.gif)
BUSINESS TRANSFORMATION IN C&E EUROPE - New Models
Eastern European telecoms is poised to enter a new phase. The big mobile players that dominate the region’s telecoms markets are eager to transform their business models. With their 
networks mostly built-out and their subscriber numbers built-up to saturation point, they’re turning their attention to developing the subscribers they have - by introducing new services and more refined customer and financial management. And they’re looking to expand their operations into new territories. It may sound like a straightforward next step, but it requires major technological and human re-engineering and it will drive the market in the region.
To assist this transition, not just for the region’s big three operators - but for all the players, the TM Forum and telecom and technology consultants Ernst and Young are staging their latest Tele|Evo (Telecoms Evolution) event in Moscow (October 8 - 11, 2007). The underlying theme of the conference is telecom business transformation. Attendees will gain an understanding of evolving telecom business models: why they’re changing and how all players - operators, vendors, specialist service providers, integrators - can best adapt and meet the management challenges that will be thrown up by the process. This TeleEvo event couldn’t have come at a better time. Mobile has been a huge success in Eastern Europe (Russia, CIS and the former Warsaw Pact block). So much so that in many territories across the region the rapid growth phase of that market is well and truly over. With mobile penetration rates now at over 100 per cent in some markets, mobile companies now have to find new ways to drive revenue growth. That means that instead of finding new subscribers, operators are concentrating on keeping the customers they have in increasingly competitive conditions and generating more revenue from them by offering new services and packages. “In the past the operators have been very network-centric,” says Ilya Kuznetsov, Telecom Advisory Director at consultants’ Ernst & Young and Regional Business Development Manager for Russia, CIS, and Eastern Europe for the TeleManagement Forum. “They have been competing for licenses, developing their networks over very large territories, and generally marketing their brands. So up to now their approach has generally been to say: ‘OK, we have a network, we’re going to invest in new technologies such as EDGE, then we’re going to understand what we can do with it from a services perspective, then we’re going to try and find a way of targeting it at customers’. That approach won’t work any more.” Instead, says Kuznestsov, players understand that in a saturated market they have to take a customer, rather than network or technology-centric, view of their businesses. “This requires changes to their traditional business models,” adds Kuznestsov. “The market landscape in Eastern Europe has different sub-markets in contrast to the European market which now seems much more integrated,” explains Kuznestov. “This environment should now be focused on new offerings: converged offerings, content-based offerings. It’s about getting more revenues from the existing customer base." One of the most remarkable features of the Central and Eastern European telecom markets has been the sustained growth of GSM mobile. In Russia, for instance, the ‘big three’ GSM mobile operators - MTS, VimpelCom and MegaFon, which together account for over 132 million subscribers - have helped Russia achieve a 108 per cent penetration rate in mobile. “The ‘big three’ are positioning themselves right now as CIS-wide operators and they are covering around 85 to 90 per cent of the CIS territory,” says Kuznestsov. “These companies are very strong players in the field: they are generating good cash flow and they have enthusiastic, aggressive investors and holding companies behind them. They are constantly looking to expand their business operations - not necessarily within Eastern Europe - but more into markets in the Mediterranean region, Middle East or in South and South-East Asia. These are markets that are not yet at saturation point, unlike countries such as the Czech Republic or Poland.
“The other focus for development is on generating more revenue from new services in the markets they have already developed. “What needs to be addressed now is that gap in the business model between the Network Layer and the Brand Layer,” points out Kuznestsov. “That’s the OSS and BSS area: do this right and you get a deeper understanding of your customers. ”Gaining that understanding is key to keeping and profiting from customers in maturing markets. “Our regional operators cover huge populations and large geographies and within that they are serving a huge number of different segments. These segments have never, so far, been understood enough by the companies to enable smooth transformation of their old business model to the new one,” he says. “Over the next 12 to 18 months there is potential for a wave of mergers and acquisitions in the telecom-related fields such as fixed/mobile convergence, content/service provisioning, telecom/media business. But before they make these big business decisions they need to define very precisely the customer segments they are going to target and what customer propositions will be developed for each of their different territories. As things currently stand not everybody has a way of defining and reaching these sub segments.” So one of the important roles of TeleEvo conference, says Kuznestosov, is to challenge the region’s operators. “We will be asking them: ‘Who are your customers and what is your business?”
TeleEvo features a slate of top speakers to help them define answers to these questions. Martin Creaner, TM Forum President, will outline the TM Forum’s vision of industry transformation and the role of its standards and frameworks in the BSS/OSS area and representatives from major players in the region, such as Alexey Nichiporenko, First Deputy CEO at mobile operator MegaFon, will also give their perspectives. Important subjects covered at the event include revenue assurance and management, telecom-oriented IT governance and compliance and interconnect billing. The importance of the customer and services experience is also explored, as are IT and operations topics such as managing multi-play products and services, and service delivery frameworks.
As TeleEvo illustrates, telecoms is no longer purely about building technology, but is much more about building strands of business.
“There is no lack of investment resources in the region," explains Kuznestoso, “but there is currently a lack of sound ideas about how to use that investment properly and within the target profit levels in the next phase of business development from a customer service point of view.” TeleEvo will provide an ideal forum to explore these issues. “The great advantage we have in our region is that we can look how these things have been done in different markets and the sorts of business models that have been deployed,” enthuses Kuznestosov. “We have to examine and understand which models might be applicable and justifiable from both a revenue and customer loyalty perspective. So TeleEvo conference is trying to bring people in - not just from Europe and North America - but from Asia and other territories, to demonstrate all the different ways of transforming the traditional telecom operator into the new customer and service centric operator."
Share this article with others
Post to del.icio.us
Printed from http://www.eurocomms.com/features/111910/BUSINESS_TRANSFORMATION_IN_C%26E_EUROPE_-_New_Models.html
Comment on this article
Skip to comments
We encourage users to analyse, comment on and even challenge European Communications's articles, including the one above - 'BUSINESS TRANSFORMATION IN C&E EUROPE - New Models'
User reviews and comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site.
Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. We will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site.