Tag Archives: Wholesale

Why do Telcos settle for less?

What makes a Telco settle for less? Is it the budget, fear of survival in a highly competitive market or knowledge and skill issues?

Bangladesh recently opened up the Interconnect landscape with 21 new ICX and 22 new IGW licensees entering the fray. This, without doubt, has fragmented the entire Interconnect market and has put significant pressure on the incumbents (to fight emerging competition) and for the new telcos (to have a viable business case for break even and eventually survive).

In a recently concluded InterConnect Conference at Bangladesh hosted by Subex, I had the opportunity to interact with a wide range of audience – CXOs, consultants & IT personnel. While it was acknowledged that a billing system is important to start the operations and convert “usage” to “cash”, it was evident from the discussions, that price was the driving factor in deciding a billing platform and to that end operators were scouting for “low cost” billing systems or looking at developing it in-house. Severe cash-flow issues, as the roll-out along with statutory payments to the regulator for obtaining and maintaining the license, was proving to be very costly. Hence cash-flow and total cost of ownership (TCO) were the main contributing factors to look at a low-cost billing option. The new telcos, in addition, were also exposed to the following risks:

  • Survival : Accurate and prompt billing will be a significant differentiating factor in the highly competitive market
  • Agility : As competition intensifies they need to be flexible to adapt to market needs and offer innovative products and services at the shortest possible time
  • Revenue leakages : Bangladesh as a market is highly prone to fraud and as per the regulator more than 10% of the revenue is lost due to illegal bypass

So, how are the telcos going to remain agile, competitive and eventually break-even at the shortest possible time? Do they have to settle for less and allow the forces of the market to dictate the future?

Subex unveiled a cloud offering for the Interconnect operators in the roadshow. It gives the best of both the worlds – low cost and superior technology, and help the telcos be ready for the future. The cloud model mitigates the business risks and provides the following benefits to the ICX and IGW:

  • Low cost of deployment & operations : With a TCO less than 30% of a licensed/in-house model and completely managed by experts, and CapEx requirement lesser by 50-60%
  • Low commitment : Volume based pricing to fit the business needs and scale as the business grows
  • Minimal risks : Easy sign-on and sign-off to the cloud model
  • Ready to launch: Pre-configured application requiring minimal customization (about 20%) to suit telco specific needs
  • Minimal domain knowledge: With service provider completely managing the core activities, knowledge and resource requirements from Telco are minimal. They are already constrained with resources and those can be used for growing their business
  • Flexibility : The cloud model can very easily extend into Revenue assurance, Fraud Management, Analytics for future

Naturally the excitement was evident when such an option was presented to the telco representatives. The only objection was around security (which was expected) and security is very easily addressable with the right technology and stringent processes.The “best-in-class” solution is available on a “best-in-class” service model which suits the pocket and addresses the business risks. It was time for the operators to go back and “relook” at their business case.

After all, when they have a great option, why do they have to settle for less?

What are the Current Concerns and Challenges of an Wholesale Operator ??

Last week I spoke at the GSC conference where an august  group of carriers convene to discuss the problems they face and best practices within their organizations.  So apart from being in Windsor one of the loveliest places in the UK and setting aside the fact we had a great treat from a British multinational Operator – a meal at the Guards Museum, Westminster.  What was discussed?

Two interconnected topics ( no pun intended) were top of the agenda item. GIPX and credit control and management.  Here carriers debated whether and how to give smaller players access to their network and how to limit debt liability. British multinational telecommunications services company spoke about their pre-pay component in billing and how that manages debt, predicts traffic and spend and successfully allows (untested) new carriers access. As the provider to them it was great to hear how pleased they are and what practical use the solution gives them.

We had a very interesting talk from the director of the Institute of Credit Management explained his organization’s mission   to educate about the issues of credit, risk and to stress the importance of positive cash flow.  Again this had carriers discussing issues around cash collection and customer management.  Opinion was divided – some leaning backwards in pursuit of the relationship others just pulling the plug when debt became unacceptable. This just reiterates how slightly different this domain is – retail billing  is, you don’t pay – you’re gone ( well there are exceptions in cases of hardship).  This is about carrier relationships and the bi-lateral sessions where carriers sit and negotiate with each other face to face – stresses the complex and often personal nature of the inter- carrier relationships.

The meeting  also  had a great speech from a Belgian Operator discussing Fraud prevention and the problems By Pass and  PBX hacking remain ever constant.

What did I learn?

New technologies offer new opportunities – not really a massive learning point – but more automation, alerting and deeper  MIS gives carriers the capability  to avail themselves  of these new opportunities and as providers of software to them we need to make sure that their days are as easy as possible.

Get Started with Subex