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Device Journey Management: the next frontier for Device Assurance

In recent years operators have scaled their thinking into hundreds of millions – but not in terms of data volumes, but instead in the numbers of devices now utilizing their networks. Smart handsets have led the charge of devices, followed (and soon to be surpassed) by IoT devices, and an army of small cells that will serve to densify the upcoming 5G network rollouts around the world.

Why are these devices capturing more and more operator attention? With over 1.5 billion smart phones shipped from manufacturers in 2017, the amount of investment by telecom operators just in this device category alone amounts to approximately 20% of their overall operational budget. However, each year tens of millions of dollars of this opex are being written off as losses by operators due to issues with logistics (forward and reverse), fraud, and process misalignments; device journey oversight doesn’t exist as a discipline today.

Subex has invested almost two years researching this domain, including talking with operators of all sizes around the world. What we have found is an expanding set of exploitable gaps that current systems and practices are incapable of closing. Points of risk exist across internal processes, channel partners, distribution and supply chain, and various other areas leading to (and sometimes even originating from) the end consumers. These risk points accumulate losses for operators that range between $500K USD to over $10M USD per month, per operator, depending on size of the operator.

The device growth area today is not only in smart handsets, but also in a wide array of small cells, sensors, and various other categories. With already significant gaps existing in oversight, this new breed of devices puts an even greater risk on operating budgets. Under current estimates, deployed IoT devices alone in the next 5 years will exceed 200 billion units, dwarfing the handset counts worldwide. Can losses be sustained, or even ignored, at these levels?

Subex will be speaking about a comprehensive strategy and methodology for Device Journey Management during a presentation at the CFCA Winter Conference in Las Vegas on February 6^th, 2018. We will also be at the Mobile World Congress in Barcelona later in February where we look forward to speaking with operators encountering the same problems.

February 5, 2018
Assurance by any other name… reflections on RAG Sydney

In my role leading business solution consulting for Subex Network Analytics, I traverse a lot of time zones. People assume I have sage advice and perhaps an elixir to cure jet lag. Sadly, I slog through the transitions like everyone else, employing a variety of coping strategies.   I just read about an intriguing approach that some members of the US ski jumping team will use at the Winter Olympics. They are embracing jet lag, purposefully showing up just days prior to competitions. Why? For them, it is best not to think too much as they soar into the abyss. Being in a foggy state may be an asset for some, but the rest of us still need to find ways to stay on our game as we trot the globe!

Fortunately, I managed to keep my edge for the Risk and Assurance Group (RAG) conference in Sydney, after traveling 18-time zones to get there.   It was a very worthwhile event, held on the Optus campus, with a good mix of operators and vendor partners.   Anamitra Mukherjee (Optus) delivered the keynote and provided material examples of how his team is challenging the traditional boundaries of RA, branching into areas such as handset assurance and network assurance. Members of his team, Sujith Dissanayake and Gihan Samarawickrama, provided more insights on handset assurance during their talk later in the conference.   Anamitra explained that Network Assurance enables operators to determine whether they are spending the “right dollars” on the network. Are there opportunities for cost savings such as harvesting unused assets and redeploying them?   He went on to describe the benefits of reconciling the fixed asset register against the physical network. Payoffs include better asset visibility, more accurate depreciation schedules and efficient tax strategies. Calculating the profitability of cell sites is another area his team is exploring.

From Anamitra’s talk one got the sense that it is time for operators to ask: “Is there more to assurance than RA?” The consensus at the event was a resounding “yes”.   This was a major topic of discussion. Eric Priezkalns, one of the event organizers, expands nicely on this theme in his blog post about the event.   Jayne Hunter of Vodafone Hutchison Australia explained that her role has migrated from RA to Margin Assurance. Darren Rinaldi of Foxtel described how his team performs “entitlement reconciliation” within the broader context of process assurance. Geoff Ibbett from RRM Solutions chimed in with the importance of contract assurance during a panel discussion. I could go on but you get the idea…

To the list of assurances, I joined the party and added device assurance. Subex is observing that usage-based frauds have been in decline (although IRSF continues to be popular) and there has been a sharp uptick in device and equipment issues. Device/equipment frauds, thefts, reverse logistics breakdowns, etc. are becoming endemic.   During my talk, I pointed out that such issues are not limited to mobile handsets. CPEs, set top boxes and even small cells can be considered devices and all have their own risks to mitigate. To this mix you can add vCPEs and the need to control for excess license costs.

There certainly is a new world of assurances to contemplate. In my book, there is only one missing. Any takers for jet lag assurance?

February 2, 2018
Smart NetEx decisions for improved Capital Efficiency and Customer Experience – Subex Limited
There’s an interesting story playing out between U.S. state governments and city municipalities over the expansion of small cells. There is a significant push from the US government to expand small cells installation base and thereby increase the investments in this space. Many operators in the US are more than ever focused on getting the small cells deployment strategy correct as well as get it rapidly implemented.

Small cells are nothing new. We have been hearing for more than 7 years now, on the potential benefits of microcells – small cells, femtocells, picocells and how they can alleviate the capacity/coverage problems. Only in the last 2 – 3 years, small cells trend has picked up, with the uptick in mobile broadband and massive video consumption.

Market Reality

As the need for network capacity is constantly increasing, Telcos cannot afford to wait for long, till new technology standards are completely finalized and hence, it has prompted many prominent big names to announce 5G fixed wireless offering and 5G trails with vendors. In what looks like proactive initiative or in some cases the must-have network features, many Telcos have started to take incremental advantages and gains from 4G LTE-A/LAA with advanced features like Massive MIMO, 256QAM, Carrier aggregation etc. Despite all these, the coverage and capacity problems plague in extremely dense urban settings. Festive events or public aggregation pose challenging problems, especially when the traffic demand becomes quite unpredictable, forcing Telcos to deploy super buffered capacities. For example, look at some few stats related to last year’s Super Bowl at NRG Stadium, Houston. It probably created history of sorts on data transfer –
- Verizon’s network transmitted 11 terabytes up 57% from the last year
- AT&T data transmission is 9.8 terabytes, nearly double from the last year
- Sprint’s network carried 5 TB data transfer
- Super Bowl Live at Discovery Green the week prior to the Super Bowl, there were 59.9 TB of data, or 171 million social media posts with photos, used on the AT&T network in Houston
High voltage events like these, are becoming of strategic importance for the operators to keep the network up and for keeping the customer experience top-notch for obvious reasons. Customer perception – the potential brand establishment, is highest during these events. Telcos don’t want to take any sort of chance in such events and thus opt to deploy microcells with high-speed backhaul to support such events.

There’s another easily relatable trend – the indoor consumption of data is significantly high compared to mobile users, in the ratio of 80:20. This is especially true in urban areas, at homes and offices. Not only capacity is a concern, even coverage becomes challenging in high rise concrete zones. Small cells perfectly fit in this category to improve coverage & capacity to keep up the customer satisfaction. On the contrary, few Telcos operating in the densest telecom market in terms of user density, like in India, where the hotspots, coverage holes become the key decision points for capacity enhancements and optimization, do install new macro cells. In such cases macro cells are cost effective and addresses the issues effectively.

With 5G, we will see an increasing number of HetNets – small cells operating in tandem with macro cells thus handling offloading, higher throughput, greater coverage and in the process enables superior customer experience. Next evolution of investment planning is moving in the direction to cater to network densification trend.

Network Investment planning

Network capacity expansion cycle has shrunk, given the fact that the rate at which the traffic growth forecast exercises are done at every few months. This cycle is going to shrink further, due to dynamics of the data demand on the network, new business models, and technology changes. Network Planners and Capital allocators at CSPs, now require greater insights to address the high impact zones where Capex investment or capacity expansion provides maximum business outcomes.

Unfortunately, the processes for network investments still carry age old practices in this new paradigm! For instance, in one of our discussions with Telcos in India, we understood the yearly network Capex budget is decided based on competition strength or weakness in various circles (sub-regions) and based on simple extrapolation of traffic forecasts. Once these projections are agreed upon by various internal teams, network planning team go through series of technical negotiations with vendors and orders are placed. Of course, this is high level description of the entire laborious and time-consuming process. But you get the drift – there’s no rigor in understanding the insights that Telco’s own data can throw upon, for better network investments decisions.

Capital Allocation

For capital allocators inside Telcos, aka CFO vertical, it is important to understand the optimal use of capital on network investment. Investment in network capacity expansion can be done intelligently, keeping in view of key business metrics like maximizing ARPU, targeting high revenue sites, tackling competition presense etc, which ultimately helps in achieving business goals – maximize revenue, efficient usage of resources (cost center), optimize opex, learn lessons for next capex cycle etc. A data analytics approach reinforces and propagates this methodology of crunching data from various sources, understand the different moving parts and provides decision models and corresponding outcome scores for capital allocators to make appropriate network investment decisions, backed up by data.

Customer Experience

In the other end of the spectrum, the network planners and network managers are really focused on customer experience around the existing sites and at times around newly commissioned sites (new investments), to understand the factors impacting the quality of user experience. Some of these factors could be – no services due to coverage holes, poor connections due to capacity hotspots etc. These factors are crucial, as they provide clues about the network coverage or capacity bottlenecks that need to be fine-tuned through further investments or capacity augments.

Ultimate goals for network teams is to reduce customer churn, keep up customer experience and reduce network downtimes. With advent of newer technologies like 5G, these goals will be stretched due to increased complexity of the networks and super high load demand expected. Network planners are looking for advanced yet locally adpatable solutions to address network investment strategies to meet increasing expectations on great customer experience.

Conclusion

Therefore, it has become more important than ever that Telcos need to take a holistic perspective about many factors like the network capacity elasticities, everchanging user demand dynamics, quality of experience, financially lucrative regions, subscriber demographic profiles, marketing expansions, competitive presence and accordingly influence the network investment decisions to maximize both customer delight and achieve business objectives.

References:
January 22, 2018
The Future Success of Telecom Lies in Revenue Assurance

As the telecommunications industry anticipates the next wave of growth triggered by digital disruption, there are a few developments that demand critical attention from telcos. These trends have had a direct impact on the way telecom services are delivered, often impacting the revenue streams of operators. Let’s look at the top trends that impacted telecom revenue and see how the telcos needs to devise a revenue assurance strategy to deal with these changes.

Revenue Assurance in OTT Era

The IP revolution that swept the telecom industry over the past decade have brought in immense opportunities for OTT players; but for telcos, it was the beginning of a cataclysm marked by cut-throat competition and revenue loss. Since then, the journey of telcos has never been easy. As OTT players took away the bigger pie, operators had to redefine their business strategies to safeguard their revenue streams. Thus, their priority shifted from traditional services to the new digital offerings that largely rely on IP networks. As the journey commenced, a series of new challenges emerged in the service delivery.

With a large bouquet of offerings encompassing voice, data and video streaming, revenue management becomes a critical concern for telcos. The complexity associated with subscriber management and invoice management has created the need for a real-time revenue assurance (RA) platform designed around analytics capabilities. The automated RA capabilities ensure that the tariffs are implemented uniformly across all subscribers and that the billing system is free from all types of errors.

Technology Integration in OSS

One of the key challenges involved in a telecom provider’s transition to a digital service provider (DSP) is to integrate the transactions from different types of networks – say 3G, 4G or IP networks – to a common operations/business support system (OSS/BSS) system. Traditional systems at most telcos were purpose-designed for circuit switched networks and their revenue assurance use cases revolved around batch processing of data. To meet the complex demands created by the new digital offerings, the OSS/BSS needs to evolve to support multiple network topologies. They need to also possess the capabilities to handle large volume of data generated from disparate channels.

The modern approach to revenue assurance allows creation and maintenance of network inventory, network fault management, and automated provisioning of services through real-time analytics. This approach goes beyond the traditional way of analyzing the basic data for billing to identify aspects that impact quality of service (QoS) and customer experience.

Telecom Fraud and Revenue Assurance

The impact of telecom frauds such as international revenue share fraud and SIMbox cloning on telcos’ revenues is huge. Global Fraud loss estimate is about $29.2 Bn annually (Source: 2017 Global Fraud Loss Survey) for instance. The risk grows multifold as the telcos move to advanced networks like LTE. Due to the high bandwidth and the advanced capabilities of the devices connected to these networks, monitoring these activities becomes a real challenge.

Real-time revenue monitoring is the only way to address the revenue loss associated with call frauds. The telco should implement a robust fraud management practice that helps them analyze both expected and historical usage pattern to proactively address revenue leakage. With real-time analytics, usage can be monitored across different types of services – voice, data and video streaming. A comprehensive fraud management strategy must also encompass other aspects of providers’ environment including the sales channels, networks and the OSS.

In a nutshell : The digital journey of telcos has just begun. Considering the future opportunities, telcos cannot slacken their pace of digital transformation. As challenges around revenue assurance grow higher in the evolving technology landscape, priority should be given to safeguard the revenue across all channels.

January 18, 2018
AfricaCom 2017: A Subexian View

It is a well-known fact that AfricaCom is one of the most popular and significant events for telecom operators and vendors alike in one of the most fast-paced emerging economies: Africa. The annual event is attended by the top telecom executives from across the world and is attended by Subex every year. I had the privilege of attending the last edition of AfricaCom, and from what I’m told, 2017 was one of AfricaCom’s busiest years: a sentiment which was shared by executives of operators and vendors and even by the Cape Town locals.

While I happened to attend some of the sessions at the newly opened Innovation Stage, my sense was that most of the buzz was happening at the exhibition area, where Subex too was an exhibitor among some of the biggest names in the telecom space. It was clear that Digital Transformation was the central theme of AfricaCom 2017, and was a key discussion point among both vendors and operators.

The theme of Digital Transformation and Digitalisation has been a cornerstone of Subex over the last few years and keeping in line with the concept, Subex showcased its Analytics and Consulting & Managed Services offerings to the delegates besides its renowned flagship products. In my discussion with executives from the top CSPs, it’s clear that analytics is still as popular as ever, and the demand from true analytical services for the telecom domain is hotter than ever.

The need to leverage data was also a hot discussion point for Subex even with industry analysts. As per my discussion with a renowned analyst from Ovum, leveraging analytics in the African market is definitely an area of interest.

Overall, from the excitement in the market for things to come, it’s clear that the African market is increasingly embracing the journey ahead and preparing themselves for the challenges on the horizon. It will be exciting to see how the market evolves over the course of the next year, and this thought makes the next edition of AfricaCom an exciting one.

I am hoping to come back again to experience the next wave of transformation that the industry undertakes and visit the wind of change I experienced at the Cape of Good Hope!

November 13, 2017
The holistic approach to securing IoT Ecosystems

With the convergence of the physical and digital world, IoT ecosystem is becoming more pervasive and smart. With its “connected” nature, the concept of securing the IoT ecosystem has taken precedence and has today become a necessity. It is no longer a question of “IF” IoT networks will get hacked, It’s “WHEN.” Organizations should be concerned about what should be done “WHEN” the ecosystem is compromised.

The blog discusses the various risks the IoT boom poses, and the approached organizations need to adopt to safeguard themselves.

Read More

Note: Published with permission from Liveworx

As a digital service provider, your adoption of Internet of Things (IoT) services presents opportunities as well as challenges. The upside: IoT opens new revenue streams by providing always-connected services to digital subscribers. The downside: IoT exposes subscribers to identity theft and security breaches. Subex provides holistic cyber security to ensure that enterprises are safe from unauthorized access and intrusion across their network.Subex Secure offers comprehensive IoT security coverage from real-time discovery and monitoring to response and recovery. Our solution leverages a one-of-its-kind honeypot network that combines physical devices and device emulations to generate IoT / ICS signatures. Our system evaluates global identity and device breaches and updates the Subex Secure signature repository to safeguard your enterprise from new and emerging IoT threats.

November 3, 2017
Digitalisation: Mirroring Opportunities with Reality: A Quick Recap of the Subex User Conference 2017

As most of you would probably know, we recently concluded the 14^th edition of the User Conference, which took place on the 24^th-25^th of October 2017, in the beautiful city of Zagreb in Croatia. This year’s User Conference followed the theme ‘‘Digitalisation: Mirroring Opportunities with Reality” and was presided by Mr. Dean Smith, Founder & CEO, Assuring Business and Mr. Carl Lyon, Managing Director, Perpetual Experience Limited. The keynote speakers for this year’s User Conference were Rohit Talwar, Futurist and CEO – Future Research, Dana Adams, Director of Security Services at Telus, Andreas Manolis, Head of Strategy & Risk, Group Revenue Assurance at BT Group, and Professor Paul J. Morrissey C.Eng., F.I.E.E., Global Ambassador of TM Forum. Also speaking at the event was Debra Shindler, Senior Director Revenue Assurance, T-Mobile, Laura Iglesias Febrero, Head of Cyber Security, Telefonica, and User Conference veteran Eric Priezkalns, Steering Committee Member, RAG Forum & Editor, CommsRisk.

To take a step back, in my opinion this year’s run up to the User Conference was just as exciting as the event itself, particularly in the conceptualization of the theme, I.e., Digitalisation: Mirroring Opportunities with Reality. Over the last few years, the terms ‘Digitalisation’ and ‘Digital Transformation’ have been the spotlight topic of discussion among telecom operators and taking these buzzwords from the realm of hype to the shop floor has been priority for telecom executives. And Subex has been playing an important role in this mission. Therefore, we felt that bringing this aspect into our theme will be helpful to our customer, and to us as well.

Through this theme, we were able to move the discourse from merely talking about a trend to actually breaking these terms down to their practical, and operational aspects. Operators today understand that while digital transformation needs to be integrated within their businesses, the challenges that they will have to face need to be braced, and having this within our theme for the User Conference would provide all, including operators, futurists, media and analysts, with an excellent platform to exchange knowledge and discuss about making the hype a reality.

And we feel we were successful in doing so. Moreover, to enforce the importance and our viewpoint around this theme, we also held interesting sessions around Analytics, IoT Security, Managed Services, and Subex’s core products and solutions including fraud management, revenue assurance, network asset management and partner management.

Another important aspect of the User Conference is that we launched our consulting practice at this event completing the most important cog in our wheel to make it a complete technology organization with products and solutions stacks getting complemented with our consulting offering.

Moving back to the event, we also held the next iteration of the Operator Excellence Awards this year, and I would like to take a moment on this platform to highlight the illustrious winners of the various categories of the same.

Innovation Category

The Award was presented to the most innovative initiative that has created a disruption in the market in the given domain.

The operator best embodying these attributes was Reliance Jio, and Subex recognizes Reliance Jio’s industry innovation and disruption by conferring the Operator Excellence award in the “Innovation” category.

Trendsetter of the Year

This Award was given to the operator that has brought in the new approaches to solve industry problem which can be replicated by other operators.

The operator winning this award was “Optus” and Subex recognizes the new trend set by Optus for effective cost management strategy conferring the Operator Excellence award in the “Trendsetter” category.

Thought Leadership

The award was given to the operator that has been recognized to be driving industry thought leadership and its futuristic vision.

The operator which successfully highlighted these aspects in the year was “BT” and Subex recognizes the thought leadership showcased by BT in the industry, conferring the Operator Excellence award in the “Thought leadership” category.

Most Innovative Partner

The award was given to the partner that brings co-creation and innovation using Subex’s products.

The award for this category was provided to “Signa” and Subex recognizes their efforts of bringing in co-creation and innovation using an open platform over Subex’s products. This innovation and co-creation was indeed the first step towards an open platform which has made the Subex and Signa partnership much stronger.

One important thing which I would like to mention here is that Mr. Sandeep Kumar, India’s ambassador to Croatia graced the cocktail reception that we hosted on the eve of the Subex User Conference. This was a great gesture from Sandeep demonstrating the importance of government and industry working in cohesion for business to flourish.

Have a look at the mash up video of Subex UC 2017 and I am sure you would enjoy that.

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October 29, 2017
¿Por qué Analíticas es la respuesta para el Director Financiero moderno?

Como bien dijo Gordon Gekko, en la película Wall Street (1987), “La mercancía más valiosa que conozco es la información”. Afortunadamente para las compañías de comunicaciones y sus Directores Financieros, no carecen de esta “mercancía valiosa”, la cual pueden aprovechar mediante analíticas.

Descubre cómo los Directores Financieros pueden aprovechar sus datos mediante analíticas de telecomunicaciones, para tomar mejores decisiones que impulsen el crecimiento y mitiguen los riesgos, viendo la grabación del webinar llamado “No te quedes atrás: una guía de Directores Financieros para aprovechar las analíticas avanzadas”, que tuvo lugar el 14 de diciembre.

Pero retrocedamos un momento.
El mundo de las telecomunicaciones, tal como lo conocemos, está evolucionando y, con él, el rol de los Directores Financieros también está experimentando un cambio drástico. Su papel ya no se limita a centrarse únicamente en el desempeño pasado, en los números y en la información financiera, sino que el mandato parece casi universalmente superado, y el Director Financiero necesita también proporcionar información sobre hacia dónde está yendo el negocio y cuán rápido lo está haciendo.

La participación de los Directores Financieros en la estrategia corporativa también se ha convertido en una parte integral del trabajo, ya que ahora tienen la capacidad y el mandato de contribuir directamente con la dirección del negocio, así como revisar e informar sobre su rendimiento. Todo esto significa que los Directores Financieros de hoy deben ser más estratégicos y necesitan asegurarse de que haya una mayor alineación con los imperativos estratégicos del negocio, y este requisito coloca al Director Financiero en el punto focal no solo para la presentación de informes financieros, sino también para los reportes gerenciales, además de mantener una hoja de balance sólida y saludable.

Pero, como sabemos, la naturaleza dinámica del entorno de las telecomunicaciones plantea múltiples obstáculos al Director Financiero moderno, que incluye -aunque no se limita- a lo siguiente:

_ Los CFO hoy en día deben asegurarse de que son capaces de aumentar el margen y el rendimiento de las ganancias.

Es un hecho bien conocido que los ARPUs han estado disminuyendo constantemente en todas las regiones del mundo y, junto con el lento crecimiento de los ingresos, está llevando a una erosión constante de los márgenes desde 2010 en la mayoría de las regiones. En medio de estos desafíos, el mandato de los Directores Financieros de aumentar los márgenes y el rendimiento de las ganancias es cada vez más crítico y difícil.

_Los intentos organizativos de aumentar los ingresos se están desinflando por errores y fugas.

Abordar las Fugas de Ingresos es una preocupación importante para los operadores de telecomunicaciones, y se está convirtiendo rápidamente en un mandato para los Directores Financieros, considerando que actualmente la mayoría de los equipos de RA reportan a ellos. Teniendo en cuenta que las Fugas de Ingresos tienen un impacto directo en el crecimiento de los ingresos, el rol del Director Financiero consiste ahora en tomar una postura proactiva en el tratamiento de cualquier error o pérdida.

_Evaluar los riesgos y desarrollar medidas para prevenir las violaciones de seguridad.

Al igual que las Fugas de Ingresos, las violaciones de seguridad y el fraude de telecomunicaciones pueden costarle mucho a los operadores, y es un obstáculo para asegurar que los Directores Financieros mantengan un balance sólido. $ 38.1 billones (USD) fueron perdidos por fraude en 2015 y, aunque el número está disminuyendo, las Telcos siguen sintiendo el impacto de perder dinero por fraude, y la tarea de resolver esto recae en el Director Financiero.

_Aumentar los Gastos de Capital durante un período de disminución de ingresos.

Una reciente encuesta realizada por TMForum, dirigida por Subex, reveló las siguientes conclusiones:
• 1 de cada 3 operadores no mide los rendimientos de la inversión en CAPEX.
• 77% de los encuestados considera que la utilización inadecuada de los activos lleva a un aumento de los costos.
• El 55% de los encuestados cree que la planificación de red se basa en suposiciones.
• El 64% cree que la planificación de capex está impulsada por la tecnología y no por los objetivos del negocio.

Por otra parte, los ingresos globales de CSP disminuyeron un 5,3% para el año terminado en marzo de 2016, mientras que el gas Responder a la volatilidad y velocidad de cambio

Las señales indican que los ingresos de los servicios tradicionales se estabilizarán en los próximos 10 años. De hecho, algunos analistas anticipan que los ingresos de los servicios de comunicaciones tradicionales se reducirán en un 50% respecto de los niveles actuales en 2025. Esto significa que los CSP deben adoptar la revolución digital y ya no pueden seguir siendo tontos sino que deben ser vistos como tubos inteligentes Al ofrecer servicios digitales y ser vistos como DSPs o incluso LSPs (Lifestyle Service Providers)to de capital aumentó, elevando los gastos de capital (capex/ingresos) a 19,8% para el año.

_Aumento de la competencia, incluso de los jugadores OTT.

Según Ovum, se espera que cueste a las Telcos un total combinado de $386 billones entre 2012 y 2018.

_Responder a la volatilidad y velocidad de cambio.

Las señales indican que los ingresos de los servicios tradicionales se estabilizarán en los próximos 10 años. De hecho, algunos analistas anticipan que, para 2025, los ingresos de los servicios de comunicaciones tradicionales se reducirán en un 50% respecto de los niveles actuales. Esto significa que los CSPs deben abrazar la revolución digital, y ya no pueden permanecer como conductos bobos, sino que deben ser vistos como tubos inteligentes que ofrezcan servicios digitales, y ser vistos como DSPs o incluso como LSPs (Lifestyle Service Providers).

¡Y los retos no terminan ahí! Hoy en día, los Directores Financieros necesitan dedicar más tiempo y esfuerzo a gestionar el futuro en lugar de residir en el pasado y, por lo tanto, necesitan analizar aún más los datos analíticos para conectar los puntos y predecir el futuro. Para su ventaja, los Directores Financieros de telecomunicaciones poseen cantidades de datos sin precedentes, de múltiples fuentes, incluyendo datos de clientes y datos de red, y pueden aprovechar estos datos a través del poder de las analíticas de telecomunicaciones.

Si se aprovecha de la manera correcta, mediante la aplicación de analítica avanzada, los Directores Financieros de telecomunicaciones serán capaces de abordar los desafíos que enfrentan y lograr resultados empresariales que se alineen con su agenda, a través de la generación de conocimientos de telecomunicaciones accionables. Los Directores Financieros podrán tener una visión de 360 grados de su contexto de negocios e identificar e incluso predecir proactivamente los problemas, oportunidades y amenazas, y les ayudará a abordarlos antes de las auditorías internas. Por estas razones, ahora se ha convertido en el mandato del Director Financiero conducir analíticas para la toma de decisiones tanto estratégica como operativa.

Mediante la generación de Conocimiento de Telecomunicaciones, una Solución de Analítica Avanzada puede ayudar a los Directores Financieros a satisfacer las crecientes expectativas que se les imponen en los cambios en sus roles, permitiéndoles:

_Proactivamente predecir y dirigir recursos para contrarrestar los riesgos y aprovechar las oportunidades.
_Reducir la incertidumbre al prever los cambios disruptivos, y responder y adaptarse para crear oportunidades de crecimiento.
_Predecir Fugas de Ingresos y Fraudes para enfrentar los riesgos de manera proactiva.
_Predecir las redundancias y reasignar los presupuestos para reducir y controlar los costos.
_Aumentar el impacto de las decisiones de precios y promociones mediante la optimización.

La solución Analítica Avanzada de Telecomunicaciones tiene el alcance de ayudar a los Directores Financieros de los operadores de telecomunicaciones a cumplir los objetivos de negocio de manera drástica, e incluso hemos visto o, mejor dicho, ayudado a un CSP de Nivel 1, basado en Norteamérica, a ahorrar costos, simplemente ayudándoles a resolver disputas. A través de la generación de conocimientos de telecomunicaciones, la asociación ayudó al CSP a mejorar su ratio de predecir y resolver disputas a 9x, lo que a su vez les ayudó a ahorrar hasta unos millones de dólares. Este es el poder de la solución Analítica Avanzada de Telecomunicaciones.

Para obtener más información sobre cómo los Directores Financieros pueden aprovechar las analíticas de telecomunicaciones para maximizar los ingresos y mitigar los riesgos, vea la grabación del webinar “No te quedes atrás: una guía de Directores Financieros para aprovechar las analíticas avanzadas”, el 16 de febrero.

January 25, 2017
Why Analytics is the Answer for the Modern Day CFO?
As Gordon Gekko from the movie Wall Street (1987), rightly said, “The most valuable commodity I know of is information.” Fortunately for telecom operators and their Chief Financial Officers, they possess no dearth of this ‘valuable commodity’, which they can leverage through telecom analytics

Find out how CFOs can leverage their data through telecom analytics, by gener to make better decisions to drive growth and mitigate risks by viewing the recording of the webinar on ‘Don’t Get Left Behind – a CFO Guide to Leveraging Advanced Analytics’, which took place on December 14^th.

But let’s take a step back for a moment.

The telecom world as we know it is evolving, and with it, the role of the CFOs has also been undergoing a drastic change. His role is no longer confined to be solely focused on past performance, on the numbers, and on financial reporting, but the mandate seems almost universally to have been exceeded, with the CFO needing to also provide information about where the business is going and how quickly it is getting there. [1]

The CFOs involvement in corporate strategy has also become an integral part of the job, with CFOs now having the ability and the mandate to contribute directly to the direction of the business as well as reviewing and reporting on its performance1. This all means that today’s CFOs need to be more strategic and need to ensure that there is better alignment with strategic business imperatives and this requirement puts the CFO at the focal point for not just financial reporting but also managerial reporting, along with his core objective of maintain a strong and healthy balance sheet.

But, as we know, the dynamic nature of the telecom environment places multiple hurdles in the face of the modern day CFO, which include, but are not restricted to the following:
- CFOs today need to ensure that they are able to increase margin and earnings performance
  - It is a well-known fact that ARPUs have been steadily declining in every region of the world, and coupled with slow revenue growth is leading to a steady erosion of margins since 2010 in most regions[2]. In the midst of these challenges, the mandate of CFOs to increase margins and earnings performances in becoming increasingly critical, and difficult.
- Organisational attempts at growing revenues are being deflated by errors and leakage
  - Addressing Revenue leakages are a major concern for telecom operators[3], and is quickly becoming a CFO mandate considering currently most RA teams ultimately report to the CFO[4]. Considering that revenue leakages have a direct impact on revenue growth, it is now the role of the CFO to take a proactive stance in addressing any errors and leakages.
- Assessing risks and developing measure to prevent security breaches
  - Like Revenue Leakages, security breaches and telecom fraud can cost operators heavily, and is an obstacle in the way of ensuring CFOs maintain a strong balance sheet. $38.1 Billion (USD) was lost to fraud in 2015, and though the number is decreasing YoY, telcos are still feeling the pinch of losing cash to fraud, and the task to resolve this lies with the CFO.
- Increasing Capital Expenses during a period of decreasing revenues
  - A recent survey that was conducted by TMForum led by Subex revealed the following findings:
    
    1 in 3 operators do not measure returns on CAPEX investment
    
    77% of the respondents believed that inadequate asset utilization leads to increase in costs
    
    55% of the respondents believed that network planning is based on guesses
    
    64% believed that capex planning is driven by technology and not business objectives
Moreover Global CSP revenues declined by 5.3% for the year ended March 2016, while capex increased, pushing up capital expenses (capex/revenues) to 19.8% for the year.[5]
- Increasing competition, even from OTT players
  - Which according to Ovum, is expected to cost Telcos a total combined $386 billion between 2012 and 2018
- Responding to the volatility and velocity of change
  - The signs are that revenues from traditional services will plateau over the next 10 years. Indeed, income from traditional communications services is anticipated by some analysts to decline by 50% from current levels by 2025. This means that CSPs need to embrace the digital revolution, and can no longer remain as dumb pipes but need to be seen as smart pipes by offering digital services and be seen as DSPs or even LSPs (Lifestyle Service Providers)
And the challenges don’t just end there! Today CFOs need to spend more time and effort managing the future rather than dwelling in the past, and hence need to take an even closer look at data analytics to connect the dots and to predict the future. To their advantage, telecom CFOs possess unprecedented quantities of data, from multiple sources including customer data and network data, and can leverage this data through the power of telecom analytics.

If leveraged in the right way, by applying advanced analytics, telecom CFOs will be able to address the challenges they are facing, and achieve business outcomes that align with their agenda, through the generation of actionable telecom insights. CFOs will possess the power to have a 360 degree view of their business context and identify and even predict issues, opportunities and threats proactively, and will help them address them before internal audits. For these reasons, it has now become the mandate of the CFO to drive analytics for both strategic and operational decision-making.

By generating Telecom Insights, an Advanced Analytics Solution can help CFOs to meet the increasing expectations placed on their changing roles by enabling them to:
- Proactively predict and direct resources to counter risks and leverage opportunities
- Reduce uncertainty by predicting disruptive changes and respond and adapt to create growth opportunities
- Predict revenue leakages and fraud to proactively address risks
- Predict redundancies and reallocate budgets to reduce and control costs
- Increase impact of pricing and promotion decisions through optimization
Advanced Telecom Analytics has the scope of helping CFOs of telecom operators meet business objectives drastically, and we have even witnessed, or rather helped a Tier 1 CSP, based in North America save costs by purely helping them resolve disputes. Through the generation of telecom insights, the partnership helped the CSP improve their hit ratio of predicting and addressing disputes to 9x, which in turn helped them save up to a few million dollars. Thus is the power of Advanced Telecom Analytics.

To find out more about how CFOs can leverage telecom analytics for revenue maximization and risk mitigation, view the recording of the webinar on ‘Don’t Get Left Behind – a CFO Guide to Leveraging Advanced Analytics’, on December 14^th.

[1] https://www.ey.com/gl/en/issues/managing-finance/the-dna-of-the-cfo—perspectives-on-the-evolving-role—the-cfo-s-contribution

[2] https://www.strategyanalytics.com/strategy-analytics/news/strategy-analytics-press-releases/strategy-analytics-press-release/2015/01/23/global-trends-for-mobile-operators-show-stagnant-revenues-and-declining-margins#.WD-iJeZ9600

[3] https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/global-revenue-assurance-survey/Documents/global-revenue-assurance-survey.pdf

[4] https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/global-revenue-assurance-survey/Documents/global-revenue-assurance-survey.pdf

[5] https://www.ovum.com/research/communications-service-provider-csp-revenue-capex-tracker-1q16/
December 23, 2016
Does a Digital Lifestyle offer Operators opportunities, or is the path more ominous?

It stands to reason that the Digital lifestyle of consumers will dramatically impact how operators generate revenues over the next 10-15 years. Transformations are taking place that will move activities, entertainment, commerce, healthcare, transportation, and most other aspects of our lives into Digital modalities. This has invited thousands of micro-providers of applications and networks into the mix, quickly marginalizing the value of the operator to merely an “enabling pipe.” This puts the operator into a competitive situation, ultimately impacting margins. But that’s only on the revenue side of the equation… the story could become far more complex.

For an operator, the days of 25%-40% EBIDTA are waning, if not almost gone (in many regions). Pressures on pricing remain downward, with new product offers being the primary method to sustain acceptable revenues and margins. This has opened the door for some impressive creativity by many operators, especially in developing markets. In many cases no market appears off limits, as seen by the offerings by progressive organizations like MTN in Africa: Who would have anticipated an operator would offer personal transportation services rivaling Uber?

These seemingly odd moves are, in fact, brilliant moves by operators to seek new sources of revenues as their businesses are being redefined by the digital services we are quickly becoming reliant on. The impacts on revenue models due to this change in the business are stunning: Traditional billed services like voice, and even data, are fading in importance. Revenue models are instead focusing more on casual services, pay-per-use services, marketplace services, etc. Put more simply, the “pipe” is no longer where the earning potential lies for the operator.

So now a previously non-agile, large operator business is finding itself competing with, and in many cases partnering with, literally thousands of aggressive, hungry micro-entities that provide products and services accessed by the networks. There is less reliance on monthly guaranteed revenue; the battle for revenue very often resides in millions of micro-transactions.

All of the discussion cannot focus entirely on revenues, however. Margins are also sustained by costs. Agility, therefore, must exist on the cost side of the operator business. In the old world of monthly recurring and predictable revenues, costs could be managed and allocated more confidently. Opex and Capex planning and forecasting practices were based on budgeting with a high degree of certainty. But as revenues models are changing, so must cost models. Where possible, operators will need to employ similar creativity to curbing costs, as they are with earning revenues.

How can operators, therefore, modify cost models in the business to be as aggressive and variable as the revenue models they rely upon? This is where the opportunities for SDN/NFV networks can shave significant costs, while changing operator cost models in ways that were not previously achievable.

Software-Defined Networks (SDN) and Network Function Virtualization (NFV) will allow operators to provide Network-on-Demand and Service-on-Demand models to consumers, while effectively minimizing, if not eliminating the need for human intervention. The costs associated with truck rolls, call centers, and expensive specialized network equipment will be dramatically reduced, resulting in decreased Opex and Capex burdens on the business. The savings need to expand further, however.

In current cost models, operators must deploy and maintain network services around the clock, which consumes significant and ongoing expenses. However, if a network is based on SDN/NFV architectures, the deployed services are no longer in a fixed position in the network, simply because they are now software-defined and/or virtualized. This means an intelligent network can move assets where needed, and when needed. These assets are capitalized as licensed instances; so now an operator can have a pool of 1,000 licenses for a virtual service, and deploy them only as necessary.

This type of dynamic deployment model should allow operators to negotiate dynamic cost models as well; imagine only paying for a license when you have it deployed (and it is generating revenue). While this idea may seem far-fetched, consider that now the network functions we are discussing are no longer controlled by a few network equipment and function providers; micro-entities (application developers) can now produce those functions, often at far less expensive price points.

The business transformations taking place in operators globally are forcing entirely new ways of addressing margin pressures, as the revenue and cost variables operators have historically used are no longer the same. Looking beyond margins in consumer-facing products and services, new network cost models must be explored, especially since those models were based on what is now an outdated means to earn revenues.

December 22, 2016