Perspectives 2013.1

7/27/2019 Perspectives 2013.1

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TM Forum Yearbook, 2013/14

Publications Managing Editor:Annie Turneraturner@tm orum.orgEditor:Claire Manuelcmanuel@tm orum.orgCreative Director:David Andrewsdandrews@tm orum.orgBusiness Development Director, Research & Publications:Mark Bradburymbradbury@tm orum.orgSenior Publisher:Katy Gambinokgambino@tm orum.orgProduction Assistant:Aideen Greenleeagreenlee@tm orum.orgHead o Marketing:Lacey Caldwell Senkolsenko@tm orum.orgReport Design:The Page Design Consultancy LtdVice President, Events, Publications and Content:Rebecca Hendersonrhenderson@tm orum.orgAdvisors:Keith Willetts, Chairman and CEO, TM ForumMartin Creaner, President, TM ForumNik Willetts, Chie Strategy O cer, TM ForumPublished by:TM Forum, 240 Headquarters Plaza, East Tower,10th Floor, Morristown, NJ 07960-6628, USAwww.tm orum.orgPhone: +1 973-944-5100Fax: +1 973-944-5110Printed by:Stephens and Georgewww.stephensandgeorge.co.uk

2013. The entire contents o this publication are protected by copyright. Allrights reserved. No part o this publication may be reproduced, stored in a retrievalsystem, or transmitted in any orm or by any means: electronic, mechanical,photocopying, recording or otherwise, without the prior permission o the publisher,TeleManagement Forum. TM Forum would like to thank the sponsors andadvertisers who have enabled the publication o this ully independently researchedyearbook. The views and opinions expressed by individual authors and contributorsin this publication are provided in the writers personal capacities and are their soleresponsibility. Their publication does not imply that they represent the views oropinions o TeleManagement Forum and must neither be regarded as constitutingadvice on any matter whatsoever, nor be interpreted as such. The reproduction oadvertisements and sponsored eatures in this publication does not in any way implyendorsement by TeleManagement Forum o products or services re erred to therein.

[ trans orm ] [ digital ] [ business ]

Contributors

George Malim is a reelance technology journalist. He has covered thecommunications market since 1999 and contributes to Global Telecoms Business, VanillaPlus and Wireless magazines.

Dr. Phil Marshall is the Chie Research O cer o Tolaga, where heleads its so tware development and research. Be ore ounding Tolaga,he was an executive at Yankee Group or nine years. Marshall has20 years experience in the communications industry.

Tim McElligott has been a technology writer since 1999 ocusingon communications industry operations. As Editor-in-Chie o Billing & OSS World (B/OSS) rom 2008-2012 he drove and produced thepublications editorial and con erence content. Prior to that he wasSenior Editor at award-winning Telephony magazine and Editor oTelephony s rural independent supplement. McElligotts writing careeris supported by his background in various technical positions withTier 1 wireline and wireless operators.

Rod Newing has contributed regularly to the Financial Times or 17years on technology, communications, business and health. He alsocontributes to supplements in The Times, Daily Telegraph, WashingtonPost and a range o pro essional and trade magazines.

Vaughan OGrady is a reelance writer and editor specializingin communications and the oil and gas industry, as well asgeneral business and technology themes speci c to A rica andthe Middle East. He is a ormer Editor o GSM World Focus andCommunications A rica.

Dr. Lorien Pratt is Co ounder o Quantellia, a global consulting andsolutions company or decision engineering. A communicationsindustry veteran, Pratt is best known to the TM Forum as a ormerDirector o OSS and in rastructure at Stratecast.

Jody Ranck has over 25 years o experience in global health andtechnology. He is the author o Connected Health: How Mobiles,Cloud, and Big Data will Reinvent Healthcare and is an advisor to start-ups, PwC, and Open mHealth. He also writes about health technology

or GigaOm.

Robert J. (Rob) Rich is Managing Director o TM Forums InsightsResearch. He has more than 20 years experience in market researchand consulting, including 11 years as Executive VP at Yankee Group.

Be ore that he spent 17 years in the computing and networkingindustry.

John Williamson is Communications Editor o Janes IHS Jane's C4ISR & Mission Systems , and is Co-Editor o the Mobiledotcomms electronic magazine. He is a regular contributor to the Inkslinger.newswebsite. Previously he worked or Telephony, Telecommunications andMicrowave Journal . Monica Zlotogorski is Vice-Chair o TM Forums Latin AmericanAdvisory Board. She edits the Forums Inside Latin America newsletterand writes or the Inside Leadership newsletter. She has over 16 yearsinternational business experience and speaks ve languages. She is VPo Research at Telesperience.


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9 Using your digital initiative to thrive Keith Willetts, Chairman and CEO, TM ForumThe next phase o evolution o the digital world needsconsiderable thought and action be ore we to get tothe stage where enterprises can trust emerging digitalservices enough to run their businesses on them.

12 Keeping up with change Martin Creaner, President, TM Forum

When an industry nds itsel on shi ting sands,business as usual isnt a viable strategy. From eHealthto smart grid, ePayments and wider machine-to-machine(M2M) services, the addressable market is growingexponentially and so are the potential number ocompetencies that the success ul service provider needsto thrive.

14 Balancing standards, innovation and insight is thekey to success

Phil Jordan, Group CIO, Tele nicaWe need to create and operate in a much more openenvironment to oster innovation. Naturally, to sustainour businesses into the uture, we ace a number ooperational and other challenges. I we negotiate themwell, there is a wealth o new opportunities or ourindustry in the digital world.

16 Monetizing big data in the communications industryScott Stainken, General Manager,IBM Global Telecommunications IndustryBig Data, in all its dimensions, is making new knowledgeavailable and new processes, too, are emerging to takeadvantage o what it has to o er.

18 Game-changing technologies unlock potential growth incommunicationsMontgomery 'Monte' Hong, Managing Director Global Communications Industry and Asia Paci cCommunications Industry Lead, AccentureOperators will need to grasp and act on some key,game-changing technology trends that will a ect thecommunications industry over the next three to our years.

22 Global perspectives: Changing the way we do businessBy Monica ZlotogorskiThe cyclical pattern o business models is coming to anend and being replaced by new ways o doing things thata ect all industries and all companies.

27 Managed services rise in the era o cloudBy Rod NewingThe increasingly digital world means that communicationscompanies will need to change rom developing andproviding a complete solution to being a managed serviceprovider within an agile ecosystem.

32 Managing the product li ecycle is key to the digitaleconomyBy John WilliamsonProduct Li ecycle Management encompasses a diverserange o sectors, rom aerospace and de ense topharmaceuticals and medical devices. We look at why andhow it is being adopted by the communications industry.

35 Wi-Fi hots up competition or customersBy Rod NewingWi-Fi is enabling new business models and ways oroperators to di erentiate themselves, which is alreadyresulting in wireless and wireline converging. However, tomake the experience truly seamless, there is considerablework to be done.

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40 Customer experience: 10 tips to make it betterBy Rob RichIt is still relatively early days or customer experiencemanagement in the communications industry, whichmeans there is everything to play or. Here are 10 stepsthat can make a big di erence to how customers viewtheir service provider right now.

43 Why we need policy everywhere

By John WilliamsonPolicy-based management is expanding its role. We lookat how policy is developing and how service providers areusing it and plan to exploit it in the uture.

47 Securing maximum value rom bringing your own deviceBy George MalimBringing your own device (BYOD) into the workplace hasresulted in ampli ed security risks that are only now beingproperly considered and addressed. The right processesand metrics need to be established to secure BYOD andenable its ull potential to be unleashed.

50 Revenue assurance: Hitting a constantly moving targetBy George MalimJust as the communications industry is evolving toaddress new business models and additional sources orevenue, so too must revenue assurance, as it becomes

undamental to the success o the new digital value chain.

53 Converting eyeballs to oot alls: Helping bricks and mortarcompete in a digital worldBy Dr. Lorien PrattCommunications service providers are o ering businessintelligence gleaned rom analyzing big data as a source o

real-time analytics to support retailers. It also representsan important new revenue opportunity or the serviceproviders.

58 Is outsourcing raud management the way orward?By Annie TurnerFew companies have outsourced raud management. Asthe problems intensi y, should the merits o this approach scale, big data and analytics be taken more seriously?

60 Thrive another day with real-time convergent chargingBy Tim McElligottThinking about real-time convergent charging is the onlyoption right now or service providers who believe thatthe anytime, anywhere mantra is real, necessary andachievable. Using unique research by TM Forum, werecommend the next steps.

64 LTE how big are the risks to service providers businesses?By Phil Marshall Ph.D.The migration rom 2G to 3G to 4G long-term evolutioncreates potential risks to operators' business. What arethe risks and what can we do to mitigate them?

67 M2M: The rise o the machineBy Phil Marshall Ph.D.How and where are machine-to-machine communicationsalready in use and whats next on the agenda? A look athow smart grid is shaping up and what needs to happento make it reality.

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72 eHealth saving lives through partnerships andinnovative ecosystems

By Jody Ranck, DrPHOver the past ew years we have witnessed incrediblegrowth in the use o communications technologiesin health systems worldwide. What is happening andwhat are the implications or the healthcare and thecommunications sectors?

77 Apps but not as you know them. Part 1: HTML5 loomsand promises to open up the mobile application worldBy Rod NewingHTML5 is set to revolutionize the mobile Internet byreplacing native apps, which only run on a speci cdevice, with web-based apps that will run on any. Thiscould and should open up the mobile world and create alevel playing eld.

80 Apps but not as you know them. Part II: Where's the money?Targeting smaller rms with bundled connectivity and appsBy Rod NewingSeeing HTML5 simply as a protocol or browsers is largelymissing the point. As we saw in the rst part o thisarticle, it has the potential to change business models andeven open up new revenue streams.

83 Making social networks work as customer sel -carecentersBy Annie TurnerSocial networks are changing the ace o customer care,in communications and other industries. There is no doubtthat this is popular with customers, but is it viable andsustainable or service providers?

87 Mobile payments: Looking beyond the transactionBy Vaughan OGradyMobile payment sounds like a simple concept, but manycustomers still dont understand whats involved. Withlots o di erent payment o erings fooding the market,consumers are going to become more con used. Will thepublic embrace mobile payments and how can mobileoperators make them pay?

90 Delivering APIs or enterprises is big businessBy Dr. Lorien PrattThere is a big market or enterprise-grade mashups andcommunications service providers are uniquely placed todeliver them, i they ollow emerging best practices andexploit their assets.

93 What is TM Forum Frameworx and how can it help you?TM Forums suite o standards and best practices.

94 Index o advertisers


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WELCOME TO THE LATEST edition o Perspectives , which

I hope you enjoy and ndstimulating.

Having spent my wholecareer in communicationsand computing, I eel trulyprivileged to have beenpart o the birth and earlysteps o the digital world.Theres never been a moreinteresting and exciting timein our industry, but really weare only in the oothills o amarket which will becomeubiquitous and underpinalmost every aspect o ourlives, our business, education,entertainment, wellbeing andsecurity. Everything that canbe digital, will be!

I recently took some timeout rom my day job to takea long, hard look at how thedigital world is evolving andwhat companies need to doto thrive and capitalize onthe enormous opportunitiesit o ers. I summed upthose thoughts in mybook Unzipping the Digital World 1 and through manyconversations with peoplearound the world, continue to

re ne those perspectives.One o the key themes

in the book is that playerswho want to thrive need tocare ully pick their spots inthe digital ecosystem basedon where there is the best tbetween market needs andtheir ability to succeed.

Another theme rom thebook was to move quickly anddevelop clear leadership. Its

air to say that such adviceseems to be being heeded:Were seeing some positivemoves by di erent companies not all will succeed, but atleast they have thrown theirhats in the ring.

The next phaseSince writing the book, oneissue that has become clearerto me is that the next phaseo evolution o the digitalworld is going to demanda lot o thinking and actionto get to the stage whereenterprises can really trustemerging digital services tothe point that they can runtheir businesses on them.

I Web 1.0 was aboutgetting access to in ormation

and services like email,and web 2.0 was about

the growth o applications,content and other excitingconsumer services, thenWeb 3.0 is where businessesreally embrace digital servicesinstead o running most otheir own internal IT andapplications (this theme isexamined in the article onpage 80). The potential isenormous and with advancesin machine-to-machine (M2M)technologies, are likelyto pervade every type obusiness.

For that to happen, thedigital world has to movea long way beyond theprevalent best e ortsapproach to service qualityand the typically laissez- aireapproach to security. An appthat doesnt work on yoursmartphone, or Facebooklosing your password, may beannoying but not necessarilydisastrous.

For an enterprise with itsbrand and trading at stake, itsa di erent ballgame servicereliability and security 2 arevitally important to companies.

1Unzipping the Digital World , which was published in 2012, gives an eye-opening view into how to thrive and survive in the rapidly evolving digitaleconomy. It is available to purchase on Amazon: www.amazon.com/dp/B0082PLD4W2TM Forum published Securing our connected world in January 2013, which explores the growing importance o securing the cyber supply chain,as well as the critical work o our security management team. It has identi ed the ve areas that most commonly su er breaches, drawing on bestpractice and research rom around the world to provide pragmatic, economic (in every sense) guidance on how best to protect them. It is available

ree to all employees o our member companies who register on our website and or non-members to buy rom www.tm orum.org/SOCW2013

uSing your digitalinitiative to thrive

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They simply wont trust theirbusiness, reputation andbrand to luck. In some caseslike eHealth (see page 72),peoples lives might dependon it. So enterprises will wanttough and binding servicelevel guarantees and thoseproviders who cant deliver tothem simply wont sell.

Enterprise-class services

demand an order omagnitude leap in the wayservices are designedand most importantly theprocesses and systems thatunderpin them operationally.This cant be bolted on there isnt some magic boxthat can be wheeled in thatsuddenly delivers high levelso service reliability andavailability, a great customerexperience and high levels osecurity and integrity.

Learning rom each otherThe communications industryhas come in or a lot ocriticism in recent years orbuilding over-engineered andexpensive technologies thatdeliver very high reliability.Many people have arguedthat web-based servicesneed to be launched veryquickly with minimal supportsystems to slow themdown and wondered whythe communications worldcouldn't be more like them. Inreality, there is validity in bothapproaches.

The communicationsworld has to be much morefexible and agile i it wants tocompete. On the other hand, ienterprise digital services are

to meet enterprises needs,everything in the digital valuechain has to be industrialstrength to meet rigorousservice level agreements rommajor customers.

This includes underpinningcommunications, computingand storage, throughapplications and in ormation,to the various enabling

services like authentication,charging, customerrelationship management andso on.

Even 99 percent reliabilitymeans over three and a haldays o downtime a yearand i that applies to eacho the component servicesin the chain at this level,overall availability will betotally unacceptable. Rather,each one probably needsto have ve or maybe six9s reliability to achieve theoverall availability needed.

There is much that di erentcommunities within the digitalworld can learn rom eachother. Its good to see thatthe diversity and range ocompanies who are memberso the Forum is increasing tohelp share that experience.

Yet there are somemajor issues in deliveringenterprise-class, digitalservices that no onehas really aced be ore.Communications companieshave been able to controltheir service quality andsecurity by owning andoperating the whole enchilada

rom the underpinning

in rastructure through toapplications like messaging.

A common languageThe digital world is muchmore ragmented anecosystem o di erentplayers each delivering theirelement o the service witha di erent access network,core network, computing,storage and many applicationsproviders. And whereservices comprise a numbero aggregated applicationservices, the challenges geteven harder.

I the only person gettingthe end-to-end picture othe overall service quality isthe user, trouble is boundto ollow. Its not just theend-users company thatwill want a tough servicelevel agreement: eachcollaborating partner in thevalue chain will need tohave stringent agreementsbetween them too.

They will need a commonview o what to measure,how to escalate and resolvea problem, how to exposeauthentication and securityin ormation to each other,how to apportion and sharerevenue and so on. Even

at the most basic level,essential ingredients are acommon lexicon o what youcall things, which businessprocesses are running acrossthe entire service chain andcommon ways o de ningimportant in ormation.

Im very pleased to seethat the Forum has engagedstrongly in raising these

issues and, more importantly,is doing something aboutthem. The recent launch othe Digital Services Initiative(www.tm orum.org/digital ),the Simple ManagementInter ace to expose importantoperational data betweenservices (see page 92), therapidly expanding work onbig data analytics (see page26), security 2, customerexperience management(see page 40), B2B tradinginter aces (see page 92) andM2M (see page 67) are allhighly positive contributionsto helping move the industry

orward and removing theroadblocks to us all thriving inthe digital world.

My thanks to each o youor your continued support

o the Forum: Its yourorganization and without yourinvolvement it can do nothing.Together we can change theworld.

Keith WillettsChairman and CEOTM Forum

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FOR AS LONG AS I CANremember, the communications

industry has been goingthrough change.

In act, change is prettymuch the only constantelement that we can point toover the past decade. It usedto be the change associatedwith the xed-mobileconvergence or IT-telecomconvergence. Then it wasthe change associated withthe new breed o multimediaservices and the emergenceo the smartphone and tablet.

The emergence o over-the-top services heralded anotherera o change, with servicessuch as Skype and WhatsApp

orcing undamental changesto the business models oevery operator.

Add to this the emergenceo two-sided business modelsand a whirlwind o regulatorychanges, its not hard to seewhy change has become theonly certainty in the industry.

But its not enough tosimply spot the changes.

I o ten use Charles Handysamous analogy o the

Boiling Frog. Some rogshave a atal faw. They aregood at detecting changesin temperature, but arepoor at assessing overalltemperature. So i you pop

a rog in a pot o water andslowly turn the heat up, the

rog will boil to death withoutrealizing its in trouble, until itstoo late.

Certainly, it detects eachsmall change in temperature,but doesnt take such anincremental alteration incircumstances as li e-threatening. Despite all oursophistication, any industryincluding communications,can su er the same atal faw.

No one in communicationsis ignorant o the changesthat beset us. Too o tenthe reaction is to note thatchange and then carry on withbusiness as usual cuttingcosts to maintain marginsand repackaging products toextend their li e.

When an industry ndsitsel on shi ting sands,business as usual isnt aviable strategy. We areall aware o the rapidlyemerging, open digitalservices economy.

We are moving way beyondvoice, data, music, gamesand movies into a worldwhere everything that can bedigital will be. From eHealthto smartgrid, ePaymentsand wider machine-to-machine (M2M) services,the addressable market is

growing exponentially andso are the potential number

o competencies that thesuccess ul service providerneeds to thrive.

Many aspects o howthe communications andassociated sectors areshi ting are covered in thispublication, our yearbook,Perspectives . To whet yourappetite or the coming read,Id like to suggest a ew areasthat every service providershould seriously address overthe coming year.

Develop a big data analyticsstrategy: For decades thecommunications industryhas treated handling data asa chore. The attitude wasthat the only valuable use odata about customers was tobill them accurately. All thatother data about customersand their behaviors was adistraction.

Now big data (see page53) is perhaps the hottesttopic in the our industry (andmany others) and we havewoken up to the act that our

uture success could wellrest on how e ective weare at extracting the wealtho in ormation buried in thatdata. From revenue (see page50) and raud management

KeePing uPWith change

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(see page 58), to managingcustomer experience (seepage 40) to new servicedevelopment (see page 80),e ective data analytics sitsat the heart o a success ulstrategy.

Success wont come romsimply reading publications,attending con erences andsetting up task orces. Every

operator needs to understandour key things about their

data:

n What data do they have andwhat does it tell them aboutthe customer?

n What urther data can theyreasonably collect and whatis its value to the operatorand to other players in theecosystem?

n What can the operator dowith it rom a regulatorypoint o view and rom theexpectations o privacy thatits customers have?

n What is the monetizationstrategy or this data?

Executing a company-wide, holistic strategy basedon the answers to these

our questions is essentialor every operator over the

coming year.

Revisit your approachto managing customerexperience: As we move

urther and urther intothe open digital economy,managing customerexperience has to becompletely reimagined.Not only are customerexpectations changing ever

more rapidly, they are nowcontrasting how they aretreated by their serviceprovider with their treatmentby entirely di erent industrieso ering new digital services.

Customers pre erred wayso sharing and receivingin ormation, and interactingwith their service providerare also changing rapidly as

is their way o complainingabout poor service.

Any service provider thatdoes not have a wide-rangingsocial media strategy (seepage 83) integrated with theircustomer experience programis seriously out o date.

Whats more, the customerexperience strategy has to

t with and complementthe big data strategy. Thisis because much o thein ormation needed to delightcustomers must be capturedand made widely accessibleto the people developingthe products and services,and dealing directly with thecustomer.

Critically analyze yoursecurity preparedness: Thecommunications industry isdelivering a wider and widerrange o digital servicesacross increasingly complex,multi-party value chains.

Every service provider hasto critically analyze both theirown security preparedness,and the security preparednesso the end-to-end deliverymechanism.

What new vulnerabilitieswill emerge as new servicesare created, and how can they

adopt a concurrent securedesign methodology in theirnew service developmentprocess (see page 64)?

Stringently assess howe ectively you orm andmaintain business-to-business(B2B) partnerships:The structure o the industryis inexorably evolving rom

being a business-to-consumer(B2C) industry, to being a B2Band B2C industry.

B2B implies a need topartner extensively, andservice providers have littleexperience o e ectivepartnering, and even less obeing the junior partner in anygiven relationship.

Service providers need toconsciously work on theirpartnering skills, and begin todecide what sorts o businessmodels they can operatecom ortably and competentlyin the open digital economy.

So a ew key pointers oryou to be aware o as youbrowse the insight ul andthought ul articles in thisedition o Perspectives .

I hope you nd it engagingand in ormative and that ithelps you to chart your waythrough these increasinglycon using waters.

Martin CreanerPresidentTM Forum

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THE COMMUNICATIONSindustry is in the enviableposition o having hugedemand or its core product,and or data servicesespecially, all over the globe.

Its true that we aceincreasing competition,

ragmentation and disruptionin our value chain, but wealso have the customerrelationships, technologyassets, partnerships andexperience to succeed.

Naturally, to sustainour businesses into the

uture, we ace a numbero operational and otherchallenges. I we negotiatethem well, there is a wealtho new opportunities or ourindustry in the digital world.

One o the biggestoperational challenges isthat our customers serviceexpectations are constantlyrising. We invest heavily andalways strive hard to deliverwhat our customer wantand expect. Even so, as theecosystem o applications andservices becomes bigger andmore ragmented, it is di cultto provide a consistent, highlevel o service. For those ous who work in technology incommunications, in particular,

the onus is always to do morewith less.

Simpli cation andtrans ormation are keyIt is not so much that weshould put ourselves underpressure to spend less onIT, but rather to optimize ourrunning costs and invest in thegrowth and trans ormation oour industry.

We need to dedicate ewero our resources to ourtraditional and core productsas their pro tability erodesand be ready to compete hardagainst an unprecedentednumber o new competitorsand disruptive elements.They ace none o thein rastructure, cost andregulatory pressure we do.

Radical simpli cation andtrans ormation are the keyto success in optimizingour core business. Thisvital trans ormation has tostreamline our product o erand service experience and,particularly in IT, implementstandards to improveconsistency and ease ointegration, and optimizeoperations.

We are in an era o greatchange in our industry that

will end with the wide scalecommoditization o theoriginal telco business model.

The need to modernize thecore business and innovatein new areas has alwaysbeen the case in any industry,but in this instance, thecharacteristics o the old andnew worlds are very di erent.This has serious implications

or the technical skills weneed to navigate this strangeland.

The history o our industrytells us that innovationcame rom within our ownorganizations, and networkand IT equipment providers.We lived in a world wecontrolled, where everythingwas integrated vertically butnow the world is much moreopen and innovation comes

rom anywhere and anyone not necessarily where wewere used to looking!

We need to create andoperate in a much moreopen environment to osterinnovation.

We then must ensurewe are ready to enable andencourage developers, start-ups, existing customers andother businesses to utilize ourcapabilities to innovate. Only

balancing StandardS,innovation and inSightiS the Key to SucceSS

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then will we in the industrytake the lead role as the

astest and easiest aggregatoro digital services.

The rules are changingEven in the approach totaking new innovation tomarket, the rules o the gameare changing. In those dayso controlled innovation andtechnology, we had antasticmarket power. We thoughtabout how we could makemoney at a di erent pointthan now; wed industrialize aproduct be ore monetizing it.

Now we have to thinkabout it the other way round,and work on the basis that iits not going to appeal to ourcustomers, we need to moveonto the next thing, ast,rather than risk spending a

ortune trying integrate it withour complex legacy systems.As the saying goes, i youregoing to ail, ail ast, ailcheaply, learn and move on.

As you can see, competingin the digital world is notsimply about technology but

a shi t o mindset, cultureand skill a rede nition oour business and businessmodel. Our approach to thischallenge was to set upTele nica Digital to changethe rules or Tele nica andlead the charge to osterand encourage all sources oinnovation, including start-upsand emerging technology.

We are more active thanever in orming partnershipsand alliances to enhance ourassets in the digital worldand o course we use ourown considerable capabilitiesto bring new and innovativeproducts to market.

As we transition more andmore into the digital worldthe highest value role o atelco and the IT inside it is to

ocus on the integration andaggregation o services orcustomers and we have alot to o er.

This is because whenconsumers and businesses oall sizes consider the thingsthat really matter to them,they will look to partners

and brands they can trust tosecure their data, providereliable access to it, andrespect and protect theirprivacy.

I you download a 69p app,it doesnt matter how wellit works, you buy a di erentone next week. However,I dont think that will begood enough and robustenough or many aspects opeoples lives their health,their nancial security andtheir childrens education, orindeed to run a business.

In both cases, personal andpro essional, reliability andtrust in the application, serviceand underpinning technologyare undamental requirements and the needs o bothindividuals and businesses areconverging in many ways.

This is where I believe ourindustry has a big role to playand value to add. We arecompanies with a heritageo managing data, deliveringservices, sa eguardingprivacy, securing in ormationand providing connectivity

that underpins the daily li e omillions. Are we not per ectlyplaced to help individuals andtheir employers to get themaximum bene t as theyand their businesses becomemore and more digital?

O course everything isbecoming more digital at atremendous speed. There aremany types o convergenceevident as businesses see thesame opportunity and valuechain, and start to orientatetheir strategy to capturingdata and creating insightabout customers.

Digitalization is a race toreal, intimate and practicalinsight or all businesseslooking to nd new growth inthe digital economy. Insightcomes rom data, data romgreat IT systems and greatIT systems are emerging inthe new digital telco, basedon balancing standards,innovation and insight.

Phil JordanGroup CIOTele nica



IN THE HISTORY OF

business, data has neverbeen more important than it istoday. Knowledge has alwaysbeen key, but we've neverbe ore been able to access,manage and act on so muchreal-time in ormation.

The systems we aredeveloping and deploying allover the world are helpingenterprises understandand use all this big data tomake really smart decisions.It is becoming clear thatbusinesses able to trans ormthemselves can takeadvantage o these new bigdata and analytics capabilitiesand gain a tremendouscompetitive advantage.

This isnt news, but in allo its dimensions volume,velocity and variety big datais making new knowledgeavailable and new processesare emerging to takeadvantage o what it o ers.

At the same time, newquestions and challengesare emerging. What arethe security threats andimplications o having somuch data available? Whatabout data protection andprivacy how do we protectthe data rom misuse? Howdo we assure customers

ownership o their own data,

especially as laws, customsand expectations in di erentparts o the world are not thesame?

As investment grows,so too do the expectationso returns on it. Yet theroad is littered with thescarred remains o scienceprojects, or attempts to dothings with data that wereintuitively interesting, andeven intellectually compelling,but too remote rombusiness objectives to beoperationalized.

Big datas uses need topropel the business orward,make it run better and enablegood decisions.

Monetizing data has grownrom this desire to see a

return on investment. It isntjust about selling data aspart o a revenue-generatingtransaction, o ten throughthird parties. Its primarilyabout internal monetization,connecting data-orientedprocesses to improvementsin the business.

The concept o external data monetization has gainedcurrency in recent years.Communications carriershave been looking at theirnetworks, and customers,

and considering what broad,

signi cant contextual insightscan be derived. The relevanceo the data to other industriesis clearly something thatwe should be able to makemoney rom, and we haveseen businesses begin totake novel and interestingapproaches to the problem.

Take vertical marketopportunities. This area

ocuses on makingin ormation in the enterpriseavailable to third parties sotheir businesses can executebetter on the digital plat orm.

Opportunities could includeadvertising, but its alsoabout machine-to-machine(M2M) communications,smarter cities, and a smarterplanet. Combining dataabout location, with usage,purchase patterns andpre erences can provide a richpicture o consumer behaviorso third parties can delivermore relevant, personalizedservices.

For instance, Istanbul nowplans its tra c in rastructurebetter because it has accessto location-based analytics.M2M businesses collaboratewith communications serviceproviders not just becausethey have the in rastructure

Monetizing big datain the coMMunicationSinduStry

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to provide connectivity, but

because the carrier canalso o er data and insightsabout network per ormanceand behavior to helpM2M companies run theirbusinesses better.

There are also more directopportunities with commerce,and in particular with digitaladvertising. While thecommunications business hasexperimented with mobileadvertising or some time, ithas proved di cult to scale.

Advertising on mobileplat orms particularly withthe rise o the smartphoneand emergence o tabletcomputing is growing, andwill continue to grow, but itis not clear how big a role thenetwork operator will play.

In the broader area o digitaladvertising there is massivegrowth in programmaticbuying, with integrated,seamless, real-time bid- oradvertising that demandshuge quantities o data. It isgrowing to include establishedplat orms like TV and radio,which are themselvesbecoming digital. This is adirect commercial opportunity

or the communicationsindustry, with networkoperators allowing their data

to be used or analytical

modeling o buying and sellingoptions or advertisers andpublishers alike.

There are challenges, ocourse, in applying big data toadvertising and e-commerce,not least in security andprivacy, as mentioned, butalso in terms o permissions,and managing customersopt-in.

Consumers are goingthrough an adjustmentprocess right now; recentwork 1 by Pew Researchsuggested two thirds opeople still eel negativelyabout targeted advertising.This is changing. Enhancedpersonalization o advertisingcombined with the integrationo other media will help thismarket mature, openingup opportunities orcommunications companies.

By connecting dataprocesses directly tosales and marketing,communications serviceproviders can build a deeperreturn on their investmentpro le. They can justi yincremental investmentin the domain once theycan demonstrate internalmonetization.

As it matures, that same

in rastructure can help

build the digital economy,supporting the creation oexternal new businessesand improving the deliveryo digital services, ortheir customers and theircustomers customers. Thereis deep, genuine, persistentvalue in that, and thecommunications industry canmonetize that value despitethe ongoing commoditizationo its core services.

Alongside all thesedevelopments, we areentering the CognitiveSystems Era. A newgeneration o computingsystems is emerging withembedded data analytics,and managed, automated,data-centric architectures inwhich the storage, memory,switching and processing aremoving ever closer to thedata itsel .

In today's programmableepoch, computers essentiallyprocess a series o i thenelse equations. In the

uture, cognitive systems willlearn, adapt and ultimatelyhypothesize and suggestanswers. This will require

a undamental shi t away

rom how computing hasprogressed or decades, andat the same time it will alsoopen up myriad new ways

or communications serviceproviders to drive data-basedrevenue streams.

We are only at thebeginning o the digitalmonetization path with allthese opportunities on thehorizon. Our rst priorityon this journey should beto improve the enterprisesper ormance and gain insightinto customer experience.

Over time these insightscan be collected andcombined with externaldata to help develop entirelynew service o erings andbusiness areas. A solidin ormation managementstrategy is key to capturingvalue in the uture, and tonavigating the opportunitiespresented by big datasuccess ully.

Scott StainkenGeneral ManagerGlobal TelecommunicationsIndustryIBM



IT IS THE FRAMEWORK

which changes with eachnew technology and not justthe picture within the rame,said Marshall McLuhan, aCanadian philosopher ocommunication theory.

For the communicationsindustry, in particular, theenvironment has certainlyevolved and will continueto do so. Few could predictthat communications serviceproviders would contend witha global economic crisis, onlyto ace new opportunities andchallenges that transcend themore obvious ones, such asmobility.

Todays technology trendsare hitting at the core oservice providers ability torecognize and quickly addressopportunities, and drivegrowth generated by some othe most promising trends.

Several challengescommunications serviceproviders aced last yearare enduring into 2013. Forexample, average revenueper user will continue todecline and non-traditionalcompetitors to rise.

Inexpensive or ree textmessaging, low-cost voice,data and media bundles, andthe proli eration o all sorts

o devices rom phones, to

gaming consoles, to healthmonitors will continue totax network capacity and itsmanagement. New research 1

ound that more than halthe people who arent usingthe mobile Internet now arethinking o doing so in thenear uture.

Simultaneously, providersenterprise customers arestill shi ting voice tra c ontodata networks, and adopting

xed mobile convergencetechnologies to create aseamless mobile experience.

There are some key,game-changing technologytrends that will a ect thecommunications industry overthe next three to our years.As a result, providers should:

Keep an eye on context- based services. Imagine ascenario where a provideridenti es roaming subscribersand o ers them specialpromotions on travel,accommodation and otherhelp ul services in the citywhere theyve just arrived.

To be players in this arena,providers should gatherand use speci c contextualin ormation shoppingenvironment, location, socialcontext, usage patterns and

shopping pre erences and

embrace new sources suchas geographical location,time o day and in ormation

rom social plat orms, whilebalancing convenience withprivacy laws and customersprivacy expectations.

Embrace and manage big data. As customersinteract via voice, email,instant messaging and socialplat orms, and new devicesproli erate, data demandscontinue to grow.

Providers have startedto harmonize networkoperations across technologyand service unctions. Forexample, or quadruple play,customers with voice, video,media and data services, therating portion o the billingapplication needs di erentrules to combine di erentdata types to properly billsubscribers.

Kenyas Sa aricoms mobilebanking operation, M-PESA,integrates services such asremote money trans er, cashdeposits and withdrawals andbilling services or utilities.Clearly, industrialized datamanagement will be required,and data governance teamswill be needed to sort outthe data sprawl, create new

gaMe-changing technologieSWill unlocK PotentialgroWth in coMMunicationS

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architectures, data policies,

inter aces, validation, andmanagement.

The problem is not theabsence o enough data,but the absence o the rightdata, and how quickly it canbe utilized to make real-timedecisions that can impactin rastructure investments,service management,network policies and premiumo erings.

Find their place in the mobile cloud. The mobilecloud is progressing, withconsumers and enterpriseusers employing acombination o cloud storagesolutions to store, retrieveand consume content whileon the go. Communicationsservice providers seeking astake in this lucrative marketmust battle some o the webgiants that pioneered cloudcomputing services.

Despite the competition,there are potential newopportunities or wirelessoperators to develop theirown carrier-based versionsto provide sa e storage orconsumers personal data,which is being generatedand stored on an increasingscale. With most subscribersusing more than one brand

o device, having access

to data and other mediabeyond the limits o devicemakers personal cloudsilos is paramount. Wirelessoperators are uniquelypositioned to provide suchservices.

Tap into the machine- to-machine momentum. The soaring growthtrajectory projected ormachine-to-machine (M2M)communications hasaccelerated competitionacross the communicationsecosystem. Some providersare responding with in-vehicleconnectivity, or telematics, togenerate new revenue.

In act, in 2012, U.S.wireless operators inkedmajor deals with automotivegiants, which can potentiallyreach into other verticals,such as health care, assettracking and home automation.

As the number oconnected devices climbs,it will become increasinglydi cult or communicationsservice providers to convertthe Internet o Thingsinto a real business. Theyshould address trends in keyvertical market segments,such as healthcare or retail,and consider strategic

partnerships to drive new

value.Use social media to

connect with customers. Social plat orms are drivingconsumers to websiteswhere they expect 24/7access to in ormation andcommunity. Monetizingsocial media may be in itsearly stages, but providersshould look to o er a broaderrange o services on socialplat orms, including grievancemanagement, service status,sel -guided help, or customer

eedback, using social mediato promote new services andbuild brand strength.

Be a good host. Plat ormas a service (PaaS),commonly called hostedcommunications, willcontinue to expand, givingproviders a much-neededopportunity to shi t theemphasis rom cost-cutting tobusiness innovation.

For example, someproviders are o ering M2Mcapabilities to help companiesmanage their in rastructure

rom a hosted environment.One European providerenables businesses tomonitor, track, and managetheir enterprise devices in50 countries.

Orchestrate security

resources and responses. As providers expand theirrelationships with contentproviders and partners, they

ace potential security threatswhich range rom identitythe t to SMS messagehijacking.

Adopting data-plat ormapproaches and orchestration,which involves gathering theright resources and quickly when theyre needed, will beparamount to preventing andaddressing security issues.

Providers and their CIOsshould already be internalizingkey technology trends suchas these so they can start

raming discussions aboutthem and, more importantly,the impact the technologieswill have on the business andthe new initiatives they candrive.

Montgomery Monte HongManaging Director GlobalCommunications Industry andAsia Paci c CommunicationsIndustry LeadAccenture



Sponsored feature

The business support system (BSS) islargely designed or the age o voice,text and data, but in the digital economy,the dumb pipe threat looms large over

CSPs, and BSS now has to bridge thegap between network in rastructureand service innovation that o ten starts

rom the Internet world. BSS mustevolve rom service support to serviceenablement, culminating in an entirelynew plat orm the Business EnablementSuite (BES).

From BSS to BESIn the halcyon days o mobile telecoms,network deployment speed translatedto more subscribers and more revenue,so it was considered pre erable tosimply build a new BSS or a newcharging system to accommodate anew technology/business rather thanspend months or even years modi yingthe legacy gear. This leads to a tangledmess that could be called businessservice spaghetti. Business fexibility ishampered, while time to market (TTM)

or new services usually takes weeks oreven months, as opposed to the days orhours o the Internet world.

Most o the services being churnedout today are long-tailed and fame outquickly, making them ill-suited to siloedmanagement. A new philosophy oenablement is needed, suitable or anecosystem where innovation could come

rom anywhere, and this is why thebusiness support system must evolveinto the business enablement suite (BES).

A BES would be something completelynew to the telecom industry, but its notdi cult to nd precedents in cyberspace.

Internet players are good at buildingan open ecosystem (over a serviceplat orm) that attracts as many partnersas possible in order to deliver the best

service experience to end users, o tenmonetizing it a ter the act throughreverse charging, reemium services,etc. Empowered by this openness,and other elements, every partner canrun and manage their business/serviceautonomously. Amazon and its ilk aregood examples.

BES: A neurodynamic treeBES, as a concept new to telecomsthat will serve vastly di erent business

unctions depending on an operatorscom ort zone, can be thought o as aneurodynamic tree, as opposed totraditional BSS, which grows more likean ordinary tree.

As an ordinary tree grows, the sidethat aces the sun (the north or southside, depending on your hemisphere)grows more robustly, with the shapeo the tree itsel gradually changingover a matter o months, much like theresponse time o a traditional BSS to thebusiness environment.

But in the digital economy,circumstances change quickly, and anordinary tree cannot fourish under suchconditions. A new kind o tree is needed,one that is aware o its environment andcan react promptly a neurodynamic tree.

With the neurodynamic structure o aBES tree, each o its many leaves actsas a customer touch point, and couldbe used or query, subscription, billing,payment, delivery, or catalog purposes,among others, and is equipped with the

necessary skills, in ormation, knowledgeand tools to instantaneously respondto changes in the surrounds, just likehow a nerve detects a hot stove and

tells the hand to pull away, all withoutinstructions rom the brain.

A good example here is a retailchannel, which is capable o de ningfexible business rules on its own. Whena customer accesses this channel, thecontext (location) is obtained and thecustomers pre erences (indicated bydozens or hundreds o tags) are matchedagainst these prede ned business rules.A ter matching, a comprehensive seto actions such as promotion, billing,noti cation and advertising can betriggered instantly in a user- riendlymanner.

Within this neurodynamic tree, eachlea acts autonomously, as does thetree itsel , with big data acting as thesoil that nourishes it. As the ecosystemgrows more robust, more o these treescan thrive, with each lea receiving thenutrients (customer insights brokendown rom big data) it needs on demand.

Key attributes o BES

There are our key eatures that makethe neurodynamic structure o BES whatit is.

Experience on demandThe selection o goods online, and thein ormation about them, is virtuallylimitless. Both o these trends makecustomers more demanding. A premiumexperience is critical to both convertingand retaining a prospect, and it shouldlast throughout the entire purchase and

F m bSS beS, mBy Jiao Aijun, Director BSS Marketing, Huawei



consumption li ecycle. Thanks to theseamless collaboration o online ando fine channels, as well as synergybetween IT and communication

networks, the boundaries betweendigital goods, physical goods andcommunication services are blurring.Goods and services should be tailored tothe customer (through con guration) anddelivered on demand without waiting, ina well-advised and well-in ormed ashion.

Business agilityCSPs typically provide all servicesthemselves, monopolizing the entireli ecycle; with agility in this caserelating to internal operations such asprice con guration, business processorchestration and bill ormatting. In thedigital economy, i CSPs want to movebeyond dumb pipe services, they need toaggressively partner with retail channels,virtual network providers, serviceproviders and vertical industry partners,and this means no more monopolies.Instead, they must enable their partnersto work autonomously, de ning theirown business rules and orchestratingtheir own business processes, withthe entire process as automated andsimpli ed as possible, so that e ciencyand a better user experience areassured.

Cultivating innovationAny BES will act as a business enabler

or building an entire ecosystem. Itssuccess depends largely on how manypartners are attracted and how manybusiness opportunities are created.A BES will be open as it will provide

internal capabilities to all partnersthrough standardized inter aces, whileallowing a certain level o sharing amongpartners in accordance with in-place

agreements. It will also consist olightweight modules that can be tailoredto support a variety o business models.

Data-driven value realizationBig data is still largely an unexploitedresource in the telecoms industry, butthis has to change as this data will provethe soil through which any operatorsneurodynamic tree will thrive. Althoughbig data is less exploited in the telecomindustry than in the Internet world,telecoms has the advantage as data

rom networks, services and the Internetcan all be combined to better thecustomer experience and create moreopportunities.

How BES is utilizedThere are our levels o utilization orBES that an operator can exploit. The

rst is simply the in rastructure level,and encompasses broadband pipe andbasic communication services, such asvoice messaging.

In rastructure enablement is thesecond level, where CSPs provideIn rastructure as a Service (IaaS) toenterprises and SMEs, or enter verticalindustries with partners by exploitingtheir industry-speci c expertise andcapabilities. CSPs are well positionedhere as they are already trustedproviders o reliable and securecommunication services.

The third level is consumer serviceenablement, and this is where CSPs

orm an alliance with OTT players toprovide innovative services that delivera superb user experience. CSPs canexpose their internal capabilities such

as billing, charging, communicationservices, payment, customer pre erencestorage and service context to acilitateservice innovation or OTT players, andget a slice o their revenue.

The top level is simply consumerservices, where an aggressive CSPmight compete directly with OTT playersto establish their brand in the consumermarket. With a BES in place, a CSP willbecome a local or regional economicleader, with all the advantage that thisimplies. Market cases currently includeTele nica Digital and SingTel DigitalMedia.

Many CSPs will pre er to stay intheir com ort zone with simple pipeservices, but even they will need BESto stay ahead o agile competitors,while those looking to take enablement

urther, such as Voda one (with itsstated intention o being the Amazono telecommunications companies), willcertainly need it. In the digital economy,di erentiation is pro t, and BES is howwe get there, through its innovation,agility, value creation and on-demandexperiences.



F m m s, w w s s

THE COMMUNICATIONS industry has much to o erand what it o ers is in greatdemand, as demonstratedby the insatiable appetite ormore bandwidth everywhere.Despite the gloom caused by

ast-eroding income rom coreservices and the rise o erce

competition rom those whodont have the challengeso running national andinternational public networks,there is much to celebrate.

For one thing, people theworld over are increasinglyviewing communicationsas indispensable: In Kenya,

people will skip a meal orwalk to save the bus are sothey can keep their mobilephones in credit o tenmaking a call or sending amessage will help them put

ood on the table later. Thecost o a top-up is around 72Kenyan shillings (less than $1),

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in the past are becomingless use ul. Sadly,communications serviceproviders have becometrapped in a process o whatscalled red ocean innovation,where a crowded and de nedmarket space (connectivity)is being turned bloody due tocut-throat competition and a

ocus on marginal changes opricing and products, saysTeresa Cottam, Founder andChie Analyst, Telesperience.

Elsewhere there are blueocean opportunities or themto exploit, but to transition tothese requires them to builda li e-ra t using service andbusiness model innovation,experience innovation(creating novel or valuablecustomer experiences) andsupply chain innovation; thatis, becoming more adept atworking with partners.

Incremental innovationwont deliver the resultsservice providers need

ast enough, but disruptiveinnovation is o ten di erentto what many o them think.Innovation doesnt have to

be a major new technologyimplementation: it can justbe an advance in packaging,pricing, design or customerservice. In other words, youdont get special innovationpoints just because youtackle the hard innovationrather than the so tinnovation. Why do serviceproviders make li e so di cult

or themselves? Whats more,what customers perceive as

F m m s, w

innovative is o ten di erent towhat the industry perceives itto be, adds Cottam.

In uture, innovation willnot only come rom insidecommunications providers:it will be more distributed,deriving rom a wider rangeo sources, including partners(see the next section) andeven customers.

By ignoring this type oinnovation operators arenarrowing the volume o newideas they are able to exploitand e ectively creating abottleneck. Innovationis a power ul competitiveweapon; but it takes many

orms, and communicationsservice providers need toinvest in the ull arsenal towage this war success ully,concludes Cottam.

A great example o aservice provider that isemploying customer-sourcedinnovation is the U.K.-basedvirtual mobile networkoperator gi ga , a subsidiaryo Tele nica, which runson O2s network. The termgi ga is a colloquial Scottish

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with many Kenyans onlyearning $1 a day, whichis a good indication o theimportance attached tocommunications.

This is not least becausemore than two-thirds o theKenyan adult population usesSa aricoms M-PESA moneytrans er service to receiveand make payments. Some$8.6 billion fowed throughthe service in the rst hal o2012 alone, a huge chunk othat countrys gross domesticproduct.

M-PESA is, however, anexception to the general rulethat communications serviceproviders are good at technicalinnovation, incrementalprocesses and, to someextent, innovation on a tightbudget. Conversely, that theyare not, in the main, so adeptat other types o inventionon the service, business andmarketing levels.

Di erent types oinnovationThe problem is the innovationstrategies theyve used



term, which means mutualgiving. The companysmission statement is "themobile network run by you"to refect the act that someusers help run aspects othe operation, harnessinginnovation at the businessmodel, product, experienceand marketing, not thetechnical, level.

For instance, customers areencouraged to suggest novelrates, which are trialed. I

there is su cient demand orthem, they are permanentlyadopted. Also, users are given5 ($7.92) or every memberthey recruit to gi ga andearn so-called payback points

or answering questions inthe community.

Change your view o valueValue-based analysis isan innovation tool thatlooks at an organizationsworkfow and allocates valueparameters to each stepin the process o bringingvalue to customers, explainsAndrs Jordn, ormer VPo Innovation, DeutscheTelekom, and Co-Founderand Managing Partner, ArcusAdvisors. But value doesntnecessarily translate exactlyinto a number.

Value can also be drivenby more qualitative actorssuch loyalty index and/ or li etime revenue valueassessments or eachsubscriber. Additionally, theinherent value o a subscribercan also be enhanced bytheir uture potential to buynot-yet-de ned servicesdriven by evolving subscribertrends. The issue is that thishas not always been so with

certain operators who attimes seem to be indi erentto their customers needs anddesires, he says, leading tosevere revenue losses oroperators.

For example, they have notbeen able to assess the uture

top down, which infuencesthe decisions o its 35,000employees to constantlydeliver the best value orcustomers." 1

Interestingly, the idea isnever simply to sell productsand services, but rather

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and anticipate consumertrends e ectively and in turnleverage their unique valueparameters, according toJordn, regarding the over thetop (OTT) phenomenon.

He adds, They have beenunable to package theirnetwork o authenticatedsubscribers with compellingservices in ways that makeit e ortless or contentproducers to engage anddeliver content on a revenue-sharing basis. Why notcreate business-to-businessOTT plat orms that couldbe accessed by contentproducers and that could sellmovies to its authenticatedusers in rictionless ways?

Based on some industrymetrics this would meansix movies a year perauthenticated subscriber,creating a new revenueopportunity or the operator.Furthermore, the operatorcould then create additionalservice bundles which could,

or instance, include movies,cloud storage, or cloudreplication services.

Apple has a "market-drivenculture, inspired rom the

parties, like Skype andWhatsApp.

Barriers are things wecreate, we want to protectthe past and at the same timegrow. I you look at Apple,they cannibalized their iPodwith the iPhone when iPod

provide experiences and anemotional connection to abrand. It works or Appleand or Starbucks along withmany retailers, as well as orMercedes Benz, BMW anda number o other car makers.

Its important to rememberthat advances in technologydont necessarily meanvalue to customers: Itspossible to have a veryinnovative product that isnta commercial success. It isimportant not to con useinnovation with the nancialoutcome in the market. 2

Cannibalization isntalways badRetail businesses cannibalizetheir o erings by bringingnew options to customersevery two to threeweeks. They understandcannibalization is not a dirtyword, but a strategy thatkeeps bringing customersback to the store. This isin great contrast to thecommunications industry,which greatly earscannibalization, althoughits core revenues are beingeroded anyway by outside

F m m s, w w s s

unctionality was included inthe rst iPhone. Any productmanager at any telco wouldhave blocked the release othe iPhone because o theconsolidated presence othe iPod or, worse, wouldhave removed the iPod

unctionality rom the iPhonebe ore market release.

This is a mistake; iyou do not eat your lunch,someone else will. I youreally want to see innovationin the core o the businessdo not let anyone in yourcompany block the release oa product to market using thecannibalization argument,observes James Finn,Director o CommunicationProduct Design, Tele nicaDigital.

Learn rom emergingmarketsCommunications serviceproviders in emergingmarkets have a better chanceo sustaining themselves inthe value chain or a numbero reasons. Low credit cardpenetration means OTT appstores are ine ective on theirown in emerging markets.



F m m s, w

lots o areas. Learning romall their experiences canhelp service providers indeveloped markets think ina di erent way, also known

as a 'trickle-up' innovationprocess.

Dont worry about ailureThe pharmaceutical industrydoes it, Google does it, Appledoes it. In an interview,the late Steve Jobs saidthat sometimes whenyou innovate you makemistakes. It is best to admitthem quickly and get onwith improving your otherinnovations. 4

Despite the demonstrablesuccess o this ail ast,

ail cheap approach, thecommunications industry atlarge shies away rom it.

James Finn rom Tele nicasays its a lack o audacity.Google, Apple and Facebooklaunch products that are notper ect; in act, Facebook hasseveral sayings in its o cesuch as, released is betterthan per ect and move astand break things. Googlealso is establishing itsel asthe killer zombies, when aproduct is not working kill itrather than let it be. I'm sure

markets are trying to gureout particularly micro-businesses with 10 or eweremployees.

From a purely nancial

perspective, these MiPYMEs(micro-businesses) are goingto be relatively low averagerevenue per user (ARPU) better than average consumerARPU, but still airly low.The CFO will want customercare to treat them like massmarket customers, pushingthem to online channels orlow priority queues in the callcenter. This will meet withresistance rom MiPYMEcustomers, Swain warns.

He adds, Online channelsare important but they alsoneed special treatment they need to look morelike consumer portals thanlarge enterprise portals.Processes must be step-by-step and language mustbe non-technical becausethere is no IT department

lling out the orms. For themajority o MiPYMEs, theIT department is o ten ason or daughter who usescomputers at school.

Due to the challenges theyace, many emerging markets

are ahead o the curve in

we all know several zombiesin our companies and i weask why not kill, why notbe removed, I think well seeits a lack o boldness on our

part.

Partner more, monopolizelessBlocking OTT or degradingOTT communication cancause backlashes romcustomers who are prevented

rom using their avorite apps.It will put operators underpressure when other playerschoose not to block, andcan also cause clashes withregulators when it comes tonet-neutrality, states DanieleTricarico, Pyramid Research.

He also suggests thatpricing neutralization mayhelp in the short term, butin the long term it may notprotect operators rom pricepressures.

There are some positivesigns regarding partnershipswith OTTs. As an example,in September 2012, the3 group launched a WhatsAppdata pack5 and a WhatsApproaming pack 6, which thecompany says is enablingcustomers in Hong Kong toenjoy the ull unctionalities,

Partnering with operators orcharging app purchases toa postpaid bill or a prepaidaccount increases developersrevenue opportunity andkeeps operator brands top-o -mind with consumers,explains Wally Swain, SeniorVice President EmergingMarkets, Yankee Group.

Swain also considers thatthere is an opportunity orlocal content. Local appcontent (especially music)

is likely to be ignored by theOTT app and music stores,apart rom some o thelarger markets like Braziland Mexico. Operators havecredibility in most emergingmarkets as high tech playersand can attract developersand content owners topartnerships.

He adds, Movistar'sCampus Party program (inLatin America) is a goodexample o this idea. I wouldrecommend they distributethrough operator-brandedsub-stores under the majorapp store brands because theycontrol the handset real estateand customer experience.

Further evidence ohow local content can giveoperators additional revenuestreams and help them retaincustomers is provided in TMForums Middle East Regional Insights report 3.

Lets also consider thesmall and medium enterprise(SME) market, an opportunitythat communications serviceproviders rom developed

1http://instant.marketculture.com/index.php?option=com_content&view=article&id=83:wp003decisionmakersandpro ttrends2Great by Choice: Uncertainty, Chaos, and Luck Why some thrive despite them all , Jim Collins and Morten H. Hansen, p. 223-2243From rapid growth to maturity: Strategies or sustainability was published in January 2012 by TM Forum in collaboration with In orma Telecoms and Media.It can be downloaded by all employees o the Forums member organization who register or bought by non-members rom: www.tm orum.org/MiddleEastInsights20134Insanely Simple: The Obsession that Drives Apples Success , Ken Segall, p. 1995www.three.com.hk/website/appmanager/three/home?_n pb=true&pageid=3a2001&_pageLabel=P400328951219906687968&lang=eng6www.three.com.hk/website/appmanager/three/home?_n pb=true&_pageLabel=P200470391219567710594&lang=eng&pageid=534001

l m m k sTM Forum has published a series o Regional Insights reports on markets within theMiddle East, A rica, Asia Paci c and Latin America. They are can be downloaded ree by allemployees o the Forums member companies by registering on the website or to buy bynon-members rom www.tm orum.org/regionalinsights



F m m s, w w s s

at home and abroad, o whatis arguably the most popularOTT communications app inthe world.

There are several reasonsto think that by partneringwith WhatsApp 3 it is headingin the right direction. One isthat through the partnershipthe operator enhances itsbrand by proximity with apopular Internet brand, whichultimately contributes to

increasing customer loyaltyand reduce churn.

The partnership also has animpact on revenues, becauseit provides 3 an opportunityto increase both the rangeo services o ered and thenumber o potentially billableevents.

Additionally, AT&T,Sprint, China Mobile,France Telecom/Orangeand Swisscom are some othe communication serviceproviders that have o cesin Silicon Valley. Theirobjective is to speed up R&Dand product delivery withinnovation acquired romstart-ups. 7

Become a business enablerThe consumer marketis commoditizingcommunications. The industryneeds to accept this and moveon, or example looking at thebig opportunities there arein serving businesses romother verticals, be it via cloudservices, machine-to-machinecommunications, bringyour own devices, paymentsolutions or other means.

Perhaps one o the biggestservices that communicationsservice providers can o er

to SMEs, other verticals andthe public sector involvesbig data (see panel). Forexample, the InternationalTelecommunication Unionsuggests that a retailerexploiting big data couldboost its operating margin bymore than 60 percent.

The U.S. healthcare sectorcould create more than $300billion in value every yearby enabling more e ciency

and quality. Governmentadministrators in Europecould save more than 100billion through greateroperational e ciency alone all through intelligent analysiso big data. Users o servicesenabled by personal-locationdata could generate $600billion in consumer surplus. 8

In summaryIn her recent book Kill the Company , Lisa Bodell, ounderand CEO o uturelink, arguesthat in some companies,short-term pro t becomessuch a priority that itdominates every aspect o thebusiness at the expense olong-term pro tability.

You start to turn your gazeinward, obsessed by ndingways to reduce your costs

and increase your output,instead o looking outward atexternal actors like customerneeds and market trendsthat will uel uture growth.The result is that your culturebecomes increasingly riskaverse and impatient.

As times have gottougher, this has been thecase more and more or

many communicationsservice providers, rightacross the globe. Yet thecommunications industry willhave to brace itsel to aceunimagined change i it is tosurvive.

Telecoms might notbe supplied by telecomscompanies, banking mightnot be supplied by banks.The players might be verydi erent very soon. The

consequences are di cult topredict, said Bruno Lanvin,Executive Director, e-Lab,INSEAD. 9

One thing is certain: Wecan no longer continue toaddress the symptoms toour problems with moretechnology. We need tochange the way we dobusiness.

7http://techcrunch.com/2012/11/04/silicon-valley-telecom-startups-dominate-share-o -vc-investment-with- resh-business-models/ 8http://www.mckinsey.com/insights/mgi/research/technology_and_innovation/big_data_the_next_ rontier_ or_innovation9http://world2012.itu.int/summary3

tM F m, sTM Forums Data Analytics/Big Data Management Group is part o our unique CollaborationCommunity (which has more than 65,000 active participants rom all over the world).

The mandate o this Group is to help service providers make the best use o businessintelligence and data analytics tools in the enterprise-wide activities o business assurance.

This team is ocusing on bridging the gap between raw data analytics technology and thespeci c business needs o communications service providers as represented by the TM ForumBusiness Metrics. The initial ocus is on revenue-impacting data such as orders, di erent typeso data records and trouble tickets.

For more in ormation and/or to nd out how to take part in this key area o work, please go

to www.tm orum.org/bigdatagroup or contact Steve Cotton, Director, Business Assuranceprograms via scotton@tm orum.orgThe Data Analytics/Big Data Management Group intends to be a Business Metrics

Contributing Team, which works closely with the Business Metrics & Sca old Team. Like allBusiness Metrics Contributing Teams, they will be trained and assisted in operating within theBusiness Metrics Sca old and the process or metrics development.

For more in ormation about the Business Metrics Sca old please go to: www.tm orum.org/ busmetdevelopment or contact Ken Dilbeck, Director, Collaboration Research & Development,TM Forum via kdilbeck@tm orum.org



THE WORLD IS RUSHING towards digitization oproducts and services,with everything becomingautomated. With digitalchannels replacing traditionalchannels to market,communications companiesmust change rom providingentire services in-house tobundling internal and externalservices, either direct tocustomers or through anindustry specialist provider.

Today, a communicationsservice provider owns almostall o the value chain, includingthe customer experience, itsservices and the network,but not the devices anddevice manu acturing, saysMary Whatman, FoundingPartner, Parhelion GlobalCommunications Advisors,a communications industryconsultancy. Tomorrow,a communications serviceprovider will have a role inthe value chain, but will notalways own it.

TM Forums introductoryguidebook, part o Frameworx12.5, titled: Managing Partnerships, A guide to developing success ul

and sustaining managed service partnerships in the digital economy 1 contrastsoutsourcing, which typicallyinvolves deploying peopleto deliver the service, withmanaged services. They areusually technology or process-centric and rely on specializationand economies o scale.

In-house productsMany communications serviceproviders today develop alltheir products in-house, sellthem through their own sales

orce or retail shops, and runthem on their own networks.

However, with their largeconsumer markets stagnant,they are looking towards thesmaller but aster growingbusiness market. This givesthem an opportunity to movebeyond typical xed and mobilevoice and data transport tocloud services, including:

n So tware as a Service(SaaS), Plat orm as a service(PaaS) and In rastructure asa Service (IaaS);

n uni ed communications;n managed xed and mobile

services;

n security and authentication;n core business applications;

personal productivity tools;and

n collaboration.

A communications serviceprovider may use its ownbrand to build a bundledo ering o services that it sellsdirectly to customers. To dothis it can call in specialist thirdparties to provide individualaspects o the o ering.

It could also provideservices, both internal andexternal, to a third party, likea healthcare provider, whoprovides an industry specialistpackage o services, o whichcommunications is just oneaspect.

Scale brings pro tabilityCommunications serviceproviders can also makeinternal services available tocompetitors, increasing theall-important scale that bringspro tability.

I you provide retail andwholesale services withinthe same company, theconundrum can arise aboutwhether you are helping

t s w m s mm s mp s w m p p mp s m

s p w s s m.R ne p s.

MAnAgEd sERviCEs RisEin the era oF cloud

F m m s, w



competitors to be just as goodas you, says Keith Willetts,Co- ounder, Chairman andCEO, TM Forum, and authoro Unzipping the Digital World 2. Running them ona reasonably autonomousbasis makes much moresense. Disaggregation, in allindustries, is a growing trendthat we will see more andmore.

Managed services arenot just suitable or larger

business customers. Gartner,the analyst, predicts that by2016, 60 percent o smallerand medium-sized businesses(SMBs) will use managednetwork services or someaspect o their IT services andsupport.

Selling managed servicesinto businesses is an areathat systems integrators haveclaimed or quite a while, butis becoming more prevalentand a more important revenuestream or telcos, says EvanKirchheimer, Practice LeaderEnterprise, Ovum.

However, they are prettynew at providing anythingbeyond managed networkservices to enterprises, sothey are looking to expand intoareas that are closely coupledto the network. In the last twoyears we have seen a vastincrease in securing access toand providing cloud services.

Intergrating bundlesThe problem with bundlingtogether services romdi erent specialist providers isintegrating them and ensuringquality o service. It is verydi cult at the moment,because each party measurestheir quality o service

and customer experiencedi erently, says Willetts.

Contractual and operationalarrangements between theparties should be driven bycustomer requirements,which are refected in aservice level agreement (SLA).

TM Forums SLAManagement Handbook 3 de nes an SLA as anelement o a ormal,negotiated commercialcontract that documents

the common understandingo all aspects o theservice and the roles andresponsibilities o bothparties rom service orderingto service termination.SLAs can include manyaspects o a service, suchas per ormance objectives,customer care procedures,billing arrangements, serviceprovisioning requirements, etc.

Monitoring agreementsSLAs are monitored througha range o key per ormanceindicators (KPIs). Thehandbook says that theseare inherently network-

ocused and provide littledirect indication o theend-to-end service deliverythat the network supports.They should be ocused onservice quality and quality oexperience.

Kirchheimer says thatcommunications providersneed to implement a proactiveservice approach. Insteado waiting or aults to

1See Managing partnerships Introductory guide , which is available ree to members rom theForums website at: www.tm orum.org/Introguide/Managingpartnerships2Unzipping the Digital World , which was published in 2012, gives an eye-opening view intohow to thrive and survive in the rapidly evolving digital economy. It is available to purchase onAmazon: www.amazon.com/dp/B0082PLD4W3The SLA Management Handbook is available ree to members rom the Forums website at:www.tm orum.org/GB917SLAManagement

happen and then responding,they should use the latestmonitoring and analyticstechnologies to do activeservice review. This allowsthem to anticipate problemsbe ore they a ect thecustomer.

He also says thatcommunications providersmust invest in due diligenceon the potential clientsorganisational structure anddecision-making process. For

instance, mobility is o tenprocured in each countryby local communicationsmanagers.

You must ensure that thepeople you are dealing withhave the agreement, or areable to coerce, other partso the organization to adhereto the new procurementprocess, he says. We haveseen telcos selling managedservices come up againstreal headaches and having torenegotiate contracts, becauseone country will not comply.

Managing Partnerships saysthat managing relationshipswith other providers anddelivering quality servicesend-end across a complicatedecosystem is a corecompetency or success inthe digital world. The problemis that culturally, many bigcompanies arent good atit because they are used todominating relationships andcalling the shots. Thats asigni cant disadvantage in thedigital world: success ul and

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