Digital First: ICT players vs. the new disrupters


The place to be in Europe, to understand upcoming disruptions and their impact on telecom, IT, Internet and media markets

From 17 to 19 November 2015, the 37th annual DigiWorld Summit will bring together 150 top-tier speakers to Montpellier to share their views with the more than 1,200 participants from over 30 countries. French Tech will also be in the spotlight during the 2nd annual DigiWorld Week and at the inaugural DigiWorld Awards.

Under the banner of “Digital First” IDATE will host debates on the core trends shaping telecom, IT, Internet and media markets, with the knowledge that digital technology is entering a new stage in its ubiquity, becoming the vehicle of a major overhaul in many sectors: energy, insurance, finance, health, automotive, travel and tourism… “But,” says IDATE CEO, Yves Gassot, “this digital verticalisation also represents a new challenge for IT, telecoms, Internet and media industry stakeholders. They may see new growth opportunities, but also challenges as innovation cycles are accelerating, as they consider the shifting outlines of their business and contend with new digital intermediaries.”

This new stage in the digital transformation is being spurred by ubiquitous wireline and wireless connectivity, the economies of scale of cloud computing, and the power of real time data processing algorithms. But it is being amplified by the rise of connected objects, and the promises of 3D printing, of artificial intelligence and the collaborative economy. A profound transformation of the economy that is already materialising in changes to production and distribution infrastructures, in the accelerated shift from product to service and the profusion of channels for interaction with end users.

• What do vertical companies (media groups and TV networks, insurance, automotive, travel, retail, etc.) want from digital industry players (telcos, OTT, IT)?

• How should digital industry players position themselves with respect to the digital transformation in vertical markets?

• How can the Web’s top destination platforms cohabitate with the vertical markets’ new digital champions?

• This year’s Guest Country: China. Can China combine the power of its recently acquired positions in Internet and telecom markets with its manufacturing ambitions?

2015 DigiWorld Summit Programme


Plenary sessions

Analysis and debates between veteran industry players and disruptive start-ups, with insights from IDATE’s finest economists and analysts:

Digital channels
A new chapter in the platform wars?

Digital Infrastructure
From ultra smart networks to predictive analytics?

Digital Product
From goods to services

Digital Regulation
OTT rules?

Digital Europe, Digital World
Closing session

Specialty forums

In-depth seminars with the industry’s top expertsConnected Things Forum

Smart City Forum

Future Networks

TV & Video Distribution Forum

Future Digital Economy Forum

Game Summit

DigiWorld Week (14 – 22 November 2015): IDATE expands on the two days of the DigiWorld Summit, and plays host to an exciting event-filled week. Delving deeper into the issues and shaking up ideas: symposiums, workshops, hackathons, exhibitions, festivals, master classes, …

DigiWorld Awards: in partnership with Business France and French Tech, IDATE will be hosting the first annual DigiWorld Awards, recognising French digital start-ups (Equipment and devices, Networks and telecoms, Internet services and application, M2M and IoT…), created abroad. Awards will be in four categories: Africa and the Middle East – The Americas – Asia – Europe

The DigiWorld Summit, is organised under the patronage of the French Ministry of the Economy, Industry and Digital Affairs, the Région Languedoc Roussillon and Montpellier Métropole, with the support of DigiWorld Institute member companies.

More informations about IDATE's expertise and events :

www.idate.org      www.digiworldsummit.com      www.digiworldweek.com


DigiWorld Yearbook 2015, the great digital shake-up

IDATE, Europe’s premier digital economy think tank, uncovers major disruptions in the telecom, Internet and TV markets

Over the past 15 years, IDATE’s DigiWorld Yearbook has become a vital source of information for industry players, delivering analysis of the developments that have shaped the telecoms, Internet and media markets during the year gone by, identifying core global trends and providing snapshots of what lies ahead. The purpose and scope of the Yearbook has expanded as digital technologies have become an increasingly central component in the different sectors’ transformation: connected cars, financial services, insurance, healthcare, retail sales, the collaborative economy…

IDATE Chairman, François Barrault, is delighted to be celebrating this 15th edition, noting that, “we have entered into a new stage in the digital transformation over the past few months. Today, new intermediaries are coming to shake up the status quo, many of them from outside the industry, taking advantage of new technologies and new consumer cultural behaviour to revolutionise the value chain. Everybody knows how Uber has disrupted the taxi business, and Airbnb the hotel market. But finance, insurance, health and automotive industry leaders have all had to sit up to the risk of digital innovations shaking up their ecosystem, and forcing them to depend on external, unavoidable platforms.” This echoes the central theme of the upcoming DigiWorld Summit (17 – 19 November 2015), as IDATE’s annual conference will be held this year under the banner of: “Digital First”.

“For we here at IDATE,” says CEO, Yves Gassot, “whose business it is to wade through the latest market developments on a daily basis, the process of looking back over the year’s events only confirmed the significance of certain game changers such as mobility, the cloud, the Internet of Things, big data and social media. Some would also add 3D printing and artificial intelligence to the list.”

Scorecard for the digital economy in 2015: back on a growth path, but Europe still lagging behind

After the recovery announced in 2013, DigiWorld markets confirmed a stronger rate of growth in 2014, generating 3,700 billion euros. All segments combined, growth increased to 4.4%, which is 0.5 points more than the year before. These figures are still below those being reported for the economy as a whole: global GDP rose by 5.9% in current value in 2014, compared to 5.3% in 2013. This global recovery will become stronger still in 2015, with DigiWorld markets generating 3,900 billion euros, and climbing to 4,400 billion in 2018.
• This improvement can of course be attributed to Internet services which continue to boast more than 20% annual growth and, despite still accounting for only a fraction of the market, are helping to sustain the whole (growing from 275 billion EUR in 2014 to 475 billion in 2018);
• But also to stronger performances from a large number of more traditional segments – which are typically bundled together as core DigiWorld markets, i.e. telecom and IT equipment and services, consumer electronics, TV services, etc. Growth in these markets, i.e. excluding Internet services, rose from 2.8% in 2013 to 3.2% in 2014.
• Europe as a whole continues to lag behind increasingly vigorous North American markets, and the powerhouse that is emerging Asian markets.

2025: snapshots of 10 key trends and three outlook scenarios for Internet, telecoms and TV markets

For the first time, this year’s edition includes outlook scenarios for Internet, telecom and TV markets and players, provided by IDATE’s teams:
• Internet 2025: Will the top platforms become even more powerful?
• Telecoms 2025: Can the top telcos strike a balance between becoming commodities and competing head on with the top OTT companies?
• TV 2025: How can distributors avoid being cut out of the loop?

About the DigiWorld Yearbook

The finest market insights from IDATE experts who track the changes at work in the globe’s telecom, Internet and media industries throughout the year.
The DigiWorld Yearbook is published in English and French and available in print and PDF format.

> The 2014 edition can be downloaded for free on www.idate.org

> The 2015 edition is available for purchase. Print: €100, incl. VAT; PDF: €69, incl. VAT on www.idate.org

For more information: www.idate.org/digiworldyearbook/

infog yearbook15-EN


Interview with Jussi HÄTÖNEN Economist, European Investment Bank.

Interview Published in COMMUNICATIONS & STRATEGIES No. 91, 3rd Quarter 2013

Public-private interplay in the telecom industry

Summary of this issue: Telecom liberalization progressively limited public intervention to the definition of a regulatory framework setting unbalanced market conditions to stimulate investments of new market players. However, a new impulse to public initiative has come from the availability and use of broadband networks with a growing set of services at disposal of public and private users. This new form of public intervention has gained ground because of strict financial constraints faced by some telecom operators and local authorities’ awareness of positive externalities due to the reduction of digital divide (e.g. economic development and social inclusiveness). This special issue aims to set the stage for a broad discussion on public-private interplay.

Jussi HÄTÖNEN, European Bank of Investment

Interview with Jussi HÄTÖNEN
Economist, European Investment Bank.

Conducted by Alberto NUCCIARELLI, Cass Business School, City University, London


C&S: How would you define a "public-private interplay" in telecom and, specifically, in the broadband sector?

Jussi HÄTÖNEN: In its broadest form, public-private interplay, or PPPs for that matter, occurs whenever input from both parties is required. While PPPs often refer to financial, or in-kind, cooperation to deploy broadband networks, PPI can include other forms of cooperation such as sharing of information in its simplistic form. I think a good example of this is the market mapping exercise. The aim of this exercise is to identify the areas where private operators have existing infrastructure and areas in which they have no interest in deploying NGA networks in the near future – accordingly to identify the areas of market failure and therefore define the scope for further public sector involvement.

In the European broadband sector is public-private interplay a crucial pre-condition to generate investments?

We have to bear in mind that after liberalization, telecommunications is effectively a private sector driven industry, albeit a regulated one, and public sector intervention is justified only if there is a market failure. That said, looking at the recent studies and research, it seems that in developing NGA networks in Europe, the market failure is evident, particularly for more remote and rural parts of the countries. Market operators will continue to pursue selective investments in areas where unit costs are low enough to make returns for their shareholders. Wherever they cannot build a viable business case, they are not likely to invest. In these areas, PPIs are crucial for generating investment. In fact PPIs are very important, as relying only on market forces to deploy network would potentially lead to an even greater digital divide than we have at the moment. This is because market operators are investing to deploy NGA networks in areas which are already well covered by copper, cable and even by existing FTTx networks.

How much risk should the public sector be able to bear to develop a long-term interplay with private stakeholders?

This depends fully on the context and ambition. The more rural networks we want to deploy, the more risk the public sector needs to bear. Typically the private sector's risk threshold is in deployment cost of below EUR 1,000 per home passed, translating to fibre network build-outs in urban and to some extent suburban areas. If we want to deploy networks in rural areas, the public sector needs to bear the risk to the extent that private sector is not willing to take. For instance in rural areas where the cost per home passed is EUR 2,000 and more, the majority of the financial burden and thereby risk needs to fall to the public sector if we want to see these networks being rolled-out. On the other hand, the public sector has a better risk bearing capacity. For instance, while private operators seek paybacks for their investments typically within 10 years, the public sector can take a longer-term investment horizon which is more in line with the economic life of these assets.

Should a fair social rate of return for public commitment be defined?

Yes, but what this is depends again on the context. Public resources are scarce and come with an opportunity cost. This means that instead of deploying fibre, the public sector needs to decide for instance whether they would use the funds to build roads or hospitals instead. Of course, the less developed the basic infrastructure, the more you need to demonstrate the social return from investing in broadband as opposed to other opportunities.

If we consider public-private partnerships an example of interplay, can we affirm that they potentially distort or stimulate competition in the EU broadband sector?

As said before, public sector involvement and intervention is justified only if there is a market failure, i.e. the private sector is not willing to invest. Therefore if the market analysis (or market mapping in the case of broadband) is done correctly, focused public sector involvement through PPPs should not distort competition. Whether PPPs stimulate competition depends on the model, but the open and fair access principles are set to do this.

What is the way forward with the 2012 EU Guidelines on public-private partnerships?

I think the key is to understand that market forces alone will not deliver the DAE targets, but focused and well-designed public sector involvement, complementing private sector investments, is a key element in reaching these policy objectives especially in more remote and rural areas where, in fact, the social return is typically the highest. Nevertheless in my view, PPPs should be designed in a way which maximizes the private sector involvement and minimizes public sector intervention. Of course, given the complex structure of the industry, this is a difficult task.

Will public-private interplay be more relevant in the co-creation of contents and applications (e-health, e-education) in the next 5-10 years? Or will it continue to be limited to the definition of better conditions for infrastructure development?

I do not see why not. In fact PPPs play an important role in research and innovation space in Europe. These PPPs are not like the ones used to deploy infrastructure, but PPPs nevertheless combining private and public sector resources. For instance under FP7, there are several ongoing projects in the eServices domain, which combine public funding, private sector companies and public sector research institutes for instance. This is however on the R&D side, but I would not see a reason why PPPs should not be suitable for the deployment of e-service solutions in the public sector. However the prerequisite is to have first the infrastructure (i.e. networks) in place to support these services.


DigiWorld Summit 2013Jussi HÄTÖNEN will take part in the DigiWorld Summit 2013 Executive Seminar NGN funding: public/private interplay : a half-day roundtable discussion of new broadband networks will be an opportunity to evaluate the importance and modalities of public sector actions in coordination with operators in various world regions, to examine their effectiveness, and to anticipate their impact on the future of the electronic communications sector.

Interview Published in COMMUNICATIONS & STRATEGIES No. 91, 3rd Quarter 2013

Sophie NIGON
Managing Editor


Are great shifts afoot in the telecom sector?



Yves Gassot



The warning signs are increasingly visible. And the fever could well take hold of the telecom sector. In Europe, the sector’s health is febrile to say the least: plummeting revenue, shrinking margins and tumbling share prices. These facts are no longer open to debate, nor is the massive impact that the economic crisis has had on telcos. Listening to market watchers’ opinions nonetheless reveals tremendous disparities in diagnoses.

Is this dire situation the result of a regulatory framework that imposed a state of competition too intense for the market to bear? No doubt, but we also need to remember that these same policies had long been seen as something Europe had done right, something that enabled the former monopolies to evolve, for new entrants to become profitable companies, and for consumers to enjoy the benefits (often more quickly than in other Western markets) of mobile telephony and high-speed internet.

It should also be said that regulation is not a summary of public policies, and that government actions – e.g. maximizing spectrum prices, the inherent ambiguities of State ownership, growing number of taxes, etc. – have their share of responsibility here too. Lastly, we should mention the already forgotten impact of the crisis that the telecom industry suffered soon after the internet bubble burst, of optimistic goodwill in company accounts, and the anesthetizing effect of financial markets which, by giving priority to debt reimbursement and then dividends, did not really encourage company heads to invest and prepare their business for the long term.

It should also be said that regulation is not a summary of public policies, and that government actions – e.g. maximizing spectrum prices, the inherent ambiguities of State ownership, growing number of taxes, etc. – have their share of responsibility here too. Lastly, we should mention the already forgotten impact of the crisis that the telecom industry suffered soon after the internet bubble burst, of optimistic goodwill in company accounts, and the anesthetizing effect of financial markets which, by giving priority to debt reimbursement and then dividends, did not really encourage company heads to invest and prepare their business for the long term.

One area where regulation, and public policies in general, have fallen short was in coming late to an awareness of the massive transformation that telcos were facing. Ultimately, the advantages that innovation would deliver to consumers – not to mention suppliers – in the medium term, should have counted for as much as demands for lower prices.

The Commission is testing out a few ideas that it wants to make concrete.

Using the single European market as its springboard. It is going back to what in the 1990s was presented as the counterbalance to market liberalisation. It is also responding to a European sector that is extremely splintered, compared to the concentration we find in other markets. So there’s the idea of a “passport” that would allow telcos to enter the different national markets without impediment, through a complex cooperation between national regulatory authorities. The ongoing pursuit of harmonized regulation and enabling pan-European strategies are not, in principle, to be rejected. They could be positive things for both telcos and their customers, and especially their enterprise customers. But given the state of most telcos’ accounts, and of national markets, we do not think this would solve the problem. In other words, if Deutsche Telekom is not present in Italy, it is not because of licensing problems (with the very real exception of frequencies which appear destined to remain under national control for some time to come), nor even because the terms and conditions set for accessing existing fixed and mobile infrastructure would be exorbitant. It is above all because of the difficulties the telco is suffering in the markets where it already does business (starting with Germany), and the problems that all companies operating in Italy are having to contend with. For the time being, we will not delve into the (at first glance tempting) bonus that the idea out of Brussels could generate, by virtually doing away with roaming charges within the EU.

So, what now?

During this current review of European directives, it would be wise to give the sector some breathing room by letting up on ex-ante regulation, in exchange for commitments to investing and by putting faith in ex-post actions. It also seems likely that, in the current environment, the course of trade will get the upper hand, and that anti-trust decisions will counterbalance the influence of the sector’s regulatory framework. We believe that a scenario of the very gradual diminishment of telecom markets’ and telcos’ power in Europe is no longer the most likely. Given mergers and acquisitions that are in the works, and others being spoken of, it is starting to look more like a race between European operators’ ability to rebuild their margins through a restructuring in national markets, and the huge appetite of operators from emerging regions and from the United States, whetted by plummeting share prices. If Europe is unable to organise the sector’s fixed-mobile consolidation on its own (either via mergers or infrastructure-sharing, firstly at national and later at pan-European level), outside forces will do the job for it. In which case we would lose what is still one of our major assets in our bid to tap into the massive opportunities embedded in the digital world.


Ecosphère Télécoms Africa

L'IDATE a publié, en collaboration avec CIO Mag, l’écosphère 2011 des télécoms en Afrique. Ce mapping présente les opérateurs présents dans les différents pays du continent et mesure les niveaux de développement des marchés nationaux en valeur et en volume (pénétration mobile, internet).

Télécharger (PDF, 1.64MB)

La prochaine édition du Communications & Strategies (DigiWorld Economic Journal) se focalisera sur l'Afrique : ICT development in Africa (No. 86, Q2 2012)

> Communications & Strategies

Responsable Telecom Economics and Business Modelling

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Cio Mag

> Site internet de CIO Mag : www.cio-mag.com

> Site internet du DigiWorld Institute by IDATE : www.idate.org