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Category Archives: Digital

How Industry Trends are Impacting Telecom Partnerships

Trends that are creating a shift

With democratizing access to technology, more and more people are embracing it and telecom is one of the industries which is most affected by this shift. More and more people will have mobile by 2020 and the amazing thing is the revenue of this user acquisition will be driven by data consumption as compared to voice/SMS or other traditional services which were the base of telecom offering till recent time.

Operators are sensing the shift happening in the user choices and trying to figure out ways to stay in the competition. Mobile broadband connection to increase from 55% of the total in 2016 to 73% by 2020. The number of smartphone users will reach 5.7 billion by 2020 which means more and more people will be using data as a telco service and be a part of the digital ecosystem. Mobile data is expected to grow at a CAGR of 47% till 2020.

If we see the driving factors behind this shift, OTT, content and other digital service providers have played a major role. See the below graph on how the composition of services has changed over time.

It’s not only the addition of new partners to the digital ecosystem, but the traditional wholesale is also evolving. Here are the new trends which we can see happening in wholesale.

Implications on Telcos due to digitalization

Telcos no more work in silos as they are disrupted by the new age service providers hence looking for new partners to offer competitive and exciting services to its consumers. The below chart shows the changes happening in the telecom industry. This is forcing telcos to search for innovative and unique economic models.

 

New Possibilities for Telcos

These trends have opened a lot of possibilities to explore additional business avenues and try new economic models. The telco revenue mix is also changing with the partner mix as we can see in the graph and it is impacting the way telcos operate and manage partnerships in a traditional format. Hence the partner lifecycle management is also becoming imperative for telcos to embrace the digital revolution. For example, there will be 25 billion connected things by 2025 with enterprise verticals as the main drivers. Blockchain in telco has so far been limited to roaming but experimentation could take this further, especially if eSIM came to smartphones.

Smartphone connection will increase to 79% of the total mobile connection bringing in new customers. Over a fifth of the world’s markets will have launched 5G by 2020, spending a combined $244 billion on networks in the process which will bring new capabilities for telcos.

How Telcos can Embrace Digitalization Successfully

The need of the hour is a unified solution which can cater to all the requirement of the ecosystem. The system should be able to provide visibility for everyone in the ecosystem to establish trust among the partners. Right from efficiently managing the partner onboarding, to partner settlements and dispute management, the system should be able to make the whole journey seamless for both traditional and digital service partners. The below image shows some of the capabilities of the system.

This unified solution will allow telcos to transition through the changing paradigm and add agility and scalability to the business to embrace any new technology and consumer behavioral shift.

To learn how telcos can leverage partnerships to gain competitive advantage

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Managing Complex Partner Agreements in the Digital Era

Digitalization has opened a plethora of opportunities for Communication Service Providers (CSP) across the globe to transform their traditional service offerings, moving from telephony into content-driven businesses and reaching the status of Digital Service Providers (DSP). There is a paradigm shift in the telecommunications ecosystem with the entry of technological disruptors (like OTT players) resulting in a portfolio of services with competitive pricing models. The depletion of voice revenues and the rise of data services has changed the dynamics of business partnerships.

The traditional telecom service provider is no longer isolated in the market and has multiple collaborations for audio, video, content, analytics, cloud, etc. Furthermore, due to shrinking margins, operators are looking forward to having contracts/agreements with their vendors and partners, which will create a win-win situation for the parties involved. According to a recent survey by TM Forum, DSPs have a revenue opportunity of around $142 billion from digital services. Whether it is AT&T acquiring Time Warner for $85.4 billion or Reliance Jio integrating with Saavn to create JioSaavn app, telcos are looking to roll out exclusive content to their end customers. Considering that there is much to gain, a DSP without a strong content offering in today’s scenario is almost unimaginable.

A DSP often has hundreds of content provider contracts (mostly with aggregators) to manage, and there is a huge diversity of partners ranging from a garage developer to the likes of Google.

Building success factors:

The phenomenal surge in data consumption by subscribers and free content is driving the majority of telcos’ core businesses today. In addition to this, few telcos are partnering with OTT players to provide exclusive content and niche services in the form of premium bundles. Operator-led OTT subscriptions have become the new business model driving revenues and customer segments.
Building Success Factors
Source: IHS Markit

Driving new business models – The increasing level of complexity

Initially, rate cards were exchanged between partners for billing the usage of services. Later they entered into bilateral agreements to settle the revenues between them. Now, telcos are moving to digital contracts by partnering with content providers and other OTT players. These digital contracts involve tier/slab ratings, along with exclusions/discounts. Commitments and rating based on specific parameters have increased the level of complexity with respect to rating and charging their partners.

Let us go through 3 types of agreements that are executed between partners these days:

There are several agreement scenarios (deals) between the operator and content partner based on different business models. Furthermore, revenue sharing models have been evolving from fixed % based to a tier/slab-based approach across product scenarios.

1. An agreement based on new subscriptions

No of New Subscriptions    Revenue Share

0 – 500                                           P %

501 – 2000                                     Q %

2001 and above                              Q % and additional T % for no of subs >2000

As per the partner agreement, if new subscriptions are negative for a particular month, no pay-out will be made to the partner for that month.

2. An agreement based on promotions

Revenue sharing between the parties will be on a monthly basis. The promotion period can be for a few months or it can be ongoing. If the user subscribes to the content for

Months                  Revenue Share

1 month                         P %

2 months                       Q %

3 months and above      R %

3. An agreement based on market penetration

In this scenario, the operator is liable to share the revenue based on the penetration of subscribers in an area. The complexity involved here is that the penetration level of each market is different from the other. In addition to this, there are certain areas where the radius is defined with respect to a landmark. Subscribers within the radius will be charged a premium and accordingly the revenue share.

In today’s competitive market scenario, partnerships have become the need of the hour for telecom operators and they are moving ahead by signing innovative and complex contracts. The above mentioned examples of digital contracts/agreements are a few models that we have recently dealt with. In the future, we will see many such models with increased complexity and innovative digital contract definitions.

If you are interested in knowing more about managing complex wholesale contracts

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Have you negotiated or signed any complex contract recently? Let us know in the comments section below. Looking for partner who can help you handle complex contact? Talk to us.

5G and the dawn of “age of inventions” – Key Takeaways from MWC19!

I am just back from MWC 2019 and am really excited to share my thoughts. The mood at this year’s MWC was of general enthusiasm and exuberance, particularly with respect to 5G and the possibilities it opens up for telcos.

When 3G and 4G happened telcos were slow to evolve and transform their business models. Global internet giants such as Google, Apple, Facebook made most of the mobile internet revolution in the last decade, whereas telcos saw continued pressure on margins, revenue and customer experience.

5G is yet another chance for telcos to #makeithappen if they can get their acts together. I firmly believe telcos have learnt from their previous experiences and are much better prepared for the next wave.

Here are my top three takeaways from MWC 2019

1. The dawn of “age of inventions”: 5G has finally broken through the hype and we saw some groundbreaking innovations being displayed around at MWC 2019. This is after the last few years where there was, in my view, a higher degree of tentativeness. We saw low latency, reliable connectivity-based use cases such as:

a)  Remotely operated medical surgery/ emergency medical treatment

b)  Ushering of “second great inflection point” # in transportation with autonomous cars, cars with natural language interface, cars with cognitive interface

We also saw several announcements in the area of IoT and Industry 4.0 with SAP, AT&T, Vodafone, Ericsson, Telstra etc. launching new solutions.

From Subex’s point of view, these are exciting times as our IoT Security solution is well positioned to help operators, smart cities and autonomous cars by providing much needed security cover.

2. 5G means intense Capex: While developing economies will continue to focus on monetizing 4G networks, developed economies will start rolling out 5G networks starting 2019. 5G rollouts will be Capex heavy needing massive investments in Radio Access Network with network densification, mmWave network rollouts etc. and in core network to support high speed, high capacity, low latency use-cases which 5G promises.

Subex showcased its Network Analytics portfolio driving smart spend, smart asset management and AI/ML driven network capacity planning use cases and these were very well received by both customers and prospects alike.

3. Digital Trust key to success in 5G: According Vittorio Colao, Ex CEO Vodafone one of the main challenges facing telcos is “the lack of a genuine customer orientation, which, if you have it, makes customers truly love your services and thereby drives value” (McKinsey Quarterly).

 As the 5G juggernaut rolls out, telcos will need to do aggressive network build outs, forge new partnerships, and offer far more critical services. Customers will expect ubiquitous connectivity of very high quality, investors will expect better management and ROI.

All this means telcos will need to really focus on building digital trust – a mechanism that creates trust in their offerings, processes and information systems. Failure would mean yet again handing over advantage to the internet giants who already benefit from global scales, not having to invest in expensive networks, and who have shown to be far more nimble in responding to customer needs. Subex with its focus on enabling digital trust through privacy, security, risk mitigation, predictability and confidence in data, is yet again well positioned to work closely with operators in building this much needed digital trust.

What do you think of dawn of age of invention powered by 5G? Let me know in the comments section below.

# Mckinsey Quaterly 

PS: Oh! Here is a bonus takeaway for those among you planning to be at MWC 2020. Wear comfortable shoes. One easily clocks 20,000 steps each day.

Digital Transformation: The Art of War!

Straight from the Board Room

15th Jan, 16:00 Hours: The Board Room at the Telco HQ

The silence is deafening, and the breathing heavy. Everyone is waiting with heavy anticipation. The top comes off the Mont Blanc, and the only sound is of the pen on the paper. The VP-Sales surreptitiously pulls out his iPhone, and drafts a text “Deal Done! Congrats…”. The finger is playing near the send button, with every passing second feeling like an eon.

The last dot underneath the signature is placed, and without missing a beat, the send button is pressed. The room is filled with a sense of relief, and the muted claps soon turn into backslaps and congratulations…The multi-million $ deal for Digital Transformation is now underway….

15th Jan, 22:05 Hours: The Conference Room at the Vendor HQ

1000s of miles away, the CEO phone beeps discretely. All the weary eyes turn towards the CEO. A faint smile emerges. With the “Yes” and the fist-pump, the room erupts. Years of arduous work has come to fruition. The clinking of the glasses, and the pops of champagne bottles could not drown the enthusiasm, and the spirit of the crowd.

The Chief Marketing Manager sneaks out, to work the PR lines. Minutes left before the item makes into tomorrows’ news.

16th Jan, 06:00 Hours: Leading Media Publications

“Vendor X inks a multi-million $ Digital Transformation deal with Telco Y”

Telco Y, one of the leading telecommunications services providers, has signed a multi-million $ partnership with Vendor-Y, for Digital Transformation. Digital Transformation is a strategic initiative of the Telco Y and is aimed at offering an extensive portfolio of services to its customers, enhance customer experience & engagement, and quality of services delivery.

01st Jul, 10:00 Hours: The Board Room at the Telco HQ

The silence is deafening, and the breathing heavy. Everyone is waiting with heavy anticipation. The Head of Billing is pouring through the recent twitter reactions to the Digital Transformation.

twitter-reactions

The VP-Sales surreptitiously pulls out his iPhone, and sends a text “Bad, looks very bad…”. 1000s of miles away, the exasperation sets in …

Let’s look at one of the major transformation challenges faced by telcos

Digital transformation has become the norm now, and it is nothing short of a war – the war to win over customers, to stay profitable, and survive amongst the fiercest competition. However, studies indicate that most of the migration attempts have resulted in an increase in revenue leakages and has negatively impacted the brand and customer experience.

The unfortunate reality is that a majority of telcos are currently seeing issues in their transformation process leading to negative impact aspects around revenue and non-revenue. Reasons for this vulnerability are quite straightforward – the controls that existed with a set process get disrupted, and start to diminish once the transformation begins, thus leaving the operators in a bit of a handicap.

As per the recent reports, a leading telecom operator was fined for serious breaches of consumer rule due to inconsistencies in the new billing system and incurred a financial loss of close 4.6 Million Euros. There are also reports of operators losing up to 50 million due to migration failures.

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win”.

– Sun Tzu, the famous Chinese general, military strategist, philosopher, and the writer

Which side are you on? The Victorious warrior or the Defeated warrior? Download the datasheet to find ways of becoming proactive in your transformation, and being a victorious warrior.

“Empowering Business Assurance with Artificial Intelligence” at Digital Transformation World 2018

TMForum recently concluded Digital Transformation World 2018 event at Nice, France. As the name indicates the key theme of the event was on enabling telecom operators to move their business to the digital world. The event was bustling with fresh ideas, innovations and technology which have the potential to cause disruption in the telecom industry. I represented Subex at the event and we participated in one of the catalysts. Catalyst projects are rapid collaboration initiatives driven by Forum member companies. Forum members work together to create proof-of-concept demonstrations for today’s most pressing business, operational and IT challenges.

The catalyst that Subex participated was “Empowering Business Assurance with Artificial Intelligence”. The catalyst goal was to bring in Artificial Intelligence(AI), Machine Learning & Big Data Analytics to empower the assurance teams in the world of digital transformations. This catalyst had enabled Subex to collaboratively deliver not only solutions for problems that can be solved using advanced analytics but also to create best practices and standards, helping hundreds of Forum member companies reduce cost, risk, and time-to-market as they transform for success in the digital world.

The use cases we worked on for the catalyst focussed on using AI based Machine learning techniques and advanced analytics to:

  • Enable Telcos to track fraudsters faster and minimize revenue loss caused by arbitrage
  • Allow KPI tracking and anomaly detection with a minimal manual intervention
  • Help Telcos differentiate fraudsters from genuine customers by identifying important features

Telcos we interacted at the event were very impressed with how AI & Machine learning can help them  manage challenges in the digital world.

The highlight of the keynote at the event was on the open Digital architecture and open APIs which provide a platform to rapidly partner and innovate, to deliver business and technology integration between the companies. The biggest announcement at the keynote was on one of the excellence awards, Reliance Jio from India was announced for an award for ‘Business transformation’ for making greatest strides in transforming its business operation to a low cost, agile and customer-centric model.

The other topics that were covered in the catalyst initiative were Block Chain Unleashed, Blade Runner, Smart Cites, Cognitive Customer care. Most of the catalysts and their theme was around disruptive technologies such as Blockchain platforms, Internet of Things, and Machine learning. This is a clear indication that industry is moving towards using these cutting-edge technologies to solve some of key business problems Telcos are facing today.

The most exciting part of the 3-day event was the Catalyst awards. Of the 25 catalysts that were part of the catalyst program, our catalyst won an award for Outstanding Contribution to TMForum Assets. We were thrilled and excited for having got the award. For me, key take away from the event is, in the road to digital transformation Telcos are looking at OSS/BSS not only as watchdog systems to monitor revenue leakages & frauds but are exploring ways by which these systems can help them generate revenues. We as Subex need to look at delivering to value to our customers considering these business assurance needs.

Why Telcos Need Real-Time Revenue Assurance?

Revenue leakage is one of the major worries affecting telcos around the world.  The number says it all. The 2017 Global Fraud Loss Survey by CFCA says telcos lose $29.2 Billion (USD) annually, equivalent to 1.27% of global telecom revenues, to several revenue frauds. For telcos, who are also aggrieved by the declining margins from traditional voice business, safeguarding the existing revenue sources thus becomes critical. The rising concerns over revenue loss have brought the discussion around a new approach to revenue assurance (RA). While the revenue assurance solutions in the market address some of the possible threats in revenue leakage, they lag behind in delivering a faster detection and reconciliation capabilities.

Why Real-Time Revenue Assurance?

As we see today, the main drawbacks associated with traditional RA solutions is the long gap between revenue leakage detection and revenue realization. Since these systems adopt conventional methods for data consolidation and streamlining, the process requires manual intervention in parsing and auditing. Considering the enormous volume of transaction generated in today’s customer-centric world, telcos cannot ignore such lapses in remediation. Thus, the need arises for an intelligent, automated RA platform that can reduce the gap between these processes to a minimum. Legacy systems also face challenge due to the rapid surge in user data generated from millions of transactions every day. In the wake of new challenges brought by IP networks and the sophisticated interconnection frauds, detecting and remediating the anomalies becomes even more challenging.

Real-Time Revenue Assurance: How?

Real-time revenue assurance focuses on minimizing the time gap between fault detection and reconciliation. With analytics at the core, the technology enables service providers to detect the threat as soon as it occurs and start the reconciliation process within hours of data inception. Let me elaborate the process a little. The files collected at the source will be pushed to the real-time RA system within a few minutes. The data is parsed and loaded within, say 30 minutes, and the reconciliation process starts within the next two hours, enabling the early revenue reconciliation than the traditional approaches.

Analytics plays a crucial role in ensuring real-time RA.  The complex algorithm segregates the data based on a set of parameters, so anomalies can be detected quickly and accurately. Advancements in real-time RA also promise near real-time and even real-time controls on revenue leakage. The output of RA controls can deliver additional insights on each transaction, which can be used to improve sub-optimal processes.

What Business Benefits Real-Time Revenue Assurance Bring to Telcos?

Since revenue assurance is the most crucial element in a telco business, the impact brought by real-time RA is huge. As mentioned in the beginning, the loss attributed to different types of fraud is incomparable, so a reduction in leakage exposure time results in significant savings. Also, revenue assurance in a telco business is linked to multiple processes including data collection, billing, settlement and operations. Thus real-time RA allows telcos to gain increased visibility into all aspects of subscriber data, which in turn helps them to improve Quality of Service (QoS).

Subscriber management is a key aspect of revenue assurance as it helps telcos to deal with customer attrition. The operators need to have visibility into subscriber’s usage and billing patterns. Such insights will help them to launch the right mix of services that enhance customer value and improve ARPU. Subscriber management, especially in IP-based systems, proves crucial to eliminate billing errors and disputes. Real-time revenue assurance scores in this context as it provides real-time visibility into customer behavior and capture anomalous activities before it impacts the network.

Watch this column to gain more insights on revenue assurance for telcos.

My tale of the Mobile World Congress 2018

I attended the recently concluded Mobile World Congress 2018 in Barcelona, representing Subex. At Hall 5 Stand 5F10, Subex had put up an elegant booth focusing on analytics, insights and IoT security, and set the stage for many back to back meetings with customers, partners, media, new connects and more, over the span of four days. The Conversations we had focused around IoT, Analytics and Insights with discussions revolving around live honeypot attacks, IoT secure stack, B2B business models, web scale applications retail billing, Capex and Opex optimization, customer experience management with edge computing, network investment modeling, innovative analytics & insights offering, telecom frauds using machine learning, big data scale stacks and many more. Overall, it was an engaging, invigorating and truly a great learning experience.

Among the various keynotes, the one which stood out was by Turkcell CEO Kaan Terzioglu, who swept the audience with his inspiring speech making a strong pitch for the optimistic Telecom future. During his keynote, he shared all the stats about what he and his team were delivering on the digital frontline over the last year – music apps, cloud services, instant messenger, TV+ apps – all topping the charts on their own turf.

There were a lot of expectations on big OEM vendors to put up a jazzy 5G show. However, with exception to Huawei, and to some extent Ericsson, most OEM vendors pulled off monotonous exhibits. The remarkable thing was that many operators had come up with exceptional messaging to market. For instance, Orange had put up many 5G demo use cases on IoT, V2N2X, Ultra low latency use cases; Vodafone launched an out-of-the-world 4G lunar project in collaboration with Nokia labs and displayed demos on connected vehicles, IoT and edge computing use cases; Docomo showcased robotic arms; and China Mobile demonstrated use case around 5G manufacturing robots. This clearly shows that operators have started driving towards innovation and digital services.

The other set of players who left a deep impression were semiconductor players. Intel showcased its autonomous car, along with its machine learning capabilities and showcased its low latency automobile use cases. At the same time, it showcased its next-generation chipsets for 5G. Qualcomm showcased its AI chipset and an array of applications on automotive use cases. But the winner among all was Huawei, who came out with all guns blazing with all possible 4G/5G/Fiber access use cases including 4K/8K video streaming, array of innovations around small cells, cloud computing, network slicing, edge computing and the attention grabber 4G connected flying taxi (drone)!

MWC-collage

One key takeaway for me, personally, is that MWC is an important networking event. You have a superb setting to meet your customers, network with potential clients, partners, media, competition and anyone who is remotely interested in your products! This opportunity is an unmatched and unbeatable one!!

If you look at this actioned packed event with an open mind you will be truly left with an assortment of emotions. The kind of competition in your space will spook you, the pace at which the technological landscape changes will awe you and the time, energy and money spent behind the bleeding edge / cutting edge technologies will simply numb you with a realization of your own relative position!

There is so much to experience here within such a limited time!!

GDPR – A New Road to Trust

As the May 25th deadline for the European General Data Protection Regulation (GDPR) looms closer many organisations still haven’t made the internal changes required by the new law.  For those who haven’t yet faced up to the impact of GDPR, a good starting point is to understand how the 7 Principles of this new regulation affect their business.  The challenge many have found is that there is not ‘one size fits all’ when it comes to GDPR.  Every organisation will have different requirements.  That’s why it’s recommended that organisations urgently carry out a self-assessment to gauge their own level of compliance, which considers their own unique circumstances.  Here are some of the questions organisations should ask themselves:

  1. Has all the personal data being held, where it comes from, how it’s processed and who it has shared with been documented?
  2. Are lines of accountability clearly documented should there be a data breach?
  3. Has a lawful basis for the processing been identified and documented? If not then has consent been obtained from the data subjects?
  4. Is there a process to securely dispose of personal data that’s no longer required?
  5. Do staff receive data protection awareness training, and do they know what processes to follow to identify, report and resolve data breaches?
  6. Do we carry out internal audits to monitor our own compliance with data protection principles?
  7. Have appropriate technical and organisational measures to protect data during processing been implemented?
  8. Do key people in the organisation demonstrate support for data protection?
  9. Can we respond to a data subjects request to see the personal data we hold about them?

The ICO, the UK’s supervisory authority, are providing assistance by making a self-assessment tool available on their website.  This can help both data controllers and processors to identify compliance gaps and provides recommended actions.  After carrying out a self-assessment, organisations need to draw up a plan for tackling the compliance gaps identified.  As can be seen from the above questions, high on the list of priorities is documentation. Documentation needs to exist that details the processes and policies to be followed, and as evidence that those processes are being followed.   This is because, in the event of a data breach, auditors from the supervisory authority will be looking for documentary evidence that shows how organisation has tried to comply with GDPR.  Such evidence could significantly reduce the likely penalties.  The level of detail required will depend largely on the sensitivity of the personal data held, and likely risk of a breach.  For example, in the case of highly sensitive data, a full Data Protection impact assessment should be carried out to understand and mitigate the risks.  If companies are diligent in their efforts to protect personal data, and thereby protect the customers themselves, then Elizabeth Denham, head of the ICO, has some comforting words.

‘You will know by now that, while I am never afraid to use the stick in the cupboard, I prefer the carrot.

Education, engagement, encouragement, – they all come before enforcement.

I have said many times that we are a pragmatic regulator and that hefty fines will be reserved for those who wilfully or persistently flout the law.’

GDPR is challenging companies to put their data protection house in order, but the benefit of GDPR is that it forces companies to better understand their own processes and improve internal governance.  This can lead to greater efficiencies and transparency, which can ultimately help to restore trust in big corporations that has steadily been eroded by every new revelation about misconduct and abuse of power, not to mention poor customer service.  Organisations that are looking for ways to avoid GDPR should instead start embracing it as a way to restore customers trust.

Why SIM Box Fraud is Rampant in Africa?

The second fastest-growing continent after China, Africa owes much of its recent economic growth to the use of telecommunications services. However, over the past few years, telcos in Africa have been hit by several telecom frauds. SIM box fraud, also known as the interconnect bypass fraud, is one of the major frauds affecting the dynamic telecom market in Africa. The impact is huge in terms of the loss in revenues to telcos and taxes to the government. It is estimated that Africa loses up to 150 million US dollars every year to interconnection frauds. Reports suggest that two years back SIM box fraud had brought in losses of 12 to 15 million minutes’ worth of revenue to Kenyan government and operators, and about US$5.8 million to Ghana government.

Why SIM Box Frauds Target Africa?

  • As per the industry reports, mobile subscriber growth in Africa is largely driven by the lower call prices and availability of cheaper handsets. The competition arising from over-the-top (OTT) providers has put an additional pricing pressure on telcos, forcing them to design new bundled offerings encompassing data, voice and SMS. Such bundles bring much lower per-minute revenue for the operators as compared to traditional services. Fraudsters operating the SIM boxes are taking advantage of this scenario to bypass the formal call termination systems that fetch higher tariffs to telcos.  The calls routed through the IP networks are terminated using local SIM gateways, thus compromising the formal interconnection networks and bringing heavy losses to the telcos who have invested in building the networks. Traditionally, African countries are known to have higher interconnection tariffs compared to other regions, which further explains why such frauds are prevailing in Africa.

 

  • If I were to look at data from google trends, one can also make out that Ghana in Africa seems quite buzzy about “Simbox Fraud” as a term to be searched on Google (till Nov, 2017)

 

simbox-fraud1

 

 

  • Technological advancements have also contributed for the rise in interconnection frauds. The growing sophistication around SIM box technologies has made fraud detection difficult using traditional methodologies. SIM boxes are programmed to mimic the activities of a normal call user. The equipment can have SIM cards of different operators installed, so a single SIM box can operate with several GSM gateways located in different parts of the world. The availability of SIM cards at cheaper prices and the lack of law enforcement over the sale of prepaid SIM cards have also favored the growth of SIM box fraud, further.

 

  • Globally, the difference in approaches adopted by different countries to deal with the fraud makes it difficult for operators to develop a unified strategy to fight these frauds. IP interconnection services are treated as legal in a few countries whereas they are banned in other countries due to the regulatory issues associated with such activities. For example, the Ghanaian government has declared SIM boxes illegal and made several arrests in this regard. However, SIM boxes are now available in several open markets including popular e-commerce platforms for around $1000 per unit. To make the matter worse, OTT providers like Viber are now explicitly selling their call termination capabilities to lure roaming customers to such bypass activities. Another such OTT development I recently noticed is Skype offering Free calls to mobiles and landlines in the United States and Canada from India These evolving trends convey the scale at which the SIM fraud is growing, calling for immediate action from telcos to safeguard their revenue streams.

Unified approach for addressing Sim-box fraud:

To conclude, the recent developments around SIM box fraud have further aggravated the challenges faced by African telcos. With no scope for regulatory remediation, the only way forward for them is to prevent these attacks using advanced technologies. Traditional approaches like Call Detail Record (CDR) analysis are becoming ineffective in dealing with modern SIM box strategies due to the latency and false positives associated with those methods. As the market evolves, operators are looking toward a unified approach that can help them address the crisis in a much proactive manner. The developments around machine learning and test call group (TCG) analysis have favored the growth of an integrated solution that can help telcos combat the fraud in a cost-effective manner. The approach builds the capabilities of the traditional models but integrates the advancements in artificial intelligence and self-learning rules.

Watch this space for more updates on SIM box fraud management with cognitive analytics capabilities.

Strategies for Telcos to drive the digital economy Part 2

The internet waits for no one! It is changing the way businesses run and in today’s era, digital economy is not a distant dream but a reality.

As promised in my last blog, I will elaborate on the key strategies that I disclosed in my previous blog which will help CSPs in their digital transformation journey to become Digital Service providers and thus drive the economy.

Core Rediscovery – As said earlier, being digital does not always mean discovering new revenue streams of the digital world. It also means doing the basics brilliantly. Ensuring innovation can be brought with in the traditional services. It also means identification of a new way(s) of doing business to pull in more revenue, a classical example in interconnect business is Origin based billing & routing. Other ways of innovation are Direct CSP billing – MVNOs to cater to niche markets to indirectly gain customer base and revenues. SaaS models like billing-as-a-service to support smaller partners. DVBT2 – Digital Video Broadcasting, SMS based Cab booking, Toll free based calling Apps, Secure SMS/Missed Call – Mobile Banking etc. Rating and discounting models to define rating plans that can also assist in bringing in more revenue generation opportunities for existing and new traditional partners. These can be revenue share models or the new age models like pay as you go.

Discover New – There is absolutely no denial that digital world is surely opening new revenue streams for CSPs. The mantra to grab a share of this pie is to act fast. CSPs need to establish a fail fast strategy so that they can identify core area of strength early in the digitalization journey. Fail fast strategy shall enable them in continuing only with those new streams that make sense to the eco system in which they do their business. No doubt, IoT & M2M are the most fascinating areas in digital world. Other areas where CSPs can generate revenue are APIs, Analytics as a service, supporting new age MVNOs like Uber and Micheline (Tier-as-a-service), smart homes solutions provided by Qivicon founded by Deutsche Telekom. Digitalization is fueled by the capabilities of operators, and hence the outreach of the operators is now domain agonistic.

Collaboration Platform –With digitalization, difference between a partner and the end subscriber relationship is becoming blur. Partners also need attention and care like your end subscribers. CSPs will fascinatingly find innovative partners in garage companies, startups, small organization etc. Hence it is terribly essential that CSPs have a collaboration platform that addresses partner empowerment issues.

There are two ways in which operators can bring in novelty. One is by revolutionizing their own, which we see in the case of the telecom giants acquiring platform that enables the disruptive capabilities inhouse.  The Another way is to look for vendors who can provide them a converged platform to leverage the entire gamut of the partner ecosystem. The end goal is to stay ahead of the competition by providing traditional and digital services to end customers.

Customer Experience – Telecom market used to be oligopoly in nature, wherein the major players of telecom industries use to commodify the subscribers to mint money out of them.  Whereas now, in a perfectly competitive transition, we need to shift the paradigm to make customer and CSP relationship more human centric. This will help a CSP in designing the offerings to ensure consumer retention and to win new customers. The new age subscriber is demanding in nature and prefers an operator who is agile, innovative and cost effective.

Below is the survey shared by Capgemini, which shows low net promotor scores of mobile operators.

 

mobile-operators

 

This survey also talks about that 58% of customers are willing to switch to Digital only service provider and high value customers are more willing to change. Unless operators reform their customer satisfaction approach, the NPS will stay low and operators will keep losing revenue and customer base to digital players.

Operational Efficiency – Digitalization will lead to increase in number of partner relationships. Soon a CSP, during its transformation journey, will experience partner explosion. Digital services will result in plethora of data getting generated. To keep things under check, a CSP must bring in efficiency by making its operations also digital. Operations can be digitalized by automation, reducing redundancy of systems and data, seeking help from domain and system experts (consultation and managed services), empowering partners with self-care capabilities. CSPs design their partner handling capabilities both in terms of processes and solutions considering mostly trusted partners, hence the partnerships are also limited and the systems are also multi step and user dependent. In case of digitalization, CSPs need to associate with multiple entities who can bring in renovation, hence will see surge in partnerships. To handle partner explosion, processes of on-boarding and partner care should be particularly efficient. Partners are the new age customers, they are aware that they bring innovation and new revenue stream for a CSP, hence they should be treated with lot of care. Having an efficient eco-system for partner will surely bring in satisfaction and shall maintain a healthy partnership.

Expense Optimization – Expenses are inversely proportional to profit. An aspiring digital operator must form a strategy around cost reduction. Based on a research house, software industry is gradually moving towards convergent approach from siloed ecosystem. This helps in reducing overhead of investing in multiple systems. Leveraging solutions that are based on open source technologies is another way of optimizing hefty recurring costs. If a telco can bring in operational efficiency, expense optimization will happen automatically.

This transformation will be a challenging journey for both CSP and its partners, but this will surely help an operator to rediscover itself and shall bring in more agility to accept and act on whatever comes down the path. Though there are many other factors and strategies that can be adopted along with the mentioned ones, these 6 strategies are our take on the transformation journey. However, it is very important for an operator to clearly identify the purpose of its modification, but it is completely okay to move step by step instead of adopting all 6 strategies at once. To start with the transformation, CSPs should reexamine the existing offerings, existing expense optimization plan, make the current operations efficient and ensure customer satisfaction in the existing services offered. Once there is a clarity in becoming digital in current line of business, identification of new streams will automatically fall in place.

We are discussing these strategies in detail at our booth (Booth # 5F10, Hall 5) in MWC 2018. Meet us in the booth to know more about how we can help in your transformation journey to drive the digital economy.

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