AS TELECOM COMPANIES realise that their networks can be used for a lot more than voice telephony, they are moving into new services to drive growth. Analysts say that with the rise in data consumption, more and more companies will opt for global mergers and acquisitions. But what’s between M&As and troubleshooting? One, ensuring uninterrupted and efficient service in spite of traffic surge. And then, offering a bunch of value-added and analytics-based services.
Which is why the two largest Indian telecom operators, Airtel and Vodafone, have spent around Rs 200 crore each in the past two years to set up state-of-the-art network operating centres (NOCs) in Gurgaon and Pune, respectively. While Vodafone’s is the biggest across its operations in 57 countries, the screen to monitor Airtel’s national network is as big as a tennis court.
Imagine the NOC as a giant control room, from where engineers monitor what’s going on across their networks and troubleshoot faults, even a power failure, at remote cellular sites. The networks are represented graphically on a large screen or video wall and detailed status are monitored on desktops. NOCs are typically 24/7 operations, carrying out software updates and coordinating with its affiliate networks.
NOCs follow a level-by-level process to tackle issues: There are several tiers manned by engineers of varying skills. In case an issue is not resolved by one tier within the deadline, the next level of expertise is called in to ensure immediate resolution. This process of escalation continues till the issue is sorted out.
Vodafone’s NOC monitors 23 markets in India and oversees services spanning IT, enterprise, and mobile. The centre resolves an average of 2.8 million issues a day. Vodafone claims that the NOC has helped it gain 20% efficiency in network operations and also reduce by 40% issues related to value-added services, caller ring-back tone, and other services.
AS DATA USAGE by mobile users is increasing rapidly, NOCs will mean a lot more for the telecom firms. Every smartphone has a unique Internet protocol address, which not only makes it traceable but also makes its operations transparent. Network engineers can see what a phone is being used for and what’s stored in its memory. In other words, telecom companies can find out what customers are doing with these phones. For instance, they will know if a YouTube video is trending in a certain geography.
Prashant Singhal, global telecommunications leader at consulting firm EY, says that voice calls account for 40% to 50% of a telecom company’s revenue. The rest comes from new business that these firms think up.
In Britain, for example, British Telecom provides IT solutions to its customers. It sets up local area networks or wide area networks for corporate customers and manages those. In the U.S., AT&T acquired Direct TV to pipe entertainment content to its customers. In Africa, Vodafone’s biggest success is m-pesa, a mobile payment solution, which it has also launched in India.
Telecom players in Asia have been investing in firms that can expand their scope of business to put their networks to better use. In August 2014, Australia-based Telstra Corp bought 75% in U.S.-based online video platform provider Ooyala. The latest quarterly edition of EY’s Inside Telecommunications listed more than half-a-dozen deals in Asia between July and September 2014.
Singhal says that Indian telecom companies have so far focussed only on bringing their costs down—either for cell sites or calls. They haven’t ventured into acquisitions in adjacencies (new services) but he expects that to change in 2015. “After spectrum auction issues are sorted out in the first half of 2015, telecom companies will start looking at innovative ways of growing their business,” says Singhal.
An Airtel executive who asked not to be named said revenue from value-added services had become negligible and the company would have to engage clients in a different way by offering them what they want. Airtel has started Wynk, its music download programme, while Vodafone is focussing on growing its enterprise business in a big way, including bundling security services to its corporate clients.
Singhal says telecom companies will lose their premium valuation if they don’t innovate. “They will end up as mere infrastructure companies.”