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  • Top 3 evolving dimensions of risks in 5G

    Top 3 evolving dimensions of risks in 5G

    As the world prepares to see the promise of 5G being realized at scale, it also makes sense for risk management professionals to think outside the box. It is not hyperbole to call 5G an inflection point in the history of telecom. With unprecedented technical capabilities, 5G also allows for the realization of very innovative business models.

    But along with these unprecedented capabilities comes significant risk. In a hyper-connected world driven by digital identities, some of these new offerings introduce significant vulnerabilities that can translate to direct loss or opportunity loss. At Subex, some of the key dimensions we are tracking to build the risk matrix for 5G are:

    Digital Partners

    A large number of new offerings in the 5G universe are multi-partner driven (e.g., virtual sports, video gaming, Augmented Reality packages, virtual studios, etc.). While these offerings can be potential game-changers in an operator’s revenue mix, the integration points from legacy to digital as well as multi-stack environments have traditionally shown large potential for leakages. It is important to note that in the telecom industry, specifically in Revenue Assurance, system integration issues have always tracked as a critical reason for leakages.

    Enterprise Offerings

    It wouldn’t be a mistake to call 5G the first “Enterprise-centric generation.” If we break down the promise of 5G into its basics (Enhanced Mobile Broadband, Massive Machine Type communications, and Ultra-Reliable, Low-Latency Communications), it becomes easier to imagine the potential enterprise 5G use-cases. However, the enterprise has always been an area in telecom, which has significant assurance related challenges. Issues like dynamic inventory, manual contract modifications, service to billing verification, account margin & profitability analysis, etc. will only be compounded in the 5G world.

    Digital Order Management & Provisioning

    While this might seem a relatively easy area, it is important to remember that new business models would be access-based as opposed to usage-based. Internet-driven companies already follow this model (e.g. Netflix), and it is a logical assumption that with a large product bouquet, operators might move into similar models based on multi-service bouquet-tiers. For example, I might be paying $30/month for the basic communications package (VoLTE, OTT apps) or $50/month for the media package (Video Conferencing + Basic) and so on. In such models, we might be provisioning partner-APIs, activating profiles based on digital on-boarding, verifying digital identities, etc. Furthermore, the projected “self-service” capabilities for the subscribers of all telcos will create a need for real-time assurance checks, which would mitigate systemic breakdowns.

    Of course, the actual risk matrix extends far beyond the three control areas listed above with brand new complexities coming up in terms of data management, access to dynamic configuration tables, moving from CDR to signal analysis, black-box platforms, and volume & velocity of data. At Subex, we are revamping both our domain and technical capabilities to be “Beyond 5G” ready. With a brand-new risk framework that leverages our “Active Risk Intelligence” approach complemented by a Big Data ready, Machine intelligence-enabled Next Generation Platform (NGP), Subex would be your ideal partner for both Business Assuranceand effective futureproofing. By leveraging our advanced cyber-security capabilities (Subex Secure) and our expertise in Anomaly Detection (CrunchMetrics), our new Business Assurance product is the ideal application to help you keep pace with business in the Digital Era.

    Want to discuss how you can drive a profitable business in the 5G era?

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  • Rating & Discounting: A granular way of re-defining settlement

    Rating & Discounting: A granular way of re-defining settlement

    CSP’s are regularly seeking new ways to drive user acquisition and revenue growth. As the ecosystem is moving towards partnership-based models for launching new services, communication service providers are partnering with new age digital natives to bundle their services along with theirs and create a holistic value for the end consumers. But the real question is – is it enough to bring in new partners without improvising their subscription and settlement models? This article tries to provide the answer to this question.

    Let’s, take a step back and see where the actual problem with current settlement models is. The first problem lies with – clashing of Partner’s digital offering with CSPs’ traditional way of settlement. Even though partners come with their subscription or modular services, CSPs’ still rely either on percentage-based revenue settlement or fixed revenue kind of settlement. Let’s take an example to get more clarity, AWS lambda services are charged with functions run time or resource utilization. If AWS and CSP decide to partner together in a B2B2X scenario to offer cloud service in a region, where CSP’s will have multiple direct partners or resellers in the market to sell the service, the only way CSP’s can do a settlement with a channel partner in the market is either by revenue sharing or fixed charges.

    The second problem is with CSP’s legacy system, which has not evolved to meet the requirements of new B2B settlement models. CSP’s still rely on their billing system, designed based on their end customers’ needs. However, they wholly ignore the fact that they need to build similar models for their partners. End customer models have evolved so much that operators can bundle their offering as per the customer’s taste, the penetration rate in a region, customer loyalty, and more. Whereas for a partner who provides these services, there is a flat revenue share model that exists, irrespective of whether one partner might perform better than the other partner.

    The solution lies in changing the perspective of CSP’s look at Partner’s or B2B2X settlement modeling. Let’s look at the picture below of the reseller model to overview the B2B Settlement model.

    Figure 1: B2B2X Settlement Sample Scenario

    In the above scenario, the Content partner provides various content services to end customers via the CSP platform. While Content partner offering is modular, there is no way that CSP can also do a modular settlement with their partners but to rely purely on revenue-based models without looking at market dynamics such as a penetration rate for a service in a region.

    This is where CSPs need to Build Their Models (BYI), which can help them define the economic models for settlement, not just based on the flat revenue. A settlement model, designed based on market dynamics such as subscriber penetration rate in the region, time of the day, the volume of the traffic, penalties, tier-based models, etc.

    In conclusion, Let’s take a re-look at the B2B2X settlement scenario with these economic models in place.

    Figure 2: Economic Modes in B2B2X Scenario

    These economic models give the CSPs and their marketing team the freedom to granularize their settlement models at different value chain layers. For instance, CSPs can choose different economic settlement models for their content partners, whereas a different model for their DCB partners is stated in the above diagram. This will ensure that Operators have multiple models to play with to maximize their revenue and provide a different settlement model for different partners using the same system.

    To summarize, with the growing need and demand of the bundle offer, CSP mustn’t be just looking into bringing new partners in their ecosystem and making sure that the right partners are rewarded, while also keeping their focus on revenue maximization.

    Want to know how our interconnect partner settlement and billing will enhance your business visibility

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  • Telco AI Transformation – Building the New Hyperscalers [Part 1: The big picture]

    Telco AI Transformation – Building the New Hyperscalers [Part 1: The big picture]

    Who would have imagined – at literally the flick of a switch the way we work and live will be changed forever – thanks to the pandemic.

    Amidst all this, the folks from the telecom industry have been the unsung heroes playing a critical role in the dramatic shift. A big thank you to the telco warriors – without your tenacity, resilience and grit this could not have been possible.

    Yet, as has been the case in the last several years most of the wealth making opportunities have continued to elude the telcos. It is a curious paradox that on one hand telcos have become the backbone of our new world order, and on the other, the pressure on revenues, margins, and that of customer expectations has only grown.

    While one might find multiple reasons for this – in my opinion, there are some things telcos can do to address this situation.

    • Embrace AI: Shift gears from scattered and sporadic AI experimentations for decision analytics to a strategic view of transforming all decision analytics in the organization by leveraging AI. This has to be a top-down CXO-driven imperative. It is clear across the telco value chain AI driven decision analytics has the ability add a few percentage points in terms of revenue uplift and cost reduction
    • Re-think tech stack: Cloud for elasticity and Open Source for agility is absolutely necessary. Ensure best practices from hyperscalers such as Google, Uber, GoJek are adopted.
    • Derive value from data: Ensure data and features are well cataloged and searchable. And Ensure AI infra and services from Image to Speech to Forecasting to Deep Learning are easily and readily available. That’s the only way to attract and retain Data Science talent.

    Learn from the hyperscaler enterprises that are built around data and AI-driven decision analytics. Just think about it – if you were to let go of the entire data science teams in telcos there be very minimal impact. Now compare it with the impact of the same activity on the likes of Google, Uber or GoJek. The repercussions will be catastrophic, to say the least!

    No – it’s not to say that telcos do not understand the value of AI-driven decision making. The truth is that across the telco value chain there are several opportunities to leverage AI-driven decision analytics with the possibility of boosting revenues and profits. But most efforts thus far have been sporadic and scattered set of experiments.

    It’s not all gloom though. And I would like to use the example of a telco who are clearly thinking at a planetary-scale. I had the opportunity to listen in to Rakuten’s CTO Tareq Amin during a webinar session and I was absolutely floored by his vision, clarity of thought, and conviction to think planetary scale. He calls it Rakuten Un-limit. Rakuten sees itself as a platform company and is combining the power to Open Source for agility, Cloud for scale and elasticity and a co-create/ collaborate model to redefine how telcos can compete against the best and win. Telcos like Rakuten, Jio and Telefonica to name a few have a tremendous focus on leveraging data, and AI-driven decision platform as a must have layer in their entire stack.

    In my mind, I am absolutely convinced. Intense digitalization, the impending launch of 5G services combined with AI in decision analytics has the power to propel telcos into the league of hyperscalers. It is time telcos recognize this and start organizing themselves around data – a precious commodity they are already awash with!

    Note: This blogpost is part of a multi-part series on AI transformation for telcos. Look forward to the subsequent parts that will be published under the title.

    Explore more on our popular AI use cases, experiments and thought leadership artifacts.

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  • Consolidate & Optimize your Wholesale Business: 3 ways you can adopt to make most out of your existing B2B ecosystem

    Consolidate & Optimize your Wholesale Business: 3 ways you can adopt to make most out of your existing B2B ecosystem

    The International voice business will eventually come down as WhatsApp; Facebook Messenger leads the race along with WeChat, QQ, Viber, and others following and overall taking up to 5 Billion monthly active users. Microsoft Teams, Zoom, Skype are taking over the enterprise voice conference call business.But even with these impacting factors, the International Interconnect business is here to stay for at least for the next half-decade.

    In the recently concluded GSC virtual conference, telco’s highlighted the shift in wholesale business. Overall, the business has seen an uplift due to COVID-19, but the buckets have changed.

    E.g., International voice calling has increased due to reduced travels. But on the other hand, roaming has reduced due to the same reason.

    Due to the pandemic situation, there is a sudden shift in the market dynamics, and telcos are looking to make the most out of it.

    The GSC Virtual Conference also highlighted many facts and approaches prevalent among operators right now. Some of them were-:

    • Change in ecosystem by fast tracking consolidation
    • Automation Initiatives in reconciliation, credit controls
    • New Partnerships in volume trading, swap deals
    • Improved Fraud investigations like Provider fraud, Smart FAS, SIMBOX etc.
    • Improving assured ecosystem initiatives by proper investigations, corrections and prevention in areas like disputes, credit controls, collections, rating etc.

    As the traditional revenue is drying, telcos can adopt many small changes within the entire B2B ecosystem to optimize and protect the revenue. Here are three aspects that can help telcos achieve that-

    • Consolidation
    • AAA
    • Future proof

    Consolidation: A typical telco has multiple B2B services which can be broadly classified into 3 major industries:

    Wholesale:

    (Global Voice Hubbing, Messaging, Interconnect, Roaming, Connectivity, Data Centers)

    Digital:

    (TV, IoT, M2M, Data Analytics Services, Security Services, OTT services etc.)

    Enterprise:

    (IPVPN, IPLC, Data Centers, Cloud services, Internet Services, Enterprise WiFi etc.)

    A convergent solution that can consolidate and run all these business on a single platform with multi-tenant deployments, provides the required consolidation to optimize both the CAPEX & OPEX spending.

    AAA Solutions: Automated – Accurate – Assured

    Future proof Solution: A solution that can be further extended to future B2B businesses. Evolving economic models between partners need a system that can generate new models using configuration. Flexible to process and manage data sources from various businesses.

    Subex Partner Ecosystem Management platform can deliver a converged B2B partner management experience that can address all the needs of any type of B2B business of a telco.

    Having multiple solutions from multiple vendors increases the complexity and the operational cost as well. Subex can help you augment your B2B strategy and provide a converged solution that can optimize and accelerate your journey towards the digitalization.

    If you want to know more about the solution

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  • What are the 5 ways that Business Intelligence Helps Telecommunications Providers?

    What are the 5 ways that Business Intelligence Helps Telecommunications Providers?

    Business Intelligence helps any organization transform the raw data into meaningful insights which can be leveraged by the organization to make business decisions such as CAPEX/OPEX investments, which products to launch, insights on customer behavior and much more. The importance of Business Intelligence in telecommunication has grown more than ever with the continuous growth in data as telcos ventured into new domains or launch new services. Here are the 4 ways that business intelligence can telecommunication drive more value-

    Customer & Campaign Intelligence: As telecom operators serves millions of customers, gaining individual customer level insights is very critical to provide personalized services that customers demand these days. Business Intelligence can provide that intelligence to operators by converting the raw data into consumable information. As a result, telcos can do targeted marketing campaigns, refine their pricing strategy and develop or launch products based on empirical consumer understanding.

    Proactive Customer Service: A good customer service can have a significant impact on reducing your customer churn. Customer issues and complaints are always going to be a challenge for telecom operators.  A Business Intelligence solution can provide process improvements to provide support and service. Customer care representatives can up their service for the most common customer complaints, finding stats on the complaints that customers waited on the phone longest about or even identifying support questions by email that took them the longest to respond.

    Network Intelligence– Telco customers are consuming more data than ever. They are streaming videos, playing online games, communication with colleagues or family/friends through video calls. This can cause network congestions, service interruptions resulting in loss of customer and revenue. Also, as 5G and IoT become mainstream, the high bandwidth and low latency requirements will require telcos to have clear visibility of their network performance tracking the activities happening at cell site level.

    Revenue Intelligence

    A Business Intelligence solution can help you gather information around revenue composition across different dimensions such as cell-sites, products/services, devices, geographies, customer segments and more. As a service provider, it is important for you to know the most profitable avenues that is driving the business growth.

    Product Performance

    A Business Intelligence solution can help capture information related to product usage, performance, revenue and margins. Based on the intelligence, operators can bundle their products and services for maximum ROI. The organization can decide to discontinue unprofitable products and launch profitable products.

    Build and Monitor Trusted Business KPIs in Real Time

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  • Digital Trust in the era of IoT

    Digital Trust in the era of IoT

    In the post-pandemic world, one technology enabler that will witness the greatest level of adoption is the Internet of Things. We have reached an inflection point in the IoT adoption journey and are now staring at a hockey stick growth curve in terms of the number of endpoints and use case diversity. So is it a smooth journey from here on? The answer unfortunately is a no.

    Security: the foundation of digital trust and exponential growth
    To capitalize on the demand for IoT-enabled data, various stakeholders often overlook security. This creates an enticing environment for hackers to exploit leading to multiple problems in areas such as return on investments and value accretion. IoT devices operate on the cusp of real and virtual worlds and with security being accorded little or no priority, these devices turn into conduits for hackers to enter, exploit, and exit at will. Such devices can also be used by hackers to launch Denial of Service attacks on third-party infrastructure causing more damage while attracting legal ramifications.

    Subex’s research has shown how hackers latch on to IoT projects at a very early stage such as proof of concept or pilot and stick around to monitor the networks patiently waiting for data or asset of interest to appear on the network or the connected infrastructure. They also deploy a range of malware and trojans to keep the network under watch for long periods.

    Such challenges can create trust concerns for various stakeholders including end-users, investors, employees, and vendors. Thus, security concerns must be addressed not just according to compliance norms but as per the prevailing threat environment and projected changes in this environment in the near term and future. Creating an environment of digital trust in an IoT project requires investments and a deep understanding of the threat environment and its implications.

    Improving digital trust in the IoT world can lead to a range of benefits. To begin with, projects at various stages will benefit immensely as the improved security posture will help ensure disruption-free operations and thereby improve stakeholder confidence. Start-ups can expect more access to funding options and innovative projects in established businesses can expect to mobilize more funds from internal sources.

    On the whole, the digital economy of a nation itself can stand to benefit from such granular attention to IoT security and digital trust. Today, many vital business streams and infrastructure sectors are relying on IoT to some measure and this dependency will increase in the days to come. Investments in IoT security will help guide better outcomes for these streams and sectors thereby having a cascading effect on the economy.

    Important considerations for improving IoT security outcomes and digital trust

    • Align security needs to the highest internal standards
    • Invest in devices and other infrastructure components for value rather than cost savings
    • IoT security should be viewed as a conduit for enabling digital trust
    • All stakeholders should be sensitized towards security mandates and considerations
    • Building digital trust should be an ongoing exercise with investments, resources, and attention coming from all stakeholders at all times
    • Opportunities for improving security posture should be a key area of attention

    Why Your business needs a Chief Trust Officer (CTrO)?

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  • Aseguramiento de Migraciones en la transformación Digital

    Aseguramiento de Migraciones en la transformación Digital

    Con la transformación digital ya corriendo desde hace unos años, muchos de los operadores con los que tratamos están actualizando sus ecosistemas para adaptarse a todos los cambios que esta nueva era nos demanda.

    Los sistemas de facturación deben ser más flexibles y mejorar el time to market para adaptarse rápidamente a los nuevos servicios y productos. Los CRM deben contemplar nuevos canales de interacción con los clientes y manejar ofertas más complejas.  Muchos de estos sistemas ya tienen 10, 20 o más años de funcionamiento y naturalmente deben ser modernizados. Algunos sistemas están siendo migrados a la nube privada, pública o esquemas mixtos. La constante es la innovación que este mercado demanda y los ecosistemas de los operadores deben actualizarse naturalmente para acomodarse a los cambios actuales y los que vendrán los próximos años.

    Necesidad de asegurar nuestras migraciones

    Para llevar a cabo estas actualizaciones de mejoras tecnológicas es necesario contar con un equipo capacitado, con experiencia global no solamente en mitigación de riesgo sino también en la industria de las telecomunicaciones. Este equipo será responsable del armado del plan de migración y tendrá que ser liderado por un Gerente de Proyectos para asegurar la efectividad del programa, interactuar con todos los actores involucrados en el proyecto y asegurar que los objetivos se cumplan en tiempo y forma.

    Este equipo, deberá definir la estrategia de migración y aplicar las mejores prácticas, incluyendo:

    • Selección de proveedores
    • Construcción de la documentación
    • Definir el plan de migración
    • Redefinición de flujos de trabajos y procesos
    • Validar las múltiples integraciones
    • Validar las configuraciones
    • Armar los escenarios de testeo
    • Armar matrices de riesgo
    • Reportar incidentes
    • Validar el correcto funcionamiento de funcionalidades existentes y nuevas
    • Definir y evaluar los UAT (User acceptance Testing)
    • Definir KPI y controlar dichas metricas de negocios

    Como verán es una lista extensa y compleja para llevar a cabo y la experticia, la experiencia y en algunas actividades el uso de la tecnología son componentes claves para asegurar el éxito de este tipo de programas.

    Desafíos que debemos considerar

    Estos planes de migración deberán estar bajo vigilancia para mitigar los riesgos que deberemos enfrentar en cada etapa del proyecto. Muchas veces durante el periodo de migración se da la insatisfacción de los clientes, porque las facturas se generan con errores, hay indisponibilidad de algunos servicios, problemas de performance.

    Algunas aplicaciones tienen un mal funcionamiento por configuraciones inapropiadas o las interfaces no son estables. Estos problemas derivan en definitiva en la demora del proyecto, por falta de planificación o por definición de cronogramas que no son muy realistas. Y lo más importante es que estos desafíos pueden llegar a tener en mayor o menor medida un impacto directo en los ingresos de la compañía. Hay que saber reaccionar y redireccionar el curso de los acontecimientos en forma rápida y eficiente para diluir cualquier impacto en las métricas de negocios que pudieran ser afectadas.

    Podemos ayudar

    Basada en varias experiencias, en diferentes regiones, nuestro equipo de consultoría los puede ayudar si usted esta pasando por este proceso.

    Nosotros podemos entender la problemática de su negocio; nosotros podemos identificar los aspectos más críticos y resaltar los riesgos con mayor impacto; nosotros podemos ejecutar el plan de migración; y también podemos documentar todas las actividades, incidencias y anomalías que suelen surgir durante estos proyectos.

     

    No dudes en ponerte en contacto con nosotros y si es el momento de actualizar tu tecnología y no sabes por dónde empezar. Déjame decirte, ¡podemos ayudarte!

    Programe una demostración.

  • Your business needs a Chief Trust Officer (CTrO). Here’s why.

    Your business needs a Chief Trust Officer (CTrO). Here’s why.

    Over the last decade, the term digital transformation has gone from being hyper-cool to being overused, and with born-in-the-cloud businesses now taking the center stage, there will perhaps be no need for ‘transformation’ one day. That said, all of the transformation that has happened has clearly led to a massive increase in the amount of data being generated and used.

    Being digital is great. It brings about agility, reliability, new revenue streams, better CX, more meaningful decisions, and a ton of other good things. However, it also brings with it the aspect of vulnerability and risk, the stakes for which are extremely high. In fact, here are some points for you to ponder over:

    • Over 1.7 MB data is generated per person per second, and 2.5 quintillion bytes of data are created every single day. But, do we trust the integrity of this data?
    • Partnerships and ecosystems are expected to unlock $100 trillion of value for business over the next 10 years. But do we trust our partner ecosystem?
    • More than 50% of the global population is currently online. Do we trust all their identities?

    Clearly, while the transformation to a digital world has opened up a barrage of new opportunities, there is one element that remains unaddressed (at least partially), and that is ‘Digital Trust’. Businesses have realized the importance of Digital Trust, and have initiated numerous initiatives in pockets to address it, but it is not yet a mainstream trend to have an executive appointed as the Chief Trust Officer (CTrO), who is responsible for all things related to Digital Trust.

    Now, if your organization already has a CTrO, then congrats, you’re one of the forerunners! However, if you are not one of those organizations who has made a decision yet, here are 5 reasons why you should onboard a CTrO.

    1. Digital Trust is beyond security (Just CISO is not enough!)

    The common misconception is that Digital Trust == Security. However, in the digital world, there are so many variables at play that the concept of Digital Trust extends way beyond security, and goes into the realm of Privacy, Identity, Risk, Credibility, Predictability just to name a few. This means that the CISO of your organization is only responsible for one element of Digital Trust, leaving out numerous others unattended. Of course, some organizations have taken the route of naming Chief Identity Officers and Chief Privacy Officers, along with CISO, but given that those elements simply tie up to Digital Trust, it might be best to simply have a CTrO in place.

    2. Trust initiatives will become mandatory

    As more and more businesses begin to understand the importance of Digital Trust, there is an increasing amount of emphasis laid on Trust as a determining factor to do business. A recent survey by IDC showed that by 2025, two-thirds of the G2000 boards will ask for a formal trust initiative that executes a road map to increase an enterprise’s security, privacy protections, and ethical execution. What this means is, if your business has to stay in the game, and even just pursue opportunities, you will need to have trust initiatives in place, and obviously someone to drive them.

    3. Digital Trust will be the strategic differentiator

    Competitive differentiation is extremely transient in the digital age. What is niche today, soon becomes commoditized, and businesses are in a constant search for that factor that keeps them ahead in the game. In such a scenario, Digital Trust will emerge to be the single-most-important factor to help organizations differentiate themselves. Hence, a key stakeholder that will be responsible for infusing Trust in the ecosystem.

    4. The concept of Digital Trust has an evolving roadmap

    Today, there are varied definitions of Digital Trust, with different scope and levels of coverage. It ranges from covering just security in its simplest form, to including multiple intangibles like transparency, credibility, reputation, etc. in some cases. What is important to note is that the fluidity of the concept of trust makes accountability and ownership difficult. The best way to craft a Digital Trust roadmap for your organization, and make sure you execute it – get a CTrO!

    5. Trust is non-replenishable

    They say it takes a lifetime to build trust, and a moment to break it, and forever to repair it. This statement holds good in the business context too. There are numerous instances of brands losing all credibility and reputation because of a single breach of trust, and in most cases, it is extremely hard to win the trust of customers back. In fact, a recent study by Edelman shows that 45 percent of consumers said that a brand would never be able to regain their trust after it displays unethical behavior or suffers a controversy, while 40 percent said they would stop buying from that brand altogether. All this only further cements the role of a CTrO as an extremely important one and makes it non-negotiable for organizations to have one.

    So, how is your organization approaching Digital Trust? Is it one of the strategic priorities? Are there people specifically responsible for it? Is there a plan to get a Chief Trust Officer in place? Let me know your thoughts in the comments section below.

    Meanwhile, if you’re interested to read more about Digital Trust, you’ll find some useful material here.

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  • Measuring the True Profitability: A holistic and granular approach

    Measuring the True Profitability: A holistic and granular approach

    In today’s rapidly evolving but oversaturated market, the telecommunication industry has changed its way of working. It has started to merge or intersect with other industries, such as media and financial services, offer more variants of products and personalized services to valuable customers, and quickly embrace new technical advents and adapt to the latest offerings, like 5G. As a result, the process starts involving multiple departments in core strategy and decision making. But each department monitors one’s own set of KPIs, which are in isolation from others. As a result, easier to monitor KPIs like revenue, subscriber base, number of installations, and site upgrades get priority while the concept of profits and margins take a hit and, thus, the accountability of multiple cost items. To overcome this issue requires a rejig in overall strategy involving collaboration between departments and a change in success criteria from top-line growth (revenue-based) to bottom-line growth (profit-based) with a presence of every stakeholder in the Profit & Loss(P&L) view of the company, resulting in a single version of the truth.

    Approach

    A holistic and granular approach is an attempt to measure the true profitability of customers, products, network assets, and geographical regions by adopting a more structured and methodical approach. The whole process can be divided into four steps, as shown below.

    1. Understand: Companies have most of the information needed for profit calculation, but it is scattered across multiple systems and departments. In this step, meetings with different stakeholders are done to analyze existing business models and understand their revenue & cost overheads, current margin computation methodology, and available data sources.

    2. Develop: Once all the line items related to revenue and cost items are identified, a logic is developed

    • a. to align the items into meaningful categories. For example: Usage revenue (within/outside product), Interconnect Revenue (Domestic/International), Network cost (e.g. Rentals/Energy), Insurance (Handset/Managed Services), etc.
    • b. to define cost model for ascertaining the per-unit cost. E.g., total network site cost is divided by overall network site usage(duration) to derive a cost per sec, and then cost is multiplied to obtain the network cost per transaction. Same way, a subscriber’s revenue is reverse mapped to network sites in the ratio of the subscriber’s usage.

    3. Process and Analyse: Once the logic is developed, different revenue and cost line items are processed and analyzed at the granular level possible. The state-of-the-art hardware & computing engine is put in place, combining multiple sources from different systems and running profilers to derive the final margin in a scheduled way.
    4. Compute: This step involves setting up a system with features of roll-up and slice-dice to derive the final margin against different parameters. Rules are defined to include or exclude the line items based on the type of level. E.g., margin can be computed against different parameters like Customer, Product, Segment, State, etc. as shown below.

    Fig. Margin Computation P&L View Illustration.

    Use Cases

    Some of the use cases where Subex has delivered using the given methodology are as follows:

    1. Visibility of network cost components in product profitability: In the given engagement, the network team wanted accountability from the product team while designing new products as the network team tries hard to meet the network requirements for the products. Subex created a detailed P&L view accounting in all network cost components for the products based on their usage and derived cut-off price points for the products given the services offered. We were able to identify some products with high sales revenue, but with negative or shallow margin after network cost allocations. The whole process brought more transparency, seeking coordination between both departments.
    2. Identifying high profitable customers: In this engagement, the client wanted to change the criteria of most valued customers, from revenue to profits. Subex helped the client to understand the exact contribution each customer made to the bottom line. The client acknowledged that the revenue method had been deceptive and inaccurate as two customers having similar revenue can have varying costs. Also, it helped the client identify the key cost components, making high revenue customers into low margin customers.

    Conclusion

    In a situation when prices are becoming harder to intervene, optimizing cost and service offerings become essential to push margins and require re-defining the yardstick of success from revenue & sales to profitability. The proposed holistic and granular P&L view increases transparency leading to more actionable insights and a better understanding of the cost structure, helping identify root cause drivers.

    See how Subex Analytics Centre of Trust can help your business.

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  • A rewind of the evolution from 1G to 5G

    A rewind of the evolution from 1G to 5G

    From 1G to 5G

    The journey from 1G to 5G seems to recent and time has really flown. By means of the below blog, I have attempted to provide a quick summary of the journey and how we fared.

    Towards the end, you can also see the revenue impact on a select few Telcos handpicked from across the globe with the evolution of each Generation of Telecom.

    1G Era 1987-1991

    “It was PHENOMENAL but was not enough.”

    What Happened Here?

    • Engineer Neil Papworth sent the first SMS on December 3rd, 1992, when he wrote “merry Christmas” on a computer and sent it to the cell phone of Vodafone director Richard Jarvis
    • Inception of AMPS (Advanced Mobile Phone System) technology from the pre-existing IMPS (Improved Mobile Telephone System) for voice transmission.
    • Connectivity established seamless mobile connectivity introducing mobile voice services.
    • 1G Introduced Analog voice.

    What went wrong?

    • Poor voice quality
    • Poor battery life
    • Large phone size
    • No security
    • Limited capacity
    • Poor reliability

    The Revenue Impact:

    Since the call rates were too high & the users too less, this was only the beginning of the Telecom revolution and at this point, service providers were focused on technological strides as success stories over revenue generation or acquiring subscriber base. This was essential for the operators as it defined their level of readiness to capture the market faster and better in the coming days.

    2G Era 1991-2001:

    “A revolutionary milestone in telecommunication sector”

    What Happened here:

    • 2G: First Wireless digital transmission came with 2G in 1991.
    • GSM – Global Systems for Mobile Communication enabled Data transfer on top of voice at a speed of 30-35 kbps (A joke in modern telecommunication terms).
    • 2G was developed, primarily, to transfer voice, fax, MMS and SMS services.
    • By use of digital voice compression, the TDMA (Time Division Multiple Access) standards supported three times as many voice channels in the same bandwidth as the old analog systems.
    • The ‘E’ & ‘G’ Symbols on the mobile network were seen first during the 2G era.
    • Data was responsible for constant spike in revenues in telecom operators in addition to the voice revenues. 40% of the revenues were collected for Data.
    • 2.5G saw the introduction of GPRS as enhanced Data services. GPRS can be viewed as a boosted data service for GSM users, but using packet switching and multiplexing techniques. The maximum transfer speed that can be reached via GPRS is approximately 170 Kbps.
    • 2.75G saw the entry of EDGE (Enhanced Data rates for GSM Evolution) technology.
    • Data transmission rate saw 4X increase from 170kbps to 500kbps (practical application). In theory it was said to be 1mbps.
    • EDGE transferred data in fewer seconds if we compare it with GPRS Technology. For example, a typical text file of 40KB was transferred in only 2 seconds as compared to the transfer from GPRS technology, which was 6 seconds.

    What went wrong?

    • Required strong digital signals to help mobile phones work. If there was no network coverage, digital signals weakened.
    • Systems were unable to handle complex data like videos.
    • As the generation moved towards 3G, the user requirement was too complex for 2G to satisfy.

    The Revenue Impact:

    While the biggest highlight of the era may have been the introduction of data transfer capabilities on a mobile device, the maximum revenue impact seems to be created by SMS services. Telecom operators across the globe saw multi-fold increase in their revenue in this period, with some operators reporting 5X growth.

    3G Era 2001-2009

    “Showed us the unending potential of Data yet did not fulfil its own potential”

    What Happened Here?

    • 3G network was introduced in 1998, we saw its establishment in the early 2000s.
    • The max speed of 3G was estimated to be around 2 Mbps for stationary devices and 384 Kbps in mobile phones. The theoretical max speed was 21.6 Mbps.
    • It was based on CDMA2000 (Code Division Multiple Access) & EDGE technologies. (EDGE was superior enough to support 3G on its own).
    • 3G introduced media streaming.
    • Data in 3G was broken down into small pieces or packets and then sent to the destination, unlike 2G which used circuit switching.
      • This was revolutionary as users paid only for the data they spent rather than the time spent online.
    • “Data is money” probably started its inception in the mid-2000s as there was a surge in data utilization by consumers.
    • Multimedia, navigation, mobile apps, browsers, conference calls, mobile TV all saw their inception in the early 3G era.
    • 5G was conceptualized and released with HSPA (High Speed Packet Access) marking the iconic ‘H’ symbol on the mobile network.
    • It was all about data in the 3.5G. Data transmission rates went up to 14mbps
    • Saw the release of HSPA+ or as we know it ‘H+’ symbol on the network.
    • Data speeds went up even further with max speed of 42mbps
    • Although 3G did not see operators exponentially increase revenue as the 2G era, tier 1 operators saw significant growth as Data consumption increased.

    What Went Wrong?

    • Messy Architecture
    • Demanded 3G compatible handsets
    • Cost of upgrading to 3G device was too high
    • Power consumption was high

    The Revenue Impact:

    During the mid-2000s towards the dawn of 4G, operators focused on increasing their subscriber base. From 2002 to 2009, they saw an increase of ~4.1Bn. But since data dominated over calls, the spike in revenue was not satisfactory. This period turned out to be a huge revenue booster for device manufacturers as the need to have a 3G compatible device/handset became a necessity as it enabled the transformation of phones into smart phones.

    4G Era 2010-2019:

    “4G introduced us to a faster world with a greater Data capacity”

    What Happened Here?

    • 4G saw an overlap of itself with the 3G as in 2008, 4G technology started to roll out but had issues to commercially announce the then communication system as 4G due to minimum standard requirements which were not fulfilled.
    • The speed of 3G quickly became insufficient as technology & smartphones evolved resulting in heavier files and bulkier data flows.
    • It provided a quality that enriched user experience with advancedgaming services, HD mobile TV, Video Conferencing, 3D TV, IP telephony and other services that demand higher speeds.
    • With the implementation of 4G, some 3G features are removed, such as the radio spectrum technology.
    • A term MAGIC is used to explain the 4G technology.
      • M – Mobile multimedia
      • A – Anytime Anywhere.
      • G – Global mobility support
      • I – Integrated wireless solution
      • C – Customized Personal Service
    • 4G LTE (Long Term Evolution) was a complete redesign and simplification of 3G network architecture, resulting in a significant reduction in transfer latency and thus, increasing efficiency and speeds on the network.
    • Users encountered a problem in accessing data while on a voice call with the 4G LTE, hence the inception of 4G VoLTE which simply meant voice over LTE enabling users to access 4G data and still be able to make calls.
    • 4G carries 3X the data 3G UMTS (Universal Mobile Telecommunications System) carried and 6X the data 2G GSM network carried.
    • 4G bandwidth is 200 Mbps, which meant that one could download a full-length movie in under 10 minutes!

    What Went Wrong?

    • 4G LTE network needs complex hardware
    • 4G technology use many antennae & transmitters resulting in poor battery life.
    • In areas without 4G coverage, consumers downgraded to 3G while still paying the cost of 4G.
    • Higher Data consumption

    The Revenue Impact:

    In 2018, almost 300 million people connected to mobile internet for the first time, bringing the total connected population to more than 3.5 billion people globally. Revenues did not see a drastic increase for the operators especially in the tier 2 & 3 segments, as consumers demanded better connectivity, greater capacity & lower latency. This could only be afforded by the tier 1 operators, who could simply afford splurging on improving their network.

    5G Era 2019 and beyond:

    “5G is more than a generation, it is a promise to wonderland”

    • 5G looks at us with a new experience in faster data rates, higher connection density, much lower latency, among other improvements.
    • 5G is not an upgrade to 4G, but is in a league of its own, because it provides us the ability to connect thousands of devices at once giving the user the true sense of ‘real-time’ experience.
    • This means the computing & processing can move to cloud and resulting in smaller IoT devices, reducing the cost of manufacturing & maintenance by optimizing network for the telecom operator.
    • IoT will mean a lot different with the growth of 5G, as self-driving cars may yet become a reality even in India.
    • Since increasing subscriber base in tier 1 cities is no longer an enticing prospect for Telcos, they will look at generating new streams of revenue with the maturity of MU-MIMO and achieving data speeds of up to 35Gbps.
    • 5Gtechnology may use a variety of spectrum bands, including millimetre wave (mmWave) radio spectrum, which can carry very large amounts of data a short distance.
    • 5G mobile technology can usher in new immersive experiences such as VR and AR with faster, more uniform data rates, lower latency, and lower cost-per-bit.
    • 5Gcan enable new services that can transform industries with ultra-reliable, available, low-latency links like remote control of critical infrastructure, vehicles, and medical procedures.
    • Here are some revolutionary use cases 5G will bring in:
      • Fuelling precision agriculture — even the cotton found in a simple dress uses 5G.
      • Enabling reliable wireless IoT connectivity at transport hubs
      • Essential to the future autonomous vehicles with V2X & smart logistics within our grasp.
      • For closer collaborations at the workplace using real time insights & XRs.
      • Bringing immersive, virtual customized shopping experiences anywhere to the consumer.
      • Driving the next industrial revolution with flexible manufacturing with XR guided execution, smart surveillance, real time supply chain visibility using blockchain & predictive maintenance.
      • With real-time asset tracking and efficient delivery using drones.

    The Revenue Impact:

    As per Qualcomm, 5G will extend its arms out into the enterprise and will see a massive growth. 5G is driving global growth.

    • $13.2 Trillion dollars of global economic output
    • 22.3 Million new jobs create
    • $2.1 Trillion dollars in GDP growth

    Penetration into OEMs, operators, content creators, app developers, and consumers) could alone support up to 22.3 million jobs, or more than one job for every person in Beijing, China.

    Here is a revenue gradient chart for Tier 1, Tier 2 & Tier 3 operators for comparison.

    Revenue value depicted in USD $ Million

    References:

    https://www.statista.com/statistics/226065/global-mobile-subscriber-forecast/

    https://www.sciencedirect.com/topics/engineering/advanced-mobile-phone-system

    https://mse238blog.stanford.edu/2017/07/ssound/1g-2g-5g-the-evolution-of-the-gs/

    https://www.gsma.com/aboutus/history

    https://www.itu.int/en/ITU-D/Documents/WTDC_1994_FINAL_REPORT.PDF

    https://www.itu.int/ITU-D/ict/publications/wtdr_99/material/wtdr99s.pdf

    https://www.itu.int/dms_pub/itu-d/opb/ind/D-IND-WTDR-2006-SUM-PDF-E.pdf

    https://www.qualcomm.com/media/documents/files/download-the-evolution-of-mobile-technologies-1g-to-2g-to-3g-to-4g-lte-qualcomm.pdf

    https://www.qualcomm.com/invention/5g/economy

    https://www.qualcomm.com/invention/5g/what-is-5g

    https://www.igi-global.com/chapter/evolution-technologies-standards-deployment-networks/17444

    http://protei.me/blog/telecom-news/the-mobile-wireless-communication-technology-journey/

    Official Annual Revenue Reports:

    Verizon: 1993-2019
    Telstra: 1993-2019
    Sprint: 1993-2019
    Batelco: 1993-2019
    Tigo: 1993-2019