mobile operator guide - innovation and transformation

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SAP Mobile Services

Mobile Operator GuideInnovation and Transformation

Second Edition

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Mobile Operator GuideInnovation and Transformation

SAP MobilE SErvicES

32

Mobile Operator Guide Innovation and Transformation


Published by SAP Mobile Services Sybase, an SAP Company 1 Sybase Drive Dublin, CA 94568 USA

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Library of Congress Cataloging-in-Publication Data

SAP Mobile Services Mobile Operator Guide: Innovation and Transformation

Edited by Charles Campbell-Jones p. cm.

ISBN 978-0-9885886-9-1

1. Mobile technology. 2. Mobile operators. Library of Congress Control Number: #2014936712

Printed in the United States of America

Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

TAble of CoNTeNTS

9 Simplifying Complexity Drives InnovationBy Sethu M, President, SAP Mobile Services

12 PArT 1: iNTroDUcTioN 13 Seizing Opportunities in the Digital World

As communications service providers continue to face increased competition, declining revenues, and margin pressure, they need to turn to new ideas to help them achieve long-term success. By Stephan Gatien, Global Head, Telecommunications Industry Business Unit, SAP

17 Worldwide Mobile Overview TrendsThe mobile themes for 2014 are the continued adoption of mobile broadband, the growth of connected devices in retail and the automotive sector, and the strong growth of enterprise mobility. By Courtney Munroe, Group Vice President, Worldwide Telecommunications, IDC

20 PArT 2: 2014 THEMES21 The Many Facets of LTE

LTE/4G is set to make a much bigger impact than 3G did. Consumers want next-generation services, devices are ready, and operators will gain many new benefits by moving to this next mobile standard. By Diarmuid Mallon, Director, Global Marketing Solutions and Programs, Mobile, SAP

26 The IPX, LTE, and RCS: The Trifecta for Mobile Operator SuccessMobile operators are poised to take on the OTTs through next-generation data services. By Matthew Tonkin, Vice President Sales, SAP Mobile Services

32 Blurring the Lines Between A2P and P2P Messaging SMS hubbing is evolving, and messaging capabilities and subscriber messaging plans will need to adapt. By William Dudley, Group Director, Mobile Evangelist and Global Solutions, SAP Mobile Services

http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark

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38 Deriving Value from Big DataThe amount of data being collected by mobile operators is accumulating fast. Operators now need to realize the full value of this store of information and start monetizing it. By Kevin Outcalt, Vice President, Mobile Analytics and Consumer Insight, SAP Mobile Services

42 PArT 3: EMEA43 EMEA’s Rapidly Changing Market

Regional differences are still prevalent when it comes to mobile communications. The issues, challenges, and opportunities facing the countries of Europe, the Middle East, and Africa (EMEA) are unique to the region. By Mark Weait, Vice President, SAP Mobile Services

48 VoLTE: An Essential Part of Every Operator’s LTE StrategyVoLTE will continue to make steady progress, and 2014 is likely to be a big year for deployments. By Dan Warren, Senior Director of Technology, GSMA

51 Multimedia Content on LTE DevicesCan mobile service providers get a piece of the pie? By Michael Van Veen, Group Director IPX, SAP Mobile Services

54 SMS MonetizationSimplify your SMS business model with the right partner to ensure maximum SMS monetization. By Toni Eid, Founder and Editor-In-Chief, Telecom Review

58 Maintaining Privacy in the Age of Big DataMobile networks are producing huge amounts of data on consumer behavior and habits which are a treasure trove to marketers looking to understand and capture new customers. How do you balance this “big data” influx with customer privacy? By Guy Rolfe, Head of Global Mobile Practice, Kantar

61 The IPX: The Time is NowHigh-speed networks, new-capabilities devices, new competition from online service providers, and more demand for IP-based services are challenging the status quo. The IPX is part of the solution. by Philippe bellordre, Project Manager, Future of Interconnect, GSMA

65 LTE Roaming Market DevelopmentsLook for 2014 to be the year when LTE roaming becomes a crucial element of LTE network monetization across Europe. By Dimitris Mavrakis, Principal Analyst, Informa Telecoms & Media

70 Have Operators Decoupled Themselves from the Reality of New Roaming Regulation?Operators could be looking at changes to roaming regulation as a chance to drive mobile broadband usage, but they’re far from ready. By Ian Grant, Mobile europe

74 Data Collection’s Changing RegulationsThe European Union is looking to change and improve rules around collecting and sharing mobile consumer data. Mobile marketing has a lot at stake. If done correctly, it can fulfill the promise of one-to-one marketing. By Paul Berney, Co-Founder and Managing Partner EMEA, mCordis

78 PArT 4: AMEricAS79 Mobile Market Activity in the Americas 2013

Mobile industry continues to expand the subscriber base, add new services, and show revenue gains. By William Dudley, Group Director, Mobile Evangelist and Global Solutions, SAP Mobile Services

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Mobile operator Guide Innovation and Transformation

83 USLTEMarketOffers4GTestLabThe US mobile market has emerged as a valuable stage for testing the dynamics of LTE-driven competition. By Rich Karpinski, Senior Analyst, Yankee Group

89 The Skies Clear for IPX Delivery of Cloud-Based ServicesThe IPX establishes the network connectivity and the necessary quality for cloud-based services – and it reduces time to market and decreases initial capital investments. By Rich Lindstrom, Sales and Business Development, IPX/RCS/LTE Roaming, SAP Mobile Services

92 Ramping Up LTE in Latin AmericaTelefónica is in the early stages of building out its Long Term Evolution (LTE) network in Latin America, a market poised to grow by leaps and bounds in the next five years. By Pablo Alfageme, Head of Business Development, Latin America, Telefónica Global Roaming, Telefónica

96 Exploiting the Operator Big-Data Dilemma for the Future Digital EconomyMobile changes consumer behaviors. By Sheryl Kingstone, Director, Mobile Leadership Strategies, Yankee Group

102 Scam-BustersHow SMS phishing uses area codes in credit union, bank, and child support scams. By Neil Cook, Chief Technology Officer, Cloudmark

108 The Next Wave of Text Messaging Get ready to communicate via SMS to any phone number, whether it’s mobile, landline, or toll free, and from non-phone devices like your PC, laptop, tablet, and TV. By John Lauer, CEO, Zipwhip

112 Move Over SMS, Here Comes RCS Mobile operators are planning for Rich Communications Services to regain market share lost to free over-the-top services. It’s time to put aside competition and co-operate over standards and internetworking. By Adrian Synal, Principal Engineer, System Design and Strategy, T-Mobile USA

116 OTTs Take Up the Mantle of Communications InnovationWith texting and chatting becoming free commodities, how do over-the-top players innovate and stand out in a crowded field? By Greg Woock, Co-Founder and CEO, Pinger

120 PArT 5: ASiA121 Asia-PacificStaysinFrontoftheTelecomsRace

Operators respond to declining revenues and increasing competition from OTT providers with LTE roaming, RCS, and monetization of mobile consumer data to stay ahead of the game. By Matthew Tonkin, Vice President Sales, SAP Mobile Services

125 VoLTE and RCS: Network Evolution and Services RevolutionElements and roadmap for successful implementation of VoLTE and RCS. By Sachin Bagul, Senior Manager, Product Strategy and Marketing, Mavenir Systems

128 Best Practices for LTE RoamingSix technology and operational considerations for operators undertaking LTE roaming. By Russell J. Green, CTO and Vice President Technology Group, SAP Mobile Services

132 LTE Roaming Grows in SingaporeRoaming represents a growth area for mobile operators, who see LTE as a way to meet the diverse needs of a wide variety of subscribers, including the budget-conscious as well as the tech-savvy. By William Ku, General Manager, International Business, StarHub Ltd

136 The Wide, Wide World of the IPXThe IPX delivers end-to-end management and quality of service for voice and other essential IP services such as roaming for high-speed mobile data. By Michael Van Veen, Group Director IPX, SAP Mobile Services

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Simplifying Complexity Drives InnovationBySethu M,President,SAPMobileServices

We have always lived in a world of complex systems. Our ecosystem’s diversity is unique, and that variety makes for some lively debates among its constituents. As always, we are evolving by sharing our points of view and our ideas, creating new perspectives while debating the merits of them. This makes complex things simple and simple things automatic.

ForEWorD

This guide helps to evolve complex systems by bringing together new perspectives and different points of view. We have rounded up thought leaders from every region of the telecoms ecosystem to analyze what has happened in the recent past and to look forward to what is coming our way.

Amid the differences, there is consensus that change is the overarching theme. The telecoms sector reinvests 15% of its revenue into research and development. Only one other industry, pharmaceuticals,

pours more into R&D. You can see the evidence of these investments in the fast-paced developments of 2G, 3G, and now 4G.

As we move to 4G, competition will become more heated. The up-and-coming initiatives of Rich Communications Services (RCS), LTE roaming, Voice over LTE (VoLTE), and P2P and A2P messaging will blur the lines between traditional service providers and over-the-top players while adding complex-ity to integration, product management, and pricing. Operators will constantly be

140 Asian Giants Catching Up with the Global LTE Leaders LTE continues to gain converts as it moves across continents picking up subscribers. One-third of the subscribers are in China and India. By Sohag Sarkar, Manager, Strategy and Operation – Technology, Media and Telecom, KPMG Advisory Services

150 Tapping Into the DataAxiata is embarking on a project to put its wealth of customer data to work. By Karan Henrik Ponnudurai, Chief Innovation Officer, Axiata Digital

154 contributor companies

160 Acknowledgements

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balancing between collaborating with their partners-sometimes-competitors to improve their position and at other times flying solo to move to the front of the pack.

This guide will help everyone in the telecoms ecosystem better understand the coming mobile services from both a technical and an industry perspective. You will get an up-close-and-personal look at the innova-tion and transformation that is happening today among mobile operators, providers, and their partners from an international team of contributors.

loNG TErM EvolUTioN: rEADy For 4G AND bEyoND

If you’re curious about LTE, read about this “next big thing” from all sides; what it means for consumers, operators, the ecosystem, and technology in “The Many Facets of LTE.” For an interesting overview of upcoming services available through LTE read “IPX, LTE, and RCS: The Trifecta for Mobile Operator Success.” And to get a market backdrop, Yankee analyst Rich Karpinski weighs in on LTE in the Americas (“US LTE Market Offers 4G Test Lab”), while KPMG’s Sohag Sarkar brings an Asian perspective

to LTE (“Asian Giants Catching Up with the Global LTE Leaders”).

FrEEDoM To roAM

New subscribers to LTE will move frequently across networks. LTE roaming is a must-have, and work is underway to make the service seamless; Informa analyst Dimitris Mavrakis tackles the global market (“LTE Roaming Market Developments”), while StarHub’s William Ku describes what is happening in his own backyard (“LTE Roaming Grows in Singapore”). And, take a practical, real-world view in “Best Practices for LTE Roaming.”

SErvicES WiTH loNG-TErM APPEAl

LTE subscribers will expect familiar stand-ards like voice and text as well as options for video chat, location services, and presence. Mavenir Systems' Sachin Bagul looks at another service enabled by LTE, VoLTE (“VoLTE and RCS: Network Evolution and Services Revolution”), and the GSMA’s Dan Warren adds his voice to its future (“VoLTE: An Essential Part of Every Opera-tor’s LTE Strategy”). New services such as RCS promise to return to operators

revenues that over-the-top players have been siphoning off. T-Mobile’s Adrian Synal sees RCS gaining prominence over the familiar SMS a few years out (“Move Over SMS; Here Comes RCS”).

GET THE bENEFiTS oF MEMbErSHiP AT THE HUb

Underpinning all these services is hubbing. The GSMA’s Philippe Bellordre makes a case for IPX hubbing in “The IPX: The Time is Now.” We also look at successes hubs are having with messaging in “Blurring the Lines Between A2P and P2P Messaging.” Still think hubs are onerous? In “Scam-Busters,” Cloudmark’s Neil Cook describes how hubs add a layer of protection that can help oper-ators pursue and catch targeted phishing.

ANAlyTicS THAT iNFlUENcE AND MoTivATE

Gathering consumer insight is always a con-versation starter. Mobile operators have access to an incredible amount of data. How can the ecosystem leverage this information in ways that appeal to consumers and main-tain their privacy? Kantor’s Guy Rolfe takes

that topic on in “Maintaining Privacy in the Age of Big Data.” As the rules around big data are changing rapidly, Paul Berney of mCordis offers an update on potential European changes that could have global impacts.

As you can see, there’s something here for everyone. We have a vibrant set of voices in the telecom community with plenty of opinions and ideas. If you have something you want to add to the conversation, go to http://bit.ly/1hry3fn

Enjoy.

Sethu M. is President of SAP Mobile Services. With more than 25 years of experience in enterprise system software development and management, Sethu is focused on finding opportunities that extend customers’ strategic goals. His work with customers includes providing technology industry intelligence, managing business services and IT assets, and leveraging tech-nology trends and SAP’s new technologies in big data, mobile, machine to machine, information management, and social media.

http://bit.ly/1hry3fn

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Today’s digital ecosystem provides many ways to make our lives easier. Whether it’s getting directions from the latest smart-phone or being able to use a mobile wallet, things we could only imagine just a few years ago are now possible.

This new digital world offers great opportunities for communications service provid-ers, and a number of major operators around the world have already created separate entities focusing specifically on digital services. AT&T Digital Life, Telefónica Digital, and SingTel’s Group Digital Life are just few examples of large industry players that are actively looking for ways to grab a bigger share of the digital pie.

However, to date, the most successful digital services have come from non- traditional players such as Google, Apple, and Facebook, the so-called over-the-top (OTT) providers that have been able to quickly develop, release, and gain

broad adoption of new and interesting services. By doing so, they have been able to reinforce the image of telecom companies as just a “dumb pipe” provider with limited innovation power.

It is crucial for communications service providers to dispel this notion in order to establish themselves profitably as the epicenter of the new digital economy. Here are a few key areas where established com-munications service providers can stake their claim in the digital world:

GoiNG ovEr THE ToP

Communications service providers have had to deal with OTT players for several years now – social media apps such as Facebook, Instagram, and Twitter; commu-nications upstarts such as WhatsApp, Viber, Skype, and Snapchat; video alternatives such as Netflix, Hulu, and YouTube (owned

Seizing Opportunities in the Digital WorldAs communications service providers continue to face increased competition, declining revenues, and margin pressure, they need to turn to new ideas to help them achieve long-term success. By Stephan Gatien, Global Head, Telecommunications Industry Business Unit, SAP

PART 1: INTRODUCTION

PArT 1: iNTroDUcTioN

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by Google). The OTT threat has been some-thing to take seriously, diverting billions of revenue from them in the recent years.

The very recent acquisitions of WhatsApp and Viber (by Facebook and Rakuten respec-tively) clearly demonstrate that the pressure exerted by large OTT players will continue to increase as consolidation takes place.

But telecoms operators are in a bit of a conun-drum regarding these companies, which use existing mobile infrastructure to get their services to customers. Do they go head-to-head against the OTT players, or do they instead strike a “co-opetition” deal and work alongside them to reap some of the benefits?

On the partnership side, communications service providers may want to consider agreements that complement their existing offerings rather than those that involve com-peting products. In return, operators can consider opening their networks via APIs to monetize their network and customer data.

Operators are also looking at launching their own OTT services to secure additional revenue streams. But due to the inroads already made by established OTT players, getting these

services off the ground may be difficult. If they are to succeed, operators should make sure to differentiate their services and the value they provide to the customer.

AiMiNG For THE cloUD

Another big opportunity to create new revenue streams for communications service providers is in the area of cloud services. Over the past several years, the telecoms industry has seen a number of cloud-based acquisitions and partner-ships; for example, NTT acquired Virtela and RagingWire. Operators have also been bolstering their portfolios by offering enterprises services such asinfrastructure- as-a-service (IaaS), platform-as-a-service (PaaS), application hosting, data center capabilities, and unified communications. A case in point is Telefónica, which has launched IaaS for mobile, enterprise, and M2M.

The cloud makes a lot of sense for telecom operators, which will be able to fully leverage the platform for seamless, integrated any-time-and-anywhere services and content. Looking forward, operators have the poten-tial to evolve into cloud “rainmakers” due

to their perfect positioning to serve the B2B cloud market, horizontally for specific segments such as SMB, functionally with dedicated functional services such as HR or procurement, or vertically with cloud-based industry specific scenarios. They are also in a perfect position to enable B2B2C scenarios. By extending their network management capabilities into a cloud management and delivery infrastructure, service providers can establish themselves as trusted partners for cloud services.

MAkiNG SENSE oF biG DATA

In a connected society, as the volume of data being collected continues to grow dramatically, gaining insight from this “big data” represents a formidable opportunity for communications service providers.

On one hand, this insight can have a direct impact on the quality and level of personal- ization of each customer experience. By analyzing the services consumed by subscribers, the network experience they get while using the service, and the devices they use to do so, service providers can learn how to best interact with each customer and

how to tailor unique offers and activities to each individual.

On the other hand, opportunities will increasingly emerge to monetize the data collected by service providers in domains such as subscriber behavior, services consumed, and geo-location activities. Despite the sensitivity of some of this data, it is widely believed that the data mone-tization space can represent a significant new revenue stream for telecoms opera-tors. Initially, subscriber opt-in models or anonymized and aggregated insight (for example, by geo-location fence and time slice) will likely represent the most effective strategy for communications service pro-viders to start their journey in this domain.

THE cENTEr oF THE DiGiTAl UNivErSE

Communications service providers have a distinct advantage in the digital world. Most of them have strong name recogn- ition, are trusted partners, and hold close relationships with their customers. But to fend off advances by aggressive new entrants or OTT players and reverse the trend of declining revenues in their

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The mobile sector has become the most important global communications medium, generating over 60% of global networking revenues in 2013. Most importantly, mobile technology and adoption is a dynamic cultural and socio-economic phenomenon. The proliferation of connected devices, in part facilitated by the mobile infrastructure, will transform all industries and human insti-tutions for decades into the future. During 2014, key mobile themes will include the continued adoption of mobile broadband, the growth of connected devices in retail and the automotive sector, and the strong growth of enterprise mobility.

The mobile market continues its steady growth, and IDC is projecting continued annual growth in subscriptions of 6% over the next five years. Global mobile subscrib-ers will grow from 6.6 billion at the end of 2013 to 8.5 billion by the end of 2017. This growth is driven by the increasingly popularity of smartphones, which will top one billion units shipped during 2013. Smartphones comprised 55% of all mobile phones shipped in 2013, and will continue to increase their market share. Asia-Pacific

will continue its reign as the overall market leader; sheer size, first-time user oppor-tunity, ongoing replacements, and an appetite for smartphones are the factors driving volumes in this region. Europe, the Middle East, and Africa (EMEA) will follow next with just over a quarter of all mobile phone shipments. Latin America will extend its lead over North America in 2014, while North America will show flat growth throughout the forecast period.

Broadband-capable devices will have a tremendous impact on the overall mobile ecosystem. This is evolving from the con-sumer to the enterprise sector as well, where a “mobile-first” strategy of deploying mobile devices to the workforce is emerging. 3G phones will still represent the majority of all mobile phones shipped until 2015, but with more 4G networks going live, the number of 4G mobile phones is expected to grow 10 times faster than mobile devices overall. Mobile operators are working fever-ishly to keep up with demand of mobile data traffic, which IDC estimates will grow nine-fold over the next few years, from approximately 100 MB to 1 GB per month per subscriber by

Worldwide Mobile Overview TrendsThe mobile themes for 2014 are the continued adoption of mobile broadband, the growth of connected devices in retail and the automotive sector, and the strong growth of enterprise mobility.By Courtney Munroe, Group Vice President, Worldwide Telecommunications, IDC

PArT 1: iNTroDUcTioN

core business of voice and messaging, they need to think outside the box and reinvent themselves.

The strategies outlined are just a few of the options available to telecoms providers to establish themselves at the center of the digital world and to transform. The potential rewards are huge but the risks of commoditi-zation are real. It is time to be bold.

Stephan Gatien is Global Head of the Telecommunications Business Unit at SAP. In that capacity, he is responsible for the vertical portfolio strategy in Telecommu-nications, oversees related solution man-agement activities, and leads the industry go-to-market initiatives globally. He has a broad background both in the commu-nications industry, including assignments for wireless carriers, and in SAP, including assignments in Corporate Strategy, Sales, Solution Management, and Operations.

Share your comments, thoughts, and updates to this article — join the conversation here: http://bit.ly/1iuPUAB

By analyzing the services consumed by subscribers, the network experience they get while using the service, and the devices they use to do so, service providers can learn how to best interact with each customer and how to tailor unique offers and activities to each individual.

http://bit.ly/1iuPUAB

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2015. According to the Global Mobile Suppliers Association (GSA), as of January 2013 there were a total of 145 LTE networks operating in 66 countries. This is expected to grow to over 200 networks commercially launched in 75 countries by the end of 2013.

Tv EvEryWHErE: THE iMPAcT oF viDEo

The ongoing strong global demand for smartphones and media tablets continues to grow the addressable market for mobile and multiscreen video services, and con-sumers adopting these devices have been increasingly using them to access video content both streamed and downloaded from the internet. Consumer video services continue to evolve beyond traditional con-sumption platforms. In China, more than 30% of users consume more content online than over broadcast networks. Online, or over-the-top (OTT), services have moved well beyond the PC as smartphones and tablets reshape the consumer internet. At the same time, multichannel pay TV services, previously tethered to the tele- vision typically via a set-top box, are now moving toward PC, smartphone, and tablet distribution as part of TV Everywhere (TVE)

strategies. On a global level, by the end of 2012 over 180 million mobile phone and tablet owners used their devices on at least a monthly basis to stream TV shows and movies. Viewers of downloaded TV shows and movies topped 94.2 million smart-phone and 35.7 million tablet users. These numbers will continue to grow as more operators implement Rich Communications Services (RCS).

Big data and business analytics have been adopted by many mobile operators to help them clarify a diverse list of issues. These include internal issues such as network performance and customer experience, as well as external, customer-facing issues such as transforming call detail record (CDR) and end-usage patterns into new revenue-generating services. Operators have a wealth of data available at their disposal, including CDRs, transactions, customer correspondences, and GPS and Wi-Fi usage data. Another major source of data that is being actively mined is social media, such as Twitter and Facebook. Early adopters include Telefónica Digital, which has introduced Smart Steps, a product that leverages anonymized and aggregated mobile network data to

provide extrapolated demographic data which can then be sold to enterprises and government agencies. Verizon Mobile’s Precision Market Insights also leverages anonymized mobile data to help the retail sector refine its marketing strategies.

During 2014 the Internet of Things will have a profound impact on the mobile ecosystem. Several verticals will lead this revo-lution, including connected automobiles and consumer wearables and the connection of smart cities. IDC is projecting, by 2020, a market of 30 billion connected devices which will in turn spawn a rich market of supporting devices, applications, connectivity, and IT support services.

Mobility in the enterprise segment will continue to evolve during 2014. “Bring your own device” (BYOD) will give way to a more manageable “choose your own device” (CYOD) from a restricted pool of corporate supported devices. As the mobile-first strategy gains momentum in the enterprise segment, an integrated approach to manag-ing mobile devices and applications will be important to companies. While the initial customer hook may be around a point solution, the core components of mobile

enterprise software – security, manage-ment, and apps / app development – are rapidly converging, and as the enterprise mobility market matures customers are going to be looking for companies that can provide them with a solution-oriented approach. Most importantly, mobility will be an integral aspect of Enterprise IT, one that shares the same roadmap as cloud and network and infrastructure.

Courtney Munroe manages global telecom-munications research at IDC. This includes end-user consumer and enterprise demand-side trends, as well as CSP strategies and transformation. He has more than 20 years’ experience as an industry analyst and con-sultant, and is a frequent speaker at industry events around the world. Twitter: @ccmunroe

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1d6eGYu

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LTE, short for Long Term Evolution, is the next big thing. It’s a part of 4G, the fourth generation of mobile technology. Carriers around the world have upgraded – or are in the process of upgrading – their networks to the new technology.

In many ways it could not have come at a more appropriate point in time. Develop- ed markets are at saturation point, with 100%–plus market penetration rates, and operators facing both price erosion and competition from new non-telco entrants into the mobile ecosystem. Against this background, current networks are at times overloaded for voice and data services as available capacity is taken up by increased use of smartphones and apps. And finally, in highly regulated markets (such as the EU) new pricing pressures are put on many

services and in particular on reducing the costs for roamers.

While some past technologies have seemed to be answers to questions no one is asking, it seems that LTE is the answer (nearly) to all of these challenges.

THE coNSUMEr SiDE

For consumers there are many clear advantages to moving to these new 4G/ LTE networks.

They will be able to stream music and video, upload, download, and essentially do anything on the Web using mobile devices almost as fast as if they were at home on a (fixed) broadband connection.

PArT 2: 2014 THEMES

The Many facets of lTe LTE/4G is set to make a much bigger impact than 3G did. Consumers want next-generation services, devices are ready, and operators will gain many new benefits by moving to this next mobile standard.By Diarmuid Mallon, Director, Global Marketing Solutions and Programs, Mobile, SAP

PART 2: 2014 THEMES

Developed markets are at saturation point, with 100%-plus market penetration rates, and operators facing both price erosion and competition from new non-telco entrants into the mobile ecosystem.

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This standard, unlike previous ones, is not just focused on improving download speed, but has been designed to improve upload speed too. It supports a theoretical peak upload limit of 50 Mbps, orders of magni-tude faster than what you get from 3G.

LTE’s faster potential upload and download speed (100 Mbps or more), in turn, will give application developers more options for creating better user experiences on mobile for gaming, banking, socializing, shopping, watching videos, and more via the Web or apps. So in the future, when you use mobile banking you will be able to have a live video chat with an advisor about which loan is best for you, or doctors will be able to use telepresence on their mobile to provide con-sultations to patients anywhere on the globe.

How will LTE change the oldest telephony service: voice? With 3G, voice calls over a mobile phone are circuit switched, which means there is a dedicated circuit- to-voice session. So, even when you’re not talking the resources are dedicated to your conversation, eating up limited bandwidth and increasing the chance that the network will run out of capacity. If you’ve ever tried to make a call in a crowded space like a music festival, where too many people have to share

the available bandwidth, then you know the pain of not being able to make a call.

LTE, on the other hand, supports packet voice (Voice over LTE, or VoLTE). This is a fundamental shift, and will improve network capacity because operators can share packet voice links between many communication sessions and conversa-tions. At a crowded music festival, LTE can shuffle and re-allocate bandwidth in real time between many different callers. In effect, the pregnant pause in your con-versation doesn’t waste bandwidth.

THE oPErATor’S SiDE

From the operator perspective, LTE has a number of other advantages, most notably speed and efficiency. 4G will change both the radio interface and the core network that operators currently use for their 3G networks. LTE is an all-IP network, similar to the internet but with better reliability and quality of service. It improves call set-up time. It has a higher data-carrying capacity and a higher spectral efficiency. It also lowers the cost-per-bit for operators.

LTE is important for operators for two main reasons then. First, it will increase the efficiency of their entire network. Second, it will make their operations easier and less expensive to manage.

GrEATEr iNTEroPErAbiliTy

LTE changes the telecoms ecosystem on two more abstract levels that will affect the dynamics of the industry. First, LTE is the new common standard for further evolution of competing groups of telecom technolo-gies such as GSM and CDMA. Verizon is a CDMA operator and AT&T is GSM, so in the new LTE world these two operators will be operating on the same technological standard. Even non-3GPP access technolo-gies such as Wi-Fi complement LTE through Hotspot 2.0 air interface, and these can be imagined to interwork with LTE to enable seamless data access for the customer.

And second, in the LTE world operators will have to rely more on competitor networks to enable efficient roaming.

SMArTEr roAMiNG

Just as subscribers expect their data service to be available when they roam, they will expect the same for new 4G services.

With current networks, roaming is (basic-ally) limited to just three elements: voice, messaging, and data. How each of them is handled is independent, and often in what looks to be a fairly arcane manner. If you told two tourists on vacation that when they text each other, even when they’re sat next to each other, their text messages traveled all the way back to the home country before being sent, or the even (potentially) longer route mobile data goes, then they would be amazed. LTE enables

If you told two tourists on vacation that when they text each other, even when they’re sat next to each other, their text messages traveled all the way back to the home country before being sent, or the even (potentially) longer route mobile data goes, then they would be amazed.

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operators to rely more on visited networks to enable efficient roaming.

Operators will be able to offload roaming traffic to local operators rather than carry it around the globe. However, that can only work if there are systems supporting local offload and, more importantly, there is a higher level of trust and co-operation among operators.

With the increase of subscriber-facing services, we really need to think about service-based roaming. When you roam, video (sharing), location, presence, IM, and HD voice will now be available, in addition to voice, messaging, and data.

SiMPliFyiNG iNFrASTrUcTUrE

The traditional approach to adding a new service to a mobile network was to purchase a new network element and install it in your switch. While this approach was great for core services, there were challenges when it came to services whose demand was hard to predict, and it of course required opera-tors to keep making capital expenditure.

Now with LTE (and new infrastructure such as the IPX), there is the opportunity to simplify the network.

Moving to an all-IP network enables opera-tors to create architecturally flat networks, with few network elements in the call (sorry, data) path, which reduces cost, decreases latency, and improves reliability.

Operators will also be able to move services completely out of their networks, as the new architectures support cloud-based services. Moving services outside the cloud started with services such as SMS hubbing, but now the entire service can move away from the operators’ switch to the cloud.

Rich Communications Services (RCS) looks to be one of the first of the services that operators will deploy, but more will come. While operator services will be the first to go this way, the IPX enables services for enterprises such as video streaming to move also to the (telco) cloud.

NEW SErvicES

New services such as RCS have already got- ten a fair amount of coverage, but LTE has provision for other new services. One of the more interesting of these is LTE Broadcast.

Cell congestion is always a challenge, and particularly at large sporting events or

concerts where you have a large number of people concentrated in a relatively small area. Temporary cells and even blocking certain sites or streaming are all approaches operators take to help maintain service.

LTE Broadcast enables operators to broad-cast, much like traditional TV services, to all devices with a cell. Now, rather than worry- ing about bandwidth issues, subscribers in the stadium could be offered camera feeds, play guides, or even “referee cam” direct to their phone.

PriME TiME For 4G

LTE/4G is set to make a greater impact that any of the previous generational leaps managed. With the previous jumps, either the technology or the consumer was not ready, and so a hard sell was needed. 2.5G came with neither the right devices nor the actual capabilities to match the hype. Similarly, 3G was launched ahead of devices needed to make it a success and (to the consumer) seemed fixated on services that were of limited interest.

But LTE/4G is different. Consumers (and many smartphones) are looking for network capabilities way ahead of what

current net-works can deliver; moving to an all-IP network finally enables operators to simplify networks and not add incremental complexity. Finally, the technology will enable operators to create new services to meet consumer demand and regulatory requirements.

Diarmuid Mallon is Director for Global Marketing Solutions and Programs at SAP. This encompasses all mobile-related products and solutions from SAP, including the Mobile Services division. He has worked in mobile messaging for more than 18 years, in a wide range of roles from business development to product evangelism.

Follow him on twitter @diarmuidmallon and read his blog: www.zdnet.com/topic-ubermobile

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1nxaOnv

Consumers (and many smartphones) are looking for network capabilities way ahead of what current networks can deliver; moving to an all-IP network finally enables operators to simplify networks and not add incremental complexity.

http://www.zdnet.com/topic-ubermobile/

http://www.zdnet.com/topic-ubermobile/

http://bit.ly/1nxaOnv

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Being a traditional mobile operator hasn’t been easy during the last decade. While smartphone and mobile app sales continue to rise, mobile operators have seen voice and SMS revenues decline. Subscribers are moving to an all-data model for services and content. Add to the mix over-the-top (OTT) players, whose voice and video apps bypass the traditional wireless networks, and you can see why operators’ existing business models are suffering. Thus, as communica-tions habits change, operators are respond-ing with new business models and strategies to win back subscribers and add revenue.

GETTiNG oN boArD WiTH THE iPX

As the mobile industry enters this new phase of all data packet networks, launch-ing LTE services in their home country, mobile operators are migrating both tra-ditional (that is, voice) services and new data services to all data packet networks. For international connectivity, IPX networks are facilitating this migration.

Navigating Complexity: The Quest for True IPX,1 a survey of 170 respondents employed in the wireless, wireline, integrated, wholesale, and other telecom sectors, and released by Telecom Asia / TelecomsEMEA in October 2013, found that just over half (55%) have connected to an IPX network. Of those, almost 80% have deployed Voice over IPX, and almost half have deployed other services such as SMS and video (fig. 1). Looking at the respondents who said they had not con-nected to any IPX network yet, only 12% had immediate plans to do so, while almost half (48%) were looking at 1-3 years down the road and the rest either 4-5 years in the future (15%) or never (25%).

Unfortunately, the IPX still causes a lot of confusion in the industry, and it is often defined depending on whether you’re coming from the data side or the voice side. But no matter your position, IPX networks – the ability to run multiple services over a single IP connection in a highly secure environment – have matured to wide- scale adoption. Among the many services

The IPX, LTE, and RCS: The Trifecta for Mobile operator SuccessMobile operators are poised to take on the OTTs through next-generation data services.By Matthew Tonkin, Vice President Sales, SAP Mobile Services

Have you connected to an iPX network?

Figure 1. More than half of survey respondents said they have connected to an IPX, and of those a vast majority have launched Voice over IPX, with SMS and video also proving popular.

Based on data from Telecom Asia / TelecomsEMEA.

FOOTNOTES

1. John C. Tanner and Michael Carroll, Navigating Complexity: The Quest for True IPX, Telecom Asia / TelecomsEMEA (October 2013): http://www.fiercewireless.com/europe/ story/navigating-complexity-quest-true-ipx

PArT 2: 2014 THEMES

This year 1-3 years

4-5 years Never

If no, when do you plan to connect through IPX?

If yes, what services have you deployed through the IPX?

12%

55.6% 44.4%X√

14.8%

28.4% Diameter

79.5%voice

Fraud Detection45.5%

SMS

42%video

40.9%GrX

22.7%M2M

35.2%SiGTrAN

48%

15% 25%

http://www.fiercewireless.com/europe/story/navigating-complexity-quest-true-ipx

http://www.fiercewireless.com/europe/story/navigating-complexity-quest-true-ipx


supported across the IPX, LTE roaming has been a key driver towards adoption.

lTE liGHTS THE WAy For NEXT-GEN DATA SErvicES

LTE deployments are starting to proliferate globally. The past 18 months have been extremely active for LTE network deploy-ments in Asia and the United States, with operators in many countries taking their networks live. The Middle East has been

seeing deployments for about the past 9-12 months, and there will be LTE launches in the Europe and Latin America throughout 2014.

While most operators focus to launch their domestic LTE rollouts first, they are also looking toward roaming as a critical piece of the high-speed data puzzle. About one-third of the respondents to the Telecom Asia / TelecomsEMEA survey said they could offer LTE roaming at launch. Almost one-quarter said they would be able to offer it within a year of launching LTE, and 10%

said it would take them over a year to get to that point (fig. 2).

Just as with voice roaming, data roaming over LTE promises to be a revenue generat-ing opportunity for mobile operators, but it’s not without its challenges. Operators – preferably upon launch – need to have partners in place in selected countries. Rather than taking a blanket approach, they should strategically focus on countries and

network affiliates that will help them get immediate returns.

LTE roaming is still in its early stages, and it is inconsistent across regions. For example, LTE operates at different frequencies in different parts of the world. In the United States, it runs in the 700-800 MHz range, while in Europe and Asia LTE operates at 1800-2600 MHz. For roaming to be effective, networks need to be able to work on the

New revenue stream 69.5%

Figure 3. Rich Communications Services is being viewed by a majority of operators as a way to generate additional revenue, with some also seeing it as a key competitive advantage.


What do you see as the main driver for rcS?

other 1.5%

Fight off OTT 29%

Figure 2. As LTE roaming becomes an important revenue source, more than half of survey respondents said they would offer roaming either at the same time as their commercial LTE launch or within one year.


Once you deploy LTE, when will you offer LTE roaming?

Not applicableAfter one year of launch of lTe

Within one year of launch of lTe

Commerically ready and can offer from the start

34% 23% 10% 33%

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same frequency. Thankfully, handset manu-facturers have developed devices that work across multiple frequencies, helping LTE to reach across borders and networks.

bANkiNG oN rcS

Once operators have built out their LTE net-works and formed partnerships for roaming, the next step is to leverage the high-speed capabilities with next-generation services. Rich Communications Services (RCS) enables operators to deliver new services, and new revenues, through the offering of OTT-like services to their subscribers.

In the Telecom Asia / TelecomsEMEA survey, almost 70% of respondents viewed creating new revenue streams as the main driver of implementing RCS, while about 30% viewed fighting off OTT as the main driver (fig. 3).

WhatsApp, Viber, and Skype are a handful of the free OTT apps that enable voice, video, and instant messaging without traversing the traditional mobile network. Mobile operators find themselves at crossroads where they have to choose between partner-ing with OTTs and competing against them. For now, they will likely do both, and the challenge is to build a compelling business case to invest in RCS.

Even if operators develop services that are similar to what the OTTs are offering, why should consumers give up their free apps to pay for a similar service from operators? Actually, operators can make a strong case to their subscribers. OTT apps generally require that each party download the app in order for a call or text to be sent between them – each app is essentially a disparate island that doesn’t interconnect. A carrier’s RCS service, on the other hand, being

standards-based, would work across differ-ent handsets and networks. The GSMA has released joyn, an RCS technical standard that simplifies real-time data communica-tions through mobile devices. More than a dozen operators around the world and leading handset manufacturers support joyn.

Another advantage for operators is the billing and customer service relationship they have with their customers. With this key relationship with their subscribers, operators have the opportunity to price a small premium for RCS services.

RCS is still in its very early days, but opera-tors and regions are aggressively pursuing deployments. The US and North Asian (Korea, Japan) markets are stepping up to take the lead, with operators already offering commercial services.

The proliferation of faster networks, the availability of advanced handsets, and the development and rollout of new services will enable mobile operators to recapture the leadership position in the digital world.

Matthew Tonkin is Vice President for Asia-Pacific, including Japan, and Global Head of IPX Business for SAP Mobile Services, a division of SAP. He oversees the company’s global GRX/IPX/LTE Roaming business and helps drive pipelines and revenues with local teams in every region. In addition to his global IPX role, in Asia Matthew is responsible for managing and driving the company’s growth, market leadership, product definition, and geographical expansion in both Enterprise Services and Mobile Operator Services businesses across the region, through a combination of direct sales and a partner and alliances sales network.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1iUfwd2

Mobile operators find themselves at a crossroads where they have to choose between partnering with OTTs and competing against them.

http://bit.ly/1iUfwd2

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SMS hubbing made its debut in the early 2000s. InphoMatch, one of the companies that eventually constituted SAP Mobile Services, first launched SMS hubbing in 2001. Around the same time, across the Atlantic, an independent small startup called Nilcom (likewise a predecessor to today’s SAP Mobile Services) launched a different flavor of hubb-ing. The core concept was that mobile network operators (MNOs) would make a single connection and extend their reach to many other operators. That helped give rise to the texting revolution, not only in the Americas, where previously there had been no bi-lateral SMS interoperability, but globally as well, through bi-lateral connections where MNOs connected directly to one another as well as to hubs.

Today, a global network of hub providers enables SMS interoperability/interwork-ing throughout the world, making SMS the most ubiquitous person-to-person (P2P) non-verbal communications medium in the history of mankind. Additionally, over the last 10 years, a robust application-to-person

(A2P) ecosystem has emerged. Traditionally, this has been through the use of common short codes within a national or regional marketplace; however, standard telephone numbers are also used by the application, or enterprise, side of the equation. Like the P2P world, there are also A2P hubs, typically called aggregators. A2P aggregators provide a connection to the application server on one side and a “reach” to multiple MNOs on the other, through both short codes and standard telephone numbers (a.k.a. long codes).

Portio Research notes: “At the end of 2012, 83% of worldwide SMS traffic was P2P messaging, and A2P/P2A traffic made up the remaining 17%. With the increasing focus on mobile banking, mobile payments and mobile health, etc ... , we believe that contribution of the A2P/P2A category will increase over the next five years. According to our forecasts, close to a quarter of total text messages will either originate from or terminate at an application server by the end of 2017.”1

A2P (including, occasionally, P2A) messag-ing is a huge business. Portio Research estimates that A2P messaging will grow at a compound annual growth rate of 3.9% and the revenue for A2P messaging will continue to grow (fig. 1).2 A2P messaging is certainly an area where the pure over-the-top (OTT) messaging plays have not made any inroads – you don’t see WhatsApp or Line users texting to a short code, and likely won’t any- time soon. Portio notes: “MNOs are now

banking on the P2A/A2P SMS segment to increase their messaging revenue and are thus aggressively promoting services such as mobile banking, social network-ing, voting, ticketing, coupons, quizzes, mobile payments, and SMS marketing.”

While P2P messaging gets fragmented and cannibalized by various OTT service providers, it is the A2P capabilities provided by standards-based SMS that will help

0

10

20

30

40

50

60

Year

2010

F – Forecasted

Figure 1. A2P messaging will grow at a compound annual growth rate of 3.9% and the revenue for A2P messaging

will continue to grow.

Based on data from Portio Research Ltd.

2011 2012 2013F 2014F 2015F 2016F 2017F

SMS

reve

nue

(in U

SD b

illio

n)

P2A and A2P SMS revenue - worldwide In USD billion, 2010-2017F

53.553.752.750.448.244.3

33.639.8

Blurring the Lines Between A2P and P2P Messaging SMS hubbing is evolving, and messaging capabilities and subscriber messaging plans will need to adapt.By William Dudley, Group Director, Mobile Evangelist and Global Solutions, SAP Mobile Services

FOOTNOTES

1. Mobile Messaging Futures 2013-2017 (Portio Research, July 2013), 45: http://www.portiore search.com/en/major-reports/current-portfolio/mobile-messaging-futures-2013-2017.aspx

FOOTNOTES

2. Mobile Messaging Futures 2013-2017 (Portio Research, July 2013), 45: http://www.portiore search.com/en/major-reports/current-portfolio/mobile-messaging-futures-2013-2017.aspx

PArT 2: 2014 THEMES

http://www.portioresearch.com/en/major-reports/current-portfolio/mobile-messaging-futures-2013-2017.aspx




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in some markets, such as the United States and Canada, OTT players that fully interop-erate with SMS and use traditional tele-phone numbers could potentially be part of similar payment schemes.

The bottom line is that services like these – especially those that require or promote the exchange of value or payments, whether in real or virtual currency – can be delivered using simple SMS with a variety of security mechanisms, often using the existing mes-saging infrastructure, in particular A2P (and to an extent P2P) hubs. While there certainly will be some back-end requirements, such as linking telephone numbers to accounts (whether banking, payment, credit card, or some other type of account), the ability to then leverage a well-known and uni-versal medium is paramount. This type of service shows that a subscriber’s telephone number can become a highly valuable proxy for a variety of services.

Today’s messaging hubs are not like the hubs of old. A2P hubs are evolving, incor-porating multiple channels including SMS,

MMS, and Push notifications, and will certainly incorporate Rich Communications Services (RCS) capabilities as that standard becomes ubiquitous. Additionally, P2P messaging is expanding beyond simply connecting MNOs to including innova-tive OTT service providers – those offering cloud-based, multi-device services that also interwork with SMS and MMS and now landline and toll-free numbers. The latter category opens up vast new capabilities and tens of millions of additional destinations and enables new business models. Imagine people being able to call or text a well-known vanity toll-free number to engage with a brand – a brand that might have sig-nificant equity in a vanity toll-free number that is now fully messaging-enabled.4

This is becoming a reality today, and will become more commonplace in 2014 and beyond in the US and Canadian markets.

In the United States, toll-free numbers and landlines are increasingly becoming SMS-enabled. That means that subscribers can initiate texts to businesses and brands in a P2P style. One interesting example

keep SMS very relevant for a long time and potentially backfire on the OTTs. One of the reasons is that mobile messaging, in its various forms, is one of the several key mobile engagement strategies that enter-prises and brands can use to keep consum-ers and employees engaged and connected.

An innovative example of A2P messaging originated in the United Kingdom in January 2013, as announced by BBC News with the headline: “Payments by text message service to launch in UK in spring 2014.”3 This story is fascinating, though not to the extent that UK payments will be made by text message, as this has been done for years in various other markets such as Kenya. (Nowadays one can also send money via smartphones, using apps.) No, what is fascinating is that text messaging is once again the bearer of this payment information.

What this really means is that the banks involved (the BBC story lists eight), which cover 90% of account holders in the United Kingdom, specifically want to use not another app or an OTT app, but SMS, the most ubiquitous and far-reaching text- based communications medium ever. The SMS payment scheme is very well thought out by the UK Payments Council; in this implementation, the subscriber’s mobile phone number becomes a proxy for their bank account information.

UK mobile operators must be welcoming this development with open arms, because out goes another reason for subscribers to migrate their texting to a non-SMS-capable, OTT service such as WhatsApp, which has caused SMS traffic drops in many markets. The scheme is a rich testament to the stability and ubiquity of SMS. Additionally,

Mobile operators must adapt their subscriber messaging plans to include geographic, IP, landline, and toll-free numbers just as they do traditional mobile numbers.

FOOTNOTES

3. "Payments by text message service to launch in UK in Spring 2014," BBC News (15 January 2013): http://www.bbc.co.uk/news/technology-21032503

FOOTNOTES

4.We start to use the term “messaging-enabled” as a generic description for SMS/MMS/RCS messaging or telecom-standards-based messaging. Today, users (or “subscribers,” as we like to call them) do not differentiate: they will send/receive media at will, whether it is text, images, or video. Note that many just say, “Text me that picture.”

http://www.bbc.co.uk/news/technology-21032503

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bank-account proxy or supporting subscrib-ers texting to well-known vanity toll-free numbers, this helps keep the subscriber engaged with the mobile operator. Then the MNOs can ease in all of the new cloud-texting and RCS-based solutions that will wow their subscribers. Do that, and they’ll have a much better chance of bringing back the messaging subscriber.

William Dudley has almost 30 years of experience building and managing telecommunications network infrastructure. He defines SAP Mobile Services’ global solutions strategy within the mobile ecosystem, focusing on solutions for mes-saging, next-generation networks (LTE, IPX), and mobile consumer engagement. As mobile evangelist, he communicates through both internal and external public- ations and is active in industry groups. His blog can be found at: http://scn.sap.com/people/william.dudley/content

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1g2kUIZ

is that many public safety agencies have begun to SMS-enable their non-emergency numbers. Subscribers can then send tips and information to local police departments, and typically a dispatcher will respond back personally to further engage the subscriber. Additionally, some public service agencies will include an auto-responder message back to the sender, stating that a dispatcher will get back to them (as sometimes dis-patchers are busy with more pressing, emergency matters).

Herein, then, is where we see the “blurring” between A2P and P2P. Traditional A2P has it that one side of the messaging commu-nications is not an individual person, but a business – an enterprise or brand or even a public agency. Traditional P2P was supposed to be two individual subscribers texting with one another. But the P2P of today and tomorrow will be individuals reaching out to brands and businesses by texting to their well-known landlines – customer support numbers or ordering numbers, for example – which were traditionally voice-only. The responses will be both automated and human-generated and may include rich media. Further engagement must seam-lessly switch to other mobile engagement methods including rich media, coupons, and

payment arrangements that could be more “A2P” in nature. In these models, a messag-ing hub’s importance is paramount. Whether the subscriber uses an MNO service, an MNO’s cloud service, an RCS chat via text, or multimedia, the messaging hub environ-ment should be able to deliver, transcode, and route that traffic using the appropriate protocols and capabilities for the traffic to reach its intended destination. Messaging hubs in this new environment must provide intelligent solutions engagement to enable this new world of connectivity.

Additionally, as what we call traditional P2P and A2P messaging evolve, mobile opera-tors must adapt their subscriber messaging plans to include geographic, IP, landline, and toll-free numbers just as they do traditional mobile numbers. That way, their subscribers will have full access to an amazing array of new “text-enabled” or “messaging-enabled” services that the OTT players (who have cannibalized MNOs’ existing messaging traffic and revenues) aren’t able to provide. By simply supporting millions of additional, simple SMS destinations, they take away one more incentive for a subscriber to forget SMS and move all their communications to pure OTT. Whether through supporting payment options with a phone number as a

Messaging hubs in this new environment must provide intelligent engagement solutions to enable this new world of connectivity.

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


http://bit.ly/1g2kUIZ

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PArT 2: 2014 THEMES

The term “big data” has been hanging over mobile operators for the past several years as their networks collect huge amounts of customer data and other information. While the concept of big data is nothing new, oper-ators are now at the point where they realize its value and that now is the time to take an active role in managing and analyzing it.

Big data has been a sort of dark asset for operators because they have been unable to unlock the hidden value of the data and turn it into a revenue stream. But they know the data isn’t going away, so the present challenge is how can they turn their big data into a viable and lucrative business.

ovErcoMiNG biG-DATA PAiN PoiNTS

To get to the point of monetizing the big-data opportunity, mobile operators have to clear several hurdles that are slowing their progress:

• Data size and volume. Compared to a year or two ago, operators are dealing with 10 times the amount of data on

mobile-user activity, and that’s continuing to increase. With such a massive amount of data, they will need a database system to store and organize it and to run analy-tics against. The sheer volume makes these tasks a challenge.

• Accessing the data. The data is stored in numerous silos across the operator’s infrastructure – customer relationship management data in one location, call records in another, billing somewhere else, and so on. It isn’t uncommon to find data locked in 16 or more databases within a single mobile operator.

• Analyzing the data. To make sense of the raw data coming in at a steady clip, operators need to analyze it. The process could be as simple as auto-correcting for age and gender, since many custom-ers have family, corporate, or prepaid plans where it might be difficult to know exactly who is doing what. Demographic information combined with a user’s usage history–through the use of predictive analytics – can give an operator a good idea of likely areas of interest, such as if

that user might be receptive to new offerings based on fashion, sports, or cars. This type of data can be extremely valuable to marketing agencies and brands.

• Analyzing“onthefly.” Operators need to be able to conduct data analyt-ics quickly so that clients asking for data insights don’t have to wait days or weeks for a report to be generated. If clients have to wait, then the information may not be as valuable or relevant as it might have been when the data was first requested.

• Sales expertise. On the business side, operators realize that while their sales divisions may have the expertise to sell mobile communications services, they don’t necessarily have the skillset or connections to sell business or market-ing services, which is how data presents itself to end users. Having sufficient breadth and depth of sales coverage will be critical to monetizing big data.

• Data protection and privacy. This issue is of the utmost importance when it comes to big data. Mobile operators must figure out how to monetize their data in such a way that they are comply-ing with privacy regulations and safe-guarding their customers’ information

Deriving Value from Big DataThe amount of data being collected by mobile operators is accumulating fast. Operators now need to realize the full value of this store of information and start monetizing it.By Kevin Outcalt, Vice President, Mobile Analytics and Consumer Insight, SAP Mobile Services

Big data has been a sort of dark asset for operators because they have been unable to unlock the hidden value of the data and turn it into a revenue stream.

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while protecting their own brands. The last thing they want is to be at the center of a massive data breach or for the service to negatively affect their customers or their own reputations.

TAkiNG biG DATA To THE NEXT lEvEl

Mobile operators clearly desire to monetize and get value from their big data, but as yet not a lot of them are doing this on a large scale. In 2013, we saw a shift toward external monetization of big data by a majority of operators. Prior to that they had been lever-aging this information internally, in order to better serve their own customers in areas such as lowering churn, fraud reduction, and upselling new products and services.

Today, most of these external uses of big data tend to be one-off projects that require the operator to put in a lot of time and effort to gather and analyze the requested data. The next step is to replicate that process in an automated manner, so clients can get the data whenever they need it. Retail, consumer goods, and other industries are already taking advantage of mobile operator customer data; logistics and transportation,

finance, and government agencies could also greatly benefit from big data.

Operators will need to make some upfront investments to launch these services. Since they are pulling and collating inform-ation from a number of databases to get the complete picture, some operators are relying on a mediation layer to extract information – demographics, radio network details, call detail records, and more – and put it in a standard format amenable to database queries. Without this mediation layer, it’s very difficult to offer big data as a service to customers.

DATA AS A rEvENUE STrEAM

The good news is that big data provides tremendous internal value. Operators are justifying the business case for investing in additional software and solutions to help internal teams pull and analyze the inform-ation. Once these internal systems are in place, it’s not a big leap to leverage the data to create new client offerings for external revenue generation.

Due to the extensive requirement for database servers, software licenses, IT expertise, and processing and storage capacity, some operators are looking to cloud-based services to lighten the finan-cial burden. In this scenario, a cloud provider receives data from the operator and provides the technology in the cloud, lessening the operator’s upfront cost. It’s a good way to drive new revenue streams without a huge capital cost and ongoing expenses, especially when you consider that all of this big data isn’t just sitting in one place, but rather is widely dispersed across numerous systems within the network. This entire undertaking – from collecting data to storing and processing it – amounts to a big investment for mobile operators.

Down the road, once operators have the process of gathering and making sense of their big data running smoothly, they can take the next step and provide a full service to their customers. Services might include ad placement or tracking based on data results – operators would function as a service bureau giving companies a one- stop shop for data, plus actionable services based on it.

vAlUAblE SPAcE

“Big data” may still sound daunting to a lot of operators, but the vast majority of them are quickly getting on board due to the many benefits and value that it can bring. These operators want both to internally improve their businesses and, potentially, to provide data-derived services to external partners. The data isn’t going away – by leveraging it and hopefully making some money from it, operators can realize big advantages from what otherwise would simply be taking up space.

Kevin Outcalt has over 20 years’ experience with telecoms and information technology companies, ranging from AT&T to Cisco Systems and SAP, where he has held positions primarily in telecom product and solution development, management, and marketing.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1cPHJz0

Down the road, once operators have the process of gathering and making sense of their big data running smoothly, they can take the next step and provide a full service to their customers.

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Communications has helped bring the world together. Even as the world seems to be getting smaller, thanks to communications tools and technologies, when it comes to the mobile industry, different regions still have their own characteristics.

EMEA – Europe, the Middle East, and Africa – is a designation that’s often seen in the business world to group the many countries across this wide area. It might seem strange to lump such a large and diverse region together under one label. Certainly many differences exist within this geographic space, and considering the many changes happening in mobile communications specifically, it’s useful to break down the market to better understand the issues and challenges within.

THiNk GlobAl, AcT locAl

Within the EMEA region, each sub-region experiences business, cultural, language, and many other differences. Take the advent of MVNOs. In Europe particularly they play a dominant role, with a market share 7% above the global average. As a result, whereas 10 to 15 years ago markets like the UK and Western Europe had just two or three operators per country, more recently we’re seeing an influx of MVNOs within those markets that are successfully taking on the incumbent operators and making significant strides, through a mixture of competitive pricing, innovative branding, and effective targeted marketing – for example, serving ethnic communities with

EMEA’s Rapidly Changing MarketRegional differences are still prevalent when it comes to mobile communications. The issues, challenges, and opportunities facing the countries of Europe, the Middle East, and Africa (EMEA) are unique to the region.By Mark Weait, Vice President, SAP Mobile Services

PART 3: eMeA

PArT 3: EMEA

Whereas years ago an operator could find new subscribers simply through extending its network to convert hitherto unreached parts of the populace, this is no longer possible in extremely saturated markets.

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FiNDiNG coMMoN GroUND

Mobile operators everywhere are dealing with similar economic situations of recovery from several years of recession. In most places, operators are doing everything they can to transform into lean operations that focus on driving revenues and margins while reducing churn and bringing in larger numbers of subscribers.

One way to reach these goals is to look for new sources of revenue, a universal chal-lenge regardless of what type of network an operator is running. New revenue could be generated from mobile banking and payments, which have found great success in the African market. Leveraging “big data” within operators’ own networks, for both internal use and as a product offered to external marketing organizations, is another potential new revenue option.

To increase efficiencies, mobile operators will need to “sweat” their assets – that is, become more efficient by realizing as much value as possible from their existing infrastructure instead of building out new networks.

This has been evidenced by the pace of European 4G rollout, which arguably has fallen behind its compatriots in Asia- Pacific and the United States. However, 2014 should be the year where we see rapid expansion from European and Middle Eastern operators. Hopefully they will not be put off by escalating costs; for example, Ofcom, the United Kingdom’s independent communications regulator, has announced that is it may look to quadruple 4G license fees. Operators in Asia-Pacific and North America have undoubtedly taken the lead in terms of rolling out 4G networks, and the Middle East seems to be following that lead, with operators perhaps aided by their more nimble ability to upgrade their network infrastructure.

Upon completion of LTE domestic deploy-ment within various countries, the next step will be to look internationally and ensure international roamers are supported. Indeed, some of the early adopters across the world are now really starting to appreci-ate the importance of managing quality of service for 4G international roaming. This is directly in response to the high expectations their subscribers have when surfing on 4G.

service packages focused on low-cost calls and texts to international destinations.

Incumbent operators thus have to contend with new competition that is attacking their subscriber bases. Whereas years ago an operator could find new subscribers simply through extending its network to convert hitherto unreached parts of the populace, this is no longer possible in extremely sat-urated markets. Some, like Germany, are operating at over 138.7% penetration (Informa Q2 2013) – that is, mobile phones and contracts already outnumber people..

To respond to these developments, opera-tors have to become much more agile in their service delivery. But at the same time, due to the increase in competition from MVNOs and other providers, they enjoy much less flexibility in terms of setting prices. Furthermore, margins are being squeezed by ongoing investment in building out ever- changing infrastructure and technology, such as the roll-out of the new 4G networks.

As a result, one of the major challenges for European operators is to maintain revenues and subscribers while driving margin improve-ment. Pending EU roaming regulations –

proposals that would reduce, and even eliminate, roaming charges across the EU – will likely make meeting it even harder.

The Middle East and Africa, meanwhile, are moving along the same track as parts of Europe, sharing many of the similar trends. Yet there are also differences.

While MVNOs are certainly present in some countries, what you find across much of the Middle East is more of a duopoly situation – the UAE, for example, boasts only du and Etisalat – and this creates a different chal-lenge. In Africa, by contrast, what is preva-lent is the hotly contested battle between the “super groups” (Airtel, Vodacom, MTN, and Glo). Both scenarios deliver the same net result: extreme price pressure; nonethe-less the advantage many of these countries have is that there are still gains to be made, because market saturation levels are typi-cally significantly lower.

Wherever these countries are on their journeys, competition, however it is played out, is rife. Once saturation is reached, this will lead to many similarities in terms of their future opportunities and roads to success.

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The Middle East and Africa will see increased competition from within their borders as well as from foreign operators interested in increasing their geographic footprint. This region will experience new investment, new economies of scale, and new market entrants, all of which will have to be managed. In addition, if as expected the EU relaxes regulation around mergers and acquisitions, we could see a ramp-up in market consolidation across Europe, as has occurred in Germany and Ireland recently.

Another interesting trend among mobile operators in EMEA, as in other parts of the world, is trying to get as close to the customer as possible through owning the “last mile.” When customers look at their banking or supermarket app, they aren’t thinking about the carrier that’s working behind the scenes to deliver the content they’re looking for; they’re thinking of the company whose brand appears on the app.

One way for mobile operators to jump into this game is by developing their own apps or by co-branding apps with content providers. Some operators are looking to Rich

Communications Services (RCS), which allows them to offer services similar to those currently being brought to market by over-the-top (OTT) operators. New services might include combining voice with video sharing and messag-ing into a single offering. In addition, we can also expect a proliferation of oper-ator-owned and -branded applications and services, such as mobile banking.

A TiME For cHANGE

No matter where you look, from Northern Europe to South Africa and across the Arabian Peninsula, one consistent theme evident throughout this vast region is change. Whether it’s upgrades to LTE in Europe, increased competition in the Middle East and Africa, or some of the more universal issues such as managing the big data explosion, preventing fraud, reducing churn, and driving new revenue opportunities, EMEA mobile operators will certainly be kept busy.

Meanwhile, each region is becoming more connected to others as operators work toward the same goal of bringing people together, no matter where they are. The world is becoming smaller.

As Vice President for SAP Mobile Services, the mobile interconnection and mobile consumer engagement services division of SAP (formerly Sybase 365), Mark Weait is responsible for the continued growth of SAP Mobile Services’ messaging revenues across all market segments in EMEA, including telecom, financial services, fast-moving consumer goods (FMCG), manufacturing, and logistics.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1fQxxpC

TRENDS TO WATCH IN EMEA

• Competition in the United Kingdom and Western Europe is getting stiffer as MVNOs enter the market, often targeting ethnic minorities and other niches.

• The European market is saturated, with 110% and higher penetration. Operators will introduce innovative services to create new revenue streams.

• Middle Eastern and African operators face fewer competitors and less market saturation than those in the United Kingdom and Western Europe. Compe- tition from within their borders as well as from foreign operators will increase.

• Rapid expansion of 4G rollouts from Middle Eastern and European operators.

• Across all regions, operators are inter-ested in increasing profits by adding efficiencies and new revenue streams. Operators are exploring big data and mobile banking as potential new revenue sources.

• LTE deployment will continue throughout EMEA and extend to international roamers next.

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Take a look at your mobile phone. You might have a smartphone, a feature phone, or, if you’re really old-school, one with a mono-chrome screen where Snake is the only game on offer. Nonetheless, regardless of the manufacturer or model, there will be a green button for making a voice call.

Punch a string of numbers into the phone, press that green button, and somewhere in the world another phone starts to ring. When the person you are calling picks up, you can speak to them. It is such a fundamental part of telecoms that you could think it is impossible to conceive of anything ever changing.

And yet, with the growing deployment of LTE, voice services from mobile operators will need to evolve to meet the challenge from alternative service providers.

In truth, voice has been somewhat taken for granted by operators for some years. It is a given that all mobile phones will support voice, and the equipment for supporting TDM voice and circuit switching has been present in mobile networks for a very long time. Operator voice revenues have been squeezed

by the growth in popularity of alternative VoIP services to the point where, in some markets, revenues have declined at a small but steady rate for a number of years. That said, voice calls do still contribute almost $1 trillion to operator revenues globally.

lTE DiSrUPTS

So, what changes with LTE, and why does it create a threat?

First, LTE delivers a lot of bandwidth to the end user. This is great for customers who want to watch videos or play games online, but it also means that Voice over IP (VoIP) services can use this bandwidth to deliver much higher quality voice calls as well. Where LTE coverage is strong and available bandwidth is good, voice calls on VoIP are of considerably higher quality than those on mobile operators’ circuit-switched networks. LTE also has much lower delay on the radio interface, which means that the other limiting factor of VoIP service providers’ calls – end-to-end latency – is significantly reduced, and so perceived quality gets a second boost. High bandwidth and low delay

amounts to a network technology that could be taken as being optimized for VoIP delivery.

These positive aspects of LTE should offer an opportunity for operators to upgrade their voice services to compete with VoIP providers. However, when standardizing LTE, 3GPP did not specify a voice implementa-tion; it was decided that circuit-switched voice would not be used, but no alternative was explicitly identified. Four years ago, this was a major discussion point in the industry, and it was not until early 2010, when the GSMA began working with a group of oper-ators and vendors calling themselves “One Voice” that a definition for Voice over LTE (VoLTE), based on the IP Multimedia Sub-system (IMS), came into being.

2014: THE yEAr oF volTE?

Even with this definition in place, issues have arisen. IMS is not a straightforward technol-ogy to implement, to the point where some operators were reluctant to countenance the need for IMS as a requirement in LTE. A number of technical challenges also pre-sented themselves, including how roaming would work and the need to support inter-working back into existing circuit-switched networks. On top of that, the industry

continues to use TDM for voice intercon-nect, even when most operators and carrier networks have IP-based transport networks. It is a classic Catch-22: even though the networks on either side of an interconnect are using IP, the link connecting them is based on TDM, with the result being that TDM remains cheap because of call volume, and continues to have high call volumes because it is cheap.

Nonetheless, VoLTE has made steady progress, with 2014 likely to be a big year for deployments. So far there are four VoLTE deployments of scale, these being by the three major Korean operators as well as by MetroPCS in the United States. All report very good voice-call quality and very low call setup times. Other major carriers are on the verge of VoLTE launches including Verizon Wireless, AT&T, and China Mobile, while plenty more have tested VoLTE in pilots and laboratories.

THE cHAllENGE AHEAD

Challenges still remain. Technically, imple-mentation of IMS and VoLTE requires a very different skill set to that by circuit-switched, while interconnect and roaming will be some way off. Perhaps more difficult for operators

VoLTE: An Essential Part of Every Operator’s LTE StrategyVoLTE will continue to make steady progress, and 2014 is likely to be a big year for deployments.By Dan Warren, Senior Director of Technology, GSMA

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to comprehend is the business case for VoLTE – there is a CapEx outlay asso-ciated with IMS, but there isn’t an obvious incremental revenue stream as a result of VoLTE. VoLTE is not really about increasing revenue though; it is more about maintain-ing the revenues that operators gain from voice already. VoLTE will allow high-defin-ition voice codecs to be used, and is based on the same technology as Rich Com- munications Services (RCS), meaning that instant messaging, video chat, and file transfer – all available today from VoIP pro-viders – can also be offered by operators.

As a result, the question operators should ask themselves is not “Why should I imple-ment VoLTE?” but “What happens if I don’t?” Without VoLTE, operators will be faced with some stark choices. One option is to keep voice on 2G and 3G, using Circuit- Switched Fallback (CSFB); this is a path being taken by many operators as a short-term solution, but it stifles innovation in voice services and also makes the refarm-ing of 2G and 3G spectrum bands much more difficult. Alternatively, operators could deploy their own proprietary VoIP services, but this would make the existing capability to “call any number in the world” a very diffi-cult service expectation to meet, since every

VoIP variant would require a specific tech-nical interworking definition to every other.

VoLTE provides a standard for voice calls over LTE, with the potential for operators to evolve and innovate their voice services both now and in the future while also maintaining full interconnect for customers, as they have today with circuit-switched voice. It enables the green-button service that end users have today. It is this that makes VoLTE an essential part of every operator’s LTE strategy.

As Senior Director of Technology at the GSMA, Dan Warren is a technology subject matter expert across all of the GSMA’s project and working groups and key spokes-person for the GSMA. Dan currently leads the GSMA’s definition of Voice over LTE (VoLTE) for the global industry, as well as being a lead technology expert on rich com-munications and all IMS-based projects, embedded mobile, and Wi-Fi roaming.

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Every time you call a friend abroad using a traditional phone, you will somehow pay your service provider for this service. Your service provider won’t keep all of the revenue; a part of it will be cashed in by the service provider serving the friend you are trying to call. It is common practice for service provid-ers to charge for incoming phone calls and text messages, but it is not common practice at all to charge for incoming data traffic. Now, this is about to change.

Mobile service providers typically pay a straightforward bandwidth-based fee for connectivity to the GRX. This business model is easily justified, since the revenue generated by data roaming far outweighs the cost of a GRX connection. But once again, the roll-out of LTE is changing the game: as download speeds to mobile devices go up, so does the need for IP bandwidth to carry inbound traffic. In the case of basic content like web pages, all that’s required is more and more upstream

internet capacity. The cost of that type of revenue is easily recovered by the retail price of LTE data packages. But in the case of content for which subscribers are prepared to pay, another mechanism can be put to work.

Companies like Netflix offer a growing library of TV and movie content over the internet. People happily pay for this content and enjoy it on their mobile devices. But as the displays of these devices get better and better, they will not settle for a poor viewing experience. And for as long as the internet is the only network available for content delivery, viewing quality cannot be guaranteed. After all, we all know how slow the internet can get on a rainy Sunday afternoon or when the kids get home from school. This presents mobile service providers with a business opportu-nity: to offer high-quality termination of data traffic – in return for a piece of the pie, of course.

Multimedia Content on LTE DevicesCan mobile service providers get a piece of the pie?By Michael Van Veen, Group Director IPX, SAP Mobile Services

It is common practice for service providers to charge for incoming phone calls and text messages, but it is not common practice at all to charge for incoming data traffic.

PArT 3: EMEA

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QoS on the LTE RAN with that level of granularity are simply not there yet. In the longer term, mobile operators will need to face the challenge of having to deal with different commercial agree-ments with different content providers, and with the accounting complexities of having to charge for volumes of traffic based on the origin of the traffic. But where there’s complexity there’s opportu-nity, and in this case one would expect a small number of IPX providers to provide specialized services around accounting and settlement of high-QoS IP traffic.

All of this may sound far-fetched, but mobile service providers are highly motivated to explore these new business opportunities. After all, the roll-out of LTE networks requires substantial invest-ment, and the prospect of new revenue streams generated by LTE being largely directed elsewhere is hard to digest. A number of mobile service provider groups have faced the challenge and, working with the GSMA’s Future of Interconnect group, have designed and assessed different new

interconnect models. No doubt, this will be reality within two years if not sooner.

Michael Van Veen is responsible for managing and driving the GPRS Roaming Exchange (GRX) / IP eXchange (IPX) product line for SAP Mobile Services. He began his career at KPN Telecom, where he worked on major projects includ-ing the international standardization of ISDN and Fiber-to-the-Home systems, and the establishment of an opera-tional management center for the first GSM network in the Netherlands. He is also the current Deputy Chairman of the GRXIPX Working Group, which is a sub-working group under the GSMA’s IREG (Inter-Working Roaming, Expert Group).

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/OnB9ER

On paper the proposition looks simple: the content provider connects to the mobile service provider, typically via the IPX, and the quality of service is guaranteed from the content-streaming platform down to the mobile device. The novelty is that rather than paying for bandwidth, as is the case with the GRX, the mobile service provider will charge for bandwidth. Dif-ferent scenarios can be considered, but they all boil down to the same thing: the content provider ends up paying some of its revenue to the mobile service provider in order to ensure that its subscribers enjoy the best possible viewing experience.

As always, the devil is in the detail. Accord-ing to the 2013 IPX survey carried out by Questex Media Group and sponsored by SAP Mobile Services, it will be a while before mobile operators are able to create the perfect individual content delivery service. This requires the capability to fine-tune the appropriate quality of service (QoS) per service on the LTE radio access network (RAN) for each individual subscriber. The systems needed to get control over

But where there’s complexity there’s opportunity, and in this case one would expect a small number of IPX providers to provide specialized services around accounting and settlement of high-QoS IP traffic.

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In today’s fast-paced, technology-driven environment, it is good to know that some things are still valuable. One of these things is SMS. The Short Messaging Service has not died yet; it has retained technological consistency and remained true to its objec-tive from the very beginning. When SMS celebrated its 20th birthday two years ago, global traffic volumes were about 350 billion messages per month. It is no secret that revenues from SMS have been declining for several years; however, operators are still leveraging the service not only because of its popularity, but also because of their ability to monetize it.

For the past several years SMS has been dismissed as dying or even dead, a view perhaps brought about by the decline in revenue streams for operators, or perhaps by the popularity of instant messaging apps that are slowly gaining traction with the advent of smartphones. By contrast, SAP believes that SMS volume is still the bread and butter for operators. SMS remains a

huge business with huge margins. It is still an extremely important business area if well managed and monetized.

THE GlobAl ADvANTAGE oF SMS

Currently, well-known messaging apps like Facebook Messenger, WhatsApp and Viber require both sender and receiver of the message to be using the same app and do not rely on the mobile phone number to establish a connection. They use the internet and IP addressing to provide the service to their customers.

More and more end users have been using these over-the-top (OTT) services because of their enhanced features and the price, which is generally zero. OTT services are gaining popularity, thus affecting the business of operators. Operators are seeing that this extra data is creating extra pressure on their networks which they are paying for – these services that seem free are in fact not.

In order to have access to these services, subscribers are upgrading their data plans; it is like a sort of switching of services.

However, the limitation of OTT messaging services is due to the fact that these they tend to be region- or country-specific. For example, WhatsApp messenger might be popular in the Middle East but not in Korea, Australia, or the United States.

The number of OTT messaging providers is growing, but messaging apps have many platforms, as opposed to SMS being one platform. For example, when two people meet, they are more likely to exchange an SMS first, then an OTT message. With SMS, users don’t need to have engaged with each other or have a direct social relationship with each other.

SMS has a global reach; it is able to reach any network around the world. It is based on a single platform. With a single connection to an aggregator, operators can reach hundreds of networks worldwide – half of those directly for messaging and data services.

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SMS MonetizationSimplify your SMS business model with the right partner to ensure maximum SMS monetization.By Toni Eid, Founder and Editor-In-Chief, Telecom Review

It is no secret that revenues from SMS have been declining for several years; however, operators are still leveraging the service not only because of its popularity, but also because of their ability to monetize it.

SMS has a global reach; it is able to reach any network around the world.

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SMS HUbbiNG

From operators’ perspective, SMS usually sits under the wholesale department, or the roaming department sometimes, and they are constantly looking for ways to simplify their SMS business for daily operations.

A typical operator will have various bilateral roaming agreements enabling its subscribers to use roaming while abroad. So, if you want to send a message from the United Arab Emirates to someone in the United States, unless your UAE operator has agreements with all of the US operators and is connected to a Mobile Number Portability (MNP) database, the message might fail to be delivered.

If the message is not delivered, not only will the operator lose customer satisfaction, but also it can’t charge for it, thereby causing a loss in retail revenue. Moreover, SMS traffic is typically balanced – in most cases one expects a reply – so the operator will lose the value of incoming wholesale. Therefore the operator must ensure that the MNP element is solved.

This is a role that aggregators can take by solving the MNP issue in countries that complements an operator's direct coverage to easily establish a seamless connection.

With the growth of mobile operators and the services they offer, global message exchange has become highly complex and resource intensive. The bilateral agreement model can restrict operators from realizing an interoperability footprint, and there are significant costs associated with the co-ordination of global services and imple-mentation of each operator.

Thus the operator has to maintain day-to-day reports in its SMS center, updating for new networks and adding new roaming partners. And if one of the roaming partners has changed something technically in the network, then the operator has to follow.

The operator also needs to run reports of traffic balance. For example, if there is huge imbalance in traffic between a local operator and an operator in the United States – say, the US operator is sending five times more messages than the local one, congesting its

network – then the local operator will charge a certain amount for the excess.

This indicates the need for SMS hubbing. SMS hubbing allows operators to signifi-cantly expand the reach of their SMS services by simplifying the interwork-ing arrangements between operators. In addition to the benefits of expanding SMS coverage to new destinations, SMS hubbing offers increased operational efficiencies and financial savings by removing the need for time-consuming bilateral agreements.

The SMS hubbing model allows an operator to interwork SMS with other operators connected to the same hub, or intercon-nected hubs, using a single multilateral agreement. This is a significant improve-ment from the current bilateral interworking arrangements, whereby operators have to establish one agreement for every SMS interworking partner.

For operators to simplify their SMS business model, they should select one single partner with one single hub that can manage global connection, solve the MNP

issue, and remove the daily operation of reporting, reconciliation, and settlement, leaving them free to take care of other services and focus on their customers.

Toni Eid started his media and publishing career in 1985 and has been involved in international business in the Gulf, Europe, and North America since 1986. He often participates in industry events as a speaker, judge, moderator, or chairperson.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1nxfaek

The bilateral agreement model can restrict operators from realizing an interoperability footprint, and there are significant costs associated with the co-ordination of global services and implementation of each operator.

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Today’s world is always on and always con-nected. The proliferation of mobile devices has significantly changed when and how we interact with the world around us, and the increase in smartphone adoption to around 50% in places like North America, Asia, and Europe is opening a window to a different world of market research.

Smartphones and tablets are affecting the kind of information that’s being captured with each mobile interaction or transaction. We can learn when people are sending SMS messages or making calls and what sites they are browsing, what they are purchas-ing, and which apps are most used. Mobile data can also tell us how far customers travel to get to work, where they shop, and how long they stay there.

DATA DElUGE

The sheer volume of data being generated by mobile devices today is staggering and can easily overwhelm the mobile operators tasked with collecting, storing, and analyzing it. While many organizations still use traditional methods to monitor consumer behavior – such as surveys, consumer panels, focus groups, and other direct contact methods – mobile operators have a remarkable amount of customer data and market intel-ligence right at their fingertips. This data is extremely valuable to organizations looking to capture and retain customers.

Considering that more and more devices are connecting wirelessly – to contactless payment systems, smart TVs, cars, and

more – the potential wealth of consumer behavioural insight that can be collected is phenomenal. Add to that information gathered from store loyalty cards and other sources, and a whole new dimension of customer data emerges. Marketers can use this insight to better plan and adapt their marketing programs in new ways, including personalized offers and limited sales based on proximity to a particular business.

Consumers, then, could receive tailored promotions like Tom Cruise’s character experiences in the film Minority Report. But a lot of people who saw that film were a little concerned by the level of personal detail that businesses knew about each indi-vidual. We’re already at that point today, and so the inevitable question of how to balance targeted offers with personal privacy needs to be addressed.

kEEPiNG TrAck oF PrivAcy

We’ve gone from tracking cookies on web browsers to being able to locate exactly where someone is, thanks to positioning

technology embedded in smartphones. Having the technology, however, doesn’t mean customers have to give up their right to privacy.

Most organizations have a privacy policy that clearly outlines the types of information they collect and how it’s used, reinforced by regulatory mandates. Marketers must therefore adhere to fairly strict measures designed to ensure that personal information isn’t floating around without any controls.

In addition to a privacy policy, companies should also educate their customers on exactly how they use information collected from mobile devices, point of sale, and other sources. Consumers need a detailed expla-nation of the many benefits of mining and analyzing customer behavior and habits. If someone understands that by knowing which websites they frequent and what stores they visit, a company can deliver to them a very focused, targeted special offer that might include a deep discount or free shipping, then they are more likely to perceive data collection as mutually advantageous.

Maintaining Privacy in the Age of Big DataMobile networks are producing huge amounts of data on consumer behavior and habits which are a treasure trove to marketers looking to understand and capture new customers. How do you balance this “big data” influx with customer privacy?By Guy Rolfe, Head of Global Mobile Practice, Kantar

PArT 3: EMEA

If someone understands that by knowing which websites they frequent and what stores they visit, a company can deliver to them a very focused, targeted special offer that might include a deep discount or free shipping, they are more likely to perceive data collection as mutually advantageous.


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In the future, mobile operators, internet providers, and others will spell out exactly what data they are collecting on customers and exactly whom they are sharing it with. Making this information available should lead to customers having greater control over their “digital footprint” and defining who can have access to what data.

Surprisingly, a majority of customers are willing to have data about themselves captured and used if this means receiving highly targeted ads or offers. Today’s consumers are savvy and understand the many benefits of collecting data from their mobile devices.

kEEPiNG A lEvEl oF TrUST

The burden is on mobile operators to ensure that their vast storehouses of consumer data are put to good use. Operators must create a privacy policy with the customer and carefully select which partners will receive collected data and in what format. In some cases, it might be specific down to the individual level; in others, anonymized, aggregated data would serve just as well.

Every so often, we hear about data privacy breaches and companies using location- based information to track customers. These cases give big data and marketers a bad name and do nothing to build consumer trust and loyalty. Mobile operators, market-ers, and other firms that hope to capitalize on this data should involve the consumer in the process and allow them to have a say in what’s collected and what’s not and how that information is used. If this data sharing becomes a two-way street, all parties will benefit from the tremendous opportunities that big data provides.

As Global Mobile Practice Leader at Kantar, Guy Rolfe is responsible for the company’s mobile strategy. He focuses on harnessing the power of new digital technologies for collecting market research. He has more than 16 years’ experience in the market research industry.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1qL84lu

Voice is no longer the core mobile service. High-speed networks such as LTE, new- generation devices, and innovation from online service providers (OSPs) have given rise to new data demand patterns and new IP-based services with data usage rates con-tinuing to increase significantly. However, in this all-IP world, customers will still demand the best quality of service, high reliability, and global reach for all their services.

To keep pace and stay relevant, mobile operators must leverage their existing network assets, including quality of service and interoperability. They must also evolve their business models and make significant investments in network infrastructure. The IPX helps operators tackle these challenges.

bENEFiTS oF THE iPX

The IP eXchange, or IPX, is a managed inter-connection network standardized by the GSMA and i3forum, the carrier organiza-tion. The IPX relies on the principles of the GPRS Roaming Exchange (GRX) and being

a managed network (unlike the internet). It's value proposition encompasses security and superior reliability, enabling operators to guarantee quality of service for the inter-connect of IP-based services. It is also open to any service providers such as fixed or mobile players.

The IPX also simplifies commercial agree-ments. Today, TDM voice commercial agree-ments between operators are extremely complex: if one operator wants to set up a voice TDM interconnection with other operators, it must negotiate contracts bilaterally, with each one.

On the other hand, the IPX, with its hubbing principle, enables multilateral interconnections between operators, allowing them to manage one contract instead of several. On the technical side, such a hubbing principle simplifies the interconnect as operators only have to connect to the IPX once, instead of setting multiple bilateral physical connexions. This simplified connectivity reduces costs and time-to-market for IP-based services.

The IPX: The Time is NowHigh-speed networks, new-capabilities devices, new competition from online service providers, and more demand for IP-based services are challenging the status quo. The IPX is part of the solution.By Philippe Bellordre, Project Manager, Future of Interconnect, GSMA

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iPX For WHicH SErvicES?

In LTE networks, both signalling and bearer traffic are delivered over IP. Therefore for LTE roaming situations, the connectivity for signalling and bearer traffic between the visited network and the home network is delivered over IP-transport with a require-ment for a high level of security and quality. The IPX is the perfect network to manage this quality-sensitive traffic. As such, with more and more LTE networks being launched worldwide, we have seen LTE roaming gaining momentum in 2013 with agreements announced and commercial services launched using the IPX.

The Rich Communications Services (RCS) suite is also on the IPX agenda. Worldwide reach is an important differentiating asset for mobile network operators and an import-ant value proposition for mobile customers. The ability of mobile network operators to interconnect their RCS solutions is therefore critical for the success of RCS. By reducing the number of interconnect (hub principle) and simplifying the complexity of RCS inter-connect, the IPX will therefore speed up the overall number of RCS interconnect and make RCS a truly ubiquitous service. The GSMA is currently working with mobile oper-ators to make this vision a reality in 2014.

Voice over LTE (VoLTE) is also the next big thing on the agenda. To provide a ubiquitous reach and end-to-end high-quality HD voice, a complete IP chain from one end user to the other one through all the chain includ-ing the interconnect is required. Again, keeping the value proposition of today’s voice – that is, quality and security – is key, as well as simplifying the voice interconnect (to accelerate time to market).

PiloTiNG SUccESSFUl iMPlEMENTATioN

In order to prepare this shift to a full-IP world, the GSMA has encouraged opera-tors to complete voice over IPX intercon-nect commercial pilots to prove commercial and technical viability of voice over IPX. The first pilot was undertaken by Telecom Italia, a fixed line operator, and Movistar Guate-mala, a mobile network operator (Telefónica Group), in partnership with two IPX provid-ers. During this pilot, the operators tested traffic in a lab environment initially, to ensure that everything would work as planned. In parallel, the participants agreed on a price structure. Then the participants shifted the commercial traffic between parties to the IPX route and compared the quality of voice traffic. This pilot was a success, with no major technical problems and similar

SmartphonesApplication Service Providers

Mobile Network operators

Fixed Network operators

The IPX is an interconnect service that is offered by a variety of carriers on a competitive basis but with common agreed technical specifications and using consistent commerical models. The managed network environment is traffic-engineered to support specific IP services at specific quality levels. The IPX solution is a premium quality solution that promises error-free delivery of traffic while offering the flexibility to apply an appropriate level of quality as demanded by each different class of service.

What is the iPX?

Worldwide reach is an important differentiating asset for mobile network operators and an important value proposition for mobile customers.

IPX IPX

IPXIPX

Internet Service Providers

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voice quality as with legacy interconnect. Another similar pilot will start shortly.

oTHEr oPPorTUNiTiES ProviDED by THE iPX

Among the assets of network operators, the possibility to manage network quality of service is key. As such, an end-to-end IP connectivity coupled with quality of service (end-to-end prioritization of data along the value chain) could be a worthwhile prop-osition for network operators that wish to address future commercial opportunities – including a two-sided market – by delivering:

• Enhanced offerings and benefits for consumers.

• Innovations from OSPs, enabling them to differentiate and deliver their services at the consumers’ preferred level of quality.

As a managed network guaranteeing quality of service at the interconnect, the IPX is well positioned to be a key element in this QoS full chain. The GSMA is currently in discus-sion with mobile networks to define new business models to leverage this two- sided market approach.

NoT “iF,” bUT “WHEN”

With TDM interconnect being very cheap and investment needed to set up IP interconnect, operators have been quite reluctant to shift their interconnect to IP so far. However, with the launch of new IP services requiring IP interconnect (LTE roaming, RCS, and VoLTE) and operators willing to leverage interconnectivity as a differentiating asset, the outlook looks bright for the IPX.

Philippe Bellordre joined the GSMA in 2012. He is responsible for accelerating the adoption of IP interconnect for new services or technologies across interna-tional markets. He works collaboratively with worldwide mobile operators on the new opportunities offered by IP intercon-nect such as alternative business models.

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the operator respondents said that they plan to launch application-specific plans (fig. 1), and almost as many plan to launch quality-of-service-based plans to boost data-roaming use and monetize traffic.

The same survey asked global mobile operators which region is most impor-tant for roaming partners; 40% answered that Western Europe is the most important region, followed by Asia-Pacific with 20%. Although Western Europe is lagging in LTE deployments, its importance as a business travel destination makes LTE roaming a priority for all operators in the region.

MArkET DEvEloPMENTS

Mobile roaming is a significant opportunity for operators but it is still characterized by the legacy of “bill shock.” Roaming regulations – especially in Europe – have gone a long way to address these end-user concerns, and continue to be instrumental in bringing down the cost of using mobile services while abroad. And with new regulations to come into effect from July

As LTE deployments in Europe continue to advance, mobile operators are now starting to assess the business value of roaming, since LTE customers are typically high-value customers who may often travel. There is still significant latent demand among users for roaming data services from which operators could profit, and the latter could capture much of the roaming data use that currently goes over free Wi-Fi networks if they had the right service mix in place.

For European operators in particular the future landscape of the roaming market is unclear, because of pending regula-tion that could force them to charge the same amount for providing mobile services anywhere in Europe as they do in their home markets. Nevertheless, data roaming is still considered an important revenue driver, especially as smartphones continue to penetrate the market.

According to Informa Telecoms & Media’s “LTE and Next-Generation Roaming” 2013 survey, operators plan to launch a variety of new service plans with the aim of boost-ing use of data roaming over LTE. Half of

LTE Roaming Market DevelopmentsLook for 2014 to be the year when LTE roaming becomes a crucial element of LTE network monetization across Europe. By Dimitris Mavrakis, Principal Analyst, Informa Telecoms & Media

PArT 3: EMEA


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next year, new players will enter the market, likely pushing roaming tariffs further down.

But in the middle of these regulations, operators have been busy deploying their

complexity and challenges that come with LTE roaming service deployment. Figure 2 illustrates an operator survey asking whether operators felt ready for roaming in 2013. The same question was asked in a similar survey during 2012, when a staggering 41% of operators believed that the industry was not ready for LTE roaming, whereas 21% agreed that operators were ready and 3% strongly agreed. In summary, during 2012, 24% of respondents were positive towards LTE roaming readiness, and this increased to 41.8% during 2013.

experience that customers will increasingly want to replicate, even while travelling.

Although the majority of operators have yet to finalize their LTE roaming strategies and are at the early stages of in-market LTE rollouts, Informa expects that 2014 will be the year when LTE roaming becomes a crucial element of LTE network monetization across Europe. There are still numerous building blocks that operators are now putting in place to realize the LTE opportunity, including addressing the

LTE networks and launching new digital services including enhanced voice, in-call calling, payments, and M2M to encourage the growth of mobile data revenues. These new services will offer a richer user

0

5

10

15

20

25

30

35

40

Strongly agree

Figure 2. With each year, operators become more positive about LTE roaming readiness.

Based on data from Informa Telecoms & Media. Note: n=141 (operators only).

Agree Neither agree nor disagree

Resp

onde

nts

(%)

Disagree Strongly disagree

Survey statement: operators are ready for roaming in 2013

18.4

37.6

32.6

9.2

2.1

Survey question: What type of plan are operators most likely to extend to roaming customers?

Figure 1. Operators plan to launch a variety of new service plans with the aim of boosting use of data roaming over LTE.

Based on data from Informa Telecoms & Media. Note: 91 MNO and MVNO respondents. Respondents picked three

answers each.

0 10 20 30 40 50 60

other

Dynamic data plans

Additional data “turbo boost” plan

Unlimited data plans

Shared data plans

QoS-based plans

Specific plans for different devices (e.g., iPhone, Galaxy)

Application-specific plan (e.g., Facebook, WhatsApp, Spotify)

Toll-free data plan within a tiered allowance

Respondents (%)

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Operators have been steadily launching LTE roaming. For instance, in September 2013 SK Telecom, Swisscom, and Rogers Communications launched the first inter- regional LTE roaming service, covering South Korea, Switzerland, and Canada. SK Telecom launched intra-regional LTE roaming with CSL in Hong Kong in June 2012, SingTel in Singapore in March 2013, and Globe Telecom in the Philippines in April 2013. Meanwhile, in June 2013, Tata Communications and Telecom Italia Sparkle implemented the first LTE roaming peering between two IPX providers.

Now that these early moves have been made to enable LTE roaming, this market is poised for steady growth as operators try to gain competitive advantage by being the first to offer LTE roaming in their markets.

TEcHNicAl DEvEloPMENTS

Arguably there are challenges to imple-ment LTE roaming, and some elements are not yet fully standardized, including VoLTE roaming. Nevertheless, there have been significant developments in the market regarding the transition of GPRS roaming services to LTE,

It is essential that operators retain the ability to steer roaming users to preferred networks, to minimize any leakage of roaming revenue, since LTE network rollouts will have an impact on preferential roaming agreements. Operators should look to partnerships to capture as much roaming data use as possible by meeting end users’ expectations of QoE related to how much they are paying. Informa expects 2014 to be the year LTE roaming enters the Western European market and that by 2015, most operators in the region will be offering roaming to their subscribers.

Dimitris Mavrakis is a Principal Analyst with Informa Telecoms & Media. He is part of the Networks team where he covers a range of topics including LTE, Wi-Fi, small cells, SDN, virtualization, network APIs, and identifying emerging strategies for the mobile business. Dimitris is also actively involved in Informa’s consult-ing business and has led several projects on behalf of tier-1 operators and key vendors.

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including technical developments regarding Diameter, the signaling protocol used for LTE. Vendors and operators have developed Diameter Edge Agents (DEAs), the entities that control signaling exchange to and from the network and also enable inter-operator roaming. Several operators and roaming providers have now implemented DEAs, while equipment technology has advanced considerably.

Hubbing is also considered a preferred choice for enabling roaming, due to the challenges of establishing bilateral roaming agreements, which eventually lead to increased complexity and intensive testing requirements. Although bilateral agree-ments are expected to be signed during the early stages of LTE roaming, hubbing is expected to become mainstream.

FUTUrE oUTlook

Operators are now approaching LTE roaming with a view to monetizing as much data-roaming traffic as possible. The availability of free Wi-Fi means that users, especially consumers, often prefer a free service with a lower quality of experience (QoE) to a premium, charged-for experience.

Operators are now approaching LTE roaming with a view to monetizing as much data-roaming traffic as possible.

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Operators also claim the drop in roaming revenues could delay achieving the conti-nent’s Digital Agenda targets of universal access to 30-Mbps download speeds, with half the population subscribed to a 100-Mbps or faster service.

Neelie Kroes, the EU’s Digital Agenda champion, has heard it all before, and says European investment in communications infrastructure has been weak for years. “The fact is, if anything, roaming revenues tend to contribute to cash expenditure rather than investment capability,” she argues.

Market analyst Informa reckons mobile oper-ators are looking a gift horse in the mouth. By its estimation, 70% of travellers switch their phones off for fear of “bill shock,” or they look for free Wi-Fi to use Skype and WhatsApp in their destination countries. “Operators are already losing out on considerable revenue,”

From 1 July 2014, Europe’s mobile opera-tors have to allow rival operators to sell local access to voice, text, and data services to their subscribers once they leave their home countries. At the same time, regulators are forcing down roaming and termination prices as part of a move to create a single market in communications across Europe.

ArE oPErATorS rEADy? iN SHorT, No.

All operators, especially incumbents, are fighting on two fronts. First, they are saying the moves threaten their investment in next-generation fixed and wireless broad-band networks. They want to delay imple-mentation or at least control the timetable. Second, they are starting to close the gap between domestic and roaming rates, but the introduction of Long Term Evolution (LTE) and Wi-Fi is complicating matters.

the report says. “‘Lost roamers’ are a new market. Taking geography out of mobile pricing will increase traffic volume and could balance the lost roaming revenues.”

DEcoUPlE THiS

Operators have known about the impending change for a year. The new measures oblige them to allow the separate sale of roaming services through a wholesale roaming access obligation for any access seeker, such as other mobile operators, mobile virtual network operators (MVNOs), and resellers. The jargon term for this is “decoupling.” Home country providers will have to inform their customers of their right to decouple, and any switch to an alternative roaming service provider has to be free of charge.

The European Telecommunications’ Network Operators’ Association (ETNO), the challenger or altnet lobby group, thinks the decoupling regulation is over- kill and proposes instead a voluntary reduction in roaming fees of the kind Vodafone introduced with its Red plans.

Corporate roaming deals have always existed, but Vodafone was early to extend

this level of service to business and retail customers alike with the launch, in April 2013, of Red, which allows subscribers to roam in 14 European markets for an extra €3/day plus call and data charges priced at the user's domestic rates.

Says ETNO: “In practice, the voluntary reduction would mean that consumers could use their domestic bundles also for voice, SMS and data roaming for a minor surcharge. They would not have to con- clude a separate roaming contract and would not have to worry about bill shocks, since roaming is included in their domestic package for a pre-defined, small fee. The surcharge could be a small per-minute, per-SMS or per-MB fee or a one-off fee added to the price of the domestic package.”

ETNO has called for the July 2014 deadline to be suspended until there is "legal certainty" on the application of rules and deadlines related to the implementation of the latest regulations. To meet the deadline, operators have had to start investing in new systems now, but these could be redundant if operators were effectively able to opt out from the decoupling obligation, the association believes.

Have Operators Decoupled Themselves from the Reality of New Roaming Regulation?Operators could be looking at changes to roaming regulation as a chance to drive mobile broadband usage, but they’re far from ready.By Ian Grant, Mobile Europe

PArT 3: EMEA

Lost roamers’ are a new market. Taking geography out of mobile pricing will increase traffic volume and could balance the lost roaming revenues.


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Guy Hilton, Director of Product Marketing, Revenue Management at business support system (BSS) specialist Amdocs, says com-plying with the regulation, while maintaining low operating and capital expenditures, “will be very challenging for European service providers.” He reckons domestic service pro-viders (DSPs) will need to do four things:

• Support provisioning and registration of ARPs’ subscriber information.

• Route the roaming charging events to the ARP with which the subscriber has a roaming agreement.

• Split the transfer account protocol (TAP) IN files, rerate events, and generate the corresponding files to ARPs (in compli-ance with its partnership agreements with different ARPs).

• Set up and manage multiple partners, as well as complicated billing and financial settlement activities.

TrAiNiNG PEoPlE To USE MorE DATA

Others are more optimistic. Steve Living-ston, Senior Vice President at iPass, a Wi-Fi connectivity provider with access to 1.2 million hotspots in 123 countries, welcomes the new regulations. Whereas firms like

A coMPlEX ProjEcT THAT iMPAcTS A loT oF SySTEMS

Most operators did not respond to requests for comment. TeliaSonera demurred that the regulations weren’t yet in place. Orange has been more forthcoming. “This is a really complex project impacting a lot of our systems,” says a spokesperson. “The latest announcements from Neelie Kroes and the EC about a new regulatory package on roaming are creating confusion on the validity of the decoupling effort. We are looking for clarification as soon as possible.”

Among those systems are the core network, IT systems, and platforms including home location registers (HLR), online charging systems (OCS), routing, localization, fraud, provisioning, wholesale billing, third party settlement systems, and so on.

“We need to be able to identify all the alternative-roaming-provider (ARP) roaming traffic for all services, per IMSI (international mobile subscriber identity), in each of our networks, per country. Then, as per the regulation, we will need to provide a new platform for signaling/ provisioning/billing to connect the potential ARPs,” the Orange spokesperson adds.

Packet Core (EPC) has to be updated with a specific implementation; and second, post-VoLTE, which requires all the systems to be reworked again. The extent of that impact is still unknown.

Orange thinks it's all happening too quickly. “We may discover some border effects during the implementation phase,” the company warns.

If that’s the case, then the sooner they start and iron out the bugs, the quicker they’ll start making money again.

Ian Grant is a UK-based freelance business journalist with a deep interest in telecoms and broadband. He has written for Mobile Europe and European Communications since 2011, and was previously senior reporter at Computer Weekly. He also runs the Br0kenTeleph0n3 broadband blog.

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Vodafone have “painted the continent Red,” the new regulations give smaller operators a very attractive wholesale buy rate, he says.

Livingston believes subscribers will now become much more aware of affordable roaming packages. He expects Europe to follow what happened in the United States when AT&T introduced a single national rate, which decimated the earnings opera-tors made when a subscriber roamed between metropolitan area networks, such as between Los Angeles and San Francisco.

But this led to a change in consumption: subscribers stopped being scared of bill shock and started downloading data, very often from public access Wi-Fi hot spots. Of course, LTE and Wi-Fi are now often rolled out in parallel. Livingston is delighted: “LTE trains people to use more data. For every LTE-capable device shipped there are probably eight or nine times as many Wi-Fi-only devices.”

Another forthcoming wrinkle is the intro-duction of Voice over LTE (VoLTE). Orange points out that LTE, which is just launching in many countries, requires a completely new core IP-based network. The impact is dual, it says: first, pre-VoLTE, where the Evolved

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Consider frequency capping on advertis-ing. As marketers, we don’t want to serve a banner ad to the same person multiple times. We collect phone usage stats to keep the ads fresh for consumers, but we don’t collect personal information, like location or user profiles. However, the new ruling doesn’t distinguish between the different types of data. The Mobile Marketing Asso-ciation (MMA), the Advertising Association, and others have joined together to create a more specific definition of personal data and address how that data is stored.

What’s needed is a fairly simple and easy to understand data collection policy that addresses notice, transparency, and choice:

• Give someone notice that you want to collect data.

• Be transparent about what you will do with the data.

When was the last time you actually read a privacy policy before clicking “I agree”? In the European Union, changes are under-way to the standards for data collection and privacy that will impact the agreements you may or may not be reading, as well as the data that is collected for marketers.

The EU directive of 1995 on the protection of personal data is getting a makeover to address our more mobile world. Standards bodies are reviewing proposed changes and hearing concerns now, with voting expected to take place at the end of 2014, after the European Commission has presented the proposal to the European Parliament and the Council of the European Union. For mobile marketers, how the directive defines personal data has become a big point of contention because the proposed regulation doesn’t recognize the difference between benign and highly personal information.

For now, the requested changes will affect organizations in the EU, but it’s likely they will be interpreted and possibly dupli-cated in North America and other regions. Every country is paying close attention to privacy and data collection regulation changes. Since the US National Security Agency’s PRISM surveillance program was exposed in early June 2013, the spotlight is much brighter on these issues and they will continue to attract attention – especially when the media alerts the public to large-scale privacy breaches.

rESPoNSiblE MArkETiNG iN THE MobilE AGE

Contextual data will be top of mind in 2014 for mobile operators. Conglomerates like Weve (the consortium of O2, EE, and Vodafone) are gathering vast amounts of consumer data and aggregating it to expose consumer behaviors and buying patterns. This database of consumer information provides operators with a spectrum of opportunities and challenges. Operators can send conceptually focused offers to targeted groups. Rather than historical and

• Give them a choice to opt out when they want.

Sharing data with third parties is another proposed change for the regulation of data protection. Whereas currently many mar-keters have agreements that any data col-lected may be shared with third parties, the new standard puts an end to data sharing. Marketers will have to receive permission each time to collect data, and they will be restricted from sharing it with other groups.

Opt-in rules are also getting clarifications. The existing regulations are somewhat unclear around what a consumer actually opts in to. If someone orders a catalog using their mobile, for example, and opts in to share information with that division of a company, does that mean their information can be shared throughout the company? In other words, can the brand push pro-motions for other offers to the consumer who only wanted a catalog? Most consum-ers would say they did not opt in for every-thing, just the specific item. If the changes are ratified, the opt-in promise will not be binary: the consumer’s data will remain only with the division that provides the catalog.

Data Collection’s Changing RegulationsThe European Union is looking to change and improve rules around collecting and sharing mobile consumer data. Mobile marketing has a lot at stake. If done correctly, it can fulfill the promise of one-to-one marketing. By Paul Berney, Co-Founder and Managing Partner EMEA, mCordis

PArT 3: EMEA

What’s needed is a fairly simple and easy to understand data collection policy that addresses notice, transparency, and choice.

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geographical data, they have predictive and personal data. Offers based solely on purchasing history are much less targeted than an offer that combines purchasing history with real-time activities. As the consumer is requesting a football score update, for example, the team can also remind the consumer of upcoming games and ticket availability. Or, based on location information, stores can send coupons to shoppers as they enter the parking lot or walk through the door.

Brands are imagining all types of innovative offers based on the consumer data provided by operators. To be successful, operators must persuade consumers to opt in for their services with the promise of worth-while offers. If consumers don’t see the value in the offers, they will opt out of the service. Let’s say I sign up because I am interested in sports, yet I never receive any sporting information, only lots of cinema offers. I may drop out, as cinema data alone is not interesting to me. Consumers expect something of value in exchange for sharing their information.

On the whole, consumers are nowadays much more sophisticated around what they have opted in to receive, and their level of privacy knowledge is increasing all the time. Mobile communication greatly

increases the amount and types of data available to collect, and it promises a one-to-one marketing opportunity that we’ve been discussing since customer relationship management was introduced more than 15 years ago. We can finally reach this goal if we do it right. What we have to do is make sure we give and provide something of value in exchange. There is a great potential to ruin this channel if we don’t treat consumers the way they want to be treated.

Paul Berney, Co-Founder and Managing Partner EMEA of mCordis, has a decade of experience in mobile marketing and more than 25 years’ experience in a wide variety of sales, marketing, business development, and commercial roles spanning several different industries and market sectors. Previously, as Chief Marketing Officer and Managing Director of the EMEA branch of the Mobile Marketing Association (MMA), he led the MMA’s global marketing efforts and more specifically its activities involving more than 150 member companies.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/PHRUeU

MOBILE MARKETING GUIDING PRINCIPALS

• Provide transparency. Tell what data will be collected and how you will use the data.

• Respect privacy. Do not collect or share private data.

• Understand preferences. Ask con-sumers what they prefer and respond to their preferences accordingly.

• Gain permission. Always ask for permission.

Privacy and permission policies should be easy for brands to write and con-sumers to understand. Be simple and straightforward.

Tell the consumer, “We will always get permission before collecting your data. We will be transparent about how we will use your data, and you can opt out at any point. In exchange for opting in to our services, we will endeavor to make sure we provide a valuable exchange of offers, information, and/or other services.”

Brands are imagining all types of innovative offers based on the consumer data provided by operators.

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$25.00. Beyond this point, data ARPU will continue to grow as voice ARPU continues to decline. With a combined market that is seeing a 9% increase in connected devices and many traditionally non-mobile companies making greater than $100 million per quarter (think Facebook and Twitter), the United States and Canada will continue to be world leaders in the deployment and acceptance of innovative mobile-related services.

Latin America now accounts for 10% of the global mobile market in terms of revenues, generated across a diverse swath of cultures, languages, and coun-tries. As of mid-2013, out of a population of 610 million, there were 631 million SIM con-nections accounting for 319 million unique subscribers. The GSMA noted in 2013 that total mobile revenues in the region totaled $107 billion in 2012, with the 9% year-on-

Looking back at 2013, it is clear that the mobile industry had another extraordinary growth year. From subscribers to services and revenues, this industry continues as a worldwide leader in many ways.

In the United States, according to Chetan Sharma Consulting, data revenues grew 5% through the third quarter 2013, reaching $22.8 billion. The firm forecasted that the United States’ total data revenues would exceed 50% of its total service revenues in the fourth quarter. Smartphone penetra-tion for the US-Canada market is now over 60% and continuing to grow, with over 94% of new mobile devices categorized as “smartphones.”

Interestingly, Chetan Sharma also fore-casted that within the fourth quarter, the data and voice average-revenue-per-user (ARPU) trends would converge at around

Mobile Market Activity in the Americas 2013Mobile industry continues to expand the subscriber base, add new services, and show revenue gains. By William Dudley, Group Director, Mobile Evangelist and Global Solutions, SAP Mobile Services

PART 4: AMERICAS

PArT 4: AMEricAS

The United States and Canada will continue to be world leaders in the deployment and acceptance of innovative mobile-related services.

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said, Portio Research noted that from 2011 to 2012, the North American SMS market only declined 0.5%, concluding: “This really is not at all the disastrous scenario of doom and gloom that many industry pundits were predicting two years ago.” Indeed, according to both Portio and our own messaging traffic analysis, the US market remains the largest SMS market by a significant margin – so much so that “even if the United States declined 30% from its 2011 peak, it would still remain above its own 2009 traffic figure.” It’s surprising to know that Canada has quietly sneaked into second place in terms of per-person-per-month usage (PPPM), behind the United States.

Latin America saw SMS traffic continue to increase in 2012 and 2013, with a peak expected in 2016, based on analysis from Portio Research. As this market has less than 30% smartphone penetration, we have not seen extreme cannibalization by OTTs as we have in markets such as Western

year growth rate making Latin America the second-fastest growing global region.

The GSMA also predicted: “Smartphone penetration will be close to 20% of the pop-ulation at the end of 2013, marginally below global averages, and is forecast to rise to 44% by 2017. The potential of new ‘third wave’ mobile applications and the oppor-tunities from machine-to-machine con-nectivity are still largely untapped in Latin America.” This means that Latin America presents a ripe opportunity for many of the established mobile services and capabilities that are more mainstream in North America.

Mobile messaging in the United States and Canada had a mixed year, in that it did feel pressure from over-the-top (OTT) messaging, including primarily Apple’s iMessage. While iMessage uses SMS to reach non-iOS devices, the strong growth of Apple devices in the market also kept iOS-to-iOS communications brisk. That

Compared to many other parts of the world, the Americas are less affected by third-party OTT players – though pure-OTT messaging apps do play a role in fulfilling subscribers’ messaging needs, subscribers tend to view them as more of a portal to social networking. Many subscribers remain SMS users, in that there is still considerable growth in using SMS-based messaging as a consumer engagement medium. This is not the case with the pure-OTT messaging providers. Also, the United States and Canada are unique in their support for NUVOs, which are essentially text-only (though some offer voice) and, as of the end of 2013, serve an estimated 30-50 million individual users. Due to the nature of how NUVOs operate, these OTTs actually help preserve SMS traffic within their market(s).

In 2013, mobile data continued substantial growth patterns around the world and mobile networks led the way for this Western hemi-sphere. In the United States, Verizon, Sprint, AT&T, and T-Mobile, as well as quite a few other mobile network operators, continued to deploy and expand their LTE networks. In late 2013 Verizon highlighted that its LTE network covers 99% of its current 3G foot-print and over 303 million people.

Europe or Asia-Pacific. In 2012 the Latin American market sent 389 billion person- to-person (P2P) SMS messages and 69 billion application-to-person (A2P) mes-sages, accounting for over $2.4 billion in revenue as forecasted by Portio.

On 9 April 2013, a multi-hour iMessage outage revealed the impact of iMessage on pure SMS. For the US market, our internal data showed, the hourly traffic increases were 14%, 19%, 16%, and 16% for hours 16, 17, 18, and 19 (US EDT) respectively. These were the four full hours that iMessage was down.

For Canada, again using our internal data, the increases were 22%, 34%, 27%, and 26% for hours 16, 17, 18, and 19. We noticed that higher percentages were due to intern-ational texters who would be more likely to use a smartphone or iPhone and don’t nec-essarily fully reflect how much iMessage has actually cannibalized SMS. Not surprisingly, the US/Canadian Network Unaffiliated Virtual Operators (NUVOs – OTT, but SMS-interoperable service providers) did not show such traffic surges during the hours in question. In Brazil, the SMS increases were 13%, 4%, and 16% for hours 17, 18, and 19, falling to 3% for the last hour.

Latin America presents a ripe opportunity for many of the established mobile services and capabilities that are more mainstream in North America.


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Meanwhile, T-Mobile began to remake itself as the “Un-carrier.” Starting at the end of October, T-Mobile offered new capabilities that include virtually free data roaming in a number of countries. This new “Un-carrier” marketing campaign has already helped gain T-Mobile almost one million subscrib-ers, mostly from AT&T and Sprint, and many more are expected to come on board.

In Mexico, Telcel continues to build out its Red 4GLTE, which now covers 25 cities. By mid-2013, according to research from TeleGeography, Brazil had approximately 257,000 LTE users across Vivo, TIM Brasil, and Claro. Elsewhere in Latin America, mobile operators continue to build out and launch LTE services, mostly on the Advanced Wireless Services (AWS) band.

2013 wasn’t without a bit of corporate drama. Microsoft acquired Nokia; AT&T acquired Leap Wireless (Cricket); T-Mobile USA acquired MetroPCS (there goes two competing prepaid operators for the US); and Verizon began to divest itself of its Vodafone ownership, with Softbank buying

a controlling interest in Sprint. Additionally, BlackBerry was up and down: almost sold, then not, and finally to be led by ex-Sybase CEO John Chen.

William Dudley has almost 30 years of experience building and managing telecommunications network infrastructure. He defines SAP Mobile Services’ global solutions strategy within the mobile eco-system, focusing on solutions for mes-saging, next-generation networks (LTE, IPX), and mobile consumer engagement. As mobile evangelist, he communicates through both internal and external pub-lications and is active in industry groups. His blog can be found at: http://scn.sap.com/people/william.dudley/content

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That the US mobile market is in flux is hardly up for debate. Nor is the fact that much of that change is being driven by the rapid deployment of 4G, and in particular by LTE network technologies.

Curious about what happens – and how competitors must respond – when an

incumbent (in the United States’ case, Verizon) jumps out with an early LTE lead? Check. Wondering about the value of LTE-capable spectrum in a competitive 4G market (and what that means for M&A and market consolidation)? Check. Want to understand how users will consume all that extra bandwidth, what it means for smart-

US LTE Market Offers 4G Test LabThe US mobile market has emerged as a valuable stage for testing the dynamics of LTE-driven competition.By Rich Karpinski, Senior Analyst, Yankee Group

Figure 1. US LTE is off to a quick start and still growing.

Based on data from Yankee Group Mobile Broadband Forecast, October 2013.

The US will boast more than 180 million registered lTE lines by 2017

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phone and connected device adoption, and the best way to monetize both of these trends? Check, check, and check. In short, for those operators looking to under-stand how to compete in the new world of LTE – not only as the first few LTE subs onboard a new network, but also as those networks evolve and adoption moves into the millions (a total of 72 million US LTE users in 2013, according to Yankee Group forecasts; see fig. 1) – the United States is an early-adopter market well worth studying and in many cases emulating.

oNE TEcHNoloGy, MANy APProAcHES

Perhaps LTE’s greatest value and appeal to operators around the world is its emer-gence as the global standard for 4G mobile networks. Despite their being grounded in 3GPP standards (Release 8 for LTE and Release 10 – and beyond – for LTE- Advanced), there’s as much art as science in how LTE networks get deployed in the real world. From vendor/platform choices to spectrum availability (in terms of both the location and amount of spectrum) to legacy network migration and evolution consider-ations, no two 4G/LTE network roadmaps are really the same. That’s proven true in the

US market, especially as operators move into their second wave of LTE deployments lever-aging additional spectrum holdings, advanced LTE capabilities such as carrier aggregation, and surgically placed HetNet hotspots.

Verizon arguably pushed the entire US market to LTE by deploying its CDMA overlay network in late 2010. By summer 2013 it had covered practically its entire service area with LTE. That was a major milestone, but the operator had little time to gloat as customers sopped up that additional bandwidth. By early 2014, a whopping 69% of Verizon’s data traffic was traversing its relatively new LTE network, and the operator admitted it was facing capacity challenges in major cities. The solution? Moving onward to phase two of its LTE deployment, leveraging high-band 1700-MHz/2100- MHz AWS spectrum (acquired from US cable operators for almost $4 billion in 2013) that enables Verizon to deploy new 40-MHz channel systems in some cities, essentially tripling its network capacity.

Not to be outdone, other US operators have scrambled to acquire the necessary spectrum and deliver on LTE roadmaps to compete with Verizon. AT&T and T-Mobile, rebounding from their failed merger, have

lTE DrivES coMPETiTivE MArkET DyNAMicS

As we’ve already seen, the hunt for LTE- capable spectrum – even more than the grab for new subscribers – has led to significant consolidation in the US market. Leap Wireless and MetroPCS, the two largest network-owning prepaid operators, were scooped up by AT&T and T-Mobile respectively. Another second-tier player, US Cellular, sold off its big-city spectrum to Sprint, which also bought itself a treasure trove of spectrum in acquiring Clearwire. And as 2014 dawned, a mega-merger of Sprint and T-Mobile also appeared to be on the table. The bottom line: operators that take the conservative route in position-ing themselves as LTE network and service leaders risk getting left behind – and eventu-ally gobbled up.

Beyond M&A, the competitive market dynamics of LTE in the United States have been fascinating to watch. On the more premium end of the market, Verizon and AT&T have turned to shared data plans and tiered pricing to monetize their growing LTE subscriber bases. The more subscribers – and the more devices per subscriber – they can move on to shared data plans, the better.

taken a similar route by leveraging their GSM bases to move up the 4G ladder from HSPA to HSPA+ to LTE. AT&T has made more than 40 separate spectrum acquisitions – including swaps or purchases from rivals Verizon and T-Mobile, plus the acquisition of smaller provider Leap Wireless – to cover 90% and counting of its territory with LTE. Moving deeper into 2014, AT&T is augment-ing that network in pieces, using airwaves in the 1900-Mhz PCS and 2.3-GHz WCS bands and aggressively re-farming spectrum from its GSM and HSPA+ networks, while also being perhaps the most aggressive advocate of using small cells to augment coverage. For its part, T-Mobile relied on HSPA+ as its “4G” technology for quite some time before aggressively deploying LTE in 2013, lever-aging spectrum it acquired in the AT&T deal breakup. Thanks to having quite healthy 20- MHz channel LTE available in many major cities ahead of rivals, T-Mobile has recently been crowing that it’s the LTE speed king. Speaking of speed (and new spectrum configurations), Sprint is aiming to leapfrog the competition by augmenting its in-prog-ress LTE deployment via its so-called Spark project, which will bring Clearwire’s 2.5-GHz TD-LTE spectrum (more than 100 MHz in some locations) into the mix, airwaves also leveraged by new owner Softbank in Japan.


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T-Mobile has emerged as the aggressor in the market, not only touting its LTE network speeds but also pitching its “Un-carrier” approach of no contracts, no device subsi-dies, cheap LTE service pricing, and more.

While mid-2012 to mid-2013 – arguably the first 12 months of true LTE competition – saw relatively little innovation in data and device pricing, the US market has exploded of late with creativity (verging, some would argue, on a price war). Device upgrade programs, which enable users to finance no-subsidy devices while also ensuring upgrades to new devices after as little as six months, have essentially replaced traditional subsidy-driven two-year contracts. For customers, that puts total cost of ownership equations, and not just monthly service fees, front-and-center. (For operators, it equally elevates customer lifetime value above monthly ARPU as the key financial metric.) Indeed, with smartphone penetration as high as 70% at some operators, the mission has become to improve stickiness via quality network service, frequent device upgrades

and the competitive landscape deter-mine the right path forward. But don’t lag, or other operators will pass you by.

• LTEoffersroomforservice-deliveryand business-model experimentation. The transition to 4G provides an oppor-tunity for new entrants to shake things up, while incumbents should leverage any advantage to lock in new monetiza-tion opportunities. Evolve not just network

• Aggressive LTE deployment creates a data-driven business. US operators are succeeding where their counterparts in other regions have failed in countering falling voice/SMS revenues. In 2014 the US market will get the majority of its mobile service revenues from mobile data (fig. 2).

• There’snoone“right”LTEapproachfor every operator. Legacy network considerations, spectrum holdings,

and, increasingly, complementary value-added services ranging from streaming music to digital home services and more. At the same time, and because LTE customers are so valuable, the US market is seeing aggressive acquisition promotions for the first time in quite a while. Managing that balance, between attracting new customers and monetizing the ones they have, will be job number one for US operators in the next 12 months.

lESSoNS FroM THE US lTE TEST lAb

The US mobile market has some unique characteristics: it has traditionally been more postpaid on the services front and subsidy-driven in terms of devices than most other regions. Nonetheless, its leading-edge experiences with LTE deploy-ments and the competitive dynamics that true 4G creates make it a test case well worth watching. Among the key takeaways and lessons learned from this pioneering LTE market:

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Figure 2. Strong US data-service adoption counters falling voice revenues.

Based on data from Yankee Group Mobile Broadband Forecast, October 2013.

The bottom line: operators that take the conservative route in positioning themselves as LTE network and service leaders risk getting left behind – and eventually gobbled up.

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Senior Analyst Rich Karpinski is the leader of Yankee Group's mobile marketing and commerce strategies and is also responsible for North American mobile operator coverage. In these roles, he focuses heavily on mobile operator business models, service delivery strategies, and the overall dynamics of the mobile ecosystem. On the mobile commerce front, his areas of focus include big data analytics, proximity marketing / commerce, and mobile retailer tools and strategies.

Share your comments, thoughts, and updates to this article — join the onversation on SAP Mobile Services community here: http://bit.ly/OnBWWo

but also service and business-model KPI metrics accordingly.

• Operators should be prepared for rapid adoption and heavy use. Customers want more bandwidth and the services it enables. But be careful: those services – in particular video – will rapidly eat up additional bandwidth: while transitioning from 3G voice to Voice over LTE provides its own challenges.

• As the US market shows, the evolu-tion to LTE impacts all aspects of the mobile services business. Operators must take that holistic view – seeing this network transition as a business-model opportunity rather than challenge – to exit this crucial evolution on solid ground.

The shift toward cloud-based network functionality and service deployment is a given; the IPX merely accelerates the trend and fosters this devolution though vastly improved network delivery infrastructure and quality of service (QoS), built-in multilateral cascading business models, and inherent cost advantages.

QUAliTy, QUAliTy, QUAliTy – THE iPX DElivErS

The “good enough” argument for public internet delivery of cloud-based services falters in general relative to the IPX, and fails specifically relative to LTE, Rich Communications Services (RCS), Voice over LTE (VoLTE), and IP Multimedia Subsystem (IMS) hubbing service scenarios where carrier-grade network services and associated QoS / cost of service (CoS) guarantees are necessary to insure that subscriber experience is maintained.

“Cloud-based,” “virtualized,” “distributed,” “elastic,” “infinitely scalable,” “software- defined” – sound familiar? Choose a clever phrase, or perhaps even create your own, for the cloud computing trend is clear, and service providers of all stripes are fundamen-tally altering how and where they develop and deploy services, interoperate and interwork with partners, and in the end provide sub-scribers with a compelling user experience.

Key to this cloud package is the network connectivity component, which is where the IPX comes into play, and where debates once again ignite: public internet versus private networks/clouds; direct intercon-nection and bilateral agreements versus the hubbed and multilateral approach to linking service and application providers and sub-scribers. The IPX bridges the interwoven realms of network quality, the traditional service provider community, and access to cloud-based providers and services.

The Skies Clear for IPX Delivery of Cloud-Based ServicesThe IPX establishes the network connectivity and the necessary quality for cloud-based services – and it reduces time to market and decreases initial capital investments. By Rich Lindstrom, Sales and Business Development, IPX/RCS/LTE Roaming, SAP Mobile Services

PArT 4: AMEricAS

The IPX bridges the interwoven realms of network quality, the traditional service provider community, and access to cloud-based providers and services.

The transition to 4G provides an opportunity for new entrants to shake things up, while incumbents should leverage any advantage to lock in new monetization opportunities.

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Sure, cloud computing assumes scalable, elastic, and virtualized capabilities using internet technologies, so there is an element of network at least mentioned in passing. But what cloud computing definitions do not make explicit is a specific network delivery mechanism, hence the potential gap in QoS at the end-user level, depend-ing upon the application and the network connectivity utilized. QoS at the network level becomes even more important as sophisticated interoperability becomes necessary to support Diameter and LTE roaming, RCS interworking, and the trans-lations associated with both legacy and new messaging services, including of course the over-the-top (OTT) evolution.

Here in the US mobile network operator community, the trend seems to be a willing-ness even among tier 1s to support initial testing / new vendor appraisal / limited product soft-launch over public internet, but only as a temporary measure. Recently an RCS manager at a US tier-1 operator quipped: “Public internet is fine for email and my kids at home, but live customer traffic will go direct or via private IPX.” Using public IP and temporarily postponing a direct IPX interconnection shaves time off a development cycle; but for live production traffic under load, the IPX is the choice.

OTT providers remain more confident in placing live customers over public internet. Part of the reason for this may be the nature of the services they develop and offer, or perhaps the service-quality tolerance levels of their current customer bases; in any case, it will be interesting to watch the evolution here in terms of customer quality expectations and underlying networks’ ability to deliver.

If one assumes that network quality is a key dynamic in delivering a rich and consis-tent subscriber experience, then the public internet struggles as a reliable medium and IPX private clouds prevail. (Please consider any regional bias when evaluat-ing/refuting this point, since ubiquitous tier-1 IP connectivity is not the global norm we here in North America typically expect. As these services are delivered across networks in other regions, public internet quality fluctuates wildly. Private IPX con-nectivity is the near exclusive standard for connectivity to support LTE/Diameter in most regions outside North America.)

coST, SPEED, ScAlE

While the network engineering/QoS argument for the IPX as a medium for

cloud-based service delivery is strong, the economic benefits are similarly convincing. The rapid deployment of cloud-based services, improved service delivery, and time to market are overcoming traditional arguments around bringing it in-house, “lower costs, and support” of cascading business models strengthens the cloud/ IPX argument further. From a commercial perspective, high-quality cloud-based access and service management via the IPX to the global breadth of service provid-ers, applications, communities, and peers dwarf any cost advantage potentially gained though public internet use.

Cloud-based IPX delivery also assumes OpEx versus CapEx benefits, as virtualized platforms make inroads against traditional in-network platforms and service providers avoid costly infrastructure investments in nascent service areas. For instance, a mid-size RCS deployment may require a capital investment of millions of dollars, versus a similar cloud-based hosted RCS solution provided as a managed service and delivered over the IPX for a monthly service charge. Similarly, a Diameter Edge Agent (DEA) deployment in support of an operator’s LTE roaming is a significant capital investment, compared to a monthly operating expense when the DEA is hosted

in the IPX cloud model. Couple these signifi-cant cost benefits with the idea that applica-tion instances can be stood up rapidly and scaled quickly, as required, “in the cloud,” and that amounts to measureable, meaningful value.

Enhanced quality of service, direct access to a vast and diverse array of providers and customers, reduced risk, and shortened time to market, all packaged in a compelling OpEx commercial bundle – the argument for IPX delivery of cloud-based services is sound and the trend is inevitable.

Rich Lindstrom has been a telecoms guy for close to 20 years, with roles spanning enterprise voice and data, international carrier sales leadership, mobile operator roaming, and applications business develop-ment. He has created and executed strategic sales and marketing plans at tier-1 global service providers including Telecom New Zealand and Global Crossing, as well as with leading software and technology vendors Sansay and SAP Mobile Services.

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From a commercial perspective, high-quality cloud-based access and service management via the IPX to the global breadth of service providers, applications, communities, and peers dwarf any cost advantage potentially gained though public internet use.

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Telefónica has launched LTE services in Brazil, Colombia, México, and Chile already. Many more countries in Latin America will get their LTE networks during 2014.

From a revenue perspective, the Latin American market is small. Currently the region represents only 10% of global mobile revenue, but it’s growing fast. It was the sec-ond-fastest growing market in 2012, at a rate of 9%. It is also one of the most social markets in the world, with consumers in Latin America spending twice as many hours (10) per month on social networking sites than the global average, and making up five of the top 10 national markets most engaged with social content worldwide.1

Additionally, smartphone penetration is increasing rapidly. According to recent research from the consultancy Ovum, smartphone penetration in South and Central America grew by 170% in 2010- 12, to 34%. It is forecast to hit 84% by 2017, and Telefónica is ready to help

that number along. As the biggest barrier to increased penetration is price, we will offer deals and plans that help bring smartphones within reach of the average Latin American. We’re also support-ing other platforms, such as Firefox OS, that will make smartphones more afford-able for customers in developing areas.

roAMiNG AHEAD oF THE cUrvE

Telefónica is now the leading mobile operator Latin America, covering 14 coun-tries. In order to maintain our position, we must continue to offer the best service to our customers. And the best service requires the best technology. LTE roaming improves Telefónica’s position by both securing additional revenues from roaming partners and improving its competitiveness.

People want to talk wherever they are, and they don’t want to be limited in who they can reach. Obviously, Latin America and

PrioriTiziNG roAMiNG DATA

Obviously, LTE will create a huge increase in data roaming, due to the simple fact that it can handle more data faster. But not all data are the same, which is why operators may need to identify, prioritize, and price differ-ent rates of transport. The highest-priority roaming traffic, such as secure corporate data, should receive the highest-quality transport. This, in turn, means that lower- priority traffic, such as internet browsing, may have lower-quality transport.

To guarantee security and service levels, operators must route roaming data back to their home networks. However, this home-routed traffic might suffer from transport scalability issues, as well as latency issues, degrading the customer experience for common internet access. That’s why for lower-priority traffic, operators can use local breakout, or “farm out” that data to local networks. Local breakout doesn’t necessar-ily translate to lower quality; it means that the home operator gives control over quality and security to the local partner network, and therefore cannot ensure the quality,

the United States will represent the highest roaming traffic, but once customers have LTE, they’ll expect worldwide roaming. That’s what Telefónica will eventually provide.

MiGrATiNG To lTE

Offering LTE services doesn’t mean Telefónica — or any operator — will be an all-IP network in the short term (especially considering that operators are still selling 2G handsets in some markets!). It will be, rather, a process of migration. Steadily, Diameter signaling will replace Signaling System No. 7 (SS7). Voice and SMS services will stay on 2G and 3G until we can completely transition over to LTE. Data services, wherever there is LTE coverage, will make use of signaling in Diameter where there are IPX providers. It’s not a big switch; it’s a big process.

The IPX is a “private cloud” that provides two important services that help this migration to LTE. First, the IPX can help ensure the quality of service in Diameter signaling. Second, it provides a Diameter routing agent for opera-tors who decide not to deploy one in-house.

Ramping Up LTE in Latin AmericaTelefónica is in the early stages of building out its Long Term Evolution (LTE) network in Latin America, a market poised to grow by leaps and bounds in the next five years.By Pablo Alfageme, Head of Business Development, Latin America, Telefónica Global Roaming, Telefónica

Smartphone penetration in South and Central America grew by 170% in 2010-12, to 34%, and is forecast to hit 84% by 2017.

FOOTNOTES

1. 2013 Latin America Digital Future in Focus (comScore, May 2013): http://www.comscore.com/Insights/Presentations_and_Whitepapers/2013/2013_Latin_ America_Digital_Future_in_Focus

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http://www.comscore.com/Insights/Presentations_and_Whitepapers/2013/2013_Latin_America_Digital_Future_in_Focus

http://www.comscore.com/Insights/Presentations_and_Whitepapers/2013/2013_Latin_America_Digital_Future_in_Focus

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PrEvENTiNG rEvENUE cANNibAlizATioN

Today, consumers must buy different plans for voice, SMS, and data. Once all these services migrate over to LTE, there will be just one plan, as all three services will have

though controlling customer expenditure. Of course, customers will be more or less willing to pay for high-priority routing based on what they’re doing. Corporate customers are more likely to value better security and service compared to someone browsing the Web while traveling with family.

to learn from Europe’s example, where reg-ulatory “remedies” promoted with the aim of protecting consumers actually hamper the development of networks by burden-ing network operators and discouraging the development of the information society.

Pablo Alfageme leads the Telefónica business development team for global roaming in Latin America. He joined Telefónica Móviles Spain in 1996, and has been participating in the launch of mobile services ever since, in both development and marketing roles. Prior to this current position, he worked in Telefónica’s wholesale department, leading the interconnection, SMS premium, and roaming teams at different times. He holds a bachelor’s degree in Industrial Organization from ICAI School of Engineering (Spain) and a master’s degree in Manufacturing Engineering and Management from the University of Birmingham (UK).

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become data-based. We operators must adapt our services before that happens, so that our revenue streams don’t shrink down to just one channel. The path forward is value-added services. The challenge is how to monetize them.

SElliNG SErvicES

As operators, we must remember that we don’t sell technology. Customers don’t care about LTE; they care about services. We need to keep our focus on leveraging new technology to give customers more of what they want. In Latin America, this means better access to business contacts, family, and friends through voice, mobile internet, social media, and other services. It’s all the benefits of smartphones and their apps. More exciting is mobile gaming, which will increasingly become high-definition media, even 3D media. It’s not something so different than what we offer today. All of these services are in place already, but LTE will make them more accessible, more user-friendly. That will be the difference.

Last but not least, the Latin American telecom market should take the opportunity

As operators, we must remember that we don’t sell technology. Customers don’t care about LTE; they care about services.


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latin America represents just 10% of global mobile revenue but it’s growing fast.

latin America was the second-fastest growing market in 2012, at a rate of 9%.

latin America has five of the top 10 national markets most engaged with social content worldwide.

Smartphone penetration is increasing rapidly. Smartphone penetration in South and Central America grew by 170% in 2010-12, to 34%.

Consumers in latin America spend twice as many hours (10) per month on social networking sites than the global average.

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that companies and brands look to leverage the opportunity to draw in potential customers. Yesterday’s world was about one-way customer interactions; today, engagement anywhere on any device to ensure a positive experience is important. In response, 62% of businesses are prioritizing mobile as a way to improve customer responsiveness.

GolD MiNE oF biG-DATA oPPorTUNiTiES

Businesses and advertisers are quickly finding that mobile behavior information – specifically in real time – is critical to improving many business initiatives. This trend solidifies the importance businesses now place on turning vast amounts of data into immediate insight. Consequently, it is extremely important to mobile network oper-ators (MNOs), which sit on a gold mine of data regarding subscribers’ usage patterns.

Mobile is resetting the parameters of how businesses engage their customers. Yankee Group’s 2013 US Consumer Survey, December finds that 66% of advanced users leverage mobile apps for shopping, checking coupons, and comparing pricing (fig. 1). Among respondents, 60% say they frequently use their mobile device for entertainment, 61% say their phone is highly important to their social lives, and 57% say they use it to stay up to date on the latest information.1

In 2013 the mobile services market crossed the seven-billion-connection and $1-trillion-revenue marks globally. Mobile lines are also increasingly 4G-capable, with global LTE lines set to grow from 123 million in 2013 to 1.3 billion in 2017 (including a jump in the United States from 72 million to 181 million). The number of connected users is staggering, creating an unparalleled opportunity for businesses to harness big data for improved marketing. Given that mobile devices are deeply embedded in consumers’ daily routines, it’s only natural

analyzed. However, MNOs face challenges in integrating subscriber profile data with detailed mobile usage behavior data in near real time because of their monolithic traditional IT infrastructures and solutions that have fallen short in handling large sets of high-speed and complex, yet valuable, data. This creates the “operator big-data dilemma.”

Each day MNOs capture billions of network events consisting of structured and unstruc-tured information on their customers – their gender, age, device (make, model, and OS), activities, location, applications, and so on – further fueling the exponential growth in data. This massive volume of information must be captured, aggregated, stored, and

Exploiting the Operator Big-Data Dilemma for the Future Digital EconomyMobile changes consumer behaviors.By Sheryl Kingstone, Director, Mobile Leadership Strategies, Yankee Group

Businesses looking to engage with customers on mobile apps and devices.

Advanced users leveraging mobile apps for shopping, checking coupons, and comparing pricing.

Customers who would share personal information for better rewards.

62% 66% 43%

consumers are active users of mobile devices and apps

Figure 1. Mobile devices and apps have become a part of consumers' everyday lives.

Based on data fom Yankee Group's 2013 US Consumer Survey, December.

FOOTNOTES

1. 2013 US Consumer Survey, December (Yankee Group, December 2013): http://www.yankeegroup.com/ResearchDocument.do?id=61588

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http://www.yankeegroup.com/ResearchDocument.do?id=61588

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capitalize on the opportunity, businesses must get past the old Web-based metrics of page views and broad-based demographics and instead leverage big data to uncover and measure real-world behavioral data. This insight can then be used to build extremely targeted and customized engagement strategies that deliver high marketing ROI.

Solving the problem will be crucial to meeting businesses’ goals for mobile customer engagement (fig. 2).

MNOs can either monetize their data for internal use or become valuable partners of the big-data ecosystem for their own enterprise customers. The industry can add real value by capitalizing on big-data assets and combine the variety of data available. Big-data intelligence will ultimately allow brands to strengthen relationships with consumers through more targeted and context-specific marketing efforts. For example, MNOs can:

• Improve location-based opportunities. New opportunities to monetize location information based on MNO data assets are at their immediate disposal, and not readily available to other vendors.

MNOs have a huge opportunity to capitalize on their mobile network data by leveraging the latest analytics, in-memory, and cloud technologies. MNOs need to collect, analyze, and monetize real-time and micro-segmented subscriber big data for their customers who want to unlock and monetize mobile consumer insights and market intelligence. Businesses are desperate to move beyond traditional marketing methods, such as consumer panels and surveys, to improve marketing with consumer behavior, insights, and market intelligence. Operators have unique assets contained within user-location data, CRM systems, and billing information. Mobile usage is putting location at center stage when it comes to marketing strategies. As businesses demand more hyper-local marketing strategies, location will play a pivotal role in driving engagement and building loyalty.

bUSiNESS DEMANDS FloUriSH

Mobile marketing has a bright future, but only for players that have the insight to understand who their customers are, where they are, what they are willing to spend, and why they are making purchases. To truly

Identifying high-value customers Improving customer retention and engagement

Use mobile data to track and measure user experience

Analyze segments with the highest total lifetime values to further fine-tune mobile marketing

Run in-app marketing based on which hours of the day users are most engaged

Running campaigns

Understand user behaviour on mobile application for marketing campaigns

Creating segmentation models

How are you meeting your business goals for mobile customer engagement?

Figure 2. Big data provides more customer-engagement opportunities.

Based on data fom Yankee Group's 2013 US Consumer Survey, December.

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Using that insight, the retailer can measure the impact or effectiveness of a new marketing or ad campaign. Add- itionally, businesses can create a more accurate target persona – a sports enthusiast and frequent diner, for example.

• Tie together a cross-channel experi-ence. Advertisers that launch TV cam-paigns at specific times, such as during major sporting events, can potentially understand what users did during ad breaks, such as visiting websites. Addition-ally, bricks-and-mortar stores could garner more complete insight into what sites their customers visit while at the store. The goal is a cohesive understanding of all media consumption and/or to measure consumer activity across channels.

• Focus on loyalty. Geo-fencing and prox-imity marketing enable real-time interac-tions, but context is where the rubber hits the road. Creating rich customer profiles

Location-based services can reveal where an individual is at a specific point in time and then offer those subscribers locally relevant offers.

• Drive change by predicting the future. Additional insight can allow MNOs to know more about where groups of individuals are during a certain time period. This provides a greater degree of insight into people’s behavior, allowing MNOs to predict future behavior patterns. The ability to measure, compare, and under-stand what factors influence the number of people visiting a location at any time is incredibly useful for market intelligence departments.

• Launch unique persona segmentation. A retailer addressing the youth market can identify trends in a shopping mall by looking at that specific demographic group. It can also identify how often and on what days the group visits the mall.

Sheryl Kingstone is a director of Yankee Group's Mobile Leadership Strategies service, with a focus on improving the customer experience across all interaction channels for customer acquisition and loyalty. She is a well-known industry analyst in the CRM market, with more than 20 passionate years' experience devoted to helping businesses eliminate customer frustration across sales, service, and marketing. As a recognized thought leader in the CRM space, she was awarded the 2006 CRM Influential Leaders Award and was also the first female to be inducted in the CRM Hall of Fame.

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to drive loyalty campaigns enables an unparalleled depth and breadth of customer segmentation, which can be used for improved customer engagement strategies based on individual pref-erences and usage patterns. The future is all about combining precision location, such as indoor positioning, with customer context to suggest the right offer to the right person at the right time.

Big data is a key building block for the future digital economy. Fundamentally, it must be utilized in a transparent and responsible way in order to realize its potential to transform business and improve people’s lives. It’s not just about capturing one moment in time, but also about understanding trend data collated over time to build insights about location and support decisions relating to those places and segments within them. Operator big-data intelligence is providing businesses with a better understanding, in a comprehensive way, of the needs, trends, and behaviors of users, not only to improve their own decision-making, but also to contribute to mobile marketing and advertising goals.

Big data is a key building block for the future digital economy.

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ecosystem, impacting operator networks and subscribers. SIM boxes and third party email-to-SMS gateways provide a fresh, lucrative means for “creative advertis-ing” that is constantly evolving in scope and complexity. In the short term, these attacks can cause a degradation of service and subscriber trust in the medium, leading to customer churn, increased operational costs, and a loss of revenue for operators. In the long term, a lack of subscriber trust will inhibit mobile operators from monetizing new market opportunities. As such, mobile operators need sophisticated methods for battling SMS spam and protecting their sub-scribers and investment.

kNoW THy TArGET

Knowing your audience is the key to selling anything, and scams are no exception. How one goes about knowing an audience varies by the messaging medium, however. For example, Nigerian 419 scammers from

For years, mobile service providers have operated in a “walled garden,” allowing them to effectively insulate subscribers from the messaging threats that have long plagued other communications mediums. The result has been a fertile mobile ecosystem wherein users around the globe invest a large degree of trust in their devices and the messages received on them. Mobile devices and SMS messages have in turn become integral parts of both routine and mission-critical tasks. For operators, this trust-engrained communication vector has proven to be an ever more profitable service as associated costs have lowered.

Several years ago, unlimited texting plans and new methods of attack exponentially improved the profitability of SMS spamming, encouraging email spammers to cross over to the mobile world. Large numbers of attackers have since caught on to the ease and relative inexpensiveness of the SMS medium. SMS-based spam and fraud are now rapidly eroding the base of the mobile

the email realm craft outlandish, unbeliev-able messages specifically targeting more “receptive” victims. Those willing to respond are far more likely to fall for the rest of the con, thus yielding a better return on the time and money invested.

While some email domains can hint at their country of origin, most tend to transcend borders. Some attempts are made to send emails in the same language as the email’s domain, but it’s a glancing attempt at target-ing users. Mobile phones and SMS do not enjoy the same luxury. Instead, modern telephone numbers are highly specific to each country and therefore ripe for geo-graphically targeted mobile phone calls and SMS messages.

GEo-TArGETiNG viA SMS

For routing purposes, when one dials or sends an SMS to any set country calling code, it will most likely be received in that country. Spammers can also order carrier-specific SIM cards in bulk, allowing them to send large quantities of SMS messages from within that network or country. There even exist third-party vendors that offer setup services for remote SIM farms in a desired locale.

Scam-BustersHow SMS phishing uses area codes in credit union, bank, and child support scams. ByNeilCook,ChiefTechnologyOfficer,Cloudmark

PArT 4: AMEricAS

SMS-based spam and fraud are now rapidly eroding the base of the mobile ecosystem, impacting operator networks and subscribers.

Spammers can also order carrier-specific SIM cards in bulk, allowing them to send large quantities of SMS messages from within that network or country.

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The reason for these three area codes featuring so high on the list is quite simple: junk cars. A local junk car reseller/scrapper has decided that SMS is a lucrative vector for “advertising.” However, towing junk automobiles is only lucrative within certain distances, due to the cost of transportation, and as a result they have targeted fellow local residents of south Florida using the most populated area codes. The sheer volume of this ongoing, region-specific SMS campaign has led to public outcry and even lawsuits against several suspected perpetrators.

bANk-PHiSHiNG

Specificity is a powerful tool for bank-phish-ing attempts as well. The use of any details that are seemingly personal to the recipient can aid phishers in attempts to impersonate financial institutions. By tricking misguided victims into believing the ruse, attackers are able to elicit sensitive personal and financial details from the victims.

One tried-and-true method for doing this is by providing the first four to six digits of the target’s debit or credit card number. Users receiving these messages may see what they believe to be their bank providing the exact leading digits of their own personal

Spammers have used this to their advantage for delivering a myriad of country-specific offers via SMS. In the UK, government-mandated compensation for mis-sold payment protection insurance (PPI) sparked a wildfire of PPI-compensation SMS spam that continues to this day. Either from local SIM cards or from abroad, the number prefix 07 directs to the allocated number space for mobile phones. This allows spammers to aim their SMS campaigns directly at UK mobile devices.

Phone numbers in the United States are a bit different. Aside from certain blocks, most numbers are allocated by geograph-ical region via three-digit area codes. For instance, those who’ve taken up residence in the Manhattan borough of New York City have either a 212 or 646 area code that prepends their mobile phone number.

Those mobile subscribers unfortunate enough to have the Fort Lauderdale, Florida-based area code of 954 will likely see more SMS spam than most others in the United States. By volume, Fort Lauderdale ranked number one for most SMS spam received in 2013 (as of August). Not far behind, in fourth and fifth place respectively, were the neighboring area codes of Miami, 786 and 305.

Upon further inspection of US area codes, a pattern emerged. Each and every one had been hit with a phishing attack custom- tailored to a bank or credit union headquartered in or specific to that area. Cincinnati’s 513 ranked second in volume and was inundated with fake Fifth Third Bank SMS phishing messages. Fifth Third Bank also happens to be headquartered in Cincinnati. The aforementioned 216 of Cleveland came in third, due to SMS messages claiming to be from the city’s own KeyBank. Residents of North Alabama were targeted via their 256 area codes with texts impersonating another local credit union, WinSouth. Susquehanna Valley Federal Credit Union was mimicked in its own 717 backyard.

Three of the top 10 area codes for bank-phishing sat as exceptions to the city-focused trend. Bank-phishing in 828, 910, and 919 – all in the state of North Carolina – took a turn as messages flooded in imitating smiONE, a prepaid Visa debit card. The issuer of this card, Bancorp Bank, is not specifically located in North Carolina, however smiONE provides a prepaid debit card service in North Carolina called the ncKIDScard. The ncKIDScard is meant to be used specifically for paying child support in North Carolina. An alarming 8%

card. Unfortunately, those who are taken in by the ploy don’t realize that these are publicly available numbers, which simply identify the industry and issuer of the card.

Even prolific financial institutions can suffer from geo-targeting. Cleveland-based KeyBank was the target of one such attack in 2013. Forty-seven percent of all KeyBank SMS phishing attempts hit Cleveland, Ohio’s 216 area code. A total of 63% of messages were reported in KeyBank’s primary state of operation, Ohio, while the bank’s other two primary areas of operation, New York State and Seattle, Washington, saw the remaining 37%. The distribution of this phishing attack appears to have been highly deliberate: spanning states from coast to coast, these messages explicitly targeted only the three regions most important to KeyBank.

Other campaigns have taken this a step further, to a city-specific resolution. A breakdown of SMS bank-phishing attempts by area code revealed that 210, of San Antonio, Texas, had received the highest volume of these messages as of August in 2013. Almost all of the messages affecting the area masqueraded as a fraud alert from Generations Federal Credit Union, which happens to be based in, and primarily operates in, San Antonio.

The use of any details that are seemingly personal to the recipient can aid phishers in attempts to impersonate financial institutions.

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other 68%

North Carolina 8%

310 3%

817 3%

717 3%

256 3%216 3%

513, Cincinnati 4%

210, San Antonio 5%


Implementing an effective solution allows operators to avoid delivery of these messages, thus protecting subscribers and safeguarding mobile operators from customer churn, increased operational costs, and loss of revenue. In addition, operators may be able to slow or avoid subscriber migration to OTT channels by providing SMS security to users before the medium’s reputation becomes tarnished much like email. By continuing to offer quality, trusted networks around the world, operators can implement a means for decreasing the cost of SMS while retaining and expanding its revenue stream.

Neil Cook has more than 20 years’ experience in mobile and internet messaging and security, designing scalable and secure solutions for telecommunications companies globally. At Cloudmark, he led the EMEA Technology Services team and some of the company's largest deployments. He was an integral part of the company's research and design activi-ties before becoming CTO in 2012.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1ogHaQv

of all SMS bank-phishing attempts in the United States hit these three combined area codes in 2013 (fig. 1) – it is sad to see that even children are not exempt from the phishers’ exploits. While phishers seek to swindle child support from residents across North Carolina, it’s important to note that any questions or concerns you may have regarding an account should be directed to the legitimate phone number provided on the back of your credit or debit card.

THE NEED For SMS SEcUriTy

Protecting networks and subscribers against these types of dynamic attacks can be difficult, but it is imperative in order to preserve future revenue streams. Effective content-filtering solutions require monitoring both on- and off-network SMS message flows. As spammer tactics change rapidly, the solution must operate in real time and quickly evolve against highly dynamic attacks. The most effective solutions will leverage a global threat network enabling mobile operators to identify attacks regardless of geographic boundaries. Finally, the solution should function across multiple platforms, as attacks may originate in email before migrating to SMS.

NC-910 3%

NC-9192%

NC-828 3%

Figure 1. Phishing attacks target specific area codes in the United States.

Based on data from Cloudmark.

received SMS bank-phishing messages by area code, 2013 (to August)

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• It requires no third-party app. The app is built into the mobile operating system that ships with the phone.

• It requires no login or account setup. Your phone number is the global identifier.

• It’s asynchronous. There is no presence indicator telling people that you are typing which alleviates the pressure you may otherwise feel to reply immediately.

• It’s inherently succinct. Although most GSM phones these days will concate-nate longer messages for the sender and receiver, the brevity of a text message means it’s not email. Texting allows for quick, efficient communication.

• It’s intimate. We mainly text with our friends and family, but we’re increasingly open to texts from businesses if it’s useful

It’s no secret: people everywhere love to text message. It is the most popular and fastest growing communication medium on the planet. There are more texts everyday than voice calls. An increasing population would rather send a text than leave a voice message. The next wave of text messaging innovation will only solidify the medium’s place in our lives for years to come.

WHy iS TEXTiNG So PErvASivE iN oUr livES?

• It just works. SMS is the public messag-ing standard. We’ve known for years that we can call anywhere globally and now, with the inter-carrier connectivity, we can message anywhere too.

• It’s ubiquitous. 100% of phones globally are equipped with SMS capability.

to how we have seen other mobile instant messengers like AOL, MSN, and Yahoo come and go in the past 10 years.

iS ricH coMMUNicATioNS SErvicES (rcS) GoiNG To rEPlAcE TEXT MESSAGiNG?

Eventually yes, but not for another five years or so. In addition to operator efficiencies, RCS brings the promise of the enhanced services to consumers that are offered by many OTT applications. Once all operators globally have implemented RCS and con-sumers have upgraded to RCS-compliant phones, you will see RCS replace traditional SMS and MMS. To the consumer it will still be text messaging – that is, they will still use their phone’s native messaging app – only now they will be able to send texts while on an airplane, to video conference, to share files, and more.

WHAT iS THE NEXT WAvE oF TEXT MESSAGiNG iNNovATioN?

We are seeing enormous pent-up demand for cloud texting services, which includes

to our lives – for example, receiving a text from the airline about a flight delay.

• It’s one of the few smartphone alerts customers keep turned on. In the age of smartphones where we’re inundated by apps notifications, but we give high priority to SMS. We don’t alert on email because it’s too noisy, and we can live without most others.

i THoUGHT TEXT MESSAGiNG WAS GoiNG To bE SloWly rEPlAcED by oTT PlAyErS WHo clAiM To bE TAkiNG MESSAGiNG MArkET SHArE iN THE UNiTED STATES AND GlobAlly?

Not a chance. Because of the proliferation of unlimited texting (SMS and MMS) plans in the United States, there is no OTT threat to US operators. Texting in the United States is bundled among other services, so we don’t have to worry about costly overages like we did a decade ago. Internationally this is not the case, hence why you see micro-market dominance by some OTT players. As operators globally continue to decrease their pricing toward free, you will see these OTT players fade away, similarly

The Next Wave of Text Messaging Get ready to communicate via SMS to any phone number, whether it’s mobile, landline, or toll free, and from non-phone devices like your PC, laptop, tablet, and TV.By John Lauer, CEO, Zipwhip

PArT 4: AMEricAS

Texting allows for quick, efficient communication.


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sending and receiving text messages under your mobile, landline, or even your toll-free phone number from non-phone devices like your PC, laptop, tablet, TV, and so on. This demand is from individual consumers as well as small, medium, and enterprise businesses.

WHAT Do yoU MEAN, “cloUD TEXTiNG For My MobilE NUMbEr”?

This means allowing customers to access their text messaging service from any device with an internet connection. Similarly to how you access your Gmail account from any device today, consumers want to be able to send and receive texts from any device. Solutions like Verizon Messages or AT&T In-App Messaging allow customers to experience text messaging on non-phone devices under their existing mobile numbers.

WHy WoUlD ANyoNE WANT To TEXT FroM A lANDliNE or Toll- FrEE NUMbEr?

In North America the biggest innovation already taking place in this next wave is landline and toll-free-number text

This next wave of text messaging will be about access beyond the mobile phone and the ability of consumers to communicate via SMS with any phone number, whether it’s tied to an individual’s mobile phone, the local pizza place, or the airline’s toll-free customer support center. Text messaging in this next wave will connect consumers to not just the people in their lives, but also the entities of their choosing.

John Lauer is CEO of Zipwhip and a leading expert on the text messaging industry. Prior to Zipwhip, he was founder and CEO of Simplewire, one of the first SMS aggre-gators. He has served on several industry boards including the Mobile Marketing Association, the Landline Texting Working Group, and the newly formed Toll Free Texting Association.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1gy1eeM

messaging. Because of the inter-operator hub model in the United States, landline and toll-free numbers can now be provisioned for SMS on wireless operator networks. Once provisioned, customers can send and receive texts from supporting applica-tions (web, desktop, tablet, and so on). This means that landline operators (LEC, CLEC, and so on) who have only offered voice service can now offer SMS on all their phone numbers. Any owner of a landline or toll-free phone number can begin text messaging using that number without interruption of their existing voice service. Millions of small and medium businesses can text-enable the voice number they have promoted for years.

Consumers want to text, not call, the busi-nesses in their lives. They want to interact on their own terms, in their own time, and texting allows them to do this. The conve-nience and ease of sending a quick text to ask a question, schedule an appointment, place an order, provide feedback, and check on a payment allows consumers to interact with a business without lengthy waiting times on hold. This intimate interaction builds brand loyalty, increases customer satisfaction, and creates operational effi-ciency for businesses.


This next wave of text messaging will be about access beyond the mobile phone and the ability of consumers to communicate via SMS with any phone number, whether it’s tied to an individual’s mobile phone, the local pizza place, or the airline’s toll-free customer support center.

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the brand name joyn. RCS 5.1, the most current release, is not branded under joyn, and operators will likely move to 5.1 and not take part in joyn. (See box: “Three Must-Haves for Rich Communications Services.”)

The GSMA is counting on more operators and device manufacturers to join the RCS ecosystem and help build momentum. Subscriber interest in RCS should be quite strong, given the services on offer: both voice and messaging plus chat, video calls, group chat, file transfer, presence, IP voice call, and geolocation. Currently RCS is more popular in Europe because more operators are offering it, to compete with OTT players such as Skype and WhatsApp. European operators’ decision to charge per text message or for data caused many subscribers

Texting is so prevalent that middle-schoolers and retirees are tapping out messages with equal abandon. North Americans typically send SMS texts, while Europeans favor using an over-the-top (OTT) messaging app. Globally, users of all ages are seeking out OTT apps for texting. Based on Informa Telecoms & Media research, subscribers will send 50 billion OTT messages and 21 billion SMS messages each day in 2014.1

The GSMA is working with mobile operators to respond to this shift away from operator services like SMS by bundling multiple, popular communication services within Rich Communications Services (RCS) that connect over a shared IP Multimedia Sub-system (IMS). Created by the GSMA, RCS is marketed by a handful of operators under NEXT UP, MorE DEvicES AND

broADEr SEArcHES

Success hinges on operators’ willingness to co-operate and interconnect their networks. SMS became popular after interconnecting gave subscribers an easy, ubiquitous way to text across networks. RCS is poised to follow

to move to the OTT players’ free options. US subscribers, who are not charged per text, have not signed up for OTT services at the high rates seen in Europe, nonetheless US operators are also seeing a decline in SMS usage (fig. 1). RCS is a reason for lost subscribers to return to their carriers and for current subscribers to stay.

Move Over SMS, Here Comes RCS Mobile operators are planning for Rich Communications Services to regain market share lost to free over-the-top services. It’s time to put aside competition and co-operate over standards and internetworking.By Adrian Synal, Principal Engineer, System Design and Strategy, T-Mobile USA

SMS growth in US

Figure 1. SMS revenue and traffic was on the decline in 2012.

Based on data from Chetan Sharma Consulting 2012 http://www.chetansharma.com

FOOTNOTES

1. "OTT messaging traffic will be twice volume of P2P SMS traffic this year" (Informa, 30 April 2013). http://www.informa.com/Media-centre/Press-releases--news/Latest-News/OTT- messaging-traffic-will-be-twice-volume-of-P2P-SMS-traffic-this-year/

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http://www.informa.com/Media-centre/Press-releases--news/Latest-News/OTT-messaging-traffic-will-be-twice-volume-of-P2P-SMS-traffic-this-year/

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a similar path – if operators and OTT players agree to co-operate.

Operators will find the current RCS release interesting as it adds an option for enabling standalone messaging rather than only ses-sion-based chat. Also, operators can choose between OMA-CPM (Converged IP Messag-ing) and SIMPLE IM based implementations. In the next release, enhancements around file transfer and presence, plus opening RCS to other devices such as televisions and browsers, will be added.

RCS subscribers can also look forward to gaining access to broader searches for contact information not in their address books. Typing in a contact name will start a search that extends to global address books. Subscribers will have access to a much larger set of contact information and be able to communicate beyond their personal phone contact list.

MASS ADoPTioN NEEDS NETWork iNTErcoNNEcTioN

While chat, video calls, and messaging are often seen as having a younger

RCS offer much more than basic texting or one-dimensional apps. Ten years from now, RCS has the potential to replace SMS and MMS altogether, if – and it’s a big if – operators and OTT players commit to interconnecting and give RCS a prominent space on the handset. RCS is a chance for operators to lead a change to IMS and offer subscribers a better, easier way to communicate with a set of apps they already know and enjoy.

Adrian Synal has been in the wireless industry for 12 years in multiple roles. Currently, he is focused on architecting next-generation IP-based messaging and IMS services.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1gy1k6e

demographic, RCS appeals across demo-graphics, age groups, and regions. These aren’t age-specific services designed for a younger generation; anyone with a smart-phone is a good candidate for RCS.

Consumers and businesses are target markets for RCS. With RCS at their finger-tips, consumers get convenient access to a rich set of services, rather than one app for chat, a different one for video calls, and another for text. They no longer have to switch from one app to another to communicate.

Businesses, especially small and medium- sized organizations, can enrich their com-munications by setting up an easy-to-use internal portal with messaging, file sharing, IP voice calls, and other RCS options. RCS has industry-defined APIs and third-party SDKs that open up this type of portal, and operators can offer support and manage-ment services for these portals.

The GSMA has brought leading mobile operators and device manufacturers to the RCS table, and they are already setting the groundwork to make the shift to RCS a reality. The combined dimensions of

THREE MUST-HAVES FOR RICH COMMUNICATIONS SERVICES

1) Interconnection among all operators. At the close of 2013, Vodafone Spain, Movistar, Orange Spain, Vodafone Germany, Deutsche Telekom, T-Mobile, SK Telecom, KT, and LG U+ had embraced RCS and were offering it under joyn. Many more of the hundreds of operators worldwide need to join the RCS effort to make the services viable.

2) Aunified,high-qualityexperience.When subscribers move to a new pro-vider or purchase a new handset, their RCS experiences should remain stable and consistent.

3) Easy access. Using RCS should be easy from the handset, desktop, or whatever screen you’re using. It needs to be an embedded experience that pro-vides easy, immediate access to RCS.

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especially interested in these services. For them, alternatives that let them text or place calls for free always win out over anything the incumbents are offering.

With so many such apps out on the market, Pinger knew it had to separate itself from the pack very quickly. We were the first app to start giving out free mobile phone numbers, so subscribers could send SMS messages from non-phone devices – an iPod Touch or an iPad, for instance – as long as they were on a persistent data connection such as Wi-Fi.

By giving people a real phone number, we’ve changed the game drastically and innovated around how people want to communicate. Texting from client to client is nothing new, but all parties need to be running the same app. With Pinger, users can send and receive real SMS messages through their own phone number from anywhere in the world totally free of charge. For people who normally couldn’t send a text message, including iPod Touch and iPad users or someone who has a “hand-me-down” phone that’s no longer

The words “innovation” and “communica-tions” don’t often occur in the same breath when you’re listening to traditional commu-nications service providers. Most have enjoyed monopoly status for decades, and only in the past 30 years have they had to deal with real competition.

Today, that competition is taking the form of over-the-top (OTT) players that deliver communications services while largely, if not completely, bypassing the telco networks’ traditional economic infrastruc-ture. OTT players have hit upon some-thing that’s capturing the interest of people around the world and making the carriers take notice. (See box: “What Happened over the Top in 2013.”)

STANDiNG oUT FroM THE PAck

Upstarts like Pinger are snapping up cus-tomers who might not normally send a text message. People in developing nations who often can’t afford or don’t have access to landline or cellular connectivity are

connected to a cellular network, having a phone number is critical.

Take college students, for example, many of whom don’t want traditional phone plans due to financial reasons. They can use a client-to-client app like Skype, WhatsApp, or Viber, but if they have to call the bursar’s office or a bank, they can’t rely on the other party having the same app. They need the ability to talk to phone numbers, and that’s where a service like ours becomes valuable.

More than 100 million people have down-loaded our various apps. Users get our service for free in exchange for unobtrusive ads, or for a nominal fee of $6 a year we take out the ads. Interestingly, most users have chosen the free option. This model allowed us to build a profitable business, and it worked right away.

We’ve found success focusing on users who have Wi-Fi-enabled devices but no cellular connectivity, and with people who may not be happy with the economics of their phones but still need to have a phone number. Small businesses that need an extra phone number are also interested in our services.

OTTs Take Up the Mantle of Communications InnovationWith texting and chatting becoming free commodities, how do over-the-top players innovate and stand out in a crowded field?By Greg Woock, Co-Founder and CEO, Pinger

PArT 4: AMEricAS

We’ve found success focusing on users who have Wi-Fi-enabled devices but no cellular connectivity, and with people who may not be happy with the economics of their phones but still need to have a phone number.

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photos much more to communicate, so we want to see how this plays out.

I firmly believe that the intersection of social networks and private communications needs to be more fully explored. In the end, it’s about finding new and interesting ways to communicate that are above and beyond just texting.

Greg Woock is co-founder and CEO at Pinger. Prior to Pinger, he was CEO of Virgin Electronics, the consumer electronics arm of Richard Branson’s Virgin Group, Vice President of Worldwide Sales at Hand-spring/Palm, and Vice President of Sales at Creative Labs. He brings to Pinger an excep-tional executive track record of building successful teams, products, and companies.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1gy2mPB

to run on their phones. Today, those apps are incredibly rich, diverse, and powerful. Once that application layer was opened up to consumer choice, we saw a tremendous transformation in how people communicate.

But what’s next? On the economic side, we’ll see a change in how communications services are priced. With all the free choices out there, we’ll likely see the telcos catch up to that model. The carriers will quickly realize they can’t charge a wild amount of money for something that can be had for free.

At Pinger, we have a global view of commu-nications. Today most of our users are in the United States, but we want to go beyond our home base. Most operators worldwide aren’t inclined to allow connectivity to their networks for apps like ours. Yet probably half a billion people per month connect to these services around the world.

To get to the level of success we’ve had in the United States on a global level, we’ll be innovating around messaging and com-munications. Snapchat has hit upon this really well with what are essentially throw-away images: you take a picture, send it, and it’s gone, not hogging up precious space on your phone. We’re finding that kids under 18 are using pictures and

THE cArriErS rEAcT

A lot has been said about circumventing the carrier network and delivering free commu-nications services, but with so many alterna-tives on the market, you have to go beyond being free to make an impact. In the long term, it’s about showing how you’re differ-ent from everyone else in the market and having a great service that people really like.

We hear a lot about how telcos and OTTs need each other to survive, but that’s not always true. To partner for access to a telco’s large user base hasn’t been necessary for quite a while. Instead, OTTs rely more on word of mouth and reputation, or on people seeing an app ranked highly in the App Store, than an established customer base.

T-Venture, the investment arm of Deutsche Telekom, one of the largest telecommunica-tions companies in the world, is among our investors. Their investment shows that they see what’s happening and are doing something about it.

THE NEXT STAGE oF coMMUNicATioNS SErvicES

Steve Jobs’ gift to the mobile world was to allow the customer to decide which apps

WHAT HAPPENEDOVER THE TOP IN 2013

• Skype reached 2 billion minutes in a single day.1

• WhatsApp handled 27 billion chat messages a day.2

• Snapchat sent 350 million picture messages a day and went from zero to a market cap of $3 billion.3

FOOTNOTES

1. elisa Steele, "Thanks for Making Skype a Part of Your Daily Lives – 2 Billion Minutes a Day!" Big Blog (Skype, 3 April 2013): http://blogs.skype.com/2013/04/03/thanks-for-making-skype-a-part-of-your-daily-lives-2- billion-minutes-a-day/

2. "New daily record: 10B+ msgs sent (inbound) and 17B+ msgs received (outbound) by our users = 27 Billion msgs handled in just 24 hours!" (WhatsApp, 12 June 2013): https://twitter.com/WhatsApp/status/344966710241161216

3. Evelyn M. Rusli and Douglas MacMilan, "Snapchat Spurned $3 Billion Acquisition Offer from Facebook," Wall Street Journal (13 November 2013): http://blogs.wsj.com/digits/2013/11/13/snapchat-spurned-3-billion-acquisition-offer-from-facebook/


http://bit.ly/1gy2mPB

http://blogs.skype.com/2013/04/03/thanks-for-making-skype-a-part-of-your-daily-lives-2-billion-minutes-a-day/




https://twitter.com/WhatsApp/status/344966710241161216

https://twitter.com/WhatsApp/status/344966710241161216

http://blogs.wsj.com/digits/2013/11/13/snapchat-spurned-3-billion-acquisition-offer-from-facebook/




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PART 5: ASIA

operators are working smarter to stay ahead of the changing market. For the Asia-Pacific countries, changes are happening faster than elsewhere. The Asian market has traditionally led in technology adoption: consumers and companies are known for their acceptance and appreciation of new technology, the benefits of which they quickly adapt to their everyday lives, whether at home or in the workplace.

According to GSMA Intelligence, Asia makes up two-thirds of mobile revenue growth globally and is expected to exceed $500 billion in 2013.1 This is equivalent to North America and Europe combined (fig. 1).

But even within the Asia-Pacific region, there is a wide disparity as you go from country to country. For example, Japan, South Korea, Southeast Asia (the ASEAN nations), Australia, and New Zealand tend to be the earliest adopters of new technology. And while smartphone adoption may be high in Japan, Korea, China,

Ever since Japan’s NTT DoCoMo launched its i-mode mobile internet service in 1999, the Asia-Pacific region has been, for the most part, ahead of the curve on mobile communications. Mobile operators in the region have historically been willing to take risks and roll out new devices and services, and customers in the region have been quick to adopt them.

But now, operators in this part of the world are facing the same challenges as every-where else: voice and SMS revenues are declining, causing them to rethink business models. As traditional services wane, data usage is on the upswing, driven by faster networks such as LTE, smarter phones, and over-the-top (OTT) apps.

GETTiNG AHEAD oF THE cUrvE

These trends have been plaguing the industry for several years, and unfortunately things aren’t getting any better. So

Asia-Pacific Stays in Front of the Telecoms Race Operators respond to declining revenues and increasing competition from OTT providers with LTE roaming, RCS, and monetization of mobile consumer data to stay ahead of the game.By Matthew Tonkin, Vice President Sales, SAP Mobile Services

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FOOTNOTES

1. Mark Giles, "Global mobile revenue growth shifts to Asia," Mobile World Live (1 July 2013): http://www.mobileworldlive.com/global-mobile-revenue-growth-shifts-to-asia

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by outsourcing the management of these traditional services and reallocating their resources to future growth areas, such as data. This juggling act, of maintaining traditional revenues and accelerating new business lines, will be a critical strategy for operators to manage, as the industry accelerates through this technology change.

GETTiNG PAST THE EArly ADoPTioN PHASE

NTT DoCoMo proposed the LTE standard in 2007, and it and other Asian operators in South Korea, Hong Kong, Japan, and the Philippines have been at the forefront of LTE development and deployment. Asia was among the first regions to see a rapid rollout of LTE, and in the past 12 to 18 months we’ve seen many countries extend their LTE networks with the launch of LTE roaming.

When you have widespread LTE networks with their faster speeds, the next step is to launch Rich Communications Services (RCS) to leverage the network and gain new revenue streams. South Korea is a shining example of RCS adoption, and we’re also seeing Southeast Asian countries going ahead with deploying RCS. It’s too early

to say if RCS will erode OTT business, but it will certainly shake things up.

Operators are also focusing intently on OTT players to determine whether to compete or co-operate. This is evidenced by the many operator announcements confirming partnerships with the OTT players in their local markets. At this stage of market maturity, operators are not wrong to pursue both models.

China is the largest mobile-app market in the world, with other Asian countries also experiencing heavy growth in this area. But so far, as in other regions, app monetization has been elusive, with Asian consumers far more likely to download free apps rather than paid ones.

crEATiNG NEW rEvENUE STrEAMS

Besides LTE roaming and RCS, operators in Asia are looking for other ways to bolster their revenues. One is the monetization of mobile consumer data. The mass rollout of smart devices and LTE is changing the way people communicate and engage with each other, and this change in our interactions is creating a massive amount of data for

and Singapore, feature phones are still the dominant type of handset in India, Indone-sia, Vietnam, Thailand, and the Philippines.

Regardless of device or country, we’re seeing that as traditional voice and SMS experience a decline, operators are adapting

Total mobile revenue and growth by region, 2012

$500

$375

$250

$125

$0Asia Americas europe Africa oceania

Total mobile revenues, 2012, in USD billion

Annual mobile revenue growth, 2012

10% 7%

-3%

8%

-1%

Figure 1. Asia ranked first in mobile revenue growth in 2012. The region consistently outpaces the rest of the world. © GSMA Intelligence 2013.

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mobile operators. The sheer volume and scale of data has made its analysis very difficult.

Operators realize that this data will enable them to see consumer behavior and patterns, which is incredibly valuable infor-mation not only to them but also to other enterprises. Operators would like to take that anonymized data and sell it. The data could show, for example, how many custom-ers are between the ages of 18 and 35, how many own smartphones, which websites they frequent, and where they are likely to hang out on a Friday night.

Operators across the globe want to provide this type of service for new revenue, but operators in Asia such as Axiata Group (a contributor to this guide) will be the first to actually do so.

TrAilblAziNG THE NEW MobilE WorlD

Technology continues to change at an increasing rate. These changes continue to benefit us all, improving convenience in our lifestyles and productivity in the workplace. Asian consumers and companies are known

for their appreciation of technology, and to quickly adapt the benefits to their everyday lives, whether personal or in the workplace. As these new technologies come to market, we will continue to see Asia trailblazing and staying in front of the telecom race.

Matthew Tonkin is Vice President for Asia-Pacific, including Japan, and Global Head of IPX Business for SAP Mobile Services, a division of SAP. He oversees the company’s global GRX/IPX/LTE Roaming business and helps drive pipelines and revenues with local teams in every region. In addition to his global IPX role, in Asia Matthew is responsible for managing and driving the company’s growth, market leadership, product definition and geograph-ical expansion in both its Enterprise Services and Mobile Operator Services businesses, through a combination of direct sales and a partner and alliances sales network.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community. http://bit.ly/1lHIABY

Since RCS services as defined by the GSMA are fairly new, it is possible to implement them relatively easily. But when it comes to VoLTE, challenges abound. Voice services are still the main revenue-generating com-ponent for most operators globally, so it is important to ensure not only that the transi-tion to VoLTE offers full service parity and consistent experience, but also that the transition is seamless and transparent to the end user. There is no doubt that subscribers will notice the improved experience, whether in the HD quality of voice or the lightning- fast call setup times. Rapid rollout is only going to help maximize the network effects.

In terms of navigating the path to VoLTE, investment is significant. It’s about re- implementing the voice network, only this time in the all-IP domain. It’s about transfor-mation of a legacy circuit-switched (CS) network that was steadily built and matured

Multiple tier-1 operators have committed to launch Voice over LTE (VoLTE) in 2014. Last year VoLTE adoption was considered a matter of when, not if; now the transforma-tion has begun, and the VoLTE movement is building steam.

Over the last few years operators have heavily invested in 4G technologies, many of which are now live. Now they are looking at means to move their core applications, of which VoLTE is going to be the most import-ant, and services to these new 4G LTE, all-IP networks. The obvious benefit is that this will help operators to both reduce cost and offer new communications services.

The foundation that will be laid in deploying VoLTE could pave the way for video and Rich Communications Services (RCS), although few operators have chosen RCS as a way toward the goal of fully implementing VoLTE.

VoLTE and RCS: Network Evolution and Services RevolutionElements and roadmap for successful implementation of VoLTE and RCS.By Sachin Bagul, Senior Manager, Product Strategy and Marketing, Mavenir Systems

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Whether it's new voice services or new roaming arrangements, the new technology and new networks offer tremendous potential to redefine business models with new creative solutions.

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ongoing legacy upgrades compete for this investment capital. A good solution, then, will be the one that not only focuses on deliv-ering these new services, but also provides support for existing legacy networks. For example, the IMS Centralized Services framework provides an option to serve legacy subscribers from the new VoLTE solution via a gateway.

So the story of VoLTE will be a story of evo-lution. The first VoLTE movers applied the Circuit-Switched Fallback (CSFB) solution, which is more like Voice and LTE rather than Voice over LTE. As 4G coverage expands and the network becomes more resilient, we will see Single Radio and Dual Radio Voice Call Continuity (SRVCC and DRVCC) solutions taking off. The migration toward a single all-IP network for all services will be aided by the IMS Centralized Services framework. There are also a few greenfield VoLTE deploy-ments planned in various parts of the world; these networks, not restricted by legacy requirements, could provide early models for a pure, all-IP-based wireless network.

As operators ready the VoLTE networks for launch, the need for service ubiquity and consistency while roaming is not lost on any of us. Roaming issues are an important factor in the proliferation and rapid adoption

over the years. In this transformation process, it is imperative that operators shouldn’t have to reinvent the wheel where they don’t have to. The perfect VoLTE solution, then, would guarantee service parity and offer options for synchronization with the existing CS network, all with mini- mal changes or disruption to it. For example, during the initial phase of VoLTE it is quite possible to reuse the existing prepaid systems that operators already have in place and have deeply integrated into their OSS/BSS systems. Whether it's new voice services or new roaming arrangements, the new technology and new net-works offer tremendous potential to redefine business models with new creative solutions. But the first step for operators is to start with what they have in place; this will guarantee easy transition and help expedite adoption.

Legacy networks will be with us for at least a few more years. Operators need to continue supporting these networks, because it’s going to take a while for their entire sub-scriber bases to migrate and adopt VoLTE as the operators themselves go through that network transformation. Thus, the big chal-lenge operators now face is how to continue supporting legacy networks without much capital expenditure. Market forces demand investment in new rich services while

complexities and cost and pave the way for even richer services and innovative business models for operators, thereby reaffirming their role as leaders of the communications industry.

Sachin Bagul is Senior Manager for Product Strategy and Marketing at Mavenir Systems, responsible for driving product strategy and growth for the company’s RCS and VoLTE portfolio. At Mavenir Systems he has also worked as a systems architect, helping to design core network products. Earlier, he was a senior network architect at Cypress Communications and a systems engineer at Nortel and Ericsson. He holds a master’s in Electrical Engineering from Southern Methodist University, Dallas, and an MBA from Georgia Tech, Atlanta.

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of VoLTE, and so they must be solved from day one. LTE roaming, VoLTE roaming, and interconnect solutions are essential elements that need to be thought through and implemented in a timely fashion. An IPX that supports the IP-Multimedia Subsystem (IMS) and acts as a hub for RCS is crucial for interconnecting various VoLTE and RCS networks. Using an evolutionary approach, the GSMA has already put forward speci-fications that should help operators reuse their existing roaming agreements. Also, the GSMA’s Roaming Architecture for VoLTE with Local Breakout (RAVEL) specification aims to resolve the issue of calls trombon-ing all the way to the home network. With VoLTE architecture, it becomes possible to let the home network decide the path the media should take with local breakout as a preferred way. IPX providers like SAP are actively engaged in finalizing roaming specifications and leading the market, with IMS and RCS hubs ready for service.

In the not very distant future, this evolution should lead to a single all-IP access network that will allow operators to deliver a suite of rich communications services. Spectrum refarming and the discontinuation of legacy networks will be a reality. A spectrally efficient network with all-IP technology should ultimately reduce both operational

LTE roaming, VoLTE roaming, and interconnect solutions are essential elements that need to be thought through and implemented in a timely fashion.

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been covered in this list, which allows for early identification of likely issues as well as an efficient means of sharing informa-tion between roaming test parties. Efficiency is further improved through end-to-end management by an experienced technical project manager who works with the operators on all aspects of the interconnection and testing.

2. Progressive testing. There’s no point in carrying out functional tests before basic connectivity is established. With careful troubleshooting and monitoring, transport and then protocol connectivity between operators (or between operator and hub) should be done before interface testing (for example, ensure that basic IP connectivity works before attempting to test Diameter transactions or an actual roaming use case). Many of the interconnect issues are detected during this foundation testing, which can then be followed by the subset of the desired subset of the standard test suites, such as the IR.35 test suite as defined by the GSMA.1

As a network technology, LTE has been adopted faster than any other in the wireless industry. Since the first implementations in 2010, operators have now deployed multiple commercial offerings and announced a number of delivery plans. With subscribers realizing the benefits of LTE in their home networks, the demand for the same experi-ence in roaming has required operators to move quickly in building roaming agree-ments and implementations.

During 2013 we have worked with many operators around the world to enable commercial LTE roaming through our IPX 365 service. This article gives an overview of our experience and how to make operator interconnections easier for LTE roaming.

1. Sound preparation and process for LTE roaming. It seems an obvious step, but the careful preparation and review of a list of questions that determine the opera-tor’s network LTE architecture and configu-ration as it relates to roaming is essential. Every problem that we’ve encountered has

standard realm to allow other operators to understand it.

• Use of non-standard realms. Similarly, some operators abbreviate or change realm domain names; these too have to be configurably translated to enable interworking.

5. EPC design and implementation differences. We’ve found that introducing roaming helps operators review their imple-mentation and in some cases design choices underlying their LTE networks. Examples of these include the following cases:

• LTE/3Gcoexistenceconfigurationswith combined MME/SGSN, ensuring that identified potential LTE roamers from valid networks authenticate only against LTE and don’t get unnecessarily roamed onto the 3G network. This needs care when used in conjunction with Circuit- Switched Fallback (CSFB) to make sure that intentional fallback to the 3G network is done when required.

• IncorrectconfigurationofAPNs and associated DNS IP addresses

3. Essential troubleshooting support forDiametertraffic. Good troubleshooting probes and configurable reporting are essential in finding out where, when, and how things work differently from the way that they should. Most of the issues outlined in this article were identified through the use of these sorts of tools.

4.Adheringtostandardseasesinter- connection. By definition, interconnection requires a common means of communica-tion between roaming operators, and the latest standards provide this mechanism. Local implementations don’t always keep to these standards for initial deployments, as they aren’t all relevant for only-in-network traffic. This divergence is exacerbated by the rush to get implementations done as well as early deployments of older specifications. Examples of problems that we’ve solved in this area include:

• Routing by IMSI rather than routing by realm. Some operators locally route by IMSI rather than the standards defined 3gppnetwork.org root-domain-based realm. This has to be translated in the Diameter interworking function to the

Best Practices for LTE RoamingSix technology and operational considerations for operators undertaking LTE roaming.By Russell J. Green, CTO and Vice President Technology Group, SAP Mobile Services

FOOTNOTES

1. IR.35: End-to-End Functional Capability Test Specification for Inter-PMN GPRS Roaming (GSMA, May 2011).

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While there are many potential inter-connection issues to manage, growing operator experience with both LTE and roaming interconnect partners means that LTE roaming interconnections can be established quickly. The ecosystem of roaming partners is growing rapidly, thereby enriching the connected lives of mobile subscribers around the world.

Russell J. Green is responsible for product and service strategy, development and support as well as professional services, operations, and customer support. Prior to joining SAP, he held several senior management positions at VPIsystems Inc., 724 Solutions, Tandem Comput-ers, and Digital Equipment Corporation.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1nxcxcA

to conform to the known IP addresses that are allowed to query the home DNS server.

• ModificationofQoSandsessionparameters to force correct handset behavior in a visited network. Some implementations transmit invalid attribute-value pairs (AVPs) that don’t matter in the home network but cause issues in the visited network. Requested bandwidth values, wild-carded APNs, and PGW selections are examples of erroneous values in roaming.

6. Prepare and dedicate resources to get the job done quickly. As well as the technology implementations, the efficiency and progress of the interconnection work depends on the skill and experience of the operator staff working on the project. Where staff have been allocated time to prepare and gain the experience to carry out interconnection work as part of a struc-tured project, progress is made quickly. Conversely, if an engineer is tasked with making interconnection happen in addition to his or her normal production duties, the test and interconnection work won’t get priority and proceed as required.

SignallingTraffic

key interfaces for lTE interconnect

S-GW P-GW

E-UTRAN

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SGi

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SAP IPX 365

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HSS

S8

V-PCRF

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S9

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SERVER PDN SERVER PDN

S1 MMe

S1 u

Figure 1. LTE interconnect and roaming require these major interfaces. The S6a Diameter interface (and S6d for 3G

interoperability) and S8 are mandatory. The S9 Diameter interface provides additional QoS control and is expected to

become a more common interconnect interface over time.

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The challenge for mobile operators is to offer the right mix of services for a variety of subscriber types, from budget-con-scious consumers who have 2G phones and purchase prepaid service to smartphone- and tablet-savvy users who demand fast mobile data, including high-definition voice and mobile TV capabilities. In addition, the Singaporean mobile market has a penetration rate of over 150% (many users have multiple devices and multiple SIM cards), posing the challenge for oper-ators of ensuring adequate network coverage. Meeting these diverse needs makes adoption of LTE a priority.

The makeup of the StarHub mobile user base means that roaming by subscribers is a significant but not substantial source

To mobile users, LTE represents a great experience thanks to fast transmission speeds. To mobile operators, LTE represents operating efficiencies. Roaming on LTE networks promises revenue growth for operators as the market grows and roaming agreements are worked out.

Reflecting the enthusiastic use of mobile data throughout Asia, Singapore leads the world in mobile broadband penetra-tion1 and was the first country to roll out LTE nationwide.2 StarHub completed its nationwide LTE network rollout in October 2013, joining competitors M1 and SingTel. LTE adoption globally is expected to grow to 1.6 billion subscriptions by 2018, and 4G connections (including LTE) are driving explosive growth in data usage.3

Because unlimited data plans are popular in Asia, LTE data usage will not garner sig-nificant incremental revenue, making LTE roaming a primary opportunity for revenue growth. On the other hand, Singapore is a major international business hub, with millions of business travelers as well as tourists visiting every year. These visitors want to use mobile services seamlessly in Singapore, so the demand for good quality, efficient inbound roaming services is high.

As Singapore’s economy grows, Singapor-eans are increasingly vacationing overseas. To meet their needs, StarHub in 2013 began offering RoamEasy, Singapore’s first true single rate for data roaming. RoamEasy

of revenue, accounting for about 15% of total mobile revenue. Social networking, email and web browsing are among the most popular data services accessed when roaming. Traditional mobile services such as voice and SMS, although not growing rapidly, still form the bulk of StarHub’s roaming traffic. StarHub subscribers tend to use 50 MB or less of roaming data per day, although the company expects to see usage grow with the adoption of LTE. This is consistent with a recent Informa study which found that in comparison with 3G sub-scribers, LTE subscribers tend to consume more mobile data, buy larger data plans, and use Wi-Fi less (although mobile use of Wi-Fi on mobile devices is growing overall).4

LTE Roaming Grows in SingaporeRoaming represents a growth area for mobile operators, who see lTe as a way to meet the diverse needs of a wide variety of subscribers, including the budget-conscious as well as the tech-savvy.By William Ku, General Manager, International Business, StarHub Ltd

FOOTNOTES

1. Phillippa Biggs (ed.), The State of Broadband 2013: Universalizing Broadband (Broadband Commission for Digital Development, September 2013), 95: http://www.broadbandcommission.org/Documents/bb-annualreport2013.pdf 2. Saiyai Sakawee, "The state of 4G in Southeast Asia," Tech in Asia (25 December 2013): http://www.techinasia.com/state-of-4g-southeast-asia-20133. William Dudley, "LTE Roaming: Making it Work, Making it Reality" (webinar on behalf of SAP Mobile Services, 27 March 2013).

FOOTNOTES

4.Understanding today’s smartphone user: An updated and expanded analysis of data-usage pat-terns in six of the world’s most advanced 4G LTE markets (Informa Telecoms & Media, June 2013): www.informatandm.com/wp-content/uploads/2013/06/Mobidia-ITM-June-2013

For mobile operators building out LTE networks, the biggest challenge today is the lack of clear direction for peering the IPX, which is mandatory for LTE roaming.

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http://www.broadbandcommission.org/Documents/bb-annualreport2013.pdf

http://www.broadbandcommission.org/Documents/bb-annualreport2013.pdf

http://www.techinasia.com/state-of-4g-southeast-asia-2013

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IPX vendors are already beginning to peer on a bilateral basis, which should begin to allow operators to consolidate costs.

The current problem of spectrum fragmen-tation, where travelers encounter incom-patible service because LTE is deployed on different frequencies in different regions, will be only a short-term challenge. When LTE becomes more widely deployed and mature, handset manufacturers will roll out multi-mode and multiband handsets that can be used anywhere around the world, similar to quad-band GSM handsets.

coMiNG NEXT

Voice over LTE (VoLTE) service is on the horizon, promising to let mobile

charges a single data roaming rate when customers connect to any mobile network in over 30 popular overseas destinations. The service will be progressively extended to the rest of the overseas destinations in StarHub’s roaming footprint.

cHAllENGES To EXPANSioN

For mobile operators building out LTE networks, the biggest challenge today is the lack of clear direction for peering the IPX, which is mandatory for LTE roaming. Unlike GPRS roaming, which the GSMA has mandated that all GRX providers must peer in Amsterdam, we cannot simply select one or two GRX providers to serve our global needs. This drives up the cost of providing LTE roaming. The good news is that some

William Ku is General Manager, Interna-tional Business, at StarHub. He heads the Global Services team, which manages inter-national alliances and the commercial and operational aspects of international voice and roaming. In addition, he is Chairman of the International Roaming Workgroup for Conexus Mobile Alliance, which has a combined customer base of about 280 million subscribers.

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operators conserve spectrum and manage fewer network technologies.5 In addition, VoLTE’s voice, messaging, and video features should prove superior to OTT apps, thanks to LTE’s quality of service, interop-erability, and roaming capabilities.6 StarHub plans to offer VoLTE service later this year, when a wide range of supported phones becomes available to consumers.

In the next several years the LTE landscape is going to be very different. All services will be IP-based, and that means mobile oper-ators only need to provide a “pipe” – the business for a mobile operator could be analogous to that of a mobile ISP. With the superior performance of LTE, mobile oper-ators will be able to deliver services much more efficiently and effectively.

FOOTNOTES

5. VoLTE: Why, When and How (Telecoms.com Intelligence, February 2013) http://www.ibasis.com/downloads/pdfs/VoLTE_Whitepaper.pdf6. "VoLTE or VoIP over LTE – Who is the ultimate winner?" With Imagination Blog (13 May 2013): http://withimagination.imgtec.com/index.php/hellosoft/volte-or-voip-over-lte-who-is-the- ultimate-winner

In the next several years the LTE landscape is going to be very different. All services will be IP-based, and that means mobile operators only need to provide a ‘pipe’ – the business for a mobile operator could be analogous to that of a mobile ISP.

http://bit.ly/1eaQaU7

http://www.ibasis.com/downloads/pdfs/VoLTE_Whitepaper.pdf

http://withimagination.imgtec.com/index.php/hellosoft/volte-or-voip-over-lte-who-is-the- ultimate-winner

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networks of about 20 GRX carriers, intercon-nected at three peering points.

The success of the GRX and the drive toward an all-IP mobile world inspired the conception of the IPX: an IP backbone built to exchange IP traffic for all sorts of IP-based services. Contrary to the public internet, the IPX is service-aware, quality-of-service enabled, and managed end-to-end. Connectivity to the IPX is restricted, to ensure its security.

The IPX was initially perceived by the market as a network built just for the exchange of voice traffic. The industry has come to embrace the single-access concept of the IPX: a single physical connection that delivers interconnection for all essential services.

The GRX is now generally viewed not as a separate network but as a multilateral IPX transport service. That this has happened

One of the biggest achievements in the history of telecommunication is roaming: wherever you go, whenever you switch on your phone people can call you on your personal number. Roaming extends the relationship that mobile service providers have with their subscribers well beyond the reach of their physical networks. And here’s the important piece: wherever they go, these subscribers expect the same quality of service that they are used to in their home network.

When mobile service providers first launched IP-based data services (GPRS), the need to enable these services in roaming triggered the definition and deployment of the GRX: an IP backbone exclusively used by mobile service providers to exchange the data traffic generated by roamers. The GRX has grown steadily since it was first launched, and it currently comprises the

is hardly a surprise. In the established roaming architecture of 2G and 3G networks, data-roaming traffic is typically generated by traditional data applications like web browsing and emailing. The purpose of the GRX, then, is to route this traffic back to the home network so that the mobile service provider can count the bytes and print the invoice. But the roll-out of LTE is making this, the traditional GRX model, obsolete. Why is that?

A recent SAP-sponsored IPX survey of carriers, held in the summer of 2013, showed that 65% view LTE primarily as a way to deliver higher data speeds. The availability of high-speed data connectivity in combina-tion with the increasing capability of smart mobile devices is changing consumer behavior. More and more people use their smart mobile devices not only to enjoy HD video streaming services but also to create personal content – high-definition photos and videos – and to share this content on social media like Facebook.

Subscribers used to fantastic network per-formance in their home network will expect that same level of service performance when

The Wide, Wide World of the IPXThe IPX delivers end-to-end management and quality of service for voice and other essential IP services such as roaming for high-speed mobile data. By Michael Van Veen, Group Director IPX, SAP Mobile Services

The industry has come to embrace the single-access concept of the IPX: a single physical connection that delivers interconnection for all essential services.

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price. This level of trust doesn’t necessarily exist between all roaming partners. We would therefore expect local breakout to be enabled just between trusted roaming partners.

Unfortunately the devil is in the details. Even though local breakout is quite obviously a very efficient routing solution for mainstream internet services like the ones mentioned earlier, other services and applications greatly benefit from home routing via the IPX. Services like Voice and Video over LTE would always be routed via the IPX, but even for applications like BlackBerry where the mobile service providers and their enterprise customers make sure that email traffic is kept away from the internet, local breakout in roaming scenarios would simply not be appropriate. Service providers would there-fore need to agree for which applications local breakout would be allowed.

All of this highlights additional challenges: if all these services and applications are treated differently, how will accounting and settlement work between the service provid-ers, and how will they be able to present their subscribers with a transparent invoice at the end of the month?

roaming. Mobile service providers that stick to the traditional GRX business model of home-routing all this upstream and down-stream traffic will therefore need to make sure that they are connected to a high capacity backbone with excellent performance characteristics – that is, the IPX.

But here’s the thing: home-routing of all of this traffic is not particularly efficient; it would be much more efficient to allow roamers local access to the internet by offering local breakout. Local breakout is not available in the market just yet, and there are two very good reasons for why that is. First of all, local breakout requires the use of more new technology. Service providers need to be able to exchange policy information about the users on their networks, and enforce these policies on their gateways. In a time when service pro-viders are still in the middle of building out and tuning their LTE networks, this is a level of complexity they can do without.

The other good reason is that by allowing local breakout, service providers must trust their roaming partners to provide an excellent service to their customers – and at the right

for mobile service providers to roll out local breakout, with the right price packages.

Michael Van Veen is responsible for managing and driving the GPRS Roaming Exchange (GRX) / IP eXchange (IPX) product line for SAP Mobile Services. He began his career at KPN Telecom, where he worked on major projects including the international standardization of ISDN and Fiber-to-the-Home systems, and the establishment of an operational manage-ment center for the first GSM network in the Netherlands. He is also the current Deputy Chairman of the GRXIPX Working Group, which is a sub-working group under the GSMA’s IREG (Inter-Working Roaming, Expert Group).

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In the meantime, many subscribers have an entirely different objective: they simply like to see a lower bill. Their obvious way of achieving this is by avoiding mobile service provider networks and using Wi-Fi. In many places in the world, Wi-Fi internet access is available at little or no cost. And even though the speed (and security!) leave a lot to be desired, many subscribers happily settle for lower quality in exchange for a substantial cost saving.

But it is also true that Wi-Fi is not as widely available as mobile service provider networks, and roamers will often find them-selves using the data connectivity offered by these local mobile networks. In an attempt to further increase competition between mobile service providers, with the aim of driving down the cost of data roaming, the EU is enforcing local breakout from a differ-ent angle. By July 2014, subscribers should have the option of buying internet access directly from the visited network. Thus for the duration of subscribers’ contracts with visited networks, home network providers will not get their subscribers’ roaming business, aside from voice calling. This may well be the best thinkable incentive

Even though local breakout is quite obviously a very efficient routing solution for mainstream internet services, other services and applications greatly benefit from home routing via the IPX.

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The popularity of mobile services across telecom markets has grown by leaps and bounds. This success may be attributed to the continuous evolution of technology. Mobile technology has been evolving decade over decade since the 1980s: in the 1980s we witnessed the emergence of the first generation (1G) of mobile communica-tion, while the present decade marks the emergence of advanced fourth-generation (4G) mobile technology (fig. 1).

Mobile Network Operators (MNOs) are therefore participating in the auction and deployment of advanced technologies like 3G and pre-4G (or 3.9G) to increase the contribution of their non-voice revenue. LTE, including Worldwide Interoperability for Microwave Access (WiMAX), is being marketed by the global telcos as a 4G tech-nology. Nevertheless, it would be worth-while to consider that these MNOs may look forward to the deployment of “true” 4G networks in the future.

The most popular pre-4G LTE technology is frequency-division duplexing (FDD-LTE). FDD-LTE uses two distinct carriers for uplink and downlink, running on different frequen-cies separated by a guard band. On the other hand, time-division duplexing (TDD-LTE), a newer technology, uses a single frequency carrier, but allocates distinct time periods for the uplink and downlink.

While the LTE standard continues to mature and evolve, international differences in fre-quency planning and allocation have resulted in different frequency bands being used in dif-ferent countries. TDD-LTE promises greater efficiency in terms of frequency spectrum usage and has attracted the attention of operators in a number of other countries.

Thus far globally, there have been 244 com-mercial deployments of LTE across 92 countries.1 The majority of these deploy-ments have been using FDD-LTE technology,

Asian Giants Catching Up with the Global LTE Leaders LTE continues to gain converts as it moves across continents picking up subscribers. One-third of the subscribers are in China and India. By Sohag Sarkar, Manager, Strategy and Operation – Technology, Media and Telecom, KPMG Advisory Services

Mobile Generation

initiation Period

key Description

1G 1980s The first analog cellular systems conceived and designed purely for voice calls. The first commercial deployment was in North America as Advanced Mobile Phone System (AMPS).

2G 1990s The first digital cellular systems, offering improved sound quality, better security, and higher capacity. These support circuit-switched data and allow users to place dial-up data calls digitally. The first 2G (GSM) network, Radiolinja, was launched in Finland.

3G 2000s Newer cellular networks with data rates of 384 Kbps and more. International Telecommunications Union (ITU) IMT-2000 standard defines “true” 3G with stationary speeds of 2 Mbps and mobile speeds of 384 Kbps. 3G technologies provide faster data transmission speeds, greater network capacity, and more advanced network services. In May 2001, NTT DoCoMo (Japan) launched the first pre-commercial 3G network, branded as FOMA. Following the first pre-commer-cial launch, NTT DoCoMo again made history on 1 October 2001, with the first 3G commercial launch.

4G 2010s The ITU Radiocommunication Sector (ITU-R) has specified the set of requirements for 4G standards and named it the IMT-Advanced, setting peak mobile speed at 100 Mbps and 1 Gbps for low-mobility communication. ITU has qualified “LTE-Advanced” and “WirelessMAN-Advanced” as the official IMT-Advanced technologies.

FOOTNOTES

1. Status of the Global LTE TDD Market (GSA, 9 December 2013): www.gsacom.com/gsm_3g/info_papers

From 1G to 4G Mobile Technology

PArT 5: ASiA

Figure 1

www.gsacom.com/gsm_3g/info_papers

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while 25 operators have chosen TDD-LTE, 12 of them in addition to FDD-LTE (fig. 3).

lTE: PArADiGM SHiFT, or coMPETiTivE bUSiNESS STrATEGy?

Until recently, most of the disruptions or innovations have been with voice services, and even in the present day voice revenue contributes the most when compared to the overall top line of an operator. Equally true,

however, is the fact that declining mobile tariffs have resulted in a stagnation of voice revenue. Plus, further discounting of the voice tariff has been counter-productive when it comes to increasing overall voice usage (or minutes of usage).

Therefore, the key question that the industry should ask itself is: Are operators betting on the next generation of mobile ultra-broad-band technologies to alleviate their revenue trajectories, or is this a marketing gimmick

The proponents are optimistic that LTE would allow them to introduce a wide spectrum of application and data services. This strategic move would help them increase their non-voice revenue contribu-tion, which is currently hovering anywhere between 10-30% globally.2 It is there-fore wise to acknowledge that the mobile services industry is witnessing a paradigm shift from a hitherto voice-centric business model to a data-centric one. The next gen-eration of product or service disruption and innovation will be on the data front.

to increase brand perception and value, so as to stay ahead of the competition? And if the latter is true, then what should be the price that operators are willing to pay to achieve this market differentiation? Actions speak louder than words: many operators are deploying LTE primarily to augment their network capacity, while others are looking at LTE to generate additional revenues; the rest have already called it quits given the quan- tum of investment or internal challenges, or given their skeptical view on the proposed return on investments.

244 Global lTE Deployments231 FDD-LTE Deployments

13 TDD-LTE Deployments 12 FDD+TDD-LTE Deployments

FDD-lTE

95%

TDD-lTE

5%

Global lTE deployments by technology

Figure 3. Based on data from GSA's Status of the Global LTE TDD Market report (9 December 2013).��

Global TDD-lTE deployments

Figure 2. Based on data from GSA's Evolution to LTE report (December 5, 2013). © Global mobile Suppliers Association (GSA).

Countries with commerically launched LTE-TDD networks Countries with LTE-TDD studies, trials, deployments


FOOTNOTES

2. Recommendations on Application Services (Telecom Regulatory Authority of India, 14 May 2012): http://www.trai.gov.in/WriteReadData/Recommendation/Documents/AS140512.pdf

http://www.trai.gov.in/WriteReadData/Recommendation/Documents/AS140512.pdf

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economies of scale and necessary research and development on the supplier side. On the other hand, partnerships – with content players, value-added service providers, or even over-the-top (OTT) players – could be critical when launching a bouquet of services alongside enhanced data services.

ASiAN GiANTS bETTiNG oN TDD-lTE

More than 90% of LTE deployments so far have used FDD-LTE, and the ecosystem around this technology has also matured globally. Close to 1,240 LTE user devices (tablets, smartphones, dongles, small cell, and others) are available, of which only 274

4G DEPloyMENT STrATEGy: GETTiNG iT FirST-TiME riGHT

The launch of 4G services could prove to be a make-or-break situation for MNOs. A holistic and well-planned strategy would be required on the part of the operator to get this process “first-time right” (fig. 5).

Critical to their success is the chosen technology and the ecosystem around it. A robust 4G ecosystem is essential for MNOs to be successful in the market. MNOs cannot ignore the device strategy, other-wise the adoption will be limited to pure-play data users only. Adequate demand of user devices and network equipment will ensure

riTES model for lTE depolyment

0%USA

Non

-Voi

ce R

even

ue C

ontr

ibut

ion

(% a

ge)

China Japan Korea UK Germany Italy Brazil India

5%

10%

15%

20%

25%

30%

35%

Non-voice revenue as a percentage of overall revenue

Figure 4. Telecom Regulatory Authority of India (TRAI),

Source: Recommendations on Application Services (Telecom Regulatory Authority of India, 14 May 2012):

http://www.trai.gov.in/WriteReadData/Recommendation/Documents/AS140512.pdf.

30%

27% 27%26%

21% 21%

17%

14%

11%

Regulation

Spectrum frequency, block, reserve price, and other regulations

Capex and opex including network and system upgrade or enhancement

Deployment strategy for data and/or voice sevices

User devices, equipments, VAS, and content services

Go-to-market considerations for consumer and enterprise segment

Investment Technology Ecosystem Subscribers

Figure 5


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“game-changing” prowess. Both India and China are betting on TDD-LTE, thereby pro-viding a greater boost to global operators who have found merit in this technology. Globally, 46 new TDD-LTE deployments are in progress or in the planning phase, beyond the present 25 deployments across 20 countries (fig. 6).4

India has already witnessed the commercial deployments starting in 2012, and Chinese telcos are about to follow suit following the

are TDD-LTE compatible.3 Would it be astute to assume that investing in TDD-LTE might be a risky proposition, considering current ecosystem maturity and interoperability challenges?

The answer may be derived by analyzing the events that are taking place on the Asian continent. One-third of global telecom sub-scribers are contributed by two Asian giants, China and India. It is a given that whosoever is on top of the pyramid also holds the

country operator TDD frequency

TDD band

lTE mode

Australia NBN Co. 2.3 GHz 40 TDD

Australia Optus 2.3 GHz 40 TDD + FDD

Bahrain Menatelecom 3.5 GHz 42 TDD

Brazil On Telecomunicacoes 2.6 GHz 38 TDD

Brazil Sky Brasil Services 2.6 GHz 38 TDD

Canada Sasktel 2.6 GHz 41 TDD + FDD

Hong Kong China Mobile Hong Kong 2.3 GHz 40 TDD + FDD

India Bharti Airtel 2.3 GHz 40 TDD

Indonesia PT Internux 2.3 GHz 40 TDD

Japan Softbank XGP/LTE TDD 2.6 GHz 41 TDD + FDD

Nigeria Spectranet 2.3 GHz 40 TDD

Oman Omantel 2.3 GHz 40 TDD + FDD

Poland Aero2 2.6 GHz 38 TDD + FDD

Russia Megafon/Moscow 2.6 GHz 38 TDD + FDD

Russia MTS/Moscow 2.6 GHz 38 TDD + FDD

Russia Vainakh Telecom 2.3 GHz 40 TDD

Saudi Arabia Mobily 2.6 GHz 38 TDD

country operator TDD frequency

TDD band

lTE mode

Saudi Arabia STC 2.3 GHz 40 TDD + FDD

South Africa Telkom Mobile (8ta) 2.3 GHz 40 TDD

Spain COTA/Murcia4G 2.6 GHz 38 TDD

Sri Lanka Dialog Axiata 2.3 GHz 40 TDD + FDD

Sweden 3 Sweden 2.6 GHz 38 TDD + FDD

Uganda MTN 2.6 GHz 41 TDD

UK UK Broadband 3.5 GHz 42, 43 TDD

USA Sprint (est. Clearwire) 2.6 GHz 41 TDD + FDDFigure 6. Based on data from GSA's Status of the Global LTE TDD Market report (9 December 2013).

Global TDD-lTE deployments

FOOTNOTES

3. Status of the Global LTE TDD Market (GSA, 9 December 2013): http://www.gsacom.com/gsm_3g/info_papers4. Ibid.

http://www.gsacom.com/gsm_3g/info_papers


supply-side dynamic to provide LTE-based data services. Both China and India have to leverage their existing infrastructure and partnerships to optimize deployment costs, as a greenfield LTE deployment would be practically infeasible. Operators across these Asian giants have expressed their desire and commitment to collaborate and reuse the existing infrastructure, both active and passive. Therefore, only a synergistic collaboration and co-operation will encourage a faster and profitable LTE deployment across the region.

award of TDD-LTE spectrum in December 2013. The key drivers instrumental in defining the extent of data growth in these countries are the availability, affordability, and applica-bility of mobile data services (fig. 7).

When compared to other advanced telecom geographies, India and China are lacking in average internet speed, which is below 2 Mbps. Mobile broadband-based services can, therefore, emerge as a lifeline for economic growth in these countries. While the demand-side drivers already exist, it would be interesting to understand the

Sohag Sarkar is a management consultant in strategy and operations with key exper-tise in business transformation and large-scale program management. His area of specialization is in the telecommunications industry. He has worked with international as well as Indian telecom players. He is currently undertaking research in manage-ment studies at Pacific University, Udaipur, and also serves as a visiting faculty to one of the leading telecom management insti-tutes in India. Several of his white papers and thought leaderships have been pub-lished in leading journals.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1gEDPV8

rEFErENcEShttp://www.itu.int/net/pressoffice/press_ releases/2012/02.aspx#.UYvxXUqPeM0http://www.globaltelecomsbusiness.com/ article/3108725/Yota-claims-first- commercial-LTE-Advanced-net.html? ArticleID=3108725http://lteworld.org/blog/latest-status- update-lte-advancedhttp://www.trai.gov.in/WriteReadData/ Recommendation/Documents/AS140512.pdfhttp://www.livemint.com/Consumer/ bIa6p5ChYVFValPTs90MLJ/India-trails-at-No-20-in-mobile-data-speeds-ranking.htmlhttp://www.telecomasia.net/content/ average-internet-speed-grew-5-q4? section=TOP+STORIES&utm_source= silverpop&utm_medium=newsletter&utm_ content&utm_campaign=telecomasiahttp://www3.alcatel-lucent.com/belllabs/ advisory-services/documents/Declining_Profitability_Trend_of_Mobile_Data_EN_ Market_Analysis.pdfhttp://www.telecomasia.net/content/ china-finally-issues-4g-licenseshttp://www.gsacom.com/gsm_3g/info_ papers

Availability

AffordabilityApplicability

Drivers for data growth

Figure 7. Availability, affordability, and applicability are the "three A's" and key drivers of data growth.

http://bit.ly/1gEDPV8

http://www.itu.int/net/pressoffice/press_releases/2012/02.aspx#.UYvxXUqPeM0

http://www.itu.int/net/pressoffice/press_releases/2012/02.aspx#.UYvxXUqPeM0

http://www.globaltelecomsbusiness.com/article/3108725/Yota-claims-first-commercial-LTE-Advanced-net.html?ArticleID=3108725




http://lteworld.org/blog/latest-status-update-lte-advanced

http://lteworld.org/blog/latest-status-update-lte-advanced




http://www.livemint.com/Consumer/bIa6p5ChYVFValPTs90MLJ/India-trails-at-No-20-in-mobile-data-speeds-ranking.html



http://www.telecomasia.net/content/average-internet-speed-grew-5-q4?section=TOP+STORIES&utm_source=silverpop&utm_medium=newsletter&utm_content&utm_campaign=telecomasia





http://www3.alcatel-lucent.com/belllabs/advisory-services/documents/Declining_Profitability_Trend_of_Mobile_Data_EN_Market_Analysis.pdf




http://www.telecomasia.net/content/china-finally-issues-4g-licenses

http://www.telecomasia.net/content/china-finally-issues-4g-licenses



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Indonesia

India

Sri Lanka

Cambodia

Bangladesh

Malaysia

Singapore


Tapping Into the DataAxiata is embarking on a project to put its wealth of customer data to work.ByKaranHenrikPonnudurai,ChiefInnovationOfficer,AxiataDigital

Mobile telecommunications companies are like Saudi Arabia in the 1930s: we’re sitting on top of a resource that’s about to become incredibly valuable.

The resource is customer data. We’ve been collecting it for close to 30 years. So far, we’ve only been using it to maintain and manage our networks. But now, this “big data” has new meanings, new contexts. Mobile operators are discovering there’s tremendous value in it, and many potential ways to use it.

And not only that, we’re also about to have even more data. Mobile operators are diver-sifying. We’re branching into mobile finance, banking, broadband, and other services that are both generating new data and sparking new demand for it.

SoUTHEAST ASiA iS coMiNG oNliNE

Axiata serves Malaysia, Indonesia, Sri Lanka, Bangladesh, and Cambodia, with significant strategic stakes in India and Singapore. (fig. 1). Our market is large geographically, and includes a wide socio-economic scope as well–from developing to highly developed economies. While we serve a range of customers, there are also two important trends impacting the whole region.

First, the Internet has really taken off here. Southeast Asia has some of the highest per-capita Facebook usage rates in the world, and three of Facebook’s top 15 markets (Philippines, Thailand and Malaysia) as ranked by visitor penetration.1 In the region, many people’s first experience of the internet is via mobile. For Axiata,

this represents a way to take advantage of the internet era.

Second, smartphones are becoming more affordable. The average farmer in India, for example, will have a smartphone in just a few years. That’s a portent of the fundamen-tal shift we’re about to see in internet audi-ences. We’re talking about hundreds of millions of people coming online from South

and Southeast Asia over the next few years. From a consumer data perspective, we’re expecting a tsunami of data.

PUTTiNG DATA To Work

We’ve historically used data to get to know our customers better, so that’s how we plan to use it initially. Today, we use all the stand-ard methods to collect customer insight: FOOTNOTES

1. 2013 Southeast Asia Digital Future in Focus (comScore, July 2013): http://www.comscore.com/Insights/Presentations_and_Whitepapers/2013/2013_Southeast_Asia_Digital_Future_in_Focus

Mobile telecommunications companies are like Saudi Arabia in the 1930s: we’re sitting on top of a resource that’s about to become incredibly valuable.

Axiata in Asia

Figure 1. Axiata serves a large portion of Southeast Asia, including Malaysia, Indonesia, Sri Lanka, Bangladesh, and

Cambodia, with significant strategic stakes in India and Singapore.

PArT 5: ASiA

http://www.comscore.com/Insights/Presentations_and_Whitepapers/2013/2013_Southeast_Asia_Digital_Future_in_Focus

http://www.comscore.com/Insights/Presentations_and_Whitepapers/2013/2013_Southeast_Asia_Digital_Future_in_Focus

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surveys, customer service, and increasingly, feedback on social media sites. In this era of “activist consumers” who tell the whole world when they’re unhappy, we’re discovering that we have to become proactive, gauging whether there’s going to be a problem or not instead of waiting for customers to tell us there is. That’s a huge change for us, and one that we know data can inform.

We’ve known for years that data and analytics can bring us to a much deeper and sophisticated understanding of customer behavior. The difference is that now technology has caught up with that reality. The tools and analysis methods are finally available at a cost-effective price point.

Beyond that, we’re also looking at ways to use data as a product in and of itself. In that arena, we have competitors – including Facebook and Google – that are already using data as a competitive tool. Our first challenge is that we’ve never done this before, and as a company we don’t yet have the sales, technical, or process expertise to do it. Second, we come from a heavily regu-lated industry. From our perspective, our competitors are using data in ways that

are fairly cavalier. Getting into the world of data mining and monetization means that we need to learn how to do it in a way that protects consumers and still allows us to compete with others in the internet world.

TAkiNG A coNSErvATivE APProAcH

When it comes to maintaining customer privacy, we’ll err on the side of caution. That’s who we are as a company. Also, Axiata is a very large customer brand. We have 215 million subscribers, so there’s significant risk in not being careful.

At the same time, the regulatory construct is very amorphous right now. Telco regula-tors haven’t caught up with this new data opportunity at all, so there’s little definition in the industry of what a conservative approach actually looks like. For example, in Malaysia we have 12 million customers. Every single transaction generates enormous amounts of data. What parts of data do you leave out, and what parts do you analyze? There is so much. Every-one’s playing around with this same idea. It will likely be some years before we have a good sense of exactly what we’re looking for. There are so many possibilities.

Karan Henrik Ponnudurai is the chief innova-tion officer at Axiata Digital, responsible for digital businesses across Southeast Asia. Pre-viously, he was the chief innovation officer of online and digital services at Celcom Axiata, the leading Malaysian cellular operator. Prior, he was the vice president of business development and technology for Softbank Emerging Markets, a venture capital initiative. He was also a founding director of worldwide engineering for a wireless broadband equip-ment company, and a pioneer staff member at Maxis, serving in multiple roles. He started his career as an R&D engineer and product manager at Hewlett-Packard. He holds degrees in electrical engineering from the University of Malaya and Stanford University.

Share your comments, thoughts, and updates to this article — join the conversation on SAP Mobile Services community here: http://bit.ly/1m7mNab


Smartphones are becoming more affordable. The average farmer in India, for example, will have a smartphone in just a few years.

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Axiata

Axiata Group Berhad (formerly TM Inter-national) is one of the largest Asian tele-communications companies focused on high-growth, low-penetration emerging markets. Home to 215 million subscribers, Axiata has controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh, and Cambodia, with significant strategic stakes in India and Singapore. The Group’s mobile subsidiaries and asso-ciates operate under the following brands: Celcom in Malaysia, XL in Indonesia, Dialog in Sri Lanka, Robi in Bangladesh, Smart in Cambodia, Idea in India, and M1 in Singapore. Visit www.axiata.com

Cloudmark

Cloudmark builds messaging security software that protects communications service provider networks and their sub-scribers against the widest range of mes-saging threats. Only Cloudmark Security Platform™ delivers instant security and control across diverse messaging environ-ments, enabling communications service providers to create a safe user exper-ience, protect revenue, and safeguard their brand, while streamlining infrastruc-ture and reducing operational costs. Cloud-

mark’s patented solutions protect more than 120 tier-1 customers worldwide, includ-ing AT&T, Verizon, Swisscom, Comcast, Cox, and NTT. Visit www.cloudmark.com

GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the association unites nearly 800 of the world’s mobile operators with 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers, and internet companies, as well as organizations in industry sectors such as financial services, healthcare, media, trans-port, and utilities. The GSMA also produces industry-leading events such as Mobile World Congress and Mobile Asia Expo. Visit www.gsma.com

Informa

Businesses, professionals, and academics worldwide turn to Informa for unparalleled knowledge, up-to-the-minute information, and highly specialized skills and services. The company’s ability to deliver high-quality knowledge and services through multiple media channels, in dynamic and rapidly

changing environments, makes its offerings unique and extremely valuable to individuals and organizations. Visit www.informa.com

International Data Corporation (IDC)

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. Visit www.idc.com

Kantar

Kantar is the data investment management division of WPP and one of the world's largest insight, information, and consultancy networks. By connecting the diverse talents

of its 13 specialist companies, the group aims to become the pre-eminent provider of compelling and inspirational insights for the global business community. Its 28,500 employees work across 100 countries and across the spectrum of research and con-sultancy disciplines, enabling the group to offer clients business insights at each and every point of the consumer cycle. Visit www.kantar.com

KPMG

KPMG LLP, the audit, tax, and advisory firm, is the US member firm of KPMG Intern- ational Cooperative (“KPMG International”). KPMG International’s member firms have 145,000 professionals, including more than 8,000 partners, in 152 countries. KPMG delivers a globally consistent set of multi- disciplinary services based on deep industry knowledge. Our industry focus helps KPMG professionals develop a rich understanding of clients’ businesses and the insight, skills, and resources required to address industry- specific issues and opportunities. Visit www.kpmg.com

APPENDiX

Contributor Companies

http://www.axiata.com

http://www.cloudmark.com

http://www.gsma.com

http://www.informa.com

http://www.idc.com

http://www.kantar.com

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Mavenir Systems

Mavenir Systems is a leading provider of software-based networking solutions that enable mobile service providers to deliver high-quality IP-based voice, video, rich communications, and enhanced messaging services to their subscribers globally. Visit www.mavenir.com

mCordis

mCordis provides independent, international expertise to help companies increase their knowledge and understanding of mobile marketing, create and develop mobile mar-keting strategies and propositions, and expand their business into new countries and markets. Visit www.mcordis.com

Mobile Europe

Mobile Europe analyzes the major developments in wireless technologies and markets. It reaches top decision makers within operators, service providers, OEMs, and the large user corporations that have driven demand in the world's leading mobile market. Offering news, analysis, and strong opinion, combined with in-depth articles, Mobile Europe covers the issues that matter. Visit www.mobileeurope.co.uk

MTN

MTN is a global communications partner and world-class cellular network. As a major communications company, MTN is focused on the African continent. The MTN Group operates three business divisions: MTN-SA (South Africa), MTN International, and Strategic Investments. MTN is listed on the Johannesburg Stock Exchange under the Telecommunications Service Sector (which falls under Industrial Non-Cyclical Services). Visit www.mtn.co.za

Pinger

Pinger’s mission is to make global messag-ing fun, free, and easy. Pinger has a globally- scalable monetization platform and is the number-one free texting and calling app in the United States, with 12 million monthly active users and billions of text messages sent. Visit www.pinger.com

SAP Mobile Services

SAP Mobile Services is a global leader in mobile interconnection and mobile con-sumer engagement services. It provides mobile operators with unparalleled capabili-ties in global messaging interconnect, data roaming and an array of IPX-based services

and enables enterprises to engage with their consumers through innovative mobile marketing and engagement solutions. SAP Mobile Services helps businesses process 1.8 billion messages per day, reaching more than 1,000 operators and 6.1 billion subscribers across 210 countries. Visit www.sap.com/sapmobileservices

StarHub

Launched in 2000, StarHub is Singapore’s fully integrated info-communications company, offering a wide range of informa-tion, communications, and entertainment services for both consumer and corporate markets. StarHub operates a mobile network that provides 2G, 3G, and 4G services. It also manages an island-wide hybrid fiber-coaxial network that delivers pay TV, residential broadband, and fixed-line services, as well as an extensive business fixed network that provides data, voice, and wholesale services. Over Singapore’s Next Generation Nation-wide Broadband Network, StarHub offers a broad range of home and business broad-band plans along with a host of advanced value-added services, such as IPTV for com-mercial entities. Visit www.starhub.com

T-Mobile US, Inc.

As America’s Un-carrier, T-Mobile US, Inc. is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The company's advanced nationwide 4G LTE network delivers outstanding wireless experiences for customers who are unwill-ing to compromise on quality and value. Based in Bellevue, Washington, T-Mobile US provides services through its subsidiaries and operates its flagship brands, T-Mobile and MetroPCS. Visit www.t-mobile.com

Telecom Review

Telecom Review is a Trace Media publica-tion, distributed in all Middle East and North Africa countries and also Iran, Pakistan, and other African countries. It has a monthly fast print and growing run of over 42,000 copies. Visit www.telecomreview.com

Telefónica

Telefónica is one of the world’s leading integrated operators in the telecommunications sector, providing communication, information, and entertainment solutions in 24 countries throughout Europe and Latin America. As of September 2013, Telefónica’s

http://www.mavenir.com

http://www.mcordis.com

http://www.mtn.co.za

http://www.pinger.com

http://www.starhub.com

http://www.t-mobile.com

http://www.telecomreview.com

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total number of customers amounted to 320.3 million. Telefónica has one of the most international profiles in the sector – more than 77% of its business comes from outside its home market, Spain – and is a reference point in the Spanish- and Portuguese-speaking market. Visit www.telefonica.com

Yankee Group

Yankee Group is the pre-eminent research and advisory firm equipping companies to profit in a mobile world. The core of its content is proprietary research and analy-tics on the attitudes, behaviors, and usage patterns of mobile users. Yankee Group provides a range of actionable data, insights, and advice to marketing, strategy, and product executives driving the mobility revolution in leading companies worldwide. Visit www.yankeegroup.com

Zipwhip

Texting is for more than the mobile phone. Zipwhip pioneered the concept of utilizing the cloud to enable existing mobile, landline, and toll-free numbers to send and receive text messages from virtually any connected desktop, tablet, or smartphone. Zipwhip powers a messaging service on any device over any number. (Consumers and small businesses can sign up at www.zipwhip.com.) Additionally, Zipwhip offers a carrier- grade texting platform to help mobile and landline operators modernize the text mes-saging medium. Its technology introduces trailblazing functionality while holding true to the distinct culture of texting that consumers have grown to love. Zipwhip now has more than eight million registered users of its texting services. Visit www.zipwhip.com

http://www.telefonica.com

http://www.yankeegroup.com

http://www.zipwhip.com

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ACKNOWLEDGEMENTS

Mobile Operator Guide

Editorial Direction Diarmuid Mallon Ashruti Singh Carmel Coscia

Project Managers Jann Yip

Design Ros Caré for Boing Design Paris [email protected]

Developed and Produced BaySide Media www.BaySideMedia.com

[email protected]

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In particular, SAP AG or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP AG’s or its affiliated companies’ strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP AG or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

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