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© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 1 Current and Future Trends Alexander NTOKO, Project Manager, ITU Electronic Commerce ITU Telecommunication Development Bureau (BDT) Web: Basic E-Commerce Training For Pakistan Pakistan Telecommunication Authority (PTA) Islamabad, Pakistan 31 March – 5 April 2001 International Telecommunication Union (ITU)
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 2 Agenda The trend is Convergence The platform is IP The strategy is Alliance The focus is Services The future is Mobile From dot.coms to dot.gones
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 3 Internet Trends Phenomenal Growth Projections in all Regions. New Types of Alliances and Partners. New Business Models and Revenue Streams. Core Platform for Convergent Services. Reduced Set-up Costs for Start-ups.
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 4 The Platform is IP Rapid Evolution in Several Platforms Fixed Networks (dial-up, ISDN, Satellite, leased line) Digital Mobile Data Services (GSM, WAP, I-mode) Streaming Media (WebTV, VoIP, Cable Modems) Household Appliances (TVs, Microwaves, Refrigerators) Wireless Access (PDA + Mobile, Bluetooth) Broadband (xDSL, DWDM, UWA, 3G Mobile - IMT2000) Power-line Technology For Internet Access Fixed Mobile Convergence (FMC)
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 5 The Trend is Convergence Breaking Industry and Service Barriers Broadcasting Companies --> Voice and Network Services Telecom Operators --> data network and financial services Computing Companies --> Broadcasting (TV services) Financial Institutions --> Data network access Services Voice Services provided over data networks (VoIP) Data Services over broadcasting networks (DVB) Broadcasting services over data networks (WebTV, Radio) Voice and Data Services over electrical power lines TV Stations Using Web as another Distribution Channel - MMXI estimated 400% growth in access to TV Web sites
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 6 The Strategy is Alliance No Single entity holds answer to puzzle Broadcasting Companies + Access Providers = TV-based Internet access and e-tailing Content Providers + Network Carriers = Distributed Content delivery and Hosting Mobile Operators + Financial Institutions + Software Firms = Mobile e-Payments Fixed Operators + Broadcasting Companies = Voice Services via TV Networks Energy Companies + xSPs = Powerline Internet Access Operators + Financial Companies = ePayment Solutions Small Businesses + Big Businesses =Survival
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 7 The Model is Services Application Service Provisioning (ASP) Deploy, Host, Manage, Rent Access to Applications for businesses from a central location with security, availability and performance. Issue: Finding the Right Position in the ASP Value Chain 1. Network Access Services (Network Connectivity) 2. Content Distribution Services 3. Community and Hosting Services 4. Business Productivity and Communications Solutions 5. Application Integration and Work-Group Solutions Network --> Services --> Applications --> Content --> Portal
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 8 Strategies - NSP Network Service/Access Provisioning (NSP) Reliable, low-cost, high speed access for Businesses and Consumers Issue: Finding the model for reliable and affordable Internet Access to All. 1. Determine Appropriate Pricing Policy for Services 2. Take Advantage of New access Technologies 3. Forge Strategic Alliances with New Bread of Carriers 4. Migrate from Traffic to Content Delivery Services
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 9 The Forces of Change the rapid rate of change of technologies and its falling costs, the convergence of technologies, services and industries and the process of globalisation, the phenomenal growth of the IP networks (e.g. Internet) and the proliferation of pervasive computing, the emergence digital wireless mobile data services and technologies (Bluetooth, WAP, GPRS and IMT2000), digital TV, voice recognition, Internet appliances and Broadband IP (xDSL, DWDM, UWA) access, the increase in mergers, alliances and powerful new players, the breakdown of geographical, time and industry sector barriers, are perpetuating the phenomenon of e-convergence and introducing new opportunities and challenges to developing countries.
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 10 E-Business Drivers o Metcalfes Law of Connectivity: The value of a network grows exponentially with the number of nodes. As the number of nodes double the value of the network quadruples ( f(x) = x 2 ) creating the conditions for e-business.
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 11 E-Business Drivers o Moors Law: The performance of micro-processors (computing power) doubles every 18 months resulting in cheaper, faster and convergent technologies.
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 12 E-Business Drivers o Better Shopping Options, Price Comparison, Cost-effective and Rapid Market Expansion. o Drive to Streamline Business Processes and Customer Demands o Search for New Revenue Streams by moving up the value-chain as Profits Margins for Voice Traffic Declines. o Operators Capitalising on Customer-base and Investments.
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 13 The future is Bright. The future is Mobile Rapid evolution towards Mobile Internet as high speed digital mobile services become widely available. From GSM to High Speed Circuit-Switched Data to General Packet Radio Service to Enhanced Data Rate for Global Evolution to International Mobile Telecommunications (IMT-2000) WAP, I-Mode already delivering Internet services to mobile subscribers.
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 14 M-Commerce
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 15 M-Commerce Drivers High growth rate expected due to lower deployment cost and speed of deployment. Mergers and alliances between mobile operators, equipment manufacturers and service providers creating opportunities for new services. Convergence to IP as platform is facilitating access to existing IP-based services through WAP and I-mode. Problems of low speed on 2G platforms and limited WAP services will be resolved as migration from circuit-switched to packet-switched networks continues. Migration from time-based tariffs to volume-based tariffs will create opportunities for IP-based services and content. Security (SIM and PIN codes) on Mobile terminals (as PSEs) encourage secure e-payment solutions.
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 16 M-Commerce Drivers Falling prices for high speed processors and reduction in their sizes will transform mobile devices to powerful handheld computers. Deregulation will increase competition and drive down prices for mobile services. Pre-paid services will provide low-entry cost for subscribers but might have negative impact on operator revenues as customer loyalty reduces. These drivers will affect the business models for operators as voice revenues decline. … But they also present new markets for innovative operators and service providers what can capitalise on the opportunities brought about by these changes.
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 17 M-Commerce Services Banking - Accounts, Statements, Bill payments and Fund Transfers Payments - Credit cards, Micro payments and Pre-paid Trading - Stock quotes, Notifications of events. E-Government - E-voting and E-administration Retailing – Subscription and Direct sales Entertainment - Interactive TV and Live Music
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 18 Mobile Commerce Services Security Services Access Control User Authentication Digital Signatures Non-repudiation Data integrity
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 19 The dot.com euphoria What Happened to the New E-conomy? o Building market share and dominance was vital. o Long term future was justification for high share prices. o Cash and profits were secondary. o Unlimited cash injections from VCs and IPOs. o Business models too complex for VCs and investors. o Having an Internet strategy was a guaranteed component for success. o More than USD 3 trillion lost when the bubble burst.
© ITU Electronic Commerce for Developing Countries (EC-DC). Page - 20 The dot.com euphoria From bricks and mortar to bricks and clicks to clicks and clicks to bricks and clicks Can these pitfalls be avoided? How does this affect e-commerce?
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