Features

Ignoring business continuity is no longer a reasonable option, yet many companies are wary of being sold a dud.  Patrick Roberts looks at the positive steps that can be taken to ensure a better-informed choice of solution

According to the Chartered Management Institute’s 2006 Annual Survey of Business Continuity Management, less that half of the organisations surveyed (49 per cent) had a “Business Continuity Plan covering their critical business activities.”  In understanding why so many businesses are still not investing in business continuity, despite the proven benefits, it is instructive to look back at an article, “The Market for ‘Lemons’: Quality, Uncertainty and the Market Mechanism”, published by Nobel Prize-winner George Akerlof over 30 years ago.  The article is an elegant exploration of the situation that evolves when the buyer of goods or services does not know the true value of what they are buying: they cannot distinguish between a high quality product and a ‘lemon’.   

BUSINESS CONTINUITY - A lemon by any other name?

Consider, for example, what would happen to the used car market if only two types of vehicle were offered for sale - high quality cars worth £10,000 and jalopies worth only £2000 – and prospective purchasers cannot tell the difference.  If a buyer believes that there are equal numbers of both types of vehicle on the market then they might be inclined to think “I have a 50/50 chance of getting a good car or a ‘lemon’ so I’ll offer up to £6000 for a car.”  But on further reflection he or she realises that the owner of a quality used vehicle is very unlikely to sell it in a market where people are only willing to pay half of what it is really worth (they will find an alternative means of selling it) so, in reality, all you will have in this market is jalopies.  The prospective buyer then determines not to pay more than £2000 for a car bought in this way.
Measuring the true value of an investment in business continuity management is extremely challenging for the most experienced business continuity practitioners let alone a prospective purchaser with little knowledge of the subject.  The stage is therefore set for a classic ‘lemons’ problem where prices in the sector are forced down and, ultimately, both buyers and sellers are driven away from the market.  Whilst, in the illustration above, there are numerous practical alternatives to buying a second-hand car (eg buying new, public transport), simply ignoring business continuity is no longer a sensible option for most organisations.  Obviously the onus to remedy the situation lies largely with the business continuity profession and much is already being done by both individuals and professional bodies, such as the Business Continuity Institute, to improve awareness and understanding.  However, those involved in purchasing business continuity products and services - including training, consultancy services and IT solutions – also have a vested interest in becoming more knowledgeable in order to ensure that they are getting the best value for money.  The rest of this article concentrates on the positive steps that people in this latter group can take to ensure that they are better-informed consumers.
The publication of BS 25999:1 in November 2006 was a very important milestone, establishing a simple and robust lingua franca for business continuity management.  The document itself is less than 50 pages in length so any prospective purchaser of business continuity services would be well advised to take the time to read it.  Building on this foundation, a great deal of general business continuity information is available in the form of public presentations: business continuity practitioners speak regularly to audiences from numerous professional and business organisations and many of these events are free.  As one becomes more knowledgeable, it is also worth considering attending specialist events such as the Business Continuity Expo and Business Continuity Institute Annual Symposium where industry-leading practitioners discuss best practice and examine topical issues.  These simple steps give the knowledge and confidence to ensure that what is being purchased is actually appropriate to the business needs. 
Finally, a wide range of high-quality business continuity training is now available, ,with many organisations offering inexpensive one or two-day introductory courses to the subject.  Some providers also offer courses in a convenient evening-class format or can even deliver bespoke training in your workplace.  Scenario-based crisis management exercises, where a management team has to wrestle with the difficulties of a simulated incident, are also a very enjoyable and effective way to raise awareness of business continuity issues and improve the ability of individuals and teams to manage in a crisis.  Taking advantage of some of these numerous training opportunities is undoubtedly the best way to equip yourself as a sophisticated business continuity consumer and ensure that you are getting good value from your investment.
In conclusion, the following simple case study is offered as a recent illustration of how improved buyer understanding can create real win-win outcomes for buyer and seller.  The client in question was a small public-sector body who received a day of Crisis Management training for their executive team as part of a national programme delivered by Needhams 1834 on behalf of the Cabinet Office Emergency Planning College.  As a result of this training, the executive team realised that their existing business continuity plan was not fit for purpose; it also gave them the confidence to ask Needhams 1834 to conduct a review of their plan and deliver a simple exercise.  In the event it only took an additional seven days of work to provide the client with a far more robust business continuity plan and facilitate a simple exercise to familiarise the crisis management team with its contents.  Surely this is a far better outcome (for both parties) than the client struggling on with an inadequate plan or paying for a great deal more consultancy than they really needed: improved understanding by the buyer led to a win-win situation.   

Patrick Roberts is Senior Consultant with Needhams 1834.

Needhams 1834 Ltd will be exhibiting at the Business Continuity Expo and Conference held at EXCEL Docklands, London from 28th - 29th March 2007.
www.businesscontinuityexpo.co.uk

Enterprise mobility should focus on message delivery not device type insists Peter Semmelhack

The benefits of mobile business solutions are hard to ignore for most enterprises today. Used for everything from tracking home visits by medical staff and maintaining airport x-ray machines to keeping beer flowing in pubs and hotels, mobile applications are giving customer-facing employees in the field the power to run their business wherever they happen to be. As Rob Bamforth, mobile applications analyst at Quocirca so neatly puts it, "the key application of all mobile devices is communication, and the 'killer' feature is relevance to the user."

ENTERPRISE MOBILITY - Don't get hung up on the phone

The debate has moved on to how best to manage mobile devices and treat them as the business enablers that they truly are. IDC predicts that $52 billion will be spent on all mobile services by 2010, with $1.5 billion of this being spent on mobile device management and security.

Let the user be the chooser
Traditionally, field service has been the poster child for enterprise mobility since, by its nature, it involves the delivery of timely customer information to a geographically dispersed workforce who are mobile for the majority of their working day. Because of this, field service engineers have often borne the brunt of early attempts at force fitting enterprise applications onto mobile devices that were never designed to handle that level of complexity. The result was many failed or less than stellar deployments due to lacklustre user adoption.
The BlackBerry revolution awoke executives to the freedom, flexibility and efficiency that could be gained through mobile access to applications. Now mobility is being demanded not only by field service operations but also in a variety of customer-facing roles. As IT managers juggle the mobility requirements, user preferences, and budget requirements of different business units across the enterprise, they soon realise that when it comes to mobility solutions one size clearly does not fit all.
A survey undertaken at Service Management Europe found that that 23 per cent of respondents cited user acceptance as one of the major hurdles to successful mobilisation of data applications. This is precisely why Pitney Bowes UK set up working groups to consult its field service engineers on their device preferences and mobile application interface requirements, long before it standardised on a hosted enterprise mobility solution to deliver SAP and Siebel updates directly to field service engineers' devices throughout Europe.
It is therefore vital to consult field staff on the best device for their needs and the best interface to aid them in their collection of updates and daily reporting of services delivered or sales made. It is also important to retain flexibility by choosing a solution that can support future migration to new devices. The bottom line is choosing the right mobility solution from the start will lead to fewer headaches when deciding on devices and networks and when managing the evolution of the system over time.

Change costs
One of the major issues concerning IT directors is total cost of ownership (TCO). This cost is generally driven down by simplification. So any increase in complexity, such as a change in device type across the enterprise, or even in only one part of it will inevitably increase TCO. And one thing is certain, change will come.
The device market is changing so fast that any decision made at the time of deployment could be almost obsolete within six months with newer, as yet unknown, devices coming onto the market offering immediate and significant incremental business value and/or cost reduction opportunities. In addition, the recent litigation between NTP and RIM sent shockwaves through the enterprise community in the US, where the BlackBerry has become essential to the average executive. With some employees becoming more dependent on their mobile device than their desktop PC, the enterprise mobility strategy must include the flexibility to minimise disruption if the company needs to switch devices to accommodate mergers or acquisitions, change of operator, customer demands or new technologies.
Gartner predicts that the overall TCO for mobile solutions will rise by 30 per cent for most enterprises. Gartner attributes this cost to "the increased support costs for a more-disparate set of mobile data users, lack of management of recurring monthly charges for mobile data services and the need to support point solutions across multiple types of wireless data offerings." Inevitably, if an enterprise opts for a mobility solution that already supports the majority of devices on the market, then this will reduce the costs, while also reducing the time to roll out mobile applications to a new set of devices. Therefore, enterprises must plan to have a multiple device environment to enable the business to take advantage of the value of new devices as they come onto the market. The cost of supporting multiple device specific applications versus a single application for multiple devices must be considered.

International deployments
When rolling out mobile applications to thousands of users across multiple territories it is vital to consider choosing software that supports the majority of devices without needing any modification. So whether staff choose to work on PDAs, Pocket PCs, BlackBerrys, notebooks or laptops, or even a touch tone phone using IVR, they should still receive the same updates from the back-end applications running over SMS, GSM, GPRS, 1x RTT, 2 way paging or Mobitex.  This means you must deploy a flexible and extensible software solution that accommodates multiple language support, and both wireless device and network variances without any costly re-engineering of the application.
Field sales and service pose particular problems for larger enterprises because they involve the management of data delivery across multiple territories, over numerous networks. For example a field engineer may need to run the same field service application interchangeably on either his BlackBerry or his laptop depending on the service task he is undertaking. He may prefer to use his laptop for diagnostics in an area with poor wireless coverage. However at the next job he may prefer to use his BlackBerry. Using real time data communications, backed up by 24 x7 monitoring from a reliable Network Operations Centre, ensures consistency and currency of the data, no matter which device is being used for the job in hand.

Host with the most
We have stated earlier that simplification reduces cost. One significant way to simplify application delivery is to use a hosted 'on-demand' model, enabling employees to access mobile applications on whatever device they happen to be working on at that time. Analysts at Unstrung advise that "if the use of BlackBerries, Treos, or other mobile messaging devices extends beyond a few top executives, it's time to consider outsourcing the management thereof." Using a hosted model allows central management of devices, with different user privileges for different groups. Depending on the service provider, this model can also enable 24 x 7 monitoring of multiple networks around the world, to guarantee message delivery.
According to industry analyst AMR, the software-as-a-service-model grew by 60 per cent in 2005 and this is driving the CRM market. The next logical step is to extend this hosted software to the field sales and service staff that have most contact with your customers and this means getting critical data held within enterprise CRM and ERP systems such as Siebel, NetSuite, and SAP onto their mobile devices, so that they have the most up to date customer information at their fingertips while they are on site with customers.
We have discussed the need to choose an enterprise mobility solution that supports the widest range of handheld devices. But sometimes the most effective way to get critical information to an engineer is to route the message to a landline near the site where the engineer is working. This is particularly important for employees working on hidden assets such as underground piping, or in hospital environments where there is no wireless coverage. So enterprise mobility isn't always about accessing data from a PDA or phone, sometimes traditional communications technologies are the most effective route to get messages to your mobile employees. So don't get hung up on the phone, or on one particular device. Enterprise mobility is all about ensuring that relevant up to date information reaches the right person at the right time - using the most effective delivery method possible.

Peter Semmelhack is CTO of Antenna Software
www.antennasoftware.com

As telecommunications vendors clamour to develop and launch products based around the Advanced Telecom Computing Architecture (ATCA), operators and equipment manufacturers must decide how the standard will shape their business. Robin Kent outlines the core propositions of ATCA, its market potential and the ways in which operators and telecommunications equipment manufacturers can harness its value.

Anybody that has tried his or her hand at plate spinning will know how hard it is to build momentum and keep the plate moving. Anyone skilled - and brave - enough to attempt the feat with several plates at once, will be able to relate to the challenges that the network operators face every day.

ATCA - Balancing transition

The process of migrating from tried and tested proprietary systems to relatively new standards-based platforms is fraught with risks, challenges and concerns. Operators cannot afford to make a sudden switch from one system to another, so no small amount of balance and co-ordination is required to ensure the transition is as seamless as possible. Whilst some standards can be overlooked in favour of proprietary systems, others are simply too significant to ignore.
As one of the most significant telecommunications standards to be developed in recent years, ATCA is set to have a massive influence on the telecommunications industry with more than 200 vendors, ranging from shelf through to card and chassis manufacturers, already developing products based on the standard.
ATCA is an open standard-based platform created by the PCI Computer Manufacturers Group (PICMG) to provide an architecture for modular components which are capable of rapid integration into high performance and carrier grade service solutions.  The main objective of the standard is to increase levels of interoperability between different vendor components to offer greater flexibility when developing infrastructures. In turn, this enables operators to benefit from:
•    Reduced time to market for new applications
•    Lower upfront development costs
•    Less reliance on proprietary solutions
•    Increased cost savings through economies of scale
•    Greater flexibility of service offerings
•    Protection of investment
ATCA has been developed with the needs of the communications industry at its heart and is particularly likely to benefit organisations in the access, edge, and transport and service delivery environments.  Whilst there will be peripheral benefits outside of the telecommunications space, it is estimated that approximately 95 per cent of ATCA applications will lie within the communications edge / access and core markets (Source: Venture Development Corporation).
Given the level of attention currently being paid to the development of ATCA-compliant products by major players like Sun Microsystems, Intel and Motorola, it is widely anticipated that ATCA, along with its sister architecture MicroTCA, will become the dominant open standards force in the Communications Computing Equipment space by 2009.

Market acceptance
Since it was first formally introduced in 2003, ATCA adoption has exceeded previous standards-based architectures, such as PCI or VME, yet market penetration has remained relatively low, as many carriers remain largely unaware or unconvinced of ATCA's value proposition. Telecommunications equipment manufacturers (TEMs) too have taken time to explore the full business case for ATCA and determine their approach to the standard. In many regards, it faces the classic challenges of standardisation (eg compatibility, proven interoperability, slow uptake and competition with the sheer volume of other standards), but recent developments within the telecommunications industry are set to change ATCA's fortunes for the better.
2006 saw the creation of two new industry organisations that are now helping to develop the mainstream market for a standards-based communications platform.  At the beginning of the year, the SCOPE Alliance was formed to promote the availability of open carrier-grade base platforms based on commercial off-the-shelf (COTS) hardware/ software and free open-source software building blocks. The organisation's efforts were then bolstered by the formation of the Communications Platforms Trade Association (CP-TA) in April 2006 to address the interoperability certification requirements, which meant that the core elements for creating a mainstream market were now in place for the first time.
Because these components have only recently come together, ATCA is still a technology in development and remains the subject of extensive trials and evaluations.  This practice is likely to become more commonplace through 2007, but it could be 2009 before large-scale field deployments commence.

Applications: ATCA and IMS
ATCA reflects a fundamental shift in the industry's approach to the development of telecommunication architectures.  The days of structured deployments, planned well in advance, for long-life revenue generating applications are a thing of the past and they are now being superseded by constantly evolving architectures, capable of providing the flexibility to meet service providers' demands, quickly. Perhaps one of the most compelling illustrations of ATCA's benefits is its role in facilitating IP Multimedia Subsytems (IMS).
The IMS proposition is centred on the flexibility it has to enable operators to provide customers with the very latest revenue-generating IP-based services, such as interactive gaming or streaming video.  The open standards-based architecture of ATCA can be used to facilitate this requirement by enabling TEMs and service providers to re-use the computing foundation for their products. 
ATCA provides the foundation for a flexible, scalable, high-performance architecture that is more than capable of meeting these demands.  It can help to lower both capex and opex by reducing the time to market for new services and significantly lowering development costs. This is a key consideration when factoring in the cost associated with operating a constantly evolving architecture and the potentially short commercial lifecycle of new applications and services.

To ATCA, or, not to ATCA?
So far, we have discussed some of the clear benefits of embracing ATCA, but it is also clear that the standard does not offer an overnight panacea. Inevitably, there are aspects of the telecommunications network that will need to remain in place for the foreseeable future, and it is also true that some aspects of the infrastructure may not be best served by ATCA.
There are a number of scenarios in which it might be more appropriate to use non-ATCA products, including for entry range, cheap or mass produced technologies and high-density input and output interfaces associated with processing. In response to these challenges, the PICMG has already begun specifications for MicroTCA.
The MicroTCA standard promises to offer many of the features of ATCA in a smaller, lower cost format that is suited to network edge and enterprise applications. Because of this, MicroTCA is likely to have broader appeal beyond TEMs and operators but, crucially for the telecommunication market, it shares the same system architecture as ATCA. This means it can be controlled by the same management software and enables a relatively simple migration between the two platforms. Moving forward, it seems that combining the two standards will enable vendors and operators alike to benefit from greater economies of scale.
Over the next 3-5 years, systems architects will need to perform a plate spinning role to ensure that operators can reap the benefits of their existing proprietary systems alongside open standards-based platforms. With the rise of COTS hardware, open systems and applications, and the move toward IMS infrastructures, underpinned by ATCA, the economic viability of proprietary systems is inevitably being called into question.  However, as one of the largest overheads in its operational expenditure, it is understandable that operators will want to protect the investment they have made in the applications developed on these networks. 
Taking the step from proprietary to standards-based systems will necessarily require a phased approach as there are key considerations for the TEM community to explore before they wholeheartedly commit to any standard-based platform.  The proprietary systems they currently operate have been developed to deliver 99.999 per cent availability and ensuring this is maintained throughout both the migration process and the lifetime of the new network is a major priority. Some may also be concerned about the cost and time implications of re-writing applications as they move from legacy to standards-based systems. Others will focus on the fundamental change to product development process as they shift from an internally run project to a multiple vendor management exercise.
Standards-based solutions offer far greater levels of portability than their proprietary cousins.  Suppliers exploiting the ATCA platform are not going to be locked into a specific hardware OEM because they are able to select the best solution for the same standard technology.  The openness of ATCA is comparable to that of the Linux OS, in that it is distributed by many vendors and supported on every ATCA CPU board.  Therefore, adopting a standards-based approach to infrastructure development can benefit both the customer and vendor by creating a robust environment with the flexibility and scalability to support innovation and evolution.
So how can operators begin to address these challenges? On the surface the options are clear - they either adopt or ignore ATCA - but both approaches have their downfalls.  Choosing the former at this particular point in time may result in long-term benefits, but until the technology is more widespread and proven it could be seen as an expensive, high-risk approach.  On the other hand, a failure to prepare for the introduction of ATCA-compliant technologies could cause them to lose ground to the competition over the medium to long-term.
It is clear that readying the infrastructure for the adoption of ATCA, without compromising the operator's ability to exploit existing and forthcoming revenue opportunities in the interim, has to be their ultimate goal.  To achieve this aim they will need to re-evaluate both the hardware upon which their existing infrastructure is based and the capabilities of the software systems they use to help them deal with emerging standards and protocols.

Robin Kent is Director of Operations with Adax Europe
www.adax.com

Organisations like the TeleManagement Forum have a dilemma when it comes to anniversaries. TM Forum’s 20th birthday in 2009 will naturally be a cause for celebration: you don’t get such a long run in this business unless you’re doing something right. But there’s a nagging worry too. Can a successful first 20 years as a thought leader; framework and standards setter – mostly for telecoms operational and business support systems - serve as a basis for another 20 years setting frameworks for an industry that is turning rapidly into something else, as new players muster at its borders? Does the heritage help or hinder when it comes to refining a role in the rapidly converging telecom, media and Internet industries, where the new tends to be seen as ‘good’ and anything else is consigned as ‘legacy’?

LEAD INTERVIEW - Brave New World

For Keith Willetts, the TM Forum's original co-founder and current Chairman, it's a question that soon answers itself, once you apply a little deep thought to the matter.
“What's become really clear, over the past year or so especially, is that convergence is here – it's for real and we're really at the start of the process,” he says. “What you've got is three trillion dollar industries - media, Internet and telecom - all coming together. You just have to pick up a newspaper, listen to the news or, of course, surf the web to see that it's happening. Who's Virgin bought?  What services is Skype offering now? All that sort of thing. And over the coming years we're going to see far more of this mixing and matching – where a company strong in one field takes over or forms an alliance with a company that's strong in another.”
For Willetts it's a process that brings opportunities as well as threats.  One apparent threat for many in the telecom industry is that telecom becomes sidelined in many markets as a new breed of player moves in and takes over. This extreme scenario might involve powerful, highly capitalised Internet companies, such as eBay with IP telephony company Skype (which it bought in 2005) completely disrupting the traditional telephony market.
“I use Skype and I'm amazed at just how good the service is. I wonder to myself, 'why would you need anything else?. But,” admits Willetts, “the more likely scenario is that we'll end up with a real mix of companies which take elements from all three sectors.”
There lies the opportunity. Willetts thinks the TMF can provide the frameworks that integrate the players, just as it has hitherto provided frameworks to integrate telcos' disparate back-office systems. The challenge is to apply its expertise in a new way.
“What we've been good at is helping our members develop a lean end-to-end process environment – a set of frameworks and standards encapsulated in our NGOSS  (New Generation Operations Software and Systems) initiative that enables them to build flow-through business processes that cross the old internal demarcation lines that were, and often still are, such a feature in traditional telcos. Using NGOSS they can begin to join the dots between things like inventory, provisioning, service assurance and so on.”
What's clearly required in the new converged telecom-media-Internet world, he points out, is a similar set of guidelines at the inter-company level. “We are going to need standards and frameworks that reach beyond the company and the sector to automate things like content delivery, digital rights management and things we haven't even thought of yet.
“Of course, it's a huge area and there are a number of unresolved questions,” he says. “For example one specific conversation we've recently had within TMF has been around the possibility of defining a value chain. And we came to the conclusion that such a question presupposes we know who is going to be where in the chain. In fact, all we can actually say is that there will be value chains and there will be different people at different positions within them.  What we're looking at is the development of something more two- or even three-dimensional than a simple chain – it's probably better to think of these relationships forming something like a  'value web', where companies might sit in any one of several positions.  They might be undertaking one set of commercial roles in one territory and a different set in another.”
In fact, says Willetts, TMF as an organisation is keen to develop a role as an independent business and technical facilitator rather than being seen as the advocate of a particular, sector-specific, approach.  The reason is simple – the telecom industry itself won't exist as we know it five to ten years from now.  It's transforming, and as web and media companies are moving onto some of its traditional turf, telecoms itself is branching out into many new areas. 
 “It's important we aren't seen to be in the business of promoting any particular outcome,” claims Willetts.  “We want to be part of an environment where there can be a range of outcomes, shapes and services. The important thing is that user companies and providers can actually put the pieces together and have them work. It's a case of  'may the best man win'.”
So where exactly is the TM Forum running to?
First, TMF is inviting thought leaders from media and cable companies to join its Board in order to get a 360-degree view of emerging needs.  Second, it's rapidly broadening its business and software vision to encompass the needs of information and content-based services and the myriad of virtual providers and value chain players.  Third, collaboration with other bodies will be important and ongoing.  For example, recently TMF  struck a landmark deal with the Broadband Services Forum (BSF) with a formal partnership where relevant work is shared.  In fact the members of each organisation will have influence over related technical work in the area of telecom-web convergence issues and the first fruits of the collaboration will show up in a new TMF document entitled “Telecom Media Convergence Industry Challenges and Impact on the Value Chain”. The relationship will also contribute to more multimedia focused panels at TM Forum events, and future development of process standards for content management and convergent media-telecom operations.
 “One of the most exciting and fundamental things we're going to do is to develop what we're calling a ' super-catalyst', and we'll be kicking that project off at Nice this year.”
The TMF Catalysts are joint projects undertaken by members and sponsored by service providers, usually to demonstrate leading edge thinking on how to solve problems in integrating the back office, using approaches based on  TM Forum standards and guidelines. The results of these projects are demonstrated at TMF's TeleManagement World conferences in Nice and Dallas each year.
 “The super-catalyst, which we're likely to call the Converged Services Showcases, will be  really major events, involving media companies, device companies, cable TV, IPTV and mobile TV,” says Willetts.  “The idea is to show a whole set of advanced service scenarios, but unlike what you'd see at a trade show - where you typically just see the thing working - with the super-catalyst you'll be able to walk around the back of this and be shown how it's actually being operated and controlled using standards and the various OSS and BSS systems involved.
 “It's at an early stage of development, but the general idea is that you go to the show floor and you see the equivalent of a town with houses and retail establishments and so on.  And you see all these services that you're getting and then you walk around the back to the network operations centre and you can see how it's all being managed.  It's a big leap.”
We're working on, not just a demonstration, but a real catalyst designed to flush out problems and what standards you need, and what bits you need to invent that you haven't thought of. The fact is that we don't know what the standards requirements are in some cases in the converged world yet, and that's why this super-catalyst is going to be a great vehicle for developing the whole area. It's going to be a major undertaking.”
The plan is for the first super-catalysts to debut later this year at the TMF's Dallas TMW. 
Nice TMW will be the start of the major change.  “What we want to show is that convergent services are here. So we have a very strong convergence message and a very strong illustration that TMF is responding.  There will be discussion about managing content-based and entertainment-based services and more involvement from media companies. For instance, for a meeting at Nice we've invited executives from Disney, Time-Warner and Virgin Mobile to join the table. The fact is that it's just as relevant for a senior executive at BT, say, to sit down with a Disney executive, as it is for the Disney guy to get to understand how the company can exploit the telecom space.”
 “For some of these players convergence will result in a partners' love-fest and for others it will be 'daggers drawn', as they realise they're going to be contesting the same space, but in the long run nobody knows who will be in which role at any one given point in time. TMF's role isn't to try and predict that.”
What about the core frameworks and standards generated by the TMF? Will these have to change markedly to accommodate the broader remit and the entry of new types of player into the value web?
“Yes, no doubt there will be changes as we go forward. One area that we're probably going to have to address in all our output is outsourcing. While our current guidelines intrinsically assist players to define and manage all their processes, so that outsourcing, where required, will be simpler to accomplish, it's also true to say that outsourcing isn't often specifically allowed for. I've just been to India to speak at a TMF event there, and what I heard there was really eye opening in terms of the way outsourcing is being used to reduce costs.
“At Bharti Airtel, one of the big mobile operators with 80 to 90 million subscribers, all the IT is outsourced and they operate at a cost level that a European mobile operator, for instance, can't even come close to.”
Willetts says he thinks that outsourcing and partnering arrangements are bound to become more complex and must be catered for in the back office in a fundamental way.
“For example BT might run an IPTV service in the UK using its infrastructure, and in Germany it might run a service on someone else's because it doesn't own any infrastructure there. But it will probably want to run the same brand and service.  The back office systems need to support that sort of thing.”
But the big question has to be asked. Isn't there a danger in all this for TMF?  This is a member-driven organisation and it is energised by a core of highly motivated, mostly telecoms-oriented individuals who give, not just their companies' time, but often their own time and effort as well. Doesn't TMF run the big risk in realigning itself so radically?
Willetts is adamant: “What people sometimes don't understand is that it's not a question of: 'If you go and chase all these converging media and web companies, will you desert your core telecom membership in the process?'  That question forgets the fact that  telecom companies are, themselves, becoming multi-media companies.  So, the reality is, to be of maximum use to our core constituency, we need to run with them, not away from them.”

Ian Scales is a freelance communications journalist.

Alex Duncan looks at the new opportunities for enriching both person-to-person and application-to-person services in an IMS world

Irrespective of whether you work in business development, engineering or operations, you’re almost certainly well aware that the design of much of today’s messaging infrastructure is starting to show its age – and cause big problems. You might be tasked with simultaneously cutting operational costs - but still have to cope with continually increasing message volumes. You could be seeing your competitors forming mutually profitable alliances with TV and radio programmes and consumer brands – only to find your own team’s marketing creativity stifled by a technology straightjacket. Whatever your particular perspective, it’s fast becoming clear that we can’t go on delivering messaging services - in all their different forms - in the same ways that might have served us well in the past.   

IMS & MESSAGING - Open message

Now, on top of this, not only do service providers have to find ways to cope with all the different messaging technologies out there – SMS, MMS, e-mail and IM – but they also have to start understanding how these can be deployed using the emerging platform technologies of the near future such as IMS and Service Oriented Architecture (SOA).
Compounding this still further are equally complex - if slightly less technology-focused – issues around the messaging environment. For a start, service providers have to be able to support new relationships with both users and content, application and enterprise partners and this is going to require radical shifts in how customer communities are both identified and served. There are also a host of new regulatory demands on areas like customer privacy or advertising to children and, finally, costs still have to be contained while still growing market share and fighting off new competitors.

Old baggage
Unfortunately, much of the historic baggage from the early days of messaging is still largely with us and new approaches have had to be found to resolve these challenges in original and cost effective ways. As a result, it is now possible for mobile service providers to extend the life of their existing messaging infrastructures, dramatically increase its throughput and efficiency, readily add new revenue generating functions and begin to take advantage of both new technologies and new business strategies.
It has to be said right from the start that the hundreds of legacy messaging platforms out there - still generating vital revenues for their owners - were never designed for the kind of world that we live in now and reflect instead the engineering realities of their time. For a start, limits to battery life and cell coverage meant that it was essential for the systems to first store and then forward messages, with users often keeping their phones off to save power or remaining out of network range for long periods. Similar technological restrictions on the cost and performance of both processing and memory chips limited performance and flexibility both on the handset and in the messaging systems themselves.
Communications demands
In terms of its acceptance by customers, SMS turned out to an ideal example of a relatively simple technology that found its perfect niche. Utterly basic in concept, it's turned into a truly global tool for human communication, fulfilling a number of demands not met by other communications technologies. On one hand, its asynchronous nature saves users from having to speak directly to one another – often useful in a variety of relationships. On the other, it also answers that particular human itch to communicate in settings where voice communications are inappropriate.
While SMS continues to thrive, that 'store and forward' inheritance implies that as message traffic grows, the core messaging platform has to grow as well – along with parallel increases in the costs of software licences, hardware platforms and ongoing engineering support and maintenance. Messaging teams are increasingly finding themselves effectively chained to the spot by their legacy platforms – while having to run ever faster to just keep up with both market demand and pressure from their executive boards and shareholders.
The logical solution to this dilemma is to 'ring fence' the existing messaging platforms in an open, flexible and elegant way. By applying the much more powerful data processing technologies that are now available with intelligence that can recognise when a message needs to go through the core – or when it can be safely routed directly – it becomes possible to add features and filters to greatly enrich messaging services. By creating what is, in effect, an intelligent and permeable boundary between the legacy SMS platform and the increasingly open, content-rich and complex world of what's now being fashionably called 'Mobile 2.0', service providers can continue to extract the maximum value from their existing investments – but without remaining locked in to rapidly fossilising past technologies.
Moving forward
As such, the role of this intelligent boundary extends far further than just taking a load off the legacy platform and extending its working life. On one hand, a service provider may want to introduce anti-spam features to their network, while another may be looking at strengthening their least-cost routing policies. Only by intelligently disentangling the old messaging platform from the fast changing world of today – while still keeping it running at maximum efficiency – can service providers keep moving forward.
While such an approach brings instantly tangible benefits in the shape of cost savings and an extended life for the legacy core, it also has the potential to transform a mobile service provider's whole messaging strategy over the longer term.
Mobile operators around the world are rapidly waking up to the fact that a network and a license are, in the future, not going to be the automatically golden route to riches that they once were. While the end-customers themselves are becoming ever more fickle, newer subversive technologies such as WiMax and VoIP - along with emerging threats from fixed and new operators – are rapidly changing the traditional rules.
The only rational solution is for service providers to aggressively embrace that change and out-manoeuvre their historically more nimble competitors. And the only way they can do that is to open up their networks and platforms to co-operate with these new business and service models, becoming 'stickier' than their competitors in terms of their ability to offer creative routes to market
Consider this: The mobile service provider has a brand, customers, billing systems, CRM teams as well as a deep and essential understanding of the complexities behind even the simplest telecoms service. What they haven't had – at least until very recently – are ways of securely and reliably exposing those assets to specialist third party application and service partners or even large corporate customers.
Consider also the major changes underway across the whole of the telecoms sector that are being driven by IMS and SOA. Both initiatives accept that openness will be a the key defining characteristic of the next generation service environment and that the old closed world of semi-proprietary telecoms is doomed to slow but inevitable oblivion.

Composite applications
But how can current legacy messaging platforms be easily adapted to interact with such an open world? The solution we would argue lies once again in keeping the existing messaging platform doing what it's good at – but using open APIs and standardised technologies such JAIN/SLEE to interact across the smart boundary to provide the kinds of rich inter-working functionalities demanded by tomorrow's applications. Openmind Networks, for example, is already working closely with SOA and SDP vendors such as IBM to open up legacy messaging platforms to the possibilities of a truly interconnected IMS world.
And these applications of the future? In truth, it's highly unlikely that there'll ever be a 'killer application' like SMS again. Increasingly however, composite applications will be designed, launched and then dismantled – on faster and faster time scales – as new ideas are generated, as marketing fashions change and as brand or entertainment partners schedule their own promotional timetables.
This creativity can only be unleashed by separating the current message platform from the increasing complexity that is now surrounding it. Recent examples of effective and easily deployed new messaging functions include auto-reply text or picture messaging for both individuals and businesses, or the introduction of sponsored messaging, where text or multimedia messages with a sponsor's message are carried at a rate reduced rate. Each new available function and each new API ultimately acts as an important building block in each operator's own marketing and revenue generation armoury. They're not going to win a war by themselves, but without them, the whole campaign is lost.

Alex Duncan is CEO, Openmind Networks, and can be contacted via: alex.duncan@openmindnetworks.com
www.openmindnetworks.com

TeleManagement Forum actually started life as the Network Management Forum but broadened its remit to include the rest of the telco ‘back office’ as the telecom sector changed through the 1990s. Now, at this year’s May TeleManagement World Conference and Exhibition in Nice, it’s limbering up to make that back office remit even broader. TMF Chairman, Keith Willetts, tells Ian Scales where the TMF is going, and why

Organisations like the TeleManagement Forum have a dilemma when it comes to anniversaries. TM Forum’s 20th birthday in 2009 will naturally be a cause for celebration: you don’t get such a long run in this business unless you’re doing something right. But there’s a nagging worry too. Can a successful first 20 years as a thought leader; framework and standards setter – mostly for telecoms operational and business support systems - serve as a basis for another 20 years setting frameworks for an industry that is turning rapidly into something else, as new players muster at its borders? Does the heritage help or hinder when it comes to refining a role in the rapidly converging telecom, media and Internet industries, where the new tends to be seen as ‘good’ and anything else is consigned as ‘legacy’?

LEAD INTERVIEW - Brave New World

For Keith Willetts, the TM Forum's original co-founder and current Chairman, it's a question that soon answers itself, once you apply a little deep thought to the matter.
“What's become really clear, over the past year or so especially, is that convergence is here – it's for real and we're really at the start of the process,” he says. “What you've got is three trillion dollar industries - media, Internet and telecom - all coming together. You just have to pick up a newspaper, listen to the news or, of course, surf the web to see that it's happening. Who's Virgin bought?  What services is Skype offering now? All that sort of thing. And over the coming years we're going to see far more of this mixing and matching – where a company strong in one field takes over or forms an alliance with a company that's strong in another.”
For Willetts it's a process that brings opportunities as well as threats.  One apparent threat for many in the telecom industry is that telecom becomes sidelined in many markets as a new breed of player moves in and takes over. This extreme scenario might involve powerful, highly capitalised Internet companies, such as eBay with IP telephony company Skype (which it bought in 2005) completely disrupting the traditional telephony market.
“I use Skype and I'm amazed at just how good the service is. I wonder to myself, 'why would you need anything else?. But,” admits Willetts, “the more likely scenario is that we'll end up with a real mix of companies which take elements from all three sectors.”
There lies the opportunity. Willetts thinks the TMF can provide the frameworks that integrate the players, just as it has hitherto provided frameworks to integrate telcos' disparate back-office systems. The challenge is to apply its expertise in a new way.
“What we've been good at is helping our members develop a lean end-to-end process environment – a set of frameworks and standards encapsulated in our NGOSS  (New Generation Operations Software and Systems) initiative that enables them to build flow-through business processes that cross the old internal demarcation lines that were, and often still are, such a feature in traditional telcos. Using NGOSS they can begin to join the dots between things like inventory, provisioning, service assurance and so on.”
What's clearly required in the new converged telecom-media-Internet world, he points out, is a similar set of guidelines at the inter-company level. “We are going to need standards and frameworks that reach beyond the company and the sector to automate things like content delivery, digital rights management and things we haven't even thought of yet.
“Of course, it's a huge area and there are a number of unresolved questions,” he says. “For example one specific conversation we've recently had within TMF has been around the possibility of defining a value chain. And we came to the conclusion that such a question presupposes we know who is going to be where in the chain. In fact, all we can actually say is that there will be value chains and there will be different people at different positions within them.  What we're looking at is the development of something more two- or even three-dimensional than a simple chain – it's probably better to think of these relationships forming something like a  'value web', where companies might sit in any one of several positions.  They might be undertaking one set of commercial roles in one territory and a different set in another.”
In fact, says Willetts, TMF as an organisation is keen to develop a role as an independent business and technical facilitator rather than being seen as the advocate of a particular, sector-specific, approach.  The reason is simple – the telecom industry itself won't exist as we know it five to ten years from now.  It's transforming, and as web and media companies are moving onto some of its traditional turf, telecoms itself is branching out into many new areas. 
 “It's important we aren't seen to be in the business of promoting any particular outcome,” claims Willetts.  “We want to be part of an environment where there can be a range of outcomes, shapes and services. The important thing is that user companies and providers can actually put the pieces together and have them work. It's a case of  'may the best man win'.”
So where exactly is the TM Forum running to?
First, TMF is inviting thought leaders from media and cable companies to join its Board in order to get a 360-degree view of emerging needs.  Second, it's rapidly broadening its business and software vision to encompass the needs of information and content-based services and the myriad of virtual providers and value chain players.  Third, collaboration with other bodies will be important and ongoing.  For example, recently TMF  struck a landmark deal with the Broadband Services Forum (BSF) with a formal partnership where relevant work is shared.  In fact the members of each organisation will have influence over related technical work in the area of telecom-web convergence issues and the first fruits of the collaboration will show up in a new TMF document entitled “Telecom Media Convergence Industry Challenges and Impact on the Value Chain”. The relationship will also contribute to more multimedia focused panels at TM Forum events, and future development of process standards for content management and convergent media-telecom operations.
 “One of the most exciting and fundamental things we're going to do is to develop what we're calling a ' super-catalyst', and we'll be kicking that project off at Nice this year.”
The TMF Catalysts are joint projects undertaken by members and sponsored by service providers, usually to demonstrate leading edge thinking on how to solve problems in integrating the back office, using approaches based on  TM Forum standards and guidelines. The results of these projects are demonstrated at TMF's TeleManagement World conferences in Nice and Dallas each year.
 “The super-catalyst, which we're likely to call the Converged Services Showcases, will be  really major events, involving media companies, device companies, cable TV, IPTV and mobile TV,” says Willetts.  “The idea is to show a whole set of advanced service scenarios, but unlike what you'd see at a trade show - where you typically just see the thing working - with the super-catalyst you'll be able to walk around the back of this and be shown how it's actually being operated and controlled using standards and the various OSS and BSS systems involved.
 “It's at an early stage of development, but the general idea is that you go to the show floor and you see the equivalent of a town with houses and retail establishments and so on.  And you see all these services that you're getting and then you walk around the back to the network operations centre and you can see how it's all being managed.  It's a big leap.”
We're working on, not just a demonstration, but a real catalyst designed to flush out problems and what standards you need, and what bits you need to invent that you haven't thought of. The fact is that we don't know what the standards requirements are in some cases in the converged world yet, and that's why this super-catalyst is going to be a great vehicle for developing the whole area. It's going to be a major undertaking.”
The plan is for the first super-catalysts to debut later this year at the TMF's Dallas TMW. 
Nice TMW will be the start of the major change.  “What we want to show is that convergent services are here. So we have a very strong convergence message and a very strong illustration that TMF is responding.  There will be discussion about managing content-based and entertainment-based services and more involvement from media companies. For instance, for a meeting at Nice we've invited executives from Disney, Time-Warner and Virgin Mobile to join the table. The fact is that it's just as relevant for a senior executive at BT, say, to sit down with a Disney executive, as it is for the Disney guy to get to understand how the company can exploit the telecom space.”
 “For some of these players convergence will result in a partners' love-fest and for others it will be 'daggers drawn', as they realise they're going to be contesting the same space, but in the long run nobody knows who will be in which role at any one given point in time. TMF's role isn't to try and predict that.”
What about the core frameworks and standards generated by the TMF? Will these have to change markedly to accommodate the broader remit and the entry of new types of player into the value web?
“Yes, no doubt there will be changes as we go forward. One area that we're probably going to have to address in all our output is outsourcing. While our current guidelines intrinsically assist players to define and manage all their processes, so that outsourcing, where required, will be simpler to accomplish, it's also true to say that outsourcing isn't often specifically allowed for. I've just been to India to speak at a TMF event there, and what I heard there was really eye opening in terms of the way outsourcing is being used to reduce costs.
“At Bharti Airtel, one of the big mobile operators with 80 to 90 million subscribers, all the IT is outsourced and they operate at a cost level that a European mobile operator, for instance, can't even come close to.”
Willetts says he thinks that outsourcing and partnering arrangements are bound to become more complex and must be catered for in the back office in a fundamental way.
“For example BT might run an IPTV service in the UK using its infrastructure, and in Germany it might run a service on someone else's because it doesn't own any infrastructure there. But it will probably want to run the same brand and service.  The back office systems need to support that sort of thing.”
But the big question has to be asked. Isn't there a danger in all this for TMF?  This is a member-driven organisation and it is energised by a core of highly motivated, mostly telecoms-oriented individuals who give, not just their companies' time, but often their own time and effort as well. Doesn't TMF run the big risk in realigning itself so radically?
Willetts is adamant: “What people sometimes don't understand is that it's not a question of: 'If you go and chase all these converging media and web companies, will you desert your core telecom membership in the process?'  That question forgets the fact that  telecom companies are, themselves, becoming multi-media companies.  So, the reality is, to be of maximum use to our core constituency, we need to run with them, not away from them.”

Ian Scales is a freelance communications journalist.

Customers yearn to be loyal, claims Geoff Webb, but there are far better ways of keeping them on-side than conventional loyalty schemes

Let’s face it: most loyalty schemes today are really a confidence trick.  The rewards they offer are meaningless to most customers. Do even the major brands that launch these schemes honestly expect them to be effective in winning true, bankable, customer loyalty? I doubt it.

CUSTOMER LOYALTY - The knot that binds

The tiny value of benefits offered by loyalty schemes - typically about one-hundredth of what customers spend - is one main reason why these schemes rarely work. An even more important reason is that the schemes don't address what customers actually want.
Understanding what customers do want, and even more importantly, why they want it, is essential if you intend to be in the leading pack in the customer loyalty stakes, and not just an also-ran.
These are strange, often bewildering, times to live in. What are we to make of an age when hundreds of thousands of different brands compete wildly for people's time and their business – trampling across each other's turf? When the Internet has become all pervasive and so influential? When busy people who like to play global Internet games in their limited spare time are willing - even eager - to pay real money on specialised auction websites for virtual game credits such as game gold? When, if we look at the big picture, customers are confronted by a blizzard of distractions and competing choices for their hard-earned money?
It's a blizzard that may make many consumers feel like staying in their tents until the storm abates. Except that it is not likely to do so.
These are times when instant gratification is no longer seen as a vice. Instead, it is regarded as a major benefit that a product or service can and should offer. These are times when consumers have more opportunities to indulge in hedonistic enjoyment of life than since the days when our species first evolved from the hungry hominids that were the real Adams and Eves. These are times when shopping is not a chore but a hobby, and according to several research sources the most popular hobby of all.
The pleasures offered by our world may be exciting. But it is also a complex, confusing, distracting and bewildering world, and now it has a virtual dimension as well as a physical one. Hardly surprising that we often want to escape from it.
A good way to escape from it is through our imaginations or via the imaginations of others. Historical dramas have never been more popular. One of these, the UK's Dad's Army, which turns up regularly on satellite channels and repeats on terrestrial TV, has a great deal to teach us about customer loyalty.
You'll remember the doddering absurdity of Mr Jones, the butcher, but you'll also remember that Jonesey, ludicrous as he is, always knows what special cuts of meat his regular customers want for the week-end, and what little delicacies they would particularly enjoy getting under the counter as a special treat.
The world of Dad's Army has vanished as completely as food rationing, but Mr Jones the butcher had an approach to rewards and winning customer loyalty that is even more relevant now than it was when Churchill led the War effort. Jonesey knew his customers, and cared about them, and took it for granted that he was in business to look after them. Above all, he made them feel he understood them and that they had a special relationship with him.
Today, an ambitious customer service manager at any organisation that is striving for real competitive advantage could do a lot worse than borrow a lesson or two from Jonesey.

The loyalty challenge today
All organisations - even very successful ones - are facing an unprecedented challenge on the customer loyalty front.  Competition for customers is intense. Organisations are only too aware of the financial benefits of being able to win loyalty from their customers at a time when getting a new customer is more expensive than it has ever been.
Disloyal customers are fickle, well aware of their spending power, and demand more and more value for money. And who can blame them for so often being disloyal when the rewards for loyalty are so meaningless?
Winning customer loyalty, making your customers want to buy more things from you and getting them into a frame of mind where they automatically turn to you to buy more things is the reason why organisations exist. You want your customers to stick to you. You want minimal churn of your customer base. You want to see your sales revenue and importance to the customer shooting up as a consequence of that loyalty you are winning.
Yet if the customer loyalty challenge is difficult for any organisation, it is toughest of all for very large organisations, the type with hundreds of thousands or even millions of customers.  Why? Because at heart customers still want a 'Jonesey' type of customer service. They want that type of personal service because they are people, and people have a natural desire to want to feel that the organisations from which they are buying things care about them.
People want personal service, relevant rewards and the real service efficiency that should come, they feel, from familiarity. The excuse 'we are a massive organisation and we have too many customers to offer different services and rewards' simply isn't going to wash.
The customer service challenge is especially difficult to meet when an organisation is selling what can be termed non-emotional products.
These are products that do not, at least on the face of it, embody any inherent emotional gratification. These are products that people buy because, basically, they have to buy them. All the customer expects from the product is that it will do what it is supposed to do. Such products might include:
•    insurance, pensions, investments and most other financial products.
•    domestic cleaning chemicals and any other regular domestic purchases.
•    most, if not all, over-the-counter pharmaceutical products. There will be ones you prefer, but you aren't going to be very emotional about buying them.
•    basic foodstuffs that you buy regularly.
•    most other things that you buy regularly because you use them up.
 
Research suggests that in practice about 90 per cent of purchases are non-emotional. That leaves ten per cent that are emphatically emotional, meaning that they offer a clear and inherent emotional reward.
It's impossible to be completely certain about which products and services are likely to be emotional for particular people, as the emotional appeal of something will vary from one person to the next. All one can say for certain is that some products and services do have a significant amount of emotional gratification attached to them.
Emotional purchases are particularly interesting features of the customer loyalty stakes. Organisations selling products and services that have a high emotional appeal wrapped up with them often don't need to struggle so much to win customer loyalty. The product or service does the job for them.
People who love Jimmy Choo shoes, or Prada handbags, or holidays from companies such as Abercrombie & Kent, Western & Oriental or Red Carpet very likely don't care too much whether these vendors offer them a free suitcase with every six holidays they take. All these customers want is for the vendor to keep producing great experiences (embodied in specific products and services) that make them feel special when they buy them.

Winning loyalty for non-emotional products
But that is only one part of the story. Why? Because there is compelling evidence that, in fact, it is possible for organisations selling emotionally ungratifying products and services to enjoy real success in winning customer loyalty, if they go about in the right way.
How is it possible to win loyalty for such products and services?   Because, at heart, customers want to be loyal. The same blizzard of distractions and choice that makes the modern commercial world seem like one where individual organisations have no earthly chance of winning customer loyalty, has in fact created a situation that is ripe for the winning of loyalty.
When we are in an unfamiliar and even frightening situation we want to find anything that reminds us of home. It follows then that when we are confronted by a vast amount of choice, we love having comforting, special relationships with organisations that we like and which we know like us. It's merely human nature at work.
But organisations need to make a real effort to win this level of loyalty from customers. It takes careful thought. If you want your customers to feel they have a special relationship with you, you need to give them reasons to feel this. Just tossing a loyalty card at them that gives them spending power back equal to one per cent of what they spend with you is never going to be enough.
Instead, you should work to develop relevant rewards that reinforce the special relationships consumers are looking for. Make your customers feel special. Give your existing customers better deals with every new purchase, which return some or all of the money and effort you save when your existing customers make another purchase simply by clicking on an icon on your website or by activating any other method of buying from you. Don't do what most organisations do, which is to reward new customers better than existing ones.
Create categories of customer depending on criteria they will appreciate, and make your best customers know you regard them as that.  Create a multi-tiered loyalty scheme (eg. one with Gold members, Silver members etc) that confers not only status but also benefits. The British Airways system where Gold members get a luxury lounge to unwind in is a very real and tangible benefit amidst the chaos and hubbub of the average large airport. It is a more important reward than BA miles, contrary to what most people think.
Make the next incremental purchase easy to achieve. Once you have won a customer, make it as easy as possible for that customer to buy other things from you. Every time you are in touch with a customer, whether face-to-face, via the Internet, by phone, by mail or whatever, ensure that there is some really easy way for the customer, in effect, to 'just say yes' in order to make a particular purchase.
In practice, only a small minority of organisations actually take the trouble to make it easy for existing customers to buy the next product. Most organisations manage this repeat business element of their interaction with the customer so badly that it almost seems they don't really want the new business. Remember: ideally you want each of your customers to buy at least three products from you. Selling one product a year to a customer is not a relationship.
Give customers a relevant reward for their purchase. By 'relevant' I mean something that has a practical use and which also relates directly to what you are selling. Don't offer them the chance of a free hot air balloon trip if they are loyal for four years. That is a mindless and pointless reward. The first thing you should offer is a 'share the savings' discount on the next product or service you are selling them, you know how much cheaper it is to retain an existing customer than win a new one: you should pass some of that cost-saving onto your loyal customers.
It should really be straightforward for you to design the next levels of benefit if you focus on the three things that will make your loyal customer feel special. If you want to be certain of what they want, ask them, and listen to what they say. Add a good dose of common sense and aim to give them things that extend the current relationship. For example, a gold customer of an electronics retailer might be offered merchandise at a reduced cost, or access to a home trouble-shooting service.
Standard loyalty schemes may even be worse than useless because they can so easily distract organisations from the real challenge of getting to know their customers and giving customers relevant and effective reasons to stay loyal. In my experience a poorly-designed loyalty scheme will usually block the business that launched it from improving its customer relationships in more sensible ways for at least three years.
Organisations that rely exclusively or almost exclusively on price for their attempts to win customer loyalty also have reason to worry about their competitiveness.
Competing purely on price is the last refuge of the unimaginative. It is not so much that pure price competition will always fail in the end, though it will, but rather that indulging in it is likely to stifle an organisation's ability to discover and react to what really matters to its customers. Customers don't have time to invest in a hundred brands or service relationships – there is too much going on. A winning brand has to give them reasons to stay loyal that really work.
'Customers don't want to be loyal any more.' Examine that statement against the real evidence available, and you'll find it's a myth. This whole idea that customers today are butterflies who have no other wish than to dart from one flower to another is an idea created by those organisations that can't be bothered to identify and implement the right measures to keep existing customers loyal and bring new ones to the party.
You can do better; you know it. What's more, your customers urgently need you to do better.

Geoff Webb is chief executive of The Webb Partnership, and can be contacted via tel: +44 7767 777 887; e-mail: geoff@gpw.com
www.thewebbpartnership.com

Hugh Roberts sets the scene for BIMS 2007

Whether you prefer to call them ‘silos’ or ‘stovepipes’, the history of telecommunications has been dominated by the development of vertical towers. Within the traditional telecoms operations environment, every new service created a new conduit from network to subscriber, creating new systems and processes from customer order to trouble ticket via provisioning, billing and termination along the way.

The first wave of activity in the 90's (BPR initiatives notwithstanding) focused on systems consolidation. Incumbents (and ex-incumbents) with 200+ billing systems realised that to compete they needed to cut costs and IT headcount, and – more to the point – could potentially achieve a more consistent 'one-touch' view of their customers at the same time.
Since the Millennium, the second wave of functional consolidation has had to face up to the challenges of systems convergence head on. In addition to the natural desire to simplify operations by integrating disparate business units and functions, the demand for innovative content and eCommerce services to create new revenue streams has complicated both business and operational environments and relationships.
We are now entering the third wave of industry consolidation, where the convergence of market sectors no longer respects traditional boundaries. In the light of reduced margins for traditional services, fixed wire, mobile, cable, satellite and third party brands have all sought to extend their virtual or physical service footprint to achieve ubiquitous market presence and maximise the leverage of their customer ownership. At the same time, new technology platforms have evolved, creating competition from unexpected quarters.
M& A activity is creating – where regulators will allow it – larger operators and vendors that own or provide a greater proportion of the communications infrastructure. Where direct ownership is impossible, virtual service extensions – through MVNO strategies or otherwise – are now presenting customers with full multi-play offerings. However, this apparently inexorable evolution has masked some critical aspects of the underlying market reality: 
1. Corporate competition between technology platforms at the network layer, each with its own mechanisms for customer access, is not sustainable. Increasingly, customers don't want it, and neither do regulators.
2. The 'bitpipe' business model based on multi-channel infrastructure ownership will be very profitable, but as a high volume low margin business, will only be sustainable if it can remove the need to financially support a consumer-facing brand.
3. Multi-play offerings, by their very nature, change customers' perceptions and expectations of the interaction between the branded elements of their overall communications (and entertainment) environment. This in turn will lead to changes in the fundamental relationships between service providers, third party content and financial brands, and the suppliers of their hardware and software.
All of these factors, plus the attentions of the EC Commissioner Viviane Reding, makes structural separation inevitable. It is simply not realistic for network infrastructure owners and communications service providers to continue as integrated entities. The question therefore arises… to which tier in the new horizontally defined 'divergent' environment will the various elements of operational and business functionality need to migrate?
Silos clearly won't work, but then neither will the anticipated tight coupling of the OSS and BSS layers, particularly when considering the integration of new development areas such as customer 'attention data'. This is the debate we need to be engaged in – how do we correlate, filter and share all of the data we can now generate? The repositioned 'telcos' (and their business models) that turn out to be successful will be those that actively contribute to a value chain that can collectively achieve effective information management.

Hugh Roberts will be co-presenting the 'Keys To Establishing A Successful MVNO/E Business' Seminar with colleagues from Logan Orviss International on June 5th, as well as running the  'What's New In Billing?' free Tutorial.

You can visit the Billing & Information Management Systems Exhibition (7th – 9th June 2007) free of charge if you register online at www.iir-billingsystems.com/exh.
Billing & Information Management Systems

Professor William Webb argues that it is possible to predict the next 20 years of wireless with reasonable certainty.  Given that, writing in 2000, his predictions on the development of wireless communications in 2005 proved to be pretty accurate, he may well have a point

Many take the view that the pace of technological change is becoming ever faster. This is seen as particularly so in the worlds of computers and communications. If this were so, it would perhaps be rather foolish to predict what the world of wireless might look like 10 and 20 years hence.

For example, in 2000 I made my first prediction of the future, published in a book called The Future of Wireless Communications. Based on a mix of deduction and contributions it predicted what the world would be like in 2005, 2010, 2015 and 2020. When we reached 2005, I analysed how accurate my predictions had been. They were almost exactly right. The only areas of difference were in the particular standards that would 'win' – for example in 2000 it was unclear whether BlueTooth, WiFi or cellular picocells would dominate in the home, although it was clear that wireless home networks would increasingly emerge. Interestingly, in overall terms I predicted little change of substance between 2000 and 2005, and that is exactly what transpired.
In 2006 I repeated the exercise, taking a long hard look at the current industry position and making some fresh predictions for 2011, 2016, 2021 and 2026. These predictions are detailed in Wireless Communications: The Future, published in early 2007.
Some of my conclusions were contrary to current thinking and in particular to the view that technology is changing ever more quickly. For example, I came to the view that that there would not be a completely new '4th generation' of cellular as 3G reaches the limits of what is possible in a radio channel; that fixed wireless access would not succeed – even with the advent of WiMax technology; and that W-LAN in the home will provide the basis for convergence between home and cellular systems and not cellular 'femtocells'. I considered industry structure and drew the conclusion that the current vertically integrated approach where operators own networks and provide customer facing services was not sustainable in the long term, but would persist for many years and, in doing so, would slow convergence.
I took a look at adoption rates; at average monthly spend on telecommunications and its change over time; and at the process whereby new concepts become assimilated into society. This led to the conclusion that services take between five and ten years to be adopted, even if the service is 'perfect' and that spending on communications can only grow slowly.
Finally I studied the theory of wireless communications and the many physical and empirical laws that have been used to predict future developments, noting that some, like Moore's Law, are likely to continue to hold true for decades, whereas others, such as Guilder's Law, are already inaccurate and cannot be used as a basis for prediction. I examined a whole raft of emerging technologies such as cognitive radio, smart or MIMO antennas, fibre radio and much more. I concluded that none of these advances was likely to make a significant difference, instead steady growth in wireless capacity will be driven by ever smaller cells.

Major growth areas will include ever-enhanced handsets, home wireless networks, intelligent software and service provisioning. Areas where change will be beneficial but very slow coming will be in battery capacity and the ability to cheaply backhaul high capacity small base stations.
Compared to the predictions I made in 2000 there is much alignment. Where there is a difference, it is almost always a delay in 2006 predictions compared to the 2000 predictions, showing how slowly many things develop in the world of wireless and how easy it is to over-predict change.
In summary, I believe that it is possible to predict the next 20 years of wireless with reasonable certainty. For the user, the next 20 years will see a very substantial, but steady change. Users will come to rely on their handset as a single device to manage their communications and indeed, much of their life. It will truly become a “remote control on life”, with massively enhanced capabilities including huge storage, advanced methods of user interaction such as speech recognition and many in-built tools such as cameras, music players, etc. Users will cease to differentiate between different communications channels and instead see the world as one large communications network, able to provide them whatever content they need wherever they are. Users will also no longer see broadcasting and communications as separate and indeed, the concept of broadcasting will change dramatically to one of content provision that is sought out by users – more like the publishing model of today. Users will perceive their lives becoming more convenient with wireless systems automating a range of tasks, providing new capabilities and altering travel according to conditions.
Achieving all of this will require little in the way of change for wireless technology – and indeed no further significant advances in wireless technology are expected. However, there will be substantial progress in the intelligent systems that use context to configure devices appropriately, control interaction with the handset, and control home and office networks in a simple, yet intelligent manner.
Overall, the future is marked by an initial period of stability as 3G and broadband networks are built out followed by the emergence of new services. Beyond this I expect the underlying wireless communications infrastructure to become a slow-changing utility similar, for example, to railways or, increasingly, the core Internet infrastructure, but with substantial excitement and growth around the services provided on top of this wireless platform.

Professor William Webb is Head of Research and Development at Ofcom.  He is a Fellow of the Royal Academy of Engineering and a member of the Board of Trustees of the IET.

Declining ARPU, decreasing EBIDTA and increasing churn rates on the one hand, and ever increasing subscriber acquisition costs on the other, are forcing the telecommunications industry players in saturating markets to find new ways of increasing minutes of use and airtime.  Martin Löffler looks at survival strategies

Mobile network operators are increasingly challenged by market developments. Facing the threats to which they need to respond, new attitudes, and openness to new business models will be critical to survival.

MVNOS - A new lease of life?

Communities such as lifestyle, special interest groups, fan groups, health, sports, music, etc. could be ideal targets. Singly or in combination they could support a viable MVNO business. However, a mindset shift is required to separate the business models necessary for communities of interest - typically service provider-led and driven by 'pushed' services - from those required for affinity groups, where the groups themselves determine key issues such as membership, security and profiling.  In both cases the opportunities to drive up data revenues for the MVNO (and therefore also the underlying MNO) are strong – in Japan there are already examples of mobile data ARPUs above ?25.
Organisations, including Logan Orviss, are closely following the market conditions for MVNOs.   EMarketer, for instance, recently said that 'MVNOs will become increasingly important for both wireless operators and brands', and indeed, MVNO business is expected to account for almost $30 billion in overall revenue by 2010 (ARC Group).
Logan Orviss International's assessment examines how MVNO business models are evolving, including the expanded use of revenue sharing models with the operators, versus today's cost-plus pricing approach.
As mobile markets are reaching saturation, or have already reached saturation, in all European countries, the further appearance of potentially successful MVNOs has added to the competitive pressures on the existing mobile operators. Moreover, competition is arising from new and unexpected sources. In this fiercely competitive landscape operators have coped by differentiating through their business models, with some adopting a walled garden approach, and some utilising a dynamic, open garden approach which requires constantly monitoring demand amongst its subscriber base and constantly offering new services.
Despite the fierce competition MVNOs have proven their ability to enter these markets and still have the capability to increase overall market revenues from basic services like voice, SMS and PSMS. With increasing market share MVNOs can reduce their cost margins and evolve into a high ARPU business. However, not all MVNO business models will survive.
MVNO models have usually been seen as relevant only to developed markets where the penetration rates are high and customer retention through loyalty (coupled with overall ARPU growth) is the critical success factor.  MVNOs allow the MNO to access revenues from market niches that could (a) potentially conflict with the core brand positioning and/or tariffing regime, (b) avoid the cost and risk of going after these niches, and (c) potentially increase their market share – even over and above that allowed by the regulator – by extracting revenues from an MVNO whose ownership is maintained at 'arms length' from the MNO. Although the returns are lower, the MNO's revenues from MVNOs are relatively risk free and under-utilised network capacity is exploited with minimum outlay.
At first glance, this wouldn't appear to be applicable in high growth markets where the current penetration rates are low and the MVNO model is seen as being 'more trouble than it is worth'.
However, in high growth markets, shareholders and boards are continually pushing for an increase in the number and proportion of postpaid subscribers (ie converting prepaid into postpaid subscribers) as a way of increasing ARPUs. (Example fact: No network in Nigeria claims to have more than 50,000 postpaid subscribers.) From the shareholder perspective, a secondary but equally critical factor is that with postpaid (contract based) revenues the potential to project revenue streams forward (under increasingly onerous audit rules) is much greater. This can be of high importance for the CEO/CFO, allowing them to present a stable, auditable and profitable business growth/development plan.
In predominantly prepaid markets there is little point in trying to create a wholesale migration to postpaid - it won't work and is not, at this point, remotely competitor proof. But why shouldn't operators build a wholesale platform that allows them to easily connect MVNOs to grow their overall number of subscribers? In many developing countries the banking system is still weak and people don't trust direct debit, which is an important factor in postpaid environments. An alternative strategy is to redevelop the brands and sub-brands in a way that separates them from the payment mechanism, but not from potential ARPU stratification.
Brand management expertise deployed in many developing markets is becoming increasingly more sophisticated. Currently, global best practice in telecoms markets is, quite possibly, to be found in Pakistan,  not in Europe. One key factor is the cost of advertising, and hence the cost of supporting multiple sub-brands, which is much cheaper in developing markets. Mobile channels also allow direct interaction with the customer. Customer experience management has now moved far beyond basic SMS interaction and into the domains of balance enquiry and AoC (Advice of Charge) marketing, which, if the MIS is set up correctly, is highly cost effective and very good at generating service usage growth.
This approach – based on marketing smoke and mirrors rather than hard technology - benefits from a degree of systems convergence, but does not necessarily require it. .
The CMOs and CIOs in high growth markets tasked with enabling large scale pre- to post- conversion are struggling. Many have 95 per cent prepaid customer bases; the survey and focus group responses suggest that this isn't going to change in the near future, and that if it does it may well negatively impact their overall growth rates. Further, whilst their postpaid ARPUs are higher, the margins achieved are not necessarily any larger as the overall cost of customer management can be much greater. Many shareholders – and even some board members – of companies active in these markets are unaware that in some cases up to 40 per cent of their postpaid subscribers have very low ARPUs. These 'vanity' customers maintain postpaid accounts purely for the social prestige value, and therefore don't generate significant service revenues. Indeed, in many cases these customers may be retained on negative margins, but can't be churned off without creating negative pressure on the 'elite' postpaid brand positioning. The development of 'hybrid' accounts – very effective in other respects - does not help much with this problem.
Brands and sub-brands, therefore, need to be aligned to lifestyles and bundled service offerings of which the payment channel selection is no longer the defining context, but becomes an option.
A growing concept in prepaid is service-led 'customer self-locking'.  Rather than locking a customer in to a contract to ensure their 'loyalty', the customer is encouraged (by a suitable marketing inducement) to subscribe to a single or bundled service subscription over a longer period of time. For example: a customer who might want a one month subscription to a text alert or paypal service is offered three free months if he pre-subscribes for six months, giving him service access for nine months. If the service is new to the customer, a one month 'try before you buy' offer could be added in to the mix, refundable against the free extra three months offer. The customer is now effectively committing himself to the relationship with the CSP – and any brand manager will tell you that this is far more powerful in customer experience management terms than a contract could ever be. Customers in high growth markets can be clever, and many often own multiple SIMs which they 'juggle' to minimise the price they have to pay (or at least their expectation of the price they have to pay!) and the specific services – for example international calling or fund remittance to family members 'back home' - that they frequently use. Leaving aside SIM-locking practices in some countries… anything such as a self-locking programme that keeps the SIM in the phone for longer is good news as it will attract both inbound termination revenues and promote serendipitous additional service usage.
The strategies outlined above potentially offer a greater degree of customer retention, but they don't substantively assist the CFO in providing auditable forward projected revenues, which are an important factor in increasing shareholder confidence. One route to achieving this could be to adopt an MVNO model based on either third party brand ownership, or as a JV through a discretely branded subsidiary. Termination clauses placed in the business agreement between network and MVNO could be designed to enhance and stabilise forward revenue projections. The entertainment industry offers many good examples of how this approach can be exploited. However, the same methodology has been far less successful in the commercial aviation environment.
Whilst the per subscriber margins from MVNO-sourced customers will obviously be lower for the MNO than from a 'direct' customer, the cannibalisation effect will be minimal in the high growth environment. However, assuring revenues on this basis may provide an effective means to appease shareholders on revenue continuity. This just might prove to be important, not least as they come to terms with the fact that mass prepaid to postpaid migration isn't going to happen and that their expectations have been based on the erroneous assumption that customer behaviour in high growth markets will eventually normalise with the behaviour patterns encountered in the UK and Germany.

Martin Löffler  is Managing Director, Logan Orviss International Deutschland

The battery-life of mobile devices is no longer a barrier to video content wherever you go. André Pagnac explains

Less than a decade ago, the advertising slogan for a leading Internet service provider was ‘where do you want to go today?’.  It meant this figuratively, of course, with the implication that by visiting any site in the world, you were travelling there yourself.

MOBILE VIDEO - Video on the run

The revolution in mobile technology now means that the literal opposite is true.  Now you can go wherever you wish and still be connected to whatever you wish to access via the Internet.  In terms of mobility, we have now moved beyond the concept of the office in your pocket, this year is about taking your entire house wherever you go.  In addition to business applications such as e-mail and web, the latest development is of course video content on mobile devices.
Until very recently, however, there have been barriers for consumers in accepting some new technology.  One major challenge for many customers is the size of files they have to download and the capacity these consume.  This is exacerbated by having to pay for content by the kilobyte.
Another obstacle is the drain on the batteries of applications such as video streaming.  The MPEG4 ASP is something of a chief culprit of both of these problems if it is to maintain the DVD-quality of 24 frames per second (FPS). 
To demonstrate this in real terms, take a modern mobile phone handset using MPEG4 ASP to play video content.  After just 90 minutes, it would run completely out of juice.  That would be before the user had made a single call, sent a text or checked their diary.

Quality v consumption
The debate continues to rage about whether or not mobile video content has a future.  This, however, is not what the debate should be.  It is already clear that it does indeed have a bright future.
For example, there is already an influx of LCD colour screens with improved quality, resolution, power consumption and lower prices.  Meanwhile, network bandwidth continues to increase with no real limit on high-speed wireless networks at home, work or public locations.
Yet although consumers are already used to IT, their incomes are rising slower than advances in IT.  However, they do have money to spend and the trend is to create their own content as well as to download that of others.  Whether for their own personal communication, entertainment, download to other sites or even 'citizen journalism', users of mobile devices are undoubtedly taking well to mobile video.
Consequently, they are sophisticated and discerning about user experience, available content and usage and in their choice of products.  The debate should therefore be on how manufacturers can create the best user experience. 
This means that the major business model challenge is for network operators as they strive to achieve further uptake of the potentially prosperous mobile video services.  How can they reduce power consumption and file size of video content without compromising on quality?

Codec wars
Original video source files in the uncompressed form are usually very big, and hard to manage. That is why compression is necessary for more efficient storage and transmission of the video.  Therefore, the key is to select the right codec. 
Most mobile phones today use ARM-based CPUs, operating at about 100Mhz to 400Mhz.  In such environments, most other video codecs struggle to deliver smooth, DVD-quality video.  Video compression and decompression are highly computation-intensive processes, with lots of calculations being done on a tremendous amount of data every second.
The current de-facto standard, MPEG2, is now becoming antiquated, so network providers and content creators alike are now seeking the next generation in compression technology.
We have already discussed the disadvantages of MPEG4, which, owing to its name, had initially been considered the natural successor.  One of the latest market entrants, Mobiclip, offers an alternative on all counts, including price, capacity and power consumption.
For example, compared with Mobiclip, MPEG4 files need to be 30 per cent bigger for the same picture and sound quality and so consume more memory on a mobile device.  Running content in MPEG4 also requires four times as much battery power as it would to run the same clip at the same quality using Mobiclip.
Of course, reducing power consumption and capacity requirements severely impacts on user experience, which manufacturers must avoid.  So, where MPEG4 would allow a user to experience mobile content for just 90 minutes, Mobiclip would allow the same mobile device to play seven hours of video, in even higher quality.
This means that, where someone might not even get to the end of their film using MPEG4, they could view two movies using Mobiclip and still be able to make calls and send texts.
So we see that the technology is there.  Demand is there.  So the debate is how to make creating and using mobile content as enjoyable an experience as possible.  That was why it was invented and that is why consumers want it.
Consequently, Ovum predicts that 2007 will see the real start of the mobile-TV era.  In the next 12 months, we will see mobile phones fulfil their potential as 'video iPods' and become the 'third medium' of entertainment after TV and cinema. 
For this to happen and for the market to reach its tipping point, manufacturers must ensure they select the right technologies to make the experience for users as positive as it was always intended to be.  That is, users can go anywhere and still have access to all the information and content they want.

André Pagnac is CEO of Actimagine and can be contacted via: contact@actimagine.com

European Communications recommends the shows that count in the period from March to June 2007

DCE + Data Centres Europe    London    21-23 March    www.datacentres.com
Telecoms Risk Management    Prague    26-27 March    www.vibevents.com
Managed Services & Outsourcing    Monaco    26-29 March    www.iir-events.com
C5 World Forum    Milan    26-29 March    www.iec.org
The Next Wave of MVNOs    Madrid    27-28 March    www.jacobfleming.com
CTIA Wireless    Orlando    27-29 March    www.ctiawireless.com
NG Network Interconnection    Brussels    28-29 March    www.vibevents.com
Telecoms Fraud & Risk    London    26-29 March    www.iir-events.com
Telco 2.0    London    27-29 March    www.telco2.net
Caspian Telecoms    Istanbul    11-12 April    www.ite-exhibitions.com               
Future Technologies    Oxford    13 April    www.conted.ox.ac.uk/cpd
Fixed-Mobile Convergence     Amsterdam    16-18 April    www.marcusevans.com
Mobile Roaming Strategies    Barcelona    16-19 April    www.iir-events.com
WIMA 2007    Monaco    18-20 April                www.wima.mc
Managing B2B Experience    Vienna    19-20 April    www.jacobfleming.com
Mobile TV    Berlin    23-25 April    www.iqpc.com
ISP & Broadband Forum    London    23-26 April    www.iir-events.com
Service Provisioning    Prague    23-26 April    www.iir-events.com
IMS 2.0 World Forum    Monte Carlo    24-26 April    www.informatm.com
Infosecurity Europe    London    24-26 April    www.infosec.co.uk
Billing & OSS World    Chicago    25-27 April    www.telestrategies.com
Triple-Play and IPTV Forum    Barcelona    25-27 April    www.marcusevans.com
IPTV Opportunities                    Milan    26-27 April    www.jacobfleming.com
WiMAX Business Strategies    Prague    8-10 May    www.iir-events.com
HSDPA/HSUPA    Rome    14-15 May    www.jacobfleming.com
SVIAZ/Expo Comm Moscow    Moscow    14-18 May    www.expocomm.com
Revenue Assurance     London    15-16 May    www.vibevents.com
IPTV World Forum Eastern Europe    Prague    15-16 May    www.iptv-easterneurope.com
Handset World    Amsterdam    15-17 May    www.informatm.com
Mobile Device Management    Amsterdam 17-18 May    www.jacobfleming.com
TM World/Excellence Awards     Nice    20-24 May/24 May    www.tmforum.org
MVNO Business Strategies    Barcelona    21-23 May    www.marcusevans.com
ANGA Cable    Cologne    22-24 May    www.angacable.de
WiMAX World Europe    Vienna    29-31 May    www.trendsmedia.com
Kitel    Almaty    29 May-1 June www.ite-exhibitions.com 
Youth Marketing in Telecoms    Lisbon    31 May – 1 June    www.jacobfleming.com
BIMS     London    4-8 June    www.iir-events.com
Carrier Ethernet Services    Rome    11-13 June    www.marcusevans.com
VON Europe    Stockholm    11-14 June    www.pulver.com
Capacity CEE 2007    Prague    18-19 June    www.telcap.co.uk
NXTcomm    Chicago    18-21 June    www.nxtcommshow.com
CommunicAsia 2007     Singapore    19-22 June www.communicasia.com

As commercial mobile TV and IPTV services are rolled out around the world, it is becoming clear that telecom operators hold some winning cards: in particular, the ability to deliver truly interactive and personalised TV services without the need to invest in brand new networks. Per Nordlöf and Anders Kälvemark fill in the picture

As TV enters fixed and mobile telecom networks, user behaviour is evolving from a ‘lean back’ approach to a ‘lean forward’ one in which consumers want greater control over what to watch, how to watch, and when to watch it. Consumers are getting used to personalising, controlling and interacting with content, services and brands. At the same time, there is greater availability of high-capacity fixed and mobile broadband connections, and content is increasingly available in digital format – making it easier to store and distribute over fixed and mobile IP-based networks.

MOBILE TV - A unique revenue opportunity

The generations that are growing up with sites like YouTube, Google Video and other user-generated content sites will want to do more than just watching traditional 'linear' broadcast TV. In the USA, 20 per cent of TV viewers now surf the web at the same time as they watch TV, for example.
TV of the future will be about giving users access to their favourite programmes and content, wherever they are, whenever they want and whatever device they are using.
As TV moves from traditional one-way (broadcast) distribution towards digital two-way networks, it is undergoing a fundamental change. The addition of a return channel makes the TV experience more interactive and personal; less passive and more active.

Mobile TV over cellular sets the pace
The good news for telecom operators is that mobile and IPTV services can already benefit from the built-in return channel. They enable users to enjoy interactive, personalised TV services wherever they go – whether mobile TV on the go or IPTV in the home.
Out of the 120 mobile TV services that have launched worldwide to date, more than 100 are distributed over existing cellular networks. And there are already more than 10 million regular viewers of mobile TV in developed markets – around four per cent of mobile subscribers.
A recent study conducted by Ericsson ConsumerLab among more than 700 mobile TV users in six countries (France, Italy, Japan, Korea, the UK and the USA) shows that there is strong and growing interest in the services. These people claim to watch an average of around 100 minutes of TV on their mobiles every week. Around two-fifths of those surveyed say they watch mobile TV every day, with viewing situations spread fairly evenly between commuting, during breaks, waiting for someone while out, at home and anywhere when there is a big event on (such as a major sporting event). The most popular time for mobile TV viewing is between 6pm and 10pm – today's prime time for normal TV.
More than half of consumers in the study pay a monthly subscription for mobile TV, or have it as a part of their monthly subscription, and around one-third do not pay anything for mobile TV. On average, consumers pay 14 euros per month for mobile TV, although there were large variations between markets. Interestingly, the payment option does not seem to have any effect on usage – perhaps indicating that users are more willing to pay for worthwhile content.
The study found that mobile users value different types of mobile TV content in different situations. Commuters looking to fill some time want 'light' content that allows for frequent disturbances – to enable them to get on and off public transport, negotiate crowds of people, listen to station announcements, and so on. Such disturbances should not cause the user to miss too much plot or content.
People typically tend to relax at certain times of the day, and mobile TV content should be designed to fit into this pattern of behaviour. For example, the Ericsson ConsumerLab study found that people will watch weightier content early on in the day – on the way to work, for example – when they may want to check the day's business and technology news. This is also true of people who commute long distances and so have time to concentrate on more demanding content.
The enthusiasm of those taking part in the study is echoed in real-world trials of interactive mobile TV services conducted by Ericsson and Norwegian state broadcaster NRK since 2005. Two-fifths of those who downloaded the mobile TV client used it every day – around four times a day on average. One of the most interesting findings is that average session times for users who have access to interactive features are typically double those of viewers watching standard programming.
One new aspect of the NRK–Ericsson collaboration is the world's first trial of interactive, personalised advertising, started in December 2006. The advertisements are interactive, customised to ensure their relevance to individual users, and tailored to the user's age, gender, location and personal interests. Without any marketing, around 200 consumers downloaded an easy-to-use client that enables them to receive personalised mobile TV advertising in return for free TV shows, radio channels and other content on their mobiles (users still pay for the connection). As at January 2007, the trial has shown that clicking on ads increases average session time from around two-and-a-half minutes to over six minutes, and the average click-through rate is 16 per cent. The most popular driver of click-throughs is the offer of free ringtones.
The results of such studies and trials are encouraging, but the key question for operators now is, what is the best way forward for operators to meet the demands of a mobile TV mass market?

More interactive, more personal
Mobile TV is much more than traditional TV delivered to a small screen. In addition to being able to view content wherever they go – with a combination of linear TV, on-demand TV and Podcast TV – users have access to easy-to-use programme guides, fast channel switching, interactivity and personalisation features.
Users have greater freedom in where and when to watch. They can use personalisation features to get a notification when their favourite team has scored and then get the video clip and goal summary pushed to their device. They can interact with friends and other communities, for example through commenting on or voting for their favourite contestant in a TV talent show. Mobile TV clients are available as downloadable client software, which offers consumers a convenient way to access the service, change programmes using the keypads or a menu, and get a programme overview through an electronic programme guide.
For operators, interactivity opens up new revenue streams possibilities, for example through premium SMS when voting.
Personalisation is valued by users. With mobile TV delivered by cellular networks, consumers can personalise their own TV programme portfolio according to their preferences. Based on their video-on-demand consumption history, a recommendation engine can offer a tailored programme schedule. Content can also be provided based on location or TV advertising region.
Ericsson ConsumerLab's study found consumers have clear views about where and when advertising is acceptable. Ideally, ads should be placed before or preferably after a programme – not included as a break in the middle. The length of the ads also needs to be balanced: users have a limited amount of time available when watching mobile TV, and they do not want this time eaten into by long ads. The length of the ad must be in proportion to the length of the programme so, for example after a weather forecast, they would be happy to see a short sponsor's message, while during a longer TV serial episode they would accept a slightly longer ad before, and maybe one after.
What is clear is that a well-functioning and robust service, with great choice of content, is a must for continued mobile TV usage. The study found that features that enable users to take control over their mobile TV viewing would be very popular. For example, the ability to pause and play, rewind and fast forward, and record content would be well appreciated. Consumers are also interested in making their mobile TV watching more flexible and would like to be able to use the mobile phone as a portable media controller.

Converged vision
Mobile TV services via cellular network open up new business models and revenue streams for the operator – for example, through targeted advertising and add-on sales. The vision is one of networked media delivered over three different screen types – TV, computer and mobile phone – enabled by IP Multimedia Subsystem (IMS). 
To enable such seamless, converged service offerings for a mass market, removal of usage restrictions is key. If we want to enable any TV to interconnect with any mobile device or any computer – to be able to view content in the most appropriate way at any given time (TV screen in the living-room; mobile phone when waiting for a bus) – we need to have industry-wide agreement on how these different devices will share content.
Mobile TV and IPTV solutions must meet very high requirements on scalability and performance. The telecoms industry is used to talking about five nines availability: TV services must meet at least the same requirements – just imagine the consequences of large events, perhaps sponsored by major international brands, being interrupted by technical difficulties.
The telecoms industry, with its well-established commitment to global standards and high quality of service is well placed to address these requirements. Interactive, personalised TV should be part and parcel of fixed–mobile convergence and full-service broadband, underpinned by IMS and other open international standards.
Mobile cellular networks already have, by default, both down- and up-link communication abilities in the network, and so are ready to offer interactive, personalised mobile TV services. More to the point, existing mobile networks already have more than 2.5 billion customers and global coverage in place, and their capacity is being given a tremendous boost through High Speed Packet Access (HSPA) and, in the future, Long Term Evolution (LTE).
Today, mobile TV services are delivered over cellular networks using unicast streaming technology. Data packets are transmitted from a single source to a single destination, for example from a content server to a mobile device.
There is more than enough capacity in 3G networks to scale up for mass-market mobile TV services, especially if the operator has deployed HSPA. HSPA provides several capacity increase steps, enabling more users to be served with a greater diversity and higher quality of mobile TV content. LTE moves mobile capacity up to another level: Ericsson recently demonstrated speeds of 144Mbit/s in a live network using LTE.
Multimedia Broadcast Multicast Service (MBMS) will enable broadcasting over 3G networks by allowing traffic channels to be shared by all users that are simultaneously watching the same programme in the same area. MBMS complements HSPA to support higher loads in dense areas and ensure efficient network utilisation (as shown in Figure 1)
Figure 1. Mobile cellular networks can meet mobile TV capacity needs today and tomorrow

By using a combination of unicast and broadcast, network capacity and investments can be optimised. Broadcast bearers can be used for the most popular programmes, and an unlimited number of additional programmes and on-demand content can continue to be delivered efficiently using unicast. In the combined unicast–broadcast scenario, the user will not notice any difference in how content is delivered. The user will have a single user interface (TV client) in the terminal to access all content. This combination unicast and broadcast provides the best way to meet personalisation and mass market.
One glimpse of how converged TV services will work is being provided by a joint project between Endemol, Ericsson Netherlands and Triple-IT. The companies are creating a service that enables subscribers to interact with TV shows – for example, by sending in live news reports or comments from their mobile phones – in real-time, even from overseas.
The opportunity for telecom operators to create unique interactive, personalised mobile TV services is there – all that's needed now is for the right technology choices to be made.

Per Nordlöf is Product Strategy Director at Ericsson, and Anders Kälvemark is Senior Consultant at Ericsson ConsumerLab

    

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