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Mark Zuckerberg advocates operator partnerships to help connect more people to the Internet

Paul Lambert, Analyst, Service Providers and Markets

Facebook CEO Mark Zuckerberg used his keynote speech at MWC 2015 to make the case for why operators should work with the social networking giant to connect more users in developing markets to the Internet. His plan is to use the Facebook-backed initiative to provide a low-cost way for a wide base of users to access basic, non-data-heavy Internet services such as a text-only version of Facebook.

Although it is clear that the cost of services is a major barrier to a broad segment of users’ ability to access the mobile Internet, especially in developing markets, Zuckerberg must convince operators that represents the best way to connect them. Operators will question whether they can gain more by partnering with Facebook to provide free or low-cost access to a range of popular services or simply by pricing and marketing their services in ways that resonate with low-ARPU customers.

Zuckerberg’s case rests on the argument that’s business model will be lucrative for operators because it leads to paid-for data usage. He argued that in the Philippines “the number of people using Internet data has doubled” as a result of services and that in Paraguay the number of mobile data users grew by 30% during a free trial of Facebook. Zuckerberg said that hopes to add three to five new markets to its existing list of operator partners, including Millicom (Tigo) in Latin America, Airtel in India, and XL Axiata in Indonesia.

As Zuckerberg seeks to make the case that is more successful at increasing data traffic than operators’ own initiatives, he should be applauded for drawing operators’ attention to the question of how they can best connect the remaining base of users that still do not access the Internet.

At the same time, Zuckerberg’s proposition goes to the heart of a major question facing operators: where do they sit in the digital service value chain and in what ways do they need to partner to take advantage of the new opportunities it offers? Whether Facebook can prove that it has operators’ best interests at heart will largely depend on how successful compared to operators’ own strategies to connect the unconnected.

Deutsche Telekom leverages its European footprint to carve out a competitive advantage

Paul Lambert, Analyst, Service Providers and Markets

Deutsche Telekom (DT) plans to connect 10 of its networks in Europe to create one standardized platform for the delivery of services in each of the markets. The move highlights how operators are seeking to differentiate and realize cost savings by investing massively in ensuring a high-quality network experience for end users. With 4G and fiber technologies operators are seeing more than ever how the capabilities of their networks affect their ability to attract and retain the highest-spending consumers. DT clearly expects its latest network-investment strategy to strengthen its ability to compete.

DT’s CEO, Tim Hoettges, made bold claims for the initiative. “We are the first multinational telecommunications company to be able to truly make use of the synergies that arise when the national companies work together,” he said. “This is our master plan for the digitization of Europe.”

As part of the strategy, DT will invest €6bn ($6.7bn) until 2018 to create the network. The operator has already connected the first three of the 10 countries to the new European network – Croatia, Hungary, and Slovakia – and all can now draw products from the standardized platform. By the end of 2018 all DT’s networks will be connected to a central platform via IP; it is currently migrating up to 100,000 customer lines across Europe to IP technology each week.

The first product available via the platform is Cloud VPN, a business customer service for virtual private networks. “Instead of having 10 factories in 10 countries for 10 solutions, we will have central production sites for everyone,” said Claudia Nemat, DT board member for Europe and Technology. “Our national companies can draw standardized product building blocks from a central catalog and use these to put together offerings customized to suit the market situation in their own regions.”

DT will also roll out hybrid technology to bundle fixed-line and mobile access. The first hybrid router is already available throughout Germany and the next step will be to integrate additional TV functions. Other European DT subsidiaries also plan to introduce the new router this year; the goal is to bring a total of 100,000 devices to market by the end of 2016.

With 4G and fiber deployments operators can demonstrate that they offer a better network experience than their rivals, improve KPIs, and offer the most compelling services. As operators edge toward integrated offerings (so-called quad-play services) DT’s investments in its network will put pressure on its rivals to respond.

Operators finalize their 5G requirements

Paul Lambert, Analyst, Service Providers and Markets

The operator-led technology standards group the Next Generation Mobile Networks (NGMN) alliance has published its “5G White Paper,” an important step in laying the foundation for industry-wide commitment to an agreed approach to next-generation technology. A global team of more than 100 experts has contributed to the document after consolidating operator requirements intended to support the standardization and availability of 5G for 2020 and beyond.

The move is just one (albeit important) step in moving the industry toward an agreed approach to 5G technology development. There remains much work to be done to ensure that the leading vendors and handset manufacturers approach 5G in a way that builds on the successes of 4G network deployments. Although the vendor community is not compelled to incorporate NGMN’s requirements, doing so will promote the introduction of commonly agreed, interoperable, and cost-effective 5G systems in 2020 and soon after. With 4G technology, the industry has shown that it can work together to define and commercialize commonly agreed new technology standards whose commercial success is not hampered by company-specific needs. In the process it has laid a solid foundation for work on future technology; as 2020 approaches, now is the time to build on this.

Today’s NGMN announcement follows yesterday’s announcements from operators including DoCoMo, China Mobile, KT Corporation, and Telstra detailing how they plan to accelerate 5G commercial deployments and drive standardization efforts. NGMN expects 5G to expand the capabilities of the network to support much greater throughput, lower latency, and higher connection density while improving cost and energy efficiency in an ecosystem that is “truly global, free of fragmentation, and open for innovations.”

Nokia pushes its big data and analytics offerings

Chantel Cary, Analyst, Telecoms Operations and IT

Nokia has announced a slew of new offerings focused around predictive analytics at MWC 2015. The provider plans to offer a predictive marketing solution in addition to Nokia Predictive Care, Nokia iSON Manager, and Nokia Emergency Alert.

The latest launches will enable operators to analyze and predict a range of factors, from customer behavior to potential network anomalies that could impact service. Nokia’s predictive marketing offering will be integrated into its customer experience management solution and will use algorithms to monitor and predict customer behavior, enabling communications service providers to offer personalized services to customers in near real time. The technology is intended to allow telcos to spot these anomalies and act before the issue can reach the customer. Nokia has also announced offerings that will use big data to improve network efficiency and enable operators and public safety authorities to convey alerts to subscribers in a known emergency area.

Nokia’s announcements follow news that Ericsson will also focus on a new analytics solution, further emphasizing the need for telcos to invest in big data and analytics in order to improve the overall customer experience.

BAE Systems unveils a new prescriptive analytics tool for communications service providers

Chantel Cary, Analyst, Telecoms Operations and IT

BAE Systems has unveiled a new prescriptive analytics tool, CommsReveal, at MWC 2015. The tool will allow communications service providers to monitor and predict how changes to network infrastructures, tariffs, and products will perform before making such changes.

CommsReveal will allow telcos to anticipate customer reaction to changes before they are implemented, creating a better customer experience. The tool will analyze various factors that drive customer satisfaction by accessing the vast reservoir of internal telco data, as well as external data such as weather, news, and social media. This will enable telcos to take a proactive approach to potential threats to the network and the customer experience.

Analytics has been a hot topic among attendees of MWC 2015. BAE Systems’ announcement is just one of many launches of analytics tools so far at the conference.

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