Three Certainties in Life – Death, Tax and CSP Cost Reductions

A trip to Orlando in November to experience the weather of an English summer had the added bonus of finding TM Forum’s Management World Americas in the wonderful Peabody Hotel and Conference Center.

Some clear positivity has been demonstrated in the telecoms IT industry over the last year. The “Cloud” has been gaining further momentum, machine-to-machine (M2M) is finding new innovative applications across enterprise verticals, and communications service providers (CSPs) are realising the value of eco-system-delivered services.

Amidst rapturous applause, Martin Creaner opened Management World Americas by acknowledging (for a change) that we all knew what challenges are facing CSPs and the market, and that vendors and OSS/BSS solution providers should be getting on with delivering innovation. He stressed that the event was all about putting competitive engagements to one side, collectively learning how peers are addressing challenges and how, by sharing ideas one or two times a year, everyone could really contribute to creating a better world—quite profound and worthy of a Nobel Prize, I think!

To summarise a relatively light-hearted introduction, Mr. Creaner recommended the following points of wisdom and focus for the coming year:

• CSPs will be concentrating on growing new revenues to combat declining asset value, whilst maintaining customer experience to minimise subscriber churn.
• New revenue streams will come from clever product bundling and marketing, service enhancements, such as location-based services, plus some early adopter M2M innovations (e-health etc.), which are great ideas but carry investment risk if they are not successful.
• Over-the-top (OTT) players are here and will not be going away, so CSPs need to fight for their place in the value chain. Making a broader portfolio available in the broader market is key, such as offering diversified services within the cloud.
• CSPs need to leverage their assets and operational experience to become cloud service brokers.
• Death, tax and CSP CAPEX/OPEX reduction are the three certainties in life.

Management World Americas: Cocktails with Comptel and Discussions around Data

This year’s Management World Americas, taking place in Orlando, Florida, is buzzing with excitement and even may be the biggest yet, with a rumored 500 attendees! To kick things off, Comptel hosted a cocktail reception on Monday evening for press and analysts, which involved a lively discussion around OSS/BSS industry trends, particularly fulfillment. At the reception, Comptel’s CEO Juhani Hintikka presented the company’s strategy and described how Comptel is addressing the most pressing issues challenging communications service providers (CSPs) today.

One of the most prominent hurdles is the volume explosion – with mobile data making up 30% of traffic, and still growing, and video traffic alone expected to consume 66% by 2015. Juhani asserted that this should be seen as an opportunity rather than a challenge: if that data can be turned into information, this would create a basis to really differentiate and enhance customer experience.

This is especially true when it comes to over-the-top (OTT) players. Instead of competing with them, CSPs must begin to think of how to work with them, bringing to the table some key assets. Those assets include the control of the network, the BSS/OSS infrastructure (being able to deliver and charge for services), but also potentially the understanding of customers – which is where turning data into information comes into play. In other words, OSS plays a role in creating a reliable ecosystem that is attractive to potential partners.

However, CSPs are not there yet. What they need is to be able to turn data into actionable information, or as Juhani put it, deliver on the new paradigm: event – analysis – action, in real time.  In other words, Juhani believes the real value is to act in real time, jumping on an issue when it’s hot instead of letting it fester. If you can get the analytics right, you gain an opportunity to increase revenue – adding value rather than simply pushing a technology.

This message was well received by the press and analyst present at the event.

Stay tuned for more updates as we take in all that Management World Amercas has to offer!

Comptel’s Second Day at Management World Africa 2011

Phew! The second day of TM Forum’s Management World Africa 2011 is over. Now, I’m back on an airplane but this time to Cape Town (where Comptel has an office). Before landing, I again reflected a bit on the speech I gave on “taking personalisation to the next level—exploring how communications service providers (CSPs) can optimise customer retention and profitability through SIM management.”

In the afternoon’s presentation, I explored how CSPs across most parts of the world run their prepaid businesses, giving relatively little choice to users, mostly pre-provisioning the data and logistically managing many types or packages of SIM cards. Basically, SIM packages define the product one buys with or without a number attached.

I then expressed what the basic choices of personalisation are (price or product) and raised the question of segmentation. Aren’t we already in the stage of various types of micro-segments where two people in even the same village in rural Africa, let alone in urban cities, likely won’t have the exact same desires and expectations of CSPs’ services? If we start looking at the number of devices we use and the usage patterns we have, we would find that there is hardly any commonality, except that we all call and use data services—but that is not granular enough to address our need for personalisation. We have a vast amount of segments to address today, and the old mechanisms for defining products with varying prices and other parameters need to be rethought; otherwise, they will lead to non-personalised experiences and low customer loyalty.

I went on to explore if the mechanisms of trying to guess what is hot or not is valid—ultimately suggesting that CSPs do not even try. Let users select the services and value-adds they are interested in, and enable them to choose these elements themselves. My conclusion: loyalty is driven not only through quality but also through personalisation. If we allow users to self-personalise the services they take from their CSPs, how can competitors offer anything better?

Like I wrote yesterday, catalog is left, right and center of this kind of approach, but the way we fulfill service orders needs to be well coupled with the catalog data. If you want to know more, we’re happy to discuss it with you—it’s a bit of longer story than a blog post really.

Overall, it was a tight 15-minute session with a Q&A with the audience, and there was much more positive discussion afterwards 1-on-1 with the CSP community present.

On The Way to Management World Africa 2011

I’m writing this while travelling to TM Forum’s Management World Africa 2011 in Johannesburg, South Africa, where I’ll be giving a speech on “taking personalisation to the next level—exploring how communications service providers (CSPs) can optimise customer retention and profitability through SIM management.” (Despite most of my blog posts having been about IMS or LTE, this one won’t.)

So while flying on the Airbus A380, which, by the way, is the most advanced aircraft I’ve ever travelled in, I started to think about how telcos, in general, fail at personalisation and why they should really take a serious look at other sectors like the airline industry. A major difference can be seen when comparing the way CSPs and airlines price their offerings. Telcos, for the most part, have fixed pricing with tiered costs based on peak and off-peak hours, but they don’t really personalise it at all. Whereas airline fees vary depending on the time of your flight, the number of passengers on that flight, etc.

Then, taking it a step further, upon booking, airlines personalise all communication based on your mileage program level. You can also choose your seat depending on availability and class of service, and sometimes have the option of special meals or drinks. Even after landing, I will be picked up by a personal driver, who has my name on a large sign to help me find him in the crowd.

Looking at it, aircrafts like the A380 are complicated ‘monsters’, technological masterpieces on their own. However, the airlines do not really sell the technology—but rather the experience. And although the personalisation is limited somewhat, it is still much more than just an SMS informing you that the European Union regulatory data caps and prices are valid when you’re roaming, for example.

I will be presenting around this topic and how CSPs can make personalisation real for customers. The key elements needed to see it through? Comptel believes it’s a full-fledged fulfillment suite. Comptel Dynamic SIM Management uses a configurable dialogue engine to drive user interaction, backed with Comptel Catalog to ensure that the products defined can actually be delivered with a service and resource inventory for numbers and SIM-related data and, of course, real-time Comptel Provisioning and Activation.

I know this will be published after I land, but thought of writing this to begin to explore the issue of personalisation. I will continue with this direction during Management World Africa and in some blog posts to follow.

Wrapping Up in Dublin

The third day of Management World is always much slower than the first two. Many delegates have either headed back home or have opted for a lie in for whatever reason (yes, the Comptel party was great! Pictures from Dublin will be posted to our Facebook page).

It’s time to take stock of the event. Overall, I would say this year’s conference has been a success. I have been locked in press and analyst meetings for most of it, but I was told that the standard of the presentations has been very high. To quote Nancee Ruzicka of Stratecast whom I bumped into this morning: “It’s so good to see case studies of operators actually DOING the things that we in the industry have been chatting about for years.” (My colleague, Steve Hateley, who attended quite a few presentations, also seemed to concur with this.) And cloud and customer experience were again prominent buzzwords at Management World. It will be interesting to see how these areas continue to develop, as the industry is looking for more real-world examples.

For Comptel, the prime objective for this event was to connect with customers, prospects and partners—and much to our delight, there have been plenty of good people to meet. The demographics of the event seem to have changed though. We saw far fewer delegates from Eastern Europe, Russia and CIS, and even from the Middle East and North Africa, than we used to at Nice. One contact at TM Forum explained to me that the ash cloud and political situation were to blame, but anecdotal evidence from our own customers suggest the event’s location also influenced their decision.

And that leads us once again to one of the biggest topics of conversation here: Dublin. Despite TM Forum pulling off the most successful event ever, people are still curious to know when we are going back to Nice. Rumours abound that it might be next year, or the year after. But TM Forum is remaining very tight lipped on that subject, maybe in the hope that we will grow to like Dublin. From Comptel’s perspective, as long as delegates come to the event, we are not too bothered about the location. Dublin has proved to be an adequate, if unexciting, location and TM Forum has demonstrated its ability to bring people to the event. If it can convince people to return next year, and delegates from the regions mentioned earlier to join, then we will be happy.

What did you think of the three days in Dublin for Management World 2011?

Management World 2011: Another Day in Dublin

Day 2 of Management World 2011 started more or less where Day 1 left off (i.e. plenty of wind outside and plenty of meetings inside).

We have been very pleased by the turnout at this event so far. When TM Forum announced at very short notice last year that it was moving the event from Nice to Dublin, my immediate concern was: will people follow?

As a result, given the perceived risk and to some extent the intransigence of TM Forum on pricing, we decided to scale back our investment in the event. Comptel is not a sponsor and has not opted to take executive appointmentsettings this year. We have invested more in the booth, however, and built on two floors to give us an extra meeting room and afford us a better view of the exhibition hall!

Anyhow, it seems that, despite the near universal grumbling about Dublin not being Nice, people have turned up. Our meeting rooms have been full, and the exhibition floor has been busy. A straw-pole of my colleagues yesterday indicates that the customer and partner conversations have been good, too.

Aside from that, today saw the presentation by Comptel’s Mika Tanttu and Stratecast’s Nancee Ruzicka on the business drivers for policy control and how to get complete control over the customer. Specifically, they shared what TeliaSonera is doing in the space, with the help of Comptel.

And tonight is THE event of the show: Comptel’s party! When Management World was in Nice, Comptel used to hold a very popular rooftop party. This being Dublin, an open rooftop party is not really an option, so we have instead opted to go underground in a bar called The Vaults. We are very much looking forward to it and Day 3!

The Innovation Revolution Makes its Way to Dublin

Management World 2011 got off to a good start today despite the looming ash cloud. TM Forum reported an increase in attendance—up from 3100 to 3500—and we had the first of 100+ pre-set meetings with customers, partners and industry media and analysts.

Unfortunately, Barack Obama was unable to swing round to our booth today, as he left Dublin early last night to London. However, Ireland’s minister for communications, energy and natural resources, Pat Rabbitte, gave a nice welcome to begin the keynote session. The major theme for this year is: innovation, and how the industry needs to evolve to deliver revolutionary, profitable services. Like Mr. Rabbitte and the rest of the morning’s speakers noted, establishing collaborative partnerships and enabling customers’ journeys (in which OSS plays a particularly important role) are crucial to this.

Ben Verwaayen, CEO of Comptel partner Alcatel-Lucent, joined in via a video message from the eG8 to discuss the challenges of today’s digital economy. According to him, it’s important to connect the dots between operators’ interactions with consumers; as we’ve written before, customer loyalty will change if subscribers’ expectations are not met. The industry needs to be better able to cope with their demands.

Following Mr. Verwaayen was Stephen Shurrock, CEO of O2 Ireland, who explained how his organisation is trying to be

relevant to customers’ and Ireland’s journeys. To seize the data opportunity, O2 is focused on taking the complexity out of service / price plans—it’s about giving consumers the confidence to further take up data offerings, he said. The operator is also spurring innovation by expanding into new areas like financial services and the mobile wallet, and through its network-sharing deal with Eircom to provide better speeds and greater rural coverage.

What did you think of the morning’s presentations on the “innovation revolution”? We look forward to discussing this concept further while in Dublin.

TM Forum Catalyst Explores the Monetisation of Cloud-Based Collaboration Services

Over the past several years, Comptel has participated in a number of TM Forum Catalyst projects (most notably, the Product and Service Assembly initiative). And in the run up to Management World 2011, we’ve decided to team up with BT, Cisco and Progress Software again and build upon the Inter-Cloud Service Management Catalyst. A press release was distributed today announcing the latest proof-of-concept and the addition of Amartus, InfoVista and MetraTech to it.

I am particularly excited about the Enhanced Cloud Service Management Catalyst, as it is the first to involve Comptel’s mediation and policy control solutions. Last year, we were primarily focused on fulfillment, with being responsible for orchestrating the delivery of hosted unified communications and collaboration (UC&C) services. Now, in the second phase, we’re also taking a key role in the monetisation of these services by capturing and rating usage and performance data from the infrastructure. It’s great to have this year’s project leveraging most of our software assets, and thus completing the Comptel Dynamic OSS loop.

What’s also interesting to note about this Catalyst—the same core set of applications traditionally used to manage mobile networks is being applied to UC&C in the cloud. For instance, just like the mobile world has gone through many changes in terms of the way subscribers pay for services, customers of UC&C solutions will be looking for pricing that accurately represents their usage levels—whether its billing for video and call usage per minute or per second, blended pricing where video usage doesn’t incur charges for the audio that accompanies it or different pricing for the host and participants. To achieve this service differentiation, operators of UC&C services can exercise flexible policy control and charging capabilities.

Management World 2011 attendees, if you’d like to demo the project, email [email protected] or visit the Enhanced Cloud Service Management Catalyst booth in Forumville.

For those unable to make it to Dublin, a whitepaper with more information on “The Criticality of Effective Service Management in Monetising Cloud-Based Collaboration Services,” is available for download.

Around the World

Inside Track…
Management World Americas 2010: A View from the Sunshine State
Management World Americas is over for another year…  TM Forum recaps this year’s Orlando conference in this Inside Track newsletter article.  According toe TM Forum, more than 1,200 attendees participated in discussions, conference sessions, debates and networking opportunities.  One particular theme that permeated the event was cloud services.  Martin Creaner, president of TM Forum, commented, “Last year here in Orlando, we had a major launch of our involvement in the cloud space, and this year, the cloud sessions [were] standing room only.  It’s not only due to a growing importance of cloud services, but also the fact that service providers get the concept of cloud as an important part of reducing costs and as an enabler of this transformation to a new business model.”  As Comptel’s recent Comptel User Group survey showed, Cloud certainly offers a great opportunity for service provides, but like any other service, it needs to be closely managed.  If CSPs can’t define and deliver services efficiently, charge appropriately and keep customers satisfied, cloud will not be profitable.

Zippy’s Telecom Blog…
Smartphones Generate Nearly 65 Percent of the World’s Mobile Traffic
According a recent Informa report, smartphone users generate about two-thirds of total mobile cellular traffic worldwide (this excludes mobile broadband traffic generated by laptops and other portable devices, as well as Wi-Fi traffic offload that make up most mobile phone traffic).  Yet, only 13% of mobile subscribers use smartphones.  Moreover, as smartphone users spend more time on the Internet, the traffic that each individual generates—or average traffic per user (ATPU)–will increase over the next five years by 700%.

What’s interesting to note is that other reports, like this one from Analysys Mason, suggests that there is no ‘mobile data tsunami’.  Analyst Rupert Wood notes that mobile data growth is around 30 percent per year—not 100 percent like some of the wilder estimates have suggested.  Rupert point out that it is still the PCs that gobble up the bulk of mobile data in Europe—not smartphones; This was confirmed by various service providers, including Vodafone, speaking at this week’s Broadband Traffic Management conference in London. However, this proportion is rapidly changing, as smartphone uptake continues to boom and PC mobile data flattens.  Which figures do you think are the most accurate?

Connected Planet…
GSMA: The Time Has Come for More Connected Devices
The GSMA changed its rules to allow for embedded SIMs that can be remotely activated.  The wireless industry is a bit surprised by this announcement because GSMA decisions are driven by its mobile operator members, who, with the decision, may lose some control, such as locking people into their networks or having influence in the retail chain.  Rob Conway, CEO and member of the board of the GSMA, believes that embedded SIMs will provide security and portability for consumers, as well as additional functionality for enabling new services, such as such as e-Wallet and NFC applications. This news may also allow OTT players, like Apple or Google, to embed SIM cards into their phones and cut operators out of the retail chain, since phones would be remotely activated for a carrier network via stores and points of sale.  However, the announcement focused on the flexibility and innovations that its new “taskforce” (including includes AT&T, China Mobile, Deutsche Telekom, France Telecom Orange, KT, NTT DOCOMO, SK Telecom, Telecom Italia, Telefonica, Verizon Wireless, and Vodafone) can develop.  What do you think of this change?

Management World Americas: TM Forum on the Revenue Crunch

The communications industry is changing—revenues from traditional voice and messaging services are declining, and at the same time, consumer demand for bandwidth is proving to be insatiable. As mentioned yesterday, TM Forum is examining this conundrum and the steps communications service providers (CSPs) need to take in order to beat the revenue crunch at Management World Americas.

First to provide some perspectives on the issue was TM Forum chairman and CEO Keith Willetts, who noted that it is actually more of a margin crunch. While executives are immediately inclined to cut costs, he explained, it isn’t the only answer to level the playing field. CSPs must not also forget about the customer experience and business growth.

Mr. Willetts went on to discuss the importance of back office simplification, business process standardization and network / system evaluation (topics that will be covered in greater detail throughout the week) in addressing the challenges presented by the crunch. These, plus the intelligent application of IT, are required in order to do more—faster and cheaper. And, the smart pipes are those that glue useful technologies like SOA together, thus enabling smart services and smart business.

The keynote concluded with a look at what Mr. Willetts sees as the next big thing for enabling the digital economy. He noted that there is significant potential for a federated set of CSPs that can develop a trading platform (whether it be content, cloud services and more) for business—much like Amazon’s concept. In addition, those that can reach into the OTT part of the value chain—and extend what they currently do well—will be best positioned to offset declining revenues and diminishing margins.

What do you think of TM Forum’s perspectives on the revenue crunch?