Openet exec gets red-pilled, joins Matrixx

Marc Price, CTO for the Americas at BSS vendor Openet, has decided to find out how deep the rabbit-hole goes by defecting to competitor Matrixx Software.

He will get to travel a bit more in his new role at Global CTO for Matrixx and he had been at Openet for 15 years, so it was probably time for a change. The move will also allow  Matrixx Founder Dave Labuda to step away from the techie side of things and focus his attention entirely on some serious chief execing.

“Marc is a tremendous addition to Matrixx’s executive leadership team,” said Labuda. “His experience will be invaluable as we continue to scale the company. Marc’s vision and vast experience in the telecommunications market is renowned. He has played a leading role across three key eras in the telco market: the rise of competitive carriers; the establishment of the real time charging model; and the current process of digital transformation and subsequent move to hybrid clouds and IoT.”

“Matrixx is poised to lead the digital commerce revolution being ushered in with the advancement of cloud technology and the advent of 5G,” said Price. “I’m excited to join the team at such an important time to help accelerate Matrixx’s global growth. I am looking forward to working with the Matrixx team to help scale the company, driving Matrixx’s innovation to further accelerate our customers’ digital transformations.”

Openet and Matrixx aren’t just competing BSS vendors, they’re both trying to disrupt the market by presenting a more flexible, cloud-based approach to customer engagement for operators. They’re both fond of buzzwords such as ‘digital transformation’ and like to paint larger BSS competitors as slow and anachronistic. So culturally this should be a straightforward move for Price and, at least until they find his replacement, may mean a fair bit more work for Openet Founder and CTO Joe Hogan.

BSS – change and adapt, or die

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Tony Gillick, Tony is GVP Solutions Management at Openet, takes a look at the current state of the BSS business.

Recent news from Ericsson that it is spending SEK 6.1billion (approx. £530million) to restructure its BSS business comes as little surprise. Approaches to operator mobile service monetisation and underlying BSS has changed beyond recognition over the past few years. Traditional delivery mechanisms, when operators tied themselves to one major vendor for all its service monetisation needs are over – and the telecoms industry needs to accept it and move on.

The big bang approach to BSS transformation doesn’t work. For Ericsson to base their Revenue Manager solution on an end to end BSS stack that would replace existing legacy BSS was a brave move. The rewards could have been very high, but then again so were the risks.

Monetising new services is already going to be an uphill struggle for operators, adopting the right tools can make life all the more easy for them. These tools will see the overhaul of service delivery models and service architectures, and the brave adoption of new technologies and approaches. For the telecoms industry, such change is daunting and risky but more important than ever before.

A chance at survival

In today’s world, everywhere you turn there’s a vendor or an operator talking about change and the need to evolve. Yet, for many, it’s evident that the definition of digital transformation remains unclear. Operators and vendors must remove themselves from the echo-chamber in which they find themselves. They need to find a new source of truth, one that encourages and promotes innovation and new thinking, but also highlights their failings, and allows them to successfully explore the new trends driving industry change.

Doing this is tough, however. For the legacy operator, adapting to quickly evolving industry and consumer trends can prove daunting and complex, and very much out of their comfort zone. But today’s reality means that consumers are no longer prepared to wait for their operator to act and deliver the service they need. Consumers have little loyalty to their operator brand and will churn if they feel they aren’t getting value for money or the service they want, when they want it. At the same time, industry trends and the availability of cloud-native technologies is allowing new players, who previously had no skin in the telecoms game, to enter the market. In the face of these new entrants, who have a wealth of new applications and services to offer, legacy operators must take action if they are to have a chance of survival.

What does change look like?

Understanding what change really means is probably operators’ and vendors’ biggest challenge. Yet these answers can be easily found in the trends driving industry transformation.

Operators and vendors must change how they think about transformation. It’s not enough to simply adopt new technologies, operators and vendors must truly get behind the concepts such as open source technologies, and the sharing of new ideas and methods to drive innovation. According to a 2018 TM Forum industry survey, cultural obstacles are one of the biggest issues when it comes to encouraging transformation. Operators and vendors need to leave behind their legacy mindset and begin to embrace collaboration and partnerships. Allowing new relationships to flourish based on mutual understanding and benefit will help underpin digital transformation’s success. Operators just cannot afford to be shackled by their supplier, and similarly, vendors must have the trust of their operator customer to take risks and innovate through new technologies and approaches.

It is only through this cultural change and collaborative approach that operators and vendors will truly be able to leverage the capabilities of new technologies and approaches such as AI, microservices and DevOps. These approaches will be key to developing the platform-based tools and services that operators will need to deploy new offers rapidly, and monetize new services such as 5G and IoT.

The road to digital transformation success is a long and winding one, with many uncertainties along the way. Digital transformation cannot be seen as a destination or an end-goal, it’s an ever-evolving ‘thing’ that will continue to be so long as the industry exists. Operators and vendors have their work cut out to make change a reality, but it’s by learning from the failures of others, and embracing new thinking and new tools that the industry will truly change. In doing so, operators will start to reap the rewards of launching new services by seeing subscriber churn decrease and customer engagement increase. Ultimately, it’ll be the difference between them thriving and merely surviving.

 

CREATOR: gd-jpeg v1.0 (using IJG JPEG v80), quality = 82“Tony Gillick is the GVP Solutions Management for Openet. Previous to this Tony has headed up product management, solutions engineering and systems architecture for Openet. He’s been with Openet for more than 15 years and has managed BSS implementations for some of the leading service providers in the world.”

Success of 5G depends upon operators’ monetization and pricing strategies

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Shay Assaraf, CMO of Optiva takes a look at how operators can make the most of the 5G opportunity.

As headlines and advertisements increasingly tout the promise of 5G, it’s important that operators not fall for their own hype. While 5G certainly holds promise for creating new business models and service segments, realizing that promise depends, in large part, on the development and implementation of sound monetization and pricing strategies.

5G completely alters the way in which communication happens by improving throughput and reliability, lowering latency and increasing network robustness. Likewise, 5G alters what is communicated, enabling machine and device communications that underpin connected autonomous cars, smart cities and other next-gen applications. Furthermore, the dynamic and elastic nature of 5G requires operators to fully embrace and utilize the public cloud to support demand for those applications and decrease time to market for launching new, related services. As such, operators cannot and should not apply 4G thinking and 4G IT infrastructure to monetize 5G.

Instead, operators should visualize the types of 5G environments they want to support and then build a business case around it. Operators need to determine the applications they want to support and design ways in which they can deeply immerse customers into experiences and content. They should consider how customers will interact with each other, as well as with machines and devices, over the 5G network.

Throughout this process, consideration should be given to opportunities for monetization. Likewise, pricing strategies should be developed to address the unique nature of 5G offerings. Following are three key areas that operators should consider when developing such plans.

1. Monetize the network

5G enables operators to fully leverage their network and infrastructure capabilities to create new monetization opportunities, including:

  • Developing and selling premium service offerings that are charged and upsold based on quality of service (QoS).
  • Monetizing the mobile network to sell fixed wireless services.
  • Enabling developers to monetize applications that connect to devices, generating revenue from developers, as well as device end users.
  • Creating ecosystems with a variety of partnership opportunities and revenue-sharing models by leveraging infrastructure.

2. Monetize the slice

According to research from Gartner, the greatest revenue potential for 5G will be developed through network slicing, which supports multiple use cases, business models and services. Network slicing enables operators to create multiple virtual networks using a shared physical infrastructure. They can then tailor slices of the network to highly specific use cases and unique business requirements based on capacity, latency, quality of service (QoS), security and other variables.

Network slicing enables operators to deploy only those functions needed to support each customer and/or market segment, allowing them to differentiate through service customization. Slicing also enables “network as a service” offerings that enable operators to manage the slices independently and apply rules as needed. As such, operators can develop offerings for third-party tenants, wherein they maintain control over service deployment and operation and adjusting access according to each agreement.

For operators to truly monetize, the slice will require significant changes in business and operation support systems (B/OSS). Orchestration and Intelligent network functionality - managed in real time - will be key in the OSS layer to enable automated network operations. Meanwhile, the BSS layer requires more flexibility to rate and then charge in real time for a new wave of services for any account, customer, subscriber or user.

3. Monetize the enterprise market

While 5G enables operators to expand service offerings to consumers, the bigger opportunity is what 5G enables for enterprises, including applications for B2B, B2B2X and IoT market segments. For the B2B market, 5G enables mobility solutions and cloud services to SMEs and large corporations. In B2B2X markets, the concept of “customer” expands even more. For instance, an operator might provide high definition video services to a stadium operator that then sells the service to its premium customers, who are able to capture lost moments and referee decisions using virtual and augmented reality.

Likewise, operators glean great potential from monetizing enterprise applications for IoT. In fact, Gartner predicts that the enterprise market, as opposed to the consumer market, will account for more than 90 percent of the overall IoT services spend.

Determining the pricing model

As operators determine how they want to monetize 5G, consideration also should be given to pricing models for new products and services. Pricing models should include options for one-time charges, subscriptions, usage-based charges, “pay as you go” applications, freemium models and charges for application programming interfaces (APIs).

For operators to maximize ROI on their 5G investments, they need to clearly understand the costs and what they stand to gain from 5G transactions. It’s key to implement end-to-end real-time billing and charging to glean the most revenue for every interaction on the 5G network.

Without question, 5G networks enable vibrant use cases that are creating excitement and expectation for operator networks. However, a well-developed monetization and pricing strategy will enable operators to exceed the expectations of 5G, differentiate their service offerings and ensure future revenue.

 

Shay AssarafShay Assaraf is CMO of Optiva. He has a wealth of B2B and B2C experience in marketing and strategy with more than 15 years in the telecom industry. At Amdocs and before that with Pontis (acquired by Amdocs), Assaraf held various positions, and in his last role, he led the marketing consulting and analytics teams addressing customers’ challenges using analytical data, machine learning and artificial intelligence tools and expertise.

Ericsson calls BS on its full-stack BSS

Kit vendor Ericsson has started the year by writing down almost $700 million to account for the fact that its latest BSS efforts have turned out to be a non-starter.

Its Q4 numbers will feature costs of around SEK 6.1 billion related to the ‘reshaping’ of its BSS (Business Support System) business, half of which will be customer compensations and write-downs, and half of which will be restructuring charges. It looks like Ericsson has concluded this is the only way to get its struggling Digital Services division back on track.

“The company’s past BSS strategy included pursuing large transformation projects based on pre-integrated solutions, including development of a next generation BSS platform, the full-stack Revenue Manager,” said the announcement. “The strategy has not been successful and to date the full-stack Revenue Manager has not generated any revenues.

“The anticipated customer demand for a full-stack pre-integrated BSS solution has not materialized. Delays in product and feature development has also made the full-stack Revenue Manager less competitive. R&D resources in BSS have been focused on full-stack Revenue Manager, causing further delays in product releases of the established platform. In addition, certain complex transformation projects experienced delays and cost overruns.”

No revenues at all? Damn! You have to question the due diligence that ‘anticipated customer demand for a full-stack pre-integrated BSS solution,’ when none whatsoever materialised. Furthermore another SEK 1.5 billion will need to be accounted for over the course of this year, taking the total bill to around $860 billion. Ericsson does still see value in its established platform, Ericsson Digital BSS, which apparently has a decent installed base, so it’s not pulling out of BSS entirely.

A big part of Börje Ekholm’s strategy since he took over has been to dial back some of the over-reach that characterised the Vestberg era. “Ericsson is applying a selective approach to large transformation projects focusing on projects based on available products,” said the latest announcement, and it’s clear that Revenue Manager was just such a project. Ekholm deserves some credit for continuing to look facts in the face and take decisive action.

CMA backs super complaint against loyalty penalties

The Competition and Markets Authority (CMA) has backed a ‘super complaint’ raised by Citizens Advice which suggests UK consumers are being ripped off by loyalty penalties on services such as broadband.

The super complaint was raised by in September by Citizens Advice, asking the CMA to investigate whether customers were effectively being punished by service providers, so called stealth price rises for example. The areas being called into question were cash savings, mortgages, household insurance, mobile phone contracts and broadband.

The CMA agrees with the points raised by Citizens Advice, suggesting the segments in question gain £4 billion a year through ripping off loyal customers.

“Our work has uncovered a range of problems which leave people feeling ripped off, let down and frustrated,” said Andrea Coscelli, CEO of the CMA. “They shouldn’t have to be constantly ‘on guard’, spending hours searching for or negotiating a good deal, to avoid being trapped into bad value contracts or falling victim to stealth price rises.”

Looking specifically at the telcos, this is a frustrating point for many consumers. UK telcos show very little desire to reward customers, setting in processes and systems which make it impossible to leave. Many will give up on trying to navigate the red-tape maze as the poor experience proves to be favourable to the frustrations of trying to leave. By making this process as difficult as possible, the telcos don’t have to worry that much about retention and can instead focus on luring new customers.

The CMA has pointed this out during its own investigation, ensuring that one of the recommendations made to government and regulators will be to simplify the exiting process. This will intend to tackle the process, systems and the fees which customers face when attempting to secure a better deal.

It appears the telcos are much better at scaring customers away from exiting than enticing them to stay with positive customer service. Your correspondent can confirm this is the case after trying to end a Vodafone contract last year. It took a ridiculous amount of time, engagement with several staff who had no idea what they were doing (or was this trained in to make the process as painful as possible?) but the mission was stubbornly completed.

“We know that the better deals are often found by switching provider,” said Richard Neudegg, Head of Regulation at uSwitch.com. “But many companies make this more difficult by not being transparent enough about the options available or how to take your custom elsewhere. We are pleased to see the CMA identify this as an area for improvement, to ensure the power to get better deals is placed firmly in the hands of consumers.”

One specific complaints which has been firmly aimed at the telcos concerns subsidized handsets. The CMA highlights telcos should not be allowed to charge the same amount per month once the handset has been fully paid for. This will be a frustration from the consumer, but like the ridiculous nature of roaming fees, because the industry has stuck together little progress has been made.

Above all else, the CMA opinion adds to the already well-known position that telcos are not at all customer-centric organizations and have a lot to do if they want to be considered relevant for the digital economy.

What does cloud-native really mean for operators?

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Dominik Pacewicz, Chief Product Manager for BSS at Comarch examines the term ‘cloud-native’ and asks what it signifies.

Cloud-native services are disrupting many industries. The telecoms industry however has long been outstripped by other sectors in the adoption of new technology. At the same time, service providers see a great opportunity to catapult themselves into the digital age through a spirited combination of cloud-nativeness, 5G networks and virtualization.

The term “cloud-native” is two-faceted. It entails both the technology used as well as the more strategic design aspect, signifying the direction many enterprises want to take with their applications. This strategy would require a broader look at the meaning of cloud-nativeness, going beyond the usual cloud-native “triad” or microservices, containers, and PaaS (Platforms as a Service) to include 5G and network virtualization.

Focus on microservices for consistent quality

Microservices are a set of autonomous and loosely-coupled services. It is often contrasted with rigid siloed architecture, but microservices are self-contained. They have their own data models, repository and functions, which can be accessed only through their own API. Microservices essentially break down applications into their core functions. In the case of a hypothetical cloud-based streaming platform, these microservices could fulfil separate functions such as search, customer rating, recommendations and product catalogue.

The practice of using microservices comes from the realization that today’s users expect flexible yet consistent experience across all devices, which entails high demand for modular and scalable cloud-based architecture.

Use containers for service peaks and troughs

Containers are the frameworks used to run individual microservices. They can hold different types of software code, allowing it to run simultaneously over different runtime environments such as production, testing, and integration. Containers make microservice-based applications portable, since they can be created or deleted dynamically. Performance can be scaled up or down with precision to treat bottlenecks – for instance, during Black Friday, a CSP can predict the increased demand for its online and offline sales, which can affect the domain but will have a negligible impact on all others.

Containers are an essential part of cloud-native architecture because the same container, managed with exactly the same Open Source tools, can be deployed on any cloud. It will not impact the operator’s virtual servers or computing systems.

Utilize PaaS for different capabilities

PaaS provides the foundation for software to be developed or deployed – somewhat similar to the operating system for a server or an entire network. All of this happens online and PaaS provides an abstraction layer, for networking, storing and computing, for the network infrastructure to grow and scale. PaaS creates an environment in which the software, the operating system and the underlying hardware and network infrastructure are all taken care of.  The user only has to focus on application development and deployment.

Using PaaS enables the harmonization of all elements of the cloud environment by integrating various cloud services. This in turn leads to virtualized processes of web application development, while developers still retain access to the same tools and standards.

5G is the cloud on steroids

The traditional “triad” of cloud-nativeness is not enough for the perfect, uninterrupted cloud application experience. There’s one asset missing – the 5G network. One reason why 5G is important for cloud-native environments, particularly for mobile cloud app development, is that striking the right balance between efficiency and the number of functionalities is a tough nut to crack. This is due to the high latency and the unreliable connectivity of some mobile devices.

Apart from LAN-like speeds for mobile devices, 5G can deliver lower battery consumption, broader bandwidth, greater capacity (1000 times that of 4G), and a substantial reduction in latency (even 50-fold). This is the main limiting factor when working with client-server architectures. What could follow is improved wireless range, increased capacity per cell tower and greater consistency.

The ‘cloud experience’ for mobile devices will be completely reshaped as a result of the adoption of 5G technology and mobile cloud applications will rival – or even surpass – their versions relying on corporate LAN connectivity to the desktop in terms of the number of offered functionalities.

Bridging the Gap with Network Virtualization

A key innovative element of NFV is the concept of VNF (Virtual Network Functions) forwarding graphs which enable the creation of service topologies that are not dependent on the physical topology. Network virtualization allows operators to allocate resources according to traffic demand. Operators can exert control over the network while managing “slices” of the network, without having to spend on infrastructure upkeep.

For this reason, NFV is leading the evolution of the 5G network ecosystem. Virtualizing the Evolved Packet Core (EPC) has emerged as a leading use case and one of the most tangible examples of the advantages of virtualization. The vEPC abstracts and decomposes the EPC functions, allowing them to run in combinations as COTS software instances. This approach allows CSPs to design networks in new ways that drastically reduce costs and simplify operations. Perfect conditions for 5G.

On the access side, the Cloud Radio Access Network (C-RAN) is a highly complementary technology to vEPC. C-RAN deployment, virtualizing many of the RAN functionalities on standard CPUs is seen as an important technology enabler for reducing the total cost of ownership (TCO) associated with RAN. The amount of investment and the operational costs are expected to decrease fast thanks to maturing cloud technologies and deployment experience. The C-RAN approach facilitates faster radio deployment, drastically reducing the time needed for conventional deployments.

In the race to 5G, telcos are steadily introducing function virtualization to gain software control over their networks. C-RAN and vEPC both help to create bespoke data pathways that meet highly specified network requirements of applications – staying true to 5G‘s vision.

The power of now

So, what does ‘cloud-native’ mean for operators? All the interdependencies between the cloud and the enabling technologies make it necessary for the true cloud-native experience to involve not only just traditional “triad” of microservices, containers, and PaaS. Network virtualization and 5G are key elements in the search for efficient, uninterrupted and feature-rich cloud-based services and applications. This will make previously impossible cloud-native use cases easier feasible.

Thanks to operators who experimented with virtualization and conducted early 5G trials, telcos will be the first to have all the necessary technology in place to succeed in the cloud. Will operators take full advantage of this head start – or will they will once again be beaten to the finish line – and fail to capitalize on the technology they championed?

 

Dominik PacewiczDominik Pacewicz is the head of BSS product management at Comarch. He has been with Comarch for over 6 years and works with a number of mobile operators helping them to simply and automate their networks.

Churn is breaking the telecoms market: here’s how to fix it

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Brendan O’Rouke, Head of Design at BriteBill, attempts to tackle the perennial telecoms problem of churn.

We’re operating in an experience economy where success is not just determined by the best brands in the communications and media industry, but by the best across all industries. So how do you stack up?

Low levels of satisfaction in telecoms fuels churn

According to the latest UK Satisfaction Index , published in July 2018 by the Institute of Customer Service, UK satisfaction with businesses across all verticals stands at 77.9/100. The score for telecoms is 74.3, making it the lowest scoring – apart from transport (72.5). Industries that achieve higher scores are doing so by delivering a consistent experience throughout the entire customer journey.

The low level of satisfaction in telecoms translates into an industry with high levels of churn, which are exceptionally high in prepaid, and significant even in the lucrative postpaid sector. According to a new TM Forum Quick Insight Report sponsored by BriteBill, An Amdocs Company, postpaid churn currently ranges from 5% to 32% per year.

The report analyses the links between a consistent customer experience and churn rates in 36 service providers across 24 countries. This revealed an enormous 27-point gap between the best performing and worst performing service providers. The reasons for this gap might not just be due to variations in customer satisfaction, but also to the service provider’s attitude to churn. Any service provider can reduce their churn rate almost overnight if they are willing to invest enough money into customer retention efforts. But therein lies the problem: if they are already losing money, can they really afford to spend such significant sums?

The cost of churn is substantial

Calculating how much to spend on acquisition and retention is something of a black art. If too many customers are lost, revenues will plummet. If too much is spent, margins will suffer unduly. But big money is at stake. Research by Tefficient  shows that the average service provider in a mature market typically spends 15-20% of service revenues on acquisition and retention activities. That’s pretty staggering. To put it into context, McKinsey says average CAPEX spending on infrastructure (networks and IT) is 15% of revenues.

What makes the situation even more challenging is that since there are few new customers in mature markets, service providers must acquire them from their rivals. And, with more service providers chasing the same group of out-of-contract customers, the Subscriber Acquisition Cost (SAC) of recruiting new customers is rising. With SAC a key metric for shareholders to measure the health of their investment, this can be daunting for service providers.

Deutsche Telekom, for example, revealed that its SAC increased by 8% across five of the markets it operates in – Germany, Greece, Romania, Czech Republic and Slovakia – between FY2016 and FY2017. If Deutsche Telekom is spending an industry average proportion of revenues on acquisition and retention, an 8% rise equates to an extra 1-1.5% of revenue being swallowed up, simply to maintain their customer base – wiping out a substantial proportion of any revenue growth they manage to achieve. In a double-edged blow, Deutsche Telekom also revealed that its retention costs fell by 34% over the same period.

Deutsche Telekom’s figures exemplify that service providers need to focus on retention, not acquisition. An acquisition focus fuels churn by only focusing on the customer until the contract is signed. A retention focus ensures customers receive a consistent experience and are nurtured throughout their journey, paying dividends in terms of far higher customer lifecycle values.

There can be huge differences between the cost of retention and acquisition. Take Canada’s BCE and Telus, for example. They revealed in 2017 that it cost almost 50 times less for them to keep an existing customer than to acquire a new one, with retention costs of C$11.04 and C$11.74 respectively, while average SAC in Canada weighed in at a whopping C$521.

Billing should be a retention tool, rather than a churn agent

It seems like a no-brainer. Retaining and nurturing existing customers should be our priority, with SAC fueling net additions and not just replacing churning customers. Of course, the $64,000 question, as always, is how can service providers retain more of their customers?

This is a complex question that doesn’t have a simple answer, but often the reason for churn lies in the most obvious, simple and prosaic of things.

Take the humble bill, for example. Currently, it’s more of a churn agent than a retention tool. The change in tone from the warm messaging of sales to the harsh, impersonal tone of billing can create a jarring effect on customers. Customers often find bills boring, hard to understand and stressful. According to a study by the   in June 2018, one in six mobile users haven’t even checked their bill in the last six months. When asked why, 18% or 1.3 million mobile users said they couldn’t be bothered.

It’s hardly surprising. Even if charges are correct, they are often confusing and unclear because of factors such as device leases, proration (billing for part of a month), billing in advance for some services and in arrears for others, overages, confusing and vague descriptions of charges and so on. And while we may have spent many millions upgrading IT systems to support the digital customer experience, outputs such as the bill are frequently overlooked. Too often, the bill remains old-fashioned, poorly designed and unengaging, creating an inconsistent digital experience for customers.

Taking a fresh approach to bills, however, can pay measurable dividends. Cricket Wireless, for example, a wholly-owned subsidiary of AT&T, rolled out a campaign called ‘Let’s Look Inside Your Bucket’. They used a video-based approach to communicate information, offers and a good dose of humor. It was incredibly successful, leading to a massive 37% reduction in early customer churn.

Three has taken a different approach. They focused on using bills to demonstrate the value delivered to individual customers by revealing how much they’ve saved using its Feel At Home roaming offer.

Sprint’s Mark Edwards, Director Applications Development, says that his company recognizes how important the first ten days of the customer relationship are, and has been working to ensure consistency between what’s promised in the sales cycle versus what’s delivered and what’s billed for. This means working to ensure the customer understands their charges, which in turn reduces enquiries and increases satisfaction.

So, what can service providers do to transform their bill from a source of stress, dissatisfaction and churn into a retention tool? The TM Forum says it boils down to three things:

  • Communicating billing information accurately, clearly and concisely – the aim of the bill is to provide answers, not generate questions.
  • Demonstrating value – rather than being a source of negative information (a demand for payment), bills should be a way of demonstrating value and savings.
  • Communicating new information – with customers increasingly unreceptive to promotional material, the bill provides a regular opportunity to make them aware of new products and services that are relevant to them.

The challenge is to remove inconsistencies in the customer experience by changing the bill from a 1990s paper artefact into a digital era asset, thereby transforming it from a churn agent into a valuable retention tool.

The TM Forum notes that service providers who can do this will have customers that “have a lasting positive impression that takes them beyond contract renewal time and sees them advocate their service provider”. And I’m sure we can agree, that’s a win-win for everyone concerned.

Amdocs and Openet settle baffling, endless patent dispute

After eight years of ensuring expensive holidays for their lawyers, rival telecoms software companies Amdocs and Openet have decided to call it a draw.

An extremely short announcement from Amdocs said “Amdocs and Openet today announced that they have settled a patent infringement dispute in the United States Federal District Court for the Eastern District of Virginia.  As part of the confidential settlement, Amdocs agreed to license certain patents to Openet.”

Back in 2010 youthful Light Reading hack Ray Le Maistre spoke to (then and still) Openet CEO Niall Norton in a bid to find out what Amdocs’ problem was. Norton, however, seemed to be as baffled as everyone else by this act of unilateral legal aggression and chose to conclude that it was merely a measure of how intimidated Amdocs was by the plucky Irish BSS upstart.

“[Amdocs] is a good company and a ferocious competitor,” said Norton at the time. “It’s good to know they’re thinking about us as much as we’re thinking about them. We’re open-minded about what might happen next. Our lawyers say this could take anything between three and 12 months to sort out.”

That’s what they always say Niall and then, before you know it, eight years have gone past and they’re the only ones with any cash. To be fair the case does seem to be especially arcane. A spot of light Googling revealed one case that was apparently resolved in 2016 and another that came to a conclusion a month or so ago. Both accounts seem like very effective cures for insomnia but we don’t feel any more enlightened about the merits and outcome of this litigatiathon as a result of enduring them.

In essence Amdocs accused Openet of infringing on some of its patents and the fact that Openet is now going to shell out some license fees would seem to vindicate it to some degree. But if we assume Amdocs’ intention was at the very least to force Openet to entirely abandon the technology in question, and maybe even to force it out of business, then the case seems to have been a failure.

Openet finds people are losing their faith in OTTs

Research commissioned by BSS vendor Openet found the Facebook data scandal has affected overall trust in digital service providers.

Just over half of the 1,500 people surveyed in the US, UK, Brazil and Philippines said they were less likely to share their data with an OTT (i.e. big internet company) as a result of the data scandal that hit Facebook with the Cambridge Analytica revelations. This trend also applied to free digital services in general as people have apparently got the memo that companies don’t just give stuff away without expecting something in return.

Openet’s narrative is that this represents an opportunity for operators to present themselves as a more trustworthy source of digital products and services. We had a chat with Openet CEO Niall Norgan and he described a potential role for operators as the providers of a seal of trustworthiness equivalent to ‘fair trade’ labels on consumer goods.

“Until now, digital service companies like Netflix or Uber have been held up as the poster children for delivering personalised digital experiences and services,” said Norgan. “But it seems some have been a little too liberal in their use of consumer data, ruining the party for everyone.

“Since the Facebook data scandal, consumer attitudes towards digital service companies and personal data have eroded, with some consumers even deleting accounts in protest. In fact, many have expressed an interest in paying for services if it means that their data won’t be abused, signifying an end to the ‘freemium’ era. Consumers are clearly screaming out for something different, something trustworthy.”

Of course Openet has a vested interest in this narrative. It has been undergoing a strategic pivot over the past couple of years to position itself as the vendor operators can turn to if they want to do something about the OTT threat. Norgan explained that billing itself isn’t the strategic play it once was and that operators need to get better at things like analysing data and partnering with other digital service providers to get with the times.

“Mobile operators have traditionally had a much more conservative approach in their use of subscriber data, despite having an abundance of it,” said Norgan. “For a long time, this conservative approach to data use has been used as an unfavourable measure for operators’ digital efforts, especially in comparison to other digital-first companies.

“But times are changing and it’s clear that consumers expect more if they are to hand over personal data in exchange for services. Mobile operators have earned the right to answer this call. But to be successful, they must learn from the mistakes made by social media and digital service companies alike. Transparency around data collection and opt-in processes are now top priorities for consumers. Operators must bear this in mind when seizing new digital opportunities.”

Here’s a summary of some of the findings from the report. Even if they deliver everything they claim, vendors like Openet can only take operators part of the way. They’re still wrestling with colossal cultural inertia and creating new digital services is never going to be a core competence. But the trust angle does seem to have some legs, if only operators can work out how to exploit it, but in a good way.

Openet OTT survey

The challenge of digitalisation for CSPs

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Jaco Fourie, Head of Product at Qvantel, takes an in-depth look at some of the pain-points faces by CSPs in the digital transformation process.

In 2017, Forrester Research highlighted the enhancement of self-service and automated conversations as two of the critical trends for customer service providers. These predictions highlight the huge shift in recent years that has seen consumer behaviour change to the use of and preference for fully web-based digital services for discovering, buying and consuming various types of services and goods.

Many industries have already faced this trend and emerged successfully; travel, finance and retail to name a few. This transformation is changing the way that consumers behave and forces Communication Service Providers (CSPs) to seek radically more efficient methods of doing business to serve customers according to their new needs and expectations.

Navigating digitalisation and disruption

This shift in consumer behaviour towards web-based digital services is driving digitalization and disruption. However, selecting the right path to the new future can be daunting, as the digital transformation projects required to enable true digitalization have a high failure rate and are fraught with challenges.
Some of the most common challenges that companies face are the overwhelming complexity in existing legacy systems, lack of internal expertise for driving major transformation, employee resistance to change, a lack of support from 3rd party suppliers, budget constraints and a lack of courage to drive a real change in the business, not just in IT systems.

Each of these problems presents a unique challenge. For example, complexity related to existing systems in which the business is a run, can be mitigated by phased transformation where a purely digital new solution is first introduced for a specific market segment, and once proven, the rest of the business can be transformed to a more agile and digital world in phases.

Budget can also prove to be the overarching challenge, and is one of the largest pain points for digital transformations. Spend can grow very large and projects can be years long, with results only available after the project is complete – and that is only if the project succeeds. For this reason, it is imperative that digital transformation projects have a solid plan for delivering value in the stages prior to completion.

For this challenge, it is possible to seek transformation strategies where new ways of doing business are more efficient, saving money, and when customers are transitioned over time to new propositions with new price points, the business case works both for short term and long-term competitiveness.

Traditionally, operators might evaluate transformation strategies of 1) replacing existing legacy solutions at one go (Big Bang), representing bigger risks, but also fast gains if successful – or 2) establishing a new parallel brand and solution for a new, modern digital business (e.g. purely digital business line where only digital sales and are the way to serve the customers, such as Qvantel’s Digital Express solution). Phased transformation of the existing “running engine” is also an option, but requires a clever technical and transformation project management skills to get right.

Learning from other industries

Operators should be using best practices from other industries and learning from the lessons that they have already demonstrated, while also recognizing their own unique market challenges and the opportunities available to those that ‘get there first’.

As travel companies have learned, a large amount of business is driven by the ability to deliver highly competitive and targeted campaigns through connected channels that can be purchased with a simple click of a button.  If CSPs could harness the same capabilities to deliver targeted offers that enable a personalized package and easy operator switching without waiting for a salesperson or needing to visit a physical store.  This would allow a departure from existing models that see phone call sales and in-store interactions. The Office of National Statistics charts this trend accurately year-on-year showing a continued and sustained growth in online sales in the retail sector.

The benefits of going pure digital

The benefits of increasing digitalization go beyond customer experience and affect the very core of business operators and sales methodology. Digital solutions allow for more rapid shifting of data gathering tools, and for that data to be centralized rather than operating in individual silos across different departments within operator businesses. This enables more data to be collected and analysed with the insights available to customer service teams prior to each interaction, and used to personalize the customer journeys in digital touchpoints automatically for superior customer experiences.

It also paves the way for rapid and real-time offers and deals that can be tailored and modulated to match the trends and data that is being gathered on them. A discount offer can be rolled out across all channels rapidly, and altered as needed to match its success and increase its appeal. Feedback loops from the iterations can learn and become more and more precise in hitting the customer needs and drive sales conversion. This is similar to the way that modern digital advertising campaigns change their focus based on incoming data. Data driven sales have proved effective in online retail for years.

One last thing to consider is the future-proofing necessary to ensure that operators keep up with any additional incoming trends in the sector – such as eSIMs. An eSIM will replace the current system where an operator must issue a chip to a new customer in order to on-board them to the network, with a digital system on the device that fulfils the same function. This will be updateable remotely and will allow easy operator switching. To properly utilize this system – something that is highly in demand – digital sales channels are vital. In the future world where customers can even more easily change their operators, the operators with the best, leanest and most customer-oriented digital processes will win.

Digital transformation is a daunting prospect and the challenges are not small. While we can say there are benefits, the drive towards digital transformation goes beyond business arguments. It is instead an inevitability that operators will need to change their business models and systems to meet the challenge of future consumers and their needs. And be prepared for the new breed of competitors emerging for the digital era. Operators that do not make a step-by-step plan and begin these projects in good time risk finding themselves behind the curve and behind the competition.

 

JacoTransp2Jaco Fourie is the Head of Product Management at Qvantel, responsible for planning and implementing product strategy and updates. Prior to coming to Qvantel, Jaco has led in the dual roles of  CTO – Digital Business Systems and acting Head of Portfolio, Strategy & Solutions – Digital Business Systems for Ericsson, defining and implementing overarching architecture principles and frameworks for the Digital Business Systems (OSS/BSS in Telco) area. Before this, Jaco held many other roles at Ericsson, from 1999 to 2014, including  Head of Product Line Revenue Manager, Head of OSS/BSS Architecture & Senior Expert in BSS, Director of Strategy and Business Development, Director of Sales (Central Europe, Middle East, and Africa), and Director of Technology & Business Strategy.