On the journey to become a digital wholesale carrier
Telefónica as a group is focussed on innovation, Juan Carlos Bernal, the CEO of the international wholesale business unit, tells James Pearce. It is on a journey to become a ‘digital wholesale carrier’
Wholesale perhaps isn't known as the hotbed of innovation – but the need for creative new services and utilisation of advanced technologies is perhaps more pressing than ever.
For the likes of Telefónica – one of the top 10 telecoms operators in the world by revenue and a behemoth of an organisation with more than 343 million customers spanning operations in 17 countries across the globe – innovation makes up a vital part of its strategy.
This group level dedication to innovation is also prevalent in the Spain-based giant’s international wholesale division, according to Juan Carlos Bernal, CEO of the international wholesale business unit at Telefónica.
“Telefónica as a group is focussed on innovation,” he says as we chat over a telepresence system from two separate Telefónica offices – Bernal is in Madrid while I’m in London. “We are addressing this based on both internal innovation, through a unit that looks at critical technologies, and also through external innovation such as start-ups.”
So what about wholesale? “In wholesale, we are doing this to bring into our service portfolio the different technologies and services that the group is launching for its retail side,” he adds. “Last year, we created a digital unit in the wholesale operation that is focussed on promoting and discussing with different partners how we can help them to include digital services that we have already developed in their portfolio. We have high expectations for this unit. What it is doing is bringing in the different innovations that the Telefónica group has developed into our portfolio for carriers.”
This innovation strategy ties into Telefónica International Wholesale Services’ three so-called pillars, which Bernal highlights. These are boosting its service portfolio by developing new, innovative services; improving operational efficiency; and increasing coverage.
For the first, he explains: “International carriers have a challenge to increase service portfolios from international voice to completely new services that allow us to become a more digital and sophisticated company. We are following this strategy.”
One example of a new product recently launched by the wholesale arm is its new Data Optimisation service. The new service is designed to enable mobile operators to enhance their customer experience with faster access to mobile content. Importantly, Data Optimisation can optimise a wide variety of content, over different protocols, including the most popular services such as Netflix, YouTube, and Facebook.
It means carriers can face issues with surging data and congestion by allowing the carrier to optimise subscribers’ data sessions when they are abroad, reducing the roaming inter-operator tariff costs.
“On top of mobile, we are also increasing our portfolio in digital products; in IoT, with connected car solutions for carriers; security; satellite services – we have merged with another part of the Telefónica group to create the most powerful digital satellite solutions footprint, and we are operating this across the carrier, b2b and even consumer side.”
Improving operational efficiency is “in the DNA of international carriers” and to this end, Telefónica has taken steps such as automating elements of its wholesale operation. It also transformed its voice business into a full-IP operation.
One way Telefónica is expanding its coverage is through the deployment of virtual points of presence (vPoPs).
The wholesale unit has over 115 international points of presence in 69 cities across more than 40 countries, but it has now deployed seven vPoPs, with plans to roll out more.
“A key pillar for us is increasing our coverage, and one way we are doing this is through virtual PoPs, which can be deployed very quickly and help save money,” he explains.
“It makes it quite easy to increase the coverage based on virtual PoPs in regions where either we have a presence and want to expand it, like in America and Europe, or where we don’t already have a presence, like in Asia or Turkey. It is a good way to increase our coverage with a reduced capital expenditure.”