Harnessing the platform economy The earlier articles in this series have discussed a number of significant opportunities coming from the evolution of the Mobile Economy and from the massive growth of data consumption triggered by the progression towards the Gigabit Economy. Both discussions pointing to the same conclusion - the use of data in our everyday lives is not only growing in leaps and bounds, but we are expecting this connected fabric to be present wherever we are in the world. The opportunities generated by this are significant. As we will explore further in this article, transformation is required in everything - from the types of customer that are addressed, the service breadth that is offered, the customization and integration options available and, underneath all that, the flexibility of the platform, the processes and, yes, the people that are deployed to meet those needs.
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The next question that comes to mind, for people in the wholesale industry such as ourselves, is: What are the opportunities that this transformation will bring to wholesalers? OPPORTUNITIES, OPPORTUNITIES, OPPORTUNITIES Opportunity #1 - Transformation of the wholesale customer We have explored, at length, the transformation of our customers, their requirements and hunger for real-time, tailored, self-served and elastic types of experiences.
middle-men to end-to-end global solutions providers, companies we currently call ‘wholesalers’ will transform into something much more relevant. Subsequently, they will move up the value chain, away from basic transport or termination support, which will open up a whole new set of target customers. As these global carriers spread their wings, the addressable customer groups to whom they offer solutions will naturally expand. The tidy world of the past, where wholesalers solely met the needs of retail service providers who themselves met the requirements of all users of telecom services, has vanished in many countries.
‘Global coverage, scale and worldwide agreements are key to new partnerships’
For this to take place on a global basis, what customers therefore need are wholesale partners that are able to understand their specific requirements and deliver end-to-end global solutions - not just provide some parts for the middle of the chain.
For example, instead of just taking a message and delivering it to a distant telephone number, transformed ‘wholesalers’ are able to fully understand their operator customers’ requirements in terms of integration into their systems, latency, success rates, security and real-time feedback on status. This can then ultimately be fed back to end customers so that the transaction, of which the message is just one part, will be successful. Looking ahead, all the components that ensure the transaction is successful are what end-toend partners should strive to deliver from their platform, rather than just transporting a simple, low margin component over a basic network. As a result of transforming from being simple
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As a matter of fact, a growing number of technology companies now have communications needs that are larger, in aggregate, than many service providers. Some of them are developing their own underlying infrastructure of fiber and submarine cables and looking to offer surplus capacity to other companies - in effect turning themselves into service providers for some capabilities. As such, these technology companies naturally want to deal directly with providers that can meet their global end-to-end communication needs at the scale that they now require. Global coverage, huge scale and worldwide agreements are key to that new partnership. In fact, it is unlikely that in the future any one company will be able to provide all required services in all necessary geographies. Consequently, partnerships with other carriers, as well as with some of the large customers themselves, to create and efficiently manage
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an ecosystem that provides the reach of end to end services, is an essential step. The first stage towards this perhaps started when the companies we call OTTs were required to meet the full requirements of their own customers and looked for international termination to provide tailored solutions, slightly different to what they were offering other traditional fixed or mobile service providers. Since then, the range of potential customers carriers can address has expanded relentlessly. Fintech companies, online retailers, giant ecommerce companies, cloud based communications, platform providers, technology unicorns and financial companies can now be addressed directly by carriers. This represents a significant growth opportunity and we believe that fully meeting their needs is key to the growth of global carriers going forward. However, these new opportunities also come with a set of challenges for carriers who have spent the last 25 years offering a set of generic, basic, non-tailored services. For this necessary transformation to take place, the evolution of the wholesale business model towards an endto-end flexible platform solution is essential. Opportunity #2 - Transformation of the wholesale services While we often think of growth as being a big driver in meeting the communication needs of customers, perhaps the more pressing underlying need is flexibility. New applications can appear from virtually nowhere and, in a short space of time, they are everywhere. A growing number of companies, who are
endlessly in search for profitability and growth, are expanding their supply chains globally and are, at the same time, seeking a global customer base for their products and services. As a result, they can rarely plan with confidence far into the future and so they need global solutions providers that offer them flexibility in capacity, locations, contracts and business models to meet their evolving needs for connectivity and end-to-end service. What this means for carriers is that everything in their network and systems environment must be designed with this in mind. In an article a couple of years back, we mentioned the word fungible. Basically this word means that the solution is “readily changeable to adapt to new situations”. How many of us can say that our networks, systems and processes meet that requirement? But if the major customers are dealing with that complexity in their own businesses, then carriers must have a mindset that builds ‘fungibility’ and fluidity into everything they do. Fluid networks and technology This means that network elements should increasingly be designed as software functions running on standard or cloud based hardware and overall orchestration systems designed such that new capacity in terms of volume, features or locations can be turned up quickly and via APIs from the customer’s own systems. This also requires the transformation of the backend, with the aim of achieving ultimate efficiency using solutions such as blockchain, automation and big data analytics. Taking this a step further, this level of network fluidity must also be extended between carriers involved in the delivery of the solution. To that
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extent, automated, agile connectivity between in maintaining that visibility (if the customer agrees) of how well the product is meeting the carriers must be implemented. needs of that end user and if improvements can be made in how it does that. Fluid services Evolution isn’t only towards the agile technology that underpins the network. We believe that This end-to-end tracking of the life of both the services need to similarly evolve from being a components and the product needs a great specific capability that is provided as required deal of technology expertise, system capability, - such as terminating a message, or setting up flexibility and finally processes to track at the a roaming session, into a platform-based, often level and detail required. virtual, end-to-end solution. For example, rather than solely providing A typical illustration of that is in the area of the roaming SIM cards, an end-to-end solution Internet of Things. It is clear that everything is could involve not only the roaming technology, increasingly being connected to the internet but the edge computing to track and record and, for companies, this often means that all transient data, blockchain systems to maintain the assets they use in their business need to an immutable lifetime history of that item as be tracked as they move from their suppliers it passes between companies involved in its through the supply chain into manufacturing creation, analytics to help the manufacturer to understand how the product is being used and then out to the final customer. (perhaps in terms of its location over time) and Even there, they are increasingly interested so on.
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Not all global carriers are able to create such end-to-end solutions tailored to each vertical addressed, but it should certainly be an aim to meet as broad a set of requirements from this new breed of customer as possible and the move towards a cross-vertical wholesale platform, and at least part of services offered from the cloud, is one part of the equation. Fluid commercial arrangements Equally importantly, contractual arrangements must be established that are flexible enough to support more real-time usage of global capacity and service capabilities. If the customer no longer needs that 10G pipe, then they will not be keen to continue paying for it for the rest of the contractual term. Systems and processes that are able to decommission or re-assign capacity to another purpose can only achieve their full benefits if they are tied into the commercial and contractual frameworks. Consequently, pay-as-you-grow type business models must be considered throughout, and global carriers are well versed in supporting these types of models. Prices per message or per minute are ingrained in the DNA of carriers and that mindset needs to be extended to support any international on-demand service requirement. Fluid workforce Finally, to become a reality, this fully flexible environment must be underpinned by a fluid workforce; by teams that have the necessary knowledge, tools and mobility to support the business, its customers and partners efficiently and dynamically as they evolve. This means that we need a workforce that is permanently learning and evolving to be able to design, operate and commercialize new products as part of an expanded carrier
portfolio. From Cloud to IoT, Blockchain to AI, new services will demand a real-time learning workforce. Opportunity #3 - Transformation of the carrier organization As hinted above, as we continue this evolution, the final opportunity is to transform the wholesale model itself to create global companies that are providing flexible end-toend, often virtual, solutions for a wide range of companies and entities. To achieve this, a number of organizational changes must take place within carriers. Digitalization of the front-end Communications is all about connectivity between people and applications, which means that providing solutions to as wide a range of potential customers as possible is an important step towards the future. To that effect, digitalizing - the front end processes and systems via fully integrated APIs into the customer systems, and frictionless processes that potentially use blockchain technologies, will add to that. Creation of an intelligent operation Furthermore, we believe that using artificial intelligence analytics will add to this value, both internally and externally. • Internally by spotting trends which can highlight an opportunity to lower cost or improve service will be critical. • Externally, of course, identifying opportunities for the end customer that are visible because of the centralized nature of the communications business. This has multiple rewards in terms of cementing the relationship by providing value that customers could not have identified on their own.
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Building an agile corporate structure Streamlining the structure of your organization and business will equally pay dividends. Not every technology company has the right approach to the organization and responsibilities of the people in the team.
that is able to instill a clear vision and empower the team to drive relentlessly towards creating this fungible platform that is able to meet both current known needs and, with tweaking, those ill-defined needs that could be the next “big thing.”
As the industry moves towards flexible customer centricity, the approach to the structure and the business should similarly evolve. Increasingly, leadership will be all about encouraging and supporting risk and the rapid response required when solutions don’t work exactly as planned. An agile, resilient and innovating human resource is a key requirement in this business environment.
As we have seen, in this industry, the leadership needs to encourage collaboration, but not just within the company, it is equally critical to collaborate with customers, suppliers, partners and competitors to create the end-to-end solutions that are required.
Similarly, the leadership must recognize their new role in the carrier of the future. A leader
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Opportunity #4 - Transformation of the go-tomarket strategy But before concluding this discussion, let us pause for a moment to think about the actual use of the term ‘wholesale’ to describe
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our industry. You probably read, hear or say the term ‘wholesaler’ without giving much thought to the terminology used - but that word “wholesaler” is a prime example, in our minds, of how a name can, to some extent, define an outcome. Now just changing a word is not going to change an industry, but we, in some way, invite you to think about the challenge and importance of rebranding your business. As often everything starts with one person, one idea and one word. But pushing this a step further, as wholesalers evolve their portfolio and customer focus, they should not only re-think their brand, but rather their whole go-to-market plans to, in some way, apply distribution channels, marketing and sales strategies similar to the ones used by enterprises and consumer service providers. This could mean increasing wholesalers’ use of digital and social media, creating partner co-branded marketing campaign and using a set of online, digital tools to interact with their whole ecosystem, from employees to suppliers, partners and customers.
to build the complete solution value chain is essential. Platform model: Designing and implementing a fluid (and often virtual) range of network elements, systems and solutions that are able to meet the global end-to-end requirements of major customers is going to be critical to success. Agile and intelligent organization: Flexible, streamline, agile, resilient and innovative, organization and people are key to success. A leadership team able to set a clear goal and direction, while accepting that the path to it is likely to have risks and failures is also vital. Digital go-to-market strategy: A serious rethinking of wholesalers’ go-to-market strategy and brand is mandatory to ensure their digital sales strategy mirrors their portfolio evolution and customer focus.
PLATFORM ECONOMY SUCCESS MANTRAS To summarize, here are the key mantras a digital wholesaler should follow to successfully address the opportunities triggered by the platform economy: End-to-end partnership ecosystem: It is unlikely that one company alone will be able to create the wide range of solutions expected by global customers. So integrated, flexible and fluid arrangements with strategic partners
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ABOUT THE AUTHOR Steve Heap CTO HOT TELECOM Steve has a lifetime of experience in designing, engineering and operating networks, both domestic and international. With leadership experience in small technology start-ups through to global service providers, he has deep experience in a wide range of products, technologies and geographies. He has the rare skill of being able to explain complex technical issues in easily understood concepts and uses that extensively in his consulting work with HOT TELECOM.
ABOUT TELEFONICA INTERNATIONAL WHOLESALE SERVICES Telefรณnica International Wholesale Services (TIWS) provides world-class wholesale services to fixed and mobile operators, service providers, carriers and OTT-Media companies. Our global portfolio includes Voice, Carrier Enterprise (including Cloud & Connectivity Solutions), Mobile (including IPX Transport, Messaging, IoT, Signalling, Roaming, Mobile VAS and Analytics tools) and Satellite services, as well as innovative Digital solutions (Security, IoT and Big Data) and end-to-end solutions for enterprises. As a leading global provider of integrated communication solutions, Telefรณnica has a global footprint, with presence in over 40 countries (particularly strong in Latin America & Europe) and service reach in more than 170 countries. To learn more, please visit https://www.wholesale.telefonica.com
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