Fee-Fi-Fo-Fum: Evaluating Project Fi and Google’s Giant Plans for Wireless

In a video explaining the ideology behind its new wireless cellular service, Google describes Project Fi as an innovation in connectivity and communication. It’s an interesting experiment to be sure, but just how big of an impact can we expect Project Fi to have on telecommunications?

Google made headlines in the spring when it announced it was dipping its toes into the wireless waters with Project Fi, which will rely primarily on free Wi-Fi hotspots nationwide, supported by the Sprint and T-Mobile 4G cellular networks, to establish a continuous network. Project Fi is now back in the news due to reports of high initial demand. Google wrote in an email to hopeful subscribers that it will take until mid-summer for all of those who requested invites to receive full service access, adding that initial feedback has been “very positive.”

The service has earned hype for both its innovative use of technology – with Project Fi, your phone will automatically detect and switch to the best quality connection for your location, whether that’s 4G or Wi-Fi – as well its disruptive service terms. Project Fi is available without a contract, offers unlimited text and talk for $20 per month, plus $10 per GB of data, and includes a credit function that refunds subscribers the cost of any unused data at the end of the month. It’s interesting to note that much of the excitement of this announcement is around data and not voice services, which may underscore the idea that we’ve moved well past voice being the leading draw of cellular services.

There are a few reasons consumers are hopeful that Project Fi will turn the wireless industry on its head – the biggest one, of course, being Google’s reputation as an influential digital disruptor. Additionally, the announcement could not have been better timed, as many consumers are frustrated with the restrictive service offerings they receive from their current wireless operators and are eager for a more flexible and affordable alternative to knock the big players from their pedestals.

At the same time, evidence suggests that Google isn’t interested in a market takeover. The tech giant is known to experiment in the field of connectivity – see its Project Loon initiative and Titan acquisition, which rely on high-altitude balloons and lightweight solar-powered drones, respectfully, to expand LTE availability worldwide.

Additionally, in comments at this year’s Mobile World Congress, product head Sundar Pichai clarified that Google intends to help carriers push the boundaries of wireless, but not necessarily stand alone as a competitive operator at scale.

“Our goal is to drive a set of innovations we think should arrive, but do it a smaller scale, like Nexus devices, so people will see what we’re doing,” Pichai said.

So what can we realistically expect from Project Fi? The initiative represents a starting point in Google’s wireless experimentation. It would seem that the primary goal is to experiment with Wi-Fi-first networks. Could we soon see enough dispersion of Wi-Fi hotspots to make it possible for Google to run an entirely Wi-Fi powered phone service, free from reliance on cell network support and entirely independent to traditional mobile operators? The U.S. is certainly a great testing ground in that respect, as many other countries lack the Wi-Fi density needed to support Google’s experimentation.

Is it possible, too, that Project Fi might help Google prepare for the coming 5G revolution. Many in telecommunications believe that, in order to deliver dramatically more speed and capacity, 5G must be heterogeneous wireless networks built on unlicensed spectrums. Could Project Fi be Google’s attempt to learn what such a network might look like?

Though not completely unique – other operators offer Wi-Fi-first service supported by cellular networks – Google’s signal switching technology and data refunds differentiate the service enough to stand out. At the same time, the project’s early limitations – it’s exclusivity to the Nexus phone and the U.S. – suggests it won’t fully disrupt the mobile industry quite yet.

Instead, Project Fi offers a small platform for Google to experiment, adapt and learn from the technology and consumer behaviours. From there, the company will be able to evaluate whether early results are positive enough to proceed with some sort of larger-scale offering, or if it should leave mobile service to the mobile operators. Either way, Google’s innovative spirit and out-of-the-box approach offers a model for digital and communications services providers to adopt, and the initial excitement around Project Fi underscores Generation Cloud’s hunger for a real mobile revolution.

Download our book, Operation Nexterday, to learn the strategies and solutions that help mobile operators innovate their service offerings and intrigue Generation Cloud consumers.

Predicting the Next Big Thing in the Bulgarian Telco Market

This week, we hosted a media event in Sofia, Bulgaria, where we have an important global service delivery site. We employ more than 70 IT professionals there and are hoping to grow this office in the coming years. Our team caters to European and Middle East and African customers—quite often in cooperation with our global service delivery team based in Kuala Lumpur, Malaysia.

The theme for the event was built around the Barcelona-in-the Box concept, but this time, we wanted to highlight the Bulgarian market. Ulla Koivukoski gave a presentation entitled “Bulgaria on the Global Mobile Map,” which covered three main themes: Enriching the User Experience – Enriching the Operator, Big Data, and Business Transformation – Reshaping the Operator.

What we learned is that the Bulgarian mobile market is very similar to the markets in most European Union (EU) countries. For example, the number of post-paid customers is high when compared to the prepaid market, which accounts for just one-third of subscribers. The challenges in the Bulgarian market are also very similar to others in the EU. According to Business Monitor, the mobile average revenue per user (ARPU) in Bulgaria declined 25.3 percent in 2012, while mobile sector growth was at 5.5 percent and reaching 167.1 percent market penetration.

This means that communications service providers’ revenues are getting thinner, and at the same time, there are investment plans for bringing LTE to the market. The Bulgarian fixed broadband market is very advanced, and therefore, customers also have great expectations for mobile data.

During the event at Grand Hotel Sofia, the attendees shared their views about the Bulgarian mobile market. Most people admitted that they very seldom use mobile data, instead relying on open Wi-Fi networks that are widely available. Local operators could turn things around and monetise this traffic using LTE or operator-owned Wi-Fi.  We also brought new ideas concerning how to apply our ‘Event’-‘Analysis’-‘Action’ strategy to build business and showed one use case demonstrating how we can derive value from data with operational predictive analytics.

Comptel is ‘Making Data Beautiful’ with automated decisions that drive action, and we were honored to show the attendees in Sofia just how we do that.

Is There an Monetization Upside Using Analytics when Launching LTE?

Contextual Intelligence at Every Customer Touch Point

The telecommunications market has become increasingly data driven; it plays a central role and extends into all areas of people’s daily lives. Consumers and business customers alike are looking for services and applications that reflect their diverse and individual needs. Over-The-Top players (OTT) such as Facebook, Google, YouTube and so forth, are increasingly successful in winning the hearts, minds and wallets of customers, by offering the applications and services that meet customer needs ‘beyond connectivity’.

“Monetising the data” –topic has been hot for a while now in telecommunications and other enterprises. Monetisation in terms of growing the data traffic and revenue but also using the data for customer and network intelligence is a huge business opportunity and yet challenging to capture. We see data as a lever for the CSPs to connect emotionally with their customers at every touch point where they interact with their customers.

Such interaction include a specific, personalised campaign at the moment when the customer is most open for a new offering or a temporary capacity allocation for a heavy video upload need. Our consumer research, which we conducted in 12 countries across the globe by VansonBourne, December 2012 (will be launched prior to Mobile World Congress) , shows that nearly half of the consumers would be willing to pay for a temporary bandwidth boost or data consumption upgrade. Thus the potential is there and can be monetized by leveraging advanced and predictive analysis and automated decisions and actions to make and save money. In other words; by leveraging contextual intelligence at every touch point.

At Mobile World Congress we will discuss the topic in more details with concrete showcases. The business use case list is long, but we have chosen the ones, which on one hand can demonstrates quick business results and on the other, can help CPSs integrated their organizational teams.

• Analytically-enriched order orchestration
• Analytics-driven, predictive policy control
• Contextual Mobile Data Campaigning
• Using a Federated Model to “Make Inventory Work”
• Customer value driven network prioritization

On Tuesday, 26^th we will have a special guest, Fredrik Jungermann, the founder of tefficient, who will discuss on:

“Pinpoint the right customers – or dilute margin”

Fredrik shares his analysis of advanced LTE markets – including the US – with focus on the impact LTE has on the profitability of leading service providers. Is there an monetization upside using analytics?

To book your seat send the meeting request with a specific reference to: “Right customers for LTE”.  See you there!

‘More Policy is needed!’

As continuation to my colleague Simo’s blog on “Now I Understand What You Mean with Contextual Intelligence in Policy Control and Charging” , I would like to share some congress highlights on the major discussion points and development trends in the market.

Maintaining the current network investment pace is becoming impossible, and therefore CSPs are actively seeking ways to capitalize on data services and co-operate with OTT players to diverge the data revenue growth curve and offload mobile data onto their own or partner’s WiFi networks. It’s obvious that video drives broadband traffic. Therefore CSPs absolutely need to understand customers’ usage patterns, how they behave in the network and what their value for the CSP, to implement efficient segmentation tools that allow prioritising the customers who need more bandwidth.

There was also a lively discussion about the tactics of creating and offering data services, touching on topics like rapid and easy service creation, data and bandwidth bundles, add-on data packages, personalisation and quality of experience. These elements are at the center of the CSP’s radar screen, contributing heavily to revenue generation and monetisation. The life time span of data packages will diminish significantly, as customers expect a broad, personalised and frequently updated service portfolio to be available. In order to fulfill this requirement, analytics capabilities have found their way into the heart of the policy control and charging offering palette, providing customer insights, predictive capabilities, churn management tools and automated marketing campaigns executed contextually at the right time to the right customers.

The ubiquitously available policy control capabilities and tools were widely recognised as the mainstream future trend, going beyond the pure network-centric approach to devices, cloud, M2M, service delivery and OTT. In short, Policy is needed everywhere in the ecosystem. The implementation is very much business-objective and use case driven, dictated by the business and service requirements and the CSP’s existing network architecture. Depending on the CSP’s set-up, the implementation scope can be fulfilled based on policy control, charging, customer management and analytics functions. Policy control is needed to protect and serve your interests.

Join Comptel at the Global Broadband Traffic Management Congress!

From 6-8 November, the Comptel team will be participating in Informa’s flagship Global Broadband Traffic Management Congress (BBTM) at the Royal Garden Hotel in London. While communications service providers (CSPs) have seen success with the rapid uptick in data usage, they are simultaneously seeking ways to better manage and monetise these services. BBTM offers the opportunity to explore the latest developments for changing the path of diverging revenue and traffic growth curves, and learn more about the policy control and charging tools available to help deliver mobile data, optimise quality of service and the customer experience, and boost CSPs’ bottom lines.

Comptel not only will be on hand at booth #14 to discuss the latest data pricing models, congestion management, Big Data and analytics, real-time charging and service personalisation and more, but also will present alongside the more than 100 speakers (including 50+ from CSPs) during the Congress. On Tuesday, 6 November, at 16:25 (Track B), Simo Isomäki, head of global business support, will elaborate on the crucial role of predictive analytics and contextual intelligence in relation to policy control and charging, and how CSPs can gain actionable insight from customer behavioural patterns to personalise and monetise broadband services. Simo will also take part in a Track A panel session on the obstacles for two-sided business models that same day at 12:30.

BBTM is a tremendous forum for networking with others across the mobile broadband ecosystem. We would be delighted to meet you at our booth or have you attend one of Comptel’s presentations. Enjoy the event, and please contact [email protected] should you like to arrange a more thorough discussion about Comptel’s comprehensive portfolio of Customer Engagement solutions and how we apply our CIQ4T approach to policy control and charging.

Reflections on LTE Advanced – Part Two

In my last post, I touched on what LTE-A is and the benefits we can expect from it, including much more bandwidth. However, there is some room for improvement with this technology.

The Price Issue

First and foremost, there are cost issues related to the massive performance increase. For instance, if you have a mobile broadband bundle with a capacity of 2 GB, this could quickly be consumed in roughly 15-20 seconds. If you’re a heavy user today and spend about 30 GB a month, at maximum capacity, it would not last long in LTE-A. Depending on how the service is put to market, consumers could end up paying a fortune for its speed—hindering adoption and prolonging the transition to LTE-A.

So why will it be so pricey? There are a few fundamental reasons. First, the cell in LTE-A is smaller but much faster than those found in previous generations. So this means that we will have more cells (think of these as the roadside ‘towers’), but they will most likely be built into streetlight poles and other facilities in addition to physical towers. Here’s where the price comes into play—each cell has a cost. In addition, each of those cells needs to be connected to the core network somehow (typically microwave radio or optic cable), and with more cells comes more cables and more complex networks.

Also, each cell needs to transport more data as bandwidth grows. Thus, the infrastructure to support such bandwidth requires major investments by communications service providers (CSPs), including in new technologies like small cell devices for more specific locations. We can also expect more fibre rollouts, which will need to be connected to all kinds of routers, switches and repeaters in the telecom network. These will all need to be planned, installed and operated. While we assume that efficiency increases in hardware over time (smaller space and faster speed) and power consumption decreases, all this infrastructure will have a major impact when it comes to cost. In addition to the purchase and operations, the cost of labour for actually digging up the ground, laying the cables and filling the ground can really add up.

What about Vendors?

This means a lot of various things for software vendors like Comptel and others in the OSS/BSS and Service Provider IT (SPIT) field? We believe the infrastructure rollout will need to be as automated as possible to drive the need for an excellent fulfillment process, logical network connections and efficient resource management. This will, in turn, reduce wasted time and money. The increase in bandwidth will likely drive more customer offerings and drive the need for service orchestration and catalog-driven order management. The complexity of the service must be conveyed in a way that makes sense for customer segments using the network capacity, and various service bundles should be prepared and proposed.

One may, however, discover that there are so many different ways to bundle these services that they completely avoid it and allow customers to self-personalise their subscriptions in advance or just in time. CSPs will naturally want to charge and control this usage and the bandwidth that customers are getting, such as services without quota restrictions like music streaming with a fixed monthly fee. Perhaps they can consider time-, location- or service-specific profiles of policies that enable customers to enjoy the vast capacity at full speed.

With this in mind, we already enjoy a degree of granularity like watching a TV series at full capacity, while others view it at a lesser quality, all enabled by policy control and online charging systems. We’re also starting to see CSPs analysing and adapting their customer engagement through intelligent interactions like free services and campaign offers, better matching service profile configurations and other things that better suite personal preferences of usage. All of these services need to be activated, changed and deactivated in real time with a provisioning and activation engine that can scale to the vast speed and low latency.

Likewise, the usage data will be so diverse and vast in its volume that a next-generation mediation system with massive scalability is needed to enable managing the online feeds of data and transactions securely and to adapt the data from various sources and formats with all of the potential various destinations (and their formats). This layer we saw formed in the CDR/file world will also be very necessary in the new online/diameter world.

In summary, behind the acronym LTE-A, there is a promise of vast bandwidth, which no matter how you look at it, will surely benefit us, especially as many other innovations can then be applied to it. There are some hurdles to overcome, but just as many opportunities presented with the technology.

If you’re interested in talking about LTE-A a bit more, please leave a comment or come to our booth at the upcoming Management World 2012, taking place in Dublin in May, to chat with me about it.

Around the World

Microsperience…
First Touch, Last Touch, Every Touch
Analyst Teresa Cottam explains why every interaction that takes place between a communications service provider (CSP) and a customer is important. The CSP often perceives the first touch, or first customer engagement to be a sales transaction where it signs up a customer to receive a service. However, customers believe that their relationship with a CSP doesn’t just begin with a simple sale—it takes a longer period of time to cultivate.

Teresa uses a personal experience with an old broadband operator to explain how CSPs should build better relationships with customers. After mishandling her service transfer process, the operator made her wait 30 minutes on the phone, and a support assistant accused her of signing up for the wrong package and dismissed her concerns.

Teresa says this example emphasises issues that currently exist in the market, and proves that CSPs need the ability to analyse data in real time to get a better understanding of and retain their customers. CSPs need to focus on not just the first touch but any and every touch in order to build loyalty. She also notes that in today’s competitive market, even forgetting that ex-customers could be future customers is a missed revenue opportunity and could hinder CSPs’ success.

telecomasia.net…
APAC Telcos Concentrate on Quality
Joseph Waring gives an overview of a recent Telecom Asia-Ovum survey of telecom executives in 19 countries across Asia Pacific. The results revealed quality of service (QoS) to be the key distinguishing feature for operators in the region.

Interestingly, the survey also found that fewer respondents (38% compared to 54% two years ago) viewed unlimited data rates as the most effective way to charge for mobile broadband services. But Ovum analysts believe that the percentage of people who agree with this method is still too high, and urges operators to steer away from flat rates, which can over-burden networks and negatively impact QoS.

Additionally, survey respondents indicated that they believe video will be the key driver of continued mobile broadband traffic growth in Asia Pacific. Like Comptel, Ovum believes that operators must look to balancing the management of resources like bandwidth, while controlling customers’ data services, in order to maximise the customer experience and monetise their offerings.

CommsMEA…
Right Path for Roaming?
Industry experts wonder if recent Gulf Cooperation Council (GCC) regulations could potentially cause more harm than good. These called for telecom operators to slash mobile phone roaming charges to consumers by at least 50 percent beginning 1 February in a bid to bring costs in line with those in Europe. Roaming revenues account for a significant proportion of overall profits for many CSPs, and a sudden forced reduction in tariffs may, unfortunately, lead to price increases, less investment in other areas and other unintended consequences.

But, there is evidence that Gulf operators are already moving in the right direction towards decreasing roaming tariffs without the regulations. Peter Lyons, director of spectrum policy, Africa & Middle East for the GSM Association (GSMA), says that operators responding to the competition are driving roaming costs down and that they are making an effort to increase the transparency of roaming rates. On the other hand, some point out that regulation is needed to protect against distortions in the market that can be created by dominant players. What do you think is the right path for the Gulf in terms of roaming?

Around the World

Telecoms.com…
India Unveils Draft Telecom Policy
This past Monday, India unveiled a draft of new policy meant to “facilitate consolidation in the converged telecom service sector, while ensuring sufficient competition.” A major change will be the removal of roaming fees within the country. Policy makers are hoping this move will encourage customers to make more calls outside their home territory.

Amid corruption over the allocation of the telecom spectrum, this new policy also focuses on transparency by issuing telecom licenses and spectrum bandwidth separately rather than bundling them. Do you think this proposed plan will ultimately benefit CSPs and subscribers, and revitalize India’s telecom industry?

Telecomasia.net…
Time to Rethink Data Roaming
Informa Telecoms & Media’s Paul Lambert asserts that the European Commission (EC) regulation for the data roaming market is out of step with the way smartphones interact with the network and how smartphone data is used while roaming.

Paul believes EC regulations should guide operators to charge for usage rather than the number of kilobytes a device consumes. Many smartphones consume data by constantly interacting with the network to update data applications, even when they are not being accessed by users. Thus, data is unwittingly consumed much faster.

Do you agree that it’s time to rethink data roaming?

Bloomberg Businessweek…
FCC to Revamp Phone Subsidy to Spur Expanded Internet Access
FCC chairman Julius Genachowski recently revealed plans to overhaul the U.S. phone subsidy program, the Universal Service Fund, by extending broadband Internet connections in rural areas. The plan will bring wireline and wireless high-speed Internet connections to 18 million homes that don’t have access, increasing the number of people who use high-speed Internet from 65 to 90 percent.

The FCC also plans to revamp fees paid to rural carriers for connecting calls, which chairman Genachowski says could result in significant consumer benefits. We’re looking forward to hearing more details when the final version of the plan is unveiled on October 27^th for the FCC vote.

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?

Around the World

Gulf News…
Mobile Broadband on Growth Track

A recent Informa Telecoms & Media report indicates that mobile broadband growth in the Middle East and Africa will outpace that of fixed broadband. In fact, mobile broadband subscriptions are set to multiply more than 16 times to 430.7 million by the end of 2015, up from 25.39 million in 2010.

These numbers are a bit deceiving though, as the high incidence of multiple SIM use means that the number of unique users is markedly lower than the number of unique subscriptions. As the article points out, this will continue to be the case in the coming years because users want to take advantage of promotions and on-net tariffs, and due to the varied quality of service and extent of network coverage offered by different operators.

Mobile broadband growth is also causing claims that bandwidth hogs will make it difficult for operators to profitably run their networks, and leaving consumers wondering about how much bandwidth they are actually using. Like we’ve previously discussed, policy control can give communications service providers (CSPs) the levers they need to control service/resource supply, encourage customer demand with a more intelligent approach to bandwidth management, and see revenue growth.

The Wall Street Journal…
EU Roaming Data Caps Could Help Mobile Industry

This article discusses the European Commission’s plan to regulate the mobile roaming market, lower the data and voice charges incurred when traveling abroad and ultimately reduce bill shock. Currently, Europeans are paying an average of €2.2/MB. The proposed plan will dramatically reduce that number to 90¢/MB starting July 1, 2012 and falling even lower to 50¢/MB by July 1, 2015. As Neelie Kroes, vice president of the European Commission, stated:

“Competition is still very weak. Customers still get a raw deal when they cross borders. Operators still enjoy outrageous margins, particularly on data downloads.

Within a single market, there is simply no justification for huge mark-ups, just because you’ve crossed an invisible internal border that is supposed to have disappeared. And just because customers have little or no choice in the matter.”

Although this strategy would seemingly have a negative impact on CSPs’ revenues, these cuts may actually work in operators’ favour since high prices may be preventing people from using their phones while abroad. What do you think the new regulations will mean for the industry’s future?

Telecom Asia…
Innovation Requires Collaboration

Ovum’s Innovation Radar series highlights telco innovation in the second half of 2010. After tracking 300 new service launches across the fixed and mobile market segments, the analyst firm found a major trend—telcos are now innovating more collaboratively. They are carving a niche for themselves with adaptable structures that can support innovation rather than seeking to simply create the next best application. The telcos that did this, while leveraging their networks, brands, customer relationships, partnerships, etc., made significant strides at the end of last year. Analyst Emeka Obiodu also noted that, “the pre-eminence of the adaptable structure is going to become more pronounced as telcos move towards the future of SMART (operators that provide services, management, applications, relationships and technology) and LEAN (low-cost enablers of agnostic networks) players.”