VanillaPlus Magazine Feb-Mar 2011 by Prestige Media

FEBRUARY/MARCH 2011

V O L U M E

PROFITS

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C O M M U N I C AT I O N

TALKING HEADS

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SERVICE

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DRIVING

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2 SU PO 0 PP LIC PA G IN LE Y 2 E SI M .0 D EN E T

Ericsson Billing and Customer Care chief says OSS/BSS needs flexibility to adapt whatever the business model

INTEC ACQUISITION CSG president tells us why

APPLICATION PERFORMANCE MANAGEMENT Avoid the cloud burst

BUSINESS INTELLIGENCE Do you understand your customers?

CONVERGENT BILLING Is hybrid billing the answer?

REVENUE MANAGEMENT Exploit your assets properly

PRICING How to stand up to Apple

PLUS! News • Comment • The Contract Hot List Revenue Management • Event previews • Clocking Off!

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13 TALKING HEADS Christoffer Andersson, managing vice president of Ericsson’s Billing and Customer Care Solution Area

IN THIS ISSUE EDITOR’S COMMENT What hasn’t changed is change itself.

NEWS Company, Product and Contract News plus the People News column.

CONTRACT HOT LIST Major contracts awarded globally and the latest product news.

TALKING HEADS Christoffer Andersson, managing vice president of Ericsson’s Billing and Customer Care Solution Area, formerly the LHS Group, tells VanillaPlus how the company plans to develop now it is fully-integrated within Ericsson

EXPERT OPINION: CSG SYSTEMS’ INTEC ACQUISITION 16 Peter Kalan, president and CEO of CSG Sytems, tells VanillaPlus his reasons for buying Intec.

19 APPLICATION PERFORMANCE MANAGEMENT

24 ACHIEVING THE PERSONAL TOUCH

28 PERSONAL DATA BECOMES A TRADEABLE COMMODITY Ericsson is the world's leading provider of technology and services to telecom operators. Ericsson is the leader in 2G, 3G and 4G mobile technologies, and provides support for networks with over 2 billion subscribers and has the leading position in managed services. The company's portfolio comprises mobile and fixed network infrastructure, telecom services, software, broadband and multimedia solutions for operators, enterprises and the media industry. The Sony Ericsson and ST-Ericsson joint ventures provide consumers with feature-rich personal mobile devices. Ericsson is advancing its vision of being the 'prime driver in an all-communicating world' through innovation, technology, and sustainable business solutions. Working in 175 countries, more than 80,000 employees generated revenue of SEK 206.5 billion (US$ 27.1 billion) in 2009. Founded in 1876 with the headquarters in Stockholm, Sweden, Ericsson is listed on NASDAQ OMX, Stockholm and NASDAQ New York. For more information visit www.ericsson.com

EXPERT OPINION: SMS DELIVERY Joel Fisher reports on a win-win scenario for operators, regulators and content providers.

APPLICATION PERFORMANCE MANAGEMENT Gareth Kershaw investigates how operators could find the cloud a very different operating environment.

EXPERT OPINION: PERFORMANCE MANAGEMENT Ranga Thittai explores how operators should prepare to support M2M applications.

EXPERT OPINION: BUSINESS INTELLIGENCE Intelligence still isn’t effectively applied, write Michal Fridman and Jeff Stern.

ACHIEVING THE PERSONAL TOUCH Mark Dye reports on the quest to achieve efficiencies and cost savings throughout the customer lifecycle.

EXPERT OPINION: CUSTOMER INTELLIGENCE Rani Goel assesses how customer intelligence is preparing for the always-on, 4.0 world.

PERSONAL DATA BECOMES A TRADEABLE COMMODITY Gordon Rawling says operators have an opportunity to build on the trust that already exists between them and their customers.

EXPERT OPINION: SOCIAL MEDIA The technology industry has yet to focus on next generation users, says Corina Bulucea.

HYBRID MODELS TO SETTLE PRE-PAID VS. POST-PAID DEBATE? Adopting a hybrid model is the move of the moment, argues Jonny Evans.

EXPERT OPINION: CONVERGENT BILLING Dave Labuda explains how operators can make convergent billing problems history.

EXPLOIT YOUR ASSETS PROPERLY Alun Lewis says operators must utilise the customer intelligence they already have.

EXPERT OPINION: FRAUD MANAGEMENT 35 Adrian Harris explores whether integrating fraud and revenue assurance was the right move. EXPERT OPINION: BUSINESS ENABLEMENT IN BSS Drew Rockwell examines how new business enablement models in BSS could help CSPs reduce their costs.

HOW PROVIDERS CAN STAND UP TO APPLE AND CO Differentiated brands and offers are crucial, says Dr Ekkehard Stadie.

EVENT PREVIEWS Where to go and what to see!

CLOCKING OFF! Mark Dye wonders why sorry still seems to be the hardest word when it comes to customer service.

VANILLAPLUS FEBRUARY/MARCH 2011

EDITORIAL ADVISORS

What hasn’t changed is change Long time readers of VanillaPlus may recognise the picture above this column. I first edited VanillaPlus between 2001 and 2005 and it’s great to be back in the editor’s chair. Many things have changed since my first stint but some things have George Malim, remained the same. CSG Systems, for example, purchased Editor: VanillaPlus Lucent Technologies’ Kenan billing operation early in my tenure and, in late 2010, it again made an acquisition of a billing vendor, this time of Intec. On page 16, Peter Kalan, CSG’s president and CEO, explains why, this time, he expects his latest acquisition to be more successful than the Kenan purchase. The twists and turn of acquisition are evident elsewhere in this issue. We feature a Talking Heads interview with Christoffer Andersson, the managing vice president of Ericsson’s Billing and Customer Care Solution Area. This was formerly the LHS Group which, in the last decade, was acquired by Sema, became part of Schlumberger, regained its independence and, in 2007, was acquired by Ericsson. Andersson reports that LHS is now fully integrated into Ericsson and outlines his plans on page 13. Andersson also describes how the industry has changed. In the first half of the last decade, operator concern was about attracting users to mobile data networks and working out how to survive in the aftermath of the dot.com bubble bursting. The search for the killer app was seemingly endless yet now we have arrived at a stage where the killer app turned out to be a retail environment of multiple apps. Mobile data consumption by users is causing operators, which now call themselves service providers, to radically rethink their strategies. Some will even take themselves out of the battle for a share of the digital value chain and confine themselves to being providers of network capacity. That’s called the dumb pipe strategy, but Andersson makes the point that being dumb can be clever for many operators. “There is nothing dumb about creating shareholder value,” he says. He is, course, absolutely correct and that’s a point that’s easy to forget in the excitement of technical and service innovation and the hubbub of events like Mobile World Congress. So, in my new old job, a lot has changed while some things have remained the same. I look forward to renewing old discussions and starting new ones.

John Aalbers, chief executive, Volubill

Dan Baker, Research Director, Technology Research Institute

Martin Creaner, president, TM Forum

Andreas Freund, VP Marketing, Orga Systems GmbH

Louis Hall, chief executive, Cerillion Technologies

Barbara Lancaster, president, LTC International

Gaby Matsliach, general manager, BSS Product Line, Comverse

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

Simon Muderack, COO, Tribold

Olivier Suard, Marketing Director, Comptel

Mac Taylor, CEO, The Moriana Group

Chris Yeadon, director of Product Marketing, LHS

Doug Zone, chief technology officer, MetraTech

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

Enjoy the magazine George Malim EDITOR George Malim Tel: +44 (0) 0208 292 4036 george@vanillaplus.com ASSOCIATE EDITOR Mark Dye Tel: +44 (0) 0208 251 8908 md@vanillaplus.com DIGITAL EDITOR Nathalie Bisnar Tel: +44 (0) 1732 808690 nathalie@vanillaplus.com

BUSINESS DEVELOPMENT DIRECTOR Cherisse Draper Tel: +44 (0) 1732 897646 cherisse@vanillaplus.com BUSINESS DEVELOPMENT MANAGER Mark Bridges Tel: +44 (0) 1732 897645 mark@vanillaplus.com

VANILLAPLUS FEBRUARY/MARCH 2011

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

DESIGN Jason Appleby Ark Design Consultancy Ltd Tel: +44 (0) 1787 881623

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Hybrid billing addresses operator need for recurring revenues but poses OSS/BSS challenge Almost half of all mobile operators see the need to make changes to their BSS in order to support changing prepaid strategies. Recent research commissioned by Amdocs from analyst firm, Ovum, reports The hybrid model is a that 47% of operators great way to expect to make educate changes to their BSS prepaid users with inability to to postpaid support accelerated behaviour time to market of new offerings cited most frequently as the greatest technical challenge facing current systems and architectures. The prepaid subscriber base continues to grow and operators are starting to shift away from their earlier strategy of attempting to migrate prepaid users to postpaid as users, especially in Asian markets, resolutely stick with prepaid. Instead, operators are now delivering advanced services and handsets to prepaid users and providing a similar experience to that delivered to postpaid users. That, in turn, is leading to increased incidence of hybrid billing, which sees prepaid users pay for a component of their service on a monthly basis, topping up when they reach the limit of their prepaid allowance.

That goes some way in addressing operators’ need to attract predictable repeat revenues but also gives prepaid customers the traditional comforts of cost control. 63% of operators now offer some sort of hybrid model and Guy Hilton, product marketing manager of Amdocs, sees that trend continuing. “The logic is that operators want recurring, predictable revenues from practically everyone on their network and the hybrid model is a great way to educate prepaid users to postpaid behaviour,” he said. “In the long run, hybrid billing is a way of getting users to become more postpaid but operators probably won’t be able to reduce the percentage of their users that want to remain prepaid.” Hilton also points out that the traditional demarcation between prepaid and postpaid users is eroding as even postpaid users now use some form of real-time charging to pay for additional services. A postpaid customer that wants to access a burst of additional bandwidth, for example, may elect to be charged for that in real-time. “The hybrid model works both ways,” added Hilton. “There are BSS implications of real-time charging for postpaid and well as prepaid users. Convergent billing and charging systems seem the most likely way to address the direct impact that hybrid billing will have on operators back end billing and OSS systems.”

‘How to Manage Content, Revenues and Partnerships’ special report published by VanillaPlus and Intec With overall mobile revenues declining for the first time in 2010/2011 the effective management of content revenues and partnerships has never been more important for communications service providers as they seek to offset the effects of commiditising voice revenues. ARPU has been in decline for some time a new report by VanillaPlus, analyst firm Moriana Group and Intec has now been published to explore the issues operators face and how they can be overcome in greater depth.

The report uncovers that 62% of operators feel that within five years it is very likely that they will become relegated to the role of a bit pipe and consequently they need to add value by enabling differentiation and personalisation as well as proving an attractive ecosystem of content and services. The full report, which includes a case study, further statistics and analysis is available now FREE here http://www.vanillaplus.com/knowledge_c entre/how_to_manage_content_revenue s_and_partnerships

N E W S U P D AT E

VanillaPlus publishers launch M2M Now magazine Prestige Media Ltd (PML), VanillaPlus’s parent company, has launched a brand new magazine, M2M Now, serving the rapidly-developing global market for connected devices and machine-tomachine communications. Former VanillaPlus Editor, Jeremy Cowan, is to take on the role of Launch Editor of M2M Now, with immediate effect. Cowan retains his role as Editorial Director and Publisher of PML. The commercial side of VanillaPlus will continue to be overseen by PML’s Business Development Director, Cherisse Draper, with day-to-day management now taken on by Mark Bridges. With a decade’s experience of developing print and online information resources for the telecoms market, Cherisse Draper is ideally qualified to take on the role of managing the commercial side of M2M Now’s launch. She said: “The early response from the market to the launch of M2M Now has exceeded all our expectations. There is an evident need for an independent magazine covering M2M technology and business worldwide, with the first issue timed to appear at Mobile World Congress 2011 in Barcelona. We look forward to informing a wide range of industries about the service and cost benefits of connected devices.”

RateIntegration rebrands as Sixth Sense Media RateIntegration, a provider of customer loyalty and campaign management solutions, has rebranded its business as Sixth Sense Media. The rebranding is part of a company-wide strategic shift to focus squarely in the growing mobile marketing, advertising, and commerce marketplace. “Sixth Sense Media’s core strengths stem from our rating and billing solutions that have the ability to process high volumes of transactions, compare these against customer profile data and apply complex and dynamic business rules to deliver specific outputs, all in real time,” said Thomas Thekkethala, President and CEO of Sixth Sense Media.

VANILLAPLUS FEBRUARY/MARCH 2011

NEWS IN BRIEF

MDA Delivers new visualisation capabilities MDA has announced the release of the Lavastorm Analytic Engine (LAE) 4.5, a new offering that includes enhancements to its existing visualisation capabilities. LAE 4.5 addresses an acute market need for enterprises that require full visibility and analysis into complex and often opaque data and logic-intense business operations. Without advanced visualisation capabilities, such as those found in LAE 4.5, some processes become too expensive or simply too hard to address, said the company. “Our customers are aggressively increasing their investment and focus on process analytics to both de-risk operations and harness business processes for competitive advantage. They have been unanimous that visualisation is a critical capability in process discovery, collaboration, analytic development and analytic reporting,” said Drew Rockwell, CEO of MDA.

JDSU introduces all-in-one test tool for broadband networks and services JDSU has launched a fieldinterchangeable, single-slot optical time domain reflectometer (OTDR) module for the T-BERD/MTS-4000 platform. The module supports costeffective deployment and support of metro and FTTx networks by combining OTDR, power meter and laser source capabilities in a single instrument. The metro-access (MA) mid-range OTDR adds important performance benefits. “JDSU continues to bring to market innovative fiber field test solutions that meet the performance requirements of FTTx, CWDM and triple play services being deployed worldwide,” said Enzo di Luigi, general manager in JDSU’s Communications Test and Measurement unit.

SAP launches Billing for Telecommunications package SAP has introduced its Billing for Telecommunications package, an integrated solution designed to cover the widespread demands and service portfolios of communications service providers. Within the package, individual SAP offerings for rating, charging, invoicing and financial management are combined for the first time on a flexible billing platform, offered in conjunction with analytics and a broad-based value management programme. Building on the acquisitions of software companies Highdeal and Sybase, SAP claims the package will deliver improved capability for operators to launch and monetise nextgeneration service offerings.

customers with services previously invoiced separately from multiple billing systems for wireless, Internet and television services. “With SAP Convergent Invoicing, we transformed our billing environment to deliver a single, easy-tounderstand bill to our customers – faster and cheaper than many other telecommunications companies in North America,” said Doug Pelland, director, solution management at MTS Allstream. Jens Amail, senior vice president, Telecommunications, SAP, added “SAP Billing for Telecommunicationsmarks a serious commitment by SAP to totally revitalize the way billing is conducted in the telecommunications industry. We have gone beyond the traditional parameters of existing billing solutions to create something that adds real business value for communications service providers — addressing operational challenges today and enabling new business models in the digital economy.”

SAP customer, MTS Allstream, a Canadian communication solutions company with over two million customers, recently deployed the SAP Convergent Invoicing package, one of several solutions components within SAP Billing for Telecommunications. MTS Allstream can now generate single invoices for

Intec Announces new Charging and Policy product Intec, recently acquired by CSG Systems, has launched Intec Charging and Policy, a solution designed expressly for the dynamic requirements of real-time charging and policy management to support voice, data and content transactions for all types of nextgeneration mobile networks.

solution, we provide a complete portfolio of the most important charging and policy capabilities.” Smartphones are becoming ever more prevalent, with recent statistics from Gartner reporting a doubling in the number of units sold year over year. Smartphones are radically altering the way mobile services are delivered, priced and managed. Operators are dealing with a diverse subscriber community that expects unlimited freedom in how they use their devices, what services they choose, and when and where. This subscriber freedom challenges the operators' need to manage scarce network resources, and if left unfettered, it will erode the operators’ profits and also limit their opportunities to benefit from new revenue streams, and erase opportunities for financial gains and erode profits.

Intec Charging and Policy is comprised of the Singl.eView Commerce Engine and a 3GPP compliant Policy Charging Rules Function (PCRF), to equip operators with a complete solution for all essential charging and policy features. The solution bundles both products and deployment services, is delivered in a 3GPP compliant architecture on a low-cost, scalable Linux x86 hardware platform and enables the integrated functions that operators need to deliver and monetise the breadth of voice and data services that today’s subscribers demand.

“With this pre-packaged solution, Intec has captured what operators are looking for, and what subscribers need,” said Peter Mottishaw, principal analyst from analyst firm Analysys Mason.

“Intec Charging and Policy alters how realtime charging and policy solutions are delivered and managed,” said David Heaps, senior vice president of corporate strategy at Intec. “With our in-the-box

VANILLAPLUS FEBRUARY/MARCH 2011

NEWS IN BRIEF

InfoVista completes mobile services management platform with Mobile Knowledge Pack InfoVista has announced the completion of its fully integrated end-to-end mobile assurance platform with the availability of version 3.0 of its Mobile Knowledge Pack. A substantial release, this new comprehensive version allows for realtime monitoring and reporting of every infrastructure entity along the service delivery path – from the data centre and mobile packet core, to the IP/MPLS backbone and the backhaul and extending support to radio access network (RAN) equipment. In addition, it assures the performance of mobile voice and data services with the ability to view end-user quality of experience on a per-subscriber basis from one toolset.

will offer a common network and application reporting environment that contributes to consolidation and rationalisation efforts as a means to broaden the gap between expenditures and revenues of mobile services.” Vikas Trehan, senior vice president of the network performance management business line for InfoVista, added: “InfoVista is very excited to bring to completion its end-to-end value proposition for mobile operators looking to solve the real challenges that are inherent in the mobile data explosion and industry-wide focus on customer experience. When you couple these expanded capabilities with our Vista360 operational dashboard, we are proud to offer the market an off-the-shelf, multidomain, multi-vendor network and application performance management capability that will have a big impact on a mobile operator’s ability to manage both service quality and the user experience.”

“With the expected increases of real-time mobile traffic and demand for videocentric services, mobile operators have recognised that operational support for end-to-end quality of experience needs to be enhanced,” said Shira Levine, directing analyst at Infonetics Research. “These operators are looking for solutions that

CTI Group launches Proteus Mobile to rein in wireless expenditure CTI Group has launched Proteus Mobile, a call accounting tool engineered to monitor and report on SMS, MMS, data usage and standard voice traffic on any mobile handset or 3G device. Its series of standard and bespoke reports are designed to highlight specific usage patterns allowing businesses to identify its highest data, voice and roaming users. In a recent study by analysts Gartner, it was found that organisations could save up to 35% on wireless costs by 2015 simply through closer management of their wireless services.

Lee Essex, product manager for CTI Group, commented: “Across all industries, it is becoming standard for business to be conducted on mobile 3G devices such as smartphones and tablet PCs. As a result, a number of organisations have seen their communications bills rocket due to large data transfers, international phone calls and unmonitored roaming charges. With CTI’s Proteus Mobile, organisations will be able to analyse all mobile usage and costs, which will empower them to implement policies and strategies that will help eliminate any unnecessary and costly wireless expenditure. Even something as simple as identifying personal use of a corporate mobile device, and allocating those costs back to the employee, can immediately save a business a significant amount of money.”

Further research revealed that wireless costs have now exceeded traditional landline systems and that the majority of organisations leave mobile purchasing decisions to the employee while still paying for 100% of the bill.

Convergys launches Smart Rating and Billing Manager 5.0 Convergys Corporation has announced the worldwide availability of its Smart Rating and Billing Manager 5.0, which provides communications and utilities companies with advanced credit management and is part of Convergys Smart Suite of BSS Solutions. Convergys has enhanced Smart Rating and Billing Manager 5.0 so that customers can set servicespecific cost restrictions for usage to combat unexpected charges, or set individual credit limits for organization or family groups on a single billing account. Operators and providers can benefit from accounting improvements that help clearly identify profitable services. The real-time capability of Smart Rating and Billing Manager 5.0 enables operators and providers to pay tax when the service is consumed as opposed to the date of the bill, helping ensure improved cash flow. “Communications and utilities providers are facing tough market pressures. Squeezed margins, increased competition from new entrants, pressure to move into new business models, and the emergence of new technologies, such as the smart grid, are challenging the way providers drive revenue,” says Bob Lento, president, Convergys Smart Revenue Solutions. “We develop our solutions with these influences in mind and the Convergys Smart Rating and Billing Manager 5.0, the cornerstone of the Convergys Smart Suite, can help providers take on and overcome current market challenges, helping companies to retain and grow their customer base, but also helping meet new pressures that providers will face in the future.”

VANILLAPLUS FEBRUARY/MARCH 2011

Join us for... MANAGEMENT

WORLD

MAY 23-26, 2011 | THE CONVENTION CENTER DUBLIN, IRELAND

Industry heavy-hitters to speak at Management World 2011 Join them and other key players as they unwrap the who, what and how of communications enabling digital life. Speakers include:

Olivier Baujard, CTO, Deutsche Telekom

Steffen Roehn, CIO, S Deutsche Telekom

Ben Verwaayen, CEO, Alcatel-Lucent

David Gurle, GM & VP D Skype Enterprise, Skype

Kevin Peters, CMO, AT&T

Stephen Shurrock, CEO, O2 Ireland

Erik Hoving, CEO, NetCo Member of the Board, KPN International

R Rajeev Suri, CEO, NSN

To get register or learn more, visit www.tmforum.org/mw2011VP

NEWS IN BRIEF

MACH wholesale roaming deployed at Swisscom

Talkmobile selects Cerillion managed service in five-year deal for convergent CRM and billing Cerillion Technologies has announced a new contract to supply its convergent CRM and billing solution to Talkmobile, a division of The Carphone Warehouse and part of Best Buy Europe, to support its MVNO Louis Hall, CEO, activities in the UK. Cerillion Under the terms of the five-year agreement, Cerillion will host and operate the system as a managed service and provide migration from Talkmobile’s legacy systems.

new services. Also key to the selection were Cerillion’s API layer and the thinclient CRM interface, enabling easy integration with Talkmobile’s IT systems and low impact deployment to its call centres. “By working with Cerillion we are able to deliver a great customer experience to our current and future customers,” said Paul Layte, managing director, Talkmobile. “Cerillion has understood our key project goals and I am confident we have chosen the right partner to help us grow our business.” Louis Hall, CEO, Cerillion, added: “I am delighted to announce another key win for our managed service. Talkmobile is one of a new breed of innovative MVNOs and a growing force in the UK telecoms sector, and I look forward to a long and successful partnership.”

Following a thorough and intensive selection process, Talkmobile selected Cerillion due to its track record of delivering MVNO solutions and proven time-to-market advantage for launching

Ukranian operator life:) prepares for 4G with Orga Systems NGCP Next Generation Control Point Ukranian mobile operator life:), which provides 249 commercial products in the country’s competitive market, has implemented a real-time charging, active mediation and policy control solution from Orga Systems. The installation of the system, called Next Generation Control Point (NGCP), was completed in less than four weeks and life:) has been using the unified platform to charge all its subscribers since it went live in November 2010.

more than 300%. By integrating real-time charging flow between the network and billing system, the NGCP performs subscriber specific policy and charging decisions as well as real-time subscriber notifications. Other benefits include flexible system configuration and support of a Subscriber Profile Repository for policing and autonomous charging. Since the NGCP launch, customer complaints on GPRS charging have decreased significantly, reports the vendor.

The NGCP, which supports 3G and 4G technologies through billing infrastructure, serves all the value-added services platforms of life:) and the operator has not had to invest intensively in billing hardware. Orga Systems claims the platform delivers performance increases of

life:) focuses on value added services while promoting greater levels of competition in the Ukrainian market with its customercentric offers and, with the UMTS license tender expected in Ukraine this year, the operator’s adoption of the system suggests it is preparing its back office to support 4G.

MACH has reported that Swisscom has implemented its Wholesale Roaming solution. Combining MACH’s data clearing, financial clearing and settlement services, the system is intended to deliver optimised cash flow, reduced revenue leakage and accelerated financial clearing and settlement for Swisscom’s roaming business, while slashing the time to market for new advanced roaming services. Tommy Bertling, senior marketing manager, Pricing and Roaming, at Swisscom commented: “The MACH Wholesale Roaming Solution is about simplicity. We have one point of contact to deal with, one settlement payment each month and one portal which delivers full transparency. We have estimated that outsourcing our financial clearing and settlement to MACH costs three times less than if we maintained the same operations in-house – and I estimate the figure is similar for data clearing. If we were to replicate the work MACH does for us we would need to set up over 600 agreements with each of our preferred partners across the globe – this is far too much to do for any operator and would stop us from concentrating on what we do best.” Redknee wins tier-one MVNO contracts Redknee has signed multiple mobile virtual network operator (MVNO) deals in APAC, EMEA and the Americas. Although, the customers are unnamed, the company’s chief executive, Lucas Skoczkowski claims they demonstrate the appeal of RedKnee’s portfolio to MVNOs, a market he is targeting. These are strategic transactions that we believe will enable us to build significant market share in both Tier 1 and 2 operators over coming years.” said Skoczkowski.

VANILLAPLUS FEBRUARY/MARCH 2011

Welcome to our regular Jobs column, brought to you by Kineticom, sponsors of People News

Acision appoints Ericsson’s Nilsson as new chief operating officer Jorgen Nilsson is to join Acision as chief operating officer. Nilsson brings more than 30 years’ experience working in senior sales positions at blue chip companies such as Ericsson and Compaq. He now assumes responsibility for Acision’s worldwide sales and operations organisation and will be instrumental in driving growth in the mobile data market for the business. Having spent more than ten years at Ericsson in executive and vice presidential roles, Nilsson’s most recent position was executive vice president and general manager of Ericsson’s Vodafone Global Customer Unit, driving significant change and operational improvements through Ericsson’s global sales, marketing, technology and operational teams. Nilsson previously spent a decade at Compaq, where he held various executive sales, marketing and operational roles. In addition, Nilsson also held several managerial roles at Swedish operator Telia, now part of the TeliaSonera Group. “With an impressive history and esteemed reputation in driving operational excellence and building powerful sales and customer relationship strategies, Jorgen will be a central part of the Acision executive team and an invaluable asset to the company,” said Rory Buckley, chief executive of Acision. “Jorgen’s innovative approach, high profile and level of expertise in the communications industry will help us grow the company and is a significant hire as we build on our position as a world leader in mobile data.” Nilsson added: “I'm delighted to join Acision's management team at this very exciting time and be an instrumental part of driving the company's strategic initiatives forward. As mobile data traffic increases globally, we have a huge opportunity and I look forward to working with the team to aggressively and systematically develop and exploit the mobile data market to help our customers be successful.”

Bradley Palmer joins Easynet as chief financial officer

Bradley Palmer

Easynet Global Services has appointed Bradley Palmer as group chief financial officer. Palmer had previously carried out various operations management and finance roles at Unilever and Energis, where he played a leading role its sale to Cable & Wireless in 2005. As operators seek to attract executives with experience outside the industry and the CFO role increases in importance, the breadth of Palmer’s mainstream business experience looks to have been a significant factor in Easynet’s decision to appoint him. Palmer also served as finance director of HSS Tool Hire after its private equity backed acquisition in 2007.

David Rowe, Easynet’s chief executive, said: “We are delighted to welcome Brad following our separation from Sky and return to independence. Brad comes with a wealth of experience in finance and telecoms and will add to the strength of our board as well as the execution credentials of our management team.” Palmer’s appointment follows Easynet’s announcement last November of five executives to it’s board. Those appointed included; Richard Atkins, Hanif Lalani, Patrick de Smedt, Daniel Sasaki, and Patrick Sellers.

VANILLAPLUS FEBRUARY/MARCH 2011

Time really does fly It is incredible how quickly it seems that the Mobile World Congress comes around each year. Many of the candidates the Kineticom team meet realise, whilst reflecting on their working lives, how fast their careers have moved on – or how long they have stood still). People Jason Bandy are often baffled as to how they ever ended up working in a particular location, role or company for as long as they have. Does that resonate with you? Career planning, and sticking to the plan, is undoubtedly difficult. The demands of everyday life soon take over and before you know it, you’ve been at the same desk for five years. I’m fascinated to see what new technology will be presented at MWC and the chance to catch up with old and recent contacts is always a joy. I’m keen to hear opinions as to where the skill shortages are and which talent needs the various vendors, operators and systems integrators expect to face in 2011. I’ve mentioned in previous Vanilla Plus editions that despite global economic uncertainty and some uncomfortable unemployment figures, we expect to see far more telecoms/OSS professionals moving companies in 2011, than we have for several years. The need for operators to improve their network capability and develop the associated OSS/BSS environment is creating significant talent demand. Some examples: We see very strong demand for experienced 4G Network Planners and Network Assurance specialists (IP and Optical). We are also seeing an increase in demand for multi-lingual OSS/BSS pre-sales and delivery consultants throughout the UK and Europe. From a contractor perspective, we notice that demand for engineers with expertise within converged real-time billing and mediation is rising fast. If you are lucky enough to be planning a trip to MWC, Enjoy! Whilst you are travelling to Barcelona, consider whether you hope to still be in the same position or company by the time MWC 2012 arrives! If you wish to speed up your career development, my team and I would be delighted to hear from you. Jason Bandy, Director, Kineticom Ltd. Jason.Bandy@kineticom.co.uk Tel: +44 (0)845 370 2900 Mobile: +44 (0)7500 013084 www.kineticom.co.uk

Mobey Forum appoints Sirpa Nordlund executive director Sirpa Nordlund has become executive director of the Mobey Forum succeeding Liisa Kannianen who stepped down from the role on 1 November 2010. Nordlund was selected by the Forum because of her experience within the mobile services and near field communications (NFC) sector. With a Sirpa Nordlund career that spans over ten years with Nokia, Nordlund worked in the research and development of NFC following the handset manufacturer’s decision to invest resources in this area. Once the concept began to advance, Nordlund drove NFC in business development and sales. More recently, she was responsible for sales in selected European markets at Venyon, a subsidiary of Giesecke & Devrient which provides trusted NFC services, a position which she held for three years. Commenting on her new role, Nordlund said: “I am delighted to be appointed as executive director of Mobey Forum. The not-for-profit organisation has worked hard over the last years and created the industry-leading body which has engaged the market and created materials that support a sustainable and prosperous mobile financial services ecosystem. Representing more than 450 million banking customers today, I look forward to advancing this effort further.”

Rod Squires joins Pentaho as worldwide executive vice president of sales Pentaho Corporation, an open source business intelligence (BI) and data integration specialist, has appointed Rod Squires as its new worldwide executive vice president of sales. Squires has more than 25 years of experience managing all aspects of worldwide sales and operations in emerging and established companies.

SmartRevenue SuiteTM

SmartMoney SuiteTM

SmartEnergy SuiteTM

Orga Systems’ Smart Revenue Suite oﬀers outstanding solutions for convergent real-time charging, billing and ﬁnancial management.

Orga Systems’ SmartMoneySuite enables telecom operators and financial institutions to offer advanced mobile payment and financial services to boost customer retention and revenue.

Orga Systems’ SmartEnergy Suite enables dynamic pricing for volatile renewable energy based on a centralized rating engine – Dynamic energy billing will enhance energy eﬃciency.

Throughout his career, Squires has proven a high degree of success quickly ramping up successful software companies. As an officer and senior vice president of sales at Savvion, Inc., Squires was instrumental in growing the company, resulting in a successful acquisition by Progress Software. Prior to Savvion, Squires was the vice president of sales at Vitria Technology and helped the company accelerate from zero to $100m. Prior to Vitria, Squires was a sales director at Parametric Technology and spent several years at Xerox Corporation in various leadership roles.

Apollo Mathews joins Bsquared sales team Bsquared has appointed Appollo Mathews to its sales team. Mathews an engineer, who then moved into the sales arena, has worked for Motorola then Nortel Networks on continuous improvement and with Six Sigma programmes and projects over a nine year period. Mathews brings extensive experience in business development and sales account management to the team. During the last eight years he has been responsible for developing clients such as Corus, Federal Mogul and leading councils as well as penetrating the SME market. rectly to your bottom line profitability.

orga-systems.com

VanillaPlus Hot List: February 2011 / March 2011 - by Nathalie Bisnar, Digital Editor The Hot List below shows the companies informing us of recent contract wins or product deployments. If your contract is not listed here email the details to us now marked "Hot List" <editorial@vanillaplus.com> Vendor(s)

Client, Country

Product / Service (Duration & Value)

Deployed

Actix

Vodafone D2, Germany

LTE Network Analytics Software

Andrew Solutions

Telecom Italia, Italy

Wireless coverage solutions on high speed trains

Nov-10 Jan-11

Bridgewater Systems

Verizon Wirless, US

Mobile control solutions

Dec-10

Bridgewater Systems

Agri-Valley, US

Subscriber and device data management and policy control

Nov-10

Cerillion

Talkmobile, UK

Convergent billing and CRM five-year managed services deal

Jan-11

Clarity

PT, Indonesia

Fulfilment and assurance solutions

Jan-11 Dec-10

Clarity

Vodafone Egypt, Egypt

Infrastructure management solution

Comarch

GTS, Poland

Convergent billing

Oct-10

Comptel

Movistar, Argentina

Covnergent mediation

Jan-11

Conceptwave

Atria Networks, Canada

Order management and product lifecycle management

Dec-10

Convergys

SmarTone-Vodafone,

Rating and Billing Manager Smart App

Nov-10

Convergys

NetOne, Zimbabwe

Real-time rating upgrade and personalisation and loyalty solution

Dec-10

Convergys

Andorra Telecom, Andorra

Rating and Billing Manager

Dec-10

Convergys

Cox Communications, US

Billing and Customer Care

Nov-10

GLDS & TeleLynx

Mediatti Broadband, Japan

PC-based subscriber management and billing

Dec-10

Incognito

Xiamen CATV, China

Broadband Command Center

Dec-10

Incognito

Wenzhou CATV, China

Broadband Command Center

Dec-10

Incognito

Sumitomo Electric Networks, Japan

Broadband Command Center

Dec-10

Hong Kong and Macau

Incognito

Dapitan Cable TV, Philippines

Broadband Command Center

Dec-10

Incognito with CYO

PT Mora Telematika, Indonesia

Broadband Command Center

Dec-10 Dec-10

International Incognito

Taiwan Mobile, Taiwan

Broadband Command Center

MACH

Swisscom, Switzerland

Wholesale roaming solution

Jan-11

Orga Systems

Unnamed European operator

high performance voucher management solution OVSC

Dec-10

Orga Systems

life:), Ukraine

Real-time charging, active mediation and policy control solution

Jan-11

Openet

Unnamed Indonesian operator

Poicy management solution

Dec-10

Redknee

Azur Congo, Republic of Congo

Converged billing platform

Nov-10

Scorecard

Revol Wireless, US

Subscriber analysis application and commission manager solutions

Dec-10

Subex

Unnamed Asian operator

Fraud management, revenue assurance and data integrity management

Dec-10

Subex

Unnamed south east Asian operator

Revenue assurance

Jan-11

Synchronica

Unnamed Middle Eastern operator

Additional mobile gateway user licences

Jan-11

Synchronica

Unnamed Nigerian operator

Additional mobile gateway user licences

Dec-10

Tango Telecom

Unnamed African operator

Data charging and policy control platform

Jan-11

Telmap

Optus, Australia

Real-time navigation

Dec-10

NEWS IN BRIEF

Information Builders announces BI reporting for non-technical users Information Builders has developed a specialised tool to help business analysts build applications for non-technical end users to generate their own customised reports, dashboards and gadgets. InfoMini, a tool in WebFOCUS InfoAssist, enables business analysts and end users to choose the information they receive from their BI system with the push of a button, displaying only the information specific to their needs for faster, more informed decision-making. Business analysts can also build and publish gadgets (or mini-applications similar to an iGoogle widget) that connect directly to the BI system to pull customisable information and reports. For example, if employees in the sales and finance department are collaborating on a single report,

VANILLAPLUS FEBRUARY/MARCH 2011

different filters on a gadget can easily be applied by anyone in either department to include only the most relevant information. “The issue with many business intelligence tools for nontechnical users is feature overload,” said Rado Kotorov, chief innovation officer, Information Builders. “Ideally what most business users want is a way to cut to the chase with their data – getting only the information they need when they need it and filtering out the rest. InfoMini helps non-technical users do their jobs more efficiently by helping them apply the right changes to their reporting so only the information they want appears, with minimal interaction with the technology.”

Rise to the challenge of flexibility, scalability and cost efficiency whatever business models emerge Christoffer Andersson is the recently announced managing vice president of Ericsson's Billing and Customer Care Solution Area, which was formerly the LHS Group, acquired in 2007. Here, Andersson, who describes himself as a fresh face, tells VanillaPlus how the company plans to develop now it is fully-integrated within Ericsson.

VanillaPlus: Ericsson acquired LHS more than three years ago. What will be different now LHS has been integrated into Ericsson's newly established Billing and Customer Care Solution Area? Christoffer Andersson: We acquired LHS in 2007 and are very grateful to Wolfgang Kroh, former CEO of LHS, for his leadership of the company, especially in the critical post-takeover period while we combined our solutions and go-tomarket approach – and which contributed so much to the successful integration into Ericsson. The acquisition of LHS and its flagship billing and customer care product portfolio was all about strengthening our portfolio and competence and becoming the leaders in OSS/BSS. I am very excited to be the fresh face managing this new Billing and Customer Care Solution Area which now incorporates our fulfilment and newly launched CRM offerings. I believe OSS/BSS is a critical area for communications service providers and that we have some exciting opportunities ahead of us as we move forward with our strategy. VP: How does this addition of Billing and Customer Care support Ericsson's corporate strategy? CA: Rapid advancements in network technology can create a huge potential impact on the way that business is conducted and on peoples' lifestyles: just look at the applications realised by mobile broadband or at some of the possibilities being discussed for machine-to-machine communications.

VP: So, does Ericsson now view itself as a software company? CF: Actually we’ve been a software company longer than most people might think, bundling software with hardware based solutions. However it is clear to us that a software-led approach, based on openness and ease of integration, is essential for us to help operators with their business challenges. For example, the ability to easily integrate CRM, order management and fulfilment systems is key for an operator that wants to achieve a faster time-tomarket.

For me, the real challenge for the industry is to be able to monetise these technical advances and to create viable business models. That's why I view OSS/BSS as one of the most important and exciting areas to be in, in communications right now.

I therefore view the type of software skills, competence and technology acquired with LHS as leading the way in this approach. VP: Looking ahead, how would you summarise the OSS/BSS challenges facing the industry? CF: The economic crisis has really focused minds on efficiency and reducing operating expenses. But this is not just a short-term focus, it has become a driver of longer-term next generation strategies. And I think this is the case both in mature markets, where tough competition and declining margins are factors, and also in emerging markets where many operators are already facing up to an eventual slow-down in growth.

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Ericsson’s strategic goal is to be the number one choice for OSS/BSS consolidation and transformation. We're going to base this on our world-class, end-to-end software portfolio, our systems integration expertise and our managed services. This combination can support any type of communications service provider of any size, from tier 1 operators to smaller virtual operators. In BSS, I view LHS’ BSCS iX, together with our strong fulfilment offerings as a cornerstone of Ericsson’s overall offering in this area.

VANILLAPLUS FEBRUARY/MARCH 2011

VP: What specific evidence have you seen for this?

VP: So what are the key success criteria for achieving these transformations?

CF: Increasingly, we are seeing a demand for convergent charging and billing solutions, both pre and post-paid and also fixed-mobile and multi-play. This is from all types of operators, not only greenfield operators but also incumbents, who identify OSS/BSS transformation as being key to their business strategies.

In our experience, the key to a successful transformation is to take an early look at the organisations’ business process as well ensuring that business objectives and priorities are identified and understood from the outset. However this should not necessarily be performed at a high level but also across different areas and levels of the organisation. There also must be buy-in across all major stakeholders – not just from the CIO and CTO, but also on the business side from the CFO, and ideally the CMO as well.

Put simply, operators are trying to do more with less. A good example is the Portuguese quadruple-play operator Optimus, who recently drastically reduced its number of activation systems. This is serious IT consolidation and shows a strong focus on creating a leaner operating environment. VP: How would you characterise the so-called next generation of OSS/BSS systems? CF: It is about consolidation and transformation. It’s about creating a leaner environment through consolidation and transforming business processes to adapt to next generation ways of doing business. We are already seeing new value chains and business models emerging around content and apps for smartphones, so it’s clear that OSS/BSS requirements will continue to change and evolve. I believe next generation OSS/BSS is really all about business empowerment and business innovation – and providing operators with the flexibility to adapt cost-effectively to innovative new business models, as they emerge. For example, this could be the flexibility to quickly set-up and support virtual operators serving the M2M sector. Or perhaps being able to launch advertisement sponsored content services, involving multiple chargeable parties.

CF: How to design next generation OSS/BSS architecture and the transformation journey is a tough question and the answer really depends on the operators’ priorities and business objectives. As I said, an operator’s immediate priority could be to create a leaner operational environment and reduce op ex, perhaps by reducing the number of billing systems. Alternatively operators that are more focused on improving customer experience or time to market may target the integration of their fulfilment and CRM systems, for example, to use device management intelligence for targeted market launches or enhanced customer support.

VANILLAPLUS FEBRUARY/MARCH 2011

After completing each key stage of an agreed transformation project, these objectives and priorities really should be re-assessed: to ensure they are still valid and that the overall transformation project remains on the course that makes most sense to the business. VP: Machine-to-machine communication seems to be attracting a lot of hype in the industry these days. What kind of business models will emerge from M2M? CF: Yes, it really is a hot topic. We believe that with the different types of applications of M2M communications, the total number of telecoms connections could increase from the 5 billion we have today, to some 50 billion by 2020. In truth, it is still too early to know exactly what the business models will look like. This is a good example of the whole challenge facing

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VP: So how would you advise operators to go about achieving these next generation strategies?

OSS/BSS to be flexible and business adaptive. It is possible from this sector, for example, that one, two or three-sided business models could emerge, with sponsors also being involved in the value chain. VP: What OSS/BSS challenges will operators find entering the M2M business? CF: The first challenge is to support these new business models in the value chain as quickly as they emerge. Each operator will have to make sure their OSS/BSS can handle these new requirements – depending on what they decide will be their role and differentiation in the value chain. The second is to make sure that their OSS/BSS can run lean enough, with low enough overheads, to support these huge expected numbers of transactions and ultra low Average Revenue per User (ARPU). The third is the problem of supporting the growth in sheer number of connections, I mean to literally millions of connections, which will need very highly scalable systems. We know that scaling will present operators with real challenges, particularly in the area of configuration and cost effective management and monitoring of these millions of devices. The good news from Ericsson’s point of view – and hopefully the operators will feel the same way, is that I believe we are well positioned to provide the operator with the OSS/BSS flexibility to cost effectively adapt to whatever new business models emerge, as well as support the lean running and the massively scaling systems that we believe they will need.

VP: As is often predicted, do you think many operators will be reduced to the status of dumb bit pipes? CF: Many operators may simply become delivery channels, or what used to be called dumb bit pipes, but I really don't see this as a problem. This could be the most viable and sensible strategic model to adopt for certain operators; for those who can build a competitive advantage around cost effective access and transport services on a wholesale basis, rather than direct contact with the end user. After all, there is nothing dumb about creating shareholder value. VP: Will operators naturally evolve towards new strategic models, or need to make a conscious decision about which models to adopt? CF: Nowadays, new sources of significant revenue are coming from device and internet centric value chains and operators must ask themselves how and with whom they should compete. To be successful, I believe that many operators will have to make a very honest assessment of their assets in terms of technology, brand and market. To a large extent, as a vendor we view this as our role; to help our customers visualise how their market is evolving – and advise them how best to adapt. VP: What should an operator look for in a vendor when designing next generation OSS/BSS architectures? CF: At Ericsson I would view our role as transformation partner. As I said I view our role as helping customers visualise their next generation business and to identify what their business priorities should be. Asking questions about their customer base usage habits could help them determine if, for example, customercentric factors, time-to-market or innovation are their most important priority, or whether lowering op ex should be their primary objective. To be successful, at the core of this approach should come a strong, end-to-end product portfolio. One that not only encompasses the configurability and performance needed to meet the customers’ next generation business requirements, but also the openness and modularity to enable the customer to transform their architecture in a stepwise fashion, in line with their business priorities.

Many operators may simply become delivery channels … but I don’t really see this as a problem ... for those who can build a competitive advantage around cost effective access and transport services on a wholesale basis, rather than direct contact with the end user. After all, there is nothing dumb about creating shareholder value.

A transformation partner should have a strong product roadmap, showing how future market needs will be supported by their products and the services expertise to help customers move seamlessly and cost effectively to future releases. As I mentioned at the beginning Ericsson’s strategic goal is to be the number one choice for OSS/BSS consolidation and transformation. We aim to achieve this by providing a more holistic approach to ICT; providing experience, insight and technology across the IT, network and consumer domains. VANILLAPLUS FEBRUARY/MARCH 2011

C S G

S Y S T E M S ’

I N T E C

A C Q U I S I T I O N

EXPERT OPINION:

Flexible solutions delivery, broader portfolio and enlarged services organisation at heart of Intec acquisition CSG Systems, a provider of customer interaction management and billing systems completed its $376m purchase of Intec Telecom Systems towards the end of 2011. It’s not the first time CSG has acquired a billing company. In early 2002, it acquired Lucent Technologies’ Kenan billing operation for approximately $260m, selling it to Comverse just three years later. Here VanillaPlus asks Peter Kalan, president and CEO of CSG Systems, his reasons for acquiring Intec, his plans for it and why CSG’s attitude to owning a billing expert has changed since 2005. VanillaPlus: Why are the two companies suited from cultural and business perspectives?

Peter Kalan: The companies operate with minimal overlap.

Peter Kalan: It has been said that while opposites may attract, like-minded partnerships are built to last. Such is the case with Intec and CSG Systems. The two companies operate highly complementary businesses with minimal overlap of products, clients and infrastructure. Both companies also have shared company values and a strong commitment to prioritising the growth and success of their clients. Intec is a global leader in wholesale billing, mediation and retail billing software. The company has a proven track record with over 400 customers worldwide, including over 60 of the world’s top 100 communications service providers across fixed, mobile and nextgeneration networks. CSG is a leader in providing customer interaction management solutions, serving the leaders in the North American communications industry. CSG’s solutions that enable nearly every customer touchpoint, reach more than half of all US households. Collectively, the companies form a world-leading Business Support Systems (BSS) company that brings to market enhanced capabilities in software and professional services and the ability to deploy products in multiple geographies and delivery models.

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To successfully address these market challenges, CSG will integrate Intec’s solutions, offices and personnel to become part of CSG, rather than continuing to operate the company as a standalone entity. In total, and since the cultures and goals of the two companies are so similar, this acquisition will improve CSG’s time-tomarket of solutions, provide additional domain expertise and expand the markets that the combined company collectively serves, both vertically and horizontally. VP: What are the market catalysts for the acquisition? What issues in the service provider community and the changes and challenges they face make the acquisition appropriate? PK: Across the globe, communications services providers are facing more competition from more sources than ever before, while also receiving consumer demand to provide advanced services, in real-time, across a variety of screens, while understanding the individual customer’s preferences at deeper levels. This is a tall order, but one that Intec and CSG

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VP: How is the market different from when CSG acquired the Kenan assets from Lucent? CSG has tried to own a billing software provider before and failed, why does it think it can do a better job with Intec than it did with Kenan?

PK: Upon first inspection, CSG’s acquisition of Intec may seem similar to the Kenan acquisition. However, the communications market has evolved greatly since the Kenan acquisition, with more competition to ‘own’ the customer and the content that is delivered to them, ubiquitously across devices than ever before. Further, CSG’s rationale for the Intec acquisition is consistent with its overall growth strategy: pursue acquisitions that help it get closer and deeper into its clients, in particular, those that are pursuing quad-play offerings.

can address together by offering flexibility in solution delivery models to address the emerging market for real-time, usage-based transactional billing that also offers customer intelligence and the ability to monetise content across platforms. The combined company and its solutions can help clients increase their competitive edge, introduce new services quickly, increase revenues, strengthen customer loyalty and enable operational cost-savings. For example, Intec and CSG will feature its charging and policy, roaming and content partner management solutions at Mobile World Congress. These solutions are all designed to deliver innovative ways for service providers to reduce costs while increasing revenue. Intec Charging and Policy meets the growing market demand for both control via policy management, and revenue generation via online charging. The roaming solution allows service providers to save clearing house fees while catering to the demands of their highest-revenue roaming partners for more flexible agreements. Content partner management enables service providers to efficiently manage their content partner relationships whilst attracting and retaining them in a similar way to consumers. VP: What were the business drivers for the acquisition? PK: The primary business drivers were threefold: evolve the company’s offerings, expand the markets the company could serve and expand economic scale. As a result of the combination of the two companies, the combined entity can provide a broad portfolio of products and services that address the ever-expanding needs of communications service providers to manage and maximise customer interactions in real time with a compelling combination of domain expertise in video, voice, and content. In addition, the combined company has a diverse customer base serving customers around the world in cable, satellite, telecommunications and other highly competitive industries. Together, CSG and Intec create the second largest provider of Business Support Systems worldwide. The combination provides greater scale and is well-capitalised to pursue both organic and inorganic growth opportunities. VP: What will the combined entity bring to the market in terms of overall product portfolio and global coverage?

PK: As a combined entity, the two companies are well-positioned with a broad and deep suite of solutions aimed at helping a wide variety of service providers roll out new products and services and operate more effectively, thereby improving their bottom line. The new product suite will include an end-to-end customer interaction management platform, combining mediation, billing, rating, charging, product catalogue, customer care, web self-service, analytics, interactive messaging, interconnect services, content management, workforce management and marketing services. There are now multiple delivery models ranging from onsite delivery to full outsourcing supported by a world-class professional services team.

The combination provides greater scale and is wellcapitalised to pursue both organic and inorganic opportunities

The total number of employees in the combined company is over 3,600. We have 2,500 in North America, more than 65 in the Caribbean and Latin America, more than 450 in Europe, Middle East and Africa, and more than 730 in Asia Pacific. There are 38 offices in 24 countries. VP: How important is it for a telecoms software vendor to be perceived to have scale and a substantial services organisation? Were these reasons for the acquisition? PK: Because many of our clients are growing quickly, both organically and through acquisition of competitors, it is important to have scale and a substantial services organisation to give our clients the confidence that we can grow along with their business. This was not the only reason for the acquisition, but was an influencing factor. VP: What does the future look like for the merged companies? How will the businesses be integrated and how will that be to the benefit of both sets of customers? PK: The near-term 2011 product roadmap priorities have already been established with a focus on infusing Intec’s pre-paid wireless and data capabilities into CSG’s ACP customer care and billing product suite. The details of these efforts are being worked through over the next few months. In parallel, key leaders from both CSG and Intec are working to analyse additional joint go-to-market opportunities, rank and prioritise these opportunities and build execution plans to support the most appealing options. Our vision is to enable our clients’ growth with leading business solutions and services that maximise every customer interaction. We will continue to develop and deliver solutions that allow us to: maintain and evolve our core business, build stickiness with our current clients and capture new markets.

VANILLAPLUS FEBRUARY/MARCH 2011

SMS DELIVERY

EXPERT OPINION:

India bridges gap between service and security as new model unfolds Following the successful launch of mobile number portability, new challenges stemming from the need for reliable SMS delivery to India have turned into a win-win scenario for operators, regulators and content providers, writes Joel Fisher.

Joel Fisher, vice president, marketing, interconnection solutions, Telcordia

How important is it for 700 million users, in a single country no less, to receive text messages? A case in point is India in 2011. Mobile number portability is finally a reality for Indian mobile subscribers. However, due to new regulatory guidelines, port corrected routing data will not be accessible to companies who send SMS traffic into India. Inbound international SMS messages may not get delivered to subscribers who have ported their number as mobile network operators within India will not forward incorrectly routed messages to each other. Not allowing subscriber and related port routing information from being distributed outside the country is a security measure that certainly gives more control and protection. However, ensuring seamless service and connectivity is essential as more than 700 million Indian mobile subscribers greatly rely on mobile communications. Considering that the mobile device is the only form of communication for many subscribers, the need to ensure that messages are delivered is paramount. So, is it possible to get the best of both worlds? Security and control of country data with seamless service delivery of content sent by foreign operators, SMS providers and enterprises? The answer, of course, is yes. Let’s look at the approach Airtel, India’s largest mobile operator and Telcordia Technologies, a worldwide leader in mobile communications, took as an example of achieving that critical balance between access, security and delivering a seamless customer experience to subscribers. Airtel and Telcordia partnered to ensure that SMS messages will always be delivered to the proper network provider, regardless of whether or not a subscriber has ported his number. Airtel and Telcordia set out to create an SMS infrastructure service hub in India that can receive mobile messages from any international provider, apply port corrected routing data and deliver the message to the proper subscriber located on any mobile network in India.

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Message hub benefits The concept of a message hub is certainly not new and the advantages can be very compelling, such as: • Significant cost and time saving by having a single contract for global termination compared to hundreds of bilateral contracts. • Operational cost savings by avoiding having to set up, test and maintain numerous physical links to operators across the globe • Faster time to market by instantly getting access to operators that already have connectivity to a message hub • Improved customer satisfaction due to the highest possible message delivery rates By ensuring that foreign-originated messages are always routed correctly, the hub provides Airtel with a level of message delivery reliability that will help them differentiate themselves in the crowded Indian communications market. That unprecedented level of reliability will further improve Airtel’s capability to attract and retain customers for whom SMS messages are musthave ways of communicating. In addition, it will put in them the best position to capture the revenue stream associated with the global messaging explosion. The new telecommunications environment in India definitely seems like a win-win. Operators can compete more aggressively for customers with the availability of mobile number portability. Regulatory and government interests around security and quality of service can be met. Consumers have more flexibility to choose different service providers. And, all of this is only meaningful due to the ability to guarantee delivery of critical SMS traffic. 2011 will be an exciting year for telecommunications growth in India and the new message hub combined with the availability of mobile number portability finally bridges the security, reliability and quality of service requirements the country expects.

A P P L I C AT I O N P E R F O R M A N C E M A N A G E M E N T

APM: Cloud busting? Already a key consideration for internal and external service providers, Application Performance Management (APM) could find the cloud a very different operating climate. Gareth Kershaw casts a weather eye over its prospects.

Few things in technology are certain and those that are rarely remain that way for very long. Right now though – and for the foreseeable future – the application is undoubtedly king. An unavailable application is a useless application and for operators that means comprehensive, cohesive APM is now a must. That means APM that is: fully integrated, scalable, can be dynamically monitored in real time without reliance on external systems; and open architected for multi-vendor integration. In other words a system that empowers the provider to see, scope and remedy provision issues before they impact the user and therefore their bottom line.

“It is essential to remember that APM is about a number of things”, says Eric Bear, director of product management, Visual Network Systems, “Maximising application speed, efficiency and availability; identifying faulty applications; understanding where problems are – potential and actual – and also who’s responsible for fixing them.” These areas all have to be properly managed regardless of where the application may reside, he explains, but the cloud ups APM complexity to a whole new level. “[It] all becomes much more complex when multiple businesses are involved in running a network,” he adds. “Furthermore, when you get into the realms of multi-tenancy clouds, the complexities become exponential, making tools for monitoring, identifying, and measuring issues essential. One

Clive Longbottom: A Pandora’s box of a subject

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Such systems do exist of course. Only now there is a whole new and hugely disruptive consideration for operators when it comes to their deployment – the cloud. Cloud is a trend that is making the already challenging job of

visualising, managing and optimising application performance trickier still.

VANILLAPLUS FEBRUARY/MARCH 2011

M O B I L E

A D V E R T I S I N G

bad application can affect every business that’s part of the multi-tenancy agreement.” According to Clive Longbottom, service director with analyst firm Quocirca, that makes cloud APM “a Pandora’s box of a subject”.

Owen Garrett: Shared infrastructures like the cloud are much more vulnerable to changes in service levels

Cloud providers have little or no

“APM is a definite need for commercial cloud, and a ‘more than nice to have’ in the consumer cloud,” he adds. “In the first – the operator’s own environment – performance monitoring can be relatively simple. The average operator will have far better overall performance than a commercial, internal data centre as they generally architect for overall performance – 10GB core networks, highly engineered back plane busses for their virtualised environments, highly-tuned storage and so on.” The problems come where an operator touches the rest of the world, he says. In trying to identify the source of an issue, for instance. Is it within the customer’s premises? In the managed network between the customer and the operator’s data centre? In the data centre itself?

control over the route data takes, the number of hops, routes, carriers, distances and so on – all are outside their control.

“And that’s just top-end providers,” continues Longbottom. “Consider the next level down – the operator with a good data centre architecture – so few problems there, but one that uses the public internet to provide connectivity to the customer. Suddenly the whole solution is at the mercy of the public network – DOS attacks, heavy traffic caused by a sudden rush of visitors to YouTube, whatever. Latency can become the overriding issue and, combined with sawtoothing and jitter, the experience for the user can be awful.”

Offering email from the cloud is one thing, he says. Delivering something like SAP will be quite another. “As numbers of cloud vendors increase, the choice will get bigger, people’s tolerance for poor performance will get lower, and application SLAs will have very aggressive penalty fees for poor-quality user experiences. SPs will get few chances to get it wrong – unless the price is very low of course.” For Bear the key will be to isolate problems from the end user experience and he cites three key issues to consider when it comes to cloud APM. Firstly, the chosen APM tools must provide a complete, end-to-end view of the network, its performance and its applications. Secondly, they must be able to identify and troubleshoot any issues that may arise. And thirdly, they must be able to identify whether such problems are their responsibility, or somebody else’s. “This is vital, especially in a cloud environment,” points out Bear. For Garrett: “Operators should also look for tools that can easily scale to large number of users”, he says. “And if they plan to resell or provide these tools to their users they may also need a tool that supports subscription-based pricing. Hand in hand with APM solutions, Application Delivery Controllers (ADCs) focus on delivering and maintaining the SLA, manage and optimise traffic to improve service levels, monitor service levels, and proactively report problems.”

For Owen Garrett, cloud computing expert at APM specialist Zeus Technology, provider SLAs are therefore set to become increasingly central to APM moving forward.

Willmott further recommends that APM must be fully integrated into billing systems, support, and – if the organisation has an existing portal – into that too.

“The key metrics that concern end-users are availability and response time,” he comments. “Shared infrastructures like the cloud are much more vulnerable to changes in service levels because a spike from one user can affect the service received by others. Because the cost of switching between operators is relatively low and long-term contracts have become a thing of the past, strong SLAs will become even more important in the success of operators.”

“If not linked into billing for example, portal stats might contradict the actual bills. When there are issues such as slow downs support needs to be aware – as it happens – so they can take action. In addition, most SPs have pre-existing ticketing systems and any new service within the cloud must be able to hook into all pre-existing web portal interfaces.”

Control is another key factor according to Andi Willmott, business development director at NetEvidence, as cloud providers have little or no control over the route data takes. The number of hops, routes, carriers, distances and so on – all are outside their control. And this could see the network become as important as the application

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being accessed, as users rely more and more heavily on cloud-based apps and especially as businesses start divesting more mission critical applications to external cloud providers.

VANILLAPLUS FEBRUARY/MARCH 2011

Ultimately, says Bear, the key issue with APM in the cloud is the altered demarcation point – where one carrier’s responsibility stops and another’s begins. And he warns businesses to stay on their toes as public, hybrid and multitenancy cloud models grow in popularity and more and more players emerge and become embroiled in the finger-pointing exercises that will inevitably follow.

PERFORMANCE MANAGEMENT

EXPERT OPINION:

The unexplored frontiers of the M2M market There is little question that the machine-to-machine (M2M) market presents a burgeoning opportunity for mobile service providers but, for operators to make the most of that they need to ensure their networks perform effectively to support a raft of new applications, writes Ranga Thittai New research from Analysis Mason forecasts the number of M2M devices to grow 36% in 2011, reaching 2.1 billion by 2020. With application innovation keeping pace with this rapid growth in connected devices, enterprises will increasingly rely on M2M applications for critical business processes – monitoring everything from oil rig sensors, to traffic lights, to medical monitoring appliances. And, as their dependence on M2M to deliver new operational efficiencies grows, network reliability will be essential for these highly time-sensitive applications, as even the slightest service interruption can have serious consequences. Because of the critical nature of these services, it is easy to predict that enterprise customers will demand service level agreements (SLAs) to ensure they are receiving the expected service performance from their provider. These SLAs will more than likely place requirements around measurable goals that include service availability, quality, response time, or mean time to repair (MTTR). Successfully preparing for this inevitable market requirement will require gaining the capability to provide a value-added level of compliance reporting. Doing so will make it possible to move beyond being a supplier of basic connectivity for M2M applications, strengthening your organisation’s proposition for acquiring and retaining high value enterprise customers. The right mobile data service assurance solution will ensure that reporting capabilities are robust enough to meet the requirements of these SLAs. Having the capability to provide detailed and flexible customer-facing reports that clearly demonstrate compliance with quality of service (QoS) expectations will allow for incremental revenue opportunities and reduce customer churn. Reporting capabilities for value-added offerings Moving beyond compliance reporting, service providers can further differentiate from their competition by offering advanced analytics to their enterprise customers on M2M services. For example, if the customer is a taxicab company, it would be possible to provide an online customer portal through which the customer would have access to compliance reporting on day-to-day

issues such as how many taxis were unable to connect to the network for billing. On top of this basic reporting, critical business intelligence from a deeper set of analytics could be offered, such as identifying the geographic areas that account for the greatest taxi traffic or pinpointing which 30 taxis of a fleet of 10,000 generate the most billing. Comprehensive insight for mobile data service assurance To complement enhanced reporting capabilities, there is the added opportunity to benefit from a service assurance solution that allows for rapid troubleshooting and resolution of issues with high value M2M offerings. This type of service assurance is essential to avoid potential penalties – and a negative customer experience – from a failure to meet SLA MTTR agreements. A twopronged approach that combines a DPI platform and comprehensive infrastructure monitoring will make it possible to very quickly isolate service issues and find the root causes. With comprehensive insight into the complete packet core infrastructure, end-to-end IP transport path and a minute view into the data transit environments within the mobile data centre, problems can be identified and handled proactively, significantly improving the efficiency of operations and engineering teams. This visibility also makes it possible to gain insight into how particular M2M customers are impacting network capacity, facilitating intelligent planning when it comes to future traffic needs and customer QoS requirements. It also facilitates forecasting the adoption by individual M2M customers thereby helping establish the right business priorities across individual accounts.

Ranga Thittai, senior product manager, InfoVista: A performancecentric approach is needed

InfoVista offers a comprehensive mobile data service assurance and reporting solution that provides the reporting capabilities required to succeed in the promising but competitive M2M marketplace. With a performance-centric approach to mobile data service assurance and reporting, mobile service providers will be prepared to lead the way into the unexplored frontiers of the machine-to-machine market. VANILLAPLUS FEBRUARY/MARCH 2011

B U S I N E S S

I N T E L L I G E N C E

EXPERT OPINION:

The intelligent way to make the right decision Call centre communications consistently come at the top of customers’ complaints about the service they receive from their operator but the problem isn’t that such systems can’t access appropriate information, it’s that intelligence isn’t effectively applied to ensure the right decision is made quickly. Interacting with a call centre today can be a frustrating experience. You first have to wade through all the irrelevant interactive voice response (IVR) options and then wait in a long queue to speak to someone. When a person finally answers, they are unaware of who you are, why you are calling or that you just finished entering all this information a few minutes earlier. Michal Fridman: New solutions are required

And, when you finally explain the reason for your call, you are suddenly placed on hold as the customer service representative (CSR) goes off to determine how to handle your issue. Making matters worse, you are often at the whim of the agent’s mood in terms of how you will be treated. Lack of information is not the problem. What to do with it is. Given the vast amount of information CSRs have to research, it’s really not too surprising that calling a call centre can be so painful. The amount of information available to service providers about their customers has increased tremendously, both in terms of the amount and complexity. Lack of information is not the problem. What to do with it is. Information sources have expanded to include more than just traditional data from the network and call centres; they now include application downloads, digital content transactions and more. The increased complexity and functionality of smartphones and the proliferation of thirdparty applications have further added to the amount of information CSRs need to be aware of when handling customer interactions.

VANILLAPLUS FEBRUARY/MARCH 2011

Of course, operational decisions are not just a matter for the call centre. They take place across multiple channels such as IVR, contact centres or web self service and they also occur in the enterprise’s back-end business processes or in the network itself. While individual operational decisions are of low monetary value they are high in volume, repetitive, usually based on company policy and made in real time across the organisation. Let’s take a look at another example of an operational decision – the process of collecting money from a delinquent customer. This process is highly sensitive; a customer might refuse or be unable to pay, or simply be unaware that they owe any money. Inappropriate treatment might turn a misunderstanding into a situation of customer attrition or lost revenue. In the case of collection, the initial step is to decide who should be treated as a delinquent customer. This entails taking into account multiple decision factors and the criteria can change quite dramatically, depending on the company’s policy. Take two customers with the same debt: one might be considered delinquent and the other not because of their past payment history, loyalty or revenue brought to the company. Once delinquency is determined, the next step is how best to approach the customer. What payment arrangement should they be offered to help settle their account so as to ensure maximum return? Which services, if any, should be disconnected? These are just a few of the many complicated operational decisions that need to be made for each delinquent customer before a representative even picks up the phone. Mostly, large organisations pay little attention to optimising these decisions. Although they might be aware of the need, their systems do not have the capabilities to automate this type of complex

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As a result of all this, decisions made during customer interactions involve customer-facing employees reviewing and interpreting reams of information concerning customer history and usage, after which they have to determine trends and application of company policy and strategy. The CSR then needs to make operational decisions such as: “Should I credit the fee?”, “Is this a valued customer?”, “What does company

policy say about this?” and “Can I offer this service bundle?”.

decision making. This often results in suboptimal, inflexible, impersonal and inconsistent decision making which, in turn, leads to a poor customer experience, an increase in costs and decrease in revenue as well as the increased possibility of customer churn. Strategic decision support systems are not enough Companies are investing in powerful business intelligence (BI) engines to help make major, strategic decisions. These tools are utilised to predict consumer trends, identify market opportunities and gauge campaign effectiveness. Little or no regard is taken as to how the operational decisions that will implement these strategies should be made. Most organisations have yet to find a way to streamline and automate their operational decision processes as they align with constantly changing company policy. Currently, the automation of operational decision making is usually limited to marketing and sales processes, which are referred to as the ‘next best offer’ recommendation engines. Another form of automation is sometimes accomplished through the coding of business rules by programmers, requiring the IT teams to understand the business needs and codify them accordingly. But rules embedded inside applications have limited visibility to information outside each application and are difficult and expensive to change. As a result they often fall out of alignment with the operator’s evolving business goals. An overwhelming majority of operational decisions tend to be hard coded, applied manually or require managerial approval for certain transactions. While all this is done in an effort to ensure consistency in the application of company rules and guidelines, in practice it often results in inefficient customer interactions and increased customer frustration. A new breed of solution is needed New solutions are required that will allow for the automation of intelligent operational decisions across an enterprise, while being flexible to keep them in line with constantly changing company policy and strategy. In fact, what is needed are solutions based on intelligent decision automation systems. To be effective, an intelligent decision automation system needs to optimise all types of decisions across the company and not just be focused on consumer marketing or selling interactions. It also has to understand the

customer and business context from end to end, collecting data from both inside and outside the firewall. It must provide tailored interactions for both the enterprise’s and customer’s needs, employing real-time information.

The authors are

Intelligent decision automation systems must include the ability to align front-end decision making with business goals and apply business policies consistently. They need to empower the business analyst to easily implement and evolve policy without IT assistance. And they should help prevent problems before they occur by utilising a proactive approach. For this type of system to be truly effective it must be able to directly affect the underlining complex business processes that run a business. It should increase process efficiency through the automation of cognitive processes and application of company policies. It must also ensure that more intelligent decisions are made in the process decision points, based on an understanding of the complete customer profile and relevant behavior.

including Intelligent

Michal Fridman, marketing director for product enablers, Decision Automation, at Amdocs and Jeff Stern, marketing manager for Intelligent Decision Automation at Amdocs.

Successful intelligent decision making solutions can expand business process capabilities to channels that previously could not be reached. An example of this would be enabling customers to request refunds via the web self-service channel, a process that until now is conducted only in a CSR-assisted interaction. This intelligent system should also enrich processes, enhancing for example the IVR experience by anticipating customer needs and personalising the menu accordingly. Implementing this type of approach will change the way enterprises operate, both on the macro scale and on the individual end-customer level. It will give service providers the ability to present a differentiated and improved experience while ensuring the consistent implementation of company policy. VANILLAPLUS FEBRUARY/MARCH 2011

BUSINESS

INTELLIGENCE

Achieving the intelligent, personal touch As customers communicate with your network through multiple channels they expect a seamless, highly personalised cross-media experience. Mark Dye reports on the quest to achieve efficiencies and cost savings throughout the customer lifecycle, while ensuring enterprise-level brand control and regulatory compliance. The idea that operators need to have a unified view of their customers as product ranges expand is nothing new. Nor is the idea that customer experience should be everything. Of course, getting there is the issue for most. So, too, is the idea of deriving cost savings and efficiencies from multiple customer communications channels. Hugh Roberts: Methodologies, processes and systems architectures aren’t being developed

As Hugh Roberts, an independent communications & media strategist, puts it, “Achieving cost savings across the OSS, BSS and CRM domain is easy, but to do so whilst remaining competitive in an evolving contentdriven landscape is much harder.” He believes that operators are failing to maximise the revenue impact of their customer and usage data by turning it into business knowledge available to the communications value chain.

Indeed, a recent report from Oracle, entitled ‘State of Readiness’ suggests as few as 12% are able to run detailed analyses of customer

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However, as Judi Gill, director of Market Analysis and Strategy, Clarity, notes, rather than being an umbrella that unified underlying systems, CRM can be more of a façade, merely shielding an external user from the complexities below. “What this meant was that all the individual provisioning, assurance and many other process areas remained as silos for each product and service,” she says. “Adding to the complexity is the arbitrary delineation between OSS and BSS, both from a systems perspective and also organisationally, that meant the implementation of end-to-end automation was very difficult and costly to maintain.” Yossi Zohar, marketing director, Amdocs also identified the silo problem. “What’s continually undermining attempts to improve the multichannel experience is the persistence of the siloed IT systems that sit behind the different service provider channels,” he says. Zohar believes these prevent service providers from delivering a simple and consistent shopping experience to customers – something which is getting worse with the increasing

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Araceli del Rio: a virtuous circle of insight and capabilities is required

“Nor are they developing methodologies, processes and systems architectures that are capable of delivering near real-time customer experience management (CEM) responsiveness to personalise the service interaction environment as is increasingly being required,” he says.

behaviour to spot trends and identify customer segments. Yet over time customer relationship management (CRM) and, to a certain degree, converged billing have been deployed in an attempt to address such issues.

adoption of smartphones, mobile broadband and new connected devices such as tablets and Netbooks. Araceli del Rio, marketing manager for customer experience management, Nokia Siemens Networks is focused on automation and personalisation. “To provide a customer experience that wins new subscribers and keeps them happy, it takes a virtuous circle of insight and capabilities to drive personalised, automated and proactive business processes, all in real time,” she says. While Colin Rickard, EMEA managing director, DataFlux, adds: “If you don’t know which services a customer currently uses it’s impossible to understand their needs and to market new services efficiently.”

This, says Paul Skillen, president EMEA, Subex, means that employees in customer service need to know how quickly to respond to a call, how much time they have to deal with issues and how much resource they can use to resolve problems. “Spending €50 to satisfy a customer who generates €10 in profit per annum is not a good commercial strategy,” he adds. “Annoying a customer spending €100 per month for the sake of a €10 problem is equally foolish. So the key to success is access to real time or near real time customer information.” Other examples of achieving efficiencies come from deflecting calls to low cost self-service channels and ensuring a ’one and done’ service to limit repeat calls.

Bell has been using DataFlux to help it cross-sell and up-sell services to existing customers in Canada after realising that its ability to do so was being hampered by a lack of accurate customer information within its database of over 24 million records.

According to Anandan Jayaraman, chief product and strategy officer, Connectiva Systems, both strategies have been widely adopted with bestin-class CRM even though there is much work to be done as customers increasingly look for selfservice from ‘edge’ devices such iPads and set top boxes.

Having been in a position where it was unable to confidently identify which services were already being used at a customer address and whether that address was even accurate, Bell was able to eliminate over 5m duplicate records from its database and set in place a system that constantly checks and corrects customer addresses as they are entered.

“Enterprise brand control is a challenge particularly with indirect channel heavy operations where it requires more rigour and discipline to ensure consistency of message across all franchisees, dealers and partners,” he says. “It is critical that the brand promise and the value proposition be centrally managed and over-communicated to the ecosystem.”

Zohar points out: “Operators must look at all their sales channels and devise a holistic strategy to improve the current shopping experience.”

Stephan Gatien, global solution manager, SAP Industry Solutions, believes that this multichannel effect will see an increasing need for transparency, seamless experience and personalisation for customers with the percentage of self-service activities growing steadily.

This means not only streamlining and simplifying the shopping experience in each channel, but also to ensuring all channels consistently use the same underlying product data and business rules. Igor Sarenac, vice president of communication worldwide at Convergys rues the lack of consistent policies and messages to customers. “With no consistent application of business policies and no consistent message to the customer, it’s really this slow time to convey messages that impacts the customer experience and their decisions which immediately impact in terms of loyalty and revenue.” So in order to build an appropriate customer experience, operators must know about their customers’ needs and commercial value in near real time.

Paul Skillen: Spending €50 to satisfy a customer who generates €10 in profit per annum is not good strategy

Yossi Zohar: Siloes undermine attempts to improve the multichannel experience

“Maximising any opportunity at the ‘point of contact’ whether this point of contact is a selfservice transaction, a device-based activity or a call to a call centre will become even more essential,” he says. Of course, this will only be possible by clearly understanding the profile and consumption pattern of each customer. On the other hand, Gatien believes the growth in self-service should create more opportunities to transfer some of the analytical capabilities back to customers themselves to review their activities and mine their own data. And that is good news for carriers all round.

VANILLAPLUS FEBRUARY/MARCH 2011

C U S T O M E R

I N T E L L I G E N C E

EXPERT OPINION:

Customer intelligence gets ready for the hyper-connected, always-on, 4.0 world If Facebook were a nation, it would rank third in terms of citizens, only behind China and India. In this nation, the citizens, call them Netizens, are always-on, connected and communicating, across the globe, in hundreds of different languages, beyond any political borders or social boundaries. Rani Goel assesses to what extent this provides a window into the communications landscape of the future and how people will interact and communicate.

The author, Rani Goel is global senior director of telecoms industry marketing for business analytics at SAP.

The growth of online communities like Facebook, Twitter and LinkedIn gives us a preview of how the Netizens of tomorrow will communicate with each other. A year ago, Twitter hit 50 million tweets per day. According to CTIA survey results released in Dec 2009, some 5 billion text messages were sent daily in 2009 and the number has only grown since then, so is the old plain telephone call becoming a dinosaur? Not really, although some Generation Z teens confess to never making a phone call, they communicate with their friends entirely through the internet. At the same time, the pace of mobile calls is also increasing. According to CTIA, 6.1 billion voice minutes were used per day in 2009. Internet based communication, unlike the phone call, can be from one to many, many to many or machine to machine (M2M). It can take place between a pre-defined group of people or can be free form. Certainly, the amount of data generated by communication services used is growing exponentially.

VANILLAPLUS FEBRUARY/MARCH 2011

Shortened response window As the volume of data to be analysed increases and the window for responses gets shorter, very fast analytical appliances are needed to troll through petabytes of data and to bring in data from multiple heterogeneous, source systems in real-time. Data such as network usage, content accessed, customer service, location, preferences and consumption history are all required to get a full picture of the customer. The nature of the CSP (Communications Service Provider) is also changing, it is no longer the traditional network operator. Players like Google, Apple, Skype and Facebook are also providing communication services, they do not own any network, but

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The challenge is how to gain insight into customer behavior and preferences in this environment. The volume of data operators need to handle is growing at a very fast pace, and some of that information, such as data related to services from a third party vendor, is available to the service providers for only a short time. Operators need the ability to capture and analyse the data in real-time in order to respond to customers and make offers that are time sensitive, relevant and meaningful to the user. This real-time analysis can also provide price elasticity and dynamic re-pricing of the service based on the value of information to the user. With the availability of real-time rating and charging engines and aligned back-end systems, operators can take

advantage of this insight to rapidly innovate and execute with a closed-loop feedback mechanism so as not to leave money on the table. In most cases just-in-time or location and context specific information has greater significance and value to the subscriber. There is also time dependent value to information. We see this today in some of the advertisingpricing models in the online world. The realtime bidding models for online ad placement are very dynamic, factoring in the user context, publisher inventory availability and the advertiser appetite to pay for showing the ad to a user of a certain profile. In context of the user, customer intelligence doesnâ&#x20AC;&#x2122;t get more relevant than this. The days of warehousing the data and analysing yesterdayâ&#x20AC;&#x2122;s data is not going to provide the service providers timely insight to drive relevant offers to customers in order to increase differentiation and customer satisfaction.

they do provide ways for their subscribers to communicate. Every channel surfing click, every page view and every download is a goldmine of information that provides insight into the subscriber behaviour. The business intelligence solutions of the future, as mentioned before, will comprise of very fast analytic appliances that can access data from multiple data sources and either analyse it inmemory with sophisticated mathematical models and algorithms or offload it to a data store where it will still be analysed in near real-time. In either case, the goal would be to provide actionable insight and even automate the system response while the user is still engaged. Significant amounts of data will come from outside the enterprise; this could be from network partners, third party content providers, financial transaction settlers or other devices with which a user communicates. We can see a role for third party content syndicators, who act as service bureaus to collect, correlate and analyse the data by individual subscribers or subscriber segments and provide input to the service providers, advertisers and content creators. This information when tied-in with in-house data provides the complete end-user subscriber related intelligence to design and offer the most compelling services at price points attractive to the user. Analytical tools must become ubiquitous Today, the availability of analytical tools and access to real-time in-memory analytical appliances is not ubiquitous at a traditional operator. Many business users neither have access to data that they need to make informed decisions nor easy to use intuitive analytical tools available to analyse the data. Both IDC and Gartner forecast a significant investment in this area in the next three to four

years by the industry. In the old environment, when the majority of the data was related to plain old telephony service, this was not too critical but in the always-on, 4G environment, where only a fraction of the data going through the switch is related to a voice call, it is becoming imperative that the business users have access to business intelligence tools and solutions that are simple to use and intuitive. Such tools must enable them to get the insight into customers that they need to drive development of innovative products and services at price points attractive to their enduser customers. Something as simple as a search-like interface that most people are familiar with today provides an idea of the functionality of the tools needed. Business users are also asking for access to best practices and packaged solutions that enable them to get value from their systems rapidly.

â&#x20AC;&#x153;Data such as network usage, content accessed, customer service, location, preferences and consumption history are all required to get a full picture of the customer to enable rapid innovation and response.â&#x20AC;?

Customer intelligence in the emerging 4.0 era will need to be more comprehensive and feature all encompassing analysis of data from a large number of systems and data sources, not all of which are internal. It will need to analyse the data and execute or suggest an action in real-time while the end-user is still engaged. This can extend to dynamic rating and charging which will enable the service provider to innovate quickly and become more profitable. The information will need to be accessible and available to a lot more people in the organisation and support self-service for decision makers in a very easy to use and intuitive manner. The challenge for traditional operators is, therefore, clear. The good news is that tools and processes are available that will enable them to remain at the heart of the digital value chain.

VANILLAPLUS FEBRUARY/MARCH 2011

CUSTOMER DATA

Privacy for sale as personal data becomes a tradeable commodity While web companies suffer in the face of personal data leaks, operators have an opportunity to build on the trust that already exists between them and their customers and encourage the uptake of revenue-driving offerings, says Gordon Rawling. The US Consumer Electronics Association (CEA) recently released a report outlining the top five technology trends to expect in the year ahead, with privacy in the number one spot. As Sean Murphy of the CEA pointed out, our relationship with personal data is changing and private information will become commoditised as part of “a transaction where the consumer is authorising the use of their information and carrying out a business deal”. The author, Gordon Rawling, is director of EMEA marketing at Oracle Communications

The value of personal data has been put under the spotlight as connectivity has increased and new ways of sharing information have emerged. Facebook now has 500 million users and has been under fire for what have been deemed to be lax security measures leading to leaked personal data. Similarly, smartphone users across every platform have been warned malicious apps could record their data and send it across the world, potentially for something as damaging as identity theft. Scraper companies taking personal data from websites and providing them to clients for a fee are under no legal requirement to seek permission. Speaking to the Wall Street Journal, Todd Wilson of screen-scraper.com, said of its customers: "If we don't think they're going to use it for illegal purposes – they often don't tell us what they're going to use it for – generally, we'll err on the side of doing it." The CEA believes that companies wanting to make use of personal data on websites or mobile apps, should pay the consumers in question. This is a logical future for the trade-off between privacy and service, particularly as companies realise they will suffer heavy reputational damage if measures aren’t taken to protect users’ personally identifiable data – Facebook is a case in point. Every business relies on creating an excellent experience for customers, whether individuals or businesses. The more information that can be gathered to inform and tailor that experience, the

VANILLAPLUS FEBRUARY/MARCH 2011

more likely a business is to form a profitable customer relationship. But this isn’t news to communications services providers. Operators have always had a special relationship with customers, accessing not only records about habits, and latterly location or data consumption, but primarily holding the billing relationship. This is unique; operators are one of the few organisations that do not have a battle to gather customer data. If customers are uncomfortable with organisations having this information, the alternative is not to have a phone – almost unthinkable today. Media companies, retailers and organisations of every hue are desperate to gather such data in a bid to gain and retain customers, but consumers are becoming wise to the value it provides business. The days of scraping data might soon be over, as consumers learn to protect themselves, and get something back from their information. As comprehension of the commercial value of their data is on the up, global research recently commissioned by Oracle Communications found that 64% of 3,000 consumers surveyed said they would be willing to receive advertisements on their phone, but in exchange for price discounts or added services. However, the research also demonstrated that consumers are apprehensive about taking advantage of new offerings from operators because of privacy concerns; only one third expressed an interest in receiving locationbased advertisements on their phones, with a majority uninterested due to privacy worries. While other industries struggle to offer targeted and personalised services due to a lack of data, operators have a real opportunity to build trust with their customers and encourage the uptake of revenue-driving offerings. But users will rebel if they feel they are getting too much spam in return for too few benefits. Operators have to strike a difficult balance if they are to retain a trusted – and profitable – role in content provision to end-users.

SOCIAL MEDIA

EXPERT OPINION:

Servicing next generation users – real time integration with social media The telecoms industry has focused recently more on next generation technologies and less on the beneficiaries of those technologies, namely the next generation users. Corina Bulucea says it’s time operators learnt the new social language of the next generation. Next generation users expect seamless, ubiquitous, real time communication and access to services regardless of device or access technology; these are the users that fueled the enormous boost of social media, changing communication paradigms faster and more radically than ever in the history of the communication. This status quo is underlined by statistics placing Facebook as the third largest population worldwide with more than 500 million active users, half of which log on daily. To enhance their market position, operators must embrace these changes and add social media to their marketing mix, thus amplifying the impact of their offer and reach. With the services and content being distributed and discussed via peerto-peer connections across social networks, the message becomes more authentic and relevant, thus drawing more qualified customers. Real identity and viral efficiency Real identity creates stickiness and encourages social networks’ growth and reliability. Your friends validate your presence in the social network and offer confidence to newcomers. When this is combined with the trend for people to collect hundreds of friends – a single interaction can be distributed to thousands of people. In a market moving towards minimum commitment and engagement, knowing the identity of your customers beyond a telephone number, knowing their interests and social sphere of influence opens new gateways to marketing creativity. Marketing gains social and demographic information with an unprecedented degree of precision and accuracy. Social and mobile network integration Essentially there are three different levels of integration, each level more tightly integrated than the previous one. At the loosest end of integration, social media becomes another distinct marketing channel promoting the telecom brand in the same way as any other non-telecom product. This is valuable, but does not exploit the synergies of integrating with social media as a communication channel in itself, nor does it create seamless customer engagement.

The next level of integration involves connecting social media with the other components of operators’ marketing mix – such as embedding a Facebook ‘Like’ button on their own web portal or allowing web2SMS types of services, which leverage the billing relationship to charge for the messages as well as the infrastructure to deliver the service. Loyalty and churn reduction – one click away The tightest level of integration, in which social networking platforms offer the greatest opportunity for operators, is in enhancing customer loyalty. By owning a large customer base, operators can become promoters of social network connections. Becoming your customers’ social friend establishes a truly personal connection and thus an outstanding experience. Access to services – whether bonus reloads or access to customer care benefits – can be enjoyed in real time, simultaneously on the mobile phone and on the social network. For example a mobile operator’s application embedded within the social network can allow users to configure their services, perhaps view their service charges and make support requests in real time.

Corina Bulucea, marketing director, Computaris: Operators must add social media to their marketing mix

As the engagement with the customer is personal and more bespoke, it increases loyalty but there will always be a group of customers who churn. In case of churners, especially prepaid, together with the SIM, the operator loses its unique point of contact. However, when the network is integrated with a social network, another communication channel remains open towards the user. The cannot refuse promotion reaches the customer and if accepted the services are available in real time, while the user is still online in the social network. This kind of immediacy should generate a new ‘Like’. Real time integration between social networks and the mobile network is the next step for loyalty management of the next generation user. It links the all-pervasive social network with the all-pervasive mobile network to create a mobile network that is socially connected. VANILLAPLUS FEBRUARY/MARCH 2011

CONVERGENT BILLING

All change as hybrid models look to settle pre-paid vs. post-paid debate The inconvenient truth for billing in a changing industry is that there is no magic bullet

Rick Centeno: Templates should cover most offerings

Dominic Smith: Convergence is not just a billing and charging exercise

All is change. Service providers are attempting to offer increasingly personalised service bundles: fixed and mobile telephony, broadband, mobile broadband, television and TV on-demand, the evolution is rapid. How do you figure out what to charge and how to bill for these diverse service bundles: post-paid? pre-paid? pure-prepaid? And, if you find the answer, where's the flexible B/OSS system to manage service billing? Moshe Peterfreund, director of marketing, FTS notes that, "Originally the services offered to post-paid and pre-paid customers were very different and so billing systems differed to match this." For Eva Heumann at Orga Systems, "the ability to charge for all services in real-time assures revenues for mobile operators while at the same time meeting customersâ&#x20AC;&#x2122; wishes for cost transparency."

Gordon Rawling, director of EMEA marketing, Oracle Communications observes unified billing systems mean: "Operators will be able to radically improve their time to market for the delivery of new services and products, lower operational costs and improve their levels of customer service." Typically, the cost and complexity of consolidating pre-paid and post-paid systems has been great, with convergence seen as a technology challenge, rather than a business transformation. "Convergence is not just a billing and charging exercise, it is something that must span the whole B/OSS infrastructure and be addressed across the operator organisation and culture too," says Cerillion marketing director, Dominic Smith.

Operators want to "capitalise on the rapid growth in smartphone and data services usage," says Rick Centeno, head of charging, billing and care, Nokia Siemens Networks.

Operators must bring to market new pre-paid and hybrid services with an agile charging environment to support them. Rebecca Prudhomme, Amdocs vice president of product marketing says: "Service providers that offer customers a broader choice of services will drive customers to use more services, increasing customer stickiness and spend."

Ovum recently released data that showed 73% of service providers plan to expand their pre-paid offerings to include what were once seen as post-paid services. Fine, but 47% added that their new pre-paid strategy will require "moderate to large changes to their B/OSS systems".

For most, Peterfreund recommends a phased approach, focusing on new revenue-raising services, while maintaining traditional services, such as voice and SMS, on legacy B/OSS systems, "gradually moving these across to the converged system".

VANILLAPLUS FEBRUARY/MARCH 2011

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How do operators determine what to charge and how best to charge for diverse service bundles for both pre-paid and post-paid users? The answer, writes Jonny Evans, isnâ&#x20AC;&#x2122;t simple but adopting a hybrid billing model is the move of the moment.

Change isn't for everyone. Analysys Mason principal analyst, Peter Mottishaw, thinks mature tier-1 operators with well-established customer bases in pre-paid and post-paid services shouldn't rush. Typically these have different teams handling both sets of customers, posing "organisational barriers to convergence." Instead of rushing change, such operators should consider ad-hoc systems to test markets, offering selected new services to specific customers. Anandan Jayaraman, chief product and strategy officer, Connectiva Systems, says that even as operators struggle with organisational and technological challenge, they must also focus on long-term technological advantages. "Leverage smart discovery tools to detect unknown unknowns and identify new areas of leakage for which there are no standard KPIs," he says. Disparate billing systems can generate under- and over-billing problems, he adds. KPMG estimates the global telecoms industry loses $40 billion per year through revenue leakages such as these. Typically, pre-paid billing is connected to and dependent on the intelligent network and managed by the network or OSS team, while post-paid systems are managed by IT staff working offline. This isn't ideal. Ideally, these should be consolidated into a single B/OSS system to manage "all services, all customers and all payment types in all processing modes," says Rafi Kretchmer, director of product marketing, Amdocs. There's a range of solutions to enable migration to unified systems, but operators should assemble teams and transition plans before implementation begins, Rawling warns. "The technology available needs to enable the operator to undertake converged billing while offering a 360-degree snapshot of customer activity, in order to increase customer service and loyalty," he adds. Perhaps it's enough to merge existing systems? The founder of OpenSpan, which provides solutions that let operators run multiple systems through one unified interface, Francis Carden observes: "Merging two billing systems is always challenging." Business can't wait but IT cannot deliver overnight so working practices must transform. "Simply merging existing systems rarely achieves the desired effect. Heavy

investment in both types of systems over the years and the fact that both are managed by different departments only aggravates the situation," observes BSS evangelist, Tony Poulos at the TM Forum. He agrees operators may try to converge old with new systems to mitigate business disruption. "We are moving to an era where online charging systems and policy management linked to core accounting systems like Oracle and SAP will do away with the need for an independent billing system, but the jury is still out on that one," he says.

Gordon Rawling: Lower operational costs

Cerillion has developed what it calls a Total Convergence Architecture (TCA), to help operators to address these challenges. Based on the TM Forum's Application Framework (TAM) this can be applied wholesale or in stages. Cerillion's Smith explains: "The drive is not to replace all legacy systems but to use existing assets in such a way as to derive genuine benefit at the same time as moving towards the desired target architecture." Nokia's Centeno believes converged billing solutions should be built around a single, highly-configurable rating engine, "Pre-heated templates should be able to cover most of the common marketing offers, and thus allow quick access to markets," he says.

Anandan Jayaraman: Detect unknown unknowns

Tony Jackson, director of telecoms solutions, Convergys, thinks outsourcing sometimes makes sense. He claims using a contractor can reduce time to market for new billing systems dramatically "from up to 270 days to as little as four". The inconvenient truth for billing in a changing industry is that there is no magic bullet. Some report success with online charging and policy management systems that handle charging in real-time but allocate charges to multiple systems. Others adapt pre-paid systems to allow negative balances for accounts otherwise factored as post-paid. In a sense, establishing best practice in billing management is like asking how long is an ideal length for a piece of string. For most incumbents, hybrid transitory models seem in style today. In this industry, as in the market itself, there is no one size fits all strategy. Organisational practices and customer expectations are as challenging as technological or process change in this transforming environment.

Peter Mottishaw: Operators should consider ad-hoc systems

Tony Poulos: The jury is still out

VANILLAPLUS FEBRUARY/MARCH 2011

C O N V E R G E N T

B I L L I N G

EXPERT OPINION:

How to make convergent billing problems history Service providers have been struggling for years to implement convergent billing. On one hand, they need convergent billing to take advantage of new business opportunities and reduce costs. On the other, it’s always been viewed as expensive and risky. Dave Labuda describes a new way forward.

Dave Labuda, CEO, MATRIXX Software: By the time a billing system is implemented, it’s often already obsolete

Examples of successful billing consolidation projects are few and far between. We’re instead more familiar with service provider war stories as they strive to reduce the number of systems and silos, normalise data and billing processes and attain a single view of their services, offers, customers and revenue. Such billing transformation projects can take years to complete, to the point where some service providers have pointed out that by the time a billing system is implemented, it’s often already obsolete. While that statement is a little bleak, it goes to the heart of the issue: how can convergent billing projects become more successful? At MATRIXX Software, we’re suggesting a radical new answer to this question: forget about convergent billing altogether. Why? Because it is prohibitively expensive in terms of total cost of ownership, is too risky and doesn’t provide a clear return on investment. Objectives of billing transformation While convergent billing should deliver a host of benefits to the operator, there are classically three main objectives. First, service providers strive to speed time-to-market by creating a single view of services, packages and pricing. A single repository for all offerings results in much faster time-to-market, reduces redundant processes and ensures that what is listed on the bill or statement is consistent for all subscribers.

VANILLAPLUS FEBRUARY/MARCH 2011

Why transformation projects fail The TM Forum defines the billing domain as mediation, rating, charging, external partnerships and the final production of an online or paper bill. Billing systems are, by their nature, complex and contain a number of functional attributes, including tracking and rating subscriber usage, calculating recurring and non-recurring charges, tracking A/R and bad debt, payment processing, dunning, G/L accounting, revenue assurance, product catalogue, provisioning interfaces, partner settlements – and the list goes on. Each of these functions has multiple integration points with other functions and systems. Multiply this complexity by the number of billing systems that service providers typically own – between five and fifty – and we can see that trying to consolidate them into a single convergent solution is an enormous undertaking. Solutions Insights recently described how a large carrier in Asia-Pacific launched a twoyear, $200 million project to replace its customer care and billing system. Four years later the cost had doubled but the first release was still unusable. Gartner and other analyst firms suggest that up to 40% of major IT

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Second, service providers look to build brand loyalty and customer loyalty through converging pre- and post-paid subscribers onto one system. This allows a consistent

brand to be presented across pre- and postpaid customer segments and also enables real-time functionality for post-paid subscribers such as spend control and realtime promotions. Third, service providers look for operational expenditure efficiencies and improvements by reducing the number of systems and processes, which also reduces the risk of revenue leakage and billing errors.

projects fail. Other studies suggest that implementing new billing systems often involves doubled project timelines, costs escalating by tens or hundreds of millions of dollars and only a minority of projects ever being fully deployed. With such overwhelming odds against success it’s not surprising that most service providers prefer to continue sweating their current billing assets. Focusing on the goal Given the highly competitive landscape, the growth of mobile broadband, and the growth in pre-paid, operators cannot stick with the status quo. They must figure out how to increase operational efficiency, reduce time-tomarket and build subscriber loyalty. Innovative service providers are beginning to forge more personalised financial relationships with their subscribers, where service usage and preferences, QoS policies, credit history and average spend can influence the price paid for services. As smartphones and devices proliferate and mobile HD video permeates our culture, operators will continue to move away from one size fits all pricing models. Segmentation, class of service, application and service context will drive how mobile data services are offered and charged for and will become both a key differentiator for the operator and a source of additional revenue and profitability. Consequently, the parts of the billing system that actually touch the subscriber, such as packaging, pricing, real-time interactions and spend control are becoming far more strategic than payment processing, bill generation and other back-office billing functions. The solution is convergent rating and charging So what’s the answer? At MATRIXX Software, we believe implementing a convergent online charging layer, rather than trying to

consolidate all legacy billing systems, will help operators achieve most of the value of converged billing but at a much lower cost and risk. After all, subscribers are not won or lost by back-end billing functions, but pricing and charging have a very real impact on subscriber service usage, loyalty and ultimately profitability. In fact, the value of converging entire billing systems is questionable, particularly when a convergent charging layer offers the ability to consolidate packages and pricing onto a single system, provides a single view of subscriber usage and revenue, and converges pre- and postpaid subscribers under a single brand. In addition, significant operational simplifications and savings can be realised by consolidating all pricing and charging onto a single platform.

The parts of the billing system that actually touch the subscriber, such as packaging, pricing, real-time interactions and spend control are becoming far more strategic than payment processing, bill generation and other back-office billing functions

In fact, a convergent real-time charging solution acts as a funnel to streamline and simplify many operational processes. All service usage – voice, messaging and data as well as pre- and post-paid – feeds into the charging platform through well-defined network or mediation interfaces. Here it is transactionally processed and charged for and a full audit trail of rated events is created. The rated events are then published to various downstream systems for invoicing, ERP and data warehousing. By funneling all the usage through a single convergent charging layer, processes such as revenue assurance and fraud detection become more focused and efficient and the integrity of the data published to downstream systems is improved. With all this convergent real-time information at their fingertips, service providers may well agree that consolidating their legacy billing siloes is an unnecessary undertaking and that it’s more likely these systems will be decommissioned over time as all subscriber interactions, including billing and payments, evolve to become more real-time.

VANILLAPLUS FEBRUARY/MARCH 2011

REVENUE MANAGEMENT

Operators that have been sitting on top of tons of customer intelligence are finally being presented with an opportunity to utilise this intelligence to make business decisions as and when needed to boost revenues

Operators must use revenue management to exploit their assets properly Revenue management processes and people are coming under increasing pressure from a variety of directions. Each new offering, relationship, device or technology adds yet another variable that must be managed and protected, while their interaction drives an almost exponential increase in complexity – and vulnerability. If service providers are to properly exploit their intrinsic assets and build a long-term future for themselves, these issues must be properly addressed, writes Alun Lewis. other, with a greenfield development, you may have full documentation and clean data – but there might also be a lack of experience and understanding of what’s important and relevant when it comes to monitoring and eliminating risk. This is where there’s a need for higher skill set and better pattern recognition tools to spot anomalies that might

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Tony Jackson: Revenue management is about flexibility to meet customers’ desires

For Adrian Harris, senior consultant at Neural Technologies, the current combined environment of both legacy and new systems can present serious headaches. “On one hand,” he says, “if you’re dealing with legacy systems and data there may be serious problems with the quality of that data and the different formats that it may be held in. On the

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VANILLAPLUS FEBRUARY/MARCH 2011

FRAUD MANAGEMENT

EXPERT OPINION:

Fraud management and revenue assurance – a natural fit for closer integration? In the past, fraud and credit management looked to be natural targets for closer integration, but few operators went down this route. Instead, the industry has focused on integrating fraud and revenue assurance, but was this the right move, asks Adrian Harris? Five years ago, we predicted a trend towards closer integration between fraud and credit management. We didn’t dream this up ourselves – it originated from a forward looking operator. There is a natural synergy between fraud and credit: both are focused on the behaviour of customers and partners, both are interested in their consumption of products and services. But we were wrong: the trend didn’t materialise. Instead, the industry rallied around the idea of integrating fraud management and revenue assurance. From an organisational perspective, there is a strong alliance between fraud and revenue assurance. In 60% of operators, fraud directly or partially reports in to the revenue assurance function. But there is nothing natural about combining fraud and revenue assurance systems and analysis. I have a friend who owns an Amphicar: it’s fun, but I wouldn’t want to drive it any great distance and I certainly wouldn’t use it to cross an ocean. There are valid reasons for deploying an integrated fraud and revenue assurance system, just as there are valid reasons for owning an Amphicar. Mediation is a costly part of any operations or business support system, so only doing it once is a tremendous bonus; exchanging fraud cases and revenue assurance issues can improve the operational cooperation between the two functions; and sharing data storage – especially event data – sounds appealing. But fundamentally, the core detection mechanisms, processing timeframes and investigation techniques are different between the two domains. The most compelling argument for integration is cost. The perception is that a combined system costs less. There are two possible reasons for this: the vendor has chosen to discount the licence based on you buying products for two domains; or one or both domains are a compromise. Two solutions from a single vendor will likely have the same cost benefits and it is

more likely that they are up to their respective tasks. Regardless of whether you opt for an integrated system or two unintegrated or loosely integrated solutions, make sure you are really getting the best option for each. Deploying a fraud management system and, especially, a revenue assurance system is a costly and time consuming activity. No matter how badly it turns out, you are unlikely to be doing it again in the near future, so you need to make sure you will get a good return on your money rather than simply opting for the lowest purchase price. The first step to saving money if you are new to revenue assurance is to use the information from the systems you are monitoring. In many cases, your network is already capturing and reporting on the information you need to assure it is functioning effectively. If you invest enough time acquiring sound domain knowledge of the network and supporting systems, you’ll be surprised how much revenue assurance can be done for minimal cost.

The author, Adrian Harris is senior consultant at Neural Technologies.

Finally, before investing in a revenue assurance system, ensure the revenue assurance team has sufficient technology domain knowledge and spend some time to make sure you are getting the most from what is available for ‘free’. If you decide to buy a system, a combined fraud and revenue assurance system may not the best option. A single vendor can help contain cost and reduce the burden of contract maintenance, it may also help towards a common look and feel, common mediation and cases and issue exchange. But don’t compromise on quality for the sake of the simplicity of dealing with one vendor. Spend some time to find the best system in each domain. And I still believe that fraud and credit fit naturally together. There have been some encouraging signs over the last 12 months, but it has been a long time coming. VANILLAPLUS FEBRUARY/MARCH 2011

REVENUE MANAGEMENT

not be recognised by the more standard, audit-oriented approaches of the past. Are the systems configured correctly, have they been maintained properly – and are the right people in the right jobs?”

Mark Nicholson: Operators can rely on intelligent systems

Patrick McCarthy: Online charging system is the heart of revenue management

The author, Alun Lewis, is a freelance telecoms writer and consultant.

While the journey towards increased complexity began a while ago – most especially with the need to support real-time charging to fully enable prepaid offerings – those demands have continued to grow as Pat McCarthy, vice president of marketing at Telcordia, observes: “Charging itself has now exploded and has to deal with things like promotions, bonuses, multiple data streams being delivered at different levels of speed and quality, multiple accounts being involved in just one transaction in multilateral ways, balance transfers and loans and third party transactions – as well as mobile payments – all in real time.” He continues, “Change is however also affecting other parts of revenue management. For a start, policy management now has to be integrated with it as well. CRM, customer selfcare and point of sale systems also need to be instantaneously accessible and offer appropriate levels of visibility to the different parties. This includes giving customers the ability to change account details to modify sessions already in progress to upgrade, for example, to higher quality/bandwidth video. To sum up, the modern online charging system has become the heart of the new revenue management – surrounded by all the other real-time components like policy servers, financial services gateways, customer and partner self-care and so on.” But where’s the customer going to be left in all this? The term bill shock has already entered the headlines around the world and the increasingly byzantine nature of tariff structures leaves even telecom natives confused. Mark Nicholson, chief technology officer at Subex believes that, “Traditional billing still has a place and changing everything to real-time or online charging is not necessarily what the customer wants.

VANILLAPLUS FEBRUARY/MARCH 2011

Customers still like to get a bill and review and pay the total charge – even if they had checked on variable charges incurred during the billing period. In addition, they typically expect volume or group discounts based on the total usage over the billing period. Similarly, the revenue share/settlement to the content providers will continue to be a billing arrangement. Revenue management is about flexibility to meet the customer’s desires,” he concludes. When it comes to finding suitable architectures to support the emerging demands of tomorrow, SOA holds out many benefits in the view of Rick Centeno, head of charging, billing and care at Nokia Siemens Networks: “Any optimal solution has to deliver charging and billing functionalities in a SOA-compliant manner, offering easy integration points with a modular architecture that separates telco specific tasks and generic enterprise process – such as invoicing – into layers that are easily connected and independently configured, making daily operational management efficient and easier to adapt. It’s imperative that any converged billing solution should be built around a single, highly configurable rating engine while pre-heated templates should be able to cover most of the common marketing offers.” Coming from yet another angle, it’s also clear that an integrated approach to revenue management can also improve the focus on understanding the subscriber better as Tony Jackson, director at Convergys explains, “Advances in revenue management mean that operators can now rely on intelligent systems that ensure that compatible software billing systems are in place to meet the specific demands of each subscriber. Revenue management systems make it possible for operators to track and validate all subscriber accounts. As a result, operators who have been sitting on top of tons of customer intelligence are finally being presented with an opportunity to utilise this intelligence to make business decisions as and when needed to boost revenues.”

BUSINESS ENABLEMENT IN BSS

EXPERT OPINION:

The new dawn - new business enablement models in BSS Following sustained advancement in mobile, internet and wireless technology over recent years, communications service provider (CSP) find themselves faced with continuingly evolving pressures and challenges as they battle to satisfy an intensifying demand for rich new services amongst customers. Drew Rockwell, CEO of MDS, a provider of enterprise customer experience management solutions, looks at how new business enablement models in BSS could help CSPs to reduce their costs and better serve their customers. Faced with a number of challenges, including increasing mobile data and internet usage, converging networks and services and, most of all, falling ARPU for voice in the face of intense competition, the priorities for operators are to find ways that they can improve operational efficiencies whilst ensuring they can quickly rollout innovative new services, all with the objective of driving customer experience and business growth. For CSPs looking for ways to meet these challenges, the answer lies with operations and business support systems (O/BSS). Often regarded as the necessary backhaul to provision frontline innovation, O/BSS should be at the very heart of CSPs’ plans for business growth. It is the next iteration of BSS in particular however that will enable operators to quickly roll-out new services without having to completely overhaul their systems. The advent of new generation BSS The problem faced by operators is that they are constrained by high numbers of legacy systems in their backend. This leads to high volumes of product, service and functional silos, meaning that there is no ‘single view’ of customers or services and, as a result, increased customer experience complexity for the CSPs. As the evolution of the communications services industry continues, new business models will need to be supported by a greatly enhanced BSS layer that sits between the customer experience and back-office O/BSS in the CSP’s IT estate. For CSPs looking to adopt the billing transformation model, the investment required can introduce long term demands across their business, including costs that can reach into the high millions, time that is measured in years, ever-increasing complexity and, ultimately, the risk that the programme may fail to deliver, as many others have done. For the CSP that has already committed to billing transformation it is

even more critical to adopt BSS enhancements that introduce benefits in the short to medium term, helping to drive down costs and respond more efficiently to variable customer demands. In order to address these issues, decision makers need to evaluate alternative options that can overlay and coordinate existing systems quickly while leaving existing IT assets in place; otherwise they risk being left behind in a continually evolving marketplace. Transitioning past, present and future Transformation takes years, so CSPs need to find ways in which they can migrate customers in a staged approach to complement the introduction of new services as they emerge. Done at the appropriate time, this means they will be able to manage customer, partner and stakeholder relationships in the most efficient way possible.

Drew Rockwell: Providing a single, unified platform that offers a single view of the customer is critical

New generation BSS will provide CSPs with a layer that sits over existing systems and with provision for new services that will in turn provide a single view of each individual customer’s products and services, empowering them to manage their services on their terms. A unified layer keeps an existing O/BSS asset base in place while unifying the back end data sources and business processes. It’s all about providing a single, unified platform that offers a single view of the customer and enhances the customer experience. In the future, this flexibility will become more prevalent as new services are introduced that existing system assets will have to integrate with. In the next few years alone we can begin to see suppliers and partners emerging in cloud, healthcare, utilities, as well as the continuing and fragmented rise of digital content provision. New generation BSS is about making services and networks more unified and selling into market segments, such as business, with pace and agility.

VANILLAPLUS FEBRUARY/MARCH 2011

PRICING

The offers of telecom providers today are rather disappointing. A steady stream of flat rate offers in the market may impress customers – but why? In an effort to be one step ahead of the competition, Deutsche Telekom exclusively offered the Apple iPhone in Germany. This small advantage didn’t last for long though, as the iPhone is now available everywhere. Providers are stuck in the profit trap. To escape this trap, they are applying outdated business models in the hope of penetrating new markets. Differentiated brands and offers are crucial if a provider wants to be competitive and profitable in a saturated telecommunications market, says Dr Ekkehard Stadie. The author Dr. Ekkehard Stadie is a partner at Simon-Kucher & Partners and head of the consultancy’s telecommunicat ions and online business competence centre

VANILLAPLUS FEBRUARY/MARCH 2011

the same old telephony products. Data is often only an extra in packages. Develop the best future models with three approaches To position themselves in the market as providers of sustainable offers, operators must first precipitate a radical trend reversal. They must re-think their strategies, especially when it comes to strategic pricing. In order to stay competitive, and a cut above Apple and Google, they urgently need inventive revenue and offer models.

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Minutes and megabytes no longer particularly interest customers. The current media hype tells us frequently that the future of the telecom industry is in mobile data. Every day, new apps are entering the market. In the Apple App Store, customers can already choose from over 300,000 apps. Telephony offers have lost their lustre; mobile data offers are the new darlings of the sector. With their predictably stale offers, old-guard operators are quickly falling behind in the race for profits. Under these circumstances, it’s hard to understand why providers continue to offer

Focus on mobile data: Mobile data must be the core product. Providers can cash in on growing data volumes with differentiated and usage-based prices. Telephony, in the form of a flat rate offer, must take a back seat, as its revenue and usage will decline in the long run. In a reversal of the classic operator strategy, mobile data is optimally positioned and marketed as the focus product, while telephony becomes the extra service. Product bundling is one strategy by which usagebased data offers are bundled with calling time, which functions as an attention-getter for customers. Stop offering flat rates for services: Going a step further, telco providers must anticipate future trends and respond to their customers’ latent needs with smart pricing and offer structures. A growing number of customers want to be continuously online with several devices – not only on the job, but also in their free time. The need to always be online and networking with several devices affords the sector enormous potential. The decisive competitive advantage could come from offer models that dissolve flat rate tariffs and deviate from minute price-based basic fees. It may be conceivable to offer usage-based models for specific services independent of the type of device. This way, providers can profit from the diversity of new services. Charge based on the number of used devices: The ‘pay-per-screen’ model is another viable alternative. The customers pay for each device they use, and all available services such as mobile data and telephony are included in the price. For customers and households using several devices, the price per additional device would go down. This gives telco providers two critical advantages: for one, the market for devices is one of the few that continues to grow. Two, the ‘pay-per-screen’ model lets providers share in the growth and thereby create their own platform from which they can gain customer loyalty by offering new services. This model has another clear benefit. It can combat the industry’s major weakness: turning innovation into profits. You’d be hard pressed to find another industry that is so innovative, and yet so weak when it comes to pricing its innovations. Although telecommunications providers are constantly speeding up their networks, they also consistently lower prices for their services. This strategy is not sustainable. If a sports car manufacturer always lowered the prices for higher engine performance, it would no longer be in business. With a service package based on used devices, innovations could help the provider to stay ahead of the competition,

defend higher price points and gradually introduce new products to customers without the initial entry barriers. It’s a revolutionary price model, but it’s also easy to copy. However, since the industry giants can implement significantly higher prices through better offers, the model is still incomparable to any other.

Companies of other

Secure profitable text business Even if mobile data is gaining importance in the telecommunications business, its impact on revenue potential is not only positive. Mobile data is also a threat for profitable products like SMS, which are a source of high profits with extremely low costs at very attractive prices. SMS accounts for up to 20% of mobile communication firms’ profit. Providers have to find a way to secure SMS revenue – for example by pricing their offers creatively. A new offer must focus on customer value and integrate the advantage of competing technologies into the model. For instance, concepts similar to chatting by which SMS with short response times could be lower priced.

that pricing has to

industries that have considerably raised the prices for supposed commodities know

be on the top of the management’s to-do list.

Make pricing a top priority The radical changes in the telephony and data market coupled with the high level of saturation represent a major challenge for the entire industry. This is why it’s so crucial to tackle the topic of pricing on a strategic level. More mature industries are already familiar with this situation and have made pricing a top priority. Companies of other industries that have considerably raised the prices for supposed commodities know that pricing has to be on the top of the management’s to-do list. Operators need to take note of how other industries are thinking and working and transfer this to their own business models and market positions. The strategic re-orientation must be seen as a process in which the current and future needs of customers are the focus. There are enough creative and innovative offer models out there that support long-term strategic goals. Managers of telecoms firms need to do their homework right now and decide which model is best suited to their individual market position. One thing is clear: a new model is not enough. It must also be profitable and competitive. VANILLAPLUS FEBRUARY/MARCH 2011

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Cable Congress 2011 15-17 February, 2011 KKL Convention Centre, Lucerne, Switzerland www.cablecongress.com/

Telecoms CEM, CRM & Retention 14-17 March, 2011 Holiday Inn Vienna-South, Vienna, Austria www.iir-telecoms.com/event/CEM-CRM-Retention

3G, HSPA and LTE Optimisation 2011 15-16 March, 2011 Hotel Sofitel Munich Bayerpost, Germany www.3gconference.com/

Mobile Financial Services 15-16 March, 2011 London, UK www.mobile-financialservices.com/

Telecoms Fraud & Revenue Assurance 21-23 March, 2011 Holiday Inn London - Regents Park, London, UK www.iir-telecoms.com/event/fraudrev

Policy Management & Charging 21-24 March, 2011 Le Meridien, Piccadilly, London, UK www.policymanagementcharging.com/Event.aspx?id=437570

IP & TV World Forum 2011 22-24 March, 2011 Olympia, London www.iptv-forum.com/home IP is becoming compelling to an ever increasing group of service providers and utilised for an even wider range of environments. Not only have operators widely deployed TV services over their IP networks, but cable companies are increasingly adopting IP for the flexibility and addressability it enables. Major initiatives such as YouView are coming to fruition, building on the increasing consumer awareness created by the many early connected TV products already coming to market. The IP&TV World Forum again studies the IP based deployments in all these markets, whilst this year IP&TV World Forum brings a greater emphasis on TV business strategies, with a new track focusing on content acquisition, management and advertising. Keynote speakers include: Vincent Dureau, head of TV Technology, Google; Richard Halton, director, YouView; Dr Klaus Illgner-Fehns, chairman, HbbTV Consortium, Wu Dongli, general manager of Video Operation Center, China Telecom Group, Ian Mecklenburgh, director of Consumer Platforms, Virgin Media; and Manuel Kohnstamm, president, Cable Europe Managing Director, Public Policy & Communication, Liberty Europe. Management World Middle East 2011 March 22-23, 2011 Hilton Jumeirah, Dubai www.tmforum.org/ManagementWorldMiddle/8619/home .html The communications market in the Middle East remains a hotbed of activity. Investment remains high on the agenda and a tremendous amount of merger and acquisition activity continues. At TM Forum's Management World Middle East, hear from the region’s leading service providers and learn first-hand how they are shifting their strategies amid these market conditions to be successful in the future. The keynote session will be held Tuesday 22 March with an agenda focusing on: Creating an organisation focused around innovation – from culture to execution; Strategies for investing and partnering with other industries – profiting from digital content; and Aligning IT with the business – commercialising IT development to support business objectives more effectively. The session will feature executives such as: Saiful Alam, group chief commercial officer, Expresso Telecom; Harry Berry, president, New Venture Partners; Javed Mushtaq, chief information officer, PTCL; Eugen Schulz, chief information officer, Qtel; Tushar Maheshwari, chief commercial officer, Starcomms; Martin Creaner, president and chief technical officer, TM Forum; Olivier Robert-Murphy, head of business development, international, Universal Music Group; and Andrew Hanna, chief commercial officer, Viva. Policy Control 5-6 April, 2011 Marriott Hotel, Amsterdam, The Netherlands www.policycontrolconference.com/ Managed Services & Network Sharing 2011 23-26 May, 2011 Holiday Inn London, Regents Park, London, UK www.iir-telecoms.com/event/networkstrategy

VANILLAPLUS FEBRUARY/MARCH 2011

C L O C K I N G

O F F !

Sorry seems to be the hardest word Imagine my surprise when, having worked in the technology space for over 10 years writing about data centres, zero downtime, telecoms and the like, it finally dawned on me just how dependent I was on the technology in my life. The effects of a total loss of data comms and my providers’ unwillingness to offer a simple apology – made a bad situation worse. Picture the scene. It’s a Friday afternoon and I’m working away in the home office, happy in the notion that I’ve hit all my deadlines and things are just running along just tickety-boo. Then, a scene that would make even Captain James T. Kirk panic, with lights start flashing everywhere, starts. Only this time it’s not the Klingons, it’s Virgin Media. Well, my Virgin Media Router to be precise. It’s telling me we’ve lost transmission signals. Urrgggh. This wasn’t fair. I was right in the middle of trying to send important emails and edit some copy. What to do? With panic not being an option I casually reached for my iPhone in the notion that I could at least look at the information I had to edit, change it or tell someone what needed doing over the phone. Wrong again. As it happens Orange was having it’s own simultaneous and not so private nightmare all over again – they had another back in August 2010 – and I was just a call away from finding out that its data network was down. How could this be? Was karma really getting me back for failing to stop and help that little old lady with her suitcase the other day? When the call centre agent told me that I wasn’t going to be accessing my emails in a hurry the sweats set in. What was I meant to do? Without email, data and a carrier pigeon I was nearing the end of the creek without a paddle. And then it hit me, like Cliff Richard in a white catsuit. It’s [so] funny how we just don’t talk anymore. It would be a pain but I could do this stuff at a snail’s pace down the end of the line with my colleague over the phone. I mean it’s what they had to do 20 years ago right?

This I could deal with, what was harder to stomach was that at no point in the conversation I was having and in the statements I saw was anything other than ‘technical failure’ given as a reason for the fault and I certainly didn’t feel like my operator was being apologetic and loved me. At least they didn’t tell me, like they told VanillaPlus editor, George Malim, when he encountered problems recently that ‘there is too much electricity in your line, sir.’ Malim, without pulling rank or pointing to his position of influence within the telecoms industry, suggested this was a highly unlikely excuse and was able to extract £20 of compensation – although that did take him three hours. I, thankfully, was not lied to but a simple apology would have gone a long way.

The author, Mark Dye, is associate editor of VanillaPlus and a freelance technology journalist

It seems that sometimes sorry really is the hardest word.

VANILLAPLUS FEBRUARY/MARCH 2011

blog-led website and quarterly magazine for machine to machine communications the latest news, reviews and insights in the world of M2M

M2Mnow.biz Profit from a world of connected devices

POLICY 2.0 SUPPLEMENT FEBRUARY / MARCH 2011 VOLUME 13 ISSUE 1 P O L I C Y

C O N T R O L ,

C H A R G I N G ,

P R O F I T

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

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TALKING HEADS

Policy moves from protection to service innovation and monetisation, says BroadHop PROFIT GROWTH What's the right recipe?

MONETISING DATA Operators should go on the offensive

CUSTOMER EXPERIENCE Can Policy be the key?

CONGESTION MANAGEMENT

POLICY 2.0

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How to survive the 700% increase in smartphone traffic

The move begins

PLUS! Application-Aware Policy Management • Network Policy Management • Policy News

http://www.comptel.com/events

Take Charge of Your Services...

Policy Control & Charging

Mobile World Congress Barcelona, Spain, 14-17 February, Booth #1C06

C O N T E N T S

N E W S

Freedom’s never been free

NEWS IN BRIEF Verizon Wireless selects Bridgewater Systems

The shift towards Policy 2.0 is now underway. Policy 1.0 was all about protecting the network and, while all of those capabilities are still fundamental, Policy 2.0 shows a path for operators to use policy not just as what Bridgwater Systems’ David Sharpley describes as ‘a medicine’ for congestion but also as ‘a vitamin’ for new service innovation and monetisation. Too many users consider the internet as free whether it is mobile or fixed. They need to be educated to understand this isn’t the case. After all, it never has been, flat-rate service charges – at least – have always been applied. Just as people buy haute couture in preference to nylon tracksuits or fine wines instead of tanker wine, internet users are becoming ready to pay a premium for the services they need. That’s a critical means for operators to monetise, assure a decent experience and prevent their networks from falling over. That’s what Policy 2.0 promises and this supplement describes how it can deliver on that promise.

George Malim, editor, VanillaPlus

SUPPLEMENT CONTENTS S4

Policy 2.0 goes beyond protecting the network

What’s your recipe for profit?

Flat rate is dead: What’s next for operator business models?

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Policy – The key to unlocking the customer experience

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Can policy beat the iPhone effect?

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Operators forced to take steps towards Policy 2.0

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RAN-aware congestion management critical for quality of experience

BroadHop's policy control solutions enable telecom service providers to take control of their converged networks. The global leader in policy control deployments, BroadHop has more than 65 policy installations at service providers worldwide. Its open policy platform is the only one designed to support all elements of policy control, making it possible to efficiently control, monetise, and personalise any service, regardless of whether the network has new or legacy components, in-network or third-party services, wired or wireless access technologies. www.broadhop.com

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

B R I E F I N G

Bridgewater Systems has announced a new four-year framework agreement with Verizon Wireless under which it will provide products and services for Verizon Wireless’ network expansion. The value of the agreement between the parties is approximately US$56 million. “Verizon operates the nation’s largest and most reliable 3G network – and the world’s first large-scale 4G LTE network. We are committed to technologies that will ensure our customers an optimal, secure, and personalised mobile broadband experience,” said Ed Chan, vice president, National Network Operations at Verizon Wireless. “Bridgewater has demonstrated the ability to meet our performance and scalability requirements as we expand our network to deliver advanced mobile broadband services.” Under the agreement, Bridgewater will provide mobile control solutions as well as maintenance and support services for all current and future 3G solutions. In addition, the agreement provides the framework for Bridgewater to deliver new products and services to support Verizon Wireless’ ongoing network expansion across multiple access networks.

Procera and BroadHop to deliver integrated policy management and control for LTE networks Procera Networks, a developer of Evolved Deep Packet Inspection (DPI) solutions providing traffic awareness, control and protection for complex networks, and BroadHop, have successfully completed interoperability testing of their Deep Packet Inspection (DPI),policy management and PCRF solutions: PacketLogic and Quantum Network Suite. The integrated pure-play solutions will provide service providers with unprecedented network intelligence to address the scalability, performance, and service expectations of LTE deployments. The interoperability, which was completed to meet the demands of Procera and BroadHop joint service provider customers, is based on the latest 3GPP release 9 policy enforcement standards for mobile networks. “LTE networks are going to be subscriber and application oriented,” said Jon Lindén, vice president of marketing, Procera Networks. “Procera’s PacketLogic technology, which recognises and prioritises real-time services, coupled with BroadHop’s Quantum Network Suite, will enable operators to do service innovation that has immediate impact on topline revenue and bottom-line profitability.”

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VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

Policy 2.0 goes beyond protecting the network to enable service innovation and monetisation

Bill Diotte is chief executive and president of BroadHop Inc., a provider of policy control systems to more than 75 operators across the world. Diotte holds a degree in engineering from Queen’s University, a Masters in Business Administration from the Ivey School at the University of Western Ontario and is a graduate of the Stockholm School of Economics’ International Business Programme. He has previously served as president and COO of IP-based electronic payments company, Amigo Systems and has held executive positions at CAT Technology, SRI Consulting and Gemini. Here, he discusses the exciting service innovation capabilities that Policy 2.0 brings to operators and explains how the market is upgrading from Policy 1.0 to Policy 2.0. VanillaPlus: BroadHop has emphasised the need for service providers to make the shift from a Policy 1.0 bandwidth centric viewpoint to a Policy 2.0 application centric viewpoint. How far are we along in the shift from Policy 1.0 to Policy 2.0? Bill Diotte: We’re still in the early stages of the Policy 2.0 shift. For example, two years ago at Mobile World Congress, most CMOs and CFOs were talking about how to use policy management to protect the network. That defensive use is the origin of Policy 1.0 but by last year’s Mobile World Congress the situation had flipped and I was asked how to use the technology for service innovation. Policy 2.0 is definitely at the top of service providers’ minds and approximately 20% of our customers are looking to deploy these services and an application centric approach now. Operators are starting to look for ways to engage with the customer other than just throttling them. The dialogue on fair use and net neutrality misses the point because the intelligent application of policy can add to the end user experience and that’s something we – as an industry – have to focus on.

VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

VP: Are there geographic differences in the way operators are implementing policy? BD: Yes, there are changes based on the competitive nature of the markets that service providers serve. India and Ireland, for example, have very different profiles. We have over 75 customers in 30 countries so we truly have a broad perspective. In hyper-competitive, emerging environments, like India, the pressure on ARPU is enormous, churn is high and the majority of users are pre-paid so there’s a Darwinian battle for the customer. In those situations we’re seeing the use of BroadHop’s technology in very innovative ways to deliver sticky services. These service providers are very innovative and very rapidly deploy new services – and that puts a lot of pressure on technology. In America and the EU, the market is much more focused on tier one

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Everything offered by Policy 1.0 still applies in terms of protecting the network but enabling service providers to create quality of experience

is what makes the case for Policy 2.0. We see the market rapidly moving to Policy 2.0 during 2011 and 2012 and driving better customer experiences as well as acquiring compelling experiences. If an operator can only offer speed and price, that road eventually leads to zero.

operators that are looking at fewer use cases. Their approach is more basic and centres on aligning use with revenue generated. Operators are more interested in high revenue use cases and the demands placed on their networks. That’s why we designed the Quantum Network Suite – to provide massive scalability for these operators, whose policy is about limited use cases and scalability. VP: What are the most compelling use cases you are seeing today?

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BD: In emerging markets, we see a couple of very interesting examples. In Malaysia and India we offer individualised service every time a user creates a session. Every time a user gets access to a service they are able to control their networking experience. They can select the speed they require for a session. For example, they can select speed for video or bandwidth for email or they may choose to have premium speed. Users are able to adjust everything they

The dialogue on fair use and net neutrality misses the point because the intelligent application of policy can add to the end user experience

VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

Real time charging simply must be included in the policy management because if you can’t monetise, you’re really falling short of the potential. The ability to control, monetise and personalise is very important from the end-to-end solution point of view.

consume on the network and this type of proposition really supports the concept of the smartphone becoming a remote control for users’ experiences of the network. Another example is Policy 2.0 for parental controls. The parent has control in the sense that they can specify the parameters of their child’s account and, for example, set the account for no text messaging, no chat and limited surfing within school hours or that internet ‘lights out’ is at 10pm. There is also content filtering capacity to ensure only age group suitable content is viewed. The key is to give that filtering capability to the parents and make it highly tailored. These are some of the services we are seeing in the more competitive markets that are innovative and compelling. In the US and the UK it is more mainstream with classic Policy 1.0 services such as congestion management, bandwidth capping, tiering and mechanisms to prevent bill shock. However, that is now starting to shift to provide services like video optimisation. Operators can profile the network in a time of congestion based on individual subscribers and will be able to maintain a high service level if users wants high resolution video. Another example in developed markets in which we expect to see strong interest over the next two years is in managing multiple networks from a single control plane. Fixed and mobile networks can be controlled from a unified policy control plane and about one third of our customers operate multiple fixed and mobile networks. That obviously provides a lot of advantages and opportunities for service providers to create competitive solutions and also provides opportunities for unique services to be brought to market. VP: What are the requirements to enable the shift from Policy 1.0 to 2.0? BD: The old tools of Policy 1.0 simply aren’t sufficient to deliver Policy 2.0. Current modes of technology and installations are inappropriate. If you start from the top, there’s really the level of scalability required to deliver Policy 2.0. Our previous generation architecture was monolithic so that scaling up meant larger servers and databases were required. The problem with that is, as transactions move from 3,000 transactions per second to 5,000 and 10,000, scaling up becomes more expensive than the policy management software itself. If the hardware and the databases start to cost more than the value being delivered, a serious question arises which we set out to address with our Quantum Network Suite’s fully virtualised architecture. This next generation architecture means blades can be added and operators can scale out in a

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very linear way so the cost per transaction remains uniform and linear. The second aspect is in enabling the application interface for the service provider to create an applications gateway. This allows internal, onnet applications to access bandwidth and change the features of the network via an additional layer with an intelligent interface that is developer friendly rather than using the rougher, stricter telecoms protocols. The ability to monetise and have real time charging capability within the framework is also critical. Real time charging simply must be included in the policy management because if you can’t monetise, you’re really falling short of the potential. The ability to control, monetise and personalise is very important from the end-toend solution point of view. The final element is the ability to configure new services without a requirement to develop new code. New service development can take 10 to 12 weeks and 10,000 to 20,000 lines of customer code. This really inhibits operators because of the time and complexity of development involved. More often than not, the policy vendor must do this development and the operator has very little leverage over the timeframe or price. With Quantum Network Suite, we break through that captive vendor model, providing tools that allow operators to create their own policy definitions and publish unique and special features separately. That gives feature freedom to the operators and allows them to deliver against the feature requirements that they receive more effectively. VP: What is the TCO of policy? Is there a cost to taking a wait and see attitude? BD: There are a number of different ways to look at this question and we’re currently in the process of taking a hard-edged scientific approach to defining the TCO of policy. Policy typically costs four to five percent of the total cost of network build out and that’s a reasonable expectation. That makes it the icing on the cake and in terms of the intelligence and flexibility it brings the network, it has more impact than the cost suggests. TCO becomes more important from an architecture and scale perspective as we measure the monetary impact. Some would look at policy as an element that could be given away to enable a sale of radio equipment or gateways. There’s nothing wrong with policy as a deal enabler but you certainly get what you pay for. With the disproportionate impact that policy can have on an operator’s competitiveness and bottom line, the four to five percent is well spent on a vendor neutral Policy 2.0 platform that can drive not only the use cases of today, but also those of the future.

POLICY FOR PROFIT

EXPERT OPINION:

Mobile data growth: what’s your recipe for profit? Operators must select their approaches to policy control carefully if they are to maximise on the benefits both in terms of protecting their networks and in terms of improving the experience their customers receive. David Sharpley advocates a cookbook approach to bring all the ingredients together as a recipe for success. Policy control once again looks set to be one of the trending topics of telecoms in 2011. Partly this is driven by the gap between growth in mobile data traffic, spurred by the onslaught of new devices and applications and the corresponding revenues. Partly it’s the idea that operators are simply running out of spectrum and therefore data bandwidth. And partly it’s driven by the already very real issue of network congestion, caused by intensive bandwidth applications such as video, that has a detrimental effect on the customer experience. Lastly, it’s driven by the need for service providers to launch innovative new services to help bridge the revenue gap and create market differentiation. No wonder policy is so topical. Policy control is a key component of the intelligent control plane – which includes policy, subscriber and service controls. At Bridgewater, we think about these intelligent controls as ingredients. By combining the same ingredients in different ways, operators can choose from a cookbook of recipes to achieve several simultaneous objectives: (1) transform networks to meet mobile data growth demands; (2) innovate with new services to drive customer loyalty and new service revenues, while; (3) optimising current networks to manage network growth and ease congestion. Transform-innovate-optimise are fundamental to all elements within the cookbook, which embodies our comprehensive and global control plane experience. Three popular recipes in our cookbook are tiered services, pre-purchase service models, and machine-to-machine (M2M). Tiered services Intelligent controls provide bandwidth, time or application usage metering based on real-time subscriber, device and application data. This enables operators to offer tailored service packages without touching charging systems. For example, a data plan with unlimited social networking, but with quotas for local and roaming data. Also, the well-talked about bill shock can be avoided by notifying customers before they breach usage limits. This opens up incremental revenue options, such as temporary bandwidth boost services or upgrades to a new tier.

Policy control can enable service providers to innovate their data services and application offers, for example allowing music or video streaming at home, but not while roaming; or allow mobile gaming-quality bandwidth in the evening, but not during the day. The new prepaid While prepaid voice service models have become increasingly complex, prepaid data service models are simpler; operators typically offer fixed-rate plans based on time, bandwidth and application usage. Examples include data, application or roaming passes for a fixed period of time. Since these plans are pre-rated, they do not require an online charging or prepaid billing system. Intelligent policy controls are used to meter usage in real-time based on parameters such as location, time, application and bandwidth usage and track this usage against plan limits which are paid for in advance by the subscriber. Machine-to-machine services M2M services are experiencing a period of rapid growth and represent a promising new revenue opportunity. These services pose unique challenges in that they require full identity and application-specific policy. M2M applications demand differing levels of connectivity and have a wide variation in key parameters such as machine identifiers, security and prioritisation levels, data session durations, bandwidth requirements, latency, mobility and throughput rates. Intelligent service and policy controls combined with machine data play a central role in addressing these challenges, managing how, when and under which circumstances devices can access the network and consume network resources. For example, public safety services benefit from priority service control that includes authentication and authorisation, as well as priority policy control, to provide dynamic bandwidth priority for CCTV cameras. On the other hand, telemetry or vending machines may require policies that permit low bandwidth requirements during the day, with a burst during off-peak hours when most data is sent. These intelligent controls play a vital role in supporting these different M2M requirements.

David Sharpley, senior vice president, Bridgewater Systems: Operators must combine the ingredients of subscriber, service and policy controls

Want a recipe? This is just a flavour of the contents of the cookbook and these three uses cases or recipes comprise a small subset of those available from the full cookbook. By carefully combining the ingredients of subscriber, service and policy controls, operators can ensure that they are in the best position to profit from mobile data growth. The Bridgewater Systems cookbook is published as a whitepaper. For more information, visit www. bridgewatersystems.com or the Bridgewater Systems stand at MWC 1F47 in Hall 1.

VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

APPLICATION-AWARE POLICY MANAGEMENT

EXPERT OPINION:

Flat rate is dead:

What’s next for operator business models? Operators are scrambling to solidify a position in the value chain of mobile broadband. One important driver for this, as every presentation in the industry shows, is increased demand and, in particular, flat revenue relative to that demand, writes Christopher Hoover. We’ve all seen the graphs where demand increases up and beyond revenue and the cost curve hovers ominously above that. In spite of that over-familiarity, this is indeed an important issue in the industry and much conversation has rightly been had regarding what to do about it.

Chris Hoover, vice president of product management, Openet: Contextualising usage benefits everyone

Typical solutions revolve around resource control, such as throttling or usage caps. A basic assumption with these solutions is that users are interacting with the internet just as they always have, but more so. However, this isn’t true. How people use the mobile internet is changing. Consider that in 2008, browsing commanded 80% of facetime – the amount of time users spend interacting with a particular service. In just two years, that shrunk to only 50%. Most conservative estimates show that mobile application store revenue will grow to $15 billion over five years. This trend is accelerating, with 3.8 billion applications downloaded in the first half of 2010 – making it on track to double the metric from 2009 of only 3.1 billion for the whole year. In short, applications are moving rapidly to replace the browser as the dominant driver of mobile internet access. People don’t use the browser to read the New York Times, engage via Twitter or socialise on Facebook, they use the respective apps. Indeed, the concept of general internet access is less and less meaningful. This is important because applications enable context sensitive business models and these models provide a flexibility that’s key to addressing the cost/revenue gap.

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Another important implication is that applications make flexibility – in terms of charging and policy – much easier. Instead of indirect analyses of packet flow to enable application-aware policies and charging, this awareness is available from applications by definition. The application simply tells charging and policy systems about itself directly, through an interface such as Rx. Moving beyond service awareness, applications can enable policies and charging rules to be applied based on how that application is being used. For example, charging methods can change if a user selects premium content in a movie streaming application. QoS variables may be changed based on promotions defined by the content provider and delivered through the app. Policy and charging can both change if a VoIP application adds another participant, a video component or exchanges a file. In addition, enterprise-specific value can be provided via application context. Corporate users don’t want to have to carry around two phones and segmenting personal and business use of one device is much more easily accomplished with an application aware network. Operators have the ability to offer enterprise users the option to use their personal smartphone as a business device, without any party worrying about potential fraud. Usage of applications like SalesForce.com or Google Documents can be

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Implications for operators Applications enable convergence—they enable easier management so that cross platform consistency can be more easily

achieved. A good example of this is how cable operators in the US are using applications to enable delivery of media between platforms. The application can query profile and entitlement information maintained within the operator and ensure a well understood and consistent technical environment between devices, such as codecs, for media delivery.

recognised and billed to the corporate account, while designated consumer-facing apps like Pandora and Moviefone would be addressed on the personal bill. A final, obvious implication is that to capitalise on any of these opportunities, there needs to be a robust interface defined between the application layer and the operator’s policy and charging infrastructure along with a deep integration between those infrastructures. Contextual pricing Currently, operators have three data charging model frameworks from which to choose: unlimited plans, usage-based pricing or context-based pricing. While unlimited plans are well known to the public at large and usage-based charging is easily understood as a pay-for-what-you-get model, applicationaware networks could enable context pricing for network usage that benefits customers beyond what we have seen in the market to date. For example, if a customer is primarily interested in Facebook and Twitter, a plan could provide inexpensive all-you-can-eat usage of those applications. Applications can be priced based on usage context as well. For example, a movie streaming application may be sold free, with unlimited data consumption, with the caveat that usage be restricted to offpeak hours. Alternatively, the same application may also be available in a premium version that supports peak hour usage. The point is that flat-rate or consumptionbased pricing provides insufficient flexibility for both the customer and the operator, to the detriment of both parties. Similar flat-rate and consumption-based plans across operators stifle competition and peak period congestion remains an issue, affecting customers and operators alike. Congestion management options are constrained and are less effective than is otherwise possible. However, if customers stand to realise significant savings by choosing to use an application off peak, traffic periods would shift and subscribers would pay less for better performance. Everybody wins. What comes next? If comprehensively and understandably deployed and disclosed, pricing models with a contextual basis for charging present the best way to improve the experience for the large

percentage of users, while fairly and appropriately monetising content, it’s a tremendous opportunity for operators to give their subscribers clear, common-sense pictures of how traffic moves over the network. They can then enable customers to tailor their own usage however they desire.

An obvious implication is that to capitalise on any of these opportunities, there needs to be a robust interface defined

In addition, devices like the 3G iPad have changed the game in terms of how content is being accessed and by whom. For devices with a selling point of being inherently multimedia rich, users here will be even less tolerant of poor service quality. Devices like these demand built-in prioritisation if carriers want to deliver on these expectations consistently and with the applications users care about.

between the application layer and the operator’s policy and charging infrastructure and a deep integration between those infrastructures.

From a consumer’s perspective, the beautiful thing is that operators don’t have to violate net neutrality rules when prioritising – operators can look at their data and know that YouTube, for example, is the most frequently accessed application over a tablet device and flag it for high-priority access. Evaluating and prioritising based upon the context of usage is just a first step in creating a new breed of mobile data billing. By maintaining the status quo, operators simply aren’t making the most of their network investments and both operators and subscribers suffer. Contextualising usage enables flexibility, increases competition and benefits all stakeholders. While these methods could be employed in a variety of degrees, operators that take context into account are undoubtedly much better positioned to give their subscribers the experience they want.

Three dimensional payment systems

VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

EXPERT OPINION:

Policy – the key to unlocking the customer experience? A truly great customer experience is seen as the holy grail of telecoms. But why is it important, why does policy play such an essential part and just how can you become more profitable by dividing your data service into chargeable service assets and deliver the experience to meet your customers lifestyle, asks Graham Cobb? Following the recent explosion in data consumption, operators are racing to regain profitability, which will only happen through service differentiation. Customers need to perceive value with differentiated offers for which they are willing to pay.

Graham Cobb, marketing director, service delivery solutions, Telcordia: Customers need to perceive the value

Policy will be one of the great enablers for service differentiation in the coming year as it moves far beyond just helping operators deal with data overload from consumers desperate to satiate their 24/7 communication needs. Operators need to change their mindset to fully understand how policy can best be implemented to deliver an experience that meets their customers’ expectations and at a cost that meets their own return on investment (ROI) needs. They need to see the bigger picture and regard policy as a strategic enabler in its own right, rather than just a cog in the machine of reducing cost.

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Delivering these services whilst successfully monetising data isn’t becoming any simpler for operators. Not only do they need to manage people’s data usage, but they also need to be able to divide their mobile broadband offerings into chunks for which people can pay, which can be hard to profit from. One solution may lie with the theory of yield management. According to Glenn Withiam of Cornell University: “the strategic levers of yield management can be summarised as four Cs: calendar, clock, capacity and cost. They are bound together by a fifth C: the customer”. In recent years, consumers have been spoilt with all-you-can-eat data plans and packages and now expect to have something for nothing. That model is unsustainable and operators are suffering decreased revenues and congested networks as a result. The challenge is to build and capitalise from different levels of customer experience that have perceived value and are something customers are willing to pay extra money to receive. One immediate option is to offer customers the ability to pay to ensure high-quality access to the network, even at peak times. This aligns plans with customer willingness to pay – allowing more revenue to be generated from the less price-sensitive customers. At the other extreme, successful options involve customers being able to pay for only what they use. One example is Indian operator, Tata Docomo, which has introduced a variety of pay-for-use options, including social media

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At its most basic level, policy control is a series of rules applied to the way customers access mobile broadband, including time, location, service and how much the customers pay. Initially, operators were restricted to static policy rules that affect the entire customer base. Examples included imposing monthly download limits on all users or banning peerto-peer or VoIP traffic. Even in the mass market, these restrictions end up severely limiting appeal, as their use of mobile devices is becoming increasingly complex. Static policy control does not allow for operators to segment their customers, in the way that other industries can with their gold- or platinum-level customers. Because some customers have – and want – special requirements that provide them with added value, they are willing to pay

more to receive the extra service and that is exactly the position that operators want to be in.

add-on packages, discounts for those only visiting one site, or who send short text messages. This has resulted in an increased market share and through its infrastructure, Tata Docomo has the flexibility to accommodate consumer requirements both now and in the future. It is only a matter of time before this model becomes more widely adopted by other operators who will look for this type of offer flexibility as a differentiator and a revenue generator even among the most price sensitive consumers. Deciding to offer new services is increasingly complex – not only are customers more discerning, demanding and knowledgeable, but operators also need to take into account the substantial differences between markets for customer requirements. In the US, the iPhone was the tipping point for the mobile broadband data explosion, whereas in Eastern Europe, it was the laptop. These are just one of the variables that need to be taken into consideration, particularly as the increase in demand hasn’t correlated with an increase in profit. It is, in fact, those more ‘advanced’ markets that have the biggest resentment in paying extra, chiefly because developing nations haven’t embarked on all-you-can-eat data pricing wars and the expectation of the subscribers, from the beginning, has been different. For the offers to be successful, operators need to put themselves in the marketers’ mindset to understand exactly what it is customers want, and what they are willing to pay for, ensuring they can offer attractive packages to customers; what they want, when they want it and respond to fast shifting market conditions. Marketers need the tools to be able to create personalised and relevant services for each market – segmented, differentiated and aligned with customer willingness to pay. In Brazil, Oi has used this service-based strategy to allow it to be both the perceived price leader as well as one of the most profitable operators in its market. There are almost limitless options for the policies themselves – adding on cheaper ‘offpeak’ data, offering fewer bytes with a free movie each week or extra bolt-ons, such as content, in lieu of the extra minutes, which used to be commonplace with plans. However, these need to be carefully targeted for the correct market. As referenced earlier, Tata

Docomo has had a lot of success offering services based on the length of texts and number of sites visited, whereas in a mature market like the US, an additional content allowance would be a preferable addition.

An obvious implication

For all these options to be easily incorporated, it is essential for operators to have the tools to efficiently and effectively provide not just services, but also ensure that the network can cope with the ebb and flow of traffic and accommodate the different charging scenarios. The close integration between charging and policy is only just becoming available.

needs to be a robust

Of course, customer experience is not only what customers are willing to pay for, but also the overall quality of the experience, that wellused ‘X Factor’ that will make customers happy to part with their hard-earned money. It’s an obvious observation, but the more a customer enjoys their experience and the higher the quality of service they receive in terms of both product and customer service, the more they will be willing to pay additional money to use it.

infrastructure and a

is that to capitalise on any of these opportunities, there interface defined between the application layer and the operator’s policy and charging deep integration between those infrastructures.

It is also essential as part of the ROI of policy to include sufficient measurement abilities. For policy to continue to be effective, it needs to be measured across a variety of attributes, including quality of service and traffic, so the changing needs of customers are analysed and anticipated where possible, ensuring a high level of customer satisfaction and subsequently, stickiness. What does the future hold for policy? Traditionally, it has been incredibly difficult to predict what customers will do next – will the latest handset be most important or will it be the remote access of a certain website or social network? These trends seemingly come out of nowhere and at a speed that it can be hard to keep up with. Speed will continue to be important for operators – speed of connection, as well as the speed of service innovation. It’s also important for operators to ensure that they are ahead of the competition in a fiercely competitive marketplace. The correct tools need to be in place to ensure rapid rollout of new services and to enable operators to deliver the experience that meets the customer’s lifestyle. Operators need to ensure that they can accommodate customer needs, whilst making it feel like a personalised plan. Only then will they truly deliver the ultimate customer experience.

VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

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Even the nice things don’t come for free…

We expect to pay for the things we need and enjoy. Mobile data services are no different. But if you’re a Service Provider and unable to connect your products to the charge, costs spiral and churn occurs. To segment products, control usage and to charge for what your customers use, talk to Volubill.

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M O N E T I S I N G D ATA

EXPERT OPINION:

Can policy beat the iPhone effect? Policy management’s potential is only just being realised as operators look to Policy 2.0 as a means to monetise data traffic rather than simply control consumption, writes John Aalbers AT&T’s exclusive right to offer the iPhone ended on 10 February with Verizon getting its own CDMA version. The Verizon iPhone was probably the worst kept secret in the technology world, but a close second – and perhaps cause for concern at Verizon, has been the poor performance of AT&T’s network since it began offering the iPhone in 2007. AT&T’s troubles don’t guarantee trouble for Verizon. Some even argue that Verizon’s network is better prepared for the iPhone but, while we can’t know exactly how many people will go for the Verizon iPhone, there will be incredible demand for it and, potentially, a negative iPhone effect for Verizon. Perhaps a harbinger of future complications, the moment the announcement became official, a torrent of web traffic hit Verizon’s website, causing page-load times to more than double. It’s intriguing then to think about how Verizon might handle an increase in mobile data demand differently to AT&T and how using policy management both defensively and offensively may help operators avoid data demand problems. AT&T found out the hard way that mobile data demand can sabotage network performance. When data choked its network and customer complaints flooded in, its response was two-fold. Last year, AT&T increased its infrastructure spending by 10% to improve its wireless network. Having more capacity and faster connections is one way to keep mobile bits and bytes flowing smoothly. The other way to keep profit margins and customer experiences positive is to protect the network with defensive policy controls around pricing. AT&T was the first to drop unlimited data plans. The network giant defended its new tiered offerings by assuring subscribers the majority would save money because average usage falls within the provided bandwidth. But really, AT&T needed to protect its network to boost customer experience and balance costs with revenue. The benefits of these defensive strategies, however, are questionable. Network reliability is

still a problem and, as mobile data demand is only going to rise, more customers will incur overages as they reach the limits of their plans. Good for incremental revenues perhaps, but not customer satisfaction. Rather than trying to keep customers’ usage habits in check and prevent them from accessing the amount of data they want, operators should get on the offensive, using policy to realise incremental revenues while providing additional value to customers. As I write this, the first official rules for net neutrality have been formalised in the US and they could be the starting gun for more unique policy models in that region that reflect what other global operators have been doing for some time. For example, with the leeway the new rules allow for wireless traffic prioritisation, operators could begin to implement policies based on applications, data type or time. Facebook addict? Get a Facebook premium service that gives you faster access to those applications on your mobile device for a slightly higher price. Night owl? Get a lower data rate if you agree to only have mobile data access during off-peak hours. Each of these service combinations presents an opportunity to operators for market differentiation; to make their customers feel appreciated and give them real added value; realise incremental revenues; and obtain more control and predictability over the way data is consumed on their network. Prioritising data could actually be an indirectly defensive policy measure. If operators can predict that some subscribers will only use certain kinds of data, they can offer what’s not being used to someone else.

John Aalbers, CEO, Volubill: Defensive strategy benefits are questionable

Rather than trying to keep customers’ usage habits in check and prevent them from accessing the amount of data they want, operators should get on the offensive

Operators have figured out how to prevent some of the data demand troubles with defensive pricing strategies using basic policy management tactics. That was then and the future is now. Data demand will only increase, and defensive tactics will only be – somewhat – effective for a short time. Operators need to get on the offensive and use policy in a more proactive manner. VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

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POLICY FOR NEW REVENUES

Operators forced to take steps towards Policy 2.0 While Policy 1.0 was more about protecting the network from congestion, latterly the focus has shifted towards being a means to generate additional revenues. Mark Dye takes a look at what operators have been up to. Having come to a crossroads operators have been forced into action. Mobile broadband and the increasing penetration of smartphones and tablets has led to an explosion in data consumption and, as a result, many are seeking ways to regain lost profitability, more often than not realigning business models in the process. As Pat McCarthy, vice president marketing, service delivery solutions, Telcordia, notes, “Operators are starting to provide more robust policy management solutions that achieve a two-pronged objective to deliver an experience that meets their customers’ expectations and at a cost that meets their own return on investment needs.” For this to be successful McCarthy says operators must view policy as part of the overall customer experience, rather than a means to control networks, as customer services and the experience of dealing with the operator play just as important a role as the services on offer.

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With mobile data seen as the acknowledged revenue growth engine, Jonathan Downey, director of product marketing, Openet, believes that this expanding vision is bringing operator marketing departments ever closer to all things data.

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“From Openet’s experience, once marketing are made aware of policy management capabilities, they are very quick to embrace it to help them quickly roll-out initiatives to differentiate their data offerings, to modify data plans conditions and smooth the subscriber experience,” he says. But it’s not just those within marketing who are keen. This new era of flexible, intelligent realtime policy management solutions, tagged Policy 2.0 by some, allows subscribers to have more control over their network experience and looks set to increase dramatically, according to Jukka Luoma, head of product management for Voice and IP Transformation, Nokia Siemens Networks. “In today's networks, policy is applied to about 10% of subscribers,” he says. “However, with the advance of LTE and next-generation networks, we might see policy applied to the entire subscriber base.” Luoma says that Nokia Siemens Networks has already seen significant growth in its policy control business. “Our customer base has increased by 550% during the last year and we see this trend continuing in 2011,” he adds. Of course operators are already using policy control for other purposes than just defending the network. In Europe, we have already seen it used to implement the EU legislation on roaming cost control, whereby a cap on spending on data usage abroad is applied. As Olivier Suard, marketing director, Comptel, explains, clients like TeliaSonera see this as the first step towards offering differentiated and personalised services. “For them, policy control allows the definition of services with different quality of services, which are adapted to their customers’ needs and price expectations,” he says. “In TeliaSonera’s case, this is particularly important as they roll out their LTE network in various countries.”

lacks important context,” he adds. “Giving subscribers the option to purchase data services in real-time, along with providing information about pricing, subscriber usage and balances provides strong monetisation opportunities.” So, policy combined with charging makes it easier for operators to offer customers options to extend fair usage quotas, to purchase service passes, and to make a real-time offer to temporarily improve the speed of their service by buying a bandwidth boost. Susie Kim Riley, chief marketing officer, Tekelec, agrees, pointing to her company’s own Policy and Charging Rules Function (PCRF) offering which enables operators to introduce tiered services, giving subscribers the opportunity to experience broadband in a way that fits their needs and pay accordingly. “The simplest analogy might be the equivalent of giving consumers the choice of expedited shipping versus standard shipping,” she says. This strategy allows operators to open up mobile data plans to a wider range of customers and obtain further revenue from the heaviest users, while offering more reasonable plans to other less demanding users.

Jukka Luoma: NSN customer base increased by 550%

Indeed, by managing subscribers during peak hours, operators can save money by not having to over-provision the network in order to meet demand. “Such an approach moved Vodafone Hungary from number three in the mobile broadband market to number one,” says Riley. The real goal, she says, is to give subscribers the best possible experience by linking the value of services with network quality and a high customer experience. “The risk is that by associating usage with cost on a per-byte level only, service providers overlook opportunities to better identify plans that subscribers want, such as a high-definition video plan,” she adds.

Suard says that such an approach means that instead of being punitive and indiscriminate about limiting network usage, operators are using differentiated services and price plans to control this – effectively letting the customer decide.

With McCarthy revealing that the most common challenge raised by operators is the need to create a continuous stream of new promotions and offers as well as quickly responding to competitor offers, he suggests that 2011 will be remembered as ‘The year of real-time’.

Luoma believes that to increase revenues, operators will use policy management to provide on-demand network services on top of flat rate tariffs. “This is a win-win situation as the endusers can stay with flat rate tariffs for regular daily use and purchase additional resources only if required,” he says. “Operators in return can then charge for increased network service demand.”

He believes this will be marked by more operators realising the value of networks and moving towards real-time policy as a means to invoke a ‘two-sided’ business model where services-based revenue can come from partners and advertisers, as well as end users, just like the internet industry.

Downey says that policy’s role as a revenue engine is cemented when combined with charging. “Making policy decisions based on network resources and subscriber entitlements

Pat McCarthy: 2011, the year of real-time

Olivier Suard: Let the customers decide

Susie Kim Riley: Service providers overlook opportunities

“We can expect to see innovative offers such as weekly film downloads, or plan discounts for receiving advert as means to become more profitable,” he adds. “Operators need to create offers that customers can relate to and then deliver the experience that the customer expects.”

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VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

S15

CONGESTION MANAGEMENT

EXPERT OPINION:

RAN-aware congestion management critical for quality of experience We are in the age of the data tsunami. Equipped with increasingly smart devices, 3G dongles and air cards, broadband consumers are devouring mobile bandwidth at an unprecedented pace. In Europe, for example, mobile data traffic is growing at 100% per year. Moreover, continued broadband data growth will be driven by newer generations of mobile devices with improved multimedia functionality. And, if Informa Telecoms and Media is on the mark, the average traffic per smartphone user will increase 700% by 2015, writes Olivier Terrien.

Olivier Terrien, director of strategic marketing, Tekelec: It’s not clear that more resources will solve the network congestion problem

between mobile devices and the core network. As the RAN becomes more congested, the number of dropped connections can increase. Congestion conditions are compounded by the fact that usage patterns vary greatly among subscribers and devices. It is only a very small number of users who generate the bulk of the network traffic, which in turn can compromise QoE for the larger subscriber base. Vodafone, for example, has found that 65% of its mobile data traffic is generated by just 10% of its users. However, it only takes a minority of subscribers hogging data to slow down data access for all of the other subscribers on the network.

Many operators are increasing network resources or moving to long-term evolution (LTE) with its increased bandwidth to handle swelling traffic loads. However, it’s not clear that adding more resources will solve the user/application data congestion crisis. It is also unlikely that LTE technology will resolve the problem in the near term since it is being deployed with a limited footprint. In addition, it is difficult to foresee the application profile of the future, making it tricky to accurately predict what’s in store for data traffic growth.

RAN congestion is a complex challenge, and there’s no simple solution to the problem. Each network reacts differently to bandwidth surges and rapidly changing usage patterns, depending on its capacity and network resources. Adding capacity to the network to prevent peak-usage congestion – essentially over provisioning the network isn’t a costeffective or practical answer since RAN bandwidth is still very expensive compared to core network bandwidth. Yet, finding a solution to RAN congestion is critical to longterm success, since RAN congestion has a direct and immediate impact on QoE and ultimately to subscriber loyalty.

Congestion impacts on the RAN User data/application traffic congestion is most severe in the high-cost radio access network, which provides the critical link

Faced with escalating data traffic loads, operators are deploying a number of techniques to combat RAN congestion that include:

VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

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Unfortunately, radio access network (RAN) technologies’ delivery architectures and economics haven’t kept pace with customers’ increasing appetite for mobile broadband access. Techniques used by handset manufacturers to optimise the customer experience, such as saving battery life, are severely impacting the signaling load and resources in the RAN. Mobile network congestion is increasing as more and more subscribers flock to data-intensive devices and applications. This congestion strains network resources and bandwidth, negatively impacting subscriber’s quality of experience (QoE) and creating churn because subscribers – especially smartphone users – won’t remain loyal if service quality doesn’t meet their expectations.

• Overload control at the RAN: relies on nodal and network management functions in the RAN infrastructure to detect and respond to congestion. Using call admission control and scheduling, the network determines how many users can attach to a site at any given point and how to allocate radio resources among those users. Users attempting to access the network during periods of congestion may be denied service and the number of dropped calls and failed connection attempts can increase. • Network-based: uses alarms from RAN network elements to detect congestion events. Alarm information then is captured and used to implement rules such as connection gating based on the alarm conditions. The approach has several limitations. It is heavy handed in that it reduces quality of service (QoS) for all users to remedy the situation with no consideration given to the actual usage of each subscriber or class of subscriber. Moreover, the alarm may arrive too late – after data traffic has exceeded network capacity, and subscribers are already experiencing service issues. In addition, alarms from different vendors are varied, so it may take a considerable amount of work and time for an operator to interpret and implement policy appropriate to the conditions in the network. • Predictive: employs historical network data gathered from existing detection systems to predict where congestion is likely to occur in the future and implement policy accordingly. While this technique is more proactive than the first two, it can’t adapt in real-time to rapidly changing and dynamic conditions within the access network. It’s also difficult for operators to make completely accurate predictions. Operators may overlook an event, or something totally unpredictable can happen. Regularly scheduled events that drive increased traffic like sporting events can be cancelled. If an operator has created policies to manage data surges created by that event and isn’t aware of its cancellation, the policy stays in effect. As a result, subscribers experience poor service when bandwidth is throttled back to manage anticipated traffic. No single-approach solution fits every network since QoE is very subjective and difficult to define. It is contingent on a number of considerations, including the number of subscribers, subscriber usage, as well as

capabilities and architecture of network resources. Factors such as cell-site loading, application type, time of day, device type and location can all impact the service experience. Managing congestion to optimise QoE, therefore, requires deep visibility into what is occurring in the RAN in as close to real time as possible to mitigate issues as they arise – before they impact the subscriber’s service experience. Effective congestion management should reflect the reality that network congestion is going to occur as demand and usage of mobile broadband surges. QoE is essential for success Clearly, to succeed in the data-driven, mobile broadband market, operators have to put QoE front and centre of their business strategy. Effective customer experience management is one of the single most important differentiators in this highly competitive market. There’s little loyalty among tech-savvy data consumers; if applications or devices aren’t performing as expected, they’ll simply move to another provider who can deliver a better service experience. Maintaining optimal QoE takes more than simply mitigating RAN congestion. It requires the ability to improve the customer experience with intelligent policy shaping that dynamically balances QoE with available network resources. That’s the idea behind Tekelec’s RAN-Aware Policy Management solution. It combines both historical and realtime data with subscriber profile information to inform the policy-decision process. The solution delivers static and dynamic visibility into the RAN, which the operators need to detect what’s taking place and uses that visibility to shape policy management in real time. As the mobile broadband market heats ups, RAN congestion management will continue to take centre stage. There’s no doubt that it’s a vital component in the quest to ensure QoE. However, long-term success in this highly competitive and consumer-driven market takes more than simply delivering bandwidth. It requires end-to-end, context-aware solutions that enable operators to dynamically shape and influence policy, tune and balance network resources in real time and measure quality of experience to continually improve service usage and customer loyalty, yielding higher revenues.

VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

S17

NETWORK POLICY MANAGEMENT

EXPERT OPINION:

Use network policy control to maximise the value of mobile networks Broadband internet consumers are spending more time on the go using internet applications for activities such as streaming video and online gaming, which require a high quality network. According to Sandvine’s Fall 2010 Global Internet Phenomena Report, real-time entertainment is unquestionably the dominant force on the internet, generating up to 43% of internet traffic. Social networking is also a substantial driver of mobile traffic, representing up to 12% of mobile data, a relative bandwidth share increase of more than 30% year-over-year in North America, and more than 80% over eight months in Latin America. At the same time, internet penetration is high in mature markets, so service providers cannot depend entirely on new subscribers as a source of revenue growth. This environment creates new challenges and opportunities for internet service providers. The good news is that mobile operators can implement innovative revenue-generating applicationbased and device-based services as a complement to data access quotas and speed.

Network Policy Control is a fundamental technology and technique which enables service providers to manage traffic demand in a manner that meets subscribers’ quality of experience expectations, and is simultaneously cost-effective and revenuegenerating. Here, Dave Caputo outlines how service providers can create value-added data services that target customers’ needs, maximising the value of their network infrastructure investment. The first step towards effective network management and profitable network utilisation is to understand fully what is occurring on the network. A successful internet business strategy requires sufficient data to make informed decisions about service plans, management policies, capital investments and premium services.

Dave Caputo, president, CEO and co-founder, Sandvine: In the new and possible ideal, service providers can have relevant, up-to-date information available ondemand

Device awareness is critically relevant for mobile operators since state-of-the-art mobile devices are key drivers of broadband usage. For example, an Apple iPad, Samsung Galaxy and Blackberry PlayBook user is much more likely to view YouTube videos or TV shows, since tablets have high-resolution and larger graphical interfaces. These users therefore tend to consume disproportionately high bandwidth, which exacerbates load during peak periods. Fairshare traffic management allocates network resources fairly across the subscriber base. ISPs need to be able to identify user-trends in both application and device adoption, to avoid congestion pitfalls, as well as to spot opportunities that may yield more profitability. Aggregate and correlate data Service providers have long since had access to detailed information from billing and operations systems, but only recently is that information being combined with application-level awareness of per-subscriber internet usage. In the new and

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VANILLAPLUS SUPPLEMENT FEBRUARY/MARCH 2011

possible ideal, service providers can have relevant, up-to-date information available ondemand that tracks key metrics and trends and proactively draws attention to problems and anomalies. A network business intelligence solution provides just that. Implement targeted marketing campaigns By segmenting the subscriber base, by application and device usage, marketing can design opt-in programs for differentiated service tiers. For example, a service plan can be tailored to business power-users who frequently tether their mobile device to a laptop and require increased bandwidth and quota. A service offering for video enthusiasts can provide higher quality of service and lower latencies, enabled by network policy control, video optimisation and caching. Network policy control is a key component of mobile infrastructure. It serves to enhance the quality of experience for subscribers, while extending mobile operators’ capabilities to meet traffic demands within the constraints of their network capacity, thus improving the costeffectiveness of their network. By better understanding consumer needs and, subsequently, spotting opportunities for service creation and optimisation, new revenue streams can be generated.

No other publication works harder or travels further! In a period of global financial turbulence, company failures, re-structures and negative economic growth it seemed like everyone in publishing was battening down the hatches and sitting tight. Everyone that is apart from VanillaPlus magazine. 2010 saw continued substantial growth and investment in VanillaPlus. We enhanced our existing products, broadened our portfolio and invested in our circulation. Whilst other magazines were falling by the wayside, look what VanillaPlus did for you: BOOSTED VanillaPlus increased its presence at key events and attended 54 events in 20 different countries across Europe, Middle East, Africa and the USA – ensuring the furthest possible reach for its advertisers and gaining more key readers around the globe.

INVESTED VanillaPlus continued to invest in circulation, adding top level new Operator names across Brazil, Russia, India and Australia. At the same time we cleaned and refined our data and got to know our readers even better. See our 2011 Media Pack for the latest details.

LAUNCHED In 2010 VanillaPlus launched Video Talking Heads – video interviews of key industry players filmed on location across the globe and available to view at www.vanillaplus.com

INCREASED In 2010 VanillaPlus increased the circulation of its ezine, VanillaPlus Bites to a whopping 23,000 – with more signing up daily

IMPROVED In 2010 VanillaPlus continued its website improvements – making video available, adding a Knowledge Centre resource, and a full issue archive

We firmly believe no other IT & Comms magazine works harder, travels further or invests more to offer the best possible value and quality to its advertisers and the best possible reader experience. Make 2011 the year you join VanillaPlus!

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The greater the challenge, the greater the need to

Balancing your need for revenue with your customers’ demand for new services isn’t easy. Fortunately, Telcordia has been solving the world’s toughest communications challenges for nearly three decades. Our expertise can help you get it right as you deliver innovative new services, operate more efficiently, and drive revenue. So you’re in the perfect position to take advantage of any opportunities that come along. Visit us at Mobile World Congress. Hall 2, Booth 2B25.