logo_header
  • Topics
  • Research & Analysis
  • Features & Opinion
  • Webinars & Podcasts
  • Videos
  • Dtw

Collaboration opens up new service opportunities in Asia-Pacific

Sami Luukkonen, Managing Partner of Telco+ at NCS, Singtel's services arm, discusses how telcos in Asia-Pacific are collaborating on service development and digitally transforming their OSS/BSS systems.

Joanne TaaffeJoanne Taaffe
16 Jan 2023
Collaboration opens up new service opportunities in Asia-Pacific

Collaboration opens up new service opportunities in Asia-Pacific

Just as telcos’ business strategies, market conditions, operational structures and workforces differ, so do their approaches to digital transformation. Singtel’s answer has been to create Telco+, which sits within its technology services arm, NCS, and helps Singtel, Optus and its associated service providers become digital companies with telco assets. Now Telco+ is taking its know-how to other communications service providers (CSPs) in the region, as its Managing Partner, Sami Luukkonen, explains.

sami luukkonen

Luukkonen joined Singtel’s Telco+ from Accenture in July 2021. The initial aim was to “develop solutions with Singtel and Optus, which we then roll out to associates – Globe in the Philippines; AIS in Thailand; Telkomsel in Indonesia and Bharti Airtel in India.” However, “we very rapidly expanded to [companies in] the Bridge Alliance, and we are now in 15 countries,” he says. The Bridge Alliance brings together 34 telcos in Asia and the Middle East, including Singtel, to collaborate on service coverage. Its members face time-to-market and revenue growth challenges familiar to many telcos the world over.

“When you compare today to when 4G launched, the average Bridge Alliance telco’s EBIT has dropped 73% and ARPU 76%,” says Luukkonen. And “within the Bridge Alliance the average time to launch a new service from idea to production is 18 months. At that rate you're not able to survive.”

A vehicle for integration

Telco+’s focus on transforming Singtel and Optus and associated operators differs from the rest of NCS, which provides IT services to government agencies and vertical sectors such as manufacturing. But being part of NCS gives it a vehicle to provide integration to other communications service providers (CSPs), while drawing on solutions developed within Singtel and Optus.

The greatest demand for Telco+ services has come “from markets outside Singapore and Australia. We are focusing on telcos with a very large number of prepaid subscribers and very little ARPU…where affordability and ways of working are very, very different to European or US telcos,” says Luukkonen. “[Typically], these guys in Indonesia or Bangladesh are very, very agile in their business mentality and are moving to the digico and netco [model] much faster. They test an idea very quickly to see whether it scales and if it doesn’t, they kill it.”

Telco+ revenues come principally from providing business and operational support system (BSS/OSS) solutions. “We own all of the IP for the goodies we have been building in Singtel or Optus and it’s easy for us to replicate solutions across other telcos,” says Luukkonen.

But it also facilitates “a kind of trading of individual services we’re all separately developing”, says Luukkonen.

One of the major obstacles for the telecoms industry, says Luukkonen, is that “nobody's really solved the big monetization problem yet. 5G B2B use cases are still not scaling to the point of telcos being able to monetize them.” One exception, he says, is China, where 5G use is widespread due to government intervention to drive adoption.

“The Chinese have been able to monetize 5G. Now they're making money, but they have tens of thousands of installations. It’s at a massive scale before it works.” And even then, China’s experience shows that much of the revenue “during the use phase goes to software, cloud and integration providers. So, it's a challenge.”

Nonetheless, Luukkonen believes CSPs can help each other find new revenue streams by exchanging successful services and platforms. Singtel for example, has struck an agreement with SK Telecom to develop its metaverse business across Asia, with Singtel sharing its pan-regional business and technology expertise, and SKT providing the experience and insights gained from running ifland, in Korea.

Telco+ has also helped Korea Telecom find a new market for an AI call center solution it developed for small businesses such as barbershops or restaurants. “One of the biggest problems for very small businesses is they can't answer the phone to take reservations, so the AI tool takes the booking and provides a script of the conversation,” explains Luukkonen. “When we saw it in Korea Telecom, we thought this is what they need in the Philippines [where many businesses are small] and we connected KT and Globe.” Korea Telecom is able to recover its application development costs from licensing the service, while Telco+ gains from integration work, explains Luukkonen.

Another example is Globe’s G Cash banking, remittance and insurance services, which having been developed for the Filipino market are now being used by Telkomsel in Indonesia, and Maxis in Malaysia. Again in Indonesia, Telco+ has developed a solution to maximize individual base station revenue which Luukkonen sees being applicable to other markets in the region. “If there's a low usage at certain times on a cell site, we can run micro campaigns and say for five rupees you're able to have all you can eat on social media in that location.” And it also helped Telkomsel develop an application to measure road reliability, using sensors in trucks that gauge how much the vehicle shakes as it travels on rural roads, which is now finding a home in Vietnam[JT1] . “The cells tell you the location. Telkomsel sells it to logistics companies who do route planning and now we have really good statistics on the reliability of the roads.”

When it comes to 5G-specific applications, Telco+ is working to provide partners with direct access to network components. One service it is developing allows gamers to rent a 5G slice for short periods directly from their phone. “We give the gaming platform access to the network so that they do the slicing, and we then charge the gaming company per second for access.”

Using OSS/BSS to drive transformation

Putting telcos in touch with each other to exchange services doesn’t provide income, but it does support Telco+’s wider goal of providing OSS/BSS solutions that drive digital transformation. “We've been heavily decoupling [the BSS architecture] and that's something that they desperately need,” says Luukonnen.

“Everyone has the same problem: when they introduce a new service, they need to test the whole thing because it's all interconnected…in a monolithic stack developed over the last 15 years,” he explains. In Singtel “we’ve been cutting the customer experience layer away to get speed on service interaction, and then below the BSS we are separating the correct catalog, the customer information, then we are separating the network, and the OSS from the BSS.” For example, he says “we’ve created a near real time data environment so if your AppOps goes down … your smartflow applications … still work.”

Telco+ takes a piecemeal approach to upgrading OSS/BSS systems in part because of the financial obstacles of a wholesale OSS/BSS replacement. “The challenge for many telcos is they still have not amortized fully their 4G rollout, and now they're paying 5G,” says Luukkonen. “There’s also so much sunk cost in OSS/BSS that is still being amortized and if they replace the whole stack some will have to go to the market with write-offs.” Meanwhile postponing the creation of digital back-end systems that improve service agility and customer experience is not an option: “You have to keep moving not to get killed.”

Join Sami Luukkonen at DTW Asia 14-16 March, where he is discussing 'Unlocking growth in the 5G economy'.