M2M Now’s sister site, VanillaPlus, recently spoke to Keith Willetts, Chairman of the TM Forum about the issues facing CSPs in the emerging digital economy.
VanillaPlus: How does the Forum serve the continually evolving communications industry?
Keith Willetts: The digital storm is creating significant headaches for traditional communications service providers (CSPs) – not only are they grappling with an enormous growth in data volumes (data on networks has increased a thousand-fold in the past 20 years according to Analysys-Mason) for which they get very limited return, but digital alternatives are eating up their voice and messaging products. According to a recent Ovum report, over US$ 32bn in SMS revenues disappeared from the mobile industry last year to free products like WhatsApp, Twitter, and so on, and it’s rising fast.
| Keith Willetts is chairman of the TM Forum, a global non-profit association focused on enabling service provider agility and innovation to address the role of CSPs – and others – in the emerging digital services economy. Here, as the industry heads to Nice, France, for TM Forum’s Management World 2013 conference and exhibition, to be held on 13-16 May, he tells VanillaPlus what to expect at the event, and how TM Forum is adapting to meet the needs of members as they take up central roles in the digital economy. |
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While financial institutions have been obsessed by average revenue per user (ARPU), telecom is a margin game – SMS was the last high-volume, high-margin service left for CSPs. As a result, we’re seeing revenues go up as traffic increases, but margins come down. CSPs continue to put a priority on reducing operational costs by driving efficiency, outsourcing and network sharing, but they are now looking for ways to improve market share by providing a better customer experience, better and more targeted marketing though better data analytics, and introducing brand new digital/M2M based services.
TM Forum’s role is to facilitate this transition. For example, we are helping CSPs to improve customer engagement through conferences, seminars and tools like our Customer Experience Guidebook which outlines key principles in implementing CEM programs. We also have a new CEM Index that defines the KPIs that service providers should be constantly evaluating to understand if their investments in CEM are paying off. And our new CEM Maturity Model helps service providers understand and evaluate their programs.
We’re also helping in the new services arena through our Digital Services Initiative which delivers best practices and practical tools that help businesses effectively deliver enterprise-grade digital services in complex, multi-cloud environments. Of course, this focus also carries through to our conferences and events including Management World coming up in Nice.
VP: So what new opportunities do you see emerging?
KW: When it comes to new services in vertical sectors such as smart homes, eHealth, smart energy, mobile money, etc., the market potential is many times larger than today’s telecom industry. Yet, despite already having a large number of enterprise customers the telecom industry has so far been slow to exploit opportunities.
Today there is a barrier here because communications companies aren’t used to partnering. They are used to being the 800 pound gorilla that dominates their suppliers. But they are learning the workings of this new world, just like everyone else.
For example, complex cloud-based and M2M digital services are never likely to be created or delivered by a single company, so partnerships are critical in the digital economy. However, the task can seem daunting – there are hundreds of CSPs around the world, and digital services generally target very large numbers of people. In fact, today, many CSPs are so difficult to work with that digital service providers just go around them – hence the term over-the top (OTT).
To help facilitate the necessary partnerships, one of the major projects TM Forum is currently working on is called the Digital Bridge. It’s a way of providing a common portal into CSPs on operational and business aspects, such as order handling, catalogs, problem solving, revenue management and so on.
The good news is that we are seeing all the parties in the value chain are recognizing the need to partner in a simple, easy and open way. TM Forum’s vision of an Open Digital Economy is very important in helping enable this. We’re helping to oil the wheels by allowing easier plugs and sockets between the different providers in the value chain; laying out a number of common business models that the partners might work in; and codifying common issues such as service level agreements. If these are all different, they add cost, not value and for sure, the digital world is going to remain running on very tight margins because there will always be a competitor who can do it faster cheaper and better than you if you aren’t super-efficient.
VP: What is new for Management World 2013 and how is it changing to meet changing industry demands?
KW: Management World 2013 takes a close-up look at the digital world and how to navigate that storm I talked about earlier. After our keynote sessions (and we have some super keynotes), we will drill down into eight themed Forums on issues such as partnerships, agility, data analytics, security, revenue assurance, customer experience and continuous cost reduction. Alongside the main conference will be highly interesting MasterClass seminars – deep dive sessions on topics like product lifecycle management, additional training programs and our Platinum Program for executives.
A big difference this year is we are bringing in topic-specific experts – from major end users, cloud-based players like Rackspace, and disrupters like BitTorrent – to take an all-encompassing view at the digital services ecosystem from outside the telecom industry. We have over 200 speakers, including over 50 C-level executives presenting. And of course we’re back in the sunshine of the Cote d’Azur in the newly refurbished and sparkling Acropolis Centre.
VP: What are some of the highlights that people won’t want to miss in Nice?
KW: Our Keynote Perspectives program takes a 360 degree vision of the digital services ecosystem. Gervais Pellisier, the CEO delegate of France Telecom-Orange is one of our featured keynote speakers alongside other visionaries from outside the telecoms sector, including: Steven Shurrock, the global chief commercial officer of Telefónica Digital, Eric Klinker, the chief executive of BitTorrent, Michael Harte, the CIO of Commonwealth Bank, Hallie Harenski, the CMO of AIG, and Steve Mills, the CIO of Rackspace are among big names announced so far with more to come nearer the time.
As you can see from the keynotes, this year’s Management World pursues a B2B enterprise service orientation because enterprise services are going to be huge. But enterprise services almost invariably have be delivered in partnerships, and the quality of service has to be top notch if people are running their business on them. If you’re asking enterprises to pay for quality of service, you have to deliver it and prove that a service meets its service level agreement (SLA). That won’t be achieved by CSPs alone; it will be done in partnership and, in some areas, the stakes are extremely high. That’s why organisations like salesforce.com have joined TM Forum.
One of the unique aspects of all of our Management World conferences is the hugely popular Catalysts: Rapid Technology Innovation Projects highlighted on the expo floor in The Hub. The Hub is the place to see TM Forum in action and features multiple zones that are not only tied back to the conference themes, but also tied back to the work TM Forum is doing. It’s the heart of the conference and the place to engage with us and our members.
VP: What will be some key take-aways from Nice?
KW: TM Forum has always been a meeting point for sharing ideas and doing business. In the past that’s mostly been between operators and their suppliers. But at Management World in Nice, we are structuring the conference to be a meeting point between all types of players in the digital economy and helping these players partner together, not only for mutual benefit but also to help the digital world move faster so everyone can benefit.
A lot of the focus at Management World this year is on the shift from first-generation consumer digital services where service quality, security and so on can be on a ‘best efforts’ basis, to a complex environment where consumers and business alike will rely on SLAs from their providers.
We’ll be talking about how today, customers can stream OTT services and maybe the service arrives, maybe it doesn’t. But if an end-user is paying for a premium content service from Netflix; or depends on their M2M heart monitor; or they are simply a small plumbing firm trying to run a business, they all need end-to-end service quality and reliability. Their service provider has to be able to stand and deliver. Doing this in today’s complex ecosystem of partners is hugely complex and service providers are only just waking up to how to master that challenge at a price that the customer is prepared to pay while making a decent return.
VP: How can people engage with TM Forum and benefit from the thought leadership and approaches you’re developing after Management World is over?
KW: TM Forum is increasing the number of ways people can engage with us. For example, we launched our Digital Services Channel, Business Channel and IT Channel late last year where people can follow the digital economy conversation. We’re also upping the game in terms of industry thought leadership, and you will see far more from us – not only from people that work for us, but also from external thought leaders in adjacent sectors through blogs, video interviews (for example, some recent videos from industry leaders at our sessions in Barcelona at Mobile World Congress); webinars; conferences and summits.
In addition to Management World, we are increasing our outreach through seminars and smaller, pop-up events for a particular operator or a group of people in a specific city – like our smash hit Big Data Analytics Summit we held in January, and our standing-room only sessions on business transformation for mobile operators at Mobile World Congress.
As I mentioned earlier, at Nice we’re introducing deep-dive workshops that will increase the range of engagement vehicles available to our members. Called TM Forum’s MasterClass Series, these interactive sessions are led by industry gurus who encourage interaction and discussion, so that our members take away ideas, inspiration and connections.
Going forward in 2013, we are focusing heavily on our Digital Services Initiative helping our current members to navigate the digital storm as well as welcoming new members from the wider digital economy. Already we’ve established an Open Digital Economy Group, which is made up of many of the world’s largest global companies, including Accenture, China Mobile, France Telecom-Orange, IBM, Microsoft Corp., Oracle, Telecom Italia, Telefónica Digital and Telstra, and set the pace with two intensive agile workshops to produce a lot in the next 90 days to benefit our members, including: a partnering model guidebook, a reference digital services architecture, and a set of major APIs and processes for digital service delivery.
Here at the Forum, we’re practicing what we preach in terms of embracing change and operating in a more agile and flexible way, too. Our event in Nice will demonstrate how we are changing and how our new approach will deliver.
 About TM Forum:TM Forum is a global, non-profit industry association focused on simplifying the complexity of running a service provider’s business. As an established industry thought-leader, the Forum serves as a unifying force, enabling more than 850 companies across 195 countries to solve critical business issues through access to a wealth of knowledge, intellectual capital and standards. The Forum provides a unique, fair and safe environment for the entire value-chain to collaborate on pressing industry issues, helping companies of all sizes gain a competitive edge and the flexibility and speed they need to underpin future growth. For more information, visit www.tmforum.org. |
