 | Issue: | Asia-Pacific II 2007 |
| Article no.: | 7 | |
| Topic: | Keeping the first billion | |
| Author: | Minesh Patel | |
| Title: | Executive Vice President, Operations | |
| Organisation: | Axiom Systems | |
| PDF size: | 296KB |
About author
Minesh Patel is the Executive VP of Operations for Axiom Systems and is responsible for defining and delivering the company’s sales strategy and overseeing alliances, including the recruitment of partners to enable indirect sales. Prior to joining Axiom Systems, Mr Patel was responsible for Alliances at Micromuse. Prior to Micromuse, he worked at Oracle in various roles, including Head of Presales and Product Management for its ERP practice and building the company’s BSS and OSS solutions.
Article abstract
Facing competition, keeping customers and growing is a challenge for mobile carriers the world over. As rates go down in response to competition so do revenues. To build revenues carriers need to innovate and offer a growing menu of value-added services. With current systems, mobile carriers find rapid innovation is all but impossible. An industry group, the Product and Service Assembly Initiative, PSA, seeks to define a telecom architecture to simplify the creation, assembly and provisioning of new services.
Full Article
These are not easy times for telecom carriers. As the global mobile market matures, the challenges are no longer those of driving subscriber numbers or building out the network – those were simpler times. In many markets, mobile penetration is reaching saturation. Having conquered the first billion, how will carriers keep them? Carriers today fight tooth and nail to draw new subscribers and to keep current subscribers happy… or at least content. Neither task comes cheap. With increasing competition driving Average Revenue per User, ARPU, down, the margins are thinning. Churn is on the rise, and in markets such as Japan, Singapore and Malaysia, where plans for number portability have been mooted, churn numbers are expected to grow exponentially. Today’s carrier is besieged on all fronts, and there are no simple answers to getting back on top of the pile. In the competitive environment of this next-generation telecom industry, the clarion call is for carriers to innovate or face irrelevance. The carrier has a few avenues in which to differentiate through innovation, but none are quite as critical as the conception, assembly and delivery of Value Added Services, VAS. Mobile handsets are now nearly ubiquitous in many markets, and the expectations of the customer are moving beyond the simple delivery of voice services. They want more, and services like Short Messaging Service, SMS, Roaming Services and Push Mail have helped carriers shore up falling revenues. Such services have since been universally adopted across the industry and are quickly becoming commoditized. The lifecycles of VAS are growing shorter and the pressure is on to push more customized, personalized applications to market, quickly and efficiently. Today, the time to market for a new VAS can take as long as 18 months, due to delays between service conceptualization and realization. In a fast-paced, highly competitive environment, 18 months is unacceptably long and represents significant loss of potential revenue. In that time, the VAS can be rendered irrelevant, or trumped, by a competitor. In order to compete effectively in the services space, the time to market must be reduced to weeks or even days. The problem of long gestation cycles lies in the current state of a carrier’s infrastructure. Each carrier’s infrastructure is a labyrinth of different interconnected systems. These systems operate and are administered independently in a tightly coupled stack. Services are created by bundling the available features from any number of these systems, like forming a structure out of building blocks. For a carrier to alter or deploy a new service, the application must be custom-written to tap each required resource. New components need to be deployed or developed, all without bringing the existing structures crashing down. The entire process is a complicated exercise in trial and error, not unlike duct-taping pieces together and then trouble-shooting each element until a satisfactory result is achieved. If this process seems unduly archaic, that’s because it is. The knowledge of service creation and bundling, or intelligence, is currently spread across the Operational Support Systems, OSS, and Business Support Systems, BSS, within the carrier infrastructure. This infrastructure represents a major investment of time and dollars, and rip-and-replace modernization is unthinkable. Yet the problem of managing complex and disparate systems is not unique to the telecoms industry. The technology industry has long since addressed these issues in its own infrastructure, and its successes present a way forward for carriers. Carrier infrastructure stacks are not unlike thick IT infrastructure stacks. These thick stacks are self-contained and retain too much intelligence, making it difficult for them to get along with other parts of the infrastructure. Service Oriented Architectures, SOA, are designed to strip the intelligence from the individual components and centralize the administration of the entire infrastructure in a simpler management interface. This is the future of carrier architecture – a software layer that sits on top of these different components, software that possesses enough intelligence to take inventory of all available resources. In this way, the different stacks within the carrier are decoupled, componentized and exposed to a centralized administration module. Being able to view and manipulate infrastructure components at a macro level is a key enabler of reducing time to market and the costs involved in creating new services, and a vital step in narrowing the gap between the personalization and delivery capability of the carrier and customer expectations. The second step of this transformation is in the creation and assembly process. Borrowing the Product Lifecycle Management, PLM, philosophies from the manufacturing industry, carriers will ultimately have modelling tools such as Computer Aided Design, CAD, and Product Data Management, PDM. These tools will allow carriers to create service offerings without intimate knowledge of the underlying architecture. Services can be conceptualized and designed independent of the disparate blocks, while the mapping and requisitioning of necessary resources and interconnections will be automated in the back end. With both elements in place, simple services can be conceptualized, assembled and delivered in days, while more complicated services involving more of the network’s resources can be turned around in months, or even weeks. Carriers today each provide a handful of service offerings that leverage off several dozen network resources. With the complexity and cost inefficiencies of the network reduced by automation and planning tools, these carriers will have the potential to roll out literally hundreds of services with greater speed and at better margins. Personalized services become a more viable means of differentiation in the increasingly commoditized marketplace. Realizing this vision is the goal of the Product and Service Assembly Initiative, PSA – www.psainitiative.com. A problem-solving collaboration, the PSA is a vendor-agnostic body that seeks to understand and define better a telecom architecture that will simplify the creation, assembly and provisioning of new services by:- – Increasing the visibility of the service and network; – Identifying the bottleneck in the creation and assembly of new services; – Bridging the service assembly gap between back and front offices; – Reducing the time to market for new services; and, – Reducing the cost of product and service production. Formed in the last quarter of 2006 by several of the leading technology and telecom companies, the initiative has already won some early converts. Initiative sponsors now include industry heavyweights such as Atos Origin, Axiom Systems, British Telecom, Cable & Wireless, Convergys, Huawei, Microsoft, Oracle, QinetiQ, TeliaSonera and Tibco. While many Asia-Pacific markets have not yet crossed the 80 per cent penetration mark in mobile adoption, Asia-Pacific carriers have been watching the developments in mature markets and are already preparing to jump the hurdle of keeping their customers engaged. This is evidenced by the curious growth momentum in 3G, despite the lack of compelling 3G mobile applications and services for consumers. These will come eventually but when they do, both the carrier and its customers will be ready. With a steadily growing base of mobile broadband subscribers, a largely untapped or underserved VAS market and strong, sustainable regional economies, things might not be so bleak for the Asian carrier after all.
