Comverse Special Report Moriana Report by Prestige Media

C o m v e r s e : Tr u e C o n v ergence. The Future for Communications Providers Worldwide

True Convergence. The Future for Communications Providers Worldwide. Special Moriana Report February 2009

Executive Summary The communications landscape continues to change rapidly. Each advance in network technology makes it possible to offer a wider array of services, enabling operators to expand offerings beyond voice, video and Internet access. There is greater opportunity than ever before to bundle services and structure combined promotions, increasing revenue potential, and creating a new, more interactive relationship with consumers. To take full advantage of this opportunity, operators need to be able to monetize the hottest new devices and the coolest new services quickly. With all players more or less capable of delivering the same services, the only true competitive advantage comes from the ability to conceptualize and roll out – faster than the competition - compelling offers that include new services. Even while operators have invested heavily in network upgrades, vital business support systems have often not received the attention they require to be able to support true market agility. Legacy billing, charging and customer management system limitations can interfere with the ability to launch new services or respond to competitive threats quickly. Systems that were specifically implemented to support a much simpler line of offerings often make it more difficult to get to market as your portfolio expands. Making the picture even more complicated is that beyond technology changes, customer expectations— both consumer and enterprise—continue to increase. Customers today are “always on” consumers, demanding 24/7 access and the ability to self-tailor plans that cater to all of their requirements. The only way to give them the real-time, rich experience that keeps them loyal is to move toward true convergence in backend systems. True convergence is ideally delivered through a single system built to support all aspects of convergence - service, network and payment. This enables operators to give customers the degree of control and flexibility they need, as well as making it possible to have the agility and speed-to-market that enables effective competition.

Comverse: True Convergence. The Future for Communications Provider s Wo r l d w i d e .

Without significant changes to their legacy environment, providers cannot compete with those operators who have already broken down the silos that segregate payment or customer types and can now offer flexibility and converged billing.

The current state Problems with Legacy Systems Across the globe, communications companies are struggling to update legacy systems with the cutting edge technology that enables advances in what they are able to offer their customers. As new services were added, many carriers were forced to patch systems together to try to support business evolution. As a result, many find themselves with a multiplicity of technologies and repositories of customer information. The piecemeal approach led to such complexity that flexibility, time-to-market, and customer responsiveness have been sacrificed. Within most legacy environments, it is difficult to configure new offerings, introduce new products to the market, or improve the customer experience. Legacy systems are sometimes incapable of handling new charging models suitable for the new services, requiring expensive and time-consuming customizations that make matters worse when the next requirement change comes along. Customers expect seamless billing and service delivery systems With so many systems in place, it is rare for a service provider to have a complete view of their customers, let alone a real-time view of customer activity. Both are required to meet ever-increasing customer expectations. When the same customer exists in multiple service silos, bringing that single customer into focus is nearly impossible. For instance, a customer in the old service model might be considered either prepaid or postpaid, not both. Today, customers expect to be able to select different payment types (including a hybrid of prepaid and postpaid) for different services, or for different family/group members. They also expect a seamless billing and service delivery system when they add services, change plans, or add family members or new employees to an existing account. Without significant changes to their legacy environment, providers cannot compete with those operators who have already broken down the silos that segregate payment or customer types and can now offer flexibility and converged billing.

C o m v e r s e : Tr u e C o n v ergence. The Future for Communications Providers Worldwide

Figure 1 – Legacy complexity vs. single system

Why true convergence is the answer to future customer interactions. While an ad hoc approach to meeting market demands may have worked thus far, providers who rely solely on point solutions to solve the dilemma of taking advantage of new technology without eliminating the complexity of legacy systems will ultimately miss the opportunity to take the next step in evolving their products and services to compete most effectively. True convergence delivered through a single system, not through integration - middleware-based or otherwise - enables that next step. Comverse, with its Comverse® ONE™ Billing and Active Customer Management™ solution, is a company that has invested significant development into converged billing and customer management. They have created a system that is built around a single data model, designed to handle any service, any network, and any payment type. Building on Comverse’s strong legacy both in network-based (real-time) and IT-based billing, Comverse has the expertise to deliver converged prepaid/postpaid billing. With its modular architecture, the Comverse ONE solution can be implemented in phases if desired – as part of a phased transformation, for example. Once implemented, it can easily be managed and configured by your company’s own staff—yielding a high level of self-sufficiency and ensuring you can react to the next wave of changing requirements without long and expensive customization or integration projects. Holistic approach built around a single data model The holistic approach of building around a single data model means that customer information is consistent across all touchpoints. Add in the real-time capabilities of the system and operators are able to give customers the choice of channels they demand, each delivering a rich and interactive experience. The single data model approach also enables a single product catalog, making it easy to construct bundles and offers that cross service lines, tailor offers for specific segments, and roll them out across multiple sales channels simultaneously. Furthermore, a single unified system is inherently more efficient to operate. System redundancies are eliminated, and operational efficiency rises as the overly integrated and overly complex legacy environment is retired.

Comverse: True Convergence. The Future for Communications Provider s Wo r l d w i d e .

Perhaps the most important part of planning for the future is to realize that it’s not just the technology that’s changing: it’s the relationship with customers.

Figure 2 True convergence yields better user experience.

Not just evolving services—evolving customer relationships. Real-time interactions give customers the best experience, as well as the most control and flexibility. Customer self-service is easier to implement with a holistic system, because there is a single, consistent source of customer data. Customer perceptions of this consistent experience result in higher satisfaction. Providing a seamless, real-time, self-service experience for customers has become as important as providing the packages and content they demand. The easier you make it for them to add and combine services and change billing options, the better the experience for them. A converged system gives you the ability to fulfill customer demands for flexibility and personalization easily and at minimum cost and effort. Real-time rating for prepaid, combining prepaid and postpaid elements in one hybrid offering, letting customers configure their own packages—it’s all possible through the single system approach which delivers true convergence. For instance, parents can manage an entire family’s communication needs via the Web. They can add or subtract minutes, features and extras from their postpaid wireless service. They can monitor in real-time their children’s prepaid service and make decisions about adding minutes or incorporating parental controls. They can choose premium cable channels or check usage of on-demand programming—at any time that’s convenient for them. A holistic approach to true convergence enables a true partnership between operators and end-customers. Comverse has recognized the benefits and scalability of this model, accordingly building customer management capabilities into its Comverse ONE solution. Comverse uses the term ‘active customer management’ to describe the real-time, interactive nature of their capabilities. Comverse also recognized that most operators take a phased approach to transforming legacy environments, and so developed Comverse ONE as a modular solution. Their product-based approach is designed to accommodate a variety of deployment approaches, all able to be augmented over time with additional capabilities – still built around the same data model.

C o m v e r s e : Tr u e C o n v ergence. The Future for Communications Providers Worldwide

Summary Delaying the move to true convergence is a strategic error on the part of communications providers. Short-term solutions can indeed be patched onto existing systems; highly-integrated ‘best of breed’ approaches might seem initially attractive, but the high costs and operational limitations of these approaches make them ultimate dead-ends on the path to market competitiveness. Only true line-of-business, system, and payment convergence, delivered as holistically as possible, can enable the business results – in decreased costs and increased revenues - that will carry providers easily into the future. Comverse offers such a solution with the Comverse ONE Billing and Active Customer Management solution. Such a solution can be a strategic asset for operators in today’s tough environment.

Comverse, its logo, and the spark design are registered trademarks of Comverse Technology, Inc. or its subsidiaries in the United States and other selected countries. Other denoted product names of Comverse or other companies may be trademarks or registered trademarks of Comverse, Inc. or its subsidiaries, or their respective owners

Comverse: True Convergence. The Future for Communications Provider s Wo r l d w i d e .

About The Moriana Group The Moriana Group is an independent industry analyst focused on the market segment of next generation telecom services and telecom service layer infrastructure. Our mission is to facilitate Internet-Telecom convergence and the creation of an open market for telecom services by enabling free information exchange between equipment and software vendors, application developers and service providers. www.morianagroup.com