On The Way to Management World Africa 2011

I’m writing this while travelling to TM Forum’s Management World Africa 2011 in Johannesburg, South Africa, where I’ll be giving a speech on “taking personalisation to the next level—exploring how communications service providers (CSPs) can optimise customer retention and profitability through SIM management.” (Despite most of my blog posts having been about IMS or LTE, this one won’t.)

So while flying on the Airbus A380, which, by the way, is the most advanced aircraft I’ve ever travelled in, I started to think about how telcos, in general, fail at personalisation and why they should really take a serious look at other sectors like the airline industry. A major difference can be seen when comparing the way CSPs and airlines price their offerings. Telcos, for the most part, have fixed pricing with tiered costs based on peak and off-peak hours, but they don’t really personalise it at all. Whereas airline fees vary depending on the time of your flight, the number of passengers on that flight, etc.

Then, taking it a step further, upon booking, airlines personalise all communication based on your mileage program level. You can also choose your seat depending on availability and class of service, and sometimes have the option of special meals or drinks. Even after landing, I will be picked up by a personal driver, who has my name on a large sign to help me find him in the crowd.

Looking at it, aircrafts like the A380 are complicated ‘monsters’, technological masterpieces on their own. However, the airlines do not really sell the technology—but rather the experience. And although the personalisation is limited somewhat, it is still much more than just an SMS informing you that the European Union regulatory data caps and prices are valid when you’re roaming, for example.

I will be presenting around this topic and how CSPs can make personalisation real for customers. The key elements needed to see it through? Comptel believes it’s a full-fledged fulfillment suite. Comptel Dynamic SIM Management uses a configurable dialogue engine to drive user interaction, backed with Comptel Catalog to ensure that the products defined can actually be delivered with a service and resource inventory for numbers and SIM-related data and, of course, real-time Comptel Provisioning and Activation.

I know this will be published after I land, but thought of writing this to begin to explore the issue of personalisation. I will continue with this direction during Management World Africa and in some blog posts to follow.

Around the World

Bloomberg…
India May Need ‘Tens of Billions’ in Broadband Network Spending
India, Asia’s third-largest economy, is targeting better public access to information and services—a move that requires billions to expand broadband connectivity. The opportunity for telecom operators and both local and global companies supporting the infrastructure build-out is tremendous in this region, where the number of broadband connections is expected to jump 13-fold to 160 million by March 2015. However, this dramatic, rapid subscriber growth is challenging the scalability and affordability of India’s broadband network and 3G services.

As the article notes, overcoming growth issues requires new business partners and ways of structuring to make money, in combination with some innovation. Flexible, dynamic OSS solutions are also essential for enabling operators to manage and monetise these offerings.

The East African…
Global Cellphone Makers, Telcos Scrambling for East African Market
Like India, East Africa’s fastest growing sector is the telecoms industry. According to Jolyon Barker, global leader at TMT Deloitte, this will continue to be the case in the coming years, as more international companies invest in the region, operators heighten the competition and people own handsets and connect to the Internet anytime, anywhere.

Some of the key challenges facing the telecom sector in East Africa include the need for better infrastructure and energy supply to meet the demand for newer technologies and more connectivity services. There is also increased pressure on operators, particularly small, local ones, to find innovative ways to grow while maintaining a high quality of service on tight margins. Communications service providers (CSPs) can effectively handle this pressure with the right levers to control service/resource supply and further encourage customers’ use of data services. What advice would you give to CSPs looking to survive and succeed in the East African market?

RCRWireless…
LTE Asia: Can Mobile Operators Sell Volume-Based Pricing to Customers?
Sabah Hussain of Informa Telecoms & Media believes that with the capacity crunch, it is not economically or technically feasible to provide unlimited broadband for all. But will customers be able to understand volume-based pricing, and will they accept it?

CSL, one of the first operators to launch LTE, has proved that volume-based pricing can indeed be implemented while keeping customers satisfied. The operator has accomplished this by educating subscribers on how to keep track of their data consumption. It has helped them avoid bill shock via text messages, made it easier for customers to upgrade their price plans or buy additional capacity at any time, and ensured high-quality over-the-top (OTT) services. Sabah goes on to explain that “a more controversial strategy has been to migrate all CSL customers to LTE no matter what.”

Overall, Sabah concludes, moving everyone to LTE is an advantage because customers will no longer have to worry about the variations in quality of service they’ll receive or wonder about the differences between 3G and 4G. Do you agree with Sabah’s points about the benefits of moving all customers to LTE?

What Can Developed Market Telcos Learn from Emerging Markets?

By: Andy Hicks, Research Manager, EMEA, Telecoms, IDC

By this point, most of us know how dramatically mobile communications have affected the emerging markets, bringing services and information to people who previously had only tenuous links to the larger world. Mobile payments have brought elementary financial capabilities to millions of people formerly dependent on cash. Newly available information on markets, agricultural practices, government services and health have also eased and enriched users’ lives. Communications service providers (CSPs) are offering discounts based on the current usage of individual base stations, stretching their customers’ money and taming network congestion.

The speed of development in emerging markets leads some commentators to proclaim that we live in an era of “reverse innovation,” where things happen first in developing markets and then are exported to mature markets. I’ve never liked that term, which both flirts with condescension and seems to ignore the fact that, from the beginning, the work that went into most of these services occurred in markets developing and developed alike. But what of the central point? Have telecoms in emerging markets produced products or practices that could improve the business of CSPs in the developed world?

At first glance, maybe not. Mobile networks in Sub-Saharan Africa can double as point of sale networks because thereias no established competition, and because regulators are willing to grant them some leeway in order to extend financial services to the unbanked masses. In the developed world, telecoms networks will never supplant the established clearinghouses. Instead, the industry is focussing on enabling Near-Field Communications (NFC), which, in turn, require a level of infrastructure rarely found in emerging markets. And probably the industry’s biggest worry—competition with over-the-top players— has been a non-issue in emerging markets, since few people can afford data subscriptions. Basic pocketbook issues have meant that in low ARPU areas, it’s a 2G revolution.

But if you break down the emerging market success stories, you start to notice that many of the best practices are found on the IT side of telecoms, whether in charging or basic service design. Here, briefly, are three lessons I think we can draw from emerging markets:

• Compelling services are real-time services. Given the predominance of prepaid in emerging markets, it’s no surprise that real-time capabilities are so prominent. The dynamic tarriffing I referred to above relies on real-time analytics and discounts to direct users to less-trafficked cells. In developed markets, a few CSPs are experimenting with similar capabilities for their data networks, both pre- and post-paid.
• Usability is even more important than you think. Everybody mentions Apple when they want to talk about design, but when your transport is SMS and some of your user base is illiterate, making your tasks lightweight, universal and fool proof is a necessity. Developed world users flock to well-designed functionality as well. And optimizing communication between the client and the data centre is still very much an issue in telco services.
• Identity management is a key telco asset. If anything, it’s even more important in developed markets, where the telco has less of a natural place in payments value chains and where fraud can produce much higher damages in absolute terms. When NFC availability depends on vendors and the transaction is cleared by somebody else, the ability to certify a user is a natural capability of the CSP—until OTT players capitalize on foot-dragging to take over that function, too.

There are almost certainly others. Think of it this way: emerging market CSPs are running smart pipes over voice/SMS. Anybody in carrier IT can draw inspiration from that.

Andy Hicks covers telecom software, services, and business strategies in EMEA, with special focus on emerging markets, at IDC. Currently, he is focussing on the IT-ification of telecoms, the increasingly complex services market they compete in, and the work of multinational groups to rationalize their operations across borders.

Q2 2011: An Update on Comptel’s Business and Strategy

Today, we announced our results for the second quarter of 2011 and the first half of this financial year.

This past quarter has been a decent one for Comptel. Our order flow improved from the previous year, and our business developed favourably in the Middle East and Africa, where the measures initiated late last year, such as investments in customer service and consulting resources, have yielded results. In our largest market, Europe, the net sales remained low, which was the main reason for a decreased Group net sales. However, we are optimistic that the decision to split Europe into East and West, and to reorganise our operations to get closer to customers, will help improve the situation. Overall, Comptel’s financial position remained strong during this period.

Looking beyond the figures, the first half of 2011 has been a busy one for Comptel. We attended a number of large events, including Mobile World Congress (Barcelona, February) and Management World (Dublin, May), and held our very own Comptel User Group – CUG (Helsinki, June). All of these were excellent showcases for us, and we had many successful business meetings. We also closed 10 deals of over €500K in value (compared to eight in the same period last year), including four that we consider strategic (NBN CO and three Comptel Control & Charge) deals. Also, as mentioned above, we reorganised to bring our sales and services capabilities closer to our customers and prospects. In particular, we grew our sales force in Australia, Germany, Italy, Russia and the UK. We also made a number of new appointments to the board.

Going forward, Comptel will continue to invest further in the development of our sales and service channels, as well as in our products.

So all in all, it was a busy first half of the year, and we have an even busier second half ahead of us!

Around the World

Wireless Week
CTIA, RCA Oppose FCC Bill Shock Proposal
Three major wireless industry groups have come out against the FCC’s bill shock proposal – Cellular Telecommunications Industry Association (CTIA), the Rural Cellular Association (RCA) and the Rural Telecommunications Group (RTG) all have filed comments opposing the commission’s move to mandate subscribers’ usage alerts and other billing information that will help customers avoid unexpected charges on their monthly bill.  Here’s what the three bodies have to say:

• CTIA argued that such mandates are unnecessary because carriers already offer customers adequate tools to monitor their usage.  They also claimed that the FCC lacks the authority to impose usage alerts and other information disclosures, and that the proposed rules would violate U.S. First Amendment protections.
• The RCA said that the FCC’s proposed customer service rules would be unduly burdensome for rural and regional carriers, and that [the] national [ones] were the main culprits behind unexpectedly high wireless bills.
• Like CTIA, the RTG maintained that carriers would have to reconfigure their billing system to accommodate the new mandate, and it would “impose substantial costs on all carriers and have an inordinately harmful impact on smaller [ones].”

What do you think of these groups’ arguments?  Should the FCC mandate CSPs or let them manage cost control on their own?

Light Reading
Where in the World Is LTE?
To close out 2010, Light Reading compiled a list of the world’s commercial LTE services.  While there is much hype in the industry about the technology, only nine were actually deployed –not including pilot networks or user trials.  Moving forward to 2011, Rethink Wireless’ Caroline Gabriel noted in a post that the Global mobile Suppliers Association says there are now 180 operators in 70 countries that are deploying, trialling or evaluating LTE; however, these figures mask the fact that most carriers will stick with tests or small scale ‘hotzone’ roll-outs for several years.  Will 2011 be a repeat of 2010 in terms of LTE deployments?  How do you see LTE rolling out this year across the globe? 

CommsMEA
Gathering Momentum
Editor Roger Field reflects back on his conversations with industry experts and believes that the innovations and trends from 2010 will move into the mainstream for 2011 – the key themes he sees in the Middle East and Africa this year are:

• Consolidation in the operator space, particularly in Africa, because of the low average revenue per user (ARPU) and increased competition
• Larger strides in broadband deployments to bring subscribers a new level of data services
• Demand for 4G infrastructures to support consumers’ consumption habits with smartphones and tablets – and even on the fixed side – with IPTV and video-on-demand

While telcos in the region may be facing a decline in mobile and fixed voice ARPU, Roger points out that it is reassuring to see that huge investments are being made in infrastructure, which will allow telcos to offer a new breed of bandwidth-hungry apps – and tap into new revenue streams.

Around the World…

Connected Planet | Unfiltered Blog…
CTIA vs. FCC in Bill Shock Dust-Up
BSS/OSS reporter Susana Schwartz gives us her take on the recent back-and-forth between the Federal Communication Commission (FCC) and CTIA regarding the former’s survey on “bill shock”. As brief background, the CTIA started a dispute by calling the latest FCC data on bill shock “inflammatory,” with the FCC responding in a blog post that the CTIA is “denying bill shock by distorting the facts.” Regardless of who’s right or wrong, Susana raises an interesting point: “If the CTIA’s concern is well-founded—if only 30% of the respondents in the FCC bill shock survey said they were over 18—then where are we? Let’s pay attention to the perception of even young customers, as they are the near-future purchasers of services and plans. They will graduate and get jobs and pay bills, and they are the ones most savvy with social media and apps, etc.” Undoubtedly, these services will shape the future and certainly influence the telco industry. It is more important than ever for CSPs to be innovative and dynamic, and offer personalized services to subscribers at a price they are willing to pay for.

For more on the FCC-CTIA situation, Matthew Lasar of Ars Technica also covered bill shock and analyzed the FCC’s survey data in his article, “Fear and Loathing over Mobile Phone ‘Bill Shock’”.

Business Intelligence Middle East…
Africa & Middle East Mobile Broadband Adoption Will Grow Faster than Global Average over Next Five Years
According to a recent report from Pyramid Research, the future growth of broadband in Africa and the Middle East will be driven by mobile broadband. This is largely due to poor wireline services and innovative branding and packaging from mobile operators. It is expected that the total number of subscribers will reach 38 million by 2014, which is slightly faster than the global average. The report examines the current and forecast broadband landscape in the region in terms of subscribers and revenue, and looks more closely at the technologies that will enable fixed and mobile services. It also examines three key markets in more detail—the UAE, which exemplifies the most-developed parts of Africa and the Middle East; Nigeria, which illustrates the underdeveloped, sub-Saharan region; and Turkey, which represents the region’s middle-income markets. You can check out the report in full here.

TM Forum Online Community…
BSS Is Dead, Long Live BSS!
A TM Forum online community member contributed a blog post that looks at the “great BSS/OSS divide”. The terms BSS and OSS have traditionally been differentiated in the telco industry, yet with the combination of all-IP network transformation and service convergence, these have been more frequently blended together. This particular blogger raises an insightful point—“We have all heard this, but is it actually happening in the real world? If it is, how do we now define the functions that traditionally fell in the BSS camp…?” What are your thoughts on this topic? Do you think the BSS/OSS gap is closing?