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BEYOND THE SDN/NFV HYPE Special report on virtualisation, featuring business models, workforce worries and an in-depth reader survey

Q4 2014 ISSUE | THE LAST WORD ON NETWORK OPERATOR STRATEGY FROM AROUND EUROPE

Contents

04 Apple launches “good news” for operators in the short term, say analysts 05 EE says lack of exclusive content “not an issue” as it launches home TV service 06 Global telco stocks rise amid M&A chatter, improving ﬁnancials 08 Europe still far from agreement on telecoms reform 10 Telenor Banka: A bold step for mobile banking, taken with extreme caution

CMO of the year

17 Hailing the rise of the operator CMO Amdocs Chief Marketing Ofﬁcer Chris Williams discusses why, amid myriad changes in the telecoms industry and beyond 18 MTS, Play, Telenor Denmark and Vodafone M2M make the shortlist European Communications assembled an independent judging panel to ﬁnalise a shortlist and decide on the winner 20 Marathon man wins CMO of the Year award, urges telcos to focus on digital players not each other Telenor Denmark CMO Lars Thomsen gave his reaction to winning the award and shared a few of his secrets

Special report: Managed services

24 Survey: Operators looking for value in shrinking pool of managed services providers 29 More managed services, less providers, please 20 Lars Thomsen, Telenor Denmark Vodafone Germany’s Head of Sourcing Transformation discusses deals, partnerships and why he’s optimistic about Interview with the winner of our the future inaugural CMO of the year award 30 How to choose the right MSP It may be one thing to identify that your business has a need to outsource a part of its business operations but the keys to ensuring the next stage 32 How to structure an operator team to succeed in managed services For operators, the personal counts just as much as the practical when it comes to working with a managed services provider

Special report: SDN/NFV

38 Survey: Workforce worries to the fore as operators prepare for virtualised future 46 SDN/NFV: Show me the money Beyond the theoretical beneﬁts that SDN/NFV provide, what are the business models that operators can look to? 50 Job losses: The elephant in the room that SDN/NFV lets in Telcos have a shortening timeframe to train their staff for a virtualised world, but even so it is likely that many will not survive the transition

Back page

52 Hello, I’m here to sell you a connected future

eurocomms.com | european communications | 01 EDITORIAL

Editor Marc Smith Managed services and SDN/NFV take centre stage [email protected] T: +44 (0) 207 933 8979 Twitter: @eurocomms 7KLVLVVXHLVDÀUVWIRU(XURSHDQ&RPPXQLFDWLRQVLQWKDWZHKDYHWZRVSHFLDOUHSRUWV )LUVWZHKDYHRXUVHFRQGDQQXDOORRNDWWKHWHOFRPDQDJHGVHUYLFHVVSDFH Staff Writer 7KDWLWLVDWUHQGLQFUHDVLQJLQSRSXODULW\LVFRQÀUPHGLQRXUVXUYH\ZKLFKÀQGVWKDW Owen Hughes [email protected] RYHUKDOIRIRSHUDWRUUHVSRQGHQWVVLJQHGPRUHPDQDJHGVHUYLFHVGHDOVLQFRP T: +44 (0)207 933 8979 SDUHGZLWKODVW\HDU ,QDGGLWLRQWRWKHVXUYH\ZHWDNHDORRNDWWZRNH\FKDOOHQJHVWRRSHUDWRUVHPEDUNLQJ Publisher Justyn Gidley RQDPDQDJHGVHUYLFHVSURMHFW2QHUHJDUGVKRZWRFKRRVHWKHEHVWYHQGRUIRU\RXU [email protected] QHHGV,WLVDQLPSRUWDQWWRSLFJLYHQPDMRUSOD\HUVVXFKDV$OFDWHO/XFHQWDQG1RNLD T: +44 (0) 207 933 8979 KDYHEHHQVFDOLQJGRZQWKHLUDFWLYLW\VR'DYLG&UDLNDVVHVVHVDWZKDWRSHUDWRUVVKRXOG Account Manager EHORRNLQJRXWIRUDVWKHSRRORISURYLGHUVVKULQNV Ilyas Ismail 7KHRWKHUFKDOOHQJHUHJDUGVKRZRSHUDWRUVFDQEHVWVWUXFWXUHWKHLULQKRXVHWHDPWR [email protected] HQVXUHPDQDJHGVHUYLFHVSURMHFWVDUHVXFFHVVIXO,WZDVFLWHGDVDSUREOHPE\VXUYH\ T: +44 (0) 207 933 8979 UHVSRQGHQWVODVW\HDUVRZHKDYHVSRNHQWRWZRNH\ÀJXUHVDW'HXWVFKH7HOHNRPDQG Account Manager 7HOHNRP$XVWULDWRGUDZRXWEHVWSUDFWLFHLQWKLVDUHD Tim Robinson 6HFRQGZHWDNHDORRNDWRQHRIWKHPRVWWDONHGDERXWWRSLFVLQWKHLQGXVWU\²YLUWX [email protected] T: +44 (0) 207 933 8979 DOLVDWLRQ,WLVDOPRVWLPSRVVLEOHWRDYRLG6'1DQG1)9LQGLVFXVVLRQVZLWKH[HFXWLYHV EXWZHZDQWHGWRWDNHDORRNEH\RQGWKHK\SH Publishing Director 2XUVXUYH\VKRZVWKDWDOWKRXJKRSHUDWRUVDUHFRQYLQFHGRIWKHEHQHÀWVRI6'11)9WKH Chris Cooke PDMRULW\WKLQNVWKHVNLOOVHWRIWKHLUZRUNIRUFHLVQRWÀWIRUSXUSRVHDQGMREORVVHVZLOOHQVXH Design (LUD+D\ZDUGGHOYHVIXUWKHULQWRWKLVWKRUQ\LVVXHDQGDQDO\VHVWKHRWKHUPDMRU Alex Goldwater WDONLQJSRLQWDURXQG6'11)9²KRZDUHRSHUDWRUVJRLQJWRPDNHPRQH\IURPWKHVH Subscriptions/Circulation QHZWHFKQRORJLHV" SJP Business Media PO Box 6009 Managed services, SDN/NFV seminar day Thatcham Berkshire RG19 4TT %RWKPDQDJHGVHUYLFHVDQG6'11)9ZLOOEHGLVFXVVHGDWRXUVHPLQDUGD\RQ'H United Kingdom FHPEHULQ/RQGRQ,I\RXKDYHDQLQWHUHVWLQWKHVHWZRLPSRUWDQWWRSLFV,XUJH\RXFRPH DORQJOLVWHQWRWKRXJKWOHDGHUVDQGQHWZRUNZLWK\RXUSHHUVLQDQLQIRUPDOVHWWLQJ

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02 | european communications | eurocomms.com

NEWS ANALYSIS

Apple launches “good news” for operators in the short term, say analysts

´7KLVZLOOEHDFRPSOH[WDVNGXHWRWKH fragmented nature of markets in regions like Europe and is likely to take some FRQVLGHUDEOHWLPHDQGLQYHVWPHQWµ %XW$QDO\V\V0DVRQ·V(QULTXH9HODV- FR&DVWLOORGRHVQRWH[SHFW$SSOHWRIDLO XOWLPDWHO\+HVDLG´$SSOHKDVDQDGYDQ- tage in the race for mobile commerce and payments dominance thanks to a combination of security features in the iPhone 6 and the Apple Watch, detailed FXVWRPHUGDWDNH\SDUWQHUVKLSVZLWK FDUGQHWZRUNVDQGPHUFKDQWVDQGVKHHU JRRGWLPLQJµ 2YXP·V(GHQ=ROOHUDGGHG´$SSOHZLOO prove effective at marketing mobile payments to consumers, not as a technology EXWDVVRPHWKLQJWKDWZLOOPDNHSD\LQJ IRUJRRGVDQGVHUYLFHVZLWK\RXUSKRQH IDVWHDV\DQGHYHQIXQµ $QDO\VWVDOVRH[SHFW$SSOHWROHDGLQ WKHVPDUWZDWFKVSDFH&&6,QVLJKW·V %ODEHUFRPPHQWHG´$SSOHKDVVXFFHHG- HGZKHUHRWKHUVKDYHIDLOHGLQFUHDWLQJD device that stands up to comparison to perators should look favour- QHWZRUNVWRHQVXUHWKH\RIIHU´UREXVW KLJKO\SHUVRQDOSLHFHVRIMHZHOOHU\ ably on the latest product LQWHUQHWDFFHVVµWKDWFDQFRSHZLWKWKH launches from Apple, at least LQFUHDVHLQPRELOHGDWDWUDIÀFWKHQHZ O in the short-term, industry GHYLFHVZLOOEULQJDERXW Apple’s new analysts have said. The US manufacturer On the m-payments front, many oper- XQYHLOHGLWVÀUVWVPDUWZDWFKDQGDQ DWRUVZLOOEHZRQGHULQJLI$SSOH·VHQWU\ devices offer operators PSD\PHQWVVHUYLFHDORQJVLGHWZRQHZ ZLOOVRXQGWKHGHDWKNQHOOIRUWKHLURZQ versions of its iPhone in September. offerings. But Analysys Mason’s John a great opportunity to Ovum’s Paul Lambert said the Abraham assuages any immediate fears. increase data usage and DQQRXQFHPHQWVDUH´JUHDWQHZVµIRUQHW- +HFRPPHQWHG´$SSOH3D\ZLOOQRW “ ZRUNRSHUDWRUV+HH[SODLQHG´9LHZHG have any direct impact on CSP revenue data revenues together, the devices represent a step- DWSUHVHQW7KHJUHDWHULPSDFWZLOOEHWKH FKDQJHLQKRZPRELOHFRQVXPHUVZLOOEH loss of potential customer relationship “More details are needed to ascer- connected to the internet. opportunities by letting Apple become WDLQWKHGHJUHHWRZKLFKWKHGHYLFHZLOO ´$SSOH·VQHZGHYLFHVRIIHURSHUDWRUV the gatekeeper for all mobile commerce EHFRQVLGHUHGD´PXVWKDYHµZKHQLW a great opportunity to increase data WUDQVDFWLRQV7KLVZLOOEHOLPLWHGDWÀUVW launches in early 2015,µ but there can be usage and data revenues. Each of the DV$SSOH3D\LVOLPLWHGWRQHZL3KRQHV OLWWOHGRXEW$SSOHZLOOTXLFNO\VHOOPLOOLRQV QHZGHYLFHVZLOOOHDGWRPRUHFHOOXODU EXWWKHLPSDFWZLOOH[SDQGLQVFRSHDQG of devices. For Apple’s competitors this GDWDXVHZKLFKLVDOVRJUHDWQHZVIRU FRYHUDJHRYHUWKHQH[WIHZ\HDUVµ ODXQFKZLOOIRUFHWKHPWRUHWKLQNPDQ\ operators – especially if they can price CCS Insight’s Geoff Blaber said the DVSHFWVRIWKHLUSURGXFWSODQVµ GDWDVHUYLFHVLQZD\VWKDWFDSWXUHFRQ- launch of Apple Pay using NFC “is of $QDO\V\V0DVRQ·V9HODVFR&DVWLOORDGG- VXPHUV·LPDJLQDWLRQVµ KXJHVLJQLÀFDQFHµEXWLWVVXFFHVVZLOO HG´$SSOH·VQHZZHDUDEOHZLOOVLJQLÀFDQW- +RZHYHUKHZDUQHGWKDWRSHUDWRUV GHSHQGRQKRZTXLFNO\LWFDQUROORXW O\VORZGRZQVDOHVRIFRPSHWLQJGHYLFHV ZLOOQHHGWRFRQWLQXHWRLQYHVWLQWKHLU EH\RQGLWVLQLWLDO86ODXQFK+HDGGHG LQWKHÀQDOTXDUWHURIµ ec

04 | european communications | eurocomms.com NEWS ANALYSIS

EE says lack of exclusive content “not an issue” as it launches home TV service

(KDVFODLPHGDODFNRIH[FOXVLYH DQDO\VW3DROR3HVFDWRUHVDLG´((ZLOOEH FRQWHQWZLOOQRWKLQGHUWKH79 We’re WKHÀUVWRIWKHIRXUPDMRUPRELOHQHWZRUN service it launched in October. EE RSHUDWRUVWRODXQFKDTXDGSOD\VHUYLFH E79LVDVHWWRSER[ 67% EDVHG announcing the most and it represents a statement of intent by service available to the UK operator’s the company to offer content in order to mobile and broadband subscribers. advanced TV service sell more broadband connections. ,QFRQWUDVWWRULYDOVVXFKDV%7ZKLFK the UK has ever seen ´+RZHYHUJLYHQWKHH[FOXVLRQRI1HWÁL[ has spent billions on sports rights, EE has “ EE must strongly consider forging agree- QRWLQYHVWHGLQFRQWHQW7KHQHZVHUYLFH PHQWVZLWKRWKHUNH\ULJKWVRZQHUVLQFOXG- IHDWXUHVOLYHFKDQQHOVYLD)UHHYLHZDQG PRELOHFXVWRPHUVZKRDOVRVXEVFULEH LQJ%6N\%IRU1RZ797KHFRPSDQ\PXVW OTT services, including Daily Motion, You- to EE Broadband plans of £9.95 a also strengthen the range of on-demand Tube, BBC iPlayer, Demand 5 and Wuaki, month or above. services as this is becoming increasingly EXWODFNVWKHOLNHVRI1HWÁL[DQG2' 2ODI6ZDQWHH SLFWXUHG &(2((VDLGµ important to consumers as underlined by EE said further partners are already ´:H·UHDQQRXQFLQJWKHPRVWDGYDQFHG79 1HWÁL[·VJURZWKµ FRQÀUPHGWRMRLQWKHVHUYLFHDQGZLOOEH VHUYLFHWKH8.KDVHYHUVHHQ+RZZKHUH Analysys Mason’s Cesar Bachelet announced in the coming months. DQGZKHQSHRSOHZDWFK79DQGPRYLHVLV DGGHG´((79SURSRVLWLRQDSSHDUVWREH Pippa Dunn, EE’s Chief Marketing changing, and mobile technology is driving UHODWLYHO\ZHDNRQSUHPLXPFRQWHQW,WLV 2IÀFHUVDLG´:HVWURQJO\EHOLHYHWKDWWKH that change. We have unrivalled insight QRWJRLQJWRFDXVHVLJQLÀFDQWFKXUQIURP 8.KDVWKHEHVW>IUHH79@FRQWHQWSURSR- LQWRSHRSOH·VFKDQJLQJYLHZLQJKDELWV,W·V HVWDEOLVKHGSD\79RSHUDWRUV+RZHYHUWKLV VLWLRQLQWKHZRUOGRWKHUFRQWHQWLVDOVR helped us create a service that has mobile service appears to be designed as a reten- SURYLGHGE\277SOD\HUV6RZHGRQ·WUHDOO\ DWLWVKHDUWDQGPDNHVWKH79H[SHULHQFH WLRQVWUDWHJ\IRUH[LVWLQJÀ[HGEURDGEDQG VHHDUROHIRUH[FOXVLYHFRQWHQW:HWKLQN PRUHSHUVRQDOWKDQHYHUEHIRUHµ FXVWRPHUVWKDWZDWFKIUHHWRDLU79DQGWR WKDWWKHFXVWRPHUH[SHULHQFHWKDWZHDUH %XWDQDO\VWVZDUQHG((QHHGHGWRGR encourage EE mobile to consolidate their going to give and the functionality that [EE more on the content front. CCS Insight PRELOHDQGÀ[HGVHUYLFHVIURP((µ ec 79@KDVJRWLVVWURQJHQRXJKRQLWVRZQµ The functionality that EE has developed LVQXPHURXV&XVWRPHUVFDQYLHZOLYHDQG recorded content across up to four iOS or $QGURLGGHYLFHVDVZHOODVWKHLUKRPH79 $UHSOD\VHUYLFHDOORZVFXVWRPHUVWR ZDWFKWKHODVWKRXUVRI79IURPXSWR VL[FKDQQHOVZKLOHDPXOWLUHFRUGIHDWXUH enables up to four separate programmes to be recorded simultaneously. 7KH67%ZKLFKZDVGHYHORSHGE\1HW- gem, can store up to 25 days of content on its 1TB hard disk drive. 0HDQZKLOHDQ((79DSSHQDEOHV YLHZHUVWRXVHWKHLUWDEOHWRUPRELOHDVD UHPRWHFRQWURO8VLQJD´ÁLFNµIHDWXUHXV- HUVFDQWUDQVIHUFRQWHQWWKH\DUHZDWFKLQJ on their smartphone directly onto their KRPH79 The operator also pointed to a “dynam- LFµSURJUDPPHJXLGHRUXVHULQWHUIDFH that had been designed to mimic that of a smartphone. Dunn said digital navigation KDGEHHQ´VWXFNLQWKHVµ ((79LVIUHHIRUQHZDQGH[LVWLQJ((

eurocomms.com | european communications | 05 FINANCIAL DATA Global telco stocks rise amid M&A chatter, improving ﬁ nancials

Major regions all continue to build on Q2 rebound between July and September Belgacom continues to rebuild its reputation

Belgacom was the best-performing stock in the third quarter as its share price rose by an impressive 13.5 percent. Asia-Pac again outperforms US The operator reported falling, though improving, quarterly revenues in August, but 7KH86WHOHFRPVVHFWRUVDZVKDUHSULFHV EURDGO\ÁDWDW said EBITDA rose 14.3 percent and revised LQFUHDVHE\SHUFHQWLQ4ZLWK6SULQW 0HDQZKLOHJURZWKLQ$VLDQVWRFNVZDV up its expectations for the full year. and T-Mobile the biggest losers. Sprint’s up over 15 percent in euro terms and In addition, Belgacom now has over 1.5 share price dropped by 25.8 percent RYHUVL[SHUFHQWLQGROODUWHUPV&KLQD million TV customers and has started to offer Netﬂ ix in its home market. GXULQJWKHTXDUWHUDIWHUWKHRSHUDWRU Telecom outperformed market leader CEO Dominique Leroy, who doesn’t ÀQDOO\DGPLWWHGGHIHDWLQLWVEDWWOHZLWK &KLQD0RELOHZLWKWKHIRUPHU·VVKDUH mark her ﬁ rst year in charge until January UHJXODWRUVWRWDNHRYHULWVULYDO7KHQHZV SULFHJURZLQJE\DTXDUWHU next year, said the operator had managed DOVRDIIHFWHG70RELOHZKLFKVDZLWV $W&KLQD0RELOHQHWSURÀWIHOOIRUWKH strong commercial momentum in spite of an VKDUHSULFHGURSE\SHUFHQW ÀIWKTXDUWHULQDURZZLWKWKHRSHUDWRU intense competitive environment. In truth, the operator’s stock has been 6SULQW·VQHZ&(20DUFHOR&ORUHZDONHG GHDOLQJZLWKDPDUNHWVORZGRZQFRVWV on an upward curve since the beginning of its LTE rollout and high competition LQWRWKHMRELQ$XJXVWZLWK70RELOH·V of the year. So far, it is up 42 percent outspoken CEO John Legere promising to across the country. since January. overtake the company in terms of total In Japan, Softbank Mobile’s shares It is a remarkable turnaround given this customers by the end of this year. Clore SHDNHGDWDVLWZDVQDPHGDV time last year Belgacom was in turmoil. The KLWEDFNFODLPLQJKLVRSHUDWRUZDVWKH one of the potential suitors for American Belgian government, Belgacom’s majority shareholder, sacked CEO Didier Bellens last true disruptor in the American market. 0RYLO·VDVVHWV+RZHYHULWZDVDGLIÀFXOW November after he said the Belgian State The American M&A chatter continued TXDUWHUIRUWKH6SULQWRZQHUZLWKLWV was the company’s “worst shareholder”. ZLWK9HUL]RQGLVPLVVLQJVXJJHVWLRQVWKDW VKDUHVGRZQSHUFHQW Not content with that broadside, Bellens LWZRXOGEHDELGGHULQ$PHULFDQ0RYLO·V In LTE heartland Korea, operators described the country’s Prime Minister as VDOHRIDVVHWVZKLOH$7 7FRXOGEHKDP VSHQWWKHTXDUWHUSUHSDULQJIRUQHZ “like a child looking for Father Christmas”. VWUXQJE\0H[LFDQUHJXODWRU\UXOHV%RWK changes to the market. From 1 October, Leroy has attempted to instill a sense of calm. As part of this, a new corporate FRPSDQLHVKDGFRPSDUDWLYHO\WUDQTXLO PD[LPXPVXEVLGLHVZHUHFDSSHGDQG brand strategy – based around its Proximus WKLUGTXDUWHUV9HUL]RQ·VVKDUHSULFH operators have to be more candid about mobile business – has been unveiled. LQFKHGXSSHUFHQWZKLOH$7 7FORVHG pricing decisions. The majority of its services are now presented as Proximus with the reasoning that a single main commercial brand would simplify communication with customers. Leroy commented: “This change is a fundamental part of our growth strategy The US in which, more than ever, we are putting The US telecoms sector rose our customers at the centre of everything 1.3% we do.” 1.3 percent in Q3 according to By way of example, Belgacom said it data from the Dow Jones US Index is launching a new customer service app “My Proximus” as well as new services and products such as the “Same Day Repair” offer for business customers. Asia-Pac Leroy added: “The launch of the new Proximus is not the end point, but rather the 15.3% The Asia-Pac telecoms sector rose beginning of a real transformation. And it 15.3 percent in Q3 according to is our customers who will reap the fruits of data from the FTSE Group Index this all along.”

06 | european communications | eurocomms.com FINANCIAL DATA

EU Telco stocks July-September 2014 950

900

850

800 July Aug Sept

RQWKHVWRFNPDUNHWV1HZHQWUDQW$OWLFH Flat quarter across Europe sees share ZDVWKHZRUVWSHUIRUPHUDVLWXSSHGLWV stake in France-based cableco Numeri- prices rise at just three operators cable. Investors appeared spooked by its investments in France’s highly competitive telecoms market. European telco stocks just about main- UHYHQXHVDQG(%,7'$ZHUHRQWKHLQ 7KHFRPSDQ\DFTXLUHG6)5DWWKHHQG tained the momentum built up in the FUHDVHWKDQNVWRDVLJQLÀFDQWLQFUHDVH RI-XQHDVZHOODVWKH9LUJLQ0RELOHEUDQG VHFRQGTXDUWHUZLWKDSHUFHQWULVH LQ79VXEVFULEHUV in France. EHWZHHQ-XO\DQG6HSWHPEHU 9RGDIRQHUHERXQGHGIURPDGUHDGIXO 'HXWVFKH7HOHNRPDQG.31ERWKVDZ %HOJDFRPZDVWKHVWDUSHUIRUPHUDV VHFRQGTXDUWHUZLWKQHZVWKDWLWDFTXLUHG their share prices fall over nine percent its share price rose 13.5 percent during *UHHNEURDGEDQGDQGÀ[HGOLQHWHOHSKR GXULQJWKHTXDUWHU'7GLVPLVVHG,OLDG·V WKHTXDUWHU VHHER[RXW 6ZLVVFRP Q\SURYLGHU+HOODV2QOLQH €11 billion bid for its T-Mobile US subsid- XSSHUFHQW DQG9RGDIRQH XS $PLGUXPRXUVLWFRXOGEHLQZLWKD iary in August and accused the European SHUFHQW ZHUHWKHRQO\RWKHURSHUDWRUV VKRXWRIDFTXLULQJ7HOHFRP,WDOLD·V%UD]LO Commission of creating a “massive LQRXULQGH[WRUHJLVWHUDQLPSURYHG LDQPRELOHRXWÀWWKH8.EDVHGRSHUDWRU LPEDODQFHµLQWKH*HUPDQPDUNHWDIWHU performance. announced it had breached the one FRPSHWLWLRQDXWKRULWLHVÀQDOO\JDYH ,Q-XO\WKH6ZLVVRSHUDWRUEHFDPH PLOOLRQVXEVFULEHUEDUULHUIRULWVQHZ* 7HOHIyQLFDSHUPLVVLRQWRDFTXLUH(3OXV WKHÀUVWLQWKHFRXQWU\WRODXQFKDQHZ QHWZRUNLQLWVKRPHPDUNHW .31ZKLFKVROG(3OXVWR7HOHIyQLFD PSD\PHQWVVHUYLFHFDOOHG7DSLWZKLFK Its retail portfolio got a shot in the UHSRUWHGPRUHGLVDSSRLQWLQJÀQDQFLDO FUXFLDOO\VDZFRRSHUDWLRQIURPÀQDQFLDO DUPLQ6HSWHPEHUZKHQLWDQQRXQFHGLW UHVXOWVGXULQJWKHTXDUWHUPHDQLQJD groups. The same month, it announced ZDVEX\LQJVKRSVDQGUHKLULQJ promise to reinstate a dividend later this that it had connected over one million employees from collapsed UK retail chain year fell on deaf ears. KRPHVDQGEXVLQHVVHVZLWKÀEUH 3KRQHV8 BT, Orange, Telecom Italia, Telefónica, %XWZKDWUHDOO\KHDUWHQHGLQYHVWRUV (OVHZKHUHKRZHYHUWKHUHZHUHVHY 7HOHQRUDQG7HOLD6RQHUDDOOVDZWKHLU ZDVWKH$XJXVWDQQRXQFHPHQWWKDW eral poor performances from operators share prices fall. ec

Europe 2XULQGH[LVPDGHXSRIWKHIROORZLQJ (8WHOFRV$OWLFH%HOJDFRP%7*URXS The European telecoms sector 0.1% 'HXWVFKH7HOHNRP2UDQJH6ZLVVFRP rose 0.1 percent in Q3 according Tele2, Telecom Italia, Telefonica, Telenor, to data from the FTSE Group* 7HOLDVRQHUDDQG9RGDIRQH*URXS

eurocomms.com | european communications | 07 REGULATION

Europe still far from agreement on telecoms reform Over a year after its birth, disagreements over the Connected Continent legislative package are rife, reports Carmen Paun

he 28 European Union (EU) countries are still far from being able to agree on the proposed T Connected Continent package of telecoms regulations, with intensive technical talks still taking place in the EU Council of Ministers. The Council is one of two EU legisla- WRUVZKRPXVWDSSURYHWKHUHIRUPÀUVW could take form of a glidepath of retail home’ environment in order to create a proposed by the European Commission tariffs covered by the standard minimum positive roaming experience for travelling in September 2013, for it to take effect. fair use limits,” it says. end-users,” says Erzsébet Fitori, Director The other co-legislator, the European The current Italian presidency of the of the European Competitive Telecommu- Parliament, has backed the proposal council is leading the talks and has since nications Association (ECTA). with amendments, but national govern- proposed that such roaming caps be cal- “In this context we advocate clarity on ments remain bogged down in technical culated annually, taking account of daily the rules both at the retail and wholesale discussions about many of the aspects amounts of voice calls, SMS and data, level with a progressive and reasonable proposed in these complex reforms, EDVHGRQÀJXUHVFROOHFWHGE\WKH%RG\ timeframe for operators to do the legwork including roaming, net neutrality and of European Regulators of Electronic of making ‘roam-like-at-home’ happen.” spectrum allocation. Communications (BEREC). The Parliament has voted to end roam- A Brussels-based telecoms industry Net neutrality ing charges by 15 December next year, source says these efforts are aimed Net neutrality is another sticking point but national telecoms experts have yet at soothing the worries of EU southern in the discussions. “Most member to agree a preferred deadline because of FRXQWULHVWKDWWKH\FRXOGORVHVLJQLÀFDQW states support EU rules set at a level of worries amongst some member states revenues by removing roaming fees, principles, leaving more scope for BEREC about the potential loss of tax revenues notably from northern European tourists guidelines and national enforcement,” DQGWHOFRSURÀWV holidaying in the south. Northern EU says the document obtained by European According to a restricted document, member states favour a complete phase- Communications. discussed during a Council working party RXWRIURDPLQJFKDUJHVWREHQHÀWWKHLU The Italian presidency has proposed on telecommunications in September, citizens, says the same source. WKDWWKH&RXQFLODFFHSWVWKHFRUHGHÀQL- and obtained by European Communica- Moreover, the source added that tion of net neutrality adopted by the Par- WLRQV´DVLJQLÀFDQWQXPEHURIPHPEHU the calculation method proposed by OLDPHQWZKLFKGHÀQHVLWDV´WKHSULQFLSOH states indicate their openness, under the Italian presidency has never been DFFRUGLQJWRZKLFKDOOLQWHUQHWWUDIÀFLV certain conditions, to the introduction of mentioned previously but that member treated equally, without discrimination, additional roaming reforms in this leg- state representatives have asked for restriction or interference, independently islation, including a ‘roam like at home’ more time. Another meeting between the of its sender, recipient, type, content, solution at retail level”. council experts took place on 10 October, device, service or application”. But it added that a “safeguard mecha- but documents about the conclusions However, it has yet to suggest how nism” that allowed higher roaming tariffs have not yet emerged. Council might respond to more detailed should be considered allowing “fair use” “Challenger operators support the ab- DGGLWLRQVWRWKLVGHÀQLWLRQSURSRVHGE\ of such charges to address the worries of olition of excessive roaming charges and MEPs. These include that ISPs should not some member states. “Such a safeguard the gradual path towards a ‘roam-like-at- PDQDJHWUDIÀFLQDZD\WKDWZRXOGEORFN

08 | european communications | eurocomms.com REGULATION

or slow down competing services such as tive’s proposal dealing with the issue be an Communications went to press. A new OTT voice services or IPTV. deleted. The European Parliament also college of 28 commissioners lead by new ISPs would still be able to offer special- opposed the Commission’s plan and President Jean-Claude Juncker, plans ised services of higher quality, such as SURSRVHGWKDWDVLPSOHIRUPEHÀOOHG to take what Juncker has called in his video on demand and business-critical in by operators wanting to receive one political guidelines “ambitious legislative data-intensive cloud applications, so long authorisation that could work in more steps towards a connected digital single as these services are not supplied to “the EU countries. market”, which includes adding more detriment of the availability or quality of Member states are also pushing ambition to the ongoing telecom reform. internet access services” offered to other back against the Commission proposal It is not clear yet what this ambition companies or service suppliers. to include criteria that EU governments would mean for Juncker and his team, Industry representatives feel that this should follow when managing spec- since the initial text proposed by the provision is too intrusive. In a statement trum. According to the Council docu- Barroso-led Commission in September after the Parliament’s April vote, the ment, the Italian presidency suggested KDVEHHQVLJQLÀFDQWO\DOWHUHGE\ chairman of the European Telecommuni- deleting these criteria from the legis- the Parliament. cations Network Operators said that this lation, leaving Brussels with the power The draft text being discussed in the was introducing “far-reaching restrictions simply to issue recommendations on Council shows that these changes are RQWUDIÀFPDQDJHPHQWZKLFKZRXOG spectrum management. due to continue. “There is little left from PDNHDQHIÀFLHQWPDQDJHPHQWRIWKH “While most member states share the the initial Commission proposal,” an network almost impossible, resulting in a objective to reinforce coordination and industry source said. Brussels could pro- lower quality internet for all”. harmonised use, they also consider that pose additional amendments after the In September talks, the Italian pres- this shall not alter the existing allocation parliament and council have their say, idency proposed incentivising telecom of competences between member states but there is no guarantee these would operators when it comes to specialised and the Union,” reads the document, be approved. services: while they would be required to highlighting member state unease at the Günther Oettinger, EU Energy Commis- ensure that the overall quality of the in- Commission’s attempt to wrest spectrum sioner between 2009 and 2014, will be ternet quality is not affected by providing management powers from them. in charge of the digital economy and soci- specialised services, the more capacity EU member states have also rejected ety in the upcoming Commission. In his they would make available for the open the proposal by the Commission to in- new position, he will have to “break down internet, the more they can use for the clude rules harmonising end-users’ rights national silos in telecoms regulation, in provision of this type of services. across the EU when it comes to telecom- copyright and dataprotection legislation, “This approach is intended to foster munication services. in the management of radio waves and the operators’ incentive to invest in National governments would rather in the application of competition law,” capacity increases for both the open have a minimum standard for end-users so Juncker wrote in a ‘mission letter’ to internet and specialised services,” reads rights that would be included in later Oettinger setting out his tasks. the obtained Council document. amendments to the EU Universal Service The elimination of roaming charges However, it is not yet clear what member Directive, an older separate piece of law for voice and data services is clearly one states will decide, since discussions signal (from 2002), and not amended thus far of the priorities, according to the letter, deep divisions. Industry sources following by the package. which reads: “You should also ensure the talks say that the UK would like to see This alternative solution would mainly that users are at the centre of your the whole article referring to net neutrality refer to information requirements in action. They should be able to use their dropped, while the Netherlands is keen contracts, in particular on internet speed mobile phones across Europe without on its retention, as there is a Dutch law and quality parameters, as well as “trans- having to pay roaming charges. They regulating the issue already in place. parency measures, bill-shock protection, should be offered access to services, contract duration and termination, and music, movies and sports events on their Push back on a single regulatory switching provisions, which are funda- electronic devices wherever they are in body, spectrum mental aspects of enhanced end-users’ Europe and regardless of borders.” There is one area where member states do rights and are also essential to full im- He will have to work under the supervi- agree: they do not want single European plementation of the open internet,” the sion of a VP in charge of the Digital Single authorisations for telecoms services and Council document reads. Market. Former Estonia Prime Minister DVSHFLÀFUHJXODWRU\UHJLPHIRU(XURSHDQ Andrus Ansip has been assigned to that operators, as proposed by the Commission. Junker time position. His objective, according to Junck- The Italian presidency suggested that Member state representatives were due er: to make Europe a world leader in infor- the whole chapter from the EU execu- to meet again on 30 October as Europe- mation and communication technology. ec

eurocomms.com | european communications | 09 M-COMMERCE

Telenor Banka: A bold step for mobile banking, taken with extreme caution

Telenor’s purchase of a bank to launch mobile banking services in Serbia is unique. Do market conditions and new tech developments justify its gamble? Or do T-Mobile and Orange in Poland offer better models for mobile banking? James Blackmen reports

to be a smart, well-designed tool. However, the time it took Telenor Serbia to get its new house in order has seen other operators in the region ready similar propositions – comparable services in comparable markets with markedly different business models. They serve to both distinguish the Telenor service and raise questions about its broader strategy. Most notably, T-Mobile and Orange have launched banking services in Poland in partnership with third-party ÀQDQFLDOLQVWLWXWLRQVDVRSSRVHGWR ownership of them. Such a partnership model is more common. Telenor Serbia’s arrangement is, in Europe at least, unique. Telenor suggests the ownership model is cleaner, affording it better control of the customer experience and commercial propositions. “When you think about it, there are very few arguments against it. The opportunity elenor Banka launched Telenor Serbia customers. Through an came up, the investment was attractive, mid-September in Serbia, 10 agreement with MasterCard, custom- and it means we have complete control of months after the operator ers can make payments at merchant the customer journey and value proposi- T acquired KBC Banka, taking terminals, and withdraw and deposit tion. The freedom to be agile and active ownership of its banking infrastructure cash across Serbia’s ATM network, which is key – to be able to set the terms and and licence. Under the terms of the includes Telenor-branded cashpoints. bundle our propositions,” says Fredheim. agreement, rival bank Société Générale But it is its mobile banking application When you think about it, there are took KBC’s base of 81,000 consumer that has drawn most early attention. drawbacks too, and plenty of naysayers and business customers. “There is nothing else like it,” suggests to articulate them. Ovum analyst Eden 7KLVWKUHHZD\DUUDQJHPHQWVLPSOLÀHG Telenor Serbia Chief CEO Ove Fredheim. Zoller makes clear the trade-off: “It’s and, to an extent, limited the bank ‘clear- Among its distinguishing marks, the unusual; Telenor Serbia obviously has ing’ process for Telenor Serbia. Custom- app allows users to instigate payments WKHUHYHQXHEHQHÀWVWKDW\RXKDYHDV ers were taken off its books, and it was by phone number or email address – us- a bank provider with a licence, but it freed to develop its service and front-end ers can select a recipient from their ad- DOVRFDUULHVDOORIWKHÀQDQFLDOULVNDQG interface, integrating this with its core dress book and the app will issue them vulnerabilities.” banking system. That process has taken with an SMS containing a link to enter She adds: “For Telenor, it’s a very 10 months. their account details and complete the bold step. But I think most operators It is offering a multi-currency current transaction. “People remember phone will be cautious about making that level account with a contactless debit card numbers; they don’t remember bank of investment; I doubt they’ll want to to all citizens, whether or not they are numbers,” explains Fredheim. It appears take such risk.”

10 | european communications | eurocomms.com M-COMMERCE

Orange, which debuted its Orange Fi- Poland’s technology infrastructure is The power shift away nanse service in conjunction with mBank advanced, also. Smartphone penetration from operators? in Poland during October, has taken a jumped 15 percent in 2013 to 35 percent. different path. Three million Poles have access to mobile There are big forces at play that could well The France-based operator’s VP of Mo- banking via a smartphone or tablet. render all the approaches by operators bile Payments and Contactless, Thierry Says Orange’s Millet: “The Polish redundant. The developments in mobile Millet, explains: “mBank provides bank- market is more advanced in terms of payments hint at a power shift away from LQJSURGXFWVDQGNQRZKRZLQWKHÀQDQFH contactless payments than any other operators towards the banking sector. business. Orange brings its expertise country in Europe.” The rise of host-card emulation (HCE) in terms of mobile services and sales, The Serbian banking sector is a since the turn of the year has seen the secure alongside our strong brand, customer laggard compared with the Polish set-up. element, required to encrypt contactless base and a wide distribution network. Some 80 percent of transactions are still payments using a mobile phone, transfer from This combination builds a competitive performed in cash. Just 13.5 percent of a tamper-resistant chip on a SIM card to an advantage for both partners.” LWVSRSXODWLRQUXQVWKHLUÀQDQFHVRQOLQH OS-level application in the cloud. Gartner Research Vice President according to the National Statistical Gyanee Dewnarain agrees there is a 2IÀFH$QG\HWWHFKQRORJLFDOO\DSSH- and ATL communications can help. Apart clear case to be made for the partnership tite is good. Half of its population uses from driving sales, it increases the credi- model. She says: “Joint marketing can Facebook, and smartphone penetration ELOLW\RIDQHWZRUNRSHUDWRUDVDÀQDQFLDO grow awareness of the service faster and is spiraling upwards. services provider,” says T-Mobile Poland the combined footprint means a broader Each operator’s go-to-market strategy Director of Financial Services Partner- distribution network. Linking banking with is dictated by their market conditions. ships Jacek Komaracki. mobile airtime services can also result in T-Mobile Poland, in alliance with Alior Regardless, it is utilising its considera- more interesting business models.” Bank, has hit the ground running since ble marketing muscle and getting noticed. launching in June. And it’s not the only one. The launch Different markets, different approaches Bayern Munich striker Robert Le- of Orange Finanse in Poland has been Either way, by partnership or acquisition, wandowski, the poster boy of Polish attended by a nationwide advertising the logic behind these operators’ entry football, has fronted its above-the-line campaign, including TV spots and outdoor, into banking in markets like Poland and campaign. Its promotional offers have been internet and social media activity. Serbia appears clear. Both markets fea- strong: cashback on credit card transac- In contrast, Telenor Serbia has sought ture cluttered banking sectors, struggling tions, no charges on overdrafts, no charges to link its propositions by offering new for growth and in need of consolidation. on money transfers, no fees for account EDQNFXVWRPHUVÀYHSHUFHQWDQQXDO There are 29 banks in Serbia, serving set-up, bonuses for loan repayments. interest on current accounts, and existing a population of seven million; there are It has received over 100,000 applica- mobile customers 50 percent off their 69 in Poland, serving 38.5 million. Polish tions for current accounts since launch, mobile contracts for two months, extend- OHQGHUVH[SHFWQHWSURÀWVWRULVHMXVW making it one of the market leaders in ing to six if they bank their wages with it. per cent this year; the National Bank of terms of current account acquisition. Its Gartner’s Dewnarain notes that 6HUELDVD\VEDQNLQJSURÀWDELOLW\LVDO- success comes down to a well-oiled sales Telenor Serbia is not doing “the crazy ready declining year-on-year, even before and marketing machine. [marketing] stuff” that its rivals in Poland the sector has got properly started. Its aggression in the market has been are doing. But she warns that it needs But the similarities end there. The noted. Gartner’s Dewnarain observes: to get to the point where it starts gaining 3ROLVKVORZGRZQUHÁHFWVLWVH[WUHPH “T-Mobile’s tactics have been crazily customers quickly. competitiveness; the Serbian reverse disruptive. It’s the correct approach – So how does Telenor consider its own speaks more of a lack of ideas and con- banking provides low margins so you approach; is it measured, or conservative? sumer appetite. need scale very quickly. It may have Fredheim says: “There’s no reason to do Indeed, Poland boasts as many active challenges with its margins in the short that [disruptive marketing]. The service bank accounts as people. Opening a term, but its strategy is to build scale and speaks for itself. We want to show the bank account could hardly be simpler it has gone for it.” power of bringing banking services to this as a result of Poland’s so-called ‘penny T-Mobile Poland takes issue with new smartphone interface, rather than transfer’ – a one pence transfer from an this portrayal of its rampaging tear-up just relying on aggressive pricing to bring existing bank account is enough to iden- through the Polish banking sector. “We customers in. There is work to educate the tify a customer, and approve them for a are far from being aggressive or impu- PDUNHWDERXWWKHEHQHÀWVRIFRQVXPHU new account. Orange Finanse even offers dent with any aspect of our activity. But banking. I would suggest our approach is the service from a mobile phone. banking is about credibility and trust, well balanced; we’re in it for the long run.” ec

eurocomms.com | european communications | 11 SPONSORED FEATURE: ASTELLIA

Astellia showing fresh ingenuity for mobile industry

he cut-throat environment of mo- adds, and its capabilities were recently issues originate and resource is limited: we bile networks, where operators endorsed by a series of vendor benchmark FDQFRYHUWKHZKROHQHWZRUNZLWKDXQLÀHG do battle for subscribers and tests at a Tier One operator - “our solution solution, across radio and core”. Custom- T expectations of service are high, and our expertise came out top, especially HUVEHQHÀWIURP$VWHOOLD·VDQDO\VLVFDSDELO- has led to a similarly competitive market for its accuracy”, Queffélec says. ity and process both the control plane and to provide the network and subscriber Radio network optimisation is not a new the user plane, something which Queffélec intelligence that operators need to keep DUHDIRU$VWHOOLD4XHIIpOHFVD\VEXW,Q- says is crucial for an understanding of the WKHLUQHWZRUNVZRUNLQJHIÀFLHQWO\DQGWKHLU genia’s expertise is such that the company subscriber experience, so that the operator customers loyal. is able not only to analyse radio conditions FDQÀQGRXWZKDWVHUYLFHVDUHEHLQJXVHG Leading the network and subscriber in- as close as possible to subscribers but and how often. These capabilities have WHOOLJHQFHÀHOGLV)UHQFKÀUP$VWHOOLD LWFDQDOVRUHFRPPHQGDQGUHFRQÀJXUH been recognised by the industry and Nova has been a year of evolution for the com- network equipment parameters. The fact has recently been shortlisted for the LTE pany, a period which has seen it acquire ZHQRZKDYH,QJHQLDRQERDUGPDNHVRXU 1RUWK$PHULFDDZDUGVIRU%HVW/7(&RUH complementary technologies, reinforce its position much stronger – we can cover Network Product and for the Telecoms footprint and round out its offering such from radio to core network, which is direct- DZDUGV·EHVW&(0SURGXFWV that it now, according to CEO Christian O\EHQHÀFLDOIRURXUFXVWRPHUVµ Queffélec, presents an end to end network $VLGHIURPLWVUDGLRDQGJHRORFDWLRQ Crunching the customer data and customer experience management SHGLJUHH,QJHQLDDOVRVWUHQJWKHQV$VWHO- $VWHOOLDKDVGHYHORSHG6DWL;DFXVWRPHU solution for both radio and core networks lia’s capabilities through its expertise in experience index which correlates radio net- which its competitors struggle to match. Self Organising Networks. This is of course work metrics and end-user perception infor- an area which every operator is currently mation. Customer experience metrics such ORRNLQJDWVR,QJHQLD·VYHQGRULQGHSHQG- as blocked calls, dropped calls, coverage Our solution and our ent SON capabilities is a valuable asset for issues, voice and data quality are correlated $VWHOOLDWREHDEOHWRRIIHULWVFXVWRPHUV with technical radio measurements such as expertise came out top, 7KHRWKHUDVVHWWKDW,QJHQLDEULQJVWRWKH 56&3(F1WKURXJKSXW64,%/(57KHUH- especially for its accuracy party is its strong links and relationships sult is an advanced customer satisfaction in- ZLWKPRELOHRSHUDWRUVLQ/DWLQ$PHULFD,W dex that not only provides objective customer JLYHV$VWHOOLDWKHRSSRUWXQLW\QRWRQO\WRUH- perception indicators but also precise radio “Leveraging Ingenia Telecom’s expertise inforce its current footprint, but also opens parameters to adjust network conditions and 7KHDFTXLVLWLRQRI6SDQLVKÀUP,QJHQLD the door to new markets. Says Queffélec: enhance customer experience. 7HOHFRPLQ)HEUXDU\LVDODUJHSDUWRIWKH” “Spanish culture is very close to Latin Queffélec adds: “Not only are we able reason why Queffélec is so excited about $PHULFDQFXOWXUHVR,QJHQLDKDVKDGJUHDW to measure customer experience for any WKHIXWXUHSURVSHFWVIRU$VWHOOLD,QJHQLD success on the continent, and we’re al- subscriber using any mobile from any which is already completely integrated into ready seeing a lot of interest from Europe, location, the information also gives us WKH)UHQFKFRPSDQ\VSHFLDOLVHVLQQHWZRUN 1RUWK$PHULFDDQGWKH0LGGOH(DVW what we need to leverage and optimise analysis and radio optimisation solutions 7KHDFTXLVLWLRQRI,QJHQLDDOVRFRP- the network, so these can be very powerful for mobile operators. Queffélec explains: SOHWHV$VWHOOLD·V1RYDVROXWLRQ1RYDLV tools for technical as well as non-techni- ´,QJHQLDVSHFLDOLVHVLQFDOOWUDFHVLWJDWK- the company’s real-time monitoring and cal teams at operators. The information ers information from network elements on troubleshooting solution for multi-technol- is provided in real time and means that the different calls or data sessions gener- ogy mobile networks so the integration of RSHUDWRUVKDYHWKHFDSDELOLW\WRUHFRQÀJ- ated by any subscriber. There’s no need to ,QJHQLD7HOHFRP·VWHFKQRORJ\HQDEOHVWKH ure the network and solve problems in use any monitoring, probe-based solution, company to deliver on its end to end net- record time. Our position of being vendor so it comes as a complement to our solu- ZRUNYLVLRQ,WFDQRIIHUFXVWRPHUVZKDW independent for our monitoring solution WLRQ,W·VDYHU\FRVWHIIHFWLYHZD\WRFRYHU Queffélec asserts is “unique expertise in LVYHU\LPSRUWDQWIRUPRELOHRSHUDWRUV,W WKHUDGLRDFFHVVQHWZRUNµ2QHRI,QJHQLD·V 5$1RSWLPLVDWLRQWKHUDGLRQHWZRUNLV means that they are not dependent on most powerful features is geo-location, he ZKHUHWRRITXDOLW\GHJUDGDWLRQ their network vendors –we give them a

12 | european communications | eurocomms.com SPONSORED FEATURE: ASTELLIA

Christian Queffélec, co-founder and CEO, Astellia fully reliable view of network performance Nova is helping operators get the most behaviour and needs.” and customer experience. “ out of their network and customer data, 4XHIIpOHFVD\VWKDW$VWHOOLDKDVEHHQ says Queffélec, with Zain’s marketing team ZRUNLQJZLWKD6SDQLVK7LHURSHUDWRU Increasing Customer Care already using it to gain a deep understand- to optimise radio conditions alongside and Marketing efﬁciency ing of customer usage, and launch tailored KLJKVSHHGWUDLQOLQHV+HH[SODLQV $VWHOOLDKDVKHOSHGRYHUPRELOH RIIHUVWRVSHFLÀFFXVWRPHUVHJPHQWVDQG “Delivering a mobile service to custom- network operators since it was formed detect potential churners. ers on a train is always very challenging LQDQGLWKDVPRVWUHFHQWO\SXW – the high speed train obviously travels Nova into service to develop a customer Monetizing network data YHU\IDVWDQGLW·VYHU\GLIÀFXOWWRGLIIHU- LQVLJKWODEIRU=DLQ%DKUDLQSDUWRIWKH Queffélec points out that operators also entiate between the people on the train OHDGLQJ0LGGOH(DVWWHOHFRPVSOD\HU=DLQ have the opportunity to monetise the and the people around the railway track. *URXS,QWKHKLJKO\FRPSHWLWLYH%DKUDLQL .3,VWKDW1RYDGHOLYHUVDQG$VWHOOLDKDV We’ve developed some technology market, where mobile penetration is IRUH[DPSOHZRUNHGZLWKWKH2UDQJH%XVL- which allows us to identify the subscrib- 1RYD&DUHKDVUHGXFHGDYHUDJH QHVV6HUYLFHVRQ)OX[9LVLRQLWVELJGDWD ers on board the train and so address KDQGOLQJWLPH $+7 E\WRDQG offer for businesses and public authori- the problems they might face.” LQFUHDVHGÀUVWFDOOUHVROXWLRQ )&5 E\ ties which uses anonymised mobile net- This underlines the importance to WRIRU=DLQ%DKUDLQ7KHFRPSDQ\ ZRUNGDWDJDWKHUHGE\$VWHOOLD·VQHWZRUN PRELOHRSHUDWRUVRI$VWHOOLD·VDELOLW\WR says that agents can now really increase SUREHVWRDQDO\VHWUDIÀFDQGSRSXODWLRQ JHQHUDWHJHRORFDWHG.3,VDQGWKHLU customer satisfaction, reduce churn and movements by geographical area and impact on the customer experience, turn complaining customers into brand which businesses can use to adjust their says Queffélec. While geo-location is an DGYRFDWHV,QDGGLWLRQHVFDODWLRQRI sales and marketing plans. important tool to help network engineers issues to network operations team has, ,WFDQDOVREHXVHGWRPHDVXUHVHUYLFH interpret subscriber data to optimise the RQDYHUDJHEHHQUHGXFHGE\VLQFH levels in the enterprise market, says Quef- network, it can also be used for marketing, customer care teams now have a better félec, mobile operators can address those delivering vital information on where sub- knowledge of network related issues. key enterprise customers who demand scribers are using their mobiles and what 7KLVKDVPHDQWWKDW=DLQ%DKUDLQKDV very reliable connections and assess ser- WKH\DUHXVLQJWKHPIRU$VWHOOLDLVDOVR seen a drop in its customer service operat- vice levels. “The operator can measure the using the technology for special occasions LQJH[SHQGLWXUH,W·VDOVRKHOSLQJWKHFRPSD- customer experience, identify usage and like large sporting events which make for ny to address its marketing needs, says Que- share this with the technical teams so that challenging radio frequency planning so ffélec, as it can get a better understanding they are able to optimise the network in that operators can be sure that they can RILWVVXEVFULEHUXVDJH´,QDQRWKHULQLWLDWLYH key areas that are used by corporate cus- cope with the inevitable surges and spikes ZLWK=DLQ*URXSZHDUHKHOSLQJWKHPUHÀQH WRPHUV,WDOVRPHDQVWKHRSHUDWRUFDQEH LQQHWZRUNWUDIÀFWKDWRFFXU their segmentation based on usage criteria, proactive in its reporting to key customers, ´%\UHO\LQJRQ$VWHOOLD·VJOREDOO\SURYHQ while respecting subscriber privacy set by sending customer experience reports on a solution and unparalleled consulting data & privacy protection agencies. We’re monthly basis that show that the service services, mobile operators are capable of looking at what applications the subscribers level thresholds in their agreements have turning data into market differentiation, are using, when they’re using them, how EHHQUHVSHFWHG$QGWKHRSHUDWRUFDQDOVR QHZUHYHQXHVWUHDPVRUHIÀFLHQF\JDLQV regularly, where they’re using them and so provide detailed information about usage that impact their revenues positively. on, in order to create customer segments for to enterprise customers so that these cus- There are huge opportunities ahead for Zain to adapt and tailor its data plans.” tomers can better understand their users’ us,” says Queffélec.

eurocomms.com | european communications | 13

CMO of the year Introducing European Communications’ new award

CMO OF THE YEAR AWARD: SPONSOR’S FOREWORD

Hailing the rise of the operator CMO

Amdocs Chief Marketing Ofﬁcer Chris Williams discusses why, amid myriad changes in the telecoms industry and beyond, the role of the CMO is one of the most dynamic and important

elect any industry and the WHOHFRPVVHUYLFHV²WKLQN%<2'FORXG trend is the same – Chief Mar- VWRUDJHRUWKHJURZWKRIHQWHUSULVHDSSV NHWLQJ2IÀFHUVDUHEHFRPLQJ ²EHFRPHVFRPPRQSODFH S PRUHLPSRUWDQWWRWKHEXVL- ´7KHUHUHPDLQELJGLIIHUHQFHVDURXQG QHVVHVWKH\ZRUNIRUDQGWKHVWUDWHJLF UHTXLUHPHQWVEXWEXVLQHVVSHRSOHDUH GHFLVLRQVWKH\WDNH FRQVXPHUVWRRµVD\V:LOOLDPV 6RVD\V&KULV:LOOLDPVKLPVHOI*OREDO %XWZKHWKHUVHUYLQJWKHUHWDLORUHQ- &02RI$PGRFVDPDQZLWKRYHU\HDUV WHUSULVHFXVWRPHUWRFHPHQWWKHLUSODFH RIH[SHULHQFHLQWKHPDUNHWLQJZRUOG DWWKHWRSGHFLVLRQPDNLQJWDEOH&02V %XWQRZKHUHLVWKLVWUDQVIRUPDWLRQPRUH PXVWXSJUDGHWKHLUVNLOOVHWV DSSDUHQWWKDQLQQHWZRUNRSHUDWRUV ´&02VPXVWEHFRJQLVDQWRIZKDW·V 7KHSULQFLSDOUHDVRQ"&XVWRPHUVDUH WDNLQJSODFH7RHTXLS\RXUVHOIIRUWRGD\·V FKDQJLQJKRZWKH\FRQVXPHDQGDUHEH- PDUNHWSODFH\RXKDYHWRXQGHUVWDQGWKH FRPLQJPRUHGHPDQGLQJDERXWKRZWKH\ QDWXUHRIQHZEX\LQJSDWWHUQVDQGLQ ZDQWWREHVHUYHGDVWKH\WXUQWRPRUH SDUWLFXODUWKHPLOOHQQLDOVµVD\V:LOOLDPV PRELOHPRUHVRFLDOVROXWLRQV 7RGRWKLV&02VQHHGWREHSDUWVRFLDO 2IFRXUVHWHOFRVDUHZHOODZDUHRIWKLV DQWKURSRORJLVWSDUWSROLWLFDOVFLHQWLVWDQG SKHQRPHQRQJLYHQWKHLUSODFHLQWKHGLJL- SDUWWHFKQRORJLVW:LOOLDPVEHOLHYHV WDOHFRV\VWHP7KH\KDYHVHHQFXVWRPHUV PLJUDWHWR277VHUYLFHVGHOLYHUHGRQWKHLU QHWZRUNVHQJDJHZLWKWKHPYLDVRFLDO Customers’ buying WKDQMXVWPDUNHWLQJ:LOOLDPVUHFRP- PHGLDDQGEHQHÀWIURPIDOOLQJUHJXODWRU\ PHQGVEULQJLQJLQSHRSOHHVSHFLDOO\ EDUULHUVWKDWHQDEOHWKHPWRFRQVXPH patterns are changing PLOOHQQLDOVWRSURYLGHVRPHUHYHUVH PRUHIRUOHVVRQIRUHLJQVRLO and they are becoming PHQWRULQJ&ORVHPRQLWRULQJDQGDQDO\VLV ([SODLQV:LOOLDPV´&XVWRPHUV·EX\LQJ RIGDWDLVDOVRDPXVW SDWWHUQVDUHFKDQJLQJDQGWKH\DUHEH- more empowered %XWLW·VQRWMXVWSHRSOHWKDWDUH FRPLQJPRUHHPSRZHUHG,QVRPHFDVHV FKDQJLQJHLWKHU7KHHYROYLQJLQWHUQHW WKH\DUHQRORQJHUEUDQGOR\DO7KH\QR ´ RIWKLQJVVSDFHPHDQV&02VKDYH ORQJHUFRPSDUHWKHH[SHULHQFHWKH\JHW ´7KHUHLVDKXJHDPRXQWRIWHFKQRORJ\ WRXQGHUVWDQGWUHQGVVXFKDVWUDIÀF IURP\RXRQO\ZLWK\RXUGLUHFWFRPSHW- HQDEOLQJFXVWRPHUVVRZHRZHLWWRRXU- SDWWHUQVLQRUGHUWRFDSWXUHDQGPRQLWRU LWRUVEXWZLWKWKHOHDGLQJH[SHULHQFHV VHOYHVWRXQGHUVWDQGWRROVVXFKDVGDWDµ DQGPRQHWLVHZKDW:LOOLDPVFDOOV´WKH WKH\DUHXVHGWRIURPFRPSDQLHVOLNH DQDO\WLFVLQRUGHUWRWDUJHWWKHPEHWWHU FRQQHFWHGLQWHOOLJHQFHµ $PD]RQ$SSOH8EHUHWFµ :HPXVWEHPRUHWLPHO\PRUHUHOHYDQW +HVD\V´:HKDYHDQLQFUHGLEOHULFK- $VRSHUDWRUVHYROYHIURPHQJLQHHULQJ DQGPRUHGLJLWDOLQQDWXUH&02VFRQWURO QHVVRIGDWDDWRXUGLVSRVDOEXWUHPDLQ SRZHUKRXVHVWKDWZHUHDOODERXWOD\LQJ DELJJHUSRUWLRQRI,7SURMHFWVDQGWKHUH- XQVXUHDERXWKRZWRXVHLWDOOµ RXWQHWZRUNVWREHFRPHFXVWRPHUIDF- IRUHDUHEHFRPLQJDQHYHQPRUHFULWLFDO 7LPHLVRIWKHHVVHQFH:LOOLDPVDGGV LQJRUJDQLVDWLRQVWKH&02LVIURQWDQG LQÁXHQFHULQ,7GHFLVLRQV ´7KHUHLVDFRQÁXHQFHRIWKLQJVFRPLQJ FHQWUHRIWKLVWUDQVIRUPDWLRQ ´,W·VDOOSDUWRIUHWKLQNLQJWKHFXV- WRJHWKHUWKDWLVSXWWLQJPRUHSUHVVXUHRQXV 6D\V:LOOLDPV´&02VDUHWKH WRPHUH[SHULHQFH&02VQHHGWRPDNH WRGHOLYHU7KHUHVKRXOGEHDVHQVHRIXUJHQ- SHRSOHZKRUHSUHVHQWWKHYRLFHRIWKH LWPRUHHQJDJLQJ7KHPRUHVHUYLFHVD F\DQGDVD&02WKLVLVVRPHWKLQJ\RXQHHG FXVWRPHUWRGD\µ FRQVXPHUEX\VWKHOHVVOLNHO\WKH\DUH WRHPEUDFH²LW·VQRWEXVLQHVVDVXVXDOµ &UXFLDOO\LW·VQRWMXVWUHWDLOFXVWRPHUV WRFKXUQ$WWKHHQGRIWKHGD\LW·VDÀJKW %XWKHFRQFOXGHV´7KLVLVWKHPRVW EXWWKHLUHQWHUSULVHHTXLYDOHQWVDVZHOO IRUZDOOHWVKDUHµ H[FLWLQJWLPHWREHLQPDUNHWLQJ7KHGLV- $FFRUGLQJWR:LOOLDPVWKHGLIIHUHQFHV $WDPRUHPXQGDQHOHYHO&02VDOVR UXSWLRQWKDWLVKDSSHQLQJRXWWKHUHRIIHUV EHWZHHQWKHWZRDUHVWDUWLQJWRVKULQNDV QHHGWRWDNHRQJHQHUDOPDQDJHPHQW DIDQWDVWLFRSSRUWXQLW\IRU&02VDQGWKH WKHFRQVXPHULVDWLRQRIHQWHUSULVH,7DQG FRQFHSWVDQGVNLOOVZLWKDEURDGHUYLHZ RSHUDWRUVWKH\ZRUNIRUµ ec

eurocomms.com | european communications | 17 CMO OF THE YEAR AWARD

MTS, Play, Telenor Denmark and Vodafone M2M make the shortlist

European Communications assembled an independent judging panel to ﬁnalise a shortlist and decide on the winner.

Criteria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

Shortlist

Bartosz Dobrzynski Michelle Hoyle, CMO at P4 (Play) Head of Global M2M %DUWRV]KDVEHHQ&02RI3OD\ Marketing at Vodafone VLQFH3OD\FODLPVWREH 0LFKHOOHKDVOHG9RGDIRQH·V WKHPRVWVXFFHVVIXOIRXUWK 00PDUNHWLQJHIIRUWVVLQFH RSHUDWRULQ(XURSHUHDFKLQJ DIWHUDUULYLQJIURP FORVHWRSHUFHQWVXEVFULE- &HQWXU\/LQN6KHKDVKHOSHG er market share and nearly WKH8.EDVHGRSHUDWRUWRWRS ½ELOOLRQUHYHQXHV%DUWRV] 0DFKLQD5HVHDUFK·V´:RUOG·V DQGKLVWHDPKDYHODXQFKHG OHDGLQJ00VHUYLFHSURYLGHUµ VHYHUDOEUHDNWKURXJKRIIHUV UHSRUWLQWHUPVRIQXPEHURI LQFOXGLQJWKHÀUVW*/7(DQG 6,0V7KHUHVHDUFKÀUPVDLG ÀUVWVKDUHGGDWDIDPLO\SODQV 9RGDIRQHZDVWKHIDVWHVWJURZ- LQ3RODQG'HVSLWHWKHORZHVW LQJRIDOOWKHRSHUDWRUVLQWKLV EXGJHW3OD\·VDZDUHQHVVLV VSDFH00UHYHQXHVZHUHXS PXFKKLJKHUWKDQRILWVFRP- SHUFHQWLQ4WKLV\HDUDIWHU SHWLWRUVDQGLWKDVWKHKLJKHVW VLJQLQJGHDOVZLWKEOXHFKLS QHWSURPRWHUVFRUHRIWKH FRPSDQLHVVXFKDV$XGL OLIW FRXQWU\·VIRXUPDMRUPRELOH FRPSDQ\.RQH RSHUDWRUV

18 | european communications | eurocomms.com CMO OF THE YEAR AWARD

Judging panel

Peter Abraham, Marc Smith, EVP of Econsultancy European Communications Editor 3HWHUKDVEHHQDW(FRQVXOWDQF\ZKLFKDGYLVHVEXVLQHVV 0DUFKDVEHHQ(GLWRURI(XURSHDQ&RPPXQLFDWLRQVVLQFH RQGLJLWDOWUDQVIRUPDWLRQRQOLQHPDUNHWLQJDQGHFRP- DQGDOVRRYHUVHHVVLVWHUWLWOH0RELOH(XURSH PHUFHIRURYHU\HDUV+HLVSDUWLFXODUO\UHVSRQVLEOH IRU&RQVXOWDQF\DQG6NLOOV Caroline Taylor, VP Marketing and CMO at IBM Europe Sarah Bentley, &DUROLQHOHDGVWKHWHDPVUHVSRQVLEOHIRUDOODVSHFWV Managing Director of Accenture Digital RIPDUNHWLQJFRPPXQLFDWLRQVDQGFLWL]HQVKLSIRU,%0 )RUPDOO\D93DW%7*OREDO6HUYLFHV6DUDKQRZKHDGVXS WKURXJKRXW(XURSH6KHKDVEHHQZLWKWKH,7FRPSDQ\ $FFHQWXUH'LJLWDO6KHVD\VKHUSDVVLRQLVWUDQVIRUPLQJ VLQFH WKHZD\EUDQGVLQWHUDFWZLWKSHRSOH Andy Tiller, Andrew Davidson, VP Corporate Product Marketing at AsiaInfo Head of Marketing at Fujitsu $QG\MRLQHGWHOHFRPVVRIWZDUHDQG,7YHQGRU$VLD,QIRLQ $QGUHZGULYHVWKHPDUNHWLQJVWUDWHJ\IRU)XMLWVX·V1HW- WRFUHDWHDJOREDO3URGXFW0DUNHWLQJIXQFWLRQEDVHG ZRUN6ROXWLRQVSRUWIROLR+HKDVSUHYLRXVO\ZRUNHGIRU RXWRIWKHQHZ(XURSHDQ+4RIÀFHLQ&DPEULGJH8. &LVFRDQG1H[WLUD2QH

Vasyl Latsanych, Lars Thomsen, CMO at MTS CMO at Telenor Denmark 9DV\OKDVEHHQOHDGLQJ5XV- /DUVKDVPDGHDELJLPSUHVVLRQ VLDEDVHG076·PDUNHWLQJ VLQFHMRLQLQJ7HOHQRUIURP.0' HIIRUWVVLQFH7KHFRXQ- PRQWKVDJR$ORQJZLWKKLV WU\·VOHDGLQJPRELOHRSHUDWRULV WHDPKHKDVGUDVWLFDOO\VLPSOLÀHG JURZLQJFXVWRPHUQXPEHUV XS WKHRSHUDWRU·VSURGXFWSLSHOLQH SHUFHQWWRPLOOLRQLQ IURPSODQVWR+HKDV 4 PRELOHVHUYLFHUHYHQXHV ZRUNHGZLWK,7DQG2SHUDWLRQVGH- XSSHUFHQWWR58%ELO- SDUWPHQWVWRGHOLYHUWKHFKDQJHV OLRQ½ELOOLRQ DQG$538 XS DOOZKLOHLPSURYLQJFXVWRPHUH[SH- SHUFHQWWR58%½ ULHQFHPHWULFVDQGVDYLQJ½P 9DV\OZKRVHYLHZVDUHDUHJXODU VDYLQJVVRIDU7HOHQRULVWKHRQO\ IHDWXUHRQ076ÀQDQFLDOUHSRUWV 'DQLVKRSHUDWRUWRODXQFKIDPLO\ KDVLQWURGXFHGLQQRYDWLYHSODQV SODQVDQGKDVEHHQYHU\VXF- VXFKDV´0RGHPIRUUXEOHµ FHVVIXODWJURZLQJWKHHQWHUSULVH DQG´7DEOHWIRUUXEOHVDGD\µ FXVWRPHUEDVHG²QHWDGGLWLRQV WDULIIVDQGFDPSDLJQV KDYHEHHQUHFRUGHGHYHU\PRQWK IRUWKHSDVWWZR\HDUV

eurocomms.com | european communications | 19 CMO OF THE YEAR AWARD

Marathon man wins CMO of the Year award, urges telcos to focus on digital players not each other Telenor Denmark CMO Lars Thomsen gave his reaction to winning the award and shared a few of his secrets with Marc Smith

HOHQRU'HQPDUN·V/DUV7KRP- YDOXH1RZZHDUHFRPSHWLQJZLWK,7 RQZKDWFXVWRPHUVQHHGDQGLW·VQRW VHQKDVEHHQFURZQHGWKH FRPSDQLHVDQGFRPSHWLWRUVDUHFRPLQJ DOLJQHGZLWKZKDW>7HOHQRU@LVWU\LQJWR LQDXJXUDO(XURSHDQ&RPPXQL- DIWHUXVµ EHDVDFRPSDQ\:HZDQWWREHORYHG T FDWLRQV&02RIWKH0LFURVRIW2IÀFH@µ DPELWLRQVLQWRLQWHUHVWLQJSURSRVLWLRQVµ ]Watch AsiaInfo’s Andy Tiller discuss the 7KRPVHQUHSOLHV 7KRPVHQH[SODLQV future possibilities for CMOs of operators The net result is that he is changing ´7KHWUDGLWLRQDOWHOFRDSSURDFK KRZHQGXVHUVYLHZDWUDGLWLRQDOQHWZRUN VHHPVWREHWRWZHDNSULFHSODQVDQG The European Communications CMO of the RSHUDWRU7KRPVHQVD\V´&XVWRPHUV WKHQPDUNHWWKHPDJJUHVVLYHO\,GRQ·W Year award 2014 was kindly supported by ORRNDWXVDQGVHHZHDUHDGGLQJPRUH XQGHUVWDQGWKLVDVLW·VQRWUHDOO\EDVHG Amdocs and AsiaInfo.

20 | european communications | eurocomms.com CMO OF THE YEAR AWARD

Telenor Denmark’s Lars Thomsen accepts his award from Amdocs’ Chris Williams

for them. He says that new technology “There is a chance to provide an then you think about the narrow target “often doesn’t change our customers’ emotional bond with our customers, for and big budgets that they have. lives dramatically”. example. It’s not as hard as sending man “Some of the retailers are very effec- Nevertheless, there is one emerging to the moon but it will take time and we tive when it comes to communicating tech trend that is radically altering how still have to win over customers.” with customers. Nike, Audi and Volvo Telenor Denmark goes about its business. Although far from being the worst have done some interesting stuff. I ad- Big data is, Thomsen says, a huge brands in the wider business space – mire some NGOs for being to create that change affecting the telecoms space. He indeed, there are four operator brands in emotional bond as well.” explains: “The data we have about our the top 20 places of BrandZ’s Most Valu- Away from the office, Thomsen is a customers enables us to communicate able Global Brands of 2014 – telcos have marathon runner but admits it is tough to with them in much more relevant ways.” some way to go to catch up with the best. combine the two. He says the relationship is becoming Google, Apple, IBM, Microsoft and His parting message to other CMOs? more one-to-one and less about big McDonald’s top the BrandZ index. AT&T “Focus on creating value for customers advertising campaigns. “When custom- is the top telco brand at number eight. and look broadly at the value chain. ers come to us they are ready to do Outside of telecoms, Thomsen admires Finally, there is fierce competition with business. We have to build on that and a number of companies from a marketing digital players and we should, as an in- make dialogue more interesting at an perspective. He says: “Some of the luxury dustry, be focusing our energies on these individual level. brands you look at and say ‘Wow!’ but guys not each other.” ec

eurocomms.com | european communications | 21 Batelco Global Solutions gives your business direct world-wide connectivity

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To ﬁnd out how Batelco can help you grow to and from the MENA region, please contact the Global Solutions team today: [email protected] batelco.com Special report MANAGED SERVICES

Contents

24 Survey: Operators looking for value in shrinking pool of managed services providers

29 More managed services, less providers, please Vodafone Germany’s Head of Sourcing Transformation discusses deals, partnerships and why he’s optimistic about the future

30 How to choose the right MSP 29 It may be one thing to identify that your business has a need to outsource a part of its business operations but the keys to ensuring the next stage

32 How to structure an operator team to succeed in managed services For operators, the personal counts just as much as the practical when it comes to working with a managed services provider

32 SPECIAL REPORT: MANAGED SERVICES

Survey: Operators looking for value in shrinking pool of managed services providers Managed services, particularly cloud-related, continue to grow in importance, but can operators ﬁnd added value as the vendor market contracts?

he industry remains convinced that telco managed services are Fig.1 How does the number of managed services increasing in importance. In our deals you have signed in 2014 compare to 2013? second annual survey into this T We’ve signed space, almost eight in 10 respondents 53% We’ve 47% more or less the same agree with this view. signed more deals number of deals in Over half (53 percent) of operator in 2014 than 2013 respondents said they had signed more 2014 as in 2013 details in 2014 when compared with 2013. Not one operator said fewer deals had been signed (See Fig. 1). Said one respondent: “The importance is increasing although I think the service provider customers/enterprise market needs more convincing arguments as to the real impact of *Operator respondents managed services on their bottom line rather than whitepapers from the vendor community. Fig.2 What is the main benefit you see “I have heard some service providers managed services providing today? mention it as a panacea to all their woes but I feel it’s an excuse for not confront- 51% Financial (reduced opex/ ing the reality of providing customers capex, increased margins) what they really want.” 7KLVLVUHÁHFWHGE\WKHIDFWWKDWD Increasing operational majority of operator respondents (51 per- 48% efficiencies FHQW VWLOOYLHZÀQDQFLDOUHDVRQVZKHWKHU its reduced opex/capex or increased Supplementing in-house PDUJLQVDVWKHPDLQEHQHÀWWKDWPDQ- 41% aged services provide (See Fig. 2). knowledge and expertise This was closely followed by an increase in operational efficiencies 38% Competitive (49 percent) and supplementing differentiation in-house knowledge/expertise (40.5 percent). These mirror the findings of 32% Improving customer 12 months ago, but the gap between experience financial and other benefits has nar- rowed significantly. 28% Reducing time to market Less than a third said improving cus- for products and services WRPHUH[SHULHQFHZDVWKHPDLQEHQHÀW while providing adjunct capabilities to 16% Providing adjunct stimulate innovation was chosen by just capabilities that we don’t have to 16 percent. stimulate innovation Said one respondent: “This is the crux *Operator respondents

24 | european communications | eurocomms.com SPECIAL REPORT: MANAGED SERVICES

Fig.3 What is the principal challenge that a of the issue. I could tick all the boxes here but I am yet to speak to anyone who managed service raises in your organisation? can provide clear evidence of providing VHUYLFHV>RXWVLGHRIWKHÀQDQFLDO@WKDW 19% Cultural clash EULQJDOOWKHRWKHUEHQHÀWVµ Coleago Consulting Director Chris Buist says: “I was surprised at the 19% Disagreement over process/ 2013 outcome, particularly the low ineffective SLAs ¶WLPHWRPDUNHW·EHQHÀW7KLV\HDULV PRUHOLNH,KDGH[SHFWHGLHWKDWÀQDQ- cial is, and probably always will be, the SULPDU\EHQHÀWEXWWKDWRWKHUEHQHÀWV 16% Unforeseen circumstances VXFKDVRSHUDWLRQDOHIÀFLHQFLHVDQG competitive differentiation are recognised as being almost as important. 13% Loss of control ,QP\YLHZWKLVUHÁHFWVWKHJHQHUDO maturation of the operators.” ,IWKHEHQHÀWVDUHURXJKO\WKHVDPH this year, then the challenges are not. In 13% Operator team not correctly structured to deal with MS 2013 the majority of operators said the biggest challenge was that their teams 10% Original objective not being met were not structured correctly to deal with a managed services project. 6% Original timeline not being met However, this year the joint most cit- ed principal challenges were disagree- 3% Other *Operator respondents ments over process/ineffective service

Fig.4 Which types of managed services contracts are you currently engaged in?

48% Cloud services 45% Fixed network (legacy) 45% IT systems 42% Customer service/management 36% Fixed network (next gen fibre) 36% Enterprise services 33% Mobile network (next gen 4G LTE) 27% OSS 24% BSS 21% M2M 21% Mobile network (legacy (2G/3G) 21% Big data analytics

*Operator respondents

eurocomms.com | european communications | 25 SPECIAL REPORT: MANAGED SERVICES

Fig.5 In your view, is there sufficient differentiation in the vendor market today compared to 12 months ago. differentiation in the vendor market currently A majority, 59 percent, thinks there is when it comes to managed services? VXIÀFLHQWGLIIHUHQWLDWLRQEXWWKHQXPEHU of people who think the opposite has increased from 35 percent in 2013 to 41 percent this year (See Fig. 5). Yes 59% Says Buist: “Clearly, MSPs have to keep working hard to differentiate WKHPVHOYHVZKLFKLVGLIÀFXOWLQDQ\ service business. Obviously there are differences between MSPs in terms of the domains that they cover but within DGRPDLQLWLVWKHQGLIÀFXOWWRFRPSDUH them because they all claim the same USPs: multi-vendor, customer experience focus and value-adding. It is probably only the last aspect (value-adding) where MSPs can truly differentiate themselves.” With vendors increasingly promising to add value to managed services contracts in the form of data analytics or customer experience tools, we asked operators whether MSPs are delivering such add- ons to their satisfaction. The answer is 41% No split exactly down the middle with (50 percent) saying yes and (50 percent) *Operator respondents saying no (See Fig. 6). level agreements (SLAs) and cultural clashes. Unforeseen circumstances Fig.6 Vendors are increasingly promising to add value (16 percent) was the next most popular (eg, with data analytics, CEM tools) to managed services answer (See Fig. 3). contracts. Are they delivering to your satisfaction? When it comes to the types of managed services deals that operators are 50% Yes 50% No engaged in currently, cloud was the number one service, chosen by 48.5 percent of respondents. IT systems DQGOHJDF\À[HGQHWZRUNZHUHWKHQH[W most popular areas that operators are outsourcing, gaining 45.5 percent of the vote (See Fig. 4).

The changing operator-vendor relationship There has been much discussion around the changing vendor landscape, with some big players, notably Alcatel-Lucent and Nokia, scaling back or transforming their managed services businesses. In light of this, it is perhaps unsur- *Operator respondents prising that operators think there is less

26 | european communications | eurocomms.com SPECIAL REPORT: MANAGED SERVICES

Fig.7 Would you say operators bringing more respondents (58 percent) said operators are looking at bringing more managed managed services contracts back in house services contracts back in house com- currently compare to 12 months ago? pared to last year (See Fig. 7). 6DLGRQHUHVSRQGHQW´$VÀUVWJHQHU- ation contracts end, operators are using the opportunity to change their operating 58% Agree model.” The number of contracts that operators are sourcing from a single vendor is being outpaced by those from a multi-vendor source. Seventy percent of all respondents said the number of contracts being signed that were multisource vendor was increasing, compared to 51 percent of respondents who said that was the case with the number of single source vendor contracts (See Fig. 8). Further, 25 percent of respondents said the number of single source contracts 42% Disagree being signed was decreasing, compared to 13 percent who said this was the case with *All respondents multisource vendor contracts.

Buist comments: “This is not a bad re- Fig.8 What are you seeing happen to the number of the sult, but MSPs should score much higher. Both MSPs and operators need to work following types of managed services contracts in Europe? harder on this: MSPs to deliver but operators need to articulate their expectations Single source vendor Multi source vendor better and hold MSPs to account.” But one respondent was much more 50% Increasing 76% sceptical: “[MSPs] will provide only those items leading to increased charges for themselves, probably [doing] nothing to serve the operator’s business objectives, margin, market share etc.” Meanwhile, there was a complete change around when it came to risk. The Decreasing vast majority of operators (61 percent) 25% 13% said they shared risk with their managed services provider for some, but not all contracts. Last year, exactly half said that they always shared risk with their MSP. Interestingly, the number of operators who said that their experience with managed services had caused them to 25% Staying the same 18% change the way they operate other parts of their organisation fell. While 85 percent said this was the case last year, just 66 percent said so in 2014. *All respondents What’s more, the majority of all

eurocomms.com | european communications | 27 SPECIAL REPORT: MANAGED SERVICES

%XLVWFRPPHQWV´7KLVÀWVZLWKZKDW Fig.9 Looking ahead, what do you anticipate happening has happened to outsourcing in other industries. Managed services maturi- over the next 12 months? W\JLYHVRSHUDWRUVFRQÀGHQFHLQWKHLU ability to manage MSPs so they shift their sourcing strategy from a single-source to “best-of-breed” approach and bring some We will increase spend on of the scope back in-house.” 62.5% managed services contracts

The future looks rosy for MSPs Looking ahead, just 12.5 percent of 25% Our spend on managed services operators said the amount they spend on contracts will stay the same managed services will decrease over the next 12 months. The vast majority, 62.5 percent, said they will increase spend 12.5% We will decrease spend on (See Fig. 9). managed services contracts Again, cloud remains the clear *Operator respondents favourite, with 61 percent of operators

saying they expect to acquire such Fig.10 Which types of managed services VHUYLFHV1H[WJHQÀEUH SHUFHQW ELJ do you anticipate acquiring in the future? data analytics (35.5 percent), customer experience, and enterprise services (all 61% Cloud services with 35.5 percent) were the next most popular choices (See Fig. 10). 39% Fixed network (next gen fibre) The big change from 12 months ago was M2M, which scored just 16 percent 35% Big data analytics this year compared to over 42 percent in 2013. There looks to be nascent interest 35% Customer service/management in outsourcing virtualisation technologies, with 13 percent of operators saying 35% Enterprise services they anticipate managed services in this area in the future. 32% Fixed network (legacy) Buist concludes: “Overall, this represents a ringing endorsement of the 32% IT systems value and critical need for managed services.” ec 29% Mobile network (legacy (2G/3G) About the survey 29% OSS

One hundred and three respondents took BSS 23% part in our online survey in October 2014. Exactly half were operators, 36 percent Mobile network (next gen 4G LTE) 23% were vendors, with the remaining 14 percent consisting of third parties such as 16% M2M analysts, consultants and regulators. From a geographical perspective, 73 per- 13% SDN/NFV cent of respondents were based in Europe, with 12 percent coming from the Middle 6% Other East and Africa. The remainder was evenly split between Asia-Paciﬁc and the Americas. *Operator respondents

28 | european communications | eurocomms.com SPECIAL REPORT: MANAGED SERVICES

More managed services, less providers, please

Vodafone Germany’s Head of Sourcing Transformation discusses deals, partnerships and why he’s optimistic about the future

aurabh Gupta is a man who has drawn from this and other managed looks at the world of telco man- services deals he is involved in? “Spend aged services in a glass half-full, more time in planning and be realistic Srather than half empty, way. with timings,” Gutpa advises. As the Head of Sourcing Transforma- “Also, look carefully at the underlying WLRQDW9RGDIRQH*HUPDQ\ZLWKDVSHFLÀF commercial model – we have found that focus on BSS/OSS technology, Gupta is there is more we could have done to take all too aware of the changes this part of account of scenarios where there is un- the telecoms industry is experiencing. expected demand. We have found some Increasingly dominated by a number limitations with existing models here and of small players as the likes of Alcatel-Lu- are looking to resolve them.” cent and Nokia in particular scale back or refocus their businesses, operators are having to pick and choose more We want success carefully from a smaller pool. Gupta says: “The landscape is chang- stories but also MSPs ing but I view it as an opportunity. The who are willing to work managed services providers (MSPs) that DUHVXUYLYLQJDUHÁH[LEOHHQRXJKWRDGDSW as a real partner to changing needs of the industry and “ understand the needs of operators. In Gupta also urges fellow operators to PDQ\ZD\V>WKLVVKLIW@DOLJQVZLWKZKDW look at the areas being targeted for man- we’re trying to do inhouse.” aged services and really drill down on the Vodafone Germany has what Gupta Gupta says the operator has upskilled reasons why it is being outsourced” – is it describes as “a handful” of vendors it in these areas for the past few years as for operational reasons or for cost? “You relies on for the provision of managed their importance to Vodafone’s strategic must be focused,” he warns. services. But he says the operator has a business aims grows and it feels it can When it comes to choosing an MSP, long-term goal to reduce the number of improve on reliability when compared to Gupta advises looking for those com- outside companies it works with. DQ063´%\LQYHVWLQJ>LQWKHVHDUHDV@ZH panies that bring in both the required “We want to streamline further and can help the Group as well,” Gupta says. expertise and experience of doing it with are in a continuous process of evaluat- But it’s not all bad news for the vendor another operator. ing what we need versus what we can community. Overall, Gupta says the oper- He explains: “We want success stories buy,” Gupta explains. “We are working ator is looking to increase the number of but also MSPs who are willing to work as a closely with other Vodafone Group areas it can use MSPs for. real partner. It’s not about how they gener- FRPSDQLHV>RQWKLV@VRZHGRQ·WKDYHWR In August 2013, it signed up Amdocs ate revenue or sell us a service. They need start from scratch.” to provide application development for to understand our reasoning and help us The exec says a key part of his job billing and customer care services. As to achieve our goals. It is partner manage- is assessing what areas the operator RQHRIWKHWHVWEHGVIRUWKHÀYH\HDU ment not supplier management.” can outsource and what areas it needs programme, Gupta says the results so Worryingly, he says the mentality of to keep in house. In particular, testing far have meant it looking to increase the MSPs selling services still exists although and operations for IT processes are scope of the arrangement at Group level KHTXDOLÀHVWKDWE\VD\LQJLW·VGHÀQLWHO\ two functions Vodafone is looking at and move from BSS into OSS. not a problem “across the board”. The keeping inhouse. So what are the main lessons Gupta industry can raise a glass to that at least. ec

eurocomms.com | european communications | 29 SPECIAL REPORT: MANAGED SERVICES

How to choose the right MSP

It may be one thing to identify that your business has a need to outsource a part of its business operations but the keys to ensuring the next stage – the selection of a partner and the implementation of that relationship leads to success – is quite another. David Craik reports

eutsche Telekom, Swisscom All about the cash and Telekom Austria are all Fully understanding the methodology and operators with many years of processes of the MSP is vital, but the D experience in managed servic- next step is all about the cash. “We look es deals. Thomas Nienaber, VP of Value at the potential savings from choosing a Chain Optimisation at Deutsche Telekom, prospective MSP. Why and how can they explains the operator has a two-supplier deliver better, faster and cheaper than strategy headed by Ericsson and Huawei we can do?” Nienaber says. but is still open to connecting with chal- According to Swisscom Spokesperson lengers and new entrants. &DUVWHQ5RHW]WKHÀUVWWKLQJWRFKHFNLV “I have relations up to board levels the scope of the managed service being at all the managed services providers RIIHUHGWKHSULFHPRGHODQGÁH[LELOLW\LQ (MSPs),” Nienaber says. “We have terms of the use of the service in ques- regular meetings. We go there and talk tion and the invoicing process. to them and get a feel about how they “Checking costs are vital. That in- think and know how they react. In short cludes the initial costs for the ramp up we know what they can and what they DQGVWHSÀ[HGFRVWVµ5RHW]VD\V´7KH can’t do.” very important. We want to know more ability of the service to be integrated into According to Fritz Klinger, Senior about how they handle employees affect- the existing portfolio and existing custom- Technical Expert at Telekom Austria, a ed by the managed services contract. er environment is also important.” JRRGVWDUWLQJSRLQWLQÀQGLQJWKHEHVW How do they handle the people integration Other critical areas to consider are the provider is to talk to fellow operators. and contractual relationship? It is about service’s lifecycle and associated costs “We look for operators who have deals internal communications, getting a clear such as adjustment to the integration with the MSPs we are interested in work- message over to employees about what interfaces. Klinger urges operators to ing with,” he explains. will happen and what they can expect.” consider vendors who can prove they “A vendor can give you one opinion of Nienaber agrees that an MSP must can provide good performance over the how a contract has gone but an operator have a solid track record and a leading OHQJWKRIDW\SLFDOÀYH\HDUFRQWUDFW gives you the other side. We want to position in the market. “We need global “It is a partnership which should have get the inside information on how they players to secure business continuity as the potential to expand beyond the origi- behaved during the transition process, the service grows,” he says. nal scope into other technical areas and which is the most critical phase, and for “With small, local providers there is also into other companies of our group,” the length of the contract. It’s quite com- always the potential that something he explains. mon for operators to talk with each other unexpected could happen like bankrupt- That means constant communications about these things even though they are cy. We need a global player who can step between the two parties during the our competitors. We are all living with the into a local situation.” FRXUVHRIWKHFRQWUDFWWR´GHÀQHLP- same vendors.” He adds the personal angle is also vital. provements and ensure the quality of the Klinger says TA looks initially for “It is all about people. There needs to be a operation is high and not going down”. vendors with a strong track record, relationship and trust between both com- Swisscom’s Roetz adds: “Also look preferably internationally. “We don’t want panies. If you don’t have trust from the at the solution’s degree of standardi- DQ063GRLQJWKHMREIRUWKHÀUVWWLPHRU start you have a problem,” he explains. sation. Will it be built up from scratch >RQH@KDVEHHQRQO\ZRUNLQJRQDORFDO “We visit with providers. We do work- ZLWKHDFKFXVWRPHURUGR,DOVREHQHÀW rather than global level,” he says. shops together with them and we visit from economies of scale and synergies “It is also about more than the tech- other operators they are working with. with other customers?” nology they will provide or their ability to Huawei did exactly that and that helped In terms of starting the process, Swiss- handle big data though both those are develop our relationship with them.” com advises fellow operators to carry on

30 | european communications | eurocomms.com SPECIAL REPORT: MANAGED SERVICES

in the same way as they would with any based on non-performance,” he explains. have been innovating behind the scenes.” YLWDOSURFXUHPHQW´'HÀQHWKHUHTXLUH- To create more understanding be- Nokia Networks now has two global ments from a business perspective and tween the operator and MSP, Deutsche delivery hubs in Lisbon and Chennai sup- select possible providers in a RFI/RFP Telekom has set up a series of work- SRUWHGE\ÀYHUHJLRQDOKXEVLQVWHDGRILWV process. You should include a proof of shops to better understand each other’s previous 49 delivery hub structure. concept in the selection process and processes and requirements so compa- “It helps with economies of scale and references,” the spokesperson says. nies can anticipate certain behaviours ensures the same high quality level across The process can’t be done in a hurry. and reactions on both sides. the globe,” says Adema. “We focus on au- 1LHQDEHUVD\VÀQGLQJDQGVHFXULQJ Swisscom sees the warning signs as tomation through innovations in iSON and the chosen MSP typically takes 13-15 being the provider’s size and existing cus- predictive operations. We centralise exper- months. “If you have a framework agree- tomer base, whether the provider is up to tise and follow the exact same processes ment in place before negotiations begin date with technological development, how including training and standardised tools. then issues such as liabilities are easier mature their onboarding process is and 7KLVLVEHQHÀFLDOIRURSHUDWRUVµ to do,” he says. whether they have the necessary interfac- Maintaining the quality of a contract es for the most important IT processes. over a period of time requires “very 2WKHUUHGÁDJVFRXOGEHDODFNRIFODU- We want strong governance”. To Nienaber this LW\RQÀQDQFLDOYLDELOLW\RUZKHUHGDWDLV PHDQVWUDLQLQJÀUVWOHYHOPDQDJHUV physically located and a lack of auditabil- managed services to and operational managers in how to safe- ity raising fears about revenue leakages. be their strategic core guard processes. Recently, there have been concerns He explains: “We need to be sure that raised over potential shrinkages in business WKHFRQWUDFWLVEHLQJIXOÀOOHG,WLVGLIÀFXOW the vendor market. Alcatel-Lucent has “ because you can’t document everything signalled a restructuring of activities The Finland-based vendor says it is gun- down in an agreement. It all comes back and jobs to cut costs and cope with ning for more growth in managed services to the relationship and trust aspect again competition from Ericsson and Huawei in now it has re-organised its structure. “We and that is why it is better to focus on a particular. Nokia Networks has also been are a lot more competitive” and differentiat- few good suppliers rather than too many.” more “selective” in its managed services ed from our competitors. We’ve secured 12 contracts in the last two years. new deals this year including new contracts Warning signs A-L’s Shift Plan was conceived to trans- and renewing expiring contracts across the So what of the warning signs that form the group into a specialist vendor globe,” Adema says. operators should be on the look out for? of IP, cloud and ultra-broadband access So what do these vendor structural “Negative feedback from another oper- technologies. A spokesman says: “Man- changes mean for operators choosing ator that the provider could not develop DJHGVHUYLFHVKDVQ·WEHHQDVSHFLÀF providers? Does it make it harder? WKHVHUYLFHHIÀFLHQWO\DQGZKRVHH[SH- action of The Shift Plan, but it has contin- One of the smaller vendors, MDS, urg- ULHQFHLVEHORZRXURZQZRXOGQRWÁ\µ ued the process began in 2012 to reduce es some caution. “An operator’s needs Klinger states. “They have to have a clear our exposure in this area by renegotiating remain the same. Fewer vendors doesn’t concept and methodology meeting our RUH[LWLQJSURÀWGLOXWLQJFRQWUDFWV,QVWHDG change either the end user or the cus- expectations. We want managed services we have concentrated our efforts on tomer’s requirements. Operators should to be their strategic core business so we agreements that are sustainable and can be more demanding in asking MSPs to can go forward with them. They have to complement or apply our strengths in IP, show their track record of operating a have a vision of the future. and ultra-broadband access.” vendor’s software and having a vendor “We look at suppliers’ KPIs over time Nokia Network’s Head of Professional relationship,” says Jennifer Fellows, SVP and see if they had proposed solutions Services Marketing Carlijn Adema says Product Marketing at MDS. “The less ven- with other operators that they did not it has transformed its managed services dors there are the more reasonable it is deliver. You can’t react soon enough if offering based around areas including to expect an MSP to already have worked you see them withdrawing from other automation, cloud-based delivery and with them.” contracts. There might be a wider prob- end user experience. Klinger offers a pragmatic view: lem there. “In the past operators thought about “The best vendors will survive. There “Also, we look at what are their delivery cost when it came to managed services but is competition in Europe and China but processes like and what is the engage- now it is more focused on getting a better vendors have to be clear where they ment of their suppliers and employees. customer experience,” Adema states. “As want to be in the future and to make Are they committed and motivated? We a result vendors have to be smarter and the necessary investment in developing can have exit criteria in the contracts PRUHHIÀFLHQW6RIRUWKHODVWWZR\HDUVZH equipment and methodology.” ec

eurocomms.com | european communications | 31 SPECIAL REPORT: MANAGED SERVICES

How to structure an operator team to succeed in managed services For operators, the personal counts just as much as the practical when it comes to working with a managed services provider. David Craik reports

perators admit that one of or, in other words, the future organisation work across the operator-MSP interface.” the biggest challenges that during the strategy phase of a deal. Fritz Klinger, Senior Technical Expert managed services raises in “You need a high-level communica- at Telekom Austria, says getting the MS O their organisation is creating tions plan. You have to communicate all RSHUDWLQJWHDPULJKWLVDGLIÀFXOWWKLQJ an in-house team capable of delivering a the changes staff will see,” he states. for a telecoms group to do. “Some of the successful project. “Operators should also be doing a organisations will have the expert knowl- Last year, 32 percent of respondents detailed design of the future organisation edge needed in the technical area but to the European Communications survey during the engagement phase to ensure you have to step up the team in a range said this was a major hurdle, while that all interfaces between the operator of areas including controlling, purchas- in 2014 the amount was 18 percent, DQG063DUHGHÀQHGDQGWKHUHWDLQHG ing, human resources, communications although that was still enough to be the organisation design is clear.” and accounting,” he states. joint top challenge. At this stage operators have to “From a very early stage we set out “This remains one of the biggest “balance the needs of the retained who will be doing what both locally and issues in managed services because organisation with the transferred service internationally. It is about people man- operators don’t devote enough time to delivery team”, according to Buist, and agement. For the local members of the redesigning their retained organisation should identify key staff and develop a team it is important to know what their and training people in their new roles,” retention policy. position will be after the contract has Coleago Consulting Director Chris Buist A well-planned “change project” should been signed.” says. “They also fail to identify the knowl- also be implemented during the transi- Klinger says TA created its own man- edge and skills that they will need and tion phase to ensure that the retained aged services contract template based therefore transition the wrong people to staff understand their new roles and on the framework and expertise of DLA the managed services provider (MSP). receive the training and development Piper, a legal consulting company based Another issue is that they fail to retain that they will require. in the UK and with extensive experience the knowledge that they will need to “Training plans must be developed and in managed services contracts. “This manage the MSP. There is no proactive implemented. Operators should also be helped us to ensure that we cover all rel- knowledge management process.” prepared to recruit additional people if evant topics and provided a very profes- So what should operators be doing? need be,” Buist says. “They should treat sional starting point for the negotiation What is best practice? Buist believes they knowledge as an asset and knowledge with our managed services partners,” must do a “high-level design of the to-be” management as a process that needs to Klinger explains.

32 | european communications | eurocomms.com SPECIAL REPORT: MANAGED SERVICES

Over at Deutsche Telekom, Thom- A managed staff. You also have to deliver the right mes- as Nienaber, the operator’s VP of sage to the right people at the right time Value Chain Optimisation, says the services partnership is so, in Germany for instance, you make sure approach is similar. “We have created like a marriage you talk to the local union as well.” DFURVVIXQFWLRQDOWHDP>ZLWK@DUDQJH of skills such as human resources and Like a marriage ÀQDQFHµKHH[SODLQV “often be on the critical path for making Aligning strategy is also key. “A managed ´,WLVDWHDPRISHRSOHVSHFLÀFDOO\ key decisions.” services partnership is like a marriage. trained in managed services. We also ask According to Fellows, the” operator 2YHUWKHWHUPRIDÀYH\HDUFRQWUDFW\RX our suppliers to do workshops with our team also needs to be motivated to work have to constantly align with the oper- team. We get to understand much better collaboratively with the MSP. “A move from ators strategy and make the necessary how they work because we have a chance internal IT to an MSP will normally mean adjustments,” Wong states. WRGLJGHHSHULQWRWKHVXEMHFWDQGÀQGRXW downsizing or staff transfers,” Fellows “You have to understand their strategy what else we need in terms of information.” explains. “The key team remaining needs at the very beginning so you can work out Nienaber believes that working closely to feel secure and not worry that their own a way to design it into an actual solution together in this way will shorten the dura- jobs could be similarly under threat.” and you have to understand the agenda tion of the managed projects by as much She urges that a close working rela- of the chief executive. What do they as 50 percent, thereby saving money. tionship is fostered between the operator want? Superior service and quality? Then “That’s a win-win solution for both par- and the MSP: “This is crucial to success we work towards that. You have to get ties. We are able to achieve our savings and this can be best developed by a pe- more involvement from the C-suite of an much earlier,” he says. “And at the same riod of co-location on a day-to-day basis. operator or a managed service partner- time the supplier has earlier revenues This way the MSPs staff gains a better ship will not be a success.” and less sales support costs.” understanding of the operator’s business Coleago’s Buist says an executive Swisscom spokesperson Carsten and each side knows quickly who to con- committee should be formed tasked with Roetz provides another perspective: “The tact when there is an issue to resolve.” reviewing and approving strategic plans, creation of a central service integrator The governance of the partnership monitoring relationships and resolving role is vital. It can manage the operation throughout the life of a deal is also major issues. This should meet on a of all managed providers, ensure uniform critical in ensuring that the new operator quarterly basis. service management and is thus the team succeeds. A management committee should central interface with end users.” Richard Wong, Huawei’s Global Man- sit underneath the executive reviewing He adds: “This service integrator aged Services Marketing Director, says operating plans, contract changes and team combines all the necessary IT nobody from the operator’s side should meeting monthly. process roles in a single team. You can take a back seat. “A lot of operators Operating committees should also also ensure better management of the believe that the moment a managed be formed tasked with the day-to-day managed service provider by means services team comes together it is a management of operational activities. of a standardised set of service level technical project,” he says. “But it isn’t. These committees should meet weekly agreements (SLAs).” It is something that every member of or bi-weekly. Jennifer Fellows of vendor MDS agrees the operator group should be involved in Of course these deals are all about peo- that SLAs are critically important. “They from the CEO to technical, commercial ple, some perhaps switching over from one can determine the success or failure DQGÀQDQFLDOPDQDJHPHQWµ business to another. This can create uncer- of the service and relationship with the At the heart of it all lies communica- tainty and that can put pressure on staff MSP,” she states. tions, particularly if the transition phase well-being, motivation and commitment. “You have to agree responsibilities with involves a transfer of staff. Having a raft of communications chan- the MSP as early as possible to under- “A clear communications channel must nels and a sound communications plan stand the requirements on the operator’s be set up,” Wong says. “It can be an emo- for staff and indeed all stakeholders is organisation. The operator team should tional and stressful time for those who are crucial. Buist suggests that on top of tra- be structured accordingly, retaining transferring. We identify the key staff in dif- ditional methods of internal and external people with key operational and business ferent areas such as transmission or radio communications such as meetings, press knowledge as required.” and then get them to buy into the changes. releases and newsletters other tools She adds: “Moving to a managed ser- That makes it easier for them to commu- such as collaboration labs’ should also vice does not absolve the operator of all nicate to their own staff. We also have be created to encourage team members responsibility, the much smaller operator communications workshops to introduce to get a better understanding of each team that interfaces to the MSP will Huawei and our different working culture to others needs both work and personal. ec

eurocomms.com | european communications | 33 SPONSORED FEATURE

13 percent CAGR (2012 to 2018). This growth rate equates to the deployment of approximately 10.5 million carrier grade hotspots globally by 2018. This means service providers will need to deploy tens of thousands of new carrier grade access points every year. Existing project management tools were designed in the days when service providers only needed to deploy a few hundred network elements per month. But today, project managers are faced with planning, deploying or upgrading thousands of network elements using tools which need to scale across multiple systems and hundreds or even thousands of people and projects. Even Business Process Management (BPM) systems are not enough on their RZQWKH\WHQGWREHLQÁH[LEOHODFNDJLOLW\ and take a lot of effort to adapt, upgrade and maintain. Often it is only the IT department who have the required skills to make the relevant changes necessary to keep the systems updated. And with thousands of projects which need to be kept on track and quickly adapted to meet requirement changes, this becomes a daunting task.

Creating network Project orchestration, not frustration As with orchestral arrangements such as Mozart’s beautiful Eine Kleine Nacht- harmony with musik, each player is given a part to play, which has been meticulously planned by the composer to synchronise with the project orchestration rest of the orchestra in order to produce the required melody and harmony. Large etworks today are growing New planning tools and improved RUFKHVWUDVEHQHÀWIURPDFHQWUDOOHDGHU faster than ever before; driven methodologies promise to overcome the conductor, who instructs and guides by the unprecedented demand many of the project challenges brought the musicians through the musical work Nfor more capacity, better cov- about by poor communications and lack to ensure they remain in close accord, erage and faster speeds. For the last 10 of coordination and connected process- taking their cues on when to play their years, service providers have been using es. Service providers need to become individual parts. The result is pure magic. more or less the same types of planning PXFKPRUHHIÀFLHQWDWQHWZRUNGHVLJQ Likewise in project management what and deployment tools and practices for build and upgrade. is needed is end-to-end project orches- rolling out new networks or upgrading tration across a wide-range of organiza- existing ones, but the days of making do Current tools just don’t scale tional groups, from project management, with spreadsheets and emails are over. If we take a look at the public access Wi- sites and estates to 3rd party manage- Service providers can no longer plan for Fi market for example, according to the PHQWÀQDQFHSODQQLQJHQJLQHHULQJ the massive growth in networks and new Wireless Broadband Alliance (WBA) and and network deployment teams. Project technologies with their existing tools and analysts Maravedis Rethink, the predict- orchestration is much more than just limited human resources. ed growth in carrier grade Wi-Fi is around ZRUNÁRZPDQDJHPHQW

34 | european communications | eurocomms.com SPONSORED FEATURE: AMDOCS

Orchestration ensures that all the post installation maintenance schedules trous. People working on complex projects systems, people and processes work in may be affected, such as routine battery need transparency of information, and harmony, leveraging a common plat- maintenance. Dynamic plan management being able to share the same data from a form to deliver a common process with allows for this to happen without radically common source helps to avoid mistakes, centralized information, which is shared reworking the plan. The plan is simply up- misunderstandings and general miscom- across all organizational groups and dated in real time by the project manager munication. Ultimately this approach users. By positioning an orchestration as the workaround is introduced. leads to long lead times, project delays platform on top of existing systems and increased operational costs. such as demand planning, BPM (which A fresh approach to A common information base for projects, KDQGOHVZRUNÁRZ QHWZRUNSODQQLQJ process management network resources and site inventory can inventory and workforce management Amdocs Network Rollout solution VLJQLÀFDQWO\LPSURYHSURMHFWHIÀFLHQF\DQG systems, service providers can leverage provides a complete end-to-end project ultimately service quality. Centralizing the the value of each through the end-to-end orchestration system for planning, design, network inventory system and integrating it coordination of processes, tasks and EXLOGDQGPRGHUQL]LQJRIPRELOHDQGÀ[HG with the planning and project management VSHFLÀFWHFKQLFDOIXQFWLRQVDVWKRXJKLW networks. It automates the planning and system, ensures everyone is working with were one single system. project management process by uniquely the same common information to get the combining automated technical design MREGRQHHIÀFLHQWO\ Let’s network! with dynamic project plan generation, One of the biggest challenges in the using reusable building blocks. Amdocs Empowering the ﬁeld force SDVWKDVEHHQWKHODFNRIHIÀFLHQWFRP- Network Rollout solution leverages the Last but certainly not least, the all-impor- munication between these organisation- factory production line approach, using WDQWÀHOGIRUFHZKRGHSOR\WKHQHWZRUN al teams. Individuals have often worked multiple reusable components to roll equipment or make changes to it during in silos, using their own preferred plan- RXWQHWZRUNVLQWKHPRVWHIÀFLHQWDQG network upgrades need to have all of the ning tools and spreadsheets, and only streamlined manner. It reduces network LQIRUPDWLRQWKH\QHHGDWWKHLUÀQJHU- communicated via email as and when deployment cost by up to 25 percent and tips. By using portable devices such as it was felt necessary. But this practice network design time by more than 35 VPDUWSKRQHVDQGWDEOHWVWKHÀHOGIRUFH has to stop and make way for a more percent by automating the planning and can use dedicated apps to download connected approach where everyone project management process. their guided user tasks for the day, along networks through a common infrastruc- Amdocs Network Rollout solution is with detailed pictures, diagrams and ture, sharing common information, work- PRUHWKDQMXVWDZRUNÁRZWRRO,WSUR- interactive maps to help them locate the ÁRZVDQGSODQQLQJWRROV,WLVWKHOLQNLQJ vides a smart end-to-end orchestration equipment, drive to the site, install and together of these disparate teams under layer, which leverages your existing BPM WHVWWKHHTXLSPHQWDQGÀQDOO\OHDYHLW a common process orchestration tool WRPDQDJHZRUNÁRZDFURVVDZLGHUDQJH in an operational state knowing that all that makes the whole ensemble work as of systems, people and processes. By the necessary steps have been taken to one ‘orchestra’. abstracting the orchestration layer above ensure the network is up and running the underlying system functions and after [ideally] a one trip site visit. Becoming more dynamic incorporating dynamic plan manage- Key to agile project management is to ment, the entire system becomes more Finding the keys to success have a tool that can dynamically adjust to DJLOHDQGÁH[LEOHFRPSDUHGWRWUDGLWLRQDO Networks are increasingly becoming LQÁLJKWFKDQJHVWRWKHSURMHFWUHTXLUH- approaches based on generic BPM only. more complex and challenging to deploy. ments as they happen. For example, the Service providers need to move faster plan for an outdoor Wi-Fi installation may Making common resources visible – and become more agile in order to meet be to install an access point at a bus stop. improves efﬁciency the demand of rolling out large scale :KHQWKHLQVWDOOHUYLVLWVWKHVLWHWKH\ÀQG Imagine a large orchestra without a con- À[HGDQGPRELOHQHWZRUNV&XUUHQWWRROV that the main power supply is unavailable. ductor, or worse, musicians with different and processes are inadequate to meet The original plan needs to quickly change musical scores. The result would be pret- today’s needs and the key to success is to accommodate a low voltage solar panel ty chaotic, with musicians trying to guess in end-to-end project orchestration and and battery at the site. what the other performers are playing. dynamic plan management with a cen- These types of changes can involve And yes, some rock bands have suffered tralized inventory. Contact Amdocs today many alternative tasks and steps which from being out of sync! to learn more about Amdocs Network have to be introduced into the plan as ef- If people working together on the same Rollout solution and how it can bring ÀFLHQWO\DVSRVVLEOHZKLOHKDYLQJWKHORZ- project can’t view or share the same in- harmony to your projects. est impact on the rest of the project. Even formation easily, the results can be disas- http://amdocs.com/anrs

eurocomms.com | european communications | 35

Special report SDN/NFV

38 Survey: Workforce worries to the fore as operators prepare for virtualised future

46 SDN/NFV: Show me the money Beyond the theoretical benefits that SDN/NFV provide, what are the business models that operators can look to?

50 Job losses: The elephant in the room that SDN/NFV lets in Telcos have a shortening timeframe to train their staff for a virtualised world, but even so it 46 is likely that many will not survive the transition

50 SPECIAL REPORT: SDN/NFV

Survey: Workforce worries to the fore as operators prepare for virtualised future

Majority of operators says skill set of workforce not ﬁt for purpose, but remain convinced of the beneﬁts of SDN/NFV

WKLQNVWKHFXWVZLOOEHPLQRUDVRSSRVHG Fig.1 Do you feel your workforce has the correct WRVLJQLÀFDQW 6HH)LJ skills currently in order to deploy and successfully %XWRQHYHQGRUVDLG´$Q\RQHZKR manage SDN/NFV? WKLQNVWKDWLQWKHVKRUWWHUPWKHVH initiatives will allow for broad based staff UHGXFWLRQVZLOOEHGLVDSSRLQWHG7KHUH will be a large learning curve and even ‘post [going] live’ the systems will need VLJQLÀFDQWDPRXQWVRIFDUHDQGIHHGLQJ No Yes 71% 29% It will over time probably allow for staff UHGXFWLRQRUEHWWHUVWDIIUHGHSOR\PHQWµ Caroline Gabriel, Director at research KRXVH0DUDYHGLV5HWKLQNDGGV´, suspect the answers have an element of denial in them! If SDN is done ‘properly’ it will either be outsourced or it will represent a huge change inhouse, with LQHYLWDEOHMREORVVHVµ One person who will not be losing their MRELVWKH&KLHI7HFKQRORJ\2IÀFHU2YHU KDOIRIUHVSRQGHQWVVDLGWKHLU&72LVLQ charge of their SDN/NFV strategy, al- WKRXJKDQRWKHUSHUFHQWVDLGLWLVVWLOOWR *Operator respondents EHFRQÀUPHGZKRLVLQFKDUJH 6HH)LJ *DEULHOFRPPHQWV´2QHRIWKHELJJHVW perators are very concerned to be to retool existing teams and depend issues we see within operators is the re- that the move to software-de- RQWKHYHQGRUWHDPVLQLWLDOO\µ 6HH)LJ VWUXFWXULQJRI,7DQGWHOHFRPVRSHUDWLRQV ÀQHGQHWZRUNVDQGQHWZRUN However, more than half of operator DQGWKHTXHVWLRQRIZKRWDNHVXOWLPDWHUH- Ofunctions virtualisation will respondents expect job losses to result at VSRQVLELOLW\7KHXQFHUWDLQW\DQGSROLWLFDO FDXVHVLJQLÀFDQWXSKHDYDOWRWKHLUZRUN- their organisations following the introduc- sensitivity around the issue is highlighted IRUFH(XURSHDQ&RPPXQLFDWLRQV·ÀUVW tion of SDN/NFV, although the majority E\WKHOHYHORI¶WREHFRQÀUPHG·DQVZHUVµ quarterly survey into the two technologies KDVFRQÀUPHG Fig.2 Do you expect to have to hire new staff in order More than seven in 10 operator re- VSRQGHQWVVDLGWKDWWKHLUZRUNIRUFHGRHV to deploy and successfully manage SDN/NFV? QRWKDYHWKHFRUUHFWVNLOOVFXUUHQWO\LQ order to deploy and successfully manage 6'11)96DLGRQHUHVSRQGHQW´:HQHHG PRUHVNLOOHGGHYHORSHUVµ 6HH)LJ 52% No 'HVSLWHWKHODFNRIVNLOOVOHVVWKDQKDOI said they expect to hire new staff to solve 48% Yes this problem, suggesting the majority of VWDIIZLOOEHJHWWLQJDORWRIQHZWUDLQLQJ 6DLGRQHUHVSRQGHQW´7KHLQWHQWDSSHDUV *Operator respondents

38 | european communications | eurocomms.com SPECIAL REPORT: SDN/NFV

Fig.3 Do you expect the introduction of SDN/NFV to Fig.5 What would lead to job losses from your existing workforce? you say are the biggest challenges to

50% 46% No job losses implementing SDN/ Yes, minor NFV currently? job losses

57% Problems of integrating SDN/NFV with existing/legacy infrastructure/tech 4% Yes, significant job losses *Operator respondents

Fig.4 Who is in charge of the SDN/NFV strategy in your organisation? 46% Lack of skills

43% Lack of 28% Still to understanding be confirmed of the tech

10% Other executive 52% CTO 29% Cultural change within 7% CTIO the operator

*Operator respondents 3% CIO Although, integrating SDN/NFV with technology as part of their infrastructure 29% existing/legacy infrastructure/tech is the today, the survey found (See Fig. 6). Inability biggest implementation challenge that Said one respondent: “We have a to ascertain operators are experiencing, a lack of skills geographically limited vEPC deployment. an RoI was chosen by 46 percent of operator Larger deployment will follow.” respondents (See Fig. 5). 6XFKDYLHZZDVFRQÀUPHGE\WKHIDFW Gabriel says: “Cultural and skills change that the majority of those who have yet is often as important as technical change, to do implement the two technologies driving many operators to outsource either expect deployments to go live after 29% their SDN deployments or their legacy 2016 (See Fig. 7). Vendor systems to ease the pain.” Gabriel comments: “It’s natural that offerings there will be a big uptake of NFV from Nascent implementations 2H15 as standards become more stabi- So where are we with regards to the lised and, importantly, the NFV SIG adds 11% Other, more implementation of these nascent tech- its second wave of specs including inter- important/strategic goals nologies? Roughly a quarter of operators operability, which will support wider scale have commercially deployed SDN and NFV deployments with less risk of lock-in. *Operator respondents

eurocomms.com | european communications | 39 SPECIAL REPORT: SDN/NFV

Fig.6 Have you commercially deployed SDN as part of your ´,ZRQGHUKRZPDQ\RIWKRVHSODQQLQJ WRGHSOR\6'1E\KDYHFRQFUHWH infrastructure? URDGPDSVDVRSSRVHGWR¶ZLVKIXOWKLQN- LQJ·7KHULVNLVWKDWHDUO\HQWKXVLDVPZLOO 76% No lead to poor executed or non-standard roll- RXWVZLWKSUREOHPVVWRUHGXSIRUODWHUµ 24% Yes :KLOHZHKDYHWRZDLWDQGVHHZKHWKHU deployments succeed, it is clear that oper- If no, when do you expect the first commercial deployment ators have bought into the theory behind of SDN to go live? 6'11)9 After 2016 43% 7KHPDMRULW\UHPDLQVFRQYLQFHGWKDWWKH technologies will lead to a fall in infrastruc- H2 2015 22% ture opex/capex, but in the long- rather WKDQVKRUWRUPHGLXPWHUP 6HH)LJ H1 2015 18% %XWRQHUHVSRQGHQWVDLG´0RQH\MXVW PRYHVWRDGLIIHUHQWQRGHLQWKHQHWZRUN If truly implemented as touted, it’s going 2016 17% *Operator respondents WREHPRUHH[SHQVLYHQRWOHVVµ 0HDQZKLOHPRUHWKDQKDOIWKLQNVWKDW Fig.7 Have you commercially deployed NFV as part of your 6'11)9ZLOOHQDEOHWKHPWRDPRUHÁH[L- infrastructure? EOHHIÀFLHQWQHWZRUNDQGJHWQHZVHUYLFHV WRPDUNHWPRUHTXLFNO\ 6HH)LJ 75% No *DEULHOVD\V´,WLVYHU\LQWHUHVWLQJWKDW WKHEHOLHILQWHUHVWLQDÁH[LEOHQHWZRUNLV so high and encouraging that this seems Yes 25% to be a bigger factor than pure cost, though of course it should result in overall If no, when do you expect the first commercial deployment ORZHU7&2 of NFV to go live? ´,WVHHPVWKDWFDUULHUVDUHPRVWLQWHU- HVWHGLQÁH[LELOLW\FXVWRPHUH[SHULHQFH After 2016 40% service delivery etc, which is encouraging for their future survival, although I’m sure H2 2015 28% the responses depend on the job role of WKHUHVSRQGHQW 2016 24% ´2XUVWXGLHVUHÁHFWWKHVDPHHPSKD- ses though, that carriers belatedly see By the end of 2014 4% customer experience as their main way to VXUYLYHZKLFKPHDQVDÁH[LEOHQHWZRUN whether they are targeting consumers, H1 2015 4% *Operator respondents ZKROHVDOHSDUWQHUVRU00µ

Fig.8 Are you convinced that implementing SDN/NFV will lead to a fall in infrastructure 57% Yes 43% No opex/capex?

*Operator respondents

40 | european communications | eurocomms.com SPECIAL REPORT: SDN/NFV

Fig.9 Are you convinced that implementing SDN/NFV Enterprise-focused new services $JDLQWKHPDMRULW\LVFRQYLQFHGWKDWWKH will lead to a more flexible and efficient network technologies will lead to new revenue (eg, dynamically adapting capacity to network needs)? streams, with most expecting them to come from their enterprise-focused busi- 79% Yes QHVVXQLWV 6HH)LJ 6DLGRQHUHVSRQGHQW´7KHFUHDWLRQRI new services will require leadership and an ‘ecosystem’ that can see a mutual ben- HÀWZRUNLQJWRJHWKHULQFROODERUDWLRQµ :KHQLWFRPHVWRZKRZLOOEHUHVSRQVL- 21% No ble for creating new, virtualised services, PRUHWKDQVHYHQLQWKLQNLWZLOOEHD mixture of operators themselves and third Are you convinced that implementing SDN/NFV will SDUWLHV 6HH)LJ enable you to get new services to market more quickly? 6DLGRQHUHVSRQGHQW´:KLOHLQWKHRU\ an operator could try and control all the 78% Yes VHUYLFHVWKHUHLVIDUPRUHEHQHÀWWRDOORZ- LQJUGSDUWLHVGHDOZLWKQLFKHVHUYLFHV and niche populations where the scale would pose a challenge to an operator’s EXVLQHVVPRGHOµ So which type of services do operators 22% No hope to offer as a result of implementing SDN/NFV? Security services were the *Operator respondents most popular choice, with two-thirds

Fig.10 Are you convinced that implementing SDN/NFV will lead to new revenue streams?

70% Yes From which areas of your business do you see new revenues streams coming from initially as a result of SDN/NFV implementation?

78% Enterprise

11% Retail 30% No

11% Wholesale

*Operator respondents

eurocomms.com | european communications | 41 SPECIAL REPORT: SDN/NFV

VHOHFWLQJWKLVDKHDGRI799LGHRRWKHU Fig.11 Do you expect to be creating new services GLJLWDOFRQWHQWDQG00,R7VHUYLFHV yourself or leaving them up to third parties? 6HH)LJ %XWRQHRSHUDWRUVDLG´7KHUHLVQR 71% Both ZD\RIIRUHVHHLQJWKLV$ÁH[LEOHSODWIRUP DSSURDFKDEOHWKURXJK$3,VZLOOLQVSLUH the minds of the developer communities 18% Third parties in ways that we operators do not under- VWDQG12::HWKHUHIRUHFDQQRWVD\ZKDW services we hope to offer as a result of LPSOHPHQWLQJ1)96'1µ 11% DIY 2YXPDQDO\VW'LPLWULV0DYUDNLVDGGV ´1HZVHUYLFHVDUHEHFRPLQJPRUH *Operator respondents important with SDN/NFV but there are no examples of new successful business Fig.12 Which type of new services do you hope to offer as a PRGHOVGULYHQE\WKHQHZWHFKQRORJLHV result of implementing SDN/NFV? &RVWVDYLQJVDQGRSHUDWLRQDOÁH[LELOLW\ will remain the biggest drivers for the new technologies, meaning that they may only 67% Security 37.5% Customer care be deployed to replace equipment that reaches end of life, rather than disrupt QHWZRUNRSHUDWLRQVµ 7KHUHDUHRWKHUFRQFHUQV7KUHHTXDU- 50% TV/Video 29% Voice ters of operators said they are concerned that introducing SDN/NFV will hinder the performance that they offer end users 6HH)LJ 6D\V0DYUDNLV´$OWKRXJKWKHUHLV 46% Digital content 21% M-commerce considerable hype about SDN and NFV LQWKHPDUNHWWKHWZRFRQFHSWVDUH UHODWLYHO\QHZDQGQRW\HWGHSOR\HG7KLV PHDQVWKDWFXUUHQWPDUNHWSHUFHSWLRQ 46% M2M/IoT 21% Messaging may be driven by willingness to deploy or NQRZOHGJHVKDUHGE\YHQGRUV7KHUHVXOWV of this survey illustrate that there is *Operator respondents considerable ground to cover before SDN/ 1)9FUHDWHDPDUNHWLPSDFWµ ec

Fig.13 How concerned are you that introducing SDN/NFV About the survey will hinder the performance that you offer end users? One hundred respondents took part in our online survey in October and November 2014. Forty percent were operators, 34 percent were vendors with the remainder consisting of third parties such as analysts, 25% Not concerned consultants and regulators. From a geographical perspective, 63 percent came from Europe and 16 percent from North America. Eleven percent came from Asia-Paciﬁc, with the remainder Very concerned 14% coming from the Middle East, Africa and 61% Somewhat concerned South America. *Operator respondents

42 | european communications | eurocomms.com SPONSORED INTERVIEW: JUNIPER NETWORKS

Juniper Networks: Virtualisation of networks offers great beneﬁ ts but a holistic approach to transformation is required

isruptive technologies ODWLRQVKLSVDUHGHYHORSHGZLWKVXSSOLHUV might mean if the majority of opera- engender organisational -XQLSHU·VQHWZRUNVROXWLRQVQHHGWREH WLRQVDUHPRYHGWRYLUWXDOQHWZRUNV FKDQJHE\GHÀQLWLRQ%XWWKH aligned with these considerations in mind WKHQZKDWGRHVVXFFHVVORRNOLNHLQ D wholesale virtualisation of WRRSWLPLVHLPSDFWVDLG%DUUHWW´:H·UH VHFXULW\FXOWXUHÀQDQFHVVHUYLFHV WHOFRQHWZRUNVDQGVHUYLFHVLQYROYHGZLWK trying to ensure an understanding of JRDOVSHUVRQQHOHWF QHWZRUNIXQFWLRQVYLUWXDOLVDWLRQ 1)9 WKHEXVLQHVVFKDOOHQJHVDQGULVNVDVZH ´6WDUWVPDOOEXWEHUHDG\WRPRYHIDVWµ DQGVRIWZDUHGHÀQHGQHWZRUNLQJ 6'1 HQJDJHZLWKRXUFXVWRPHUVµ H[SODLQHG%DUUHWW6XFKWHVWLQJDQGDVVR LVOLNHO\WREULQJSURIRXQGWUDQVIRUPDWLRQ 7KLVLVXQGHUWDNHQWKURXJKFRFUHDWLRQ ciated assessments gives the client and :LWKPDMRUWRSDQGERWWRPOLQHEHQHÀWV -XQLSHUORRNVWRFUHDWHDVKDUHGYLVLRQIRU -XQLSHU1HWZRUNVYDOXDEOHLQIRUPDWLRQ available to telcos that help them grow change and transformation, and allows about how a company wants to develop and compete more effectively against FXVWRPHUVWRGHÀQHYDOXHLQWKHLUWHUPV virtualisation and how it might respond new competitors, it would be foolish for $QGWKHQLWZRUNVZLWKLWVFXVWRPHUVWR LQSUDFWLFH´:HZDQWWRXQGHUVWDQGWKH operators not to embrace the potential of LPSOHPHQWWKHQHWZRUNWRDFKLHYHWKLV FKDOOHQJHVWKDWRXUFXVWRPHUVIDFHµ 1)9DQG6'1 7RJHWKHUZLWKLWVFOLHQWV-XQLSHU 7KDW·VWKHYLHZRI-DFN%DUUHWWVHQLRU 1HWZRUNVWULHVWRHQFRXUDJHWHOFRVWR GLUHFWRUIRU6WUDWHJLF0DUNHWLQJDW assess the potential success of virtualiza- -XQLSHU1HWZRUNVDFRPSDQ\WKDWKHOSV WLRQKROLVWLFDOO\%DUUHWWOLNHVFRPSDQLHV telcos lay the foundation of systems WRNHHSIRXUSHUVSHFWLYHVLQPLQG DV DEOHWRLQFRUSRUDWHWKHVHJURXQGEUHDN GHÀQHGE\1RUWRQDQG.DSODQ·V%DODQFHG LQJWHFKQRORJLHV%DUUHWWOHDGVDWHDP 6FRUHFDUG WKHÀQDQFLDOSHUVSHFWLYH² responsible for executive level engage- lower costs, better margins and boosted ment and thought leadership programs UHYHQXHVWKHFXVWRPHUSHUVSHFWLYH²KRZ IRUVWUDWHJLFDFFRXQWVLQ-XQLSHU·V a company wants to be perceived by its FXVWRPHUEDVHJOREDOO\ FXVWRPHUVPHDVXUHVLQFOXGHPDUNHW +HZDQWVWRHQVXUHWKDWWHOFRVWKLQN share and customer satisfaction for in- about how they implement NFV and SDN, VWDQFHWKHLQWHUQDOSHUVSHFWLYH²UHODWHG so that they maximise their returns on in- to the impact on, and development of, vestment in the short and long term, and new business and internal processes, SURWHFWWKHPVHOYHVDJDLQVWULVN7KLVLVQRW DQGWKHVNLOOVHWVZKDWOHDUQLQJDQGQHZ MXVWUROOLQJRXWDQHZQHWZRUNUHPHPEHU VNLOOVZLOOEHUHTXLUHG these technologies enable telcos to do a .HHSDKDQGOHRQWKHVHLVVXHVDQG ORWPRUHZLWKOHVVDQGSRWHQWLDOO\PDNHD measure progress against them, then a ORWPRUHPRQH\ telco can handle the transition to virtual- 7KHFKDQJHWKHWHFKQRORJLHVHQWDLOFDQ L]DWLRQHIIHFWLYHO\DQGHIÀFLHQWO\DQGVR be so profound that the whole charac- UHDSWKHEXVLQHVVUHZDUGV ter of a telco can shift – moving from transport and communications to the Aim big, start small interactive and integrated revenue gener- But where to begin? Barrett suggests ating cloud-based services epitomised by starting small, trialing a section of FRPSDQLHVVXFKDV*RRJOH operations that seem ripe for virtualis- 7KLVPHDQVWKDWDKROLVWLFVWUDWHJLF DWLRQ%XWZKLOHWKLVLVGRQHNHHSDQ vision needs to be developed, while en- eye on the big picture across the four suring safeguards, so security is protected VWUDWHJLFSHUVSHFWLYHV$VVHVVZKDW and liability is secured, even while new re- success in one section of a business

eurocomms.com | european communications | 43 SPONSORED INTERVIEW: JUNIPER NETWORKS

-XQLSHUZDQWVWHOFRVWREHPRWLYDWHGE\ WRFXVWRPHUGHPDQGV ecuted correctly it maximizes the returns how useful NFV and SDN is in protecting Furthermore, by using virtual RQLQYHVWPHQWV their business against competition from QHWZRUNVDQGVHUYHUEDVHGV\VWHPV -XQLSHU1HWZRUNVLVNHHQIRUWHOFRVWR QHZZHEEDVHGVHUYLFHV telcos can not only build up or license a start with the virtualisation of established ´7KHELJJHVWYXOQHUDELOLW\LQP\YLHZ VHUYLFHTXLFNO\WKH\FDQULSLWGRZQLILW VHUYLFHV²VRPHWKLQJWKH\DOUHDG\PDNH is being marginalized on services for GRHVQRWSD\ money on and so can increase margins by FXVWRPHUVµZDUQHG%DUUHWW:LWKYLUWXDO ´)DVWIDLOLVDVXFFHVVµGHFODUHG%DU- UHGXFLQJFRVWV FORXGEDVHGQHWZRUNVDYDLODEOHFRPSHW- UHWW´

44 | european communications | eurocomms.com SPONSORED INTERVIEW: JUNIPER NETWORKS

DVVHWWUDFNLQJÁHHWFDUWUDFNLQJDQG by carefully planning and considering FHVVWRZKDWZKRFDQSDVVZKDWÀUHZDOO navigation, and other functions, run from safeguards, protecting against exposure to DQGFRQWLQJHQF\SODQV DFORXGEDVHG00SODWIRUP7KHQHWZRUN KDFNLQJPDOZDUHDQGPRUH ´,W·VJRWWREHGRFXPHQWHGIRUWKHHQG programmability aspect of SDN and the Moreover, telcos’ CFOs and CEOs need user, from the policy level all the way to DELOLW\WRVFDOHWKHSDFNHWFRUHWKURXJK to declare that they are aware of how WKHLQIUDVWUXFWXUHOHYHOµ%DUUHWWVDLG´,I YLUWXDOL]DWLRQRISDFNHWFRUHIXQFWLRQV their company’s assets and revenues are I’m going to sign off on something, I have will improve the ability to delivery these KDQGOHGDQGPDQDJHGXQGHUWKH86· WRPDNHVXUH,·PQRWYXOQHUDEOHDQG VHUYLFHVDVZHOO 6DUEDQHV2[OH\$FWDQGVLPLODU(XURSHDQ that it aligns to operational policies and 7KHQWKHUHLVEURNHUDJHWKHDELOLW\ 8QLRQ (8 OHJLVODWLRQJURXQGHGLQWKH(8 GLUHFWLYHV

eurocomms.com | european communications | 45 SPECIAL REPORT: SDN/NFV

SDN/NFV: Show me the money Beyond the theoretical beneﬁts that SDN/NFV provide, what are the business models that operators can look to? Eira Hayward reports

DQXPEHURINH\XVHFDVHVDUHEHJLQQLQJ WRHPHUJH ]Mobility virtualisation, as virtualisation RIWKHSDFNHWFRUHLVNH\IRURSHUDWRUV ZKRZDQWWKHLUQHWZRUNVWRÁH[ZLWK WUDIÀFGHPDQGV ]Virtual CPE and service chaining as RSHUDWRUVORRNIRURSH[VDYLQJVWKURXJK GHOLYHULQJ&3(VHUYLFHVIURPWKHFORXG ]NFV and service orchestration, so that orchestration can bring together physical and virtual functions for PD[LPXPEHQHÀW ]:$1RSWLPLVDWLRQOHDGLQJWREHWWHU WUDIÀFHQJLQHHULQJDQGFRVWVVDYLQJV ]Policy driven application provisioning and delivery, as automation of application provisioning can lead to cost savings and better security, compliance DQGFXVWRPHUH[SHULHQFH

No trivial undertaking 'HXWVFKH7HOHNRPDQG7HOHNRP$XVWULD are chief among the European opera- he theory behind software-de- VHFRQGVHYHQUDWKHUWKDQWKHZHHNV WRUVOHDGLQJWKHZD\'7ZDVRQHRIWKH ÀQHGQHWZRUNLQJ 6'1 DQG RUPRQWKVWKDWLWWDNHVWKHPDWWKH driving forces behind the formation of QHWZRUNIXQFWLRQVYLUWXDOLVDWLRQ PRPHQW,QVKRUWDVWDQGDUGLVHG WKH(76,,QGXVWU\6SHFLÀFDWLRQ*URXSIRU 1)9 WZRVHSDUDWHEXWUHODWHG ZD\RIQHWZRUNLQJWKDWEULQJV,7FORXG NFV, whose remit is to develop require- 7developments which promise to revolu- and telecoms together in a converged PHQWVDQGDUFKLWHFWXUHIRUQHWZRUN tionise the way that operators provision LQIUDVWUXFWXUH functions in software that run on industry WKHLUQHWZRUNVDQGSURYLGHVHUYLFHVLV 7LPR-RNLDKR(0($6HQLRU7HFKQRO- standard server hardware, able to be HDV\WRJHWH[FLWHGDERXW RJLVW7HOHFRPDQG1)9DWRSHQVRXUFH PRYHGDURXQGWKHQHWZRUNZLWKRXWWKH 7KHWUDQVLWLRQIURPKDUGZDUHGHÀQHG software company Red Hat, says SDN/ QHHGWRLQVWDOOQHZHTXLSPHQW WRVRIWZDUHGHÀQHGYLUWXDOLVHGQHWZRUNV 1)9LVDQDORJRXVWRLPSDFWWKDW$SSOH '7KDVYLUWXDOLVHGDFRXSOHRIVLPSOH will use commodity hardware and open KDGLQFUHDWLQJWKH$SS6WRUHPRGHOIRU QHWZRUNIXQFWLRQVLQRUGHUWRJDLQH[SHUL- VWDQGDUGVVLPSOLI\QHWZRUNSURFHVV smartphones, placing innovation in the HQFH,QWKHVXPPHULVDOVRGHPRQVWUDW- PDQDJHPHQWDQGPDNHWKHUXQQLQJDQG KDQGVRIWKLUGSDUWLHVDQGOHWWLQJPDUNHW ed automated on-boarding of a virtual PDLQWHQDQFHRIQHWZRUNVPXFKPRUHFRVW forces and competition create an ecosys- IMS and its integration into the compa- HIIHFWLYHIRUVHUYLFHSURYLGHUV WHPRIQHZKLWKHUWRXQLPDJLQHGVHUYLFHV Q\·VLQIUDVWUXFWXUHFORXG No more need for silos, no more %XWFDVWDVLGHWKHK\SHIRUDPRPHQW %XWWKHRSHUDWRU·V93RI$JJUHJDWLRQ need for the current forests of proprie- what’s happening in practice and what 7UDQVSRUW,3DQG)L[HG$FFHVV$[HO WDU\KDUGZDUHDOORYHUWKHQHWZRUNWKDW are the business models that operators &ODXEHUJVD\VLWZLOOEHEHIRUHDQ\ PDNHWKHLQWURGXFWLRQRIQHZVHUYLFHV are basing their roadmaps around? virtualised functions are inserted into the VXFKDFKDOOHQJH,WZLOOPHDQPRUH Cisco’s SVP of Service Provider Busi- '7QHWZRUN´,W·VQRWWULYLDOWRYLUWXDOLVH ÁH[LELOLW\DQGDJLOLW\ZLWKRSHUDWRUV QHVVLQ(0($(GZLQ3DDOYDVWVD\VWKH DQGFORXGLI\FRPSOH[QHWZRUNIXQFWLRQV DEOHWRPDNHFKDQJHVWRWKHLUQHWZRUNV FRPSDQ\FXUUHQWO\KDVRYHU6'1FXV- DQGYLUWXDOLVHGFKDRVLVVWLOOFKDRV

46 | european communications | eurocomms.com SPECIAL REPORT: SDN/NFV

QHWZRUNIXQFWLRQVLQWRDFORXGHQYLURQ- NFV is that services can be delivered fered by telcos and the telcos are seeing PHQWµKHVD\V purely in software and fully decoupled QRWKLQJLQUHWXUQ,IWKRVH,3FKDQQHOV 8OWLPDWHO\'7VHHV6'1DQG1)9EHLQJ IURPWKHKDUGZDUHOLIHF\FOH can be combined with voice telephony, able to give it the ability to deliver more ,Q$VLDVRPHRIWKLVLVKDSSHQLQJ location, subscriber analytics and deliv- FRQYHUJHGWHOHFRPVDQG,7VHUYLFHV DOUHDG\+RQJ.RQJEDVHG3DFQHWKDV ered using cloud architectures controlled IURPWKHFORXG$WWKHPRPHQWWKHUH been using SDN to offer bandwidth on by the service providers it opens up DUHFORXGVHUYLFHVIRU,7EXWRQO\DYHU\ demand services for about a year and SRWHQWLDOO\KXJHPDUNHWRSSRUWXQLWLHVIRU limited amount of real telecoms services WKHFRPSDQ\UHSRUWVVLJQLÀFDQWGHPDQG WKHFDUULHUVµ GHOLYHUHGLQDFORXGIDVKLRQ IRUWKLV´QHWZRUNDVDVHUYLFHµRIIHUGULY- David Noguer Bau, Head of Service )RUH[DPSOHZLGHDUHDQHWZRUNLQJYLG- HQE\WKHJHQHUDOPRYHWRWKHFORXG 3URYLGHU0DUNHWLQJDW-XQLSHU1HWZRUNV HRFRQIHUHQFLQJDQGQHWZRUNDFFHVVKDYH +HDY\5HDGLQJ$QDO\VW&DUROLQH adds that NFV will allow service providers not typically been delivered in a cloud &KDSSHOOVD\VDIXQFWLRQOLNH&3(LV to expand their managed services IDVKLRQ$QGLIWKH\DUHWKH\·YHQRWEHHQ also an obvious early candidate for vir- offerings, and of course accelerate their OLQNHGWRWKH,7VHUYLFHVVLGHRIWKHKRXVH tualisation because of the cost savings GHSOR\PHQWWLPHV $W7HOHNRP$XVWULDLWV6HUELDQ LWFDQGHOLYHU%XWVKHVD\V´,·PÀQGLQJ +HH[SODLQV´:LWK6'1LWFDQEHIXOO\ subsidiary Vip mobile has successfully a lot of operators are being very cagey automated and in many cases offered demonstrated NFV on Metaswitch’s open about which functions and services WKURXJKDFXVWRPHUSRUWDO,WEULQJV VRXUFH,06&OHDU:DWHU7KLVIROORZV WKH\DUHYLUWXDOLVLQJ service providers bigger differentiation RQIURP7HOHNRP$XVWULD·VYLUWXDOLVDWLRQ and they can become more relevant to trials earlier this year when its Bulgarian WKHLUFXVWRPHUVZLWKVSHFLÀFRIIHUVWR subsidiary Mobitel streamed content At the moment WKHLUQHHGV$VWKHXSIURQWFRVWVDUH WKURXJKDYLUWXDOLVHGSDFNHWFRUHRYHU marginal, SPs can consider different go- /7(DQG&URDWLDQVXEVLGLDU\9LSQHWDOVR there are only a very WRPDUNHWVWUDWHJLHVLQFOXGLQJWU\DQG demonstrated HD video streaming by limited amount of real buy, for services that in the past had a XVLQJ1)9 prohibitive price and limited deployment &72*XQWKHU2WWHQGRUIHUVD\V´:LWK telecoms services GXHWRFRPSOH[LW\µ Vip mobile’s trial we are also starting ´delivered in a cloud He says another big opportunity is to understand what advantages open FORXGEURNHUDJH´63VDUHQRZDEOHWR VRXUFHSURMHFWVZLOOEULQJWRWKH*URXSµ fashion re-sell third party cloud services as part 2WWHQGRUIHUVHHV7$·VIXWXUHEXVLQHVV RIWKHLUFORXGRIIHULQJ,WFRXOGHYHQEH models coming from putting what he ´%XWPRVWSHRSOHDUHWHOOLQJPHWKDW H[WHQGHGWRDQHQGWRHQG6/$PRGHO FDOOVWKH´,7DQGFRQQHFWGHSDUWPHQWVµ WKHLUH[SHFWDWLRQVKDYHEHHQH[FHHGHG ZKHUHWKHQHWZRUNFDQG\QDPLFDOO\DGDSW together through a virtualised infrastruc- 7KHJUHDWWKLQJDERXWYLUWXDOLVDWLRQIRURS- LWV4R6DFFRUGLQJWRWKHDSSOLFDWLRQVµ WXUH+HVD\VWKDW1)9ZLOODOVRSURYLGH erators is thatµ they don’t need an access But Chappell warns that it won’t be open and easy access for third party WDLO²LWJHWVSHRSOHRQWRWKHLUFORXGµ plain sailing to realise the opportunities GHYHORSHUVRIWHOHFRPVVHUYLFHV ,QEURDGWHUPVIXQFWLRQVOLNHÀUHZDOOV DKHDG6KHFDXWLRQV´7KHUH·VDZKROH ´:H·YHDOUHDG\DFKLHYHGDORWDQG DQGJDWHZD\VKDYHEHHQWKHÀUVWWREH VHWRIZRUNÁRZVDQGRUFKHVWUDWLRQWKDW ZH·UHJRLQJWRVSHQGWKHQH[W\HDUORRN- YLUWXDOLVHGZKLOHIXQFWLRQVOLNHURXWHUV QHHGVWREHGLIIHUHQW1RWDOOYLUWXDOLVHG ing at how we can better automate and DQGFRQWUROOHUVRUWKHSDFNHWFRUHDUH QHWZRUNIXQFWLRQVDUHWKHVDPHDQG SXWLQEHWWHUSURFHVVHVµKHH[SODLQV´2I now either beginning to be virtualised or there are some complex issues around course there will be the opportunity for RQRSHUDWRUURDGPDSV PRELOHQHWZRUNVVRLWPD\DOOWDNHPXFK us to deliver new services, bandwidth on Even though it’s still early in the life ORQJHUWKDQSHRSOHKDYHWKRXJKWµ GHPDQGDGGLWLRQDOEDFNXSRUFRPSXW- cycle for SDN and NFV there are a num- 0DUN%XUWRQ93RI1HWZRUN0DQ- LQJSRZHURQGHPDQGIRUH[DPSOH:H·OO ber of examples that point to the vast agement at software vendor Ipanema QRORQJHUKDYHWREXLOGIRUSHDNORDGV RSSRUWXQLWLHVDKHDG)RUH[DPSOH1)9 7HFKQRORJLHVQHDWO\VXPVXSWKHFXU- DQGFROODERUDWLYHVHUYLFHVOLNHYLGHRFRQ- ZRXOGHQDEOH$PD]RQ&ORXGWRRIIHUVSRW UHQWVLWXDWLRQ´:HDOONQRZWKHPRQH\ ferencing with customers being able to prices for cloud services for a limited is in there somewhere, but we are still self-serve and self-administrate become time frame because cloud operators WU\LQJWRLGHQWLI\LWVSHFLÀFDOO\,WZLOO DSRVVLELOLW\µ ZRXOGNQRZZKDWFDSDFLW\ZDVDYDLODEOH FRPHIURPDXWRPDWLRQVLPSOLÀFDWLRQ DQGZRXOGZDQWWRVHOOWKLV DQGPD[LPLVLQJXVHRIUHVRXUFHV%HLQJ Cloud-based business models 5HG+DW·V-RNLDKRDGGV´:HEVHUYLFHV PRUHÁH[LEOHLQWKHZD\WKDW\RXELOO So aside from the potential immediately ÀUPVDQG277SOD\HUVDUHJHQHUDWLQJ customers, as well as charging more if WRFXWFRVWVWKHNH\DSSHDORI6'1DQG revenue riding on basic IP channels of- \RXQHHGWRLVDOVRLPSRUWDQWµ ec

eurocomms.com | european communications | 47 SPONSORED INTERVIEW: MAVENIR SYSTEMS

Mavenir offers mobile telcos ability to take on OTT players with virtualization

FDOOP\ZLIHDQGNLGVEDFNKRPHDQGLI, from the serving gateways at the edge can use my existing handset and dialer, RIDQHWZRUNWRWKHFHQWUDOLVHGSDFNHW ,·OOXVHWKDW7KDW·VSUHIHUUHGµ JDWHZD\ZKHUHNH\GHFLVLRQVRQURXWLQJ $WDVWURNHWKHFRQFHUQVQDJJLQJ DQGELOOLQJDUHPDGHDQGSDFNHWVEHLQJ operators during the past few years - VHQWEDFNRXWDJDLQ WKH\PLJKWORVHYDOXDEOHUHYHQXHWR277 5DWKHU6'1DOORZVWKHWHOFRWRPDNH services providing such services and decisions at once in many different maybe premium content too - might places, with rules, decisions and action FUXPEOHDZD\:LWKDOO,3QHWZRUNVWKH EHLQJDSSOLHGWRSDFNHWVDWWKHVHUYLQJ big carriers can leverage their current JDWHZD\V7KLVPDNHVDKXJHGLIIHUHQFH consumer base and move overseas with to scalability – because while serving JUHDWHUHDVH gateways together must handle all the ´&RQVXPHUVKDYHEHHQVHHNLQJRXW WUDIÀFWKDWFRPHVWKHLUZD\²WKH\FDQ DOWHUQDWLYHVHUYLFHSURYLGHUVµVD\V VSOLWXSWKDWZRUNORDG 0DFOHDQ´2SHUDWRUVFDQQRZVWHSLQWR 8QGHUWKHROGV\VWHPWKHSDFNHW WKLVYRLGDQGEHUHOHYDQWDJDLQ7KH\FDQ FRQWLQXHWRDGGPRUHVHUYLFHVµ Award-winning solutions NFV and SDN help telcos provide these services and will help them satisfy a pro- Mavenir’s ability to deliver solutions is being jected increase in demand for mobile ser- recognized globally. In September, it won he virtualisation of telecommu- vices that industry surveys suggest could the NFV award for its ‘Virtualized RCS based QLFDWLRQVQHWZRUNVRIIHUHGE\ JURZWLPHVEHWZHHQDQG on NFV’ live solution at the LTE Asia confer- the technology suppliers, will 0HHWLQJWKDWNLQGRIH[SORVLRQLQ ence, in Singapore. This Rich Communica- help the established large mo- demand by expanding existing hardware tion Services (RCS-e) service, launched last 7bile operators to become truly global ser- based services is going to be hugely ex- August (2013), facilitates capex reductions vice providers, giving them a chance to SHQVLYHQRWWRPHQWLRQWLPHFRQVXPLQJ for IMS-based RCS deployments when uti- EUHDNLQWRWKHELJJHVWWHOHFRPPDUNHWV ´,W·VDSKHQRPHQDODPRXQWRIHTXLSPHQW lising multi-tenancy on a centrally deployed 7KDW·VWKHSUHGLFWLRQRI,DQ0DFOHDQ WUDQVSRUWDQGSRZHUµVD\V0DFOHDQ common platform. SLFWXUHG 93IRU6WUDWHJ\DQG0DUNHW- Using NFV and SDN will help mobile Meanwhile, another important recent LQJDW0DYHQLU6\VWHPVD7H[DVEDVHG RSHUDWRUVEXLOGDVPDUWHUQHWZRUNWKDWLV Mavenir launch involved the release this software technology company that is far more scalable than the hardware sys- June of its Evolved Packet Data Gateway EXV\UROOLQJRXW1HWZRUN)XQFWLRQV9LUWX- WHPVRI\RUH%RWK6'1DQG1)9UHTXLUH (ePDG). This enables Wi-Fi using subscribers DOLVDWLRQ 1)9 DQG6RIWZDUH'HÀQHG1HW- DFKDQJHLQWKHQHWZRUNRSHUDWLRQVRQH to connect securely to the EPC network and ZRUNLQJ 6'1 V\VWHPVWRIRUZDUGORRNLQJ could argue that NFV requires higher level enables seamless mobility between LTE and PRELOHVHUYLFHSURYLGHUV RIFKDQJHVWKDQ6'1$WSUHVHQW1)9LV Wi-Fi. It allows subscribers to maintain con- &RQVXPHUVOLNHWRXVHWKHV\VWHPV PDNLQJWKHKHDGZD\LQVDOHVEHFDXVHLWV stant access to high-speed data and voice WKH\NQRZDQGLIE\URXWLQJV\VWHPV set-up mirrors, to some extent, how hard- services whether they are in LTE coverage through the public Internet, telcos can ware-based systems already operate, and areas or using Wi-Fi hotspots. offer global voice, video, messaging, FDQEHLQWURGXFHGSLHFHE\SLHFH In July, Mavenir commercially launched image transfer and voice/video mail On the other hand, SDN, can really de- a next generation IMS core network and VHUYLFHVMXVWOLNH6N\SHDQG)DFHERRN liver the ability to handle vastly increased Telephony Application Server (TAS), noting it why wouldn’t subscribers use the mobile GDWDYROXPHV7KLV0DFOHDQH[SODLQHG was carrying live VoLTE trafﬁc. With VoLTE, handset and the mobile operator they is because SDN offers telcos the chance mobile subscribers can make crystal clear use at home when abroad? to install a virtual intelligence or man- voice calls with faster call setup times while ´&RQVXPHUVDUHQRWGXPEµGHFODUHV agement function that does not require being able to simultaneously enjoy lightning 0DFOHDQ´,I,ZDQWWRWUDYHOWR&KLQDDQG GDWDSDFNHWVWREHURXWHGFRQVWDQWO\ fast 4G LTE data speeds, the vendor says.

48 | european communications | eurocomms.com SPONSORED INTERVIEW: MAVENIR SYSTEMS

gateway hub has to be large enough to handle the combined capacity of all the serving gateways – and that might EHLPPHQVHJRLQJIRUZDUG5HPRYLQJ the need for this central hub, allowing GHFLVLRQVWREHPDGHDWWKHQHWZRUN HGJHPDNHVWKLVSUREOHPJRDZD\ ERRVWLQJÁH[LELOLW\DQGHIÀFLHQF\ZKLOH UHGXFLQJFRVW ´,URXWHLWNHHSLWORFDODQGGLVWULEXWH HGJHWRHGJH,FDQUHGXFHWKHQHHG for a large centralized server and have multiple, smaller servers matching the throughput capacity at the edges, to EXLOGWKHQHWZRUNµH[SODLQV0DFOHDQ Despite this clear advantage, especially in the medium term, NFV, is an easier VHOOFXUUHQWO\´1)9LVWDNLQJWKHH[LVWLQJ QHWZRUNW\SRORJ\µVD\V0DFOHDQ´,WKDV WKHVDPHORJLFDOLQWHUIDFHVµ Introduce new products more easily Consumers have proved they are ,WMXVWGRHVLWPRUHHIÀFLHQWO\²JHWWLQJ Mavenir has a wide range of products SUHSDUHGWRSD\DSUHPLXPIRU$SSOH·V GDWDSDFNHWVWRDGDWDFHQWHUDQGRXW WKDWFDQKHOSDQHQGWRHQGSRUWIROLRRI LQQRYDWLYHVHUYLFHVVXFKDV)DFH7LPH DJDLQTXLFNHUWKDQEHIRUH7KHPRYH- voice/video, messaging and mobile core DQGLWVPXOWLSOLFLW\RIDSSV9LUWXDOLVDWLRQ ments might be virtual, but the same or- SURGXFWVWKDWLQFOXGH,06(3&DQG6%& HQDEOHVWHOFRVWR´WDNHWKHZUDSSHUVRIIµ JDQLVDWLRQDOHOHPHQWVDUHWDONLQJWRJHWKHU Its solutions, based on the award-winning DV0DFOHDQSXWVLW DVWKH\KDYHZLWKKDUGZDUHQHWZRUNV mOne® software platform, leverage NFV $JRRGH[DPSOHLVWHOHPHGLFLQHDVRI- 0RUHRYHU0DFOHDQVD\V´

eurocomms.com | european communications | 49 SPECIAL REPORT: SDN/NFV

Job losses: The elephant in the room that SDN/NFV lets in

Telcos have a shortening timeframe to train their staff for a virtualised world, but even so it is likely that many will not survive the transition. Eira Hayward reports

f, as the shift to virtualisation promis- areas but generally possess a broad with migrating to SDN and NFV, they also HVQHWZRUNVZLOOQRORQJHUEHIXOORI UDQJHRIFDSDELOLWLHV6RWKHUH·VDORWRI review the legacy systems and staff that proprietary hardware appliances that YHUVDWLOLW\KHUH WKH\KDYHLQSODFHIRUWKHLUNH\EXVLQHVV Irequire separate and specialist teams ´6HFRQGLIZHORRNDWLQFXPEHQWWHO- processes, everything from point of sales RIH[SHUWVDQGÀHOGVWDIIWRPDQDJH HFRPFRPSDQLHVWKHLUQHWZRUNUHIUHVK and customer activation through to their them, it’s reasonable to forecast that SURJUDPPHVUXQRQD\HDUEDVLV ELOOLQJSODWIRUPDQGFXVWRPHUFDUH RSHUDWRUVZLOUHTXLUHIHZHUVWDIIRYHUDOO VRZHDUHDWOHDVWÀYH\HDUVDZD\IURP ´:KHQFRQVLGHULQJ6'1DQG1)9RSHU- It’s a taboo topic to some extent, but SDN and NFV having a major impact DWRUVPXVWDVNWKHPVHOYHVWKHTXHVWLRQ an important one for an industry still RQWKHLUHQJLQHHULQJVWDII%\WKHWLPH ¶:KDWEXVLQHVVSURFHVVHVFDQ,FKDQJH EDWWOLQJWRUHWXUQWRJURZWK&KULV0DUUL- these technologies are a feature of their ZLWKWKLVQHZQHWZRUNDUFKLWHFWXUH"·7R VRQ7HFKQLFDO'LUHFWRU(0($DWQHWZRUN QHWZRUNVWKHLUHQJLQHHULQJVWDIILVOLNHO\ SURSHUO\IXOÀOWKHFRPPHUFLDOSRWHQWLDORI automation specialist Infoblox, pulls no to have had the time to develop any addi- SDN and NFV, operators should combine SXQFKHV´6'1QHWZRUNDGPLQLVWUDWRUV WLRQDOVNLOOVWKH\PD\UHTXLUHµ their adoption of each technology with a will, in effect, be programmers who Certainly, the transition to a virtualised comprehensive review and transforma- create logical connections between end- DQGVRIWZDUHGHÀQHGQHWZRUNZRQ·WKDS- WLRQRIWKHLUEXVLQHVVµ SRLQWVUDWKHUWKDQFHUWLÀHGH[SHUWVRQ SHQRYHUQLJKW,Q(XURSHZH·UHMXVWDWWKH 0LFKDHO6KHYHQHOO6RIWZDUH$UFKLWHFWDW single-function devices such as routers start of the shift, with operators for the &$7HFKQRORJLHVVD\VWKDWSK\VLFDOGHYLFHV DQGVZLWFKHV most part still examining possible use cas- LQDQHWZRUNDUHQRWJRLQJWRGLVDSSHDU ´7KHUHZLOOEHIHZHUSHRSOHUHTXLUHG es or conducting initial trials - at best they RYHUQLJKW´7KHFKDOOHQJHLVWKDWRSHUDWRUV WRPDQDJHQHWZRUNVZKHQWKH6'1WUDQ- DUHYLUWXDOLVLQJWKHVLPSOHVWIXQFWLRQV ZLOOUHTXLUHVNLOOVWRPDQDJHERWKWUDGLWLRQDO sition is complete, and not all of today’s $UHFHQWVWXG\DPRQJPRELOHRSHUD- as well as SDN/NFV entities, co-existing for QHWZRUNDGPLQLVWUDWRUVZLOOEHLQDSRVL- WRUVIURPPDUNHWUHVHDUFKHU,QIRQHWLFV DYHU\ORQJSHULRGRIWLPH&RQVHTXHQWO\WKH WLRQWRDFTXLUHWKHQHZVNLOOVUHTXLUHGLQ IRXQGIRUH[DPSOHWKDWRQO\SHUFHQW JUHDWQHHGIURPDVNLOOVSHUVSHFWLYHLVWKH WKH6'1HQYLURQPHQW7KDWPD\VRXQG of operators are either deploying or plan ability to fully utilise and manage both of the KDUVKEXWLW·VQRWEHQHÀFLDOIRUDQ\RQH² to deploy SDN at some point in their WHFKQRORJLHVVLGHE\VLGHµKHVD\V &,2VQHWZRUNLQJSUDFWLWLRQHUVRUYHQGRUV EDFNKDXOQHWZRUNDQGSHUFHQWDUH ´,QDGGLWLRQWKHUHLVDYHU\VWURQJ – to pretend the advent of SDN will be still evaluating as a possibility with no open source movement in these new FRPSOHWHO\SDLQOHVVµ VHWWLPHIUDPH DUHDV7KLVQHZGHYHORSPHQWPRGHO Len Padilla, VP of product strategy ,W·VQRWDWULYLDOXQGHUWDNLQJDV%HQJW greatly enhances the number of types IRU177(XURSHLVPRUHRSWLPLVWLF7KH Nordstom, CEO of consultancy North- RI$3,VDQGSURJUDPPLQJDSSURDFKHV operator has recently completed proof VWUHDPH[SODLQV´$VZLWKRWKHURQFHQHZ QHHGHG$VVXFKWKHUHLVDJUHDWQHHG of concept trials with Huawei on the WHFKQRORJLHVOLNH*DQG+63$YLUWX- IRUWKHVHEOHQGHGVNLOOVDVZHOODVWRROV vendor’s NFV solution for the evolved DOLVDWLRQZLOOSRVHVLJQLÀFDQWWHFKQLFDO which understand both environments SDFNHWFRUH3DGLOODVD\V´:KLOH6'1 PLJUDWLRQTXHVWLRQVIRURSHUDWRUVµ well and are able to seamlessly manage and NFV are bringing increasing levels of 2WKHUPRUHZLGHUDQJLQJVNLOOVZLOOEH their co-existence and transition over the DXWRPDWLRQWRQHWZRUNPDQDJHPHQWZH needed for operators to successfully de- HQWLUHRSHUDWLRQDOOLIHF\FOHµ GRQ·WWKLQNWKH\ZLOOKDYHDKXJHQHJDWLYH ULYHWKHKXJHHIÀFLHQF\EHQHÀWVSURPLVHG LPSDFWRQWKHLQGXVWU\LQWHUPVRIVNLOOV E\6'1DQG1)9DFFRUGLQJWR1RUGVWRP Worldwide skills shortage IRUWZRUHDVRQV %XWKHZDUQV´7KHFKDQJHVWRKDUGZDUH $WWKLVSRLQWLWLVLPSRUWDQWWRWDNHLQWR ´)LUVWLQFORXGDQGVHUYLFHSURYLGHUV and software required by SDN and NFV account the worldwide shortage of relevant WKHHQJLQHHULQJZRUNIRUFHWHQGVWREH will by themselves only deliver a small VNLOOV7KHODFNRI,7WDOHQWLVDJOREDOLVVXH EURDGO\7VKDSHGWKDWLVHQJLQHHUVWHQG FRVWVDYLQJ2SHUDWRUVFDQSUREDEO\VDYH exercising businesses, academia and to have in-depth capability in one or two more money on opex than capex if, along JRYHUQPHQWVDOODURXQGWKHZRUOG:KHQ

50 | european communications | eurocomms.com SPECIAL REPORT: SDN/NFV

recruiter Hays Group recently compiled DOLVWRIWKHWRSVNLOOVWKDWDUHODFNLQJLW SLQSRLQWHG,7DVRQHRIWKHPDLQKDUGVNLOOV LQGHPDQGDURXQGWKHZRUOG In Europe, research from the Com- SXWHU7HFKQRORJ\,QGXVWU\$VVRFLDWLRQ &RPS7,$ LQIRXQGELJFRQFHUQV also see a lot more compe- among businesses that they were tition as newcomers enter the ODFNLQJFRUH,7VNLOOVDQGWKDWWKLVODFN QHWZRUNDSSOLFDWLRQVGHYHORSPHQWVSDFH RIVNLOOVZDVKDYLQJDQLPSDFWRQWKHLU – indeed we’ve already seen some NFV SURÀWDELOLW\SURGXFWLYLW\DQGLQQRYDWLRQ ÀUVWPRYHUVOLNH7HOHNRP$XVWULDWXUQWR &KLHIDPRQJWKHVNLOOVWKH\ODFNHGZHUH start-up equipment vendors as they go QHWZRUNLQJLQIUDVWUXFWXUHVHUYHUVGDWD WKURXJKSURRIRIFRQFHSWDQGÀHOGWULDOV FHQWUHPDQDJHPHQWVWRUDJHEDFNXS ´+DUGZDUHGHYHORSPHQWQHHGVZLOO cybersecurity, database/information be reduced dramatically and modern It’s not beneﬁcial PDQDJHPHQWKHOSGHVN,7VXSSRUWDQG VRIWZDUHGHYHORSPHQWVNLOOVDUHQHHGHG for anyone to pretend WHOHFRPXQLÀHGFRPPXQLFDWLRQV ²YLUWXDOLVDWLRQFORXGDQGGHYRSVµ-RNL- $OORIZKLFKIHDWXUHKHDYLO\DPRQJWKH DKRVD\V´1HWZRUNHTXLSPHQWSURYLGHUV the advent of SDN will be GLYHUVHVNLOOVVHWVQHHGHGWKDWRSHUDWRUV DUHORRNLQJDWDIXWXUHRIGLPLQLVKLQJUH- DUHORRNLQJIRUDVWKH\LPSOHPHQW6'1 WXUQVRQKDUGZDUHKHQFHWKH\·UHORRNLQJ completely painless DQGYLUWXDOLVHQHWZRUNIXQFWLRQV$GGWR WRGULYH6'11)9UDWKHUWKDQÀJKWLW ´ this the image of telecoms businesses ´:H·UHVHHLQJWKDWDOOWKHWUDGLWLRQDO WKH(76,VSHFLÀFDWLRQJURXSIRU1)9VD\V ²ZK\ZRXOGEULJKW\RXQJVRPHWKLQJ YHQGRUV$OFDWHO/XFHQW1RNLD1HWZRUNV WKDW'7UHJXODUO\VFKHGXOHVVSHFLDO6'1 VRIWZDUHVSHFLDOLVWVFKRRVHWRZRUN +XDZHLKDYH2SHQ6WDFNSURSRVLWLRQV GD\VWRNHHSHYHU\RQHLQWKHEXVLQHVV IRUDWHOFRZKHQWKHLUVNLOOVDUHLQKLJK So we’ll see innovation coming on how LQYROYHGDQGLQIRUPHGRISURJUHVVµ demand and they can choose to go and QHWZRUNVHUYLFHVDUHGHOLYHUHGE\HTXLS- He admits it’s something of a chal- ZRUNIRUDQLQWHUQHWFRPSDQ\RUWDNHD PHQWSURYLGHUV,QDGGLWLRQWRLQQRYDWLRQ OHQJHWRNHHSHYHU\RQHUHDOLVWLFDERXW ULVNZRUNIRUWKHPVHOYHVDQGGHYHORS from traditional equipment providers, what can be achieved because technical something that might mean they can ZH·OODOVRVHHV\VWHPLQWHJUDWRUVOLNH$F- staff can easily over-interpret what can UHWLUHLQ\HDUV" FHQWXUHDQG7HFK0DKLQGUDPRYHLQDQG be done and also underestimate the 7LPR-RNLDKR(0($6HQLRU7HFKQRO- FRPSHWHIRUVHUYLFHSURYLGHUEXVLQHVVµ ZRUNQHHGHG7KLVPHDQVWKH\FDQJHW RJLVW7HOHFRPDQG1)9IRU5HG+DW +HDGGVWKDWLWLVOLNHO\WKDWSHRSOH GLVLOOXVLRQHGZKHQDSURMHFWWDNHVORQJHU points out that while there are bound to ZLWKDEDFNJURXQGLQWUDGLWLRQDOHQWHU- DQGLVWRXJKHUWKDQWKH\H[SHFWLWWREH EHVNLOODQGH[SHULHQFHJDSVWKDWQHWZRUN SULVH,7ZLOOPRYHLQWRWHOHFRPV%XWKH +HVD\V´:HQHHGWRPRYHIDVWDQG RSHUDWRUVZLOOQHHGWRÀOOZKHQWKH\UROO KDVDÀQDOHQFRXUDJLQJPHVVDJHWR ZKHQ\RXPRYHIDVW\RXKDYHWRPDNH out SDN/NFV, much of the new learning RSHUDWRUV´6HUYLFHSURYLGHUVUHO\KHDYLO\ FRPSURPLVHV7KHDUWRIH[HFXWHDQG ZLOOEHFDUULHGRXWE\QHWZRUNHTXLSPHQW RQDVNLOOHGZRUNIRUFHRIWHOHFRPVQHW- GHOLYHULVNH\,QWHUQHWFRPSDQLHVOLNH SURYLGHUVUDWKHUWKDQQHWZRUNRSHUDWRUV ZRUNHQJLQHHUVDQGWKDWLVQRWDERXWWR to operate on a principle of failing fast, 7KHVHYHQGRUVZLOOORVHWKHLUKDUGZDUH change as a result of the arrival of SDN UHVWDUWDQGH[HFXWHDJDLQ7KDW·VKDUGHU business on mobile core and mobile DQG1)9&RQWLQXRXVWUDLQLQJLVDNH\ IRUDWHOFRZLWKDVLJQLÀFDQWEXVLQHVV SDFNHWFRUHDQGVRPHRWKHUSODFHVKH SDUWRIDQ\VXFFHVVIXO,7ZRUNIRUFHµ behind it, and we can’t afford to fail on a VD\VDQGJDLQRQVRIWZDUHEXVLQHVV+H $[HO&ODXEHUJZKRLVKHDGLQJXS1)9 production service, but we need to adopt WKLQNVWUDGLWLRQDOQHWZRUNYHQGRUVZLOO DW'HXWVFKH7HOHNRPDQGLVDPHPEHURI WKLVZD\RIZRUNLQJµ ec

eurocomms.com | european communications | 51 BACK PAGE

Hello, I’m here to sell you a connected future

Orange CEO Stephane Richard unveiled a dizzying array of new products and services at the company’s annual hello show in October. The 20-plus launches included a mobile banking service for Poland, a connected home app and a big data platform for businesses.

52 | european communications | eurocomms.com