.5% 26% At home At work In-car Other 50% 20% Source: Médiamétrie Radio .Radio losing popularity Radio’s share of global ad spending 9.idate.

This is a booming profession. such as the Monroe Observer – as well as niche magazines are opting to forego their print versions entirely and go fully online. Others. are quickly moving over to the Web which offers much more refined search and location-based features. and up to around 50% in 2010 (source: DGMIC/Xerfi). become their core online business model. the 23% decrease in advertising income that newspapers and magazines suffered over the course of those two years was not followed by a recovery. and print media has to compete not only with other mass media.1% in 2010. to bring back the paywall. Balancing act between print and digital A still very small number of newspapers – and notably local papers in the United States. despite the occasional spikes when a major news story hits. Other outlets are trying. as is already the case with Reuters or. before investing in low-cost video such as with Reuters mobile journalism. are planning on doing so. on the other.5. are working to achieve a balance between breaking news which is posted to the Web. newspapers can either become a portal. and even certain wire agencies which are addressing themselves directly to users. In the UK. Furthermore. such as the Aurora Sentinel. the Internet has gone from having a less than 1% share of the classified ad market in 2000 to 17% in 2005. Even though traffic on newspaper Websites is rising. The third biggest source of income for newspapers. the decline in circulation is impacting advertising revenue – it took a hit during the financial meltdown in 2008-2009. namely TV and radio. incorporating content from other sites and videos which help increase the time users spend on a site. as with AFP. have elected to put out only a single weekly issue. Over in the United States. The critical path here involves starting out with user-created content which is free. Unlike other media. North Africa and the Middle East. however. The industry took more painful blows with further losses in 2010 and 2011. Some outlets are opting to create a series of specialty sites. Magazines are also feeling the 122 DigiWorld 2012 Ad spending on print media Source: Zenith Optimedia Billion $ North America Western Europe Asia/Pacific Rest of the World World 2009 54 41 30 18 143 2010 51 41 30 18 140 2011 48 41 30 19 138 2012 45 41 31 20 137 2013 43 41 31 21 136 . for print media. News is both abundant and free on the Web. along with citizen journalist sites such as Politico and the Huffington Post (recently taken over by AOL). the ad revenue they are earning is not offsetting the revenue lost from their print versions. it is dropping by 4% to 5% a year.10 Print media and the Web Economic and structural crises Print media not bouncing backe Circulation figures for newspapers and magazines continue to shrink. classified ads. Added to this is the fact that the Web is evolving quickly from a text-based to a video-based medium: this is penalising newspapers in terms of the time spent on their site. To turn the tide. > Contact: g. circulation for the top 12 papers shrank by 23% between 2005 and 2010.fontaine@idate. either on a set of devices or only for mobile phones and tablets – even though we have yet to see any solid proof that users are willing to pay for general news. for instance. In addition to lost revenue from single issue sales and subscriptions. The decreased ad spending on print media is affecting all major world regions. embracing both general interest aggregators such as Yahoo! and more specialised ones. but also giant aggregators. however. on the one hand to attract targeted advertising and. All. with the exception of Latin America. and their share of online newshounds is tending to shrink. for the mobile version of their publications. print media are finding themselves in a power struggle with app stores that want to earn a commission on every sale. once again. with subscriptions for the top 100 British publications down by 4. and more in-depth analysis which is reserved for their print editions. In France. to flesh out the news with services that will. Consumer services and content The weight of print media weight on the Internet Print media was the first content industry to be slammed by the Internet juggernaut. All this has made for tough times for print media.

Decreasing circulation of print media Circulation of the top 12 newspapers in the UK Million units 14 13 12 11 10 9 8 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Revenue under pressure Comparison on print media revenue structure in France Billion € 12 123 10 8 Announcements 6 Advertising Sales by subscription 4 Sales per copy 2 0 2000 2010 Source: DGMIC Print media and the Web Source: Audit Bureau of Circulation .

124 The new markets of the Internet DigiWorld 2012 .

org .idate.VI The new markets of the Internet 125 www.

126 The new markets of the Internet DigiWorld 2012 6 Internet services: data ad infinitum .

Amazon. medical or location). image recognition and analytics solutions that deliver streamlined analysis of how services perform. A virtually infinite range of possibilities is opened up by the Internet of things (IoT) in terms of generating data. Such an approach requires sophisticated infrastructure. Introduction . The first involves developing an online service that allows them to amass a host of personal data through their interaction with users. which naturally creates a barrier to entry and means that it is really only available to a handful of heavyweights such as Google and Amazon. online players can create innovative services based on a combination of data. Service providers can collect information not from users but rather from other service providers that have their own database. The availability of large quantities of non-personal data allows companies to create new generation services and to improve existing ones. By making use of big data technologies. and probably Facebook in the not too distant future.The stunning development of online services. Other key developments around the Web also help improve existing services. Microsoft.). Google+…). with applications and status information. Meanwhile. The second option also makes it possible to collect an array of data beyond the personal information supplied by users. Structured 127 www. sometimes only just staying within the bounds of copyright laws – through crawling or via requests. This approach has become increasingly prevalent with the development of social networking sites where users leave a great deal of information (including interaction with friends on their walls. and which represents more than 90% of the Internet.idate. Yahoo! and Twitter) revolve around four main data-centric operations whose development taps into the inner reaches of the Web. first on computers and now on a wide range of devices. in terms. especially around the invisible Web which is a goldmine of untapped information (often accessibly only by filling out forms). and taking advantage of cloud architectures and data mining solutions. Facebook. either directly or via a smartphone. environment. tablets. the mere accumulation of raw data. for instance. The core stakes in the battles between the Internet giants (primarily Google. some players are building massive databases by collecting information – more or less legally. can be revisited and analysed through the prism of data. both on phones and dedicated devices connected to the Web. as much through the profiles that users complete themselves as the use of cookies that track their digital footsteps. even if it is taking shape very gradually. both personal and not. both personal and not. due to a lack of a proper large-scale business model. This is driving players such as Google to launch their own solutions based on personal data (Gmail. They can go about this in several ways. The process of gathering information will also increase in line with the development of sensors (for movement. consoles and connected TVs) is also creating new opportunities to collect data and accelerate the shift to storing data and personal content in the cloud. The growing traffic on new devices (principally today’s smartphones. Such is the case with search engines. Several approaches enable interaction between service providers. of advertising. automated translation. D is for… declarations and discovery For any Internet company. using solutions of the likes of Dropbox and iCloud. is not an end unto itself. Internet players swap data when developing a service – such as identification through a third-party system like Facebook Connect – but can also be collected freely and easily from various parties – notably public agencies that make their data available through open data schemes – using API. A … is for analysis and automation Of course. the first step is to collect as much data as possible.

Google is outperforming Facebook by a solid margin. and from page to page within a site. Internet companies are also innovating in the realm of statistical tools and original payment solutions. Most have their own advertising department/brokerage that targets the various formats and key devices. such as Google Checkout and. they are operating platforms built around their services and/or devices. as their analysis allows for increasingly streamlined user targeting. and so providing ‘natural’ and intuitive interfaces. which in turn generate data that help further improve their targeting capabilities. Facebook Credits which guarantee them relatively juicy commissions on digital goods sales with a 70-30 split. which are probably just as important as the services themselves when it comes to monetisation. in other words of friends’ activities and centres of interest. circumventing the main platforms. including the mergers and acquisitions in recent years around DoubleClick. even if other forms of indirect value-creation also exist. We have seen a slew of takeovers in this arena. to take back control of customers’ data – which the platform often owns only thanks 128 DigiWorld 2012 The new markets of the Internet . in particular by aggregating third-parties’ data. These platforms provide easy access to a multitude of applications. The Internet giants are also developing their own payment systems. enables more streamlined recommendations – here again improving the efficiency of the services rendered – as well as social advertising. despite lighter usage.6 data and semantic Web technologies enable services that are based on better filtering of (manually or automated) tagged information and on mapping the meaning of the exchanges of information. The role that these platforms play has become crucial. With or without the social graph. and makes use of leading-edge analytical tools. A … is for aggregation and app store To achieve maximum monetisation. such as customer service. The ability to transform traffic into revenue will also be improved by accurate targeting of the user who is being tracked more and more as she travels from site to site. This not only gives them guaranteed access to a huge amount of data. such as France Telecom has done. personal data are naturally treated separately. and especially personal data. more recently. such as Apple does with its smartphones and Facebook on social networking sites. deploying one platform on another (Amazon app store on Android). or the deal between Nokia and Microsoft). but also restricts their competitors’ access to that information. All of these new technologies supply increasingly automated data processing. Here. Apple’s App Store generates more revenue for developers. AdMob and Quattro Wireless. To maximise the revenue earned on monetised data. which allows Internet players to target not only a huge number of users but also partners and advertisers. This monetisation of online services and their data is achieved primarily through advertising and commissions on the sale of digital and physical content and services. Cookies are used to track user digital footprints. the Internet’s titans have developed –either on their own or through acquisitions – tools that allow them to monitor their financial streams. is to transform traffic into revenue. By the same token. To this end. Analysis of the social graph. T … is for transformation and tracking The goal of collecting and analysing all of this data. deploying a dedicated platform (the Zynga Project Z). but there are other solutions that are helping with behavioural targeting and retargeting. even though Android is the most widely used OS. such as in-app and subscription systems. triggering a variety of initiatives from Internet companies: expanding their platform via partnerships (as with GoogleTV. all in real time. Internet companies are working to monitor a maximum amount of data directly.

org Introduction . in all four. even better. aggregation. Groupon and soon Facebook). both personal and not. Users are increasingly aware and conscious of the risks surrounding use of their data (as with identity theft or targeting by advertisers) without it necessarily altering their behaviour. This in turn enables the emergence of newcomers benefiting from an influx of capital. Any more for any more? The innumerable possibilities opened up by the collection. especially from the stock market with the return of huge IPOs (LinkedIn. At a time when data management policies are continually evolving – with recent examples that include the changes Google made earlier this year and the Facebook configuration systems – regulations for governing data (imposed both by NRAs and users themselves) will naturally become a major issue. are dramatically reducing time-to-market for new its CRM. lie in the realm of protecting copyright. which are rooted in the lives of increasingly hyper-connected users. and so allowing third parties like Facebook to forge themselves a stronghold without having their own OS or browser. the only real limits to all these developments. analysis and monetisation of data. which limits how much information can be exchanged with developers – and minimising the amount of revenue they share. on a multitude of devices. which ultimately benefits users.idate. Zynga. The development of HTML5 has the potential to undermine the dominance enjoyed by platforms by springing open certain technological locks. Aside from the eternal question of security. Vincent BONNEAU 129 www. The real Internet leaders are those who are capable of excelling in at least one of the four arenas of data exploitation described here or. privacy and personal data – the latter being in a state of constant flux.

with advertisers increasingly demanding performance-based rates and heavily favouring sponsored links – as a result of which there is a clear rise in performance-based display ads (billed in CPC).3 Source: IDATE in “World Internet services markets” 2010 15. which are Apple and Facebook strongholds.7 billion EUR in 2015 – or close to one third of the online advertising market.9 3.8 4.0 60.4 3. Mobile traffic is set to explode. an accelerated change was seen in how money was being spent on online advertising. mobile advertising will join video in helping spur the display market. which is only slightly less that Yahoo! whose ad revenue has been plummeting. or almost 27 billion EUR in 2011.4 1.8 0. The new markets of the Internet Still a concentrated market.7 95. those who now dominate these segments – primarily Facebook. such as overlay.4 5.7 8. but will help sustain solid growth over the long term.8 4. and social graph targeting.1 20.9 6. and this despite the tough times expected this year.3 0.0 2.2 2015 30. YouTube.0 2. but a few major newcomers on the scene Online advertising is a very concentrated market in terms of its purveyors. Growing at an average annual rate of 15.9 billion EUR in 2011. These segments will be key to enabling the market to weather the recession expected in 2012. and was generated chiefly by traditional formats carried over to these new services.5 5.9 1. still only generate a marginal portion of income.7 2. Thanks to the success of mobile.6.9 2.7 2.4 12.6 0. location-based ads. Spurred by the financial climate. Facebook and Microsoft have joined forces to better compete with Google. including new innovative formats and video ads. Monetising new key Web applications (mobile.7 0.5 . The development of in-video ads.6 13.7 3.6 13. the global online advertising market is forecast to stand at 96 billion EUR in 2015.0 10. even in 2012. namely mobile. Facebook is still a relatively small player in the market. growth is expected to pick up considerably in the coming years. Dailymotion. Hulu. Formats specific to these applications. and especially pre-roll ones as advertisers transfer their monies from old to new media.4 9.8 3. despite a downturn in 2012 The bulk of online advertising revenue around the globe – estimated at more than 53 billion EUR in 2011 – is divvied up between sponsored links and display ads.7 53. video.3 0.7 2011 18. and especially the credit crunch in 2009.2 130 DigiWorld 2012 The online advertising market Billion € North America EU-27 USA France Germany Italy Spain United Kingdom Asia/Pacific China Japan World 2009 13. which only served to consolidate the market oligopoly. social networking) The main branches of the Web today. will also help drive a solid increase in the online ad market.0 3. earning just over 3 billion EUR last year.1 Online advertising Recovery and strong long-term outlook.9 3. video and social networking. have not yet translated into a significant increase in ad revenue for these areas. Mobile boasts the most promising long-term outlook Earning its ad revenue more from display than from search.4 1. especially the social networking sites which made headlines throughout 2011 and will continue to do so this year with their IPOs.8% between 2011 and 2015. Although small when compared to the traffic they generate.4 44. in many instances due to massive inventory that is hard to monetise through classic ad formats. > Contact: v.1 23. the ad revenue earned by these three major segments nevertheless totalled 9.1 2012 20. The hegemony of Google is being progressively challenged by the burgeoning influence of mobile and social networking. Google singlehandedly accounts for close to half of all online ad revenue.bonneau@idate. Mobile advertising will also benefit from an influx in spending from local advertisers thanks to location-based solutions.9 38. with revenue forecast to total more than 29. All the same.2 1. Of all the new markets. while other markets are gradually setting their sights on such paid solutions as VoD and virtual money to generate additional revenue streams. Microsoft and Yahoo!. but it will come up against limitations set by user demands for privacy.7 0.9 1. social networking.6 0.9 2.0 3.7 4.1 12. mobile has the strongest long-term growth prospects – and will take over from today’s juggernaut. Apple and catch-up TV services – are enjoying considerable success.5 11.8 9.0 2.9 5.

Video and mobile halt the decline of display ads Below/above the line breakdown for online advertising 2011 10% 6% 2015 34% Other Display Search marketing Other Display Search marketing 36% 56% 57% Source: IDATE in “World Internet services markets” New key advertising markets Breakdown of ad revenue on new platforms 27% 33% 131 Mobile 14% 25% Video Social networks 27% 37% 43% 44% EU 2011 EU 2015 18% 29% Source: IDATE in “World Internet services markets” USA 2011 53% USA 2015 48% Online advertising .

such as Amazon (distributing eBooks) and VUDU (distributing online video) are also taking a similar route.7% by 2015.5% of mobile handset shipments worldwide in 2011. platforms provide an alternative to native OS control. IDATE identifies three main types of platform providers. unhappy with the strict controls placed by Apple. HTML5 allows such players as Facebook to provide an alternative to the current dominant OS platform model. such as Facebook and Amazon. In fact. The Facebook mobile platform is based on HTML5.8 billion EUR by 2015. The platform providers are fighting to become the dominant platform provider. In fact.nakajima@idate. for example with Google aiming to gain more user data to supplement their advertising revenue. Content is not exclusive to a given platform. OS-centric (such as Google and Microsoft/Nokia partnership). for example the Financial 2010 1 145 907 133 162 112 67 199 4 167 610 2 635 7 542 2011 1 780 1 352 189 238 160 96 295 5 316 879 3 219 10 431 2012 2 938 2 263 315 392 257 161 479 7 619 1 483 4 447 16 040 2015 6 988 6 629 966 1 215 681 493 1 177 16 087 3 993 8 178 38 219 From the battle of the OS to a broader battle between platforms What was once referred to as the OS battle is now all but over. has now created their own Web app for the iPhone. migration to HTML5 is already happening for non-graphic intensive services already. and thus the same content can be offered for the same price and the same experience on varying platforms. The battle of platforms is truly underway. and is forecast to rise to 27. and are encouraging users “to switch immediately” to the new Financial Times Web app. and expected to reach 10. However. Finally. representing approximately 1. some of the big name games developers such as Electronic Arts and Zynga already provide apps via this route. The interests of OS-centric platforms lie outside the device. are also presently shaping up in a battle to become the dominant platform which links the user and the content. and content-centric (such as Facebook.4 billion EUR by 2015. Thus all of the players are indeed competing.4 billion users. > Contact: s.1 billion EUR for 2011. but often for different interests.7 billion users by 2015. currently unavailable to pure HTML5 apps.6. The ultimate goal for device-centric platforms is to sell their devices. resulting in over 2 billion subscribers. as does the Facebook application itself. All of this is an attempt to aggregate user data. to be able to control the flow of user data and the revenue that will comes with it. However. device-centric (such as Apple and RIM). This also has the advantage that the app can benefit from native phone capabilities such as the camera and push messaging. or a 33% mobile Internet penetration. other players who do not have their own OS. The two main sources of revenue for mobile Internet services are mobile apps and mobile advertising. a figure that is expected to more than double to 51. HTML5 is currently a work-in-progress rather than a complete solution. and IDATE expects this to have risen to 2. The latter is estimated at 3. The former represented 7. Impact of HTML5 on the platform battle IDATE believes that HTML5 is a potential game changer for the mobile Internet market. in order to monetise and enhance their business. HTML5 cannot cope with the graphic intensiveness of advanced games and thus a hybrid solution is likely to remain strong for the time being. Other players. With HTML5 closing the gap on native capabilities. and Microsoft aiming to supplement their Office licensing business by extending their reach into mobile.3 billion EUR as of year-end 2011.2 Mobile Internet Is the mobile Internet recession-proof? Mobile Internet penetration stood at over 23% worldwide at the end of 2011. Since it is HTML5-based. developers do not have to create separate applications for each native OS. with HTML5 a potential game changer. content-centric 132 DigiWorld 2012 The new markets of the Internet The mobile Internet services market Million € North America Europe-27 USA France Germany Italy Spain United Kingdom Asia/Pacific China Japan World 2009 706 617 94 113 83 45 138 3 229 413 2 111 5 405 Source: IDATE in “Apps and the mobile Internet” . Spurring this growth is the rise of smartphones which accounted for 26. with Apple and Google having emerged victorious. In particular. Amazon and the WAC initiative). and then tweaked to comply with each native OS). and then optimised for native apps (a hybrid solution where the bulk of the app is written in HTML5. considering that the most popular genre for mobile apps is games. more similar cases are likely to follow. guiding users to their own platform leveraging their already established brand and services.

Europe lagging behind Mobile Internet penetration % of population using mobile Internet 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2009 2010 2011 2012 2013 2014 2015 USA Europe-27 Asia/Pacific Japan Source: IDATE in “Apps and the mobile Internet” Do you need to control the device to control the platform? USA Europe-27 Asia/Pacific Japan The top three mobile platform models 133 Device-centric platform OS-centric platform Content-centric platform iCloud by Apple Nokia OVI Store Windows market place Amazon appstore available on Android Source: IDATE in “Apps and the mobile Internet” Mobile Internet .

In this way. virtual worlds tend to be carefully targeted in terms of age group. Whilst such gaming apps are virtually always free to play. together with the social features on iGoogle.4% 2012 1 333 65. Google announced on their official blog that Buzz and Jaiku will be discontinued. since the core service of social relations remains the same. Facebook announced that it will make Facebook Credits mandatory for all games (though not exclusive). it was an invite-only service but it opened publicly in September 2011. can be included in the wider definition of social networks. Orkut in India and Brazil and Renren in China.4 million visitors. with the aim of focusing solely on Google+. the majority of which target teens and under (Second Life being the notable exception).9% 2010 953 59. it has the potential to spread to other digital or even physical 134 DigiWorld 2012 The social networking population Social networkers (million users) % among Internet users 2009 670 48. Facebook Credits. open platform.7% 2011 1 173 63. They also launched a virtual world. both in the virtual and real world. there were over 1 billion social networkers as of end-2011. through its virtual currency. with the rule going into effect on 1 July 2011. pets and furniture). clothes. through the use of their own virtual currency on their Google attempting to challenge the dominance of Facebook Google launched their new social networking service. Whilst this is limited to games at present.7% 2015 1 734 70. Facebook then receives a 30% commission on all purchases made with Facebook Credits. In return. Brands and media can also create their own space within a virtual world.nakajima@idate. it is in fact the sale of virtual goods that take the lion’s share of revenues. Initially. Then. Google+. in January 2011. Hyves in the Netherlands. In the case of virtual worlds. Bebo in the UK. Facebook struck deals with several high profile games developers working on its platform (such as Zynga). it is not necessarily the leading social network in every country and faces challengers in specific countries such as Skyrock in France. Virtual worlds as part of the social networking value Virtual worlds. Facebook is by far the leading social networking service in the world. in June 2011.9% from 2011 to 2015. It should also be noted that whilst Facebook is the dominant force worldwide. Facebook has started to really exploit the revenue stream of paid services on social networks. to interact directly with their fans and to promote their products. the only difference being the representation of the user is in the form of an avatar. the majority of which are avatar customisation goods (such as face parts. According to our estimates. most notably with Google Buzz and the acquisition of Jaiku (a service comparable to Twitter). WeeWorld and Habbo. such as Second Life.6. levels. In October 2011. making social networking one of the most popular online activities. but nevertheless the growth is impressive with a 56% increase from the year before.3 Social networks A global phenomenon Social networking is today a global phenomenon. but it has become apparent that Facebook is aiming to explore the latter revenue source. Such virtual goods are often created by the users themselves and then traded within the virtual world. should Facebook decide to go down this route in the future. Mixi in Japan. making Facebook Credits the exclusive payment mechanism in their games. or made in collaboration with celebrities and brands. to give a CAGR of 10. During 2010. One senses that Google+ is Google’s biggest attempt yet to challenge the dominance of the social networking giant Facebook > Contact: s. The new markets of the Internet Facebook strengthening paid service revenue through virtual currency There are two main sources of revenue for social networks: advertising. Twitter comes in at a distant second with 144. characters or other facets. but ultimately with limited success. which equates to 63% of Internet users. For the majority of players advertising takes the lion’s share of revenues. they often offer in-app purchasing whereby users can buy extra weapons. Lively. and paid services. We expect growth in social networkers to continue.1% Source: IDATE . with more than 730 million visitors in June 2011. and it is still showing an impressive growth with an increase of 33% from the previous year. As such. in 2008 but that was shut down by the end of that year. Facebook can help developers meet their user growth targets. and interactions take place within a virtual world. Google has made several attempts to enter the social networking market in the past.

but not on native OS (iPhone.) Various Facebook account (email and password) Source: IDATE Social networks .org Open On PC and mobile web apps..Moving from advertising centric to more paid service based business models Ratio of social networking revenues for EU27: advertising vs paid services 2011 2015 38% Paid services Advertising revenues 62% 49% Paid services Advertising revenues 51% Source: IDATE in “World Internet services markets“ A new source of income for social networking sites Overview of Facebook Credits.idate.. the virtual currency micropayment system Micropayment system Device Interface Billing method Credit info compulsory Authentification 135 www.

the Open Knowledge Foundation in the UK and LiberTIC in France. and especially of open innovation.0 ethos of sharing and collaboration. The public sector is the most widely affected by this trend since it has considerable public data resources. smart cities and sustainable development. This could include the supply of detailed data on building insulation and energy consumption. Major Internet destinations. • opening up access to data can also help public and private entities to work together. • a new and enhanced cross-section approach to services. however. in other words collecting data thanks to a crowd of users. > Contact: s. Developers play a key role in these initiatives as they use the data to design innovative applications. The fact of making data freely available also creates opportunities for other types of player. .org The new markets of the Internet 136 DigiWorld 2012 Disparate business models The business model to apply is a relatively simple affair for private sector players: they can earn income directly on the sale of information. however. and some ‘open’ data may in fact be behind a paywall. and one which is becoming key as such a massive amount of data becomes available and is in need of cross-referencing. free access does not necessarily mean free of charge. Google. Open data also creates a number of market opportunities for the platform operators – Google is one such.4 Open data What’s the best business model? A growing trend in both the private and public sector Making data and applications openly available is one of the Web’s underlying trends. print media and weather. The development of open data has also been driven forward by several citizen-led initiatives. It is a more complex matter for the public sector. Open data initiatives can also help boost their sales. This open data movement has actually existed for some time in the private and semi-private sector to some degree in such forms as private and public transport. road and sewerage networks.6. including the Sunlight Foundation in the United States. These ‘open’ data can then be freely accessed and reused. Some initiatives are making use of crowdsourcing. In reality. such as mobility. and the natural progression of the Web 2. by reducing the cost of making information available to the public. Governments can generate savings directly with open data schemes. imbuing raw data with value added. or access to information.lubrano@idate. Open data involves making data that are produced. Amazon and Facebook. which theoretically belong to citizens. Platforms that provide access to data are another link in the value chain. water. namely software interfaces that allow third-party developers to link their applications to the company’s databases. which are vital to manufacturers working in the arena of renewable energy. They can generate income from the sale of these apps. releasing mortality rates by pathology for hospitals could result in increased efficiency. especially compared to print documents. • create competition between public entities by publishing performance indicators – for example. Google is the best example. and which had been previously kept for in-house use only. freely available on the Web. initiated the movement by making their databases available to the public. and possibly earn a share of ad revenue. offering up its mapping data through API. which would in turn improve the quality of public services and create incentives for citizens to become involved in public life. owned and collected by public or private undertakings. as Amazon has done by opening up its product lines to other Websites. doing away with the silo model and sharing common methods to design power. There are other indirect but equally important gains to be had: • supporting innovation in a number of areas that are due to make substantial progress in the medium term. although there may be some licensing terms that apply. as is the case with OpenStreet Map. having launched a service called Google Public Data Explorer.

org Local Regional National International 40 30 20 10 0 Source: IDATE Open data 13 8 .United States paving the way A selection of public open data initiatives in mid-2011 3 11 Australia Canada China France Germany New Zealand Norway 3 Russia Spain UK USA 13 8 2 3 2 42 16 1 Source: IDATE Rising tide of local initiative US Number of public open data initiatives around the world in June 2011. by administrative level 50 137 www.idate.

starting with profitability. allowing businesses to make use of data without having to invest in massive new systems. Once security and quality of service issues (amongst others) have been resolved. or computing veterans like IBM and Oracle/Sun. expenses. Over the next several years. August 2011 Million € North America Europe Asia/Pacific Latin America Africa/Midlle East World 2009 3 942 1 316 318 203 51 5 830 2010 4 889 1 697 455 238 65 7 344 2011 5 805 2 101 580 286 90 8 862 2012 6 774 2 516 736 328 106 10 460 2015 9 766 3 826 1 280 475 190 15 537 . most of the top cloud computing companies today are headquartered in the United States. Its adoption today is being driven chiefly by pragmatic considerations. > Contact: j.gaudemer@idate. more and more companies will adopt cloud computing. This is especially true for small and medium businesses. An enormous initial investment is required. Some telcos could take advantage of the current trend to expand into the supply of cloud-based solutions. is also helping bring down costs. It can be seen. making use of the IT resources of the different cloud systems available over the Web and internally. whether former start-ups like Salesforce. The principle of a multi-tenant architecture. particularly in data centres. involving a blend of the Internet and mainframe architectures. simplicity and giving end-users the ability to convert a portion of their capital expenditures into operating The SaaS cloud computing market Source: Gartner. for the cloud service. flexibility. efficiency and savings. A great many players vying for share of the market As in the software sector. as a new stage in the development of data centres. keeping in mind that cloud computing services rarely come with SLA (Service Level Agreements). A cloud computing solution can be private (on an company’s internal information system whose infrastructure it fully controls). a great many companies are concerned about protecting the security and confidentiality of their data. usually monthly. Some hurdles still have to be overcome.6. both in-house and over public systems. Because it is built on data centres deployed across the Web. The concept of ‘big data’. which will become a key part of the market. or put another way the challenges posed by the need to manage massive datasets. to some extent. These obstacles will need to be overcome for companies to embrace cloud computing without any qualms. one can expect to see a great many businesses and public authorities deploy a variety of cloud computing models. or of the Platform (PaaS) or of Software (SaaS). whereby several customers share a server or an application. but also in SaaS which is the biggest segment today. public (external resources supplied and operated by a third-party) or a combination of the 138 DigiWorld 2012 Growth enablers and obstacles There are several factors that are driving the growing demand for cloud solutions.5 Cloud computing The new way to deliver IT services The cloud computing concept Cloud computing enables the supply of upgradable and usually virtualised resources over the Internet. These resources are generally sold in the form of Infrastructure as a Service (IaaS). Lastly are concerns over quality of service. but it is expected to continue to prosper as it provides a response to businesses’ core needs in terms of cost optimisation. will have cloud computing at its core. Indeed. both of which make for more profitable and flexible operations. known as utility computing. the cloud computing model is a good fit with large telcos’ or Google. to be able to supply cloud solutions – which necessarily limits the number of players that can deliver them over the long term. The new markets of the Internet Sizeable spending over the next two years in both the private and public sector Cloud computing is a fast-growing means of delivering IT services. In addition. The concept of cloud computing can also refer to providing on-demand access to IT resources. they may well become major players in this market. as cloud computing allows them to replace their spending on software licences with a usage-based fee. These centres employ a variety of recent technologies such as virtualisation and green energy. not only in the IaaS segment.

2011 Profusion of cloud computing initiatives Cloud computing architectures SaaS Client Services Application Specific software client for delivery of cloud services (e.g. accessible through virtualization and/or parallel computing (e. Google Maps) Remote application.idate. Force. Google Apps. S3.SaaS: prime beneficiary of cloud computing Breakdown of cloud computing revenue in the EU-27 Billion € 12 10 8 6 4 2 0 2009 2010 2011 2012 2013 2014 2015 IaaS PaaS SaaS Source: Bearing PaaS Platform Application framework development (e.g. MapReduce.g. EC2) Source: IDATE Cloud computing . Microsoft's Azure.g. Skype…) 139 www. SaaS (…) IaaS Storage Infrastructure Databases and storage systems (e. Google Gears) Web services. Ruby on Rails. Django. BigTable…) Datacenters spread over the world. OpenID.g. from the provider or from a third party (e. SimpleDB. Salesforce.g.

following its takeover of Kobo – the Kindle’s Canadianborn rival. PriceMinister. Asian countries have been more successful in protecting their markets. and less than 1% of their sales are online. one year after having taken over the French company. +22% during that same period in France. Online shopping is still very much focused on a few products: travel. high-tech goods and clothing. and are market leaders across Europe despite the success of a handful of national players. Amazon is nevertheless by far the world’s largest online retailer. Asia will enjoy even higher rates of progress during that time (16% annually) as the region is being sustained by the growing adoption of e-commerce in China. Major retail sectors such as groceries and furniture are only just entering the digital fray. To this end.lubrano@idate. creating a page devoted to their brand which can also serve as an e-commerce platform. well as business-to-customer (B2C) sites like 360Buy are especially popular. as another form of recommendation. with over 34 EUR billion in sales in 2010 and unflagging growth in 2011 (+50% in Q2 2011 compared to Q2 2010).115 EUR in four years in France (Source: Fevad. This is true of China where local customer-to-customer (C2C) platforms such as Taobao as 140 DigiWorld 2012 > Contact: s. Rakuten is also going head to head with Amazon in the eReader market.6. between 2006 and 2010). including possibilities for targeted advertising based on users’ tastes or recommendations made on Facebook or Google Plus. first.7% at the end of 2011 in the United States and 4. Amazon is beta testing an Amazon-Facebook interface. by a rise in the number of online shoppers – who now account for 80% of Internet users in the US and in the UK – and. New opportunities created by social media Social networking sites are opening up new channels for online retailers. Rakuten has remained the leading online retailer and has begun to expand internationally through a number of takeovers. When users connect to Amazon through their Facebook page. All of the leading brands use social networking to complement their corporate sites. Average annual spending per online shopper rose from 660 EUR to 1. Over in Japan. including Buy. e-commerce only represents a tiny fraction of retail sales: in the United States. So Internet shopping still has tremendous room to grow. cultural goods (especially digital media files). American heavyweights Amazon and eBay have managed to establish an international footprint.1% in France in 2010. This rate of increase is being spurred. Still. and will continue to develop: IDATE is forecasting average annual growth rates of around 9% in Europe and 10% in the United States from 2011-2015. the recommendations they have made on Facebook). second. Play Holdings in the UK and Tradoria in Germany.6 E-commerce Growth opportunities E-commerce still has room to grow Online retail sales continue to enjoy double-digit growth in developed countries: +18% in the United States between 2010 and 2011. The new markets of the Internet The rise of international titans As far as the industry’s structure is concerned. by the fact that online shoppers are tending to spend Growth of gross income for e-commerce Billion € North America Europe Asia/Pacific Latin America Africa/Midlle East World 2009 191 165 124 12 1 492 2010 214 198 154 15 1 581 2011 253 232 191 23 1 700 2012 283 267 231 35 1 818 2015 367 358 360 88 2 1 175 Source: IDATE . the application displays their friends’ birthdays and suggests gifts based on their preferences (to be precise. Another part of the screen displays products that their Facebook friends have rated highly.

Online sales continue to make strides Growth of the online retail market in the United States Billion $ 1200 1000 800 600 Online 400 200 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 2010 2011 Physical Source: Census Bureau Top online shopping destinations: sales figures Billion € 50 141 2005 2006 2007 Amazon 2008 eBay 2009 Rakuten 2010 2011 40 30 20 10 0 Source: IDATE E-commerce Amazon keeps on growing .idate.

It could be a car. thanks in particular to the success of M2M consumer electronics (CE). the global cellular M2M market represented 90 million modules and revenue of 18 billion EUR – of which 4. a photocopier or an 142 DigiWorld 2012 Celular M2M modules worldwide Million units North America Europe Asia/Pacific World 2009 14 15 8 42 2010 23 22 12 65 2011 32 28 18 91 2012 38 34 23 110 2015 72 78 50 241 Source: IDATE in “M2M markets” . as M2M solutions have greater value-added if connected to existing systems. The Internet of things will not be a reality for some time to come. despite low per-customer revenue. including eCall regulation in Europe and largescale rollouts by utilities. most IoT solutions will be closed-loop B2B projects. most are now working to carve themselves a solid foothold in this market. This latter market is in fact being considered less attractive than it once was as financial opportunities are slim: most smart meters will be connected to the cellular network using a concentrator outfitted with a SIM card. the solutions have a long lifespan. As a result. creating a global market of 31.2 billion EUR in 2015 worldwide. While some telcos were reticent to enter this business directly a few years back. even if it does not contain the electronics needed to connect directly to the network. Access services alone are forecast to represent 8. In the medium term. > Contact: s. could connect to the Web to obtain information that would enhance its intrinsic value. outfitted with connectivity capabilities that allow it to communicate. then. They are trying to forge a distinctive position through technical initiatives (such as IPv6. but not a multipurpose device like tablet or a computer.3 billion EUR for connectivity.6.8 billion EUR and 250 million modules by that time. new prospects are being opened up by the Internet of things (IoT) wherein any item. especially in terms of units – while also masking some of the problems the traditional M2M market is facing. will likely take a step back as they wait to see how the global economic situation plays out in 2012. Some applications in these core vertical sectors will be burdened by ongoing delays in the short term. such as connected eReaders. Several M2M industry players The Internet of things is the next stage for M2M – but is still some years away Looking beyond classic M2M solutions. came on the market only a couple of years ago. as RFID technology needs to be widely deployed. The prospects offered by M2M are attractive in that. Telcos working to grab a share of the market Two thirds of the machine-to-machine market is composed of software and associated IT services. The annual growth rate between now and 2015 is expected to be 15% in terms of revenue and 30% in terms of volume. however. although Europe still has the lead in terms of market value.7 M2M and the Internet of things Very healthy growth for the M2M market Machine-to-Machine (M2M) refers to communications between machines – with machine referring here to a ‘smart’ object that operates independently and has only a single function. and 3 billion EUR in Europe. In 2010. the biggest rollouts involve veteran IT integrators using M2M building blocks provided by telecom carriers and module suppliers. little churn out and contracts involving several million SIM cards. The new markets of the Internet Vehicles. Since then.ropert@idate. along with NFC devices – these being the best options today for outfitting objects with virtual tags – and an entirely new infrastructure to fully manage the massive databases needed for open loop solutions. There are several obstacles that may well hamper the progress of vehicle and utility markets. CE and utilities will drive the M2M market Internet-ready consumer electronics products. their popularity has done much to spur the M2M market forward. the market grew by around 32% in terms of revenue and 56% in terms of volume. embedded and more robust SIM cards and Internet portals) and sales techniques like a one-stop international PoP for sales and rentals. North America overtook Europe in module numbers in 2010. The M2M market continues to grow steadily: in 2011.

Widespread growth World M2M markets by region Billion € 8 7 6 5 4 3 2 1 0 2009 2010 2011 2012 2013 2014 2015 Asia/Pacific North America Europe Source: IDATE in “M2M markets” Growing number of M2M applications M2M development by vertical industry 143 Consumer electronics Healthcare Utilities (Water and gas) Smart grid Indutrial equipment (machines monotoring and maintenance) Consumer electronics Home automation Environment Smart cities (Intelligent transport) Office equipment Auto insurance (PAYD) Health (advanced apps) Automotive (infotainment) Security Industrial (SCADA) Point-of-sale Transport (Fleet) Already in use Consumer electronics Tablets and dongles Utilities (energy) Automotive (TeleMatics) Current deployments Pilots and short term Mid-long term Source: IDATE in “M2M markets” M2M and the Internet of things .

The development outlook for smart cities in the coming years is considerable.6. across to new forms of consultation such as social ideation platforms. In promoting a new approach to ICT. It requires a complex value chain with a growing number of agents and shifting positions. the smart city works towards achieving unified. covering infrastructures and IT systems supporting applications and services. such as dynamic car-pooling. and provides a perfect response to this search for the unified and interoperable architecture so sought after. telecom equipment manufacturers.baudouin@idate. The data thus produced or captured at different levels within a city structure can be used by different applications. The ITU is in fact working on standards in this area. a host of start-ups positioned in mobile services proper to the city. augmented reality solutions for tourists. In addition to this role as producer of services. The smart city arises from two conclusions: the city is the dominant spatial structure – 80% of the population of Europe live in cities – and will have to rise to a number of challenges to ensure harmonious growth in the years ahead. sustainable development and improving quality of life. mobility. acting as a test bed for new solutions. social and human capital. along with the city’s own civil society and. but ICT is the common denominator The concept of the ‘smart city’ has been taking hold over the past several years as a vital future direction for world metropolises. and are disruptive factors in the way cities are organised. It is made up of a set of modules which are inherently bound up with economics. The Internet of things is becoming an increasingly vital component in current discussions by local authorities over the future of the smart city. this contributes to creating digital services with real value-added for end-users. the ‘city’ corpus itself – in other words the public institution that governs it. the city acts as a facilitator through a range of initiatives which can reach from making public data available. services and applications) need to keep pace with changes in organisational and operational systems to deliver a set of services efficiently and . its citizens. Then there is a packed raft of digital industry players that specialise in certain smart city functions. along with its various departments – has a central role in the way the ecosystem is organised. IT and network hardware suppliers. 144 DigiWorld 2012 > Contact : p. The new markets of the Internet Smart city cornerstones The digital aspect of the smart city starts with a generic. the conventional batch of wireline and wireless telcos. cohesive architecture made up of a set of building blocks (see diagram). and is expected to be a significant source of local value creation. City authorities are involved in developing digital services that ensure a better quality of life and a more efficient and effective system. The smart city goes beyond the realm of the digital city in that ICT developments (infrastructures. It is part of a ‘virtuous’ outlook for the city that embraces the imperatives of economic and social development. of course. interoperable systems. location-based sales and marketing solutions for mobile users. working in tandem with private sector players. the way they run and the way they are managed. A rich and complex ecosystem of players… A great many players are involved in the development of a smart city. or USN. ICT affect all urban functions today. It is hard to give a single definition for ‘smart city’ as the concept encompasses multiple facets. By breaking free of the silo approach. citizen involvement in governance. firstly. A number of municipalities are already involved in smart city initiatives in several ways including working on ones they instigated themselves. under the name of Ubiquitous Sensor Networks. or as partners for European R&D projects. through innovation in supporting living labs and ideas crowdsourcing. infrastructure managers and R&D labs. in achieving cohesion and in directly producing services for end-users. Among them are. … but where do public authorities fit in? Within this rich and complex ecosystem.8 Smart cities Multiple definitions. the environment and quality of life.

org Etc. in France Businesses Administrations Local chambers Museums Citizens R&D/Training hospitals Universities/ labs IBM Bull Associations Libraries Competitive cluster Google Thales Etc. 145 www. … Data centres Cloud-based systems Urban furniture Ultra high-speed fixed mobile networks Supply of high-speed wireline and wireless networks A network of data collection and delivery/display devices Harmonised and open data management A cohesive citizen-centric information system Source: IDATE Who makes the smart city run? Wide array of stakeholders.idate. M2M. Amazon Ericsson Véolia Lyonnaise des Eaux Orange PIN contractors GDF Municipal utilities Iliad SFR EDF Public housing Data centres Bouygues Telecom Etc. Tourist board Cisco Accenture Property developers Decaux Local authorities Alcatel Etc.The smart city: cohesive telecom and software architecture Smart city architecture Fields of application Smart city architecture Smart city governance Citizens services Business services Transportation services City services management Risk management services IS & citizen relations management API – Service platform – SaaS User-generated data Open databases Essential infrastructures Sensors and terminals – RFID/NFC. Altitude Local authorities Numericable Source: IDATE Smart cities .

146 DigiWorld chronicle DigiWorld 2012 . .DigiWorld chronicle 147 www.

which is the first in Asia to offer secure transactions from different back accounts. while China Unicom ups its ownership of Telefónica to 1. The deal is intended to allow Skype to strengthen its leadership in video communications by adding recording. • Amazon officially launches the portal for Android applications developers – waiving the $99 registration fee for the first comers – working to build up some stock for its future app store. • American telco Verizon – which already attracted attention back in September 2010 for its joint proposal with Google that included the recommendation that neutrality not apply to the mobile Internet – is going to court to contest the FCC’s right to impose its neutrality regulation on wireline and wireless networks. blogs. with an option to acquire the remaining 49% in seven years.January • French smartcard maker Gemalto is outsourcing the management of its 9. while the second was led by Goldman Sachs with investors from outside the United States. France Telecom-Orange has entered into exclusive talks with video site Dailymotion to acquire a 49% stake for 58. which had already sold off a portion of its 20% share. • After its partnership with Deezer. • A recent decision from Italy’s communications regulatory authorities to assimilate video sites with TV broadcasters gives the latter increased responsibility over the content made available online.8 million EUR. Gemalto was also selected by Japanese mobile operator Softbank for its new contactless mobile payment programme in Japan. • Telecom equipment manufacturer Motorola has now been split into two separate. • After getting the green light from American authorities. Vivendi.000 workstations to IT service company T-Systems. • British public broadcaster. and Motorola Solutions which is in charge of consumer and enterprise solutions. announced that it had raised 950 million USD from “several venture capital firms and late-stage investors”.7%. • American semiconductor manufacturer Intel unveils a new generation of microprocessors outfitted with a content protection mechanism. accusing it of infringing at least four of its video purchasing and distribution patents. and so allowing Deutsche Telekom to set its own prices. sharing and storage to its line-up. • After two years of talks with Apple. under a global contract covering 40 countries. • Apple launches an online app store for its Mac computers. • Amazon takes over LoveFilm. on social networking sites. Verizon announces the arrival of an iPhone compatible with its CDMA network. • The German regulator has said that it would not introduce ex ante regulation for the last mile of optical fibre networks. and asking for a ban on imports of TiVo digital video recorders. Comcast will initially have a 51% stake in the corporation.1 billion USD. Canada’s RIM shared the interception keys for consumer IM and e-mail services. • Microsoft has filed a complaint with the ITC (International Trade Commission) against TiVo. • Social networking titan Facebook confirms that it has raised 1.4%. 148 DigiWorld 2012 DigiWorld chronicle . but said that it could not do the same for its BlackBerry Enterprise Server secured enterprise messaging service. because of the nature of its encryption system. Called Sandy Bridge. Telefónica thereby increases its stake in China Unicom to 9. • The European Commission announced the launch of a formal enquiry into telecom carriers Telefónica and Portugal Telecom. • At the request of the Government of India. A first round of 500 million USD had been raised in December 2010 from several sources. and thereby strengthens its position in the smartphone and tablet component segment. • Telecom carriers Telefónica and China Unicom are consolidating their strategic alliance by each investing an additional 500 million USD in the other. will complete its divestiture to the tune of 5. which had turned down a 6 billion USD takeover bid from Google.5 billion USD. these chipsets will allow film studios to secure the movies sold in VoD and on DVDs against piracy and unlawful distribution on P2P networks. suspected of illegal non-compete arrangements. YouTube. • Skype will be taking over Qik. cable company Comcast will be taking control of NBC Universal – which is currently 80% owned by General Electric – for 30 billion USD. etc.8 billion USD. publicly-traded entities: Motorola Mobility which covers mobiles and set-top boxes. • Deal-of-the-day site Groupon. which puts the company’s worth at 50 billion USD. a service that allows users to produce videos on their mobiles then share them over a 3G or Wi-Fi network. announced a 25% cut in their Internet budget over two years – which will include shutting down 200 sites and cutting up to 360 jobs – as part of a massive austerity plan. a European streaming and DVD rental service of which it already owned 42%. • Smartphone chipset maker Qualcomm acquires wireless chipset specialist Atheros for 3. the BBC. similar to the one for iPhones.

Africa. has been available numbers spike then start to decline in some cases). Only the country’s top pay-TV provider. then. an abundance of channels like The switch-off of analogue cable. which already operates on analogue terrestrial. This channels to increase the appeal allowing for on-demand viewing. DTT could do well in Africa given the lack of cable networks and the high cost of satellite reception. and Telecom Italia Media.000 subscribers in September 2011.idate. company opted not to deploy its find several pay-TV offers on DTT. resulted in a first wave of failures of pay-TV services. decide between concentrating live channels. pay-TV on digital terrestrial is still very marginal. Run by AirPlus. shrink. DTT cannot offer pay-TV subscribers. or to of fi lms and TV programmes to distinguish themselves by count on a greater selection of supplied over a DVR. Canal+. two DTT pay-TV offers.000 subscribers at the start of 2011. along with GoTV. A in Sweden. has a substantial customer base. called an exception. Over in France. service in Ireland. a subsidiary of Multichoice which rolled out its pay-TV offer in Zambia and Uganda in August 5 4 3 2 1 0 2008 2009 2010 2011 2012 2013 2014 2015 Source : IDATE January Because of the scarcity of available Digital terrestrial TV in fact accounts for less than 1% of the world’s frequencies. Boxer TV when the pay-TV sector appears package of sports channels. Public authorities need to TV” was originally a package of owned by a rival service. only a since 2011. the rights to premium freed up in the process continues tailored response to DTT’s programmes. are competing for viewers. which appears to be to have hit its apex in developed similar push VoD service. satellite or ADSL systems broadcasting and the frequencies New paid services do offer a can. before moving into Kenya. which would make to bring up the question of digital particular position in the it possible to create a high-end terrestrial pay-TV services’ raison marketplace. saw its customer countries (and even started to . Filmmaster. and so allow them to VoD. DTT pay-TV subscribers around the world Million households 6 149 www. so much so that several providers have handed back their licences. then renamed “TV the DTT offering on free-to-air Favourites” and focused on push What operators in several countries channels. was upgrade to high definition.Dahlia TV pulls the plug Dahlia TV is a low-cost digital terrestrial (DTT) pay-TV service that was launched in Italy in March 2009. and so developing a low-cost offer. MinDigTV was reporting a mere 37. Over in Ghana. But at a time Completing the offer is a small in the UK and in Spain. creator of the Boxer DTT service in Sweden whose shareholders also include ad producer. In Hungary. Skyy and SmartTV. Plus. Britain’s “Top Up pay-TV offer.bajon@idate. are generally already d’être. And even though it had premium offer will have the been awarded a licence. Dahlia TV is a good example of the drive to develop the pay-TV market on DTT. Examples include Top TV in South Contact: j. The offer includes a selection have tried to do. the Outside of developed countries we power to attract viewers. which had 200.

Google provided proof – showing that Bing had copied its rival’s search results. Associated with Street View. After having tripled in 2010. has made a buyout offer for the Saudi Arabian subsidiary of Kuwaiti telecom giant Zain. • In a bid to hold its own against Apple and Google. has taken over French m-marketing agency Adenyo (ex-SBW Paris) for 100 million USD. • Michael Boukobza has applied for the fifth mobile licence in Israel. now living in Israel. • American firm Motricity. Kingdom Holding. data traffic on mobile networks now exceeds the volume of Internet traffic in 2000 by three times. the joint venture got the stamp of approval from the Banque de France in April and plans on launching its service in September. in exchange for a guaranteed quality of online distribution. and its impact over the long term could be greater still. • Saudi public holding company. secured online and m-payment system intended to provide an alternative to the PayPal. which specialises in integrated portal solutions for mobile operators.99 a year – and produced by a team of some 100 journalists. SFR. which will be sold solely via subscription – $0.000 partner sites. • Orange. for 97 million USD. Telenor. • According to a study from Cisco. it is expected to increase by an astounding 26 times by 2015. Google is now working to digitise fine arts museums with its Art Project. AOL also takes over Goviral. The former head of Iliad. • American satellite pay-TV provider EchoStar will be taking over Hughes Communications for 2 billion USD. to reach 6. plans on billing content providers according to the number of videos they make available online. the Huffington Post.99 a week or $39. the telco would be asking video and media sites to pay a fee. • Internet portal AOL acquires the most famous online publication. • French pay-TV leader Canal+ announces that it has stopped selling subscriptions in Algeria and Morocco where the company had introduced its flagship channel via satellite in 2009. this new service allows users to take a virtual tour of 17 of the planet’s finest museums. • UAE carrier Etisalat signs a contract with Alcatel-Lucent to install a national LTE network by the first quarter of 2012. Baptised Buyster.3 exabytes a month. half of which will be concentrated in Europe and in Asia. Google and Apple solutions in France. Windows Phone 7. • Apple and Rupert Murdoch launch the Daily for iPad. DigiWorld chronicle • Google accuses Microsoft of copying its search results for Bing. 150 DigiWorld 2012 . of an estimated 700 million USD.February • Norway’s incumbent carrier. announces an alliance with Microsoft for the supply of the operating system that will run its future smartphones. Finnish mobile manufacturer Nokia. which include expenditures estimated at more than 4 billion EUR. • After having targeted books. which had been pushing its own OS and especially Symbian. • The Egyptian government’s shut down of the Internet for five days is calculated to have cost the country 90 million USD. • Italian cable manufacturer Prysmian gets the green light from the European Commission for its takeover of Dutch competitor Draka for 870 million EUR. Bouygues Telecom and Atos create a joint venture for a single. has unveiled his ambitions for the Israeli cellular market. for 315 million USD in cash. Having to contend with an explosion in data traffic caused by the massive popularity of tablets and smartphones. • Verizon has announced that it reserves the right to throttle the bandwidth on any “unlimited data” plan customers who hog the network and cause congestion. of which at least 50% in cash. according to an initial estimate published by the OECD. a distributor of online video with 15.

fontaine@idate. So a pure player’s low-cost revenue that has yet to offset their model has its limitations: it is hard print edition’s dwindling revenue. Since pulling out of the access business. The Huffington Post became one of the top commentary sites in the United States and an emblem of the rising tide of pure players in the news market. El País in Spain. encouraging reader comments and discussions – and so helped usher in a new approach to news on the Web. First created as a blog in 2005. HuffPo may be caught in a tough spot in an intermediary segment being occupied increasingly by veteran print players and aggregators. the online Traditional media are beefing up press needs to break free of their presence on the Web. Traffic was down in the US in 2011 and the takeover does not appear to have done much to attract new ad revenue.AOL buys The Huffington Post In February 2011. A ranking of the top 15 news sites reveals the increasingly fierce competition coming from new entrants who have managed to secure 40% of traditional media traffic. Print the vicious cycle where a free media has clearly embraced the intermediary service being offered digital world and. which has also been focusing on content. i. and especially news. AOL has been repositioning itself as a content aggregator and publisher. to compete in terms of depth if it Contact: g. Going head to head with chief rival Yahoo!. AOL acquired news and commentary site. The Huffington Post for $315 million. content aggregators like Google and news agencies like Reuters are already offering comprehensive direct access to news to a sizeable portion of has no print version to amortise The world’s top news sites Unique Monthly Visitors 110 74 73 65 59 54 32 25 25 25 25 24 20 18 17 Classement 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Site Yahoo! News CNN msnbc Google News The New York Times The Huffington Post Fox News Digg The Washington Post The Times MailOnline Reuters ABC News USA Today BBC News 151 www. AOL needs to develop its original content production. celebrity commentators and build a community.idate. and Google which is still the biggest aggregator and not a producer of content. The Huffington Post was able to combine commentary on a small range of subjects. in early 2012. the dominant players to also deliver their goods model is still ad-funded free for free. But the start-up’s integration into AOL appears problematic. editorial investments.e. despite various by pure players is forcing veteran trials with paywalls. As a result. But. Source : eBizMBA. the reviews are mixed. through local branches in the US and plans to expand internationally – in every instance with a local partner: Le Monde in France. one year after having taken over The Huffington Post. and relying on advertising access. At the same time. AOL provided the site with a huge influx in capital to step up its More than anything. janvier 2012 February . print and television.

under a network sharing scheme similar to the one they already have in Poland. for an estimated 70 million USD. • Russian mobile telco MTS is launching an online app store offering a selection of 7. • France Telecom and Deutsche Telekom want to share their mobile networks in Romania and Austria. • Ofcom has asked for an 80% decrease in mobile termination rates. Germany’s incumbent carrier is also due to upgrade a substantial portion of its HSPA/ UMTS network to 21 Mbps.000 premises with FTTH in 10 cities over the course of 2011. • Taken over by Google in August 2010. 152 DigiWorld 2012 DigiWorld chronicle . • Seven operators. including ZTE. Java.March • Digital dividend frequency (800 MHz) auctions are underway in Sweden. • Warner will become the first Hollywood studio to distribute films through Facebook in the United States. starting in Germany. Huawei. are SmarTone-Vodafone and Hutchison Telephone Company who bid a combined total of 1. have signed a roaming agreement that will allow the future mobile network operator to use Orange’s 2G and 3G networks in France. the UK and the United States. The French incumbent will pay 245 million USD for 20% indirect ownership. the provider of virtual money and micro-payment solutions for online games and social networking sites. • The European Commission has ruled the emergency tax being levied on Hungary’s telecom sector to be incompatible with EU law. 200.03). is being tested in seven cities across the country by China Mobile and several equipment manufacturers. an Israeli mobile applications start-up. Jambool will be shutting down its Social Gold micro-payment solution to launch a similar product in May. and so beefing up the product line of its Swisscom Broadcast branch. Telcel. • Following a dispute between Mexico’s biggest mobile operator. NokiaSiemens and Ericsson. • French payment device maker Ingenico has been selected for a trial on contactless payment solutions being conducted by Google in the United States. this time carrying the Google brand. or OFTA. and which will allow them to save hundreds of millions of euros between now and 2015. • Skype has introduced advertising in the Windows version of its VoIP software for the first time.000 SIM cards will allow G4S to monitor and manage its meters. and wireline carrier. which British operators must have brought down to £0. the Mexican regulator has decided to reduce Telcel’s call termination rate from 95 to 39 MXN a minute ($0. the son-in-law of the fallen Tunisian President. means the State has confiscated his 51% share of the telco. • The two winners of auctions for 850 MHz and 900 MHz-band spectrum conducted by Hong Kong’s Office of the Telecommunications Authority. • AT&T announces plans to acquire T-Mobile USA from Deutsche Telekom for 39 billion USD. • Deutsche Telekom and Astra have joined forces to market a pay-TV service that combines satellite and DSL. • Norway’s Opera Software launches the Opera Mobile Store.95 billion HKD (around 200 million EUR) for their frequencies.69/minute by 2015. China plans on rolling out a 4G network nationwide in 2014. Each bidder is allowed to purchase a maximum of two of the six 2 x 5 MHz blocks of spectrum available. and increase coverage by 10% – up to a total 83% of the population. Deutsche Telekom has confirmed plans to pass 160. • After VDSL (10 million homes passed at the end of 2010). are candidates for the acquisition of Vodafone’s Polish subsidiary. whose worth has been estimated at around 5 billion EUR. • France Telecom-Orange and Kuwaiti firm Agility acquire a 44% stake in Iraqi mobile operator Korek Telecom. The company also has a partnership deal with Apple for a solution that transforms an iPhone into a universal payment terminal. • AT&T has decided to charge a premium to the 2% of its customers who exceed the monthly allowance of 150 GB. • Swisscom has taken over streaming TV and video firm Solutionpark. TD-LTE. • France and Spain will be brought up before the European Court of Justice over telecom taxes introduced in the two countries in 2009 to compensate for the end of advertising revenue on public TV channels – a move which could be incompatible with European law. The move involves the social networking site opening Facebook credits up to cultural products other than games.000 applications. • France Telecom and Iliad. most of which are free. Alestra. • The freeze on the assets belonging to the President of Orange Tunisie. including five private equity firms. parent company of Free. • The Chinese fourth generation mobile standard. an app store available in 200 countries and compatible with most of the main operating systems today – Android. • Facebook acquires Snaptu. Symbian and Windows Mobile – with the notable exception of iOS. • Telefónica O2 UK has been awarded a multi-millionpound contract to provide a bespoke remote network for gas and electricity supplier G4S Utility Services. Palm. • South African mobile operator MTN has launched a life assurance programme via mobile phone in Ghana which is aimed at the country’s poorest residents. BlackBerry.

under the careful eye of regulators1. leaves traffic management practices. multiunit buildings and small business users. Recommendation 4. have access to comprehensive. in coordination with the National Institute of Standards and Technology (NIST).6: The FCC should develop broadband performance standards for mobile services. and despite the stance taken in the Netherlands. we have the impression that consensus is building amongst national regulators and governments over the need to proceed cautiously with Net neutrality regulation. Contact: The National Broadband Plan Recommendation 4. Member States shall ensure that national regulatory authorities are able to set minimum quality of service requirements. It Over in the United States. form and manner of the information to be published… in order to ensure that end-users. playing out through disputes settled by NRAs or in court. such The main distinction from the as IPTV. Recommendation 4. Member States shall ensure that national regulatory authorities are… able to require undertakings… to publish comparable.3: The FCC. amended in Nov. federal regulator believes justifies lighter non-discrimination restrictions on access to services and applications. In order to prevent the degradation of service and the hindering or slowing down of traffic over networks. but in the FCC’s explicit recognition that it would need to be closely of the singular nature of the monitored. b) quality of while incorporating the core service. Despite opposition from Republicans. and the lawsuits filed by Verizon and MetroPCS. adequate and up to-date information for endusers on the quality of their services… 2. reliable and user-friendly information… 3. but also imposing an additional charge on consumers who use OTT applications such as those marketed by Skype.Net neutrality still sparking debate In June 2011. d) it up to each Member State to efficient and non-discriminatory decide on specific measures. Directive 2002/22/EC.5: The FCC should initiate a rulemaking proceeding by issuing a Notice of Proposed Rulemaking (NPRM ) to determine performance disclosure requirements for broadband. and clarity of the information given to customers on the traffic management techniques employed.4: The FCC should continue its efforts to measure and publish data on actual performance of fixed broadband services. March The British watchdog’s position of applying soft regulation appears to be in line with that of the European Commission and BEREC. certain types of application.idate. Recommendations from the US National Broadband Plan and the European Universal Service Directive 153 www.gassot@idate. at the end of 2011. Ofcom believe positions taken by Ofcom and that it is possible to move forward the European Commission lies on a path of self-regulation. managed access offers – in other given the host of complaints words that give priority access to triggered by its earlier initiatives. putting special cellular network. in theory. for a price. Nicolas Curien & Winston Maxwell). National regulatory authorities may 1. governments to demand clearer planning on going that far. including disabled end-users. and through much more detailed schemes on the quality of service attached to offers and how Internet markets operate. and more specific regulations British regulator Ofcom made its governing operators. position public late last year. Over the course of 2011. 84/ 4th. the quality of service parameters to be measured and the content. the Body of European Regulators for Electronic This provision comes on the heels of Communications devoted efforts the latest review of the Telecoms to the four guiding principles: Package out of Brussels which. comparable. should establish technical broadband measurement standards and methodology and a process for updating them. Quarter 2011. interconnection – and this The decision in the Netherlands despite a resolution from the nevertheless surprised both the European Parliament calling on Commission and NRAs across the Commission and national the EU which were not. a) transparency. Debates are likely to continue on through 2012 and beyond. 09 (Universal Service Directive) Article 22: Quality of service 1. Edited by Vincent Bonneau. Ultimately. the Obama administration is expected to pass the law early in 2012. through codes of conduct in a spirit of selfregulation. The FCC should publish a formal report and make the data available online. which the emphasis on the transparency . in can be summed up by a desire late 2010 the FCC had issued to maintain optimal best effort principles that also emerged access while also permitting from a spirit of compromise. the Dutch Parliament adopted Net neutrality legislation that includes a provision clearly forbidding mobile operators from blocking or throttling access to unlawful content. c) justified and legitimate principles of Net neutrality.. inter alia. Recommendation 4. We suggest that readers wanting to explore this topic further consult our special issue of Communications & Strategies: “Net Neutrality: Act II” (No.

• Vivendi buys the 44% of SFR owned by Britain’s Vodafone for 7. • Samsung Electronics is selling off its American hard drive business. • New Zealand has adopted a new law against illegal downloads. • Mexican firm Televisa. was formally indicted for corruption. and before the end of 2011 will be transferring its division to a joint-venture with Taiwan’s TPV Technologies which will pay royalties to continue to use the brand. • Ericsson sues Chinese telecom manufacturer ZTE for patent law violations. wants to take over rival Global Crossing.4 billion USD in cash and shares. The deal would be worth an estimated 3 billion USD – including 1. for 1. • Amazon has signed an agreement with the United States’ 11. for its Galaxy line of telephones and tablets. forcing the guilty parties to pay damages.000 in all. a location-aware mobile app and advertising service that will help the company consolidate its m-commerce assets. Andimuthu Raja. have filed a complaint against Google with the South Korean 154 DigiWorld 2012 . ITA Software. for an estimated 300 million USD. Apple. will pay at least 1 billion USD to Clearwire for two years to use its 4G network. • eBay has taken over Where. Seagate Technology. • Apple has filed suit against Samsung for plagiarism. • China Unicom chooses ZTE to build its HSDP+ and PTN (Packet Transport Network) system. which is the globe’s biggest Spanish-language TV network. • Sony has confirmed that personal data from PlayStation Network and Qriocity service users’ accounts have been hacked. semiconductors and even social networks – for the sum of 900 million USD. for 6. • German TV network ProSieben has sold its Belgian and Dutch divisions for 1. • Two search engines. Internet. • Mexican mobile operator America Móvil has been fined 12 billion MXN (around 1 billion USD). American mobile operator Sprint is offering an alternative to Isis. a start-up specialised is social media.5 billion USD. • Wal-Mart has acquired Kosmix. which is India’s fourth largest mobile operator. whose majority shareholder is Deutsche Telekom.6 billion USD. 4G. giving it full ownership of the French telco. • China Mobile chooses equipment manufacturer Ericsson to test its 4G mobile network. one of the biggest Internet backbone players. • The Department of Justice in the United States has given the go-ahead. for Google to acquire travel data provider. This theft involves 77 million users.23 billion EUR to consortia led by Finnish media conglomerate Sanoma. • Google pays 25 million USD for Canadian start-up PushLife which designed a content management system that makes it possible to sync an iTunes or Windows Media Player library on Android and BlackBerry handsets. optical networks. with caveats. • Greek carrier OTE. National Semiconductor. • American and German authorities have green-lighted a deal involving the sale of 882 patents belonging to Novell to a consortium composed of Microsoft. theft and fraud for his part in the sale of mobile telephony licences in 2008.April • Vodafone pays 5 billion USD to acquire Essar’s 33% share of the Vodafone-Essar joint venture (exHutchison Essar). for 700 million USD. • America’s number three mobile operator. DigiWorld chronicle • Texas Instruments has taken over its rival. Sprint Nextel. Verizon and T-Mobile USA. for “monopolistic practices”. • Philips has chosen to pull out of the television market. the m-payment joint venture created by AT&T. EMC and Oracle. has raised 500 million EUR on the international market to help refinance its debt.1 billion USD in debt takeover – and allow the two companies to beef up their service line. for the planned sum of 450 million USD. combining their research on wireless networks. in the areas of cellular technology. • The new Panda search engine algorithm being rolled out by Google uses referencing rules that are meant to put quality sites and original content at the top of results. the biggest fine ever imposed by the country’s competition authority. Daum and NHN. acquires a 50% stake in Mexican mobile operator Iusacell for 1. • With its NFC payment system. smart antennae and alternative energy sources. regulator for abuse of dominant position in the mobile search market. service platforms and IT infrastructure – starting with four pilot projects in this last arena.95 billion EUR. in a bid to consolidate its weight in the mobile chipset market.000 public libraries to launch a new electronic book lending service called Kindle Library Lending. • Google enters into exclusive talks with Canadian telecom equipment manufacturer Nortel for the acquisition of its patents – of which there are 6. • France Telecom and Deutsche Telekom will be creating a joint venture to pool their acquisitions in the areas of equipment (client and network). • India’s former Minister of Telecommunications. • Alcatel-Lucent and China Mobile will be working together on developing cellular networks of the future. • Level 3.

iPad or Android handset. Also major stomping ground for Spain’s worthy of mention are Etisalat.pouillot@idate. Telefónica. With its takeover of Zain. A total of 16 operators from emerging or newly industrialised countries are now among the globe’s 50 biggest telcos (see table below). 2. five years – but where conditions Afghanistan. one out of every 1. in 2010 for 9 billion USD. with below $10/month. • Huawei and ZTE are going after each other for 4G technology patent violations. which markets a mini bank card reader that connects to an iPhone. especially those in Africa and the Middle East. will be buying Savvis. customers as MTN. Although some continue to be purely national players – notably China’s three carriers which are nevertheless at the top of the rankings due to the size of their domestic market – many have a more regional business.idate. in 16 African countries. for 2. in addition to enjoying a 20% share of the Meanwhile. • Visa acquires a stake in the start-up Square. • Yahoo! sells off social bookmarking service Delicious to YouTube. Latin America is also a home turf at the end of 2011. A good example is South Africa’s MTN which does business in more than 20 countries. and even 2 or without Vimpelcom . especially in markets part thanks to its takeover of where equipment rates are Atlantique Telecom’s African shooting up – mobile sales in business in 2005. Sri Lanka. America Móvil has emerged as the regional champion in a matter of years1. adding to its emerging countries have tripled in operations in India. without hovering around the $2 mark in countries like India.5 billion USD in cash and shares. is a further example of the stakes that telcos in emerging economies represent. In addition to building up its own business.• Enterprise software provider Infor announces the takeover of publisher Lawson for close to 2 billion USD. over in Latin America. Zain. but is present Vivendi via Maroc Télécom. in addition to the Indian market – boasting a base tremendous presence of America of 180 million customers on its Móvil. ARPU is regularly Indonesia – and Orascom. Pakistan and are often tough. And especially telcos whose main business is mobile: the reorganisation of telecommunications in China a few years back was in fact aimed at increasing competition in this high-potential segment while. The merger with Vimpelcom does not include Orascom’s assets in Egypt 155 www. of which 18 on the African continent: with close to 100 million mobile subscribers in the region. Telco consolidation in emerging markets After Indian operator Bharti Airtel took control of Africa’s second largest mobile operator. a provider of telecom solutions in the United States. • CenturyLink. Telmex. a company that specialises in hosting and cloud computing solutions. Bharti Airtel has half as many Vodafone and. such as France Telecom/Orange. the merger in early 2011 of the assets of Russia’s Vimpelcom with those of Orascom in a deal estimated at 5 billion USD. which operates in 13 countries This expansion trend will no doubt in Africa/the Middle East – in Contact: d. the consolidation of the conglomerate owned by Carlos Slim was furthered in 2010 by its takeover of sister company. to a lesser extent. Company reports overlooking the international six customers there belongs to reach of a few European players MTN. 16 operators from emerging economies in the global top 50 2010 sales (billion €) 54 115 36 322 24 520 19 104 16 480 (1) 12 652 11 827 10 427 9 819 6 856 6 564 5 700 5 637 5 452 5 358 5 291 Rank 6 9 15 17 19 24 27 29 32 38 41 43 44 48 49 50 Company China Mobile America Móvil China Telecom China Unicom Vimpelcom Tele Norte Leste MTN STC Bharti Airtel Rostelecom Etisalat PT Telkom Qtel Turk Telekom MegaFon BSNL Country China Mexico China China Russia Brazil South Africa Saudi Arabia India Russia UAE Indonesia Qatar Turkey Russia India (1) The merger agreement with Vimpelcom does not include Egyptian assets of Orascom Source April .

excl. a provider of information management services. phone signal and data encryption technologies. • LinkedIn is the first major social networking site in the US to go public. to €0.32 on 1st July 2012. 3G and 4G processors for mobile handsets. • Software publisher Autonomy acquires Iron Mountain. • Mobile operator Clearwire has signed a sevenyear contract with Ericsson. • In the counterfeit conflict between Kodak and Apple. • In France. a private enterprise specialised in eDiscovery. which is nonetheless contrary to European legislation.28 on 1st July 2013 and then to €0. and the acquisition is ultimately for 33. IM…. which will be divided up between the top four record labels in the US. raising 352. • Nokia has killed the Ovi brand for its app store. • TiVo wins its appeal against Dish Network/EchoStar which it accused of using TiVo technology in its DVRs without permission – with Dish being ordered to pay 500 million USD in reparation. for 390 million USD.8 million USD with its IPO – which puts the company’s value at 4. provided it gets the go-ahead from the competent authorities (the European Commission gives its approval in October 2011).4 million USD.3 billion USD. with the pay-TV provider acquiring a less than 40% stake in Orange cinema series. VAT. and will gradually be replacing it with the Nokia brand around the globe. 156 DigiWorld 2012 DigiWorld chronicle . including debt. which it has hired to manage its high-speed mobile network.4 billion USD settlement from the company and its founder for copyright violations.May • Google shuts down its Google Videos streaming service. rejecting a complaint filed by its three competitors which claimed it enjoyed preferential treatment. rejecting Apple’s accusation that it had violated two of its digital photography patents. The maximum price that operators can charge for a mobile call made from abroad. documents. • Toshiba will be taking over Swiss smart meter manufacturer Landis+Gyr for 2. France Telecom and Canal+ have opted for a financial agreement. for 367 million USD. which should allow it to raise close to 1. • Microsoft will be buying Skype for more than 8. will be reduced to €0.24 on 1st July 2014. • Semiconductor manufacturer Freescale will be selling 200 patents to Apple. per minute. • PayPal and eBay are filing a suit against Google over the launch of its new Google Wallet. Russia’s main search engine. ultimately ended with a pay-out of 105 million USD.5 billion USD. for 380 million USD. a field that includes data search technologies regardless of format (email. la Poste Mobile. • The French Parliament has approved a law on electronic books which requires “all publishers selling digital books in France to set a retail price”. all trademarked or pending with the USPTO (US Patent Trademark Office). • In light of the difficulties encountered with the joint venture they announced in January. • Chinese social networking site Renren launches an IPO on the New York exchange that brings in 743. the ITC (International Trade Commission) has sided with Kodak. which still gives Canal+ a solid minority share. • The European Commission plans on extending current European roaming tariffs up to 2016 for voice calls. accusing the search giant of stealing trade secrets on m-payment and point-of-sale strategies. including descriptions of Wi-Fi connectivity.5 billion USD in cash.). enters the market using SFR as its host network.39. This applies to French and foreign distributors by virtue of the extraterritoriality clause. • The dispute between LimeWire and the RIAA (Recording Industry Association of America) which was demanding a 1. SMS and mobile data services. The European Commission has also approved the award of the fourth mobile network operator licence in France to Free.3 billion USD.33%. The deal goes through in July. • Yandex. a new MVNO. • American microprocessor maker Nvidia has announced its takeover of Icera. a company specialised in the production of 2G. • Symantec will be buying Clearwell Systems. which currently stands at €0. has announced that it will be floating around 18% of its capital on the stock market. debt included.

using L-band frequencies this year. LightSquared wholesaler. viable for the operators that do string players which includes business Sprint. Early capacity. market seems condemned to be a using regulation to order the Although the wholesale market virtual duopoly in most areas. The top three operators’ covers both wholesale activities in both customer numbers and need for additional spectrum and cost-sharing agreements for Will sell LTE capacity to MVNOs and distributors Russia Will sell LTE capacity? $ Shareholder? 157 May . and a group of regional LightSquared and Dish based their originally involved in building carriers.idate. new entrants who were able to problems the company has since secure spectrum without planning respectively. only two market heavyweights.3 GHz band for rural areas Australia Plans to build wholesale LTE network in the S-band (USA) Sweden $ Owns 50% Builds a common GSM and LTE network (Sweden) Source: IDATE www. in a market and are likely to reshuffle the operational standpoint. they get more than 80% altered the American markets incumbent operators. The goal is to expand the players like Dish or Clearwire (mobile data already generates supply of services into regions could also seek to monetize their more than 35% of both telcos’ where LTE infrastructure rollouts frequencies by selling them (for income). encountered. at a time when the load States. newcomers like LightSquared is a start-up that was MetroPCS. T-Mobile. other especially for the mobile Internet for LTE. who continues to lose Wholesale LTE market players USA Will sell LTE capacity Provides cells sites and helps building theterrstrial LTE network $ Major shareholder Sells Mobile WiMAX capacity + network sharing deal Sharing agreement? Will sell LTE capacity $ Shareholder? Poland $ Owns 50% Builds a wholesale LTE in the 1800 MHz band (Poland) Builds a wholesale LTE network in the 2. Leaps and In the United States. and deals with resellers (MVNOs. the resources to deploy LTE. in addition to the technical 102 and 95 million subscribers. Its spectrum was FCC to quash the launch of the had quickly managed to sign to be its chief selling point: company’s service as it stood. So LightSquared was strategies on the availability of LTE networks based in part on aiming to supply this second tier new frequencies that could supply satellites covering the United with a wholesale solution. however. have TV providers and electronic find a replacement ever since. the wholesale model business plan. spending comes to more than merger with T-Mobile USA fell three times what the rest of the Countries like Kenya and Mexico through – is driving all towards industry is investing… So the appear to even be considering consolidation in some form. LightSquared has been working to regional mobile operators. interference on mobile networks is growing at and positioned as a capacity problems with GPS signals led the a tremendous rate. and a set of second would not be economically top dollar) to the highest bidder. But hardware vendors) to secure its the two market leaders already In any event. cable Verizon Wireless and AT&T. and creation of a wholesale market seems the most likely path.Wholesale operators to perform large-scale LTE rollouts? customers.pujol@idate. Contact: f. this model that is growing by 6% annually deck. recent events have on competing head on with Plus. serve two thirds of the country’s designed by LightSquared has mobile customers – with some since been adopted by several But. at the end of 2011. and their combined – and especially AT&T since its LTE rollouts (see graphic). From an of all new business.

will likely be local subsidiaries of two major telecom groups. for 432 million EUR. • Orange Cameroun and MTN Cameroun will have two new mobile market rivals by December which. which is a France Telecom subsidiary. • Online music service Pandora launches an IPO in the United States that valorises the company at more than 2. a data centre specialist that is developing proprietary software for Windows. Universal Music files a complaint against Deezer for counterfeit. • Google takes over SageTV. a cloud storage service that allows user to access their data online from any device operating under iOS. with technological support from home-grown online search leader. It will be offered for free.3 million customers connected to its Sega Pass online service. who gained attention with their attacks against Sony Pictures.5 billion USD.6 million EUR for abuse of dominant position in broadband access markets.June • Ericsson is awarded a ten-year 1 billion AUD (745 million EUR) contract by the Australian government to build and manage an LTE 4G superfast network in the country’s rural and remote areas. • American cable company Comcast has joined forces with VoIP specialist Skype to provide video calling services on the TV. Sharp and at least 13 other LCD display makers are being sued for price fixing and deciding how many units to produce. • In France. • Online music site Spotify has put a cap of five free monthly listens for any song. LulzSec also claimed responsibility for hacking into the CIA’s system on 15 June 2011. • The US Supreme Court upholds the order for Microsoft to pay Canadian firm i4i 290 million USD in damages to settle a patent dispute. for 400 million USD. and rolled out at the same time as iOS 5. the FTC (Federal Trade Commission) is launching its own enquiry into Google for abuse of dominant position in the online advertising market. • Nokia will be merging its Navteq digital map subsidiary with its services division to develop a new unit for services that combine social networking and location-based services. a company that provides websites with a system for optimising the sale of their ad space. • Google announces the upcoming closure of its Health online medical information storage service. and so expanding the list that includes classic ones such as “. • Google acquires AdMeld. • Video game publisher Sega has been hit by data theft affecting 1. It has also signed a licensing agreement with Universal to use its catalogue in the United” and “. opened a phone line to take hacking requests. Baidu. Mac OS X and Linux on devices with a TV tuner. • HP is filing suit to oblige Oracle to revoke its decision to stop offering support for Intel Itanium chips. saying it is still offering the label’s catalogue on its free site. • Viacom files a complaint against Cablevision. • The European Commission fines TPSA 127. as part of its NBN (National Broadband Network) rollout scheme. and of its PowerMeter service which allowed users to measure their energy”. 158 DigiWorld 2012 DigiWorld chronicle . • The People’s Daily. has sold is Emitel subsidiary to private equity firm Montagu. • After Brussels. • Well-known hackers LulzSec. according to the Ministry responsible for Post and Telecommunications. • ICANN (Internet Corporation for Assigned Names and Numbers) will accept domain name requests with new suffixes starting in mid-January 2012. • Apple agrees to pay royalties to Nokia to settle all of their conflicts over the use of Nokia patented technologies. the Chinese Communist Party’s official newspaper. as a way to steer users to its paid service. even though their licensing agreement expired in January. has launched its own search engine called Jike. • Apple unveils iCloud. • Poland’s incumbent carrier. • Toshiba. TPSA. accusing the cable company of distributing its programmes on the iPad without permission. Nintendo and even the US Senate.

is concerned The innovative features offered by Google+. a minor player in the social naturally feeds both the Google+ networking universe: at the end of their real names rather than a pseudonym. Twitter.bonneau@idate. has stopped allowing Google to also a key point of leverage for index its content. Google+ into a unified management policy its search engine into Google+. thanks to a single ID.Launch of Google+ Launched for beta testing in networking site. only four months its massive base of anonymous were shut down in 2011. The top social networking sites’ user numbers (Million users) Facebook Twitter Linkedin Google+ Tagged My Space 800 100 135 90 30 30 Active users Active users Users Users Active users Single monthly users 159 www. the incorporation of video messaging between members of From a more general perspective. 90 million. even if some users contextual analysis technologies. The default inclusion of about this new possibility which Google+ include more streamlined Gmail helps to recruit new users would encourage users to post to management of networks of to Google+. Google+ after information posted on the social 800 million users. such as photos The swift increase of the number universe. which of Android mobile phones is dominated by Facebook.idate. Gmail and other services like only feed their account through This explains Google’s particular Picasa (online photo albums) and other Google services. user base and the flow of 2011. circles. The for Google+ at between 60 and of the company’s wealth of integration of the search engine. Google is still June 2011 then open to the public between services has translated working to further incorporate in September 2011. which today is solidly posted or chats. Despite this emphasis on having Google+ Google Music (available only in swift expansion. working to change and forays into social networking In late Source: IDATE estimates. sources estimate users into a base of identified appears better interwoven with the number of people registered users. plus the Messenger Google+ rather than to Twitter to friends. end 2011 June . using the principle of function makes for easier instant be visible in Google search results. This integration In early 2012. Google remains users identify themselves with the US). Google+ marks a decisive step While Google’s earlier features for Google. marks another attempt from for personal information stored on One option would be to include the search giant to carve itself a the different Google services. chats and several hangouts. thanks to the appeal the company’s core services. the user’s personal content in the foothold in the social networking top search results. Facebook had an estimated Contact: v. the same Google+ circle.

The device will be on sale in the United States starting on 17 July with a price tag of $140. withdraws its offer to take full control of BSkyB. Warner Music and Sony Music. optical networks. which was created to lead the operation. • China’s Baidu has signed an agreement with three major record labels. in a bid to improve the design of its future smartphones. has been authorised to go after Hotfile for encouraging users to download files illegally. • Google announces the closure of Google Labs. Universal Music. According to the terms of the contract. this acquisition further consolidates Rakuten’s foothold in the European market. content and events.000 out of print works in French whose rights are owned by France’s largest publisher. its site devoted to experimental projects. such as email and instant messaging that had previously been available only to broadband customers. covering mobile telephony. while rival Free will obtain rights of use to the network or the option to buy access rights. the British courts have ordered incumbent carrier BT to block access to sites that allow users to download films illegally. online video and semiconductors. and the search engine earns a 5% commission on each transaction. • American firm Impulse Technology has filed suit against Microsoft which it accuses of infringing seven of its patents with its Kinect motion sensing device. • Japanese e-commerce specialist Rakuten has acquired an 80% stake in German e-commerce firm Tradoria. • The lobbying group for the American film industry. • Google has announced the release of an e-Reader called Story HD. France Telecom will deploy the network and be its ultimate owner. the Internet. • Dell acquires Force10 Networks. This is the first time that the courts are called on to force an ISP to block access to a site. the discount will be applied automatically. • At the request of the Motion Picture Association (MPA). to uphold copyright protection laws. • Orange and Google have teamed up to develop services available on the mobile Internet in Africa. • A consortium of high-tech giants – including Apple. and RIM. Ericsson. Rupert Murdoch shuts down the paper and News Corp. These will come to expand Google+. to offer legal music sales online through its search engine. 160 DigiWorld 2012 DigiWorld chronicle .5 billion USD to acquire a set of more than 6. which runs on the company’s own operating system. a company that specialises in pattern recognition and artificial vision. • Manufacturer Qualcomm. • Google has bought PittPatt (Pittsburgh Pattern Recognition). for 750 million USD. the MPAA. On the heels of its takeover of PriceMinister. If upheld on appeal. however. a company dedicated to man-machine gesture recognition. • Because of the scandal that has erupted around the publishers of News of the World who are accused of hacking the phones of a host of celebrities and victims of crimes. and for the presumed profits earned on their business. tailored to the company’s Google Books digital library. • The International Trade Commission (ITC) in the United States has ruled that HTC has infringed on two Apple patents. • Free and France Telecom-Orange have signed a co-financing deal for FTTH network rollouts outside of very high-density areas in France. • Electronic Arts (EA) has announced the takeover of PopCap Games. has acquired technologies initially developed by GestureTek. Sony. Microsoft. will begin by running trials in six cities starting in September. and others reallocated. Consumers buy the apps with their Google account. • On the Android kiosk. as well as EMC. Some projects have been abandoned.000 to 50. • Google and Hachette Livre have concluded a deal that allows Google to digitise 40. • Google announces the acquisition – for an undisclosed sum – of Fridge. 4G. • American Express has signed a partnership deal with Facebook that will enable users who link their cards to the site to enjoy coupon-less deals: when they use their American Express card to buy one of the items on special. a young start-up specialised in developing social networking tools and services for sharing instant messages. Counterfeiting charges have been dropped. • Chinese online giant Alibaba announces the release of its first smartphone. the global leader in data storage solutions. this decision will threaten the import of these devices into the US. a networking solutions specialist for data centres.July • The Italian government has unveiled its optical fibre deployment plan: public company FiberCo. developers can offer paid options directly within their Web applications. which specialises in components for telecom products. maker of the BlackBerry – has spent 4. Eight game publishers are also being sued.000 patents coveted by Google. and is due to have passed 50% of households by 2020. The partnership makes it possible to use the GSM network and have access to services. a company that specialises in producing games for mobile phones and social networking sites. notably those tied to Gmail and maps.

demand versions of the channels. If cable had earlier access strained environment. HBO. And. shrink while the other two. are posting packages. applying tiered DVD rental to (unlimited) VoD been the only one affected by the pricing. and delivering less expensive Showtime and Starz.e. But Netflix has come For the first time. which rekindled the debate over cord-cutting – in other words the trend of consumers cancelling their classic pay-TV service and switching to video services on the Web. they The pay-TV sector lost 378. 7. First. penetration levels.000 subscribers in the second quarter of 2011.fontaine@idate.2% Cable 33. Glenn Britt. second. based on connection speed. mid-2011 . for films. months for free. The service. will be a crucial valuesubscriptions resulted in a price gradual deployment of telcos’ added.30 for HBO. and whose service. This unprecedented loss of customers (around 3% of the total subscriber base) nevertheless needs to be put into perspective. could also be Pay-TV platforms are reacting to the accompanied by cord-shaving Contact: g. which combines for a certain inertia in pay-TV is clearly more profitable than DVD rentals and streaming. they is seeing its customer numbers are revising their pricing policies. It should combined could in turn weigh on nonetheless be said that these both ARPU and overhead.5% Satellite Telcos Source: BoA Merrill Lynch Global Research Estimates July Pay-TV market share in the United States. These two strategies a slight increase. This is a likely outlook hike. in 2011 were followed by an Warner Cable CEO. decrease affected all three payability to deliver a high-quality and customers’ switching from TV systems. an increase in programming IPTV services. satellite pay-TV also for the United States where the reported a decrease in subscribers. latter two regularly offer huge discounts. structured around tiered pricing. which is the most expensive. costs and even an inability to fixed access market is already secure exclusive premier TV rights This cord-cutting phenomenon. however. confirmed. distributing TV channels and video boasted 26 million subscribers as services.Is cord-cutting really affecting America’s pay-TV market? are improving their services – not – in other words users switching least by beefing up their online to cheaper pay-TV packages. Of presence and developing onthe top three pay-TV channels.3% 161 www.idate. In mid-2011 Time and $1. such as HBO Go. The broadband access growing popularity of Netflix credit crunch is also to blame market continues to grow. this services prove successful. $2.72 for Showtime. which still remains to be 59. Should online video of mid-2011. the up against real hurdles as well. and sometimes even Looking ahead to the medium-term.10 for Starz straight quarters of decline cord-cutting. SNL Kagan some pay-TV providers appear to estimates that monthly perPay-TV subscriptions are subject be gearing up to a shift in their subscriber revenue comes to to seasonal variations: the two business as a way of handling $7. upswing in customer numbers said that the cable company now Pay-TV providers and channels in last quarter of the year and viewed Internet access as its core have no doubt suffered from the the first quarter of 2012.

• HP confirms its takeover of British software company Autonomy for 10 billion USD. Under the terms of the agreement. saying it needs to be treating the competition more fairly by the 2018 deadline for structural separation. and so coming to compete with Belgacom. to make way for the deployment of the National Broadband Network (NBN) which is expected to cost a total 36 billion USD. These attacks appear to be an official warning.5 billion EUR in funding and a total staff of 1. With a market value of 348 billion USD. • Telenet. DST.August • 4G spectrum auctions in Spain have brought in 1. who has always been the face of Apple. Australia. • Cable company Time Warner Cable has announced the acquisition of competitor Insight Communications. This merger comes at a time when the state of virtual monopoly is coming under fire from Mexican competition authorities. a cable company that operates in Flanders. China Mobile and IBM. Telstra would relinquish control of the country’s only copper long-distance network by July 2018. • Eight months after the split of Motorola. Its target is to have 160. which outside sources estimate at 800 million USD. Apple still has the second highest market capitalisation in the world. Groupon and Airbnb.5 billion USD. has gone. its counterpart in the Frenchspeaking part of the country. FTTH GmbH. Norway and Singapore but not in France where it appears to have been fully abandoned. in shares and cash. 162 DigiWorld 2012 DigiWorld chronicle . will have 1. the ninth largest cableco in the United States. Denmark. the ACCC. it is rival Baidu that is suffering the wrath of Beijing. France Telecom and KPN.500 employees. Belgium. which is well below the 2 billion EUR they had projected.1 billion EUR). Even if Apple will need to prove its ability to continue to innovate once Jobs. Switzerland. which is the biggest ever for Google. 38 million Germans have had access to digital terrestrial radio (DTR) since 1st August. • French telecoms regulator ARCEP has been given increased powers. especially on programming. especially for the sake of protecting Net neutrality. This deal. even though it was provided for by law in 2007. • Practically a year to the day after the Google saga that ended in the company pulling out of China and setting up shop in Taiwan to prevent its search results from being censored. and the highest of any tech stock – well ahead of Microsoft. for roughly 23 billion USD in 2010. which already owns a stake in Facebook. and that these separation plans for the wireline phone network negotiated with the Australian government in June 2011 will need to be reviewed. The frequencies were acquired by the country’s four existing telcos: Telefónica. • Twitter confirms a major round of fund-raising by Russian private equity firm. puts Twitter’s value at around 8 billion USD. Orange and TeliaSonera. behind Exxon Mobil (353 billion USD). Tim Cook. including the ability to order functional separation on the incumbent carrier should it become too powerful in its market and no other remedy will suffice. Vodafone. ARCEP is also empowered to regulate Internet companies. DTR services are already available in the UK.647 billion EUR to the State coffers. The take from the operation. Due to be finalised in early 2012. • After a 10-year wait. at a time when the power of new Internet giants is causing Chinese authorities some concern. Mexico’s America Móvil – which is Latin America’s largest mobile telco – announces that it will be buying the remaining 40% for 6. a satellite services company born of the merger of the satellite communications businesses of Norway’s Telenor and France Telecom. the takeover still needs be approved by authorities in the United States and Europe. • Australia’s anti-trust authority. in exchange for 11 billion AUD (8. • Steve Jobs steps down as CEO of Apple and hands over the reins to COO.5 billion USD. will allow the company to secure the Android ecosystem. and Tecteo. Telmex.000 homes passed for fibre by the end of 2011. has called out incumbent carrier Telstra. The new company. • After having acquired 60% of its parent company. the markets greeted the news with aplomb. Google buys Motorola Mobility and its portfolio of patents for 12. Zynga. will be spending 74 million EUR over 10 years to acquire the fourth 3G mobile telephony licence in Belgium. • EADS has announced that its subsidiary Astrium will be spending 673 million EUR to take control of Vizada. for 3 billion USD. The merger is expected to enable TWC to save 100 million USD a year. Several official media outlets have severely condemned the Chinese firm that was created in 2000 and has become the country’s undisputed leader in online search. • Germany’s incumbent carrier Deutsche Telekom will be creating a subsidiary to manage FTTH rollouts.

org Samsung Source : Strategy Analytics (Oct. This handful of examples is telling of the heated state of affairs and the endless controversies in high-tech markets. All in being forbidden to sell its tablet Two possibilities: heavier fines for all. Apple vs. Google’s series of takeovers in Germany in early 2011. losing out to a consortium led by and legitimate incentive to Apple. of abusive strategies that stifle by bidding 12. and a reform of patent increasing its stock of patents by Samsung vs. agreed to shell out $4. vital matter. which was stances the main stakeholders are its interests in the many court eventually dismissed. The South taking with their smartphones cases it faces. by vendor Million units 40 35 30 25 20 15 10 5 0 Q1 '09 Q3 '09 Q2 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 163 www.5 billion USD Motorola. What can we hope for Motorola Mobility and its versus Samsung – with the latter to see emerge from this situation? portfolio of 17.gassot@idate. Microsoft and RIM which On the first count are Oracle’s protect innovative companies. with the cash it earns new tablet did not infringe on on the sale being seen as its sole Contact: y.5 billion lawsuits against Google over but they can also be the source for the lot. and Growth of quarterly smartphone sales. the drama began with Google’s discussions over the two facets of sums being spent. has triggered a heated war over patents.Just how far can the patents war go? The tremendous wave of innovation in the device sector. and the money they bring in would help pay off the company’s creditors. For Kodak. HTC then competition. so opening the way to overturning the earlier ruling. the to be lifted just before Christmas.000 patents. or with the ability sale of its portfolio of 1. the most offices.idate.100 image while local courts in Germany to swiftly enter into reciprocal processing patents has become a also ruled late last year that the licensing agreements. chance at survival: should the company go bankrupt. patents: they can be an efficient secure a solid portfolio of patents. which Korean manufacturer’s ban on will allow them to secure their is in court battles with Apple and selling its tablet in Australia was platforms with no risk of being HTC for patent infringement. and especially in smartphones and tablets. it remains to the area of intellectual property counterfeit in the French market be seen whether the defensive and in a better position to defend in autumn in Apple’s intellectual property. and in companies that are relentlessly in 2011 resulted in the company Australia later in the year – and litigious. Apple. Microsoft vs. attacked. Google reacted the use of Java. these same patents would be sold at auction. and so strengthened in serious being an accusation of In the meantime. We are seeing both a growing This situation has rekindled number of court battles and huge In the arena of acquisitions. 2011) Apple Nokia RIM HTC August . 20 times. especially to failure to secure Nortel patents.

which could bring in more than 1.K. while Sony. Dell will provide the hardware and Baidu the operating system. • Amazon unveils its touchscreen tablet.6 GHz band. Hitachi and Toshiba will each have a 10% share. Wind (two blocks in the 800 MHz band and four in the 2. Without giving a definite timetable. Frequencies were allocated to the country’s four main operators: Telecom Italia and Vodafone (two blocks each in the 800 MHz band. one block in the 1800 MHz band and three blocks in the 2. which has been in trials in New York and San Francisco since May. • The sale of a first block of spectrum – 14 blocks of frequencies in the 2.September • Japanese titans Sony. but none in the “golden” 800 MHz band). reserved chiefly for urban areas – brings in 936 million EUR to the French government: 236 million EUR more than the reserve price.5% to around 26%. for 1. which will inject 200 billion JPY (1. Based on NFC contactless technology. Seventy percent of the venture will be owned by Japanese public-private fund. • France’s Competition Authority quashes the CanalSat-TPS merger and fines Canal+ 30 million EUR. the joint venture is due to start doing business in spring 2012 and will be the sector’s biggest player.4% stake in Vivendi and so becomes one of the 11 biggest shareholders. and the new Telefónica Recursos operational unit. Nokia and Siemens will each be injecting 500 million EUR in their joint venture. first decreasing its stake from 53. a unit created by the merger of Telefónica de España and Telefónica O2. will initially be available only in the United States on mobile operator Sprint’s network. to be able to deal with growing competition. Innovation Network Corporation of Japan (INCJ). to focus its energies on consolidating its operations in those markets where it already enjoys a strong position. • 4G spectrum auctions in Italy have brought in 3. the globe’s third biggest PC maker. has created a partnership with China’s top search engine Baidu.5% share of the market. Bollore thereby acquires a close to 1. data centres and wireless systems. and will only work with the Nexus S 4G Android smartphone. • The European Commission has ruled that the award of bonus channels to TF1.1 billion EUR) and Hutchison Whampoa subsidiary 3 Italia (one block in the 1800 MHz band and four blocks in the 2. considering that the pay-TV network deliberately and systematically violated 10 of the 59 commitments it had made under the terms of the merger. • At the request of Apple – which has filed similar suits in several countries around the world. Free Mobile (20 MHz duplex for 271 million EUR) Bouygues Telecom (15 MHz duplex for 228 million EUR) and SFR (15 MHz duplex for 150 million EUR.945 billion EUR. Toshiba and Hitachi have joined forces to combine their tablet and mobile phone display operations. • American mobile phone chipset maker Broadcom announces the takeover of NetLogic.26 billion EUR).1 tablet in Germany. • French pay-TV network Canal+ acquires 60% of two channels belonging to the Bolloré group: Direct 8 and DirectStar.” France Telecom-Orange has begun the process for selling off mobile operator Orange Switzerland. which well exceeds the Italian government’s most optimistic forecasts. for 3.6 GHz band. as part of its battle with Google – the Court of Düsseldorf confirms that South Korean manufacturer Samsung is forbidden from marketing its new Galaxy Tab 10. to provide tablets for the Chinese markets. with a 21. • After Swiss authorities blocked its planned merger with Sunrise in 2010 due to “dominant position. • Dell.6 GHz band. for 279 million EUR in (parent company) Vivendi shares. and no commitment to host MVNOs).. this electronic wallet.8 billion EUR) into it. for 305 million EUR.5 billion EUR. and the biggest among industry players – all the others being investment funds. Google is also planning to launch the service in Europe. positioned as a direct rival for Apple’s iPad and which will be in shops in mid-November. and could soon take it public. all of which had filed an application by the 15th September 2011 deadline: Orange (20 MHz duplex for 287 million EUR). • Having failed to sell a stake in Nokia Siemens Networks (NSN) to private equity firms. The French conglomerate is also working on its withdrawal from the Austrian and Portuguese markets. • Google officially launches its Google Wallet e-payment system. Baptised Japan Display K. National regulatory authority ARCEP awarded spectrum to the country’s four mobile network operators. • The Belgian government is exploring several privatisation scenarios for Belgacom.6 GHz band. M6 and Canal+ – in exchange for putting an early end to their analogue contracts and the added cost of providing dual analogue/digital services for several years – is contrary to European law. before selling off all of its remaining shares within two to three years. a fellow US firm that specialises in communications processors for the Web. 164 DigiWorld 2012 DigiWorld chronicle . for 1. and especially a two-stage sale of the incumbent carrier.7 billion USD. • Spanish incumbent carrier Telefónica is reorganising its business into three divisions: a new division called Telefónica Digital. as well as phones. the Kindle Fire. starting in the United States.

So iTunes is also incorporated into Spotify. which makes Spotify a direct rival for iTunes and helps diversify Royalties to record companies its revenue streams.fontaine@idate. Record listening time and the number of companies are in fact encouraging times they can play a song. the Spotify online music service signed a major agreement with Facebook. integrating users’ personal library and the titles offered by the service into a single www. the service benefits both from a major enhancement of its features and a distribution platform that allows it to convert free users into paid subscribers. Spotify now offers users and subscribers several social media features. Plus the development of paid services new subscribers are given free as they believe ad revenue does unlimited access for the first six not allow them to fully exploit months. including the ability to listen to friends’ playlists and recommend songs. turning off sharing information with Facebook. Although Spotify’s revenue in 2010 did increase substantially – from €13 million in 2009 to €72. • decisive improvements to the design of the service. the company joined forces with Virgin Media in the UK in October 2011 to market a cobranded Internet access/Spotify offer. the company is aggressively of the guaranteed minimum promoting its subscription they require. After signing a deal with Swedish telco TeliaSonera in 2009. however. allow customers to listen to their The terms of use imposed by rights songs offline and on their mobile This agreement completes a series holders has resulted in a more phone. • the launch of a download service alongside the initial streaming offer. and MOG and Rdio cut 70 60 their prices.3 million versus €19 million in 2009. continue to be the company’s main cost centre and. All subscriptions also online music rights.Spotify comes to Facebook In September Facebook is not Spotify’s only ally. music sales and advertising – the latter having not generated enough income to put the company in the black. The deal with Facebook also gives a huge boost to Spotify’s international footprint. actually exceeded solutions by limiting free users’ Spotify’s income in 2010. because • lastly. 2009-2010 French telco Orange. streams: subscription. Integrated into the social networking site. Deezer signed a distribution deal with Spotify’s income statement. Although negative reactions from some consumers forced Spotify to include a private listening feature. 165 September . These deals are also revealing of the competition between websites and services for revenue streams from online content. 50 40 30 20 10 0 -10 -20 -30 -40 -50 -60 -70 2009 2010 Revenues Cost of sales Loss Contact: g.2 million – it also posted huge losses: €30. Napster has announced the takeover of Million £ Rhapsody. To this end.idate. of initiatives that Spotify has concentrated market and a mad taken to make the move from a So the service is now built on a dash from all the players achieve free to a paid model: combination of three revenue critical mass.

the European Commission announced plans to invest 9.October • During a meeting of European network operators. In the meantime. HTC has filed new complaints. and China Telecom customers in Europe. and so entering the content fray head on. in the form of direct investments.5 billion USD. loans and subsidies. and is being backed by Google whose Android OS runs most of its smartphones. According to Kroes. the company will also acquire 4. Neelie Kroes. • Japanese giant Sony will be acquiring Ericsson’s 50% stake in their Sony-Ericsson mobile handset joint venture for the sum of 1. • In a preliminary decision – which is to be confirmed in a plenary session in February 2012 – the International Trade Commission (ITC) in the United States has rejected the complaint filed by US firm S3 (since taken over by Taiwan’s HTC) in May 2010 against Apple for infringing on four of its patents. announced her plans to push incumbent carriers to invest in optical fibre networks. both private and public. The French telco has also negotiated the award of a 3G licence once it begins operations in the DRC. At the same time. Having full control of the division will allow Sony to consolidate its multi-screen strategy. • France Telecom and China Telecom have signed a framework agreement for a partnership to take advantage of the complementary nature of their networks and services. • Alcatel-Lucent will be selling its Genesys call centre and videoconferencing software business to European fund Permira. by reducing the revenue they earn on their legacy copper networks. the split did not garner investor support and resulted in a drop in HP’s share price. The Democratic Republic of Congo’s fourth largest mobile operator was previously owned by Chinese equipment manufacturer ZTE (51%) and the Congolese State (49%). who was brought in to replace CEO Leo Apotheker in late September. and the assistance provided by European structural funds. • Apple announces the death of Steve Jobs who had founded the company back in 1976. In the bargain. • The France Telecom group acquires operator Congo China Telecom (CCT) for 12.000 patents filed by Sony-Ericsson. plus those bought from Nortel in summer 2011. could seriously harm the Canadian company’s reputation at a time when it is quickly losing ground to its main competitors. and which sold the company nine patents on 29 August 2011. • IT heavyweight HP has changed its mind about spinning off its Personal Systems Group (PSG) division which manufactures its PCs.2 billion EUR between 2014 and 2020 in panEuropean ultra-fast broadband network rollouts. • The unprecedented global blackout due to a defective switch in the RIM network core. Meg Whitman.05 billion EUR in cash. as well as improving access to international cable networks for both companies. along with other stimulus measures for the group. for 1. 270 billion EUR will be needed to provide all Europeans with superfast broadband access by 2020. regional and national spending. and who had handed over control on 24th August 2011 due to illness. believing the process will generate excessive costs. Announced in August 2011. This aid is meant to help complete local. • Microsoft announces some 40 agreements around the globe aimed at integrating TV and entertainment offers into its Xbox 360 console. starting with improving the quality of access and services provided to Orange business customers in China. the European Commissioner for digital strategy.4 million EUR – with a corporate value for CCT of 143 million EUR. therefore undertook a complete overhaul of the company’s strategy. 166 DigiWorld 2012 DigiWorld chronicle . which affected more than 10 million BlackBerry users for three days.

the one side and streaming on the unlimited access offer built chiefly Originally offering DVD rental other. or at least for pay-TV. The streaming service the American market given the services. by mail. The first model to the programmes and films to them. which account for 60% of Netflix charging a flat fee for unlimited to create a balance between the streams. American studios were will be constrained by specific At the same time. or prevent them from farming out Fundamentally. whose novelty was specific income from streaming. The goal was to generate around older TV programmes. but perhaps a backtracked to some degree by an extent that it actually caused harder sell in other Growth of Netflix subscriber numbers and ARPU 25 20 20 15 15 Subscribers ARPU 10 10 5 167 www.IDATE October Million subscribers US$/month . for instance. while the second is a This split resulted in the price being licenced the online distribution low-cost alternative in the pay-TV almost doubled for customer rights it had obtained from market. though. After Canada and South America. the company had company’s ongoing decline in very quickly and will be competing enjoyed a good deal with pay-TV ARPU. the company aware of Netflix’s potential impact is working to build a library regional and local regulations. premium service built. which is a wise choice for who wanted to subscribe to both studios. The way Netflix is positioned United States. and an critical stage in its development. Netflix later expanded into price of acquiring online rights alternative to basic cable. Because of the impact was initially offered for free to high prices charged by incumbent this hand on subscriptions.Netflix at a turning point American video on-demand Netflix was forced to split its and so a potential competitor for service Netflix is entering into a business into two: video rental on PPV.leborgne@idate. so grew to such pay-TV providers.idate. To secure the rights and the income earned from and IPTV packages. with rights’ holders own online channel Starz which had subservices. gradually into European markets. Netflix DVD customers. satellite streaming. of DreamWorks. although it did not pull back on its will influence the company’s When it came time to renegotiate price 0 2005 2006 2007 2008 2009 2010 2011 (Q2) 5 Source : Netflix. and so turn the tide on the will increase programming costs be streamed. on the traditional VoD market. Netflix the rights to the programmes. deciding not to create a separate a strain on network traffic in the brand (Qwikster) for DVD rentals. like its DVD businesses. as it rights. on recent films Contact: f. of premium programming by and they put pressure on Starz to Netflix plans on expanding making deals with the likes either up the price of online rights. is running two businesses: a Faced with a potential hike in the price of its programming rights. international strategies. and which offers an rentals.

through the firm Berkshire Hathaway. • Vivendi subsidiary Universal Music will be taking over British record label EMI for 1. based on an average valuation of 10. BUCD bvba one 45 MHz block of spectrum for 22. of which France Telecom owns 35%. • After a public consultation launched in March 2010 to determine whether European regulation governing universal service obligations should be extended to reduce the digital divide. • The European Court of Justice has been called on to rule on a dispute between Belgian rights society. • Three years after its creation.02 million EUR. an OTE subsidiary which will pay 118 million EUR for its licence. a company that specialises in targeted online advertising. along with private investment firms. Silver Lake and TPG Capital. Amazon’s MP3 Store and the Facebook-Spotify duo. • Three years after the aborted takeover of Yahoo!. Sabam (Société belge des auteurs compositeurs) and ISP Scarlet Extended. for 270 million USD. which is in dire straits and having to contend with stiff competition from Asian rivals such as Huawei and ZTE. It will also be selling off certain divisions. Universal Music is hoping this deal will create a growth outlet in a music market that is still in the throes of its transition to digital.000 jobs worldwide. not least because of the potential cost.5 million EUR for the State. which hopes to rival Apple’s iTunes. over whether demanding that an ISP filter sites that violate copyright is contrary to European law.7 billion USD. • Chinese telecommunications giant Huawei Technologies will be acquiring American firm Symantec’s 49% share of their Huawei Symantec joint venture for 530 million USD. • Hutchison 3G makes a 1. in an attempt to stand up to Amazon’s global offensive in this fast-growing market.November • Yahoo! acquires Interclick. the European Commission ultimately announced that it would not be imposing Europe-wide legislation requiring a universal service for high-speed Internet access and mobile telecommunications.5 million EUR.2 billion GBP – provided it gets the go-ahead from regulatory authorities. If it gets the green light from authorities. the deal will allow the subsidiary of Hong Kong conglomerate Hutchison Whampoa to move from fourth to third position in Austria’s mobile market. he now owns a 5. 168 DigiWorld 2012 DigiWorld chronicle . or more than a quarter of its total staff. They will be awarded 15-year licences that will be valid as of 1st July 2012.5% stake in the IT giant which has cost him around 10. • American billionaire Warren Buffet has bought 64 million shares in IBM over the past eight months.8 billion USD. • Greek’s Telecommunications and postal regulatory commission has issued 15-year mobile telephony licences in the 900 MHz and 1800 MHz bands to the country’s three main operators: Cosmote. As a result. • The European Commission launches an enquiry to determine whether Apple and Samsung violated competition law with patents acting as standards in the mobile telephony sector. • After several months of testing.4 billion EUR buyout offer for Orange Austria.2 million EUR. • Finnish telecom equipment manufacturer Nokia Siemens Network (NSN). Google Music. giving it access to financial data and making it officially one of the candidates for the acquisition of a portion of Yahoo!’s business. to focus on high-speed mobile Internet. will be cutting 17. • Dutch consumer electronics maker Philips transfers its longstanding TV business to a joint venture with TPV which will own a 70% stake of the business. Vodafone-Panafon (168 million EUR) and Wind (93 million EUR) – bringing in a total 380. KPN Belgium two blocks of 15 MHz for 15. • Japanese e-commerce giant Rakuten buys Canadian e-Reader and digital solutions producer Kobo for 315 million USD.04 million EUR and Mobistar two blocks of 20 MHz for 20. deal of the day specialist Groupon launches an IPO. After having acquired BMG’s music publishing business in 2007. • The winners of 4G spectrum auctions in Belgium are as follows: Belgacom which has been allocated two blocks of 20 MHz for 20. Microsoft signs a confidentiality agreement with the former. Google has launched its online music shop and storage service.

6 GHz and 800 MHz band November . Italy (October) and France where allocations occurred in two stages – for the 2. The topic is also being discussed in the United States where the FCC and public authorities view auctions for TV broadcasters as a way to encourage them to free up UHF bands.86 for Vodafone in Italy. like for earlier mobile systems. with hopes of achieving better international harmonisation in the bargain. particularly to the digital dividend “golden frequencies” (700-800 MHz). the average price – measured in MHz per capita – for 800 MHz band spectrum varies between €0. In the big European markets.idate. But even in these countries.The price of 4G spectrum Since the first 4G licences were issued in Japan in late 2007. But this is still some way off: around 2020 according to the French government’s timeline. Germany was the first of the big European markets to hold spectrum auctions for 2. in Japan. Europe could in fact try to adopt Asia’s frequency plan for the 700 MHz band. along with a few emerging countries. Contact: f. These various spectrum allocations provide us with an opportunity to compare the economic terms attached to frequencies in the different countries. Uzbekistan and the Philippines.6 GHz band in September and for the 800 MHz band in December – while the UK is due to hold its procedures in 2012. allocation procedures have been gradually taking place in other advanced countries around the globe: in the United States in 2008. but to a much lesser degree than they did for 3G frequencies. followed in 2011 by Spain (July). 2011.491 for one of the three Spanish operators (Orange Spain) and €0. Prices do vary from country to country. other developed markets in Asia.68 54.94 70.pujol@idate. Europe beginning in 2009. LTE spectrum was not auctioned off but rather allocated by the State for free. 20 years Italy (Oct.80 72.38 169 Germany (Mar. an average €0. Over in the United States. 25 years Spain (July 2011. 2011. 15 years Sweden (Mar. In Europe. 20 years Source : IDATE www. starting with Scandinavian countries. services could be introduced in frequencies below the currently available 790-862 MHz band.71 was paid for 700 MHz band spectrum while. 2010.51 36. 16 years France ( The price per MHz for “golden” frequencies Price in € cent 85. including Saudi Arabia. 2011. the process is probably not yet over as operators will need additional capacity to handle the explosion in mobile data traffic – and discussions are underway over a second digital dividend. in spring 2010.

• Qatari investment fund Qatar Holding now owns more than 10% of Lagardère. which is watching chief rival Verizon Wireless acquire cablecos’ spectrum. Canal+ signs an agreement with Polish media company TVN and its majority shareholder ITI to merge their pay-TV services (Cyfra+ for Canal+ and “n” for TVN) and so create the second biggest satellite pay-TV business in Poland.6 billion USD to cable companies Comcast (2. be offered roaming rights with the operator that was awarded two blocks. Although it came away empty-handed. France’s telecom regulator ARCEP allocates 4G spectrum in the 800 MHz band – the “golden” digital dividend frequencies – to SFR (two blocks of 5 MHz each.1 billion USD. Options include selling its stations to tower companies. belonging to Saudi billionaire Al-Walid. Time Warner Cable (1. which corresponds to the amount of aid the carrier received between 1994 and 2002 in the form of corporate tax exemptions. to acquire 4G spectrum. and offer it a roaming agreement. This means that Germany’s incumbent carrier now has to seek out other options for its American subsidiary. • Mobile operator Verizon Wireless will be giving 3. Microsoft and eBay.6 billion EUR). as stipulated in its application. • Japanese consumer electronics giant Sony will be selling Samsung Electronics its 50% stake in their S-LCD display joint venture for 1. announces a 300 million USD (230 million EUR) investment in Twitter. T-Mobile USA – in light of the many regulatory obstacles the deal encountered. • AT&T has got the green light from regulators in the United States to acquire spectrum from Qualcomm. a four-year-old California-based company that makes games for Facebook. the 14% to 15% of equity that was floated should allow the company to raise between 850 million and 1.3 billion USD).December • Zynga. • At the outcome of a selection procedure. behind market leader Polsat. could find other arrangements that are more compatible with regulators’ stance. • The firm Kingdom Holding. Oracle. which will allow it to increase the capacity of its 4G network considerably. and the telco will sell the cablecos’ services. . making it the largest shareholder in the French media conglomerate. which makes it the biggest IPO for an Internet company since Google in 2004.080 billion KRW (719 million EUR). Orange (one block of 10 MHz for 891 million EUR) and Bouygues Telecom (one block of 10 MHz for 683 million EUR).06 billion EUR). British carrier BT goes after Google – saying the American company’s Android operating system is infringing on BT patents. Based on an estimated valuation of 7 billion USD. Verizon has also said that it would no longer be expanding its FiOS optical fibre solution geographically and will be using its LTE system to provide uncovered areas with superfast access. which is the fourth largest cellco in the US. merging with the number three operator. Meanwhile. and will instead pay Deutsche Telekom 4 billion USD in compensation. • After more than a month of exclusive talks. Sprint.1 billion USD) and Bright House Networks (189 million USD). has launched an IPO. AT&T. • The European Court of Justice confirms a decision from the European Commission which had ordered France Telecom-Orange to reimburse the French State some 1 billion EUR. Free could. DigiWorld chronicle 170 DigiWorld 2012 • AT&T finally decides to halt plans on a 39 billion USD agreement with Deutsche Telekom to acquire the German incumbent’s American subsidiary. the deal also includes cross-selling partnerships: the cablecos will sell Verizon LTE services. given the massive investments that need to be made in LTE rollouts. or taking part in restructuring second-tier operators. • American firm Adtran will be taking over Nokia Siemens Networks’ (NSN) fixed line broadband access business. France Telecom will be selling off the entirety of its cellular subsidiary in Switzerland to an investment fund managed by Apax Partners for 2 billion CHF (1. • Provided it receives the approval of public authorities. • Dutch telco KPN has sold its KPN France subsidiary to Bouygues Telecom. Subject to the approval of regulatory authorities. which turned out to be SFR. for 1. • After Apple.

000 2. the FCC voiced in complicated standards deals the market’s number four player. In late America’s increasingly concentrated mobile industry 3. Deutsche Telekom.9 billion a cut in investments planned deal that had been announced in for Germany (fibre. 05 Dec. The or handing its subscribers and of T-Mobile.500 2. 08 Dec. for $39 billion. its opposition to the merger which (since the merger with Nextel) T-Mobile. with a maximum of 10.AT&T. 03 Dec. probably less favourable T-Mobile! the market share of each firm competing in the options for its North American market.000 1. The deal includes Department of Justice filed suit Compensation for Deutsche a variety of arrangements. believing it Telekom was considerable.000 500 0 171 www. MIMO antennae). This could also mean this merger would eliminate an mobile TV service) in a $1. Meanwhile the owner should the deal fall apart. and to rid Ultimately. arguments were as follows: the fees the German incumbent deal would create a company that had racked up). including the cable companies would be bad for competition. American subsidiary which has sizeable chunk of T-Mobile after Verizon Wireless already got a haemorrhaging customers and having acquired it.idate. An alliance with the market monopoly. including $3 billion in cash (well selling Verizon Mobile LTE More specifically. 09 Jun 10 Moderately Concentrated (1500 < HHI < 2500) Highly Concentrated (HHI > 2500) Source : FCC’s 15th report December .000 to qualify a subsidiary. AT&T announced that it was and its 20 MHz of AWS spectrum. (Clearwire. The HHI index (Herfindahl-Hirschman Index) December 2010 and interrupted carrier will take time to consider is a measure of market concentration. Sprint second largest telco. be able to spectrum (6 MHz in the UHF band rid itself of its debt as it had also underscored the fact that assigned to the aborted MediaFLO planned. 3 carrier. which it had lost AT&T thus withdrew its plans and be tricky to say the least. But it found jump on DT last December with struggling to compete with the no support from authorities to its takeover of SpectrumCo (a market leaders who had already continue exploring these options. 06 Dec. and a seven-year to its name. The 1. on 19 December 2011 Comcast and Time Warner Cable) itself of its debt.1 billion).500 ). telco apparently considered frequencies over to a bold new saw the deal as an opportunity to other options as well to persuade entrant. Deutsche Telekom telco’s acquisition of Qualcomm 1 markets (HHI > 2. including begun rolling out LTE. for $3.6 billion. to block the deal. AT&T did manage to controlled 45% of the country’s 128 areas in the country it did end the year with more spectrum mobile customers. spectrum in Meanwhile. In August 2011. its anti-trust above the $450 million in legal services. consortium of cablecos. the United States’ aggressive and innovative telco country’s No. it would set aside $4 billion to merger with a second-string telcos like LeapWireless and MetroPCS and to get its hands on T-Mobile’s cover commitments to T-Mobile to create a national operator. As for an put an end to the woes of its its authorities. LTE). 04 Dec. so result in too not yet cover. The deal would have resulted in layoffs and several difficult partnerships was to enable AT&T to move back and was not in the public interest. however. LightSquared) – would up to top spot. Contact: y. It is by… the planned merger with calculated by adding the sum of the squares of other. (HSPA+. the great a degree of concentration roaming agreement for AT&T’s FCC gave the go-ahead for the in 96 of the country’s 100 biggest 3G network. T-Mobile: chronicle of a failed merger In March 2011. In – which is already embroiled announced plans to take over November 2011. AT&T.gassot@idate. The DoJ will not. such as Dish. Other when Verizon Wireless bought sought to amend them – saying remaining options include a Alltel in 2008 (for $28. 07 Dec.500 1. however. including selling off a alliance with cable companies. the US putting an end to the deal. frequencies.

172 Country Profiles DigiWorld 2012 .

Country Profiles 173 .idate.

8 27.4 5.4 10.0% 2011 19.8% 18.0 12.6 .3 32.1 2.0% 65.7 12.1 13.4 2009 64.8 8.1 29.9 30.3 40.0 71.5 104.3 57.6 2009 41.9 5.0 89.8% 19.6 1 889.5 3.5 33.4 1 931.6% 14.2% 24.8 34.9% 17.7% 15.4 2.9 20.2% 61.2 12.6 2.7 1 931.1 37.1% 68.2 11.7% 21.5 3.4% 2010 21.4 9.2 12.4 2.6% 13.8 7.0 52.6 97.5 60.6 2010 65.2 20.5 94.France Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 41.8% 58.3 1 987.5% 174 DigiWorld 2012 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 64.5 25.0% 2009 24.5 6.2 51.1 79.6% 21.6 27.9 26.0 99.2 26.8% 16.5% 22.7 20.6 Country Profiles Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 26.4 2011 65.4 2011 40.0 11.9 93.0 2.4% 26.1 10.1 3.4 20.8 2010 41.6 6.

0% 2011 42.3 13.6 4.9% 23.1 22.7 2 568.2 4.8 32.5 4.3 13.6 14.3% 26.0% 14.9 12.8 27.1 13.5 65.7 62.6 3.0 22.3% 2009 49.3 13.4 2011 48.3% 25.6 60.0 4.6 33.5 65.6 37.2 72.8% 27.1 2009 49.7 2 374.1% 2010 45.8 2011 81.7% 24.1% 175 www.7 4.8 2009 81.2 Country Profiles .5 31.idate.6 64.0 37.Germany Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 51.7 52.7 12.0% 107.1% 18.1 37.5% 113.5 12.5 23.7% 108.6 4.8 133.2 13.5 2010 81.8 3.9 4.2 15.2 2010 49.8 37.7 56.1 138.6 4.4 62.7 2 473.7% 27.3 61.1 4.3 132.5 Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 52.2 130.9 50.1% 24.8 4.7% 22.9% 23.2 12.3 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 82.0% 108.5 37.8 13.7 2 476.9% 23.

0% 20.3 5.2 145.6 2.0 70.1 5.3 1 589.5 30.6 4.2 1.2% 6.7 24.6% 2011 16.3 22.5% 91.4% 5.1 Country Profiles Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 20.4 8.8 27.2 1 567.2 9.4 3.7 2009 29.8 77.3 20.0 1 519.8% 5.1 23.1 8.0 5.1 15.1% 176 DigiWorld 2012 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 60.0% 6.3 15.8% 2010 17.9 1.1 1.4 14.8% 12.Italy Marché (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 30.9 21.7 4.4 2.5 62.2 1.7 2010 60.8 8.8 2011 61.5 5.8 2009 60.0 24.9% 14.3% 90.3 10.3 18.9 2010 28.9 2.2 25.6 27.4 84.7% 11.6 9.9 24.6 149.8% 2009 18.8 150.4 22.2 15.1% 90.9 9.2 1 548.6 150.1% 12.0 9.0 33.4% 13.7 4.7% 17.6% 88.9 2011 28.5 24.7% 18.6 4.6 29.4 .

0 31.8 0.0 51.7 51.8% 22.8 19.9 2011 24.8 42.2 1 026.2% 187.7 51.2 6.3 2011 138.4 964.6 0.0% 177 www.5 155.6% 25.8 6.4% 207.5 2009 21.6% 2011 44.idate.4 51.6 4.9 1 331.8 44.4% 17.2 16.0% 31.5% 22.5 0.2 25.1% 216.6 1.1 6.7 1 117.1 0.9 148.7 2010 22.3% 19.1 Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 45.7% 228.3 2009 140.4 32.8 133.5% 14.1 3.0 3.5% 21.0% 28.5% 9.6 3.9 34.5 1.0 2.4 60.8 3.9 0.6% 9.3 6.1 13.7 0.6 55.4 0.1 48.6 1.9 10.7 164.4 2010 139.4 1.4 32.3 13.5 14.0 Country Profiles .1 16.7% 2010 44.3 6.8% 13.5 1.8 32.1 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 140.0 2.Russia Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 21.0 2.1% 2009 45.

4 1.8% 56.3 3.2 23.9% 4.1 5.7 6.9 84.8 14.4% 9.4 Country Profiles Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 20.5 41.7 6.9 13.5% 16.9 4.4 2010 24.6 22.4 2009 25.2 2.1% 2011 19.0 5.6 1 087.9% 4.2 70.0% 178 DigiWorld 2012 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 45.8 5.9 122.9 5.3 1.7% 58.3 113.6 2011 46.5 .5 16.8 118.8 21.8 2.9% 16.0 1.6 2.2 1.4 4.1% 2009 20.3 98.4% 11.1 43.5 5.4 4.2% 4.5% 52.8% 13.4 2011 23.4 1 053.9 4.7 1.3 25.8 16.9% 4.9 15.9 42.3% 54.5 2.3% 10.4 26.1 19.9 1 088.5% 11.6 1 062.4% 2010 19.3 16.Spain Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 26.9 2010 46.6 5.6 100.9 14.2 25.4 44.1 2009 46.8% 9.7 125.7 15.9 1.2 1.2 26.

9 3.8 11.2 3.5% 2010 33.1% 179 www.1 4.4% 24.2 19.4 7.1 3.6 12.0% 22.9 33.3% 14.1% 2011 33.7 89.1 5.4 99.8 12.6 7.7 25.5 2009 62.1% 17.4 52.idate.7 131.2 4.5 1 627.6 25.9% 20.2 3.3 28.9 Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 34.4 53.3 12.5 2010 62.3% 13.1 52.2 12.7 13.1 13.8% 18.4 2010 38.3 19.5% 13.1 94.1% 2009 33.0 2009 38.3 25.United Kingdom Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 61.1% 12.1 131.0 25.3 19.2 7.6 12.0% 25.5 54.2 55.1% 81.6 1 787.2 3.8% 82.7% 19.1 5.0 54.0 2011 62.2 7.1 4.7 131.2 18.6% 82.7 5.5 Country Profiles .6 53.3 127.1 98.5 1 686.6 2011 37.1 5.6 31.6 1 698.8 30.5% 78.7 50.7% 25.

8 21.0 0.7% 9.1 52.5 16.5% 2011 42.6 23.6 76.9 1 367.1% 2009 41.2 4.3 7.4 53.8 3.5 15.5% 11.1 0.3 2011 203.6 18.9 Country Profiles Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 41.4 10.6 0.9 100.1 7.1 20.3 6.1% 31.0% 234.3 7.7 17.7 13.3 2011 48.9% 12.6 0.2 2010 46.3 49.7% 180 DigiWorld 2012 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 196.1% 2010 42.6 19.8% 7.5 14.8 5.0 87.2 6.1 69.5 5.8 5.5 20.6 .7 6.4% 16.6% 37.2 6.8 22.Brazil Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 43.0 34.8 1 301.5 7.1 20.0 59.3 1 738.2 1 577.9% 174.5 5.9% 202.2 2009 198.5 18.9% 150.4 6.3 12.0 2010 201.8 115.7 50.9% 13.9 18.6 2009 45.7% 19.9 39.7% 9.5 24.0% 6.2 21.7% 17.2 5.2 9.

9 98.7 24.1 120.0 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 304.0 114.0 83.5 26.7 2009 234.6 69.4 0.0% 318.8 2009 307.3% 84.4 75.9 111.6 93.3% 101.5 88.0% 302.8% 103.3% 75.3% 101.2 71.8 89.0 126.6 Country Profiles .9% 2011 109.6 69.1 53.8% 101.3% 181 www.2 52.7 10 790.1 64.5 89.2 38.2 88.8 86.9 27.4 112.7 26.3 114.0 41.2 2011 311.United States Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 236.0% 80.3% 271.0% 2010 117.4 38.0 2010 237.0 50.8 112.9 11 374.2 115.8 104.9% 87.0 Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 141.9 10 968.5 2010 308.2 0.4 2011 239.4% 99.9% 100.0 65.1 115.9 77.5 10 524.4 42.3 102.0% 95.4 44.9 89.4 0.4 115.4% 285.7 48.idate.0 35.2 103.9% 2009 127.2% 82.8 87.7 0.3 60.0 46.4 42.

2 71.1 .8% 2010 294.9% 994.4 6.8 43.5% 195.5% 55.3 9.3% 162.9 2011 1 336.6 4 607.5 5.4% 207.7% 747.1% 859.1 12.0 52.8 54.4 56.1 374.1 377.6 14.2 48.8 25.1 10.4 63.1 7.7 14.6 5.7 23.7 51.1 3 959.0 2011 96.4 22.China Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 80.6 5.5 5 297.4 9.5 7.4% 152.4 11.7% 83.7% 157.4 Country Profiles Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 340.9% 2009 313.3 24.5 2010 1 330.3 2009 1 323.8 12.8 14.6 19.7% 93.6 376.3% 2011 279.9 57.6 3 665.9% 641.1 2009 84.4% 182 DigiWorld 2012 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 1 317.7 16.5 2010 89.5% 103.3 13.7 379.4 6.3 74.2 9.8% 179.0 41.8 10.8% 125.6 4.6 33.0 8.0 4.6% 126.0 64.8 20.7 10.4 47.

1 2.2 2.1 3.9 3.0 1.9 10.3 73.idate.1 22.8% 183 www.8 8.5 29.2 5.0 78.9 136.4 2011 1 189.1 3.0 1.India Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 16.4 0.6 2.0 1 444.7 4.7 3.3% 346.9 30.1% 20.7 5.4% 7.2 64.0 1 011.4 7.3 6.1 35.9% 117.2% 126.0 899.1% 2009 37.0% 752.1 82.6 129.5% 94.7 85.1% 10.9 1.6% 31.5 5.4 2009 1 156.0 2.1 45.9 0.9 2011 22.2 2010 1 173.0 1 240.0 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 1 140.2% 525.7 0.8 78.7 Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 37.4 4.7% 106.4% 5.4 2009 17.7 0.2 148.6% 53.1% 13.4 3.2 3.8 16.9 0.1 142.4% 41.9% 2010 35.2 9.2 2010 19.9 0.0 13.9 11.8% 929.1 Country Profiles .2% 2011 33.1 3.8 0.2 1.2 6.

9 2011 106.6 11.9 27.1 22.Japan Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 111.5 16.8 15.8% 30.8 50.1 2010 106.3 4 338.6 56.2 61.1 26.5 4 038.3% 124.5 51.8 42.8 2010 127.5% 34.3 32.4 25.2 56.3% 2010 46.4% 184 DigiWorld 2012 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 127.9% 110.8 64.8% 34.2% 37.2 57.7 51.5 31.2 12.8% 28.9% 2011 42.7 11.0 4 050.1 23.8 .8 56.4 Country Profiles Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 54.9% 105.7 33.6 14.6% 31.8 26.7 58.4 2009 127.2 36.4% 32.2% 117.7 24.8 26.3 97.5 4 121.0 33.2 62.6 72.9% 2009 49.0 60.6% 27.9 15.4 5.9 5.4% 32.7% 31.7 38.4 11.9% 31.9 77.5 33.6 23.6 86.7 27.6% 39.6 2011 127.8 82.2 26.1 53.3 5.1 91.6 51.0 2009 107.5 5.9 24.

1 2.0 37.7 1.8 0.9 0.3 37.6 Country Profiles .8 104.5 1.9 4.0% 17.4% 17.1% 45.0 2011 48.5 1.6 2010 48.4 4.3 0.4 2009 48.8% 16.South Korea Markets (billion €) Telecom services Fixed telephony Internet & data Mobile services TV services Public fundings Advertising revenues Subscription fees 2008 19.7 13.2 822.idate.5 4.7 695.5 5.9 1.2 1.8 0.5 32.0 Subscribers (millions) Fixed telephone lines as a % of inhabitants Cellular customers as a % of inhabitants Broadband subscribers as a % of inhabitants Pay-TV homes as a % of TV homes Digital TV homes as a % of TV homes 2008 21.9 6.6 2010 19.3 107.6 4.9 1.3 1.6 2.5 17.9 11.2 0.4 2010 18.5 2.6 18.0% 15.3 0.0 4.8 45.8 4.9 4.4 1.3% 18.9 2011 19.4% 16.0 9.6 94.5 2009 19.7 36.9 1.0 766.5 2011 17.2% 52.8 18.3 2009 19.9 98.9% 47.3 33.2 2.6% 50.9 8.1 1.2 35.5 185 www.9 Macro-economic data Population (million inhabitants) TV homes (millions) GDP (billion €) 2008 48.6 13.7% 15.5 670.9 4.4 17.9 40.3% 15.0 1.5 1.6 12.7 1.

186 Glossary DigiWorld 2012 Glossary . Glossary .China Consumer to Consumer Capital Expenditure Consumer Electronics Cost Per Click Consumer Relationship Management Digital Media Box Digital Subscriber Line Digital Terrestrial Television Digital Versatile Disc Digital Video Recorder Frequency Division Duplex Frequency Modulation File Transfer Protocol Fiber To The Building Fiber To The Last Amplifier Fiber To The Home Fiber To The Node Fiber To The x (Home.3G 4G ADSL AM API ARPU AWS B2B B2C BRIC C2C CAPEX CE CPC CRM DMB DSL DTT DVD DVR FDD FM FTP FTTB FTTH FTTLA FTTN FTTx 3rd (cellular) Generation 4th (cellular) Generation Asymetrical Digital Subscriber Line Amplitude Modulation Application Programming Interface Average Revenue Per User Advanced Wireless Services Business to Business Business to Consumer Brazil .India . Premises.Long Term Evolution Technology/Media/Telecommunication TV set Ultra-Fast Broadband User Generated Content Ultra High Frequency Universal Mobile Telecommunication System Ubiquitous Sensor Network Very High Speed Digital Subscriber Line Very High Frequency Video on Demand Voice over IP Voice over Long Term Evolution Worldwide interoperability for Microwave Access World Radio Conference Very High Speed Digital Subscriber Line Very High Frequency Video on Demand Voice over IP Voice over Long Term Evolution Worldwide interoperability for Microwave Access World Radio Conference 187 www. Curb) GDP Gross Domestic Product GPS Global Positioning System HD High Definition HDTV High Definition Television HSDP High Speed Downlink Packet HSPA High Speed Packet Access HTML5 HyperText Markup Language 5 IaaS Infrastructure as a Service ICT Information and Communication Technologies IMT-Advanced International Mobile Telecommunications-Advanced IoT Internet of Things IP Internet Protocol IPO Initial Public Offering IPTV Internet Protocol Television IPv6 Internet Protocol version 6 ISP Internet Service Provider IT Information Technology LCD Liquid Crystal Display LED Light-Emitting Diode LTE Long Term Evolution M2M Machine to Machine MHEG-5 IC MHP MP3 MVNO NFC NGA OPEX OS OTT P2P PaaS PC PPV PTN PVR RFID RSPP SaaS SD SIM SLA SMEs SMS STB SVOD TDD TD-LTE TMT TV UFB UGC UHF UMTS USN VDSL VHF VOD VoIP VoLTE WiMAX WRC VDSL VHF VOD VoIP VoLTE WiMAX WRC Multimedia and Hypermedia Experts Group-5 Interaction Channel Multimedia Home Platform MPEG Audio Layer 3 Mobile Virtual Network Operator Near Field Communication Next Generation Access Operating Expenditure Operating System Over-The-Top Peer-to-Peer Platform as a Service Personal Computer Pay-Per-View Packet Transport Network Personal Video Recorder Radio Frequency Identification Radio spectrum Policy Plan Software as a Service Standard Definition Subscriber Identity Module Service Level Agreement Small and Medium Enterprises Short Message Service Set Top Box Subscription Video On Demand Time Division Duplex Time Division .Russia .idate.

188 Index DigiWorld 2012 Index .

4 Comcast: Chron.3 Belgacom: Chron. April. 4.7. Intro. Chap. 5. 6 Adtran: Chron.6 AMD: 2. April.. Chap. Barnes & Nobles: 5.6 DirecTV: 4. 1. Aug..7. Dec.7 DoubleClick: Intro. CenturyLink: Chron.5 Clearwell Systems: Chron. April. Intro. 4 Atheros: Chron. July.10. 4.. Intro.4.3 Alestra: Chron... Feb.. Jan. Bharti Airtel: Chron.. Feb.. Bouygues Telecom: Chron. July. General Intro. Jan. Chap. Sept.. EADS: Chron. Sept. 5. July Alltel: Chron. Aug.. EMI: Chron.5. July. 5. 6. Oct. Dec. May. Jan. 5. Chap. Sept. April. 5. 6.. Chap. Jan. June. 2. Bolloré: Chron. Aug. March Alibaba: Chron. General Intro.. BSkyB: Chron. 5. Sept. Jan. 4. Dec.2 Boxer TV: Chron..9 Delicious: Chron. April. General Intro. 5.8. Jan. Feb. Apax Partners: Chron.5 America Móvil: Chron.. April Europa Corp. 5. 2. Index .10 Agility: Chron. 4. Feb. Feb. Nov. April Etisalat: Chron.. Chap. 4.7 Congo Chine Telecom: Chron. Dec. Sept.3. Cisco: 2. April Dell: Chron.. General Intro.3: Chron.. 6. Chap. May Clearwire: Chron. Aug. Autonomy: Chron. Oct. Dailymotion: Chron. April. Oct. April Bing: Chron. Berkshire Hathaway: Chron.. May. July AOL: Chron. Jan. Chap. 5. Alcatel-Lucent: Chron.. Jan. July BT: Chron. Chap. 6. AdMeld: Chron. Nov.. May. Jan. June. March. Nov.2 ARD: 5.1.. Dec. 360Buy: 6. 4 Cablevision: Chron. June.. 6. Sept. Nov. Feb. April. Sept. Atos: Chron. Cable & Wireless: Intro.8... 6.7 Disney: 5.3 ESPN: 5. Feb.. Oct. Dec.2. Aug. April China Mobile: Chron. July BUCD bvba: Chron. Intro. 6. Aug. Nov. 5. AirPlus: Chron. Dec. June Canal+: Chron.2. April.2 Astra: Chron.4. Aug.. General Intro. 5. Aug. Nov. March. Cosmote: Chron. 4.1 Daum: Chron. 6.4.. Chap..4.2 Bebo: 6. May. Intro. March Airbnb: Chron.. Baidu: Chron. June Ericsson: Chron.: Intro. 4 China Unicom: Chron. Aug. 5 Exxon Mobil: Chron.idate. Jan. June AdMob: Intro.. July. Dec. Aug. July. BMG: Chron. 5.. Broadcom: Chron.6 Electronic Arts: Chron. April Deezer: Chron.. June. Dec.7 Dish Network / Echostar: Chron. Sept. Sept. Intro.6 ABC: 5. Jan. Nov. Nov. March. 5. Buyster: Chron.. April.... Dec. General Intro. Aug. May. Sept.5 Deutsche Telekom: Chron.2 Adenyo: Chron. Feb.. Chap. Intro. June. April. Apple: Chron. March. March. Oct. 6. 189 www. Chap. March Astrium: Chron. American Express: Chron.8 Emitel: Chron. Amazon: Chron.2 Essar: Chron. eBay: Chron. Bright House Networks: Chron.3.2. May. Jan. May. 6. Intro.2 EMC: Chron. 1.8. AFP: 5.. 6 DreamWorks: Chron.3 Boxee: 5. 2. July. 5. 4. 5. 2.7 BBC: Chron. 1.. Oct. AT&T: Chron. April...

Kobo: Chron...5 Gemalto: Chron.. Intro. Microsoft: Chron. May.. Intro. 6.5. April MediaFLO: Chron. Aug. 6. Jan. Jan. April Google: Chron. July. March. 6. Feb. Lenovo: 2. April LG: 4. Maroc Telecom: Chron. Sept.4. 1. March Hutchison Whampoa: Chron. July.4 LimeWire: Chron. Chap. Fnac: 5. Aug. Chap.2 Free: Chron. Hulu: 4...5 HTC: Chron. March. July... July G Cluster: 5. Jan. April Leap Wireless: Chron. Nov. Feb. Nov.. MetroPCS Communications: Chron. Oct. Aug. Free Mobile: Chron. Index Goviral: Chron. Chap. Nov. 4..7 Force10 Networks: Chron.5. March Impulse Technology: Chron.5. Intro. MOG: Chron.. Aug... Jan. 4. Genesys: Chron. July HP: Chron. Jan.. Dec. Oct. Nov.4. 5. March..1.. 6. Chap.. 2. 6 Lonely Planet: 5. Nov. Feb. Nov. June. 5.5 Level 3: Chron. Sept. Nov.. 6. 6 France Televisions: 5. Korek Telecom: Chron.. iTunes: Chron... March.7.. 6.. General Intro. 6. Jan.4. April.. March. April Ingenico: Chron. 2. Jan. April Jambool: Chron.7 LoveFilm: Chron.Facebook: Chron. Chap. General Intro. General Intro. General Intro.1 Hutchison 3G: Chron. Sept.5 LIAA: Chron.. 2.3. Dec. June.. April ITI: Chron. 6.. May LinkedIn: Chron..4....8. July.7.1. Jan.2.5 Interclick: Chron. March Insight Communications: Chron. Dec. May Fridge: Chron.. Dec.. 6. May. July. Aug. July Hitachi: Chron. Groupon: Chron... Aug. 5. June. Chap. Chap. Nov. Freescale: Chron. Intro. General Intro. Aug. May. Iron Mountain: Chron.. 6.7. Hyves: 6. Feb.2. March. July Harlequin: 5. May. Sept. 6. 1. Sept.. Jan. 4. May. Dec. May LightSquared: Chron. Intel: Chron. 6.. Aug. 6. Feb. Oct.7 HBO: Chron. July Infor: Chron. April. June. Huawei: Chron. May..6 Kodak: Chron. Intro. La Poste Mobile: Chron.10. GestureTek: Chron.. 1. Jan.5 190 DigiWorld 2012 . 6. 5. March Gaikai: 5. Aug. Nov. Hutchison Telephone Company: Chron.5. Intro.. July. April. General Electric: Chron. Iusacell: Chron.. Feb. July Fox: 5. June IBM: Chron.4.3. Landis+Gyr: Chron. Dec. May. Dec. Mixi: 6..3 i4i: Chron. 2. May Lawson: Chron.3 Huffington Post: Chron.2.. Aug. Intro. May ITA: Chron. Feb. Oct.3 Mobistar: Chron.. 5. Sept. 6 Hachette Livre: Chron.. Sept.6 FiberCo: Chron. Feb. Chap.. March Kosmix: Chron. Intro. Intro. March Kingdom Holding: Chron. Nov. 6. July Filmmaster: Chron. Chap. Chap. May Lagardère: Chron. Nov. Jan. June. April KPN: Chron. Sept. Sept. March. General Intro. Oct. Sept. July Global Crossing: Chron. May. June. Aug. 5. 5. 2. 6. M6: Chron.1 MinDigTV: Chron. Dec. Intro. Dec..5 Illiad: Chron. Dec.2 France Telecom / Orange: Chron.5 G4S Utility Services: Chron. 4 Megaupload: General Intro.. Oct. Nov. 4. 4. Nov. Hotfile: Chron.

Intro. National Broadband Network: Chron.idate. RIM: Chron.Motorola: Chron. Jan. May Palm: 4.. April.2 NetLogic: Chron. NFC: Chron. 5. Motricity: Chron. June.2 191 www. March Sony: Chron.: Chron.10. April. March OFTA: Chron. June Nokia: Chron. March.5 Polsat: Chron. Chap. July Portugal Telecom: Chron.. News Corp. Dec. May. 6 Rai: 5.. Napster: Index Samsung Electronics: Chron. Dec. 5.5 Pandora: Chron. April. Jan. Sept. June. 6. 2.7.. March Onlive: 5..6 Playcast Media: 5. 2 NTT DOCOMO: 4. Jan. April Qatar Holding: Chron. Intro. Chap.2 PushLife: Chron. Jan. Chap. April.. 6. Aug. Jan. Dec.6 Skype: Chron. Chap. Permira: Chron. Nov. April Orkut: 6. Sept. Chap. General Intro. PittPatt: Chron.. May. Aug.. General Intro. Sept. Qik: Chron. Oct. Seagate Technology: Chron.5 Ovi: Chron. 5..5. April NBA: 5. PopCap Games: Chron. Feb. Oct..2 Netflix: Chron. Quattro Wireless: Intro..3 OTE: Chron. July. 5. PriceMinister: Chron. June. Nov. 2. April. Sharp: Chron. Oct. June... Aug.. April. Jan. 5. Qualcomm: Chron. April Sega: Chron. July.6 ProSieben: Chron.. March Multichoice: Chron. April.. Aug.. Sept. Aug.2 Rakuten: Chron. March Snaptu: Chron. 5.5 Opera Software: Chron.. Nov.5 Orascom: Chron.2 Roku: 5. Jan.6 Rdio: Chron. July. Solutionpark: Chron. March... Rhapsody: Chron.. Oct. 6 Nokia Siemens Networks (NSN): Chron. Intro.. Nov. Dec. June Salesforce. Dec. May Ofcom: 6. Nov.2 Sanom: Chron.2 SageTV: Chron. March Oracle: Chron. Aug. Chap.2 NBC Universal: Chron.. General Intro.. General Intro. . Sept. May Skyrock: 6. Jan. Sept. July Siemens: Chron.2 RTVE: 5. Feb. 4. 4.. July. Dec. March. May Reuters: Chron.. 4. Dec..9 Paypal: Chron. Sept. Oct. Jan. Jan.5. July Nextel: Chron. Feb. July Play Holdings: 6.3 Nortel: Chron. June SFR: Chron. Feb. Sept.. General Intro.2 Nintendo: Chron. June ShowTime: Chron.3 Novell: Chron. 6. July. General Intro.6 Nvidia: Chron. Otoy: 5. Motorola Mobility: Chron. April. National Semiconductor: Chron. Sept. March Softbank: Chron. 4.5 Samsung: Chron.. Intro. Philips: Chron.. 5. July. June MTS: Chron. Aug. Sky: 5.3 SmarTone-Vodafone: Chron. 6. Renren: Chron. Dec. April NHL: 5... 4. 5. April MTN Cameroun: Chron. April NTT: Intro.2 RTL: 5. April Savvis: Chron. General Intro. 4. Sept. Nov. April. April Scarlet Extended: Chron. MTN: Chron.5.

Dec.4 Viacom: Chron. Yahoo!: Chron... Oct... March Telecom Italia: Chron. Twitter: Chron. 4... Sept.8 Where: Chron.2. Oct. Spotify: Chron. 6. April Starz: Chron. 4.2 ZTE: Chron.6 Telefónica: Chron.2 T-Mobile: Chron. 6. Vodafone: Chron. April. Jan. Chap. 5.7 Steam: Intro. Chap. TiVo: Chron. May. General Intro.. June Sony-Ericsson: Chron. Jan. Aug.3 Index Tencent: Chron. 5. Dec..4 Telmex: Chron.. May.3 Universal Music: Chron.. June. 4. Swisscom: Chron. Nov. Nov.. Nov. Telcel: Chron. June. 5.. April.. Chap. March Symantec: Chron. 5.. March. Sept... June TPV Technologies: Chron. April TeliaSonera: Chron. TPSA: Chron. Feb. Time Warner Cable: Chron. 5. May. 5. April Vivendi: Chron.. 5 Sunrise: Chron.. Jan. April. 5. April. Dec..4 YouTube: Chron. Nov..8 Verizon: Chron. Aug. 6.6 T-Systems: Chron. 6.. 5.. Sept. Televisa: Chron. Sept. Jan. 5. April TF1: Chron. Intro. Dec. General Intro.6 VUDU: 6.8 Sony Pictures: Chron. General Intro. May.9 Sprint: Chron.10. Sept. April. TVN: Chron. July. June. April Wind: Chron.. Sept... July.. Nov. June Vimpelcom: Chron. 5. 5. March.. Dec. Telstra: 5. June. 2.8 Warner: Chron. General Intro. Nov. July Texas Instruments: Chron. March. April Virgin Media: Chron.. Chap. 5. May Taobao: 6.. 4. Jan. July. Aug. 6. April. Aug. May. Intro. Chap..2 Wal-Mart: Chron. Aug. May Yota: Intro. Aug. Telenor: Chron. Aug. Sept.. April..6 Verizon Wireless: Chron. Chap. Dec. Sept. Dec. 2. July. Oct..1 Yandex: Chron. Chap. General Intro. 5. July.. March. April. 5 StudioCanal: Intro. 6. March..5 Sony Music: Chron. April ZDF: 5. Sept. Intro. Jan..6 Toshiba: Chron.5. Feb. Sept. April. Aug.. Intro.3 Zynga: Chron. Tradoria: Chron. 6.4 Square: Chron. Aug...6 Tecteo: Chron.3 192 DigiWorld 2012 . Chap. Aug..2. Aug. 5. Intro. July. 4. Jan.8. 4. Visa: Chron. 6. March.. Sept. Telenet: Chron. 4. 6.. 5.8 Vizada: Chron. July.1 Zain: Chron.Sony Computer Entertainment: 5. General Intro. Nov. 4. Nov.3. Feb. Sept. .193 www. . thanks to the skills of its teams of specialized analysts. • IDATE Research. Our multi-disciplinary teams of economists and engineers established their credibility and independence through the hundreds of research and consulting assignments they perform every year on behalf of top industry players and public authorities. Internet and media sectors – through its comprehensive collection of market reports and market watch services. a European forum open on the world. with the support of close to 40 member companies – which include many of the digital economy’s most influential players – the newly rebranded DigiWorld Institute has entered into a new stage of its development. drawing on the knowledge of outside experts and our own teams. London and Brussels. Internet and media markets. Members have the opportunity to participate in think tanks on the core issues that will shape the industry’s future. www. collect relevant data and provide benchmark analyses on market developments and innovations in the telecom. time-tested analysis and consultancy solutions. such as the DigiWorld Summit.SMART THINKING THE DIGITAL ECONOMY Founded in 1977. • IDATE Consulting. an independent observatory whose task is to keep a close and continual watch on digital world industries. Now. IDATE has gained a reputation as a leader in tracking telecom. The DigiWorld Institute will take existing IDATE initiatives. structured around three main areas of activity: • DigiWorld Institute. to the next level. the DigiWorld Yearbook and the monthly clubs in Paris.

Internet and media sectors. More than just a library of publications.TRACKING GLOBAL MARKETS AND STRATEGIES Our 2012 catalogue of market reports is a natural extension of the work performed by our teams of dedicated . Report formats designed to provide readers with complete information on their markets: Market & Data Reports – Market analysis (report in PDF + Excel database) Innovation Reports – In-depth analysis of key innovations Watch Services – Continuous market tracking Networks & Equipment Netx Gen Devices VDSL2 Femtocells Telcos Backhaul Strategies LTE Telcos Strategies Mobile Radio Spectrum Mobile VoIP Mobile Payment Mobile Video Broadband/FTTx .idate-research. and our ongoing investment in a system of databases and market/corporate strategy watch solutions. it represents a concrete manifestation of our drive to create a unique way to understand and keep up with developments in the telecom.Satellite FTTx World Survey Ultra-Broadband via Satellite Satellite Markets Satellite M2M Internet Services Net Neutrality OTT video & CDN markets LBS Cloud & Big Data Word Internet Services Market TV & Video Next Gen TV: Scenario 2020 Digital Terrestrial Television Social Video Telcos TV Strategies Cable & IPTV face to cord-cutting World Television Market Telecom Strategies Future Telecom: Scenario 2020 Changes in Offers & Bundles Vertical Markets Pricing Strategies Restoring Margin World Telecom Services Market Digital Home & Entertainment In-game Advertising Market Cloud Gaming Appstores Games Digital Home eBook World Video Game Market ICT business markets Smart Cities M2M Open Data Serious Games SME Survey Smartphones Survey Watch Services World FTTx Markets World LTE Markets Connected TV Monitoring www.

institutional or industry personalities. openness and trust No. 82 (2nd Q. 88 (4th Q.) • Net Neutrality: Act II No. industrial organization and corporate strategy issues in the telecommunications. IT and media .) • ICTs and Health No. 84 (4th Q. along with short papers (“Features”) offering factual analyses of recent developments. 87 (3rd Q.) • Privacy.) • A Single EU Market for eCommunications? No.) To be published in 2012: • Cloud ecosystem and platforms competition . 86 (2nd Q. focusing on the industry’s key issues and offering a forum for the finest socio-economic analysis of the telecom. 81 (1st Q. IT and media sectors.No. each issue delivers a thematic Dossier that includes papers and interviews with academic. Also included in each volume is a selection of articles that typically cover issues related to innovations in the sector.) • Internet of things: new challenges for research . 85 (1st Q.THE DIGITAL ECONOMY AS SEEN BY THE WORLD’S TOP ACADEMICS COMMUNICATIONS & STRATEGIES is a quarterly review devoted to exploring public policy.No.) • Development of ICT in Africa No. Published in English. and a book review or two. and managed by an editorial board following a careful selection process by a team of reviewers.) www.comstrat. COMMUNICATIONS & STRATEGIES has the CNRS seal of approval and is listed in a host of scientific databases around the globe. Published in 2011: • The Economics of Cybersecurity No. A veritable reference for analysis of convergence phenomena. COMMUNICATIONS & STRATEGIES has been making its mark as an independent European publication. Since its creation in 1991. 83 (3rd Q.

Montpellier Copyright May 2012 Printed on PEFC-cerified paper. . by an ISO 14001-certified printer now performing its carbon audit. using vegetable-based ink.Printed in April 2012 Imprimerie Pure Impression.

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