Explore the opportunities and challenges inherent in the utilization of Big Data through an analysis of the telco sector.

1. State of the industry
Insight into what your competitors
are already doing with Big Data

2. 2
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
BCG: Thought leader on data and information

3. 3
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Your speaker: BCG expert for information management,
business intelligence & big data
Work experience
• The Boston Consulting Group GmbH
(current)
Principal, European IT Office
• Kabel Deutschland GmbH (06–12)
Head of Management Information, before:
Head of Business Intelligence
• Solon Management Consulting GmbH
(01–06)
Manager
• Roland Berger & Partner (94-95):
Freelancer
Background and education
• Diploma in Business computer science
• PhD in economics
Dr. Erik Lenhard
Source: The Boston Consulting Group
lenhard.erik@bcg.com

4. 4
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Agenda
Big data
The big data opportunity for telco operators
Big data challenges for telco operators

5. 5
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
What is Big Data?
Structured Unstructured
Volume
Amount of data
Giga ZetaTera Peta Exa
Variety
Range of data
types/ sources
Single ManyFew
Velocity
Speed of data, I/O
Static Real-timeBatch
"Big data is the ability to process and
analyze large amounts of varied data
and data sources together to generate
actionable business insights"
"Data that surpass
the size that can be
stored/managed/
analyzed with
general database
SW"
"Big Data is a next-generation
technology and architecture
designed to support rapid
collection, discovery and
analysis to enable value
creation with low cost from
multiple, massive data
sources"
Big data attributes Big data definition
BCG definition of big data

6. 6
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Big data enabled by five 'Digital Economy' drivers
Mobile
Social
Cloud
Internet of
things
Internet
Five 'Digital Economy'
drivers... ...Causing important shifts in digital ecosystem...
...And enabling a
world with truly
Big Data
• ~80% Internet penetration in developed markets
• ~2B Internet users globally by 2015
• 1.3B mobile phones shipped globally in 2010, 250M smart
phones
• 17.7B app store downloads, >$15B app store revenue in 2011
• 6.5B mobile connections, 90% mobile penetration rate by 2015
• >1 billion Facebook users with avg. 130 friends
• 7B pieces of content (links, news, posts, etc.) shared each week
• It would take 1,000 years to watch every video on YouTube
• By 2013, 60% of server workloads will be virtualized
• Amazon cloud houses >260B objects, handles 200K req/sec.
• Netflix takes ~ 20% of total US web bandwidth from 8-10 p.m.
• Over one trillion connected devices by 2015
• 1,200% increase in scanning of QR codes from July- Dec 2010
• 30% of mobile data subs. to use augmented reality weekly by
2012
Personal
data
(contents)
Location
data
Social
data
Behavioral
data
Contextual
data
Transaction
data
facebook
twitter
YouTube
iPhone

7. 7
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Big data management
The key is to turn Big Data into actionable information
Mining
Analytics
Search
Enrichment
Big data
consumption
Big data
production
RDBMS
Analytical DB
NoSQL DB
ERP/CRM
SaaS
Social media
Web analytics
Log files
RFID
Call data records
Sensors
Machine - Generated
Big data
integration
Big data
quality
Storage
Processing
Filtering
Source: BCG Analysis
Generation UsageOperational IT Analytics
Infrastructure
Processes
People
Information

8. 8
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Agenda
Big data
The big data opportunity for telco operators
Big data challenges for telco operators

9. 9
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Telcos possess more valuable user data
Telcos with more complete
user data than OTT players
Telcos in better position to
trace users than OTT players
Few pieces of
digital information
on characteristics,
attributes and
preferences
Digital identity
covers a wide
range of
characteristics,
attributes and
preferences
Person is just a number, no addressing possible
Person can be addressed in some way
(e.g. through snail mail)
Person can be addressed immediately
(e.g. Google ads)
Traceability
?
Source: BCG Analysis
Telcos
Telcos
amazon.com
YouTube
Google
Mail
twitter
Linked in
facebook
Google
Mail facebook

10. 10
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Framework for structuring the value of big data helps to
identify four distinct data business cases
ARPU
ACPU
1
2
3
4 1
2
3
4 Generate new revenue
streams by new
business models
Manage costs by
process optimizations
Optimize subscriber
base by base
management
Lift ARPU by
up- and cross-sell
#customers
Total revenue
Total costs
Basic Telco revenue / cost framework Data business cases

11. 11
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Each business case with own characteristics on how to
extract data value
Up- and cross-
sell
Use micro-segmented
sales and marketing
approaches based on
internal and external
data
• e.g. micro-targeted
up-selling, pattern-
based offerings, pre-
paid billing
reminders
Base
management
Analyze and predict
customer behavior and
align customer
management
• e.g. preventive
churn management
and winbacks
Process
optimizations
Use real-time data and
advanced analytics to
improve decision
making and optimize
processes
• e.g. real-time fraud
detection, preventive
netw. fault
management
New business
models
Leverage
differentiation potential
to escape
commoditization
• e.g. move from
standard offerings /
products to targeted
services
Tap new revenue
streams
• e.g. data brokerage,
real-time advertising,
mobile insurance
1 2 3 4
Traditional focus of marketing-driven BI
Best-practice benchmarks provide guidance
Multitude of proven and
calculated measures in
many business units
Explorative search for
opportunities cross-
enterprise

12. 12
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Agenda
Big data
The big data opportunity for telco operators
Big data challenges for telco operators

13. 13
Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.
Currently, most individuals are concerned about privacy, but neither
fully aware nor able to manage their digital identity
Source: BCG digital identity survey (n = 3,107, August 2012)
Concern Awareness Control
Individuals'
privacy stage
Share of
EU online
population
70–90%
Regard at least one
sector as privacy
threat
15–30%
Aware that > 50% of
sectors collect
personal data
0–10%
Ever done > 3/4 of
activities to manage
their privacy
How does this impact their behavior?

14. 14
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Stated concerns by individuals do not result in
behavioral change
Source: BCG digital identity survey (n = 3,107, August 2012)
Concern Awareness Control
Individuals'
privacy stage
High
Low
Lowest HighestExpressed concern
Value of
personal data =

15. 15
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Individuals with higher-than-average awareness of data uses
require 26% more benefit in return for sharing their data
Source: BCG digital identity survey (n = 3,107, August 2012)
Concern Awareness Control
Individuals'
privacy stage
-20%
-34%-53%
-32%-25%-23%-13%
-9%
-30%
-20%
-24%
Car
manufacturers
Cable
network
providers
RetailersLoyalty
cards
Health
insurances
Mobile
phone
operators
BanksPublic
agencies
Online shopsOnline
search
engines
Social
networks
High awareness of sector data collection
Low awareness of sector data collection
Impact of data collection awareness on willingness to share per
sector (%)

16. 16
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Consumers who are able to manage their privacy are up
to 52% more willing to share data than those who aren't
Source: BCG digital identity survey (n = 3,107, August 2012)
Concern Awareness Control
Individuals'
privacy stage
+52%
56%
62%60%61%
56%55%
49%
63%
41%
60
50
0
Lowest HighestPrivacy protection proficiency
Willingness to share, standardized (%)

17. 17
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Guiding principles for organizations
Source: BCG analysis
Control
Transparency
Responsibility
Benefits
Provide consumers options
and controls to adjust sharing
to their preferences
Take accountability for a
trusted flow of data
Increase data security in order
to safeguard digital identity
Communicate benefits and
engage customers for
sustainable data usage

18. 18
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Telcos in position to straightforwardly test the big data
opportunity
1. Specify
business case
Detail calculation with
company specific data
• Key assumptions
• Current
infrastructure
• Current cost
structure
Detail infrastructure
transition case
Identify realized and
untapped potential
Calculate opportunities
and costs
2. Big data
health check
Health check on
• Business ownership
and data
governance
• Information
management
processes
• BI organization
• IT architecture
Assess maturity
driving factors for
• Up- and cross-
selling
• Base management
• Process
optimizations
• New business
models
3. Develop
and
start POC
Rank business
opportunities
• EBITDA impact
• Time-to-market
• Risk
• Pre-requisites
Identify case for quick-
win proof-of-concept
(POC)
Define POC
• Pre-requisites
• Team
• Project plan
Ramp-up
4. Transform
the
organization
Define data-centric
vision
Detail blueprint
• Structure, roles and
processes
• Infrastructure
Prepare strategic
roadmap
• Organizational
roadmap
• Technical roadmap
Establish change
agency and
transformation
program
Avoid heavy upfront investment, follow broad,
iterative approach – with a clear vision