Like most companies over the past 18 months, Comptel's revenue and profitability were impacted by the global downturn. Now, the company says it is already seeing increased activity in 2010 and plans to expand its business further this year
Sami Erviö, CEO of OSS provider Comptel, talks to European Communications about how it seeks to address the challenges that are faced both by the company and its customers in 2010, and says he expects to see further consolidation of the OSS market.
EC: Sami, could you clarify to our readers how Comptel fits into the telecoms ecosystem?
Sami Erviö: Comptel is an international telecoms software company that specialises in Operations Support Systems (OSS). Our products and solutions cover the order-to-cash cycle, and enable communications service providers (CSPs) to create, deliver, control, monitor and charge for services. Our software fits between the customer-facing part of a CSP's organisation and its network. It is effectively the engine of the telecoms business, and plays a vital role both in terms of the customer experience and in delivering the CSP's strategy.
EC: So what would you say is the most popular service offering from the company at the moment?
Sami Erviö: We sell software products as well as related services and maintenance support. Our Comptel Dynamic OSS portfolio focuses on two main business areas - service fulfilment, and charging and policy control - linked together by customer-centric data repositories. Our products include service catalogue, order management, inventory, provisioning and activation, dynamic SIM management, mediation, policy control and charging. Right now, some of the hottest areas in telecoms are managing cloud services through catalogue-driven fulfilment, and personalising services with the help of policy control and charging.
EC: What would say are the main challenges that your clients face at the moment?
Sami Erviö: Comptel has more than 280 telecoms customers across 85 countries that serve around 800 million individual subscribers worldwide - that's about 12% of the world's population! Our customers face a wide range of challenges. For example, mobile operators in saturated markets are betting their futures on the success of mobile broadband, but are finding that their revenues are not growing as fast as the costs of meeting the growing demand for bandwidth. So, they are looking for new ways to control and charge for services in order to balance revenues, customer satisfaction and resource usage.
Mobile operators in developing markets are struggling to cope with growth. They need to attract and keep customers with exciting price plans, and avoid revenue leakage. They also need to automate across the board in order to achieve both efficiency and effectiveness.
Fixed operators are facing the double challenge of declining voice revenues and the growth of mobile communications. But many of our customers are now rolling out IP networks, and looking for new sources of revenue, for example, through cloud services.
EC: So what kind of problems are customers coming to you with? Can you give some specific examples?
Sami Erviö: The problems our customers and prospects come to us with are very much related to their business ambitions. Typically, their OSS and existing infrastructure are unable to handle new, advanced services or scale to meet their growing customer bases - and cannot keep up with or properly support their business strategies. In the increasingly competitive telecoms environment, time-to-market and reliable delivery are essential for operators' revenues, and OSS should enable this, not hamper it.
Our prospects might also be spending far too much time and money on provisioning services in their networks, or they might have a huge problem with revenue leakage. Saving resources and costs is obviously crucial to them - and is something that Comptel can help with.
EC: In terms of where your customers are based, which geographic regions does your company cover? And which are the fastest-growing regions from your perspective?
Sami Erviö: Comptel is present all over the world, in Europe, North America, Latin America, Asia Pacific and the Middle East and Africa. We have offices and representations in 17 countries. The fastest-growing regions in 2009 were APAC and MEA, but Europe remains our biggest market.
EC: So as it's your biggest market, what trends would you say are specific to the European region?
Sami Erviö: Mobile broadband uptake has continued to rapidly increase, with the deployment of 3G/HSPA networks and the wide availability of devices such as smartphones and netbooks. The imminent arrival of LTE and other advanced mobile technologies will bring a step-change improvement in performance, opening up even greater opportunities for CSPs in the region. In turn, this fuels the demand for solutions, such as Comptel's combined policy control and charging offering, that help CSPs differentiate while managing resource usages.
EC: In your experience, what products and services would you say are proving popular with, and sometimes essential for, service providers in this region?
Sami Erviö: Comptel has had success across our whole portfolio of solutions in the region, including network inventory, mediation, charging, provisioning and activation. We have recently experienced a great deal of interest in our policy control-based offerings, particularly when it comes to roaming cost control, as the European Union's new data roaming regulations took effect from 1 July. That interest in policy control is expected to increase even further, as CSPs look to differentiate through personalisation of their services on the one hand, and manage bandwidth and ensure fair usage to all users on the other.
EC: So who are your main customers in Europe and what are the main challenges that they face in this region?
Sami Erviö: Our largest customers in the region include O2, T-Mobile, Vodafone, Telenor and TeliaSonera. In terms of the challenges they face, these are fairly typical of any CSPs in Europe; for example, how can they continue to grow in a saturated market?
EC: It is certainly a difficult time for operators right now as they seek to grow their revenue from existing and new services. But aside from your customers, what are the main issues you face as a company?
Sami Erviö: Comptel operates in a very competitive environment. We face competition from very large global organisations, but also from small (often local) software developers. In some cases, we also face competition from our customers' own IT departments. We are focused on bringing our expertise closer to our customers and being nimble in our solution development, while keeping an eye on costs. So, for example, we opened a customer service centre in Bulgaria and expanded our development capabilities in Malaysia last year.
EC: What particular obstacles does Comptel face in the European region, and how much was your business affected by the economic downturn in Europe last year? How do you expect 2010 to develop, and how do you think the company will perform over the coming year?
Sami Erviö: The economic downturn brought a lot of uncertainty into the telecoms software market. Many of our customers and prospects adopted a "wait and see" approach at the end of 2008. That affected our revenue and profitability in Europe and the Americas, but our MEA and APAC operations continued to perform well. Comptel is lucky to have a comparatively large, global customer base, which helped us to weather tough economic situations like last year. We have already seen increased activity since the start of the year and remain positive about the rest of 2010. Europe, along with North America, was greatly affected by the economic downturn last year, and that had quite an impact on our revenue. But, we have seen the return of confidence this year, and are feeling quite positive about Comptel's prospects going forward.
EC: So what plans do you have to ensure continued good business development?
Sami Erviö: We are obviously always looking to grow our business and have a strategy that is designed to deliver this. Firstly, we want to get closer to customers and offer OSS expertise through new business models. We have restructured the company to give more autonomy to our regional organisations. Secondly, we are working more closely with global and local partners who often have close relationships with our prospects. Finally, we are continuing to develop our Comptel Dynamic OSS suite, to deliver increased value for money to our customers.
EC: Is Comptel looking to move into any new business areas? What new products and services are in the pipeline?
Sami Erviö: Our expertise clearly lies in OSS, and we intend to stick to this. But, there is plenty to do in OSS. For example, over the past year or so, we've introduced new solutions centred on policy control in combination with charging; Comptel sees this area becoming even more important with the move towards LTE/4G. We also launched a solution for managing the allocation of numbers dynamically to SIM cards, which is a way for mobile operators to dramatically reduce the costs associated with SIM management, while increasing personalisation for their end customers. In parallel, we've begun to explore how the Comptel Dynamic OSS suite of solutions can help make cloud services possible - and profitable - for CSPs.
EC: Given the recent economic challenges on the global market, what do you expect to happen to the telecoms software sector generally over the next 12-24 months?
Sami Erviö: Comptel expects to see continued growth as well as some additional consolidation in the telecoms software sector. Operators are looking to invest in OSS - the growth of fixed and mobile broadband services, in particular, is a major driver for that investment. But, they are also looking to reduce the number of suppliers they are dealing with, not least because of the complexity and costs associated with integrating multi-vendor solutions. Clearly, this favours vendors such as Comptel that offer a portfolio of solutions. This trend will no doubt result in many smaller, "one solution" vendors being acquired or disappearing altogether in the near future.