VanillaPlus CEO Supplement - Jan-Feb 2011 by Prestige Media

MOBILE WORLD CONGRESS 2011

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TALKING HEADS

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Business assurance is the Big Picture, says Rui Paiva, Chief Executive of WeDo Technologies

SPECIAL REPORT PREVIEW How network operators can maximise content revenues FREE DOWNLOAD!

MOBILE WORLD CONGRESS BARCELONA PREVIEW The customer, the network, and the bottom line

ACTIONABLE BUSINESS INTELLIGENCE Dr Hossein Eslambolchi on the next frontier in telecoms OSS / BSS

www.vanillaplus.com Check out the new VanillaPlus Videos

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PLUS! Video to make up over 60% of 2011 Mobile Network traffic Now all Business Intelligence users can customise reports Mobile Marketing Association gives mobile privacy advice

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Here we go again!

S5 TALKING HEADS Rui Paiva, CEO of WeDo Technologies

Is it me or does Mobile World Congress seem to come around quicker every year? Is it really 12 months since we last strode around the Fira Convention Centre looking for Hall 2.5 or another coffee? Well, a lot has changed since then, not least at VanillaPlus. The magazine now has a new Editor in the shape of George Malim, who returns to the role after five years off for good behaviour. It’s good to have him back and he is wellsupported by our new Contributing Editor, Mark Dye – another writer with whom VanillaPlus readers are already familiar. Once again, we’re delighted to bring you this supplement dedicated to Mobile World Congress. Inside you’ll find an exclusive interview with the CEO of WeDo Technologies, Rui Paiva (also on video at www.vanillaplus.com) in which he explains the growing importance of assuring your whole business, not just its revenue. And, starting on page S8, Georgina Elrington takes a long, hard look at the communications trends under discussion in Barcelona this year, and their impact on the customer, the network and the bottom line.

S8 MWC 2011 PREVIEW

A year ago I sat down in the Spanish sunshine with Mac Taylor, Senior Analyst at The Moriana Group to discuss how our two organisations might work together. The results have included some excellent webinars – thank you, Mac – and we’ve just launched a Special Report (Free to download from our website) on how to maximise your content revenues. You’ll find a Preview on page S11. Finally, we’re proud that Dr Hossein Eslambolchi (yes, that Eslambolchi: ex- of AT&T, IBM, and now at Subex) has chosen VanillaPlus in which to describe the next frontier in telecoms OSS / BSS. We hope you enjoy the show.

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Jeremy Cowan, Editorial Director VanillaPlus & M2M Now magazine BUSINESS INTELLIGENCE

WeDo Technologies’ Business Assurance solutions address the optimisation of both Business Performance and Risk Management systems and processes, aligning these critical goals in order to achieve maximum shareholder value protection. Over the past nine years WeDo Technologies has created a significant worldwide implementation footprint in industries such as telecommunications, healthcare or financial and insurance services. WeDo Technologies is owned by the largest non financial Portuguese group – Sonae Group with 61,000 employees in 18 countries and is active in Retail, Real State, TMT, and the Wood industry. With the merger of WeDo Consulting and Cape Technologies, WeDo Technologies clients will have access to a best of breed portfolio of products and solutions to meet their business and process assurance needs. www.wedotechnologies.com

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Welcome to Barcelona & Supplement Contents

News

Talking Heads, Rui Paiva, CEO of WeDo Technologies

MWC 2011 Preview

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How network operators can maximise content revenues

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The next frontier in telecoms OSS / BSS

EDITOR & PUBLISHER Jeremy Cowan Tel: +44 (0) 1420 588638 editorial@vanillaplus.com DIGITAL EDITOR Nathalie Bisnar Tel: +44 (0) 1732 808690 nathalie@vanillaplus.com BUSINESS DEVELOPMENT DIRECTOR Cherisse Draper Tel: +44 (0) 1634 243869 cherisse@vanillaplus.com

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NEWS IN BRIEF

InfoMini allows all users to customise BI reports MMA creating mobile privacy guidelines The 700-member Mobile Marketing Association (MMA) has launched an initiative to develop a comprehensive set of mobile privacy guidelines to Greg Stuart, complement its Global CEO of existing Global Code of the MMA Conduct. The aim is to meet the growing need for marketers and consumers to have a clear understanding of how consumer information is collected and used for value exchange within a mobile marketing context and across market sectors. “The launch of this initiative shows the MMA’s and mobile industry’s ongoing commitment to the importance of consumer transparency with regards to privacy issues and data collection,” said Greg Stuart, Global CEO of the MMA. “The industry recognises that in order for marketers and publishers to responsibly and sustainably engage consumers through and with the mobile channel, we need to continuously update how we address the collection, management and use of personal data or related consumer information.” The MMA has called on media companies, mobile carriers, marketers, agencies and media technologists to participate in its Privacy Committee which was discussed at the MMA’s Consumer Best Practices (CBP) meeting, from January 25-26 in Boca Raton, Florida. The CBP meeting is the MMA’s annual forum that facilitates an open dialogue around the mobile marketing industry’s consumerengagement, self-regulatory principles and guidelines, including best practices for messaging, mobile web, applications, advertising, commerce and privacy. The privacy initiative will help marketers and media companies understand how to appropriately engage consumers directly through the eight mobile media paths (SMS, MMS, email, voice, applications, mobile internet, content and proximity channels) and with mobile when used in a traditional media context across various market sectors, such as consumer packaged goods, retail, financial services and healthcare.

Information Builders, an independent provider of business intelligence (BI) systems, has developed a specialised tool to help business analysts build applications for nonRado Kotorov, technical end users to Information generate their own Builders: customised reports, Feature dashboards and overload for non-technical gadgets. InfoMini, a users is an tool in WebFOCUS issue with too InfoAssist, enables many BI tools business analysts and end users to choose the information they receive from their BI system with the push of a button, displaying only the information specific to their needs for faster, more informed decision-making. With InfoMini, rather than viewing a static html report that has too much information, a business analyst can easily build an application to customise or filter a report into any format an end user needs. For example, a brand analyst who creates reports for brand managers can now build and send an InfoMini application, allowing the end user to change the data, filters, formats, and more for their particular needs. These tasks used to be delegated to the IT

department, but the ability to create these specialised BI applications is now in the hands of business analysts. Users can also tailor the interactive features on an InfoMini report on a case-by-case basis. This feature allows specific conditional styling, formatting, or functionality to be applied to tailored interactivity on any individual report without manual coding. Business analysts can also build and publish gadgets (or mini-applications similar to an iGoogle widget) that connect directly to the BI system to pull customisable information and reports. For example, if employees in the sales and finance department are collaborating on a single report, different filters on a gadget can easily be applied by anyone in either department to include only the most relevant information. “The issue with many business intelligence tools for non-technical users is feature overload,” said Rado Kotorov, Chief Innovation Officer, Information Builders. “Ideally, what most business users want is a way to cut to the chase with their data – getting only the information they need when they need it and filtering out the rest. InfoMini helps non-technical users do their jobs more efficiently by helping them apply the right changes to their reporting so only the information they want appears, with minimal interaction with the technology.”

British Library launches first smartphone app The home of some of the world’s rarest written and printed treasures, the British Library has launched its first smartphone app. Created with Toura, a leading technology platform for mobile guides, the ‘Treasures’ app, presents a selection of the items featured in the library’s Sir John Ritblat Treasures Gallery. ‘Treasures’ is available across multiple mobile platforms, including iPhone, Android and iPad.

It will provide a multimedia experience including 100 of the library’s greatest collection items, 250 high-definition images, over 40 videos with expert commentary, textual interpretation, and up-to-date information about current exhibitions. App users can experience items such as the first edition of Alice’s Adventures in Wonderland, the world’s oldest bible Codex Sinaiticus, Galileo’s letters and Leonardo Da Vinci’s notebooks.

The manuscript of Beowulf is one of the British Library's Treasures Supplement Sponsored by

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A snapshot of WeDo Technologies The latest report in this area by Stratecast, a division of Frost & Sullivan, concluded that the global revenue assurance market was worth US$235 million in 2009 and that WeDo Technologies held the largest market share at 25%, with the next place competitor on 16%. And in a wider study by Gartner of the whole revenue assurance and fraud management estate, WeDo Technologies had risen to second place with a 7% market share, just behind NEC/NetCracker (11%) and ahead of such blue-chip names as IBM, AlcatelLucent (both on 6%) and Ericsson (5%). WeDo Technologies is owned by Portugal’s largest nonfinancial group, Sonae Group, with 61,000 employees in 18 countries.

Business assurance is the Big Picture

Rui Paiva is Chief Executive Officer of WeDo Technologies

Estimates vary, but in recent years it is thought that telecoms network operators have lost somewhere from 5 – 15% of revenues through an inability accurately to measure telecoms events involving multiple network technologies, partners and support systems. So, revenue assurance system users and vendors have had to adapt from pure revenue assurance to assuring the whole telco business.

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To look deeper into these challenges VanillaPlus’s Editorial Director, Jeremy Cowan, recently flew to Lisbon to interview Rui Paiva, the CEO of WeDo Technologies. Established in 2001, WeDo Technologies has more than 100 customers spread across 73 countries, operating in telecommunications, retail, healthcare, utilities and finance. Among other disciplines, WeDo Technologies provides software and services for revenue assurance, fraud and roaming management, collections and credit control, data retention and customer value management. Today, seven out of 10 of the world’s largest mobile communications service providers (CSPs) are its customers.

“We are (also) planning to work in three non-telecom areas; retail, finance – mainly insurance – and in utilities – mainly energy.” - Rui Paiva, WeDo Technologies

CEO GUIDE SUPPLEMENT VANILLAPLUS FEBRUARY/MARCH 2011

Revenue Assurance Gains Momentum Revenue assurance has been something of a success story for telecoms over the last decade. Operators, with support from vendors, have managed to plug many of the most immediate revenue leakage gaps. But maybe that should be seen as the low-hanging fruit – either way, many today believe that this is where revenue assurance starts to get a lot harder. It’s not all doom and gloom though. There are considerable opportunities outside telecommunications. So, perhaps the winners will be those who can manage multiple data flows across whatever vertical the customer requires, in order to improve business processes. Certainly this has already proven attractive to Orange, Vodafone and VimpelCom who are all on WeDo’s order books. Until recently, the talk was mainly of revenue assurance, and business assurance – also known as profit or revenue protection – was not in the telecoms lexicon. That all began to change a couple of years ago as telcos focused harder on the wider picture of business performance and less narrowly on revenues. Today, one of the simplest definitions of business assurance is “using systems to improve operational effectiveness and manage risk”. This has always been seen as an important concept, by the business community, but it is only in recent years that the software industry has finally been able to deliver the right tools at the right price and turn this concept into everyday practice. This has involved solving several major challenges, including managing the huge amounts of communications and customer data in a way that is truly focused on business objectives. It has also meant working across multiple technology platforms and boundaries, and more often than not operating in real-time environments. Solutions such as these have only recently started appearing in the marketplace.

“All companies have one strategy at the beginning and then you adapt the strategy... But you also have to look into the market and try to adapt yourself to the market.” - Rui Paiva, WeDo Technologies

VanillaPlus: Rui, 2011 looks like being a big year for you, not least because it’s your tenth anniversary year. Looking back on it, how has WeDo Technologies developed over the 10 years? Rui Paiva: When we set up WeDo, we created the company nine months prior to the launch of the business. The idea was, from the beginning, to design something that could be global and something that we could replicate in each of the countries where we now operate. (WeDo Technologies now has regional offices or headquarters in 15 countries worldwide, from Australia to the USA, and Chile to Singapore. Editor.) So, that means for nine months we just set up all the processes, all the methodologies, all the rules and everything. We configured the systems, all our internal systems like ERP systems and everything, and only on the day that we figured out that we were ready, did we set the date for the launch of the company. That is the big difference from a normal company.

CEO GUIDE SUPPLEMENT VANILLAPLUS FEBRUARY/MARCH 2011

VanillaPlus: What lessons have you learnt in the development process? One of the things that interests me particularly is that you’ve changed your business strategy from pure revenue assurance to what you describe as business assurance. Can you elaborate on that? Rui Paiva: Regarding the strategy, all companies have one strategy at the beginning and then, during the years, you adapt the strategy, meaning the tactics for the strategy. But you also have to look into the market and try to adapt yourself to the market. That’s why we came up with this new strategy, which is something that has embedded the revenue assurance concept, but where we can not only control the revenue assurance but all the processes within a telco practice. So, for us, business assurance means all the business and each of the processes like revenue assurance (which is one of the processes), whereas it is part of that big pie, which is the business assurance concept. VanillaPlus: And what do you think will be the business drivers beyond 2011? That may be a tough one to answer. Rui Paiva: Well, it is very tough. If you know those and if you can share them with me I would

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Right now, in our core area, revenue assurance, we are the biggest player in the market. Stratecast says that we have 25% of the total worldwide revenue assurance market. And if we are looking to Gartner they say that we are the number two if we combine it with Fraud Management, because for now we are present in 15 countries around the world, on five

continents, with more than 400 staff – from 18 nationalities up to now.

appreciate it. Well, for us we are already working on the next few years. And the next few years for us are mainly related (within telecoms) to business assurance. That means more processes within a telecommunication project. So, that’s one area. And the other areas are related to new markets. And we are planning now to work mainly in three new market areas. One is retail, another one is finance – and within finance it’s mainly insurance – and another one is utilities, and within utilities it’s mainly energy. Because the system that we have is a kind of diagnostic system, so we treat events, and an event could be anything for us. It can be a telco event but it could be a non-telco event, it doesn’t matter. And then on top of that we treat processes where we can configure one process, and it’s industry agnostic. It could be a telecom process or a non-telecom process. The difference then is within the configurations. VanillaPlus: There’s been an awful lot of hype surrounding cloud services. What’s your view of the buzz that’s been going on in this area? Rui Paiva: Probably the three main types of player collaborating in the cloud will be: The telco operators’ connection; the other one is the IT providers, companies like HP and IBM; and finally the companies that supply applications. So, we are going to be part of that. I would say probably a partnership between the IT providers and the telco companies where they host systems, either within the telco or the telco will get the connections into the IT providers, and thus providing the applications. That’s the perfect game for all of us.

VanillaPlus Jargon Buster ERP = Enterprise Resource Planning

CEO GUIDE SUPPLEMENT VANILLAPLUS FEBRUARY/MARCH 2011

MOBILE WORLD CONGRESS 2011 PREVIEW

The Customer, The Network, The Bottom Line After hearing from some of this year’s exhibiting BSS / OSS companies ahead of the event, VanillaPlus reports on the most likely discussions to arise at MWC 2011. And the word on the street, says Georgina Elrington, is that the sector buzz will surround the data explosion; how to cope with demand from an infrastructure perspective, QoS and profitability. The beginning of the multi-dimensional era The boundaries between services, channels and devices are blurring. Increasingly, new devices – with a focus on automating the house, connected consumer electronics and new media delivery – are coming to market.

The author is Georgina Elrington, a freelance IT and telecoms writer

Rebecca Prudhomme, Amdocs: Exponential growth in data consumption at the top of CSPs’ agendas

Amdocs describes this as an emerging age of multi-dimensional convergence, in which service providers can play a pivotal role. However, this adds to the pressure to migrate from legacy back office systems to those that can offer customers a differentiated converged experience while optimising and consolidating operations. Rebecca Prudhomme, VP Product and Solutions Marketing at Amdocs, feels that exponential growth in data consumption will be at the top of service providers’ agendas, as they seek to find the best strategies to help realise the full revenue potential of data services while minimising costs. As such, Rebecca expects that a major theme will be monetising the data explosion and management of the capacity crunch. While this may involve innovative pricing models, traffic prioritisation and services that guarantee QoS, there will be more scope for service providers to generate additional revenue streams.

“With information overload and the existence of multiple communication channels, there is a growing need to move from a medium-centric comms model, to a usercentric one: a model that is increasingly prevalent in the consumer world. Smartphones have started pulling together communications and information in a way that is easy to manage. Now, the business world must follow suit.” - Ken Denman, CEO of Openwave Systems Ltd Data congestion Increased levels of real-time data consumption will require effective network congestion solutions and control policies. Ken Denman, CEO at Openwave Systems, said: “As more operators experience network congestion challenges (some resulting in well-publicised outages) they are coming to terms with the fact that demand is outpacing capacity. “Specifically, the rate of application development and the demand for mobile video means that many network providers won’t be able to add the physical infrastructure fast enough to accommodate the sheer volume of traffic headed their way. And even as they add capacity, they need to be certain that they are getting the most out of this costly investment,” said Denman. Ken Denman also notes that the mobile browser is becoming increasingly consistent

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The President and CEO of CSG Systems and newly acquired Intec, Peter Kalan, also indicates that 2011 marks the start of the “multi era”, consumers and businesses will have multiple devices, and multiple uses for those devices. With (Long Term Evolution) LTE and the cloud, applications, devices and usage will only proliferate even faster. So, at this year’s event, Peter expects to see a stronger focus on improving, understanding and delivering customer requirements. He also expects discussions around M2M (machine-tomachine).

“M2M is looming now and this is going to force CSPs to take another look at their fulfilment processes. I think the industry has a dawning realisation that M2M is a game changer for BSS / OSS,” said Teresa Cottam, Research Director at Telesperience.

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and powerful across all devices. “In November, converged communications became one of the hottest topics around when Facebook launched its new messaging service, Facebook Messages. While the technology itself is far from new, Facebook’s entry into the market suggests that converged communications is finally set to go mainstream.” QoS and QoE Kaynam Hedayat, CTO and Senior Director, Product Management, Service Assurance Division, EXFO, commented: “The transformation of the mobile switched network to a packetised architecture and exponential increases in network traffic, primarily from video content, will force mobile providers to re-think their operational and business processes; and there are a number of hot topics that are going to come up at Mobile World Congress which will impact this process.” He expects these to include mobile backhaul and migration to carrier ethernet transport, and the provisioning of more bandwidth per user.

Pricing and convergence “Tiered pricing provides a way to manage the demand side of the problem while giving consumers more visibility into their usage patterns and control over their data consumption,” said Openwave’s Denman. “Signalling traffic, a consequence of the always-on mobile experience, is an issue that has received little attention, yet needs to be addressed with some urgency. Effective solutions lie in more nimble policy management and optimisation techniques.” Policy and charging in convergent fixedmobile environments, is set to be a hot topic, says Michael Manzo, Chief Marketing Officer at Openet, as this year is poised to see fixedmobile convergence consolidated. As smart devices proliferate, and we spend more time online, roaming across different networks and spaces is increasingly the norm, necessitating their treatment as a converged entity. Operators will be looking to deploy policy engines across both arenas to manage them together in the most efficient manner. A scalable policy solution with flexible

Peter Kalan, CSG Systems: Expects a stronger focus (on) customer requirements, and talk around M2M

Kaynam Hedayat, EXFO: Hot topics include mobile backhaul and migration to carrier ethernet transport

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Ashutosh Roy, Chairman and CEO of eGain, is looking forward to discussions around the impact on BSS / OSS, such as customer care and inventory management, as smartphones become mainstream. He senses that the step change in the complexity associated with smartphones is going to stretch customer service organisations, potentially leading to an

increase in returned devices as new consumers may struggle with connectivity, apps and battery life issues. Therefore, high rates of ‘no fault found devices’ (from returns of products that are not truly defective) could cause major problems for mobile phone supply chains and affect profitability.

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MOBILE WORLD CONGRESS 2011 PREVIEW

parameters, and charging plans with controllable variables, will be attractive to operators looking to monetise effectively over the unified space.

Dan Joe, Napatech: More data at higher speeds

Gordon Rawling, Oracle Communications: For CSPs 2011 will see expansion of cloud services

VanillaPlus Jargon Buster B/OSS = Business / Operations Support Systems QoE/QoS = Quality of Experience / Service

“Account flexibility is improving, and the competition is on for operators to provide the most appealing options for users; and clever policy management can redirect customers to a platform for purchasing the next price tier.” Michael Manzo, Chief Marketing Officer, Openet Michael adds that another key topic to look out for will be policy for Long Term Evolution (LTE), particularly for VoIP. He said that operators have long been considering how they are going to manage LTE networks, and part of their development involves building policy elements into the LTE standards. Operators weren’t so on the ball when it came to monetising 3G networks so they are taking a more proactive approach for 4G. Plans for VoIP over LTE networks are also strongly on the agenda, which will take a lot of behind-thescenes testing in labs, and careful policy considerations to ensure functional monetisation when capabilities go live. Real-time data collection Dan Joe, VP of Marketing at Napatech, commented that: “One of the issues that will face BSS / OSS vendors in coming years is the explosive increase in mobile traffic and thereby bandwidth requirements of the network. In short, there will be more data at higher speeds in the network, which will raise the need for real-time data collection. The mobile network is also being used for more services, which will require more servicespecific intelligence closer to the network. “The transition to all-IP networks makes these requirements all the more important. This can mean that BSS / OSS vendors can no longer rely on network equipment for their data collection needs. These nodes will be under

pressure to keep up with the explosive growth in mobile data that is forecast. An alternative is to use dedicated data collection devices in the network that are non-intrusive and thus do not interfere with the network, but entirely controlled by the BSS / OSS vendor,” said Joe. “These data collection devices ensure that real-time data can be collected, processed and forwarded precisely to the requirement of the BSS / OSS vendor. It is possible to build such devices using off-the-shelf, standard PC servers today, which provides an affordable path forward,” he added. Cloud Oracle Communications’ Director of EMEA Marketing, Gordon Rawling said that the cloud will be another subject on the MWC agenda, as 2010 saw CSPs such as AT&T and Verizon increase their cloud service capabilities. So, 2011 will be a year of expansion of cloud services for many CSPs, and increasingly, other such companies will look to realise their potential for monetising the cloud. But they need to be able to ensure a delivery capability that will balance their offerings and ensure a profitable cost base. The commercial potential for provisioning cloud services to enterprise customers is significant, and CSPs have a critical differentiator for enabling cloud computing – the network itself. CSPs already have a relationship with their enterprise customers and these are relied on for critical communications services. As such, to offer extended cloud services could be seen as a logical progression of that business relationship. By positioning themselves at the heart of the cloud and getting end-users to operate through it, CSPs can greatly increase their network traffic revenues. However, they do need to be mindful that the initial costs of provisioning cloud services will not exceed the profits that are there to be made. There are a number of challenges associated with the cloud – not least in terms of encouraging uptake amongst users – and these are likely to be discussed in and around the meeting rooms and bars of Barcelona.

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SPECIAL REPORT

How network operators can maximise content revenues In a brand new report (which can be downloaded Free from vanillaplus.com) prepared jointly by VanillaPlus, The Moriana Group and Intec (now a subsidiary of CSG Systems) the authors suggest that CSPs have a powerful opportunity to compete with OTT (over-the-top) players and grow their businesses with new services, content and applications. Here, Mac Taylor, Senior Analyst at The Moriana Group, assesses the challenge and recommends actions that CSPs should take to ensure they successfully maximise their content revenues. The key to this success is forging the right relationship with application developers and content partners. To date, this relationship has not always been successful. However, the OTT model and particularly that of Apple shows how the right focus on developer needs can generate great success. Furthermore, developers themselves have shown in surveys that they want to work with operators and would value having the right network access, in particular billing and charging APIs. In the next decade the growth of computing will expand and diversify into multiple environments which leading to a myriad of new devices. Morgan Stanley (The Mobile Internet Report 2010) estimated that by 2020 there will be 10 billion or more devices making up the ‘mobile internet’. The devices will run applications and deliver focused and specific content. Most will be mobile and all will be linked together exchanging data and communicating in specific ways.

past few years, this relationship has been strained and is yet to fulfil its potential. There are many reasons for this. However, recent developments point to the emergence of new opportunities, which will enhance the possibilities of both groups. Secret the OTT players’ success The shining example of success in content and application creation, delivery and monetisation is Apple. The answer to the question why the iPhone app store is so special lies in the fact that both consumers and developers can quickly and easily discover and pay (or receive payment) for content and apps. Here’s a quick list of the factors that make the app store successful: For consumers • First centralised mobile application store front • Huge selection of free and low priced apps • Good app discovery and search • Easy to navigate marketplace • Easy payment and account management – credit card registration • One click purchase • Simple iTunes and iPhone syncing

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For developers • Robust SDK • Comprehensive and user-friendly development environment with 1,000+ APIs • Ability to embed maps, social networking and payment system Source: The Mobile Internet Report 2010 - Morgan Stanley

CSPs and developers become increasingly important At the centre of this new world two groups of players will become dominant. The first are communication service providers (CSPs) who provide communications, telecommunications infrastructure and data connectivity. The second are application developers and content providers: the creators of the applications and content that will run on the devices to serve consumers needs. A mutually beneficial economic association between CSPs and application developers will accelerate the development of this space as well as driving new value and wealth creation. In the

Source: The Mobile Internet Report 2010 - Morgan Stanley

CEO GUIDE SUPPLEMENT VANILLAPLUS FEBRUARY/MARCH 2011

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OTT and the explosion of data consumption

The author is Mac Taylor, Senior Analyst at The Moriana Group

Nevertheless, in the same survey, developers largely agreed with operators about the opportunity for a wholesale market in APIs to be used to enhance smartphones. In all, 90% of operators believe it is likely or very likely that there will be a wholesale market of network APIs used to enhance smartphones. 68% of developers think it is likely or very likely.

While data consumption has been expanding fast, in many markets CSPs’ profits and revenues have been falling. Overall mobile revenues are expected to decline for the first time during 20102011. In fact, average revenue per user (ARPU) has actually been declining for some time. For example, ARPU for Italian telcos companies declined from almost €30 per month in 2004 to just over €20 per month in 2009. In France, for example, the volume of call minutes across fixed and mobile will increase by only 9% from 2005 to 2010 – from nearly 190 billion minutes to 207 billion. However, OTT communications over the same period, including VoIP, peer-to-peer and instant messaging, increased by 211%, from 303 billion to 942 billion minutes. A challenge for the industry is to devise a way to better monetise this massive growth in over-the-top services.

Survey Results: Developers working with service providers Operators feel the top 3 reasons they are not yet working with developers are in order: • They need well-proven business cases before deploying apps • It’s too expensive in time and effort to form business relationships • They believe that developers prefer working with device app stores. Developers’ top 3 reasons for not engaging with operators were as follows: • Too expensive in time and effort needed to form a business relationship • Can’t find the right sales channel • Too hard to find the right operator.

If Google became an operator our problems would be solved. Mobile web developer Almost 70% of developers report little or no support from operators

VanillaPlus Jargon Buster API = Application Programming Interface ARPU = Average Revenue Per User OTT = Over The Top

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This is particularly the case when it comes to valuable network assets. Both operators and developers believe there is value in using network assets to enhance OTT apps. 78% of respondents in the Moriana survey stated that access to network capabilities would be useful in creating new apps.

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SDK = Software Development Kit

Is the Bit-Pipe an option? In a recent Moriana survey (July 2010) on the relationships between service providers and operators, from a sample of over 100 developers worldwide, 62% felt that in five years it was likely or very likely that service providers would be relegated to the role of a bit pipe (see table). Surprisingly, almost 50% of over 120 operators surveyed felt the same way. One of the reasons for this is the difficulty of working with developers.

The right way forward – leveraging network assets Clearly, although there is presently friction between operators and developers in some areas, given the right conditions and context both groups would be keen to work together.

The most important capabilities for developers were: billing and charging, location and user profile data.

Source: The Mobile Internet Report 2010 - Morgan Stanley

Furthermore in a developer survey conducted by Vision Mobile in March 2010, 50% of developers said they would be willing to pay for billing APIs.

Summary - the Smart Pipe option CSPs have a set of key assets, capabilities and unique advantages that if properly leveraged will enable them to compete well with OTT players, and add value and build relationships with developers and content partners. In a recent IBM survey (June 2010), internet communication providers and OTT players, were identified by 76% of telecom executives as the greatest competitive threat to their businesses over the next five to ten years – well ahead of traditional cable and content providers.

Success stories - the Japanese example Mary Meeker of Morgan Stanley has pointed out how Japan provides an advance marker for the development of telecom services in other markets. For example, 3G penetration is four years ahead of Europe and eight years ahead of the rest of the world. In addition, Japanese operators have been successful in developer relationships and driving new revenues in services, content and applications.

Source: The Mobile Internet Report 2010 - Morgan Stanley

The Japanese model has been successful in driving new revenues in paid services and retail m-commerce, by involving many application and content partners. While Japan is clearly a unique case and has distinct advantages and differences when compared to the rest of the world, it does show how a well-defined developer and partner strategy generates success.

The so-called ‘Smart Pipe’ strategy offers CSPs a way to compete and differentiate their businesses while attracting consumers with new applications. They can build strong partner relationships by attracting developers with access to business assets such as consumer information, billing and payments options, as well as trusted relationships they have with their customers and expertise in customer care. Below is a set of recommended actions that CSPs should execute to ensure success: 1. Continue and enhance global industry collaboration on common capabilities, enablers and platforms to facilitate innovation and improve competitiveness with global OTT providers 2. Enable new business models in adjacent vertical markets such as e-health, smart grids, transportation, retail and banking 3. Create clear value propositions for third-party application developers 4. Offer open interfaces to network capabilities and services enablers, and infrastructure support for common business process services (e.g., billing, CRM), 5. Develop a viable commercial model 6. Identify key business assets that can be exposed to partners and monetised accordingly. 7. Build a strong set of partner support strategies as the foundation to lasting relationships. Adopting these recommendations allied with the right strategy and the right execution along with professional support, CSPs have a clear and rational opportunity to build a profitable business in the years ahead.

This article summarises the themes developed in a Special Report produced jointly by VanillaPlus, The Moriana Group and Intec. Download the report FREE at: www.vanillaplus.com

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BUSINESS INTELLIGENCE

Actionable intelligence: The next frontier in telecom OSS/BSS Communication service providers (CSPs) have long talked about achieving better ‘business synergy’ through greater cross-departmental co-ordination and sharing of data. Unfortunately, says Dr Hossein Eslambolchi, ‘synergy’ never seems to get a high enough priority.

The author, Dr Hossein Eslambolchi, is Chairman of 2020 Venture Partners and the Advisor on Strategic Matters at Subex Ltd

Historically, different departments in a CSP – finance, billing, marketing, network engineering – have built or bought their own systems, with little thought as to how to share data and make it truly useful across the organisation. However, CSPs today are realising that they cannot continue to operate in this way, as it puts them in danger of falling behind at a time when the telecom business is changing so radically.

Yes, they can roll up performance data at a macro level to produce a quarterly report for stockholders, but as they say, ‘the devil is in the detail’. The most valuable intelligence here is not the macro intelligence provided by existing DW/BI systems, but actionable intelligence – the ability, for instance, to look at the revenues and costs associated with individual subscribers, business customers, or products. Without that low level of detail, business decisions about the prices, offers, and markets for a niche telecom product or service are mostly guesswork. Why? Because no granular data

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Not only are telecom margins getting thinner and the list of competitors growing, but the sheer number of services and the way those services are being offered has exploded. Plus, many of the services, such as content, are offnet services that the CSP neither owns nor controls. In short, it's much tougher to understand the bottom line impact of decisions on purchasing, third party partnering, prices, discounts, offers, network build-outs – even customer support policies.

Little business monitoring Now telecom departments certainly know that greater co-ordination and better data exchange would help, but each is saddled with its legacy data and processes. What they lack is an internal data currency and mechanism for monitoring business performance.

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exists on which to base an informed decision. Not only is the kind of intelligence important here, but also the timeliness of it. Because DW/BI systems typically run in an offline mode for analysis and reporting purposes, they are not meant to provide intelligence in an operational time frame. CSPs are finding that expecting this of their existing DW/BI infrastructure is like asking an elephant to dance – they’re just not built for that purpose. Thousands of data sources Therefore, having the right software platform is critical, because it will need to aggregate and correlate data from hundreds, if not thousands of data sources. In addition, it needs an ability to collect, classify and roll up data records into a robust hierarchy in near-realtime. It also needs to be able to: • Apply different types of business logic to this data, depending on the specific business problem to be solved • Run automated analytics on this data, to identify micro trends which are operational in nature • Present the information so gleaned in a manner that business users can make sense of it and ‘play around’ with it (to do what-if analyses, for example) • Provide the CSP with a mechanism to act on this intelligence – trigger actions on this information, and to track such actions to closure. Once the above is in place, it can be used to solve a variety of business problems that CSPs are facing today. Possible applications include: • Computing the propensity of customers to make inbound calls to the call centre. If a CSP can identify this, and get a view of why certain customers are likely to call the call centre, they can potentially save millions of

dollars in call centre costs by proactively reaching out to these customers using a cheaper mode of communication (an email, for instance). • Giving CSPs granular visibility into their profit margins, such as margin by customer or customer segment, by product, by geography, etc. This information can be critical in making multiple business decisions – for example, how to respond to a price cut by a competitor? Or which customers to focus on most for retention policies? • Monitoring the performance of new products, such as actual versus anticipated uptake goals. This can include analysing trends in the outcome data to predict deviations before they occur (such as margins not succeeding in the future, even though they are on track today). Also, by carefully tracking, in near real-time, a number of metrics related to service delivery, CSPs can ensure that roll-out problems can be readily detected and repaired pre-emptively, before they negatively impact the customer experience. One company that identified this impending crisis before others is Subex. And the solution they have been recommending to address it is the ROC. The ROC, or Revenue Operations Centre, is a vision that a CSP can monitor their business through a virtual operations centre analogous to the NOC, or Network Operations Centre. While a NOC monitors network performance across specific nodes, regions, and layers, a ROC monitors business performance by analysing data that resides across a host of B/OSS systems from billing and provisioning to customer care.

“Like asking an elephant to dance – they’re just not built for that purpose” - Dr Hossein Eslambolchi, Subex Ltd

VanillaPlus Jargon Buster BI = Business Intelligence B/OSS = Business / Operations Support Systems DW = Data Warehousing

About the author Dr Eslambolchi is currently the Chairman of 2020 Venture Partners and the Advisor on Strategic Matters at Subex Ltd. In addition to serving as AT&T's CTO from 2000 to 2005, Dr Eslambolchi was President of the AT&T Global Networking Technology Services, President and CEO of AT&T Labs, and Chief Information Officer during his 19 years with the company. Dr Eslambolchi led the transformation of AT&T’s network, systems and services. Called "a bold, pragmatic visionary" by Business Week Magazine, Dr Eslambolchi holds 1,026 patents (431 issued and 595 pending). He has won numerous awards, including the AT&T Science and Technology Medal. Dr Eslambolchi is the also the recipient of a number of awards and honours that include: “Inventor of the Year” by the New Jersey Inventors Hall of Fame – apparently, only Thomas Edison and Albert Einstein were similarly honoured; “Top 25 Most Influential CTOs of 2005” (InfoWorld); named by Cisco IQ Magazine as “One of its 10 Internet Business Leaders” ; “One of the Premier 100 IT Leaders for 2004” (Computerworld Magazine); “Number 1 ‘mover and shaker’ in telecommunications”, for his visionary prediction of IP and MPLS worldwide nearly a decade ago (Light Reading). He is also a member of the Board of Trustees for SUSMA based in NYC and technical advisor to University of California School of Engineering where he started a centre called CNS, bringing together various engineering disciplines including nano-engineering fields. Dr. Eslambolchi earned a BS, MS, and PhD, (Phi Beta Kappa), in Electrical Engineering from the University of California, San Diego. Supplement Sponsored by

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