As IBC opens its doors at the RAI Centre in Amsterdam, from September 10th to 15th, it is becoming increasingly clear that everyone in the communications industry is going to have to collaborate to turn the idea of ‘content anytime, anywhere' into a reality

For anyone who has been in the communications industry at any time in the last 30 years, the word "convergence" will be familiar. With broadband availability moving towards universality and mobile networks increasingly being regarded as data highways not just for voice, there is finally a chance that this convergence will happen.

While there will be multiple applications running over this data bandwidth, it is clear that what will drive it will be media. Audiences love the concept of being able to see the content they want, when they want it, at the time they want it, where they want it, and on the device they want.

It is not just a consumer issue. At first digital signage was simply a poster on a plasma screen. Today it is seen as a highly targeted, highly productive means of reaching audiences over what is effectively a private interactive television network. Retailers love the idea of being able to talk to potential purchasers at the instant they are making a purchasing decision - put a recipe for a chicken casserole above the chicken display in the supermarket.
So it is that telcos, mobile network operators (MNOs) and ISPs are now very much in the media business. They have the carrier infrastructure, and they have to be sure they are getting their fair share of the revenues from what will be a booming business, particularly at a time when voice arpu is falling.

On the other hand, broadcasters and production companies have the content that will be the real driver for audiences. Clearly, everyone has to collaborate to make the content anywhere become a reality.

At a time when the landscape is moving fast, it is wise to invest in knowledge; to understand what the commercial challenges are as well as the technology issues, and to see where the established players need to collaborate and where they still compete.

IBC has been an established date in the broadcaster's diary for more than 40 years; over the last decade it has become vital for telcos, MNOs and the data industry too. It is the leading event for anyone involved in content creation, management and delivery, attracting visitors from more than 130 countries.

There are multiple levels to the event. First, it is an authoritative conference, bringing experts from around the world to debate the key issues of the day.

This year the IBC conference has been reorganised into three distinct streams: technology advances; content creation and innovation; and the business of broadcasting. Each contains a series of technical papers, commercial and operational debates and masterclasses from leading creative professionals.

Most important, each crosses the boundaries between traditional broadcasting and the new creation and distribution of media. The content creation and innovation strand, for example, includes a full day on IPTV and mobile media. In addition, to counteract the inevitable concern that conference debates are always led by senior executives who may not be perfectly in touch with the consumer, a session is given over to listening to a panel of students from Japan, Russia, UK and USA talking about how they consume media and their expectations for the media of the future.

Every minute of every day, some 13 hours of content is uploaded to YouTube. Is this just vanity publishing that no one watches, or is user-generated content the future for the media industry? The answer to that question has far-reaching implications for the business and technology plans of data network operators.

Alongside the formal conference there is another opportunity for debate and exploration. There is a series of business briefings: presentations by people who have been there and done it, and share their experiences (good and bad). There are also business briefings on mobile media, for IPTV and online video, and for digital signage.

These presentations are linked to specific zones within the exhibition, again dedicated to mobile, IPTV and digital signage. The zones are an initiative to attract innovators of emerging media into the IBC community. They give exhibitors, and particularly start-up businesses, a simple and low-cost route into the exhibition, and they present visitors with a rapid overview of the latest technology in a particular field without them having to walk all around the show floor.

The full exhibition is large and comprehensive, filling the exhibition space - 11 halls - in the Amsterdam RAI Centre with around 1000 exhibitors. The layout of the exhibition is designed to make it easy for the visitor to find the solutions they need. If you are looking for the latest in communications technologies - from compression and multiplexing to set-top boxes and home hubs - then all the key players are grouped together in one area.

Equally, if your business plan requires you to move into content production or channel management, then you will find what you need in other halls. One hall includes the IBC Production Village, which combines a huge camera demonstration area and hands-on experiences of the latest equipment with a number of active presentations, including the production base for IBC TV News - the event's own on-air and online programme.

Another free presentation strand, "What caught my eye", is helpful for newcomers to a subject, but is always popular with regular visitors too. Experienced practitioners tour the exhibition looking for the latest and best in their particular fields, and in a short and lively workshop talk about what is new and exciting. It also gives tips to the audience on where to find a given highlight and the right questions to ask of the vendors.

There is a third element to IBC alongside the conference and exhibition: a whole range of offerings that add value to your time spent at the event. The business briefings, which are free to all visitors, are a good example. Others range from training opportunities to the chance to network with your peers. And most evenings there are free screenings of some fine television productions and movies in the state-of-the-art digital cinema created by IBC.

The IBC conference runs from September 10 to 14 and the exhibition from September 11 to 15, at the RAI Centre in Amsterdam. Exhibition only registration is free and includes all the added value opportunities including the business briefings, screenings and networking. There are a range of conference packages available for IBC2009: more information - and online registration - can be found at www.ibc.org.

The assumption among consumers is that video will be an integral part of any communication in future: if they can shoot something on a mobile phone and upload it to YouTube, then they will expect to be able to see it on their televisions at home too.

If you have any interest in the technology to make this happen, or the business cases that will realise a fair return on this investment, then IBC is the place to join the debate.


Environmental issues are impacting product development across a range of telecoms  offerings says Alix Morley

Environmental concerns are quite clearly becoming increasingly widespread, both among consumers and across a considerable variety of industries.  Telecoms is no exception, determined to prove its high eco status through a range of product and applications developments.

Certainly, the trend is making itself felt throughout the cell phone industry with major producers competing to heighten their green credentials.  Sony Ericsson's GreenHeart range is testament to these concerns.  Both the C901 GreenHeart and the soon to be released Naite boosting the green image of the company.  Indeed, these phones will be sold in smaller packages, thus reducing waste, while Sony Ericsson also advertise the C901 as including "an in-phone manual replacing the standard paper version; while recycled plastics, an energy efficient display and waterborne paint mean that the overall CO2 emissions of the phone are decreased by 15%."  This is certainly in line with Sony Ericsson's stated aim to cut 20% of its carbon dioxide emissions by 2015.

In a recent interview with Reuters, Mats Pellback-Scharp, Head of Sustainability at Sony Ericsson, highlighted that the company is "not aiming at a niche segment.  We are taking this to mainstream and to a bigger audience. . . Naite is the lowest cost 3G phone in Sony Ericsson's portfolio and we expect it to be one of the biggest volume drivers in end-2009 to early 2010."

Sony Ericsson is certainly not alone in venturing into the eco-friendly marketplace.  Indeed, while Samsung Electronics and ZTE have recently developed a solar powered phone, Nokia's 3110 Evolve is also attempting to harness the eco concerns of the consumer with increased green credentials.  Nokia states that: "Innovative bio-materials have been used in creating this handset" while, "even the sales box is made from 60% recycled materials."   Indeed, the company has taken its eco thinking further to include what it terms ‘intelligent charging' - a device which saves energy by only using electricity while actually charging.

The notion of applying a green practices to the charging of phones is one which has recently been further developed.  With a believed 51,000 chargers remaining unused, leading manufactures throughout the EU reached a landmark agreement to produce a universal charger, financially benefiting the consumer, and potentially decreasing what is held to be thousands of tonnes of wastage each year, created by old chargers being thrown away when phones are replaced.

In marketing terms, the benefits of a good ‘eco image' are undeniable.  Indeed, ABI Research has suggested that up to half of the US market takes environmental factors into account when making a purchase.  It may, of course, be argued that such models as the Naite and C901 GreenHeart are merely tapping into an already growing phenomena, being produced just in time to catch the eco friendly wave.  Certainly it creates a positive brand image, which, in an age of increasing public concern over climate change and environmental policies, is likely to positively impact sales.

And while the establishment of green credentials may lead to increased sales profits, the implementation of environmental practices can also significantly reduce costs within the individual company.  A recent Ovum report highlighted that the research and establishment of such stratagems and policies may initially be costly, but the long term operation of eco-friendly practices - so the report suggests - is certainly beneficial. 

At the same time membership organisations such as ATIS, which create "solutions that support the rollout of new products and services into the information, entertainment and communications marketplace", have certainly seen the benefits of boosting green credentials.  Indeed, in their Green Mission Statement, the organisation asserts that "ATIS and its members are committed to providing global leadership for the development of environmentally sustainable solutions for the information, entertainment, and communications industry.  The development of these innovative end-to-end solutions will: promote energy efficiencies; reduce greenhouse gas emissions; promote ‘reduce, reuse, recycle'; promote eco-aware sustainability and support the potential for societal benefits."
The use of energy is at the heart of any eco discussion, while energy costs, of course, are also a significant part of a provider's operating expenses.  So - for example - Ericsson's recent announcement that its network IP edge and metro platforms deliver the industry lowest energy consumption based on new metrics that measure how efficiently they can provide subscriber services, such as residential triple-play, not only suggests economic solutions, but also ecological ones.

Ericsson stresses that because energy usage accounts for up to 50% of operating expenses, and energy costs continue to rise while the demand for bandwidth-intensive services increases day-by-day, service providers need greater insight into how specific platforms use energy.

Based on the functions performed by each platform, Ericsson's new metrics provide practical views into energy efficiency, mapping energy usage granularly by subscriber and circuit. The new metrics are the latest sustainability effort from Ericsson, which in 2008 committed to providing up to a 40 % reduction in carbon emissions per subscriber across its product portfolio within five years. In addition to the focus on the IP edge and metro Ethernet, Ericsson has reported significant reductions in energy usage for its WCDMA radio base stations (an 80% improvement in energy efficiency from 2001 to 2008), for its mobile softswitch solution (60% more efficiency per subscriber), and for site power management.
Climate change, it may be fairly confidently argued, is now inevitable, so companies, as much as private consumers, would do well to take measures to reduce their carbon footprint.  Indeed, Ovum claims that: "Estimates suggest that telcos can achieve a 1-2% reduction in global carbon emissions by implementing green initiatives within their operations.  However, the telecommunications industry is expected to enable other businesses to reduce emissions by up to five times this amount, highlighting that telecoms has a major role to play in enabling a green economy."  Certainly, it appears that this industry is in an ideal position not merely to jump on the bandwagon but to lead the way to an improved and green global economy.

Alix Morley is a freelance writer.

In the face of an economic downturn and cautious consumer spending, Peter Hauser  takes a look at the types of incentives that will guarantee mobile customers' loyalty

Despite well-publicised hopes to the contrary, the telecoms industry is not immune to the effects of the global economic downturn. Handset manufacturers expect unit sales to fall by at least ten per cent this year - fuelled by cautious consumer spending - while industry giants such as Vodafone and Nokia rang in the New Year by announcing redundancies. Some industry commentators argued that the mobile industry was essentially ‘recession proof', thanks in part to the fact that global mobile penetration is still rising fast. However, consumers in wealthier, saturated markets, are likely to re-evaluate their spending under the current economic circumstances. This year, we'll see people shopping around for cheaper deals and swapping out of contract. That is, of course, unless they're getting discernable value-add in return for their loyalty.

Customer churn is nothing new of course. Indeed, for as long as mobile operators have offered post paid contracts, they've been under constant pressure to retain customers, or reduce churn. And this knowledge, that building loyalty is one of the most critical challenges in the mobile telecoms service industry, will go some way to steer the industry through the challenges of operating in a recession.

We've seen lots of industry experts provide advice to operators who are working to increase customer loyalty. But the inevitable difficulty with any strategy to reduce churn is that it relies on anticipating consumer desires, whims and even fashions. No easy feat.

It is a widely held belief that mobile applications can help to increase customer loyalty or so called ‘stickiness'. Indeed, taking a recent high profile example, for all the work Apple has done to make the iPhone a success over the past year, many say that its future lies in the hands of application developers. Over the past 12 months, we've seen speedy growth in iPhone applications, which have turned the handsets into the most sought after devices, not just in mobile technology - but in personal computing too. The rest of the industry appears to have woken up to this challenge; and virtually every other major handset vendor company is setting up their own application store.

But choosing to deploy or develop an application also relies on anticipating customer behaviour and desire. Operators want to find the ‘next big thing', but don't want to be the victim of a fleeting fad. Indeed, the industry has concluded that there is no one killer application for mobiles - so how do operators attract and, more importantly, retain their subscribers?

We believe that the key to success is simplicity. Operators are missing a trick by overestimating the technical know-how of their customers. While there will always be a group of early adopters keen to embrace the latest gadgets and applications, they will be outnumbered by a substantial majority of mobile subscribers who only ever use their handset for making voice calls and sending texts.

With this in mind, we believe that the ‘stickiness' that operators crave comes from creating an environment on the handset that makes it easy for people to use their mobile for more, without being intimidated by the technology, and without entering a world of unknown costs. In short, simple and intuitive applications, which enable users to do more on the mobile and through the network, are ultimately the tools operators need in order to reduce churn.

If consumers will be less likely to try out new services, then applications must be highly compelling, viral and likely to generate word-of-mouth interest. The growth of the ‘casual gaming' market, for example, reflects this need. Last year, the casual games industry was estimated to be worth $2.25bn (£1.17bn) - unsurprising perhaps given that casual games appeal to consumers who are used to, and enjoy, playing games on their PCs.

Classic arcade games, which can be picked up easily and played with circles of friends, look likely to be the order of the day for operators. The most popular mobile games are Solitaire and Tetris - old school, basic games, which are addictive and easy to pick up. Savvy operators are opting to introduce ‘micropayments' where a basic game is promoted for free, and then add-ons (like characters or functions) are offered at an extra cost. The more levels and add-ons there are, the more likely it is that a consumer will play for the long term - and therefore remain a loyal customer for the operator.

Voice activated applications also look poised for success - as they provide a comfortable, ‘easy', way of interacting with a device in order to drive new services. Our own customer research has shown that voice services offer a good, transitionary, way to engage new users and drive adoption. Corporate giants like Google have been quick to capitalise on this trend - with applications like a voice activated search application for the iPhone. Google's service makes searching the web easy and accessible, particularly for use on the move. Location Based Services (LBS) have long been touted as providing consumers with useful information on the move, and combining LBS with voice recognition tools seems to be a route to quick success.

For any voice recognition service, though, quality of service will be key to driving adoption. Developers, or operators themselves, should be prepared to work with the industry's best partners to ensure adequate quality of service - particularly as operators look to penetrate new markets, which naturally call for support for other languages. Companies like Nuance and Qpointer are leading the way to ensure good quality voice recognition. Indeed, Nuance says that its Dragon NaturallySpeaking product turns voice into text three times faster than most people type - with up to 99 per cent accuracy.

But as well as quality, operators must ensure that applications are priced fairly and competitively. Just this week, guidelines for application developers were released on pricing applications for BlackBerry manufacturer Research In Motion (RIM). These were set significantly higher than iPhone applications - a development which is bound to disgruntle some BlackBerry owners.

But developing, and rolling out, more costly applications is an understandable move. After all, more expensive applications are a sure-fire way to create revenue and keep both operators and application developers in business. Business related applications, or premium games services, naturally command a higher price - and if users can see the benefit, or need, for these services, they'll continue to invest. But a balance needs to be struck. Transparency - and one off payments - are the order of the day. Helping consumers understand their bills and what they'll be paying each month will help generate a level of trust and loyalty between consumer and operator. Flat rate data tariffs will also be key to driving web-based applications - vital as the smartphone or mobile computer market blossoms.

Finally, marketing will continue to be of vital importance for operators wanting to attract new customers and retain current subscribers. Adopting better customer relationship management procedures and employing targeted, personalised, marketing will bring an operator closer to its customer - and help build an understanding of services and applications which are needed and relevant. It's important for operators to focus on the wants and needs of users, more so now than ever before. No longer will consumers have expendable cash to ‘experiment with', so it's key to focus on what will work, what will appeal - and importantly what is easy to use. In short, 2009 is going to be a tough year for mobile operators - but the ones who keep their services simple, targeted and fair are poised to ride out the global recession, and ultimately succeed.

Peter Hauser is CEO, me2me

Alon Werber looks at how operators can best harness customer data to deliver the  right product or service at the right time

The hugely competitive and ever evolving battle to win the hearts and minds of the mobile user is bringing marketers within this sector new and escalating challenges, but also huge opportunities. In addition to rapid churn rates and high customer acquisition costs, marketers are now also faced with an economic downturn, during which it is likely they will see, if they have not already, a reduction in consumption levels. Therefore it is essential now, more than ever, that marketers use all the tools at their disposal to maintain customer loyalty and retention, as well as ensure arpu is maximised.

The key to building long-lasting relationships is to continuously present the consumer with services, offers, merchandise and bundles, which meet their requirements at exactly the right time. In this sense the key is to always think of ‘what's next?' for the customer. Instead of trying to predict what users want, operators need to adopt a system which acknowledges a customers response, or lack of response, immediately and keeps the dialogue open based on their decisions, whilst executing the offers in real-time. It's an essential part of the Customer Relationship Management mix and will help to deliver optimum results yet it's not something that can be achieved through ‘traditional' campaign management systems. This means operators cannot maximise tried and tested techniques such as up-sell and cross-sell if they do not address the customer, just at the right time, and based on his actual behaviour.

Gartner forecasts that within the next three to five years the techniques of up-sell, offering the customer a higher priced or better version of the product they are purchasing; and cross-sell, offering a related product, will soar. These are important techniques in optimising the lifetime value of customer relationships, so how can marketers best implement them in order to ensure maximum return on investment?

Get your facts straight. Whilst it sounds like stating the obvious, it is something that many operators can often fail to maximise because they don't have the right tools at their disposal. Current and past behaviour patterns are the best predictors of future action; to be able to up-sell and cross-sell effectively, operators must monitor usage of services or products in real-time to enable behavioural-based targeting; an approach that, until now, has been hard and costly to adopt. Yet with the development of tools, like our own Marketing Delivery Platform, which is able to monitor and harness data on usage and behaviour patterns and execute marketing offers in real-time, this can be addressed. Tools such as these will enable operators to be better equipped to launch targeted, personalised and perfectly timed offers delivered through the right channel; increasing the chances of users purchasing the additional offering.

Many operators may claim to understand the importance of personalisation; however they often fail to deliver. It is all very well offering deals such as buy-one-get-one-free, 3-for-2, but does the offer address what the user wants? Operators often send marketing offers to customers in a non-targeted way that is irrelevant to the user. Users won't purchase content or subscribe to a new service if it is not relevant and delivered at the right time. It is ineffective to offer new, more expensive services to a customer who has, for example, not paid their bill. Equally, it is pointless to offer content relating to Heavy Metal bands if previous purchases made by the user have been related to R&B - it will simply not work. What's more, if users are bombarded with multiple, irrelevant offers, there's a possibility it will be seen as spam, not a term you want associated with your brand. To prevent this, marketers should adopt a personalised, multi-step online marketing plan rather than generic, multiple, one-trick-pony plan. In this sense, operators need to follow the example set by online service providers who have maximised the potential of personalisation with "Amazon-like" recommendations linked to the users' preferences and real time behaviour.

This personalised approach has been proven to deliver compelling results, for example, a cable operator recognised its key competitive advantage was the delivery of video on demand (VoD), yet subscribers weren't purchasing this premium content. Through targeted marketing offers to different consumer categories the operator was able to convert users that had never previously bought content, and by analysing relationships between content categories was able to design cross-sell offers that leveraged purchases from one category to promote purchases in another relevant category. This not only drove VOD subscribers to pay for premium movies but also introduced customers to new categories; increasing overall sales in the promoted categories by 42 per cent over a nine month period. This is the strategy that operators will need to embrace if they want to out-perform the competition and improve levels of customer retention and profitability.

Timing is a critical component within the equation. All too often an opportunity can be missed if an operator does not react in time to retain relationships with users - meaning lost revenue and the potential of alienating the user by offering a mis-targeted, mis-timed offer. If a customer is buying a ringtone, it is best to offer a related cross-sell before the purchase is completed and not two weeks later as the user is less likely to want to spend extra on additional products or services. This is an opportunity which operators will miss if they don't have a full profile of the customer or have the ability to implement offers in real-time. So often it is only when you address the customer ‘here and now' - when their mindset is open to marketing offers and they are about to purchase, that you will achieve a high success rate and customer satisfaction. The chances of cross-selling or up-selling will have dramatically dropped if there is a lapse between time of purchase and offer. Furthermore by offering a deal at the point of purchase it will make the user feel as though they have a personalised service and, as long as it is something they will like, and there is a saving, the chances of the user following through with the offer increases. In this sense, it is essential operators react to the user's responses in real-time; keeping the communication with the user open to allow the execution of offers based on requirements. Even if the customer is not in the process of purchasing a service, this does not mean that they could not be tempted by a marketing offer. For example, with pre-paid mobile customers, operators should automatically offer a silent customer, with a low balance, a special top-up benefit. Through this the operator can improve response rates and drive ARPU from cross-sell and up-sell offers whilst user satisfaction increases.

One of the key advantages with cross-selling is the ability to promote products that are not necessarily one of the big sellers but something consumers would be interested in if marketed correctly. Initially when a new product is launched it can be a bestseller, but over time interest wanes and items can seem like one-hit wonders; this immediate surge of revenue is known as the Short Head. Mobile service providers play to this model by refreshing on-deck content to keep people engaged and encouraging them to make fresh purchases. Yet it is the less popular products that can deliver consistent revenue when offered alongside the latest content; this is known as the Long Tail and gives operators the unprecedented opportunity to cross-sell by promoting products being left behind. To do it effectively, service providers need a flexible platform to launch a diverse range of products in real-time, whilst exploiting the limited window of opportunity for content-related offerings. So when a customer is purchasing the latest remix of a particular song that is topping the charts, it is also the perfect opportunity to cross-sell the original version of the song. By doing this, the operator is selling an item which is not particularly popular but is still available to purchase; increasing the arpu. The Long Tail theory is that the Long Tail, over a period of time, will equal the Short Head in size; that collectively many products account for as many sales as the few bestsellers. With cross-platform selling exploiting the Long Tail and Short Head simultaneously, operators need to be able to capture and analyse customer preferences and lifestyle characteristics to support this one-to-one marketing. By using these factors to create packages and bundles - operators can turn on-the-fly promotions into optimal marketing offers.

So the bottom line is that to be able to run effective marketing offers you need to have current statistics of what is going on with all your products - what's popular, what's not. Through implementing effective marketing tactics, operators will be able to analyse in real-time the results they are achieving and measure any level of reduction in consumption; giving them ample time to rectify problems and turn them into a positive outcome.

Central to the effectiveness of these methods is having a full view of a customer's profile; that is, having full visibility of their preferences, behaviour and buying patterns in real time so offers can be personalised to suit individual needs and delivered when, and in a manner, that is most appropriate for the customer. This is the key to ensuring that cross-sell and up-sell - the ‘what's next?' part of the CRM mix - delivers optimum results: driving revenue, improving customer loyalty and reducing churn.

Alon Werber is VP Marketing and Business Development at Pontis

A number of EU countries are now concerned about the reach and speed of their broadband infrastructure. Recent reports (such as Digital Britain by Lord Carter in the UK) highlight a range of public policy initiatives aimed at encouraging the delivery of both quasi-ubiquitous access and super fast broadband services.

Should broadband become part of the Universal Service? And if yes, what kind of broadband? Provided by whom? And who should pick up the tab?

The concept of Universal Service is not new and the term is thought to have been originally coined by Theodore Vail, the then CEO of AT&T in 1907. While at the time the term Universal Service referred to the need to connect different telephone networks to ensure the maximum reach, it is now generally associated with the provision of a basic level of service to all and at a subsidised price in "uneconomic areas".

A number of criteria have been used by regulators in the past to decide what should be within the scope of USO and what should be excluded. The EU criteria is whether a) the service has to be used by a majority of users, b) the use of the service is conductive to social inclusion, c) quasi-ubiquitous availability of the service generates "general net benefits to all consumers".

While, in the past, broadband failed to pass the first of these three criteria, many countries have now reached broadband penetration levels beyond 50 per cent. The other two criteria have a less quantitative answer but it is now generally accepted that broadband access does contribute to social inclusion and that ubiquitous connectivity generates net benefits.
While plans for the roll out of New Generation Networks are still being developed it is becoming clear that the commercial development of these super fast networks (e.g. 50Mb/s and above) will be limited to high density areas. Many EU governments have decided that it is too early for them to commit to significant investment programmes (with taxpayers' money) and are opting for a "wait and see" attitude instead.

The developments of next generation access networks suggest that countries will experience an increasing divergence between the speed experience by different user groups. Households in new urban developments with Fibre to the Home (FTTH) may enjoy speeds of greater than 100Mbs while users in less densely populated areas with legacy exchanges, may get less than 2Mbs.

This raises the question of whether Governments should step in to ensure that households are connected to the digital society and at what speed.

Historically incumbent operators, given their former monopoly status and the quasi ubiquitous footprint of their networks, were deemed to be natural USO providers. More recently however alternative provision mechanisms that would, for example, allow different operators to bid for the right to provide USO in a given geography (and win if their bid is the lowest cost) have been discussed. Also, mobile operators that have been subject to coverage obligations and have developed innovative tariff packages (such as Pay As You Go) promoting social inclusion, have not received USO subsidies. With 3G now and LTE on the horizon, mobile and wireless operators may well seek to be part of the USO club and play a significant role in the delivery of ubiquitous broadband access in the future.

The question of funding of the USO is and has always been a very political and sensitive issue. Currently largely financed by the telecommunications industry itself (or in many cases the incumbent), the cost of USO should arguably be more widely distributed. In fact, many argue that governments should directly finance this public policy initiative.

Including broadband as part of the USO would be a way to provide a safety net under the growing divergence in broadband access with very high broadband speed for some while other remain excluded with little prospect of higher speeds. The criteria used to define the scope of USO are now consistent with such an addition. The details of the funding underpinning such an initiative are, however, yet to be resolved... and may significantly delay or even derail the laudable ambition of a broadband service for all.

Benoit Reillier is a Director and head of the European telecoms practice at global economics advisory firm LECG. The views expressed in this column are his own.

YOC was tasked with creating a mobile campaign to promote the launch of Kraft Foods' new instant coffee, Jacobs 3in1/2in1. It was to be integrated with traditional media to provide consumers with an uncomplicated way to order samples via mobile, whilst minimising sampling wastage levels and associated costs through accurate targeting and tester self-selection.

The main objective of the mobile campaign was to place product samples amongst early adopters, who are considered to be innovation savvy and opinion leaders. It was also important that the campaign maximised the reach of the target group and increased conversion rate of sample requests, while at the same time decreasing product distribution costs. Measurement needed to be simple and transparent. Kraft also wanted to gather data to develop a customer database.

YOC created a mobile advertising and sampling campaign, integrating a mobile call to action with online and traditional TV and print media. Shortcodes and key words were promoted across traditional print and TV ads, inviting consumers to send an SMS to the campaign shortcode. Consumers could directly respond and request a product sample by sending a one word text message. Participants were then sent a WAP push link to the mobile sampling portal where users could enter personal details to receive a sample. Alongside traditional media promotion, banner ads for the sampling campaign were placed on the Vodafone portal on the Nokia, Sat1, Pro7 Mobil MTV, Viva and YOC.mobi sites. 

Following MMA guidelines, the campaign placed choice and control in the hands of the consumer. Promoting the mobile campaign through traditional media gave users an opportunity to interact with the brand and request a sample if they were interested in the product.

The ‘3in1 / 2in1' campaign enabled almost 500,000 samples to be placed directly amongst the target group. Over 450,000 customers registered with Jacobs during the promotion, making the mobile sampling campaign one of the largest and most successful ever. More than 80,000 users registered their details to be used for future permission based marketing. 

Some 0.4 per cent of users who saw the television advert ordered a product sample via the mobile. The campaign saw high responses from users of mobile portals that were led directly from mobile banner advertising to the mobile registration portal. Almost 650 banners were placed on selected portals relevant to the target group and these achieved a click-though rate of more than 3 per cent. 250,000 text messages were sent to the opted-in YOC Community members who were part of the defined target group. Thanks to the detailed profiling and selection of community members, 10.6 per cent responded and YOC distributed more than 26,000 samples to these respondents.

NetCracker /TELUS
Telus, the largest telco in western Canada and the country's second largest overall, underwent a five-year program to transform its back office systems and OSS processes. The company focused on retiring its old systems and constructing a new, integrated approach to customer and service management with new systems and software as replacements.
Telus merged its mobile and fixed arms in 2005 to reduce costs and, eventually, to provide fixed/mobile converged services. Telus wanted to roll out triple play services (voice, DSL broadband and IPTV) aimed at the residential market. To cope with the dramatic rise of new and converging services it was apparent that the operator needed a more sophisticated OSS system. And, as many telcos have discovered, without efficient provisioning and assurance it can be difficult to deploy and support complex, but low, margin services profitably. 

Telus decided it was more economical to go for outright replacement of its OSS environment, since integration and optimisation would be more expensive.

Part of that bold approach was to sign a deal with OSS specialist NetCracker Technology to supply and support its inventory and fulfilment systems. The new technology replaced Telus' legacy systems and integrated with the provider's service activation, network management and billing applications.

For managing legacy and next generation network resources, NetCracker provides resource inventory with outside plant, discovery and reconciliation, and design and planning modules. Its modules include asset management, which focuses on resources and equipment lifecycle management, and order management, for receiving and processing of customer orders.
Telus uses NetCracker software in both its enterprise and mass market businesses as it introduces new, advanced services:  advanced Layer 3 services such as MPLS and VPLS on the enterprise side, and triple play on the mass market side.  The NetCracker architecture involves one central database handling everything with different processing ‘instances' developed for different services.

Instead of installing technology first and designing processes to control it, Telus has taken a process-lead approach by developing a forward-looking set of processes and bending the technology to work with the processes, rather than the other way around.
The key was to focus on their inventory systems first so they had a single view of the customer for a growing list of products from the service representation right down to the physical network. 

Ultimately, the development of the service layer through its OSS transformation has helped the company migrate to its next generation network.

Gavitec AG / Spanair
Spanair wanted to find a cost effective and efficient means to expedite its passengers' experience when travelling. They turned to Mobile Marketing Association member Gavitec AG, a subsidiary of NeoMedia Technologies, to help them to create a completely paper-free ticketing process via a system of mobile boarding passes that passengers could access from their mobile handsets during check-in and boarding.

The campaign set out to achieve two key objectives. The first was to reduce costs for check-in and boarding procedures. The second was to expand and streamline Spanair's customer service by providing customers with a flexible, convenient and innovative way to check-in for their flights.

Taking into account the day-to-day convenience that mobile provides to users, Gavitec sought to create an entirely paperless ticketing service. The service was enabled by EXIO scanners and followed the IATA publication of a mobile boarding standard based on 2D barcodes. Instead of a paper boarding pass, passengers received a 2D barcode directly to their handset via text message (MMS, EMS or SMS). The message then functioned as both a ticket and a boarding pass. Prior to travel the 2D bar code was scanned at the airport check-in desks and security points and validated via an online database, reducing waiting time for passengers.

Spanair is the first airline in Spain to offer its passengers a mobile check-in facility. The mobile system implemented by Gavitec reduced distribution and operational costs and positioned the airline as an environmentally friendly carrier. The system increased customer satisfaction, allowing passengers to reclaim time that would usually be spent waiting around by shortening cheque-in queues and providing a convenient and efficient means to board their flights. The mobile ticketing system also allowed Spanair to improve its customer relationship management methods and develop a number of customer-centric strategies through data collection on passenger flying habits, providing a new channel for one-to-one direct marketing.

Using the EXIO scanners, the system is now running in eleven Spanish airports, initiating a service that could save the airline industry up to $500million each year. With the widespread installation of the streamlined and convenient service across Spanish airports, Spanair estimates that some 10 per cent or 800,000 of its passengers will make use of the mobile boarding pass facility during 2009.

Has the pace of change in communications outstripped the ability of organisations'   business management processes to keep up? Michael Coppack takes a look

The telecommunications industry, particularly on the cellular side of the fence, prides itself on being at the cutting edge of the latest technological innovations. Fortunately, for the cellcos, this perception is not only held among the industry's practitioners, but also by the end users, the subscribers.

In some respects, these beliefs are well deserved. The onset of the information age has changed the way businesses and individuals operate and communicate out of all recognition in the space of a single generation. Not since the Industrial Revolution has the world changed so rapidly.

The pace of change in the communications world has been so fast and absolute that it all too often masks over some fundamental problems, particularly when it comes to business management processes. When the ‘old' world of business collides with the ‘new', a certain amount of upheaval is inevitable.

Business leaders are right to be wary of new technologies that promise the earth and deliver nothing. For every solution that makes a difference, there are a whole host of others that fall short of the mark. For all its advancements, the communications industry bubble burst in the most spectacular of fashions at the turn of this century and attention became focused on steady, real, business practices. Rather than over-inflated stock market valuations.

Fast forward less than a decade and we once again find ourselves in an economic climate that, following some catastrophic mismanagement, advocates enterprise wide risk management with safe and efficient business practices. This time around, though, the communications industry finds itself at an advantage. Communications companies are not completely immune to the effects of the credit crunch, however, they're very well placed to ride out the crash. The comms industry is growing, globally, and will surely come out fitter and stronger on the other side of the current economic malaise.

The finger of blame for the most recent crash is being pointed fairly and squarely at the world of finance. Though the world of finance could well end up supplying a solution that the communications industry will use to iron out some of the hidden inefficiencies from which it suffers. Ironically, these operational inefficiencies lie at the heart of one of the oldest, steadiest of departments: accounts.

It would be fair comment to say that accountancy suffers from certain unfortunate image problems. Bookkeeping is not generally perceived as an exciting discipline. Indeed, account reconciliation is a laborious, monotonous, process that requires meticulous attention to detail. It is precisely the type of process that is ripe for automation.

Yet account reconciliation retains a relatively low-tech reputation. Accounting within complex organisations, such as network carriers, is often carried out using completely different methods across the wide range of business units in place. Growth through acquisition, mergers and de-mergers, and the introduction of new technologies and new pricing models have tied the supply chains and accounting departments of communications firms in bureaucratic, fragmented, knots.

It seems odd, insulting almost, that an industry which is activity promoting unified communications and convergence technologies, has not embraced automation within its own divisions.

Even at firms that embraced business process management solutions, such as those supplied by Oracle and SAP, account reconciliation is more often than not carried out by large teams of staff putting data into spreadsheets using semi-manual or completely manual processes. In today's tough economy it is essential for organisations to take control of their cash management and financial accounts to increase financial control and reduce operational risk.

The good news for shareholders and customers alike is that communications firms are increasingly recognising that manual financial transaction processing does not deliver the control and efficiency required to alleviate the challenges of balance sheet reconciliation. In many communications companies, the responsibility of account reconciliation falls to the individual departments who frequently use their own manual method to reconcile their sub and general ledger accounts.

At many firms, account reconciliation sees spreadsheets being populated manually with cash, cheque and credit card transaction data, this is then matched by an individual against bank statements. A typical organisation will have teams of employees permanently checking and re-checking accounts.

Generally speaking using manual processes provides little to no visibility and proving an audit trail and tracking transactions can be a timely, onerous and complex task, which is highly prone to errors. Resolving discrepancies also requires timely searches, prior to decisions being made on given business decisions. This batchwise approach to account reconciliation is a major source of irritation and cost at the majority of communications firms.
A small number of vendors exist in the market that can provide automated account reconciliation. That number diminishes further when looking for a supplier of proven software to large, complex, multinationals.

Financial directors are under an enormous amount of pressure, particularly in the current economic climate. And most of that pressure is being applied with the aim of cutting costs. Making an investment in technology requires an almost immediate, measurable, return.
There are seven basic areas that financial directors should consider when looking into automated account reconciliation solutions.
Does the solution:

  • Enhance control?
  • Improve timeliness?
  • Assure accuracy?
  • Reduce cost and risk?
  • Prove easy to use?
  • Prove easy to integrate? - and
  • Port across multiple-processes?

Users need to be in total control of the reconciliation process from input to output. They must have real-time visibility into the status of the reconciliation process, giving the assurance that appropriate and effective controls are in place and used to best effect.

Manual reconciliation takes time. Effective systems must save considerable time and enable users to feel confident that the reconciliation is 100 per cent correct. The time saving alone makes automated account reconciliation solutions a sound investment, enabling users to focus on more useful and rewarding tasks.

With manual reconciliation it is easy to make mistakes. A reconciliation system needs to provide controls to help prevent common errors, and functions to make it easy to rectify them if they are made.

Automated account reconciliation solutions will often provide a full return on investment within the first year of implementation. As a result of the automatic matching of the vast majority of transactions, time is freed up to deal with exception management and risk reduction. Some leading systems will often automate up to 95 per cent of the transactions in the reconciliation process.

The technology needs to be easy to use, preferably developed by accountants, for accountants. A good rule of thumb suggests that a system should be so easy to use that it requires less than one day of training for effective use.

The technology also needs to be flexible enough to handle input files from all banks and financial systems that can export account information in a file. This should be a standard module in almost all systems. The implementation and configuration process should take a minimum of time.

Finally, if you're looking to invest in an automatic account reconciliation solution you should look for a proven supplier that offers solutions across a range of markets and industries, that is not only used for bank reconciliation, but is also used for reconciliations of technical systems, internal account reconciliation, and for the reconciliation of inter-company accounts.
Firms need total control of their reconciliation process from input to output. They need to have real-time visibility into the status of the reconciliation process, giving the assurance that appropriate and effective controls are in place and used to best effect. With these systems in place, communications firms can iron out hidden operational inefficiencies and play a leading role taking the world out of recession.

Michael Coppack is Managing Director UK, Adra Match

The BSS Summit offers a comprehensive conference with an operator-only speaker panel, interactive tutorials and discussion sessions, networking events and exhibition of BSS suppliers

The BSS Summit, which runs on June 8th-11th 2009 in Amsterdam is billed as the event that will help telco businesses optimise their BSS infrastructure to drive efficiency and sustain revenues. 

Through a mixture of executive keynotes, service provider case studies, real time interactive polling, panel discussions and expert masterclasses, the BSS Summit aims to address a range of thorny questions, including: will your current BSS strategy allow you to protect your existing revenue streams while exploiting new opportunities; optimise ROI from your existing billing infrastructure; effectively manage the customer experience and develop the right business model to develop and maintain your position as a market leader? Also, are you prepared to do more with less? How will you manage your business processes to maintain the flexibility, efficiency and effectiveness of your BSS platform during this period of economic uncertainty?

The intention, according to organisers IIR Telecoms, is to help delegates meet the challenges of delivering world-class BSS performance within tighter budgets and a highly competitive market environment, advising on the best approaches to:

  • Design, plan and prepare for BSS projects more intelligently and realistically
  • Deliver BSS projects within restricted cost and time frameworks, supporting organisation-wide efforts towards greater efficiency and leaner use of resources
  • Demonstrate practical, visible improvements within shorter timeframes

Details: www.bsssummit.com

Some telecom CEOs seem to believe that in recession ‘branding' is less important than  delivering on fundamentals.  However, while functional issues are important, brand image is increasingly becoming a key success factor both internally and externally.  In fact, mobile telephony has become one of the great battlegrounds of consumer branding.

The sector is complex and becoming more so by the day.  There is choice of network standards (GSM or CSMA), distributors (Carphone Warehouse or Phones4U), network operators (Vodafone or Orange), tariffs (Dolphin or Passport), devices (Blackberry or Sony Ericsson), applications (mobile money transfer or mobile Internet) and content (Sky or Bloomberg). 

Consumers are confused.  Speed of change, technology convergence, a plethora of products and services and complexity are all making the telecoms market more difficult for consumers to choose. 

This is exactly why strong brands are so important.  Brands were pioneered in the US fast moving consumer and durable goods markets to help consumers make decisions more quickly and simply.  Brands simplify choice.

They are now doing just that in the telecoms sector and some brands are becoming increasingly dominant.

Vodafone is currently the most valuable and strongest brand in the world, boasting AAA BrandBeta Rating and a value of $24.6 billion.  This reflects the fact that Vodafone is now present in over 60 countries worldwide with over 250 million subscribers  (Source: BrandFinance).

When Vodafone went on its M&A spree in 2000 the strategy was based on creating the first truly global mobile brand.  As over 40 of the countries where Vodafone now operates are licensed ‘partner' markets rather than owned subsidiaries, it becomes clear how powerful the brand has become.  Behind its mantra of being ‘Red, Rock Solid and Restless' Vodafone has built an internal brand culture which has been communicated externally.  Football and F1 sponsorships, heavy advertising, exciting product PR and the ubiquitous red trade dress have lifted spontaneous consumer awareness from 10 per cent to 90 per cent globally. 
Strong brand positioning, awareness and emotion make new market entries easier.  Look at the hugely successful re-branding of Hutch in India.  No mean feat considering what a great brand Hutch was before the transition.  It also enhances acquisition rates and lowers lapse rates and increases price premium and arpu levels.

There is no doubt that Vodafone is rapidly reaching the dominant position of a VISA or Coca Cola.  This creates a huge advantage and puts other operators on the back foot.  In response local brands are smartening up their act and some are trying to emulate Vodafone's success.  Look at Zain and Etisalat in the Middle East or O2 and Orange in Europe.

The Blackberry brand is another example of power branding.  Research In Motion (RIM) has boomed on the back of its technology and Apple has cleaned up with the iPhone.  In both cases it is debatable whether they would have become so popular, with businessmen and consumers respectively, if they had not developed such strong brands to complement their technology.  Meanwhile Nokia continues to dominate the mainstream handset market and commands AAA- BrandBeta Rating and a brand value of $19.9 Billion (Source: BrandFinance).
The reason brands become so valuable is because when they are cleverly devised, well managed and consistently invested in, they secure demand and leverage all the other intangible assets of a business, increasing the life of patents and technology.  They become reservoirs of value or counter balances that maintain momentum even in tough times.
But brands need strong leadership, a clear point of view and consistency. Take Virgin.  In 1968, Richard Branson, the idealistic college drop out, developed an enduring brand promise. In his words:

"The Virgin brand promise is based on five key factors: value for money, quality, reliability, innovation and an indefinable, but nonetheless palpable, sense of fun.

"At Virgin, we know what the brand name means, and when we put our brand name on something, we're making a promise. It's a promise we've always kept and always will."
Virgin has a strong ‘positioning', allowing it to excel as an MVNO, amassing customers and fortunes along the way.

But Telecoms CEOs can build brands too. Hans Snook, Peter Erskine, Jorma Ollila and Arun Sarin all followed the Branson lead.  Every Telecom CEOs needs to embrace branding to get through the recession in good shape.

David Haigh is Founder and CEO of Brand Finance.
Brand Finance produces the BrandFinance500 annual survey of the world's strongest global brands. 

Ray Adensamer argues that Voice Quality Enhancement can help deliver the standard  required of VOIP conferencing systems

Audio conferencing services based on circuit switched networks and audio bridging equipment have provided hosted conferencing users with a benchmark for pricing and quality in voice communications. While next generation networks based on VoIP technology introduce economic benefits with new feature capabilities for conferencing service providers (CSPs), they also present new technical challenges in maintaining acceptable voice quality. Delivering good voice quality is an important requirement in any VoIP conferencing system, as poor voice quality will increase the costs associated with customer churn, while impacting the bottom line by reducing revenue growth prospects.

Voice Quality Enhancement (VQE) encompasses an integrated set of features designed to overcome common audio quality problems in VoIP conferencing services, including noise, packet loss and echo. A comprehensive VQE solution also measures VoIP quality metrics, which are used in ongoing voice quality measurement associated with service level agreements.

Many features inherent in a VQE solution require sophisticated digital signal processing algorithms. The rapid, scalable execution of these algorithms dictates a product specifically designed for real-time IP packet processing. Fortunately, in a next-generation VoIP audio conferencing architecture, a network element already exists with carrier-class real-time IP packet processing power. And that network element is the IP media server.

The three most common sources of VoIP audio quality problems in a VoIP or IMS network are noise, packet loss and echo. This section discusses each of these VoIP audio quality challenges and describes the conceptual solutions to overcome quality problems.

Audio noise
Gone are the days when people were confined to quiet office and residential environments. Today, with mobile phones and the Internet, people are calling from their cars, airports and from just about anywhere, and these environments are flooding the mouthpiece with all kinds of unwanted sounds that ultimately get onto the call. Making matters worse, callers using laptops and mobile phones are typically saddled with marginal equipment such as low cost earphones and microphones.

This section describes a combination of mechanisms that reduce and help manage the disturbing effect of audio noise: noise gating, noisy line detection and noise reduction.

Noise gating
Noise gating is a simple yet effective mechanism to reduce background noise.
When no speech is detected on a line, its signal is attenuated (eg decreased amplification), which prevents unnecessary noise from being inserted into a VoIP recording or conference mix. Noise attenuation is configurable, so the conferencing application can avoid making the signal unnaturally quiet when the noise gate is applied to an audio signal.
Key benefits of noise gating:

  • Reduces background noise using a simple yet effective mechanism
  • Supports configurable attenuation

Noisy line detection
There are times on a conference call when some lines are very noisy and disrupt the productivity of the entire call. Noisy line detection measures the noise on audio ports and sends a noisy line notification message to the VoIP application server if a predefined threshold is exceeded, as shown in Figure 2. A second message is sent if the noise subsequently falls below the threshold.

Key benefits of noisy line detection:

  • Notifies the application server of noisy line conditions, initiating possible corrective action
  • Enables quick remedial action by the application server or the operator (eg mute line)

Noise reduction
While a noise gating function described earlier provides a relatively simple solution to eliminating noise when no speech is detected, noise reduction goes a step further by using digital processing techniques to remove the noise and leave the important speech signal intact. This provides benefits in many VoIP applications, such as removing noise from VoIP audio recordings or noisy caller lines in a conference mix.
Key benefits of noise reduction:

  • Filters out noise without impacting the speaker's signal
  • Reduces noise continuously, whether speech is detected or not

Dropped packets
The Internet is an amazing network of interconnected computers, but it's not perfect. The network employs the IP protocol, which does not guarantee packet delivery. Hence, when IP networks get busy or congested, packets can get lost or delayed. While lost packets are not critical for many data applications, packet loss in real-time VoIP services can cause significant audio quality problems. Without special technology to compensate for dropped packets, the result is an abnormal audio signal that might sound ‘choppy.'

Packet loss concealment
Packet loss c\oncealment is a technique for replacing audio from lost or unacceptably delayed packets with a prediction based on previously received audio.
Whereas any voice repair technology would have difficulty recovering from extreme packet loss in abnormal conditions, packet loss concealment is designed to perform intelligent restoration of lost or delayed packets for a large majority of congested network scenarios.
Key benefits of packet loss concealment:

  • Softens any breaks in the voice signal
  • Reduces the occurrences of choppy audio

Acoustic echo
An acoustic echo is created when sound emanating from the receiver's speaker (eg handset or speakerphone) is transmitted back by the receiver's microphone. This is depicted in Figure 3, where the Sender (on the left) transmits a signal to the Receiver, and an acoustic echo is created when some speech energy ‘bounces back.' In a VoIP conferencing application, all participants will hear an echo except for the guilty party with the device causing the echo. Since nobody can quickly answer the basic question, "Who's causing the echo?" troubleshooting echo issues in a VoIP conference call can be difficult and frustrating.

Acoustic echo cancellation
Acoustic echo cancellation (AEC) technology is designed to detect and remove the sender's transmit (Tx) audio signal that bounces back through the receive (Rx) path. By removing the echo from the signal, overall speech intelligibility and voice quality is improved.

AEC in a VoIP network is particularly challenging. In a traditional voice network, once a voice circuit is established through the PSTN, the round-trip echo delay is constant. However, in a VoIP network, packet delay is a variable, hence the echo delay is also a variable for the duration of the call, which makes the echo cancellation algorithms in any VoIP quality improvement product more complex and processor-intensive than an equivalent echo cancellation solution in a circuit-switched network.
Key benefits of acoustic echo cancellation:

  • Removes a sender's audio echo from the receive path
  • Addresses variable packet delay inherent in IP networks

Voice quality metrics
Technology to remove audio quality impairments in a VoIP network is an important part of any solution. But along with the functions to improve VoIP quality, service providers also need a standard, objective way to measure voice quality in order to accurately monitor performance levels and uphold service level agreements (SLAs) with customers.
Voice quality metrics can be divided into three groups: packet, audio and acoustic echo cancellation (AEC). All statistics are captured for each call leg of a conference
call to help with granular troubleshooting of audio quality problems and performance measurement. Packet statistics measure performance with respect to packet throughput, loss and delay, while audio statistics measure speech and noise power levels. AEC statistics measure echo delay and echo cancellation performance.
Key benefits of voice quality metrics:

  • Provides objective measurements for administering service level agreements (SLAs)
  • Facilitates the troubleshooting of audio quality issues in the network

Voice quality enhancement
Voice quality enhancement (VQE) encompasses an integrated set of features designed to improve VoIP quality and generate statistics needed for ongoing performance monitoring. This requires sophisticated digital signal processing algorithms that perform rapid real-time IP packet processing, a key component in next-generation VoIP audio conferencing architecture. As such, VQE can be deployed in an existing IP media server, which provides the requisite carrier-class real-time IP packet processing power.

IP media servers, also known as the Multimedia Resource Function (MRF) in an IMS architecture, are specifically designed to deliver real-time IP media processing as a common, shared resource for a broad range of VoIP and IMS applications in a next-generation network.

They also deliver real-time processing of codec algorithms, transcoding of codecs and sophisticated audio mixing for conferencing applications. Since media server and VQE tasks are interrelated and require the rapid execution of IP packet processing algorithms, it makes sense to integrate the functions of both into a single network element.

Ray Adensamer is Senior Product Marketing Manager, RadiSys

As budgets are reprioritised, initiatives that promise the most value should be given  first priority, with service layer transformation somewhere near the top of the heap says Rick Mallon

Many service providers are in the midst of long-term IT transformation programs. Most often these aim to launch new services, improve speed to market, achieve customer-centricity, and simplify operations. In the current economic climate, however, resources for many CSPs are far more constrained than was anticipated when these programs were conceived. Consequently, many CSPs face tough decisions regarding their IT budgets. Those that reduce budgets sharply risk stranding previous investments made in ongoing programs. A newly established set of IT systems intended to enable a major migration could become yet another expensive operations silo, thus undermining the program's original goals.

Service layer vs BSS transformation
Transformation initiatives often start with BSS transformation. In post-merger environments where consolidation and customer-centricity are the business drivers, there's a definite logic to this. For one thing, service providers want the billing process to continue without a hitch. Trouble is, regardless of the technologies you use, the conversion of disparate billing and CRM environments to a centralised architecture will necessarily involve some risks and variable costs.

The biggest risk may be in putting the wrong foot forward. Some opt at the beginning for a traditional big-bang BSS transformation, because that path is a known route. Others may prefer to begin with a service layer transformation initiative, because it keeps future options open. Ultimately, the best- as well as least costly and most flexible - approach is to start with service layer transformation. Service layer transformation won't automatically save providers from recreating some of the mistakes of the past, but it will enable them to more easily add on new services in the future and create a common view of each subscriber.
BSS conversions are likely to affect a large number of business stakeholders, touch thousands of users, and impact millions of customers. As care channels change, or redesigned bills are introduced, there are always significant costs relating to possible customer disruptions during the transition period. Internally, new users need to be trained and established processes need to be re-engineered. The likelihood of battling organisational resistance is magnified.

Even if a CSP manages its way through the pitfalls, BSS transformations often struggle to deliver their intended value when they intersect still-fragmented service layers. Put simply, if the service layer continues to consist of distinct product-facing silos, it would be difficult to accelerate time to market, launch cross-domain services, and drive personalisation and customer intelligence.

Merging or federating these silos through service layer transformation has the potential to deliver significant benefits for less cost, effort and scope than BSS transformation. Fewer customer touch points are involved; fewer stakeholders are directly affected. Transformation of the service layer removes the silos, simplifies operations, and benefits marketing, service innovation, and opex and capex budgeting.

Because networks continue to experience significant advancement, vendor churn has become a consistent challenge for network organisations. Massive multi-vendor environments are also a common end result of large scale mergers and acquisitions. Service layer transformation is necessary to manage all of that kit under one layer and fulfil services in a technology-agnostic way. Even if a BSS transformation succeeds, time to market and operational-simplification goals can be derailed by overly complex networks broken out into distinct vendor domains.

While improving care, service personalisation, and customer intelligence is often at the core of BSS transformation's business case, it's difficult to achieve without a centralised view of a customer from a product and service perspective. Service layer transformation enables a single, correlated view of each customer and all their subscribed services. This view can, in turn, fuel more intelligent targeted marketing and personalised up-sales of value-added applications or additional services. Customers are tired of receiving promotional offers for services they already use at a higher price. If the service layer isn't transformed, this kind of churn-driving marketing continues while undermining revenue goals for new, add-on and niche-oriented offerings. CSPs have an opportunity to leverage significant standards work. Specs like SCTE 130 out of North America enable personalised services and advertising, while various efforts that leverage the TM Forum's business process framework and OSS/J teams provide models, process flows, and interface specifications for reducing the risk, time, and effort related to service layer transformations.

ZON Multimedia
ZON Multimedia, based in Oeiras, Portugal, is a good example of a CSP that has drawn significant benefits from an effective service layer initiative. ZON announced that by the end of 2008 more than 53 per cent of its customers were subscribed to multiple services. The company added 144,000 net new \subscribers in 2008 and credits much of this success to a bundle of video, broadband and IP-based voice services it launched in May last year. ZON is also launching mobile services, using a MVNO model, which will soon give it a true quad-play offering.

One of the unique aspects of ZON's offerings is that they are delivered in a network technology-agnostic fashion. Due to its OSS service layer transformation, ZON can determine the best and most profitable way to re-use and deliver services to any customer location. For example, ZON offers TV through on-network cable and also a satellite resale model. It offers PacketCable-based VoIP services over its cable network and SIP VoIP over resold ADSL lines. ZON has the ability to plug any new service offerings into its common service layer platform and deliver them through any available and appropriate networks and CPE devices. In addition to its MVNO offering, ZON offers HSD services for cable and WiFi, and DSL (resold model) from its common, transformed service layer.

For business or commercial market offerings, service layer automation can be more challenging than in the consumer sector. Enterprises vary significantly in their particular requirements, making end-to-end automation challenging. However, mass-market offerings for small and medium businesses are well within reach for the same service layer transformation that empowers consumer offerings. Services that combine, for example, a metro-Ethernet pipe with SIP-based VoIP, video for board rooms or waiting rooms, and advantageous mobile packages are ideal for this marketplace. In particular, preparing for the wave of SIP devices and applications to come is an important part of any CSP's growth strategy.

The multi-screen opportunity
One concept that is central to SIP, and increasingly important in video and broadband offerings, is service portability. Put simply, consumers want access to their video content wherever and whenever they choose. Many CSPs have yet to embrace this concept, leaving the opportunity open to Internet-based players. Though IPTV has the potential to provide flexible access to more content, it's only a technology and is often applied in the same framework as traditional cable TV. Customers, however, have a concept of content ownership. If they've purchased movies or TV shows for their iPod, mobile phone, or PC, they'd like to be able to access them from any other device, including their TVs at home.
Service layer transformation allows a CSP to seize this trend as a growth opportunity. It can enable service providers to tie services to individual subscribers, rather than to locations or devices. An intelligent service layer will understand to what devices a user has access and deliver content and services as appropriate and seamlessly. With a service layer empowering that kind of portability, new options for promotions and offerings open up, including personalised bundles and targeted advertising.

In today's disparate service layer environments, CSPs are scrambling to some extent because their TV offerings are being bypassed thanks to Hulu, iTunes, YouTube and other outlets. Delivering content to the channel the consumer wants at any given time requires service layer transformation. It enables customer-centricity across all services and breaks down the barriers between technology domains. With these capabilities in place, marketers have a world of options open to them that they wish they had today. Too often they instead face IT and network organisations that have to say: "We can't do that yet."

From a return on investment perspective, service layer transformation is a winner.  It can be a catalyst for moving service offerings and customer intelligence forward into entirely new areas of opportunity. It is simpler, less costly, and less risky than massive BSS conversions, yet sets the stage to make those inevitable BSS-layer transformations simpler and more beneficial. In a resource constrained world, where budgets are tightening and business cases are more scrutinised, service layer transformation is a priority that empowers both revenue growth and operational improvement.

Rick Mallon, Sigma Systems

People are communicating more things to more people than ever before, and not just  by phone anymore. Internet-enabled communication models are gaining audience, attention and market share at the expense of traditional telecommunication providers. Can telcos fight back and find new growth opportunities in this rapidly changing ecosystem? The challenge is not just in understanding the technology, but also the unfolding fundamental shifts in human communication behaviour say Chris Pearson and Rob van den Dam

A  growing number of people are visiting social networks. According to Comscore, approximately two-thirds of the worldwide Internet audience are regularly visiting social networks. This trend is universal. In South Korea, considered by many to be the world's most developed social network nation, more than 90 per cent of teens and almost half of the entire population are members of Cyworld.  In the United States, 80 per cent of the young adults, 60 per cent of teens and 30 per cent of adults use social networks. And in the UK, 90 per cent of teens spend time on these sites.

Social Networks have become a primary destination for a rapidly expanding universe of online users for managing and enriching a digital lifestyle. They provide the ability for them to communicate, to develop their identities, to build a network of relationships, to find information, to share experiences and self generated content, to buy products, and more.
With numerous communication tools at their disposal, social networks are becoming integrated communication hubs. The integration of MySpace and Skype, for example, illustrates how social networks and communication applications can converge to benefit users. With more than 118 million active MySpace users and over 370 million Skype registered users around the world, this partnership connects two of the most popular communication platforms on the Internet to create the world's largest online voice network.
A number of telcos are already responding to the challenges and opportunities of social networking. Many have initiatives underway that range from simply enabling online social networking sites to extending their offerings to the mobile communication environment, to even building their own, proprietary social networks. For example, telecom operators such as Sprint, AT&T and Vodafone enable MySpace and Facebook members to access their profiles from their cell phones. And Vodafone recently launched Connect to Friends, a Facebook application that enables Vodafone and non-Vodafone subscribers to communicate with each other from either a PC or a mobile phone.

The widespread social networking phenomenon is a reflection of shifts in two long-term communication trends:
1. communication patterns are changing from point-to-point and two-way conversations, to many-to-many, collaborative communications, augmented with links, videos, photos and multimedia content that substantially enrich the user experience.
2. control of communications is shifting away from the proprietary domain of telecom providers to open Internet platform service providers.

The so-called Net Generation - the digital natives who have grown up in a technology-enabled and Internet-connected environment - is at the forefront of shifting social communication patterns. Their preference is for staying connected, sharing, creating content, multitasking, assembling random information into patterns, and using technology in new ways. They are the wisdom-of-crowds generation that grew up rating peers, physical attributes, products and services, etc.

They are native speakers of technology, fluent in the digital languages of computers, the Internet, video games and the mobile phone, and often living in a state of continuous partial attention. For many of them, social networking is supplanting email, and even voice, as the preferred method of communication. But the shift away from traditional communications to social networking is not limited to this generation. A growing number of adults now use social networking to get what they want from each other, instead of from traditional media and institutions.

The second trend, the shifting control of communication media from the domain of telcos toward a more open communication platform, is the result of widespread availability and affordability of connectivity and communication tools/devices. With better, cheaper technologies and greater use of broadband, the Internet, and wireless networks, open platforms such as social networking sites, are becoming ever-more viable platforms for communication services - and consumers are responding eagerly.

The combination of shifts in communication control and patterns is redefining the competitive landscape, giving rise to new business models. In contrast with traditional communication models, emerging models are based on open platforms that support many-to many and/or collaborative communication patterns.

Traditional communication
The traditional model, characterized by two-way point-to-point communication is the domain of traditional telco providers. It is the largest segment in terms of revenue and subscribers, but it is showing signs of slow growth as other models take hold. Wireline revenue is declining and although, according to Gartner, global mobile services revenue is forecast to grow 7.6 per cent from 2007-2012, the mobile subscriber base has reached saturation in key developed markets.

Open and Free
This model offers alternatives to traditional point-to-point communication services on open Internet platforms. Companies in this domain provide basic communication services such as VoIP for free or at very low cost. Many of these services threaten profitable traditional services such as long distance calling and mobile roaming.

Providers in this space include VoIP provider Skype, Google with GoogleTalk and Microsoft with Windows Live Messenger, which offer PC-to-PC voice services along with instant messaging and chat. With over 370 million registered users worldwide, Skype has, in a matter of five years, come close to creating a truly global telecom service.

Many of the players in the "open and free" space, such as Microsoft and Google, have considerable resources and leave little room for a commercially viable response from telcos beyond repackaging existing services into "convenience bundles." Some telcos, however, seemingly have embraced the model and are partnering with disruptive new entrants. As an example, the mobile operator 3 in Australia and the United Kingdom has partnered with Skype to launch the 3 Skypephone, to attract and retain customers.

Gated Communities
This model focuses on group communication and collaboration in the Telcos's "walled-garden" and will appeal to users and enterprises with a preference for the more secure and reliable communications environment traditionally provided by telecoms.

The most obvious opportunity here is extension of social networking to the mobile where operators continue to retain some exclusivity. Research companies such as Informa and Juniper estimate that by 2012, mobile social networking will represent a market opportunity of between US$22.5 and US$52 billion, and telcos should be able to seize a share of that.
Recent studies have revealed that more than 40 per cent of iPhone users in the United States, Germany, France and the United Kingdom are visiting social networking sites. In South Korea, a mobile user visits Cyworld on average eleven times per day. The mobile service of the Japanese social network Mixi, which started as an online site, has turned out to be hugely successful with mobile page views already outnumbering online page views.
Telcos have also an opportunity to play a role in the delivery of fully integrated collaborative services to enterprises and organisations that value carrier-grade capabilities in a secure and reliable environment. According to Forrester, enterprise spending on Web 2.0 collaboration technologies is forecast to grow to US$4.6 billion globally by 2013, with social networking as the top spending category.

Shared Social Spaces
Shared Social Spaces facilitate collaboration on the open Internet. The main providers in this space are Over The Top (OTT) applications such as MySpace, Bebo, YouTube and Facebook. And virtual worlds such as Second Life belong to this domain. Also such parties as Microsoft, Google and Nokia, with its OVI/Share platform, have entered the fray.

As many of these players integrate telephony services, they have the potential to become fully integrated, end-to-end communication platforms. Though the revenue model remains unproven, they are drawing attention away from traditional communication service providers and are contributing to their slowing growth.

In addition, these types of applications put additional strain on already-burdened network infrastructure, particularly with the rapid increase in video content sharing and distribution. Cisco forecasts that by 2012, the sum of all forms of online video, including TV, VoD, Internet and peer-to-peer (P2P), will account for nearly 90 per cent of all consumer Internet traffic, a large portion of which will flow through OTT applications. According to Ofcom these types of OTT services will impose additional £830m (US$1.4 billion) in bandwidth costs on UK Internet service providers, without a corresponding revenue model.

To deal with over-burdening OTT traffic, telecom operators have options that include filtering or blocking OTT traffic, but this is unsustainable in many jurisdictions as it violates net-neutrality principles. Instead of protesting about the OTT bandwidth demand, Telcos should embrace the demand. Network and computing infrastructure optimization techniques such as traffic shaping and content delivery network (CDN) technology can reduce the cost of delivering high bandwidth content and potentially lead to new business models that even can capture value from this increasing OTT traffic.

The social networking phenomenon arose from significant shifts in communication, driven by the widespread growth of Internet connectivity and the emergence of interactive online communication tools. These shifts have been redefining a century-old industry, with the result that the advantages enjoyed by traditional communication service providers are beginning to wane. Telcos can, however, remain relevant in the face of changing user sentiments and demands if they take bold steps to adapt to this evolving marketplace.
Telcos can begin by taking advantage of the window of opportunity in mobile social networking, and also bolster their capabilities to serve the evolving, broader communication needs of enterprises. They should partner with, or acquire, existing players, to proactively develop the capabilities required for success. We already see some examples of such moves. In October 2008, Telefonica signed a global agreement with Facebook allowing it to integrate access to Facebook's mobile service and applications from all of Telefonica's mobile Portals. And in May of that year Vodafone acquired Zyb, a Danish mobile social network, with an eye on extending its social networking capabilities.

Telcos should also focus on enabling other participants in the value chain to benefit from distinctive telecom capabilities such as location, presence, text/multimedia messaging services and conference calling, in this way also generating revenue for themselves. Vodafone's Connect to Friends application in Facebook is an example of such an approach.
In addition, telcos should work more closely with OTT and/or CDN (such as Akamai and Limelight) providers to reduce the cost of delivering high bandwidth content (e.g. video, music) in response to increasing demands for such services. This can be achieved through network and computing infrastructure optimization techniques such as traffic shaping and caching of content close to the edge of the network using CDNs. Such approaches can potentially lead to new business models that capture more value from this increasing OTT traffic.

Over the long term, telcos should broaden the scope of their traditional voice business to more actively encompass both point-to-point and many-to-many collaborative models, which include voice, internet-based communications and content, and align the organisation and industry partnerships accordingly.

The fundamental change in the way we are now communicating is driving the evolution of a new communication services ecosystem that will force significant and bold changes by existing providers if they wish to remain an integral part of the communications landscape. The journey will not be without risks, but the option of doing nothing is a luxury many providers cannot afford. Revenue from traditional services will continue to decline and highly resourceful Internet information providers and IT companies continue to grow in the communications space to claim a larger share of communication time.

Chris Pearson is Global Telecom Industry Leader, IBM Global Business Services.
Rob van den Dam is EMEA Telecommunications Leader of the IBM Institute for Business Value and can be contacted via: rob_vandendam@nl.ibm.com


Most of Western Europe is now thoroughly gripped by recession, with even the  suggestion of a depression skulking on the horizon.  These are uncertain times - but one thing that is certain during these dark days, says Michael Callahan, is that companies will need to look at ways to reduce overheads, be smart with their diminishing budgets and seek solutions that provide value for money

Recent months have seen a number of high profile organisations fighting for survival, from redundancies within the financial sector, downtime on production lines in manufacturing, to major retailers slashing costs. All organisations, across all sectors - from small businesses to international conglomerates, are being affected by today's economic climate. Their continued existence will depend on them reducing their bottom line and tightening their belts effectively.

When a company needs to limit its spending, the first area to be examined, and habitually slashed, is its IT budget often with the security element considered non-essential. While many businesses overwhelmingly recognise that security has the power to determine whether they live or die commercially, many remain frustrated by the strain it places on finances and human resources. The reality is that growing regulatory requirements demand enterprises protect data, making such a cost saving strategy risky and potentially damaging.
Many an organisation has fallen foul when, having taken the decision to deploy technology, it has then inadequately scoped the investment, instead restricting it to what it considers the bare minimum and failing to anticipate the implications of its deployments. No matter what type of software or device is chosen, security should be an important consideration to lock down both the device, and the data that's contained within it to avoid ‘hidden' expense. Taking a mobile device, as an example, the questions that should be asked are: the types of information it will be able to access and carry; and how easy would it be for the device to be lost or stolen? The answers will have a great impact on security concerns and risks and will dictate the type and amount of security needed for the device. Simple, cost effective solutions, like boot-up passwords, two factor authentication and encryption, can all play a role.

One publicised example of inadequate, or even short-sighted, investment was a Marks & Spencer's owned laptop that contained a database of its 26,000 employees' details that was stolen from a third party. Having taking the decision to invest in laptops, it had opted not to take the precaution of sufficiently protecting those with sensitive data stored on them, as in this case. The Information Commissioner's Office found Marks & Spencer in breach of the Data Protection Act, leaving the retailer, not only with its reputation tarnished, but also an enforcement notice to ensure that all laptop hard drives were encrypted - a modest investment in hindsight which would have saved its blushes, not to mention the costs involved in handling the breach.

Many leading companies and organisations have already looked to decrease their overheads by reducing their property spend and energy expenses in downsizing to smaller, cost-effective premises. Redundancies are inevitable as workforces are slimmed down, with remote working and hot-desking practises feasible alternatives.

As department numbers decrease, the resultant increased workload for those that remain may force diligent employees to take work home with them to avoid falling behind or missing deadlines. Hot-desking could become widespread as companies strive to maximise their use of resources and cut costs by providing limited desks for their workforce, if at all - a drastic option could be to cut the cost of a central office altogether in favour of a ‘virtual' office. Another solution may be to utilise external resources, such as contracted labour, consultants, and possibly entire departments - IT support, HR and payroll are just a few examples.

While many companies try to weather the storm, data security must still be paramount. Privacy laws, along with corporate governance and industry-specific regulations, have become prevalent over recent years and neither ignorance, nor lack of funds, will be deemed as adequate defence. If organisations decide to lower their fortifications to allow flexible working practices, it is important that they do so securely and in a controlled manner. Here are a few ways for companies to examine what they currently have in their arsenal, and those that they really shouldn't be without:

Mobile computing allows people to use IT without being tied to a single location. Any business with staff that work, or will work, away from the office can benefit from using it. Devices - from laptops and personal organisers to "third generation" (3G) phones - can help to keep in touch and make the most productive use of your time. They can change the way you do business and lead to new ways of working, even new products and services that can be offered to customers, bringing new business opportunities. Increasingly, networking "hot spots" are being provided in offices where multiple employees access the same machine and network.  While this increases productivity and can reduce costs, it must be done securely. Data security advice from the Information Commissioner's Office is to encrypt any personal information held electronically if it will cause damage or distress if it is lost or stolen and only provide data access to approved personnel.

With new technologies, it's not only easier but more secure than it once was to let workers log onto the company network from home. Having fewer people working at the office could save money on energy bills - this could be taken further and shut down the office completely one day per week and have everyone work from home, with further savings realised by shutting down the heating or air conditioning system.  However, it is still imperative to secure the data as it leaves the office and travels home on the tube.

Replace dedicated WAN links with site-to-site VPN. If your business has multiple physical locations and you have dedicated leased lines connecting them, it might be time to think about ditching the expensive dedicated links and replacing them with site-to-site VPN connections instead. Midsize and large businesses may be able to save thousands on monthly fees by doing this.

Software application management (SAM) identifies installed applications, and then monitors their usage (or lack of) to determine compliance with software licenses, adherence to corporate usage and security policies. SAM is often perceived as a compliance exercise, yet the truth is organisations tend to underutilise licenses - typically 10-20 per cent on dead, outdated, or unnecessary application licenses. Reducing underutilised software has security benefits as well. Fewer applications means fewer opportunities for compromises and configuration errors. Also, the process of inventorying and auditing software usage often paves the way for additional control disciplines that cut costs and boost asset productivity.
Outsourcing is a sensitive subject, often conjuring images of personnel cuts. Yet the reality is judicious outsourcing can allow you to better utilise existing personnel.

Make good use of existing investments - advice PA Consulting should have heeded when an employee decided to circumnavigate existing security procedures, transferring data unencrypted to a memory stick, in breach of the company's contract and its own security policies. The memory stick, containing a Home Office database of 84,000 prisoners, was subsequently lost and, as a result, it has had its three year contract worth £1.5million terminated, with the Home Office further reviewing its other contracts worth £8million a year. Everyone within an organisation must understand his or her responsibility for keeping sensitive information secure and how to use the available technology, such as encryption software, to do so.

Fundamentally, effective security means doing more with less - it is about people, processes and technology. There are plenty of interesting technologies available although they're all useless if they're inappropriately deployed, managed and maintained. Allowing devices to operate in your enterprise without any rules or policies is truly the biggest risk. Complicated policies that regular users can't grasp are futile; instead they should be simple, precise and basic common sense. Often if people understand why they need to do something, then they'll do it. If all else fails look for something that can be enforced, often unseen, that takes the onus away from them.

In difficult economic times it is important to remember that the evidence of past downturns shows that those who make smart use of innovative technology will be the ones who live to fight another day.

Michael Callahan is Vice President Global Marketing, Credant

As operators begin to position themselves as multimedia companies, Chris Yeadon  examines the essential billing systems capabilities now required to support an effective content based strategy

Over the last few years many industry observers have stated the importance of mobile operators becoming media companies, if they are to avoid becoming merely ‘dumb bit pipes' as they approach the so called ‘IP Jungle'.  Many operators have taken notice. An increasing number are now positioning themselves as multimedia companies, offering new fixed-line, DSL, IPTV and mobile TV services in addition to their core mobile offerings. Content is also playing an increasing role, especially in the mobile channel. Indeed, according to Portfolio Research, the mobile content market was already worth $24 billion in 2008 and is forecast to rise to $47 billion in 2013.

The challenge for many operators is how to support the new array of partners and especially content partners who will play an increasingly important role in the value chain of their offerings. In this regard the billing system will be pivotal in the support of next generation strategies.

Mobile content covers a huge area in terms of genre and format, ranging from stock price information to games and SMS alerts to mobile TV and advertising. Therefore, before we examine the billing system requirements for mobile content it is necessary to make some assumptions. For the purposes of this article mobile content is:

  • Both produced and owned by a third party
  • Obtained or consumed over the network
  • Marketed and sold by the operator (‘on-deck')
  • Always chargeable - but not necessarily to the end user.

Mobile content provides operators with the means to increase customer focus by targeting customer segments with relevant content. This could include offering financial news to the business segment or music downloads to the youth segment. Depending on the ambition of an operator's content strategy, they may develop a content partner ecosystem consisting of numerous companies each with different financial and contractual models to be supported. Therefore, in much the same way that an operator requires efficient access to contractual and product data to manage its relationship with its customers, it must have the ability to efficiently manage its partner relationships. This includes contract definition flexibility to support the different types of partner business models.

Unless the content partnership is based on a ‘buy-out' or ‘blanket fee' arrangement, the business terms of the partnership will typically be based on a percentage of revenue or rate per use royalty. Therefore by definition, the billing system will need to support multiple chargeable parties. Firstly, the subscriber usage charges (including any applicable offers or discounts) must be calculated and made available for subsequent billing. Then, in relation to each transaction, additional charges payable to the content partner must also be calculated by the billing system.

Whilst this may seem obvious, for certain types of content the reality can be much more complex. Music content is a good example. In some cases an operator's billing system may have to support three or more additional chargeable parties including a record company, music publishers and various copyright protection societies.

In order to support a rich content partner ecosystem, the billing system must have the flexibility to generate different types of invoices and statements for each type of transaction in addition to those produced for the subscriber. Taking the example of music content; a record company partner may have control of the content platform from which downloads are made and therefore is able to issue an invoice to the operator at the end of each billing period.  The billing system may then need to produce a reconciliation statement in order to reach settlement with the partner. On the other hand a copyright society, with no connection to the content delivery process, will rely on the operator to provide a different kind of credit note or ‘negative invoice' at the end of the billing period.

For an operator's billing system, partner agreement flexibility is the ability to be able to support the business terms of all their partner agreements.  In particular this means having the tariff flexibility to support the calculation of all the appropriate charges payable to a content provider or at the billing level, the application of bulk usage discounts and incentives that may also be written into the partner agreements.

The following example shows the schedule of royalties payable to the Mechanical Copyright Protection Society (MCPS) for full-track music downloads. MCPS is a copyright society in the UK, representing music publishers from which businesses who are recording music, must obtain a licence. Similar organisations exist in many countries across the world. It illustrates a potential complex charging scenario that must be supported.

No. tracks in bundle      Royalty Rate     Min. Royalty Per Track
1-7                              8% gross revenue                4p
8-12                            8% gross revenue                3.5p
13-17                          8% gross revenue                3p
18-29                          8% gross revenue                2.5p
30+                             8% gross revenue                2p
MCPS (UK) Royalty Schedule for Full Track Downloads

In this example the basic royalty charge payable by the operator is eight per cent of gross revenue from the download of the music file. However this is subject to a minimum royalty charge of four pence. Furthermore this minimum royalty is variable, depending of the number of tracks that are included in a bundle. Therefore, within the charging component of the billing system, an operator may have to set up a dependant tariff of eight per cent of gross revenue as well as a series of alternative tariffs based on the various potential bundle scenarios. During the rating process, the charges based on both the dependant tariff and the applicable alternative tariff would have to be calculated and then subsequently during the billing process, a ‘best option' rule applied, selecting the most favourable charge for the partner (MCPS).

The support of the above scenario also assumes the number of tracks contained in a bundle can be supported as a field in the content usage record, and that the rating engine can support the bundled track numbers as a unit of measurement.

Historically, mobile content involves higher levels of risk resulting from fraud and accidental overspending. The risk is heightened by the fact that operators are exposed to third party content charges that are usually dependant on usage or revenues due rather than revenues paid.

Therefore content services should be chargeable in real-time for both prepaid and post paid subscribers. This would enable operators to perform balance checks on the subscriber's account.  In the case of a prepaid subscriber this is to ensure that sufficient credit remains to cover the transaction. For a postpaid subscriber this is to check against a threshold set by the operator, as a precaution against possible fraud or overspending or one set by the subscriber as a voluntary spending control measure. Such checks should result in an advice of charge message being sent to the subscriber in advance of the transaction.

The benefits of real-time charging to the operator are clear. It reduces the degree of credit risk, provides price transparency and a feeling of control to the subscriber and provides the possibility to offer the subscriber, in real-time, promotions and discounts.

One possible way to achieve this would be to utilise the real-time capabilities of a postpaid billing system to charge all content transactions for all subscribers, prepaid and postpaid. In addition to the important real-time controls, it would mean that all content services can be made available to all subscribers and that costly content tariff configuration duplication is reduced.

In the future as the telecommunications industry converges with the media and entertainment industries it is clear that content partnerships will play an increasingly significant role in an operator's success. It is therefore essential that an operator is equipped with a billing system that is designed to support content partner models, has the flexibility to sustain the varied financial models of a large partner ecosystem and, in addition, has the tariff and marketing features, including real-time charging, to satisfy increasingly demanding customers.

Chris Yeadon is Director, Product Marketing, LHS



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