An increasing number of mobile subscribers are using their phones to do practically everything - from checking emails, using enterprise applications, shopping, availing of government-citizen services, doing banking transactions, to getting entertainment, education, news and social chatter. This usage can be directly linked to high-speed data services being launched across the world. Advanced mobile markets such as South Korea, Japan and the US are reporting massive spikes in data consumption. The growth in data consumption is expected to spread further as 4G is rolled out across markets. The shift in balance from voice/text-driven usage to data-based usage spells a new era for mobile operators. Can they exploit it to power future growth?
The scale at which data consumption is growing is an indicator of the urgency for mobile operators to rethink their plans.
The numbers indicate that just around the corner is a society whose data consumption will be so huge that it will demand better quality of service, improved devices, seamless convergence, better pricing and packages. The trend is already cutting across age groups, demographics and markets.
The growth in data usage heralds a significant change for mobile networks that have depended largely on voice revenues. Historically, an MSISDN (Mobile Station International Subscriber Directory Number) or a mobile number has tied subscribers to their network operators. The unique number ensured that they remained with the operators as it was their identity1 . But in a world dominated by data, the primary identity that customers have is their login IDs for Over The Top (OTT) services such as emails, online bank accounts, Twitter, Skype, etc. This ID is not operator dependent. As a consequence, the customer is free to change operators with no pain or disruption.
Change in Operating Landscape
The shift in network usage patterns spells three changes:
The question for operators is - How do I do this quickly and flawlessly to be able to flourish in a world where data consumption is the revenue driver? There are three significant ways to address these changes:
Will finding investments become a challenge?
Addressing these changes calls for additional investments -- these may not be easy to find for a CXO, who is already balancing cost and investment pressures.
In addition, the CXO must deal with several other growing challenges, including cloud adoption, technology for faster networks, proliferation of smarter devices, richer content and applications, digital delivery models, etc. These developments are, unfortunately, outside the purview of operators. Operators must therefore learn to quickly align with them or adapt to them.
Aligning or adapting calls for a shift in the focus of the CXO. It means making investments in the new technology areas that are changing the rules of play:
Prescription for CXOs
CXOs are saving money from their current operations amid budget constraints to make investments in areas that are now critical to businesses.
The emphasis is now on technologies that insure them against becoming obsolete. Automation (of Testing, network and application management, order management and provisioning, charging and billing, customer support, etc.) is becoming a big-ticket item as a means to save on resources.
There is enhanced vigor for Shared Services (accounting and finance, HR, knowledge management, BPM, infrastructure and application management etc.) and group initiatives as a way to standardize processes, bring down operational costs and amortize CAPEX.
The thrust to consolidate and modernize in order to improve efficiencies and economies of scale is becoming stronger as well. Savings generated through these initiatives can be ploughed back into 4G networks for providing faster mobile data services. Implementing these business and operational changes will automatically use new technologies in the market.
We are witnessing the emergence of Next Generation Operations and Business Support Systems (OSS/BSS) to support new demands. Customers don’t want to wait for a bill till the end of the month, as is the traditional norm. Today, they want to be able to check their accounts any time of the day and be able to view real-time billing data. In fact, they also want information posted directly to them as soon as a call or data download is over
Creating a response to these demands are technologies such as cloud, NFV and Software Defined Networks (SDN). Operators are migrating from proprietary hardware and systems that have been the bedrock of mobile networks for the last three decades to open systems that are flexible and cost effective.
Over the years, the only way operators could address growing demand for data was by increasing bandwidth – bigger pipes were the fundamental improvements brought about by 2G and 3G. But today, intelligence can be embedded into edge devices, within the core of network systems and even within the networks itself 2. The idea that networks themselves can become a service is taking root with Application Programming Interface (API) exposure as a means of monetizing networks.
Responding to these changes are technology providers. Their business models and practices are changing. The market is evolving with new integrated Next Generation OSS/BSS vendors.
The Way Forward
In these fast-changing times, CXOs would do well to look for competent technology partners.
Together, the focus should be on IT, network and process simplification, standardization of architecture, with an emphasis on growing and improving shared services. These would help operators become more efficient, create savings to invest in 4G and improve time to market.
The other area that calls for attention is network monetization, improvement in customer experience and analytics to generate better offers and campaigns. These would ensure that the operator could offer differentiated services to grow loyalty and reduce churn, to take care of the customer expectation that they be treated in a unique manner as against the standardized service offerings of the past. The platforms and solutions available shall enable customers to pick and choose.
The third and last area that needs to be emphasized is innovation. Operators must find innovative business solutions for their high-value customers using next generation technologies, consider ways to monetize their network and data center investments and engage in joint propositions across emerging areas that are potential threats and opportunities.
1 By ‘identity’ we mean the fact that one subscriber cannot speak to another without using a specific and unique phone number.
2 The idea that ‘dumb pipes’ can be embedded with intelligence in order to understand what is passing through them – and then trigger quality of service parameters, service enhancements, incentives for customers and billing rates is gaining ground.
Viswanathan Ramaswamy (Vishy) is Vice President in Wipro, handling global technology competency and practice for the Communications Service Provider industry. He heads a team of telecom domain professionals experienced in areas of OSS, BSS, SDP, telco cloud, network applications, etc.
With over 26 years of industry experience in the telecommunications field, Vishy’s expertise ranges from R&D, project implementation to network operations.
Vishyis an IP networks and OSS expert, with current knowledge of IT and network convergence. He holds a Master's degree in Electronics & Controls and Bachelors in Electronics and Communication Engineering.