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2 2011 Stratecast. All Rights Reserved.February 2011

TABLE OF

CONTENTS

MEETING CUSTOMER NEEDS SERVICE OFFER

PERSONALIZATION AND PARTNER COLLABORATION

Executive Summary 3

The Evolving Communications Marketplace 4

Business as Usual is Almost Dead History is Like That 4

Life Changing Services are a Critical Next Step for Business Users andConsumers 5

Large Enterprises Are Changing Too 7

What CSPs Need To Do To Remain As Industry Leaders 8

A Digital Marketplace That Really Works Personalization is the Key 9

Enabling Customer Satisfaction One Size Doesnt Fit All 11

User Device and Network Capacity Upgrades Enhance Customer Usage 12

Cloud Delivered and Network-Based Value Added Services 13

Flexible Data Usage and Payment Structures Accommodate New Service

Introduction 13

Customer Engagement with New CSP Business Models 15

New Business and Operations Requirements 16

How Change in Business Strategy Yields the Right Results 19

The Last Word 21


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3 2011 Stratecast. All Rights Reserved. February 2011

MEETING CUSTOMER NEEDS SERVICE OFFER

PERSONALIZATION AND PARTNER COLLABORATION

EXECUTIVE SUMMARY

The communications industry is very different now as compared to its early beginnings.

Yet, the converged communications marketplace continues to evolve through the

collaborative efforts of not just Communications Service Providers (CSPs) but key

players from related industries including the computing IT, entertainment, media and

advertising sectors. This evolution is driven, to a large degree, by: advances in fixed and

mobile network technology; continued evolution of user devicesespecially mobile

devices; progress within the cloud services market; acceptance of social networking by

both business and personal users; and an exploding mobile application market. It is

changing every aspect of life for those that engage it directly and in a more subtle

manner for those that dont.

Of most significance is the realization that CSPs are no longer the end-to-end provider of

what customers want. Alluring new services for both business and consumers now

involve the resources from multiple suppliers working in collaboration with the CSP

community to define, deliver and support the right stuff at the right time. But simply

bringing service components together isnt the full story either, as modernized CSP

business and operations support systems will play a significant role towards the offer of

multiple service options, payment plans and usability controls designed to meet

practically any service configuration and customer request.

Change in a CSPs business strategy to include these options is now a must, since a

critical marketing opportunity for the CSP global community is finally here. CSPs now

have a golden opportunity to increase customer loyalty by using flexible service definition

and personalization features to deliver what customers want.

To capitalize on this opportunity, a number of business and operations management

functions must change to properly define new service offers and to update service

options in minutes, hours or days, as market conditions dictate. From a customer

perspective, it means delivery of service options in a pick and choose fashion and

pricing plans with flexibility to offer bigger discounts according to factors such as

advertising involvement, number of selected service options, usability controls, external

partner-provided components and competitive pressures within a specific location. It also

means orchestrating complex service orders, with both internal and external parts, so

everything comes together at the right time and in the right sequence. Finally, it means

defining market pricing, collecting customer revenue, and associating revenue share

Of most significance the realization thatCSPs are no longer thend-to-end provider what customers wantAlluring new servicesfor both business andconsumers now involthe resources frommultiple suppliersworking incollaboration with thCSP community todefine, deliver andsupport the right stufat the right time.


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4February 2011 2011 Stratecast. All Rights Reserved.

amongst suppliers in near real-time, as competitive pressures increase and customer

service options expand.

This report will explore each of the areas just described, namely: what the

communications market is today; what the key business opportunities are that CSPs can

engage in now to increase customer loyalty; and what the longer-term role is that CSPs

should strive to fulfill as market evolution continues. It will provide numerous examples

about what operators in various geographies have found to work well for their customer

base already, and define several operations and business support systems requirements

to enable such change in business strategy for the future.

THE EVOLVING COMMUNICATIONS MARKETPLACE

For anyone who has experienced the convenience that 3G, and now 4G, mobile

technology affords, life today is very different from when communications werefacilitated using a voice and text messaging package with an early generation 2G number

phone. Todays mobile communications environment, blended with smartphone features

and combined with access to an increasing array of applications for business and leisure

use, is now the norm. From a customer perspective, todays massive maze of technology

brings to mind several key questions that beg to be answered such as:

What got us to this point? Why is an affordable mobile data plan, combined with applications and content, so

important for CSPs and the customers who use them?

How are large enterprises affected by market evolution? What should CSPs consider if they are to remain as leaders in this changing

environment?

How does a CSP maintain customer loyalty when the market offers so many choices?Business as Usual is Almost Dead History is Like That

Until just recently communications services were sold the same way for the last 150

years. The business of CSPs was to bring the best network technology to the publics eye

and keep them excited about it. In about 2005, a new mantra began to form around

support for the customer rather than just the sale of technology. At the same time,mostly due to customer demand, the communications sector started to blend with key

parts of other industries, including computing IT, media, entertainment and to a lesser

extent advertising. All of them now contribute significantly, but in different ways, to what

is fast becoming the convergent communications marketplace.

This evolutionary collaboration wasnt entirely planned, although key decisions early on

to build next generation networks using the IP protocol certainly helped. It is highly

likely that if a dedicated effort had been made in times past to bring this marketplace

together, there would still be committees arguing now over the right architectures (and

Support for thecustomer, from a purelybusiness perspective,with focus onaddressing end-to-end

customer problems, isstill a major industry-level Achilles heel.


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there are) to make everything interconnect in the best technological fashion. Few if any,

would have discussed the most cost effective manner or the most operationally effective

way to generate the most revenue to satisfy the greatest number of customer needs.

Support for the customer, from a purely business perspective, with focus on addressingend-to-end customer problems, is still a major industry-level Achilles heel.

Life Changing Services are a Critical Next Step for Business Users and Consumers

Technology evolution for the sake of doing something better and faster, and to a lesser

extent cheaper, will continue in the months and years ahead. However, it is mind-

boggling to see the level of business opportunity that is available now for those who

know how to monetize technology the smartest. In fact, we as an industry are at a

crossroads involving more innovative powers at our disposalcollectively from our

enhanced abilities to share informationthan from the combined discoveries of the last

two centuries. The challenge lies in using these powers to better enable and moreeffectively create an environment of business opportunity geared to support the needs of

customers in both mature and growth markets.

While not perfect, the communications marketplace now offers a variety of capabilities

that many thought would never come together. Shown in Figure 1 below, the

collaboration and competitive cooperation of the convergent communications

marketplace has led to a new industry mindset designed to deliver life changing

services for consumers and business customers.1 These service packages come in multiple

varieties and combinations, with the current triple and quad play offers the most

common in some markets, and very specialized content-based data plans in others. They

are differentiated through a CSPs ability to uniquely provision, bill for and support suchservices.

We as an industry ara crossroads involvinmore innovative powat our disposalcollectively from ourenhanced abilities toshare informationthan from the combidiscoveries of the lastwo centuries. Thechallenge lies in usingthese powers to betteenable and moreeffectively create anenvironment of businopportunity geared tsupport the needs ofcustomers in bothmature and growthmarkets.

1 Customer life changing services are defined by Stratecast as any combination of network capabilities, downloadablecontent, cloud-based applications, and user device features for addressing a variety of lifestyle preferences tied to business,social or personal interests. These complex offerings can involve a number of capabilities, alone or together. They arefacilitated today, especially for the mobile world, through network technology advances and user device evolutionsmartphones and netbooks. They apply to both consumers and business customers.


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Figure 1

Life Changing Services: People Want Things That Make Life Better

For example, customers who have experienced interactive video, any number of

applications for advanced mobile devices, voice-based web search, mobile banking, mobile

TV, remote medical device monitoring, and distance learning say that, compared to the

way things were just a few years ago, these services have indeed made life better. This is

most recently evidenced by the rapid increase in data usage traffic on both fixed and

mobile networks as users and enterprises alike take advantage of traditional voice and

text services, along with more advanced capabilities including mobile applications, user-

generated and studio-produced video, interactive entertainment, and now cloud-based

applications for both personal and business consumption. But what lies ahead?

Services that work well now, will see enhancements ahead to keep customer appeal

fresh. They will be enabled by many factors such as technology change at both the

network and user device level, evolving regulations, service options from over-the-top

competitors that used to be the exclusive domain of network operators, advances within

the virtual services (cloud computing) market, and further adoption of social networking

functions by business customers and consumers. Finally, other effectiveness

improvements and customer services that may not be available now will become such

before long.

In a different light, services offered in some evolving markets today will be made

applicable in various mature markets in the coming months. For example, mobile banking

and payments servicescommon in Africa, India and, to a lesser extent, in SE Asiaare

seeing heightened interest from CSPs in both North America and Europe. In like manner,

services designed for initial introduction in mature markets, such as interactive

entertainment or downloadable content, are spreading into many emerging markets in

response to customer demand.

Customer life changing services are any combination of network capabilities, content, anduser device features for addressing customer preferences defined by business, social or

personal interest needs.

Converged NetworkResources

+IT Databases &Applications

IP

PSTN

Mobile

Network Connectivity

and and =

Life Changing servicesfor consumers and for

business customers in

all industries:

Education

Government

Financial Services

Retail

Manufacturing

Transport & Logistics

Insurance

Healthcare

Hospitality Services

Public Services

Others

Applications & Content

Netbook

PC

User Devices

Tablet

Smartphone

Source: Stratecast

Services offered in someevolving markets todaywill be made applicablein various maturemarkets in the comingmonths. For example,mobile banking andpayments services

... services designed for

initial introduction inmature markets, such asinteractiveentertainment ordownloadable content,are spreading into manyemerging markets inresponse to customerdemand.


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Large Enterprises Are Changing Too

With global expansion through organic growth and acquisition, most large enterprises

now rely on computing capacity, data storage and application functionally deliveredthrough a wide area network (WAN) uniquely defined for each organizations global

presence and business requirements. In effect, this is what public and private clouds are

all about.

Use of life changing services such as telepresence conferencing, video calls, remote data

storage, and off-site business applications, are defining a growing number of trends within

this elite group of CSP customers. These trends impact the core of any corporate IT and

network infrastructure including application performance, network capacity needs and,

ultimately, business efficiency. They are:

Data Center Consolidation Enterprises are consolidating branch-level datafacilities into regionally or centrally located data centers as a way to cut costs andsimplify management. With fewer applications residing on the users siteor even in

the users countrymore applications are accessed via the WAN. The increased

distance can cause noticeable degradation in latency-sensitive applications, especially

with networks spanning one or more continents.

Network Convergence and Policy Control MPLS technology allows theenterprise to converge multiple traffic typesvoice, video, data of varying

protocolson the same physical pipe, rather than across separate networks for each

kind of traffic. This enables enterprises to better and more cost-efficiently utilize

bandwidth. However, it also creates a situation where various traffic types are vying

for the same physical bandwidth. Without an effective customer-centric policyreference and enforcement strategy, to identify and prioritize traffic based on

application usage, business priority, and customer type, application performance will

likely suffer.

Increase in Remote Workers and Partner Communities The headquarters-branch corporate model has given way to the corporation without boundaries, in

which global workers and partners require access to behind-the-firewall applications

from anywhere, via any device especially mobile devices. Enterprises need tools to

help them to deliver an acceptable (if not yet fully consistent) experience for every

user, regardless of location, device, or access connection.

Explosive Increase in Consumption of High-Bandwidth Applications Streaming media, VoIP, telepresence conferencing, and collaborative applications

consume an increasingly large amount of enterprise bandwidth. The fastest growing

use of WAN facilities is for personal web-surfing, including bandwidth hungry video

sites such as YouTube, sporting sites, and social networking sites. But the same logic

can be applied to different corporate sites performing different corporate functions,

such as headquarters vs. an R&D facility vs. remote sales office. The growth in traffic

speaks to the need to manage user priorities according to a dynamic corporate

hierarchy defined by business need and not just management status.


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As a result of these trends, enterprise IT departments are seeking solutions that will

allow them to send more mission-critical traffic over their global networks, faster and

with high quality, without investing in additional bandwidth. They are looking for

expanded CSP service support functions to keep service quality high and applicationavailability at the same level (or better) to what internal data center operations could

deliver in the past.

What CSPs Need To Do To Remain As Industry Leaders

Industry pundits, globally, have been shouting about the monumental transformation

which the new communications marketplace has undergone and will continue to go

through for the foreseeable future. There are a growing number of business drivers, as

shown in Figure 2 below, that have combined to move the 150-year-old CSP technology

sales model into new directions. For example, the traditional fixed-line voice or mobile

service strategy has been replaced with multi-technology, multi-service bundles includingtriple-play (voice, video and data) and quad-play (fixed line voice, broadband internet,

mobile and IP/Cable TV) offers. But that was just the beginning.

Figure 2

New Business Models and Life Changing Services are Todays Business Reality

Customer Service Enablers

Broadband Connectivity

User Device Availability

Online Storage and Security

Network Services

Customer Definable Controls

Integrated Business Solutions

Interactive Content

Embedded Advertising

Social Networking

Others

Traditional Fixed or Mobile Access

Integrated Multi-Technology as Triple or Quad Play

Interactive Services

Target Marketing

Advertising Sponsorship

Multi-Industry Collaboration

Machine-to-Machine and Machine-to-Human Interactions

Market Drivers of Change

New Business Models Life Changing Services

Source: Stratecast


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9 2011 Stratecast. All Rights Reserved. February 2011 9

Interactive functions such as external content sources and advertising now provide

enhanced value and solution variety. Service delivery platforms bring multi-technology

and value added service options to the fray, while advanced business and operations

support capabilities supply elements of customer-enabled control. Combined, thesebusiness enablers now provide a means for CSPs to implement business models that

include more dynamic capabilities and customer involvement than traditional voice and

data access services could ever do. In some cases, this creates dependencies tied to the

analysis of customer service usage data to better fit new solution offers with customer

expectations. It also means that customers now have the opportunity to define what

components constitute a service, the levels of control over how a service will work,

when or where it will work, and under what sets of conditionsfinancial and

otherwisethe services are allowed to work.

CSPs must go beyond offering services based mostly on a collection of technology silos

such as triple-play or quad-play bundles. Increased customer interest in life changingservices implies that new business models are now a must, to augment shrinking levels of

traditional services revenue and to better address customer satisfaction, especially in

highly competitive markets. It also means that as business evolution accelerates, CSPs

that can concurrently support multiple business models will ultimately gain an

upper hand in the race to keep customers satisfied and churn rates as low as

possible.

A Digital Marketplace That Really Works Personalization is the Key

Success in todays converging services marketplace is about meeting the end-to-end

needs of customers, not just in the sale of network-enabled technology. Solving customerproblems breeds loyalty and increases customer confidence, even when many service

options may not be offered at the cheapest price available. End-to-end customer-focused

solutions certainly apply at the business customer and enterprise level, where many are

looking to incorporate mobile services into the goods they provide. It also applies at the

consumer level, as long as innovation keeps delivering new service options that

customers like with pricing at levels they will accept. Accomplishing both requires CSPs

to work from a retail mindset in catering to not just enterprise customers but also to the

needs of individual consumers.

Consider how the events of June 2007 significantly changed the industry. The first touch-

screen mobile user device came out of nowhere to win over the minds of consumers. Itcontinues to do so today with several smartphone and tablet PCs. What made it such an

overnight sensation?

Touch screen technology gives customers the feeling of control by simplifying the human-

to-technology interface. For many, this provides flexibility and stimulates a desire to try

new things, which often results in higher levels of spend. It energized a weak mobile app

industry at the time, to captivate customer attention the way interactive gaming drove up

demand for high speed fixed-line bandwidth. Today, as the mobile app business grows, it

CSPs must go beyondoffering services basemostly on a collectioof technology silos suas triple-play or quadplay bundles. Increascustomer interest in lchanging servicesimplies that newbusiness models arenow a must, to augmshrinking levels oftraditional servicesrevenue and to betteraddress customersatisfaction, especiallin highly competitivemarkets.


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fuels the need for better user device technology and the cycle continues. The element

of personalization will continue to play a prominent role in the drive for market

expansion and customer satisfaction.

There are potentially other wow factors making their way to a mainstream customer

audience, as shown in Figure 3 below. These include cloud-based business applications;

evolved business and consumer mobile downloads; integrated utilities control or smart

metering; remote healthcare monitoring; live textbooks, distance learning and

collaborative discovery; telemetry services associated with the automobile industry; and

integrated hospitality services, to name a few.

Each of these industries are designed to deliver a continuous flow of life changing service

options, with the potential to impact the customer as forcefully as anything that has

happened in the past, including the most recent advances in mobile user device

technology. Business success will be measured in this environment by how well a CSP can

bring such components together in a customer-appealing manner; how quickly new

service options can be implemented; how simply they can be displayed in a virtual online

store; how flexibly they can be priced; and how easily they can be supported when the

customer needs help.

Figure 3

The Digital Marketplace Involves Personalization and Customer Focus

Stratecast believes the next wave of industry growth in the converged communications

marketplaceor, more characteristically, the next generation digital marketplacewill

come from services that use the capabilities of many key enablers to address customer

demands. The most significant are:

Touch screentechnology givescustomers the feeling ofcontrol by simplifyingthe human-to-technology interface.For many, this providesflexibility andstimulates a desire to trynew things, which oftenresults in higher levelsof spend.

Customer Life-Changing Services Begin

2011+ Personalization The Age of Business Opportunity. Enabledthrough advanced user device evolution, high-speed broadband access,cloud services, and new CSP business models designed to satisfy end-to-end customer needs. Supported through f lexible service creation, multi-industry collaboration, a CSP retailer mindset, flexible order orchestration,customer usage analysis, predictive intelligence, integrated customersupport across all channels and technologies, real-time rating & charging,and customer self-care.

Apps

Personalization Enables the DigitalMarketplace

RegulatoryTV, Internet, Fixed and Mobile Phone

Triple/Quad Play Services

2009 Customer Centric User Experience. Enabled by userdevice evolution, broadband network technology, changingregulations, app development, and some cloud services. Nowsupported through service bundles, downloadable apps, user-generated video, studio-produced entertainment, self-serviceportals, and the rise of social networking.

Multi-industry Collaboration

PublishingHealthcare

Education Public

Services

Retail

Utilities

Transportation

Cloud Services

Vending

2011+2009

Evolving Business and Consumer Apps

Source: Stratecast


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An always on, always available broadband connection from any user device. Access to digital content or durable goods from external suppliers in multiple

industries.

Ability for customers to define service packages from a group of components to bestmeet specific needs, then allow change to the assembly of these components into a

new service subscription at any time.

Options for customers to define multiple service definitions to fit their needs, muchthe way user profiles are set up on a shared user device today.

First-hand control over how such services can be consumed or paid for according tocalendar definitions or financial restrictions.

Customer self-care capabilities, through a fixed or mobile connection, to meetessential needs tied to service ordering, technology issues, and/or billing concerns.

Customer care capabilities that cover all technology silos within a single system thatmay define a service package or user profile.

A persistent memory of customer ordering or inquiry details across differentcustomer access channels including an online virtual store, retail sales outlet, or

customer call center. Allow customers to start an ordering or trouble reporting

session in one channel and finish in another.

Flexible pricing models to capture the needs of all customers in all markets, with theability for customers to pick-and-choose the payment options that best meet their

individual needs and service selections.

Dynamic bandwidth allocation combined with flexible spending control to providecustomers with the greatest value for the best price.

CSPs have a bounteous opportunity to seize the moment by adding to this list of raw

ingredients flexible business support systems (BSS) and operations support systems

(OSS) that can enable service offers comprised of not just network-based features or

digital content, but appealing usability functions. This creates opportunities that can help

them to fully embrace a retail mindset, even as the sale of technology continues to be the

dominant source of CSP revenues today. Through this level of interactive involvement,

personalization offers are created; and customer willingness to stay with organizations

that innovate to address their needs increases dramatically.

ENABLING CUSTOMER SATISFACTION ONE SIZE DOESNT FIT ALL

While much can be said about customer life changing services and a digital marketplace,

there are several CSPs that have already embraced some parts of a customer-centric

approach to business. There are several examples to point to, which can be classed

around four general categories:

User device and network technology enhancements

Through this level ofinteractive involvemepersonalization offerare created; andcustomer willingnessstay with organizatiothat innovate to addrtheir needs increasesdramatically.


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Value added services from network capabilities and cloud providers New services enabled from flexible billing and pricing plans Customer engagement in business models that include more than network access

functions

User Device and Network Capacity Upgrades Enhance Customer Usage

Through touch screen technology, mobile user devices such as smartphones and tablet

PCs make the human-to-technology interaction more easily consumable. Network

infrastructure updates have also enabled mobile broadband connectivity that starts to

rival some fixed-line connections. As a result, the user experience is better today than

even three years ago, due to faster video imaging, improved internet sessions and

interaction with cloud-based service offers. This combination now enables the previously

nascent mobile application market to flourish, and has allowed CSPs with advancednetwork solutions to offer value added services (VAS) that hold high customer appeal .

Examples enabled by better user device and network access technology include the

following:

Rapid Customer Uptake of a New User Device Model The initial marketintroduction of Apples iPhone 4G model in June 2010 netted the sale of over three

million devices in three weeks due to pent up customer demand for new video

features this model offered and the cult following the iPhone enjoys the world over.

This, in addition to the millions sold in three previous versions since the iPhones

initial release in 2007, when it changed the mobile user device world with an

advanced touch screen user interface.

First-Time Mobile Users in Parts of India and China Over the past 24months, first-time mobile users in both India and China experienced an internet

session through a mobile broadband connection. This has led to increased attention

in these markets to use mobile broadband as a business tool to bring consumers to

market and to empower all users to engage through social networking for both

personal and business opportunities. Such options involve location-based merchant

services, posting of public transportation schedules in very rural areas, and updates

to prices paid for agricultural items.

Network-Enabled Single Sign-on Service An operator in Indonesia introduceda single sign-on service more than 12 months ago for customers to gain network

access to all of the technologies it provides including dial-up, DSL, VDSL, mobile

voice and data (2G, 2.5G, 3G, and 3.5G), and Wi-Fi. Service packages can be defined

by the user in terms of a monthly pre-pay or post-pay billing, with any combination

of voice minutes and data volumes. The subscriber has full visibility to all subscription

parameters and transfer rates.

Corporate Adoption of New User Device Technology A large CSP in NorthAmerica is presently issuing Apple iPads to its 1,000+ sales force to give them instant

access to company-specific sales tools and product information. These devices will

This combination nowenables the previouslynascent mobileapplication market toflourish, and hasallowed CSPs withadvanced networksolutions to createservices that hold highcustomer appeal .


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likely expand the operators business strategy of planning and provisioning network

capacity at the point of sale, which it does today from its many sales offices.

Cloud Delivered and Network-Based Value Added Services

To meet on-demand business needs, the traditional definition for infrastructure as a

service (IaaS) was initially fulfilled by IT companies whenever on-line storage or short-

term computing capacity was required. IaaS service offers now extend to on-demand

network capacity needs from the capabilities of many CSPs at both a regional and global

level.

Mobile broadband access, through the advent of 3G and 3G+ technologies, has spawned

considerable advances within the third-party application development domain that

address business and consumer needs for nearly all industry sectors. Free or for-a-small-

fee user features and applications now cover a wide spectrum, with many offered through

the software as a service (SaaS) business model.

Going beyond popular app storeswhere, for example, the Apple app store offers

300,000+ downloadable applications for the iPhone, with specialized stores also focused

on the iPad and Macthere are many other cloud-based applications from a growing

number of over-the-top (OTT) providers. With the right technology capabilities, CSPs

can also deliver advanced services that rival or exceed what OTT providers can offer.

Examples from each category are:

Learn English Service in Bangladesh An operator recently introduced a learnEnglish in 10 minutes a day service for a very small fee, based on either a

subscription model or on a per-received basis. It generated a response rate at morethan 1000% above initial expectations of a few thousand subscribers.

Globally Available Google Translate Service This application allows users,with a mobile or fixed-line broadband connection, to translate words or phrases

from 58 languages to any other. The user inputs a line of text, or speaks a phrase

then specifies the language for which the translation is required. While

conversational speech is limited at this time to a very small number of language

combinations, Google continues to advance this for free service to any registered

Google user. The service is not dependent on the Android operating system.

Globally Consumed Business Subscription-Based Applications These havebeen in use in some cases for more than 10 years. For example, salesforce.comstarted in March 1999. Several others include: amazonservices, OneBiz, Skype,

SlideShare, Facebook, Microsoft, Averiware, WebEx, and Citrix.

Flexible Data Usage and Payment Structures Accommodate New Service

Introduction

Affordable voice calling and data plans have encouraged business customers and

consumers to utilize available network capacity to access applications, entertainment

sources and to engage through social networking. Convergent real-time rating &


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charging, coupled with dynamic provisioning capabilities and a flexible service creation

infrastructure, allow operators throughout the world to rapidly introduce competitive

new service offers.

Service models already implemented through BSS functions, such as real-time rating &

charging partnered with certain policy-based features include: pay-per-use combined with

multi-technology add-on (e.g. network connectivity with content or applications, data

storage, or advanced security); customer loyalty rewards; shared subscription services;

metering of certain flat-rate service options; fast track high bandwidth (e.g. pay extra to

have higher bandwidth for gaming or other intensely interactive services on a metered

basis); and pay and get others free. Other examples from various global operators

include:

Converged Data Services Metered Offers A large convergent CSP in NorthAfrica presently offers data services that involve the combined use of its fixed and

mobile environments. Customers can subscribe to a weekly or monthly renewable

data subscription, which includes a combined traffic volume for both fixed broadband

and mobile. There is no contract commitment. The data plan is capped at varying

levels of capacity with commensurate pricing. It is executed on a pre-pay and post-

pay basis, such that after a subscribed package runs out, or when roaminga pay-as-

you-go model goes into effect. It uses a default option with daily cap of a pre-defined

volume and price. This option is also offered to service subscribers with no active

data subscription. Subscribed data packages are automatically renewed at the end of

each billing period (monthly or weekly) unless the customer instructs otherwise

through an opt-out online option. In essence, this operator is counting every data

package a customer downloads and uploads regardless of access technology, be itfixed-line broadband or mobile data.

Weekly+ New Service Introductions A large, Latin American mobile operatorintroduced over 60 new services in 2010. Armed with a flexible rating and service

delivery platform, it introduces services at a premium price and then, over time,

lowers the tariff as competitors begin to duplicate its offer. To keep a high market

share profile and breed customer loyalty, this operator typically reduces the tariff

below any competitive offer until it becomes almost free or until the competition no

longer is willing to provide the same service. To keep competitors at bay, this cycle

is repeated on average at more than one service introduction per week. For example,

providing subscribers with free minutes of voice, a f ree monetary level of data usage,

and certain free video content in celebration of a special event such as a birthday or

anniversary. Similarly, offering free text messages, minutes of use at certain times

during a holiday, or providing pricing plan options that only allow access to a single

website such as Facebook. The goal of this operators marketing team is to define

(and refresh) as many service offers as possible to reach every customer or customer

group for both businesses and consumers.

Convergent real-timerating & charging,coupled with dynamicprovisioning capabilitiesand a flexible servicecreation infrastructure,allow operatorsthroughout the world torapidly introducecompetitive new serviceoffers.


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Customer Engagement with New CSP Business Models

Network technology advances and application innovation push customer interests to new

heights tied to social networking and cloud-based services. This has caused a permanent

redirection in the way people associate, from business-level telepresence to one-on-one

experience sharing. It has also motivated different industries to incorporate mobile

communications into their business endeavors. Specific examples are:

Real Time Social Networking Many in the Under 30 crowd throughout theworld stay in-touch through live updates of their social network profiles. Through

affordable mobile data plans, user behavior has been driven from a static words and

pictures environment posted occasionally on a blog site, to real-time video-based

experiences that incorporate user-generated content. This increases demand for

more network capacity, but customer willingness to pay for increased usage has hit a

plateau with some operators. In other individual examples, excessive usage has led to

bill shock stories that have rippled through the internet with very specific detail.

SE Asia Targeted Advertis ing and Real-Time Customer Response ASingapore-based bread and pastry bakery used a classic loss leader advertising offer

held over a 10-day period. During this marketing campaign, at approximately noon

each day, the bakerys marketing offer was sent to the supporting mobile operators

entire customer base that was in the vicinity of one of the bakerys many locations,

for any bun purchased at a price of $0.10 SGD. The 40% response rate for this,

which consisted of an MMS message carrying the voucher offer, was well beyond

initial expectations and at an unprecedented level for the advertising industry at

large. This response rate and unexpected upsell of other items including drinks,

pastries and more bread made the campaign a major success.

Throughout the campaign the bakery operator was also able to make adjustmentsto the advertising offer to better control voucher redemptions in response to clarity

complaints from responding customers. While the campaign only used mobile

messaging, this mobile operator provided an integrated media platform that could

have simultaneously provided the same ad across the Internet and via a local IPTV

channel for a more expanded advertising reach.

Eastern European Municipal Parking Payment via SMS In an EasternEuropean country, harsh winter conditions, coupled with aging and poorly kept

meters, made parking in core metropolitan areas difficult. Drivers often complainedabout the lack of accessibility to the meters during periods of increased snow

accumulation, and about malfunctioning ones. A mobile operator in this country

teamed up with several municipalities to deploy a parking payment system via SMS

instead of the traditional coin payment process. Under the new system, citizens now

pay for parking by keying in a short code and indicating the length of time they will

be parked. The resulting charge is either deducted from a subscribers pre-pay

account or, for post-pay subscribers, it appears on their next billing statement. The

most tangible benefit of the solution is increased convenience to park. For the

municipalities involved, parking revenue collection has increased, while operating


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costs have gone down from the elimination of parking meter maintenance and from

not collecting or processing coins.

Eastern Africa Mobile Money Agent Network A major mobile operator inthis east African country launched a mobile money transfer service in early 2007 that

has since expanded to approximately 14 million subscribers, covering several Af rican

and Asian countries. Recent announcements show further expansion of the service to

southern Africa. It is a branchless, mobile phone-based money transfer service that

allows users to deposit and withdraw money from a network of agents (that includes

airtime resellers and retail outlets). The service allows users to deposit money into

an account stored on their cell phones, to send balances using SMS technology to

other users (including sellers of goods and services), and to redeem deposits for

regular money. The service is presently supported by a vast network of agents, with

more than 20,000 agents working within the originating countrys boundaries.

NEW BUSINESS AND OPERATIONS REQUIREMENTS

The rate of change in network and user device evolution, combined with regulatory

transformation and partner/supplier collaboration, has created a new world of business

focus for the global CSP marketplace. Delivering life-changing services comes with a

price, the price of improved operations. Critical for long-term business success will be

flexible BSS and OSS that support the digital marketplace. This is especially important as

partner-provided service components take on a more significant role with captivating

customer offers, as the always on and always available network connection is taken for

granted. Key requirements include:

Customer Self-Service Portal To lower costs and improve overall customersatisfaction, provide a means to show customers a detailed view of each product and

service, according to their specific needs, with the appropriate ease of purchase

mechanisms that are common with merchandise procurement over the Internet.

There should also be a way to partition the portal to allow customers to quickly

arrive at the right levels of choice or industry segmentation. This will likely involve

some level of analytics to understand customer buying patterns, service usage insights

and customer care history to get customers to try new things.

Customer Data Awareness Allow the same data to be used within each accesschannel to address a variety of customer needs, including: purchase of new productsor services within an existing account; define trouble reports about network

connectivity; discuss solutions for user device problems or content not performing as

expected; answer account balance inquiries; understand what services are subscribed;

recommend potential new sales ideas based on customer demographics; and know

what the customers last purchased item was and when it occurred.

Meeting this need requires back office and front office systems to be integrated, with

a specific focus on the flow of customer information between systems. It requires the

customer self-service portal to be integrated with these systems to allow consistency

Critical for long-termbusiness success will beflexible BSS and OSSthat support the digitalmarketplace. This isespecially important aspartner-provided servicecomponents take on amore significant rolewith captivatingcustomer offers.


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between a customers online experience, informed communication with a care agent,

or knowledge-driven interaction with a retail outlet technician. Consistent customer

data between systems also allows, where possible, simplified levels of data analysis

for new product suggestions and recommendations.

Integrated Solution Offer Inventory It is imperative for CSPs to deliver allparts of a solution offer in the same manner regardless of the access method the

customer may use. Meeting this need is much more than integrated order

management for network connectivity, be it mobile services or fix-line broadband. It

implies the use of a common product and service catalog to: keep track of network-

based connectivity; digital content; partner-enabled adjunct services such as cloud-

based data storage, applications, and entertainment; and durable goods. It also

implies that the online sales portal will use the same customer data as the customer

care and retail outlet to deliver a consistent message. In the words of more than one

well-entrenched service provider with operations in multiple global locations: theday will come where, to customers, high-speed bandwidth (mobile or fixed line) will

be a given, and the price that they are willing to pay will be for solution

capabilitiesuser devices and content designed to address an end-to-end need

delivered over the next generation broadband network.

Provisioning and Activation of Complex Customer Orders Orchestrate theconfiguration of services involving internal network parameters and external partner

information so everything is delivered in the right order and at the right time. Most

provisioning, order management, inventory and activation systems are focused on

support for network connectivity services, which will likely be just a part of the more

complex offers that now come into play. In this new business climate, a horizontalorder orchestration platform is needed to bring network-specific data together with

external content, application, or computing resources. It will need to interface with

installed CSP network-facing systems and external partner inventory solutions.

Integrated Sales Channels Allow a customer to start a purchase within onemedium, such as a self-service portal where items can be placed in a virtual shopping

cart, and then finish the process at a retail outlet or with a customer care agent from

the point where they left off. Meeting this need is a defining opportunity for CSPs

today, especially if a common product catalog is used to keep the various sales

channels synchronized and common customer data shared across all business

processes. For example, it implies that the in-store experience will involve resources

thoroughly trained in the product concepts and device features that are described by

the online system.

Partner Management There are two levels of partner management: 1 theinteraction between a CSP and various partners for the sale of end-to-end customer

solutions, e.g. network connectivity combined with application functionality; and 2

the accountability of goods or services redeemed by customers through loyalty

program offers.


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Meeting both needs means that a common product catalog and usage tracking

database is critical to manage the use of each product offer, composed of its various

parts, so that a proper accounting of revenue share is possible as customers consume

(and pay for) such services. Additionally, if partner-supplied services, products ordurable goods are redeemable through loyalty program points, then the right levels

of compensation to each partner must be acknowledged. For example, if a customer

redeems points for a durable goods item, how is the supplier compensated for that

item? Will the loyalty program be the same for all customers: e.g. consumers, small

business, and enterprises? Are bonus points allowed for dedicated customers versus

occasional users?

Integrated Delivery Function Deliver to customers from whatever accesschannel a request may come, with the same products/solutions and with the same

delivery promises relating to time and price. Products that always provide high value

and customer appeal should also be prioritized in the order they sell. Sometimesspecial offers or pricing options will only be reflected by one channel, as a way to

direct customer attention, but when this occurs it must be a controlled exception.

To maintain uniformity, details of such offers must be routinely communicated to the

other channels.

Meeting this need implies a common product and services catalog; common customer

data; an integrated service fulfillment process linking each sales channel; and a

common order management function that interfaces with major partners. A non-

integrated systems and processes environment can leave most customers frustrated

when an offer through the virtual online store isnt exactly the same as what can be

had from a visit to the retail outlet, especially if there are differences in price,feature functions and/or availability. A quality customer experience requires a clear

and consistent view of all features, services and accessories, regardless of access

medium.

Real-Time Revenue Management Collection of customer usage transactions,real-time rating & charging when applicable, customer-enabled policy controls,

customer notification and/or bill presentment, and account balance management are

but a few of the strategic business support functions that must be addressed. Not

just rating internally-generated usage transactions after the fact, but managing

information on a real-time basis from external suppliers, control functions enabled by

the end customer, and data from multi-technology silos such as mobile voice, mobiledata, and fixed-line broadband.

Loyalty Program Provide a common record of customer purchases involving userdevices, network equipment, digital content, and durable goods for defining a

customer loyalty points program. Allow connection to other partner programs so as

to deliver maximum end user perceived value. Meeting this need requires not only a

common view of customer data between internal systems, but sharing of the same

data with loyalty program partners that a customer may opt in for, either from a

points accrual or points redeemed process. A common product and services catalog


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or a separate loyalty program tracking database will need to manage the point

values for each subscribed service and usage of such services. Additionally, it

requires a redemptions log for tracking partner-provided goods or services to end-

user customers.

Customer-Centric Service Assurance (CSA) Fault and performancemonitoring of CSP network nodes and computing databases is strategic for meeting

the demands for carrier-grade service reliability and availability. However, when

external partner products, applications and services are combined with network

capabilities to deliver digital marketplace services, they must be monitored from a

customer perspective, to manage service quality, especially for business customer and

enterprise services.

Meeting these needs means monitoring all sources of data from the customer user

plane, content and application plane, network service plane, and network connection

level. CSA summarizes information around multiple parameters to note usage

patterns, trends and service preferences often needed by account managers,

customer care agents, planning engineers, marketing, operations teams, and executive

management, to better meet changing market conditions

Business operations requirements, from a delivery and revenue management perspective,

are getting more complex as life changing services are offered through multiple sales

channels to gain mainstream acceptance. This, as plain voice or voice/data access offers

which are still very much a mainstay for the global CSP community todaylose their

market appeal as stand alone options.

HOW CHANGE IN BUSINESS STRATEGY YIELDS THE RIGHT RESULTS

SingTel was one of the first major operators to address the customer solution offering

and not just technology sale approach to business. In early 2006, the company began its

transformation from a pure carriage services operator to its current role as a provider

of content rich multimedia experiences for its consumers, and a one-stop solutions

provider for its business customers.2 The company further backed up this strategy by

announcing in September 2008 that it aims to be the leading Infocomm Technology

(ICT) solutions provider among telcos in Asia Pacific in five years.3

SingTel solutions for both consumers and, especially, business customers include: end-

user device (mobile handset, PC, or industry-specific business enablement tool) where

necessary; managed network connectivity across multiple technology domains; security;

applications specific to a business need, established mostly by over 300 third-party

developers working with SingTel; SingTel managed network services; SingTel professional

services; and SingTel first-tier application support. These end-to-end solutions are

Business operationsrequirements are gettmore complex. This, plain voice or voice/daccess offerswhichstill very much amainstay for the globCSP community

todaylose theirmarket appeal as stanalone options.

2 The quotes pure carriage services, content rich multimedia experiences and one-stop solution providers taken from

SingTel 2008/2009 Annual Report, p 9.

3 See SingTel press release SingTel Aims to be a Leading Regional ICT Solutions Provider in 5 Years, September 22, 2008.


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generally offered to business customers and consumers using a monthly no contract

Software as a Service (SaaS) model.

SingTel also provides business solutions within each of its target industries cutting across

education, healthcare, financial services, logistics & transportation, and the hospitality

sectors. The SaaS model continues to attract customers to SingTel business solutions.

This is accomplished by placing one-time solution implementation costs at a minimum for

most customer implementations and then doing a good job in meeting customer needs.

What isnt discussed are the added application functions that many independent

software vendors (ISVs) are providing (for additional fees) on top of the core

solutions defined for each industry vertical. These offered capabilities continue to

evolve for addressing customer demand and market need.

While the business solution concept seems to be a very good deal for the customer,

whats in it for SingTel, which must also provide first-level support for these solutions?

SingTel explains that its future hinges on delivering end-to-end solutions to various

business problems rather than simply delivering network connectivity which customers

can now obtain from any number of suppliers. SingTel is therefore willing to take on the

risk of working with smaller ISVs and branding end-to-end consumer and business

solutions (including connectivity) under its name.


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Stratecast

The Last Word

Todays world of business complexity should be cause for concern, especially for CSPs

that have managed the customer relationship for communications services over the last

150 years. That concern lies with a CSPs ability to maintain the customer relationship

by offering services with high appeal and then collecting as much revenue from those

services as the market will bear. Clearly, the industry has never stopped evolving, as

change now includes more factors than at any other time in the 550+ year history of

mass communications. But change also means that, as a converged communications

services marketplace, we are at the edge of the greatest opportunity to capture

customer attention and to generate new ways of doing businessdue to our ability to

share and use informationthan at any other time over the past two centuries.

Change will persist as long as technology evolves, regulations advance, and customer

demand continues. It is the very essence of why business innovation and market

evolution will forever redefine the face of the new communications marketplace. It is

also the reason why digital commerce is essential for future business success.

Stratecast believes that the major components for enabling this success include a new

way of thinking about business in general; augmenting the 120 year old technology sales

model and replacing it new ways to gain customer attention and trust.

This means generating new service offers that include network and partner based

capabilities in hours and days, not months, as in times past. It also means offering

customer choice, not in which end-to-end service plans they want, but in the order or

inclusion of the piece parts they want to make unique services a viable reality for them.

As the under 30 crowd will attest, defining and then using digital services or cloud-

based capabilities that nobody else has yet, is the level of social attention that all seek.

When many have something, it is no longer cool. Hence, personalization in user

device, service options, mobile applications, and even billing plans is the secret sauce

that many CSPs have sought for a long time.

With each age of communications industry evolution, our society has improved,

significant business efficiencies have came about, and innovation has progressed.

Quality of life for those touched by these technologies has centered on personal

productivity enhancements through time-saving and distance-eliminating capabilities.

Gains in business efficiency have been achieved from more effective transmission of

information, often leading to new industries and the redirection of others.

Innovation has rapidly progressed to a new awareness of previously unimagined

opportunity. Customers are waiting to engage with operators that embrace new

ways to do business and new ways to use technology to make their lives betteragain,

and again, and again.

Karl Whitelock

Director OSS BSS Strate

Stratecast (a Division of

Frost & Sullivan)

[email protected]
mailto:[email protected]:[email protected]


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