A New Form of Telecoms Convergence?

Posted: July 29th, 2010 | Author: | Filed under: Telecom Trends | Tags: , , , | Comments Off on A New Form of Telecoms Convergence?

Convergence in telecoms is pretty old news. It no longer surprises us to see a mobile phone being used as a camera, a camcorder, a GPS, a music or video player…you name it—your mobile can do it. And not just in the communications sector—high-end cameras now record video, televisions and gaming consoles can browse the Internet…it seems like everything is turning into everything else. Then, just as you’re wondering if any form of technology convergence will ever surprise us again, well…let’s just say I witnessed a kind of convergence last week that took even me aback.

At TM Forum’s Team Action Week in Baltimore, a man was standing in a corner of the show floor, nothing unusual about that, except that he had a laptop wrapped around his head. At first, I thought maybe he was trying to hear if it was turned on, but no—this man was clearly having a conversation. Turned out he was on a call with a colleague using the laptop’s VoIP software; he kept his ear close to the speaker and his mouth close to the microphone nested in the screen’s hinge. This is a great example not just of the flexibility of modern devices, but of customers’ ingenuity, particularly when faced with high roaming charges, poor coverage or maybe just a dead battery in his phone. When all else failed, a two-kilo laptop and a Wi-Fi link saved the day.

PS: The man later admitted that a pair of earphones would have been helpful. Maybe he’d used them as shoe laces…

M&As: The Human Factor

Posted: July 28th, 2010 | Author: | Filed under: Telecom Trends | Tags: , , , , | 2 Comments »

In a recent blog post, Comptel’s CEO Sami Erviö reminded us of the fact that Comptel has been in business almost a quarter of a century, and asked: how many [OSS/BSS] companies have come and gone in that time?

This got me thinking. One of the main reasons companies “disappear” in our market is mergers and acquisitions (M&As). Over the years, we have seen waves of acquisitions, especially in the hot areas at the time. We had the billing acquisitions (Kenan, LHS, Geneva, Kenan again, Portal, LHS again), and then the fulfillment acquisitions (Metasolv, Granite, Cramer, Axiom Systems, Syndesis). It wouldn’t surprise me if we soon saw a new wave of M&As in the latest hot area, policy control.

Acquisitions are notoriously complex operations, but one of the trickiest aspects is the “human factor”. In a knowledge industry like ours, if the employees of an acquired company walk, then that company loses what made it special, including drive, skills, knowledge, innovation, and relationships with customers and partners. This is bad news for the acquiring company, but also for customers of the acquired company—after all, this is what they bought into.

One thing that astonished me when Comptel bought the company I was working for (Incatel) in 2005 was that, unlike any previous acquiring company I had seen, they didn’t march in as conquerors. Having been on the receiving end of acquisitions in my past career, I had grown used to the acquiring company assuming an air of superiority that did not make me (or many of my colleagues) feel welcome, despite the fine words. Indeed, within a year, many of us had “walked”.

In contrast, Comptel seemed intent on preserving what was special about the acquired company—especially its people.

As the marketing director for Incatel, I was somewhat sceptical (after all, we all know marketing is typically one of those “cost synergies” targets) but chose to believe. And lo and behold, within a year, I was marketing director for Comptel. I am pretty sure that a marketing director of an acquired company taking over the role in an acquiring company is virtually unheard of in the software industry. In fact, it is quite a tribute to Comptel’s attitude in M&As that the former CEOs of the two companies Comptel acquired in recent years, Axiom Systems’ Gareth Senior and Incatel’s Arnhild Schia, are still with the company, two and five years later respectively. This is, I believe, quite exceptional in our industry—most “acquired” CEOs seem to leave within a matter of months after the acquisition.

Of course, no OSS/BSS software company is immune to becoming a take-over target, but clearly for smaller, often one-product companies, being acquired is something of a raison-d’être—hence the often disproportionately high marketing spend amongst these companies. The OSS/BSS community is now rife with M&A rumours—many probably unfounded but certainly credible. The coming few months should be interesting…

Oh, and by the way, in case that wasn’t already obvious, this blog item should in no way be seen as an indication of any M&A intent by Comptel!

Q2 2010: An Overview of Comptel’s Business and Strategy

Posted: July 22nd, 2010 | Author: | Filed under: News | Tags: , , , , , | Comments Off on Q2 2010: An Overview of Comptel’s Business and Strategy

As a public company (NASDAQ OMX Helsinki: CTL1V), Comptel has a duty to publish its quarterly results, and today, we announced our results for the second quarter of 2010.

Being a publicly quoted company means Comptel needs to have a strong financial discipline, which sometimes requires us to make tough decisions, but ultimately ensures that Comptel is able to invest in its people, products and solutions for the benefit of our customers. It is telling that Comptel has been in business nearly 25 years (since 1986). How many companies in the OSS/BSS market can claim this? How many companies have come and gone in that time? This is important because Communications Service Providers (CSPs) make investments for the long term, and need to know that they have a reliable “partner for the future”.

In that context, I am pleased to say the second quarter was a good one for Comptel. Our net sales grew significantly, and we almost reached our operating profit target of 20 percent. The growth of net sales was due in part to the recovery in Europe and the Americas, which was very pleasing as Comptel (in common with other OSS/BSS companies) had been hit in the past year by the downturn in the market in those regions. Significant license upgrades in Asia also contributed to the growth—a good illustration of the partnership we aim to develop with our customers.

Our order book is also looking healthy. During the second quarter, we sold nine new core licenses, including one Comptel Policy Control and one Comptel Dynamic SIM Management, both of which are generating a lot of interest in the market at the moment. We also sold two licenses of Comptel Fulfillment , which is also very pleasing, as it shows there is still plenty of life in the fulfilment market!

Another satisfying point for me is the continued growth of our partner sales. It has been part of Comptel’s strategy to become much more partner-friendly than we have been in the past, and clearly our efforts are bearing fruit.

All in all, I think these result are good news for all of the stake-holders in the company, including of course our investors and our customers.

Around the World…

Posted: July 21st, 2010 | Author: | Filed under: Around the World | Tags: , , , , , , , | 1 Comment »

Connected Planet | Unfiltered Blog…
CTIA vs. FCC in Bill Shock Dust-Up
BSS/OSS reporter Susana Schwartz gives us her take on the recent back-and-forth between the Federal Communication Commission (FCC) and CTIA regarding the former’s survey on “bill shock”. As brief background, the CTIA started a dispute by calling the latest FCC data on bill shock “inflammatory,” with the FCC responding in a blog post that the CTIA is “denying bill shock by distorting the facts.” Regardless of who’s right or wrong, Susana raises an interesting point: “If the CTIA’s concern is well-founded—if only 30% of the respondents in the FCC bill shock survey said they were over 18—then where are we? Let’s pay attention to the perception of even young customers, as they are the near-future purchasers of services and plans. They will graduate and get jobs and pay bills, and they are the ones most savvy with social media and apps, etc.” Undoubtedly, these services will shape the future and certainly influence the telco industry. It is more important than ever for CSPs to be innovative and dynamic, and offer personalized services to subscribers at a price they are willing to pay for.

For more on the FCC-CTIA situation, Matthew Lasar of Ars Technica also covered bill shock and analyzed the FCC’s survey data in his article, “Fear and Loathing over Mobile Phone ‘Bill Shock’”.

Business Intelligence Middle East…
Africa & Middle East Mobile Broadband Adoption Will Grow Faster than Global Average over Next Five Years
According to a recent report from Pyramid Research, the future growth of broadband in Africa and the Middle East will be driven by mobile broadband. This is largely due to poor wireline services and innovative branding and packaging from mobile operators. It is expected that the total number of subscribers will reach 38 million by 2014, which is slightly faster than the global average. The report examines the current and forecast broadband landscape in the region in terms of subscribers and revenue, and looks more closely at the technologies that will enable fixed and mobile services. It also examines three key markets in more detail—the UAE, which exemplifies the most-developed parts of Africa and the Middle East; Nigeria, which illustrates the underdeveloped, sub-Saharan region; and Turkey, which represents the region’s middle-income markets. You can check out the report in full here.

TM Forum Online Community…
BSS Is Dead, Long Live BSS!
A TM Forum online community member contributed a blog post that looks at the “great BSS/OSS divide”. The terms BSS and OSS have traditionally been differentiated in the telco industry, yet with the combination of all-IP network transformation and service convergence, these have been more frequently blended together. This particular blogger raises an insightful point—“We have all heard this, but is it actually happening in the real world? If it is, how do we now define the functions that traditionally fell in the BSS camp…?” What are your thoughts on this topic? Do you think the BSS/OSS gap is closing?

When Innovation Isn’t All It’s Cracked Up to Be

Posted: July 16th, 2010 | Author: | Filed under: Telecom Trends | Tags: , , , | 1 Comment »

My eyes were opened this week by my 15 year old daughter, who drew my attention to some of life’s realities. Shouldn’t that be my job?

She’s lobbying for a new mobile to replace the high-end Samsung which has kept her reasonably happy for most of the last year. My role in this process is pretty much to fund and supply, which I don’t mind too much—seeing the way she uses mobile technology is a pretty good way of keeping in touch with what really matters to ‘civilians’ rather than we occupants of the industry’s ivory towers.

And so it proved on this occasion, as my expectations were once again overturned. I assumed that as a long-term iPod user and Apple fan, she’d be looking for an iPhone next. But no—she wants a BlackBerry.

A BlackBerry? The device of choice for the business fraternity—at least until the iPhone supplanted it in the affections of the leading-edge road warrior?

“You don’t want a BlackBerry,” I said and went on to list the many reasons why a BlackBerry was simply the wrong choice for her particular demographic. “No,” she said simply, “I want a BlackBerry”.

Here’s why:

  • Everyone else has got one (and a quick survey of other parents would appear to confirm this). More to the point, everyone else is using BlackBerry IM (or BBM), and if you’re not, you’re out (folks, this is what we used to call ‘a killer app’).
  • It’s got a great Facebook app built in (the ‘killer app one-two’).
  • The keyboard is still unbeatable for text input (and if you think the iPhone is good for texting, go ask a cold-eyed, teenage power-user).
  • It’s got a decent camera.
  • It’s cheap—around €25 / month will get you a free and perfectly serviceable BlackBerry Curve, unlimited texts and IM, 500 MB of data and more calling minutes than the average teen will ever need.

In short, it works for her (the user), and it’s not so bad for me (the budget holder).

And the lessons to be learned from this? Certainly, it’s a reminder that the fundamental things still apply—offering your target market the means to communicate in the way they prefer at a great price is still a proposition that’s hard to beat, and whether by accident or design, RIM seems to have hit on that formula with the teen market. And while style and innovation will always catch the eye of early adopters with high disposable incomes, they often count for a lot less with the budget-constrained user.

Plus, what’s true for handsets probably tells us a lot about the rest of the industry too, including OSS vendors. In really competitive spaces, sometimes the best USP is doing the basic things right, consistently and at a good price. Bells and whistles, however much we love them, often count for an awful lot less with the prospective customer.

FIFA World Cup 2010: Lessons Learned from Spain

Posted: July 13th, 2010 | Author: | Filed under: Around the World | Tags: , , , , | 3 Comments »

On Monday morning, South Africa woke up with a big ‘hangover’ (figuratively, but no doubt also literally for many!), as the month long party that was the FIFA 2010 World Cup came to an all too sudden end. As if the final seemed to read South Africa’s desire for the tournament not to end, it took 116 minutes of dueling, with a penalty shootout looming four minutes away, before Iniesta’s goal saw Spain defeat the Netherlands 1-0.

Of course, the conclusion of the World Cup also kills my ‘license’ to waffle about football on what is a telecoms, and more specifically OSS, blog.

So what better way to conclude the blend of football / telecoms posts than to take a look at some of the lessons communication service providers (CSPs) in Africa could possibly learn from the winner of the World Cup – Spain.

  1. Get a good goalie. Spain did not win the tournament as one of the top goal scoring teams; in fact, they finished sixth on the list with only eight goals (their finals opponent, the Netherlands, were second with 12). The lesson for operators in Africa is that, in an environment where ARPUs are constrained by low GDP per capita, you cannot always ‘score lots of goals’—so you need to focus on ensuring that you do not ‘leak them’ to ensure profitability. In Spain’s case, they had Casillas as their goal keeper who went on to win the Golden Glove as the tournament’s best keeper, who only let through two goals in seven matches. For operators, this starts with a reliable OSS: automated fulfillment to remove the risks of user error (or fraud) and ensure that all activated services are being billed—and a robust policy control, charging and mediation platform to ensure that services are differentiated and all usage is being monetized. Comptel has many times seen the returns on investment operators have achieved by plugging revenue leaks using our tried and tested OSS solutions.
  2. Keep possession. One of the keys to Spain’s success was the way in which they strangled their opposition, starving them of the ball and reducing their goal-scoring opportunities. In the final, they had 57% of the possession. For operators in Africa, where about 96% of subscribers are prepaid without any tie-in, churn is a major issue, and CSPs need to focus on retaining their customers to ensure their opposition don’t score off them. This is, of course, easier said than done and involves a multi-pronged approach, including ensuring that the customer is not over-charged, services are quickly and reliably activated/de-activated and end-users have access to innovative services.
  3. Play the game—not the man. One of the features of the final was the aggressive approach the Dutch took in an effort to disrupt the Spanish game. While this appeared to work in the first half, the Spanish continued to focus on their game, and eventually, the Dutch had no response. Similarly, operators should avoid being dragged into price wars as a means of competing, but should focus on service innovation. Nobody ultimately wins price wars, and unless you are sure you can win playing ‘ugly’, you may find that your opposition actually has a better game than you. Key to doing this is the ability to rapidly launch new and innovative products to the market in a cost-effective manner. As a founder of the Product and Service Assembly Initiative (PSA), Comptel has been involved in many TM Forum (TMF) Catalysts since 2006, working with other operators and vendors on ‘proof of concepts’ to define how products can be rapidly launched by allowing existing and third-party capabilities to be discovered, modeled and assembled into marketable product bundles ready for automated fulfillment upon ordering. The lessons learned from this have been built into Comptel Catalog to assist operators in rapid, but cost-effective, product assembly.
  4. Get a Psychic Octopus on your side …

Around the World…

Posted: July 8th, 2010 | Author: | Filed under: Around the World | Comments Off on Around the World…

Separating the Caterpillars from the Butterflies – What are the Core Telecoms USPs?
Analyst, Teresa Cottam looks at the metamorphosis of the telecoms industry in a recent blog post, and asks what the unique selling proposition (USPs) are telecoms service providers. She believes that much of the industry has been slow to change, is still stuck on outdated models, or is desperately seeking new ones. Teresa continues to frame her post with an interesting analogy—“we can view the transformation of telecoms as a metamorphosis from a network- and technology-centric business into a customer- and service-centric business. The emphasis shifts from network operation to telecoms retailing”. This analogy explains how the telco industry will need deliver against customer expectations, as it’s no longer about promising QoS or producing capacity.

Wireless Week…
FCC Offers Calling Tips to World Travelers
Summer officially kicked off 21 June, and with that the United States’ Federal Communication Commission (FCC) launched a program— Wireless World Travel (WWT)—to help nearly 60 million Americans who travel abroad each year save money on their international wireless use. The program will include helpful tips on international calling, videos from the FCC Chief, a tip sheet for mobile users and a blog and twitter account where all WWT information can be found. This is a great initiative by the FCC, as many subscribers encounter ‘bill shock’ during summer holidays. Before you leave the country, check with your service provider regarding roaming costs, and if they offer services, such as temporarily disabling mobile browsing or roaming notification once certain limits have been exceed.

Gulf Set to Lead with LTE
According to a report from Pyramid Research, Saudi Arabia, Bahrain, and the UAE will lead LTE adoption in the Middle East and gain a head start over countries in Western Europe. The LTE penetration rate for these countries is expected to reach 11.8%, compared to the projected 7.7% for Western European. Kerem Arsal, an analyst with the Pyramid, believes that this strong growth is due to the demand for data services, reliance on mobile rather than fixed access technologies and the increasingly competitive approaches of telecom regulators. He also attributes this projected growth to the absence of strong fixed broadband infrastructure and fixed competition, which gives “favourable signals” to network operators who are considering LTE deployments in the region.

A New Life for the Policy Control Box

Posted: July 6th, 2010 | Author: | Filed under: Industry Insights | Tags: , , | 1 Comment »

There is a huge mindset change going on within the mobile operator community.   They are now primarily thinking of themselves as broadband data operators, and not so much as providers of voice connections anymore.

I’m not saying that it has just happened, but now this change is the primary driver in all decisions and plans—the focus of operations, investments and business models is rapidly shifting towards data.  Even though operators are still getting most of their revenue from voice traffic, the overwhelming majority of new initiatives, including exciting product launches, are coming from fulfilling the growing data-service expectations of their customers.

But it means that there are also new challenges, and in that respect, there are many things where OSS and BSS can help.

One big change is in the role of policy control.  Traditionally, policy control has been tightly tied to the network.  It has been the PCRF (Policy and Charging Rules Function), an entity that originally emerged as a 3GGP-defined data transmission controls unit that worked in unison with the PCEF (Policy Control Enforcement Function).  Here the keyword is “control”. It was used to guarantee the health of the network—and of course—save when it came to network investments.  It was about punishing P2P hoarders, video streamers and other “over-users”,  squeezing the throttle when quotas had been exceeded.

That is why network managers have been eager to invest in policy control, and they traditionally have been the driving force behind its adoption.

Now with the phenomenal success of mobile broadband, there are new things happening.  It is not enough to manage only the cost and resource-usage anymore.  Ever increasing competition is driving the need to find new ways of encouraging customers to spend more on broadband—to buy services, capacity enhancements, service upgrades and content.  Policy control has now been expanded to manage solution offering and charging options.  And these needs have nothing to do with network issues; they are in the interest of IT or marketing people.

At Comptel, we have been finding an increasing amount of interest in policy control by customers coming from the IT and business side: it seems that all have now grasped the value of policy control in helping to balance operations between revenue, cost of network resources and customer satisfaction.

IT people, for example, see policy control more like an extension of charging, a way to apply charging policies and implement prepaid & postpaid convergence, and they see policy control as a means to introduce specific tiered charging models.

There are several reasons why policy control is now understood more as an IT- and business-level solution rather than a network solution:

  • It needs to be easily programmable to create the flexibility needed in business rules.
  • It needs to understand service- and customer-specific issues to manage priorities, quality of service and promotions.
  • It needs to manage multi-vendor networks.
  • It needs to manage multiple network technologies (like LTE, 3G, Wi-Fi, WiMAX, DOCSIS, etc.) to create a true end-to-end experience.
  • It needs to interface with application servers to be able perform service-specific policies.
  • It needs to handle migration from 2G/3G to 4G through several phases, while providing the same perceived end-to-end experience.
  • In addition to charging and control issues, it needs to manage network configurations (fulfillment).

So it seems that old network hardware policy control box is finding its new life as elegant and flexible business policy control software.

Mobile Broadband in Fragrant Harbour

Posted: July 1st, 2010 | Author: | Filed under: Around the World | Tags: , , , , | 1 Comment »

It is always a pleasure to visit the busy and booming Hong Kong, even though at this time of the year, it is a hot, rainy and humid place, with summer monsoons pouring waves of hot clouds over the South China Sea.  For Comptel, it is also a pleasure because of the hot and steaming telecom environment; Hong Kong is a market crazy over the latest gadgets, services and bargains.  It is no wonder that some of the leading operator groups like Telstra, Vodafone, Hutchinson and China Mobile have operating companies there and are seeing it as a field lab for new service innovations.

The “Fragrant Harbour” (what Hong Kong means in English) has become the place with one of the highest population densities, bank densities, mobile phone densities and mobile data consumption rates.  People there are enthusiastic about technology and eager to try out new services…and chat, download, browse, stream, tweet, play, gamble, listen, watch, comment…in a sense, it’s an ideal market for an advanced mobile operator.

But at the same time, this market is also price and quality conscious, demanding good service and fast responses with affordable prices. Operators need to be flexible and customer-focused, and willing to listen to their customers and try out new business models.

In Hong Kong, mobile broadband is THE thing right now. Smartphones are representing 80% of traffic (and this is growing fast!), and the need to meet the huge growth in cell and transmission capacity is the main concern of all operators.

But it seems that this is not enough.  On top of sheer capacity, it is becoming more and more important to put that capacity in the right places and to control the use of it in a way that helps to cope with user expectations: “If I’m paying more, I want better service and faster connections.” Stating that the offered service quality class is “best effort” is an insult.

Mobile operator business is becoming more like broadband business; all new network building decisions need to be based on data traffic growth. Advanced capacity forecasting, planning and monitoring are becoming critical as data transmission cost is becoming the key success factor—no wonder that Hong Kong was the place where Comptel delivered the first policy control and cell capacity management system.

This new mobile data market is also turning some basic assumptions upside down.  For example, the peak data rush hour is after midnight (I’m wondering what the applications are…); this is affecting the network operating procedures, as the maintenance window is becoming shorter—traditionally, all network changes have been done in the early hours of the day.

Comptel has had a very long presence in Hong Kong and worked closely with several mobile operators there.  In fact, SmarTone-Vodafone, one of the leading communications service providers in the region, has been a Comptel customer for almost 20 years, and we have found that in that kind of small, technology-driven, business-focused market, it is very easy to see what the key market drivers currently are.