CHECKFREE/SADAD
Towards the end of 2002, the Saudi Arabian Monetary Agency (SAMA) launched a new electronic billing and payments business unit called SADAD. Based on CheckFree technology, the service went live in 2004 and is transforming the way Saudi Arabia pays its telecoms and other bills.
Traditionally, Saudis pay at collection centres or their bank. Neither cheques nor credit card payments are popular (less than 2 per cent of the population have cards) and while a system of direct debits does exist, many dislike the control it gives billers over their personal finances. Some billers have electronic links with the banks but maintaining these interfaces is costly. And while some Saudis do use telephone and Internet banking, this is largely business based.
Ultimately, the bill viewing and payment solution turned out to be a network of 45,000 (Point-of-Sale) POS terminals and the network of 5,000 ATMs located in banks, shopping precincts and other public places. ATM users can view summary statements and pay them with a simple ‘Yes’ or ‘No’ prompt, and as more billers join providers like the Saudi Telecom Company, customers will be able to settle an ever increasing number of different bills from a single, consolidated interface.
Being part of Saudi Arabia’s central payment clearing centre, SADAD offers a faster route to payment than either credit cards or banks direct, which means billers get paid faster. Moreover, since everything is routed through SADAD, billers need no longer maintain multiple bank accounts and electronic links, saving substantially in bank charges, paperwork and administrative costs. The banks win too, since SADAD splits all payment transaction revenues with them – funds that can then be reinvested in new ATMs and other channels to strengthen the customer-facing infrastructure.
At the ATMs people can also renew their passport, buy insurance, order an airline ticket, top up their mobile phones and even pay their traffic fines – adding up to many thousands of transactions every day. Some billers are pressing for a more Internet-based bill presentment and full online payment gateway but until consumer demand reaches critical mass, it is not financially viable. When that time comes, however, the CheckFree platform gives SADAD a flexible infrastructure to respond quickly.
Details: www.checkfree.com
DIGITALK/ONI
Renowned as an agile provider of new services based on its success in the traditional fixed line telephony market, the Portuguese operator ONI was looking to offer greater value to its VoIP subscribers through innovative new services based on its existing infrastructure. At the same time, the economics of providing these services also requires transformation of the way that operators such as ONI run their network infrastructure, and the way that new services are created and provisioned.
As it migrated voice traffic from its circuit-switched network to take advantage of the greater economies of an IP network, it encountered inflexibility and elevated costs associated with this existing platform. ONI decided that, facing a market where subscribers expected lower-priced voice services and greater control over what was on offer, a platform with greater capabilities was necessary.
“We felt that our current platform, although a foundation of our voice business over a period of years, was becoming a limitation to the horizons of that business,” says Sergio Ramos Pinto, Director of Customer Support Services at ONI. “In particular, we were concerned about the cost of provisioning new VoIP services, and the time it was taking to provision these services.
“Our analysis of potential suppliers initially showed them on an equal footing, but cost, architecture and the possible margin we could achieve by using Digitalk put them in pole position.”
Digitalk’s VoIP platform formed the basis for all of ONI’s new VoIP services, including Digitalk’s Studio service creation environment which allows subscribers access to sophisticated call forwarding and barring features.
Provisioning new services within the network has been simplified, reducing the time to implement new subscriber offerings without the need for specialist engineering staff.
Details: www.digitalk.com
Features
European Communications discusses the latest telecom trends with telco executives, analysts and topic experts viainsightful analysis, Q&As and opinion pieces.
Case studies
- 19 June 2006
Event preview
- 19 June 2006
Event organiser, the International Engineering Consortium, details what to expect at this year’s event in Paris
The Broadband World Forum Europe has come along way from the days of a 300 person show with 18 exhibitors to what it is today – among the leading conferences and exhibitions for the European community – with thousands of telecom professionals in attendance and more than 100 exhibiting companies covering over 2,000 square meters of exhibition space.
The CNIT La DeFense in Paris, France, is home to the 2006 program this October, featuring more than 40 individual breakout sessions, plus a variety of Keynotes, Plenary Panels, Hot Seat Sessions and Industry Overviews. With the launch of the Broadband World Forum in Europe, the carrier community has got behind the event with support from BT, Deutsche Telekom, Telecom Italia, and Telefonica. This year, France Telecom will serve the role of Official Sponsor with executive vice president Jean-Philippe Vanot to reside as the overall conference chair.
As one of the world’s leading telecommunications operators, serving more than 147 million customers on five continents, France Telecom is a key leader in the broadband industry. Attendees will benefit immensely by examining the progress and service offered by France Telecom.
The focus of the event is on content development, technology and business sessions programming particularly highlighting Europe’s leadership in wireless technology and applications unique to the European market.
Enterprise end-users of broadband services, as well as ISPs and other resellers looking for access alternatives that will enable them to incorporate services such as VPNs, videoconferencing, streaming media, and storage-area networking into their operations, will learn about the current state of enabling technologies and solutions made available through service providers.
Companies planning to build their business on reliable, affordable broadband services will gain an accurate view at the World Forum regarding what to expect, when, and at what cost.
Complimenting the Broadband World Forum is the WiMAX Global ComForum, which will examine the latest developments in the area of fixed and mobile wireless services including WiMAX, WiBro, 3G+, UMTS, HSDPA and other key wireless broadband technologies. The emphasis will be on multimedia and video services for mobile broadband users, such as VoD, MMS, videotelephony, mobile gaming, and others.
In addition to Jean-Philippe Vanot, who will lead the Tuesday, 10 October Plenary Panel on “Future Broadband Challenges, Services and Applications: A Carriers’ Perspective”, other featured keynote speakers include the following:
•Alain Maloberti, Vice President, Network Architecture and Design, Orange
•Mike Quigley, President and Chief Operating Officer, and Member of the Executive Committee, Alcatel
•Roland Kittel, Member of the Board of Management, Chief Technology Officer, Deutsche Telekom AG
•Greg Douglass, Global Managing Partner, Convergence Global Solutions Group, Accenture
Rounding out the program is the technology exhibition. Free to attendees, the show floor opens on day two, 10 October and runs through the full program, closing on 12 October. Attendees will have no trouble filling their day walking the show floor as well as taking in some of the free programming at the event, which includes TecPreview sessions. TecPreviews provide key insight into the basics, trends, and developments of new technology areas while offering an in-depth look at some of the products available. After viewing the TecPreview presentation, attendees are invited to visit the presenting company on the exhibition floor for a hands-on product demonstration.
Broadband World Forum Europe, CNIT, La Defense, Paris, October 9-12 2006. Details: www.iec.org
VoIP/Skype - Facing up to the challenge
- 21 March 2006
Competition is growing fast in the net telephony space as VoIP giant Skype, as well as global brands such as Sony and Microsoft, bring free services to the mainstream public. And the overwhelming response among telecoms operators is to seek ways to protect their traditional revenue streams from this barrage of high volume, low value usage of their networks. John Aalbers looks at the market
Net telephony is one of the most significant disruptive technologies in modern telecoms history. It has evolved as a major threat to profitability for both mobile and fixed line operators. Behind the scare is the growing, global reach of Skype, the largest provider of VoIP services. The four-year-old company currently offers customers free computer-to-computer VoIP calls and low-cost connectivity between computer and landline or mobile phones. The business has attracted over 70 million registered users and a reported growth rate of 180,000 new customers per day – impressive figures for a company that is operating in a young, nascent market. As big players begin to enter the net telephony sector, Skype’s next step is to enter the mainstream telephone sector.
It is achieving this through strategic partnership agreements with some of the world's biggest conglomerates, such as Panasonic – which will work with the VOIP player to launch a cordless telephone. This handset will enable users to make Internet voice calls and traditional PSTN calls using the same phone.
Skype has also partnered with D-Link to produce a phone adapter, which allows users to make Internet calls using their existing handset.
Another strategic deal includes the recent agreement with Warner Music Group which grants Skype permission to market ring tones from artists such as Madonna and Green Day to Skype's registered users.
These new capabilities should help to boost the appeal of Skype's VoIP services to every day users – a welcome response for online auction house eBay, which paid more than £1 billion for the telephony company in September 2005. The purchase has bolstered Skype's public image as a mainstream player, and has rattled the nerves of the world's biggest telephone companies.
This is not surprising now that Skype has entered some of the biggest consumer based markets. Take, for example, the recent deal signed between Skype and America's electronics manufacturer and retail outlet Radio Shack. Under the terms of the agreement, over 3,000 Radio Shack stores across North America will offer the Skype Starter Kit, which includes the software that allows subscribers to use Skype's free computer-to-computer telephone service, a headset and 30 minutes of Skype premium service, with which a user can call a landline or mobile phone. Before the deal was signed, customers had to go online to access the software to make free calls. Eliminating this process makes the net telephony process even easier for mainstream customers.
Skype is not the only net telephony player threatening the revenue streams of telephone companies. Global giant Sony recently launched a free web-based phone service designed to link users via their computer video cameras. Microsoft also revealed plans earlier this year to offer Internet-to-telephone calling.
This is a big worry. Basic local calls still account for at least 40 per cent of revenues for most telecom operators. Free net telephony is eating away at this figure – and forcing the biggest names in the business to come up with strategies to protect their hard earned profits.
This is not just a problem for fixed line operators. With the global introduction of 3G and WiFi networks and the associated increase in usable bandwidth, applications previously only effective over a broadband connection become a viable proposition for the mobile user. This is particular true for peer-to-peer (P2P) applications such as Skype and BitTorrent.
The popularity of P2P applications on broadband networks has risen dramatically in recent years largely off the back of music downloads and more recently VoIP. As more mobile versions of these applications become available we are starting to see an increasing take-up of these services by mobile users.
Operators have been struggling for some time with the negative impact of high peer-to-peer traffic usage for applications such as BitTorrent, Kazaa etc. on their networks. The two biggest negatives for the operator were the degradation of the overall customer experience as the network congested and increased costs associated with increased bandwidth and network transit fees. With P2P VoIP however, a third and more harmful impact is added – the cannibalisation of traditional voice revenues.
Scale of the problem
The first problem is that the vast majority of operators have little idea of the scale of the problem they are facing. All that the operator can see is the increasingly rapid decline in traditional voice revenues, but has scant visibility of the profile of the P2P VoIP traffic that is taking its place. There is little understanding of how much P2P VoIP traffic is occurring on their network and, even worse, no understanding of which subscribers are using it.
The nature of most P2P VoIP traffic is such that it is difficult, if not impossible, to accurately identify with the traditional tools that an operator has at his disposal. Traditional methods involved categorising network traffic based on the port number for incoming P2P traffic. This no longer works because most P2P applications have evolved to use random port numbers and other techniques of deceiving traditional methods of detection. A more sophisticated approach is required that makes use of deep packet inspection technology, capable of looking right inside the packets at the layer 7 application data. This is the only foolproof mechanism for accurately cataloguing the type of traffic and who is doing it. At VoluBill, we have provided operators with a service that, based on a week of data collected and analysed with our monitoring solution, clearly shows operators for the first time the extent of the VoIP challenge. The reaction is often one of significant surprise.
Once an operator starts to get a handle on the scale of the problem, the next question is typically “What are my options for dealing with it?”
In the race to protect their significant network investments and the revenues they generate from Net Telephony services, operators have numerous options to consider. The most appropriate option will depend on many factors including the competitive landscape, regulatory framework in their geography, and their disposition on churn management.
Traffic ban
Outright blocking of P2P VoIP traffic is clearly an option. There are many operators today that ban this traffic through restrictions in the customer contract. The problem is that they do not have a means of enforcing this policy on the actual network. As noted earlier, most operators do not have the tools to identify the type of traffic on their networks to the required level of granularity in order to enforce a blocking policy. Deep packet inspection solutions that are able to actively interact with the network and enforce a blocking policy are the solution here.
What this means in the case of a mobile user is that on a specific network they cannot use a net telephony service to make a voice call and are forced to use the operator's traditional voice service. They are only able to use the services provided directly by the network provider they are currently using or from agreed partners.
An outright blocking strategy may not be the right approach for all operators. There is a significant risk of upsetting one's customer base and further compounding the churn problem.
A second approach that is becoming more and more widely accepted is to identify and tag the P2P VoIP packet so that it can be routed to a lower cost portion of the network. In this way the P2P traffic gets a network path commensurate with the revenue value to the operator. In other words the low value traffic is “de-prioritised” leaving premium bandwidth for higher value services. Once again, deep packet inspection capabilities with the ability to actively interact with the network and tag packets is the answer. As the solution needs to look inside all packets, it must ensure that minimal latency overheads are introduced so as not to negatively impact the experience of the customer base. Whilst this was an issue four or five years ago, today's probe technology has evolved to provide supreme performance levels that make latency virtually negligible.
Reverse is also an option
The reverse of “de-prioritisation” is also an option. From a marketing perspective, the type of network traffic analysis described above can also be used by operators to identify the P2P VoIP traffic and more importantly, who it belongs to. This creates opportunities for a marketing campaign to offer high VoIP users a “premium prioritisation” of their VoIP traffic at an increased rate.
By producing accurate metrics that reveal the actual threat of different services, telecoms providers can come up with better commercial models for their own product offerings.
Telecoms players are constantly faced with new competition, but the key to staying ahead is having the right network applications to cope with a changing market. If free net telephony service is the key to future growth, then operators have to develop the essential commercial models to support this demand. Flexible, monitoring, charging and control solutions offer companies the control they need to manoeuvre in this risky market space. Whether it's blocking calls or making money from premium services, the right “on the wire” solution can offer the flexibility to ensure that future revenue streams are not only protected but enhanced. •
John Aalbers is CEO of VoluBill, and can be contacted via tel: +44 7730312032; e-mail:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Unified collaborative communications - Eyes on the prize
- 21 March 2006
Remote working has always lacked one important component to make it really workable: the ability to ‘see’ colleagues over the network. Now all that is changing, says Tony Heyworth
This week seems particularly bad. Congestion on the roads. Trains cancelled. Flights missed. The result? Customers compromised. Suppliers ignored. Partners unseen (business as well as domestic). Productivity down, lost time up, deadlines missed. Frustration is at an all time high. That is, for all those who had no choice and who got caught up in these issues.
The commuting challenge is not just isolated to one city, region, country or continent. A quick poll of my team suggests that the Thames Valley in the UK is no worse than the suburbs of Paris, the outskirts of Munich, or the business centres of Milan and Madrid. Congestion has got worse, travel times have shot up and there's no respite in sight.
So it's not surprising that stress levels are creeping up and the question of work/life balance is yet again in the news.
So do employees have a choice? For many of us (white collar workers) to be productive, we need access to a PC that's connected to the network and, importantly, access to the company e-mail, file server and applications. With high-speed broadband access, all of this can be provided from any location. Everyone has access to a telephone, whether a landline or mobile, and many organisations have already implemented VoIP or are happy for employees to use free Internet calling applications, such as Skype.
So one could argue that there's really no excuse for companies not to enable a virtual working environment that fosters collaboration, and where a good proportion of the workforce is mobile and flexible about where they work. Internet access, a VPN connection and call charge reimbursement is a cost-effective way of enabling people to work from home so that they can avoid the congestion hold ups, reap significant productivity improvements and minimise overheads of office space through remote working. The cost benefit equation is clear. Ten percent of an individual's time saved over a couple of days a week will more than cover the costs of implementation.
According to the UK's Office of National Statistics (ONS), home working is on the rise in the UK with 2.5 million or eight per cent of the country's workers defined as teleworkers – people who work primarily from home and use a computer and telephone, though it's still largely for the self-employed. While these statistics don't include occasional teleworkers – who have office locations away from home – what is holding organisations back from adopting this approach more widely?
From a technical point of view, security has been a major concern – but firewalls and VPN's have addressed that. Unified communication solutions have broken down barriers between people using different modes of communication, different media, and different devices.
Unified Communications solutions, by giving employees access to all voice, e-mail, and fax messages from the phone or the PC over IP and combining unified messaging with personal productivity tools, have gone some way to making the home office just like the work office.
However, until recently, these unified communications solutions lacked two key ingredients: the ability to 'see' individual colleagues; and the ability to collaborate and conference with groups of people over video as well as audio. There's now a new breed of real time collaboration solutions emerging, from companies like Microsoft, Avaya, Alcatel, Cisco, Lucent, Nortel and others that bring to unified messaging applications a new set of capabilities: Instant Messaging, Presence, IP Telephony, Video, Voice and Web Conferencing. Each of these companies has identified the importance of adding group collaboration and video conferencing to their solutions and all are working with Polycom to deliver this capability.
Visual real time collaboration
It's essential when people work remotely that they feel and remain part of a team. Humans are social animals and working remotely can make employees and employers alike feel isolated. Video communications can play an essential part in bringing remote workers and dispersed teams together, allowing managers – through instant visual contact – to trust employees working away from the office and employees to meet colleagues face-to-face every day.
Just as local communities have become fragmented, so have workforces, with more work being done by dispersed project teams over distance. A recent Harvard Business Review survey of best practices among teams highlighted that:
• less than four per cent reported ever meeting with all their fellow team members face-to-face
• almost two thirds of the teams included people from at least three time zones
• slightly more than three quarters had members from more than one country.
Growing businesses need better group collaboration tools to help them integrate and manage teams remotely. For example, Alcatel and Polycom have combined their knowledge to provide an integrated solution of voice, data and image communications. The standard tools of the two manufacturers – Alcatel's OmniTouch range (unified communications solutions – My Phone, My Messaging, My Assistant and My Teamwork), OmniPCX (IP PBX), IP Touch (terminals open to all applications), and Polycom's solutions (MGC, V500, VSX, PVX ranges) – unify telephone and video conferencing at the same workstation.
All the services previously associated with the telephone (hold, presentation of caller's number, etc.) are now available for conference calls. Using Alcatel's IPTouch telephone, one press of a button will activate Polycom's PVX video conferencing software solution, which transforms a voice conversation or conference into a video conference using video on PCs and/or conference room based video systems. Working on the same principle, using My Teamwork the user adds voice and/or video to his discussions via the My Teamwork instant messaging service.
Managing in a virtual environment
These types of unified collaboration tools support employees who are mobile and work remotely. They assist managers who are challenged with building and managing remote teams. As a leader they need to establish relationships, clarify and identify individual roles and responsibilities, and set and communicate the team's purpose, objectives and external relationships. There's a high dependence on the leader for guidance and direction. Video communications bridge the gap that distance puts in the way of fast team formation and allows the manager to meet all team members at the very start of the process.
Decisions don't come easily in remote groups. Regular team meetings are critical so that the team members can get to really know each other and the manager gets to know the different team players. Video can help bridge the gap between different cultures and personalities by bringing body language into the conversation. Seeing remote team members helps build trust – in a way e-mail and the phone just can't.
Any team needs to be focused on its goals and avoid becoming distracted by relationships and emotional issues. More interactive team collaboration – assisted by regular face-to-face video meetings – allows compromises to be reached between remote team members enabling smooth progress to be made.
High performance teams share best practice, work towards a common goal, and have a high degree of interaction where colleagues ask each other for help. If team members are separated by just 1 or 100 or 1000's of miles, these objectives become more arduous to achieve. Using the right technology can help.
Microsoft and Polycom, have added real-time presence and availability to the conferencing environment. Integrating Microsoft Office Communicator and Microsoft LCS (Live Communication Server) with Polycom's ReadiSeries On Demand Conferencing platform, means that when you need to ask others a question or meet with colleagues, you can see immediately whether they're available and on-line. And, with just a few mouse clicks, you can be chatting, talking on the phone, or meeting face to face via video conferencing with multiple people on a collaborative call.
This solution means teams can have short and spontaneous discussions. Getting two or three team members together for a 10-minute brainstorm, right now, despite the fact they are spread all across Europe, is a few mouse clicks away. The real-time nature of the application means managers can resolve those issues that get in the way of good performance, face-to-face, today. No need to wait until the next time you physically meet. Video enables decisions to be made in half the time, as it provides the ability to better 'read' the situation faster and more successfully.
These solutions enable a new paradigm – the virtual business with remote and flexible workers. Integrate unified messaging with IM, Presence, IP Telephony Audio, Video, Web and Data collaboration and all distance, time, and media barriers disappear. Conferencing and collaboration solutions on their own are individual productivity applications; IM & IP Telephony allow these tools to be tied together as one integrated communications medium. Alone, the applications offer marginal productivity benefits. Brought together as integrated communications, they can change how business gets done. Experience it for yourself and you'll wonder why you still travel to work. •
Tony Heyworth is Director of Marketing EMEA, Polycom, and can be contacted via tel: 00 800 00 33 44 55 www.polycom.com
Training the reseller - New tricks?
- 21 March 2006
VoIP is driving change through the telecoms industry whether it is ready or not, and in order to avoid getting crushed in the stampede, resellers will have to adapt. For operator whose only contact with the end users is via channel partners, it is vital to ensure that those partners are supported through the transition, and that they are fully equipped with the knowledge and material they need to be able to sell on the new IP services. Richard Bligh, explains why it is important for channel partners to understand these new products and how carriers can help to ease the process
Earlier this year Niklas Zennstrom, founder and chief executive of Skype, stated: “Companies like BT won’t make any money from voice calls in the future. They can’t do anything about that”.
Well, he was half right. Whether you are BT, an alternative network provider, or a voice reseller, it won't be long before there is no profit left in purely selling voice minutes. But we, as an industry, can do something about it.
We can be proactive and change with the market. By finding new ways to package voice to provide value added services, we can give the end-users exactly what they want, whether they are a multinational multimillion pound business wanting free calls between sites, a family wanting to control the costs of teenage children's social organisation, or an SME wanting to divert calls when staff are out of the office.
The difficulty is that the terms “VoIP” and “IP Telephony” have been around for such a long time now, that the end-users have either lost interest or become wary of the new technology, which has promised so much but largely failed to deliver. Those that are interested in VoIP have, on the whole, bought into the idea of low cost or free voice calls. So, how can channel partners convince the end-users that it is worth investing in packaged services and that those services can add value to their work and leisure activities?
In order for any new service to be a success, whether it is IP Telephony or traditional PBX voice services, the fundamental rule applies - the people who are selling it need to know what it is, who it is for and why the end-user should invest. Training for new products and services should be designed to help channel partners overcome as many obstacles as possible, and there are different tiers of training that can be used, depending on the level of understanding and needs of the reseller.
The first and most basic level, which should be available to every channel partner, is the provision of comprehensive documentation of each service, with clear, simple descriptions of the features and benefits. This material should be aimed at both the reseller and the end-user. The material should not go into detail about how the service works - most end-users won't be interested, as long as they know they will receive a high quality, reliable service which meets their specific needs. In order to make this process as painless as possible, Gamma, for instance, has developed unbadged documentation to accompany all of its services, allowing the reseller to simply add its branding and pass on straight to the end-user.
As with any industry, when it comes to training there is no 'one size fits all' model, and sometimes bespoke training will be required. This might include some webinar sessions to explore in more detail how the service works, because there will always be some users who want to understand how new technology works and what makes it different from their previous service.
Carriers should also allow channel partners to have hands-on experience of the service for a period before they start to sell. This will give them first hand knowledge of what the service is capable of and what the benefits are, making sales pitches more authoritative and ensuring the reseller know which service will meet the end-users' needs most effectively.
It may also be necessary to offer face-to-face consultancy with channel partners. This is especially true when the service and product being sold have taken on a whole new form – such as IP Telephony. Through consultation, the carrier can help channel partners to deal with the difficult question of how to get end-users to buy into a package, rather than just signing up for free calls. Open discussion will help to identify the best way to position a new service, and determine which of the channel partner's target audiences it is best suited to.
Beyond training and consultation, there are a number of other ways the carriers can help channel partners, because new services don't just need to be sold, they also need to be provisioned and supported by a back office solution. One of the biggest ways carriers can make life easier for the resellers is to keep the billing and CDR formatting as simple as possible. Gamma has a single back office solution to manage all services, and will be keeping the same basic system with the introduction of our IP Telephony services. That way our channel partners will not have to learn how to implement a new system for billing every time they take on a new service.
Finally, we must not forget that once the channel partners have been through consultation and understood the new IP services, they still need to convince the end-user! The best way to do this is to provide clear, honest advice and guidance as to what IP Telephony is and how it will be different from the traditional service, and what benefits the end user will see. We have developed a Guide to IP Telephony, specifically for our channel partners to pass on to the end-user in order to address this issue.
There is no doubt that this will be a challenging time for resellers; the market is set for the biggest shake up in its history. That doesn't mean that there is nothing we can do to help our channel partners, it just means that as old dogs, we have to show that we can still learn a few new tricks. •
Richard Bligh is Marketing Director, Gamma and can be contacted via tel: 0870 224 1200
TMW preview - High-flying lean machine
- 21 March 2006
It’s not by accident that one of the keynote speakers at this year’s TeleManagement World is Stelios, founder of ‘lean’ airline, easyJet, a company which has flourished by giving customers exactly what they want. Keith Willetts explains
Like so many industries before it, the telecom sector has reached a crossroads where operators have to seriously rethink their business models if they are to remain relevant and competitive.
Not only are the established operators feeling the heat of customers deserting to competitors, the underlying profitability of their core lines of business is rapidly declining as prices tumble in a 'Moore's Law'- like progression.
So it's not surprising that the overarching theme of TeleManagement World Nice 2006 is about how operators can change their business model to meet the needs of the 21st century telecom market. We think “Managing Profitability in Today's Telecom Market: Customers, Convergence and Competition” nicely sums up the challenges that operators around the world are experiencing. The TeleManagement Forum is the industry's global trade association for the business of management of communications services and networks and as such, is a key thought leader in helping the telecom industry take a close look at its processes and start looking for ways to transform itself.
Operators face a critical crossroads
I like to use the example of the three-legged stool to illustrate how operators need to move. Operators need to improve their overall customer experience in order to drive up customer loyalty and thus help keep the customers they already have. But at the same time, they need to get much faster and smarter at developing new sources of revenue while simultaneously making dramatic reductions in operating cost. That formula is hard to do in organisations as rigid and inflexible as many operators, some of who have been in business for many decades.
But just like a stool that falls over if one leg is shorter than the other, it's these three key issues that need to be grappled with if profitability is going to grow.
It's something that other industries like manufacturing, retailing and financial services have already tackled. Companies like easyJet, Dell or Wal-Mart have successfully drawn ideas from Toyota's lean manufacturing model and made them work in diverse industries. They took the notion that you had to pay more for better quality and turned it on its head. What Toyota showed, and what other firms outside of manufacturing have picked up on, is the concept of giving customers more and more for less and less. If you look at Dell or Apple, every year they give you faster processors and more memory, at lower prices but still with great quality. And as Toyota shows, it can also be immensely profitable.
The telecom industry is absolutely going in this direction – people want more bandwidth, more service features and better customer service but they want to pay the same or less. Few operators today have really internalised the more and more for less and less approach. Externally they may have transformed their image, but their business processes are distinctly 20th century. But some CEOs are starting to get it and espouse the value in shifting the business model, but it's a huge challenge to make that work in companies where their corporate DNA isn't structured that way. They know how to reduce costs through downsizing, but that often reduces the quality of customer care and slows new service introductions – giving the customer less for less rather than more for less.
That's the main reason one of our keynote speakers at this year's event is Stelios, Chairman of easyGroup, who revolutionised the European airline industry by pioneering the lean airline model in Europe through easyJet. Lean doesn't mean just low cost – easyJet's fleet is one of the most modern in the world and offers an extensive service. Since founding easyJet, Stelios's easyGroup has gone on to take that same “lean” operations model and branch out into everything from credit cards and financial services to car rentals and a cruise line and pay-as-you-go mobile service. The company does this by giving customers exactly what they want and cutting out extraneous costs from the overhead of each business.
Lean operators: flexible and agile
Getting back to telecoms, the operators that will be around in five or ten years will be the ones that run on this agile lean model. Getting there will require significant changes to the structure of operators, particularly in their business processes and systems. Like manufacturing, it means a high level of process automation. This means don't use people for tasks unless you absolutely have to, go through your business process with a fine-tooth comb and iron out any hot spots of inefficiencies and high cost. This includes creating a highly integrated, highly efficient infrastructure that reduces cost and makes things work faster.
We are finally starting to see operators make significant investment in programmes to get to this point. BT's 21st Century programme is based on a $20 billion investment by the carrier to completely overhaul and transform its network for IP and converged services. But it's not a brand new network that transforms BT's ability to compete, it will be the collapsing of many duplicated lines of business, each with their own network, processes systems, customer care etc., into one unified approach that will deliver the results. AT&T's “Concept of One” approach is also following the consolidation approach, retiring systems at the rate of one per week. Other carriers such as Telstra and Vodafone have also announced major investment programmes with the specific intent to drive up business agility, quality and innovation while driving down operating costs.
So, while capital investment by operators is beginning to flow again, they have a massive undertaking in front of them. They have to seriously deal with the convergence issue, where a variety of services are hosted on a single network, and instead of 30 to 40 stacks of systems you have one generic one. This is straight out of the book of being a lean operator: Get highly consolidated and efficient in your production.
A related theme involves enabling a just-in-time approach to offering services. Instead of spending a lot of money on building out an extensive network and hoping customers will come and money will roll in, you hook up customers as they order. When you have this type of model, you can afford to take risks and try out new services without betting the company on it. The crossover between these approaches has been very recent. Instead of spending billions in speculative investment in fibre to the home, operators are proving demand first by just-in-time DSL based services. Instead of rushing into 3G build-outs, many are proving the market in a 2.5G environment first.
Any industry needs to be profitable to survive. The new trick here is changing your business model to be continuously profitable in markets where prices generally decline year-on-year. For telecom, this isn't a temporary phenomenon; prices are going to continue to decline just like they have for most high tech products and services.
When you view your business from a just-in-time perspective, the rate of innovation increases because you no longer have to worry about the high costs of building new services. But to do that, we in the telecom industry have to adopt the themes that manufacturing pioneered, and that retail and finance have taken up. Telecom is just the latest industry to take up these ideas and apply them to their business processes.
By thinking outside the box, operators can accomplish their goals of giving customers what they want as well as reaching profitability. That's why the topic of this year's TeleManagement World Nice is the total transformation of the traditional telecommunications business and operations model. We will be looking at how to create a management roadmap for success, the leadership steps executives must take and some of the breakthrough steps organisations must adopt to become lean, innovative and excel. •
Keith Willetts is Chairman, TeleManagement Forum, and can be contacted via e-mail:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
www.tmforum.org
Listings
- 21 March 2006
European Communications recommends the shows that count in the period from March to June 2006
Data Centres Europe 2006 London 21-23 March 2006 www.datacentres.com
21st Century Communications
World Forum 2006 London 27-30 Mar 2006 www.iec.org
Telecoms Fraud London 27-30 Mar 2006 www.iir-events.com
ISP Forum London 27-30 Mar 2006 www.iir-events.com
WiMAX 2006 Lisbon 29-30 March 2006 www.vibevents.com
Developing HSDPA and HSUPA London 29-30 Mar 2006 www.vibevents.com
TelecomsWorld Scandinavia Stockholm 29-30 Mar 2006 www.terrapinn.com
Integrated Service Provisioning Madrid 3-6 April 2006 www.iir-events.com
CEE Mobile Content and Service
Forum Prague 3-5 Apr 2006 www.marcusevans.com
Mobile Content Amsterdam 5 April 2006 www.jacobfleming.com
CTIA Wireless 2006 Las Vegas 5-7 Apr 2006 www.ctiawireless.com
TriplePlay IPTV Forum Stockholm 24-26 Apr 2006 www.marcusevans.com
Maximising ARPU for Mobile
Operators Amsterdam 24-27 April 2006 www.iir-events.com
MVNO Strategies & Markets London 25-26 April 2006 www.informatm.com
Mobile Billing Congress Barcelona 25-27 April 2006 www.informatm.com
IMS World Forum Barcelona 25-27 April 2006 www.informatm.com
TotalTelecom World
Telecommunications Congress Geneva 25-27 Apr 2006 www.terrapinn.com
Infosecurity Europe London 25-27 April 2006 www.infosec.co.uk
Telecoms Internal Audit and
Risk Management Lisbon 25-28 April 2006 www.iir-events.com
Mergers & Acquisitions in the
Communications Industry Prague 3-4 May 2006 www.jacobfleming.com
Billing & OSS World Miami 3-5 May 2006 www.telestrategies.com
Wireless Enterprise Summit Fort Worth 8-10 May 2006 www.marcusevans.com
Transport Networks for Mobile
Operators Berlin 8-11 May 2006 www.iir-events.com
VoIP World Africa 2006 Johannesberg 8-11 May 2006 www.terrapinn.com
SVIAZ/Expo Comm Moscow Moscow 10-13 May 2006 www.expocomm.com
VON Europe Stockholm 15-18 May 2006 www.pulver.com
TeleManagement World Nice 15-18 May 2006 www.tmforum.org
Broadband Access Strategies Lisbon 15-18 May 2006 www.iir-events.com
Mobile Location Services 2006 Amsterdam 17-18 May 2006 www.informatm.com
WiMax World Europe Vienna 22-24 May 2006 www.wimaxworldeurope.com
Evolving Service Delivery Platforms Munich 22-25 May 2006 www.iir-events.com
Revenue Assurance & Cost
Management London 23-24 May 2006 www.vibevents.com
Global Messaging Congress 2006 London 24-25 May 2006 www.informatm.com
KITEL 2006 Almaty 30 May-2 June www.ite-exhibitions.com
Globalcomm 2006 Chicago 4-8 June 2006 www.globalcomm2006.com
Billing & Information Management
Systems 2006 London 5-9 June 2006 www.iir-events.com
VoIP Africa Cape Town 5-9 June 2006 www.iir-events.com
GSM-3G Russia Moscow 6-7 June 2006 www.gsmconferences.com
Future TV Show 2006 Copenhagen 19-20 June 2006 www.futuretvshow.com
Event preview - Russia's Telecoms/IT market exceeds the $20 billion mark
- 21 March 2006
The Russian telecommunications industry is reaping the benefits of a successful restructuring effort within the sector, the recent passage of new telecommunications laws, and rapidly increasing capitalisation of traditional fixed line regional carriers.
The development of mobile communications, new generation services and IP telephony have also been among the most successful in terms of annual growth. At the same time, an expanding consumer income base, political and economic stability, as well as growing foreign investment have all contributed to the increased growth of telecommunications and Internet services in Russia.
Russia currently spends more than $2.5 billion annually on telecommunications equipment, and continues to import foreign-made products, which account for some 60 per cent of the equipment market.
Sviaz/eExpo Comm Moscow covers telecommunications, IT, wireless, broadband and Internet technology. A major exhibition held alongside a conference, it is the largest event for the telecommunication and IT sector in Russia.
The first version of the event was held in 1975 on the initiative of the Ministry of Telecommunications Industry of the USSR. But in 1995, Expocentr, the holder of the event “Sviaz” since 1975, and E.J. Krause & Associates, Inc., the holder of “ExpoComm”, an event which has been held annually in Moscow since 1991, combined their effort and integrated one exhibition. Henceforth, “Sviaz/Expo Comm” has become the new title of the joint international event.
Approximately 850 exhibitors are expected to show their latest products and services in Sviaz’s next show. As has now become the tradition, the leading Russian providers such as MTS, MGTS, Comstar, Sky Link, Central Telegraph and Transtelecom will be represented, as well as many international companies including Samsung, Panasonic, Siemens, LG, Iskrateling, ZTE, Pantech, Huawei, Sony Ericsson, ECI, General Datacom, RME, Nortel, Marconi, Intel, RAD Data and Comverse are regularly onsite.
The extensive mix of the international participation is visible when looking at the country pavilions. Hannover Messe International and Bitkom, for example, are organising the German pavilion with 19 exhibitors, endorsed by the Bundeswirtschaftsministerium (Federal Ministry of Economics). Also, the Department of Commerce (DOC) USA has certified Sviaz for American companies. Canada, France, Finland, Spain, China, Korea, Taiwan will also have country pavilions and, for the first time, the Italian Institute for Foreign Trade will be represented at the exhibition as well. All these pavilions will be supported by their respective governments.
More than 70,000 trade visitors from Russia and the GIS are also expected.
VON Russia
It’s no wonder that Russia is recognised as Europe’s largest market, considering that there are more than 50 providers, including Voice over IP, in the telecom sector. Whether it’s the services that are being sold to consumers directly over their Internet lines, or hosted services being bundled into the enterprise’s access – the growth of VoIP in Russia is exploding. Both Russian corporations and foreign investors are aggressively lining up to serve the marketplace.
So, EJK, together with Pulvermedia decided to bring VON – the VoIP communications event – to Sviaz/Expo Comm Moscow 2006. VON Russia enables the virtual network of contacts to become a meeting of substance between people looking to present, partner, and produce winning strategies for servicing the VoIP market. n
SVIAZ/EXPO COMM MOSCOW 2006
May 10-13, 2006
Krasnaya Presnya Fairgrounds
Moscow, Russia
Details: http://www.expocomm.com
VON Russia
Details: www.ejkgermany.de
Service quality assurance - Meeting demands head-on
- 21 March 2006
Many service providers are now starting to think innovatively about how to meet the requirements of users from businesses of all types, large and small, says Kieran Moynahan. And high on the list of demands is service quality...
Irrespective of whether it’s fixed or mobile services, business customers have often had to take second place to the consumer market when it came to getting specially targeted offerings from their communications service providers. Sure, the larger national and international companies usually enjoyed dedicated account and support staff and specialist services like Virtual Private Networks, but the experience of many small to medium sized business users has usually been limited to standard service packages.
On the fixed side, incumbent operators were often forced by regulatory conditions to limit the service options of their business customers for fear that their already tight profits would be eroded still further. When services were specifically bundled together to target the SME space, the market's general lack of exposure about the benefits of advanced communications limited real innovation. Instead, many service providers were forced to apply the usual 'one size fits all' marketing model of traditional telecommunications to what in reality was a very diverse sector.
Historically, similar issues applied to the mobile sector but, here, were accentuated by the intense focus of mobile operators on the consumer market, with a particularly emphasis on the teenage and early adopter segment. Business users may account for around one third of the total income of European service providers, but sadly they haven't been seen as 'sexy' or as challenging as the much more content laden, 'creative' end of the consumer market. To compound this, purchasing decisions on mobile communications within smaller companies were often seen as the responsibility of the generic office manager and the sell was on simple cost and coverage issues, rather than the more strategic commercial benefits that a well-structured portfolio of mobile services could provide.
Businesses sell quality
Fortunately these perceptions are changing, with many service providers in both spaces now starting to think innovatively about how to meet the real demands of users from businesses of all types, large and small. In turn, as they evaluate these needs, they're picking up on one prime concern of any business customer – service quality, in its widest possible sense.
The rewards are certainly there for the picking. Enterprise customers usually deliver far higher ARPU returns and, once established, are far more unlikely to churn in search of the lowest possible tariff, like many consumer customers. They also hold the promise of acting as drivers for further service sales to staff and employees, particularly given the trend towards teleworking and of providing mobile phones, partitioned between private and business usage through different billing and account processes.
The expansion of broadband services across Europe can only help increase the attractiveness – and potential returns – of the enterprise market. With the infrastructure needed to deliver seamless voice and data communications across cellular, wireless LAN and fixed DSL links now falling into place, converged fixed-mobile service strategies are the obvious next step for ambitious service providers to take. Joined-up thinking is finally coming, in particular to the mobile space, with business applications e.g. from simple e-mail up to ERP systems and converged voicemail now being capable of being accessed reliably and securely from mobile handsets and laptops.
Indeed, discussion has already started in the industry about enterprise services being the natural next step for Mobile Virtual Network Operators (MVNOs) to target, bundling fixed and mobile connectivity together with application and content resources and aiming these at specific vertical markets like distribution, travel and the like.
So – a broad, sunlit upland of limitless opportunity for service providers of all types – or are there still problems lurking in the wings?
The truth is that while the rewards of serving business users may be greater, so too are the risks – hence a need for an equal – or even greater – focus on delivering service quality to customers compared with that in the consumer space. Sales and marketing presentations may speak of 'mission critical' applications, but the sharp truth is that for the SME customer the reality is more like 'mortgage critical'. When a SME's own customer relationships are impacted by poor communications, their financial and reputational hit becomes truly personal and they are highly unlikely to stay with a service provider who exposes them to that level of damage.
As a result, the temptation to leap into a programme of service and business development expansion, aimed at generating more business from the enterprise customer, must be tempered with the appreciation that the quality concerns of a potentially hyper-critical audience must be met effectively. That in turn requires a re-examination of the tools, processes and systems that will be used to ensure that services are delivered to customers - across increasingly diverse communications paths – at levels of quality, availability and reliability appropriate to the service levels agreements in pace or the tariffs on offer.
This is where the problems can start to arise...
Developing an holistic approach
Traditional approaches to service quality management were based around mainly passive and almost totally network-centric concepts. Basic sets of data on network and service performance would be gathered from probes in the infrastructure and supporting systems, and then analysed by skilled engineering and operations staff – when time and budgets permitted – to spot anomalies or problematic conditions. All too often, these staff only became aware of significant problems when trouble tickets started pouring out of the call centre as agents tried to mollify frustrated customers. By then, however, the damage to a service provider's brand image is already done.
Alternatively, services would be created, marketed and launched to the world, with up-front significant investments in development and advertising, only for the network itself to fail to perform to expectations when suddenly put under the increased demand of a new service or application. Once again, reputation is impacted and customers are put off experimenting with new services in the future.
Both these issues also highlight one of the central problems with historic service assurance or performance management strategies – information important to the well-being of the company as a commercial whole often remained trapped in departmental or technology silos. It was far often simpler to shift blame, rather than collectively problem-solve across different boundaries and share insights, irrespective of whether the input came from billing, financial planning, business development, engineering, operations or CRM.
While the industry is now well advanced in addressing these issues, first by accepting that these problems exist and then by developing suitable tools and systems to address them, the next generation network environment - especially in its business services incarnation – is set to increase the pressure by a few notches further.
Delivering quality
It's rare for a customer's perceptions of service quality to be based on just one or two simple binary opposites – such as the phone works or it doesn't. Instead, our 'gut' feelings of quality are actually based on numerous small, incremental and largely unconscious perceptions, which, in traditional telecommunications could range from a grubby and bad tempered engineer turning up on the doorstep to a minor, but recurring fault on a handset. In this rapidly receding world of fairly simple, basic voice and data connectivity services, there were only a limited number of things that could go wrong...and the future's looking far different...
Consider a typical scenario where a triple or quad-play operator starts to target the SME market. In their fixed line infrastructure, they have their DSL network to support – one which, in many cases, will be coexisting with infrastructure from other service providers, such as an incumbent. They may also be using DSL connections as backhaul out to WiFi hotspots, or have peering arrangements with other hotspot owners to provide nomadic wireless access to their business customers.
In the cellular space, they may have their own radio infrastructure to support or, alternatively, may have partnered with an existing cellular operator to buy capacity and act as an MVNO. Additionally, it is also likely that they have their own range of handsets and mobile devices, each of which adds yet another variable to the consistency element of overall service quality.
Finally, they're also going to have to deal with far more complexity in the back office areas of BSS and OSS, especially where content and applications may be being sourced from a third party, or links straight into the business customer's own IT systems are required. Underpinning all these applications is a continuing requirement for service assurance systems to work seamlessly across both IP and circuit-switched technologies, mirroring the interworking of the communications traffic itself. While any chain is only as strong as it's weakest link, history and experience shows us that it's usually easiest to blame the communications service provider.
In response, service providers need to be able to balance the operational benefits of having a common platform, gathering and integrating service data from many different sources, with the flexibility and cost-efficiency of a modular approach to provide support for specific services as and when required.
Such a platform must possess particular characteristics. It must be equipped with the appropriate network and system interfaces to cope with today's multi-vendor environment, have the ability to display job-function specific service quality information to appropriate management dashboards and systems, and be supported by a methodology powerful enough to help marketing, business development and engineering staff to model and define Key Performance Indicators (KPIs), Key Quality Indicators (KQIs) and commercial Service Level Agreements (SLAs).
Supporting this, the service provider also requires pre-packaged modules capable of supporting particular services in the shortest possible timeframes if time to market is to be minimised. Examples of these service and application specific packages should certainly include support for BlackBerry, i-mode, VoIP, and enterprise-grade GPRS, for a start.
If business customers are to truly benefit from all the new services and applications that are now coming on stream, they must be persuaded that their service providers have the tools and techniques in place to support them on their journeys towards greater competitiveness and efficiency. Without the correct emphasis on service quality assurance, then all the marketing and advertising in the world won't change a business customer's perception that is based on real experience. •
Kieran Moynihan is CTO of Vallent, and can be contacted via tel: +353 21 730 6000; e-mail:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it

