Vanillaplus February 2010 by Prestige Media

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PREPAID LOYALTY Building loyalty among your fickle prepaid users

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SERVICE

SOFTWARE AS A SERVICE Telcos get it sussed on SaaS

Ericsson and LHS launch unified charging and billing APP STORES & PARTNERSHIPS - Handling 3rd party content explosion! - MNOs must market apps better SERVICE ROLL-OUT Survey shows operators need urgent service planning overhaul

LTE NETWORKS The challenge of policy management & charging

• Find out why Rui’s smiling in our 16-page MWC 2010 Supplement Attached • Mergers & Acquisitions News Inside • Love ‘em and leave ‘em Software?

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PROVIDERS

TALKING HEADS

BUSINESS INTELLIGENCE Don’t just sit on your Golden Asset!

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TALKING HEADS

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4 EDITOR’S COMMENT It’s about to get hot in the BSS / OSS kitchen!

13 TALKING HEADS At Mobile World Congress LHS and Ericsson are launching a new unified charging & billing suite. We talk to them about this and their own integration. 16 EXPERT OPINION: SAAS Doug Zone describes how communication service providers are enabling Software as a Service today. 18 SOFTWARE AS A SERVICE Just how big a revenue opportunity is SaaS for telcos? Steve Rogerson investigates.

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20 EXPERT OPINION: LOAD CONTROL Sukki Sandhar shows that policy and charging control is key to managing networks. 21 NEW WEB PORTAL VanillaPlus unveils its new web site, linking you to a growing range of services.

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22 REVENUE MANAGEMENT Are you spilling revenue, or avoiding it altogether? K Nanda Kumar is interested to know. 26 EXPERT OPINION: APP STORES Mark Johnson argues that the key to success is effective upstream partner management.

LOYALTY MANAGEMENT

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34 SUBSCRIBER DATA MANAGEMENT Mark Dye reckons SDM is finally helping operators to sweat their assets. 37 UPCOMING EVENTS What’s on and where to find it.

12 CONTRACT HOT LIST Major contracts awarded globally.

SOFTWARE AS A SERVICE EXPERT OPINION: LOAD CONTROL

5 NEWS Company, Product, Contract and People News.

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EXPERT OPINION: SDM

28 CONTENT PARTNERSHIPS Alun Lewis wonders who is managing the app stores; Apple, Nokia, or CSPs? 30 EXPERT OPINION: INTERACTION Operators can achieve profitable growth by cutting complexity, says Andreas Freund. 32 EXPERT OPINION: SDM Subscriber Data Management: In the LTE Age it’s nothing less than a ‘must have’, argues Ottavio Carparelli.

38 MARCH 3 WEBINAR PREVIEW LHS will host the next VanillaPlus webinar on how to integrate billing and business intelligence. 39 EXPERT OPINION: BUSINESS MODELS David Sharpley points to several new business models amid the current chaos. 40 EVENT PREVIEWS Two pages packed with details of forthcoming events. 42 EXPERT OPINION: POLICY & CHARGING Joe Hogan assesses the challenges of integrating policy control and charging in LTE networks. 44 EXPERT OPINION: LOYALTY How can carriers increase customer loyalty? Thomas Thekkethala can tell you. 46 LOYALTY MANAGEMENT George Malim learns how CSPs build loyalty among their fickle prepaid users. 48 MARCH 24 WEBINAR PREVIEW eGain plays host at this VanillaPlus webinar on web self-service challenges and benefits. 50 BILLING WEBINAR REVIEW Hear how self-service billing can turn business relationships upside down. 52 LTE VIDEO PREVIEW David Churchill of Agilent goes on camera to explain what your CEM vendor should offer you today. 54 CLOCKING OFF! George Malim mounts a rebellion at the idea of paying tax for better broadband PLUS + MWC SUPPLEMENT Don’t miss our Special Barcelona Supplement – wrapped with this issue.

LHS, part of the Ericsson Group (NASDAQ:ERIC), is a leading independent software vendor (ISV) of billing and customer care systems in the telecom industry. LHS Business Support Systems offer full convergence on various levels, supporting the complete range of business models both across the mix of fixed and mobile services, as well as prepaid and postpaid services. LHS’ headquarters are located in Frankfurt, Germany, with main offices in Brazil, France, Malaysia, and the UAE. LHS Aktiengesellschaft as the Group’s Holding company is a public company listed on the Frankfurt Stock Exchange (LHS400). For more information go to: www.lhsgroup.com EDITOR & PUBLISHER Jeremy Cowan Tel: +44 (0) 1420 588638 editorial@vanillaplus.com DIGITAL EDITOR Nathalie Bisnar Tel: +44 (0) 1732 808690 nathalie@vanillaplus.com BUSINESS DEVELOPMENT DIRECTOR Cherisse Draper Tel: +44 (0) 1634 243869 cherisse@vanillaplus.com

DIGITAL SALES MANAGER Janna Willick janna@vanillaplus.com

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

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VanillaPlus is distributed free to selected named individuals in Europe 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 by emailing your postal address and details to <subs@vanillaplus.com> Mark your email "Subscribe" in the Subject line. Subscriptions for 6 issues cost £99.00 worldwide (or US$195/EUR155) including post and packing. VanillaPlus magazine is published 6 times per year.

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VANILLAPLUS FEBRUARY 2010

T Editorial Advisors

It’s about to get very hot in the BSS / OSS kitchen! OK, pay attention at the back! We’ve got a lot to get through. Unless you’ve been teleported in from another planet you’ll know that this is where the mobile communications biz gets serious Jeremy Cowan, (oh, and sometimes not so serious). Barcelona offers everyone a editor, VanillaPlus chance to show how they’re progressing, and after a year like the last one, we’re all in need of some good news. Inside this issue you will find plenty to cheer: there’s exclusive news of a company that, while others flounder, just keeps on growing ... profitably. Turn to page S4 in our Special MWC Supplement (attached to this issue) for an interview with the fascinating Rui Paiva, CEO of WeDo technologies. He is currently negotiating to buy not one but two complementary software developers, but of equal interest is his highly unusual business philosophy. And don’t knock it till you’ve tried it.

VanillaPlus has also been given an exclusive interview (pages 13-15 in this magazine) with two senior execs at LHS and its parent group, Ericsson. Remember, you read it here first about the new Ericsson Charging & Billing Suite which will be unveiled at Barcelona’s Fira. HP have also given us exceptional access to their senior team, and on pages S10-S11 of the supplement we explain how HP has radically overhauled its entire Comms division. While the financial markets have been in turmoil it seems that many in business and operations support systems (BSS / OSS) have been drastically re-thinking their product and service offerings, and re-shaping their whole organisation. The urgency of this is confirmed by the results of a new survey by Analysys Mason for Amdocs (page 7). Tier 1 & 2 wireline, mobile and cable operators worldwide are losing business to comms service providers who can launch new services quickly in response to evolving market demands. Planned changes take too long, and ad hoc changes are disruptive. There’s no need to beat ourselves up! But, before we throw ourselves on our swords at the scale of the challenges facing us, just take a moment to recall how far this industry has come in the last 10 years. As Alun Lewis writes in Open All Hours (pages 28-29), this is a business “whose concept of service used to revolve around renting a piece of copper to someone by the mile or the minute”. Now we’re ensuring that there’s no revenue spillage (pages 22-24) in international services involving multiple partners, for subscribers about whom we know an increasing amount and with whom we are starting to communicate regularly (pages 30-31). Not bad for something that 20 years ago was called a carphone!

VANILLAPLUS FEBRUARY 2010

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John Aalbers, chief executive, Volubill

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

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

Chris Yeadon, director of Product Marketing, LHS

Doug Zone, chief technology officer, MetraTech

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Messaging software and services firm Critical Path buys social media’s ShoZu Privately-owned Critical Path, Inc, a messaging software and services provider, has purchased the business and assets of ShoZu Ltd. The acquisition of ShoZu's mobile social media services is said to Mark Palomba, significantly advance Critical Path: Acquisition of Critical Path's delivery ShoZu propels of consumer-focused us forward mobile and social networking systems across all mobile platforms. Critical Path was founded in 1997 and became a private company in 2008, backed by its main shareholders, General Atlantic Partners and Cheung Kong Group. "The acquisition of ShoZu propels us forward in enriching our mobile and

NEWS IN BRIEF

Companies merge in China to create major OSS player

social networking solutions for our customers around the world,” said Critical Path's CEO, Mark Palomba. “Now, we can offer an unparalleled experience for people to connect and stay current on the most popular social networks using virtually any device, as well as extend their use of personal media and messaging activities.”

Two of China's telecom software providers and systems integrators, AsiaInfo Holdings and Linkage Technologies International Holdings Ltd, are to merge to create a company with more than 8,000 staff. Linkage shareholders will receive US$60 million in cash and approximately 26.8 million AsiaInfo shares upon closing of the transaction. Steve Zhang, AsiaInfo's President and CEO, will become President and CEO of AsiaInfo-Linkage.

Critical Path provides white-labelled messaging and consumer applications platforms to service providers, focused primarily on mass market devices. ShoZu adds award-winning mobile applications for sharing media and personal experiences across the most popular social networks, with native support for the leading smartphone platforms. The combined capabilities reportedly provide consumers with a complete social networking and personal communications capability, however advanced the mobile device.

With combined annual revenues of over US$400 million, this will make the AsiaInfo-Linkage among the world’s largest developers of operations support and business support systems (OSS and BSS). This compares, for example, with Amdocs whose annual turnover in fiscal 2009 reached $2.86 billion achieved with a staff of 17,000. Centre of Excellence opened in France by IBM and Comverse

Kumaran forges global partnership with Accanto Kumaran Systems has announced a global partnership with Accanto Systems (formerly Sunrise Telecom Protocol Products Group), a customer service assurance systems provider for converged networks. Kumaran now offers service assurance systems for video, voice, data and wireless applications. This new suite of products, including advanced multi-protocol analysers and network monitoring systems which support mobile and Voice over IP applications, will be marketed by Kumaran worldwide. “Although we evaluated multiple tools, it was clear that the Accanto suite provided the broadest offering as well as a business focus that aligns with our vision to help communication service

providers in their network, service and customer transformation drive,” said Mohan Kumar Subramanyam, President and CEO at Kumaran Systems. Service assurance spending to support next-generation services is needed to measure customer quality of experience. This is in part driven by the commoditisation of telecoms services – primarily voice – and the threat posed by new players in the telecoms economy offering premium services over a broadband network. With falling average revenues per user and an uncertain economic landscape, service providers are interested in transforming the way they interact, consume and enable networks, handhelds, application, services and content.

LIVE WEBINAR LIVE on Wednesday 3 March, 14:00 GMT Integrated billing and BI: Enabling the next generation communications experience

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Comverse and IBM have launched a joint Centre of Excellence (CoE) in France to help global telecom operators speed time to market for new services, boost subscriber acquisition, and reduce both churn and overall network operating costs. Established within the IBM telecom solutions lab in France, the CoE uses software components from IBM and Comverse to create a business and operational support system and service delivery environment that provides a dynamic setting. This joint approach allows telecom clients to test proofs of concept with new capabilities in simulated environments, enhance innovation and reduce implementation time and risk. The Service Provider Delivery Environment (SPDE) framework, which is based on a service-oriented architecture (SOA) approach, combines with IBM server and storage hardware, such as Power Systems and BladeCenter, to provide the dynamic infrastructure for the CoE.

VANILLAPLUS FEBRUARY 2010

NEWS IN BRIEF

ConceptWave wins HP Partner Award again ConceptWave Software, a Canada-based provider of product catalogue, service catalogue, and order management systems, has been awarded its second consecutive Partner of the Year award by HP. The award recognises ConceptWave’s commitment to expanding HP’s NGOSS (next generation operations support systems) Service Fulfilment capabilities worldwide. HP uses ConceptWave’s technology and applications within its NGOSS domains of product, service and order lifecycle management. “This award is one in a series of events proving that order management has become a critical investment for CSPs,” said Arindam Banerjee, Yankee Group Vice President. “HP’s success in deploying ConceptWave’s solution demonstrates that it plays a pivotal role in enabling the transition from bundled to highly personalised services, allowing CSPS to provide exemplary customer service at every touchpoint.”

Arantech unveils openplatform™ CEM solution The Dublin-based developer of customer experience management (CEM) software solutions, Arantech will be exhibiting at Barcelona's Mobile World Congress 2010 (Enterprise Ireland, Stand IF17), using the event to unveil the latest addition to its CEM portfolio - openplatform™. This is a suite of high-performance applications and interfaces which fully unlock the value of customer experience data. Built on Arantech’s touchpoint™ CEM solution, openplatform provides users with standards-based access to core experience metrics, closed-loop automated issue resolution and event streaming, as well as in-depth data mining of customer experience. This, says Arantech, will provide telecom operators with the customer experience data they need to resist churn and explore new revenue streams.

VANILLAPLUS FEBRUARY 2010

HP offers SNAP response to help telcos improve customer experience with real-time policy control HP has introduced a range of new software systems to enable communications service providers (CSPs) to generate real-time customer insights leading to a better user experience, greater Nigel Upton, customer loyalty HP: Personalise and higher revenues and monetise (Also see interview new services with HP’s Erwan Menard on pages 52-53). The new solutions, led by HP Subscriber, Network and Application Policy (HP SNAP), significantly expand the company’s business support system (BSS) offerings. The portfolio is also being re-named HP Real-Time BSS. HP SNAP provides wireless, wired and cable companies with real-time policy management to control network bandwidth, charging and customer usage. By offering more precise control of network resources, HP SNAP helps service providers to optimise investment in existing and next-generation networks, including LTE (long-term evolution to 4th Generation). Service providers can apply usage policies in areas such as parental control, service access, network congestion and tiered charging. For example, if a customer watching a sports event on his smartphone is about to exceed his data usage cap, HP SNAP can dynamically link the customer’s account information with the provider’s network resources and application controls to produce an

attractive upgrade and payment option – in mid-session – avoiding an unpleasant cut-off. One reference customer is Hubei Telecom, part of China Telecom. Liu Yuelian, IT director, Hubei Telecom said: “HP helped us build our online charging system, and today, with realtime capabilities, we can offer – and bill for – the most innovative 3G services for our 3 million prepaid customers. We expect to continue our co-operation with HP as we evaluate new technologies, like policy management, that can improve our customers’ mobile experience.” “Service providers can personalise – and monetise – new services with the HP Real-Time BSS portfolio,” said Nigel UpTon, director, Communications and Media Solutions, HP. “They also can reduce operational cost and complexity because all the HP Real-Time BSS solutions use a common foundation.” In two other BSS solution groups, HP has added functionality to improve real-time decision making with more detailed customer information. HP Investigation includes HP Data Retention and Guardian Online (HP DRAGON), which has been enhanced to help service providers respond to requests from law enforcement to combat terrorism and other crimes. HP Revenue Intelligence features HP CentralView systems that transform large volumes of customer data into actionable business insights using near-real-time monitoring and analysis. Advances have focused on fraud risk management, and revenue leakage control.

Live Webinar: Wednesday 24 March, 14:00 GMT Web Self-Service: The Challenges and Benefits of getting it right

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NEWS IN BRIEF

Betfair claims world’s first betting app for Internet-connected TVs

T-Mobile USA adds Android direct billing, says web forum

Industry analysts Futuresource Consulting forecast that by the end of 2010 there will be 15 million connected TVs in Europe. “TVs are the centre of home entertainment and live sport on TV drives our business. The way people interact with their televisions is changing. Our investment in this exciting new platform ensures that Betfair is an integral part of the future of Internet-connected TV,” says Simon Miller, CEO, Betfair TV Ltd.

The way people interact with their televisions is changing, says Betfair

Betfair, which is said to be the world’s largest betting community, has launched the first betting application for TVs running the Yahoo!® TV Widget Engine. Betfair saw the importance of this emerging interactive platform, and has created a specialist interactive TV team to lead this innovation.

“Yahoo! is the trusted partner for publishers who want to take advantage of our global distribution channels and advancements in building a worldwide developer ecosystem for publishing and distributing new and innovative TV Widgets,” said Arlo Rose, Senior Director of Product Management and Design, Yahoo! Connected TV. “In those countries that allow it, the Betfair TV Widget provides sports enthusiasts with an online entertainment experience to enhance their sports television watching.”

Major shift needed in next gen network planning and rollout, survey shows According to a global survey conducted by analysts Analysys Mason on behalf of Amdocs, new approaches to network operational planning and execution are needed. This is due to a technology and process gap between the uptake for next generation services, and the networks’ ability to deliver and respond efficiently. The survey was conducted among Tier 1 and 2 wireline, mobile and cable operators worldwide. It examined network planners’ concerns as they attempt to adjust plans to accommodate rapid changes in service creation and deployment. It concluded that: • The No. 1 network planning challenge is ‘managing change’: Network planners must respond to changes in budget allocations, assumptions of uptake and usage of new services, equipment specifications and technical or operational problems during the rollout process. Planned changes are taking too long and ad hoc changes are disruptive to service rollout. • Time to market: Respondents estimate it takes 6-12 months to launch a simple

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service such as VoIP, and more than 12 months for complex services such as IPTV. Nearly all interviewees said that if a service requires more than minor network capacity augmentation, it takes more than a year to plan and launch. Many comms service providers (CSPs) are threatened by competitors who can respond more quickly. • Marketing and network planning organisations are siloed: 80% of respondents would prefer to plan for new services using marketing forecast data (topdown view) to set the baseline, and network capacity consumption trends data (bottomup view) to confirm marketing’s assumptions, plans, forecasts and needs. • Time-lined, consolidated views of network usage trends needed: Almost 70% stated that stove-pipe solutions and legacy systems can’t deliver visibility of network usage over specific time periods. With no visibility of past, current and future usage trends, service providers are unable to effectively plan, manage and deliver network capacity in real time.

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According to announcements on its support forum web pages, T-Mobile USA is to roll out direct account billing for mobile commerce carried out via Android-enabled smartphones. A report on www.AndroidAuthority.com says that the roll-out of the over-the-air update was expected to be completed for users of devices such as the G1, CLIQ and MyTouch 3G by the end of December. For now, however, direct carrier billing will be restricted to purchases in US dollars. The operating system upgrade happened silently, and users have not been notified of the new capability. They can attempt a purchase to see if it has been installed.

Webroot joins Europe’s first SaaS and cloud services community UK-based Webroot, a security provider for the consumer, enterprise and SME markets, has become a founding member of EuroCloud, Europe’s first ever SaaS and cloud services business community. EuroCloud is led by Pierre-José Billotte, President and Founder of the French ASP Forum. The community gathers together leading SaaS vendors, enablers, integrators and industry experts across Europe to share best practices and expand their businesses across the continent. To date, it has created local communities in Denmark, Finland, Sweden, Germany, UK, Ireland, Belgium, The Netherlands, Luxembourg, France, Spain, Portugal, Italy, Ukraine and Turkey.

VANILLAPLUS FEBRUARY 2010

http://www.comptel.com/events/MWC2010

Take Charge of Your Services...

Policy Control & Charging

Mobile World Congress Barcelona, Spain, 15-18 February, Booth #1C06

NEWS IN BRIEF

Bulgaria’s Mobiltel deploys Amdocs CES for customer relationship management Amdocs has deployed its CES customer management products at Mobiltel (M-Tel), the largest mobile service provider in Bulgaria. More than 1,000 users across M-Tel’s contact Alexander centres and retail shops Kuchar, M-Tel: can now reportedly More compelling handle customer and consistent interactions more service efficiently, better execute marketing initiatives, and offer improved customer service. The deployment is part of a larger project encompassing integrated billing, ordering and customer management systems from Amdocs. Amdocs also worked as prime integrator to deliver SAS’s campaign management software and provides ongoing product support and maintenance. Alexander Kuchar, CTO at M-Tel, said: “We’re now able to offer

Tata Teleservices opts for Volubill’s real-time charging

our customers a more compelling and consistent service experience, regardless as to whether they call our contact centres or visit one of our stores.” Amdocs Smart Agent Desktop and Amdocs Support offer better control over the service process, from initial customer contact to resolution. The products are built on Amdocs’ Smart Client Framework which aims to enhance performance for high volume contact centres, helping to reduce the handling time of customer service requests and cut operational costs. M-Tel will now be able to plan and design marketing initiatives and promotions targeted at specific customer segments, and then execute them over multiple channels in order to drive sales. Servicing over 5.2 million clients, M-Tel is a wholly owned subsidiary of the mobilkom austria group, and joins other subsidiaries which have deployed Amdocs solutions in Austria, Liechtenstein, Slovenia, Serbia and Macedonia.

Contact centre quality monitoring software supplied by Verint to Bouygues Telecom in France New York-based, Verint® Systems, Inc has announced that France’s Bouygues Telecom is implementing the Impact 360® Quality Monitoring system from Verint® Witness Actionable Solutions®. Bouygues Telecom is deploying the software across 2,000 agent seats in its six customer relations centres. Implementing Impact 360 Quality Monitoring is part of Bouygues Telecom's ongoing programme to deliver the highest standard of service, regardless of the point of contact for the customer. The company operates its own customer contact centres, supports the European Foundation for Quality Management, and is committed to ensuring consistent quality across its contact centres, Bouygues Telecom Club Stores and online operations. Founded in 1994, Bouygues Telecom has more than 9.7 million customers, achieved 2008 sales of over €5 billion, and employs some 8,650 staff. The organisation believes that the Verint workforce optimisation software will help deliver critical quality improvements through active performance

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Volubill, a supplier of real-time charging and policy control applications for fixed and mobile service providers, has been chosen by Tata Teleservices Limited (TTSL) to reduce revenue leakage and support more granular data charging models. CHARGE-IT’s realtime network usage recording and charging functions increase the speed of all charging practices to enhance revenue assurance for mobile services. TTSL chose Volubill’s system to maximise charging abilities for various Internet applications, including BREW, WAP and standard Internet protocols. The differentiated charging models and ability to monitor and charge for usage in real-time allow TTSL to reach new customers in smaller corners of the market. Further, increased profit margins for customised mobile Internet services are realised, and revenue leakage caused by slow charging practices is eliminated.

Telecom NZ asks NetCracker for Chorus workforce management

assessments, and more focused agent training and development. "We believe that the Impact 360 solutions will help us differentiate our services in an increasingly competitive market," commented Thierry Prat, Contact Centre IT Manager, Bouygues Telecom. "Verint Witness Actionable Solutions clearly has a distinct approach to how unified, analyticsdriven workforce optimisation technology can help deliver significant performance and quality improvements."

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NetCracker of Orlando, Florida reports that Chorus, Telecom New Zealand’s network business, will deploy its Workforce Management system to manage disparate parts of its operations, improving business process efficiencies, delivering higher levels of automation, and increasing customer satisfaction. Chorus builds and maintains the copper and fibre access network, and makes that network available to other telecom providers. Chorus is also responsible for installing and repairing phone and broadband connections. In June 2008, Telecom selected NetCracker’s OSS suite to speed the delivery of innovative services and the rapid expansion of the operator’s next-gen network.

VANILLAPLUS FEBRUARY 2010

Janna Smith returns to VanillaPlus in a new role as Digital Sales Manager Readers familiar with the team at VanillaPlus will be pleased to hear that Janna Willick (née Janna Smith) is to return to the publication. Janna Janna Willick left us 18 months ago to return to her (née Smith) native Canada where she was married in 2009. Prior to this she worked for our parent company, Prestige Media Ltd for four years, culminating in a highly successful attachment on VanillaPlus. Following the launch this month of VanillaPlus’s new web portal (www.vanillaplus.com) and the popular introduction in June 2009 of our monthly series of

Change of seats again at the top of the MMA Global CEO and President, Mike Wehrs has resigned from the Mobile Marketing Association (MMA) having led the association for the past year. Mike Wehrs has Wehrs will take on stepped down as the role of Special CEO of the MMA Advisor to the MMA Global Executive Committee until June 30, 2010 to ensure a smooth transition. Wehrs took over following the resignation of Laura Marriott in January 2009. MMA Global Chairman and CEO of Hanzo Inc, Federico Pisani Massamormile, will serve as interim CEO. Wehrs is credited among other things, with revitalising the organisation and introducing a number of important strategic efforts. Paid membership of the MMA increased last year despite the economic conditions and the trends in many other trade associations. Federico Pisani said: “Having benefited from Mike’s leadership, the MMA has transformed over the past year. Together with the Board and our members, Mike has strengthened the global association and positioned the MMA as the world's leading trade association for mobile marketing and the

VANILLAPLUS FEBRUARY 2010

Thought Leadership webinars, a new post has been created as Digital Sales Manager working across the VanillaPlus brand. We are delighted to welcome Janna back, to a new role promoting our webinars to a rapidly growing audience of communications service providers, integrators and systems vendors worldwide from her base in Canada. She will also be extending the reach of VanillaPlus’s new series of video interviews (see Agilent’s interview with our editor, coming soon at www.vanillaplus.com) For more information about these and other digital services available from VanillaPlus, you will find our contact details under the Contents on page 3.

source for best practices, guidelines and case studies which protect the consumer experience.”

MLL Telecom appoints ex-BBC director Gary Marven as COO Hybrid and wireless network builder, MLL Telecom has appointed Gary Marven as its Chief of Operations. Marven will be tasked with Gary Marven helping to grow MLL’s business and develop new business models. Eddie Minshull, CEO of MLL Telecom commented: “Gary has joined us at a very interesting time. The telecoms world ... is undergoing huge changes. Customers are demanding more capacity, especially for data services, and the industry is looking for more cost-effective ways to deliver them. Government agendas, such as network sharing, are also driving innovation in service delivery.” Marven spent 11 years with the BBC in a number of senior roles including COO of the factual and learning division, a £330 million business responsible for education, documentary, science and history and other factual programmes. More

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recently he was Programme Director for the Digital Media Initiative.

Self-Optimising Network specialist Actix names Bill McHale as CEO Actix, a company specialising in Self-Optimising Network (SON) technologies, has appointed Bill McHale as its new Chief Executive Officer. A nonBill McHale, executive director Actix's new CEO at Actix since May 2007, McHale has successfully led management teams of software companies in the United States and Europe for more than 15 years before joining Argo Global Capital, a venture capital company that deals in telecoms, wireless, and internet technologies, as a partner in January 2006. While at Argo, Bill served on the board of directors of SurfKitchen Inc, uReach Technologies Inc, PhyFlex Inc, and Sylantro Inc, as well as playing an advisory role in other Argo investments. Bill McHale said: “Our LTE and SON offerings are world class solutions that are being deployed in some of the earliest 4G network deployments. The marketplace for our products and services is dynamic and there are exciting prospects ahead for Actix.”

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VanillaPlus Hot List: February 10 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)

Amdocs Amdocs

Mobiltel, Bulgaria Claro Brazil, Brazil

Amobee Media Systems Aricent Beceem

Telefonica, worldwide Intune Networks, Ireland Sierra Wireless, USA

Blueslice Networks Bridgewater Systems Bridgewater Systems Cable & Wireless Celona

ASPIDER, Canada Bell Mobility, Canada MetroPCS, Canada AXA, UK Telstra, Australia

Comverse Comverse cVidya Networks Empirix i-conX Intec KOBIL

Cosmote, Romania Mondial Telecom, Belgium 1&1 Internet, Germany University of Applied Science, Switzerland Canar, Sudan APT, Taiwan Unnamed Bank, Switzerland

M-Tel deploys Amdocs' CES to enhance their CRM offering CES products to modernise sales, ordering and service across multiple customer touch points Global mobile ad service and campaign management platform Co-development of an optical packet switch and transport networking platform Provision of 4G chip for AirCard® W801, dual-mode 3G/4G connectivity, mobile hotspot eSDM solution selected by supplier of wholesale MVNE services to MNOs Bridgewater to support rollout of new HSPA service for consumers and enterprises Home Subscriber Server and Policy Controller for 4G LTE network Six year, £60m contract for C&W to manage AXA UK's IP telephone estate Leading operator chooses Evolve to complete OSS network inventory management migration HUB Ringback Tone Service to offer subscribers enhanced mobile music Netcentrex IP enables mobile brand, Cherry, to offer WiFi and dual cellular capability Revenue assurance product implementation for partner invoice reconcilliation Hammer product selected to teach students how to master rolling out IMS networks

NEC NetCracker Technology OpenRate Redknee Redknee Tail-f Systems Verint Volubill WeDo Technologies Wier Group PLC

NTT DoCoMo, Japan Chorus, New Zealand Weblinks, Anguilla Unnamed Operator, Asia Pac Unnamed Operator, West Africa ViaSat Inc., Sweden Boygues Telecom, France Tata Teleservices, India Cablevision, Mexico Wier Valves and Controls, UK

Key:

CES CRM eSDM IMS

Deployed

Fixed-line operator completes deployment of interconnect billing product Upgrade of Total Service Mediation and InterconnecT products completed mIDentity roll-out for e-Banking customers, to offer enhanced security and user-experience OSS provision by Netcracker for LTE network and equipment management Workforce Management product selected by Telecom New Zealand's network business Integrated interconnection billing/reconcilliation, roaming and post-paid billing system InBill product selected for the management of interconnect billing functions Turnkey Converged Billing (TCB) and Customer Care product with Airtime Reseller ConfD product to help build ViaSat's next generation satellite broadband gatewaydsets Impact 360® quality monitoring system deployment to six customer relations centres Charge-IT™ software for real-time analysis of subscriber IP-based service usage Fraud management system using Business Assurance RAID Webroot® Email Security Service for eight global locations

Customer Experience Systems Customer Relationship Management Evolved Subscriber Data Management IP Multimedia Subsystem

LTE MNO Next Gen NBN

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LIVE WEBINAR LIVE on Wednesday 3 March, 14:00 GMT Integrated billing and BI: Enabling the next generation communications experience

Live Webinar: Wednesday 24 March, 14:00 GMT Web Self-Service: The Challenges and Benefits of getting it right

VANILLAPLUS FEBRUARY 2010

STAND 1F33

www.kabira.com

Jan Wäreby, Senior Vice President and Head of Business Unit Multimedia, Ericsson Jan Wäreby has been Senior Vice President of Telefonaktiebolaget LM Ericsson and head of Business Unit Multimedia since January 2007. From 2002 to 2006 he was Corporate Executive Vice President and Head of Sales and Marketing, for Sony Ericsson Mobile Communications where he played an integral role in establishing the joint venture. Between 1981 and 2001 Mr Wäreby held various managerial positions, mainly within Ericsson’s Sales organisations in Sweden and the US, and headed the company’s mobile phone business. Born in Karlskoga, Sweden, in 1956, he joined Ericsson in 1980, as a trainee in marketing management, after graduating from Chalmers University of Technology, Sweden, with a Master of Science Degree in Electrical Engineering.

Wolfgang Kroh, Chief Executive Officer, LHS Wolfgang Kroh received a diploma in mathematics and computer sciences at the Technical University in Hannover in 1978. Thereafter he worked at Control Data GmbH, ultimately as Sales Director. In 1987 he moved to Convex Computer GmbH, becoming Managing Director Germany and Vice President, Sales EMEA. In 1997 he joined LHS GmbH to become Managing Director Germany and Senior Vice President EMEA. From 2000 to 2001 he was Managing Director Germany, Senior Vice President & General Manager EMEA at Digiquant Deutschland GmbH, in Neu-Isenburg, and subsequently became Managing Director at EMC² Deutschland GmbH. In January 2006 he returned to LHS and was named CEO in July 2006.

Ericsson and LHS launch a unified charging and billing suite

VanillaPlus: How would you summarise the challenges in the business support system (BSS) industry during 2009? Jan Wäreby: It depends on the market. In our experience, operators in emerging markets primarily need solutions for managing their growing subscriber base and voice traffic, whereas operators in mature markets need solutions for managing the growing subscriber base in mobile broadband and introducing new multimedia services and new business models.

From Ericsson’s perspective, our revenue management business was performing well, despite the tough economical situation in the world last year. In 2009 we gained real momentum from our acquisition of LHS and won several convergent charging and billing contracts during the year, leveraging our combined competence in prepaid and postpaid. LHS’ results have been strong over the past years since you were acquired by Ericsson. To what do you attribute this performance? Wolfgang Kroh: We are very pleased with the performance of our business over the last two

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From a technology perspective, the ongoing migration to converged all-IP broadband networks, combining broadband Internet, voice and video traffic, is a near-term challenge for many service providers. They are also demanding cost efficient, energy-efficient and future-proof, multi-technology solutions.

From an operational perspective, service providers are looking for solutions and support to gain flexibility, reduce their operating expenses and improve efficiency.

VANILLAPLUS FEBRUARY 2010

“At Mobile World Congress this year we will be launching our new unified charging and billing suite.” -- Jan Wäreby, Ericsson

years and during the economic crisis. In both 2008 and 2009 the Ericsson and LHS revenue management businesses have achieved good growth and we have signed a significant number of new deals. I think this can be attributed to a combination of factors. We are benefiting from the geographical distribution of our business covering a number of growth markets such as the Middle East, Africa and Asia, as well as successes in Western Europe, helping convergent communication service providers transform their charging and billing solutions. In addition, we are benefiting from the synergies in our go-to-market model, with LHS now enjoying considerable success through its Ericsson channels. We have also built LHS product competence within the Ericsson services organisation which is helping this success. I also think we are now seeing the benefits from the combined strengths of our companies coming through. We have enjoyed further success with our joint convergent charging and billing solution. What has been the most significant change to Ericsson’s revenue management business since the acquisition of LHS? JW: We have focused on leveraging our combined offering and know-how, the strength of our charging and billing solutions and also our go-to-market synergies. At Mobile World Congress, this year, we will be launching our new unified charging and billing suite. The suite is designed to provide any service provider a business support platform for their specific market requirements and provide the tools for all their charging and billing needs. The suite is built around a set of pre-integrated modules developed by Ericsson and LHS, thus providing the best technology and expertise from both the postpaid and prepaid worlds. It will also provide our customers a competitive advantage with a clear path to a fully convergent solution, no matter what their starting point is. I believe that the new Ericsson charging and billing suite will help our customers to stand out from the crowd, enabling them to offer innovative and attractively priced offerings tailored to their customers’ specific needs. We have created the new Ericsson charging and billing suite to support our customers in growing their revenues, enabling new business models and allowing for full monetisation of network and data assets.

VANILLAPLUS FEBRUARY 2010

still relatively few examples of service providers that have taken this step? WK: Absolutely. In 2009 we have sold several convergent charging and billing solutions. In addition, I can say that the majority of proposal requests received last year contained a convergence requirement. It is true that over the last few years there are only few examples of incumbent operators that have taken the step to convergent charging and billing. However, service providers have spent this time educating themselves about what convergence really means and how it can be implemented. Even if operators do not wish to directly move to full convergence many insist on seeing a clear evolutionary path, which as Jan said, is the philosophy behind our new charging and billing suite. We are increasingly seeing our customers take a step-wise approach to convergence, with different starting points and different business objectives steering the evolution. I am convinced that over the next couple of years most remaining greenfield operators will launch their businesses based on fully convergent systems but more significantly we will see incumbent operators increasingly converge their charging and billing systems. JW: As more and more service providers plan to converge their charging and billing systems we are seeing that cost reduction is an increasingly important driver. This was made very clear in a study we recently commissioned. The study was based on a survey covering a range of different operators’ businesses in markets at various levels of maturity. It concluded that charging and billing systems convergence can enable cost savings of up to 20%. Convergence is also being driven by continued consolidation within the communications industry, the rapid uptake of consumer multimedia services and the increasing emergence of multi-play offerings. Convergent systems are required to enable service providers to innovatively package, price and support these services in a way that provides real value to the subscriber. At the same time, operationally, it makes little sense to maintain multiple service specific systems. What do you expect the future business of next generation service providers to look like, and what sort of revenue management solutions will they need? JW: We believe in an all-communicating world; a world in which any person can use voice, text, images and video to access and share ideas and information whenever and wherever they want. Within a few years, we foresee communications

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So is convergent charging and billing still fundamental to Ericsson and LHS’s revenue management business, even though there are

extending beyond places and people to devices. As a result, we believe that the ICT industry can be a key enabler for a sustainable and prosperous society and to bridge the digital divide. This will have significant implications on service providers’ business models and, of course, the BSS solutions they need. WK: At the same time, I believe increasing revenue, minimising costs, increasing innovation and driving customer loyalty will always remain as the service provider’s core business drivers. There will, of course, be different flavours of these drivers depending on maturity and economic development of the market. I believe we can make three basic assumptions about the next generation of communications businesses and the BSS implications. Firstly, I think communications companies will increasingly be multi-play businesses; much less reliant on single network services. Competition and decreasing ARPU will mean that the only way a service provider can grow its business is through acquisitions or by horizontal expansion into different services such as fixed mobile convergence, possibly including IPTV and Internet services. Clearly convergent charging and billing solutions are vital to support this type of business, enabling service providers to offer subscribers a truly integrated multi-play product. But it is not just about being able to offer a single invoice or a single point for customer care. Much more important is to have a billing and customer care system that truly serves as a marketing platform that gives the subscriber the feeling of an integrated communication experience with crossservice packages and promotions that are tailored to their lifestyle of business needs. Secondly, business models will change, including the introduction of new players into the value chain. I have often heard the question asked: why do charging and billing systems need to be increasingly sophisticated when in fact offerings to subscribers are becoming simpler with a trend towards flat rate plans? The reason charging and billing systems need to be increasingly powerful is because of the complexity of some ‘behind the scenes’ business models that will need to be supported. These will include a range of content partners, each with different business terms to be supported. Although operators have been working with content providers for a number of years, the evidence suggests they still have not fully got to grips with this type of business model. Advertising services, IPTV and other B2B business models such as machine-to-machine will also present different types of challenges that need to be supported by increased BSS flexibility. Finally, I believe that the communications

experience that subscribers demand will be different. They will expect personalised experiences based around their profile. This will affect the prices they pay for the package of services they receive. Moreover, they will expect offers and promotions to be in context and relevant to them based on their personal profile, usage history but also other information such as location or even handset type. For that reason I think business intelligence combined with powerful predictive analytics, integrated into the charging and billing environment will be vital to delivering this experience, ensuring subscribers receive information about the right promotions and services at the right time and in the right location.

“BI combined with powerful predictive analytics, integrated into the charging and billing environment will be vital.” -- Wolfgang Kroh, LHS

JW: I also believe that all services will need to be monitored and to a larger extent charged in realtime. As service providers increasingly offer different types of services, subscribers will need to feel they have full control over their spending. Operators will also need to minimise credit risk by putting real-time cost control measures in place, which is particularly relevant when third party partner payments are involved. The demand for real-time is further driven by legislators that are requiring spending control for consumers, for example European Community directive for real-time data roaming spending control for all customers. Communications providers will be offering new services and will have an array of new competitors and partners, particularly from the Internet domain, being able to leverage the billing relationship they have with their customers and the data they possess within their billing and charging environments. This information will be crucial for their success in the new communications market. In today’s market environment, what do you see as being the main expectation that a service provider has of a BSS software vendor? JW: Obviously, service providers look to a vendor to cover all their business requirements and in particular to help them reduce OpEx. However, we see that service providers increasingly seek a partner that understands everything; from the consumers to the technology. A vendor, therefore, needs to be able to provide both the right solutions and help deliver them. The first part includes a clear roadmap, demonstrating how future market needs will be supported by their products but moreover to show the service providers how they can easily evolve from their current system to future releases. On the other side of the coin is the capability to facilitate the transformation they have undertaken. This is fundamental to our strategy in helping service providers to achieve a fully convergent charging and billing environment.

VanillaPlus Jargon Buster B2B = Business to Business BI = Business Intelligence BSS = Business Support System IPTV = Internet Protocol Television

VANILLAPLUS FEBRUARY 2010

S O F T W A R E

A S

S E R V I C E

EXPERT OPINION:

And now for something completely different! Software as a Service (SaaS) is widely touted as the ‘next great revolution’ in business. But exactly where the SaaS opportunities lie, who should exploit them, and how they should do so is less clear. Doug Zone argues that shoe-horning new delivery options into traditional business models won’t work, especially for telcos. And exploiting the potential of SaaS all starts with billing.

Doug Zone is chief technology officer at MetraTech Corp. A member of VanillaPlus’ editorial advisory board, he is responsible for MetraTech’s technical direction and product strategy.

For all the words written on the subject, the reality is quite simple – Software as a Service (SaaS) does not work without telecoms. Why? Because SaaS is all about empowering both businesses and individuals with the power of software, but without the user having to either administer it or invest significant capital to host it. In other words, SaaS means allowing someone else, somewhere else to provide software services.

Ideally, the SaaS vendor can establish a dedicated link to its chosen network operator – and have the same operator take responsibility for optimising the reliability in the final hop to the SaaS user itself. This may take the extreme of the operator dropping in dedicated data lines directly into the SaaS user’s site, or it may be as simple as providing an SLA for ‘shared’ connectivity such as DSL, 3G or cable.

The ‘somewhere else’ bit matters, because it does not work without connectivity and this, of course, is where the telecoms network operator comes in. The paradox is that operators almost have to deliver better connectivity than what the corporate CIO had to provide when the software was internal (or ‘on premise’ in the jargon). That’s because, while internal software can rely on the desktop to function if the network is down, SaaS has no alternative – it is almost by definition webbased.

It is clear that, as SaaS becomes more mission-critical, both enterprises and SaaS vendors will look to network operators to act as a delivery channel. In a way SaaS can be considered an extension of the ICT services – especially connectivity – that network operators now provide.

Best possible solution What this reality makes clear is the fact that telecoms is on the technical critical path for successful SaaS delivery. Taking the SaaS vendor point of view – the best possible solution is to have one network between the data centre and the final consumer. For mission critical SaaS – like enterprise services – having delivery of the software reliant on the vagaries of internet routing makes any promise of service levels problematic.

It would be a mistake for SaaS (especially “business software as a service”) providers to assume that the way content is managed currently should be a pattern to imitate. Most content now is really based around a ‘love ’em and leave ’em’ model – once it is delivered, that is the end of the game. SaaS is continuous – 24x7. Content is entertainment. SaaS is core to the operation of a business (small or large).

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An enterprise service As such, network operators must treat SaaS as an enterprise service – a part of integrated communication services. As such it must sell, negotiate, contract, take orders, deliver, settle, relate and bill SaaS as an enterprise service.

VANILLAPLUS FEBRUARY 2010

Mainline consumer business processes from field sales to the call centre to invoicing to managing payments are inappropriate. SaaS is enterprise – and to the extent that an operator is currently successful in delivering enterprise services – it will be successful in being part of the SaaS value chain. If an operator struggles with competing in enterprise services – lack of ability to customise contracts, mix and match services, negotiate terms and prices, settle with vendors, resell services – it will have as much or more trouble in SaaS. The risk of not being an agile SaaS channel is simple. As SaaS eclipses ‘on premise’ software – the cornerstone of ICT deals will cease to be voice and data connectivity – rather it will become “who can deliver the best SaaS bundle?” And the operators that show agility in enterprise services will capture the market. Relying on the ineptitude of the competition is no way out. Google, in particular, would like nothing better than watching a country’s telcos take a ‘ship of fools’ strategy to disintermediate any- and everybody. Nevertheless – successfully selling , managing and invoicing enterprise services is not enough. The SaaS model is different. • First, a high proportion SaaS vendors will almost certainly come from abroad. Moreover, they will be small payers. Acting as their reseller will require ‘arms length / simple / fair’ contracts. Failing to provide this allows the entry of aggregators. • Second, with notable exceptions – Microsoft’s SaaS model being one – there is no ‘one-stop shop’. Enterprises will not allow a telco to limit the selection of SaaS vendors they have access to. In other words, the telco must act as much as possible as a universal supplier of SaaS. To manage these smaller relationships, one must question whether a “resell” model is

Love ‘em and leave ‘em attitude to software delivery is giving way to a long-term commitment correct. We can take a page from the failures in closed garden content resale: vendors have no patience for onerous and administratively expensive contracting. They see the telco providing no real value – just acting as a toll gate – someone in the way of selling. So if not reselling – what could the model be? Why not take a page from the macro trend for telcos to see themselves as primarily Customer Service and Billing providers. With the exception of contracts with the monster SaaS providers, telcos should sell themselves to SaaS vendors first as Billing Service Providers, and second as network providers – not as resellers. Telcos know how to bill, collect, manage disputes and provide call centres. SaaS vendors will pay good money for these services – much like allowing merchant banks (via Visa and MasterCard) to take a cut for facilitating payment. This reality is tough, if the expectation is to make margins on SaaS that match those of content. But – as with content – margins are pointless without volume. If telcos cannot act as billing providers for the smaller SaaS vendors – someone else will. The day that MasterCard buys – competing or acquiring -- a large international network, all bets will be off. SaaS not only makes the need for agility in delivering enterprise services (especially sales and invoicing) more pressing. SaaS also creates critical impetus for telcos to become Billing Service Providers for service industries in general. Serious strategising and investment must be made in the human and IT-based business services and processes behind them. The default mainline processes and technologies will fail.

“If an operator struggles with competing in enterprise services … it will have as much or more trouble in SaaS.” -- Doug Zone, MetraTech

VANILLAPLUS FEBRUARY 2010

SOFTWARE

SERVICE

Sussed on SaaS Many telcos are starting to look at software as a service (SaaS) as a way to increase revenues. Steve Rogerson examines the possibilities.

Tim Marsden: HP surveyed 900 SMBs

“You need the infrastructure and bandwidth and it needs to be rock solid from a security point of view.” -- David Dewsbury, Cable & Wireless

The problem with broadband is that it has become commoditised. Though growth in this area is still rapid, the profits that telcos are making from it are flat and are in some cases declining. Telcos thus need to use this growth as a base for selling other lucrative services, and SaaS fits the bill nicely. “This is where SaaS comes in as an opportunity for telcos,” said Tim Marsden, chief technologist at Hewlett-Packard, which offers a new SaaS platform for telcos. “And the SMB (small and medium-sized business) sector is a good potential sector for this.” Marsden bases this on a survey HP carried out of 900 SMBs around the world which found that more than half of them want a SaaS offering, and nearly all of them as some sort of bundle with other services. Telcos can step in “They don’t want to buy several services from different vendors but want them all from one place,” he said. This is where telcos can step in either by providing their own services or acting as a conduit for services from smaller suppliers. The end user would only deal with the telco to buy all the SaaS offerings. The profits to be made from this are high. Results from the survey suggest that the top six SaaS offerings alone could provide a US$12.2bn annual market by 2014. Those top six are unified communications, IP contact centre, self-service interactive voice response, video surveillance, online backup and multimedia conferencing.

Tim Barker, Salesforce: No longer paying upfront for rarely used software

None of these are new and many SMBs employ some or all of them, but they buy them from different vendors often as a pay-upfront package. What telcos can do is act as the intermediary, letting companies buy all their services on a pay-as-yougo basis from one catalogue provided by the telco. And they just pay one bill for all the services.

VANILLAPLUS FEBRUARY 2010

“We see the telcos starting to pick up on this,” said Pascal Walschots, solutions sales manager for Microsoft. “It is something they want to know more about and go to market with some of the basic offerings.” Business offerings later By basic offerings, he means communications related services such as email, instant messaging and presence. “In the second stage, they will look at more business related offerings such as CRM, but that will be harder for the telcos to sell,” he said. And that could be a problem going forward. The basic offerings are communications related and close to their core infrastructure services, but when they move out of that arena they have a sales force dealing with products they are not used to and a customer base that is not comfortable buying software from its telephony provider. As David Dewsbury, Head of channel business at Cable & Wireless, said: “Increasingly, telcos are getting into SaaS products that are linked with the services and bandwidth they already provide. To run SaaS properly, you need the infrastructure and bandwidth and it needs to be

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Fayçal Boujemaa, Orange Labs: Telcos could just be network operators

The penalty for telcos not adopting software as a service (SaaS) could be high, with some predicting those who turn their backs on this potential revenue stream will be restricted to just being network operators in less than 10 years, ending their days as service providers. Yet those who embrace it fully could look to see earnings increase dramatically at a time when the profits from broadband are dropping. But those who have taken SaaS on board so far have done so only in a limited fashion, more a cautious toe in the water than a full-blooded commitment.

rock solid from a security point of view. And you must have the right quality of service.” At present, a large number of the SaaS services are run from the data centres of the SaaS providers and quality of service can thus be a problem. Accessing them via the internet can be hit and miss and so many customers would like to see them hosted directly by the telcos. “You need guaranteed connectivity,” said Doug Zone, CTO at MetraTech. “The network operator is therefore in a good position to make SaaS successful. If I am a big company using SaaS, I want a dedicated line to the telco and I want the telco to have a dedicated line to the SaaS provider or for the telco to host the SaaS service.” Moving away from communications linked services, though, could prove difficult. Telcos will need to evolve “The sales forces at most telcos do not have the experience and understanding,” said Walschots, “and the customers do not have the confidence to see telcos as the place to ask about things like CRM. They need to build more trust and give the sales staff more knowledge. This will be an evolution.”

This evolution has been helped by some of these telcos using SaaS and cloud computing-type services in their own organisations, giving them experience in how they work. One such company supplying these is Salesforce. “We have companies like O2, Orange and Sprint that have adopted cloud computing to help improve their sales on contact centres,” said Tim Barker, senior director of EMEA product for Salesforce. “They are now seeing the opportunities for bringing their own services to market.” Barker said this was also striking a chord with businesses that no longer wish to pay upfront for software that they use rarely.

Pascal Walschots, Microsoft: CRM will be harder for telcos to sell

“We are seeing the end of the era for big software companies,” he said. “The future is in cloud computing with services delivered over the internet. Telcos are already used to the billing and subscription model, but for software companies moving to pay as you go is a big shift.” However, success is not guaranteed. If the relationship between the SaaS provider and the telcos is not beneficial to both, then the SaaS providers are likely to look for other routes to market.

Doug Zone, MetraTech: You need guaranteed connectivity

“If the telcos help the SaaS providers, then fine,” said Zone. “But if they make it harder for them, then they (the SaaS providers) will find another way to do it. They are quite happy to interact with the enterprises directly.”

“It is vital for telcos ... otherwise telcos will disappear completely from the services layer within five to seven years.” -- Fayçal Boujemaa, Orange Labs

Dangers for telcos And the danger of doing this wrong or not doing it at all could be very high, according to Fayçal Boujemaa, Head of the SaaS and service composition programme at Orange Labs. “It is vital for telcos to do this,” he said, “otherwise telcos will disappear completely from the services layer within five to seven years. They will just be network operators. All the services, including core services such as communications, will be done by other players.” He said part of this would involve the telcos opening up their systems to allow third parties to create the innovative applications. “We haven’t the monopoly on intelligence,” he added. “Telcos are not sufficiently smart to imagine what can be done with the legacy services and with the new services.” The prize, though, for doing it right is high, with increased revenue both from adding value to the legacy services that will increase traffic and from selling the new services.

David Dewsbury, Cable & Wireless: You must have the right QoS

The author, Steve Rogerson, is a freelance IT and telecoms journalist.

VANILLAPLUS FEBRUARY 2010

P O L I C Y

C H A R G I N G

C O N T R O L

EXPERT OPINION:

Policy and Charging Control under Load It’s clear that Policy and Charging Control (PCC) is rapidly becoming key to controlling operators’ networks. But, as Sukki Sandhar writes, whether operators have already made their static policy decisions, or are embarking on establishing PCC, they are evaluating the same issue. “What happens when we start to push dynamic policy decisions through a service-centric PCC layer that is integrated to the enterprise and network? What are the cost, performance and the consequential reliability implications to my architecture?” Dynamic Policy During the last two years, mobile IP service users behaviour has changed, mainly due to: • The success of smartphones • The introduction of mobile broadband

Sukki Sandhar, Head of Policy Orchestration for Kabira Technologies

The sum of these factors causes a dramatic change in data usage, transforming it to a torrent and more importantly, this growth is set to continue. Overloaded access to resources threatens to cause serious quality of service (QoS) issues and is driving operators to seriously consider PCC. Operators often manage QoS problems with further investment in network infrastructure or controlling network and enterprise resources. It is in fact a combination of both these techniques that is becoming the solution of choice.

“Implementing the right policy controls and integration is critical for fueling growth and stemming unnecessary investment.”

Service layer policy control delivers the greatest impact since this layer is more informed about user state, subscription and billing. For example, service layer PCC enables operators to de-couple billing from the network, make real-time decisions monitoring and negotiate policy decisions during service delivery. Standards recommendations like 3GPP provide a reference point for defining implementations of such solutions. However, that isn’t always enough. Complicated operator environments require customisation to make solutions fit. Implementing the right policy controls and integration is critical for fueling growth and stemming unnecessary investment. Avoiding Saturation with Policy Orchestration Today, during saturation-peak periods, networks are left on their own to ‘manage’

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load – often resulting in negative user experience and customer dissatisfaction. PCC enables operators to implement business decisions on how to manage, handle and avoid saturation. Fine-grained control allows operators to deliver and guarantee value to their customers, whilst monitoring and managing their resources. For example, fair usage, quota management and parental control are all used to control the services a user has subscribed to. While PCC is a solution that addresses a host of network problems, discussions with operators reveal up to 80% of their time can be spent addressing infrastructure problems with reliability, scalability, performance and integration. Current service centric policy solutions typically include an application server, database and mediation technology, an expensive and complex way of delivering network-grade policy. Scaling such a deployment requires diverse levels of hardware, skills, software and complexity. Several operators are instead moving away from the conventional three-tiered architecture to a solution such as Kabira’s Policy Orchestration product, an all-in-memory, highly-available transaction processing architecture that delivers telco-grade reliability, scale, low latency, high volume and performance. With Policy Orchestration your solution is designed from the start to handle massive growth with the same high degree of reliability. Visit www.kabira.com to learn how dynamic service centric policy management, specifically built to manage peak load provides clear benefits for major operators.

www.vanillaplus.com Launching at Mobile World Congress 2010 - the all new VanillaPlus website News.....views.....podcasts.....white papers.....videos.....online directory.....events The leading information resource for Billing, BSS, Customer Care, OSS, Revenue & Fraud Management, Service & Network Assurance

REVENUE

MANAGEMENT

Are you ‘avoiding’ revenue? Revenue spillage happens silently and invisibly in the operations of every communications service provider. As K Nanda Kumar writes, while the focus of the industry is on stopping visible revenue leakage from mishandled transactions and improper processes, a much larger form of revenue leakage is spilling from the top of the revenue barrel. As a result, operators are in effect becoming susceptible to revenue avoidance from customers and content partners, especially in the context of value-added content services with the large number of content providers. Stopping revenue spillage is, therefore, the biggest opportunity.

The author is K Nanda Kumar, president and CEO, SunTec Business Solutions

While the focus of the industry is on stopping visible revenue leakage from mishandled transactions and improper processes, a much larger form of revenue leakage is spilling from the top of the revenue barrel. As a result, operators are in effect becoming susceptible to revenue avoidance from customers and content partners, especially in the context of value-added content services with the large number of content providers. Stopping revenue spillage is, therefore, the biggest opportunity.

VANILLAPLUS FEBRUARY 2010

Cause and cure Pricing decisions have never been more important for communication service providers (CSPs). Wrong pricing decisions could be a deterrent to growth and are bound to have adverse long-term consequences. For instance, in a cable network, extreme internet users might consume more than their fair share of the access bandwidth. These ‘abusers’ might congest a major portion of the operator's network, leading to dissatisfaction among a majority of customers.

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Unlike revenue leakage which occurs due to

flaws in the internal revenue management processes and procedures, revenue spillage is a direct consequence of an operator’s inability to tailor product pricing and loyalty programs for narrowly focused customer segments. It’s also down to their inability to manage and reconcile with multiple content providers, due to the lack of appropriate control mechanisms.

VanillaPlus Thought Leadership Webinars: Integrated Billing and Business Intelligence – Enabling the Next Generation Communications Experience

Date: Time: Venue: Speakers:

Jeremy Cowan

Wednesday 3rd March, 2010 14:00 London, 15:00 Paris, 09:00 New York, 17:00 Dubai Online – (see www.vanillaplus.com/diary for details) Veronika Olsson, Director Strategic Marketing & Research, LHS Chris Yeadon, Director Product Marketing, LHS Moderator: Jeremy Cowan, Editor, VanillaPlus

Veronika Olsson

Chris Yeadon

Register NOW for your FREE place at this Webinar on Integrated Billing & BI. Online registration is available at www.vanillaplus.com or you can call Charlie Bisnar on + 44 1732 844017 or email charlie@vanillaplus.com

A communication provider’s billing database is often described as the “crown jewels” of customer information - all details of all transactions with all customers across all their services represents a strategically important information asset. Communication providers are uniquely positioned to capitalise on this mass of data and in combination with the marketing platform that a good billing system should provide, have potential to transform the communications experience they offer their customers. But despite this, evidence shows that communications providers actually use their customer information for analysis far less than, for example, the retail industry. This webinar will provide an overview of Integrated Billing and Business Intelligence and provide answers to the following questions: 1) 2) 3) 4)

How integrated billing can support new business models driven by “Information as an Asset” How to know more about your customers and have greater impact on potential earnings and reduce churn How integrated billing and BI can streamline your business processes, enhance decision making and productivity How integrated billing and BI enables you to deliver tailored offerings to your customers

About LHS LHS, part of the Ericsson Group, is a leading independent software vendor (ISV) of billing and customer care systems in the telecom industry. LHS Business Support Systems offer full convergence on various levels, supporting the complete range of business models both across the mix of fixed and mobile services, as well as prepaid and postpaid services.

FREE to attend!

LHS builds innovative systems that enable customers to introduce new services fast, helping drive revenues up, while keeping operational costs to a minimum. The company's award-winning solutions are used by the world's leading network and virtual operators, to generate and manage consistent revenue streams. LHS has won the IIR World Billing Award “Overall Best Contribution to BSS” three times in five years. LHS’ headquarters are located in Frankfurt, Germany, with main offices in Brazil, France, Malaysia, and the UAE.

To find out about hosting a webinar, contact: Cherisse Draper on + 44 1634 243869 or cherisse@vanillaplus.com or visit www.vanillaplus.com

REVENUE

“There may be a difficult future for many of these operators if current levels of loss continue.”

MANAGEMENT

This situation arises when service providers have ‘back office’ infrastructures that are only capable of offering and pricing ‘All you can eat’ services. The infrastructure, though capable of measuring usage, is not able to price based on actual usage. Hence the resulting inequity in network usage leads to revenue spillage. An ideal Revenue Spillage Control Suite defines and implements a usage-based pricing strategy helping the CSP not only to avoid spilling revenue, but also acting as a great opportunity to actually increase revenues in many ways. For example, using SunTec’s system operators can offer a higher price point and matching service levels for heavy users that meet their needs. Meanwhile they can offer a median price for average users with a corresponding median level of service. In addition, they could have an even lower price point with lower levels of service for untapped market segments, thus expanding their footprint. Fig1. Preventing revenue spillage with usage-based pricing

(P3, (P1, Price

Need for high usage service

(P2,

Number of customers

Usage

In addition to the inability of the operator in providing usage-based pricing, revenue spillage also results from a failure to accomplish contentvalue-based pricing. A case in point could be the latest movie being priced the same as an old movie or TV serial; in effect, inadvertently pricing the new film at a loss. Defection of valuable customers Gone are the days when operators could follow a one-size-fits-all strategy. Today, it is all about providing personalised service and price for each customer taking into consideration the actual tenure and consumption of the user. Operators need a Revenue Spillage Control Suite that enables them to identify, recognise, and reward high value customers High by exploiting next generation 20% systems, such as Integrate Loyalty Management. Customer Value and Needs Segmentation of the customer 80% base according to usage and risk, Low combined with

loyalty programs suited to the behaviour and risk associated with each segment, leads to significant increase in revenues. Ineffective management of multiple partners The communication industry is at an inflection point, with user base saturation setting in and ARPU (Average Revenue per User) stagnating. Offering value added services (VAS) in association with partners seems the only way forward. But in their urge to provide VAS, operators today are losing substantial revenue streams as a result of poor and ineffective partner management systems. The fact is that there may be a difficult future for many of these operators in a few years if the current levels of loss continue. Apart from the loss for operators due to failure to generating more revenue than the revenue share guaranteed to their partners, there is the risk of partners with popular content churning to competitors. Clearly, better revenue share is the operates Achilles’ heel today. A robust Revenue Spillage Control suite addresses the myriad contractual terms and conditions with the multiple partners of an operator, taking into consideration profitability margins and usage-based revenue sharing agreements. Such a solution helps operators retain profitable partners by giving them higher usage-based revenue shares. The solution also has the flexibility to provide profit-based revenue sharing to restore the probability of operators making losses in the case of less popular content. Coming back to the question I raised at the outset, are communications service providers ‘avoiding’ revenue? The response is YES. Without a comprehensive Revenue Spillage Control suite that gives you the ability to define, implement and automate effective usage-based and content-value-based pricing, integrated customer loyalty management systems and partner revenue-share solutions, communications service providers are indeed (inadvertently) ‘avoiding’ revenue!

High 80% Revenue

20% Low Fig 2. Segmentation of customer base by usage and risk

VANILLAPLUS FEBRUARY 2010

EXPERT OPINION:

The key to success in The App Economy: Effective upstream partner management While the app store is arguably the hottest topic in the industry right now, the concept of paying for downloading apps to your phone is not new. Operators have been doing it for years charging either a one-time or basic subscription fee to download ringtones, games and so on. What is groundbreaking, says Mark Johnson, is the recent explosion in the number of third party developers and content providers. These third party developers and content providers are becoming a central part of the app store ecosystem, brought about by the move away from the old ‘Walled Garden’ model. This exponential increase looks set to continue as smartphone prices inevitably fall and app stores become universally accepted as a mass market channel for developers and consumer brands to access a broad customer base. The author, Mark Johnson, is Global Marketing Director, Communications Industry Solutions, SAP

We have witnessed a wave of evolution in the app store, largely driven by Apple (below).

Whilst the expansion of the third party ecosystem will undoubtedly lead to increased complexity, it will also accelerate the distillation of the value chain into constituent parts. This value chain distillation will expose the real revenue opportunity for the telecoms service provider; namely the opportunity to monetise the business-to-business interaction with and between ecosystem players. Service provider app stores will evolve to become services platforms which will offer developers the opportunity to enhance applications with sophisticated network-based functions, flexible charging options and service personalisation. Critically, they will also become the pivotal point of interconnection between third parties and across service clouds.

Evolution 1.0 – the Apple effect What we have witnessed so far in the app store market is a wave of evolution – driven largely by Apple – that has taken the basic model and revitalised the idea with some tweaks to make it more consumer oriented. Apple essentially pioneered the evolution of: • Better platform: the iPhone offers a development environment and a developerrelations community that has triggered a race among handset manufacturers to match it. • Better revenue share model: the simple Apple 30% / developer 70% split is generous to the developers while covering Apple’s costs plus a little margin. • Better retailing: Apple did some simple things in their store like allowing consumer ratings and rankings of popular apps per category. Simple stuff that Amazon showed the world how to do 14 years ago! But these are just tweaks to an existing model which have improved the user experience and reduced friction in the business to consumer (B2C) value chain. The app store is still very much a product-centric model: you buy an application, it is an atomic transaction, you pay once, you own it. Apps have unitary prices which are the same for everyone shopping in the store. Evolution 2.0 – from app store to services platforms The evolution to services platforms will be quite different. Instead of buying applications you will sign up for services. Service pricing will depend on who you are, how you use the service, whether you buy related services or optional extras. So service pricing requires packaging, bundles, cross-product discounts, rewards and discounts for regular users.

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In contrast to a product-centric model, servicebased business models are necessarily multisided and highly interlinked. As the pivotal point in this ecosystem, the communications service provider has the potential to add significant 26

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value to upstream business partners. Developers, content providers and even other cloud-based service providers can benefit from: • Better product development & packaging – The ability to introduce network-based intelligence, such as location and identity, into applications opens wide-ranging product enhancement opportunities for developers. • Better product placement – The sophisticated storefront technologies resulting from the Evolution1.0 wave, combined with increasingly powerful customer analytics, discovery and targeting technologies being deployed by communications service providers can be leveraged by vendors and brands to open a world of real-time promotional capabilities which are not available in more traditional retailing channels. • Better monetisation options - Service platforms will allow sophisticated options for end customer billing using a mix of ecommerce-style one-time payments and subscription or usage-based pricing models. The operator is the platform provider who sits in the middle of the money flow between all the different customers and partners and can, potentially, take the valuable position of managing the credit risk for all parties while doing a form of multi-lateral netting (i.e. offsetting the receivables and payables among the different players, with corresponding periodic payments to or from the platform provider). The upstream value opportunity for the service platform provider In this increasingly competitive market, cultivating and fostering the developer community is critical. To differentiate in this new world service platform providers need to take into account the needs of this new set of upstream “customers”. Particularly: • Ease and speed of commercial partnering Current multi-tier retailing and distribution models in the consumer products environment are highly optimised. In order to make the service platform an equally efficient retail channel for business, the developer on-boarding and contract management process needs to evolve from today’s manual, high-touch model to become highly automated and scalable to handle tens of thousands of developers. • Rapid and flexible service modelling and launch - Reducing time-to-market for upstream business partners relies on rapid submission and approval processes, packaged

access to secure development and testing environments and structured flexibility to choose between charging a set fixed price for their apps or a services pricing model with recurring fees, bundles, discounts, promotions, etc. • Visibility into performance of individual applications and services - As upstream business partners and developers become increasingly sophisticated in the way they utilise service platforms they will become increasingly demanding of the insights they expect into the performance of those applications. Multiple third party analytics and discovery applications are already entering the market and presenting a threat to the service platform provider in this area.

“The CSP has the potential to add significant value to upstream business partners.”

• Revenue and service assurance Developers and content providers alike want assurance that their platform of choice provides accurate and timely settlement for applications consumed according to commercial agreements. The assurance function traditionally employed in the digital download business that relies on a manual reconciliation of downloads vs settlements paid cannot possibly scale to track millions of applications from thousands of developers. Conclusion Communications service providers have unique strengths that can be leveraged to establish a position of value in the next wave of evolution from app stores to service platforms. The most successful in this environment will be those who: • Recognise and respond to the needs of upstream developers and business partners • Leverage core competencies and platforms to deliver value to the whole ecosystem • Put in place robust, scalable back office systems and processes to manage and monetise the tens of thousands of businessto-business relationships on which their value depends.

Influencing the “4 p’s” in Apps Marketing – The Key Sources of Service Provider Value

VANILLAPLUS VANILLAPLUS DECEMBER FEBRUARY2009 2010

CONTENT

“Developers need new ways to manage the marketing and merchandising of their applications.” -- Colm Healy, Xiam Technologies

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Open All Hours:

Who’s managing the App Stores? For an industry whose concept of service used to mean renting a piece of copper to someone by the mile or the minute, the idea of selling applications on top of bandwidth has obvious attractions. And as Alun Lewis writes, given that raw connectivity becomes a cheaper commodity by the day, diversifying into stickier, value-added offerings makes excellent commercial sense – assuming, of course, that this new revenue chain in all its glorious, multi-dimensional complexity can be supported efficiently. With non-telco companies like Apple setting the pace with a claimed download total of two billion applications a year after launch - and Nokia’s Ovi store about to undergo a revamp after a slightly disappointing daily performance of only one million downloads a day – things are certainly hotting up.

That brings problems – and opportunities – as Martin Creaner, President of the TM Forum and Chairman of mobile game service provider

VANILLAPLUS FEBRUARY 2010

The challenge of apps Irrespective of whether it’s run by an operator or a third party, it’s clear that an application store model presents entirely new challenges to the telecoms industry. “Telecoms, however, isn’t alone in this journey,” says Mark Johnson, SAP’s Global Marketing Director for Communications Industry Solutions. “Many other service sectors are adopting an on-demand, ‘consume-to-cash’ strategy and that has major implications for the business processes and systems involved. Apart

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Martin Creaner, TM Forum and Selatra: Third parties can provide content and revenue chain management

Since the emergence of Service Delivery Platforms at the start of the decade, a great deal of effort has gone into working out the best ways of controlling the plumbing involved in the delivery of advanced services, content and applications. Only comparatively recently though has attention turned to the problems of managing the extreme complexity that inevitably accompanies an online retail environment composed of many thousands – or even millions – of different offerings.

Selatra explains, “A lot of operators tried building up their own in-house teams to manage application offerings a few years ago, only to find that dealing with issues like licensing, revenue tracking and distribution involved specialist expertise. As a result, a number of independent, third party companies have been set up that can provide all the content and revenue chain management support needed for both developers and service providers to get to market quickly and cost-effectively.”

from the obvious changes to the billing systems that face the consumer, there are the commercial relationships with the games developers and content owners that also have to be supported. As these rise into the thousands and hundreds of thousands, it’s clear that traditional manual management processes won’t scale. It’s therefore essential that automation is brought to simplify product lifecycle management.” SAP’s Johnson continues, “The second important issue concerns the aggregation of diverse services and applications from different sources – implicit in the ‘software-as-a-service’ model. Here, functionalities that extend across different clouds will be exploited and monetisation processes will extend in multiple directions. “Finally, there’s the question of how exactly the service provider is going to use their App Store to differentiate themselves and attract the right kinds of content and applications partners. This is where the ability to add value to those relationships comes in, using automated auditing systems, providing marketing insight into purchasing patterns, and being able to guarantee a certain quality of experience across the value chain,” said Johnson. For Colm Healy, Vice President of EMEA services and General Manager of Xiam Technologies, a Qualcomm company, the number of device platforms out there is also causing headaches, “The proliferation of vertical application stores tied to specific operating systems is driving both platform and channel fragmentation, forcing development and delivery costs up across the industry. “In 2009, a total of 59% of venture-backed mobile start-ups were developing for five or more operating systems in order to address a sufficiently broad base of commercial devices. While the emergence of more capable browserbased environments that leverage a cloud services infrastructure will ultimately address this issue, fragmentation is likely to persist over the next couple of years,” he added.

and Market Research Manager at revenue and business assurance specialist, WeDo Technologies believes that, “To cope with the fast pace of content business growth, manual processes are no longer good enough and service providers need to ensure that their content and application partners are not overcharging – or undercharging – them for content delivered to subscribers. When a subscriber downloads Java® games, ringtones, wallpaper, videos and so on, the service provider shares the revenues with the partner who developed the content on a flat fee or percentage basis.” Lopes continues: “With this in mind, the service provider typically needs firstly to verify that all content revenue shared is content revenue actually received from a subscriber, and that the sharing is done at the rates agreed in the content provider agreement. Secondly, that all the invoices received from the content providers have the correct amounts on them and reflect the number of content downloads and revenues shared. Finally, all the refunds made to subscribers must be appropriately reconciled with the payments made to the content provider. If the direct and indirect costs associated with these services are properly assured for integrity alongside the related revenues then it also becomes possible to closely monitor the related margins.” That kind of holistic perspective also inevitably extends to managing network resources as well if customers aren’t to experience data ‘brownouts’ or over-restrictive policy caps. Aricent Vice President, Patrick Kalaher comments, “One of the biggest challenges in monetising app stores comes from the unpredictable usage patterns, both in terms of client side performance as well managing network capacity. For the user the available bandwidth can change as they walk or drive from one end of the street to the next. This means that you need to be very careful about your technology platform to ensure it adapts and scales to this rapid change as the user moves around.

Healy, too, emphasises the need for the app store environment to provide more than just a route to market: “Developers need new ways to manage the marketing and merchandising of their applications in a crowded space and for operators and other mobile retailers to step up the quality of the tools to support these processes. A strong recommendations engine, for example, is a critical element in fostering discoverability to deliver relevant and contextual applications.”

Kalaher adds, “From a content provider's perspective, they need to use technology that will take care of all of the complexities of delivering a mobile connectivity experience, while ensuring they put the right operations and billing systems in place that can charge the customer correctly, as well as work out the revenue share between the concerned parties. Operators today are building on existing OSS systems and are continuously looking for ways to monetise on the basis of both data volumes and time of usage.”

Automate the processes It’s also equally critical to be able to take a holistic view of the entire billing and financial management environment given the increase in multi-directional payments, sponsorship models and advertising. Miguel Cunha Lopes, Alliances

With the world’s population of smart phones expected to reach 1.6 billion by 2013, it is clear that related applications traffic is also going to soar skywards. Whether Apple keeps its historic dominance is going to depend on the industry resolving some of the issues raised above…

Colm Healy, Xiam Technologies: Platform and channel fragmentation will persist for a few years

Miguel Lopes, WeDo Technologies: Verify that content revenue shared is revenue actually received from a subscriber

“Whether Apple keeps its dominance is going to depend on the industry resolving some of [its] issues.”

Alun Lewis is a freelance telecoms writer and consultant

VANILLAPLUS FEBRUARY 2010

R E A L - T I M E

I N T E R A C T I O N

EXPERT OPINION:

Achieving profitable growth by simplifying complexity Real time is the key One challenge for mobile operators worldwide is achieving profitable growth and reliable revenues from mobile broadband and next generation data services. Bandwidth-demanding applications offered on an “all you can eat” basis are not the sustainable way forward. New and highly personalised services are needed to unlock the full revenue potential of bandwidth sensitive data services. Key for all this is real-time policy and charging control as well as active mediation.

Andreas Freund is Vice President, Marketing of Orga Systems

Active mediation and charging control Next generation mobile data services are the future source of revenue while voice revenues are in decline. Fighting for new subscribers, most appealing services need to be launched faster than ever and with a wide choice of personalisation and bundling. Network capacity and profitability are key issues for operators when launching new bandwidth-demanding applications. Subscriber awareness and cost control in real time are a must to prevent the mobile “bill shock” and to meet regulatory terms. Orga Systems’ next generation policy management and charging solution enables operators to maximise their mobile broadband and data revenue streams. Fine-grained policy management, active mediation and real-time charging control for all services fight revenue leakage, limit network investments and drive uptake of new services.

VANILLAPLUS FEBRUARY 2010

One single platform for policy management, active mediation and charging control meets Tier 1 operational requirements as well as start-ups’ needs for long term scalability. NGCP is compliant to 3GPP specifications and preintegrated with Orga Systems’ real-time charging and billing solutions. Orga Systems’ Next Generation Control Point helps operators to benefit from personalised usage rules and differentiated charging for all services across all networks for pre and postpaid subscribers. With its modular architecture, NGCP unifies policy management, active mediation and charging control in one single platform. Enabling mobile broadband, advanced customer experience as well as individual real-time policies, NGCP generates additional value for key offerings. In line with Orga Systems’ strong charging expertise, NGCP vitalises advanced policy management and total charging flexibility at the network edge. Seamless subscriber notification in real time In today’s market, differentiation and customer focus are crucial. More than ever, operators require an effective communication channel

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Real-time policy management Orga Systems offers the Next Generation Control Point (NGCP), helping operators to manage complex subscriber profiles and charging rules for all services across all networks for pre and postpaid subscribers. Charging with a high level of differentiation and a fine-grained policy management allows controlling bandwidth-

demanding applications like “peer-to-peer” file sharing. At the same time, additional revenues can be generated by new individualised service offerings.

through which they can reach subscribers in order to hold on to their market shares and ensure long-term revenues. Communication service providers need to start investing in realtime communication and customer interaction capabilities, because their subscribers want and need seamless mobility, convenient services and full cost control. Intelligent management of multiple event sources is the crucial factor to be tackled. As the specialist in real-time charging, Orga Systems has deployed the world’s first system providing seamless subscriber notification through perfect processing of different event sources. This solution informs subscribers in real-time about relevant account information, thus giving them full control. Integrated rule-based filter mechanisms ensure the highest level of customer satisfaction. Subscribers will always feel well-informed and operators will create a closer customer relationship through continuous communication. Intelligent subscriber notification Built around a central hub, Orga Systems’ customer communication platform (CCP) matches subscriber-related events and parameters with predefined notification messages. Additionally, CCP supports multiple communication channels for these messages and allows control over their delivery time or time period. It is specifically designed for integration in convergent networks, a fact which makes it a valuable add-on for real-time charging and billing systems. As continuous interaction is the key, CCP boosts the success of marketing activities and creates instant revenue opportunities. It is a powerful platform for mass marketing campaigns. Use cases range from simple notification algorithms to indicate a reached credit limit to new product offers and valuable account information, personalised for the individual subscriber. Highly personalised one-to-one promotions, e.g. happy hour promotions, individual anniversary campaigns, special roaming offerings and location based promotions can be launched easily and help to establish a closer customer relationship. Personalised broadcasting channel Today, the majority of operators plan to greatly increase the amount of messages they broadcast. Millions of personalised notifications, which usually include actual usage and balance information, have to be sent out in an efficient way. In this context, the high performance capabilities of CCP play a vital role. The solution offers dynamic transmission sequences with a configurable, automated selection of alternative

delivery channels. In addition, individual messages in different languages or even dialects can be sent to specific subscriber segments. CCP encourages spontaneous impulse buying and fosters cross-selling and up-selling opportunities, especially when customers are most receptive: just at the moment when they are “online” and when targeted offerings match their individual usage behaviour. Therefore, CCP takes advantage of its built-in real-time functionalities that fuel direct customer engagement.

“Additional revenues can be generated by new individualised service offerings.”

High-performance message broadcasting With Orga Systems' CCP, communication service providers can distribute messages and simple notifications when customers reach their credit limit, when the provider offers new products or services, or when relevant account information is available. Through its intelligent rule-based information handling, CCP informs subscribers about relevant information in real-time, thus giving them full control over their accounts. Integrated filter mechanisms help to assure the highest level of customer satisfaction. Customer information and notification in real time, as well as dynamic transmission sequences with an automatic selection of alternative delivery channels and individualised or groupspecific messages are two main advantages that are made available to operators by Orga Systems’ solution. The multi-delivery-channel support, e.g. USSD, SMS, IVR and e-mail is another. The solution enables subscriber communication based on configurable rules, events, times or dates, combined with message load throttling. As the CCP is pre-integrated with all Orga Systems’ products and perfectly synchronised with its wIQ and OPSC Gold, the integration of billing, CRM, customer care or other delivery channels via standard Interfaces (XML, HTML, SMPP, LDAP) is done easily. The individual subscriber is the key Whatever operators plan or do to keep existing customers, win new ones or increase revenue they not only have to take the individual subscribers into account but they have to communicate with them. Subscribers need to be informed about services, prices and events around their account. Operators need to take this into account when investing in new equipment, new services and promotional campaigns. Thus, successful operators keep listening to their customers and learning from them what they need and want. VANILLAPLUS FEBRUARY 2010

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EXPERT OPINION:

SDM – A ‘must have’ in the LTE Age Long Term Evolution promises a faster, more efficient network. Yes … and we all know that LTE is about transforming the access network. So, you might ask: “What could that possibly have to do with subscriber data management?” The answer, says HP’s Ottavio Carparelli, is: everything.

The author, Ottavio Carparelli, is a director in HP’s Communications and Media Solutions business. He heads the worldwide Service Delivery Infrastructure & Applications unit.

“How frequently does he change devices? How does she share her information with friends?”

For service providers, this poses a challenge – and an opportunity. To survive – and even win competitive advantage – service providers will have to leverage their deep knowledge of the subscriber. Subscribers in this world are transforming into consumers. They no longer rely solely on the service provider for their entire mobile experience. While they still, for the most part, purchase the handset as well as voice and data services from a service provider, they are looking beyond the traditional services to free applications. Many of these new service applications will come from

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nimble, over-the-top (OTT) content providers who won’t bother to fully test, methodically plan, and conduct test market roll-outs. To be sure, these new services will change the way subscribers interact with the network. If traditional service providers don’t respond, their role in the consumer’s life will be reduced to that of a simple utility, or the proverbial ‘dumb pipe’. Customer preference data But service providers do have an ace up their sleeve: detailed data on each customer’s preferences and patterns. OTT providers don’t have such data, and cannot match service providers in terms of offering highly personalised services and customer support. Over-the top providers do have data about consumers, but it is quite limited and is typically related to the specific service being offered. Service providers, by contrast, have much more data about the consumer and their behaviour, but they are struggling to convert this data into actionable customer information that is used to personalise the consumer experience. In this new LTE-driven world, service providers can use their customer data to deliver content and a personal experience that can win the business and loyalty of the consumer base. The problem is that much of the valuable subscriber data is located in different silos that are dispersed

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Today’s business environment is dynamic and volatile. With the introduction of powerful handsets, including smartphones, subscribers are now using data services as never before. The almostexponential growth in data traffic is making the adoption of LTE a necessity in many service provider networks. Certainly, LTE will help service providers solve their bandwidth problems. More importantly, however, LTE will also open the door to a world of unlimited choices for the subscriber.

throughout the network under fiefdoms known as Network, New Services, and IT. It is imperative that service providers break down these silos and create a complete and insightful view of the subscriber. Some have approached the Subscriber Data Management dilemma with a consolidation approach. This requires that a service provider move everything to one single database within the network in order to gain that complete view of the subscriber. The focus for many has been on consolidating the data of core network elements such as: Home Location Register, Home Subscriber Server, Authentication Authorisation and Accounting, Equipment Identity Register, and others. While this is a noble approach, the practicality of implementing such a utopian ideal can be expensive and limiting. Costs and limitations It’s terribly expensive to change all the network elements that use subscriber data so that they communicate with this one database. However, the cost pales in comparison to the limitations the consolidation thrusts upon your network. Bringing together network data is good, but there is so much more information about the subscriber out there in a variety of IT and service databases. What kinds of purchasing decisions does the subscriber make? What types of searches do they perform? Where does the subscriber travel? How frequently does he change devices? How does she share her information with friends? Clearly, without this kind of data, the picture of the consumer will be limited. And consolidating this data with the network data in a single database can be tricky because it crosses previously-defined internal boundaries. Some people would add that you wouldn’t even want a single database – given the frequency of change. So, creating a complete and unified view of a consumer in a 4G/LTE environment is going to require a different approach – and some additional capabilities. What is needed is an additional method for bringing together

subscriber data – federation. Federation enables service providers to: 1) receive a request for data from a service 2) send that request to the multiple databases storing the requested data 3) bring the data from these multiple databases together 4) reconcile any conflicts, and then 5) provide that information to the requesting service.

“Service providers have an ace up their sleeve: detailed data on customer preferences.”

This allows the service provider to use the data where it exists today; there are no database migrations and there’s no need to completely revamp your organisational structure. Achieve a true single view Federation and consolidation must be implemented in lock-step with one another to truly achieve a single view of the consumer in a 4G environment; a view that spans the network and IT to create a personal perspective of the consumer. A perspective that will enable the service provider to create new targeted services that will improve the consumer’s experience. A perspective that will deepen the relationship between consumer and service provider – positioning the latter as the trusted provider of a truly integrated and personal experience. In addition to creating revenue-generating services, service providers can leverage an integrated view of the customer to create new kinds of revenue streams. For example, they can offer advertisers access to targeted consumers who would welcome the advertising, based on usage, preferences and authorisation. LTE is going to open many opportunities for service providers to generate new revenue streams – as long as they can bring together the subscriber data and provide a contextually relevant experience for the consumer. The world is changing, and service providers need to do more than just think outside the box. They need to grow their sphere of influence for tomorrow – by using the subscriber data they have in their network today.

VANILLAPLUS FEBRUARY 2010

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Anandan Jayaraman, Connectiva: ‘Act of God’

The right offers for the right customers at the right time The latest Subscriber Data Management (SDM) systems are finally helping operators to sweat their assets and move forward with innovative thinking. Mark Dye reports. Miguel Carrero, HP CMS: A common issue is where to begin

Most of us dream of leaving a lasting legacy behind us, something to remind people of what’s been and gone before, and something that means we will not be forgotten. For operators the opposite is true. Most curse the legacy systems in place, the siloes of data they’ve created and the speed at which they are now asked to bring this all together. Generally speaking, they’re a nightmare. “To quote the CIO of a large provider, getting to a single view of a customer’s services, usage and interaction data would require an ‘Act of God’”, says Anandan Jayaraman, chief product and marketing officer, Connectiva.

Frederic Bastien, Blueslice Networks: MVNOs making major headway

“I would say a common issue we’ve had is where to begin,” reveals Miguel Carrero, Director, Worldwide SDM Solutions, HP Communications & Media Solutions. “Some providers want to aggregate data from a variety of sources to more easily manage the subscriber, while others are interested in gaining an advantage against the competition with a faster time-to-market for new services.” Indeed, the size of the challenge depends on the

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“This is why it’s so important to have an SDM solution that supports consolidation of the data, as well as federation,” Carrero adds. Frederic Bastien, Vice President of Products, Blueslice Networks, believes that the common problem for all service providers remains how to manage an exponentially increasing number of complex, multi-profile subscribers and this in itself presents several challenges. “Mobile operators are keen to have a consolidated, evolved SDM solution that can serve multiple access domains and provide an open standard platform to host new revenue generating services. Cable and fixed line operators are keen to have a flexible SDM solution that can support their multi-service offering while managing the subscriber as a single logical entity,” he says. Bastien thinks that MVNOs and MVNEs are making major headway as a result of customised offerings, but in order to best serve the end user they are keen to own, manage and serve their subscribers, and an affordable and scalable SDM solution will enable them to do just that. “Mobile operators who have already been through the HLR consolidation initiatives are in a

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Jürgen Walter, NSN: Telecoms service ‘anytime, anyplace, anywhere’

This is because in developed markets companies like AT&T, BT and Deutsche Telekom suffer from heavily fragmented customer data which is strewn across hundreds of systems. In emerging markets Jayaraman says the issue is less pronounced owing to the dominance of prepaid, but he thinks operators need a 360 degree view of a subscriber in real time to personalise and monetise services.

data being pulled together, with legacy data proving especially difficult for many providers, because integrating it into a consolidated SDM system requires either a complete rewrite of the current application or purchasing a new application that writes to the consolidated database.

privileged position,” says Pawel Lamik, self-care and CRM Product Manager, Comarch. For some MVNEs and MVNOs, depending on type, the challenge may result from the low degree of control they have over subscriber data in the network layer.” Rigorous standards “With the future of telecommunications being predicated on an ability to offer speech, content and applications ‘anytime, anyplace, anywhere’ – to the same rigorous standards of service quality – it’s fast becoming clear that this vision will be severely limited by an inability to bring together relevant subscriber data,” adds Jürgen Walter, Head of Business Solutions, Nokia Siemens Networks. Indeed, even though the global economic situation continues to constrain the capital expenditure budgets of telcos, Infonetics predicts the worldwide market for SDM will grow to US$789m within three years. This belief is echoed by ABI Research which believes that SDM will prove key to growth for mobile network operators, fuelling more than US$17bn in personalised service revenue in 2014. So, where’s this all going? Well, MNOs are using subscriber data management tools to develop profiles that are vital to launching and managing loyalty programs and new advanced messaging solutions, explains Mark Beccue, Senior Analyst, Consumer Mobility, ABI Research. “In March 2009, Digi Communications launched a loyalty programme to help retain subscribers,” he says. “Based on monthly usage, payment history, and longevity with the company, subscribers qualify for three different levels of personalised service, such as no-cost, next-day delivery of replacement SIM cards, higher credit limits, and a dedicated team of priority service consultants.” Verizon’s VIPs Verizon Wireless has also been automatically enrolling subscribers of a particular grade into its VIP programme which offers discounts on phones and accessories, waived activation and upgrade fees, and free two-day shipping on all purchases. “In addition, should a VIP subscriber’s phone usage suggest he or she might exceed the plan, the company sends a text message alerting the subscriber and recommending a plan that might be a better fit,” adds Beccue. “Should a subscriber exceed the plan allowances, he or she can take a one-time ‘overage protection credit.’” Some MNOs are even enabling subscribers to customise text messaging services. Messaging solutions provider Acision offers a product called Message Plus, which supplies a variety of subscriber-configurable controls, including parental controls – blacklist or whitelist – auto reply, auto-copy, message divert, message

forward and the ability to create distribution lists. “Furthermore,” says Beccue, “subscribers can apply service rules based on the origination address and time of day, essentially giving them the ability to toggle their text messaging availability.” This solution has already been deployed by Sprint and Sun Cellular of the Philippines. SDM innovations Operators are using subscriber data in innovative ways, says David Sharpley, Senior VP, Marketing & Product Management, Bridgewater Systems.

Mark Beccue, ABI Research: MNOs using SDM to develop vital profiles

“SmarTone Vodafone in HongKong, for example, is using subscriber data to offer applications on demand and drive greater revenues from mobile content, while closely managing finite network resources, while Globe in the Philippines is offering innovative services such as a mobile data day-pass, based on its understanding of subscribers, to maximise revenues from casual mobile data usage,” he adds. Others are cleverly using data to deliver more bandwidth to a subscriber who wants to engage in mobile gaming in the evening but not during the day. “One major North American Tier-1 operator was able to create a virtual, nationwide messaging network of voicemail systems as no single voicemail system would be able to support all 80 million of their subscribers,” says Olivier Simha, SDM Marketing Manager at Alcatel-Lucent. The alternative to implementing this SDM strategy would have been to consider decommissioning all existing voice mail systems for a new one which would have proved expensive from a purchasing, deployment and migration perspective, as well as putting at risk customer satisfaction. And at times like this when top-line growth is hard to come by, Mark Billige, Partner, Simon Kucher & Partners, offers some clear thinking. “In a typical telco 80% of profit is generated by the existing customer base, yet this receives only 20% of management attention, with 80% of focus and resource dedicated to winning new customers,” he says. Given the abundance of subscriber data available and the almost impossible economics of profitable growth through customer acquisition, he believes this makes little sense. “Both theory and practice show that the more differentiated our propositions and pricing, the more we can extract from the market,” Billige adds. “To generate growth from the customer base then, we have to embrace more differentiation and subscriber data is clearly the key to this process. Without the data we cannot create the right offers for the right customers at the right time.”

David Sharpley, Bridgewater Systems: Operators using SDM innovatively

Mark Billige, Simon Kucher & Partners: Embrace differentiation

VanillaPlus Jargon Buster CRM = Customer Relationship Management HLR = Home Location Register MVNE/O = Mobile Virtual Network Enabler / Operator SDM = Subscriber Data Management

VANILLAPLUS FEBRUARY 2010

to FR at EE te nd !

VanillaPlus Thought Leadership Webinars: Web self-service The Challenges & Benefits of getting it right

Date: Time:

Wednesday 24th March, 2010 14:00 London, 15:00 Paris, 09.00 New York, 17:00 Dubai Online – see www.vanillaplus.com/diary for details Speakers: Ian Jones, head of global strategic solutions, eGain Communications. Alun Lewis, analyst Moderator: Jeremy Cowan, editor, VanillaPlus

Jeremy Cowan

Register NOW for your FREE place at this Webinar on web self-service. Online registration is available at www.vanillaplus.com or you can call Charlie Bisnar on + 44 (0) 1732 844017 or e mail Charlie@vanillaplus.com

Ian Jones

Alun Lewis

Why you should attend this webinar 1. Learn how you can reduce your average response time by 50% 2. Discover how to increase your first time fix rate 3. Determine what escalations channels you should offer

4. Find out why a “Search” tool on your website is not enough 5. Understand how you can provide an intelligent Q&A dialogue for problem resolution

Against a background of rapidly converging technologies, providing high quality customer care is becoming increasingly difficult. Your customer care agents move from supporting simple devices to content-driven applications and multi-play services including broadband, mobile, fixed-line and television. To ensure your organisation stays ahead, the adoption of web self-service offers supreme customer service and allows you to retain high-value customers whilst reducing costs and improving your average margin per user (AMPU). eGain® SelfService™ enables organisations to offer web self-service through the industry's broadest set of information access methods including dynamic FAQs, search, browse, guided help, and chat bots. It also provides a seamless transition from self-service to agent-assisted service through a common platform for customer interaction and knowledge management. During the Webinar we will look at the life cycle for the adoption of a web self-service system. We will focus on the delivery of world class customer service by means of web self-service systems. We will address the hidden challenges it brings and present the pitfalls, considerations and best practice approach to deploying web self-service, and using customer examples, we will uncover the true value of self-service.

About eGain eGain is the leading provider of multichannel customer service and knowledge management software solutions for in-house or on-demand deployment. Ranked highly in 2009 by leading analysts, Gartner Group and Forrester Research, eGain has become the preferred solution for many global and regional telecommunications companies. Headquartered in Mountain View, California, eGain has an operating presence in 18 countries and serves more than 800 enterprise customers worldwide. To find out more about eGain, visit www.eGain.com or email telco@egain.com

Visit eGain at Mobile World Congress in Barcelona on 15th to 18th February, 2010 at Stand D58 in Hall 7 (The Apps Lounge). To find out about hosting a webinar, contact: Cherisse Draper on + 44 (0) 1634 243869 or cherisse@vanillaplus.com or visit www.vanillaplus.com

Upcoming Events LHS Webinar Integrated Billing and Business Intelligence: Enabling the Next Generation Communications Experience 3 March, 2010

Telecoms CEM, CRM & Retention 15-18 March, 2010 Hilton Vienna Plaza, Vienna, Austria Official Media Partner - VanillaPlus www.iir-conferences.com/retention Telecom Fraud & Revenue Assurance 22-24 March, 2010 London, UK Official Media Partner - VanillaPlus www.iir-events.com/IIRconf/Telecoms/EventView.aspx? EventID=2059

14:00 London, 15:00 Paris, 09:00 New York, 17:00 Dubai Hosted by LHS, moderated by VanillaPlus Free to attend online. For details go to: www.vanillaplus.com

Mobile Internet 23-24 March, 2010 Berlin, Germany Official Media Partner - VanillaPlus http://www.iirmobileinternet.com/VanillaPlus

GSMA Mobile World Congress 2010 15-18 February, 2010 Fira de Barcelona, Montjuic, Spain Media Partner - VanillaPlus www.mobileworldcongress.com

Management World Middle East 2010 2-3 March 2010 Hilton Jumeirah Beach, Dubai, UAE Official Media Partner - VanillaPlus www.tmforum.org/Events/Management WorldMiddle/7111/Home.html

Telecoms World Congress 2010 20-22 April, 2010 Hotel Okura, Amsterdam, Netherlands http://www.terrapinn.com/2010/twc/ Embedded & Mobile M2M Services 26-28 April, 2010 Berlin, Germany Official Media Partner - VanillaPlus www.embeddedm2m.net/VanillaPlus Managed Services & Network Sharing 19-21 April, 2010 Hilton London Tower Bridge Hotel, London, UK Official Media Partner - VanillaPlus www.iir-events.com/IIRConf/page.aspx?id=24457

IPTV World Forum 2010 23-25 March, 2010 London, UK Official Media Partner - VanillaPlus www.iptv-forum.com

3G, HSDPA, LTE Optimisation 10-11 March, 2010 Frankfurt, Germany Official Media Partner - VanillaPlus www.3gconference.com

eGain Webinar Customer Care 24 March, 2010 14:00 London, 15:00 Paris, 09:00 New York, 17:00 Dubai Hosted by eGain, moderated by VanillaPlus Free to attend online. For details go to: www.vanillaplus.com

Roaming World Congress 19/22 April 2010 Barcelona, Spain Official Media Partner - VanillaPlus www.iir-events.com/IIRconf/Telecoms/EventView.aspx? EventID=2561

LIVE WEBINAR LIVE on Wednesday 3 March, 14:00 GMT Integrated billing and BI: Enabling the next generation communications experience Live Webinar: Wednesday 24 March, 14:00 GMT Web Self-Service: The Challenges and Benefits of getting it right STAND 1F33

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VANILLAPLUS FEBRUARY 2010

MARCH

WEBINAR

PREVIEW

The Webinar Speakers are:

Integrated billing and BI: Enabling the next generation communications experience Veronika Olsson, Director Strategic Marketing and Research, LHS has over 15 years of hands-on experience in IT and communications. Combining a billing and customer care consulting background with business process strategy expertise, Veronika has a holistic approach to telecommunication market, jointly considering technical and business aspects.

Chris Yeadon, Director Product Marketing, LHS, has nine years of sales and marketing experience in the IT and telecoms industries. Prior to joining LHS, he was Head of Sales and Marketing at mobile applications company, Cellus in the UK before moving to global business intelligence software vendor, SAS Institute, with overall responsibility for thought leadership based marketing programmes in the EMEA region.

For more information or to register for this FREE Webinar go to: www.vanillaplus.com 38

A communication service provider’s (CSP’s) billing database is often described as the ‘crown jewels’ of customer information – all details of all transactions with all customers across all their services represents a strategically important information asset. CSPs are uniquely positioned to capitalise on this data and, with the marketing platform that a good billing system should provide, can transform their customers’ communications experience. But despite this, evidence shows that CSPs use their customer information for analysis far less than, for example, the retail industry. This webinar will explore how to rectify this. zooming in to investigate the specifics, and help to uncover future trends, not just past events.

Unlocking the potential with business intelligence Historically, communication providers have held huge quantities of billing data, but it was difficult to access and interpret except by database specialists. Business intelligence (BI) unlocks this data and makes it available directly to business users across different departments as a single version of the truth they can all act upon. The technology behind unlocking this data is a behind-the-scenes mapping between the underlying schema of the billing database and an ‘abstraction layer’ designed specifically for business users, employing straightforward business terminology such as ‘customer identifier’, ‘business unit‘, ‘tariff’, ‘product’ and so on. The major BI innovation is the addition of a simplified ‘presentation layer’ usually called a dashboard which uses the ‘abstraction layer’ (or metadata layer) to hide the underlying complex data model and highlights the status of defined key performance indicators (KPIs) required to take productive business decisions. The status of these KPIs can be displayed by a variety of visualisation tools such as pie charts, line charts, histograms and speedometers. Coloured ‘traffic lights’ show which KPIs are currently running as expected (green), slightly outside expectations (yellow) or worse than a predefined critical level (red). Dashboards make a huge contribution to decision-making productivity because they are highly intuitive for business users. They present a single shared view of the truth for the whole organisation, being based on the same underlying data. They help users visualise the bigger business picture before

VANILLAPLUS FEBRUARY 2010

The next generation communications experience The business application of BI can range from customer care performance, tariff planning and management up to enterprise performance management. But perhaps the most significant benefit of BI is what it can tell the operator about its customers. This is not just about knowing which customers generate the most revenue but understanding what motivates their behaviour and how to nurture that. It is about combining customer profile details, historical purchasing and call behaviour, with other factors such as location and even handset type to provide relevant and informative communication in and directing buying behaviour at the right time. One application of such customer intelligence could be to predict when certain customer types are likely to churn, based on historical patterns of customers with similar profiles. This information enables operators to understand which customers to target with attractive offers, but more importantly when. In short, it enables the operator to provide a meaningful communication experience by making the customer feel that their operator understands them. Business support systems are the foundation of the next-gen communications experience. Integrated billing and BI systems provide the source and the means of extracting and presenting the relevant data, but operators also need the means of analysing this information. Moreover they need a charging and billing system that provides the range of marketing tools to enable them to act and deliver tailored offerings based on the rich information and multi-dimensional view of the customer that they now have.

N E W

B U S I N E S S

M O D E L S

EXPERT OPINION:

Towards a profitable mobile data business model The mobile data industry has evolved rapidly over the past two years, with the impact of growing 3G penetration, lower cost smartphones and USB laptop dongles on flat-rate data plans. This has resulted in huge growth in data traversing operators’ networks. David Sharpley of Bridgewater Systems believes that the market has now reached a chaotic and critical point with network congestion being felt by operators and consumers alike. Operators are introducing a toolkit of network resource management strategies that will reduce costs and improve economies of scale. Policy control, data traffic offload, evolution to 4G, and network optimisation will incrementally reduce data delivery costs by more than 60% over the next three years. A holistic approach in an era of huge mobile data growth is vital to long term success. Policy control – how, when and under which circumstances subscribers can access networks, applications and services – will contribute cost savings of more than 10% by 2013 in the US market alone. Data offload savings Meanwhile, operators deploying a data traffic offload strategy to Wi-Fi or femtocells, using service control to ensure transparent and secure subscriber access, can expect annual savings of 20 - 25% by 2013. The evolution to HSPA and LTE will save just under 20% in costs, according to Chetan Sharma Consulting. Cost reduction is only one side of the equation. Operators are now creating new service models that move away from unsustainable flat-rate plans towards tiered and usage-based pricing underpinned by subscriber, service, and policy control: • Speed-rated: These plans offer operators the ability to increase revenue from the heaviest users by placing these subscribers on the most expensive tariffs, implemented through effective policy control on the consumer side. • Bandwidth usage and application specific: Next generation policy control solutions enable operators to implement controls and pricing based on bandwidth usage or specific traffic types. Operators can flexibly charge for heavy bandwidth services such as video or peer-to-peer in real time. • Time of day: Operators in mature markets have seen a clear time-of-day usage pattern

•

emerge for mobile data. Similar to other utilities, they can charge more at peak times according to network capacity, or conversely, offer consumers incentives to download during quiet network times. Location-based service models: Traffic patterns over the past two years demonstrate that the most congested cell sites are in urban centres. Could operators implement a ‘congestion charge’ model on their mobile networks if guaranteed quality of service (QoS) is the outcome? Quality of service models: Guaranteed QoS comes at a cost to operators, especially in mobile networks where bandwidth is necessarily a shared resource. But the emergence of ‘bandwidth boost’ models – whereby a user is offered a short-term increase in bandwidth for a set fee, for example – provide the opportunity to implement service level agreements. Ad-funded solutions: Mobile advertising is beginning to emerge as a revenue source for operators. With subscriber data privacy concerns now being addressed, mobile advertising could create new revenue streams for the operator. Mobile commerce driven: Japan offers insight into a commerce-driven mobile data market, with an open ecosystem driving adoption and consumer spending on services. Leading mobile internet players including Yahoo! Japan have developed a viable market for content and services in partnership with mobile operators.

These flexible, dynamic, and personalised pricing models that reflect subscribers’ preferences and context, bandwidth and application usage, and network conditions are the wave of the future. It is ultimately the responsibility of mobile operators to introduce these models with quality of service guarantees that are based on users modifying their behaviour. With that will come order from the mobile data chaos.

The author is David Sharpley, Senior VP, marketing & product management., Bridgewater Systems

Service models may be based on various factors including service speed, time of day and congestion charging.

“Mobile advertising is beginning to emerge as a revenue source for operators.”

VANILLAPLUS FEBRUARY 2010

EVENT

PREVIEWS

GSMA Mobile World Congress 2010 15–18 February, 2010 - Fira de Barcelona, Montjuic, Spain www.mobileworldcongress.com The GSMA Mobile World Congress is the place for mobile leaders to gather, collaborate and conduct business and experience Vision In Action. In 2009, GSMA Mobile World Congress hosted approximately 47,000 mobile professionals from 182 countries. More than 50% of these were C-Level executives, and 9,000 of them represented mobile network operators from around the world. In

addition, more than 2,400 members of the press reported from the event, representing more than 1,500 media groups from 76 countries. If your company wants to be recognized in the mobile ecosystem you can’t afford to miss the 2010 GSMA Mobile World Congress.

Management World Middle East 2010 2-3 March, 2010 - Hilton Jumeirah Beach, Dubai, UAE www.tmforum.org Management World Middle East 2010 will bring together industry experts from the mobile, fixed line, cable, Internet, media and entertainment industries to explore new growth from new business models and new services, cost savings from operational excellence and maximised revenue from loyalty and customer retention. We will examine the competitive markets, their very different needs and the economic outlook for the future. We will also look to a global audience to learn the practical lessons of the past as well as strategies for survival and profitability.

3G, HSDPA, LTE Optimisation 10-11 March, 2010 - Frankfurt, Germany www.3gconference.com Achieve outstanding return on investment (RoI) with your complete guide to the evolution pathway for Network Optimisation. At this event you will hear from 20 operators (hybrid, mobile and fixed) and be able to interact with both technical experts and strategic top management speakers. You will learn how to: • Guarantee crucial RoI and effective optimisation from your network • Meet the optimisation challenge as 3G traffic increases and networks evolve towards HSPA+ & LTE

• Gain savings in operational effort and cost with selforganising wireless networks • Deliver an outstanding customer experience and have a direct impact on competitiveness and profitability • Discover the benefits of UMTS 900 as part of your evolution pathway • Understand rapidly developing areas of new antennas technologies such as MIMO, 3D and active. Plus operators can take advantage 50% discount on the cost of admission.

Telecoms CEM, CRM & Retention 15-18 March, 2010 - Hilton Vienna Plaza, Vienna, Austria www.iir-conferences.com/retention With 11 operator case studies on the two conference days, an interactive workshop and a collaborative learning session, this event will offer you ample opportunity to learn, network and exchange ideas. Download the brochure at www.iir-conferences.com/retention Building and maintaining profitable customer relationships can result in a win-win situation for both you and your customers – by providing your customers with the services

and experiences they seek you can ensure that they remain both profitable and loyal. IIR’s Telecoms CEM, CRM and Retention conference will examine how operators are developing and adopting novel CRM and CEM approaches in order to enhance customer relationships and maximise customer retention as well as customer lifetime value.

Telecom Fraud & Revenue Assurance 22-24 March, 2010 - London, UK www.iir-events.com With the amalgamation of two flagship conferences Telecoms Fraud and Telecoms Revenue Management - into one multi-streamed summit, this event will offer you an optimal learning and networking opportunity.

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The event will scrutinise the latest developments and challenges in the fraud and revenue management areas and will offer you the chance to hear a number of exclusive operator case studies as well as meet leading industry experts from around the world.

VANILLAPLUS FEBRUARY 2010

STAND 1F33

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Mobile Internet 23-24 March, 2010 - Berlin, Germany www.iir-mobileinternet.com/VanillaPlus Learn, discuss and explore the challenges and commercial opportunities that exist within the mobile Internet eco-system and make the most of best-practice perspectives over a twoday period offering a programme packed with case studies, roundtable discussions, industry snapshots, master classes and fishbowl sessions. Significant discounts are offered to mobile operators, online / mobile communities, and content providers.

IPTV World Forum 2010 23-25 March, 2010 - London, UK www.iptv-forum.com Now in its 6th year, the IPTV World Forum has evolved with the industry to reflect the central issues of hybrid broadcast solutions and broadband TV business models. Now fully reflective of hybrid TV in all its flavours, the eventâ&#x20AC;&#x2122;s service provider-packed programme examines in depth the critical issues affecting you and your business. Bringing together experience from every corner of the globe, the IPTV World Forum is said to be the place for all your business networking, all under one roof.

Embedded & Mobile M2M Services 26â&#x20AC;&#x201C;28 April, 2010 - Berlin, Germany www.embeddedm2m.net/VanillaPlus The Embedded Mobile & M2M Services conference brochure is now available to view at the event website: www.embeddedm2m.net/VanillaPlus As you will see from the brochure, the conference offers a

great chance to compare approaches to building a profitable Embedded Mobile and M2M business. The opportunities of the Embedded Mobile and M2M market are clear to see. This event will help you to realise them. Visit the website today and book your place at this exciting event.

Managed Services & Network Sharing 19-21 April, 2010 - Hilton London Tower Bridge Hotel, London, UK www.iir-events.com Network economic activities are at the heart of mobile operator strategies in 2010. The current economic crisis and resulting unavailability of credit is pushing mobile operators to radically reduce capital expenditure and operational expenditure (CapEx and OpEx). Drawing on business models from alternative industries such as

aviation and transport, many of the large operator groups are developing innovative business partnerships to reduce CapEx and move to fixed OpEx-led models. This senior-level strategy forum will feature CxO and Director-level speakers from major worldwide mobile operators.

Roaming World Congress 19-22 April, 2010 - Barcelona, Spain www.iir-events.com The economic crisis has brought about a number of significant changes in the roaming industry. Radically reducing your roaming cost base in terms of supplier costs, wholesale rates and Inter-Operator Tariffs (IOTs) is an absolute priority. Looking for ways to safeguard revenues in the face of the dramatic drop in tourism is also essential. In

STAND 1F33

addition to safeguarding profits, mobile operators have also been forced to get more creative and develop new revenue streams. This conference contains targeted sessions on roaming customer segmentation, data propositions for the iPhone and looking at ways to encourage new roamers.

www.kabira.com

VANILLAPLUS FEBRUARY 2010

POLICY

CHARGING

LT E

EXPERT OPINION:

Integrating policy control and charging into LTE networks The exponential growth in smartphones and data-rich applications has created a need for more capacity in the network, as mobile operators struggle to meet the increasing demand for bandwidth and manage associated costs. So it comes as no surprise, says Joe Hogan, that leading operators worldwide, including AT&T, Telefonica/O2, TeliaSonera, and Verizon are investing in Long Term Evolution (LTE) networks.

The author, Joe Hogan, is Chief Technology Officer at Openet

LTE networks bring new challenges to mobile operators when it comes to integrating the charging and billing infrastructure into the new network. Mobile operators are faced with some difficult choices in deciding how to evolve their charging, policy management and billing mediation platforms as they deploy LTE and the evolved packet core (EPC). The critical trade-off is between delivering the full potential for LTE and IMS (IP multimedia subsystems) to enrich the end user experience and the cost of replacing and upgrading the existing network and support systems. Mobile operators are realising the need to optimise their network and service architectures. According to the analyst house Yankee Group, over 65% of service providers recently polled now require policy control or will do so within the next 12 months to manage mobile data growth in their 3G networks, and are not waiting for LTE. Increasingly, policy and online charging are seen as integral to maximising capacity, increasing revenues, managing devices and meeting subscriber expectations. Operators need to plan ahead, so current investments in policy management can be integrated into future LTE deployments.

“Improved The business case for LTE

LTE strictly refers only to the radio access

spectral standards introduced by 3GPP in release 8. This efficiency and is part of a broader 3GPP programme called

architecture, which also reduces the number of network nodes. Jointly, the benefits of improved spectral efficiency and flat-RAN architecture reduce network carriage costs and create a cost-growth curve that tends to track revenue rather than demand, allowing the operator to maintain a healthy profit margin. Also, compared with previous access technologies, like GSM, CDMA or UMTS, the smaller size of the LTE access node brings other benefits, including lower power consumption and a much smaller space requirement. Wireless data growth will be the principal driver behind the first wave of LTE deployments. Mobile data traffic is doubling every nine months, according to Cisco, and for some operators this is even higher. But revenue per megabyte is falling and will continue to fall, driven down by increasing competition and flat rate pricing, forcing operators to deploy LTE to cope with data growth and deal with the divergence of revenue and cost. The success of smartphones and laptops is a key factor that helps explain the increasing demand for data services. The use of netbooks and laptops with 3G USB dongles, mainly by enterprise customers, will continue to grow rapidly as tariffs become more attractive. Also, smartphones with large touch screens, high bandwidth connections and compelling user interfaces have changed the way consumers use their mobile phones. And this trend is accelerating.

system architecture evolution (SAE) that

flat-RAN includes an evolved packet core (EPC). But LTE architecture ... is part of a broader SAE that will bring additional benefits. Alongside LTE in the radio

allow the access network (RAN) operators will deploy the operator to EPC. Together, these provide a flatter and

simpler IP architecture with lower latency and

maintain a more sophisticated capabilities. healthy profit

Compared with legacy networks, LTE improves

VANILLAPLUS FEBRUARY 2010

Advances in mobile data services and mobile devices have made the full internet available to

▲

margin.” spectral efficiency and employs a flat-RAN

According to Mark Newman of Informa, second generation mobile technologies still account for 90% of the world's subscriptions. But by the end of 2012, this figure will fall to 70%, and by the end of 2014, over half the world's 6.7 billion mobile subscriptions will be to 3G and 3.5G+ technologies.

mobile end users. This in turn has stimulated development of mobile-specific applications and services that enhance existing internet services such as Facebook, Google maps, Google search, Twitter and YouTube. These include location, operator billing, reduced bandwidth requirements and mobile-specific user interfaces that are becoming increasingly popular. Moreover, new types of connected electronic devices – from GPS devices to eReaders – are starting to exploit the unique characteristics of mobile data services. Amazon's Kindle is an example of an application-specific device that uses a dedicated mobile service. Machine to machine type services will drive further growth in these types of applications. Improved network coverage and reliability will also stimulate the use of cloud computing to simplify deployment and management of new applications. These factors will lead to ongoing growth in wireless network traffic per user over the next five years. This is good news for operators, but comes with a big challenge; if data traffic is on flat-rated plans, this growth will only be accompanied by a relatively modest increase in average revenue per user (ARPU) and this will result in a significant decline in revenue per megabyte. The cost of maintaining the existing network without LTE will soon begin to erode operators' profit margins and will eventually outstrip revenue. Policy control & charging In current 2G/3G networks policy control, charging and billing mediation are already complex functions. The key challenge operators will face is how to evolve these functions to accommodate the needs of LTE, requiring a migration path from the legacy environment to the LTE/SAE architecture. Eventually, most legacy components will be replaced during the migration due to the growth in transaction rates that the PCC will be required to support. The IN prepaid platform in particular will be gradually eliminated as balance management migrates to the online charging platform, and the circuit switched infrastructure will eventually be phased out. In the short term the evolution of policy control, charging and mediation to support LTE will mean that existing billing platforms will need to be augmented to support the EPC elements.

With rapidly increased data traffic these will need scaling to meet demand. Where these systems are complex and expensive to upgrade, operators should focus on enhancements to the policy control and charging, to mitigate stresses on these older systems. Operators can achieve significant benefits by centralising control across mobile access technologies. Benefits include smoother service migration and better management of mobile data traffic and applications such as the ability to direct traffic and applications to the optimal access network. This can result in significant capital and operating cost savings.

The use of netbooks and laptops with 3G USB dongles, mainly by enterprise customers, will continue to grow rapidly as tariffs become more attractive

As the cornerstone for mobile personalisation and management, ‘smarter' subscriber, service and session controls will enable mobile operators to better monetise data traffic and create innovative, personalised services for subscribers. Conclusion The rise of LTE networks and deployment of full IMS capabilities will significantly increase the volume of events that the policy and charging control and mediation functions must deal with. Consequently, operators must carefully evaluate the scalability and performance of systems deployed during the transition phase to full LTE/IMS deployment. Policy management can also be used to help operators better utilise the network. An appropriate approach would be to encourage consumers to increase usage during off-peak hours with lower rates and decrease usage at peak hours. Operators can combine capacity improvements with controls that manage the flow and demand for data – motivating subscribers to adapt their behaviour in a way that optimises how the network is utilised. Policy and online charging will become increasingly connected as the network evolves towards full LTE/IMS. Therefore, operators must evaluate how these will integrate over time. LTE will offer the increased capacity operators and their customers require. However, to ensure an appropriate return on investment, carriers will need to ensure charging and policy controls offer the scale and control needed to support an exponential rise in the number of events and new services. Only an integrated and well planned network will enable mobile operators to monetise on the data explosion and deliver a superior user experience. VANILLAPLUS FEBRUARY 2010

L O YA LT Y

EXPERT OPINION:

Going beyond traditional marketing campaigns to improve customer loyalty and revenues Telecom operators in general, and wireless operators specifically, are facing an increasingly competitive marketplace together with a continuing trend towards commoditisation of their services and pricing pressures from a dynamic converged environment. Thomas Thekkethala sees four critical challenges facing virtually every telecom operator across the globe. The first challenge is retention, coupled with higher subscriber acquisition costs. Annual churn rates above 20%, especially in the growing prepaid segment, are not uncommon in many regions. The second challenge is the average growth of new subscribers, which is slowing down worldwide. With today’s high level of mobile penetration, acquisition often involves a subscriber switching from their original carrier. The author is Thomas Thekkethala, CEO of RateIntegration

The third is the average revenue per user, which is at a steady decline with an average of 2% worldwide. While value-added services are a growth area, it has not offset commoditised voice and data revenues. The fourth challenge is to exploit the emerging – and exciting — opportunity for operators to generate revenue through mobile advertising and revenues through their partners. So how do the operators turn this around? In our view, the best way of addressing these four challenges is to improve and nurture customer loyalty. Now that sounds easy, however, despite heavy investments in traditional marketing campaigns over the years, the trend remains negative.

Customers do not expect communication based on broad demographic information like age, or post

Recent research from the major industry analysts shows, as well as what our customers are finding, that the uptake of these traditional

VANILLAPLUS FEBRUARY 2010

How can carriers increase the effectiveness of their marketing and advertising campaigns? The answer is that they have to move beyond traditional campaign management to nextgeneration loyalty management strategies based on three key concepts: 1. Customers expect personalised communication and offers that reflect their individual needs and actions rather than offers based on broad demographic information like age, zip code or monthly spend level. Personalisation not only creates relevant promotion offers but it also fosters a sense that the operator is trying to respond to the subscriber’s individual needs. Brand loyalty follows. 2. Customers respond better to ‘just-in-time’ promotional offers than to untimely random, periodic, mid-day or end of day communications. In fact, industry research clearly shows approximately 10-15x improvement in uptake for offers and promotions when they are driven by real-time triggers based on customer behaviour. 3. Customers feel a sense of connection when they can communicate back about promotions and offers. The interactivity greatly improves customer satisfaction and also reduces costly communications to customer call centres. Why are current IT solutions failing to deliver against marketing’s requirements? Historically, operators have implemented campaign marketing functionality in their pre or postpaid billing or CRM systems. Adding marketing campaigns into the billing system is both high risk and very expensive. Billing systems were not designed for fully flexible promotional offers and campaigns, and the ‘time to market’ requirements for on-going promotions development far exceeds the feasible rate of

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Why are traditional marketing campaigns not effective? The principal reason for this is that the traditional practices in campaign management have centred on mass marketing and static customer segmentations. The campaigns themselves tend to be driven completely by the operator, rather than based on the customer’s behaviour. Communicating to the subscriber is one-way using SMS, email or other channels. Campaign and loyalty management software vendors have emphasised segmentations to target customer sets, based on IT reports and different forms of historical analysis.

‘segment-and-promote to a subscriber list’ models is very low in a world jaded by too many offers and too much spam.

change on virtually all installed or custom billing platforms. Marketing needs always outrun the flexibility of the billing system or their development staff, and the desired degree of personalisation and interactivity inevitably falls far short of marketing’s requirements. Carriers have also attempted to implement loyalty management in the CRM and subscriber account management systems. Traditional segmentation, based on customers by geographic location, spend level, or other static data, delivers customer lists from which traditional promotional offers are generated. However, here again, these promotions are limited by the static data in CRM with no connection to customer behaviour on the network and furthermore, ‘time to market’ remains a major issue. Many operators have recently turned to analytics and segmentations using data warehouses. These solutions provide powerful customer segmentations and a level of personalisation using network data. However, they lack the realtime, interactive and ‘time to market’ characteristics that maximise the effectiveness of marketing campaigns. The database-driven campaign management tools also typically lack the architected components for automated execution of promotions, the management of smart communication / interactivity with the subscriber in response to promotions or the integration with other business systems to provision promotion rewards (credits, free minutes, points, coupons, etc.). In this environment, campaigns are forever trapped in the limitations of segment-and-blast offer models. What are the characteristics of next generation marketing campaign solutions? We believe operators must embrace a new model of a real-time, 24x7 operational platform for promotions and campaign management. This platform listens for all the events in the network that reflect customer behaviour and then is able to trigger highly personalised and timely promotions that allow customers to communicate back to the platform about the offers. Our experience shows that marketing and product managers from different groups need the ability to launch a diverse array of promotions each month and to do so very quickly. Some promotions may have a very short lifespan, such as the duration of a sports or media event, and so being able to create, launch and run a promotion in a matter of hours or days is crucial. Furthermore, since marketing is constantly

innovating not just new offers, but entirely new promotion concepts, the solution must be fully configurable by business users and enable new loyalty concepts to be implemented rapidly without IT custom programming. Long expensive customisation projects are a real turn-off for operators, especially in the dynamic world of mobile promotions and marketing.

“The era for customer segment-andpromote campaigns has passed.”

The RateIntegration Loyalty Manager (RLM) is a next generation solution built around a core realtime engine which listens to all the events in the network and is able to trigger highly personalised and timely promotions based on this real-time profiling of customer behaviour. Here, promotions and new promotion concepts are actually created by the business users within marketing and do not require any IT programming, and this allows them to launch new promotions whenever required. Flexibility in processing data from any BSS source and feeding other systems, including partner systems, enables a very nimble solution that adapts to carrier’s individual requirements. To lower the barriers to adoption, RateIntegration offers RLM under a fully-managed cloud computing model. RLM-Cloud comes as a software as a service (SaaS) or pay as you grow model with the Cloud hosted off-site or inside the carrier data network as an “Intranet Cloud”. Setup is simple with users typically up and running within two weeks. RLM-Cloud includes a set of standard Promotion Packages. Each package contains a powerful set of ‘best in class’ promotion templates from around the world. Templates allow easy, immediate launch of promotions with no IT intervention so that marketing teams are empowered to control the schedule and speed of promotion launches. Examples include the Reload Package designed to stimulate the growth of prepaid customer re-loads or the Collections Package which focuses on driving early or ontime payment by postpaid subscribers. The RLMCloud also supports Loyalty Points, Vouchers and Coupons through additional modules. The RLM Dashboard is a web-based portal from which business users launch, monitor, report on and analyse their promotions. Analyst research and our customer experience indicate that the era for customer segment-andpromote campaigns has passed. Carriers need to turn to loyalty and campaign operational platforms that deliver timely, personalised and interactive promotions across multiple segments simultaneously. This next generation model has been proven to increase customer loyalty, new customer growth and revenues and new forms of revenue through mobile advertising and revenue through partners. VANILLAPLUS FEBRUARY 2010

L O YA LT Y

Get a fix on fickle prepaid users With no contract to bind them, prepaid customers can afford to be more fickle than postpaid subscribers and, with increasing percentages of the subscriber base in mature markets now composed of prepaid users, carriers need to address their loyalty more effectively. George Malim explores how operators can improve retention among prepaid users while meeting demand for services based on accurate subscriber profiling.

Humera Malik, Redknee: The key is how well you know your customers

Prepaid for many carriers is rapidly becoming the name of the game. Prepaid subscribers are set to account for 59% of mobile broadband connections in 2014, rising from 8% in 2008 according to analyst firm Analysys Mason. In the US, financial research firm Sanford Bernstein has reported that 80% of subscriber growth in the first quarter of 2009 was prepaid – up from 50% in the same quarter of the previous year. Whichever way you cut it, prepaid is here to stay and will remain dominant. Problem for postpaid models For mature European operators, who built their systems based on the premise that postpaid would dominate with prepaid only addressing those low value customers with poor credit ratings, that presents a significant problem. Existing systems in these types of carrier environment simply aren’t designed to cope with the demands prepaid users are now placing on them in new service requirements. In addition, the absence of subscriber data and marketing communications channels common to postpaid users means carriers have to adopt new ways of doing business to minimise prepaid customer churn and maximise loyalty.

Thomas Thekkethala, RateIntegration : Personalised messages increase likelihood of uptake

VANILLAPLUS FEBRUARY 2010

Thomas Thekkethala, Chief Executive at RateIntegration, agrees. “In the UK market, for example, there has been a gradual trend of prepaid adoption to the extent that is has eclipsed postpaid,” he says. “What’s interesting about that change is that most systems were put in place to support postpaid subscribers, so when the shift occurred the attempt was to service prepaid customers with systems primarily designed for the postpaid world.” Analytical advances The obvious way to attempt that has been for carriers to use advances in the analytical capabilities of software tools from companies such as SAP and Oracle to segment customers. That has enabled construction of user profiles based around relatively primitive data, such as location and demographics collected at the point of sale. “The key, at this level, is to know who your customers are, segment them by category and provide them with the services they need,” affirms Malik. However, segmentation goes only so far and carriers are recognising the need to evolve from mass market segmentation to more

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For Humera Malik, Director of product management, Redknee, it’s a well known issue. “I’ve worked in the North American carrier market which has historically one of the largest postpaid markets in the world,” she says. “It used to be 60:40 or 70:30 focused on postpaid and that’s why the back office is so focused on postpaid users. However, we now regularly engage with

high growth operators that have in excess of 95% of their subscribers prepaid. The key to success in those kinds of markets is how well you know your customers. Postpaid is easier because you have a point of contact on a regular basis, but for prepaid the challenge is to know the history and category of your users and model services to fit their needs.”

individualised loyalty efforts triggered in real-time by events. Thekkethala gives the example of a user in the UK who calls Malaysia fairly regularly. A carrier could identify this user and send them a message telling them it has improved its international call rates to Asia from the UK. It could then go further and make a specific offer to the user such as offering a call plan to Malaysia whereby, if a

users pays £2 (€2.29) they get a 50% discount. That would be a relevant and apparently personalised message, and the likelihood of uptake by the subscriber would be increased from that of a standard massmarket promotion. There are also other pro-active means to improve prepaid retention. Instead of waiting for a user to make no calls for several days before raising an alarm, systems should highlight if spend starts to fall so the carrier can intervene when the spend drops 25% or 50% rather than waiting for it to drop to zero – a classic indicator that the users has churned. Of course, at that point it is too late for the carrier to do anything about it. Go a stage further Thekkethala would like carriers to go a stage further and increase loyalty by making their prepaid users feel part of a group and highly valued, individually. “The classic technique is to observe when a user calls or SMSs various people and identify the top four not already on the carrier’s network that they call regularly,” he explains. “Then contact the user with an offer saying that as a gold

or platinum customer they are entitled to an offer not available in retail stores. And they can set up a network in which their friends and family can participate, which will give the users and his friends reduced call costs and incentivise the user. The key, of course, is to do this automatically.” Malik also sees that kind of approach as compelling. “If you have the right information you can offer relevant services and bundles to each user,” she says. “If you can offer an incentive it will drive loyalty.” However, others think the postpaid and prepaid schism isn’t such a big deal and carriers need to redefine how they communicate with customers regardless of subscriber type. Cato Rasmussen, Head of solutions strategy at Martin Dawes Systems, thinks " The ties with customers are fraying whether they are on contract or not, as users consume more and more data services and products from everyone but their operator.

Cato Rasmussen, Martin Dawes Systems: Data services (consumed) from everyone but their operator

“It is how the operators make themselves meaningful by providing a converged administration environment and easier to do business with, in the age of digital downloads, apps and content offered in an ‘open garden’ environment that will make the difference. This requires a change of " The ties with mindset among operators in order to find new revenue models as well as rethink how customers are they engage with any customer,” adds fraying whether Rasmussen. Rasmussen’s point makes sense, but it’s interesting to consider that carriers can make the investments Malik and Thekkethala discuss to address prepaid loyalty and those will also be applicable to the diminishing base of postpaid subscribers.

they are on contract or not.” -- Cato Rasmussen, Martin Dawes Systems

VANILLAPLUS FEBRUARY 2010

MARCH

WEBINAR

PREVIEW

Web Self-Service: The Challenges and Benefits of getting it right The Lead Speaker Ian Jones is Head of global strategic solutions at eGain Communications. His current focus is working with eGain customers to deliver Customer Service on mobile devices, and harvesting Social Knowledge sites to deliver enhanced service. He has specific expertise in developing customer service solutions for organisations in the telco sector in Europe, North America and Asia. Ian holds a BSc Honours degree in Physics from the UK's Imperial College, an MSc and an MBA.

Reasons to attend the webinar 1. Learn how you can reduce your average response time by 50% 2. Discover how to increase your first time fix rate 3. Determine what escalations channels you should offer 4. Find out why a “Search” tool on your website is not enough

Synopsis Against a background of rapidly converging technologies, providing high quality customer care is becoming increasingly difficult. Your customer care agents move from supporting simple devices to content-driven applications and multi-play services including broadband, mobile, fixed line and television. To ensure your organisation stays ahead, the adoption of web self-service offers supreme customer service and allows you to retain high-value customers whilst reducing and improving the average margin per user (AMPU). With web self-service customers can access instant support and problem resolution, 24x7, anywhere in the world, without the need to call queue or battle their way through an IVR system. Best of all, an excellent customer experience can reduce the call centre’s workload, at a fraction of the cost.

5. Understand how you can provide an As a customer service organisation, how can you intelligent Q&A dialogue reduce the average handling time in resolving a for problem resolution problem and increase the first time fix rate while at the same time, improving the customer experience? During this Webinar, by means of customer examples, eGain will discuss such questions, and illustrate how they have achieved this for leading telecommunications customers worldwide. For over 15 years, eGain has been enabling enterprise companies around the globe to provide superior web self-service experiences. eGain® SelfService™ enables organisations to offer web self-service through the industry's broadest set of information access methods including dynamic FAQs, search, browse, guided help, and chatbots. It also provides a seamless transition from self-service to agent-assisted service through a common platform for customer For more information on interaction and knowledge management. this Webinar go to: eGain has acquired vast experience in deploying www.vanillaplus.com/diary/ customer service systems to the Headquartered in Mountain View, California, eGain has an operating presence in 18 countries and serves more than 800 enterprise customers worldwide. To find out more about eGain, visit www.eGain.com or email telco@egain.com

VANILLAPLUS FEBRUARY 2010

telecommunications industry. During the Webinar we will look at the lifecycle for the adoption of a web self- service system. Starting with the business requirements, we identify and discuss some of the indicators that are typically found prior to the implementation of a web selfservice system. We conclude the webinar by reviewing a practical, staged approach to delivering a web self-service system, and highlight the problems, solutions and benefits achieved at each stage. The web self-service webinar will focus on the delivery of world class customer service by means of web self-service systems. It will address the hidden challenges it brings and present the pitfalls, considerations and best practice approach to deploying web self-service, and using customer examples, it will uncover the true value of self-service. About eGain eGain is the leading provider of multichannel customer service and knowledge management software solutions for in-house or on-demand deployment. Ranked highly in 2009 by leading analysts, Gartner Group and Forrester Research, eGain has become the preferred solution for many global and regional telecommunications companies. The eGain proposition assists your organisation to: • Improve the customer experience and increase their choice of interaction channels. • Increase call deflection rates through effective 24x7 self-service. • Reduce contact centre and supply chain operating costs. • Fully utilise your valuable knowledge assets across channels. • Harness the power of social networking to reach, support and influence your customers. Visit eGain at Mobile World Congress in Barcelona on 15-18 February, 2010 at Stand D58 in Hall 7 (The Apps Lounge).

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S E L F - S E R V I C E

B I L L I N G

W E B I N A R

Open systems for open, revenue-generating relationships Carriers are adapting to a market in which the formerly solid ground of the traditional supplier-customer relationship is eroding. They need to ensure their systems are open and able to support a new telecoms landscape, in which a customer can also be a channel and a partner for their services. A recent VanillaPlus webinar, supported by Comarch, explored what needs to be done to cultivate this potentially fertile new terrain and found there are substantial rewards to be reaped. George Malim reports. “The new model ... is exciting but is predicated on providing access to billing, self-care and support systems.” - Pawel Lamik, Comarch

Telecoms consultant, Alun Lewis, set the scene pointing out that until very recently, telecoms has been based on carriers having highly centralised control of their services and the comfort of incumbent national status. That scenario, said Lewis, is now long gone, but some carriers still cling to its residual comfort.

His colleague, Pawel Lamik, self-care and CRM Product Manager at Comarch, expanded on the theme; “The wall between carriers and enterprise customers is cracking and customers are more in charge,” he said. “Corporate customers demand more freedom from providers as well as just cost savings.”

“Service providers still seem to retain a naïve faith in the continuing integrity of their state, despite the earth’s crust shifting under their feet,” he said. “Billing, customer services and operations and service support must improve to enable carriers to let go of the need to control the entire value chain and allow them to become the enabler of third parties. Revenue streams are no longer a two dimensional, oneway street and it is vital that service providers partner quickly and effectively with new entities who add both value and cashflow.”

Kwiatkowski then gave the example of service provider 6G Mobile. The provider’s model is based on cheap roaming and voice over data. The company doesn’t have its own network and operates using resellers. “They outsource almost everything,” said Kwiatkowski.

Krzysztof Kwiatkowski, billing systems Product Manager, Comarch, then spoke about how the customer relationship and the roles of customers are changing. “Opening up billing through self-service gives the opportunity to work more collaboratively,” he said. “Customers may now look like a carrier and carriers may look like a customer.”

OnePhone customers commit to having a set number of users on its network.

VANILLAPLUS FEBRUARY 2010

Multi-directional model What is significant in this example is its multidirectional business model. “An MNO providing service to 6G Mobile could, for example, be a reseller of 6G Mobile and can resell its own services using 6G Mobile’s model,” added Kwiatkowski. “The boundaries between customers and providers are blurred even more.” Customer is a reseller Lamik provided another example. OnePhone, a provider of femtocell-based services to the German SME sector, requires its customers to commit to having a set number of users on its network. And it allows them to effectively sign up additional customers from other companies that, for example, operate in the same location to meet that commitment. In this example, the customer effectively becomes a reseller. “Companies can group together to take advantage of the services and share new services, such as attendance services, that might have been out of the price range of a single small company,” Lamik said. That type of model is clearly exciting since it allows the service provider to gain additional customers without having to make a specific sales effort. Instead, it uses its customers to increase its customer base and its customers are delighted because they’re getting better services at keener prices. That’s the new model for telecoms providers, it is an exciting one but it is predicated on providing access to billing, self-care and associated support systems.

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LT E

V I D E O

I N T E R V I E W

–

P R E V I E W

Long-Term Evolution in technology, shortterm in customer experience We are delighted to announce that the new VanillaPlus web portal (www.vanillaplus.com) is being unveiled at Mobile World Congress in Barcelona. A regular feature of the new site will be a series of video interviews, the first of which – with David Churchill, Vice President and General Manager of Agilent’s Network Solutions Division – will appear online later this month. Here, he gives you a sneak preview of Agilent’s work in LTE. The world is a very different place than just a few years ago – or at least, our access to it is radically different, which has changed the world itself. With iPhones and smartphones, we have the planet in the palm of our hand – our loved ones, entertainment, shopping, maps, restaurant reservations.

Agilent’s David Churchill will be interviewed online at www.vanillaplus .com

For many people mobile phones are hardly just for talking. Phones are where we live much of our lives: where we text, tweet, write on each others’ walls, game, bank, read, organise our days. I say “many of us,” but soon there will be many, many more. In 2008, 288 million people used smartphones; that figure is expected to jump to a billion in five years. Only 45% of smartphone usage is voice; the rest is data. This is possible because smartphones now have the computing power that PCs enjoyed in 2001, and because of innovations in high-bandwidth technology, the latest of which is Long-Term Evolution (LTE) to 4th generation networks.

“The move to LTE must be matched by an evolution in CEM.”

LSTI = LTE System architecture evolution Trial Initiative (3GPP) 52

The transformation of our social framework and the massive data growth represents an unprecedented revenue opportunity for carriers as long as they do two things: pay rapt attention to customer experience and change the flat-rate billing model. We take it for granted that our “always on” mobile internet will work. If it doesn’t, we’ll take our business somewhere else. In today’s billing environment, as traffic explodes, revenue-per-bit plummets. Even if you increase market share, a lot of that will merely offset the decline in per-bit revenue. The “all-you-can-eat” system is unsustainable, especially since iPhones and smartphones consume 30 times more bandwidth than normal phones. Yet if carriers peg charges to bandwidth, customer experience becomes more important than ever. Many customers will only accept the higher charges if the services are extremely well suited to their needs and if service quality is

VANILLAPLUS FEBRUARY 2010

high. Otherwise, they may simply quit using the services or change providers. Studies show that customers are more loyal to handset brands than carriers. So the move to LTE must be matched by an evolution in customer experience management (CEM). Managing customer experience within LTE I believe the key to successful CEM in a complex, high-volume LTE network is comprehensive, integrated test and monitoring across the network’s entire lifecycle. Here’s what you should ask yourself when evaluating an LTE test and monitoring vendor: • Does the vendor have a breadth of experience in LTE? Has the company displayed global leadership in all aspects of the technology from the beginning, and has it been an active participant in the standards body LSTI? • Do the vendor’s solutions cover both LTE user and signalling data? Solutions for each will be more effective if the vendor understands the relation between the two. • Does the vendor provide integrated solutions that cover LTE network signalling and services from end-to-end? Can drive test systems, for example, hand off information to signalling analysers, and signalling analysers to assurance solutions? • Do the vendor’s solutions separate actionable information from the noise? Approximately 80% of the data captured is never analysed. In a high-volume LTE environment, systems should simply count successful transactions; store code text before, during and after problematic events; and enable users to export relevant information to external systems. • Are the solutions scalable? LTE traffic will increase quickly and exponentially. You should answer each of these questions satisfactorily before selecting a vendor. LTE is the future, and given the volume, complexity and diversity of LTE networks and services, carriers can easily fail at the decisive level of customer experience. This is not a failure they can survive.

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C L O C K I N G

O F F !

Taxing times for UK broadband Not content with announcing plans to sell off taxpayer-owned national assets such as river crossings, the postal service and parts of the country’s ports and road network, the UK government has decided to go ahead with plans for a ‘broadband tax’. Our leaders reckon that by charging a 50 pence (€0.56) per month levy on each landline telephone connection it will scrape together a £1 billion (€1.11 bn) fund to ensure 90% of the country is connected to superfast broadband by 2017.

The author is freelance writer, George Malim.

“The company behind service provider TalkTalk, branded the move ‘regressive’. -- George Malim

This scrabbling for coins down the back of the sofa approach has many flaws and places the UK out of step with other countries that have recognised the need for government intervention in order to ensure the widest possible access to broadband. I’ve just returned from a trip to New Zealand where its government, in common with those of Singapore, France and Australia to name just a few, has committed itself to investing in a nationwide fibre-optic network. Those initiatives seem to me to be the normal, lucid way in which infrastructure is constructed. The cost of broadband roll-out and the limited returns offered in areas of low population density preclude commercial organisations making such investments, but that surely should be the point at which government steps in to make the long-term investment required, recouping the cost of construction over the life of the network through billing its users. The UK government has instead decided to

require its citizens to pay before, during and after construction of the network and even then 10% of the population won’t be covered. Doubtless the network itself will be sold off shortly after completion, most likely for 10% of its build cost, to someone that knows someone in the corridors of power. SMEs bearing the brunt That inevitability aside, I have three key issues with the levy. The first is that although, even to an impoverished journalist, 50p a month isn’t a big deal and a sum I’d willingly pay for a well run, nationwide, super fast network, I have just one line, others have many. For instance, an SME (small to medium-size enterprise) with 3,000 lines will incur an additional £18,000 (€20,000) of telecoms expense each year and is being asked to bear the brunt of the expense. The second issue is that it is those with landlines that are being forced to make the investment. It is well known that many of the savviest – high bandwidth – Internet users, teenagers for example, don’t have landlines and consequently won’t be contributing to the investment in the new network. Finally, as wireless city projects start to come to the fore there may well be regional, local and community solutions to the problem as local councils and businesses establish networks for local users. The technology is there, it is cheap and available and I’m not convinced of the need for a monolithic, traditional network funded by taxation. Ultimately, for my £6 per annum, I’d like to know what discount I could get as a shareholder of the new network. Although apparently it won’t work like that! Thankfully, it’s not a ‘done deal’ yet. We have a general election coming in the next few months and the opposition is against the idea. Meanwhile, the chorus of disapproval continues with Carphone Warehouse, the company behind service provider TalkTalk, branding the move ‘regressive’.

VANILLAPLUS FEBRUARY 2010

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