Telecom
Content
Vertical Focus
Focus On: Telecom
N Geetha looks at how CIOs in the telecom industry are addressing business challenges by using IT. India becomes the second largest telecom network in the world after China with more than 300 million subscribers. Moreover, it is also the fastest growing telecom market adding about 8.5 -10 million new mobile subscribers every month and the telecom industry is one of the largest spenders on IT in the country. Arpan Gupta, Assistant Manager, Industry Verticals Practice, IDC India reports that the telecom sector grew at over 20.9% in revenue terms during FY08 vs. FY07 emerging as one of the key sectors responsible for India¶s resurgent economic growth. The telecom services industry in the country was worth US $28.9 billion in 2007-08 and is projected to grow to US $57 billion by 2012, at a CAGR of 14.5%. According to Gupta, the subscriber base for mobile services will exceed 737 million by 2012 at a CAGR of 25.9% up from the current 261 million. Besides this, the growth rate of teledensity across urban and rural areas is rising and in the process, it poses significant challenges for CIOs. Both market forces and technological innovations influence growth in the telecom sector. Gupta points out that increased forays to attract mo re subscribers in rural areas and increased domestic and foreign interest in the sector has had a role to play in this. The introduction of 3G and WiMAX technology-based services, content enhancement and value added services (VAS), mobile number portability also had an impact on the growth. In spite of a global economic slowdown, the Indian telecom industry has not fallen into this downward spiral and it remains a promising segment with investments happening. Focus on: Telecom
Top business challenge: Ensuring profitable growth despite a growing subscriber base and fierce competition by way of speed to market, while creating new revenue streams through value added services. Solution: Effective use of CRM, ERP, workflow, OSS (Operation Support Systems), business intelligence for varied billing solutions, infrastructure platform for value added services, GIS, document management solutions etc., for achieving customer delight. How IT can help: Greater transparency in varied billing transactions, reduction in overall communication cost, better customer relationship management and better services.
Strategic technological planning by operators like BSNL, Tata Teleservices, MTNL, Bharti Airtel, Reliance Communications, their offerings and effort towards making technology affordable have influenced the positive growth curve of this sector. According to IDC¶s Gupta, the total IT spend of Indian telcos in CY 2007 was Rs 8,633 crores, which is expected to grow at a CAGR of 17.7% over the period 2008 -2012. This kind of investment has prompted service providers to look out for high -end technologies to make their IT infrastructure flexible, responsive and robust to meet emerging market needs to ensure operational efficiency.
While other sectors are playing it low key, the CIOs of the telecom sector face greater challenges of employing technological innovation to counter growing competition to woo customers. B V Joshi, VP-IT of Reliance Communications found a plethora of opportunities in the country, which is attracting global players to come in B V Joshi, with huge foreign investment, thereby driving margins and profits for all VP-IT of Reliance the telecom companies. The primary driver for growth, he opines, is Communications healthy competition and improvement in technology that service providers are bringing to the table to reduce tariffs and improve service quality. B K Badola, GM-IT of the Rs 7,000 crores MTNL finds that services such as IPTV, VoIP and other GSM -related services have created more growth opportunities from both aspects of operational and fulfillment. ³Every aspect of the services be it PSTN, broadband, CDMA, leased lines, transmission network etc. has increased the growth potential for us to drive better services,´ said Badola.
B K Badola, GM-IT
From Airtel¶s perspective, the organization is witnessing a year-on-year growth of 57% and 42% growth in revenue with its focus on taking the digital lifestyl e to rural markets. ³We intend to make the technology more affordable and are tapping 300,000 census towns and with a joint collaboration with IFFCO are penetrating into 385,000 non -census towns,´ said Menon. The principal objective is to drive profitabil ity for the organization through technological innovations where Airtel has witnessed a 4% profits on its margins and 22% net profits in Q2. BSNL¶s growth is reflected in the increase in the number of lines from one lakh a year back to nine lakh lines in B angalore alone besides increasing subscribers in the state. ³Six lakh mobile customers and 2.5 lakh broadband users, with the growth in broadband increasing also calls for a robust IT system, particularly when we are moving towards IP based platform,´ said Shubhendu Ghosh, Principal GM -IT of BSNL. A G Rao, Chief Technology Officer, Tata Teleservices Limited is bullish about growth. Mobile telephony has been growing at an annual rate of about 90% with Tata Teleservices achieving a CAGR of 113% as of March 2008, with more potential residing in the untapped urban and rural areas. The CIO of the Rs 11,800 crores Siemens, Nishith Sharan, is charting out plans of infrastructure development to leverage opportunity and sustain growth. ³Despite deferred expansion plans in the market, Siemens will explore potential growth areas, look to leverage its domain expertise and create sustainable value propositions for its customers with its range of innovative products, systems and solutions,´ averred Sharan. Given the growth potential and the investments proposed to boost the sector aligned with consumer growth, the telecom sector has been quite IT savvy when compared to the other industry verticals.
A G Rao, Chief Technology Officer, Tata Teleservices Limited
Jai Menon, CIO Bharti Airtel
While agreeing that the country is in early stages of growth as far as teledensity is concerned, Jai Menon, CIO of Bharti Airtel has a huge task ahead. Menon opined that from an overall subscriber point of view, the telecom providers need to offer dial tones to 1 billion people, about half a billion on a faster track. Broadband is in its infancy and has huge potential, in media DTH TV is emerging rapidly, besides the integrated mobile, PC and TV services are taking off.
The CIOs of the telecom segment have been on their toes to meet demand, innovate and track technologies. There are certain popular technological deployments that are unique to this sector. Prevalence of IT The telecom sector differentiates itself from the rest of the verticals by deploying stateof-the-art technology tools influencing economic growth in a big way. Each of the areas, be it billing and payment, call records, value added services, tariff plans, fraud checks, credit checks, etc., calls for IT tools to enable the companies to bring in efficiency. Key technologies deployed by the Indian telecom services sector as per IDC¶s Gupta would be inclined towards workflow management solutions, integration of OSS/BSS applications with ERP, CRM, business intelligen ce and data warehousing. Infrastructure platforms to enable the deployment of value added services (VAS) and the launch of more µwhite-labeled¶ services, geographic information system, document management services, convergence and migration services and disaster recovery solutions etc. are key areas of IT adoption. While growth oriented sectors such as retail, government and education are highly focused on purchasing and deploying hardware, the telecom sector focuses on software and IT services as well as networking technologies to support next generation networks. Siemens¶s Sharan found this sector to be cost and price sensitive. As a result, deployed solutions must be innovative, cost-effective, and should bring about tangible and measurable productivity i mprovements with regard to any kind of software applications. BSNL¶s Ghosh found that a single window approach integrating new software applications including CRM, business intelligence and ERP for billing, order management, material procurement, payment etc., is critical for the sector. According to Tata Teleservices¶s Rao, the product portfolio management (PPM) solution intended for central creation, modification and deletion of products or entities such as tariff plans and schemes are critical. Reliance¶s Joshi found the importance of IT in telecom from the call stage when it is transmitted to the switch to call routing that differentiates between the post paid and prepaid subscribers. ³Call interpreting application software, billing software, CRM, ERP, mediation device, fraud management system, decision support system, dunning, credit control system etc., become the critical components of the IT in this sector,´ said Joshi. MTNL¶s Badola said that telematics, virtualization, SOA and converged MPLS networks play a dominant role in the telecom industry, besides BSS and OSS on the operational side. With the dependence on IT, the CIOs are in no position to curtail IT spending as it becomes a major catalyst for growth. Ringing challenges With technology adoption racing ahead, CIOs of the telecom sector not only have to worry about aligning IT with business. Here IT itself becomes a business which enables the service providers to innovate with regard to their offerings. The major business challenge for every CIO of this sector is to handle growing customer demand and customer retention, while creating new revenue streams to drive growth and profits through varied and innovative services.
For instance, BSNL¶s Ghosh said that his major business challenge is to be to able to integrate the day-to-day business functionalities with the IT system for both internal and external customers, speed to market, managing with insufficient skilled manpower and ever increasing attrition. The greatest challenge lies in retaining and motivating people within a government setup where there is no reward system, while ensuring the organization continues to deliver quality service without any hiccups amidst a growing consumer base. Ghosh maintained, ³Handling new customers and customer retention amidst increasing competition also poses a challenge, which makes it imperative to create new business streams to make ourselves profitable.´ Reliance¶s Joshi said that communication service providers are facing unprecedented business challenges owing to technology convergence needs given the enormous choices for customers in the market in the form of various attractive product or service offerings for minimal rates. ³Our major challenge is with regard to value added services which are vital as new revenue streams and as most of these are targeted at the youth and entertainment. Here, the size of the market cannot be accurately predicted,´ said Joshi adding, ³There are issues related to piracy as far as content and frequency of updates go and to check this scalable infrastructure capacity is required.´ The critical challenge for any CIO is the barrier of handset compatibility to access the value added services, which is keeping users using low-cost handsets away from these services. As the content and services taken to the end user go through a long chain of Service Providers, the revenue sharing results in slim pickings for companies. According to Siemen¶s Sharan, the challenge is to provide a high performance, adaptable, and cost optimal Information Technology environment to meet business requirements and the challenges arising out of ever changing business conditions, markets and product portfolios. For Tata Teleservices¶ Rao ensuring profitable growth in the current scenario of increasing subscribers but decreasing average revenue per user (ARPU), fierce competition from new entrants, increasing revenue streams other than voice like VAS and data services pose challenges which need careful management. ³Providing an enhanced and differentiated customer experience in order to leverage regulatory moves like number portability and control churn, delivering complex services while containing costs is a critical challenge,´ said Rao. MTNL¶s Badola faced the challenge of maintaining systems such as GSM, postpaid, billing, data etc., which are scattered and proper integration methods were required to manage them under one framework. ³Converged networks also pose challenges as a single service delivery platform needs to be created and a centralized monitoring system evolved,´ said Badola. Airtel¶s Menon found a great business challenge to be playing the role of a leader addressing business problems both internally and externally. ³While maintaining the existing operation support systems and business support systems intact, the challenge is to create more revenue streams in the form of portal services, create user technology and support systems, experiment with ERP systems and evolve a robust fiscal model where both OPEX and CAPEX are lowered,´ maintai ned Menon.
IT at Work Telecom CIOs believe in IT as a catalyst for growth and transformation towards profitability. The interesting phenomenon is that unlike other industry verticals, telecom grows its business on IT and automation is critical for survival . The opinions of CIOs and their deployments reflect the fact that IT is an enabler of efficiency. For instance, creating new revenue streams in the form of value added services by the CIOs is nothing short of IT becoming a critical component of revenue ge neration. For MTNL¶s Badola, IT has been a major enabler and he prefers homegrown applications rather than going in for branded systems. MTNL has deployed CSMS (customer service management system), HR related salary management system, financial management systems and billing systems for its businesses. ³We wanted coverage for these solutions with the operation support systems and business support systems and went in for M Dox and IBM and HP platforms. The coverage billing solution has been developed on Int el, Systime, Intec and Elitecore modules and used PeopleSoft for the CRM deployment. Application monitoring services have been critical for value added services from MTNL using the mobile network as part of its service delivery platform. Having a customer base of over 3.5 million in GSM and over 1.5 million on CDMA, the most significant moment was to integrate all the solutions related to PSTN, broadband, GSM, CDMA into a single framework on a converged platform incorporating its OSS and BSS systems. According to Badola this was an Rs 500 crores project. MTNL also evolved two new data centers and worked out a clear RoI strategy where the organization saw benefits in terms of ease of network procurement, per user revenue going up, inventory reduction and ease of operation with centralized billing. Airtel¶s Menon believed IT to be the backbone for its services particularly when handling 2,000 servers, 2,000 terabytes of data, 8 gigabytes of bandwidth and the entire operations and business support system. Unlike its peers, Airtel went in for outsourcing the entire IT deployment function to IBM much earlier. IBM developed the entire ERP system related to HR, supply chain management, finance based on Oracle, Metasol and SoA architecture. ³We got IBM to customize best-of-breed software packages to integrate with our BSS and OSS and creating a service delivery program (SDP). As part of SDP, we came up with mobile TV, DTH besides effective broadband solutions based on the utility model of unstructured services. Interactive portal services also became a major component on SDP. However, the most critical deployment has been the e-tize solution for employees, which was a drive towards a paperless office. ³Content management using transcode, profile manager, digital manager tools also saw a significant response and IT as a whole helped us in bringing out a globally replicable model,´ said Dr Menon. Tata Teleservices¶ Rao opined that the CIOs are leveraging technology and solutions in various areas like deploying hosted and shared services in order to leverage existing infrastructure, with the hosting not limited to internal business units but also to other partner companies and customers. ³We are creating frameworks and services that are aligned to industry standards for seamless integration, automation and promoting reuse, while coming out with innovative solutions like Product Portfolio Management for significant improvements in time-to-market and competitiveness´, said Rao. Developing remotely accessible solutions supporting rural penetration is vital for Tata Teleservices, besides having comprehensive enterprise analytics for data-driven decision-making and better customer understanding. While Green IT initiatives become pertinent for resource optimization, creating a product portfolio management enables central creation, modification and deletion of products or entities such as tariff plans and schemes. This
system, Rao opined would automatically distribute all the products configured to various downstream applications that include billing, order management, enterprise integration, CRM and point of sale. Rao said that IT has contributed significantly to cost reduction in this area through a recharge solution in the form of Electronic Voucher Distribution (EVD), which is an electronic prepaid mobile phone recharge platform that enables the service provider to electronically distribute and sell innovative and flexible recharges to customers. EVD system supports Flexi and Special recharges through various channels such as SMS, WEB, WAP and Payment Gateways, with key benefits being reduced time-to-market from one to two months to less than five days and enormous cost savings of about Rs 6 Crores per month at just 60% penetration. Siemen¶s Sharan initiated deploying enterprise-wide applications extending traditional ERP and Internet applications to support non-critical functionality. Siemens¶ investments went into upgrading the existing network backbone, and changes to the resilient MPLS WAN. Virtualization and blade computing have enabled Sharan and his team to improve processing power resulting in the reduction of OPEX, power and real estate. ³Tools like Microsoft SCCM and SCOM are helping us improve enterprise-wide service delivery through remote management, up-to-date inventory status etc. Reliance has been effectively used IT for every aspect of its business. Joshi initiated customized applications deployments that include fraud management systems, CRM, and a Mediation Device application that transforms raw network events from different network elements into meaningful business information, facilitating billing, interconnect and fraud management systems to reduce the load on usage events validation and processing. ³We went ahead with ERP to deliver a single database that contains all data for the software modules related to manufacturing, supply chain management, financials, projects, HR and the data warehouse,´ said Joshi. With major IT innovations on its agenda, BSNL has gone in for a complete IT transformation and the company i s set to revamp its IT infrastructure and application modules. According to Ghosh, the company will be doing away with its legacy system having an Oracle database and an in-house developed software named DotSoft for its billing systems. ³The entire IT solu tion was being run on legacy systems and in silos and now we intend to bring all applications on the single window system be it commercial, billing, customer services,´ said Ghosh. As per the the National IT policy infrastructure, under the CDR (Call data record) project rolled out by the central government, about Rs 1,200 crores has been sanctioned to BSNL towards IT modernization. BSNL will consolidate all of its systems into one and create a robust IT system, which will enable it to offer greater servi ces. Ghosh maintained that in the process, four new data centers would be established spread across each zone, enveloping North, East and South. Each zone would deploy billing applications including landline billing, leased line billing, broadband, order management and others. ³The entire project is outsourced to HP which will evolve best -of-breed solutions at every phase,´ said Ghosh. Software applications for converting call -related data into a monetary-equivalent value, collection management, carrier billing and settlement system, decision support systems, computer-based information systems including knowledge-based systems that support decision-making activities were key deployments at Reliance.
Despite being the trendsetters with technological innova tions on the cards, the CIOs do feel that they are missing something more. They find certain technologies emerging that could be of use to the sector. Be Trendy Most CIOs in this sector believe that SOA-based Web solutions would be the next phase of deployment and virtualization with the concept of Green IT gaining momentum in the desktop space. Reliance¶s Joshi pointed out that introduction of 3G technologies would change the way of communication, creating room for value added services. Most CIOs in the telecom space are evaluating 3G, which they would be deploying in about two to three quarters from now. MTNL is working out ways to provide a transfer of 1000 Gbps per district soon. Airtel¶s Menon is betting on cloud computing based model as the futur e direction, which could save him an enormous amount of money. Green IT technology and e-waste initiatives also falls under Airtel¶s agenda. IDC¶s Gupta expects the industry to witness cost savings through automation and innovation technologies, improved c onnectivity over voice and data, gathering business intelligence. ³IT will be primarily used for data integration, business integration and technology integration going forward which will drive major growth for organizations,´ said Gupta. Tata¶s Rao found growing customer demand for VoIP, 3G and wireless broadband, next generation network promoting convergence, mobile commerce and location-based services. ³IT is geared up to meet these business frontiers by adhering to standards, promoting service-oriented architecture, rationalization and simplification of IT estate, and deploying Software-as-a-Service (SaaS),´ he commented.
he fact that the Indian telecom industry is robust and growing is no secret. More than 20 million basic and cellular subscribers were added in the year 2003 alone - helping the industry meet its 7 per cent teledensity target, a whole year in advance. This isn¶t a chance occurence. Over the last few years the Indian telecom industry has seen a customer acquisition war like no other ² dramatically falling prices, attractive schemes, and emotional ad campaigns ² vendors have gone all out to get the largest share of the pie, and very successfully so. Recent cuts in tariffs all reiterate the fact that the liberalisation of the telecom industry is having the effect that introducing competition usually does - making the customer win. However, as experts would put it - the best is yet to come. Service providers ² having proved their mettle in the war of customer acquisition will now go on to round two ² customer retention. All of us have had experiences with our service providers that have been less than satisfying. How many times have you received a call from a customer relationship agent enquiring about your phone bill payment ² a day after you¶ve informed another of your intention to drop a cheque off the next day? Or, how about finding that your roaming facility is inactive because
there¶s some confusion at the back end about your credit limit? These are all common issues faced by customers ² issues that have and could cost a service provider a customer. As the market matures and the customer truly becomes king, a service provider will be under pressure to innovate and make customers stay. Effective, personalised customer relationship management will become the mantra for Telecom Service Providers (TSPs). Simply stated, Customer Relationship Mana-gement (CRM) is about finding, getting, and retaining customers. CRM is at the core of a customer-focused business strategy and includes the people, processes, and technology questions associated with marketing, sales and service. In today¶s hyper-competitive world, organisations looking to implement successful CRM strategies need to have access to a common view of the customer using integrated information systems and contact centre implementations. The customer should also be able to communicate via any communication channel he chooses to use. CRM tools will enable TSPs to understand customers against a set of parameters. Vendors will be able to appreciate a customer¶s socio-economic background, preferred services, usage patterns, spending trends, satisfaction levels, payment history, important dates, family information, etc. An effective CRM solution requires good business intelligence tools. These tools are used to eliminate guesswork and gut-feel based decisions. These enhance communication and joint planning across functions and lines of business, and enable organisations to respond much more quickly to changes. These solutions are tightly integrated with all the data sources within the organisation. Disparate data sources are converted into a data warehouse or data mart depending on the need, and data in these warehouses and marts are logically segregated. On top of these data warehouses sit the BI tools. It is these tools that enable organisations to view the entire customer data on a dashboard - measuring return on investment (RoI), quality of service, cost of capital, cost of service, profitability of different features and services being offered to customers, marketing campaign effectiveness, etc. Telecom vendors have so far invested in building systems for mediation, provisioning, service and revenue assurance, network management and other essential enterprise needs. Now they need to focus on establishing robust CRM practices - online, always connected infrastructure that will allow them instant access and facilitate efficient decision making. The Indian telecom industry has come a long way over the last 10 years. Of these, the last four-five have been particularly exciting for the TSP. On one hand, consumers demand cheaper, featurerich and faster access, and on the other, the same consumers are spoilt for choice with multiple carriers and service providers to choose from in each circle. The next five years or so should see the landscape change, and TSPs mature from being salespersons to relationship managers. Added to this, the imminent consolidation will call for the use of technology as the process integrator, ensuring that the customer has a smooth, seamless
experience. The knowing customer will be at the centre of this change - and the biggest beneficiary too.
Focus On: Telecom
N Geetha looks at how CIOs in the telecom industry are addressing business challenges by using IT. India becomes the second largest telecom network in the world after China with more than 300 million subscribers. Moreover, it is also the fastest growing telecom market adding about 8.5 -10 million new mobile subscribers every month and the telecom industry is one of the largest spenders on IT in the country. Arpan Gupta, Assistant Manager, Industry Verticals Practice, IDC India reports that the telecom sector grew at over 20.9% in revenue terms during FY08 vs. FY07 emerging as one of the key sectors responsible for India¶s resurgent economic growth. The telecom services industry in the country was worth US $28.9 billion in 2007-08 and is projected to grow to US $57 billion by 2012, at a CAGR of 14.5%. According to Gupta, the subscriber base for mobile services will exceed 737 million by 2012 at a CAGR of 25.9% up from the current 261 million. Besides this, the growth rate of teledensity across urban and rural areas is rising and in the process, it poses significant challenges for CIOs. Both market forces and technological innovations influence growth in the telecom sector. Gupta points out that increased forays to attract mo re subscribers in rural areas and increased domestic and foreign interest in the sector has had a role to play in this. The introduction of 3G and WiMAX technology-based services, content enhancement and value added services (VAS), mobile number portability also had an impact on the growth. In spite of a global economic slowdown, the Indian telecom industry has not fallen into this downward spiral and it remains a promising segment with investments happening. Focus on: Telecom
Top business challenge: Ensuring profitable growth despite a growing subscriber base and fierce competition by way of speed to market, while creating new revenue streams through value added services. Solution: Effective use of CRM, ERP, workflow, OSS (Operation Support Systems), business intelligence for varied billing solutions, infrastructure platform for value added services, GIS, document management solutions etc., for achieving customer delight. How IT can help: Greater transparency in varied billing transactions, reduction in overall communication cost, better customer relationship management and better services.
Strategic technological planning by operators like BSNL, Tata Teleservices, MTNL, Bharti Airtel, Reliance Communications, their offerings and effort towards making technology affordable have influenced the positive growth curve of this sector. According to IDC¶s Gupta, the total IT spend of Indian telcos in CY 2007 was Rs 8,633 crores, which is expected to grow at a CAGR of 17.7% over the period 2008 -2012. This kind of investment has prompted service providers to look out for high -end technologies to make their IT infrastructure flexible, responsive and robust to meet emerging market needs to ensure operational efficiency.
While other sectors are playing it low key, the CIOs of the telecom sector face greater challenges of employing technological innovation to counter growing competition to woo customers. B V Joshi, VP-IT of Reliance Communications found a plethora of opportunities in the country, which is attracting global players to come in B V Joshi, with huge foreign investment, thereby driving margins and profits for all VP-IT of Reliance the telecom companies. The primary driver for growth, he opines, is Communications healthy competition and improvement in technology that service providers are bringing to the table to reduce tariffs and improve service quality. B K Badola, GM-IT of the Rs 7,000 crores MTNL finds that services such as IPTV, VoIP and other GSM -related services have created more growth opportunities from both aspects of operational and fulfillment. ³Every aspect of the services be it PSTN, broadband, CDMA, leased lines, transmission network etc. has increased the growth potential for us to drive better services,´ said Badola.
B K Badola, GM-IT
From Airtel¶s perspective, the organization is witnessing a year-on-year growth of 57% and 42% growth in revenue with its focus on taking the digital lifestyl e to rural markets. ³We intend to make the technology more affordable and are tapping 300,000 census towns and with a joint collaboration with IFFCO are penetrating into 385,000 non -census towns,´ said Menon. The principal objective is to drive profitabil ity for the organization through technological innovations where Airtel has witnessed a 4% profits on its margins and 22% net profits in Q2. BSNL¶s growth is reflected in the increase in the number of lines from one lakh a year back to nine lakh lines in B angalore alone besides increasing subscribers in the state. ³Six lakh mobile customers and 2.5 lakh broadband users, with the growth in broadband increasing also calls for a robust IT system, particularly when we are moving towards IP based platform,´ said Shubhendu Ghosh, Principal GM -IT of BSNL. A G Rao, Chief Technology Officer, Tata Teleservices Limited is bullish about growth. Mobile telephony has been growing at an annual rate of about 90% with Tata Teleservices achieving a CAGR of 113% as of March 2008, with more potential residing in the untapped urban and rural areas. The CIO of the Rs 11,800 crores Siemens, Nishith Sharan, is charting out plans of infrastructure development to leverage opportunity and sustain growth. ³Despite deferred expansion plans in the market, Siemens will explore potential growth areas, look to leverage its domain expertise and create sustainable value propositions for its customers with its range of innovative products, systems and solutions,´ averred Sharan. Given the growth potential and the investments proposed to boost the sector aligned with consumer growth, the telecom sector has been quite IT savvy when compared to the other industry verticals.
A G Rao, Chief Technology Officer, Tata Teleservices Limited
Jai Menon, CIO Bharti Airtel
While agreeing that the country is in early stages of growth as far as teledensity is concerned, Jai Menon, CIO of Bharti Airtel has a huge task ahead. Menon opined that from an overall subscriber point of view, the telecom providers need to offer dial tones to 1 billion people, about half a billion on a faster track. Broadband is in its infancy and has huge potential, in media DTH TV is emerging rapidly, besides the integrated mobile, PC and TV services are taking off.
The CIOs of the telecom segment have been on their toes to meet demand, innovate and track technologies. There are certain popular technological deployments that are unique to this sector. Prevalence of IT The telecom sector differentiates itself from the rest of the verticals by deploying stateof-the-art technology tools influencing economic growth in a big way. Each of the areas, be it billing and payment, call records, value added services, tariff plans, fraud checks, credit checks, etc., calls for IT tools to enable the companies to bring in efficiency. Key technologies deployed by the Indian telecom services sector as per IDC¶s Gupta would be inclined towards workflow management solutions, integration of OSS/BSS applications with ERP, CRM, business intelligen ce and data warehousing. Infrastructure platforms to enable the deployment of value added services (VAS) and the launch of more µwhite-labeled¶ services, geographic information system, document management services, convergence and migration services and disaster recovery solutions etc. are key areas of IT adoption. While growth oriented sectors such as retail, government and education are highly focused on purchasing and deploying hardware, the telecom sector focuses on software and IT services as well as networking technologies to support next generation networks. Siemens¶s Sharan found this sector to be cost and price sensitive. As a result, deployed solutions must be innovative, cost-effective, and should bring about tangible and measurable productivity i mprovements with regard to any kind of software applications. BSNL¶s Ghosh found that a single window approach integrating new software applications including CRM, business intelligence and ERP for billing, order management, material procurement, payment etc., is critical for the sector. According to Tata Teleservices¶s Rao, the product portfolio management (PPM) solution intended for central creation, modification and deletion of products or entities such as tariff plans and schemes are critical. Reliance¶s Joshi found the importance of IT in telecom from the call stage when it is transmitted to the switch to call routing that differentiates between the post paid and prepaid subscribers. ³Call interpreting application software, billing software, CRM, ERP, mediation device, fraud management system, decision support system, dunning, credit control system etc., become the critical components of the IT in this sector,´ said Joshi. MTNL¶s Badola said that telematics, virtualization, SOA and converged MPLS networks play a dominant role in the telecom industry, besides BSS and OSS on the operational side. With the dependence on IT, the CIOs are in no position to curtail IT spending as it becomes a major catalyst for growth. Ringing challenges With technology adoption racing ahead, CIOs of the telecom sector not only have to worry about aligning IT with business. Here IT itself becomes a business which enables the service providers to innovate with regard to their offerings. The major business challenge for every CIO of this sector is to handle growing customer demand and customer retention, while creating new revenue streams to drive growth and profits through varied and innovative services.
For instance, BSNL¶s Ghosh said that his major business challenge is to be to able to integrate the day-to-day business functionalities with the IT system for both internal and external customers, speed to market, managing with insufficient skilled manpower and ever increasing attrition. The greatest challenge lies in retaining and motivating people within a government setup where there is no reward system, while ensuring the organization continues to deliver quality service without any hiccups amidst a growing consumer base. Ghosh maintained, ³Handling new customers and customer retention amidst increasing competition also poses a challenge, which makes it imperative to create new business streams to make ourselves profitable.´ Reliance¶s Joshi said that communication service providers are facing unprecedented business challenges owing to technology convergence needs given the enormous choices for customers in the market in the form of various attractive product or service offerings for minimal rates. ³Our major challenge is with regard to value added services which are vital as new revenue streams and as most of these are targeted at the youth and entertainment. Here, the size of the market cannot be accurately predicted,´ said Joshi adding, ³There are issues related to piracy as far as content and frequency of updates go and to check this scalable infrastructure capacity is required.´ The critical challenge for any CIO is the barrier of handset compatibility to access the value added services, which is keeping users using low-cost handsets away from these services. As the content and services taken to the end user go through a long chain of Service Providers, the revenue sharing results in slim pickings for companies. According to Siemen¶s Sharan, the challenge is to provide a high performance, adaptable, and cost optimal Information Technology environment to meet business requirements and the challenges arising out of ever changing business conditions, markets and product portfolios. For Tata Teleservices¶ Rao ensuring profitable growth in the current scenario of increasing subscribers but decreasing average revenue per user (ARPU), fierce competition from new entrants, increasing revenue streams other than voice like VAS and data services pose challenges which need careful management. ³Providing an enhanced and differentiated customer experience in order to leverage regulatory moves like number portability and control churn, delivering complex services while containing costs is a critical challenge,´ said Rao. MTNL¶s Badola faced the challenge of maintaining systems such as GSM, postpaid, billing, data etc., which are scattered and proper integration methods were required to manage them under one framework. ³Converged networks also pose challenges as a single service delivery platform needs to be created and a centralized monitoring system evolved,´ said Badola. Airtel¶s Menon found a great business challenge to be playing the role of a leader addressing business problems both internally and externally. ³While maintaining the existing operation support systems and business support systems intact, the challenge is to create more revenue streams in the form of portal services, create user technology and support systems, experiment with ERP systems and evolve a robust fiscal model where both OPEX and CAPEX are lowered,´ maintai ned Menon.
IT at Work Telecom CIOs believe in IT as a catalyst for growth and transformation towards profitability. The interesting phenomenon is that unlike other industry verticals, telecom grows its business on IT and automation is critical for survival . The opinions of CIOs and their deployments reflect the fact that IT is an enabler of efficiency. For instance, creating new revenue streams in the form of value added services by the CIOs is nothing short of IT becoming a critical component of revenue ge neration. For MTNL¶s Badola, IT has been a major enabler and he prefers homegrown applications rather than going in for branded systems. MTNL has deployed CSMS (customer service management system), HR related salary management system, financial management systems and billing systems for its businesses. ³We wanted coverage for these solutions with the operation support systems and business support systems and went in for M Dox and IBM and HP platforms. The coverage billing solution has been developed on Int el, Systime, Intec and Elitecore modules and used PeopleSoft for the CRM deployment. Application monitoring services have been critical for value added services from MTNL using the mobile network as part of its service delivery platform. Having a customer base of over 3.5 million in GSM and over 1.5 million on CDMA, the most significant moment was to integrate all the solutions related to PSTN, broadband, GSM, CDMA into a single framework on a converged platform incorporating its OSS and BSS systems. According to Badola this was an Rs 500 crores project. MTNL also evolved two new data centers and worked out a clear RoI strategy where the organization saw benefits in terms of ease of network procurement, per user revenue going up, inventory reduction and ease of operation with centralized billing. Airtel¶s Menon believed IT to be the backbone for its services particularly when handling 2,000 servers, 2,000 terabytes of data, 8 gigabytes of bandwidth and the entire operations and business support system. Unlike its peers, Airtel went in for outsourcing the entire IT deployment function to IBM much earlier. IBM developed the entire ERP system related to HR, supply chain management, finance based on Oracle, Metasol and SoA architecture. ³We got IBM to customize best-of-breed software packages to integrate with our BSS and OSS and creating a service delivery program (SDP). As part of SDP, we came up with mobile TV, DTH besides effective broadband solutions based on the utility model of unstructured services. Interactive portal services also became a major component on SDP. However, the most critical deployment has been the e-tize solution for employees, which was a drive towards a paperless office. ³Content management using transcode, profile manager, digital manager tools also saw a significant response and IT as a whole helped us in bringing out a globally replicable model,´ said Dr Menon. Tata Teleservices¶ Rao opined that the CIOs are leveraging technology and solutions in various areas like deploying hosted and shared services in order to leverage existing infrastructure, with the hosting not limited to internal business units but also to other partner companies and customers. ³We are creating frameworks and services that are aligned to industry standards for seamless integration, automation and promoting reuse, while coming out with innovative solutions like Product Portfolio Management for significant improvements in time-to-market and competitiveness´, said Rao. Developing remotely accessible solutions supporting rural penetration is vital for Tata Teleservices, besides having comprehensive enterprise analytics for data-driven decision-making and better customer understanding. While Green IT initiatives become pertinent for resource optimization, creating a product portfolio management enables central creation, modification and deletion of products or entities such as tariff plans and schemes. This
system, Rao opined would automatically distribute all the products configured to various downstream applications that include billing, order management, enterprise integration, CRM and point of sale. Rao said that IT has contributed significantly to cost reduction in this area through a recharge solution in the form of Electronic Voucher Distribution (EVD), which is an electronic prepaid mobile phone recharge platform that enables the service provider to electronically distribute and sell innovative and flexible recharges to customers. EVD system supports Flexi and Special recharges through various channels such as SMS, WEB, WAP and Payment Gateways, with key benefits being reduced time-to-market from one to two months to less than five days and enormous cost savings of about Rs 6 Crores per month at just 60% penetration. Siemen¶s Sharan initiated deploying enterprise-wide applications extending traditional ERP and Internet applications to support non-critical functionality. Siemens¶ investments went into upgrading the existing network backbone, and changes to the resilient MPLS WAN. Virtualization and blade computing have enabled Sharan and his team to improve processing power resulting in the reduction of OPEX, power and real estate. ³Tools like Microsoft SCCM and SCOM are helping us improve enterprise-wide service delivery through remote management, up-to-date inventory status etc. Reliance has been effectively used IT for every aspect of its business. Joshi initiated customized applications deployments that include fraud management systems, CRM, and a Mediation Device application that transforms raw network events from different network elements into meaningful business information, facilitating billing, interconnect and fraud management systems to reduce the load on usage events validation and processing. ³We went ahead with ERP to deliver a single database that contains all data for the software modules related to manufacturing, supply chain management, financials, projects, HR and the data warehouse,´ said Joshi. With major IT innovations on its agenda, BSNL has gone in for a complete IT transformation and the company i s set to revamp its IT infrastructure and application modules. According to Ghosh, the company will be doing away with its legacy system having an Oracle database and an in-house developed software named DotSoft for its billing systems. ³The entire IT solu tion was being run on legacy systems and in silos and now we intend to bring all applications on the single window system be it commercial, billing, customer services,´ said Ghosh. As per the the National IT policy infrastructure, under the CDR (Call data record) project rolled out by the central government, about Rs 1,200 crores has been sanctioned to BSNL towards IT modernization. BSNL will consolidate all of its systems into one and create a robust IT system, which will enable it to offer greater servi ces. Ghosh maintained that in the process, four new data centers would be established spread across each zone, enveloping North, East and South. Each zone would deploy billing applications including landline billing, leased line billing, broadband, order management and others. ³The entire project is outsourced to HP which will evolve best -of-breed solutions at every phase,´ said Ghosh. Software applications for converting call -related data into a monetary-equivalent value, collection management, carrier billing and settlement system, decision support systems, computer-based information systems including knowledge-based systems that support decision-making activities were key deployments at Reliance.
Despite being the trendsetters with technological innova tions on the cards, the CIOs do feel that they are missing something more. They find certain technologies emerging that could be of use to the sector. Be Trendy Most CIOs in this sector believe that SOA-based Web solutions would be the next phase of deployment and virtualization with the concept of Green IT gaining momentum in the desktop space. Reliance¶s Joshi pointed out that introduction of 3G technologies would change the way of communication, creating room for value added services. Most CIOs in the telecom space are evaluating 3G, which they would be deploying in about two to three quarters from now. MTNL is working out ways to provide a transfer of 1000 Gbps per district soon. Airtel¶s Menon is betting on cloud computing based model as the futur e direction, which could save him an enormous amount of money. Green IT technology and e-waste initiatives also falls under Airtel¶s agenda. IDC¶s Gupta expects the industry to witness cost savings through automation and innovation technologies, improved c onnectivity over voice and data, gathering business intelligence. ³IT will be primarily used for data integration, business integration and technology integration going forward which will drive major growth for organizations,´ said Gupta. Tata¶s Rao found growing customer demand for VoIP, 3G and wireless broadband, next generation network promoting convergence, mobile commerce and location-based services. ³IT is geared up to meet these business frontiers by adhering to standards, promoting service-oriented architecture, rationalization and simplification of IT estate, and deploying Software-as-a-Service (SaaS),´ he commented.
he fact that the Indian telecom industry is robust and growing is no secret. More than 20 million basic and cellular subscribers were added in the year 2003 alone - helping the industry meet its 7 per cent teledensity target, a whole year in advance. This isn¶t a chance occurence. Over the last few years the Indian telecom industry has seen a customer acquisition war like no other ² dramatically falling prices, attractive schemes, and emotional ad campaigns ² vendors have gone all out to get the largest share of the pie, and very successfully so. Recent cuts in tariffs all reiterate the fact that the liberalisation of the telecom industry is having the effect that introducing competition usually does - making the customer win. However, as experts would put it - the best is yet to come. Service providers ² having proved their mettle in the war of customer acquisition will now go on to round two ² customer retention. All of us have had experiences with our service providers that have been less than satisfying. How many times have you received a call from a customer relationship agent enquiring about your phone bill payment ² a day after you¶ve informed another of your intention to drop a cheque off the next day? Or, how about finding that your roaming facility is inactive because
there¶s some confusion at the back end about your credit limit? These are all common issues faced by customers ² issues that have and could cost a service provider a customer. As the market matures and the customer truly becomes king, a service provider will be under pressure to innovate and make customers stay. Effective, personalised customer relationship management will become the mantra for Telecom Service Providers (TSPs). Simply stated, Customer Relationship Mana-gement (CRM) is about finding, getting, and retaining customers. CRM is at the core of a customer-focused business strategy and includes the people, processes, and technology questions associated with marketing, sales and service. In today¶s hyper-competitive world, organisations looking to implement successful CRM strategies need to have access to a common view of the customer using integrated information systems and contact centre implementations. The customer should also be able to communicate via any communication channel he chooses to use. CRM tools will enable TSPs to understand customers against a set of parameters. Vendors will be able to appreciate a customer¶s socio-economic background, preferred services, usage patterns, spending trends, satisfaction levels, payment history, important dates, family information, etc. An effective CRM solution requires good business intelligence tools. These tools are used to eliminate guesswork and gut-feel based decisions. These enhance communication and joint planning across functions and lines of business, and enable organisations to respond much more quickly to changes. These solutions are tightly integrated with all the data sources within the organisation. Disparate data sources are converted into a data warehouse or data mart depending on the need, and data in these warehouses and marts are logically segregated. On top of these data warehouses sit the BI tools. It is these tools that enable organisations to view the entire customer data on a dashboard - measuring return on investment (RoI), quality of service, cost of capital, cost of service, profitability of different features and services being offered to customers, marketing campaign effectiveness, etc. Telecom vendors have so far invested in building systems for mediation, provisioning, service and revenue assurance, network management and other essential enterprise needs. Now they need to focus on establishing robust CRM practices - online, always connected infrastructure that will allow them instant access and facilitate efficient decision making. The Indian telecom industry has come a long way over the last 10 years. Of these, the last four-five have been particularly exciting for the TSP. On one hand, consumers demand cheaper, featurerich and faster access, and on the other, the same consumers are spoilt for choice with multiple carriers and service providers to choose from in each circle. The next five years or so should see the landscape change, and TSPs mature from being salespersons to relationship managers. Added to this, the imminent consolidation will call for the use of technology as the process integrator, ensuring that the customer has a smooth, seamless
experience. The knowing customer will be at the centre of this change - and the biggest beneficiary too.
