Comarch Technology Review

no 2/2014 [19] The Magazine of Comarch Telecommunications Business Unit

How large Communication Service Providers like Vodafone utilize Comarch OSS to cope with today’s challenges

an interview with Oliver Birnbaum, Head of Network & Service Assurance Systems Engineering, Vodafone Germany

NFV/SDN – Why a Network as a Distributed Cloud Requires an Open Platform

IN FOCUS: INTERNET OF THINGS The business potential of the IoT Beacons: The next big thing for your business?

The new role of billing systems in the Internet of Things

SUPPLIER / PARTNER

RESOURCE MANAGEMENT

SERVICE MANAGEMENT

CUSTOMER MANAGEMENT

PRODUCT MANAGEMENT

MARKET / SALES

OSS PROCESS MANAGEMENT

OPERATIONS SUPPORT & READINESS

NETWORK PLANNING & DESIGN

SERVICE ACTIVATION

SERVICE FULFILLMENT

SERVICE ORDER MANAGEMENT

CUSTOMER ORDER MANAGEMENT

ROAMING AGREEMENT MANAGEMENT

INTERPARTNER BILLING

PERFORMANCE FAULT MANAGEMENT MANAGEMENT

SERVICE SERVICE QUALITY MONITORING MANAGEMENT

CUSTOMER EXPERIENCE MANAGEMENT

SLA MONITORING

SELF CARE / CORPORATE SELF CARE CRM

BSS MEDIATION

VOUCHER & TOP-UP MANAGEMENT

SERVICE CONTROLLER MODULE

CONVERGENT BILLING

BILLING

TRUSTED BY LEADING TELECOM OPERATORS WORLDWIDE

OSS MEDIATION

FIELD SERVICE MANAGEMENT

SELF CARE CORPORATE SELF CARE

PRODUCT CATALOG MANAGEMENT

ASSURANCE

COMMISSION & INCENTIVE

FULFILLMENT

CONFIGURATION MANAGEMENT

AUTO-DISCOVERY & RECONCILIATION

NETWORK INVENTORY MANAGEMENT

SERVICE INVENTORY MANAGEMENT

SERVICE CATALOG

STRATEGY, INFRASTRUCTURE & PRODUCT

PRODUCT CATALOG MANAGEMENT

CRM

COMARCH BSS/OSS PRODUCTS MAPPED ON TMFORUM TAM

APPLICATION INTEGRATION INFRASTRUCTURE APPLICATION INTEGRATION FRAMEWORK

MEMBER INDUS ASSOCIATI STANDARI BODI

T

he world of communications is going

Among the key enablers of the IoT are beacons – small

through yet another major change. It’s

electronic devices that send out information and can

called the “Internet of Things” (IoT) and

trigger certain actions. Beacons can enable automatic

seems to be all the buzz right now. Since the phe-

payments, inform consumers about a promotion in

nomenon is related to interconnected, Internet-en-

the nearest store in a shopping mall, and provide data

abled devices and involves mobile communication, it

about new products in a shop. In this issue we look at

touches the telecommunications business directly.

their limitations as well as the possibilities they offer.

The IoT has recently been placed at the top of Gartner’s most recent Hype Cycle for Emerging Technolo-

One of the fierce battles being waged by CSPs world-

gies (which ignited a discussion among media and

wide involves winning customer loyalty by improving

bloggers). Some experts estimate that by 2020 there

subscribers’ overall experience. One way to achieve this

will be about 50 billion IoT devices all talking with one

is through increased quality of service. We interviewed

another on a constant basis. The future for every

Oliver Birnbaum of Vodafone, who explains how one of

business looks both exciting and challenging at the

the biggest telecoms in the world approaches this by

same time.

automating service assurance processes and tells us

What roles will telecoms play in this new reality?

Where does the business potential of the IoT lie for them? These are the questions we tackle in this issue of Comarch Technology Review Magazine. We also discuss how this big change, often even called a revolution, is influencing the business of CSPs around the world: from their product offerings, through models of cooperation with partners, to billing and pricing scenarios that need to be handled. You will also learn how this revolution influences the BSS/OSS environments and why operators need to standardize data, applications and processes to successfully face the challenges of the digital era.

what Vodafone’s plans are for the next few years.

OSS faces new challenges also in other aspects. The emergence of new technologies such as SDN and NFV raise new requirements for operational support systems. Inside this issue we discuss how BSS/OSS functions can be virtualized and treated as services plugged into OpenStack / OpenDaylight platforms, thus becoming an important enabler for a distributed application-shaped network.

We hope this issue of Comarch Technology Review Magazine will inspire you to pursue this innovation and take your business to a whole new level. Happy reading!

MAŁGORZATA SIWIECPOLIKOWSKA Comarch SA,

Marketing Manager, Telecom Solutions,

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downloads.comarch.com

TABLE OF CONTENTS

6 7

30

LATEST COMARCH NEWS

VOICES FROM ABROAD

8 15

The telecommunications market in Latin America – evolution and changes

As the world of communications is going through the “Internet of Things” revolution, emerging markets aren’t staying behind.

One of the most promising is Latin America, a market with very high growth potential, according to industry analysts – especially when it comes to the mobile services.

CSP PERSPECTIVES

36 39

The business potential of the IoT

There is no doubt that the Internet of Things is the future of communications. The question is: To what extent is it also the future of telecom operators? The business potential for telecoms lies in the possibility of offering not only connectivity and technology but also the “IoT vendor stability” as a supplier or partner.

22

A technical look at the IoT

28

Beacons: the next big thing for your business?

Increasing the efficiency of Field Service Management for ViaSat, inc.

Thanks to the acquisition of WildBlue Communications, ViaSat has become an important player in the market of satellite Internet in the United States, delivering internet services in places where other technologies do not. The rapidly increasing number of new customers has raised new challenges in mobile workforce organization and efficiencies.

OSS IN THE DIGITAL ERA

41

The concept of IoT will see an increasing number of devices in every home and office connected to the Internet. The future of this technology will enable us to control the appliances, lights, HVAC (heating, ventilating, and air conditioning) systems , and security systems in our homes at any time, from any location.

This all sounds very exciting, but what exactly are the “Internet” and the “Things” in what appears to be the biggest buzzword of 2014?

Beacons, small electronic devices that have received a lot of publicity in the past couple of months, are still quite a mystery for many people. Knowledge about how they work and what they do seems to be quite vague.

How large ommunication Service Providers like Vodafone utilize Comarch OSS to cope with today’s challenges An interview with Oliver Birnbaum, Head of Network & Service Assurance Systems Engineering, Vodafone Germany.

IN FOCUS: INTERNET OF THINGS

19

The new role of billing systems in the Internet of Things

The Internet of Things (IoT) can be described as a multitude of connections between various computing devices connected to the Internet. A new kind of connectivity among devices, systems, and services has appeared, bringing to the concept a phenomenon much broader than machine-to-machine communications (M2M).

MEET COMARCH AT AN EVENT NEAR YOU

Comarch market insight local perspectives

How telecoms can adjust to the reality of the digital era. Standardizing data, applications & processes

The future of the CSP business lies in the delivery of digital services, either as a provider or an enabler. Whatever business model is chosen, the digital revolution will have an impact on the organization, processes and solutions that will be needed. As the infrastructure, services and partner environments grow and become more complex, operators need a horizontal componentbased BSS/OSS stack that allows for end-to-end process integration.

44

NFV/SDN – Why a network as a distributed Cloud requires an open platform

To manage the cloud platform (to implement the NFV management and orchestration), it is necessary to understand the physical topology of cloud resources. Looking at the distributed concept, you need to comprehend the connectivity between the federated cloud instances. Moreover, monitoring of infrastructure is needed to make a dynamic decision.

Comarch Technology Review is a publication created by Comarch experts and specialists. It is created to assist our customers and partners in obtaining in-depth information about market trends and developments, and the technological possibilities of addressing the most important issues.

Editor-in-Chief: Alina Wietrzny Alina.Wietrzny@comarch.com Copy Editor: Małgorzata Siwiec-Polikowska Malgorzata.Siwiec@comarch.com Graphic designer: A ndrzej Salawa, Dominik Pietruszka Layout & DTP: Adam Dąbrowski Photos: www.fotolia.com

5

Publisher: Comarch SA Al. Jana Pawła II 39a, 31-864 Kraków Tel. +48 12 64 61 000, Fax: +48 12 64 61 100 www.comarch.com Print: 1 01 Studio Sp. z o.o. DTP Tomasz Tęgi i Spółka Sp. z o.o. 93-426 Łódź, ul. Ekonomiczna 30/36 Circulation: 1 500

Technology Review is a free publication available by subscription. The articles published here can be copied and reproduced only with the knowledge and consent of the editors. The names of products and companies mentioned are trade marks and trade names of their producers.

To receive your subscription to the electronic version or see the previous issues, please visit: tr.comarch.com

Comarch’s offices in Poland: Krakow (HQ), Warsaw, Gdansk, Wroclaw, Poznan, Katowice, Lodz, Lublin Worldwide Offices: Americas Chile | Santiago de Chile Panama | Panamá United States of America | Chicago Europe Albania | Tirana Austria | Vienna, Innsbruck, Kirchbichl Belgium | Brussels Chile | Santiago de Chile Finland | Espoo France | Montbonnot Saint-Martin, Lezennes Germany | Dresden, Frankfurt/Main, Munich, Hamburg, Berlin, Muenster, Duesseldorf, Bremen Lithuania | Vilnius Luxembourg | Strassen Russia | Moscow Slovakia | Bratislava Switzerland | Arbon, Buchs SG Ukraine | Kyiv, Lviv United Kingdom | London Middle East United Arab Emirates | Dubai Asia China | Shanghai Vietnam | Ho Chi Minh City

What have we been up to?

Latest Comarch news Telefónica, one of the world’s leading service providers with 316 million customers, selected Comarch as the recommended vendor of Configuration Management, Network Planning & Design for Latin America and Germany. The agreement follows a similar decision made in November last year that appointed Comarch as the recommended vendor of OSS Planning & Fulfillment systems for Telefónica Group in Europe.

Telefónica selects Comarch as the Recommended Supplier of Configuration Management, Net-

work Planning & Design for LatAm and Germany

Norwegian NextGenTel chooses Comarch’s BSS and Fulfillment

Comarch signed a contract to deploy a BSS and service fulfillment solution for a Norwegian communications service provider, NextGenTel. As a result of the common project NextGenTel will complete a major transformation of its IT environment, leading to shorter time-to-market for new offerings and improved customer experience, thus enabling growth in both the consumer and business market segments.

Comarch Product and Service Catalog Solution for Telecoms Featured in Gartner’s Report

Comarch’s catalog-driven end-to-end fulfillment solution has been assessed in Gartner’s “Competitive Landscape: Cross-Channel, Centralized, Catalog-Driven CRM, Order Management and Service Fulfillment for CSPs, Worldwide, 2014”

Comarch Expands Latin American Presence, Enters Brazilian Telecom Market

Comarch’s BSS solutions have been chosen by a U.S.-based communications provider for the launch of services in Brazil. The launch, which builds upon Comarch’s already established presence in Latin America, will offer Brazilian telecoms and consumers cost-efficient services via VoIP technologies.

Meet Comarch at an event near you

COMARCH USER GROUP 28-29/10/2014 Krakow, Poland

BILLING / OSS FORUM

Telecom and Enterprise Forum

18-19/11/2014 Moscow, Russia

MOBILE WORLD CONGRESS 2-5/3/2015

Barcelona, Spain

8

VOICES FROM ABROAD

Comarch Market Insights

Local Perspectives Comarch Technology Review 02/2014

VOICES FROM ABROAD

9

Kai Lehmann, Sales Director, Comarch, DACH

The DACH market is driven by the demand for efficiency and excellence.

Mainly, it is those market players with strong client bases, highly automated process landscapes, and the flexibility to sustain a competitive product portfolio that can secure long-lasting business success.

This is highly visible in the lasting wave of consolidation in the telecommunications market that includes the recent acquisitions of Orange by Drei, of E-Plus by Telefónica, of Kabel Deutschland by Vodafone, and lately Versatel by 1&1.

The DACH market therefore expects from its partners the highest degree of interdisciplinary know-how, innovative products, a focus on automation, consolidation, transformation and an agility that can cater to the changing demands of its clients.

Throughout the DACH market Comarch has strongly established itself in this partner function.

Comarch supports these efforts with fourteen regional offices, five development centers, and two data centers. Key market players have recognized these capabilities and now enjoy the advantages of partnerships with Comarch. Such market players include the telecommunications carriers Deutsche Telekom, Vodafone, Telefónica, Telekom Austria and E-Plus, as well as MVNOs, cable operators and regional carriers.

Consolidation and transformation will remain a lasting phenomenon on the DACH market. In the same way, Comarch will keep innovating to ensure the lasting success of our clients.

Comarch Technology Review 02/2014

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VOICES FROM ABROAD

Marek Wojciechowski, Managing Director, Comarch UK

Because the telecom markets in the UK and Ireland are highly developed, they demand extreme quality and innovation from the newly arrived vendors such as Comarch. Since opening the Comarch office in London in early 2012, Comarch representatives have heard the same question in a variety of ways: What new value do Comarch’s BSS and OSS solutions bring to a telco to help it further differentiate itself from the competition? We are finding that two main drivers of change allow us to prove the value. First, the fast pace of technological change in the telecom world makes some of the incumbent BSS/OSS solutions or their major functions insufficient or obsolete. Second, the requirement for operators to optimize environments that have too many redundant applications in cases where operators are looking for one good modern umbrella system to replace and unify older systems still in use.

Now more than ever the market in Britain is focused on the service and its quality. Behind the scenes, the telecommunications world has undergone significant change in the area of infrastructure. All major mobile players in the UK have decided to share their infrastructure with other major mobile players – their direct competition. There are several big projects in the UK that fall into the same category: “network resources sharing and resulting costs optimization.”

By understanding and appreciating the circumstances mentioned above, we have managed to position ourselves as the right partner for these changes. Already, major companies have put their trust in us: major contracts with the biggest UK telco companies were concluded in late 2013 to implement systems of Comarch OSS Suite like Comarch NGNP, Comarch NGSF, Comarch Fault Management, Comarch Performance Management and more.

Comarch Technology Review 02/2014

VOICES FROM ABROAD

11

Pawel Workiewicz, Managing Director, Comarch OOO

The Russian market for OSS/BSS applications has been negatively affected by the low growth rates of the Russian market for telecom services. The absence of new sources of revenue, with the exception of BB access, makes local operators commit to a back-office approach to investments into OSS/BSS infrastructure. Thus, the main GtM strategy of operators has become the fight for good subscriber segments, which suggests a high degree of interest in CEM, SQM and Loyalty Analytics types of solutions, or their combinations, among CSPs. After a decade of purchasing new OSS/BSS solutions, main operators are in a situation marked by complicated practices and ineffective management of their clients and assets that was caused by complexity, legacy, and mismatch of the used systems, as well as high TCOs. This was made worse by a simplistic approach to M&A examples in recent years that were requested for the transformation of IT and Operations to enable synergistic effects.. In the field of network operations and related systems, therefore, current preferences center on their optimization and streamlining rather than on purchasing new solutions.

Regulators in Russia are not pressing as much on CSP businesses as regulators are in Europe: the initiation of MNP was not successful enough to make MNP churn high; thus, roaming tariffs have not been cancelled. Yet the practice of frequency allocation still requires much improvement as a result of it being a large source of risk for investment in deploying new technologies.

Comarch’s footprint on the Russian market is mainly in the area of OSS, but this benefits Comarch’s reputation: the success of MTS NGSA/SQM/CEM projects delivered in parallel to transforming centralized GNOC has led to a lot of interest among Russian CSPs. Overall, Comarch is now seen on the Russian market as a partner capable of delivering European Tier 1 best practices in the complicated Russian environment.

Comarch Technology Review 02/2014

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VOICES FROM ABROAD

Borys Godowski, Business Development Director, Spain and Italy, Comarch

The Spanish economy, having experienced some issues for several years, now entered a new period which shows hope for positive changes, as the main economic indicators start to look promising. Recent years have generated a mature and highly competitive telecommunications market with a strong reduction in ARPU and an urgent need among carriers to increase competitiveness.

The Spanish telecommunications market is supporting a tremendous transformation process by looking for higher efficiencies, flexibility to provide bundle offers and continued improvement in service quality. This requires high levels of investment (oriented to LTE, FTTH, digital service, etc.) and effort. And Comarch wants to help them in this challenge.

Currently, Telefónica maintains leadership in terms of revenues and number of clients, despite the growth of their competition, which includes the main European carriers such as Vodafone and Orange. These operators are involved in a strong concentration process. As a result, ONO has been acquired by Vodafone and Jazztel has been acquired by Orange.

In this challenging environment, Comarch has opened a new office in Madrid. The first success has already been achieved in 2014: Telefónica selected Comarch as the official provider for OSS Planning and Design solution in LATAM and Germany. Telefónica is expected to deploy the solution in Brazil, Colombia, Chile, Peru, Argentina and Germany.

We will continue to help our clients transform their business, implement technological innovation, and create more efficiencies. These remain our main objectives for the future.

Comarch Technology Review 02/2014

VOICES FROM ABROAD

13

Joanna Slowinska, Business Development Director, BeNeLux & France, Comarch

The Dutch telecom market is both modern and open: in addition to the domestic operator (KPN) and the global players (Vodafone, T-Mobile, and Liberty Global), numerous MVNOs are present. The Netherlands is characterized by one of the most progressive broadband sectors in the world, strong competition in the mobile sector, and a growing digital TV market.

For global telecommunication software and services providers, it seems to be an open market focused on two factors: on the one hand, there is quality, while on the other hand there is attractiveness of the price. Comarch has a competitive advantage due to the flexibility, scalability, and innovative character (unique offering) of its products; high quality for an attractive price; and its origins and strong presence in the EU. Our customers also appreciate the wide range of the services Comarch is able to provide.

Comarch began its telecommunications projects in the Netherlands with a project for MVNE/MVNO in 2006. Afterwards, Comarch started working with the domestic operator KPN, and subsequently has been awarded with several multiyear agreements.

Comarch Technology Review  02/2014

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VOICES FROM ABROAD

María Victoria Escudero Business Development Director Comarch Latin America

Latin America is a huge market, and in telecoms, many things are poised to happen. Every country has a different set up and different needs. At this point, Comarch is getting to know and understand every country as a unique market in order to make a customized offer to every client. Customers value this.

They see us as a flexible partner with high quality products, innovative solutions, and competitive prices.

Currently, we are closely cooperating with Telefónica to implement some of our OSS solutions in Brazil, Colombia, Peru, Chile and Argentina. Vivo – Telefónica in Brazil – has over 80 million subscribers. It is precisely because of the magnitude of their business that they are very interested in our solution for Planning and Design. They know that to attend to the demand they face, they have to optimize their management and control their growth and investments.

And they see Comarch as a solid partner with whom they can walk along this path. The rest of the countries will follow, so we are all eager to see the results in Brazil.

Comarch has been successfully developing its presence in the region for many years, resulting in contracts with customers that include telecoms and cable operators such as Telemedia Limited in Belize, Cable Onda in Panama, and CableCom in Mexico.

In the years to come, both the potential we see now and the leads we are currently exploring will become concrete results. Growing interest in Comarch systems in the Latin American region was one of the main factors that led to the opening of the subsidiary Comarch Capital Group in Santiago de Chile.

Comarch Technology Review 02/2014

VOICES FROM ABROAD

15

The telecom market in Latin America – evolution and changes As

the world of communications is going through the “Internet of Things” revolution, emerging markets aren’t staying behind. One of the most promising is Latin America, a market with very high growth potential, according to industry analysts – especially when it comes to the mobile services.

PABLO VICENTE GARCÍA Comarch SA

OSS Solution Manager

Comarch Technology Review 02/2014

16

VOICES FROM ABROAD

Strengthening market competition can be made possible when there are telecomrelated regulations established by an institution that has the right degree of independence, professional competence, and financial resources to carry out its task.

using the networks of established global and regional mobile operators.

ABI Research expects mobile telecom spending in Latin America to grow by 10% in 2014, as investments in 4G LTE accelerate and demand for broadband access increases.

Spending related to radio access networks is estimated to capture 40% of capital expenditure (CapEx). LTE subscriber adoptions in the region are expected to grow from 2.33 million to 23 million over the next two years. The regional communications market is thus taking off to a new age of high-speed broadband to provide high-quality digital services that customers demand.

Monopolies and Regulations Most of the current problems in the sector have their origins in the fact that foreign investors were granted rights to exclusive operations at the beginning of the 1990s, which considerably delayed the entry of new competitors into the traditional telephony segment and obstructed the formation of market competition. In essence, the transition from state monopoly to private monopoly was made possible thanks to external investors. Subsequently, formerly state-owned companies were allowed to contribute to modernizing their local networks. However, due to the lack of competition on the market, this modernization never happened, as it was unjustified and unnecessary. With such a strong market position, the formerly state-owned companies did not need to look for competitive differentiators.

Rolling out modern network infrastructure and introducing new services require certain synergies between local and foreign companies involved in the development of new telecom services in the given country / area. Cooperation between big telecommunication groups is also important in order to increase investment in new equipment and signal coverage.

Both these factors are crucial for the development of communication services in the region, as they support an economic and technological environment in which not just existing operators can offer digital innovative services, but new providers as well. The latter group includes mobile virtual network operators (MVNOs), which can enter the market by

Strengthening market competition can be made possible when there are telecom-related regulations established by an institution that has the right degree of independence,

SIM CONNECTIONS UNIQUE SUBSCRIBERS POPULATION

(M)

TOTAL GDP

(M)

(M)

BRASIL

238.7

112.5

200

2 476

MÉXICO

97.6

46.3

117.5

1 155

ARGENTINA

52.9

28

41.5

446

COLOMBIA

43.9

24

48.2

332

VENEZUELA

30.5

16

30.3

316

PERÚ

28.2

15.1

30.1

177

CHILE

24.1

11.6

17.6

249

ECUADOR

17.1

9

15.1

67

GUATEMALA

15.8

8.8

15.5

47

REP. DOMINICANA

9.6

5.8

10.3

56

BOLIVIA

9

4.9

10.4

24

HONDURAS

7.9

4.4

8.1

17

EL SALVADOR

7.8

4

6.3

23

PARAGUAY

7.1

3.7

6.8

24

HAITÍ

6.5

4.4

10.4

7

NICARAGUA

5.9

3.3

6

7

COSTA RICA

4.9

2.7

4.9

41

PANAMÁ

4.7

2.4

3.7

31

URUGUAY

4.4

2.1

3.4

47

JAMAICA

3

1.7

2.8

15

OTROS

12.2

8.0

20.8

93

631.8

318.7

609.7

5 650

Figure 1. Latin America region statistics Source: Source: Economía Móvil América Latina 2013, GSMA http://www.gsmamobileeconomylatinamerica.com/SPA_LatAmME_v6_WEB_FINAL.pdf Comarch Technology Review 02/2014

(US$ B)

MOBILE MARKET SHARE

BY NUMBER OF CLIENTS IN CHILE VOICES FROM ABROAD professional competence, and financial resources to carry out its task. Only in this way is it possible to create a truly free telecommunications market with real competition, instead of simply switching from a public to a private monopoly.

MVNOs 3% CLARO 24%

Digital Services in Latin America – Expectations vs. Reality

MOVISTAR 38%

The majority of mobile operators in Latin America lack the functionalities necessary to respond to the current customer requirements related to using innovative, high-quality digital services available through networks that enable high-speed internet connections. According to a report by BN Americas, the majority of complaints filed to consumer protection agencies in most Latin American countries are related to the telecom industry.

The large number of user complaints regarding telecom service quality has once again made it clear that regional operators continue to fall short in the area of providing a seamless customer experience. This is why their current strategic focus is to introduce significant improvements in that space, as subscriber expectations tend to increase.

Innovative services, such as M2M, Cloud and other digital offers, are slowly gaining importance, but their development is blocked by lack of high-speed network infrastructure: fiber optic, and even 3G, is still not very widespread in the region.

MVNOs – the Biggest Competitive Threat for Local Telecoms?

The competitive advantage of operating as an MVNO is in the ability to offer mobile phone services (voice and / or data) under an established company name at a low price. Free from bearing the cost of maintaining their own network or

17

ENTEL PCS 37%

Figure 2. Sharing by number of clients IN CHILE Source: Sector Telecomunicaciones, Gobierno de Chile, Ministerio de Transportes y Telecomunicaciones, Subsecretaría de Telecomunicaciones, Marzo 2014 http://www.subtel.gob.cl/images/stories/apoyo_ articulos/notas_prensa/06032014/Informe_Estadistico_ SUBTEL_2013.pdf spectrum, MVNOs are able to offer much lower prices and better promotions for its customers.

This reality requires telecom operators in Latin America to set up business strategies that will guarantee their leadership on the respective markets and enable them to compete against new MVNOs and low-cost operators.

MVNOs MARKET COMPARATION 38.3

36.5

40

32,34

35 30

22.5

25

22,7

22,65

20

15,6

15

6,8

10

2.7

5

O IG YO

s VN

O

E M

N O AF

N

G D VO

RA O

ST VI O M

CHILE

E

AR

s VN O M

O AR CL

L TE EN

M

O

VI S

TA

PC

S

R

0

SPAIN

Figure 3. MVNOs market comparation Source: NOTA MENSUAL Telecomunicaciones, ESTAD/SG/0021/14, Comision Nacional de los Mercados y la Competencia, Julio 2014, http://data.cnmc.es/datagraph/files/NM_JULIO_14.pdf Comarch Technology Review 02/2014

CHILE

18

SPAIN

VOICES FROM ABROAD

Moreover, if regulations in a given country are flexible enough, new MVNOs will be able to enter, bringing in competitive offers and low-cost services, and – as a result – forcing traditional operators to adjust theirs fares. In markets with over 10 MVNOs per country, such as Europe, North America, and Asia, virtual operators have historically targeted the prepaid market with a low-cost proposition; they have then tried to attract the more affluent customers. Although the market in the Latin American region is still in its infancy, statistics related to Chile (see below) show the slow emergence of new players in the market.

WYKRES

The Future of the LatAm Telecom Market In formulating their business strategies for the coming years, CSPs in Latin America can benefit from lessons and best practices gathered by telecoms in Europe and North America, where certain trends tend to happen a bit sooner.

They can also learn from one another – with Chile and Brazil setting the pace in introducing digital services, such as M2M or m-payments.

M

500M 425M 350M 275M 200M 130M

2012

2013E

2014E

2015E

2016E

2017E

500M MOBILE BROADBAND CONNECTIONS ACROSS LATIN AMERICA BY 2017

Figure 4. Source: Economía Móvil América Latina 2013, GSMA http://www.gsmamobileeconomylatinamerica.com/SPA_LatAmME_v6_WEB_FINAL.pdf

Increased Competition or Regulations?

What Really Helps CSPs Improve Service Quality Considerations related to the quality of service have become an area of interest for governments and regulators alike. However, mobile operators need a policy and a structured regulatory regime and support in order to improve the quality of their offerings. Some issues that would need to be overcome include inadequate availability of spectrum and obstacles to the installation of new base stations (obtaining local permits and differences in the application of guidelines are the main challenges here). It seems that increased competition in the region would best serve the continuous improvement of service quality, as opposed to regulator intervention. Governments and regulators should focus on providing appropriate tools for telecoms to enable them to compete effectively. These include introducing appropriate regulations, providing equal opportunities to build and develop network infrastructure, forcing the biggest telecoms with proprietary networks to sell connectivity at a fair price to new market entrants, etc.

Comarch Technology Review 02/2014

The main focus will be put on increasing network coverage and delivering LTE to major cities in the region as well as on assuring the expected service quality. Growing deregulation trends set the scene for a competitive market, where customer satisfaction and an innovative service portfolio will start to be differentiators for service providers – ones that may be decisive in a given telecom’s long-term success or failure.

This new landscape will see Latin American CSPs adding new services to their portfolio based on customer demand (e.g., VoIP, LTE) and improving customer experience (quickly resolving network and service issues and providing customers with relevant information and solutions in a very short time).

The slow emergence of new competition – MVNOs – will also oblige telecom operators to adjust their service fees.

Increased competition in mobile markets and growing regulatory intervention are common themes in the fast-growing telecommunications industry. It is expected that by 2015 a number of Latin American markets (particularly the largest ones in South America) will enter the next level of business maturity, while smartphone penetration and mobile broadband usage and availability will grow.

IN FOCUS: Internet of Things

19

The business potential of IoT

Comarch Technology Review  02/2014

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IN FOCUS: Internet of Things

2017, according to Gartner, consumers will already be allowing smart machines to make at least 20% of their personal decisions [1]. By 2020, with an estimated 26 billion devices and products, service suppliers will generate incremental revenue exceeding $300 billion. More than 80% of supplier revenues will be derived from services [3]. Industries benefiting the most from the Internet of Things (IoT) will include manufacturing, healthcare, insurance, banking, and security.

By

KRZYSZTOF KWIATKOWSKI Comarch SA Head of BSS

Product Management, Telecommunications Business Unit

The development of the IoT is driven by a combination of factors, such as real user demand in a particular domain and users’ resistance to change. In some domains, even if there are potentially significant benefits and potential to grow (healthcare is a good example), corresponding applications such as personal / medical monitors or smart pills are unfortunately characterized by high systemic friction. This means that in these cases there are certain obstacles related to the business model, market structure, and regulations that hinder broader adoption. On the other side of the diagram, we have LED lighting (indoor and outdoor). Decreasing prices of M2M units will allow LED lamps to have built-in connectivity, which will enable controlling them remotely as part of smart city or smart home applications.

The approach to the IoT will also significantly differ between various geographical locations. According to Gartner, the North American market is evolving towards more sophisticated future-proofing elements, while the European and APAC markets

Many IoT-related projects in the automotive, smart cities, and utilities domains have long life spans and may potentially operate for decades. When selecting the technologies and suppliers for IoT projects, vendor stability is extremely important. The same goes for the supplier’s approach in the areas of security, networking, scalability, infrastructure and standardization, which may all influence the end-to-end service in the long term.

The Value is in the Information There is definitely enormous business value in the information the IoT generates. Devices may produce large amounts of messages – some only sporadically (e.g., smoke detectors), while others (e.g., vehicle tracing) may even generate one event per minute. These messages, combined with data about assets, social clouds and enterprise systems, create great amounts of information, which not only bring about multiple challenges, but also numerous opportunities.

The potential volume of information leads to the necessity of applying ‘big data’ solutions to support it. Various sources may produce different sets of unstructured information, which then have to be stored in a form ready for additional processing. As a result, this calls for NoSQL solutions to be used as an alternative for relational databases. Information processing requires ‘big data’ analytical tools (like Hadoop) in order to discover patterns, perform trends analyses, and make trans-

Smart household appliances

This image was published in "Forecast: The Internet of Things, Worldwide, 2013" by Gartner.

High

Car related

LED street and area lamps

Point of sale hardware market

Media consumption

Smart pills Vending machines

Demand

Toys

Sports related Digital cameras

Smart meters

Indoor LED lighting

Person/medical monitors

Moderate

On the graph, demand represents the combination of enduser interest and/or economic incentive to adopt a technology, where end-user interest typically applies to consumer applications, and businesses will consider the ROI when choosing whether to invest.

are more focused on achieving cost reductions and other efficiencies. [2]

Systemic friction is effectively resistance to change. It represents the combination of technological, infrastructure prerequisite, business model / market structure, regulatory and legal, and standards-related "barriers" to adoption of the technology in a particular area.

Alarms and security Digital signage Parking meters

Thermostats

ATMs Bluetooth headset, mouse, KB, speakers

Smart trash bins

Printers

High

Systemic Friction

Low

Figure 1 The potential and adoption of the IoT in verticals. Source: [3] Systemic friction means effective resistance to change.

The size of the bubbles represents the number of units shipped in 2020.

Comarch Technology Review 02/2014

IN FOCUS: Internet of Things

formations. But the biggest challenge starts when this kind of analysis must be performed in real time (this is where Storm technology or Complex Events Processing is needed), e.g., discovering if a large number of alarms from multiple devices are related to any pattern known from the past and then reacting properly within seconds, not hours or days.

The ‘logistics’ of the information poses yet another challenge.

This does not only relate to simple security issues (certain data must be secured and protected, while other data can remain open). The data collected from various devices may belong to certain individuals or businesses, and may be subject to different laws and regulations. (Some data may be related to telecommunication, other data related to utilities, and more data related to healthcare). Once the data is correlated, aggregated, and patterns are discovered, the information may still be owned by the same parties. The process of data presentation, storing, deleting, archiving and primarily exposing it to other parties must be strictly controlled in association with metadata information defining appropriate policies.

When all these challenges are somehow overcome, information available via the Internet of Things becomes a gigantic asset of both platform and service operators.

The information generated in the IoT can be monetized in the following ways: Using operational data, e.g., for optimizing processes, improving quality of living in cities, transport efficiency, lowering costs of manual activities, optimizing energy consumption, etc.

Marketing information, e.g., collecting information about consumer behavior based on usage of devices at home (heating, air conditioning, multimedia, lighting) and profiling it in order to better target entertainment content and advertisements

Extending the relationship with customers

beyond the asset’s useful lifeand using the information

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about usage patterns for better customer support, such as upselling of personalized insurance products (e.g., insurance policies depending on the driving profile)

Summary The abundance of information, in connection with the ability to control its logistics processes (e.g., which partner can buy the given piece of information, how long it can be stored, whether private information still remains private, if it is transformed and aggregated and who then becomes its owner, etc.), brings new opportunities to all IoT players and opens great possibilities for monetization.

There is no doubt that the Internet of Things is the future of communications. The question is: To what extent is it also the future of telecom operators? The business potential for telecoms lies in the possibility of offering not only connectivity and technology but also the “IoT vendor stability” as a supplier or partner. By using solid technology, horizontal IoT platforms, and advanced networks with SDN/NFV (software defined networking / Network Function Virtualization), CSPs can become operators of business-critical IoT applications such as alarm transfer services, automotive grids, and smart grids.

CSPs can benefit from areas in the IoT where security and value added in the form of its existing IT capabilities is crucial.

These areas include CSPs that offer their partners connectivity, IoT platforms, consulting and professional services, sets of devices, as well as billing and payment collection services.

There is definitely enormous business value in the information the IoT generates. Devices may produce large amounts of messages – some only sporadically (e.g., smoke detectors), while others (e.g., vehicle tracing) may even generate one event per minute.

References: [1] D. Furlonger, J. Cole, Business Moment: The Internet of Things Triggers a Cascade of Financial Services Activity Among Things, People and Businesses, Gartner, 2014 [2] Market Trends: TSPs Must Invest in the Rapidly Evolving IoT Ecosystems Now, Gartner, 2014 [3] P. Middleton, P. Kjeldsen, J. Tully, Forecast: The Internet of Things, Worldwide, Gartner, 2013

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IN FOCUS: Internet of Things

A technical look

at the IoT

B

asically, the concept of IoT will see an increasing number of devices in every home and office connected to the Internet. The future of this technology will enable us to control the appliances, lights, HVAC (heating, ventilating, and air conditioning) systems , and security systems in our homes at any time, from any location. This all sounds very exciting, but what exactly are the “Internet” and the “Things” in what appears to be the biggest buzzword of 2014?

Comarch Technology Review 02/2014

IN FOCUS: Internet of Things

Internet of Things vs. M2M: What’s the Difference?

Internet of Things (IoT) and Machine-to-Machine (M2M) are terms that are often used interchangeably, as up till now it has been unclear what the distinction between them really is. This is mainly because there is no formal definition of these two buzzwords; only industry-defined characteristics seem to highlight the differences between them.

M2M is focused on the communication of machines and applications using a network. Use cases focus on monitoring, controlling, or managing certain machines that act automatically or upon request. Machines may represent devices such as smart home equipment, connected cars, fitness gadgets, etc. On the other hand, Machines represent applications that perform data aggregation, make decisions, process data, present information, etc.

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pending on the particular scenario. Scenarios may be related to categories such as industrial applications (e.g., control over manufacturing processes), environmental monitoring (e.g., pollution monitoring), infrastructure monitoring (e.g., management and monitoring of wind farms), healthcare (e.g., personal medical assistance), smart cities (improving the overall quality of life in a city), and more.

Each scenario may be associated with various types of “things.” It can be as simple as a basic device that sends KRZYSZTOF periodic temperature measurements over a cellular conKWIATKOWSKI nection, without any additional intelligence. But it may well be a very intelligent personal assistance device having ECG Comarch SA (electrocardiography) algorithms that can analyze the heart’s Head of BSS Product Management, activity, detect potential heart failures, send appropriate information to the service center, or even send an alarm over Telecommunications the network to the service center.

Business Unit

Figure 1. M2M versus IoT

IoT is a much broader concept that encompasses the exchange of information not only between machines, but also between social media services, ERP applications, etc. The focus is not on M2M communication but on the information generated by the ecosystem of multiple assets and usage of this information.

The “Things” Many types of devices and assets may represent the “Things.” Everything that can connect to the Internet is part of the IoT, but each object may be treated differently, de-

From the point of view of connectivity, devices may be connected directly to the cellular or fixed network and have an embedded GPS/GPRS connectivity module, like in the picture below.

But it doesn’t make sense to have SIM cards installed in each device (e.g., in each motion or smoke detector at home). Devices may connect with a dedicated gateway using a Home Area Network (e.g., Wi-Fi, Bluetooth, ZigBee). The gateway may aggregate various local connections with devices into one stream of communication with the network, and it may

Figure 2. Sample quad-band GSM/GPRS module and smoke detector with embedded cellular communication unit (source: www.quectel.com, http://www.homesecuritysystems.co.uk/) Comarch Technology Review 02/2014

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IN FOCUS: Internet of Things

Internet of Things

Cellular or fixed network Gateway Application

Firmware

Local area network Device Application

Device Application

Device Application

Device Application

Firmware

Firmware

Figure 3. Five groups of device types

even have local intelligence (e.g., being a center of smart home automation – controlling (locally and remotely via mobile devices) air conditioning, window shutting, heating, lighting, etc.).

Devices in the Internet of Things can be classified into five groups (a similar classification has also been proposed by ETSI: 1. Device type A, with simple embedded logic, directly connected to the network, e.g., the smoke detector in Figure 2. The logic of the device is placed in embedded software (device application written in pure C, Java, sometimes using Python or Lua), which means that it is the only software working on the device, without any universal capabilities layer, operating system, or firmware.

2. Device type B is similar to device A but has its own firmware, on top of which the device application works. It can even be a Linux-based operating system with various applications working on it. The firmware provides an abstraction layer for applications, such as communication with hardware, local sensors, actuators and also serves as an abstraction layer related to communication or even software / firmware upgrade processes. A Personal Medical Assistant can be an example of such a device.

Comarch Technology Review 02/2014

3. Device type C is similar to type A in terms of not having its own firmware. However, it communicates with the world through the gateway using the Home Area Network. Home smoke detectors or motion sensors fit in this category.

4. Device type D also communicates with the network through the gateway but has its own firmware, with many capabilities to be used by local applications.

More advanced home appliances are devices of such type, such as intelligent refrigerators or heating control systems.

5. Device type G (the gateway) aggregates the Home Area Network and provides connectivity for devices.

In some cases, a local Wi-Fi router can play this role.

Many gateways are created or at least prototyped with the usage of Raspberry Pi. These types of devices exchange information using various types of communication protocols. Unfortunately, there is no single standard. Since many suppliers use their own communication protocols, it makes it challenging to connect multiple types of devices to the Internet. Fortunately, there are some promising standardization activities (e.g., OneM2M – integrates various M2M standards into a common one; OASIS – adapts the most popular communication protocol (MQTT) as a standard). Progress in standardizing and adopting these

IN FOCUS: Internet of Things

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Figure 4. Sample IoT ecosystem

standards will increase migration from the M2M approach to the IoT approach (Figure 1) and make creating real IoT ecosystems possible (Figure 4).

Choosing the communication protocol to be used in a particular project should take various aspects into consideration: battery consumption, bandwidth requirements, security, routing flexibility, quality of service (QoS), and capacity. But it’s usually best to decide to use the protocol that is most widely adopted in a particular industry vertical (different protocols are used in consumer electronics and in industry automation).

The “Internet” The IoT cloud, presented in diagrams below, hides the real enabler of “Internet”: a horizontal IoT Platform, to which all devices are connected. The platform should enable communication between devices, assets, social clouds, and enterprise systems in a unified way. It must connect industry-specific requirements (such as MQTT, CoAP, and XMPP protocols) with a standard-based approach (e.g., ETSI M2M architecture).

The core of the IoT is a high-performance messaging broker that is responsible for connecting various technologies, protocols, and abstraction layers and that allows the rout-

ing of messages between various devices and applications.

The platform must also be highly available because in many cases business-critical IoT applications require a high degree of reliability with guaranteed quality of service (e.g., timely and accurate message delivery in the case of alarm-related or healthcare applications).

But the IoT relates to a much broader context than just devices: it encompasses communication involving social clouds and enterprise systems. An IoT application may read temperature measurements delivered by a particular device, the same way as in the case of retrieving certain data from an ERP system. It may also send some data to a cloud-based service, such as Twilio (which provides telco APIs to services such as text-to-speech) or to another device in a customer’s home.

In most cases the application is not just one module deployed on the device or in the cloud. Often, end-to-end IoT applications have modules deployed in many locations (devices, gateways, smartphones, tablets, and in the cloud).

Smart home application is one example, with its multiple modules distributed among many appliances.

Smart Objects allow events collected from various sources (e.g., temperature measurements, alarms, location information, etc.) to be stored as transformed, unified information.

Data received from various devices (even simple tempera-

Comarch Technology Review 02/2014

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IN FOCUS: Internet of Things

IoT Platform IoT Application - business logic and data presentation

Smart Objects

Big Data Analytics

Service Monitoring

Device Management

APIs

Monetization

High-Performance Messaging Broker MQTT

Devices

REST

CoAP

Assets

XMPP

Interworking Proxys

Clouds

Enterprise Adapter

Enterprise Systems

Figure 4. Horizontal IoT Platform as an enabler of the Internet of Things – simplified set of required features

The core of the IoT is a high-performance messaging broker that is responsible for connecting various technologies, protocols, and abstraction layers and that allows the routing of messages between various devices and applications.

ture measurements from different vendors sending data via MQTT and JSON) may have different internal formats. In order for the information to become consistent, it must be transformed and unified before it gets stored in the form of Smart Objects.

All IoT applications communicate with the Internet of Things over a set of APIs related to various service capabilities, e.g., Communication Selection, Remote Entity Management, Data Storage and Authentication. Other capabilities, available for business and technical users, are related to end-to-end service monitoring, managing the inventory of assets and devices, and handling all monetization aspects in relation to end-users and partners. Monetization is related to handling multiple contractual and financial scenarios between endusers, partners, and operators and includes partner management, charging, billing, and payment collection, all in the context of IoT applications.

Summary There are many players on the market trying to offer an IoT Platform in the cloud as an Internet of Things enabler. These companies include small players (like Carriots or CubeNube),

Comarch Technology Review   02/2014

open-source platforms (DeviceHive), large platform specialists (DeviceWise, M2Mi, SeeControl, Xively), and equipment producers that offer platforms (Digi International, Gemalto, Sierra Wireless). There are also big, multi-industry software vendors that offer the same type of platforms (Oracle, Microsoft). In addition, there are big, vertical solution companies that for many years now have delivered large M2M/ IoT projects (such as PTC or Eurotech) that also have own platforms both for own projects and available in the cloud for partners.

Unfortunately, each company in the Internet domain of the Platform provides own standards, own method of data exchange, internal application development APIs, etc. This brings additional challenges related to compatibility and migration of solutions between platform providers.

It seems that one of the most important things that may help in developing the IoT is broader adoption of standard-based solutions related to connected devices; before this, however, IoT standards must become more mature and international.

The IoT is still in the very early standardization phase. As a result, this means that most of the existing solutions are vertical and characterized by very closed domains, more M2Mlike, not IoT-like (Figure 1).

The IoT is still in the very early standardization phase. As a result, this means that most of the existing solutions are vertical and characterized by very closed domains, more M2M-like, not IoT-like

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IN FOCUS: Internet of Things

Beacons:

GRZEGORZ WĄCHOCKI Comarch SA,

Business Unit Director, Internet of Things

the next big thing for your business?

B

Comarch Technology Review 02/2014

eacons, small electronic devices that have received a lot of publicity in the past couple of months, are still quite a mystery for many people. Knowledge about how they work and what they do seems to be quite vague.

IN FOCUS: Internet of Things

You can look at a beacon as if it were a lighthouse: its purpose is to be seen from a distance and serve as a waypoint.

Instead of light, beacons use electromagnetic signals to broadcast information. The technology in use here is Bluetooth Low Energy’s (a part of the specifications for Bluetooth 4.0, also known as Bluetooth Smart) advertising mechanism to achieve connectionless communication between the transmitter (beacon) and the receiver (usually a smartphone).

This approach was first proposed by Apple and introduced in iOS7 as iBeacon, a technology that empowers applications with new capabilities for location awareness. It opened up new possibilities to establish an area around a beacon that an iOS device can recognize when entering or leaving the specific area, as well as estimate the approximate distance from the device to the beacon Since then, the technology has been adopted in other major mobile platforms. It is safe to say that in the foreseeable future it will become a prerequisite for mobile platforms to support this technology.

Beacons in Practice: Use Case Scenarios There are countless possibilities for using beacons in business. The most typical use cases are related to indoor navigation and advertising. Even though establishing location by means of beacons is still not precise, it is good enough to establish an area that serves the context of the application and makes it possible to implement most of the location context aware use cases. Yet sometimes it is necessary to put a lot of thought into establishing both the beacon’s setup and the environment in which a given application will work smoothly.

A shopping mall is a classic example of a beacon use case scenario. One can easily create an application that will be aware of the area in which the user is located. Then, a message can be sent that is appropriate to the context, e.g., point the customer to the closest restaurant or display a promotional ad in a nearby shoe shop. It is also possible to navigate users through the building to places of their interest, e.g., a particular shop located in another wing of a different floor.

These cases do not require a very precise location of the user. It is enough to achieve precision that goes down to the level of a corridor or wing. However, the complexity grows if you want to use beacons to send information about two different products placed on adjacent shelves in the same shop. In order to provide a user with a detailed description of these products, the application has to recognize which product the user is interested in (in most cases, the one that is closer). This can also be implemented to a certain extent by estimating the distance (one of the features offered by the beacon technology). It would require, however, users to have their smartphones close enough to the product in question in order for the application to inform users about the correct product without confusing or annoying users.

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Limitations of Beacons

The large variety of use cases people have come up with has made beacons very popular, created a lot of publicity around them, and caused significant expectations related to ways in which they can be used. However, not everything that people can imagine can be implemented with this technology, as it is still quite simple. But over time, beacon technology will most certainly be further developed.

In responding to market demand, some companies have already proposed new features and variations of beacons, thus making it possible to implement new use cases. These features cover a wide spectrum of functions and applications: improved precision of location, improved security features, and adding sensors (such as a temperature sensor or an accelerometer). These additional features are usually an extension to the standard iBeacon feature set. Although development is ongoing and unavoidable, it is not clear which direction it is going in. Market adoption, real business cases and economically viable deployments are still scarce. Commercial applications are in their infancy, so it is hard to say if and how the technology is going to help drive real business and what its strengths and weaknesses will be. This uncertainty can be perceived as a good thing, as it means there is still much to be done, there is a lot of space for innovation, and – most importantly – many shares of the revenue pie are still up for grabs. The most efficient ways to monetize beacons have yet to be found. It is this process that is going to drive the development of this promising technology.

There are countless possibilities for using beacons in business. The most typical use cases are related to indoor navigation and advertising. Even though establishing location by means of beacons is still not precise, it is good enough to establish an area that serves the context of the application and makes it possible to implement most of the location context aware use cases.

What Does the Future Hold?

Today, the limitations of beacons are quite significant. This is both because a beacon is a simple device in its concept and because of the Bluetooth standard itself: it was not initially intended for this kind of application. A beacon is not a feature directly predicted in the Bluetooth specification, but more of a smart application of a mechanism intended for something else. Now, along with the increasing popularity of beacons, it is very likely that in the future such usage will also be taken into account. New enablers will appear, making way for even more advanced features we cannot imagine.

Beacons are interesting and promising devices that seem to bring the location context to applications at a scale we’ve not seen before. This seemingly trivial solution is getting more popular. Along with this popularity, the demand for new features and applications is growing rapidly. It has become quite obvious that the technology will be developed in order to support new functions and to improve the existing functions. The ultimate shape of beacon technology is still to be found; it will strongly depend on the possible business cases that can apply it.

Nevertheless, it now appears unimaginable that the new world of context-aware applications can work without beacons.

Comarch Technology Review 02/2014

The new role of billing systems in the Internet of Things

IN FOCUS: Internet of Things

T

he Internet of Things (IoT) can be described as a multitude of connections between various computing devices connected to the Internet. A new kind of connectivity between devices, systems, and services appeared, bringing in a phenomenon much broader than machine-to-machine communications (M2M).

IoT can be useful in many different vertical industries including: automotive, retail & payment, logistics & transportation, consumer electronics, healthcare, industrial & smart business, security & surveillance, energy & utilities, smart city & smart home. According to Gartner, there will be nearly 26 billion devices on the Internet of Things by 2020.

The Variety of Players in the IoT/M2M Ecosystem

In the IoT/M2M market partnering will be a key factor of success because providing services alone will be simply impossible. Over 28% of providers surveyed indicated that these partnerships will be difficult to establish particularly in terms of identifying the right partners for new services, restrictions due to lack of relationships with the main issue being the lack of control over the value chain. (Source: TM Forum Communications Service Provider Digital service Survey 2012) As the IoT value chain is quite long, the following players can be identified in theIoT ecosystem (take a look at the diagrams below for a bigger picture): Communications Service Provider (CSP) – provider of the communication service between the end devices, as well between end devices and the management platform. In most cases the technology used for such communication is mobile (2G/3G), so CSPs are playing the role of a Mobile Network Operator (MNO).

Provider – provides the IoT/M2M service. This can be a CSP or a third party. An M2M provider can offer services directly to end users (B2C) or sell via M2M customer / resellers (B2B).

Application Provider – delivers a specialized vertical application used in particular industries or (in more general cases) delivers an application enablement platform that supports the development of vertical applications.

Device Provider – assembles devices that can be delivered to end users directly by a device manufacturer, or by a CSP, a third party or a customer / reseller.

Third Party Partner – any company or organization providing additional services in the IoT ecosystem (e.g. an insurance company).

Customer / Reseller – resells IoT/M2M services to end users – it can be simple reselling of services delivered by an IoT/M2M Provider or it can also encompass additional professional services like deployment, maintenance, consultancy or any VAS, offered by an IoT/M2M Customer End User – a user of an IoT/M2M service.

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In the IoT / M2M market partnering will be a key to success, because providing these services alone will be simply impossible. In a TM Forum Communications Service Provider Digital Service Survey (2012) over 25% of providers indicated that these partnerships will be difficult to establish, particularly in terms of identifying the right partners for new services, restrictions resulting from lack of relationships and, predominantly, lack of control over the value chain.

In order to effectively manage IoT / M2M services providers will need to use platforms that include: BSS modules (selfservice dashboards, CRM, billing, logistics), OSS modules (connectivity management, service activation), as well as device management and application enablement functionalities. Depending on its role in the ecosystem a provider will implement all or only selected of these elements.

WOJCIECH MARTYNIAK Comarch SA

BSS Solution Manager

The Business & Pricing Models Just a short glimpse at the kinds of players in the IoT ecosystem lets you imagine how big the number of relations and settlements between those entities is. In some cases, it could be a very simple selling process, while in others, it can be an extremely complex revenue chain, depending on the provided services and the relations between the involved parties. Examples of processes and relations in this ecosystem include direct sales to end users / customers, billing on-behalf, reselling or branding.

According to the TM Forum’s document, Billing and Charging Machine to Machine (M2M) Challenges, there the kinds of pricing in IoT models are obvious: Value-based pay-per-use model is based on how devices are being used – e.g. a device may receive data intermittently at irregular intervals, such as in the case of using an eBook reader or a tablet. In this scenario an operator would benefit from a fraction of the purchase price for each item downloaded onto the device .

Criteria-based flat rate – the CSP receives a fixed monthly or annual fee from the end user (indirectly, via the Customer) for unlimited usage. Although this model is not new, it would now support scenarios where more consistent connectivity is used with minimal bandwidth.

The challenge operators will face in this model is having to take into consideration many more variables than in the case of using a simple flat rate model.

Consumer device models are based on the data package size (5Mb, 1Gb, 5Gb, etc.) with services offered on a first come first served basis. In this model the data becomes the commodity – the pricing model is not device-specific, and provides the ability for any device with a SIM card to select a flat rate plan, based on a predicted amount of data usage.

Enterprise device model is pricing based on application type. High priority services, such as emergency medical services (EMS), would receive better quality of data than a lower priority service (such as a vending machine). This model’s pricing is based on the real value of data.

STANISLAW ZBROJA Comarch SA

BSS Solution Manager

Comarch Technology Review 02/2014

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IN FOCUS: Internet of Things

In the IoT / M2M market partnering will be a key to success, because providing these services alone will be simply impossible.

In a TM Forum Communications Service Provider Digital Service Survey (2012) over 25% of providers indicated that these partnerships will be difficult to establish, particularly in terms of identifying the right partners for new services, restrictions resulting from lack of relationships and, predominantly, lack of control over the value chain.

Tailored pricing is based on a case-by-case situation, where the model suits particular needs of a given Customer and the service(s) they are providing. A wide range of tariff plans will be needed to allow discounting rules at the Customer and even at the End User level.

This pricing model would be used e.g. for direct negotiation of contracts.

Diversity in a Real M2M Case Scenario Imagine a following scenario in the M2M ecosystem. An M2M Provider (MNO in this case) is selling not only SIM connectivity services, but also many additional value added services: access to an application that manages devices, the devices themselves, insurance, consultancy, support and many more.

With such service scope the interconnected network of relationships is quite large and consists of: MNO that plays a role of a CSP and a comprehensive M2M services Provider Application Provider enables the MNO to use its functionalities to manage devices with SIM cards, access reports, management dashboards and APIs

Device Provider provides the MNO with monitoring devices for home owners, with theft monitoring, fire alarm and temperature monitoring options Insurance Company (Third Party Partner) enables a special insurance option in case the M2M device is installed in your home M2M Customer sells “Intelligent Home Security” services End User – retail end customers (home owners) as well as business end customers (developers)

The M2M Customer can have a direct relation with the Insurance Company, as well as with the Device Provider. On the other hand, the MNO can increase its influence and control and may want to extend its partner network, separately for each vertical in the M2M market. Usually additional contracts with a SIM card manufacturer, billing system / M2M platform vendors and resellers, as well as delivery service providers are needed. Whatever the complexity of relations, we can identify some basic payment flows in our scenario: Flow A: the MNO is paying the Application Provider for the use of the Application Platform Flow B: the MNO is paying the Device Provider for delivering the devices

MNO CSP & M2M Provider

Automotive

Retail & Payment

Industrial & Smart Business

Logistics & Transportation

Consumer Electronics

Application Provider

Insurance Company 3rd party Partner

Device Provider

„Intelligent Home Security” M2M Customer

Healthcare

End retail User

Energy & Utilities

End business User

Smart City & Smart Home

Figure 1. Complexity of relations in an exemplary M2M case scenario

Comarch Technology Review 02/2014

Security & Surveillence

IN FOCUS: Internet of Things

Flow C: the MNO signs agreements with the Insurance Company for insuring devices and SIM cards in the services used by its customers and pays a fee for each agreement Flow D: the M2M Customer is paying the MNO for a SIM card, device, application and insurance

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Flow E: the M2M Customer is selling a service, such as Intelligent Home Security, which gives the End User (retail or business) a full bundle of services: device with SIM card, management platform, insurance, consultancy and support

In M2M business we can distinguish different pricing models for each vertical:

MNO CSP & M2M Provider

- payment

M2M Provider layer

D B

C

A

Partner layer Application Provider

Insurance Company 3rd party Partner

Device Provider

„Intelligent Home Security�

M2M Customer D

M2M Customer layer

D

End User layer End business User

End retail User

Figure 2. Different models in various verticals

Billing on behalf based on Enterprise Device Model in healthcare Direct sales to a Customer based on Flat Rate Model in security & surveillance Branding based on Tailored Pricing Model in smart city & smart home.

How Modern Billing Systems Support IoT Complexity What is crucial for the whole IoT ecosystem, is that billing has to support all relations, levels of charging and processes for the end-to-end billing chain. The whole financial area is quite large and can be described as multi-leveled, multi-tenant, multi-device environment where billing has to take into account SIM & device Lifecycle as well as Customer / Reseller

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IN FOCUS: Internet of Things

& End User Lifecycle with different states and transitions between them. Billing support for SIMs, devices and even applications will involve different rules in terms of payments (one time, usage, recurring), source of data, QoS policies and many more while support for partnerships has to gather unlimited numbers of organizations, agreements and settle-

ments. The confidence that billing has to be associated only with a SIM card and a device is not valid any more.

In our case scenario, the billing system should create a kind of a “cloud” over the whole environment:

MNO CSP & M2M Provider

Billing for Insurence package

Billing of Application use

Application Provider

M2M Provider layer

Billing of Device use

Insurance Company 3rd party Partner

Device Provider

Billing of SIM use B2B

Insurance package

Application use

Partner layer

Device use

M2M Customer layer M2M Customer One invoice for all services

Billing of SIM & VAS use B2B2C

End business User

End retail User

End User layer

Figure 3. Financial flows in an exemplary case scenario

IoT has changed the way of thinking about billing processes, adding a significant number of new business models and cases. In the past few different kinds of relations had to be handled by billing tools, today the service and player diversity makes them go into hundreds.

Comarch Technology Review 02/2014

Finally, it’s not only about relations but especially the big volume of data, not to mention hundreds of different policies and pricing plans, rules and catalogs. In the IoT world new services, prices, relations have to be introduced smoothly and rapidly. And the whole end-to-end value chain can be really long and complex.

IN FOCUS: Internet of Things

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Comarch Technology Review  02/2014

36

CSP PERSPECTIVES

How large CSPs like Vodafone utilize Comarch OSS to cope with todays challenges T

oday’s market conditions are more and more demanding: a multitude of new technologies and partners need to be managed; increased competition requires new operational models, and so on. How do large Communication Service Providers such as Vodafone cope with these challenges? What is the role of OSS in this competition? What kinds of OSS capabilities are expected for the future?

An interview with Oliver Birnbaum, Head of Network & Service Assurance Systems Engineering, Vodafone Germany.

Comarch Technology Review 02/2014

37

CSP PERSPECTIVES

Jörg Frankenberger: The telecommunication market is under enormous pressure. Customers expect more and more, which drives investment needs especially for data services. Yet revenue figures have stopped growing due to increased competition, market regulation, and the economic downturn in many parts of Europe.

OSS & BSS are seen as key enablers to help Communication Service Providers to cope with the above factors.

Mr. Birnbaum, what are the key challenges facing you?

What are the expectations for Network & Service Assurance systems and your team?

Oliver Birnbaum: Cost reduction and continuously

increasing operational efficiency are musts. We therefore need to replace existing legacy tools with scalable and open OSS solutions that offer a rich set of capabilities to automate operational processes and can be shared across different technologies and organizations.

OSS. But reducing maintenance costs and investment needs is of equal importance. Simple consolidation of tools is not enough. We are looking for OSS solutions that can be used by multiple organizations even across country borders. The implementation of our Comarch-based Next Generation Service Assurance Solution is a good example for this. The system has been used to consolidate the Fault & Service Management systems of three countries and is shared by Vodafone Germany, Netherlands and Czech Republic.

JF: But how can you support process deviations and

individual market characteristics of different countries with a common Service Assurance solution? Don’t you lose flexibility and slow time to market due to dependencies and high coordination needs between the different projects?

mean?

Change Mgmt.

Data Sources

BMC Remedy

Site Access DB

BMC Remedy

Change Management Site Access Management

BMC Remedy

Inventory Data Sources

GE

User NL User RO User GE

GUI Server

NGSA Inventor y& Service Model Cache

Events

TT

Out age

Alarms

GUI

Comarch NGSA & SQM

NGSA KEDB/Correlation/ Impact/RootCause Analysis

IT IT Mgmt.

Mgmt.

SQM

NGSA Mediation

Site IT Server Mgmt

SA DE Alarms

Vodafone Czech

Vodafone Netherland

Vodafone Germany

Vendor specific Element Mgmt.

Systems

Vendor specific Element Mgmt.

Systems

Vendor specific Element Mgmt. Systems

IT Mgmt Systems IT Mgmt.

BMC Atrium

CRAMER (mobile network) CRAMER (fixed netw.)

Systems Engineering.

User CZ

Enterprise Service Bus

CMDB

& Service Assurance

CZ NL RO

200-350 parallel sessions

BMC Atrium

Vodafone Germany,

Head of Network

Central Vodafone NOC in Romania, Local Markets

Service Mgmt.

Customer Care Tools Corporate Customer Info Management

OLIVER BIRNBAUM

OB: Initially, our internal customers had these concerns as

Trouble Ticketing

Alarm Clients

well. In reality, though, we were even able to shorten time to market for new services due to the simplified OSS architecture and the modular, CMDB-based solution approach

JF: What does “shared across different organizations”

NOC Dashboard

OB: Increased operational efficiency is a key expectation for

PDRs

IP Network Management Systems

Vodafone Germany

Network Element Management Systems

PM Data Sources Active Probing Passive Probing Customer Experience Management

Comarch Technology Review 02/2014

38

CSP PERSPECTIVES

that has been implemented with the new Service Assurance framework. A good example for a quick and cost efficient adaptation of the solution was the migration of the Network Monitoring for Vodafone Netherlands from their former Fault Management system to Next Generation Service Assurance.

This was completed in just three months.

JÖRG

FRANKENBERGER Comarch AG,

OSS Strategy

Principle Advisor

JF: Oliver, you mentioned a “CMDB-based solution approach” that was applied when implementing the solution. Could you expand on that just a bit?

OB: Efficient management of converged service offerings be-

came a real challenge for operations over the last years. Service delivery chains were getting more and more complex. It is quite common that you have multiple internal and external parties involved in these service delivery chains.

Let me give you an example. A corporate customer uses fixed network IP VPN services provided by Vodafone to connect its branches to a central data center that provides all needed IT applications. The customer’s sales force uses 3G/4G based mobile data services to access order management tools and other IT systems.

Without capabilities to perform automated, service model driven impact propagation, nobody in the NMC or SMC would be able to manually predict the potential impact of equipment outages in the fixed or mobile network for this or other corporate customers. Thanks to the CMDB-based approach that has been introduced with the implementation of the Next Generation Service Assurance framework, we are now able to proactively notify our corporate customers about outages or potential service degradations that may impact their business.

JF: Your example is a corporate customer-related use case. Not all Telecommunication Service Providers focus on corporate customers as much as Vodafone does. Is there another business benefit you could realize based on the service model driven assurance approach?

OB: Increased competition requires a strong focus on custom-

er satisfaction, which is directly linked to the perception of Network & Service Quality we leave with our customers. Automated root cause analyses and impact propagation minimize time to repair and time back to service. This is a general advantage of our solution approach, independent of customer segments.

Of course, top customer satisfaction cannot be achieved with purely reactive measures. Proactive monitoring of network and service quality therefore plays an important role in our service assurance philosophy. The Next Generation Service Assurance Solution provided by Comarch supports this aspect in an ideal way because embedded Service Quality Management capabilities enable a continuous monitoring of KPI’s & KQI’s associated to our customer service offerings.

JF: What kind of data source do you use to monitor network and service quality? Do you have a dedicated quality management team that does this monitoring?

Comarch Technology Review 02/2014

OB: We use all kind performance data sources to feed SQM. These range from network KPI’s based on NE counters, which are collected and processed by our umbrella performance management system, up to event based data records provided by active and passive probing and customer experience management systems. Depending on the measured object, the incoming data is automatically converted into KPI’s and KQI’s that are linked to the monitored resource and customer facing services.

And to answer your second question: There is no need for dedicated service quality teams for online monitoring, as SQM provides capabilities to perform a continuous threshold monitoring that automatically creates SQM events. These are presented to the NMC/SMC teams as any other type of network or service alarm. Of course, SQM alarms may require different follow up activities, but these are typically carried out by second level functions or a specific Service Quality Team, which are triggered by the first level after initial analysis.

JF: Oliver, that sounds pretty impressive. So what level of automation do you think can be realistically achieved?

How would you describe a typical operational scenario at Vodafone in 2016?

OB: From a functional perspective, the OSS capabilities needed for 2016 are not that far away from what I have described. The main focus of our most recent OSS initiatives is to further increase the level of automation. This is achievable to a large extent by improved utilization of the OSS capabilities we already have.

Let me illustrate this with an example. Today we may automatically suppress, filter, and correlate 60% of the incoming network alarms. However, the majority of the remaining 40% of alarms are still handled manually by operators, even though in principle we have capabilities to automatically process them. The devil is in the details. Automatic service impact propagation and creation of trouble tickets is no longer considered fancy, from a technological perspective. The master question is how we can get and maintain the needed knowledge in the systems. How to efficiently maintain service models needed for automated service and customer impact analysis? How to capture the expert knowledge that is needed to automatically initiate the right recovery activities?

In 2016, the majority of alarms will be processed 100% automatically. Manual operator intervention will only be applied for unknown types of events or specific alarm scenarios that require more thorough analysis. For all other types of events, collection of additional information needed for recovery purposes, as well as execution of basic recovery measures, will be executed automatically. And this of course includes the automated creation of trouble tickets to second level or third party functions, such as field service teams if needed. Only in cases where these activities fail or in cases of alarms that require manual user interaction operators will be involved.

JF: Thank you very much Mr. Birnbaum.

CSP PERSPECTIVES

39

Increasing the efficiency of Field Service Management for ViaSat, Inc. The Challenge

Thanks to the acquisition of WildBlue Communications, ViaSat has become an important player in the market of satellite Internet in the United States, delivering internet services in places where other technologies do not. The rapidly increasing number of new customers has raised new challenges in mobile workforce organization and efficiencies.

As a result, ViaSat was looking for a solution that would help the company satisfy customer expectations for excellent service and the increased demand for broadband services.

The Business Need

ViaSat’s delivery of broadband services throughout the United States, while working with many sales and fulfillment partners, necessitates requirements for optimal planning of resource usage and flexible management tools.

ViaSat needed software that had the functionality to centrally manage work orders dispatched to different fulfillment providers, including fulfillment partners and self-installing dealers. It was important for ViaSat to prioritize work orders and assess fulfillment providers and smartly automate processes that clear executed tasks.

It was also important for ViaSat to determine upon the first call the time required to install or repair customer equipment, and promptly dispatch field work orders with no manual manipulations. Satisfying these requirements was necessary for ViaSat to provide excellent customer service. Central and automated reporting were also needed to provide real time information on the status of individual work orders, and monitor key performance indicators (KPIs) for the company’s services and the performance of its fulfillment providers.

The Approach

Comarch proposed a comprehensive Field Service Management solution that allowed ViaSat to achieve: Efficient allocation of technicians and dispatchers, with availability control and skill management Advanced management of fulfillment partners, with automated dispatching of tasks, definition of warranty rules, monitoring and escalation tools

Comarch Technology Review 02/2014

40

CASE STUDY CSP PERSPECTIVES

...

Fulfillment Partner System 3

Fulfillment Partner System 2

Fulfillment Partner System 1

Serving over 600,000 subscribers in the United States, the company offers services to home and business customers directly and via resellers including DISH and the National Rural Telecommunications Cooperative (NRTC).

3rd Party Fulfillment Partners

Provisioning (Conexon)

SVT (signal quality check)

Company that acquired WildBlue Communications is ViaSat’s two-way satellite Internet service provider division.

Truck Roll Closure (for closing work orders remotely)

About ViaSat, Inc.

Convergys Infinys (orders for existing customers)

WB Order Service (new customer order entry app)

WB CSRs

XML AGENT

In January 2012, ViaSat launched a new, much faster satellite Internet service called Exede® by ViaSat. The service increases the speed and capacity of satellite Internet dramatically through the use of the ViaSat highcapacity satellite system, which includes the 140 Gbit/s ViaSat-1 satellite.

ORDER API Field Techs

Comarch FSM

Dispatchers

ORDERS AND TASKS

FSM INVENTORY

RESOURCES

REPORTING

TIME MANAGEMENT

AUTOMATIC DISPATCHER

3rd Party Fulfillment Partners

Full control over work order fulfillment – starting from the creation of a Reporting to ensure that KPIs are achieved work order with a defined The execution time, through dispatching, execuSolution tion and closure of work orders Comarch Field Service Management is a complete solution that ensures the automated management of technical staff, resulting in less paperwork and better accuracy of scheduling customer visits. It The also provides complete support for technicians in the field, including Result

accessand to the system. work orders, An automated process of mobile scheduling processing leading to improvement in dispatchers’ and technicians’ productivity

With the launch of its ViaSat-1 satellite, ViaSat has enhanced the quality of its services through faster Internet access speeds and greater Functionalities: coverage. Comarch’s software helps the company improve the quality • Dispatcher dashboard ensuring simple graphical tools for editing andcustomers’ assigning work in thethe context of available resources of its livesorders through installation of outstanding commu• Technician access to full information including mobile access nication to the system The Solution services.

• Automated scheduling to ensure Comarch Field Service Management is a complete solution thatcustomer ensuresvisits are planned in accordance with the availability of resources • Resource management ensures the optimal allocation of resources a given time the automated management of technical staff, resulting in less paperwork ViaSatatbenefits from Comarch’s software include: Fulfillment partner management ensures that work orders dispatched to different subcontractors such as sales and fulfillment partners • and better accuracy of scheduling customer visits. It also provides complete be managed centrally support for technicians in the field,can including mobile access to the system.

Shortened time to arrange customer appointments and execute • Reporting to ensure that KPIs are achieved escalation procedures Support for techs in the field who receive on-line access to their lists of tasks and task details and the potential to report task exeFunctionalities: cution Dispatcher dashboard ensuring simple graphical tools for editing and Full reporting with automated reporting schedules and distribuassigning work orders in the context of available resources tion for quick analysis of field situations Increased number of work orders executed daily, enabling new customers to enjoy ViaSat’s services more quickly Technician access to full information including mobile access to the system Automated scheduling to ensure customer visits are planned in accordance with the availability of resources

Why Comarch

Resource management ensures the optimal allocation of resources at a given time

“Comarch Field Service Management enabled ViaSat to automate order and resource management processes, which has enabled us to provide an excellent customer experience in fulfilling customer orders.”

Fulfillment partner management ensures that work orders dispatched to different subcontractors such as sales and fulfillment partners can be managed centrally

Comarch Technology Review 02/2014

Brian Crouthers, Director of Field Operations, ViaSat Inc.

OSS IN THE DIGITAL ERA

41

How telecoms can adjust to the reality of the digital era Standardizing data, applications & processes

Comarch Technology Review  02/2014

42

OSS IN THE DIGITAL ERA

In

order to find new streams of revenue and maintain their current customer base, communication service providers are focusing their business innovation on services instead of connectivity. Recent years have seen a revolution in digital services that has given rise to new business models in the following fields:

MICHIEL NUYTEMANS

Comarch

OSS Solution Manager, Telecommunications Business Unit

Digital services: mobile payments, video-on-demand, communication tools, etc.

Cloud and virtualization services: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).

M2M solutions: solutions and connectivity for all kinds of devices (Internet of Things – IoT).

Most telecom operators are already active in each of these segments. They are competing with various over-the-top (OTT) players in offering mobile payment solutions, messaging applications, and virtual infrastructure for enterprisescale applications. This shift has clearly had an impact on telecom operators’ legacy BSS/OSS environments. They have had to adapt over the last two decades from offering fixed and mobile telephony to complex IP services.

What Business Models can CSPs Adopt in the Era of Digital Services?

There are three basic business models CSPs can adopt to take advantage of the digital revolution: Digital service provider – developing and providing endto-end digital services to their own customer base Digital service enabler – offering other service providers (e.g., OTT) assets such as a customer base, billing or service quality management capabilities, etc.

Connectivity provider – using proprietary networks to offer connectivity and infrastructure to other service providers.

As networks become more complex, new technologies are necessary as an add-on to the legacy infrastructure in order to provide service continuity. CSPs are now looking at leveraging heterogeneous networks and NFV/SDN to ensure their networks demonstrate sufficient flexibility and efficiency for future business models.

The optimal strategy to follow will differ from one operator to another. Focusing solely on network connectivity will, however, be reserved for a small number of operators who will manage the “pipes” for other service providers. Many CSPs will either need to develop their own digital services in cooperation with various partners or instead offer these services to other providers. In reality, most CSPs will adopt a mix of strategies, depending on the type of service, type of customer, and other factors.

Before we dive into the challenges CSPs face in adapting their operational environments to the digital revolution, it’s important to highlight why BSS/OSS should be discussed as one entity, instead of being referred to as two separate entities. Both CSPs and vendors clearly separate the functionalities and responsibilities in each of the domains. Different teams are responsible for BSS and OSS. They have different priorities, objectives, and processes. Therefore, they have different mindsets. Delivering value-added services is all about

Comarch Technology Review 02/2014

breaking down these boundaries and integrating products, services and infrastructure on the level of provisioning, assurance, CRM, billing, and new product definition. Therefore, this article illustrates the impact of digital services on BSS/ OSS as a whole.

Challenge No. 1: Increasing Network Complexity OTT services have initiated the migration from conventional traffic (circuit-switched voice or SMS) to pure IP traffic. In order to meet the capacity increase in total traffic caused by these services, operators have invested in the deployment of next-generation networks (LTE, LTE-Advanced).

As networks become more complex, new technologies are necessary as an add-on to the legacy infrastructure in order to provide service continuity. CSPs are now looking at leveraging heterogeneous networks and NFV/SDN to ensure their networks demonstrate sufficient flexibility and efficiency for future business models. Heterogeneous networks also use technologies such as Wi-Fi or femtocells that make it possible to offload traffic from the operator’s critical infrastructure, which can help further improve network bandwidth. Next-generation OSS vendors need to tailor their solutions to handle the increasing size and complexity of future networks.

Challenge No 2: Managing Data-Driven Real-Time Services Most digital services are delivered over an IP network, making it hard for operators to monitor, monetize, and assure the quality of each individual service because they would need to collect, process, and store large amounts of data.

Today, telecom operators are investing in enhancing customer experience and service quality for their traditional service portfolios in order to reduce churn and differentiate from their market competition. Expanding these initiatives to include digital services requires a data-centric BSS/OSS stack that enables them to efficiently provision, monitor, and bill whatever the customer is consuming. It is easy to see that the sheer volume and structure of IP traffic makes this a challenging task.

The manner in which people consume these new services is also different from conventional services. Today, consumers want to be able to activate, deactivate, upgrade and cancel using simple but powerful self-management tools. Corporate customers expect usage-based cloud services that they can scale horizontally and vertically in real time. Mobile payment transactions require an on-the-fly payment mediation to settle them. The real-time factor of these services has become critical. This requires a BSS/OSS that seamlessly integrates the service delivery platform with third-party applications.

OSS IN THE DIGITAL ERA

Challenge No 3: Integrating with Third Parties

Delivering digital services (such as enterprise cloud services or M2M) requires cooperation with various partners in these specific fields. A lot of integration is necessary between telecom operators and other parties to offer a seamless experience – not only in the area of service provisioning and management, but also billing, customer analytics, and service usage information. As previously mentioned, telecom operators sit on a mountain of data derived from their customers’ service usage. This data is an asset that CSPs’ partners can leverage to offer new services and products. Next-generation BSS/OSS should allow CSPs to deliver new services by smoothly integrating with a wide range of third parties and at the same time enable them to offer partners the ability to efficiently leverage their data and infrastructure.

How to Transform BSS/OSS to Support Digital Service Strategies?

Standardizing Data, Applications and Processes The most important change in the digital revolution lies not in the BSS/OSS stack. It comes from within the organization and relates to processes and workforce. Some telecom operators go as far as to set up entirely new business units dedicated to digital services. They operate with different processes as well as a different, more customer-minded and service-centric mindset than people directly engaged in BSS/OSS. They deploy next-generation service delivery platforms designed to reduce the time-to-activate for their digital services. At the same time, they also train their workforce with new processes that offer an end-to-end view of products, services and infrastructure.

Historically, BSS/OSS systems have been architected as silos, with their own individual processes and applications for every line of service. By standardizing processes and service-product models, as well as by reusing service components, telecom operators have redesigned their BSS/OSS architecture towards open data models. In this way they have significantly improved their capability to launch and to provide new services.

The new, modern BSS/OSS architectures, having open data models that represent services, products and resources, allow CSPs to have an end-to-end view of the various processes in their organization. By controlling and orchestrating each of the components involved in the idea-to-product, product-to-offer, offer-to-activate and activate-to-revenue processes, telecoms can offer agile product development, provisioning, and assurance, thus increasing customer value.

Telecom operators who decide to implement an architecture ready for digital services have to focus on the interoperability of their internal functionalities (billing, infrastructure, products, services, quality) with those of third-party partners for each service.

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In summary: in order to achieve the data-driven architecture described above, it is important to standardize three things: data, applications, and processes.

Data Next-generation BSS/OSS systems should use a common data format to store information about networks, services and products. This allows third-party systems to reduce integration costs and to improve the time-to-market for new services.

The most important change in the digital revolution lies not in the BSS/OSS stack. It comes from within the organization and relates to processes and workforce.

Applications CSPs should focus on integrating their functionalities internally , e.g., within their own organization, as well as externally to their partners by offering standard APIs. This not only shortens the time necessary to integrate new services, but also offers the opportunity to expose valuable functionalities to third parties. Telco operators have a lot of valuable data and resources that can be leveraged (and offered) to third parties to improve their services. Providing an open architecture would enable these kinds of initiatives.

Processes Finally, from an organizational perspective an open, datadriven, component-based BSS/OSS environment is only as useful as the processes and workforce allow it to be. CSPs need to invest in adjusting their processes to facilitate the development, provisioning, billing, and assurance of new services. Compared to simply modernizing and upgrading BSS/OSS environments, this might be much more complicated.

Conclusion The future of the CSP business lies in the delivery of digital services, either as a provider or an enabler. Whatever business model is chosen, the digital revolution will have an impact on the organization, processes and solutions that will be needed. As the infrastructure, services and partner environments grow and become more complex, operators need a horizontal component-based BSS/OSS stack that allows for end-to-end process integration. Therefore, nextgeneration service delivery platforms should have common data formats, open APIs, and customer-centric service models. Most importantly, CSPs should remember that IT systems are only part of a bigger organizational transformation that should help them grow their businesses in the coming years.

Comarch Technology Review 02/2014

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OSS IN THE DIGITAL ERA

NFV/SDN: why a network as a distributed Cloud requires an open platform

Comarch Technology Review 02/2014

OSS IN THE DIGITAL ERA

my previous article, entitled “SDN/ NFV – Cloud in the Network or Network in the Cloud,” Technology Review 1/2014, I introduced the concept of employing NFV/SDN technology to transform a network into a distributed cloud, able to shape itself according to application needs.

In a nutshell, this concept sees network nodes that become micro data centers that can host not only virtualized network functions, but also applications. This capability means that applications can be brought closer to the customer (in other words – closer to the network edges), thus improving customer experience (see Figure 1).

In

45

The Need for Open Platforms In order for this concept to work, the network and the “traditional” data centers should be treated together as a consistent (but distributed) platform. An ideal situation happens when an application developer writes the code once and the given application can be hosted both at traditional data centers and at network nodes (playing the role of micro data centers).

The same rule should apply to network functions (VNFs), which should be able to run (as software) on various elements of a distributed environment (cloud). This means that there is no need to re-implement this function to support different hosting scenarios. If taking SGW virtual function as

ŁUKASZ MENDYK Comarch SA

OSS Product Manager, Telecommunications Business Unit

Figure 1. The network as distributed cloud shaped by applications needs

In the diagram, applications (green elements) can have computing resources allocated not only at data centers (like in the traditional approach), but also at the network edge (e.g., a RAN micro data center) and be colocated with network functions, thus avoiding the network traffic. The same applies, for example, to core network functions (blue elements).

A virtualized signaling gateway (SGW) can have resources allocated at the Evolved Packet Core (EPC) node, but also have resources allocated at the RAN micro data center. The latter may sound revolutionary, but it does not violate the logical dependency between network functions. In this way all network functions and applications (software) can be hosted potentially at the same micro data center, avoiding the traffic between the network nodes. All this to provide better customer experience, especially for applications that are network latency sensitive.

an example, the same code (software) should be able to run various hosting scenarios. In a traditional scenario, it is hosted at the EPC node (EPC micro-datacenter). In an alternative scenario the same software can be hosted together with the border gateway (BGW) virtual function and customer cloud applications at the RAN node (RAN micro-datacenter). Even if these two scenarios differ a lot from each other (as in the second scenario, contrary to the traditional one, there is no need for having connectivity between the nodes), the “intelligence” of the platform should not require re-implementing these functions. This all means that a distributed cloud composed of different micro data centers should work as a homogeneous platform when it comes to the software hosting capability, even in the case of platforms provided by different cloud vendors.

A distributed cloud composed of different micro data centers should work as a homogeneous platform when it comes to the software hosting capability, even in the case of platforms provided by different cloud vendors.

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OSS IN THE DIGITAL ERA

The fact that BSS/OSS systems can be transformed into virtualized functions, to be colocated together with VNFs and applications on the cloud nodes, means that in the face of NFV/SDN technology, BSS/OSS is not bound to become extinct.

Without a doubt, this will be far from easy to achieve. Especially because even now in the cloud application domain, application software can’t be easily adapted to be run on cloud application platforms delivered by different vendors (which causes potential cloud vendor lock-in problems). On top of this puzzle, the issue of an open platform becomes even more daunting because it is necessary to host not only applications but also VNFs on the same platform.

Are OpenStack and OpenDaylight Enough?

To address some of these issues, open-source initiatives receiving a lot of publicity in industry media, involving many activities, and raising hopes have been initiated. But it seems that the “cloud federation” subject has still not been addressed thoroughly enough– a statement backed up by the

light, but a lot needs to be done on top of this existing solution in order to realize the idea of a distributed cloud.

No Need to Reinvent the Wheel: RealTime OSS Functions as OpenStack and OpenDaylight Services To manage the cloud platform (to implement the NFV management and orchestration), it is necessary to understand the physical topology of cloud resources. Looking at the distributed concept, you need to comprehend the connectivity between the federated cloud instances. Moreover, monitoring of infrastructure is needed to make a dynamic decision (for example, in the case of traffic congestion, you may want to reallocate the application and network function to enable the cloud to reshape itself). Going deeper, it turns out that you need functions known from the BSS/OSS domain

VNFs

Auxiliary platform services

Virtualized Network Inventory (Topology)

Virtualized Performance Management

Virtualized Fault Management

Virtualized Other OSS functions

vSGW

Applications

APP 1

vBBU

APP 2 vPGW

vPGW

APP 3

APP n

Figure 2. OSS/BSS stack as part of the Open Stack / Open Daylight platform

fact that various vendors are demonstrating their particular solutions to this problem. The “cloud federation” concept is aimed at enabling a distributed cloud, composed of many instances (OpenStack installations), which are expected to behave as a single platform. It seems that much needs to be done before the vision of a distributed cloud becomes reality.

Another issue is that OpenStack can be described as an infrastructure-as-a-service (IaaS) platform, which means that it operates as a low-level entity layer (such as virtual machines) and does not address the application layer – unlike platformas-a-service (PaaS) solutions. To conclude, OpenStack has many capabilities, especially when combined with OpenDay-

Comarch Technology Review 02/2014

in order to make the cloud platform “intelligent” and adaptable to application needs. This is why instead of re-inventing these functions, it may be a better idea to use the existing OSS functions. For example, a Topology Service, as defined in OpenDaylight, can be delivered by a Network Inventory system when it is treated as services that can be plugged into the OpenStack / OpenDaylight platform. The fact that BSS/ OSS systems can be transformed into virtualized functions, to be colocated together with VNFs and applications on the cloud nodes, means that in the face of NFV/SDN technology, BSS/OSS is not bound to become extinct. On the contrary, BSS/OSS functions, when virtualized, may become a very important enabler for a distributed application-shaped network (cloud).

As the world becomes digital‌ What does the future hold?

By 2017,

By 2018, digital

business will require

50 percent less business process workers and 500 percent more key digital business jobs, compared with traditional models.

Source: Gartner http://gtnr.it/1tvoiNY

70 percent of successful digital business models will rely on deliberately unstable processes designed to shift as customer needs shift.

Source: Gartner http://gtnr.it/1tvoiNY

By 2018, the total cost

of ownership for business operations will be reduced by 30 percent through smart machines and industrialized services.

Source: Gartner http://gtnr.it/1tvoiNY

Innovate in the digital world M2M Platform Digital Ecosystem Management Internet of Things Platform

Make your network smarter Self-Organizing Network (SON) Software Defined Networking (SDN) Customer-driven OSS

Deliver high-quality services fast Catalog-driven Service Fulfillment Service Assurance & Quality Management

Provide great customer experience Customer Loyalty & Engagement Customer Experience Management

Optimize infrastructure investments Network Planning & Optimization Model-based Network & Service Inventory

COMARCH BSS/OSS FLEXIBILITY YOU NEED IN THE DIGITAL ERA Comarch is a provider of complete IT solutions for telecoms. Since 1993 the company has helped CSPs on 4 continents optimize costs, increase business efficiency and transform BSS/OSS operations. Comarch solutions combine rich out-of-the-box functionalities with high configurability and are complemented with a wide range of services. The company’s flexible approach o projects and a variety of deployment models help telecoms make networks smarter, improve customer experience and quickly launch digital services, such as cloud and M2M. This strategy has earned Comarch the trust and loyalty of its clientsm including the world’s leading CSPs: Vodafone, T-Mobile, Telefónica, E-Plus, KPN and MTS.