Around the World

Microsperience…
Capacity crunch: It’s Not What You Think
Analyst Teresa Cottam looks at the truth behind the capacity crunch and why it is somewhat misunderstood.  She believes that the term “capacity crunch” is a complete misnomer and disguises what the real problem is—not increased network traffic.  Rather, Teresa says, “traffic is rising, capacity is being consumed, and we’re not making sufficient incremental revenues to compensate for this usage or justify further investment.”  If revenues were going up along with the traffic, we would have a pure play engineering challenge. The difficulty is, of course, that revenues are not increasing in line with traffic; so not only do we have an engineering challenge, we also have business, operational and customer challenges.  Customers require adequate Quality of Service and desire greater capacity and faster speeds, but in many countries, the business case for continual network investment may be far from clear cut.

Connected Planet…
Mobile Operators Brace for Bill Shock Proposal
Joan Engebretson reports on the Federal Communications Commission’s (FCC) plans to introduce a proposal that attempts to help prevent wireless “bill shock”.  This has been a hot topic for some time now, and becoming even more of an issue in the U.S. with Verizon admitting that its customers had been erroneously charged more than $50 million for wireless data services. The proposal reportedly will require carriers to warn users when they are close to reaching voice, text or data limits or about to incur roaming charges.  Carriers are opposing these regulations and arguing that they are not needed.  Most certainly, they are concerned about potential lost revenue—particularly if the FCC requires them to give customers the opportunity to have service automatically shut off when they reach a certain usage level.  According to news reports, the plans would not impose that requirement, but the FCC will seek input on whether it should do so.

Billing & OSS World…
Cloud Services Will Change Customers’ Service Expectations
Charlene O’Hanlon blogs about a new report by IDC that shows as more companies adopt cloud, service providers will be forced to change from their traditional, labour intensive service delivery models to an asset-based one.  According to a study, the change in business models will arise as a result of the industry’s move towards outsourced cloud services and the accompanying performance and relationship expectations of customers.  The increased use of new delivery models, such as cloud services and SaaS, will change customer expectations regarding the performance of their providers and subsequently change their relationships with providers.  Service providers will need to develop road maps that show how customers are looking to adopt these utility-based services that cut across entire organization requirements.  Additionally, many outsourcers and providers will need to make major adjustments to their delivery capabilities, partnership ecosystems, business models and service offerings, and will need to examine their roles and positions within and beyond the traditional IT and business process services market.

On Our Way to Futurecom: October 25-28 in Sao Paulo

Here at Comptel’s Sao Paulo office, we are getting all geared up for next week’s Futurecom, which will be taking place in our home town. Futurecom is one of the most important events of the year, not just for Brazil but for the whole region. It welcomes approximately 15,000 people (many of them decision-makers as presidents, directors and managers from both the vendor community and communications service providers) from across approximately 40 countries.

Futurecom offers delegates the opportunity to see some of the region’s greatest personalities in the world of communications, who will be giving presentations about their companies, views, trends, best practices, lessons learned and more. Often, these generate a fairly large audience discussion, as the primary format of the event is panel-based; speakers make brief presentations on particular themes, and after that, they get together for heated debates to dig deeper into these communications topics.

On Wednesday, October 27 at 2:40 Brazil time in IT Arena Pavilion A, Comptel will be giving one of these talks, in conjunction with our partner Cisco. We’ll be diving into the opportunities and challenges cloud presents for communications service providers and enterprise customers, as well as our participation in several TM Forum Catalyst projects.

There is also an exhibition area, where key suppliers and operators show their latest product and solution innovations. Indeed, Comptel has a booth at the event (#B2), where we will be showcasing our Comptel Dynamic OSS, and in particular, focusing on service fulfilment and policy control and charging.

We can’t wait to meet existing and prospective customers and partners. Get in touch with us at [email protected] if you would like to schedule an appointment!

Around the World

Scott Stewart CIO Blog…
Telcos Could Rule the Clouds
Scott Stewart, blogger, CIO and cloud computing consultant, highlights a recent blog post by Chirag Mehta that discusses the massive opportunities that telcos (large and small) have in the cloud computing space, and shares his thoughts about how telcos can be well-positioned to provide and distribute virtualized desktops, infrastructure as a service,  software as a service, voice, video, cloud-based enterprise applications and productivity tools.  The premise of Stewart’s post is his experience of putting together a business case for cloud computing—it was discovered quickly that the telco model was favored (out of public, private, hybrid, etc.) and tagged by his business as the ‘trusted cloud’ model.  Why is this?  Because with the telco model, you are able to deliver the full benefits of a cloud-based subscription model, but without the dependency of the Internet.  Under this model, you are still able to provide the economies of scale with shared services and multi-tenanted cloud—but delivered over a secure, private, high availability network.  Stewart believes telcos are so well-equipped for cloud computing because many have already been through multiple evolutions of upgrading their networks to the latest protocols and architectures, and most already have advanced knowledge of cloud architecture and operate modern service delivery platforms.  What are your thoughts on telcos and cloud computing?  It was certainly a hot topic at our User Group—check out Bob Machin’s recap of the roundtable discussion.

Microsperience…
When the “Best” System is Not Good Enough
As part of Microsperience’s series on sourcing telecoms BSS and OSS, analyst Teresa Cottam looks at some of the common limitations and pitfalls when evaluating BSS/OSS in her post.  She highlights a frequently overlooked point: that the “best” system may not be the right system for you.  Most people’s concept of “best” is related to function; that is, the range of complexity of functions the system can perform.  As Teresa discussed in her recent post BSSOSS: Buy in haste, repent at leisure, there is too much emphasis when buying BSS/OSS on the technical features of the systems and not enough on other factors.  People often believe that capturing all of the possible features required now and in the future is a good starting point to map vendors and evaluate their offerings.  In fact, it can lead to extended and inefficient tendering processes, additional cost, frustration and sometimes completely the wrong decisions being made.  In Teresa’s opinion, the very worst approach is to have extensive feature requirements without any attempt to weigh them intelligently.  When a fully-functional system is in place you rarely find that the CSP implements all of the functions they seemed so concerned with when selecting the system.  The key takeaway from Teresa’s post is that there is no overarching ideal solution to CSPs’ business problems.  Each business has a legacy position, different objectives and challenges, and therefore different requirements.  What is great for one business may not be great for another.

Light Reading…
Data Surge Fuels Policy Control Boom
The market for telecom network policy control servers is booming as CSPs scramble to manage the growing volumes of data running over their networks.  According to research conducted by Heavy Reading, operators are aiming to use their policy control platforms to develop new charging models and develop tiers of services, so they can move away from the flat-rate mobile data models that currently prevail.  More than 70 network operators were surveyed about what prompted their decisions to deploy policy servers or Policy Charging and Rules Function (PCRF). Some of the report’s key highlights include:

• More than 80 percent rated the option “Enable us to apply ‘fair use’ management techniques to better handle network congestion” as either critical or important.
• 80 percent also cited “Enable us to offer tiered or customized services to different classes of customers or to individual customers” as either critical or important.
• More than 75 percent picked out “Improve our ability to meter and charge customers for service features and attributes” as either critical or important.
• And almost the same number identified policy servers’ ability to help carriers “improve quality and depth of network traffic and applications reporting and analysis” as either critical or important.

Graham Finnie, Heavy Reading’s chief analyst, says the key to making the most of policy servers is to be able to change policy conditions/rules without requiring the vendor to rework the code, and to have them interconnected with a number of other key network and SPIT elements.

Are Cloud Services a Market for Telcos to Lose?

At the Comptel User Group last week, a number of the communications industry’s issues du jour were offered to the delegates for roundtable discussion. Amongst the most popular was the topic of cloud services.

It’s a subject which has not exactly suffered from neglect this year, but nonetheless, it was interesting to hear it discussed between communications service providers (CSPs) and network specialists (such as Comptel partners IBM, Cisco and Alcatel Lucent)—people who have a real and pressing interest in how cloud will play out as a credible service for CSPs as well as a possible new revenue source for equipment and software suppliers.

The attention of the group was quickly caught by the question of how big an opportunity cloud could be for telcos.

There is little doubt that cloud services are going to be big and in great demand—the business case is easy to make, in terms of both cost savings and business flexibility. Furthermore network and virtualisation technologies are making cloud increasingly viable. This will continue with the roll out of 4G, which will make access to cloud-based services ubiquitous across fixed and mobile networks.

And no one questions that carriers have some real competitive advantages to exploit in the cloud services market, particularly through their command of the communications network and their influence and control over the quality of delivery.

So cloud services for telcos—it’s all good? Well maybe.

Our delegates raised an issue which we don’t believe has been widely discussed—exactly how evident are telco advantages to the addressable market? Telcos know the value of their technology, but to what extent is it a differentiator for the average customer? After all, it’s hard to value what you don’t understand. Are SMEs aware of the difference between ‘smart pipe’ and ‘dumb pipe’? Do they know (or care) how little influence the IT- or Internet-based provider can have over the quality of service (QoS)? Do they understand the difference that QoS will make to the reliability of their connection?

Telcos undoubtedly have great advantages in the provision of cloud services, but there’s still a lot of education to be done to sell those advantages to the market. Now, as we move out of the early-adopter phase, telcos must grab that all-important mindshare.

Comptel User Group: Lessons Learned and Best Practices

The Comptel User Group has got off to a great start!  We’ve had more than 100 communications service providers (CSPs), partners, analysts and Comptelians from around the world travel to Windsor to share their experiences with OSS/BSS, network transformation, service innovation and business growth, among other things.

Wednesday featured CSP and technology partner case study presentations on the challenges and opportunities around mediation system upgrades, network discovery and inventory, as well as:

• Dynamic SIM management, including number allocation.  Country host O2 gave a keynote presentation that looked at the evolution of what SIM can do; this area is rapidly expanding, with the technology being embedded into more devices like automobiles.  Following that, a Wataniya case study covered the demand for vanity numbers in Kuwait and how this form of personalization is driving a better customer experience and competitive differentiation.

• Subscriber repositories for generic user profiles.  Hong Kong’s SmarTone-Vodafone led an interesting session that looked at the provisioning of subscriber profile attributes, like customer type (fixed or mobile broadband, etc.), and how it has helped the company to offer unique, personalized data and other advanced services, and enable the concept of the ‘smart pipe’.

• Policy control (both in terms of bandwidth management and roaming cost control).  TeliaSonera spoke on the launch of its 4G network and the introduction of its new tiered pricing plans to balance revenues (monthly fee plans), resources (network usage allowances) and customer satisfaction (faster speeds).  In addition, Brazil’s Oi covered the importance of PCRF in optimizing customers’ quality of service and allowing it to innovate new services.

Thank you again to those customers, partners and staff that presented yesterday.  If you have any questions about the content or would like to learn more about these areas, please contact [email protected].

Stay tuned for thoughts from the solution workshops and LTE and cloud services roundtables.  We’ll also have the results from our interactive voting session around CSPs’ revenue streams and business models.

Comptel User Group Kick-Off: What Lies Ahead for OSS/BSS?

The Comptel User Group (CUG) kicked off yesterday with a lively, interactive discussion involving members of our executive management team and several OSS/BSS industry analysts.  The core theme throughout the day—what lies ahead for OSS/BSS?

Arnhild Schia and Gareth Senior first posed this question by looking at the dumb pipe, smart pipe and Telco 2.0 business models, and which type of communications service provider (CSP) can best balance revenue, resources and the customer experience, to come out on top.  The group talked about the many variants (customer base, region, etc.) that affect this—and the critical role software suppliers play in helping to strategically direct CSPs to the best position.

Building on this, the discussion shifted to cover the following hot topics—and more:

• The importance of understanding the ‘wholeness’ of the customer (taking customer experience management to the next level),
• Charging fairness, whether it be the conundrum of the ‘all you can eat’ model or that of roaming management,
• The evolution of the fulfillment process, as it becomes more active, real time and ‘service aware’, and
• Business policy management, with new technologies like cloud and LTE changing the game.

We look forward to diving into these challenges and opportunities further today with customer and partner case study presentations, and tomorrow with solution sessions and issues-focused roundtables.

Leave a comment, and let us know what you think lies ahead for OSS/BSS in the coming months and years.

What’s in Store for the Comptel User Group

Comptel is hosting its annual User Group (CUG) this week in Windsor in the U.K.  In its 13^th year, the meeting provides Comptel’s customers and partners with an opportunity to exchange information with the company’s fulfillment, mediation and policy control experts and executive management—and most importantly, with each other.

Networking and social interaction are among the key goals of this event.  Supporting this initiative, we’ve developed a dynamic agenda that includes:

• A welcome speech from CEO Sami Erviö, followed by a presentation by CTO Gareth Senior, who will provide insight on the company’s direction and introduce a demo of the company’s cloud offering.
• Presentations from Comptel customers, such as TeliaSonera, SmarTone-Vodafone,Movistar Argentina and others, on hot topics like policy control, generic user profile (GUP) and mediation.
• A keynote from Rob Van Den Dam global telecommunications industry leader with partnerIBM Institute for Business Value, on the changing face of telecoms.
• An interactive session that will explore key telecoms trends, including mobile broadband, LTEand cloud computing.  Stay tuned for the feedback!

We’re excited about the CUG and our ability to keep an active forum for our customers and partners.  Comptel invites both those attending and those unable to make the event to participate in discussions on the blog, as our staff posts on some of the activities.

GTB 40 under 40 Summit: Is the Way Forward Dumb or Smart?

London, September 27-28, 2010

Global Telecoms Business (GTB) hosted an invitation-only summit for 40 leading telecoms entrepreneurs under the age of 40 in 2010, drawn from operators and network, software and services suppliers (including Gareth Senior, Comptel’s CTO). Most nominees presented or participated in discussion panels. Around 35 of the 40 nominated executives attended; discussions were wide-ranging and provided an interesting barometer on the state of the industry.

The forty foresee a significantly changing role for telecoms, which unsurprisingly finds itself at yet another crossroads. What’s perhaps different—and encouraging—is that the industry is starting to look outwards rather than inward for its strategic direction, recognizing that telecoms will be less an ‘endpoint service’ but will increasingly play an enabling role inside other industries and in broader service eco-systems. Telecommunications could, for example:

–      provide monitoring and metering for advanced utilities, smart grids, fleets, road congestion management and so on;

–      be built into devices, or bundled with services (Amazon’s Kindle was often cited as a disruptive device), which could point to a similar approach with gaming and other single-or limited-use Internet devices; and

–      be at the heart of ‘vertical’ applications for business, government, public services and more.

Much was made of device connections overtaking person-to-person as a point of focus. ‘Fifty billion devices’ currently seems to be the industry’s most quoted statistic, projecting the number of devices which will be Internet-connected by 2020. By comparison, the industry has just crossed the five billion mark for connected humans. No one is prepared to make confident predictions about exactly what will result from all of this connectivity (and in particular, where the new revenue will come from), but it seems fair to say that some interesting business-to-business dynamics are likely to emerge over the next few years. The outlook for telecoms may be cloudy, but it’s far from dull.

At the same time as looking for innovation, there is evidence of real focus on ‘the plumbing’, or optimising networks for the most efficient use per subscriber, service or device, largely to disconnect ever-growing traffic volumes from the costs to which they are very closely aligned today. Nominees expressed confidence in the power of more adaptable, resilient, software-driven networks to make the network more cost-effective and scalable for future services. This was reinforced by the GSMA, which believes the capacity crunch can be overcome through a combination of:

–      Effective, variable pricing—particularly tiered- and QoS-based,

–      Spectral efficiencies,

–      New 200 and 800 MHz spectrum—and the refarmed 900 and 1800 MHz range,

–      General expansion and greater sharing of networks,

–      Traffic offload through Wi-Fi and femtocells, and

–      Better traffic management—using caching and compression techniques at the network edge.

If there was a single recurring theme, it was the question of ‘smart pipe vs. dumb pipe’. Most of the 40 are predicting some flavour of smart pipe—exploiting the capabilities of advanced networks to create sophisticated and differentiated communications services—but shading into a more enlightened approach to content than just ‘becoming a media company’. This could perhaps be best described as ‘smart business’, founded on network capabilities but selling content where real advantages exist (e.g. in location services or QoS dependency). A significant number still argue for a much closer focus on the network, however, tending towards a highly efficient ‘dumb pipe’, focusing on the wholesale provision of network services to other service providers and industries.

In the end, the most compelling analysis for me is one that looks at the argument in a less ‘polar’ way than ‘dumb vs smart’ would suggest, instead considering networks-into-content as a spectrum of value, with opportunities to capture varying lengths of the value chain depending on market position, market context and technology or business advantages.  Nothing new here? To judge from this conference, what’s new is a much more realistic weighing up of those factors than we’ve seen in recent years, which should help the market open up realistic new business and resist some very real challenges from rising Internet competitors.

These are themes that will no doubt be explored further at Comptel’s upcoming Comptel User Group (CUG) next week—watch this space.