Thursday, December 20, 2012

Blueprint 2013: OSS/BSS Adapts for Complex Services

Customers are tough to get and easy to lose. The good news is that communications service providers (CSPs)have more and more options for attracting and retaining customers. Here are nine strategies that will play out in 2013.

  1. Policy will evolve from a isolated defensive capability to business integral offensive measure. CSPs – particularly mobile operators – currently use policy to a large extent to protect their network. Increasingly they’ll use policy to differentiate their offerings and services based also on customer personal preferences, purchase and usage history. This will require integrated solution between PCRF and OCS, that enables a common product offer creation environment that can be used for both voice and all data product definitions (WCDMA, WiFi, Fixed Broadband).  
  1. CSPs will transform over-the-top (OTT) services from a problem into an opportunity. Consumers want ubiquitous communications services. The only way that CSPs can meet that demand is by accepting that for part of the time, they’ll have to serve their customers over someone else’s network. CSPs also have to accept that other CSPs and OTT providers will use their network to serve their customers. Why? Because no one owns the customer. If a CSP won’t meet their needs, they’ll turn to one that can. 
Instead of viewing OTT services as a problem, CSPs will increasingly look at them as a business opportunity. For example, a mobile operator could provide a certain amount of bandwidth and prioritization to a video OTT provider that agrees to share revenue because the QoS would help differentiate its service.

  1. CSPs will optimize their OSS/BSS infrastructure to accommodate increasingly complex services. Billing and service assurance will become more important for delivering an optimal mobile customer experience. As more services are introduced, and as the underlying network technologies become more complex, CSPs will focus on their OSS/BSS infrastructure as the centerpiece for ensuring a great customer experience. 
  1. Tailored pricing and packaging will become a market differentiator. One size doesn’t fit all. Not every mobile customer, for example, needs or can afford 5 GB per month or 20 Mbps. Tailored packaging of e.g. social media services at a low weekly cost will be one way lower the entry barrier and grow in new segments. With any technology, differentiated pricing appeals to a wider range of needs and budgets, enabling CSPs to cater to all demographics while ensuring profitability. 
  1. Smartphone growth won’t plateau anytime soon. Sure, smartphone penetration is already above 50 percent in markets such as the United States. But globally, it’s only 15 percent. That’s a lot of room to grow, and the grow will happen in customer segments that has different needs and wallets compared to the first wave of smartphone customer. Doing so requires differentiated packaging and pricing and other innovative rate plans and service bundles, which in turn require highly flexible BSS/OSS platforms. 
  1. Mobile broadband subscriptions will continue to grow. There are 2012 approx. 1.5 billion mobile subscriptions in the world. A big figure, and still only representing less than 25 percent of all mobile subscriptions. It is expected to grow to 6.5 billion mobile broadband subscriptions globally by 2018, representing an uptake of over 70% of all mobile subscriptions. So how can operators succeed to win in this new battle for market share and avoid sever price erosion of broadband data pricing. One key requirement will be highly flexible BSS/OSS platforms in order to create innovative and differentiated offerings that appeal to new segments and at the same time avoid price erosion in among existing customers.  
  1. Customer experience will matter more than ever. A reputation for poor service is expensive to overcome. It’s a fact today and it is getting increasingly important tomorrow, as the number of customers that operators are fighting about is not increasing. The increase is in data usage, number of devices and subscriptions. So in order to grow business existing customers need to be maintained especially as the cost for acquiring new customers is very high. Upsell of new services and subscriptions is difficult to customers that are not happy, and on the other hand customers that are happy are likely to buy more, talk well about you, and by that also help creating growth. So make sure that you can deliver on your promise.  For example, if they want to offer business customers a premium experience at a premium price, you first must have the tools in place to assess ensure that experience every step in both the purchase process, activation as well as during actual service usage. 
  1. CSPs will analyze customer behavior so they can capitalize on it. Simply providing a voice-and-data pipe out to a customer and collecting a fee is no longer a viable business model. Savvy CSPs realize this. They are deploying OSS/BSS solutions that enable them to analyze how all their customer (prepaid, postpaid and hybrid) are using their services and then create tailored promotions and tariffs that leverage each customer’s or customer group’s habits and preferences. 
  1. CSPs will turn customer disgust about being blindsided into a business opportunity and market differentiator. The global backlash against bill shock is just one example. CSPs suffer financially, too, when surprised customers become former customers or share their anguish with their social networks. CSPs also have the cost of fielding all those billing inquiries. Those are among the reasons why mobile operators, MSOs and other CSPs will increasingly provide customers with real-time control of minutes, messages and megabytes used. This information is particularly important for customers with shared, multi-device plans, such as a family or small business.
Providing this type of granular information in a timely manner requires an OSS/BSS solution capable of tracking, controlling and aggregating it. This investment also enables CSPs to create specialized offers, such as providing customers who are approaching their monthly allotment with the option of buying another block of minutes or messages at a special rate. This proactive outreach benefits the CSP’s reputation because now customers perceive it as being sensitive to their budget rather than trying to nickel and dime them.

About the Author

Niclas Melin, Director of OSS and BSS Marketing, joined Ericsson in 1995. He specializes in understanding how real-time capabilities in OSS/BSS can improve the customer experience and create value, and has developed a deep understanding of operators’ challenges and opportunities through operator workshops, discussions with industry analysts and his former role as chairman of the Ericsson Charging User Group.

About Ericsson

Ericsson is the world's leading provider of communications technology and services. We are enabling the Networked Society with efficient real-time solutions that allow us all to study, work and live our lives more freely, in sustainable societies around the world.
Our offering comprises services, software and infrastructure within Information and Communications Technology for telecom operators and other industries. Today more than 40 percent of the world's mobile traffic goes through Ericsson networks and we support customers' networks servicing more than 2.5 billion subscribers. 

Infonetics: Service Provider CAPEX Increases in 2013

Globally, mobile service revenue is the main growth engine in the overall telecom/datacom market, up 4.3% year-over-year in the first half of 2012,according to Infonetics' newly released December 2012 Fundamental Telecom and Datacom Market Drivers report, which analyzes global and regional market trends and conditions.

Some key trends:

  • User mobility, specifically BYOD anywhere, is putting pressure on carriers to move to a single network for fixed and mobile access, internet traffic, and private/premium services.
  • Data traffic growth is outstripping transport equipment costs: traffic is climbing 29% annually while equipment costs are falling 10%.
  • Software-defined networks (SDNs) are here to stay, but not today: SDNs are on service providers’ minds, but it is a longer-term challenge to find implementations of hybrid SDN and non-SDN in live networks.
  • The phase out of stimulus monies and pressure on government budgets is decreasing public sector spending and taking a bite out of overall enterprise growth.
  • With security top of mind due to unprecedented threats and the growing BYOD trend, businesses everywhere are looking to integrate security into everything from smartphones to routers and switches, and are evaluating data center security appliances, cloud security services, and security for virtualized environments and public and private clouds.

“As we’re ending 2012, Europe’s crisis remains uncontained and is now spreading to Germany. The potential of shaking business confidence everywhere in the world has risen to new heights, and the IMF lowered its growth forecast and is warning of recession risks due to downward revision of global GDP, which now stands at 3.3%. Economic readings are worrisome everywhere but the U.S., but so far the impact on global telecom and enterprise remains tame, and we’re forecasting capex to grow nearly 4% in 2012 over 2011,” notes Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

Téral adds: "With the announcement of AT&T’s and Deutsche Telekom’s multi-billion dollar investment plans, next year’s capex outlay looks brighter."

UK Attracts 7 Bidders for Upcoming 4G Spectrum Auction

The following company have registered as bidders in the UK's forthcoming 4G mobile spectrum auction, which will start in January 2013:

  • Everything Everywhere Limited (UK)
  • HKT (UK) Company Limited (a subsidiary of PCCW Limited)
  • Hutchison 3G UK Limited
  • MLL Telecom Ltd
  • Niche Spectrum Ventures Limited (a subsidiary of BT Group plc)
  • Telefónica UK Limited
  • Vodafone Limited

Bidders will be competing for spectrum in two separate bands – 800 MHz and 2.6 GHz.

Ofcom said this new spectrum will boost the amount of airwaves available to mobile phones by more than 75%.

"The 4G auction will be a competitive process that will dictate the shape of the UK mobile phone market for the next decade and beyond," stated Ed Richards, Ofcom Chief Executive.

O2 Picks Nokia Siemens Networks for London Upgrade

O2 (Telefónica UK) has selected Nokia Siemens Networks for its upcoming LTE rollout across London and the South East of England. The UK operator is anticipating a rapid launch of 4G following Ofcom’s spectrum auctions scheduled for early 2013.

Under the contract, Nokia Siemens Networks is providing its Single RAN platform, and implementing its high-capacity Liquid Radio solution based on its Flexi Multiradio 10 Base Station. The contract includes Nokia Siemens Networks’ NetAct network management system. It also includes network implementation and care services across 50 percent of O2’s radio access network including the South-East of the UK and London.

“We’re investing in our network now to ensure we’re able to make 4G available to our customers as soon as possible following next year’s spectrum auctions,” said Andrew Conway, Head of Mobile Access for O2. “Our choice of vendor was based on the positive experiences we’ve had implementing Nokia Siemens Networks’ Liquid Radio solution in our network.”

Pluribus Raises $23M for Hardware Accelerated Network Virtualization

Pluribus Networks, a start-up based in Palo Alto, California, raised $23 million in series C funding for its hardware-accelerated network virtualization platform for private and public cloud data centers.

Pluribus provides a platform for fabric-based computing that enables applications to move into the network, and to serve both physical and virtual network infrastructure. The solution includes highly-optimized Server-Switch hardware along with a a programmable, distributed network operating system (Netvisor).  The goal is zero-touch provisioning of virtual machines and network services. Pluribus also provides an ability to store full data flows and sessions in each of its F64 Server-Switches. The company has said that across a fabric of F64 Server-Switches, tens of Gigabytes per second of real-time analytics can be captured and processed.

The new funding round was led by Menlo Ventures with the participation of existing investors New Enterprise Associates, Mohr Davidow Ventures, and others.

  • Pluribus Networks was founded in 2010.
  • The founders of Pluribus include Sunay Tripathi, previously a Senior Distinguished Engineer for Sun Microsystems and was the Chief Architect for Kernel/Network Virtualization in Core Solaris OS; Robert Drost, previously a Sr. Distinguished Engineer and Director of Advanced Hardware at Sun Microsystems; and C.K. Ken Yang, a Tenured Professor of EE at UCLA with a focus on high-performance communication.
  • In September, Pluribus announced a partnership with TIBCO Software Inc. to deliver TIBCO Enterprise Message Service Appliance and TIBCO FTL Message Switch.

René Obermann to Step Down as CEO of DT in One Year

René Obermann will step down as CEO of Deutsche Telekom at the end of 2013 and has asked the company's Board of Directors not to renew his contract after that point. He will leave Deutsche Telekom after 16 years, of which he spent seven at the head of the company and 11 years as a member of the Board of Management.

Deutsche Telekom's current chief financial officer, Timotheus Höttges, has been named to succeed him as Obermann as of January 1, 2014.

“In the last few years we have found solutions for our key issues. Deutsche Telekom has the best network, the best customer service in the industry and is expanding its customer base with innovative products. As an employer, we have given the topic of cultural diversity new momentum, which has been recognized and even emulated beyond the company. Furthermore, we have driven a shift in the values at the company: Today, DT is defined by a culture of fairness and open cooperation. And the company also has a solid financial foundation. In short: this is the right time to prepare to pass the baton and ensure a smooth transition," stated René Obermann.

Ericsson Decides Against Taking Full Ownership of ST-Ericsson

Ericsson has decided not to take over full ownership of ST-Ericsson and  will take a non-cash charge of approximately SEK 8 b. in Q4, 2012 related to its 50% stake in the company.

Earlier this month, STMicroelectronics unveiled a new corporate strategy under which it will exit the ST-Ericsson partnership and the wireless broadband market, choosing instead to focus on sensors and embedded processing.

Ericsson continues to explore various strategic options for the future of ST-Ericsson assets. The company said it continues to believe that the modem technology, which it originally contributed to the JV, has a strategic value for the wireless industry.

Shenick Names New CEO and Opens in Silicon Valley

Shenick Network Systems named Gerard Moore as its new Chairman and CEO. Previously, Moore was founder and CEO of Spectel, which he grew from 10 to 240 employees, before it was acquired by Avaya in 2004. Moore is also Managing Partner of Sanvest Ventures. In 2008, Moore became an investor in Shenick and joined its board of directors.

The company has also expanded its executive team to include Ultan Kelly, CTO; Frank Bawle, VP of Engineering and Ameet Dhillon, VP of Marketing and Business Development.

Shenick also announced the opening of an office in Silicon Valley (Milpitas, California).

Shenick's TeraVM is a fully virtualized network test and measurement solution that emulates application traffic flows up to a Terabit/s using industry standard hardware.

"The demand for virtualized test systems is growing alongside the rapidly developing Cloud market. Shenick's new Tera, a fully virtualized test solution, is perfectly poised to take advantage of this market," stated Gerard Moore, CEO, Shenick Network Systems.