MWD12 – historical trends are no guarantee of future performance

MWD12 – historical trends are no guarantee of future performance
Dominic Smith looks back on a busy week at Management World 2012 (MWD12), the TM Forum’s flagship event for the BSS / OSS industry, and picks out the main themes and takeaways from the keynote presentations.

This was the second year for the TM Forum to host its annual Management World event in Dublin, and after the wild Irish weather of 2011, the contrast could not have been more extreme with Dublin and the River Liffey bathed in sunshine, and the Wicklow Mountains making a stunning backdrop to a key event for the Telecoms industry.

When the weather is fine, it can sometimes be a challenge for event organisers to keep their delegates inside, however this is not a problem for the TM Forum. With a packed conference programme covering five main streams:

• Delivering & Monetizing New Services
• Policy & Revenue Management
• The Connected Customer Experience
• Profiting from Cloud Services
• Reducing Operations Costs & IT Risk

…plus a bustling exhibition hall, and the ever popular Catalyst Project demonstrations in ‘forumville’, there was plenty on offer to keep the delegates, VIPs and media busy over the three day programme.

First up on Day 1, delegates were treated to a glimpse of the future, as TM Forum chairman, Keith Willetts, unveiled his vision in the keynote speech ‘Unzipping the Digital World’. Cynics in the audience may have seen this as purely promotion for his new book of the same name, however it really set the agenda for the rest of the conference, describing how the ‘Digital Tornado’ is disrupting the old order and creating a completely new landscape where the traditional ‘phone company’ will effectively disappear. A sure fire way to get the delegates’ attention!

Willetts described how business models within the industry have largely remained static for decades, but the combination of smarter devices, more applications and faster networks, has whipped up a storm which is getting faster and faster, and CSPs must radically transform their businesses in order to ‘thrive and survive’. Time is of the essence, and service providers need to become partnership-centric, customer-centric and information-centric all at the same time – which all sounds rather easier said than done!

A liberal sprinkling of soundbites including the concept of an ‘egg-shaped market’ – where there are a small number of infrastructure providers / networks; a large and growing number of products, services and applications on offer; and a small number of effective routes to market (app stores); made for an interesting and entertaining view of the challenges CSPs have in remaining relevant in the digital value chain.

After the stark warnings for the industry from the TM Forum chairman, the follow-on panel discussion brought proceedings back to earth with a bump, as Heavy Reading’s Graham Finnie observed that we’ve all heard that the ‘sky’s falling in’ before, so why is this time any different? The other panellists from JP Morgan and Liberum Capital, offered that the investment community will continue to support the industry with investments where they see growth. However, the challenge appears to be how CSPs can convince the markets of their long term vision when the industry is moving so fast.

This was perhaps best summed up by Keith Willetts with the clichéd investment advice: Historical trends are no guarantee of future performance. Industry beware!
The keynotes on Day 2 kicked off with a fascinating insight into the strategy of Telekom Malaysia (TM), as its Group CEO, Dato' Sri Zamzamzairani Mohd Isa, described how their mobile and international businesses had been demerged in 2008, leaving TM only focused on fixed line and broadband services. As he put it, they lost half their revenues but retained 90% of the cost!

Since this unusual separation – divesting or demerging mobile assets would be the last thing most incumbent CSPs would want to do – TM has embarked on a significant investment programme in high-speed broadband (HSBB) brought together in a Public-Private Partnership (PPP) with the Malaysian government. This ambitious programme is not only rolling out new fibre infrastructure to the population, but also being used to consolidate from more than 350 IT systems to just 70 in a five year period. And TM is already reaping the rewards having rolled out an end-to-end IPTV service in just 5 months.

Central to the success of this programme has been TM’s strategy for working with their vendors – it’s about genuine partnerships and not just getting the best price from a ‘supplier’. But the key message was really how TM has retrained more than 20,000 staff and transformed the whole culture of the company – technology will only get you so far, after that you need the people and processes to make it happen.

The theme of partnerships was also echoed in the following Executive Panel session, when representatives from Google, Microsoft and Voxygen debated the challenges of working with CSPs, and tried to address the telling question of why over-the-top (OTT) providers should want to work with the CSPs anyway? Whilst the industry heavyweights touted the usual CSP strengths in terms of their infrastructure assets without which OTT services could not exist, it was Voxygen’s CEO, Dean Elwood, who brought most light to the subject.

Despite all the negative press CSPs get for their customer satisfaction ratings, customers do actually trust their communications provider, and this is something of great value to the long-tail of application / content providers trying to get a piece of the action. Elwood also observed that mobile CSPs ‘own’ the singularly most valuable and personal piece of information about the subscriber – their mobile telephone number. A lesson in value for all CSPs when looking to negotiate with potential OTT partners.

So what are the 3 key messages I came away with from Dublin? 

Firstly, CSPs need the freedom to innovate – OTT providers operate in a much more dynamic environment where it is acceptable to move fast, fail fast and learn fast. CSPs don't need grand visions and over-elaborate plans, just an appropriate structure and culture that supports and encourages their people’s creativity.

Secondly, partnerships are critical for future success – CSPs can’t do everything themselves and trying to compete head-on with unregulated over-the-top service providers will only result in failure. CSPs need to decide on their core competencies and focus on the value they can bring to a CSP-OTT partnership.
And finally, with the arrival of ‘Big Data’ the next big challenge for CSPs is how to turn this into information of big value? I’ll leave you to ponder that one for now…

So that’s it for Management World 2012, and after 2 years in Dublin the event will return to its former home of Nice on the Cote d’Azur for next year. When this was announced in the main auditorium I was somewhat dismayed to hear clapping and cheering from some parts of the main auditorium! As much as I like the typical climate in the south of France, Ireland has many other charms on offer, not least the friendliness of the people and the local culture – where else would you find senior Telecom execs being encouraged to join in with their own version of Riverdance?! And as it happens whilst the sun was shining in Dublin, Nice was apparently wet and windy. Remember, historical trends are no guarantee of future performance.