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    Europe slowest to recover from roaming dip


    Data services and interoperability hold the key to recovery

    Europe is showing the slowest recovery from the slump in roaming traffic that began in the middle of last year, and continued through the first two quarters of 2009, according to Tony Holcombe, CEO of Syniverse, a messaging and roaming hub provider that interconnects traffic between operators.

    “February 2009 was bad, about as bad as it got. We had seen roaming data collapsing from about August 2008. It has recovered since, but some parts better than others; for instance in the emerging markets. But in the mature markets the recovery has been slower, and Europe has been the worst,” Holcombe said.

    “It was the first time we had seen eight to nine months of decline in roaming traffic, which was pretty startling given the years of dramatic increase prior to that.”

    Holcombe said it was too early to say what impact on Europe’s roaming recovery the EU regulations on data roaming, which came into effect on 1 July 2009, would have.  Added to the decrease in roaming and slow recovery, is the changing nature of the roaming traffic.

    “We act as a barometer of pure traffic, and per transaction voice is declining as a percentage of the overall pie,” Holcombe said, “And that’s continuing.”

    Data usage is continuing to grow as a result, Holcombe said, of the increasing proliferation of smart devices and of operators’ data bundles.

    But although the increase in roaming data use offers European operators an opportunity, they are faced with another roaming deadline (in July 2010), with regulations intended to limit the charges that users can rack up whilst roaming, and eliminate “bill shock”.

    Holcombe said that operators have a number of ways of solving that problem, with one approach being to use the business analytics and raw traffic data from Syniverse in a much more “proactive” way than they currently deal with customer data.

    At the moment, operators work with batch analysis, which is “after the fact” Holcombe said, meaning that reaction to customer data is necessarily slow. Syniverse has a developed a tool, from its own internal analytical software, to deliver QoS indicators, and customer roaming data, to operators.

    “At the moment, when an operator has a subscriber roaming on another network, it knows nothing [at the time] of what that customer’s activity is, but we do.

    “The breakthrough will be to differentiate different types of subscribers, to make access easier for customers, and see if you can offer them a better, or more appropriate, deal. It will enable operators to use different schematics within a much shorter cycle – a vacation cycle, perhaps –  rather than making an annual offer,” he said.

    Falling prices, but growth is achievable

    So what of Syniverse? With its transaction-based business model, it is dependent on the volumes of its operator customers to drive its own revenues. With voice traffic declining, does Holcombe see innovation in data services (IM, VoIP, internet browsing, applications useage, converged fixed/mobile services etc) as merely replacing declining voice revenues, or being additive to his business?

    “It’s about growth,” he said. “Our prices always fall on every re-negotiation, because the carriers have all the buying power, but this is about running to achieve growth, not to stand still.”

    He added that the company’s pending acquisition of VeriSign's messaging business will give it the opportunity to offer operators a value added services messaging platform for messaging. Although Syniverse has made the move into providing more messaging solutions with the acquisition, but it doesn’t yet see itself as a major messaging solutions provider, Holcombe said.

    “Even as a combined business we are still distant to a Sybase, but we certainly have the potential to develop a very strong messaging line. VeriSign has some very good people and research, but has been capital constrained as a result of being an unwanted asset. We can certainly release some of that intellectual capital.”

    One area of growth that Holcombe did identify is the growth of presence-enabled handsets and devices. This opens up the opportunity for operators and their competitors to offer converged services that combine messaging with location, social networks and media consumption. But tying this together, across the multiple protocols and communities that are involved is complex.

    “We provide the plumbing, the pipes that all fit together, to allow service providers to bring these concepts together, “Holcombe said, referencing a US cable TV provider that is looking at displaying mobile SMS onto that user’s TV screen – in-viewing.

    Importance of presence

    The idea of the social address book has been pushed by the messaging client vendors, as well as the device vendors with platforms such as Motorola’s Blur and HTC’s Sense, and is also now impinging on the App Store space, with the launch of for mobile – an app that will display on screen a contact’s latest information, such as Twitter and other updates.

    But although these are all individual, platform and device-specific solutions, some think that mobile needs to keep drawing on its historical role offering cross-network and cross-provider interoperability.

    Guy Reiffer, VP Marketing for messaging platform provider Colibria, said, “The problem is that everyone in the value chain, from operators to handset manufacturers and beyond, are looking for ways to deliver this. This will result in a number of unconnected platforms coming to market, and consumers being forced to choose which one they will use, which doesn’t foster interoperability and penetration. Standardisation to interoperate address books will not be in place for a few years, and no doubt we’ll see a number of companies delivering their solutions before then.
    “To deliver something that will work for everyone, the industry will need to work to architect a solution that works across platform, operator, country and other variables. It also has to be an intelligent solution to proactively find updates from the various places that a contact may make changes, and update them to the user’s address book.
    “ may be on the right track, but it will be interesting to see what other concepts come to the fore in the next year, and more importantly, who takes the lead.”

    That message would likely resonate with Holcombe, especially as Syniverse and Colibria have combined together on the development of Syniverse’s Next messaging platform.