The rules of the game for telcos have changed. Cloud, big data and M2M are replacing voice and SMS as future revenue drivers.

1. Transformation
Telcos are transforming with technology. M2M, Big Data and
Cloud have very important roles in this transformation.
T
he rules of the game
for telecom companies
have changed in the
last 5 years. The main
problem facing these
firms is how to address the issue
of revenues falling at the same
time that operating costs are
increasing. In 2009, telcos were
making much more money from
traditional services like voice
and SMS. Now the percentage of
data and internet in their revenue
is increasing fast. But they also
have to invest in new technology
and IT.
According to research firm
Gartner, between 2011 and 2015,
the traditional telecom services
market will increase from
US$338 billion to US$346 billion.
In the same time period, the IT
and public cloud services market
will increase from US$894 billion
to US$1.139 trillion. There is a big
opportunity for communications
service providers (CSPs) in this
area. Again, according to Gartner,
IT and public cloud services
revenues for CSPs will represent
time forTelcos
REPORT

2. about 20% of enterprise network
revenues in 2015. These services
will have a market share of about
6.1 percent.
Big data, M2M and cloud
computing are becoming more
and more attractive to telco
companies as services they can
provide to increase revenues.
These subjects and more were
explored by attendees at the HP
CommsWorld 2013 conference,
held by HP in Istanbul in May. HP
also introduced new products and
services in these areas.
Big Data:
Big problem,
Big solution
The hottest topic among
attendees was big data. Aamir
Altaf, Executive Manager for
Mobily, the second-largest
operator in Saudi Arabia, says,
“The topics which were discussed
in the conference ware very
interesting. I was particularly
interested in big data and the
new opportunities on mobile
advertising and royalty programs.
Big data is hot topic for us. Since
we have a lot of structured
and unstructured data, we are
looking for ways to use that data
in order to know more about our
customers. Once we know more
about our customers, we are able
to give them data services and we
can generate more profits.”
Big data is quite a new
concept for companies. What
is exactly big data? Emanuele
Bardone, Chief Architect of
HP CMS EMEA region, says
“Today there is not a common
definition for big data. What is
big data? It is composition of
volume, variety and velocity.”
It is giving a big opportunity to
the telecommunications sector.
Telcos are collecting a large
amount of information every day.
Says Bardone, “We are speaking
[of] about 40 terabytes in a day.
It is a huge volume. Only a small
amount of this information is
monetized. Today the data are
used in the marketing department
for addressing the traditional
campaign. But you can think it
can increase.”
Data speeds have increased.
Consumption of data by
customers has increased. But
data prices have gone down. Altaf
says, “Mobile operators have
been unsuccessful in charging
for the value of data. Now we are
very keen on targeting charging
more for better services and
value. It is very important,
because the voice revenues are
shrinking. We are not getting the
same voice revenues that we
were used to get six months back
or even three months back. It is
on a constant decline.”
Not just for marketing
Big data is not just important for
marketing, it is also important
for retention and management
of the existing customer base.
Penetration of mobile has
reached 100 percent in many
developed countries. That means
customer satisfaction is crucial for
operators.
Nowaf Al Mutiri, Vice President
of IT Planning & Support at
Mobily, says, “Big data is not really
[about] how to accumulate and
consolidate your data, [but] rather
… getting a business scale out of it.
For the last year our focus is how
to enable our structure from the
network side, as well as from the
customer passing systems, how to
really capture this data. The data
is not any more phone calls, SMS,
number of drop-calls – we are
trying to capture the transactional
data. So we mostly focus on the
behavior of the consumer. By this
way we want to serve the right
offers to them. In old marketing
style you just push a mass offer
which is not interesting for
everyone. It is not efficient.
“Another challenge after
consolidating this data is storage.
Because as you know we used
to store certain things about
customers, now we are storing
everything. So you need to go to a
technology provider and find the
efficient way to compress this data
and to have some kind of cheap
storage for this huge amount of
data.
“Another dimension comes
from social media like Facebook,
Tweets, etc. Our customer is
using social media. We made a
project in this area, we integrate
the customer with his or her social
media account. By this way, for
example, if a complaint is raised
on Twitter, we capture it in real-
time, we record it on his or her
record. So if the customer calls
our call center, he [or] she can get
better service.”
According to
research firm
Gartner, between
2011 and 2015,
the traditional
telecom services
market will
increase from
US$338 billion to
US$346 billion.
In the same time
period, the IT
and public cloud
services market
will increase from
US$894 billion to
US$1.139 trillion.

3. “Telcos need re-engineering,
flexibility and software”
HP’s Marie Paule Odini, Chief
Technologist, Communications
and Media Solutions, says,
“The change in the telco sector
will have to be supported by
infrastructure. Telcos need
reengineering, flexibility and
software. HP’s offering in this
area of virtualization is called
Network Functions Virtualization
(NFV) and Software-Defined
Networking (SDN). NFV-SDN is
core network function.”
Said conference attendee
Gürhan Keskin, Director of
Business and Technical Solutions
Management at Turkcell, the
largest operator in Turkey,
“I think some infrastructure
solutions introduced by HP in
the conference can help us to be
more efficient. Big data solutions
are also important for us. For
operators, data is coming from
both CDR (call detail report) and
network traffic. Gathering and
storing this data is a problem. It
is important to analyze the data
and to benefit from it. Because of
this, in the near future this kind of
solution will be used by operators
more and more.”
Osman Perksoy, Vice President
of Product Management and
Marketing of Telenity, says
“We are especially interested
in cloud and virtualization
solutions. We have transported
our infrastructure into virtual
machines with HP before. But
SDN is not a familiar term with
us.”
New concept: M2M
M2M was one of the most
remarkable topics in the
conference. It will also be one
of the most important trends
for telecom companies in near
future. We have already called
this situation the “Internet of
Things”. It is expected that there
will be 50 billion connected
devices by 2015. The biggest
supporter of this increase is wide
usage of LTE and broadband
internet. By the end of 2013,
there will be 195 companies
providing LTE connection in
72 countries. An inevitable
consequence for telco companies
is being faced with a traffic
explosion due to video, VoLTE
(voice over LTE) and OTT (over-
the-top) content.
According to research from
Gartner, by 2015, 50 percent of
the top 100 CSPs will support
cloud infrastructure brokerage
services, while virtually all will
broker cloud application services.
Additionally, Swisscom predicts
that more SIM cards will be used
for M2M applications than for
mobile handsets in 2020.
Stephane Paccaud, M2M and
SmartGrid Global Solution and
Business Development Manager
for HP, says “M2M is going to be
delivered in the cloud, especially
by service providers. In M2M,
you have a strong leg to manage
the networks and devices. This is
your core competency. Nobody
else can do that.”
Telenity’s Perksoy says, “[The]
M2M concept has a large scale.
There are devices, connection
between the devices, SIM card
management and connectivity
management in this concept.
We are especially interested in
connectivity management. In
the near future, you will be able
to switch off and on the M2M
technology like a modem.”
Mobily’s Altaf concludes, “On
the B2B side we have a lot of
new things about M2M that we
are working on. We are looking
for various alliances to serve
different types of solutions to
different types of industries like
transportation and utility. We will
be looking at Internet of Things
and how we can use that in order
to connect everything, we are
looking at smart homes concept
and smart cities concept.”
The hottest topic among
attendees was big data.