Choose tomorrow, today
The digital world in which we live today is defined by connections; connections between people and “things”, supported by technology and offering up multiple possibilities. How is Telefónica transforming to capture these opportunities?
The explosion in the number of connections is accompanied by an exponential growth in data. This data is a key platform driving the dramatic progress of artificial intelligence learning capabilities and delivering a world of insights in a new digital era.
Across the world, economies and societies are being fundamentally transformed by digitalisation. New technologies are changing the way societies face crucial challenges in relation to employment and climate change among others. It is important that the wholesale community addresses this wider consumer paradigm shift and adapts its strategies accordingly.
The transformation journey
During the last few years, Telefónica has been immersed in a deep period of transition with the end goal to meet the expectations of its customers and retain their trust to ensure long term commercial success. This change of mind set has led to the creation of an ecosystem of infrastructure, technology, platforms and services that allow carriers, operators, enterprises and individuals to improve their businesses and make life easier.
Applying innovation to the way Telefónica does business, operates and collaborates across all areas of the organisation, has been key to this process. It has also led to the development of a simplified and competitive portfolio, augmentation of its relationship models with both customers and suppliers, and placement of a clear focus on the creation of new services.
Telefónica is building its future underpinned by the support of four major, distinctive technological platforms. The first platform consists of the company’s physical assets such as networks and data centres, whilst the second relates to operations and commercial systems along with IT management systems which support the network. The third platform is about delivering the best products and services, while the fourth platform is building a proposition that leverages the real value of customer knowledge, closely linked to Big Data and Artificial Intelligence.
Technological innovation capabilities and the integration of new technologies like the Internet of Things, Big Data, Artificial Intelligence, Cloud, Security and other digital solutions is embedded in its core. At the same time, whilst digital transformation brings countless opportunities for wholesalers, the industry faces a challenge to manage the transition from traditional services and traditional sources of revenue to new digital ones.
For Telefónica’s wholesale business, its transformation is building on a solid platform which is also continually evolving. For example, the way it offers core services in regions of influence is also changing in order to maintain the company’s leading position, being second to none. This means constantly improving services with better access options through satellite, fibre, mobile, and radio, and widening coverage for ITFS, SIP Trunk and Ethernet.
As part of the acceleration of innovation and development of platform 3, mobile services has been an area on which the company has placed significant focus. The increase in users and connected mobile devices, the expansion of LTE networks and growth in bandwidth consumption, and the explosion of roaming are all drivers that are changing the market. Mobile operators are demanding advanced, flexible and dynamic services that enable them, wherever possible, to monetise their offering and to operate more efficiently. As a result the different players in this space are being forced to offer more efficient services tailored to the needs of their customers.
Automation and Virtualisation are key for the future of networks
Automation and virtualisation are already an essential part of Telefónica’s networks, supporting the construction of a more flexible, agile and scalable network through the evolution towards the sofwarisation of the different elements and layers of the network. Network Sofwarisation is transforming how services are deployed, delivered and used today and will continue to have an impact in the future. The automation and sofwarisation of Telefónica’s infrastructure and services, allows it to orchestrate services in a more dynamic, flexible and efficient way and to improve all processes: pricing, ordering, provisioning, ticketing and billing. It also provides an opportunity to enhance customer experience, a major factor for business success.
In order to offer the best connectivity and the virtualisation of several services and network functions, such as vRAS, vRouter and vFirewall, Telefónica International Wholesale Services has deployed 7 nodes (Network Functions Hubs) in the Americas, Europe and Asia during 2017.
This investment means Telefónica offers a fully virtualised network system, which enables its customers to access a virtualised platform, available worldwide, in order to extend their own infrastructure and products globally.
Furthermore, Telefónica is investing heavily in automation tools that implies BSS and OSS renewal is structured in a more dynamic Full Stack System to support its customers in a more efficient and agile manner.
Telefónica is also providing SD-WAN services to their corporate customers to deliver automatic and on-demand network services.
Moving towards 5G
Telefónica is a leader in the path to 5G, playing an active role in the principal standardisation forums that are defining the journey to 5G, as well as being involved in other innovative projects, developing industry agreements with key vendors in order to develop innovative activities and test new network technologies. The first pilots have been deployed through the 5G Technological Cities Project, with the deployment of 5G capabilities in the Spanish cities of Segovia and Talavera de la Reina, in partnership with Nokia and Ericsson.
Telefónica’s experience in its own networks will always be a clear advantage to help other service providers to evolve their services and networks. Having more than 300 million customers and 17 operations makes a real difference.
The roaming revolution
The impact of the new roaming regulation in Europe has created a real shift change in the volume of managed traffic for MNOs in Europe, both in terms of voice and data. Since 15 June 2017, travellers from the European Union can communicate whilst in roaming, at the same prices as their local tariff.
This has eliminated the dreaded ‘bill shock’, encouraged silent roamers to turn on mobile roaming and resulted in a significant increase in data roaming, which in Telefónica’s European footprint has reached increases in excess of 370%. In order to absorb these increases, Telefónica has invested in the network infrastructure that is necessary in order that the quality of service is not affected.
Telefónica considers its network to be its greatest asset with connectivity right at the heart of its business, and has made significant investment in its fixed and mobile networks. However, the future of the network is digital and as a result, Telefónica is evolving towards a flexible, programmable, software based and future proof network. Telefónica’s journey towards becoming a true all IP network will soon be a reality, enabling the organisation to transform its transport and core infrastructure in all geographies, improving communication capabilities for its customers.
Improving customer experience with LTE
The growth of LTE networks and devices has been another of the consequences of today’s ‘always on’ world. Customers want to be connected at all times, with the highest speed and quality, and demand the same user experience whilst travelling abroad as they enjoy with their local operator. Telefónica International Wholesale Services has invested in new, advanced LTE signalling nodes in Europe, joining those already deployed in America, which has enabled it to provide coverage to more than 250 million LTE customers in 400 destinations.
In line with the unstoppable growth in LTE, Telefónica’s operations launched LTE Roaming supported by Telefónica International Wholesale Services’ LTE Diameter Exchange Service. This important development further enhances the company’s position in the most relevant markets in Europe, APAC, the Middle East and Africa.
In parallel, Telefónica International Wholesale Services has also developed for its operating businesses, a totally customised version of its Steering of Roaming solution. This further demonstrates Telefónica’s transformation, partnering with its customers and tailoring its offer to meet their needs, whatever they may be.
Furthermore, the deployment of VoLTE technology also began in 2016, and is now available in multiple countries in Latin America, with future deployments planned.
IPX - enabling new ways to connect
Clearly IPX providers like Telefónica have a key role to play to provide the interconnection options that enable MNOs to meet their customers’ connectivity and experience expectations. But importantly, they can also help minimise any potential negative impact on MNOs’ roaming business brought about by the changes in the competitive environment by being able to deliver the right offer, to the right person, at the right time through multiple channels.
Telefónica recognises the huge future potential of IPX and as part of its commitment to this technology, has continued to develop new value added services over IPX transport. These services enable mobile operators to greatly improve their own portfolios, generate new revenue streams, create new engagement opportunities, and monetise their activities across all markets and verticals.
Its recently-launched Marketing Campaigns Manager is a solution that enables customers to face the current challenges of an increasingly demanding market. The solution is based on modular architecture that allows operators to generate personalised campaigns, in real time and through multiple channels, helping them to increase their revenues and create new business models for third parties, as well as monetise every subscriber interaction.
The development of this new service was also a key contributing factor to Telefónica being recognised as the ‘Best IPX Service’ at the 2017 Global Carrier Awards. This was the second time Telefónica has won this award, providing further evidence of its commitment to continual innovation in order to stay at the forefront of IPX development and ensure that its services are ready and fit for purpose to capture all new opportunities.
A2P still showing sustained growth
Traditional services like A2P Messaging, which supposedly was in a period of decline, has sustained its growth, surpassing even the most optimistic of forecasts. According to Zion Market Research, the global A2P SMS market is growing 4% CAGR between 2015 and 2020, reaching USD 70.0 billion in 2020.
The Telefónica Group’s platform is currently managing more than 70 million SMS on a monthly basis and is growing. This is due to the fact that the service quality is high, the service is offered with committed SLAs, and SMS is still a very robust way for enterprises to interact with their customers on a large scale basis, worldwide. In order to continue to deliver this high quality and to adapt to the omnichannel reality of customer service, Telefónica has made significant investment in its platform, in terms of size and scale, making the invoicing process more agile and adding new functionalities, such as RCS, all of which meet the new demands of today’s market, as well as future-proofing its services for the customers of tomorrow.
Collaboration between telcos
Telefónica’s Telco4Telco program was developed in order to extend the value of digital services and promote collaboration among operators replicating activities in its own operating businesses. Sometimes it is about exchanging best practices or consultancy, but on other occasions we are providing the technology that underpins new services, or acting as change agents to align competitors’ interests to create a new seamless market.
The type of collaboration generated by the Telco4Telco model is already having a positive impact on the wholesale sector. Following on from successful activity focused on Cyber Security and Satellite Cellular Backhaul, the 2017 launch of Telefónica’s Telco4Telco Roaming initiative has also been a true success. No vendor in the market can offer a bundle of mobile services, such as Telefónica’s IPX & Signalling bundle, and be a Telco at the same time and so having a clear and simple portfolio, working operator to operator, has enabled Telefónica to close many new business deals.
The future is now
Transformation is a continual journey. Telefónica’s competitive catalogue of services, combined with extensive experience gained from having over 340 million customers operating in 17 countries, as well as the mix between global developments and local executions, places the company in a privileged position to face all the challenges that lie ahead and to continue to deliver for its customers and exceed their expectations.