Meeting Customer Needs - Service Offer Personalization and Partner Collaboration

An Executive Brief Sponsored by Tecnotree

February 2011

TABLE OF CONTENTS

MEETING CUSTOMER NEEDS SERVICE OFFER PERSONALIZATION AND PARTNER COLLABORATION

Executive Summary The Evolving Communications Marketplace Business as Usual is Almost Dead History is Like That Life Changing Services are a Critical Next Step for Business Users and Consumers Large Enterprises Are Changing Too What CSPs Need To Do To Remain As Industry Leaders A Digital Marketplace That Really Works Personalization is the Key Enabling Customer Satisfaction One Size Doesnt Fit All User Device and Network Capacity Upgrades Enhance Customer Usage Cloud Delivered and Network-Based Value Added Services Flexible Data Usage and Payment Structures Accommodate New Service Introduction Customer Engagement with New CSP Business Models New Business and Operations Requirements How Change in Business Strategy Yields the Right Results The Last Word

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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 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.

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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 were facilitated 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?

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

Business as Usual is Almost De ad 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
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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 addressing end-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 mindboggling 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 more effectively 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 such services.

We as an industry are at a crossroads involving more innovative powers at our disposal collectively from our enhanced abilities to share information than from the combined discoveries of the last two centuries. The challenge lies in using these powers to better enable and more effectively create an environment of business opportunity geared to support the needs of customers in both mature and growth markets.

1 Customer life changing services are defined by Stratecast as any combination of network capabilities, downloadable content, 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 are facilitated today, especially for the mobile world, through network technology advances and user device evolution smartphones 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
User Devices Network Connectivity
Converged Network Resources

Applications & Content

Life Changing services for consumers and for business customers in all industries: Education Government Financial Services = Retail Manufacturing Transport & Logistics Insurance Healthcare Hospitality Services Public Services Others

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 services ... 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.

Smartphone
Mobile PSTN IP

Netbook

and

+
IT Databases & Applications

and

Tablet

PC

Customer life changing services are any combination of network capabilities, content, and user device features for addressing customer preferences defined by business, social or personal interest needs.

Source: Stratecast

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, usergenerated 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.

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Large Enterprises Ar e Changing Too With global expansion through organic growth and acquisition, most large enterprises now rely on computing capacity, data storage and application functionally delivered through 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 data facilities into regionally or centrally located data centers as a way to cut costs and simplify 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 the enterprise 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 policy reference 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 headquartersbranch 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 application availability at the same level (or better) to what internal data center operations could deliver in the past. What CSPs Need To Do To Re main As In dustry 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 including triple-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
Market Drivers of Change

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

New Business Models Life Changing Services

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

Source: Stratecast

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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, these business 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 changing services 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 customer problems 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 touchscreen mobile user device came out of nowhere to win over the minds of consumers. It continues 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 humanto-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 beyond offering services based mostly on a collection of technology silos such as triple-play or quadplay bundles. Increased customer interest in life changing services 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.

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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 Custome r Focus
Customer Life-Changing Services Begin
2009 Customer Centric User Experience. Enabled by user device evolution, broadband network technology, changing regulations, app development, and some cloud services. Now supported through service bundles, downloadable apps, usergenerated video, studio-produced entertainment, self-service portals, and the rise of social networking.

Touch screen technology gives customers the feeling of control by simplifying the human-totechnology interface. For many, this provides flexibility and stimulates a desire to try new things, which often results in higher levels of spend.

Personalization Enables the Digital Marketplace

Cloud Services Multi-industry Collaboration
Healthcare Publishing Retail Public Services

Education

Utilities Transportation

Vending

2009
Triple/Quad Play Services

2011+
Evolving Business and Consumer Apps

TV, Internet, Fixed and Mobile Phone

Regulatory

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

Source: Stratecast

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:
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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 best meet 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, much the 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 to calendar definitions or financial restrictions. Customer self-care capabilities, through a fixed or mobile connection, to meet essential needs tied to service ordering, technology issues, and/or billing concerns. Customer care capabilities that cover all technology silos within a single system that may define a service package or user profile. A persistent memory of customer ordering or inquiry details across different customer 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 the ability 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 provide customers with the greatest value for the best price.

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.

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
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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

This combination now enables the previously nascent mobile application market to flourish, and has allowed CSPs with advanced network solutions to create services that hold high customer appeal .

User Device and Net work 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 advanced network 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 market introduction 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 24 months, 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 introduced a 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 North America 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
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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 Adde d Se rvices 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 shortterm 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-smallfee 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 learn English 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 more than 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 have been in use in some cases for more than 10 years. For example, salesforce.com started 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 North Africa 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 postpay basis, such that after a subscribed package runs out, or when roaminga pay-asyou-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 it fixed-line broadband or mobile data. Weekly+ New Service Introductions A large, Latin American mobile operator introduced 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 free 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-time rating & charging, coupled with dynamic provisioning capabilities and a flexible service creation infrastructure, allow operators throughout the world to rapidly introduce competitive new service offers.

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Customer Engagement with New CSP Business Mode ls 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 the world 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 Advertising and Real-Time Customer Response A Singapore-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 adjustments to 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 Eastern European country, harsh winter conditions, coupled with aging and poorly kept meters, made parking in core metropolitan areas difficult. Drivers often complained about 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 in this east African country launched a mobile money transfer service in early 2007 that has since expanded to approximately 14 million subscribers, covering several African 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.

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.

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 customer satisfaction, 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 access channel to address a variety of customer needs, including: purchase of new products or 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

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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 all parts 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 networkbased connectivity; digital content; partner-enabled adjunct services such as cloudbased 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: the day 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 the configuration 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 horizontal order 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 one medium, 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 the interaction 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 or durable 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 access channel 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. Sometimes special 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 nonintegrated 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, mobile data, and fixed-line broadband. Loyalty Program Provide a common record of customer purchases involving user devices, 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 enduser customers. Customer-Centric Service Assurance (CSA) Fault and performance monitoring 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: enduser 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
The quotes pure carriage services, content rich multimedia experiences and one-stop solution providers taken from SingTel 2008/2009 Annual Report, p 9.
3 2

Business operations requirements are getting more complex. This, as plain voice or voice/data access offerswhich are still very much a mainstay for the global CSP community todaylose their market appeal as stand alone options.

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 cloudbased 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 Strategy Stratecast (a Division of Frost & Sullivan)
kwhitelock@stratecast.com

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Silicon Valley 331 E. Evelyn Ave., Suite 100 Mountain View, CA 94041 Tel 650.475.4500 Fax 650.475.1570 San Antonio 7550 West Interstate 10, Suite 400, San Antonio, Texas 78229-5616 Tel 210.348.1000 Fax 210.348.1003

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ABOUT STRATECAST Stratecast assists clients in achieving their strategic and growth objectives by providing critical, objective and accurate strategic insight on the global communications industry. As a division of Frost & Sullivan, Stratecasts strategic consulting and analysis services complement Frost & Sullivan's Market Engineering and Growth Partnership services. Stratecast's product line includes subscription-based recurring analysis programs focused on Business Communication Services (BCS), Consumer Communication Services (CCS), Communications Infrastructure and Convergence (CIC), OSS and BSS Global Competitive Strategies (OSSCS), and our weekly opinion editorial, Stratecast Perspectives and Insight for Executives (SPIE). Stratecast also produces research modules focused on a single research theme or technology area such as Connected Home (CH), MS and Service Delivery Platforms (IMS&SDP), Managed and Professional Services (M&PS), Mobility and Wireless (M&W), and Secure Networking (SN). Custom consulting engagements are available. Contact your Stratecast Account Executive for advice on the best collection of services for your growth needs. ABOUT FROST & SULLIVAN Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve bestin-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.