Interview with Juan Carlos Bernal, CEO of International Wholesale Business Unit, Telefonica

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Don't fear change embrace it

SUCCESS The ability to change makes the difference between winners and losers

Don't FEAR CHANGE EMBRACE IT Juan Carlos Bernal CEO of International Wholesale Business Unit Telefónica


uan Carlos Bernal is CEO of Telefónica’s International Wholesale Business Unit. He has been spearheading this strategic group for close to three years now, focusing on embracing change and empowering the digital transformation, not only of his own organization, but more importantly of his customers. I recently had the opportunity to discuss with him the importance of flexible and on-demand platform-type business models, and how they give carriers the ability to change in real-time.



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What do you think is the way back to growth for the wholesale industry? I believe that to make our way back to growth we must address two different paths. The first one is to aim for ultimate efficiency, as there is always room for improvement. In addition, new technologies, such as AI and blockchain, will enable us to go much further when it comes to agility. At the same time, I believe that wholesalers have the opportunity to offer new innovative services and address new customer segments. For example, at Telefรณnica we are focused on expanding our value added and digital portfolio of services based on platforms. We found that these help us better address the retailer segment. Some examples include our voice and messaging anti-fraud platform and our marketing campaigns manager, which is a platform that allows retailers to use a much more tailored approach to address the roaming opportunity. When it comes to tackling new customer segments, as we are starting to benefit from the digitalization of our services, we are also expanding our traditional customer target markets to include aggregators and distributors as well as cloud and platform providers. These new target customers require us to use a new digital approach, but we see this as a great opportunity for growth.

How do you think the wholesale business must change to be able to offer these new services and address these new customer segments? We must rapidly evolve our current business model towards agility and flexibility to facilitate the evolution of our own customers and we must do this in a very short timeframe. This means offering services on-demand using fluid agreements such as pay-as-yougo, and to do so we must transform our networks, processes and tools. As the customer landscape is evolving rapidly, in addition, we must approach our customers differently, using self-served customer portals and APIs. To play a central role in the digital platform ecosystem we must also offer our customers transparency. This means opening-up our business and exposing our capabilities in terms of network elements, systems and solutions. It may even mean integrating 3rd party systems within our own. But in essence, we are focusing on three main digital transformation topics at Telefรณnica. Firstly, network virtualization and everything to do around automation. Followed by a program to develop digital relationships with our customer, with the launch of digital marketing campaigns, tools and customer portals. And finally, we are also focusing on making sure that both of these things work together, as they are complementary and one needs the other to succeed.



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The workforce is a crucial part of the digitalization puzzle. How are you addressing this challenge within Telef贸nica Wholesale? I think that the transformation of the people and their skills is the most difficult but also the key part of the digital transformation. The technology is there, but we must have the right people to make this transformation happen. At Telef贸nica we have started to evolve the type of people involved in the planning and management of our network. From people who were often coming from the vendor side and focusing on the equipment, towards people who are experienced in software and who can actually program the network and its services. Then the second key pre-requisite is to get the right leaders in place who are confident enough to give the power to the people and allow them to take risks, which will in turn stimulate creativity. Finally, we must change the way we deliver our business by using agile methodologies to accelerate product development and decision making and to encourage collaboration. This is a very powerful tool that helps us on our transformational journey. This agile way of creating can also be applied when cooperating with our partners and customers, which is even more formidable. EMBRACING CHANGE TO ADDRESS THE FUTURE

The telecom world is moving towards use case focused solutions. Can wholesalers help in this evolution?



We do think that orienting the wholesale business towards delivering use case driven outcomes is a significant opportunity. However, it is difficult today to seize this opportunity which will be generated by the upcoming explosion of data around IoT, gaming and content. Nevertheless, wholesalers definitely have a role to play in the creation of the vertical partnerships, cloud ecosystems and edge computing capabilities that will be required to deliver these specific end-to-end solutions. These vertically-focused applications will require high quality, high bandwidth networks, connectivity, storage and most probably processing capabilities, which are all functions that wholesalers are well positioned to deliver. I am also convinced that there will be a growing demand for edge computing capabilities, to get the content as close as possible to the device and I think that we can, as wholesalers, offer this kind of functionality. A lot of work needs to be done to make this a reality, but I think there will be a significant opportunity here, more specifically for wholesalers who are part of retail companies such as Telef贸nica.

When it comes to blockchain, what do you think is the most realistic use case that wholesalers should consider? I believe that blockchain will provide a frictionless framework for inter-carrier interconnection, at least initially around the voice settlement infrastructure. Telef贸nica is part of the initial Proof of Concept (PoC), led by the Global Leaders Forum (GLF), and the

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result have been very positive. I believe that blockchain could also be a strong enabler of the fight against international voice fraud. Going a step further, there are a multitude of other applications for the blockchain technology, both internally and externally. Within Telefรณnica we see an opportunity to apply blockchain to optimize our terminal management and to empower our supply chain evolution for example. We also see a very interesting use case around data and bandwidth management in real time.

What about the use of blockchain to generate new revenue. Is this realistic in the short term? There is an opportunity to generate new revenue using blockchain. The first that comes to mind is the deployment of a blockchain platform as a service. Maybe not so much in the wholesale space, but maybe more to address the B2B and enterprise opportunity.

What do you think will be the next big disruptor in our industry? The next big disruptor will be 5G and the range of applications it will enable. It will be a challenge for us to adapt our networks to support these high bandwidth, low latency applications. But it will also be an opportunity for us to launch new advanced services to address new types of customers.

What do you think will be the next big challenge? For us as wholesalers, the next big challenge is to adapt our networks and legacy systems to the new digital needs of our customers, as

well as to the exponential data traffic growth. We must ensure that we operate high quality, secure and elastic networks. It will be a significant challenge to offer that globally.

What do you think will be the next big opportunity? The next big opportunity will be to get closer to the retailers and remain relevant by helping them to develop a better relationship with the end-users. If we succeed in offering retailers services that enable them to add value beyond traditional services, we will become a partner of choice. For example, providing solutions around business intelligence and analytics or platforms that offer flexible and personalized data roaming plans is something we focus on. EMBRACING CHANGE TO HARNESS THE DIGITAL ECONOMIES

How do you think wholesalers should go about harnessing the opportunities generated by the mobile economy? Service providers and carriers alike are focusing on offering secure, flexible and always on connectivity which is a must to benefit from the mobile economy. Once this is achieved, you should focus on deploying value added services on top of the mobility application to create a personalized experience. The network will be a key building block of the mobile ecosystem and we should therefore open it to platform service providers and integrators to build their services on top of it.



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How do you think wholesalers should go about harnessing the opportunities generated by the Gigabit economy? Customers today are looking for costeffective, real-time, tailored solutions. To enable that, we must move towards cloud business models that support flexibility and adaptability of on-demand connectivity. To deliver this globally, which is mandatory, it is key that we develop a global partnership ecosystem, as no one can deliver this on their own. Partnership is therefore key in the new digital platform economy. By nature, international carriers have a vast experience in creating partnerships, as we are an industry which is based on such partnerships. We must therefore translate our know-how and partnership mindset to facilitate the digital connectivity world.

How do you think wholesalers should go about harnessing the opportunities generated by the platform economy? Wholesalers must digitalize their front office, principally using customer portals and APIs. They must also focus on transforming their back-office, which means converting not only their network into a real-time platform, but also re-inventing their processes. This is the core of Telefónica’s digital strategy and we have succeeded in making significant progress in this regard.

What is the difference between a winner and a loser in our industry? With the rapid transformation of our society, I think that what will separate winners and losers in our industry will be their ability to change. No one really knows what the future



will bring, what the business will look like and how the technology will evolve. So, in this type of uncertain, fluid environment those who have the ability to adjust to change in real-time will win big. We must learn to adapt everything, from our processes, to our systems, networks and people and create businesses that react as if they were living organisms.

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ABOUT THE AUTHOR Isabelle Paradis President, HOT TELECOM Isabelle is President and Founder of HOT TELECOM, one of the most innovative and creative telecom research and consulting companies in the industry. More recently, Isabelle has been working with many of the world’s telecom service providers to help them define their transformation strategy. She has published several articles and reports on the subject and has spoken at numerous conferences around the world to share her views on the future of the international telecoms business.

ABOUT TELEFONICA INTERNATIONAL WHOLESALE SERVICES Telefónica International Wholesale Services (TIWS) provides world-class wholesale services to fixed and mobile operators, service providers, carriers and OTT-Media companies. Our global portfolio includes Voice, Carrier Enterprise (including Cloud & Connectivity Solutions), Mobile (including IPX Transport, Messaging, IoT, Signalling, Roaming, Mobile VAS and Analytics tools) and Satellite services, as well as innovative Digital solutions (Security, IoT and Big Data) and end-to-end solutions for enterprises. As a leading global provider of integrated communication solutions, Telefónica has a global footprint, with presence in over 35 countries (particularly strong in Latin America and Europe) and service reach in more than 170 countries. To learn more, please visit