Tellabs Blog

One strategy is to operate what STL Research dubs a “Happy Pipe,” a highly-efficient network capable of routing the bits and bytes at low cost. Even if you are only delivering a utility such as gas, you need to know who you are delivering it to and how users are using it.

The second strategy is to provide a “Full Service Telco 2.0” offering. STL Research defines this as a service that goes beyond just delivering the bits and bytes efficiently. Full Service Telco 2.0 enables operators to provide value-added services such as location-based or presence-related offerings, personal services (like games) and cloud-based CRM for enterprises, to name but a few.

But how ready are operators? In Asia-Pacific, the market maturity is uneven. Some operators are far ahead in the curve. Others still struggle with the double whammy of explosive data growth and shrinking revenues.

Yet, in this emerging new scenario, there are opportunities that Asia-Pacific operators should not hesitate to tap into. Let’s consider three operators in the region that have made things work better with either a Full Service Telco 2.0 platform or a Happy Pipe.

Asia’s case for smart pipes: NTT
Japan’s NTT, for example, has retained a strong market share (49% of mobile, 77% of fixed), despite being in a mature market with growing competition.

What’s interesting about NTT’s case is its Service Creation Business Group. This business unit helps upstream customers deploy applications quickly based on NTT’s network resources. This enables the operator to deliver services on a classic Full Service Telco 2.0 platform, which generates profits from both wholesale and retail customers.

How does NTT do this? With fine-grained quality of service (QoS) classes, NTT even targets customers according to where they live.

Because its network can differentiate by and cater to different applications and customers, NTT can offer voice as an application. It can even do so while also delivering other improved content to users. This strategy ensures that critical services like voice and VPN get through during an earthquake, for example.

NTT could yet deliver successful branded services in future, if the operator pushes ahead with its own versions of OTT services.

Smart networks for smart services: Globe Telecom
NTT is not alone in delivering Full Service Telco 2.0 services. Globe Telecom, from the Philippines, is a vastly different example of how to use smart networks to customize—to the extreme—the services that your customers receive.

In a messaging-mad country, Globe offers a plethora of services. These include mobile banking services where customers can use an SMS-based platform to transfer money. Users can do so without owning a bank account and at charges lower than regular remittances.

Globe segments its customers meticulously, offering a good number of value-added services that cater to both prepaid and post-paid users with differentiated pricing. Here, video streaming is not so much of a problem, as it is for NTT. The Filipino operator relies on real-time network analytics on customer behavior to manage its information systems as well as marketing more effectively.

Smarter pipes bring more efficiency, lower cost: Vodafone APAC
Finally, let’s consider a third, different case: Vodafone APAC’s Happy Pipe strategy. Here, extreme efficiency and low cost are vital.

Vodafone achieves this, in part, by consolidating operations. Vodafone streamlines support services, shares infrastructure and deploys innovative network devices across a diverse region, which includes a footprint in the Indian Ocean (India) as well as the Pacific (Australia).

For example, Vodafone-Essar in India makes extensive use of 100,000 shared towers as well as low-cost base stations. Also important: the costs of backhaul and power are optimized so that they do not subtract from a margin that is already razor thin.

The smart network here is not centralized. Instead, it uses a large numbers of low-cost small cells and taps into emerging self-organizing network standards to cut back on system management costs.

With these efficiencies, Vodafone-Essar keeps costs low in a market where ARPU will slide from US$8 a month in 2008 to under US$4 in 2012, and where customer segmentation is very limited.

Looking ahead: network intelligence is a must
While the debate over dumb or smart pipes has been ongoing for a few years now, it’s good to see several Asia-Pacific operators take the lead in rolling out Telco 2.0 strategies. In an increasingly competitive and saturated marketplace, intelligence in the network is a must no matter the market situation in a diverse Asia-Pacific region.

What can you do at your operator? The STL report has a good number of suggestions to begin with.