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BSS vendor Openet has published some new research that suggests consumers have a better perception of operators as digital brands than had been feared.
While it should be stressed that Openet, as a digital transformation vendor, has a vested interest in encouraging operators to invest in their digital offering, the research was conducted independently and the results are deserving of consideration on their own merits.
Presenting the findings Openet expressed pleasant surprise at how many positive responses the survey got on the matter of operators as digital brands. Respondents from five countries around the world placed their operator above even Spotfy and eBay when asked to rank bands according to ‘digital leadership’. Meanwhile, as an industry, telecoms was relatively well regarded in that respect too.
The moral of the story, as far as Openet is concerned, is two-fold. Firstly operators should have the confidence to offer a nice lot of digital stuff to their customers, be that through partnerships with the dreaded OTTs or their own innovation. Secondly they should be further encouraged to do so by the latent demand for such products and services, as implied in the slide below, which shows that even respondents to view operators mainly as utility companies are receptive to being offered more.
“To achieve digital parity with many of the world’s most recognisable technology brands underlines the significant progress mobile operators have made,” said Niall Norton, Openet CEO. “The global operator community most certainly had some catching up to do in driving digital awareness and engagement in the face of new competition and approaches.
“Most operators launched strategic digital transformation projects to not only revolutionise how they create, offer and monetise new digital services, but also re-architect their networks. Our study reveals the significant value of these projects, and the exciting commercial opportunities that await them.”
“The global operator community should be congratulated for these survey findings. Many of them have had their world’s turned upside down over the past few years and entered a period of re-education and re-invention. Our survey clearly shows that most have successfully completed a period of digital re-invention to forge new customer relationships according to the same values, albeit across new channels and through new services.
“What is most exciting is that global operators have only scratched the surface in terms of unlocking the full potential of the digital technology that enables these new working practices. Lucrative new revenues await all operators that have completed or are completing their digital transformations – and seeing their CAPEX costs for enabling technology infrastructure slashed at the same time. The game has changed forever.”
Openet has gone all-in on this stuff and seems to be reaping the rewards after a couple of years of difficult adjustment. A focus on both offering operators bespoke BSS offerings and enabling them to offer more relevant stuff to their customers seems to be a t the core of this. Operators constantly fret about the dangers of commoditisation and it looks like there is market demand for them to add value to their core offering. Now they just need find the courage and determination to chase that business.
Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this article, Niall Norton, CEO at Openet, explains why question marks over the operator business case for 5G should be a cause for excitement, rather than concern.
5G is now a commercial reality. South Korea and North America are leading the world in bringing this new technology to market, despite ongoing industry cynicism on the lack of obvious monetizable use cases or supporting business cases. In this respect, 5G is merely following the same narrative that accompanied the arrival of 3G and 4G. The iPhone saved the blushes of 3G, then 4G saved 3G by offering the true mobile broadband capability that 3G promised. The industry was equally in the dark on how ROI would be gained – the networks were built regardless, and the customers signed up.
The truth is, very few can say with any real certainty that they know how they will make money from 5G, or what real consumer intention to sign up will be. But that hasn’t prevented tremendous excitement building for the technology. A recent Telecoms.com survey of telecoms professionals, looking at forthcoming 5G opportunities, revealed that 71% of respondents think 5G will boost ARPU. What’s more, nearly a third think it will be boosted by more than a margin of 10%.
5G positivity is further reflected by the 5G landscape in early adopter markets like South Korea. Just 50 days after its commercial launch in April this year, South Korea announced it already had 600,000 5G subscribers. It now has more than one million registered users. With monthly tariffs starting around the US$40-$50 per month mark, Korean consumers are paying premium prices for what they perceive to be a premium service. In most cases, this is double the current average Korean tariff for 4G and is seeing early 5G users consume more than three times the data. SK Telecom, for one, is trying to push this by creating ‘around 8,000 different content offers spanning UHD video, AR and VR’ to its customers, pushing a strong customer experience improvement message.
This vast number of available offers from SK Telecom for potential new 5G services illustrates how many other operators are likely to monetise 5G. South Korea has always led the world when it comes to mobile technology innovation. They have strong operator momentum behind 5G, with the larger players all launching 5G services concurrently. They also have 5G devices thanks to Samsung and LG, and endless potential content partnerships with global third parties. With so much industry support, and endless possibilities in terms of technology capability, there’s little surprise they can generate so many different offers and create so much choice.
This is precisely where 5G excitement is being generated. The more available offers and services, the more chance at least some of them will take off and enable operators to recoup 5G investments. The same level of choice simply wasn’t available with the advent of 3G and 4G because their limited technical capabilities throttled it. With 5G, operators, OEMs, content providers and ecosystem partners can all hedge their bets more effectively. Furthermore, the operator 5G opportunity goes beyond direct to consumer propositions and spans the enterprise and wider vertical markets, especially with the rise of industrial and enterprise IoT services.
But enabling a wide variety of 5G service choice, across so many sectors and opportunities also has its challenges. If operators are to capitalise on 5G, they need to be fast, agile, flexible and extremely opportunistic. Unfortunately, these are not terms commonly used to describe the BSS solutions most operators are hoping to use to monetise 5G services. I heard one operator recently bemoan the fact it currently takes a month to create a single offer, and get it configured and set up through its existing billing and charging system. By that reckoning, it will take the same operator more than 600 years to emulate SK Telecom’s 8,000 5G offers. Not quite the time-to-market advantage they’ll be hoping for, especially given the anticipated short shelf lives of some proposed 5G services.
Fundamentally, operators need to have the flexibility and the confidence to set up and launch their own 5G offers and have the speed to react to changing market sentiments and conditions. They need to simplify and automate the ‘plumbing’ and reduce the need for additional technical intervention. This is how operators will best plan for the unexpected and maintain strong commitment to offering broad 5G service choice and sustain the excitement that surrounds its potential.
Niall Norton has been Chief Executive Officer of Openet Telecom Limited since September 2006. He served as Chief Financial Officer of Openet Telecom Limited since joining in February 2004. He served as the Chief Financial Officer and Company Secretary of O2 (Ireland) where he was responsible for O2’s financial control functions, business process re-design, strategy planning and wholesale. He also took the lead management role for the Ireland element of the BT Wireless demerger and O2 IPO process. He has been a Director of Openet Telecom Limited since August 2006. Mr. Norton holds a degree in Commerce from University College Dublin and is a Fellow of the Institute of Chartered Accountants in Ireland.
In responding to a recent Telecoms.com survey, over 400 industry professionals have expressed cautious optimism about 5G. They are eager to see the potential of 5G be fully realised, both in the consumer market and the industry market. Meanwhile, they also appreciate the challenges lying ahead in both business operation and technology.
This report summarises the key findings from the survey, analyses the implications of them, and highlights a number of questions for the stakeholders of the industry to consider.
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Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this article, Martin Morgan, VP Marketing, at Openet, considers the latest move from Ofcom in forcing UK operators to tell their customers when their contracts are ending, and points out why it is a blessing in disguise.
UK telecoms regulator Ofcom recently announced that it is to introduce rules to ensure broadband, TV and phone operators tell their customers when their contracts are coming to an end. This is intended to prevent consumers rolling back into largely uncompetitive ‘standard’ tariffs without them knowing. According to Ofcom, this practice typically sees UK consumers paying 20% more for the same service received during the initial term.
The end of consumer inertia?
Consumer inertia has always existed, across all industries in all countries. The fact remains that it is always easier to do nothing at the point of renewal, rather than shop around for the best deal. Times are changing, however. Telecoms operators, much like utility companies and financial services providers are having to endure consumer facing product comparison websites, a rise in third-party digital switching companies and generally, a greater consumer awareness of new offers. The truth is, it has never been easier for UK consumers to find and take a better deal from elsewhere. With Ofcom now forcing telecoms operators to tell customers it’s time to renew their tariffs, a lack of awareness will no longer be an obstacle to ‘shopping around.’
UK telecoms operators must embrace this significant opportunity. They must use the data they have on their customers to create targeted and personalised offers to them as renewal time approaches. If Ofcom forces operators to share the best deals available to their customers at the point of renewal, then this should be treated as the final link in the chain to encourage retention. The fact remains, operators will have a long window available to them, and have an individual usage and preference perspective on each customer that the competition won’t. This creates a significant window of opportunity for an operator to convince their customers that they truly value their business.
Coming out of the shadows
Telecoms operators in general have struggled to maintain brand awareness in recent years. Much has been said about operators being forced to accept utility-like status in the minds of their customers. Content providers, social media providers and OTT messaging communities hold most of the cards when it comes to mobile consumer engagement, with operators becoming an increasingly invisible part of the service value chain. This is incredibly surprising given that operators enjoy a regular monthly billing relationship with their customers, when most others don’t.
UK telecoms operators, much like their global peers, are looking to build or strengthen a series of partnerships with well known brands, to try and boost customer engagement and position themselves as the 5G operator of choice. These partnerships will include teaming up with content providers like Spotify, Netflix and Apple Music. They will include device partnerships with the likes of Apple and Samsung and, also include deals with the social media networks too. These partnerships will create differentiation but knowing where best to target this content and these services will be critical to drive the required levels of customer satisfaction and retention.
The technology exists to act
Operators have the data and the means to focus these offers to the right users at the right time. What is more, thanks to the agile and flexible nature of digital BSS technology, they can be quick to trial new offers, should some not have the desired impact at the first time of asking. Ofcom’s new rules will present UK consumers with more choice, while placing them in a buying mood – UK operators know exactly when this will take place for every one of their customers. Every customer that churns will herald a failure for operator marketing teams and underlying digital BSS technology. The solutions are available to help UK operators prevail. They must react positively to Ofcom’s rules and quickly, if they are to take full advantage of the enormous opportunity facing them.
Martin Morgan is the VP Marketing at Openet. With 30 years’ experience in mobile communications software, Martin has worked in mobile since the early days of the industry. He’s ran the marketing teams for several BSS companies and served on trade association and company boards. In that time, he’s spoken at over 50 telecoms conferences worldwide and had a similar number of articles published in the telecoms trade press and served on trade association and company boards. At Openet Martin is responsible for marketing thought leadership and market interaction.
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.
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.
“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.”
Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Martin Morgan, VP Marketing at Openet, reflects on what a recent survey tells us about the telecoms industry’s progress towards digital transformation.
Digital transformation is throwing a spanner in the works for telecoms service providers. There has never been more pressure on operators to change and evolve into agile, flexible, providers that can meet increasing consumer demand for more data, more content and more services. Most service providers have started on their digital transformation projects for this very reason – but there is still a long way to go and a lot to play for.
In its annual industry survey Telecoms.com Intelligence revealed that digital services revenue could reach $462 billion in 2022, up from an anticipated $294 billion in 2019. Yet despite this huge revenue opportunity, operators are still some time off from monetizing new digital services, with the survey revealing that in 2022 the majority of operators will only be halfway along the digital transformation “journey”. With this clear gap in digital transformation progress and future revenues, how can service providers evolve in a way that will allow them to plug into digital services of the future?
Understanding the opportunity
Digital transformation is everywhere, and today, it permeates every aspect of telco operations with many service providers placing efforts on tackling it. The good news is that many service providers have already embarked on their digital transformation projects, and are already starting to benefit from the new revenues generated by digital services. But progress remains slow. According to telecoms.com, the majority of service providers will only consider themselves a third of the way into their digital transformation journey by 2019. That’s not very far ahead at all, and considering the work that still needs to be done to ensure service providers can capitalize on new revenue opportunities, it’s evident that a change is required to speed things up.
It is critical that service providers seize the opportunity to change now. The speed at which the industry is evolving means transformation is no longer a ‘nice to have’ option, but rather one of survival. As shown by the telecoms.com Intelligence survey, the future of service provider revenues lies in digital services, with enterprise IoT, smart home and consumer IoT anticipated to be the biggest revenue earners in the coming few years. Unlocking the potential of these new digital services will only happen if service providers can succeed in their digital transformation efforts.
As with most things, digital transformation is easier said than done. With service providers citing insufficient business cases, general inertia, over-reliance on legacy systems and CapEx constraints as the top 4 obstacles to digital transformation, it’s clear to see that service providers’ challenges are varied and multi-faceted.
Making OSS/BSS the solution, not the problem
The telecoms industry is filled with dos and don’ts when it comes to digital transformation, with different experts voicing different opinions about where operators should start. Unfortunately, no one has yet come up with a definitive answer, but industry associations such as TM Forum are placing a huge emphasis on the importance of upgrading legacy OSS/BSS if organisations are to become ‘digital-ready’. OSS/BSS is critical to enabling fast time to market and gives service providers the ability to try out new business models, at a much faster pace and lower cost than existing systems. This is a crucial element of digitization – service providers simply cannot afford to go at their current pace if they are to manage increasing mobile data and subscriber demand for an enhanced user experience.
Much like the concept of digital transformation, upgrading legacy OSS/BSS is no easy feat. According to telecoms.com, almost 60% of service providers are only 40% along their BSS/OSS transformation journey. When it comes to refreshing OSS/BSS a lot of work is yet to be done. With many of these systems dating back to the 1980s, it is no surprise that they have become ill-fit for purpose. So when it comes to upgrades and transformation, which methods should service providers adopt?
When asked which approach they favoured, the majority of service providers agreed that a ‘big bang’ approach – whereby legacy systems are swapped out for digital systems in one large project – is the worst approach to OSS/BSS transformation. This is unsurprising given that McKinsey, Forbes and telecoms.com all report that the failure rate of large scale transformation projects is at approximately 70%.
Instead, service providers favour a more pragmatic approach. In joint second place was the greenfield and add-on systems approaches, which both received scores of 3.44 out of 5. A greenfield approach allows service providers to add new digital systems to support new lines of business such as IoT or second brands, while an add-on systems approach enables service providers to add on new digital systems as an overlay to existing legacy systems. This then allows service providers to phase out their legacy systems gradually.
The most popular approach to legacy system upgrades was the phased systems method, whereby service providers take a step-by-step approach to replacing legacy solutions with digital solutions. While there will never be a one-size fits all approach to transformation, it’s clear that pragmatism wins here. These approaches minimize disruption and also allow service providers to reduce and maximize the cost spent on transformation. With service provider margins increasingly slim, the prospect of financial cost savings and minimal disruption is a welcome sign.
While many service providers today have a clear understanding of digital transformation’s ultimate goal, the reality is that digital transformation is a continuous journey. Service providers will never be finished with it – it will continuously require new thinking, new advances, change and adaptation. Service providers thinking of digital transformation as a finite journey will struggle to measure their organisation’s success as they focus their aims on an unachievable digital transformation utopia.
Digital transformation represents major upheaval – and even inconvenience – but without it, service providers won’t be able to keep up with the pace of change. They must transform to survive, and that starts within their organisations – with their culture, their processes and their existing network infrastructure. But adopting the right approach is key and service providers need not make digital transformation scarier than it already is by embarking on large-scale, lengthy transformation projects that reap few rewards. It is only through the adoption of a tactical, pragmatic and step-by-step approach to transformation that service providers will be able to evolve and, ultimately, start monetizing the multi-billion digital services revenue opportunity.
Martin Morgan is the VP Marketing at Openet. With 25 years’ experience in mobile communications software, Martin has worked in mobile billing software since the early days of the industry. In that time he’s spoken at over 50 telecoms conferences worldwide and had a similar number of articles published in the telecoms trade press and served on trade association and company boards. At Openet Martin is responsible for marketing thought leadership and market interaction.
Welcome to the 2018 edition of the Telecoms.com Intelligence Annual Industry Survey report. The findings from our signature survey continue to provide insights and foresight into the dynamic telecoms industry.
Once again well over 1,000 industry professionals from a broad array of backgrounds responded to the survey with their first-hand experience as well as their perspective views on the current status and future trends of the industry. As our customary practice, the report started with an overall industry landscape before we delved into six key areas pertinent to today’s telecoms industry: NFV, 5G, IoT, Digital Transformation, Security, and Test & Monitoring.
A few key findings from the survey:
- 75% felt positive about the telecoms industry’s business outlook for 2019
- 79% believed NFV is critical to their companies overall strategy
- 61% believed emerging technologies and services are critical to telecom’s long-term success
- 75% saw digital transformation as very important
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Now with added video!