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Pub 2012-24.indd 1 12-01-09 2:11 PM All articles are available for download at www.connect-world.com CONTENTS
Technology that changes the landscape Stimulating rural Indian economy with focused-based MVNO models 4 by Fredrik Jejdling, President and Head of Region, Ericsson India
4 7 9 13 The world of rising data heralds an era of network sharing 7 by Sanjiv Ahuja, Executive Chairman, Augere
Next Generation Network (NGN) - The future of telecommunication 9 by Satya N. Gupta, Director General, NGN Forum India 16 18 20 23 The MVNO environment How do MVNO’s differentiate themselves 13 by Guru Grewal, VP Tech, Mahindra Europe
MVNO success path 16 25 28 30 by Mohan Kumar, Founder & CEO, Plintron Innovative MVNO business propositions International MVNOs - New opportunities in a global niche 18 by Rod Ullens, CEO and Co-Founder, Voxbone
Active posters: The physical storefront for digital goods 20 by Jeffrey Fraser, Sr. Director, mCommerce, & Mobile Ad Innovation Group XIUS
MVNO - find your niche and make it count! 23 by Vikas Bansal, Director, Carrier Sales, South Asia and Middle East, Cable&Wireless Worldwide Getting more from the infrastructure Defining service quality management needs for mobile operators 25 by Gregg Hara, Vice President of Business Development, Centina Systems
Connections Mobile data - a smart approach to traffic management 28 From the Editor’s desk 2 by Manoranjan Mohapatra, CEO, Comviva by Rebecca Copeland Service innovation - with a little help from some friends 30 Imprint 2 by Drew Rockwell, CEO, MDS Group Advertorial ALOE Systems 3 Advertisements EXFO IFC Invest Ontario 6 LTE World Summit 11 Sviaz Expocomm 14 CommunicAsia 21 Expocomm SMAU 26 Dragonwave IBC Ericsson OBC CONNECTIONS
Connections
The idea of the MVNO (Mobile Virtual In fact, established carriers in India are rather slow to migrate to the Network Operator) model is to allow packet-based ‘NGN’ network, while the Mobile Internet revolution service providers to focus on niche is sweeping India as fast as it does in the developed world. Much of opportunities and develop new markets the recent growth in mobile subscriptions is due to first-time Internet while buying-in wholesale network users who have no access to PCs. Such a market will readily consume capacity from established network mobile applications, and locally customised MVNO packages could operators. This gives carriers an be very successful - given half a chance. The contrast between opportunity to offset the high costs of conservative, restrictive and inefficient incumbents and the volatile investment in infrastructure and brings open-to-all Mobile Internet experience may yet produce explosive in innovations that only agile, lean results in India. start-ups seem to demonstrate.
There is a great potential for this model to flourish in India. It is a ‘single’ market where even niche services can soon attract a large following. It is a complex society Rebecca Copeland, with an emerging economy and great regional variation that could be Editor, a fertile ground for innovative approaches. So why has India not taken Connect-World up the baton of the MVNO? [email protected] The Telecom Regulator Authority of India (TRAI) has recommended supporting MVNO back in 2008. They have already privatised the Telecom Industry and saw the Indian market booming as a result. However, the stronghold of the incumbents seems to have the upper hand when it comes to the Department of Telecommunications (DoT). The DoT has not endorsed fully the TRAI recommendation. Carriers are not forced, or even encouraged, to open their network to MVNOs, as in Europe.
Despite these hurdles, some organisations managed to strike wholesale deals and set up operations in India. There are clear opportunities for ‘Global MVNOs’ who help travellers to combat high roaming charges and international calling. Opportunities involving non-telecom industries, such as Health and Transport, may generate new business and gain better co-operation from the reluctant incumbents. Particularly promising is the eCommerce market that exploits new technologies, such as the NFC (Near Field Communication) that allows digital transactions via ‘Smart Posters’. Indeed, eWallet services in rural areas can serve users who have no access to banking - and stimulate the micro-economy considerably.
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Publisher: David Nunes [email protected]
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ISSN 1369-894X
2 n India 2012 ALOE Systems
ALOE Systems: Efficient Solutions for Transit VoIP Carriers
The VoIP traffic transit market is developing fast and has expanded in scalable to meet the needs of carriers of any size. Players of larger size over the last years. Carriers’ needs grow accordingly: they require telecom segments choose MVTS II because the product is a highly solutions of higher performance and greater capacity, reliable enough customizable solution ready to meet the needs of any carrier. to stream heavy traffic flows. ALOE Systems has been a vendor of VoIP solutions for wholesale transit carriers for more than 10 years MVTS II is one of the most efficient softswitches in the industry: its and has rich experience of customizing products to meet the needs of a concurrent calls amounts to 150 000. particular carrier. Unique ALOE Systems’ know-hows form the main advantages of The company developed a unique four-in-one platform for running MVTS II that distinguish it from other products in the market: real- VoIP wholesale business - MVTS II - that combines switching, time profit protection and route quality control. routing, billing, and border-control functionality. All these features come in a product from a single vendor, which allows to decrease • Real-time profitability protection: MVTS II routing is more ownership costs and minimize risks connected with integration of than just ordinary LCR. The carrier can set the system to route third party solutions. traffic in whichever way that would bring more profit. Maximum difference between incoming and outgoing prices for calls is MVTS II is highly flexible and can be used by both relatively small established to assure profit margins. carriers and larger, established telecom players. It can be installed on standard server hardware, minimizing installation cost and making • Route quality control - if route quality falls below a certain network transformation easy and seamless. point, the route can be blocked and reconfigured to guarantee SLA parameters to end clients. The ability of MVTS II to create partitions made it an ideal platform for implementing different business models (including SaaS) and ALOE Systems’ other products are MVTS Pro and ALOE Transit SBC. allowing the creation of independent “hosted” softswitches within the main platform. Larger operators can allocate individual partitions MVTS Pro is a high-performance class 4 softswitch featuring high of the system to offer “hosted” softswitch services to other carriers. capacity (1000 CPS per traffic entry point) and RADIUS accounting For startups, MVTS II is a cost-effective entry into the VoIP for integration with billing systems. By arranging fast traffic flow wholesale market. the product enables the carrier to expand the network even if it is compiled of dissimilar components. As a four-in-one solution, MVTS II: • Changes the network infrastructure ALOE Transit SBC is a session border controller that combines • Resolves technical (routing, controlling, etc.) and business security, media management, and transcoding services in a single, (billing) issues highly scalable software platform. The product can be easily deployed • Optimizes traffic routes to get more profit in complex network structures and features network topology hiding • Helps to launch a startup and distributed architecture, which makes the network less vulnerable Small transit carriers can purchase a basic package of MVTS II and to malicious attacks. increase the system’s capacity and performance as their businesses expand. MVTS II is clustered in multiple nodes and is easily Visit www.aloe-systems.com for more information. l
PROMOTIONAL FEATURE Technology that changes the landscape
Stimulating rural Indian economy with focused-based MVNO models by Fredrik Jejdling, President and Head of Region, Ericsson India
The mobile market in India has blossomed since the telecom sector was reformed but the MVNO model is yet to blossom. Although the regulator has recommended it in 2008, the DoT has not issued favourable guidelines that would help MVNOs to get established. In many emerging economies, encouraging mobile penetration in rural areas has proven to boost the economy and considerably increase the country’s GDP. To this end, the Indian Regulator supports the introduction of the MVNO model where only one network will cover remote areas. MVNOs can address special segments of the market and benefit India even further, with non-telco entrants focusing on new business areas such as banking, transport and retail.
Effective 1 June, 2011, Fredrik Jejdling is Managing Director and Head of Region, Ericsson India. Fredrik has held key positions in Ericsson including Vice President and Head of Engagement Practices with responsibility for customer engagements within the region India (from August 2010 till end of May 2011). From April 2006 to July 2010, Mr Jejdling was Vice President and Head of Sales for Business Unit Global Services. In this role he was responsible for sales and finance for the Business Unit and the Market Units’ services consolidated financial results. Prior to that, he was Director and Head of Managed Capacity responsible for developing the Managed Capacity offering for Ericsson.
Mr Jejdling’s previous assignments include various senior managerial positions in LUX Asia Pacific, Singapore and LUX Australia Pty. Ltd. (2002-2006), spearheading branding strategy and new products from design and development to sales system. From 1998 - 2002 he held managerial positions with Tele 2 Group offering Public Telecom Services, Transaction Processing & Clearing Services to Airports and Hotels. He has also served as Lieutenant, Combat Command Officer with Royal Swedish Navy responsible for the combat information centre and officer on the bridge.
Fredrik Jejdling holds an M.Sc. in Economics and Business Administration (Major in Finance and International Business) from Stockholm School of Economics. He has an MBA from the Richard Ivey School of Business, University of Ontario, Canada. He also undertook Lieutenant/Reserve Officers training from the Royal Swedish Naval Academy.
The telecom industry, with history dating services domain for the private sector. subscribers in India, making the telecom back to 1850, has experienced the first Since then the Indian telecom sector sector a vital catalyst for the overall wind of change at the Indian shores has implemented several structural and growth of the Indian economy. in the 1980s, when the private sector technological reforms. India’s move was allowed into telecommunications towards globalization in the telecom sector A well-established mode of communication equipment manufacturing. After almost was driven by transparent policies and can advance national economies by a decade, in the 1990s, the telecom sweeping reforms initiated by both the empowering its citizens and providing new revolution in many other countries government and private players over the revenue-generating opportunities. Studies resulted in better quality of services and last decade. These initiatives dramatically reveal that even a small increase in mobile lower tariffs and led the Indian policy changed the face of telecom industry in penetration can have a positive effect makers to initiate a change process India and helped to achieve a stupendous on a country’s Gross Domestic Product finally resulting in opening up of telecom growth in the number of mobile (GDP), as mobile communications boost
4 n India 2012 Technology that changes the landscape
economic activity at a macro level. Mobile Another MVNO player in India is Blyk, operators. A strategy linked to the target connectivity is no longer a privilege - it having a unique business model, where it market, promising customer growth rates has become a necessity and a key enabler has launched its content service on Aircel and expected returns along with strict of social and economic activity. Last year, platform. The customers need to pay extra cost control are vital to the success of another milestone was laid in the history of to become a Blyk subscriber. an MVNO. In future, not just telecom mobile industry. According to Ericsson’s operators are expected to enter this segment estimates based on industry information, When a MVNO enters a market already but also players from diverse backgrounds the global mobile user base touched the dominated by incumbent players, they have like retail, banking and finance, and five billion mark in 2010. The extraordinary to offer a unique value proposition in the government sector. It offers a path to growth of the mobility industry has been form of brand value, attractive content or a fixed mobile convergence, stimulating one of the most remarkable business segment specific service offering to attract competition, supporting innovative services and technology success stories of all the customers. The MVNO actually benefits and boosting outsourcing offers, managed time. Emerging markets like India and from maintaining almost independent services and customer satisfaction. l China have a major role in adding to this business model and to balance out its significant number of mobile subscribers. reliance on the Mobile Network Operator by investing in core network components The invention of mobile networks is and value-added service platforms. a breakthrough in technology. The introduction of novel services coupled To survive in Indian market, the MVNOs with the increasing importance of need to have a sound business model. wireless communication, are aspects that An aspiring MVNO must carry out a contribute to the growth in the number comprehensive assessment of its target Connect-World now on of subscribers in the cellular segment. market, expected Average Revenue per Facebook & Twitter Certain factors that have contributed User (ARPU), expected competition to make mobile penetration a huge level, existing market shares and mobile Connect-World, the world’s success in India are a conglomeration of penetration. MVNO must focus on services foremost discussion forum for innovative ideas such as implementation differentiation against the service portfolios leaders in the ICT industry, is now of lowest tariffs, competition with many offered by different incumbent players and global players, availability of low-cost the addressable customer segments. available on Facebook and Twitter. and user-friendly devices or handsets, and rapid network rollouts. This also resulted The revenue growth potential, large pool The world’s top ICT decision in acceleration of economic growth to of churn customers, emerging broadband makers express their opinions in stand at a pedestal where we can proudly wireless technologies and compelling Connect-World. They use clear, classify India as the largest network economics are creating market conditions non-technical, English to discuss provider in the world after China. conducive to give thrust to the MVNO how ICT helps shape regional business model in India. and global development. The The Indian market, with over 850 million articles essentially examine the subscriptions is one of the most competitive The Telecom Regulatory Authority of India and dynamic telecom markets in the world had, in 2008, given its recommendations influence that ICT products and despite a host of issues like large number on allowing MVNOs, although the services have on the way people of players, low tariff and declining ARPU. final decision is still pending with the live and do business. With Taking into account the market dynamics, Department of Telecommunications (DoT). separate editions for each of we are yet to see whether Mobile Virtual DoT is also considering the introduction of the world’s regions, the reports Network Operator (MVNO), a concept a mobile virtual network operator (MVNO) highlight the most important ICT which created uproar due to regulatory model to set up a wireless broadband trends and issues influencing issues a few years back, can become a network in rural areas which can be used socio-economic growth. successful model in the Indian market. by multiple operators. It would be better that only one operator is allowed to roll As we know, MVNO is a mobile operator out the network in rural areas and other Connect-World is now available that does not have any spectrum of its own. operators may use the same network to follow on Twitter (http://twitter. It purchases bulk airtime from Mobile for providing services through MVNO com/#!/ConnectWorldICT) and Network Operator (MNO) and may also agreements. Through the MVNO model, Facebook http://www.facebook. utilise the infrastructure of an incumbent an operator would be able to offer services com/connectworld.ict telecom operator. MVNO as a business using spectrum/infrastructure of other model was first pioneered in Europe and telecom service providers hence providing Also, it is still possible, for FREE, the concept is now moving towards the cost advantage to set up telecom network to directly access all past and emerging markets like Brazil and Chile in operations in rural India. present Connect-World articles, South and Central America, Turkey in the Middle East, India, Pakistan and Vietnam In summary, with initial success, MVNOs ICT Industry press releases, in Asia-Pacific. On the Indian soil, Virgin can be a viable business model, given the eLetters, ICT News and more at Mobile was the first MVNO to enter the right regulatory environment, right focus www.connect-world.com. market in tie up with Tata Teleservices. group and right partnership with network
India 2012 n 5 B:216 mm T:210 mm S:190 mm
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The world of rising data heralds an era of network sharing by Sanjiv Ahuja, Executive Chairman, Augere
The traditional model of selling Voice minutes and Text messages is collapsing under the ‘weight’ of data services. The main issue is the clash of charging regimes - with unlimited use of data and free VoIP over broadband. Operators are forced to upgrade their broadband infrastructure but seek to lower costs of delivering data. Therefore, operators are much more willing to consider sharing their own resources or buying in wholesale capacity. Still, there must be a process of educating consumers to pay for perceived value of the consumed resources, just as SMS is charged for the value of the text message, not the cost of transporting it. Such perceived value comes from innovative services generated by MVNOs who rely on third-party networks for their service delivery.
Sanjiv Ahuja is Executive Chairman of Augere. He is also the Chairman of LightSquared board, which aims to be a wholesale-only integrated 4G-LTE wireless broadband and satellite network in the U.S. Mr Ahuja is also the founder and chairman of Augere, which he formed in 2007 with several other telecommunications executives. Augere’s charter is to deliver affordable wireless broadband to developing markets such as India and Bangladesh. The company’s first commercial wireless network was launched in Pakistan in July 2009, and further wireless broadband services were launched in India, Uganda and Rwanda in 2011.
Mr Ahuja is also the founder and chairman of Eaton Telecom, which facilitates universal telecommunications service in twelve African countries through infrastructure sharing. This reduces the cost of network rollout for wireless operators in Africa. Previously, Mr Ahuja was chief executive officer of Orange from 2004 through 2007, during which time he served as a member of the board of Orange SA and of France Telecom’s Group Management Committee. Under his leadership, Orange increased the number of countries in which it operates from 17 to 23 and more than doubled the number of its mobile customers from 48 million to more than 100 million subscribers globally. Mr Ahuja has also served as president of Telcordia Technologies (formerly Bellcore). He was responsible for growing Telcordia into a global entity with more than 40 per cent of its sales coming from outside of North America. Prior to that, he spent 15 years at IBM in various executive roles, including leading the company’s entry into the telecommunications software industry.
The mobile communications industry is previously unheard of network sharing and markedly in emerging markets, where in the midst of a seismic shift. The old wholesaling models. mobile telephony was the first widely business model of selling minutes and text available telecommunications medium. is under threat in the face of smartphone Mobile operators globally have built Operators have long relied on voice and proliferation, open operating systems hugely successful businesses based text for revenues, and while many have and downloadable voice and messaging on the simple model of constructing attempted to ‘monetise’ data services, apps. Alongside this, the ever-expanding networks and then charging customers this has been largely unsuccessful, consumer appetite for data, both in terms to use these closed infrastructures when with voice and text remaining the key of volume and speed, is forcing mobile they want to talk and text. Growth over money-spinner. operators to make difficult decisions the last 20 years has been explosive, about their businesses. Faced with a changing the way we live our lives, and However in today’s world of Facebook, requirement for huge investment in their indeed changing the face of society. Twitter, Blackberry Messenger, Skype, networks, many will be considering The impact has been felt even more Android, Google, App-store, smartphones,
India 2012 n 7 Technology that changes the landscape
tablets etc., this model is rapidly to MVNOs (Mobile Virtual Network embrace these changes, and transform becoming unsustainable. Put simply, with Operators). MVNOs have traditionally themselves into smart data businesses. a smartphone or tablet connected to a data been successful as a customer-acquisition Multiple new commercial models will connection, all forms of communication machine, where the MVNO had a strong be put in place to give consumers the (voice, text, video) are available, and brand, access to a specific customer experience they demand. Smart operators usually for free. base (such as an ethnic group) or strong should not fear this new data-oriented distribution (or a combination of these). world, but will concentrate on using this The quality of these platforms is Usually, however, the MVNO business new technology eco-system to innovate improving rapidly, and consumer model has relied on discounted minutes and grow. The end result should be a model acceptance is rising. This is not only a and text sold with paper-thin margins. that offers data hungry consumers the very phenomenon facing developed markets best network offering whilst remaining - the prospect of cheap smartphones and In future, it looks like the wholesale model a competitive and profitable industry for US$60 tablets (as recently announced will increasingly be used between network operators. A win-win situation. l in India) in budget-conscious emerging operators of all types. With devices able to markets will have the same effect. We use multiple network platforms (3G, 4G, must not underestimate how rapidly WiFi etc.) the mobile operators will seek this change will take place. Broadband the best possible data experience which is suppliers must make substantial seamlessly available to their customers, investments in networks in these markets regardless of who operates the network. to ensure that they are capable of It is this philosophy that underpins the supporting the latest generation of data- wholesale-only Lightsquared business driven devices. model in the US. Connect-World now on In many markets, data has been given Mobile operators need to provide a high- Facebook & Twitter away to support voice and text revenue. quality data service to their customers, When O2 launched the first iPhone in either by building up their own networks, Connect-World, the world’s the UK, the device was sold with free or reselling services on third-party foremost discussion forum for unlimited data. This later had to be networks. They also need to charge for leaders in the ICT industry, is now reversed when the phenomenal impact of these services properly. However, the real available on Facebook and Twitter. the iPhone on data usage was recognised. value from telecommunications networks Mobile operators have consistently will come from the provision of services undercharged for data, offering network- which add real value to consumers. As The world’s top ICT decision crippling unlimited packages and, in the we all know, a single SMS requires a tiny makers express their opinions in process, educating customers to believe amount of data to be transferred, but has Connect-World. They use clear, that data is cheap, or worse still, free. been of great value to consumers who have non-technical, English to discuss consequently paid for texts at a rate many how ICT helps shape regional The way forward lies in network operators times the actual cost of transmitting the and global development. The charging ‘properly’ for data, which message. This service was charged in line articles essentially examine the means charging at a level that reflects with the perceived value to the customer, influence that ICT products and the investment made in the network. not the cost of transmitting the data. Unlimited packages are ultimately not services have on the way people sustainable (except perhaps with fair Mobile operators should put their efforts live and do business. With usage restrictions), and pricing has to be into developing services that have real separate editions for each of differentiated based on speed and quality value and can be sold to consumers at the world’s regions, the reports of service. This process will take time and a premium. However, their track record highlight the most important ICT will involve consumers being educated of innovating at the service level has trends and issues influencing to make rational economic decisions on been weak (beyond basic voice and text socio-economic growth. the service they are willing to pay for (in and the associated capabilities). Only by short, higher and more reliable speeds, opening up their network infrastructures Connect-World is now available with higher costs for larger download to third parties, can they tap into the volumes). This will not be an easy process. huge potential of mobile data services. to follow on Twitter (http://twitter. Only by partnering, can the full potential com/#!/ConnectWorldICT) and Mobile operators also need to offer their of healthcare services, financial services, Facebook http://www.facebook. customers quality data connections. This gaming and entertainment services, to com/connectworld.ict can involve heavy investment in new name but a few, be realised. Partnering or upgraded networks, but increasingly with banks, social networks, healthcare Also, it is still possible, for FREE, network operators will have to look at providers, etc, and providing an open to directly access all past and sharing resources via new wholesale environment for these services is the present Connect-World articles, business models. When we think of way forward. ICT Industry press releases, wholesaling in our industry, we tend to think of MNOs (Mobile Network This is indeed a time of major change in eLetters, ICT News and more at Operators) selling network access our industry. Smart mobile operators will www.connect-world.com.
8 n India 2012 Technology that changes the landscape
Next Generation Network (NGN) - The future of telecommunication by Satya N. Gupta, Director General, NGN Forum India
Customers now demand EoIP (Everything over IP), which requires NGN with ability to serve new multimedia services on any device. The NGN architecture with its separation of access, control and service layers, lends itself to the re-definition of the telecom landscape. New licensing should reflect technology-independent service provision or service-agnostic multiple technology service delivery. Packet networks also need new charging regimes with the ‘death of distance’, where interconnect charging agreements are no longer distance- based, but depend on quality and capacity.
S. N. Gupta was born in 1957 and graduated in 1979 with Hons in EC Engineering from NIT, Kurukshetra University, INDIA. In 1980, he completed his post-graduate degree in Electronics Design Technology at CEDT, Indian Institute of Science, Bangalore. He completed his Masters in Telecom Policy and Regulation as an ITU Scholar from University of West Indies, Trinidad and Tobago through e-learning. In 1981 he joined the Ministry of Communication in Srinagar, India. In 1983, he joined IRSSE Cadre of Western Railway and in1989 moved to Indian Railways Institute for Signal Engineering & Telecom. From August 1994 in IRCON, he headed the first Optical Fibre Project between Mumbai and Delhi. For the last five years, he served in BT Global Services as Chief Regulatory Advisor and Director Govt. Affairs for India & SAARC. Presently, he is serving as Chief of Corporate Affairs with Sterlite technologies Ltd. handling the ambitious project of Fibre-To-The-Home (FTTH).
Mr Gupta was awarded the Minister of Railways award for the outstanding performance during 1995-96. He is the founder President of ACTO, an Industry body of carriers and members of National ICT Committees. He is a Fellow and Chartered Engineer of Institution of Electronics and Telecom Engineers, India and member of National Council. He is also a Life Member of Institution of Railway Signal and Telecom Engineers & Vice-President and Trustee of PTC India Foundation. He was elected as Vice President of ISP association of India and Advisor to OSP Association of India. He was elected as the Jt. Secretary of APT-ITU Foundation of India. Mr Gupta has founded the NGN Forum in India and serves as its Director General. He is a member of India IPv6 Task Force committee for IPv6 implementation and a Nominee Director of IT-ITES SSC of National Skill Development Corporation. He is also a member of National Broadband Plan (NBP) advisory body. He has been awarded the Bharat Excellence Award and Jewel of India Medal by the Friendship Forum of India during 2009-10 and included in the International Dictionary of Professionals by ABI, USA. Recently, he published a book entitled Everything Over IP that covers almost all about NGN and Broadband.
Introduction lower income levels. Offering the same “In the current state of customer base, multiple services requires In the current state of economic meltdown establishing multiple networks, which is economic meltdown and and cut-throat competition, Telecom very inefficient, and therefore a converged cut-throat competition, operators need ways of providing multiple Next Generation Networks (NGNs) is Telecom operators need services over their networks to demanding needed, which is entirely based on Internet ways of providing multiple customers. They need to address falling Protocol (IP). This could be done without average revenues per user (ARPU) as dumping the investments in existing services over their additional growth of voice services legacy networks, which are still delivering networks to demanding is gained via penetrating lower and the goods, however inefficiently. The customers.”
India 2012 n 9 Technology that changes the landscape
layered architecture of NGN is ideally infrastructure, so that operational licence The All IP - NGN Ecosystems suited for technology-agnostic based holders can accommodate different content/ services, thus encouraging the competition application providers and niche service Next Generation Services - Converged as well as enabling the optimum utilisation providers can serve their customers with (voice, data, video, mobile) of telecom infrastructure. innovative multimedia services. Next Generation Access - high-speed What is Next Generation Networks (NGN)? NGN is required to cater to many different (Broadband) IP-based connectivity end-user devices. These devices could be (ADSL, VDSL, LTE, Cable, FTTH) ITU defined NGN in 2004 as: “a packet- computer, laptop, fixed-line telephone, Next Generation Wireless Access - based network able to provide services mobile handset or TV, or any device 3G+/4G, Advanced WLAN including Telecommunication Services and that is at present in the imagination of Next Generation Transport - Carrier able to make use of multiple Broadband, the designers. These handsets deliver Ethernet, IP-MPLS, QoS-enabled transport technologies in which not only voice and data but also video, service-related functions are independent mobile TV, mobile e-mail and all other Next Generation Architecture - Service from underlying transport-related converged services. In effect NGNs are oriented, layered technologies. It offers unrestricted access capable of providing any service from Next Generation Internet Protocol - IPv6 by users to different service providers. It any infrastructure, irrespective of whether Next Generation Interconnect - Capacity supports generalised mobility which will the service is in Telecom, Internet or and Quality based charging allow consistent and ubiquitous provision of Broadcasting, anywhere to anywhere, services to users.” from any device to any device. This is the Next Generation Licensing - Unified and fundamental change from VoIP to EoIP - Class Licensing The NGN is based on packetisation Everything-over- Internet-Protocol. Next Generation Regulation - Converged technology with a separation of (Single Regulator for ICE) infrastructure, service control and service PSTN migration to NGN provision functions. As the inflexible Advantages of NGN circuit-switched connection-oriented TDM The evolution of PSTN to NGN would be technology is phased out, the IP-based NGN dictated by customers and services. Instead For service providers, the NGN features is taking charge. In NGN domain, the main of merely replacing voice services by a provide many compelling advantages. network elements are: Softswitch, IMS (IP broadband version of them, it promises new The integrated packet-based technology Multimedia Subsystem), media gateways, services to end-users. NGN must build on reduces Capex and Opex. Transmission application servers, routers and broadband the strength of both telephony and Internet costs are lower, there is greater power access nodes. service models. Access modernisation is saving, less space requirement and less key in this evolution but state-of-the-art O&M costs while there is also ability to The schematic diagram depicting the PSTN solutions of today can evolve and offer wider range of services at faster Layered Architecture of NGN distributing stay part of the future NGN, to preserve speed. Instead of maintaining different various network elements is shown in investments. Access, for instance, could be networks for different services, only a Figure 1. As shown, the NGN layered through high-speed broadband provided single network needs be managed. architecture consists of transport, service through ADSL, VDSL, LTE, FTTH or all of control and application layers, distributing them. Carrier Ethernet and IP-MPLS (Multi- Subscribers will benefit when call charges intelligence at every layer. The underlying Protocol Label Switching) have become the are reduced. They could choose multiple packet transport and media infrastructure preferred transport modes. NGN facilitates service providers to get maximum advantage is in the Transport layer interworks with service-oriented architecture that enables of competitive offers or take advantage of circuit-switched (PSTN) networks through new developments to be integrated without single billing for all services of voice, data, media gateways, so that existing networks massive additional investments. . video and mobile. In addition, customers can continue to support subscribers. can control their own application layer and The service control layer, obtain On-Demand services. consisting of softswitches, media gateway controllers and IMS Fixed mobile convergence (FMC) (IP Multimedia Subsystem), performs the functions of control, NGNs enable fixed-mobile authentication, accounting, QoS, convergence that benefits users security and network management. but also conserves scarce licensed The application layer makes use radio spectrum. For example, a of capabilities provided by the mobile call can be delivered on other layers to deliver multimedia fixed phone or terminated through applications based on open service a fixed broadband network on architecture and published APIs. a mobile phone. Where many networks face spectrum shortage, The NGN architecture defines this could reduce spectrum open standards to support the consumption. Studies show that interaction between service 70 per cent of mobile calls are provision and underlying Figure 1 received when the user is at a fixed
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“Many operators are now convinced that NGN is the future goal and are evolving towards it. Obviously, existing PSTN cannot be scrapped overnight but migration has to be initiated, and the sooner the better. BT in the UK is one such operator. Key milestones towards NGN migration in what is termed as 21CN began with the initiation of transition in 2005, completing the transformation into NGN by 2011, and now moving beyond NGN through superfast broadband powered by FTTH.”
location or near a Hot Spot. In the context Such a scenario necessitates considering sorted out through consultations among of declining fixed-line usage and saturation a technology-neutral and service-agnostic all stakeholders in coopetition mode, as in mobile ownership, there could be more unified licensing for operations and there is no option but to migrate to NGN - harmonious division of work between services, and ‘class licensing’ for Value- for survival as well as for overall societal the two, benefiting the entire system. As added Services. In addition, there is a welfare. As they say - “Packetise or Perish”. broadband becomes ubiquitous and the need for another category which would be l mobile handset is turned into a multi- authorised to create and provide underlying purpose, multi-band, palm-held computer, infrastructure for service providers. the advantages of increased use of FMC could be easily foreseen. There is also the need for interconnect charging to be based on capacity and quality, NGN deployment instead of the existing systems which have been designed to deal with distance Many operators are now convinced that NGN and duration (Minutes and Miles). Where Connect-World now on is the future goal and are evolving towards it. telecom technologies are causing what is Facebook & Twitter Obviously, existing PSTN cannot be scrapped termed ‘death of distance’ - pricing based on overnight but migration has to be initiated, distance becomes out of date. For instance, a Connect-World, the world’s and the sooner the better. BT in the UK is rupee a minute charge is now valid for long foremost discussion forum for one such operator. Key milestones towards distance calls whether the call is from Delhi NGN migration in what is termed as 21CN to Chandigarh (250 km) or from Kashmir to leaders in the ICT industry, is now began with the initiation of transition in 2005, Kanyakumari (3000 km). available on Facebook and Twitter. completing the transformation into NGN by 2011, and now moving beyond NGN through Opportunity for non-facility based service The world’s top ICT decision superfast broadband powered by FTTH. providers (MVNOs, resellers) makers express their opinions in Connect-World. They use clear, Operators in many countries like UK, The layered architecture of NGN provides a non-technical, English to discuss Japan, Korea, Malaysia, Italy, Singapore, great opportunity for the regulators to facilitate how ICT helps shape regional Vietnam and China have decided to migrate Resellers and MVNOs who will operate and global development. The to NGN. The incumbent operators there at service layer. They will make use of the are replacing their existing networks by IP- underlying transport and control infrastructure articles essentially examine the based infrastructure in a time-bound manner. created by main operators who wish to act influence that ICT products and This is mainly motivated by the need to face as wholesalers/carriers. This will optimise services have on the way people competitors and new entrants and provide utilisation of the infrastructure and enable the live and do business. With new value-added services, cut down on competition to enter the market faster in a cost- separate editions for each of Opex and make the network future-proof. effective manner. The NTP-2011 draft in India the world’s regions, the reports has envisioned this concept already in the highlight the most important ICT Regulatory challenges in transition toward form of Network Service Operator (NSO) and trends and issues influencing NGN Service Delivery Operator (SDO). socio-economic growth. As NGN capabilities blur the differences Way forward between various types of services, Connect-World is now available traditional boundaries between local access The many challenges, technical as well to follow on Twitter (http://twitter. and long distance operators are vanishing. as business hurdles, are to be faced and com/#!/ConnectWorldICT) and Regulators faced with the impact of ongoing Facebook http://www.facebook. technological advancements on the telecom com/connectworld.ict environment, are forced to re-look at service-based licensing and geographical Also, it is still possible, for FREE, area-based regulatory regime, including to directly access all past and reformed numbering systems. They have to determine who a telecom operator is present Connect-World articles, and who a value-added service provider is, ICT Industry press releases, when operators are also becoming value- eLetters, ICT News and more at added service providers and niche service www.connect-world.com. providers can connect via larger networks.
12 n India 2012 The MVNO environment
How do MVNOs differentiate themselves by Guru Grewal, VP Tech Mahindra Europe
In Western Europe, which pioneered the MVNO model, not all MVNO entrants survived, but many are still thriving. This business model has now spread to emerging economies, but it appears to mainly flourish in a saturated market, where niche services and focusing on a special market segment can still add value to subscribers. In India, the market is reaching this point but the regulator’s recommendation is not backed by DoT guidelines to encourage the incumbents to open the field. India could greatly benefit from the MVNO innovative approaches that could foster, for example, mobile money for those without banking facilities, thus stimulating the economy.
Guru Grewal is VP in Tech Mahindra Europe. Mr Grewal has a widespread international business exposure and has worked in leading roles in North America, Japan, India and Europe for over two decades. He is currently responsible for Tech Mahindra’s European Operations. He joined Tech Mahindra in October 2005.
Prior to Tech Mahindra, Mr Grewal headed technology verticals for HCL UK since 2000. He moved to the UK from Japan, where he led the Japanese operations of HCL for five years. Guru Grewal started his career with Tata Unisys and worked there for five years handling business and technical responsibilities in USA and India.
Guru Grewal has an MBA degree from Bombay University.
The Mobile Virtual Network Operator MVNOs. While currently there are very providing mobile services can be completely (MVNO) market has become a melting pot for few MVNOs in emerging economies, more different from that of a Communications three of the most important industries today: countries are expected to introduce MVNOs Service Provider. telecommunications, entertainment and non- in markets such as South and Central telecom sectors such as BSFI (Banking, America, India, the Middle East and Asia- The key question is why does the MVNO Financial Services and Insurance), Aviation, Pacific. The critical success factors for market exist when MNO’s are already doing Sports and Retail. The idea that a mobile MVNOs, their ecosystem and global factors the same job? Interestingly, the answer phone can lead to a customer’s mindshare, that are influencing MVNOs commercial lies in the current communications market wallet and most important of all - loyalty - progress do vary in different regions. dynamics, as established telecom service has a range of businesses, not always from providers are gradually expanding their the communications industry, interested. They The MVNO principle portfolio beyond the voice market, capturing can explore the opportunity of entering the subscribers from cable operators and ISPs. mobile services business through the MVNO The term ‘MVNO’ covers a range of different Cable operators are also gradually offering route. Ovum has predicted that the global business approaches to providing mobile triple play voice, video and data services and MVNO market will boast of 186 million services. MVNOs are often known brands taking away subscribers from the telecom subscribers by 2015 with revenues reaching with a viable proposition, brand strength and service providers. The telecom markets have US$9.5 billion. This means that many more channels to market for mobile services. This therefore become extremely competitive and MVNOs will launch in the coming years. allows them to capitalise on their existing highly saturated. assets such as brand equity and captive Western Europe has pioneered the MVNO customer base when entering an unrelated In such a market scenario, the two main model with approximately 357 active business. The core business of an MVNO levers that drive MVNO business model are:
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a) Spectrum Scarcity: a company that Lifestyle MVNOs, such as Boost Mobile, meant that sectors beyond telecoms, such as aspires to be in the telecom business but a Lifestyle ESP targeting the youth market, retail, banking, media and sport were allowed missed the spectrum auctions in their country Helio, AMP’D - are relatively new and target- to set up MVNOs. can take the MVNO route to enter the market. affluent, technology-savvy consumers with a focus on specific niche market demographics. In Europe, MVNOs are gaining independence b) Customer Loyalty, Retention and The market is characterized by an emphasis of their hosting MNOs by running their own Churn Management: Mobiles have now on trendy design, style, advanced phone service platforms. They may use several become one of the more powerful mediums features, and jazzy content. Business MVNOs MNOs to get best-service or best-package for information dissemination and are such as Mobeo, Beyond Mobile and Abica for their subscribers, often addressing increasingly used as a popular marketing focus mainly on the enterprise market particular niche markets. Western Europe and lead generation tool. The MVNO model segment and corporate customers. and North America are both expected to provides the business with the opportunity grow in subscription numbers but will not to offer alternative avenues, enrich What are the key success factors for the see a radical shift in market structure. These communication facilities, enhance lifestyle MVNO business model? two regions will also remain the largest packages and address captive customer base. concentration of MVNO players and MVNO MVNOs have a fair share of both successes penetration. However, it is expected that MNOs benefit from offsetting the high and failures throughout the world. Informa’s the majority of new, emerging MVNO investments in spectrum licences and research indicates that approximately 24.5 markets would remain relatively small and network infrastructure by charging the per cent of MVNOs either have ceased have minimal impact on global MVNO MVNOs wholesale fees to the use of their trading or have been acquired following connections and revenues. network. The also benefit from, acquiring poor market uptake or poor financial additional customers at a zero cost. results. Some MVNOs have sold their Business model factors MVNOs help to increase their Minutes of business to their host operators following Usage, which in turn might aid MNOs in an unmanageable escalation of the debt, Beyond the regulatory issues, a number of negotiating Interconnect agreements with while some mobile network operators factors determine the potential success or their roaming partners. actively acquired their MVNOs in order to failure of an MVNO - which are not solely eradicate disruptive competitive players in determined by the targeted segment. The How do MVNOs differentiate themselves in their market. In general, MVNOs take off primary components for success are that the already saturated market? when there is already 100 per cent mobile the strategy must clearly communicate penetration - i.e. MVNOs tend to flourish in the vision for the business, together with MVNOs operate through a wide range of more ‘saturated’ areas. realistic market and financial objectives. business models, such as Resellers, Service The strategy should also address the retail Providers, Enhanced Service Providers and However there are other factors that come offering, go-to-market tactics, logistics full MVNOs. Beyond the business model into play when determining the success and resourcing requirements. It must also itself, the beauty of the MVNO approach in different geographies, especially where choose the most appropriate operating model is that it allows new entrants to segment there are regulatory issues. Unless there is - whether managed-facilities based hosted the market any way they like. MVNOs a regulatory framework, businesses can be model, shared services model or in-house throughout the world have targeted numerous reluctant to move into the MVNO space. model, each affecting the balance of Capex segments to date - for example, the youth and Opex. market, enterprises, sports fans, ethnic Global trends - MVNOs communities and the low-spending segment. The role of the MVNO is likely to evolve Segmentation of this kind is crucial as it While the established MVNO markets will in coming years. They are well placed to allows MVNOs to focus and tailor their drive growth, the emerging economies are provide emerging services such as mobile offerings to better serve the customers in their also warming up to the MVNO approach. banking through their relationship with niche. It also enables them to avoid direct Markets such as Brazil and India present an their customer. In India, for example, there competition with the established and often attractive opportunity for MVNOs, but there is the potential for MVNOs to bridge the stronger MNOs. are still a number of obstacles impacting gap between banks and customers, so MVNO development in these countries. consumers who don’t have a bank account There is a diverse range of approaches by can transfer money and make payments via various MVNOs towards their target markets: In India the lack of guidelines1 and their service provider. MVNOs are in a strong examples of these include ad-funded MVNOs regulations to facilitate new MVNOs is one position to appeal to the customers with such as Blyk & MOSH Mobile, who build of the key factors hindering success. Without service innovation, enabling rapid customer revenues from advertising to give a set of free a regulatory framework to stimulate new acquisition, and obtaining customer loyalty. voice, text and content to their subscribers entrants, businesses will struggle to strike up They have the dual benefit of making the in lieu of their signing to receive unlimited partnerships and may not be able to make a market more efficient on the cost side and advertisements on their handsets. Other viable business case. expediting the adoption of services on the approaches are ‘brand loyalty’ MVNOs such revenue side. Whilst individual performances as IKEA, the Swedish home furniture retailer In Latin America, the regulatory mandates are of players across different regions vary, in the UK and the Future Group’s Talk24 in now being opened up and this should drive MVNOs do have the potential of changing India. They have launched prepaid mobile further growth. In Brazil, for example - the the structure, economic flows and culture of service which is only offered to existing largest mobile market in LATAM - MVNO the wireless industry for years to come. l loyalty scheme members. regulation came into force in 2010, which
1 Editorial comment: Although the Telecom Regulatory Authority of India (TRAI) had recommended the introduction of MVNOs in 2008, the Indian Department of Transport (DoT) has not issued appropriate MVNO guidelines, which are still in discussion.
India 2012 n 15 The MVNO environment
MVNO Success path by Mohan Kumar, Founder & CEO, Plintron
MVNO models range from pure marketing of hosted services to ‘Full MVNO’ who run their own core equipment, all but the radio network. A successful, profitable MVNO - with any of these models - is one who concentrates on innovative services which are frequently updated and on strong brand and customer relationship. MVNOs who distribute their own SIM cards, especially where Number Portability is available, are now in the driving seat, able to switch MNOs if they wish, and therefore able to negotiate better terms. Nevertheless, MVNOs must focus on their differentiating features and leave the network connectivity to MVNEs (enablers) and MVNAs (aggregators). MVNEs provide management of the infrastructure and connectivity to multiple MNOs, and free-up the MVNO to continue innovating.
Mohan Kumar is the founder of PLINTRON, an international CLOUD based telecom infrastructure and business service provider integrated in fourteen countries MNOs. PLINTRON provides consultancy and support in regulatory, contract, design, capacity, roll-out and managing the services required for MVNO business. Mr Kumar spear-headed the launch of 25+ MVNO’s in seventeen countries spread across Americas, Europe and Asia.
Mohan Kumar has over 22 years of experience in business and technology leadership position across Telecom, BFSI (Banking, Financial Services and Insurance) and Manufacturing industries.
The MVNO (Mobile Virtual Network spectrum licence. At the other extreme, fewer manage to implement successful Operator) model represents a high- the infrastructure is completely outsourced transformation programs. potential market emerging in the wake of from the MNO, with only sales and the Mobile-established business, which marketing handled by the MVNO. There To maximize the bandwidth of possibilities, enables launching fast-moving new branded are also multiple network-sharing models, MVNO should have the capability to mobile service. As part of the MVNO where MNOs in the same geography can continuously adapt to new technologies and maturity cycle, the MVNOs’ business has leverage one another’s network reach and customise their service offering to cater to evolved, and in many cases MVNOs gained various technologies to lower operating the requirement of their focused market more control of their mobile services and cost and improve coverage. segments. The key to success is to be their relationships with subscribers. innovative and identify unexplored niches. Although the MVNO market has MVNOs should transform from ‘pure play’ The highest maturity model is widely consolidated in recent years, most low-cost to a ‘niche’ player with value-add. known as FULL or HEAVY MVNO Model, MVNOs are now struggling. The facts where the MVNO owns and operates are clear: only a handful of MVNOs that Today in the mobile service model, the all core network elements excluding the achieve excellence are able to sustain MVNO are in a better position than RADIO NETWORK which requires a it and be profitable over time. Even the MNO to be quick in delivering
16 n India 2012 The MVNO environment
“The MVNO must focus on the core service control and business management of their brand, leaving the mobile coverage to the MNO. The key factors for a successful MVNO business are the attractive products and sleek sales and marketing, supported by a strong distribution capability.” differentiated services, since they have no fully agile with a competitive range of have existing MVNO markets, where legacy systems and no baggage of huge services and pricing. Lower operating cost the MVNA trend is now growing. New capital investment. This certainly gives a is always a life line, although the business MVNO markets like Eastern Europe, Latin competitive edge to the MVNOs compared model should be engineered based on the America, Middle East, Africa and unopened to the MNOs. Such service agility does focus areas to enable offering differentiated Asian countries are beginning to open up to pose a challenge on service stability but services with segment-based packages, MVNO business, and with that to MVNE this is manageable given the support of targeting age-based or ethnic segments, or and MVNA opportunities. l an equally adaptable technology provider, advertisement-based services. In today’s such as an MVNE (Mobile Virtual Network global market, MVNO can choose an Enabler). appropriate ‘home’ market to showcase the successful model and then replicate the The MVNE helps MVNOs to rapidly model in other territories. absorb change by enabling them to connect, collaborate and communicate With the rapid advancement in technology, better. The MVNE helps to address their the mobile handset has transformed from challenges in three key areas: business a basic device to a ‘pocket TV’, accessing Connect-World now on diversification, accelerating innovation data from the cloud. New MVNOs should and efficient operations. The MVNO make use of the core mobile service Facebook & Twitter must focus on the core service control capability from the MVNA who has a cloud and business management of their brand, and hosted telecom infrastructure that is Connect-World, the world’s leaving the mobile coverage to the MNO. already pre-integrated with multiple MNOs. foremost discussion forum for The key factors for a successful MVNO This saves time and cost for new MVNOs leaders in the ICT industry, is now business are the attractive products and and provides a hassle-free jump-start into available on Facebook and Twitter. sleek sales and marketing, supported their business. by a strong distribution capability. In a The world’s top ICT decision fast-changing technology world, MVNO The MVNO key asset is the ownership of makers express their opinions in should only base their value on these three the SIM card with the Mobile number, Connect-World. They use clear, core attributes. MVNOs who appreciate which is the visible component to the their core attributes and have a successful customer. Having control of the SIM cards, non-technical, English to discuss business model will become leaders and coupled with number portability, gives the how ICT helps shape regional even graduate into an MVNA (Mobile MVNOs full flexibility to switch MNOs and global development. The Virtual Network Aggregator) role, to (or MVNAs) if so wished. This gives an articles essentially examine the enable others to build new brands and enormous negotiation power to the MVNO. influence that ICT products and their own mobile services. services have on the way people The MVNO should also bring convergence live and do business. With To be a successful player and a market of services to its customers, and should separate editions for each of leader, some of the pertinent questions that have full flexibility on the chosen telecom the world’s regions, the reports MVNOs need to evaluate are: infrastructure to enhance their products frequently for customer retention. To highlight the most important ICT 1. How can we be agile and quickly achieve this, a good analytics tool is trends and issues influencing realign our organisation’s landscape to required that provides information on socio-economic growth. changing business requirements? the customer product usage. Customer 2. What are the known pitfalls of retention should be a high priority from Connect-World is now available diversification and transformation and what day one to help the MVNO to fight against to follow on Twitter (http://twitter. could we do best to avoid them? the churn. com/#!/ConnectWorldICT) and 3. How do we sustain our performance - Facebook http://www.facebook. what is our differentiation? As the Mobile market is becoming com/connectworld.ict 4. How do we create a culture of saturated in the developed countries, continuous adaptability that will help there is a huge opportunity in developing us sustain competitive advantage in a and underdeveloped countries. Mobile Also, it is still possible, for FREE, constantly changing world? convergence for the enterprises, including to directly access all past and 5. How do we align our offerings M2M, is another promising opportunity present Connect-World articles, strategically to bring more MVNOs on area for MVNOs. ICT Industry press releases, board without conflict of interest? eLetters, ICT News and more at US, Canada, Western and Central Europe, www.connect-world.com. In today’s world, the MVNO needs to be Russia, and some of the Asian countries
India 2012 n 17 Innovative MVNO business propositions
International MVNOs - New opportunities in a global niche by Rod Ullens, CEO and Co-Founder, Voxbone
European roaming charges for Voice, and even more - for data, are exorbitant. The European Commission is trying to cap them, but prices are still prohibitively high. This is an opportunity for a new kind of service providers - the global MVNO who offers an ‘international SIM card’ with low international calls. The MVNO business model is allowed in India since 2009, but has not thrived there due to the incumbents’ stronghold on the market and lack of DoT appropriate guidelines. However, global MVNOs could still provide a much-needed service to cost-conscious travellers in India. Further boost to global MVNOs is the Number Portability regulation which has been in force since 2011. Global MVNOs, with their innovative services and low prices may well bring about the ‘Fall of the Roaming Empire’..
Rod Ullens is CEO and Co-Founder of Voxbone, market leader in worldwide geographical, toll- free and iNum® telephone numbers. Voxbone enables Internet communications services providers, wholesale carriers and mobile and fixed national operators to extend their network reach internationally, rapidly and with limited costs. Voxbone delivers high-quality inbound communications from more than 50 countries and more than 4000 cities, using its own private global VoIP network - the world’s first and largest backbone dedicated to voice-origination services.
Before founding Voxbone, Mr Ullens provided advice, training and seminars to European carriers, such as Belgacom mobile, KPN, France Telecom and Orange, as well as several European governments.
Rod Ullens holds a B.S. in telecommunication engineering from the University of Louvain in Belgium.
Ever since the first cellular networks were set business is very lucrative and provides high proportion, considering that the production up in Europe, there was only one direction for margins for voice and data traffic from the cost for the operators is less than one the development of retail prices. To the delight average mobile subscribers. For a long time EURO per gigabyte. The European of consumers, the average price per minute customers were led to believe that roaming commission is proposing a retail cap of on a cellular network has been coming down charges were not under the control of their 900 EURO per gigabyte from 1 July 2012 constantly over the past few years. The often operator and the excessive costs had to be and 500 EURO from 1 July 2014. This is a quoted declining margins for operators seem to accepted. Subscribers simply added the very moderate retraining approach and an have an effect on all business areas, with one additional fees to their holiday budget or indicator that the roaming price gouging exception - roaming charges are still extremely the costs of their business trips without by the big mobile operators is not going to high across Europe. Nowadays frequent much argument. change any time soon. Consumers who are travellers need to have an eye on their roaming looking for transparent and flexible phone charges not only for voice minutes but also, This attitude is now changing, especially plans that are not restricted by geographical and especially, for data traffic. since the demand for data traffic keeps on location won’t find those in the standard growing. Smartphones and new mobile service portfolio of the established Traditional operators usually don’t provide devices such as tablets are driving up operators. In order to assure affordable and attractive roaming plans for a simple the requirements for high bandwidth and predictable voice and data charges at home reason. It is not because frequent travellers large data volumes. However, the current and abroad, they will have to look beyond are a niche market that doesn’t justify roaming charges in Europe of up to the standard mobile phone contracts. customised offers. It is because the roaming 3000 EURO per gigabyte are way out of
18 n India 2012 Innovative MVNO business propositions
The MVNO roaming market using mobile phones abroad. Since then, approach towards new routing strategies they have been developing numerous VoIP including the use of IP calling. This Mobile Virtual Network Operators applications for different platforms, among poses a serious threat to the international (MVNOs) have increased their market share which is the world’s first VoIP application roaming business of the established mobile massively over the last couple of years. for the iPhone (launched in 2008). The operators. It remains to be seen whether New business models, creative marketing major advantage of their applications was they can shift their strategies and defend strategies and competitive rate structures a two-pronged policy. They enabled cheap their grounds on the roaming market. are the foundation of this ongoing success. international calling over 3G and WiFi data Either way, there will be a further increase While their customer base has been networks as well as through traditional of competition and a decline of roaming growing continuously, they usually were GSM calls using an international network revenues. For the consumers - it is about not considered a threat to established of local access numbers. The Tru SIM saw time for this to happen! l operators. Besides, the traditional mobile the light of day in 2010 and came along operators would always receive their with a re-branding campaign of the service cut of the revenues for providing the that was formerly known as ‘Truphone’. infrastructure. In recent times, however, we With innovative advertising campaigns see a new kind of MVNO on the rise, the about the ‘Fall of the Roaming Empire’ on global MVNO. Companies like Maxroam in-flight magazines, Tru is aiming straight and Truphone are addressing a market that for their international target markets. Other has been neglected and overcharged by companies that are active in this niche the established players for a long time: the market are Maxroam, Yackie Mobile, Seven roaming market. Telecom, and PicCell Wireless.
The ‘International SIM card’ has become Global MVNO for India Connect-World now on the buzzword for price-conscious frequent Facebook & Twitter travellers. MVNOs are gearing up to it. Global MVNOs offer their services There are several reasons why they are very to consumers all over the world and Connect-World, the world’s likely to succeed in this: are also accessible from countries foremost discussion forum for that do not have a developed national leaders in the ICT industry, is now − Smaller operators that don’t have their MVNO market. India has opened available on Facebook and Twitter. own network infrastructure are in a good its telecommunication market for position to negotiate roaming agreements in MVNOs in 2009 but the market is still different countries with different operators dominated by the traditional wireless The world’s top ICT decision and they can adapt more easily to the carriers. These operators are highly makers express their opinions in requirements of their partners. They have competitive and the per-minute fees Connect-World. They use clear, more room to prioritise the interests of the don’t leave much room for arbitrage, non-technical, English to discuss consumer over the interests of the company. a challenge for operators that don’t how ICT helps shape regional − Many MVNOs are startup companies possess their own infrastructure. and global development. The with the ability to change and with articles essentially examine the a strong drive for innovation. Flat Another important factor is mobile number influence that ICT products and hierarchies and modern structures within portability for Indian mobile phone users. these companies lead to new services Phone numbers are very sticky and without services have on the way people and business models. They are also more the option to port a number from one live and do business. With likely to embrace and implement new operator to another, it is very difficult for separate editions for each of technologies such as Voice-over-IP. new providers to lure customers away from the world’s regions, the reports − International SIM cards are a new the established players. Mobile number highlight the most important ICT concept for frequent travellers and portability has finally been made available trends and issues influencing globetrotters. Time-proven marketing in India in 2011 and will certainly help socio-economic growth. strategies from the established players are to make the market more attractive for not effective in this niche market. MVNOs local MVNOs. In the meantime, Indian Connect-World is now available have more room to experiment with new residents that travel frequently abroad ideas since they are not aiming to protect could still make substantial savings by to follow on Twitter (http://twitter. legacy revenue streams. taking a second mobile subscription from com/#!/ConnectWorldICT) and − Additional SIM cards are more likely a global roaming service provider. Most of Facebook http://www.facebook. to be accepted by the consumers as the the above-mentioned service providers also com/connectworld.ict penetration rate of mobile devices keeps on offer their services to the Indian market. growing even above the mark of 100 per Also, it is still possible, for FREE, cent in Western economies. Tablets, laptops, MVNOs are on the rise all over the to directly access all past and smartphones and dual SIM phones can all be world and the market growth opens up present Connect-World articles, equipped with additional SIM cards. opportunities for VoIP providers of all ICT Industry press releases, kinds. The competitive advantage of global ‘Tru’ was founded in the UK in 2006 and MVNOs besides their commercial position eLetters, ICT News and more at started off to challenge the conventions of and their marketing strategy is the open www.connect-world.com.
India 2012 n 19 Innovative MVNO business propositions
Active posters: the physical storefront for digital goods by Jeffrey Fraser, Sr. Director, mCommerce, & Mobile Ad Innovation Group XIUS
An area of growth for MVNOs is the up-coming mobile ‘wallet’ applications, such as enabled by Smart Posters, based on NFC (Near Field Communications). The Smart Poster uses NFC technology in both passive and active mode. The passive mode enables users to read a tag into the handset, giving product information or coupons. The active NFC poster can read information from the handsets and continue to interact with the user - initiate a transaction, download files etc. Such NFC facilities can increase the store revenues per square footage, reduce waiting time at the till, enhance accuracy and speed of processing bills and payments and extend the reach for promotions that may entice users to buy.
Jeffrey Fraser currently serves as Senior Director of mCommerce & Mobile Ad Innovation Group, for XIUS in Woburn, MA. Mr Fraser came to XIUS from UK-based Martin Dawes Systems. Previously, Mr Fraser was Vice President, Sales & Marketing for Virtual Back Office Software (VBOS), a Boston-based billing software company servicing telecom carriers. As an executive with the e-KONG Group (HKSE: 524) from 1999 to 2004, Mr Fraser was instrumental in developing and operating enhanced voice and data services in Hong Kong, Singapore, and the US. Prior to joining e-KONG, Mr Fraser held several positions at UNIFI Communications. Among his positions were Operations Specialist, Greater China; Manager of Product Support, UNIFI.eFax; and General Manager, UNIFI Taiwan.
Jeffrey Fraser graduated Magna Cum Laude from Boston University with a BA in International Relations.
Introduction What is NFC? model, using your new mobile wallet. The process is similar throughout the industry: Mobile payment technology is an expanding NFC is a technology that allows a The user has an NFC-enabled device field, and Near Field Communication (NFC) device to share and access data over a that can be used to trigger the payment is an emerging solution that may represent short distance to simplify a transaction. mechanism. This ‘wallet’ resides either an improvement over conventional payment With the support of both handset on the mobile device or in the ’Cloud’. processes. Retailers are using technology manufacturers and telecommunications During the buying process, the user taps the to solve challenges and make the buying carriers, retailers are able to use mobile device against the POS device, creating a experience enjoyable in many ways. For devices as a payment mechanism for transactional link and completing the sale. example, retailers have applied technology to goods and services. banking, security, advertising and sales, all to According to estimates from IMS Research, facilitate how consumers ‘go to market’. Now, The primary business driver for NFC the number of worldwide locations the introduction of Smart Poster technology technology is mobile commerce. The focus accepting NFC payments will grow to can address some of the business obstacles that for mobile payments is Point of Sale (POS) more than 12.5 million by the end of retailers are facing, such as yield management, at the retail level. According to Gartner, 2013. Operators are launching their own line busting and advertising. NFC has the the mobile payments industry hit US$32B versions of mobile wallets, thus making ability to change the traditional retail business in 2010, and that number is expected to more services available for purchase via transaction completely. rise to US$245B in 2014. The current user a mobile device. For example, with Airtel experience is based on a ‘tap-and-pay’ Money, Airtel (India’s number one network
20 n India 2012
Innovative MVNO business propositions
operator) subscribers are able to use their interaction with the consumer, rather than problems. A Smart Poster can be used as handsets as a mobile purchasing system. leaving it to the clerk. a physical storefront for ordering/selling physical or digital services. A Smart Poster Is mobile payments a clear business driver Yield management that could be used as a touch point to since nothing is really ‘broken’? purchase transportation tickets or movie The National Association of Convenience tickets, could also be configured to take food Some contend that the NFC mobile payments Stores estimates that convenience stores and drink orders. The flexibility of a Smart model described above is trying to fix average nearly 2,700 sq ft. in size, with Poster would enable it to go beyond open something that is not broken. That said, the average annual revenue per store ranging retail environments to closed environments NFC-based payment initiatives are under from US$1.1 to US$2.2 million and average like corporate offices or hospitals. For way and, as indicated, very influential players revenue per sq ft ranging from US$366 to example, a hospital deploys Smart Posters at are participating. At the same time, there are US$458. The challenge is to fit higher margin various strategic points inside the hospital to aspects of the payment process today that goods into a smaller space to enable revenue enable professionals to order food in advance are ‘broken’ and that NFC can fix, without maximization. Smart Posters can ’sell’ without having to wait in a line. Once the waiting for the rest of the ecosystem to catch digital goods like prepaid recharge, debit order is ready, staff can go to the cafeteria to up. They involve operating costs and various card recharge and other prepaid products collect the food. obstacles that the IT teams expect wireless and services, increasing retailers yield per technology innovation to eliminate. Some square foot. A market research firm based Extending reach of the solutions being rolled out today are in Maynard, Massachusetts estimates that getting a clear definition of how wireless the total Prepaid Market size in 2012 is now Retailers wait until the consumer arrives at services can address existing problems. For forecasted to reach US$549.7 billion (Source: the POS terminal or after the consumer makes example, mobile advertising has evolved into Mercator Advisory Group’s Prepaid Market a purchase to offer discounts and coupons. a very personal and targeted delivery channel Forecast 2010 to 2013). This is too late as the purchase decisions are for reaching consumers. made and the transaction is already over. A Not only will a Smart Poster bring in new Smart Poster will enable retailers to offer Smart posters: The other NFC business case revenue streams from new services to the coupons and discounts to consumers in retailers, it will also help them tackle existing advance of the transaction, encouraging them An NFC Smart Poster is a touch point problems. With a Smart Poster the retailers to make additional purchases. that carries a readable NFC tag or an NFC can now store 500 700+ prepaid SKUs (Stock reader. Smart Posters can be either passive Keeping Units) instead of the previous 25-50 A grocery chain could have an Active or active. Passive Smart Posters include an SKUs. This increase of stock will drive traffic Poster co-branded with a mobile network embedded NFC tag to be used in conjunction to the stores and lead to increased revenues operator (MNO). For every US$100 worth with the end-user’s hand-held reader. There and profits. Second, a Smart Poster is of groceries purchased, the consumer can are many different types of passive posters. customisable. Retailers can increase visibility redeem US$1.00 of MNO currency. To A magazine page could serve as a passive of certain high-margin, low-volume digital redeem this, the consumer merely has to walk poster, as could a billboard. In the realm of goods such as online game recharges. Third, to the poster and tap their NFC tag that has Near Field Communication, the NFC tag since products bought using a Smart Poster been linked to the consumer loyalty account stores the pertinent information until such have to be activated either during purchase or at the grocery chain. The Active Poster then time that the NFC-enabled mobile device post purchase, the instances of theft and fraud prompts the consumer to direct the US$1.00 can read and emit the tag. This information will decline to practically nothing. An Active (or total amount) of stored currency toward could be in the form of a redeemable coupon Poster could deliver five additional square the purchases made by the consumer. A more or a website URL. feet of retail space to a convenience store, compelling conclusion would be that the providing these stores with an additional stored dollar value is offered to purchase a The advantages for the business owner make US$1,830 to US$2,290 in annual revenue. virtual product, such as downloading music a strong case for the technology. Everything or a video. from lower cost of entry compared to other Line busting means of communicating to customers, or Conclusion the relative ease of implementing the service, Long lines and mixed-up orders distress have a positive impact on the business retail business. They diminish customer Mobile payments are now arriving on the user and the consumer. The explosion of satisfaction and have a direct effect on scene quickly. The full scope for consumers capabilities is in the offing, and critical mass revenues and profits. There’s an industry and retailers is yet to unfold. However appears to be one or two years away. maxim that for every seven-second there are many existing issues currently reduction in drive-through service time, facing retailers that Active Posters can solve Active Posters do it in reverse. The poster sales will increase one per cent over time. today. Smart posters usher in a new era of is embedded with an NFC reader and the In a June 2011 QSR Magazine focus group, interactivity for retailers and offer increasing user has the NFC tag. However, the Active accuracy is cited as the most important revenues for Mobile operators. l Poster doesn’t just pass information to the consumer demand by quick service consumer. It allows the consumer to perform restaurant consumers, even over speed. a transaction, make a purchase, recharge an account, redeem a coupon, or even request To address this, businesses are looking at a meeting. The self-service experience potential solutions. Smart Poster technology gives the brand or retailer control over the could be the answer to speed and accuracy
22 n India 2012 Innovative MVNO business propositions
MVNO - Find your niche and make it count! by Vikas Bansal, Director, Carrier Sales, South Asia and Middle East, Cable&Wireless Worldwide
Since MVNOs (Mobile Virtual Network Operators) do not focus on building their own infrastructure, they can explore innovative services in special niche markets. Originally a Scandinavian idea, it now has more than 1000 MVNOs in operation worldwide, but emerging economies are lagging behind. India is still waiting for the DoT final verdict, while it considers the merits of the MVNO model particularly for rural areas. Regardless of the geography, the secret for MVNO sustainable success is, no doubt, in finding the right niche market and addressing it with the right solutions. Such lasting solutions are often based on collaboration, such as the Future Group and Tata Teleservices who launched Talk24 in India,
Vikas Bansal is the Director for Carrier Sales (South Asia and Middle East) at Cable&Wireless Worldwide. In this role, he is responsible for strengthening Cable&Wireless Worldwide’s wholesale business and managing relationships with leading carriers across South Asia and Middle East. Cable&Wireless Worldwide has operated in India since 1995, providing enterprise and carrier telecommunication solutions including dedicated services, high-quality managed security services, and hosting to the largest users of telecoms services across the globe. In India alone, the company operates with more than 150 customers in the BPO, IT, BFSI and other key verticals.
Vikas Bansal has been with C&W Worldwide for more than ten years. He played a lead role in setting up the Indian entity of C&W and securing the international long distance (ILD) and national long distance (NLD) licenses and the associated funding. Vikas Bansal has been certified “Corporate Director” by World Council for Corporate Governance, UK. An accomplished speaker, he has delivered keynote addresses at many seminars and conferences. Prior to taking the current sales role, he headed the presales team to provide solutions to Enterprise and Carrier Customers in India and South Asia. He has also worked as a commercial partner manager and as a solutions consultant in previous roles. Amongst his many achievements, he was responsible for growing the business in India and expanding to other emerging markets including Srilanka, Pakistan and Bangladesh. He was awarded ‘Outsourcing Sales Manager’ for 2009-10 and was named as the ‘Best Employee of the Year’ for 2006-07. Before joining Cable&Wireless, Mr Bansal worked with HCL Comnet, Global E-Commerce Services and Punjab Communications in various roles.
In 2008, just when it looked like nothing they approach these companies and ask to not distinguish any significant differences in could go wrong with the Telecommunications buy Minutes Of Use (MOU) to sell to their network performance, yet offer some special industry, the ‘R’ phenomenon reared its ugly customers. The idea takes care of the one thing differentiation to their customers. head. While Denmark was the first to sniff that every company fears during a recession - Recession, the world soon caught a terrible Capital Expenditure. This business model also So who took the plunge? cold. World markets trembled, investments dispenses with the time-consuming task of ceased, transformational projects were thrown rolling out extensive radio infrastructure. Companies across diverse industries saw into the back burner. While chaos reigned, the opportunity in the MVNO space. Why one industry looked at this cyclic phase as MVNOs identify a specific market segment else would a British multinational grocery an opportunity - to lie low and strike back and build a brand which appeals to this niche retailer as Tesco, or Mr Branson’s Virgin, when the upswing invariably comes. This market; for example, fun-loving young play on this pitch? While Virgin Atlantic is the story of the Mobile Virtual Network population, Bengali speaking population in the Airlines used its market recognition and Operators (MVNOs). UK, People from a certain ethnic background brand positioning for selling directly to its etc. Some MVNOs deploy their own mobile airline customers and others, Tesco Mobile So who are the usual suspects? IN (Intelligent network) infrastructure in focused on value-for-money deals. Owing order to facilitate the means to offer value- to the stupendous success of their service, Simply put, an MVNO is a mobile operator added services. In this way, MNVOs can treat Tesco Mobile launched services in Hungary that does not own anything except bright ideas. incumbent infrastructure such as radio network this February. While the Mobile Network Operator (MNO) as a commodity, while they offer their own considers a robust network infrastructure and advanced services, based on exploitation of Closer to home in India, the Future Group and a spectrum licence as crucial assets, MVNOs their own intelligent network infrastructure. Tata Teleservices Limited launched Talk24 that scoff at the idea of building a network. Instead, It is important to ensure that customers do encouraged users to talk more on the TTSL
India 2012 n 23 Innovative MVNO business propositions
network, and shop more at the Future Group According to last year’s report from Informa network in rural areas that can be used by extensive retail footprint across the country. Telecoms and Media, the global MVNO multiple operators. While the Indian market market will reach 186 million subscriptions awaits the final verdict from the government ‘Show me the money?’ by the end of 2015 with North America and on regulations governing MVNOs, companies Western Europe still accounting for the vast vying to get the first-mover advantage are Although low capital costs would probably majority. These two regions will remain finding innovative ways of addressing the be an important reason to plunge into MVNO the largest MVNO markets in terms of the MVNO needs of the market. business, the inherent benefits make you stay number of subscriptions and players and will in it for the long run. This is a clear win-win- also continue to top the ranks in terms of What’s the success formula? win situation for MVNOs, MNOs and end MVNO penetration. customers. While MNOs get to sweat their With better regulation, increased competition Telecom assets further and broaden their and lower costs, the key to a sustainable customer base at near zero cost of acquisition, business is to find a niche market. While MVNOs benefit from low capital expenses and ethnic MVNOs have found great success sustainable medium profit margins. Customers in the UK (MVNOs account for 17 per cent gain from a host of value-added services of the mobile market in the UK), the key to that come with no distinguishable change in unlock diverse markets such as India might network performance. be in offering unique value-added services. MVNOs are well-positioned to serve niche Often the margin realised from MVNO markets and sub-segments more effectively customers is actually higher than the margin Fig. 1: Global, number of MVNO launches, by than larger operators do. While this gained from the average MNO customer. region, 1991-2010 positioning is an advantage, to be successful There is also the benefit of making the market Source: Informa Telecom and Media June 2011 MVNOs must excel across several other more efficient on the cost side and expediting important factors, including: the adoption of services on the revenue side. The number of MVNO launches peaked in Most regulatory bodies across the globe are in 2005-2007 and the recession saw the industry • generating incremental revenue favour of MVNOs as a means of encouraging in a state of limbo with minimal launches • extending brands to a niche market in a competition, which would ultimately lead across the world. However, Industry watchers timely manner to greater choice and lower prices. A virtual predict a spike in launches in the next couple • differentiating from the competition via operator, as reasoned by the authorities, could of years. value-added services set up quickly and cheaply, and provide an • establishing operational capabilities. additional revenue stream for its licensed MVNO in emerging markets host. With increasing acceptance, many Concluding remarks incumbent mobile operators evaluate the While established MVNO markets will drive opportunity to offer supplementary MVNO growth in this sector, emerging markets are While the basic MVNO model has now services of their own. Existing mobile also warming up to the idea of MVNOs. evolved into many variants and spread well operators can use their established branding, Let’s examine two key markets in our part beyond its European roots, the key to success service knowledge and supplier relationships of the world, Saudi Arabia and India. Saudi is to find a special niche market. There are to complete against independent MVNOs. Arabia’s telecommunications sector is set to MVNOs for non-consumer markets and those get a major stir this year, with up to three new that specialise in M2M data traffic. Many have A close analogy to the MVNO across a operators entering the mobile phone segment a highly specific ethnic or cultural specialism. different industry could be co-branded credit via the MVNO route. According to the Saudi There are nearly fifty MVNOs that get most of cards e.g. American Express Kingfisher Communications and Information Technology their business from mobile broadband services, credit card in India. The financial transaction Commission (CITC) - which serves as the not voice... so find your own niche! infrastructure is managed by American kingdom’s telecommunications regulator - Express while Kingfisher uses its brand to get three mobile virtual network operator licences With mobile density already quite high in additional customers to American Express. would be issued in 2012. The move heralds emerging markets such as India, the next This generates revenues for Kingfisher and a different approach for the Saudi telecoms phase of growth in the mobile industry gives additional value to customers via free industry, one that is seen as marking a new will come through innovative services. air miles that can be used by customers to get era in competitiveness and maturity instead Due to their niche play, MVNOs have a free Air tickets on Kingfisher Airlines, or a of focusing on rolling out infrastructure. great opportunity to succeed in this new host of other benefits. One could probably call Currently, Oman is the only Gulf state that has world order. The convergence of media, it the CCVNO (Credit Card Virtual Network licensed MVNOs in operation. entertainment and telecommunications, along Operator). The card squarely focuses on a with increased network performance triggered niche segment of frequent travellers, who are In India, the Telecom Regulatory Authority by 3G and LTE technologies, will open many usually the high-spending individuals. of India (TRAI) has asked the Department of new dimensions and will create new business Telecommunications (DoT) to allow rollout opportunities for MVNOs. Origin of MVNO - facts and figures of mobile virtual network operators in the national telecom policy, which is expected to The opportunity is present. The future is ready. The ever-innovative Scandinavians gave us be finalised in April this year. The DoT is also The only question is whether you want to grab the first MVNO in the 1990s. Today, there are considering the introduction of the MVNO your share of the pie. l almost 1000 MVNO operations worldwide. model to set up a shared wireless broadband
24 n India 2012 Getting more from the infrastructure
Defining service quality management needs for mobile operators by Gregg Hara, Vice President of Business Development, Centina Systems
When Voice is just another app and new ‘killer’ apps are instantly available on all networks - the only differentiator is the quality of customer experience. As a result of bad service experience, most users ‘churn’ without any explanation. To this end, smart service assurance system that enables real-time monitoring is critical. It must have easily customisable KPI and KQI that can be quickly adjusted to be viewed on the ‘dashboard’ as and when needed. A dynamic topology map linked to GIS provides real-time monitoring of the ever-changing network. Linked workflow and automatic notifications enhances responsiveness in focus areas and high-value customers. Thus a service assurance system is an essential tool for differentiation - which is key in attracting and retaining customers.
Gregg Hara is Vice President of Business Development in Centina Systems, having joined it in 2009. Gregg Hara has over 20 years in the telecom and OSS software space. He takes the initiative of defining new markets and establishing relationships with key service providers and vendors. Prior to Centina Systems, Mr Hara was Senior Director of Sales for Sigma Systems and earlier, with TeleGea Systems. Mr Hara started his career at GTE and was one of the original members of OSI. Later he served at Micromuse in various roles of solution delivery, sales and business development of Network Management and Service Assurance solutions.
Gregg Hara holds a bachelor’s degree in Electrical Engineering from MIT in Cambridge, MA.
The Indian communications market is a an advantage by having a technology or phone or mobile operators to win and retain subscribers. As highly competitive one for operators. With functionality that others do not. Once a ‘killer-app’ service offerings grow and customer-base increases, near complete saturation of service providers, takes hold, it will be available on multiple phones problems such as slow download speeds, delays and CSPs (Communication Service Providers) and operating systems and all service providers will dropped calls occur more frequently. must compete fiercely in the market, quickly offer it. The real differentiator for the consumer will offering new multi-channel and value-added be the service quality and customer experience. To maintain competitiveness, mobile operators must services, and effectively assuring those services improve the quality of the subscriber experience. for customer experience. They must do this Today’s customers are extremely savvy. They are According to statistics, the majority of end-users without eroding revenues and profits. Customer ‘wired-in’ and knowledgeable. The Internet has who choose to switch operators do so because retention hinges on providing quality service at a made it possible to quickly research and access they are not satisfied with the service experience. competitive price. Dropped calls, slow download information to make informed decisions allowing Bad news always travels faster than good news speeds, poor call and video quality all affect the information and knowledge to travel faster than and unsatisfied customers will relay their bad customer’s perception and, if not improved, will ever before. Without any fancy metrics, algorithms experiences to many more people than their good increase customer churn and reduce revenues. and performance-tracking systems, consumers experiences. Only a small minority will try to work know which provider has the best service in each with customer support to resolve their problems. On the edge of a wireless revolution with market. Information is free and readily available - Most will simply switch to a new carrier without broadband everywhere (3G and LTE) and with the and consumers will use it to choose their carriers. giving their service provider the opportunity to keep relentless growth of competition, service provider Service providers must make it a priority to deliver them as a customer or understand their concerns. differentiation is focusing on Service Quality and the highest quality customer experience in order to For these reasons, customer experience will Customer Experience. Whereas voice used to be continue to grow and increase market-share. determine the winner in each market. the main or only function of a mobile phone, today voice is just another app. With the proliferation As mobile networks evolve, voice calls will be With the variety of services and functions a user of the iPhone, Android and other smartphone managed like other data services such as WAP, can access from a smartphone, today’s operators operating systems across voice services, myriad of IM, MMS, real-time multimedia, mobile email must put an increased emphasis on monitoring real-time services and future functionality we can’t and texting. The younger generation relies more performance metrics. To determine and assure the even imagine yet, the customer experience will take on texting, Facebook and Twitter rather than voice customer experience, Key Performance Indicators centre stage in differentiating one service provider communication. Customer experience of these (KPIs) and Key Quality Indicators (KQIs) must from another. Service providers no longer have various mobile data services is a key influencer for cover all these services on both radio and IP domains
India 2012 n 25 OCTOBER 17-19, 2012 Smau Milan 2012
The Most Important International ICT Exhibition and Conference in Italy
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www.smau.it www.expocomm.com/italia Getting more from the infrastructure
- conversational voice, live streaming video, real-time Real-time visibility also provides the ability A successful workflow system is one that can be gaming, email, texting, MMS and any other service. to identify failures between gateways, trace maintained and administered without extensive registrations in the IP domain and track training and advanced programming expertise. The This, in many ways, is an oversimplified statement. authentication. Solutions with real-time tracing Workflow system should be easy enough for NOC How can today’s operators deliver the best customer capability enable operators to determine why administration personnel to use so that the system can experience and how can critical assurance KPIs subscribers cannot access e-mail, identify the cause be adapted on a day-to-day basis to the ever-changing make the difference for these operators to stay of download failures and isolate problems with needs of the business and supported services. competitive in today’s market? The answer is that traditional intelligent network services like calling communications service providers must effectively name and number portability. Real-time reports and dashboards and proactively monitor and track service quality and customer experience. They must be able to, The Service Assurance solution must also allow for Monitoring a large, complex, ever-changing through their assurance systems, monitor alarms performance and service KPIs to be easily customised network can quickly lead to information overload. and performance KPIs from all systems and devices and configured with the ability to apply multiple, It can delay fault fixing as users try to access deployed in today’s mobile networks, across all dynamic thresholds to the data so that performance- the necessary information to resolve problems. domains: radio, transmission, applications, and IP. impacting trends can be tracked and monitored. Maximising access to information so that users can quickly tap into relevant data is critical to ensuring There are also some key issues that CSPs must take The key to profitability in delivering multimedia the optimum customer experience. Giving the users into account. These include: services across converged networks is having access the ability to essentially create and configure their to data that allows the carrier to understand the quality own User Interface, in the form of configurable Real-time visibility of the subscriber experience. To maintain customer Dashboards, allows the operator to have all the Complete, real-time visibility and access to satisfaction and ensure the successful monitoring of information they need at their fingertips. historical data are essential to effective Service new services, providers need tools that track service Assurance. As networks converge, it is critical to availability and reliability. Equipped with real-time A successful Service Assurance solution should have end-to-end visibility to pinpoint anomalies, data, operators can identify the source of service have the ability for Top-N Reports, Interactive- suppress symptomatic alarms and understand the disruptions before customer complaints arise and KPI and KQI charts and trends to be added to customer experience. This visibility requirement revenue is lost. Real-time statistics for each subscriber dashboards at the click of a button to track any applies at the granular level of interfaces and are critical to understanding service efficiency and the information deemed necessary at that moment devices, but also to the end-to-end services and customer experience. based on the current state of the network. graphical, holistic views of the network. Configurable automations and notifications When network performance degrades or worrying Most service providers do not employ a dynamic trends are identified, time is of the essence and topology map of the network because of the manual No matter how advanced and customised a Service spending excess time trying to find the information effort required to keep maps up to date. Networks Assurance solution is deployed, there are always you need to diagnose and resolve a problem will change on a daily basis. In order to enable network alarms or trends that will be missed if the service impact network performance, extend downtime or maps to reflect the health of the network accurately, provider is relying on company personnel to cause service degradation. Having the ability to easily it is necessary to have a Service Assurance topology manually identify all potential issues. In addition, it configure and view any report, map, alarm view map that can automatically update itself as the is not feasible to expect that all network operations or performance metrics on a ‘single pane of glass’ network evolves. This can be done if the Service personnel will know the appropriate business can have a dramatic impact on improving network Assurance mapping solution leverages GIS processes to implement for all situations. Because performance and, thereby, the customer experience. (Geographic Information System) latitude/longitude of this reality, it is necessary for a successful Service coordinate systems. Most service providers have Assurance solution to have Workflow Automation While it’s impossible to predict the future of mobile GIS data in their physical mapping or CAD and Notifications integrated into the fault and technology as a whole, one thing is certain for the (Computer Aided Design) systems, or at the very performance monitoring system. market in India: it will go on evolving and will least have address information that can be converted continuously require support for new services, to GIS, and this can be imported or synchronised Workflow systems allow the Service Assurance applications and technology. As competition increases, with the Service Assurance solution to provide an solution to automate the implementation of business growing revenue and customer retention will become automatically updating topology map view that processes and protocols in real-time as issues arise more difficult. The best way to affect customer shows the health of the network in real-time. or trends are discovered. Here are some examples of retention is to improve the customer experience. workflow automations that could be enforced: Real-time visibility also applies to performance • When a particular pattern of alarms is In order for mobile operators to make a dramatic data. Performance data and KPIs are critical to the identified at a particular time of day, an email and/ improvement in customer experience, they need proactive monitoring of the network. Visibility or SMS notification can be sent out by the Service to be able to quickly and effectively monitor the helps to identify trends and patterns of usage and Assurance system to make sure potential customer- experience regardless of network evolution and bandwidth requirements for capacity planning. Real- experience impacting events can be resolved. identify impacts and trends to allow them to time performance data can also be highly effective • When an alarm or performance threshold is take swift corrective action as needed. The best in troubleshooting active problems. A Service crossed on an interface for a high-value customer or way to do this is to adopt a Service Assurance Assurance solution must have the ability to monitor high-traffic node, change the priority of the event to solution that proactively monitors customer performance KPIs in real-time on-demand. As ‘Urgent’ and send an SMS to the NOC supervisor. experience and checks the health of services, customer service personnel investigate an escalating • If a transmission alarm occurs on a core reducing the time it takes to support new services issue or failure, being able to poll a device in real-time router and it is during Shift 1, send an SMS to the and technology. More than ever, it’s important for its ongoing performance KPIs can be essential in transmission group and open a trouble ticket - to recognize Service Assurance as critical to determining the cause of a customer-impacting event. display the ticket number in the alarm. managing the customer experience. l
India 2012 n 27 Getting more from the infrastructure
Mobile data - a smart Approach to traffic management
by Manoranjan Mohapatra, CEO, Comviva
India is witnessing unprecedented growth in Mobile Internet traffic, particularly by first- time Internet users who have no access to PCs. This explosive traffic growth, just as it is in the West, is due to bandwidth-intensive and quality-sensitive video-based traffic. This compels service providers to re-assess the balance between Capex to ARPU and between QoE (Quality of Experience) to churn. With the right strategies, greater network efficiency can increase capacity without the high costs of augmenting the infrastructure. Service providers now realise that they must manage the ‘data pipe’. They should implement MOM (Manage, Optimise, Monetise) strategy to improve their end-to-end service delivery, with a set of integrated network management tools.
Manoranjan ‘Mao’ Mohapatra is Chief Executive Officer of Comviva. Mr Mohapatra’s career has been dedicated to the development and deployment of innovative software communications solutions in rapidly growing markets, transforming high potential businesses into true world-beating organisations. His track record for enabling innovation, his deep knowledge of telecom-related technology and his wealth of experience in a range of operational and marketing roles provide a strong leadership base from which to enhance Comviva’s position as the global leader in providing mobile solutions beyond VAS in the emerging markets.
Prior to joining Comviva, Mr Mohapatra was President and COO at Aricent, where he enjoyed a 15 year career and was instrumental in building the company from a relative start-up to a globally recognized brand, with over US$300 million in revenues. At Aricent, Mr Mohapatra led teams in the areas of R&D, product management, operations, and sales and marketing, gaining hands-on experience and in-depth knowledge of the software and communication industries and honing his leadership talent.
Before moving to Aricent, Mr Mohapatra began his career as a core member of the Center for Development of Telematics (CDOT), where he made a significant contribution to research and development in telecom switching.
Mao Mohapatra holds a Bachelors degree in Electronics and Electrical Engineering from the Birla Institute of Technology and Science, Pilani.
’Mobile Data’ is one of the most discussed in 2009. These high-growth rates indicate Catalysts for this tremendous growth topics globally, especially among telecom that the demand for wireless data market include a relative lack of fixed Internet service providers in emerging markets. is evolving rapidly from relatively modest infrastructure, the growing highly According to a recent global research report levels in many emerging markets. With available 3G networks, accelerated published in Nov 2011, the total number this demand comes increase in the data adoption of smartphones and the influx of of mobile internet users would grow 25- revenues. Almost all operators report high- application stores. Owing to this explosive fold from 2010 to 2015, reaching 788 growth in revenues of up to 25 per cent. For data traffic, telecom service providers are million mobile-only Internet users, with example Vodafone in the annual report has striving to provide a high-performance Asia Pacific accounting for over half of stated that their data revenues have grown network to deliver rewarding user these mobile-only Internet users. Average at 26.4 per cent Year on Year. The data experience, encourage long-term customer Smartphone usage doubled to 79 MB per ARPU contribution has increased to 13 per loyalty and support market differentiating month in 2010, up from 35 MB per month cent of the total operator revenue in 2010. service offerings.
28 n India 2012 Getting more from the infrastructure
Sustained growth in traffic volumes has the the need for data plans that are scaled to already experienced in mobile data and still potential to overwhelm network resources, suit their market demands. expected in future, the solution should offer introduce higher latency on the network capacity scalability and added functionality and negatively impact the overall quality Adopting effective traffic management with minimal disruption to live service. of service delivered to subscribers. The techniques and suitable data plans will sheer volumes of data has also been due to enable service providers to control Mobile operators must now prepare for the varied mix of traffic transiting through their data pipe effectively and offer the coming surge in data traffic. There the network, which has altered the current differentiated service and charging is a number of distinct opportunities approach that service providers have taken offering. The Manage, Optimise and for them to deliver greater operational to manage this growth. Wireless networks Monetise (MOM) strategy will address efficiency, commercial agility and better must scale even further to support delay- user expectations for an enhanced customer experience by choosing the sensitive, real-time multi-play services Internet experience, provide the most effective strategy. l such as interactive gaming, Mobile TV flexibility to quickly launch new service and streaming video which are bandwidth- plans, simplify charging and increase intensive applications. penetration, thereby having an overall impact on the increased ARPU. The profitability of telecom service provider’s data operations depends on The MOM strategy for mobile data how they respond to the explosive growth platforms can offer a variety of solutions in mobile data traffic. Simply augmenting in order to overcome the prime concerns of the network infrastructure is a capital- service providers: intensive proposition. As competition is Connect-World now on fierce and there are limits to consumer • Service Management: granular, real- Facebook & Twitter data service charges, operators are faced time control and allocation of bandwidth with a trade-off between the CAPEX-to- resources by defining and enforcing a broad Connect-World, the world’s revenue ratio and the quality of experience set of policies at subscriber, service, device foremost discussion forum for - unless they handle traffic more and protocol levels, based on network intelligently and smartly. status to manage and optimise use of leaders in the ICT industry, is now existent capacity more effectively. available on Facebook and Twitter. So far, service providers have depended on niche vendors offering point solutions, • Service Optimisation: optimises diverse The world’s top ICT decision addressing individual problems, traffic streams using tools such as caching, makers express their opinions in which make the overall task extremely transcoding and bandwidth adaptation. Connect-World. They use clear, complex. The onus to envision a non-technical, English to discuss comprehensive blueprint and orchestrate • Service Monetisation: supports how ICT helps shape regional the implementation of the complete differentiated, tiered monetisation models and global development. The infrastructure enhancement falls on the based on multiple parameters - time of service provider. Such complex network day (peak or off-peak), destination, quota articles essentially examine the upgrades require deeper engagement from consumption and application type to influence that ICT products and the telecom service provider in handling monetise the value delivered to subscribers services have on the way people end-to-end service delivery. This limits with a variety of new revenue models. live and do business. With time available for innovation in service separate editions for each of offerings. The increased dependency on With this MOM strategy, more and the world’s regions, the reports multiple vendors who cannot function more operators are now convinced that highlight the most important ICT in a cohesive manner leads to long a single integrated solution such as trends and issues influencing testing cycles and to delays in marketing this is needed to address the upcoming socio-economic growth. activities, such as launching new plans, challenges in managing the mobile bundles and promotions. data growth. The key is to achieve consistently improved user experience Connect-World is now available Given this fact, today service providers are through smarter traffic management. to follow on Twitter (http://twitter. looking at solutions that can fully address com/#!/ConnectWorldICT) and their end-to-end needs for traffic growth It is imperative for the solution offerings Facebook http://www.facebook. from a single vendor. The challenges are to optimise operators’ spend on often com/connectworld.ict centred on managing, optimising and expensive network infrastructure and monetising data traffic. They are now thereby result in faster ROI (Return on Also, it is still possible, for FREE, looking at an integrated, consistent, unified, Investment). An integrated solution that to directly access all past and solid solution for data ‘pipe’ management incorporates the MOM strategy would that delivers a hassle-free and smooth result in reducing the operator’s CAPEX present Connect-World articles, experience to the subscribers and service and OPEX and at the same time offer ICT Industry press releases, providers. Acknowledging that data pipes flexibility to create differentiators in their eLetters, ICT News and more at will need to be controlled and shaped, competitive markets, in a timely manner. www.connect-world.com. service providers have begun to understand Furthermore, given the exponential growth
India 2012 n 29 Getting more from the infrastructure
Service innovation - with a little help from some friends by Drew Rockwell, CEO, MDS Group
The on-going drive to reduce costs while increasing the scope of service capabilities is forcing CSPs to consider outsourcing. MVNOs rely entirely on outsourced networks, while CSPs augment their capability and reduce costs. Providers of managed services can deliver lower costs, efficient services on modern, compliant systems and efficient service due to economy of scale. Outsourcing can be provided as (a) SaaS, with always up-to-date software, or as (b) Managed Services, with turn-key CRM and billing too, or (c) outsourcing the entire business process, taking over operations of whole departments. In all cases, the delivery details must be enshrined in an accurate SLA, which should be a ‘living’ document, to support the required business agility.
Drew Rockwell is the Chief Executive Officer of MDS Group. Mr Rockwell joined MDS Lavastorm Analytics in 2002 toleadits transformation to a global analytic software and services company. He remained as Chief Executive when the company was acquired by MDS in 2005. He assumed responsibility for Group operations in 2010.
For the last thirty years, the telecoms industry threat to innovation. This is forcing CSPs to outsource operational processes. Managed has been marked by its continual service constantly reinvent their market offerings, in services are not something that is a one-size- evolution, driven by a need for communication an effort to attract and retain customers that fits-all solution. Businesses need to think service providers (CSPs) to differentiate are ever-more discerning, demanding and carefully about their requirements prior to themselves in an increasingly competitive quick to switch for a sweeter deal. With a outsourcing any of their business processes. market. The Indian market is a prime penetration rate of about sixty per cent, India The first consideration should be what example of a developing telecoms market is a perfect example of a market with a dual operations remain in-house and what should with substantial growth and competition. challenge: the demand for competitive prices be outsourced. Careful thought of what should Currently, it has a market value of about versus innovation. So how to tread the line be outsourced will make the most of the US$32 billion, according to the Boston between increased costs of evolving service additional resource from managed services, but Consulting Group. Service evolution has led portfolio (and the infrastructure and resource also enable internal operations to operate at a CSPs to offer considerably more services than investment this requires) and the unceasing more effective level with the internal resource they envisaged thirty years ago - with hosted requirement to drive profit up? These two pressure removed. Once a decision has been services bringing ever more potential to the forces can only work together if operational made of what to outsource, it will become proposition list. The market opportunity for efficiencies allow CSPs to keep a firm hand on much easier to source the right provider. telecoms services in India is estimated to be costs. Outsourcing that responsibility - through worth US$116bn in the next three years. managed services - is becoming one of the The benefits of outsourcing operations most popular methods of doing this. At the same time, alongside these expanding Across the globe, time-to-market and rapid services, driven by the same aggressive market There are a number of things that need to turnaround of services are critically important, conditions, price erosion has been a constant be considered when CSPs are looking to as CSPs look to capitalise on rapid growth
30 n India 2012 Getting more from the infrastructure
areas such as mobile data, video and value- main options: Software-as-a-Service (SaaS), will usually have penalties for non-adherence, added services. One of the biggest areas managed services and full outsourcing. a key benefit of outsourcing compared to using of conflict within any CSP business occurs an internal IT department). when the R&D and services teams run a) SaaS is a good option for CSPs that want a ahead of operations, devising new products particular piece of technology without the need SLAs are unique in each case, although there and launching them without due thought to maintain it in-house. It is a practical option are some common threads. The SLA should to the back-end requirements. Outsourcing for businesses where seasonal demand is define the services that will be provided, responsibility for these essential activities commonplace, and therefore rapid scalability, as well as a clear definition of roles and can free the CSP staff to focus on innovation, even temporary scalability, is needed. responsibilities between the CSP and managed reassured that these vital operational elements CSPs will need to ensure that any SaaS service provider. It also provides a guarantee are looked after. implementation integrates with current IT of the service levels that the managed service services and functions. SaaS business models provider will provide. Frequently, providers The main benefits of managed services are are a predominantly subscription fee plus a may make exaggerated claims in order to win lower costs, access to new technology, reduced usage-based charge on a pay-as-you-go basis. a contract. By paying close attention to the risk and higher flexibility as well as a quicker SLA, CSPs can see how efficient the processes time-to-market, which is crucial in today’s b) Managed services can provide extra are and how expert and responsive the staff fast-paced market. Linked into this, CAPEX levels of control and insight, beyond those are, and take the appropriate action if the can also be significantly reduced, making a big brought by SaaS. They enable better control standards fall short. The extent of the service difference to the balance sheet. of individual functions such as billing, guarantee will usually be where the financial network management, and CRM channels. penalties for sub-standard services are found. Compliance is also an important consideration This means that CSPs can more effectively for CSPs, as regulatory requirements are differentiate their service offerings to current Providers of managed services should be rapidly evolving. An outsource partner should and prospective customers. It is particularly happy to provide measurements of their be able to not just adhere to current governance important where there is a land grab for new performance, with benchmarks and case requirements, but they should be engaged with a and innovative services and the customers studies that will give CSPs peace of mind. view to easing the transition of new regulatory to buy them. Additionally, managed services The provision of timely and accurate data to structures as they come into force. can aid CSPs in increasing the return on CSPs from the provider is essential. It offers investment (ROI) from IT infrastructure by the assurance that at any time, a specific and The business case reducing total cost of ownership, increasing accurate deep-dive search of data can be made, operational efficiency and driving up analysing any anomalies, so that they can be Careful consideration needs to be given to commercial agility. Managed services can resolved in a timely fashion. This highlights build a solid business case for the value of also help manage the risk of staff change and the necessity for easy access to data that is moving to the right outsourced service, in enable fast ‘on-boarding’ of expertise, which both accurate and meaningful. order to truly maximise the business benefit may be in short supply internally. from it. In calculating the business case, the SLAs are particularly important when CSPs first step for CSPs is to understand current c) The third and most encompassing option look to sell on managed services to their IT costs. This will provide valuable insight is full business process outsourcing. This own MVNOs. MVNOs have very specific into where improvements need to be made, model provides support for CSPs throughout requirements, often different to those of their and what additional resource is necessary the software lifecycle, from acquisition to host network provider. As they don’t have for improvement. optimisation, possibly including third-party their own networks, managed services can service providers. This means that certain deliver great benefit in terms of drilling down These costs should include the direct costs of departments within a CSP become redundant. to identify whether a problem lies within their hardware, software, electricity and staffing, This in itself may not be desirable for CSPs own domain, or in the hosted network. as well as indirect costs such as revenue as they will lose some of the internal control. leakage and inflated customer care costs due It leaves much to be sorted out via the service The key to a successful SLA is for both the to inefficiency in billing or other IT services. level agreements. However, business process parties to negotiate and re-negotiate the terms Other miscellaneous costs that need to be outsourcing ensures that costs are fixed, as and conditions - it should not be viewed as a factored into this analysis include missed charging is dependent on outcomes rather than static agreement. As business requirements opportunities due to late or cancelled service usage or demand. Due to its nature, contracts change, SLAs should evolve to match the most launching and costs associated with day-to- tend to be long-term. This can aid businesses accurate picture of the business’ needs. day reactive activities instead of proactive in terms of planning and fixing budgets ahead and strategic initiatives. Many CSPs may of time. In conclusion, outsourcing business processes not have a holistic view of these costs, so can be a very useful tool for CSPs and outside help may be needed to assess this, and Relationship management MVNOs alike, helping to increase ROI from provide independent advice on which managed IT infrastructure by decreasing total cost of services option is best for them. Once a CSP has decided on the type of service ownership, increasing operational efficiency to use, they need to think about how they can and driving up commercial agility. Choosing Outsource models most effectively manage the relationship. hosting partners needs to be given careful Service-level agreements (SLAs) are critical, consideration to make sure that the skills and Having decided to outsource business not just to the success of the relationship, but needs of the CSP or MVNO are accurately processes, the next stage for CSPs is to look also to ensure that both parties have a formal matched, to ensure a positive investment and at the characteristics, benefits and costs of the means of measuring the level of service (which prevent future issues. l
India 2012 n 31 32 n India 2012 DRAGONWAVE AVENUE THE ROAD TO 4G JUST GOT EASIER
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