mobile operator guide 2013

SAP Mobile Services

Mobile Operator Guide 2013The Evolution of Mobile Services: Challenges, Strategies, Opportunities

Mobile Operator Guide 2013 The Evolution of Mobile Services: Challenges, Strategies, Opportunities Published by Sybase, an SAP Company Sybase, One Sybase Drive, Dublin, CA 94568-7902, U.S.A.

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Library of Congress Cataloging-in-Publication Data

SAP Mobile Services Mobile Operator Guide 2013, The Evolution of Mobile Services: Challenges, Strategies, Opportunities Edited by Peggy Anne Salz p. cm. ISBN 978-0-9885886-2-2

1.Mobile technology.

Library of Congress Control Number: # 2012953199

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3Mobile Operator Guide 2013 The Evolution of Mobile Services: Challenges, Strategies, Opportunities

10 FOREWARDBy John Sims, President, SAP Mobile Services

13 PART 1: INTRODUCTION : A WEALTH OF OPPORTUNITIES14 Mapping A New World For Mobile Operators

By John Sims, President, SAP Mobile Services

18 Driving Growth In The Digital EconomyBy Stephan Gatien, Global Lead, Telecommunications Business Unit, SAP and Jens Amail, Senior Vice President and General Manager for Services, SAP

25 PART 2: STRATEGIES FOR DRIVING REVENUE26 Long Live SMS

Text messaging continues to grow from strength to strength as new services and paradigms around mobile marketing and mobile apps drive volumes and usage. By William Dudley, Group Director, Product Management, SAP Mobile Services

33 Moving To The SMS Hubbing Model Operators are recognising that SMS hubbing is not just about connectivity; it can ease the management burden around cross-border messaging traffic. By Robert Rose, Senior Director, Global Operator Services, SAP Mobile Services

36 Latin America Offers Big SMS OpportunitiesPersonal Paraguay and Tigo Colombia discuss local market requirements and weigh on the tremendous opportunities and innovation that are driving SMS growth.

TABLE Of CONTENTS

http://dilbert.com/strips/comic/2011-05-20/



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43 Cybersafety: Everyone’s ResponsibilityThe Cyber Information Sharing and Protection Act addresses how information should be shared between private companies and the government to catch malicious actors breaching networks to steal information or sabotage systems. By Steve Largent, President & CEO, CTIA-The Wireless Association

48 Does The Future Of Mobile Security Lie In The Past?Text messages are a powerful vehicle for reaching people — but they are also increasingly the starting point for malware attacks. By Mary Landesman, Senior Security Researcher, Cloudmark

53 Mobile Number Portability: Increasing Competition And Driving ValueMobile Number Portability has come a long way since it was implemented in the 1990s, but it now confronts mobile operators with a variety of commercial challenges. By Mitul Ruparelia, Director of Sales Engineering (EMEA and LATAM), SAP Mobile Services

58 Intelligent Hubbing: Easing International SMS Routing ComplexityA comprehensive checklist and solid advice aimed at helping operators remove the complexity around establishing and managing SMS routing. By Mark Weait, Vice President Sales, SAP Mobile Services

63 Orchestrating Capabilities Delivers High PerformanceBharti Airtel details the strategy that has allowed it to spread its wings across the African continent, lay the groundwork for value-added services and deliver high volume at low cost. By N. Arjun, Chief of Projects & Transformation, Bharti Airtel

68 PART 3: IPX: INTERCONNECTING OPERATORS FOR UNLIMITED OPPORTUNITIES

69 Bundling Services Makes Business Sense Korea Telecom discusses the importance of Voice over IPX in its larger strategy to future-proof its network, ensure end-to-end quality of service and grow its wholesale business. Interview with Incheul Park, Head of Wholesale Team, Global Business Unit, Korea Telecom



74 Expanding Voice Connectivity Via IPX: An Operator PerspectiveIn the Philippines Globe Telecom is embarking on an ambitious network change to deliver customer benefit by making cross regional interconnectivity better and easier. By Gil Genio, Head of International and Business Markets, Globe Telecom, Inc.

78 The Value Of A True IPX Mobile Operators can best leverage the full benefits and economies of scale that IPX provides if they look beyond just offering basic services, such as voice and data roaming, and focus on delivering the services their customers will demand next. By John Candish, Senior Director, IPX Business, SAP Mobile Services and William Dudley, Group Director, Product Management, SAP Mobile Services

83 Nine Ways To Get More Value Out Of IPX IPX offers tremendous value and here are 9 things operators need to do to ensure they can reap and maximise the benefits. By John Candish, Senior Director, IPX Business SAP Mobile Services

86 Making The Right ConnectionsSingTel recounts the lessons, learnings and results of its recent IPX trial, the first step in a private international network connecting all the Group companies. Interview with David Ng — Vice President, Regional Technical, of SingTel’s International team in the Group Consumer organization

91 A Brave New All-IP WorldWhen it comes to IPX, peering among IPX providers is an essential element because it is the enabler of global reachability. By Elena Sacco, Chairman of the IWG at the GSMA and Senior Interconnect Manager, TIM

94 Boosting Trust, Building Business In countries like Africa IPX does more than provide interconnectivity; it also meets the needs of local telecommunications authorities for transparency and accountability. By Ranjeet Wilkhu, Director, Neucom Solutions

98 Voice: The IPX Killer AppA candid view of the many benefits IPX provides. While many focus on future scenarios around LTE roaming, PCCW outlines how IPX can already enhance voice. By Richard Midgett, Managing Director – Wireless Business, PCCW

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104 PART 4: LTE: UNLEASHING INNOVATION TO DELIVER RESULTS105 Enabling 4G LTE For ALL

MetroPCS discusses its early decision to deploy LTE and how this head start on the competition has allowed the U.S. operator to scale its business and satisfy its customers with value-driven services. By Ed Chao, Senior Vice President, Engineering and Network Operations, MetroPCS

111 Fighting Smart To Win BigA clever approach harnessing RCS will allow operators to compete with OTT players with new services such as group instant messaging or chat, live video sharing and file transfer across any device, on any network, with anyone in a mobile address book. By Madan Jagernauth, Vice President, Marketing & Strategy, Mavenir Systems

117 Positioning LTE For SuccessResearch and insights brings clarity into the industry discussion about LTE, the benefits it delivers and reasons why operators take the lead in educating consumers. By Declan Lonergan, Research VP, Yankee Group

124 Breaking Down Borders: Getting The Most Out Of LTE RoamingLTE is reaching a stage of maturity where technology is no longer a barrier to deployment, so now it’s up to mobile operators to architect the strategies that will leverage the complete range of benefits. By James Middleton, Managing Editor, Telecoms.com

127 Video Communications: “A Perfect Storm”Consumer use of video has entered a new phase of growth, driven by devices, services and networks built to support it. But the wave of interest in mobile video could overwhelm service providers. By Ramsey Masri, Vice President, Sales & Alliances, Aylus Networks

134 Enabling Roaming Across LTE NetworksLTE will enable new services, but it will also put high demands on the data roaming backbone and require more bandwidth and resilient network connectivity. By Matthew Tonkin, Global Head, IPX Business, SAP Mobile Services


138 LTE Roaming In Latin America: Conditions For SuccessThe deployment of LTE across Latin America brings with it a host of benefits and equips operators to address the spectrum limitations facing their networks. By Alejandro Martinez, Chairman, Billing & Roaming Working Group (BARG), GSMA LA

142 LTE: New Technology Boosts New BusinessA review of the business models, approaches and services, such as mobile video calling, that will allow operators to drive even more revenue out of their costly LTE investments. By Michel Van Veen, Group Manager, Product Management, SAP Mobile Services

147 PART 5: OTT: OPEN THREAT OR HIDDEN OPPORTUNITY148 OTT Threat: Top Strategies To Fight Smart

Learn from real-life examples, including KPN and China Mobile, about the real impact of OTT services on voice and messaging revenues and how mobile operators turn the tide. By Pamela Clark Dickson, Senior Analyst, Mobile Content & Applications Intelligence Center, Informa Telecoms & Media

156 Evaluating Strategies To Face OTT ProvidersOperators need to be more digital. Does Telefónica Digital, a unit aimed at developing new applications and business models for mobile technology show the way? By Eusebio felguera, Corporate Regulatory Manager, Telefónica

161 NUVOs: An Alternative To Disruptive OTTNot all OTT apps threaten mobile operator revenues. Network Unaffiliated Virtual Operators (NUVOs) actually benefit operators and boost their business. By Austin Murray, founder & President, textPlus

166 OTT Ecosystem: Paving The Way For OpportunityThe inevitable arrival of an all-IP world also reinforces the needs for deeper part-nerships between operators and OTT players. Mediafriends discusses apps and approaches showing the way. By Gene Lew, CTO, Mediafriends


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172 PART 6: UNLEASHING THE POWER OF MOBILE COMMERCE173 Mobile Money For The Masses

Qtel has made its mark with its Mobile Money services and an innovative self-serve approach that meets the needs of both migrant workers and affluent customers. By Richard Morecroft, Assistant Director Mobile Money, Qtel

179 Driving Mobile Money Usage In Unbanked RegionsDriving customer adoption and increasing activation rates in mobile money is no easy task. The key is proper audience segmentation and a sharp focus on customer education. By Yasmina McCarty, Senior Manager, GSMA MMU

184 Blueprint For A Successful Remittance ServiceA review of the mobile remittance services available today reveals a variety of different approaches to tackle the challenges of sign-up, cash-in and cash-out. By Diarmuid Mallon, Head of Global Mobile Marketing Programs, Programs & Demand Generation, SAP

190 Operators: Tap Your Strategic Assets Mobile operators might only have scratched the surface when it comes to understanding their true potential to accelerate and enhance the mobile payments and commerce experience for consumers everywhere. By Aditya Kurejkar, Co-founder and Program Director, Money2020

194 Mobile Commerce Opportunities For OperatorsBuilding and deploying a successful mobile payment service requires operators to consider a wide range of variables, from business models to local telecom and financial regulations. By Matthew Talbot, Senior Vice President, Mobile Commerce, SAP

200 PART 7: LEVERAGING MOBILE TO ACHIEVE LASTING LOYALTY201 Perception vs Reality: What’s Your Mobile Strategy?

The arrival of the empowered consumer turns up pressure on operators and enterprises to create and implement a comprehensive mobile strategy that is truly end-to-end, multi-channel and, more importantly, customer-centric. By Howard Stevens, Senior Vice President, Global Messaging Solutions, SAP Mobile Services



205 The Power Of PushPush notifications also open up new opportunities around customer service and marketing, allowing mobile operators to deliver simple alerts to the customer — and trigger the customer to take action. By Coleen Carey, Director of Product Marketing, Urban Airship

211 Harmonising Touch Points, Technology, Processes And PeopleCelcom details the milestones and motivations that have helped it evolve its view of customer experience and sharpen its focus on encouraging lasting loyalty. By Suresh Sidhu, Chief Corporate and Operations Officer, Celcom Axiata Berhad

215 Ask, Listen And Build Lasting LoyaltyTalk to your customers, and listen to what they say. A successful mCRM program integrates social interaction, customer engagement and customer feedback. By Sally Burley, Director, The 3rd Degree

220 Why Customer Engagement Campaigns Pay DividendsAn in-depth look at how mobile changes the rules of engagement, allowing mobile operators, brands and businesses to maintain continuous customer touch and drive deeper engagement. By Gregory Dunn, Vice President, Product Management, SAP Mobile Services

228 Glossary Of Terms

234 Index Of Contributor Companies

240 Acknowledgements

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Mapping A New World for Mobile OperatorsBy John Sims, President, SAP Mobile Services

FOREWORD

IP is changing the game. Advanced mobile devices, new technologies, increased competition and a shift in subscriber expectations towards truly personal and relevant interactions are coming together to cause disruption in the telecom industry - for operators and all the companies in their business ecosystems.

However, the same conditions also spell massive opportunities for companies prepared to take charge of change. As one of the 40+ industry authorities who has provided insights for this Guide, points out: the rapid pace of change and the interplay of supply and demand for services that are aligned with customers’ requirements are combining to generate the mobile industry’s own Perfect Storm.

The author in this case was referring to mobile video communications, where growth is driven by devices, services and networks. But mobile video isn’t the only market segment on the brink of the tipping point. This Guide shows that other services, such as SMS, LTE, mobile commerce and mobile customer loyalty, are also entering a new phase of growth and innovation.

• SMS: While some analyst reports predict the decline of text messaging, SMS continues to be the number one data communications tool and the most effectivedirectmarketingchannelevercreated. In almost all emerging markets it remains the ubiquitous data service of choice. In developed markets, the explosion of mobile apps, a development which many thought would mark the death of SMS, has actually pushed application-to-person(A2P)trafficgrowth to a new level. This spells


opportunity for mobile operators and service providers to harness text messaging to supercharge a variety of services, ranging from mobile marketing and mobile advertising, to mobile commerce and mobile banking.

• LTE: As mobile network operators move towards 4G/LTE and an all-IP network, many will cooperate to expand their network footprint and pave the way for compelling new services that will delight customers and drive positive results for everyone in the ecosystem. The advance of LTE will also challenge operators to develop strategies to cooperate with and enable Over-the-Top players in a manner thatbenefitstheecosystemandwringsnew revenues out of operator core capa-bilities such as location information, billing support and network management.

• Mobile commerce: From researching products to making purchases, consum-ers are increasingly reaching for their mobile devices as an essential shopping companion. At the other end of the spectrum, and particularly in the under-banked regions of the world, consumers are gravitating to services delivered by mobile operators that have expertly leveraged their distribution channels, retail presence and trust to expand and

enhance mobile money and mobile banking services. Now it’s up to mobile operators to map out comprehensive strategies that cultivate partnerships with key players, such as banks, and adapt to local market conditions, such as regulations, demographics, and the emergence of new remittance corridors.

• Mobile loyalty: Because mobile is a fiercelypersonaldevice,it’sanidealmeans to reach customers on every step of their daily journey to encourage inter-action and deepen engagement. Whether operators and marketers choose to harness text messaging, new forms of IP-based messaging, mobile web or mobile apps (or all in combination) they can clearly leverage mobile as a channel to boost customer loyalty and recruit true brand advocates. However, just as in real-life, building a relationship is about talking and listening, and that’s why companies must develop mobile loyalty programs thateffectivelydoboth.

This inaugural edition of the Mobile Operator Guide features the insights of industry thought leaders and innovators to identify market trends, best practices and key lessons learned in deploying mobile services. The purpose of this industry knowledge resource is to provide readers

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clear direction and critical information, equipping them to develop strategies to drive messaging revenue, deploy cost saving solutions, generate new revenue streams from mobile commerce, build loyalty through customer engagement programs, plan for LTE roaming through IPX adoption and maintain competitive advantage in an IP-based world.

The onward march of next-generation services into daily life has created a new world order in the telecoms industry. Think of this Guide as a starting point to a roadmap, one that will allow you to plot the transformational path your business needs to follow to succeed in this exciting new digital economy.

PART ONE: INTRODUCTION A WEALTH OF OPPORTUNITIES

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What a difference a decade makes. You need only go back that far to find the “early days” of mobile network operators’ journey with mobile data, comparatively speak-ing, a world that hardly compares to today’s landscape. Amid the far-reaching changes that have taken hold since then, the com-plexity that now distinguishes operator services brings with it a rich abundance of opportunities to those who are forward-thinking and adaptive in their strategies and capabilities. A decade or so ago, an operator’s world revolved almost exclusively around voice. In an environment of minimal competition,

productofferingswerecomparativelystraightforward, with “all-you-can-eat” pricing plans the industry standard. It seems like a long time ago, but it was only in2001thatthefirstinter-operatorSMSmessages were delivered in the U.S., with SAPMobileServiceslaunchingthefirstinter-operator SMS messaging hub in concertwithAT&TWireless.Moresignifi-cantly, during those formative years, operators took a walled-garden approach to mobile data, with services delivered within a closed ecosystem – a far cry from the interoperable, pan-operator network topology that has evolved since then.

From that initial “closed system” approach, rapidly advancing technology and the explosive growth of international travel by globe-trotting executives and power users contributed to the dramatic changes we have seen take root since then. The eclipse

PART ONE: INTRODUCTION: A WEALTH OF OPPORTUNITIES

“ As the cost of spectrum and the pace at which new network technologies needed to be deployed rose, operators needed to consider cooperative arrangements with their fellow operators, something that would not have previously been on the table.”

Mapping A New World for Mobile OperatorsBy John Sims, President, SAP Mobile Services


of voice by data, accompanied by the advent of successively more powerful generations of network technology leading to 4G, an all-IP environment, accompanied by today’s open infrastructure, means operators must generateprofitsbysignificantlyrethinkingtheir business models.

Traditionally, mobile network operators have owned and controlled everything, including physical equipment, radio networks, serv-ices infrastructure, devices and user inter-faces. But amid their changing economics, many have had to rethink this approach. With the rise of the smartphone, driven by the iPhone and Android devices,

it was clear that mobile network operators could no longer dictate the user interface. As the cost of spectrum and the pace at which new network technologies needed to be deployed rose, operators needed to consider cooperative arrangements with their fellow operators, something that would not have previously been on the table.

In addition, in order to accelerate the adv- anceofthenetworkeffectfornewservices,operators in some countries have come together in joint ventures or cooperatives to lower their costs and seed the market with new service technologies – for example, the Isis joint venture in the United States or the

Table 1: Global mobile data growth today is similar to global internet growth in the late 1990s

Global internet traffic growth (fixed) Global mobile data traffic growth

1997 178% 2009 140%

1998 124% 2010 159%

1999 128% 2011 133%

2000 195% 2012 (estimate) 110%

2001 133% 2013 (estimate) 90%

2002 103% 2014 (estimate) 78%

Figure 1: Based on data from Cisco. Cisco Visual Networking Index Mobile 2012

www.slideshare.net/CiscoSP360/cisco-visual-networking-index-vni-global-mobile-data-traffic-forecast-20112016

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proposed mobile payments venture among operators in the United Kingdom.

To a certain degree this kind of thinking has been accelerated by operators’ need to compete against Internet-based players, which have arrived in the mobile space as creative and formidable competitors. It also marks a realisation by many mobile network operators that their future success depends more upon the innovative services that they offersubscribersthanitdoesontheunder-lying network technology – a substantial shift in emphasis.

So, as mobile network operators move towards 4G/LTE and an all-IP network, many will cooperate to achieve a more rapid and ubiquitous network footprint that will allowthemtooffercompellingnewservicesthat will capture the imagination of their subscribers. In doing so, they will compete against other mobile network operators, but they will also have to operate in a much faster cycle of innovation that will allow them

tofiercelydefendtheirfranchisesagainstthethreat from the Internet-based companies or so-called Over-The-Top (OTT) players. As part of their strategy, operators will want to not only create a strong domestic footprint; they will also look to extend this to a global level, much as they have done over the past decade or so with SMS.

This is precisely where SAP Mobile Services provides the most critical value. We are delivering the world-class interoperability and reach that comes with our role as an independent custodian residing between and among operators. It is a role that demands a truly holistic level of visibility – horizontally, across geographies spanning the Americas, Europe, the Middle East, Africa and Asia, and vertically, providing the technology and connectivity required to ensure that today’s ever-expanding operator ecosystemcontinuestoflourish.Mostimportantly, SAP Mobile Services possesses the vision and resources to realise its custo-dial role in every dimension.

“ The advent of a new world for operators follows decades of incremental improvements punctuated by breakthrough technologies.”


This inaugural edition of the Mobile Operator Guide 2013, The Evolution of Mobile Services: Challenges, Strategies, Opportunities provides a rich taste of the bold new world that has materialised and continues to take shape. Inside, our expert stable of authors delve into the current state of play and the most important emerging issues in operator services, including:

• Operator strategies for driving and optimising messaging revenue

• Roaming and interconnect issues, including the interplay of LTE in an IPX environment

• OTT Messaging, voice and video services, including managing the challenges con-fronting operators in a BYOD (Bring Your Own Device) world

• Mobile commerce and the myriad of opportunities for operators

• Customer engagement, including a roadmap for building loyalty by empowering customers.

The advent of a new world for operators follows decades of incremental improv-ements punctuated by break-through technologies. The result has been a new paradigm for communication. All of us at SAP Mobile Services are working with diligence and with our eyes on the future to enable all participants in the value chain to experience the unprecedented power, easeandbenefitsofthisnewworldofinter-operability, reach and global interaction.

John Sims is President of SAP Mobile Services, the recognised global leader in mobile messaging and interconnect services. He has more than 20 years experience with companies supplying technology and solutions to mobile operators. Sims has been recognised with the prestigious Ernst & Young Entrepreneur of the Year Award in the communications category. He is also a member of the Board of Directors of CTIA and has been a speaker and panellist at numerous industry events.

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In July 2012, just before the London 2012 Olympics, no one could have imagined that one of the first headlines in the main-stream press would be about the local mobile networks’ bandwidth problems. But this is precisely what happened shortly after the Games opened.

After having encouraged athletes and fans to tweet freely, Twitter was blamed for disrupting the coverage of the cycling road race. Ironically, the sheer volume of mobile socialtrafficalongthecoursewassoover-whelming that it even interfered with the GPS and telemetry updates from the race, which left those covering the games without information on positions and timings.

This twist of fate was a perfect metaphor for the dilemma and challenges faced by communications service providers today.

On one hand, the success of smartphones has led to increased data activities, with subscribers happily clocking time to play games, watch videos, post on social sites, tweet and send text messages. This phe-nomenon has contributed to the decline of revenues from voice services, once the cash cow of the entire industry without really offsettingittodate.

On the other hand, costs to provide adequate network infrastructure to support thisexplosionofdatatrafficareontherise.As the 2012 Olympic Games in London showed, the infrastructure available still cannot always handle the load and meet expectations for connectivity and reliability.

Granted, network upgrade investments representaheavyfinancialburdenforallplayers in the ecosystem. However, these network investments are essential building blocks for future services and business models. In fact, 2013 is widely expected to be a blockbuster year for infrastructure

Driving Growth In The Digital EconomyBy Stephan Gatien, Global Lead, Telecommunications Business Unit, SAP and Jens Amail, Senior Vice President and General Manager for Services, SAP

PART ONE: INTRODUCTION: A WEALTH OF OPPORTUNITIES

2013 is widely expected to be a blockbuster year for infrastructure spending, with a large number of operators aggressively expanding their LTE networks.


August 4August 3

August 2August 1August 5

+36% - 14:20: UK’s Andy Murray beats Roger federer for gold in tennis

+46% - 18:20: Men’s team cycling sprint - UK wins gold

London Olympics - UK SMS traffic(Times are local to London - August 1 - August 5)

2:30

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Figure 2: Based on data from SAP.


London Olympics - UK SMS traffic(Times are local to London - August 6 - 8)

August 6August 7August 8

+10%+18%+ 46% +8%

1:30

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spending, with a large number of operators aggressively expanding their LTE networks.

TOUGH COMPETITION

But network upgrades aren’t the only item on the business agenda. Operators also have to develop strategies and capabilities to compete against new rivals.

Increased penetration of smartphones has opened the door to powerful and disruptive actorsofferingOTTservices.Theseservices— which include Apple’s Facetime, Google

Voice and Skype — allow messaging and VoIP calls between users. While these free services may have a strong appeal to customers, they have a decidedly negative impact on operators’ bottom line.

Analysts estimate OTT messaging revenues as much as $13.9b, or 9% of message revenue, in 2011. This decline has led some to wonder whether most incumbent provid-ers are not facing their “Kodak moment”. By wayofbackground,Kodakfiledforbank-ruptcy protection in 2012 after recognizing its products were obsolete and the competi-tion was insurmountable. Similarly, mobile

July 28July 27

July 29July 30July 31

+36%: 21:10: USA wins gold in Men’s 4 x 200m freestyle relay (swimming)

London Olympics - UK SMS traffic(Times are local to London - July 27 - July 31)

2:30

3:30

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5:30

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10:3

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players are now struggling to compete against more agile and innovative newcomer companies, as well as OTT providers.

OPERATOR ASSETS

However, it would be a huge mistake to count operators out of the Digital Economy race too soon. Operators own critical assets they can leverage to build competitive advantage, establish themselves in a

positionofstrengthanddriveprofitablegrowth in this new era.

First and foremost, operators — because they are network operators — control the backbone of the Digital Economy: connectivity.

But owning the network is not enough. To avoid being relegated to the role of a “dumb pipe,” operators must also be able to capitalise on their successful track record of service delivery,includingfive9sserviceavailability.

UK Olympics - Opening Ceremonies(UK SMS traffic - 27 July 2012 17:00 - 28 July 2012 03:00)

Normal Traffic

Opening Ceremony Traffic

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22:30 -22:40: +137% Team Great Britain enters the stadium during Parade of Nations

23:50 +56% official opening of games Queen’s speech

00:20 +25% IOC President speaks

Pre-ceremony - up to 56% of normal

21:40 +40% Rowan Atkinson “Plays” during Chariots of fire

21:10 +32% Ceremony begins

21:40: +40% The Queen parachutes in 22:30-22:40 +137% Parade of Nations begins 23:50 +56% Team GB enters the stadium.


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Operators also have proven security and data integrity capabilities that will increasingly appeal to business customers as adoption of cloud-basedmodelstakeoff.

What’s more, operators also have a long -standing relationship with their customer base. This puts them in a unique position to act as digital service brokers between this large audience and a multitude of partners that want to reach this audience with content,softwareornewservicestooffervia the mobile channel.

Pursuing this model — often referred to as the Teleco 2.0 model (1) — would allow Com-munications Service Providers (CSPs) to be

the conduit between these ‘upstream’ partners and their traditional ‘downstream’ customer base, thus increasing their reach, presence and value-add.

Finally, CSPs have insights into a vast quantity of data about their customers, such as service usage patterns, location -based activities, roaming history and on-device behaviour on a daily basis. This impressive store of customer information represents a largely untapped monetisation opportunity for operators in an increasingly data-centred economy.

So, how do CSPs move forward to imple-ment the right strategies and — ultimately

Porter strategy

Telco 2.0 strategy

Nature of smartness

Characteristics

Cost leadership Happy Pipe Smart network Cost efficiency - minimal network, IT and commerical costs. Simple utility offering.

Differentiation Full-service Telco 2.0

Smart services Technical and commerical flexibility: improve customer experience by integrating network capabilities with on and third-party services and charging either end user or service provider (or both).

Figure 5: Based on data from STL Partners. www.stlpartners.com/telco2_index.php

FOOTNOTES

1. As originally defined by STL Partners


— succeed in the digital era? We believe they will need to focus on some key areas to drive profitable growth in the new Digital Economy.

• CSPs should fully leverage their scale, superior reliability and service delivery capabilities, to invest in new business models in areas such as Cloud and Mob- ility. Operators such as China Telecom or Telstra in Australia have already adopted thisstrategywithsuccess.Theyofferon-demand business solutions to a variety of business customer segments, in particular targeting small and medium size businesses. Other mobile operators, such as Rogers Communications in Canada, are launching business-oriented mobile app stores. This is part of a larger efforttobecomeaone-stopshopforbusiness customers, providing everything mobility-related, including mobile app hosting and mobile device management.

• Large providers should also think beyond connectivity. Telefónica and SingTel are perfect examples of what operators can achieve. They have transcended their traditional organisational boundaries, and

created new digital divisions to seize new opportunities including mobile commerce and machine-to-machine communications (M2M) in order to generate incremental revenue beyond their traditional services. Telefónica’s direct to bill initiative is a strik- ing example of how an operator can lever-age its billing relationship with its mobile customers to increase sales of digital goods and services, while learning to partner — not compete — with OTT players.

The monetisation of subscriber data, in accordance with privacy laws, is also emerging as a strong opportunity for CSPs to grow their revenues. By leveraging the vast amounts of customer data they own — in real-time and at scale — CSPs can gain advantage in two important ways. They can servetheirexistingcustomersmoreeffec-tively, and they can also use the customer information to take advantage of opportuni-ties in new markets — such as proximity marketing or mobile advertising — where customer data is key. To accomplish this CSPs will need to adopt a highly scalable foundation suited for the real-time world. An examination of the results achieved by

2013 is widely expected to be a blockbuster year for infrastructure spending, with a large number of operators aggressively expanding their LTE networks.

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T-MobileUS,forexample,confirmsthat an in-memory based platform is very well suited to provide such a foundation.

Fortune smiles on the brave. It is time for CSPs to make bold moves to develop their growth strategy in the digital era. They have the necessary assets to create new growth engines and focus on the abundant oppor-tunities in the Cloud and Mobility markets. Moreover, operators can innovate and invent new data-driven business models and services (such as proximity marketing). If operators can arm themselves with the correct capabilities and business models, they can seize these opportunities, create lucrative new revenue streams and prosper from the Digital Economy.

Jens Amail is Senior Vice President and General Manager for Services Industries at SAP as well as the Business Unit for Billing, Revenue and Innovation Management. Prior to joining SAP in 2008, Jens was with Siemens Communications for 10+ years in a variety of Senior Executive and General Management roles both in Europe and the US. Jens has a broad cross-functional background in the Communications Industry with Executive assignments in Sales, Services, Marketing, Solution Management and Operations.

Stephan Gatien is a Global Lead within the Telecommunications Business Unit at SAP focusing on Business Analytics and Database & Technology. In that capacity, he is respon-sible for the analytics and data platform strategy in the industry, including SAP HANA, oversees the related solution activities and leads the analytics and data platform go-to-market activities globally Prior to joining SAP, Stephan was with Telus where he held a variety of management roles in the wireless division of this Canadian operator.

However, it would be a huge mistake to count operators out of the Digital Economy race too soon. Operators own critical assets they can leverage to build competitive advantage, establish themselves in a position of strength and drive profitable growth in this new era.

PART TWO STRATEGIES fOR DRIVING REVENUE

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Mobile industry watchers have been predicting the death of the humble text message for over a decade, but a raft of recent research confirms that SMS is very much alive and kicking.

Marking the 20th anniversary of SMS, U.K. analystfirmPortioResearchpointsoutthatSMS has been very successful, generating approximately $821 billion for operators worldwide since it was invented in 1992.

Overall, worldwide mobile messaging was the highest earner in the industry, raking in $179.2 billion in 2010 alone. Portio Research forecasts that this total will increase to more than $280 billion in 2014, and exceed $300 billion by 2016. Of this total, SMS alone will generate $155 billion worldwide in 2014, and "itpromisestocontinuetoplayasignificantrole in revenue terms in the coming years," the report said.

PERVASIVE AND PERSONAL

It’s the simplicity, pervasiveness and sheer dominance of text messaging that has made it the world’s leading data communication tool. People everywhere on the planet can

(and do) use their mobile phones to send and receive text messages.

Veteran mobile author and analyst Tomi Ahonen estimates people sent a whopping 6.1 trillion text messages in 2011, up from 1.8 trillion in 2007. Meanwhile Informa Telecoms & Media state that total SMS trafficwillreach8.7trillionby2015,up from over 5 trillion messages in 2010. In itsnewestforecastanalystfirmPortioResearchcalculatesthattotaltrafficwillreach nearly 10 trillion messages by 2015.

Clearly, SMS is THE most ubiquitous, non-verbal communications medium in the history of mankind. Today, SMS can reach over 5.4 billion people around the world — over 77 percent of the world’s population.

In developing countries SMS plays a special role, transforming lives and economies at an amazing scale. Innovation in these regions also allows companies, organisations and governments to harness simple text mes-saging and achieve extraordinary results. From life-simplifying reminders to life-saving medical advice, text message services are changing the nature of commerce, banking, education, healthcare, news reporting and political participation.

Long Live SMSBy William Dudley, Group Director, Product Management, SAP Mobile Services

PART TWO: STRATEGIES FOR DRIVING REVENUE


In developed markets SMS is by far the most effectivewayforpeopletocommunicatewitheach other — and connect with companies. Whether chatting with friends, or receiving alerts from banks and favourite brands, text is the primary communications tool.

CONTINUING TIDE OF TEXT

Significantly,eventheadvanceofsmart-phones — chock-full of features, functional-ity and a wide variety of mobile applications — hasn’t changed consumers’ dependence on text messaging to connect with the world around them. In fact, a recent consumer study from Deloitte shows that SMS holds the lead. More consumers than ever prefer-ring texting, and the vast majority (90 percent) of smartphone users sending at least one text message per day.

Another trend that shows no signs of slowing is text use among teenagers. In the U.S. this demographic relies on text more than any othercustomersegment.ResearchfirmNielsen,whichbasesitsfindingonavarietyof data including monthly survey results from 300,000 consumers, reports that texting has tripled, with teenage girls sending 40 percent more text messages than boys. That’s an average of 3,952 text messages per month. It’s a continuing tide of communication Nielsen calls a “mobile data tsunami.”

In other countries text messaging continues to dominate. In Canada The Wireless Telecommunications Association reports the number of personal text messages sent every year has nearly quadrupled since 2008 and hit a whopping 78 billion messages in 2011. In the U.K. the Ofcom Telecommunications Market Data Update Q1 2011 reports the total number of SMS and MMS messages sent in Q1 2011 was 36.9 billion, up 22.7 percent over Q1 2010.

THE IMPACT OF OTT

Amid this stellar growth, some analysts wonder if the text messaging trend could flipfromgrowthtodecline.Newmessagingcapabilities bundled with iPhones and Android phones, as well as the advance of OTT messaging services and applications are among the root causes for the recent dip in SMS volumes in mature markets such as Philippines and Taiwan. News that OTT player WhatsApp reported hitting the mile-stone of ten billion messages a day further suggests operators could be vulnerable to this new competition.

However, Analysts point out the race is far from run. It estimates that companies like WhatsApp and BlackBerry will generate 35 percentofthetotalmessagingtrafficin2016, but only 8 percent of the revenues.

28

Moreover, SMS will continue to dominate messaging and revenues, generating 42 percentofthetrafficandsome65percentof total income.

Indeed, Informa is not convinced that OTT apps and services might undermine estab-lished text messaging habits. It argues that many factors — including mobile operator pricing strategies, the penetration of mobile broadband and customer requirements to more open communications — will “determine how quickly and to what extent substitution occurs.”

OPEN RULES

People are empowered by SMS to commu-nicate with anyone who has a mobile phone. However, alternative messaging apps are limiting, not liberating. Unlike text messag-ing, these OTT services operate in a vacuum.

Instead of overarching communities that span the planet, they create isolated islands ofuserswhoarecompletelycutofffromfriends and family members on the basis of the handsets and software they use.

Figure 1: Based on data from Nielsen.

Average number of messages exchanged per monthBy age and gender, Q3, 2011

802604

femaleMale 13-17 18-24 25-34 35-44 44-54 55-64 65+

3,417

928

1,914

709434

167 64


A Facebook user and a person using iMessage may be good friends in real-life, but the fact theyusedifferentservicespreventsthemsending and receiving messages.

Thisfliesinthefaceofwhatcommunica-tions is all about, and presents opportunities for mobile operators to bridge the gap. There are exciting and lucrative options to consider. Some mobile operators will choose to work with OTT players, enabling them to achieve the integration of messag-ing communications. Others will follow the lead of operators like Telefónica, which recently launched a free mobile application that combines free text chat, voice calls, picture and location sharing between users.

Interoperability will also be delivered by the GSM Association standard called Rich Communications Suite (RCS), which includes a next-gen, real-time, presence- enabled messaging component that also

interworks with the existing SMS eco-system. Indeed, many of the operators featuredthroughoutthisfirsteditionof the Mobile Operator Guide are betting on RCS to drive an interoperable, back- ward compatible messaging medium for subscribers and — ultimately — pave the way for new and innovative services.

NO LIMITS

Technology advances like RCS will allow messaging — including text messaging — to evolve and continue to account for a signi-ficantshareofoperatorrevenues.Thefuturefor OTT providers, however, is not quite so positive. Spoiled by choice and delighted by the freedom to communicate with anyone (and not just people that use that the same application), consumers will no doubt vote with their feet. It’s clear that many of the OTT players will simply fade away.

Unlike text messaging, these OTT services operate in a vacuum. Instead of overarching communities that span the planet, they create isolated islands of users who are completely cut off from friends and family members on the basis of the handsets and software they use.

30

In the meantime, SMS-compatible1 services from companies including textPlus will continuetoflourish,offeringcustomersmore features and greater reach. But it’s not just person-to-person messaging that will increase. Growth will be also be driven by a desire from companies, businesses and brands to connect with their customers (and potential customers) via SMS.

Research underlines the pivotal role of mobile in campaigns to engage with custom-ers, encourage interaction and boost loyalty. From consumer facing brands that use text messaging to deliver brand messages and links to downloadable content and perks, to large retailers that cleverly use text messaging to deliver product vouchers and drive cus-tomer loyalty, the central role of SMS is clear.Perhapsthebestconfirmationcomesfrom Coca-Cola, that declared that SMS is the “number one priority” in its comprehen-sive strategy to reach a global audience and increase customer engagement. Analysts termed it a “bombshell announcement” because other marketers quickly followed suit, launching strategies with mobile messaging at the center.

Ironically, the rise of mobile apps, initially hailed as a new channel to the customer that could potentially dethrone SMS, has actually pushed text messaging growth to a new level.

Brands and marketers, as well as applica-tion developers, are harnessing SMS to extend the life of their apps, keeping their users posted on updates, breaking news, location-based opportunities, campaign perks and other important information. More importantly, text messaging allows brands and marketers to re-connect with customers who haven’t used their apps recently — or even deleted it altogether. The result is a booming Application-to-Person (A2P) market Jupiter Research estimates will be worth $70.1 billion by 2016.

POSITIVE OUTLOOK

Clearly,thenextfiveyearswillseeoperatorsin many parts of the world leverage their all-IP networks, but even this progress will not shut the door to SMS. To the contrary, LTE networks using IMS infrastructure will lay the groundwork for messaging services

It’s the simplicity, pervasiveness and sheer dominance of text messaging that has made it the world’s leading data communication tool.

FOOTNOTE:

1. SMS-compatible services include some OTT service providers (also known as NUVOs or Network Unaffiliated Virtual Operators that inter-work with the SMS ecosystem. This stands in strong contrast to other OTT providers, such as WhatsApp, that do not offer SMS interoperability.


that will remain interoperable with today’s text messaging. In other words, there will be no interruption in service, or even reach.

The humble text message that just cele-brated its 20th anniversary has seen a lot ofchangessincethefirstSMSwassentin

1992 between Neil Papworth (of Sema Group Telecoms) and Richard Jarvis of Vodafone – the message read “Merry Christ-mas”. Today, SMS is the most widely used mobile data service, with two-thirds of the world’s population using the channel to connect and communicate. From a business

Figure 2: Source: Juniper Research. (1)

Global revenue from A2P SMS split by eight key regions 2016

North America

Western Europe

Latin America

Africa & Middle East

Central & Eastern Europe

Rest of Asia Pacific

far East & China

Indian Sub Continent

FOOTNOTE:

1. www.juniperresearch.com/reports/Mobile_Messaging_Markets

32

perspective, SMS is expected to remain asignificantsourceofrevenuesandtrafficfor mobile operators on a global basis for years to come. The bottom line: the advance of an all-IP world will transform SMS, but text messaging will also continue tobealiveand well.

William Dudley has 25 years experience building and managing telecommunications network infrastructures. He leads SAP Mobile Services Messaging Team, which focuses on solutions including inter-operator SMS and MMS products (P2P) and mobile messaging hubs and services (A2P SMS and MMS). Dudley also provides industry commentary to both internal and external mobile industry publications, through analyst and media interviews, and is active in several industry groups. http://scn.sap.com/people/william.dudley/content

http://scn.sap.com/people/william.dudley/content

http://scn.sap.com/people/william.dudley/content


SMS is ubiquitous, universal and widely regarded as the truly native language of mobile. However, this phenomenon, and the massive development of SMS since the last years of the 20th century, has not been without its challenges around enabling — and guaranteeing — message delivery.

Notably, there have been challenges in North America,wheredifferencesintechnologiespreventedthelaunchofoff-netmessagingfor a few years. In contrast, almost the rest of the world was well progressed in its adoption of inter-operator SMS based largely on homogenous GSM standards.

Thesolutiontothetechnologydifferences in North America was provided by hubbing

services dedicated to message protocol conversion. Having met the domestic challenges of the North American market, international messaging between non- GSM U.S./Canadian operators and their GSM counterparts worldwide soon also benefittedfromthetechnologyand connectivityofferedbythehubsolution.

In developing countries, scarce human and technical resources within operators across these markets has accelerated the requirement for hubbing services. In the case of Tier 1 and 2 operators, for example, hubbing has tended to be a niche solution. In other words, the solution enabled “gap-filling”inamobileoperator’sfootprint, thus satisfying subscriber demand for international SMS P2P connections when that operator’s own roaming agreements werenotsufficienttoprovidetherequiredmessaging interconnects.

Moving To The SMS Hubbing Model By Robert Rose, Senior Director, Global Operator Services, SAP Mobile Services

In developing countries, scarce human and technical resources within operators across these markets has accelerated the requirement for hubbing services.


34

MAKING THE MAINSTREAM

The situation began to change when the GSM Association launched the Open Connectivity project in 2005. By seeking to manage and regulate (in a light-touch manner) the development of peering hubs for person-to-person SMS the GSMA effectivelyendorsedthehubbingconcept.This, in turn, ensured the adoption of hubbing as a mainstream business practice for the global operator community.

Since 2005 the major hub providers have seen a steady growth in demand for their services. This has resulted in the develop-ment of an abundant revenue stream based on the termination charges on inbound trafficdeliveredbyhubs.TheabilitytodrivenewrevenuesfromadditionalSMStraffic — possible because hub prov-iders have extesive global reach and the ability to provide two-way access to operators previously unreachable — has been an added attraction over and above the greater reach achieved.

Since term fees are paid on a strictly per- message basis, this revenue source clearly increases in proportion to the organic as wellasincrementalgrowthintraffic.Asaresult,whatmightfirstappeartobeaminorcontributor to the Roaming Department P&L account belonging to a mobile

operator can actually become a much moresignificantbenefit.

GOOD BUSINESS SENSE

Today, economic pressure on most oper-atorsisnowdrivingevenmoretraffic(andmore revenue for the networks). Headcount cuts,affectingeventhemost-establishedoperators, are reducing their ability to managetheirinterworkingactivityeffectively.

As a consequence, operators are recogn-ising that a hub can enable them to out-source the management burden around some of their cross-border messaging traffic.Thisapproachalsoreducesthemanagerial overhead around areas such as the negotiation and maintenance of bilateral agreements with destination operators and, whentrafficisflowing,theupkeepofvariousnumber ranges within the SMSC.

Routingalltrafficforaparticularcountrytoa hub mitigates number range management tasksanddeliversbusinessbenefit.Asoperators come to embrace the idea of delegating responsibility for some cross-borderSMStraffic,theyalsodiscoverthatthe more routes they outsource to the hub provider, the more they can increase their revenue“take”fromtheirinboundtraffic. In the end, what started out as a simple

As a consequence, operators are recognising that a hub can enable them to outsource the management burden aroundsomeoftheircross-bordermessagingtraffic.


exercisetooffloadahandfulof“awkward”destinations soon becomes a full-scale outsourcing venture.

GROWING REVENUES

Thefinancialecosystemsurroundingcross-border P2P SMS is a complex matrix of MO charges and MT payments. For hub providers, managing this is well worth the effortaslongastheycancontinuetomakea margin on the connectivity services they provide.Inviewofthisdynamic,trafficthrough hubs will continue to grow. Impor-tantly, the opportunities for operators to cultivate a worthwhile revenue stream will also grow in parallel.

However, it’s worth noting that outsourcing can impact the revenues operators poten-tially gain from their bulk messaging (or “enterprise messaging”) business. This is becauseoutsourcingallmessagingtrafficmeans outsourcing bulk messaging as well.

Bywayofbackground,thistrafficwouldhave been reliant on the prior, direct connect, bilateral routes. Obviously, in cases where these are replaced by a hub’s connections for P2P business, the non-P2P trafficneedstosecureitsownroutingand, potentially, its own commercial agreements.

Real-world examples of this problem arecurrentlybeingaddressed.Effortstoresolvethiseffectivelywillnaturallyrequireflexibilityonbehalfofbothoperatorsandhub providers.

In summary, in just over ten years subscrib-ers’ need for global two-way communication via SMS has become the fundamental driver of mobile network data revenues. While domestic interworking is mainly addressed through bilateral relationships, cross-border trafficisincreasinglybeingroutedthroughthe established, peered hubs. Though this trend is a consequence of the expedient and effectivesolutionthatahubconnectioncanprovide, the opportunity to develop a new and worthwhile revenue stream is now — more than ever — an incentive for operators to subscribe to the hubbing model.

A 20-year veteran of the information systems business (both fixed and mobile), Robert Rose began working in the mobile industry as a con-sultant to British Telecom’s mobile operations subsidiary Cellnet. Since 2004 Robert has guided SAP Mobile Services’s international development in P2P messaging services.

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from the rural regions, where farmers and small businesses use mobile to manage their workday, to exciting city centres where youth — in particular— rely on mobile to connect with friends and family 24/7, Latin America is more connected than ever before. In fact, making or receiving a call or text message in Latin America has never been easier. A new report titled Maximising Mobile, the third in a series on Information and Communications for Development published by the World Bank, reveals that nearly 98 percent of the region’s population have mobile cell signal and 84 percent of households use a mobile service.

On average 81 percent of subscriptions in Latin America are prepaid. Understandably, many in the region use mobile phones to make voice calls, averaging 141 minutes of talk-time a month. In most markets the vast majority of users (97 percent in Argentina, for example) regularly use SMS to communicate.

Clearly, the level of growth in mobile usage will continue, expanding into ever more rural areas across Latin America. It marks what the report calls “the beginning of the mobile revolution.”

SMS LEADS THE PACK

Interestingly, this revolution also brings a boost to text messaging services. But it’s not just about operator services allowing people with ordinary feature phones to communicate. Analysts note that text messaging continues to provide a solid foundation for a wide range of services, from banking to basic education, to widening access to health information. Against this backdrop, it is clear markets like Latin America — not the more devel-oped markets of Europe and North America — will lead messaging growth and innovation.

Feature phones are the focus because Latin America’s smartphone market is still in its infancy.ResearchfirmPyramidResearchreports that the smartphone segment in Latin America will grow to 48 million in 2014. This is a marked increase, but doesn’t negate the fact that Latin America continues to lag behind the rest of the world in smart-phone adoption.

Butthisgapalsooffersmobileoperators a tremendous opportunity to wring more value out of text messaging. Ironically, it is also the low penetration of smartphones that has kept over-the-top (OTT) players

Latin America Offers Big SMS Opportunites


http://www.worldbank.org


Figure 1: Based on data from Infodev. www.infodev.org/en/Document.1178.pdf

Maximising mobile for development

World’s population with mobile cell signal

Over 6 billion mobile subscriptions worldwide

75% of the World now has access to a mobile phone

Growth of global mobile subscriptions

High-income countries Developing countries

2000 0.7 billion subscriptions

2010 5.9 billion subscriptions

23% 77%

29%71%

Send text message Take pictures or video with mobile Use mobile internet

Rise of non-voice mobile usage% National population

KENYA MEXICO INDIA INDONESIA EGYPT (ARAB REP)

UKRAINE

31 29

82

61

18

49

2638

22

7258

15

72

48

1910

89 96

Pace of mobile phones spread globally (billions)

8

6

4

2

0

2003 61%

2010 90%

1876 Alexander Graham Bell holds the first two-way telephone conversation

The number of mobile subscriptions will soon take over the world’s population

1978 first commerical cellular mobile services established

2002 There are over 1 billion mobile subscriptions, passing fixed-line users

1875 1900 1925 1950 1975 2000 2011 2015

Global population

fixed-line subscriptions

Mobile subscriptions

1961 85 years later, fixed-line subscriptions reach 100 million

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at bay. This, in turn, has slowed the advance of messaging apps that enable smartphone users to send unlimited free messages to their friends. These OTT messaging apps such as WhatsApp, Viber and Apple’s iMessage are cannibalising SMS revenue and changing the way mobile users communicate with their peers.

This is not the case in Latin America, according to ABI Research, developed markets have experienced a marked decrease in SMS sent because of the rise of OTT alternatives, but the drop in regions such as Latin America and Africa is not assignificant.

INTERNATIONAL SMS REqUIREMENTS

Clearly, feature phones have several more years to thrive in Latin America. This provides operators a window of opportunity to generate strong revenues from their domesticandinternationalSMSofferings.The international SMS business, for example, provides operators with the potential to drive significantvolumeandearnheftymargins.Opening new international routes, securing two-way service for their customers and marketing attractive bundle packages are also part of a strategy that would certainly help improve the bottom line.

Personal Paraguay, a leading mobile operator in Paraguay and part of Personal Telecom group, has extended its international SMS coverage to reap significantbusinessbenefits.“SMSisanimportant part of how our customers communicate,” notes Miguel Ruiz, Personal Paraguay Roaming Manager. “Our cust-omers want to be in touch with friends, family and colleagues whether they are in the same neighborhood, or living in a differentcountry.”

More importantly, customers expect their text message communications to be dependable and robust. “To achieve these SMS connections is a huge task that requires negotiations with operators and technical tests to ensure SMS quality and reliability,” Ruiz explains. To streamline the process and deliver customers the service they expect, Personal Paraguay has teamed up with SAP Mobile Services. “The hub SMS service helps us to have complete coverage with all operators in North America, the U.S., Canada and Mexico, as well as operators across LATAM, Europe, Asia and Africa.”

SMS hubbing also allows Personal Paraguay the capabilities to cater to the portion of its customer base that are Paraguay citizens living and working in neighboring Argentina. “About 1.5 million Paraguayan people have


emigrated to Argentina, and they want to be in contact with friends and family in an affordableway,”Ruizsays.Theansweris International SMS, a popular service that alsorepresentsanimportantdifferentiator. In a nutshell, the service allows customers to send an SMS to a Telecom Personal Argentina customer and be charged the same rate as a local SMS. “There are a lot ofopportunitiestobegainedbyofferingcustomers services that pair a simple way ofcommunicationwithreasonabletariffs.”

ATTRACTIVE PRICING

SMS is expected to continue accounting for a major proportion of value-added services revenue as services like banking, mobile money and M2M gain traction. Another driver is social media, the pastime and passion of nearly 100 percent of the Latin American population using mobile or Internet, according to comScore. While social media isn’t a new phenomenon, the growth is phenomenal.

To take advantage of this robust growth in text messaging mobile operators are alsomigratingtomoreflexiblepricing to encourage use and to appeal to new customer segments. A prime example is Tigo Colombia, a mobile operator that is developing a new approach to enable users to do what they want most: communicate with family and friends in other countries ataffordableprices,observesJuanFelipe Velasquez, Latam International Roaming Coordinator at Tigo Colombia.

At a deeper level, Tigo Colombia’s business model is based on partnership to ensure access to key capabilities and technologies. According to Velasquez, the decision to cooperate with SAP Mobile Services is driven by the internal requirement to keep pace with innovation. “Many times we fail to seize opportunities because technology changes so fast and we sometimes neglect segments that do not have access to new technologies.”

Against this backdrop, it is clear markets like Latin America — not the more developed markets of Europe and North America — will lead messaging growth and innovation.

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EXCITING OPPORTUNITIES AHEAD

What are the highest areas of opportunity on the operator agenda?

Personal Paraguay’s Ruiz is squarely focused on extracting more value out of offeringawidevarietyofpackageswith truly personal communications at the core.

“Our slogan is ‘Cada Persona es un mundo — Each person is a world.’ This means delivering each customer the services and bundles that are in tune with their lives. They are at the center.” Looking ahead, Personal Paraguay is also planning to deploy LTE/4G “with IPX to support new services” that satisfy customer requirements for quality, coverage and convenience.

Tigo’s Velasquez says he is also looking to a future where continued cooperation between the stakeholders — operators, suppliers and users — creates a win-win for everyone. Additionally, it is important to add these services onto an IPX, where connectivity meets users’ needs for quality and desire to communicate on their terms.

Velasquez is also bullish about the outlook for value-added services that harness SMS in new ways. Chief among these is M2M. As he puts it: “I think that the next step in our industry is machine-to-machine, where we can connect all the machines with machines — and with the people managing them — around the world with simple SMS.”

Whether it’s person-to-person or machine-to-machine, it’s clear that messaging is king.

A promising and fast-growing service that should not be ignored is A2P, or Application-To-Person messaging. In this scenario, soft-ware applications and organisations, such as enterprises and governments, establish a one or two-way communication channel with people using SMS.

Therevenuepotentialissignificant.Accord-ing to a study published by Portio Research Ltd,aresearchfirmbasedintheU.K.,for the period 2011-2016 worldwide A2P SMS revenue is expected to outpace Person- To-Person (P2P) SMS revenue and grow at a CAGR of 13.1 percent.

Looking ahead, Personal Paraguay is also planning to deploy LTE/4G “with IPX to support new services” that satisfy customer requirements for quality, coverage and convenience.


Asofend-2012,A2Ptrafficrepresented23percentoftotalSMStrafficworlwide,and 33 percent of SMS global revenues. In Latin America,A2Ptrafficaccountedfor15.2percentoftotalSMStraffic,significantlylower compared with the U.S. and Canada. Thiswouldindicatethereisasignificantpotential for A2P growth in the region in the years ahead.

Indeed, the outlook for A2P SMS growth is positive. A key driver: the advance of more conversational commerce and advertising, requiring marketers and retailers to deliver

campaigns,offersandbrandmessagesviatext messaging. Banks are also harnessing SMStosendtransactionnotificationstotheir clients, a convenient service that con-sumers have come to accept and appreciate.

These examples show there is a lot of mileage — and value — left in text messag-ing. In Latin America, in particular, the growth of SMS shows no signs of slowing, apositivetrendthatbenefitsmobileopera-tors that develop the mix of capabilities — billing, bundles and international coverage — their customers expect.

Figure 2: Based on data from Portio Research Ltd.

P2P & A2P SMS revenue – worldwide (in USD billions, 2009-2016F)

SMS

Reve

nue

(in U

SD b

illio

ns)

2009 2010 2011f 2012f 2013f 2014f 2015f 2016f

73.4

25.5 30.7

44.2

27.4

52.360.4

70.175.1

78.585.7

94.295.593.689.5

83.9A2P SMS Revenue

P2P SMS Revenue

Note: The sum of A2P and P2P SMS revenues may not add up to total SMS revenue because of rounding off errors.

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By 2015 Latin America is forecast to have more than 750 million mobile connec-tions, with an average penetration rate of 122 percent. According to the GSMA, the region is one of the world’s largest mobile markets by volume. With HSPA and LTE connections reaching more than 305 million by 2015, mobile broadband will be a key driver of growth. It will also be the primary means of Internet access for people across the region.

Sebastian Cabello, Director of Latin America, GSMA commented: “As well as

being one of the largest, Latin America is also one of the world’s fastest-growing mobile markets. We have experienced 13 percent growth per year for the past four years, driven byincreasingaccessibility,flexibilityandaffordabilityofmobileservices,andboostedbytheincreasingaffluenceofthe region and the relative shortage of thefixedlineinfrastructure.”

STRONG GROWTH DRIVES PENETRATION, USAGE

SMS traffic break-out-regional (in billions, 2009 – 2016F)

Region 2009 2010 2011 2012F 2013F 2014F 2015F 2016F

Latin America

P2P 203.4 285.3 341.7 381.6 417.6 443.7 460.5 478.3

A2P 22.7 32.9 50.6 68.6 84.7 101.0 118.1 125.8Note: Sum of regional numbers may not equal total due to rounding off errors.Figure 3: Based on data from Portio Research Ltd.



Imagine identifying a cyberthreat such as a virus, worm or malicious code on your company’s commun-ications network. You know how to remove it, but you also believe that your company isn’t the only one under attack. You tell your boss that others, including your comp-etitors and military commun-ication networks, might likewise be affected (but their IT experts might not have noticed the threat yet, or simply haven’t figured out how to stop it).

As a courtesy, you’d like to alert these other partiesandofferyourassistancetohelpthem protect their networks in anticipation of the virus, or help them remove it altogether. Unfortunately, if you did that, you would put your company and yourself in danger of lawsuits and in violation of antitrust laws, as

wellasmanyothersignificantproblems.Howcanthispossiblybeconsideredefficient,effective or “good business”? It’s not.

If you’re like the CTIA-The Wireless Association, and many of its members, then you already know that private sector net-works are targeted every day by hackers, criminals and nation-state actors for cyber exploitation and theft. The scenario I des-cribed above, as well as the attacks that confront the private sector daily, are pivotal reasons why we support the Cyber Informa-tion Sharing and Protection Act [(CISPA) (H.R. 3523)].

This legislation would pave the way for efficientandeffectivebusinesspractice,allowing our members to communicate with all the stakeholders — competitors, federal government agencies, IT directors, academia and experts — to identify potential issues and create solutions before, during and after the problem.

Cybersafety: Everyone’s Responsibility By Steve Largent, President & CEO, CTIA-The Wireless Association

CTIA and its members have already taken an active role in addressing cybersecurity, but time isn’t on our side because the hacker community is moving fast.


44

THE CYBERSECURITY ECOSYSTEM

The CISPA’s sponsors, U.S. House of Representatives Permanent Select Comm-ittee on Intelligence Chairman Mike Rogers (R-AL-3) and Committee Ranking Member Dutch Ruppersberger (D-MD-2), recognise that cyberthreat intelligence sharing and providing clear authority for the private sector to defend its own networks is critically important in today’s world.

When passed, CISPA, which has already been approved by the U.S. House of Representatives and is awaiting the U.S. Senate to vote, will carefully balance appro-priate privacy protections with immunity from lawsuit protections so that private and public entities are genuinely incentivised to share cyberthreat information to help our nation get ahead of the challenge.

While CISPA is vital, CTIA and its members also want to highlight the importance of other pieces in the cybersecurity puzzle. Of these two are our immediate focus areas.

First, is to educate policymakers and con-sumersabouttheroletheyplayinfightingcyberthreats. Or, as we like to put it, the role these parties play in ensuring cybersafety.

Second, is to remind people that the wireless industry’s ecosystem is made

up of more than the operators and their networks. It now encompasses several other players, including device manufac-turers, mobile app and content creators, operating system developers and infra-structure producers. Quite simply, every single mobile user and company in the wireless ecosystem has an important role in ensuring cybersafety and protecting all of us from cyberthreats.

WORK IN PROGRESS

In recognition of the vast and diverse wireless ecosystem and the need to bring all the stakeholders together to address cyberthreats, CTIA created a cybersecurity working group in March 2012.

This group is comprised of our members, and maintains an ongoing dialogue with gov-ernment agency representatives, researchers and experts from around the country to help protect the wireless industry — and our customers — against cyberthreats.

In particular, this group focuses on sharing:

• Best practices and existing standards (including technical exchange)

• Known vulnerabilities and countermeasures


• Suggestions and ideas on how the industry improves security while being technology agnostic and maintains the openness of the Internet

The working group has a number of initiatives already in the works, but I can’t reveal them yet. However, I can share the new Cybersafety pamphlet, which was written in non-techni-cal terms, and provides consumers with

easy-to-understand tips on how to protect themselves, their wireless devices and their information.

This is important since today’s smartphones and tablets have features and functions that have turned them into mini-computers. Because these mobile devices are also packed with personal information, such as banking and health records, consumers

Figure 1: Based on data from McLaughlin & Associates. National Survey of IT Decision Makers, July 27, 2012.

96% Agree that government should allow companies to exchange information to help identify vulnerabilities and protect users from hacking and cyberfraud

Strongly agree 49.4%

Somewhat agree 46.6%

Strongly disagree 1.8%

Somewhat disagree2.2%

46

need to take more responsibility for the pro-tectionofthissensitivedata.Specifically,consumers need to actively protect them-selves by following simple tips, such as using passwords and PINs. They can also back up their personal information on the cloud, or other external sources, and update the operating systems on their mobile devices.

COLLABORATION IS ESSENTIAL

Education is key to ensuring cybersecurity for everyone, but there’s only so much the working group can do without CISPA. Right now, the working group may only share limited information, so it isn’t helping us to address the real issues at hand: the daily attacks that threaten industry and consumers.

Figure 2: Based on data from McLaughlin & Associates. National Survey of IT Decision Makers, July 27, 2012.

http://files.ctia.org/pdf/IT-Decisionmaker-Survey-FINAL.pdf

How should industry and government proceed on cybersecurity?

Industry should take the lead in defining standards.

Government should take the lead in defining standards.

Industry and government should share information on threats, and work

collaboratively to define standards.

Industry and government should share information on threats

without defining standards.

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0

14.8%

4.0%

68.0%

13.2%


By enacting CISPA, the private sector will be able to better leverage its own cyberdefense effortsinacoordinatedwaywithgovern-ment entities through information sharing to protect the nation’s systems, networks and consumers. Additionally, by helping facilitate the creation of a more robust cybersecurity marketplace, CISPA will lead to expanded research,serviceofferingsandmorejobs for cybersecurity experts. Those are positive outcomesthatwillsurelybenefitournationand our economy.

CTIA and its members have already taken an active role in addressing cybersecurity, but time isn’t on our side because the hacker community is moving fast. Several independent reports have revealed up to 30 percent growth in the instances malware. They also report rapid growth in spyware designedtostealsensitivepersonal,finan-cial and work-related information from mobile devices. To counterbalance this significantthreat,alloftheplayersinthe

wireless industry ecosystem must be allowed to work collaboratively to stem the rising tide.

For more information and to download the cybersafety brochure, please visit: www.ctia.org/cybersafety

Steve Largent has served as President and CEO of CTIA-The Wireless Association® and President of The Wireless Foundation since November 2003. Previously, Largent repre-sented Oklahoma’s First Congressional District in the U.S. House of Representatives from 1994 to 2001. During this time Largent was the Vice-Chairman of the Energy and Air Quality Subcommittee and also served on the Telecommunications Subcommittee, the Oversight and Investigations Subcom-mittee, and the Environment and Hazardous MaterialsSubcommittee.

This legislation would pave the way for efficient and effective business practice, allowing our members to communicate with all the stakeholders — competitors, federal government agencies, IT directors, academia and experts — to identify potential issues and create solutions before, during and after the problem.

http://www.ctia.org/cybersafety

http://www.ctia.org/cybersafety

48

The nature of malware and the entire computer attack spectrum has changed dramatically over the past decade. Originally designed to be disruptive to the computer, today’s malware is no longer the end game, but rather a tool that serves as a means to a new end: criminal profiteering. With that evolution, social manipulation has become a key facilitator in modern attacks, and messaging is the obvious medium through which it is affected.

Social engineering entices potential victims into taking some action that will prove harmful to themselves and/or the device they are using. Social engineering is plat-form-agnostic, cannot be patched, and hasaseeminglyinfinitenumberofanglesthrough which susceptible victims can be manipulated. Further, there are no development costs associated with social engineering, no concerns of cross-platform compatibility issues, and is completely

disposable without penalty – if one social campaign fails, the attackers can quickly andcosteffectivelymoveontothenext.

OPEN FOR ATTACK

The always-on/always-carried nature of mobile devices enhances the potential for social manipulation. Many social engineer-ing attacks succeed because they foster some sense of urgency. Mobile device users may be more distracted while checking or receiving messages (whether via email or SMS). This is because they are encounter-ing these messages during the normal courseoftheirday,ratherthanspecificallysetting aside dedicated time to check messages at their PC. Being distracted a recipient may act more hastily and open messages on their mobile device without thinkingabouttheriskfirst.Further,people’s inherent trust in their mobile devices and the messages received on those devices, can exacerbate the situation.

In concert with evolutionary changes on the malware front, smartphone, tablet and general mobile adoption rates are quickly

Does The future of Mobile Security Lie in the Past?By Mary Landesman, Senior Security Researcher, Cloudmark



outpacing traditional computers. In develop-ing nations users are bypassing traditional computer adoption altogether and moving directly into smartphone and tablet adopt-ion. This leapfrogging to mobile makes perfect sense; mobile devices are generally less expensive than traditional computers and are highly transportable, a distinct advantage in countries where Internet cafes are the norm.

Thecombinationofdigitalcriminalprofit-eering and mobile adoption may well be the perfect storm. Not only does widespread mobile adoption provide a steady and increasing supply of potential new victims; mobile devices are also proving to be cost-effectiveattacktools.Indeed,theeasewithwhich mobile devices can be obtained (either through purchase or theft) signif-icantly lowers the barrier to entry for would-be attackers.

Short of having a crystal ball, it’s not entirely possible to determine the exact nature of the future threat for mobile devices. Regard-less, there are tell-tale signs that mobile

threats are following a similar – yet greatly accelerated–trackfirstwitnessedwith traditional computer threats.

For example, there is currently a thriving gray-hat market for Android users engaged in click fraud and other forms of advertising manipulation. This closely parallels the computer scene in the early 2000s, when Web2.0firstprovidedtheopportunityforaffiliatemarketingrelationships.Asubset ofthoseaffiliatesquicklyrealisedthey could increase their revenue potential by incorporating unethical (and sometimes illegal)meansofgeneratingclicksforprofit.Instead of taking several years to crossover, this practice has already materialised in the mobile arena.

Likewise, traditional spam – problematic since the beginning of email – received a tremendous boost in 2003 through illicit spam proxies distributed by the SoBig worm. This shift has already occurred on smartphones, with a wide range of bulk mail and proxy tools available to would-be spammers who want to use mobile as the

The always-on/always-carried nature of mobile devices enhances the potential for social manipulation.

50

sendingdevice.Inearly2011thefirstobserved spam attack originating from Android devices occurred. This culminated in a mass spam campaign in mid-2012, thus demonstrating mobile’s suitability for use as a spam tool.

SPAM GOES MOBILE

The nature of spam attacks targeting mobile users has also adapted to the new ecosystem. Attackers do not necessarily need to rely on installation of malware or covertphishingattackstoprofit.Instead,amobile attack may simply trick the recipient into agreeing to send premium rate SMS messages. This results in expensive and unexpected charges to the victim, allowing theattackertoprofit.

Indeed, the majority of SMS spam falls into the category of scam or fraud, which is definedasacampaigntoenticetherecip-ient into taking some action that unwitt-ingly results in information disclosure or financialloss.Recentestimatessuggestthat

up to 70 percent of unwanted text messages areattemptsatfinancialfraud.

Social engineering factors heavily in scam and fraud campaigns and, as a result, the exact pitch, or hook, used by the scammer varies by geographical region. Scams offeringfreeWal-MartorBestBuygift cards abound in the U.S., a country where the Wal-Mart and Best Buy chains are well known. In the U.K. scams use PPI compensation or accident claims as the primary hook.

Text messages are a powerful vehicle for reaching people. Currently, SMS marketers claim SMS message open rates are higher than 90 percent and opened within 15 minutes of receipt. By regionalising topics to the victim’s locale, attackers are simply ensuring a higher open and reaction rate for these text messages in an environment that already fosters a high open/reaction rate. (Traditional email, by contrast, has an open rate of only 20-25 percent within 24 hours of receipt).

Attackers do not necessarily need to rely on installation of malware or covert phishing attacks to profit. Instead, a mobile attack may simply trick the recipient into agreeing to send premium rate SMS messages.


Exacerbating the problem, the typical SMS text scam is seldom single-purposed; rather each click through or response from the recipient leads to another possible angle to the scam. For example, a free gift card spam may begin with ‘just’ a survey. However, not only is personal information collected (and sold in aggregate), but the often obscured terms of service for the survey spell out insidious actions such as the inability to cancel the account or the unwitting agreement to send SMS texts to premium rate numbers.

Also,a‘free’offeroftenrequiresthepartici-pant to pay various fees in order to continue progressingtowardsthefinalgiveaway.Thiscan progress to the point that, even if actual merchandise is ever ‘won’, the participant has spent more in up-front fees and unan-ticipated SMS charges than the actual merchandise is worth.

FIGHTING BACK

Mobile devices have already proven to be favourableandcosteffective,bothasanattack tool and as an attack target, with social manipulation playing a key role. Further, the ease of disposal and/or replacement of mobile devices will

naturallyhamperlawenforcementeffortsandmakeitmoredifficulttothwartattacks.

Hopefully, we can all learn from past mis-takes. Central to the success of traditional computer attacks was a failure to recognise or act on early indications that malware had turnedtoprofit.Criminalattacksonmobiledevices are following an accelerated path leading in the same direction. Let’s hope that we will act as quickly and adopt the appropriate counter - measures before the tipping point is reached.

Mary Landesman has over 20 years experi-ence in the security industry and is a widely citedexpertinthefieldofantivirus,malwareand computer security trends. Apollo Research named her the top spokesperson for both malware and phishing, the third for DLP (data loss prevention) and the third most quoted security spokesperson overall. Additionally, she was recently named one of the top 10 women in information security by eWeek. Since 2007, Landesman has also been an annual recipient of a Microsoft MVP award for her work in consumer security.

52

The growing threat of smartphone hackers. Mobile malware and what you need to know

Do you think it’s safe to access sensitive data on your mobile phone? Perhaps you should think again. With malicious programs designed to target cell phones skyrocketing, it’s becoming increasingly dangerous to use your phone without the necessary precautions. Here’s how to prevent malware from taking over your phone... and your life.

What is mobile malwareMalware is software with a malicious purpose. It may be designed to disable your phone, remotely control your device, or steal valuable information. Mobile malware uses the same techniques as PC malware to infect mobile devices.

The real dangers of malware• Bank account passwords are stolen• Private information is captured• The phone is forced to send messages to premium numbers• Phone data is deleted • Device is “bricked” and needs replacing • Malware-infected devices can be used by botnet owners to launch

attacks on digital targets.

The growth of malwareNumber of mobile malware

201020092008200720062005

52 119 229 437

853

2,500

Figure 1: Based on data from Bullguard.


Mobile Number Portability: Increasing Competition And Driving ValueBy Mitul Ruparelia, Director of Sales Engineering, SAP Mobile Services

Mobile operators are understand-ably concerned about subscriber churn and constantly on the watch for ways to prevent it. But this task has become more difficult since the advent of Mobile Number Port- ability (MNP), also known as Wire-less Number Portability (WNP), which allows subscribers to vote with their feet when services are not satisfactory. This is because MNP allows the subscriber to take their phone number with them — even when they switch to another operator in the same country. In principle, MNP simply allows subscribers to retain their phone number. However, the process of porting a number from one mobile operator to the other can be complicated. It involves a number of steps including the initiation of the port from the subscriber, which is the request to the donor network thatstartsoffthehandover.Italsoinvolvesan exchange of porting information among the mobile operators, and results in an update to the network routing scheme and

internal home location registry databases. The turnaround time for this process depends on the country where this takes place because it is dictated by the technology and regulation present in the country in question.

MNP ADVANCES

MNPwasfirstimplementedinthelate1990s in mature European markets such as the U.K. and the Netherlands. The objective was to enable mobile operators to compete for customers on other networks.

To date 70 countries worldwide have imple-mented MNP, and this number continues to increase as new markets and regions advance. Predictably, we see it’s the dominant mobile operators with stronger market share that are less likely to support the implementation of MNP. This is because they perceive it as a scheme that will likely increase the chances that they will lose — not gain — subscribers.

Indeed, this is a realistic scenario, and one thathaseffectivelymotivatedmobileopera-tors to innovate and deliver value-added

24 19


54

services to delight and retain their custom-ers. They have also introduced lower pricing and exclusive packages with unique hand-sets in order to meet consumer require-ments for services and — ultimately — grow their subscriber base.

A prime example of this approach is how mobile operators marketed the Apple iPhone to attract customers to their brand.

In the U.K. Apple awarded Telefónica UK (O2 UK) a two-year exclusivity on the handset, making it the only network sup-porting the iconic device. This gave TelefónicaUKasignificantadvantage,allowing it to report the lowest churn rate in the country. Churn stood at a mere 1.1 percent in both 2009 and 2010.

During the same period other U.K. operators lostasignificantnumberoftheirsubscrib-ers to Telefónica U.K. — no doubt attracted by the Apple iPhone package. In fact our figuresfor2009showthat15percent

of subscribers in the U.K. ported their number from one network to another.

FIERCE COMPETITION

Since the economic slowdown that marked 2008 and 2009, mobile operators across the globe have become more cost conscious than ever before. This shift in mindset is also areactiontofiercecompetitionandmount-ing pressure from regional bodies and insti-tutions to accept MNP. This has combined toresultinasignificantdeclineinoperatorARPU. Another outcome of this is the impact on OPEX and CAPEX budgets, limiting the investments operators can make in key technologies such as LTE/4G.

Regulators and government institutions have moved forward with plans to liberalise markets by mandating the implementation of MNP. This is also the focus in the more mature and saturated markets, where penetration is near 100-percent and thus

Investment in MNP solutions is critical to the capabilities of any telecommunications company to satisfy and retain their customers, as well as successfully complete calls and messages routed via their network.


limits the number of new customers/non- subscribers that can be won by mobile operators in those countries.

MNPclearlybenefitssubscribersbyoffer-inglowertariffsandthefreedomtoswitch. But it also creates commercial and technical challenges for mobile operators across the board. Chief among these is the lack of a standard process that allows operators in

all countries, including those where MNP is not the accepted procedure, to know when subscribers who have chosen to retain their number and to route messages and voice calls to them. This confusion exists because mobile operators, as a default, will typically route voice calls and messages to a subscriber based on pre-allocated number ranges.

Figure 1: Based on data from Wireless Intelligence.

https://wirelessintelligence.com/analysis/2011/04/o2-records-lowest-churn-rates-in-uk/

UK contract churn (%) by operator 2005-2010 (annual average)

20050

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2006 2007 2008 2009 2010

02 (Teléfonica)VodafoneOrangeT-Mobile

(Hutchinson)*

Everything everywhere

56

In cases where MNP has been implemented by the destination country, the originating mobile operator is dependent on either direct GSM connectivity (GSM Forwarding/Onward Routing) with all of the operators in the country to route calls and messages, or they rely on a service provider — such as a voice operator or a SMS hub — to handle both the MNP and delivery.

Choosing not to adopt one of these two options can have a negative impact on the call and message success rate. This was precisely the outcome in January 2011, the year MNP was introduced in India. Two oper-ators in the Middle East region were proac-tively measuring KPIs at the time. They saw a 12 percent increase in failed SMS in the firstquarteralone,whichisquitesignificantgiventhetremendousvolumeoftrafficexchanged between the Middle East and Asian operators.

CRITICAL CAPABILITY

As this example clearly shows, investment in MNP solutions is critical to the capabilities of any telecommunications company to satisfy and retain their customers, as well as successfully complete calls and messages routed via their network.

Clearly, MNP is a good news story for sub-scribers, because it allows them to switch operators and retain their phone numbers. However, it also confronts mobile operators with a variety of commercial challenges. To delight and retain their subscribers and stand up to formidable competition in the marketplace mobile operators must be innovative and agile. To accomplish this operators are well advised to create services tooffermorevaluetotheircustomersandbegin — through outsourcing and partner-ship — to build the capabilities to ensure the successful delivery of all messaging, voice and data.

Regulators and government institutions have moved forward with plans to liberalise markets by mandating the implementation of MNP. This is also the focus in the more mature and saturated markets.


Mitul Ruparelia joined SAP Mobile Services in 2007 as a Pre-Sales Engineer after graduatingwithafirst-classhonours degree in Computer Information Systems. In 2010, he was named the design authority for the Intelligent Hubbing solution, which is a unique, patent-pending technology, allowing mobile operators to increase revenues, reduce operational costs and improve customer experience.

58

At a high level, most Mobile Operators roaming teams are focused on achieving two key objectives: achieving the best possible Quality of Service for subscribers, and optimising the associated retail and wholesale revenues.

HOW DOES AN OPERATOR ACHIEVE THESE AIMS?

First, operators must ensure they have the network connectivity in place to deliver their subscribers’ text messages to their destina-tion. Of course, operators must also enable a reply path to guarantee the delivery of the SMS response.

Second, operators need to have the com-mercial mechanisms in place to monetise themessageflow.

SOUNDS SIMPLE, RIGHT? WELL, IT ISN’T!

Today operators that want to enable this are confronted by a variety of hurdles. To complicate matters, operators’ operating margins are coming under increasing pressure, a situation that can limit the avail-able resources operators can direct toward enablingandmonetisingthemessageflowinthefirstplace.What’smore,operatorsmust cope with the advance of Mobile Number Portability (MNP), a development that has made the messaging landscape even more complex.


Intelligent Hubbing: Easing International SMS Routing Complexity By Mark Weait, Vice President Sales (EMEA & LATAM), SAP Mobile Services

This approach has enabled operators to dramatically increase the number of messages they have successfully delivered on behalf of their subscribers. This, in turn, has sharply increased retail revenues and customer satisfaction.


The outcome: many operators today strug-gle to meet the increasing demands of their customers messaging requirements.

Failing to satisfy the consumers messaging requirements can lead to customer churn as well as revenue and margin leakage. Due to the increasing pervasiveness of OTT players in the market, this has become even more of an issue.

Against this backdrop, many operators are striving to maximize revenues and customer satisfaction by pursuing strategies to inc-rease their SMS delivery footprint. It’s a smart decision, but operators also face some challenges along the way.

ENSURING SMS DELIVERY

Clearly, there are three ways to enable 2-way SMS delivery. Operators can use an SMS hub; they can set up a direct AA19; or they can utilise existing roaming agree-ments. If the operator is focused on ensuring wholesale revenue generation, thenthelastoptionofferslittlevalue.

Therefore,letsfocusonthefirsttwooptions, highlighting the steps operators musttaketorealisebenefits.

Imagine an operator has opted to set up and manage an AA19 base. In this case the

operator would need to invest resources and efforttoensurethefollowingconditionsaremet.Specifically,anoperatormusthave:

An operator at the receiving end that has the desire — and the time — to negotiate and conclude an agreement

A clearing and settlement provider in place to manage the commercial settlement

RelevantSPAMcontrolsandfiltersinplaceto protect the network and subscribers

Resources available to manage the legal, technical routing, provisioning and testing requirements of a new AA19, a lengthy process that can take up to 6 months per connection

Access to the resources necessary to manage the on-going IR21 provisioning needs, a task that — in a country with MNP present — often involves monthly activity

The SS7 controls and monitoring in place to provide end-to-end SMS visibility in case of subscriber complaints

If MNP is present in the country where the operator operates, then that operator must either have an MNP feed, or an SS7 connection in place with all the other operators in that country

60

Areviewofthisdetailedlistconfirmsthatthis is not a simple undertaking. In many African countries, for example, an operator’s AA19 footprint would seldom exceed 50 contracts. However, operators must also reach over 900 operators globally. To complicate matters, MNP will shortly be present in 90 countries, representing over one fourth of all the countries an operator would need to reach.

CONNECTING FOR COMPETITIVE ADVANTAGE

Against this backdrop, many operators are turning to SMS hubs to provide holistic connectivity.

Operators are making this move because by connecting to an SMS hub, they can immediately gain access to an existing interconnected ecosystem.

Figure 1: Based on data from Telco2Research.com. Telco 2.0 Survey, September 2011, 301 Respondents.

www.telco2research.com/articles/SR_google-apple-facebook-microsoft-skype-amazon-disruption-telco2_Summary

NB These projections are based on the sum of a weighted average of respondents’ votes. We regard them as indicative of the overall market effect and relative impact of the players on different areas rather than an absolute measure.

OTT players will have a major impact on the telco business modelTotal projected 3-5 year impact on core services

-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%

Data carriage costs

Mobile data sales

Messaging revenues

Voice revenues

Google

Apple

facebook

Skype/Microsoft

Skype/Amazon

g

g g

g g

gg

gg


Mostly because, by connecting to an SMS hub, the operator can immediately gain access to an already existing interconnected operatorecosystem.Hubscanoffervalueadded services, such as MNP solutions.

In practice connecting to an SMS hub allows operators to access :

• A connectivity footprint far greater than their own, and one that is continually increasing

• Clearing and settlement from day one to ensure wholesale revenues are maximised

• Global MNP solutions that help maximise message delivery success rates and eliminate the management overhead for the operator

• ConstantlyevolvingSPAMandspoofingfilteringsolutions

• R21 provisioning and associated number range management services

• Local support resource with access to end-to-end SS7 visibility (where this is offered)

Such standard hubbing services go a long way to addressing the SMS requirement of today’s operators, but SAP Mobile Services believes that this is not the whole answer, and has therefore evolved its standard marketofferingtodelivergreatervaluetothe operator.

‘HYBRID-SOLUTION’ PATH

Manyoperatorshaveinvestedsignificantresources and money into building their own bilateral footprints for SMS exchange. In Western Europe, for example, many large operators have over 250 direct bilateral agreements already in place, and a number of those are managed AA19 agreements. Clearly, it’s not an investment in capabilities that operators will want to abandon.

What are the other options open to opera-tors? Often operators are advised to go down a ‘hybrid-solution’ path. In this scenario operators maintain their AA19 base and work with an SMS hub provider. Despite obviousbenefits,thispathalsopresentschallenges, particularly in countries where MNP is present.

So, how does an operator manage to successfully route to AA19 connected operators in a given country, as well as via the SMS hub to another operator in that same country, whilst in parallel supporting MNP requirements?

Ironically, the traditional approach to streamline this generally creates more complexity. What’s more, it often forces operators to manage additional and unwanted overhead. This is because the traditional approach requires the operator to manage the routing

62

down to the operator level, as opposed to the country level. Due to routing table restrictions, operators determined to take this path are also confronted by added tech-nicaldifficulties.

PROVIDING AN INTELLIGENT APPROACH

The challenge now is for hubs to provide more functionality, so that operators can remove the complexity associated with routing international SMS from their network to their hub provider. The ideal solution is one that routes each SMS along the optimal route – whether that is via an existing bilateral connection or through the hub providers’ network – all whilst dealing with the challenges MNP introduces.

Taking this approach has enabled operators to dramatically increase the number of messages they have successfully delivered on behalf of their subscribers. This, in turn, sharply increased retail revenues and customer satisfaction. It also drives an increaseofreturntrafficdeliveredviathe

hub and in turn an increase in wholesale revenue with the added comfort of knowing those MT payments are guaranteed.

Thereareadditionalbenefitstothisapproach, such as reducing the complexity involved with managing SMS routing and MNP management. But it’s not just about delivering an operator immediate business benefits.ThisapproachalsofreesuptheRoaming team, enabling them to focus more timeandeffortinreducingrevenueleakage,managingtrafficimbalances,preventingspam abuses and — ultimately — building sustainable advantage.

Mark Weait runs the commercial department of SAP Mobile Services across EMEA and LATAM that provides and sells solutions into businesses across all market segments,includingtelecoms,financialservices, FMCG, manufacturing, logistics and many others.

Many operators are striving to maximise revenues and customer satisfaction by pursuing strategies to increase their SMS delivery footprint. It’s a smart decision, but operators also face some challenges along the way.


Indian telecom giant Bharti Airtel has spread its wings across the African continent to reach nearly 60 million customers in 17 countries including Nigeria, Burkina faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Madagascar, Niger, Ghana, Kenya, Malawi, Seychelles, Sierra Leone, Tanzania, Uganda and Zambia.The strategy paving the way for this expan-sion — and success — is sharply focused on bridgingthedigitaldividewithaffordabletelecom services. Airtel in Africa has adapted the low-cost, high-volume model — which was employed in the home market of India — to serve the African market and provide customers world-class and innova-tive voice and data services to add value to their daily lives.

MEETING LOCAL NEEDS

Analysts note that Africa has many market conditions that make it a booming market for telecom services. First, there is the potential for growth. Africa is home to over 1 billion people and has the world’s youngest population. People under 25 account for 60 percent of the total population, compared with around 30 percent in developed coun-tries. In addition, apart from China and India, most of the world’s fastest growing econo-mies are in Africa, according to the IMF’s World Economic Outlook.

When Airtel entered the African market in 2010 it realised that customer demand for connectivity and coverage, as well as cust-omer service, would need to be addressed. First, coverage was boosted by adding more sites. Then customer experience and service wasimprovedbyofferingnewandinnovativeservicesatanaffordableprice.

Orchestrating Capabilities Delivers High PerformanceBy N. Arjun, Chief of Projects & Transformation, Bharti Airtel

SMS services were a big part of this because African youth are more mobile savvy and prefer to do text messaging. Airtel responded by creating and promoting bundles that includes SMS as part of the package.


64

Total African mobile connections, penetration rate and growth drive (millions, % penetration)

Figure 1: Based on data from Wireless Intelligence. Excludes M2M connections.

A.T. Kearney 28/02 2012 MWC

www.gsma.com/publicpolicy/wp-content/uploads/2012/03/mea12atkearneyafricapresentation.pdf

Economic development in the region Success of cost-effective pre-paid services (96% of total) and significant price reductions

Introduction of low-cost handsets Ambitious rollout of mobile network infrastructure –fast expansion of mobile coverage

Penetration rate (%)

Conn

ectio

ns (m

illio

ns)

85%82%

78%

73%

65%

57%

48%

40%

31%

22%

15%

9%6%4%3%2%

80%

0%

10%

20%

30%

40%

50%

60%

70%

90%1000

900

800

700

600

500

400

300

200

100

0

2015

f

2014

f

2013

f

2012

f

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

53372617

910860

807

735

642

552

458

379

283

201

13683

+30%

The African mobile market is thriving, reaching over 642 billion connections in 2011 – after exceeding 65% penetration in 2011.

Penetration Connections


SMS services were a big part of this because African youth are more mobile savvy and prefer to communicate via text messaging. Airtel responded by creating and promoting bundles that includes SMS as part of the package.

TodayAirtelisfocusingeffortsonthreeareas. These are 2G, which is about deliver-ing voice services; 3G, which supports data services; and mobile money and mobile commerce services. The latter is all about building relationships and serving the under-banked.

TodateAirteloffersmobilecommerceservices in 15 of the 17 African countries in which it operates. The aim is to build an ecosystem that ensures money stays within the customer’s wallet. In other words, they can do everything without having to use cash, or go to the bank.

TAPPING TALENT TO ACHIEVE EXCELLENCE

How does an operator deliver high volume at low cost? Across its markets in Asia and Africa Bharti Airtel has successfully driven down costs and ensured quality by part-nering with key companies to manage all non-core operations — including network management and IT hardware and software needs. Put simply, we tap into the talents and capabilities of partners in all areas where we at Airtel feel we do not have a core competency.

This approach — built on collaboration with strong partners — lays the groundwork for a sustainable model that also equips Airtel tointroducethelatesttechnologyandoffercompetitive services. Additionally, Airtel maintains a sharp focus on core areas within the business — and a core compe-tency is understanding customers.

This approach — built on collaboration with strong partners — lays the groundwork for a sustainable model that also equips Airtel to introduce the latest technology and offer competitive services.

66

Airtel has chosen to harness the SMS hubbing capabilities of SAP Mobile Services for two reasons. At a basic level, there are partners that understand the SMS business better than we do. At a more complex level, it’sabouthavingthecapabilitiestoofferthewidest coverage to our customers in the shortest possible time. In fact, it is the approach that allows Airtel to provide SMS

across our African markets as quickly as possible, and at the best quality possible.

Thisapproachalsodeliverssignificantbusinessbenefit.AtAirtelwemeasuresuccess in two ways: in terms of how many complaints we have received from custom-ers that their messages have not been deliv-ered; and the overall impact on revenues.

Global mobile connections by regions(millions)

90828484

7840

2010 2011 2012f 2013f 2014f 2015f10%

5%5%5%5%5%5%10%10%10%10%9% 10%

9%7%7%

13%

8%

7%

CAGR 11-15

6524680

333

440766

642

465

3200

7194

734

361

492819510

731

3548

790

815388555876555

3861

845

887

607413

947631

4154

894

709

1015656

949434

44245835

627

229

2823

389722

552

424

1)Includes M2M and mobile connections

Figure 2: Based on data from Wireless Intelligence.

A.T. Kearney 28/02 2012 MWC

www.gsma.com/publicpolicy/wp-content/uploads/2012/03/mea12atkearneyafricapresentation.pdf

ME EEA APAC Africa Others NA LATAM

Over the next 5 years Africa will be the second fastest growing region in total connections and the fastest growing in subscribers


Over the last 12 months the number of SMS messages both in and out has increased by 12percent.Wehavealsoseenasignificantreduction in the time taken to resolve a customer complaint.

Moving forward, the focus is to build on this foundation to increase the percentage of value-added services in the mix, and SMS isoneofthoseservices.Airtelwilloffermore bundles to encourage customers to use text to send out messages on special occasions, for example. It’s all about creatingspecificpackagesforspecificcustomersegments.Airtelwillalsoofferspecial rates for communities of interest, where we know these communities exist. This approach allows us to increase and improvethetrafficbetweenthevariouscommunities of interest across the globe.

ORCHESTRATING CAPABILITIES

Harnessing the talents and capabilities of partners has allowed Airtel to export its high volume/low cost business model to Africa. It has also helped Airtel overcome many local market challenges and close network and services gaps.

Tobeeffective—andsuccessful—thisapproach requires a constant exchange of information. Dialogue with partners has to

be open and ongoing, and a key learning has been that there is always room for improve-ment in this exchange.

Achieving business objectives is not about owning the capabilities; it’s about orches-trating the capabilities of partners. This way the model itself becomes the way to achieve high performance, maintain growth and delivercustomersinnovative—andaffordable— voice and data services. Airtel follows this model to innovate and delight the customer. However, there will always be certain tech-nological innovations, which will come from partners that we will need to marry with our deep knowledge of the customer. This way Airtelensuresthatweofferwhattheconsumer wants on time, every time.

N. Arjun is responsible for strategy, plan-ning and rollout of all new projects in Africa, including projects focused on mCommerce and international voice and data. Prior to this Arjun held the position of Integrations Director and was responsible for the successful integration of operations, spanning 15 countries, belonging to the African operator Zain Telecom. Bharti Airtel completed the acquisition of the African operations in 2011.

PART THREE IPX: CONNECTING OPERATORS TO REAP BENEfITS


In many ways Korea Telecom (KT) mirrors the history — and the future — of telecommunications. KT was established in 1981, when it was spun off from the state-run Ministry of Telecommunications. first on the agenda, KT worked to make voice telephony services universal and available to every citizen. It has since engaged in the development of advanced commu-nications services, helping to make the country a leader in communica-tions and prepare for a world where voice and data, fixed and mobile, and communication and broadcast-ing services are converged. To ensure quality of service and capture new efficiencies, KT is

directing voice and mobile data services traffic over its IP Exchange (IPX). Incheul Park — Head of the Wholesale Team, Global Business Unit, within KT —discusses the central importance of Voice over IPX in KT’s larger strategy to future- proof its network, ensure end-to-end quality of service and grow its whole-sale business.

Your strategy — which is sharply focused on wringing more value and revenues out of voice — has its roots in your company history. Please explain the connection.

KT started out as the incumbent operator in Korea,sowecovertherangefromfixedtomobile, data, Internet, IPTV — the works. As you know the technology trend is moving to IP. In the market, we are also seeing a shift

Bundling Services Makes Business Sense

IPX is clearly a way to reduce costs and increase efficiency because it’s all about delivering services over a single network. At KT we are interconnecting with IPX providers and we are trying to find out which model is more efficient.

PART THREE: IPX: CONNECTING OPERATORS TO REAP BENEFITS

70

fromfixedtomobile.Asaresult,KThasseen a drop in revenue it generates from offeringfixedservices,voiceaswellasbasicdata services. Like every other operator, wefacethesamedifficultiesandmustmakeup for the decreased revenue with a new revenue business model.

How does the focus on improving voice services allow you to meet the local needs of your customers?

Of course, it all depends on the customer segment. Retail customers always ask for a good price and a good connection. And we can deliver this. General wholesale customers are more focused on quality. They require end-to-end quality as a basis for international roaming services. This is particularly important when we look at the number of inbound roamers from neighboring countries like China. Indeed, there are many tourists and business professionals in transit in Korea — and this number continues to grow. Therefore, roaming is naturally one of the services we are focused on.

There is increasing demand for quality roaming services. At the same time, you are witnessing a decline in overall voice revenues. What are your objectives and your strategy to meet and satisfy the demands of both the marketplace and your customers?

I always get that question! Frankly speaking, there is no right answer right now. Every operatorhasdifficultiesdealingwiththedecrease in revenues. In our case, we are working to reduce costs and also generate revenues based on volume — from buying power and bundling services, for example.

KTprovidesaroamingserviceandoffersinternational voice services for our operator customers. Additionally, we have a voice hopping service, so we can increase the volume of calls while helping our partners to reduce their costs. In this way we use the volume generated to develop new direct interconnections with the new operators.

Put another way, one of our strategic aims is to bundle services and get more volume. That enables us to achieve economies of scale. In the case of data services, we are also bundling in voice and IP. This way we canoffercustomersabundledsolution, andwecanbenefitfromsomesynergies.So, this is our strategy to recover revenue and recapture customers in the market.

An increasing number of operators in your region recognise the value of delivering multiple services through a single, secure IPX connection. This is also a capability that lies at the core of your company’s strategy?


Correct, KT is actively involved in IPX. The trendismovingtrafficfromTDMtoIPX. Ultimately, IPX is all about enabling end-to-endtrafficdeliveryandqualityofserviceovera single IP network. That is the concept, but eachoperatorhasadifferentviewofwhatIPXcanprovide—andmanyhavedifferentapproaches to reach their objective.

IPX is clearly a way to reduce costs and increaseefficiencybecauseit’sallaboutdelivering services over a single network. At KT we are interconnecting with IPX providersandwearetryingtofindout whichmodelismoreefficient.Putsimply,the focus is on interconnecting to gain more experience with the technology and what it delivers. IPX is the correct direction for KT.

As I mentioned, we also have a voice wholesale business. If it turns out that it is easy to move from the existing voice network to IPX, then we can very simply jumpstart our IPX business with operator customers. On top of this, we can add in services like signaling and GRX. That is the starting point for IPX here at KT.

Moving to an IPX network is exciting. But the shift can also have its challenges. What can you tell me about your experi-ences and your key learnings so far?

I myself do not have a technical background, but when I talk with our network engineers, they tell me the technology itself is not an issue.Infact,it’snotthatdifferentbetweenoperators when we interconnect with several IPX providers. Also, the technical spend out is almost the same because the industry standard is there to follow. These guidelines and standards ensure that every vendor in the world is providing a high standard for IPX. If there is a barrier to interconnection via IPX, then it’s the cost for interconnection.

One driver behind the shift to IPX is the argument that it provides a proven and simple route to 4G, or LTE, and will be required to support LTE roaming. What are your views?

For LTE roaming we will need more bandwidth to support data roaming. So — yes — I see this as one of the key drivers to encourage IPX connectivity within operators.

What is the impact of free phone call services such as KakaoTalk on South Korean telecommunications companies and giants such as KT? In your view, how should operators react to maintain, even build, competitive advantage?

The free phone services may be good from the perspective of the consumer, but it’s a real headache for the service providers like

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KT.KakaoTalkoffersfreeservices,andto do this they are using our existing network without any settlement or pay. What’s more, these services raise some issues with the customer. The customers say they already paid for unlimited data service, and this gives them the right to use a service like KakaoTalk. However, this usage requires bandwidth and this is a heavy burden on the network. There is also the worry that services will collapse altogether if there is not enough bandwidth, and then there will really be problems.

Going to an all IP-network means we will be abletomakeanofferthatreducescostandcreates more competitiveness. Another approach, as I mentioned, is to use IPX to bundle services, thus providing services in a way that allows us to compete head-on with free phone call services and the providers delivering them.

And you have to keep in mind the competition is more than just KakaoTalk.

Other service providers will introduce their own service. Think of Skype, Google and iPhone.Alltheseofferscompetewiththetraditional mobile operators and major network operators. But when we compare ourselves against these OTT players, we as operators should not compete only on price. Forexample,wecoulddifferentiatebyofferingvalue-addedservicestoenhancesecurity. Leveraging on our service port-folios, we could also bundle various services together, tailored to the customer that also allow us to compete

How do you plan to encourage your customers to increase their use of your services, to balance out the drop in call revenues?

For the domestic service, it may be that we can provide the customer with a more flexibleserviceorbundledservice,thiscanalso include security. On the wholesale side, using IPX interconnection will allow us to offergoodqualityandmaintaincompetitive

In the case of data services, we are also bundling in voice and IP. This way we can offer customers a bundled solution, and we can benefit from some synergies.


advantage on routes like Philippines or Vietnam, for example.

We are also trying to expand our market areas, and this is where IPX can also come in. In Asia KT is very strong in the wholesale business, but this isn’t the case in the Middle East and Africa. So, we are trying toexpandournetworkandalsooffercustomer coverage in Western Africa and to do more interconnection with those operators. If IPX can help us to interconnect with them easily, it will be also good advantage for us to be using IPX.

Incheul Park has over 15 years experience in the international telecoms industry. He heads the Wholesale Team within KT’s Global Business Unit, where he is focused on sup-porting the international voice business, which includes bilateral, hubbing and IP based services. Park was also responsible for driving the new interconnection and business development globally on behalf of KT.

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for Globe, the capability to support customers calling across borders today — and cope with the massive increase in mobile data use — will depend on our ability to leverage new ways of connecting and managing operator partnerships. IPX is a natural path.

The concept of IPX is particularly relevant to the Philippines, a coun-try where Globe is also a leading mobile operator, for many critical reasons. These are linked to the makeup and requirements of our local customer base.

First, a sizable portion of the population lives overseas, a separation that sometimes spans several generations. Social media is one way families keep in touch over the distance, and one of the reasons why the Philippines ranks very high in the use and consumption of social media.

At the other end of the spectrum, the Philippines is also a top destination for business travelers and vacationers. Many tourists visit to enjoy the many scenic spots across the country’s 7,000+ islands. Obviously, people and businesses need to stay connected across boundaries. That’s where IPX comes in. It promises to make this connectivity easier for both operators and their customers.

Expanding Voice Connectivity Via IPX: An Operator's PerspectiveBy Gil Genio, Head of International and Business Markets, Globe Telecom, Inc.

Operators must be able to establish direct commercial and technical interconnect with each other, specifically for cross regional connectivity. This is why our future infrastructure plans include IPX.



VOICE ON THE RISE

Globally,internationalvoicetraffichasbeenstagnant for some time now. This is because customers are choosing alternative ways to stay connected. At Globe, however, this is not the case. We continue to see increased voicetraffic,eventhoughcustomerscanalso communicate using alternatives includ-ing social media, VoIP and text messaging.

Because of this trend, Globe clearly needed to build the capabilities to support the growthinvoicetrafficinamorecost-effectivemanner.ItwasalsoimportantforGlobe to make it easier for many operator partnerstosendtheirsimilartraffictoournetwork. This is where IPX plays a role,

enabling Globe to exchange international calls directly with other mobile operators. This has become a key driver for Globe’s initialIPXefforts.Additionally,operatorsaround the world — Globe included — are moving to an all-IP infrastructure. It’s a shift that can’t be ignored.

THE DATA CHALLENGE

At Globe we also have to adapt to the shift in customer requirements.

Customers are exploring alternative ways of staying connected, and we at Globe have to support this through investments in data connectivity. Unfortunately, most operators

Figure 1: Based on data from GSMA.

Ratio of international trips to population %, 2011

Europe

65% 35%

North America

10%

Asia Pacific

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did not respond quickly enough. The exis-tence of complicated, unpredictable and high priced services, together with bill shock issues, has somewhat stunted traditional voiceroamingtraffic.Inotherwords,itsimply hasn’t grown as quickly — or as much — as expected.

On the other hand, mobile data use by business travelers and roaming customer is increasing exponentially. This growth is driven by the increased penetration of smartphones, people’s love of social media and the constant need of users to be connected.

This boom in mobile data use presents operators with a new challenge. They must work with the visited operators to ensure roaming customers enjoy a good

user experience at home and abroad. In other words, the quality of the experience for the roaming customer should be consistent and high quality.

qUALITY CONTROL

Globe is well aware of this challenge, and has therefore taken steps to make it easier for travelers and roamers to use data. To this end we at Globe have made the customer experience a central focus of all we do.

In the Philippines Globe is embarking on an ambitious network change that will result in a pervasive HSPA+ footprint and the deploy-ment of tens of thousands of kilometers of fibertosupportmobiledata.Andwearepreparing to launch an LTE network. To close


Overview of international roaming technology and operations

Received call

Visited Operator

International transit

services

Initiated call

Receiver’s home

operator

Home operator


the loop with a superior customer experi-ence Globe is also moving to a real- time convergent billing and customer care platform, and making additional investments in analytics and other back-end systems.

These are measures that will deliver cust-omerbenefit.However,Globecustomerswho travel overseas, or people who come to the Philippines for business or pleasure, will not experience these advantages unless we at Globe work to make interconnect better and easier. In other words, operators must be able to establish direct commercial and technical interconnect with each other, specificallyforcrossregionalconnectivity.This is why our future infrastructure plans include IPX.

IPX IS INEVITABLE

IPX today is a given for two reasons. For customers, it’s all about being able to experience the same quality overseas that they have come to expect in their home network. What’s more, the exponential increase in data use demands the infra-structure can grow to adapt to what customers need now and in the future.

For operators, IPX is an easy path to inter-connectivity. More importantly, operators are moving to all-IP networks. Bottom line:

Globe believes that — in the long run — IPX provides the best path to easier connectiv-ity. It also delivers a lower cost structure, savings Globe can pass on to customers.

Clearly,IPXoffersmanybenefitstooperators and their customers. Today the path to IPX implementation is not an easy one.Buttheeffortiswellworthit.Itisimportant to keep an eye on the prize, and focus on the many advantages IPX delivers. Chief among these are: a better experience for customers, a lower long run cost struc-ture for operators and the capability to manage current and future voice and data traffic.Keepthistopofmindandmobileoperators, like the pioneers of the past, will enjoythefirstfruits.Personally,Iamlookingforward to an IPX-enabled future.

Gil Genio is head of Corporate Strategy and Business Development at Globe Telecom. He is also the head of International and Business Markets, which are the groups responsible for sales, relationships, market-ing, products and support for Globe’s overseas Filipino and service provider cus-tomers, and for business customers from SMEs to the largest enterprises. He also serves as CEO of Innove Communications and GTI Business Holdings, subsidiaries belonging to Globe Telecom. He is also the Vice Chairman of GSMA AP.

This boom in mobile data use presents operators with a new challenge. They must work with the visited operators to ensure roaming customers enjoy a good user experience at home and abroad.

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IPX is fundamentally about building a connected community of telecom operators, services and applications. It serves to enable the customers of mobile operators in this community to connect to one another, as well as access a wide variety of applications and services. Being able to guaran-tee quality of experience and keep costs under control are key require-ments for the mobile operators.An IPX needs to deliver the full range of services, ranging from the basics that include data roaming, messaging and voice, to LTE-based multimedia services, to applications such as OTT services. Once operatorsareabletoofferthefullrangeofservices through an IPX, they can leverage thebenefitsandeconomiesofscalethat IPX delivers.

STRONG AND CAPABLE

To deliver a full range of services at the highest quality the mobile operator must choose its IPX partners. Additionally, an IPX should be strong in all areas, not just basic services like voice or 3G data roaming.

The concept of IPX evolved from GRX, a community of mobile operators formed to exchange roaming data. While the under-lying network quality is clearly key to an IPX, theservicesprovidedarenolesssignificant.

DATA ROAMING

Thequalitydataroaming(specifically, 3G roaming or GRX) depends on the community of mobile operators connected to an IPX. This is not just about the number of mobile operators connected to an IPX. It’s about which mobile operators are

The Value Of A True IPXby William Dudley, Group Director, Product Management, SAP Mobile Services & John Candish, Senior Director, IPX Business, SAP Mobile Services

With IPX there will be no need to set up dedicated connections and policies for each service, nor will it be necessary to manage the capacity of each separately.



connected. If you take the strategy of conn-ecting key Tier 1 operators within a region to an IPX, your ensure the majority of a mobile operator’strafficcanbedeliveredon-netand managed directly end-to-end.

MESSAGING

Most mobile operators are considering or have already engaged with one or more IPX service providers. Consequently, the ability toleveragethebenefitsofanIPXtorouteSMS(andMMS)messagingtraffictotheirhubs is becoming paramount.

SMStraffic,forexample,mayusetheIPX as a transport for SMPP or for GSM MAP over IP (SIGTran). The resiliency of an underlying MPLS network provides multiple benefitsoverVPNs(forSMPP)anddirectSS7-cloud reach. For instance, with SIGTran the MNO no longer has to incur MSU fees just to reach their preferred messaging hub. Instead, the messages reach the Messaging hub via SIGTran, where they are delivered to the end destinations.

VOICE INTERCONNECTIVITY

Customers and providers are connected to create an on-net community of IPX Voice. This allows for all parties to maintain full control over the quality and routing of voice

calls end-to-end, whilst also achieving full transparency between the partners regarding transit and termination charges.

IPX voice interconnectivity guarantees deliveryCallingLineIdentification(CLI)formobile destinations, as well as assured qualitybasedonpredefinedAnswerSeizureRatio(ASR)andNetworkEfficiencyRatio(NER) benchmarks at the destination level. AnotherbenefitofIPXVoiceisthesignificantlyreduced Post Dial Delay— that is, the time interval between dialling completion and the ringing tone to indicate reception of the recipient network response.

Of course, voice destinations may now include VoIP or OTT Voice providers, as well asfixednetworks.IPXVoiceisbynomeansjust limited to mobile operators.

LTE

The success of 3G roaming services (GRX) has set a high standard. When LTE services are deployed customers will expect the ability to roam to other LTE networks to be supported from day one. IPX can deliver a one-stop solution for LTE services, manag-ing end-to-end connectivity and quality. The Diameter protocol is essential to roaming in the LTE world. It manages the authentica-tion, access and accounting associated with

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roaming users. By leveraging an IPX Diameter hubbing service, operators can rapidly achieve roaming relationships for LTE data services and mobile broadband.

For LTE services such as Voice, the ability oftheIPXnetworktodifferentiateandmanagethevarioustraffictypesappropri-ately is key; especially as LTE IMS multime-dia services are deployed including VoLTE (native LTE based voice).

The IPX enables connectivity between LTE networks, delivering subscribers virtually the same services and quality of service while they are roaming that they know from their home network. This is critical when the roaming customer is using services such as Voice over LTE (or VoLTE). With high-band-width services such as voice and video calling, the IP latency and jitter must be extremely low from end-to-end to deliver customers a good experience. Certainly, the LTE (E-UTRAN) radio network will provide low-latency and high bandwidth between the device and the towers, but operators must also require QoS solutions for backhaul (the network connecting all of

the cell-site locations together), as well as within the Evolved Packet Core (or EPC) and,finally,betweennetworks(theIPX).

Additionally, LTE Roaming will support the concept of 3G fallback. This usually occurs when the visited network does not support LTE or does support it, but at incompatible frequencies. In that case, the device will connect to the UTRAN (or 3G radio net-work), if it supports such frequency bands. Most LTE devices support both 3G and LTE frequency bands.

APPLICATIONS AND OTT SERVICES

IPX can also reduce the complexity of con-necting third-party services and OTT providers to a mobile network. With IPX there will be no need to set up dedicated connections and policies for each service, nor will it be necessary to manage the capacity of each separately. A good example of this is the inclusion of BlackBerry connectivity. This service enables mobile operators to connect to BlackBerry cloud services without the need to install and manage separate

Once operators are able to offer the full range of services through an IPX, they can leverage the benefits and economies of scale that IPX delivers.


Figure 1: Based on data from SAP Mobile Services.

IPX

Intelligent Services

Internet

LTEService Provider

LTEService Provider

3GService Provider

Fixed LineService Provider

82

dedicated connectivity — all enabled securely and over a resilient MPLS network.

Other Cloud/OTT services may leverage the IPX by using an approach that is similar to the BlackBerry model for connection via IPX. This enables mobile subscribers easy reach to the OTT or Cloud services because operators have created dedicated connec-tivity to the service. Going forward, these services will likely include other advanced mobile capabilities that leverage existing models like voice connectivity or interworking (such as Diameter or Messaging), and for services including — but not limited to — RCS and IMS.

SAP Mobile Services believes that by combining this breadth of services that thefullbenefitofIPXcanbeachieved.Formobile operators, the choice of IPX provider should not just be decided with a view to the handful of services they are required to deliver today. It should be based on an understanding of their long-term needs. A future IPX provider will need to be able to deliver capacity and network quality, along with the full range of services, to deliver the full potential of IPX.

William Dudley has 25 years experience building and managing telecommunications network infrastructures. He leads SAP Mobile Services Product Management for P2P and A2P Messaging. Dudley also provides industry commentary to both internal and external mobile industry publications, through analyst and media interviews, and is active in several industry groups. blogs. http://scn.sap.com/people/william.dudley/content

John Candish is responsible for driving the company’s IPX business globally. Prior to this Candish held positions within Cable & Wireless, where he was responsible for the development of the GRX and messaging Services, subsequently leading the integra-tion of the GRX & MMX services into the SAP Mobile Services portfolio.


IPX can reduce connectivity costs, boost service quality and improve the time to implement new services and roaming destinations. Clearly, IPX should have a central role in operators’ strategies to develop and deliver future services. Here are 9 key lessons to guide operators along the path to IPX and equip them to maximise the benefits.

1 Chose a quality network. An IPX is about far more than simply roaming data. A whole range of services from messaging through to real time voice and video now flowoverIPX.Itisthereforecriticalthatoperators chose an IPX capable of both providing the network service levels and resilience to deliver these services, as well asproactivelymanagingthedifferenttraffictypes.

2 Plan for future capacity. The growth of roaming data volumes between mobile operators has been considerable over the last few years. Add to that voice, messag-ing and LTE-based services and the need to plan ahead when deploying IPX is clear. A 10 M, 30 M or 100 M connection may look adequate this year, but will it con-tinue to meet demand in 18 months time?

Putting in the right long-term infrastruc-ture now will enable the operators to soft upgrade connections rapidly to meet demand in the future.

3 Involve vendors early. Once an operator has connected and tested a service over IPX, whether that be voice, video, messag-ing or another application, they are able to access the entire community for that service on the IPX. The initial testing process is fundamental to success and enabling infrastructure vendors early is keytothis.Evendifferentreleasesofaplatform from the same vendor can result inquitedifferentresults.Ensuringequip-ment vendors are closely involved in the process of IPX testing from an early stage significantlyreducesprojecttimelinesand will enable full service launch sooner.

4 Recognise the value of community. An IPX is about connecting operators together with each other and with services and applications. When choosing an IPX, an operator should consider both the range of services provided and the com-munity of operators connected. Right now, operators may be connecting with each other to enable just one or two particular services, but in the longer term they are likely to want more.

Nine Ways To Get More Value Out Of IPXBy John Candish, Senior Director, IPX Business, SAP Mobile Services


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5 Plan roaming connectivity at the same time as domestic role out. The success of roaming has set a high bar. Users increasingly expect all home services to be available when roaming, not six months or a year after launch. Although the initial focus may be on the domestic launch of new services such as LTE, consideration should be given to roaming of those services early on. IPX can enable rapid roll out of roaming connectivity. Provided operators build IPX connectivity into the deployment plans for new services early on, roaming revenues can be rapidly achieved for new services.

6 Ensure the IPX service can translate between systems. IPX is about enabling connectivity and with the rapid roll out of new services this increasingly requires theabilitytobringdifferingimplement- ations of the same service together. For example, two operators may have deployeddifferentvoiceswitcheswith differentSIP-Iimplementations.AnIPXshould be able to translate between these switches,ironingoutthedifferencesandenabling seamless communication

7 Chose an IPX with strong Policy and Access control. IPX is about enabling connectivity, but for operators to be able to leverage this, it is vital that they remain

in control of who can access services and what policies are applied to that access. It is therefore essential that an IPX provides clear control of services and does not merely function as a ‘dumb’ pipe connecting the various parties. An IPX that provides the ‘hubbing’ of services such as voice is not only able to increase the interoperability of services through its ability to ‘translate’ between systems (as described in #6). It is also able to control which partners are able to access services and which originators may connect, as well as applying the required policies to suchtraffic.Asthetelecomworldmovesto LTE and multimedia, services such as access and policy management will become even more critical.

8 Select an IPX with strong accounting capability. Clearly, IPX must enable connectivity of services. But it must also ensure that the revenue streams follow services. Whether connecting data, mes-saging, voice or other applications, IPX has a key role to play in accounting func-tionsensuringpaymentfollowsthetraffic.

9 Consider the commercial relationships as well as the connectivity. When testing IPX connectivity it’s important to plan ahead and select the priority roaming destinations for a service.


This enables an IPX to be working on the roll out of an operator’s roaming footprint ahead of the initial connection being deployedandtested.Thissignificantlyshortens the time between the IPX connectivity being completed and the revenuesandservicebenefitsdelivered.

By following this advice you will have what you need to make the most out of your IPX deployment. Having an IPX that is truly multi-service, thus supporting both existing services and services on your roadmap, operators will be able to realise full cost- savings and competitive advantage, rather than have to make additional investments simply to keep step with the pace of change.

John Candish is responsible for driving the company’s IPX business globally. Prior to this Candish held positions within Cable & Wireless, where he was responsible for the development of the GRX and messaging Services, subsequently leading the integra-tion of the GRX & MMX services into the SAP Mobile Services portfolio.

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With major investments in Singapore, Australia, Africa, India, Indonesia, the Philippines, Thailand, Pakistan and Bangladesh, SingTel is Asia’s largest multi-market mobile operator. In July 2011 the company embarked on a trial of IPX, the first step in exploring the establishment of a private international network connecting all the Group companies starting with SingTel Mobile (Singapore), Globe Telecom (Philippines) and AIS (Thailand). SingTel — determined to grow the business by leveraging scale, reach and service innovation — used the trial to better understand the

technology and benefits it delivers. Chief among these is connectivity to deliver international mobile data roaming and voice traffic. However, an international private network also allows the rapid deployment of new applications and services, shortening the time to market and potentially increasing competitive advantage. David Ng — Vice President, Regional Technical, of SingTel’s International team in the Group Consumer organization discusses the trial, results and overall outlook for IPX in the Asia Pacific region.

SingTel has recently concluded its trial of IPX. Please share the rationale behind your decision to test this technology.

Making The Right Connections

Moving forward, IPX would offer a flatter IP network architecture, enabling Voice over LTE services and supporting new services like RCSe. This is an important consideration since OTT players are also moving in the direction of Voice over IP services.



In my position, it is part of my responsibility to look at technology on the horizon and understand what it provides in terms of both service capabilities and competitive advan-tage to the business we are operate in. In the case of IPX, we wanted to see how we can best manage our mobile data roaming costs.WeidentifiedIPXasagoodplatformto achieve this and looking again to the horizon, LTE is also emerging strongly and steadily in the market landscape. And this also plays a role in our thinking. Moving forward,IPXwouldofferaflatterIPnetworkarchitecture, enabling Voice over LTE services and supporting new services like RCSe. This is an important consideration since OTT players are also moving in the direction of Voice over IP services.

For these reasons, we thought IPX would be a good platform. It addresses the mobile data roaming problem we originally set out to solve and, looking ahead, it might also deliver us an advantage when LTE is rolled out aggressively across the region. At that point, LTE roaming will need to be enabled, and IPX is certainly the right platform to facilitate LTE roaming. What’s more, IPX allows the ability to do a local breakout, which naturally provides a better customer experience to the roamer.

So, before we jump onto the IPX platform, we conducted this trial to understand its capabilities, performance and deployment challenges. That is, what kind of quality IPX

enables when we carry voice and how itperformswhenitcarriesthistraffic between two geographical territories.

Let’s discuss the IPX trial. Where are you in the process and what have you achieved?

Originally, we picked three operations in three locations — SingTel Mobile in Singapore, Globe in the Philippines and AIS in Thailand where each operator connected to a private international IP network provided by SAP Mobile Services IPX™ via the respective local points of presence. To date, we have concluded the IPX validation test on delivering mobile data roaming, mobile voice roaming and international IDD voice amongst the three operators over the IPX connection. The validation test covered a good mix of test cases based on SIP-I interconnect (for mobile voice roaming and international IDD voice), GSMA IR87 (for inter-operator SIP-I inter-working) and GSMA IR35 (for mobile data roaming). I am pleased to share that the test results were positive.

The IPX trial successfully demonstrated the reliability of IPX as a managed private IP network that can transport multiple services within a single IP connection across differentgeographies.WhatIcanalsosharewith you is that — internally — we are brainstorming and discussing how to take IPX forward.

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SingTel clearly has an understanding of the benefits of IPX. Interestingly, Asia Pacific leads in awareness of IPX overall. Why do you think this is?

As we all know, this region is seeing a shift in the market landscape due to the rise of OTT players. According to the Cisco Visual NetworkingIndexMobile2012,AsiaPacificis expected to account for up to 40 percent ofglobalmobiledatatrafficby2016.Asaresult, many — if not all — operators are

facing margin squeeze due to the scissor- effectofdivergingmobiledatatrafficandrevenues. This forces them to think about ways to generate revenues and identify newservicestheycanoffertocustomers. At the same time, it’s very important for us as operators to manage our bottom line. Against this backdrop, cost management becomes a key issue. If the IPX platform performs and delivers its promises, then it will allow us as operators to consolidate and

Figure1:BasedondatafromCiscoVisualNetworkingIndex.GlobalMobileDataTrafficForecast,2011-2016.


Global mobile data traffic growth/regions MEA has the highest growth rate (104%) from 2011-2016 APAC* will generate 40% of all mobile data traffic by 2016

2011

Middle East and Africa (MEA) Central and Eastern Europe (CEE) Latin America (LATAM) North America (NA) Western Europe (WE) Asia Pacific (APAC)

0

2

4

6

8

10

12

2012 2013

Exab

ytes

per

mon

th

2014 2015 2016

78% CAGR 2011-2016

40.01%

22.56%

18.18%

6.83%6.54%5.88%

*Includes Japan


optimise our IP interconnect for delivering packetisedtrafficoutsideournetwork.

For example, if IPX does indeed allow us to consolidate and deliver mobile data roaming, BlackBerry and tele-presence via a singleIPpipe,thenitisclearlymoreefficientandcosteffective.ThisiswhyIbelieve many operators in the region are looking into exploring IPX. IPX is also seen as a way to ‘future-proof’ the networks and support future IP services such as HD services like HD voice and HD video.

We have discussed the business benefits of IPX — what are the benefits to the customer?

Take the case of customers who are access-ingdatawhileroaming.TheirInternettrafficwhen they are abroad is actually routed all thewaybacktotheirhomenetworkfirst.Inother words, the signalling and payload part of the data session is passed to the local operator’s network and then back to the customer’s home network.

This presents two challenges. For the operator: it’s about how to maintain cost

effectiveness.Forthecustomerit’saboutquality of service and the requirement for a consistent and good experience no matter where they are.

If you go through IPX, then you can solve these issues because you have the control and can deliver a desired quality of service — a level of service that also delivers a user experience the customer will enjoy. And this is where the local breakout capability I men-tioned before comes into play. With IPX if you can do a local breakout, which means the roamer will be able to enjoy the same level of quality as the local customer does. It’s a better experience all round.

Your trial focuses on using IPX to connect operations within the group company. What is it about IPX that makes good business sense in this scenario?

I think if you take the perspective of a group company, a company where it has many operationsacrossdifferentcountries,thenthereisanincentivetofindawaytobetterinterconnect the operations with each other. At the least it’s about making sure that the mutual customer, who roams between the

If you go through IPX, then you can solve these issues because you have the control and can deliver a desired quality of service — a level of service that also delivers a user experience the customer will enjoy.

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differentcountriesthatareinterconnectedvia IPX, will have a more consistent quality service experience.

Looking back at your recent IPX trial, what can you share in the way of key learnings, impressions or surprises?

Thefindingsarepositive.Asidefromthetechnology, we also learned more about the talents and the skills set that we would need inaserviceteaminordertoofferIPXandtosupport it. The service team plays a very important role in delivering the service in a timely manner.

As you pointed out, IPX allows operators to control and deliver quality services to roaming customers, for example. Look-ing at the range of what an IPX network can support — new multimedia services or even provisioning services into cars — what excites you most?

Without divulging too much of our internal strategy, I would say the type of services we aregoingtoofferarelikelytobemoreIPoriented. There is a very good match between what we can use IPX for and how it can benefitusatSingTelasagroupoperator,aswellhowIPXcanbenefitourcustomers.

The multimedia services are also interest-ing. If the analysts are correct, IPX will drive more video, more social sharing and more visual content to our phones. Therefore, the high quality of voice and the ability to

exchange video or other visual content are turning phones into a medium that is more about seeing content and seeing people than necessarily just speaking.

Overall, where do over-the-top service providers fit into the IPX landscape? Are they a threat, an opportunity or something else?

My personal philosophy is that there is no ‘forever enemy’. We can compete on one hand, but we can also be allies on the other. So, yes IPX may play a role in bringing OTT players and telecom players together to cooperate in a slightly more meaningful way, whichwillalsobenefitthemutualcustomer.In my view, there are similarities here to Open Innovation, an approach and a mind- setthatisallaboutfindingwaystocollabo-rateformutualbenefit.

David Ng is the Vice President (Regional Technical) within the International arm of Group Consumer at SingTel. In this role he drives the regional network initiatives and strategies within SingTel to shape technology strategy and achieve synergies across the SingTel Group. Prior to this Ng was Director of Operations at Telkomsel, a SingTel joint venture company in Indonesia, where he was in charge of network design and operational management.


An open and flexible model for service exchange will be part of the critical path the industry will travel in order to implement Voice over IP (VoIP).

IP eXchange, or IPX, is the industry standard solution to solve the interconnect problem bysettingoutcommonspecificationsforend-to-endIPtrafficdeliveryandqualityofservice. On the market there is a high level of awareness and interest in IPX. This is linked to the fact that the industry is moving to an all-IP environment, which creates the need for an interconnection enabler over a private securenetwork,atanaffordablepriceandwith the guarantee of the required QoS.

Clearly,therearebenefitstoIPX,butthere is currently a low level of demand for IPX services due to the low number of IP inter-connections between operators on the market. This is because mobile operators are not yet launching IP data services on a large scale.

However, this is changing. There is strong evidence of a shift right now as the market moves toward an all-IP world. But, of course,

the market and the economy have had some impact on contingency plans, operator targets and —ultimately — the pace of progress.

DRAMATIC DYNAMICS

Atfirstglance,itmayseemthatIPXisachicken-and-egg situation. But that will change dramatically as more operators launch IP services.

To understand the hold-up, it’s important to understand the dynamics at play here. For mobile operators, moving to an all-IP environment means a revolution in commu-nications, and this implies high investments.

VoIP services are expected to drive the move to an all-IP environment that will stimulate the use of IPX.

Nonetheless, several factors, such as theexistenceofVoIPservicesofferedbynon-telecom players, solutions such as Circuit Switch (CS) Fallback, the high cost of LTE implementation and the availability of LTE devices, are slowing down the advance of VoLTE. These same factors are

A Brave, New, All-IP Worldby Elena Sacco, Chairman, The Interconnection Working Group (IWG), GSMA & Senior Interconnect Manager, TIM


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also slowing the evolutionary path of mobileoperatorstowardsofferingVoIPservices in general.

DRIVING DEMAND

However, if VoIP services may not be considered the imminent driver of IPX deployment on a large scale, data services requir-ing a guaranteed QoS might serve to stimulate market demand for IPX services.

LTE Roaming is the perfect example. With the high-speed data transmission enabled by LTE, it might be risky to keep on applying datapricingplansforroamingtrafficbasedon volume or usage per month. Such pricing models may, in fact, impact consumers neg-ativelyasfasterdataspeedwillsignificantlyincrease data consumption.

New pricing schemes, where charging is more in line with the transmission opportu-nities enabled by LTE, may be based, for example,ondifferentguaranteedQoSlevelsperdifferentservices(andalsoperapplica-tion, as it may happen in the case of cloud services). In this case IPX would be the essential enabler, being the only current solution for a QoS guaranteed IP inter- connectionabletoensurepropertrafficexchangebetweendifferentplayerson the market.

PEERING MATTERS

When it comes to IPX, peering among IPX providers is an essential element because it enables global reachability. Without full peering among IPX providers on the market there is the risk that IPX services will be developed as ‘silo’ solutions. This certainly doesn’t serve the better interests of mobile operators, or their customers. Solutions cannotbeofferedas‘islands’,sothisisexactly what operators must avoid.

Peering enables general interoperability of services on IPX between operators and multiple connections and global reachability via one-stop connectivity. In other words when full peering among IPX providers is a reality on the market, operators, through just one contract with IPX providers, can update connections to hundreds of operators and third-party players around the world.

Peeringalsoenablestheofferingofdataservices on IPX at a high QoS and, above all, the migration of voice services over IP. Indeed, with the migration of voice services on IP there is clearly the need to ensure cross-border interconnection on a global level. Equally important is the guarantee of a level of quality related to these voice services, which can be applied globally and which is comp-arable to the high level of QoS end-users already experience. Worldwide peering makes IPX the key enabler of such a migration.


COOPERATE AND INTERCONNECT

The move to an all-IP world doesn’t only present operators with a world of opport-unities. There is also the increased comp-etition from alternative service providers offeringservicestosubscribers,creating the need for operators to interconnect with these players.

Clearly, the big question is how to imple-ment a proper interconnection with these partiesandfindamodelthatproperlycom-pensates all the players in the value chain.

There will be many approaches — but one common objective. The operator’s task here istofindamodelofco-existenceandcooperation that allows them —and other players — to achieve their objectives and stay relevant. In this case, the IPX network, because of all the characteristics highlighted above, will be the key solution to support the market’s interconnect objectives.

Elena Sacco works within the Industry Relations & Roaming Division of Telecom Italia, where her areas of expertise include business development, Interconnection and Roaming with a strong focus on the evolu-tion of mobile TLC services. Sacco also chairs the Interconnection Working Group (IWG), one of the eight permanent Working Groups under the GSM Association (GSMA) IWG brings together more than 350 members including mobile operators, international carriers, hubbing providers and equipment providers.

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In some African and the Middle Eastern countries, the practise of outsourcing international traffic management is seen by regulators and Ministries of Communications (MoCs) as a means to get their fair share of revenues from local operators. The outsourcing model is considered by MoCs as a way round the notion that operators declare lower levels of international traffic than they actually handle, resulting in lower payments to the local MoC.

While outsourcing may be a way to collect ‘true’ revenues, MoCs and regulators have to balance between enforcing license conditions without damaging competition at the consumer level and having a negative impact on quality of service (QoS). The two operating models gaining traction with MoCsaremonitoringoperatortrafficstreams and outsourcing international trafficmanagementtothirdparties.

MIXED RESULTS

Thefirstmodelcentersonnewcontrolsandvisibility. Some MoCs have empowered the regulator to have access to near real-time dataforallinternationaltraffic—voice,SMS, MMS — managed by the local opera-tors. To gain visibility into this data within the operator network the regulator invests intrafficmonitoringsystems.Theinforma-tion gathered by such a system allows the MoC to calculate and collect correct amount of levy from the operators. A number of trafficmanagementandmonitoringsys- temstailoredtoaspecificregulator’srequirements are available on the market to make this an easy task.

The other business model being adopted is around third-party management. According to this model the MoC outsources international trafficmanagementtoanindependentthirdparty or to an international Wholesale Operator. All domestic operators in a given country are then required to send and receive international calls through single or multiple international gateways (switches) managed by the third party.

Boosting Trust, Building BusinessBy Ranjeet Wilkhu, Director, Neucom Solutions



Some MoCs have even gone so far as to outsourcefinancialsettlementsbetweenlocal operators and international operators, making the third party responsible for billing, collections and payments. In this scenario the third party may also earn revenuefromthefinancialtransaction.Inaddition, the third party may be entitled to a percentage of revenue, or be permitted to chargeafixedfeeplusashareofrevenues,or gross margin. The third party is also responsible for all operator activity, includ-ing negotiation of operator interconnects andtrafficrouting.

Under the latter model local operators are concerned that their interests and the inter-ests of the third party — the company to whichtrafficmanagementhasbeenout-sourced —are not aligned. Put another way, operators believe the third party may be morefocusedonmaximisingprofitforthemselves than on reducing termination cost for the operator, or delivering QoS for the customer.

Clearly, this would have obvious and negative repercussions for the operator. Atonelevel,anoperatorsuffersalossinrevenues. At the other end of the spectrum, the perceived lack of attention for QoS could result in an increased number of customer complaints and an increased burden on customer care services.

IPX SOLVES ISSUES

When it comes to connectivity across the region and with the rest of the world, the advance of IPX provides interesting options and opportunities. By way of background, provisioning connectivity for operators in Africa and Middle East can be an expensive and a lengthy process.

The high cost of provisioning connectivity, be it via cable or satellite circuits, is driven by scarce capacity. At present a large pro-portionofvoiceandSMStrafficiscarried

Operators believe the third party may be more focused on maximising profit for themselves than on reducing termination cost for the operator, or delivering QoS for the customer.

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over expensive TDM networks to and from these regions to manage and maintain QoS.

Connecting to IPX reduces this cost since the operator does not have to procure individual TDM circuits for each operator interconnec-tion. Additional savings are gained from not havingtosendtrafficdestinedforaneigh-bouring country via Europe or the U.S. For example,telephonytrafficfromIrantoIraq isdirectedtoEurope/U.S.first,andthendeliveredtothefinaldestination,Iraq.There-fore, two separate expensive TDM circuits are used to transport a single call. On IPX, both operators may be connected to the same

IPX,whichmeansthetrafficwillnot trombone. Instead, it will be completed using single hop.

Once IPX reaches maturity and creates adequate connected communities, then an operator connecting to IPX will not need multiple connections to multiple operators for multiple products. A single connection to an IPX will do the job. This is because voicecalls,SMS,MMSandothertraffic are carried on the same, single and secure network connected point-to-point, thus ensuring optimal routing, an improved QoS and excellent customer experience.

Providers deliver guaranteed qoS and gain a share of the revenue stream

MNOs MNOs


SLA

SP A

SLA SLA

$ $ $

IP Network IP NetworkIPX 1 IPX 2


The needs of MoCs for transparency and accountability are also addressed. In other words, IPX would provide MoCs or regulators accesstotrafficreportingandmonitoring,giving them visibility into near real-time trafficdata.Suchinformation,obtainedthrough an operator-independent source, would further give MoCs and regulators confidencethattheyarepaidtheirshare ofduesforinternationaltraffic.This,inturn,would build trust in the system, and remove the need to invest in expensive monitoring systems,oroutsourcinginternationaltrafficmanagement to third parties.

In Africa and the Middle East IPX is in an early roll out phase. One hold up is the further work needed to establish standards and encourage acceptance within the operators and mobile network operator community. I do not expect to see a huge uptake of IPX interconnects in Europe or the U.S. in the near future. In Asia, the Middle East and AfricaIPXoffersaviableoptionformanag-ing multiple interconnects with a single IP connection. This has a number of advan-tages. Chief among these: it would allow domesticoperatorstheflexibilitytonegoti-ate their own termination rates with other operators connected to IPX, while maintain-ing QoS. At the other end of the spectrum, MoCs and regulators would have access to accurateinformationabouttrafficflowsin

and out of the country - visibility that builds trust and — ultimately — puts operators back in charge.

Ranjeet Wilkhu is a Director with Neucom Solutions, an independent telecoms consult-ingcompany.Hiseffortstoforgerelationshipswith telecom businesses globally allowed him to make a major contribution to the success-ful implementation of a program under the Iraqi Ministry Of Communications titled “International Marketing and Management ofVoice,SMSandMMSTraffic.”

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Hong Kong is a vibrant telecommu-nications market where customers have come to expect — even demand — high-speed, high quality service offerings through fixed-line and mobile services. Naturally, operators, includ-ing PCCW, have responded with triple-play and even quadruple play services. Now, as the region’s mobile industry shifts from being voice-centric to data-centric, LTE has emerged as the foundation of operators’ future business. What motivated PCCW to launch LTE in April, and what services will drive adoption? How can LTE both boost domestic service and support international roaming? To what extent is IPX an essential route to 4G and next-generation services? Richard Midgett provides us a candid and first-hand perspective.

PCCW is the largest and most comprehen-sive provider of communications services in Hong Kong, where it meets the needs of consumer customers and enterprises —

both local and international — with a wide range of services, including 4G/3G/2G mobile and public Wi-Fi wireless services, traditionalandnext-generationfixedlineservices, Internet access and broadband pay-TV, a wide array of business services, as well as large-scale IT solutions.

Trace the history of PCCW and there is a keen and consistent focus on delivering value-addtofixed-lineandmobileservices.This approach has allowed PCCW to evolve fromafranchisedmonopolyfixedoperatortobecometheproviderofHongKong’sfirstquadruple-play experience. In addition to offeringlocalservices,PCCWoperatesinter-national carrier services under PCCW Global and has recently launched an LTE network in the U.K. via its UK Broadband subsidiary.

Hong Kong is a crowded and competitive market where customers have developed a tremendous appetite for — and appreciation of — data services. Even before PCCW launched LTE in April 2012 the residents of Hong Kong were long accustomed to having the highest quality of coverage and extremely fast data connections. At home, a majority of the population has access to theInternetatspeedsupto1Gbpsviafibreservices.Infact,thetypicalofferingnowisconsidered to be 100 Mbps. On the move,

Voice: The IPX Killer AppBy Richard Midgett, Managing Director, Wireless Business, PCCW Limited



high-speed access is everywhere, even in unusual indoor areas: parking garages, elevators, subways — the works!

Put another way, the Hong Kong consumer isaccustomedtohighfixed-linespeedsthatare widely available. Against this backdrop, mobile is not typically a substitute where fixed-lineaccessisnotavailable.Instead,mobile functions as an extension of the high-speed access consumers have come to expect in their daily lives. Spoiled by high-speed access at home, these consumers demand this when they step out of their home, and across a variety of devices.

HIGHLY MOTIVATED

Asia-Pacific,asawhole,ispoisedtobecomethe largest LTE market in the world by 2015. Accordingly, Hong Kong is seeing an expo-nential growth in data adoption and in the volume of data consumption on the mobile networks. Naturally, this creates concerns about the availability of adequate spectrum. As a rule, more customers on a mobile network will cause each user’s speed to drop because everyone on that network shares it. Keeping pace with this dynamic requires operators to increase the capacity of the network. At PCCW, acquiring new capacity was one of the drivers behind the decision to launch LTE.

Of course, investments in this new infra-structure should also deliver the best performance possible for our customers. LTE is an obvious choice for technology, but an adequate supply of handsets that make use of that technology in the relevant spectrum is also critical. This point cannot be overstated.

Look back to the introduction of 2G (GSM) technologies. Operators built the networks, but customer adoption lagged behind because the handsets failed to deliver the quality and performance they wanted. They were big, clunky and battery-life was limited. It was only after new and improved handsets hitthemarketthatwesawasignificantincrease in customer adoption of 2G. The launch of 3G followed a similar pattern. Although the 3G networks were operational, the mass-market move to 3G didn’t happen until the handsets were mature.

And it’s the same with LTE, which is why PCCW purposely launched in April with a suite of handset products that meet customerrequirements.Specifically,PCCWstartedofferingLTEhandsets,tabletsanddongles from major brands like Samsung, HTC, LG and Huawei in the run-up to the full commercial launch of its 4G network. Even so, LTE handsets are currently a two-chipset solution, which means they have the existing chipset that is used in 3G phones plus an

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additional chipset to extend that capability to 4G. The downside: they use more battery to power the two chipsets, which either impacts the performance or increases the size and weight of the handsets. Nonetheless in relative terms these handsets perform better than prior-generation predecessors, are improving rapidly, and are expected to become fully optimised by 1Q 2013.

LTE BUSINESS BENEFITS

At PCCW our core strength is providing the highest quality networks which enable cus-tomers to communicate with each other and with services on the Internet. To this end we have built — and continue to build — network capability that meets customers’ needs for coverage and speed. This is where LTE comes in — PCCW made the decision to launch LTE to continuing delivering on these objectives. Of course, LTE roaming also plays a role, but there are challenges.

Currently, there is a great disparity in terms ofwhatfrequencybandsarebeingidentifiedand made available for LTE globally. While the 2600 frequency band is broadly adopted as a primary band it is not available everywhere. Some markets, including Hong Kong, are actively re-farming the 1800

frequency band for LTE, which could hold great promise for roaming in the future. Mosthandsetmanufacturerswillfinditimpractical to support all the frequency bands being used globally for LTE, so it will be important to identify the key bands which represent the greatest common denominator for travelers. In view of this, I think it’s no mistake that the 1800 band is already supported in many handsets.

It’s still early days for LTE and for those customers who are enjoying LTE in their domestic markets. So, when these early adopters travel out of their domestic market, their roaming service will probably fall back to 3G networks. But there is no ignoring the fact that LTE has already created the customer expectation for higher quality service — at home and abroad. At PCCW it will be a challenge for us to keep ourcustomerssatisfiedbecausetheyalready expect to enjoy the same services when roaming that they have at home, and that will soon include LTE data speeds.

IPX UNDERPINS DATA

At PCCW we view IPX as a managed IP network, one that provides a reliable quality of service and enables operators to connect tooneanotherandofferamanagedquality


of service to their customers. That is a given. It’s what operators deliver over IPX in the way of services that becomes the real question.

AtPCCWthefirstservicetobeembraced,under what was called GRX, was all about the capability to have our roaming custom-ers’datatrafficroutedbacktous.Thisarrangement has been essential in determining how, and how well, we serve our customers. More recently there is discussion about local breakout and the benefitsitdelivers.Wemayindeedseearrangements move in this direction, but not until the service management capabilities are in place to enable operators to have their own policy controls. This is essential because operators need to have ‘remote control’ to ensure visibility, enforcement of policies and the ability to manage service quality.

But it’s not just about maintaining control of the service; it’s also about avoiding unfortunate outcomes for the customer. Take the example of ‘bill shock’. Customers, and some regulators, have called for operators to inform roaming customers of the amount of data they use — and the precise cost — when they are abroad. There is also the expectation that operators will enforce limits to protect the customer from bill shock by suspending data services

altogether when usage exceeds a pre-determined threshold. In many cases, PCCW being one, this emphasis on protecting customer interest is now in place.

Accordingly, until ‘remote controls’ can be put into place, there will continue to be a demandfortheGRXmodelofdatatraffic, withthetrafficbeingroutedbacktothehomenetworks, where operators have visibility and control. Therefore, IPX is part of an on-goingbusinessplanforGRXtraffic.Thiswill certainly be the case for the near-term, and will continue until the systems to enable local breakout materialise and are tested.

VOICE GETS A BOOST

But this scenario is not just about the benefitstoroamingcustomersusing data services. There is also an opportunity around voice.

Awarenessofthemainbenefitswhich IPX provides are currently focused on future scenarios for LTE roaming customers. In other words, the use cases around LTE roaming and — later— VoLTE immediately come to mind. However, there is a much more immediate opportunity to consider: how IPX can already enhance today’s 3G/2G voice roaming.

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Consider when a PCCW customer roaming overseas receives an incoming call. Today this call is rerouted to the visited network via a traditional IDD operator. In other words, PCCW passes that call to the IDD operator, and it is delivered via an uncertain number of network connections, albeit hopefully with the CLI — or calling line identity— so the PCCW roaming customer canseewhoiscallinginthefirstplace.

With an IPX it is possible to redirect this IDD trafficanddeliveraddedvalue.Inpracticethe IPX provider can deliver a guaranteed quality of service between mobile operators. Furthermore, the IPX provider can ensure the call-control signaling is reliably exchan-ged between home and visited networks to facilitate enhanced homenetwork control if the call is unanswered. Because of this benefit,IPXalsobecomestheobviousfirstchoice path for an operator to route voice traffictoaroamingcustomer.

Put simply, this approach provides the operator important visibility into what is happening on the other end. Is the sub-scriber busy on the phone? Is the subscriber offline?Knowingthisforsureequipstheoperator to manage the call, rather than just blindly sending it to the IDD operator with hopes for the best.

Thus, IPX enables a number of advantages for the operator and the roaming customer

right now. First, there is more controlled routing. As a result, there is also a higher quality of service. Second, the operator can determine what to do when a call is not answered. Should it be connected to voice mail, or some other answering services? Theoperatorcandecideandtakespecificaction. With this comes the opportunity for operatorstooffervalue-addedservicestoroaming customers to manage those calls in new and innovative ways. Perhaps the roamer would like calls routed to a service that records the message and delivers it, similar to Bubble Talk. This is the type of servicetravelerscouldfinduseful,and one that operators cannot deliver so easily today.

THREE IPX SCENARIOS

Broadly speaking, there are three key scenarios around IPX involving mobile- originatedvoicetraffic,whichofferavaryingdegreeofbenefittothehomeoperator.Imaginefirstascenariowheretheroamingcustomer makes a local call in the local country. If you are the home operator you still have to rely on the visited network to deliver the call. In other words, IPX doesn’t delivernotablebenefit.Thisisnotthecasein the next scenario.

Imagine, however, that a roamer wants to call a number in their home country. In this


scenario there is the potential for the visited network to route that call back throughtheIPXtotheroamer’sspecifichome network operator, not just back to the roamer’s home country. In this way, the home network operator is not only delivering the call, it is controlling how the call is delivered. IPX equips the home network operator to manage that call in new and innovative ways.

ThefinalscenarioisanIDDcalltoathirdcountry, where the home network operator and the visited network operator are dep-endent on other operators to manage and terminate the call. Whether or not IPX is used in this scenario would be subject to an agreement between the operators on how to manage such calls. Nonetheless, a benefitforthattraffictoberoutedbacktothe home network, where it can be managed, potentially still exists.

The second scenario, in particular, illus-trateshowIPXdeliversbenefitstothecustomer by enabling the home network operator to enhance quality of service and — if they choose —deliver additional value -add on top of the service. But it doesn’t stop there. There are likely to be cost —or cost management—benefits,whichthehomeoperator can pass along to its customers.

Clearly, IPX services can take all the guess-work out of call delivery control for the homenetwork.Therearebenefitsformobileoperators and their roaming customers, as well as the IDD operators. For IDD operators it means modifying their current business model to become IPX providers. Underlining this shift is the recognition that IPX will be the medium for voice communications in the future. Granted the IPX business model is built around the potential of mobile-to-mobile data connectivity, but IPX is also at the core of the more traditional killer app: voice.

Richard Midgett has over 30 years experience in the telecommunications industry. He began his career with Cable & Wireless USA, where he served in a range of technical management roles. After joining Hong Kong Telecom’s CSL mobile team in 1989, he served in a variety of areas spanning business and product devel-opment, government policy and regulation, and overseeing the commercial business for roaming, international operator, and whole-sale services before moving to PCCW. Mr. Midgett has also held active positions in a number of industry organisations including most notably serving as chairman of the GSM Association, chairman of GSM Asia- Pacific,andasamemberoftheboardofgovernors of the Universal Wireless Communications Consortium.

PART fOUR LTE: UNLEASHING INNVOVATION TO DELIVER RESULTS


MetroPCS Communications, Inc. — the fifth largest U.S. facilities-based wireless carrier operating on its own network — reached a milestone in August 2012, becoming the first operator globally to launch Voice over LTE (VoLTE) services. The roll-out of these services marks a win in the international race to provide next-generation mobile voice and paves the way for MetroPCS to achieve significant spectral efficiencies and enhance the 4G LTE experience for customers.

Innovationandfirst-moveradvantagearepart of the corporate DNA at MetroPCS that has allowed the company to be a pioneer and become the U.S. leader in no-annual-contract mobile service with

approximately 9 million customers. In Sep-tember2010,MetroPCSwasthefirstU.S.operator to deploy a commercial 4G LTE network, a network that today covers the majority of the Company’s CDMA footprint.

MetroPCS began operations just over a decade ago. Since then the operator has focused on deploying technology that equips it to scale its business and satisfy its custom-ers with reliable, robust and value-driven services. Naturally, the decision to deploy LTE also had its roots in that strategy.

EXTRACTING VALUE

We at MetroPCS knew we needed to build our future on a technology that would deliver long-lasting capability and competitive edge. Withthreekeybenefitsinmind,MetroPCSstarted down the path to LTE.

Enabling 4G LTE for AllBy Ed Chao, Senior Vice President, Engineering and Network Operations, MetroPCS

Soon customers will feel limited by these vertically integrated application ecosystems and content ecosystems. That’s when MetroPCS will leverage rich communication services (RCS) to provide customers with a unified experience that cannot be achieved with today’s OTT services.

PART FOUR: LTE: UNLEASHING INNVOVATION TO DELIVER RESULTS

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First, LTE is a global standard within the 3GPP ecosystem. Therefore, it would allowMetroPCStobenefitfromeconomiesof scale. It would also ensure access to a large supply of smartphones at attractive andaffordableprices,meetingtheuniquerequirements of our customers and increasingly important demand of value -conscious consumers.

Second, LTE can squeeze more capacity out of spectrum. In the case of MetroPCS, this would support our own aim to refarm spectrumandachieveefficiencies.LTEwillallow the company to convert 2G airwaves to 4G, opening capacity for new customers and new services.

Finally, it was clear that LTE would enable MetroPCS to send voice calls and provide better voice quality in the process.

After carefully weighing available options , we decided that LTE was the technology that would best complement our capabili-ties, equip us to serve our customer base, and ultimately, allow us to be the 'David' among the four other ‘Goliaths’ in the U.S. 4G mobile market.

DELIVERING VALUE-DRIVEN SERVICES

LTE provides MetroPCS with the capabilities to stand up against the competition while also allowing us to be agile and deliver on our chief value proposition: to deliver service that ispredictable,simpleandaffordable.Thisproposition resonates with our customers' desire for easy to use, value- driven services and a better mobile experience.

MetroPCS’ key theme began as delivering “Wireless for All,” reinforcing our aim to provide our customers with predictability and simplicity when it came to their wireless service. We achieved this throughofferingcompletetransparency by including taxes and regulatory fees for unlimited voice, text and data packages. It also gave customers a comfort level because they could be certain there would be no surprises in their monthly bill.

In 2011, in line with the rollout of LTE, MetroPCS took this theme and campaign to the next level and launched the second chapter of its Wireless for All strategy –, aptly called “Android for All,” which was also a world-first.AndroidforAllaimedatprovidingour no-contract customer base an Android phone and a great smartphone experience atanaffordableprice—namely,under$100.


LTE (and MOrE) FOr aLL

Fast forward to mid-2012, when MetroPCS marked a new and successful chapter in its evolution.Specifically,MetroPCSlaunched“4G LTE for All,” a campaign to promote the U.S. debut of an unlimited 4G LTE data plan that bundled unlimited voice, text and data, forjust$55permonth.Theofferiscoupledwith the lowest priced 4G LTE smartphone ever launched at $129.

With these services, 'David' once again has a leg up on the 'Goliaths' in the marketplace. MetroPCS is able to maintain a competitive edgebyoffering4GLTEforAllbecauseofthe early decision to make the move from CDMA to LTE. To date, MetroPCS has completed 97 percent of its LTE coverage

throughout our major markets, which comprise 11,000 cities and towns.

The beauty of this rollout was the alignment between strategy and tactics, and how industry forces are converging to deliver significantbusinessbenefits.Inaddition tobeingfirsttooffer4GLTEatunmatchedaffordability,MetroPCSwasalsothefirstinthe world to launch a commercial voice-over-LTE(VoLTE)service.Thisissignificantfor several reasons. First, by converting voice to data, VoLTE makes better use of our radio spectrum. Second, it allows for better voice quality for our customers. Finally, VoLTE is a technology that will also provide the basis for future RCS (Rich CommunicationServices)offeringslateron.

RICH SERVICES, jUST IN TIME

MetroPCS has worked hard to provide customers 4G LTE technology and enable a great user experience that incorporates fastspeeds,affordablephonesandthelatest technology. We are focused on what wedobest,namelyofferingcommunica-tions.Thatsaid,itisdifficultforasmalleroperator like MetroPCS to provide every-thing a customer wants. To ensure that we meet our customers’ needs, we want

Figure 1: Based on data from MetroPCS.

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to make it possible for our customers to get content, apps and services that we are notabletooffer,andthisiswhereAndroidcomes in to provide customers with a wide choice of apps and content they can access and enjoy on their smartphones.

The same approach applies to communica-tions. Customers should be able to choose and to use the services they want. It's up to them whether they use Skype, Google Voice or Facebook. MetroPCS supports this variety of Over the Top (OTT) services to drive a desire among customers for the interoperability of these services.

Imagine a customer on Facebook, who has a good friend on Google+. The two friends can't communicate freely using those plat-forms because they don't use the same application. Soon customers will feel limited by these vertically integrated application ecosystems and content ecosystems, and MetroPCS will leverage rich communication

services (RCS) to provide customers with a unifiedexperiencethatcannotbeachievedwith today’s OTT services.

Customers will be free to communicate with anyone they want, regardless of the applica-tion they use. RCS will bridge this divide between applications and extend the user experience customers have with MetroPCS on voice and text to the next generation of communications services.

In a way, it's almost as if history repeats itself and takes us back to the early 2000s when there was no SMS interoperability because operators wanted to make sure theycoulddifferentiatetheirservices. As we now know, SMS interoperability unleashed a lot of value for operators and their customers. And we see the same potential with RCS.

We decided that LTE was the technology that would complement our capabilities, equip us to serve our customer base and ultimately, allow us to be the ‘David’ among the four other Goliaths in the U.S. 4G mobile market.


UNLEASHING VALUE

Against this backdrop, the goal at MetroPCS is to rollout RCS to its markets and educate our consumers so that we can deliver a great user experience. MetroPCS also wants to work with partners — and competitors — to drive more rich communication services across the ecosystem. To this end, MetroPCS plans to launch an initial set of RCS services later this year and then move rapidly to RCS 5.

One other important part of MetroPCS’ plans going forward is 4G LTE roaming. There are some challenges around the establishment of agreements that must be overcome in order for MetroPCS and other operators to move forward. However, this situation will change the next 12 – 18 months once agreements are in place. When these issues are resolved, and operators have a common foundation on which to enable LTE roaming across the ecosystem, we will have a clear path to deliver additional value for our customers. It's here that IPX provides the necessary foundational element to this strategy, allowing MetroPCS to connect with roaming partners, both domestically and internationally and scale upquickly.AnotherbenefitofIPXistheinteroperability it facilitates.

BACK TO THE FUTURE

The pace of change is only accelerating, and the impact on mobile is profound and oftenunpredictable.Justfiveyearsagoitseemed the appeal of smartphones would surelybelimitedtoanaudienceofaffluentearly-adopters willing to spend $500 on a device and $200 a month on limited rate plans.

Today, smartphone penetration in the U.S. market has passed the 50 percent mile-stone (with total mobile device saturation at more than 105 percent) — and that doesn’t count the increase in tablet shipments and usage. What's more, it is now typical for people to have multiple devices. As a result, mobile operators have introduced shared data plans and packages that allow people to have and use a multitude of connected devices on their terms.

Whatwillhappenanotherfiveyearsfromnow? There's no way of knowing. But it's important to prepare now, which is why MetroPCS has consciously and consistently made technology decisions and investments thatallowustobeagileandflexible.

MetroPCS built the foundation for our future when it made the early decision to move to

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4G LTE. Today, we’re beyond the heavy lifting, and from here it's about adding capacity so we can continue to evolve LTE. This is where policy control becomes essential to guarantee our customers have a certain level of quality of experience, regardless of the application they may be using.

Clearly, MetroPCS is delivering on our 4G LTE vision that is built on the decision to deploy LTE. The capabilities are in place to serve and retain our customers, remain relevant and stand up to the 'Goliaths' for years to come.

Mr. Chao joined MetroPCS as Senior Vice President Engineering & Network Opera-tions in September 2008. Prior to joining the company, Mr. Chao served as Vice Presi-dent Product Management at Alcatel- Lucent in the CDMA Networks Business Division. He held a variety of other positions at Alcatel-Lucent, including Business Devel-opment and Strategic Planning, as well as conducting research on wireless applica-tions in Bell Labs. Prior to Alcatel-Lucent, Mr. Chao worked with Nortel/ BNR where he wasprimarilyinvolvedindefiningfront-endrequirements and standards in support of the company’s entry into CDMA. Mr. Chao holds a MBA from Columbia University, a MS in Electrical Engineering from Georgia Tech, and a BS in Electrical Engineering from Rutgers University.


In the mobile industry nothing excites analysts and investors as much as disruptive technology that can potentially change all the rules. They are in awe of technology that can be labeled as a “game-changer,” or can be seen to “re-write the rules” that came before. Disruptive technology spells opportunity and paves the way for new players. But not all players welcome the tremendous change it brings. Network operators, for example, would rather see disruptive tech-nology integrate smoothly, and offer up business opportunities, not problems.

The Apple iPhone, the smartphones from other manufacturers that followed, and the app store model that swept in behind are all developments that can certainly be classi-fiedasdisruptive.Grantedtheseinnovationswere quickly absorbed into the overall mobile ecosystem, laying the groundwork for a new phase of growth and innovation around smartphones, mobile apps and an ever-growing array of connected devices.

But the impact of these disruptive technolo-gies on the operator business models was profound. The space was shaken to its core before anyone in the industry could react. In fact, the advance of smartphones paved the way for the most potentially disruptive development of all: a whole raft of new, so-called Over the Top (OTT) competitors and services that could marginalise operators in the revenue chain.

fighting Smart To Win BigBy Madan Jagernauth, Vice President, Marketing & Strategy, Mavenir Systems

It [RCS] capitalises on the operators’ core proposition of ubiquity, reliability and reach, providing a common approach to a set of new value-added services that operators can offer on existing 3G infrastructure, as well as future LTE networks.


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Connect the dots, and the swift advance of smartphones, mobile apps and new services have changed the rules of the game forever.

The good news: the game just started. The same disruptive technology — and the new businessmodelsitenables—offersopera-tors a way to get back in the game. And if they develop and deploy the right strategies they can even move back up to the top of the revenue chain. Better still for an industry that was created through the vision of worldwide standards, this disruptive tech-nology has created a new space that is big enough for everyone. What’s more, getting

in the game doesn’t require massive invest-ment in long-term infrastructure overhaul.

GET RICH qUICK

Over the past years, the GSMA has invested time and resources to enhance its Rich Communication Suite (RCS) concept, aimed atallowingmobileoperatorstoofferinnova-tive and competitive services. RCS builds on the universal success of the GSM standard and is an opportunity for operators to re- invigorate and expand their product and service portfolios. It capitalises on the oper-

Figure 1: Source: Juniper Research. (1)

number of mobile VoIP users (millions) 2010-2012 by eight key regions

201220122010

0

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Indian Sub Continent

far East & China


Western Europe

Latin America

North America

FOOTNOTE

1. www.juniperresearch.com/reports/mobile_voice_strategies


ators’ core proposition of ubiquity, reliability and reach, providing a common approach to a set of new value-added services that oper-atorscanofferonexisting3Ginfrastructure,as well as future LTE networks.

RCSwillallowoperatorstofightbackagainst OTT players by enabling them to move beyond traditional voice, text and dataservicestooffernewservicessuchasgroup instant messaging or chat, live video sharingandfiletransferacrossanydevice,on any network, with anyone in a mobile address book. RCS will enable operators to provide services that meet the increasing requirements of today’s hyper-connected consumer because they are completely in sync with how people share their content — and their lives — with each other via laptops, tablets and smartphones.

For operators, and their customers, RCS is a compelling proposition. RCS also enjoys the support of the several mobile ecosystem

players. It has the global support of the operator community and it is also embraced by many of the major handset vendors, companies that have committed to the project and are embedding RCS services onto their latest handset models.

FAST TRACK

Before operators can launch RCS services andreapthebenefits,theywillneedtoimplement some changes within their network. One key change will be the imple-mentation of IMS but not all operators are ready to move forward on this.

Clearly, there are RCS services whose deployment is dependent upon the roll-out of LTE networks. Fortunately, the advent of cloud-basedsolutionsoffersoperatorsashort-cut,allowingthemtoofferRCS-likeservices starting today, without IMS.

This cloud-based approach to delivering Voice, regardless of data path, will enable operators to jumpstart deployment of enhanced services.

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Take the case of operators looking at Voice over LTE as a way to compete against servicesofferedbytheVoIPplayerssuchasSkype and Viber. Rather than wait for the roll-out of their LTE networks (necessary for VoLTE),theseoperatorscanstartfightingback now by migrating to Voice over Wi-Fi (VoWi-Fi) using the same voice (and video) call control infrastructure that is needed for VoLTE and incidentally, the same infra-structure that supports Voice over HSPA (VoHSPA) in the future.

This cloud-based approach to delivering Voice, regardless of data path, will enable operators to jumpstart deployment of enhanced services. In fact, the cloud can become a fast-route-to-market service delivery platform for a host of operator- provided fully integrated RCS style services, including messaging.

And there are other advantages to consider. Group messaging services like Viber not only overtake the operator network, they also access information stored in the address book on the device, and use this to show users who else among their contacts has Viber and can make a call using the app. This integration plays in favor of OTT players,makingiteasytofindandcallcontacts using the same software. On some smartphones this has been automated so

that the simple act of making a call triggers the question: “Do you want to use Skype, Viber or the Phone?”

However, operators shouldn’t only be con-cerned about the loss of the connection with the customer, or the impact on their position as the go-to trusted supplier of voice services.

Research shows that OTT-provided VoIP serviceshardlyusebandwidtheffectively. In fact, they typically occupy about 25 percentmorebandwidthtohandletrafficthan operators could achieve using VoWiFi or VoLTE.

There is no shortage of sources that use significantamountsofbandwidth.Given the demands on mobile data networks, the pressureisonoperatorstofindwaystosavecapacity and avoid a bandwidth crunch. Put anotherway,operatorsmustfindwaystofree up capacity, and opting to deliver messaging service using VoMBB is clearly a path operators should seriously consider.

In exploring the many compelling reasons why operators should explore the RCS-style services they can deliver now by using a cloud-based service delivery model, let’s not forget the key competitive advantage these services can deliver. Indeed, a prime driver


andbenefitofRCSisthelevelplayingfield it can create. This is a positive outcome becauseRCSeffectivelyequipsoperators to stand up to the OTT players.

SMOOTH MOVES

The GSMA is taking a market-by-market approach to enable a smooth launch of RCS. In practice this means working with a group of operators to ensure the full ecosystem — including the necessary network infra-structure and handsets — is in place across each market.

As a result, all operators in a particular market can be positioned to launch RCS services at the same time. More importantly, the RCS promise of cross-handset and cross-network compatibility can be supported.

Thebenefitsofthisapproachcanalreadybeseen in countries such as Spain. Operators there jointly launched RCS services under joyn, a new consumer-facing brand developed by the GSMA for RCS.

WhileRCShascreatedalevelplayingfield, it has not changed the business dynamics that separate the market-leaders from the also-rans. The task now for those operators is to market and deliver joyn services, a goal that forces them to compete head- on against both the OTT players and each other.Significantly,thetransitionfromworking together to speed market implem-entation to competing against each other for market success has been virtually an overnight process.

Against this backdrop, we believe operators canbenefitfromdisruptivetechnology—and beat the competition at their own game — provided they make the right choices.

This cloud-based approach to delivering Voice, regardless of data path, will enable operators to jumpstart deployment of enhanced services.

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But they shouldn’t wait to innovate. Operators that make the move to deliver RCS-style services now by using a cloud-based platform over their existing infra-structure will have a head start in the marketplace. But it’s not just about introducingRCSservicesfirst,operators will also gain valuable and practical experience that will help them maintain their competitive edge against both OTT players and local market rivals.

Madan Jagernauth has 20 years experience in the wireless industry. As a mobile broad-band pioneer, Madan managed wireless access products from GSM/GPRS to WiMAX and LTE. Prior to joining Mavenir, Madan was with Huawei for four years where he held responsibility for wireless marketing and product management, and mobile broad-band solutions, with Nortel Networks for 21 years and Honeywell for 9 years.


Research underlines the pivotal importance of LTE. But success with LTE is not dependent upon how operators implement the tech-nology. They must also succeed in how they launch and communicate their offer in the marketplace. To guide operators as they define their approaches we have identified six ways to position LTE in today’s data-centric world. Whilst this is not an exhaustive list, it does introduce needed clarity into the increasingly murky discussion about this technology and the benefits it delivers.

NO. 1 FOR TABLET USERS

Pitch LTE as the preferred connectivity solution for tablet owners who want more than patchy Wi-Fi service. Keep in mind that tabletownersdiffer—bothindemographicsand behavior — from non-owners. Under-standingthesedifferencesallowsoperatorsto cater their LTE packages to tablet-own-ers, a demographic that clearly sees the value in robust and reliable connectivity.

Who are the tablet-owners? Our research shows they are:

Younger. In fact, tablet owners today are more than 10 years younger on average than non-owners. More affluent. The average tablet owner earns $70,000 per year and has an annual household income of $87,000. The average non-owner earns $56,000 per year and has an annual household income of $66,000. Smartphone-enthusiast. Respondents who own a tablet are 31 percent more likely to own a smartphone than people who don’t yet own a tablet.

In our view, tablets plus LTE is a match made in heaven. Against this backdrop, operators that position LTE as the ideal connectivity solution for tablets are on the right track. Additionally, operators have the opportunity to establish their company (and their brand) as THE number one choice for this discriminating demographic.

And let’s not forget the chance to attract customers who are migrating their PC behavior to tablets and therefore need to get online using their tablets. Connect the dots, and a market leadership position awaits smart operators that grab hold of this opportunity and make it a central part of their marketing and communications.

Positioning LTE for SuccessBy Declan Lonergan, Research VP, Yankee Group


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NO. 1 FOR CORD-CUTTERS

Establish LTE as the answer for customers looking to discontinue their land-line conn-ections and move to a mobile-only lifestyle. As we know, 3G-based mobile broadband may have been positioned as a viable alternative to land-line services, however, its performance is hardly on a par withfixedbroadband.LTEchangesalltherules, allowing operators to provide cust-omers the promises of an untethered life-style and position themselves as the go-to company for cord-cutters in the process. The timing is perfect as consumers are already begin-ning to substitute mobile for fixedbroad-band,evenin3Gscenarios.A2011 survey commissioned by U.K. commu-nications industry regulator Ofcom, for example, revealed that 44 percent of U.K. households with a mobile broadband service had discontinued their land-line broadbandconnection.Significantly,thehighest instance of mobile-only broadband was among households at the lower end of the socio-economic scale. This sends a clear message to operators that LTE pricing must be suitable to the needs of these price-conscious customers. Prepaid plans and price-transparency are important, and — if operators get the pricing and packages right — then they can count on attracting cust-omers eager to cut their cords and control their costs.

NO. 1 FOR FAMILIES

Focus on presenting the family unit — or similargroups—withasubscriptionoffertheycanshare.Theconceptofofferingmulti-user or multi-device price plans has gainedsignificanttractionandattentionduringthefirsthalfof2012.Thistrendispronounced in markets such as the U.S., where the state of LTE services is relatively advanced. This is not yet the case in Europe, where operators plan their LTE launches for later in 2012 or 2013. Clearly, it makes good business sense for European opera-tors to follow the U.S. example and make multi-deviceplansacorepartoftheiroffers.The result is a proposition that covers the bases to deliver households improved price-certainty, thus enabling operators to differentiatetheirLTEoffersfromexisting3G services. Granted mobile services have traditionally been purchased and consumed by individuals, but this is changing. The con-venience and cost advantages of sharing data allowances across multiple devices will no doubt encourage more Europeans to explore family plans. Operators should get ahead of this potential demand, and promote their family-friendly LTE services from day one.


NO. 1 FOR PREPAID

Adaptyouroffertotheshiftinprepaid—fast. While the lion’s share (62 percent) of all mobile lines in Europe are prepaid, these services are under pressure. In fact, the erosion of the prepaid base is particularly noticeable in markets like the U.K., where prepaid services accounted for only 50 percent of all mobile lines at the end of 2011, down from 65 percent in 2007. Naturally, mobile operators prefer to deliver postpaid services, catering to a customer segment that guarantees steady ARPU and lower churn rates since customers are locked into a contract. But mobile operators can’t take the easy way out. When it comes to LTE, our advice to operators is simple: ignore prepaid at your peril. Prepaid has an important role to play in LTE, especially as consumers move from having just one mobile phone to adding connected devices such as laptops, tablets and games consoles. For cost- conscious customers who need more than Wi-Fi connectivity for this array of devices prepaidLTEfitsthebillnicely.Totakefulladvantage of this opportunity operators should partner with device manufacturers toofferproductswithembeddedLTEandthe option to connect via prepaid. A good example is Lenovo, which recently intro-duced a 3G version of its ThinkPad laptops. Suchoffersareprecursorstowhatwecanexpect with LTE. Smart operators will recog-nise the opportunity here to establish them-selves as the No. 1 choice for prepaid LTE.

NO. 1 FOR ROAMING

Cash in on the confusion around data roaming. Consumers’ continued uncert-ainty about data roaming charges, as well as recent initiatives by European regulatory authorities to reduce roaming fees are shining a spotlight once again on the data roaming issue. The public discussion presents operators with an opportunity to aggressively pursue a market leadership position. But to get there from here opera-torsmustfirstequipthemselvestodeliverfair and transparent data roaming pricing. They must also ensure customers have access to all the service features they enjoy on their home networks, including Quality of Service and class-of-service parameters. What’s more, the rapid migr-ation to all-IP trafficindomesticmobilenetworkswillmake IP eXchange (IPX) a natural choice for LTE operators as they work to ensure their customers’ experiences remain consistent — even when customers travel beyond their home networks.

LESSONS LEARNED FROM 3G

Whether operators pursue one (or more) of the approaches we have presented— or come up with their own strategy — the end-game is all about successfully position-ing LTE for the future without repeating the mistakes that marked the past.

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The technology won’t sell itself. An LTE badge won’t mean a lot to consumers. They didn’t care much about 3G until they could understand how it improved their connected experiences. Operators should therefore sell thebenefitsofLTE(or4G),nottheacronym.

Expect the unexpected. While most expected the promise of video telephony tomove3Gdevicesofftheshelves,itwasreally the lure of better mobile access to Facebook, YouTube and other Web 2.0

content that drove the move to 3G. LTE is sure to produce a similar surprise motivator.

Prepaid is essential. 3G adoption was severely hindered in the early stages due to limited availability of prepaid (see Figure 1). When it comes to LTE, prepaid should not be an afterthought.

Handsets matter. Once operators improved the quality and choice in their 3G handset portfolios, they saw a dramatic

Figure 1: Source: Yankee Group, 2005.

Prepaid was essential to early 3G success

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feb 2004: U.K. prepaid 3G service launched

Aug 2004: 36% of U.K. 3G users were prepaid


increase in 3G adoption rates. It’s the same for LTE. From day one, operators must ensure a good supply of desirable LTE phones for the mass market.

Roaming must be addressed. Frequent instances of bill-shock, caused by customers’ unintended use of 3G-based data services while traveling abroad, created negative headlines and disgruntled custom-ers. Operators must do a better job with 4G

roaming by proactively helping customers to manage their consumption and spending.

CLARITY IS THE KEY TO SUCCESS

The approaches we outline here are really only a sample of the options available to operators seeking to position LTE in a way thatbothbenefitscustomersandtheircompany bottom line.

Figure 2: Source: Yankee Group.

Are you aware of, and do you have a basic understanding of 4G? (n=601)

38%

8%

10%

35%

9%I have never heard of the term 4G

I have heard of the term 4G but I don’t understand it

I have heard of the term 4G and I understand what it means

I am anxiously awaiting 4G products

I am already using 4G

Many US consumers still don’t understand what 4G is Yankee Group's US Mobile Broadband Survey, April 2012.

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Figure 3: Based on data from Yankee Group. Consumer Survey, 2012.

Tablet owners and non-owners have different profiles

Tablet owner

Demographics 78%

45Average age

Gender

Average age by gender

Minutes per day spent on mobile internet

Minutes per day spent in mobile apps

Mean personal income

Mean household income

Smartphone owners

22%

34

81%

$87 000

$70 000

50%

$66 000

$56 000

Tablet non-owner

43 46M f

36 32fM

22

24

19

22

Male 56% female 44%

Male 49% female 51%


No matter how operators choose to market theiroffers,successdependsontheirabilitytopositionLTE(andthebenefitsitdelivers)clearly and consistently in the minds of their customer base. This is a tall order since research shows many consumers simply don’t know what LTE (4G) is, let alone the services it supports. (see Figure 2).

Read between the lines, and boosting awareness (not use) is the chief challenge operators face. The pressure is on operators to take the lead in educating consumersaboutthereal-lifebenefits of LTE and show how LTE is superior to existing 3G services without losing the key message in a sea of confusing acronyms and technology-speak. Operators cannot affordtofailinthisbasic task.

Declan Lonergan is a vice president of Yankee Group’s research team and produces and manages research that improves service providers’ and technology vendors’ business results. Lonergan has 20 years of experience in the communications industry. He spent several years with BT, where he held management positions in radio systems procurement and access network planning.

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Against the backdrop of the eco-nomic slowdown and its debilitating effect on the global roaming market, the advent of Voice over IP (VoIP), which marks the end of an era for circuit-switched voice, represents the most significant industry shift to date.

Whilstthemajorityofvoicetraffictodayisstill generated by legacy circuit-switched networks, packetised voice will eventually become the norm, driven by the transition toLTE.ShiftingTDMtraffictopacketisednetworks opens up opportunities to extend communities and services between the wired and wireless worlds, but this is not without its challenges. Without automated end-to-end monitoring in place and a proper understanding of the teething problems still present in the nascent area of LTE roaming,

operators might underestimate the challenges they need to address.

In the early days of mobile roaming operators would strike bilateral agreements between their networks to cater to the needs of their roaming customers. But this approach had its limits. To meet customer demand and increaseefficiencyspecialistprovidersset up roaming hubs to ease the burden on the operators and improve scalability.

The trend now is to look at GRX as part of theIPX(IPeXchange)offering.Inthisscenario mobile operators use a specialist supplier that manages the hub to which the operator community connects. The hub solution is a remedy for roaming issues going forward, particularly as the barriers between roaming and interconnect blur with theintroductionofLTEandtheflexibilitythat it introduces.

Breaking Down Borders: Getting The Most from LTE RoamingBy James Middleton, Managing Editor, Telecoms.com

Operators are switching their traffic to the hub because it’s more efficient and provides them with greater control over the management and outsourcing of interconnects into the hub.



BREAKTHROUGH PROGRESS

Thefirsthubbingdeploymentsbrokesignifi-cant ground by paving the way for a more connected global mobile industry. The IPX extends this concept by enabling deeper connectivityforfixed,wirelessandinter-net-based service providers in a much more openandflexibleenvironment.

Today these hubs allow networks to extend their footprint and services to countries where they do not have bilateral deals in place, but it’s not just about reach. Operators areswitchingtheirtraffictothehubbecauseit’smoreefficientandprovidesthemwithgreater control over the management and outsourcing of interconnects into the hub.

In terms of interconnect, third-party supplied voice and messaging services will be avail-able from day one on LTE networks. These services could also potentially show improved QoS compared to 2G and 3G, whilst ben-efitingfromlowerregulateddatacharges.

On one hand, the traditional operator menu of services — which includes voice, SMS and data roaming — are necessary to avoid amassiveshiftoftraffictothirdparties,including OTT service providers. On the other hand, inter-working with OTT service providers introduces a wealth of commercial

opportunity for mobile operators. Rather than seeing these new entrants as a competitive threat, many mobile operators are beginning to understand that they can benefitfromcarefullystructuredandmanaged partnerships with OTT players.

Thekeyformobileoperatorsistooffer connectivity to these rival providers without giving away control of their network assets. Fortunately, operators can leverage their fixedandmobilenetworkassetsthroughIPX, so successful interaction with OTT playersisjustacaseoffindingtherightbusiness model.

As Michel Van Veen, Group Manager, Product Management, at SAP Mobile Services, observes: “If an LTE operator startstoofferLTEroamingtocustomers,the only way to establish a short time to market is to use a hubbing solution.” Thus, if operators were to only establish roaming agreements with a small number of trusted roaming partners, then they wouldn’t neces-sarily use a Diameter hub in the middle. But, he stresses, “in reality operators need to establish roaming agreements with hundreds of their peers and hubbing is the onlywaytoscaleupquicklyandefficiently.”

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OVERCOMING OBSTACLES

Some operators may think they can control their network end-to-end and beyond, thus satisfying the needs of their roaming cus-tomers.However,thisisamammotheffortthat can be fraught with challenges and commercial headaches. If the operators insist on running this in-house, then the requirement for a fully managed, specialist service to share the burden becomes all the morepronounced.Afterall,failingtooffer a high quality of service in global roaming services, results in a drop in roaming usage, and a loss of roaming revenue. Another outcome is unhappy customers, which results in churn and higher customer service costs.

ThefirstsuccessfuldeploymentsofLTEarein place and rollouts are growing at a rapid pace. Clearly, LTE is reaching a stage of maturity where technical challenges of deploying LTE are no longer a barrier. Now it’s up to the operator community to over-come the last hurdle and develop a com-mercial strategy that wrings value out of LTEtoenableroamingservicesthatbenefitcustomers and drive positive results for everyone in the ecosystem.

James Middleton has over 12 years’ experi-ence of writing and reporting on the tele-coms and tech sectors. Middleton has also helped to build and launch several success-ful websites with a keen focus on content management and community building.

Rather than seeing these new entrants as a competitive threat, many mobile operators are beginning to understand that they can benefit from carefully structured and managed partnerships with OTT players.


“You’re headed right for the middle of the monster.” These were the words of Linda Greenlaw, the boat captain in The Perfect Storm, a gripping film released in 2000. The true-life drama recounted the tragic fate of the fishing vessel Andrea Gail in 1991, when weather conditions combined to form a kill-er storm in the North Atlantic. The details of this unusually intense storm pattern were captured in computer-generated graphics, detailing the relentless power of a perfect storm and what happens when seemingly routine shifts in wind and temperature come together to produce a monster.

Today, we are seeing a similar alignment of key conditions in the video communications landscape, where the rapid pace of change and the interplay of supply and demand are combining to generate the mobile industry’s own Perfect Storm.

In the last few years we have seen a seismic shift in consumer acceptance and use of mobile video. Smartphones and tablets — popular devices equipped with video cameras — have reached the mass-market tipping point.

We have also seen a dramatic change in how consumers use Skype to do more than just make voice calls. In fact, Skype now reports that over half of all Skype calls now progress to video. Likewise, we have seen a slew of communications services, including Apple’s Facetime, Facebook’s video calling and Google’sHangouts,embraceandoffervideo.

At the same time we are witnessing the advance of mobile broadband networks designed to support video communications. Infact,videoiswidelypromotedastheflag-ship service that can be supported by LTE.

Connect the dots, and we have a series ofseparateandsignificanteventsthat are combining to have a massive impact on the industry.

Clearly, consumer use of video has entered a new phase of growth, driven by devices,

Video Communications: “A Perfect Storm”By Ramsey Masri, Vice President, Sales & Alliances, Aylus Networks

For long-term viability, video calling must generate its own revenue.

PART FOUR: LTE: UNLEASHING INNOVATION TO DELIVER RESULTS

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2011 The screen surface area of all consumer devices reaches 1 sq. foot per capita. The number of networked devices equals the size of the entire global population

2015

Figure 1: Based on data from Cisco, 2011.

www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/VNI_Hyperconnectivity_WP.html

annual global IP traffic will surpass the zettabyte threshold

2010 Internet video surpasses P2P as the largest consumer internet video traffic category

2012 Internet video reaches 50% consumer internet traffic. The number of households generating >1 TB per month hits the million mark

2014 1/5 of consumer internet video now originates from non-PC devices

2015 The annual run rate of total IP traffic reaches the zettabyte threshold. Internet traffic from wireless devices exceeds internet traffic from wired devices. The number of network devices is double the size of the entire global population

2000 Consumer internet surpasses business internet

Exab

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per

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services and networks built from the ground up to make this experience easy and enjoy-able. The result is a wave of excitement around video that could overwhelm service providers gearing up to deliver video com-munications right now. In my view, these service providers are headed right into a monster of a storm.

PREPARE FOR IMPACT

To complicate matters video communication is not the same as voice communication. Make a voice call and you can expect to “connect” with anyone you wish because the operators themselves are also connected. The glue that holds it together, and makes it possible to contact people we want, is the humble telephone number. These digits, coupled with all the dialing codes that we (mostly) love and cherish, provide the basis for a unique and universal address system that allows us to ring anyone.

IPX networks connect data networks in the same way, but there is a catch. Video com-munications (carried over IP) is predomi-nantly peer-to-peer, which means users are only able to reach people on the same video service using the same calling software.

Theupshot:Userssitondifferentvideoservice “Islands” where they are limited

in how they communicate and with whom. These Islands have been created by a variety of companies that include Over-the-Top (OTT) video networks (example: Skype, Apple’s Facetime); Social Networks (example: Google+, Facebook) and network operators (example: Verizon Wireless and Japan’s DoCoMo).

In practice, Skype users can video call their Skype friends; Facebook users can conduct video calls with their Facebook friends on Facebook; and Google+ users can employ ‘Hangout’ on a video chat with friends in their Google+ circles. As a result, users exist in Islands, and they cannot reach out and connect with their wider communities.

Thedifferentservicesdon’ttalktogether — full stop. This is because each video com-municationsserviceusesdifferentaddress-ingcapabilities,differentclientsoftware andmakesuseofdifferentvideoformatsthat exist in the industry.

MIND THE GAP

Clearly, the emergence of these video serviceIslandseffectivelylimitsusers,barring them from connecting with all their contacts regardless of the video call service they choose to use. However, this issue has neither hampered the growth in OTT video

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communications, nor has it harmed the brandappealoftheplayersthatofferthem.

To the contrary, Google, Apple, Facebook and Skype all now manage powerful brands, offeringafreeservicemodellargelyat the expense of the operators who have invested in the networks to make video communications possible.

Forthemoment,thestormrages on.Howlong will it last, and what will be the impact? Tough questions, but one thing is for sure:

the OTT model has serious shortcomings. For one, there is a huge question mark over the scalability and sustainability of amodelthateffectivelyisolatesusers on service Islands.

Indeed, a video calling service that only per mits users to communicate with their friends who use the same service may be deemed acceptable among the Digerati and the Facebook masses, but it is an alien concept to everyone else out in the wider ocean.

Figure 2: Based on data from Cisco.


average mobile user, traffic per month


Accustomed to the simplicity and seamlessness of voice communications users expect — and demand — universal connectivity that allows them to connect with anyone they please.

Naturally, users will require the same free- domandflexibilitywhentheymakeavideocall. However, for this to happen, there will need to be companies that have the capabil-ities to bridge the service Islands. Put another way, the door is wide open for service providers to step up to the helm and use their networks to connect the Islands, even better if they can address all the incompatibilities that currently exist betweendifferentvideocallservices.

Providing universal connectivity is necessary if video is to reach its full market potential. This capability comes at a cost —butthereisalsoasignificantbenefit to the providers equipped for the job.

COME TOGETHER

Service providers are presented with both a problem and a golden opportunity.

The problem is how to wring more value out of today’s IPX networks. The solution can be found in an approach where these networks are used as smart inter-operator video hubs. In this scenario the hubs connect incompat-ible video services and apply transcoding and transrating policies to ensure video call service quality and consistency.

The opportunity lies in the ways providers can make money by charging for inter- operator video connectivity on their IPX networks. And no worry that the space will crowd too quickly when word of this massive opportunity spreads. Video is inherently more complex than voice, a factor that createsasignificantbarriertoentryforanyservice providers who simply want to jump on the bandwagon.

In the last few years we have seen a seismic shift in consumer acceptance and use of mobile video. Smartphones and tablets — popular devices equipped with video cameras — have reached the mass-market tipping point.

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Properly implemented, universal video con-nectivity should ‘just work.’ And, because they combine universal addressing with smart video hubs, they should operate in the background making sure users don’t experi-ence or realise the incompatibilities between services and devices. What’s more, video should also be a simple upgrade option to an existing voice call. Finally, this connectivity and convenience should come at a price. In fact, there is no reason why it shouldn’t command premium interconnection fees.

Connectivity is baked into IPX networks. Therefore, connecting video service Islands should be seen as a logical and natural next step and an extension of the IPX network core business model.

The remaining question, therefore, centers on the economics.

Videocallingoccupiesasignificantamountof bandwidth, which is quite costly. For long-term viability, video calling must generate its own revenue. Only in this way will the broadest range of operators be able to participate and provide a truly universal service. This is a challenge since video calling is already a free service within service Islands suchasSkype.It’sdifficulttoseehowtherecan be any going back on this one.

Will users pay for the interexchange that bridges the service Islands, allowing them to make video calls to anyone they choose? The evidence that consumers will buy in to this proposition is overwhelmingly positive.

Today users already accept the concept of a call plan bundle that permits them to call family and friends at a reduced rate and charges separately for calls they make to numbers that are not part of their call plan. This suggests users will see the value of being able to connect with their friends and family, and thus agree to pay for interexchangevideotraffic.

Clearly, video calling is a service that will pay its way. But developing the pricing and pack-ages will hardly be this simple. Driven by the widespread adoption of LTE, 2-way video calling is just one of a whole spectrum of video communications services that will soon reach the mainstream. Already value -added video services such as video voice-mail, multi-way video calling, 1-way live video sharing and HD video are gaining traction.

In time we can expect to see many more bundlesandoffershitthemarketplace,choicethatweenjoy(orsuffer!)today, with value-added premium services charged separately.


As the storm clouds gather we can ask what lies beyond the horizon.

Expectoperatorstomakesignificantinvest-ments to launch video communications that provide universal connectivity, with the aim of charging for interconnect to other service providers. Equally, you can expect interexchange operators to invest in video interconnect hubs to join up and monetise the video world.

It’s a huge task that lies ahead, and one the industry must face. As Billy Tyne, captain of the Andrea Gail in The Perfect Storm, put it: “There is no rest for the weary.” But the determination of the industry is necessary toembrace—andbenefitfrom—thisopportunity. To borrow from the words of crewman Bobby Shatford: “I’m out here because I need the money.”

Ramsey Masri has over 17 years experience in the mobile applications and infrastructure space. After starting his career at Oracle, Ramsey went on to become what has been definedasaturnaroundspecialist,helpingthreecompaniestransitiontoprofitabilityand success. In his role with Aylus Networks, he created the go-to-market strategy that led to the successful partnership with SAP/Sybase.

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Once again the mobile industry is entering a new phase of technological change. With the proliferation of data services and smartphones, the mobile operator community is working to address the increasing need for bandwidth with the rollout of next generation 4G networks, known as LTE networks. This development will pave the way to full IP convergence, enabling mobile operators to accelerate the time-to-market for new services that drive customer satisfaction and generate new revenues.

As operators launch LTE services in their home markets, consumers will naturally expect the same quality experience every-where — especially when they are abroad.

In view of this requirement mobile operators that deploy LTE networks in their domestic markets are starting to review options avail-able to ensure LTE services allow seamless roamingoverseas.ThefirstusersofLTEwilltypically be VIP customers or key corporate accounts, a segment made up of high-end users and frequent travelers. To serve these premium customers operators will need to address LTE Roaming requirements sooner, rather than later.

PREPARE FOR ROAMING

LTE will enable new services such as video streaming, HD voice and Voice over LTE applications. However, these services will also put high demands on the data roaming backbone and require much more bandwidth and resilient network connectivity. As mobile operators review their LTE Roaming connec-tivity options, they will need to consider the following business and technical factors in preparation to enable LTE Roaming:

Enabling Roaming Across LTE NetworksBy Matthew Tonkin, Global Head, IPX Business, SAP Mobile Services

As operators launch LTE networks over the coming years, new roaming connectivity will be required with each new operator. Effectively, the work performed over the last 10 years will need to be repeated.



1 Diameter Signaling The build out of high-speed LTE networks isdifferentfromthetechnologiesthatpreceded it. LTE requires a completely new signaling protocol. Put another way, SS7 MAP— which has been the rule for 2G / 3G mobile networks — is no longer needed. A new signaling protocol has been introduced, called Diameter.

2 New Roaming Connectivity In a roaming environment, the existence of this new protocol will require mobile operators to establish new roaming con-nections. As operators launch LTE net-works over the coming years, new roaming connectivity will be required with eachnewoperator.Effectively,theworkperformed over the last 10 years will need to be repeated.

3 Diameter Relay Agent To enable this connectivity, operators will require a Diameter Relay Agent (DRA). In the initial build out of LTE networks, the majority of mobile operators have not deployed a DRA into their networks. Oper-ators are facing challenges of the immedi-ate business requirements to enable LTE Roaming versus the need to obtain CAPEX budget approvals to acquire the required DRA equipment.

4 An IPX Provider It is widely accepted that LTE Roaming with Diameter signaling will be connected across IPX networks. As LTE Roaming proliferates, there will be a need for IPX providers to enable peering both at the data level and at the signaling level. Consideration will also be needed to ensure Quality of Service (QoS) SLAs re implemented.

IMPORTANT CHOICES

In the new LTE world, mobile operators will have a choice: they can work with LTE Roaming hubs, or they can directly connect with mobile operators.

The hubbing concept is not new to the industry. There is a wide variety of these — including iSMS hubs, iMMS hubs, roaming hubsandclearinghubs—andallfulfillasimilar role. Depending on the operator requirements, hubbing allows them to reach operators with one-to-many connectivity, reduceeffortsandtestingtime,acceleratetime-to-market for services and facilitate transaction settlements between operators.

In the LTE Roaming environment, mobile operators can connect to an LTE Roaming

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hub, a hub that will also facilitate connectiv-ity to the wider operator community made up of operators that also connected to the same hub.

To facilitate active deployment for mobile operators, the LTE Roaming hub will also need to provide an outsourced DRA capabil-ity running on the hub itself. Operators have the option to utilise this outsourced DRA capability immediately to connect to roaming partners.

This may sound easy, but, as the industry has experienced through operator trials, interworking with suppliers’ DRA equipment canbechallenging.WhilstspecificationsaredefinedfortheDiameterprotocol,uniquesupplier variations are evident and require mapping to enable seamless interworking.

In the initial stages of LTE Roaming deployments, it is likely operators will use their connection to an LTE Roaming hub to facilitate LTE Roaming. The business benefitsdeliveredbythisapproach are as follows:

5 Immediate time-to-market. This equips operators to deliver an imme-diate service to their high-value customers.

6 Cost effectiveness. Whilst LTE roaming capability will be key, network rollouts will take time and the number of roaming users to start will be low. Mobile operators can monetise their initial rollouts through an LTE Roaming Hub.

7 Technical readiness. Many operators are missing a key techno-logical component, the Diameter Relay Agent. An LTE Roaming hub — which offersanoutsourcedDRAcapability— will enable operators to move forward with an LTE roaming solution.

As the market matures, LTE revenues proliferate, and the necessary network equipment is deployed, mobile operators will also have the option to connect directly with each other. As in today’s hub environ-ments, it’s likely that mobile operators will connect directly to key operator partners and roaming destinations. Other operators will pursue a dual strategy for LTE Roaming.

Mobile operators can monetise their initial rollouts through an LTE Roaming Hub.


Connecting directly to key roaming partners, and also work with LTE Roaming hubs to access the community. No doubt there will also be some operator groups that operate their own hub, with a lead operator sponsoring the hubbing capability and enabling connectivity across the group.

Incorporating the roaming hub principles, an LTE Roaming hub running over the IPX network will enable and ensure the rapid rollout of LTE Roaming for the operator community. The IPX network will also deliver the bandwidth and network resiliency demanded by consumers.

Matthew Tonkin oversees SAP Mobile Services’s global GRX/IPX/LTE Roaming business. In addition Tonkin is responsible for managing and driving the company’s growth and market leadership in both Enter-prise Services and Mobile Operator Services businesses across the AsiaPac region, through a combination of direct sales and a partner & alliances sales network.

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Despite numerous announce-ments by Latin American mobile operators to deploy LTE as early as 2012, it’s clear the shift will not happen overnight. However, as with 3G, the move to LTE will have a significant impact on each market in the region.

In view of this development the GSMA Latin America BARG Working Group has been working to encourage discussion of the migration to LTE, as well as the opportunities and implications for operators. A chief focus of this exchange has been the technical and commercial impact on international roaming services.

SPECTRUM BENEFITS

The deployment of LTE across Latin Americabringswithitahostofbenefits.

Clearly, LTE will equip mobile operators to increase revenues by delivering new services and improving their current offering.Butit’snotonlyaboutprovidingcustomers with high-speed and high quality data and voice services. LTE will also address the spectrum limitations facing many Latin American operators. To this end it will allow greater spectral efficiency,andthusboosttheamount of spectrum available.

In fact, this is one of the conclusions of GSMA Latin America BARG Working Group. Our discussions determined that LTE will haveanimmediateandsignificantimpact at the Access level, and not so much at the Core level. We expect this to be the case for the next few years.

HURDLES TO OVERCOME

Predictably, the barriers to LTE deployment in Latin America will be similar to those that

LTE Roaming In Latin America: Conditions for SuccessBy Alejandro Martinez, Chairman, Billing and Roaming Working Group (BARG), GSMA LA

The advance of LTE will create the need for new billing models that allow customers more control of their services consumption.



marked the introduction of 3G and previous technological evolutions.

Thedifficultytoreacheconomiesofscale in the region is combined with problems around disparities in the current assignment

of frequencies and overall shortage of spectrum. These factors will cause higher terminal and dongle prices. Since the current level of subsidies is already high, this development will mean higher CAPEX costs for mobile operators across the region.

Number of mobile broadband connections and expected usage

Figure 1: Based on data from GSMA. The GSMA Latin American Mobile Observatory 2011.

A.T. Kearney 12/13557

www.gsma.com/publicpolicy/wp-content/uploads/2012/03/latam12presentationatkearneythestatusofthemobileindustryin-

latammobileobservatory.pdf

Mobile Broadband Connections (millions)1

Mobile data traffic in LatAm and per capita, (petabytes per month)

2010 saw 35 LTE commitments, 7 trials and 4 commerical launches. The number of LTE connections is expected to reach 15 million by 2015

850MB per capita in 2015

22MB per capita in 2010

2010

12 26 60127

257

488

2011 2012f

+3,967%

2013f 2014f 2015f2015f

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72

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2011 2012f

+566%

2013f 2014f

FOOTNOTE

1. Numbers have been updated after the publication of the Latin America Mobile Observatory. Q4 each year based on technology: # of subscribers to CDMA 2000 fxEV-DO (Rev. A and Rev. B also), WCDMA HSPA and LTE. Source: The GSMA Latin American Mobile Observatory 2011.

Although still embryonic, MBB is expected to become a significantdriverforthemobileindustryinLatinAmerica.

http://www.gsma.com/publicpolicy/wp-content/uploads/2012/03/latam12presentationatkearneythestatusofthemobileindustryinlatammobileobservatory.pdf

http://www.gsma.com/publicpolicy/wp-content/uploads/2012/03/latam12presentationatkearneythestatusofthemobileindustryinlatammobileobservatory.pdf

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On the other hand, investment in the net- workelementswillbesignificantgiventhegeographical extension of the majority of the territories in the region.

In view of these costs and obstacles, there is a trend among Latin American operators to share networks and the infrastructure required for LTE. However, experience with network sharing in other regions shows thisoptionisnotfreefrommajordifficultiesand limitations.

GRADUAL SHIFT

Foroperatorstocapitaliseonthebenefits of LTE, a spectrum band of at least 20 MHz must be available. While it is possible to deliver services using a smaller allocation of spectrum, the experience delivered at this suboptimal speed will not be much faster than what we know from 3G.

In Latin America spectrum caps are very low in comparison to other regions. To further complicate matters, several of the spectrum auctions that were announced have not yet taken place due to repeated

delays. A prime example is Argentina, there the cap per operator is only 50MHz, and even that frequency is not fully allocated. What’s more, the auction for AWS spectrum has no certain schedule at this time.

To date the spectrum currently available is fully utilised by GSM/3G. If no new spectrum is made available in suitable bands,thenitwillbedifficultforoperatorsto evolve — and migrate their customer base — from 3G to LTE. Put another way, the shift from 3G to LTE will be gradual, and there will need to be a coexistence of these technologies for a while to come.

ROAMING AND REWARDS

No doubt there will be some cases where operators will launch LTE networks focused entirelyonofferinghigh-speeddataservices. But it is likely that operators will eventuallydecidetoextendtheirofferandprovide voice services for two reasons. First, voice is essential to complete a solid commercialoffering.Second,theaccessresources that voice services require in comparison to data are reduced.

If no new spectrum is made available in suitable bands, then it will be difficult for operators to evolve — and migrate their customer base — from 3G to LTE.


To date the provision of voice services under LTE is held back by the lack of standards and the strong convenience of fall back capacity to legacy networks.

In terms of Roaming Service, LTE will inherit thedifficultiesofthedisparityoffrequen-cies. Terminals should be multiband, further increasingitscost,inordertoworkindiffer-ent countries. Fallback capacity to legacy networks will be necessary in order to provide a good footprint from the beginning.

At wholesale billing level, it will be necessary to migrate to TAP 3.12 version and make adjustments throughout the supply chain andserviceassurance.Thetrafficgener- ated by roamers from LTE home networks will be a source of revenues for Latin American operators.

In time an extra advantage of LTE — similar to 3G —will be the possibility of roaming between networks that were previously notinteroperable.Thisbenefitopensupbusiness opportunities in both directions.

The advance of LTE will create the need for new billing models that allow customers more control of their services consumption. Operators will therefore need to adjust their offeringtomatchcustomerneedsformoretransparency. What’s more, operators will needtobesurethesemodelsandoffersalso support a sustainable business.

In recognition of this requirement the BARG of GSMA Latin America has fostered debate between operators and vendors to promote progress toward these new billing models at a regional level. As a result, several opera-tors have launched commercial services that include billing caps for periods of time.

Clearly,LTEwilldrivebenefitsforoperatorsand their customers. But the path to LTE will be gradual. Indeed, the pace of mass- market deployment will be subject to a variety of factors, including the allocation of additional spectrum and the availability of handsets and dongles at a reasonable price customers are willing to pay. LTE paves the way for new and better value-added services provided operators succeed in findingbusinessmodelsandapproachesthatallowreasonableprofitability.

Alejandro Martinez is the Corporate & B2B Marketing Manager at Telecom Personal Argentina. He has more than 12 years experience in the retail, product, technical, and wholesale mobile business, and is the current Chairman of the BARG Group of GSM LA.

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About 10 years ago, operators offering IP-based VPN services to companies introduced Classes of Service (or CoS) to enable more efficient use of bandwidth. The principle is simple: assign a high CoS to a quality-sensitive app-lication, like video calling, to make sure IP packets associated with that application get a higher priority on the backbone than packets associated with less critical applications, such as email and web browsing. This helps guarantee the performance of more demanding services in situations where a connection to an IP-VPN has limited capacity, and bandwidth upgrades are costly.

Thecostoffixedbandwidthmayhavedeclined in the last decade. But this is not the case for mobile networks. Radio networks are generally costly to build out and maintain. In view of this many Mobile Service Providers have become increasingly creative in improving the return on their investment. One way they have achieved this is by pursuing strategies around sharing radio network infrastructure with Mobile Virtual Network Operators.

However, the advance of LTE puts the topic of how to balance high costs associated with radio network capacity back on the agenda. In many countries LTE will use higher frequencies than 3G, thus requiring the deployment of even more antennas in metropolitan areas, and further adding to the cost and the challenge.

It therefore comes as no surprise that CoS has been built in to the 3GPP standards for

LTE: NEW TECHNOLOGY BOOSTS NEW BUSINESSBy Michel Van Veen, Group Manager, Product Management, SAP Mobile Services

The roll-out of LTE networks and the growing penetration of smartphones and tablets are finally making the mobile Internet a reality. As a result, mobile video calling is getting a second chance.



LTE, thus providing operators a way to deal with bandwidth limitations in a smart way. But how smart is this really? CoS is normally viewed as just a technical tool to guarantee the quality of a service, particularly in situations where bandwidth is limited. But the creative Mobile Service Provider will see a revenue-generating opportunity here as well. Let’s look at some examples of how these companies can wring more value out of CoS.

PREMIUM qUALITY FOR PREMIUM CUSTOMERS

OneoftheservicessuretotakeoffonLTEnetworks is mobile video calling. IP-based video calling has been available on the Internet for many years now, provided by Over-the-Top (OTT) providers like Skype and Google. Video conferencing on traditional telephone networks has been around for even longer.

Huge increases in mobile data capacity demand threaten to outstrip mobile network capacity supply

Time

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Mass market adoption of mobile voice

Data becomes primary demand driver

Capacity supply

Capacity demand

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Figure 1: Based on data from HSBC .

www.hsbcnet.com/gbm/about-us/global-research.html

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Early attempts by Mobile Service Providers to launch mobile video calling on 3G networks have failed. This was not just because 3G handsets have the camera on the opposite side of the display. The deciding factor was the call quality, which was quite disappointing. To complicate matters video calling was often only possible between compatible handsets. But now all that has changed. The roll-out of LTE networks and the growing penetra-tionofsmartphonesandtabletsarefinallymaking the mobile Internet a reality. As a result, mobile video calling is getting a second chance.

This development puts the OTT providers in an ideal position to strengthen their hold on customers and to grow their business. The risk that Mobile Service Providers might be

marginalised and relegated to the role of basic ISPs is obviously there. And this is all the more painful if we consider the costs of licenses and the investments Mobile Service Providers have made to build their business. This is the risk, but the reality looks quite different.Customersareaccustomedto the high bandwidth — and high quality of service—deliveredviafixed-lineInternetaccess. The limitations on radio bandwidth — even on LTE networks — means customers cannot always get the quality they expect. This is where Mobile Service Providers have a great opportunity. After all, they control the LTE network.

By cleverly applying CoS, Mobile Service Providers can control the quality of service that is delivered to individual customers, even by application. What’s more, Mobile

Figure 2: Based on data from Gsacom. www.gsacom.com/gsm_3g/info_papers.php4

HD Voice trials or network deployments(copyright GSA- May 21, 2012)

TMN, Portugal Trialling HD Voice in 3G networkDu, UAE Trialled HD Voice in 3G networkAT7T, USA VoLTE planned in LTE networkSasktel, Canada VoLTE planned in LTE networkSprint, USA Deploying VoLTE in LTE network

Verizon Wireless, USA Deploying VoLTE in LTE networkLG U Plus, South Korea Deploying VoLTE in LTE networkKT, South Korea Deploying VoLTE in LTE networkStarHub, Singapore VoLTE trial planned by end of 2012


Service Providers can now launch their own OTT-like communication services with guar-anteed performance down to the mobile device. This is something OTT providers cannot do. And it may be easier for Mobile ServiceProviderstooffertheseservicesthan one might expect, particularly now that standards for the Rich Communication Suite (RCS) have matured and many vendorsareofferingcompliantsolutions.

Thisbenefitscustomers,whonowhaveachoicebetweenthe“best-effort”typeOTTservices and premium-charged quality servicesofferedbytheirMobileServiceProvider. And, as the successful launch and take up of HD Voice on 3G networks in some marketsclearlyshows,thereisasignificantsegment of customers willing to pay for premium services.

SLOT MACHINE

Granted, many consumers will not be pre-pared to sign up for premium services. But there will also be moments when these con-sumers will wish they had.

A video call from your friends showing the litter of newborn puppies is certainly no fun when the image freezes all the time. And what about that movie trailer you have been waiting so impatiently to see? Wouldn’t it be a much better experience

togetthatcontentstreamedflawlessly to your brand new HD tablet ?

In other words, wouldn’t it be great if you could get access to premium bandwidth ataone-offcharge,andjustwhenyou need it? Absolutely.

This idea — sometimes referred to as the slot machine model (“throw in a quarter and get 15 minutes worth of bandwidth”) — can become a reality with LTE. In this same scenario managing CoS is only one part of the challenge. CRM systems and billing systems will also need to be fully integrated with the core network. So, even though the slot machine proposition has as much potential as prepaid cards, the general expectation is that we will need to be patient.

COLLABORATIVE MODELS

The more adventurous Mobile Service Providers will not stop there. They will certainly look for collaborative business models to drive even more revenue out of their costly LTE investments.

Collaboration with OTT providers makes sense. However, it should at least result in seamless interoperability between the services provided by both parties – including a translation between mobile

Collaboration with OTT providers makes sense. However, it should at least result in seamless interoperability between the services provided by both parties.

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phone numbers on one side, and user IDs, such as Skype handles, on the other. But it is also conceivable that Mobile Service ProviderscouldofferaccesstotheirLTEnetworks under some wholesale arrange-ment – either by choice or because they are forced to do so by regulating bodies. Collaboration with content providers, not a new phenomenon in itself, could be taken to the next level once LTE technology makes it possible to tailor services down to the individual customer.

Before Mobile Service Providers can tap into any of these new revenue streams, they will need to get very familiar with this new LTE technology. Controlling a high-performing radio network is key, but being able to manage the core network and have it fully integrated with IMS platforms, as well as CRM and billing systems, is crucial.

And let’s not forget the other challenge that makesthemobileInternetsodifferentfromthefixedInternet:roaming.Thefirstquest-ion that immediately comes to mind is: how can the operator guarantee — and deliver — a roaming customer the same quality of service they enjoy in the home network? Tough question, indeed! But I will leave that discussion for some other time.

Michel Van Veen is responsible for managing and driving the GPRS Roaming Exchange (GRX)/ IP eXchange (IPX) product line for SAP Mobile Services. He began his career at KPN Telecom where he worked on major projects including international standard- isation of ISDN and Fiber-to-the-Home systems, and establishment of an opera-tionalmanagementcenterforthefirstGSMnetwork in The Netherlands. Van Veen is also the current Deputy Chairman of the GRXIPX Working Group, which is a sub- working group under GSMA’s IREG (Inter-Working Roaming, Expert Group).

PART fIVE OTT: OPEN THREAT OR HIDDEN OPPORTUNITY

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The rise of Over-the-Top providers (OTTs) of mobile VoIP (mVoIP) and IP-based messaging is significantly altering the dynamics of the mobile services market.

The growing penetration of smartphones and mobile broadband, combined with the availability of open application programming interfaces (APIs) for handsets, has created an environment where third-party applica-tion and service providers can more easily develop and distribute mobile applications, including mobile voice-over-IP (mVoIP) and IP-based messaging applications. In this environment, mobile operators risk being relegated to becoming providers of network access only.

Significantly,it’sthethird-partyapplicationsand services from OTTs that enable sub-scribers to make voice calls and send and

receive messages for “free” that are also posing a very real threat to mobile opera-tors’ voice and messaging revenues.

THE “KPN EFFECT”

InMay2011KPNbecamethefirstmobileoperator to report that subscriber use of OTT voice and messaging applications – in particular, WhatsApp – had caused a decline invoiceandmessagingtrafficandrevenues.Initially, what became known in the wider industryas“theKPNeffect”wasconfined to KPN’s “Hi” brand. The operator found that 85 percent of its Hi subscribers were using WhatsApp, usage that resulted in a year-on -year decline of 24 percent in outgoing SMS trafficby3Q2011.Theeffectquicklyspreadto the operator’s mainstream brand, KPN, causing outgoing SMS per customer to decline 5 percent year-on-year by 3Q 2011.

OTT Threat: Top Strategies To fight Smart By Pamela Clark-Dickson, Senior Analyst, Mobile Content & Applications Intelligence Center, Informa Telecoms & Media

Significantly, it’s the third-party applications and services from OTTs that enable subscribers to make voice calls and send and receive messages for “free” that are also posing a very real threat to mobile operators’ voice and messaging revenues.

PART FIVE: OTT: OPEN THREAT OR HIDDEN OPPORTUNITY


Despite KPN’s attempts to stem its declin-ingSMStrafficandrevenuesthroughtheintroductionofintegratedtariffs—whichincluded a mixture of voice minutes, SMS and mobile data — the year-on-year decline inSMStrafficamongKPN’soverallcons-umer mobile customer base accelerated from 19.6 percent in 3Q 2011 to 32.7 percent by2Q2012(seefigure.1).

OTT IMPACT SPREADS

Vodafone Group has also experienced a declineinitsSMStrafficandrevenues,partly because its subscribers preferred to use OTT alternatives. The operator’s 1Q 2013financialresultspaintsafairlygrimpicture, showing a decline in messaging revenues across most of its operating divisions(seefigures.2,3).

KPN Mobile, Netherlands, SMS per subscriber, 1q2010-2q2012

SMS

per s

ubsc

riber

30

60

55

50

45

40

35

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

Figure. 1: Source: KPN

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The impact of OTT services was not limited to Europe. China Mobile stated in its 1H 2012financialreportthatcompetitionintheChinese mobile services market was intensi-fying. The operator stressed that revenues from traditional voice and messaging services were under pressure from mobile operator rivals and “new technologies and services that are replacing traditional com-munications services.”

As a result of this competition, China Mobile’s SMS and MMS revenues declined 2.6percentyear-on-year(seefigure.4).Despite this drop, China Mobile is still the largestintheworldintermsofSMStraffic.According to Informa Telecoms & Media’s World Cellular Data Metrics, China Mobile’s 624 million subscribers sent a total of 736 billion text messages in 2011.

Vodafone Group, messaging revenues by division, 1q2012 and 1q2013

Africa, Middle East & Asia

Europe

Group

Reve

nues

(£ b

illio

ns)

1Q12 1Q130

7

6

5

4

3

2

1

Notes: £:1=US$1.62 *Ends June 30,2012

Figure. 2: Source: Vodafone.


FORMIDABLE COMPETITION

Key OTT providers range from nimble new-comers to established handset manufactur-ers. Their ranks include: start-up companies such as WhatsApp, KakaoTalk, Viber Media and Line; handset vendors such as RIM (BlackBerry Messenger) and Apple (iMessage); and South Africa’s MXit, a

combination mobile instant messenger andsocialnetwork.(seefigure.5).

In August 2012 WhatsApp announced thatitsdailytraffichitarecord10billionmessages.Thisrepresentsafive-foldincrease in the six months since March 2012, when WhatsApp’s average daily trafficwas2billionmessages.

UK

Germany

Italy

Vodafone (South Africa)

India

1Q12 1Q13

Notes: £:1=US$1.62 *Ends June 30,2012

Vodafone Group, messaging revenues by country, 1q2012 and 1q2013

Reve

nues

(£ b

illio

ns)

0

350

300

250

200

150

100

50 Spain

Figure 3: Source: Vodafone.

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Other OTT providers gained similar traction. Apple announced in June 2012 that users of iMessage had sent 150 billion messages since the service’s launch in October 2011. Meanwhile, South Korea’s KakaoTalk managedtosignificantlyreduceSKTele-com’sSMStraffic.ToavertasimilardeclineinvoicetrafficfromKakaoTalk’srecentlaunch of its mVoIP capability in South Korea, the South Korean mobile operator SK Telecom teamed up with rival operators KTF and LGT to lobby the Korean Communi-cations Commission for permission to block their subscribers’ use of KakaoTalk’s mVoIP capability on their networks.

FIVE KEY STRATEGIES

How can mobile operators turn the tide and compete with OTT providers on their turf? Fortunately, mobile operators do have a number of competitive capabilities they can use to provide subscribers an OTT-like service, one that could potentially be far richer than the services provided by the OTTs.

It seems mobile operators need little conv-incing of the merits of this approach. In fact, Informahasidentifiedserviceemulationasoneofthefivekeystrategiesmobileopera-tors are pursuing in answer to the threat posed by OTTs.

Figure. 4: Source: China Mobile

China Mobile, wireless data services revenues 1H2011 and 1H2012

Notes: CNY1=US$0.15

1H11 1H120

30

25

20

15

10

5

Wireless data traffic

Applications & information servicesSMS & MMS

Reve

nues

(CN

Y tr

illio

ns)


Key over the top mobile VoIP and IP-based messaging providers

OTT providers

Services No. users Messaging traffic Voice traffic

Apple iMessage 140 million (June 2012)

150 billion messages since launch in October 2011; 1 billion messages a day (June 2012)

n/a

Kakao Talk Kakao Talk 45.2 million registered: 36 million local, 9.2 million international (June 2012)

1.2 billion messages a day (February 2012)

n/a

Line Line 40 million registered: 22 million local, 9.2 million international, 18 million local (June 2012)

Not disclosed Not disclosed

Mxit Mxit 12.5 million (February 2012)

750 million messages a day (February 2012)

n/a

RIM BlackBerry 55 million (May 2012)

100 million messages a month(May 2011)

n/a

Viber Media

Viber 100 million registered users (September 2012)

6 billion messages a month

2 billion minutes a month

WhatsApp WhatsApp Not disclosed 10 billion messages a day (peak traffic, August 2012)

n/a

Figure. 5: Source: Informa Telecoms & Media

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Specifically,Informaregardsserviceemula-tion and partnership with an OTT as the two strategies that are most sustainable for mobile operators.

The remaining three strategies operators can adopt include: 1) doing nothing, or embracingOTTsasthedriverofdatatrafficon operator networks, 2) blocking access to OTT services on their networks; and 3) trying to neutralise the impact of OTT services by restructuring of their price plans to be more competitive.

OPERATOR ASSETS

Operators also have competitive capabilities and assets that give them the edge over OTT players. Put simply, the operators alone own and control their existing network assets. Operators also own and control their subscriber base because of the long- standing billing relationship they have with their customers.

Operators can also play a central role enabling new ecosystems and new innovation. This is possible because network infrastructure vendors are exposing application program-ming interfaces (APIs) associated with their equipment. The aim here is to open these platforms, thus enabling operators and third parties to quickly develop and launch services on the mobile operator networks.

The result is new and innovative services that could conceivably connect into multiple network assets, including voice, voice-mail and messaging infrastructure. This would also position mobile operators to provide a network- or application-based converged communications service, as well as a range of value-added services around communi-cations. These services may either be proprietarytotheoperatorthatoffersthem,or they may be based on Rich Communica-tions Suite (RCS) or RCS Enhanced (RCSe) standards issued by the GSMA.

Mobile operators own and control the billing relationship, assets that position it to charge subscribers for the use of OTT-like services, either through a monthly subscription or on a per-event basis.


OWNERSHIP MATTERS

Because the mobile operator owns and controls the network, it alone can ensure service reliability and quality for subscrib-ers. OTTs, on the other hand, can exercise relatively little control over reliability and quality of service. Put another way, their sphereofinfluenceislimitedtotheinfra-structure and apps they use to deliver and support their services.

What’s more, mobile operators own and control the billing relationship, assets that position it to charge subscribers for the use of OTT-like services, either through a monthly subscription or on a per-event basis. Alternatively, the operator could also include free access to these OTT-like services as part of an existing, or new price plan, that may also include voice minutes, SMS and/or data. Adopting the latter approach may well help the mobile operator to minimise the rate at which its subscribers churn to the networks of other operators, or to OTT services.

As the examples outlined here show, subs-cribers’ use of OTT services has proven tohaveanegativeimpactthetrafficandrevenues many mobile operators generate from their traditional communications services. However, it is possible that OTTs

could act as a catalyst for operators to compete by creating far richer OTT-like services that bind subscribers to their networks.

As always, execution will be key. Mobile operatorsdohavesignificantadvantagesover the OTTs, but it’s up to the operators to ensure that they can transform these advantages into revenue-generating services.

Pamela Clark-Dickson is a senior analyst at Informa Telecoms & Media with over 16 yearsexperienceinthefield.Shefocuses on mobile messaging and produces analysis of the global messaging market for the Mobile Content and Applications Intelligence Centre. Her areas of expertise cover all aspects of mobile messaging in the consumer, enterprise and marketing industry sectors globally, including SMS, MMS, mobile e-mail, mobile instant messaging and rich communications. She also co-edits Mobile Media and Messaging, a continuous research service published by Informa.

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No one doubts the Internet has become an integral part of our lives. Likewise, no one doubts the Internet ecosystem will be different in the next 3-7 years.

The evolution of the Internet is marked by a series of developments that have decoupled thenetworksfromtheservicestheyoffer.This has opened the door to third parties and over-the-top players (OTT), allowing them to provide services over the top of the operator network. This, in turn, has led to a greaterlevelofserviceflexibilityandinnova-tion. Thus, a departure from the vertical integration of services that operators provide has paved the way for new services.

BUT THAT ISN’T THE ONLY OUTCOME.

The advance of OTT players means it’s time for operators to reinvent themselves. But it’s not about pursuing strategies to become the new Google or Facebook. Any initiative to copy these companies will simply fail. Thisisaboutdevelopingnewanddifferentservices that complement and compete withtheservicestheseOTTplayersoffertousers, while building strength in the services operatorshavetraditionallyoffered.

In other words, it’s about focusing on what operators do best. Operators have always been successful in creating services to meet specificcustomerneedsandtheyshouldcontinue to focus on this core capability. A customer-firstfocushasallowedoperatorsto prosper, and this approach will also be key to their future growth.

Operatorsarealsoinnovativeinofferingservices where vertical integration is a must, a strategy that plays in their favour.

Significantly,OTTplayerscannotreachthislevel of vertical integration by themselves. They need operators — and these operators mustoffermuchmorethanjustconnectiv-ity by leveraging their network assets. Why? Because OTT players need much more. For operatorsthismeansofferingservicesthatdemand expertise and experience in areas including Customer Relationship Manage-ment (CRM), billing and customer service and support.

Fortunately, these capabilities are built into the competitive DNA of operators. Another advantage operators have is a trusted relationship with their customers. This is a relationship that operators have built up over years. These trust assets are key andoperatorscanbenefitfromtheir unique position.

Evaluating Strategies To face OTT ProvidersBy Eusebio Felguera, Corporate Regulatory Manager, Telefónica



A WORLD OF OPPORTUNITY

What are the vertical services that should be high on operators’ agendas? Opportunities will come from services (mobile,fixedandWiFi)andverticalsincludingfinance,government,health,security, advertising, digital content distribution and M2M (machine-to-machine) communications. There are also opportunities for operators around the Cloud and the delivery of cloud-based services. And no doubt there are many more services — and growth opportunities — still to come.

Interestingly, these services also build on the close relationship operators already enjoy with their customers.

More importantly, these services are not just plug ‘n play. This is key since it’s the close relationship the operator has with the customer that also allows them access to the customer’s home or business to install the equipment that makes these services possibleinthefirstplace.

A prime example is healthcare, which requires the installation of expensive and complex monitoring tools, tools that also need to be connected and maintained. Healthcare is an increasingly important servicesofferinWesterncountries, where there is an ageing population.

Another area of opportunity is banking. A huge number of people in developing markets worldwide — and particularly in Latin America — do not have bank accounts. But they do have a pre-paid mobile phone. This is a vertical where operators clearly have a role to play in the delivery of mobile banking and mobile money services. In developed marketsoperatorscanalsobenefit from the advance of NFC, which lays the groundwork for mobile payment services.

And let’s not forget the huge market opportunity in providing M2M communication and services, enabling machines to talk to each other and the people managing them. The overall M2M market encompasses an extraordinarily broad range of applications, including automotive telematics, smart metering and smart cities. In these smart cities sensors, networks and intelligent systems help authorities manage water, gas, electricity, waste, transportation, fuel use and provide urban dwellers an improved quality of life.

Finally, there is video. This is an area of opportunity many consider to be the next “killer app” and a space where operators are well positioned to capture value. Since many industry reports forecast rapid growth in mobile video content and communications, there is no doubt the space will become

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crowdedandcompetitionwillbefierce. But operators should play in that space.

RETHINK AND REACT

The growth opportunities are there, but operatorsmustfirstchangetheirmindset.We cannot react as traditional telecom operators; we must evolve to be more flexibleandcuttime-to-market.Inotherwords, operators need to be more digital.

This is precisely our approach at Telefónica. We started out in 2009 by creating a new structure within Telefónica focused on the development of new IP services. The outcome is Telefónica Digital, a specially created unit established in 2011 to develop new applications and business models for IP technology. This new unit recently had its first‘investorsday’inLondon,aneventthatgave the new unit the opportunity to share recentdevelopmentsinthisfield.TelefónicaDigital now has more than 2,500 employees working on new and innovative ‘Over the Telco’ services, and is always thinking out- side of the box.

What have we learned? It’s important that operators learn from OTT players. But this isn’t about merely borrowing from their approaches. Operators must wield their

capabilitiestooffervalueinkeyareas,suchasbilling, connectivity and services innovation.

This is precisely our model at Telefónica Digital, where we have launched TUENTI — a social communications platform — to compete with other social networks. We achieve this by leveraging in our key asset: mobile network access. And we add value byofferingusersconfidentiality,somethingno other social network can provide.

We have also launched To Me, a free mobile application that combines free text chat, voice calls and picture and location sharing between users. To Me is part of the larger Tu family of services, which will come to include other services such as Tu Go. Due out later this year, Tu Go allows customers to use their voice minutes and SMS pack-ages on any device or platform, not just their phone.

COLLABORATING FOR COMPETITIVE EDGE

I’ve outlined the B2C opportunities oper-ators can — and should — take advantage of today. But we should also be aware of the opportunities around B2B2C.


Once again, delivering these new services will require more vertical integration than OTT players can provide. Indeed, we can conclude that there is an enormous opport-unity for operators that have expertise and trust assets to provide new services to this customer segment — one that OTT players cannot serve on their own. This is also where collaboration between operators and OTT players is essential and will open the door to a wide range of opportunities and innovation.

OperatorsshouldofferOTTplayersattrac-tive ways to leverage all their assets — not just network connectivity. This approach will lay the groundwork for win-win relationships that will drive a new stage of growth and innovation in Internet services.

To this end operators have to create a new family of horizontal services that will exist right below the OTT layer of services. These services include: Managed Connectivity, Data Collection & Analysis, Operator Billing and Device Installation & Management.

Cooperation between OTT players and operators will allow both providers to create services customers will be willing to pay for. This collaboration will also pave the way for mobile commerce, mobile advertising and other services that provide sustainability for all the players in the value chain.

Clearly, operators must work with OTT playerstoachievemutualbenefitandmarket advantage. But it’s not just about partnerships that pair one operator with one OTT player. Telefónica believes that — in order to be attractive for an OTT player— an operator must have extensive coverage.

Since no single operator can provide this connectivity alone, it makes sense for the operator to work with other operators. Through agreements and partnerships operators can provide a full footprint to deliver services on a global scale. Partner-ship also makes it possible for operators tofillthegapsinlocalservices,whereaccessismainlyviafixednetworksandmobile connectivity is a must.

Toofferalltheseservicesoperatorsmusthave a reliable platform that allows them to provide these capabilities to OTT players in a seamless way. Fortunately, that platform exists today: it is IPX.

Telefónica is leading this (r)evolution by har-nessing this platform and by creating strong partnerships with OTT players. This provides OTT players a single point of entry, allowing themtobenefitfromvastcoverageonareliable network. This also deliversenormous opportunityandbenefitstobothparties.

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In summary, should operators compete with OTT players? Yes, they should — by doing it better. Should they collaborate? Yes. I have shown how OTT players and operators can work together to win big. Should operators try to be like OTT players? Again, the answer is a resounding “yes, they should.”

Despite the advances of OTT players, opera-tors can do and achieve a lot to maintain their competitive advantage. In all cases, the key to success is to take action, rather than not doing anything.

Eusebio Felguera manages the regulatory and public policy strategy of Telefónica. He has over 23 years experience in the mobile industry, where he is an expert in the areas of Interconnect and Roaming. Felguera also represents Telefónica in the GSMA with regard to interconnection issues and serves as the IMQ subgroup chair.


The iPhone launched a revolution that is changing the face of mobile telecommunications. As a result, millions of applications are now delivered “over the top” of mobile network operators (MNOs) to app-happy consumers. Some MNOs, however, are not quite so pleased. This is because most over-the- top (OTT) communications applications use IP to reach their customers, effectively bypassing the networks owned and managed by MNOs., and disrupting MNO business models. But there is one kind of OTT app that supp-orts MNO business models. This particular kindofapp—oftencalledaNetworkUnaffil- iatedVirtualOperator(NUVO)–benefitsMNOs by interconnecting with them and the broader telecom ecosystem via telephone

numbers. The result is a win-win for NUVOsandMNOsthatbothsatisfiesconsumer demand and drives innovation.

IM: CLOSED AND FRAGMENTED

BeforewediscusshowNUVOsbenefitMNOs, it is important to understand the current landscape and the challenges posed by OTT apps such as Facebook Messenger, WhatsApp, Viber, and TuMe. These OTT apps operate like desktop Instant Messaging (IM) clients, requiring both senders and recipients of messages or voice calls to use the app. As a result, these OTT apps bypass other networks, like the Public Switched Telephone Network (PSTN), and do not require users to use existing address mechanisms like telephone numbers. Put another way, these OTT apps use the Internet to route around the traditional mobile telecom networks to service their customers.

Nuvos: An Alternative To Disruptive OTTBy Austin Murray, Founder and President, textPlus Inc.

The result is a win-win for NUVOs and MNOs that both satisfies consumer demand and drives innovation.


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Industry research shows the rise of OTT messaging and calling apps is already hav- ingatremendouseffectonMNOs.IndustryAnalysts estimate that MNO messaging revenue declined by $13.9 billion in 2011. What’s more, consumers are increasingly choosing OTT messaging apps over SMS because they provide enhanced features at an improved price point. But the advance of OTT apps is not just displacing MNO text messaging revenues. The rise of alternative OTT voice solutions such as Skype and Viber is also negatively impacting core MNO voice usage and revenues.

Clearly, these increasingly popular applica-tions are poised to threaten the long-term viability of current MNO business models. How can MNOs compete?

Fortunately, there is a solution that provides users a better alternative to the disruptive OTT apps, while at the same time driving MNOvoice,messaginganddatatraffic and revenues. Moreover, this solution enables connected, non-telephonic devices to be addressable by MNO services via telephone numbers. NUVOs bring these MNObenefitsandmoretothesmartphoneapp ecosystem.

NUVOS INCREASE REACH, REVENUES

NUVOs like textPlus and Google Voice allow users to communicate with anyone — not just other people who use the app — by interconnecting with the PSTN and its 8 billion telephone numbers.

By assigning telephone numbers to users, NUVOs may transmit messages (via SMS) and voice calls (via SIP/RTP) to anyone with a telephone number. This is important because it allows an app user to communi-cate with anyone simply by dialing a phone number – just as they normally do with any garden-variety telephone – rather than limiting their communications to other app users, as most OTT apps do.

ThisconveniencebenefitscustomersandMNOsalike.ItisestimatedthatfivebillionSMS messages a month in the U.S. alone are sent by people using textPlus and other NUVOs. In addition to providing services on MNO handsets, NUVOs also turn connected, non-telephonic devices – including iPod touch, iPad and tablets – into functional mobile phones that can send real SMS and make phone calls. Connect the dots, and thismeansasignificantincreaseinthemarket of devices addressable to core MNO services.


LESSONS LEARNED

The 1990s saw the rapid consumer uptake of PC-based Instant Messaging services. ICQwasthefirsttogaintraction,butAOL’sAIM, Microsoft’s Windows Messenger, Yahoo’s Y! Messenger, and Google’s Gchat closed the gap quickly, becoming the leading players in the fast-moving IM space.

Unfortunately, there was no underlying standard at the time — like SMTP (email) or E.164 (telephone numbers) — to unite these closed networks. For a long time they were islands unto themselves, unable to communicate with each other directly.

This fragmented and closed approach did not help when the world made the leap to smartphones. Instead, desktop IM quickly lost mobile market share to new, native mobile OTT apps like WhatsApp and Viber, apps that are likewise closed networks.

WhatsApp, Viber, Facebook Messenger — each requires users to be on the same app in order to communicate. It’s up to users to make sure all their friends and family members have also downloaded the app — and understand how to use it — before they can send a message or make a call, not exactly the best user experience.

Despite their shortcomings, these OTT apps — and the closed networks they support — countasignificantnumberofusers.Thereare two market conditions that have allowed these apps to grow their reach.

First, the app distribution model is friction-lessandefficient,allowinguserstodown-load these apps quickly and easily to their smartphones. Second, consumers have come to demand more choice than MNOs and their OEM partners currently provide. Users want it all: group messaging, walkie- talkie, rich picture messaging and sharing,

figure 1: Based on data from textPlus.

text+text+

Unlike most OTT, NUVOs also reach phone numbers

Like other OTT services, NUVOs connect app users

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video calling, social networking, and more, all in one convenient place. And they want these features at a lower price point than their MNOs provide.

The good news: Consumers have a healthy appetite for OTT apps. The better news: not all OTT apps bypass MNOs and disrupt their business models. NUVOs like textPlus cover the bases to meet consumer demand for better features, thus pushing the boundaries of what is possible in communications, while

maintaining MNOs’ traditional central role in the communications ecosystem.

One of the immutable laws of telecommuni-cations is “just interconnect.” This is where the PSTN with its 8 billion E.164-standard telephone numbers enables everyone to connect with everyone else. It’s ubiquitous — and it’s easy. Everyone knows how to use a telephone number, and no one needs to be invited or read the FAQs to use it. It just works.

Granted, these new, closed IM/OTT networks may continue to gain traction, but their reach and communities will likely remainsignificantlysmallerthanthePSTN.Thisdifferencetranslatesintolessutility for IM/OTT users and more opport-unity for NUVOs and the ecosystem they enable together with MNOs.

NUVOs like textPlus enable all the fantastic features one expects from a smartphone app — and more. In addition to connecting its users to MNOs and the broader telecom ecosystem via real telephone numbers, NUVOsprovidethefollowingbenefits:

• Enabling communication with the PSTN and its 8 billion telephone numbers - the largest social network in the world

• Turning connected, non-telephonic devices – like iPod touch, iPad and tablets – into functional phones by giving them a real telephone number

• Driving traditional SMS and voice trafficvolumes,aswellasdata

• Leveraging the common, well-understood user behavior of dialing telephone numbers to make ubiquitous communications possible via smartphone applications

• Providing a better alternative to all-IP OTT apps, thus keeping MNO voice/SMS/data services central to the mobile Internet


Austin Murray is Founder and President of textPlus, Inc., a leading mobile communi-cation destination. Prior to textPlus, Murray co-founded wireless entertainment pub-lisher JAMDAT Mobile, and held positions at a variety of digital content companies.

The good news: Consumers have a healthy appetite for OTT apps. The better news: not all OTT apps bypass MNOs and disrupt their business models.

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The mobile app market is more than a new distribution channel for applications and software. It ushers in a new business para-digm. As a result, companies and individual developers can market and monetise their mobile apps supported by an ecosystem where mobile operators no longer have complete control.

As of June 2012 the app stores combined offered500,000+mobileapplications.Many of these apps rely on a freemium business model to generate revenues and reach customers. In practice this model allows various monetisation approaches.

For example, advertisers or other third parties can sponsor the app, thus subsidis-ing the cost of providing the services and functions delivered by the app. This model

issimilartotheonethatdefinedthe‘dotcom’era.Butthereisadifferencebecause investors have learned from the dotcom bust that a business built on ‘eyeballs’ alone — without a path toward a soundbusinessmodel—isfatallyflawed.

Freemium models also centre on charging one-time fees for downloading the app, or collecting ongoing monthly/annual fees. Finally, freemium models also support a pay-as-you-go approach.

Are these the only monetisation models? It’s hard to say. The avalanche of apps — from games and entertainment, to social networking and business productivity — would indicate that the app market is just beginning. There is much to come and there is no telling what monetisation models will emerge to enable this new economy.

OTT Ecosystem: Paving The Way for OpportunityBy Gene Lew, CTO, MediaFriends, Inc.

After all, billing is not the business of OTT players. They are focused on innovation and delivering apps their users will appreciate.



THE RISE OF THE OTT

A popular app category is communications. These apps provide services — such as voice, SMS, MMS and video, but they do this without using the mobile networks owned and managed by mobile operators. Instead, they perform all the functions within an all-IP realm, and only ‘gateway’ into the SS7 world when necessary. These apps allow communications over the top of operator networks — which why they are known as OTT.

A prime example of an early OTT app is Skype. It started on the PC and migrated to smartphone platforms. Based entirely on IP, thisappoffersvoice,videoanddataservices.

These are the same services — voice, SMS/MMS and data — supported by feature phones and delivered by mobile operators.

Another example is Apple’s iMessage. This OTT app provides the native SMS/MMS functionality as well as other capabilities and services (only available via IP). But there’s a catch, Apple’s iMessage only works with other Apple devices. If the user is sending a message to a non-Apple device, or an Apple device that does not have IP connectivity, the app falls back on SS7, the default transport of the operator’s SMS.

Because Apple’s iMessage is IP-based, it also allows additional functionality, such as SMS, that is not supported by SS7 services.

Figure1: Based on data from MediaFriends.

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Apple’s iMessage also provides presence andreal-timenotifications,featuresthatSMS doesn’t support.

MORE FUNCTIONALITY

OTT apps are IP-based, which means they are not limited by SS7. In fact, just the opposite is true. This opens the door to a variety of ways to enhance communications and deliver a good user experience.

TheOTTappHeyWire,offeredby MediaFriends, — is a good example. It provides real SMS text messaging. But it also allows Twitter and Facebook messag-ing, as well as a plethora of other services that only an IP-based platform can deliver such as cloud-based storage and multi- device honing. Finally, the app is network

agnostic and uses IP — a default for every network and one that works anywhere in the world and is not limited or constrained by geography, operator or technology.

The MediaFriends, product BNDWGN™ is a prime example an OTT service that is not a replication of a legacy operator or SS7 based function (voice, SMS, etc.). Instead, BNDWGN™ is a completely “new” app that isspecificallydesignedformobileuse.

The OTT app BNDWGN™ enables users to combine and share social media in private groups, and message one another about common social media interests. This is done using graphics, video, text (not SMS), Twitter, Facebook, Pinterest, and many other popular social media content sources.

Figure 2: Based on data from MediaFriends.

Carrier Carrier

Apple iOS Apple iOS

Applications Applications

SS7 SS7

Apple iMessage

IP IP

IP IP

Mobile Device Mobile Device


COOPERATION BREEDS SUCCESS

The rise of OTT players and apps has createdconflictbetweenmultipleplayers in the ecosystem. Some operators believe, rightly or wrongly, that OTT players are getting a free ride over their infrastructure. At the other end of the spectrum, some OTT players feel they are unjustly restricted by rules and models dating back to an era when operators were in control.

Theconflictisn’tnew.Operatorsand OTT players have competed head-on since Skype launched in the 1990s. As more OTT playersenteredthemarket,theconflictgrew. Today WhatsApp, a private messaging product, dominates in several markets around the world. Other ‘not so good’ OTT

players have been banned by government regulators, or blocked by operators.

But there’s no reason to generalise and declare that OTT apps, as a category, pose a threat to operators. In many ways these players — the operator and the OTT provider — need one another.

Cooperation between operators and OTT players can yield a richer, more diverse and robust ecosystem. This positive outcome is similar to the Internet, which has evolved by meshing proprietary, isolated environ-ments into an open and collaborative market. The outcome is an open Internet and one that has indisputably generated morebenefitsandopportunitythanallofitsproprietary predecessors.


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MORE IS BETTER

On one hand, the operators provide the underlying infrastructure of mobile technol-ogy, facilitating the complex management of the network and the services it delivers. In other words, it is the operator that ensures the core foundation of the OTT app. This is significantsinceoperatorsensurethattheIP transport and the associated technology surrounding it are robust, reliable and fast.

On the other hand, the OTT players have theflexibilityandinnovationtodeliver the functions and apps that address the ever-evolving needs of customers on an international scale.

Cooperation and partnerships between operators and OTT players is essential and mutuallybeneficial.Inthepast,operators’reach was often limited by geography. Today operators can forge partnerships to give them international customer reach instantly, and without huge investments of capital and resources.

Taking billing, for example. A partnership with operators would allow OTT players access to operator billing capabilities. And it doesn’t stop there. Operators can also buildabusinessofferingOTTplayersaccessto technology unique to mobile operators, such as geo-location, as well as the databases operators manage to resolve paymentsandallowfinancialreconciliation.



This is critical since the monetisation models for apps are still evolving. Clearly, freemium and paid models dictate how companies currently monetise their apps, but this could change.

For this reason, it would be mutually beneficialforbothpartiesifOTTplayers had the billing capabilities —provided by the operator — to invoice users on a recurring basis. After all, billing is not the business of OTT players. They are focused on innovation and deliv ering apps their users will appreciate. Even the app stores offeredbyApple,GoogleandMicrosoftarelimited in their ability to do recurring billing on regular cycles. Moreover, custom service billingisadifficult,ifnotimpossible,task.

It’s a given that the ecosystem will eventu-ally become an all IP-based environment. It’s just a matter of time.

The inevitable arrival of an all-IP world also reinforces the needs for deeper part-nerships between operators and OTT players. After all, OTT apps play an import-ant role in helping to shape and drive the

demand for services that require an all-IP ecosystem. It is therefore critical that operators and OTT players work together to determine what an all-IP ecosystem will look like and deliver. In this new environ-ment the winners will be the players that work together to innovate and adapt to the lesson of the Internet: open is better.

Gene Lew has more than 25 years of technology management and engineering experience in the Internet, mobile, telecom, cable, and multimedia industries. He has worked with some of the world’s largest operators and involved in the development of key IP communications technologies, including broadband, FTTH and messaging services. Before joining MediaFriends, Lew served as VP of IP Advanced Technology for NeuStar; CTO for PAIX/Switch and Data; VP Advanced Technology for RoadRunner of TimeWarnerCable; VP Advanced Technol-ogy for Verizon and began his career with MCI focusing on IP technology before “IP was cool”.

But there’s no reason to generalise and declare that OTT apps, as a category, pose a threat to operators. In many ways these players — the operator and the OTT provider — need one another.

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PART SIX UNLEASHING THE POWER Of MOBILE COMMERCE


Qatar Telecom (Qtel) has built its Mobile Money service from the ground up to satisfy the needs of two different customer segments. On one level, average Qatari residents rely on the Mobile Money service to pay their monthly mobile phone bills — and will soon be able to make merchant payments and purchases using their Qtel mWallet. At the other end of the spectrum, migrant workers without bank accounts use the Qtel Mobile Money service to send money back home, add airtime to their pre-paid account and send airtime as a gift to family and friends.

To date Qtel counts around 2.38 million customers,asignificantproportionofwhomare migrant workers who traditionally work in the construction sector. They come from countries across the South Asian continent,

including Nepal, India, Bangladesh, and Sri Lanka. These workers generally earn between $150 and $500 a month, and they demand a service that allows them to remit most of their monthly salary to their families in their home countries.

Of course, the Qtel Mobile Money service caters to this demographic, making sure that the service works on all mobile phone makes and models, including low-end feature phones. But we have also taken this approach one giant step further, making it possible for the Mobile Money customers to use Qtel’s own network of Self-Service Machines, or SSMs.

Like ATMs, the SSMs allow customers 24/7 access to deposit their money (in cash) and conduct transactions. Customer can also use these machines to top up their pre-paid cards and pay their phone bill. We have deployed more than 200 of these SSMs across the country.

These locations — together with a network of more than 20 retail shops — strengthen

Mobile Money for The MassesBy Richard Morecroft, Assistant Director Mobile Money, Qtel

Moving forward, we are considering plans to expand the service to offer additional financial services such as insurance and micro-loans.

PART SIX: UNLEASHING THE POWER OF MOBILE COMMERCE

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Qtel’s market presence. They also lay the groundwork for an innovative strategy that willextendQtel’sinfluenceandofferfarbeyond what mobile money and banking services deliver today.

EASY DOES IT

Take remittance for example. We know it is possible to transfer money using mobile phones and text message services that automatically updates the mobile wallet, but is it really convenient for customers? At Qtel we think there must be an easier way.Specifically,weenvisionthatthiscanbe done as a wallet-to-wallet transaction.

Moreover, we believe the service must be extended into ATMs. This is why we have released cardless cash in and out, a service that harnesses the network of ATM’s by enabling customers to deposit and withdraw money by entering a secure code received by SMS without the need for an ATM card. In practice, this new service allows customers theflexibilitytoputtheirmoneyintotheirmobile wallet through Qtel’s self-service machines. Likewise, they can also withdraw their money in cash by using the ATMs managed by Qtel’s partner bank Qatar National Bank (QNB). In other words, customers can use their mobile for mobile banking, and they can access the vast

network of SSMs and ATMs when they want to make a cash withdrawal. It’s simple and it’s secure.

MUTUAL BENEFIT

The Mobile Money service is also frictionless because we have a forged a solid partner-ship with a leading bank, thus overcoming the tensions that traditionally exists between banks and mobile operators to focustheeffortsonachievingacommonobjective. It’s all about serving the customer and building the customer base.

Why does the relationship work? You need to look at the region, Qatar is a developing market,whichmeansthatasignificantper-centage of the population is under-banked. In Qatar arguably up to 75 percent of the countrydoesnothaveaccesstofinancialservices, but they do have mobile phones.

Put another way, the under-banked are more likely to have established relationships with mobile operators. What’s more, operators are in a prime position to encourage their customers to use mobile banking services.

Not so for the banks. They don’t have this long-standing relationship with the lower- income customer because these customers don’t have bank accounts. To complicate


matters,theefforttoreachouttothiscustomer segment would require banks to invest in a complex and expensive network ofbankoffices.It’swhattheywanttoavoid,so they partner with mobile operators to reach these customers.

It’sacompletelydifferentpictureindevel-oped markets such as Europe and North America. In these countries customers are not under-banked, nor are they underserved by the banks operating in these countries. This has a huge impact of how banks and mobile operators can work together.

FOOTNOTE

1. www.juniperresearch.com/reports.php?id=446

Figure 1. Source: Juniper Research. (1)

2012

$0

$1,400,000

2017f



Indian Subcontinentfar East & China

Central & Eastern EuropeWestern Europe

Latin AmericaNorth America

Total mobile payment market ($ millions) split by eight key regions, 2012-2017

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Instead of cooperating and collaborating to increase reach and grow their customer base, banks and mobile operators in devel-oped markets are competing head-on for the same customers. Little wonder industry observers warn mobile operators and all the other companies in the emerging mobile money ecosystem — banks, credit card companies and payments providers — are heading for a showdown.

Another point in our favor is regulation. The regulatoryenvironmentinQatarisdifferentfrom other regions, allowing us to partner with the QNB. The agreement, under the guidance of the Central Bank, allows us to take deposits and deposit these into a bank account.Ofcourse,financialregulationdoeslimit the amount of money that can be transferred and these limits need to be clearly explained and indicated to customers.

GAINING SERIOUS TRACTION

The Qtel Mobile Money service targets the under-banked, providing them a service that allows money to be paid into their mWallet. Moving forward, we are considering plans toexpandtheservicetoofferadditionalfinancialservicessuchasinsuranceandmicro-loans.

But it’s not limited to making banking simple and convenient for the under-banked. Our Mobile Money service also benefitsthecountry’swealthy,providingthem a secure and simple way to do their banking.Inmanycases,thisaffluentcustomersegmentemploysstaff—maids,gardeners, cooks — who don’t have bank accounts. With our Mobile Money service itispossibletopaystaffdirectlyandelectronically, rather than cash.

There are also plans to enable merchants to accept electronic payments from customers. They can then either withdraw the money from their mWallet, or move the money to a bank account at their convenience. In this sense, we’re actually replacing the electronic point-of-sale.

We’re also looking at delivering services aimed at allowing customers to pay their monthly utility and water bills. Beyond the obviousbenefitsaroundsecurityandconvenience, enabling these payments would also provide customers another reason to have an mWallet.

POWERFUL ASSETS

Mobile Money services have gained traction sincewetookthewrapsoffthefirstofferinNovember 2011. The next phase of growth


and opportunity is on the horizon, and it will be about convenience and enabling everyone to pay for goods and products electronically at retail.

How do we get there from here? The good news: mobile operators already have a deep relationship with their customers based on trust. Our own research shows that our customers are very comfortable with Qtel, a mobile operator, handling their money.

The even better news: technology is not an issue. In fact, it’s easy to imagine a scenario where I buy goods in a supermarket using my Mobile Money service.

In practice, this is how it would work. I would make my decision to pay for my groceries using Mobile Money, then I would be direct- ed to the terminal. There I would pay by simply inputting my number and the four-digit PIN that I was provided for authentica-tion when I signed up for the Mobile Money serviceinthefirstplace.Toclosetheloop,I

would receive a text message on my phoneconfirmingmypurchase.

ALL THAT IS POSSIBLE RIGHT NOW.

But it becomes tricky in a scenario where we want to enable this seamlessly on a larger scale. For example, what happens if I want to a shop at a supermarket where the partner bank for the Mobile Money service — in this case, QNB — isn’t the acquirer bank for the supermarket? It’s a tough question.

NFC CHALLENGE

Interestingly, this is where NFC may provide an answer. NFC provides the second level of authentication that banks require because it enables secure communication between the phone and the terminal.

The big question is: is NFC coming fast enough? In my view, it will likely be 3 to 5

Instead of cooperating and collaborating to increase reach and grow their customer base, banks and mobile operators in developed markets are competing head-on for the same customers.

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fiveyearsbeforeNFC becomes mainstream. Why? Because smartphone penetration has changed all the rules.

Put another way, smartphones — which are mini-computers — have a longer shelf life than low-end feature phones. These devices are also

more expensive than feature phones, which mean they require longer contracts. The result is a slowdown in the handset replace-ment cycle — and that presents the industry with a huge challenge. After all, NFC take up and use depends on consumers having NFC- enabled devices.

What can be done in the interim? It’s a tough one to call, but it’s also clear that we in the industry can’t be spectators.

In Qatar our partner bank QNB has begun rolling out contactless payment terminals. At Qtel we have also collaborated with QNB and MasterCard to deliver an NFC solution to market that caters to these bank custom-

ers. In summary, we have an NFC solution in the market right now, but it’s not targeted at our Mobile Money customers — yet.

Clearly, the industry is only on the cusp of realising the full potential of mobile money and mobile banking services. At Qtel we have made our mark with the Mobile Money services, services we can — and will — expand and enhance to serve the two distinct customer segments: migrant workersandaffluentresidents.Ourexper-ience has shown that technology is a factor, but it’s the ability to satisfy increasing customer demands for convenience and security that is at the core of lasting success.

Richard Morecroft has over 25 years experi-ence in telecommunications. He spent the first11yearsservingintheU.K.armedforces in locations all over the world. Since leaving he has led projects and businesses that have transformed the consumer tele-communications space including building AOL’s UK internet access platform and launchingtheU.K.’sfirst“Free”broadbandbusiness at TalkTalk. Morecroft joined Qtel in 2008 to lead the new and emerging business team.

Figure 2: Based on data from QTel.


The mobile money industry is growing fast. Today there are over 130 live mobile money deploy-ments, up from the approximately 20 at the beginning of 2009. There is also a significant increase in the number of registered users. The GSMA Global Mobile Money Adoption Survey counted over 60 million registered mobile money customers as of June 2011 and found a 49 percent growth rate in the number of subscribers from 2010 to 2011.

The top line growth has been impressive, but customer activation rates lag behind. Excluding the active mobile money custom-ers of Safaricom’s M-PESA and Smart, there

were just six million active mobile money customers as of June 2011. Activity rates across deployments also varied quite significantlywithsomemobilemoneydeployments having just 0.2 percent of their registered customers’ active, while others boasted an 80 percent active customer rate.

THE MOBILE MONEY CUSTOMER jOURNEY

Customer activation has shown to be a significanthurdleandanumberofmobilemoneyservicesfindthemselvesfacingthese common challenges:

• Customers are aware of the mobile money service, but do not understand howitcouldbebeneficialtothem

• Customers get bogged down in the regis-tration process and never try the product

Driving Mobile Money Usage In Unbanked RegionsBy M. Yasmina McCarty, Senior Manager, GSMA MMU (Mobile Money for the Unbanked)

The trick is to identify which marketing mechanisms are effective at each stage in the customer journey and which elements of the marketing toolbox are simply not effective


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www.gsma.com/mobilefordevelopment/wp-content/uploads/2012/05/MMU_State_of_industry_AW_Latest.pdf

49%CAGR

Increase in the number of mobile money customers in the second half of 2011

Between 31 December 2010 and 30 June 2011, the number of registered mobile money customers of the services in our sample-excluding Safaricom, SMART, and Globe-grew at an annualised rate of 49%

0

2

4

6

8

10

12

14

16

mill

ions

Number of registered customer accounts by service, june 2011


• Customers don’t understand the mechanics of performing transactions and are hesitant to try something as novel as mobile money

• Customers don’t trust the operator’s brand or network and are hesitant to conductfinancialtransactions

Understanding the mobile money customer journey can shed light on the issues which lead to customer inactivity. The customer journey, as shown below, is comprised of 6 stages: (1) unaware, (2) awareness, (3) understanding, (4) knowledge, (5) trial, and (6) regular use.

• Awareness & Understanding: At the start of the customer’s journey, custom-ers become aware of the existence of a mobile money service. But it’s not enough to simply know the name of the mobile money service or even what the mobile money service is. Rather, mobile money

services must also build understanding to help users see how this new service is bothrelevantandbeneficialtothem.

• Knowledge: Once the customer under-stands what mobile money is, what it does and how it could be useful to them, the customer needs to learn how to transact. This customer education typically requires the assistance of mobile money agents, or a friend and/ or family member.

• Trial & Regular Use: Once a customer is aware of the mobile money service, knows what it is, is convinced that it can be useful for them, and understands the pro-cesses for performing transactions, then they are ready for to try the service. After a number of positive transaction experi-ences, users can become regular users.

Whilst not listed as a separate step in the customer journey, the customer registration process is an important consideration.


Awareness Understanding Knowledge Trial

Customer has never heard of mobile money

Customer has heard of mobile money and knows what it is

Customer understands how mobile money could be useful to them

Customer knows the steps necessary to transact

Customer tries the service

Customer habitually uses the mobile money service

Unaware Regular Use

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Mobile money services that can be access- ed over-the-counter, allow customers to become regular users before they register, and therefore make the registration step a non-issue. However wallet based services typically insist on some type of registration. In situations where customers struggle to meet KYC requirements, the registration process becomes so onerous, that custom-ers would rather not enrol in the service.

EFFECTIVE APPROACHES FOR DRIVING USAGE

Financial services are more complex than mobile value-added services because they must meet a wide variety of customer needs and requirements. For this reason, market segmentation is essential to develop a com-prehensive marketing strategy.

Need-based segmentation can be a useful firststep,quantifyingthecustomerseg-ments which have frequent need to make high volumes of remote payments. It is important to have a reasonably large initial target market in mobile money for two reasons: 1) because of the strong econo-mies of scale present at both the platform and the agent level, and 2) because trans-fer-orientedmobilemoneyservicesbenefitfromstrongnetworkeffects.

Equally important as the size of a segment is the intensity of the demand. To put this more strongly, operators can focus on the segmentofcustomersthatissufferingfromthe most acute ‘pain points’ that mobile money might solve.

With the target market selected, mobile money marketing is the process of persuading potential customers to become regular users. Operators have a range of marketing tools that they can use to help customers along this journey. The trick here is to identify which marketing mechanisms areeffectiveateachstageinthecustomerjourney and which elements of the market-ingtoolboxaresimplynoteffective.

Awareness-building campaigns, typically done through mass media advertising campaigns, help customers learn what mobile money is and how mobile money might be useful to them. Beyond these ATL campaigns,however,asignificantamountofwork remains to be done to compel users to actually try the service. Customer education typically requires a more personal approach. As such, operators should leverage transac-tionalagents,fieldagents,and/orcurrentusers to guide potential customers from awareness to use.


To leverage mobile money agents for effectiveBTLcustomeractivation,there are three important considerations:

1 Training: Well-trained agents are proven tobeeffectiveindrivingcustomeractivation

2 Incentives: It is important that agents have been incentivised properly for both registration and usage, and for the balance between those incentives to be right

3 Oversight: Agents can be a powerful force for driving customer adoption. Unfortunately, if unsupervised, these agents can just as easily drive customers away.

Driving customer adoption and increasing activation rates in mobile money is no easy task. But understanding the customer journey, segmenting and prioritising the target market and identifying the best suited marketing tactics to move the user through each stage of that journey, can help mobile money services achieve high customer usage rates.

A mobile money deployment can have all the right conditions in place such as a ubiquitous and liquid agent network, reliable

technological platform, well designed products, and an enabling regulatory envi-ronment. But, if customers do not see the value in the service, or do not know how to use a product, then the success of the business can be severely hindered.

In her role as Senior Manager at GSMA’s Mobile Money for the Unbanked programme M. Yasmina McCarty works with Mobile Network Operators in emerging markets on their mobile money services. Prior to joining the GSMA, she co-founded and led GreenMango in India and held positions at Women’sWorldBanking,workinginmicrofi-nance in LAC, Africa and South Asia, and at Goodby Silverstein & Partners, working on marketing and advertising. To read the full version of this article, visit mmublog.org .

Market segmentation is essential to develop a comprehensive marketing strategy.

http://mmublog.org

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Without a doubt the single most successful mobile payment service for operators has been person -to-person (P2P) payments. Safaricom, a mobile operator in Kenya, led the way with their groundbreaking M-PESA service. Since then many other operators have launched mobile payments on the back of that success.

Butwinningisnotaboutbeingafirst-moveror a fast-follower. Market conditions are decisive here. For an operator-led P2P payments scheme to succeed within a countrytheremustbesomeveryspecificmarket conditions. Chief among these: a single operator must have the dominant market share. In other words, there is no room for market rivalry when the goal is to deliver a successful P2P payments service

like M-PESA. This explains why P2P is not the killer app for most operators.

Beyond that initial hurdle, operators face two other challenges. First, frequency, that is, how often consumers would use such a service.Afterall,buyingacoffeeissome-thing people do every day, buying a concert ticket, on the other hand, is a service most people might only use once a year.

Second, interoperability with other payment services. The cash in your pocket works for any proximity payment, and the credit card in your wallet works in many remote and proximity payment scenarios. For an operatorconsideringofferinganewpay- ment method, it clearly either needs to work inwiderangeofscenarios,orofferclearbenefitsoverexistingpaymentmethods.

How do people use these services? And how often do they really need them? Our

Blueprint for A Successful Remittance ServiceBy Diarmuid Mallon, Head of Global Mobile Marketing Programs,

Programs & Demand Generation, SAP

Our experience is that the more steps there are to sign-up, and the longer the wait from initial sign-up to the service being active, the lower the success rate for enrolling consumers.



Figure 1. Source: Juniper Research (1)

FOOTNOTE

1. www.juniperresearch.com/reports/mobile_money_transfer_and_remittances

Total value of international mobile money transactions sent p.a ($ billions) Split by eight key regions 2011-2016

$02011 2016

$60

Indian Subcontinentfar East & China



Western Europe

Latin America


North America

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own daily routines provide some clues. Ask yourself: How often do you need to give money to any other person, and in what cir-cumstances? Sure, you might loan someone some cash for lunch, but it is not something people do regularly. In reality, many P2P mobile payment services are not focused on this scenario. First and fore-most, they enable people to send money back home.

Now let’s consider the few occasions when I want to send money to a friend or colleague. Are they on the same mobile network? If not, then how do I send funds from one mobile wallet to another? Clearly, interoper-ability is critical to make these services work end-to-end. Currently, only a few operators are working on interoperable wallet solu-tions. Among these Telefónica, Qtel and the Axiata Group are notable examples of interoperable schemes.

P2P PLAYBOOK

The real opportunity for P2P payments is remittances. A remittance is a lot like a P2P money transfer, except the amount trans-ferred leaves the country.

ResearchfirmJuniperResearchestimatesthe total value of mobile remittance world-wide will be nearly $55 billion by 2016. This underlines the real potential of this market.

But don’t break out the champagne just yet. Like P2P payments there are a number of challenges to overcome before remittance services really deliver. These are: the initial Sign-up, the KYC (know your customer) pro-cesses, and details around how consumers get cash-in and cash-out of the service.

Before customers can use a remittance servicetheymustfirstbeenrolled.Ideally,the registration process should be fast and straightforward. After all, keeping it simple is the best way to ensure maximum take-up of the service. Our experience is that the more steps there are to sign-up, and the longer the wait from initial sign-up to the service being active, the lower the success rate for enrolling consumers.

Keeping enrolment quick and simple needs to be balanced with additional KYC requirements that are core to a remittance service. Many mobile remittance services accomplish this by making use of the existing operator retail store networks. The benefittotheoperatorsisthattheycanusetheirstaff,ITsystemsandmuchoftheirexisting business process when on-boarding new users of the service.

In Malaysia Celcom has gone one step further. It allows new customers to enroll for the remittance service direct from their mobilephone.ThefinalstageoftheKYC


process is completed when these custom-ers enter a Celcom store to deposit or withdraw funds.

SUCCESSFUL APPROACHES

If the concept of on-device sign-up for a remittance service seems daunting, then there are other blueprints you can follow. It’s worth looking at how banks handle this task. South Africa’s Standard Bank, for example, has not stopped at streamlining the sign-up service. It allows people to open up a full service bank account using only their mobile device.

Cash-in is another area to address. The value proposition behind remittance serv-ices is centered on convenience. In other words, it must be simple and easy for cus-tomers to use these services. In the real world migrant workers already line up at money transfer stores on payday to send money home. If all a remittance service does is swap the line they would stand in at the money transfer store for a line at the

local operator store, then there is no clear benefitfortheconsumer.Andthereisabso-lutely no reason to use a mobile phone to make the transfer.

This is why Qtel in Qatar has come up with an entirely new approach that joins our mobile and physical worlds. The mobile operator has launched a remittance service that is also supported by a network of self-service machines, or SSMs.

After the initial sign-up in the operator retail store, users of their remittance service can use these SSMs to add funds into their mobile wallets. Once the funds are loaded, the consumer can make the money transfer using their mobile phone at a time that suits them. Another plus: these SSMs, which are located in shopping malls, are convenient to access, so users can easily use one without taking a detour from their usual routine.

Finally, there are a variety of challenges that complicate cash-out, the last stage of the remittance transaction. While there is no one solution, there are several options to consider.

However, if you must enable customers to send funds that be withdrawn as cash, then you can’t go it alone.

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One option is to not send cash at all. Instead, create a service that allows people to transfer airtime, rather than cash, from their mobile wallet. This is what Celcom does to enable airtime remittance. This enables consumers to remotely transfer airtime credit instead of money as an inter-national remittance. Since the transfer involves airtime the rules governing the remittance are much simpler than they would be if the pay-out was cash. With fewer regulatory hurdles to negotiate, the service is also much quicker to implement.

BUILDING AN ECOSYSTEM

However, if you must enable customers to send funds that be withdrawn as cash, then you can’t go it alone.

You will need to form a partnership with a local entity on the receiving side of the remittance transaction. Some operators partner with existing money transfer net-works. In practice, this enables the receiver to collect the sent funds via agent networks of these services.

Other operators work with local banks. This has advantages because it allows the rec-eiver to use bank branches or even ATMs to withdraw funds. Against this backdrop, we are starting to see Wallet-to-Wallet transfers,

where both sending and receiving sides have mobile wallets.

Once you have a wallet funded remittance service in place, there are two ways to grow the service. First, add more remittance routes. What corridors should be included? This decision will be driven by demograph-ics,andtherequirementofspecificcustomer segments — such as migrant workers — to use your service to send money back home. It’s also a good idea to lookatyourinternationalP2PSMStrafficfor clues to help identify potential new remittance corridors.

Second, you can grow the service by adding more services to the Wallet. The lead services for this are prepay top-up and bill pay. In Qatar Qtel has boosted its mobile wallet service with salary disbursements for small business. This allows small business owners to pay their workers direct to their mobile wallet. To enable cash-out Qtel has also partnered with a local bank to tap into the bank’s network of ATMs.

A review of the mobile remittance services availabletodayrevealsavarietyofdifferentapproaches to tackle the challenges of sign-up, cash-in and cash-out. Clearly, oper-ators interested in launching their own remittance service need to identify an approach that best matches their local


market conditions and customer needs since no one approach is universally applicable.

Thedifferentchallenges—whenaddressingboth the needs of the sending side and the receiving side of the transaction — require a considered approach to service design. Once the initial remittance corridor/service is successful, and the service expands with the addition of new remittance routes, new challenges will surely arise because each countryhasitsownfinancialandmobileoperator requirements and regulations regarding money transfers. The wide range of potential solutions means you need to ensureyouhavetheflexibilitywithinyoursolution that will enable you to expand to new markets and match those local market requirements.

Diarmuid Mallon is Head of Global Mobile Marketing Programs for SAP, which includes the SAP Mobile Services division and SAP Mobile Commerce solutions. Before joining SAP, Diarmuid was Product Manager of Logica's Wireless Networks division. He has worked in mobile messaging since 1996, holding a wide variety of range of roles and titles ranging from Business Development to Product Evangelism. Follow him on twitter @diarmuidmallon and read his blog at http://scn.sap.com/community/mobile.

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Mobility — like transportation and electricity — is an increasingly powerful enabler for many other industry sectors. A prime example is banking and financial services. This is a space that benefits greatly from advances in mobile technolo-gies, open platforms, and efforts to deliver engaging user experiences. While mobile wallets and digital currencies are the center of atten-tion in the market and the press, we see the potential for some key infrastructure innovations to surface at this fascinating intersec-tion of multiple industries. Mobile operators bring many core assets to this emerging ecosystem.

Whilst mobile operators are uniquely positioned to bring these core capabilities to the table, they are probably not leveraged to their full potential due to the historical relationships — and tensions — in the

financialservicesvaluechain.Moreover, all services related to money are heavily regulated. For sustainable and at-scale innovation in mobile payments and commerce, existing mobile-unique capabilities must be brought to bear in the infrastructure layer of payments and commerce, not just in the end user experience.

Mobile enables many consumer-facing technologies, especially on the handset, that provide better interactivity, richer experiences, and choice in how customers consumefinancialservicesinnovationsofferedtothembyserviceprovidersusingthe mobile channel. Against this backdrop, there are several operator-owned assets that are not fully appreciated. But it is precisely these operator assets that can provide valuable enabling capabilities, skillsthatarebeneficialandessentialtocreating compelling user experiences.

In this article, I outline three unique and strategic operator-owned assets that can be leveraged to deliver superior mobile payments and commerce propositions.

Operators: Tap Your Strategic Assets By Aditya Khurjekar, Co-Founder and Program Director, Money2020

It is here that mobile operators excel; they have continuously launched new products and services successfully for decades.



1 Operator-Grade Billing Systems

Mobile Operators, cable companies and Internet Service Providers serve tens of millions of customers. Larger companies serve a hundred million subscribers and more. Their mission-critical billing and rating systems support their subscribers during every transaction and at every billing cycle. These capabilities also allow these companies to maintain critical subscriber information — such as name, address, and personal data — and, in some cases, even payment credentials.

More importantly, for post-paid subscrib-ers, operators can build bill payment histories. Such rich information, both thestaticidentificationdataaswellasdynamic/cumulative data, is extremely valuabletoafinancialinstitutionoronline merchant for a variety of reasons. Specifically,financialinstitutionsandmerchants can use this operator- managed subscriber data to establish the identity of their customers, assess the credit worthiness of customers whenassigningariskprofile,orsimplycomplete a checkout with minimal user intervention on a connected device.

Ofcourse,privacyandconfidentialityconsiderations, as well as country-spe-cificregulationsregardingsubscriberdata, are paramount. Subscribers trust

the operator with their personal infor-mation and volunteer it freely to receive andbenefitfromservicesprovidedbythe operator. If the operator enters into an agreement with a company in the financialservicessector,andagreestoshare subscriber or billing data, then it is the respons-ibility of the operator to be transparent about this and obtain clear consent from the subscriber.

2 Highly Efficient Distribution Channels & Customer Service

In many countries, it’s the mobile operator — not a department store chain — that runs the largest retail operations. Mobile operators sell cutting-edge tech-nology with many diverse propositions that change every few months. They source products from multiple global vendorsandoperateextremelyefficientsupply chains. They also serve an amazing number of individual customers and customer segments. Indeed, no two customers are ever identical and opera-tors must manage innumerable combina-tions of handset brands, operating systems, preloaded applications, pricing plans and account hierarchies.

Despite this complexity, most mobile operators excel at the point of sale in stores or online. They also get high marks in customer service, a key area of exper-

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tise that can make or break the business in this age of openness and consumer choice. This is important when it comes toofferinganewmobile-eabledfinancialproductorservice.Deliveringfinancialservices requires a high degree of sophis-tication, both in selling and servicing the customer, especially if the customer is not educated about the value the new service delivers. It is here that mobile operators excel; they have continuously launched new products and services successfully for decades.

Offeringfinancialproductsandserviceswould normally be a burden on the sales and service teams of any company. How-ever, mobile operators are well-equipped to meet the challenge, this because oper-ators, as a rule, manage a well-oiled system of distribution and employ the trainedstafftosupportit.Thereisreallyno substitute for this high-touch engage-ment at the customer touch-points — a capability mobile operators own and which is critical to the successful market-ingoffinancialproductsandservices.

3 Globally Interoperable Authentication & Provisioning Protocols

Whenever a mobile subscriber buys a new handset, replaces a SIM card, or roams into a new coverage area — in anotherareaorevenonadifferent continent — the operators’ provisioning and authentication protocols are at work behind the scenes to allow for seamless communications. These same capabili-ties also allow a trusted reconciliation of the revenues that are shared between the operators and other players in the value chain.

Aslongasacustomerhassufficientcoverage and enough money on their account, they have what they need to make a phone call or conduct a transac-tion. But it’s more than that: customers benefitfromaseamlessandsimpleexperience, one that transcends the boundaries of both countries and tech-nology. The customer doesn’t need to know what device the other party has, or worry about network protocol, it just works. This same seamless and border-

In many countries, it’s the mobile operator — not a department store chain — that runs the largest retail operations.


less experience is desirable in mobile commerce and payments as well. In the in-store payments world, this is concep-tually similar to the ease with which con-sumers can also pay for goods and services using a mag-stripe card. In practice, a mag-stripe card with a global payment mark/scheme, such as a credit card, is honored as tender by all merchants and banks worldwide that accept that particular card as payment.

Commerce transactions on any conn-ected device, especially if they are conducted via a consumer mobile device, should also be as seamless and simple. Specifically,theyshouldbeabletobenefitfromagloballyinteroperableprotocol that enhances the user experi-ence by leveraging the connectivity and intelligence of the device and the mobile network. This is essential to remove unnecessary steps and friction from a shopper’s mobile commerce and payments experience.

As I have shown, mobile operators have thecapabilitiesmixtoplayadefiningandleading role in mobile commerce. I have identifiedthethreemostobviousoneshere.However, time will tell if there are additional assets mobile operators can leverage to improve and innovate mobile commerce and mobile payments. Indeed, mobile operators might only have scratched the

surface when it comes to understanding their true potential in this space and offeringthemobile-specificenablers to accelerate and enhance the mobile payments and commerce experience for consumers everywhere.

Aditya Khurjekar is Co-Founder and Program Director of Money2020 Expo, a new conference that attracts a community of thought leaders in emerging payments andfinancialservices,bringingtogetherinnovatorsfromfinancialinstitutions,mobile, retail and advertising to discuss key issues and the consumer experience. His independent consulting practice, TNBT Global, advises companies on optimising their next-generation mobile money strate-gies, especially around mobile payments. Prior to this, Khurjekar was responsible for Verizon’s strategy and partnerships in commerce and payments and managed it’s investments in its NFC venture Isis.

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Mobile commerce has a track record dating back to the late 1990s. In the last few years the types of services mobile commerce makes possible have significantly changed. So, if you are looking to launch a mobile commerce serv-ice, what should you consider?

Arguably,thefirstmobilecommerceservices centered on enabling payments for early digital content such as ringtones, wallpapers and operator logos. In 1998 Nokia introduced a mobile phone that supported a customisable ringtone and operator logo graphic, which were delivered over the air via SMS.

The advance of digital content allowing users to personalise their mobile phones

was quickly commercialised by operators with the introduction of premium SMS (PSMS). PSMS enabled the cost of the content to be charged directly to the customer’s monthly mobile phone bill. And, whiletherehavebeenseveralrefinementsto this model (such as WAP Billing), this model has remained the dominant charging method for digital content.

In the last few years we have seen more operators move past this payment mech-anismtooffermoreflexiblemobilepaymentservices to their customers. The biggest benefitofPSMSforpayments—similartoSMS — was its ubiquity. However, the many limitations around the PSMS charging model (high costs, charging not linked to delivery of goods, and poor roll-back mechanisms) made it best suited for the purchase of low-value digital goods.

Mobile Commerce Opportunities for OperatorsBy Matthew Talbot, Senior Vice President, mCommerce, SAP

Once you have chosen your approach, you will need to decide between the payments services. Most mobile operators start this journey by moving existing airtime top-up services for their prepaid customers to mobile payments.



THE PAYMENTS LANDSCAPE

While PSMS works today as a payment method for digital goods and services, it doesn’t allow the purchase of real-world goods and services, nor does it enable person-to-person payments. For that a new payment mechanism is needed.

These new payment services are centred on mobile wallets and stored value accounts (SVA),withfinancialmodelsmuchcloser to that of credit card interchange than the revenue-share models of PSMS. Funding moved away from charging via the SMSC, and to either debiting the SVA or charging via the mobile wallet (which is funded by credit, debit, bank account and phone bill).

Unlike the early years of mobile commerce, there is no single business model for mobile commerce. Instead, operators have adopted avarietyofmodelsthatreflectlocalmarketneeds and regulatory constraints.

Overall, payment services can be divided intofivebroadcategories.

Each of these approaches has both clear benefitsandchallenges.TheGlobalapproachoffersthegreatestpotentialrewards, however, developing a solution that can span developed and developing markets is not a simple task. Beyond the technical challenges, there are wide range of business models and local regulations. But the advan-tages of a global approach are clear, after all, the bigger the ecosystem for payments, the greater the chance of success.

Once you have chosen your approach, you will need to decide between the payments services. Most mobile operators start this journey by moving existing airtime top-up services for their prepaid customers to mobilepayments.Thisapproachoffersobviouscost-savingbenefitsovertraditionaltop-up mechanisms. More importantly, thesebenefitsareclearandeasyforcus-tomers to understand.

In developing markets, top-up services are often followed by P2P payments and remittance services. The lack of other remote payment mechanisms in these

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Payment services can be divided into five broad categories

Type Description Advantages ChallengesSolo • Single operator

scheme • Service is only

available to the operator’s customers

• Quickest to implement

• Lack of interoperability

• Difficult to scale

Cross Operator

• Single country scheme

• Service is run as a joint venture between multiple operators.

• Instant scale • Increased reach

through partners (and their customers and merchants)

• Additional complexity that comes from running a multiple-party payment scheme,

Joint Ventures

• Mobile payment schemes that include partners from the wider payments ecosystem

• Can include credit card companies and money transfer companies

• Credit card companies bring interoperability with their payment network and merchants

• Money transfer companies can provide cash-in/cash-out locations

• Need to integrate multiple payment networks and interfaces in a single solution

markets makes these services very attract-ive to consumers. This is because many of these consumers are among the unbanked and will have limited or no access to payment mechanisms other than cash. Mobile P2P and remittance services also have the

potentialtobemoreaffordablethanexisting mobile transfer services.

Developedmarketsareadifferentstory.Their customers’ needs are served by a variety of existing payment mechanisms,


Type Description Advantages Challenges

Group • Operator group mobile wallet

• Local wallets that are interoperable May include mobile wallet hub

• Potential for scale, with tens of millions of users.

• Interoperability for roaming customers

• Hub based approach speeds deployment of remittance services

• Services must reflect each market

• Platform needs to comply with multiple financial regulations

Global • Global play to launch global mobile wallet services

• Group based approach that spans continents

• Likely to include other partners such as card networks

• • •

•

• Huge potential for scale, with hundreds of millions of users

• Interoperability for roaming customers

• Services must reflect each market

• Platform needs to comply with multiple financial regulations

• Need to support developed and emerging market business models

Payment services can be divided into five broad categories (cont)

Figure 1: Based on data from SAP Mobile Services.

such as credit cards, debit cards, cheques and even inter-account transfer via online banking. In a market with so many options it’s clear that P2P can only be a feature of the payments service, not a lead service in itself.

In these developed markets, services focused on convenience feature highly. A great example is paybox in Austria, a cross-operator service that allows users to pay their car parking via mobile. The service also warns users when the parking

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periodisabouttoexpireandofferstheoption to top-up the meter remotely.

BUILT TO LAST

If your focus is emerging markets, then you should also consider adding a SVA (stored value account) to your service. This enables your customers to load cash in to the mobile wallet that can then be used to pay merchants and bills.

Adding partners to the mobile wallet service helps grow the ecosystem the mobile wallet supports. For example, adding a credit card company or money transfer network will provide valuable interoperability to the service, which will help it to grow and scale.

Finally, you need to factor in the impact of new technologies such as mobile NFC on your payments services. While these new technologies are still not mainstream, they

are picking up momentum in some more developed markets. When mobile NFC arrives full force it will provide the basis for additional payment use cases and significantlyimproveexistingservices such as mobile ticketing for transport by speeding up transaction times.

With so many variables to consider — the choice of business models, the array of potential services and local telecom and financialregulations—thereisnoonewayto build a successful mobile payment service. In addition, any service created still needs to be aligned with the local market conditions and customer demographics.

NO MATTER THE MODEL YOU CHOOSE, BE PREPARED TO ADAPT IT OVER TIME

As the service is rolled out there will come a time to add functionality, build partnerships and scale the service. And, as new

When mobile NFC arrives full force it will provide the basis for additional payment use cases and significantly improve existing services such as mobile ticketing for transport by speeding up transaction times.


technologies become mainstream, there will be the need to incorporate these into the service as well. No matter what the initial service design, the requirements will change. Operators determined to build a successful mobile payment service need to buildinflexibility.

Overadecadeago,whenoperatorsfirstrolled out Premium SMS services to enable teenagers to customise the ringtone on their mobile phones, one could not foresee how mobile commerce services would evolve. The idea that migrant workers in Qatar would use automated self-service kiosks to load their mobile wallet and remit money home to friends and family was beyond imagination. This progress in a short span of time teaches an important lesson: no matter what the initial launch require-ments are, if the service is success-ful, it will very quickly outgrow them.

Matthew Talbot is senior vice president of SAP Mobile Commerce division. Prior to this, he was vice president of SAP in Asia. Before joining SAP, Talbot was the CEO of Mobile Internet Group (MIG), a leading wireless application service provider and co-publisherwithofficesinBeijing,Shanghai, Hong Kong, London, Sydney, and the U.S. Read his blog at: http://scn.sap.com/people/matthew.talbot/activity

http://scn.sap.com/people/matthew.talbot/activity

http://scn.sap.com/people/matthew.talbot/activity

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PART SEVEN LEVERAGING MOBILE TO ACHIEVE LASTING LOYALTY


The enormous success of smartphones generally, and of Apple’s iPhone and the Android operating system in particular, have elevated the ‘mobile app’ to a status shared by few peers in the hallowed halls of tech history. So it’s no surprise that many mobile network operators and enterprises find them-selves over-allocating time, money and resources toward an app-centric view of their customers rather than taking a more holistic view. Even more disconcerting is the number of enterprises that have yet to embrace a substantive mobile strategy at all, despite the presence of competitors that have done so.There is enormous pressure today to emphasise certain popular services at the

expense of those deemed “legacy.” However, forward-thinking enterprises in today’s world need to get past “perception,” looking beyond the latest trends in mobile apps, for example (without overlooking them, of course). They must start thinking about the realities of how they can help their custom-ersfulfillarobustmobilestrategy,onethatis truly end-to-end, multi-channel and, perhaps most important, customer-centric.

MULTI-CHANNEL, CUSTOMER-CENTRIC

The importance of having a real mobile strategy, while obvious to some organisa-tions, is by no means a foregone conclusion for many others. Many are in “consider-ation” mode, while others have taken some initial steps. Few enterprises, however, have implemented a genuine mobile strategy. Moreover, they have yet to regard mobile as a rich, multi-channel platform through which consumers and others are interact-ing, often on a 24/7 basis. Answering the question, “What is your mobile strategy?”

By Howard Stevens, Senior Vice President, Global Messaging Solutions, SAP Mobile Services

Perception vs Reality: What’s Your Mobile Strategy?

Marshalling the complete arsenal of tools in your mobile strategy will enable you to look at your customers in materially new ways.

PART SEVEN: LEVERAGING MOBILE TO ACHIEVE LASTING LOYALTY

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begins with close consideration of how end users behave in the mobile realm, what they’re looking for, then determining how best to package that solution.

For example, in the unrelenting spotlight of the media, all we seemingly hear about is apps. Meanwhile, feature phones still account for roughly 70 to 80 percent of the global customer base with SMS and MMS being the only viable non-voice channels to these customers. In fact, both of these channels need to be synchronised as part of a full complement of value-added, strategic offeringsnecessarytoengenderloyalty,retention, as well as acquisition in order to realise a comprehensive mobile strategy.

Indeed,aneffectivemobilestrategyisonethat builds on a foundation of multi-channel options (e.g., SMS, MMS, apps, mobile browser) to support longer-range customer engagement strategies. Marshalling the complete arsenal of tools in your mobile strategy will enable you to look at your customers in materially new ways. The dividends such a strategy bestows upon enterprises are numerous, including break-through techniques to build awareness with consumers, enabling them to transact easily through those multiple channels. The eventual outcome is a virtuous circle constituting a continuous engagement cycle, leveraging loyalty, coupons and other

tactics that enable enterprises to learn and understand consumer behaviors and in turn shape consumer experiences. At the heart of this eco-system is a commitment to multi-channel, multi-faceted mobile market-ing capable of becoming a game-changer for an enterprise.

THE ‘RITE’ STUFF

That said, virtually any of the particular channels mentioned above can constitute one of many roads to Rome. One prime example of how SMS, for example, can serve as a gateway to richer services can be seen with Rite Aid.

When this national brand set out to increase customer convenience and maintain pre-scription compliance, it chose to implement a strategy that employed customers’ preferred communication methods. In this case, Rite Aid provided a service allowing patientstobenotifiedwhentheprescrip-tions are ready by opting in to pharmacy alerts.Inadditiontonotificationbyconven-tional mail, the alerts are delivered, based on customer preference, via email, phone or text message. Patients who opt in are automatically enrolled in the free Wellness+ loyalty program, which includes a monthly newsletterandweeklyspecialoffers.


The results include heightened brand loyaltyandincreasedin-storefoottraffic.Importantly, Rite Aid is looking at ways to incorporate mobile vouchers as part of the loyaltymixtodrivetrafficbetweendifferentparts of its stores. All of which began by offeringaservicebasedonthemost widely used mobile channels, SMS.

THE NEXT LEAP

What’s holding enterprises back from seizing a sustainable competitive advantage through a robust mobile strategy? Surpris-ingly, there is still a fundamental need for greater realisation by enterprises with regard to what consumers are doing, how they’re behaving on mobile channels, and what they want. Generational issues at some organisations have inhibited pursuing more than a cursory mobile-aware approach.

These and other issues impede organisa-tionsfromdoingtherealworkofredefiningthe way they look at their customers, which inturninfluencesthenatureoftheiraware-ness strategies. Until organisations over-come these and other hurdles, they will continue to miss out on the holy grail of a continuous engagement cycle that rewards customers for their loyalty by allowing them to transact easily through multiple channels, when and how they wish to.

At the same time, technological leaps have delivered the operator community from person-to-person and person-to-machine communications to an era of machine-to-machine communications. This has also helped drive a need for discrete, segmented services, delivered under a usage-based pricingmodel,thatarefarmoredifferenti-ated than so-called commodities such as voice service, for example. The features that are being ushered in by 4G and continuing

Until organisations overcome these and other hurdles, they will continue to miss out on the holy grail of a continuous engagement cycle that rewards customers for their loyalty by allowing them to transact easily through multiple channels, when and how they wish to.

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LTE deployments, for example, have led mobile network operators to compete as they move to generate new revenues andprofitswhilemanagingcostsmore carefully than ever.

The progression of mobility has taken us fromasharplydefined,voice-drivenmodelto a dramatically dynamic model of remark-able reach and power. At each step along the way, we have seen the extraordinary become ordinary. Along with these adv-ances has come an ever-widening grid of interoperability, complexity, intelligence and analytics. It is in the midst of this trajectory that enterprises and mobile network opera-tors need to be thinking pro-actively about what their customers and their subscriber base need in order to succeed in the longer term, in ways that remain customer-centric. Customers will soon begin to pose the question themselves: How do I reach you through my mobile? At which point some very clear answers will be needed.

Howard Stevens is responsible for the continuedprofitablegrowthofSAPMobileServices’s global messaging revenues across the telecommunications community and all other market verticals. Stevens has driven the overall go-to-market plan and overseen targeted M&A activity to help augmenttheoverallSAPoffering.Priortojoining SAP, Stevens ran global sales teams for ADC Metrica and First Hop.


Smartphones are with us in every situation — every day, all day. They’re the medium that allows us to record our daily routines, stay up to date, manage our social and business lives, and figure out what to do next and where. As a result, people are increasingly moving away from personal computers and using their smartphones to conduct business and make daily decisions. Significantly, people

also rely on their mobile phones at every stage of the consumer journey. from researching prod-ucts, to shopping, to sharing a product review with their social network, people reach to their smartphones.

Ironically, smartphones aren’t really smart. It’s the mobile apps that have given these devices the information and authority to play a major role in their daily lives. Put another way, it’s all about communication. The rise of third-party apps has created the

Figure 1: Based on data from Urban Airship.

What is the size of the mobile market of the world's 4 billion mobile phones in use?

25%

3.05 billion are SMS enabled

(950 million are not SMS enabled)

75%

1.08 billion are smartphones 27%

The Power of PushBy Coleen Carey, Director of Product Marketing, Urban Airship


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need for a new kind of conversation, one that allows developers to connect with the people who use their apps and communi-cate helpful and relevant information.

Thisiswherepushnotificationscomein.Pushnotificationsaremessagessentfromthe app directly to the devices’ home screen ortothenotificationcenter.ContrarytoSMSmessages,pushnotificationsaresent

over the data network, which means no relationship with the operator is required. Push messaging allows businesses to send targeted messages that bring users back to the app and build loyalty.

In fact, a recent Urban Airship study found that many customers who implement push notificationshaveseenincreasesinapp

Figure 2: Based on data from Urban Airship. Good Push Index, July 2012.

67%

33%

1 Months

Important67% of app usage

Essential 74% of app usage

Critical81% of app usage

4xincrease in app engagement

2 3

26%

19%

81%

74%

Push messaging is critical for app engagementEngagement % of total app opens

Push No Push


engagement of up to 4 times within the firstthreemonthsofsendingnotifications.

Withoutpushnotifications,anapplicationis‘just another app’. It is relegated to the ranks of the other 45-60 apps people download to their smartphones, only to use them sporadi-cally. In worst case, these apps are ignored and abandoned completely within a month.

dEEP(Er) InSIGhTS

Clearly,pushnotificationsareabonusfordevelopers because they boost customer engagement and extend the life of the app. But mobile operators can also reap huge benefitsfromenablingthisongoingexchange.

Indeed, operators are in a unique position to be the organisation that best understands the customer, based on insights into all aspects of the user’s relationship with the most intimate device they own, their mobile phone. How is this possible? By combining UrbanAirship’shighlyscalablePushNotifi-cations with analytics reporting capabilities

provided to customers, a mobile operator iswell-equippedtodeliverhighlyeffectiveprograms that drive results.

Wielding hard data and deep insights mobile operators can improve their services — includ-ingtheirownmarketingefforts—tocreatenew revenue streams that, in turn, result in ARPU uplifts for data and voice packages. This ultimatelyhelpsoffsetthecannibalisationofSMS revenue, improve customer satisfaction and reduce customer churn.

What’s at stake if mobile operators fail to seethebenefitsofencouraginguserengagement with apps on their smart-phones? It’s a risky business, to say the least, for the following reasons:

1 The lack of a ‘conversation’ between app developers and their customers means lower overall data usage. This is an outcome operators certainly want to avoid as they move their business model from one that is voice centered to one that is data centered.

By participating in this exchange operators can build loyalty, increase the value of the device they offer and — ultimately — reduce churn.

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2 Failing to encourage customers to engage withtheirappsmightactuallybackfireand increase customer churn.

3 Bymakingitdifficultforuserstorealise — let alone experience — everything apps can deliver; users may fail to see the value in owning a smartphone and reject the additional costs of owning a smartphone.

Byembracingandusingpushnotificationseffectivelyoperatorscanavoidtheseneg-ative scenarios and outcomes.

PUSH PAYS DIVIDENDS

Thecustomerservicebenefitsaroundpushnotificationsarehuge.Whileappscreateanopportunity to build a relationship with a customer,pushnotificationscantakeit tothenextlevel.Pushnotificationsallowoperators to deliver simple alerts to the customer — and trigger the customer to take action.

Pushnotificationsalsoopenupnewoppor-tunities around advertising and marketing, allowing mobile operators to better under-stand and service their customers, both with integrated customer lifecycle messag-ing and with an operator-controlled opt-in advertising/deal network.

Thepotentialcustomerservicebenefitsenabledbypushnotificationsareverypowerful. Operators have an additional channel to the customer, one that allows themtoquicklyandeffectivelyprovide their customers relevant information around upgrade eligibility, international data package availability, network upgrades andawiderangeofserviceoffers.

Goodpushnotificationmessagesgivetheapp a voice, allowing them to communicate with the customer and deliver a superior customer service experience. This lays a solid groundwork for an ongoing conversa-tion. By participating in this exchange operators can build loyalty, increase the valueofthedevicetheyofferand—

Push notifications also open up new opportunities around advertising and marketing, allowing mobile operators to better understand and service their customers.


ultimately — reduce churn. Operators are in a thought leadership position to encour-age the practice of sending relevant push messages to the developer community.

THE IMPORTANCE OF GOOD PUSH

Pushnotificationsrepresentanewcomm-unications channel and a new way to connect with the customer. Little wonder that peopleareexperimentingwithdifferentways of using it. By providing the customer the ability to choose when, how, and what information they receive, you put the customer in control and reduce the risk that they will grow tired of your app and delete it.

The process is permission based, which means the user must opt in to push and beopentoreceivingnotifications.Beyondthat, its important users get the right message at the right time. Anything else might be dismissed as annoying spam. Without careful consideration of the end user’s reaction to the message, the comm-unication will be wasted leaving a negative impression of the app on the user. By pursuing a careful approach aimed at getting the right message to the right person at the right time, operators have unlimited opportunities to lead the way in an emerging — and exciting — market.

The 7 Rules of Good Push.

For more information go to http://urbanairship.com/goodpush/

1. Give the customer control over when they receive messages.

2. Engage customers with relevant messages.

3. Allow customers to personalise their experience.

4. Stay consistent with your brand.

5. Deliver an engaging experience.

6. Make messages better over time by analysing customer engagement.

7. Adapt messages to your users' ever changing locations and situations.

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Coleen Carey brings over 20 years of technology and consumer packaged goods experience to Urban Airship. As Director of product and partner marketing, she leads the charge in bringing Urban Airship’s industry-leading push messaging platform to market aligned with key strategic part-ners. She has held leadership positions at Kimberly-Clark, Keebler, NEC, 3Com and WebTrends.

Enable your team to:

• Target the right audience

• Maximise messaging reach & speed

• Enhance conversion Opportunities

• Evaluate success to optimise

Figure 2: Based on data from Urban Airship.

Our high performance push messaging platform

Optim

ise Target

Message

Conver

t

Urban Airship


Thanks to the proliferation of connected devices —mobile phones, smartphones and tablets — consumers across all demo-graphics now share a common trait: they are empowered. They have the freedom to choose how they interact with companies and each other.

Theyalsodemandflexibleservicesthattrulymatchtheirpersonalprofilesandneeds, and they want these services any-time, anywhere. While this is an exciting prospect for consumers, it represents a profound challenge to the traditional telecom business model. Operators have been used to a mass model of provisioning and deployment, with customer interaction happening through a few formal channels. In order to harness the opportunity, opera-

tors need to embrace a more holistic approach to customer experience.

While a customer-centric approach has always been at the core of our strategy at Celcom, there is a greater understanding now that telecommunications is not solely about technology. Put another way, techn-ology must adapt to customer needs, not the other way around. The shift from a “walk and talk” mobility approach to a “sit and play” one requires mobile operators to rethink experience.

The traditional telecom approach of improv-ing call success rates, reducing dropped calls and providing VIP service is still appli-cable. However, the “data anywhere” needs of today’s consumers are changing the land-scape. A tweed-jacketed banker just may be a secret mobile gamer, while low voice ARPU elderly ladies may also be high consumers of Bollywood content. Customers have

Harmonising Touch Points, Technology, Processes And PeopleBy Suresh Sidhu, Chief Corporate & Operations Officer, Celcom Axiata Berhad

From sales to service, from voice to surfing, customers now look for very different support from their operator.


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many facets. This challenges the customer segmentation approach, often based on usage or demographics that operators have assumed and applied.

Celcomhastakenspecificstepstoevolve its view of customer experience to match how people have made mobility an integral part of their daily routine. The approach that works is to design services that encompass all the stages of daily life. These are: Rest, which is about how customers enjoy mobility at home; Work, which is about how usersharnessmobileintheofficeortoperform their job; and Play, which is about how customers use the mobile device to enhance their leisure or travel time. Today, the key to customer satisfaction comes from harnessing four key pillars – touch points, technology, process and people.

TIME FOR A RETHINK

Many of the approaches to customer experience stem from the days when the network was largely about delivering voice. Even with the advent of 3G, the demands were often still focused on voice quality and the traditional elements of customer service – call centre response, complaint managementanddifferentiatedservice for premium customers.

In Celcom’s bid to win back share it had lost, it followed exactly this approach. We embarkedonaprogramto“fixthebasics”by solving billing issues, reducing the time needed by call centre agents to respond to customer calls and streamlining how customers sign up for a service plan. Besides internal improvements, the program also enabled customers everywhere in Malaysia to reach Celcom by dialing a single number (1111).

However, the increasing growth of data on networks has challenged this approach. It’s no longer enough to focus on voice quality or even connectivity assurance. From sales toservice,fromvoicetosurfing,customersnowlookforverydifferentsupportfromtheir operator. Some examples of these customer needs are:

• Always having the latest devices available in well designed retail stores

• Staffthatisknowledgeableaboutmobile,includingthedifferencesbetweendevicesand versions of Android, and can provide help with trouble shooting

• Single sign on across a range of services, from mobile to Wi-Fi

• High-speed access everywhere in urban centres

• High quality connectivity in rural locations• Easy to understand pricing and transparent

billing


• Convenient self-service channels, integrated with physical ones

This is a daunting list, and by no means exhaustive. The operator that rises to this challenge, and executes well, is likely to reapsignificantrewards.

THE FOUR PILLARS

Our approach at Celcom to this challenge has been to ensure everything we do is int-egrated across the four pillars of Customer Experience – Touch Points, Technology, ProcessandPeople.Wewouldbethefirsttoadmit that we have a long way to go. We are very much in the early phase of the change, withsignificantinvestmentscommitted.Butmany projects are still in its implementation phase. There are also other valid approaches – but these are the ones we feel suit our customers’ needs best.

To provide an illustration of what we aim to achieve, I have outlined some of the invest-

ments we are making and the aspirations we have when the work is completed.

• Touch Points: We are transforming our stores from branches to real retail stores. Device sales are central to this vision. Equallyimportant,staffisequippedwithtablets and a sound knowledge of our products so that they are able to provide expert advice and comparisons while customers shop. This year, we will launch ourflagshipstoreandevenroll-outstoresfocusedentirelyonofferingAppledevices.

• Technology: We are focusing not just on our IT capabilities, but also on our network. In IT, we have a major pro-gramme to upgrade our end-to-end capabilities with a brand new Business Support Systems and analytics capability. At the heart of this approach is the single screen for customer service, so that time spent with customers is maximised and personalised. On the network side, Celcom is investing in its next-generation network and upgrading to an intelligent packet core that is standards-based and supports rich features and functionality.

Put another way, technology must adapt to customer needs, not the other way around.

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Thissimplifiedbutflexiblearchitecturewill enable seamless movement between services, allowing Celcom to deliver on its customer experience with features like single sign on and integrated policy management.

• Process: A key part of our process work is to embed “The Celcom Way” into product and service design. We have developed a ‘moment of truth’ approach that we use to ensure a new service, or even an existing one, has the customer experience built into our design.

• People: People are always part of the equation of a unique customer experi-ence. Our approach is aimed at ensuring that the store experience is more like Starbucks, than a traditional telecom store. Naturally, this culture change doesn’t happen overnight, so it’s here that we are also currently focusing the most timeandeffort.

NEXT-GEN CUSTOMER EXPERIENCE

The transformation into a true service expe-rience is still at an early stage. However, Celcom aspires to be at the forefront of what it calls the “Next Generation Customer Experience.” Whilst our approaches have had their fair share of successes and chal-

lenges, we have learnt that persistence and consistency are the keys to success.

The future data-centric world will challenge operators in ways we may not be able to imagine today. The major risk is that of dis-intermediation, that operators will become nothing more than a pipe for customers to reach Facebook, Google, or OTT messaging services such as WhatsApp. To rise to this challenge operators will need to deploy manydifferentstrategiesfrompricingtonew businesses. However, Celcom is con-vinced customers will stay loyal provided they are provided with the right experience.

Suresh Narain Singh Sidhu is responsible for technology operations across Network andIT,StrategyandRegulatoryaffairsaswell as the end to end business transform-ation of Celcom. Prior Sidhu was at Dialog Telekom PLC in Sri Lanka where he held the roleofGroupChiefOfficer–EnterpriseandGlobal at Dialog Telekom PLC. He also helped create two new ventures for Dialog - a branded Overseas Foreign Workers partnership in the UK, Dialog Vizz, and a joint venture in the Business Process Outsourcing space with First Source Solutions of India.


We live our lives on mobile. Our devices are never more than three feet away. What’s more, we look at our mobile phone displays at least 150 times a day, that’s roughly every 5 minutes! Mobile also plays a central role in our daily routines. We reach to mobile devices to liberate our work lives, organise our home lives and strengthen our social lives. Mobile is also our primary communications tool. Two-thirds of the human race rely on text messaging to connect with a growing network of family, friends, businesses, organisations — even governments. Little wonder that SMS is the most widely used data application on the planet.

Mobile is the most potent form of media in the history of mankind. In fact, Tomi Ahonen

— independent consultant and author of several industry best-selling argues that mobile is a new mass media. Following print from the 1500s, recording from the 1900s, cinema from the 1910s, radio from the 1920s TV from the 1950s and Internet from the 1990s, mobile is the mass media where “all forms of content and communications converge.”

REAL RELATIONSHIPS

Connect the dots, and it is the pervasiveness and sheer dominance of mobile devices that have given them a central position in our daily lives. But mobileisalsoafiercelypersonaldevice,which makes it ideal mass media for interaction and engagement. This is why mobile can also improve customer relationship management.

Ask, Listen And Build Lasting LoyaltyBy Sally Burley, Co-founder & Director, The 3rd Degree

Finding out why a customer is unhappy, and working to fix it straight away with customer care follow up, can turn a potential defector into a powerful advocate.


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The combination of the two — referred to asMobileCRM(mCRM)—offersawayforcompanies to build lasting relationships with their customers by harnessing the unique bond we all have with our mobile devices to connect with us in a way we appreciate. But it’s not just about deepening ties with the customers; mCRM also allows companies to gain instant insight and feedback about how their audience thinks, feels and acts.

Operators sit in a unique position to use mCRM in its most capable and potent form to create and maintain a 360-degree view of their customers. This is possible because operators own the customer billing relation-ship and important data including usage levels, personal preferences and purchasing patterns. Access to this powerful combina-tion of insights and information puts opera-torsinastrongpositiontobenefitfromdeep and ongoing mobile engagement.

Another factor in favor of operators is their ability — powered by customer data — to satisfy our growing requirement for personal and relevant information and communications. This is imperative on a mobile device, where we have created a highly intimate space and expect companies and businesses to respect the rules of engagement. Put another way, relevance and personalisation are the key elements of a successful ongoing dialogue.

Fortunately, for both the operator and other players in the business ecosystem, the information necessary to deliver personalised and targeted communications — communications that is therefore aligned with our personal preferences and require-ments — is baked into the relationship operators have with their customers. This long-standing and intimate relationship ensuresthatfirstcommunicationsbet- ween companies and consumers are engaging and relevant.

TWO-WAY COMMUNICATION

Just as in real-life, building relationship is about talking and listening. A successful mCRM program integrates social interac-tion, customer engagement and customer feedback. It also uses the conversations it enables between customers and businesses to support and assist buying decisions, drive loyalty and encourage brand advocacy. At the same time, the program gathers insights and customer data that will help ensure the relationship remains healthy, ongoing and relevant.

Clearly, the customer relationship is built on engagement and a successful program seeks ways to deepen that engagement. This is where mCRM comes in to extend and enhance the relationship every step of the


customer journey. But it’s not just about enabling interaction between companies and their customers.

An mCRM platform should also enable a two-way conversation using SMS, and harness all the other channels — mobile web, apps and social media — to ensure the exchange is deep and ongoing. Following this approach allows companies to create engagement, build loyalty, gain customer insights and gather customer data. It also lays the groundwork for a successful strategy to achieve a deeper, more valuable relationship with customers. BelowIoutlinethespecificbenefitsand use cases that underline the growing requirement for mCRM.

CUSTOMER ACqUISITION

Mobile is the smartest and fastest way to build a bond with your audience. But it is

also an excellent way to deliver customer service.

A whopping 5.6 billion people use mobile phones. In addition, 1.8 billion people access the Internet via their mobile devices — that’s more than the total number of PC-based Internet users worldwide. Clearly, mobile plays a key role in developed markets and it hasbecomethefirstandonlyscreenforpeople in developing markets.

Ensuring that existing and potential customers can rely on their mobile devices to ‘self-serve’ quickly and easily is key to customer acquisition in the mobile space. Enabling customers to perform a simple task on their own — like requesting a SIM card via text, for example — can take pressureoffoperatorcallcentersandwalk-in retail stores. What’s more, it goes a long way toward removing the barriers and friction new customers can encounter.

Operators sit in a unique position to use mCRM in its most capable and potent form to create and maintain a 360-degree view of their customers.

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LOYALTY AND ADVOCACY

Loyalty ensures that customers become fans and brand advocates. The process usually starts when people make a purchase. After that the pressure is on the brand to deliver on its promise— which, in many cases, spans the lifetime of the product or service. For operators this can be an even bigger task. After all, we rely on our mobile devices every step of our daily routine. If our operators fail to deliver the services and support we need, then it’s a speedy decline to customer dissatisfaction.

But it doesn’t have to end that way. Mobile allows operators to create and deliver campaigns that talk directly to customers, to nip problems in the bud. With mobile and a comprehensive mCRM program operators can ask questions, gauge reactions, gather feedback and grow their relationship with individual customers. Get it right and opera-tors can not only reduce churn; they can also boost loyalty and use of their services.

The goal is to build a loyal legion of brand advocates. These are fans that have engaged with a brand and enjoyed the results. Based on this good customer expe-rience, these fans pass the good word on. It’s word-of-mouth advertising, but mobile increasesitsreachandeffectiveness.In this scenario mCRM can nurture brand

advocacy by encouraging loyal customers to recruit new customers using a variety of channels including text messaging and social media.

FEEDBACK LOOP

Mobile lets companies begin the conversa-tion, but it’s also important to listen to what customers have to say. It’s easier to serve — and consistently delight — a customer once you get to know them. To accomplish this companies need a deep understanding of the customer. And it helps to be able to ask —andfindout—theirinterests,personalpreferences and motivations. This informa-tionallowscompaniestorefineandimprovetheir customer segmentation and targeting, ensuring the delivery of personal and relevant information and communications that are essential to boost customer loyalty. This approach also provides the basis for all communications with the customer.

Using mobile as a tool to conduct research is approach that delivers dividends. This proactive outreach allows companies to monitor customer satisfaction and sent-iment. These are important indicators that allow companies to achieve two key object-ives: get to know their customers better, and detect situations quickly that — unattended — could cause customers to switch.


Finding out why a customer is unhappy, and workingtofixitstraightawaywithcustomercare follow up, can turn a potential defector into a powerful advocate. With mCRM this research and feedback process can be ongoing and automatic. A prime example is how SMS can be used to survey customers. Integrating this in mCRM shows your cus-tomers that you care — interaction that can increase overall satisfaction levels — and provides the organisation instant and actionableinsights.Significantly,thisinfor-mation can be immediately accessible to customer care centres, and even the board can be monitoring this data in real-time.

GOOD LISTENER

We are mobile. Therefore it is critical to make sure that mobile communication channels are leading the way in the conv-ersation between you and your customer. An mCRM platform is essential to ensure the exchange delivers value to both parties. This can be achieved in two ways: mCRM can be used as a tactical tool to enable and deepen the mobile relationship, or it can be integrated — as needed — to support your strategic CRM capability to empower the ongoing mobile relationship.

Customers are empowered to request — even demand — products and services on their terms. Against this backdrop, it’s never been more important for companies to know and understand their customers. It is essential to create a 360-degree view of your customers based on details about their preferences, personal tastes and how they are using their mobile devices, but this information is just part of the equation. Companies and mobile operators should also harness mobile to ask questions and listen to the answers. Enable an ongoing conversation and you can build the capabili-ties mix to satisfy the customer, reduce churn and maximise revenue opportunities.

Sally Burley is Co-founder and Director of The 3rd Degree. Burley began her career as acognitivescientistworkingwithartificialintelligence systems before specialising in SaaS applications and GUI design. She has worked with mobile technology since 1999.

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Mobile has come to represent the most pervasive channel of communications and targeted engagement on the planet. What’s more, the immediacy, convenience and personal attachment around our connected devices makes mobile an ideal mass media and means of delivering relevant marketing messages and app-lication interaction to a global customer base.

Portio Research projects over 7 billion mobile subscribers globally by end-2013 and annual handset shipments of over 2.15 billion by 2016. While smartphones already accountforasignificantnumberofhandsetshipped, a mega-trends presentation comp-iledbytheventurecapitalfirmKleiner

PerkinsCaufield&Byers(KPCB),showsthat feature phone users still outnumber smartphone users by a ratio of nearly six-to-one.

Overall, mobile phone users vastly outnum-ber PC Internet users by a ratio of more than four to one. According to the global researchfirmGartner,thereareroughlyonebillion PCs installed worldwide, and the number of users connecting to the Internet via their PCs is estimated at 1.7 billion. This pales in comparison to the number of mobile Internet users, which is pegged at 6 billion-plus. Of that total, a whopping 80 percent send and receive text messages, making SMS the most widely used data application in the world.

Infact,worldwideSMStrafficreached8.6billion messages in 2012, a number expected to exceed 9.5 trillion by 2015, according to Portio Research.

Why Customer Engagement Campaigns Pay DividendsBy Gregory Dunn, Vice President, Product Strategy and Solutions, SAP Mobile Services

From researching products, to conducting transactions, to sharing a product review with their social network, people rely on their mobile devices to access advice and make the right decisions.



CREATING A CONVERSATION

Mobile changes the rules of engagement, impacting how people communicate with each other and how they choose to connect with brands and businesses. Reams of consumer research support the existence of a seismic shift in human behavior and show the boundary between mobile and social is blurring.

ThemarketingfirmRuderFinn,forexample,reports that 91 percent of mobile phone users reach to their devices to connect with their social networks and keep up-to-date with their communities. Mobile and social are morphing, and the impact on business is profound.

Indeed, mobile has empowered people to expect (even demand) marketers to

Figure 1: Based on data from KPCB. Smartphone subscriber estimates per Morgan Stanely Research; Mobile phone

subscribers per Informa (as of Q2: 11).

http://kpcb.com/insights/2012-internet-trends

Glob

al u

sers

(mill

ions

) 5,000

3,000

1,000

0

6,000

4,000

2,000

5.6B Mobilephone subscribers

835MMSmartphone subscribers

Despite tremendous ramp so far, smartphones usage still has huge upside. Global smartphones vs. mobile phone subscribers, 2011E

Smartphones users

Mobile phone users

Note: While there are 936MM global 3G subscribers as of Q2: 11, not all of them were smartphone users. One may have multiple mobile subscriptions, therefore actual users #s may be lower than subscriber #s.

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conduct conversations with them on their devices and — more importantly — listen to their responses. More importantly, because this interaction takes place on their personal mobile phones, marketing messages must also match the context of what matters most to these always-on individuals: their preferences, interests and daily experiences.

Research reveals that nearly half (44 percent) of consumers say they would

rather receive product information and marketing messages through SMS camp-aigns than any other channel.

But the applications of SMS are not just limited to enabling personalised, two-way dialog around marketing and advertising messages. Analysts report that nearly 80 percent of best-in-class call centers are alreadyleveragingSMStoincreaseeffi-ciency and support customers who prefer

Figure 2: Based on data from Millennial Media. www.millennialmedia.com/mobile-intelligence/

Verticals Growth

Technology 698%

Finance 314%

Health:Fitness & Wellness 229%

CPG/FMCG 199%

Retail & Restaurants 193%

Automative 185%

Pharmaceuticals 159%

Entertainment 133%

Education 122%

Vertical explosion Year over year spend growth -2011/2010


the convenience of self-service to the hassle of waiting for a live call center agent to answer their query.

MOBILE AT THE CENTER

Mobile as a marketing channel has trem-endous potential. Google — in its research aptly titled “The new Multi-screen World: Understanding Cross-platform Consumer Behavior"— shows that mobile has become our constant companion. In partnership with Sterling Brands and Ipsos Google surveyed 1,611 consumers in the U.S. to determine their media interactions and behaviors.

People have become what Google terms ‘multi-screeners,’ choosing their screen (mobile, tablet, PC or TV) depending on their context and what they want to accom-plish. Against this backdrop, mobile phones have become “the backbone of our daily media interactions.” Smartphones, in partic-ular, have the highest number of user inter-actions per day and serve as the starting point for activities across multiple screens.

Mobile clearly plays a central role in our daily lives. The impact on retail, for example, iswelldocumented.MarketresearchfirmcomScorefindsthatmobilereachesandinfluencespeoplethroughoutthepurchase

funnel (awareness, consideration, engage-ment, conversion and loyalty). In short, people are relying on their mobile phones at every stage of the consumer journey. From researching products, to conducting transactions, to sharing a product review with their social network, people rely on their mobile devices to access advice and make the right decisions.

ENGAGING AT EVERY STAGE

Our increasing dependence on mobile devices for assistance and advice paves the way for marketers to harness mobile as part of an ongoing strategy to engage customers at every stage of the purchase process, from building awareness all the way through to boosting loyalty.

It’s a huge opportunity that brands around the world are grasping with both hands. The result is what mobile ad and platform company Millennial Media calls a “vertical explosion” and one that has seen triple digit growth or greater in mobile advertising spend. From Technology to Entertainment , and from Automotive to Education, a wide variety of brands are using mobile to reach and engage their customers.

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But it’s also an area of opportunity where mobile operators can — and must — become more active.

NEW MANDATE

Faced with the decline in the ‘average revenue per user’ (ARPU) mobile operators have two options: they can attract more customers from rival operators, or they can wring more value from their existing customers.

Success is all about learning how to sell more services to more customers better. Fortunately, mobile operators are already extremely well equipped to achieve this goal. Several factors provide them competitive advantage.

First, mobile operators own the network. This control allows them to connect with their audience and deliver targeted market-ingmessagesaboutservices,tariffsandspecialoffers.Second,mobileoperatorsown the customer relationship. This allows them visibility into key subscriber informa-tion, including service usage, personal preferences and purchase patterns. These insights are essential and enable the mobile operator to deliver marketing their subscribers will genuinely appreciate.

Put another way, mobile operators are in the enviable position to deliver personal, relevant and valuable marketing messages from the get-go because these commun-ications are completely aligned with the customer data the mobile operator already owns.

Mobile operators that break down messaging silos and build the capabilities to complement their regular text communications with related marketing messages that show a deep understanding of the individual user can position themselves to make their subscribers an offer they will find hard to refuse.


DEEP TRUST

Best of all, surveys show consumers trust their operators to deliver useful marketing. It’s a close relationship the mobile operator enjoys and can deepen through targeted SMS communications.

A recent Upstream Mobile Marketing ConsumerAttitudesReportconfirmstheclose (and untapped) relationship mobile operators have with their subscribers.

Based on a survey of 2,198 U.K. adults the report reveals that over half (59 percent) of consumers are happy to be contacted by theiroperatorwithrelevantoffers.Notably,15 percent of respondents said they would welcome personalised suggestions for plan upgrades, and 13 percent would like to receive advertising about discounts aligned with their actual usage and requirements.

How do consumers want to be contacted by mobile operators? Again the Upstream surveyofferssomekeyinsights.

The most popular format was text message (61 percent), and 51 percent said that they wouldliketobeinformedaboutnewoffersandserviceswithinthenormalflowofSMSmessages that they already receive from theirmobileoperators.Specifically,

respondents would welcome mobile marketing messages as part of top-up confirmations(9percent),missedcall and voicemail alerts (8 percent), balance updates (7 percent) and roaming notifications(7percent).

LASTING LOYALTY

Imaginetheeffectivenessofapersonalisedand targeted marketing message that pairs anaccountbalancenotificationwithanofferbased on the subscriber’s own unique usage and requirements.

Mobile operators that break down mess-aging silos and build the capabilities to complement their regular text commun-ications with related marketing messages that show a deep understanding of the individual user can position themselves to maketheirsubscribersanoffertheywill findhardtorefuse.

But it’s not just about wielding the power of mobile to cross-sell and up-sell subscribersbasedontheirprofilesandpreferences. Mobile also enables mobile operators —and the marketers that partner with them — to super-charge their CRM strategies.

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Put another way, the optimised use of the mobile channel allows mobile operators to maintain continuous customer touch, enabling them to deliver sustained support and service and participate in two-way conversations with their subscribers. The result is an approach that rewards both stakeholders.

Subscribers are encouraged to engage in ‘conversations’ on their terms, interactions that boost loyalty and build intimacy. Mobile operators gain greater insights into what their subscribers want and appreciate, datathatalsohelpsoperatorsrefine their services and —ultimately — ensure customer loyalty is deep and long-lasting.

Mobile can also extend the impact and value of advertising. Case in point: point-of-sale displays where mobile allows marketers to gauge response in real-time and track the degree to which that particular advertising is attracting the attention of consumers and prompting them to interact using their mobile device. It’s a similar story in print media, where innovations such as 2D barcodes make it possible for consumers to access more information using their mobile phones.

Clearly, mobile complements all marketing andmessagingchannels.Asaneffectivemass media on its own or well integrated into a comprehensive digital strategy, mobile has vast potential to create business value,improveprocessefficiency,triggerproduct consumption and use, and increase customer feedback. Executed correctly, mobiledoesn’tsimplyclinchtheone-offdeal. It furthers loyalty, cements relation-ships and improves CRM.

Gregory Dunn manages the global product management group within SAP Mobile Services. Dunn has over 28 years of tele-communications experience, with primary focus in the wireless industry. He started his career at the divestiture of AT&T, spending timeatPacificTelesis,whereheheldseniormanagement positions of increasing responsibility, with a core milestone achievement of launchingthefirststatewide900mhzmes-saging system in the US.


APPENDIX

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A2P (Application to Person) - This is typically a human communicating with an application via messaging.

ARPU (Average Revenue Per User) - This is usually abbreviated to ARPU is a measure used primarily by consumer communica-tionsandnetworkingcompanies,defined as the total revenue divided by the number of subscribers.

ASR (Answer Seizure Ratio) - In Voice telecommunications, this is a measure of networkqualitydefinedasthenumberofsuccessfully answered calls divided by the totalnumberofcalls.DefinedbyITUE.411specifications.

BARG (GSMA's Billing and Accounting Roaming Group) - This is a working group that manages the various standards and procedures for GMS billing and roaming. Various regional and international BARG groups meet at various times through the year.

BYOD - Bring Your Own Device

BYON - Bring Your Own Number

CAPEX (Capital Expenditure) - A capital expenditure is incurred when a business spendsmoneyeithertobuyfixedassetsortoaddtothevalueofanexistingfixedassetwith a useful life extending beyond the taxable year.

CISPA - Cyber Information Sharing and Protection Act [(CISPA) (H.R. 3523)] - CISPA addresses how information would be shared between private companies and the government to catch malicious actors breaching networks to steal information or sabotaging systems.

CoS - Classes of Service

CSP - Communications Service Providers

DRA - Diameter Relay Agent

DSC - Diameter Signalling Controller

Diameter - An Authentication, Authoriza-tion, and Accounting (AAA) protocol for computer and telecommunications networks. It is the successor to the Radius Protocol. In LTE networks, used to authenticate subscribers on networks (home or visited).

Dongle - This is a small piece of hardware that plugs into an electrical connector on a computer and serves as an electronic "key" for a piece of software; the program will run only when the dongle is plugged in. The term "dongle" was originally used to refer only to software-protection dongles; however, currently "dongle" is often used to refer to any small piece of hardware that plugs into a computer.

Glossary Of Terms

APPENDIX


E.164 -TheITUstandardfordefiningtele-phone numbers. Consists of a country code + local dialing digits. All Telephone Numbers should comply with E.164.

E-UTRAN - Evolved Universal Terrestrial Radio Access Network - the LTE radio/air interface.

Fallback [Capacity] - The ability for an LTE subscriber to connect to the 3G (non-LTE) infrastructure while roaming.

Five 9s service availability - Also written as 99.999%. This is used in Service Level Agreements (SLAs) that indicate that a service should be available 99.999% of the time (or greater).

GNU - GNU is not Unix. A Unix-like computer operating system developed by the GNU Project, ultimately aiming to be a "complete Unix-compatible software system" comp-osed wholly of free software.

GPRS (General packet radio service) - A packet oriented mobile data service on the 2G and 3G cellular communication system's global system for mobile communications.

GRX (GPRS Roaming Exchange) - A hub for GPRS connections from roaming users, removing the need for a dedicated link between each GPRS service provider.

GSMA (GSM Association) - An association of mobile operators and related companies to manage standardization, deployment and promotion of the GSM-based mobile tele-phone system.

GSMA AA.19 - A GSMA document used to exchange SMS parameters and termination fees for bi-lateral interworking.

GMSA IR.21 - A GSMA document that is usedtodefinetheprotocolsandinforma-tion regarding roaming procedures as well as messaging parameters between mobile operators.

GSMA IR.35 -A GSMA document describing "End-to-End Functional Capability Test Speci-ficationforInter-PLMNGPRSRoaming".

HPLMN (Home Public Land Mobile Network) - A subscriber's home network in a roaming scenario.

HSS (Home Subscriber Servicer) - Think of this as a net-gen HLR (Home Location Register). The HSS is used in LTE networks.

HSPA (High Speed Packet Access) - A combination of two mobile packet proto-cols: High Speed Downlink Packet Access (HSDPA) and High Speed Uplink Packet Access (HSUPA) to extend and improve 3G networks using the WCDMA protocols. Some call this 3.5G (a marketing term only).

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HSPA+ - Evolved HSPA - Extends HSPA to higher speeds. Some networks' marketing groups refer to this as "4G."

IDD (International Direct Dial) - A telecommunications system that enables callers to dial direct an international tele-phone number for a voice call.

IP-VPN - IP - based Virtual Private Network

IPX - IP eXchange - A global extremely high speed, high quality of service network backbone used to provide interworking of mobileandfixedoperatorservicessuch as voice, messaging, data roaming, video, RCS and more.

ISP - Internet Service Providers

Joyn - The GSMA brand name of the RCSe implementation for many operators in Europe. Joyn was rolled out in 2012.

Local breakout - The ability for a roaming subscriber to reach the Internet cloud through the visited network instead of all IP data being routed (via GRX) back to the home network.

LTE (Long Term Evolution) - Standard for wireless communication of high-speed data for mobile phones and data terminals. Many times LTE is referred to as "4G."

M2M - Machine to Machine

MDN (Mobile Directory Number) - An alternative (mostly CDMA based) nomen-clature for a subscriber's telephone number.

MMS (Multimedia Messaging Service) - A messaging service that enables users to send/receive rich content (images, audio, and video clips).

MNO (Mobile Network Operator) - Also known as a "mobile carrier." A service provider that provides mobile services (voice, messaging, network access) to subscribers.

MNP (Mobile Number Portability) - Enables mobile telephone users to retain their mobile telephone numbers when changing from one mobile network operator to another, also known as Wireless Number Portability (WNP).

MO (Mobile Originated) - Traffic originating from a mobile or user device

MSISDN (Mobile Station International Subscriber Directory Number) - A subscriber's telephone number on a GSM or UMTS network.

MT (Mobile Terminated) -Trafficreceivedon a mobile or user device.


NER (Network Efficiency Ratio) - Ameasureofnetworkqualitydefinedas:Answers + User Busy + Ring No Answer _ Terminal Rejects / Total call attempts (seizures).Definedasanadditionto ITU E.411.

NFC (Near Field Communication) - A set of mobile device standards to establish a close-proximity radio connection.

NGN (Next Generation Network) - A broad term used to describe key architec-tural evolutions in telecommunication core and access networks.

NUVO (Network Unaffiliated Virtual Operator) - A service provider that assigns alternate telephone numbers to provide Messaging and/or Voice services with interoperability to legacy Messaging & Voice networks (e.g. Mediafriends, Pinger, etc).

OPEX (Operational Expenditure) - An ongoing cost for running a product, business, or system.

OTT (Over The Top) - Inthefieldsofbroad-casting and content delivery, over-the-top content (OTT) means on-line delivery of video and audio without the Internet service provider(Comcast, Verizon, etc.) being involved in the control or distribution of the content itself.

P2P - Person to Person (or human to human via telecommunications devices)

PLMN (Public Land Mobile Network) - A Mobile network

PSMS - Premium SMS (PSMS).

PSTN (Public Switched Telephone Network) - The legacy telephone network

QoS (Quality of Service) - Refers to several related aspects of telephony and computer networks that allow the transport oftrafficwithspecialrequirements.

RCS (Rich Communications System) - RCS is a GSMA initiative to support next generation messaging, voice calls with advanced capabilities including presence, video, real-time messaging with inter-work-ing and compatibility with legacy voice & messaging services.

RCSe - DefinesasubsetofthefullRCSstandard. RCSe is being established in Europe at several operators in 2012, using the "Joyn" brand.

SIGTran - GSM MAP (or SS7) over IP

SIP (Session Initiation Protocol) - The Session Initiation Protocol (SIP) is an IETF-definedsignallingprotocolwidelyused

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for controlling communication sessions such as voice and video calls over Internet Protocol (IP).

SMS (Short Message Service) - A text messaging service component of phone, web, or mobile communication systems, using standardized communications protocols that allow the exchange of short textmessagesbetweenfixedlineormobilephone devices.

Social Engineering - Social engineering entices potential victims into taking some action that will prove harmful to themselves and/or the device they are using.

SS7 (Signalling System No 7) - A set of telephony signalling protocols which are used to set up most of the world's public switched telephone network telephone calls.

SSM - Self-Service Machines

SVA - Stored Value Accounts

SAP Mobile Services Number Resolution System - A globally distributed database of numbering plans and number portability information for countries around the world. NRS is continually updated (real-time for some countries) with the latest number portability and number range data.

TAP (Transferred Account Procedure) - This is the process and document formats that allow a visited network operator to send billing records of roaming subscriberrs to their respecitive home network operators. The latest version of the standard is TAP 3.

TAP 3.12 -AGSMAspecification,releasedin GSMA document TD.57 v30.1 on May 1, 2012. New functionality includes LTE Service support for voice and SMA as well aschargingflexibilityandvalidationimprovements among other chagnes.

TDM (Time-Division Multiplexing) - A type of digital multiplexing in which two or more bit streams or signals are transferred appar-ently simultaneously as sub-channels in one communication channel, but are physically taking turns on the channel.

Transrating - Transrating means changing the bitrate (bandwidth) of a stream by means of processing. For instance, process-ing an input video stream of 1Mbps so that the output stream is 256Kbps only. Tran-srating can increase or decrease the bitrate, and usually involves changing the encoding parameters.

Transcoding - A two-step process in which theoriginaldata/fileisdecodedtoaninter-mediate uncompressed format, which is then encoded into the target format.


TN - Telephone Number

VPLMN (Visited Public Land Mobile Network) - In a roaming scenario, the network that the subscriber is currently connected to.

VoHSPA - Voice over HSPA

VoLTE - Voice over LTE

VoIP (Voice over Internet Protocol) - Commonly refers to the communication protocols, technologies, methodologies, and transmission techniques involved in the delivery of voice communications and multi-media sessions over Internet Protocol (IP) networks, such as the Internet.

VoWIFI - Voice-over-Wi-Fi

WAP Billing - This is a capability for mobile subscribers to buy content from Wireless Application Protocol sites (or mobile sites) and have the purchases charged directly to their mobile phone bills from their mobile operator.

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Aylus Networks

Aylus Networks, helps mobile operators and communications service providers deliver live video services for consumers and enter-prises. Solutions range from live video sharing, including social networks and RCS/RCSe devices, to multi-party video calling on mobile networks. Aylus’ innovative, IP-based core infrastructure platform is unique in its ability to serve as a video calling interexchange, enabling mobile service providers to optimise video communications among differentnetworks(3G/4G/Wi-Fi)regard-less of the endpoints, build new revenue streams through QoS/QoE, and drive mass-market adoption of mobile video services based on existing voice calling offerings.Visitwww.aylus.com

Bharti Airtel

Bharti Airtel is a leading integrated telecom-munications company with operations in 20 countries across Asia and Africa. Headquar-tered in New Delhi, India the company ranks amongst the top 5 mobile service providers globally in terms of subscribers. In India, the company’sproductofferingsinclude2G,3Gand4Gservices,fixedline,highspeedbroadband through DSL, IPTV, DTH, enter-prise services including national and inter-national long distance services to operators. Intherestofthegeographies,itoffers 2G, 3G mobile services. Bharti Airtel had over 246 million customers across its operations at the end of February 2012. Visit www.airtel.in

CTIA – The Wireless Association ®

CTIAisaninternationalnon-profitmember-ship organisation that has represented the wireless communications industry since 1984. Membership in the association includes wireless operators and their suppliers, as well as providers and manufac-turers of wireless data services and products. The association advocates on behalf of its members at all levels of govern-ment. CTIA also coordinates the industry’s voluntaryeffortstoprovideconsumers with a variety of choices and information regarding their wireless products and services. This includes the voluntary industry guidelines; programs that promote mobile device recycling and reusing; and wireless accessibility for individuals with disabilities. Visit www.ctia.org

Celcom Axiata

Celcom is Malaysia’s leading mobile tele-communications provider with over 12 million customers. Established in 1988, it has the widest national 2G and 3G networks, covering over 98 percent of the population. Celcom, that is also the country’s number one mobile broadband provider, is moving towardsofferingintegratedmulti-accessand multimedia services that are aligned with consumer behaviour and demand. Celcom is part of the Axiata Group of Com-panies, one of the world’s largest telecom-munications companies, with more than 180 million customers across 10 Asian markets. Visit: www.celcom.com.my.

Index Of Contributor Companies

APPENDIX


Cloudmark

Cloudmark is the global leader in messaging security solutions, delivering the industry’s fastestandmosteffectiveprotectionagainst the widest range of messaging threats to mobile operators, Internet Service Providers and social networks. Cloudmark simplifiesandadvancesthemanagement of messaging abuse, thereby increasing network utilisation and reducing infrastruc-ture costs. Protecting 1.8 billion subscribers for the world’s largest carrier networks, including AT&T, Verizon, T-Mobile, Comcast, MySpace, NTT, Swisscom and Time Warner-Cable, Cloudmark currently scans 15 percentoftheworld’smobilenetworktraffic,15percentoftheworld’sInternettrafficand50 percent of the world’s social networking traffic.Visit:www.cloudmark.com

Globe Telecom

Globe Telecom is a full-service telecommun-ications provider in the Philippines, with its own international gateways, cable landing stations,domesticfibrebackhaulandanationalaccessnetwork(data,fibre,3G/HSDPA).Itoffersarangeofwirelessandwireline voice and data services (including Mobile GSM/ 3G/ HSDPA, broadband, PSTN Fixed lines, IDD, NDD, Corporate Data, IPLC andInternet).Globeoffersthemostcompre- hensive coverage for international roaming, with more than 600 partner networks worldwide. Visit: www.globe.com.ph

GSMA LA

GSMA Latin America (GSMA LA) has four Operator Expert Working Groups covering Billing and Roaming (BARG), Regulatory (REGU), Technical and Terminals (TECT), and Security and Fraud (SEGF) issues in the region. GSMA LA hosts two key plenaries a year, featuring working group sessions plus workshops and seminars on other key GSMA initiatives. In Latin America, the GSMA member companies serve over 630 million connections, accounting for 95% of the total mobile region’s connec-tions. Visit: www.gsma.com/latinamerica

GSMA MMU

GSMA’s Mobile Money for the Unbanked Programme help mobile operators and thefinancialindustrycollaboratetodeliveraffordablefinancialservicesthatprovidesafety, security and convenience to millions of previously unbanked customers. Since the Mobile Money for the Unbanked programme was founded, the industry has increasedinsizefive-fold,withover100mobile money deployments active in the world today – 80% of which are in develop-ing markets. The GSMA represents the interests of mobile operators world-wide,spanning more than 220 countries, and uniting nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosys-tem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment

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organisations. Visit: www.gsma.com. To learn more about the Mobile Money for the Unbanked Programme Visit www.mmublog.org

Informa Telecoms & Media

Informa delivers strategic insight, key market data and forecasts to help clients make better business decisions for more than 25 years. It counts 65 analysts in nine research officesofferingpragmaticadvicetotheleading global operators and builders of com-munications infrastructure. Its chief objective is to be accessible, responsive and connected both to the markets it serves and the clients it assists. Visit: www.informatandm.com

Korea Telecom

KT provides telecommunication services including local, long distance, and interna-tional calling, satellite communication, data transmission, and wireless telephone services in South Korea. The company also offersnetworkportalandhigh-speedInternet access, and has the largest share of the South Korean local telephone and high-speed Internet business. KT is using its broad capabilities to lead the global market in an era of convergence that sees the boundaries blur between voice and data, wired and wireless, and broadcasting and telecommunications. Visit: www.kt.com

Mavenir Systems

Mavenir delivers Converged Voice, Video and Messaging solutions, based on the mOne™ Convergence Platform, to wireless operators globally. Mavenir’s value-added IMS and cloud-based solutions enable the transformation of legacy core networks by offeringcompellingnewservicessuchasVoLTE and RCS, and by providing uniquely innovative solutions to address the challenge of migrating subscribers and services to 4G. These solutions are deployed by customers in both North America and Europe. Visit: www.mavenir.com

MediaFriends

MediaFriends enables the world to communicate more freely by breaking down barriers of device compatibility through its patent pending Mobile-to-IP and Multi-Screen Messaging technology. HeyWire™, the company’s real-time social messaging hub, empowers consumers worldwide to connect with each other in better ways using mobile messaging (SMS & MMS), IM, Facebook and Twitter on virtually any Internet enabled device. Visit: www.mediafriendsinc.com

Metros PCS

Dallas-based MetroPCS Communications, Inc. (NYSE: PCS) is a provider of no annual contract, unlimited wireless communica-tionsserviceforaflatrate.MetroPCSisthefifthlargestfacilities-basedwirelesscarrier


in the United States based on number of subscribers served. With Metro USA(SM), MetroPCS customers can use their service in areas throughout the United States covering a population of over 280 million people. As of September 30, 2012, MetroPCS had approximately 9.0 million subscribers. For more information please visit www.metropcs.com.

Money2020

Money2020 Expo is a new conference focused on emerging payments and next generationfinancialservicesthatbringstogetherinnovatorsfromfinancial institutions, mobile, retail and advertising to discuss issues around mobile money and the customer experience. Money2020 was co-founded by industry veterans in payments and mobile to bring together all stakeholders. Visit: www.money2020.com

Neucom Solutions

Neucom Solutions provides consulting services to the telecom sector focusing on areas including: business planning, commercial management, partnering, change management, business transformation and new market entry strategy. Visit: www.neucom.eu.com

PCCW

PCCW is the largest and most comprehen-sive provider of communications services in HongKong,offeringaward-winninginnova-

tionespeciallyinNextGenerationfixedlineservices, broadband pay-TV and Internet access, IP-based business services, 3G & 2G mobile and public Wi-Fi services, and large-scale IT solutions. Visit: www.pccw.com

Qatar Telecom

Qtel provides a full range of telecommunica-tions services in Qatar and across its presence in 17 countries. The company offersleading-edgeproductsandservices,and enjoys partnerships with many of the world’s leading telecommunications players. Qtel has invested over US$3.2 billion in Qatar’s technology infrastructure and has developed leading-edge Fibre and 4G Solutions, as well as an exciting portfolio ofmobile,fixed-lineandentertainmentservices. Qtel is part of the Qtel Group, a leading international communications company,withasignificantpresencein the MENA region and Southeast Asia, and a consolidated customer base of 83.7 million as of June 2012. Its companies include Indosat, Asiacell, Wataniya, Nawras, Nedjma and Tunisiana. Visit: www.qtel.qa

SAP

As the market leader in enterprise applica-tion software, SAP (NYSE: SAP) helps com-panies of all sizes and industries run better. Frombackofficetoboardroom,warehouseto storefront, desktop to mobile device, SAP empowers people and organisations to work togethermoreefficientlyandusebusiness

238

insightmoreeffectivelytostayaheadofthecompetition. SAP applications and services enable more than 195,000 customers to operateprofitably,adaptcontinuously,andgrow sustainably. Visit www.sap.com.

SAP Mobile Services

SAP Mobile Services is the global leader, in enabling mobile information services for mobileoperators,financialinstitutionsandenterprises. It provides customers the widestofferinginSMS,MMS,GRX,IPXInteroperability and innovative mobile con-sumer engagement services. SAP Mobile Services processes more than 1.8 billion messages per day reaching 900 operations and 5.5 billion connections around the world visit www.SAP.com

Singtel

The SingTel Group is Asia’s leading commu-nications group, providing a wide spectrum of multimedia and infocoms technology (ICT) solutions, including voice, data and videoservicesoverfixedandwirelessplat-forms. Headquartered in Singapore, SingTel has more than 130 years of operating expe-rience and has played a pivotal role in the country’s development as a major commu-nications hub. As at 30 June 2012, the Group serves 462 million mobile customers around the world. The Group is structured along three key businesses: Group Consumer, Group Digital L!fe and Group ICT. Group Consumer brings together the

Group’s consumer-related functions and focuses on setting new benchmarks in customer experience. Visit www.singtel.com

Telecoms.com

Telecoms.com is the go-to website for anyone and everyone in the global telecommu-nications industry. Visit. www.telecoms.com

Telefónica

Telefónica has one of the broadest geo-graphic footprints of any operator. It is present in 25 countries and provides tele-communications services to over 300 million customers in Europe and Latin America. In addition, through its industrial alliances, which are unique in the sector, it shares a joint customer base of more than 700 million, 10 percent of the world’s popu-lation. Telefónica operates with four brands: Telefónica, Movistar, O2 and Vivo. Visit: www.telefonica.com

textPlus

textPlus is the world’s leading mobile com-munication destination. It’s where the world goes to say hello - anytime, anywhere, anyplace. Over 35 million people worldwide use textPlus to text and talk for free or extremely low cost. textPlus works on multiple platforms and devices including iOS, Android, Symbian and Windows Phones. The company was founded in 2007 andbackedbyleadingVCfirmsMatrix


Partners, GRP Partners, and Kleiner Perkins Caufield&Byers.Visit:www.textplus.com.

TIM

The Telecom Italia Group is Italy’s leading ICTenterprise,activeinfixed-lineandmobile telecommunications, the Internet andmedia,officeandsystemsolutions,research and development. The Group alsohasasignificantpresenceinLatinAmerica. Group growth is driven by providing leading-edge infrastructure, the latest technology, a customer centric organisational model and the capabilities to cater to the needs of each customer cluster. Visit: www.tim.it

The 3rd Degree

The 3rd Degree was founded in 2001 to bring enterprise class, real-time research capabilities to the mobile platform. The platform quickly extended to become a full mobile CRM solution delivering highly scalable, secure, reliable mobile services including mobile research, marketing, loyalty, mobile web site builder and language analysis.TodaySynaptamCRMoffersaunifiedmobileplatformutilisedbymobileoperators, FMCG companies, research agencies, the government, banks and retail environments worldwide. Visit: www.the3rddegree.co.uk

Urban Airship

Urban Airship is the unrivalled leader in push messaging, delivering billions of messages per month with unparalleled speed and scale for leading brands such as CBS Interactive, Groupon, Soundtracking, Walgreens and Warner Bros. Urban Airship enables these brands and 65,000 other cus-tomers to engage consumers directly on their mobile device home screens with pre-cision-targeted mobile messaging. Com-pletemobileengagementsuitesoffereasyandeffectiveend-to-endmanagementofthe push messaging process from customer and location targeting, to automation and delivery including message composition, instant in-app landing page creation and analyticstooptimiseeffectiveness.Visitwww.urbanairship.com

Yankee Group

Yankee is the preeminent research and advisoryfirmequippingcompaniestoprofitin a mobile world. The core of its content is proprietary research and analytics on the attitudes, behaviours and usage patterns of mobileusers.Basedonthisresearch,thefirmprovides a range of actionable data, insights and advice. Visit: www.yankeegroup.com

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Mobile Operator Guide 2013

Editorial Direction

Carmel Coscia Diarmuid Mallon

Project Managers

Shahzia Banth Jean Loh Matthew Sims

Design

Boing Design Paris [email protected]

Developed and produced

Peggy Anne Salz, Publisher & Chief Analyst

MobileGroove www.mobilegroove.com [email protected]

Amanda Roulstone Assistant to Peggy Anne Salz www.dragonvirtualassistants.co.uk Amanda@dragonvirtualassistants.

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