Vanillaplus August-September 2010 by Prestige Media

PR EV IE W AUGUST/SEPTEMBER 2010

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Quality of Experience is the next service differentiator says Tekelec’s new CMO PRICING MISTAKES! Lessons that telcos must learn OPERATOR CASE STUDY Churn falls, ARPU climbs in fixed-mobile convergence VIDEO PREVIEW New approach to SIM card provisioning ▼

OPINION If only I’d known then what I know now!

18-PAGE POLICY SUPPLEMENT – SEE INSIDE! ‘Telecom Versailles’ in the Wireless Revolution ▼

PLUS! Operators find Extra Capacity in same Spectrum • The Contract Hot List Annual Directory: Are You In It? • Vodafone Enterprise curbing Data Costs Webinar Preview: Microsoft Online Services • Pasta, the Mafia & OSS

IN THIS ISSUE

TALKING HEADS Susie Kim Riley, Tekelec’s CMO

EXPERT OPINION: PERSONALISATION

36 NETWORK PERFORMANCE

S15 POLICY MANAGEMENT 2.0

Tekelec, the session and mobile data management company, enables billions of people and devices to surf, talk, and text. Our solutions allow service providers to dynamically manage network resources and services, while providing end users with a consistent and personalised customer experience. We handle the complexity of today’s multi-generational and multi-vendor networks by enabling devices, protocols, services, and databases to securely and efficiently communicate with each other. Tekelec has more than 30 offices around the world serving more than 300 customers in more than 100 countries. www.tekelec.com

NEWS Contract, Product, Company and People News.

CONTRACT HOT LIST Major contracts awarded globally.

TALKING HEADS Tekelec’s new CMO, Susie Kim Riley, is confident that quality of experience will be the next service differentiator.

EXPERT OPINION: NEW BUSINESS MODELS Dr Ralf Guckert looks at the implications for CSPs of 50 billion connections, and rising.

PRICING FOR TELECOMS Mark Billige talks to Jeremy Cowan about recent pricing progress and problems.

EXPERT OPINION: PERSONALISATION You can order almost anything today from any device, says Uri Gurevitz, but it’s not always a simple experience.

VIDEO PREVIEW: SIM PROVISIONING A new approach to provisioning SIM cards is driving business agility. Watch the video at www.vanillaplus.com

CASE STUDY: VODAFONE GLOBAL ENTERPRISE Mark Allinson feels its time to make sure data costs don’t get out of hand.

WEBINAR REVIEW: CONTENT PARTNERSHIPS Steve Rogerson reports on the strategic value of content partnerships.

EXPERT OPINION: SERVICE ASSURANCE Find out the key steps to increasing subscriber satisfaction and reducing churn in mobile data services.

CASE STUDY: GLOBE TELECOM How one Asian operator has cut churn and built ARPU with a fixed-mobile voice strategy.

WEBINAR REVIEW: CUSTOMER CONTROL Enterprises want services and billing tailored to their needs. MeetingZone and MetraTech can advise. See the webinar at www.vanillaplus.com

WEBINAR REVIEW: ENTERPRISE BILLING How a flexible billing system is helping CSPs deal with enterprise customers.

LEFT FIELD OPINION If only I’d known then what I know now! Barbara Lancaster talks a friend into ’fessing up, and let’s him crow a little.

NETWORK PERFORMANCE Do you remember your first date? Richard Thomas does and it has lessons for us all.

EVENT PREVIEWS What’s On and Where to Go!

WEBINAR PREVIEW: MICROSOFT ONLINE SERVICES Join us on September 30 for a fascinating Case Study of Microsoft Online Services.

CLOCKING OFF! George Malim is listening hard to BSS/OSS, honestly. But he can’t get his mind off food.

VANILLAPLUS DIRECTORY You’ve just got time to get your company listed in our annual print and online directory.

POLICY MANAGEMENT SUPPLEMENT 18 pages of unrivalled information on how policy controls can shape a better business for service providers.

C-LEVEL VIEW: NETWORK EVOLUTION S4 Gareth Senior describes how CSPs are trying to manage an unprecedented period of change. EXPERT OPINION: THE MOBILE DATA BOOM Policy management is a flexible way for operators to address data challenges and opportunities, says Jonathan Downey.

EXPERT OPINION: CONVERGENCE Real-time charging and policy management must converge. Dave Labuda can explain why.

NO MORE THE GATEKEEPER As George Malim reports, policy management has become a sales tool.

S10

EXPERT OPINION: THE 3 Ps Valuable operator use cases surrounding policy, personalisation and profit.

S14

POLICY MANAGEMENT 2.0 Is this really about welcoming the Peasants to Telecom Versailles? Dan Baker explains.

S15

EXPERT OPINION: CONNECTIVITY Being connected is a privilege, John Aalbers says, that many take for granted.

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VANILLAPLUS AUGUST/SEPTEMBER 2010

Some telcos know the cost of everything but the value of nothing It made good sense to me, but you can judge for yourself by reading what Mark Billige of strategy consultants Simon-Kucher & Partners has to say on telecoms pricing (pages 17-19). Sure, there are hard truths for mobile operators: on 3G licences, flatrate data, and giving away free handsets in the hope of making a profit out of users later. I don’t see travel operators giving free rooms in the hope that I’ll get stuck into the mini-bar. But Mark sees real positives ahead, pointing to more usage- and value-based pricing, starting with SIM-only deals, low commitment tariffs, and pay-as-you-go (PAYG) plans for the iPad. Best practice can be seen in other industries, but telcos have many unused advantages. Jeremy Cowan, Editor, VanillaPlus

So, where did it all go wrong in comms pricing? Read Mark Billige’s searing analysis of why failings at C-level mean the pricing expertise within many operators is not being heard. And his upbeat assessment has lots to tell us all about Pricing Best Practice; strategies that operators should be following (charging customers for services they really value such as security, network priority, and personalisation), as well as some hilarious and toe-curling comments from ours and other industries.

EDITORIAL ADVISORS

John Aalbers, chief executive, Volubill

Dan Baker, Research Director, Technology Research Institute

Martin Creaner, president, TM Forum

Andreas Freund, VP Marketing, Orga Systems GmbH

Louis Hall, chief executive, Cerillion Technologies

Barbara Lancaster, president, LTC International

Gaby Matsliach, general manager, BSS Product Line, Comverse

Pat McCarthy, VP of Global Marketing, Service Delivery Solutions, Telcordia

Simon Muderack, COO, Tribold

Andrew Taylor, CEO, Intec

Mac Taylor, CEO, The Moriana Group

Andrew Wyatt, head of Solutions Management, Subscriber Data Management, Nokia Siemens Networks

In view of this it was timely to read a new pricing report from Christopher Nicoll at Yankee Group(1) . For example, he is concerned that TeliaSonera may not make enough from its PAYG plans for 3G and LTE dongles to cover data costs. AT&T is also scrutinised; he foresees a possible net revenue fall for the North American giant from US$6.7 billion to $4.1 billion under their new 2-tier data plan. There isn’t room here to do justice to the report but he, too, singles out value-based pricing, now being considered by TeliaSonera. He says: “In short, the price of a video or music download would include the network data cost, rolling content and transmission costs into one. This makes a lot of sense.” Profitability for CSPs obviously depends not just on pricing, but on managing bandwidth demand, and gaining a better understanding of what customers want and when they want it. VanillaPlus has gathered together policy virtuosos from three continents in a special 16-page Policy Management Supplement (in this issue). Read inside how our experts view a new generation of policy management systems as personalisation and sales tools, not just ‘bandwidth bouncers’. Reference: 1. Tiered Data Plans Are Not The Answer. Christopher Nicoll, Yankee Group, August 2010.

Chris Yeadon, director of Product Marketing, LHS EDITOR & PUBLISHER Jeremy Cowan Tel: +44 (0) 1420 588638 editorial@vanillaplus.com DIGITAL SERVICES DIRECTOR Nathalie Bisnar Tel: +44 (0) 1732 808690 nathalie@vanillaplus.com BUSINESS DEVELOPMENT DIRECTOR Cherisse Draper Tel: +44 (0) 1732 897646 cherisse@vanillaplus.com

VanillaPlus is distributed free to selected named individuals in EMEA who meet the Publisher's terms of Circulation Control. If you would like to apply for a regular free copy supplied at the Publisher's discretion visit www.vanillaplus.com If you do not qualify for a free subscription, paid subscriptions can be obtained. Subscriptions for 6 issues cost £99.00 worldwide (or US$150 / EUR125) including post and packing. VanillaPlus magazine is published 6 times per year.

SALES EXECUTIVE Lydia Harris Tel: +44 (0) 1732 897648 lydia@vanillaplus.com

VANILLAPLUS AUGUST/SEPTEMBER 2010

OPERATIONS DIRECTOR Charlie Bisnar Tel: +44 (0) 1732 844017 charlie@vanillaplus.com

Doug Zone, chief technology officer, MetraTech DESIGN Jason Appleby Ark Design Consultancy Ltd Tel: +44 (0) 1787 881623 DISTRIBUTION UK Postings Ltd Tel: +44 (0) 8456 444137 PRINTERS Printed in England The Magazine Printing Company Tel: +44 (0) 20 8805 5000 www.magprint.co.uk CIRCULATION Circdata Tel: +44 (0) 1635 869868 PUBLISHED BY Prestige Media Ltd. Suite 28 30 Churchill Square Kings Hill, West Malling Kent ME19 4YU, UK Tel: +44 (0) 1732 844017

MTN and Arieso sign 21-operator deal for MEA network planning and optimisation The multinational telecoms provider MTN Group, with operating companies in 21 countries across Africa and the Middle East, has signed a framework agreement with Arieso of the UK, a Shirin Dehghan, provider of locationArieso: aware network Improved management subscriber systems for mobile experience operators. Arieso uses location-aware subscriber information to quickly and precisely improve network performance and quality of service to the subscriber, based on actual end-user experience.

N E W S U P D AT E

Commenting on Arieso’s selection, Navi Naidoo, General Manager of Network Technology at MTN Group, said: “MTN’s rapid growth across different markets – together with the explosion in demand for mobile broadband in Africa and the Middle East– means we need powerful, scalable solutions that help us actively manage and optimise our networks. Arieso’s ground-breaking technology addresses this need, according to enduser requirements and our own CapEx and OpEx guidelines.” “Our group-wide agreement with MTN is a significant step forward in Arieso’s ongoing global expansion,” said Shirin Dehghan, CEO of Arieso. “We now look forward to working with the various MTN operators to deliver enhanced network performance and improved subscriber experience to all their customers.”

The agreement makes Arieso the preferred supplier of software and systems for subscriber-centric network design, planning and optimisation to MTN Group. All 21 of MTN’s operating companies will be able to use Arieso’s full suite of mobile network planning and optimisation solutions to manage and improve the performance of their 2G and 3G networks. MTN Group serves more than 123 million 2G and 3G subscribers across Africa and the Middle East.

A view from ariesoGeo of street level mapping

Telmap and Lonely Planet extend their partnership to O2 Germany Additional markets are also expected to launch the service soon. Lonely Planet information covers tens of thousands of destinations, over 800 cities and regions in more than 150 countries.

Following the integration of Lonely Planet’s travel information into Telmap’s mobile search, mapping and navigation solutions for South Africa, O2 Germany has become the second Motti Kushnir, partner to launch the Telmap: service. Through the Localised partnership, O2 search, Germany’s customers mapping and will now have access navigation to travel information from Lonely Planet through their Telmap system, directly on their mobile handsets.

Telmap provides white label, hosted and managed search, mapping and navigation solutions to mobile operators; offering a variety of locationrelated content such as traffic, speed cameras and points of interest information. “We look forward to helping O2 continue delivering its subscribers with localised, valuable search, mapping and navigation experiences. We are thrilled Lonely Planet join us in delivering high quality, targeted content to end users,” said Motti Kushnir, Telmap's CMO.

Monaco Telecom launches Oracle-based business transformation programme Monaco Telecom has selected Oracle Communications to assist in its business transformation program, Synergie, focused on convergence, customercentricity and quality of service delivery. In order to offer fixed, mobile, internet and television services in the Principality, Monaco Telecom needed to simplify its complex architecture. Currently, Monaco Telecom captures customer information in more than 40 different interfaces connected to four billing systems, four databases and four different business reporting processes. The company, already using the provider’s billing and revenue management, will work with Oracle Communications Consulting to implement the latest upgrade. Monaco Telecom will also implement Oracle Communications Order and Service management to deliver an integrated billing and provisioning system that spans the consumer and business mobile telephone, fixed telephone and internet protocol system markets.

Best Buy opts for Intec’s mobile service billing Intec has successfully deployed a suite of mobile broadband management systems for Best Buy, in a managed services deal hosted by its business partner, CSC. The suite includes Intec Singl.eView, IntermediatE and Inter-activatE, enabling the multinational technology and entertainment products and services retailer to launch Best Buy Connect. Best Buy chose Intec in 2009 to support its MVNO plans and help the retailer deliver innovative new services to the consumer technology market. Best Buy Connect is an example which allows consumers to one-stop-shop for connected solutions by purchasing computers with customisable mobile broadband service options. Postpaid, prepaid, and ‘pay now’ are all supported from the convergent service billing engine. Singl.eView’s reported flexibility will also allow Best Buy to react quickly to market changes.

VANILLAPLUS AUGUST/SEPTEMBER 2010

NEWS IN BRIEF

Berg says 111.4m homes in Europe will have smart meters by 2015

SBC Nano® software launched by OneAccess to cut SIP deployment complexity and costs

According to a new research report from analysts Berg Insight of Gothenburg, Sweden, the installed base of smart electricity meters in Europe will grow at a compound annual growth rate of 17.9% between 2009 and 2015 to reach 111.4 million. Providing consumers with detailed information about their electricity consumption, the new generation of meters will give customers control over energy costs and create financial incentives for energy savings.

OneAccess, the France-based provider of multiservice access routers, has released SBC Nano®. This is a software feature set enabling fixed line operators, mobile operators and Mike Wilkinson, internet service CMO at providers (ISPs) to OneAccess interoperate and manage session initiation protocol (SIP)-based calls between their network and customer premise equipment, without impacting core network session border controllers (SBCs).

Smart meters are the building blocks of future smart communication grids that will incorporate a wide range of technologies related to renewable energy, distribution network optimisation and energy conservation. The report identifies France, Spain and the UK as the next countries in Europe where smart metering will be introduced, following major rollouts in Italy and the Nordic region.

Dax CEM system cuts churn risk by optimising operator responses DAX Technologies of New Jersey has launched its InTouchTM Customer Experience Management (CEM) solution. Designed for wireless operators and other CSPs, InTouch is a modular technology suite providing current situational and stored historical data, detailed analysis, and proactive remediation recommendations for customer service experience issues. As voice and data convergence accelerates, legacy networks are struggling to maintain acceptable service quality levels due to system complexities and fragmented problem resolution processes. With powerful CEM technologies like InTouch, says DAX, CSPs can achieve a more granular level of control and faster, real-time response to all levels of experience issues. These include signal drops, failed data sessions, and dual mode service hand-off, hereby giving customers a higher quality of service and minimising churn risk.

free operation of SIP Centrex and SIP Trunking services to small and midsized offices of up to 300 desks. “Operators can now exploit all the benefits of SIP business services with far greater flexibility, reliability, and with lower associated costs, at a per-session price point that is just a fraction of core network SBC offerings,” said Mike Wilkinson, CMO at OneAccess. “By enabling a ‘plug and play’, premises-based approach to SIP routing, it is no longer necessary to incur the time, risk and expense of large engineering integration costs and capital upgrades on more complex, larger scale SBC solutions. Moreover, SBC Nano counters the thorny issue of interoperability between SIP based PBXs, SIP phones and the service provider core SIP network, allowing operators to offer and support the broadest possible range of technology,” said Wilkinson.

Available as a software option for several OneAccess ONE Series routers, the ONE SBC Nano provides SIP signalling resolution, SIP proxy and SBC capabilities for SIP-based PBXs and phones, reportedly ensuring trouble-

ABM creates standard comms data sharing format Intelligence, investigation and criminal justice software specialist, ABM, has developed, integrated and successfully tested the first phase of the RDHI Home Office Project for the UK Matt Government within Chamberlain, ABM: Ensure all abmpegasus™ CSPs present Communications. data in a RDHI, or Retained generic format Data Handover Interface, standardises the format for the delivery of communications data records (CDR) from communication service providers (CSPs).

CDR requests, reducing system operator effort and saving time, development costs and compliance system operating expenses. abmpegasus automates the request within the current workflow and the resultant data populates directly into the relevant communications application. ABM’s software development manager, Matt Chamberlain, explained: “Currently, when a police force makes a request to a CSP like Vodafone, BT and Orange, the data is supplied in various formats and returned by varied mediums including phone, fax and email. The data would then require formatting in order to import it into existing databases and analytical systems. RDHI compliance will help ensure that all communication service providers present resultant data in a generic format.

ABM’s RDHI interface will help police forces make speedier and more uniform

VANILLAPLUS AUGUST/SEPTEMBER 2010

‘World’s first’ pre-paid CDMA-GSM roaming call is enabled for Starcomms Nigeria

Tushar Maheshwari, Starcomms: First pre-paid CDMA/GSM roaming call

Guy Dubois, MACH: 90% of CDMA subs are pre-paid

MACH, a provider of hubbased mobile communications exchange systems, together with Accuris Networks, a provider of inter-standard and converged solutions, report that the world’s first ever pre-paid interstandard roaming call was made last month while roaming onto an international GSM network. The call was enabled by MACH’s InterStandard Roaming (ISR) system, which uses Accuris Networks’ AccuROAM inter-working platform, and as the result of an agreement signed with Starcomms Plc Nigeria to deploy MACH’s ISR solutions, which is a first in Africa.

NEWS IN BRIEF

“We shortlisted MACH/Accuris Networks from various other vendors and are extremely happy that this partnership has resulted in making the world’s first pre-paid interstandard CDMA/GSM roaming call in a record time of 45 days.” “More than 90% of mobile subscriptions in the CDMA world today are pre-paid and typically these subscribers cannot and do not normally roam,” said Guy Dubois, President and CEO of MACH. “By successfully demonstrating the first pre-paid roaming call across two wholly disparate technologies, CDMA and GSM, using MACH’s ISR solution, we have taken the first step towards opening up this vast untapped market for mobile operators. This achievement is a first in the industry and firmly positions MACH as a leader in the ISR pre-paid roaming market.”

Tushar Maheshwari, Chief Commercial Officer at Starcomms, commented:

The agreement between MACH and Starcomms Plc Nigeria will provide Starcomms’ more than three million pre-paid CDMA customers with seamless access to international mobile roaming on GSM networks and other wireless technologies. It will also greatly expand Starcomms’ international network coverage compared to its competitors.

NSN helps GSM operators find extra capacity within existing spectrum and save energy GSM operators worldwide will now be able to get more from limited spectrum and improve their overall quality of service. That’s the claim from Nokia Siemens Networks, following the launch of its Dynamic Frequency and Channel Allocation (DFCA) feature. This, it is said, can double GSM network capacity within existing spectrum. The feature supports growth, while maintaining service quality and controlling costs.

Nokia Siemens Networks’ DFCA feature helps operators to continue acquiring new subscribers while overcoming current spectrum bottlenecks. Using a combination of software features, it increases the traffic carrying capacity of existing sites, while improving network quality. This, in turn, minimises the immediate investment in additional sites, reducing the total cost of ownership. An added benefit for operators is a claimed huge increase in energy efficiency per subscriber.

GSM operators in emerging markets are adding millions of subscribers every month. However, spectrum limitations prevent operators from adding new subscribers to their existing networks without building more base stations sites. “DFCA has immense potential to help operators address the challenge of everincreasing voice and data traffic,” said Prashant Agnihotri, head of GSM/EDGE

product management, Nokia Siemens Networks. “It helps operators squeeze voice calls into less bandwidth, so it can be alternatively used for data, either through Enhanced Data Rates for GSM Evolution (EDGE) or by re-farming the spectrum to Wideband Code Division Multiple Access/Long Term Evolution (WCDMA/LTE). It brings a substantial increase for operators in terms of potential earnings per base station site.”

Cloud service billing and management system launched by Comarch Poland’s Comarch has launched Comarch Cloud Service Management & Billing. It is aimed at cloud computing service providers Krzysztof who offer any Kwiatkowski, service within the Comarch: Comprehensive SaaS model, and solution who need to efficiently manage and bill for these types of service. It can also be used by data centres providing services in the Infrastructure as a Service (IaaS) model, as well as by telecom operators seeking to monetise their investments in infrastructure and IT systems by adding cloud services to their offering. The system is said not only to simplify the transformation towards offering cloud services, but also supports business processes, IT management, subscription and data management, both in the private and public cloud. The transformation services provided by Comarch include migration of data, verification of process definitions, sample data generation for testing, reports, as well as complete migration to the cloud. "The cloud services market is growing rapidly and is expected to reach US$68 billion by the end of this year, according to Gartner. We felt that since Comarch is one of the market leaders in providing software for the telecommunications industry, it was necessary for us to develop a comprehensive solution to respond to this trend," explains Krzysztof Kwiatkowski, BSS Product Manager, Comarch SA.

VANILLAPLUS AUGUST/SEPTEMBER 2010

NEWS IN BRIEF

Vodafone Group data revenue rises 25pc to £1.2 billion

Alcatel-Lucent buys ProgrammableWeb ‘to protect’ web 2.0 API repository

Vodafone Group revenue increased in Q1 2011 by 4.8% to £11.3 billion (€13.6 bn) and group service revenue increased by 4.9% to £10.6 billion (€12.8 bn). Vodafone has returned to service revenue growth in the quarter and anticipates further growth in Europe and emerging markets, driven by mobile data. Chief Executive, Vittorio Colao, commented: “These are the first quarterly results to show service revenue growth since the global recession impacted. We have achieved these results through our continuing commercial approach in key European markets, focusing especially on data, and from strong growth in emerging markets, with India now cash-positive at an operating level and our highest ever quarterly revenue in Turkey.”

Informatica reports record quarterly revenues of $155.7m Informatica Corp of Redwood City, California, an independent provider of data integration software, achieved record financial results for the second quarter. “Despite the uneven economic recovery, Sohaib Abbasi Informatica is increasingly benefiting from our strongestever product portfolio and the team’s exceptional operational discipline with record results in each of the major geographic regions,” said Sohaib Abbasi, Informatica’s Chairman and CEO. Total revenues for the second quarter of 2010 were $155.7 million, an increase of 33% from $117.3 million recorded in 2009. Licence revenues were $70.0 million, an increase of 44% from $48.7 million from last year. Income from operations for the second quarter was $25.5 million, up 49% from $17.1 million in the second quarter of 2009.

Laura Merling, Alcatel-Lucent: “Our goal is to protect the ... independence of Programmable Web."

Alcatel-Lucent has acquired ProgrammableWeb, a source for web application programming interfaces (APIs) used by application developers to build web, mobile, and other connected applications that serve consumers and the workplace. Terms of the sale were not disclosed.

robust growth of the API and developer eco-system, and facilitate service providers’ participation within that ecosystem. For Alcatel-Lucent this acquisition provides an important new channel to partner with the web developer community – a dialogue it started with its Open API Service and Developer Platform. It also gives Alcatel-Lucent access to general API usage patterns, allowing it to build highly relevant API bundles for its Open API Service. ProgrammableWeb’s API monitoring services, API trial services, and automated API updates will be integrated into AlcatelLucent’s Developer Platform. In addition, Alcatel-Lucent will be able to share its developer resources, such as its dashboard that helps developers track application monetisation, with ProgrammableWeb’s developer community.

Web APIs enable developers to create new applications leveraging various kinds of content and functionality. Alcatel-Lucent’s acquisition of ProgrammableWeb aims to bring together an eco-system of service providers, enterprises, and developers to drive the creation of unique applications today and in the new world of broadband mobile through LTE.

“If you look at any organisation that launches an API, you quickly realise that the one thing the most successful APIs have in common is a vibrant developer eco-system,” said Laura Merling, Vice President of Alcatel-Lucent’s Global Developer Strategy. “Our goal is to protect the uniqueness and independence of ProgrammableWeb as an API repository and developer resource, while adding beneficial technologies and service provider relationships to the mix for everyone’s benefit.”

ProgrammableWeb will continue to operate as a separate entity from AlcatelLucent, maintaining its repository of over 2,000 web APIs which are regularly accessed by hundreds of thousands of developers, and continuing its role as the industry’s most comprehensive content source for web services development. Alcatel-Lucent will provide support and resources to promote the continued and

Intec confirms exclusive report in VanillaPlus that it is in sale talks In an announcement to the London Stock Exchange on July 26 the Board of Intec stated: "In view of today’s share price movement, the Board of Intec Telecom Systems plc confirms that it is in highly preliminary discussions with a third party which may or may not lead to an offer for the Company. Discussions are at a very early stage, and as such there can be no certainty as to whether any offer will be forthcoming nor as to the level at which any offer might be made. A further announcement will be made in due course."

VANILLAPLUS AUGUST/SEPTEMBER 2010

This announcement follows VanillaPlus.com's exclusive report on April 29, 2010 alerting readers to a rapid fall in Intec's share price, and market rumours surrounding Intec's possible sale. Reports suggest that a bid by Comverse last year was rejected by the Intec Board, a similar outcome to an earlier bid by Convergys. Speculation now centres on possible interest from CSC, said to be keen to expand in the telco space. For more information go to www.vanillaplus.com

Apoorva Singh is Patni’s Global Head of Infrastructure Management Services Mumbai-based Patni Computer Systems Ltd, a global IT and BPO services provider, has appointed Apoorva Singh as Senior Vice Apoorva Singh President and Global Head – Infrastructure Management Services. Apoorva will be leading the Infrastructure Management Services vertical, along with Patni’s Customer Interaction Services (CIS) division which offers business support technology. Apoorva has 15 years of industry experience and previously worked with Infosys as Head of their IMS division covering EMEA. Prior to Infosys, he worked

Tata names Bowen as new head of Global Carrier & Enterprise Solutions Tata Communications has appointed Laurie Bowen as President of Sales & Strategy for Global Data & Mobility. Responsible for all sales and marketing globally (excluding wholesale voice), Laurie will lead the Global Carrier & Laurie Bowen Enterprise Solutions teams to devise goto-market strategies and to identify opportunities to enhance the system portfolio – driving business globally with a focus on emerging markets. Vinod Kumar, President and Chief Operating Officer of Tata Communications said: “The enterprise business is of strategic importance to us as we expand our traditional wholesale voice and IP business into enterprise offerings. Laurie brings with her a world-class track record in leadership and business growth.” Prior to joining Tata Communications, Laurie held leadership roles at BT, most recently, as the Managing Director of Commercial & Brands for BT Global Services. She also spent 20 years at IBM focusing on the telecoms and financial services. Laurie has an MBA and BSc in Electrical Engineering and Computer Science from Washington University in St Louis, USA. SevOne appoints Miracle to lead its marketing and Murray for sales SevOne, the Delaware-based network performance management provider, has reported that Michael Miracle has joined it as Senior Vice President of Marketing, and Casey Murray has been promoted to Vice President of Sales and Business Development for the company in North America. Mike is a former VP of Corporate Development for VERITAS, board member for Precise Software and Connected Corp, and EVP of Marketing for Evident Software. “SevOne is

with Solix/Emagia Corp, MeraNet Pvt Ltd and Maruti Udyog Ltd. He holds a Bachelor’s Degree in Mechanical Engineering from GB Pant University, Uttarakhand, and a Post Graduate Diploma in Marketing and Finance from IIM, Lucknow. Commenting on his appointment, Apoorva Singh said: “Enterprises are looking to partner with IT services vendors that can help them seamlessly scale and cost effectively manage their global IT infrastructure. I am confident of developing Patni’s IMS capabilities and reach to exploit these opportunities.”

poised for explosive growth. Every company and marketing executive wants to work with a product that is setting industry standards in a high growth market,” he said. Following a successful period as VP of Business Development, Casey’s role at SevOne has been broadened to incorporate all North American sales activity. MIG bolsters strategic advisory team with three new appointments

Peter Parmenter

Mobile Interactive Group (MIG), a global integrated mobile and digital communications business, has named three new strategic advisers: Peter Parmenter, Director Business Development, EA Mobile EMEA; Susie Moore, Head of Brand at O2; and Paul Wright, formerly Director of Sales at Sky

Digital Media. Peter Parmenter will advise on MIG’s OEM and International Business Development Strategy and Digital Entertainment Trends. Susie Moore will provide guidance on Brand, Marketing and Communication Strategy for MIG’s agency businesses, while Paul Wright will consult on Global Mobile Advertising Strategy. Peter worked at EMI Records and Hutchison 3G Australia. He is now Director Business Development, EA Mobile EMEA. Susie Moore has 16 years of brand, marketing and sponsorship experience, both agency and client side. She became O2’s Head of Brand and Marketing and was instrumental in the partnership with AEG on The O2. Paul Wright spent 11 years at Sky, before founding Aura Sports, a premium online ad network for sports rights holders which he sold to BSkyB in 2006. He now advises companies in the digital space on their commercial strategy.

VANILLAPLUS AUGUST/SEPTEMBER 2010

VanillaPlus Hot List: August/September 2010 The Hot List below shows the companies informing us of recent contract wins or product deployments. If your contract is not listed here email the details to us now marked "Hot List" <editorial@vanillaplus.com> Vendor(s)

Client, Country

Product / Service (Duration & Value)

Deployed

4th Screen Advertising

Vouchercloud, UK

Selected by iPhone app provider for mobile advertising campaign via Mpression

7.2010

Astellia

Wataniya, Kuwait

VIP Care monitoring product to service subscribers with a high ARPU

4.2010

Camiant

Unnamed Operator, Brazil

Multimedia Policy Engine product deployment. New CALA office opened

4.2010

Comarch

Telefonia DIALOG, Poland

Class 5 service platform enables deployment of new service portolio

7.2010

Continuous Computing

Sangoma, USA

Trillium SS7 & ISDN protocol software to deliver carrier-grade solutions

8.2010

Convergys

Vodafone, Fiji

Intelligent Loyalty product to improve subscriber retentention, data management

7.2010

FIQAS

Gumtree, London

Invoicing and collection services to underpin online classified ads platform

7.2010

GetJar

Belgacom, Belgium

Belgacom signs up for white-labelled library of 75,000 free mobile applications

7.2010

IBM

Zon Multimedia, Portugal

Software to aggregate infrastructure components into a centralised view

7.2010

Intec

Best Buy, USA

Mobile service billing product to support retailer's own mobile broadband offering

7.2010

Intec

Entel, Chile

Selection and implementation of the InterconnecT settlement suite of products

7.2010

On Demand Group

3 Italia, Italy

Launch of Italy's first mobile TV subscription video-on-demand service

8.2010

On Demand Group

Vodacom, South Africa

Launch of Africa's first mobile TV subscription video-on-demand service

8.2010

Orga Systems

Unnamed operator, Europe

Consolidation of billing infrastructure to reduce revenue leakage

8.2010

Orga Systems

Unnamed operator, Europe

Voucher Management Centre to enable high-speed top-ups at peak times

7.2010

Oracle

Monaco Telecom, Monaco

Billing & provisioning system integration, part of business transformation

7.2010

Prepaid.com

Telcel, Mexico

Prepaid.com now offers onilne recharge to all Mexico's pre-paid mobile phones

6.2010

Redknee

VivaCell-MTS, Armenia

NGRC policy & charging products underpin mobile broadband deployment

6.2010

Redknee

Bakrie Telecom, Indonesia

Investment in real-time rating & charging for nationwide expansion

7.2010

Silent Communications

Sony Ericsson, Sweden

Visual Voice Mail software licensed for every handset, on any network

8.2010

Synchronica

Unnamed operator, LatAm

Mobile Gateway & IM service bundled into new MessagePhone

8.2010

Telcordia

TSTT, Trinidad & Tobago

Auto fulfilment system to improve inventory visibility and order-to-cash cycle

6.2010

Verint

Telefonica O2, Ireland

Speech analytics captures 'voice of the customer' insights, responds to issues

7.2010

WIN

Qtel, Qatar

Launch of new mobile music service for Qtel's 2.2m subscribers

4.2010

Key: ARPU CALA NGRC

Average Revenue Per User Caribbean & Latin America Next Generation Rating & Charging

FREE WEBINAR A Microsoft Online Services Case Study Billing, Customer Care and the Enterprise Customer 3rd in the series of MetraTech-hosted VanillaPlus Thought Leadership Webinars 30 September, 2010 10.00 hours Boston, New York; 15.00 London, Dublin; 16.00 Madrid, Berlin, Cape Town; 18.00 Dubai; 22.00 Singapore For details see Preview on page 40 or www.vanillaplus.com

VANILLAPLUS AUGUST/SEPTEMBER 2010

Quality of experience will be next service differentiator, says Tekelec’s new CMO Since founding Camiant in 2003, Susie Kim Riley has been recognised as a thought leader and key advocate for policy control. She can call on 20 years of technology innovation and development experience, focused primarily around quality of service and networking. Here, VanillaPlus brings you Susie Kim Riley’s first in-depth interview since the acquisition of Camiant by Tekelec in May and her appointment as Tekelec’s Chief Marketing Officer. VanillaPlus: Service providers have been struggling to escape from ‘one-size-fits-all’ data pricing plans. In the wireless space flat-rate data pricing plans are being replaced, but is tiering the answer for profitable web-based services of the future? If not, why not? Susie Kim Riley: Tiering is one step to achieving profitable mobile data plans, but it also requires new levels of transparency for subscribers. The fact is that most operators simply can’t afford the ‘all-you-can-eat’ plans that subscribers are accustomed to. KPN’s CEO recently said there would have to be “sanity in terms of pricing” with the growth of data in networks. As more subscribers sign up with new data plans – smartphones, mobile broadband cards, netbooks, iPads and more – the cost per megabyte will decline and operators will carry more data per user for less revenue. The result is that operators are seeing economics and delivery architectures falling behind the pace of the demand for mobile broadband access. Tiered pricing is one key to solving these problems by linking usage and cost with a utility type of pricing model. For one, tiered pricing creates a lower price point that appeals to a new range of subscribers – possibly millions more who will now select an entry-level plan. They may not be familiar with the world of app stores or download videos on their smartphones, but they’re willing to spend a small monthly amount to check email, read maps and send photos to friends and family. And two, operators will stop losing money on the small percentage of users that used the most bandwidth. They’re now welcomed to use all the bandwidth they’d like. Tiered pricing now fundamentally shifts operators’ view of data consumption as a cost centre to a revenue generator.

SKR: The first step is to make tiering even more sophisticated. Subscribers want to personalise all aspects of their experience – whether it’s the apps or iTunes, for example – and that includes pricing. In our conversations with customers, they say it’s inevitable that we’ll see more data plans priced around other variables including time of day, network speed, weekend/weekday usage and across multiple devices. Operators have made a good start with a twopronged, tiered pricing model, but competitors will try new approaches to slice and dice the subscriber base further to achieve a balance of network usage and profitability.

“Operators have made a good start with a twopronged, tiered pricing model.” - Susie Kim Riley

I expect we’ll also see some innovative one-time services introduced, too. For example, service providers could offer an on-demand service such as a ‘turbo boost’ to enable a subscriber to accelerate a movie download before boarding a plane or photo uploads to a social media site. Or subscribers may pay a few extra pounds to see video in high-definition on their iPads but wouldn’t on a smaller device. I think we’ll also see some innovative new services available by next year through partnerships between service providers and overthe-top (OTT) players. Operators will look beyond subscriber-based revenue for additional growth, and content providers are the first logical choice. VP: How can service providers ensure that webbased applications (including those from third parties) adhere to appropriate quality of service, bandwidth and charging rules? SKR: That’s the challenge and the opportunity, and is another driver for over-the-top partnerships. Operators are investigating ways to create twosided business models with application providers and third parties that need the bandwidth. This would create an open environment where anyone

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The catch, though, is that operators have to communicate usage to subscribers so they feel as though they’re in control of their usage and have the ability to stop before causing overage charges. This is, of course, in operators’ best interests, too, but it does require a new level of engagement to succeed.

VP: What is the optimum business model for future internet-based services?

VANILLAPLUS JUNE/JULY 2010

could work with the service provider to improve the customer experience, while again linking bandwidth usage to pricing. Video is a good example. A content provider could offer its customers a gold plan that gives faster movie or TV show downloads for a higher price, and a slower download speed for a cheaper price. The content provider may work with the service provider to potentially offer more compelling content for services over the infrastructure, in exchange for a better end user experience. Many interesting business models could arise, and ultimately this leads to more choice and customisation possibilities for the consumer. Other examples could be that an application could appear as ‘free’ data usage to the end subscriber to help drive adoption and build a base of downloads and users. So, while app usage wouldn’t count against a subscriber’s data usage cap, the application provider would pay the operator for the data consumed over the app. We’re seeing a similar model on the device side with e-readers, where subscribers pay the device manufacturer a flat rate for network access but don’t pay per use. VP: How easy is it to track application usage, service reliability and subscriber billing for multimedia applications? SKR: Operators have sophisticated solutions to analyse these elements, but are still searching for the nirvana of consolidated subscriber usage information across all applications, services and bandwidth types. Operators capture much information today – about the application usage across the network, but information is spread out across several siloed databases in an operator’s network. One needs to start thinking about how to consolidate the information into one repository so operators can more easily operationalise the access to this information. However, the piece of information that operators are missing is the ability to measure the quality of experience (QoE) of these applications throughout their network. This will require additional work and investment as it is not an easy problem to solve.

“Operators will look beyond subscriberbased revenue for additional growth, and content providers are the first logical choice.”

VP: Are wireless service providers damaging their customer relations by just throttling bandwidth in order to curb service abuse? Should the focus have shifted by now to understanding subscriber usage patterns in order to sell them more personalised and profitable service bundles? SKR: This is a common concern, but the reality is that throttling actually improves customer

VANILLAPLUS AUGUST/SEPTEMBER 2010

relations and is a first step toward more sophisticated offerings. Throttling bandwidth is one way operators can both increase adoption and maintain profitability of ‘unlimited’ broadband plans. This approach typically only affects the heaviest of users when they exceed a set amount of data during a billing cycle. At that point, operators can send them to a lower bandwidth tier only during peak hours and/or until their next monthly billing cycle. The win for customers is that their service is never cut off, and they’re never charged more. So operators maintain subscriber satisfaction and reduce risk of churn. The networks are a shared resource – this means if you bandwidth-control the heaviest of users, the rest of the subscriber base receives more resources, and thus better service. It is a win win. Throttling often works best when operators do have additional plans to offer. With insight into how often subscribers exceed the cap, how quickly this happens in each billing period, and how often they’re throttled down to a lower bandwidth, operators can justify offering a more expensive service because the subscriber can see that operators know their habits and can show how their data usage would be improved on another plan. VP: How are operators being affected by the issues surrounding Net Neutrality? SKR: We’re asked about Net Neutrality with nearly every policy conversation we have with customers. The issue is that it is easy to apply academic, theoretical rules to how enterprises may operate under certain circumstances, but if you take the free market and the reality of the competitive environment operators face, one will find that the free market will drive operators to ultimately do what consumers want – because if they don’t, they will lose customers. If for example, an operator blocks a popular video site, because it competes with their own video content – consumers will end up moving to another provider who provides access to the popular content. Operators do not want to lose customers. Network neutrality creates the fear that operators will act against the interest of the general public. The reality is that operators will inevitably do what makes sense, which is to do as much as they can for their customers, within the bounds of what they can spend and deliver as a business. This makes business sense. Happy customers, better bottom line. If network neutrality, in its more stringent form were to be passed and enforced, this means limiting choice for the consumer. It would be like relegating everybody to the five day mail service, with no ability to overnight or accelerate delivery of packages. One needs to very carefully analyse the potential negative consequences of such rules. I do believe there are some positive signs in this

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- Susie Kim Riley

This type of information is important as operators look at ultimately delivering the best quality of experience for their subscribers, and use this as their differentiator. This provides the feedback loop required in order for the operator to best ‘tune’ the network and services and achieve the necessary balance between network cost, service delivery and quality of experience.

area. Lawmakers and many in the net neutrality debate are also beginning to realise that, in many instances, one does have to discriminate, or prioritise certain types of traffic – otherwise the service or application will not perform and will disappoint customers. Most people don’t realise this today, but the reason why many voice over IP and video services actually perform as well as they do is because such prioritisation is already out there in the network. Because of this reality, many are coming together and setting some common guidelines and recommendations to the FCC. An example of this is the recent Google-Verizon announcement regarding net neutrality. Ultimately, consumers want more choices and to personalise their services. In order to do this, operators must be able to control their network, track usage, control application prioritisation, etc. Any network neutrality laws must ensure operators are not discouraged from making the necessary innovations in the network. Otherwise, consumers will be hurt. VP: Should North American and other communications regulators follow EU policies aimed at curbing ‘bill shock’? Are there better ways of protecting subscribers and avoiding churn? SKR: Tiered pricing is creating a de facto ‘bill shock’ type of alerting system where operators give subscribers several ways to monitor their usage. These are critical for tiered pricing plans to succeed, so subscribers feel that operators are working with them to understand their usage and what plan is best for their needs. Regulators’ and operators’ decisions about bill shock policies are largely dependent on the regional issues. The EU, for instance, has higher roaming fees as a result of the inter-country travel many Europeans do. This is far less of an issue in North America. US customers are getting their first taste of data tiers, and operators should be given the opportunity to demonstrate that they will proactively address bill shock issues. VP: Following Tekelec’s May acquisition of Camiant and Blueslice Networks, how will product synergies benefit your operator customers and end users? SKR: The combination of technologies and philosophies between the three companies gives service providers a unique set of solutions to address the mobile data explosion and evolution to broadband networks. Customers can expect integrated technologies that will enable them to accelerate their move towards providing higher levels of intelligence and controls in their networks. For example, integration of subscriber data management facilitates the scaling of large policy deployments and consolidation of disparate siloed subscriber databases.

“Throttling actually improves customer relations and is a first step toward more sophisticated offerings.” - Susie Kim Riley

Integration with performance management provides operators with the necessary network visibility and real-time performance intelligence on their systems and services. This is a key operational tool to manage next-generation deployments of IPbased services. VANILLAPLUS AUGUST/SEPTEMBER 2010

NEW

BUSINESS

MODELS

EXPERT OPINION:

50 billion connections and counting: New OSS/BSS Requirements in 2020 Over the last decade the telecommunications landscape has rapidly evolved. The line between telecoms and the internet is becoming increasing blurred, says Dr Ralf Guckert. ‘Being online’ has become a normal part of people’s day-to-day life and the means of getting online, whether via a home PC, wireless enabled laptop or mobile smartphone are becoming increasingly irrelevant.

The author: Dr. Ralf Guckert, VP Product Strategy, LHS – Part of the Ericsson Group

Ericsson estimates that by 2020, 50 billion devices will benefit from a network connection. These will range from today’s handheld devices to energy meters, vending machines, household appliances and motor vehicles. This trend towards ubiquitous connectivity means that communication service providers (CSPs) will face unprecedented business change that they must adapt to in order to thrive. This will require a streamlined and holistic approach to designing OSS/BSS architectures that, for a great number of CSPs, will involve a transformation of their current environments. This article examines the interdependent guiding business principles that will drive changes in the key operational and business processes and systems, as well as the architectural principles behind the required OSS/BSS transformation. Customer experience In the next decade CSPs must adhere to the principle that services should be driven by the experience and benefits demanded by the customer. The end-customer expects to be able to receive all services wherever and whenever they choose and will no longer accept technology as a limiting factor. Customers are also likely to subscribe to many more services than they have in the past, perhaps seeking an entire communications, entertainment and even utilities package from a single provider. These will include services developed and delivered by third parties. These services need to be available on multiple devices and need to be seamlessly interchangeable.

VANILLAPLUS AUGUST/SEPTEMBER 2010

For example, OSS/BSS environments will need to be able to orchestrate the ordering and provisioning of all the service components of the subscribed package, which may involve communicating with external third party systems. This will all need to happen within prescribed SLAs (with both customers and partners) and will need to be fully automated; after all, a customer subscribing to a mobile multimedia package would not be content to have instant access to voice services but have to wait a week before his mobile video on demand services were available. CSPs will also need to take into consideration various user criteria such as spending controls, parental controls, location and advertising preferences which will allow them to more proactively engage with their customer. Delivering on these preferences will require endto-end, real-time OSS/BSS capabilities including customer management, charging and policy management and billing for all services. Embracing new business models It is clear that by 2020 customers will consume vastly more data than they do today. This means that CSPs will need to switch from models of selling voice minutes and flat rate data plans. Instead they will need to adopt business models that focus on specific types of end customer value, depending on their preferences. This could include charging for access to premium content, different levels of service quality or download speed or even advertising-free services. In order to compete against new players from internet and device manufacturer domains, CSPs will therefore seek to augment their service portfolios with services, applications and content from third parties.

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To succeed in a converged world, CSPs will require OSS/BSS environments capable of delivering an enhanced personalised customer experience. To do so will require them to have a single view of the customer, which is more than a single customer care point and an integrated bill. It is about providing a seamless experience from

the moment a service is ordered through to the payment and even dunning processes.

The principle of embracing new business models does not apply exclusively to consumer facing services. Over the next decade, CSPs will need to increasingly examine their strengths in terms of value disciplines and formulate strategies accordingly. For example, CSPs targeting the enterprise market may become providers of enriched business communications and/or SaaS applications developed by a range of third parties. Carriers may also decide to monetize their assets and focus on the wholesale market with third parties delivering content and cloud services to their customers. For the next generation CSP, partner management within OSS/ BSS will be fundamental. However, this will extend beyond charging and bill settlement/reconciliation for revenue share models. It will require extensive service level agreement management with multiple partners that govern availability of services, quality of service, download speed, and warranties relating to intellectual property rights. The ability to support advanced advertisingbased models will also be crucial, including clickthrough billing models, real-time charging and policy management, and advertising-funded content. In addition, the ability for customers to be able to assemble their own bundles of services from predefined ‘building blocks’ of minutes, texts and downloads will become increasingly important. This is not a capability that most CSPs have today, but will be an important business imperative and potential competitive differentiator for the future. The financial imperatives CSPs are conscious of the costs that will be incurred to support new services, partners and devices. Historically, they introduced new processes and sets of support systems for each new service they offered, or they relied on disjointed, manual processes to manage third parties and support new technologies. If CSPs are to meet the future business challenges effectively, they must overhaul the way they operate, significantly reducing the cost elements associated with carrying out complex business processes.

processes and systems. Each facet of the customer lifecycle will need to be considered from order to cash. Strategic models So, how does a CSP go about assessing its OSS/BSS architectural requirements? First off, CSPs need to make an honest appraisal of where they stand in their market. Ericsson believes that distinct categories of CSPs will evolve based on their core competencies and strengths. At one end this will include a CSP acting as a ‘smart pipe’ – providing highly costeffective access and transport services on a wholesale basis with minimal direct contact to the end-customer. From an OSS/BSS perspective, they require support for charging their end-customer facing brand partners based on parameters including QoS, speed, security, and latency. The other extreme will have the CSP covering multiple roles, where large vertically integrated players provide the end-customer with everything from connectivity to lifestyle business services, developed both in-house or sourced from partners. This model will require highly scalable, multi-tenancy, multi-country, and multibranding enabled OSS/BSS. The CSP will require a deep understanding of all customer needs to secure the potential delivery of services and content to hundreds millions of subscribers.

“Each facet of the customer lifecycle will need to be considered from order to cash.” - Dr Ralf Guckert, LHS

VanillaPlus Jargon Buster BSS = Business Support System CSP = Communications Service Provider OSS = Operations Support System QoS = Quality of Service

The reality for most CSPs will be somewhere in between, but it is essential that together with the guiding business principles listed above, they understand these strengths in order to build sustainable strategies and the OSS/BSS environments required to execute them.

SaaS = Software as a Service SLA = Service Level Agreement

From an OSS/BSS perspective the solution to the complexity brought by this business change is based around simplicity. CSPs will need to take a holistic approach to designing OSS/BSS architectures. As an industry we have been talking about convergent charging and billing for years; this same principle of convergence will need to be applied to the entire OSS/BSS environment, with common, and where possible, automated VANILLAPLUS AUGUST/SEPTEMBER 2010

The VanillaPlus Thought Leadership Webinar Series:

A Microsoft Online Services Case Study Responding quickly to market dynamics with innovative new cloud services and tailored offerings

Date: Time:

Thursday 30 September 2010 10.00 New York; 15.00 London, Dublin, 16.00 Paris, Madrid, Cape Town; 18.00 Dubai, 22.00 Singapore Duration: 60 minutes Expert Ganga Venkatasubramanian, Product Manager, Ganga VenkataScott Swartz subramanian Speakers: Microsoft Online Services Scott Swartz, CEO, MetraTech Corp. Moderator: Jeremy Cowan, Editorial Director, VanillaPlus Register NOW for your FREE place at this webinar. Online registration at www.vanillaplus.com Or call Charlie Bisnar on + 44 (0) 1732 844017 Or email charlie@vanillaplus.com During this September 30th webinar, Ganga Venkatasubramanian, Product Manager of Microsoft Online Services and Scott Swartz, CEO of MetraTech will discuss how Microsoft implemented a cloud computing business model, including a dynamic billing system that reacts quickly to change and improves the customer purchasing and invoicing experience. Join us to learn how Microsoft: • Implemented a multidimensional cloud services billing system in 1/3 of the expected time • Selected the systems and vendors that would support its new business models • Created opportunities and tools for channel partners to deliver value in an SaaS model • Has since readjusted the offerings based on market response and lessons learned

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MetraTech Corp. offers a new approach to charging, billing, settlement and customer care enabling organisations to embrace change without compromise. Its flagship product, MetraNet, is able to automate business processes and business models that address rapidly changing, complex or radical business strategies across any industry for an unlimited number of services. www.metratech.com

To find out about hosting a webinar, contact: Cherisse Draper on + 44 (0) 1732 897646 or cherisse@vanillaplus.com or visit www.vanillaplus.com

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Simon-Kucher & Partners (SKP) is a specialist pricing consultancy. Co-founded 25 years ago by Herman Simon, a professor at Stamford and Harvard, SKP applied his research into measuring willingness to pay. They started in pharmaceuticals and automotive and, since 2001, in telecoms. Jeremy Cowan, the Editor of VanillaPlus met Mark Billige, a Partner in SKP (prior to AT&T and O2’s launch of multi-tiered pricing plans) to discuss the challenges of pricing, challenges that operators are just starting to tackle. Clearly, profitable future communications will demand more thought than just a 2-tier data price plan.

The pricing ‘exam’ questions telcos are still getting wrong

Mark Billige is a Partner at strategy & marketing consultants, Simon-Kucher & Partners

Mark Billige: The partnership has grown globally to 19 offices in 14 countries, and in its industry mix. We’ve worked for most MNOs in Europe, but we’ve also worked with fixed line players, DSL providers, and more recently people like Skype, who have become one of my big clients in the UK.

reality that always catches up with you at some point, which says you did actually spend that money. There’s a lovely quote from GM or Chrysler that said, ‘We sell a lot of cars at a loss, but we’re going to make it up in volume’. There’s this mentality of saying ‘I’m going to sweat this asset to death’.

“I needed to be able to

I have found (especially in the UK) that telecom companies are very heavily invested internally with pricing people. As far as industries go, whilst telecoms have made some very strange decisions price-wise in the past, they are unashamedly one of the more sophisticated industries – because they have to be.

I don’t see telecoms as being more competitive than, say, utilities. And utilities are more commoditised and they have fewer touch points with customers.

had to build a factory

VP: Can you elaborate on some of the strange decisions made by telcos? MB: Launching flat rate data plans, almost out of the blocks, is very strange. Very few industries have so excitedly jumped into all-you-can-eat tariffs. You look at utility companies, energy companies, no-one does that – anyone who has a heavily variable cost base charges by volume. VP: How did they do that if they are so heavily invested internally with pricing people? MB: (Chuckles) That’s the magic question. I’m not going to say those people weren’t smart, because that’s definitely not the case. It’s this sunk cost trap, of investment in network and technology which leads to a contribution mentality which is very hard to shake.

how many units they will sell at a price point, because they to make them.” - Mark Billige, Simon-Kucher & Partners

MB: If I look at mobile, the UK is pretty competitive, with four major players now. In utilities there must be that many players competing to sell me electricity. I don’t think telecoms is that much more competitive. I think they have been nibbled at round the edges for so long though in terms of alternative technologies, so you have competition from VoIP, you have more alternatives than some of the industries I’ve talked about. You do have some rather bizarre routes to market, and you have the whole influence of handset manufacturers and hardware. VP: Are you thinking of handset subsidies? MB: Yes, and the problems that causes. If you started the last 10 years with a blank piece of paper you probably wouldn’t have started with the model that says I’m going to give you a free handset which costs me £200 (€240) but I hope I make it back from you at some point. That is changing now with SIM-only deals and lowcommitment tariffs, but it’s taken a long time to get there and I’m sure they burned a lot of

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When you’ve just gone off and spent a couple of billion on a 3G licence there is pressure on you from above to sell some volume for anything you can get for it, because a contribution suddenly makes sense. I’m an accountant by background, and so I’d say there’s a CapEx and depreciation

VP: But there are more players in the telco market and more arriving all the time in service provision. You couldn’t say that in utilities.

tell Porsche exactly

VANILLAPLUS AUGUST/SEPTEMBER 2010

P R I C I N G

“I’m talking to business insight

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money getting there too. Voice will clearly remain a cash cow for some time, although it’s not a high margin product, SMS likewise.

people who don’t understand pricing and marketing.” - Anonymous

So, mobile data is where a lot of alarm bells have been ringing for operators. Flat rate data plans emerged before we understood the content that would be pushed down the pipe.

It’s exactly the same in the world of telecoms. I need to say exactly how many people are going to buy this tariff and data plans at different price points so that you can go and build a network. You look at AT&T in the US who got this all horribly wrong, and they were fixated by 3% of their customer base using 40% of their network (capacity). You’d be happy with the 3% if they were paying their way, but they weren’t.

‘Hero’ products Other people’s customers A couple of things have changed, if I look at the tariff plans for the iPad they are smarter. They are pay-as-you-go, most of them take in a time dimension, although there are these ‘per meg’ add-ons. That’s one seismic shift that may make the change; big ‘hero products’, game-changing hardware can get there. The other thing telcos are going to have to look at is different dimensions. They’re going to have to say, ‘OK, what is important to people? Network priority? Speed? They’ll have to say, ‘If you pay me more we will guarantee you get the speed you paid for. If you don’t get that speed you pay less.’ Or I see some other operators are guaranteeing speeds between 9.00pm and 3.00am. They’re almost loading in a peak/offpeak factor. VP: That presents a huge challenge for engineering departments. They can’t give a carte blanche guarantee of a certain quality of service because it’s a moving target. MB: Correct. And they’ve got to work very closely with their marketing colleagues to find out how many of these high priority data plans they’ve sold. You’re between a rock and hard place on that; you sell a lot of [plans] and you start to make your money back on them, which is great. But all of a sudden you have to guarantee what was an exclusive thing for lots of people, which is why you need to get the pricing exactly right. And that’s what a lot of people forget about in pricing. It’s not just about how much money I make, it’s about the volume I bring with me at a price point.

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What doesn’t happen enough is looking at the customers we have, who we know an awful lot about, and just squeezing more out of them. VP: Have telcos made enough use of the enviable amount of data they hold on their customers? MB: Nowhere near enough. Procter & Gamble or Unilever would chop their arms off for this. What do I get that’s personal on my O2 plan? I get nothing. I call Germany a lot because we’re a German company; no-one’s ever phoned me up to offer me a clever product tying me in for two years with cheap calls to Germany. When I’m on holiday why don’t they send me a text encouraging me to send a photo back. My wife’s on O2 as well, we have the same billing details, they could work it out. It’s all there. I met a guy the other day who has a business insight product for telecom operators. He said, ‘You know what, Mark? I’m sure there’s some work we could do together because I’m talking to business insight people who don’t understand pricing and marketing. His thought is that we could be that kind of mediator saying, ‘Here’s this fantastic data – do you know what you could do with it?’ Telcos are awash with data and you often find that businesses with most data don’t use it best because they drown in it. They may have hundreds or thousands of different products. They can tell you how many customers they have in age brackets, or social income class X, Y or Z. But these aren’t things you can use as a marketer. You need to know how many people you’ve got with a price elasticity below -1. How many people have you got that are at risk of churning next month? You need marketing flags, not demographic flags. Identifying these customers and giving them something they want before they go, rather than phoning as they leave and trying to throw them another handset they didn’t want. It doesn’t take a genius to tell you that if you can delight someone when they’re feeling on the edge, that’s

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We price all of Porsche’s new cars, including the Panamera. When you’re pricing a car, it’s not just about ‘What price point do I make most money at?’ I needed to be able to tell Porsche exactly how many units they would sell at a price point, because they had to build a factory to make them, and they had to build a dealer network to sell them. If I tell them a price point and they end up selling half as many cars but they still make a lot of money they’re not happy because they built a factory they didn’t need. If they end up with orders for twice as many as I told them we have a real problem because they can’t satisfy demand.

Telcos have always had a fascination with other people’s customers, not their own. All the conversations they have with press and analysts are about ‘how many customers I won’, and we’re in a 100% saturated market. So the only way I can win customers is by taking them off someone.

a lot cheaper than throwing money at them when they’ve already made the decision to go somewhere else.

customer and you pay to get access to my customers’. I think we’ll see a lot more of those kind of revenue share deals.

VP: Telcos are made up of a lot of very bright people, they have enormous resources at their fingertips, and they have – as you’ve pointed out – a huge pricing fraternity. What is the disconnect here? Why is this pricing message not reaching C-Level?

VP: Telcos still seem to feel they own the customer.

“Someone from GM or Chrysler once said, ‘we sell a lot of

MB: I think it’s goal-driven. What is it that telcos report to analysts? They report Gross Adds (subscribers). If Orange or O2 reported next week that profits were down 5% but Gross Adds were up 10%, the market would go, ‘That’s probably OK’. But if they said that the other way round, ‘Profits were up 10% but Gross Adds were down, we’re losing new customers,’ the markets would have a total flap. Why? Executives worry about their jobs if they’re not bringing new subscribers through the door. If they’re bringing them in at a loss no-one seems to care.

MB: You ask Apple and they’ll say ‘Not any more you don’t’. The emotion is with the kit, not the operator. Users want to find the cheapest plan to get their hands on this device, all those apps and content.

cars at a loss, but we’re going to make it up in volume’.” - Mark Billige, Simon-Kucher &

VP: What lessons can CSPs learn from best practice in other industries?

Partners

MB: In so many dimensions they are awash with more advantages than most industries and I’m sure most industries look at telecoms and say ‘What can I learn from them?’ The biggest thing is making smart and actionable use out of their customer data. What behavioural flags can I have? What can I do to cost-effectively delight customers and ultimately we have to charge them more for things.

Where’s the profit focus? We sat in a C-level workshop for a major European incumbent, a fixed line and mobile operator. It took almost 6 hours and the only question we posed them was, ’What is this year’s goal?’ It took all this C-level time and we never concluded it. No-one could tell us. One guy said ‘We’re a business, it’s profit’. Someone shouted him down. We asked ‘If you were more profitable and lost some volume would you be happy?’ He said yes, and that caused an absolute ruckus; the others said ‘there’s no way on earth we could lose market share’. The one thing that telecoms (companies) do have is the ability through technology to drive cost out. Voice is an inelastic product, you can’t make more money by dropping prices. Who will telecoms customers be going forward? I think the CEO of Telefonica said something to the effect of ‘I give Google a fantastic deal. I spend all this money on a network which gives them access to all sorts of customers to sell location-based advertising services. And what do I get out of it? Not a lot.’ Will we see more getting into bed with content providers. We see Verizon and 3 with Skype. Is there a deal to be done with the heavy content providers, telling them, ‘ I’m a gateway to a

Banking and insurance are reasonably good at that. They do know a lot about the customer. Some players are starting to get the hang of that, understanding when to show you new products, when to cross-sell and tie products together. They (CSPs) could take a good look at pharmaceutical and automotive who need to know the volume they’re going to get out of a range of price points. The exam question is ‘What can I charge my customers more for?’ There are a lot of things on the list that haven’t been properly tackled: Security, priority on networks, more customer-centric dimensions like that, personalisation. We need to get more price points back, we need Good, Better, Best, because at the moment all we have is Good at a low price. They could take a look at the airline or hotel industry. They have taken this new pricing element – certainly in the travel industry – to the extreme, saying ‘What more can I charge you for?’ I can get on the plane with Easyjet quicker, or get more legroom if I pay something. If you gave those businesses to a telecom by now it would be £5 a seat, as much legroom as you want, get on when you wish and we’ve given it all away. Monetising of innovation, service and the things people will pay you for, they’re the exam questions we have to be posing these telecom executives.

VanillaPlus Jargon Buster CapEx = Capital Expenditure CSP = Communication Service Provider IM = Instant Message MNO = Mobile Network Operator

VANILLAPLUS AUGUST/SEPTEMBER 2010

P E R S O N A L I S A T I O N

EXPERT OPINION:

Let’s get personal with a multi-channel customer experience While you can order almost anything today from any device at any location, it’s not always a simple experience. Sometimes it can take too long to get to what you’re really looking for. And then you need to register, provide payment details, shipping address, then re-enter your credit card details and so on. The importance of an intuitive, easyto-use ecommerce platform which supports the virtual online store, recognises the customer and provides the right information even faster, almost goes without saying. The author is Uri Gurevitz, Product Marketing Manager, Amdocs

Meanwhile, although customers often start researching their new prospective smartphones online, not every customer wants to complete every purchase or switch price plans online. Indeed, before actually deciding to complete the purchase, many people want to physically try out the device in the retail store at first hand, or maybe talk over the price plans with a call centre agent. For a customer’s perfect multi-channel experience, the service provider should be able to offer, continue or complete the same transaction across any of its retail channels. In practical terms, this means enabling customers to start a transaction using the online virtual store, knowing that they can get the same product at the same price through other channels. They can then choose to pick up the transaction at any of the other sales channels – right at the very point where they left off, painlessly and intuitively.

This can result in a customer fulfillment and logistics nightmare necessitating a manual ordering process, rather than being a smooth automated experience which can push information seamlessly from channel to channel. Whatever the Channel, the experience should be ‘Subscriber-centric’ A multi-channel strategy also demands personalisation and a 360-degree view of the customer. The service provider holds a treasure trove of customer intelligence insights, gleaned from the past activity of its customers. Service providers should use this information to analyse and understand buying behavior and then leverage subscriber-specific information to raise the customer experience to a whole new level.

Forget ‘Location, Location, Location’ – Think ‘Integration, Integration, Integration’ Ecommerce solutions usually work as “islands” without any integration of customer data and

But to nail down a personalised multi-channel retail experience, service providers need to apply and push intelligent personalisation automatically across all of its channels, and influence service delivery in real time.

VANILLAPLUS AUGUST/SEPTEMBER 2010

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The problem is the lack of integration between the different channels and the service provider’s inability to apply each customer’s “subscribercentric” personalisation in every channel to which the customer moves.

This includes customisation of services; more personalised and intimate subscriber relationships; greater segmentation and selfselection of products, program and plans; new pricing models, service packages, increasing bandwidth demands based on subscriber usage of third-party content and services, customer desire for personal control and self-selection and so on.

So what’s the hold up in making this a reality?

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service offers between the online virtual store and other sales channels, including the service provider’s retail outlet and customer care centres. Unless the service provider has a multichannel solution that shares common tools and platforms and processes with its other business and operational support systems, a customer can start and efficiently complete a transaction online, but the service provider won’t then be able to pick it up in another channel.

The building blocks of a multi-channel strategy While more and more people use online virtual stores to complete their purchases, as well as to report any trouble issues, other channels also appeal to the broader customer base. It is therefore essential that all channels stay coordinated and that the service provider offers: • An easy-to use simple informative online shopping experience • A unified presentation of product offers, pricing and information between channels • The ability for customers to start the purchase in one channel and finish in another without restarting •

Integration between the online sales portal and back-office systems (OSS and BSS) to deliver automated support for the cash-to order process

A multi-channel experience centres on the ability to tie online virtual store and customer support centre processes together with the necessary fulfillment functions. This involves not just an integrated e-commerce and digital commerce platform, but also integration with the network operational and business support systems. While the retail outlet may have an inventory on hand to fulfill most customer requests, a tie in with the back-office fulfillment functions is also necessary to cover times when inventory may not be available, particularly in cases where durable goods from partners are playing a greater role. It’s crucial to have something in common The online shopping experience starts not surprisingly with the ecommerce platform. It personalises the online shopping and purchasing experience of the self-service portal with capabilities to address the online shopping cart, product catalogue, personalisation and pricing functions. This includes, for example, the ability to support merchandising through discounts, promotions and e-coupons. However, if that ecommerce platform is able to use components shared by the other BSS and OSS systems supporting the service provider’s other sales channels, then this is the first step in extending it into the all-important, personalised multi-channel experience. Examples of shared components include: • Universal Shopping Cart – Used by customers to select goods and services for

purchase. The key is to retain a registered user’s purchase selections (durable goods, user devices and/or network-based services) initiated, for example, online and then be able to finish the purchase process either through communication with the care centre or at the service provider’s retail outlet. • Enterprise Product Catalogue – Centralises the process of defining and managing product and services information through a common definition for all function modules, and can also extend to interfacing OSS and BSS as needed.

“A multi-channel strategy also demands personalisation and a 360-degree view of the customer.”

• Personalisation engine –Allows the definition of product offers and business rules to govern the sale of customer selections based on offer recommendations from existing customer purchasing and profile information. It allows customers to seek out “unique” combinations of service plans, durable goods, user devices and digital content that will satisfy specific needs. • Search Engine –Designed to search within product brochures and the product catalogue to deliver customers accurate choices of the network service, durable goods and digital content available. • Sales Engine – Provides a commerce engine that all sales channels can use, including online, in-store and through the call centre with business processes and customer information flowing consistently across channels. It allows customers to begin a transaction within the online virtual store, and end it anywhere they choose. Service providers can’t ignore the multichannel experience for much longer. Although it might not be the reality for many customers today, the multi-channel experience is the natural direction towards which customer expectations are moving. And service providers already need to start heading there too, step by step, starting with an integrated ecommerce solution. The Amdocs Universal Storefront solution, for example, is key in enabling service providers to offer, sell and service their physical, network, and value-added services through one channel, taking into account their personal needs, such as locating the retail store closest to them. It delivers a single shopping cart experience for all services and products while giving service providers a flexible offering catalogue to define the lifecycle of all products and services. VANILLAPLUS AUGUST/SEPTEMBER 2010

VIDEO

TA L K I N G

HEADS:

PREVIEW

Driving business agility with a new approach to SIM card provisioning Despite the global economic slowdown, the mobile communications market remains resilient. According to consultancy BuddeComm, the industry is still growing and overall global revenues are expected to reach over US$1 trillion around 2012. However, as Stuart Cochran reports, network operators have to fight for every point of growth. As they strive to achieve competitive edge, operators above all prize business agility. This involves the ability to respond quickly to changing market conditions. Operators looking to be leaders, whether in consumer electronics or industrial applications, face unique business model and supply chain challenges.

The author, Stuart Cochran, is Chief Technology Officer, Evolving Systems

One issue is that existing methods of provisioning SIM cards are inflexible and expensive. Operators are hampered by unwieldy distribution approaches, resulting in higher costs, poorer utilisation, and problems ensuring supply meets demand. A further problem exists for operators that want to ‘flood the market’, because of marketing approaches such as SIM-only products. With current provisioning models, each SIM card is already provisioned in the network, so operators are forced to make a large upfront investment, not only in the cards themselves, but in the network space they occupy. Much of this investment ends up wasted because SIM cards are often lost, damaged or become obsolete in the supply chain, while many give-away cards are never used. The model of provisioning SIM cards in advance also creates problems for marketing groups as it embodies the concept of mass production rather than the goal of build-to-order – letting customers personalise their products and services to their exact needs. Equally, current approaches miss out on an opportunity to incentivise users to share personal data and sign up to loyalty and reward programmes. The current exponential growth in the mobile

“Operators can broadband market is compounding the problem. eliminate many of A recent report from Strategy Analytics forecast that global active mobile broadband

the upfront costs subscriptions via smartphones and other mobile devices would grow from 300 million in 2009 to

incurred with the 1.3 billion by end 2014. pre-provisioning

Operators that fuelled the mobile broadband

model.” market with flat-rate prices and cheap electronics are now

- Stuart Cochran, looking to introduce Evolving Systems tiered price

VANILLAPLUS AUGUST/SEPTEMBER 2010

plans. Therefore, they need a provisioning approach that can steer the customer through price plan choices. DSA tackles the challenges Fortunately, a new approach to SIM card provisioning has emerged which helps operators resolve these issues. Dynamic SIM Allocation™ (DSA) is a new way of provisioning and personalising wireless and connected devices, which removes inefficiencies, avoids the costs associated with inactive SIM cards, and enables wireless carriers to deliver an enhanced end-user experience. DSA enables the allocation of network resources to be deferred until the point of first use. Using DSA, operators can eliminate many of the upfront costs typically incurred in using the preprovisioning model. Equally, by improving the geographic mobility of SIM cards in the supply chain, the total number of cards required by an operator can be reduced. This new approach to SIM card provisioning helps operators compete with rivals in the battle for market share. In addition, dialogue with the customer can be enhanced to offer the ability to search for vanity number patterns, and to apply tiered charging for more valuable numbers. This interaction with a customer at the time of first use gives an opportunity to gather customer data to improve segmentation and retention marketing. The rise of mobile broadband and connected devices is challenging operators to better handle the burgeoning growth in SIM card volumes. In this context, the new DSA approach to SIM provisioning allows them to better address these challenges, capitalise on new market opportunities and face the wireless future with growing confidence.

CASE STUDY: VODAFONE GLOBAL ENTERPRISE

From laptops to iPhones:

Making sure data costs don’t get out of hand In recent years, rapid advances in technology have greatly enhanced the ability of business and domestic users to share voice and data communications. As Mark Allinson, Head of Commercial, Vodafone Global Enterprise writes, in a short time the introduction of the iPhone and other sophisticated handheld devices have driven a major shift in user patterns beyond the laptop, with the new handsets driving explosive growth in data usage. The extended choice this offers undoubtedly delivers major benefits in terms of greater communications flexibility. However, this increased mobility comes at a price, both literally and metaphorically. In deciding whether or not to make such devices available to their staff, firms are understandably concerned about the risk of soaring and uncontrolled communications costs, especially in the area of data roaming charges as employees use their devices across multiple geographies and networks.

needs and the success of this ‘one supplier’ approach has already led Whirlpool to investigate further mobility benefits, such as salesforce automation.

However, pricing options are now available which can remove the fear of uncontrollable spend, by providing the predictability of a fixed price solution tailored to the business’s data roaming needs.

Similarly, the world’s largest enterprise software company, Oracle has appointed Vodafone Global Enterprise to supply mobile services management, and mobile and data services to more than 16,000 employees across EMEA on a fixed fee, per user basis. The services are delivered through the fully-hosted Vodafone Telecoms Management service.

Enterprise bundles Best practice options take a phased approach, by initially offering a range of daily and monthly pricing bundles as both the provider and customer learn about the roaming patterns of individual users across the enterprise. Based on this information, a tailored company-wide pricing package can be developed which includes a pricing guarantee, providing certainty of costs in an area of expenditure that can easily get out of control. So how does this work in practice? To cut the number of different mobile contracts it had to manage, international home appliance manufacturer, Whirlpool appointed Vodafone Global Enterprise to manage its mobile communications across Europe. Visible costs A single Master Services Agreement (MSA), initially covering 15 countries, has delivered a consistent level of service, improved visibility of costs and achieved savings through reduced roaming and international charges. Staff now have access to the best devices to suit their

“We chose Vodafone Global Enterprise because it was able to provide a cost-efficient European solution of the required scale, and we see them as excellent partners for potential future global co-operation,” says Roberto Carvetti, Director, Indirect Procurement and Capital Acquisition, Whirlpool Europe.

The author is Mark Allinson, Head of Commercial, Vodafone Global Enterprise

The agreement encourages worry-free mobile voice and data usage among employees to boost productivity, at the same time ensuring that managers can accurately predict expenditure. “As well as greater convenience and cost efficiencies, we expect that this partnership will deliver enhanced services to our employees,” confirms Carol Kelly, Vice President, Global Revenue and Procurement Operations, Oracle. As the above examples show, the benefits of transparency and cost control are likely to be best achieved by working with a communications provider – one that can offer a global network footprint and has established experience of developing flexible pricing bundles to meet a range of different user needs. It is only by matching the flexibility of product with an equivalent flexibility of pricing that multinational corporates will be able to take full advantage of today’s exciting new communications technologies.

“New pricing options can remove the fear of uncontrollable spend.” - Mark Allinson, Vodafone Global Enterprise

VANILLAPLUS AUGUST/SEPTEMBER 2010

No other publication works harder or travels further! In a period of global financial turbulence, company failures, re -structures and negative economic growth it seemed like everyone in publishing was battening down the hatches and sitting tight. Everyone that is apart from VanillaPlus magazine. 2009 and 2010 saw substantial growth and investment in VanillaPlus. We enhanced our existing products, broadened our portfolio and invested in our circulation. Whilst other magazines were falling by the wayside, look what VanillaPlus did for you: BOOSTED VanillaPlus increased its presence at key events and attended 47 events in 14 different countries across Europe, Middle East, Africa and the USA â&#x20AC;&#x201C; ensuring the furthest possible reach for its advertisers and gaining more key readers around the globe.

INVESTED VanillaPlus continued to invest in circulation, adding top level new names across Europe, Middle East and Africa. At the same time we cleaned and refined our data and got to know our readers even better. See our 2010 Media Pack for the latest details.

LAUNCHED VanillaPlus launched a new monthly series of Live Thought Leadership Webinars â&#x20AC;&#x201C; globally accessible events offering up to the minute interactive debate with top level speakers and analysts. VanillaPlus launched Video Talking Heads - C Level interviews addressing key topics, available as podcasts on www.vanillaplus.com

INCREASED VanillaPlus increased the frequency of its e-newsletter, VanillaPlus Bites to monthly and enlarged its circulation to over 14,000 key readers every issue.

VanillaPlus launched a new digital edition of the magazine - enabling global access to it via www.vanillaplus.com

IMPROVED VanillaPlus revamped and expanded its website, www.vanillaplus.com

We firmly believe no other IT & Comms magazine works harder, travels further or invests more to offer the best possible value and quality to its advertisers and the best possible reader experience. Make 2010 the year you join VanillaPlus!

www.vanillaplus.com

CONTENT PARTNERSHIPS: WEBINAR REVIEW

The strategic value of content partnerships A recent VanillaPlus webinar, supported by Intec, discussed how service providers could generate revenue by operating their own app stores. Steve Rogerson reports. Apple and Google’s Android have driven the app store market with other content providers holding a relatively small share. However, service providers are in a unique position to offer their own app stores and start to eat into what is a growing business. To do this, they must look at what it is that makes the likes of Apple and Android so successful. The first factor to remember is that Apple does not make a lot of money from applications, rather it uses them to power the brand and drive sales of its devices. “Apple is not too bothered about how much it makes from applications,” said Mac Taylor, senior analyst with Moriana Group. “If you are an application developer, making money with Apple is a lottery.” Few can make apps pay The other factor is that the vast majority of applications are free, but the applications that are paid for are used more by those who download them. Another possible revenue source is to sell advertisements on top of free applications, but only about 5% of applications suit that model. “The best way to make money from an application is to sell it,” said Taylor. “The problem is there are far too many applications. Operators need to look at what assets they have that the likes of Apple and Android do not.” The biggest users of applications are smartphones and key for a service provider working in this space, believes Monica Ricci, Product Director for cross-portfolio marketing at Intec, is to treat both consumers and developers evenly, despite their different requirements. The consumer wants an easily accessible source of the largest collection of applications. The developer wants to access the largest pool of consumers, and information on how the applications are being used to help develop future applications.

already have an established relationship with the customers and access to a large pool of data about those customers. They can provide flexibility in billing and pricing, with bundles and volume based deals. Also important is providing a wide variety of content to stimulate demand. This means building a relationship with many content providers. “You can have hundreds of thousands of them from the very small such as two geeks in a garage, to the very large such as Disney and Warner Brothers,” said Srinivasan. “They all need to be managed efficiently and they need to be compensated in a timely fashion.” One problem is moving a consumer base that likes and uses the vast amounts of free content to become one that is willing to pay for content.

You can see the webinar in full by going to: www.vanillaplus.com

“[Content partners] need to be compensated in a timely fashion.” - Balaji Srinivasan, Intec

“Consumers want to personalise their devices and free content drives that,” said Ricci. “But you need a strategy to migrate them from exclusively free to content they will pay for and derive value from.” One way is to have free versions of an application with extra content available for a fee, or provide applications that are free for a limited time but need paying for after that period. Whatever the options taken, the app store market can provide rich pickings but to compete with Apple, Android and others service providers must leverage their own strengths, and they are in a unique position to do that.

Monica Ricci, Intec: Migrate users from exclusively free to content they will pay for.

“The service provider has to deliver value to both these parties,” said Ricci. Treat partners like customers Balaji Srinivasan, business development manager at Intec Settlements, took this further, saying: “You have to provide the same level of service to the content provider as you do the consumer. Treat your partners as you would your customers.” Service providers have an advantage in that they VANILLAPLUS AUGUST/SEPTEMBER 2010

S E R V I C E

A S S U R A N C E

EXPERT OPINION:

Key steps to increasing subscriber satisfaction and reducing churn in mobile data services The explosive growth of mobile broadband and smartphone usage is pushing mobile operators to offer new data plans designed around bandwidth usage. As Cyril Doussau de Bazignan reports, the end of unlimited data plans leaves the door open for subscribers to reassess which providers they are willing to contract with. At the same time, mobile data services are gaining an unprecedented importance in people’s lives, where mobile applications are increasingly utilised at work and during free time. The new addiction to mobile data services and the fact that mobile operators are converging in offering the same choice of smartphone devices is changing customers’ consumption behaviour. The author is Cyril Doussau de Bazignan, Product Marketing Director, InfoVista. cdoussau@ infovista.com

Today subscribers are looking for the right balance between their quality of experience (QoE) requirements, the availability of the applications they are commonly using, and the budget available to them. And as QoE is becoming an increasingly important consideration in choosing an operator, mobile operators are currently realising the challenge to secure mobile data services quality. The challenges of managing mobile data services The utility and quality of data services is one of the critical aspects driving our choices as consumers. For example, consider one popular application, Knocking Live Video, which allows users to share live video over two smartphones. The whole point of this application is to use it instantaneously, when you want to share something that is happening in the moment with friends, family, or business colleagues. But if you get the message “too many knocks in progress,” the end-user experience is immediately degraded.

VANILLAPLUS AUGUST/SEPTEMBER 2010

The result is customer churn, the need to drop service plan prices, and increased costs in customer retention and acquisition. Many mobile users are no longer locked into long-term plans with their providers, and exclusive offerings that might help retain customers, such as the one built around the iPhone, appear to be coming to an end. To overcome these often grim market realities, CSPs are under pressure to differentiate themselves from the competition in three key areas: price, innovation and quality. Achieving a competitive price Aggressive pricing to capture market share with flat-rate data plans, combined with a need to support the exploding volume of network traffic has been pushing down mobile data services average revenue per user (ARPU). As a result, there is little choice but to evolve data plans from a flat-rate approach to usage-based billing. At the same time, mobile CSPs are required to deliver on the stringent performance objectives of their Adaptive Private Networking service level agreements demanded by business customers. To accomplish this requires a better understanding of how subscribers and business customers consume data services – such as what applications they use, how much, and when. Without this insight it is difficult, if not impossible, to strategically upgrade network capacity or to participate in policy shaping discussions.

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The realities facing mobile communication service providers (CSPs) today pose the danger of creating a vicious cycle. Explosive growth in network bandwidth utilisation; strong competition to acquire new customers; congested networks; commoditised mobile data

service plans; and the inability to assure application performance for users lead to poor end-user satisfaction.

To lower their OpEx and CapEx so that they can optimise their pricing, mobile CSPs have been actively outsourcing their mobile data services or OSS to third party partners. This trend towards outsourcing creates a need for managed services providers to equip themselves with solutions that allow them to ensure they are delivering the right application and service performance. In addition, CSPs need the ability to verify and challenge contracted SLAs with service delivery partners (ringtone providers, SMS, MMS, emails, etc.). Industry innovations that will change our mobile data service usage Additionally, mobile operators are investigating ways to enable a subscriber to delay their usage of the service in exchange for a bandwidth credit. This is similar to an airline offering an incentive to passengers on an overbooked flight to take a later one. This practice will allow mobile operators to provide an acceptable choice to customers in situations where there is some data service saturation, and will lead to an increase in customer satisfaction without having to invest heavily in all silos of the mobile infrastructure. But, once again, this requires visibility at the subscriber level and the ability to communicate with customers concerning their specific usage through customer portals. The challenge of assuring quality of experience (QoE) The shift to measuring and managing quality of service (QoS) at the subscriber level requires transformation in existing OSS capabilities. Current capabilities, focused on managing aggregated traffic flows in packet core networks through control plane-based probe systems, need to evolve to collect individual mobile subscriber level information at the Gateway GPRS Supporting Node (GGSN) and Serving GPRS Supporting Node (SGSN) user plane. Leveraging actionable real-time information on GTP traffic will accelerate data service troubleshooting, making it possible to instantly know why mobile applications are not performing or mobile users are unable to connect to a service. This knowledge, essential to ensure the end user QoE, can be enhanced by a multi-dimensional data model that supports realtime business analytics to gain a better understanding of how subscribers use specific mobile data services and how applications consume the service providers’ limited network bandwidth and resources. Armed with such an understanding, the ability to support customer QoS requirements and assure

user QoE can be evaluated. Business insight is also improved by the ability to navigate through views per applications, countries, GGSNs, and subscribers. This new capability of applicationaware and subscriber-aware management is also critical when it comes to enabling effective policy management of data traffic. Ensuring success with differentiation Michael Howard, principal analyst and cofounder of Infonetics Research, recently summed up the critical need for enhanced visibility this way: “The explosive growth of smartphones and mobile broadband connections is making it increasingly difficult for mobile service providers to manage the performance of mobile data services. Providers that invest in deep packet inspection (DPI) technology for the packet core network increase their visibility into critical data services and are, therefore, able to reduce MTTR and assure mobile data service performance – and this results in greater customer satisfaction and less churn. Products such as the InfoVista 5View Mobile IP provide the capabilities mobile operators need to secure their mobile data services and more rapidly troubleshoot performance degradations.”

By offering the best QoE affordably, “mobile operators can gain from the current market transition.” - Cyril Doussau de Bazignan, InfoVista

InfoVista’s 5View Mobile IP appliance is a costeffective, carrier-class network appliance that has been designed to monitor, aggregate, analyse, and troubleshoot mobile data traffic going across the packet switched core network of the mobile network infrastructure. It enables providers to analyse real user sessions and evaluate the QoE of the mobile data service at an individual subscriber, service, and customer level. Operating as a standalone device, it avoids the potential for overburdening the GGSN with DPI functionality. The rapid evolution in mobile subscriber data services usage is changing the wireless market paradigm. Mobile operators will need to adopt the right solution that will enable their operation, engineering, and marketing teams to differentiate from their competition. By offering subscribers the best quality of experience at an affordable price, mobile operators have the opportunity to gain from the current market transition. This can be achieved by investing in deep session inspection technologies. Such investments will result in simplifying packet core networks policy management implementations, augmenting subscriber’s satisfaction, and reducing churn.

VanillaPlus Jargon Buster GTP: GPRS Tunnelling Protocol (3GPP) MMS: Multimedia Message Service MTTR: Mean Time To Respond SLA: Service Level Agreement SMS: Short Message Service

VANILLAPLUS AUGUST/SEPTEMBER 2010

CASE

S T U D Y:

GLOBE

TELECOM,

PHILIPPINES

Globe Telecom cuts churn and builds ARPU with convergent fixed-mobile voice strategy Beset by growing price competition on already low ARPUs for voice and messaging, plus rising churn rates, Globe Telecom has responded with a new strategy for the region. With support from messaging partner, Acision, Globe has launched combined fixed and mobile voice services in one virtual package. The results include sophisticated rating and charging, increased loyalty, and a better return on its billing system investment.

Key benefits: • The first convergent fixedmobile voice service for free, unlimited mobile and landline calls in the Philippines • Calls can be made on a single mobile device, with a single SIM, without switching between mobile and fixed line devices • Evolution of Globe’s rating and billing capabilities and increased RoI in its billing infrastructure

Globe Telecom is jointly owned by Ayala Corporation and the SingTel Group, and offers a diverse portfolio of telecoms services including mobile, fixed line, internet, international long distance and data connectivity services. One of its goals is to be the operator with the highest quality of service in the Philippines. Acision has been a messaging partner for Globe Telecom since 1999, driving messaging revenues that represent a large part of the operator’s revenues even today. In 2009, Globe began to collaborate with Acision to launch their service offering, Duo. Market challenges The Philippines is well known as the text messaging capital of the world, and Filipinos have been captivated with texting since the service launched in the late 1990s. Consequently, messaging traffic volumes today

VANILLAPLUS AUGUST/SEPTEMBER 2010

often reach up to 250 million text messages per day in the Philippines, and can double to half a billion messages during festive periods. A key driver for this high messaging growth has been the relatively inexpensive text messaging rates. Historically, voice has been more expensive than text messaging, with each SMS priced at less than US$ 0.02 per message. As a result, Filipinos prefer to send text messages rather than make voice calls. With more than 23 million subscribers, Globe Telecom’s messaging services alone make up 40% of its revenues. However, its voice revenues remained stagnant with a relatively low Average Revenue Per User (ARPU). Combine this with 75% mobile penetration across the country, five mobile operators and three mobile virtual network operators, all vying for a slice of a 29 million potential subscriber base, and the need to launch innovative and differentiated services becomes even more urgent. Combining fixed and mobile voice services in one virtual package is a new strategy for the region. “Intense competition, especially in a maturing market, adds pressure on our (subscriber) acquisition and retention strategies. The Philippines mobile market is characterised as largely pre-paid. Instead of focusing on cost, we looked at differentiation to propel long term growth of the business. Thus, we launched an innovative product offer that utilises both our

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• No need for costly, high-risk ‘rip and replace’ of Globe’s current billing system

When Globe Telecom, one of the leading mobile network operators in the Philippines, decided to deploy a game changing strategy to gain market share from fixed line and mobile operators and achieve market differentiation, they collaborated with mobile data specialists, Acision to offer their pre-paid and post-paid mobile subscribers a virtual landline number and unlimited free voice calls to fixed line numbers within a pre-defined geographical zone.

mobile and fixed line networks,” said Ernest Cu, President and CEO of Globe Telecom.

continuously expanding to reach more subscribers.

Introducing Duo Globe has been offering several customer retention-focused offerings to minimise churn and increase loyalty. A common consumer behaviour is multiple SIM usage, where subscribers acquire multiple SIMs to take advantage of special promotions and then discontinue the service once the promotion period ends. To increase customer retention, minimise churn, and acquire new subscribers, including those from competing networks, Globe needed to launch a ‘sticky’ service that would attract and retain consumers for the long haul.

Acision Flexible Charger is a real-time charging system for mobile bundles and packages, regardless of whether they consist of voice, messaging, broadband or content services. The system enables the rapid launch of any new bundled price plan through GUI (graphical user interface) configuration, significantly reducing time-to-market and protecting current billing infrastructure investments by working in conjunction with the existing billing system. This means that with the Acision system, services can be launched promptly without a potentially costly ‘rip and replace’ of the existing billing system.

This was the intention behind the concept of ‘Duo’, the country’s first convergent mobile and landline call service. To encourage stickiness, Globe worked with Acision to roll out the free, unlimited voice calling service for calls made from a Globe handset to any landline and vice versa. This also applies between Globe post-paid and pre-paid subscribers within the same geographical area code. Calls can be made on a single mobile device, with a single SIM, without the need to switch between mobile and fixed line devices.

Acision Location Gateway is a platform that enables location-based charging. It adds the dimension of location, be it “Home Zone” or “Central Business District Zone” to any mobile service to enable differential charging and targeted content based on location.

Flexible Charger & Location Gateway To launch Duo, Globe deployed Acision Flexible Charger and Acision Location Gateway to provide a platform that facilitates innovative, real-time, location-based charging. By integrating and implementing both solutions, Globe’s mobile and fixed line subscribers are able to make free voice calls when the calls originate within the same geographical zone. Initially, Globe Telecom launched the service within limited city zones, but since then it has made the Duo service available across other areas and is

“With the system, services can be launched promptly without a costly billing system rip and replace.”

Evolving Duo Since the roll-out of the Duo service in 2009, Globe has been focusing on rolling out other innovative services that deliver superior value and exceptional mobile end-user experience for its consumers. Globe Telecom’s Cu concludes: “Acision Flexible Charger and Acision Location Gateway are an excellent fit with our business model, addressing all our requirements while providing a service that was not being offered by our competitors. By deploying these solutions, we have evolved our rating and billing capabilities and increased return on investment in our existing billing infrastructure, without the need for a costly, high risk ‘rip and replace’ exercise with our billing system.”

VANILLAPLUS AUGUST/SEPTEMBER 2010

CUSTOMER

CONTROL

WEBINAR

REVIEW

Give enterprise customers control of their services Enterprise customers want services and billing tailored to their needs in a simple, accessible way. A recent VanillaPlus webinar, supported by MetraTech, looks at how this has been achieved at the service provider, MeetingZone. Steve Rogerson reports. The coming together of MetraTech’s billing products and the conference call service from MeetingZone has created a powerful, yet simple to use offering for enterprise customers. As important, MeetingZone believes in giving its users more control of their services.

Scott Swartz

“This is all about allowing the end customer to configure the platform to their needs.” - Scott Swartz, MetraTech

MeetingZone achieves billing transparency as well as giving more control to its users through its dashboardstyle portal.

“The whole DNA of MeetingZone is redefining the customer experience,” said Bryan Walkey, President for North America at MeetingZone. “We overlay the online transparent billing and customer care from MetraTech with some really great customer focused applications.” Transparent billing Transparent billing is becoming crucial for enterprise customers and is now often a key requirement in the initial request for proposal (RFP). “Interestingly, billing dominates the RFP process, especially if you get into larger more global companies,” said Walkey. “Often we see more than 30% of the RFP dedicated to billing.” Scott Swartz, Founder, President and CEO of MetraTech, added: “The focus on billing is proportional to the size of the deal. The bigger the deal, particularly with global Fortune 100 type companies, with multiple languages, currencies, regions, there is a fairly big interest in billing.” MeetingZone achieves the billing transparency as well as giving more control to its users through its dashboard-style portal. This allows differentiation between users and administrators. Users need the basic information such as how to get into a call and where to find the call numbers and toolbars. Administrators have completely different needs such as tracking and managing users, and controlling costs.

Users can then access real-time billing data for bill back, budget, attendance or other reasons...

The dashboard provides a simple interface for users to invite people to a call, distribute numbers and enter a call using PIN codes. It lets them manage the call with a graphical interface that shows who is on the call plus other related features. And users can access real-time billing data for the call. They can even bring up replays, recordings and transcripts. Administrators from the same dashboard can manage users and the hierarchy, including enabling and disabling users, editing user information, and viewing and paying bills. “It really is an exceptional tool for customers,” said Walkey. “It makes the complex simple.” The billing is a crucial part of this. Swartz said that at MetraTech they have a slogan that says ‘without billing it’s just a hobby’. “If you think about billing, you are separating your customers from their cash,” he said. “So there are several things about billing that must be true; it must be accurate, it must be timely, it must be easy to understand.” He quoted research from Accenture that showed that more than 80% of users regarded bills being easy to understand as important, yet only 11% thought their service provider was performing in that area. Treat customers as individuals Treating customers as individuals can help with this, and that means differentiating on a per customer basis. Enterprise customers especially expect to have tailored deals. “Treating the business to business customer as an individual is extremely important,” said Swartz. The difficulty is taking a complex business covering audio, video and data across different network protocols and tailoring it, yet still making it easy, quick and transparent. To do this, MetraTech uses a process known as dynamic business modelling. “This is all about allowing the end customer – in this case MeetingZone – to configure the platform to their needs rather than forcing them to conform to what a product allows them to do,” said Swartz. “On top of that, it empowers the end business user. They can configure what is available to them. This is what we mean by mass customisation.” You can see the webinar in full by going to: www.vanillaplus.com

VANILLAPLUS AUGUST/SEPTEMBER 2010

EVENT PREVIEWS

Carriers World 2010 27-29 September, 2010 The Royal Garden Hotel, London, UK www.terrapinn.com/2010/cw

Opportunity and strategy for wholesale carriers and telcos Now in its 15th year, this summit is a chance to meet with industry leaders from the world’s top wholesale carriers and operators, learn about overcoming key market challenges and maximise new revenue opportunities to build a sustainable and profitable business. What should you expect? • 40+ senior speakers • 25 hours of networking • Over 350 delegates • Over 70 of the top 100 carriers in attendance • A mix of carriers, telcos, consultants, solution providers and regulators Networking opportunities The conference offers you extensive networking opportunities so you can continually meet and develop new business relationships. When it comes to wholesale in Europe Terrapinn claims that no other event provides you with the networking opportunities that Carriers World does! Trading Room The organisers have now introduced a Trading Room adjacent to the conference room and exhibition area, which is open to all attendees to book tables on the day and have bilateral meetings at the conference. Networking dinner Don't miss the gala dinner at the end of the first day of the conference to relax, enjoy and have an informal meal and drinks with your colleagues.

Pre-conference drinks reception and speaker dinner Ensure you meet with the speakers beforehand at the networking drinks reception on the 27 September, followed by the speaker dinner. Contact system Contact, the online networking tool for the event, ensures more of your time is spent in valuable conversations and meetings with the right people for your business. Speed networking Meet with 350 attendees in just 60 minutes. Speed Networking is designed to quickly introduce you to half the congress attendees in one powerful 60-minute session, these meetings initiate contacts that often last well beyond the three days of the conference and blossom into fruitful and lasting business. If you are looking for a CEO-level meeting with real access to the most successful carriers, decision makers, industry authorities and mobile operators this is the event you need to attend. To book your place, contact: Marcia Ardila at marcia.ardila@terrapinn.com

VANILLAPLUS AUGUST/SEPTEMBER 2010

ENTERPRISE BILLING: WEBINAR REVIEW

How a billing system can keep up with customers’ organisational changes A flexible billing system can help service providers deal with enterprise customers, as delegates to a recent VanillaPlus webinar, supported by MetraTech, found. Steve Rogerson reports. Not all customers are the same. Large enterprises have to be treated differently, not just in the original deals but in the ongoing relationship. In particular, service providers have to respond flexibly to changes in the enterprise organisation. Such hierarchical changes are a normal part of enterprise life and can be quite dramatic, such as when a merger or takeover takes place and different organisations have to be integrated. Adrian King, MetraTech: “Get away from the situation where you have too many workarounds.”

This can be a nightmare for most billing systems and the cost of getting it wrong can be high, as Adrian King, Director of Product Marketing with MetraTech, pointed out from a recent Accenture report. It showed that one in 10 enterprise customers churn because of billing problems. The report also showed that more than threequarters felt their invoices were difficult to understand and more than half had found inaccuracies in their bills. He said many of these problems stemmed from service providers treating enterprise customers like their ordinary consumers.

The author, Steve Rogerson, is a freelance IT & telecoms journalist

Unique set of services? “When I sell to a consumer, I sell a standard set of products or services from the catalogue,” said King. “With enterprises, I sell to them direct and they may have a set of products or services that are unique to them. This may be a particular package or a unique discount. There is a different philosophy that is very tailored and very specific.” According to Dan Baker, Co-Founder of the Technology Research Institute, most opt for

either an off-the-shelf billing system or one that is highly customised. “The off-the-shelf is lower cost but you sacrifice a great deal of flexibility,” he said. “What is needed is the middle ground that is flexible and low cost, but it needs to be flexible enough to handle all the requirements of an enterprise.” The added problem is that even with a customised system that may work and suit the unique enterprise requirements initially, over time (as the enterprise needs change) workarounds have to be added and this can make the system complex and unwieldy. “You want to get away from the situation where you have too many workarounds,” said King. Pradeep Suchdeo, Technical Business Solutions Manager at MetraTech, added: “If you have manual workarounds and the customer wants an adjustment, and it was an individual who did the workaround, you have to try to figure out what was done.” Enterprise demo Suchdeo used the webinar to show how MetraTech’s system handled an enterprise takeover using an imaginary firm called Acme Widget Company that had acquired Widgets R Us; he demonstrated how the billing system handled their integration into the parent company. What was important, he said, was how the system allowed different views that the customer service representative can access, including being able to see the billing system from the point of view of the enterprise company, both for the person who receives the invoice and the department head. It also lets the user drill down to particular dates in the past and future to check that the changes have been implemented correctly. Looking ahead, the user can implement a change now, and then roll the clock forward to see the implications of the changes made. “You just can’t do all that if you have lots of hidden workarounds,” said King. “Many people choose a billing system that can do the job, but not one that can accommodate change.” King also pointed out that having several billing systems can make it even more complex for handling changes, and that there were cost savings to be made by consolidating these billing systems into one enterprise billing system. You can see the webinar in full by going to www.vanillaplus.com

VANILLAPLUS AUGUST/SEPTEMBER 2010

LEFT

FIELD

OPINION

If only I’d known then what I know now! Settling in to the Admiral’s Club lounge in San Jose after a wonderful weekend trekking through giant Redwood forests and tasting lovely wines, with Jeremy’s interesting headline challenge now top of mind, I saw a notice that said the lounge would be closing, permanently. I guessed that this, one of their newer facilities, was just not getting enough patronage. I asked one of the staff if this was the case. She said that this lounge had been open for 20 years! Impossible! No way! Yes, really. Well, a good reminder that memories are often flawed: important for this article. Telling everyone what I might have done differently if in possession of 20/20 foresight poses another problem too: by definition it means ’fessing up to some blunder in the past. Who me? Make blunders? I think not. However, given this reminder of my faulty memory freshly at hand, I decided to turn to an old colleague, Marvin Parker, who is blessed with perfect memory. “Hey Marvin, look back over the past 20 to 25 years and tell me what blunders you’ve seen or predictions you’ve made that you’d like to take back and change.” Marvin, as the somewhat pompous being that he is, responded: “I’ve given my clients nothing but perfect advice.” Some perfect advice Come on, come on. Either back up those claims with some examples of perfection, or cough up an error! “Alright then,” he said, “here goes.” • 21 years ago: He drafted a strategy paper advising a large carrier that they could expect consumer inertia to keep the PSTN and its services in broad use for at least 25 years; despite what some technology pundits were describing as the imminent death of the PSTN. Lots of time to finalise their Next Generation strategy and wind up their legacy investments pragmatically. And please note that even as the number of ‘land lines’ is shrinking every quarter, it is still a business. Hands up everyone who knows that there are still customers paying for wired phone numbers AND long distance charges! • 18 years ago: Another strategy paper from Marvin indicates that mobile uptake in the Americas will be much slower than in Asia Pacific and EMEA, enabling carriers in the Americas to enjoy higher ARPU for many years to come. It also points out that this lagging adoption would enable the carriers to closely follow what was working and what wasn’t,

dramatically lowering their own risk. And the less-than-perfect…? Fine Marvin, your crystal ball does look pretty good. But, please let’s hear at least one instance of the “I wish I would have known...”. “Well,” he concedes, “there is one prediction that, to this day, I cannot believe has not become reality… • Many articles, papers, strategic initiatives all reflect my assumption that service providers would get really, really fed up with paying enormous sums of money for their OSS/BSS applications. They would revolt against high risk IT projects and disastrous migrations. They would reject vendor contracts that weren’t based on performance outcomes. They would refuse to work with vendors whose systems could only be modified and maintained by the vendor’s staff. And that would all happen pretty damn fast. • What I failed to see,“ he adds, ”was the continuation of the never-never plan (never get it right; never revolt). Not only that, I failed to see that some of the most successful OSS/BSS vendors would be able to bring that business model to customers in other industries.”

The author, Barbara Lancaster, President of consultants LTC International, elegantly dodges a tough question from the Editor.

“It means ’fessing up to some blunder in the past.”

“Thank you for that, Marvin, and what would you have done differently?” I wondered. “Put a lot more effort into building those ‘cheap and cheerful’ tools that would have made my view of the future attainable. Some way of making it possible for service providers to have a low cost, highly flexible set of applications that comes close to the vision of ‘plug and play.’ And,” ruefully he added, “probably, I would have bought more shares in those vendor companies who have been able to make inertia work so well in their favour.” VANILLAPLUS AUGUST/SEPTEMBER 2010

Upcoming Events FREE WEBINAR A Microsoft Online Services Case Study Billing, Customer Care and the Enterprise Customer 3rd in the series of MetraTech-hosted VanillaPlus Thought Leadership Webinars 30 September, 2010 10.00 hours Boston, New York; 15.00 London, Dublin; 16.00 Madrid, Berlin, Cape Town; 18.00 Dubai; 22.00 Singapore For details see: www.vanillaplus.com

SDP Global Summit 16-17 September, 2010 London, UK www.sdpsummit.com

by popular demand 7 interactive sessions

CEO Interviews Broadband Symposium Strategy Think Tank Regulatory Roundtable Local Content Panel Discussion

Forum

Customer Loyalty Forum

Analysis Summary Debate

Carriers World 27-29 September, 2010 The Royal Garden Hotel London, UK www.terrapinn.com/2010/cw

Prepaid Mobile 27-30 September, 2010 Hotel Fira Palace, Barcelona, Spain www.iir-telecoms.com/I2PU9VAPL

NigeriaCom 28-29 September, 2010 Eko Expo Centre Lagos, Nigeria www.comworldseries.com/nigeria

Mobile Broadband World 27-29 September, 2010 Hilton London Tower Bridge Hotel London, UK www.iir-telecoms.com/I2GS2VAPL Mobile Payment Services 27-29 September, 2010 Hotel Fira Palace, Barcelona, Spain www.iirtelecoms.com/mobilepayment

ANNOUNCING the first and only telecoms event to focus on Africa's fastest growing market!

E al Egion rs FRr Reerato fo op

Featuring...

Number Portability 20-22 September, 2010 NH Danube City, Vienna, Austria www.iir-telecoms.com/event/np

The only event to gather 35+ Visionary Speakers including 17 Operators & 8 CxOs: Ahmed Farroukh, CEO, MTN Nigeria

Usman Gumi, CEO, Gicell Wireless

Maher Qubain, CEO, Starcomms Nigeria

Tushar Maheshwari, CCO, Starcomms Nigeria

Steven Evans, CEO, Etisalat Nigeria

Samson Isa, Director of VAS, Globacom Nigeria

Lanre Ajayi, CEO, Pinet Informatics

Lucas Dada, Director of Products & Services, Etisalat Nigeria

Kenneth Aigbinode, CEO, ZOOM Telecom Nigeria

Osondu Nkworo, Regulatory Affairs Director, Zain Nigeria

Ifeanyi Amah, Executive Director, iPNX Nigeria

Engr Chike Asadu, Department of Spectrum, Ministry for Information and Communications

28-29 September 2010 Eko Expo Centre, Lagos, Nigeria

Boosting Profitability in Africa's Largest Telecoms Market

Future-proof your network

FREE

Pre-Event Seminar on Fibre Optics 27 September 2010

Sponsored by: Part of the:

Produced By:

Register online for your free or discounted pass today by quoting â&#x20AC;&#x153;VPHP1â&#x20AC;? www.comworldseries.com/nigeria

15th annual event

Over 25 hours of planned networking – 10 more than any other European based carriers event! Sponsored by Gold sponsors

27 - 29 September 2010, The Royal Garden Hotel, London, United Kingdom

Opportunity and strategy for wholesale carriers and telcos

Silver sponsors Sally Davis CEO BT Wholesale

Sally O’Brien Managing Director – International Carrier Markets Sprint

Chris Gabriel CEO Zain Africa

Associate sponsors Helmut Angst Senior Vice President Deutsche Telekom ICSS

Malin Frenning Deputy Head of Broadband Services TeliaSonera

Christian Michaud SVP - Product & Business Development Tata Communications

Pavel Jirousek Chief Wholesale Ofﬁcer Telefonica O2

Bjorn Iversen CEO Telenor Global Services

Adam Sawicki CEO GTS CE

John van Vianen CEO iBasis

Daniel Kurgan CEO BICS

Mehmet Toros SVP – International Wholesale Turk Telekom

Ole Hvelplund CEO TDC Wholesale

Register your place today and meet, network and build strong partnerships with the wholesale carriers industry Response form : Yes! I am interested in attending : Yes! I am interested in sponsorship opportunities

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NETWORK PERFORMANCE

That special feeling Remember your very first date? Most of us look back on that one with a mixture of amusement and embarrassment – most of it because we know now, looking back, just how different men and women are, and how different expectations and approaches would have been for that first meeting. Bear with me, here, says Richard Thomas. One side wanted a relationship – to be taken seriously, to find out more about their partner, to talk about their hopes and dreams. The other side was somewhat more precipitous, with some short-term objectives that didn’t necessarily match those of the other side: willing to make the right noises if it moved things along, but ultimately focused on here and now.

The author is Richard Thomas, Managing Director of NetEvidence. He has worked in the telecoms and networking industry for 25 years, and founded network performance management specialist NetEvidence in its current guise in 1999. www.netevidence.com

Growing up, it takes a long, long time for both sides to realise that men and women are really two different species, sharing the same planet; and longer still to work out that those differences can be precisely what makes a relationship worthwhile, if you handle it right. Business relationship parallels At the risk of breaking the nostalgic spell, take a look at the service provider / customer business today and you’ll find some alarming parallels. Carriers are full of talk: about long-term relationships; multi-year contracts; look-at-me technology that they wish customers would show an interest in; and a professed desire to understand their customers’ needs and businesses. Enterprises, for a number of reasons – some practical and some downright cynical – take a different view. For the most part, if they’re honest, they just want to get on with running their businesses. They really have no interest in how the network functions, but just want it to work so that they can solve today’s problems. They’ll talk contracts if that’s what it takes, and they know SLAs are important – though they’re not entirely sure how far they should go. Customers, it seems, really are from Mars, and providers are from Venus. This is a shame: ultimately, providers want to sell networks, and customers want to buy them. It’s the basis of a relationship, but getting one side to commit seems harder than it should be. How can we make this work better?

▲

Understanding the customer is a good place to start. So what does the customer want? Unfortunately, not what they used to! Time was, when talk of new technologies and detailed knowledge of every nut and bolt would win the day.

VANILLAPLUS AUGUST/SEPTEMBER 2010

Customers wanted to understand every fibre and every router, and use complex tools with more lights than the average starship console to manage them. They’d devote time to this, and resources, and crucially, money.

“Customers, it seems, really are from Mars, and

Not just ‘pillow talk’ Sadly for the network provider, things have moved on. Today’s customer wants to run their business, and would dearly like to outsource running a network which handles their different applications quickly and reliably (that’s true, by the way – we talk to enough of them to know it’s not just pillow talk). What’s missing is the trust which would let them do that.

providers are from Venus.” - Richard Thomas, NetEvidence

In this relationship then, honesty and transparency would help a lot. Providers do know networks better than most customers – it’s their business, after all. Rather than wooing customers with details of what the network is (MPLS! Resilient core! QoS (more classes than the competition!) Providers need to be more open and transparent about what the network does (this area worked perfectly; that part broke last week but we fixed it in two hours). Once customers see this working, and their trust starts to develop, they’ll commit to longer contracts, and invite providers deeper into the relationship – for example, managing LANs and other parts of their IT function; tasks which savvy providers are itching to tie up. If you’re wondering whether you’re going to snare that ideal business partner, here are five key questions you might ask yourself: • How does your products team spend its time? Continually pushing new and apparently ‘sexy’ products onto your sales team and customers, because they feel it’s their job and customers want to see them as dynamic and leading edge? Or making sure your sales folk know a core set of products really well, so your customers feel they understand what you’re really good at? • Do you keep your customers informed about network performance in simple, business-level terms? Or are you still trying to impress them with bulky service updates and complex reporting tools, making a big thing of all the bells and whistles? • If you use the bulky reports, you and I both know your customer never reads them. How much do you care about that? • When something goes wrong with your network, in which order do the following people find out about it (if they ever do)? Your customers; your NOC engineers; your management; your customer services people; your sales people and account management teams? • Have you owned up yet to how pointless most Service Level Agreements are? Customers feel they have to ask for one, but don’t really know what they want; Providers feel they have to offer one, but don’t really know what the customer wants (see previous) or what they’re capable of delivering. Usually, neither side knows or cares whether the SLAs have been met. Are you happy with this state of affairs? We are now getting closer to what customers really want – but it’s certainly not a contract to define up-front how things will work, any more than a pre-nuptial agreement will help a marriage go smoothly. Building a relationship takes time and honesty, simplicity and transparency, resisting the temptation to try and impress with sophisticated high-sounding talk. It’s about listening to and understanding your customers and working hard to build their trust. Trust leads to commitment and ultimately, providers will sell their networks, and customers will buy them – which of course, is what both sides wanted in the first place.

VanillaPlus Jargon Buster NOC: Network Operations Centre SLA: Service Level Agreement

VANILLAPLUS AUGUST/SEPTEMBER 2010

EVENT PREVIEWS

SDP Global Summit 16-17 September, 2010 London, UK www.sdpsummit.com The world’s largest SDP conference is back for 2010 for its sixth year. As the flagship event of Informa’s SDP series, the conference and large-scale exhibition is an occasion to address the crucial issues in advanced content and service delivery, and learn more about the vast range of SDP opportunities. This year's conference is set to feature a more diverse range of speakers than ever before. The event offers more than 50 speakers, including over 20 operator case studies from around the globe. There will be updates from One API and the Wholesale Applications community, streams focusing on emerging market case studies and on the relationship between operator, application store and application developer.

Number Portability 20-22 September, 2010 NH Danube City, Vienna, Austria www.iir-telecoms.com/event/np IIR’s Number Portability 2010 brings together the global players in Number Portability to share experiences, success stories and invaluable operator and regulator case studies. This conference will allow those who are still implementing NP to share best practice and experiences of successful implementation, together with pitfalls to avoid. Operators and regulators from countries with well-established NP can learn invaluable lessons on how to refine existing systems, and ensure that they meet the porting challenges presented by fixed mobile convergence and next generation networks.

Mobile Broadband World 27-29 September, 2010 Hilton London Tower Bridge Hotel, London, UK www.iir-telecoms.com/I2GS2VAPL Mobile Broadband has been cited as the revenue stream that will drive operator profitability and pull the communications industry through the economic slump. If so, is your mobile broadband strategy ready to capitalise on this opportunity? How can you maximise the profitability of your mobile broadband services? What new business models are emerging for mobile broadband service providers and how should you deploy them?

VANILLAPLUS AUGUST/SEPTEMBER 2010

Mobile Payment Services 27–29 September, 2010 Hotel Fira Palace, Barcelona, Spain www.iir-telecoms.com/mobilepayment The technology to support mobile and contactless payments has long been in existence, yet despite significant investment by stakeholders in the m-payment value chain, take-up of mobile payments in the developed world has been slow. Notwithstanding notable deployments in emerging markets, the mobile payment opportunity remains largely unfulfilled elsewhere. IIR’s Mobile Payment Services conference has been specifically designed to help all stakeholders understand how to commercialise the available technologies into products and services that really will drive usage, increase consumer loyalty and grow revenues.

Prepaid Mobile 27–30 September, 2010 Hotel Fira Palace, Barcelona, Spain www.iir-telecoms.com/I2PU9VAPL IIR’s Prepaid Mobile conference will demonstrate how service providers can leverage the huge opportunity presented by prepaid customers – to make substantial profits and tap into new markets. It is clear that prepaid plans have been of more critical value to the average customer in the recent economic climate than ever before. This event will show operators globally how to capitalise on that mass attraction, to gain new customers and to retain their existing customer base.

NigeriaCom 28–29 September, 2010 Eko Expo Centre Lagos, Nigeria www.comworldseries.com/nigeria Nigeria is Africa’s leading telecoms market in terms of subscriptions. It is also one of the most dynamic thanks to its healthy competition levels, its unified licensing regime and the high level of investment it attracts from local and international companies alike. Mobile penetration is higher than the African average at over 40%, and the broadband market is buzzing with competition between the country’s numerous internet service providers (ISPs). As operators are expanding, they are looking for more costeffective solutions to bolster their margins. Outsourcing is a key issue in the market, as well as infrastructure sharing – a number of Nigeria-based companies successfully offer tower-sharing services. All in all, this burgeoning economy offers huge potential and – in a continent where face-to-face is the all important lubricant for business transactions – this event is a must-attend.

Subscribe FREE to our News Update Did you know that it’s completely free to subscribe to the VanillaPlus Bites monthly html news service. Been away on business? Just back from leave? Don’t have the time for the daily updates? Let our editorial team search through hundreds of news stories to find the nuggets that will influence your decisions.

To register for your FREE subscription just send an email with your name, company name & email address to <bites@vanillaplus.com>. You can unsubscribe at any time. For more information call Nathalie on +44 (0) 1732 808690

VANILLAPLUS AUGUST/SEPTEMBER 2010

WEBINAR PREVIEW: 30 SEPTEMBER 2010

A Microsoft Online Services Case Study Responding quickly to market dynamics with innovative cloud services and tailored offerings Key Speaker: Ganga Venkatasubramanian

THE WEBINAR IN BRIEF Speakers:

Ganga Venkatasubramanian, Product Manager, Microsoft Online Services Scott Swartz, CEO, MetraTech Corp.

Moderator:

Jeremy Cowan, Editorial Director, VanillaPlus

Date:

Thursday 30 September, 2010

Time:

10.00 hours Boston, New York; 15.00 London, Dublin; 16.00 Madrid, Berlin, Cape Town; 18.00 Dubai; 22.00 Singapore

Duration:

60 minutes FREE Registration at: www.vanillaplus.com

Is your industry undergoing a strategic business model shift that aims to deliver better service to its customers? Are new technologies like Cloud, Mobile, WiFi and others appearing on your horizon? As a service provider, staying ahead of competition, reacting quickly to market conditions and addressing the continuing requests of your customers are some of your biggest challenges. To meet them, you must be able to redefine your offerings, extend into different areas of expertise, or find new ways to monetise and distribute your services, all while meeting the needs of both your internal and external customers. In the third webinar in the series on Billing, Customer Care and the Enterprise Customer, Ganga Venkatasubramanian, Product Manager of Microsoft Online Services and Scott Swartz, CEO of MetraTech will discuss how Microsoft has implemented a cloud computing business model, including a dynamic billing system that reacts quickly to change and improves the customer purchasing and invoicing experience. Join us to learn how Microsoft:

Scott Swartz

• Implemented a multi-dimensional cloud services billing system in 1/3 of the expected time • Selected the systems and vendors that would support its new business models • Created opportunities and tools for channel partners to deliver value in a SaaS model • Has since readjusted the offerings based on market response and lessons learned

Register FREE today for the 3rd Webinar in the Series: Billing, Customer Care and the Enterprise Customer Join us on September 30, 2010 at 16:00 CET to gain valuable insight into how Microsoft has responded quickly to change with innovative services and tailored offerings. To register FREE, go to www.vanillaplus.com Or Call Charlie Bisnar on +44 (0)1732 844017 Email: Charlie@vanillaplus.com

VANILLAPLUS AUGUST/SEPTEMBER 2010

Ganga Venkatasubramanian is a Product Manager for the Microsoft Online Ganga Venkatasubramanian Commerce Platform which enables customers and partners to buy and manage subscriptions to Microsoft’s SaaS offers such as Exchange Online, Sharepoint Online and PaaS offers such as Windows Azure , SQL Azure. Ganga is responsible for defining the long-term vision and prioritising investments for the commerce platform. Prior to joining Microsoft, Ganga led the web development group at AXA Life Insurance, Japan where he was responsible for designing and implementing sales force automation (SFA) and CRM solutions. He also worked as a technology consultant for Infosys Technologies focusing on enterprise IT customers in APAC. Ganga holds a Master of Business Administration degree from the University of Michigan, and a Bachelor of Electronics & Telecom Engineering from the University of Pune, India.

C L O C K I N G

O F F !

Pasta, the mafia and what it means for OSS In a continuation of the industry’s shift to using the terminology of the New Jersey mafia to market its offerings, a North American telecoms executive recently ‘reached out’ to me to ‘share some learnings’. While ‘riffing’ on a series of points surrounding telecoms transformation, the gentleman who (although not of Italian descent) is well connected and highly respected in the telecoms operator family, started to lay out for me an analogy that is just too good to refuse. Unsurprisingly, says George Malim, it concerns Italian food.

Current back office systems, he said, resemble spaghetti Bolognese – a tangled mess of ingredients – but that situation is changing and we are starting to enter the lasagne era. The same ingredients are used but come together in a neatly layered approach that delivers management efficiency horizontally across the business. I lost track of the analogy at that point, it was approaching lunchtime and thoughts of momma’s home cooking distracted me from my usual single-minded focus on all things OSS/BSS. Nevertheless, I think there is a good point being made. Order is being created out of chaos within telecoms operations and we are starting to see systems feed in to horizontal ‘exposure layers’ that enable disparate data from vertical silos to be integrated and accessed by a range of systems. It isn’t the end-to-end dream of a smoothly integrated order-to-cash process that encompasses every stage of the customer relationship, but it is a marked improvement on the fragmented mess that existed before. I would contend that the lasagne moment is some way off and, without deviating from the Italian cookbook, feel we’re more in the cannelloni period. Some order exists, there are defined layers but there is more scope for chaos when it comes to placement of the pasta.

“I’ll be careful who I reach out to if I’m to avoid sleeping with the fishes.”

their operational practices and innovations, and operated in clearly defined territories. They now face upstarts coming on to their turf who are prepared to do business in a different way and aren’t afraid of stepping on the toes of the traditional telecoms dons. That lack of respect has shocked the traditional operators into transformation rather than gang warfare. The cosy monopolies are gone and have been replaced by multi-directional business models and a greatly complex value chain, at least that’s what the telecoms operators have been reaching out to me to share.

The author, George Malim, is a freelance telecoms journalist

Perhaps it’s a cunning strategy of theirs to learn the new shape of the industry and get users and partners hooked on the data their networks carry, before cutting off the access, jacking up the prices and freezing out the newcomers. The power of the telecoms families may be poised to re-assert itself and ’90s management speak is morphing into fighting street talk in reflection of that. I will need to be careful who I reach out to with this view if I’m to avoid sleeping with the fishes.

Turf wars I suppose the mafia terminology is being used because the telecoms industry feels like an old crime family without – I hasten to add – the crime (Worldcom and Enron aside). Historically, operators have had monopolistic control of their markets, jealously guarded

VANILLAPLUS AUGUST/SEPTEMBER 2010

ANNUAL DIRECTORY CLOSING SOON! Get listed today in the 11th edition of the VanillaPlus Annual Directory! Ensure your company is seen amongst its competitors as a key player in the OSS/BSS space.

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Policy Management SPECIAL SUPPLEMENT 2010 AUGUST/SEPTEMBER 2010 VOLUME 12 ISSUE 4

P O L I C Y C O N T R O L , C H A R G I N G , P R O F I T & P E R S O N A L I S AT I O N

C-LEVEL VIEW: ▼

Comptel’s CTO tells how to keep pace with network evolution

PRIVILEGE OR RIGHT? There’s a commodity crisis in 21st Century connections MOBILE DATA Are you Profiting from the Mobile Data Boom? CHARGING & POLICY Real-Time Charging and Policy Management MUST converge!

▼ ▼

PLUS!

POLICY MANAGEMENT 2.0 Welcoming the Peasants to ‘Telecom Versailles’ in the Wireless Revolution

VANILLAPLUS POLICY REVIEW No role for the Gatekeeper? ‘Policy’ morphs into a sales tool

Operator Use Cases for the 3 Ps: Policy, Personalisation & Profitability Policy & Charging News • VanillaPlus Videos: Join a Content Eco-system

www.comptel.com

Take Charge of Your Services!

Policy Control & Charging

C O N T E N T S

N E W S

Discussion is the best policy

NEWS IN BRIEF Comarch launches ‘bill shock’ prevention product

If one topic has dominated the BSS/OSS space over the last 18 months it is Policy Management. Conferences and exhibitions in Barcelona, Nice and beyond have been buzzing with talk of throttling bandwidth, maximising profitability, curbing network ‘misuse’, and enhancing our nascent understanding of personalisation (surely the next key skill for us all). In that time, VanillaPlus has been at the forefront of Policy Control coverage, printing in-depth features, running the latest news, and posting video interviews on the subject with several experts (see the videos at www.vanillaplus.com). But there’s so much to say on the subject we felt the only way to get to grips with it was to dedicate a whole supplement to it in the magazine. Et voilà. Thank you to everyone who has worked so hard to bring this special 18-page section to you. We hope you find it helpful.

SUPPLEMENT CONTENTS Keeping pace with network

Profiting from the mobile

Real-time charging and policy

Mobile users are often not aware of the fact that some applications connect to the internet automatically upon launching. Even if they are aware, they may be oblivious to the exact charges that apply. This can lead to user complaints, and subscribers switching their mobile operator.

He added, “The solution enables the operator to set service usage limits, and end users can specify whether the limit is expressed in megabytes, minutes or with a monetary value. When 80% of the usage limit is reached, they are informed of this and must confirm that they accept the continuation of the service and charging. In the case of a lack of confirmation received from the user, the service is automatically disconnected and blocked. Depending on the service and business model, the methods for interaction with the end user include SMS and email.”

evolution data boom management must converge S10 Policy drops its gatekeeper role to become sales tool S14 3 Ps: Policy, Personalisation & Profitability S15 Welcoming the peasants

Bakrie’s EVDO mobile broadband network uses real time rating & charging

to ‘Telecom Versailles’ S18 Connectivity’s commodity crisis

(Cover Photo: Gareth Senior, Comptel’s CTO, writes on pages S4-S5). Comptel Dynamic OSS solutions enable telecom service providers to deliver services flexibly and charge them effectively. Comptel's wide expertise in service fulfilment, mediation and charging empowers our customers to focus on delivering innovative services. Comptel has provided software solutions to 280 service providers with 800 million subscribers in 85 countries. The Group has about 600 employees worldwide, and net sales were €75 million in 2009. www.comptel.com

PUBLISHED BY Prestige Media Ltd. Suite 28, 30 Churchill Square Kings Hill, West Malling Kent ME19 4YU, UK Tel: +44 (0) 1732 844017

The growing use of mobile data services has led to the now well-known problem of 'bill shock' when a subscriber receives a bill significantly higher than usual, typically as a result of using data services when roaming. Comarch's response is an addition to its portfolio, the Comarch Bill Shock Prevention system.

“We felt it was important to enhance our telecom portfolio with a solution that would control voice, data and SMS services in real time, and work for both local and roaming services,” explains Krzysztof Kwiatkowski, BSS Product Manager, Comarch SA.

Jeremy Cowan, Editor, VanillaPlus

B R I E F I N G

PT. Bakrie Telecom Tbk. (Bakrie Telecom), one of Indonesia’s fastest growing mobile operators, has extended its investment with Redknee, a provider of billing and charging software for communications service providers. Bakrie Telecom has deployed the Canada-based company's real-time rating and charging system to offer more valueadded data services to its 11 million subscribers as Bakrie expands nationwide. Launching its EVDO network, Bakrie Telecom aims to offer innovative mobile broadband services to the Indonesian market, including low cost wireless devices that provide internet access anywhere, anytime. In order to capitalise on this opportunity, Bakrie Telecom has increased its investment in Redknee’s real-time rating and charging solution, NGRC, to support the anticipated boost in network data traffic and offer differentiated value-added services to its subscribers.

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

P O L I C Y

M A N A G E M E N T

Policy control: Keeping pace with network evolution The deployment of 3G/HSPA networks and the wide availability of devices, such as smartphones and netbooks, have made mobile broadband a reality — and now, says Gareth Senior, communications service providers (CSPs) worldwide are attempting to manage unprecedented usage. According to a June 2010 report from The Global mobile Suppliers Association (GSA), Vodafone Group saw data traffic on its European networks grow by more than 100% over the past year, and Telekom Austria Group witnessed its mobile broadband customer base increase by more than 130%, while AT&T realised a more than 5,000% increase in usage over the past three years. Many other operators across the globe have also recently experienced similar uptake growth. The author is Gareth Senior, Chief Technology Officer, Comptel Corporation

CSPs are challenged with handling not only the heavy burden the data explosion places on network capacity and the overall management of bandwidth, but also the more personalised nature of these lifestyle services, which might involve everything from network access, service definition and payment plans to the type of media and entertainment content involved.

S4 26

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

To achieve this, CSPs have begun to realise the power of policy control. A recent TeleSemana report, co-sponsored by Comptel, confirmed that the main drivers for Latin American operators implementing policy control are the personalisation of services (33%), the reduction of the OpEx of traffic (27%), and the limiting of excessive bandwidth usage (17%). (See Fig.1) Meanwhile, Heavy Reading recently surveyed CSPs across the globe, and found that they see policy control as critical for applying “fair usage” management techniques to better handle network congestion, improving the quality and depth of network traffic, as well as offering tiered or customised services to different customer segments. Until quite recently, the main tool at the disposal of CSPs to balance these potentially conflicting requirements was billing or charging. Pricing for services was used to optimise revenue and customer satisfaction, as well as limit access to resources (rather premium pricing for premium services). But now, with the deployment of 3G/HSPA networks and mobile broadband offerings, policy control is proving to be a formidable component within the armoury of

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Meeting demand In order to keep up with the demand for mobile broadband, operators have to strike a balance between ensuring customer satisfaction and extracting more money from them, while guaranteeing that resources and capacity remain in check. Ideally, CSPs would like to keep customers happy enough, and for them to spend as much as possible and use as few resources (such as bandwidth) as possible. Customers, on the other hand, want total satisfaction — they

want to use as much capacity and pay as little as they can.

CSPs — particularly when the capabilities are tightly coupled with charging. More attractive services Real-time charging when linked with usage control, for example, is enabling operators to monetise certain network investments through more attractive customer service offerings that involve content from multiple sources. CSPs are realising that this combination allows them to provide a high-quality customer experience (and give them control over what services are delivered, how and at what price) within the constraints of their service network. In all, 63% of respondents to the TeleSemana study thought that it was very important to combine policy control with charging or billing, and an additional 27% thought it was important. Likewise, 97% of respondents to the Heavy Reading survey thought it was essential or important. In fact, the 3rd Generation Partnership Project (3GPP) has recognised policy control’s connection with charging, and its specifications are now emerging as the de facto standards for policy control. Originally drawn up in the context of IMS (IP Multimedia Subsystem), the 3GPP standard for policy control defines a number of key components, including the Subscriber Profile Repository (SPR), the Policy and Charging Rules Function (PCRF – the part of a policy control solution that makes the decisions), the Policy and Charging Enforcement Function (PCEF – the part that implements the decisions), as well as the Offline Charging System (OFCS) and Online Charging System (OCS) to handle post and prepaid charging, respectively. When these components work interactively, CSPs can implement more attractive, price-based service options, such as dynamic bundles, defined spending limits and even advertising subsidisation — all to maximise revenue potential. LTE and 4G are coming fast If CSPs are to further capitalise on the unrelenting upsurge of mobile broadband, with the evergrowing use of smartphones, netbooks and other advanced devices, they need to consider the imminent arrival of LTE and other 4G technologies. In another June 2010 report, the GSA said that 80 operators have made firm commitments to deploy LTE networks in 33 countries, and the association anticipates that nearly 22 networks will be in service by the end of this year, and at least 45 networks will be in service by the end of 2012. This strong momentum for LTE not only opens up the potential for further growth and other opportunities for CSPs, but also demonstrates the even more critical role that policy control plays in the deployment of next generation networks. Nearly two-thirds of operators that responded to the Heavy Reading survey see LTE having a major impact on their approach to policy control; however, they are not fully aware as to how it will affect them.

Operators still face many of the same challenges: How can they make money from their network investments? How can they become a smart pipe? How can they manage increased traffic and bandwidth usage? How can they create services that utilise the all-IP nature of LTE and integrate with legacy and 2G/3G networks — and continue to provide a seamless customer experience? And, the evolution to LTE is not a simple path from 3G/HSPA. End-to-end OSS is critical A real-time, end-to-end OSS that controls all of the LTE service architecture layers – from CRM and billing to subscription management to service and configuration management – is critical for CSPs. As the intelligent network (IN) (where policy control and charging typically functions) potentially disappears with LTE, every transaction must be ‘policed’ – or controlled and charged.

“As the IN potentially disappears with LTE, every transaction must be ‘policed’ — or controlled and charged.” - Gareth Senior, Comptel Corporation

From a business level perspective, this can be done to ensure a better customer experience, for example, when it comes to fair usage, and to offer and deliver measurable quality. Operators can also use policy control for the charging of third-party products and for upselling. With LTE, virtually every end-user transaction travels through the policy control engine, and every subscriber effectively needs to be treated as pre-paid. Clearly then, PCRF and charging will need to be able to scale to handle all of these transactions. In order for CSPs to monetise their mobile broadband network investments (whether it be 3G or LTE) and avoid being a flat-fee bit pipe, active, end-to-end policy control is key. Whether it be used for ensuring better quality of service through bandwidth management, driving revenue from innovative, personalised offerings or creating and charging successful and manageable service packages, policy control should be top of mind for CSPs today — and in the future, as networks continue to evolve. Fig 1. The main drivers for Latin American operators implementing policy control 33% Personalisation of services

6% 7%

27% Reduction of traffic OpEx

10%

33%

17% Limiting excessive bandwidth usage 10% Improving reliability of key services

17%

Understanding the user

Blocking traffic

27%

(Source: TeleSemana report, co-sponsored by Comptel)

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

POLICY

MANAGEMENT

EXPERT OPINION:

Profiting from the boom in mobile data with policy management In the fast moving broadband market, predictions of which innovation will next drive growth, are an exercise of guesswork, says Jonathan Downey. Anyone forecasting future data bandwidth usage patterns should be wary of anything but the very nearestterm predictions. What is crystal clear, however, is that the surge in data traffic will continue, as user behaviour adapts to faster broadband, better devices and compelling applications. This is forcing operators to walk a tightrope between competitively priced offers to grow market share, and managing the network costs of meeting the seemingly insatiable demand for bandwidth. The author is Jonathan Downey, Director of Product Marketing at Openet

Policy management provides a flexible and extensible approach for operators to address a multitude of data opportunities and challenges. A recent Heavy Reading analyst report on the policy market points to operators wanting to use these capabilities to address a multitude of data opportunities and challenges. The inherent flexibility of a rules-based policy management system, with its ability to dynamically implement service-, session-, and subscriber-aware rules gives operators a very robust capability. It enables operators to holistically configure and blend various parameters to create new and richer solutions: to enhance existing business models, to offer a differentiated customer experience, and to allocate finite network resources.

Policy enables creative pricing and packaging of mobile data To avoid the commoditisation trap, future revenue growth and profits from mobile data will be heavily influenced by how operators package and sell their data plans to address the diverse needs of well defined market segments. Policy management can be a highly sophisticated approach capable of managing the delivery of data traffic, enabling operators to address the sophisticated needs of both high-ARPU users and the specific needs of low-ARPU, occasional users. With smarter devices and new applications driving consumer demand for internet connectivity, operators that can rise above confusing, cost per MB and volume quota pricing strategies will be in a position to win big. One of the most common applications of policy management is using it to create service plans based on data usage caps, wherein carriers create a data plan that allows a subscriber to consume a specific volume of data per billing period. At Openet, we have seen operators evolve their data plans from a simple cap, to one that is very specific to network conditions, devices and subscriber activity.

â&#x2013;˛

Looking at an operatorâ&#x20AC;&#x2122;s customer base there's a huge disparity in the amount of data that subscribers use and the amount of bandwidth consumed, even for customers using similar devices. Service tiers enable operators to reach different market segments, by creating data plans targeted at the needs of different user types. Operators can segment their customer base by offering a choice of data plan and prices, composed by speed of access, data volume limits, exclusion of certain applications, and devices. This gives operators the flexibility to create innovative plans tailored to specific subscriber traffic mix, device and application usage types. Fig 1. Top Drivers For Policy Management, Heavy Readingâ&#x20AC;&#x2122;s Next Generation Policy Management Study, July 2010

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

A differentiated subscriber experience Mobile operators are central to subscribers’ internet experiences as more and more users become familiar and comfortable with using mobile data services. This applies equally to users with high data use and high dollar plans, as well as novice users with less data usage and simpler contracts. Putting the capabilities in place to improve the customer experience for all subscribers will provide revenue and differentiation opportunities. Policy-based controls such as parental and content controls, ‘bill shock’ and roaming controls, URL filtering, notifications, time of day restriction and quality of service can all form part of the managed customer experience. These provide opportunities for operators to add value to differentiate their services, by improving the user’s service experience. When dynamic policy management controls are combined with charging capabilities, the concept of personalisation is further extended, to include how subscribers can pay for their services. These controls make it possible to make intelligent, realtime decisions based on whether the user has sufficient credit to make a payment, if they need to purchase a service pass or bundle, have an inclusive data plan, whether they are in a WiFi hotspot or are roaming. With this information, operators are enabled to deliver an integrated, interactive and highly individualised service experience to customers. Better congestion management After years of operators being forced to compete for customers on price, there are signs that smartphone users care more about network quality than tariffs, giving operators the chance to claw back some pricing power. Ironically though, as more usage and more demands are placed on network bandwidth, for many operators, service is becoming increasingly spotty, networks are becoming overloaded, and capacity is being crunched. It's clearly a critical issue, with forecasts showing demand for data due to accelerate. The widely quoted Cisco VNI Mobile forecast from February, 2010 estimates that worldwide mobile data traffic will double every year through 2014, increasing 39 times between 2009 and 2014. Investments in network capacity alone will not ensure operators can sustainably deliver a high-performance broadband experience. Operators in search of more efficient bit delivery are enlisting intelligent policy and network management controls to continue growing their data revenues profitably. Policy management can

be used to align data plans with subscriber usage, to influence subscriber behaviour, to reduce stress during peak congestion periods, and where necessary, to manage bandwidthintensive applications and services during periods of network strain.

Fig 2. Cisco’s Global Mobile Data Traffic Forecast

Policy management enables carriers to become more congestion- and application-specific in how they manage the flow of data traffic on their networks, implementing true, dynamic, real-time subscriber management controls to optimise the wireless experience and minimise congestion in the network. Conclusion Rapid mobile data traffic growth is forecast to accelerate with new smart devices, mobile dongles and the growing popularity of video and social networking. Even though network evolution brings higher capacity and new technology like HSPA+ and LTE, the radio resources will always be scarce and building networks to maintain high quality for all subscribers will be expensive. With policy controls, operators can alleviate the strain on network resources by enforcing subscriber- and application-aware policies to mitigate the need for network overbuilds. But more importantly, these controls provide the means to innovate. Policy management enables network-based capabilities to be flexibly packaged and sold, giving operators the tools to intelligently manage network growth, more effectively meet subscriber needs and better match revenues with network utilisation. Operators recognise they must innovate if they are to make the most of their resources, and also deliver differentiated service. With new services being delivered almost exclusively over IPnetworks, operators have thus far struggled to identify, measure, manage and monetise IPbased services in real-time. The good news is that with policy management operators can marshal the innate capabilities of their network and BSS assets, to create value by introducing new services and data plans.

“Policy management enables networkbased capabilities to be flexibly packaged and sold.” - Jonathan Downey, Openet

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

POLICY

MANAGEMENT

EXPERT OPINION:

Why real-time charging and policy management must converge Policy management is a hot button these days. What started out as a fixed line appliance utilising deep packet inspection (DPI) for traffic tiering has blossomed into a crowded market of vendors promising to help solve operator issues with growing mobile data usage. As Dave Labuda points out, while most operators agree they must have some form of policy management, it has become a loosely defined term covering practically anything that helps control or shape network traffic and customer behaviour. When you take a closer look, it appears the left hand does not know what the right hand is doing. This often-heard phrase perfectly describes the current state of the policy management sector.

The author is Dave Labuda, Co-Founder and CEO of MATRIXX Software

For a niche that prides itself on sophisticated systems that help operators manage network bandwidth consumption and marry it up with subscriber service preferences, we still have a long way to go to ensure that policy management has a firmer basis in financial reality. That’s not to say that this fast-moving sector has got it wrong; much progress has been made to solve two of the most troubling dilemmas that operators have faced in recent years. First, the inability to enforce fair usage or usage caps on heavy bandwidth users. Second, the inability to tier traffic based on pre-defined priorities of the traffic type. But if we zoom out again to the bigger picture, you can see that there are still major issues fundamentally caused by a lack of linkage between what a subscriber is spending, what they are actually using, and their understanding of data pricing. Information about pricing, subscriber usage, balances and the ability to implement spend controls exist within the rating and charging applications. So why are policy management solutions and online charging systems (OCS) often being implemented as stand-alone solutions, by different organisations, each existing in a separate vacuum?

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

The real limitation of stand-alone network policy management systems is that they have no view into subscriber spend and therefore can only make decisions based on data consumption. There’s little visibility into subscriber balances, pricing, billing relationships, credit history, balance sharing and other criteria, and this can cause a number of problems with the subscriber experience. These include the throttling of high value customers’ usage, the inability to tier megabyte pricing based on consumption, or to offer bonuses or discount packages that encourage further use. Missing the point? Policy decisions that are based solely on the network without reference to the subscriber spend can often miss the practical point, too; having a Blackberry® download email every two minutes while you’re in a lengthy meeting is pointless because you can’t view it, and yet this activity could result in you being throttled or even cut off by the time you emerge from the boardroom. Another problem is that network policy systems only count abstract resources such as kilobytes and megabytes, making it tough for subscribers to set meaningful usage limits. The OCS, on the other hand, watches over spend thresholds and understands the subscriber from the perspective of managing balances, discounts and credit authorisation. It’s therefore better positioned to authorise or de-authorise data network access, or varying qualities of service, by taking these factors into account and providing a better subscriber experience. By contrast, the OCS does not have a view of network or base

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Improving decisionmaking visibility This situation has largely arisen because operators have been understandably keen to ensure fair usage in order to protect their assets. So, network policy management systems have been implemented that look at network congestion, subscriber bandwidth and data

consumption limits. Although these systems have been successful in metering out data access to subscribers, they do have one big drawback if they’re asked to work alone in the network: providing a compelling subscriber experience.

station congestion and so is dependent on the network policy management system to form a rounded view of congestion issues, what the subscriber is consuming versus what they’re paying, or might pay when confronted with a discounted offer. On the negative side, it’s pretty clear that operators will leave money on the table or even churn subscribers if they simply implement network policies without looking at subscriber value. On the positive side, they have the opportunity to build an enhanced subscriber experience if OCS and policy management work together. This blending of network policies, subscriber policies and spend management is what we’d term convergent policy management. It’s not that policy and OCS should be a single application, but that they should work in concert to enable better price stratification, customer segmentation and service personalisation. New OCS and policy-based services For a while, the uptake in 3G services was driven by ‘unlimited’ tariffs that assured subscribers they would pay only one price, no matter how much data they used. With the explosion in mobile data traffic, operators now need to look at offering lower priced plans to low usage customers who may have been over-paying. High usage customers, who have previously been consuming huge chunks of bandwidth for a flat price, now have the opportunity to pay more for increased bandwidth or quality of service. There’s no doubt, too, that we’re moving away from fixed, monthly billing cycles. Subscribers want to see their spend on a real-time basis, and operators want to launch interactive services that require real-time credit authorisation. There’s been some progress here as operators allow subscribers to pick their own billing date, and some are offering data packages that provide a specific amount of bandwidth for a fixed period of time, such as a day or a week. All of which opens up new services based on both OCS and policy. Examples here include basing the quality of service on a subscriber’s monthly spend, allowing subscribers to set their own throttling preferences based on their remaining balance, or even receiving Advice of Charge alerts based on the quality of video they are about to have streamed to their handset. The number of such services that can be created by combining policy management and OCS is almost limitless.

A converged view of rating, charging and policy So how is convergent policy management implemented? While there are 3GPP interfaces defined to enable communication between the policy enforcement layer and the OCS, there is no information sharing or communication defined between the two applications. This is accomplished by leveraging a common data set and a common rules engine for both policy and charging. This gives the policy application access to dynamic subscriber information such as balances, offers, discounts, preferences, and monetary spending limits. With the ability to share data, policy decisions can be made with a much smarter view of the subscriber, rather than being based solely on network congestion or megabyte counting. By leveraging an integrated platform for policy and charging, there are also fewer parts to provision, maintain and integrate and a single subscriber data repository that reduces duplication, eliminates consistency errors and minimises transaction processing latency. The single subscriber view that results allows operators to make better-informed business decisions and roll out new services they know will be compelling as well as profitable.

“Having a Blackberry® download email every two minutes while you’re in a lengthy meeting is pointless, yet it could result in you being cut off by the time you emerge from the boardroom.” - Dave Labuda, MATRIXX Software

Where do we go from here? Policy management can have many uses within an operator that are not limited to managing network congestion. By combining policy and OCS together, simple concepts are extended into more sophisticated segmentation, personalisation and enhanced user experiences. Data service pricing needs to become valuebased and targeted at the right price point for specific customer segments. For example, offering a corporate subscriber dynamic QoS upgrades for video calling during an important sales meeting. Awareness of who the customer is and what they typically spend on video or mobile conferencing each month makes this offer relevant and boosts margins. If operators are making policy decisions without a real-time view of the financial relationship that’s supplied through the charging system, then the value of those policy decisions is lowered. We believe it’s time to leave behind throttled bandwidth, flat rate pricing plans and inflexible financial relationships and move towards more profitable real-time interactions for both operators and their subscribers.

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

P O L I C Y

M A N A G E M E N T

Policy management drops its gatekeeper role to become an extra sales tool Ever since it first emerged around 2003, policy management has been associated with service control, writes George Malim. Carriers have used it to control data traffic on mobile broadband networks. Now, however, the technology is also being recognised as a means by which operators can generate new revenues.

Dr Alastair Hanlon, Convergys: Opportunity to maximise revenues and loyalty

Bob Hendriks, Acision: Consumers unaware of the effects of video on the network

In the last 12 months, and in particular in the second quarter this year, we’ve run a series of articles showing how policy is now being deployed to give subscribers a better view of their usage, the option to pay for packages that they want to use, and from the carrier perspective, monetisation of the previously ‘unmonetisable’. Clear rewards It is a shift that, driven from the vendors into the carriers, is now starting to gain momentum as the rewards are becoming clearly identifiable. “For many service providers up to now, data policy management has been restricted to traffic shaping. This typically treats all subscribers in the same way, sharing the available resource based on the type of traffic and related technical factors,” says David Chambers, Solution

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

Marketing Manager for Amdocs’ OSS Division. That approach is now widening into revenue generative strategy as Susie Kim Riley, Chief Marketing Officer at Tekelec, explains. (See also Talking Heads interview, page 11). “Bandwidth control is only one part of the value to service providers to solve an immediate problem,” she says. “While the savings can be dramatic, service providers’ long-term opportunity is new revenue-generating services. Service providers can use policy to create a series of tiered service offerings and add-ons to target certain customer segments.” For David Sharpley, Senior Vice President at Bridgewater Systems, the shift is now in evidence at carriers. “Strategy has shifted from simple bandwidth management to the development of more innovative services with a variety of use cases for policy management,” he says. “In reality, we see more than 50 use cases that operators are either exploring or implementing right now. The mobile broadband market is inevitably at the heart of that shift, says Mike Huffman, Senior Marketing Manager at Comverse. “The user base is different to what service providers are used to – they’re impatient and willing to do customer self-care, for example. With (the rise of) policy management, there’s a realisation that it needs to be much more than just a network operations tool.”

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S10

There has been extensive coverage over recent years in VanillaPlus of the policy management market and, with the recent news about data usage caps being instituted in the mobile broadband market, much of the focus has been on the control elements of the technology. Whether that involved limiting bandwidth consumption, parents setting usage constraints for children or enterprise employees, or simply blocking users when they ran out credit, policy has, until 2009/2010, been seen as a protective measure rather than a means by which users can receive a better, more personalised service.

Negative effect on users Humera Malik, Director of Global Marketing at Redknee echoes that view but also points out that traditional control-based approaches to policy management have had a negative affect on users’ experiences. “At the best case scenario, operators reduced abuse but lowered the overall customer experience due to the lack of notification or user options to upgrade with one-time or additional packages.”

“What service providers should do is to offer packages based on the service or application used, rather than on bandwidth allocation. Policy management tools can certainly play an important role here,” Peterfreund adds, “by being able to offer QoS management tools, the provider will be able to offer subscribers packages such as 'YouTube subscription', or 'online gaming subscription', or 'regular surfing and email subscription'.

“At the other end of the spectrum, using policy to control usage has been counterproductive to the goal of reducing costs because of the poor quality of experience, resulting in increased customer complaints,” she says.

Link value to cost Guy Hilton, Product Marketing Manager for Amdocs Revenue Management division, sees it as a case of clearly attaching value to cost in customers’ minds. “Those service providers who can combine perceived value and costeffective use of resources will be able to make the most of their network investments,” he says. “Both good capacity planning tools and realtime policy management enforcement will be essential to achieve this goal.”

The end of flat rate or ‘all-you-can-eat’ mobile data tariffs has provided an incentive for operators to act now. The imperative is to work out new models that consumers will understand and be attracted to. That’s a big job, as Bob Hendriks, Product Marketing Manager, Mobile Broadband, Acision, explains: “The mobile broadband business model has finally collapsed under the burden of unsustainable cost levels and crippling quality of service issues,” he says. “Currently, everyone from consumers to businesses receive the same service offer and quality of service levels, but the consumer is largely unaware of the effects video and data-heavy applications are having on the network and is in no way incentivised to alter their behaviour.” Enabling, not just preventing It’s important not to see policy management solely as a preventative measure, but as an enabling technology. “Policy management won’t contribute to the death of flat rate/all you can eat data, but it will help operators as the future direction of the entire BSS subsystem is affected,” says Dr Alastair Hanlon, Global Director of Telecommunications at Convergys. “It should be seen as an opportunity to maximise revenues while preserving customer loyalty.” For Inbal Ben Ami, Product Marketing Manager, Mobile Internet HUB at Comverse, the data quota is the only differentiator an operator currently has, so policy has to go way beyond simply enabling that. “It limits the operator because it limits the user experience,” she explains. “One model doesn’t fit all the segments and limits operators’ ability to charge a premium.” Moshe Peterfreund, Director of Marketing at FTS, harks back to the need to make clear, relevant offers to users. “As long as operator offerings continue to be based on the amount of gigabytes per month it will be hard to move away from these models,” he says.

A spate of new models and propositions are emerging as a consequence. Offering off-peak data at a discounted rate is an obvious simple service. Riley at Tekelec cites her experience with customer, Vodafone Hungary: “Vodafone Hungary offers an unlimited broadband service with no over-usage charges but controls the network impact by using bandwidth controls for very heavy users during peak hours.”

Guy Hilton, Amdocs : Combine perceived value and costeffective use of resources

Suzie Kim Riley, Tekelec: Addons to target customer segments

Huffman at Comverse sees that type of deployment bringing new customers and new revenues to mobile data providers. “You’re looking to shift usage that can be optional or discretional to an off-peak time so you reduce congestion. But the other thing you’re trying to do is capture those who won’t use the service at peak rate.” Making use of spare capacity Hendriks sees similar value resulting from policy management for those that want to burst bandwidth in support of specific applications. “Policy management has the ability to manage real-time service offerings such as mobile broadband turbo boost for watching data heavy content, or the ability to purchase one hour for $1 at times when the network has available capacity,” he says. Those approaches underpin the true value of policy management in the post flat-rate era. It’s not so much the gatekeeper of the network as the sales floor. “Policy is the brains of a network, especially for 3G and LTE networks that must make many more real-time decisions to maintain network performance and adapt the network to the subscriber,” confirms Riley. “It’s becoming impossible to maintain the quality of service and quality of experience subscribers expect without policy’s involvement.”

Inbal Ben Ami, Comverse: One model doesn’t fit all segments

“Providers will be able to offer packages such as a 'YouTube subscription'.” - Moshe Peterfreund, FTS

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POLICY

MANAGEMENT

EXPERT OPINION:

Operator use cases for the 3 Ps: Policy, Personalisation and Profitability The strategic importance of the mobile control plane – including subscriber, service and policy controls – has never been more apparent to operators globally as they manage the complexities of rapid growth in the number of devices accessing mobile data services and the corresponding increase in mobile data traffic. To date, operators have focused on implementing fair usage controls, driven by the extensive use of flat-rate plans, but as operators move to tiered and usage-based service plans, the role of policy control is evolving beyond fair usage to include a plethora of use cases.

The author is David Sharpley, Senior Vice President, Marketing & Product Management at Bridgewater Systems

“Policy solutions that extend to the device provide customers with a real-time view of their mobile data usage by clicking on a smartphone app.” - David Sharpley, Bridgewater Systems

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The transition from flat-rate to personalised, tiered services Network, device, and application policy provides operators with a range of controls to implement tiered service plans that let subscribers choose the combination of usage and price that best meets their needs. In a tiered services model, lower-cost plans can be used to target casual users, middle-of-the-road plans can be crafted to meet the needs of the average user, and premium plans can be used to target tech-savvy consumers and business users. In order to successfully introduce tiered services, operators need to give subscribers a way to monitor their mobile data usage in real time. Policy solutions that extend to the device, such as Bridgewater’s myPolicy™ solution, provide enterprise and consumer customers with a realtime view of their mobile data usage by clicking on an application on their smartphone. It also enables operators to provide real-time, personalised offers such as: • A temporary service upgrade or new service tier; • A free ‘day pass’ for a new service; • A bandwidth boost for a subscriber who wants to engage in mobile gaming in the evening but not during the day; • Unlimited video downloads during off-peak hours; and • Location-based social networking services. Pre-purchase data services Pre-paid services are a popular way of increasing

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

market penetration. They give subscribers the flexibility to buy and use a preset amount of data with the convenience of paying for these services via credit card, voucher or promotional offers. However, with the recent growth in mobile data traffic, the pre-paid billing servers used by mobile operators have become increasingly complex. Pre-purchase plans make life simpler for the customer as well as the operator, who no longer has to deal with the cost and complexity of deploying a pre-paid billing server. In this scenario, policy control enables usage to be metered based on time or volume which must be paid for in advance by the consumer. Machine-to-machine services Machine-to-machine (M2M) services are experiencing a period of rapid growth, with an estimated 60 billion machines serving a global audience of six billion people. Applications in areas such as healthcare, public safety, and energy are fuelling the drive towards more ubiquitous M2M services. The control plane function in 3G and 4G networks plays a central role in the delivery of these services by managing network resources, devices, and applications. Public safety services, for example, can benefit from automated communication between traffic cameras, health monitors, and mobile communication devices. The network can prioritise emergency service data, devices, and workers on the network, distribute alerts to emergency workers and even re-route vehicle traffic. These use cases demonstrate how policy control as an integral part of the mobile control plane has evolved, with fair usage controls just one of many ways that operators are implementing smarter network, device and application controls to deliver new services.

P O L I C Y

M A N A G E M E N T

Policy Management 2.0: Welcoming the peasants to ‘Telecom Versailles’ There's a bit of a French Revolution going on in wireless today. Thousands of peasants – pitchforks and iPads in hand – are storming the walled gardens of Telecom Versailles, demanding entry. They've already seized the Bastille with their fearsome smartphones. Now Louis XVI and the telecom aristocracy fear that their regime may be cut terribly short. Blame it all on that rabble rouser Steve Robespierre Jobs who's preaching nonsense about ‘net neutrality’. All is not lost, however. Marie Antoinette has come up with an ingenious plan called "Let Them Eat Cake with Blackberries." The idea is to let the peasants come into Versailles but charge them an admission fee for smelling the flowers . . . Luckily, the one thing the rabble didn't take away from us was our land. The communications networks we still own remain extremely valuable property. They enable everything: voice, the internet, the wireless web – even cloud computing. And one more reassuring thing: no matter how

▲

Citizens, the wireless rebellion is over and the rabble are now in control. Though we may wish otherwise, we can never go back to those idyllic days of walled garden services like voice mail and AIN. Today, even locationbased services can be widgetised by app developers outside our telecom walls.

“Policy management vendors who succeed in the next few years will … deliver more personalisation and greater choice.” - Dan Geiger, BroadHop

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P O L I C Y

M A N A G E M E N T

over-the-top and mobile the world gets, people still need to connect to the physical network and our industry is good at that.

Dan Baker, Founder of Technology Research Institute (TRI) has joined VanillaPlus's Editorial Advisory Board. www.technologyresearch.com

However, telecoms clearly need to change their mindset. They need to accept this new post-revolution reality. And they must embrace the notion of opening up their systems because they have so much to gain as the wireless broadband pie gets larger and spreads across the globe. At the CTIA show in Las Vegas, I saw evidence of this mind shift. Many of the conference sessions on content, advertising, and applications were led by non-telco people – folks from the developer/application community and Madison Avenue – even a few bankers. On the show floor, Verizon's booth was particularly telling. Gone were the big, bold logos and multi-storied exhibit booths of years past. Instead, the Verizon booth was subdued, bazaar-like, and designed to attract content and application developers. No more “shock and awe”. It was more like: "Welcome to Versailles, fellow wireless citizens."

“When people start doing enterprise-class applications across their iPads there are some real opportunities for telecoms.” - Dan Geiger, BroadHop

BroadHop is a policy management vendor who understands this new "open telecom" philosophy and fully plans to exploit the trend to add value and grow its business. And now that one of its chief rivals, Camiant, has been purchased by Tekelec, the Denverbased BroadHop can boast that it's the last remaining pure-play policy management vendor. The company earns most of its revenue from the developing telecom world: it has 65 customers today, including Vodafone companies in Greece and South Africa, Saudi Telecom, Reliance in India, and Maxis in Malaysia. BroadHop has coined the term "Policy Management 2.0" as a way of contrasting its new, more open style of policy management with traditional PM solutions. Here, Dan Baker, Senior Analyst with Technology Research Institute (TRI) and a member of VanillaPlus’s Editorial Advisory Board, talks to BroadHop’s Senior Director of Marketing, Dan Geiger. TRI: Can you explain the differences between policy management as we know it today, and how it's evolving as it moves to Policy Management 2.0.

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However, all of us need to change. We need to become more oriented around the applications that drive telecom services and revenue. The policy management vendors who succeed in the next few years will leverage policy and deliver more personalisation and greater choice. They will also help the operator and subscriber interact with each other in real-time. TRI: How about an example of the real-time interaction you mentioned? Geiger: Here's an interesting one. Say you're Fred, a premium wireless customer paying top dollar to ensure that your broadband service will always have a high throughput. Now suppose it's the middle of the work day and you – as Fred's wireless operator – experience a congested network in Fred's cell. And after querying the network for Fred's location, you also know that he is probably in his office and has access to wireline voice and data. With that information, we can now send Fred's iPhone a message saying, "Hope you're having a great day, Fred. The cell site serving you right now is congested – and, by the way, you're still getting the quality of service (QoS) you've paid for. However, if you access your data and voice from a wireline phone during the next hour, we can free up some bandwidth to serve other wireless customers. In return for doing us this favour, we'll send you 50 points you can use to purchase a music download or an app in our catalogue." OK, what's happening here? Well, two or three things. First, the operator is essentially bartering with Fred. Now, not all subscribers would want this sort of relationship with their service provider, but Fred has opted in because he's a nice guy who likes to help fellow wireless users – plus he likes the idea of earning some reward points. Notice too, that you, as the operator also benefit. You get to serve your customers better. And by replicating a policy-driven bartering exchange like this, you might be able to avoid the cost of buying a new router serving that congested cell. TRI: What you've described is certainly an interesting and sophisticated policy-based service, but I'm not sure it represents a

▲

Dan Geiger: To me, policy

management today is a very network-centric activity. It's all about managing bandwidth and making do with limited resources. And for that reason it's a heavy infrastructure play as well. In fact, that's precisely how BroadHop and the other policy players have delivered value for years.

paradigm shift from the policy management we have today. Geiger: You're right. The example I gave is not necessarily ground-breaking by itself. But what if an operator had hundreds or thousands of these little services working for them? It would have a big collective impact on network efficiency and customer satisfaction. And that, frankly, is the big challenge: enabling those thousands of services. To do that you need two things: a highly scalable policy platform and a means of abstracting away policy management complexity so your average Java developer can create these services on her own. And that's basically what BroadHop has done in the latest edition of our software. We've built a framework upon which iPhone, Android, and other smartphone apps get written. And that solution sits on the network and interacts with the subscriber database, charging, B/OSS (business / operations support systems), and the rest. Most policy coding and scripting today is done by telecom experts who are trained by vendors like us. And it takes 6 or 8 weeks to design a service that way because each application's interface has to be coded on its own. That's why we feel strongly: wireless operators need to move to a broader set of developers, such as SIs (system integrators), third party developers, and even business people at the carriers. The solution also needs to be more graphical. You need to clearly see the parameters to be set: time of day, quotas, parental cost controls, bandwidth limits, and so forth. So we've put that all together in blueprints that allow you to assemble components and abstract the interface to policy. With this new style of policy platform, we think apps will eventually be developed in days not weeks. Plus, you've opened the development door to thousands of Java developers who couldn’t care less about becoming policy experts. TRI: Tell me how telecoms will actually bundle these policy-enabled services. Geiger: Dan, you can see Policy 2.0's future every day on the web. You see it on Facebook, Bloglines, and a thousand other websites that allow the user to drop widgets onto his personal page.

The process begins by assembling pre-packaged modules – a WebEx module, a Skype module, an entertainment module. A Webex online meeting service, for example, would contain policy to recognise WebEx traffic and then prioritises it for a particular user. And the idea is to mash up all these components into a lifestyle or businessstyle offering. Sooner or later customers themselves will want to manipulate their suite of services on the fly. Now all of this is stuff is tough to achieve, but at some point these features will become mainstream. TRI: Finally, I'm curious about where you see the market headed. My sense is that most of the policy-enabled services you're talking about are still on the drawing boards. Geiger: I would agree. For instance, even though the Apple iPod has thousands of apps, relatively few of them are policyenabled – they are pure over-the-top. Some of the people I talk to here in Silicon Valley are enjoying playing Scrabble™ on the iPad. Well that's great, but whether response time is 30 milliseconds or 3 seconds really doesn't matter for that application. Where policy comes into play is in missioncritical apps. When people start doing enterprise-class applications across their iPads® and BlackBerry®s there are some real opportunities there for telecoms because those apps require a stringent QoS. It's things like making sure your SalesForce.com data is moved securely and quickly. We also feel policy will be key to managing cloud computing for enterprises. When you think about it, all the interesting places telecoms want to go with their businesses have a policy component to them.

“Wireless operators need to move to a broader set of developers.” - Dan Geiger, BroadHop

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

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P O L I C Y

M A N A G E M E N T

EXPERT OPINION:

Connectivity's commodity crisis Being ‘connected’ has always been important to humans. The need for contact with others exemplifies the basic social nature of the species and often has a direct impact on our livelihood. In the 21st century, says John Aalbers, being connected typically means having reliable high-speed internet access, a privilege that many take for granted. In today’s market, national broadband plans have started to treat universal connectedness as a commodity. The basic problem that then arises is that consumers rarely respect that commodities are finite, failing to acknowledge that they can run out. Thus, broadband is easily abused. The common reasoning behind this is the distinct lack of differentiation between current broadband offerings, which makes consumers believe that services should compete only on price. The author, John Aalbers, is the CEO of Volubill.

Solving the differentiation problem can be achieved with policy control and charging technologies, and doing so opens doors for providers, protects a natural resource, and ensures a growing social and economic necessity for the future. The need to be connected Staying connected today is far simpler than it was centuries ago. For many, the internet is the best way to connect, and it fulfills the most important reasons for connectedness: education, democracy, and well-being.

there are only so many radio frequencies available for mobile communication. Historically, providers and consumers of broadband have failed to acknowledge these limitations. All-you-can-eat data and voice plans caused bandwidth consumption to spike and pushed provisioning costs higher. This resulted in a drop in revenue ceilings as providers entered a price war of subscriber number attrition. Profits shrunk, service outages became commonplace and both providers and subscribers were losing. Another option In the case of broadband connectivity, many Latin American operators are currently well-positioned to avoid the trap of broadband commoditisation. Unlimited plans are not the norm there because operators have been able to provide their subscribers with truly personalised experiences that their American and European counterparts have yet to achieve. The result is a subscriber base that does not expect to get unlimited quantities of a resource, and providers that aren’t in danger of only being able to compete on price.

And certainly, the internet can do great things. The Pew Research Center’s Internet and the American Life project surveyed US families about internet use in education: 94% of teens who have internet access said that they used it for school research, and 95% of those teens’ parents said learning to use the internet is essential or important for today’s children.

“Service providers have given consumers no reason to think that broadband should compete on anything except price.” - John Aalbers, Volubill

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In June 2009, Iranian citizens voiced their protest at the country’s allegedly corrupt June 12, 2009 presidential election via Twitter. At the peak of the controversy, 221,744 Tweets including the term ‘IranElection’ were sent during a single hour. More than 2.2 million blog posts were published in 24 hours. More than 3,000 videos were posted to YouTube in one day. The limits to broadband With today’s cutting edge technologies, many people take being connected for granted. However, users must remember that broadband is a finite resource. There are limits to how much cable can be made for fixed line networks, and

VANILLAPLUS SUPPLEMENT AUGUST/SEPTEMBER 2010

US and European broadband providers need to follow suit, and even go a step further to add transparency, personalisation, quality guarantees and price incentives to the customer experience. By tailoring services and offerings to meet the needs of specific customers, providers free up unused resources and consumers only pay for what they need. This avoids waste, prevents abuse, offers new value for customers, and ensures there is adequate connectivity capability left for others. And (finally) it allows for providers to actually differentiate their services. Connectivity’s finite nature makes providing universal access a difficult balancing act. If broadband providers utilise policy control and data management tools they can achieve the differentiation needed to avoid the negative spiral towards commoditisation. They also get happier, more loyal customers who don’t pay for services they don’t need and enjoy a better experience. Everybody wins.

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