Over-the-top-players (OTT) have been seen as a big threat to the traditional Communications service Providers (CSP). In short, the traffic generated by the OTT players is congesting the communications networks in which the CSPs have invested hundreds of millions of Euros, while the same OTT players also bring home most of the revenue streams. The Telco industry has been discussing the topic already for quite a while now, and – as often – the market and business disruptions have been seen as a threat rather than an opportunity.
As an example, CSP executives around Europe and the Middle East gathered at a conference in January 2011 to share experiences on how to compete with Google, Skype and others, that is, the dreaded, revenue-hoarding global OTT players. (Source: Global Telecom Business). Other commentaries, such as this from Ovum, remind the CSPs that they should rethink their business model and become a part of the OTT value chain. The list of similar examples just goes on.
Let’s recall some of the earlier disruptions to see if there is anything we could learn. Although the Mobile Virtual Network Operators (MVNO) phenomenon was more or less a local disruption while the OTT players of today are truly global, there might be something worth noticing from those days. Many of the MVNOs in the early phase were established in an opportunistic manner to cash in on the disruption quickly, while trusting that the traditional CSPs will buy them out simply because CSPs should see them as a competitive threat. This also happened in many markets. After attempting to fight against the grain, many CSPs started to see the MVNO business model as an opportunity, although with the strong encouragement of regulatory bodies . Some CSPs have taken the role of selling the network assets to the MVNOs and some have built their own MVNO business to differentiate within specific customer segments. A good example of the differentiation strategy is E-Plus, who still in June 2012 was the jewel in KPN’s crown. E-Plus established its own MVNO, Ay Yildiz, with a segmented offering to several million (statistic vary from 2.5 to 4 million depending on the definition) Turkish people in Germany, who communicate with their relatives inside the country and between Turkey and Germany.
Some of the leading CSPs have taken similar steps in capturing the OTT opportunity rather than seeing it as a threat. Naturally, there are multiple approaches. One good example is Telefonica whose Jose Valles explains how Telco’s are in a unique position to take advantage of opportunities to facilitate OTT services through their relationship with users. The example by Zain Deputy CEO and COO, Hisham Akbar, is another instance of the CSP leveraging their competences and assets to build a whole sale service. Zain sells network infrastructure to other players to deliver a wider variety of OTT-type of services and applications to Zain’s customers.
Where there is a threat, there is also an opportunity. However, it often requires the courage to go for the opportunity instead of fighting the inevitable change.
The main driver for consolidating the network equipment under one vendor is obviously cost savings, although a network swap can be even seen as a green initiative . A similar trend is also evident in large scale IT system modernization programs, conducted through convergent billing or CRM deployments . There are even operators who undertake both network and convergent billing systems swaps simultaneously, to maximize the benefit.
Such major changes to the network come with their own risks and countrywide service outages are not uncommon. These outages can in-turn lead to substantial fines from the national telecoms regulator.
As many of our customers have noted, major network or BSS transformations have become less risky and more cost efficient with the help of a convergent mediation and fulfillment layer: The impact of a network on billing system swap is mitigated by a flexible convergent mediation system. A flexible fulfillment system can adapt to a new CRM system in a cost-efficient manner, without any effect on the existing network. When swapping networks and billing system consecutively, an independent mediation and fulfillment layer provides stability in the operations environment, enabling a controlled phased migration.
Increasingly, there’s discussion within the telecom sector whether unlimited data is making a comeback. In fact, in Wednesday’s blog post we highlight a story asking this very question. This made us wonder how our readers are striking the balance between happy customers and manageable networks. We invite you to share your thoughts on this by voting in today’s poll — and, as always, we welcome you to post in the “Comments” section below.
In June’s poll we surveyed the trendiest buzzwords circulating within the telecoms sector. “Analytics/Big Data” edged out with 43% of the vote, followed by “Customer experience management” with 38%. Rounding out the top three was “Innovation” with nearly 10% of the vote.
This month, we take a closer look at the poll’s trendiest buzzword to better understand what Big Data/Analytics means to you. Tell us what excites you most about applying Big Data/Analytics to the telecoms sector. We welcome you to post in the “Comments” section below as always.
I’ve recently been asked for my opinions on the difference between Customer Experience Management (CEM) and Customer Relationship Management (CRM) with relation to the telecommunications sector. This is, indeed, an interesting question, especially considering the subtle, yet remarkable, differences in the answer.
Let’s first consider CRM, which has traditionally been defined as a means for communications service providers (CSPs) to manage the contact and various segmentation parameters of their customers. For instance, these systems provide the ability to build targeted campaigns based on demographic or other more or less rigid segmentation criteria. CRM also enables CSPs to react swiftly when customers are demanding new services or to respond, after the fact, to a negative customer experience.
Yet, the perception still exists that CEM is simply the ability to understand, in-depth, the manner in which services are being used by subscribers and having the availability of related transactional data. While this helps broaden the knowledge about CSPs’ customer bases, their needs and preferences, we are now living in a time when CEM can be extended to encompass true personalised and proactive action.
Coupling real-time data from services and networks with a contextual understanding of a customer’s situation leverages both the CRM and CEM concepts to place real intelligence in the palm of CSPs. This level of contextual intelligence will, undoubtedly, bring with it great customer experience and differentiating opportunities.
The recently announced CIQ4T (Contextual Intelligence for Telecommunications) concept addresses this need and opportunity to link together CRM and CEM. It leverages advanced predictive analytics to provide a holistic, contextual understanding of individual subscribers’ usage patterns, behaviours and circumstances to proactively drive personalised interaction and improve overall experience.
After all, the battle for incumbent versus challenger in the telecommunications space is no longer being fought in the infrastructure build-out, but instead on CSPs’ ability to retain customers and build a positive reputation for service. Subscribers have so many options when it comes to selecting a CSP; it’s imperative for operators to proactively influence and eventually anticipate the needs and wants of its customers. So it really isn’t about defining the difference between CRM and CEM, it’s about making them work holistically together. #CIQ4T
Did you have a chance to vote in last month’s poll on the biggest business priorities for communications service providers over the next 12 months? Well, the results are now in, with a three-way tie between reducing customer churn, reducing time-to-revenue and finding new ways of increasing profitability. If you missed it, Comptel’s CEO, Juhani Hintikka, recently outlined two strong approaches for facilitating these types of business performance improvements.
In my last post, I touched on what LTE-A is and the benefits we can expect from it, including much more bandwidth. However, there is some room for improvement with this technology.
The Price Issue
First and foremost, there are cost issues related to the massive performance increase. For instance, if you have a mobile broadband bundle with a capacity of 2 GB, this could quickly be consumed in roughly 15-20 seconds. If you’re a heavy user today and spend about 30 GB a month, at maximum capacity, it would not last long in LTE-A. Depending on how the service is put to market, consumers could end up paying a fortune for its speed—hindering adoption and prolonging the transition to LTE-A.
So why will it be so pricey? There are a few fundamental reasons. First, the cell in LTE-A is smaller but much faster than those found in previous generations. So this means that we will have more cells (think of these as the roadside ‘towers’), but they will most likely be built into streetlight poles and other facilities in addition to physical towers. Here’s where the price comes into play—each cell has a cost. In addition, each of those cells needs to be connected to the core network somehow (typically microwave radio or optic cable), and with more cells comes more cables and more complex networks.
Also, each cell needs to transport more data as bandwidth grows. Thus, the infrastructure to support such bandwidth requires major investments by communications service providers (CSPs), including in new technologies like small cell devices for more specific locations. We can also expect more fibre rollouts, which will need to be connected to all kinds of routers, switches and repeaters in the telecom network. These will all need to be planned, installed and operated. While we assume that efficiency increases in hardware over time (smaller space and faster speed) and power consumption decreases, all this infrastructure will have a major impact when it comes to cost. In addition to the purchase and operations, the cost of labour for actually digging up the ground, laying the cables and filling the ground can really add up.
What about Vendors?
This means a lot of various things for software vendors like Comptel and others in the OSS/BSS and Service Provider IT (SPIT) field? We believe the infrastructure rollout will need to be as automated as possible to drive the need for an excellent fulfillment process, logical network connections and efficient resource management. This will, in turn, reduce wasted time and money. The increase in bandwidth will likely drive more customer offerings and drive the need for service orchestration and catalog-driven order management. The complexity of the service must be conveyed in a way that makes sense for customer segments using the network capacity, and various service bundles should be prepared and proposed.
One may, however, discover that there are so many different ways to bundle these services that they completely avoid it and allow customers to self-personalise their subscriptions in advance or just in time. CSPs will naturally want to charge and control this usage and the bandwidth that customers are getting, such as services without quota restrictions like music streaming with a fixed monthly fee. Perhaps they can consider time-, location- or service-specific profiles of policies that enable customers to enjoy the vast capacity at full speed.
With this in mind, we already enjoy a degree of granularity like watching a TV series at full capacity, while others view it at a lesser quality, all enabled by policy control and online charging systems. We’re also starting to see CSPs analysing and adapting their customer engagement through intelligent interactions like free services and campaign offers, better matching service profile configurations and other things that better suite personal preferences of usage. All of these services need to be activated, changed and deactivated in real time with a provisioning and activation engine that can scale to the vast speed and low latency.
Likewise, the usage data will be so diverse and vast in its volume that a next-generation mediation system with massive scalability is needed to enable managing the online feeds of data and transactions securely and to adapt the data from various sources and formats with all of the potential various destinations (and their formats). This layer we saw formed in the CDR/file world will also be very necessary in the new online/diameter world.
In summary, behind the acronym LTE-A, there is a promise of vast bandwidth, which no matter how you look at it, will surely benefit us, especially as many other innovations can then be applied to it. There are some hurdles to overcome, but just as many opportunities presented with the technology.
If you’re interested in talking about LTE-A a bit more, please leave a comment or come to our booth at the upcoming Management World 2012, taking place in Dublin in May, to chat with me about it.
When following the hot industry trends, I found a lot of excitement around LTE-Advanced (LTE-A) and wanted to share my thoughts on this emerging technology.
So what is LTE-A?
Well, in the simplest of terms, it’s the latest advancement in radio technology that will put one Gigabits/s bandwidth (or 1000 megabits/s) to your mobile device of choice, whether it’s a laptop, dongle, tablet or smartphone (and eventually feature phone). Network rollouts will occur once the technology is proven in trials and compatible devices are available.
For comparison, you can get up to 100 megabits/s through LTE technology and up to 24 megabits/s with ADSL technology. The bandwidth that LTE-A enables is similar to the fastest speeds from Fiber-to-the-Home (FTTH) technology and about three times faster than that of cable. It is also approved by the International Telecommunications Union as the true 4G technology irrespective of what industry marketing and some communications service providers (CSPs) are saying about LTE and DC-HSPA. Globally, we are just deploying LTE infrastructure, and thus, LTE-A will have its first major deployments sometime in the future.
While the maximum speed will most likely be very theoretical, at least in the beginning, the technology promises to provide all of the bandwidth we need without wiring everything together physically, allowing for true mobility. To put that bandwidth into perspective, one HD quality video stream can consume up to tens of megabits per second depending on the encoding/decoding technology used. This would then decide how much of the CPU and graphics chip on your device would be used and how much battery life they consume on decoding the video feed. The less bandwidth that is consumed (and hence tighter compression used in video encoding), the more work the CPU and graphics chip will have to do, and more battery will be consumed. In theory, you would not need much video compression with LTE-A, as there is plenty of capacity and hence less demand on battery, CPUs and other chip development needs. Think about several HD video channels being streamed to your device and having the ability to use other services in parallel. It would also enable higher upload speeds, so your multi-megapixel DSLR pictures could be streamed to your cloud storage or photostream of choice in near real time.
Is there really a need for this much bandwidth?
I’ve witnessed first-hand that once more bandwidth is available, it will get used. Remember the times of MS-DOS and the famous statement that 640 kB of memory is enough for everything? I’m feeling a bit old here, but seriously, we are masters of consuming 97% of our hard drives, for example, no matter what the capacity is—and the same applies to bandwidth. With recent advancements in HD displays in relatively small form factor (e.g. retina display in the new Apple iPad), it’s almost guaranteed we will consume available bandwidth. I’d think, however, that with such bandwidth, the need for large local storage on devices becomes less important, especially as cloud storage is becoming more affordable. Hence, we will see more video-enabled devices with minimal, built-in storage capacity.
LTE-A sounds promising, right? In my next post, I’ll discuss this technology further and highlight some areas where there’s room for improvement.
Ralph Booth joined Comptel’s Europe West services team as a contract project manager towards the end of last summer and enjoyed it so much he became a permanent employee by the end of the year. In this blog post, Ralph explains why he was impressed by Comptel’s services proposition and strategy.
Since joining Comptel in August 2011, I have found the company’s approach to services particularly refreshing and relevant in today’s market. More often than not for market-leading software providers, the description of services in customer proposals comes loaded with delivery facts, boastful methodology claims and complex resourcing suggestions. In the current market, customers look beyond these brochure-style claims and instead look for a partner to help them evolve, develop and lead. Whilst Comptel is founded on a heritage of successful deliveries, I have found we also have a more relevant services offering that expands our services footprint beyond the traditional delivery credibility into a more engaging and personal service approach. This is what makes frontline services such an exciting and important part of Comptel’s evolving business—we really are all about the customer.
Regional Emphasis: Comptel adopts a regional approach to services, positioning teams in local hubs to bring customers closer to design and implementation work. In Europe West alone, we have regional offices in the U.K., Netherlands, Germany, Bulgaria and Italy. A regional approach guarantees that Comptel builds lasting relationships with our clients.
Relationships and Continuity: During my induction programme, I learned that the average number of years of service by Comptel employees was around five. This emphasis on continuity is crucial in providing a common approach and retaining knowledge about our customers, their preferences and solutions. The experience within the business of our customers allows us to start conversations from a position of mutual understanding.
Relevance and Structure: Services in Comptel are logically structured and include the skills and expertise one would expect, ranging from solution architects, software developers, support teams, project management and ongoing customer care and contact through client management. These defined roles allow us to build sensibly sized project teams with clearly defined roles and objectives that customers understand and can relate to. Furthermore, project team members are accessible and easily contacted or brought on site. Comptel’s customers get to know the personalities who work with them on their deployments!
Interaction and Management Accessibility: Comptel values regular internal and external steering boards. These are held to share, assess and track progress of projects. Significantly, the emphasis placed on these sessions means they are well supported, with senior management attending to listen to the feedback. Feedback is also encouraged through customer satisfaction surveys that look to understand what went well and on occasions what can be improved next time.
Project Management: Comptel recognises the benefit of good, old-fashioned project management and insists on having a dedicated project manager on all of our major programmes. This approach provides our customers with leadership and direction, but also makes a very clear statement as to the level of accountability the services team feels about its work.
To sum up, my impressions thus far are that services from Comptel more than meet our customers’ expectations. Comptel is large enough to deliver, lead and influence, but is small enough to listen to, engage with and build lasting relationships with its customers.
There’s been much buzz around last week’s Mobile World Congress, and Comptel can attest to the thought-provoking discussions and ideas that were generated at the show. Analyst firm Informa Telecoms & Media recently held a webinar recapping the main themes and hot topics from Barcelona.
One key takeaway was the emergence of global players including over-the-top (OTT) providers, card networks and device manufacturers. According to Informa, these players stole the headlines and are now dominating the agenda for the telecom industry, as operators are becoming their local partners and distributors. They went on to say that with OTT players, operators must strike a balance and find a way to work together, but just how they will effectively do so is still in the works. An example of this balance coming to fruition is Facebook’s decision to work collaboratively with operators in the billing process; however, the keynote sessions indicated that there is still some friction in the operator/OTT player relationship. For instance, OTT providers are generating revenue by using traffic from operators’ networks, which is a sore source of contention.
Further, Informa noted that operators were focusing less on technology and more on the role of pricing to appeal to consumers. Some of the interesting discussions were around the concept of moving away from unlimited pricing models toward those that are much more value-centric. At the show and over the past year in fact, there’s been much talk about this change, but some operators are struggling with implementing it largely because of challengers still pushing the unlimited model. However, other operators have revealed that a successful tiered plan is possible if the pricing is structured correctly and the value proposition is effectively communicated to consumers.
In all, Mobile World Congress was a great meeting of the minds, and we’re certainly looking forward to seeing how these developments unfold in the coming year. Which trends did you find most interesting at the show?