Page 1021 – Mobile Europe

Xerox to deepen mobile CEM play through WDS acquisition

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12 July 2012

Xerox will bring a greater mobile CEM focus to its call centre services following the acquisition of WDS, according to its Group President of Telecommunications and Technology, Chris Tranquill.

Tranquill said that the acquisition, scheduled to complete some time in the next two months, would bring "true CEM" capability to Xerox's outsourced and managed customer care offering, delivering a higher value to its operator customers.

Xerox currently generates $600 million a year in the telco call centre and transactional services space, and has around 13,000 of its 48,000 employees working in its technology services division. Tranquill said that adding WDS, a 2,000 strong company, would enable it to provide greater "knowledge-based" depth to its wireless support solutions. He singled out WDS' GlobalMine platform as of particular relevance. GlobalMine analyses technical support interactions across different mobile device types so that service providers can access actionable data to anticipate and react to device or service-specific issues.

"The GlobalMine data base is a key asset that allows WDS to offer so many types of service to their customers. That will serve as a differentiator for Xerox: offering types of service offerings that spin off that database that we don't see elsewhere in the marketplace," Tranquill said.

Where applicable, Xerox will offer WDS' products to its existing customer base, Tranquill said, but retain the WDS name and transition all WDS' staff to Xerox. "Our intent is to keep the WDS name and make WDS a Xerox company and operator within Xerox services," he added.

Tim Deluca-Smith, VP Marketing at WDS, said that WDS had been trying to "cut through the noise" around CEM to "apply a degree of science" to working out how an operator controls the customer relationship.

"We've got quite far, and have engaged several Tier One carriers with our network-wide CEM solutions. This news [the acquisition] will allow us to add scale to truly take that proposition global. There are huge synergies between the work this group has already done and the carriers and manufactures they [Xerox] have been working with," Deluca-Smith said.

OpenCloud says Europe should take Polish lessons

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12 July 2012

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Aim for the meaty middle

Operators that deploy an "open" service layer to enable swifter internal and third party innovation stand a better chance of reacting to OTT competition than those that rely on IN platforms from the major NEPs, OpenCloud has told Mobile Europe.

OpenCloud finds itself in the position of providing its Rhino service delivery platform to all three of Poland's major operators, Orange, Polkomtel and T-Mobile, as well as to CenterTel. It claims that this, allied to Poland's hi-tech academic environment and developer community, has lead to Poland leading the way in telco innovation, with service providers launching a host of functions that add value to the communications experience.

OpenCloud describes its Rhino as an open platform that sits in the the service layer, and allows third parties or operators themselves to innovate in their network. It says that stands in contrast to proprietary IN platforms provided by the major NEPs, that tie operators to long service lead times and a limited scope of innovation. It also contrasts with the open-API model of fostering third party device-based application innovation.

OpenCloud's deployments in Poland have been slightly mis-represented this week, perhaps due to OpenCloud's own choice of headline: "Polkomtel, Orange and T-Mobile at the Forefront of OTT Fight-back". Some took that to mean that there was an alliance of operators offering open APIs to developers so that they could, in turn, develop a range of cross-operator apps designed to compete with the OTT providers.

Another interpretation was that the operators have opened up their core networks to these parties. In fact, what has actually happened is less sensational. The operators are using Rhino so that trusted third parties from Poland's tech and academic sector, as well as internal teams, can create network-based services that create extra revenues or increase brand loyalty.

Mark Windle, VP of Marketing, said, "We're not talking about opening the switching layer or the telecoms core in that sense. We're talking about innovation within the competence centre of the operators. That's really the message. And we've not said operators should take the OTT players on, [despite OpenCloud's own headline – see above], we're saying, 'here's an interesting thing where operators are getting on and doing something in service innovation."

Windle said that operators need to go beyond the model of aping the app development environments of Apple and Google.

"It irritates me how much the GSMA fete Angry Birds at their major shows. Yes, it's a great game but is it generating revenues for the service providers? Not really. Operators want services not apps, they want innovation in the network itself and to do things that are fundamentally related to telecom, trading on the fundamentals that have earnt operators their revenues," Windle said.

"There's been over-excitement about the success of the app store and developer model. Operators thought that they could expose APIs, say to integrate messaging APIs with a handset app. But that's all long tail stuff that is not generating revenue. They need to do something lower down the stack that enables developers with more understanding of telecoms to do innovation in the heart of the network: in the meaty middle where the money is. That requires a deeper level of connection into the network, working with trusted third parties but with third party developers nonetheless."

"The idea that some completely anonymous guy in his shed will come up with the next killer app is, I think, misguided," Windle continued. "I would say don't write it off, but API exposure is just one piece of the fabric of the network. The place to begin is to go open and work with third party developers, rather than being reliant on the three to four vendors that typically supply IN platforms. That's the first place to start."

Poland's telco innovation
Using the collaborative approach, T-Mobile has launched an SS7 location-based short number service designed for local businesses (such as a taxi services), the implementation of a hosted PBX for mobile handsets, and Freeyah, a ‘Skype style’ VoIP service; targeted at younger consumers and downloadable on Google Play.

CenterNet deployed a pre-pay voice, international roaming, black/whitelisting and mobile number portability solution into the market with great success.

Polkomtel has created more than 25 services. These include Office Zone, Home Zone, VPN, Freephone, Split Charge, Premium Rate, Who Called/Notify ME, Voicemail in Roaming optimisation.

For more on Polish telco innovation, download OpenCloud's case study.

Nobody’s perfect

Editor's Comments

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6 July 2012

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The question is constantly asked: if telcos are to offset or manage slowing growth, or decreases, in revenues from traditional voice and messaging, how are they to do this and where is the money going to come from?

This week, Telefonica Digital gave us some idea of how it sees things panning out – taking two days to speak to analysts, press and others, about its plans through to 2015.

In amongst the inevitable sloganeering — Telefonica Digital, we were told, is “embracing ambiguity”, “risking to fail” and thinks “perfection is the enemy of agility” — there was plenty of substance. By 2015, the operator wants to be making a billion Euros a year from mobile advertising, and another billion from financial services. It wants about half a billion, or a little more, from each of M2M, eHealth and security. Add in a billion from other subsidiary digital properties, such as the Brazilian internet TV service Terra (which has 100 million users in Latin America), and Tef Digital thinks it will be a €5 billion business in three years — a doubling of its 2011 revenues.

Just to put that into context, Telefonica Group had a worldwide turnover of €62.8 billion, and a net income on that revenue of €5.4 billion. So Digital’s revenues will be roughly equivalent to the current Group’s entire post-tax profit. Not an insignificant number, but hard to judge its overall worth as Telefonica declined to say what margin or profit its Digital services would make.

One thing that struck me, listening to Matthew Key, Tef Digital’s CEO, is how important Latin America will be to Group strategy. Initiatives such as mobile money, mobile health, and mobile advertising all have tremendous potential in Latin America – meeting social and economic needs in a far more urgent way than in Europe. Similarly, in a region with just 9% smartphone penetration, there is a major opportunity for sales of sub-$100 smartphones – such as the FirefoxOS phones Telefonica is backing.

Latin America is already responsible for48% of Telefonica’s consolidated Group revenues and notched revenue growth of 8.3% year-on-year. That performance is driving what growth there is at a group level.

View all our content from Small Cells World Forum – news, demos and interview

I had an interesting chat on the sidelines with a Telefonica spokesperson about Tu Me, the operator’s over the top IP comms app – designed to take on the likes of Viber and WhatsApp. To be crude, the spokesperson confirmed that the app is essentially a “can’t beat them, join them” play. If users are going to leave Telefonica for these services, Telefonica might as well offer them something similar, or better, that at least keeps them in front of a Telefonica logo. It also allows the operator to get users of other operators using its services – as it hopes to do with mobile money, for instance. As an example, the USA is now the third largest user base for Tu Me, even though Telefonica has no asset to leverage in that country at all. In time, the spokesperson said, there could be revenue opportunities as well, by adding advertising and such like. Slightly more surprising was Tef’s claim that it has 250,000 active users for the service, signed up without marketing in eight weeks. The definition of active would be interesting – new services like these tend to attract a lot of sign-ups from people having a look around who then all but leave the service.

Still, Tu Me is an interesting idea that deserves a longer run before being judged. One interesting aside was Key’s note that the company will be introducing an enhancement to the service, Tu Go, later this year, giving users the chance to have the same comms client on any connected device of their choosing.

Another key area for the operator will be its enabling of operator or carrier billing for apps, in-app and other digital purchases. Already active in Germany, where 400,000 people are active monthly users of a capability that lets them add the cost of an item to their phone bill, instead of paying using a credit card or Paypal. Carrier billing deals with the likes of Facebook, Google and Microsoft look critical for operators, and are attractive to developers. Key described it as a win-win-win although one has to be sceptical of Telefonica’s intention to build a store within a store in Google Play and Microsoft’s marketplace. There’s always a space for curated content, of course, but my experience of Vodafone’s “channel” within Play is that it’s mainly a repackaging of existing apps. Unless operators offer significant value – discounts on paid apps or similar, or great customer service portal — it’s hard to see what these approaches will achieve.

Speaking of apps and developers, one property that was missing from yesterday’s strategy briefing was mention of BlueVia – the operator’s developer programme that opens up telco APIs for developers to build into apps, adding comms or location capabilities to apps. It’s notable that a programme that other telcos would be shouting from the rooftops about — genuine positive engagement with developers — barely got a nod. Unless there’s something we should know about?

In short, the message from Telefonica was, “we can innovate, in fact we have to innovate, and we are innovating as fast as we can.” Its Wayra programme has invested in 140 businesses, out of 10,000 who have pitched, and reinvested in about a third of those after six months – with each investment averaging about €50,000. Telefonica will take the products of those businesses into its own business, in partnership or through direct ownership if necessary. It also has its West Coast US division, ownerhips of Jajah and partnerships with the likes of cloud provider Joyent to lean on.

It’s not perfect, but hey, perfection is the enemy of agility. It’s not vast, but €5 billion is not a small number. It may just be the future – a B2B2C business that doesn’t want to own everything. For a monster, global carrier, it deserves a chance.

Keith Dyer
Editor
Mobile Europe

Small cell outlook and key challenges

Mobile Europe

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5 July 2012

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Parker Moss, of Alcatel-Lucent, discusses how operators are assessing small cell opportunities and challenges.

Current and future small cell development requirements

Mobile Europe

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5 July 2012

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Ravi Chachra says Aricent is seeing increasing demand for dual mode, 3G/LTE femtocell solutions. The software is ready, but the push is yet to come from the operators, he adds.

Telefonica Digital sets out key operating targets

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5 July 2012

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Telefonica Digital wants to grow revenues 20% year on year to become a €5 billion business by 2015, and has detailed how much it expects each of its product areas to generate.

CEO Matthew Key said that the unit turned over €2.4 billion in 2011 – representing 20% growth on the like-for-like basis on the operating activities of Telefonica Group over the previous year. (Telefonica Digital was only formed as a separate operating unit nine months ago)

Key said that the company expected its mobile financial services to raise around €1 billion in revenue. Advertising would also generate around a billion. eHealth is expected to raise around half a billion, as are security and cloud services. M2M is targeted to raise €500-800 million, whilst “Subsidiaries” (such as the Terra service in Brazil) is expected to generate €1.1-1.3 billion.

However, although the Group does want to recognise revenues separately, Key said he was unable to share profitability numbers, as cost-allocation within Telefonica Group was so complicated, due to bundled sales and cross-group operational activities.

Direct to bill in 14 markets by end 2012

Telefonica Digital said that it has signed global agreements with Facebook, Google, Microsoft and RIM to enable direct operator billing for digitial items and content in 14 markets before the end of 2012. Already active in Germany, where the operators says it has 400,000 customers active on a monthly basis, direct billing allows users to add the cost of an item to their monthly telephone bill, or deduct the amount from their prepay credit. The operator then reimburses the application developer or content partner in question, keeping a slice for themselves.

Key would not share the commercial terms of its direct billing agreement (ie how much Telefonica keeps for itself) but a spokesperson did say that as the operator had to compete for business with other payment providers such as credit card issuers, so that provides a guideline for the operator share.

Spain will be the first market to have operator billing enabled, Key added. Telefonica intends to set up a “Store within a store” on Windows Phone Marketplace, as well as enabled customers to set up direct to bill as a default payment option. Similarly, the operator will set up a branded Telefonica channel within Google Play to promote its own and other partner apps, as well as offering the direct to bill option on other apps within the store.

Advertising

The operator is going to grow on its UK advertising business, to launch mobile advertising in Latin America. The UK business, which now has 70 people working in it, has achieved a £60 million turnover within two years of operation, Key said. But he added that mobile advertising is still very much an under-exploited opportunity, meaning “the upside is huge”.

“If you look at the amount of money in mobile advertising at the moment, compared to the amount of time people spend on their mobiles, it’s way out of kilter,” Key said.

OTT comms

There was also an update on Tu Me, the operator’s over the top IP comms and messaging app, designed to compete with the likes fo Vider and WhatsApp. Key claimed that there are now 250,000 active Tu Me users, using on average seven Tu Me products (messaging, location, VoIP) per day. The operator’s investment in Jajah was critical to the launch of that service, he said, and would not have been possible without it. Key claimed the service was designed and launched in 100 days, and when there was demand for a Spanish version, that was brought to market in a week.

The company is also going to launch Tu Go before the end of the year – a cloud app that will enable users to have the same phone client across different connected devices (phone, tablet, PC etc). Tu Go will be available in the UK before the end of the year.

Key said that currently Tu Me is about retaining customers who are leaving Telefonica for rival IP comms services. It’s also about bringing customers to Telefonica as an OTT play. For instance, the third largest user base for Tu is in the USA, where Telefonica is a pure OTT provider. A spokesperson said that in time Tu Me could prove to be revenue generating, through partnership and advertising type deals.

Firefox OS

As well as ZTE and TCL (already announced) the operator is in “advanced discussions” with four to five device manufacturers to develop handsets based on the Firefox OS, Key said Telefonica’s aim is to have the devices to market at sub-$100 prices, enabling it to open up markets that are currently excluded from the smartphone experience.. In Latin America, smartphone penetration is only at 9% currently, and within that Telefonica is too reliant on Android, Key said, giving it a potential strategic weakness.

Innovation

Financial service, advertising, M2M, OTT, security and cloud services only represents about 60-70% of the products the operator has in development. Key said the company is holding back several initiatives that are in development, and due for release.

The Wayra initiative has seen the company make an average initial investment of €50,000 in 140 companies. In Bogota and Madrid, the company has re-invested in around 30% of companies after their six month reviews. In all, 10,000 customers have pitched to Wayra in its beauty parades.

The intelligent small cell

Mobile Europe

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4 July 2012

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Is there a need for the intelligent small cell? Intel and Ubiquisys both think so, arguing that distributed network intelligence can boost the user experience and lower the total cost of ownership of mobile networks.

First, we hear from Ubiquisys' Keith Day, and see a brief demo of edge-based video caching.

Then, Intel has its say – and demos no the fly video transrating.

To back up its thinking about moving network intelligence to the edge, Intel commissioned a case study, titled "Rethinking the Small Cell Business Model" (NB: link starts PDF download). Working with Edge Datacomms, the same partner providing Ubiquisys' caching technology in the video above, Intel deployed small cells on a four carriage train, using 3G links from two different carriers as the backhaul link. The cells used predictive and proactive caching to decide which content should be stored locally on the train – items such as BBC news, train times and maps were cached. The most accesses sites were Google, Facebook and the BBC. Over a 25 day period, Intel said that an average of 200 users accessed the service each day (the train was in Kenilworth) and each user transmitted and/or received 22 Megabytes of data per day. Just over 17% of content was proactively cached and 16% predictively cached.

That resulted in a reduction in backhaul traffic of 45%, with the operator achieving a 22% reduction in backhaul opex, according to Intel's report. The company then asked Wireless2020 to model those results for a similar deployment in urban London, and added in the impact of integrating WiFi as well as caching and video compression functionality.

Wireless2020 found that the total cost of ownership (cumulative capex and opex) would drop 7.1% as a result of deploying smart cells with integrated WiFi, within urban London.

Lyrtech RD: “A new face in the crowd”

Mobile Europe

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4 July 2012

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Canada's Lyrtech RD is bringing its integrated small cell products to OEMs and systems integrators – especially those targetting rural and other out-of-coverage areas. Data offload for urban areas will follow.