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.

Will Vodafone usher in a new culture of customer service for telcos?

Either customer service is an afterthought for the telcos, or they are just genuinely terrible at it, but Vodafone’s new 30-day service guarantee sets to challenge the status quo of sub-standard service in the telco arena.

For new or upgrading customers, a 30 day trial period will be offered allowing consumers and small businesses the opportunity to cancel contracts without penalty if they are not totally satisfied with coverage, customer service or the performance of a new device. While coverage will be put to the test on a network which has had mixed reviews over the last few years, the focus here seems to be geared towards customer service. Areas which will come under the microscope include Vodafone’s 24/7 customer care, AI customer service chatbot, TOBi, the human customer service agents, biometric voice-recognition software and the effectiveness of the in-store tech team.

“We’ve been listening to what our customers want and over the last year have worked tirelessly to introduce new technology and initiatives to help us deliver great customer service,” said Nick Jeffery, CEO at Vodafone UK. “Now we’re backing our big improvements with a big promise – try us for 30 days and if you’re not impressed, you’re free to walk away.  No penalties, no ifs, no buts.”

While this is a promising step forward, whether it will have a lasting impact on the telcos depressing reputation for customer service remains to be seen. Considering the past experience of the telcos, stepping into the firing line is certainly a brave move for Vodafone.

In a recent survey from Which, Vodafone ranked bottom of the list for customer service satisfaction scores. This might be a damning reference for the telco, but it should be worth noting the other network owners scored pretty shockingly across the board. Vodafone scored 49%, while EE was the next worst with 56% and O2 as the fourth worst in the UK with 58%. Three fared better with 64%, though the top ranking spots were all taken by MVNOs.

This is not the first time telcos have been singled out for poor customer service, as it has been a pretty common story over the last few years. It does appear the telcos give little concern to this aspect of the business, perhaps due to the limited number of providers in the market, and the critical importance of connectivity in today’s society; if everyone is bad, the consumers will have little option but to accept the status quo, as going without is not an option.

Customer service has never really been a selling point for the telcos, but perhaps this is the kick-start which was needed. All you can eat data packages weren’t common place in the early days, though Three challenged the industry and forced the hand of competitors, while the same could be said of all-inclusive calls and SMS. Evolution of services doesn’t seem to be an accepted term in the telco space, usually it requires disruption for any notable changes to benefit the consumer; perhaps Vodafone breaking rank might spur the cumbersome industry into action.

Vodafone has certainly been re-evaluating the business in the last 12 months, and now it seems to consider itself in a position to tackle the UK’s leading telcos. It’s always amazing to think Vodafone was once the leader in the UK market, though with a new mindset in customer service, new spectrum for mobile and a new partnership with CityFibre to tackle the broadband market, it is shifting itself into a promising convergence position.

Bringing BSS/OSS into the new age – it’s now or never

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Tony Gillick, VP Solutions Management at Openet, urges the industry to transform its approach to BSS and OSS before it’s too late.

TM Forum’s recent launch of its Open Digital Architecture is good news for the industry. It captures a lot of the good work that has already taken place and sets out a blueprint for the digital transformation of BSS and OSS.

Today’s service providers know they need to change if they are to keep up with the pace at which the industry is moving. But with ever-decreasing ARPU, and the race to free data underway, they don’t have the luxury of embarking on lengthy, hugely expensive transformation programs to get their BSS and OSS stacks up to speed. Instead, they need an API-driven open architecture that enables them to get away from vendor lock-in and having to deal with inflexible, large vendors who will deliver projects and upgrade software on their terms.

The bleak reality is that if operators are to survive in the face of rising competition from web-scale companies, it’s now or never to make that change happen, so what does that look like for operators willing to transform?

Become the model for change

BSS/OSS have been around since the start of the cellular business in the 1980s, and that’s where the problems begin for today’s operators. Throughout the years, operators have built up a complex burg of legacy systems and processes, which are not only no longer fit for purpose but also nothing short of a nightmare to overhaul.

For operators, transforming OSS/BSS begins in two ways. First, with overhauling traditional commercial models, which have become slow to move and very inflexible. These commercial models are no longer fit to serve the agile world in which we live, one where subscribers want everything now, on-demand.

Today’s operators need new commercial models that are driven by short-term goals and that do away with the old, lengthy, never-ending service contracts that look at transformation projects over several years, instead of months or even weeks.

The second way in which transformation can happen is through new delivery models. It’s no secret that web-scale companies’ agility is beyond that of operators. But this need not be the case; by harnessing new processes and technologies such as DevOps and microservices, operators can replicate the agility of Internet companies. It is only through this open, innovative and experimental approach that operators will start to compete with the big OTT players.

By overhauling commercial and delivery models, operators will not only be able to boost their rate of innovation, but they’ll also see the industry-wide issue of vendor lock-in disappear. As the industry moves towards open technologies which proliferate the use of DevOps and Open APIs, fewer vendors will be able to tie down operators to lengthy contracts that provide little in the way of innovation and experimentation.

Setting operator priorities straight

But making change happen isn’t just about technical capabilities, it also requires a shift in mind-sets and priorities, particularly when it comes to the deployment of new services such as 5G and IoT. Although the race to 5G is well and truly on, the state of affairs for operators today implies that perhaps it shouldn’t warrant such urgency.

Operators’ resources are stretched and, where subscribers are concerned, the pressure is on to be better and do better – this means, selling a wider variety of personalised digital services. While 5G and IoT will undoubtedly bring about a wealth of applications that will benefit operators, neither of these technologies will bring about immediate ROI. It’s important, therefore, that operators invest their efforts in laying the foundations to not only ensure their survival today, but to be able to support the technologies of tomorrow, and that starts with changing the way they approach OSS/BSS.

A greenfield approach to OSS/BSS

Adopting the correct technologies will be the key to unlocking the OSS/BSS treasure chest. Operators should approach transformation with a greenfield attitude – that is, to start afresh, with no legacy systems or culture and to adopt a “digital first, customer first” approach. And this does not mean that existing large-scale transformation projects should be abandoned, instead, new greenfield approaches mean operators can run these in parallel to the current legacy stack being transformed.

This greenfield approach promotes the switch from hardware and software stacks to real-time, automated digital platforms. These digital platforms can see operators launch services in as little as 14-weeks whilst still going ahead with their longer-term transformation projects. By using these platforms, operators can leverage a modular, API-driven approach and select which service or “platform component” they need, on an ad-hoc basis. This promotes faster service delivery but also reduces the cost attached to digital transformation.

Most importantly, this open, best of breed, platform approach is the antithesis of big vendor lock-in. By drawing on open technologies, promoted through the use of open APIs, operators will be better suited to encourage partnerships and the collaboration and sharing of technologies within these. Not only will this reduce OSS/BSS cost and implementation timescales, it will also prevent mega-vendors from selling services from a single supplier.

Ultimately, it is this openness that will promote innovation in the telecoms industry and that will see OSS/BSS become the systems operators need to succeed in this ever-evolving, digital world.

Digital Transformation: just a bump in the road

There’s no doubt that digital transformation is hard, and it’s clear that few operators know where to begin. But the solution lies in this greenfield attitude; by starting anew, with no pre-conceptions or notions in mind, operators can leverage experimentation to roll out new services that may have otherwise taken years to deploy.

It is this provision of tools – namely the platforms, new technologies, APIs – by vendors that will encourage operators to innovate, and will see the challenges associated with digital transformation soon fade into the telco past.

 

openet-Tony-GillickTony is VP Solutions Management at Openet. He’s been designing and deploying BSS for over 15 years and is responsible for direction and deployment strategy for Openet Digital Business Platform.

London welcomes buskers to the digital revolution

Moving into the connected era has threatened the livelihoods of numerous individuals, but a new initiative from Busk In London and iZettle, backed by London Mayor Sadiq Khan plans to bring buskers into the digital economy.

Just like pigeons and pretentious coffee shops, buskers have become a staple of the worlds’ biggest cities, but like checkout employees in the supermarket, their very existence has come under threat. The connected era is all about digital payments and moving towards a cashless society, meaning the fame-chasing buskers were under threat of become penniless. This initiative, launched by Khan over the weekend, will aim to put contactless payment terminals in the hands of the performers.

A small number of performers have been testing the solution over recent weeks, though the scheme will now be rolled out across the 32 Greater London boroughs. The readers will need to be connected to a smartphone or tablet, while the donated amount will be fixed by the performer, and will be compatible with contactless cards, phones, and smartwatches.

“Now, more Londoners will be able to show their support to the capital’s brilliant, talented street performers,” Khan said.

The devices themselves will be provided by iZettle, which seems to have a head-start on Square in this area, though it is not clear whether the performers will have to pay for them up-front. Such devices are becoming more common for small businesses or street vendors, with PayPal recognising the potential for the technology. Last month, the tech giant agreed to acquire iZettle for $2.2 billion, allowing it to expand its presence in in-store payments globally.

Although there are still segments of society who are clinging onto physical cash, trends are heading down the digital avenue. According to data from Visa, contactless payments for transit and Transport for London (TfL) was up 97% over the last 12 months, while in Hong Kong transactions have tripled in the past 18 months, with one in three face-to-face Visa transactions is made via a contactless payment today. Canada is another country streaming ahead of global trends with Visa’s network processing 33 contactless transactions per second in the month of September.

Telefónica lures Netflix into its content aggregator platform

Telefónica and Netflix have jointly announced a global partnership which allow the telco’s customers to watch the popular streaming service through its content platform.

As part of the deal, integrate Netflix’s service into Telefónica’s TV and video platforms across Europe and Latin America, while also allowing customers to pay for the service as part of their monthly Telefónica bill. The first launches will be in LATAM over the next couple of week, while the plan is to launch in Spain towards the end of 2018.

“This agreement is a big step forward in Telefónica’s bet on open innovation and collaboration with leading companies around the world,” said José María Álvarez-Pallete, Chairman of Telefónica. “We want to offer our customers the most compelling video offering possible, whether it’s our own content or third party providers. The partnership with Netflix will significantly enhance our existing multichannel video platforms.”

“Over the next several years, our partnership with Telefónica will benefit millions of consumers who will be able to easily access their favorite Netflix shows, documentaries, stand-ups, kids content and movies across a range of Telefonica platforms,” said Reed Hastings, Netflix CEO. “Making Netflix available on Telefónica’s familiar, easy-to-use TV and video platforms enables consumers to watch all the content they love in one place.”

The aggregator strategy is perhaps the most logical way for telcos to make any meaningful impact on the content world, a key prong as the businesses search for the much lauded convergence business model. While it might seem like an attractive idea to own content or chase lucrative rights deals, realistically, the traditional telco business model does not lend itself suitably to the content industry.

Owning the content space, like Netflix in the streaming world or Sky in the UK’s pay TV market, is a different approach to business. It requires undertaking a greater level of risk and offering creative individuals the opportunity to make decisions which might not sit comfortably with everyone. It also requires agility, relationships with the production industry and a more extroverted brand. When you consider these factors, telcos are not set up to launch an assault on the content space. It is also a time consuming job.

Looking at the BT content platform, the sports feature was attractive to customers, but some might argue the lack of supporting content in other genres frustrated customers. Building the entire content package, like Sky has for instance, takes a lot of time, considerable effort and notable investment. BT’s lack of depth in it content offering is starting to show, as subscribers start moving towards the exit.

That is not to say the telcos will not be able to compete in this segment, however transforming the business will take time and the content revolution is here right now. The consumption of content is changing drastically, shifting towards mobile, presenting a notable opportunity for the telcos. Telcos don’t have to own content, but they can own the relationship with the consumer, who is increasingly becoming frustrated with the increasingly fragmented distribution of video. Aggregating all this content into one space is a logical way which the telcos can add value to the content ecosystem.

The telcos have arguably perfected the billing relationship with the customer and offer a non-intrusive way to put content in-front of the user. Minimising the number of bills would also be an attractive idea to the consumer, while simultaneously increasing the ‘stickiness’ of the telcos. Negotiating the relationships with companies like Netflix, will be a time consuming process, there are so many of them after all, but it is an excellent way for the telcos to stay relevant and avoid the dreaded tag of utility.

Ericsson urges CSPs to be less touchy

Telecoms vendor Ericsson has been looking into how CSPs interact with their customers and reckons they take too long to get stuff done.

It’s a good day for CSP top tips and it seems likely that a healthy proportion of subscribers would agree that their interactions could be significantly improved. While operators have already identified customer service as a priority, it seems progress may not have been as rapid as they’d hoped.

According to Ericsson’s Consumer & IndustryLab Insight Report, a typical interaction between subscriber and CSP takes 2.2 attempts and 4.1 days to complete. While we may have become conditioned to such glacial progress when trying to get things done, there seems to be a clear opportunity for CSPs to pleasantly surprise their customers by not being rubbish.

“Consumers believe telecom service providers treat touchpoints like isolated interactions,” said Pernilla Jonsson, Head of Ericsson Consumer & IndustryLab. “Siloed focus means they miss the bigger picture. Interestingly, telecom service providers could leapfrog one-click and move from multiple-click to zero-touch by deploying future technologies in their customer offerings. The zero-touch customer experience report shows that zero-touch experiences are now an expectation of their customers.”

While it’s hardly surprising that a telecoms vendor should recommend their customers spend more money on new technology, Ericsson may also have a point. The proposed technological solution involves lashings of artificial intelligence and analytics. This mainly involves anticipating their every need and satisfying it in advance and the ‘zero touch’ thing seems to refer to alternative UIs such as voice.