Aje56uyglobal telecoms business may june 2015

global telecoms May/June 2015 Number 140 A Euromoney Institutional Investor Publication

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BUSINESS

Plus: Why Kenya leads the world in mobile money Who are the 50 women to watch in telecoms?

GTB Innovation Awards results in full

CE O a In CE nd C side SD M p FO : N p ag Gu age e 27 ide s 41

Interview: Telecom Italia CEO Marco Patuano shifts attention from debt to focus on investment

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Interviews

Telecom Italia CEO shifts focus from debt to heavy investment Marco Patuano is building broadband networks so that it can deliver media for others

18 Convergence across Europe is new focus for former CFO After nine years as CFO of Orange, Gervais Pellissier is running the group’s European operations

62 Innovation Awards

20 Free Facebook campaign is a success for Globe Social media is the killer app in the Philippines, says Globe Telecom’s CEO Ernest Cu

62-78 GTB Innovation Awards results in full All the winners of the GTB Innovation Awards, presented at a black-tie dinner in London 63 Turkcell 4G roaming with TSIC’s IPX Customers with LTE-capable phones can use 4G when roaming 68 How to beat the cyber attacks worldwide Cyber security project wins award for using big data analytics 71 Award for financial inclusion in Peru Ericsson Converged Wallet powers mobile financial services 71 Integrated policy enhances user experience Etisalat Egypt uses Ericsson to offer subscribers more flexible services 75 Fully connected experience based on vehicle cloud Ericsson and Volvo Cars enable drivers to reconnect with the road 96 Innovation changing the world, GTB conference hears The world’s telecoms innovators gathered at the GTB innovation summit to say how they’re changing the world

6 News AT&T completes second Mexican buy Europe unveils digital single market strategy Cisco names Chuck Robbins as new CEO

www.globaltelecomsbusiness.com

22 Why Kenya leads the world in mobile money Safaricom’s Rita Okuthe explains how mobile money has transformed lives in Kenya 24 Diverse market across 17 countries poses Airtel challenges Airtel Africa CEO Christian de Faria discusses the challenges of such a diverse environment

Features

contents

15 Cover interview

Marco Patuano Page 15

Gervais Pellissier Page 18

Ernest Cu Page 20

Rita Okuthe Page 22

26 Omni-channel: from buzzword to business case Operators need to use every customer interaction to maximise every engagement opportunity 52 CTO round-table: rolling out LTE, roaming and VoLTE We asked four leading CTOs about the main issues they are facing 54 Open-source software project aims to reduce fragmentation How do you achieve interoperability and security and reduce development time?

55 No half measures for reliable VoLTE rollout Making VoLTE work is not just about delivering a service: it’s crucial to the future of service providers 56 Alcatel-Lucent approves takeover by Nokia Alcatel-Lucent’s Michel Combes reported to be joining Altice as merger with Nokia comes closer

Christian de Faria Page 24

Cynthia Gordon Page 32

Dan Pitt Page 42

Hisham Allam Page 52

Anne Bouverot Page 79

Sun Yafang Page 85 Global Telecoms Business: May/June 2015 3

contents

58 Evolution of rating, charging and billing in the digital era An online rating, charging and billing system would help service providers through the digital wave

41-51 CEO and CFO Guide to SDN

60 CFO round table: mobile money and its financial implications We asked three leading CFOs about their attitude to mobile payment services

42 ONF moves to next stage in mission to switch to open-source software Standard hardware with open-source software: that’s the vision that will transform the industry

27-40 CEO and CFO Guide to CEM 28 Operators need to bridge reality gap if they intend to be customer-centric It’s never been easier for customers to take their money elsewhere when any aspect of service disappointr 30 Telecoms operators rate poorly when compared with other businesses People expect more than they used to and service providers are scoring badly in customer surveys 32 CMO round table: customer experience We asked top CMOs how important customer experience is to them, and how they use CEM 36 Service providers still have the edge over OTT players The onus is on service providers to adopt a multidimensional approach to customer experience 38 Faults, missed deadlines and unhelpful call centres Ask for comments and anecdotes about telecoms operators’ service quality, and you’ll be inundated 40 Millennials need a personalised experience. So do the rest of us Customer experience can undeniably be a true source of sustainable competitive advantage

44 Operators will be faster and more agile as SDN promises to transform Operators will be able to use networks more efficiently and invest savings in better infrastructure 46 Rethink the networks: SDN is about to change the way everything is done Network design will be the biggest opportunity and challenge for operators 48 SDN community launches Atrium to link software for networking The vision of software-defined networking has come closer with the release of Atrium 50 Who’s who and what’s what in SDN There are a baffling number of different organisations promoting SDN

79-87 Women to watch in telecoms 79 Changing the status quo Anne Bouverot, director general of the GSMA, introduces our report on women in telecoms 80 The gender roles are shifting, but slowly, and women remain under-represented Women account for less than 40% of the workforce, and it’s even worse at high management level

88-95 CFO summit 88 Full report on GTB’s third annual CFO summit Challenges of M&As, the expanding role of the CFO, new accounting rules, and the importance of the global supply chain

4 Global Telecoms Business: May/June 2015

www.globaltelecomsbusiness.com

news

AT&T completes second Mexican buy AT&T is ready to integrate Nextel Mexico with Iusacell after the completion of its second purchase in the country.

The US operator has completed its $1.87 billion acquisition of Nextel Mexico from NII Holdings including spectrum licences, network assets, retail stores and subscribers.

The deal follows a $1.7 billion acquisition of another Mexican mobile operator, Iusacell, agreed in late 2014 and completed earlier in 2015.

Iusacell has a reported 8.6 million customers. In January 2015 AT&T said that Nextel Mexico has “approximately 3 million subscribers”.

AT&T said will integrate Iusacell and Nextel into one company focused on bringing better service and faster mobile internet speeds to more locations throughout Mexico. The company plans to create the first-

Thaddeus Arroyo, CEO for AT&T Mexico and Iusacell, will integrate Nextel into the operation

ever North American mobile service area, which will cover more than 400 million consumers and businesses in Mexico and the US.

Thaddeus Arroyo, CEO for AT&T Mexico and Iusacell, will lead the combined company.

AT&T pointed out that Mexico is the second-largest economy in Latin America and has a growing middle class. This economic strength, combined with Mexico’s close geographic, economic and cultural ties to the US, make it an attractive place for AT&T to invest.

AT&T’s acquisition of Nextel Mexico was approved by the US Bankruptcy Court for the Southern District of New York, which is overseeing the restructuring of NII Holdings.

It was also approved by Mexico’s telecom regulator, Instituto Federal de Telecomunicaciones.

The company said that swift action by IFT, aided by recent regulatory reform by the Mexican government, has created a positive climate for AT&T to invest significantly in Mexico.

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6 Global Telecoms Business: May/June 2015

Directors: Richard Ensor (executive chairman), Christopher Fordham (managing director), Neil Osborn, Colin Jones, Diane Alfano, Jane Wilkinson, Bashar Al-Rehany. Non-executive directors: Viscount Rothermere, Sir Patrick Sergeant, Andrew Ballingall, John Botts, Tristan Hillgarth, Martin Morgan, David Pritchard

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news

Vodafone in talks with cable giant Liberty as operators race to quad-play Vodafone has confirmed that it is in discussion with US-owned cable group Liberty Global — but the UK-based mobile company has denied that it is looking at a full merger of the two.

The move is part of an increasingly widespread trend across Europe and elsewhere for mobile operators to launch or buy fixed broadband or cable networks and fixed operators to offer mobile. The aim is for all of them to try to lock in customers by providing as many services as possible, out of a selection of mobile, fixed telephony, home broadband and television — so-called quad-play packages.

Illustrating the point, only days after the Liberty announcement, Vodafone announced that it is launching fixed voice and broadband in the UK, in competition with BT, Sky, TalkTalk, Virgin Media and others.

In a brief statement, Vodafone said that “it is in the early stages of discussions with Liberty Global regarding a possible exchange of selected assets between the two companies”.

The announcement immediately led to speculation that the two companies may be contemplating a global exchange of assets to create two new companies, both of which would have fixed and mobile interests in different territories.

The assets likely to be on the agenda include some of Liberty Global’s operations across Europe and South America, including Telenet in Belgium, UPC in Austria, Hungary, Ireland and Poland, Ziggo in the Netherlands

Jeroen Hoencamp: Vodafone UK offering fixed as well as mobile services

and Virgin Media in the UK, and Vodafone’s recently acquired European cable operations, including Spain’s Ono and Germany’s Kabel Deutschland.

In April 2015 Liberty’s Telenet announced that it is to buy Belgian mobile operator Base from Netherlands incumbent KPN — a business it may be able to contribute to any deal with Vodafone. Liberty Global has not yet issued a statement about the Vodafone talks.

The Vodafone announcement said: “Vodafone is not in discussions with Liberty Global concerning a combination of the two companies.”

The company warned: “There is no certainty that any transaction will be agreed, nor is there certainty with respect to which assets will ultimately be involved.”

Vodafone UK’s move into the UK fixed broadband and home phone market will include packages of up to 76 megabits a second.

The service means Vodafone is the first UK operator to offer fixed and mobile services, in advance of BT’s expected takeover of mobile operator EE, which is unlikely to be completed before March 2016.

Cindy Rose, consumer director at Vodafone UK said: “As the only operator in the UK which owns both a fixed and mobile network, we’re in a great position to create innovative products and services that give our existing customers reasons to stay with us and new customers reasons to switch.”

But the current package, called Vodafone Connect, appears to use BT Openreach’s local access network, though Vodafone will also use its “nationwide, fibre optic, business-grade network [which] already reaches exchanges which pass nearly 20 million premises across the UK: with that figure increasing to around 22 million later in the summer”.

Vodafone acquired that network when it bought Cable & Wireless Worldwide for £1 billion in 2012.

C&W had earlier made at least one unsuccessful attempt — using the Bulldog brand — to launch a home broadband network in the UK. C&W sold Bulldog in 2006 and the customer base was subsequently acquired by TalkTalk.

Jeroen Hoencamp, CEO of Vodafone UK, said: “We’re looking forward to bringing our consumer customers the benefits of our experience in providing fixed and mobile services, both here in the UK and elsewhere around the world.”

Vodafone will initially offer Vodafone Connect to existing mobile customers in parts of the UK, but will roll it out to the whole country over the next few months, and will then start selling the service through its retail stores.

Late news: Hannes Ametsreiter leaves Telekom Austria Hannes Ametsreiter has resigned from Telekom Austria and will leave the company — where he is CEO of the group and of its national operation, A1 Telekom Austria — at the end of July 2015.

He had been with the group for 19 years and was CEO for six.

No reason has been given for his departure but a statement 8 Global Telecoms Business: May/June 2015

from the supervisory board says that he asked “for a mutually agreed premature termination of his contract”.

Wolfgang Ruttenstorfer, chairman of the supervisory board, said: “On behalf of the Supervisory Board I would like to express our thanks to Hannes Ametsreiter for running

the business through quite challenging times, also in the transition phase of Telekom Austria Group becoming an affiliate of América Movíl.”

The Mexican group, controlled

by Carlos Slim, owns around 60% of the Austrian group, which owns fixed and mobile networks across eastern Europe.

www.globaltelecomsbusiness.com

gtb

GLOBAL TELECOMS BUSINESS

POWER100

Who will be the Global Telecoms Business Power 100 for 2015?

The deadline for this year’s Global Telecoms Business Power100, our annual list of the 100 most powerful a people in the telecoms industry p worldwide, is on Monday 3 August. w W asking readers for nominations We now. n W published the first list at the end We of September 2008, to mark the o 100th print issue of Global Telecoms Business, so this is the eighth time we’ve produced our list of the top 100 people in telecoms. The list features senior executives from operators and vendors, regulators, international organisations and investors, from all parts of the world.

2015?

Eric Schmidt, chairman and CEO of Google, was number one in the first list. He was followed in 2009 by the late Rob Conway, then CEO of the GSM Association. The following year AT&T’s Randall Stephenson led the Power100.

Number one in 2011 was Hamadoun Touré, then secretary general of the International Telecommunication Union, and in 2012 it was Dan Mead, CEO of Verizon Wireless, the world’s biggest LTE operator. In 2013 AT&T’s Stephenson led again.

In 2014 the judges went back to social media world, and picked Facebook’s Mark Zuckerberg.

So who will feature in this year’s Global Telecoms Business Power100?

And who will be number one this time?

GTB will be publishing the Power100 for 2015 at the end of September, in print and online.

Deadline: Monday 3 August 2015

It’s up to you. Send in those nominations now, please.

By Monday 3 August Go to www.globaltelecomsbusiness.com and follow the link to GTB Power100

news

Verizon to acquire AOL in a $4.4bn mobile-first video deal Verizon has agreed to acquire AOL in a $4.4 billion deal in a push to advance its ambitions in mobile video advertising. The all-cash acquisition, which values AOL at $50 a share, will help Verizon build its digital and video platforms.

As the US mobile industry becomes increasingly competitive, AOL’s mobile video streaming service will be a revenue source for Verizon.

The company said the deal will strengthen its mobile and OTT video strategies. “This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience,” said Lowell McAdam, chairman and CEO of Verizon.

It will gain AOL’s key assets which include its subscription business; global content brands, such as the Huffington Post, TechCrunch, Engadget, Makers and AOL.com, as well as its overthe-top original video content, and its programmatic advertising platforms.

The combined entity will create a scaled, mobile-first platform offering targeted at a nearly $600 billion global advertising industry, said Verizon.

McAdam added: “At Verizon, we’ve been strategically investing in emerging technology, including Verizon Digital Media Services and OTT, that taps into the market shift to digital content and advertising. AOL’s advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams.”

Verizon CEO Lowell McAdam: AOL acquisition supports strategy to provide cross-screen connection for consumers, creators and advertisers

AOL’S CEO Tim Armstrong will continue to lead AOL’s operations upon completion of the deal.

“The visions of Verizon and AOL are shared; the companies have existing successful partnerships, and we are excited to work with the team at Verizon to create the next generation of media through mobile and video,” Armstrong said.

The acquisition comes before the launch of Verizon’s video streaming service later this year.

In January 2014, the company purchased Intel’s OnCue internet video service, an asset which is expected to serve as

the underpinning for its video streaming service.

With the US mobile industry becoming increasingly competitive and saturated, mobile video streaming service will be a revenue source and differentiator for Verizon as it seeks to compete with rivals such as T-Mobile.

The transaction will take the form of a tender offer followed by a merger, with AOL becoming a wholly-owned subsidiary of Verizon when the deal is completed.

Pending customary regulatory approvals and closing conditions, the deal is expected to be completed by the end of the summer.

Vodafone and Wind to build fibre network in Italy Vodafone and VimpelCom’s Wind have signed a letter of intent with shareholders of broadband firm Metroweb to build a fibre optic network in Italy.

The project is open to other operators and investors that aim to pursue the goals set by the Italian government to roll out 10 Global Telecoms Business: May/June 2015

a broadband network across the country.

In March 2015 the Italian government approved a €6 billion plan to boost high-speed networks in the country.

Telecom Italia was said to be in talks with the government in May 2015 to buy partly state-owned

Metroweb. However its proposal was turned down by its owners who favoured opening up the company’s capital to all operators.

Under the three-year investment programme, Telecom Italia will spend about €10 billion in Italy and over €4 billion in Brazil on faster broadband.

www.globaltelecomsbusiness.com

news

Europe’s Altice buys US cable operator for $9bn French telecoms holding group Altice has agreed to acquire a majority stake in a US cable company, Suddenlink Communications, in a deal valued at $9.1 billion.

Altice, controlled by French billionaire Patrick Drahi, said it would acquire 70% of the share capital in Suddenlink from existing shareholders BC Partners, a London-based private equity group, Canada Pension Plan Investment Board and Suddenlink management. BC Partners and CPP Investment Board will retain the remaining 30% stake in Suddenlink.

The US purchase adds to Altice’s spate of investments in recent months, including Portugal Telecom and France’s mobile operator SFR. Altice’s acquisition of Portugal Telecom from Brazilian operator Oi has now been complete.

Oi agreed to sell the Portuguese assets of Portugal Telecom to Altice for about €7.4 billion in December 2014.

Altice Portugal paid €5.789 billion for the acquisition of PT Portugal, of which €4.92 billion was paid in cash to Oi and €869 million was allocated to paying off PT Portugal’s debts.

“The final purchase price is subject to post-closing adjustments to be calculated within the next months as a result of changes in the cash, indebtedness and working capital positions on the closing date,” said Oi. Oi had planned to merge with

Suddenlink is the seventh largest US cable operator with 1.5 million residential and 90,000 business customers

Portugal Telecom in 2014 but the tie-up met with stumbling blocks such as financial irregularities over the Portuguese operator’s dealings with its largest bank investor, Banco Espírito Santo.

Dexter Goei, CEO of Altice, said of the US cable deal: “Our investment in Suddenlink, our first in the cable sector in the US, opens an attractive industrial and strategic avenue for Altice in the US, one of the largest and fastest growing communications markets in the world.”

He added: “We are looking forward to our partnership with BC Partners and CPP Investment Board and believe Suddenlink is a best-in-class business that should be able to deliver profitability and cash flow levels in line with best-in-class European cable

businesses.”

Suddenlink is said to be the seventh largest US cable operator with 1.5 million residential and 90,000 business customers. With operations primarily focused in Texas, West Virginia, Louisiana, Arkansas and Arizona, the company is present in attractive growth markets for both residential and business services, said Altice.

Suddenlink generated $2.3 billion in revenue and over $900 million in EBITDA with a balanced revenue mix between residential video, broadband, telephony and business services in 2014.

In 2014, Altice’s French cable company, Numericable, acquired mobile operator SFR for €17 billion.

South Africa’s Telkom to lose 40% of staff South African operator Telkom is set to fire more than 40% of its 19,000 employees. Local reports say the company is to cut 7,800 jobs — on top of 1,170 employees whose positions have already been outsourced.

The company is trying to cut costs by 5 billion rand ($400 million), according to South African media.

Telkom hopes that 4,000 will go through voluntary

www.globaltelecomsbusiness.com

packages, but the other 3,400 in the plan will face compulsory redundancy, though the company hopes to have an enterprise development plan that may help them.

“The enterprise development option is where Telkom will seek to assist existing employees to develop their own new businesses.

These businesses would then be able to contract their services back to Telkom, along with other

service providers,” Telkom’s Jacqui O’Sullivan told South African publication Business Day. Telkom CEO Sipho Maseko said a few days before the announcement that the company wants to bring staff costs down to 25% of sales revenue. “Much like most telecoms operators globally, Telkom must move towards a leaner and more productive workforce,” Maseko was quoted as saying.

Global Telecoms Business: May/June 2015 11

news

Deutsche Telekom ‘may look at BT takeover’ say UK reports Deutsche Telekom is said to be eyeing a takeover of BT, following reports that it is close to selling its stake in T-Mobile US. The German operator is reportedly in advanced talks over the sale of its 67% stake in the US unit to satellite payTV company Dish Networks.

According to UK news reports, it may use proceeds from the sale to acquire BT. Selling T-Mobile US to Dish could pave the way for Deutsche Telekom to exit the US market and focus on its European markets.

“Deutsche Telekom is clearly selling out of the US and clearly they don’t want to give the money back to shareholders, they want to use it in Europe. They want to buy BT,” an industry source told reporters.

Deutsche Telekom is already set to become a major shareholder in BT — with a 12% stake in the company —

Deutsche Telekom may use cash from selling T-Mobile US to buy BT, say reports

following the completion of its £12.5 billion acquisition of mobile operator EE, expected to close in early 2016. EE — formerly Everything Everywhere — is 50-50 owned by Deutsche Telekom and France’s Orange, which will retain a smaller stake in BT following the deal.

Deutsche Telekom is known to considered expansion into the UK in the last decade, looking at both BT and Cable & Wireless as potential acquisitions.

In March 2015 the company announced the launch of its European network which connects Croatia, Hungary and Slovakia — the first three of ten countries it aims to link up.

“With our European network and the cross-border infrastructure, we will be able to set the tone and not just dance to the beat of drummers from the US and Asia,” said Deutsche Telekom CEO Timotheus Höttges.

Level 3 in interconnection deals with AT&T, Comcast and Verizon Level 3 has announced a series of long-term, bilateral interconnection agreements related to their public IP networks with three major US operators.

The company’s partners in the three separate deals, announced separately, are AT&T, Comcast and Verizon.

In a statement, Level 3 and Verizon said: “The agreement contains provisions to add capacity and establish new interconnection locations between the two networks to stay ahead of growing traffic demands. The agreement also includes new connections for Verizon Digital Media Services’ content delivery network to connect to Level 3’s network globally, further improving quality for Verizon’s CDN customers.

This approach offers flexibility for each network while improving performance and reliability for the customers of both.”

Anthony Christie, chief marketing officer for Level 3, said about the AT&T deal: “This 12 Global Telecoms Business: May/June 2015

Anthony Christie, Level 3: With customer needs at the forefront, you enable a growing, secure and resilient interconnection environment

agreement will benefit Level 3’s and AT&T’s customers for years to come. With customer needs at the forefront, you enable a growing, secure and resilient interconnection environment.”

Roman Pacewicz, senior vice president of marketing & global strategy for AT&T Business Solutions, said: “We are dedicated to continuing to ensure customers have the best network experience.

By adding capacity with Level 3, customers will continue to experience high performance speeds to meet their needs.”

Comcast and Level 3 also said they will enhance their existing

network capacity while extending their mutual interconnection agreements to ensure that they maintain ample capacity to exchange internet traffic between their networks. The arrangement expands on the agreements already in place between the two companies, said Comcast.

The agreement comes five years after both operators were in a peering dispute over the amount of traffic from Netflix that Level 3 was sending to Comcast’s network.

“We are delighted to strengthen our relationship with Level 3. Today’s announcement reflects the important ways in which network participants exchange value in an innovative marketplace,” said John Schanz, chief network officer at Comcast Cable.

“We place great value on our relationships with network partners like Level 3 and are continually seeking mutually beneficial, market-driven agreements that enhance value throughout the network.”

www.globaltelecomsbusiness.com

Europe European Commission promises to ‘tear down regulatory walls and finally move from 28 national markets to a single one’

Europe unveils digital single market strategy European Commission vice president Andrus Ansip: Target areas where the EU can make a real difference. They prepare Europe to reap the benefits of a digital future

The European Commission has announced that consumers and businesses will gain better access to digital content and goods as it unveiled its “digital single market” strategy for the region.

The Commission said it will seek to clamp down on socalled geo-blocking, in which businesses restrict access to content based on the user’s geographical location.

“These unjustified practices should be expressly prohibited so that EU customers and businesses can take full advantage of the single market in terms of choice and lower prices,” said the Commission, which is the administrative body for the 28-nation European Union.

Andrus Ansip, vice president of the European Commission said: “Our strategy is an ambitious and necessary programme of initiatives that target areas where the EU can make a real difference. They prepare Europe to reap the benefits of a digital future.”

Telekom Austria CEO Hannes Ametsreiter welcomed the proposals: “A digital single market is necessary to strengthen companies and to give them flexibility for investment and growth. this refers also to the telecom framework regulation, which is outdated,” he said.

“Europe can only succeed by being more innovative than other parts of the world; a level playing field is just a short-term measure to reduce existing imbalances.”

He pointed out that the US has five operators, China has three, but “we have more than 150 in Europe”.

Huawei also welcomed the announcement. “We look forward to the ambitious overhaul of EU telecoms rules that was announced, as we believe it is vital to adapt the regulatory framework to a rapidly changing digital environment,” the Chinese company said in a statement.

www.globaltelecomsbusiness.com

“As the move towards digitisation is transforming any business into a digital business, Huawei is working with its European partners to achieve a smooth transition towards this digital age.”

Colt’s director of regulation, Barney Lane, called for more incentives for investment in high-speed broadband, “but this is best delivered by a truly competitive European market — not by offering sweeteners to existing monopolies to grab an even bigger slice of the market”.

Lane added: “The European Commission needs to ensure that rules designed to allow the efficient deployment of fibre networks — particularly surrounding access to civil infrastructure — are consistently applied across the EU. This will spur innovation and investment in high speed networks, and bring both European businesses as well as consumers the affordable, highquality and high-speed connectivity they deserve.”

In its proposal, which includes 16 initiatives, the Commission said it will also seek to create a level playing field for digital networks and services and maximise the growth potential of the digital economy.

“The aim of the digital single market is to tear down regulatory walls and finally move from 28 national markets to a single one. A fully functional digital single market could contribute €415 billion per year to our economy and create hundreds of thousands of new jobs,” said the body.

In addition the Commission said it will conduct a comprehensive assessment of online platforms such as Google, Facebook and Amazon to decide if they should be further regulated. “Some platforms can control access to online markets and can exercise significant influence over how various players are remunerated,” said the Commission.

Ansip said that the proposals “will give people and companies the online freedoms to profit fully from Europe’s huge internal market. The initiatives are inter-linked and reinforce each other. They must be delivered quickly to better help to create jobs and growth. The strategy is our starting point, not the finishing line.”

Ametsreiter added: “What we have at the moment is a lot of competition with too many players in the market and an intense regulatory framework with reduced incentives to invest. What we need is a single market economy to set up a proper framework with common licences, frequencies and one regulator only.” Q Global Telecoms Business May/June 2015 13

news: people

Cisco names Chuck Robbins as new CEO to succeed John Chambers Cisco has announced that Chuck Robbins will succeed John Chambers as CEO from 26 July 2015.

Robbins “has helped drive many of Cisco’s investment and strategy decisions”, Cisco said.

But even before his official takeover day the new CEO has announced his new management team, which sees the departure of Padmasree Warrior, the company’s CTO and strategy officer, and Edzard Overbeek, SVP of services.

They were expected to move into strategic advisor roles effectively immediately and stay through the transition.

Wim Elfrink, EVP for industry solutions and chief globalisation officer, will retire the day before Robbins takes over.

Earlier departures included president of development and sales Rob Lloyd and COO Gary Moore.

Robbins said: “The opportunity Cisco has to lead our customers into the digital age is incredible.

The momentum we have in our business is undeniable. Our strategy is working, and with the leadership team I’m announcing today, I’m extremely confident we will move even faster, innovate like never before, and pull away from the competition.”

“We’ve selected a very strong leader at a time when Cisco is in a very strong position” John Chambers

The group of 10 on Cisco’s revamped leadership team are Pankaj Patel, chief development officer; Kelly Kramer, CFO; Rebecca Jacoby, senior VP of operations; Francine Katsoudas, chief people officer; Hilton Romanski, chief technology and strategy officer; Karen Walker, chief marketing officer; Chris Dedicoat, SVP of worldwide sales; Joe Cozzolino, SVP of services; Mark Chandler, general counsel; and Ruba Borno, VP of growth initiatives and chief of staff.

14 Global Telecoms Business: May/June 2015

John Chambers: This is the perfect time for Chuck Robbins to become Cisco’s next chief executive officer

Chuck Robbins: The opportunity Cisco has to lead our customers into the digital age is incredible

Robbins said: “This is a remarkable team, with a diverse set of experiences, expertise and backgrounds to accelerate our innovation and execution, simplify how we do business, drive operational rigor in all we do, and inspire our amazing employees to be the best that they can be.”

Robbins, who joined Cisco in 1997, had been the company’s SVP of worldwide operations, leading its global sales and partner team which the company said was responsible for $47 billion in business. Cisco said Robbins has helped drive many of its investment and strategy decisions, such as its diversification into computersecurity products.

“This is the perfect time for Chuck Robbins to become Cisco’s next chief executive officer. We’ve selected a very strong leader at a time when Cisco is in a very strong position,” said Chambers, who had led Cisco since 1995.

For four years before that Chambers was SVP of worldwide sales and operations — more or less the job Robbins has been doing until his promotion to CEO. “Chuck is unique in his ability to translate vision and strategy into world-class execution, bringing together teams and ecosystems to drive results.

Chuck knows every Cisco segment, technology area, and geography, and will move the company forward with the speed

required to capitalise on the opportunities in front of us,” Chambers added.

Chambers will become executive chairman, where he will support Robbins and take a leading role in helping countries digitise their operations. The succession has been long expected since Chambers announced in 2012 that he would retire in two to four years.

Chambers said of Robbins: “He is a champion of the Cisco culture and has an incredible ability to inspire, energise, and connect with employees, partners, customers and global leaders. Chuck’s vision,

“With the leadership team I’m announcing today, I’m extremely confident we will move even faster, innovate like never before, and pull away from the competition.”

Chuck Robbins

strategy and execution track record is exactly what Cisco needs as we enter our next chapter, which I am confident will be even more impactful and exciting than our last.”

According to Cisco, Chambers has grown the company from $1.2 billion in annual revenue to its current run rate of $48 billion.

www.globaltelecomsbusiness.com

Cover interview: Marco Patuano of Telecom Italia Telecom Italia’s CEO Marco Patuano is building broadband networks, not so it can become a media company, but so that it can deliver media for others, he tells Alan Burkitt-Gray

Telecom Italia CEO shifts focus from debt to heavy investment in fixed and mobile broadband networks “It worked well because advertising was concentrated in two baskets so both groups had the resources.

It was a virtuous circle for getting good resources.”

But the model has changed. “The advertising market has found different channels for their budgets,” says Patuano. He doesn’t mean TV channels: the advertising industry worldwide is moving away from its old sureties in television, and is trying new outlets, including the internet.

“Now most companies no longer use TV advertising,” says Patuano. “It has become a vicious circle. So there is less content, less audience, less advertising — and the industry has entered a negative spiral.”

If this had happened — as in did in the UK — 20 years ago, conventional cable and satellite would have been the route to get pay TV to millions of Italian households. Coming late to the pay-TV world, Italy can leap into broadband internet technology. And that gives Telecom Italia a chance.

Unique opportunity Marco Patuano: We decided not to buy content or buy any content aggregator. Italy is quite exceptional in Europe because the penetration of pay TV is low

Telecom Italia is becoming a media provider in Italy — but not, as BT is in the UK, by creating its own TV operation. Instead, says CEO Marco Patuano, the company is becoming a distributor, delivering packages of content through its new broadband networks on behalf of existing media companies, including cable and satellite operators such as Sky Italia.

“We decided to have a different approach with TV,” he says. “We decided not to buy content or buy any content aggregator.” Instead, the company will start offering all content through agreements with TV operators.

Sky is one partner, and services with Telecom Italia broadband access — instead of satellite — will be sold through the normal retail outlets.

And “we are in talks” with Mediaset Premium, a digital terrestrial television service provided by Mediaset, the group founded by former prime minister Silvio Berlusconi and still controlled by his family company, Fininvest. “And we are talking with other content providers,” says Patuano.

This is a huge opportunity for Telecom Italia, he explains. “Italy is quite exceptional in Europe because the penetration of pay TV is low,” says Patuano. “Germany, France and the UK have 50-60% penetration.

In Italy it is 25%, which means there is a meaningful possibility of uptake in real terms for paid content.”

Why has it been so low? “Because free-to-air TV throughout the 1990s was in the hands of a duopoly,” he says. They were both funded by advertising.

There was state-owned RAI, which politically was on the centre left, “and Berlusconi on the centre right, and neither of the two had a strong incentive to change the structure of the free-to-air model”, says Patuano.

www.globaltelecomsbusiness.com

“That means that today there is a unique opportunity to grow in Italy — a move to subscriber-based TV,” says Patuano.

In the UK, BT is also moving into pay TV, though it has taken a radically different line. It has bought sports and movie rights and is offering them as a package to its broadband customers in competition with Sky and the UK’s dominant cable operator, Liberty Global’s Virgin Media.

In Italy, Patuano wants to be different. “We want to be an open platform,” he says. “We don’t want to be part of a single aggregator.”

Why? “An open platform would allow us to plug in a new content provider in a few months. There is no exclusivity — the remote controller is in the hands of the customer.”

That implies that the Telecom Italia broadband customer can subscribe to a number of services, including Sky, Mediaset or whatever else is on offer, via the same connection.

“The battle now is moving to the set-top box, which is interesting,” says Patuano. But, he notes, “Sky wants to keep its set-top box” as an exit barrier for the customer. Customers will be able to get Sky Italia via Telecom Italia’s broadband but, it seems, will have to use the standard Sky set-top box.

Patuano has spent his career in the company and its state-controlled predecessor SIP, having joined the group in 1990 — four years before the name change to Telecom Italia. An economist, he studied corporate finance, and he began in the financial operations of the company.

He joined just before mobile telephony began, and in 1996 he helped create Telecom Italia Mobile. He X Global Telecoms Business May/June 2015 15

Cover interview: Marco Patuano of Telecom Italia “So generally the ARPU for 4G users is €3-€4 higher than for a 3G customer with the same profile.”

Marco Patuano: Most important change was to move the attention of the company and the investors from the financial position of the company to the industrial strategy

Fibre investment

later went to the company’s Brazilian mobile operation, TIM Brasil, where he was CFO. Patuano returned to Italy to become group CFO in 2008, just after Franco Bernabè became CEO.

Right strategy But in October 2013 Bernabè, by then also chairman of Telecom Italian and chairman of the GSM Association, stepped down. The company had a debt of €29 billion and — according to reports at the time — he had failed to persuade the board that he had the right strategy to bring it down.

He had told an Italian parliamentary hearing that Telecom Italia had only two options to avoid a downgrade: launch a large capital increase or sell the company’s Brazilian assets. Independent board members expressed strong reluctance over a sale of the Latin American assets, as that could impoverish the group given the difficult state of the Italian market.

Patuano was appointed in Bernabè’s place in the Telecom Italia board. Today, says Patuano, “debt will remain a priority. Financial discipline will remain a priority.”

But he has changed the emphasis. “The most important change, which was introduced more than a year ago, was to move the attention of the company and the investors from the financial position of the company to the industrial strategy,” he says. “It’s all about investment.” We’ll come back to the debt, but Patuano wants to talk about the investment programme.

“We are kicking off a new wave of heavy investment that will allow us to develop in Italy and Brazil,” he says.

“In Italy we are an integrated player, which is helpful.”

The company has pursued an investment programme in its LTE network, now reaching about 80% of the Italian population, “quite fast”, he says.

“We are boosting sales of LTE services. In November 2014 there were about 2.5 million LTE users out of 11 million mobile broadband users. And 4G penetration is increasing constantly.”

The company will be “pushing hard in the summer” to drive up penetration still further, he says.

The company charges no premium for 4G service.

“The premium is implicit in the entry package,” he says.

Telecom Italia’s 3G users consume one gigabyte of data a month, but 4G users consume 1.5 gigabytes, he notes.

16 Global Telecoms Business May/June 2015

At the same time there’s heavy investment in fibre. In one year, the company aims to read one third of the Italian population, and by 2017 75% of the population”.

The company is using a range of technologies, including fibre to the cabinet, to the building and to the home.

Telecom Italia has started rolling out fibre to the home, with an aim to reach 40 cities. “And we have already covered eight,” he says.

There’s another item on Patuano’s agenda for growth of Telecom Italia’s business: data centres and cloud services for enterprise, and “this is already booking a growth rate of 40% year-on-year”, he says.

“The amount starts to be material.”

He estimates that the market is worth in the order of €100 million for cloud services “just for small and medium enterprises”, and notes that it is “a couple of hundred for infrastructure as a service for example, for remote storage”.

Telecom Italia is “cooperating with all the major players in the world,” he adds. “We have strategic alliances with Microsoft, EMC, HP, Cisco, Oracle and others.”

But “the most profitable area is medium and mediumsmall business”, he says. “Large companies have their own CIOs and tend to use us as a hybrid solution. We are integrating their proprietary solutions.”

But there is business to be done with the large enterprises, particularly with outsourced data centres.

He cites the insurance group Generali. “We run their data centres 100%,” says Patuano.

We inevitably turn to the financial questions. “At the end of 2013, the board approved extraordinary transactions to strengthen the financial position of the company to support the 2014-16 three-year industrial plan which will contribute approximately €4 billion in total,” he says.

“These actions included issuing a mandatory convertible €1.3 billion bond,” he adds. And Telecom Italia sold its stake in Telecom Argentina in late 2013 for $960 million to the Fintech Group, a New York-based fund.

Also on the agenda were plans to dispose of its Italian and Brazilian tower business and its TI Media digital terrestrial TV multiplexes — bundles of channel capacity.

Debt renegotiation A year and a half later, “we are using the very good financial conditions that exist now to renegotiate a good part of our debt”, says Patuano. “We are extremely active in liability management and the programme is not over — we see the markets still positive to do more.

We are planning to be active in the second part of the year to benefit from the positive financial market conditions to further reduce the cost of our debt.”

In November 2014 Telecom Italia, which owns 66.5% of TIM Brasil, sold the mobile phone towers of the Brazilian unit to American Tower for over €900 million.

The interview was conducted a couple of weeks before the sale of the Italian tower business, but the plans were already in preparation. Telecom Italia had already filed a request to make an initial public offer of its tower unit,

www.globaltelecomsbusiness.com

Cover interview: Marco Patuano of Telecom Italia Infrastrutture Wireless Italiane — or Inwit — with Italian market regulator Consob in March 2015.

“It’s an important strategic move to spin off the tower business. We are ready to IPO the tower unit.

The unit will be the largest tower operator in Italy.”

Inwit operates around 11,500 tower sites for Telecom Italia and other operators.

Just after the interview the company announced that it would be asking between €3.25 and €3.90 for each share, valuing the unit at €1.95 billion at least.

The plan was to sell up to 40% of the company on the Milan stock exchange.

Why an IPO in Italy, selling 40%, rather than, for example, a sale to a specialist tower company, as in Brazil.

Because it gives “two value-creation opportunities”, says Patuano. Because tower companies trade at up to 16 times ebitda. Within the group they are valued at “less than six times. If they are outside the company, it becomes 16 times.”

Tower consolidation And he expects “a second wave” of deals in the tower market. “The tower market will consolidate,” he says.

“We don’t want to give away any possibility of earning from the second wave of consolidation. Whoever wants to take part has to deal with us.”

That’s why Telecom Italia is keeping 60%, and Patuano expects the next wave of tower consolidation to begin in the fourth quarter of 2015 or the first quarter of next year.

And then? “We can decide whether to be on the buy side or the sell side. We will keep our options open.”

Finally, we turn to Brazil. It’s “a pure mobile play, with a small fixed unit, but very much concentrating on the mobile side”, says Patuano. And Telecom Italia plans to invest there, too.

“There are several structural differences between Brazil and European markets, which makes the Brazilian case interesting.” First, the population and age profile. “On the average, Brazilians are 20 years younger than the European average,” says Patuano.

“This age profile makes a huge difference — in Europe the take up of new digital services is linear. In South America it’s exponential.”

Usage of traditional services is much higher in Europe, but Brazil seems to be a better market for services such as WhatsApp. “In Brazil, we’ve sold the towers and made money, and bought frequencies, so it will be self-financing,” he says. “We have two thirds of the equity of TIM Brasil and we are not returning any cash to headquarters, and reinvesting the cash.”

There is a “need of a strong ICT and cloud offer” in Brazil, “but it’s a bit premature”, he says. “It will be some time — in the medium term.”

There is pressure to reduce the number of players in Brazil and “that will make the remaining players happier”, he says. “But we must not forget the relative numbers. Brazil has much more population than Russia: 210 million people.” Russia’s is around 140 million.

“I don’t think priority number one is consolidation.

The absolute truth is that the Brazilian market has a giant, Oi, which is facing a difficult time. Everyone is looking at TIM because it is only mobile.”

www.globaltelecomsbusiness.com

Concentrate on mobile Is it a takeover target? “This possibility has been deeply analysed — we thought that the conditions [for a restructuring] were premature. We decided to freeze the project and concentrate on mobile. Never say never. But for the time being we are happy as it is,” says Patuano.

A few years ago there was at least a draft plan for infrastructure separation in Italy, with the fixed network being floated out as a wholesale service that competitors could use.

“That was interesting at the time,” he says. “There was a window — if the preliminary conditions had been right. The window is not there any more.”

That’s because “today in Telecom Italia we’ve been able to cut our debt and there is much less pressure on the financial side”, he says.

“The government is doing excellent work in designing a programme of incentives to stimulate investing.

It is being more solid about [why] digital infrastructure is central to economic strategy. We are much more comfortable in proceeding on our own and are doing so with NGN investments.”

Meanwhile there is talk of mobile consolidation in Italy, with Wind, owned by VimpelCom, and Three, owned by Hutchison, apparently discussing a merger.

“It’s not if, it’s when,” says Patuano. “There are two operators playing the game of next-generation networks and two operators playing the game of convenience.” He means Telecom Italia and Vodafone in the first category.

“Hutchison and Wind are not making enough of NGN or 4G. They tend to have a portfolio that is less attractive to the needs of the customer. Because of quality we are a premium service and we still win back customers.”

Does he worry about a merger? “If they merge they will gain scale and gain synergies and increase profitability and they will have a huge opportunity to renegotiate part of their debt,” he says. “And more space for innovation in the network and that will be good for the whole market. Because if we go in competing for quality and we have enough space for innovation, and the size of the pie will grow. And we will increase our business and have happier customers.”

And across Europe? “I think there are two different moves in Europe — peripheral Europe and central Europe. In telcos there are some factors that are relevant and size is one of those. Convergence is the other,” says Patuano.

“I understand the importance Vittorio Colao [CEO of Vodafone] gave to start buying fixed assets. What are the conditions that can favour a huge increase in investment in access networks? If consolidation helps investment, politically speaking the combination will obtain a green light much more easily.”

Is there a possibility for a wider European group involving Telecom Italia? There is “not a black or white answer”, says Patuano cautiously. “What is important is to stay at the edge of innovation. Today we are one of the largest players in the world, with more than 100 million customers, which makes us a big operator.”

That means no? “It is difficult to exclude combinations but today [combination] is not something that is needed at any cost. We can walk alone.” Q Global Telecoms Business May/June 2015 17

Interview: Gervais Pellissier of Orange After nine years as CFO of Orange, Gervais Pellissier is running all the group’s European operations outside France — and the big issue on his agenda is fixed-mobile convergence, from Spain to Moldova

Fixed-mobile convergence across Europe is new focus for former CFO of Orange

Gervais Pellissier: I’m happy to come back to a business management after nine years of finance. We have a big challenge in most of the operations.

That means fixed-mobile convergence and transformation of many of the mobile operations

Gervais Pellissier is delighted to be back into a business management role at Orange after nine years of finance.

Since September 2014 he has been in charge of Orange’s operations in Europe, but outside France — and he seems enthusiastic about having his hands on again.

“It’s my first operational role since I became CEO of Orange in Spain in 2005,” he says. That was when he joined the group from the French IT company Bull.

That management role in Spain was short, only a few months. “It didn’t last as long as I expected,” he says. By January 2006, after only three months, he was put in charge of the group’s finance — though he held on to the Spanish operations for a time.

That means he spent an extraordinary nine years as CFO of Orange, until 2014 when the company recruited Ramon Fernandez, the former director general of the French treasury.

“I’m very happy to come back to a business management after nine years of finance,” smiles Pellissier.

This was a role he specifically agreed in discussions with the chairman and CEO, Stéphane Richard.

Pellissier’s title is CEO delegate — in other words, deputy CEO — of the group. It means, says Pellissier, that he spends 90% of his time in the operational role, and the rest “as a senior adviser to the chairman and CEO in terms of corporate matters”.

That part of the role “is to be involved in big transformations, in big deals even outside Europe”, he says. “I am at the side of Stéphane, to help him.”

And the European role? “Mainly to help our countries outside France to transform themselves. We have a big challenge in most of the operations. That means fixed-mobile convergence and transformation of many of the mobile operations.”

18 Global Telecoms Business May/June 2015

The most visible example is Spain, where he began his career in Orange a decade ago, he says. “In 2005 my task was to combine Wanadoo with Amena.”

Wanadoo was the name for the internet service provider business of Orange, in France, Spain and elsewhere. Amena was the Spanish mobile operator that Orange bought in 2005.

“My first mission there was to start the convergence,” he recalls. And that’s clearly the sort of role he likes: “business transformation, mergers, trying to combine companies”, he says. “I’m more of a combiner than a developer.”

According to Pellissier, there are two sorts of CFO. “There are cavaliers and there are Benedictines,” he says, “and you need both.” But very few CFOs are have both characteristics in one person. “When a CFO is a cavalier you have to be careful.” Someone needs to look after the balance sheet and be a defender of the CEO, he warns.

But now his mission is convergence. The first priority in fixed-mobile convergence is to adapt, he says.

Fixed and mobile have very different characteristics.

“The mobile business started as a mark of freedom for the individual.” He compares this with the time when all the family had to share one phone line. “The internet connection is still a collective line, and the TV is a collective line. But mobile has been a liberation from the need to share connectivity.”

Now children aged 10 or 12 “want their own mobile phone, their own privacy, their own connection. Mobile has allowed more individualisation of usage.”

But fixed-mobile convergence “is recreating some of the more collective environment”, says Pellissier.

The cable connection for TV “is a collective line — and this is not the same as mobile”.

This is not, as it may have seemed for a moment or two, a French philosophical discussion about the nature of individuality: Pellissier is discussing the way the market is evolving and how his Orange operations need to change to take account of that.

“It is a strong market evolution to more family offers and more collective offers,” he says. “It is a very big change. Will there still be an encounter round the TV set?”

It’s “a marketing evolution and an infrastructure evolution to answer a need”, he says.

That is the background to the fixed-mobile convergence strategy that Pellissier is putting into place across Orange. “When we convert the networks, our basic business as a service provider is to offer the best access wherever people are,” he says. “Fixed access on broadband will be more powerful than radio access.”

www.globaltelecomsbusiness.com

Interview: Gervais Pellissier of Orange

But the company has to involve itself in a number of connection technologies, including wifi and mobile access where there is no fixed infrastructure. “It’s complementary, more complementary than competing.”

So one of the priorities for the next five years is “more capacity and more speed, and more stable speed, in the fixed networks”.

But how will Orange do this — its fixed-mobile convergence strategy — across Europe? It depends, is the answer. “We have eight countries in Europe outside France. We might look at different ways to combine fixed and mobile in each.”

He goes back to his favourite example, Spain, where “there will be a combination of our own build and [infrastructure] share with Vodafone, and we are trying to buy Jazztel, which is a reseller of Orange mobile services”.

Orange’s €3.4 billion bid to buy Spanish fixed network provider Jazztel is still slowly making its way through the regulators.

“Spain will be a mixture of co-investment, investment and merging with another operator,” says Pellissier.

Poland will be different. “We are the incumbent there.” Orange bought a controlling stake in the former Telekomunikacja Polska in 2002. “Our moves there will be direct investment in the network.”

Belgium is more complicated. Orange’s mobile operator there is called Mobistar — the Orange name was formerly used by KPN in Belgium as a licensee of the original UK-based Orange. The inability to operate its brand in Belgium is clearly a source of irritation.

But the fixed market is divided up between cable operators and the incumbent, Belgacom. “There is very little space between them,” says Pellissier. “But we will be able to enter the market thanks to the regulator.

Cable will have to have a bitstream offer, and we are making tests right now, with a few hundred customers.

We will launch at the end of 2015 or early in 2016.”

www.globaltelecomsbusiness.com

More widely, he says, “you have to choose a momentum to rejuvenate the business and accelerate the transformation.”

He turns to three other, more challenge Orange operations in Europe: Romania, Slovakia and Moldova. “We are working on different options. We are not there yet,” is all he will say.

But he puts some figures on how much Orange plans to spend across its European businesses. “In Spain, more than €4 billion, in Poland, more than €3 billion, and about €1 billion in each of Belgium and Romania.”

Slovakia and Moldova? Orange has 40% of the Slovakian market and 60% in Moldova, but he dismisses both as “very small — very interesting but very small”.

Some of these operations are “smaller than a small region of France”, he shrugs.

Let’s turn to one of the bigger markets. How will that €3 billion investment be spent in Poland?

“Orange Poland has not yet started the migration of its copper network to fibre,” he says. “As in France we will be moving from DSL to fibre. We are in discussions with the Polish team on what the size of the investment will be.” But Orange is aiming for “up to 50-60% coverage of fibre in the next five years”, he says. The company will have to give its competitors access to the fibre network in the biggest cities in Poland, “but on a commercial offer, not at a regulated price”, he says. In the rest of the country there will be a regulated price, he adds. “The question is, at which price?”

But mobile is still the biggest business for Orange across Europe. “In most European countries we have started 4G deployments,” he says. “In Spain we are ahead of all the competitors, even Telefónica. Belgium has the best 4G.” In Poland, though, 4G still reaches only 40% of the population, “because the frequencies are not fully deployed. Poland is late.”

We haven’t talked about EE, the UK operator that is still a 50-50 joint venture between Orange and Deutsche Telekom. But, of course, BT has bid £12.5 billion for EE in a deal that will leave Orange as a small shareholder in the combined entity and DT as a larger shareholder. It will take until early 2016 for the merger to be completed.

Will Pellissier miss EE? “Yes, of course, he says.

I’ve been working with some of the team for nearly a decade.” Having “EE no longer with us” will be something of a wrench, it is clear.

But that fixed-mobile convergence strategy is driving the logic behind the planned merger. “The main consideration has to be fixed-mobile convergence,” he says. And he points to “how quickly O2 has reacted” to the move: Telefónica’s UK unit has accepted a £10.25 billion offer from Hutchison, which owns Three UK. But neither of them will have a strong fixed operation.

The BT deal “proves EE is the best UK network”, says Pellissier. “It’s a new adventure.”

And with that merger, the Orange name will finally leave its UK homeland, more than 22 years since it was launched. It was a breathtaking choice of name at the time; now it is the name the former France Telecom uses worldwide, but is vanishing from the UK. “It’s a cultural reverse takeover,” smiles Pellissier. Q Global Telecoms Business May/June 2015 19

Interview: Ernest Cu of Globe Telecom Social media is the killer app in the Philippines, says Globe Telecom’s CEO Ernest Cu. A deal with Facebook has brought expanded enthusiasm for mobile data packages

Free Facebook campaign is a success for Globe, driving up adoption of mobile data, says CEO Mobile operators from around the world looked sceptically at Globe Telecom of the Philippines when in October 2013 it launched a “free Facebook” campaign.

For most operators, over-the-top providers such as Facebook were stealing their bandwidth, offering free services to their own hard-won customers that in all rights they should have been supplying.

The fact that no mobile operator in the world had ever devised a compelling service such as Facebook seemed to be incidental.

But a year and a half later, Ernest Cu, the CEO of Globe Telecom, declares the project a complete success. Not only that, but “we’re in the second round of our work with Facebook,” says Cu. “That’s really gone well. We’ve seen an expansion of mobile data use and we’ve got a good base of people.”

The statistics show how effective the deal has been, he says. “At first, only 20% of Facebook users among Globe’s customers used mobile access. It’s 50-60% now.”

The idea was that Globe would persuade its customers to use their phones for internet access by offering free access to Facebook. All Globe customers, new and existing, could opt to receive unlimited Facebook access on their mobile phones. After the trial, subscribers would Ernest Cu: Globe is offering Hooq, a SingTel-backed upgrade to paid data plans to maintain streaming video service including movies, TV and local the richer internet experience and stay content. It has a very similar model to Netflix connected with friends and family.

When the free deal stops, usage goes down, “and then they pay and come back”, says Cu. In the new, second free trial, “the lift is not so big”.

Buy SMS, get Facebook Globe is still analysing the results of this second stage, which is a bit different. “If you buy any SMS package you get Facebook free,” he explains.

But figures for the number of active users of data has also shown the success of the relationship. “The number of daily active users has gone up fivefold,” says Cu. “The number of users each month has tripled. And mobile penetration has doubled.”

Social media “is the killer app in the Philippines”, he adds. Having succeeded with Facebook, “now we’re introducing more products as people evolve their digital lifestyle”.

20 Global Telecoms Business May/June 2015

“The number of daily active users has gone up fivefold.

The number of users each month has tripled. And mobile penetration has doubled.”

Spotify, the streaming music service, is one new entry to the Philippines market that Globe is leading.

“The Philippines has practically zero revenue in music, because it is all pirated,” says Cu. The Spotify deal “is a way to build legitimate content. It will help record labels get something. Anything is better than zero.”

Meanwhile the company is bringing down the price for its premium service, to just 129 pesos (about $2.85) a month. “That’s a level acceptable to Filopinos,” he says.

Digital life There’s an overall strategy here. It’s to build the customers’ enthusiasm “for the digital life”, he says.

And that means a constant stream of new offers. Basketball is hugely popular in the Philippines. “There is no football,” he says. Well, to be accurate, there is national team, but it has never qualified for the World Cup or even the Asian Cup. The national team, founded over 100 years ago, does not have a good record.

But back to baseball and more specifically the US National Basketball Association. “We have partnered with the NBA so that our customers can buy a league pass,” says Cu. And there are movies and TV. For that, Globe has partnered with Hooq, an Asian equivalent of Netflix, which was announced in early 2015 in association with Sony and Warner Bros. The company behind the project is Singapore’s dominant operator SingTel, which owns 47% of Globe.

It’s a very new service, and there are plans to introduce Hooq into India and other countries where SingTel has interests — and also in Singapore itself.

“It offers streaming video,” says Cu, “including movies, TV and local content.” The operation is being run by Peter Bithos as CEO, who has worked for the SingTel business in Australia and the Philippines for many years.

www.globaltelecomsbusiness.com

Interview: Ernest Cu of Globe Telecom “Hooq has a very similar model to Netflix, with a lot of local content,” says Cu. The service was launched in March 2015 in the Philippines, and Thailand, India and Indonesia are on the list. “It’s all about music, sports and movies,” he says.

According to the Hooq website, the service offers “unlimited entertainment on any smart device — Android, iOS, mobile, tablet or computer”.

It is, says Hooq, “a gateway to a world of unlimited entertainment. With just one app, you can stream, download and enjoy thousands of movies and TV series. All from your phone, laptop or tablet.”

Bollywood blockbusters The operation claims it “gives you unlimited access to over 10,000 movies and TV series”, including Bollywood blockbusters, Hollywood rom-coms and Thai horror movies. It is being rolled out country by country: try to log on in a country that is not served and you’ll get a courteous apology and a request to register for further information.

Self-optimising networks Those pipes are changing. Globe has an advanced project with Huawei to develop self-optimising networks. The project, which won a Global Telecoms Business Innovation Award in 2015, has been running on the company’s live network since 2014. It covers over 120,000 GSM 2G cells, 50,000 UMTS 3G cells, and 20,000 LTE 4G cells. The objective is to modernise Globe’s wireless network operation and maintenance and help to overcome the challenges brought on by the rapid development of mobile broadband.

“It is very successful,” says Cu. “The network is optimised every 15 minutes.”

According to his colleague Robert Tan, the CTO, the network complexity has increased by 50% but SON means that Globe has not needed to increase its operations and maintenance staff. Eventually the company is looking to expand the use of the SON to cover 4.5G and 5G. Cu says: “Like every telco, we’re also looking at software-defined networks and network functions

“Right now LTE is in most of the major metro areas. We’re trying follow where the devices are and we’re trying to give contiguous coverage in the cities.”

Hooq’s attraction to Globe is that pay-TV penetration in the Philippines “is still very low”, says Cu. “A lot of TV is free-to-air, but TV habits are shifting.”

Is Hooq just for mobile? No, he says: “We have a fixed network. Not a very big footprint, but there are half a million on DSL.” And the company has 800,000 homes connected via LTE fixed wireless.

Globe offers two flavours of LTE: conventional frequency-division duplex for mobile services and time-division duplex for home connections. FDD has one frequency for upstream and one for downstream — because it is assumed by the engineers that people will speak as much as they listen. TDD uses one single frequency for both up and down: if the purpose of the link is to see internet pages or stream movies, with only a little traffic in the other direction, then this is a very efficient way of using spectrum.

“Right now LTE is in most of the major metro areas,” says Cu. “We’re trying follow where the devices are and we’re trying to give contiguous coverage in the cities.”

Penetration of smartphones among Globe’s customers is around 30%, “but we are expecting 50% by the end of the year”, he says. And that stiffens his resolve to expand Globe’s portfolio of apps that it is offering customers. “Our core revenues are being threatened,” he warns. “We need to be able to grab the revenue from what’s running in our pipes.”

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virtualisation, all running on commercial hardware.

That’s what we’re being promised.”

Will it work? “What we’re going to see with NFV and SDN is a different set of logos,” he smiles. In other words, the logos of IT-standard commercial hardware makers will start to appear in operators’ networks, replacing those of the traditional telecoms equipment companies. “It’s going to be an interesting technology,” says Cu. He’s attracted to the promised ability to adjust customers’ services — factors such as latency and servicelevel agreements — without an engineer’s visit, just by changing the software. He’s seen a demonstration: “It’s magic. You used to have to send in an engineer,” he says.

Finally, we turn back to Globe’s developments with Facebook and other moves to encourage the use of mobile data. “We are sharing the experience with SingTel,” says Cu. “We have a twice yearly CEO forum and we have a product showcase.

And the experiences will also be shared with a wider group of Asia-Pacific operators that work with Globe in a roaming alliance, reaching from Vietnam to Australia.

So, even though some operators around the world are still grumbling about social media’s free use of their bandwidth, Facebook is turning out to be a real driver of the take up of advanced mobile services.

After all, that’s why people buy smartphones and pay the operators for service. Q Global Telecoms Business May/June 2015 21

Marketing upside interview: Rita Okuthe of Safaricom Safaricom’s Rita Okuthe tells George Stenitzer how mobile money filled a void, transforming lives and building the economy of Kenya

Why Kenya leads the world in mobile money “We speak to each and every customer individually through our products and brand.”

In the years leading up to MPesa, Safaricom started to recognise that customers were using mobile minutes as a currency of exchange. The question became how to expand on what customers were already doing.

Before MPesa, money moved differently in Kenya.

Going to the bank meant standing in long queues, perhaps for hours. With more than 40 million people, the country had fewer than 1,000 bank branches.

To put this in perspective, today more than half the world’s adults, or 2.5 billion, have no bank.

Rita Okuthe: We listen to and understand our customers. We speak to each and every customer individually through our products and brand

Public transport

It may seem unlikely, but the most successful mobile money on earth comes from Kenya. Mobile operator Safaricom filled a void in a country where more people have mobile phones than bank accounts.

Mobile users in the United States and Europe are just now getting acquainted with mobile money. But Kenyans began to enjoy its utility and convenience in 2007 when Vodafone, which owns 40% of Safaricom, launched MPesa (Swahili for “cash”) at Safaricom.

MPesa has since spread to Afghanistan, Tanzania, Zanzibar, India and Romania. Yet it remains most successful in Kenya, says Rita Okuthe, formerly the marketing director of Safaricom, the largest operator in Kenya, and now general manager of its enterprise business unit.

MPesa’s success has spawned a raft of competitors.

Copycat services are springing up across Africa. Apple Pay has launched in the US, and soon it’s coming to the EU. Google, Facebook and others are introducing mobile money too. What can they learn from the MPesa experience?

Not every country will prove as fertile for mobile money as Kenya. The conditions need to be right.

One key is that Safaricom takes a customer-centric approach to its strategy and marketing. “We listen to and understand our customers,” Okuthe says.

22 Global Telecoms Business May/June 2015

Before MPesa, Kenyans used to send money via public transport vehicles. Sometimes the bus would be robbed and people would lose their money. As Safaricom CEO Bob Collymore notes, unbanked Kenyans may hold as much as $3.4 billion in cash savings that earn nothing and are at risk of theft.

While those conditions provided fertile ground for MPesa, many other things also had to go right.

Q Regulators needed to allow an experiment with mobile money to proceed.

Q Mobile money had to work on the simplest mobile phones.

Q Mobile money had to be as easy to use as sending a text.

Q Mobile money had to be backed by a highly trusted brand.

Q Any problems with individual transactions had to be addressed immediately to uphold customers’ trust.

Q The e-float had to be easy to convert into Kenyan shillings and back again. So Safaricom built a large agent network to cover a country about the size of France, but with only half of France’s population density.

With those conditions met, mobile money evolved quickly. “MPesa emerged as a cheaper option to send money faster, between people’s handsets,” says Okuthe. “It offered users a safe and quick means to transfer cash across distances, without the need for a formal bank account.”

When political unrest affected banks in 2008, MPesa took on an even greater significance in Kenya’s economy. For many people, it was the only way they could deliver money to family members in need.

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Marketing upside interview: Rita Okuthe of Safaricom

Marketing insights from Safaricom Q Safaricom offers many

actionable insights on mobile money: Q Recognize how

customers already use your services.

Q Imagine how big an

impact a telecom can have on a developing economy.

Q Earn and build

customers’ trust in your brand.

Q Get started with a single

simple service. Make your service as easy as sending a text.

Q Make your service

cheap, compared to alternatives.

Q Offer broad distribution

through agents who exchange currency and e-float.

Q After establishing an

initial service, partner with a bank to expand.

Safaricom’s moves in mobile money reflect the company’s larger purpose: to transform the lives of Kenyans. As Okuthe says, “We are focused on being our customers’ business partner of choice, through providing a relevant and innovative set of information, communications and technology solutions.”

MPesa is woven into everyday life in Kenya. People use MPesa to buy vegetables in the market, to pay for taxis, utilities and school fees, and to receive payments from customers, employers and the government.

Today MPesa serves 18.5 million active customers, or more than three out of four adults, in Kenya.

“Mobile money has made a significant contribution to the lives of our customers and has accelerated Kenya towards a cash-light economy,” Okuthe says.

Monthly MPesa payments amount to 121 billion Kenyan shillings, equivalent to about $1.2 billion.

“What we have achieved is the creation of the country’s largest payment system. Mobile money transfer services now transfer the equivalent of one-third of Kenya’s gross domestic product,” Okuthe says.

Rise in income Most important, the availability of mobile money improves the lives of average Kenyans. One study estimated that MPesa has contributed to a 5% to 30% increase in household income in rural Kenya.

MPesa has caught on as Safaricom cultivated a reliable, trusted, growing network of 85,000 agents who exchange MPesa e-float for Kenyan shillings.

Now Safaricom is advancing mobile finance beyond simple transfers. “The dynamism of MPesa keeps evolving,” Okuthe notes. “It is dynamic enough to accommodate emerging customer needs much faster than any other financial product has been able to in this market.”

In 2012, Safaricom extended the power of MPesa by adding a disruptive new set of financial services called M-Shwari — Swahili for “cool” or “calm”.

M-Shwari adds savings accounts with no minimum balance, offered with the Commercial Bank of Africa.

M-Shwari also offers microloans that enable entrepreneurs to start or expand a business. The average loan is about $12. Since the costs of handling cash are lower, M-Shwari microloans offer lower interest rates too. Customers make loan payments on time to avoid the risk of defaulting and losing a phone number.

The new M-Shwari services have caught on quickly as millions of Kenyans take advantage of convenient savings accounts and easily accessed microloans. So far M-Shwari has attracted over 7 million customers, garnered Ksh 4.0 billion in deposits, and issued Ksh 1.2 billion in loans per month.

Safaricom has big dreams for the future of Kenya.

To stimulate technology entrepreneurs in Kenya’s Silicon Savannah, Safaricom is challenging developers to identify needs and develop early-stage mobile technology companies. For example, developers are rapidly creating new applications that build on the core MPesa services.

“We are committed to ensuring that local ICT start-ups have the opportunity to scale and grow,” Okuthe says. “We want to grow the use of mobile technology in transforming lives. Through mobile technology, we hope to complement government

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efforts, attain our economic blueprints, and help Kenya become a middle-income country by 2030.”

To support that thrust, Safaricom is accelerating construction of its fibre network for fixed calling, in addition to offering new managed services for enterprises.

Sport and music As steward of the Safaricom brand, Okuthe deploys a wide range of marketing activities, with heavy emphasis on sporting and music events. Safaricom is the biggest sponsor of sports and music in Kenya, contributing much to its cultural development. Sponsorships and events are helping to find tomorrow’s most promising athletes and musicians, giving them unique opportunities to develop their talents. To highlight just a few: The Safaricom Athletics Series of events enables new sports talent to be found and nurtured. The best athletes from the series move up to represent the country on the global stage at events such as the Olympics.

Kenya has a profound passion for running, and the Safaricom Marathon attracts participants from all over the globe who come to Kenya to compete and raise funds for a good cause. It’s grown from 180 runners who raised $50,000 in the year 2000, to 1,200 runners who raised $725,000 in 2014. This year’s Safaricom Marathon on 27 June at the Lewa Wildlife Conservancy is expected to be even bigger. In all, since the inaugural marathon in 2000, the Safaricom Marathon has raised a total of $4.9 million.

To connect with rugby lovers, Safaricom took on the title sponsorship of the Safaricom Sevens — previously known as the Safari Sevens — in 2010. This annual tournament, run by the Kenya Rugby Union, is one of the biggest seven-a-side competitions in Africa.

Safaricom is a growing force in Kenyan music.

Niko Na Safaricom Live is now Kenya’s top music property, focusing on growing and nurturing local music talent. This event provides upcoming artists and talents with the opportunities to enhance their skills by performing on a global stage.

Similarly, the Safaricom Youth Orchestra offers opportunities to underprivileged youths, ages 10 to 18, with budding music talents. Safaricom also backs the Groove Awards, the premier Gospel music awards showcase in East Africa. And the Safaricom International Jazz Festival is raising the bar of jazz performance in Kenya.

Transforming lives To fulfil its mission to transform the lives of Kenyans, Safaricom plays a large role in charity and community development. Some small communities’ only source of electricity is a Safaricom generator. The Safaricom Foundation is working to impact communities by supporting projects in the arts, culture, health, sports, education and the environment. Safaricom also sponsors the Michael Joseph Centre, which exposes Kenyans to new technologies.

With mobile money, telecom services and cultural development, Safaricom is playing a pivotal role to help realise Kenya’s dreams of becoming a middleincome country over the next 15 years. Q Global Telecoms Business May/June 2015 23

Interview: Christian de Faria, CEO of Airtel Africa Five years after India’s Bharti Airtel bought Zain’s African business, CEO Christian de Faria discusses the challenges of such a diverse environment, especially when telecoms is sometimes seen as a cash cow

Diverse market across 17 countries poses challenges for Airtel’s leader in Africa Christian de Faria: The sector is always seen as a cash cow. In some countries this tax harassment is becoming quite unbearable

Indian owned operator Bharti Airtel has launched 3G services in all 17 of its African operations, and has 4G in two of them, with a third due to come online soon.

It’s a hugely diverse market, says Christian de Faria, CEO of Airtel Africa, with average income varying widely from the richest of the 17, the Seychelles, to the poorest.

But those figures about the launch of 3G and 4G services show that “we are not being left behind”, he says. “Africa is closing the gap in terms of adoption of new technology. Ten years ago we were far behind, but today we are more or less at the same stage, though adoption is a different story.”

De Faria is just coming up to his second anniversary in charge of Airtel’s Africa operations, based in Nairobi, Kenya, after seven years at African rival MTN. And Airtel has owned the 17 operations for just five years, having bought them from Zain in June 2010 for $10.7 billion.

That was a good profit from Zain, which was marking a swift end to its global ambitions outside its Middle East heartland. Five years earlier it had bought the former Celtel’s business for $2.84 billion. For the customers, it meant three brand names — Celtel to Zain to Airtel — and three market strategies in just a few years. And several changes of management.

24 Global Telecoms Business May/June 2015

French-born de Faria trained as an accountant and has worked in high-technology industries around the world for well over two decades — joining the telecoms industry in Malaysia in 1993, implementing financial systems in a company part-owned by Deutsche Telekom.

At MTN, which he joined in 2006, he ran nine of the company’s 21 operations. At Airtel he is in charge of all the company’s African businesses.

“We operate in 17 countries in Africa,” he says. “We are dealing with countries with a very low GDP — $300 to $500 — and up to $33,000 in the Seychelles.”

The units include what he calls “the powerhouse of Africa, Nigeria, the biggest economy in Africa”.

And diversity is built into the model — not just the economy, but also the politics, the regulation, phone penetration, and the competition position.

“In terms of competition we are in countries with two players and countries with nine players — the competitive environment is very difficult. We are market leader in 10 of the 17 countries,” says de Faria.

“And in most of the other seven we are a close number two.” The exception is “where we came into the market late, in Rwanda, [where] we are number three.”

The competitive position varies widely from country to country. “Ghana has nine, with a very competitive market. And Tanzania is very competitive.”

High penetration He continues: “Some countries have higher than 100% penetration — such as Ghana, Gabon, Congo Brazzaville. Others have 40%. The strategy you have in each market has to be different.”

The different management teams in each country have to work with the different states of the market and the economy. “Every market has its own specificity,” says de Faria. “Infrastructure varies from country to country — electricity, communications, roads. In some countries there is more [political] stability than others. In some there is more instability.”

And each of the 17 countries has its own regulatory set up. “Regulators are very different. There are countries where regulators are very independent from the ministry of telecommunications, but in some it is a parastatal organisation, so you can question the independence of the regulator.”

One of the problems is that “the telecommunications sector is always seen as a cash cow”, he says.

“There is a very strong perception of this. In some countries this is becoming quite unbearable.” He calls it “tax harassment”, but says he “will not name”

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Interview: Christian de Faria, CEO of Airtel Africa the countries. “It is becoming better over time, but you wish everywhere to have independent bodies” as regulators.

On the other hand, Airtel does what it can to benefit from being part of a large organisation, stretching not just across Africa but also into the Indian subcontinent.

Airtel One Airtel has retained Zain’s bold plan — which actually dates back to the Celtel days — to minimise or abolish roaming charges across its network. It used to be called Zain One, and stretched from Africa to the Middle East. Today it is Airtel One and, while the Middle East is no longer included, India, Bangladesh and Sri Lanka are included in the scheme.

“Is very, very popular,” says de Faria. “We are very strong in east Africa — Kenya, Uganda, Tanzania and so on. It’s definitely a very popular product — you are not charged for incoming calls.” It means that the company has “an affordable tariff” that includes voice and text messaging.

And Airtel has launched its mobile payment service, Airtel Money, in all of its African countries, “and 17 million people carry out transactions on Airtel Money”, says de Faria.

“It’s growing very, very fast. It is universal because of the low penetration of banking in Africa. The percentage of the population having a bank account is very, very low. Banks don’t have branches — but we are everywhere. People can send money from the city to the village, and they can pay bills. In this part of the world, if you want financial services, you use mobile financial services.”

The latest development is cross-network payments.

These are available “not only within the country but also cross-border”, he says. “We are the first mover.”

Airtel’s customers in Burkina Faso can exchange payments with MTN customers in Ivory Coast, where Airtel has no network. “We are doing deals with operators where we don’t operate. We are participating in the financial inclusion of the population as well as communications inclusion.”

Procurement The group also benefits from operating in 17 countries — as well as India, Bangladesh and Sri Lanka — by centralising procurement. “We try to synergise our market spread and breadth to get a better deal on network infrastructure,” says de Faria. The company standardises on kit from Ericsson, Huawei and Nokia, and “on the billing side, we are in the process of looking at a billing platform. We have evaluated [a number] and we expect to complete the process very soon.”

Outsourcing seems to be less in favour than it was.

In 2010 Airtel signed a deal with IBM to manage is African technology operations in a proposed 10-year contract. There was also a parallel Indian deal. However in 2014 Airtel in India announced that much of the Indian business was going to Wipro. And de Faria is reluctant to talk about outsourcing in Africa.

“Outsourcing was the case but we are reviewing where it is meaningful and where it is not meaningful for our business model,” he says cautiously.

“Outsourcing makes sense where there is economy

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of scale. We are in the process of reviewing our outsourcing model — it is still work in progress.”

Tower outsourcing is different, and Airtel has outsourced towers in 14 of the 17 African territories, though some of those are still deals in progress. “We were sharing infrastructure in the past. We have been in the forefront. The second move is to share the capital structure. The tower is passive — we can strengthen the capital structure by outsourcing to a specialist company, so we can reinvest in the country and gain operational efficiency.”

This means “we can divert management attention to taking care of the customer” and become more customer facing.

The other three countries? “Not yet — because of the particular economies in terms of value creation.

The volumes are not as interesting.”

The group “shares the best practices [with India] and we have centralised procurement”, he adds. “We have a forum where we share best practice. We import and export the best ideas. We have procurement for Africa, but certain items are procured globally.”

Branded handset The company has its own branded Airtel handset, but he adds: “Africa is very brand conscious. You still have to offer the traditional brands — definitely Samsung, and in French-speaking countries Alcatel and Nokia. The Chinese manufacturers ae getting market share slowly but surely. The price of devices is falling very fast.”

There is also a group effort to develop apps for its own market. “But we are also working with content aggregators — across music, education, games and video.” However, he notes, “we are not a content producers”. What is popular in Airtel’s markets is “football, games, especially music”, he says. “You can log into Airtel and buy music, games, news. We also have a mobile health service — and you can buy your insurance with your phone.”

Launching 3G in all 17 countries was clearly a good move for Airtel. “Niger and Chad were launched last year. Traffic volume and revenue are growing ever since — more than 70% year on year. Traffic is doubling: a huge rate.”

This can only increase, as “the price of smartphones and feature phones is going down”, he says. In many countries the penetration rate of smartphones is very low — he puts it at 10-15%, which gives considerable potential for market expansion. “For many users, their first contact with the internet is on a mobile phone. There is a huge appetite.”

LTE is new, of course, coming to Rwanda and Senegal at the end of 2014, and “Gabon any time soon, and selectively in many other countries”, he adds.

Finally we turn to corporate social responsibility.

“We are very active in the fight against Ebola in west Africa.”

Airtel sponsors “45 schools across Africa. We are responsible for 25,000 pupils. We are also training young people in ICT: 5,000 in Gabon, 6,000 in Chad,” says de Faria. “Besides putting a smile on the population, you can see where you build a school, or where there was a school without a roof.

It makes a difference.” Q Global Telecoms Business May/June 2015 25

View from the Top: Alex Hawker of AsiaInfo Operators need to use every customer interaction in real-time to understand the motivations and maximise every engagement opportunity, writes Alex Hawker

Omni-channel: from buzzword to business case

Alex Hawker: western European operators can save up to $4.6 billion in opex a year

Alex Hawker is managing director, EMEA, at AsiaInfo. A white paper based on the Northstream research is available in full at www.asiainfo. com/omni-channel

The concept of omni-channel has been around for ages, so long in fact that it has become one of those cover-all buzzwords that has started to lose meaning.

So before we go any further let’s define what it is, and how it is different from another overused — and often misunderstood — buzzword: multi-channel.

A multi-channel presence has become a basic requirement for operators, with the digital channel in particular taking centre stage.

Operators have altered their business models from single-channel to multi-channel. They are now accessible to customers across multiple channels. However, this is only really meaningful if a customer chooses to start and complete a transaction in the same channel.

Omni-channel, meanwhile, is the inevitable evolution to reduce complexity and to stop the ping pong effect of multi-channel, whereby a customer is frequently forced to reinitiate the dialogue with the operator when entering via another channel. At its best, omni-channel delivers the great promise of subscribers moving fluidly between devices and shopping and communication channels, with the operator in lockstep with their customer in real time and able to add value to their relationship — with personalised service and promotions, for example.

Operators need to use every customer interaction in real-time to understand the motivations and maximise every engagement opportunity. Doing so leads to increased spend, higher satisfaction and a deeper relationship with the customer across all channels.

The soft benefits of moving to an omni-channel environment are far from lost on operators. But however compelling the concept, there has, until now, been a lack of information regarding concrete implementations, with their associated challenges and benefits.

Independent research consultants Northstream have studied how organisations in a variety of markets have realised the benefits associated with the omni-channel capabilities of next generation CRM, and to quantify the benefits to the telecoms sector in particular.

Northstream concluded that, with a well-implemented solution in place, western European operators could save up to $4.6 billion in opex annually.

This was driven by: Q around 20% reduction in customer service opex, by eliminating duplication of agent work in the contact centre and retail store; Q improved net promoter score (NPS), resulting in benefits from increased customer satisfaction and

26 Global Telecoms Business May/June 2015

up to 10% reduction in annualised churn; and Q up to 30% savings in IT opex from back-office

streamlining and automation By investigating the impact of next generation CRM within other verticals, Northstream also demonstrated that, in addition to the immediate opex savings, an omni-channel approach could help to significantly increase sales revenue as well. The impact on revenues could potentially be even more significant than the cost savings.

Operators are dealing with a more complicated environment than is seen in adjacent industries. Telco propositions are complex by their very nature. As well as the differences in the way products and services are bundled, there are more sophisticated processes for promotion, lifecycle and order management.

To support the complex inventories, contract offerings, numerous payment options and billing analysis — all characteristic of the telco operator landscape — requires a great deal of resilience and heavy lifting.

Omni-channel commerce is complex, calling for a huge amount of accurate information to be available to the customer and the operator 24/7. Managing this requires specialised systems, built for the job and integrated into the operator’s enterprise architecture, not adapted or re-engineered systems simply bolted on to do the job.

Naturally, there are some major challenges associated with the approach. It’s no great surprise that legacy IT is considered by operators to be the main barrier, according to the research. The existing disconnected multi-channel set-up means that operators can perform omni-channel actions, but to do so involves a lot of manual effort, which was expressed during the interviews Northstream conducted with operators.

The complexity involved in the management of these legacy systems and their disconnected multichannel set-up is hard to overstate. In practice it means that operators face significant customerrelated challenges: primarily, channels cannot share their customer data, preventing meaningful, holistic customer insights from which the operator could create personalised, value-added services.

Operators already consider omni-channel to be vital to customer experience, and in particular to improving Net Promoter Score, which leads to a compelling business case based on opex savings alone, and likely even more upside from increased sales.

However, omni-channel for telecoms is complex and today’s implementations are relatively immature as operators struggle with legacy IT. Some operators are implementing an overlay, which improves customer experience but may fail to integrate the new digital business and channels with the core business and traditional channels. Rearchitecting is more costly and risky, but it enables a more powerful, future-proof solution. Q

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global telecoms www.globaltelecomsbusiness.com

BUSINESS

Picture: Deutsche Telekom

CEO and CFO Guide to Customer Experience Management

It’s always fun writing about customer experience management in this industry — because you have only to ask for people’s reallife experiences with telecoms and they’ll quickly run into a long diatribe about the times the installer didn’t show up, or they got hit with a surprise roaming bill, or the streaming video crashed 10 minutes into a game they’d been wanting to watch.

due to the fact that loyal customers spend more, stay longer, do not create extra serving costs and recommend our brands to their friends.”

And that happens even if they work in the industry — which at least means that telecoms executives know how bad it can be.

And know how vital a good, reliable, quality telecoms service is to people in the 21st century.

If your car breaks down, you take it to a garage. If your central heating boiler springs a leak, you call the plumber.

But the industry has such a complex ecosystem that it’s hard for the customer to know where things have gone wrong.

Chief marketing officers know how important customer experience is: read the comments of leading CMOs in our roundtable that starts on page 32.

But when the streaming movie stops at the most exciting part, is it your smart TV, is it the Blu-ray player that connects you to the internet? Or is it your home hub? Or your fast broadband connection? Or the movie service provider, somewhere in the cloud?

As Mikhail Gerchuk of VimpelCom says in that feature, “The biggest impact is on customer retention. Ultimately, good customer experience generates extra revenue and extra margin

They’re all run or made by different companies. How is the poor consumer to understand? The trouble is, it’s the telecoms service provider that will get the blame.

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Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015 27

Customer centricity It’s never been easier for customers to take their money elsewhere when any aspect of service disappoints, and tell the world about it via social media. By Annie Turner

Operators need to bridge the reality gap if they really intend to be customer-centric

Steps to becoming a customercentric business.

Source: TM Forum

The communications industry gets the importance of customer centricity — and the fact that the customer has to be the starting, middle and end point of everything we do. This was consistently underlined by numerous senior executives from service providers at TM Forum Live! at the beginning of June.

As many service providers strive to profit from digital services, they know that customer centricity is the foundation of all successful native digital companies and that they need to meet those expectations. Zappos, the US online shoe retailer owned

by Amazon, tells customers where else they can buy the items they want if Zappos doesn’t have them in stock.

As management consultancy McKinsey comments, “Little wonder that 75% of its orders come from repeat customers” and the competition to gain employment there is fiercer than getting into Harvard.

Ryanair, the European no-frills airline, provides further evidence that it pays to make customers happy and is fundamental to staying in business. The company has posted a jump in profits of 66% in the financial year ending in March 2015. After incurring losses in 2013, the airline, which had been famously and openly contemptuous of its passengers, acknowledged that simply being cheap isn’t a sustainable business model.

It turned its attention to providing much improved customer services and, as the Financial Times wrote, “Ryanair’s website update, business-friendly schedules to primary airports, allocated seats and extra u ccabin baggage translate into more passengers, and 88% of seats being filled. … With its discovery 8 tthat a little love goes a long way, Ryanair has rrealised that market share is its to lose.”

A good message for all businesses to bear in mind: it’s never been easier for customers m tto take their money elsewhere when any aaspect of service disappoints, and tell the world about it via social media. w Churn and acquiring new customers iis expensive — and a global survey published by Ovum in Novemp ber 2014 shows that operators b aare likely to lose half their ccustomer base over the next 12 months. About a quartter of all users globally ssay they will definitely providers, cchange with another quarter w iindicating they may do so. d

28 Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015

The reality gap These results support the overwhelming anecdotal evidence that service providers’ stated priorities and vision don’t match the reality of their customer service, and is not even close. On the upside this means there is a huge opportunity for anyone who gets it right and stands out from the crowd.

The big question is, how? As stated at the start of this article, the customer has to be central to and drive to everything you do. Customer centricity isn’t only the responsibility of customer-facing staff — they are totally dependent on the data, processes and systems that underpin the information they act upon and the options they can offer.

The most basic requirement of all is gaining an understanding of customers, their experiences, preferences and wishes. Although this is fundamental to success now and in future, it’s not a topic widely adopted in the communications industry. There are lots of things you can do, now, to get moving though.

Start by listening — the old maxim is that we have one mouth and two ears for a reason. Most customers are only too happy to give suppliers their opinion — and the more upset they are, the more emotional and forthcoming it is.

Ensure you have mechanisms in place to feed this back into your organisation and act on it. Don’t forget your customer-facing staff are a potential goldmine of information and should be treated as such: they are an untapped asset in this regard.

But it has to be easy for them to do it, without fear of reprisal. Issue regular, obligatory surveys to these staff and give them incentives to do more than tick boxes — and make sure you act on it and let them know you have. That includes stuff that may not seem important to you or on your agenda. Staff should also have a mechanism to record feedback as it’s given.

You should also give them discretion to appease and please unhappy customers — remember the Zappos example — rather than being powerless to make customers happier.

There is nothing more boring than listening to other people’s convoluted stories about their frustrating experiences — the best way to understand these frustrations is for senior executives to have to use their own systems, regularly — that would certainly provide excellent motivation to fix anything that doesn’t work well and especially if it’s tied into their bonus schemes, as Telstra, Sprint and others have done.

Beware snapshots Although much faith is placed on analytics and touch points, but there is a serious danger of only gaining

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Customer centricity

A typical customer journey or channel hop 1. Rebecca receives an email from her service provider with a new offer.

2. She clicks on an embedded URL in the text to see more information and a brief video on the web, as well as two product reviews.

3. Left with a few questions, she calls the contact centre to resolve them.

4. Satisfied with the answer, she posts her interest in the product on social media, receiving positive feedback from her friends — and a special offer from the company.

5. Encouraged, she mulls her options for a few minutes, and then calls the local store to ensure product availability in her preferred colour and get directions.

6. On her way to the store, she hears some radio advertising and notices some digital

signage promoting the product, further reinforcing her intent to purchase.

7. At the store, she handles the product, gets instruction on how to use it from a video kiosk and completes the purchase.

8. Pleased, she proudly posts pictures of her new acquisition on social media and tells her many friends about her experience.

Source: TM Forum 2014

Annie Turner is senior director of content at the TM Forum, the global not-for-profit industry association whose customer centricity programme offers models, tools, best practice, use cases, metrics and more, developed and evolved through members’ contributions and collaboration to address business needs.

a series of out-of-context snapshots, and therefore a distorted overall picture. Customer experience stretches from before someone deciding to become a customer all the way to using your products and buying more — if you get it right — or terminating — if you get it wrong.

This is why customer journeys are so important.

It ties all the individual experiences together, from network performance issues to online experiences and call centre interactions. If any one of these things is poor, the overall experience is bad.

They give service context and deeper insight into customers’ motivations around single activities — such as the less obvious reason for a call which reveals the root problem. Again, feedback loops so that the information gleaned can be used are paramount if you want to make improvements.

Building, maintaining and constantly refining customer journeys is an onerous, ongoing undertaking but, as McKinsey states, “across industries performance on journeys is 30% to 40% more strongly correlated with customer satisfaction than performance on touch points is — and 20% to 30% more strongly correlated with business outcomes, such as high revenue, repeat purchase, low customer churn, and positive word of mouth.”

Remember that the most important part of the customer’s journey is their experience of the network — it is the single greatest source of customer dissatisfaction, as stated by Ovum in its global research cited above. Yet this was not seen as part of ‘traditional’ customer experience until fairly recently, so much as an engineering function.

The allure of omnichannel Clearly channels of communication with service providers are also key and now customers channel hop — see panel — which is one of the reasons omnichannel is so important. Although omnichannel is a hot topic

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in communications right now, it’s not well defined or well understood.

Techtarget.com defines omnichannel as “the seamless melding of the advantages of in-store (brick-andmortar) shopping with the information-rich experience of online shopping. …What distinguishes the omnichannel customer experience from the multichannel customer experience is that there is true integration between channels on the back end.”

Rob Rich, TM Forum’s managing director of research, comments: “This is a reasonable and practical definition, especially for retailers who have felt the heat of competition from online retailers, and it’s probably a reasonable place for most industries to start, but it may not be enough in the longer term, when customers will expect the same style of interaction throughout their lifecycle.”

Rich thinks it needs to be broader in scope and more strategic: “Omnichannel is about more than just standing up a set of linked store-fronts that cross interaction channels, or integrating some aspects of the supply chain with the store front. Rather, it is a key enabler of aspects of customer centricity, supporting the need to identify, engage, inform and support high value customers throughout the lifecycle.

“It’s about optimisation of the customer supplier dialogue over the long term, supporting the notion of a happier customer and a more profitable business. It’s about reinforcing the brand through consistent engagement. It’s about curating the vast amount of information exchanged between the consumer and the company.”

Being sociable Your omnichannel and overall customer centricity approach needs to embrace social media — it is an informal customer engagement channel and must be treated as such. By correlating the unrivalled wealth of information service providers hold about their customers with their online activities and views, there is much to be gained, from dealing with immediate sources of discontent to offering personalised services when you have an understanding of their lifestyle and interests, which also generate more revenue and loyalty.

In addition, great operational efficiency can be gained by integrating social media information with customer service workflows to leverage user-generated content, from Q&A platforms, for example.

Competent customer service staff can also make timely offers through the most appropriate channels.

This article has implicitly dealt with things that need fixing within service providers around their core services to bridge the gap between today’s reality and their vision of customer centricity. The imperative is well understood and the challenges huge.

Therefore it is a sobering thought that the internet of things, virtualisation and digital services — which will primarily be delivered through partnerships and ecosystems — are in the process of becoming massive, mainstream forces.

Individually and in combination they have big implications for customer experience, which we do not understand anything like fully. The only thing that is certain is that the achieving customer centricity will never be a done deal, because there will always be so many changing aspects of it. Q

Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015 29

Customer engagement The public are not impressed with their telecoms operators. People expect more than they used to and service providers are scoring badly in customer experience surveys

Damning evidence shows that telecoms operators rate poorly when compared with other businesses In an ever changing telecoms landscape where the market is becoming increasingly mature and competitive, the need for operators to differentiate and deliver on their offerings has become not just a priority, but a necessity.

Traditional methods like price or product features are no longer sufficient to stay in the game. The digital age has placed customers in the driver’s seat, radically shaping how they shop and share their experiences.

Competitors are just a click away today, on a website, blog or social media platform — just some of the many channels and technologies they will take to, to discuss their experiences. Given the numerous offerings and channels, the ability to attract and retain customers will make an operator stand out from the crowd.

“As technology unlocks new opportunities for our customers, their behaviours and expectations change.

One of the biggest changes we’ve seen is that we’re no longer judged solely by how we compare to our competitors. Instead, technology has blurred the traditional boundaries and we are seeing many more companies competing for our customers’ attention,” says Gareth Turpin, general manager of customer and commercial at Telefónica’s O2 UK. Those expectations have produced some damning evidence of their experiences. In the UK, telcos are among some of the lowest-ranking industries, according to the Institute of Customer Service and its UK Customer Satisfaction Index. In a UKCSI survey published January 2015, more than one in five (22%) customers in the telecoms sector — considerably higher than the all-sector average of 13% — experienced a problem in

Telcos are among some of the lowest-ranking industries, says one survey. Scores for staff competence, ease of doing business, speed of problem resolution and finding information on websites are low 30 Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015

the three months preceding the study. Scores for staff competence, ease of doing business, speed of problem resolution and finding information on websites were low, compared to the all-sector average.

From its 2015 survey of 540 consumers worldwide, Procera Networks found that 60% reported not receiving continuous high-speed coverage and 90% experience video quality problems every day. Yet, 85% said they never, or rarely, call customer service to complain about either issue.

Losing customers Clearly the rules of customer engagement — or in this case, non-engagement — are changing and operators must adapt or risk losing customers to the competition.

The “pure scale of customer interactions” is one of the main challenges facing operators in analysing performance, says Turpin. With hundreds of millions of customer interactions across various channels every week, operators need to understand how their performances have been received.

A range of tools and programmes are necessary to measure customer experience accurately. “The reality is that a one-sized fits all approach simply doesn’t cut it,” he says.

To ensure the highest level of accuracy, the use and design of feedback mechanisms are crucial, according to Michael Crow, director of customer experience solutions at international customer experience consultancy KPMG Nunwood.

In deciding on the appropriate methodology, the first rule is to contact customers in their preferred channel of choice, says Crow. That, he says, will in turn maximise the accuracy of the feedback received.

He says it is fundamental to understand the elements that drive experiences — both emotional and rational — and how internal processes and systems impact customers’ perceptions. “A thorough understanding of the specific experiences from a customer and internal perspective is needed to ensure we measure the right things.”

One such example is the design of feedback tools in which seemingly minor things like the presentation of a survey could affect outcomes. “It is important to know that customers will lose interest in sharing their true perceptions if they have a negative survey experience.

This means we need to make sure the surveys are visually appealing, where possible include entertaining feedback mechanisms and crucially, keep it as short as possible.”

Tailored experience Paul Clarkson, TalkTalk’s account manager of its sales through service unit, agrees that customer experience should be tailored to every individual.

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Customer engagement

One survey says that 85% of people do not complain to customer service, even though 60% reported not receiving continuous high-speed coverage and 90% experience daily video quality problems

“We survey our customers and ask how they would prefer to be contacted — whether it’s call, webchat or email. Based on that, you get your customer demographic. Then you set up your business to match those requirements.”

Since launching its webchat service, Clarkson has seen a drop in voice calls. “That has decreased the cost of handling calls and, more importantly, our customers receiving an increased satisfaction of getting what they want.”

O2’s Turpin said that after receiving feedback from customers stating their preference for digital channels, the operator introduced a self-service application called MyO2. The app, which sees 13 million interactions each month, gives customers access to their bills and other services on their smartphones.

Outlining the operator’s focus areas, he says the first is to “make it as easy as physically possible to get access to the latest products”.

The operator is working on integrating its online and actual shops in an effort to make shopping simpler and easier for its customers. In March 2015 it trialled a click-and-collect service, which enables customers to order a product by phone or online and collect it in a store that same day. Order deadlines have also been extended for next day to 10pm.

Its second focus is on following up after the initial sale. “Once they’ve got the latest technology, we want to help them get the most out of it.” Turpin notes that O2 was the first operator to offer free technology experts through its team of O2 Gurus, available to anyone, regardless of whether they are a customer.

“This is just the start. We believe that for customers to truly feel valued and special, we need to go beyond that. We need our customers to feel rewarded for their loyalty,” he says, pointing to O2 Priority, said to be the UK’s largest digital loyalty programme.

Recognising that it can be a challenge to create a consistent brand experience across all channels, the company brought its sales and service departments into one directorate in 2011 in a bid to deliver better service to customers.

Flexibility and choices In a bid to give its customers more flexibility and choices, the company launched O2 Refresh in 2013,

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what it claims is an industry first: the initiative separates the handset cost from the airtime cost, allowing its customers to change their devices whenever they want without penalty. Turpin says the move has not only saved them money but also given its customers the flexibility they want — automatically reducing their bills once their handset has been paid for.

The initiative also addresses yet another ongoing challenge in the market. “Telecoms is associated with a lack of integrity around encouraging customers to buy more than they need,” notes KPMG Nunwood’s Crow. “Customers don’t trust operators when their bills are high and don’t understand what they have been sold, as the customer is not only exposed to operators through their phone or online network, but also to retailers and equipment manufacturers,” he explains.

O2’s cumulative efforts appear to have paid off — the operator’s customer loyalty was ranked first in the UK market with contract churn rate at 1% in the first quarter of 2015. It has also emerged as number one network for the sixth consecutive year in a study on customer service satisfaction by the country’s regulator Ofcom.

The ultimate challenge in customer experience management, says TalkTalk’s Clarkson, is “considering everything that is going to impact your customer”.

Processes must be “cast iron” to ensure successful customer management. That means considering every eventuality and building a process to respond to that.

“If you can do that successfully and not miss anything, you get a good customer satisfaction model. If not, you end up with gaps in your processes,” he says.

“That’s when complaints and dissatisfaction happens.”

Managing customer relationships across these channels requires absolute clarity of the customer journey and an internal commitment from telco companies to take ownership of customer interaction that are traditionally seen as the responsibility of other organisations, Crow says.

Market benefits At the same time the market benefits from unique opportunities such as the continual and long-term nature of customer relationships. “It presents a very clear opportunity to engender loyalty and advocacy in a way that businesses outside the telecoms sector will find difficult to achieve,” he says.

More crucially, the wave of mergers and acquisitions sweeping across the world should be seen as a huge opportunity for operators to overhaul and strengthen their approaches to customer experience management.

The quad-play offering could emerge a key differentiator in the telecoms customer experience.

“Quad-play could potentially further reduce the risk of churn as a consumer is less likely to want to split an individual service from a combined package, due to the time and effort involved,” he notes.

“To make quad-play attractive, telecoms companies need to harness the potential for using customer data to personalise a very complex offering.”

As the battleground for consumers heats up, the competitive advantage will ultimately go to the operators who successfully manage the customer experience — and deliver on those expectations. Q

Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015 31

CMO round table We asked a number of top CMOs how important customer experience is to them, and how they use CEM. These are their answers

Top CMOs answer questions about customer experience

Mikhail Gerchuk, group chief commercial and strategy officer, VimpelCom

Cynthia Gordon, chief commercial officer, Ooredoo

Rickard Bäcklin, vice president, brand and marketing, TeliaSonera International Carrier

Are you as CMO responsible for the end-to-end customer experience? Are, for example, retail stores and call centres organised under sales or in separate business units. If so, how do you manage it? If not, how do you manage it?

Mikhail Gerchuk, VimpelCom: All sales and distribu-

tion channels as well as customer care are an integral part of the commercial function and I manage it. At the same time we have dedicated customer experience teams both in business units and in the group.

The commercial team drives the decisions on where the network should be improved based on customer analytics and customer feedback.

In terms of sales and call centre, which are also the key touch points, we have different ways of managing it to ensure that we focus on our customers and what is important to them.

Firstly, we monitor and manage key KPIs, such as first call resolution, and Net Promoter Score. To do this we use closed feedback loop systems that automate customer feedback collection, processing and resolution.

Cynthia Gordon, Ooredoo: As chief commercial officer,

I am responsible for end-to-end customer experience.

According to our group guidelines for the customer experience organisation and given our group focus, customer experience, in our operating companies, is not under the CMO or CCO and instead reports directly to CEO or chief strategy officer.

Retail stores and call centres are in separate units, reporting in most of the cases to the CCO or COO — same at the group, both separate units are reporting to the CCO. Rickard Bäcklin, TeliaSonera International Carrier:

Customer experience is an entire company responsibility, involving every employee, whether customer facing or not. The customer experience function is 32 Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015

Mike van den Bergh, chief marketing officer, PCCW Global

Chris Williams, head of global marketing, Amdocs

however organised and driven from brand and marketing, and is thus the responsibility of the CMO. Our approach is simple: listen and take action.

But for actions to lead to a great customer experience every time, they need to be consistent — and this requires structure. We are using the Forrester customer experience maturity disciplines — strategy, customer understanding, design, measurement, governance, and culture — to construct our approach to customer experience.

Because customer experience is a priority at management level, employees have the support they need to build an even more customer focused culture. And so we can track our progress and keep improving, we measure what we do regularly and systematically.

To manage and develop our customer experience work we have put together a customer experience council spanning the main functions in the company.

This also enables us to capture the improvements that otherwise may go undetected within functional units Mike van den Bergh, PCCW Global: At PCCW Global

we are committed to putting the customer first. As the company’s CMO, I am also chairman of our customer service forum which brings together senior representatives from service management, marketing, product, sales and IT to ensure that the customer is always central to our end-to-end processes.

We also use the forum to review and optimise the way in which we deliver and manage our service delivery to our customers. Customer experience is a core attribute of the PCCW Global brand and marketing are heavily involved in driving the continual improvement thereof.

Chris Williams, Amdocs: Amdocs provides customer experience solutions to over 200 communications service providers globally, and we often see the CMO as the orchestrator of the end-to-end customer journey.

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CMO round table This does not mean that the CMO needs to own all of the company resources that touch the customer. Sometimes the CMO owns a bulk of the customer-facing resources, including the web portal and the stores. In other cases, the CMO is the person on point to make sure that the overall customer experience is differentiated and better than that of the competitors.

Overall, we view the CMO as the voice of the customer inside the organisation and the guardian of the brand, and believe that marketing has to own and drive customer experience.

What is the main value of CEM to you as a CMO? For example, is it for customer retention, to boost revenue per user, to avoid bad publicity, better visibility of customers’ needs and so on?

Gerchuk: We see value in all, but from the analytics

we see that the biggest impact is on customer retention. Ultimately, good customer experience generates extra revenue and extra margin due to the fact that loyal customers spend more, stay longer, do not create extra serving costs and recommend our brands to their friends.

Gordon: CEM is about creating differentiation for us in the market, with objectives of generating less churn and additional revenues, especially focusing on data experience. Differentiating through customer experience is one of the main pillars of the group strategy.

Each and every initiative we are implementing to improve our customer experience has a direct financial positive effect. Overall customer experience success is measured through improvement of the customer lifetime equity.

Our efforts are reflected in over 25% improvement of NPS in the last two years, and in a 25% decrease in churn rate.

Bäcklin: It’s where it all starts; by understanding what makes a great customer experience, we can direct all our efforts connecting to the total customer journey — from needs awareness and through the complete buying and use journey — towards supporting that experience.

For us customer experience is a key differentiator, to be perceived as both the company and people best to do business with.

And as we’re purely B2B, it’s all about relationships, and acknowledging that our customers buy from who they like best. Excellent customer experience also drives loyalty, and motivates customers to recommend us to others.

Williams: Customer experience is now the only true

source of long-term sustainable competitive advantage for a service provider. So, depending on the market context and the organisation’s objectives, customer experience management can be tuned up towards churn reduction or revenue growth, or say cost reduction by incentivising customers to interact through unassisted channels.

By implication, big data analytics is an intrinsic part of any successful customer experience effort. It’s important today to take a multidimensional approach to customer experience, and not restrict it to any single domain.

With over-the-top players perceived as setting the benchmark for customer experience, the service provider CMO should also seek to deploy new digital or OTT-like models, showcasing innovation.

How many customer-facing operations — internal or outsourced — do you bring together with your CEM systems (for example, retail outlets, customer care agents, your web portal, and so on)?

Gerchuk: We try to cover most of the touch points via which customers interact with us, the largest being network, pricing and billing, followed by retail and service and call centres.

Also we see increased interaction of our customers via digital channels. In some of our operations it is not big, but growing rapidly; therefore we focusing on digital channels as well.

The next step for us is to focus not only on each touch point but to follow customer interaction with us via many different channels. We understand good experience in one touch point and bad experience in another equals to bad experience.

Gordon: In all 10 operations across our footprint in the Middle East, north Africa and south-east Asia, we have CEM systems in places in sales and call centres, both internal operations — on-premise call centres and direct/franchise shops — and outsourced operations — outsourced call centre operations and dealers/distribution.

Bäcklin: A couple of years ago we decided to throw out our legacy systems and go for one master-data system implemented in Salesforce. At the core of this system is the customer, and we’re continuously connecting the dots to reach a truly customer centric IT support system. This includes customer care, our web, a customer service portal and of course our people in the field.

Van den Bergh: Our CEM systems bring together and

Van den Bergh: The telecoms market is becoming

more complex and increasingly competitive. Many of our customers are also suppliers, competitors and channel partners to PCCW Global, and so building and maintaining strong relationships with all of these role players has never been more critical for building successful and sustainable business.

Customer loyalty is the key driver for us all, but in order to build loyalty it is vital that we understand our customers’ needs and preferences as viewed from all customer touch points.

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report information from all customer touch points including network quality, product performance, ordering and service configuration, billing and customer service management.

As the network and many communication services become virtualised, customers are increasingly demanding a self-service model to augment their existing face-to-face relationships. We continually enhance and expand our online service portal capabilities to meet the changing needs of our customers — and try to always stay ahead of their expectations.

Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015 33

CMO round table Williams: From our vantage point of working with the

leading service providers worldwide, it is clear that the most successful players are those who have managed to join the dots between as many operational systems as possible.

Only in this way can you arrive at a 360-degree view of each customer: a buyer at an important small or medium business customer is also a consumer customer, and service providers need to cut across internal silos to deliver a truly personalised experience to that person, seamlessly.

Apart from the customer profile systems, another important source of information is the network and the specific customer experience across the network.

How importantly is CEM regarded among your company’s board and how do they reflect that importance — in terms of budget, management attention and so on?

Gerchuk: Our customer’s sentiment (NPS) is monitored very closely by the board and executive team.

We also have Net Promoter and churn as a key personal KPIs for all leadership team in our management performance system.

We report monthly to shareholders on our key customer experience projects. In some of our operating companies the customer experience committee led by CEO meets on weekly basis.

Gordon: Customer experience is as pillar of our group strategy and it is reflected also in the group and all operating corporate scorecards through NPS. In terms of budget, the budget allocated for customer experience is for measurement and monitoring platforms as well as benchmarking and surveys. Each and every customer experience improvement project has a positive financial effect and business case.

Management attention is reflected in our regular customer experience sessions with top management teams.

Bäcklin: We believe in inspecting what you expect, and have therefore introduced our Net Promoter Score as a common KPI for all employees.

Customer experience also occupies one of three main focus areas in our top level strategy, and is therefore on the daily agenda of our management team.

When comes to resources and initiatives, we just have one question to answer: Is it good for the customer?

Van den Bergh: Providing an exceptional level of

service to our customers is at the core of our company’s values and central to our brand. It permeates throughout the organisation and is reflected in our products, processes, systems and the way that staff are measured, motivated and trained to provide proactive quality service.

We constantly measure our performance through regular customer service reviews, service benchmarking and customer surveys and invest heavily in systems and services to support the changing communication and information needs of our customers.

Williams: Our perspective is that customer experi-

ence has to be at the top of the board’s priorities 34 Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015

– you only need to read half-a-dozen annual reports from the leading players in our industry to see that this is in fact the case. It may be defined in a variety of ways but the ultimate value proposition rests on CEM. The good news for the CMO is that the importance of CEM reinforces their position at the top table.

Which parts of the company — such as IT — do you work with to ensure you have high-quality CEM? Gerchuk: We strongly believe that each function has a role to play, sometimes indirectly, in providing superior customer experience. Our goal is to create a culture where each individual understands that.

However, the biggest part is played by commercial and IT functions.

For our customer experience programme in the VimpelCom group we use Net Promoter System as a toolkit. One of the important elements of NPS is robust IT infrastructure that allows us to link customer perception with technical KPIs of our product. So we work very closely with our technology and IT colleagues.

Gordon: All parts of the organisation are responsible directly or indirectly for CE. This is key to ensure high quality CE. Technology, sales, customer service, marketing — product/value proposition — as well as finance — billing/payment — and communication are all responsible for CE. And we are measuring their direct effect on CE every day.

Bäcklin: It’s very important for us to make sure every unit is on-board with our customer experience work.

Therefore we have a customer experience council to analyse customer experience data — such as NPS results — so customer pain points can be quickly identified and prioritised and to pinpoint organisational gaps based on customer feedback.

The customer experience council also captures ongoing customer focused initiatives to spread to the rest of the organisation.

We also have a close cooperation with IT to ensure that the customer view is central when designing support systems for our customer relations.

Van den Bergh: The marketing team work across all functions to ensure that customer needs and preferences are central to all of our activities. This includes very strong interfaces with product development, sales, pre-sales, IT and service management.

We have a key role to play in specifying requirements and designing the user experience/user interface aspects of customer-facing IT systems.

Williams: It is easy to forget the back-office teams in

the customer experience debate. According to independent research we recently commissioned, a significant majority of consumers globally say that network issues are the primary driver of their experience.

The CMO is well positioned to hold the ring and mobilise all the necessary functional experts to deliver for the customer. Q

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gtb

GLOBAL TELECOMS BUSINESS

50 CMOs TO WATCH 2015

Who are the 50 chief marketing officers in the telecoms industry to watch?

We on Global Telecoms Business are looking for the 50 CMOs to watch in the telecoms industry worldwide.

We’ll be publishing our list of the 50 — from operators and vendors — in November-December, online and in the printed magazine.

Many people in the telecoms industry are telling us that CMOs have an increasing influence on operators’ strategy, on the services they offer consumer and enterprise customers and on their long term development policy.

That’s why we are asking for your suggestions now of the most important CMOs in fixed or mobile operators around the world — in vendors too.

Deadline for nominations: Wednesday 30 September 2015 Publication: November-December 2015 issue How to nominate: Send an email saying who you are putting forward, with a few sentences about why they are a CMO to watch, with their contact details so that we can follow up with them — and perhaps do an interview if they are selected as one of the 50.

Send the email to the editor, Alan Burkitt-Gray, at aburkitt@euromoneyplc.com Please start the email subject line with ‘CMO to watch’ and the person’s name

CFOs to watch In the January-February 2016 issue we will also be publishing the latest list of chief financial officers to watch.

We’ll be asking for nominations in the next issue — or keep an eye on the website, www.globaltelecomsbusiness.com

gtb

GLOBAL TELECOMS BUSINESS

50 CFOs TO WATCH 2016

Co-sponsored feature: Amdocs The onus is on service providers to adopt a multidimensional approach to customer experience, writes Uri Gurevitz. They should be inspiring subscribers with exciting, innovative services that are delivered intelligently

In the multiple dimensions of customer experience, service providers still have the edge over OTT players Q First, consumers feared that their privacy might be

Uri Gurevitz: Today’s new world of customer experience takes on multiple dimensions, including brand, offering portfolio, network and the IT systems that make it all come together

Should service providers be worried that their customers are going to abandon them and flock to new connectivity services offered by over-the-top players, such as the new Google Fi mobile virtual network operator service recently launched in the US? Well, not according to consumer feedback contained in Amdocs’ Customer Experience Spotlight 2015, a large-scale, global consumer survey, conducted earlier this year.

The good news for service providers from this survey is that the vast majority of consumers — 80% — prefer doing business with a traditional service provider, and are not tempted to switch their connectivity service from their current operator to an over-the-top disruptor such as Google, Amazon or Facebook.

True, there were some marked variations geographically, with 69% of Indian respondents saying they would stay with their operator but, at the other end of the scale, 97% of Singaporeans were keen to stay put, with some even going as far as to say that they hoped their government would not allow OTT players to branch out into connectivity. And in the UK, 68% of consumers said they would not consider switching over to a Google-like connectivity service.

When consumers were asked to explain the reasons why they didn’t want to leave their service provider, three factors shot to the top:

36 Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015

compromised by the internet companies wanting to use their data.

Q Second, they expressed doubt about the quality of the service they would receive — citing a combination of slow speed, low voice quality, and poor coverage outside of cities.

Q Finally, a sense of distrust was mentioned: a global internet brand, driven purely by a commercial logic, does not have the level of customer intimacy enjoyed by many operators.

Given this, and the mixed reception Google Fi received in industry press concerning the actual value to the consumer of its pricing model, we can be confident that the Google Fi offering isn’t going to change this consumer mindset.

Further good news, related to the propensity to recommend, also came out of the survey, with 63% of our 2015 Customer Experience Spotlight sample confirming they would recommend their service provider to family and friends. Here again, we found clear variations by country. Only 58% of Filipino and Thai consumers were positive about recommending, while 72% of North Americans were.

As we dug down to the causes of that enthusiasm, 89% said that customer support was a key factor, network quality ranked second at 59%, with pricing coming third, at 58%. These results hint at the need for operators to take a holistic view of customer experience, ensuring consistency across all channels.

Indeed, while 20 years ago customer experience was just thought of as concerning the complaints process, today’s new world of customer experience takes on multiple dimensions, including brand, offering portfolio, network and the IT systems that make it all come together.

The OTT-pay TV challenge Globally, pay TV service providers continue to surpass OTT providers in the crucial areas of content, video quality and customer service, according to our consumer survey. For two consecutive years, the results demonstrate that the vast majority of consumers say that pay TV service providers offer better services in these three areas, with 81-86% of our global survey respondents favouring pay TV service providers.

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Co-sponsored feature: Amdocs Recent services offered by pay TV operators strive to cement this preference for content, video quality and customer service. For instance, Comcast has introduced a series of new functionalities for improved customer experience, including the ability to allow consumers to track their service technician in real time with Comcast Tech Tracker, improved customer service by allowing customers to schedule callbacks in 15-minute intervals at the their discretion, and child-safe content tailored for younger viewers.

Similarly, Time Warner Cable’s digital TV service allows consumers access to a wide variety of HD content, and enables them to record and capture HD broadcasts through their DVRs, with the ability to set and control DVR preferences remotely through mobile applications.

In terms of content, Verizon is going the route of flexible bundling of content: it lets its FiOS TV customers buy a so-called “skinny bundle” of TV channels, and then augment it with a variety of channel packs, which are groups of networks with similar themes, such as a sports pack including ESPN and Fox, that can be changed monthly.

an effort to improve their UIs and offer a better customer experience.

Time Warner Cable, Orange, Cablevision, Cox, Dish, DirecTV and Verizon all offer apps for mobile internet devices to allow subscribers to watch TV anywhere with a mobile internet or wifi connection, fuelling customer demand for TV everywhere.

Pricing is definitely a challenge for Pay TV providers. Our Global Pay TV Survey 2015 showed that 68.1% of consumers surveyed prefer OTT services when it comes to pricing.

Operators have begun to counter this with aggressive pricing, personalised bundling and, in some instances, embracing OTT business models. Dish TV’s strategy for acquiring new customers includes Sling TV, an OTT cloud TV service, starting at $20, specifically targeted towards millennials who prefer OTT subscriptions over pay TV. Telus, the Canadian service provider, offers its Optik TV customers access to Netflix directly from their Optik TV set-top box, removing the inconvenience of having to switch hardware and source inputs or fumble with additional remotes.

“By inspiring subscribers with exciting, innovative services, delivered intelligently through personalisation and contextualisation and shaped by a dynamic quality of experience, service providers can bring value to their customers and themselves.”

These types of skinny bundles appeal to customers who might want to watch football in the autumn and then swap out of a sports package for something else in the spring.

But in our separate Global Pay TV Survey 2015, we found that OTT providers do have an edge over pay TV operators in four important areas: their user interface, availability of content on multiple devices, price and recommendations.

Stemming the cord-cutting trend

Uri Gurevitz is the director of market insight and strategy at Amdocs www.amdocs.com

In order to close this gap, pay TV providers have begun to introduce innovative new services and hardware. Operators such as Comcast, Time Warner Cable and Dish have launched new functionalities to improve their current UIs. Comcast, for example, has introduced voice-enabled remotes that allow users to search for content by voice commands and key phrases. Time Warner Cable customers can use new hardware devices that include wifi, phone and IP video all in one. Dish has recently offered a remote with touchpad and voice control, a 4K Ultra HD set-top box, streaming apps such as Vevo and a whole home-music solution, in

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In Spain, Telefónica has used various OTT methods both to broaden its reach and boost the user experience of its Movistar IPTV service. In the middle of 2013 it launched Movistar TV Go, its TV everywhere offering, primarily aimed at out-of-home and mobile viewing. At the end of 2014 it added Movistar Series, a Netflix-style service focused around TV series, which it again offers to existing Movistar customers. And in early 2015 it launched a full version of its Movistar IPTV service through Samsung smart televisions.

With such integrated and expanded value propositions, pay TV providers are diversifying their service portfolio in order to match and eventually gain on their OTT competitors, stemming the trends of cord-cutting, cord-shaving and cord-never.

In today’s world of rising customer expectations, rapid technology advancements and intensified competition, the onus is on service providers to adopt a multidimensional approach to customer experience.

By inspiring subscribers with exciting, innovative services, delivered intelligently through personalisation and contextualisation and shaped by a dynamic quality of experience, service providers can bring value to their customers and themselves. Q

Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015 37

Experiences Ask for comments and anecdotes about telecoms operators’ service quality, and you’ll be inundated. And most of them make uncomfortable reading for the industry

Faults, missed deadlines and unhelpful call centres: listen to what the customers say It’s not hard to get poor experiences of the telecoms industry — and sadly few good ones — from friends, family and colleagues. One Facebook posting, another on a web forum, and the reports came in within hours.

“After a storm, my line went dead then was attached to someone else’s phone number for incoming calls,” said one, an executive with a telecoms organisation.

“Engineers from the infrastructure company called me three times, thinking they were talking to the owner of that number, and followed up with an automated call to say my line had been fixed. It wasn’t.

“In the meantime I had to explain this to the company from which I rent the line, resulting in an engineer being dispatched when I asked them not to — and they had agreed not to request a visit. The fault was fixed at the exchange in my absence after two and a half weeks.”

Another correspondent, who runs his own small business, said: “I record my calls to the company because their customer service is so bad, then I upload them to the internet and ask the CEO to have a listen.

“My favourite was the chap saying they could not take complaints by phone as they’d received too many, then giving me the email address as ‘complaints — that’s complaints plural, obviously’.”

Some people say their broadband was installed fast and on time. Many, though, complain of unexplained delays or rescheduled visits

38 Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015

A third added: “When I moved into a new apartment it took the operator about a month to connect me, despite repeated increasingly frantic calls from me.

“I had an urgent work deadline and having no internet or telephone service created a lot of problems and much tearing of hair from my client. I know there are internet cafés but in my home town it is almost impossible to work in them as they are full of people screaming and shouting for no apparent reason.”

Another had a better experience with the same company — we won’t name any of them here, as the challenges seem to be universal. “I use that company at home, always have, and find them excellent. Not the cheapest but as I must rely on a good internet line always working they are the best. The rare outages have been dealt with swiftly and the care team on Twitter is also very quick to respond.”

Difficult issues A retired executive, who used to work for one of the biggest telecoms companies in the world, but not in that operator’s home market, wrote: “I had an issue with our IPTV service and was not getting very far, and they said that they would put me through to a special department set up to assist with difficult issues. They put me through and they were brilliant! The guy there was helpful, knowledgeable and empowered — and fixed the problem.

“At the end of the call I asked the guy who or what they were — but he would not go into detail. I also asked how I could get hold of them in the future. He said that they cannot be accessed directly, but had to be put through via the main service number.”

But a business user, frustrated at the lack of a fixed broadband internet service, bought a data-only SIM for her router — as she had already hit a 15 gigabytes limit for her smartphone.

“No idea how I did that,” she told us. “But I can’t just top up online with this other company because they send me an authentication code by text, although my data-only SIM is for use in a dongle or router, and phoning the call centre is much more painful than going to the dentist. Why text a router?”

But she was impressed by original company’s 3G coverage in the rural area she lives. “So I thought the experience couldn’t be any worse and maybe I’d switch my router to them. It took a while to get through to someone who could explain my options.

The website was as clear as a foggy morning — with no 3G options, all 4G. But finally, I was online.”

However, this provider cut her router off a few days late. “Having rebooted the router twice, I tried to top up online, but it wouldn’t let me register as it kept

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Experiences

One MVNO changed the network provider it used, and sent out new SIM cards during the holiday season when many bill-payers would be away

telling me that email address was already in use and sent an authentication code by text.

“I called. First time, I got cut off mid call. Second time having repeated all the information, it turned out that I hadn’t reached my limit at all and that, when the account was set up, the email wasn’t attached to my SIM number as it should have been.

“That would be fixed, but would take 24 hours. In the meantime, by rebooting the router at intervals, I finally got back online — so it looks like the problem was with the network.”

you 200 minutes to numbers including these for a small monthly fee. How about that? This has cut my bills hugely and I’m so, so impressed that they wanted to help me pay them less money.”

One customer reported going online to order fixed broadband for his home. “The email said it would be delivered at 9.00am the following Thursday. At 8.50 a courier arrived with the kit in a box, which I unpacked. I got a text a few minutes later saying the service was in operation and I should plug everything in. I did and it worked.

“A couple of years later I upgraded to a faster service, with fibre to the cabinet. This time a technician arrived a few days later, installed the kit, and again it worked perfectly.”

That’s how it should be. But others told of less happy experiences. There was the MVNO that changed the infrastructure provider it used, and sent out new SIM cards during the summer holiday season when many bill-payers would be away — and then cancelled the old SIMs after a few days, leaving at least one teenage girl without a phone service on a Saturday evening.

A self-employed consultant recalled: “I had my operator booked in to install my new line and so on when I moved house. On the day they were due to show, there was nothing. It turned out they’d rescheduled from July to November. I cried.”

New modems

Compensation for distress

Another business user wrote: “I renewed my contracts.

The letter sent out in reply was incomplete. I had to phone three times to get someone who could answer.

“They told me that the salesman had not put on the order that I was to receive new modems so the salesman had to be given a week to respond. “A week later, nothing. Two more calls and I am told this was drivel. It has to be after-sales who fix it. Another call and routers arrived.

“Today — just now — I received an email telling me my prices are all going up. It had a different number to ring. I called: eight minutes on hold and just seven minutes speaking to someone, and my line rentals have all just been reduced further.”

At the end of that elaborate process, that customer was happy with the reduced price.

Another happy customer told us: “I have been really impressed with my cable company’s willingness to save me money. They actually told me to ring every six months or so to ask if I’m getting the best deal I could get.”

She added: “Recently I called to say our package was too expensive and they worked out a new one that I’m much happier with. I said I was pleased they were willing to do deals for existing customers — there are various loyalty discounts active on the account — and the advisor said something like: ‘Well, we value and appreciate our customers. You are what makes our business.’ Which is an attitude all businesses should have — but many don’t.”

Another, in a similar position, told us: “I could write an entire book on how the operator messed up connecting me when I moved into my new apartment four years ago. They ended up refunding all the connection costs and compensating me for the distress they caused.”

Someone else told us: “An engineer drilled through the windowsill in our rented apartment. We complained because we had not given permission to do this. It was very strange because he was installing a cable and he ran it through the window, so that the window had to close onto it, and then through a hole in the wooden windowsill.”

When she complained, the company’s legal department “contacted us and arranged to pay for the damage to be fixed. I wouldn’t have believed it if I hadn’t seen it with my own eyes.”

And, finally, another frustrated customer told us: “I had what I thought was a relatively simple request. I’d come to the end of my two-year contract and wanted to switch from a contract to pay-as-you-go. I’ve done this before with no problem.

“I was assured my new SIM would be sent out. A few days later a tablet arrived. But no new SIM. “I called up and after many hours and multiple calls to different departments on different days the operator finally worked out what had happened. Somehow, switching from contract to pay-as-you-go had been confused with ‘ordering an expensive additional 4G tablet account’. I had to return the tablet at my own expense.”

And, said this angry customer, once trips to the post office and the hours spent on the phone trying to resolve it were taken into account “it probably took at least one working day to sort out”.

Such sagas appear universal, drive customers crazy and break the first rule of business — be easy to do business with. Q

Pay less money That cable operator even phoned on a different occasion to say they had noticed a lot of calls to a high-rate number, which she needed to use for work.

“They said OK, there’s an add-on option that gives

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Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015 39

View from the Top: Vincent Rousselet of Amdocs Customer experience can undeniably be a true source of sustainable competitive advantage, writes Vincent Rousselet, but only if it is exciting, intelligent and dynamic

Millennials need a personalised experience. So do the rest of us

Vincent Rousselet: We know that, as an industry, we have to look beyond ourselves, to other industries, to find excellence

Vincent Rousselet is vice president market insight and strategy at Amdocs

In a recent pan-European survey of operators, 88% of respondents said it was important to offer millennials a more advanced customer experience than that available to other groups. As my nephew Théo is turning 18 this month, I thought I’d check this with him. I asked Théo what he, as a millennial, regarded as important in terms of his customer experience.

You won’t be surprised to hear that technology, and mobile in particular, plays a central role in Théo’s life. In fact, it has become so embedded — in his smartphone, his laptop, his PlayStation — that he is barely conscious he’s using technology at all.

In his words, “wherever I am, I expect stuff to work — it is as important to my baccalauréat [schoolleaving examination] revisions as to keeping in touch with my friends.”

So does it make sense to offer Théo and his friends a more advanced experience than the rest of us? I see three issues with this.

First, why should the younger customer segments receive a more advanced experience? If millennials are comfortable with technology, shouldn’t their experience be less, rather than more, advanced?

After all, these younger customers can perhaps sort themselves out on their own, using their own digital native skills.

Secondly, who is to determine what an advanced experience is? Is it online and self-service only? But what if connectivity goes down? A 7 May 2015 article in the Economist highlights the danger of heaping work on the customer. Isn’t the panacea an omnichannel set-up, where appropriate means of interaction are offered to all customers, giving them the freedom to choose what suits?

Finally, preferences and usage patterns vary from person to person. Théo’s sister, Cassandre, who has just turned 15, earned her place in family folklore with a record of 12,000 texts a month — that’s a text every 3.6 minutes, not allowing for sleep. My 16-year old daughter never exceeds one gigabyte of data a month. On the other hand, her younger sister, aged 14, consumed 22 gigabytes of data on her iPhone in January this year — thank God for the free data trial is all I can say!

Hoping Théo could help some more, I then asked him which organisation provides, in his view, the best service and experience. Given he lives less than three kilometres from Disneyland Paris and holds an annual pass there, no bonus points for guessing that he immediately mentioned the Magic Kingdom.

40 Global Telecoms Business CEO and CFO Guide to CEM: May/June 2015

“You go to Disney to have a good time,” he says. “I turn up, I get recognised, you know what to expect and, on top of that, there is always some sort of surprise, like a new ride — so people are happy.”

Like Théo, most consumers do not compare their communications service provider with another one.

The customer experience benchmarks they cite, unprompted, are typically from other industries — for some, it’s retail, for others it’s financial services, for Théo, it’s Disneyland.

Combined with the traditional rankings from bodies such as the ACSI and the Institute of Customer Service, we know that, as an industry, we have to look beyond ourselves to find excellence.

The second lesson from Théo’s answer is that customer experience in the communications industry can undeniably be a true source of sustainable competitive advantage. But only if it has three characteristics: Q It must be exciting: innovative digital lifestyle services — the equivalent of a new ride in Disneyland or the MagicBand bracelet that serves as e-wallet, hotel key and location device — will inspire customers and can re-ignite their relationship with the service provider; Q In addition, the experience must be intelligent, that is to say personalized and contextualised. For Disney, it is recognising Théo, and that early June is his birthday. Basic CRM in action. For service providers, it’s the blending of BSS and network data; Q It has to be dynamic too: providing real-time offers based on previous visits and purchase history underpins better acquisition, retention and cross-selling.

For many service providers, fusing these multiple dimensions of customer experience can be challenging. It requires simplifying operating environments and optimising business processes. Hampered with legacy systems which delay time to market, cost will be a likely obstacle.

Yet delivering an experience that is designed around each customer, and not just millennials, brings significant benefits. Even better, the experience should be branded distinctively to communicate the values of the organisation.

In a hyper-connected world and a hyper-competitive communications marketplace, not making this journey towards a personal and dynamic customer experience is certain to erode the organisation’s performance. Q

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global telecoms www.globaltelecomsbusiness.com

BUSINESS

Picture: Deutsche Telekom

CEO and CFO Guide to Software-Defined Networks

Virtualisation is going to be one of the biggest transformations in the telecoms industry since the old analogue networks went digital a quarter of a century ago.

Burroughs, Sperry Univac, NCR and Honeywell. With a few local rivals in different parts of the world: Bull in France, Fujitsu in Japan and ICL in the UK.

And there is a sense that it is being driven by a new generation of technologists within telecoms operators, people who are wondering why the industry does what it does in the way that it does it.

To a large extent, all of them had their customers — giant enterprises, most of them — in their grip. If an insurance company used Honeywell mainframes in its IT department, it was stuck with Honeywell. A power company that used ICL machines to send out its bills needed ICL.

In the analogue era there was a good reason for the telecoms industry doing things its own way: there was no equivalent. In the digital era, for the first couple of decades, this approach was still understandable — because, said the vendors and the operators — telecoms was not like other businesses. In particular, it was not like IT. But look at the transformation of the IT industry over the past 20 years. Remember when the industry was run by a small number of giant mainframe makers? There was IBM, which dominated: Big Blue. At least it is still around, but there were some almost forgotten competitors, companies such as

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And the industry rebelled. Now, they use off-the-shelf machines built to a limited number of industry-accepted standards and what makes the difference is what software they use: Oracle, SAP and so on.

Big business has been running software-designed systems for years. And they work. Now, with that example, the telecoms industry is planning its move to software-designed networks.

But which suppliers will be the Burroughs, Sperry Univac or Honeywell of the telecoms industry?

Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015 41

Open Networking Foundation Standard hardware with open-source software developed by a community and shared online.

That’s the vision that Dan Pitt believes will transform the telecoms networking industry

ONF moves to next stage in the mission to switch the telecoms industry to open-source software Dan Pitt: The Open Networking Foundation’s mission is not to form standards but to help make SDN available to operators. The community builds the software and shares it. Then they can customise it for their own customers

“You can use a white box, off the shelf.

The need for expensive hardware is dissipated.”

Is there a de facto standardisation? The SDN community is favouring the use of open-source software, says Pitt. “It’s better the community builds the software and shares it. Then they can customise it for their own customers.”

Atrium project

There are two themes for software defined networks and the Open Networking Foundation this year, says Dan Pitt: Open Source and the OpenFlow protocol.

And the ONF’s announcement of Atrium combines them both.

The ONF’s role since it was launched in 2011 has been to champion open software-defined networking, says Pitt.

The ONF was founded by six companies, all operators, telecoms service providers or over-the-top companies — Deutsche Telekom, Facebook, Google, Microsoft, Verizon and Yahoo! — but now it counts vendors, as well as many other operators, among its members, including Alcatel-Lucent, Ciena, Cisco, Ericsson, Huawei, NEC, Nokia and ZTE. “We’re a tiny organisation, with just four full-time employees. We depend on a community of people,” says Pitt. “Our mission is not to form standards but to help make SDN available to operators.”

The organisation does create some standards — “as few as necessary”, says Pitt — and also creates guidelines, creates marketing messages, provides tutorials, and organises plugfests — gatherings of product and application developers — where they can test interoperability.

The idea behind ONF and the SDN community is that open-source software will be a vehicle for a dramatic — and rapid — transformation of the way the telecommunications industry builds networks.

42 Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015

The Atrium project — see separate feature — brings together a number of other organisations in the SDN project, including ONOS, the Open Network Operating System, backed by operators including AT&T, China Unicom, NTT and SK Telecom, as well as a number of vendors.

At the moment, says Pitt, experts around the world are still exploring what open-source software can do.

“The idea is to let people dabble,” he says. Then the software developed “will be put in our repository” so that other members of the community can use it. “Let people play,” he says.

Is this a reliable way to develop software that will drive the world’s telecoms networks? It’s an efficient way to do it, he says, and the ONF can created a Software Leadership Council to oversee the project.

“There have been a million open-source software projects, but most have been failures because they don’t build a community,” he says. “We have recruited some great ONF members on to our council.”

The Software Leadership Council is charged with managing ONF’s open-source software projects and its online community development. The SLC recommends ONF’s software strategy to the board and works to develop new projects, events, and activities that emphasise the software part of SDN as a vehicle to put SDN directly in the hands of network operators and their suppliers.

Open-source community It is chaired by Stuart Bailey, founder and chief scientist of Infoblox, and members include Jono Bacon, who wrote the best-selling book on open-source, The Art of Community. He is the founder of the Community Leadership Summit, the primary annual conference for open-source community managers and leaders.

“This year we launched OpenSourceSDN.org, which is a portal where people can put projects. It’s

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Open Networking Foundation the code repository,” says Pitt. “It’s available to anyone. We’re hoping it will attract interested parties, including for smaller open-source projects.”

Now there’s an opportunity for a “two guys and a dog” company “to address the long tail of opportunities” in SDN, he says, in areas such as tools, applications, security and orchestration. “They can build a diverse ecosystem of SDN software.”

There are other projects that people are working on, some of which have been turned into official subprojects for Open Daylight, “and loaded on to our repository”, says Pitt.

But how does ONF tell if the work is successful?

From the number of network operators that are taking part, “and how much code is being contributed”, he says.

OpenFlow — the protocol that is incorporated into Atrium — began at Stanford University in California as a project to open previously closed networking technology, so that it can be built out of COTS — common off-the-shelf technology — and make networks programmable. ONF developed OpenFlow into an industrial-strength protocol that can be used for full-scale telecoms networks.

“It is a means to an end — which means a workable SDN,” says Pitt. “It’s not a be all and end all.” It’s a vital part of the project, that he compares to a drive shaft on a car. It’s essential, but not the reason to buy a car in the first place.

OpenFlow is flexible enough to look at the applications that are being delivered, and adjust the flow as necessary — and, indeed, according to other factors such as the time of day and business priorities. “It can look at multiple factors, including different headers.”

Commodity servers Conventional systems “are very rigid”, he adds.

“OpenFlow is completely different from the way networking works today.” The functions are moved to commodity servers, very like those in a traditional office network. “You can use a white box, off the shelf. The need for expensive hardware is dissipated.”

OpenFlow is strictly vendor-neutral. “A number of organisations don’t like that,” says Pitt. “Some of them aren’t cooperating all that well. There is some reluctance on their part to go with good native OpenFlow.”

But if some vendors are digging their feet into the sand, “operators don’t want to perpetuate this”, and are generally supportive of the move to SDN with OpenFlow in hardware and open-source software.

“Operators say that OpenFlow is the key, and they are finally getting the hardware support for OpenFlow,” he adds.

“This is going to be a really important year for OpenFlow.” The mood is, he says, “let’s get on with it”.

So Atrium is the next big step in bringing together open-source and OpenFlow. “There are four main pieces to this: the application, the controller, the OpenFlow southbound interface, and the switch.”

The application “is a pretty simple border gateway protocol”, he says. “We want this enabled on the Quagga open-source routing stack. The controller will use the Open Network Operating System — ONOS. The southbound interface is native OpenFlow. “For the switch, we are supporting a white box,

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“Companies are going to change, because the margins and the business models are different. And companies will build up customised solutions…

Some people still don’t want to change.

But competition will drive change.” built with the Open Compute Project, while enabling vendor switches to plug in, too.”

The idea is that “you can take a bare metal server, put some network interface cards in it, and you’ve got a switch”. And then ONF is asking other potential collaborators to plug into this.

The system is totally open — to the extent that “you can go to the website and download the software”, and you have a switch (and controller and application).

Systems integration In the networking world, “if you want to build an SDN you can get the components and assemble them yourself, but people don’t want to do their own systems integration.” The ONF “is essentially doing the integration for them”.

Atrium is a big step for the open-source SDN movement. “A number of software vendors have contributed to Atrium,” he says, and there have already been a number of demonstrations of the software around the world, particularly in the US and Australia, where the government’s science funding organisation, the Commonwealth Scientific and Industrial Research Organisation, has been active.

“We are compiling a list of companies that are committed to future releases of Atrium,” says Pitt.

“They want to add to the framework — and it’s quite an impressive list of organisations. We’re cooperating with a number of projects, trying to move the whole industry’s ecosystem forward.”

The vendors that are backing Atrium are mainly “the smaller ones so far”, says Pitt. “Not yet the big guys. But we expect to get later cooperation from them. And if it is useful to customers, the vendors will get on board.”

Some vendors are claiming to be open, but aren’t really, he hints. “Some of them are using open-source software as an efficient code development module, and then building proprietary products.”

But companies will change, he says. “Juniper is saying that it can run others’ software on commercial hardware. Companies are going to change, because the margins and the business models are different.

And companies will build up customised solutions.”

The pressure is coming from the operators, companies such as AT&T, Deutsche Telekom, NTT, and Telefónica. “Verizon is an OpenFlow advocate,” says Pitt. And Colt and its Japanese subsidiary KVH “are very aware” of the importance of these developments, he adds.

“Some people still don’t want to change. But competition will drive change.” Atrium will help push SDN into the industry’s hands. Q

Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015 43

Co-sponsored feature: Ericsson As the first SDN services are going into commercial operation, operators will be able to use networks more efficiently and invest savings in better infrastructure, says Ericsson’s Jan Häglund

Operators will be faster and more agile as SDN promises to transform the industry This work caught the interest of service providers.

The first applications of SDNs were primarily in data centres. “But this developed from more of a technology push to an operator and customer pull,” he says.

Operators were looking beyond transport and wondering “how you can get service in a more dynamic way”, he says.

They will be centralising control software, so they will be able to implement “any change”. Häglund points to home gateways, the devices that sit in people’s homes and provide broadband-based services from basic internet access to a full menu of IPTV services.

New services in software

Jan Häglund: Ericsson is supporting the use of open-source software for SDNs. Ericsson has always thought that creating openness is the way to build a successful industry

The industry is at the tipping point between the proof of concept of software-defined networks and putting SDNs into operation.

But, says Ericsson’s Jan Häglund, now the industry needs to ask: “What kind of technology will SDN be, and what impact will it make?”

Ericsson is working with a number of leading service providers “about how to put SDNs into action”, says Häglund, who is a vice president at the company and head of its network analytics and control product area.

“What problems can SDNs solve?” asks Häglund.

“There is an urgency, because our industry is not addressing the needs of our customers. We’re too slow.”

Worse, he adds: the telecoms industry is not matching the speed and agility of over-the-top service providers “and what they are able to do”.

But change is coming, with network functions virtualisation and SDN, he says. “This means that a major transformation is about to happen in the way you operate networks and the way you troubleshoot networks.”

It will be a complete transformation, “and it will reach all the way to the marketing of services, because if you are more agile you can offer new services — though you have to decide how you will tell your customers.”

All in all, “service providers will need to be faster and more efficient”, says Häglund. “We are seeing that it is starting to happen.”

The idea of software-defined networks originally emerged from Stanford University in California “to solve the complexity of transport networks — to make them easier to manage and upgrade”, says Häglund.

44 Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015

“At the moment the services are defined by what’s in the box,” he says. “And the box is pretty complex and costly.” Every time an operator wants to introduce a new service it has to distribute a new generation of home gateways — sometimes visiting customers’ homes in order to install them.

“So the industry is looking a virtual gateways — which means a simple device in the home and the services hosted in the cloud.” That means, of course, that once the device is installed it can be left in place.

New services can be implemented in software in the cloud, and rolled out to customers automatically, without any technicians’ visits.

“More than that,” says Häglund. “You can individualise services, depending on what people want and what they are prepared to pay for. It means service providers can make an individual offering — and make it faster.”

There are a number of cost savings that arise from this approach. The boxes are simpler and there no need to replace them as services are developed and upgraded.

“We calculate that savings over five years will be 20%, which is a significant sum in this industry.”

Beyond home gateways, “the logical continuation of this is service-provider cloud services”, says Häglund.

“We are already seeing trials of SDN for cloud, and services should be commercial in 2016.”

And then, in good circular fashion, there will be advances in SDN for transport services, where SDN started. “This makes commercial and economic sense.”

Ericsson “has a complete offering” in softwaredefined networks, says Häglund. “We are virtualising all our applications and network functions. We have a complete portfolio for SDN.” Of course, an important element of SDN development is that most of those involved in the industry embrace the idea of open-source software at the heart of systems. “This is a very important topic,”

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Co-sponsored feature: Ericsson agrees Häglund. “The whole idea is to create openness. This includes both northbound — the interface with applications on the network, and issues such as security — and southbound — including transport, devices and so on.

Open-source software “Ericsson has always thought that creating openness is the way to build a successful industry,” says Häglund. The company uses open-source software for both northbound and southbound connections.

This represents a conversion to open-source, he admits. “We started, like everyone else, with a proprietary SDN, because there was no industry initiative for open-source at that time. But we stopped that.” Now Ericsson bases all its products on OpenDaylight software.

But if everything is open source, what is there to distinguish one vendor’s work from another’s?

And how does a vendor such as Ericsson protect its intellectual property in the work it does with service providers?

“Yes, unless you can earn money you won’t be innovative,” says Häglund. “What we look at is the core points, especially those defining southbound and northbound services through open-source software.”

This idea is “to make sure these are as open as possible”, he says. “And then the applications go on top — from Ericsson and other suppliers. They will to some extent be proprietary to Ericsson and the others.”

But open-source is a positive move for the industry, he adds. It provides operators with a greater choice and thus encourages innovation. “And, to be frank, a service provider doesn’t want to be stuck with one provider.”

With open-source SDN the operator is less likely to be stranded if a supplier goes out of business — and suppliers will compete equally to win business from their service provider customers.

“There is a trade-off,” Häglund admits. “For us to do something proprietary it is often quicker. And it is tempting for service providers also to go this way, as it promises quicker results.”

More choice for service providers

www.ericsson.com

But he is strongly in favour of the open-source route.

“We firmly believe that it is the right choice in the long term.” It will give service providers more choice.

The transformation to SDN is starting, he explains.

Ericsson’s software controller “is in commercial preparation for launch with several large service providers”, says Häglund.

But the industry’s transformation to full SDN will take time, he says. “It won’t be a revolution. Operators will adopt step-wise approaches, with hybrid networks and with natively defined applications.”

That means service providers will need a strategy to manage the migration, as for many years their networks will include both proprietary hardware and parts that have already transformed to SDN. “The trick is how to get there as a softwaredefined network,” he says. But what’s the target date? That’s hard to define, but Häglund points to that 2020 date for the first 5G commercial imple-

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mentations. “At that point a large part of the service provider network will be SDN,” he says.

Programmability will be valuable to the implementation of 5G networks: “What do you use programmability for? If you take any manual work — such as optimisation and tuning — SDN will fit very well.”

The move to SDN will require some shifts in culture among service providers, he adds “In a network with vertical boxes, you know who’s responsible for each box, and you can go to the vendors if something goes wrong. But with everything defined in software it becomes a different game. Who do you call?”

Operators will have to develop new skills to make the most of the benefits of SDN. “Management and control is where the differentiation will lie,” he says.

“Customisation and analytics will be key differentiators.” And there will be a marketing challenge when operators work out new ways to promote customisable services to their end users.

SDN is a constant partner of network functions virtualisation, the other side of this software transformation that is taking over the telecoms industry.

“NFV is about virtualising the functions, including computing and storage. SDN is about virtualising the network that delivers the services.”

The hard-wired services of today are costly and cumbersome, and will in future be delivered with programmable software.” But does that mean complexity will go away from hardware, in this new world of virtualisation?

“No, a lot of innovation is still needed,” says Häglund. “We’re seeing the evolution of mobile broadband technology from LTE to LTE-Advanced to 5G, and we’re seeing new access technologies.

There will be new hardware needed for cloud services, and the industry will aim for more efficient use of resources.”

Increased efficiencies The ultimate benefit will be that the increased efficiencies that will come from virtualisation will give operators the resources to invest in more capacity to provide more and better services to customers. And those resources will be needed — but operators will be able to use them more intelligently.

Because the new networks of the future will have software at their heart, analytics will have a key role in letting operators take more educated decisions.

Even in allowing automated decisions in many cases, says Häglund.

“Radio network optimisation, for example,” he says. “Traditionally the work of tweaking and tuning a radio network to get higher performance is done by technicians. But more and more we will be seeing real-time analytics used to enhance performance.”

Take cloud infrastructure, he adds. “Today a network is defined by the equipment, and is limited by it.

It has to be planned a year in advance, and operators have to hope there is enough,” he says.

With virtualisation, “you will be able to scale up resources on the fly, in order to react to end-user behaviour or to events”, he says. “That’s where the analytics will help: the trick will be to make sense of the data. The software-defined network becomes the last part of that loop.” Q

Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015 45

SDN adoption Network design will be the biggest opportunity and challenge for operators as they start to implement and roll out SDN. It offers them an opportunity to rethink the way their networks are built

Rethink the networks, as SDN is about to change the way everything is done

John Donovan, AT&T: Our technologydriven business requires a workforce pool with the skills we need to advance the network of the future

The concept of software defined networks captured the imaginations of the telecoms industry in 2013, when the not-for-profit Open Networking Forum was founded to promote the technology.

Two years later, the development in new approaches to communication networks and data centres through SDN have gathered momentum, changing up what network operators thought they knew all along.

In their transition to SDN, operators will be confronted with challenges from hardware and software to staffing and culture. Collectively still, they remain committed to capture a slice of a market which the vendor community has repeatedly touted to offer lower costs, higher agility and greater returns on investment.

networks, SDN has the ability to solve those problems. In separating the network control plane from the forwarding plane it provides a centralised view of the distributed network for more efficient orchestration and automation of network services.

SDN provides a more “horizontal approach” which enables platforms as well as control and management frameworks to be more automated, says Cooperson.

That means operators have the capability to automate and the flexibility to move services elsewhere where they are needed.

To keep pace with the rapidly changing demands in today’s industry, the provisioning of new applications or capabilities into the network — the way operators want it — is crucial.

Networks

Self-service

If one thing is certain, it is that SDN will change how operators plan, build and operate networks of tomorrow.

Already the industry is seeing a dramatic change in network design from the traditional proprietary hardware boxes to a more dynamic set of software parts operating on commercial, off-the-shelf hardware.

Network design will be the “biggest opportunity and challenge” for operators as they start to implement and roll out SDN, says Dana Cooperson, research director for Analysys Mason’s networkfocussed software research programmes.

SDN offers an opportunity for operators to rethink the way their networks are built.

“In the past, when operators introduced a service, they considered what’s needed to support the service. First, it’s getting the building blocks in place, followed by connecting everything.

There are typically a lot of products and boxes to maintain, along with all the operation support systems,” says Cooperson.

“But if you need a new service, you have to design another stack of hardware and software around it. That’s not very flexible.”

With its different approach to designing, building and managing

Using SDN techniques, companies can provision their own networking resources through a selfservice portal. “With SDN you can download a new configuration into the box on the premises without having to send somebody down. This way, operators can offer the service in a more attractive way,” says Cooperson. At the same time, customers too may want the option of spinning workloads up and down dynamically, she adds.

“If the customer decides that they need more bandwidth, they can go into the self-portal system and request 20 megabytes themselves. The service request can be handled remotely in a new downloaded capability, and so the cost associated with upgrading the customer is minimised,” she explains.

Andre Fuetsch, senior vice president of architecture and design at AT&T, says the separation of the control plane from packet-forwarding hardware, as well as virtualisation, are transforming how the operator is designing, operating and staffing its networks.

“We are building a platform which exercises some of the SDN principles — such as a controller — as well as instantiation, fault management, capacity management, accounting and performance to support a virtualised environment,” Fuetsch adds.

In the process of laying out its architecture and design, AT&T has developed and deployed in “small iterative steps” which has allowed it to “be adaptable to the changing environment and to accelerate the speed of innovation — learning what ideas work, and what doesn’t,” he says.

The operator has put SDN in the driver’s seat as it shifts to a more agile networking strategy called user-defined network cloud. To make that change,

46 Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015

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SDN adoption

Yves Bellego, Orange: We want to simplify the process to deliver the services to our business customer.

We aim to make provisioning much faster

AT&T is overhauling a majority of its network, equipment and software as it aims to virtualise and control over 75% of its target network under its Domain 2 architecture by 2020.

Another carrier that has made the leap from proof of concept to real life — for its enterprise users — is Orange. As part of its SDN for Business programme, the operator piloted SDN services for small, medium, business enterprises in France in April 2015.

The pilot is said to feature a 100% digital and automated SDN solution.

“The goal is simple. We want to simplify the process to deliver the services to our business customer.

We aim to make provisioning much faster and give more control to the customer for web portals to adapt to the services they are using,” says Yves Bellego, director of technology strategy at Orange.

The challenge, he says, is to establish a smooth integration between different functions. “What needs to be tested significantly are the different elements — SDN controllers, virtualised functions, and orchestrator. We are very keen to ensure interworking in the environment,” he adds.

Data centres

Dana Cooperson, Analysys Mason: In the past, there were typically a lot of products and boxes to maintain, along with all the operation support systems

With the exponential increase in devices and the rise in cloud computing, service provider data centres must advance across various fronts to support demand for capacity and bandwidth.

SDN has the potential to do exactly that, revolutionising legacy data centres by enabling the integration of physical and virtual environments. For example, applications can be migrated between virtual data centres and across physical environments without reconfiguration. Cloned environments for development and testing can also be set up in just minutes.

Improved performance is one impact SDN will have on data centres, says Bellego.

Reducing latency is a “big push” for the operator — and that’s where SDN is needed. Besides easing the congestion of data centre networks, more equipment and greater processing power can be added quickly and easily, in turn reducing latency and improving responses.

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“We are building large data centres with huge traffic and we need to ensure good performance. We need to optimise the flow from the customer device to the server to the data centre — this is the kind of optimisation that we need to deliver,” he says.

Gone are the days where operators can afford to consider the data centre as a separate part of the network. “Today we need to have an end-to-end view and optimise the architecture from the customer device to inside the data centre.”

Networking staff With automated provisioning, dynamic virtualisation and network flexibility set to stay in the vocabulary of telcos, today’s network operators will have to adapt accordingly. The technology will change the role of the network administer as well as the skills required for the job, says Cooperson.

“For example, what do you do if there is a problem and you can’t go up to a physical box and pull out something. When those old processes can’t be used, what do you do? What do you replace them with?”

Carriers will require a formidable group of IT professionals with SDN knowledge who can support the transition into that technology.

Since the launch of Domain 2.0 and its vision for a user-defined network cloud, AT&T has sought to equip its employees with software skills. The carrier partnered with online education provider Udacity to launch an online so-called “nanodegree” programme last year to develop a group of software experts in the company.

“To accomplish more with technology, companies need a workforce with advanced technology skills.

But education models evolve slowly. We’re not waiting for someone else to solve this problem,” says John Donovan, senior executive vice president of AT&T technology and network operations.

“Our technology-driven business requires a workforce pool with the skills we need to advance the network of the future,” he adds.

Standardisation As operators look to deploy SDN more heavily, the next step the industry has to work on is ensuring standards and interoperability, says Orange’s Bellego.

“We need to converge on an architecture where the functions reside and work out the interfaces that need to be opened so we can agree on the building blocks.”

“What we need to avoid are propriety solutions that are not compatible. We don’t need everything standardised now but if we can at least agree on the building blocks — that will enable the vendors developing the blocks to work together.” Groups such as ONF are “a step in the right direction,” he adds.

Dan Pitt, ONF’s executive director, has said that interoperability remains a focus and the group is working with other SDN initiatives, such as OpenStack and OpenDaylight.

While it’s clear that the implications of the transition are many, work on SDN is still moving fast, at least for the tier-one carriers which have the largest at stake — and the most to gain. Carriers should realise by now that it’s time to let go of the old and prepare their networks of tomorrow for the future today. Q

Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015 47

Open source software The vision of software-defined networking has come closer with the ONF’s release of Atrium to solve integration challenges facing network operators

SDN community launches Atrium to link open source software for networking OPEN NETWORKING FOUNDATION

Saurav Das, ONF: We have adopted an extensible architecture so that adding features and a variety of forwarding planes will follow easily.

With community contribution, this platform should evolve even more rapidly

Urs Hölzle, Google: Transitioning the networking industry to shared development around open source code rather than proprietary protocols is a key part of the ONF missions

The Open Networking Foundation has released Atrium, an open SDN software distribution that is designed to help the networking industry adopt open SDN by integrating established open source software with some critical connecting pieces.

The first release incorporates three elements: Q the Border Gateway Protocol; Q the Open Network Operating System; and Q the Open Compute Project components.

The software elements run in either controllers or switches, communicating via the OpenFlow protocol, and include plug-in opportunities for other switching solutions to help foster an open ecosystem of interoperable, hardware-based OpenFlow switches.

“ONF is actively creating the ecosystem and the architecture needed to bring open SDN to network operators around the world,” says Dan Pitt, executive director of the Open Networking Foundation.

“Atrium is the first top-to-bottom, soup-to-nuts open source implementation that someone can actually download from GitHub and use to run a real network.” Pitt adds: “Atrium’s philosophy is to build on software from many developers that has been community developed and tested to help network operators more easily build custom solutions and allow vendors to take advantage of common building blocks, reducing their development costs and improving interoperability.

“ONF views open source software as critical to accelerating commercial adoption of open SDN.”

Integrating components The first package — called Atrium 2015/A — integrates previously standalone open source components.

This release of Atrium also benefits from ONOS’s scale, performance, and high availability, he adds.

48 Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015

ONF member companies and others are already porting Atrium to OpenDaylight for release later this year, to leverage its widespread industry support and access to a broad variety of use cases including NFV, campus, and data centre.

The Open Compute Project — OCP — is a pioneering project for open source hardware. ONF will release future packages to support additional needs of network operators.

“We have adopted an extensible architecture so that adding features and a variety of forwarding planes will follow easily,” says Saurav Das, principal system architect at the Open Networking Foundation.

“With community contribution, this platform should evolve even more rapidly.”

Atrium 2015/A will be available by the end of June 2015 with the following: Q Documentation for installation, configuration, and operation; Q A snapshot of ONOS verified to work with the whitebox software stack as well as other vendor switches that have provided a driver for their pipeline; Q A BGP peering application that runs on ONOS and includes the Quagga BGP stack; Q A collection of OpenFlow v1.3 device drivers in ONOS, meant for talking to vendor equipment with different hardware pipelines; Q Indigo OpenFlow client together with Open Network Linux and OFDPA for the OCP white-box switches; Q Mininet with the use of Open vSwitch (OVS) to emulate the hardware pipelines of the switches involved; (hardware pipelines represent a sequence of match-action tables in an OpenFlow switch); Q Full testing suite for functionality tests.

“Atrium is entirely focused on ease of open SDN deployment by lowering barriers to adoption,” says Yatish Kumar, the Atrium project lead and a member of the ONF Technical Council, director of the ONF Specifications Area, and CTO of Corsa Technology.

“We continue to view OpenFlow as key to meeting operator needs for a functional multi-vendor south-

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Open source software

Atrium supporters A number of organisations have contributed to the release of Atrium: Q AARNet, the Academic and Research Network of Australia Q Accton

Corey Bell, Open Compute Project: We are moving the industry to new models of efficiency and innovation in networking and computing for the benefit of all who operate IT infrastructures

Q Big Switch Q Broadcom Q Centec Networks Q Corsa Technology Q CSIRO Australia, the Commonwealth Scientific and Industrial Research Organisation Q Dell Q ESnet Q Extreme Networks Q NoviFlo Q ON.Lab Q Pica8

Others committed to contributing to future releases of Atrium include:

Neela Jacques, OpenDaylight: It’s great to see more momentum building around open solutions for users. ONF is a key partner and we share a common vision and purpose to promote SDN

Q Allied Telesis

Q Facebook

Q Riava

Q Bristol is Open

Q Gigamon

Q Sify Technologies

Q BT

Q Huawei

Q SM Optics

Q BTI Systems

Q Infoblox

Q Spirent

Q CAICT, the Chinese Academy of

Q Ixia

Q Tencent

Q Mellanox

Q University of Bristol

Q Lenovo

Q University of Campinas

Q Luxoft

Q University of Lancaster

Q NEC

Q Wipro

Q NTT Group

Q Zeetta Networks

Information and Communications Technology Q Ceragon Networks Q CPqD Q Criterion Networks Q Deutsche Telekom Q ECI

Q P4.org

bound protocol. We will build on Atrium’s offerings not only in the controller and switch spaces but also in the application space, making sure that the OpenSourceSDN.org community has a voice in what is included in future releases.”

Industry support

Guru Parulkar, ON.Lab: We value working closely with ONF and pleased to bring Atrium to life and provide ONOS and BGP peering application as the key building blocks

ONF’s open source software initiatives are built on a collaborative effort to ensure its work is complementary to and interoperable with the work being done by other organisations.

“Transitioning the networking industry to shared development around open source code rather than proprietary protocols is a key part of the ONF mission,” says Urs Hölzle, chairman and president of the Open Networking Foundation and senior vice president of Google’s technical infrastructure, and a Google Fellow. “Atrium is an important step toward realising this direction.”

Cliff Grossner, research director at IHS’s Infonetics Research, says: “Top priority SDN use cases have been identified and SDN will be migrating from the lab to production deployments over the next two years. Collaborative efforts in building integrated

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open source SDN solutions like Atrium are an important next step in speeding SDN deployments and fostering innovation.”

Says Open Compute Project CEO Corey Bell: “We are pleased to see OCP adopted for the open source hardware and operating software for the forwarding plane in Atrium. Together with ONF and partners we are moving the industry to new models of efficiency and innovation in networking and computing for the benefit of all who operate IT infrastructures.”

Neela Jacques, executive director of OpenDaylight, adds: “It’s great to see more momentum building around open solutions for users. ONF is a key partner and we share a common vision and purpose to promote SDN. We look forward to seeing the next release of Atrium running on OpenDaylight offering even more opportunities for operators to adopt open SDN.” Guru Parulkar, co-founder and executive director of ON.Lab, adds: “We value working closely with ONF and pleased to bring Atrium to life and provide ONOS and BGP peering application as the key building blocks. We look forward to continuing our relationship with ONF and enabling real progress of open source software in achieving mainstream adoption.” Q

Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015 49

The SDN world

Who’s who and what’s what in SDN Software-defined networking is still new and, for some people, there are a baffling number of different organisations promoting the technology and encouraging people to work together to develop open-source software for the industry.

This is a quick guide to who’s who and what’s what in the world of SDN — with apologies for any omissions.

Open Networking Foundation http://www.opennetworking.org

SDN is the physical separation of the network control plane from the forwarding plane, and where a control plane controls several devices.

It is an emerging architecture that is dynamic, manageable, costeffective, and adaptable.

This architecture decouples the network control and forwarding functions enabling the network control to become directly programmable and the underlying infrastructure to be abstracted for applications and network services.

The OpenFlow protocol is a foundational element for building SDN solutions.

Members of the Open Networking Foundation help shape the future of networking by promoting the development and accelerating the adoption of open SDN. There are over 150 members, from enterprise IT, cloud and telecom service providers, network equipment vendors, and silicon providers.

Benefits include: Q Hands-on opportunity to drive the formation of SDN through interactive working groups; Q Collaboration with experts on SDN and the OpenFlow standard; Q Early access to emerging standards, frameworks, and use cases; Q Royalty-free access to the OpenFlow protocol and associated standards, logos, trademarks, and intellectual property; Q Market visibility through ONF sponsored activities Funded solely through membership dues, set at $30,000 a year, though there is a special rate for start-ups: $1,000 a year for the first two years

following incorporation; $5,000 for years three to four; from year five onwards it’s the full $30,000.

The ONF has a Software Leadership Council that is charged with managing ONF’s open-source software programmes and online community development.

The SLC recommends ONF’s software strategy to the board and works to develop new programmes, events and activities that emphasise the software part of SDN as a vehicle to put SDN directly in the hands of network operators and their suppliers.

The SLC is chaired by Stuart Bailey, CTO of Infoblox; other members include Rob Sherwood, CTO of Big Switch Networks; Jono Baco of Xprize; Jasson Cassidy of Flowgrammable; Saurav Das, principal system architect at the ONF; Carl Moberg of Cisco; Ben Pfaff of VMware; and Dan Talayco, who has been involved with SDN since 2009.

Open Source SDN http://opensourcesdn.org

OSSDN is a non-profit online community dedicated to recognising, producing, and sharing open source software that helps network operators deploy SDN. Its goal is to create, reference, or otherwise point out solutions that can be leveraged by those who manage networks.

OSSDN is sponsored by the ONF. It is looking for a community manager to implement its community strategy, including managing the various development projects on the website, managing engagement and interactivity with

50 Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015

its audiences, keeping information current, and generating and fostering community spirit and participation.

This role coordinates with Open Networking Foundation’s Software Leadership Council and reports directly to ONF’s technical program manager to support their respective missions, ensuring consistency in voice and cultivating a strong community around the various open source SDN initiatives.

OpenFlow and the OpenFlow standard http://archive.openflow.org/

The original OpenFlow website is now an archive, as the ONF is now responsible for OpenFlow-related information.

The OpenFlow Switching specification was created in 2008 to evangelise and support OpenFlow.

Although originally hosted at Stanford University, the goal was always for OpenFlow to be owned by the community: hence the move to the ONF. OpenFlow is the first standard communications interface defined between the control and forwarding layers of an SDN architecture.

OpenFlow allows direct access to and manipulation of the forwarding plane of network devices such as switches and routers, both physical and virtual (hypervisor-based).

OpenFlow-based SDN technologies enable IT to address the high-bandwidth, dynamic nature of applications, adapt the network to ever-changing business needs, and significantly reduce operations and management complexity.

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The SDN world Open Networking Lab (ON.Lab) http://onlab.us

The Open Networking Lab was founded as a non-profit organisation to “pursue the vision of what networking could be for the public good”.

Networks today are described too often as closed, proprietary, complex, operationally expensive, inflexible — in a nutshell, they impede innovation and progress rather than enabling them.

ON.Lab has a vision of what networking could be through the promise of SDN. With SDN, the control plane is separated from the data plane, the hardware innovation cycles are decoupled from the software innovation cycles. In an SDN-enabled world, internet and cloud innovation are able to accelerate innovation while significantly reducing the costs of building and operating networks.

Members include AT&T, China Unicom, Ciena, Cisco, Ericsson, Fujitsu, Huawei, Intel, NEC, the US National Science Foundation, NTT and SK Telecom.

It is based in Menlo Park, California. However, in June 2015 the latest news and announcements on its website were dated November 2014, when ON.Lab launched ONOS. All subsequent announcements are on the ONOS site.

ONOS http://onosproject.org

Sources: organisations’ websites, as shown

The Open Networking Lab, ON.Lab, launched the open source SDN Open Network Operating System (ONOS) at the end of 2014 on behalf of the ONOS community of partners, contributors and end-users.

The open source software was then released and made available for download.

ONOS is a complete open source SDN network operating system that enables agile service creation and deployment at scale on any hardware, including white boxes.

This disruptive platform delivers a highly available, scalable SDN control

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plane featuring northbound and southbound open APIs and paradigms for a diversity of management, control, and service applications across mission critical networks.

ONOS’s releases are named after birds. Avocet was the first release and focused on the best architecture and its base features. Blackbird was second and drove performance and scale to industry leading levels.

Cardinal has been all about enabling important operator use cases.

OpenStack https://www.openstack.org

improvements in the Open vSwitch Database Integration project, and a technology preview of advanced OpenStack features such as security groups, distributed virtual router and load balancing-as-a-service.

OpenDaylight software is a combination of components including a fully pluggable controller, interfaces, protocol plug-ins and applications. With this common platform both customers and vendors can innovate and collaborate in order to commercialise SDN-based and NFV-based solutions.

Open Platform for NFV (OPNFV) https://www.opnfv.org

The OpenStack project is a global collaboration of developers and cloud computing technologists producing the open standard cloud computing platform for both public and private clouds. It is backed by a community of developers and some of the biggest names in the industry.

OpenStack software controls large pools of compute, storage, and networking resources throughout a data centre, managed through a dashboard or via the OpenStack API. OpenStack works with popular enterprise and open source technologies making it ideal for heterogeneous infrastructure.

OpenStack has a strong ecosystem, and users seeking commercial support can choose from different OpenStack-powered products and services in the marketplace. The software is built by a community of developers, in collaboration with users, and is designed in the open at OpenStack summits.

OpenDaylight http://www.opendaylight.org

OpenDaylight is an open platform for network programmability to enable SDN and create a solid foundation for NFV for networks at any size and scale.

For companies looking to manage their networks using OpenDaylight, there is deeper integration with OpenStack, including significant

OPNFV is a new open source project focused on accelerating NFV’s evolution into an integrated, open platform.

The OPNFV community is collaborating on a carrier-grade, integrated, open source platform to accelerate the introduction of new NFV products and services.

By integrating components from upstream projects, the community can perform performance and use casebased testing to ensure the platform’s suitability for NFV use cases.

OPNFV will also work upstream — with other open source communities — to bring the learnings from its work directly to those communities in the form of blueprints, patches, and code contribution.

The scope of OPNFV’s initial release is focused on building NFV infrastructure (NFVI) and virtualised infrastructure management (VIM) by integrating components from upstream projects such as OpenDaylight, OpenStack, Ceph Storage, KVM, Open vSwitch and Linux.

GitHub https://github.com

GitHub is a web-based Git repository hosting service, which offers both plans for private repositories and free accounts, which are usually used to host open-source software projects. It has over nine million users and over 21.1 million repositories, making it the largest code hoster in the world. Q

Global Telecoms Business CEO and CFO Guide to SDN: May/June 2015 51

CTO roundtable LTE is the fastest growing mobile technology ever, and CTOs are the people handling those challenges. We asked four leading CTOs about the main issues they are facing

Rolling out LTE, and technology challenges with roaming and VoLTE: CTOs explain What are the main challenges you as a CTO face in rolling out LTE in your network? Were there any unexpected challenges?

Ibrahim Gedeon, Telus: No challenges to classical

design, biggest issue is the multitude of frequencies and band in light of how we approach hetnet and the importance of rolling out SON. Ibrahim Gedeon CTO, Telus

Andrei Ushatskiy, MTS: The main challenge is defining the strategy of LTE technology implementation while taking into account business requirements, license restrictions, various spectrum availability options, and other related restrictions — the necessity to clean up 800 megahertz, necessity to refarm 1800, certain restrictions imposed by the regulator on use of 1800.

Hisham Allam, Zain: Usually every LTE rollout so

Andrei Ushatskiy CTO, MTS

Hisham Allam CTO, Zain Group

far in Zain has gone smoothly and as per the plan.

However as every project has its challenges, LTE rollout has its challenges, mainly the availability of high capacity backbone network sits on top of them.

The unavailability of fibre network causes stress on the existing transmission network. Also regulatory constraints related to available spectrum bandwidth means that we were forced to launch LTE services without its maximum throughput.

Allam: From a technical point of view LTE is considered a simpler and easier network to manage, due to its flat network architecture. It required fewer network nodes to manage. Also with increasing availability of spectrum, we managed to offer LTE-Advanced to our subscribers.

Blanco: The user data experience has far outperformed what we have seen with 3G previously. Even in a number of special events where we have had very high load the system performance and user experience has been positive.

Does the performance you’re getting out of LTE live up to the promises of the vendors?

Gedeon: Yes. Ushatskiy: During development of the LTE imple-

mentation strategy we conducted a thorough analysis of global experience. We talked not only with prospective providers, but also with other operators that introduced LTE ahead of us. That’s why today the efficiency of our own LTE network meets our expectations.

Enrique Blanco, Telefónica: The main challenges

Allam: The main driver for good performance for

have been the physical roll out and also upgrading transport networks to make sure we can provide our customers with the best LTE experience.

Generally we have been very pleased with how LTE has performed across our deployments. The introduction of LTE has been much smoother than the deployment of 3G was some ten years earlier.

LTE is mainly spectrum and internet quality. There are others factor such as devices used and spectrum used too. We have seen tremendous improvement in data performance in all our opcos where we have launched LTE in terms of overall system efficiency, performance and user experience.

For the customer, LTE has offered better user experience and faster download/upload speeds where we are now achieving over average throughput of two megabits a second.

The challenge has been in measuring KPIs that reflect the actual user experience after LTE rollout tests. It has become more complex especially if combined with device issues, for example an LTE data session can be dropped when a customer is not transmitting data but they have an always-on device.

Measuring this drop as a KPI will not show the real experience of the customer since sessions are re-established quickly without the customer noticing the drop.

What are the main technological and service advantages that you see in rolling out LTE and, if you offer it, LTE-Advanced?

Gedeon: Better performance in terms of bits/hertz.

We are rolling LTE-Advanced, devices on VoLTE and carrier aggregation remain lagging. No impact from a subscriber viewpoint yet.

Enrique Blanco CTO, Telefónica

Advanced allows us to further raise the efficiency of spectrum usage and enhance the user experience — for instance, peak data transmission speed. We have been testing and implementing LTE-A in the MTS network in Russia since 2014.

Ushatskiy: From the standpoint of technology LTE enables the most efficient use of the existing spectrum.

From the standpoint of user experience LTE allows us to secure a much higher peak data transmission speed and lower latency compared to 3G networks, which is crucial for a number of user applications.

As a development of LTE technology, LTE-

52 Global Telecoms Business May/June 2015

Blanco: Generally yes. We have seen some disap-

pointing issues but overall it has been much easier than when 3G was introduced

www.globaltelecomsbusiness.com

CTO roundtable Have you been able to offer LTE roaming? If so, how have you done it, and with which operators? If not, what are the obstacles that are holding this back, technical or commercial?

Gedeon: Not yet, we will launch North America-wide with AT&T, Verizon Wireless and T-Mobile US first; Sprint I believe to follow.

Ushatskiy: MTS was the first operator in Russia to launch international LTE roaming — November 2013 with SK Telecom from South Korea. At the moment this service is available for MTS subscribers in 43 countries and 63 networks.

Of course it was a challenge. We had to choose proper IPX/Diameter signalling providers and upgrade billing systems for LTE roaming. But thanks to everyone involved it was an exciting journey with mutual assistance and skill-sharing.

Q there is no legal framework that defines the princi-

ples of routing voice calls from commercial data networks to the PSTN, including security requirements; Q the market does not have sufficient penetration of mobile terminals with LTE support on the kernel and operating system level.

Our strategy is to minimise time-to-market development of future VoLTE services and to be ready to face market demands as it arrives.

Allam: We believe VoLTE is a differentiated service

for LTE. We have implemented IMS in two Saudi Arabia and Kuwait, and VoLTE is tested and ready for service there. We are just waiting for mobile manufactures such as Apple and Samsung to start testing with us in order to go live.

Our objective of introducing VoLTE is to be leader in the market, to have such HD crystal clear quality of voice, and gradually to start offload 3G network.

Allam: We launched LTE in four opcos so far, and

Blanco: Yes we do now offer VoLTE commercially.

the amount of traffic and growth is huge and more than our expectation. Part of our LTE strategy is to have good coverage in country, and later on we shall extend this to be outside the country.

We are planning to enable roaming in the four opcos where we have LTE and we are in testing phase.

We went live in Saudi Arabia with a few Asian operators, and every day, we are testing this service with new operators. We faced many technical problems since the functionality is new and not mature enough.

Our first deployment has been in Germany with very good reports so far. Our strategy is clear that VoLTE brings user experience benefits in areas such as voice quality, set up times and integration of voice with other advanced services.

Blanco: After the successful commercial launch of

inbound LTE data roaming during the 2014 World Cup in Brazil, with connections both inside and outside the Telefónica group. Roaming partners include AT&T, Belgacom, Bouygues Telecom, China Mobile, Etisalat, HK CSL, KDDI, Rogers Wireless, SK, Sunrise, Swisscom, T-Mobile, Verizon.

A second major milestone concerning roaming is the forthcoming Copa America to be held in Chile in 2015. As major result most American operators inside Telefónica will be interconnected for commercial inbound roaming with Chile, with plans to extend this coverage to outbound roaming after the event.

Besides of some technical issues, the main obstacles have been commercial, as the roaming market is declining with changes in the regulation rules and with the rise of new agents.

Do you offer — or do you plan to offer — voice over LTE? Please say something about your VoLTE strategy.

Gedeon: That is the plan. We are frankly not rush-

ing, planning before year end. With circuit-switched fallback and the HSPA network, the need we believe is not urgent. It aligns with everything over packet and IP; however the cost to enable VoLTE roaming is a touch rich so we are approaching VoLTE slowly.

Ushatskiy: In terms of technology we are ready to support VoLTE. We have already integrated the IMS core around which VoLTE services will be built.

However there are some regulatory and business barriers to the development:

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Let’s look forward. Do you see a transitional stage between 4G and 5G? If so, what should its attributes be?

Gedeon: Some call it 4.5G, but it is critical for us and others to ensure the current investments establish building blocks for 5G. We believe it should be geared around internet principles and NFV. Ushatskiy: According to the observable industry trend, LTE-M technology might become a transient phase between 4G and 5G. LTE-M represents a significant upgrade of LTE, facilitating a highly efficient service for a larger number of M2M devices in a given area. Naturally we expect this technology to be downward compatible with LTE meaning its implementation will not require any serious modernisation of the existing network.

Allam: Yes and we call it 4.5G. We are already in

coordination with our partners are creating the definition of 4.5G and we think it will be a transitional period to 5G. We think that between now and 2017 we will achieve it.

Blanco: Obviously it is early to be precise about 5G

but our desire and strategy is to ensure 4G develops and is an integral part of any future 5G world.

Clearly the exploitation of the very high bands above 6 gigahertz require new technology development, so 5G will have distinct aspects which go beyond a pure natural evolution of 4G. The key difference areas with 5G are likely to be at the two ends of the spectrum — at the high end to bring availability of the very high speeds, low latency high performance more towards the cell edge and then also for lower speed solution with M2M and internet of things where there are very different challenges around battery life, very cheap devices and so on. Q Global Telecoms Business May/June 2015 53

Mobile devices How do you achieve interoperability and security and reduce development time and cost for devices connected to the internet of things? Bryan Sullivan and Takafumi Yamazoe offer a solution

Open-source software project aims to reduce fragmentation that’s slowing down the IoT cloud smart phone browser

Designers of smart watches, personal healthcare devices and other sensors must customise their developments to each operating system, such as iOS or Android

Bryan Sullivan is vice-chair of the board of the Open Mobile Alliance and Takafumi Yamazoe is with NTT DoCoMo openmobilealliance.org

cameras

web apps

glasses

GotAPI

smart lights

plug-ins device web APIs

toys, robots

sensors

remote controls

healthcare devices

watches bands

Fragmentation is slowing down the internet of things — because of the sheer number of things that devices need to connect to.

Increasingly, many types of devices and sensors need to connect to our smartphones, our cars or our home gateways. Smart watches and personal healthcare devices will need to connect to our smartphone, appliances to our home gateway and many of these will connect to our car.

Today, developers of each of these sensors and devices must customise their development to each operating system, such as iOS or Android. Additionally, similar features from different device manufacturers require different application programming.

This can hurt time to market or even consistent functionality across various operating systems, while also driving up development costs.

The advent of the internet of things and associated machine-to-machine technologies offers unprecedented opportunity to enhance the way we live, work and play. From healthcare to automotive to public utilities, there is almost no aspect of life that will not be touched by IoT. According to Cisco’s 2015 Visual Networking Index, the number of IP-connected personal devices and M2M connections online will grow to more than 24 billion by 2019. However, in order to realise the potential benefit of IoT, there are business, technology and privacy hurdles that must be addressed and overcome.

What’s more, today there is no way for web-based applications running in a browser to work with external devices such as a smart watch. And native applications provided on your device require software development kits that are different for each device.

Again this drives up technical complexity, cost and time to market.

A third challenge involves the use of cloud-based servers to manage these devices and act as the interface between the device and the smartphone.

Cloud-based data storage, while extremely useful and

54 Global Telecoms Business May/June 2015

necessary for many applications, can compromise application speed, as well as add cost and personal data security risk for smaller personal networks.

In order to address these issues, the Open Mobile Alliance has developed a secure framework for smartphone web applications to access external devices and internal apps through web-standard technologies supported by major web browsers and smartphone platforms.

This allows developers to create applications compatible with a variety of devices, which until now have required dedicated native code development efforts.

With the framework, called GotAPI, applications running in browsers can access external devices consistently across any operating system, giving developers the opportunity to help create a new ecosystem of interoperable devices and applications. This open architecture allows developers to write less complex applications for smart devices while expanding market reach.

GotAPI enables application development independent of any particular operating system via web technologies, and bridges applications and external devices through a standardised framework for APIs, providing for registration, discovery, access, security and authentication, so that these functions no longer have to be implemented independently for each external device, eliminating costly development time and effort.

Plug-ins implement the host-device-internal web APIs, exposing services from external devices to applications.

Data privacy and confidentiality is maintained and application speed is optimised, because data is not going through other companies’ cloud-based servers.

Many companies have contributed to the development, including NTT DoCoMo, which contributed its web API as the basis for OMA’s GotAPI. In April 2015, the Device Web API consortium was created to promote the use of GotAPI for IoT and wearable devices. More than 60 companies have joined this effort — including NTT DoCoMo, SoftBank and KDDI. There is already a Device Web API manager supporting GotAPI, available for download from Google Play.

It is the hope of the OMA and the Device Web API consortium that the GotAPI community will continue to grow.

NTT DoCoMo’s open-source software project at GitHub already supports various devices through plug-ins with device web APIs. Additionally, healthcare device web APIs are being developed at OMA. Given these efforts are already underway, we can look forward to a variety of devices coming to market that can connect to our smartphones, cars and gateways to enhance our lives in an open, secure, and cost-effective manner. Q

www.globaltelecomsbusiness.com

Co-sponsored feature: Polystar Making sure VoLTE works is not just about delivering a service. It’s crucial to the future of service providers, writes Peter Heikenborn

No half measures for reliable VoLTE rollout

Peter Heikenborn: To ensure the reliable rollout, seamless performance and smooth operation of VoLTE, CSPs must have access to test solutions that can deliver the all-round performance necessary to achieve this

Peter Heikenborn is vice president of the T&M business unit at Polystar www.polystar.com

Despite the growing momentum behind VoLTE deployments, communication service providers recognise the significant challenges they represent — perhaps CSP’s greatest single technical and operational challenge.

There are several reasons for this. First, it’s just plain complicated. VoLTE has been a long time in the making and requires the supporting infrastructure of an IP Multimedia Subsystem (IMS), or something that at least delivers most of the capabilities of an IMS. This means that there are layers of additional complexity that must be considered.

Second, VoLTE cannot exist in isolation. It must co-exist with voice services available in legacy networks, such as 2G and 3G. As a result, a complex parallel capability, single radio voice call control (SRVCC) must enable seamless handover between LTE and legacy network infrastructure. Without this, each VoLTE service would exist only as an island; calls would fail as users move out of the LTE domain and CSPs would not be able to offer a seamless service that would have any value.

Third, users roaming to a new network that does not support VoLTE must be able to make calls as normal. Users should be aware of the promised benefits — but they should not have an adverse experience when they move beyond coverage or to another country.

The issue of seamless service is of profound importance. As all-IP LTE networks were not designed with a native voice service, and as VoLTE is effectively an add-on, CSPs have to get VoLTE deployments right from the outset. If they don’t, other providers can step in to offer voice services over the LTE infrastructure CSPs have deployed at such expense.

The failure to deliver VoLTE successfully represents an existential threat to CSPs: without a reliable, seamless voice service, LTE operators will simply offer networks to access services delivered by other providers.

Fourth, the launch of a dedicated voice service will also bring Voice over WiFi (VoWiFi) and Video over LTE (ViLTE) as complementary solutions. Thus, VoLTE is a gateway to a whole host of new service capabilities, models and new modalities of communication, incorporating context, dynamic switching from voice to video and back again, and others that have yet to be foreseen.

Finally, CSPs need not only to deliver an attractive, reliable and seamless VoLTE service to the user, they must satisfy legislative requirements, such as lawful intercept and emergency services. Failure to do so has significant consequences in terms of penalties from national regulators.

www.globaltelecomsbusiness.com

How then, can a CSP deploy VoLTE and ensure that these challenges are overcome? And, as VoLTE must also encompass the additional capabilities of VoWiFi and ViLTE, how can CSPs ensure that they maintain service performance as the service is itself enhanced?

The answer lies in testing. Test, test and test again.

A relentless drive for validation, stress testing and troubleshooting is a fundamental requirement for the success of any VoLTE deployment. VoLTE is of such importance that there isn’t going to be a second chance to get it right. It has to be done correctly, first time and every time.

This means that CSPs need test solutions that can be used at every stage of the life cycle of their VoLTE, VoWiFi and ViLTE deployments. This starts with the verification of systems that are procured from their vendors. Interoperability across the new interfaces defined by VoLTE standards and between solutions from different providers is crucial.

CSPs must simulate individual user sessions.

User devices can be simulated in sophisticated equipment that can generate both signalling and media plane traffic, to ensure consistent end-toend performance. The resulting call flows can be examined at various points across the network to verify compliance with relevant standards and interworking.

High-volume stress testing must also complement individual test cases and scenarios, which can include mass call or session generation. During this process, compliance with regulatory requirements, such as public safety and lawful intercept can also be validated.

Similarly, as VoLTE promises higher quality service, it is also essential to validate session quality, for both voice and video, achieved through the use of PESQ/POLQA and PEVQ algorithms.

As CSPs extend VoLTE and incorporate VoWiFi and ViLTE, they must be able to perform the same conformance, validation, functional and operational testing for these newer capabilities.

When services are live, CSPs need the capability to rapidly troubleshoot any problems that might emerge. They must be able to identify, replicate and analyse specific issues that may span multiple network elements.

Getting VoLTE, VoWiFi and ViLTE right first time cuts to the heart of what CSPs can offer their customers in the future. The reliable rollout, seamless performance and smooth operation of VoLTE are absolutely critical. There can be no half measures.

To ensure this success, CSPs must have access to test solutions that can deliver the all-round performance necessary to achieve this. Q Global Telecoms Business May/June 2015 55

Mergers Alcatel-Lucent CEO Michel Combes is reported to be joining Altice to head European expansion as merger with Nokia comes a step closer

Alcatel-Lucent approves takeover

by Nokia as CEO heads to Altice

Rajeev Suri, Nokia: Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs

Michel Combes, Alcatel-Lucent: The merger will create a European champion and global leader in ultra-broadband, IP networking and cloud applications

Alcatel-Lucent’s board of directors has approved its proposed €15.6 billion acquisition by Nokia.

The company has completed its merger consultation with its French Group Committee as required

by French regulation. The group indicated that it does not oppose the merger, leading Alcatel-Lucent’s board to express its support for the deal.

The merged entity will be called Nokia and will be based in Finland, with Nokia’s management in charge.

Meanwhile reports in France said that Michel Combes, the CEO of Alcatel-Lucent, is expected to join Altice, the expanding French telecoms group, in charge of its European expansion. Altice made no comment except to announce that Combes was ceasing to be a non-executive director of the unit.

Combes — a former head of Vodafone Europe — was expected to leave Alcatel-Lucent before or after the Nokia merger. If he does join Altice, he will be filling the role once designed for Jean-Yves Charlier, former CEO of SFR, which was taken over by Altice’s Numericable in 2014. Charlier is the new CEO of VimpelCom. Philippe Camus, Alcatel-Lucent’s non-executive chairman since 2008, said: “The board is very pleased to see that the consultation of Alcatel-Lucent’s French group committee on the proposed combination with Nokia has been completed in line with the contemplated timing.” The opinion of the French Group Committee will be submitted as part of Alcatel-Lucent’s offer response to France’s financial markets regulator, the Autorité des Marchés Financiers.

The proposed transaction, first announced in April 2015, is subject to approval by Nokia’s shareholders.

Camus said: “It encourages both teams to continue working towards the creation of a European champion and global leader in ultra-broadband, IP 56 Global Telecoms Business May/June 2015

networking and cloud applications, for the benefit of our clients, employees and shareholders.”

Nokia agreed in April to acquire Alcatel-Lucent in an all-stock deal valued at €15.6 billion.

Rajeev Suri, president and CEO of Nokia, said: “Together, Alcatel-Lucent and Nokia intend to lead in next-generation network technology and services, with the scope to create seamless connectivity for people and things wherever they are.”

The takeover is expected to create a European telecoms equipment group worth over €40 billion which will be in a stronger position to compete with Ericsson and Huawei. It will also bolster Nokia’s position in China and gain key contracts with AT&T and Verizon in the US market.

In addition, the Finnish company will give AlcatelLucent shareholders 0.55 shares for each share in the French company they own.

The deal, to be finalised in the first half of 2016, is expected to expand its total addressable market by 50% to €130 billion. The takeover will also raise its potential market growth to 3.5% per year during 2014-2019, resulting in €900 million of operating cost savings by the end of 2019, the companies said in a joint statement.

Risto Siilasmaa, Nokia’s chairman, and Suri will lead the merged group and the company will remain headquartered in Finland with a strong presence in France. Alcatel-Lucent will have three members — including the vice chairman — on the board of nine to 10 members.

Nokia said it intends to be an “important contributor” of the overall development of the technology industry in France. Upon completion of the transaction, it aims to establish a €100 million fund to invest in start-ups in France with a focus on the internet of things.

www.globaltelecomsbusiness.com

Mergers

Analysys Mason’s comments on the merger of Alcatel-Lucent and Nokia Q Nokia’s acquisition of Alcatel-

Lucent gives the company a much stronger share of the communications service provider infrastructure, software and services market. However, for success, Nokia must do a complete acquisition and be able to perform a portfolio rationalisation very fast, or it can suffer the worst pains of its former mergers.

Q Nokia Networks gets access to

key tier-one customers in the US, which it was lacking, as well as to customers in China through the subsidiary Alcatel-Lucent Shanghai Bell. Asia and Africa are markets that are still in very early stages of 4G planning and these markets present opportunities for Nokia

Networks to take market share away from its closest competitors, Ericsson and Huawei Technologies.

Q Nokia Networks acquires a

key product-focused portfolio from Alcatel-Lucent, including IP transport network, optical technology, specific network analytics and wireless technology assets which should enable the combined company to compete more effectively with Ericsson and Huawei as more operators, particularly, large tier-one operators, move towards fixed mobile convergence Q Fixed broadband is a resurgent

area now and in the future, with related connected home and FMC opportunities. Hence, having a

FACTS ABOUT THE COMPANIES Nokia

Alcatel-Lucent

61,000 employees

52,000 employees

(6,000 in Finland)

(7,000 in France)

Operations in 140 countries

Operations in 130 countries

Listed on Helsinki Stock Exchange

Listed on Euronext Paris

Listed on NYSE

Listed on NYSE

Net sales €12.7bn

Net sales €13.2bn

Europe 31%

Europe 23%

Asia Pacific Japan India 26%

Asia Pacific Japan India 10%

North America 15%

North America 44%

Greater China 11%

Greater China 10%

Middle East Africa 9%

Middle East Africa 8%

Latin America 8%

Latin America 5%

Cash €7.7bn

Cash €5.6bn

Ebit margin 12.8%

Ebit margin 4.7%

Net cash €5.8bn

Net cash €1.6bn

R&D (Future Works)

R&D (Bell Labs)

12 countries

15 countries

Total R&D €2.5bn

Total R&D €2.2bn

Source: Nokia and Alcatel-Lucent www.newconnectivity.com

www.globaltelecomsbusiness.com

strong position in this area will be key for Nokia Networks to position itself at the top, ahead of its closest competitors.

Q Nokia Networks has also just

completed a round of divestments and restructuring, to focus itself on its core strength in mobile broadband. The acquisition comes at a good time to combine portfolios, after additional mobile product line rationalisation.

Q The combined company will have

a well-rounded portfolio that can cater to the requirements of communications service providers engaged in optimising and monetising their networks and in moving towards virtualisation and the digital economy in the longterm. However the manner in which the Alcatel-Lucent assets are integrated will be key to success in this area.

Q The deal is expected to be

Q The acquisition of Alcatel-Lucent

also gives Nokia an OSS portfolio and Nuage Networks that provides it with WAN-SDN solutions and access to a broader range of customers. But this acquisition does not provide it with products to address the BSS space.

finalised in the first half of 2016, but it will take much longer for the portfolio rationalisation to have an effect on the market. In the meantime, this will create a slowdown in infrastructure deals and could result in an advantage for the competitors.

Nokia has also confirmed that it is exploring a sale of its Here maps unit. Bids for the unit — valued by Nokia at €2 billion — are expected soon.

Suri added: “Our innovation capability will be extraordinary, bringing together the R&D engine of Nokia with that of Alcatel-Lucent and its iconic Bell Labs. We will continue to combine this strength with the highly efficient, lean operations needed to compete on a global scale.”

In a joint statement, the two companies said that the combined company would target approximately €900 million of operating cost synergies to be achieved on a full-year basis in 2019. It would target about €200 million of reductions in interest expenses to be achieved on a full-year basis in 2017.

The transaction is expected to be accretive to Nokia earnings on a non-IFRS basis — excluding restructuring charges and amortisation of intangibles — in 2017, they said.

Suri added: “We have hugely complementary technologies and the comprehensive portfolio necessary to enable the internet of things and transition to the cloud. We will have a strong presence in every part of the world, including leading positions in the United States and China.”

Market analysts Analysys Mason said that the combination would have “a much stronger share of the communications service provider infrastructure, software and services market” but warned: “However, for success, Nokia must do a complete acquisition and be able to perform a portfolio rationalisation very fast, or it can suffer the worst pains of its former mergers.”

Suri said: “Together, we expect to have the scale to lead in every area in which we choose to compete, drive profitable growth, meet the needs of global customers, develop new technologies, build on our successful intellectual property licensing, and create value for our shareholders. For all these reasons, I firmly believe that this is the right deal, with the right logic, at the right time.” Q Global Telecoms Business May/June 2015 57

Co-sponsored feature: Huawei An online rating, charging and billing system which puts business agility, innovation, operational agility and customer centricity at its core would help service providers through the digital wave, writes Roopesh Singh

Evolution of rating, charging and billing in the digital era

Roopesh Singh: Real-time rating and convergent billing have become the two most important capabilities as service providers move towards digital business

In the current digital era, there is mounting pressure on communications service providers to differentiate and innovate in order to capture the opportunities for delivering advanced products, services, and offers.

With the rapid growth of over-the-top providers, there is the need for service providers to transform themselves to ride the digital wave.

As part of the transformation journey service providers need to transform the way business is run, from traditional to digital. They need to take advantage of innovative digital technologies and create the digital mind-set and culture in their organisations.

Service providers have been investing heavily in building and upgrading the networks and diversifying into new and innovative digital services.

But, one of the key concerns for service providers is to recover such investments and monetise these services through flexible and open rating, charging and billing systems. Real-time rating and convergent billing have become the two most important capabilities as service providers move towards digital business.

They become part of business and service capabilities instead of just being part of the IT functions.

Pillars of success All businesses require three key pillars to succeed in this competitive age. They are: business agility and innovation; operational agility; and customer centricity.

Business agility and innovation Time to market is one of the most critical factors in this competitive age and service providers need to act

Business innovation

Operational agility Pillars of success

All businesses require three key pillars to succeed in this competitive age 58 Global Telecoms Business May/June 2015

Customer centricity

fast based on customer demands and market challenges. Therefore they require an agile system with flexible and sophisticated rating and billing capabilities which should be able to perform real time rating and charging as well as real time discounting for pre-paid and post-paid subscribers to launch new and innovative products and offers.

Multi-play bundled offering: Service providers offering multi-play services should be able to innovate with converged view across the lines of business and launch bundled offers to improve the overall revenue as well as customer loyalty. Charging and billing systems should allow bundled offerings and subscriptions for multi-play services across different network access.

Mobile broad band monetisation: As service providers are investing heavily on upgrading networks to increase data speed and support mobile broadband services, they should be able to monetise these investments in return. To fuel use of mobile broadband, service providers should be able to charge not only based on basic parameters such as time and duration, but also on smart service and content, with the option of not charging.

Policy-based charging: With the threat of OTTs treating connectivity as dumb pipes, service providers should differentiate the data flowing on their networks and charge it smartly. Service providers should combine the policy management capabilities and charging capabilities together to make flexible offerings to consumers, promoting fair usages as well as fuelling overall usages.

Enterprise billing: Charging and billing system should provide the convergent data model for all customer types including large enterprises, small and medium-sized enterprises, small-office-home-office users, and family and individual customers to provide flexible rating and charging capabilities.

Enterprise customers are important and high value customers for service providers . Hence, they should be able to perform: Q hierarchy and flexible payment redirection; Q shared quota and limitation management; and Q enterprise bills at different hierarchies.

Billing on behalf: As service providers diversify towards the newer digital services, they face the challenges to charge evolving video services, peer-to-peer services and XaaS in cloud environments. In the digital economy where multiple services from different partners are aggregated or mashed together to provide complete solutions, it will pose challenges not only for direct billing but also for billing on behalf of partners.

www.globaltelecomsbusiness.com

Co-sponsored feature: Huawei Policy-based charging Time change

QoS decision

Policy control and charging architecture

10:00-18:00

Policy Manager

Rating & Charging

Location change

Sy

roaming

25% used

80% used

Charging decision

Policy

Event

Quota change

Gy

Gx

Tariff A

Tariff B

Notification and redirect Your left traffic quota is ***, After quota exhaust, the service will be restricted .

Service change Number xxxxxx Service change

GGSN(PCEF)

Service providers would require the flexibility and capability to rate and bill any products or services, an event or transaction, a physical or digital entity and monetise through smart offerings; that is when the true innovation flourishes.

For every business entity, the billing system should support different attributes such as multi-currency, multi-time zone and multi-language. Data and application should be isolated between different business entities. The offer, the price plan and the policy should be managed by business entity hierarchy.

Operational agility

Roopesh Singh is chief architect at Huawei www.huawei.com

A digital service ecosystem requires an agile and low cost operation. A key challenge for the telecommunications industry is to improve the cost-to-value ratio and reduce the total cost of ownership. Service providers would be required to consolidate the rating and charging systems across the lines of business and across the customer segments — pre-paid or postpaid, retail or enterprise, or hybrid — to achieve this.

To enable operational agility, the charging and billing system should be based on open and standard interfaces and should incorporate thick configurable layers which reduce the delay in any change management and adaption of business processes. They should be convenient operations for service providers — and easy to manage.

Billing as a service: To reduce the total cost of ownership and improve efficiency and system resilience, the charging and billing system should be built on cloud architecture running on pooled infrastructure.

Such system should be highly scalable just by increasing the pooled resources and should not require any subscriber/data migration during expansion. Such system should support n+1 cluster load balance for effective utilisation of resources and should support service continuity during upgrade.

Unified product catalogue and test simulation: A charging and billing system should support a centralised and flexible offering/product management capability through a unified product catalogue. This should support offer management, along with version management and rollback. A number of different service provider employees — including systems administrators, market offer designers or IT/technical engineers — should be able to cooperate via the catalogue to achieve high operational efficiency.

The charging and billing system should also provide a simulation tool to test online the offer to shorten the end-to-end time to market.

Multi-tenancy: The charging and billing system should be able to support multiple tenants in crosscountry or international MVNE/MVNO mode as separate business entities to make operations easier.

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Customer centricity In this competitive age, transformation from network centric to customer centric operations is critical.

Clear and transparent bill: The monthly bill is one of the most important — sometimes the only — communications which is assured to be read by customers.

Hence, the monthly bill can be used to communicate key information, to cross-sell or up-sell offers and to create and promote the brand.

Most customer complaints and issues arise out of billing. A simple, clear and converged bill can eliminate many issues and can not only generate huge savings in customer service cost but also increase customer satisfaction and loyalty.

A billing system should provide a friendly and intuitive graphical user interface to define the bill format based on customer profile.

Payment model: Customers expect flexibility in their payment model. For each of the services, they should be provided with the options to choose either a prepaid or post-paid or hybrid account. They also expect that payment schedule should meet with their needs.

In addition, they expect to perform on-demand rating and bill generation to choose from pre-pay to postpay to now-pay.

Bill shock prevention: Customers do not expect any surprises and expect real time usages and balance updates. The charging and billing system should provide flexible notification capabilities to inform customers on different threshold conditions.

Do-it-yourself: Customers would like to define and choose their own plans instead of choosing from the predefined offers. The charging and billing system should provide do-it-yourself capability to allow subscribers to choose their voice minutes, messages and data amount. Such DIY packages would create the interest and loyalty among subscribers.

An online rating, charging and billing system which puts business agility, innovation, operational agility and customer centricity at its core would help service providers sail through and surf the digital wave. Q Global Telecoms Business May/June 2015 59

CFO roundtable We asked three leading CFOs — all of operators with substantial interests in emerging markets — about their attitude to mobile payment services. These are their answers

Mobile money and its financial implications for operators: leading CFOs give their views What is the best financial argument for a company offering mobile money services?

John Tombleson, Safaricom: If a company is suc-

John Tombleson CFO, Safaricom

cessful in launching mobile money services, or more specifically payment services, then eventually there is additive profit to the bottom line. Once a company is successful, such as Safaricom has been, 20% of our revenue comes from MPesa, then there is definitely an excellent return on investment.

Andrew Davies, VimpelCom: There is not one single

Andrew Davies CFO, VimpelCom

Brett Goschen CFO, MTN

financial argument. However for financial services to be successful, it should drive its own revenues. Telcos are well placed to achieve this due to its established billing relationship with the customer, the many care and sales touch points it has, and uniquely in developing countries where many people have a mobile but no banking relationship.

Mobile money drives direct revenue in the form of services fees, transactions commissions, and even interest for more sophisticated products. Mobile money users tend to stay with telcos longer than nonusers — thereby lowering churn — and generated higher data ARPU. Thus they create greater long term revenue for the operator.

Brett Goschen, MTN: The additional revenue

stream at acceptable margins is the main driver and in this regard mobile money already accounts for 17% of our Uganda operation’s total revenues with growing margins.

A number of our other operations, after a slow start, are also now progressing well with mobile money customer and revenue growth. For our subscribers, many of whom do not have access to traditional banking channels, it provides a convenient, secure and inexpensive way to access financial services and conduct transactions they would not otherwise have access to.

What do you see as the main benefits (or potential benefits) to your company that arise from offering mobile money services — including higher revenues, lower churn, more loyalty and so on?

Tombleson: The biggest fallacy I often hear is that mobile money is for developing countries rather than developed countries, and that mobile money is for the unbanked. This is a very, very convenient payment service, and generally people with a bank 60 Global Telecoms Business May/June 2015

account are the ones who make most of the payments in a country — 80% of Safaricom’s MPesa revenue comes from customers who also have a bank account. It’s just that you do not have to have a bank account to participate.

Davies: Higher revenues, lower churn and loyalty are all the key benefits — however this is for both our consumer activity, as well as our B2B engagement as we engage customers in newer services.

On average, churn levels are half or less for MFS users versus non-MFS users, and data consumption is much higher. MFS can offer the platform to drive the overall customer digital experience leading to newer services. MFS offers also significant cost savings for the end user and the operator itself; for example top ups or recharges are much lower and more convenient for everyone involved if done on line rather than via a visit to a retail store.

Goschen: Yes, higher revenues, lower churn and

loyalty are key benefits however over the medium and longer terms, we also believe that mobile financial services will be a key enabler for growing other new revenue streams such digital services, e-commerce, solutions to SMEs etc. Also provides some opportunity to optimise the prepaid airtime distribution model.

What are the challenges that a CFO has to address before a company can offer mobile money services — including licensing, risk management and so on?

Tombleson: We are moving real money from person to person, or person to business, or business to person, or business to business and the controls need to be bullet proof. In Safaricom’s instance, we facilitate $1.5 billion of payments every month, and if you leave a control crack open, someone will take advantage of that.

Davies: Financial risk management that was unfamiliar to most telcos becomes important.

Banks traditionally have lower returns on capital than telcos do, so CFOs must be comfortable with lower returns as they move more into banking, and the measures normally applied in a telco need to be adjusted. However leveraging the mobile as a digital channel and staying mainly on the distribution side of marketing financial services addresses a number of these issues.

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CFO roundtable The CFO also needs to understand payment flows — such as float balances — and needs to have a completely transparent view of cash-in and cash-out in the MFS portfolio. Once this has been completed it is essential to identify areas of exposure if any and that appropriate measures are taken to optimise risks, not only seeking ways to reduce risks without first understanding the value generation part/upside.

The CFO has to ensure processes are established between central and local treasury teams for getting the most out of our relationships with financial institutions.

Goschen: The model we adapt is very much dependent on the specific country regulatory requirements and can either be a mobile operator led model, a bank led model or a hybrid of the two. All three models are in operation across our markets.

We have however seen a faster take up in services the in markets that lean more towards the mobile operator led model. However that said, as we move to onto some of our key upcoming services, such as international remittance, digital payment, saving or lending, we will require bank partners to bring us the necessary license and expertise.

Goschen: Licensing or obtaining the required regulatory approvals is usually the first and most significant challenge. Given the size of the mobile operators in most of our markets, there is often some resistance from the traditional banking community as well as concerns from some central bankers as to their having sufficient oversight over mobile money transactions.

Usually significant engagement is required to allay their concerns. Risk management, the control systems and reporting to address has to be a priority and needs to be bedded down and thoroughly tested before launch.

New sets of skills and expertise have to be attained and developed, some examples being in the area of anti-money laundering, or more complex settlement procedures — remittances — involving foreign currencies or the vast ecosystem of partners required.

What are the long-term challenges that your company is addressing — such as interworking between different networks or across borders?

Is a relationship with a traditional financial institution — a bank or a card company — necessary or desirable for a mobile operator that offers mobile money services?

Tombleson: We are offering a payment service which

we call MPesa, and as such we have a core banking platform similar to that a bank would have. The difference is, our unique account number is the mobile number — which is a globally unique number.

We could also offer a card as an additional form factor to access the payment system, except that this requires another piece of equipment in the chain such as a POS terminal or an ATM machine.

And in the future I would expect the mobile phone would be used to facilitate a payment from the luxury of your lounge at home, and a card could be used to make a payment on an international e-commerce site.

But either way, the money comes out of the same MPesa account.

Davies: Yes. It is generally necessary to piggyback on the existing national banking infrastructure to offer mobile money services no matter which model is chosen by the mobile operator.

The decisions on partnering with traditional financial institutions usually turns on one of two factors — regulation and revenue potential. For example, in some countries central bank regulations restrict the role non-banks — that is, telcos — can play in mobile money. As result, partnering in these countries is a necessity.

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Tombleson: Every challenge is really an opportunity,

which we have to knock off one by one. MPesa started as a person to person payment mechanism; it evolved into people being able to pay for utilities and so on; and now we are targeting the cash to retail segment, and retail to FMCG suppliers.

We believe we have made a fast start to his new opportunity and in March this year we converted 5% of the retail cash business. Traditionally 95% of retail purchases in Kenya would have been done using cash, now it stands at 90%. The social benefits of converting cash to electronic is immense.

Our next challenge will be facilitating payments to governments and counties, and winning more of the international remittances.

Davies: For financial services, the first step is in establishing the new services, interworking is an element that needs to be considered, however until there is a working model in place, there is a real risk of services getting caught up in discussions.

Vimpelcom has always been open to discussions to support local interworking, and we have been working to find the best service in the countries we operate. For example, our services in Russia and Italy are enabled to work in the traditional banking systems, however in Pakistan we are working closely with other mobile financial services providers to allow money to flow from one operator to another.

Inter-working — interoperability between operators — is key to create scalability and allows all to be a large market participant. Inter-working between banks, operators and other players in the value chain creating truly global products requires engaging multiple regulators, but if delivered correctly can potentially bring more gains to all participants.

Goschen: We are working towards an open system as described however for us, I would say that that for us, the most significant challenge will be to ensure we continue to develop our offerings and remain innovative and flexible. Continuous engagement with the regulators will also be required to maintain and enhance a positive regulatory environment so that the mobile financial services keeps developing. Q Global Telecoms Business May/June 2015 61

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innovationawards 2015

GTB Innovation Awards 2015: results in full

Jean Philbert Nsengimana, the minister of youth and ICT of Rwanda, receives Hamadoun Touré’s award from GTB editor Alan Burkitt-Gray

Hamadoun Touré, former secretary-general of ITU, wins special award at Global Telecoms Business Innovation Awards Hamadoun Touré, secretary-general of the International Telecommunication Union for eight years until December 2014, has won a special editor’s award for his contribution to the industry from Global Telecoms Business.

The award was presented as part of the Global Telecoms Business Innovation Awards 2015, presented in London on 13 May 2015.

Alan Burkitt-Gray, editor of Global Telecoms Business, said that Touré “has made an outstanding contribution to telecoms, but also to the application of telecoms in advancing the world’s economy — especially for those in emerging markets and poorer countries — as the leader of one of the world’s leading international institutions”.

Touré’s award was collected on his behalf by Jean Philbert Nsengimana, the minister of youth and ICT of Rwanda, who was also a guest at the Innovation Awards dinner. The dinner was attended by 300 distinguished people from the telecoms industry worldwide. Last-minute travel difficulties meant that Touré was unable to attend in person.

Touré also played a key role in creating the Broadband Commission, including senior executives from vendors and operators such as Cisco, Ericsson, Digicel and many other companies, and from the political world — people such as the president of Rwanda, Paul Kagame.

Fixed network infrastructure innovation

Virtual network builds with an API

Growing core capacity to match access demand

100G Ethernet network interface device in customer trial Winners: Verizon Partner Solutions and Canoga Perkins

Winners: BT and Huawei

Technology for the world’s first 3-terabits a second real-time superchannel innovation, applied to upgrade BT’s live Belfast-Dublin network to 400 gigabits a second.

In field trials in June 2014 the fastest speeds using commercial grade hardware in a real-world operating environment were achieved on fibre linking Ipswich and London.

In December 2014 the joint project team brought one of the key technologies — 16QAM — into the live network by delivering Europe’s first live 400G commercial link, between Belfast and Dublin on BT Ireland’s network.

100 gigabits a second traffic over Verizon’s metro ethernet network, between wholesale customer Splice Communications and data centre provider CyrusOne. Using the first 100 gigabits a second ethernet network interface device in the industry, Verizon provided a 100 gigabits a second switched ethernet connection between its wholesale customer, Splice Communications, and CyrusOne, a data centre provider, over nearly five miles in Dallas.

Verizon proved that 100 gigabit traffic can be transported over its switched metro ethernet network.

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Winners: Megaport and Brocade 100% software-based network and communications services platform. Services include internet exchange peering and private on-demand elastic connectivity.

All services, features and lifecycle functions are created, modified and deleted in real time from a portal, a mobile app — on Android or iOS — or a RESTful API between dozens of data centres worldwide.

Megaport’s software is backed by a Brocade hardware deployment across all data centres. The project resulted in multiple service offerings that were then beta-tested by Megaport customers through the third quarter of 2014.

Megaport and Brocade representatives were unable to attend the dinner

Next-generation network for UK research and education Winners: Jisc and SSE Enterprise Telecoms

Janet 6 education and research network running on 6,500 kilometres of dark fibre at 100 gigabits a second with capacity to scale up to 1,000 gigabits.

SSE Enterprise Telecoms has enabled Jisc, which provides networking services to research and education centres in the UK, to build and launch its own next-generation network. The network supports nearly 1,000 facilities and institutions in more than 30 sites.

Jisc now has complete control to provision optical, ethernet and IP services without fear of capacity shortages or breakages.

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Co-sponsored feature: TeliaSonera International Carrier Millions of Turkcell customers who have LTE-capable phones are yet to experience 4G at their home country, Turkey. TeliaSonera International Carrier’s IPX means they can use 4G when roaming

Turkcell’s customers experience 4G roaming with TSIC’s IPX Bernd Hoogkamp, TeliaSonera International Carrier: Making the transition between technology platforms is something engineers don’t do. End users do that.

www.turkcell.com.tr www.teliasoneraic.com

A virtualised solution for 4G mobile roaming has won a Global Telecoms Business Innovation Award for Wholesale Service for Turkcell and TeliaSonera International Carrier.

The service is aimed at Turkcell’s customers who will use 4G roaming services when they are outside the country.

Ten million Turks travel abroad each year and also Turkey is the world’s sixth most popular tourist destination, hosting 37 million international tourists each year, a $25 billion industry, “We were approached by Turkcell, which wanted its high-value roaming customers to have 4G while they are roaming,” says Bernd Hoogkamp, TeliaSonera International Carrier’s head of products, voice and mobile.

The opportunity for Turkcell lies in the fact that about 25% of its smartphone users already have smartphones that are 4G-capable. As TSIC points out, “Making the transition between technology platforms is something engineers don’t do. End users do that. They choose smartphones, change behaviours and select subscriptions. In short, it is the end-users who make the change happen.”

Says Hoogkamp: “We have provided a virtual Diameter solution to Turkcell, connecting to the core networks and providing the possibility of 4G service abroad.

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TSIC provides the technology for 4G roaming, but Turkcell negotiates the roaming agreements with individual operators in each country. Turkcell had 25 countries opened for testing purposes for 4G roaming

by December 2014. As of 10 June, Turkcell offers 4G roaming in 35 countries through its cooperation with 42 operators thanks to TSIC’s IPX. Turkcell’s home network has an evolved packet core test environment containing the mobile management entity and the relevant home subscriber servers.

TSIC’s IPX provided a direct connection between these units and TSIC’s Diameter routing systems.

Furthermore, the home network had GTPv2 data connections into TSIC’s IPX. TSIC was able to directly connect to other mobile networks.

TSIC has two Diameter signalling controllers, one in Frankfurt and one in Stockholm, “with more in the planning”, says Hoogkamp. The services are being expanded because “4G is becoming much more significant”, he explains. “It’s not only Turkcell. The amount of data generated by 4G roaming is exceeding expectations.”

As a result TSIC is upgrading its data roaming facilities, especially in the Nordics, where the company is implementing 10 gigabits a second interfaces to support the massive uptake in 4G data roaming. But LTE roaming is bringing new challenges — apart from the sheer volume of data that end-users are consuming. “It’s more complex in the sense that it’s a new technology, and carriers need to agree on the peering infrastructure. And all mobile network operators need to agree on the business conditions.”

There are other challenges, he adds. Even though “any new smartphone today will have 4G”, there is not enough international coordination on frequencies used for 4G. “Networks around the globe are using different frequencies,” says Hoogkamp, “That’s one of the reasons 4G roaming has had a slow start,” he adds.

The next challenge, which TSIC is addressing, is voice over LTE. “The majority of operators today focus on data,” says Hoogkamp. “They are using circuit-switched fallback for voice, meaning that voice calls automatically revert to TDM service”.

“This will change,” says Hoogkamp, “operators are starting to offer VoLTE, and with that they will provide VoLTE roaming”. Q Global Telecoms Business May/June 2015 63

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innovationawards 2015 Integrated inventory to support rapid FTTP service provisioning Winners: Chorus and GE Chorus and GE delivers innovative standards-based integrated inventory solution to enable rapid turnaround of service provisioning requests for FTTP. To support the ultrafast broadband deployments in New Zealand that Chorus won in 2011, Chorus needed to deploy an innovative integrated fibre inventory to enable delivery of fast and efficient services to consumers.

As part of the ongoing deployment of the ultra-fast broadband initiative in New Zealand Chorus needed to evolve its systems and process to support and automate fibre based provisioning.

Following the successful deployment of Comptel’s service fulfilment solutions the second phase of the project focused on a full ordering stack including integrated inventory.

GE’s Smallworld physical inventory has been in use at Chorus since 1999. Chorus implemented Comptel Fulfilment in 2013 and worked with

GE and Comptel to proactively develop a solution integrating their systems to meet provisioning and integrated inventory requirements. GE and Comptel collaborated to create a joint product solution meeting these needs based on TM Forum standards.

The goal is to enable requests for service to be automatically processed.

This means that the order can be processed, instructions issued to field crews to install the fibre and the service activated with minimal manual processes and handovers. The integrated inventory went live in late 2014, with the end-to-end provisioning live in early 2015.

This has delivered benefits in quality, speed, and customer experience including: Q generating customer FTTH connection details from Smallworld enforces a regime of quality physical network inventory records; Q with quality records exposed to

customers they know with confidence when ultrafast broadband will be available for them to order; Q accurate physical network inventory records lead to greater technician efficiency in the field, with less time spent clarifying which customer connects to which distribution point; Q less time spent on records clarification equals faster install times for customers; and

Q providing the foundations for improved fault resolution and asset maintenance.

Gemma Cleland from Transfield Services said the field force had this to say about the implementation. “The feedback I have received so far from the field seems to be very positive. They are especially happy with the additional inventory information that they are now getting provided.”

London-Johannesburg low-latency service

Top speed media-smart gateway

Wireless network infrastructure innovation

Build-operate-transfer model for LTE in Rwanda

Winners: Perseus and Ciena

Winners: Swisscom and SoftAtHome

Silicon South economy transformed by gigabit services

Winners: Olleh Rwanda Networks and Nokia Networks

Winners: C Spire Wireless and Adtran

Low-latency connection — only 158.41 milliseconds round-trip delay — between London and Johannesburg Stock Exchange, using existing subsea cable route.

A few years ago, connectivity to South Africa was so poor that the Johannesburg Stock Exchange — home to companies such as SAB Miller, BHP Billiton and Anglo-American —hosted its exchange infrastructure in London.

Now it has moved its exchange matching engine to South Africa. Brought online in late 2014, the Perseus LiquidPath link provides traders and commodity brokers worldwide a new way to access one of the world’s key emerging markets.

Swisscom Internet-Box providing consumers with multiple simultaneous interfaces — ADSL, VDSL2, vectoring, LTE and fibre — and offering 802.11ac wifi service.

With core software powered by SoftAtHome’s operating platform, the Swisscom Internet-Box offers users speeds up to one gigabit a second.

It has seamless support for multiple and simultaneous high-speed interfaces, making it able to deliver the fastest broadband to the widest range of homes in Switzerland. It can generate guest wifi credentials and has parental controls.

The high-definition telephone service can connect up to four wireless DECT devices.

Third parties can add applications and other features.

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Gigabit network for HDTV, security, wireless and other next-generation services to consumers and businesses to build new economic future for central Mississippi.

C Spire — which provides mobile communications, internet access and data and cloud services to nearly a million subscribers in four US states — launched its gigabit technology initiative to support continuous growth.

It partnered with Adtran to deliver ultraflexible, high-capacity, deep fibre solutions that it required, including fixed-line gigabit services to support its fibre to the home initiative.

Collaboration with Korea Telecom to build first commercial LTE network in Rwanda, covering 95% of the population, using a wholesale model.

Olleh Rwanda Networks is a joint venture between the Rwandan government and Korea Telecom that is working with Nokia to build Rwanda’s first commercial LTE network, operating on a wholesale model and covering 95% of the population.

Nokia is building the LTE network on a build-operate-transfer model, using FDD LTE, though the company had almost zero initial presence in Rwanda. Local staff are being trained so they can take over the network in a phased manner after three years.

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innovationawards 2015 Accelerating mobile broadband monetisation and service agility Winners: Etisalat Egypt and Ericsson Etisalat Egypt targets ‘New Day — New Idea’ enabled by Ericsson’s integrated policy and charging for agile monetisation with measurable results.

Accelerating mobile broadband monetization and service agility, Ericsson and Etisalat Egypt completed a project providing Etisalat subscribers with more flexible on-demand data subscriptions for mobile broadband and ADSL services.

Etisalat has significantly reduced time to market and opex, and greatly improved revenues and customer satisfaction.

The challenge: Etisalat Egypt had strong growth plans for its mobile broadband services in the face of arduous competition and users’ demands for greater control, but was hampered by duplicated/inefficient functions for OSS/BSS. Etisalat understood that greater service agility was required to realise its vision of ‘New Day — New Idea’, to be more

efficient, improve time to market, and deliver on customer expectations for transparency and control.

Market realities:

Massive scale pioneering self-aware optimising antenna

Pre-5G massive MIMO project

Q Etisalat is third entrant in competitive market; Q highly-penetrated market at 120%; Q low, declining ARPU; Q services revenue is flat to declining; shifting from voice to data; Q low enterprise customer penetration; and Q customers increasingly demanding cost controls.

The solution: Etisalat Egypt employed Ericsson’s integrated policy and charging — EIPC — solution to enhance services for both mobile broadband and ADSL internet subscribers, allowing them to merge services into flexible bundles and access the internet from different devices with the same subscription fee.

EIPC is a scalable, flexible BSS

Winners: China Mobile and ZTE

Winners: China Telecom Beijing Research Institute and Huawei

Greater efficiencies in antenna engineering to improve LTE coverage as network increases from 120,000 to 250,000 base stations.

By the end of 2014, China Telecom had completed LTE network deployment of 120,000 sites covering over 150 cities. In 2015 deployment will increase to 250,000 sites covering over 300 cities.

The China Telecom Beijing Research Institute engaged with Huawei to resolve all challenges, resulting in the self-aware and optimising antenna solution. During initial deployments, applications gave labour savings of about 20%.

Massive MIMO solution, using multiantenna technology (64-port/128 antenna), maximising use of existing site locations and spectrum resources.

In November 2014, in Shenzhen, China, ZTE successfully completed the precommercial field test of the world’s first pre-5G 3D/massive MIMO base stations in partnership with China Mobile for a high building coverage scenario.

This further demonstrated the superiority of the new technology over existing intelligent antennas in complicated multi-path urban and indoor environments, as well as open rural areas.

66 Global Telecoms Business Innovation Awards 2015

solution that delivers decoupling, configurability, convergent real-time charging and policy support, a strong user-experience focus and reduced total

cost of ownership. It thereby creates an invaluable competitive advantage for Etisalat in a rapidly evolving marketplace.

Transforming mobile service delivery in Indonesia

Self-organising network joint innovation in the Philippines

Winners: XL Axiata and Cisco

Winners: Globe Telecom and Huawei

Virtualised evolved packet core to support all packet core services, including 4G, 3G, 2G, wifi and small cell networks into a single solution.

XL Axiata had a key project to operationalise its mobile core, allowing resources to be virtualised and used on demand.

It tested Cisco’s unified computing system servers as a compute platform to deploy Cisco VPC and Gateway GPRS support node.

Cisco VPC combines all packet core services, for 4G, 3G, 2G, wifi and small cell networks, into a single solution, providing those network functions as virtualised services.

Mobile broadband network modernisation programme using SingleSON solution on more than 120,000 GSM, 50,000 UMTS and 20,000 LTE base stations.

Globe deployed the SingleSON solution on its live network in 2014, the objective being to modernise network operation and maintenance and help to overcome the challenges brought about by the rapid development of mobile broadband.

Existing operation and maintenance methods and limited human resources offer challenges to operators.

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innovationawards 2015 Macro cell-small cell coordinated indoor active distribution project

World’s first fully virtualised VoLTE solution Winners: Vip Mobile, Metaswitch Networks and OpenCloud

Winners: China Telecom and ZTE

Wholesale service innovation

Centralised traffic steering service

Automating multi-vendor ethernet provisioning for mobile backhaul

Winners: Vodafone Netherlands and Vodafone Roaming Service

Winners: Mid-Atlantic Broadband Communities and Cyan

Large-scale CDMA/LTE dual-mode ethernet based macro-cell-small-cell coordinated indoor active distribution system for indoor coverage.

The Qcell solution uses ethernet cable to replace the feeder, and supports CDMA/FDDLTE/TDD-LTE simultaneously, and can realise deep convergence with the macro coverage.

The simplified architecture effectively reduces deployment difficulty and costs.

Qcell supports macro-cell-small-cell coordination, carrier aggregation and cell combination to create a high performance hetnet network. The simplified networking reduces deployment time by 60%.

Virtualised VoLTE — with a VoLTE stack running on a live LTE network using VoLTE handsets with virtualised evolved packet core.

Telekom Austria, which owns Vip Mobile in Serbia, had previously conducted trials of virtualised network functions individually.

However, with this project it chose to virtualise the entire core network production chain of a VoLTE service using the live LTE network and VoLTE handsets.

Through this successful deployment, Telekom Austria together with vendors have proven agility of NFV.

Regional metro network using SDN to connect broadband, wholesale and cloud connectivity needs of wireless carriers and enterprises in southern Virginia.

Mid-Atlantic Broadband Communities operates a Sonet/TDM transport network, and required a solution that could scale with mobile backhaul, provide ease of network operations, and configure third-party devices.

Cyan’s Blue Planet open SDN orchestration platform enables MBC to simplify, manage and orchestrate multi-vendor networks to achieve end-to-end network control, service automation and service agility.

Minimising outbound cost and maximising inbound revenue with a full-service roaming hub for all wholesale roaming services of 21 group operators.

Teams from Vodafone Netherlands and VRS in Spain worked together to migrate all the signalling traffic of Vodafone Netherlands to the VRS platform within a week. Traffic steering parameters were agreed and finetuned by both teams and centralised steering could commence within days of the migration.

VRS was achieving a 96% internalisation rate of Vodafone Netherlands traffic, representing €2.2 million of savings on cost.

Innovation 4G roaming service Winners: Turkcell and TeliaSonera International Carrier Enabling the 4G change ahead of 4G rollout, Turkcell’s IPX-based Diameter roaming configuration supports end users in a first not seen outside Turkey.

Ten million Turks travel abroad each year and as the world’s sixth most popular destination Turkey hosts 37 million international tourists each year — a $25 billion industry. This project delivered: Q 4G experience to Turkish roamers from summer 2014; and Q A day one 4G experience for tourists roaming in Turkey.

Making the transition between technology platforms is something engineers don’t do. End users do that.

They choose smartphones, change behaviour and select subscriptions. In short, it is the end-users who make the change happen. With 4G enabled phones in their hands by 2013, Turkcell’s end user expectations had rocketed and outstripped the slow pace

of Turkey’s 4G-spectrum auction. It begged the question: could they benefit from 4G roaming when Turkcell, the home MNO, was not yet 4G? Turkcell partnered with TSIC to fix the 4G roaming puzzle. Turkcell’s home network had an evolved packet core test environment containing the mobile management entity (MME) and the relevant home subscriber servers (HSS). But it had no evolved UMTS radio access network (e-UTRAN). TSIC’s IPX provided direct connection between these units and TSIC’s Diameter routing systems. Furthermore, the home network had GRX (GPRS Roaming eXchange) connections into the TSIC IPX. TSIC was able to directly connect to other MNOs, including the visited network. Turkcell had 25 countries open and tested for 4G roaming by December 2014.

Commenting on this new way of solving user expectations, Hande Asik, international corporate communications,

Turkcell, said: “While travelling to 4G-enabled countries, our subscribers can today elect to use the high speed data downloads of 4G. Turkcell uses TeliaSonera International Carrier’s IPX network to establish secure and high performance 4G roaming services to subscribers in visited networks, even though Turkey has yet to deliver 4G technology domestically.”

Matthew Jones, head of mobile

solutions at TeliaSonera International Carrier, said: “I’m proud that Turkcell selected our IPX-based services and am impressed with how our teams worked together to enable a 4G roaming service for a non-4G network operator … It’s a first for TSIC and Turkcell, an excellent example of innovation and contributes to the notion of ‘anywhereisation’ – the demand to share the moment anytime, anywhere, with anyone, on any device.”

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Global Telecoms Business Innovation Awards 2015 67

Co-sponsored feature: PCCW Global PCCW Global and Crypteia Networks cyber security services wins innovation award for using big data analytics, machine learning technology, and global threat intelligence to proactively defend client enterprise networks around the world. Crypteia Networks’ CEO, Yiannis Giokas, explains

How to beat the cyber attacks worldwide by identifying threats on a global scale Q A digital society does not pay as adequate atten-

tion today to safeguarding its online activities (also called the “weak link”).

Giokas explains that while publicly visible attacks can have embarrassing and reputational impact on an organisation, it often translates into significant financial and liability impact. The Target Stores attack, for example, cost the company more than $162 million, not to mention the jobs of many senior company officials.

According to PricewaterhouseCoopers, the number of reported security incidents increased by 48% in 2014 over the previous year, to 42.8 million or the equivalent of 120,000 attacks a day.

Yiannis Giokas: As cyber threats become more sophisticated and prevalent, our clients increasingly demand better and more responsive protections. The combination of PCCW Global’s network footprint with Crypteia’s MOREAL threat monitoring capabilities now delivers the market’s most comprehensive cyber security solution.

Addressing the threat

Today’s networked enterprise is at risk Enterprise infrastructures are more at risk today than ever before, says Yiannis Giokas, CEO and founder of Crypteia Networks, PCCW Global’s cyber security subsidiary based in Athens, Greece. But by how much? Do corporate names like Sony Pictures, Target Stores and Deutsche Telekom ring a bell?

“Every year companies are spending more than $67 billion on security solutions and services,” he says, quoting figures from the industry analyst firm Gartner Group. “But cyber attacks are still leading to more than $4 trillion of damage.”

This is happening due to four main reasons, says Giokas, who set up Crypteia Networks in 2011. The company won a Global Telecoms Business Innovation Award — along with PCCW Global — in May 2015 for its use of big data analytics, machine learning technology, and global threat intelligence to proactively protect enterprise networks around the world.

According to Giokas: Q Optimising the security infrastructure and maintaining that posture is nearly impossible to achieve; Q A unified process to exchange zero-day security vulnerabilities does not exist (yet); Q Threat actors have increasingly malicious motives as to achieve destructive and financial impact; and 68 Global Telecoms Business May/June 2015

So where are the threats coming from? “Threats are classified based on the goal of the attack,” says Giokas. “Financial-driven attacks typically are made by cyber thieves; service disruption attacks (that can impact web site performance and other online activities) usually are initiated by hacktivists or competitors; and data leakage attacks can derive from multiple sources, such as cyber criminals, nation states, competitors, and so on.”

The GTB Innovation Awards nomination recognises the collaboration between the global communications service provider PCCW Global and cyber security services experts Crypteia Networks — a wholly-owned subsidiary of PCCW Global — to deliver self-learning network security and threat identification on a global scale.

The solution – MOREAL According to the nomination, PCCW Global enterprises around the world can now protect their organisations from malicious attacks by adopting Crypteia’s MOREAL threat management service, allowing them to benefit from having access to a truly global threat intelligence monitor and database. The solution combines real-time network analytics and machine learning with enterprise networking expertise to deliver a unique approach to network security.

MOREAL is a cloud-based network security solution for enterprises that is able to proactively predict, discover and identify network security threats by mining the data activity logs produced by connected network elements, such as firewalls, routers, intrusion detection tools and other security devices, in order to evaluate patterns and behaviours consistent with a potential cyber attack.

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Co-sponsored feature: PCCW Global He continues: “Within this scope, real-time analytics are crucial for today’s environments. Furthermore, it is true that people in their day-to-day life are utilising connected systems that are potentially exposed to exploitable threats. Consequently, it is critical to have the ability to understand, monitor and collect user behaviour in order to accurately position the infrastructure in an optimal secure posture. But of course, we shouldn’t re-invent the wheel each time a new user or a new deployment is made, and that is where machine learning is coming into the picture.”

The algorithms can identify similarities and predictive behaviours. Feedback helps to identify behaviour which is seen to be threatening. “MOREAL can do this lightning fast and even prevent them before they happen,” says Giokas.

Crypteia’s MOREAL is able to evaluate patterns and behaviours from not just a single enterprise but from the entire network, and can parse the data and threat activities by region, industry, and other segments

www.pccwglobal.com See a demo of MOREAL online at www.crypteianetworks.com

Most security applications and services in the market rely on recognising known vulnerabilities and exploits rather than identifying new or constantly changing threats. “This is why MOREAL has become an extremely powerful tool for enterprises, as it leverages existing data in the network to provide usable information to the enterprise via a simple dashboard, whilst continually evolving to combat emerging threats,” says Giokas.

The latest version of MOREAL was launched in May 2015, and became available on a global scale via the PCCW Global communications network.

The operator’s network extends to 3,000 cities and 140 countries around the world, enabling MOREAL to capture and mine data traffic patterns worldwide.

In this way, the solution is able to evaluate patterns and behaviours from not just a single enterprise but from the entire network, and can parse the data and threat activities by region, industry, and other segments, delivering to clients actionable information more relevant to their own ecosystem. As a result, PCCW Global and Crypteia Networks are using their combined strengths to deliver a network security solution which for the first time is capable of evolving as rapidly as the network threats it is designed to combat.

Giokas adds: “Threats are becoming more and more sophisticated, so within this scope, PCCW Global, through the Crypteia Networks acquisition, wanted to leverage the data science capabilities that we are offering within the cyber security domain. The MOREAL platform that we have developed is self-defining what a threat is and is not based on its data analysis and algorithmic capabilities.”

Crypteia Networks was founded in order to redefine the way security operation centres function.

“We were a hungry cybersecurity start-up and our core team had a strong security and software development background that led to the creation of the MOREAL threat intelligence platform,” he says.

Giokas explains the role of real-time network analytics and machine learning in this approach. “In the security domain, the ability to have a holistic view of your network and the threats that you are exposed to — based on the importance of your assets — is very important.”

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Security management moves to the cloud Crypteia Networks ensures that a cloud-based network security management solution remains secure by leveraging the fundamental benefits of the cloud itself. “Cloud infrastructure is operated by a large number of engineers with different backgrounds — people in areas such as development operations, IT, network, security and so on, with vast experience in environments such as PCCW Global, Amazon, SoftLayer, Microsoft, Google and others. They outnumber and have more experience than most corporations’ IT and security teams,” Giokas says.

“Additionally, cloud computing is eliminating a number of limitations that on-premise solutions have, such as power outages, CPU/RAM/storage faults, and of course CAPEX costs.”

He adds: “The same security measures that someone would take in an on-premise solution are today used in cloud environments. Thus, a cloud approach today should be considered an extension of the LAN and not a different domain with different rules.”

Giokas explains how quickly the solution can adapt to new or constantly changing threats. “The MOREAL threat intelligence platform is aggregating threat-related knowledge constantly and in real-time, combining it with the outcome of the analysis we do in PCCW Global’s IP network, as well as our customers’ networks, so our visibility in the evolving threat landscape is constantly growing”.

“On top of that, MOREAL’s machine-learning capabilities enable it to self-define whether legitimate lookalike behaviours are actually legit or not — and this constant intelligence is the key differentiator that makes the PCCW Global solution fast and accurate.”

But there is something else: “Our security operation centres and our security research teams are constantly adding knowledge into our threat database, so our adaptability to the evolution of threats is virtually in real-time,” he says.

MOREAL, as a cloud-based solution, is available in all geographic sectors where PCCW Global is offering its services. Crypteia Networks, as part of PCCW Global, is offering its services both to PCCW Global customers and to others, as well via its channel partners. Q Global Telecoms Business May/June 2015 69

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BUSINESS

innovationawards 2015 Implementing LiveStream Protection against Perform video streaming distributed denial of Winners: Abu Dhabi Media, service attack Deutsche Telekom and Octoshape

Winners: Mobistar and Orange

Direct, high-capacity international fibre connectivity to Somalia Winners: Dalkom and WIOCC

Business service innovation

Virtualising configure-ondemand IaaS Winners: Aspider-NGI, Cisco and Telindus

Global delivery of live cloud-based high-quality OTT content ensuring reliable connectivity to a variety of end devices.

Abu Dhabi Media needed support with the global delivery of its live content that would ensure reliable connectivity to a variety of end devices.

This project is an example of how cloudbased, high-quality OTT services can be deployed within a tight time frame providing a global reach, currently unequalled on the market today.

Partnering with Deutsche Telekom BDI has enabled Abu Dhabi Media to strengthen its position on the market by offering a unique service to its customers that stands for quality and reliability.

Network traffic monitored for distributed denial of service attacks and clients notified in case of attack, so they can launch mitigation and reroute traffic to be cleaned.

In December 2014, Mobistar suffered four DDoS attacks in less than 24 hours successfully managed by our Internet provider. This DDoS attack caused connection congestion and directly impacted Mobistar customers.

Orange evaluated the situation and successfully handled the congestion attacks.

Resolving the challenge was complex because the end-customer solution included a partially outsourced service from a third party supplier.

Subsea connection to the coast of Somalia, new landing station and state of the art data centre in Mogadishu with fibre-optic connectivity into the city.

Working in partnership, WIOCC and local operator Dalkom Somalia have fundamentally changed Somalia’s international connectivity landscape, dramatically impacting one of the last corners of Africa without direct fibre-optic connectivity. WIOCC landed the high-capacity EASSy submarine cable on the coast of Somalia and connected it to a new landing station and state-of-the-art data centre in Mogadishu. Dalkom is now extending fibre connectivity into Mogadishu.

Virtualised packet core to give flexibility and service agility to scalable cloud-based mobile virtual network services.

Customers of Aspider, a mobile virtual network enabler for consumer and M2M mobile services, currently use configure-on-demand IaaS. Cisco collaborated with Telindus to implement a plan to virtualise these solutions for Aspider-NGI. The Cisco virtualised packet core will give Aspider-NGI even more flexibility and service agility so its customers can implement scalable services in minutes along with redundancy levels that exceed service level requirements.

Global network threat identification for enterprises Winners: PCCW Global and Crypteia Networks PCCW Global and Crypteia Networks are using big data and machine learning to proactively protect enterprise networks around the world.

The collaboration between global communications service provider PCCW Global and Athens-based security experts Crypteia Networks delivers selflearning network security and threat identification on a global scale.

Enterprises in 170 countries can now protect their organizations from malicious attacks by adopting the Moreal threat management service and benefit from access to a truly global threat database. The solution combines real-time network analytics and machine learning with enterprise networking expertise to deliver a unique approach to network security.

Moreal is a cloud-based network security solution for enterprises which is able to proactively predict, discover

and identify network security threats by data mining the activity logs produced by connected network elements in order to evaluate patterns and behaviours consistent with a security threat.

Most security services currently in use rely on recognizing already known threats rather than new or constantly changing threats. This is why Moreal has become an extremely powerful tool for enterprises, as it leverages existing data in the network to provide usable information to the enterprise via a simple dashboard whilst continually evolving to combat emerging threats.

According to PricewaterhouseCoopers, the number of reported security incidents increased by 48% in 2014 over the previous year, to 42.8 million or the equivalent of 120,000 attacks a day. Enterprises need a solution which is able to

proactively learn and evolve in order to combat the growing number of threats, or they face a potential loss of both revenue and reputation.

The latest version of Moreal was launched in February 2014, and became available on a global scale via the PCCW Global network in October 2014. PCCW Global’s network extends to 3,000 cities and 170 countries around the world, enabling Moreal to

capture and data mine traffic patterns worldwide. In this way, the solution is able to evaluate patterns and behaviors from not just a single enterprise but from the entire PCCW Global network.

PCCW Global and Crypteia Networks are using their combined strengths to deliver a network security solution which for the first time is capable of evolving as rapidly as the network threats it is designed to combat.

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Co-sponsored feature: Ericsson Ericsson Converged Wallet solution powers next-generation mobile financial services in Peru

Ericsson and ASBANC recognised for their work toward financial inclusion in Peru

For more information on Ericsson’s Wallet platform, please visit: http://www.ericsson.com/ ourportfolio/products/wallet-platform

ASBANC, Peru’s National Bank Association, partnered with Ericsson for the design and implementation of its Mobile Money project. It stands as the country’s largest private initiative for financial inclusion and the first implementation in the world where all of the financial institutions in a country joined efforts to bring its unbanked people into the financial system.

ASBANC selected Ericsson’s Converged Wallet solution to power next-generation mobile financial services with the goal of bringing 2.1 million unbanked Peruvians on board within five years. The solution includes full systems integration in one platform that is capable of hosting all services from differ-

ent financial and commercial institutions for secure interoperability. Ericsson’s mobile wallet platform now provides ASBANC customers with a simple, functional and relevant digital experience.

With Ericsson’s mobile wallet platform, Peruvians can now easily and securely store, transfer and withdraw money using their mobile devices.

Over the next few years, Peru’s largest banking initiative will give citizens the freedom to bank with mobile phones, a dynamic that is becoming essential for billions around the world. This will help welcome Peruvians into the Networked Society, ensure ubiquitous access to mobile money, and open up new business opportunities. Q

Etisalat Egypt uses solution to offer subscribers more flexible, on-demand broadband and ADSL mobile data services

Ericsson Integrated Policy and Charging provides enhanced user experience for Etisalat Egypt customers

For more information about Ericsson’s Integrated Policy and Charging (EIPC) solution, visit http://www.ericsson.com/ ourportfolio/products/chargingand-policy

Ericsson and Etisalat Egypt’s ‘New Day — New Idea’ project provides Etisalat subscribers with more flexible on-demand data subscriptions for mobile broadband and ADSL services through enhanced service agility.

In the face of arduous competition and user demand for greater control, Etisalat Egypt had strong growth plans for its mobile broadband services. It understood that greater service agility was required to be more efficient, improve time to market, and deliver on customer expectations for transparency and control.

Etisalat Egypt deployed Ericsson’s Integrated Policy and Charging (EIPC) solution to enhance services for both mobile broadband and ADSL Internet sub-

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scribers, allowing them to merge services into flexible bundles and access the Internet from different devices with the same subscription fee. EIPC is a scalable, flexible BSS solution that delivers decoupling, configurability, convergent real-time charging and policy support, a strong user-experience focus and reduced total cost of ownership.

Through this partnership, Etisalat created an invaluable competitive advantage in a rapidly evolving marketplace. It now had the improved service agility needed to assure a flexible, seamless convergence across services, address new OTT revenue streams and give customers more control for an enhanced experience. Q Global Telecoms Business May/June 2015 71

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BUSINESS

innovationawards 2015 Nanjing e-government network Winners: Nanjing Commway and Huawei

‘Smart Nanjing’ solution using LTE for rich functions from traditional trunking to voice and video dispatching and real-time video distribution.

The Nanjing municipal government decided to invest in building a wireless broadband municipal network to provide secure and ubiquitous broadband services.

Huawei’s eLTE solution provides network coverage across all Nanjing, enabling convergence of fixed and mobile networks, integrating currently fragmented information systems.

This solution contributes to a unified information platform for public security, traffic policing, fire-fighting, medical and public health, power supplies, and hydrology to permit information sharing as well as unified video and voice dispatching.

Mobile Connect: secure digital identity and authentication

Establishment of Zain Innovation Campus (ZINC) in Jordan

Making digital app sales easy across every channel

Real-time fully managed intelligence service for roaming partners

Winners: Zain Jordan and Coventry University

Winners: Telefónica UK and CloudSense

Winners: Tata Communications and Polystar

Campus at a leading business park — in association with a UK university — to provide facilities for start-ups by young people.

In April 2014, Zain announced its intention to roll out the Zain Innovation Campus, including all the initiatives and programmes under its corporate entrepreneurship responsibility scheme.

The campus was inaugurated in October 2014 and is spread over 800 square metres in the premises of King Hussein Business Park.

The campus provides all the requirements needed by the start-ups in addition to providing teleconferencing features with 500 Startups in Silicon Valley in the US. ZINC is today the leading hub for all digital innovation coming out of Jordan.

Digital small business service so that users can optimise investments in smartphones, tablets, 4G and the cloud, with flexible bundles.

Having expanded from mobile to fixed voice and network services, Telefónica O2 wanted to offer key business apps in conjunction with existing services. It chose the CloudSense platform, a fully Salesforcenative platform, with the aim of balancing the rich functionality of the latest technologies with a simplified customer journey.

It recognised that customers begin their journey online but later would want human support. They needed to optimise investments in smartphones, tablets, 4G and the cloud.

Delivering better understanding of roaming usage and behaviour to Tata Communications’ customers and to support SLAs of VIP and corporate accounts.

RoamPulse, designed and built by Tata Communications, enables mobile network operators improve their customers’ roaming experience and improve the efficiency of their roaming business.

Polystar’s network and customer insight solution was selected to provide real-time analytics to support a new, managed reporting and monitoring service for roaming partners.

RoamPulse was successfully launched with several initial customers in 2014 and full-scale commercial rollout will take place during 2015.

Work area optimisation for telecoms engineers

UC and SIP trunking with prepaid billing Winners: Vodafone and Genband

Winners: BT and University of Essex

V-Net: NFV gets real Winners: Masergy and Overture Networks

Winners: Etisalat, Apigee and GSMA

Digital identity solution giving the end user a safe, seamless and convenient way to access digital services using their mobile phone.

Mobile Connect is a digital identity solution that offers security and convenience, consistent user interface and low barriers to entry across the digital identity ecosystem, thereby driving global scale.

For higher security authentications this may require a PIN but it’s the only PIN required and only used between end-user and operator, never the digital service provider.

The technology behind Mobile Connect is widely adopted open source technology, Open ID Connect, offering ease and consistency for digital service providers.

Field engineering tool to optimise field engineering teams’ work and reduce travelling time, improving customer service.

The iPatch tool was created for the purpose of improving a number of business objectives within BT’s field engineering teams. The University of Essex, in collaboration BT, implemented all the functionality of the tool, as well as researched and developed relevant additional advanced multi objective optimisation algorithms.

The tool was put into use May 2014 and this led to an estimated saving of £1 million

by December 2014. The reduction in travel time saved £143,000 in fuel costs. iPatch will enable a further 7% productivity uplift in 2015-16.

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Application server for hosted UC services, offering enterprise customers the opportunity to migrate from legacy premises-based PBXs to IP-based UC. Vodafone Fiji is offering enterprise customers the opportunity to migrate from legacy, premises-based, PBXs to next generation, IP-based, unified communications.

Genband worked closely with Vodafone to define an innovative payment and billing solution for the new offer, leveraging the prepaid billing system that Vodafone has deployed for its mobile network.

The solution is also integrated with Vodafone’s mobile network — making it possible for business customers to have a single number service available from multiple devices from any internet connection across the globe.

NFV-based solution as the foundation for a distribution solution to be deployed at enterprise customers’ branch offices and remote locations.

Overture and Masergy joined to develop the Project V-Net technology as the foundation for a distributed solution that can be deployed at enterprise customers’ branch offices and remote locations.

Overture’s carrier ethernet VNF includes a virtual network interface device based on Intel’s data plane development kit platform, which enables high performance networking from software-based functions.

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innovationawards 2015 Banking for the un-banked: new channels for financial inclusion Winners: Asbanc and Ericsson Ericsson and Asbanc have delivered a new mobile money banking channel to millions of Peruvians without access to traditional banking services.

Since June 2014, Ericsson and Asbanc have been working to deliver a new channel for financial inclusion in Peru.

Project highlights: Asbanc, Peru’s National Bank Association, is partnering with Ericsson for the design and implementation of its mobile money project — the country’s largest private initiative for financial inclusion.

Asbanc estimates that 2.1 million Peruvians will own and benefit from a mobile wallet by 2019. The Ericsson m-commerce solution includes the development of a mobile money platform, systems integration, learning services, managed services and support.

Background: In emerging markets, such as Peru, the development of m-commerce services is beneficial on societal and individual levels by

providing the unbanked with money accounts and opening the gates to the formal economy.

The challenge: the majority of Latin Americans — 61% — are unbanked, and there is still a high degree of poverty.

With almost half of the labour force being casually employed and cash being the most frequent method of payment, financial security is a grave concern.

The solution: Asbanc selected Ericsson’s converged wallet solution to power nextgeneration mobile financial services with a goal to bring on board 2.1 million unbanked Peruvians within five years.

Ericsson’s solution includes full systems integration in one platform capable of hosting all services from different financial and commercial institutions to secure interoperability.

The Ericsson solution additionally bridges interoperability between more than 30 financial intermediaries.

Benefits for consumers: the Ericsson wallet platform provides Peruvians with the ability to store, transfer and

Cloud management system: enabling open digital ecosystems

Easy Office cloud portal and XaaS catalogue for SME customers

Winners: BT and BearingPoint

Winners: MTS, Teligent and NF CSB

System to enable to rapid construction and operation of digital ecosystems, including life sciences and a smart city development.

The compute management system of BT Compute has been developed to enable the rapid construction and operation of digital ecosystems. It now underpins some of BT’s most innovative offerings, ranging from BT for Life Sciences through to MK:Smart — the smart city development for Milton Keynes.

Online cloud-based platform for sales of XaaS and telecoms services, with single portal and services catalogue for online ordering of services.

Easy Office, available at cloud.mts.ru, represents an online platform for sales of XaaS and telecoms services, with a single portal and services catalogue for online ordering of services, single number for authorisation and verification, a single bill for all services used, and less paper work for customers.

Services range from basic office software and antiviruses to videoconferencing and warehouse optimisation to CRM and website development, integrated into a single catalogue and made available to MTS customers across Russia. The catalogue is being developed and expanded by new applications with m-health solutions to be added soon.

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withdraw money in a completely secure environment. Over the next few years, Peruvians will increasingly have the freedom to send, spend and receive money with a mobile phone — a dynamic that is quickly becoming an essential part of life for billions of people around the world.

This will further help usher all Peruvians into the networked society, ensure ubiquitous access to mobile money, and open up new business opportunities.

Benefits for Asbanc: with the Ericsson

mobile wallet platform, Asbanc will additionally be able to: Q Discover new revenue streams.

Generate revenue through interest float, transaction fees, subscription fees, account management, and currency exchange.

Q Attract new customers. Build their customer base with Ericsson’s secure and easy-to-use platform.

Q Expand their services. Launch related payment services while offering new services to merchants and financial institutions.

Omni-channel sales growth engine

Transforming business operating model for telecom fulfilment

Winners: Sky Italia and Sigma Systems

New system for customer acquisition, extending the same customer experience across all points, with product catalogue that handles complex rules.

Sky recognized the need for a new system for customer acquisition and successfully implemented Sigma and Salesforce for the first time. Sky wanted a comprehensive omni-channel strategy extending the same customer experience across all touch points all day, every day. The solution was a centralised CPQ engine with a unique enterprise catalogue for a range of promotions and offers.

Winners: Telstra and Wipro

Telecoms fulfilment operations transformed by robotics process automation, governed by command hub and prioritisation of orders by predictive analytics.

Telstra, like most service providers, had two key business objectives: to enhance the customer experience and to reduce cost. A data analytics project was initiated to come out with predictive modelling to identify orders at order entry which are likely to fail at delivery. This helped to take proactive measures to expedite on-time fulfilment and add value to the organisation.

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BUSINESS

innovationawards 2015 Broadcast cloud for Diamond League

Quality and productivity Real-time energy innovation in call centres monitoring service

Winners: IMG and Hibernia Networks

Winners: AssisTT and SYS Technologies

Consumer service innovation

Winners: Turkcell and Asay Enerji

Maymay mobile maternal healthcare app for Myanmar Winners: Ooredoo, Koe Koe Tech and Population Services International

Cloud-based broadcast-quality HD TV distribution project with global reach to deliver supplemental feeds for international sports events.

IMG wanted to use an alternative to delivering every event separately on expensive traditional satellites. This new broadcast cloud project required distribution of eventspecific supplemental feeds in addition to the multilateral world feeds that all rights holders currently accept.

Hibernia Networks designed and engineered an individually customised mixture of technologies that not only provided a fully integrated, high quality product, but stayed well within the proposed budget, thus exceeding expectations.

Fraud management in a dynamic environment Winners: Mobily and Subex

System to resolve quality and efficiency shortcomings in call centres, with new control mechanisms to handle erroneous call rejection problems Inbox is a project that aims to resolve quality and efficiency shortcomings that directly affect the quality and human resources process in call centres.

An automatic system to eliminate all of the manual operations and user preferences was developed and tested in November 2014.

The company can individually control and follow up some tasks such as monitoring in accordance with predetermined call intervals, tracing the number of calls per assistant, preparing a monitoring list which lets more than one QCM to monitor an assistant, and preventing different QCMs to monitor the same call.

Sales through service transformation project

Smart meter system enabling corporate and enterprise customers to monitor and manage real-time energy consumption in any devices connected to the internet.

The Turkcell energy monitoring service was launched in November 2014 and is available for corporate/enterprise customers.

It is the first and only solution to monitor and manage real-time energy consumption in any devices connected to the internet; to understand the big data with a clean and simple user-interface; to compare all consumption points on worldwide map and between the time intervals; and to predict future consumption.

Synergy hosted UC, mobility and collaboration Winners: Timico and Genband

Winners: TalkTalk and Wipro

Protective measures to consolidate fraud management operations to enhance prevention for mobile and internet services, with significant financial savings.

Mobily wanted to eliminate known frauds, uncover new patterns, minimise run-time, augment internal controls and support continuous fraud management process improvement.

Subex’s ecosystem was best suited to meet the needs. The key objective of the engagement was to help Mobily build a proactive fraud management function through a combination of best practices, domain expertise, tool capabilities and analytics.

Strategic partnership delivering revenue assurance of £56 million over three quarters, with 84,000 re-contracted customers, 68,000 TV customers and 30,000 fibre customers.

A team of experts was formed to drive sales across all service campaigns of the client. The team comprised of the sales coaches, location leads and partner champions in two locations.

One of the key responsibilities of this team was to introduce this concept into the world of conventional customer support processes.

A predictive model based on customer demographics provided an intelligent way of identifying propensity to buy and the product best suited for a customer. The complex analytical back-end is supported by a simple front-end for service representatives to identify a potential customer in the initial 30 seconds of the call.

Maternal healthcare app for women in Myanmar/Burma to provide material on maternal and child health during and after pregnancy.

Maymay, which means ‘mother’ in the Myanmar language, is a maternal healthcare app, with a particular focus on pregnant women. The app bridges the mobile and health sectors to help ensure that a wealth of useful maternal, child health and wellness information is readily available to women across the country both during and after pregnancy.

Powered by Ooredoo, the app was designed by local startup Koe Koe Tech and developed in conjunction with Population Services International, a global health organisation dedicated to improving the health of people in the developing world.

Initial development of the service was made possible via funding granted from the GSMA Connected Women programme.

Feature-rich hosted voice, UC, mobility and collaboration solution allowing business customers to work, share and edit documents, video conference and communicate.

Timico Synergy breaks down the barriers between enterprise and small and medium business service offerings.

Powered by Genband Nuvia, the launch of Synergy represents a ground-breaking service that enables a business of any size to access the same suite of features and services in the office, at home or on the move.

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Co-sponsored feature: Ericsson Ericsson and Volvo Cars enable drivers to reconnect with the road with ‘Sensus Connect’ in the new Volvo XC90

Ericsson and Volvo offer customers a fully connected experience based on Ericsson Connected Vehicle Cloud

For more information about Ericsson’s Connected Vehicle Cloud solution, visit http://www.ericsson.com/ ourportfolio/transport/connectedvehicle-cloud

Volvo and Ericsson joined forces to help drivers and passengers disconnect from the home and reconnect on the road for access to favourite services, infotainment, navigation and audio. The Volvo XC90 ‘SENSUS Connect’, powered by Ericsson’s Connected Vehicle Cloud (CVC) offers customers a fully connected experience. Consumers now have access to the most comprehensive in-car control system on the market.

The design behind Volvo’s all-new XC90 has completely reconceived how drivers operate a vehicle with the most modern in-car control system on the market. One that is crucially easier to use, ensuring drivers can keep their eyes on the road as much as possible while being completely connected via the cloud. Supported by Ericsson, it offers integrated cloud-based applications for music streaming and

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other services, such as the world’s first integrated Park and Pay application, and the ability to mirror and use Apple iOS devices in the touch screen display.

The XC90 offers customers a fully connected experience based on the Ericsson Connected Vehicle Cloud and the navigation system by HERE, providing the possibility to remotely update content and simplify the entire car experience. Ericsson Connected Vehicle Cloud currently serves customers in China, the US and Europe, and is already connecting hundreds of thousands of Volvo Connected Cars around the world.

Volvo is working with Ericsson to define connected car technology for the future with a groundbreaking vision to create a world where cars will communicate intuitively with their drivers, other cars and the road itself. Q Global Telecoms Business May/June 2015 75

YOU MAKE MONEY WHERE OTHERS DARE NOT TREAD You use telecom-specific analytics to know what customers want and advanced Service Enablement to create and deliver it, fast. You can manage the cloud and virtual network in real time. You swiftly roll out networks with accelerated plan-to-provision.

You let partners use your component-based catalog to build on your assets and increase your revenues. You are an Agile Operator, powered by the Ericsson Agility Suite. And you are changing what’s possible in telecom.

YOU ARE THE AGILE OPERATOR

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innovationawards 2015 The connected car Winners: Volvo Cars and Ericsson Volvo and Ericsson joined forces to let drivers and passengers disconnect from the home and reconnect with the road, the Volvo XC90 Sensus Connect, powered by Ericsson’s connected vehicle cloud.

Background: Volvo is working with Ericsson to define connected car technology for the future. Volvo and Ericsson’s vision is ground breaking, creating a world where cars will communicate with their drivers, other cars and the very road itself.

Enter the new Volvo XC90: the design behind Volvo’s all-new XC90 has completely re-conceived the way drivers operate their cars with the most modern in-car control system on the market today, that is crucially easier to use, ensuring drivers can keep their eyes on the road as much as possible while being completely connected via the cloud. Supported by Ericsson, it offers integrated cloud-based applications for music streaming and other services,

such as the world’s first integrated park and pay application, and the ability to mirror and use Apple iOS devices in the touch screen display.

Sensus Connect — instinctive understanding: Volvo’s new interface is the XC90’s onboard experience, powered by Ericsson, that combines connected services, infotainment, navigation and audio. Sensus Connect also offers the world’s first car to infrastructure communication feature park and pay, and the US launch of Volvo on Call, one of the most comprehensive, global telematics solutions for connecting cars.

Fully connected experience: the XC90 offers customers a fully connected experience based on the Ericsson connected vehicle cloud and the navigation system by Here, providing the possibility to remotely update content and simplify the entire car experience.

Sensus Connect includes a broad selection of cloud-based applications

Klif affordable mobile internet access in AMEA

Integrating SMS/IP messaging: the ‘green button’ experience redefined

Winners: Orange, Mozilla and TCL

Programme to increase mobile internet access for millions across Asia, Middle East and Africa with bundle of data, voice, text and 3G smartphone.

The aim of the Orange Klif programme is to increase mobile internet access for millions across the Africa, Middle East and Asia region who have found access to mobile internet unaffordable.

For a street price under $40 the customer receives a digital bundle offer of data, voice, text, and a 3G Firefox OS smartphone exclusive to Orange that is available in 13 of Orange’s markets in the region, with the upfront cost giving four to six months of data.

with a branded look and feel. The selection of cloud-based services, which may vary depending on market, includes internet radio, connected navigation, finding and paying for parking, discovering new restaurants at the destination, seamless streaming of favourite music and much more.

For example, the XC90 will not only tell you when it’s time to visit the garage, but will also suggest an

appointment for you at your Volvo dealership. The connected service booking application is the first step in making the dealer workshop fully integrated into the connected ecosystem.

In-market today: Ericsson connected vehicle cloud currently serves customers in China, the US and Europe, and is already connecting hundreds of thousands of Volvo connected cars around the world.

‘blah’ unified communications app

Buying energy credits by mobile phone

Winners: TIM Celular and Amdocs

Winners: Digicel and Redknee

Winners: Deutsche Telekom and Jibe Mobile

Centrally managed cloud-based RCS platform to provide subscribers with video calling, group messaging, and file sharing.

Deutsche Telekom’s RCS service powered

by Jibe was launched on Android and iOS in Slovakia and Romania in June 2014. Deutsche Telekom provided management and launch leadership teams on site with Jibe engineering and cloud operations teams in Mountain View, California, and Düsseldorf, Germany.

The biggest service breakthrough for users is the integrated SMS/IP messaging experience allowing subscribers to click the same messaging button used for SMS to access IP messaging — presenting the “green button” experience.

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UC app offering rich communications services including IM, HD VoIP, video calls and conferences, within the brand for 73 million customers.

TIM Brasil has become one of the world’s first service providers to offer rich communication services — such as instant messaging, high-definition VoIP, video calls and conferences — while keeping the user inside the brand.

Based on the Amdocs unified communications solution and specially adapted to meet TIM’s requirements, blah proves that service providers can successfully compete with OTT players and deliver differentiated, high-value services.

Converged billing system and SMS gateway allowing customers to purchase electricity at any time directly from their mobile phone.

Redknee’s converged billing system and SMS gateway is supporting Digicel’s Easypay ‘Easipawa’ prepaid electricity metering service, enabling Digicel customers to purchase electricity at any time directly from their mobile phone. Energy customers simply enter their meter number and the required amount of electricity, receive an SMS message confirmation, and the payment is deducted directly from their Digicel airtime balance.

Digicel’s postpaid customers can add the purchased amount of energy to the monthly bill.

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BUSINESS

innovationawards 2015 Effective call centre management project Winners: Singtel Optus and Hewlett-Packard

Project by operator’s customer experience transformation team with front-line customer service, IT and networks to improve callcentre efficiency.

SingTel Optus operates several customer call centres aligned to its fixed line and wireless services portfolio.

To address these issues, Optus’s customer experience transformation team embarked on a joint initiative, involving front-line customer service, IT and Networks with the objective to improve call centre efficiency. HP provided consultancy services.

First US LTE roaming launch in Alaska Winners: Alaska Wireless Network and Syniverse

Leb keys mobile app: Latin-Arabic mobile keyboard Winners: Touch Lebanon and Foo Solutions

Free mobile app that carries a third-party keyboard so users can chat more efficiently in Arabic, using Latin letters that are not needed.

Touch Lebanon created Leb Keys, a mobile app that carries a third party keyboard: a Latin Arabic mobile keyboard. The keyboard was created by identifying the letters that the Lebanese don’t use when chatting and replacing them with the numbers they do use.

The free app was then placed on Google Play and the App Store for everyone to use, Touch customer or not.

The downloads of the Leb Keys app have exceeded all targets, reaching 350,000 within six months of launch, representing over 17% of Touch’s 2.1 million customers.

SMS ticket for Minsk metro

Roaming project: roam like you’re home

Winners: BeST (life:)) and Tagvance

Winners: Digicel and WeDo Technologies

Payment of metro tickets by sending SMS, with unique number checked by scanners at station turnstile.

SMS-ticket is an innovative service that subscribers can use their phones to use the Minsk metro. The SMS-ticket price is equal to the cost of one token.

The SMS-ticket contains a unique number which can be read by scanners at the entrance of metro stations. Almost any phone is suitable for payment, even feature phones with black-and-white screens.

95% reduction in roaming rates by charging customers as if they were at home, resulting in strong revenue growth across 27 markets.

Roam Like You’re Home allows Digicel customers to enjoy the same rates that they would enjoy at home while abroad.

If a customer from Jamaica, for example, was roaming in the United States, standard roaming costs to call home is $1.68 a minute while with RLYH they only pay $0.08.

If they were to make calls within the US, it would cost $0.08 a minute but while on RLYH, it costs $0.02 a minute.

Data would cost $5.06 per megabyte while with RLYH it costs only $0.03 a megabyte.

Digicel has experienced a strong revenue growth despite an average 95% drop on roaming rates across 27 Digicel markets.

Digital Hub API and services platform Winners: VimpelCom, Opera Software and Skyfire

90% time-to-market reduction through innovative product catalogue Winners: Mobiltel and Amdocs

Partnership by two leading US operators, one regional and one national, to allow customers to roam on to each other’s LTE networks.

Alaska Wireless Network launched LTE roaming and interworking with T-Mobile US in September 2014 by using the Syniverse IPX network, the LTE roaming backbone supporting nearly 800 LTE roaming routes reaching more than 185 operators in 44 countries.

The project between Syniverse, AWN and T-Mobile US was unique in that it represented the first domestic LTE roaming agreement for the US. The launch provided AWN with a nationwide LTE footprint that allows the company to compete against national carriers in the Alaska market.

Upgraded product catalogue in a new architectural environment to reduce overall deployment cycles and speed up deployment time — from four weeks to three days.

Mobiltel has managed to reduce its time to market, from idea to rollout, for consumer services by an astonishing 90%.

Amdocs decided to deploy the existing Amdocs product catalogue, upgraded to a new version, within a new type of architectural environment where supporting systems would only need to updated with incremental changes rather than uploading the entire database.

Digital Hub to improve the way mobile internet and smartphone apps work for 230 million mobile customers of 14 mobile networks worldwide.

Digital Hub is a VimpelCom platform improving the way mobile internet and smartphone apps work for its mobile customers. It is designed to give the best mobile internet customer experience across all devices and options to access internet on mobile, with additional convenience and control to address customers’ needs.

Opera Software integrated services with VimpelCom group digital APIs, resulting in a tailored, transparent in-app customer experience for customers, including integration with Opera Mini co-branded browser and WebPass service.

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innovationawards 2015 Sharper world with 4k TV and home broadband Winners: Hutchison Global Communications and Le Shi Internet Information and Technology (Letv)

Bundled offer comprising high-speed 4K home broadband service, entertainment content and smart TV, to increase availability of 4K content.

Hutchison Global Communications and Letv, a content and smart-device provider, jointly launched a bundled offer comprising high speed 4K home broadband service, entertainment content and smart TV. Viewers enjoy a one-stop device, content and broadband service from one single provider. It eliminates management of separate contracts and lessens customer support time. Letv’s smart TVs turn the customer’s home into an all-inclusive entertainment centre, covering smooth streaming of a wide range of TV programmes, movies, gaming and video conferencing in superb quality.

gtb

Improving mobile Indoona voice over IP subscribers’ experience service through direct operator Winners: Tiscali and Metaswitch Networks billing

Homepoint multi-service unit for smartphones and tablets Winners: Orange and Sercomm

Winners: Zain Jordan and SLA Mobile

Direct operator billing to allow customers to pay for digital and virtual content from thirdparty providers by charging to monthly bill or prepaid credit Zain Jordan partnered with SLA Mobile to roll out a mobile payment solution that enabled customers to pay for digital and virtual content from third-party providers by charging the transaction to their monthly mobile phone bill or using their prepaid credit.

SLA Mobile has joined forces with technology solutions providers Rubikomm and Actel to provide Zain customers with a multitude of applications for direct operator billing in order to ensure they receive a safe and seamless payment experience online.

App gives users access to social network designed for smartphones, offering chat with text, photos, videos, audio, file sharing, group calls and chats.

Tiscali’s Indoona application gives users access to a unique social network designed for smartphones, offering: chat with text, photos, videos, audio, locations and stickers; local and cloud file sharing; group calls and group chats; and free minutes to international destinations and extra minutes available at very low rates. Tiscali based their Indoona service on Metaswitch’s open source Project Clearwater, built to run in an NFV environment and the cloud.

Tiscali has developed its own services and smartphone application to run on top of Clearwater IMS, allowing it to provide a compelling feature set, enabling it to compete on level terms with OTT operators.

Sharing platform for smartphones and tablets to let users create a secure Wi-Fi network for friends and share phones, videos and music.

Homepoint is an innovative small device, a sharing platform with which customers can easily give a secured wifi to guests; play music from a smartphone to a stereo system; and access all files stored on a USB key or SD card plugged to the Homepoint, including photos, videos and others documents, thanks to the dedicated application.

Orange involved Sercomm to transform this strong technical challenge concept into a product. Sercomm and Orange internal teams worked closely on the hardware, design and software.

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POWER100

Who will be the Global Telecoms Business Power 100 for 2015?

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50 women to watch in telecoms Anne Bouverot, director general of the GSMA, introduces our report on women in telecoms

Changing the status quo

Anne Bouverot: Women don’t hold as many leadership or board positions as men. I believe we can change the status quo

I’m pleased to see that Global Telecoms Business is highlighting the women to watch in technology in this edition.

However, it’s no secret that women are still underrepresented in this sector. Much has been written about the fact that girls are not choosing to study STEM — science, technology, engineering and mathematics — subjects, that there are far fewer women than men working in technology companies across the globe and that women don’t hold as many leadership or board positions as men.

I believe we can change the status quo. Making women aware of the many opportunities in mobile and ICT is a passion of mine.

From the beginning, I saw that computer science and telecoms were dynamic, growing sectors and pursuing these subjects would prepare me for many different career opportunities. More than 20 years later, I am even more convinced of this!

While new generations of women are increasingly embracing technology in their everyday lives, they may not realise just how exciting it is to work in mobile and ICT. Of course there are enormous opportunities for people with deep technological skills, but there are just as many for people focusing in other disci-

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plines, whether it’s creating connected cars, advancing mobile commerce, or even designing the master plan for a smart city. The opportunities are limited only by the imagination.

We need to make women in mobile and ICT the norm rather than the exception.

Motivating women to work in the mobile industry needs to start from the ground up. We need to ensure that girls and young women are given the opportunities and guidance to pursue STEM subjects in the first place, provided with practical experience like internships in the field and also inspired by the potential of mobile to change people’s lives.

And we also need to encourage women who are already on career paths in technology to continue on in them and address the challenges that may cause them to abandon their careers mid-stream.

To make this a reality, we need to address the entire ecosystem. It starts with engaging the stakeholders involved — educators, policy makers, mobile operators, manufacturers and suppliers — and extends to women themselves recognising the opportunities for their talents in the mobile and ICT industry.

Working together, we can strike a new balance, for the benefit of all. Q X Global Telecoms Business May/June 2015 79

50 women to watch in telecoms Women account for less than 40% of the industry’s workforce, and it’s even worse at high management levels. Agnes Stubbs introduces GTB’s first ever list of the 50 women to watch in telecoms

The gender roles are shifting, but slowly, and women remain underrepresented In her $10.5 billion bid to acquire Verizon’s wireline operations in California, Florida and Texas, in early 2015, Frontier Communications’ thenCEO Maggie Wilderotter pulled out her address book and tapped into some of the industry’s toughest dealmakers.

It was to be an all-women network featuring JP Morgan Chase investment banker Jennifer Nason, the global chairman of its technology, media and telecommunications practice; Martha McGarry, partner at Skadden, Arps, Slate, Meagher & Flom; and seasoned mergers-and-acquisitions strategist Joele Frank, founder of Joele Frank, Wilkinson Brimmer Katcher.

“I hired them because of their talents and competencies,” Wilderotter, who stepped down as CEO in April 2015 and is now executive chairman, told Bloomberg. “But it’s a win-win that they’re women.”

The move is a sign that gender roles are shifting in the telecoms and technology space.

However, recent findings still reveal some damning statistics. A report by Gartner in 2014 found that the percentage of women in chief information officer’s roles has remained largely static at 14% since 2004. The study found 80 Global Telecoms Business May/June 2015

50 women to watch Muna Al Hashemi

Michelle Bourque

CEO, Batelco Bahrain

VP of product and marketing, wholesale and access strategy, business markets, BCE Nexxia

Hashemi is the first woman to hold a CEO role in Bahrain’s telecoms industry. She joined Batelco Bahrain in 1994 and was in charge of Batelco’s consumer division since 2008. Hasemi began her career in the engineering department and rose through the ranks in various divisions, including customer services, accounts, product marketing, product development and customer marketing. She is also a board director at Umniah, Batelco’s group operation in Jordan.

Khawla Al-Jaber Group technology strategy director, Zain Al-Jaber has more than two decades of experience across technology sectors including 2G and 3G mobile, internet and broadband data. She has a broad range of expertise in strategies, business development, product development, VAS and service fulfilment, as well as sales and marketing. Al-Jaber has also been instrumental in various greenfield implementations especially in areas of launching products and services.

Catherine Birkett CFO, Interoute Birkett has led the company’s finance department since the end of 2004, having joined the company in 2000. As CFO, she has completed six acquisitions, including the European hosting business of Via/PSI, the Nordic video conferencing group VCG and Quantix the cloud application management group. Birkett has driven the business through a high growth period to a position in 2013 with revenues of €417 million, ebitda €92 million and generating cash.

Bourque leads a team of product and marketing professionals at BCE Nexxia.

Prior to Bell, BCE Nexxia’s parent company, Bourque worked at MTS-Allstream, AT&T Canada and Unitel where she held senior leadership positions, including director roles in corporate programmes, voice planning and engineering, local voice order entry, marketing portfolio and project management, and marketing operations and business planning.

Anne Bouverot Director general, GSMA Former Orange executive Bouverot was appointed as director general of the GSMA and a member of its board in 2011. During her four years at the organisation she was a strong advocate of global operators, pushing ahead with advocacy programmes in the industry.

Before the GSMA, Bouverot was executive vice president for mobile services at Orange, where she defined the strategic transformation programmes which served over 120 million customers. From August 2015, Bouverot will be chair and CEO of Morpho, a French security firm.

Ruth Bridger VP marketing, Xorcom Since 2008 Bridger has been VP of marketing at Xorcom, a manufacturer of Asterisk-based modular and scalable VoIP to PSTN hardware telephony solutions for commercial installations. Prior to that, Bridger was marketing manager at Surf Communication Solutions, a developer of infrastructure platforms enabling the convergence of voice, video and data across wireline and wireless networks.

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that women occupied 11.2% of technology leadership roles in Europe, the Middle East and Africa, compared with 18.1% in North America, 13.4% in Latin America and 11.5% in Asia.

Also in 2014 Google, Facebook, Apple and other major tech companies found that men outnumbered women four to one or more in their technical sector. And in a report released February 2015, the GSM Association found that women accounted for less than 40% of the workforce in three-quarters of telcos surveyed.

The numbers tell the same story of old: women remain under-represented in leadership, and across all levels, in the industry. And while the numbers are growing, they remain staggeringly low.

Stephanie Liston, a former board member of the UK regulator Ofcom, agrees that female representation across the industry has been slow to rise.

“Traditionally there have not been many women in technology and engineering; people tend to enter the industry through an engineering perspective,” she says. Liston founded the London-based Women in Telecoms and Technology group in 2000 out of “loneliness”, she says: “There weren’t many women in any of the meetings I attended then.”

Since then, the networking group has grown from four to 1,200 worldwide with the aim to encourage women in all stages in their careers.

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Mignon Clyburn

SVP, global solutions and sales operations, AT&T Business Solutions

Commissioner, Federal Communications Commission

Chow leads a national sales and support organisation of over 2,000 professionals responsible for supporting customers and sales teams across AT&T’s business markets. A veteran of the industry for over two decades, Chow has held leadership positions in engineering, sales, marketing, customer care, international operations, product management, and strategic planning. She serves on AT&T’s T University governing board which supports the corporation’s leadership development imperative.

Appointed to a second term at the FCC by president Barack Obama in 2013, Clyburn has voted to adopt the controversial net neutrality rules despite opposition from carriers. Clyburn has served at the FCC since 2009, after 11 years as a member of the sixth district on the public service commission of South Carolina. In addition she is an advocate for enhanced accessibility in communications for disabled citizens, and works closely with representative groups for the deaf and hard of hearing.

Chua Sock Koong

Margherita Della Valle

CEO, Singtel

Deputy group CFO, Vodafone

Chua is responsible for the company’s consumer business, group enterprise and group digital life. She has risen through the ranks since joining Singtel in 1989 as treasurer. She was appointed CFO in 1999, then group CFO and CEO international from February 2006 to October 2006 before being promoted to deputy group CEO. Chua sits on the boards of Bharti Airtel, Bharti Telecom and key subsidiaries of the group. She is also a member of the Singapore Management University Board of Trustees and the Public Service Commission.

Della Valle has been group financial controller and deputy CFO of Vodafone group since October 2010, having been CFO of its European Region from April 2007 to October 2010 and CFO of Vodafone Italy from 2004 to 2007. She joined Omnitel Pronto Italia — which became Vodafone Italy — in 1994 and held various consumer marketing positions in business analytics and customer base management.

Mary Clark CMO, Syniverse Named CMO in 2014, Clark leads Syniverse’s product marketing, corporate communications, branding, digital strategy, strategic events and industry relations. She was previously senior vice president of nextgeneration roaming services and standards and senior vice president of roaming. In these roles she spearheaded product introductions in Syniverse’s real-time intelligence and strategic consulting services, defined the company’s LTE strategy from concept to product introduction and took on a leadership role in its acquisition of MACH.

Minority “Women are still a tremendous minority but we are growing in numbers and strength,” says Illisa Miller, CEO of iMiller Public Relations, noting the steadily increasing number of women in managerial and executive positions.

“We haven’t shattered the glass ceiling but we’re breaking it in areas. You can see that at AT&T with its women executives. Yahoo has set the

Anne Chow

Karen Freitag President, Sprint Enterprise Solutions Freitag is responsible for the profit and loss of Sprint’s enterprise business-to-business sales.

Her organisation provides platform solutions serving a broad range of industries and customers with a portfolio of services including IP, 3G and 4G wireless, wireline and M2M solutions. She joined Sprint as the vice president of global sales and business development in February 2013.

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bar with really strong women in leading positions,” notes Miller.

Why is the gap still so pronounced in an industry known to invest in innovation?

Pointing to the “sadly skewed” scales, Noreen Rucinski, CIO of Business Texter, says that women themselves may be partly responsible: “Over the last several years, I have seen more women at the CEO and CTO level. But rarely do I see any who step up or speak up and direct.”

Anne Bouverot, directorgeneral of the GSMA, says she faced significant opposition in her drive to increase the number of women speakers at the annual Mobile World Congress — from women themselves.

“I was given all sorts of reasons like ‘I’m too busy’ or ‘I’m not ready to speak because I don’t have anything to add’.

In general, it is harder to get women to speak, than it is men,” says Bouverot.

This year’s MWC saw an 18% attendance from women, about the same as last year.

Women may be the ones holding themselves back, says Miller. As an example, some still find it intimidating to walk into a room and “be the only woman in a room of internet technicians”.

She says the lack of self-belief and confidence is a reflection of a culture that is bombarded by influences such as fashion magazines. “Society tells women what it expects of them. If we’re not aware of these, we can’t overcome those challenges.”

Such influences can have negative impacts on women’s thinking and hold them back.

Suzanne Bowen, VP of DIDX and co-founder of Super Technologies, observes that women are still more likely to be the listeners in a mixed-gender group. “Women have it but they don’t express themselves as much. It’s a lack of confidence and taking a risk to add to the conversation.”

Bowen is quick to add that there are many more women who are getting braver about 82 Global Telecoms Business May/June 2015

Cynthia Gordon CCO, Ooredoo Gordon joined Ooredoo Group in 2012 as group chief commercial officer where she oversees marketing, distribution and customer services. In addition she works with operators to develop, review and implement commercial strategies to drive revenue and profitability growth in local and international markets. Before Ooredoo she was VP of partnerships and emerging markets at Orange, and before that was CMO of MTS, the Russian operator.

Monique Hayward Director, outbound marketing network platforms group, Intel An 18-year Intel veteran, Hayward leads a team that’s responsible for promoting Intel’s vision to transform network infrastructure. She has also led teams and managed strategic programmes in marketing, communications and business development in software and services, global diversity, mobile platforms and corporate marketing.

Christine Heckart CMO, Brocade Appointed CMO in March 2014, Heckhart is responsible for the strategic direction of Brocade’s global marketing organisation.

She is instrumental in driving the strategy to generate brand awareness and to develop and execute demand generation programmes globally. With more than 25 years of experience in the technology industry, Heckhart has held a senior marketing leadership positions at networking and other high tech companies such as ServiceSource, NetApp and Juniper Networks.

Mari-Noëlle Jégo-Laveissière EVP of innovation, marketing and technologies of Orange group Promoted to her present role in March 2014, JégoLaveissière is a member of the executive committee of the Orange group. Previously, she was senior vice president of international and backbone network factory. During 20102012, she was SVP for R&D for the group. JégoLaveissière has held various executive positions since joining France Telecom in 1996, including VP for home marketing of Orange France, head of a French region where she was in charge of technical and commercial entities for mass markets and business clients.

Susan Johnson SVP of global supply chain, AT&T Johnson is responsible for all supply chain functions within AT&T including strategic sourcing, purchasing, supplier diversity, supply chain logistics and distribution. She began working for Pacific Telesis in 1994 in corporate development and has served in a variety of positions within AT&T. She was head of AT&T’s corporate strategy group and SVP of business development, responsible for developing new revenue opportunities through the application of emerging technologies, and was SVP of customer information services. Most recently she was SVP of investor relations, the primary contact with the investment community.

Kay Kapoor President, government solutions, AT&T Mobility & Business Solutions Kapoor assumed the position of president at AT&T’s government solutions in 2013 and has since led on delivering network and technology services to the US federal government. Previously, she served as CEO of Accenture Federal Services. Kapoor has 25 years of experience in the federal government market and has held various management positions at Lockheed Martin and ITT.

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sharing “without being embarrassed or not feeling accepted”.

Building your network In an industry that is “all about relationships”, Telarix’s director of marketing and human resources, Lisa Tovar, points out that networking is more crucial than ever before.

“The majority of relationships — I hate to say it — happens at the bar,” Tovar observes.

Instead of shying away, it’s an opportunity for women to show their personalities — while discussing business. “Put yourself out there. This industry is very small. It may not seem so but it is. You will see the same people as you evolve and build those relationships,” she says.

Rimma Perelmuter, CEO and global board director of Mobile Ecosystem Forum, says that, in general, women may be too studious to a fault.

“Sometimes we are too busy doing the homework and the presentations — and not dedicating enough time to networking and fostering the right relationships and champions.”

Emphasising the importance of networking, Liston advises: “Get out there and be seen. People need to know you’re there at all levels of your career.”

Speaking up: The double standards In a January 2015 op-ed in the New York Times, Facebook’s Sheryl Sandberg and Adam Grant, a professor at the Wharton business school, pointed out that male executives who spoke more often than their peers were rewarded with 10% higher rating of competence while female executives who spoke more than their peers received 14% lower rating from both men and women.

“When a woman speaks in a professional setting, she walks a tightrope. Either she’s barely heard or she’s judged as too aggressive. When a man says virtually the same thing, heads X

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Ronnie Klingner

Sara Mazur

President of wholesale voice, PCCW Global

Head of research, Ericsson

With over 13 years’ experience in telecoms, Klingner leads a team that covers operations, engineering, sales and back-office support. Previously as regional vice president of US wholesale voice, she led a PCCW Global sales team that served carriers in the Americas, growing the business by more than 200%. Prior to PCCW Global, Klingner was regional sales director for Teleglobe International.

A scientist with 17 years of experience in R&D, Mazur has held various management positions within the company before she was appointed VP and head of Ericsson Research in November 2012. Previously as head of system management within business unit networks, she focussed on unit-wide technology and research coordination and strategic management of technologies. She has also served as expert and head of a research unit responsible for radio network research.

Dominique Leroy

Brooks McCorcle

CEO, Belgacom

President, partner solutions, AT&T Mobile & Business Solutions

The first woman to lead Belgacom, Leroy was appointed in 2014 and will hold the position for the next five years. She was EVP of the consumer business unit of Belgacom since June 2012. She joined the company in October 2011 as VP of sales for the consumer business unit. Prior to Belgacom, Leroy worked at Unilever for 24 years where she was managing director of Unilever Benelux and member of Unilever’s Benelux management committee.

Catherine Livingstone

McCorcle is responsible for launching solutions to drive value and growth in AT&T Mobile & Business Solutions. Her responsibilities were expanded in late 2014 to lead AT&T partner solutions, which combines the AT&T partner exchange reseller programme, AT&T Wholesale (including Global Wholesale) and ACC Business (an alternate sales agent programme). Over her 24-year tenure with AT&T and its predecessor companies, Brooks has held positions in M&A and finance, and executive positions in consumer marketing, customer care and sales.

Chairman, Telstra Livingstone has been a non-executive director since November 2000, was appointed chairman in May 2009 and was last re-elected in 2014. She is chairman of the nomination committee and a member of the audit and risk committee and the remuneration committee. She was chairman of Australia’s science agency, the Commonwealth Scientific and Industrial Research Organisation, from 2001 to 2006.

Kate McKenzie COO, Telstra Appointed COO in October 2013, McKenzie is responsible for Telstra operations, chief technology office and innovation portfolios. Prior to her present role, McKenzie was group MD at Telstra innovation, products and marketing from 2010 where she oversaw product, promotion and pricing across the company, including the major product units, mobile products, fixed voice and broadband, network applications and services, data and IP as well as the NBN team and the chief technology office.

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nod in appreciate for his fine idea. As a result, women often decide that saying less is more,” they wrote.

Such barriers can prove detrimental to businesses and should merit a closer look by companies. For a start, corporations are tackling the numbers in concrete ways — by implementing gender quotas.

In 2003, Norway became the first country in the world to introduce a 40% quota for female directors of listed companies. Since then, quotas have also been imposed in other European countries, such as Belgium, Iceland, Italy, the Netherlands and Spain.

Under a March 2015 German law, 100 of the largest German companies must award at least 30% of board seats to women by January 2016.

Another 3,500 companies must present a quota plan with binding targets, demonstrating how they will add women to their boards by the end of September 2015.

Elsewhere in the world, Malaysia has enforced a 30% quota for new appointments to boards and Brazil has imposed a 40% target for state-controlled companies.

According to Bloomberg business journalist Paula Dwyer, a growing number of studies show that boards with greaterthan-average gender diversity prove better at managing risk.

Companies with at least one woman on their board are said to generate faster revenue growth, produce larger returns on equity and be more innovative, she reports.

Numbers alone aren’t enough to change corporate behaviour and culture. Nicola Wolfram, COO at German-based messaging company Tyntec, says that imposing gender targets could end up being counterproductive and used “as an excuse for not making any real changes that can disrupt deep seated cultural and behavioural patterns”.

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Maxine Moreau

Funke Opeke

EVP, global operations and shared services, CenturyLink

CEO, Main One Cable Company

Moreau is responsible for the company’s operations including end-to-end planning, engineering, construction, operation and maintenance of its global network, as well as region operations and hosting data centres.

In her previous role as senior vice president of integration and process improvement, Moreau led the integration of CenturyTel, Embarq, Qwest and Savvis, creating the third largest telco and internet provider in the US in terms of lines served.

Claudia Nemat CEO Europe and group CTO, Deutsche Telekom Nemat has been a member of the board of management since 2011 and manages Deutsche Telekom in Europe. Before joining Deutsche Telekom, she spent 17 years working for the consultancy McKinsey. In her last position there, she was responsible for the high-tech sector in Europe, the Middle East and Africa. In addition to her roles at Deutsche Telekom, she is also non-executive member of the board at Greece’s OTE.

Opeke is CEO of Main One Cable Company, a Nigerian company that provides open access, wholesale, international broadband capacity to four countries in west Africa. She raised $240 million plus $28 million in contingency and launched the company to build a pioneer private 7,000 kilometre submarine cable system in west Africa. After a 20-year career in the US as executive director of Verizon Communications’ wholesale division in New York, Opeke returned to Nigeria in 2005 as the CTO of MTN Nigeria Communications.

Kathy Perone COO, Hibernia Networks With over 30 years of experience in domestic and international telecoms services, Perone has pioneered service offerings for media, financial, government and global enterprise customers. Before joining Hibernia in 2011, Perone was president of XLNT Technologies, providing consulting services to private equity, investment banking and telcos.

She was also previously CEO of Westcom, president and CEO of Focal Communications and president of North America at Level 3.

Uche Ofodile CEO, Tigo DRC

Karen Puckett

Ofodile joined the Millicom group as CEO of Tigo in October 2014. Before that she was credited to have transformed the Vodafone brand as CMO, resulting in the doubling of revenue and becoming the second largest telecoms operator in Ghana. She played an instrumental role in Vodafone Ghana’s success by overhauling the strategy and driving business performance.

EVP and COO, CenturyLink Puckett presently leads revenue-generating initiatives, including sales, sales support, marketing and the customer experience for consumer, business and government agency customers in the US and globally. She has been at the forefront of the company’s transformation from a local operator to an industry leader in advanced communications services. She has been instrumental in executing the company’s growth strategies in cloud, data hosting and managed services while maintaining its focus on operational excellence and financial strength.

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50 women to watch in telecoms

The gender roles are shifting

50 women to watch

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Appointing more women on boards is good for business — except when it’s implemented by quota, argues Dwyer.

“When companies in other countries have been forced to include women, they often complied with the quota — then found creative ways around it.”

One example, she says, is to dilute a new female director’s influence by adding two male directors.

Wolfram contends that supervisory board members are far too removed from daily corporate activities to be impactful. “Supervisory boards have — by definition — no hiring power in a corporation or influence on product roadmap.

The opportunity for a female supervisory board member to trigger real change is still minimal, at best.”

The key to breaking down cultural and behavioural barriers in the workplace is to expose more employees to diversity.

A change in attitudes will then follow, says Wolfram.

“Companies need to place more women where they can really interact on a day-to-day basis and make a difference.”

Women should be positioned in roles where they can make a meaningful change, challenges Rucinski. “Today, if you have a C-level meeting with the likes of AT&T, Verizon or T-Mobile, you will see a good group of women with roles from service managers to engineering,” she says. “The question is: what jobs do they really have? What positions are they in and what services do they manage? Are they in charge of strategy or do they handle the files that then go to the men who are in charge of strategy?”

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Sabine Sitterli

MD, Airtel Ghana

Regional VP, networks EMEA, Akamai

Quist is the first Ghanaian woman to lead a multinational telco in Ghana.

Her experience covers both mobile and fixed telephony, and extends to value added services for consumers and enterprises. Before joining Airtel Ghana, Quist was the director of Vodafone Ghana’s enterprise division.

A 14 year veteran of Akamai, Sitterli joined the company from AT&T Global Network Services in 2000. As head of networks in Europe, Middle East and Africa, Sitterli leads a globally distributed team of business development and network strategy managers with responsibility for enabling, scaling and expanding the Akamai platform across the region. She led the effort to establish and develop Akamai’s network and colocation relationships with hundreds of operators.

Sandra Rivera VP, data centre group general manager, network platforms group, Intel Rivera has held marketing and business development roles for 13 years at Intel, focussed on communications markets and products, with responsibility for product marketing, segment marketing, channel and ecosystem marketing.

Prior to Intel, Rivera co-founded the CTI Authority, a computer telephony distributor, served as president of Catalyst Telecom’s CT division and had responsibility for the Dialogic sales organisation in eastern US and Canada.

Michelle Robinson

Mary Stanhope VP Marketing, Global Capacity Stanhope is responsible for the definition, strategic positioning and market adoption of the company’s product and services.

She has over 20 years of experience in the communications industry holding business development, product marketing and systems implementation roles of responsibility in companies such as Sidera Networks, RCN, Teleport Communications, Atos Origin and SchlumbergerSema.

VP, state government affairs, Verizon Robinson began her career at Verizon over ten years ago and is today one of its highest ranking women.

She is responsible for shaping and advancing public policy strategies for its telephone, mobile and enterprise business segments. She also directs Verizon’s philanthropic activities toward the needs of the communities in Verizon’s southeast region.

Sheryl Sandberg COO, Facebook

Career versus parenting Even in the 21st century where the likes of Sandberg and HP’s Meg Whitman are running some of the world’s top tech companies, long-established

Lucy Quist

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As COO of Facebook, Sandberg oversees the company’s business operations including sales, marketing, business development, legal, human resources, public policy and communications. Before joining Facebook in 2007, she was VP of global online sales and operations at Google, where she built and managed the online sales channels for advertising and publishing and operations for consumer products worldwide. Her 2013 book, Lean in, has inspired a movement of support groups and impacted public discussions on gender equality at work.

Sun Yafang Chairwoman of the board, Huawei Sun has been chair of Huawei since 1999. After joining the company in 1989, Sun has served as an engineer of the marketing and sales department, director of the training centre, president of the procurement department, among many others. Prior to Huawei, Sun was a technician at the stateowned Xinxiang Liaoyuan Radio Factory, a teacher at China Research Institute of Radio Wave Propagation, and an engineer at Beijing Research Institute of Information Technology.

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50 women to watch

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roles about women as caregivers and men as breadwinners are still deeply intrinsic.

Which leads to one of the most discussed challenges that women still face today — the struggle between career ambition and parenting.

Ruth Bridger, VP of marketing at Israel-based Xorcom, says the desire to invest greater time and effort in child rearing has been one of common factors that have hindered women’s progression to leadership.

“I am lucky to live in a country where there is a great support system for working mothers. Still, the woman’s role is considered more central to the child’s needs and so the commitment to work is somewhat less than what a man can invest,” she says.

In Germany where Tyntec’s Wolfram is based, it is “less common” to see working mothers in senior or management-level positions. “Aside from the inflexible work and social support environment, there is the added cultural pressure for German mothers to take on more parenting responsibilities,” she says.

Serpil Timuray

Margrethe Vestager

Regional CEO, AMAP, Vodafone

Competition commissioner, European Commission

Timuray has been Vodafone’s regional CEO of its Africa, Middle East and Asia Pacific region since January 2014. Timuray joined Vodafone as CEO of Vodafone Turkey in January 2009 and was appointed as a nonexecutive director on the board of Vodacom Group in South Africa in September 2012, the boards of Vodafone India, Vodafone Hutchison Australia, Safaricom Kenya in November 2013 and board of Vodafone Qatar in June 2014.

She began her career in 1991 in marketing at Procter & Gamble, where she was later appointed to the executive committee of Procter & Gamble Turkey, and became general manager of Danone Turkey from 2002-2008.

Mary Ann Turcke President, Bell Media Turcke was appointed president at Bell Media in Canada in 2015. She joined the company in 2005 as VP of customer experience and operations for small and medium business and was promoted three years later to EVP of field operations, leading its team of 12,000 installation and service technicians in delivering fibre TV, internet and other Bell residential and business services.

Marni Walden EVP, president of product innovation and new business, Verizon Communications Appointed to her current position in February 2015, Walden is responsible for growing Verizon’s emerging businesses, such as IoT, digital media and telematics. She also oversees the company’s strategy development and planning group. Walden has held positions as EVP and president, product and new business innovation, as well as EVP and COO for Verizon Wireless.

Padmasree Warrior Former CTO, Cisco

Jayshree Ullal

Change in corporate culture

CEO, Arista Networks

According to a Boston Consulting Group study, Shattering the Glass Ceiling: An Analytical Approach to Advancing Women in Leadership Roles, restrictive workplaces do not accommodate new mothers.

In addition companies that emphasise a “culture of presence” — preferring that employees be physically present as opposed to telecommuting or remote working — “do not favour women”, says the report.

The study found that for women who aspire to leadership positions, the secret to work-life balance isn’t in free or low-cost day care but having a supportive employer and flexible work programmes.

Since she joined in 2008, Arista has been at the forefront of software defined networking. In 2014 Ullal led the company to an IPO on the New York Stock Exchange. Before Arista she was senior vice president at Cisco and responsible for $10 billion in annual revenue from data centre, switching and services, including Cisco’s flagship Nexus 7000 and Catalyst 4500 and 6500 product lines.

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Since her appointment as competition commissioner in November 2014, Vestager has challenged the practices of companies such as Google and taken it to court for anticompetitive behaviour. As Denmark’s deputy prime minister and minister for economic and interior affairs, she drove talks on bank capital rules during the country’s EU presidency in 2012, later playing a key role in the setup of the EU’s banking union.

Warrior was chief technology and strategy officer of Cisco until new CEO Chuck Robbins appointed a new CTO in early June and asked Warrior to become a strategic adviser. Warrior, who joined the company in 2008, was charged with aligning technology development and corporate strategy to enable Cisco to shape and lead major market transitions. She directed technology and operational innovation across the company and oversaw strategic partnership, mergers and acquisitions, the integration of business models, the incubation of technologies as well as the cultivation of technical talent. Before Cisco, Warrior spent 23 years at Motorola where she served as executive vice president and CTO.

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“Such cultural prejudice is something that companies can work to dismantle — with the knowledge that improved work culture and less emphasis on face time are of benefit to male employees too.”

Tovar — mother to a girl — says she has benefitted from having an understanding employer and a flexible work culture. That, she says, has enabled her to pursue her present leadership roles.

Sharon White

Suzi Williams

Chief executive, Ofcom

Global brand and marketing director, BT

An economist, White took over as chief executive of UK regulator Ofcom in March 2015. Before joining Ofcom she was second permanent secretary at the UK Treasury, responsible for overseeing public finances.

Before that she held board-level positions at the ministry of justice and the department for international development. She has worked as a civil service adviser at the prime minister’s policy unit and in Washington DC as a senior economist at the World Bank.

Williams led BT’s bid to become a sponsor of the London 2012 Olympic and Paralympic Games, four years after starting a successful brand transformation at the operator. The 2012 marketing programme paved the way for the successful launch of BT Sport. She has worked in marketing and brand positions at Orange, the BBC and Procter & Gamble. Williams leaves BT in September.

Meg Whitman

CEO, YouTube

Enough about the glass ceiling While it is important to note the numerous statistics, Wolfram points out that all the talk surrounding shattering the glass ceiling should not be the focus. The goal, she says, is to “eventually get to a point when we stop talking about women as a group in this context.”

For now, she says it is crucial that companies with a sustainable business model realise that they need to create a workplace that’s “rich in diversity and reflects the world they operate in”.

Time and investment will be needed to achieve a lasting impact on gender diversity, she says. The potential social and economic benefits of a more diverse workforce will be worth the effort.

DIDX’s Bowen believes that true progress will be represented by a full participation of men and women. “Nirvana is when we don’t go by our gender. Instead, it’s based on the qualities and skills we bring to the table — our connections, experience and knowledge.”

According to Michelle Bourque, VP of product and marketing, wholesale and access strategy, business markets for BCE Nexxia, part of Bell Canada where women represent 25% of all executive positions, there has been a “perceptible shift in how we view diversity in the workplace today”.

She adds: “It has moved from not only being ‘the right thing’ to also being a business imperative.” Q

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CEO, HP Whitman is the only woman to have led two large US public companies — eBay and Hewlett-Packard. She was appointed CEO of HP in September 2011, and announced in October 2014 that the company was going to split in 2015, and she will head Hewlett Packard Enterprise, which will look after computing and telecoms hardware and services. A separate company, HP Inc, will take over printers and PCs. Whitman was CEO of eBay for 10 years from March 1998 where she raised the company’s market valuation from $7.7 billion in 1998 to $57 billion in 2004.

Maggie Wilderotter Executive chairman, Frontier Communications In April 2015, Wilderotter became executive chairman at Frontier Communications. She led the company as chairman and CEO from 2006 until March 2015.

Previously, she was senior VP of worldwide public sector at Microsoft. Wilderotter is chair of the US president’s national security telecommunications advisory committee and a member of the executive committee of the Business Roundtable.

Susan Wojcicki Wojcicki moved from her position as senior VP of ads and commerce at Google to head YouTube in February 2014. Her priorities include creating premium bundles for advertisers and promoting celebrities on YouTube. The owner of the Menlo Park garage in which Google was founded, Wojcicki was Google’s sixteenth hire in 1999, becoming the company’s first marketing manager and the force behind Google’s doodles.

She was responsible for developing the web, online video and mobile advertising products.

Julie Woods-Moss CMO, Tata Communications Woods-Moss has been CMO of Tata Communications, part of the $96.79 billion Tata group, since 2012, and is CEO of its next-gen business. She is responsible for all companywide marketing and communications across all strategic business units as well as the Formula 1 relationship with additional sales responsibility for the next gen provider segment. She has worked for IBM and UPC and joined BT in 2004, becoming CMO and president of strategy.

Ying Liang SVP Europe, PCCW Global Ying draws on 19 years of experience in marketing, sales, business development and project financing, having developed sales channels, country operations and international sales teams in Asia, Europe, Africa and the US. Prior to PCCW Global, she held positions at Tiscali, the World Bank, BT and France Telecom.

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CFO summit: M&As

M&As are the answer to gaining scale What are the challenges of M&As? A panel of CFOs tell the Global Telecoms Business CFO summit how M&As can provide a strategic advantage

of Ooredoo, which has seen rapid growth through acquisitions in the past ten years. Pinter said that despite the wave of consolidation in the industry, the Qatar-based operator has “slowed down” and is “not in any rush” to acquire.

Carriers today have several considerations: whether to “acquire the same, or look elsewhere at adjacent industries in order to build synergies”, he said. “In other words, do you want to be a telecoms conglomerate or concentrate on what you do best?” Pinter added.

The question of whether M&A is the answer isn’t one that is “black and white”, said Kai Uwe Mehlhorn, CFO of Russia’s Rostelecom. A diligent view of what you want to do and how you can influence the competitive landscape is crucial, he said.

Corporate cultures

Left to right: Natasha Good of Freshfields, Caba Pinter of Ooredoo, Kai Uwe Mehlhorn of Rostelecom and Joachim Piroth, euNetworks take part in the M&A panel

As the telecoms industry continues to consolidate in 2015, could mergers and acquisitions provide a strategic advantage in today’s increasingly competitive landscape? The response at the third annual Global Telecoms Business CFO summit was a definite yes.

During the conference’s opening panel discussion, CFOs discussed their strategies in ascertaining the business case of M&As. Other considerations include the challenges of post-merger integration and recognising cost synergies.

Ultimately, the most successful deals will be dependent on a CFO’s ability to combine financial operations with company processes and cultures.

The panel was chaired by Natasha Good, partner at Freshfields Bruckhaus Deringer.

Achieving scale

All photos: ???????????????

The first question every CFO should consider when assessing a deal, according to Joachim Piroth, CFO of euNetworks, is how an acquisition will help a company “grow towards a clear target”. Achieving scale is one of the company’s main motivations, and M&A has been one of the ways to achieve that.

In October 2014, the European bandwidth infrastructure provider acquired Fibrelac, giving it access to the dark fibre operator’s 360-kilometre network, which connects 11 cities in Switzerland — including Bern, Geneva and Zurich.

The acquisition was a “fast integration” which fit perfectly into euNetworks’ business model. “I’m a big fan of tucked-in assets which you can directly implement without any direct synergies,” said Piroth.

Also on the panel was Caba Pinter, regional CFO

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Where some mergers and acquisitions prove to be a perfect fit, others are failures for various reasons — such as the inability to merge corporate cultures, noted Mehlhorn.

He pointed to the 2007 joint venture between Nokia and Siemens that led eventually to Nokia’s buyout of the German company’s 50% stake. The original joint venture, Nokia Siemens Networks, was loss-making, resulting in thousands of job cuts. “On paper, the deal looked perfect. However, because of corporate cultures, one plus one — in that case — did not become two.”

Equally, the 2006 merger of France’s Alcatel with AT&T’s former technology arm, Lucent Technologies, burned significant cash and suffered operating losses.

Both serve as cautionary tales of companies that have suffered from fragmented governance of merged companies with strong cultures, he said.

In 2014, Rostelecom and Tele2 Russia completed the final stage of a merger to form a national mobile operator in Russia. Tele2 RTC Holding, the joint venture, aims to launch its mobile services in Moscow in the middle of 2015. Mehlhorn said the companies are working on combining corporate cultures and creating synergies between both companies to build a better network.

Pricing CFOs and COOs should strive to be involved in the final stages of a deal, especially when the offer price is being discussed. “This is handled differently in every company but it’s always better to be in the front seat on these issues,” said Mehlhorn. “It’s important to have an influence on certain aspects of the deal and take proactive steps to assess and mitigate risks.”

A question was posed about the effect the wave of consolidation would have on offerings for customers.

Mehlhorn said that customers are expected to emerge as the ultimate winners in most cases, as they will enjoy the benefits of better quality of services. Upon completion of a deal, it is crucial that systems are well integrated so as to minimise any disruption customers may face.

Mehlhorn said that on the operator front, carriers will be able to enjoy the benefits of network sharing, which will enable them to reduce opex and capex, as well as create sufficient revenue.

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CFO summit: CFO’s role Regulation The discussion covered comments made by the European Union’s newly appointed anti-trust chief Margrethe Vestager in March 2015, who said that as a result of growing consolidation in Europe, competition could be undermined and prices could soar. The European Commission is presently scrutinising Hutchison Whampoa’s £10.25 billion bid to acquire O2 UK from Telefónica as well as the proposed joint venture between TeliaSonera and Telenor in Denmark.

Regulatory forces will have a huge impact on future M&A activities, especially in Europe, said John Strand, CEO of Strand Consult, adding that regulators are of the belief that where there are more competitors in the market, there is more competition.

“It is not the number of players in the market but the technological development that is creating the competition,” said Strand. “We need to take regulators to a classroom and teach them about what competition is.”

The challenge for operators, said Strand, is the persistent pressure to upgrade networks as new technologies come to the market. “You go from 2G to 3G to 4G. If you decide not to invest, you’ll lose customers, disappear and fade away. [Today’s operator] has two choices – to make investments or consolidate.”

Another panellist, Guy Maidan, services expert in the channels and partners unit at Amdocs, said more collaboration is needed between CFOs and IT departments. CFOs need to understand the complexity of their IT departments and ask: How would this affect the business?

Telekom Malaysia’s Bazlan Osman pointed to the migration of billing systems — an area that IT oversees — as a key example. “As we move towards a dual service, we are now transforming our backend and billing system. When old systems are migrated into another, late billings are bound to happen. We need to understand how these changes will affect our business.”

Interoute’s Birkett said that increasingly, her role is to advise her CEO in “every decision” rather than “just auditing and reporting the numbers”. She said: “We have a fairly scarce capital so every discussion — whether to invest in marketing or sales — comes back to money.”

The discussion led to whether as second-in-command, the role of CFO is a natural progression to CEO. “You have to be commercially rounded to be a CEO. Not many CEOs are just pure accountants.

That’s not the way it works anymore. The two roles are linked in skill sets,” said Birkett.

Balancing act for today’s Operators can protect revenues by minimising CFO in the telecoms revenue and fraud industry The CFO’s role is expanding, said speakers leakages, says Sigos at the GTB CFO summit. The job is no longer just auditing and reporting the numbers

Sigos is able to verify if billing is correct with the use of live CDRs, the company’s Bjorn Koetz tells GTB CFO summit

As technologies such as cloud computing and the internet of things become more sophisticated, leaders in the industry must have a deeper understanding of how these will impact their businesses.

“To talk about payback, you have to understand the technologies. You cannot comment if you don’t have an understanding,” said Catherine Birkett, CFO at Interoute.

She was speaking on the changing role of today’s CFO, in a panel at the Global Telecoms Business CFO summit.

With revenue and fraud leakages estimated to cost telecoms operators between 1-5% of their revenues, Sigos seeks to address such threats through its revenue assurance solution.

Designed to detect inaccurate billing in complex and fast changing tariffs, the service will test and verify the complete billing chain, from the creation of a voice call or SMS, up to CDR comparison and re-rating of each individual CDR. Billing error rates can be detected in near real-time and revenue leakages can then be minimised or stopped.

With its service, Sigos said it aims to avoid revenue losses due to errors in charging or billing. In addition, it is able to immediately verify if the billing is correct with the use of live CDRs, Bjorn Koetz, head of product management and marketing at Sigos, told the Global Telecoms Business CFO summit.

The service is said to be equipped with automatic testing for complex tariffs as well as automated support for revenue assurance which includes reporting and alarm.

“As operators, we need to make sure that all services we provide to our customers generate revenue and nothing goes down the hill,” said Koetz.

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Catherine Birkett, Interoute: You have to understand the technologies.

You cannot comment if you don’t have an understanding

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Global Telecoms Business May/June 2015 89

CFO summit: accounting and convergence

Operators need Fixed-mobile common language when convergence ‘a priority’ measuring success for Telekom Malaysia New accounting rules become effective in January 2017, warns Vodafone’s deputy CFO, and operators will need to change their reporting systems

Margherita Della Valle: Let’s use this opportunity to manage our businesses better and become more sophisticated at managing profitability

The time has come for the telecoms industry to move away from traditional key performance indicators to other standards in order to measure success accurately, Margherita Della Valle, deputy group CFO of Vodafone, told the CFO summit.

“Why do we keep measuring the wrong things in telecoms?” asked Della Valle. “If we do not measure our returns, they are not going to improve. If we are not measuring return on capital, what are we measuring? We have been quite slow at adapting. If we want revenues to continue to be part of what we measure in telecoms, we need to be conscious that there is a big change coming our way.”

The change that Della Valle is referring to is the new revenue standard — IFRS 15 Revenue from Contracts with Customers — which was issued jointly by the International Accounting Standards Board and the US Financial Accounting Standards Board in May 2014. It will become effective on 1 January 2017.

Operators will need to consider implications of the new revenue standard, Della Valle said, adding that it will require system changes and could have an impact on the profile of revenue and profit recognition.

Already, several operators are investing on billing systems to prepare for the implementation of the standard. “It’s important that we all work on this now. We should all make sure we have a common language and change our reporting systems the same way,” she said.

“As operators, we have a role to play in defining standards, both internally and externally,” Della Valle said. The matter is even more crucial as measurements are linked to incentives such as compensation and bonus plans.

“As an industry, let’s use this opportunity to manage our businesses better and become more sophisticated at managing profitability,” she said.

Della Valle warned that there will be challenges in unifying reporting systems because of several existing factors: accounts and average revenue per account, or ARPA, are not standardised and definition of return on capital employed is complex.

However, she concluded: “It’s important that we work on this now.”

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Incumbent operator launches 4G business to provide customers with seamless fixedmobile experience

Baslan Osman: We cannot stay where we are as a fixed line provider. Customer demand for data is growing

In 2007, state-owned Telekom Malaysia exited the mobile industry when it spun off its mobile unit, Celcom, into what is known today as Axiata Group — leaving the operator solely as a fixed-line provider.

Today, Telekom Malaysia is back in the mobile business with the 2014 launch of its first 4G mobile broadband service, known as TMgo. The move was a clear statement of intent regarding its multi-play aspirations in an increasingly converging market.

Bazlan Osman, CFO of Telekom Malaysia, told the CFO summit that its return to the mobile space was inevitable. “We cannot stay where we are as a fixed line provider. Customer demand for data is growing,” said Osman, pointing to its declining revenues in fixed line. Last year, 70% of its revenues came from internet and data while only 30% was from voice services.

A year after the 2007 exit from mobile, the operator signed a national high-speed broadband project with the government to develop next generation HSBB infrastructure and services as part of the country’s vision to be a developed nation by 2020. “The project was not just a catalyst to propel Malaysia towards becoming a high income nation but the catalyst for Telekom Malaysia’s transformation,” said Osman.

“To us, convergence means to provide seamless experience beyond technology, whether it’s fixed or mobile on any devices, whether big or small screens, products or services.”

The operator plans to roll out its LTE service throughout the country, especially in rural and suburban areas, by the end of 2015. In addition, the company has handed its code division multiple access spectrum to the Malaysian Communications and Multimedia Commission in order to convert its near 1,200 CDMA sites to LTE. Osman says it’s not just about converging services but also providing “a seamless experience” for both consumers and wholesale customers.

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CFO summit: assets, capex and opex

Companies lose money through inefficient asset tracking, says Subex Reasons for inefficiencies in capital investments include ineffective asset tracking and management, low process controls, a lack of visibility across the asset lifecycle Operators have had to commit a significant amount of capex investment in order to occupy as much market space as possible, but over the last few years a high capex intensity has led to a heavier debt burden. “Is this sustainable?” asked Ashwin Chalapathy, speaking at the GTB CFO summit.

The best practises for optimising capex investment are monetising fixed assets and network monetisation, he said.

The top reasons for inefficiencies in capital investments include ineffective asset tracking and management, low process controls, a lack of visibility

Ashwin Chalapathy: Sub-optimal capital decisions are due to poor data quality across the asset lifecycle and a capex drain from low return-on-investment projects.

“We are scared to pull the plug on projects like that,” said Chalapathy. “Sub-optimal capital decisions are due to poor data quality. This is no surprise.”

He said there was a significant variation between a company’s assets and its working network

In 2014, Telekom Malaysia acquired a majority ownership of a 55.3% stake in Packet One Networks, with the remaining 44.7% shared between Green Packet and South Korea’s SK Telecom.

Osman said the partnership has given Telekom Malaysia a foothold in mobile broadband services.

The partners will work together to capitalise on mobile opportunities and deliver the next generation of converged services. “Our goal is to be the convergence champion,” Osman concluded.

AT&T pushes ‘audacious’ move to virtualisation for capex and opex savings Global supply chain VP says AT&T’s Domain 2.0 will make 75% of its network softwarecentric

Susan Johnson: We are changing everything. We are going to pull the network out to the software layer

With the surge in traffic resulting from the internet of things as well as the rapid growth in mobile device usage, operators across the world must look to ways of lowering the costs of deploying their networks.

While it used to be conformist and conservative in its approach, AT&T is now adopting what it calls an “audacious” revamp of its network.

It first began in 2013 when the company unveiled the next generation of its supplier domain programme, Domain 2.0, which it said “places customers at the centre of the network with a modern-cloudbased architecture, a global first at this scale”.

More than just a network design change, the programme will change the way it works with suppliers as well as how it manages software, systems and platforms, Susan Johnson, senior vice president of global supply chain at AT&T, told the GTB CFO summit.

Then came last year’s Mobile World Congress when it announced detailed plans for virtualisation, which will replace its network with an NFV-powered software-defined network.

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equipment — which he put at “anywhere between 15% and 30%”.

Companies need better data quality and governance, said Chalapathy. Companies need better data to enable better capital decisions — on matters such as maintain versus replace, buy versus lease, and end-of-life monetisation.

Operators such look at legacy systems that are not creating revenue — remembering the real estate costs and the energy costs.

“Reduce power costs and heating, ventilation and air conditioning opex by accelerating migration to newer network technologies,” said Chalapathy.

Companies should generate actionable insights, using big data to drive down capex and increasing accountability.

“Leverage technology,” said Chalapathy. “You can bring down your cost significantly.”

From network, equipment and software to operations and culture, “we are changing everything”, said Johnson. “We are going to pull the network out to the software layer.”

By 2020, the carrier aims to make 75% of its network software-centric with the use of network functions virtualisation and software defined networking technologies.

In September 2014, AT&T launched its networkon-demand SDN service which allows its customers to add and change network services in real time. “It’s all about the flexibility of the architecture which is crucial from a telco standpoint,” said Johnson, adding that the service also enables companies to manage their cost structure more effectively.

As part of its ongoing Domain 2.0 effort, about 40% of its strategic IT applications have been migrated to the cloud, with an ongoing process of one application to be migrated a day. According to the company, that move has enabled greater operational efficiencies over applications running on dedicated hardware.

In addition, about 400,000 processor cores are running the cloud IT apps and operating 50% more efficiently than on dedicated hardware, it claimed.

Johnson said that Domain 2.0 has given AT&T the power to drive innovation through open APIs, IP differentiation and flexible architecture, as well as fundamentally shift the cost structure through an open source software and more competitive ecosystem. More importantly, AT&T expects the transformation to virtualised networking to result in capex and opex savings.

A big part of its evolution to SDN and NFV will also involve its Domain 2.0 vendor partners such as Brocade, Ciena and Cisco as future networking deployments are expected to further reduce capex over the five years. “This is a big opportunity for change and will allow us to look at our network model in a different way,” said Johnson.

As part of its network revamp, the company will also seek to transform its internal culture. Johnson said culture change will be crucial to the success of AT&T’s move to a software-driven network.

The company has been studying corporate cultures at Silicon Valley and aims to jump-start a culture of innovation and risk-taking within the company. “There is going to be a lot of change at AT&T and we are embracing the culture change [that comes with it],” said Johnson.

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CFO summit: savings and investment

Taking cost out of operations is priority for BT BT director says company strategy has delivered over £5 billion of cost savings over six years

Damien Maltarp: BT is upgrading fibre broadband network to achieve speeds of up to 500 megabits a second

BT’s ambition is to grow its cash flow while continuing to seek out opportunities to reduce cost.

The company generates £2.6 billion of free cash flow a year.

Damien Maltarp, group investor relations director at BT, told the GTB CFO summit: “Taking cost out of the supply chain is priority.” He said that the company’s vision of cost-transformation has delivered over £5 billion of cost savings over six years.

One way it has done so is through insourcing about 11,000 jobs over the last five years. “You pay a margin to those outsourcers. You can increase your margins by insourcing [the jobs],” said Maltarp.

Cost transformation has allowed BT to make significant investment in areas such as customer service, said Maltarp, who was speaking on behalf of Tony Chanmugam, who was indisposed.

“We see customer service and cost transformation going very much hand-in-hand,” he said, adding that the biggest cost for a business is when things go wrong, such as an engineer who shows up at the wrong time or place. The goal for BT is to eliminate that cost of failure.

By the end of 2015, Maltarp is confident that BT will return to growth. One reason, he said, is because of the company’s investment to upgrade its fibre broadband network over the decade that could achieve speeds of up to 500 megabits a second across the UK. It aims to pilot G.fast technology in the middle of 2015.

The advent of data signals that fixed-mobile convergence is happening. “That move to data is happening,” said Maltarp. “We felt we needed to accelerate our plans.” The UK incumbent announced its acquisition of EE in a £12.5 billion deal in December 2014, laying down the gauntlet to other multiplay providers in the UK. “Increasingly, we’re seeing that customers who are watching Premier League [football] matches from Sky are also buying broadband from them. We realised there was a real risk that our customers will leave us if we don’t compete,” said Maltarp.

“In a converging world, sports in the UK is a key driver in who you choose for your TV service, and that is increasingly linked to who you choose for your broadband too,” he added.

Emphasising the company’s commitment to BT Sport, he said: “We will continue to compete with Sky for rights. The market is big enough for two players”.

When asked whether the industry would soon see the acquisition of media company by a telco,

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Maltarp said: “Not all content is equal. The need to go out and buy media when there is an active wholesale market is unnecessary. The question to ask is, what content is important? In the UK, sports is the key driver of our people’s decision.”

How are operators investing in networks for the future?

TeliaSonera focuses on core network and connectivity while OTE aims for technological leadership

Christian Luiga, TeliaSonera: For us, money is cheap. We have a firm strategy of keeping our A-rating

Babis Mazarakis, OTE: Operator is replacing its copper network. The higher your speed, the cheaper you can offer IPTV

Building its core network and providing customers with better connectivity is TeliaSonera’s main priority for investing in the future.

In 2014, TeliaSonera announced a three-year investment of 9 billion Swedish kronor ($1.25 billion) to expand fibre broadband infrastructure between 2015 and 2018, with the goal to provide fibre connectivity to 1.9 million households in both urban and rural areas.

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CFO summit: emerging markets “Firstly, the core network is going to be a fundamental part of our business,” said Christian Luiga, CFO of TeliaSonera, which in 2009 was the first operator in the world to launch a 4G LTE network.

“The second is our connectivity and competitiveness. If we don’t have the core in place, we don’t have any place at all.”

Asked how TeliaSonera decides between sustaining capex or investing in new areas, Luiga said: “For us, money is cheap. We have a firm strategy of keeping our A-rating. The aim is not to get interest now but to keep long term money.”

Technological leadership a key objective for OTE Babis Mazarakis, CFO of Greek operator OTE, said the operator intends to be a “technological leader” through its investment in next generation access networks, as it gradually seeks to replace its copper network.

Outlining the company’s integrated network strategy for next-generation access, Mazarakis said the company will seek to do so through several ways — such as rolling out VDSL, using vectoring, and deploying fibre-to-the-building as well as fibre-to-the-home.

The operator will also push to transform its IP and OSS platforms by retiring legacy systems and moving into a single radio-access network.

He added that the OTE will also be exploring the potential of mobile data through investments in spectrum. With the average mobile traffic per user set to grow rapidly in the next five years, content should be seen as an opportunity, said Mazarakis, noting that telecoms operators are gradually moving into the business. “The higher your speed, the cheaper you can offer IPTV,” he said.

That trend is already evident in the UK and US. In 2009, Comcast acquired NBCUniversal, bringing content creation and distribution in one company. In 2014, AT&T agreed to pay $48.5 billion for satellite television network DirecTV, pending regulatory approval. Verizon also has some exclusive rights to NFL American football games on mobile devices. In the UK, BT has moved into pay-TV, paying billions for sports rights.

David Eurin, Liquid Telecom: Are the regulators and investors going to welcome me or are they going to fight me this year?

Key issues to consider when investing in emerging markets Government strategy, network investment and electricity are all key considerations, but you have to be in it for the long haul, the GTB CFO summit heard

Bonface Ndawala, Zain: Having a clear understanding of why you’re operating in your chosen field is key because you will face local challenges

As telecoms revenue in developed markets remains flat for the foreseeable future, appetite for investment in emerging markets is expected to increase. In order

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to invest successfully in unknown territories, operators must possess an understanding of regulatory, financial and competitive risks.

CFOs from a number of operators shared key issues and questions that companies should consider, in a panel at the GTB CFO Summit.

What is the development of the country going to look like?

When we consider investing in these regions, it starts with what we believe about the development of the country, said Christian Luiga, CFO of TeliaSonera.

“What is its population growth? What is its economic development?” More importantly, what are the intentions of the government?

“The intention from the government to build and invest into infrastructure is going to be very important in our decision to invest,” he said. “In this market, investment in networks is crucial. If electricity is down, you’ll see it in the revenue and income.”

Do you understand the regulatory environment?

Governments can change the game, said David Eurin, chief strategy officer of Liquid Telecom, which operates optical fibre networks in Africa.

Regulations such as government spectrum auctions, issuing of licences and expansion of network coverage will change the landscape, he said. “In Africa, we always welcome change. There have been instances when governments have introduced not-so-good ideas, such as special telecoms tax and high duty.

Those, in particular, have hit operators very hard.”

Are you prepared to stay for the long haul?

Making a quick profit is not going to happen in regions like Africa, said Bonface Ndawala, CFO of Zain’s South Sudan operations. “You have to agree with the partners who are investing there for the long haul. Having a clear understanding of why you’re operating in your chosen field is key because you will face local challenges.”

For example, how do you run a network when electricity is out? “Can you imagine running two generators 24 hours a day? Is the situation always going to be like that?”

No, he said. “Because these issues are temporary.

This is a growth industry. With the increasing number of smartphones, there is a huge potential for mobile data growth in Africa. It’s a case of supply and demand. With the existing low penetration rate and great potential for data, money will be made.”

Evaluating the opportunities — and the timing Eurin added that about two years ago, Liquid Telecom acquired several east African telecoms assets in order to build a fibre network. “The timing was good then. There is always an opportunity in every country. The question is: is now the right time to enter?”

He asked: “Are the regulators and investors going to welcome me or are they going to fight me this year? They may have done the previous year, but maybe this year, they won’t.”

For example, he added, “4G may not be on their agenda this year but that may change next year. A lot about what makes a successful investment comes down to timing and when you enter.”

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CFO summit: deals and competition

What makes a deal successful in the telecoms industry?

With many M&As under his belt, Sunit Patel, CFO of Level 3, gives his view on how to ensure deals are successful

Sunit Patel: What price should you pay is a very deep question. How do you assess the revenue base and how will it develop over the years?

Rule one is don’t pay too much, said Level 3’s CFO, Sunit Patel, speaking at the CFO summit. Level 3 has been involved in a number of deals over the past few years — notably its $1.9 billion takeover of Global Crossing, announced in 2011. In 2014 it bought TW Telecom, a US-based metro operator, for $5.7 billion.

“We’re becoming more enterprise focused,” said Patel at the conference. “What price should you pay is a very deep question. How do you assess the revenue base and how will it develop over the years?”

Level 3 looks at the cost base and what kind of benefits it can get, as well as the integration cost and difficulty of integration. “We spend a long time doing due diligence,” he said.

The potential integration cost drives the company’s determination not to pay too much. But if the due diligence produces a good result, “it’s a win-win, and our level of comfort is reasonably high”, he said.

“Besides strategic fit, the relative fit is important.”

Rule two is that there should be free cash flow per share, he said: “Don’t buy it just because it’s cheap.”

But revenues bases are risky, he said: “You think it’s good, but you end up buying painfully. When you buy a company with a piece of revenue declining, it can hurt your shares for as long as two years.” He quoted investor Warren Buffett, who said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

The question for Level 3 is, how does that business fit with us and how can we drive value? “A lot revolves around what it does for your strategy and how you advance your scale,” he said. “Fit and scale is important. What kind of synergies do you get out of that?

We spend a fair amount doing the due diligence.”

The third rule: assess the strategic fit. That means the strategic goals, the relative size and the culture.

“How do you improve your strategic position?” he asked. “Does it fill a product gap, how does it serve your customers more and more on our own network, which allows them to scale with us?”

He referred to the Global Crossing deal, a company that was big in comparison with Level 3. “The cultural fit in making that work was a lot more difficult” because of the size, said Patel. “Bridging the cultural gap is not as easy you think. It’s easy to calculate synergies.”

The CFO’s role in this is to decide the integration pace.

Define clear objections and set a plan to meet them.

To do a successful deal, a company like Level 3 needs “the commitment of your shareholders”, he added: “You can go through rough patches. Continuity is important.”

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Big data is king with insights on users, says CFO of Candy Crush company Former Clearwire CFO says operators should view gaming as an opportunity

Hope Cochran: We are a gaming company but we have data scientists watching data every day

Big data and analytics have provided King Digital Entertainment — maker of mobile game Candy Crush — with the competitive edge it needs to understand its customers as it continues to beef up its portfolio, said Hope Cochran, its CFO. “We are a gaming company but we have data scientists watching data every day,” said Cochran, who was previously CFO of US wireless network operator Clearwire. Cochran said the use of data has provided critical information as to how gamers react and how the games are being played.

In a move that further demonstrates its increasing focus in data analytics, the company in April 2015 chose Exasol, an analytic database management software company, to power its data analytics, analysing over 1.5 billion of the company’s game plays per day.

In the fourth quarter of 2014, King saw 356 million average monthly unique users across web and mobile platforms, with 8.3 million users spending money.

The company generated over $2.6 billion in sales in 2014, with Candy Crush generating nearly half the amount.

As mobile game usage growth continues its upward trajectory and games remain a key driver of engagement on mobile devices, Cochran said operators should view gaming as an opportunity.

Mobile gaming, said Cochran, has enabled a different type of gamer with women over the age of 35 most likely to pay for its games, its data has revealed.

“These are users who are filling two minutes of their day. There’s no time pressure. They can pick up where they’ve left off. Together, mobile devices and your networks have enabled that,” said Cochran.

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CFO summit: revenue and big data

Flexibility and adaptability needed in business processes, says Ascom Tesh Kapadia: Customer behaviour is locked within a call detail record.

Each CDR tells a story of call origination

Investment in revenue assurance and a strong revenue assurance strategy will also be key in delivering value and overall profitability towards the business, says Ascom executive Declining revenues, shrinking margins and pricing pressure are just some of the numerous challenges the wholesale international voice market has faced in recent years.

To stay ahead of the competition, carriers must be flexible in their business processes and systems, said Tesh Kapadia, vice president of sales at Ascom. Specific

to the wholesale voice market, the ability to automatically update rates and tariffs based on market changes as well as ensure that the sheer volume of data can be processed are two basic requirements, said Kapadia.

He added that carriers should stay nimble in all aspects of the wholesale business. That means being proactive in managing volume commitments, assuring responsible revenue, detecting risks, capitalising on market opportunities and maintaining flexibility in designing inter-carrier agreements.

The ability to execute all of the above while creating a differentiated product in today’s marketplace will create the winning combination.

Investment in revenue assurance and a strong revenue assurance strategy will also be key in delivering value and overall profitability towards the business.

Auditing vendor invoices, distinguishing network costs, analysing and predicting margin as well as statistically analysing all product offerings are several ways to do so.

In addition, traffic behaviour provides a “powerful data repository”, said Kapadia, adding that if properly utilised, it has the ability to link revenues to cost of sale as well as create better routing decisions.

“Customer behaviour is locked within a call detail record. Each CDR tells a story of call origination,” Kapadia said.

Big data can empower Operators should share best customer service, says WDS practices in fraud management, Operators should use big data to measure says Neural audiences from multiple channels, WDS marketing chief tells GTB CFO summit With customer churn rates remaining high, delivering a seamless service in a multi-channel world needs to be a priority for operators.

“Something is fundamentally broken in customer service. All we’ve done is chase the low cost market. The race to the bottom isn’t sustainable,” said Tim Deluca-Smith, global head of marketing for WDS, a Xerox company.

“Detractors are more likely to switch. It’s the consumer that suffers the most.”

Deluca-Smith predicts the rise of the digital care revolution. “Consumers will engage on their preferred channels and already there is a preference for digital. We will see this through social media, digital assistance — not voice,” he said.

Big data should be used as business intelligence to drive a more personal, consistent and effective care experience across digital and contact centre channels.

“The data disconnect is the single biggest challenge to a consistent omni-channel experience,” he said. “It’s about how you use big data to save cost, not so much to monetise.”

Deluca-Smith urged operators to use big data to measure audiences from multiple channels. “What if your care channels learned from each other? Care operations must be analytically driven. They must learn from the millions of care transactions that are processed daily. If you embed [big data] in your processes, it will power them up on an even more efficient level,” he said.

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Mobile payment apps and OTT players have introduced the potential for more sophisticated cases of fraud, warns Neural Technologies Risk management demands “top-tier attention” from CFOs, said Luke Taylor, COO of Neural Technologies, as it is strongly correlated with bottom line performance.

The need to protect vital assets, operate efficient finance organisation and monitor the economic impact of risk is crucial to protecting revenues, said Taylor, adding that protecting profitability and having full financial visibility are critical for any CFO. As the telecoms industry continues to develop new technologies such as LTE, big data, 5G and wearables, new fraudulent threats have emerged.

Mobile payment apps and OTT players have also introduced the potential for more sophisticated cases of fraud.

To address these threats, operators must have risk management initiatives that are “supported by the very top,” said Taylor. “Operators need to be supported by CFOs and allow those initiatives to continue progress,” he said.

Education will also have a serious impact on fighting fraud as sharing of best practices will help drive the agenda. “Have your vendors, service providers, partners, suppliers and employees understand your strategies on risk management,” said Taylor.

As the number of frauds — both internal and external — rises, Taylor urged CFOs to “take the lead” on the matter.

“CFOs should not treat risks and fraud as embarrassments,” he said.

“More visibility within the company, as well as externally, is needed. If you share, that will encourage your colleagues and associates [to become whistle blowers],” Taylor said.

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innovationsummit

Innovation in fibre, LTE and applications changing world, GTB conference hears From Rwanda and Somalia to the US and Sweden, the world’s telecoms innovators gathered at the GTB innovation summit to say how they’re changing the world M Massimo Fatato, HP: NFV is so complex N that it is crucial that th the industry works th together to support to ccarriers and their ccustomers

K

igali, the capital of Rwanda, will have full LTE coverage by the end of 2015, as well as an extensive fibre network.

Sean Koo, the chief operating officer of Olleh Rwanda Networks, a joint venture between KT of Korea and the government of Rwanda, told the Global Telecoms Business Innovation summit that 3,000 schools in the country will be connected by the end of the year.

Further east, on the African coast in Somalia, Dalkom is also providing advanced fibre connections, CEO Jama Mohammed told the conference, which was held on the same day as the GTB Innovation Awards.

“We are delivering services in a remote, challenged and unsecured area.” The biggest challenge in Somalia was connectivity. It was linked to the world only by satellite a few years ago. With fibre “the first six million people are now connected”, he said. “We are trying to extend the network, extending to last-mile services.”

The idea in Rwanda is that LTE — which ORN will offer on a wholesale basis to other operators — will eventually be replaced by fibre. “We are going to connect to all the institutions in the country,” said Koo. “We are going to connect schools and provide distance learning.”

In Somalia, Dalkom has designed a fibre metro network to cover Mogadishu, the capital. “We’re connecting operators and institutions such as government, education, health and media, so people can have basic services.”

Dalkom will be using wireless to extend the network to the rest of Somalia, he added. Like ORN in Rwanda, it is taking a wholesale approach. “We are trying to see how we can come up with competitive pricing, bringing in all operators together to share the infrastructure. That is driving cost down,” said Mohammed.

Prices are coming down everywhere. Romeo Ganescu, group director of product development at VimpelCom, told the conference that “in Pakistan it’s less than the cost of a one-stop bus ride”.

Koo explained ORN’s public-private partnership model and contrasted the situation with South Korea, where three major operators all give nationwide LTE coverage “and there is too much over-investment”.

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There are three mobile operators in Rwanda, too, and they are increasing capex and opex — but he hoped that the ORN wholesale solution can help spread broadband access, especially “once the consumer is addicted to the internet”.

Virtualisation Massimo Fatato, from Hewlett-Packard’s communications and media solutions division, explained the benefits of virtualisation that are emerging — especially the virtual customer premises equipment.

“The introduction of network functions virtualisation is still so complex and full of uncertainties that it is crucial that the industry works together to support carriers and their customers,” said Fatato.

A number of speakers at the summit — which was chaired by telecoms lawyer Stephanie Liston — talked about the impact of the internet of everything. Guillaume de Riberolles, marketing director at Orange, warned that operators would be unable to subsidise smart devices in the way that they have subsidised smart phones.

And the market will be different, he said: “Are the customers ready to pay every 18 months for a new Apple watch? We do not know whether the Apple watch will be successful — but if Apple fails all the market will fail, and that will have consequences.”

Peter Wirén, project manager at Volvo Cars, which is working with Ericsson on connected cars, warned: “We need to find a good business model to connect, while using a lot of data.

We’re seeing more and more telematics, which are being used to keep track of the engine and keep track of the road ahead.”

BT research principal Paul Garner spoke of the company’s smart-city project which is designed to enable the English city of Milton Keynes to make more effective use of infrastructure. “We’re half way through a three-year project to develop a data hub designed to provide services for the end

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innovationsummit users. Data owners will be able to publish to the data hub,” he told the conference.

BT and the MK:Smart project want to make it straightforward for apps developers to go into the hub, with a simple graphic interface, to “create, trial test and ultimately commercialise” services. “At the moment the hub is free to use. The hub is not commercial. We plan to make it commercial in 18 months.”

David Traynor, chief marketing officer of Aspider-NGI, a mobile virtual network enabler working with large carriers, said that machine-to-machine developments “are not innovative enough”. Global roaming “is a barrier” to services, he said. “How do we get open application program interfaces?”

Wirén of Volvo said that one of the challenges was car makers’ four-year development cycles. In the future cars “will be a platform where you buy access to a car”. The service provider “will learn where you are and what you want and there will be a car waiting for you when you want it”. But, he admitted, “there’s a fine line between being very scary and nice.”

Customer experience Wipro VP Vinay Firake followed by warning that “customer experience is really at the heart of survival itself” at a time of “intense competition and hyper-consumerism”. Operators need a view of customers across multiple products.

“If a customer calls and says, ‘Where is my order?’, we can accurately say where it is — even if it’s a complex product.”

Mary Clark, CMO of Syniverse, spoke about the attraction of free roaming. She compared the situation in the US — where “retail roaming disappeared in 1999” — with that in the rest of the world.

In Europe, even though the cost of roaming has fallen, “people still turn off roaming”. She said the industry had educated the user not to use roaming by charging too much, and they were risking $16 billion of revenue because of what she called “silent roamers” — people who rely on wifi when they’re abroad.

Operators should be saying, especially to high-value customers: “We know who you are. I can get to you. We can send you an offer.” That will reduce bill shock — and one company, she said, cut its roaming costs largely in order to save the cost of calls to customer service centres.

Fixed broadband How fast can fixed broadband go? “We’re seeing more and more customers buying ethernet connections,” said Steve Cole, ethernet product manager of Verizon Partner Solutions. “The metro ethernet market is growing in teens, and we’re expecting better growth. The price points will come down as we’re buying more.”

Tad Deriso, CEO of Mid Atlantic Broadband, also talked of the importance of carrier ethernet. Demand has exploded, he said: “We’re seeing customers that had five megabits two years ago now have 100-200 megabits.”

How fast is fast enough? “We’re struggling with that all the time. We’re in a rural market and the question is the affordability. There is a need for speed, but at a price point.”

He put that at “$30-$40 in our community”, and asked: “We’re seeing one gigabit in rural towns and communities.

Do they really need that?”

Yes, sometimes, said Mohammed of Dalkom, who lives in the Kenyan capital. “In some gated communities in Nairobi there’s a demand for one gigabit per second per household,” he said.

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Mary Clark, Syniverse: Retail roaming disappeared in the US in 1999 but in Europe the industry has educated the user not to use roaming

Syniverse’s Clark had already warned that operators need to be aware of the challenges from Google, which is rolling out a mobile phone service, starting in the US. Now Tamas Paloczi of Deutsche Telekom said that of the over-the-top providers, “the big ones like Facebook Messenger and WhatsApp are offering an obvious threat to telcos”.

He added: “We’re not in an industry that is rocketing.”

Operators need to go into partnership with the OTTs, he said. “YouTube accounts for 24% of mobile traffic. Facebook chat is 22% of instant chat. Netflix has 30 million streaming subscribers.”

Brendan O’Rourke, chief information officer of Telefónica O2 in the UK, said that operators were moving into OTT applications. Telefónica has an app called ToGo, which lets customers call or text via wifi anywhere in the world without incurring roaming charges — “or in your home if you have poor mobile coverage”.

ToGo was developed inhouse. “I operate a lab of 20-25 people,” said O’Rourke. Telefónica now offers the app in the UK, Germany and Brazil, he added.

Kobus Smit, head of voice and messaging, also warned of the power of OTTs. “Operators have to be competitive and relevant in a world where they’re fast becoming irrelevant because of competition from very good products from OTTs,” he said.

Smit does “the boring stuff”, he said, because he believes in developing services based on existing mobile voice and SMS standards, “and making them better”.

He complained that, as operators, “we hadn’t done anything to improve our services”. OTTs have “fast innovation cycles”, but operators “can benefit from that, and where possible we will partner with them to make sure it works well”.

There is “serious competition out there”, he said. “WhatsApp is very impressive, but we have the mobile numbers and they are the key identifiers.”

Gregor Kastelic, director of IT and services at Mobiltel in Bulgaria, said: “Innovation for us is a must. We have succeeded in reducing the time to market not from months to weeks but from weeks to days.”

The company is working with Amdocs in a highly competitive market, and now it is able to react to competitors’ offerings. “In three days we are able to provide a better offer,” he told the Innovation Summit. Q Global Telecoms Business: May/June 2015 97

Télécoms Sans Frontières

‘I’m still alive,’ Nepalese earthquake survivors tell their families, thanks to TSF satellite phones urvivors of the Nepal earthquakes made almost 3,000 minutes of phone calls to their relatives thanks to satellite phones brought into the disaster zone by Télécoms sans Frontières.

People from 1,581 affected households were able to let family members know they were still alive, after the devastation caused by the two earthquakes in April and May. The TSF team arrived in Nepal within three days of the first earthquake, which struck with magnitude 7.8 on 25 April. TSF was quickly able to provide services to local and international aid agencies, including search and rescue teams from the Netherlands, Poland, Singapore, China, the US, the UK, Germany, Spain, France, Norway, Belgium, Japan, Switzerland and Canada.

TSF sent emergency response teams to villages and communities, offering free national or international calls using satellite lines. These calls are the opportunity for the affected population to reach out for help, often asking for financial or material aid

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Télécoms sans Frontières flew its teams into Nepal within three days of the first devastating earthquake, providing relief support and allowing survivors to call their families from their friends and family abroad, or sometimes, a simple call just to inform their loved ones that they are fine after the earthquake hit their community.

Two examples of how TSF team members were able to help: One man broke his leg while cutting wood to try to rebuild his house.

Villagers found him and carried him back to the camp where TSF was carrying out its calling operations.

A Nepalese rescue officer used a TSF phone to summit a helicopter, which arrived 20 minutes later to take him, along with other injured villagers, to a field hospital for treatment.

A few weeks later a woman in one of the temporary camps asked if the TSF team if could go and see her 87-year-old father in his tent. He had injured both his legs during the first earthquake and had not been able to move since.

With TSF’s help, he called his daughters and grandsons, who were extremely moved to hear his voice and relieved to learn that he was still alive.

After the first earthquake TSF sent staff from its offices in France and Thailand, and the teams continue to be reinforced throughout the duration of the mission. All connections are put in place to deliver common services to all.

Coordination in Nepal is challenging because many areas are extremely difficult to access. Thanks to TSF, satellite lines and internet connections mean that rescuers are able to share information, reports, damage and needs assessments within the humanitarian community. They work together to identify priority areas and to transport aid to the remote populations of the Himalayan foothills. Q

Global Telecoms Business will be supporting Télécoms Sans Frontières by publishing regular reports Communications for life about its activities. TSF continues its valuable work through contributions from the telecommunications industry.

For more information and to learn about ways to support the charity, see www.tsfi.org Supporters of Télécoms Sans Frontières throughout the industry can now donate online using PayPal to help its work around the world.

Earthquake survivors in Nepal call members of their families using TSF’s satellite phones

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A donation of $10 offers a threeminute hope for three refugee families or disaster victims anywhere in the world or supports the transmission of a two megabyte file of priority health care needed by humanitarian workers in a crisis. A donation of $1,500 finances the connection of a Telecom Community Centre in remote areas for three months.

US supporters can donate in dollars, tax free. UK supporters can increase the value of their donation in pounds through Gift Aid. Those making euro payments will receive a donation certificate which may be used for tax deductions. For details go to tsfi.org/en/ donate-on-line

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GLOBAL TELECOMS BUSINESS

POWER100

Who will be the Global Telecoms Business Power 100 for 2015?

The deadline for this year’s Global Telecoms Business Power100, our annual list of the 100 most powerful a people in the telecoms industry p worldwide, is on Monday 3 August. w W asking readers for nominations We now. n W published the first list at the end We of September 2008, to mark the o 100th print issue of Global Telecoms Business, so this is the eighth time we’ve produced our list of the top 100 people in telecoms. The list features senior executives from operators and vendors, regulators, international organisations and investors, from all parts of the world.

2015?

Eric Schmidt, chairman and CEO of Google, was number one in the first list. He was followed in 2009 by the late Rob Conway, then CEO of the GSM Association. The following year AT&T’s Randall Stephenson led the Power100.

Number one in 2011 was Hamadoun Touré, then secretary general of the International Telecommunication Union, and in 2012 it was Dan Mead, CEO of Verizon Wireless, the world’s biggest LTE operator. In 2013 AT&T’s Stephenson led again.

In 2014 the judges went back to social media world, and picked Facebook’s Mark Zuckerberg.

So who will feature in this year’s Global Telecoms Business Power100?

And who will be number one this time?

GTB will be publishing the Power100 for 2015 at the end of September, in print and online.

Deadline: Monday 3 August 2015

It’s up to you. Send in those nominations now, please.

By Monday 3 August Go to www.globaltelecomsbusiness.com and follow the link to GTB Power100

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