Mobile Services Handbook

Transcription

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www.capacitymedia.com
Mobile Services Handbook
A guide for buyers of wholesale mobile roaming and interconnect solutions
Published in association with:
Published by:
publishing
EXPAND YOUR MOBILE CAPABILITY.
Hubbing
One connection,
multiple destinations.
MVAS Content
Unique provider for multichannel
premium proposition.
International Roaming
One stop shop solutions
for international roaming.
Connectivity
Global access to any mobile
Operator worldwide.
A WORLD BEYOND
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FORWARD
The challenges ahead
For many years, mobile operators have enjoyed the feeling that they are taking over the world, shifting voice
traffic away from fixed networks, enablers of a highly successful and addictive form of messaging, and
reapers of high margins both on voice services and mobile data services. Today, at least a quarter of the
world’s population wouldn’t leave their homes without their mobile phones.
But success has its downside. It attracts imitators and established mobile operators are facing growing
pressure from new market entrants. At the same time, a new mobile technology, Wimax, is looming on the
horizon. Wimax networks may prove cheaper to roll out than conventional mobile networks, and if this is
the case, more competitors are likely to enter the mobile arena. Established mobile operators are already
being challenged to maintain their margins while new entrants are not finding it as easy to generate
handsome profits from mobile services as they had thought. And the mobile market is converging on a
technology that has already proved a leveller in the fixed world – IP – which is bringing with it as many threats
as opportunities.
One of the ways mobile operators will differentiate themselves in future is by making the mobile handset a
truly ubiquitous device, able to offer customers the same service environment and quality of experience
wherever they are in the world. In order to offer this level of service, however, mobile operators will need to
change the way they work with each other.
Fortunately, the mobile industry has a strong standards-making body in the GSMA, which has been
developing a replacement for old-style bilateral relationships in tune with the needs of the times. Wholesale
carriers, such as TI Sparkle, are investing in implementing state-of-the-art GSMA-based solutions that will
help drive mobile operators’ businesses to new heights. This Mobile Services Handbook aims to help mobile
operators understand the scope of the challenges they face and looks at solutions that address the rise in
demand for mobile data services and innovative uses for mobile messaging services, which operators must
be able to exploit as their voice revenues begin to decline.
We hope you find the Handbook informative as a guide to the important issues facing mobile operators and
helpful as a source of information on potential solutions. ■
Caroline Chappell
Editor
Mobile Providers Handbook
1
Hubbing
One connection,
multiple destinations:
• SMS Hub
• MMS Hub
Quick launch of global SMS/MMS
interworking without the cost
of multiple bilateral agreements.
MVAS Content
Unique provider for multichannel
premium proposition:
• Infotainment
• Mobile Social Networking
• Interactive TV
Connectivity
International Roaming
Global access to any mobile
Operator worldwide:
One stop shop solutions
for international roaming:
• Global signaling
access to more than 700 mobile
operators via direct connections
with 220 Carriers.
• GRX
Immediate data roaming access to
more than 220 mobile operators
on global basis.
• Outbound roaming solution
global roaming services without
extensive bilateral roaming
relationships setup process.
• Roaming traffic redirector
influence the visited network choice of
outbound roaming customers.
• Virtual home environment
replicate the home network service
while roaming (Short Codes
Translator and Smart Call Checker).
A WORLD BEYOND
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CONTENTS
Contents
Page
AT A CROSSROADS
Stefano Mazzitelli, CEO, Telecom Italia Sparkle shares his
views on the next phase of mobile market development
4
BRAVE NEW WORLD
Key challenges facing mobile operators
7
THERE’S THE HUB
Analysing the advantages of moving to a hubbing model for SMS and MMS messaging
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FREEDOM TO ROAM
How to develop the optimum roaming agreements
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GRX AND BEYOND
Customers are demanding further mobile data services – should operators
be looking to IPX as the efficient way to deliver high-value services?
17
READ ALL ABOUT IT
Strategies for smaller operators to keep up with the new
content and applications services offered by the large providers
20
KEEPING IN TOUCH
The latest in SMS and MMS transit services
22
GLOSSARY
An essential guide to some of the many mobile acronyms and terms
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At a crossroads
Mobile operators face all manner of challenges as they move
towards the next phase of mobile market development
Telecom Italia Sparkle is delighted to be sponsoring this Mobile
Services Handbook. We hope it will help mobile operators gain a
deeper understanding of today’s market challenges and of solutions
that will help them to cut costs and increase customer satisfaction
Stefano Mazzitelli
and average revenue per user.
TI Sparkle has long been providing leading-edge services that have won us a customer base of more than
120 mobile operators plus direct roaming relationships with over 475 mobile operators worldwide. We work
closely with the GSMA: for example, TI Sparkle is a GSMA associate member and signalling representative.
World mobile operators are at a crossroads. The majority share of operators’ ARPU is still mainly driven
by traditional non-voice services and specifically by SMS. But mobile technology is moving towards a
“full IP” capability, supporting IMS-based services.
As this happens, the industry is opening its doors
TI Sparkle has long been providing
to entertainment, financial services and many
leading-edge services that have
other industries, enabling companies to develop
won us a customer base of more
innovative applications, products and services for
than 120 mobile operators
mobile users.
EFFECTIVE CHANNELS
The next major challenge for a mobile operator is to put in place an effective sales and marketing channel for
these innovations. We see five key opportunities for wireless operators here. Mobile value-added services,
TI SPARKLE’S SOLUTIONS FOR MOBILE OPERATORS INCLUDE:
Global Signalling: a wholesale signalling service providing a highly reliable and extensive SS7
international network supporting GSM international roaming messages and international SMS transport.
Net2Mobile: TI Sparkle’s GRX solution for GPRS/Edge/UMTS data roaming services, including MMS
transport, Wi-fi and 3G services. TI Sparkle expects to introduce an implementation of IPX, for the
interconnection of mobile and other IP-based services, at guaranteed quality of service levels, in 2008.
SMS transit services: these support the delivery of SMS messages from applications, such as CRM, to
mobile networks worldwide, on behalf of traffic aggregators and large enterprises, including banks,
manufacturers, airlines. TI Sparkle plans to introduce MMS transit services in 2008.
SMS and MMS hubbing: GSMA-compliant hubbing solutions that enable the person-to-person
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WELCOME
such as premium SMS, voting, and general content delivery currently represents an important revenue stream
for mobile operators and TI Sparkle believes they will continue to boost non-voice revenues for the next two
to three years. Mobile broadband will have a large impact on network usage and lead to the uptake of “email
on the move” and WAP browsing services. Mobile payments represent a long term growth driver for the
industry: customers will use their mobile handsets for a variety of payment applications. Mobile TV is an
important industry trend at present, growing at an average annual rate of more than 50%. And traditional
mobile operator services such as voice, SMS and MMS will gain a new lease of life as they migrate over IMS
infrastructures and become embedded in a wide range of applications, including internet applications.
REGIONAL TRENDS
As a global player, TI Sparkle has an excellent
TI Sparkle has an excellent overview
overview of how different regional markets are
of
how different regional markets are
developing and how solutions must be tailored to
developing
and how solutions must
each market. For example, two important regions in
be
tailored to each market
terms of growth opportunities for mobile services are
eastern Europe and the Middle East and Africa.
Eastern Europe is a mature market with mobile penetration rates of 100% in many countries. Operators are
therefore looking for new ways of increasing their revenue. The third-generation mobile (3G) licence auctions
carried out during the early part of 2007 have now been successfully executed and the roll-out of High-Speed
Downlink Packet Access (HSDPA) in eastern European countries, like the Czech Republic, should mean faster
mobile internet speeds. In this region, voice services are still the major revenue contributor, but we see data
services such as SMS, MMS and mobile internet gaining increasing traction. Innovative services such as
mobile payments or location based services (LBS) are still in their infancy, however, and we do not believe
they will have any impact on the market for the next three to five years.
The Middle East and Africa, however, is less homogeneous than eastern Europe. The Gulf countries and
Israel are markets with high mobile penetration rates, access to packet data services and the wealth to
explore advanced services. In less developed markets we see differences in the mobile usage patterns as a
consequence of uneven development between urban and rural areas. In urban areas, where network coverage
international exchange of SMS and MMS. TI Sparkle’s hubbing solution includes anti-fraud capabilities,
opt-in and opt-out destinations and value-added service features such as online traffic reporting tools.
Outbound Roaming Solution: ORS enables operators to deliver all roaming services available on their
home networks to roaming customers across 475 mobile operators worldwide. TI Sparkle’s solution has
value-added capabilities including traffic steering and a virtual home environment service. TI Sparkle
plans to implement a full GSMA-compliant Roaming Hub, of which Outbound Roaming Solution is
the first phase.
Also on TI Sparkle’s roadmap is an outsourcing solution for mobile value-added services which will make
international and local content services available to mobile operators who do not wish to engage directly
with content and application providers themselves.
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WELCOME
is extensive and packet data is available, users can
access limited entertainment and content services.
In remote areas, where fixed-line penetration is low,
customers rely on their mobile phones for
communication. In some instances, this gives the
mobile operator opportunities to deploy more
advanced mobile technologies, such as HSDPA, to
compensate for the lack of fixed lines. In poorer
markets, however, mobile applications are limited to
shared mobile phones for voice, SMS, micro top-ups
and self-care services. In these countries, the basic
voice service is currently the only possible revenue
generating service open to mobile operators.
INCREASED COMPETITION
PRODUCT PORTFOLIO
TI Sparkle has developed a portfolio of
products to meet the needs of the mobile
operator segment.
Our objective is to provide mobile operators
with a “one-stop shop solution” portfolio
comprising:
> voice transit and interconnection
> international signalling
> GRX
> hubbing and interworking services
> enhanced roaming outsourced services
> consultancy-supported know-how
transfer programmes
Mobile operators are increasingly relying on third
parties to expand the services available to their
customers and to cut the costs of service delivery.
However, a further challenge is to make the use of a third party as transparent as possible from the end
customer’s point of view. As a result, mobile operators have to overcome two main technical obstacles. First,
the quality of service (QoS) traditionally provided to
A further challenge is to make the
the end customer should not be compromised by
use of a third party as transparent
their use of a third-party provider. Mobile operators
as possible from the end customer’s
will need to rely on partners that can offer strong QoS
point of view
commitments via tight SLAs, which should include
service credits and penalties in case of contract
breach. The GSMA is working to define standards in this area with the direct involvement of mobile
operators and third-party service providers such as TI Sparkle. We are actively contributing to the
standardisation process.
Second, services should migrate towards meshed (or, in other words, hub-based) solutions to ensure that
mobile customers can access them on a universal basis. Partners that can guarantee a fully outsourced
approach for high margin services including interworking and roaming can facilitate a mobile operator’s
business and help to reduce its operational costs.
The mobile operator’s partner should have a strong international presence and the relevant expertise
and product set. The ability to differentiate will be critical, providing the right combination of services
and packaging to meet operator needs. The partner will also need to demonstrate a future-proof
capability, while respecting global standards. Finally, the reliability and financial stability of the partner
are particularly important when it is offering a hubbing business model and supporting cascade
payment mechanisms.
We believe we are well placed to meet operators’ current and future needs, whatever the challenges, and
to continue our tradition of being a robust, value-added partner to our mobile operator customers. ■
Stefano Mazzitelli
CEO
TELECOM ITALIA SPARKLE
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ANALYSIS
Brave new world
With the nature of the competition changing, greater expectations from customers and an
increasingly complex market, there are plenty of challenges for mobile operators to consider as
they plan for the future
According to Ovum, by 2010, 50% of the world’s population will have a mobile phone. By 2015, there will
be almost four billion mobile devices out of a world population of seven billion. And with three billion
people lacking a mobile phone, mainly in China, India and Africa, there will be room for market growth
in these developing markets for many years to come. Meanwhile, the GSMA reports that the number of
mobile users with access to broadband services is increasing rapidly round the world as operators upgrade
their 3G networks with HSPA technology. Rising numbers of HSPA-enabled handsets are also encouraging
mobile broadband growth, with more than 120 handset models available in October 2007, a figure expected
to soar over the next year. HSPA networks enable users to upload and download multimedia content at
speeds comparable with many fixed broadband services.
NEW COMPETITION
VOICE MINUTES BY REGION
Although these figures should be good
news for mobile operators, there are a
Billion
18,000
number of clouds on their horizon. The high
16,000
margins enjoyed by the mobile industry for
Middle East & Asia
14,000
so many years is now attracting an
Asia Pacific
12,000
China-India
unprecedented amount of competition
10,000
Eastern Europe
8,000
from many different sources. Late 2G and
Western Europe
6,000
3G market entrants, new mobile virtual netLatin America
4,000
work operators (MVNOs) and an emerging
North America
2,000
community of Wimax operators all want to
0
2015
1900
1995
2000
2005
2010
take market share from existing mobile
Source: Ovum
operators. And the investments these
operators have made in next-generation
networks, enabling them to run IP-based applications in competition with fixed operators, are coming back
to bite them. Mobile operators have opened the door to “over-the-top” Web 2.0 services that run on
their expensively acquired 3G networks, providing cheap, or even, free alternatives to mobile operators’
bread-and-butter voice services, as well as rivals to their next-generation, portal-based services. While Ovum
points out that mobile voice will take a rising share of global voice revenues to 2015, the move to voice over
IP across fixed and mobile networks over the same period will “suck value out of the voice market,” Ovum
says (Voice: A Vision of the Future, Ovum 2007). Ovum expects all voice revenues to grow worldwide by just
1% a year over the next 10 years, despite a doubling in the number of voice minutes.
PRESSURE FROM REGULATORS
In addition, mobile operators need to prepare for the new and more active regulatory focus of both
international and national regulatory bodies on their activities, and specifically their interest in reducing
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consumer prices for international roaming and service interworking. All these threats are jeopardising the
current dominant positions of many mobile players and will increase pressure on prices and margins.
As a result, mobile operators large and small, established and new, are having to find smarter, less costly
ways of doing business. There are a number of cost-optimisation programmes underway, at both an
individual operator and GSMA level. These programmes are typically focussing on the outsourcing of core
and non-core activities as a key means of reducing the cost of managing existing infrastructure and
services. A spectrum of outsourcing solutions are beginning to be adopted by mobile operators, from the
outsourcing of part of their assets, such as contact centres, or tower sites, to the full outsourcing of their
entire network infrastructure and third-party management of selected services.
One of the most promising developments for cost reduction is the hubbing model, which is being
standardised by the GSMA and sponsored by member operators like Vodafone. Service hubs – for roaming,
SMS and MMS, and IP-based services – will replace the existing bilateral relationships between mobile
operators for individual services over the next five years or so. Bilateral relationships take years and
significant resources to set up: established mobile operators have spent 15 years putting in place 400 to
500 roaming agreements, a timescale that is not available to new market entrants. At the same time, such
mobile operators have large departments dedicated to the management of bilateral agreements, sending out
450 invoices, for example, and nurturing 450 relationships, some of which may be much higher value than
others. Many of these resources could be more effectively deployed elsewhere in the business.
HUBBING – THE WAY FORWARD
If all 700 or so GSMA members had relationships with every other member, the industry would be
managing and supporting around 250,000 individual agreements. Today, only 20,000 such bilateral
agreements exist, suggesting that there are significant gaps in interworking between mobile operators round
the world and that these are holding back potential revenues from roaming and international
SMS and MMS exchange. With a hubbing model, a mobile operator only has to manage one bilateral
relationship, with the hub provider, and yet it can automatically interconnect and exchange traffic with all the
other members of the hubbing ecosystem. The cost-saving and revenue-generating implications of the
hubbing model are enormous.
Smaller operators and new market entrants that lack the resources of large, established operators also
benefit from the hubbing model: they instantly gain access to a broad community of operators without
the pain and cost of setting up bilateral relationships. The GSMA has already standardised hubs for MMS
and SMS interworking, while standards for roaming and an IP services interconnect platform
will be finalised by the end of 2007.
MOBILE PENETRATION
International wholesale carriers that have
strong relationships with the mobile
120%
community are the natural providers of
100%
GSMA service hubs and are working
Western Europe
80%
Eastern Europe
to implement GSMA-compliant hubbing
North America
platforms that can interconnect the traffic
Latin America
60%
Asia-Pacific
of many hundreds of mobile operators.
Middle East and Africa
40%
China-India
While the all-IP mobile network of the
20%
future has its challenges, it opens up
0%
immense opportunities, too. While VoIP
1995
2000
2005
2010
2015
providers, such as Skype, are a potential
Source: Ovum
threat to a mobile operator’s voice revenues,
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ANALYSIS
the level of such VoIP traffic over 3G netVOICE REVENUE
works is very low at the moment, according
to Svetlana Grant, research manager, CMT,
$ billion
Pyramid Research. When mobile operators
1,200
are able to offer their own VoIP services, they
+1% pa
1,000
+3% pa
will significantly reduce their interconnect
800
costs with IP backbone networks and their
Mobile (all spend, excl data)
+12% pa
VoIP services will have quality of service on
600
Broadband VoIP (excl BB rental)
PSTN voice (incl rental)
their side compared to internet-based
400
services. International carrier partners can
200
help negotiate low termination costs to keep
0
1990 1995 2000 2005 2010 2015
mobile operators’ cost structures lean. But
the biggest advantage for mobile operators
Source: Ovum
moving to VoIP is that voice becomes an IP
application, able to become an integrated part of many other IP applications, from interactive gaming to mobile
TV, from mobile e-commerce to push-to-talk on a web site. This is expected to increase mobile VoIP traffic and
voice-related revenue.
CONTENT AND APPLICATIONS
At the same time, content and application services are becoming an increasingly important part of a mobile
operator’s revenue mix and IP services offer significant opportunities for reducing the mobile operator’s
time to market for new services and enhancing its ability to differentiate its service portfolio. Grant points
out that mobile operators are waking up to the revenue-generating potential of popular off-portal IP services,
for example, and particularly those associated with social networking. Such services often enable the
operator to experiment with interesting and innovative business models. Vodafone launched an off-portal
service in the summer of 2007 which it has priced in a non-traditional way. Grant says that the market
for off-portal mobile services has yet to be quantified, but there is no doubt that it will prove attractive to mobile
users and open up a huge choice of services that were not available to them through mobile operators’ “walled
garden” portals.
However, Grant suggests: “In an off-portal scenario, mobile operators are looking at doing business with
potentially thousands of small applications providers and where large content providers are concerned, Tier
3 and Tier 4 mobile operators may find that they don’t have as much leverage in negotiations as Tier 1 and
Tier 2 operators, or they will be last in the queue to talk to these content providers.” Operator scale is
also important where advertisers are concerned: since operators won’t be retaining as much revenue from
off-portal applications as they could from portal applications, they are looking for other sources of revenue,
such as advertising, to fund content. However, for mobile advertising to be an attractive proposition,
operators will need to offer a large customer base.
ENTER THE AGGREGATORS
For all these reasons, smaller mobile operators are now looking for content and application aggregators who
can share the risk involved in acquiring and or developing new services and applications. With many smaller
mobile operators connected to them, such aggregators can offer large, consolidated customer bases to
tempt content providers and advertisers. However, such aggregators will need sufficient resources to
maintain and manage thousands of third-party content and application provider relationships as well as the
ability to acquire and customise content that is of interest to mobile operators on a regional and local basis.
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ANALYSIS
They should be able to provide smaller
operators with differentiated content and
$ billion
they may offer innovative services to the
1,600
+3% pa
operators’ customers, such as the ability to
1,400
bridge between instant messaging systems
+6% pa
1,200
and location-sensitive connection to the
1,000
internet.
800
Total mobile revenues
+13% pa
In the increasingly competitive world in
600
Total broadband revenues
which
mobile operators are finding themPSTN voice
400
selves, two qualities will keep them ahead:
200
their connectivity to the universe of other
0
1990 1995 2000 2005 2010 2015
operators, enabling their customers to
Source: Ovum
maintain their home network-level of
service experience wherever they are in the world; and the ability to delight customers with compelling,
voice-enabled content and applications at the right price. Very few operators will have both without a third
party with the services and international reach to help them. ■
ALL PSTN, MOBILE AND BROADBAND REVENUES
IS THERE A KILLER APPLICATION FOR MOBILE OPERATORS?
TI Sparkle research into mobile end-customer behaviour has highlighted the following trends
in application usage:
1. SMS and ringtone downloads continue to dominate consumer mobile data use and contribute
the largest share to carriers’ mobile data revenue
2. MMS has shown interesting, but low-level growth, although it is still among the top three mobile
data applications
3. Mobile TV has been much hyped and is currently listed among the three services of least
interest to consumers across regions. TI Sparkle expects that this service will start to boost
revenues in the medium term.
4. There are wide regional differences in consumer interest and service maturity for mobile email,
mobile banking and payment, and location-based services (LBS).
In the light of these findings, no killer application can realistically be expected in the next two
to three years. To improve service demand, mobile operators will therefore need to carry out
a number of actions, including:
1. Ensuring ease-of-use and service global reach regardless of the model of handset through
co-operation with device manufacturers, middleware vendors and application providers
2. Providing access to popular internet services and social networking sites to draw on the
service resources of the extensive internet community and its content inventory
3. Simplifying data pricing to encourage adoption of new applications. A mobile operator may
need to experiment with different business models, such as flat fees, or advertising-based
revenue models. Key to the generation of new revenues, however, will be compelling content
and services
4. Localising services according to consumer preferences based on local service maturity.
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HUBBING
There’s the hub
With the management of bilateral relationships becoming unsustainable, moving to a hubbing
model for SMS and MMS messages can deliver many advantages for mobile operators
Mobile customers have the same expectations of being able to send SMS messages to anyone
anywhere in the world, even when they are roaming, as they do of being able to terminate voice calls.
With voice calls, customers immediately know whether a connection is successful, but customers sending
text messages internationally don’t have the same instant feedback. Many GSM users hesitate to send
SMS messages because of this. This uncertainty is holding back the market for international SMS and
will prove a greater barrier for international MMS messages over 2.5G and 3G networks. Of 2.6 billion
SMS messages sent monthly in Italy, for example, only 1.5% are sent internationally, so there is plenty of
room for growth.
To meet customer demand and to ensure that SMS and MMS have an equivalent global service
coverage to mobile voice, operators should theoretically have SMS and MMS service connections with
every other mobile operator on the planet. With about 700 mobile operators in existence, one mobile
operator would be expected to manage hundreds of bilateral relationships, a resource-intensive and
costly task.
An individual operator connects
On this basis, new entrants to the mobile market
once
to the service hub and can
will be at a clear disadvantage to Tier 1 and Tier 2
automatically
exchange SMS or
mobile operators that have spent years establishing
MMS
messages
with all the other
roaming and interworking agreements with 400 to
operators
linked
to that hub
500 counterparts. However, even large mobile operators with SMS interworking agreements in place
find the management of bilateral relationships is expensive – and they will have to set up new relationships
again with the same operators for MMS.
Clearly, as the number of mobile players grows and the numbers and types of mobile services proliferate,
the bilateral relationship model is becoming unsustainable. It simply takes too long to set up bilateral
agreements with every new player that appears and without extensive peering relationships, new operators’
offerings will not be sufficiently attractive to customers. The GSMA has long recognised the
shortcomings of the bilateral model and has been defining standards for a hubbing model to replace it,
through its Open Connectivity initiative. The idea of a hubbing model is that an individual mobile operator
connects once to the service hub, for example, an SMS hub or an MMS hub, and the operator can then
automatically exchange SMS or MMS messages with all the other mobile operators linked into that hub. In
other words, if 500 mobile operators are connected to an SMS hub, the 501st operator to join can instantly
interwork with all 500 of them, and they can exchange SMS messages with it.
The hubbing model significantly reduces testing overheads for mobile operators, since they test and
configure their interconnection to the hub once, rather than having to test again and again on a bilateral basis.
The hub provider is then responsible for testing onward connections on behalf of the mobile operator. Mobile
operators connected to hubs can reduce internal testing resources, freeing staff to work on higher
value-added activities. Connections between the mobile operator and hub should be fully redundant, as
should the hubbing platform itself, ensuring the high reliability and availability of all parties.
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ADVANTAGES OF HUBBING
There are many advantages to a hubbing model:
> Mobile operators only need one contractual relationship – with the hubbing provider – and the provider
handles all the commercial and technical aspects of the mobile operator’s onward connections to
other operators, either directly or via peering agreements with other hub providers.
> The hubbing provider carries out billing, settlement and dispute resolution activities, for example,
as well as routing SMS or MMS traffic appropriately for termination, either to mobile operators
connected to its hub, or to another hub provider.
> The hub provider will manage this traffic according to agreed SLAs shared by all operators
connected to the hub.
> The hub provider will ensure that its quality of service KPIs are aligned with those of other hub
providers, so the whole hubbing ecosystem uses the same KPIs and routing policies. A system
of credits and penalties guarantees that hubbing SLAs are met.
> The hubbing model is highly transparent. Not only does the hub provider publish termination fees
for all the mobile destinations that can be reached from its hub, it also gives participating mobile
operators real-time, web portal access to key management information, including usage, routing
and performance data. Mobile operators are informed in real time, for example, that their traffic
has been delivered successfully. Such information is often difficult for operators to aggregate across the
many IT systems supporting multiple bilateral relationships and it is usually not available in real time.
The hubbing model gives mobile operators the ability to manage the interworking aspects of their
services much more effectively than they have been able to in the past.
> The hub provider can offer a number of other value-added functions that protect mobile operators and
their customers when using SMS or MMS. The hub can act as an anti-fraud platform, with the hubbing
provider checking individual messages to prevent spoofing, spamming and phishing. It may support
opt-in and opt-out destinations and Black and White listing by operator, SMSC or MSISDN, for example.
COST-EFFECTIVE
The GSMA started testing the hubbing concept with MMS in 2005. It picked MMS first because the
service only generated a small amount of international traffic at the time, making it a low-risk testbed for
the hubbing model. Through the Open Connectivity initiative, approximately 175 mobile operators have
since joined the MMS hubbing ecosystem and the resulting effect on international MMS traffic has been
remarkable. On average, operators experience an 80% monthly growth in such traffic. In Italy, for example,
Telecom Italia Mobile has seen the number of international MMS messages sent between August 2006
and September 2007 rise 100 fold. Given the success of the hubbing concept for MMS, the GSMA is
replicating it for SMS and it will have SMS hubbing standards fully defined by the end of 2007.
There are SMS hubs already in existence that do not support GSMA standards since these are not yet
available. However, mobile operators are advised to check that their SMS hubbing providers will comply with
GSMA standards as soon as possible, or they risk facing interconnectivity problems in the future. While
joining an SMS or MMS hub is far more cost-effective than building and maintaining multiple bilateral
relationships, it is nevertheless a commercial and technical commitment for the mobile operator and it
could prove difficult to switch hub providers if there are problems. A hub provider that is actively engaged in
implementing GSMA standards will be a safer bet for the long term.
Operators are likely to have different motivations for joining an SMS or MMS hub. MMS is still a relatively
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HUBBING
HUBBING – SERVICE CONCEPT
The new
Idea
Mainassumption
Assumption
Main
The mobile market willingness to move from bilateral to hubbing paradigm!
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
Hub A
MNO
Hub B
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
MNO
BilateralRelationship
Relationship
Bilateral
Bilateral relationships are:
Costly and ineffective
High workload / resources intensive
Slow time2market
SingleHub
HubConnection
Connection
Single
Carrier multilateral platforms are:
Quick and reduce time to market
Speeding up interoperability
Enablers for global coverage
Source:Telecom Italia Sparkle
new service and demand for international MMS interworking, though rising, is low compared to SMS. Mobile
operators have witnessed the beneficial effect the hubbing model has had on MMS traffic and the cost
benefits to themselves of connecting once to the hub and thereafter being able to interwork with a large
universe of other operators. This has enabled them to support MMS interconnection on a global basis far
more quickly than if they had gone down the traditional route of setting up and testing bilateral relationships.
All types of operators are now taking up the MMS hubbing model and in the future, there are likely to be few,
if any bilateral agreements for MMS.
EARLY ADOPTERS
SMS hubbing is breaking into a market where bilateral agreements already exist between operators and
in many cases, these will not be replaced. Instead, established mobile operators will selectively migrate
low-value bilateral relationships to the SMS hub to reduce management costs, at the same time using the
hub to add new routes, especially to countries, such as China, where it has traditionally been difficult to
set up such relationships. The SMS hub will also bridge between mobile network technologies, enabling
operators in TDMA/CDMA markets, such as the USA, south America and parts of Asia, to interwork with GSM
markets in Europe, for example. Competitive pressures are mounting up on mobile operators and as
their margins are squeezed, they are looking for ways of cutting cost. Leading operators, including Vodafone
and Orascom, are early adopters of the hubbing model, expecting to achieve operational cost reductions
of around 20%. Meanwhile, new market entrants will join hubs straight away to gain instant service
connectivity, levelling the playing field between them and their larger rivals.
A mobile operator needs to select the hub provider with care. Compliance with GSMA standards is
important, but the depth of the provider’s connectivity will also be key. The provider should be both
transparent and competitive on price. Other factors to look for are the robustness of its platform and its
processes, both commercial and technical, its security features and real-time reporting capabilities. SMS and
MMS hubs should provide mobile operators with the assurance of international message delivery with which
they can delight their customers, stimulating the further growth of this important market. ■
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Freedom to roam
In today’s global village, users expect to be able to communicate in the same way wherever they
are, making the right roaming agreements and services essential for mobile operators
The world is getting smaller. More people are travelling to more places than ever before, usually
accompanied by their mobile phones. Market research company Visiongain, forecasts a 150% cumulative
growth in roamer numbers worldwide between 2006 and 2011, estimating that there will be one billion roamers
in 2011. All these subscribers will expect their ability to communicate to be as mobile as they are. By denying
them this capability, operators risk substantial loss of revenues and even subscriber churn.
A new entrant into the mobile market, which wants to bundle roaming into its voice offer, is faced
with a dilemma. Which of the more than 700 GSM mobile operators does it start to negotiate bilateral
roaming agreements with? Just setting up such agreements with 100 operators can take years to
complete. Commercial agreements with other operators may be relatively straightforward but network
interoperability will need extensive testing, requiring resources and investment. And the new entrant will need
to spend the same amount of time and effort on
As mobile operators diversify, the need
every single operator with a network over which
to update agreements and to test again
it wants its subscribers to be able to roam.
and again to cover each new service
Meanwhile, delays in setting up such relationships
looks increasingly untenable
will cost the operator customers, customer revenue
and competitive advantage.
The roaming problem is compounded by the fact that subscribers don’t just want to be able to make voice
calls that originate in a visited network. They want to use all the normal capabilities of their handsets: to send
SMS or even MMS, to browse over WAP or web pages to upload and download content and applications.
This makes the agreements that mobile operators need to set up with each other still more complex and
time-consuming. As mobile operators continue to diversify the services they offer to their customer bases, the
need to update agreements and to test again and again to cover each new service looks increasingly untenable.
The bilateral relationship model is challenging if a Tier 3 or Tier 4 operator wants to extend its roaming
coverage. The alternative, an enabling/hubbing model for roaming, makes sense, since operators can
connect to the hub once and immediately send roaming traffic to, or receive it from, hundreds of roaming
partners. Using the hub, a mobile operator can provide roaming coverage even on the networks very few of
GSMA ROAMING HUB
Origins
One of the outputs of the Open Connectivity Initiative, started by the GSMA in 2005. Focussed on
improving the efficiency of establishing and maintaining roaming agreements and the creation of longer
term solutions to enable the quick and easy establishments of new agreements.
Objectives
To provide all GSM subscribers with access to global GSM roaming by ensuring that any operator is able
to allow its customers to roam on the network of any other GSMA member.
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ROAMING
its customers use, but which nevertheless is highly valuable to those few. The mobile operator may not have
been able to cost-justify a bilateral agreement with the owners of those networks but it can make a
business case for connecting to them through the hub. As a result, it retains customers that may
otherwise have churned to a larger operator with a wider range of roaming partners.
ROAMING HUB
The GSMA has been defining a Roaming Hub as part of its Open Connectivity Initiative, setting the
guidelines that need to underpin this new model. The Roaming Hub will support multiple access
technologies, not only enabling voice and SMS roaming over GSM networks, but interconnecting GPRS and
3G-based roaming partners, too. Operators can sign a single agreement with the Roaming Hub and gain
access to partners in all three network categories. One agreement with TI Sparkle, for example, will provide
instant access to 475 GSM/3G roaming partners in 200 countries, including 240 GPRS partners in over
120 countries and more than 50 3G partners in over 30 countries. Because smaller operators only have to
negotiate and manage a single agreement, they significantly shorten the amount of time needed to provide
extensive roaming coverage across multiple networks round the world and they need make only a small
investment to gain access to a large number of roaming partners.
Roaming Hub providers will offer the full capabilities of the platform in a number of phases, starting with the
ability to support outbound roaming services. Mobile operators that allow visiting subscribers to make outbound
calls across their networks can use facilities built into the hub to check details of each customer on the home
network, such as whether they have sufficient funds in their account to make the call. They can also take
advantage of the value-added services the roaming hub has to offer: for example, traffic steering.
A traffic steering service allows the home network operator to fine-tune, in real time, the choice of
roaming partner made available to roaming subscribers. A Telecom Argentina end user roaming in France may
have three roaming networks he could possibly use: his home operator can decide which one to direct him
to in order to leverage its existing relationship and business arrangements with a particular candidate among
the three network operators. Telecom Argentina may be able to collect roaming discounts as a result of an
KEY REQUIREMENTS
A GSMA Roaming Hub compliant provider must meet the following requirements:
> Roaming transparency to home network through the reporting of charging principle and
IOT/service fee and destination of outbound roamers, and the provision of content manipulation
if required
> Roaming transparency to visited network through the reporting of technical information required
for troubleshooting, and maintained visibility of the networks to which inbound roamers belong
> Ability to maintain quality of service SLAs, including across any intermediaries (third party hub
providers) used, and the ability to provide roamers with quick and accurate network selection,
taking into account operator preferences
> Minimal testing time for client operator to ensure service interoperability and correct billing exchange
> Provision of anti-fraud and security tools
> Ability to provide a one-stop-shop service, with a single contract that gives access to multiple
roaming partners, a single configuration with the roaming hub provider and minimal change
thereafter, one financial relationship with the hub provider, performance testing compliant with
GSMA standards and full support and training
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existing bilateral relationship with one of the French mobile operators, for example, and so it makes
good business sense to redirect its roamers to that network. The traffic steering service enables operators to
maximise outbound usage of a particular network, for example, a GPRS network or of a particular service,
such as MMS, and to minimise outbound roaming costs.
VIRTUAL HOME ENVIRONMENT
A virtual home environment service allows the outbound roaming subscriber to access the visiting
operator’s value-added services, such as directory inquiries, using a familiar set of shortcodes. In other
words, the subscriber bypasses the shortcodes used in the visited network. The roaming hub carries out the
mapping of home to visited shortcodes so that the visited network doesn’t have to carry out this work itself.
It would be cumbersome for each operator to store and map all the shortcodes of all its roaming
partners and it is far more cost-effective for the roaming hub to implement this once on behalf of all
the hub’s participants. A virtual home environment service increases the completion rates of dialled calls
while roaming, as does another hub service, which automatically corrects outbound dialling mistakes.
This service can add in international dialling prefixes, for example, or strip out unnecessary zeros at the
beginning of a dialled number. Mobile operators can choose to opt into these hub-based value-added
services, paying a monthly subscription fee based on the size of their customer base.
ENHANCED SIGNALLING SERVICES
Today, mobile operators are no longer tied into incumbent carriers for the transport of the signalling data
associated with roaming services. Such SS7 signalling data, which needs to flow between home and
visited networks, comprises GSM international roaming messages for location update, authentication and
credit checking, and international SMS transport. Signalling services connect the HLRs and VLRs of home and
visited networks in real time, for example, so that
One agreement with TI Sparkle,
mobile operators can exchange the all-important subfor example, will provide instant
scriber information associated with establishing calls.
access to 475 GSM/3G roaming
Mobile operators are now free to choose the most
partners in 200 countries
competitive and best performing carrier for signalling
data on an international basis, even if that carrier is
not transporting the voice calls themselves. They need to look for a carrier with excellent connectivity, since
the ability to provide direct access to all fixed networks in the world without the need for transit will minimise
latency and ensure an excellent customer experience. Mobile operators will also benefit from the ability of their
signalling service provider to monitor signalling traffic and to report on this information by destination,
performance, including UDTS failure rate percentage per destination, and other metrics. Such transparency of
management information helps mobile operators improve the performance of their networks and interconnects.
A signalling service provider should also be able to handle conversion of signalling traffic formats between
ITU and Ansi standards, should mobile operators need this. Anti-fraud and anti-spam features can protect
signalling traffic, the mobile network, mobile operator revenue and end-customers. Just as in the Roaming
Hub, a traffic steering capability can redirect international roamers to preferred networks that
provide the best delivery of the home network’s set of services and coverage, as well as roaming prices.
Price and the flexibility of the signalling service provider’s pricing model, will also be a consideration. Larger
mobile operators can take advantage of the economies of scale and performance achievable
when they use a single signalling provider across their company groups, but breaking away from a fixed
incumbent and considering an international provider of signalling services can prove cost-effective for
smaller operators, too. ■
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GRX
GRX and beyond
As customers demand further mobile data services, operators are looking to IPX, a private IP network,
as an efficient means of delivering their high-value services
The market for mobile data services is gathering momentum, although we are still some way from the
explosion of mobile data services predicted as IMS and IP-based 3G and 4G mobile networks roll out.
Nevertheless, growing numbers of customers want to access mobile data services wherever they are in the
world, just as easily as they make voice calls. The GPRS Roaming eXchange, or GRX, is the platform that
currently supports roaming for mobile data services across GPRS/Edge/UMTS networks. GRX platforms are
hosted by wholesale carriers, like TI Sparkle, which provide GSMA-compliant transport infrastructure between
originating and terminating mobile networks, and the security, reliability, availability and reporting mechanisms
that assure mobile operators that their data services can be successfully delivered.
GRX is a best-effort delivery platform, so it is important that it is underpinned by a solid, secure and high
performance IP backbone that can guarantee the delivery of mobile data service traffic at the lowest possible
levels of latency. The international reach of the GRX provider’s network will be important to ensure that mobile
operators can offer their customers mobile data roaming facilities across as many partner networks as possible.
GRX operates on a hub-based model: all the mobile operators connected into GRX are automatically connected
with one another, without the need for multiple bilateral agreements. TI Sparkle, for example, connects 220
mobile operators in over 55 countries across its GRX
TI Sparkle, for example, connects 220
platform through direct interconnection and peering
mobile operators in over 55 countries
agreements with other GRX providers.
across
its GRX platform through direct
Mobile operators negotiate their own data service
interconnection and peering
termination fees by bilateral agreement with other
agreements
with other GRX providers.
operators while they outsource all their technical
interworking activities and transport needs to the
GRX provider. GRX providers compete on network performance and price. Mobile operators should look at
the efficiency of the GRX provider’s processes and operations as these will translate into competitive and
sustainable pricing. Mobile operators will want to verify that their SLAs are met, so GRX providers should have
a web-based reporting tool that gives operators visibility of GRX provider performance.
SUSTAINABLE VALUE CHAIN
IPX (IP eXchange) was envisaged as an enhancement to GRX. Three years ago, GSMA members conceived IPX
as an IP interconnect network for mobile operators selling high-value 3G services, such as video sharing, for
which the existing IP-based GRX interconnect network does not provide the appropriate level of service. IPX
should also create a sustainable value chain for mobile operators as they become IP network providers. In the
public internet, the revenue typically sits at the edge with the content providers, while internet providers make
very little money out of delivering IP services. Essentially, the internet is an unmanaged network provided by
multiple players with no assured revenue. If mobile operators were reduced to becoming mere internet providers,
they could find it difficult to recoup their investment in IP-based networks. So the GSMA came up with the idea
for the IPX, a managed network separate from the public internet, provided by multiple players, but with a
revenue model more closely aligned with those underpinning network interconnects in traditional networks.
Mobile operators using IPX will offer more than internet-style data service termination. IPX comes with built-
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in security and a set of quality of service levels: mobile operators will be able to set up service level
agreements for each service they deliver. IPX supports classes of service for a set of defined applications,
including packet voice, messaging, instant messaging, video, SIP/IMS services and IPv6 translation. Mobile
operators will specify to an IPX provider the QoS level at which they would like to deliver each service
internationally. IPX providers will then authenticate and classify services arriving at their gateways and assign
each service, depending on type, to an appropriate managed, virtual pipe with the agreed QoS.
The GSMA has defined service-specific QoS classes broadly enough so that individual mobile operators can
negotiate their own SLAs with IPX partners. In this way, mobile operators and IPX providers can maintain
differentiated service levels end-to-end across the chain. The IPX provider will dedicate IPX pipes to specific
services so that low latency services, such as voice and video, are carried separately from content, IM, email or
GRX services, for example. And because the mobile
As a mobile operator can guarantee the operator will be able to guarantee the service that a
service that a subscriber receives with
subscriber receives with his video shared call or voice
his video shared call or voice service, it
service, it will be able to charge for it. IPX therefore
will be able to charge for it
gives mobile operators a role in the value chain
beyond being “dumb pipe” IP service providers.
CASCADING PAYMENTS
IPX providers will be responsible for transmitting service transit and termination costs – “cascading
payments” in IPX-speak – across the network in a similar way to legacy voice network costs today. IPX’s
commercial arrangements have been set up to recover next-generation complex service costs, such as those
likely to arise in an IMS world, where multiple communications services may participate in the same session.
In this scenario, IPX supports the concept of payment by whoever perceives the value.
Content providers will be able to connect through a single gateway to IPX, specifying which service providers
they want to route content to, rather than supporting many dedicated connections. At the same time, the fact
that so many content providers will connect to IPX will ease the task of negotiating with them for mobile
TI SPARKLE NET2MOBILE SERVICE OVERVIEW
Net2Mobile (GPRS Roaming eXchange – GRX – Service) is the wholesale service that provides
mobile operators with all the transport infrastructure requirements needed for GPRS/Edge/UMTS
international roaming services (including Wifi, GPRS, 3G and specific IMS requirements).
BENEFITS
> Direct and indirect world-wide mobile operators coverage, with immediate access to more than
220 mobile operators in over 55 countries
> Continuous improvement such the recent implementation of the IP Sec Access option
> Strict service level agreement (SLA) and guarantee of service and lead time
> Network scalability
> Network robustness guaranteed at 100%, through a proprietary and dedicated IP network over MPLS
> Savings in time, cost and efforts in establishing multiple interconnections for the roaming data
FUTURE DEVELOPMENT
> End2End SLA
> Increase PoP coverage
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GRX
operators. The IPX content and applications
INTEROPERABILITY TRIALS
marketplace will potentially enable mobile
operators to offer a broader range of services
GSMA trials to test the delivery of IP services end-toto their customers.
end across a multi-operator IPX have proved the
A number of mobile operators are already
interoperability of push-to-talk, online gaming, instant
active participants in GSMA’s interoperability
messaging and IPv4 to IPv6 translation.
trials to test the delivery of IP services end-toTI Sparkle continues to be involved in testing the
end across a multi-operator IPX, with each
performance of voice traffic over IPX.
operator maintaining the agreed SLA for each
service. While only six mobile operators took
part in 2005, the next trial is expected to involve 23 mobile operators. The GSMA trials have proven the
interoperability of push-to-talk, online gaming, instant messaging and IPv4 to IPv6 translation but trials are
ongoing to assess the performance of voice traffic over IPX. TI Sparkle is involved in these ongoing trials,
supporting TIM and Vodafone Italy. Mobile operators need VoIP to work as well as circuit-switched voice if they
are to charge a premium for this service. The first commercial implementations of IPX by current GRX providers
will roll out next year.
THE GOAL OF IPX
The goal of IPX is to connect all types of IP service providers, whether mobile or fixed, established or new
entrant. In the future, customers are going to want their calls originating on a mobile phone to be able to
terminate on a Skype client, for example. Being IP-based, IPX will be able to accommodate operators using
new technologies, such as Wimax, as well as satellite and cable operators. The IPX capability is particularly
valuable for operators with both mobile and fixed arms, which will be able to use a single, converged
interworking capability for all their IP-based traffic.
IPX is far more IMS/SIP-oriented than GRX and it will natively interconnect fixed and mobile IMS networks with
each other. As mobile operators are early adopters of IMS networks, they will be able to reap the benefits of IPX
ahead of their fixed counterparts, though it will be possible to connect a non-IMS network to IPX using a SIPbased proxy being developed by equipment vendors.
Mobile operators will need to consider
Mobile operators will soon be able to select an IPX
the quality of the IPX provider’s
provider as these platforms become available in 2008.
backbone
network, as this will be
They will need to consider the quality of the IPX
critical
to
robust
delivery of services
provider’s backbone IP network, as this will be critical
to robust delivery of services. The reach of the IPX
provider’s network will also be a consideration, as will the number of mobile operators it is currently connected
to. Finally, the IPX provider will need the financial strength and market presence to take responsibility for
cascading payments across the IP value chain.
Such payments are likely to become much more complex in an IMS/IPX world, where IPX providers will be
interconnecting, in effect, IMS SIP sessions. The IPX provider will need excellent visibility of the application
layer in order to route data packets through the correct pipes at the correct QoS. It will also need to be able
to handle many different services with differing QoS requirements. And since IMS supports the concept of
more than one service provider contributing services within the context of a single IMS session, the IPX
provider will need to be able to cope with the billing and revenue-sharing implications of the multi-service,
multi-provider session. Mobile operators will want to work with a partner who is also a thought leader in this
area and which is implementing the right support systems so that mobile operators themselves have flexibility
in service creation and next-generation business models. ■
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Read all about it
Large mobile operators are increasingly turning to content and applications services to boost
margins and give their offerings greater appeal. How can smaller operators keep up?
Voice is not the killer application it once was for mobile operators. In developed markets, many players have
seen their voice revenues remain static or increase by a thin 2% a year. To counteract this scenario, Tier 1 and
Tier 2 mobile operators are moving aggressively to acquire a portfolio of mobile value-added services. These are
on a much more interesting growth trajectory of around 12% a year and can be used to enhance
operators’ voice offers. Such services add value and can be inexpensive to deliver, generating a high margin
for the operator. They can also cater for an individual subscriber’s taste and requirements. This makes such
services highly compelling, encouraging subscribers to use the services more frequently, therefore generating
more traffic for the mobile operator, and reducing subscriber churn. The ability to provide differentiated
value-added services is a key competitive advantage for any mobile operator today.
Mobile operators will need to be able to offer two types of mobile services: content services and
application services. Content services are popular with young customers in mobile markets across
the world and include ringtone downloads, Java games, wallpaper selection, and information and
entertainment services, such as sports news alerts or fan club news. Content services can often have very
short shelf lives, since they typically reflect the latest fashions in the market, from pop music releases to the
latest world events. Mobile operators will need to have the latest services registered on their customer
portals, continually refreshing their selection in response to market trends.
Application services are much broader in scope. They include televoting, buddy list services and data
services. Mobile applications are often developed with other media services, such as television shows: the
television programme Big Brother generates substantial revenues for the mobile operators that carry its
subscriber voting traffic. There is also a large opportunity for mobile operators to cash in on the social
networking trend with applications that support messaging to buddy lists.
NEW BUSINESS MODELS
Mobile value-added services are becoming more sophisticated. Increasingly, mobile operators can take
advantage of capabilities in their networks, such as location and presence, to ensure that appropriate
content or application services are delivered to subscribers. And mobile services are enabling new
business models. The commercial model
BEYOND SMS: THE EUROPEAN MOBILE DATA OPPORTUNITY
for voice services is well-established and
smaller mobile operators have limited room
to manoeuvre within it. Service-driven
models, however, can be much more
flexible. In the UK, for example, a new
entrant mobile operator Blyx intends to fund
its business through advertising revenues,
while offering mobile voice and data
services to its customers for free. Using the
Blyx model, mobile operators can, with their
Source: Yankee Group
customers’ consent, inform advertisers of
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BENEFITS OF OUTSOURCING FOR SMALLER / START-UP MOBILE OPERATORS
1. Because the wholesale provider of services has multiple relationships in place with a wide range
of international and regional content and applications providers, the mobile operator can enter
this market quickly with a broad set of services for its subscribers to choose from.
2. The wholesale provider is a one-stop shop for the mobile operator’s service needs and carries
out settlement, trust and security activities on behalf of the mobile operator.
3. The mobile operator doesn’t need to invest in this infrastructure and it further reduces its costs by
maintaining one relationship with the wholesale provider, rather than hundreds, or potentially
thousands, of relationships with all the service providers whose products it may eventually want to resell.
customers’ preferences, the services they have signed up for, and even their location and presence, and
advertisers can use this information to send personalised adverts to the operator’s customer base.
Even if mobile operators don’t go this far in search of a new business model, they will add to the
sum of their customer knowledge when they sell mobile content and application services. Such customerrelated information is highly valuable to the advertising community. Combining advertising and mobile
value-added services is leading to a number of interesting and lucrative opportunities for mobile operators.
While Tier 1 and Tier 2 mobile operators have already made investments in acquiring mobile
value-added services, what is the most cost-effective way for smaller operators to catch up? While
mobile value-added services are inexpensive to deliver, acquiring them and then putting an infrastructure in
place to manage them, requires significant capital expenditure. Smaller mobile operators do not own
the required content, nor do they have the resources to build the right kind of applications. In order to build
up an interesting and differentiated portfolio, they will need to negotiate with different developers of
content services and applications. The expertise required to do this is often beyond the scope of smaller
mobile operators.
OUTSOURCING
A further cost is the platform for managing third-party relationships and the mobile value-added services
themselves. A mobile operator will need a means of settling with individual content/application providers as
well as the ability to adapt third-party content and render the services so that they can be received by the
multiple devices used by its subscriber base. The operator may wish to brand the services or to link them with
relevant, local advertising. These capabilities are costly to acquire and to manage in-house.
Mobile operators are increasingly considering outsourcing the acquisition and management of mobile
value-added services to an intermediary so that they pay for services as they are used by subscribers.
Wholesale providers can take advantage of their economies of scale to offer services at highly competitive
prices, giving mobile operators the opportunity to make healthy margins on resale. Mobile operators should
look for an intermediary that is committed to price transparency and which has the breadth of relationships
in place to offer a compelling set of services. The wholesaler should be able to offer international
and regional services and it should allow its mobile operator customers to tailor services to their local requirements. Mobile operators will also need to assess the wholesaler’s capabilities for robust settlement, rendering and delivery of services and its level of support for new business models, such as advertising-driven models. Mobile content and applications are the future: mobile operators will need to provide such services quickly and cost-effectively to be competitive. Outsourcing mobile service provision will help smaller operators
compete effectively with large rivals. ■
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TRANSIT SERVICES
Keeping in touch
Retailers are starting to use SMS or MMS transit services as part of their advertising
and promotional plans. The market is growing fast, but success is not necessarily assured
A text message or multimedia promotional message sent to a subscriber’s mobile phone is an instant means
of communication, strengthening the customer relationship or encouraging the impulse purchase. Increasing
numbers of retailers want their CRM applications to be able to broadcast messages quickly to their
customers, for example to warn them of credit card usage or that their flight is delayed. Worldwide, about two
billion application-to-person SMS messages are sent on a monthly basis.
Since different customers use different mobile operators, companies need a means of connecting
to a large number of operators. Enterprises have several options here: they can use traffic aggregators to
transit their traffic or, in very open markets, they can tap directly into the SMSCs of mobile operators
themselves. However, with their high number of mobile operator connections – TI Sparkle, for example, is able
to deliver SMS traffic to more than 550 destinations worldwide – wholesale providers are in the best position
to provide transit services for SMS and MMS on an international basis.
TO INDIVIDUAL SUBSCRIBERS
An SMS or MMS transit service supports the one-way delivery of messages from applications to individual
subscriber handsets. An enterprise or traffic aggregator connects to the transit service once and gains
access to the universe of connected mobile operators, without the commercial agreements and technical
interconnection needed with individual operators. A
TI Sparkle guarantees a throughput
wholesale provider can quickly and cost-effectively
of 1,500 SMS per second to its
extend the reach of a traffic aggregator, to
destinations worldwide and is
destinations which are only required occasionally, or
developing an MMS transit service that
to reach small numbers of customers. The SMS/MMS
will be “tailormade” for advertising.
transit service provider handles all invoicing and
competitive providers only charge on successful delivery to the end user. This generates additional cost savings
as undelivered SMS traffic accounts, on average, for 15% of managed traffic.
The transit market is a highly price sensitive one, so media companies look for the lowest cost of delivery.
Increasingly, however, reputable businesses are valuing stability of coverage over lowest price. TI Sparkle
guarantees a throughput of 1,500 SMS per second to its destinations worldwide and is developing an
MMS transit service that will be “tailormade” for advertising.
TAILORMADE ADVERTISING
This service will support the sending of MMS with digital coupons to consumers. Eventually, MMS-based
adverts will be linked with customer location information from the mobile network and customer preference
information registered by the mobile operator. For example, if the consumer is a gaming enthusiast and walks
past a Sony dealership, he may receive a promotion for the purchase of the latest PS3 game.
More and more companies want to get in touch and stay in touch with customers wherever they are. This market is growing fast, but success depends on providing those companies with the ability to reach their entire customer base cost-effectively, and increasingly on an international basis. SMS and MMS transit services answer this
need, as long as they are offered by a wholesale provider with the right depth of coverage at the right price. ■
22
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GLOSSARY
3G
Third generation cellular communication system, a generic term referring to
the next generation of cellular technologies defined within the ITU’s IMT-2000
family and able to deliver multimedia services as well as traditional voice, text
and data.
Aggregator
A third party acting as an intermediary between multiple parties, consolidating
traffic, content services or other products and services and making these available
in an aggregated form to each party.
ARPU
Average revenue per user.
Bilateral
agreement
One-to-one agreement between two mobile operators covering, for example,
termination fees, billing arrangements, network interconnection, service level agreements.
Cascading
payments
The passing on of the correct share of revenue to each party participating in a
value chain.
EDGE
Enhanced Data rates for GSM Evolution
GPRS
General Packet Radio Service
GSMA
The global trade association represents more than 700 GSM mobile operator
members across 218 countries in the world.
GRX
GSM Roaming eXchange enables roaming for mobile data services across
GPRS/EdgeUMTS networks. It supports best-effort delivery of services and
mobile operators negotiate commercial roaming agreements with GRX partners
on a bilateral basis.
HSPA
High Speed Packet Access, a standard for mobile broadband over 3G networks.
HSDPA supports high-speed downlinks at a current peak rate of more than
3Mbps while HSUPA supports high-speed uplinks.
Hubbing model
A one-to-many model in which an operator’s single connection to the hub
automatically links it with all the other participants connected to the hub. Hubs
take care of both the commercial and technical aspects of interconnection, so the
operator needs only to support a single invoicing and billing relationship with the
hub provider as well as testing and maintaining a single network interconnect.
IMS
IP Multimedia Subsystem, a next-generation network architecture for telecoms
operators that supports the rapid development and delivery of new services using
an IP-based protocol, SIP. IMS is expected to work with any network that has
packet switching functions, mobile and fixed.
IP
Internet Protocol
23
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GLOSSARY
24
IPX
Internet Protocol eXchange, an IP-based next-generation backbone network
under development by the GSMA that will enable the differentiation of IP service
traffic and the delivery of each class of traffic according to agreed SLAs. IPX
supports the hubbing model and will interconnect any IP service provider with
high-value services that need to be delivered with guaranteed quality of service.
MMS transit
The transporting of application-to-person multimedia messages. MMS transit
delivers high volumes of messages to customers on multiple different networks
sent by enterprise CRM or campaign management systems, for example.
Open
Connectivity
Initiative
A GSMA initiative focussing on improving the efficiency of establishing and
maintaining bilateral interworking and roaming agreements and, longer term,
developing solutions that facilitate the rapid establishment of new agreements.
Over the
top service
A communications application, such as voice or messaging, that does not rely on
underlying network protocols. Skype is an example.
Roaming Hub
One of the outputs of the Open Connectivity Initiative, the roaming hub will support
one-to-many mobile roaming connections between operators without the need for
bilateral agreements.
SMS transit
The transporting of application-to-person SMS. SMS transit delivers high volumes
of messages to customers on multiple different networks sent by enterprise CRM
or campaign management systems, for example.
SS7
Signalling System Number 7
Traffic steering
Enables a mobile operator to decide in real time
roaming customer to, in order to leverage an
example. Traffic steering enables operators to
particular network, for example, a GPRS network
MMS, and to minimise outbound roaming costs.
which partner network to direct a
existing bilateral relationship, for
maximise outbound usage of a
or of a particular service, such as
UMTS
Universal Mobile Telecommunications
technology for CDMA-based network.
System,
Value-added
service
A service containing high-value content or an application, for which customers are
prepared to pay a premium over traditional voice, text and data services.
VoIP
Voice over Internet Protocol, voice traffic that is partially or fully routed across
a packet-switched network.
WAP
Web Access Protocol
Wimax
Worldwide Interoperability for Microwave Access, an IEEE 802.16 standard
for wireless data transfer that supports IP.
3G
mobile
network
Capacity publishing
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Page 3
CONTACT DETAILS
For more information about Telecom Italia Sparkle please contact:
For more information about Capacity magazine
© Telcap Ltd. please contact:
Fabrizio Gelli
Marketing, Wholesale Mobile Services Director
Tel: +39 06 5274 5541 Fax: +39 06 5274 5347
Email: [email protected]
Tel: +44 (0) 20 8549 2449
Fax: +44 (0) 20 8549 1249
Email: [email protected]
www.tisparkle.com
www.capacitymedia.com
Choose a worldwide leader.
Hubbing
Hubbing
MVAS
MVASContent
Content
International
International
Roaming
Roaming
Connectivity
Connectivity
A WORLD BEYOND

Mobile Services Handbook

Transcription

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