Mobile Operator Guide 2013 - Prepaid MVNO

SAP Mobile Services 

Mobile Operator Guide 2013 

The Evolution of Mobile Services: 

Challenges, Strategies, Opportunities



The Evolution of Mobile Services: 

Challenges, Strategies, Opportunities


The Evolution of Mobile Services: Challenges, Strategies, Opportunities 

Published by Sybase, an SAP Company 

Sybase, One Sybase Drive, Dublin, CA 94568-7902, U.S.A. 

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Library of Congress Cataloging-in-Publication Data 


Mobile Operator Guide 2013, The Evolution of Mobile Services: Challenges, Strategies, Opportunities 

Edited by Peggy Anne Salz 

p. cm. 

ISBN 978-0-9885886-2-2 

1.Mobile technology. 

Library of Congress Control Number: # 2012953199 

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 

10 FOREWARD 

By John Sims, President, SAP Mobile Services 

13 PART 1: INTRODUCTION : A WEALTH OF OPPORTUNITIES 

14 Mapping A New World For Mobile Operators 


18 Driving Growth In The Digital Economy 

By Stephan Gatien, Global Lead, Telecommunications Business Unit, SAP and 

Jens Amail, Senior Vice President and General Manager for Services, SAP 

25 PART 2: STRATEGIES FOR DRIVING REVENUE 

26 Long Live SMS 

Text messaging continues to grow from strength to strength as new services and 

paradigms around mobile marketing and mobile apps drive volumes and usage. 

By William Dudley, Group Director, Product Management, SAP Mobile Services 

33 Moving To The SMS Hubbing Model 

Operators are recognising that SMS hubbing is not just about connectivity; it can 

ease the management burden around cross-border messaging traffic. 

By Robert Rose, Senior Director, Global Operator Services, SAP Mobile Services 

36 Latin America Offers Big SMS Opportunities 

Personal Paraguay and Tigo Colombia discuss local market requirements and weigh 

on the tremendous opportunities and innovation that are driving SMS growth. 

Mobile Operator Guide 2013 The Evolution of Mobile Services: Challenges, Strategies, Opportunities 

3

43 Cybersafety: Everyone’s Responsibility 

The Cyber Information Sharing and Protection Act addresses how information 

should be shared between private companies and the government to catch malicious 

actors breaching networks to steal information or sabotage systems. 

By Steve Largent, President & CEO, CTIA-The Wireless Association 

48 Does The Future Of Mobile Security Lie In The Past? 

Text messages are a powerful vehicle for reaching people — but they are also 

increasingly the starting point for malware attacks. 

By Mary Landesman, Senior Security Researcher, Cloudmark 

53 Mobile Number Portability: Increasing Competition And Driving Value 

Mobile Number Portability has come a long way since it was implemented in the 1990s, 

but it now confronts mobile operators with a variety of commercial challenges. 

By Mitul Ruparelia, Director of Sales Engineering (EMEA and LATAM), SAP Mobile Services 

58 Intelligent Hubbing: Easing International SMS Routing Complexity 

A comprehensive checklist and solid advice aimed at helping operators remove 

the complexity around establishing and managing SMS routing. 

By Mark Weait, Vice President Sales, SAP Mobile Services 

63 Orchestrating Capabilities Delivers High Performance 

Bharti Airtel details the strategy that has allowed it to spread its wings across 

the African continent, lay the groundwork for value-added services and deliver 

high volume at low cost. 

By N. Arjun, Chief of Projects & Transformation, Bharti Airtel 

68 PART 3: IPX: INTERCONNECTING OPERATORS FOR UNLIMITED 

OPPORTUNITIES 

69 Bundling Services Makes Business Sense 

Korea Telecom discusses the importance of Voice over IPX in its larger strategy to 

future-proof its network, ensure end-to-end quality of service and grow its wholesale 

business. Interview with Incheul Park, Head of Wholesale Team, Global Business Unit, 

Korea Telecom 

4

74 Expanding Voice Connectivity Via IPX: An Operator Perspective 

In the Philippines Globe Telecom is embarking on an ambitious network change to 

deliver customer benefit by making cross regional interconnectivity better and easier. 

By Gil Genio, Head of International and Business Markets, Globe Telecom, Inc. 

78 The Value Of A True IPX 

Mobile Operators can best leverage the full benefits and economies of scale that 

IPX provides if they look beyond just offering basic services, such as voice and data 

roaming, and focus on delivering the services their customers will demand next. 

By John Candish, Senior Director, IPX Business, SAP Mobile Services and 

William Dudley, Group Director, Product Management, SAP Mobile Services 

83 Nine Ways To Get More Value Out Of IPX 

IPX offers tremendous value and here are 9 things operators need to do to ensure 

they can reap and maximise the benefits. 

By John Candish, Senior Director, IPX Business SAP Mobile Services 

86 Making The Right Connections 

SingTel recounts the lessons, learnings and results of its recent IPX trial, the first 

step in a private international network connecting all the Group companies. 

Interview with David Ng — Vice President, Regional Technical, of SingTel’s 

International team in the Group Consumer organization 

91 A Brave New All-IP World 

When it comes to IPX, peering among IPX providers is an essential element because 

it is the enabler of global reachability. 

By Elena Sacco, Chairman of the IWG at the GSMA and Senior Interconnect Manager, TIM 

94 Boosting Trust, Building Business 

In countries like Africa IPX does more than provide interconnectivity; it also meets the 

needs of local telecommunications authorities for transparency and accountability. 

By Ranjeet Wilkhu, Director, Neucom Solutions 

98 Voice: The IPX Killer App 

A candid view of the many benefits IPX provides. While many focus on future 

scenarios around LTE roaming, PCCW outlines how IPX can already enhance voice. 

By Richard Midgett, Managing Director – Wireless Business, PCCW 


5

104 PART 4: LTE: UNLEASHING INNOVATION TO DELIVER RESULTS 

105 Enabling 4G LTE For ALL 

MetroPCS discusses its early decision to deploy LTE and how this head start on 

the competition has allowed the U.S. operator to scale its business and satisfy its 

customers with value-driven services. 

By Ed Chao, Senior Vice President, Engineering and Network Operations, MetroPCS 

111 Fighting Smart To Win Big 

A clever approach harnessing RCS will allow operators to compete with OTT players 

with new services such as group instant messaging or chat, live video sharing and file 

transfer across any device, on any network, with anyone in a mobile address book. 

By Madan Jagernauth, Vice President, Marketing & Strategy, Mavenir Systems 

117 Positioning LTE For Success 

Research and insights brings clarity into the industry discussion about LTE, the 

benefits it delivers and reasons why operators take the lead in educating consumers. 

By Declan Lonergan, Research VP, Yankee Group 

124 Breaking Down Borders: Getting The Most Out Of LTE Roaming 

LTE is reaching a stage of maturity where technology is no longer a barrier to 

deployment, so now it’s up to mobile operators to architect the strategies that 

will leverage the complete range of benefits. 

By James Middleton, Managing Editor, Telecoms.com 

127 Video Communications: “A Perfect Storm” 

Consumer use of video has entered a new phase of growth, driven by devices, 

services and networks built to support it. But the wave of interest in mobile 

video could overwhelm service providers. 

By Ramsey Masri, Vice President, Sales & Alliances, Aylus Networks 

134 Enabling Roaming Across LTE Networks 

LTE will enable new services, but it will also put high demands on the data roaming 

backbone and require more bandwidth and resilient network connectivity. 

By Matthew Tonkin, Global Head, IPX Business, SAP Mobile Services 

6

138 LTE Roaming In Latin America: Conditions For Success 

The deployment of LTE across Latin America brings with it a host of benefits and 

equips operators to address the spectrum limitations facing their networks. 

By Alejandro Martinez, Chairman, Billing & Roaming Working Group (BARG), GSMA LA 

142 LTE: New Technology Boosts New Business 

A review of the business models, approaches and services, such as mobile video 

calling, that will allow operators to drive even more revenue out of their costly 

LTE investments. 

By Michel Van Veen, Group Manager, Product Management, SAP Mobile Services 

147 PART 5: OTT: OPEN THREAT OR HIDDEN OPPORTUNITY 

148 OTT Threat: Top Strategies To Fight Smart 

Learn from real-life examples, including KPN and China Mobile, about the real impact of 

OTT services on voice and messaging revenues and how mobile operators turn the tide. 

By Pamela Clark Dickson, Senior Analyst, Mobile Content & Applications Intelligence 

Center, Informa Telecoms & Media 

156 Evaluating Strategies To Face OTT Providers 

Operators need to be more digital. Does Telefónica Digital, a unit aimed at developing 

new applications and business models for mobile technology show the way? 

By Eusebio Felguera, Corporate Regulatory Manager, Telefónica 

161 NUVOs: An Alternative To Disruptive OTT 

Not all OTT apps threaten mobile operator revenues. Network Unaffiliated Virtual 

Operators (NUVOs) actually benefit operators and boost their business. 

By Austin Murray, Founder & President, textPlus 

166 OTT Ecosystem: Paving The Way For Opportunity 

The inevitable arrival of an all-IP world also reinforces the needs for deeper partnerships 

between operators and OTT players. MediaFriends discusses apps and 

approaches showing the way. 

By Gene Lew, CTO, MediaFriends 


7

172 PART 6: UNLEASHING THE POWER OF MOBILE COMMERCE 

173 Mobile Money For The Masses 

Qtel has made its mark with its Mobile Money services and an innovative self-serve 

approach that meets the needs of both migrant workers and affluent customers. 

By Richard Morecroft, Assistant Director Mobile Money, Qtel 

179 Driving Mobile Money Usage In Unbanked Regions 

Driving customer adoption and increasing activation rates in mobile money is no 

easy task. The key is proper audience segmentation and a sharp focus on customer 

education. 

By Yasmina McCarty, Senior Manager, GSMA MMU 

184 Blueprint For A Successful Remittance Service 

A review of the mobile remittance services available today reveals a variety of 

different approaches to tackle the challenges of sign-up, cash-in and cash-out. 

By Diarmuid Mallon, Head of Global Mobile Marketing Programs, Programs & 

Demand Generation, SAP 

190 Operators: Tap Your Strategic Assets 

Mobile operators might only have scratched the surface when it comes to 

understanding their true potential to accelerate and enhance the mobile 

payments and commerce experience for consumers everywhere. 

By Aditya Kurejkar, Co-Founder and Program Director, Money2020 

194 Mobile Commerce Opportunities For Operators 

Building and deploying a successful mobile payment service requires operators 

to consider a wide range of variables, from business models to local telecom 

and financial regulations. 

By Matthew Talbot, Senior Vice President, Mobile Commerce, SAP 

200 PART 7: LEVERAGING MOBILE TO ACHIEVE LASTING LOYALTY 

201 Perception vs Reality: What’s Your Mobile Strategy? 

The arrival of the empowered consumer turns up pressure on operators and 

enterprises to create and implement a comprehensive mobile strategy that is 

truly end-to-end, multi-channel and, more importantly, customer-centric. 

By Howard Stevens, Senior Vice President, Global Messaging Solutions, 


8

205 The Power Of Push 

Push notifications also open up new opportunities around customer service 

and marketing, allowing mobile operators to deliver simple alerts to the 

customer — and trigger the customer to take action. 

By Coleen Carey, Director of Product Marketing, Urban Airship 

211 Harmonising Touch Points, Technology, Processes And People 

Celcom details the milestones and motivations that have helped it evolve its view 

of customer experience and sharpen its focus on encouraging lasting loyalty. 

By Suresh Sidhu, Chief Corporate and Operations Officer, Celcom Axiata Berhad 

215 Ask, Listen And Build Lasting Loyalty 

Talk to your customers, and listen to what they say. A successful mCRM program 

integrates social interaction, customer engagement and customer feedback. 

By Sally Burley, Director, The 3rd Degree 

220 Why Customer Engagement Campaigns Pay Dividends 

An in-depth look at how mobile changes the rules of engagement, allowing mobile 

operators, brands and businesses to maintain continuous customer touch and drive 

deeper engagement. 

By Gregory Dunn, Vice President, Product Management, SAP Mobile Services 

228 Glossary Of Terms 

234 Index Of Contributor Companies 

240 Acknowledgements 


9

FOREWORD 

Mapping A New World For 

Mobile Operators 


IP is changing the game. Advanced 

mobile devices, new technologies, 

increased competition and a 

shift in subscriber expectations 

towards truly personal and 

relevant interactions are coming 

together to cause disruption in the 

telecom industry - for operators 

and all the companies in their 

business ecosystems. 

However, the same conditions also spell 

massive opportunities for companies 

prepared to take charge of change. As one 

of the 40+ industry authorities who has 

provided insights for this Guide, points out: 

the rapid pace of change and the interplay 

of supply and demand for services that are 

aligned with customers’ requirements are 

combining to generate the mobile industry’s 

own Perfect Storm. 

The author in this case was referring to 

mobile video communications, where 

growth is driven by devices, services and 

networks. But mobile video isn’t the only 

market segment on the brink of the tipping 

point. This Guide shows that other services, 

such as SMS, LTE, mobile commerce and 

mobile customer loyalty, are also entering a 

new phase of growth and innovation. 

• SMS: While some analyst reports predict 

the decline of text messaging, SMS 

continues to be the number one data 

communications tool and the most 

effective direct marketing channel ever 

created. In almost all emerging markets it 

remains the ubiquitous data service of 

choice. In developed markets, the 

explosion of mobile apps, a development 

which many thought would mark the 

death of SMS, has actually pushed 

application-to-person (A2P) traffic 

growth to a new level. This spells 

10

opportunity for mobile operators and 

service providers to harness text 

messaging to supercharge a variety of 

services, ranging from mobile marketing 

and mobile advertising, to mobile 

commerce and mobile banking. 

• LTE: As mobile network operators move 

towards 4G/LTE and an all-IP network, 

many will cooperate to expand their 

network footprint and pave the way for 

compelling new services that will delight 

customers and drive positive results for 

everyone in the ecosystem. The advance 

of LTE will also challenge operators to 

develop strategies to cooperate with and 

enable Over-the-Top players in a manner 

that benefits the ecosystem and wrings 

new revenues out of operator core capabilities 

such as location information, 

billing support and network management. 

• Mobile commerce: From researching 

products to making purchases, consumers 

are increasingly reaching for their 

mobile devices as an essential shopping 

companion. At the other end of the 

spectrum, and particularly in the underbanked 

regions of the world, consumers 

are gravitating to services delivered by 

mobile operators that have expertly 

leveraged their distribution channels, 

retail presence and trust to expand and 

enhance mobile money and mobile 

banking services. Now it’s up to mobile 

operators to map out comprehensive 

strategies that cultivate partnerships 

with key players, such as banks, and 

adapt to local market conditions, such 

as regulations, demographics, and the 

emergence of new remittance corridors. 

• Mobile loyalty: Because mobile is a 

fiercely personal device, it’s an ideal 

means to reach customers on every step 

of their daily journey to encourage interaction 

and deepen engagement. Whether 

operators and marketers choose to 

harness text messaging, new forms of 

IP-based messaging, mobile web or 

mobile apps (or all in combination) they 

can clearly leverage mobile as a channel 

to boost customer loyalty and recruit true 

brand advocates. However, just as in reallife, 

building a relationship is about talking 

and listening, and that’s why companies 

must develop mobile loyalty programs 

that effectively do both. 

This inaugural edition of the Mobile 

Operator Guide features the insights of 

industry thought leaders and innovators to 

identify market trends, best practices and 

key lessons learned in deploying mobile 

services. The purpose of this industry 

knowledge resource is to provide readers 


11

clear direction and critical information, 

equipping them to develop strategies to 

drive messaging revenue, deploy cost saving 

solutions, generate new revenue streams 

from mobile commerce, build loyalty 

through customer engagement programs, 

plan for LTE roaming through IPX adoption 

and maintain competitive advantage in an 

IP-based world. 

The onward march of next-generation 

services into daily life has created a new 

world order in the telecoms industry. 

Think of this Guide as a starting point to a 

roadmap, one that will allow you to plot the 

transformational path your business needs 

to follow to succeed in this exciting new 

digital economy. 

12

PART ONE: INTRODUCTION 

A WEALTH OF OPPORTUNITIES

PART ONE: INTRODUCTION: A WEALTH OF OPPORTUNITIES 

Mapping A New World For 

Mobile Operators 


What a difference a decade makes. 

You need only go back that far to 

find the “early days” of mobile 

network operators’ journey with 

mobile data, comparatively speaking, 

a world that hardly compares 

to today’s landscape. Amid the 

far-reaching changes that have 

taken hold since then, the complexity 

that now distinguishes 

operator services brings with it 

a rich abundance of opportunities 

to those who are forward-thinking 

and adaptive in their strategies 

and capabilities. 

A decade or so ago, an operator’s world 

revolved almost exclusively around voice. 

In an environment of minimal competition, 

product offerings were comparatively 

straightforward, with “all-you-can-eat” 

pricing plans the industry standard. It 

seems like a long time ago, but it was only 

in 2001 that the first inter-operator SMS 

messages were delivered in the U.S., with 

SAP Mobile Services launching the first 

inter-operator SMS messaging hub in 

concert with AT&T Wireless. More significantly, 

during those formative years, 

operators took a walled-garden approach 

to mobile data, with services delivered 

within a closed ecosystem – a far cry from 

the interoperable, pan-operator network 

topology that has evolved since then. 

From that initial “closed system” approach, 

rapidly advancing technology and the 

explosive growth of international travel by 

globe-trotting executives and power users 

contributed to the dramatic changes we 

have seen take root since then. The eclipse 

“ As the cost of spectrum and the pace at which 

new network technologies needed to be deployed 

rose, operators needed to consider cooperative 

arrangements with their fellow operators, 

something that would not have previously 

been on the table.” 

14

Table 1: Global mobile data growth today is similar to global internet growth 

in the late 1990s 

Global internet traffic growth (fixed) 

Global mobile data traffic growth 

1997 178% 2009 140% 

1998 124% 2010 159% 

1999 128% 2011 133% 

2000 195% 2012 (estimate) 110% 

2001 133% 2013 (estimate) 90% 

2002 103% 2014 (estimate) 78% 

Figure 1: Based on data from Cisco. Cisco Visual Networking Index Mobile 2012 

www.slideshare.net/CiscoSP360/cisco-visual-networking-index-vni-global-mobile-data-traffic-forecast-20112016 

of voice by data, accompanied by the advent 

of successively more powerful generations 

of network technology leading to 4G, an 

all-IP environment, accompanied by today’s 

open infrastructure, means operators must 

generate profits by significantly rethinking 

their business models. 

Traditionally, mobile network operators have 

owned and controlled everything, including 

physical equipment, radio networks, services 

infrastructure, devices and user interfaces. 

But amid their changing economics, 

many have had to rethink this approach. 

With the rise of the smartphone, driven by 

the iPhone and Android devices, 

it was clear that mobile network operators 

could no longer dictate the user interface. 

As the cost of spectrum and the pace at 

which new network technologies needed 

to be deployed rose, operators needed to 

consider cooperative arrangements with 

their fellow operators, something that 

would not have previously been on the table. 

In addition, in order to accelerate the advance 

of the network effect for new services, 

operators in some countries have come 

together in joint ventures or cooperatives to 

lower their costs and seed the market with 

new service technologies – for example, the 

Isis joint venture in the United States or the 


15

proposed mobile payments venture among 

operators in the United Kingdom. 

To a certain degree this kind of thinking 

has been accelerated by operators’ need 

to compete against Internet-based players, 

which have arrived in the mobile space as 

creative and formidable competitors. It also 

marks a realisation by many mobile network 

operators that their future success depends 

more upon the innovative services that they 

offer subscribers than it does on the underlying 

network technology – a substantial 

shift in emphasis. 

So, as mobile network operators move 

towards 4G/LTE and an all-IP network, 

many will cooperate to achieve a more rapid 

and ubiquitous network footprint that will 

allow them to offer compelling new services 

that will capture the imagination of their 

subscribers. In doing so, they will compete 

against other mobile network operators, 

but they will also have to operate in a much 

faster cycle of innovation that will allow them 

to fiercely defend their franchises against the 

threat from the Internet-based companies 

or so-called Over-The-Top (OTT) players. As 

part of their strategy, operators will want to 

not only create a strong domestic footprint; 

they will also look to extend this to a global 

level, much as they have done over the past 

decade or so with SMS. 

This is precisely where SAP Mobile Services 

provides the most critical value. We are 

delivering the world-class interoperability 

and reach that comes with our role as an 

independent custodian residing between 

and among operators. It is a role that 

demands a truly holistic level of visibility – 

horizontally, across geographies spanning 

the Americas, Europe, the Middle East, 

Africa and Asia, and vertically, providing the 

technology and connectivity required to 

ensure that today’s ever-expanding operator 

ecosystem continues to flourish. Most 

importantly, SAP Mobile Services possesses 

the vision and resources to realise its custodial 

role in every dimension. 

“ The advent of a new world for operators follows 

decades of incremental improvements 

punctuated by breakthrough technologies.” 

16

This inaugural edition of the Mobile 

Operator Guide 2013, The Evolution of 

Mobile Services: Challenges, Strategies, 

Opportunities provides a rich taste of the 

bold new world that has materialised and 

continues to take shape. Inside, our expert 

stable of authors delve into the current state 

of play and the most important emerging 

issues in operator services, including: 

• Operator strategies for driving and 

optimising messaging revenue 

• Roaming and interconnect issues, 

including the interplay of LTE in an 

IPX environment 

• OTT Messaging, voice and video services, 

including managing the challenges confronting 

operators in a BYOD (Bring Your 

Own Device) world 

• Mobile commerce and the myriad of 

opportunities for operators 

• Customer engagement, including a 

roadmap for building loyalty by 

empowering customers. 

The advent of a new world for operators 

follows decades of incremental improvements 

punctuated by break-through 

technologies. The result has been a new 

paradigm for communication. All of us at 

SAP Mobile Services are working with 

diligence and with our eyes on the future 

to enable all participants in the value chain 

to experience the unprecedented power, 

ease and benefits of this new world of interoperability, 

reach and global interaction. 

John Sims is President of SAP Mobile 

Services, the recognised global leader in 

mobile messaging and interconnect services. 

He has more than 20 years experience 

with companies supplying technology and 

solutions to mobile operators. Sims has 

been recognised with the prestigious Ernst 

& Young Entrepreneur of the Year Award in 

the communications category. He is also a 

member of the Board of Directors of CTIA 

and has been a speaker and panellist at 

numerous industry events. 


17

PART ONE: INTRODUCTION: A WEALTH OF OPPORTUNITIES 

Driving Growth In The 

Digital Economy 

By Stephan Gatien, Global Lead, Telecommunications Business Unit, SAP 

and Jens Amail, Senior Vice President and General Manager for Services, SAP 

In July 2012, just before the 

London 2012 Olympics, no one 

could have imagined that one of 

the first headlines in the mainstream 

press would be about the 

local mobile networks’ bandwidth 

problems. But this is precisely 

what happened shortly after the 

Games opened. 

After having encouraged athletes and fans 

to tweet freely, Twitter was blamed for 

disrupting the coverage of the cycling road 

race. Ironically, the sheer volume of mobile 

social traffic along the course was so overwhelming 

that it even interfered with the 

GPS and telemetry updates from the race, 

which left those covering the games without 

information on positions and timings. 

This twist of fate was a perfect metaphor 

for the dilemma and challenges faced by 

communications service providers today. 

On one hand, the success of smartphones 

has led to increased data activities, with 

subscribers happily clocking time to play 

games, watch videos, post on social sites, 

tweet and send text messages. This phenomenon 

has contributed to the decline of 

revenues from voice services, once the cash 

cow of the entire industry without really 

offsetting it to date. 

On the other hand, costs to provide 

adequate network infrastructure to support 

this explosion of data traffic are on the rise. 

As the 2012 Olympic Games in London 

showed, the infrastructure available still 

cannot always handle the load and meet 

expectations for connectivity and reliability. 

Granted, network upgrade investments 

represent a heavy financial burden for all 

players in the ecosystem. However, these 

network investments are essential building 

blocks for future services and business 

models. In fact, 2013 is widely expected to 

be a blockbuster year for infrastructure 

2013 is widely expected to be a blockbuster year 

for infrastructure spending, with a large number of 

operators aggressively expanding their LTE networks. 

18

London Olympics - UK SMS traffic 

(Times are local to London - August 6 - 8) 

+18% 

+ 46% +8% 

+10% 

August 8 

August 7 

August 6 

Figure 1: Based on data from SAP. 


(Times are local to London - August 1 - August 5) 

+36% - 14:20: 

UK’s Andy Murray 

beats Roger Federer 

for gold in tennis 

+46% - 18:20: 

Men’s team cycling 

sprint - UK wins gold 

August 3 

August 4 

August 2 

August 1 

August 5 

1:30 

2:30 

3:30 

4:30 

5:30 

6:30 

7:30 

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0:30 

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19:30 

20:30 

21:30 

22:30 

23:30 

0:30 



19


(Times are local to London - July 27 - July 31) 

+36%: 21:10: 

USA wins gold 

in Men’s 4 x 200m 

freestyle relay (swimming) 

July 27 

July 28 

July 29 

July 30 

July 31 

1:30 

2:30 

3:30 

4:30 

5:30 

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0:30 


spending, with a large number of operators 

aggressively expanding their LTE networks. 

Tough competition 

Voice and Skype — allow messaging and 

VoIP calls between users. While these 

free services may have a strong appeal 

to customers, they have a decidedly 

negative impact on operators’ bottom line. 

But network upgrades aren’t the only item 

on the business agenda. Operators also 

have to develop strategies and capabilities 

to compete against new rivals. 

Increased penetration of smartphones has 

opened the door to powerful and disruptive 

actors offering OTT services. These services 

— which include Apple’s Facetime, Google 

Analysts estimate OTT messaging revenues 

as much as $13.9b, or 9% of message 

revenue, in 2011. This decline has led some 

to wonder whether most incumbent providers 

are not facing their “Kodak moment”. By 

way of background, Kodak filed for bankruptcy 

protection in 2012 after recognizing 

its products were obsolete and the competition 

was insurmountable. Similarly, mobile 

20

UK Olympics - Opening Ceremonies 

(UK SMS traffic - 27 July 2012 17:00 - 28 July 2012 03:00) 

21:10 +32% 

Ceremony begins 

22:30 -22:40: +137% 

Team Great Britain 

enters the stadium 

during Parade of Nations 

23:50 +56% official 

opening of games 

Queen’s speech 

21:40 +40% Rowan 

Atkinson “Plays” during 

Chariots of Fire 

Pre-ceremony - 

up to 56% of normal 

00:20 +25% IOC 

President speaks 

Opening 

Ceremony 

Traffic 

Normal 

Traffic 

17:30 

18:00 

18:30 

19:00 

19:30 

20:00 

20:30 

21:00 

21:30 

22:00 

22:30 

23:00 

23:30 

0:00 

0:30 

1:00 

1:30 

2:00 

2:30 

3:00 

21:40: +40% The Queen parachutes in 22:30-22:40 +137% Parade of Nations begins 

23:50 +56% Team GB enters the stadium. 


players are now struggling to compete 

against more agile and innovative newcomer 

companies, as well as OTT providers. 

Operator assets 

position of strength and drive profitable 

growth in this new era. 

First and foremost, operators — because they 

are network operators — control the backbone 

of the Digital Economy: connectivity. 

However, it would be a huge mistake to 

count operators out of the Digital Economy 

race too soon. Operators own critical assets 

they can leverage to build competitive 

advantage, establish themselves in a 

But owning the network is not enough. To 

avoid being relegated to the role of a “dumb 

pipe,” operators must also be able to capitalise 

on their successful track record of service 

delivery, including five 9s service availability. 


21

Porter 

strategy 

Telco 2.0 

strategy 

Nature of 

smartness 

Characteristics 

Cost leadership Happy Pipe Smart network Cost efficiency - minimal network, 

IT and commerical costs. Simple 

utility offering. 

Differentiation 

Full-service 

Telco 2.0 

Smart services 

Technical and commerical flexibility: 

improve customer experience by 

integrating network capabilities with 

on and third-party services and 

charging either end user or service 

provider (or both). 

Figure 5: Based on data from STL Partners. www.stlpartners.com/telco2_index.php 

Operators also have proven security and data 

integrity capabilities that will increasingly 

appeal to business customers as adoption of 

cloud- based models take off. 

the conduit between these ‘upstream’ 

partners and their traditional ‘downstream’ 

customer base, thus increasing their reach, 

presence and value-add. 

What’s more, operators also have a long 

-standing relationship with their customer 

base. This puts them in a unique position to 

act as digital service brokers between this 

large audience and a multitude of partners 

that want to reach this audience with 

content, software or new services to offer 

via the mobile channel. 

Pursuing this model — often referred to as 

the Teleco 2.0 model (1) — would allow Communications 

Service Providers (CSPs) to be 

Finally, CSPs have insights into a vast 

quantity of data about their customers, 

such as service usage patterns, location 

-based activities, roaming history and 

on-device behaviour on a daily basis. This 

impressive store of customer information 

represents a largely untapped monetisation 

opportunity for operators in an increasingly 

data-centred economy. 

So, how do CSPs move forward to implement 

the right strategies and — ultimately 

FOOTNOTES 

1. As originally defined by STL Partners 

22

2013 is widely expected to be a blockbuster year 

for infrastructure spending, with a large number of 

operators aggressively expanding their LTE networks. 

— succeed in the digital era? We believe 

they will need to focus on some key areas 

to drive profitable growth in the new 

Digital Economy. 

• CSPs should fully leverage their scale, 

superior reliability and service delivery 

capabilities, to invest in new business 

models in areas such as Cloud and Mobility. 

Operators such as China Telecom or 

Telstra in Australia have already adopted 

this strategy with success. They offer 

on-demand business solutions to a 

variety of business customer segments, 

in particular targeting small and medium 

size businesses. Other mobile operators, 

such as Rogers Communications in 

Canada, are launching business-oriented 

mobile app stores. This is part of a larger 

effort to become a one-stop shop for 

business customers, providing everything 

mobility-related, including mobile app 

hosting and mobile device management. 

• Large providers should also think beyond 

connectivity. Telefónica and SingTel are 

perfect examples of what operators can 

achieve. They have transcended their 

traditional organisational boundaries, and 

created new digital divisions to seize new 

opportunities including mobile commerce 

and machine-to-machine communications 

(M2M) in order to generate incremental 

revenue beyond their traditional services. 

Telefónica’s direct to bill initiative is a striking 

example of how an operator can leverage 

its billing relationship with its mobile 

customers to increase sales of digital goods 

and services, while learning to partner — 

not compete — with OTT players. 

The monetisation of subscriber data, in 

accordance with privacy laws, is also 

emerging as a strong opportunity for CSPs 

to grow their revenues. By leveraging the 

vast amounts of customer data they own — 

in real-time and at scale — CSPs can gain 

advantage in two important ways. They can 

serve their existing customers more effectively, 

and they can also use the customer 

information to take advantage of opportunities 

in new markets — such as proximity 

marketing or mobile advertising — where 

customer data is key. To accomplish this 

CSPs will need to adopt a highly scalable 

foundation suited for the real-time world. 

An examination of the results achieved by 


23

However, it would be a huge mistake to count 

operators out of the Digital Economy race 

too soon. Operators own critical assets they 

can leverage to build competitive advantage, 

establish themselves in a position of strength 

and drive profitable growth in this new era. 

T-Mobile US, for example, confirms that 

an in-memory based platform is very well 

suited to provide such a foundation. 

Fortune smiles on the brave. It is time for 

CSPs to make bold moves to develop their 

growth strategy in the digital era. They have 

the necessary assets to create new growth 

engines and focus on the abundant opportunities 

in the Cloud and Mobility markets. 

Moreover, operators can innovate and invent 

new data-driven business models and 

services (such as proximity marketing). 

If operators can arm themselves with the 

correct capabilities and business models, 

they can seize these opportunities, create 

lucrative new revenue streams and prosper 

from the Digital Economy. 

Jens Amail is Senior Vice President and 

General Manager for Services Industries at 

SAP as well as the Business Unit for Billing, 

Revenue and Innovation Management. Prior 

to joining SAP in 2008, Jens was with Siemens 

Communications for 10+ years in a variety of 

Senior Executive and General Management 

roles both in Europe and the US. Jens has a 

broad cross-functional background in the 

Communications Industry with Executive 

assignments in Sales, Services, Marketing, 

Solution Management and Operations. 

Stephan Gatien is a Global Lead within the 

Telecommunications Business Unit at SAP 

focusing on Business Analytics and Database 

& Technology. In that capacity, he is responsible 

for the analytics and data platform 

strategy in the industry, including SAP HANA, 

oversees the related solution activities and 

leads the analytics and data platform goto-market 

activities globally Prior to joining 

SAP, Stephan was with Telus where he held a 

variety of management roles in the wireless 

division of this Canadian operator. 

24

PART TWO 

STRATEGIES FOR DRIVING REVENUE

PART TWO: STRATEGIES FOR DRIVING REVENUE 

Long Live sms 

By William Dudley, Group Director, Product Management, SAP Mobile Services 

Mobile industry watchers have 

been predicting the death of the 

humble text message for over 

a decade, but a raft of recent 

research confirms that SMS is 

very much alive and kicking. 

Marking the 20th anniversary of SMS, U.K. 

analyst firm Portio Research points out that 

SMS has been very successful, generating 

approximately $821 billion for operators 

worldwide since it was invented in 1992. 

(and do) use their mobile phones to send 

and receive text messages. 

Veteran mobile author and analyst Tomi 

Ahonen estimates people sent a whopping 

6.1 trillion text messages in 2011, up from 

1.8 trillion in 2007. Meanwhile Informa 

Telecoms & Media state that total SMS 

traffic will reach 8.7 trillion by 2015, up 

from over 5 trillion messages in 2010. In 

its newest forecast analyst firm Portio 

Research calculates that total traffic will 

reach nearly 10 trillion messages by 2015. 

Overall, worldwide mobile messaging was 

the highest earner in the industry, raking in 

$179.2 billion in 2010 alone. Portio Research 

forecasts that this total will increase to more 

than $280 billion in 2014, and exceed $300 

billion by 2016. Of this total, SMS alone will 

generate $155 billion worldwide in 2014, and 

"it promises to continue to play a significant 

role in revenue terms in the coming years," 

the report said. 

Pervasive and personal 

It’s the simplicity, pervasiveness and sheer 

dominance of text messaging that has made 

it the world’s leading data communication 

tool. People everywhere on the planet can 

Clearly, SMS is THE most ubiquitous, 

non-verbal communications medium in the 

history of mankind. Today, SMS can reach 

over 5.4 billion people around the world — 

over 77 percent of the world’s population. 

In developing countries SMS plays a special 

role, transforming lives and economies at an 

amazing scale. Innovation in these regions 

also allows companies, organisations and 

governments to harness simple text messaging 

and achieve extraordinary results. 

From life-simplifying reminders to life-saving 

medical advice, text message services are 

changing the nature of commerce, banking, 

education, healthcare, news reporting and 

political participation. 

26

In developed markets SMS is by far the most 

effective way for people to communicate with 

each other — and connect with companies. 

Whether chatting with friends, or receiving 

alerts from banks and favourite brands, text 

is the primary communications tool. 

Continuing tide of text 

Significantly, even the advance of smartphones 

— chock-full of features, functionality 

and a wide variety of mobile applications 

— hasn’t changed consumers’ dependence 

on text messaging to connect with the world 

around them. In fact, a recent consumer 

study from Deloitte shows that SMS holds 

the lead. More consumers than ever preferring 

texting, and the vast majority (90 

percent) of smartphone users sending at 

least one text message per day. 

Another trend that shows no signs of slowing 

is text use among teenagers. In the U.S. this 

demographic relies on text more than any 

other customer segment. Research firm 

Nielsen, which bases its finding on a variety 

of data including monthly survey results from 

300,000 consumers, reports that texting has 

tripled, with teenage girls sending 40 percent 

more text messages than boys. That’s an 

average of 3,952 text messages per month. 

It’s a continuing tide of communication 

Nielsen calls a “mobile data tsunami.” 

In other countries text messaging continues 

to dominate. In Canada The Wireless 

Telecommunications Association reports 

the number of personal text messages sent 

every year has nearly quadrupled since 

2008 and hit a whopping 78 billion 

messages in 2011. In the U.K. the Ofcom 

Telecommunications Market Data Update 

Q1 2011 reports the total number of SMS 

and MMS messages sent in Q1 2011 was 

36.9 billion, up 22.7 percent over Q1 2010. 

The impact of OTT 

Amid this stellar growth, some analysts 

wonder if the text messaging trend could 

flip from growth to decline. New messaging 

capabilities bundled with iPhones and 

Android phones, as well as the advance of 

OTT messaging services and applications 

are among the root causes for the recent 

dip in SMS volumes in mature markets such 

as Philippines and Taiwan. News that OTT 

player WhatsApp reported hitting the milestone 

of ten billion messages a day further 

suggests operators could be vulnerable to 

this new competition. 

However, Analysts point out the race is far 

from run. It estimates that companies like 

WhatsApp and BlackBerry will generate 35 

percent of the total messaging traffic in 

2016, but only 8 percent of the revenues. 


27

Average number of messages exchanged per month 

By age and gender, Q3, 2011 

604 

802 

3,417 

1,914 

928 

709 

434 

167 

64 

Male Female 13-17 18-24 25-34 35-44 44-54 55-64 65+ 

Figure 1: Based on data from Nielsen. 

Moreover, SMS will continue to dominate 

messaging and revenues, generating 42 

percent of the traffic and some 65 percent 

of total income. 

Indeed, Informa is not convinced that OTT 

apps and services might undermine established 

text messaging habits. It argues that 

many factors — including mobile operator 

pricing strategies, the penetration of mobile 

broadband and customer requirements 

to more open communications — will 

“determine how quickly and to what extent 

substitution occurs.” 

Open rules 

People are empowered by SMS to communicate 

with anyone who has a mobile phone. 

However, alternative messaging apps are 

limiting, not liberating. Unlike text messaging, 

these OTT services operate in a vacuum. 

Instead of overarching communities that 

span the planet, they create isolated islands 

of users who are completely cut off from 

friends and family members on the basis 

of the handsets and software they use. 

28

A Facebook user and a person using iMessage 

may be good friends in real-life, but the fact 

they use different services prevents them 

sending and receiving messages. 

This flies in the face of what communications 

is all about, and presents opportunities 

for mobile operators to bridge the gap. 

There are exciting and lucrative options 

to consider. Some mobile operators will 

choose to work with OTT players, enabling 

them to achieve the integration of messaging 

communications. Others will follow the 

lead of operators like Telefónica, which 

recently launched a free mobile application 

that combines free text chat, voice calls, 

picture and location sharing between users. 

Interoperability will also be delivered by 

the GSM Association standard called 

Rich Communications Suite (RCS), which 

includes a next-gen, real-time, presenceenabled 

messaging component that also 

interworks with the existing SMS ecosystem. 

Indeed, many of the operators 

featured throughout this first edition of 

the Mobile Operator Guide are betting 

on RCS to drive an interoperable, backward 

compatible messaging medium for 

subscribers and — ultimately — pave 

the way for new and innovative services. 

No limits 

Technology advances like RCS will allow 

messaging — including text messaging — 

to evolve and continue to account for a significant 

share of operator revenues. The future 

for OTT providers, however, is not quite so 

positive. Spoiled by choice and delighted by 

the freedom to communicate with anyone 

(and not just people that use that the same 

application), consumers will no doubt vote 

with their feet. It’s clear that many of the OTT 

players will simply fade away. 

Unlike text messaging, these OTT services 

operate in a vacuum. Instead of overarching 

communities that span the planet, they create 

isolated islands of users who are completely 

cut off from friends and family members on the 

basis of the handsets and software they use. 


29

It’s the simplicity, pervasiveness and sheer 

dominance of text messaging that has made it 

the world’s leading data communication tool. 

In the meantime, SMS-compatible 1 services 

from companies including textPlus will 

continue to flourish, offering customers 

more features and greater reach. But it’s 

not just person-to-person messaging that 

will increase. Growth will be also be driven 

by a desire from companies, businesses 

and brands to connect with their customers 

(and potential customers) via SMS. 

Research underlines the pivotal role of 

mobile in campaigns to engage with customers, 

encourage interaction and boost loyalty. 

From consumer facing brands that use text 

messaging to deliver brand messages and 

links to downloadable content and perks, to 

large retailers that cleverly use text messaging 

to deliver product vouchers and drive customer 

loyalty, the central role of SMS is 

clear. Perhaps the best confirmation comes 

from Coca-Cola, that declared that SMS is 

the “number one priority” in its comprehensive 

strategy to reach a global audience and 

increase customer engagement. Analysts 

termed it a “bombshell announcement” 

because other marketers quickly followed 

suit, launching strategies with mobile 

messaging at the center. 

Ironically, the rise of mobile apps, initially 

hailed as a new channel to the customer 

that could potentially dethrone SMS, has 

actually pushed text messaging growth 

to a new level. 

Brands and marketers, as well as application 

developers, are harnessing SMS to 

extend the life of their apps, keeping their 

users posted on updates, breaking news, 

location-based opportunities, campaign 

perks and other important information. 

More importantly, text messaging allows 

brands and marketers to re-connect with 

customers who haven’t used their apps 

recently — or even deleted it altogether. The 

result is a booming Application-to-Person 

(A2P) market Jupiter Research estimates 

will be worth $70.1 billion by 2016. 

Positive outlook 

Clearly, the next five years will see operators 

in many parts of the world leverage their 

all-IP networks, but even this progress will 

not shut the door to SMS. To the contrary, 

LTE networks using IMS infrastructure will 

lay the groundwork for messaging services 

Footnote: 

1. SMS-compatible services include some OTT service providers (also known as NUVOs or 

Network Unaffiliated Virtual Operators that inter-work with the SMS ecosystem. This stands in 

strong contrast to other OTT providers, such as WhatsApp, that do not offer SMS interoperability. 

30

Global revenue from A2P SMS split by eight key regions 2016 

Latin America 

Indian Sub Continent 

Africa & Middle East 

Central & Eastern 

Europe 

North America 

Rest of Asia 

Pacific 

Far East 

& China 

Western Europe 

Figure 2: Source: Juniper Research. (1) 

that will remain interoperable with today’s 

text messaging. In other words, there will be 

no interruption in service, or even reach. 

The humble text message that just celebrated 

its 20th anniversary has seen a lot 

of changes since the first SMS was sent in 

1992 between Neil Papworth (of Sema 

Group Telecoms) and Richard Jarvis of 

Vodafone – the message read “Merry Christmas”. 

Today, SMS is the most widely used 

mobile data service, with two-thirds of 

the world’s population using the channel to 

connect and communicate. From a business 

FOOTNOTE: 

1. www.juniperresearch.com/reports/Mobile_Messaging_Markets 


31

perspective, SMS is expected to remain 

a significant source of revenues and traffic 

for mobile operators on a global basis 

for years to come. The bottom line: the 

advance of an all-IP world will transform 

SMS, but text messaging will also continue 

to be alive and well. 

William Dudley has 25 years experience 

building and managing telecommunications 

network infrastructures. He leads SAP Mobile 

Services Messaging Team, which focuses on 

solutions including inter-operator SMS and 

MMS products (P2P) and mobile messaging 

hubs and services (A2P SMS and MMS). 

Dudley also provides industry commentary 

to both internal and external mobile industry 

publications, through analyst and media 

interviews, and is active in several industry 

groups. http://scn.sap.com/people/william. 

dudley/content 

32


Moving To The sms 

Hubbing Model 

By Robert Rose, Senior Director, Global Operator Services, SAP Mobile Services 

SMS is ubiquitous, universal and 

widely regarded as the truly native 

language of mobile. However, this 

phenomenon, and the massive 

development of SMS since the last 

years of the 20 th century, has not 

been without its challenges around 

enabling — and guaranteeing — 

message delivery. 

Notably, there have been challenges in North 

America, where differences in technologies 

prevented the launch of off- net messaging 

for a few years. In contrast, almost the rest 

of the world was well progressed in its adoption 

of inter-operator SMS based largely on 

homogenous GSM standards. 

The solution to the technology differences 

in North America was provided by hubbing 

services dedicated to message protocol 

conversion. Having met the domestic 

challenges of the North American market, 

international messaging between non- 

GSM U.S./Canadian operators and their 

GSM counterparts worldwide soon also 

benefitted from the technology and 

connectivity offered by the hub solution. 

In developing countries, scarce human 

and technical resources within operators 

across these markets has accelerated the 

requirement for hubbing services. In the 

case of Tier 1 and 2 operators, for example, 

hubbing has tended to be a niche solution. 

In other words, the solution enabled “gapfilling” 

in a mobile operator’s footprint, 

thus satisfying subscriber demand for 

international SMS P2P connections when 

that operator’s own roaming agreements 

were not sufficient to provide the required 

messaging interconnects. 

In developing countries, scarce human and technical 

resources within operators across these markets has 

accelerated the requirement for hubbing services. 


33

As a consequence, operators are recognising that a hub 

can enable them to outsource the management burden 

around some of their cross-border messaging traffic. 

Making the mainstream 

The situation began to change when the 

GSM Association launched the Open 

Connectivity project in 2005. By seeking 

to manage and regulate (in a light-touch 

manner) the development of peering hubs 

for person-to-person SMS the GSMA 

effectively endorsed the hubbing concept. 

This, in turn, ensured the adoption of 

hubbing as a mainstream business practice 

for the global operator community. 

operator can actually become a much 

more significant benefit. 

Good business sense 

Today, economic pressure on most operators 

is now driving even more traffic (and 

more revenue for the networks). Headcount 

cuts, affecting even the most-established 

operators, are reducing their ability to 

manage their interworking activity effectively. 

Since 2005 the major hub providers have 

seen a steady growth in demand for their 

services. This has resulted in the development 

of an abundant revenue stream based 

on the termination charges on inbound 

traffic delivered by hubs. The ability to drive 

new revenues from additional SMS traffic 

— possible because hub prov-iders have 

extesive global reach and the ability to 

provide two-way access to operators 

previously unreachable — has been an 

added attraction over and above the 

greater reach achieved. 

Since term fees are paid on a strictly permessage 

basis, this revenue source clearly 

increases in proportion to the organic as 

well as incremental growth in traffic. As a 

result, what might first appear to be a minor 

contributor to the Roaming Department 

P&L account belonging to a mobile 

As a consequence, operators are recognising 

that a hub can enable them to outsource 

the management burden around 

some of their cross-border messaging 

traffic. This approach also reduces the 

managerial overhead around areas such as 

the negotiation and maintenance of bilateral 

agreements with destination operators and, 

when traffic is flowing, the upkeep of various 

number ranges within the SMSC. 

Routing all traffic for a particular country to 

a hub mitigates number range management 

tasks and delivers business benefit. As 

operators come to embrace the idea of 

delegating responsibility for some crossborder 

SMS traffic, they also discover that 

the more routes they outsource to the hub 

provider, the more they can increase their 

revenue “take” from their inbound traffic. 

In the end, what started out as a simple 

34

exercise to offload a handful of “awkward” 

destinations soon becomes a full-scale 

outsourcing venture. 

Growing revenues 

The financial ecosystem surrounding 

cross-border P2P SMS is a complex matrix 

of MO charges and MT payments. For hub 

providers, managing this is well worth the 

effort as long as they can continue to make 

a margin on the connectivity services they 

provide. In view of this dynamic, traffic 

through hubs will continue to grow. Importantly, 

the opportunities for operators to 

cultivate a worthwhile revenue stream will 

also grow in parallel. 

However, it’s worth noting that outsourcing 

can impact the revenues operators potentially 

gain from their bulk messaging (or 

“enterprise messaging”) business. This is 

because outsourcing all messaging traffic 

means outsourcing bulk messaging as well. 

By way of background, this traffic would 

have been reliant on the prior, direct 

connect, bilateral routes. Obviously, in 

cases where these are replaced by a hub’s 

connections for P2P business, the non-P2P 

traffic needs to secure its own routing and, 

potentially, its own commercial agreements. 

Real-world examples of this problem 

are currently being addressed. Efforts to 

resolve this effectively will naturally require 

flexibility on behalf of both operators and 

hub providers. 

In summary, in just over ten years subscribers’ 

need for global two-way communication 

via SMS has become the fundamental driver 

of mobile network data revenues. While 

domestic interworking is mainly addressed 

through bilateral relationships, cross-border 

traffic is increasingly being routed through 

the established, peered hubs. Though this 

trend is a consequence of the expedient and 

effective solution that a hub connection can 

provide, the opportunity to develop a new 

and worthwhile revenue stream is now — 

more than ever — an incentive for operators 

to subscribe to the hubbing model. 

A 20-year veteran of the information systems 

business (both fixed and mobile), Robert Rose 

began working in the mobile industry as a consultant 

to British Telecom’s mobile operations 

subsidiary Cellnet. Since 2004 Robert has 

guided SAP Mobile Services’s international 

development in P2P messaging services. 


35


Latin America Offers Big 

sms Opportunites 

From the rural regions, where farmers 

and small businesses use mobile to 

manage their workday, to exciting city 

centres where youth — in particular— 

rely on mobile to connect with friends 

and family 24/7, Latin America is 

more connected than ever before. 

In fact, making or receiving a call or text 

message in Latin America has never been 

easier. A new report titled Maximising 

Mobile, the third in a series on Information 

and Communications for Development 

published by the World Bank, reveals that 

nearly 98 percent of the region’s population 

have mobile cell signal and 84 percent of 

households use a mobile service. 

On average 81 percent of subscriptions in 

Latin America are prepaid. Understandably, 

many in the region use mobile phones to 

make voice calls, averaging 141 minutes of 

talk-time a month. In most markets the vast 

majority of users (97 percent in Argentina, for 

example) regularly use SMS to communicate. 

SMS leads the pack 

Interestingly, this revolution also brings a 

boost to text messaging services. But it’s 

not just about operator services allowing 

people with ordinary feature phones to 

communicate. Analysts note that text 

messaging continues to provide a solid 

foundation for a wide range of services, 

from banking to basic education, to 

widening access to health information. 

Against this backdrop, it is clear markets 

like Latin America — not the more developed 

markets of Europe and North 

America — will lead messaging growth 

and innovation. 

Feature phones are the focus because Latin 

America’s smartphone market is still in its 

infancy. Research firm Pyramid Research 

reports that the smartphone segment in 

Latin America will grow to 48 million in 2014. 

This is a marked increase, but doesn’t 

negate the fact that Latin America continues 

to lag behind the rest of the world in smartphone 

adoption. 

Clearly, the level of growth in mobile usage 

will continue, expanding into ever more 

rural areas across Latin America. It marks 

what the report calls “the beginning of the 

mobile revolution.” 

But this gap also offers mobile operators 

a tremendous opportunity to wring more 

value out of text messaging. Ironically, it is 

also the low penetration of smartphones 

that has kept over-the-top (OTT) players 

36

Maximising mobile for development 

Growth of global mobile subscriptions 

World’s population with mobile cell signal 

71% 

29% 

23% 77% 

2000 

0.7 billion 

subscriptions 

High-income countries 

Rise of non-voice mobile usage 

% National population 

2010 

5.9 billion 

subscriptions 

Developing countries 

2003 

61% 

2010 

90% 

Over 6 billion 

mobile subscriptions 

worldwide 

75% of the World 

now has access to 

a mobile phone 

89 

96 

82 

49 

72 

72 

61 

58 

48 

31 29 

18 

26 

38 

22 

10 

15 

19 

KENYA MEXICO INDIA INDONESIA EGYPT UKRAINE 

(ARAB REP) 

Send text message Take pictures or video with mobile Use mobile internet 

Pace of mobile phones spread globally 

(billions) 

8 

6 

The number of mobile subscriptions will soon take over the world’s population 

2002 There are over 1 billion mobile subscriptions, passing fixed-line users 

1978 First commerical cellular mobile services established 

Fixed-line 

subscriptions 

Global 

population 

4 

2 

0 

1961 85 years later, fixed-line subscriptions 

reach 100 million 

1876 Alexander Graham Bell holds the first 

two-way telephone conversation 

1875 1900 1925 1950 1975 2000 2011 2015 

Mobile 

subscriptions 

Figure 1: Based on data from Infodev. www.infodev.org/en/Document.1178.pdf 


37

at bay. This, in turn, has slowed the advance 

of messaging apps that enable smartphone 

users to send unlimited free messages to 

their friends. These OTT messaging apps 

such as WhatsApp, Viber and Apple’s 

iMessage are cannibalising SMS revenue 

and changing the way mobile users communicate 

with their peers. 

This is not the case in Latin America, 

according to ABI Research, developed 

markets have experienced a marked 

decrease in SMS sent because of the rise 

of OTT alternatives, but the drop in regions 

such as Latin America and Africa is not 

as significant. 

International SMS requirements 

Clearly, feature phones have several 

more years to thrive in Latin America. This 

provides operators a window of opportunity 

to generate strong revenues from their 

domestic and international SMS offerings. 

The international SMS business, for example, 

provides operators with the potential to drive 

significant volume and earn hefty margins. 

Opening new international routes, securing 

two-way service for their customers and 

marketing attractive bundle packages are 

also part of a strategy that would certainly 

help improve the bottom line. 

Personal Paraguay, a leading mobile 

operator in Paraguay and part of Personal 

Telecom group, has extended its 

international SMS coverage to reap 

significant business benefits. “SMS is an 

important part of how our customers 

communicate,” notes Miguel Ruiz, Personal 

Paraguay Roaming Manager. “Our customers 

want to be in touch with friends, 

family and colleagues whether they are in 

the same neighborhood, or living in a 

different country.” 

More importantly, customers expect their 

text message communications to be 

dependable and robust. “To achieve these 

SMS connections is a huge task that 

requires negotiations with operators and 

technical tests to ensure SMS quality and 

reliability,” Ruiz explains. To streamline the 

process and deliver customers the service 

they expect, Personal Paraguay has teamed 

up with SAP Mobile Services. “The hub SMS 

service helps us to have complete coverage 

with all operators in North America, the U.S., 

Canada and Mexico, as well as operators 

across LATAM, Europe, Asia and Africa.” 

SMS hubbing also allows Personal Paraguay 

the capabilities to cater to the portion of its 

customer base that are Paraguay citizens 

living and working in neighboring Argentina. 

“About 1.5 million Paraguayan people have 

38

Against this backdrop, it is clear markets like Latin 

America — not the more developed markets of 

Europe and North America — will lead messaging 

growth and innovation. 

emigrated to Argentina, and they want to 

be in contact with friends and family in an 

affordable way,” Ruiz says. The answer is 

International SMS, a popular service that 

also represents an important differentiator. 

In a nutshell, the service allows customers 

to send an SMS to a Telecom Personal 

Argentina customer and be charged the 

same rate as a local SMS. “There are a lot 

of opportunities to be gained by offering 

customers services that pair a simple way 

of communication with reasonable tariffs.” 

To take advantage of this robust growth 

in text messaging mobile operators are 

also migrating to more flexible pricing 

to encourage use and to appeal to new 

customer segments. A prime example is 

Tigo Colombia, a mobile operator that is 

developing a new approach to enable users 

to do what they want most: communicate 

with family and friends in other countries 

at affordable prices, observes Juan Felipe 

Velasquez, Latam International Roaming 

Coordinator at Tigo Colombia. 

Attractive pricing 

SMS is expected to continue accounting 

for a major proportion of value-added 

services revenue as services like banking, 

mobile money and M2M gain traction. 

Another driver is social media, the pastime 

and passion of nearly 100 percent of the 

Latin American population using mobile 

or Internet, according to comScore. While 

social media isn’t a new phenomenon, the 

growth is phenomenal. 

At a deeper level, Tigo Colombia’s business 

model is based on partnership to ensure 

access to key capabilities and technologies. 

According to Velasquez, the decision to 

cooperate with SAP Mobile Services is 

driven by the internal requirement to keep 

pace with innovation. “Many times we fail 

to seize opportunities because technology 

changes so fast and we sometimes 

neglect segments that do not have access 

to new technologies.” 


39

Exciting opportunities ahead 

What are the highest areas of opportunity 

on the operator agenda? 

Personal Paraguay’s Ruiz is squarely 

focused on extracting more value out of 

offering a wide variety of packages with 

truly personal communications at the core. 

“Our slogan is ‘Cada Persona es un mundo 

— Each person is a world.’ This means 

delivering each customer the services and 

bundles that are in tune with their lives. They 

are at the center.” Looking ahead, Personal 

Paraguay is also planning to deploy LTE/4G 

“with IPX to support new services” that 

satisfy customer requirements for quality, 

coverage and convenience. 

Velasquez is also bullish about the outlook 

for value-added services that harness SMS 

in new ways. Chief among these is M2M. As 

he puts it: “I think that the next step in our 

industry is machine-to-machine, where we 

can connect all the machines with machines 

— and with the people managing them — 

around the world with simple SMS.” 

Whether it’s person-to-person or machineto-machine, 

it’s clear that messaging is king. 

A promising and fast-growing service that 

should not be ignored is A2P, or Application- 

To-Person messaging. In this scenario, software 

applications and organisations, such 

as enterprises and governments, establish 

a one or two-way communication channel 

with people using SMS. 

Tigo’s Velasquez says he is also looking 

to a future where continued cooperation 

between the stakeholders — operators, 

suppliers and users — creates a win-win 

for everyone. Additionally, it is important 

to add these services onto an IPX, where 

connectivity meets users’ needs for quality 

and desire to communicate on their terms. 

The revenue potential is significant. According 

to a study published by Portio Research 

Ltd, a research firm based in the U.K., for 

the period 2011-2016 worldwide A2P SMS 

revenue is expected to outpace Person- 

To-Person (P2P) SMS revenue and grow at 

a CAGR of 13.1 percent. 

Looking ahead, Personal Paraguay is also 

planning to deploy LTE/4G “with IPX to 

support new services” that satisfy customer 

requirements for quality, coverage and convenience. 

40

P2P & A2P SMS revenue – worldwide 

(in USD billions, 2009-2016F) 

SMS Revenue (in USD billions) 

73.4 

25.5 

83.9 

30.7 

89.5 

27.4 

93.6 

44.2 

95.5 

52.3 

94.2 

60.4 

85.7 

70.1 

78.5 

75.1 

A2P SMS 

Revenue 

P2P SMS 

Revenue 

2009 2010 2011F 2012F 2013F 2014F 2015F 2016F 

Note: The sum of A2P and P2P SMS revenues may not add up to total SMS 

revenue because of rounding off errors. 

Figure 2: Based on data from Portio Research Ltd. 

As of end-2012, A2P traffic represented 23 

percent of total SMS traffic worlwide, and 

33 percent of SMS global revenues. In Latin 

America, A2P traffic accounted for 15.2 

percent of total SMS traffic, significantly 

lower compared with the U.S. and Canada. 

This would indicate there is a significant 

potential for A2P growth in the region in 

the years ahead. 

Indeed, the outlook for A2P SMS growth is 

positive. A key driver: the advance of more 

conversational commerce and advertising, 

requiring marketers and retailers to deliver 

campaigns, offers and brand messages via 

text messaging. Banks are also harnessing 

SMS to send transaction notifications to 

their clients, a convenient service that consumers 

have come to accept and appreciate. 

These examples show there is a lot of 

mileage — and value — left in text messaging. 

In Latin America, in particular, the 

growth of SMS shows no signs of slowing, 

a positive trend that benefits mobile operators 

that develop the mix of capabilities — 

billing, bundles and international coverage 

— their customers expect. 


41

SMS traffic break-out-regional (in billions, 2009 – 2016F) 

Region 2009 2010 2011 2012F 2013F 2014F 2015F 2016F 

Latin 

America 

P2P 203.4 285.3 341.7 381.6 417.6 443.7 460.5 478.3 

A2P 22.7 32.9 50.6 68.6 84.7 101.0 118.1 125.8 

Note: Sum of regional numbers may not equal total due to rounding off errors. 

Figure 3: Based on data from Portio Research Ltd. 


Strong growth drives penetration, usage 

By 2015 Latin America is forecast to have 

more than 750 million mobile connections, 

with an average penetration rate of 

122 percent. According to the GSMA, the 

region is one of the world’s largest mobile 

markets by volume. With HSPA and LTE 

connections reaching more than 305 

million by 2015, mobile broadband will be 

a key driver of growth. It will also be the 

primary means of Internet access for 

people across the region. 

Sebastian Cabello, Director of Latin 

America, GSMA commented: “As well as 

being one of the 

largest, Latin 

America is also 

one of the world’s 

fastest-growing 

mobile markets. 

We have experienced 

13 percent growth per 

year for the past four years, driven 

by increasing accessibility, flexibility and 

affordability of mobile services, and 

boosted by the increasing affluence of 

the region and the relative shortage of 

the fixed line infrastructure.” 

42


Cybersafety: Everyone’s 

Responsibility 

By Steve Largent, President & CEO, CTIA-The Wireless Association 

Imagine identifying a cyberthreat 

such as a virus, worm or malicious 

code on your company’s communications 

network. You know how to 

remove it, but you also believe that 

your company isn’t the only one 

under attack. You tell your boss 

that others, including your competitors 

and military communication 

networks, might likewise 

be affected (but their IT experts 

might not have noticed the threat 

yet, or simply haven’t figured out 

how to stop it). 

As a courtesy, you’d like to alert these other 

parties and offer your assistance to help 

them protect their networks in anticipation of 

the virus, or help them remove it altogether. 

Unfortunately, if you did that, you would put 

your company and yourself in danger of 

lawsuits and in violation of antitrust laws, as 

well as many other significant problems. How 

can this possibly be considered efficient, effective 

or “good business”? It’s not. 

If you’re like the CTIA-The Wireless 

Association, and many of its members, then 

you already know that private sector networks 

are targeted every day by hackers, 

criminals and nation-state actors for cyber 

exploitation and theft. The scenario I described 

above, as well as the attacks that 

confront the private sector daily, are pivotal 

reasons why we support the Cyber Information 

Sharing and Protection Act [(CISPA) 

(H.R. 3523)]. 

This legislation would pave the way for 

efficient and effective business practice, 

allowing our members to communicate 

with all the stakeholders — competitors, 

federal government agencies, IT directors, 

academia and experts — to identify 

potential issues and create solutions 

before, during and after the problem. 

CTIA and its members have already taken 

an active role in addressing cybersecurity, 

but time isn’t on our side because the hacker 

community is moving fast. 


43

The cybersecurity ecosystem 

The CISPA’s sponsors, U.S. House of 

Representatives Permanent Select Committee 

on Intelligence Chairman Mike Rogers 

(R-AL-3) and Committee Ranking Member 

Dutch Ruppersberger (D-MD-2), recognise 

that cyberthreat intelligence sharing and 

providing clear authority for the private 

sector to defend its own networks is 

critically important in today’s world. 

up of more than the operators and their 

networks. It now encompasses several 

other players, including device manufacturers, 

mobile app and content creators, 

operating system developers and infrastructure 

producers. Quite simply, every 

single mobile user and company in the 

wireless ecosystem has an important role 

in ensuring cybersafety and protecting all 

of us from cyberthreats. 

When passed, CISPA, which has already 

been approved by the U.S. House of 

Representatives and is awaiting the U.S. 

Senate to vote, will carefully balance appropriate 

privacy protections with immunity 

from lawsuit protections so that private and 

public entities are genuinely incentivised to 

share cyberthreat information to help our 

nation get ahead of the challenge. 

While CISPA is vital, CTIA and its members 

also want to highlight the importance of 

other pieces in the cybersecurity puzzle. 

Of these two are our immediate focus areas. 

Work in progress 

In recognition of the vast and diverse 

wireless ecosystem and the need to bring 

all the stakeholders together to address 

cyberthreats, CTIA created a cybersecurity 

working group in March 2012. 

This group is comprised of our members, 

and maintains an ongoing dialogue with government 

agency representatives, researchers 

and experts from around the country to help 

protect the wireless industry — and our 

customers — against cyberthreats. 

First, is to educate policymakers and consumers 

about the role they play in fighting 

cyberthreats. Or, as we like to put it, the role 

these parties play in ensuring cybersafety. 

Second, is to remind people that the 

wireless industry’s ecosystem is made 

In particular, this group focuses on sharing: 

• Best practices and existing standards 

(including technical exchange) 

• Known vulnerabilities and 

countermeasures 

44

96% Agree that government should allow companies to exchange information 

to help identify vulnerabilities and protect users from hacking and cyberfraud 

Strongly disagree 

1.8% 

Somewhat disagree 

2.2% 

Strongly agree 

49.4% 

Somewhat agree 

46.6% 

Figure 1: Based on data from McLaughlin & Associates. National Survey of IT Decision Makers, July 27, 2012. 

• Suggestions and ideas on how the 

industry improves security while being 

technology agnostic and maintains the 

openness of the Internet 

The working group has a number of initiatives 

already in the works, but I can’t reveal them 

yet. However, I can share the new Cybersafety 

pamphlet, which was written in non-technical 

terms, and provides consumers with 

easy-to-understand tips on how to protect 

themselves, their wireless devices and 

their information. 

This is important since today’s smartphones 

and tablets have features and functions that 

have turned them into mini-computers. 

Because these mobile devices are also 

packed with personal information, such 

as banking and health records, consumers 


45

How should industry and government proceed on cybersecurity? 

Industry should take the 

lead in defining standards. 

14.8% 

Government should take the 

lead in defining standards. 

4.0% 

Industry and government should share 

information on threats, and work 

collaboratively to define standards. 

68.0% 

Industry and government should 

share information on threats 

without defining standards. 

13.2% 

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 

Figure 2: Based on data from McLaughlin & Associates. National Survey of IT Decision Makers, July 27, 2012. 

http://files.ctia.org/pdf/IT-Decisionmaker-Survey-FINAL.pdf 

need to take more responsibility for the protection 

of this sensitive data. Specifically, 

consumers need to actively protect themselves 

by following simple tips, such as 

using passwords and PINs. They can also 

back up their personal information on the 

cloud, or other external sources, and 

update the operating systems on their 

mobile devices. 

Collaboration is essential 

Education is key to ensuring cybersecurity 

for everyone, but there’s only so much 

the working group can do without CISPA. 

Right now, the working group may only 

share limited information, so it isn’t 

helping us to address the real issues 

at hand: the daily attacks that threaten 

industry and consumers. 

46

By enacting CISPA, the private sector will be 

able to better leverage its own cyberdefense 

efforts in a coordinated way with government 

entities through information sharing to 

protect the nation’s systems, networks and 

consumers. Additionally, by helping facilitate 

the creation of a more robust cybersecurity 

marketplace, CISPA will lead to expanded 

research, service offerings and more jobs 

for cybersecurity experts. Those are positive 

outcomes that will surely benefit our nation 

and our economy. 

CTIA and its members have already taken 

an active role in addressing cybersecurity, 

but time isn’t on our side because the 

hacker community is moving fast. Several 

independent reports have revealed up to 30 

percent growth in the instances malware. 

They also report rapid growth in spyware 

designed to steal sensitive personal, financial 

and work-related information from 

mobile devices. To counterbalance this 

significant threat, all of the players in the 

wireless industry ecosystem must be 

allowed to work collaboratively to stem 

the rising tide. 

For more information and to download the 

cybersafety brochure, please visit: www.ctia. 

org/cybersafety 

Steve Largent has served as President and 

CEO of CTIA-The Wireless Association® and 

President of The Wireless Foundation since 

November 2003. Previously, Largent represented 

Oklahoma’s First Congressional 

District in the U.S. House of Representatives 

from 1994 to 2001. During this time Largent 

was the Vice-Chairman of the Energy and 

Air Quality Subcommittee and also served 

on the Telecommunications Subcommittee, 

the Oversight and Investigations Subcommittee, 

and the Environment and Hazardous 

Materials Subcommittee. 

This legislation would pave the way for efficient 

and effective business practice, allowing our 

members to communicate with all the stakeholders 

— competitors, federal government 

agencies, IT directors, academia and experts — 

to identify potential issues and create solutions 

before, during and after the problem. 


47


Does The Future of Mobile 

Security Lie in the Past? 

By Mary Landesman, Senior Security Researcher, Cloudmark 

The nature of malware and the 

entire computer attack spectrum 

has changed dramatically over the 

past decade. Originally designed 

to be disruptive to the computer, 

today’s malware is no longer the 

end game, but rather a tool that 

serves as a means to a new end: 

criminal profiteering. With that 

evolution, social manipulation 

has become a key facilitator in 

modern attacks, and messaging 

is the obvious medium through 

which it is affected. 

Social engineering entices potential victims 

into taking some action that will prove 

harmful to themselves and/or the device 

they are using. Social engineering is platform-agnostic, 

cannot be patched, and 

has a seemingly infinite number of angles 

through which susceptible victims can 

be manipulated. Further, there are no 

development costs associated with social 

engineering, no concerns of cross-platform 

compatibility issues, and is completely 

disposable without penalty – if one social 

campaign fails, the attackers can quickly 

and cost effectively move on to the next. 

Open for attack 

The always-on/always-carried nature of 

mobile devices enhances the potential for 

social manipulation. Many social engineering 

attacks succeed because they foster 

some sense of urgency. Mobile device users 

may be more distracted while checking or 

receiving messages (whether via email or 

SMS). This is because they are encountering 

these messages during the normal 

course of their day, rather than specifically 

setting aside dedicated time to check 

messages at their PC. Being distracted a 

recipient may act more hastily and open 

messages on their mobile device without 

thinking about the risk first. Further, 

people’s inherent trust in their mobile 

devices and the messages received on 

those devices, can exacerbate the situation. 

In concert with evolutionary changes on the 

malware front, smartphone, tablet and 

general mobile adoption rates are quickly 

48

outpacing traditional computers. In developing 

nations users are bypassing traditional 

computer adoption altogether and moving 

directly into smartphone and tablet adoption. 

This leapfrogging to mobile makes 

perfect sense; mobile devices are generally 

less expensive than traditional computers 

and are highly transportable, a distinct 

advantage in countries where Internet 

cafes are the norm. 

The combination of digital criminal profiteering 

and mobile adoption may well be the 

perfect storm. Not only does widespread 

mobile adoption provide a steady and 

increasing supply of potential new victims; 

mobile devices are also proving to be costeffective 

attack tools. Indeed, the ease with 

which mobile devices can be obtained 

(either through purchase or theft) significantly 

lowers the barrier to entry for 

would-be attackers. 

Short of having a crystal ball, it’s not entirely 

possible to determine the exact nature of 

the future threat for mobile devices. Regardless, 

there are tell-tale signs that mobile 

threats are following a similar – yet greatly 

accelerated – track first witnessed with 

traditional computer threats. 

For example, there is currently a thriving 

gray-hat market for Android users engaged 

in click fraud and other forms of advertising 

manipulation. This closely parallels the 

computer scene in the early 2000s, when 

Web 2.0 first provided the opportunity for 

affiliate marketing relationships. A subset 

of those affiliates quickly realised they 

could increase their revenue potential by 

incorporating unethical (and sometimes 

illegal) means of generating clicks for profit. 

Instead of taking several years to crossover, 

this practice has already materialised in the 

mobile arena. 

Likewise, traditional spam – problematic 

since the beginning of email – received a 

tremendous boost in 2003 through illicit 

spam proxies distributed by the SoBig 

worm. This shift has already occurred on 

smartphones, with a wide range of bulk 

mail and proxy tools available to would-be 

spammers who want to use mobile as the 

The always-on/always-carried nature of mobile 

devices enhances the potential for social manipulation. 


49

sending device. In early 2011 the first 

observed spam attack originating from 

Android devices occurred. This culminated 

in a mass spam campaign in mid-2012, thus 

demonstrating mobile’s suitability for use 

as a spam tool. 

Spam goes mobile 

The nature of spam attacks targeting 

mobile users has also adapted to the new 

ecosystem. Attackers do not necessarily 

need to rely on installation of malware or 

covert phishing attacks to profit. Instead, a 

mobile attack may simply trick the recipient 

into agreeing to send premium rate SMS 

messages. This results in expensive and 

unexpected charges to the victim, allowing 

the attacker to profit. 

Indeed, the majority of SMS spam falls into 

the category of scam or fraud, which is 

defined as a campaign to entice the recipient 

into taking some action that unwittingly 

results in information disclosure or 

financial loss. Recent estimates suggest that 

up to 70 percent of unwanted text messages 

are attempts at financial fraud. 

Social engineering factors heavily in scam 

and fraud campaigns and, as a result, the 

exact pitch, or hook, used by the scammer 

varies by geographical region. Scams 

offering free Wal-Mart or Best Buy gift 

cards abound in the U.S., a country where 

the Wal-Mart and Best Buy chains are 

well known. In the U.K. scams use PPI 

compensation or accident claims as the 

primary hook. 

Text messages are a powerful vehicle for 

reaching people. Currently, SMS marketers 

claim SMS message open rates are higher 

than 90 percent and opened within 15 

minutes of receipt. By regionalising topics 

to the victim’s locale, attackers are simply 

ensuring a higher open and reaction rate for 

these text messages in an environment that 

already fosters a high open/reaction rate. 

(Traditional email, by contrast, has an open 

rate of only 20-25 percent within 24 hours 

of receipt). 

Attackers do not necessarily need to rely on 

installation of malware or covert phishing attacks 

to profit. Instead, a mobile attack may simply trick 

the recipient into agreeing to send premium rate 

SMS messages. 

50

Exacerbating the problem, the typical 

SMS text scam is seldom single-purposed; 

rather each click through or response from 

the recipient leads to another possible 

angle to the scam. For example, a free gift 

card spam may begin with ‘just’ a survey. 

However, not only is personal information 

collected (and sold in aggregate), but the 

often obscured terms of service for the 

survey spell out insidious actions such as 

the inability to cancel the account or the 

unwitting agreement to send SMS texts to 

premium rate numbers. 

naturally hamper law enforcement efforts 

and make it more difficult to thwart attacks. 

Hopefully, we can all learn from past mistakes. 

Central to the success of traditional 

computer attacks was a failure to recognise 

or act on early indications that malware had 

turned to profit. Criminal attacks on mobile 

devices are following an accelerated path 

leading in the same direction. Let’s hope 

that we will act as quickly and adopt the 

appropriate counter - measures before the 

tipping point is reached. 

Also, a ‘free’ offer often requires the participant 

to pay various fees in order to continue 

progressing towards the final giveaway. This 

can progress to the point that, even if actual 

merchandise is ever ‘won’, the participant 

has spent more in up-front fees and unanticipated 

SMS charges than the actual 

merchandise is worth. 

Fighting back 

Mobile devices have already proven to be 

favourable and cost effective, both as an 

attack tool and as an attack target, with 

social manipulation playing a key role. 

Further, the ease of disposal and/or 

replacement of mobile devices will 

Mary Landesman has over 20 years experience 

in the security industry and is a widely 

cited expert in the field of antivirus, malware 

and computer security trends. Apollo 

Research named her the top spokesperson 

for both malware and phishing, the third for 

DLP (data loss prevention) and the third 

most quoted security spokesperson overall. 

Additionally, she was recently named one of 

the top 10 women in information security by 

eWeek. Since 2007, Landesman has also 

been an annual recipient of a Microsoft MVP 

award for her work in consumer security. 


51

The growing threat of smartphone hackers. 

Mobile malware and what you need to know 

Do you think it’s safe to access sensitive data on your mobile phone? 

Perhaps you should think again. With malicious programs designed to 

target cell phones skyrocketing, it’s becoming increasingly dangerous 

to use your phone without the necessary precautions. Here’s how to 

prevent malware from taking over your phone... and your life. 

What is mobile malware 

Malware is software with a malicious purpose. It may be designed to 

disable your phone, remotely control your device, or steal valuable 

information. Mobile malware uses the same techniques as PC 

malware to infect mobile devices. 

The growth of malware 

Number of mobile malware 

2,500 

853 

52 119 

229 

437 

2005 

2006 

2007 

2008 

2009 

2010 

The real dangers of malware 

• Bank account passwords are stolen 

• Private information is captured 

• The phone is forced to send messages to premium numbers 

• Phone data is deleted 

• Device is “bricked” and needs replacing 

• Malware-infected devices can be used by botnet owners to launch 

attacks on digital targets. 

Figure 1: Based on data from Bullguard. 

52


Mobile Number Portability: 

Increasing Competition And 

Driving Value 

9 

By Mitul Ruparelia, Director of Sales Engineering, SAP Mobile Services 

24 1 

Mobile operators are understandably 

concerned about subscriber 

churn and constantly on the watch 

for ways to prevent it. But this task 

has become more difficult since 

the advent of Mobile Number Portability 

(MNP), also known as Wireless 

Number Portability (WNP), 

which allows subscribers to vote 

with their feet when services are 

not satisfactory. This is because 

MNP allows the subscriber to take 

their phone number with them — 

even when they switch to another 

operator in the same country. 

In principle, MNP simply allows subscribers 

to retain their phone number. However, the 

process of porting a number from one mobile 

operator to the other can be complicated. 

It involves a number of steps including the 

initiation of the port from the subscriber, 

which is the request to the donor network 

that starts off the handover. It also involves 

an exchange of porting information among 

the mobile operators, and results in an 

update to the network routing scheme and 

internal home location registry databases. 

The turnaround time for this process 

depends on the country where this takes 

place because it is dictated by the 

technology and regulation present in the 

country in question. 

MNP advances 

MNP was first implemented in the late 

1990s in mature European markets such as 

the U.K. and the Netherlands. The objective 

was to enable mobile operators to compete 

for customers on other networks. 

To date 70 countries worldwide have implemented 

MNP, and this number continues 

to increase as new markets and regions 

advance. Predictably, we see it’s the 

dominant mobile operators with stronger 

market share that are less likely to support 

the implementation of MNP. This is because 

they perceive it as a scheme that will likely 

increase the chances that they will lose 

— not gain — subscribers. 

Indeed, this is a realistic scenario, and one 

that has effectively motivated mobile operators 

to innovate and deliver value-added 


53

services to delight and retain their customers. 

They have also introduced lower pricing 

and exclusive packages with unique handsets 

in order to meet consumer requirements 

for services and — ultimately — grow 

their subscriber base. 

A prime example of this approach is how 

mobile operators marketed the Apple 

iPhone to attract customers to their brand. 

In the U.K. Apple awarded Telefónica UK 

(O2 UK) a two-year exclusivity on the 

handset, making it the only network supporting 

the iconic device. This gave 

Telefónica UK a significant advantage, 

allowing it to report the lowest churn rate 

in the country. Churn stood at a mere 1.1 

percent in both 2009 and 2010. 

During the same period other U.K. operators 

lost a significant number of their subscribers 

to Telefónica U.K. — no doubt attracted 

by the Apple iPhone package. In fact our 

figures for 2009 show that 15 percent 

of subscribers in the U.K. ported their 

number from one network to another. 

Fierce competition 

Since the economic slowdown that marked 

2008 and 2009, mobile operators across 

the globe have become more cost conscious 

than ever before. This shift in mindset is also 

a reaction to fierce competition and mounting 

pressure from regional bodies and institutions 

to accept MNP. This has combined 

to result in a significant decline in operator 

ARPU. Another outcome of this is the 

impact on OPEX and CAPEX budgets, 

limiting the investments operators can 

make in key technologies such as LTE/4G. 

Regulators and government institutions 

have moved forward with plans to liberalise 

markets by mandating the implementation 

of MNP. This is also the focus in the more 

mature and saturated markets, where 

penetration is near 100-percent and thus 

Investment in MNP solutions is critical to the 

capabilities of any telecommunications company 

to satisfy and retain their customers, as well as 

successfully complete calls and messages routed 

via their network. 

54

UK contract churn (%) 

by operator 2005-2010 (annual average) 

3.5 

3.0 

2.5 

2.0 

(Hutchinson)* 

1.5 

1.0 

T-Mobile 

Orange 

Vodafone 

02 (Teléfonica) 

Everything everywhere 

0.5 

0 

2005 

2006 2007 2008 2009 2010 

Figure 1: Based on data from Wireless Intelligence. 

https://wirelessintelligence.com/analysis/2011/04/o2-records-lowest-churn-rates-in-uk/ 

limits the number of new customers/nonsubscribers 

that can be won by mobile 

operators in those countries. 

MNP clearly benefits subscribers by offering 

lower tariffs and the freedom to switch. 

But it also creates commercial and technical 

challenges for mobile operators across the 

board. Chief among these is the lack of a 

standard process that allows operators in 

all countries, including those where MNP 

is not the accepted procedure, to know 

when subscribers who have chosen to 

retain their number and to route messages 

and voice calls to them. This confusion 

exists because mobile operators, as a 

default, will typically route voice calls 

and messages to a subscriber based on 

pre-allocated number ranges. 


55

Regulators and government institutions have 

moved forward with plans to liberalise markets 

by mandating the implementation of MNP. This 

is also the focus in the more mature and 

saturated markets. 

In cases where MNP has been implemented 

by the destination country, the originating 

mobile operator is dependent on either 

direct GSM connectivity (GSM Forwarding/ 

Onward Routing) with all of the operators in 

the country to route calls and messages, or 

they rely on a service provider — such as a 

voice operator or a SMS hub — to handle 

both the MNP and delivery. 

Choosing not to adopt one of these two 

options can have a negative impact on the 

call and message success rate. This was 

precisely the outcome in January 2011, the 

year MNP was introduced in India. Two operators 

in the Middle East region were proactively 

measuring KPIs at the time. They saw 

a 12 percent increase in failed SMS in the 

first quarter alone, which is quite significant 

given the tremendous volume of traffic 

exchanged between the Middle East and 

Asian operators. 

Critical capability 

As this example clearly shows, investment in 

MNP solutions is critical to the capabilities 

of any telecommunications company to 

satisfy and retain their customers, as well as 

successfully complete calls and messages 

routed via their network. 

Clearly, MNP is a good news story for subscribers, 

because it allows them to switch 

operators and retain their phone numbers. 

However, it also confronts mobile operators 

with a variety of commercial challenges. 

To delight and retain their subscribers and 

stand up to formidable competition in the 

marketplace mobile operators must be 

innovative and agile. To accomplish this 

operators are well advised to create services 

to offer more value to their customers and 

begin — through outsourcing and partnership 

— to build the capabilities to ensure 

the successful delivery of all messaging, 

voice and data. 

56

Mitul Ruparelia joined SAP Mobile Services 

in 2007 as a Pre-Sales Engineer after 

graduating with a first-class honours 

degree in Computer Information Systems. 

In 2010, he was named the design authority 

for the Intelligent Hubbing solution, which 

is a unique, patent-pending technology, 

allowing mobile operators to increase 

revenues, reduce operational costs and 

improve customer experience. 


57


Intelligent Hubbing: 

Easing International sms 

Routing Complexity 

By Mark Weait, Vice President Sales (EMEA & LATAM), SAP Mobile Services 

At a high level, most Mobile Operators 

roaming teams are focused on 

achieving two key objectives: 

achieving the best possible Quality 

of Service for subscribers, and 

optimising the associated retail 

and wholesale revenues. 

How does an operator achieve 

these aims? 

First, operators must ensure they have the 

network connectivity in place to deliver their 

subscribers’ text messages to their destination. 

Of course, operators must also enable 

a reply path to guarantee the delivery of the 

SMS response. 

Second, operators need to have the commercial 

mechanisms in place to monetise 

the message flow. 

Sounds simple, right? Well, it isn’t! 

Today operators that want to enable this 

are confronted by a variety of hurdles. To 

complicate matters, operators’ operating 

margins are coming under increasing 

pressure, a situation that can limit the available 

resources operators can direct toward 

enabling and monetising the message flow 

in the first place. What’s more, operators 

must cope with the advance of Mobile 

Number Portability (MNP), a development 

that has made the messaging landscape 

even more complex. 

This approach has enabled operators 

to dramatically increase the number of 

messages they have successfully delivered 

on behalf of their subscribers. This, in turn, 

has sharply increased retail revenues and 

customer satisfaction. 

58

The outcome: many operators today struggle 

to meet the increasing demands of their 

customers messaging requirements. 

operator would need to invest resources and 

effort to ensure the following conditions are 

met. Specifically, an operator must have: 

Failing to satisfy the consumers messaging 

requirements can lead to customer churn 

as well as revenue and margin leakage. Due 

to the increasing pervasiveness of OTT 

players in the market, this has become even 

more of an issue. 

Against this backdrop, many operators are 

striving to maximize revenues and customer 

satisfaction by pursuing strategies to increase 

their SMS delivery footprint. It’s 

a smart decision, but operators also face 

some challenges along the way. 

Ensuring SMS delivery 

An operator at the receiving end that has 

the desire — and the time — to negotiate 

and conclude an agreement 

A clearing and settlement provider 

in place to manage the commercial 

settlement 

Relevant SPAM controls and filters in place 

to protect the network and subscribers 

Resources available to manage the legal, 

technical routing, provisioning and 

testing requirements of a new AA19, a 

lengthy process that can take up to 6 

months per connection 

Clearly, there are three ways to enable 

2-way SMS delivery. Operators can use 

an SMS hub; they can set up a direct AA19; 

or they can utilise existing roaming agreements. 

If the operator is focused on 

ensuring wholesale revenue generation, 

then the last option offers little value. 

Therefore, lets focus on the first two 

options, highlighting the steps operators 

must take to realise benefits. 

Imagine an operator has opted to set up 

and manage an AA19 base. In this case the 

Access to the resources necessary to 

manage the on-going IR21 provisioning 

needs, a task that — in a country with MNP 

present — often involves monthly activity 

The SS7 controls and monitoring in place 

to provide end-to-end SMS visibility in 

case of subscriber complaints 

If MNP is present in the country where 

the operator operates, then that operator 

must either have an MNP feed, or an SS7 

connection in place with all the other 

operators in that country 


59

OTT players will have a major impact on the telco business model 

Total projected 3-5 year impact on core services 

Data carriage costs 

g 

g 

Mobile data sales 

g 

g 

g 

Google 

Apple 

Facebook 

Messaging revenues 

g g 

Skype/ 

Microsoft 

Skype/Amazon 

Voice revenues 

g g 

-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 

NB These projections are based on the sum of a weighted average of respondents’ votes. We regard 

them as indicative of the overall market effect and relative impact of the players on different areas 

rather than an absolute measure. 

Figure 1: Based on data from Telco2Research.com. Telco 2.0 Survey, September 2011, 301 Respondents. 

www.telco2research.com/articles/SR_google-apple-facebook-microsoft-skype-amazon-disruption-telco2_Summary 

A review of this detailed list confirms that 

this is not a simple undertaking. In many 

African countries, for example, an operator’s 

AA19 footprint would seldom exceed 50 

contracts. However, operators must also 

reach over 900 operators globally. To 

complicate matters, MNP will shortly be 

present in 90 countries, representing over 

one fourth of all the countries an operator 

would need to reach. 

Connecting for 

competitive advantage 

Against this backdrop, many operators 

are turning to SMS hubs to provide 

holistic connectivity. 

Operators are making this move because 

by connecting to an SMS hub, they can 

immediately gain access to an existing 

interconnected ecosystem. 

60

Mostly because, by connecting to an SMS 

hub, the operator can immediately gain 

access to an already existing interconnected 

operator ecosystem. Hubs can offer value 

added services, such as MNP solutions. 

In practice connecting to an SMS hub allows 

operators to access : 

• A connectivity footprint far greater than 

their own, and one that is continually 

increasing 

• Clearing and settlement from day one 

to ensure wholesale revenues are 

maximised 

• Global MNP solutions that help maximise 

message delivery success rates and 

eliminate the management overhead 

for the operator 

• Constantly evolving SPAM and spoofing 

filtering solutions 

• R21 provisioning and associated number 

range management services 

• Local support resource with access to 

end-to-end SS7 visibility (where this is 

offered) 

Such standard hubbing services go a long 

way to addressing the SMS requirement of 

today’s operators, but SAP Mobile Services 

believes that this is not the whole answer, 

and has therefore evolved its standard 

market offering to deliver greater value to 

the operator. 

‘Hybrid-solution’ path 

Many operators have invested significant 

resources and money into building their 

own bilateral footprints for SMS exchange. 

In Western Europe, for example, many large 

operators have over 250 direct bilateral 

agreements already in place, and a number 

of those are managed AA19 agreements. 

Clearly, it’s not an investment in capabilities 

that operators will want to abandon. 

What are the other options open to operators? 

Often operators are advised to go 

down a ‘hybrid-solution’ path. In this 

scenario operators maintain their AA19 base 

and work with an SMS hub provider. Despite 

obvious benefits, this path also presents 

challenges, particularly in countries where 

MNP is present. 

So, how does an operator manage to 

successfully route to AA19 connected 

operators in a given country, as well as via 

the SMS hub to another operator in that 

same country, whilst in parallel supporting 

MNP requirements? 

Ironically, the traditional approach to streamline 

this generally creates more complexity. 

What’s more, it often forces operators to 

manage additional and unwanted overhead. 

This is because the traditional approach 

requires the operator to manage the routing 


61

Many operators are striving to maximise revenues 

and customer satisfaction by pursuing strategies 

to increase their SMS delivery footprint. It’s a 

smart decision, but operators also face some 

challenges along the way. 

down to the operator level, as opposed to 

the country level. Due to routing table 

restrictions, operators determined to take 

this path are also confronted by added technical 

difficulties. 

Providing an intelligent approach 

The challenge now is for hubs to provide 

more functionality, so that operators can 

remove the complexity associated with 

routing international SMS from their 

network to their hub provider. The ideal 

solution is one that routes each SMS along 

the optimal route – whether that is via an 

existing bilateral connection or through the 

hub providers’ network – all whilst dealing 

with the challenges MNP introduces. 

Taking this approach has enabled operators 

to dramatically increase the number of 

messages they have successfully delivered 

on behalf of their subscribers. This, in turn, 

sharply increased retail revenues and 

customer satisfaction. It also drives an 

increase of return traffic delivered via the 

hub and in turn an increase in wholesale 

revenue with the added comfort of knowing 

those MT payments are guaranteed. 

There are additional benefits to this 

approach, such as reducing the complexity 

involved with managing SMS routing and 

MNP management. But it’s not just about 

delivering an operator immediate business 

benefits. This approach also frees up the 

Roaming team, enabling them to focus more 

time and effort in reducing revenue leakage, 

managing traffic imbalances, preventing 

spam abuses and — ultimately — building 

sustainable advantage. 

Mark Weait runs the commercial 

department of SAP Mobile Services across 

EMEA and LATAM that provides and sells 

solutions into businesses across all market 

segments, including telecoms, financial 

services, FMCG, manufacturing, logistics 

and many others. 

62


Orchestrating Capabilities 

Delivers High Performance 

By N. Arjun, Chief of Projects & Transformation, Bharti Airtel 

Indian telecom giant Bharti Airtel 

has spread its wings across the 

African continent to reach nearly 

60 million customers in 17 

countries including Nigeria, 

Burkina Faso, Chad, Congo 

Brazzaville, Democratic Republic 

of Congo, Gabon, Madagascar, 

Niger, Ghana, Kenya, Malawi, 

Seychelles, Sierra Leone, Tanzania, 

Uganda and Zambia. 

The strategy paving the way for this expansion 

— and success — is sharply focused on 

bridging the digital divide with affordable 

telecom services. Airtel in Africa has 

adapted the low-cost, high-volume model 

— which was employed in the home market 

of India — to serve the African market and 

provide customers world-class and innovative 

voice and data services to add value 

to their daily lives. 

Meeting local needs 

Analysts note that Africa has many market 

conditions that make it a booming market 

for telecom services. First, there is the 

potential for growth. Africa is home to over 

1 billion people and has the world’s youngest 

population. People under 25 account for 60 

percent of the total population, compared 

with around 30 percent in developed countries. 

In addition, apart from China and India, 

most of the world’s fastest growing economies 

are in Africa, according to the IMF’s 

World Economic Outlook. 

When Airtel entered the African market in 

2010 it realised that customer demand for 

connectivity and coverage, as well as customer 

service, would need to be addressed. 

First, coverage was boosted by adding more 

sites. Then customer experience and service 

was improved by offering new and innovative 

services at an affordable price. 

SMS services were a big part of this because 

African youth are more mobile savvy and prefer 

to do text messaging. Airtel responded by creating 

and promoting bundles that includes SMS as part 

of the package. 


63

The African mobile market is thriving, reaching over 642 billion 

connections in 2011 – after exceeding 65% penetration in 2011. 

Total African mobile connections, penetration rate and growth drive 

(millions, % penetration) 

Penetration 

Connections 

+30% 

1000 

85% 

82% 

90% 

Connections (millions) 

900 

800 

700 

600 

500 

400 

300 

200 

78% 

73% 

807 

65% 

735 

57% 

642 

48% 

552 

40% 

458 

31% 

379 

22% 

283 

15% 

201 

860 

910 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

Penetration rate (%) 

100 

0 

2% 

17 

3% 

26 

4% 

37 

6% 

53 

9% 

83 

136 

10% 

0% 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

2010 

2011 

2012F 

2013F 

2014F 

2015F 

Economic development in the region 

Success of cost-effective pre-paid services 

(96% of total) and significant price reductions 

Introduction of low-cost handsets 

Ambitious rollout of mobile network 

infrastructure –fast expansion of mobile 

coverage 

Figure 1: Based on data from Wireless Intelligence. Excludes M2M connections. 

A.T. Kearney 28/02 2012 MWC 

www.gsma.com/publicpolicy/wp-content/uploads/2012/03/mea12atkearneyafricapresentation.pdf 

64

This approach — built on collaboration with 

strong partners — lays the groundwork for a 

sustainable model that also equips Airtel to 

introduce the latest technology and offer 

competitive services. 

SMS services were a big part of this 

because African youth are more mobile 

savvy and prefer to communicate via text 

messaging. Airtel responded by creating 

and promoting bundles that includes SMS 

as part of the package. 

Today Airtel is focusing efforts on three 

areas. These are 2G, which is about delivering 

voice services; 3G, which supports data 

services; and mobile money and mobile 

commerce services. The latter is all about 

building relationships and serving the 

under-banked. 

Tapping talent to achieve 

excellence 

How does an operator deliver high volume 

at low cost? Across its markets in Asia and 

Africa Bharti Airtel has successfully driven 

down costs and ensured quality by partnering 

with key companies to manage all 

non-core operations — including network 

management and IT hardware and software 

needs. Put simply, we tap into the talents 

and capabilities of partners in all areas 

where we at Airtel feel we do not have a 

core competency. 

To date Airtel offers mobile commerce 

services in 15 of the 17 African countries 

in which it operates. The aim is to build an 

ecosystem that ensures money stays within 

the customer’s wallet. In other words, they 

can do everything without having to use 

cash, or go to the bank. 

This approach — built on collaboration with 

strong partners — lays the groundwork for 

a sustainable model that also equips Airtel 

to introduce the latest technology and offer 

competitive services. Additionally, Airtel 

maintains a sharp focus on core areas 

within the business — and a core competency 

is understanding customers. 


65

Over the next 5 years Africa will be the second fastest growing region in total 

connections and the fastest growing in subscribers 

Global mobile connections by regions 

(millions) 

CAGR 

9082 

11-15 

8484 

894 

7840 

7% 

845 

7194 

790 

6524 

734 

5835 

680 

4424 

627 

4154 

8% 

3861 

3548 

2823 

3200 

709 

13% 

631 

555 

492 

440 

947 

1015 

7% 

389 

766 

819 

876 

722 

7% 

465 

510 

555 

607 

656 

424 

5% 

5% 

5% 

5% 

5% 

5% 9% 

333 

361 

388 

413 

434 

229 

552 9% 642 10% 731 10% 815 10% 887 10% 

949 

10% 10% 

2010 2011 2012F 2013F 2014F 2015F 

ME EEA APAC Africa Others NA LATAM 

1)Includes M2M and mobile connections 

Figure 2: Based on data from Wireless Intelligence. 

A.T. Kearney 28/02 2012 MWC 

www.gsma.com/publicpolicy/wp-content/uploads/2012/03/mea12atkearneyafricapresentation.pdf 

Airtel has chosen to harness the SMS 

hubbing capabilities of SAP Mobile Services 

for two reasons. At a basic level, there are 

partners that understand the SMS business 

better than we do. At a more complex level, 

it’s about having the capabilities to offer the 

widest coverage to our customers in the 

shortest possible time. In fact, it is the 

approach that allows Airtel to provide SMS 

across our African markets as quickly as 

possible, and at the best quality possible. 

This approach also delivers significant 

business benefit. At Airtel we measure 

success in two ways: in terms of how many 

complaints we have received from customers 

that their messages have not been delivered; 

and the overall impact on revenues. 

66

Over the last 12 months the number of SMS 

messages both in and out has increased by 

12 percent. We have also seen a significant 

reduction in the time taken to resolve a 

customer complaint. 

Moving forward, the focus is to build on this 

foundation to increase the percentage of 

value-added services in the mix, and SMS 

is one of those services. Airtel will offer 

more bundles to encourage customers to 

use text to send out messages on special 

occasions, for example. It’s all about 

creating specific packages for specific 

customer segments. Airtel will also offer 

special rates for communities of interest, 

where we know these communities exist. 

This approach allows us to increase and 

improve the traffic between the various 

communities of interest across the globe. 

Orchestrating capabilities 

Harnessing the talents and capabilities of 

partners has allowed Airtel to export its high 

volume/low cost business model to Africa. 

It has also helped Airtel overcome many 

local market challenges and close network 

and services gaps. 

To be effective — and successful — this 

approach requires a constant exchange of 

information. Dialogue with partners has to 

be open and ongoing, and a key learning has 

been that there is always room for improvement 

in this exchange. 

Achieving business objectives is not about 

owning the capabilities; it’s about orchestrating 

the capabilities of partners. This way 

the model itself becomes the way to achieve 

high performance, maintain growth and 

deliver customers innovative — and affordable 

— voice and data services. Airtel follows this 

model to innovate and delight the customer. 

However, there will always be certain technological 

innovations, which will come from 

partners that we will need to marry with our 

deep knowledge of the customer. This way 

Airtel ensures that we offer what the 

consumer wants on time, every time. 

N. Arjun is responsible for strategy, planning 

and rollout of all new projects in Africa, 

including projects focused on mCommerce 

and international voice and data. Prior to 

this Arjun held the position of Integrations 

Director and was responsible for the 

successful integration of operations, 

spanning 15 countries, belonging to the 

African operator Zain Telecom. Bharti Airtel 

completed the acquisition of the African 

operations in 2011. 


67

PART THREE 

IPX: CONNECTING OPERATORS 

TO REAP BENEFITS

PART THREE: IPX: CONNECTING OPERATORS TO REAP BENEFITS 

Bundling Services 

Makes Business Sense 

In many ways Korea Telecom (KT) 

mirrors the history — and the 

future — of telecommunications. 

KT was established in 1981, when 

it was spun off from the state-run 

Ministry of Telecommunications. 

First on the agenda, KT worked to 

make voice telephony services 

universal and available to every 

citizen. It has since engaged in the 

development of advanced communications 

services, helping to make 

the country a leader in communications 

and prepare for a world where 

voice and data, fixed and mobile, 

and communication and broadcasting 

services are converged. To 

ensure quality of service and 

capture new efficiencies, KT is 

directing voice and mobile data 

services traffic over its IP Exchange 

(IPX). Incheul Park — Head of the 

Wholesale Team, Global Business 

Unit, within KT —discusses the 

central importance of Voice over 

IPX in KT’s larger strategy to futureproof 

its network, ensure end-to-end 

quality of service and grow its wholesale 

business. 

Your strategy — which is sharply focused 

on wringing more value and revenues out 

of voice — has its roots in your company 

history. Please explain the connection. 

KT started out as the incumbent operator in 

Korea, so we cover the range from fixed to 

mobile, data, Internet, IPTV — the works. As 

you know the technology trend is moving to 

IP. In the market, we are also seeing a shift 

IPX is clearly a way to reduce costs and increase 

efficiency because it’s all about delivering 

services over a single network. At KT we are 

interconnecting with IPX providers and we are 

trying to find out which model is more efficient. 


69

from fixed to mobile. As a result, KT has 

seen a drop in revenue it generates from 

offering fixed services, voice as well as basic 

data services. Like every other operator, 

we face the same difficulties and must make 

up for the decreased revenue with a new 

revenue business model. 

How does the focus on improving voice 

services allow you to meet the local 

needs of your customers? 

Of course, it all depends on the customer 

segment. Retail customers always ask for 

a good price and a good connection. And 

we can deliver this. General wholesale 

customers are more focused on quality. 

They require end-to-end quality as a basis 

for international roaming services. This is 

particularly important when we look at the 

number of inbound roamers from neighboring 

countries like China. Indeed, there are many 

tourists and business professionals in transit 

in Korea — and this number continues to 

grow. Therefore, roaming is naturally one 

of the services we are focused on. 

There is increasing demand for quality 

roaming services. At the same time, you 

are witnessing a decline in overall voice 

revenues. What are your objectives and 

your strategy to meet and satisfy the 

demands of both the marketplace and 

your customers? 

I always get that question! Frankly speaking, 

there is no right answer right now. Every 

operator has difficulties dealing with the 

decrease in revenues. In our case, we are 

working to reduce costs and also generate 

revenues based on volume — from buying 

power and bundling services, for example. 

KT provides a roaming service and offers 

international voice services for our operator 

customers. Additionally, we have a voice 

hopping service, so we can increase the 

volume of calls while helping our partners 

to reduce their costs. In this way we use 

the volume generated to develop new direct 

interconnections with the new operators. 

Put another way, one of our strategic aims 

is to bundle services and get more volume. 

That enables us to achieve economies of 

scale. In the case of data services, we are 

also bundling in voice and IP. This way we 

can offer customers a bundled solution, 

and we can benefit from some synergies. 

So, this is our strategy to recover revenue 

and recapture customers in the market. 

An increasing number of operators 

in your region recognise the value of 

delivering multiple services through 

a single, secure IPX connection. This 

is also a capability that lies at the core 

of your company’s strategy? 

70

Correct, KT is actively involved in IPX. The 

trend is moving traffic from TDM to IPX. 

Ultimately, IPX is all about enabling end-toend 

traffic delivery and quality of service over 

a single IP network. That is the concept, but 

each operator has a different view of what IPX 

can provide — and many have different 

approaches to reach their objective. 

IPX is clearly a way to reduce costs and 

increase efficiency because it’s all about 

delivering services over a single network. 

At KT we are interconnecting with IPX 

providers and we are trying to find out 

which model is more efficient. Put simply, 

the focus is on interconnecting to gain more 

experience with the technology and what it 

delivers. IPX is the correct direction for KT. 

As I mentioned, we also have a voice 

wholesale business. If it turns out that it is 

easy to move from the existing voice 

network to IPX, then we can very simply 

jumpstart our IPX business with operator 

customers. On top of this, we can add in 

services like signaling and GRX. That is the 

starting point for IPX here at KT. 

Moving to an IPX network is exciting. 

But the shift can also have its challenges. 

What can you tell me about your experiences 

and your key learnings so far? 

I myself do not have a technical background, 

but when I talk with our network engineers, 

they tell me the technology itself is not an 

issue. In fact, it’s not that different between 

operators when we interconnect with 

several IPX providers. Also, the technical 

spend out is almost the same because the 

industry standard is there to follow. These 

guidelines and standards ensure that every 

vendor in the world is providing a high 

standard for IPX. If there is a barrier to 

interconnection via IPX, then it’s the cost 

for interconnection. 

One driver behind the shift to IPX is the 

argument that it provides a proven and 

simple route to 4G, or LTE, and will be 

required to support LTE roaming. What 

are your views? 

For LTE roaming we will need more bandwidth 

to support data roaming. So — yes — I see 

this as one of the key drivers to encourage 

IPX connectivity within operators. 

What is the impact of free phone call 

services such as KakaoTalk on South 

Korean telecommunications companies 

and giants such as KT? In your view, how 

should operators react to maintain, even 

build, competitive advantage? 

The free phone services may be good from 

the perspective of the consumer, but it’s a 

real headache for the service providers like 


71

In the case of data services, we are also bundling 

in voice and IP. This way we can offer customers 

a bundled solution, and we can benefit from 

some synergies. 

KT. KakaoTalk offers free services, and to 

do this they are using our existing network 

without any settlement or pay. What’s more, 

these services raise some issues with the 

customer. The customers say they already 

paid for unlimited data service, and this 

gives them the right to use a service like 

KakaoTalk. However, this usage requires 

bandwidth and this is a heavy burden on 

the network. There is also the worry that 

services will collapse altogether if there is 

not enough bandwidth, and then there will 

really be problems. 

Going to an all IP-network means we will be 

able to make an offer that reduces cost and 

creates more competitiveness. Another 

approach, as I mentioned, is to use IPX to 

bundle services, thus providing services in a 

way that allows us to compete head-on with 

free phone call services and the providers 

delivering them. 

And you have to keep in mind the 

competition is more than just KakaoTalk. 

Other service providers will introduce their 

own service. Think of Skype, Google and 

iPhone. All these offers compete with the 

traditional mobile operators and major 

network operators. But when we compare 

ourselves against these OTT players, we as 

operators should not compete only on price. 

For example, we could differentiate by 

offering value-added services to enhance 

security. Leveraging on our service portfolios, 

we could also bundle various services 

together, tailored to the customer that also 

allow us to compete 

How do you plan to encourage your 

customers to increase their use of your 

services, to balance out the drop in call 

revenues? 

For the domestic service, it may be that 

we can provide the customer with a more 

flexible service or bundled service,this can 

also include security. On the wholesale side, 

using IPX interconnection will allow us to 

offer good quality and maintain competitive 

72

advantage on routes like Philippines 

or Vietnam, for example. 

We are also trying to expand our market 

areas, and this is where IPX can also come 

in. In Asia KT is very strong in the wholesale 

business, but this isn’t the case in the 

Middle East and Africa. So, we are trying 

to expand our network and also offer 

customer coverage in Western Africa and 

to do more interconnection with those 

operators. If IPX can help us to interconnect 

with them easily, it will be also good 

advantage for us to be using IPX. 

Incheul Park has over 15 years experience 

in the international telecoms industry. He 

heads the Wholesale Team within KT’s Global 

Business Unit, where he is focused on supporting 

the international voice business, 

which includes bilateral, hubbing and IP 

based services. Park was also responsible for 

driving the new interconnection and business 

development globally on behalf of KT. 


73


Expanding Voice Connectivity 

Via IPX: An Operator's 

Perspective 

By Gil Genio, Head of International and Business Markets, Globe Telecom, Inc. 

For Globe, the capability to support 

customers calling across borders 

today — and cope with the massive 

increase in mobile data use — will 

depend on our ability to leverage 

new ways of connecting and 

managing operator partnerships. 

IPX is a natural path. 

The concept of IPX is particularly 

relevant to the Philippines, a country 

where Globe is also a leading 

mobile operator, for many critical 

reasons. These are linked to the 

makeup and requirements of our 

local customer base. 

First, a sizable portion of the population 

lives overseas, a separation that sometimes 

spans several generations. Social media 

is one way families keep in touch over the 

distance, and one of the reasons why the 

Philippines ranks very high in the use and 

consumption of social media. 

At the other end of the spectrum, the 

Philippines is also a top destination for 

business travelers and vacationers. Many 

tourists visit to enjoy the many scenic 

spots across the country’s 7,000+ islands. 

Obviously, people and businesses need to 

stay connected across boundaries. That’s 

where IPX comes in. It promises to make 

this connectivity easier for both operators 

and their customers. 

Operators must be able to establish direct 

commercial and technical interconnect with 

each other, specifically for cross regional 

connectivity. This is why our future 

infrastructure plans include IPX. 

74

Ratio of international trips to population %, 2011 

65% 35% 

10% 

Europe 

North America 

Asia Pacific 

Figure 1: Based on data from GSMA. 

Voice on the rise 

Globally, international voice traffic has been 

stagnant for some time now. This is because 

customers are choosing alternative ways to 

stay connected. At Globe, however, this is 

not the case. We continue to see increased 

voice traffic, even though customers can 

also communicate using alternatives including 

social media, VoIP and text messaging. 

enabling Globe to exchange international 

calls directly with other mobile operators. 

This has become a key driver for Globe’s 

initial IPX efforts. Additionally, operators 

around the world — Globe included — are 

moving to an all-IP infrastructure. It’s a shift 

that can’t be ignored. 

The data challenge 

Because of this trend, Globe clearly needed 

to build the capabilities to support the 

growth in voice traffic in a more costeffective 

manner. It was also important for 

Globe to make it easier for many operator 

partners to send their similar traffic to our 

network. This is where IPX plays a role, 

At Globe we also have to adapt to the shift 

in customer requirements. 

Customers are exploring alternative ways 

of staying connected, and we at Globe have 

to support this through investments in data 

connectivity. Unfortunately, most operators 


75

Overview of international roaming technology and operations 

Initiated call 

Received call 

Visited 

Operator 

International 

transit 

services 

Home 

operator 

Receiver’s 

home 

operator 


did not respond quickly enough. The existence 

of complicated, unpredictable and 

high priced services, together with bill shock 

issues, has somewhat stunted traditional 

voice roaming traffic. In other words, it 

simply hasn’t grown as quickly — or as 

much — as expected. 

user experience at home and abroad. In 

other words, the quality of the experience 

for the roaming customer should be 

consistent and high quality. 

Quality control 

On the other hand, mobile data use by 

business travelers and roaming customer 

is increasing exponentially. This growth is 

driven by the increased penetration of 

smartphones, people’s love of social 

media and the constant need of users 

to be connected. 

This boom in mobile data use presents 

operators with a new challenge. They 

must work with the visited operators to 

ensure roaming customers enjoy a good 

Globe is well aware of this challenge, and 

has therefore taken steps to make it easier 

for travelers and roamers to use data. To this 

end we at Globe have made the customer 

experience a central focus of all we do. 

In the Philippines Globe is embarking on an 

ambitious network change that will result in 

a pervasive HSPA+ footprint and the deployment 

of tens of thousands of kilometers of 

fiber to support mobile data. And we are 

preparing to launch an LTE network. To close 

76

This boom in mobile data use presents operators with a new challenge. 

They must work with the visited operators to ensure roaming 

customers enjoy a good user experience at home and abroad. 

the loop with a superior customer experience 

Globe is also moving to a real- time 

convergent billing and customer care 

platform, and making additional investments 

in analytics and other back-end systems. 

These are measures that will deliver customer 

benefit. However, Globe customers 

who travel overseas, or people who come to 

the Philippines for business or pleasure, will 

not experience these advantages unless we 

at Globe work to make interconnect better 

and easier. In other words, operators must 

be able to establish direct commercial and 

technical interconnect with each other, 

specifically for cross regional connectivity. 

This is why our future infrastructure 

plans include IPX. 

Globe believes that — in the long run — IPX 

provides the best path to easier connectivity. 

It also delivers a lower cost structure, 

savings Globe can pass on to customers. 

Clearly, IPX offers many benefits to 

operators and their customers. Today the 

path to IPX implementation is not an easy 

one. But the effort is well worth it. It is 

important to keep an eye on the prize, and 

focus on the many advantages IPX delivers. 

Chief among these are: a better experience 

for customers, a lower long run cost structure 

for operators and the capability to 

manage current and future voice and data 

traffic. Keep this top of mind and mobile 

operators, like the pioneers of the past, will 

enjoy the first fruits. Personally, I am looking 

forward to an IPX-enabled future. 

IPX is inevitable 

IPX today is a given for two reasons. For 

customers, it’s all about being able to 

experience the same quality overseas that 

they have come to expect in their home 

network. What’s more, the exponential 

increase in data use demands the infrastructure 

can grow to adapt to what 

customers need now and in the future. 

For operators, IPX is an easy path to interconnectivity. 

More importantly, operators 

are moving to all-IP networks. Bottom line: 

Gil Genio is head of Corporate Strategy and 

Business Development at Globe Telecom. 

He is also the head of International and 

Business Markets, which are the groups 

responsible for sales, relationships, marketing, 

products and support for Globe’s 

overseas Filipino and service provider customers, 

and for business customers from 

SMEs to the largest enterprises. He also 

serves as CEO of Innove Communications 

and GTI Business Holdings, subsidiaries 

belonging to Globe Telecom. He is also the 

Vice Chairman of GSMA AP. 


77


The Value Of A True IPX 

by William Dudley, Group Director, Product Management, SAP Mobile 

Services & John Candish, Senior Director, IPX Business, SAP Mobile Services 

IPX is fundamentally about building 

a connected community of telecom 

operators, services and applications. 

It serves to enable the customers of 

mobile operators in this community 

to connect to one another, as well as 

access a wide variety of applications 

and services. Being able to guarantee 

quality of experience and keep 

costs under control are key requirements 

for the mobile operators. 

An IPX needs to deliver the full range of 

services, ranging from the basics that 

include data roaming, messaging and 

voice, to LTE-based multimedia services, 

to applications such as OTT services. Once 

operators are able to offer the full range of 

services through an IPX, they can leverage 

the benefits and economies of scale that 

IPX delivers. 

Strong and capable 

To deliver a full range of services at the 

highest quality the mobile operator must 

choose its IPX partners. Additionally, an IPX 

should be strong in all areas, not just basic 

services like voice or 3G data roaming. 

The concept of IPX evolved from GRX, a 

community of mobile operators formed to 

exchange roaming data. While the underlying 

network quality is clearly key to an IPX, 

the services provided are no less significant. 

Data Roaming 

The quality data roaming (specifically, 

3G roaming or GRX) depends on the 

community of mobile operators connected 

to an IPX. This is not just about the number 

of mobile operators connected to an IPX. 

It’s about which mobile operators are 

With IPX there will be no need to set up 

dedicated connections and policies for each 

service, nor will it be necessary to manage 

the capacity of each separately. 

78

connected. If you take the strategy of connecting 

key Tier 1 operators within a region to 

an IPX, your ensure the majority of a mobile 

operator’s traffic can be delivered on-net 

and managed directly end-to-end. 

Messaging 

Most mobile operators are considering or 

have already engaged with one or more IPX 

service providers. Consequently, the ability 

to leverage the benefits of an IPX to route 

SMS (and MMS) messaging traffic to their 

hubs is becoming paramount. 

calls end-to-end, whilst also achieving 

full transparency between the partners 

regarding transit and termination charges. 

IPX voice interconnectivity guarantees 

delivery Calling Line Identification (CLI) for 

mobile destinations, as well as assured 

quality based on predefined Answer Seizure 

Ratio (ASR) and Network Efficiency Ratio 

(NER) benchmarks at the destination level. 

Another benefit of IPX Voice is the significantly 

reduced Post Dial Delay— that is, the time 

interval between dialling completion and the 

ringing tone to indicate reception of the 

recipient network response. 

SMS traffic, for example, may use the IPX 

as a transport for SMPP or for GSM MAP 

over IP (SIGTran). The resiliency of an 

underlying MPLS network provides multiple 

benefits over VPNs (for SMPP) and direct 

SS7-cloud reach. For instance, with SIGTran 

the MNO no longer has to incur MSU fees 

just to reach their preferred messaging hub. 

Instead, the messages reach the Messaging 

hub via SIGTran, where they are delivered to 

the end destinations. 

Voice interconnectivity 

Customers and providers are connected to 

create an on-net community of IPX Voice. 

This allows for all parties to maintain full 

control over the quality and routing of voice 

Of course, voice destinations may now 

include VoIP or OTT Voice providers, as well 

as fixed networks. IPX Voice is by no means 

just limited to mobile operators. 

LTE 

The success of 3G roaming services (GRX) 

has set a high standard. When LTE services 

are deployed customers will expect the 

ability to roam to other LTE networks to be 

supported from day one. IPX can deliver a 

one-stop solution for LTE services, managing 

end-to-end connectivity and quality. The 

Diameter protocol is essential to roaming in 

the LTE world. It manages the authentication, 

access and accounting associated with 


79

Once operators are able to offer the full range 

of services through an IPX, they can leverage 

the benefits and economies of scale that IPX 

delivers. 

roaming users. By leveraging an IPX 

Diameter hubbing service, operators can 

rapidly achieve roaming relationships for 

LTE data services and mobile broadband. 

For LTE services such as Voice, the ability 

of the IPX network to differentiate and 

manage the various traffic types appropriately 

is key; especially as LTE IMS multimedia 

services are deployed including VoLTE 

(native LTE based voice). 

The IPX enables connectivity between LTE 

networks, delivering subscribers virtually 

the same services and quality of service 

while they are roaming that they know from 

their home network. This is critical when the 

roaming customer is using services such as 

Voice over LTE (or VoLTE). With high-bandwidth 

services such as voice and video 

calling, the IP latency and jitter must be 

extremely low from end-to-end to deliver 

customers a good experience. Certainly, 

the LTE (E-UTRAN) radio network will 

provide low-latency and high bandwidth 

between the device and the towers, but 

operators must also require QoS solutions 

for backhaul (the network connecting all of 

the cell-site locations together), as well as 

within the Evolved Packet Core (or EPC) 

and, finally, between networks (the IPX). 

Additionally, LTE Roaming will support the 

concept of 3G fallback. This usually occurs 

when the visited network does not support 

LTE or does support it, but at incompatible 

frequencies. In that case, the device will 

connect to the UTRAN (or 3G radio network), 

if it supports such frequency bands. 

Most LTE devices support both 3G and LTE 

frequency bands. 

Applications and OTT Services 

IPX can also reduce the complexity of connecting 

third-party services and OTT providers 

to a mobile network. With IPX there will 

be no need to set up dedicated connections 

and policies for each service, nor will it be 

necessary to manage the capacity of each 

separately. A good example of this is the 

inclusion of BlackBerry connectivity. This 

service enables mobile operators to connect 

to BlackBerry cloud services without the 

need to install and manage separate 

80

Intelligent Services 

IPX 

Fixed Line 

Service Provider 

3G 


LTE 


LTE 


Internet 

Figure 1: Based on data from SAP Mobile Services. 


81

dedicated connectivity — all enabled 

securely and over a resilient MPLS network. 

Other Cloud/OTT services may leverage the 

IPX by using an approach that is similar to 

the BlackBerry model for connection via 

IPX. This enables mobile subscribers easy 

reach to the OTT or Cloud services because 

operators have created dedicated connectivity 

to the service. Going forward, these 

services will likely include other advanced 

mobile capabilities that leverage existing 

models like voice connectivity or interworking 

(such as Diameter or Messaging), 

and for services including — but not limited 

to — RCS and IMS. 

SAP Mobile Services believes that by 

combining this breadth of services that 

the full benefit of IPX can be achieved. For 

mobile operators, the choice of IPX provider 

should not just be decided with a view to 

the handful of services they are required 

to deliver today. It should be based on an 

understanding of their long-term needs. A 

future IPX provider will need to be able to 

deliver capacity and network quality, along 

with the full range of services, to deliver the 

full potential of IPX. 

William Dudley has 25 years experience 

building and managing telecommunications 

network infrastructures. He leads SAP 

Mobile Services Product Management for 

P2P and A2P Messaging. Dudley also 

provides industry commentary to both 

internal and external mobile industry 

publications, through analyst and media 

interviews, and is active in several industry 

groups. blogs. http://scn.sap.com/people/ 

william.dudley/content 

John Candish is responsible for driving the 

company’s IPX business globally. Prior to 

this Candish held positions within Cable & 

Wireless, where he was responsible for the 

development of the GRX and messaging 

Services, subsequently leading the integration 

of the GRX & MMX services into the 

SAP Mobile Services portfolio. 

82


Nine Ways To Get More 

Value Out Of IPX 

By John Candish, Senior Director, IPX Business, SAP Mobile Services 

IPX can reduce connectivity costs, 

boost service quality and improve 

the time to implement new services 

and roaming destinations. Clearly, 

IPX should have a central role in 

operators’ strategies to develop 

and deliver future services. Here 

are 9 key lessons to guide operators 

along the path to IPX and equip 

them to maximise the benefits. 

1 Chose a quality network. An IPX is 

about far more than simply roaming data. 

A whole range of services from messaging 

through to real time voice and video now 

flow over IPX. It is therefore critical that 

operators chose an IPX capable of both 

providing the network service levels and 

resilience to deliver these services, as well 

as proactively managing the different 

traffic types. 

2 Plan for future capacity. The growth 

of roaming data volumes between mobile 

operators has been considerable over the 

last few years. Add to that voice, messaging 

and LTE-based services and the need 

to plan ahead when deploying IPX is clear. 

A 10 M, 30 M or 100 M connection may 

look adequate this year, but will it continue 

to meet demand in 18 months time? 

Putting in the right long-term infrastructure 

now will enable the operators to soft 

upgrade connections rapidly to meet 

demand in the future. 

3 Involve vendors early. Once an operator 

has connected and tested a service over 

IPX, whether that be voice, video, messaging 

or another application, they are able 

to access the entire community for that 

service on the IPX. The initial testing 

process is fundamental to success and 

enabling infrastructure vendors early is 

key to this. Even different releases of a 

platform from the same vendor can result 

in quite different results. Ensuring equipment 

vendors are closely involved in the 

process of IPX testing from an early stage 

significantly reduces project timelines 

and will enable full service launch sooner. 

4 Recognise the value of community. 

An IPX is about connecting operators 

together with each other and with services 

and applications. When choosing an IPX, 

an operator should consider both the 

range of services provided and the community 

of operators connected. Right now, 

operators may be connecting with each 

other to enable just one or two particular 

services, but in the longer term they are 

likely to want more. 


83

5 Plan roaming connectivity at the same 

time as domestic role out. The success 

of roaming has set a high bar. Users increasingly 

expect all home services to be 

available when roaming, not six months or 

a year after launch. Although the initial 

focus may be on the domestic launch of 

new services such as LTE, consideration 

should be given to roaming of those 

services early on. IPX can enable rapid roll 

out of roaming connectivity. Provided 

operators build IPX connectivity into the 

deployment plans for new services early 

on, roaming revenues can be rapidly 

achieved for new services. 

6 Ensure the IPX service can translate 

between systems. IPX is about enabling 

connectivity and with the rapid roll out 

of new services this increasingly requires 

the ability to bring differing implementations 

of the same service together. For 

example, two operators may have 

deployed different voice switches with 

different SIP-I implementations. An IPX 

should be able to translate between these 

switches, ironing out the differences and 

enabling seamless communication 

7 Chose an IPX with strong Policy and 

Access control. IPX is about enabling 

connectivity, but for operators to be able 

to leverage this, it is vital that they remain 

in control of who can access services and 

what policies are applied to that access. 

It is therefore essential that an IPX 

provides clear control of services and 

does not merely function as a ‘dumb’ pipe 

connecting the various parties. An IPX 

that provides the ‘hubbing’ of services 

such as voice is not only able to increase 

the interoperability of services through its 

ability to ‘translate’ between systems (as 

described in #6). It is also able to control 

which partners are able to access services 

and which originators may connect, as 

well as applying the required policies to 

such traffic. As the telecom world moves 

to LTE and multimedia, services such as 

access and policy management will 

become even more critical. 

8 Select an IPX with strong accounting 

capability. Clearly, IPX must enable 

connectivity of services. But it must also 

ensure that the revenue streams follow 

services. Whether connecting data, messaging, 

voice or other applications, IPX 

has a key role to play in accounting functions 

ensuring payment follows the traffic. 

9 Consider the commercial relationships 

as well as the connectivity. When 

testing IPX connectivity it’s important 

to plan ahead and select the priority 

roaming destinations for a service. 

84

This enables an IPX to be working on the 

roll out of an operator’s roaming footprint 

ahead of the initial connection being 

deployed and tested. This significantly 

shortens the time between the IPX 

connectivity being completed and the 

revenues and service benefits delivered. 

By following this advice you will have what 

you need to make the most out of your IPX 

deployment. Having an IPX that is truly 

multi-service, thus supporting both existing 

services and services on your roadmap, 

operators will be able to realise full costsavings 

and competitive advantage, rather 

than have to make additional investments 

simply to keep step with the pace of change. 

John Candish is responsible for driving the 

company’s IPX business globally. Prior to 

this Candish held positions within Cable & 

Wireless, where he was responsible for the 

development of the GRX and messaging 

Services, subsequently leading the integration 

of the GRX & MMX services into the 

SAP Mobile Services portfolio. 


85


Making The Right 

Connections 

With major investments in 

Singapore, Australia, Africa, 

India, Indonesia, the Philippines, 

Thailand, Pakistan and Bangladesh, 

SingTel is Asia’s largest multimarket 

mobile operator. In July 

2011 the company embarked 

on a trial of IPX, the first step in 

exploring the establishment of 

a private international network 

connecting all the Group 

companies starting with SingTel 

Mobile (Singapore), Globe Telecom 

(Philippines) and AIS (Thailand). 

SingTel — determined to grow the 

business by leveraging scale, reach 

and service innovation — used 

the trial to better understand the 

technology and benefits it delivers. 

Chief among these is connectivity 

to deliver international mobile 

data roaming and voice traffic. 

However, an international private 

network also allows the rapid 

deployment of new applications 

and services, shortening the 

time to market and potentially 

increasing competitive advantage. 

David Ng — Vice President, Regional 

Technical, of SingTel’s International team 

in the Group Consumer organization 

discusses the trial, results and overall 

outlook for IPX in the Asia Pacific region. 

SingTel has recently concluded its trial 

of IPX. Please share the rationale behind 

your decision to test this technology. 

Moving forward, IPX would offer a flatter IP 

network architecture, enabling Voice over LTE 

services and supporting new services like 

RCSe. This is an important consideration 

since OTT players are also moving in the 

direction of Voice over IP services. 

86

In my position, it is part of my responsibility 

to look at technology on the horizon and 

understand what it provides in terms of both 

service capabilities and competitive advantage 

to the business we are operate in. In 

the case of IPX, we wanted to see how we 

can best manage our mobile data roaming 

costs. We identified IPX as a good platform 

to achieve this and looking again to the 

horizon, LTE is also emerging strongly and 

steadily in the market landscape. And this 

also plays a role in our thinking. Moving 

forward, IPX would offer a flatter IP network 

architecture, enabling Voice over LTE 

services and supporting new services like 

RCSe. This is an important consideration 

since OTT players are also moving in the 

direction of Voice over IP services. 

For these reasons, we thought IPX would 

be a good platform. It addresses the mobile 

data roaming problem we originally set out 

to solve and, looking ahead, it might also 

deliver us an advantage when LTE is rolled 

out aggressively across the region. At that 

point, LTE roaming will need to be enabled, 

and IPX is certainly the right platform to 

facilitate LTE roaming. What’s more, IPX 

allows the ability to do a local breakout, 

which naturally provides a better customer 

experience to the roamer. 

So, before we jump onto the IPX platform, 

we conducted this trial to understand its 

capabilities, performance and deployment 

challenges. That is, what kind of quality IPX 

enables when we carry voice and how 

it performs when it carries this traffic 

between two geographical territories. 

Let’s discuss the IPX trial. Where are 

you in the process and what have you 

achieved? 

Originally, we picked three operations 

in three locations — SingTel Mobile in 

Singapore, Globe in the Philippines and 

AIS in Thailand where each operator 

connected to a private international IP 

network provided by SAP Mobile Services 

IPX via the respective local points of 

presence. To date, we have concluded the 

IPX validation test on delivering mobile data 

roaming, mobile voice roaming and 

international IDD voice amongst the three 

operators over the IPX connection. The 

validation test covered a good mix of test 

cases based on SIP-I interconnect (for 

mobile voice roaming and international IDD 

voice), GSMA IR87 (for inter-operator SIP-I 

inter-working) and GSMA IR35 (for mobile 

data roaming). I am pleased to share that 

the test results were positive. 

The IPX trial successfully demonstrated 

the reliability of IPX as a managed private 

IP network that can transport multiple 

services within a single IP connection across 

different geographies. What I can also share 

with you is that — internally — we are 

brainstorming and discussing how to 

take IPX forward. 


87

Global mobile data traffic growth/regions 

MEA has the highest growth rate (104%) from 2011-2016 

APAC* will generate 40% of all mobile data traffic by 2016 

Exabytes per month 

12 

10 

8 

6 

4 

2 

78% CAGR 

2011-2016 

5.88% 

6.54% 

6.83% 

18.18% 

22.56% 

40.01% 

0 

2011 

2012 2013 

2014 2015 2016 

*Includes 

Japan 

Middle East and Africa (MEA) Central and Eastern Europe (CEE) Latin America (LATAM) 

North America (NA) Western Europe (WE) Asia Pacific (APAC) 

Figure 1: Based on data from Cisco Visual Networking Index. Global Mobile Data Traffic Forecast, 2011-2016. 


SingTel clearly has an understanding of 

the benefits of IPX. Interestingly, Asia 

Pacific leads in awareness of IPX overall. 

Why do you think this is? 

As we all know, this region is seeing a shift 

in the market landscape due to the rise of 

OTT players. According to the Cisco Visual 

Networking Index Mobile 2012, Asia Pacific 

is expected to account for up to 40 percent 

of global mobile data traffic by 2016. As a 

result, many — if not all — operators are 

facing margin squeeze due to the scissoreffect 

of diverging mobile data traffic and 

revenues. This forces them to think about 

ways to generate revenues and identify 

new services they can offer to customers. 

At the same time, it’s very important for us 

as operators to manage our bottom line. 

Against this backdrop, cost management 

becomes a key issue. If the IPX platform 

performs and delivers its promises, then it 

will allow us as operators to consolidate and 

88

optimise our IP interconnect for delivering 

packetised traffic outside our network. 

For example, if IPX does indeed allow us 

to consolidate and deliver mobile data 

roaming, BlackBerry and tele-presence via a 

single IP pipe, then it is clearly more efficient 

and cost effective. This is why I believe 

many operators in the region are looking 

into exploring IPX. IPX is also seen as a way 

to ‘future-proof’ the networks and support 

future IP services such as HD services like 

HD voice and HD video. 

We have discussed the business benefits 

of IPX — what are the benefits to the 

customer? 

Take the case of customers who are accessing 

data while roaming. Their Internet traffic 

when they are abroad is actually routed all 

the way back to their home network first. In 

other words, the signalling and payload part 

of the data session is passed to the local 

operator’s network and then back to the 

customer’s home network. 

This presents two challenges. For the 

operator: it’s about how to maintain cost 

effectiveness. For the customer it’s about 

quality of service and the requirement for 

a consistent and good experience no 

matter where they are. 

If you go through IPX, then you can solve 

these issues because you have the control 

and can deliver a desired quality of service 

— a level of service that also delivers a user 

experience the customer will enjoy. And this 

is where the local breakout capability I mentioned 

before comes into play. With IPX if 

you can do a local breakout, which means 

the roamer will be able to enjoy the same 

level of quality as the local customer does. 

It’s a better experience all round. 

Your trial focuses on using IPX to connect 

operations within the group company. 

What is it about IPX that makes good 

business sense in this scenario? 

I think if you take the perspective of a group 

company, a company where it has many 

operations across different countries, then 

there is an incentive to find a way to better 

interconnect the operations with each other. 

At the least it’s about making sure that the 

mutual customer, who roams between the 

If you go through IPX, then you can solve these issues 

because you have the control and can deliver a desired 

quality of service — a level of service that also 

delivers a user experience the customer will enjoy. 


89

different countries that are interconnected 

via IPX, will have a more consistent quality 

service experience. 

Looking back at your recent IPX trial, 

what can you share in the way of key 

learnings, impressions or surprises? 

The findings are positive. Aside from the 

technology, we also learned more about the 

talents and the skills set that we would need 

in a service team in order to offer IPX and to 

support it. The service team plays a very 

important role in delivering the service in 

a timely manner. 

As you pointed out, IPX allows operators 

to control and deliver quality services to 

roaming customers, for example. Looking 

at the range of what an IPX network 

can support — new multimedia services 

or even provisioning services into cars 

— what excites you most? 

Without divulging too much of our internal 

strategy, I would say the type of services we 

are going to offer are likely to be more IP 

oriented. There is a very good match between 

what we can use IPX for and how it can 

benefit us at SingTel as a group operator, as 

well how IPX can benefit our customers. 

The multimedia services are also interesting. 

If the analysts are correct, IPX will drive 

more video, more social sharing and more 

visual content to our phones. Therefore, 

the high quality of voice and the ability to 

exchange video or other visual content 

are turning phones into a medium that is 

more about seeing content and seeing 

people than necessarily just speaking. 

Overall, where do over-the-top service 

providers fit into the IPX landscape? 

Are they a threat, an opportunity or 

something else? 

My personal philosophy is that there is no 

‘forever enemy’. We can compete on one 

hand, but we can also be allies on the other. 

So, yes IPX may play a role in bringing OTT 

players and telecom players together to 

cooperate in a slightly more meaningful way, 

which will also benefit the mutual customer. 

In my view, there are similarities here to 

Open Innovation, an approach and a mindset 

that is all about finding ways to collaborate 

for mutual benefit. 

David Ng is the Vice President (Regional 

Technical) within the International arm of 

Group Consumer at SingTel. In this role he 

drives the regional network initiatives and 

strategies within SingTel to shape technology 

strategy and achieve synergies across the 

SingTel Group. Prior to this Ng was Director 

of Operations at Telkomsel, a SingTel joint 

venture company in Indonesia, where he 

was in charge of network design and 

operational management. 

90


A Brave, New, All-IP World 

by Elena Sacco, Chairman, The Interconnection Working Group (IWG), 

GSMA & Senior Interconnect Manager, TIM 

An open and flexible model for 

service exchange will be part of the 

critical path the industry will travel 

in order to implement Voice over 

IP (VoIP). 

IP eXchange, or IPX, is the industry standard 

solution to solve the interconnect problem 

by setting out common specifications for 

end-to-end IP traffic delivery and quality of 

service. On the market there is a high level of 

awareness and interest in IPX. This is linked 

to the fact that the industry is moving to an 

all-IP environment, which creates the need 

for an interconnection enabler over a private 

secure network, at an affordable price and 

with the guarantee of the required QoS. 

the market and the economy have had 

some impact on contingency plans, 

operator targets and —ultimately — the 

pace of progress. 

Dramatic dynamics 

At first glance, it may seem that IPX is a 

chicken-and-egg situation. But that will 

change dramatically as more operators 

launch IP services. 

To understand the hold-up, it’s important 

to understand the dynamics at play here. 

For mobile operators, moving to an all-IP 

environment means a revolution in communications, 

and this implies high investments. 

Clearly, there are benefits to IPX, but there 

is currently a low level of demand for IPX 

services due to the low number of IP interconnections 

between operators on the 

market. This is because mobile operators 

are not yet launching IP data services on 

a large scale. 

However, this is changing. There is strong 

evidence of a shift right now as the market 

moves toward an all-IP world. But, of course, 

VoIP services are expected to drive the 

move to an all-IP environment that will 

stimulate the use of IPX. 

Nonetheless, several factors, such as 

the existence of VoIP services offered by 

non-telecom players, solutions such as 

Circuit Switch (CS) Fallback, the high cost 

of LTE implementation and the availability 

of LTE devices, are slowing down the 

advance of VoLTE. These same factors are 


91

also slowing the evolutionary path of 

mobile operators towards offering VoIP 

services in general. 

Driving demand 

However, if VoIP services may not be 

considered the imminent driver of IPX deployment 

on a large scale, data services requiring 

a guaranteed QoS might serve to 

stimulate market demand for IPX services. 

Peering matters 

When it comes to IPX, peering among IPX 

providers is an essential element because 

it enables global reachability. Without full 

peering among IPX providers on the market 

there is the risk that IPX services will be 

developed as ‘silo’ solutions. This certainly 

doesn’t serve the better interests of mobile 

operators, or their customers. Solutions 

cannot be offered as ‘islands’, so this is 

exactly what operators must avoid. 

LTE Roaming is the perfect example. With 

the high-speed data transmission enabled 

by LTE, it might be risky to keep on applying 

data pricing plans for roaming traffic based 

on volume or usage per month. Such pricing 

models may, in fact, impact consumers negatively 

as faster data speed will significantly 

increase data consumption. 

New pricing schemes, where charging is 

more in line with the transmission opportunities 

enabled by LTE, may be based, for 

example, on different guaranteed QoS levels 

per different services (and also per application, 

as it may happen in the case of cloud 

services). In this case IPX would be the 

essential enabler, being the only current 

solution for a QoS guaranteed IP interconnection 

able to ensure proper traffic 

exchange between different players on 

the market. 

Peering enables general interoperability 

of services on IPX between operators and 

multiple connections and global reachability 

via one-stop connectivity. In other words 

when full peering among IPX providers is a 

reality on the market, operators, through just 

one contract with IPX providers, can update 

connections to hundreds of operators and 

third-party players around the world. 

Peering also enables the offering of data 

services on IPX at a high QoS and, above 

all, the migration of voice services over IP. 

Indeed, with the migration of voice services 

on IP there is clearly the need to ensure crossborder 

interconnection on a global level. 

Equally important is the guarantee of a level of 

quality related to these voice services, which 

can be applied globally and which is comparable 

to the high level of QoS end-users 

already experience. Worldwide peering makes 

IPX the key enabler of such a migration. 

92

Cooperate and interconnect 

The move to an all-IP world doesn’t only 

present operators with a world of opportunities. 

There is also the increased competition 

from alternative service providers 

offering services to subscribers, creating 

the need for operators to interconnect with 

these players. 

Clearly, the big question is how to implement 

a proper interconnection with these 

parties and find a model that properly compensates 

all the players in the value chain. 

Elena Sacco works within the Industry 

Relations & Roaming Division of Telecom 

Italia, where her areas of expertise include 

business development, Interconnection and 

Roaming with a strong focus on the evolution 

of mobile TLC services. Sacco also 

chairs the Interconnection Working Group 

(IWG), one of the eight permanent Working 

Groups under the GSM Association (GSMA) 

IWG brings together more than 350 

members including mobile operators, 

international carriers, hubbing providers 

and equipment providers. 

There will be many approaches — but one 

common objective. The operator’s task here 

is to find a model of co-existence and 

cooperation that allows them —and other 

players — to achieve their objectives and 

stay relevant. In this case, the IPX network, 

because of all the characteristics highlighted 

above, will be the key solution to support the 

market’s interconnect objectives. 


93


Boosting Trust, 

Building Business 

By Ranjeet Wilkhu, Director, Neucom Solutions 

In some African and the Middle 

Eastern countries, the practise 

of outsourcing international traffic 

management is seen by regulators 

and Ministries of Communications 

(MoCs) as a means to get their 

fair share of revenues from local 

operators. The outsourcing model 

is considered by MoCs as a way 

round the notion that operators 

declare lower levels of international 

traffic than they actually handle, 

resulting in lower payments to 

the local MoC. 

While outsourcing may be a way to collect 

‘true’ revenues, MoCs and regulators have 

to balance between enforcing license 

conditions without damaging competition 

at the consumer level and having a negative 

impact on quality of service (QoS). The two 

operating models gaining traction with 

MoCs are monitoring operator traffic 

streams and outsourcing international 

traffic management to third parties. 

Mixed results 

The first model centers on new controls and 

visibility. Some MoCs have empowered the 

regulator to have access to near real-time 

data for all international traffic — voice, 

SMS, MMS — managed by the local operators. 

To gain visibility into this data within 

the operator network the regulator invests 

in traffic monitoring systems. The information 

gathered by such a system allows the 

MoC to calculate and collect correct amount 

of levy from the operators. A number of 

traffic management and monitoring systems 

tailored to a specific regulator’s 

requirements are available on the market 

to make this an easy task. 

The other business model being adopted is 

around third-party management. According to 

this model the MoC outsources international 

traffic management to an independent third 

party or to an international Wholesale 

Operator. All domestic operators in a given 

country are then required to send and receive 

international calls through single or multiple 

international gateways (switches) managed 

by the third party. 

94

Some MoCs have even gone so far as to 

outsource financial settlements between 

local operators and international operators, 

making the third party responsible for 

billing, collections and payments. In this 

scenario the third party may also earn 

revenue from the financial transaction. In 

addition, the third party may be entitled to 

a percentage of revenue, or be permitted to 

charge a fixed fee plus a share of revenues, 

or gross margin. The third party is also 

responsible for all operator activity, including 

negotiation of operator interconnects 

and traffic routing. 

Under the latter model local operators are 

concerned that their interests and the interests 

of the third party — the company to 

which traffic management has been outsourced 

—are not aligned. Put another way, 

operators believe the third party may be 

more focused on maximising profit for 

themselves than on reducing termination 

cost for the operator, or delivering QoS 

for the customer. 

Clearly, this would have obvious and 

negative repercussions for the operator. 

At one level, an operator suffers a loss in 

revenues. At the other end of the spectrum, 

the perceived lack of attention for QoS could 

result in an increased number of customer 

complaints and an increased burden on 

customer care services. 

IPX solves issues 

When it comes to connectivity across the 

region and with the rest of the world, the 

advance of IPX provides interesting options 

and opportunities. By way of background, 

provisioning connectivity for operators in 

Africa and Middle East can be an expensive 

and a lengthy process. 

The high cost of provisioning connectivity, 

be it via cable or satellite circuits, is driven 

by scarce capacity. At present a large proportion 

of voice and SMS traffic is carried 

Operators believe the third party may be more 

focused on maximising profit for themselves than 

on reducing termination cost for the operator, or 

delivering QoS for the customer. 


95

Providers deliver guaranteed QoS and gain a share of the revenue stream 

$ $ $ 

SP A 

IP Network 

IPX 1 IPX 2 

IP Network 

MNOs 

SLA 

SLA 

SLA 

MNOs 


over expensive TDM networks to and from 

these regions to manage and maintain QoS. 

Connecting to IPX reduces this cost since the 

operator does not have to procure individual 

TDM circuits for each operator interconnection. 

Additional savings are gained from not 

having to send traffic destined for a neighbouring 

country via Europe or the U.S. For 

example, telephony traffic from Iran to Iraq 

is directed to Europe/U.S. first, and then 

delivered to the final destination, Iraq. Therefore, 

two separate expensive TDM circuits are 

used to transport a single call. On IPX, both 

operators may be connected to the same 

IPX, which means the traffic will not 

trombone. Instead, it will be completed 

using single hop. 

Once IPX reaches maturity and creates 

adequate connected communities, then 

an operator connecting to IPX will not need 

multiple connections to multiple operators 

for multiple products. A single connection 

to an IPX will do the job. This is because 

voice calls, SMS, MMS and other traffic 

are carried on the same, single and secure 

network connected point-to-point, thus 

ensuring optimal routing, an improved QoS 

and excellent customer experience. 

96

The needs of MoCs for transparency and 

accountability are also addressed. In other 

words, IPX would provide MoCs or regulators 

access to traffic reporting and monitoring, 

giving them visibility into near real-time 

traffic data. Such information, obtained 

through an operator-independent source, 

would further give MoCs and regulators 

confidence that they are paid their share 

of dues for international traffic. This, in turn, 

would build trust in the system, and remove 

the need to invest in expensive monitoring 

systems, or outsourcing international traffic 

management to third parties. 

and out of the country - visibility that builds 

trust and — ultimately — puts operators 

back in charge. 

Ranjeet Wilkhu is a Director with Neucom 

Solutions, an independent telecoms consulting 

company. His efforts to forge relationships 

with telecom businesses globally allowed him 

to make a major contribution to the successful 

implementation of a program under the 

Iraqi Ministry Of Communications titled 

“International Marketing and Management 

of Voice, SMS and MMS Traffic.” 

In Africa and the Middle East IPX is in an early 

roll out phase. One hold up is the further 

work needed to establish standards and 

encourage acceptance within the operators 

and mobile network operator community. I 

do not expect to see a huge uptake of IPX 

interconnects in Europe or the U.S. in the 

near future. In Asia, the Middle East and 

Africa IPX offers a viable option for managing 

multiple interconnects with a single IP 

connection. This has a number of advantages. 

Chief among these: it would allow 

domestic operators the flexibility to negotiate 

their own termination rates with other 

operators connected to IPX, while maintaining 

QoS. At the other end of the spectrum, 

MoCs and regulators would have access to 

accurate information about traffic flows in 


97


Voice: The Ipx Killer App 

By Richard Midgett, Managing Director, Wireless Business, 

PCCW Limited 

Hong Kong is a vibrant telecommunications 

market where customers 

have come to expect — even demand 

— high-speed, high quality service offerings 

through fixed-line and mobile 

services. Naturally, operators, including 

PCCW, have responded with 

triple-play and even quadruple 

play services. Now, as the region’s 

mobile industry shifts from being 

voice-centric to data-centric, LTE 

has emerged as the foundation of 

operators’ future business. What 

motivated PCCW to launch LTE in 

April, and what services will drive 

adoption? How can LTE both boost 

domestic service and support 

international roaming? To what 

extent is IPX an essential route to 

4G and next-generation services? 

Richard Midgett provides us a 

candid and first-hand perspective. 

PCCW is the largest and most comprehensive 

provider of communications services 

in Hong Kong, where it meets the needs of 

consumer customers and enterprises — 

both local and international — with a wide 

range of services, including 4G/3G/2G 

mobile and public Wi-Fi wireless services, 

traditional and next-generation fixed line 

services, Internet access and broadband 

pay-TV, a wide array of business services, 

as well as large-scale IT solutions. 

Trace the history of PCCW and there is a 

keen and consistent focus on delivering 

value-add to fixed-line and mobile services. 

This approach has allowed PCCW to evolve 

from a franchised monopoly fixed operator 

to become the provider of Hong Kong’s first 

quadruple-play experience. In addition to 

offering local services, PCCW operates international 

carrier services under PCCW Global 

and has recently launched an LTE network 

in the U.K. via its UK Broadband subsidiary. 

Hong Kong is a crowded and competitive 

market where customers have developed a 

tremendous appetite for — and appreciation 

of — data services. Even before PCCW 

launched LTE in April 2012 the residents of 

Hong Kong were long accustomed to having 

the highest quality of coverage and 

extremely fast data connections. At home, 

a majority of the population has access to 

the Internet at speeds up to 1 Gbps via fibre 

services. In fact, the typical offering now is 

considered to be 100 Mbps. On the move, 

98

high-speed access is everywhere, even 

in unusual indoor areas: parking garages, 

elevators, subways — the works! 

Put another way, the Hong Kong consumer 

is accustomed to high fixed-line speeds that 

are widely available. Against this backdrop, 

mobile is not typically a substitute where 

fixed-line access is not available. Instead, 

mobile functions as an extension of the 

high-speed access consumers have come 

to expect in their daily lives. Spoiled by highspeed 

access at home, these consumers 

demand this when they step out of their 

home, and across a variety of devices. 

Highly motivated 

Asia-Pacific, as a whole, is poised to become 

the largest LTE market in the world by 2015. 

Accordingly, Hong Kong is seeing an exponential 

growth in data adoption and in the 

volume of data consumption on the mobile 

networks. Naturally, this creates concerns 

about the availability of adequate spectrum. 

As a rule, more customers on a mobile 

network will cause each user’s speed to 

drop because everyone on that network 

shares it. Keeping pace with this dynamic 

requires operators to increase the capacity 

of the network. At PCCW, acquiring new 

capacity was one of the drivers behind the 

decision to launch LTE. 

Of course, investments in this new infrastructure 

should also deliver the best 

performance possible for our customers. 

LTE is an obvious choice for technology, 

but an adequate supply of handsets that 

make use of that technology in the relevant 

spectrum is also critical. This point cannot 

be overstated. 

Look back to the introduction of 2G (GSM) 

technologies. Operators built the networks, 

but customer adoption lagged behind 

because the handsets failed to deliver the 

quality and performance they wanted. They 

were big, clunky and battery-life was limited. 

It was only after new and improved handsets 

hit the market that we saw a significant 

increase in customer adoption of 2G. The 

launch of 3G followed a similar pattern. 

Although the 3G networks were operational, 

the mass-market move to 3G didn’t happen 

until the handsets were mature. 

And it’s the same with LTE, which is why 

PCCW purposely launched in April with 

a suite of handset products that meet 

customer requirements. Specifically, PCCW 

started offering LTE handsets, tablets and 

dongles from major brands like Samsung, 

HTC, LG and Huawei in the run-up to the full 

commercial launch of its 4G network. Even 

so, LTE handsets are currently a two-chipset 

solution, which means they have the existing 

chipset that is used in 3G phones plus an 


99

additional chipset to extend that capability 

to 4G. The downside: they use more battery 

to power the two chipsets, which either 

impacts the performance or increases 

the size and weight of the handsets. 

Nonetheless in relative terms these 

handsets perform better than priorgeneration 

predecessors, are improving 

rapidly, and are expected to become fully 

optimised by 1Q 2013. 

frequency band for LTE, which could hold 

great promise for roaming in the future. 

Most handset manufacturers will find it 

impractical to support all the frequency 

bands being used globally for LTE, so it 

will be important to identify the key bands 

which represent the greatest common 

denominator for travelers. In view of this, 

I think it’s no mistake that the 1800 band 

is already supported in many handsets. 

LTE Business benefits 

At PCCW our core strength is providing the 

highest quality networks which enable customers 

to communicate with each other 

and with services on the Internet. To this 

end we have built — and continue to build — 

network capability that meets customers’ 

needs for coverage and speed. This is where 

LTE comes in — PCCW made the decision to 

launch LTE to continuing delivering on these 

objectives. Of course, LTE roaming also 

plays a role, but there are challenges. 

It’s still early days for LTE and for those 

customers who are enjoying LTE in their 

domestic markets. So, when these early 

adopters travel out of their domestic 

market, their roaming service will probably 

fall back to 3G networks. But there is no 

ignoring the fact that LTE has already 

created the customer expectation for higher 

quality service — at home and abroad. At 

PCCW it will be a challenge for us to keep 

our customers satisfied because they 

already expect to enjoy the same services 

when roaming that they have at home, and 

that will soon include LTE data speeds. 

Currently, there is a great disparity in terms 

of what frequency bands are being identified 

and made available for LTE globally. While 

the 2600 frequency band is broadly adopted 

as a primary band it is not available 

everywhere. Some markets, including Hong 

Kong, are actively re-farming the 1800 

IPX underpins data 

At PCCW we view IPX as a managed IP 

network, one that provides a reliable quality 

of service and enables operators to connect 

to one another and offer a managed quality 

100

of service to their customers. That is a given. 

It’s what operators deliver over IPX in the way 

of services that becomes the real question. 

At PCCW the first service to be embraced, 

under what was called GRX, was all about 

the capability to have our roaming customers’ 

data traffic routed back to us. This 

arrangement has been essential in 

determining how, and how well, we serve 

our customers. More recently there is 

discussion about local breakout and the 

benefits it delivers. We may indeed see 

arrangements move in this direction, 

but not until the service management 

capabilities are in place to enable operators 

to have their own policy controls. This is 

essential because operators need to have 

‘remote control’ to ensure visibility, 

enforcement of policies and the ability 

to manage service quality. 

But it’s not just about maintaining control 

of the service; it’s also about avoiding 

unfortunate outcomes for the customer. 

Take the example of ‘bill shock’. Customers, 

and some regulators, have called for 

operators to inform roaming customers 

of the amount of data they use — and the 

precise cost — when they are abroad. There 

is also the expectation that operators will 

enforce limits to protect the customer from 

bill shock by suspending data services 

altogether when usage exceeds a predetermined 

threshold. In many cases, 

PCCW being one, this emphasis on 

protecting customer interest is now in place. 

Accordingly, until ‘remote controls’ can be 

put into place, there will continue to be a 

demand for the GRX model of data traffic, 

with the traffic being routed back to the home 

networks, where operators have visibility 

and control. Therefore, IPX is part of an 

on-going business plan for GRX traffic. This 

will certainly be the case for the near-term, 

and will continue until the systems to enable 

local breakout materialise and are tested. 

Voice gets a boost 

But this scenario is not just about the 

benefits to roaming customers using 

data services. There is also an opportunity 

around voice. 

Awareness of the main benefits which 

IPX provides are currently focused on 

future scenarios for LTE roaming customers. 

In other words, the use cases around LTE 

roaming and — later— VoLTE immediately 

come to mind. However, there is a much 

more immediate opportunity to consider: 

how IPX can already enhance today’s 

3G/2G voice roaming. 


101

Consider when a PCCW customer roaming 

overseas receives an incoming call. Today 

this call is rerouted to the visited network 

via a traditional IDD operator. In other 

words, PCCW passes that call to the IDD 

operator, and it is delivered via an uncertain 

number of network connections, albeit 

hopefully with the CLI — or calling line 

identity— so the PCCW roaming customer 

can see who is calling in the first place. 

With an IPX it is possible to redirect this IDD 

traffic and deliver added value. In practice 

the IPX provider can deliver a guaranteed 

quality of service between mobile operators. 

Furthermore, the IPX provider can ensure 

the call-control signaling is reliably exchanged 

between home and visited networks to 

facilitate enhanced home- network control if 

the call is unanswered. Because of this 

benefit, IPX also becomes the obvious first 

choice path for an operator to route voice 

traffic to a roaming customer. 

Put simply, this approach provides the 

operator important visibility into what is 

happening on the other end. Is the subscriber 

busy on the phone? Is the subscriber 

offline? Knowing this for sure equips the 

operator to manage the call, rather than 

just blindly sending it to the IDD operator 

with hopes for the best. 

right now. First, there is more controlled 

routing. As a result, there is also a higher 

quality of service. Second, the operator 

can determine what to do when a call is not 

answered. Should it be connected to voice 

mail, or some other answering services? 

The operator can decide and take specific 

action. With this comes the opportunity for 

operators to offer value-added services to 

roaming customers to manage those calls 

in new and innovative ways. Perhaps the 

roamer would like calls routed to a service 

that records the message and delivers it, 

similar to Bubble Talk. This is the type of 

service travelers could find useful, and 

one that operators cannot deliver so 

easily today. 

Three IPX scenarios 

Broadly speaking, there are three key 

scenarios around IPX involving mobileoriginated 

voice traffic, which offer a varying 

degree of benefit to the home operator. 

Imagine first a scenario where the roaming 

customer makes a local call in the local 

country. If you are the home operator you 

still have to rely on the visited network to 

deliver the call. In other words, IPX doesn’t 

deliver notable benefit. This is not the case 

in the next scenario. 

Thus, IPX enables a number of advantages 

for the operator and the roaming customer 

Imagine, however, that a roamer wants to 

call a number in their home country. In this 

102

scenario there is the potential for the 

visited network to route that call back 

through the IPX to the roamer’s specific 

home network operator, not just back to 

the roamer’s home country. In this way, 

the home network operator is not only 

delivering the call, it is controlling how 

the call is delivered. IPX equips the home 

network operator to manage that call in 

new and innovative ways. 

The final scenario is an IDD call to a third 

country, where the home network operator 

and the visited network operator are dependent 

on other operators to manage and 

terminate the call. Whether or not IPX is 

used in this scenario would be subject to 

an agreement between the operators on 

how to manage such calls. Nonetheless, a 

benefit for that traffic to be routed back to 

the home network, where it can be 

managed, potentially still exists. 

The second scenario, in particular, illustrates 

how IPX delivers benefits to the 

customer by enabling the home network 

operator to enhance quality of service and 

— if they choose —deliver additional value 

-add on top of the service. But it doesn’t stop 

there. There are likely to be cost —or cost 

management — benefits, which the home 

operator can pass along to its customers. 

Clearly, IPX services can take all the guesswork 

out of call delivery control for the 

home network. There are benefits for mobile 

operators and their roaming customers, as 

well as the IDD operators. For IDD operators 

it means modifying their current business 

model to become IPX providers. Underlining 

this shift is the recognition that IPX will be 

the medium for voice communications in 

the future. Granted the IPX business model 

is built around the potential of mobile-tomobile 

data connectivity, but IPX is also at 

the core of the more traditional killer 

app: voice. 

Richard Midgett has over 30 years experience 

in the telecommunications industry. He began 

his career with Cable & Wireless USA, where 

he served in a range of technical management 

roles. After joining Hong Kong Telecom’s CSL 

mobile team in 1989, he served in a variety of 

areas spanning business and product development, 

government policy and regulation, 

and overseeing the commercial business for 

roaming, international operator, and wholesale 

services before moving to PCCW. Mr. 

Midgett has also held active positions in a 

number of industry organisations including 

most notably serving as chairman of the 

GSM Association, chairman of GSM Asia- 

Pacific, and as a member of the board of 

governors of the Universal Wireless 

Communications Consortium. 


103

PART FOUR 

LTE: UNLEASHING INNVOVATION 

TO DELIVER RESULTS

PART FOUR: LTE: UNLEASHING INNVOVATION TO DELIVER RESULTS 

Enabling 4G LTE For All 

By Ed Chao, Senior Vice President, Engineering and 

Network Operations, MetroPCS 

MetroPCS Communications, Inc. — 

the fifth largest U.S. facilities-based 

wireless carrier operating on its own 

network — reached a milestone in 

August 2012, becoming the first 

operator globally to launch Voice 

over LTE (VoLTE) services. The rollout 

of these services marks a win 

in the international race to provide 

next-generation mobile voice and 

paves the way for MetroPCS to 

achieve significant spectral 

efficiencies and enhance the 4G 

LTE experience for customers. 

Innovation and first-mover advantage are 

part of the corporate DNA at MetroPCS 

that has allowed the company to be a 

pioneer and become the U.S. leader in 

no-annual-contract mobile service with 

approximately 9 million customers. In September 

2010, MetroPCS was the first U.S. 

operator to deploy a commercial 4G LTE 

network, a network that today covers the 

majority of the Company’s CDMA footprint. 

MetroPCS began operations just over a 

decade ago. Since then the operator has 

focused on deploying technology that equips 

it to scale its business and satisfy its customers 

with reliable, robust and value-driven 

services. Naturally, the decision to deploy 

LTE also had its roots in that strategy. 

Extracting value 

We at MetroPCS knew we needed to build 

our future on a technology that would deliver 

long-lasting capability and competitive edge. 

With three key benefits in mind, MetroPCS 

started down the path to LTE. 

Soon customers will feel limited by these vertically 

integrated application ecosystems and content 

ecosystems. That’s when MetroPCS will leverage 

rich communication services (RCS) to provide 

customers with a unified experience that cannot be 

achieved with today’s OTT services. 


105

First, LTE is a global standard within 

the 3GPP ecosystem. Therefore, it would 

allow MetroPCS to benefit from economies 

of scale. It would also ensure access to a 

large supply of smartphones at attractive 

and affordable prices, meeting the unique 

requirements of our customers and 

increasingly important demand of value 

-conscious consumers. 

Second, LTE can squeeze more capacity 

out of spectrum. In the case of MetroPCS, 

this would support our own aim to refarm 

spectrum and achieve efficiencies. LTE will 

allow the company to convert 2G airwaves 

to 4G, opening capacity for new customers 

and new services. 

Finally, it was clear that LTE would enable 

MetroPCS to send voice calls and provide 

better voice quality in the process. 

After carefully weighing available options , 

we decided that LTE was the technology 

that would best complement our capabilities, 

equip us to serve our customer base, 

and ultimately, allow us to be the 'David' 

among the four other ‘Goliaths’ in 

the U.S. 4G mobile market. 

Delivering value-driven services 

LTE provides MetroPCS with the capabilities 

to stand up against the competition while 

also allowing us to be agile and deliver on our 

chief value proposition: to deliver service that 

is predictable, simple and affordable. This 

proposition resonates with our customers' 

desire for easy to use, value- driven services 

and a better mobile experience. 

MetroPCS’ key theme began as delivering 

“Wireless for All,” reinforcing our aim to 

provide our customers with predictability 

and simplicity when it came to their 

wireless service. We achieved this 

through offering complete transparency 

by including taxes and regulatory fees for 

unlimited voice, text and data packages. 

It also gave customers a comfort level 

because they could be certain there would 

be no surprises in their monthly bill. 

In 2011, in line with the rollout of LTE, 

MetroPCS took this theme and campaign 

to the next level and launched the second 

chapter of its Wireless for All strategy –, 

aptly called “Android for All,” which was also a 

world-first. Android for All aimed at providing 

our no-contract customer base an Android 

phone and a great smartphone experience 

at an affordable price — namely, under $100. 

106

throughout our major markets, which 

comprise 11,000 cities and towns. 

Figure 1: Based on data from MetroPCS. 

LTE (and more) for all 

Fast forward to mid-2012, when MetroPCS 

marked a new and successful chapter in its 

evolution. Specifically, MetroPCS launched 

“4G LTE for All,” a campaign to promote the 

U.S. debut of an unlimited 4G LTE data plan 

that bundled unlimited voice, text and data, 

for just $55 per month. The offer is coupled 

with the lowest priced 4G LTE smartphone 

ever launched at $129. 

With these services, 'David' once again has 

a leg up on the 'Goliaths' in the marketplace. 

MetroPCS is able to maintain a competitive 

edge by offering 4G LTE for All because of 

the early decision to make the move from 

CDMA to LTE. To date, MetroPCS has 

completed 97 percent of its LTE coverage 

The beauty of this rollout was the alignment 

between strategy and tactics, and how 

industry forces are converging to deliver 

significant business benefits. In addition 

to being first to offer 4G LTE at unmatched 

affordability, MetroPCS was also the first in 

the world to launch a commercial voiceover-LTE 

(VoLTE) service. This is significant 

for several reasons. First, by converting 

voice to data, VoLTE makes better use of 

our radio spectrum. Second, it allows for 

better voice quality for our customers. 

Finally, VoLTE is a technology that will 

also provide the basis for future RCS (Rich 

Communication Services) offerings later on. 

Rich services, just in time 

MetroPCS has worked hard to provide 

customers 4G LTE technology and enable 

a great user experience that incorporates 

fast speeds, affordable phones and the 

latest technology. We are focused on what 

we do best, namely offering communications. 

That said, it is difficult for a smaller 

operator like MetroPCS to provide everything 

a customer wants. To ensure that 

we meet our customers’ needs, we want 


107

We decided that LTE was the technology that 

would complement our capabilities, equip us to 

serve our customer base and ultimately, allow us 

to be the ‘David’ among the four other Goliaths 

in the U.S. 4G mobile market. 

to make it possible for our customers to 

get content, apps and services that we are 

not able to offer, and this is where Android 

comes in to provide customers with a wide 

choice of apps and content they can access 

and enjoy on their smartphones. 

The same approach applies to communications. 

Customers should be able to choose 

and to use the services they want. It's up to 

them whether they use Skype, Google Voice 

or Facebook. MetroPCS supports this 

variety of Over the Top (OTT) services to 

drive a desire among customers for the 

interoperability of these services. 

Imagine a customer on Facebook, who has 

a good friend on Google+. The two friends 

can't communicate freely using those platforms 

because they don't use the same 

application. Soon customers will feel limited 

by these vertically integrated application 

ecosystems and content ecosystems, and 

MetroPCS will leverage rich communication 

services (RCS) to provide customers with a 

unified experience that cannot be achieved 

with today’s OTT services. 

Customers will be free to communicate with 

anyone they want, regardless of the application 

they use. RCS will bridge this divide 

between applications and extend the user 

experience customers have with MetroPCS 

on voice and text to the next generation of 

communications services. 

In a way, it's almost as if history repeats 

itself and takes us back to the early 2000s 

when there was no SMS interoperability 

because operators wanted to make sure 

they could differentiate their services. 

As we now know, SMS interoperability 

unleashed a lot of value for operators and 

their customers. And we see the same 

potential with RCS. 

108

Unleashing value 

Back to the future 

Against this backdrop, the goal at MetroPCS 

is to rollout RCS to its markets and educate 

our consumers so that we can deliver a 

great user experience. MetroPCS also wants 

to work with partners — and competitors — 

to drive more rich communication services 

across the ecosystem. To this end, 

MetroPCS plans to launch an initial set of 

RCS services later this year and then move 

rapidly to RCS 5. 

One other important part of MetroPCS’ 

plans going forward is 4G LTE roaming. 

There are some challenges around the 

establishment of agreements that must be 

overcome in order for MetroPCS and other 

operators to move forward. However, this 

situation will change the next 12 – 18 

months once agreements are in place. When 

these issues are resolved, and operators 

have a common foundation on which to 

enable LTE roaming across the ecosystem, 

we will have a clear path to deliver additional 

value for our customers. It's here that IPX 

provides the necessary foundational 

element to this strategy, allowing MetroPCS 

to connect with roaming partners, both 

domestically and internationally and scale 

up quickly. Another benefit of IPX is the 

interoperability it facilitates. 

The pace of change is only accelerating, 

and the impact on mobile is profound and 

often unpredictable. Just five years ago it 

seemed the appeal of smartphones would 

surely be limited to an audience of affluent 

early-adopters willing to spend $500 on 

a device and $200 a month on limited 

rate plans. 

Today, smartphone penetration in the U.S. 

market has passed the 50 percent milestone 

(with total mobile device saturation at 

more than 105 percent) — and that doesn’t 

count the increase in tablet shipments and 

usage. What's more, it is now typical for 

people to have multiple devices. As a result, 

mobile operators have introduced shared 

data plans and packages that allow people 

to have and use a multitude of connected 

devices on their terms. 

What will happen another five years from 

now? There's no way of knowing. But it's 

important to prepare now, which is why 

MetroPCS has consciously and consistently 

made technology decisions and investments 

that allow us to be agile and flexible. 

MetroPCS built the foundation for our future 

when it made the early decision to move to 


109

4G LTE. Today, we’re beyond the heavy 

lifting, and from here it's about adding 

capacity so we can continue to evolve 

LTE. This is where policy control becomes 

essential to guarantee our customers have 

a certain level of quality of experience, 

regardless of the application they may 

be using. 

Clearly, MetroPCS is delivering on our 4G 

LTE vision that is built on the decision to 

deploy LTE. The capabilities are in place 

to serve and retain our customers, remain 

relevant and stand up to the 'Goliaths' 

for years to come. 

Mr. Chao joined MetroPCS as Senior Vice 

President Engineering & Network Operations 

in September 2008. Prior to joining 

the company, Mr. Chao served as Vice President 

Product Management at Alcatel- 

Lucent in the CDMA Networks Business 

Division. He held a variety of other positions 

at Alcatel-Lucent, including Business Development 

and Strategic Planning, as well as 

conducting research on wireless applications 

in Bell Labs. Prior to Alcatel-Lucent, 

Mr. Chao worked with Nortel/ BNR where he 

was primarily involved in defining front-end 

requirements and standards in support of 

the company’s entry into CDMA. Mr. Chao 

holds a MBA from Columbia University, a 

MS in Electrical Engineering from Georgia 

Tech, and a BS in Electrical Engineering 

from Rutgers University. 

110


Fighting Smart To Win Big 

By Madan Jagernauth, Vice President, Marketing & Strategy, 

Mavenir Systems 

In the mobile industry nothing 

excites analysts and investors as 

much as disruptive technology that 

can potentially change all the rules. 

They are in awe of technology that 

can be labeled as a “game-changer,” 

or can be seen to “re-write the 

rules” that came before. Disruptive 

technology spells opportunity and 

paves the way for new players. 

But not all players welcome the 

tremendous change it brings. 

Network operators, for example, 

would rather see disruptive technology 

integrate smoothly, and 

offer up business opportunities, 

not problems. 

The Apple iPhone, the smartphones from 

other manufacturers that followed, and the 

app store model that swept in behind are all 

developments that can certainly be classified 

as disruptive. Granted these innovations 

were quickly absorbed into the overall 

mobile ecosystem, laying the groundwork 

for a new phase of growth and innovation 

around smartphones, mobile apps and an 

ever-growing array of connected devices. 

But the impact of these disruptive technologies 

on the operator business models was 

profound. The space was shaken to its core 

before anyone in the industry could react. 

In fact, the advance of smartphones paved 

the way for the most potentially disruptive 

development of all: a whole raft of new, 

so-called Over the Top (OTT) competitors 

and services that could marginalise 

operators in the revenue chain. 

It [RCS] capitalises on the operators’ core 

proposition of ubiquity, reliability and reach, 

providing a common approach to a set of new 

value-added services that operators can offer 

on existing 3G infrastructure, as well as future 

LTE networks. 


111

Number of mobile VoIP users (millions) 2010-2012 by eight key regions 

120 


Rest of Asia Pacific 

Indian Sub Continent 

Far East & China 

Central & Eastern Europe 


Latin America 

0 

2010 

2012 

2012 

North America 

Figure 1: Source: Juniper Research. (1) 

Connect the dots, and the swift advance of 

smartphones, mobile apps and new services 

have changed the rules of the game forever. 

in the game doesn’t require massive investment 

in long-term infrastructure overhaul. 

The good news: the game just started. The 

same disruptive technology — and the new 

business models it enables — offers operators 

a way to get back in the game. And if 

they develop and deploy the right strategies 

they can even move back up to the top of 

the revenue chain. Better still for an industry 

that was created through the vision of 

worldwide standards, this disruptive technology 

has created a new space that is big 

enough for everyone. What’s more, getting 

Get rich quick 

Over the past years, the GSMA has invested 

time and resources to enhance its Rich 

Communication Suite (RCS) concept, aimed 

at allowing mobile operators to offer innovative 

and competitive services. RCS builds on 

the universal success of the GSM standard 

and is an opportunity for operators to reinvigorate 

and expand their product and 

service portfolios. It capitalises on the oper- 

Footnote 

1. www.juniperresearch.com/reports/mobile_voice_strategies 

112

This cloud-based approach to delivering 

Voice, regardless of data path, will enable 

operators to jumpstart deployment of 

enhanced services. 

ators’ core proposition of ubiquity, reliability 

and reach, providing a common approach to 

a set of new value-added services that operators 

can offer on existing 3G infrastructure, 

as well as future LTE networks. 

RCS will allow operators to fight back 

against OTT players by enabling them to 

move beyond traditional voice, text and 

data services to offer new services such as 

group instant messaging or chat, live video 

sharing and file transfer across any device, 

on any network, with anyone in a mobile 

address book. RCS will enable operators to 

provide services that meet the increasing 

requirements of today’s hyper-connected 

consumer because they are completely in 

sync with how people share their content — 

and their lives — with each other via laptops, 

tablets and smartphones. 

For operators, and their customers, RCS 

is a compelling proposition. RCS also enjoys 

the support of the several mobile ecosystem 

players. It has the global support of the 

operator community and it is also embraced 

by many of the major handset vendors, 

companies that have committed to the 

project and are embedding RCS services 

onto their latest handset models. 

Fast track 

Before operators can launch RCS services 

and reap the benefits, they will need to 

implement some changes within their 

network. One key change will be the implementation 

of IMS but not all operators are 

ready to move forward on this. 

Clearly, there are RCS services whose 

deployment is dependent upon the roll-out 

of LTE networks. Fortunately, the advent of 

cloud-based solutions offers operators a 

short-cut, allowing them to offer RCS-like 

services starting today, without IMS. 


113

Take the case of operators looking at 

Voice over LTE as a way to compete against 

services offered by the VoIP players such as 

Skype and Viber. Rather than wait for the 

roll-out of their LTE networks (necessary for 

VoLTE), these operators can start fighting 

back now by migrating to Voice over Wi-Fi 

(VoWi-Fi) using the same voice (and video) 

call control infrastructure that is needed for 

VoLTE and incidentally, the same infrastructure 

that supports Voice over HSPA 

(VoHSPA) in the future. 




enhanced services. In fact, the cloud can 

become a fast-route-to-market service 

delivery platform for a host of operatorprovided 

fully integrated RCS style services, 

including messaging. 

And there are other advantages to consider. 

Group messaging services like Viber not 

only overtake the operator network, they 

also access information stored in the address 

book on the device, and use this to 

show users who else among their contacts 

has Viber and can make a call using the app. 

This integration plays in favor of OTT 

players, making it easy to find and call 

contacts using the same software. On some 

smartphones this has been automated so 

that the simple act of making a call triggers 

the question: “Do you want to use Skype, 

Viber or the Phone?” 

However, operators shouldn’t only be concerned 

about the loss of the connection 

with the customer, or the impact on their 

position as the go-to trusted supplier of 

voice services. 

Research shows that OTT-provided VoIP 

services hardly use bandwidth effectively. 

In fact, they typically occupy about 25 

percent more bandwidth to handle traffic 

than operators could achieve using 

VoWiFi or VoLTE. 

There is no shortage of sources that use 

significant amounts of bandwidth. Given 

the demands on mobile data networks, the 

pressure is on operators to find ways to save 

capacity and avoid a bandwidth crunch. Put 

another way, operators must find ways to 

free up capacity, and opting to deliver 

messaging service using VoMBB is clearly 

a path operators should seriously consider. 

In exploring the many compelling reasons 

why operators should explore the RCS-style 

services they can deliver now by using a 

cloud-based service delivery model, let’s not 

forget the key competitive advantage these 

services can deliver. Indeed, a prime driver 

114




enhanced services. 

and benefit of RCS is the level playing field 

it can create. This is a positive outcome 

because RCS effectively equips operators 

to stand up to the OTT players. 

The benefits of this approach can already be 

seen in countries such as Spain. Operators 

there jointly launched RCS services under 

joyn, a new consumer-facing brand 

developed by the GSMA for RCS. 

Smooth moves 

The GSMA is taking a market-by-market 

approach to enable a smooth launch of RCS. 

In practice this means working with a group 

of operators to ensure the full ecosystem 

— including the necessary network infrastructure 

and handsets — is in place 

across each market. 

As a result, all operators in a particular 

market can be positioned to launch 

RCS services at the same time. More 

importantly, the RCS promise of crosshandset 

and cross-network compatibility 

can be supported. 

While RCS has created a level playing field, 

it has not changed the business dynamics 

that separate the market-leaders from the 

also-rans. The task now for those operators 

is to market and deliver joyn services, a 

goal that forces them to compete headon 

against both the OTT players and each 

other. Significantly, the transition from 

working together to speed market implementation 

to competing against each other 

for market success has been virtually an 

overnight process. 

Against this backdrop, we believe operators 

can benefit from disruptive technology — 

and beat the competition at their own game 

— provided they make the right choices. 


115

But they shouldn’t wait to innovate. 

Operators that make the move to deliver 

RCS-style services now by using a cloudbased 

platform over their existing infrastructure 

will have a head start in the 

marketplace. But it’s not just about 

introducing RCS services first, operators 

will also gain valuable and practical 

experience that will help them maintain 

their competitive edge against both OTT 

players and local market rivals. 

Madan Jagernauth has 20 years experience 

in the wireless industry. As a mobile broadband 

pioneer, Madan managed wireless 

access products from GSM/GPRS to WiMAX 

and LTE. Prior to joining Mavenir, Madan was 

with Huawei for four years where he held 

responsibility for wireless marketing and 

product management, and mobile broadband 

solutions, with Nortel Networks for 21 

years and Honeywell for 9 years. 

116


Positioning LTE For Success 

By Declan Lonergan, Research VP, Yankee Group 

Research underlines the pivotal 

importance of LTE. But success 

with LTE is not dependent upon 

how operators implement the technology. 

They must also succeed in 

how they launch and communicate 

their offer in the marketplace. To 

guide operators as they define their 

approaches we have identified six 

ways to position LTE in today’s 

data-centric world. Whilst this 

is not an exhaustive list, it does 

introduce needed clarity into the 

increasingly murky discussion 

about this technology and the 

benefits it delivers. 

No. 1 for Tablet Users 

Pitch LTE as the preferred connectivity 

solution for tablet owners who want more 

than patchy Wi-Fi service. Keep in mind that 

tablet owners differ — both in demographics 

and behavior — from non-owners. Understanding 

these differences allows operators 

to cater their LTE packages to tablet-owners, 

a demographic that clearly sees the 

value in robust and reliable connectivity. 

Who are the tablet-owners? Our research 

shows they are: 

Younger. In fact, tablet owners today are 

more than 10 years younger on average 

than non-owners. 

More affluent. The average tablet owner 

earns $70,000 per year and has an annual 

household income of $87,000. The average 

non-owner earns $56,000 per year and has 

an annual household income of $66,000. 

Smartphone-enthusiast. Respondents 

who own a tablet are 31 percent more likely 

to own a smartphone than people who 

don’t yet own a tablet. 

In our view, tablets plus LTE is a match 

made in heaven. Against this backdrop, 

operators that position LTE as the ideal 

connectivity solution for tablets are on the 

right track. Additionally, operators have the 

opportunity to establish their company (and 

their brand) as THE number one choice for 

this discriminating demographic. 

And let’s not forget the chance to attract 

customers who are migrating their PC 

behavior to tablets and therefore need 

to get online using their tablets. Connect 

the dots, and a market leadership position 

awaits smart operators that grab hold of 

this opportunity and make it a central part 

of their marketing and communications. 


117

No. 1 for Cord-Cutters 

No. 1 for Families 

Establish LTE as the answer for customers 

looking to discontinue their land-line 

conn-ections and move to a mobile-only 

lifestyle. As we know, 3G-based mobile 

broadband may have been positioned as 

a viable alternative to land-line services, 

however, its performance is hardly on a par 

with fixed broadband. LTE changes all the 

rules, allowing operators to provide customers 

the promises of an untethered lifestyle 

and position themselves as the go-to 

company for cord-cutters in the process. 

The timing is perfect as consumers are 

already begin-ning to substitute mobile for 

fixed broad-band, even in 3G scenarios. A 

2011 survey commissioned by U.K. communications 

industry regulator Ofcom, for 

example, revealed that 44 percent of U.K. 

households with a mobile broadband 

service had discontinued their land-line 

broadband connection. Significantly, the 

highest instance of mobile-only broadband 

was among households at the lower end of 

the socio-economic scale. This sends a 

clear message to operators that LTE pricing 

must be suitable to the needs of these 

price-conscious customers. Prepaid plans 

and price-transparency are important, and 

— if operators get the pricing and packages 

right — then they can count on attracting 

cust-omers eager to cut their cords and 

control their costs. 

Focus on presenting the family unit — or 

similar groups — with a subscription offer 

they can share. The concept of offering 

multi-user or multi-device price plans has 

gained significant traction and attention 

during the first half of 2012. This trend is 

pronounced in markets such as the U.S., 

where the state of LTE services is relatively 

advanced. This is not yet the case in Europe, 

where operators plan their LTE launches 

for later in 2012 or 2013. Clearly, it makes 

good business sense for European operators 

to follow the U.S. example and make 

multi-device plans a core part of their offers. 

The result is a proposition that covers the 

bases to deliver households improved 

price-certainty, thus enabling operators to 

differentiate their LTE offers from existing 

3G services. Granted mobile services have 

traditionally been purchased and consumed 

by individuals, but this is changing. The convenience 

and cost advantages of sharing 

data allowances across multiple devices will 

no doubt encourage more Europeans to 

explore family plans. Operators should get 

ahead of this potential demand, and 

promote their family-friendly LTE services 

from day one. 

118

No. 1 for Prepaid 

No. 1 for Roaming 

Adapt your offer to the shift in prepaid — 

fast. While the lion’s share (62 percent) of 

all mobile lines in Europe are prepaid, these 

services are under pressure. In fact, the 

erosion of the prepaid base is particularly 

noticeable in markets like the U.K., where 

prepaid services accounted for only 50 

percent of all mobile lines at the end of 2011, 

down from 65 percent in 2007. Naturally, 

mobile operators prefer to deliver postpaid 

services, catering to a customer segment 

that guarantees steady ARPU and lower 

churn rates since customers are locked into 

a contract. But mobile operators can’t take 

the easy way out. When it comes to LTE, our 

advice to operators is simple: ignore prepaid 

at your peril. Prepaid has an important role 

to play in LTE, especially as consumers 

move from having just one mobile phone to 

adding connected devices such as laptops, 

tablets and games consoles. For costconscious 

customers who need more than 

Wi-Fi connectivity for this array of devices 

prepaid LTE fits the bill nicely. To take full 

advantage of this opportunity operators 

should partner with device manufacturers 

to offer products with embedded LTE and 

the option to connect via prepaid. A good 

example is Lenovo, which recently introduced 

a 3G version of its ThinkPad laptops. 

Such offers are precursors to what we can 

expect with LTE. Smart operators will recognise 

the opportunity here to establish themselves 

as the No. 1 choice for prepaid LTE. 

Cash in on the confusion around data 

roaming. Consumers’ continued uncertainty 

about data roaming charges, as well 

as recent initiatives by European regulatory 

authorities to reduce roaming fees are 

shining a spotlight once again on the data 

roaming issue. The public discussion 

presents operators with an opportunity to 

aggressively pursue a market leadership 

position. But to get there from here operators 

must first equip themselves to deliver 

fair and transparent data roaming pricing. 

They must also ensure customers have 

access to all the service features they enjoy 

on their home networks, including Quality 

of Service and class-of-service parameters. 

What’s more, the rapid migr-ation to all-IP 

traffic in domestic mobile networks will 

make IP eXchange (IPX) a natural choice for 

LTE operators as they work to ensure their 

customers’ experiences remain consistent 

— even when customers travel beyond their 

home networks. 

Lessons Learned From 3G 

Whether operators pursue one (or more) 

of the approaches we have presented— 

or come up with their own strategy — the 

end-game is all about successfully positioning 

LTE for the future without repeating the 

mistakes that marked the past. 


119

Prepaid was essential to early 3G success 

6.0% 

3 Italia 

5.0% 

3 U.K. 

Share of national 

mobile customers 

4.0% 

3.0% 

2.0% 

Feb 2004: U.K. prepaid 

3G service launched 

Aug 2004: 36% of U.K. 

3G users were prepaid 

1.0% 

0.0% 

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 

Figure 1: Source: Yankee Group, 2005. 

The technology won’t sell itself. An LTE 

badge won’t mean a lot to consumers. They 

didn’t care much about 3G until they could 

understand how it improved their connected 

experiences. Operators should therefore sell 

the benefits of LTE (or 4G), not the acronym. 

Expect the unexpected. While most 

expected the promise of video telephony 

to move 3G devices off the shelves, it was 

really the lure of better mobile access to 

Facebook, YouTube and other Web 2.0 

content that drove the move to 3G. LTE is 

sure to produce a similar surprise motivator. 

Prepaid is essential. 3G adoption was 

severely hindered in the early stages due to 

limited availability of prepaid (see Figure 1). 

When it comes to LTE, prepaid should not 

be an afterthought. 

Handsets matter. Once operators 

improved the quality and choice in their 3G 

handset portfolios, they saw a dramatic 

120

Many US consumers still don’t understand what 4G is 

Yankee Group's US Mobile Broadband Survey, April 2012. 

Are you aware of, and do you have a basic 

understanding of 4G? (n=601) 

I have never heard of the term 4G 

9% 

I have heard of the term 4G 

but I don’t understand it 

35% 

I have heard of the term 4G and I 

understand what it means 

38% 

I am anxiously awaiting 4G products 

8% 

I am already using 4G 

10% 

Figure 2: Source: Yankee Group. 

increase in 3G adoption rates. It’s the same 

for LTE. From day one, operators must 

ensure a good supply of desirable LTE 

phones for the mass market. 

Roaming must be addressed. 

Frequent instances of bill-shock, caused 

by customers’ unintended use of 3G-based 

data services while traveling abroad, created 

negative headlines and disgruntled customers. 

Operators must do a better job with 4G 

roaming by proactively helping customers 

to manage their consumption and spending. 

Clarity Is the Key to Success 

The approaches we outline here are really 

only a sample of the options available to 

operators seeking to position LTE in a way 

that both benefits customers and their 

company bottom line. 


121

Tablet owners and non-owners have different profiles 

Tablet owner 

Tablet non-owner 

Demographics 22% 

78% 

Average age 

34 

45 

Gender 

Male 56% 

Female 44% 

Male 49% 

Female 51% 

Average age by gender 

36 32 

M F 

43 46 

M F 

Minutes per day spent 

on mobile internet 

22 

19 

Minutes per day spent 

in mobile apps 

24 

22 

Mean personal income 

$70 000 

$56 000 

Mean household income 

$87 000 

$66 000 

Smartphone owners 

81% 

50% 

Figure 3: Based on data from Yankee Group. Consumer Survey, 2012. 

122

No matter how operators choose to market 

their offers, success depends on their ability 

to position LTE (and the benefits it delivers) 

clearly and consistently in the minds of their 

customer base. This is a tall order since 

research shows many consumers simply 

don’t know what LTE (4G) is, let alone the 

services it supports. (see Figure 2). 

Read between the lines, and boosting 

awareness (not use) is the chief challenge 

operators face. The pressure is on 

operators to take the lead in educating 

consumers about the real-life benefits 

of LTE and show how LTE is superior to 

existing 3G services without losing the key 

message in a sea of confusing acronyms 

and technology-speak. Operators cannot 

afford to fail in this basic task. 

Declan Lonergan is a vice president of 

Yankee Group’s research team and 

produces and manages research that 

improves service providers’ and technology 

vendors’ business results. Lonergan has 20 

years of experience in the communications 

industry. He spent several years with BT, 

where he held management positions in 

radio systems procurement and access 

network planning. 


123


Breaking Down Borders: 

Getting The Most From 

LTE Roaming 

By James Middleton, Managing Editor, Telecoms.com 

Against the backdrop of the economic 

slowdown and its debilitating 

effect on the global roaming 

market, the advent of Voice over 

IP (VoIP), which marks the end of 

an era for circuit-switched voice, 

represents the most significant 

industry shift to date. 

Whilst the majority of voice traffic today is 

still generated by legacy circuit-switched 

networks, packetised voice will eventually 

become the norm, driven by the transition 

to LTE. Shifting TDM traffic to packetised 

networks opens up opportunities to extend 

communities and services between the 

wired and wireless worlds, but this is not 

without its challenges. Without automated 

end-to-end monitoring in place and a proper 

understanding of the teething problems still 

present in the nascent area of LTE roaming, 

operators might underestimate the 

challenges they need to address. 

In the early days of mobile roaming operators 

would strike bilateral agreements between 

their networks to cater to the needs of their 

roaming customers. But this approach had 

its limits. To meet customer demand and 

increase efficiency specialist providers set 

up roaming hubs to ease the burden on the 

operators and improve scalability. 

The trend now is to look at GRX as part of 

the IPX (IP eXchange) offering. In this 

scenario mobile operators use a specialist 

supplier that manages the hub to which the 

operator community connects. The hub 

solution is a remedy for roaming issues 

going forward, particularly as the barriers 

between roaming and interconnect blur with 

the introduction of LTE and the flexibility 

that it introduces. 

Operators are switching their traffic to the hub 

because it’s more efficient and provides them 

with greater control over the management and 

outsourcing of interconnects into the hub. 

124

Breakthrough progress 

The first hubbing deployments broke significant 

ground by paving the way for a more 

connected global mobile industry. The IPX 

extends this concept by enabling deeper 

connectivity for fixed, wireless and internet-based 

service providers in a much more 

open and flexible environment. 

Today these hubs allow networks to extend 

their footprint and services to countries 

where they do not have bilateral deals in 

place, but it’s not just about reach. Operators 

are switching their traffic to the hub because 

it’s more efficient and provides them with 

greater control over the management and 

outsourcing of interconnects into the hub. 

In terms of interconnect, third-party supplied 

voice and messaging services will be available 

from day one on LTE networks. These 

services could also potentially show improved 

QoS compared to 2G and 3G, whilst benefiting 

from lower regulated data charges. 

On one hand, the traditional operator menu 

of services — which includes voice, SMS 

and data roaming — are necessary to avoid 

a massive shift of traffic to third parties, 

including OTT service providers. On the 

other hand, inter-working with OTT service 

providers introduces a wealth of commercial 

opportunity for mobile operators. Rather 

than seeing these new entrants as a 

competitive threat, many mobile operators 

are beginning to understand that they can 

benefit from carefully structured and 

managed partnerships with OTT players. 

The key for mobile operators is to offer 

connectivity to these rival providers without 

giving away control of their network assets. 

Fortunately, operators can leverage their 

fixed and mobile network assets through 

IPX, so successful interaction with OTT 

players is just a case of finding the right 

business model. 

As Michel Van Veen, Group Manager, 

Product Management, at SAP Mobile 

Services, observes: “If an LTE operator 

starts to offer LTE roaming to customers, 

the only way to establish a short time to 

market is to use a hubbing solution.” Thus, 

if operators were to only establish roaming 

agreements with a small number of trusted 

roaming partners, then they wouldn’t necessarily 

use a Diameter hub in the middle. But, 

he stresses, “in reality operators need to 

establish roaming agreements with 

hundreds of their peers and hubbing is the 

only way to scale up quickly and efficiently.” 


125

Rather than seeing these new entrants as a 

competitive threat, many mobile operators are 

beginning to understand that they can benefit 

from carefully structured and managed 

partnerships with OTT players. 

Overcoming obstacles 

Some operators may think they can control 

their network end-to-end and beyond, thus 

satisfying the needs of their roaming customers. 

However, this is a mammoth effort 

that can be fraught with challenges and 

commercial headaches. If the operators 

insist on running this in-house, then the 

requirement for a fully managed, specialist 

service to share the burden becomes all the 

more pronounced. After all, failing to offer 

a high quality of service in global roaming 

services, results in a drop in roaming usage, 

and a loss of roaming revenue. Another 

outcome is unhappy customers, which 

results in churn and higher customer 

service costs. 

The first successful deployments of LTE are 

in place and rollouts are growing at a rapid 

pace. Clearly, LTE is reaching a stage of 

maturity where technical challenges of 

deploying LTE are no longer a barrier. Now 

it’s up to the operator community to overcome 

the last hurdle and develop a commercial 

strategy that wrings value out of 

LTE to enable roaming services that benefit 

customers and drive positive results for 

everyone in the ecosystem. 

James Middleton has over 12 years’ experience 

of writing and reporting on the telecoms 

and tech sectors. Middleton has also 

helped to build and launch several successful 

websites with a keen focus on content 

management and community building. 

126

PART FOUR: LTE: UNLEASHING INNOVATION TO DELIVER RESULTS 

Video Communications: 

“A Perfect Storm” 

By Ramsey Masri, Vice President, Sales & Alliances, Aylus Networks 

“You’re headed right for the middle 

of the monster.” These were the 

words of Linda Greenlaw, the boat 

captain in The Perfect Storm, a 

gripping film released in 2000. 

The true-life drama recounted the 

tragic fate of the fishing vessel 

Andrea Gail in 1991, when weather 

conditions combined to form a killer 

storm in the North Atlantic. The 

details of this unusually intense 

storm pattern were captured in 

computer-generated graphics, 

detailing the relentless power of 

a perfect storm and what happens 

when seemingly routine shifts in 

wind and temperature come 

together to produce a monster. 

Today, we are seeing a similar alignment of 

key conditions in the video communications 

landscape, where the rapid pace of change 

and the interplay of supply and demand are 

combining to generate the mobile industry’s 

own Perfect Storm. 

In the last few years we have seen a seismic 

shift in consumer acceptance and use of 

mobile video. Smartphones and tablets 

— popular devices equipped with video 

cameras — have reached the mass-market 

tipping point. 

We have also seen a dramatic change in how 

consumers use Skype to do more than just 

make voice calls. In fact, Skype now reports 

that over half of all Skype calls now progress 

to video. Likewise, we have seen a slew of 

communications services, including Apple’s 

Facetime, Facebook’s video calling and 

Google’s Hangouts, embrace and offer video. 

At the same time we are witnessing the 

advance of mobile broadband networks 

designed to support video communications. 

In fact, video is widely promoted as the flagship 

service that can be supported by LTE. 

Connect the dots, and we have a series 

of separate and significant events that 

are combining to have a massive impact 

on the industry. 

Clearly, consumer use of video has entered 

a new phase of growth, driven by devices, 

For long-term viability, video calling must 

generate its own revenue. 


127

Annual global IP traffic will surpass the zettabyte threshold 

2015 The annual run rate of total IP traffic reaches the zettabyte 

threshold. Internet traffic from wireless devices exceeds internet 

traffic from wired devices. The number of network devices is double 

the size of the entire global population 

90 

80 

2014 1/5 of consumer internet video 

now originates from non-PC devices 

70 

60 

2012 Internet video reaches 50% consumer internet 

traffic. The number of households generating >1 TB 

per month hits the million mark 

2011 The screen surface area of all consumer devices 

reaches 1 sq. foot per capita. The number of networked 

devices equals the size of the entire global population 

2010 Internet video surpasses P2P as the 

largest consumer internet video traffic category 

50 

40 

30 

20 

Exabytes per month 

2000 Consumer internet 

surpasses business internet 

10 

2000 

2005 

2010 

2015 

0 

Figure 1: Based on data from Cisco, 2011. 

www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/VNI_Hyperconnectivity_WP.html 

128

services and networks built from the ground 

up to make this experience easy and enjoyable. 

The result is a wave of excitement 

around video that could overwhelm service 

providers gearing up to deliver video communications 

right now. In my view, these 

service providers are headed right into a 

monster of a storm. 

in how they communicate and with whom. 

These Islands have been created by a 

variety of companies that include Over-the- 

Top (OTT) video networks (example: Skype, 

Apple’s Facetime); Social Networks 

(example: Google+, Facebook) and network 

operators (example: Verizon Wireless and 

Japan’s DoCoMo). 

Prepare for impact 

To complicate matters video communication 

is not the same as voice communication. 

Make a voice call and you can expect to 

“connect” with anyone you wish because the 

operators themselves are also connected. 

The glue that holds it together, and makes it 

possible to contact people we want, is the 

humble telephone number. These digits, 

coupled with all the dialing codes that we 

(mostly) love and cherish, provide the basis 

for a unique and universal address system 

that allows us to ring anyone. 

In practice, Skype users can video call their 

Skype friends; Facebook users can conduct 

video calls with their Facebook friends on 

Facebook; and Google+ users can employ 

‘Hangout’ on a video chat with friends in 

their Google+ circles. As a result, users exist 

in Islands, and they cannot reach out and 

connect with their wider communities. 

The different services don’t talk together 

— full stop. This is because each video communications 

service uses different addressing 

capabilities, different client software 

and makes use of different video formats 

that exist in the industry. 

IPX networks connect data networks in the 

same way, but there is a catch. Video communications 

(carried over IP) is predominantly 

peer-to-peer, which means users are 

only able to reach people on the same video 

service using the same calling software. 

The upshot: Users sit on different video 

service “Islands” where they are limited 

Mind the gap 

Clearly, the emergence of these video 

service Islands effectively limits users, 

barring them from connecting with all their 

contacts regardless of the video call service 

they choose to use. However, this issue has 

neither hampered the growth in OTT video 


129

Average mobile user, traffic per month 

Figure 2: Based on data from Cisco. 


communications, nor has it harmed the 

brand appeal of the players that offer them. 

To the contrary, Google, Apple, Facebook 

and Skype all now manage powerful brands, 

offering a free service model largely at 

the expense of the operators who have 

invested in the networks to make video 

communications possible. 

For the moment, the storm rages on. How 

long will it last, and what will be the impact? 

Tough questions, but one thing is for sure: 

the OTT model has serious shortcomings. 

For one, there is a huge question mark 

over the scalability and sustainability of 

a model that effectively isolates users 

on service Islands. 

Indeed, a video calling service that only 

per mits users to communicate with their 

friends who use the same service may 

be deemed acceptable among the Digerati 

and the Facebook masses, but it is an 

alien concept to everyone else out in the 

wider ocean. 

130

In the last few years we have seen a seismic shift 

in consumer acceptance and use of mobile video. 

Smartphones and tablets — popular devices 

equipped with video cameras — have reached 

the mass-market tipping point. 

Accustomed to the simplicity and 

seamlessness of voice communications 

users expect — and demand — universal 

connectivity that allows them to connect 

with anyone they please. 

Naturally, users will require the same freedom 

and flexibility when they make a video 

call. However, for this to happen, there will 

need to be companies that have the capabilities 

to bridge the service Islands. Put 

another way, the door is wide open for 

service providers to step up to the helm and 

use their networks to connect the Islands, 

even better if they can address all the 

incompatibilities that currently exist 

between different video call services. 

Providing universal connectivity is 

necessary if video is to reach its full market 

potential. This capability comes at a cost 

— but there is also a significant benefit 

to the providers equipped for the job. 

Come together 

Service providers are presented with both 

a problem and a golden opportunity. 

The problem is how to wring more value out 

of today’s IPX networks. The solution can be 

found in an approach where these networks 

are used as smart inter-operator video hubs. 

In this scenario the hubs connect incompatible 

video services and apply transcoding 

and transrating policies to ensure video 

call service quality and consistency. 

The opportunity lies in the ways providers 

can make money by charging for interoperator 

video connectivity on their IPX 

networks. And no worry that the space will 

crowd too quickly when word of this massive 

opportunity spreads. Video is inherently 

more complex than voice, a factor that 

creates a significant barrier to entry for any 

service providers who simply want to jump 

on the bandwagon. 


131

Properly implemented, universal video connectivity 

should ‘just work.’ And, because 

they combine universal addressing with 

smart video hubs, they should operate in the 

background making sure users don’t experience 

or realise the incompatibilities between 

services and devices. What’s more, video 

should also be a simple upgrade option to an 

existing voice call. Finally, this connectivity 

and convenience should come at a price. 

In fact, there is no reason why it shouldn’t 

command premium interconnection fees. 

Connectivity is baked into IPX networks. 

Therefore, connecting video service Islands 

should be seen as a logical and natural next 

step and an extension of the IPX network 

core business model. 

The remaining question, therefore, centers 

on the economics. 

Video calling occupies a significant amount 

of bandwidth, which is quite costly. For longterm 

viability, video calling must generate 

its own revenue. Only in this way will the 

broadest range of operators be able to participate 

and provide a truly universal service. 

This is a challenge since video calling is 

already a free service within service Islands 

such as Skype. It’s difficult to see how there 

can be any going back on this one. 

Will users pay for the interexchange that 

bridges the service Islands, allowing them 

to make video calls to anyone they choose? 

The evidence that consumers will buy in to 

this proposition is overwhelmingly positive. 

Today users already accept the concept 

of a call plan bundle that permits them to 

call family and friends at a reduced rate and 

charges separately for calls they make to 

numbers that are not part of their call plan. 

This suggests users will see the value of 

being able to connect with their friends 

and family, and thus agree to pay for 

interexchange video traffic. 

Clearly, video calling is a service that will pay 

its way. But developing the pricing and packages 

will hardly be this simple. Driven by the 

widespread adoption of LTE, 2-way video 

calling is just one of a whole spectrum of 

video communications services that will 

soon reach the mainstream. Already value 

-added video services such as video voicemail, 

multi-way video calling, 1-way live video 

sharing and HD video are gaining traction. 

In time we can expect to see many more 

bundles and offers hit the marketplace, 

choice that we enjoy (or suffer!) today, 

with value-added premium services 

charged separately. 

132

As the storm clouds gather we can ask what 

lies beyond the horizon. 

Expect operators to make significant investments 

to launch video communications that 

provide universal connectivity, with the 

aim of charging for interconnect to other 

service providers. Equally, you can expect 

interexchange operators to invest in video 

interconnect hubs to join up and monetise 

the video world. 

Ramsey Masri has over 17 years experience 

in the mobile applications and infrastructure 

space. After starting his career at Oracle, 

Ramsey went on to become what has been 

defined as a turnaround specialist, helping 

three companies transition to profitability 

and success. In his role with Aylus Networks, 

he created the go-to-market strategy that 

led to the successful partnership with 

SAP/Sybase. 

It’s a huge task that lies ahead, and one the 

industry must face. As Billy Tyne, captain of 

the Andrea Gail in The Perfect Storm, put 

it: “There is no rest for the weary.” But the 

determination of the industry is necessary 

to embrace — and benefit from — this 

opportunity. To borrow from the words of 

crewman Bobby Shatford: “I’m out here 

because I need the money.” 


133


Enabling Roaming Across 

LTE Networks 

By Matthew Tonkin, Global Head, IPX Business, SAP Mobile Services 

Once again the mobile industry 

is entering a new phase of 

technological change. With the 

proliferation of data services and 

smartphones, the mobile operator 

community is working to address 

the increasing need for bandwidth 

with the rollout of next generation 

4G networks, known as LTE 

networks. This development 

will pave the way to full IP 

convergence, enabling mobile 

operators to accelerate the timeto-market 

for new services that 

drive customer satisfaction and 

generate new revenues. 

As operators launch LTE services in their 

home markets, consumers will naturally 

expect the same quality experience everywhere 

— especially when they are abroad. 

In view of this requirement mobile operators 

that deploy LTE networks in their domestic 

markets are starting to review options available 

to ensure LTE services allow seamless 

roaming overseas. The first users of LTE will 

typically be VIP customers or key corporate 

accounts, a segment made up of high-end 

users and frequent travelers. To serve these 

premium customers operators will need to 

address LTE Roaming requirements sooner, 

rather than later. 

Prepare for roaming 

LTE will enable new services such as video 

streaming, HD voice and Voice over LTE applications. 

However, these services will also 

put high demands on the data roaming 

backbone and require much more bandwidth 

and resilient network connectivity. As mobile 

operators review their LTE Roaming connectivity 

options, they will need to consider the 

following business and technical factors in 

preparation to enable LTE Roaming: 

As operators launch LTE networks over the 

coming years, new roaming connectivity will 

be required with each new operator. Effectively, 

the work performed over the last 10 years 

will need to be repeated. 

134

1 Diameter Signaling 

The build out of high-speed LTE networks 

is different from the technologies that 

preceded it. LTE requires a completely 

new signaling protocol. Put another way, 

SS7 MAP— which has been the rule for 

2G / 3G mobile networks — is no longer 

needed. A new signaling protocol has 

been introduced, called Diameter. 

2 New Roaming Connectivity 

In a roaming environment, the existence 

of this new protocol will require mobile 

operators to establish new roaming connections. 

As operators launch LTE networks 

over the coming years, new 

roaming connectivity will be required with 

each new operator. Effectively, the work 

performed over the last 10 years will need 

to be repeated. 

3 Diameter Relay Agent 

To enable this connectivity, operators 

will require a Diameter Relay Agent (DRA). 

In the initial build out of LTE networks, the 

majority of mobile operators have not 

deployed a DRA into their networks. Operators 

are facing challenges of the immediate 

business requirements to enable LTE 

Roaming versus the need to obtain 

CAPEX budget approvals to acquire the 

required DRA equipment. 

4 An IPX Provider 

It is widely accepted that LTE Roaming 

with Diameter signaling will be connected 

across IPX networks. As LTE Roaming 

proliferates, there will be a need for 

IPX providers to enable peering both at 

the data level and at the signaling level. 

Consideration will also be needed to 

ensure Quality of Service (QoS) SLAs 

re implemented. 

Important choices 

In the new LTE world, mobile operators 

will have a choice: they can work with LTE 

Roaming hubs, or they can directly connect 

with mobile operators. 

The hubbing concept is not new to the 

industry. There is a wide variety of these — 

including iSMS hubs, iMMS hubs, roaming 

hubs and clearing hubs — and all fulfill a 

similar role. Depending on the operator 

requirements, hubbing allows them to reach 

operators with one-to-many connectivity, 

reduce efforts and testing time, accelerate 

time-to-market for services and facilitate 

transaction settlements between operators. 

In the LTE Roaming environment, mobile 

operators can connect to an LTE Roaming 


135

hub, a hub that will also facilitate connectivity 

to the wider operator community made 

up of operators that also connected to 

the same hub. 

To facilitate active deployment for mobile 

operators, the LTE Roaming hub will also 

need to provide an outsourced DRA capability 

running on the hub itself. Operators have 

the option to utilise this outsourced DRA 

capability immediately to connect to 

roaming partners. 

This may sound easy, but, as the industry 

has experienced through operator trials, 

interworking with suppliers’ DRA equipment 

can be challenging. Whilst specifications are 

defined for the Diameter protocol, unique 

supplier variations are evident and require 

mapping to enable seamless interworking. 

In the initial stages of LTE Roaming 

deployments, it is likely operators will use 

their connection to an LTE Roaming hub 

to facilitate LTE Roaming. The business 

benefits delivered by this approach 

are as follows: 

5 Immediate time-to-market. 

This equips operators to deliver an immediate 

service to their high-value customers. 

6 Cost effectiveness. 

Whilst LTE roaming capability will be key, 

network rollouts will take time and the 

number of roaming users to start will be 

low. Mobile operators can monetise their 

initial rollouts through an LTE Roaming Hub. 

7 Technical readiness. 

Many operators are missing a key technological 

component, the Diameter Relay 

Agent. An LTE Roaming hub — which 

offers an outsourced DRA capability — 

will enable operators to move forward 

with an LTE roaming solution. 

As the market matures, LTE revenues 

proliferate, and the necessary network 

equipment is deployed, mobile operators 

will also have the option to connect directly 

with each other. As in today’s hub environments, 

it’s likely that mobile operators will 

connect directly to key operator partners 

and roaming destinations. Other operators 

will pursue a dual strategy for LTE Roaming. 

Mobile operators can monetise their initial 

rollouts through an LTE Roaming Hub. 

136

Connecting directly to key roaming 

partners, and also work with LTE Roaming 

hubs to access the community. No doubt 

there will also be some operator groups that 

operate their own hub, with a lead operator 

sponsoring the hubbing capability and 

enabling connectivity across the group. 

Incorporating the roaming hub principles, 

an LTE Roaming hub running over the IPX 

network will enable and ensure the rapid 

rollout of LTE Roaming for the operator 

community. The IPX network will also deliver 

the bandwidth and network resiliency 

demanded by consumers. 

Matthew Tonkin oversees SAP Mobile 

Services’s global GRX/IPX/LTE Roaming 

business. In addition Tonkin is responsible 

for managing and driving the company’s 

growth and market leadership in both Enterprise 

Services and Mobile Operator Services 

businesses across the AsiaPac region, 

through a combination of direct sales and 

a partner & alliances sales network. 


137


Lte Roaming In Latin America: 

Conditions For Success 

By Alejandro Martinez, Chairman, Billing and Roaming Working Group 

(BARG), GSMA LA 

Despite numerous announcements 

by Latin American mobile 

operators to deploy LTE as early 

as 2012, it’s clear the shift will not 

happen overnight. However, as 

with 3G, the move to LTE will have 

a significant impact on each 

market in the region. 

In view of this development the GSMA Latin 

America BARG Working Group has been 

working to encourage discussion of the migration 

to LTE, as well as the opportunities 

and implications for operators. A chief focus 

of this exchange has been the technical and 

commercial impact on international 

roaming services. 

Clearly, LTE will equip mobile operators 

to increase revenues by delivering new 

services and improving their current 

offering. But it’s not only about providing 

customers with high-speed and high 

quality data and voice services. LTE will 

also address the spectrum limitations 

facing many Latin American operators. 

To this end it will allow greater spectral 

efficiency, and thus boost the amount 

of spectrum available. 

In fact, this is one of the conclusions of 

GSMA Latin America BARG Working Group. 

Our discussions determined that LTE will 

have an immediate and significant impact 

at the Access level, and not so much at the 

Core level. We expect this to be the case for 

the next few years. 

Spectrum benefits 

Hurdles to overcome 

The deployment of LTE across Latin 

America brings with it a host of benefits. 

Predictably, the barriers to LTE deployment 

in Latin America will be similar to those that 

The advance of LTE will create the need for new 

billing models that allow customers more control 

of their services consumption. 

138

Although still embryonic, MBB is expected to become a 

significant driver for the mobile industry in Latin America. 

Number of mobile broadband connections and expected usage 

Mobile Broadband Connections 

(millions) 1 

Mobile data traffic in LatAm and per capita, 

(petabytes per month) 

22MB per 

capita in 2010 

850MB per 

capita in 2015 

+566% 

344 

+3,967% 

488 

257 

52 

72 

12 26 

60 

127 

2010 

2011 2012F 

2013F 2014F 

2015F 

2010 

2011 2012F 

2013F 2014F 2015F 

2010 saw 35 LTE commitments, 7 trials and 4 commerical launches. 

The number of LTE connections is expected to reach 15 million by 2015 

Figure 1: Based on data from GSMA. The GSMA Latin American Mobile Observatory 2011. 

A.T. Kearney 12/13557 

www.gsma.com/publicpolicy/wp-content/uploads/2012/03/latam12presentationatkearneythestatusofthemobileindustryinlatammobileobservatory.pdf 

marked the introduction of 3G and previous 

technological evolutions. 

The difficulty to reach economies of scale 

in the region is combined with problems 

around disparities in the current assignment 

of frequencies and overall shortage of 

spectrum. These factors will cause higher 

terminal and dongle prices. Since the 

current level of subsidies is already high, this 

development will mean higher CAPEX costs 

for mobile operators across the region. 

Footnote 

1. Numbers have been updated after the publication of the Latin America Mobile Observatory. 

Q4 each year based on technology: # of subscribers to CDMA 2000 fxEV-DO (Rev. A and Rev. B 

also), WCDMA HSPA and LTE. Source: The GSMA Latin American Mobile Observatory 2011. 


139

If no new spectrum is made available in suitable 

bands, then it will be difficult for operators to evolve — 

and migrate their customer base — from 3G to LTE. 

On the other hand, investment in the network 

elements will be significant given the 

geographical extension of the majority of 

the territories in the region. 

In view of these costs and obstacles, there 

is a trend among Latin American operators 

to share networks and the infrastructure 

required for LTE. However, experience with 

network sharing in other regions shows 

this option is not free from major difficulties 

and limitations. 

Gradual shift 

delays. A prime example is Argentina, there 

the cap per operator is only 50MHz, and 

even that frequency is not fully allocated. 

What’s more, the auction for AWS spectrum 

has no certain schedule at this time. 

To date the spectrum currently available 

is fully utilised by GSM/3G. If no new 

spectrum is made available in suitable 

bands, then it will be difficult for operators 

to evolve — and migrate their customer 

base — from 3G to LTE. Put another way, 

the shift from 3G to LTE will be gradual, and 

there will need to be a coexistence of these 

technologies for a while to come. 

For operators to capitalise on the benefits 

of LTE, a spectrum band of at least 20 MHz 

must be available. While it is possible to 

deliver services using a smaller allocation 

of spectrum, the experience delivered at 

this suboptimal speed will not be much 

faster than what we know from 3G. 

In Latin America spectrum caps are very 

low in comparison to other regions. To 

further complicate matters, several of the 

spectrum auctions that were announced 

have not yet taken place due to repeated 

Roaming and rewards 

No doubt there will be some cases where 

operators will launch LTE networks focused 

entirely on offering high-speed data 

services. But it is likely that operators will 

eventually decide to extend their offer and 

provide voice services for two reasons. 

First, voice is essential to complete a solid 

commercial offering. Second, the access 

resources that voice services require in 

comparison to data are reduced. 

140

To date the provision of voice services under 

LTE is held back by the lack of standards 

and the strong convenience of fall back 

capacity to legacy networks. 

In terms of Roaming Service, LTE will inherit 

the difficulties of the disparity of frequencies. 

Terminals should be multiband, further 

increasing its cost, in order to work in different 

countries. Fallback capacity to legacy 

networks will be necessary in order to 

provide a good footprint from the beginning. 

At wholesale billing level, it will be necessary 

to migrate to TAP 3.12 version and make 

adjustments throughout the supply chain 

and service assurance. The traffic generated 

by roamers from LTE home networks 

will be a source of revenues for Latin 

American operators. 

In recognition of this requirement the BARG 

of GSMA Latin America has fostered debate 

between operators and vendors to promote 

progress toward these new billing models at 

a regional level. As a result, several operators 

have launched commercial services 

that include billing caps for periods of time. 

Clearly, LTE will drive benefits for operators 

and their customers. But the path to LTE 

will be gradual. Indeed, the pace of massmarket 

deployment will be subject to a 

variety of factors, including the allocation of 

additional spectrum and the availability of 

handsets and dongles at a reasonable price 

customers are willing to pay. LTE paves the 

way for new and better value-added 

services provided operators succeed in 

finding business models and approaches 

that allow reasonable profitability. 

In time an extra advantage of LTE — similar 

to 3G —will be the possibility of roaming 

between networks that were previously 

not interoperable. This benefit opens up 

business opportunities in both directions. 

The advance of LTE will create the need for 

new billing models that allow customers 

more control of their services consumption. 

Operators will therefore need to adjust their 

offering to match customer needs for more 

transparency. What’s more, operators will 

need to be sure these models and offers 

also support a sustainable business. 

Alejandro Martinez is the Corporate & B2B 

Marketing Manager at Telecom Personal 

Argentina. He has more than 12 years 

experience in the retail, product, technical, 

and wholesale mobile business, and is the 

current Chairman of the BARG Group 

of GSM LA. 


141


LTE: New Technology 

Boosts New Business 

By Michel Van Veen, Group Manager, Product Management, 


About 10 years ago, operators 

offering IP-based VPN services to 

companies introduced Classes of 

Service (or CoS) to enable more 

efficient use of bandwidth. The 

principle is simple: assign a high 

CoS to a quality-sensitive application, 

like video calling, to make 

sure IP packets associated with 

that application get a higher 

priority on the backbone than 

packets associated with less 

critical applications, such as 

email and web browsing. This 

helps guarantee the performance 

of more demanding services in 

situations where a connection to 

an IP-VPN has limited capacity, 

and bandwidth upgrades are costly. 

The cost of fixed bandwidth may have 

declined in the last decade. But this is 

not the case for mobile networks. Radio 

networks are generally costly to build out 

and maintain. In view of this many Mobile 

Service Providers have become increasingly 

creative in improving the return on their 

investment. One way they have achieved 

this is by pursuing strategies around sharing 

radio network infrastructure with Mobile 

Virtual Network Operators. 

However, the advance of LTE puts the topic 

of how to balance high costs associated 

with radio network capacity back on the 

agenda. In many countries LTE will use 

higher frequencies than 3G, thus requiring 

the deployment of even more antennas in 

metropolitan areas, and further adding to 

the cost and the challenge. 

It therefore comes as no surprise that CoS 

has been built in to the 3GPP standards for 

The roll-out of LTE networks and the growing 

penetration of smartphones and tablets are finally 

making the mobile Internet a reality. As a result, 

mobile video calling is getting a second chance. 

142

Huge increases in mobile data capacity demand threaten to outstrip mobile 

network capacity supply 

Demand risks 

outstripping supply 

3G 

Capacity demand 

4G 

Capacity supply 

Demand 

2G 

Data becomes primary 

demand driver 

Mass market adoption 

of mobile voice 

Time 

Figure 1: Based on data from HSBC . 

www.hsbcnet.com/gbm/about-us/global-research.html 

LTE, thus providing operators a way to deal 

with bandwidth limitations in a smart way. 

But how smart is this really? CoS is normally 

viewed as just a technical tool to guarantee 

the quality of a service, particularly in 

situations where bandwidth is limited. 

But the creative Mobile Service Provider 

will see a revenue-generating opportunity 

here as well. Let’s look at some examples 

of how these companies can wring more 

value out of CoS. 

Premium quality for 

premium customers 

One of the services sure to take off on LTE 

networks is mobile video calling. IP-based 

video calling has been available on the 

Internet for many years now, provided by 

Over-the-Top (OTT) providers like Skype and 

Google. Video conferencing on traditional 

telephone networks has been around for 

even longer. 


143

HD Voice trials or network deployments 

(copyright GSA- May 21, 2012) 

TMN, Portugal 

Du, UAE 

AT7T, USA 

Sasktel, Canada 

Sprint, USA 

Trialling HD Voice in 3G network 

Trialled HD Voice in 3G network 

VoLTE planned in LTE network 

VoLTE planned in LTE network 

Deploying VoLTE in LTE network 

Verizon Wireless, USA 


LG U Plus, South Korea 


KT, South Korea 


StarHub, Singapore VoLTE trial planned by end of 2012 

Figure 2: Based on data from Gsacom. www.gsacom.com/gsm_3g/info_papers.php4 

Early attempts by Mobile Service Providers 

to launch mobile video calling on 3G 

networks have failed. This was not just 

because 3G handsets have the camera on 

the opposite side of the display. The 

deciding factor was the call quality, which 

was quite disappointing. To complicate 

matters video calling was often only 

possible between compatible handsets. 

But now all that has changed. The roll-out 

of LTE networks and the growing penetration 

of smartphones and tablets are finally 

making the mobile Internet a reality. As a 

result, mobile video calling is getting a 

second chance. 

marginalised and relegated to the role of 

basic ISPs is obviously there. And this is all 

the more painful if we consider the costs of 

licenses and the investments Mobile Service 

Providers have made to build their business. 

This is the risk, but the reality looks quite 

different. Customers are accustomed to 

the high bandwidth — and high quality of 

service — delivered via fixed-line Internet 

access. The limitations on radio bandwidth — 

even on LTE networks — means customers 

cannot always get the quality they expect. 

This is where Mobile Service Providers have 

a great opportunity. After all, they control 

the LTE network. 

This development puts the OTT providers in 

an ideal position to strengthen their hold on 

customers and to grow their business. The 

risk that Mobile Service Providers might be 

By cleverly applying CoS, Mobile Service 

Providers can control the quality of service 

that is delivered to individual customers, 

even by application. What’s more, Mobile 

144

Collaboration with OTT providers makes sense. However, 

it should at least result in seamless interoperability 

between the services provided by both parties. 

Service Providers can now launch their own 

OTT-like communication services with guaranteed 

performance down to the mobile 

device. This is something OTT providers 

cannot do. And it may be easier for Mobile 

Service Providers to offer these services 

than one might expect, particularly now that 

standards for the Rich Communication 

Suite (RCS) have matured and many 

vendors are offering compliant solutions. 

This benefits customers, who now have a 

choice between the “best-effort” type OTT 

services and premium-charged quality 

services offered by their Mobile Service 

Provider. And, as the successful launch and 

take up of HD Voice on 3G networks in some 

markets clearly shows, there is a significant 

segment of customers willing to pay for 

premium services. 

to get that content streamed flawlessly 

to your brand new HD tablet ? 

In other words, wouldn’t it be great if you 

could get access to premium bandwidth 

at a one-off charge, and just when you 

need it? Absolutely. 

This idea — sometimes referred to as the 

slot machine model (“throw in a quarter 

and get 15 minutes worth of bandwidth”) 

— can become a reality with LTE. In this 

same scenario managing CoS is only one 

part of the challenge. CRM systems and 

billing systems will also need to be fully 

integrated with the core network. So, even 

though the slot machine proposition has 

as much potential as prepaid cards, the 

general expectation is that we will need 

to be patient. 

Slot machine 

Collaborative models 

Granted, many consumers will not be prepared 

to sign up for premium services. But 

there will also be moments when these consumers 

will wish they had. 

A video call from your friends showing the 

litter of newborn puppies is certainly no 

fun when the image freezes all the time. 

And what about that movie trailer you 

have been waiting so impatiently to see? 

Wouldn’t it be a much better experience 

The more adventurous Mobile Service 

Providers will not stop there. They will 

certainly look for collaborative business 

models to drive even more revenue out 

of their costly LTE investments. 

Collaboration with OTT providers makes 

sense. However, it should at least result 

in seamless interoperability between the 

services provided by both parties – 

including a translation between mobile 


145

phone numbers on one side, and user IDs, 

such as Skype handles, on the other. But 

it is also conceivable that Mobile Service 

Providers could offer access to their LTE 

networks under some wholesale arrangement 

– either by choice or because they 

are forced to do so by regulating bodies. 

Collaboration with content providers, not 

a new phenomenon in itself, could be taken 

to the next level once LTE technology makes 

it possible to tailor services down to the 

individual customer. 

Before Mobile Service Providers can tap into 

any of these new revenue streams, they will 

need to get very familiar with this new LTE 

technology. Controlling a high-performing 

radio network is key, but being able to 

manage the core network and have it fully 

integrated with IMS platforms, as well as 

CRM and billing systems, is crucial. 

Michel 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 international standardisation 

of ISDN and Fiber-to-the-Home 

systems, and establishment of an operational 

management center for the first GSM 

network in The Netherlands. Van Veen is 

also the current Deputy Chairman of the 

GRXIPX Working Group, which is a subworking 

group under GSMA’s IREG 

(Inter-Working Roaming, Expert Group). 

And let’s not forget the other challenge that 

makes the mobile Internet so different from 

the fixed Internet: roaming. The first question 

that immediately comes to mind is: how 

can the operator guarantee — and deliver 

— a roaming customer the same quality of 

service they enjoy in the home network? 

Tough question, indeed! But I will leave that 

discussion for some other time. 

146

PART FIVE 

OTT: OPEN THREAT OR 

HIDDEN OPPORTUNITY

PART FIVE: OTT: OPEN THREAT OR HIDDEN OPPORTUNITY 

OTT Threat: Top Strategies 

To Fight Smart 

By Pamela Clark-Dickson, Senior Analyst, Mobile Content 

& Applications Intelligence Center, Informa Telecoms & Media 

The rise of Over-the-Top providers 

(OTTs) of mobile VoIP (mVoIP) and 

IP-based messaging is significantly 

altering the dynamics of the mobile 

services market. 

receive messages for “free” that are also 

posing a very real threat to mobile operators’ 

voice and messaging revenues. 

The “KPN effect” 

The growing penetration of smartphones 

and mobile broadband, combined with the 

availability of open application programming 

interfaces (APIs) for handsets, has created 

an environment where third-party application 

and service providers can more easily 

develop and distribute mobile applications, 

including mobile voice-over-IP (mVoIP) and 

IP-based messaging applications. In this 

environment, mobile operators risk being 

relegated to becoming providers of network 

access only. 

Significantly, it’s the third-party applications 

and services from OTTs that enable subscribers 

to make voice calls and send and 

In May 2011 KPN became the first mobile 

operator to report that subscriber use of 

OTT voice and messaging applications – in 

particular, WhatsApp – had caused a decline 

in voice and messaging traffic and revenues. 

Initially, what became known in the wider 

industry as “the KPN effect” was confined 

to KPN’s “Hi” brand. The operator found that 

85 percent of its Hi subscribers were using 

WhatsApp, usage that resulted in a year-on 

-year decline of 24 percent in outgoing SMS 

traffic by 3Q 2011. The effect quickly spread 

to the operator’s mainstream brand, KPN, 

causing outgoing SMS per customer to 

decline 5 percent year-on-year by 3Q 2011. 

Significantly, it’s the third-party applications and 

services from OTTs that enable subscribers to make 

voice calls and send and receive messages for “free” 

that are also posing a very real threat to mobile 

operators’ voice and messaging revenues. 

148

KPN Mobile, Netherlands, SMS per subscriber, 1Q2010-2Q2012 

60 

55 

SMS per subscriber 

50 

45 

40 

35 

30 

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 

Figure. 1: Source: KPN 

Despite KPN’s attempts to stem its declining 

SMS traffic and revenues through the 

introduction of integrated tariffs — which 

included a mixture of voice minutes, SMS 

and mobile data — the year-on-year decline 

in SMS traffic among KPN’s overall consumer 

mobile customer base accelerated 

from 19.6 percent in 3Q 2011 to 32.7 percent 

by 2Q 2012 (see figure. 1). 

OTT impact spreads 

Vodafone Group has also experienced a 

decline in its SMS traffic and revenues, 

partly because its subscribers preferred 

to use OTT alternatives. The operator’s 1Q 

2013 financial results paints a fairly grim 

picture, showing a decline in messaging 

revenues across most of its operating 

divisions (see figures. 2, 3). 


149

Vodafone Group, messaging revenues by division, 1Q2012 and 1Q2013 

7 

Revenues (£ billions) 

6 

5 

4 

3 

Group 

Europe 

2 

Africa, Middle 

East & Asia 

1 

0 

1Q12 

1Q13 

Notes: £:1=US$1.62 *Ends June 30,2012 

Figure. 2: Source: Vodafone. 

The impact of OTT services was not limited 

to Europe. China Mobile stated in its 1H 

2012 financial report that competition in the 

Chinese mobile services market was intensifying. 

The operator stressed that revenues 

from traditional voice and messaging 

services were under pressure from mobile 

operator rivals and “new technologies and 

services that are replacing traditional communications 

services.” 

As a result of this competition, China 

Mobile’s SMS and MMS revenues declined 

2.6 percent year-on-year (see figure. 4). 

Despite this drop, China Mobile is still the 

largest in the world in terms of SMS traffic. 

According to Informa Telecoms & Media’s 

World Cellular Data Metrics, China Mobile’s 

624 million subscribers sent a total of 736 

billion text messages in 2011. 

150

Vodafone Group, messaging revenues by country, 1Q2012 and 1Q2013 

350 

300 

UK 

Revenues (£ billions) 

250 

200 

150 

Germany 

Italy 

100 

Vodafone (South Africa) 

50 Spain 

India 

0 

1Q12 

1Q13 

Notes: £:1=US$1.62 *Ends June 30,2012 

Figure 3: Source: Vodafone. 

Formidable competition 

Key OTT providers range from nimble newcomers 

to established handset manufacturers. 

Their ranks include: start-up companies 

such as WhatsApp, KakaoTalk, Viber Media 

and Line; handset vendors such as RIM 

(BlackBerry Messenger) and Apple 

(iMessage); and South Africa’s MXit, a 

combination mobile instant messenger 

and social network. (see figure. 5). 

In August 2012 WhatsApp announced 

that its daily traffic hit a record 10 billion 

messages. This represents a five-fold 

increase in the six months since March 

2012, when WhatsApp’s average daily 

traffic was 2 billion messages. 


151

China Mobile, wireless data services revenues 1H2011 and 1H2012 

Revenues (CNY trillions) 

30 

25 

20 

15 

10 

Wireless data traffic 

Applications & 

information services 

SMS & MMS 

5 

0 

1H11 

1H12 

Notes: CNY1=US$0.15 

Figure. 4: Source: China Mobile 

Other OTT providers gained similar traction. 

Apple announced in June 2012 that users 

of iMessage had sent 150 billion messages 

since the service’s launch in October 2011. 

Meanwhile, South Korea’s KakaoTalk 

managed to significantly reduce SK Telecom’s 

SMS traffic. To avert a similar decline 

in voice traffic from KakaoTalk’s recent 

launch of its mVoIP capability in South 

Korea, the South Korean mobile operator 

SK Telecom teamed up with rival operators 

KTF and LGT to lobby the Korean Communications 

Commission for permission to block 

their subscribers’ use of KakaoTalk’s mVoIP 

capability on their networks. 

Five key strategies 

How can mobile operators turn the tide and 

compete with OTT providers on their turf? 

Fortunately, mobile operators do have a number 

of competitive capabilities they can use 

to provide subscribers an OTT-like service, 

one that could potentially be far richer than 

the services provided by the OTTs. 

It seems mobile operators need little convincing 

of the merits of this approach. In fact, 

Informa has identified service emulation as 

one of the five key strategies mobile operators 

are pursuing in answer to the threat 

posed by OTTs. 

152

Key over the top mobile VoIP and IP-based messaging providers 

OTT 

providers 

Services No. users Messaging traffic Voice 

traffic 

Apple iMessage 140 million 

(June 2012) 

150 billion messages 

since launch in 

October 2011; 


a day (June 2012) 

n/a 

Kakao Talk Kakao Talk 45.2 million registered: 

36 million local, 

9.2 million international 

(June 2012) 

1.2 billion 

messages a day 

(February 2012) 

n/a 

Line Line 40 million registered: 

22 million local, 

9.2 million international, 

18 million local 

(June 2012) 

Not disclosed 

Not disclosed 

Mxit Mxit 12.5 million 


750 million 

messages a day 


n/a 

RIM BlackBerry 55 million 

(May 2012) 

100 million messages 

a month(May 2011) 

n/a 

Viber 

Media 

Viber 

100 million 

registered users 

(September 2012) 


a month 

2 billion 

minutes a 

month 

WhatsApp WhatsApp Not disclosed 10 billion messages 

a day (peak traffic, 

August 2012) 

n/a 

Figure. 5: Source: Informa Telecoms & Media 


153

Mobile operators own and control the billing 

relationship, assets that position it to charge 

subscribers for the use of OTT-like services, 

either through a monthly subscription or on 

a per-event basis. 

Specifically, Informa regards service emulation 

and partnership with an OTT as the two 

strategies that are most sustainable for 

mobile operators. 

The remaining three strategies operators 

can adopt include: 1) doing nothing, or 

embracing OTTs as the driver of data traffic 

on operator networks, 2) blocking access 

to OTT services on their networks; and 3) 

trying to neutralise the impact of OTT 

services by restructuring of their price 

plans to be more competitive. 

Operator assets 

Operators also have competitive capabilities 

and assets that give them the edge over 

OTT players. Put simply, the operators alone 

own and control their existing network 

assets. Operators also own and control 

their subscriber base because of the longstanding 

billing relationship they have with 

their customers. 

Operators can also play a central role enabling 

new ecosystems and new innovation. This 

is possible because network infrastructure 

vendors are exposing application programming 

interfaces (APIs) associated with their 

equipment. The aim here is to open these 

platforms, thus enabling operators and third 

parties to quickly develop and launch services 

on the mobile operator networks. 

The result is new and innovative services 

that could conceivably connect into multiple 

network assets, including voice, voice-mail 

and messaging infrastructure. This would 

also position mobile operators to provide a 

network- or application-based converged 

communications service, as well as a range 

of value-added services around communications. 

These services may either be 

proprietary to the operator that offers them, 

or they may be based on Rich Communications 

Suite (RCS) or RCS Enhanced 

(RCSe) standards issued by the GSMA. 

154

Ownership matters 

Because the mobile operator owns and 

controls the network, it alone can ensure 

service reliability and quality for subscribers. 

OTTs, on the other hand, can exercise 

relatively little control over reliability and 

quality of service. Put another way, their 

sphere of influence is limited to the infrastructure 

and apps they use to deliver and 

support their services. 

could act as a catalyst for operators 

to compete by creating far richer 

OTT-like services that bind subscribers 

to their networks. 

As always, execution will be key. Mobile 

operators do have significant advantages 

over the OTTs, but it’s up to the operators 

to ensure that they can transform these 

advantages into revenue-generating services. 

What’s more, mobile operators own and 

control the billing relationship, assets that 

position it to charge subscribers for the 

use of OTT-like services, either through a 

monthly subscription or on a per-event 

basis. Alternatively, the operator could 

also include free access to these OTT-like 

services as part of an existing, or new price 

plan, that may also include voice minutes, 

SMS and/or data. Adopting the latter 

approach may well help the mobile operator 

to minimise the rate at which its subscribers 

churn to the networks of other operators, 

or to OTT services. 

As the examples outlined here show, subscribers’ 

use of OTT services has proven 

to have a negative impact the traffic and 

revenues many mobile operators generate 

from their traditional communications 

services. However, it is possible that OTTs 

Pamela Clark-Dickson is a senior analyst 

at Informa Telecoms & Media with over 16 

years experience in the field. She focuses 

on mobile messaging and produces 

analysis of the global messaging market 

for the Mobile Content and Applications 

Intelligence Centre. Her areas of expertise 

cover all aspects of mobile messaging in 

the consumer, enterprise and marketing 

industry sectors globally, including 

SMS, MMS, mobile e-mail, mobile instant 

messaging and rich communications. She 

also co-edits Mobile Media and Messaging, 

a continuous research service published 

by Informa. 


155


Evaluating Strategies To Face 

OTT Providers 

By Eusebio Felguera, Corporate Regulatory Manager, Telefónica 

No one doubts the Internet has 

become an integral part of our 

lives. Likewise, no one doubts the 

Internet ecosystem will be 

different in the next 3-7 years. 

The evolution of the Internet is marked by a 

series of developments that have decoupled 

the networks from the services they offer. 

This has opened the door to third parties 

and over-the-top players (OTT), allowing 

them to provide services over the top of the 

operator network. This, in turn, has led to a 

greater level of service flexibility and innovation. 

Thus, a departure from the vertical 

integration of services that operators 

provide has paved the way for new services. 

But that isn’t the only outcome. 

The advance of OTT players means it’s time 

for operators to reinvent themselves. But 

it’s not about pursuing strategies to become 

the new Google or Facebook. Any initiative 

to copy these companies will simply fail. 

This is about developing new and different 

services that complement and compete 

with the services these OTT players offer to 

users, while building strength in the services 

operators have traditionally offered. 

In other words, it’s about focusing on what 

operators do best. Operators have always 

been successful in creating services to meet 

specific customer needs and they should 

continue to focus on this core capability. A 

customer-first focus has allowed operators 

to prosper, and this approach will also be 

key to their future growth. 

Operators are also innovative in offering 

services where vertical integration is a must, 

a strategy that plays in their favour. 

Significantly, OTT players cannot reach this 

level of vertical integration by themselves. 

They need operators — and these operators 

must offer much more than just connectivity 

by leveraging their network assets. Why? 

Because OTT players need much more. For 

operators this means offering services that 

demand expertise and experience in areas 

including Customer Relationship Management 

(CRM), billing and customer service 

and support. 

Fortunately, these capabilities are built into 

the competitive DNA of operators. Another 

advantage operators have is a trusted 

relationship with their customers. This 

is a relationship that operators have built 

up over years. These trust assets are key 

and operators can benefit from their 

unique position. 

156

A world of opportunity 

What are the vertical services that 

should be high on operators’ agendas? 

Opportunities will come from services 

(mobile, fixed and WiFi) and verticals 

including finance, government, health, 

security, advertising, digital content 

distribution and M2M (machine-tomachine) 

communications. There are 

also opportunities for operators around 

the Cloud and the delivery of cloud-based 

services. And no doubt there are many 

more services — and growth opportunities 

— still to come. 

Interestingly, these services also build 

on the close relationship operators 

already enjoy with their customers. 

More importantly, these services are not 

just plug ‘n play. This is key since it’s the 

close relationship the operator has with the 

customer that also allows them access to 

the customer’s home or business to install 

the equipment that makes these services 

possible in the first place. 

Another area of opportunity is banking. 

A huge number of people in developing 

markets worldwide — and particularly in 

Latin America — do not have bank 

accounts. But they do have a pre-paid 

mobile phone. This is a vertical where 

operators clearly have a role to play in 

the delivery of mobile banking and 

mobile money services. In developed 

markets operators can also benefit 

from the advance of NFC, which lays the 

groundwork for mobile payment services. 

And let’s not forget the huge market 

opportunity in providing M2M 

communication and services, enabling 

machines to talk to each other and the 

people managing them. The overall M2M 

market encompasses an extraordinarily 

broad range of applications, including 

automotive telematics, smart metering 

and smart cities. In these smart cities 

sensors, networks and intelligent systems 

help authorities manage water, gas, 

electricity, waste, transportation, fuel use 

and provide urban dwellers an improved 

quality of life. 

A prime example is healthcare, which 

requires the installation of expensive and 

complex monitoring tools, tools that also 

need to be connected and maintained. 

Healthcare is an increasingly important 

services offer in Western countries, 

where there is an ageing population. 

Finally, there is video. This is an area of 

opportunity many consider to be the next 

“killer app” and a space where operators are 

well positioned to capture value. Since many 

industry reports forecast rapid growth in 

mobile video content and communications, 

there is no doubt the space will become 


157

crowded and competition will be fierce. 

But operators should play in that space. 

capabilities to offer value in key areas, such as 

billing, connectivity and services innovation. 

Rethink and react 

The growth opportunities are there, but 

operators must first change their mindset. 

We cannot react as traditional telecom 

operators; we must evolve to be more 

flexible and cut time-to-market. In other 

words, operators need to be more digital. 

This is precisely our approach at Telefónica. 

We started out in 2009 by creating a new 

structure within Telefónica focused on 

the development of new IP services. The 

outcome is Telefónica Digital, a specially 

created unit established in 2011 to develop 

new applications and business models for 

IP technology. This new unit recently had its 

first ‘investors day’ in London, an event that 

gave the new unit the opportunity to share 

recent developments in this field. Telefónica 

Digital now has more than 2,500 employees 

working on new and innovative ‘Over the 

Telco’ services, and is always thinking outside 

of the box. 

What have we learned? It’s important that 

operators learn from OTT players. But this 

isn’t about merely borrowing from their 

approaches. Operators must wield their 

This is precisely our model at Telefónica 

Digital, where we have launched TUENTI — 

a social communications platform — to 

compete with other social networks. We 

achieve this by leveraging in our key asset: 

mobile network access. And we add value 

by offering users confidentiality, something 

no other social network can provide. 

We have also launched To Me, a free mobile 

application that combines free text chat, 

voice calls and picture and location sharing 

between users. To Me is part of the larger 

Tu family of services, which will come to 

include other services such as Tu Go. Due 

out later this year, Tu Go allows customers 

to use their voice minutes and SMS packages 

on any device or platform, not 

just their phone. 

Collaborating for 

competitive edge 

I’ve outlined the B2C opportunities operators 

can — and should — take advantage 

of today. But we should also be aware of the 

opportunities around B2B2C. 

158

Once again, delivering these new services 

will require more vertical integration than 

OTT players can provide. Indeed, we can 

conclude that there is an enormous opportunity 

for operators that have expertise and 

trust assets to provide new services to this 

customer segment — one that OTT players 

cannot serve on their own. This is also where 

collaboration between operators and OTT 

players is essential and will open the door to 

a wide range of opportunities and innovation. 

Operators should offer OTT players attractive 

ways to leverage all their assets — not 

just network connectivity. This approach will 

lay the groundwork for win-win relationships 

that will drive a new stage of growth and 

innovation in Internet services. 

Clearly, operators must work with OTT 

players to achieve mutual benefit and 

market advantage. But it’s not just about 

partnerships that pair one operator with 

one OTT player. Telefónica believes that — 

in order to be attractive for an OTT player— 

an operator must have extensive coverage. 

Since no single operator can provide this 

connectivity alone, it makes sense for the 

operator to work with other operators. 

Through agreements and partnerships 

operators can provide a full footprint to 

deliver services on a global scale. Partnership 

also makes it possible for operators 

to fill the gaps in local services, where 

access is mainly via fixed networks and 

mobile connectivity is a must. 

To this end operators have to create a new 

family of horizontal services that will exist 

right below the OTT layer of services. These 

services include: Managed Connectivity, 

Data Collection & Analysis, Operator Billing 

and Device Installation & Management. 

Cooperation between OTT players and 

operators will allow both providers to create 

services customers will be willing to pay for. 

This collaboration will also pave the way for 

mobile commerce, mobile advertising and 

other services that provide sustainability 

for all the players in the value chain. 

To offer all these services operators must 

have a reliable platform that allows them to 

provide these capabilities to OTT players in 

a seamless way. Fortunately, that platform 

exists today: it is IPX. 

Telefónica is leading this (r)evolution by harnessing 

this platform and by creating strong 

partnerships with OTT players. This provides 

OTT players a single point of entry, allowing 

them to benefit from vast coverage on a 

reliable network. This also deliversenormous 

opportunity and benefits to both parties. 


159

In summary, should operators compete with 

OTT players? Yes, they should — by doing it 

better. Should they collaborate? Yes. I have 

shown how OTT players and operators can 

work together to win big. Should operators 

try to be like OTT players? Again, the answer 

is a resounding “yes, they should.” 

Despite the advances of OTT players, operators 

can do and achieve a lot to maintain 

their competitive advantage. In all cases, the 

key to success is to take action, rather than 

not doing anything. 

Eusebio Felguera manages the regulatory 

and public policy strategy of Telefónica. He 

has over 23 years experience in the mobile 

industry, where he is an expert in the areas 

of Interconnect and Roaming. Felguera also 

represents Telefónica in the GSMA with 

regard to interconnection issues and serves 

as the IMQ subgroup chair. 

160


Nuvos: An Alternative 

To Disruptive OTT 

By Austin Murray, Founder and President, textPlus Inc. 

The iPhone launched a revolution 

that is changing the face of mobile 

telecommunications. As a result, 

millions of applications are now 

delivered “over the top” of mobile 

network operators (MNOs) to apphappy 

consumers. Some MNOs, 

however, are not quite so pleased. 

This is because most over-thetop 

(OTT) communications 

applications use IP to reach their 

customers, effectively bypassing 

the networks owned and managed 

by MNOs., and disrupting MNO 

business models. 

But there is one kind of OTT app that supports 

MNO business models. This particular 

kind of app — often called a Network Unaffiliated 

Virtual Operator (NUVO) – benefits 

MNOs by interconnecting with them and the 

broader telecom ecosystem via telephone 

numbers. The result is a win-win for 

NUVOs and MNOs that both satisfies 

consumer demand and drives innovation. 

IM: Closed and fragmented 

Before we discuss how NUVOs benefit 

MNOs, it is important to understand the 

current landscape and the challenges 

posed by OTT apps such as Facebook 

Messenger, WhatsApp, Viber, and TuMe. 

These OTT apps operate like desktop 

Instant Messaging (IM) clients, requiring 

both senders and recipients of messages 

or voice calls to use the app. As a result, 

these OTT apps bypass other networks, 

like the Public Switched Telephone Network 

(PSTN), and do not require users to use 

existing address mechanisms like telephone 

numbers. Put another way, these OTT 

apps use the Internet to route around the 

traditional mobile telecom networks to 

service their customers. 

The result is a win-win for NUVOs and MNOs 

that both satisfies consumer demand and 

drives innovation. 


161

Industry research shows the rise of OTT 

messaging and calling apps is already having 

a tremendous effect on MNOs. Industry 

Analysts estimate that MNO messaging 

revenue declined by $13.9 billion in 2011. 

What’s more, consumers are increasingly 

choosing OTT messaging apps over SMS 

because they provide enhanced features at 

an improved price point. But the advance 

of OTT apps is not just displacing MNO text 

messaging revenues. The rise of alternative 

OTT voice solutions such as Skype and 

Viber is also negatively impacting core MNO 

voice usage and revenues. 

Clearly, these increasingly popular applications 

are poised to threaten the long-term 

viability of current MNO business models. 

How can MNOs compete? 

Fortunately, there is a solution that provides 

users a better alternative to the disruptive 

OTT apps, while at the same time driving 

MNO voice, messaging and data traffic 

and revenues. Moreover, this solution 

enables connected, non-telephonic devices 

to be addressable by MNO services via 

telephone numbers. NUVOs bring these 

MNO benefits and more to the smartphone 

app ecosystem. 

NUVOs increase reach, revenues 

NUVOs like textPlus and Google Voice allow 

users to communicate with anyone — not 

just other people who use the app — by 

interconnecting with the PSTN and its 8 

billion telephone numbers. 

By assigning telephone numbers to users, 

NUVOs may transmit messages (via SMS) 

and voice calls (via SIP/RTP) to anyone with 

a telephone number. This is important 

because it allows an app user to communicate 

with anyone simply by dialing a phone 

number – just as they normally do with any 

garden-variety telephone – rather than 

limiting their communications to other 

app users, as most OTT apps do. 

This convenience benefits customers and 

MNOs alike. It is estimated that five billion 

SMS messages a month in the U.S. alone 

are sent by people using textPlus and other 

NUVOs. In addition to providing services on 

MNO handsets, NUVOs also turn connected, 

non-telephonic devices – including iPod 

touch, iPad and tablets – into functional 

mobile phones that can send real SMS and 

make phone calls. Connect the dots, and 

this means a significant increase in the 

market of devices addressable to core 

MNO services. 

162

Like other OTT services, 

NUVOs connect app users 

Unlike most OTT, NUVOs 

also reach phone numbers 

text+ 

text+ 

Figure 1: Based on data from textPlus. 

Lessons learned 

The 1990s saw the rapid consumer uptake 

of PC-based Instant Messaging services. 

ICQ was the first to gain traction, but AOL’s 

AIM, Microsoft’s Windows Messenger, 

Yahoo’s Y! Messenger, and Google’s Gchat 

closed the gap quickly, becoming the leading 

players in the fast-moving IM space. 

Unfortunately, there was no underlying 

standard at the time — like SMTP (email) 

or E.164 (telephone numbers) — to unite 

these closed networks. For a long time they 

were islands unto themselves, unable to 

communicate with each other directly. 

This fragmented and closed approach did 

not help when the world made the leap to 

smartphones. Instead, desktop IM quickly 

lost mobile market share to new, native 

mobile OTT apps like WhatsApp and Viber, 

apps that are likewise closed networks. 

WhatsApp, Viber, Facebook Messenger — 

each requires users to be on the same app 

in order to communicate. It’s up to users 

to make sure all their friends and family 

members have also downloaded the app 

— and understand how to use it — before 

they can send a message or make a call, 

not exactly the best user experience. 

Despite their shortcomings, these OTT apps 

— and the closed networks they support — 

count a significant number of users. There 

are two market conditions that have allowed 

these apps to grow their reach. 

First, the app distribution model is frictionless 

and efficient, allowing users to download 

these apps quickly and easily to their 

smartphones. Second, consumers have 

come to demand more choice than MNOs 

and their OEM partners currently provide. 

Users want it all: group messaging, walkietalkie, 

rich picture messaging and sharing, 


163

video calling, social networking, and more, 

all in one convenient place. And they want 

these features at a lower price point than 

their MNOs provide. 

The good news: Consumers have a healthy 

appetite for OTT apps. The better news: not 

all OTT apps bypass MNOs and disrupt their 

business models. NUVOs like textPlus cover 

the bases to meet consumer demand for 

better features, thus pushing the boundaries 

of what is possible in communications, while 

maintaining MNOs’ traditional central role 

in the communications ecosystem. 

One of the immutable laws of telecommunications 

is “just interconnect.” This is where 

the PSTN with its 8 billion E.164-standard 

telephone numbers enables everyone to 

connect with everyone else. It’s ubiquitous 

— and it’s easy. Everyone knows how to use 

a telephone number, and no one needs to be 

invited or read the FAQs to use it. It just works. 

Granted, these new, closed IM/OTT 

networks may continue to gain traction, 

but their reach and communities will likely 

remain significantly smaller than the 

PSTN. This difference translates into less 

utility for IM/OTT users and more opportunity 

for NUVOs and the ecosystem they 

enable together with MNOs. 

NUVOs like textPlus enable all the fantastic 

features one expects from a smartphone 

app — and more. In addition to connecting 

its users to MNOs and the broader telecom 

ecosystem via real telephone numbers, 

NUVOs provide the following benefits: 

• Enabling communication with the PSTN 

and its 8 billion telephone numbers - the 

largest social network in the world 

• Turning connected, non-telephonic 

devices – like iPod touch, iPad and 

tablets – into functional phones by 

giving them a real telephone number 

• Driving traditional SMS and voice 

traffic volumes, as well as data 

• Leveraging the common, wellunderstood 

user behavior of dialing 

telephone numbers to make ubiquitous 

communications possible via 

smartphone applications 

• Providing a better 

alternative to all-IP 

OTT apps, thus keeping 

MNO voice/SMS/data 

services central to the 

mobile Internet 

164

The good news: Consumers have a healthy 

appetite for OTT apps. The better news: not 

all OTT apps bypass MNOs and disrupt their 

business models. 

Austin Murray is Founder and President 

of textPlus, Inc., a leading mobile communication 

destination. Prior to textPlus, Murray 

co-founded wireless entertainment publisher 

JAMDAT Mobile, and held positions at 

a variety of digital content companies. 


165


OTT Ecosystem: Paving The 

Way For Opportunity 

By Gene Lew, CTO, MediaFriends, Inc. 

The mobile app market is more 

than a new distribution channel 

for applications and software. 

It ushers in a new business paradigm. 

As a result, companies and 

individual developers can market 

and monetise their mobile apps 

supported by an ecosystem where 

mobile operators no longer have 

complete control. 

As of June 2012 the app stores combined 

offered 500,000+ mobile applications. 

Many of these apps rely on a freemium 

business model to generate revenues and 

reach customers. In practice this model 

allows various monetisation approaches. 

For example, advertisers or other third 

parties can sponsor the app, thus subsidising 

the cost of providing the services and 

functions delivered by the app. This model 

is similar to the one that defined the 

‘dotcom’ era. But there is a difference 

because investors have learned from the 

dotcom bust that a business built on 

‘eyeballs’ alone — without a path toward a 

sound business model — is fatally flawed. 

Freemium models also centre on charging 

one-time fees for downloading the app, 

or collecting ongoing monthly/annual fees. 

Finally, freemium models also support a 

pay-as-you-go approach. 

Are these the only monetisation models? 

It’s hard to say. The avalanche of apps 

— from games and entertainment, to social 

networking and business productivity — 

would indicate that the app market is just 

beginning. There is much to come and there 

is no telling what monetisation models will 

emerge to enable this new economy. 

After all, billing is not the business of OTT players. 

They are focused on innovation and delivering 

apps their users will appreciate. 

166

Figure1: Based on data from MediaFriends. 

The rise of the OTT 

A popular app category is communications. 

These apps provide services — such as 

voice, SMS, MMS and video, but they do 

this without using the mobile networks 

owned and managed by mobile operators. 

Instead, they perform all the functions 

within an all-IP realm, and only ‘gateway’ 

into the SS7 world when necessary. These 

apps allow communications over the top 

of operator networks — which why they 

are known as OTT. 

A prime example of an early OTT app is 

Skype. It started on the PC and migrated to 

smartphone platforms. Based entirely on IP, 

this app offers voice, video and data services. 

These are the same services — voice, SMS/ 

MMS and data — supported by feature 

phones and delivered by mobile operators. 

Another example is Apple’s iMessage. 

This OTT app provides the native SMS/MMS 

functionality as well as other capabilities 

and services (only available via IP). But 

there’s a catch, Apple’s iMessage only 

works with other Apple devices. If the user 

is sending a message to a non-Apple device, 

or an Apple device that does not have IP 

connectivity, the app falls back on SS7, the 

default transport of the operator’s SMS. 

Because Apple’s iMessage is IP-based, it 

also allows additional functionality, such as 

SMS, that is not supported by SS7 services. 


167

Mobile Device 

Mobile Device 

Applications 

IP 

IP 

Applications 

Apple iOS 

IP 

Apple 

iMessage 

IP 

Apple iOS 

Carrier 

SS7 

SS7 

Carrier 

Figure 2: Based on data from MediaFriends. 

Apple’s iMessage also provides presence 

and real-time notifications, features that 

SMS doesn’t support. 

agnostic and uses IP — a default for every 

network and one that works anywhere in the 

world and is not limited or constrained by 

geography, operator or technology. 

More functionality 

OTT apps are IP-based, which means they 

are not limited by SS7. In fact, just the 

opposite is true. This opens the door to a 

variety of ways to enhance communications 

and deliver a good user experience. 

The OTT app HeyWire, offered by 

MediaFriends, — is a good example. It 

provides real SMS text messaging. But it 

also allows Twitter and Facebook messaging, 

as well as a plethora of other services 

that only an IP-based platform can deliver 

such as cloud-based storage and multidevice 

honing. Finally, the app is network 

The MediaFriends, product BNDWGN is a 

prime example an OTT service that is not a 

replication of a legacy operator or SS7 

based function (voice, SMS, etc.). Instead, 

BNDWGN is a completely “new” app that 

is specifically designed for mobile use. 

The OTT app BNDWGN enables users to 

combine and share social media in private 

groups, and message one another about 

common social media interests. This is 

done using graphics, video, text (not SMS), 

Twitter, Facebook, Pinterest, and many other 

popular social media content sources. 

168


Cooperation breeds success 

The rise of OTT players and apps has 

created conflict between multiple players 

in the ecosystem. Some operators believe, 

rightly or wrongly, that OTT players are 

getting a free ride over their infrastructure. 

At the other end of the spectrum, some 

OTT players feel they are unjustly restricted 

by rules and models dating back to an era 

when operators were in control. 

The conflict isn’t new. Operators and 

OTT players have competed head-on since 

Skype launched in the 1990s. As more OTT 

players entered the market, the conflict 

grew. Today WhatsApp, a private messaging 

product, dominates in several markets 

around the world. Other ‘not so good’ OTT 

players have been banned by government 

regulators, or blocked by operators. 

But there’s no reason to generalise and 

declare that OTT apps, as a category, pose 

a threat to operators. In many ways these 

players — the operator and the OTT provider 

— need one another. 

Cooperation between operators and OTT 

players can yield a richer, more diverse and 

robust ecosystem. This positive outcome 

is similar to the Internet, which has evolved 

by meshing proprietary, isolated environments 

into an open and collaborative 

market. The outcome is an open Internet 

and one that has indisputably generated 

more benefits and opportunity than all of its 

proprietary predecessors. 


169


More is better 

On one hand, the operators provide the 

underlying infrastructure of mobile technology, 

facilitating the complex management of 

the network and the services it delivers. In 

other words, it is the operator that ensures 

the core foundation of the OTT app. This is 

significant since operators ensure that the 

IP transport and the associated technology 

surrounding it are robust, reliable and fast. 

On the other hand, the OTT players have 

the flexibility and innovation to deliver 

the functions and apps that address the 

ever-evolving needs of customers on an 

international scale. 

Cooperation and partnerships between 

operators and OTT players is essential and 

mutually beneficial. In the past, operators’ 

reach was often limited by geography. Today 

operators can forge partnerships to give 

them international customer reach instantly, 

and without huge investments of capital 

and resources. 

Taking billing, for example. A partnership 

with operators would allow OTT players 

access to operator billing capabilities. And 

it doesn’t stop there. Operators can also 

build a business offering OTT players access 

to technology unique to mobile operators, 

such as geo-location, as well as the databases 

operators manage to resolve 

payments and allow financial reconciliation. 

170

But there’s no reason to generalise and declare that 

OTT apps, as a category, pose a threat to operators. 

In many ways these players — the operator and the 

OTT provider — need one another. 

This is critical since the monetisation 

models for apps are still evolving. Clearly, 

freemium and paid models dictate how 

companies currently monetise their apps, 

but this could change. 

For this reason, it would be mutually 

beneficial for both parties if OTT players 

had the billing capabilities —provided by 

the operator — to invoice users on a 

recurring basis. After all, billing is not the 

business of OTT players. They are focused 

on innovation and deliv ering apps their 

users will appreciate. Even the app stores 

offered by Apple, Google and Microsoft are 

limited in their ability to do recurring billing 

on regular cycles. Moreover, custom service 

billing is a difficult, if not impossible, task. 

It’s a given that the ecosystem will eventually 

become an all IP-based environment. 

It’s just a matter of time. 

The inevitable arrival of an all-IP world 

also reinforces the needs for deeper partnerships 

between operators and OTT 

players. After all, OTT apps play an important 

role in helping to shape and drive the 

demand for services that require an all-IP 

ecosystem. It is therefore critical that 

operators and OTT players work together 

to determine what an all-IP ecosystem 

will look like and deliver. In this new environment 

the winners will be the players that 

work together to innovate and adapt to the 

lesson of the Internet: open is better. 

Gene Lew has more than 25 years of 

technology management and engineering 

experience in the Internet, mobile, telecom, 

cable, and multimedia industries. He has 

worked with some of the world’s largest 

operators and involved in the development 

of key IP communications technologies, 

including broadband, FTTH and messaging 

services. Before joining MediaFriends, Lew 

served as VP of IP Advanced Technology 

for NeuStar; CTO for PAIX/Switch and Data; 

VP Advanced Technology for RoadRunner 

of TimeWarnerCable; VP Advanced Technology 

for Verizon and began his career with 

MCI focusing on IP technology before “IP 

was cool”. 


171

172 

PART SIX 

UNLEASHING THE POWER 

OF MOBILE COMMERCE

PART SIX: UNLEASHING THE POWER OF MOBILE COMMERCE 

Mobile Money For The Masses 

By Richard Morecroft, Assistant Director Mobile Money, Qtel 

Qatar Telecom (Qtel) has built its 

Mobile Money service from the 

ground up to satisfy the needs of 

two different customer segments. 

On one level, average Qatari 

residents rely on the Mobile Money 

service to pay their monthly mobile 

phone bills — and will soon be able 

to make merchant payments and 

purchases using their Qtel mWallet. 

At the other end of the spectrum, 

migrant workers without bank 

accounts use the Qtel Mobile 

Money service to send money 

back home, add airtime to their 

pre-paid account and send airtime 

as a gift to family and friends. 

To date Qtel counts around 2.38 million 

customers, a significant proportion of whom 

are migrant workers who traditionally work 

in the construction sector. They come from 

countries across the South Asian continent, 

including Nepal, India, Bangladesh, and 

Sri Lanka. These workers generally earn 

between $150 and $500 a month, and they 

demand a service that allows them to remit 

most of their monthly salary to their families 

in their home countries. 

Of course, the Qtel Mobile Money service 

caters to this demographic, making sure 

that the service works on all mobile phone 

makes and models, including low-end 

feature phones. But we have also taken this 

approach one giant step further, making it 

possible for the Mobile Money customers 

to use Qtel’s own network of Self-Service 

Machines, or SSMs. 

Like ATMs, the SSMs allow customers 24/7 

access to deposit their money (in cash) and 

conduct transactions. Customer can also 

use these machines to top up their pre-paid 

cards and pay their phone bill. We have 

deployed more than 200 of these SSMs 

across the country. 

These locations — together with a network 

of more than 20 retail shops — strengthen 

Moving forward, we are considering plans to expand 

the service to offer additional financial services such 

as insurance and micro-loans. 


173

Qtel’s market presence. They also lay the 

groundwork for an innovative strategy that 

will extend Qtel’s influence and offer far 

beyond what mobile money and banking 

services deliver today. 

network of SSMs and ATMs when they 

want to make a cash withdrawal. It’s simple 

and it’s secure. 

Mutual benefit 

Easy does it 

Take remittance for example. We know it 

is possible to transfer money using mobile 

phones and text message services that 

automatically updates the mobile wallet, 

but is it really convenient for customers? 

At Qtel we think there must be an easier 

way. Specifically, we envision that this can 

be done as a wallet-to-wallet transaction. 

Moreover, we believe the service must be 

extended into ATMs. This is why we have 

released cardless cash in and out, a service 

that harnesses the network of ATM’s by 

enabling customers to deposit and withdraw 

money by entering a secure code received 

by SMS without the need for an ATM card. In 

practice, this new service allows customers 

the flexibility to put their money into their 

mobile wallet through Qtel’s self-service 

machines. Likewise, they can also withdraw 

their money in cash by using the ATMs 

managed by Qtel’s partner bank Qatar 

National Bank (QNB). In other words, 

customers can use their mobile for mobile 

banking, and they can access the vast 

The Mobile Money service is also frictionless 

because we have a forged a solid partnership 

with a leading bank, thus overcoming 

the tensions that traditionally exists 

between banks and mobile operators to 

focus the efforts on achieving a common 

objective. It’s all about serving the customer 

and building the customer base. 

Why does the relationship work? You need 

to look at the region, Qatar is a developing 

market, which means that a significant percentage 

of the population is under-banked. 

In Qatar arguably up to 75 percent of the 

country does not have access to financial 

services, but they do have mobile phones. 

Put another way, the under-banked are more 

likely to have established relationships with 

mobile operators. What’s more, operators 

are in a prime position to encourage their 

customers to use mobile banking services. 

Not so for the banks. They don’t have this 

long-standing relationship with the lowerincome 

customer because these customers 

don’t have bank accounts. To complicate 

174

Total mobile payment market ($ millions) split by eight key regions, 2012-2017 


$1,400,000 


Indian Subcontinent 


Central & Eastern Europe 


Latin America 

North America 

$0 

2012 

2017F 

Figure 1. Source: Juniper Research. (1) 

matters, the effort to reach out to this 

customer segment would require banks to 

invest in a complex and expensive network 

of bank offices. It’s what they want to avoid, 

so they partner with mobile operators to 

reach these customers. 

It’s a completely different picture in developed 

markets such as Europe and North 

America. In these countries customers are 

not under-banked, nor are they underserved 

by the banks operating in these countries. 

This has a huge impact of how banks and 

mobile operators can work together. 

Footnote 

1. www.juniperresearch.com/reports.php?id=446 


175

Instead of cooperating and collaborating 

to increase reach and grow their customer 

base, banks and mobile operators in developed 

markets are competing head-on for 

the same customers. Little wonder industry 

observers warn mobile operators and all the 

other companies in the emerging mobile 

money ecosystem — banks, credit card 

companies and payments providers — 

are heading for a showdown. 

Another point in our favor is regulation. The 

regulatory environment in Qatar is different 

from other regions, allowing us to partner 

with the QNB. The agreement, under the 

guidance of the Central Bank, allows us to 

take deposits and deposit these into a bank 

account. Of course, financial regulation does 

limit the amount of money that can be transferred 

and these limits need to be clearly 

explained and indicated to customers. 

Gaining serious traction 

The Qtel Mobile Money service targets the 

under-banked, providing them a service that 

allows money to be paid into their mWallet. 

Moving forward, we are considering plans 

to expand the service to offer additional 

financial services such as insurance and 

micro-loans. 

But it’s not limited to making banking 

simple and convenient for the underbanked. 

Our Mobile Money service also 

benefits the country’s wealthy, providing 

them a secure and simple way to do their 

banking. In many cases, this affluent 

customer segment employs staff — maids, 

gardeners, cooks — who don’t have bank 

accounts. With our Mobile Money service 

it is possible to pay staff directly and 

electronically, rather than cash. 

There are also plans to enable merchants 

to accept electronic payments from 

customers. They can then either withdraw 

the money from their mWallet, or move 

the money to a bank account at their 

convenience. In this sense, we’re actually 

replacing the electronic point-of-sale. 

We’re also looking at delivering services 

aimed at allowing customers to pay their 

monthly utility and water bills. Beyond the 

obvious benefits around security and 

convenience, enabling these payments 

would also provide customers another 

reason to have an mWallet. 

Powerful assets 

Mobile Money services have gained traction 

since we took the wraps off the first offer in 

November 2011. The next phase of growth 

176

Instead of cooperating and collaborating to 

increase reach and grow their customer 

base, banks and mobile operators in 

developed markets are competing head-on 

for the same customers. 

and opportunity is on the horizon, and it 

will be about convenience and enabling 

everyone to pay for goods and products 

electronically at retail. 

How do we get there from here? The good 

news: mobile operators already have a deep 

relationship with their customers based on 

trust. Our own research shows that our 

customers are very comfortable with Qtel, 

a mobile operator, handling their money. 

The even better news: technology is not an 

issue. In fact, it’s easy to imagine a scenario 

where I buy goods in a supermarket using 

my Mobile Money service. 

would receive a text message on my 

phone confirming my purchase. 

All that is possible right now. 

But it becomes tricky in a scenario where we 

want to enable this seamlessly on a larger 

scale. For example, what happens if I want to 

a shop at a supermarket where the partner 

bank for the Mobile Money service — in this 

case, QNB — isn’t the acquirer bank for the 

supermarket? It’s a tough question. 

NFC challenge 

In practice, this is how it would work. I would 

make my decision to pay for my groceries 

using Mobile Money, then I would be directed 

to the terminal. There I would pay by 

simply inputting my number and the fourdigit 

PIN that I was provided for authentication 

when I signed up for the Mobile Money 

service in the first place. To close the loop, I 

Interestingly, this is where NFC may provide 

an answer. NFC provides the second level of 

authentication that banks require because it 

enables secure communication between the 

phone and the terminal. 

The big question is: is NFC coming fast 

enough? In my view, it will likely be 3 to 5 


177

five years before 

NFC becomes 

mainstream. 

Why? Because 

smartphone 

penetration has 

changed all the 

rules. 

Put another way, 

smartphones 

— which are 

mini-computers 

— have a longer 

shelf life than 

Figure 2: Based on data from QTel. low-end feature 

phones. These 

devices are also 

more expensive than feature phones, which 

mean they require longer contracts. The 

result is a slowdown in the handset replacement 

cycle — and that presents the industry 

with a huge challenge. After all, NFC take up 

and use depends on consumers having NFCenabled 

devices. 

What can be done in the interim? It’s a 

tough one to call, but it’s also clear that 

we in the industry can’t be spectators. 

In Qatar our partner bank QNB has begun 

rolling out contactless payment terminals. 

At Qtel we have also collaborated with QNB 

and MasterCard to deliver an NFC solution 

to market that caters to these bank customers. 

In summary, we have an NFC solution in 

the market right now, but it’s not targeted at 

our Mobile Money customers — yet. 

Clearly, the industry is only on the cusp of 

realising the full potential of mobile money 

and mobile banking services. At Qtel we 

have made our mark with the Mobile 

Money services, services we can — and 

will — expand and enhance to serve the 

two distinct customer segments: migrant 

workers and affluent residents. Our experience 

has shown that technology is a factor, 

but it’s the ability to satisfy increasing 

customer demands for convenience and 

security that is at the core of lasting success. 

Richard Morecroft has over 25 years experience 

in telecommunications. He spent the 

first 11 years serving in the U.K. armed 

forces in locations all over the world. Since 

leaving he has led projects and businesses 

that have transformed the consumer telecommunications 

space including building 

AOL’s UK internet access platform and 

launching the U.K.’s first “Free” broadband 

business at TalkTalk. Morecroft joined Qtel 

in 2008 to lead the new and emerging 

business team. 

178


Driving Mobile Money Usage 

In Unbanked Regions 

By M. Yasmina McCarty, Senior Manager, GSMA MMU 

(Mobile Money for the Unbanked) 

The mobile money industry is 

growing fast. Today there are over 

130 live mobile money deployments, 

up from the approximately 

20 at the beginning of 2009. There 

is also a significant increase in the 

number of registered users. The 

GSMA Global Mobile Money 

Adoption Survey counted over 60 

million registered mobile money 

customers as of June 2011 and 

found a 49 percent growth rate 

in the number of subscribers 

from 2010 to 2011. 

The top line growth has been impressive, 

but customer activation rates lag behind. 

Excluding the active mobile money customers 

of Safaricom’s M-PESA and Smart, there 

were just six million active mobile money 

customers as of June 2011. Activity rates 

across deployments also varied quite 

significantly with some mobile money 

deployments having just 0.2 percent of their 

registered customers’ active, while others 

boasted an 80 percent active customer rate. 

The Mobile Money 

customer journey 

Customer activation has shown to be a 

significant hurdle and a number of mobile 

money services find themselves facing 

these common challenges: 

• Customers are aware of the mobile 

money service, but do not understand 

how it could be beneficial to them 

• Customers get bogged down in the registration 

process and never try the product 

The trick is to identify which marketing 

mechanisms are effective at each stage in the 

customer journey and which elements of the 

marketing toolbox are simply not effective 


179

Number of registered customer accounts by service, June 2011 

millions 

16 

14 

49% 

CAGR 

Increase in the number of 

mobile money customers 

in the second half of 2011 

12 

10 

8 

6 

4 

2 

0 

Between 31 December 2010 and 30 June 2011, the number of registered mobile money 

customers of the services in our sample-excluding Safaricom, SMART, and Globe-grew 

at an annualised rate of 49% 


www.gsma.com/mobilefordevelopment/wp-content/uploads/2012/05/MMU_State_of_industry_AW_Latest.pdf 

180

Unaware 

Awareness Understanding Knowledge Trial 

Regular Use 

Customer 

has never 

heard of 

mobile 

money 

Customer has 

heard of 

mobile money 

and knows 

what it is 

Customer 

understands 

how mobile 

money could 

be useful to 

them 

Customer 

knows the 

steps 

necessary to 

transact 

Customer 

tries the 

service 

Customer 

habitually 

uses the 

mobile 

money 

service 


• Customers don’t understand the 

mechanics of performing transactions 

and are hesitant to try something as 

novel as mobile money 

• Customers don’t trust the operator’s 

brand or network and are hesitant to 

conduct financial transactions 

Understanding the mobile money customer 

journey can shed light on the issues which 

lead to customer inactivity. The customer 

journey, as shown below, is comprised of 

6 stages: (1) unaware, (2) awareness, (3) 

understanding, (4) knowledge, (5) trial, 

and (6) regular use. 

• Awareness & Understanding: At the 

start of the customer’s journey, customers 

become aware of the existence of a 

mobile money service. But it’s not enough 

to simply know the name of the mobile 

money service or even what the mobile 

money service is. Rather, mobile money 

services must also build understanding 

to help users see how this new service is 

both relevant and beneficial to them. 

• Knowledge: Once the customer understands 

what mobile money is, what it 

does and how it could be useful to them, 

the customer needs to learn how to 

transact. This customer education 

typically requires the assistance of 

mobile money agents, or a friend and/ 

or family member. 

• Trial & Regular Use: Once a customer is 

aware of the mobile money service, knows 

what it is, is convinced that it can be 

useful for them, and understands the processes 

for performing transactions, then 

they are ready for to try the service. After 

a number of positive transaction experiences, 

users can become regular users. 

Whilst not listed as a separate step in the 

customer journey, the customer registration 

process is an important consideration. 


181

Mobile money services that can be accessed 

over-the-counter, allow customers to 

become regular users before they register, 

and therefore make the registration step a 

non-issue. However wallet based services 

typically insist on some type of registration. 

In situations where customers struggle to 

meet KYC requirements, the registration 

process becomes so onerous, that customers 

would rather not enrol in the service. 

Effective approaches for 

driving usage 

Financial services are more complex than 

mobile value-added services because they 

must meet a wide variety of customer needs 

and requirements. For this reason, market 

segmentation is essential to develop a comprehensive 

marketing strategy. 

Need-based segmentation can be a useful 

first step, quantifying the customer segments 

which have frequent need to make 

high volumes of remote payments. It is 

important to have a reasonably large initial 

target market in mobile money for two 

reasons: 1) because of the strong economies 

of scale present at both the platform 

and the agent level, and 2) because transfer-oriented 

mobile money services benefit 

from strong network effects. 

Equally important as the size of a segment 

is the intensity of the demand. To put this 

more strongly, operators can focus on the 

segment of customers that is suffering from 

the most acute ‘pain points’ that mobile 

money might solve. 

With the target market selected, mobile 

money marketing is the process of 

persuading potential customers to become 

regular users. Operators have a range of 

marketing tools that they can use to help 

customers along this journey. The trick here 

is to identify which marketing mechanisms 

are effective at each stage in the customer 

journey and which elements of the marketing 

toolbox are simply not effective. 

Awareness-building campaigns, typically 

done through mass media advertising 

campaigns, help customers learn what 

mobile money is and how mobile money 

might be useful to them. Beyond these ATL 

campaigns, however, a significant amount of 

work remains to be done to compel users to 

actually try the service. Customer education 

typically requires a more personal approach. 

As such, operators should leverage transactional 

agents, field agents, and/or current 

users to guide potential customers from 

awareness to use. 

182

Market segmentation is essential to develop 

a comprehensive marketing strategy. 

To leverage mobile money agents for 

effective BTL customer activation, there 

are three important considerations: 

1 Training: Well-trained agents are proven 

to be effective in driving customer 

activation 

technological platform, well designed 

products, and an enabling regulatory environment. 

But, if customers do not see the 

value in the service, or do not know how to 

use a product, then the success of the 

business can be severely hindered. 

2 Incentives: It is important that agents 

have been incentivised properly for 

both registration and usage, and for 

the balance between those incentives 

to be right 

3 Oversight: Agents can be a powerful 

force for driving customer adoption. 

Unfortunately, if unsupervised, these 

agents can just as easily drive 

customers away. 

Driving customer adoption and increasing 

activation rates in mobile money is no easy 

task. But understanding the customer 

journey, segmenting and prioritising the 

target market and identifying the best 

suited marketing tactics to move the user 

through each stage of that journey, can 

help mobile money services achieve high 

customer usage rates. 

In her role as Senior Manager at GSMA’s 

Mobile Money for the Unbanked programme 

M. Yasmina McCarty works with Mobile 

Network Operators in emerging markets 

on their mobile money services. Prior to 

joining the GSMA, she co-founded and led 

GreenMango in India and held positions at 

Women’s World Banking, working in microfinance 

in LAC, Africa and South Asia, and at 

Goodby Silverstein & Partners, working on 

marketing and advertising. To read the full 

version of this article, visit mmublog.org . 

A mobile money deployment can have all 

the right conditions in place such as a 

ubiquitous and liquid agent network, reliable 


183


Blueprint For A Successful 

Remittance Service 

By Diarmuid Mallon, Head of Global Mobile Marketing Programs, 

Programs & Demand Generation, SAP 

Without a doubt the single most 

successful mobile payment service 

for operators has been person 

-to-person (P2P) payments. 

Safaricom, a mobile operator 

in Kenya, led the way with their 

groundbreaking M-PESA service. 

Since then many other operators 

have launched mobile payments 

on the back of that success. 

But winning is not about being a first-mover 

or a fast-follower. Market conditions are 

decisive here. For an operator-led P2P 

payments scheme to succeed within a 

country there must be some very specific 

market conditions. Chief among these: a 

single operator must have the dominant 

market share. In other words, there is no 

room for market rivalry when the goal is to 

deliver a successful P2P payments service 

like M-PESA. This explains why P2P is 

not the killer app for most operators. 

Beyond that initial hurdle, operators face 

two other challenges. First, frequency, that 

is, how often consumers would use such a 

service. After all, buying a coffee is something 

people do every day, buying a concert 

ticket, on the other hand, is a service most 

people might only use once a year. 

Second, interoperability with other payment 

services. The cash in your pocket works for 

any proximity payment, and the credit card 

in your wallet works in many remote and 

proximity payment scenarios. For an 

operator considering offering a new payment 

method, it clearly either needs to work 

in wide range of scenarios, or offer clear 

benefits over existing payment methods. 

How do people use these services? And 

how often do they really need them? Our 

Our experience is that the more steps there are to 

sign-up, and the longer the wait from initial sign-up 

to the service being active, the lower the success 

rate for enrolling consumers. 

184

Total value of international mobile money transactions sent p.a ($ billions) 

Split by eight key regions 2011-2016 

$60 



Indian Subcontinent 


Central & 

Eastern Europe 


Latin America 

North America 

$0 

2011 2016 

Figure 1. Source: Juniper Research (1) 

Footnote 

1. www.juniperresearch.com/reports/mobile_money_transfer_and_remittances 


185

own daily routines provide some clues. Ask 

yourself: How often do you need to give 

money to any other person, and in what circumstances? 

Sure, you might loan someone 

some cash for lunch, but it is not something 

people do regularly. In reality, many P2P 

mobile payment services are not focused 

on this scenario. First and fore-most, they 

enable people to send money back home. 

Now let’s consider the few occasions when I 

want to send money to a friend or colleague. 

Are they on the same mobile network? If 

not, then how do I send funds from one 

mobile wallet to another? Clearly, interoperability 

is critical to make these services work 

end-to-end. Currently, only a few operators 

are working on interoperable wallet solutions. 

Among these Telefónica, Qtel and 

the Axiata Group are notable examples of 

interoperable schemes. 

P2P playbook 

The real opportunity for P2P payments is 

remittances. A remittance is a lot like a P2P 

money transfer, except the amount transferred 

leaves the country. 

But don’t break out the champagne just yet. 

Like P2P payments there are a number of 

challenges to overcome before remittance 

services really deliver. These are: the initial 

Sign-up, the KYC (know your customer) processes, 

and details around how consumers 

get cash-in and cash-out of the service. 

Before customers can use a remittance 

service they must first be enrolled. Ideally, 

the registration process should be fast and 

straightforward. After all, keeping it simple is 

the best way to ensure maximum take-up of 

the service. Our experience is that the more 

steps there are to sign-up, and the longer 

the wait from initial sign-up to the service 

being active, the lower the success rate for 

enrolling consumers. 

Keeping enrolment quick and simple 

needs to be balanced with additional KYC 

requirements that are core to a remittance 

service. Many mobile remittance services 

accomplish this by making use of the 

existing operator retail store networks. The 

benefit to the operators is that they can use 

their staff, IT systems and much of their 

existing business process when on-boarding 

new users of the service. 

Research firm Juniper Research estimates 

the total value of mobile remittance worldwide 

will be nearly $55 billion by 2016. This 

underlines the real potential of this market. 

In Malaysia Celcom has gone one step 

further. It allows new customers to enroll 

for the remittance service direct from their 

mobile phone. The final stage of the KYC 

186

However, if you must enable customers to 

send funds that be withdrawn as cash, then 

you can’t go it alone. 

process is completed when these customers 

enter a Celcom store to deposit or 

withdraw funds. 

local operator store, then there is no clear 

benefit for the consumer. And there is absolutely 

no reason to use a mobile phone to 

make the transfer. 

Successful approaches 

If the concept of on-device sign-up for a 

remittance service seems daunting, then 

there are other blueprints you can follow. 

It’s worth looking at how banks handle this 

task. South Africa’s Standard Bank, for 

example, has not stopped at streamlining 

the sign-up service. It allows people to open 

up a full service bank account using only 

their mobile device. 

Cash-in is another area to address. The 

value proposition behind remittance services 

is centered on convenience. In other 

words, it must be simple and easy for customers 

to use these services. In the real 

world migrant workers already line up at 

money transfer stores on payday to send 

money home. If all a remittance service 

does is swap the line they would stand in at 

the money transfer store for a line at the 

This is why Qtel in Qatar has come up with 

an entirely new approach that joins our 

mobile and physical worlds. The mobile 

operator has launched a remittance service 

that is also supported by a network of 

self-service machines, or SSMs. 

After the initial sign-up in the operator retail 

store, users of their remittance service can 

use these SSMs to add funds into their 

mobile wallets. Once the funds are loaded, 

the consumer can make the money transfer 

using their mobile phone at a time that suits 

them. Another plus: these SSMs, which are 

located in shopping malls, are convenient to 

access, so users can easily use one without 

taking a detour from their usual routine. 

Finally, there are a variety of challenges that 

complicate cash-out, the last stage of the 

remittance transaction. While there is no one 

solution, there are several options to consider. 


187

One option is to not send cash at all. 

Instead, create a service that allows people 

to transfer airtime, rather than cash, from 

their mobile wallet. This is what Celcom 

does to enable airtime remittance. This 

enables consumers to remotely transfer 

airtime credit instead of money as an international 

remittance. Since the transfer 

involves airtime the rules governing the 

remittance are much simpler than they 

would be if the pay-out was cash. With 

fewer regulatory hurdles to negotiate, the 

service is also much quicker to implement. 

Building an ecosystem 

However, if you must enable customers 

to send funds that be withdrawn as cash, 

then you can’t go it alone. 

You will need to form a partnership with a 

local entity on the receiving side of the 

remittance transaction. Some operators 

partner with existing money transfer networks. 

In practice, this enables the receiver 

to collect the sent funds via agent networks 

of these services. 

Other operators work with local banks. This 

has advantages because it allows the receiver 

to use bank branches or even ATMs to 

withdraw funds. Against this backdrop, we 

are starting to see Wallet-to-Wallet transfers, 

where both sending and receiving sides 

have mobile wallets. 

Once you have a wallet funded remittance 

service in place, there are two ways to grow 

the service. First, add more remittance 

routes. What corridors should be included? 

This decision will be driven by demographics, 

and the requirement of specific 

customer segments — such as migrant 

workers — to use your service to send 

money back home. It’s also a good idea to 

look at your international P2P SMS traffic 

for clues to help identify potential new 

remittance corridors. 

Second, you can grow the service by adding 

more services to the Wallet. The lead 

services for this are prepay top-up and bill 

pay. In Qatar Qtel has boosted its mobile 

wallet service with salary disbursements for 

small business. This allows small business 

owners to pay their workers direct to their 

mobile wallet. To enable cash-out Qtel has 

also partnered with a local bank to tap into 

the bank’s network of ATMs. 

A review of the mobile remittance services 

available today reveals a variety of different 

approaches to tackle the challenges of 

sign-up, cash-in and cash-out. Clearly, operators 

interested in launching their own 

remittance service need to identify an 

approach that best matches their local 

188

market conditions and customer needs since 

no one approach is universally applicable. 

The different challenges — when addressing 

both the needs of the sending side and the 

receiving side of the transaction — require 

a considered approach to service design. 

Once the initial remittance corridor/service 

is successful, and the service expands with 

the addition of new remittance routes, new 

challenges will surely arise because each 

country has its own financial and mobile 

operator requirements and regulations 

regarding money transfers. The wide range 

of potential solutions means you need to 

ensure you have the flexibility within your 

solution that will enable you to expand 

to new markets and match those local 

market requirements. 

Diarmuid Mallon is Head of Global Mobile 

Marketing Programs for SAP, which includes 

the SAP Mobile Services division and SAP 

Mobile Commerce solutions. Before joining 

SAP, Diarmuid was Product Manager of 

Logica's Wireless Networks division. He has 

worked in mobile messaging since 1996, 

holding a wide variety of range of roles and 

titles ranging from Business Development 

to Product Evangelism. Follow him on 

twitter @diarmuidmallon and read his blog 

at http://scn.sap.com/community/mobile. 


189


Operators: Tap Your Strategic Assets 

By Aditya Khurjekar, Co-Founder and Program Director, Money2020 

Mobility — like transportation 

and electricity — is an increasingly 

powerful enabler for many other 

industry sectors. A prime example 

is banking and financial services. 

This is a space that benefits greatly 

from advances in mobile technologies, 

open platforms, and efforts to 

deliver engaging user experiences. 

While mobile wallets and digital 

currencies are the center of attention 

in the market and the press, 

we see the potential for some key 

infrastructure innovations to 

surface at this fascinating intersection 

of multiple industries. Mobile 

operators bring many core assets 

to this emerging ecosystem. 

Whilst mobile operators are uniquely 

positioned to bring these core capabilities 

to the table, they are probably not leveraged 

to their full potential due to the historical 

relationships — and tensions — in the 

financial services value chain. Moreover, 

all services related to money are heavily 

regulated. For sustainable and at-scale 

innovation in mobile payments and 

commerce, existing mobile-unique 

capabilities must be brought to bear 

in the infrastructure layer of payments 

and commerce, not just in the end 

user experience. 

Mobile enables many consumer-facing 

technologies, especially on the handset, 

that provide better interactivity, richer 

experiences, and choice in how customers 

consume financial services innovations 

offered to them by service providers using 

the mobile channel. Against this backdrop, 

there are several operator-owned assets 

that are not fully appreciated. But it is 

precisely these operator assets that can 

provide valuable enabling capabilities, 

skills that are beneficial and essential to 

creating compelling user experiences. 

In this article, I outline three unique and 

strategic operator-owned assets that can 

be leveraged to deliver superior mobile 

payments and commerce propositions. 

It is here that mobile operators excel; they 

have continuously launched new products 

and services successfully for decades. 

190

1 Operator-Grade Billing Systems 

Mobile Operators, cable companies and 

Internet Service Providers serve tens of 

millions of customers. Larger companies 

serve a hundred million subscribers and 

more. Their mission-critical billing and 

rating systems support their subscribers 

during every transaction and at every 

billing cycle. These capabilities also allow 

these companies to maintain critical 

subscriber information — such as name, 

address, and personal data — and, in 

some cases, even payment credentials. 

More importantly, for post-paid subscribers, 

operators can build bill payment 

histories. Such rich information, both 

the static identification data as well as 

dynamic/cumulative data, is extremely 

valuable to a financial institution or 

online merchant for a variety of reasons. 

Specifically, financial institutions and 

merchants can use this operatormanaged 

subscriber data to establish 

the identity of their customers, assess 

the credit worthiness of customers 

when assigning a risk profile, or simply 

complete a checkout with minimal user 

intervention on a connected device. 

the operator with their personal information 

and volunteer it freely to receive 

and benefit from services provided by 

the operator. If the operator enters into 

an agreement with a company in the 

financial services sector, and agrees to 

share subscriber or billing data, then it is 

the respons-ibility of the operator to be 

transparent about this and obtain clear 

consent from the subscriber. 

2 Highly Efficient Distribution Channels 

& Customer Service 

In many countries, it’s the mobile 

operator — not a department store chain 

— that runs the largest retail operations. 

Mobile operators sell cutting-edge technology 

with many diverse propositions 

that change every few months. They 

source products from multiple global 

vendors and operate extremely efficient 

supply chains. They also serve an 

amazing number of individual customers 

and customer segments. Indeed, no two 

customers are ever identical and operators 

must manage innumerable combinations 

of handset brands, operating 

systems, preloaded applications, pricing 

plans and account hierarchies. 

Of course, privacy and confidentiality 

considerations, as well as country-specific 

regulations regarding subscriber 

data, are paramount. Subscribers trust 

Despite this complexity, most mobile 

operators excel at the point of sale in 

stores or online. They also get high marks 

in customer service, a key area of exper- 


191

In many countries, it’s the mobile operator 

— not a department store chain — that runs 

the largest retail operations. 

tise that can make or break the business 

in this age of openness and consumer 

choice. This is important when it comes 

to offering a new mobile-eabled financial 

product or service. Delivering financial 

services requires a high degree of sophistication, 

both in selling and servicing the 

customer, especially if the customer is 

not educated about the value the new 

service delivers. It is here that mobile 

operators excel; they have continuously 

launched new products and services 

successfully for decades. 

Offering financial products and services 

would normally be a burden on the sales 

and service teams of any company. However, 

mobile operators are well-equipped 

to meet the challenge, this because operators, 

as a rule, manage a well-oiled 

system of distribution and employ the 

trained staff to support it. There is really 

no substitute for this high-touch engagement 

at the customer touch-points — a 

capability mobile operators own and 

which is critical to the successful marketing 

of financial products and services. 

3 Globally Interoperable Authentication 

& Provisioning Protocols 

Whenever a mobile subscriber buys a 

new handset, replaces a SIM card, or 

roams into a new coverage area — in 

another area or even on a different 

continent — the operators’ provisioning 

and authentication protocols are at work 

behind the scenes to allow for seamless 

communications. These same capabilities 

also allow a trusted reconciliation 

of the revenues that are shared between 

the operators and other players in 

the value chain. 

As long as a customer has sufficient 

coverage and enough money on their 

account, they have what they need to 

make a phone call or conduct a transaction. 

But it’s more than that: customers 

benefit from a seamless and simple 

experience, one that transcends the 

boundaries of both countries and technology. 

The customer doesn’t need to 

know what device the other party has, 

or worry about network protocol, it just 

works. This same seamless and border- 

192

less experience is desirable in mobile 

commerce and payments as well. In the 

in-store payments world, this is conceptually 

similar to the ease with which consumers 

can also pay for goods and 

services using a mag-stripe card. In 

practice, a mag-stripe card with a global 

payment mark/scheme, such as 

a credit card, is honored as tender by all 

merchants and banks worldwide that 

accept that particular card as payment. 

Commerce transactions on any connected 

device, especially if they are 

conducted via a consumer mobile device, 

should also be as seamless and simple. 

Specifically, they should be able to 

benefit from a globally interoperable 

protocol that enhances the user experience 

by leveraging the connectivity and 

intelligence of the device and the mobile 

network. This is essential to remove 

unnecessary steps and friction from 

a shopper’s mobile commerce and 

payments experience. 

surface when it comes to understanding 

their true potential in this space and 

offering the mobile-specific enablers 

to accelerate and enhance the mobile 

payments and commerce experience for 

consumers everywhere. 

Aditya Khurjekar is Co-Founder and 

Program Director of Money2020 Expo, a 

new conference that attracts a community 

of thought leaders in emerging payments 

and financial services, bringing together 

innovators from financial institutions, 

mobile, retail and advertising to discuss 

key issues and the consumer experience. 

His independent consulting practice, TNBT 

Global, advises companies on optimising 

their next-generation mobile money strategies, 

especially around mobile payments. 

Prior to this, Khurjekar was responsible for 

Verizon’s strategy and partnerships in 

commerce and payments and managed 

it’s investments in its NFC venture Isis. 

As I have shown, mobile operators have 

the capabilities mix to play a defining and 

leading role in mobile commerce. I have 

identified the three most obvious ones here. 

However, time will tell if there are additional 

assets mobile operators can leverage to 

improve and innovate mobile commerce 

and mobile payments. Indeed, mobile 

operators might only have scratched the 


193


Mobile Commerce Opportunities 

For Operators 

By Matthew Talbot, Senior Vice President, mCommerce, SAP 

Mobile commerce has a track 

record dating back to the late 

1990s. In the last few years the 

types of services mobile commerce 

makes possible have significantly 

changed. So, if you are looking to 

launch a mobile commerce service, 

what should you consider? 

Arguably, the first mobile commerce 

services centered on enabling payments 

for early digital content such as ringtones, 

wallpapers and operator logos. In 1998 

Nokia introduced a mobile phone that 

supported a customisable ringtone and 

operator logo graphic, which were delivered 

over the air via SMS. 

The advance of digital content allowing 

users to personalise their mobile phones 

was quickly commercialised by operators 

with the introduction of premium SMS 

(PSMS). PSMS enabled the cost of the 

content to be charged directly to the 

customer’s monthly mobile phone bill. And, 

while there have been several refinements 

to this model (such as WAP Billing), this 

model has remained the dominant charging 

method for digital content. 

In the last few years we have seen more 

operators move past this payment mechanism 

to offer more flexible mobile payment 

services to their customers. The biggest 

benefit of PSMS for payments — similar to 

SMS — was its ubiquity. However, the many 

limitations around the PSMS charging 

model (high costs, charging not linked 

to delivery of goods, and poor roll-back 

mechanisms) made it best suited for the 

purchase of low-value digital goods. 

Once you have chosen your approach, you will 

need to decide between the payments services. 

Most mobile operators start this journey by moving 

existing airtime top-up services for their prepaid 

customers to mobile payments. 

194

The payments landscape 

While PSMS works today as a payment 

method for digital goods and services, it 

doesn’t allow the purchase of real-world 

goods and services, nor does it enable 

person-to-person payments. For that a 

new payment mechanism is needed. 

These new payment services are centred 

on mobile wallets and stored value accounts 

(SVA), with financial models much closer 

to that of credit card interchange than the 

revenue-share models of PSMS. Funding 

moved away from charging via the SMSC, 

and to either debiting the SVA or charging 

via the mobile wallet (which is funded by 

credit, debit, bank account and phone bill). 

Unlike the early years of mobile commerce, 

there is no single business model for mobile 

commerce. Instead, operators have adopted 

a variety of models that reflect local market 

needs and regulatory constraints. 

Overall, payment services can be divided 

into five broad categories. 

Each of these approaches has both clear 

benefits and challenges. The Global 

approach offers the greatest potential 

rewards, however, developing a solution that 

can span developed and developing markets 

is not a simple task. Beyond the technical 

challenges, there are wide range of business 

models and local regulations. But the advantages 

of a global approach are clear, after all, 

the bigger the ecosystem for payments, 

the greater the chance of success. 

Once you have chosen your approach, you 

will need to decide between the payments 

services. Most mobile operators start this 

journey by moving existing airtime top-up 

services for their prepaid customers to 

mobile payments. This approach offers 

obvious cost-saving benefits over traditional 

top-up mechanisms. More importantly, 

these benefits are clear and easy for customers 

to understand. 

In developing markets, top-up services 

are often followed by P2P payments and 

remittance services. The lack of other 

remote payment mechanisms in these 


195

Payment services can be divided into five broad categories 

Type Description Advantages Challenges 

Solo 

•• 

Single operator 

scheme 

•• 

Service is only 

available to 

the operator’s 

customers 

•• 

Quickest to 

implement 

•• 

Lack of 

interoperability 

•• 

Difficult to scale 

Cross 

Operator 

•• 

Single country 

scheme 

•• 

Service is run as 

a joint venture 

between multiple 

operators. 

•• 

Instant scale 

•• 

Increased reach 

through partners 

(and their 

customers and 

merchants) 

•• 

Additional 

complexity that 

comes from 

running a multipleparty 

payment 

scheme, 

Joint 

Ventures 

•• 

Mobile payment 

schemes that 

include partners 

from the wider 

payments ecosystem 

•• 

Can include 

credit card 

companies and 

money transfer 

companies 

•• 

Credit card 

companies bring 

interoperability 

with their payment 

network and 

merchants 

•• 

Money transfer 

companies can 

provide cash-in/ 

cash-out locations 

•• 

Need to integrate 

multiple payment 

networks and 

interfaces in a 

single solution 

markets makes these services very attractive 

to consumers. This is because many of 

these consumers are among the unbanked 

and will have limited or no access to payment 

mechanisms other than cash. Mobile 

P2P and remittance services also have the 

potential to be more affordable than 

existing mobile transfer services. 

Developed markets are a different story. 

Their customers’ needs are served by a 

variety of existing payment mechanisms, 

196

Payment services can be divided into five broad categories (cont) 

Type Description Advantages Challenges 

Group 

•• 

Operator group 

mobile wallet 

•• 

Local wallets that 

are interoperable 

May include mobile 

wallet hub 

•• 

Potential for scale, 

with tens of millions 

of users. 

•• 

Interoperability for 

roaming customers 

•• 

Hub based approach 

speeds deployment 

of remittance 

services 

•• 

Services must 

reflect each market 

•• 

Platform needs to 

comply with multiple 

financial regulations 

Global 

•• 

Global play to 

launch global 

mobile wallet 

services 

•• 

Group based 

approach that 

spans continents 

•• 

Likely to include 

other partners such 

as card networks 

•• 

•• 

•• 

•• 

Figure 1: Based on data from SAP Mobile Services. 

•• 

Huge potential for 

scale, with hundreds 

of millions of users 

•• 

Interoperability for 

roaming customers 

•• 

Services must 

reflect each market 

•• 

Platform needs to 

comply with multiple 

financial regulations 

•• 

Need to support 

developed and 

emerging market 

business models 

such as credit cards, debit cards, cheques 

and even inter-account transfer via online 

banking. In a market with so many options 

it’s clear that P2P can only be a feature 

of the payments service, not a lead 

service in itself. 

In these developed markets, services 

focused on convenience feature highly. 

A great example is paybox in Austria, a 

cross-operator service that allows users 

to pay their car parking via mobile. The 

service also warns users when the parking 


197

When mobile NFC arrives full force it will provide 

the basis for additional payment use cases and 

significantly improve existing services such as 

mobile ticketing for transport by speeding up 

transaction times. 

period is about to expire and offers the 

option to top-up the meter remotely. 

Built to last 

If your focus is emerging markets, then you 

should also consider adding a SVA (stored 

value account) to your service. This enables 

your customers to load cash in to the 

mobile wallet that can then be used to pay 

merchants and bills. 

Adding partners to the mobile wallet service 

helps grow the ecosystem the mobile wallet 

supports. For example, adding a credit card 

company or money transfer network will 

provide valuable interoperability to the 

service, which will help it to grow and scale. 

Finally, you need to factor in the impact of 

new technologies such as mobile NFC on 

your payments services. While these new 

technologies are still not mainstream, they 

are picking up momentum in some more 

developed markets. When mobile NFC 

arrives full force it will provide the basis 

for additional payment use cases and 

significantly improve existing services 

such as mobile ticketing for transport by 

speeding up transaction times. 

With so many variables to consider — the 

choice of business models, the array of 

potential services and local telecom and 

financial regulations — there is no one way 

to build a successful mobile payment 

service. In addition, any service created still 

needs to be aligned with the local market 

conditions and customer demographics. 

No matter the model you choose, 

be prepared to adapt it over time 

As the service is rolled out there will come a 

time to add functionality, build partnerships 

and scale the service. And, as new 

198

technologies become mainstream, there will 

be the need to incorporate these into the 

service as well. No matter what the initial 

service design, the requirements will 

change. Operators determined to build a 

successful mobile payment service need to 

build in flexibility. 

Over a decade ago, when operators first 

rolled out Premium SMS services to enable 

teenagers to customise the ringtone on 

their mobile phones, one could not foresee 

how mobile commerce services would 

evolve. The idea that migrant workers in 

Qatar would use automated self-service 

kiosks to load their mobile wallet and remit 

money home to friends and family was 

beyond imagination. This progress in a short 

span of time teaches an important lesson: 

no matter what the initial launch requirements 

are, if the service is success-ful, it will 

very quickly outgrow them. 

Matthew Talbot is senior vice president of 

SAP Mobile Commerce division. Prior to 

this, he was vice president of SAP in Asia. 

Before joining SAP, Talbot was the CEO of 

Mobile Internet Group (MIG), a leading 

wireless application service provider and 

co-publisher with offices in Beijing, 

Shanghai, Hong Kong, London, Sydney, 

and the U.S. Read his blog at: http://scn.sap. 

com/people/matthew.talbot/activity 


199

200 

PART SEVEN 

LEVERAGING MOBILE 

TO ACHIEVE LASTING LOYALTY

PART SEVEN: LEVERAGING MOBILE TO ACHIEVE LASTING LOYALTY 

Perception vs Reality: What’s Your 

Mobile Strategy? 

By Howard Stevens, Senior Vice President, Global Messaging Solutions, 


The enormous success of 

smartphones generally, and of 

Apple’s iPhone and the Android 

operating system in particular, 

have elevated the ‘mobile app’ to 

a status shared by few peers in the 

hallowed halls of tech history. So 

it’s no surprise that many mobile 

network operators and enterprises 

find them-selves over-allocating 

time, money and resources toward 

an app-centric view of their 

customers rather than taking a 

more holistic view. Even more 

disconcerting is the number of 

enterprises that have yet to 

embrace a substantive mobile 

strategy at all, despite the presence 

of competitors that have done so. 

There is enormous pressure today to 

emphasise certain popular services at the 

expense of those deemed “legacy.” However, 

forward-thinking enterprises in today’s 

world need to get past “perception,” looking 

beyond the latest trends in mobile apps, 

for example (without overlooking them, of 

course). They must start thinking about the 

realities of how they can help their customers 

fulfill a robust mobile strategy, one that 

is truly end-to-end, multi-channel and, 

perhaps most important, customer-centric. 

Multi-Channel, Customer-Centric 

The importance of having a real mobile 

strategy, while obvious to some organisations, 

is by no means a foregone conclusion 

for many others. Many are in “consideration” 

mode, while others have taken some 

initial steps. Few enterprises, however, have 

implemented a genuine mobile strategy. 

Moreover, they have yet to regard mobile as 

a rich, multi-channel platform through 

which consumers and others are interacting, 

often on a 24/7 basis. Answering the 

question, “What is your mobile strategy?” 

Marshalling the complete arsenal of tools in your 

mobile strategy will enable you to look at your 

customers in materially new ways. 


201

egins with close consideration of how 

end users behave in the mobile realm, what 

they’re looking for, then determining how 

best to package that solution. 

For example, in the unrelenting spotlight 

of the media, all we seemingly hear about 

is apps. Meanwhile, feature phones still 

account for roughly 70 to 80 percent of the 

global customer base with SMS and MMS 

being the only viable non-voice channels to 

these customers. In fact, both of these 

channels need to be synchronised as part of 

a full complement of value-added, strategic 

offerings necessary to engender loyalty, 

retention, as well as acquisition in order to 

realise a comprehensive mobile strategy. 

tactics that enable enterprises to learn and 

understand consumer behaviors and in turn 

shape consumer experiences. At the heart 

of this eco-system is a commitment to 

multi-channel, multi-faceted mobile marketing 

capable of becoming a game-changer 

for an enterprise. 

The ‘Rite’ stuff 

That said, virtually any of the particular 

channels mentioned above can constitute 

one of many roads to Rome. One prime 

example of how SMS, for example, can serve 

as a gateway to richer services can be seen 

with Rite Aid. 

Indeed, an effective mobile strategy is one 

that builds on a foundation of multi-channel 

options (e.g., SMS, MMS, apps, mobile 

browser) to support longer-range customer 

engagement strategies. Marshalling the 

complete arsenal of tools in your mobile 

strategy will enable you to look at your 

customers in materially new ways. The 

dividends such a strategy bestows upon 

enterprises are numerous, including breakthrough 

techniques to build awareness with 

consumers, enabling them to transact easily 

through those multiple channels. The 

eventual outcome is a virtuous circle 

constituting a continuous engagement 

cycle, leveraging loyalty, coupons and other 

When this national brand set out to increase 

customer convenience and maintain prescription 

compliance, it chose to implement 

a strategy that employed customers’ 

preferred communication methods. In this 

case, Rite Aid provided a service allowing 

patients to be notified when the prescriptions 

are ready by opting in to pharmacy 

alerts. In addition to notification by conventional 

mail, the alerts are delivered, based 

on customer preference, via email, phone 

or text message. Patients who opt in are 

automatically enrolled in the free Wellness+ 

loyalty program, which includes a monthly 

newsletter and weekly special offers. 

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Until organisations overcome these and other 

hurdles, they will continue to miss out on the 

holy grail of a continuous engagement cycle that 

rewards customers for their loyalty by allowing 

them to transact easily through multiple channels, 

when and how they wish to. 

The results include heightened brand 

loyalty and increased in-store foot traffic. 

Importantly, Rite Aid is looking at ways to 

incorporate mobile vouchers as part of the 

loyalty mix to drive traffic between different 

parts of its stores. All of which began by 

offering a service based on the most 

widely used mobile channels, SMS. 

The Next Leap 

These and other issues impede organisations 

from doing the real work of redefining 

the way they look at their customers, which 

in turn influences the nature of their awareness 

strategies. Until organisations overcome 

these and other hurdles, they will 

continue to miss out on the holy grail of a 

continuous engagement cycle that rewards 

customers for their loyalty by allowing them 

to transact easily through multiple channels, 

when and how they wish to. 

What’s holding enterprises back from 

seizing a sustainable competitive advantage 

through a robust mobile strategy? Surprisingly, 

there is still a fundamental need for 

greater realisation by enterprises with 

regard to what consumers are doing, how 

they’re behaving on mobile channels, and 

what they want. Generational issues at 

some organisations have inhibited pursuing 

more than a cursory mobile-aware approach. 

At the same time, technological leaps have 

delivered the operator community from 

person-to-person and person-to-machine 

communications to an era of machine-tomachine 

communications. This has also 

helped drive a need for discrete, segmented 

services, delivered under a usage-based 

pricing model, that are far more differentiated 

than so-called commodities such as 

voice service, for example. The features that 

are being ushered in by 4G and continuing 


203

LTE deployments, for example, have led 

mobile network operators to compete 

as they move to generate new revenues 

and profits while managing costs more 

carefully than ever. 

The progression of mobility has taken us 

from a sharply defined, voice-driven model 

to a dramatically dynamic model of remarkable 

reach and power. At each step along 

the way, we have seen the extraordinary 

become ordinary. Along with these advances 

has come an ever-widening grid of 

interoperability, complexity, intelligence and 

analytics. It is in the midst of this trajectory 

that enterprises and mobile network operators 

need to be thinking pro-actively about 

what their customers and their subscriber 

base need in order to succeed in the longer 

term, in ways that remain customer-centric. 

Customers will soon begin to pose the 

question themselves: How do I reach you 

through my mobile? At which point some 

very clear answers will be needed. 

Howard Stevens is responsible for the 

continued profitable growth of SAP Mobile 

Services’s global messaging revenues 

across the telecommunications community 

and all other market verticals. Stevens has 

driven the overall go-to-market plan and 

overseen targeted M&A activity to help 

augment the overall SAP offering. Prior to 

joining SAP, Stevens ran global sales teams 

for ADC Metrica and First Hop. 

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The Power of Push 

By Coleen Carey, Director of Product Marketing, Urban Airship 

Smartphones are with us in every 

situation — every day, all day. 

They’re the medium that allows 

us to record our daily routines, stay 

up to date, manage our social and 

business lives, and figure out what 

to do next and where. As a result, 

people are increasingly moving 

away from personal computers 

and using their smartphones to 

conduct business and make daily 

decisions. Significantly, people 

also rely on their mobile phones 

at every stage of the consumer 

journey. From researching products, 

to shopping, to sharing a 

product review with their social 

network, people reach to their 

smartphones. 

Ironically, smartphones aren’t really smart. 

It’s the mobile apps that have given these 

devices the information and authority to 

play a major role in their daily lives. Put 

another way, it’s all about communication. 

The rise of third-party apps has created the 

What is the size of the mobile market of the world's 4 billion mobile 

phones in use? 

1.08 billion are smartphones 

27% 

25% 

3.05 billion are 

SMS enabled 

(950 million are 

not SMS enabled) 

75% 

Figure 1: Based on data from Urban Airship. 


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Push messaging is critical for app engagement 

Engagement % of total app opens 

67% 

74% 

81% 

4x 

increase in app 

engagement 

Push 

No Push 

33% 

26% 

19% 

1 2 3 Months 

Important 

67% of app usage 

Essential 


Critical 


Figure 2: Based on data from Urban Airship. Good Push Index, July 2012. 

need for a new kind of conversation, one 

that allows developers to connect with the 

people who use their apps and communicate 

helpful and relevant information. 

This is where push notifications come in. 

Push notifications are messages sent from 

the app directly to the devices’ home screen 

or to the notification center. Contrary to 

SMS messages, push notifications are sent 

over the data network, which means no 

relationship with the operator is required. 

Push messaging allows businesses to send 

targeted messages that bring users back to 

the app and build loyalty. 

In fact, a recent Urban Airship study found 

that many customers who implement push 

notifications have seen increases in app 

206

engagement of up to 4 times within the 

first three months of sending notifications. 

Without push notifications, an application is 

‘just another app’. It is relegated to the ranks 

of the other 45-60 apps people download to 

their smartphones, only to use them sporadically. 

In worst case, these apps are ignored 

and abandoned completely within a month. 

Deep(er) insights 

provided to customers, a mobile operator 

is well- equipped to deliver highly effective 

programs that drive results. 

Wielding hard data and deep insights mobile 

operators can improve their services — including 

their own marketing efforts — to create 

new revenue streams that, in turn, result in 

ARPU uplifts for data and voice packages. This 

ultimately helps offset the cannibalisation of 

SMS revenue, improve customer satisfaction 

and reduce customer churn. 

Clearly, push notifications are a bonus for 

developers because they boost customer 

engagement and extend the life of the app. 

But mobile operators can also reap huge 

benefits from enabling this ongoing exchange. 

What’s at stake if mobile operators fail to 

see the benefits of encouraging user 

engagement with apps on their smartphones? 

It’s a risky business, to say the 

least, for the following reasons: 

Indeed, operators are in a unique position to 

be the organisation that best understands 

the customer, based on insights into all 

aspects of the user’s relationship with the 

most intimate device they own, their mobile 

phone. How is this possible? By combining 

Urban Airship’s highly scalable Push Notifications 

with analytics reporting capabilities 

1 The lack of a ‘conversation’ between app 

developers and their customers means 

lower overall data usage. This is an 

outcome operators certainly want to 

avoid as they move their business model 

from one that is voice centered to one 

that is data centered. 

By participating in this exchange operators can 

build loyalty, increase the value of the device they 

offer and — ultimately — reduce churn. 


207

Push notifications also open up new 

opportunities around advertising and 

marketing, allowing mobile operators to 

better understand and service their 

customers. 

2 Failing to encourage customers to engage 

with their apps might actually backfire 

and increase customer churn. 

3 By making it difficult for users to realise 

— let alone experience — everything apps 

can deliver; users may fail to see the value 

in owning a smartphone and reject the 

additional costs of owning a smartphone. 

By embracing and using push notifications 

effectively operators can avoid these negative 

scenarios and outcomes. 

Push pays dividends 

The customer service benefits around push 

notifications are huge. While apps create an 

opportunity to build a relationship with a 

customer, push notifications can take it 

to the next level. Push notifications allow 

operators to deliver simple alerts to the 

customer — and trigger the customer to 

take action. 

Push notifications also open up new opportunities 

around advertising and marketing, 

allowing mobile operators to better understand 

and service their customers, both 

with integrated customer lifecycle messaging 

and with an operator-controlled opt-in 

advertising/deal network. 

The potential customer service benefits 

enabled by push notifications are very 

powerful. Operators have an additional 

channel to the customer, one that allows 

them to quickly and effectively provide 

their customers relevant information 

around upgrade eligibility, international 

data package availability, network upgrades 

and a wide range of service offers. 

Good push notification messages give the 

app a voice, allowing them to communicate 

with the customer and deliver a superior 

customer service experience. This lays a 

solid groundwork for an ongoing conversation. 

By participating in this exchange 

operators can build loyalty, increase the 

value of the device they offer and — 

208

ultimately — reduce churn. Operators are 

in a thought leadership position to encourage 

the practice of sending relevant push 

messages to the developer community. 

The Importance of Good Push 

Push notifications represent a new communications 

channel and a new way to connect 

with the customer. Little wonder that 

people are experimenting with different 

ways of using it. By providing the customer 

the ability to choose when, how, and what 

information they receive, you put the 

customer in control and reduce the risk that 

they will grow tired of your app and delete it. 

The process is permission based, which 

means the user must opt in to push and 

be open to receiving notifications. Beyond 

that, its important users get the right 

message at the right time. Anything else 

might be dismissed as annoying spam. 

Without careful consideration of the end 

user’s reaction to the message, the communication 

will be wasted leaving a negative 

impression of the app on the user. By 

pursuing a careful approach aimed at 

getting the right message to the right 

person at the right time, operators have 

unlimited opportunities to lead the way in 

an emerging — and exciting — market. 

The 7 Rules of Good Push. 

For more information go to http://urbanairship.com/goodpush/ 

1. Give the customer control over when they receive messages. 

2. Engage customers with relevant messages. 

3. Allow customers to personalise their experience. 

4. Stay consistent with your brand. 

5. Deliver an engaging experience. 

6. Make messages better over time by analysing customer engagement. 

7. Adapt messages to your users' ever changing locations and situations. 


209

Our high performance push messaging platform 

Enable your team to: 

• Target the right audience 

Optimise 

Target 

• Maximise messaging reach & speed 

Urban Airship 

• Enhance conversion Opportunities 

Convert 

• Evaluate success to optimise 

Message 

Figure 2: Based on data from Urban Airship. 

Coleen Carey brings over 20 years of 

technology and consumer packaged goods 

experience to Urban Airship. As Director 

of product and partner marketing, she 

leads the charge in bringing Urban Airship’s 

industry-leading push messaging platform 

to market aligned with key strategic partners. 

She has held leadership positions at 

Kimberly-Clark, Keebler, NEC, 3Com and 

WebTrends. 

210


Harmonising Touch Points, 

Technology, Processes And People 

By Suresh Sidhu, Chief Corporate & Operations Officer, 

Celcom Axiata Berhad 

Thanks to the proliferation of 

connected devices —mobile 

phones, smartphones and tablets 

— consumers across all demographics 

now share a common 

trait: they are empowered. They 

have the freedom to choose how 

they interact with companies and 

each other. 

They also demand flexible services that 

truly match their personal profiles and 

needs, and they want these services anytime, 

anywhere. While this is an exciting 

prospect for consumers, it represents a 

profound challenge to the traditional 

telecom business model. Operators have 

been used to a mass model of provisioning 

and deployment, with customer interaction 

happening through a few formal channels. 

In order to harness the opportunity, operators 

need to embrace a more holistic 

approach to customer experience. 

While a customer-centric approach has 

always been at the core of our strategy 

at Celcom, there is a greater understanding 

now that telecommunications is not solely 

about technology. Put another way, technology 

must adapt to customer needs, not 

the other way around. The shift from a “walk 

and talk” mobility approach to a “sit and 

play” one requires mobile operators to 

rethink experience. 

The traditional telecom approach of improving 

call success rates, reducing dropped 

calls and providing VIP service is still applicable. 

However, the “data anywhere” needs 

of today’s consumers are changing the landscape. 

A tweed-jacketed banker just may be 

a secret mobile gamer, while low voice ARPU 

elderly ladies may also be high consumers 

of Bollywood content. Customers have 

From sales to service, from voice to surfing, 

customers now look for very different support 

from their operator. 


211

many facets. This challenges the customer 

segmentation approach, often based on 

usage or demographics that operators have 

assumed and applied. 

Celcom has taken specific steps to evolve 

its view of customer experience to match 

how people have made mobility an integral 

part of their daily routine. The approach that 

works is to design services that encompass 

all the stages of daily life. These are: Rest, 

which is about how customers enjoy 

mobility at home; Work, which is about how 

users harness mobile in the office or to 

perform their job; and Play, which is about 

how customers use the mobile device to 

enhance their leisure or travel time. Today, 

the key to customer satisfaction comes 

from harnessing four key pillars – touch 

points, technology, process and people. 

In Celcom’s bid to win back share it had 

lost, it followed exactly this approach. We 

embarked on a program to “fix the basics” 

by solving billing issues, reducing the time 

needed by call centre agents to respond 

to customer calls and streamlining how 

customers sign up for a service plan. 

Besides internal improvements, the program 

also enabled customers everywhere 

in Malaysia to reach Celcom by dialing a 

single number (1111). 

However, the increasing growth of data on 

networks has challenged this approach. It’s 

no longer enough to focus on voice quality 

or even connectivity assurance. From sales 

to service, from voice to surfing, customers 

now look for very different support from 

their operator. Some examples of these 

customer needs are: 

Time for a rethink 

Many of the approaches to customer 

experience stem from the days when the 

network was largely about delivering voice. 

Even with the advent of 3G, the demands 

were often still focused on voice quality 

and the traditional elements of customer 

service – call centre response, complaint 

management and differentiated service 

for premium customers. 

• Always having the latest devices available 

in well designed retail stores 

• Staff that is knowledgeable about mobile, 

including the differences between devices 

and versions of Android, and can provide 

help with trouble shooting 

• Single sign on across a range of services, 

from mobile to Wi-Fi 

• High-speed access everywhere in urban 

centres 

• High quality connectivity in rural locations 

• Easy to understand pricing and transparent 

billing 

212

Put another way, technology must adapt to 

customer needs, not the other way around. 

• Convenient self-service channels, 

integrated with physical ones 

This is a daunting list, and by no means 

exhaustive. The operator that rises to this 

challenge, and executes well, is likely to 

reap significant rewards. 

The Four Pillars 

Our approach at Celcom to this challenge 

has been to ensure everything we do is integrated 

across the four pillars of Customer 

Experience – Touch Points, Technology, 

Process and People. We would be the first to 

admit that we have a long way to go. We are 

very much in the early phase of the change, 

with significant investments committed. But 

many projects are still in its implementation 

phase. There are also other valid approaches 

– but these are the ones we feel suit our 

customers’ needs best. 

To provide an illustration of what we aim to 

achieve, I have outlined some of the investments 

we are making and the aspirations 

we have when the work is completed. 

• Touch Points: We are transforming our 

stores from branches to real retail stores. 

Device sales are central to this vision. 

Equally important, staff is equipped with 

tablets and a sound knowledge of our 

products so that they are able to provide 

expert advice and comparisons while 

customers shop. This year, we will launch 

our flagship store and even roll-out stores 

focused entirely on offering Apple devices. 

• Technology: We are focusing not just 

on our IT capabilities, but also on our 

network. In IT, we have a major programme 

to upgrade our end-to-end 

capabilities with a brand new Business 

Support Systems and analytics capability. 

At the heart of this approach is the single 

screen for customer service, so that time 

spent with customers is maximised and 

personalised. On the network side, 

Celcom is investing in its next-generation 

network and upgrading to an intelligent 

packet core that is standards-based and 

supports rich features and functionality. 


213

This simplified but flexible architecture 

will enable seamless movement between 

services, allowing Celcom to deliver on its 

customer experience with features like 

single sign on and integrated policy 

management. 

• Process: A key part of our process work 

is to embed “The Celcom Way” into 

product and service design. We have 

developed a ‘moment of truth’ approach 

that we use to ensure a new service, or 

even an existing one, has the customer 

experience built into our design. 

• People: People are always part of the 

equation of a unique customer experience. 

Our approach is aimed at ensuring 

that the store experience is more like 

Starbucks, than a traditional telecom 

store. Naturally, this culture change 

doesn’t happen overnight, so it’s here that 

we are also currently focusing the most 

time and effort. 

Next-gen customer experience 

The transformation into a true service experience 

is still at an early stage. However, 

Celcom aspires to be at the forefront of 

what it calls the “Next Generation Customer 

Experience.” Whilst our approaches have 

had their fair share of successes and challenges, 

we have learnt that persistence 

and consistency are the keys to success. 

The future data-centric world will challenge 

operators in ways we may not be able to 

imagine today. The major risk is that of disintermediation, 

that operators will become 

nothing more than a pipe for customers to 

reach Facebook, Google, or OTT messaging 

services such as WhatsApp. To rise to this 

challenge operators will need to deploy 

many different strategies from pricing to 

new businesses. However, Celcom is convinced 

customers will stay loyal provided 

they are provided with the right experience. 

Suresh Narain Singh Sidhu is responsible 

for technology operations across Network 

and IT, Strategy and Regulatory affairs as 

well as the end to end business transformation 

of Celcom. Prior Sidhu was at Dialog 

Telekom PLC in Sri Lanka where he held the 

role of Group Chief Officer – Enterprise and 

Global at Dialog Telekom PLC. He also 

helped create two new ventures for Dialog - 

a branded Overseas Foreign Workers 

partnership in the UK, Dialog Vizz, and a 

joint venture in the Business Process 

Outsourcing space with First Source 

Solutions of India. 

214


Ask, Listen And Build 

Lasting Loyalty 

By Sally Burley, Co-founder & Director, The 3rd Degree 

We live our lives on mobile. Our 

devices are never more than three 

feet away. What’s more, we look at 

our mobile phone displays at least 

150 times a day, that’s roughly 

every 5 minutes! Mobile also plays 

a central role in our daily routines. 

We reach to mobile devices to 

liberate our work lives, organise 

our home lives and strengthen 

our social lives. 

Mobile is also our primary communications 

tool. Two-thirds of the human race rely on 

text messaging to connect with a growing 

network of family, friends, businesses, 

organisations — even governments. Little 

wonder that SMS is the most widely used 

data application on the planet. 

Mobile is the most potent form of media in 

the history of mankind. In fact, Tomi Ahonen 

— independent consultant and author of 

several industry best-selling argues that 

mobile is a new mass media. Following print 

from the 1500s, recording from the 1900s, 

cinema from the 1910s, radio from the 

1920s TV from the 1950s and Internet 

from the 1990s, mobile is the mass 

media where “all forms of content and 

communications converge.” 

Real relationships 

Connect the dots, and it is the 

pervasiveness and sheer dominance 

of mobile devices that have given them 

a central position in our daily lives. But 

mobile is also a fiercely personal device, 

which makes it ideal mass media for 

interaction and engagement. This is 

why mobile can also improve customer 

relationship management. 

Finding out why a customer is unhappy, and 

working to fix it straight away with customer care 

follow up, can turn a potential defector into a 

powerful advocate. 


215

The combination of the two — referred to 

as Mobile CRM (mCRM) — offers a way for 

companies to build lasting relationships with 

their customers by harnessing the unique 

bond we all have with our mobile devices to 

connect with us in a way we appreciate. But 

it’s not just about deepening ties with the 

customers; mCRM also allows companies 

to gain instant insight and feedback about 

how their audience thinks, feels and acts. 

Operators sit in a unique position to use 

mCRM in its most capable and potent form 

to create and maintain a 360-degree view 

of their customers. This is possible because 

operators own the customer billing relationship 

and important data including usage 

levels, personal preferences and purchasing 

patterns. Access to this powerful combination 

of insights and information puts operators 

in a strong position to benefit from 

deep and ongoing mobile engagement. 

Another factor in favor of operators is 

their ability — powered by customer data 

— to satisfy our growing requirement for 

personal and relevant information and 

communications. This is imperative on a 

mobile device, where we have created a 

highly intimate space and expect companies 

and businesses to respect the rules of 

engagement. Put another way, relevance 

and personalisation are the key elements 

of a successful ongoing dialogue. 

Fortunately, for both the operator and 

other players in the business ecosystem, 

the information necessary to deliver personalised 

and targeted communications 

— communications that is therefore aligned 

with our personal preferences and requirements 

— is baked into the relationship 

operators have with their customers. This 

long-standing and intimate relationship 

ensures that first communications between 

companies and consumers are 

engaging and relevant. 

Two-way communication 

Just as in real-life, building relationship 

is about talking and listening. A successful 

mCRM program integrates social interaction, 

customer engagement and customer 

feedback. It also uses the conversations it 

enables between customers and businesses 

to support and assist buying decisions, drive 

loyalty and encourage brand advocacy. 

At the same time, the program gathers 

insights and customer data that will help 

ensure the relationship remains healthy, 

ongoing and relevant. 

Clearly, the customer relationship is built 

on engagement and a successful program 

seeks ways to deepen that engagement. 

This is where mCRM comes in to extend and 

enhance the relationship every step of the 

216

Operators sit in a unique position to use mCRM 

in its most capable and potent form to create 

and maintain a 360-degree view of their 

customers. 

customer journey. But it’s not just about 

enabling interaction between companies 

and their customers. 

An mCRM platform should also enable 

a two-way conversation using SMS, and 

harness all the other channels — mobile 

web, apps and social media — to ensure 

the exchange is deep and ongoing. 

Following this approach allows companies 

to create engagement, build loyalty, gain 

customer insights and gather customer 

data. It also lays the groundwork for a 

successful strategy to achieve a deeper, 

more valuable relationship with customers. 

Below I outline the specific benefits and 

use cases that underline the growing 

requirement for mCRM. 

Customer acquisition 

Mobile is the smartest and fastest way to 

build a bond with your audience. But it is 

also an excellent way to deliver 

customer service. 

A whopping 5.6 billion people use mobile 

phones. In addition, 1.8 billion people access 

the Internet via their mobile devices — that’s 

more than the total number of PC-based 

Internet users worldwide. Clearly, mobile 

plays a key role in developed markets and it 

has become the first and only screen for 

people in developing markets. 

Ensuring that existing and potential 

customers can rely on their mobile devices 

to ‘self-serve’ quickly and easily is key to 

customer acquisition in the mobile space. 

Enabling customers to perform a simple 

task on their own — like requesting a SIM 

card via text, for example — can take 

pressure off operator call centers and 

walk-in retail stores. What’s more, it goes 

a long way toward removing the barriers 

and friction new customers can encounter. 


217

Loyalty and advocacy 

Loyalty ensures that customers become 

fans and brand advocates. The process 

usually starts when people make a 

purchase. After that the pressure is on the 

brand to deliver on its promise— which, in 

many cases, spans the lifetime of the 

product or service. For operators this can 

be an even bigger task. After all, we rely on 

our mobile devices every step of our daily 

routine. If our operators fail to deliver the 

services and support we need, then it’s a 

speedy decline to customer dissatisfaction. 

But it doesn’t have to end that way. Mobile 

allows operators to create and deliver 

campaigns that talk directly to customers, 

to nip problems in the bud. With mobile and 

a comprehensive mCRM program operators 

can ask questions, gauge reactions, gather 

feedback and grow their relationship with 

individual customers. Get it right and operators 

can not only reduce churn; they can 

also boost loyalty and use of their services. 

The goal is to build a loyal legion of 

brand advocates. These are fans that 

have engaged with a brand and enjoyed the 

results. Based on this good customer experience, 

these fans pass the good word on. 

It’s word-of-mouth advertising, but mobile 

increases its reach and effectiveness. In 

this scenario mCRM can nurture brand 

advocacy by encouraging loyal customers 

to recruit new customers using a variety 

of channels including text messaging 

and social media. 

Feedback loop 

Mobile lets companies begin the conversation, 

but it’s also important to listen to what 

customers have to say. It’s easier to serve — 

and consistently delight — a customer once 

you get to know them. To accomplish this 

companies need a deep understanding of 

the customer. And it helps to be able to ask 

— and find out —their interests, personal 

preferences and motivations. This information 

allows companies to refine and improve 

their customer segmentation and targeting, 

ensuring the delivery of personal and 

relevant information and communications 

that are essential to boost customer loyalty. 

This approach also provides the basis for 

all communications with the customer. 

Using mobile as a tool to conduct research 

is approach that delivers dividends. This 

proactive outreach allows companies to 

monitor customer satisfaction and sentiment. 

These are important indicators that 

allow companies to achieve two key objectives: 

get to know their customers better, and 

detect situations quickly that — unattended 

— could cause customers to switch. 

218

Finding out why a customer is unhappy, and 

working to fix it straight away with customer 

care follow up, can turn a potential defector 

into a powerful advocate. With mCRM this 

research and feedback process can be 

ongoing and automatic. A prime example is 

how SMS can be used to survey customers. 

Integrating this in mCRM shows your customers 

that you care — interaction that can 

increase overall satisfaction levels — and 

provides the organisation instant and 

actionable insights. Significantly, this information 

can be immediately accessible to 

customer care centres, and even the board 

can be monitoring this data in real-time. 

Customers are empowered to request — 

even demand — products and services on 

their terms. Against this backdrop, it’s never 

been more important for companies to 

know and understand their customers. It 

is essential to create a 360-degree view of 

your customers based on details about their 

preferences, personal tastes and how they 

are using their mobile devices, but this 

information is just part of the equation. 

Companies and mobile operators should 

also harness mobile to ask questions and 

listen to the answers. Enable an ongoing 

conversation and you can build the capabilities 

mix to satisfy the customer, reduce 

churn and maximise revenue opportunities. 

Good listener 

We are mobile. Therefore it is critical to 

make sure that mobile communication 

channels are leading the way in the conversation 

between you and your customer. 

An mCRM platform is essential to ensure 

the exchange delivers value to both parties. 

This can be achieved in two ways: mCRM 

can be used as a tactical tool to enable and 

deepen the mobile relationship, or it can be 

integrated — as needed — to support your 

strategic CRM capability to empower the 

ongoing mobile relationship. 

Sally Burley is Co-founder and Director of 

The 3rd Degree. Burley began her career as 

a cognitive scientist working with artificial 

intelligence systems before specialising in 

SaaS applications and GUI design. She has 

worked with mobile technology since 1999. 


219


Why Customer Engagement 

Campaigns Pay Dividends 

By Gregory Dunn, Vice President, Product Strategy and Solutions, 


Mobile has come to represent 

the most pervasive channel of 

communications and targeted 

engagement on the planet. What’s 

more, the immediacy, convenience 

and personal attachment around 

our connected devices makes 

mobile an ideal mass media and 

means of delivering relevant 

marketing messages and application 

interaction to a global 

customer base. 

Portio Research projects over 7 billion 

mobile subscribers globally by end-2013 

and annual handset shipments of over 2.15 

billion by 2016. While smartphones already 

account for a significant number of handset 

shipped, a mega-trends presentation compiled 

by the venture capital firm Kleiner 

Perkins Caufield & Byers (KPCB), shows 

that feature phone users still outnumber 

smartphone users by a ratio of nearly 

six-to-one. 

Overall, mobile phone users vastly outnumber 

PC Internet users by a ratio of more 

than four to one. According to the global 

research firm Gartner, there are roughly one 

billion PCs installed worldwide, and the 

number of users connecting to the Internet 

via their PCs is estimated at 1.7 billion. This 

pales in comparison to the number of 

mobile Internet users, which is pegged at 6 

billion-plus. Of that total, a whopping 80 

percent send and receive text messages, 

making SMS the most widely used data 

application in the world. 

In fact, worldwide SMS traffic reached 8.6 

billion messages in 2012, a number expected 

to exceed 9.5 trillion by 2015, according 

to Portio Research. 

From researching products, to conducting 

transactions, to sharing a product review with their 

social network, people rely on their mobile devices 

to access advice and make the right decisions. 

220

Despite tremendous ramp so far, smartphones usage still has huge upside. 

Global smartphones vs. mobile phone subscribers, 2011E 

6,000 

5.6B Mobile 

phone subscribers 

Global users (millions) 

5,000 

4,000 

3,000 

2,000 

1,000 

835MM 

Smartphone 

subscribers 

0 

Smartphones 

users 

Mobile phone 

users 

Note: While there are 936MM global 3G subscribers as of Q2: 11, not all of them were smartphone users. 

One may have multiple mobile subscriptions, therefore actual users #s may be lower than subscriber #s. 

Figure 1: Based on data from KPCB. Smartphone subscriber estimates per Morgan Stanely Research; Mobile phone 

subscribers per Informa (as of Q2: 11). 

http://kpcb.com/insights/2012-internet-trends 

Creating a conversation 

Mobile changes the rules of engagement, 

impacting how people communicate with 

each other and how they choose to connect 

with brands and businesses. Reams of 

consumer research support the existence 

of a seismic shift in human behavior and 

show the boundary between mobile and 

social is blurring. 

The marketing firm Ruder Finn, for example, 

reports that 91 percent of mobile phone 

users reach to their devices to connect with 

their social networks and keep up-to-date 

with their communities. Mobile and social 

are morphing, and the impact on business 

is profound. 

Indeed, mobile has empowered people 

to expect (even demand) marketers to 


221

Vertical explosion 

Year over year spend growth -2011/2010 

Verticals 

Growth 

Technology 698% 

Finance 314% 

Health:Fitness & Wellness 229% 

CPG/FMCG 199% 

Retail & Restaurants 193% 

Automative 185% 

Pharmaceuticals 159% 

Entertainment 133% 

Education 122% 

Figure 2: Based on data from Millennial Media. www.millennialmedia.com/mobile-intelligence/ 

conduct conversations with them on their 

devices and — more importantly — listen to 

their responses. More importantly, because 

this interaction takes place on their personal 

mobile phones, marketing messages must 

also match the context of what matters 

most to these always-on individuals: their 

preferences, interests and daily experiences. 

Research reveals that nearly half (44 

percent) of consumers say they would 

rather receive product information and 

marketing messages through SMS campaigns 

than any other channel. 

But the applications of SMS are not just 

limited to enabling personalised, two-way 

dialog around marketing and advertising 

messages. Analysts report that nearly 80 

percent of best-in-class call centers are 

already leveraging SMS to increase efficiency 

and support customers who prefer 

222

the convenience of self-service to the hassle 

of waiting for a live call center agent to 

answer their query. 

Mobile at the center 

Mobile as a marketing channel has tremendous 

potential. Google — in its research 

aptly titled “The new Multi-screen World: 

Understanding Cross-platform Consumer 

Behavior"— shows that mobile has become 

our constant companion. In partnership with 

Sterling Brands and Ipsos Google surveyed 

1,611 consumers in the U.S. to determine 

their media interactions and behaviors. 

People have become what Google terms 

‘multi-screeners,’ choosing their screen 

(mobile, tablet, PC or TV) depending on 

their context and what they want to accomplish. 

Against this backdrop, mobile phones 

have become “the backbone of our daily 

media interactions.” Smartphones, in particular, 

have the highest number of user interactions 

per day and serve as the starting 

point for activities across multiple screens. 

Mobile clearly plays a central role in our 

daily lives. The impact on retail, for example, 

is well documented. Market research firm 

comScore finds that mobile reaches and 

influences people throughout the purchase 

funnel (awareness, consideration, engagement, 

conversion and loyalty). In short, 

people are relying on their mobile phones 

at every stage of the consumer journey. 

From researching products, to conducting 

transactions, to sharing a product review 

with their social network, people rely on 

their mobile devices to access advice and 

make the right decisions. 

Engaging at every stage 

Our increasing dependence on mobile 

devices for assistance and advice paves the 

way for marketers to harness mobile as part 

of an ongoing strategy to engage customers 

at every stage of the purchase process, from 

building awareness all the way through to 

boosting loyalty. 

It’s a huge opportunity that brands around 

the world are grasping with both hands. 

The result is what mobile ad and platform 

company Millennial Media calls a “vertical 

explosion” and one that has seen triple digit 

growth or greater in mobile advertising 

spend. From Technology to Entertainment , 

and from Automotive to Education, a wide 

variety of brands are using mobile to reach 

and engage their customers. 


223

Mobile operators that break down messaging silos 

and build the capabilities to complement their 

regular text communications with related marketing 

messages that show a deep understanding of the 

individual user can position themselves to make their 

subscribers an offer they will find hard to refuse. 

But it’s also an area of opportunity where 

mobile operators can — and must — 

become more active. 

New mandate 

Faced with the decline in the ‘average 

revenue per user’ (ARPU) mobile 

operators have two options: they can 

attract more customers from rival 

operators, or they can wring more 

value from their existing customers. 

Success is all about learning how to sell 

more services to more customers better. 

Fortunately, mobile operators are already 

extremely well equipped to achieve this 

goal. Several factors provide them 

competitive advantage. 

First, mobile operators own the network. 

This control allows them to connect with 

their audience and deliver targeted marketing 

messages about services, tariffs and 

special offers. Second, mobile operators 

own the customer relationship. This allows 

them visibility into key subscriber information, 

including service usage, personal 

preferences and purchase patterns. 

These insights are essential and enable the 

mobile operator to deliver marketing their 

subscribers will genuinely appreciate. 

Put another way, mobile operators are in 

the enviable position to deliver personal, 

relevant and valuable marketing messages 

from the get-go because these communications 

are completely aligned with the 

customer data the mobile operator 

already owns. 

224

Deep trust 

Best of all, surveys show consumers trust 

their operators to deliver useful marketing. 

It’s a close relationship the mobile operator 

enjoys and can deepen through targeted 

SMS communications. 

respondents would welcome mobile 

marketing messages as part of top-up 

confirmations (9 percent), missed call 

and voicemail alerts (8 percent), balance 

updates (7 percent) and roaming 

notifications (7 percent). 

A recent Upstream Mobile Marketing 

Consumer Attitudes Report confirms the 

close (and untapped) relationship mobile 

operators have with their subscribers. 

Based on a survey of 2,198 U.K. adults the 

report reveals that over half (59 percent) 

of consumers are happy to be contacted by 

their operator with relevant offers. Notably, 

15 percent of respondents said they would 

welcome personalised suggestions for plan 

upgrades, and 13 percent would like to 

receive advertising about discounts aligned 

with their actual usage and requirements. 

How do consumers want to be contacted 

by mobile operators? Again the Upstream 

survey offers some key insights. 

The most popular format was text message 

(61 percent), and 51 percent said that they 

would like to be informed about new offers 

and services within the normal flow of SMS 

messages that they already receive from 

their mobile operators. Specifically, 

Lasting loyalty 

Imagine the effectiveness of a personalised 

and targeted marketing message that pairs 

an account balance notification with an offer 

based on the subscriber’s own unique usage 

and requirements. 

Mobile operators that break down messaging 

silos and build the capabilities to 

complement their regular text communications 

with related marketing messages 

that show a deep understanding of the 

individual user can position themselves to 

make their subscribers an offer they will 

find hard to refuse. 

But it’s not just about wielding the power 

of mobile to cross-sell and up-sell 

subscribers based on their profiles and 

preferences. Mobile also enables mobile 

operators —and the marketers that 

partner with them — to super-charge 

their CRM strategies. 


225

Put another way, the optimised use of the 

mobile channel allows mobile operators 

to maintain continuous customer touch, 

enabling them to deliver sustained support 

and service and participate in two-way 

conversations with their subscribers. 

The result is an approach that rewards 

both stakeholders. 

Subscribers are encouraged to engage in 

‘conversations’ on their terms, interactions 

that boost loyalty and build intimacy. Mobile 

operators gain greater insights into what 

their subscribers want and appreciate, 

data that also helps operators refine 

their services and —ultimately — ensure 

customer loyalty is deep and long-lasting. 

Mobile can also extend the impact and value 

of advertising. Case in point: point-of-sale 

displays where mobile allows marketers to 

gauge response in real-time and track the 

degree to which that particular advertising 

is attracting the attention of consumers 

and prompting them to interact using their 

mobile device. It’s a similar story in print 

media, where innovations such as 2D 

barcodes make it possible for consumers 

to access more information using their 

mobile phones. 

Clearly, mobile complements all marketing 

and messaging channels. As an effective 

mass media on its own or well integrated 

into a comprehensive digital strategy, 

mobile has vast potential to create business 

value, improve process efficiency, trigger 

product consumption and use, and increase 

customer feedback. Executed correctly, 

mobile doesn’t simply clinch the one-off 

deal. It furthers loyalty, cements relationships 

and improves CRM. 

Gregory Dunn manages the global product 

management group within SAP Mobile 

Services. Dunn has over 28 years of telecommunications 

experience, with primary 

focus in the wireless industry. He started his 

career at the divestiture of AT&T, spending 

time at Pacific Telesis, where he held senior 

management positions of increasing responsibility, 

with a core milestone achievement of 

launching the first statewide 900mhz messaging 

system in the US. 

226

APPENDIX 


227

APPENDIX 

Glossary Of Terms 

A2P (Application to Person) - This is 

typically a human communicating with 

an application via messaging. 

ARPU (Average Revenue Per User) - This 

is usually abbreviated to ARPU is a measure 

used primarily by consumer communications 

and networking companies, defined 

as the total revenue divided by the number 

of subscribers. 

ASR (Answer Seizure Ratio) - In Voice 

telecommunications, this is a measure of 

network quality defined as the number of 

successfully answered calls divided by the 

total number of calls. Defined by ITU E.411 

specifications. 

BARG (GSMA's Billing and Accounting 

Roaming Group) - This is a working group 

that manages the various standards and 

procedures for GMS billing and roaming. 

Various regional and international BARG 

groups meet at various times through 

the year. 

BYOD - Bring Your Own Device 

BYON - Bring Your Own Number 

CAPEX (Capital Expenditure) - A capital 

expenditure is incurred when a business 

spends money either to buy fixed assets or 

to add to the value of an existing fixed asset 

with a useful life extending beyond the 

taxable year. 

CISPA - Cyber Information Sharing and 

Protection Act [(CISPA) (H.R. 3523)] - 

CISPA addresses how information would 

be shared between private companies and 

the government to catch malicious actors 

breaching networks to steal information or 

sabotaging systems. 

CoS - Classes of Service 

CSP - Communications Service Providers 

DRA - Diameter Relay Agent 

DSC - Diameter Signalling Controller 

Diameter - An Authentication, Authorization, 

and Accounting (AAA) protocol 

for computer and telecommunications 

networks. It is the successor to the Radius 

Protocol. In LTE networks, used to 

authenticate subscribers on networks 

(home or visited). 

Dongle - This is a small piece of hardware 

that plugs into an electrical connector on a 

computer and serves as an electronic "key" 

for a piece of software; the program will run 

only when the dongle is plugged in. The term 

"dongle" was originally used to refer only 

to software-protection dongles; however, 

currently "dongle" is often used to refer to 

any small piece of hardware that plugs into 

a computer. 

228

E.164 - The ITU standard for defining telephone 

numbers. Consists of a country code 

+ local dialing digits. All Telephone Numbers 

should comply with E.164. 

E-UTRAN - Evolved Universal Terrestrial 

Radio Access Network - the LTE radio/air 

interface. 

Fallback [Capacity] - The ability for an LTE 

subscriber to connect to the 3G (non-LTE) 

infrastructure while roaming. 

Five 9s service availability - Also written 

as 99.999%. This is used in Service Level 

Agreements (SLAs) that indicate that a 

service should be available 99.999% of 

the time (or greater). 

GNU - GNU is not Unix. A Unix-like 

computer operating system developed by 

the GNU Project, ultimately aiming to be 

a "complete Unix-compatible software 

system" comp-osed wholly of free software. 

GPRS (General packet radio service) - 

A packet oriented mobile data service on the 

2G and 3G cellular communication system's 

global system for mobile communications. 

GRX (GPRS Roaming Exchange) - A hub 

for GPRS connections from roaming users, 

removing the need for a dedicated link 

between each GPRS service provider. 

GSMA (GSM Association) - An association 

of mobile operators and related companies 

to manage standardization, deployment and 

promotion of the GSM-based mobile telephone 

system. 

GSMA AA.19 - A GSMA document used to 

exchange SMS parameters and termination 

fees for bi-lateral interworking. 

GMSA IR.21 - A GSMA document that is 

used to define the protocols and information 

regarding roaming procedures as well 

as messaging parameters between mobile 

operators. 

GSMA IR.35 -A GSMA document describing 

"End-to-End Functional Capability Test Specification 

for Inter-PLMN GPRS Roaming". 

HPLMN (Home Public Land Mobile 

Network) - A subscriber's home network 

in a roaming scenario. 

HSS (Home Subscriber Servicer) - Think 

of this as a net-gen HLR (Home Location 

Register). The HSS is used in LTE networks. 

HSPA (High Speed Packet Access) - 

A combination of two mobile packet protocols: 

High Speed Downlink Packet Access 

(HSDPA) and High Speed Uplink Packet 

Access (HSUPA) to extend and improve 3G 

networks using the WCDMA protocols. 

Some call this 3.5G (a marketing term only). 


229

HSPA+ - Evolved HSPA - Extends HSPA to 

higher speeds. Some networks' marketing 

groups refer to this as "4G." 

IDD (International Direct Dial) - 

A telecommunications system that enables 

callers to dial direct an international telephone 

number for a voice call. 

IP-VPN - IP - based Virtual Private Network 

M2M - Machine to Machine 

MDN (Mobile Directory Number) - 

An alternative (mostly CDMA based) nomenclature 

for a subscriber's telephone number. 

MMS (Multimedia Messaging Service) - 

A messaging service that enables users to 

send/receive rich content (images, audio, 

and video clips). 

IPX - IP eXchange - A global extremely 

high speed, high quality of service network 

backbone used to provide interworking of 

mobile and fixed operator services such 

as voice, messaging, data roaming, video, 

RCS and more. 

ISP - Internet Service Providers 

Joyn - The GSMA brand name of the RCSe 

implementation for many operators in 

Europe. Joyn was rolled out in 2012. 

MNO (Mobile Network Operator) - 

Also known as a "mobile carrier." A 

service provider that provides mobile 

services (voice, messaging, network 

access) to subscribers. 

MNP (Mobile Number Portability) - 

Enables mobile telephone users to retain 

their mobile telephone numbers when 

changing from one mobile network operator 

to another, also known as Wireless Number 

Portability (WNP). 

Local breakout - The ability for a roaming 

subscriber to reach the Internet cloud 

through the visited network instead of all IP 

data being routed (via GRX) back to the 

home network. 

LTE (Long Term Evolution) - Standard for 

wireless communication of high-speed data 

for mobile phones and data terminals. Many 

times LTE is referred to as "4G." 

MO (Mobile Originated) - Traffic 

originating from a mobile or user device 

MSISDN (Mobile Station International 

Subscriber Directory Number) - 

A subscriber's telephone number on a GSM 

or UMTS network. 

MT (Mobile Terminated) - Traffic received 

on a mobile or user device. 

230

NER (Network Efficiency Ratio) - 

A measure of network quality defined as: 

Answers + User Busy + Ring No Answer 

_ Terminal Rejects / Total call attempts 

(seizures). Defined as an addition to 

ITU E.411. 

NFC (Near Field Communication) - A set 

of mobile device standards to establish a 

close-proximity radio connection. 

P2P - Person to Person (or human to human 

via telecommunications devices) 

PLMN (Public Land Mobile Network) - 

A Mobile network 

PSMS - Premium SMS (PSMS). 

PSTN (Public Switched Telephone 

Network) - The legacy telephone network 

NGN (Next Generation Network) - 

A broad term used to describe key architectural 

evolutions in telecommunication core 

and access networks. 

QoS (Quality of Service) - Refers to 

several related aspects of telephony and 

computer networks that allow the transport 

of traffic with special requirements. 

NUVO (Network Unaffiliated Virtual 

Operator) - A service provider that assigns 

alternate telephone numbers to provide 

Messaging and/or Voice services with 

interoperability to legacy Messaging & Voice 

networks (e.g. Mediafriends, Pinger, etc). 

OPEX (Operational Expenditure) - 

An ongoing cost for running a product, 

business, or system. 

OTT (Over The Top) - In the fields of broadcasting 

and content delivery, over-the-top 

content (OTT) means on-line delivery of 

video and audio without the Internet service 

provider(Comcast, Verizon, etc.) being 

involved in the control or distribution of the 

content itself. 

RCS (Rich Communications System) - 

RCS is a GSMA initiative to support next 

generation messaging, voice calls with 

advanced capabilities including presence, 

video, real-time messaging with inter-working 

and compatibility with legacy voice & 

messaging services. 

RCSe - Defines a subset of the full RCS 

standard. RCSe is being established in 

Europe at several operators in 2012, using 

the "Joyn" brand. 

SIGTran - GSM MAP (or SS7) over IP 

SIP (Session Initiation Protocol) - 

The Session Initiation Protocol (SIP) is an 

IETF-defined signalling protocol widely used 


231

for controlling communication sessions 

such as voice and video calls over Internet 

Protocol (IP). 

SMS (Short Message Service) - A text 

messaging service component of phone, 

web, or mobile communication systems, 

using standardized communications 

protocols that allow the exchange of short 

text messages between fixed line or mobile 

phone devices. 

Social Engineering - Social engineering 

entices potential victims into taking some 

action that will prove harmful to themselves 

and/or the device they are using. 

SS7 (Signalling System No 7) - A set of 

telephony signalling protocols which are 

used to set up most of the world's public 

switched telephone network telephone calls. 

SSM - Self-Service Machines 

SVA - Stored Value Accounts 

SAP Mobile Services Number Resolution 

System - A globally distributed database of 

numbering plans and number portability 

information for countries around the world. 

NRS is continually updated (real-time for 

some countries) with the latest number 

portability and number range data. 

TAP (Transferred Account Procedure) - 

This is the process and document formats 

that allow a visited network operator to send 

billing records of roaming subscriberrs to 

their respecitive home network operators. 

The latest version of the standard is TAP 3. 

TAP 3.12 - A GSMA specification, released 

in GSMA document TD.57 v30.1 on May 1, 

2012. New functionality includes LTE 

Service support for voice and SMA as well 

as charging flexibility and validation 

improvements among other chagnes. 

TDM (Time-Division Multiplexing) - A type 

of digital multiplexing in which two or more 

bit streams or signals are transferred apparently 

simultaneously as sub-channels in one 

communication channel, but are physically 

taking turns on the channel. 

Transrating - Transrating means changing 

the bitrate (bandwidth) of a stream by 

means of processing. For instance, processing 

an input video stream of 1Mbps so that 

the output stream is 256Kbps only. Transrating 

can increase or decrease the bitrate, 

and usually involves changing the encoding 

parameters. 

Transcoding - A two-step process in which 

the original data/file is decoded to an intermediate 

uncompressed format, which is 

then encoded into the target format. 

232

TN - Telephone Number 

VPLMN (Visited Public Land Mobile 

Network) - In a roaming scenario, the 

network that the subscriber is currently 

connected to. 

VoHSPA - Voice over HSPA 

VoLTE - Voice over LTE 

VoIP (Voice over Internet Protocol) - 

Commonly refers to the communication 

protocols, technologies, methodologies, 

and transmission techniques involved in the 

delivery of voice communications and multimedia 

sessions over Internet Protocol (IP) 

networks, such as the Internet. 

VoWIFI - Voice-over-Wi-Fi 

WAP Billing - This is a capability for mobile 

subscribers to buy content from Wireless 

Application Protocol sites (or mobile sites) 

and have the purchases charged directly 

to their mobile phone bills from their 

mobile operator. 


233

APPENDIX 

Index Of Contributor Companies 

Aylus Networks 

Aylus Networks, helps mobile operators and 

communications service providers deliver 

live video services for consumers and enterprises. 

Solutions range from live video 

sharing, including social networks and RCS/ 

RCSe devices, to multi-party video calling on 

mobile networks. Aylus’ innovative, IP-based 

core infrastructure platform is unique in its 

ability to serve as a video calling interexchange, 

enabling mobile service providers 

to optimise video communications among 

different networks (3G/4G/Wi-Fi) regardless 

of the endpoints, build new revenue 

streams through QoS/QoE, and drive 

mass-market adoption of mobile video 

services based on existing voice calling 

offerings. Visit www.aylus.com 

Bharti Airtel 

Bharti Airtel is a leading integrated telecommunications 

company with operations in 20 

countries across Asia and Africa. Headquartered 

in New Delhi, India the company ranks 

amongst the top 5 mobile service providers 

globally in terms of subscribers. In India, the 

company’s product offerings include 2G, 3G 

and 4G services, fixed line, high speed 

broadband through DSL, IPTV, DTH, enterprise 

services including national and international 

long distance services to operators. 

In the rest of the geographies, it offers 

2G, 3G mobile services. Bharti Airtel had 

over 246 million customers across its 

operations at the end of February 2012. 

Visit www.airtel.in 

CTIA – The Wireless Association ® 

CTIA is an international non-profit membership 

organisation that has represented the 

wireless communications industry since 

1984. Membership in the association 

includes wireless operators and their 

suppliers, as well as providers and manufacturers 

of wireless data services and 

products. The association advocates on 

behalf of its members at all levels of government. 

CTIA also coordinates the industry’s 

voluntary efforts to provide consumers 

with a variety of choices and information 

regarding their wireless products and 

services. This includes the voluntary 

industry guidelines; programs that promote 

mobile device recycling and reusing; and 

wireless accessibility for individuals with 

disabilities. Visit www.ctia.org 

Celcom Axiata 

Celcom is Malaysia’s leading mobile telecommunications 

provider with over 12 

million customers. Established in 1988, it 

has the widest national 2G and 3G networks, 

covering over 98 percent of the population. 

Celcom, that is also the country’s number 

one mobile broadband provider, is moving 

towards offering integrated multi-access 

and multimedia services that are aligned 

with consumer behaviour and demand. 

Celcom is part of the Axiata Group of Companies, 

one of the world’s largest telecommunications 

companies, with more than 180 

million customers across 10 Asian markets. 

Visit: www.celcom.com.my. 

234

Cloudmark 

Cloudmark is the global leader in messaging 

security solutions, delivering the industry’s 

fastest and most effective protection 

against the widest range of messaging 

threats to mobile operators, Internet Service 

Providers and social networks. Cloudmark 

simplifies and advances the management 

of messaging abuse, thereby increasing 

network utilisation and reducing infrastructure 

costs. Protecting 1.8 billion subscribers 

for the world’s largest carrier networks, 

including AT&T, Verizon, T-Mobile, Comcast, 

MySpace, NTT, Swisscom and Time Warner- 

Cable, Cloudmark currently scans 15 

percent of the world’s mobile network traffic, 

15 percent of the world’s Internet traffic and 

50 percent of the world’s social networking 

traffic. Visit: www.cloudmark.com 

Globe Telecom 

Globe Telecom is a full-service telecommunications 

provider in the Philippines, with its 

own international gateways, cable landing 

stations, domestic fibre backhaul and a 

national access network (data, fibre, 3G/ 

HSDPA). It offers a range of wireless and 

wireline voice and data services (including 

Mobile GSM/ 3G/ HSDPA, broadband, PSTN 

Fixed lines, IDD, NDD, Corporate Data, IPLC 

and Internet). Globe offers the most comprehensive 

coverage for international roaming, 

with more than 600 partner networks 

worldwide. Visit: www.globe.com.ph 

GSMA LA 

GSMA Latin America (GSMA LA) has four 

Operator Expert Working Groups covering 

Billing and Roaming (BARG), Regulatory 

(REGU), Technical and Terminals (TECT), 

and Security and Fraud (SEGF) issues in the 

region. GSMA LA hosts two key plenaries a 

year, featuring working group sessions plus 

workshops and seminars on other key 

GSMA initiatives. In Latin America, the 

GSMA member companies serve over 

630 million connections, accounting for 

95% of the total mobile region’s connections. 

Visit: www.gsma.com/latinamerica 

GSMA MMU 

GSMA’s Mobile Money for the Unbanked 

Programme help mobile operators and 

the financial industry collaborate to deliver 

affordable financial services that provide 

safety, security and convenience to millions 

of previously unbanked customers. Since 

the Mobile Money for the Unbanked 

programme was founded, the industry has 

increased in size five-fold, with over 100 

mobile money deployments active in the 

world today – 80% of which are in developing 

markets. The GSMA represents the 

interests of mobile operators worldwide,spanning 

more than 220 countries, 

and uniting nearly 800 of the world’s mobile 

operators, as well as more than 200 

companies in the broader mobile ecosystem, 

including handset makers, software 

companies, equipment providers, Internet 

companies, and media and entertainment 


235

organisations. Visit: www.gsma.com. 

To learn more about the Mobile Money 

for the Unbanked Programme Visit 

www.mmublog.org 

Informa Telecoms & Media 

Informa delivers strategic insight, key market 

data and forecasts to help clients make 

better business decisions for more than 25 

years. It counts 65 analysts in nine research 

offices offering pragmatic advice to the 

leading global operators and builders of communications 

infrastructure. Its chief objective 

is to be accessible, responsive and connected 

both to the markets it serves and the clients 

it assists. Visit: www.informatandm.com 

Korea Telecom 

KT provides telecommunication services 

including local, long distance, and international 

calling, satellite communication, 

data transmission, and wireless telephone 

services in South Korea. The company also 

offers network portal and high-speed 

Internet access, and has the largest share 

of the South Korean local telephone and 

high-speed Internet business. KT is using its 

broad capabilities to lead the global market 

in an era of convergence that sees the 

boundaries blur between voice and data, 

wired and wireless, and broadcasting and 

telecommunications. Visit: www.kt.com 

Mavenir Systems 

Mavenir delivers Converged Voice, Video 

and Messaging solutions, based on the 

mOne Convergence Platform, to wireless 

operators globally. Mavenir’s value-added 

IMS and cloud-based solutions enable the 

transformation of legacy core networks by 

offering compelling new services such as 

VoLTE and RCS, and by providing uniquely 

innovative solutions to address the 

challenge of migrating subscribers and 

services to 4G. These solutions are deployed 

by customers in both North America and 

Europe. Visit: www.mavenir.com 

MediaFriends 

MediaFriends enables the world to 

communicate more freely by breaking 

down barriers of device compatibility 

through its patent pending Mobile-to-IP 

and Multi-Screen Messaging technology. 

HeyWire, the company’s real-time social 

messaging hub, empowers consumers 

worldwide to connect with each other in 

better ways using mobile messaging (SMS 

& MMS), IM, Facebook and Twitter on 

virtually any Internet enabled device. 

Visit: www.mediafriendsinc.com 

Metros PCS 

Dallas-based MetroPCS Communications, 

Inc. (NYSE: PCS) is a provider of no annual 

contract, unlimited wireless communications 

service for a flat rate. MetroPCS is the 

fifth largest facilities-based wireless carrier 

236

in the United States based on number 

of subscribers served. With Metro USA(SM), 

MetroPCS customers can use their service 

in areas throughout the United States 

covering a population of over 280 million 

people. As of September 30, 2012, 

MetroPCS had approximately 9.0 million 

subscribers. For more information please 

visit www.metropcs.com. 

Money2020 

Money2020 Expo is a new conference 

focused on emerging payments and next 

generation financial services that brings 

together innovators from financial 

institutions, mobile, retail and advertising 

to discuss issues around mobile money 

and the customer experience. Money2020 

was co-founded by industry veterans in 

payments and mobile to bring together all 

stakeholders. Visit: www.money2020.com 

Neucom Solutions 

Neucom Solutions provides consulting 

services to the telecom sector focusing 

on areas including: business planning, 

commercial management, partnering, 

change management, business 

transformation and new market entry 

strategy. Visit: www.neucom.eu.com 

PCCW 

PCCW is the largest and most comprehensive 

provider of communications services in 

Hong Kong, offering award-winning innovation 

especially in Next Generation fixed line 

services, broadband pay-TV and Internet 

access, IP-based business services, 3G & 2G 

mobile and public Wi-Fi services, and largescale 

IT solutions. Visit: www.pccw.com 

Qatar Telecom 

Qtel provides a full range of telecommunications 

services in Qatar and across its 

presence in 17 countries. The company 

offers leading-edge products and services, 

and enjoys partnerships with many of the 

world’s leading telecommunications players. 

Qtel has invested over US$3.2 billion in 

Qatar’s technology infrastructure and has 

developed leading-edge Fibre and 4G 

Solutions, as well as an exciting portfolio 

of mobile, fixed-line and entertainment 

services. Qtel is part of the Qtel Group, 

a leading international communications 

company, with a significant presence in 

the MENA region and Southeast Asia, and 

a consolidated customer base of 83.7 

million as of June 2012. Its companies 

include Indosat, Asiacell, Wataniya, Nawras, 

Nedjma and Tunisiana. Visit: www.qtel.qa 

SAP 

As the market leader in enterprise application 

software, SAP (NYSE: SAP) helps companies 

of all sizes and industries run better. 

From back office to boardroom, warehouse 

to storefront, desktop to mobile device, SAP 

empowers people and organisations to work 

together more efficiently and use business 


237

insight more effectively to stay ahead of the 

competition. SAP applications and services 

enable more than 195,000 customers to 

operate profitably, adapt continuously, and 

grow sustainably. Visit www.sap.com. 


SAP Mobile Services is the global leader, in 

enabling mobile information services for 

mobile operators, financial institutions and 

enterprises. It provides customers the 

widest offering in SMS, MMS, GRX, IPX 

Interoperability and innovative mobile consumer 

engagement services. SAP Mobile 

Services processes more than 1.8 billion 

messages per day reaching 900 operations 

and 5.5 billion connections around the world 

visit www.SAP.com 

Singtel 

The SingTel Group is Asia’s leading communications 

group, providing a wide spectrum 

of multimedia and infocoms technology 

(ICT) solutions, including voice, data and 

video services over fixed and wireless platforms. 

Headquartered in Singapore, SingTel 

has more than 130 years of operating experience 

and has played a pivotal role in the 

country’s development as a major communications 

hub. As at 30 June 2012, the 

Group serves 462 million mobile customers 

around the world. The Group is structured 

along three key businesses: Group 

Consumer, Group Digital L!fe and Group ICT. 

Group Consumer brings together the 

Group’s consumer-related functions and 

focuses on setting new benchmarks in 

customer experience. Visit www.singtel.com 

Telecoms.com 

Telecoms.com is the go-to website for anyone 

and everyone in the global telecommunications 

industry. Visit. www.telecoms.com 

Telefónica 

Telefónica has one of the broadest geographic 

footprints of any operator. It is 

present in 25 countries and provides telecommunications 

services to over 300 

million customers in Europe and Latin 

America. In addition, through its industrial 

alliances, which are unique in the sector, it 

shares a joint customer base of more than 

700 million, 10 percent of the world’s population. 

Telefónica operates with four brands: 

Telefónica, Movistar, O2 and Vivo. Visit: 

www.telefonica.com 

textPlus 

textPlus is the world’s leading mobile communication 

destination. It’s where the world 

goes to say hello - anytime, anywhere, 

anyplace. Over 35 million people worldwide 

use textPlus to text and talk for free or 

extremely low cost. textPlus works on 

multiple platforms and devices including 

iOS, Android, Symbian and Windows 

Phones. The company was founded in 2007 

and backed by leading VC firms Matrix 

238

Partners, GRP Partners, and Kleiner Perkins 

Caufield & Byers. Visit: www.textplus.com. 

TIM 

The Telecom Italia Group is Italy’s leading 

ICT enterprise, active in fixed-line and 

mobile telecommunications, the Internet 

and media, office and system solutions, 

research and development. The Group 

also has a significant presence in Latin 

America. Group growth is driven by 

providing leading-edge infrastructure, 

the latest technology, a customer centric 

organisational model and the capabilities 

to cater to the needs of each customer 

cluster. Visit: www.tim.it 

The 3rd Degree 

The 3rd Degree was founded in 2001 to 

bring enterprise class, real-time research 

capabilities to the mobile platform. The 

platform quickly extended to become a 

full mobile CRM solution delivering highly 

scalable, secure, reliable mobile services 

including mobile research, marketing, 

loyalty, mobile web site builder and language 

analysis. Today Synapta mCRM offers a 

unified mobile platform utilised by mobile 

operators, FMCG companies, research 

agencies, the government, banks and 

retail environments worldwide. Visit: 

www.the3rddegree.co.uk 

Urban Airship 

Urban Airship is the unrivalled leader in 

push messaging, delivering billions of 

messages per month with unparalleled 

speed and scale for leading brands such as 

CBS Interactive, Groupon, Soundtracking, 

Walgreens and Warner Bros. Urban Airship 

enables these brands and 65,000 other customers 

to engage consumers directly on 

their mobile device home screens with precision-targeted 

mobile messaging. Complete 

mobile engagement suites offer easy 

and effective end-to-end management of 

the push messaging process from customer 

and location targeting, to automation and 

delivery including message composition, 

instant in-app landing page creation and 

analytics to optimise effectiveness. Visit 

www.urbanairship.com 

Yankee Group 

Yankee is the preeminent research and 

advisory firm equipping companies to profit 

in a mobile world. The core of its content is 

proprietary research and analytics on the 

attitudes, behaviours and usage patterns of 

mobile users. Based on this research, the firm 

provides a range of actionable data, insights 

and advice. Visit: www.yankeegroup.com 


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Editorial Direction 

Carmel Coscia 

Diarmuid Mallon 

Project Managers 

Shahzia Banth 

Jean Loh 

Matthew Sims 

Design 

Boing Design Paris 

BoingDesignParis@yahoo.co.uk 

Developed and produced 

Peggy Anne Salz, 

Publisher & Chief Analyst 

MobileGroove 

www.mobilegroove.com 

peggy@mobilegroove.com 

Amanda Roulstone 

Assistant to Peggy Anne Salz 

www.dragonvirtualassistants.co.uk 

Amanda@dragonvirtualassistants. 

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www.sap.com/contactsap 

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Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. 

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These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only, without representation or 

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Mobile Operator Guide 2013 - Prepaid MVNO

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