IPX Business Briefing 2013: The social networker

10 June 2013 |


Telstra Global’s director of portfolio & marketing, Nathan Bell, has crafted a clever new approach for developing the company’s IPX platform – he’s targeting business with the OTT players. Tim Phillips finds out more.

 

Nathan Bell, director, portfolio & marketing, Telstra Global  

Good news for Telstra Global: its IPX people are knackered.

“I had a review today on this: I was pleased to hear my team is feeling a bit overstretched in terms of the number of reviews and the design work they need to do,” says Nathan Bell, director of portfolio & marketing at Telstra Global.

This is good, he explains, not because Telstra likes to employ exhausted people (if any of them are reading this – not that they have much time for reading – he promised that you will be well rewarded in the end), but because it means that Telstra Global’s IPX platform – launched relatively late in 2012 – is being taken seriously. And, because of the way the platform is positioned, being taken seriously is a lot of work.

Analyst Innovation Observatory explains the benefit of Telstra Global’s approach like this: “a vision for IPX networking which shows it clearly understands the potential for IPX to be a platform for new service creation and delivery, as opposed to a means of simply sustaining the wholesale status quo.”

That’s right. Telstra wants to do more business with the OTTs.

Bell, having spent some time in the software business, is comfortable with what the OTT players want. He believes that IPX provides a way to accommodate them, create business for mobile operators in partnership with OTT players, cloud providers, CDNs and many other types of service, and still find a profitable way for Telstra to benefit. This means there are a lot of people for his team to speak to. They use a word to describe what they are building at Telstra which is commonplace in the software business, but still sounds off in telecoms.

“We look at it as more of an ecosystem,” Bell says. “Introducing mobile operators to media platforms and application platforms. Before IPX becomes another 3G scenario – ‘look at me, I’ve got a fantastic platform but I’m having to rely on OTTs to deliver my content’ – we are asking, is there a way to change that game? The ones looking for broader opportunities such as HD video and HD voice are the ones we are having good conversations with.”


Embracing the OTT community

OTTs are often dismissed as some kind of chronic disease that the telecoms community can’t shake off. Bell sees them in simpler terms: “Connect to where you see value from. Whether that’s another group of operators, another IPX provider, or an OTT provider to facilitate the type of dialogue they need to have,” he says.

And, if there are revenue opportunities through subscriptions, payments from OTTs to operators to be integrated with their devices of service bundles, then Bell wants to capitalise now – not least because application developers aren’t used to waiting around while an operator wanders off looking for a screwdriver.

“You see the OTT looking at the ecosystem as a rapid business enabler, not thinking that we will add this operator this quarter, then another next quarter. So we’ve had some very interesting meetings with some cloud companies, who once we explain our philosophy are very excited, because for them mobile operators are out of reach historically.” Bell’s thinking aims to address Telstra’s historical markets first, which means that the OTTs usually quoted in any discussion – Skype, Google, and so on – are less relevant than local alternatives. Those OTTs have potential to grow quickly, but only if the problems of access and localisation are solved first. And for that, IPX has an important role.

“The majority of operators are very localised. Through IPX we create access to all of them, and of course for the cloud providers, they can get access to 300 or 400 million of the people in Asia-Pacific. Not a bad outcome. With the class of service model, whatever you charge the operator or the user, you can provide the ultimate class of experience,” Bell says.

“If it’s just data packets or social media updates, if it takes a few more seconds it doesn’t matter. So if you look to define the experience you give to the end customer, it puts them in control of their own destiny.”


Focus on Asia

The industry is accustomed to thinking about the Asian market in technical terms – as a group of operators which have been aggressive with LTE roll-outs. The Asian market has one particular feature of its LTE environment that both creates opportunity and adds complexity: migrant populations.

“The Philippines’ greatest export is people. There is a huge need for roaming to leverage LTE on a consistent basis. An incumbent in one market might want to reach out to the Thai community in Singapore or Hong Kong or Malaysia. There are 200 operators in Asia. If you’re an OTT provider you can’t connect to everyone with your own network. It’s a massive investment. If you know you can connect to one ecosystem, and then you have access to numerous mobile operators, you can start creating unique solutions in partnership with each of them, if that becomes language-based, or segment-based, depending on the operator,” Bell says.

This contrasts with the more staged approach in Europe and America, although Telstra Global also plans to bring its ecosystem approach to those markets. They also have ambitious smaller OTT players, segmented or migrant customers, and mutual incomprehension between operators and service providers. Telstra Global is seeking out partners from Europe who want to take advantage of increased access to mobile platforms wherever it has coverage, though not by partnering as widely as possible at first. Instead, it is looking to attract providers who need to build business quickly.

There is, though, a rationale for Telstra Global to give priority to Asia, as it increases the potential of other business units. “We have two mobile operators in our family. CSL in Hong Kong and Telstra in Australia. If I wasn’t doing this I would be doing the family a disservice, not meeting their requirements. There’s an opportunity to recognise where the market is going, providing services. Operators can start using LTE networks to provide infrastructure for enterprises and multimedia platforms – and we have Telstra Media, a big investment in Australia and overseas. We wouldn’t be able to share that out to other operators and let them leverage our platform without IPX,” Bell explains.

While aiming to attract challenger operators and challenger service providers, Telstra Global is perhaps a bit of a Larrikin IPX provider too. Having studied how GRXs forced those operators “to gravitate to the largest guy in the room”, Bell likes the idea of IPX platforms that allow much more freedom of choice to the operators who connect. They also want to define a data service, rather than simply migrate voice business. Bell attributes this to a changing pattern of device usage, where the high-value applications may not mean a voice connection is important at all: “The operators we talk to look to have the data piece first. A lot of people are using tablets and smartphones overseas as data-only devices. Voice is not coming across as a priority. I can completely understand the strategy of wholesale voice providers, but we’re providing a more neutral standpoint to build the ecosystem. Tell us your business priorities, and we will work with that.”


Vision for the future

MNO service innovation that depends on creating dedicated infrastructure (“we’ll build a $15 million platform, and if we get 100,000 users it should be profitable”) is, even in the IP world, too high a risk for many of the MNOs that Bell has met. Therefore IPX becomes, in Telstra’s vision,the most open platform possible: “We’re investing heavily in core functionality to provide multiple interconnects on single providers, and some of the billing arrangements we’re being asked to pick up on behalf of our customers. We’re pushing the innovation and disruption. We’re investing in it for the long term,” Bell says.

If it is to succeed, Telstra needs to take two sets of business problems – on the operator side, the need to provide services that users will pay for, and on the service provider side, the need to reach users quickly and efficiently – and act as the interpreter between two different cultures. Bell believes that it can provide both the technical and the cultural connection.

It’s hardly surprising that it is working his staff hard: this isn’t the first time that the cultures have tried to work together. While the rise of the smartphone and the tablet has created the sort of cooperation between companies like Google and Apple and the operators that would have seemed unlikely 10 years ago, that may be a function of market power rather than a shared vision. The next step is to find a common idea for the role of operator and service provider that IPX can make happen.

“Operators don’t want to be back in the situation where they provide LTE and everyone else provides the services on top of it. If you can work with partners who share that philosophy, you can ultimately share the benefits,” Bell says, “That’s the big thing with IPX: no one has identified the full scope of what it can be yet.”