Harnessing the mobile economy

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Harnessing the mobile economy Nothing is worse than missing an opportunity that could have changed your business for ever. Throughout our lives and careers this has likely happened to all of us, either because we were not astute enough to recognise it or we were not bold or quick enough to take advantage of it. In this day and age of everything mobile and digital, it is clear that one of these business changing opportunities is the growth of the digital mobile economy and the opportunity to use new approaches and technologies, such as artificial intelligence, to maximise its potential.


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OPPORTUNITIES, OPPORTUNITIES, OPPORTUNITIES Opportunity #1 - The traffic storm Firstly, addressing the digital mobile economy is about supporting traffic growth and evolution. We live in a world where 4G users are now dominant and commercial 5G networks and services are ready for launch. While the number of unique mobile subscribers is levelling off and will reach 5.9 billion in 2025, the number of mobile internet users is growing rapidly at over 5% per year, from 3.3 billion in 2017 to 5.0 billion in 2025. At that point, smartphones will be used by 77% of mobile users and 4G/5G connections will represent 67% of the total. In effect, today’s digital consumers will become tomorrow’s augmented customers as they adopt these emerging capabilities.

storm that is already hitting operators’ and carriers’ networks. Based on the latest statistics from Ericsson, mobile data will increase eightfold over the next 5 years, reaching 110 Exabyte per month in 2023. One can only imagine the impact that IoT traffic will have, as it takes off and is added to this mix. For example, last year operators in the USA connected more cars to their network than people - a sure sign of how the business is changing. Added to the mix is the expected proliferation of Instant Apps, launched last year by Google. These mobile applications reside in the cloud and not on your phone, meaning that each and every time you connect to the app, you generate internet traffic, at home or abroad. One can only dream of how much data traffic this will generate.

‘Mobile internet users will reach 5 billion in 2025’

On the international front, data roaming traffic has also exploded, partly stimulated by the introduction of Roam-Like-Home plans in Europe and North America and the expectation from customers that everything they do should be available wherever they are.

For example, Telefónica has reported a remarkable increase in the past 2 years since regulation changes in Europe: triple digit growth in data roaming by July 2017 and further growth through 2018. These significant statistics provide a clear indication that the roaming market framework has changed. These are all elements to the perfect data traffic

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basis.

As a result, operators and carriers serious about playing a central role within the mobile ecosystem, must focus on building a network fabric which supports high quality secured connectivity, available anywhere on a global

For carriers, this means deploying high quality IPX networks, which can be upgraded almost in real-time, taking advantage of automation and virtualization capabilities. For those with strong domestic transmission networks, it could also be a good opportunity to provide fixed mobile backhaul, to help remove the pressure on mobile networks as they rollout larger and denser wireless capabilities, especially with 5G around the corner.


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Finally, roaming in the 3G world always meant that the data traffic was carried back to the home network to connect to the internet. Although LTE networks don’t require this, many deployments to date have maintained this home routing approach. Now might be a great time to review how the high levels of roaming data can best be handled before the growth really kicks into gear. Taking this to another level, using Artificial Intelligence (AI) capabilities to predict the type of traffic that certain types of customer are likely to generate and use network features to, for example transcode the video components to better fit their device and minimize network load, might equally generate significant gains in efficiency. Opportunity #2 – The IoT revolution Secondly, the mobile opportunity must certainly include the Internet of Things and the rise of smart “everything”! According to the GSMA, the number of IoT connections will increase more than threefold between 2017 and 2025, reaching 25 billion devices. These are not, by any means, all via cellular connections, as many smart home devices use short-range connectivity such as Wi-Fi, Z-Wave and Zigbee. A lot of the growth is also seen to be in the increasing use of IoT devices in industrial, rather than consumer applications, with an almost five times growth in that area through 2025. The need to access and control these devices wherever they are, especially in supply chain applications, will drive a significant growth in licensed cellular connections, which is expected to reach 3.1 billion worldwide around 12% of the total IoT connections.

Smart homes, Smart cities, Smart cars - the innovations are piling up rapidly in all parts of the globe. Asia Pacific is leading the way with the largest increase in IoT connections from 2.8 billion in 2017 to 10.9 billion in 2025. But other developed areas, such as North America and Europe are not far behind, as we saw with the car example earlier. The end result will be a massive opportunity to help global enterprises to establish and manage not only the deployment of such two-way devices but, critically, the management of the vast quantities of data that such devices will generate. This is where artificial intelligence and machine learning can come to the fore. Simply carrying all the data from the device to some central facility is both costly and adds significant latency. Using AI enabled analysis at the point of collection and close to the device to identify the key elements of the data flow and make decisions there and then, with minimal latency, makes much more sense. From there, you can use cloud computing capabilities to review and store the results together with high quality, high capacity links to bring the intelligence back to the companies that need it. What companies are increasingly looking for is not just reliable networking, but reliable outcomes. They want partners who understand what they are trying to achieve and deliver services that guarantee that the need is met, not just that lost packets met their SLA. Carriers able to bridge that gap in expectations, especially using the latest technologies with machine learning, will be head and shoulders above the competition.

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With those close relationships with major customers in place, technologies such as Blockchain can play an enhanced role, especially across supply chains with many interconnected players. Consequently, tying data gathering and analysis, with secure sharing of key information, will also be a major competitive advantage. One thing is certain - the world will never be the same again and the opportunities to get in on the ground floor of the IoT world are there now. Opportunity #3 – The customer is king Thirdly, addressing the mobile economy opportunity is also about enabling mobile customers’ thirst for control. The digitalization and empowerment movement, which has swept our society in the

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last 10 years, has created what we like to call the ‘me-me-me’ generation. Now it is all about what we want, when and where we want it and on the device of our choice. We want to be in total control. This means that operators must develop the technology and systems necessary to offers a self-serve, real-time experience, tailored to each and every one of us. Furthermore, the “me” here is not just at an individual level. Companies have similar expectations. They want partners which understand their ultimate goals and that provide the services to meet that outcome, rather than provide solely the pipe to then take a step back as long as it is meeting its SLA. Tailoring services for commercial customers is all about understanding their use case and meeting that requirement as it evolves over time and distance.


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To address this opportunity, mobile operators and the carriers that support them must deploy intelligent and intuitive systems that put digital customers at the centre of their experience. This means offering solutions such as data sharing plans, location-based offers and evolved data package management capabilities.

rules brought on by GDPR have transformed the European telecom space. But more widely, the serious breaches of user data reported by some of the major social media and internet giants are prompting governments everywhere to look at how this can be managed and even controlled.

For carriers, this means enabling operators to bring on needed capacity as their requirements evolve. It also means offering them a catalogue of Business Intelligence and analytics tools, enabling operators to monitor and get a 360° view of their business in real-time.

This potentially results in more protection for the end user, but in other ways it is creating a chaotic and more challenging environment for service providers.

When it comes to usage, as stated earlier in this article, mobile devices have become not only a tool to communicate, but more importantly, one used to be entertained and informed. It is estimated that over 70% of digital media consumed is done so using a mobile device and this is expected to accelerate with the advent of 5G. To take advantage of the mobile content opportunity, operators must become the trusted intermediary that creates an endto-end ecosystem which includes not only the connectivity and the device, but more importantly, tailored, meaningful, up-to date content and information. Building partnerships with content providers, while moving towards a platform business model, is therefore also a key requirement here. Opportunity #4 – Changing rules Finally, the rising involvement of regulators, and governments more widely, is having a growing impact on the mobile ecosystem and its services. Three recent events come to mind. The introduction of the Roam-Like-Home concept and the tightening security and privacy

GDPR, and the increased focus on privacy and control of user data, is putting limits on one of the ways that companies have monetized the services that appear, to the consumer, to come for free. While early implementations have resulted in many “click to continue” implementations, perhaps there are ways to collaboratively develop approaches where the consumer more actively buys into the offerings that a mobile operator can put forward. It is early days, but there is definitely a shift towards more privacy protections, more consumer control of what their data and usage patterns can be used for, which perhaps will mean that consumers need to directly pay for services that were “free”. That change alters the balance of power between “over the top” services and mobile operator provided services which could play to the operators benefit because of their existing contractual arrangements with those customers. Nevertheless, as I often say, through chaos come great opportunities for those who have the courage and the wit to do what it takes to capitalize on it, so now is the time to equip yourselves with the necessary tools to lead in this rapidly evolving environment.

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MOBILE ECONOMY SUCCESS MANTRAS I often say, if you don’t have a competitive advantage don’t compete. So, what does a competitive advantage look like in today’s mobile digital economy? Below are four mantras that any operator or carrier should follow to gain the edge: Mobile Customer centricity: In the mobile economy environment, customer centricity is all about enabling customers to tailor their mobile experience at all times whether at home or abroad. This also means enabling them to not only consume content but also to create it. Mobile-centric partnerships: Operators and wholesalers need to build partnerships that enable them to create end-to-end

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ecosystems that will provide mobile users with a 360° experience, not only enabling them to communicate, but also to be entertained and ultimately to control all aspect of their lives through their devices. Mobile Service fluidity: The mobile service evolution is only starting to gain speed with the move to 5G and the widespread deployment of IoT devices. Operators and carriers have to equip themselves with tools that will foster this constantly fluid environment. Mobile Network fabric: Finally, last but not least, the fabric supporting this mobile economy is the network. Operators and carriers must therefore build mobile networks, and backbones that support them, which can expand in realtime to support the exploding needs for data connectivity.


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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, Mobile and Satellite services, innovative Digital solutions and end-to-end solutions for enterprises. Our comprehensive set of mobile services includes IPX Transport, Messaging, IoT, Signalling and Roaming services, new value-added solutions like Marketing Campaigns Manager and Data Optimization, as well as a powerful analytics tool, Business Intelligence & Analytics. As a leading global provider of integrated communication solutions, Telefónica has a global footprint, with presence in over 40 countries (particularly strong in Latin America & Europe) and service reach in more than 170 countries. To learn more, please visit https://www.wholesale.telefonica.com

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