Tim Porter Issue: EMEA 2009
Article no.: 8
Topic: Broadband profitability and control of revenue content and services
Author: Tim Porter
Title: Vice President EMEA,
Organisation: Oracle Communications Global Business Unit
PDF size: 520KB

About author

Tim Porter is Vice President of the EMEA region for the Oracle Communications Global Business Unit. Mr Porter joined Oracle through the Portal. Mr Porter had been with the Portal, initially as the Global Vice President for Vodafone, before embarking on his current role. Based in the UK, he is responsible for Oracle solutions in the Billing & Revenue Management, Operational Support Systems and Service Delivery Platform areas for regional & global telecommunications, media and content service providers. Mr Porter has a wealth of experience in the telecoms, utilities and software industries. Throughout his career he has been involved in sales, delivery and business management roles and worked in various organisations including Digital Equipment, IBM and Sema Group plus a previous period with Oracle. Tim Porter also held a commission in the Fleet Air Arm and played Rugby Union and Rugby League at a high level. He has a degree in Social and Political History and an MBA.

 

Article abstract

Broadband gives operators direct access to customers and enables rapid delivery of new applications and services. Regardless of bandwidth, an operator’s success resides in its ability to provide reliable access to services and learn how to monetise them effectively. Increasingly, third party developers and partners are launching new applications and services over carrier networks with little monetary benefit to the operator. Nevertheless, operators can take steps to ensure their infrastructure can effectively monetise new services and avoid missing valuable revenue.

 

Full Article

Since early 2000, the advent of broadband Internet has provided faster download speeds, exponentially increasing the business opportunities offered by the Internet. No longer faced with slow and costly dial-up methods, for the first time users could download vast quantities of information, faster and at significantly reduced cost. Furthermore, the development of WiFi meant the Internet was no longer confined to the home, but capable of servicing the needs of an increasingly mobile society, whose appetite for information on the move continues to grow. As a result, WiFi and broadband have become integral to economies across the world and many governments have adopted measures to drive forward the connected economy. In the UK, the Prime Minister in recognition of the importance these sectors have on the UK economy and society created the role of Minister of Communications, Technology and Broadcasting. The Minister’s recent Digital Britain1 report, found that in the UK the information and communications technologies and broadcasting industries together account for 5.9 per cent of Gross Domestic Product, with a turnover of over £52 billion a year and an employee base of half a million people. There are wide ranging reasons people utilise broadband and WiFi. As operators worked to keep up with growing demand for information, so vital to fuelling a healthy economy, people realised the revenue-generating potential this access to end users provided. As such, creation of content in the form of new applications and services by third party developers and partners has increased. The charges levied on users for downloading and using these applications has significantly boosted the levels of data traffic across the networks. Acquisition and infrastructure Operators have been focused on developing their triple-play, quad-play and now fixed-mobile convergence offerings to provide complete packages to end users. The ability to offer customers broadband Internet, television and telephone with wireless service is vital to attract and retain customers by providing them with attractive, well-rounded packages. Furthermore, the ability to deliver various forms of content to end users via these services is essential to differentiate operators from their competitors and attract third party developers and partners. Many service offerings, however, were realised through acquisition rather than organic growth; consequently, operators fended up with a mish-mash of custom-built technologies for each part of the business. As developers and partners began to create and charge users for content, operators could no longer properly assess how these applications and services were being received by their customers. Because they could not evaluate which applications and services were the most profitable, they could not maximise potential revenue. The different platforms in each division, inherited from acquired companies, made it difficult to automatically take a slice of the revenues generated by third party applications and services; analysing and allocating revenue streams to each stakeholder was time consuming and costly. Essentially, many operators found that although their acquisition strategies let them offer new services, the accompanying, disparate systems, hindered their ability to collect revenue from them. Operator challenges The impact of acquisitions is but one of the challenges operators need to address before moving on to the important issue of monetising services more effectively. As demand for new applications and services increase and higher capability handsets, PCs and other electronic Internet-enabled devices become the norm, strain on the networks will increase. Operators need to attract and retain customers with lower tariffs and ‘all-you-can-eat’ data packages, but if current networks cannot meet demand, it will lead to decreases in quality of service, customer satisfaction and lost business. This can be seen in the US with AT&T’s ‘all-you-can-eat’ data subscription2 for Apple iPhone subscribers. The resulting downloads are using vast amounts of network capacity, and with the ‘all-you-can-eat’ tariff, AT&T is seeing very limited returns. Considering the number of other handsets with similar abilities that AT&T subscribers have, AT&T might not be able to handle the demand should these subscribers also decide to utilise these capabilities. As greater numbers of subscribers begin to use the features of their increasingly common smartphones, other operators will also see strains in their network capacity. Taking AT&T’s experience into account, operators worldwide will need to anticipate the problems and address them beforehand. Providing customers with enough bandwidth should be a prime concern since all else is based upon this. Fundamental to addressing these problems, is the ability to identify customer preferences – which services are in greatest demand and those that are not. Other important questions are how to curb excessive network usage by those with little need for it and how to efficiently manage those who do require it, to ensure they get the quality of service they need. By getting a handle on these issues, operators will be able to manage their services more effectively and safeguard quality of service for all customers. The three pillars In order to overcome these issues, operators need to align their IT requirements to their business needs and focus on three pillars – delivering rapid service innovation, customer intimacy and operational excellence. Customer intimacy – Understanding the customers’ needs, and which services will gain traction, enables operators to develop more profitable services and applications that yield the greatest return on investment. With customer relationship management software, capable of drilling down into their databases and removing the data silos, operators will gain an accurate view of their customers’ tastes, general usage and spending patterns. With access to this information across the entire customer base, operators will be able to understand which type of customer uses which services and determine which services and applications are most profitable. With a clear view of its customers, an operator can use this information to drive how it interacts with customers and the new products and services it offers them. By integrating this information into other systems such as billing and revenue management, operators can improve time-to-market for new services, manage and monetise different revenue streams, automatically process payments to ensure all stakeholders get their share of the revenue and lower overall operational costs. Rapid service innovation – The right infrastructure can help a business understand its customers and bill them effectively; this is essential to survival in today’s competitive market. Equally important is the ability to provide customers with up-to-date and cutting edge services. Service delivery platforms (SDPs) make rapid service innovation possible. SDPs integrate CRM and billing applications, providing operators with the ability to rapidly deploy next generation services, assess the customers’ uptake of them, and automatically bill for usage through an end-to-end streamlined process. Competition is very fierce in the telecoms market; new players come and go very quickly. A recent example of this was GO Atheeb, a new Saudi Arabian operator that implemented software to automate, manage and support the provisioning of its residential broadband and WiFi services in Saudi Arabia. The company needed to be up and running, from scratch, within six months and used a combination of various billing and revenue management, CRM and service activation software to achieve this in the aggressive timescales set. Operational Excellence – In addition to understanding customers and achieving rapid delivery of new and high quality next-generation services to market, operators need to deliver these at lower cost to the business. Operators rely on their ability to deliver quality services to customers; however, without the right systems in place to support these services, much of the value will be lost. To prevent this from happening operators need to have an infrastructure equal to the task of cost-effectively supporting these services, taking into account their IT, business support systems and operations support systems. With revenue consistently under pressure due to the economic slowdown, increased competition and the need for competitive pricing, the cost structure needs to adjust to maintain bottom line profitability. Without the right technology to help, operators will find it difficult or impossible to reduce service costs adequately. Given how broadband and WiFi have become embedded in the everyday activities of consumers and businesses alike, the operators’ potential earnings through effective monetisation of applications and services is staggering. Attention to these three pillars gives operators a powerful way to address many of the important issues they face in today’s economic climate. Not taking advantage of this potential could have serious consequences for operators as increased capabilities at reduced rates lead to over-usage and continued strain on networks as they develop. Broadband has the potential to generate even greater revenues that many operators did not take full advantage of in the past, giving third party developers and partners free reign. Ensuring the technology is in place to underpin billing, CRM and rapid service delivery, operators can more effectively monetise their complete portfolio of offerings, increase their earnings and ensure a competitive market advantage.