SAP_MobileGuide 2013

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

Mobile Operator Guide 2013
The Evolution of Mobile Services: Challenges, Strategies, Opportunities
Published by Sybase, an SAP Company
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Library of Congress Cataloging-in-Publication Data
SAP Mobile Services
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
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3Mobile Operator Guide 2013 The Evolution of Mobile Services: Challenges, Strategies, Opportunities
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.
Table of Contents

4
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.
ByMitulRuparelia,DirectorofSalesEngineering(EMEAandLATAM),SAPMobileServices
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

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.
ByElenaSacco,ChairmanoftheIWGattheGSMAandSeniorInterconnectManager,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

6
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

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 part-
nerships between operators and OTT players. MediaFriends discusses apps and
approaches showing the way.
By Gene Lew, CTO, MediaFriends

8
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,
SAP Mobile Services

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

10
Mapping A New World For
Mobile Operators
FOREWORD
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

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 capa-
bilities such as location information,
billing support and network management.
• Mobile commerce: From researching
products to making purchases, consum-
ers are increasingly reaching for their
mobile devices as an essential shopping
companion. At the other end of the
spectrum, and particularly in the under-
banked 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 inter-
action 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 real-
life, 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

12
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.

PART ONE: INTRODUCTION
A WEALTH OF OPPORTUNITIES

14
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 speak-
ing, a world that hardly compares
to today’s landscape. Amid the
far-reaching changes that have
taken hold since then, the com-
plexity 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 signifi-
cantly, 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
PART ONE: INTRODUCTION: A WEALTH OF OPPORTUNITIES
“ 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.”
Mapping A New World For
Mobile Operators

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, serv-
ices infrastructure, devices and user inter-
faces. 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 adv-
ance 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
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

16
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 under-
lying 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 custo-
dial role in every dimension.
“ The advent of a new world for operators follows
decades of incremental improvements
punctuated by breakthrough technologies.”

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 con-
fronting 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 improv-
ements 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 inter-
operability, 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.

18
In July 2012, just before the
London 2012 Olympics, no one
could have imagined that one of
the first headlines in the main-
stream 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 over-
whelming 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 phe-
nomenon 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
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
PART ONE: INTRODUCTION: A WEALTH OF OPPORTUNITIES
2013 is widely expected to be a blockbuster year
for infrastructure spending, with a large number of
operators aggressively expanding their LTE networks.

August 4
August 3
August 2
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
London Olympics - UK SMS traffic
(Times are local to London - August 1 - August 5)
2:30
3:30
4:30
5:30
6:30
7:30
8:30
9:30
10:30
11:30
12:30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
0:30
1:30
Figure 2: Based on data from SAP.
(Times are local to London - August 6 - 8)
August 6
August 7
August 8
+10%
+18%+ 46% +8%
1:30
2:30
3:30
4:30
5:30
6:30
7:30
8:30
9:30
10:30
11:30
12:30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
0:30

20
spending, with a large number of operators
aggressively expanding their LTE networks.
Tough competition
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
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.
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 provid-
ers are not facing their “Kodak moment”. By
way of background, Kodak filed for bank-
ruptcy protection in 2012 after recognizing
its products were obsolete and the competi-
tion was insurmountable. Similarly, mobile
July 28
July 27
July 29
July 30
July 31
+36%: 21:10:
USA wins gold
in Men’s 4 x 200m
freestyle relay (swimming)
(Times are local to London - July 27 - July 31)
2:30
3:30
4:30
5:30
6:30
7:30
8:30
9:30
10:30
11:30
12:30
13:30
14:30
15:30
16:30
17:30
18:30
19:30
20:30
21:30
22:30
23:30
0:30
1:30

players are now struggling to compete
against more agile and innovative newcomer
companies, as well as OTT providers.
Operator assets
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.
First and foremost, operators — because they
are network operators — control the backbone
of the Digital Economy: connectivity.
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.
UK Olympics - Opening Ceremonies
(UK SMS traffic - 27 July 2012 17:00 - 28 July 2012 03:00)
Normal
Traffic
Opening
Ceremony
Traffic
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
17:30
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
00:20 +25% IOC
President speaks
Pre-ceremony -
up to 56% of normal
21:40 +40% Rowan
Atkinson “Plays” during
Chariots of Fire
21:10 +32%
Ceremony begins
21:40: +40% The Queen parachutes in 22:30-22:40 +137% Parade of Nations begins
23:50 +56% Team GB enters the stadium.

22
Operators also have proven security and data
integrity capabilities that will increasingly
appeal to business customers as adoption of
cloud- based models take off.
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 Com-
munications Service Providers (CSPs) to be
the conduit between these ‘upstream’
partners and their traditional ‘downstream’
customer base, thus increasing their reach,
presence and value-add.
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 imple-
ment the right strategies and — ultimately
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
FOOTNOTES
1. As originally defined by STL Partners

— 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 Mob-
ility. 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 strik-
ing example of how an operator can lever-
age 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 effec-
tively, and they can also use the customer
information to take advantage of opportuni-
ties 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
2013 is widely expected to be a blockbuster year
for infrastructure spending, with a large number of
operators aggressively expanding their LTE networks.

24
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 oppor-
tunities 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 respon-
sible 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 go-
to-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.
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.

PART TWO
STRATEGIES FOR DRIVING REVENUE

26
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.
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
(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.
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 mes-
saging 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.
Long Live sms
By William Dudley, Group Director, Product Management, SAP Mobile Services
PART TWO: STRATEGIES FOR DRIVING REVENUE

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 smart-
phones — chock-full of features, functional-
ity 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 prefer-
ring 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 mile-
stone 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.

28
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 estab-
lished 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 commu-
nicate with anyone who has a mobile phone.
However, alternative messaging apps are
limiting, not liberating. Unlike text messag-
ing, 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.
Figure 1: Based on data from Nielsen.
Average number of messages exchanged per month
By age and gender, Q3, 2011
802604
FemaleMale 13-17 18-24 25-34 35-44 44-54 55-64 65+
3,417
928
1,914
709
434
167 64

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 communica-
tions 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 messag-
ing 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, presence-
enabled messaging component that also
interworks with the existing SMS eco-
system. Indeed, many of the operators
featured throughout this first edition of
the Mobile Operator Guide are betting
on RCS to drive an interoperable, back-
ward 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 signi-
ficant 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.

30
In the meantime, SMS-compatible1
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 custom-
ers, 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 cus-
tomer 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 comprehen-
sive 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 applica-
tion 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
It’s the simplicity, pervasiveness and sheer
dominance of text messaging that has made it
the world’s leading data communication tool.
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.

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 cele-
brated 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 Christ-
mas”. 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
Figure 2: Source: Juniper Research. (1)
Global revenue from A2P SMS split by eight key regions 2016
North America
Western Europe
Latin America
Africa Middle East
Central Eastern
Europe
Rest of Asia
Pacific
Far East
China
Indian Sub Continent
FOOTNOTE:
1. www.juniperresearch.com/reports/Mobile_Messaging_Markets

32
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

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 20th
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 adopt-
ion 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 “gap-
filling” 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.
Moving To The sms
Hubbing Model
By Robert Rose, Senior Director, Global Operator Services, SAP Mobile Services
In developing countries, scarce human and technical
resources within operators across these markets has
accelerated the requirement for hubbing services.

34
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.
Since 2005 the major hub providers have
seen a steady growth in demand for their
services. This has resulted in the develop-
ment 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 per-
message 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
PL account belonging to a mobile
operator can actually become a much
more significant benefit.
Good business sense
Today, economic pressure on most oper-
ators 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.
As a consequence, operators are recogn-
ising that a hub can enable them to out-
source 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 cross-
border 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
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.

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. Impor-
tantly, 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 poten-
tially 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 subscrib-
ers’ 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 con-
sultant to British Telecom’s mobile operations
subsidiary Cellnet. Since 2004 Robert has
guided SAP Mobile Services’s international
development in P2P messaging services.

36
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,LatinAmerica 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.
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.”
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 devel-
oped 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 smart-
phone adoption.
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
Latin America Offers Big
sms Opportunites

Figure 1: Based on data from Infodev. www.infodev.org/en/Document.1178.pdf
Maximising mobile for development
World’s population with mobile cell signal
Over 6 billion
mobile subscriptions
worldwide
75% of the World
now has access to
a mobile phone
Growth of global mobile subscriptions
High-income countries Developing countries
2000
0.7 billion
subscriptions
2010
5.9 billion
subscriptions
23% 77%
29%71%
Send text message Take pictures or video with mobile Use mobile internet
Rise of non-voice mobile usage
% National population
KENYA MEXICO INDIA INDONESIA EGYPT
(ARAB REP)
UKRAINE
31 29
82
61
18
49
26
38
22
72
58
15
72
48
19
10
89
96
Pace of mobile phones spread globally
(billions)
8
6
4
2
0
2003
61%
2010
90%
1876 Alexander Graham Bell holds the first
two-way telephone conversation
The number of mobile subscriptions will soon take over the world’s population
1978 First commerical cellular mobile services established
2002 There are over 1 billion mobile subscriptions, passing fixed-line users
1875 1900 1925 1950 1975 2000 2011 2015
Global
population
Fixed-line
subscriptions
Mobile
subscriptions
1961 85 years later, fixed-line subscriptions
reach 100 million

38
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 comm-
unicate 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 cust-
omers 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

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.”
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.
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.
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.”
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.

40
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.
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.
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 machine-
to-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, soft-
ware applications and organisations, such
as enterprises and governments, establish
a one or two-way communication channel
with people using SMS.
The revenue potential is significant. Accord-
ing 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.

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 con-
sumers have come to accept and appreciate.
These examples show there is a lot of
mileage — and value — left in text messag-
ing. In Latin America, in particular, the
growth of SMS shows no signs of slowing,
a positive trend that benefits mobile opera-
tors that develop the mix of capabilities —
billing, bundles and international coverage
— their customers expect.
Figure 2: Based on data from Portio Research Ltd.
P2P A2P SMS revenue – worldwide
(in USD billions, 2009-2016F)
SMSRevenue(inUSDbillions)
2009 2010 2011F 2012F 2013F 2014F 2015F 2016F
73.4
25.5
30.7
44.2
27.4
52.3
60.4
70.1
75.1
78.5
85.7
94.2
95.593.6
89.5
83.9
A2P SMS
Revenue
P2P SMS
Revenue
Note: The sum of A2P and P2P SMS revenues may not add up to total SMS
revenue because of rounding off errors.

42
By 2015 Latin America is forecast to have
more than 750 million mobile connec-
tions, 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.”
Strong growth drives penetration, usage
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.
www.slideshare.net/CiscoSP360/cisco-visual-networking-index-vni-global-mobile-data-traffic-forecast-20112016

Imagine identifying a cyberthreat
such as a virus, worm or malicious
code on your company’s commun-
ications 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 comp-
etitors and military commun-
ication 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
canthispossiblybeconsideredefficient,effec-
tive 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 net-
works are targeted every day by hackers,
criminals and nation-state actors for cyber
exploitation and theft. The scenario I des-
cribed above, as well as the attacks that
confront the private sector daily, are pivotal
reasons why we support the Cyber Informa-
tion 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.
Cybersafety: Everyone’s
Responsibility
By Steve Largent, President CEO, CTIA-The Wireless Association
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.

44
The cybersecurity ecosystem
The CISPA’s sponsors, U.S. House of
Representatives Permanent Select Comm-
ittee 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.
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 appro-
priate 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.
First, is to educate policymakers and con-
sumers 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
up of more than the operators and their
networks. It now encompasses several
other players, including device manufac-
turers, mobile app and content creators,
operating system developers and infra-
structure 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.
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 gov-
ernment agency representatives, researchers
and experts from around the country to help
protect the wireless industry — and our
customers — against cyberthreats.
In particular, this group focuses on sharing:
• Best practices and existing standards
(including technical exchange)
• Known vulnerabilities and
countermeasures

• 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-techni-
cal 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
Figure 1: Based on data from McLaughlin Associates. National Survey of IT Decision Makers, July 27, 2012.
96% Agree that government should allow companies to exchange information
to help identify vulnerabilities and protect users from hacking and cyberfraud
Strongly agree
49.4%
Somewhat agree
46.6%
Strongly disagree
1.8%
Somewhat disagree
2.2%

46
need to take more responsibility for the pro-
tection of this sensitive data. Specifically,
consumers need to actively protect them-
selves 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.
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
How should industry and government proceed on cybersecurity?
Industry should take the
lead in defining standards.
Government should take the
lead in defining standards.
Industry and government should share
information on threats, and work
collaboratively to define standards.
Industry and government should
share information on threats
without defining standards.
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0
14.8%
4.0%
68.0%
13.2%

By enacting CISPA, the private sector will be
able to better leverage its own cyberdefense
efforts in a coordinated way with govern-
ment 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, finan-
cial 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 repre-
sented 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 Subcom-
mittee, 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 stake-
holders — competitors, federal government
agencies, IT directors, academia and experts —
to identify potential issues and create solutions
before, during and after the problem.

48
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 plat-
form-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 engineer-
ing 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 encounter-
ing 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
Does The Future of Mobile
Security Lie in the Past?
By Mary Landesman, Senior Security Researcher, Cloudmark

outpacing traditional computers. In develop-
ing nations users are bypassing traditional
computer adoption altogether and moving
directly into smartphone and tablet adopt-
ion. 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 profit-
eering 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 cost-
effective attack tools. Indeed, the ease with
which mobile devices can be obtained
(either through purchase or theft) signif-
icantly 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. Regard-
less, 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.

50
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 recip-
ient into taking some action that unwitt-
ingly 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.

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.
Also, a ‘free’ offer often requires the partici-
pant 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 unan-
ticipated 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
naturally hamper law enforcement efforts
and make it more difficult to thwart attacks.
Hopefully, we can all learn from past mis-
takes. 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.
Mary Landesman has over 20 years experi-
ence 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.

52
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 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.
The growth of malware
Number of mobile malware
201020092008200720062005
52 119
229
437
853
2,500
Figure 1: Based on data from Bullguard.

Mobile Number Portability:
Increasing Competition And
Driving Value
By Mitul Ruparelia, Director of Sales Engineering, SAP Mobile Services
Mobile operators are understand-
ably 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 Port-
ability (MNP), also known as Wire-
less 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 imple-
mented 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 opera-
tors to innovate and deliver value-added
24 19

54
services to delight and retain their custom-
ers. They have also introduced lower pricing
and exclusive packages with unique hand-
sets in order to meet consumer require-
ments 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 sup-
porting 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 subscrib-
ers 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 mount-
ing pressure from regional bodies and insti-
tutions 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.

limits the number of new customers/non-
subscribers that can be won by mobile
operators in those countries.
MNP clearly benefits subscribers by offer-
ing 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.
Figure 1: Based on data from Wireless Intelligence.
https://wirelessintelligence.com/analysis/2011/04/o2-records-lowest-churn-rates-in-uk/
UK contract churn (%)
by operator 2005-2010 (annual average)
2005
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2006 2007 2008 2009 2010
02 (Teléfonica)
Vodafone
Orange
T-Mobile
(Hutchinson)*
Everything everywhere

56
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 oper-
ators in the Middle East region were proac-
tively 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 sub-
scribers, 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 partner-
ship — to build the capabilities to ensure
the successful delivery of all messaging,
voice and data.
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.

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.

58
Atahighlevel,mostMobileOperators
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 destina-
tion. Of course, operators must also enable
a reply path to guarantee the delivery of the
SMS response.
Second, operators need to have the com-
mercial 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 avail-
able 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.
Intelligent Hubbing:
Easing International sms
Routing Complexity
By Mark Weait, Vice President Sales (EMEA LATAM), SAP Mobile Services
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.

SAP_MobileGuide 2013

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