Canvas VAS Transformation & Consolidation. Whitepaper.

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1 Canvas VAS Transformation & Consolidation Whitepaper AHL Serbest Bölgesi, No:57 Yeşilköy, Istanbul, 1 Turkey Phone: Fax:

2 Table of Contents Executive Summary... 3 VAS Market Trends... 3 VAS Challenges Faced by Operators... 6 Key Drivers for VAS Consolidation... 7 Why CanVAS Consolidation Platform?

3 Executive Summary The mobile communication world is experiencing a phenomenal transformation created by the pervasive nature of broadband and social media. With increasing number of 3G/4G/LTE deployments around the globe, mobile operators are striving to transform their existing value added services to run in a flexible environment that is cost effective, simpler to operate, scalable on demand, and future proof for migration to next generation network architectures. With recent advances in hardware and computing technologies, virtualized environments and new deployment models and network architectures such as cloud, NFV, SDN has created opportunities for the consolidation of multiple services on a single platform. VAS Market Trends With the slowdown of Global Mobile VAS and messaging revenues, communication service providers are given a strong signal that they will have to find new tools and creative ways to offer new types of services leveraging existing investments in VAS and messaging legacy infrastructure. According to industry analyst firm Ovum, revenues from global mobile VAS solutions will grow at a reduced rate between 2010 and Europe in particular will be hardest hit, with revenues experiencing a negative CAGR of -7% Figure 1 -Mobile value added services revenue is set to fall -7 per cent in Europe until

4 Similarly for messaging revenues, according to Portio Research, due to declining SMS tariffs, unlimited SMS bundle packs and the growing popularity of OTT messaging services, SMS revenue will continue along a downward trend from 2015 onwards. As shown in forecasts below, SMS revenue is forecasted to decline gradually to USD 227 billion in Figure 2 - Mobile Messaging Revenues Telco messaging is in danger of becoming niche with market analysts forecasting gradual revenue decline and lower ARPU as SMS moves to data. Analysys Mason is predicting more than 25% ARPU decline by 2018 in Western Europe. 4

5 Figure 3 Messaging Volumes & ARPU on SmartPhones (Source: Analysys Mason) This is all bad news for operators who have invested in VAS solutions to help offset revenue decline in traditional voice services. These investments have been based on the expectation that users will pay incremental fees for additional and attractive services. While the number of global mobile subscribers and messaging traffic are still increasing, revenues from VAS and messaging services are decreasing since mobile operators are increasingly confronted by strong competition from OTT providers offering richer content and services for free. The good news is that Mobile VAS and messaging services will continue to generate revenues and subscribers are expected to use these services in the long run. But to make it sustainable in the long run for revenue generation, carriers should consolidate their VAS and messaging services in a common platform to deliver these services in an efficient, flexible and cost effective manner. In summary, mobile operators cannot possibly keep competing on the same terms and with similar services. If they want to secure their future position in the VAS market, they will have to rework their legacy services and infrastructure, strategize to adopt next generation technologies as they become available and be much more efficient when delivering value added services. 5

6 VAS Challenges Faced by Operators Operators VAS networks are getting more and more convoluted as time goes by. Today s network architectures were meant for vertical Telcos. The industry direction makes them complex, costly and inflexible so widening the cost-revenue gap even further for operators. VAS services are still deemed essential by mobile operators but they will never be as profitable as they once were in legacy networks. Here are some of the obvious VAS challenges that will have to be addressed by operators: Gradual decline in VAS revenues and lower ARPU. Competitive pressures and disruptive business models of OTT players. Managing transition to new networks such as 4G/LTE and IMS Legacy services silo approach, with dedicated platforms for each service Dependencies on specialized HW, dedicated signaling and media resources, network appliances and the resulting high COGS. Disparate installation and licensing mechanisms for individual services Ever increasing Ecosystem complexity (i.e., Content providers, Partners, Social media, Enterprises, Government) Multi-vendor, multi-product configuration, provisioning complexities, operational and management inefficiencies High Operational Costs (i.e., multi-vendor legacy equipment, duplication of HW/SW resources and data repositories, high recurring costs) Typically, legacy VAS networks include a considerable amount of detailed configuration, across the network and protocol layers. New services often mean new, dedicated appliances and new vendors. All vendors have different views on management, redundancy, and scalability; hence, different approaches, architectures, implementations. Between new and old services, it s often difficult (if not impossible) to define clear interfaces, accountabilities and processes. 6

7 Key Drivers for VAS Consolidation Mobile Operators should work smarter, adapt to new (emerging) business models and become more efficient to continue to deliver value added services in a profitable manner. Some of the key drivers why mobile operators should seriously consider about VAS Consolidation are detailed in the following sections. REDUCE OPEX AND CAPEX COSTS: Mobile operators are looking to reduce costs of legacy messaging and VAS services. Eventually, subscribers and commercial services shall be transitioned from legacy to new generations of networks with the purpose of improving efficiency and resource utilization dramatically by adopting new technologies, radically reducing CAPEX and OPEX without sacrificing service quality. A consolidated platform based on a common operational environment serving as a foundation for reliable, resource-efficient service provisioning enables consolidation of multiple VAS and messaging solution. This will also eliminate recurring costs, unnecessary service & network layers and duplicated functionality which results in further decrease of operator s OPEX and CAPEX costs. SUPPORT FLEXİBLE BUSINESS MODELS: The mobile operators need to optimize, transform their business models and dynamic business network to accelerate revenues and reduce costs. They should adopt innovative and flexible business models to generate sufficient revenue from up-selling to existing and new users while reducing their operational expenses for existing legacy services. 7

8 SIMPLIFY OPERATIONS: Mobile operators are looking to simplify operations to help operations teams promptly define, provision, monitor, and bill services in convergent, multi-channel environments from a single point of administration and with well-defined integration points. With consolidated services, provisioning, configuration, portals and integration points on a common platform allows service visibility, better governance and performance. It also becomes likely to provision multiple services and service bundles all at once. Managing a smaller quantity of platforms facilitates reducing the workload of operations teams. ENABLE NEW REVENUE STREAMS & INNOVATION: Mobile operators are looking to increase revenues & subscriber numbers, introduce new capabilities more quickly; launching services faster and to be in a position to adapt them based on market reaction and customer needs. Subscribers are expecting feature rich services which are easy to use. MNO s must reduce time-tomarket for new and innovative services, enhance core offerings and offer new service bundles by exposing their assets and capabilities and simplifying integration points. Mobile operators should also invest in innovation through partners, developer communities, and API Management programs to create new attractive services that are required to work on their legacy as well as next-gen infrastructure (3G/4G/LTE). GET READY FOR THE FUTURE: Mobile operators have to get themselves ready to face the business demands of the future by investing in scalable and flexible next-gen network infrastructures. Operational efficiency and migration to Next-Gen Networks (NGN) are key drivers for consolidation. Eventually, service plane will be migrating to 4G/LTE and running on NFV/SDN infrastructure. To expand into new business areas, operators need to provide services that transcend voice and data, embrace new markets and services, such as enterprise cloud, Internet-of-Things (IoT), Big Data and Business Intelligence to create new opportunities for increasing revenue and transforming carriers IT systems from internal-supporting systems to business-enabling systems. For example, Internet-of-Things (IoT) will increase the number of connections significantly at relatively lower ARPU levels, putting increased pressure on operator margins. 8

9 Figure 4 The New Economics of Telecom Networks, Strategic Whitepaper, Alcatel Lucent Recent advances in hardware, virtualization, and cloud technologies and new networks models such as NFV/SDN created ample opportunities for consolidation of multiple products/services on a single platform. NFV uses traditional IT virtualization techniques on commodity hardware (compute, storage, and networking) to consolidate network applications onto industry high-volume servers and storage and hence allows the industry to gain from both the cost and innovation dynamics of traditional IT. NFV Adoption starts with network application running on COTS HW and virtualization. Later stages include automated elasticity (ability to scale in & out dynamically) and centralized management of infrastructure, resources, and applications. Some of the NFV business drivers are as follows Reduced CAPEX & power consumption optimization by adapting to real-time demand Shared physical infrastructure for production, test and reference facilities Simplified operations of uniform, homogenous physical platform Business agility by increasing velocity of time to market short maturation cycle, economy of scale Rapid scale up and down of service infrastructure Flexibility for on-the-fly optimization of networks and topologies to meet real-time demands Multi-tenancy support of tailored services for enterprise customers and partners Enablement of new services and new revenue streams Open ecosystem reducing risks of and agility for smaller player participation and innovation 9

10 Figure 5 NFV key business drivers (Source: Coleman Parkes Research Jan 2015 for HP) NFV/SDN provides real-time online customization services and an open platform featuring innovation and agility to achieve efficient network monetization. Highly automated and intelligent networks: centralized network control allows for network management and control in a global view and provides programmable network interfaces so that networks can provide better services. SDN enables the emerging software-based networks that allow IT to apply business logic directly and dynamically to introduce new services faster, lower management costs with less complexity, and commoditize many network functions, reducing CAPEX. SDN is an enabling technology that challenges current practices by decoupling the control plane from the data forwarding mechanisms. As operators adopt NFV/SDN, their natural expectation will be migration of their existing services portfolio on to their new environment. Hence, it is of paramount importance for VAS vendors to become VNF suppliers at the time of such network transformation. 10

11 CONSOLIDATE RESOURCES: VAS networks of operators are getting more and more complicated every day. This makes them hard to manage, costly, and inflexible; thus, widening the cost-revenue gap even further for operators. Networks are populated with a large and increasing variety of proprietary hardware components and services from different vendors. The existing service silo approach with dedicated systems for each service is not efficient since each separate system requires integration, configuration and maintenance, as well as separate physical compute/storage/network resources. VAS networks require lots of detailed configuration, across the network and protocol layers. Figure 6 Silo vs. Consolidated Approach 11

12 New services often mean new, dedicated appliances and new vendors. Vendors have different ideas on management, redundancy, capacity. Between new and old services, it s often hard to define the clear interfaces, accountabilities and process. That s why mobile operators need to change the way they operate, manage these services and move away from fragmented, silo approaches to deploying islands of Value Added Service (VAS) platforms and applications and replace these with a single, converged solution. 12

13 Why CanVAS Consolidation Platform? Telenity's CanVAS Consolidation platform is the end product of its rich set of commercial offerings in messaging, VAS, location and service delivery domains and 10+ years of experience in deploying these solutions in tier-1 and tier-2 mobile networks globally. CanVAS Consolidation platform is based on a common operation environment that serves as a foundation for modular, flexible and resource-efficient framework that enables the consolidation of multiple VAS and messaging solution. The solution provides the following features: COMMON PROVISIONING: Common Provisioning of CanVAS Consolidation platform comprises a centralized and flexible data repository that is designed to store various categories of service provider, service, and subscriber data used across individual Messaging and Value Added Services. All such data is provisioned in a common place and propagated to different services from there - eliminating the need for provisioning of services on an individual and independent basis - to reduce overall complexity, potential errors and redundant operational activities. UNIFIED OPERATIONS AND ADMINISTRATON: Common Management and Configuration framework provides easy and flexible administration, operation, configuration and performance monitoring of a wide range of Telenity s Messaging and Value Added Services. With a robust set of unified provisioning, configuration, maintenance interfaces and portals that are common to all messaging and VAS services; and an orchestration layer that enables simple service deployments, updates and activations. Consolidated, simplified operations, administration and maintenance activities will reduce the effort needed to manage the wide range of value added services and will make it easier for one person to operate several services. Resources that are shared by several services can also be 13

14 configured once to affect all nodes. Similarly, common diagnostics and performance monitoring frameworks provide an end-to-end view of the consolidated system to simplify supervision. Additionally, Telenity's CanVAS Consolidation platform provides single package software installation, easy configuration, upgrade and release management of Messaging and VAS solutions which eliminates overall software management and upgrade complexity. CONSOLIDATED REPORTING, ALARMS & KPIs: Telenity's CanVAS Consolidation platform provides a consolidated and rich set of reports that are useful to gain considerable insight into service metrics, traffic information and to observe system health for all messaging and VAS solutions. These reports can be used by administrative groups or marketing department. All reporting data is kept in one central database allowing further analysis of the source data using statistics and analytics tools. All statistics information, KPIs, HW and SW alarms are consolidated with a common view. Alarms are sorted out according to their types and severity levels as well as their occurrence patterns. SIMPLIFIED INTEGRATION: Telenity's CanVAS Consolidation platform supports the consolidation of interfaces for simplified integration and decreased network complexity. Integration towards systems such as the mobile network, OSS, charging/billing, CRM, DWH systems can be made only once for all services on the platform, considerably decreasing the amount of configuration within internal and against external systems. Consolidated network integration cuts overall costs in system deployment and operation while decreasing the time-to-market for new services. 14

15 FLEXIBLE LICENSING: Flexible licensing allows customers to use and share from a license pool for a designated set of products/services. Customers can change the allocation of product licenses depending on usage or certain (customer specified) dates without exceeding total unified license. RESOURCE SHARING: All Telenity products can be deployed on a shared hardware and network resources with the common, modular and reusable software framework base. Maximum optimization for network resources utilization: provides a unified hardware platform and achieves flexible sharing of computing/storage/networking resources to improve resource utilization, lower hardware costs, and increase network service upgrade and provisioning efficiency. NFV READY ARCHITECTURE: CanVAS Consolidation platform enables a bottom-up transformation of mobile operator services, building on top of a virtualized hardware infrastructure that utilizes common off-the-shelf (COTS) components, and shared industry-standard media and signaling servers, eliminating dependencies on specialized network appliances. CanVAS Consolidation platform delivers a flexible and costeffective environment that is based on NFV ready design approach. 15

16 In Summary, Telenity's CanVAS Consolidation platform provides all the business, network and operational transformation needs of a network operator. Some of the key benefits of the CanVAS Consolidation platform are as follows: Provides better utilization of datacenter space and improved power consumption through Virtualization & HW Consolidation Improves flexibility in scaling service capacity up and down Optimizes shared usage of all HW/SW resources including Signaling and Media Simplifies Integration considerably and optimizes daily operations Provides configuration driven integration of Operations and Maintenance functions (Billing, Provisioning, OA&M, NMS, Reporting, DB and GUI) Protected with policy managed user & application interfaces for robust operation Employs Shared Common Licensing mechanism for resources and services Enables single package SW installation, easy configuration, upgrade and release management of Messaging and VAS solutions. Figure 7 CanVAS Consolidation Transformation 16

17 About Telenity Telenity is a leading provider of next generation converged services and applications for communications networks. Telenity's market ready software solutions include: integrated advanced messaging (SMS, MMS, USSD) applications, innovative value added services and reusable service delivery components (messaging gateway, 3rd party access gateway and location gateways) enabling rapid service creation and deployment. Headquartered in USA, Telenity's worldwide customer base includes network operators, service providers and application providers serving over 600 million customers. Telenity partners with global and regional network equipment providers, system integrators and computing platform manufacturers. Learn more about Telenity's Canvas family of converged services solutions at. 17

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