Helping telcos climb the value chain

MANILA, Philippines—Telecom infrastructure and services provider Ericsson sees the world turning into one big networked society in 10 to 20 years, and it is gearing itself up to take the lead in the realization of this vision.

Ericsson president and CEO Hans Vestberg, in a briefing at the Mobile World Congress held recently in Barcelona, said three elements were coming together as the foundation for a networked society—mobility, broadband and the cloud.

Keeping ahead in the game, the Swedish company came out with the initial batch of what would be a series of offerings that would ensure that, according to Vestberg, “everything that will benefit from being connected will be connected.”

As announced at the MWC, the company is making available the following technology and services: The Ericsson Device Connection Platform; antenna integrated radio; the IP networking portfolio and the PC as a Service solution.

More than anything else, according to Ericsson officials, these offerings address the predicament of other key players in the industry, Ericsson’s main partners, the telecom companies.

‘Monetizing’ the networks

With their thinning bottom lines and eroding revenues from fixed and mobile voice business, the telcos—including the Philippines’ Globe Telecom and Smart Communications Inc.—may not have enough reasons and capability to invest more in infrastructure upgrading needed to realize the vision of a networked society.

“The network is the make-or-break part of the equation. Without the network, there will be no connected world,” Vestberg said.

He said Ericsson’s new technology, services and concepts would help the operators “monetize” their networks.

He said the Ericsson Device Connection Platform, for instance, would help operators quickly and easily launch machine-to-machine solutions, while the antenna integrated radio would be the stepping stone toward a heterogeneous network, which would enable telcos to become more efficient, particularly in serving smaller areas.

The PC as a Service Solution, which Ericsson is making available in partnership with Novartium of India, will allow operators to bundle software in the cloud, on top of mobile broadband subscriptions for consumers.

It uses cloud-based operating systems, removing the complexities of virus protection, software upgrades.

A strategic alliance between Ericsson and Akamai Technologies Inc. would provide the market mobile cloud acceleration solutions aimed at improving end-user Internet experience. It will provide opportunities to both operators and content providers by creating business models built around quality of experience and premium services.

Through these products and services—which showcase the power combination of mobility, broadband and the cloud—Ericsson will help operators “monetize” their networks and enable them to go up the value chain, according to Arun Bansal, head of Ericsson South East Asia and Oceania.

New revenue streams

“We will help the operators earn a little bit more by providing them the opportunity to both create new revenue streams and lower their operating expenses and costs of content delivery through improved efficiency,” Bansal said in an interview in Barcelona.

Additional revenue, according to Bansal, will largely come not from the end-users but more from the content providers, and the businesses that will make more money with the use of telco services.

Bansal said Ericsson had put importance on the “monetization” of the network assets as it recognized the current trend where operators who had invested billions of dollars in putting all the infrastructure and network “are losing in the value chain.”

“They can only be part of the value chain if they provide a meaningful user experience, the functionality and efficient services to their customers. That’s where we are coming in. We help them add value to their offerings so they can expect a little more from their networks,” he said.

Network upgrade

All the four new technology and services unveiled by Ericsson at the MWC are expected to work well in the Philippines, said Ericsson country manager for the Philippines and Pacific Islands Rajendra Pangrekar.

“We see the machine-to-machine, or the Ericsson Device Connection Platform, highly applicable in the Philippines, given the need to connect its more than 7,000 islands. It will bring a lot of efficiency to SME operations,” Pangrekar said.

It is this platform that paves the way for Ericsson’s Mobile Money Services offering, the one service closest to the hearts of many Filipinos, which promises to make the process of transferring money to and from any part of the globe more convenient, efficient, faster and cheaper.

These are some of the technology and services that can help boost Philippine telcos’ revenues. “If we look at the Philippines now, voice and data traffic had grown three to five times in the last 18 months, but the telcos’ revenues did not grow proportionately,” he said.

However, Pangrekar and Bansal said Philippine telcos need to invest further in upgrading their networks for them to keep up with rising demand and widening array of services and applications that could put more values to their networks.