Business intelligence for the global carrier industry

Big interview
Verizons new president of global
wholesale Eric Cevis
ITW 2014 review
The defining moments from this
years event
VOL 14 ISSUE 4 JUNE/JULY 2014
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Carriers
driving
in the
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with Enterprise Cloud from Verizon Global Wholesale. Your customers will enjoy secure access to an extremely reliable
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CONTENTS
Capacity magazine
ON THE COVER
Why has Formula
One become a
big opportunity
for carriers? See inside
Latency special report.
NEWS & ANALYSIS
04 VODAFONE PUTS M2M
IN THE FAST LANE
CARRIERS AND VENDORS
RAMP UP CYBERSECURITY
INVESTMENT
05 LEVEL 3 REVEALS EMEA
EXPANSION STRATEGY
SPECTRUM AUCTIONS
SHOULD STAY
VERIZON EXPANDS
CDN REACH
06 EUROPE
08 NORTH AMERICA
11 ASIA-PACIFIC
12 AFRICA & MIDDLE EAST
13 LATAM
15 LEVEL 3 MAKES ITS
BIGGEST MOVE YET
STRATEGIES
16 THE BIG INTERVIEW
Eric Cevis, Verizons new president
of global wholesale
19 MARKET STRATEGY
The global growth of MVNOs is
bringing fresh opportunities for
carriers to oer MVNE services
22 COMPANY STRATEGY
Global Cloud Xchange explains how
it hopes to use cloud to capture
tomorrows digital stars
FEATURE
25 TOP 10 MOMENTS
FROM ITW 2014
Capacity loos bac at the dening
moments from this years event
DATA SECTION
29 NEED TO KNOW
Does YouTubes online video ad
model, TrueView, oer opportunity
to carriers?
31 AHEAD OF THE CURVE
siaPacics call for new rules of
carrier engagement
33 GEOGRAPHICAL FOCUS
Indonesia
35 DATA
Global internet trends
PEOPLE & DIARY
37 APPOINTMENTS
All the latest industry moves
39 CSR
AT&T shares details of its Aspire
programme, which aims to help
at-risk students remain in school
41 MARKET WATCH
Important dates in wholesale
telecoms over the coming months
THE BIG INTERVIEW
page 16
Capacity speaks
exclusively to Verizons
new president of global
wholesale, Eric Cevis
Latency
special report
after page 28
i Regulatory
controversy
v Formula One
partnerships
ix O3B executive
interview
Roaming and Voice Management Solutions
www.oculeus.com
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editors letter | 03
Management
Managing Director
Ros Irving
[email protected]
Publisher
Paul Collinson
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Editor
Alex Hawkes
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H
osted in the most football-crazed nation on earth, this years World Cup has been
big on passion, suspense and drama. The intense pressure on the tournaments stars
has also been felt on the nations networks, which handled 32 terabytes in the first
ten days of the event a figure that surpasses the entire 2010 World Cup.
Despite cynicism in the build-up to the event, the countrys networks appear to have
stood firm. A fibre-optic network, deployed by Telbras, was used to transmit HD video and
audio between the 12 football stadiums and the International Broadcast Centre (IBC) in
Rio de Janeiro, with the Brazilian incumbent reported to have ploughed approximately $40
million into infrastructure for the event. Oi meanwhile expanded the coverage and capacity
of its 2G, 3G and 4G mobile networks in the events host cities, also providing 700,000
public Wifi access points across the country.
And it was not just networks in Brazil that were put through their paces. In the UK, for
instance, EE saw a staggering 2,700% increase in usage of BBC iPlayer on its network.
Unlike the football players, networks were offered no respite at half-time, when social
media usage soared and the likes of Twitter, Instagram and WhatsApp saw usage increase by
approximately 17%.
As much of a major social media event as it is a football tournament, the traditional
sports broadcasting landscape is virtually unrecognisable from ten years ago. Power
continues to shift further into the digital world and the carrier community will continue
to react accordingly.

Alex Hawkes, Editor
[email protected]
The most social
World Cup ever
june/july 2014 capacity
04 |
A
s Vodafone continues to invest
billions across the world in its
mobile and cable TV network, its
been easy to overlook the small but signif-
cant advancements it has made to its
M2M division.
Its announcement to acquire Italian
in-car security and telematics company
Cobra Automotive Technologies for $196
million may seem miniscule compared to
the 7.2 billion it will pay for Spanish
cable operator Ono, but Vodafone claims
the tie-up will herald the creation of a new
global provider of connected car services.
Cobra provides a range of security,
telecoms and vehicle tracking services for
the automotive and insurance sectors,
with analysts tipping the sector to be the
next big developer in M2M after energy
solutions. Vodafones Will Cameron,
senior communications manager, told
Capacity that the deal confrms our
strategy of expanding our M2M capability
out beyond connectivity.
He said: We can see that with the
number of high profle manufacturers
promoting connectivity in their vehicles,
M2M is becoming embedded within the
auto industry.
Te company was keen to stress its
commitment to developing a range of new
applications in the sector, with a focus on
establishing partnerships with other
companies to support the innovations.
Research analyst frm Yankee Group
said the decision to acquire Cobra fts that
purpose entirely, considering both
companies synergistic footprints.
Cobra has operations across Brazil,
China, France, Italy, Japan, South Korea,
Spain, Switzerland and the UK.
Ryan Martin, associate analyst at
Yankee Group, said that the acquisition
gives Vodafone access to a range of
companies to add to its M2M portfolio as
a result.
Te carriers acquisition of Cobra has a
lot to do with the targets geographical
footprint, he said. Automakers such as
Audi, Bentley, Ferrari, Mercedes Benz,
Nissan, Porsche and Tesia are just a few of
the companies among the telematics
vendors customer list.
He added that the acquisition will be
tailored towards increasing Vodafones
market share in developing a suite of
engineer to engineer (E2E) services to
enable connected vehicles. Focussing on
core markets is one way the MNO may be
able to achieve this without overinvesting
or under delivering, said Martin.
Te industry and carriers on the whole
has encountered a range of issues in
developing M2M solutions, and Cameron
said it was important to take into account
the diferences that exists in innovation
between varying industries.
It is important to understand the
challenges facing each separate industry,
and to appreciate how and where M2M
and the Internet of Tings can make a
positive change, he said.
Understanding, partnership and
delivery will form an ideal foundation for
developing in this area.
C
arriers and vendors in the market
have conceded to the growing
threat of cyber-attacks as the
industry begins to plough billions to
counter the problem.
Numerous operators, including Orange,
BT, Telefnica, Cisco, Alcatel-Lucent and
Nokia have made plays by either acquiring
or striking partnerships in the space, as
malicious threats to networks become
commonplace in the market.
According to data from SNS research,
global spending on mobile device and
network security infrastructure, software
and services will reach $11 billion by the
end of 2014. And in the next six years, the
research frm estimates that this will grow
at a CAGR rate of 20%.
Operators in the market have seen the
very real threat posed by cyber-attacks,
according to analysts, and companies are
investing in ways to make their networks
more intelligent. Cybersecurity is
harnessing the latest information
technology tools, such as big data
analytics to analyse multiple logs in near
time to detect suspicious patterns and
issue early warnings of potential
incidents, said Igor Faynberg, director at
Alcatel-Lucent cloud services team.
Alcatel-Lucent is in the process of
transferring its network security assets to
cybersecurity frm Tales, with a
partnership agreement in place to allow
for the French vendor to expand its
commercial cybersecurity proposition.
Tis, in turn, allows Alcatel-Lucent to
ofers customers an end-to-end network
security solution.
Faynberg said partnerships between
carriers and cybersecurity companies will
be essential in coping against malicious
data over networks.
Tere needs to be a commitment to
build on existing public and private
initiatives to develop threat informed risk
management and mitigation
methodologies to address the most
consequential risks to critical systems,
assets and networks.
Vendors Nokia and Cisco have opted to
develop solutions within their existing
capabilities, with the Finnish vendor
running the unit under its mobile
broadband business. Te unit is designed
to develop telecoms security as a whole,
while ofering advice on processes,
partnerships and guidance for product
development. Marc Rouanne, EVP for
mobile broadband at Nokia, urged the
industry to share knowledge on security
research, with security development key as
broadband networks evolve towards the
cloud. We will continue to encourage
industry dialogue and knowledge sharing
in terms of security research.
Faynberg told Capacity that the
industry must now work towards
establishing a set of standards towards
the issue. Security is a mindset, he
said. Attention to security awareness
must be drawn at all levels.
VODAFONE PUTS M2M IN THE FAST LANE
CARRIERS AND VENDORS RAMP UP
CYBERSECURITY INVESTMENT
2013 2014 2015 2016 2017
10
20
30
40
50
60

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Source: Yankee Groups Global Media Forecast, Dec 2013
capacitymagazine.com capacity
global outlook | 05
VERIZON
EXPANDS
CDN REACH
V
erizon Digital Media Services
(VDMS) and EdgeCast have
revealed a rapid expansion strategy
that will see the CDN provider add an
additional 20 PoPs to its footprint across
major cities in the world.
Te companies began an integration
process in January after announcing
Verizons $350 million takeover of the
CDN company late last year, and they
have worked for the past six months on a
range of developments to beef up its
operations in key markets.
It is launching new PoPs in a number of
cities, including Warsaw, Stockholm,
Milan, Vienna, Melbourne, Helsinki,
Kaohsiung, Batam, Jakarta and Sao Paulo,
while expanding its presence in London,
Madrid, Paris and Amsterdam.
Once Verizon Digital Media acquired
EdgeCast network, it was important to
start serving Verizons large global
customers in addition to its extensive
customer base, said James Segil, CMO at
Verizon Digital Media Services.
As part of the expansion, Verizon
picked out its carrier neutral colocation
site in Sao Paulo, Brazil, as one of the
most important developments over the
past six months.
Its data centre, in collaboration with
Terremark, provides the company with
redundancy links across the Pacifc and
Atlantic oceans.
Brazil is one of the largest markets in
the world, said Segil. South America is
now critical for premium content
experiences, and providing a PoP has
helped to dramatically increase delivery
time and performance.
As part of the EdgeCast acquisition,
Verizon Digital Media also revealed
exclusively to Capacity that it has
completed an e-commerce solution for
online retailers, to provide fast and secure
engaging customer experiences.
A
top consultancy frm has backed
the validity of spectrum
auctions, despite Capacitys
recent Confdence Innovation and
Leadership (CIL) survey reporting that a
staggering 60% of operators were losing
faith in the process. Value Partners was
Pakistans consultancy frm of choice for
its 3G auction earlier this year and the
company completed the process in four
months following a range of delays and
failed attempts in the past.
As one of the last sizable markets
without 3G, Pakistan was in urgent
need of a spectrum auction, which had
previously been held back by regulatory
issues and protests.
Value Partners was faced with
a number of major challenges from
initial market assessment through to
auction completion.
We had to design something that
would accommodate the appetite for
3G, but also make an allowance for
[Pakistan] to move to 4G without
waiting another fve years to run another
auction, said Colin Brooks, managing
partner at Value Partners. Brooks said he
was surprised at the high percentage of
respondents that did not view auctions
as the most efective form of spectrum
distrubution.
Spectrum auctions have a chequered
history. Te 3G auctions in Europe, for
example, were thought to have played a
defning role in the 2001 telecoms crash,
which led to some 100,000 jobs being
cut in the sector in Europe. Brooks
believes, however, that despite initial
teething problems, auctions now enjoy a
better status.
In developed markets with an
optimum of three operators, there is an
alternative option to ofer spectrum at a
set price, but this doesnt allow for new
players to enter a market. Maybe theres
an evolution towards a diferent
mechanism, but I think it has to be on a
country-by-country basis, said Brooks.
He highlighted common faws in
spectrum auctions in any country,
including high prices, competitor
collusion or processes not followed
correctly. But added: Without a
spectrum auction, Id be interested to
know what the alternative is.
L
evel 3 Communications is
embarking on a network
expansion project in July across
Western Europe, the Middle East, Africa
and Eastern Europe, Capacity can
exclusively reveal.
Te company said it was focussing
largely on its enterprise customers
in key European markets, with the
view of implementing VPN and
Ethernet nodes in cities not covered
by its existing footprint.
Te network expansion will be
deployed across the wider EMEA region,
and is designed to provide connectivity
to its global customers.
Te move includes increasing density
through adding more Ethernet and
TDM local access nodes to buildings
connected in the cities.
Level 3, which last month struck a
deal to acquire tw telecom in the US
(see page 15), is making an aggressive
play across EMEA as it stakes further
claims to become established as a truly
global company. Tim Passingham, SVP
enterprise business, EMEA at Level 3,
said the network expansion across the
region is designed to make Level 3 a
more efective competitor, with EMEA
central to its global network strategy.
Our network expansion plans to
markets such as Budapest, Turkey and
South Africa refects strong growth
opportunity driven by demand for
internet and communications services in
those markets, he said.
It also shows increasing needs from
our enterprise customers headquartered
in Western Europe and globally to
connect into these growth markets.
Level 3 added that it is expanding
network depth and breadth across new
and existing markets.
Tis includes cities in Western
Europe, such as Marseille, Lyon,
Cologne and Hannover; Dubai and
Istanbul in the Middle East; African
markets such as Nairobi, Cape Town
and Johannesburg; and parts of Eastern
Europe, such as Moscow, Bucharest,
Sofa, Zagreb, Budapest and Warsaw.
LEVEL 3 REVEALS NETWORK
EXPANSION ACROSS EMEA
SPECTRUM AUCTIONS
SHOULD STAY, SAYS EXPERT
James Segil, CMO, Verizon Digital
Media Services
june/july 2014 capacity
06 | europe
has drawn criticism from all over the
world for employing authoritarian
censorship tactics.
TELEKOM AUSTRIA
ACQUIRES BLIZOO
MACEDONIA
Telekom Austria Group has completed the
acquisition of Macedonian cable operator
blizoo Macedonia.
Te Austrian operator said the deal is
designed to add to its convergence
strategy, with blizoo ofering TV,
broadband and fxed voice services.
Telekom Austria will now ofer bundled
fxed and mobile services in the country,
which will complement the companys
convergence footprint in Austria, Bulgaria
and Croatia.
Te takeover of blizoo Macedonia
allows us to ofer the full scale of
communications services in the fourth
country within our group and is a step
forward in the execution of our successful
convergence strategy, said Hannes
Ametsreiter, CEO of Telekom Austria
Group and A1.
Telekom Austria already owns Vip
Operator in the country, with the two
companies now set to merge.
ZAYO TO ACQUIRE
GEO NETWORKS
Zayo has further solidifed its presence
in the UK after striking a deal to acquire
London dark fbre provider Geo Networks
in May.
Te deal adds over 2,100 route miles to
Zayos European network, and adds
connectivity to 587 on-net buildings.
Zayos acquisition of Geo is
predominately intended to increase the
companys presence in the UK, adding
1,800 national fbre miles and connections
to 130 data centres, telehouses and
internet exchanges.
It also provides direct access to major
cities including Manchester, Birmingham
and other commercial regions.
Geos fbre is also intended to
enable Zayo to establish a presence in
Ireland through its diverse optical fbre
subsea system.
Geos extensive fbre and conduit assets
complement our existing London
footprint and bring an increased breadth
to our UK network, said Dan Caruso,
CEO at Zayo.
Additionally, diverse connectivity to
Dublin is critical as it continues to develop
as an international data centre hub.
ALCATEL-LUCENT
INVESTS IN MOBILE
FRONTHAUL
TECHNOLOGY
Alcatel-Lucent has signed a partnership
with EBlink which aims to tap into the
potential of the mobile startups wireless
fronthaul solution.
Wireless fronthaul is said to represent a
major technological advance for base
station deployment, eliminating the last
few hundred metres of fbre that are so
costly for operators.
Te agreement includes a 3 million
investment in EBlink, which was founded
in France in 2005.
EBlinks wireless solutions are said to
complement Alcatel-Lucents wireless
LTE and small cell oferings, and
the move is said to strengthen Alcatel-
Lucents position in cloud RAN and
5G architecture.
For EBlink, signing this partnership
with Alcatel-Lucent reaf rms the relevance
of our technologies and will contribute to
EBlinks growth.
As part of this agreement, Alcatel-
Lucent will address new market
opportunities and distribute EBlinks
wireless fronthaul solutions to its mobile
operator customer base worldwide,
said Alain Rolland, founder and CEO
of EBlink.
TURKEY LIFTS TWO-
MONTH YOUTUBE BAN
Turkey has lifted its ban on video-sharing
website YouTube after the constitutional
court ruled the ban to be a violation of the
Turkish constitutions freedom-of-
expression clause.
Te ban was imposed in March after a
recording of a high-level security meeting
discussing war plans against neighbouring
Syria appeared on the site.
Te government had also blocked access
to social-media website Twitter on March
20, a week earlier than the YouTube ban.
Te Twitter ban was imposed following
the anonymous posting of a series of audio
recordings which suggested corruption
inside the Turkish government, but it was
lifted two weeks later.
Recent domestic uprisings in the
country have relied on social media
and prime minister Recep Tayyip Erdogan
Diverse connectivity to Dublin is
critical as it continues to develop as
an international data centre hub.
EU AND SOUTH KOREA
TO COLLABORATE ON
5G DEVELOPMENT
Te European Union and South
Korea have entered into an agreement
to work to together on the
development of 5G standards
and technology.
Te two parties will
collaborate to develop
systems, set standards
and ensure global
interoperability
through the
harmonisation of
spectrum bands.
An industry MoU
was also signed between
the EUs 5G Infrastructure
Association - members
include vendors such as Alcatel-
Lucent, Ericsson and Nokia, as well as
carriers such as Deutsche Telekom,
Orange, Telecom Italia and Telefnica
- and South Koreas 5G Forum.
Te move could help the EU leverage
South Koreas expertise in next-
generation mobile technology.
Te country is set to invest
$1.5 billion in the
deployment of a 5G
mobile network, which
is due to be
operational in 2020.
Te nation is already
home to some of the
worlds fastest internet
speeds, as well as the
frst implementation
of LTE-A.
After fnding itself
relatively left behind in the race to
4G, the EU has made clear that it
wants to adopt a leadership position
in 5G.
june/july 2014 capacity
08 | north america
the internet to underdeveloped regions.
In a statement on its website, Skybox
said: Te time is right to join a company
who can challenge us to think bigger and
bolder and who can support us in
accelerating our ambitious vision.
T-MOBILE US
REVIEWING SPECTRUM
OPTIONS
T-Mobile US is reportedly looking
at alternative options for acquiring
spectrum if its proposed merger with
Sprint falls through.
According to reports in the US,
T-Mobile is strategising to acquire
low-band spectrum from other smaller
carriers in a bid to gain access to urban
markets like New York City, where
low-band spectrum is more efective in
high-rise buildings and other built-up
areas than high-band frequencies.
T-Mobile does not have access to
low-band spectrum at the moment and
has had to operate independently in the
US market so far.
SoftBank-owned Sprint is attempting
to secure a merger with T-Mobile US in
a bid to become more competitive with
AT&T and Verizon, but the proposal
has been met by strong reservations from
US regulators.
AKAMAI CONNECTS
INTO AMS-IX NEW
YORK EXCHANGE
Internet exchange company AMS-IX
has announced that Akamai has become
the latest member partner in its New
York facility.
Te development builds on Akamais
connections into AMS-IX internet
exchanges in Amsterdam, Hong Kong
and Curacao.
AMS-IX said the move will help
Akamai optimise its services in the New
York and New Jersey area, and claims it is
Akamais frst live connection into an
Open-IX certifed exchange in New York.
It is great to welcome Akamai to
AMS-IX New York. Akamai has been a
longstanding member and customer of
AMS-IX and it is very valuable to us and
other connected parties that they are
selecting our exchange in New York/New
Jersey to expand in the US market, said
Job Witteman, CEO of AMS-IX.
Te Open-IX Association (OIX) is an
internet initiative designed to improve the
landscape of internet peering and
interconnection in the US.
TELSTRA GLOBAL
EXTENDS CLOUD
OFFERING TO US
Telstra Global has extended its cloud
infrastructure services to the US.
Te node, which will be located on
the east coast of the US, is said to
strengthen the companys virtual private
cloud solution.
It extends Telstras cloud presence to
seven locations, including the UK, Hong
Kong, Singapore and Australia.
When it comes to IT projects, we are
fnding that customers are increasingly
opting for cloud-based services and with
this expansion we are even better equipped
to serve organisations with operations in
the US - be it their long-term
headquarters or a new market they are
expanding into, said Martin Bishop, head
of network applications and services,
Telstra Global. On top of this, Telstra
Cloud Infrastructure customers can rest
assured that their applications are
delivered over one of the worlds most
extensive telecommunications networks
that extends access to over 1,900 Points-
of-Presence (PoPs), Bishop added.
In January, Telstra Global announced
the launch of four PoPs in Europe and the
US, in addition to a partnership with
Infnera to upgrade capacity on its
three cable systems.
GOOGLE TO
ACQUIRE SKYBOX
FOR $500 MILLION
Google is set to acquire satellite company
Skybox Imaging for approximately $500
million in cash.
Te deal represents Googles second
high-profle acquisition of an aerospace
company this year, and the internet giant
said it will utilise Skyboxs satellites for its
online mapping services.
Google added that Skybox technology
could eventually be used to provide
internet access for disaster relief, and the
deal builds on the companys pledge to
invest over $1 billion in satellite
communications over the next few years.
Rival internet players Google and
Facebook are investing in satellite and
drone companies to extend internet access
to untapped areas of the world.
In March, Facebook announced the
launch of a connectivity lab, designed to
develop satellites and technology to beam
Nam nonserferia exeribeaquis net
molo et ligenis sinvellibus atur
saped molupta ecaeces estio
INTEROUTE LAUNCHES
VIRTUAL DATA CENTRE
IN NEW YORK
Interoute has announced the launch of
a Virtual Data Centre (VDC) zone in
New York, as the company attempts to
expand its cloud services globally.
Te European operator will utilise
its VDC zones in London and New
York to enable Interoutes IaaS
platform customers to beneft from a
globally distributed cloud platform at
low latency. Interoute has VDC zones
in eight countries across the world,
with six in Europe, and the company
said the facilities are built into the
foundations of its MPLS and internet
backbone. European developers and
businesses with their sights set on the
US need more than just a data centre
to efectively gain a foothold there.
Tey need a networked cloud to give
them the speed and performance to
compete, said Matthew Finnie, CTO
at Interoute.
Interoutes VDC provides cloud
architecture globally, and weve
thrown in the network for free.
Opening our frst US zone is part of
Interoutes expansion beyond our
European base, following the launch
of our Hong Kong zone earlier this
year, he added.
Matthew Finnie, CTO, Interoute
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capacitymagazine.com capacity
asia-pacifc|11
SINGAPORE COULD
GAIN FOURTH TELCO
Te Singapore telecoms market looks set
for a shake-up as a fourth telco is
reportedly preparing for entry.
Te existing market comprises
SingTel, M1 and StarHub, but according
to local reports, two-year-old local
broadband services provider MyRepublic
is preparing to launch mobile services
in the country.
MyRepublic is allegedly leveraging
island-wide fbre connections for the
launch, and is budgeting up to $250
million for the frst 12-18 months to
deploy the network.
Te network is expected to be based on
4G, but the telco will need to secure
airwaves and roll out base stations before
it can ofer mobile services.
MyRepublic is expected to be welcomed
by consumers and government alike,
the latter of which has long tried to
introduce more competition into the
industry - its 4G auction in July 2013
being a prime example.
BHARTI AIRTEL SIGNS
NETWORK MERGER
AGREEMENT WITH
LOOP MOBILE
Indian operator Bharti Airtel has signed a
defnitive agreement to merge its
operations with Loop Mobile.
Te deal is designed to create Mumbais
largest mobile network, and comes after
Airtel announced a strategic plan in
February which proposed the tie-up to
cover the Mumbai service area.
Combined, the two companies will have
seven million subscribers in Mumbai, and
the transaction brings together Loop
Mobiles 2G/Edge network with Airtels
2G and 3G network.
Loop and Airtel have 2,500 cell sites
and 4,000 cell sites in Mumbai
respectively, and subscribers will have
access to a wide retail reach of over
220 outlets.
Te companies said Loop subscribers
will now have the added benefts of access
to Airtels product portfolio, including
3G, 4G, Airtel Money, VAS and
international/roaming capabilities.

LEVEL 3 LAUNCHES
VIDEO CLOUD SERVICE
IN CHINA
Level 3 Communications has expanded its
video cloud services to China through an
agreement with China Telecom Global.
Te service - which was launched in
April - combines Level 3s content
delivery, video broadcast and cloud storage
capabilities to create a more scalable,
secure and streamlined approach to global
content distribution.
Te move will provide Level 3s
customers with access to the Chinese
market, while also allowing China
Telecom Globals content customers
to distribute content and media
services globally.
As part of the agreement, CDN nodes
will initially be deployed in Hong Kong,
before being rolled out further across
the region.
China is a signifcant emerging market
for content distribution, and China
Telecom is an ideal network partner to
assist in ef cient, high-quality content
delivery across the region, said Mark
Taylor, VP of media and IP services for
Level 3.
CHUNGHWA LAUNCHES
4G SERVICE IN TAIWAN
Chunghwa Telecom announced the
launch of 4G broadband services in
Taiwan at the end of May, one month
earlier than its expected launch date
of July.
Te company claims it is the frst to
launch 4G services in the country,
following the allocation of 4G licences by
Taiwanese regulators.
A spokesperson for the company said
that the launch places Chunghwa as more
than just a telecoms company and it hopes
to advance its service ofering in the
coming months.
Chunghwas existing portfolio of
services includes voice and high-speed
internet and the company plans to extend
this to include value-added services such
as high-defnition video, high-quality
video, 3D navigation and cloud gaming.
Other winners of the 4G licences
include Far EasTone and Taiwan Mobile,
which have partnered with Ericsson and
NSN respectively for their 4G roll-outs.
Loop and Airtel have 2,500
cell sites and 4,000 cell sites in
Mumbai respectively.
TATA UPGRADES
JAMVEE UNIFIED
COMMUNICATIONS
PLATFORM
Tata Communications has launched
the latest version of its unifed
communications platform, jamvee.
Te upgrade is said to ofer
enhanced levels of interconnectivity
and interoperability over a Tier-1
global network.
Te platform aims to bring together
any client software and device on a
single platform, and is said to enable
intra and inter-company collaboration
via any combination of audio, video
or messaging and share content in
groups - across any device or through
a browser.
Delivering the ability to collaborate
easily both internally and externally
with customers and partners enables
productivity improvements for
businesses. Interoperability is key to
this, and jamvee takes this to the next
level, said John Hayduk, president
and CTO, Tata Communications.
Tata worked with technology
partners including Acano and Synergy
SKY to develop the new platform,
which includes a collaborative
workspace where virtual teams can
meet, share documents and show
video in real-time.
John Hayduk, CTO and
president, Tata Communications
june/july 2014
africa & middle east
RETRACTION:
In the article entitled Holding the key to the cloud in the April/
May edition of Capacity magazine, Capacity wrongly attributed
comments regarding a cloud security product called DefensePro
to Paul Nguyen, a spokesman for CSG Invotas.
DefensePro is in fact a Radware product, and Nguyens
comments should have been shown in relation to CSGs Security
Orchestrator software. Capacity would like to take this
opportunity to apologise to the parties involved.
Quo Vadis North American Peering?
The Internet was born in the US and settlement-free
interconnection of ISP backbones was also introduced in
the US in the post-NSFnet era. Traffic was peered in
places like MAE-East in Virginia. After that came players
like PAIX, and later Equinix and others that have since
secured successful market positions.
However, no model has even approximated the popularity
that Internet exchanges have garnered, which is a model
that developed in the mid 1990s in Europe. Very early on,
these players positioned themselves as member-driven.
On one hand, this model drove the advantage of reasonable
prices. On the other hand, the focus of this model was
solely on the operations and expansion of the exchange.
In addition, these exchanges were not only carrier-
neutral but also data center-neutral. European data center
providers like Interxion or Telecity and other leading
exchanges like DE-CIX, have cross-pollinated one
another over time. In this way, customers could always
select the best data center operator for their business,
while at the same time trusting that their favorite Internet
exchange would have a presence in the data center.
It is exactly this model that has now arrived in the U.S.
Motivated by their own clients or also by Open IX, an
association that seeks to promote exchange alternatives
in the U.S., European exchanges have begun operations in
their U.S. exchanges in the recent weeks and months. It is
interesting to see through detailed observation how these
models differ from one another. While some of the new
exchanges solely operate switches outside most carrier-
dense data centers and therefore exclude Top Dogs
like Telx or Equinix and a subsequent large number of
potential participants, other exchanges are working hard
to establish themselves in exactly these carrier-dense
data centers.
Its even more astounding that players like Equinix dont
tolerate any alternative Internet exchanges in its
locations. Its clear, however, that the distributed exchanges
that are represented in a multitude of locations are
leaking connectivity from the carrier-dense facilities to
the competitive exchanges. It appears, though, that the
industry has intentionally forgotten how well the
European peering and exchange model operates, not
only in Europe, but in the rest of the world as well. In fact,
the global Number 1, Equinix, works together with
Internet exchanges in Europe. At this point, Id like to
make an appeal to all market participants: support these
new exchanges. Give yourselves a home in the form of
affordable colocation. Connect your networks to the
exchanges. It is only carrier-neutral and data center-
neutral exchanges that will scale for the network of
tomorrow. They are the last opportunity to cost-effectively
steer traffic away from the Tier 1 oligopoly.
Author:
Frank P. Orlowski, Head of Marketing, DE-CIX
TI SPARKLE LAUNCHES
POP IN TANZANIA
TI Sparkle has launched a new PoP in Tanzania. Te move will
reinforce the companys presence in south and east Africa, as it
aims to become a leading IP gateway to the region.
Te PoP will be established in Dar es Salaam in partnership
with Tanzania Telecommunication Company (TTCL), which will
deliver IP services in the region. TI Sparkle and TTCL will ofer
IP connectivity solutions to telecoms operators, ISPs and service
providers that are connected to Dar es Salaam through major
international submarine and terrestrial cable systems.
Te new partnership with TTCL and Sparkles recent
developments in west Africa show how fast we are growing in
Africa, a continent where we intend to continue to invest in terms
of resources and in terms of commercial efort, said Elisabetta
Ripa, CEO at TI Sparkle.
ETISALAT AND TELEFNICA
PARTNER FOR UAE CYBERSECURITY
UAEs Etisalat and Spanish operator Telefnica have signed a
partnership for the delivery of advanced cybersecurity solutions in
the UAE. Te two operators will build a security operations
centre (SOC) in the UAE, designed to provide advanced services
to organisations of all sizes.
Abdullah Hashim, SVP of digital services at Etisalat, said that
the SOC will ofer 24/7 security, monitoring and access to
advanced threat intelligence correlations.Etisalat is devoted to
meeting the ever-growing security needs of organisations in the
UAE and helping them transform to a SMART environment,
Hashim said.
Tis partnership with Telefnica will help deliver more reliable
and intelligent managed security services and cutting-edge
cybersecurity solutions to our customers.
ZAIN KSA SIGNS SUPPLY CONTRACTS
WORTH $1.2 BILLION
Zain Saudi Arabia (KSA) is set to upgrade its network after
signing infrastructure supply contracts worth $1.2 billion.
Te company - Saudi Arabias third-largest operator - has
reportedly signed agreements with numerous vendors for the
upgrade, including Huawei, Nokia, NEC Corporation, Cisco
Systems and Alcatel-Lucent.
It will use its own resources to fnance the deal. Zain KSA is
expected to now develop solutions across its mobile network to
cater to growing demand across the Kingdom.
Saudi Arabia is opening up the market to more players and
recently awarded an MVNO licence to UK-based Virgin Mobile
Middle East and Africa.
latam|13
MEXICAN SUPREME
COURT REJECTS
AMRICA MVIL
REGULATORY APPEAL
Te Mexican Supreme Court has
reportedly refused to hear injunctions
from Amrica Mvil and its mobile
subsidiary Telcel, seeking to challenge a
ruling by Mexicos telecoms regulator.
Mexicos telecoms regulator, Instituto
Federal de Telecomunicaciones (Ifetel),
has in place a preponderant economic
agent ruling, which Amrica Mvil
and Telcel are thought to be looking
to suspend.
According to local reports, out of fve
justices in the courts frst chamber, not
one was willing to take on the appeals
from the operator.
As a result, the injunctions will now
return to a lower court specialising in
telecoms and economic competition.
Amrica Mvil, one of Mexicos largest
operators, is reported to have set up a
committee to evaluate options in response
to the ruling. Te committee is said to be
exploring structural, commerical and
technological options.
PRIVATE EQUITY
FIRM ACQUIRES GAS
NATURAL FENOSA
TELECOMUNICACIONES
UK-based private equity frm Cinven
Partners has agreed to acquire the fbre
network of Spanish utility company Gas
Natural Fenosa for 510 million.
Te deal for Gas Natural Fenosa
Telecomunicaciones will give Cinven
ownership of 30,000km of network across
Spain, Central America, Panama and
Colombia. Te company ofers a range of
dark fbre, optical transport, co-location,
satellite and IP services.
GNFT is a well-invested fbre business
in Spain with strong cash fow generation.
Te company also has exposure to
high-growth markets in Central and
South America. GNFT has an excellent
management team with a signifcant track
record in the telecoms industry with a
combined 86 years in the sector and we
look forward to working with them, said
Jorge Quemada, partner, Cinven.
GNFT is said to have recorded a 13%
EBITDA increase CAGR between 2011
and 2013.
SATELLITE TAKES
CENTRE STAGE AT
WORLD CUP
Intelsat has revealed details of the news
and sports programmers using its global
satellite services and terrestrial network to
televise the 2014 World Cup in Brazil.
Intelsats global satellite feet will
support contribution services within
Brazil and distribution of the World
Feed to the Americas.
Intelsat will also support the
contribution, distribution and fbre
back-up demands of sports and news
organisations in the Americas, Europe,
Asia and Africa on an ad hoc basis. Te
satellite services are said to complement
existing full-time capacity arrangements
used by sports and news organisations for
news coverage originating from the
region.
Programmers have also committed to
approximately 500MHz of capacity
reserved on seven satellites for full-time
services for the duration of the games,
which will be used to distribute the World
Cup matches throughout the Americas
and Europe.
INTERNATIONAL TELECOMS WEEK 2014
10-13 May 2015, Hyatt Regency, Chicago
Thank you for your support. See you next year!
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www.liquidtelecom.com
Liquid Telecom run Africas most advanced
fibre optic network spanning borders throughout
eastern, central and southern Africa. Weve built where
no fixed network existed and now connect people and
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capacitymagazine.com capacity
analysis: level 3 | 15
LEVEL 3 MAKES ITS
BIGGEST MOVE YET
companys recent investments, Level 3 has
not made an annual proft since 1998,
with rates continuing to fall for its
traditional long-distance traf c business.
It is also signifcantly debt-laden, which
is why Level 3 has opted for a signifcant
proportion of the transaction to be paid in
the form of shares.
Te fnancial market too, appeared to
react badly to the deal, with Level 3s
shares plummeting by 4.1%.
Patel tells Capacity that this was because
of a rumour of the deal that broke before
it was announced, causing shares in the
company to rise rapidly before falling.
He commented that the companys
largest investors are very enthusiastic
about this transaction. It is an attractive
deal from both sides, with the deal
expected to cut costs by approximately
$200 million a year.
ATLANTIC-ACMs Charlie Reed,
director of quantitative analytics, echoes
these sentiments, and goes as far as to
predict that the synergies between the
two companies could result in the
creation of a new major player in the US
telecoms market.
Te merger is not likely to decrease
competition, he said. Given that Level 3
is historically priced very competitively,
it may bring that perspective to tw
telecoms operating markets, driving
increased competition.
Te combined company will likely
make stronger plays in bids for large
contracts placing competitive pressure
on AT&T, Verizon and CenturyLink.
Level 3 has made its biggest move to
date. Will it pay of?
I
t would be very easy for Level 3
Communications to rest on its
laurels. However, the temptation to
add tw telecom to its growing list
of subsidiaries appeared too good
to miss.
Te companys acquisition strategy has
indeed been impressive over the years,
with tw telecom now representing its
largest deal to date.
It has now spent $25 billion in
acquiring a string of companies and assets
in a bid to establish competitive ground
with both AT&T and Verizon.
As a result of these deals, many in the
market credit the company for being one
of the frst US telcos to prepare its network
for the video content revolution gripping
the worlds operators at the moment.
Level 3 has already seen its stock price
double over the past two years, after
investing heavily in its network to become
a major player in the US and across the
world. It is already strongly positioned in
the infrastructure space, so how will the
move for tw telecom enhance this?
Level 3 is splashing out $5.7 billion in a
cash and stock deal to snap up the metro
provider, in what seems to be a direct
response to the aggressive consolidation
strategy the US is seeing from the
incumbent telcos and cable companies.
Both AT&T and Comcast are also in the
process of completing multi-billion dollar
consolidation deals in cable.
And it appears Level 3s CEO Jef Storey
is keen to follow suit. He confrmed after
the tw telecom tie-up that Level 3s
primary competitors are now the very
large companies, whether they are
incumbents or cable providers.
Acquiring tw telecom builds on Level
3s acquisition of Global Crossing, secured
in 2011 for approximately $3 billion,
which again was intended to beef up its
backhaul ofering and connect local
networks across the US.
Level 3 has positioned itself as the
middle-mile provider between the large
ISPs and content-heavy OTT players, and
has been actively seeking ways to counter
the loss of its shrinking wholesale business,
with a specifc target on corporate and
government customers.
Tis deal brings together the global
reach of Level 3s internet backbone with
the US metro focus of tw telecom at a
time when traf c from streaming videos
through Amazon or Netfix and use of
sensitive corporate data is increasing
around the globe, said Richard Karpinski,
senior analyst at Yankee Group.
Tis certainly appears to be the strategy,
however, the deal actually only gives a
combined Level 3/tw telecom entity a 6%
share of the fxed corporate
communications market in the US.
AT&T, Verizon and CenturyLink
combined have 59.8%.
Tis could be set to change. Analysts
claim Level 3s growing IP backbone could
prove invaluable in tempting corporate
customers that require links to Europe,
Asia and Latin America. Sunit Patel, EVP
and CFO at Level 3, spoke to Capacity a
day after announcing the deal and
outlined the companys intentions to gain
additional corporate customers through
the tie-up. Our market share in enterprise
is still in the single digits, but with this
tie-up, we will have nationwide networks
in all the key cities and markets in the US
providing connectivity in and out of the
country, which should prove attractive to
potential customers.
On the whole, the acquisition appears
to be a shrewd move. However, despite the
With this tie-up, we
will have nationwide
networks in all the key
cities and market in
the US.
Sunit Patel, EVP and CFO, Level 3
I
l
l
u
s
t
r
a
t
i
o
n
:

G
r
a
h
a
m

T
a
y
l
o
r
Level 3s acquisition of tw telecom will allow it to fll the gaps in its US coverage
june/july 2014 capacity
Eric Cevis, Verizons
new president of global
wholesale, has been tasked
with leading the struggling
segment back to growth.
Is he up to the challenge?
Kavit Majithia reports.
T
hree months into the role,
and Eric Cevis, Verizons
new president of global
wholesale is already
implementing his vision
that he hopes will see the
unit return back to growth.
Cevis, a company veteran for over
27 years, has only served in the wholesale
sector for the last three, but entered
into the segment at a critical time for
the industry.
When I came into wholesale we
were dealing with a lot of market
competitive price pressures as technology
evolution was coming forward, and the
biggest task was moving people over from
TDM to IP. Now, as head of this business,
I have to ensure this migration is a
proftable one.
Cevis was formerly in charge of
Verizons global wholesale unit in the
Americas, before being promoted to
run the sales domestically and
internationally. He was eventually named
as the man to replace Mike Milligan,
who retired earlier this year after 33 years
at the company.
Cevis has big shoes to fll, with targets
to meet that will ultimately shape his
tenure as Verizons global head. One of
those will be identifying a strategy tailored
towards integrating a range of services on
the vertical and enterprise side within the
companys wholesale ofering, which could
ultimately swerve a negative fnancial
position into a positive one.
We have publically recorded negative
growth year on year, and I have had
the pressure over the past three years to
bend that curve, he says. Its now
important to make the right choices in
global wholesale to help the transition
from TDM to IP and develop strategic
oferings around cloud, security, mobility
and professional services. Tats how I will
get us back to growth.
Ringing in the changes
Cevis is adamant that his plan will bring
Verizons global wholesale business back to
the black and has a multiyear goal to
achieve his targets.
He says he has put a challenge on
himself and his organisation to be the
frst in the sector to be back towards
positive results.
With the company reporting a Q4 2013
revenue service decline of 7.8% to $1.63
billion, it is already a tall order, and his
frst three months in the hot seat have
been busy to say the least.
From March 1st, my frst task has been
to move the trajectory here on the path to
proftability, he says. One important
thing we have done is assess our roll-out of
fbre to the internet and fnd a way to
white label what we ofer. Tis means
Verizon is now providing internet access to
our customers, who are then able to
service and compete against the growing
MSO threat in a major way.
Verizon rolled this out in April as an
internet access arrangement, and Cevis
says he will look to evolve the ofering to
include a similar voice service as a double
play by 2015. In efect, Cevis is taking
Verizon wholesale back to basics. Tis is
plain vanilla internet and voice access
there are no emails, bells or whistles, he
says. Te strategy of white labelling and
reselling services is now being extended
towards a range of other assets at the
companys disposal.
Cevis tells Capacity that it makes logical
sense for Verizon, a global behemoth,
to leverage its existing capabilities and
execute a plan that sees the company
become a larger distribution channel.
I am targeting this resale environment,
he says. Tis extends to our cloud assets
in the data centre and we are looking to
give our global carrier customers the
16 |
Reversing
the
tide
capacitymagazine.com capacity
the big interview: eric cevis | 17
1986
2006
2003
2012
2014
Staff supervisor,
government systems
division, Bell Atlantic
VP business channel
development, Verizon
Retails Markets Group
VP, Verizon Enhanced
Communities
VP for sales, Americas,
Verizon Global
Wholesale
President, Verizon
Global wholesale
Leveraging M&A
Reselling and white labelling services
appears to be Cevis strategy on the road
towards short term success, but he is
clearly aware that Verizon must innovate
to ensure future success in the business.
Tis, he says, will come from the
execution of a strategy that revolves
around how the company will leverage
cloud, its network and mobility to
fuel innovation.
Luckily for Cevis, in the short term, he
will not have to deal with fnding target
companies that beft his needs, because
Verizon already has these at his disposal.
Late last year, the company snapped up
CDN provider EdgeCast in a deal worth
$350 million as it looks to ramp up its
content services ofering.
A year before that, it made an aggressive
play into the M2M market by acquiring
Hughes Telematics in 2012 for $612
million and has developed cloud solutions
with Terremark for over three years since
acquiring the company in 2011.
Cevis says the time has come for the
company to now get the full alignment
out of the M&A activity we have already
done to date and execute these moves.
And with EdgeCast in particular,
Verizon has been quick of the mark. Last
month, it announced the launch of 20
additional PoPs to add to its footprint
with the CDN provider (see page 15). It is
also strategising to utilise EdgeCasts vast
presence in Latin America to establish a
gateway into Brazil.
Cevis claims it is now time for Verizon
to now understand what its exact strategy
is with peering and its carrier partner ports
to fuel further growth. Tis is the only
way we will know exactly how to leverage
EdgeCast assets and ensure it is the growth
machine that we want it to be.
Cevis is also set to place a big emphasis
on cloud and M2M, with Hughes
Telematics key to that growth. Te
automotive technology company
provides a range of products in GPS
tracking, communications and safety
features in cars, and Cevis says Verizon
is focussed on working its way up the
food chain in the M2M market through
this acquisition.
He says: Tere is tremendous
opportunity in the transportation vertical
and we are looking at this, healthcare and
the fnancial sectors as a way of pushing
product innovation in the market.
For cloud and M2M to succeed on the
whole, Cevis believes the wholesale
community must look at accommodating
global networks with a certain level of
QoS. My priority lies around network
excellence, and pushing product
innovation and service improvements will
be dependent on this.
Tis strategy places an increasing
focus on the application side of the
business, and Cevis says its important
for Verizon to take diferent pieces of the
puzzle to carve out the opportunities that
exists in wholesale.
We dont know yet if we are missing
something in the cloud space, but we are
trying to revolutionise the way people
think about these verticals, he says.
We dont have all the answers on the
application side but we do know how to
take care of a network the next piece
requires us to add applications to allow us
to monetise this for the industry.
Beating the competition
Te rising threat of the MSO is a
challenge says Cevis, and allowing his
customers to resell Verizon services has
been one of his frst competitive moves
against the cable segment.
No matter what I do in any part of
my business there is always somebody
else that is going to try and be better,
he says.
Cevis is relying on his strategy, and the
fact that the entire ethos of Verizon is
built on the premise of reliability as a way
to counter the threat.
Will customers want to deal with a
reliable player in the market that is priced
competitively, or a new entrant that is
coming into the space and attempting to
win wallet share? he asks.
Cevis says the company is also looking
at how to bundle several services, and
is in the process of rolling out a project
to look at its strategic services, whether
its in the cloud, Ethernet, IP, fbre or
mobile, and give customers a discount
for taking those services in a package
based on the growth it provides for
their business.
Tis, he says, is an incentive for
companies to take additional share from
the MSO players and help aggregate
their volumes.
Tese are the kinds of things I am
looking to implement to push these cable
companies to the side, he says. We are
getting creative because we have to. With
MSOs and others in the market, we
cannot sit still any longer.
capability to package that and take it to
the wider community.
Cevis claims this is an attractive
proposition because it gives customers the
ability to bundle solutions and pass it of
as their own, giving the companies
stronger brand recognition.
Verizon is now pushing out such a
strategy on its data centres across the
Middle East, Europe, Africa, Latin
America and Asia-Pacifc. We are really
pushing the conversation at the C-Level
suite and looking at how we leverage data
centres and our cloud assets to help other
providers jump into the marketplace faster
and stronger, allowing us to monetise from
that partnership.
Tis is just one of the several strategies
he has for growth on the international
stage. He says it was important to take a
step back and look at the fundamentals of
how to run a global organisation.
Partnership will be a key theme for
Verizon Global Wholesale under Cevis
reign, with the companys recent
acquisitions likely to play a part in the
companys international growth.
We need to identify how we partner
because I am big on accepting partnerships
across the world, he says. Collaboration
is going to be my road to growth.
Collaboration
is going to be my
road to growth.
Eric Cevis, president,
global wholesale, Verizon
capacitymagazine.com capacity
market strategy: mvne |19
I
n January this year, China issued 11
MVNO licences to private companies
looking to resell services from Chinas
three state-owned operators. In March
2014, Virgin Mobile acquired a MVNO
licence from Saudi Arabian regulators, and
later the same month UK operators BT
and EE announced an MVNO agreement.
Tere has been a signifcant growth and
birth of new MVNOs worldwide, which is
expected to present lucrative opportunities
for all players involved.
Te growth in MVNOs has led to a
need as well as potential revenue
opportunity for a tailored solution to
manage the process.
Enter stage right, the mobile virtual
network enabler (MVNE).
Potential in the market
An MVNE is a service orientated towards
MVNOs looking to enter the market
quickly. It allows companies, both inside
and outside the telecoms space, to launch
an MVNO in a streamlined fashion,
without a large investment.
Communications service provider
Amdocs launched its MVNE solution in
2007 when the company frst spotted
potential in the MVNO market. We
identifed a signifcant increase in MVNO
activity globally, but especially in Europe
and the US, says Kfr Dan-Ari, director of
product marketing at the company.
Dan-Ari believes that instead of
developing their own home-grown
solution, or customising their retail
business support system (BSS) to run
MVNOs, mobile operators and carriers
will reap the most beneft from a
dedicated solution.
[Te Amdocs MVNE solution] helps
customers to easily expand their business
to wholesale by quickly getting MVNOs
onboard their network, and ofers a full
end-to-end operation, from customer
relationship management (CRM) through
to ordering, full rating and billing,
Dan-Ari says.
Te benefts are clear but can be
narrowed down to three key elements.
Te frst is a reduced cost to market.
Te MVNE model is opex-based without
the need for high upfront investment
costs. Tis means the MVNO can cut
initial costs by operating with a BSS
tailored specifcally to meet its needs.
Te second beneft is speed to market.
Some MVNEs claim they can get an
MVNO up and running in four to six
weeks, says Carrie Pawsey, senior analyst
of industry, communications and
broadband at Ovum.
Not only do MVNEs claim to launch
the MVNO in a shorter timeframe
than a customer would be able to
do itself, but Dan-Ari says that the
Amdocs MVNE solution also empowers
MVNOs to generate business processes
and services on the fy, as well as change
existing ones within hours, instead of
weeks or months.
Lastly, MVNEs are said to remove the
technical complexity for MVNOs, which
is important if the MVNO does not have
any previous telecoms experience.
Tis factor seems to have struck a chord
with Spanish operator Telefnica Global
Solutions (TGS), which launched its own
MVNE solution earlier this year.
An operators approach
TGSs MVNE has been created with
those outside of the telecommunications
world in mind.
Te service is designed to act as a
centralised and managed solution within
the TGS wholesale portfolio, allowing a
quick launch with no need to develop
costly systems.
Tis means that the customer can focus
on their main business and leave the
technical aspect in expert hands, the
company claims.
TGSs interest in MVNEs is rare for a
carrier. Traditionally, MVNE players have
been platform providers specialising in
billing and CRM systems, through one of
two business models.
Te MVNE
Te booming mobile virtual network operator (MVNO) market is creating fresh
opportunities for carriers to ofer mobile virtual network enabler (MVNE) services.
Laura Hedges reports.
movement
june/july 2014 capacity
20 | market strategy: mvne
Te frst is partnering with an MNO as
an exclusive deal, providing the technical
implementation expertise but not being
involved in the wholesale airtime part of
the deal, so there is the three-way
relationship between the MNO, the
MVNO and the MVNE, Pawsey
explains. Or, some have chosen to be
MVNAs (mobile virtual network
aggregators) whereby the MVNA has
purchased the airtime, run the MVNO
platform at an arms length from the
MNO and therefore the MNO and the
MVNO have had no direct relationship.
TGSs MVNE move could see
other mobile operators follow suit,
particularly given the industy thirst to
combat declining margins with new
revenue streams.
Tis has resulted in some operators
creating their own in-house MVNE
solution to host MVNOs, usually through
the acquisition of an MVNE, or by
partnering with various technology
vendors to create an end-to-end MVNE
solution, Pawsey says.
Tis is diferent to the original MVNE
business model where the MVNE was the
middle man between the MNO and the
MVNO; here, the MNO retains control
of the MVNO and also generates revenues
through the enablement services, not just
providing connectivity.
On the technology side, MVNE services
have traditionally been reserved for
Tier-2 and 3 vendors, as well as smaller
solution providers.
Major Chinese vendor ZTE, however,
has also moved into the market, launching
ZSmart a cloud-based MVNE platform
designed to host MVNOs in Europe in
May 2013.
Like Amdocs solution, ZTEs service
ofers quick service roll-out, fast
time-to-market and low upfront costs,
enabling MVNOs to innovate in a
secure environment.
We have seen unexplored business
opportunities for telecoms operators to
target niche markets through deep
segmentation, and we believe our ZSmart
MVNE solution is well-positioned to meet
these demands and allow MVNOs to
capitalise on value-added services within
their networks, says Ivan Cairo, business
development director at ZTE.
Tere are, however, several other
approaches to the MVNE model. CSG
Internationals billing system is an
example. Although not an MVNE
solution per se, CSG ofers billing systems
and managed services that enable
MVNOs to operate.
What were fnding in many situations
is as well as the MVNE allowing MVNOs
to use their network, MVNEs can use
our software to provide the back of ce
and billing software solutions that the
MVNO needs as well, says James Kirby,
executive director of managed services at
CSG International.
Kirby explains that CSGs solution is
well suited to the MVNE environment, as
it provides a turnkey solution for
operators. An operator can use our
software on-premise, via the cloud or as a
managed service where we can manage the
MVNO on behalf of the MVNE, Kirby
says. So if the MVNOs have any
problems with billing or associated CSG
solutions, they contact us, rather than
contacting the MVNE itself.
CSG claims to support operators and
their MVNO activities across the globe. It
is through these relationships, says Kirby,
that he has noticed a lot of developments
in the space.
We are seeing a lot of innovation
worldwide and it is accelerating as data
and high-speed internet over mobile is
becoming more widespread, he says.
Asian acceleration
So with Spains TGS, Missouri-based
Amdocs and CSG in Colorado making
strides in the MVNE spaces in Europe and
the US, where next for the MVNE boom?
I think to a certain degree Europe and
North America are reaching saturation
point in terms of MVNO activity, Kirby
says. Asia is defnitely a more up-and-
coming market.
Pawsy agrees, adding that any markets
that are opening up to wholesale ofer
the greatest potential for both new
entrant MVNOs and MVNEs looking to
service them.
Tat would include Latin America and
parts of Asia, particularly China, she says.
Lansdowne Consulting also expects
market liberalisation in Latin America
in 2014-2015, largely driven by Brazil
and Mexico.
Unlike the MVNO growth in Europe
during the last decade, growth in the
frst phase will not be driven exclusively
by so-called low-cost providers, the
report forecasts.
Value propositions based on ethnic
groups, immigrant populations and high
value-added applications will contribute to
more sustainable growth then even Europe
has shown.
Dan-Ari says that frozen MVNO
markets in South American could soon
open up: When it comes to frozen
MVNO South American markets, we
believe that changes in regulations would
soon push forward heavily-regulated
countries such as Chile, Colombia and
Brazil into more MVNO activity within
the next few years, he says.
Africa could also become an important
MVNO market. Earlier this year, CSG
signed an agreement with MTN South
Africa and Kirby believes that the African
market is becoming more established in
terms of its MVNO activity.
Asia is defnitely becoming more
prevalent and I think Africa will go that
way as well, Kirby says. In the African
market were seeing MVNOs starting to
gain traction.
MVNE solutions are evidently having a
global efect and Pawsey concludes: We
certainly see MVNE solutions as a revenue
stream for operators.
Projections of MVNO/Es growth by region
MVNO growth markets
with >50% CAGR (201318)
MVNO growth markets
with >100% CAGR (201318)
Source: Lansdowne Consulting
june/july 2014 capacity
22 |
I
ts rare to read or hear anything about
the cloud without it being accompa-
nied by the word enabler.
For carriers, there is increasing evidence
that cloud truly is an enabler. It is enabling
them a direct shot at new revenue streams
from the enterprise and OTT segments,
without having to stray too far from what
they know best: building and operating
networks. In the last few months, the likes
of Telstra, NTT Communications and
Level 3 have all made major
announcements in the cloud space.
However, if one company is to
encapsulate the growing industry faith in
cloud, it is Reliance Globalcom, which
stated its intentions in the market by
rebranding as Global Cloud Xchange
(GCX) in March. Te company, which is
led by former Pacnet CEO Bill Barney, is
embarking on an
aggressive network
expansion before it
deploys a new cloud
platform designed
to tap into the
global demand from
enterprise and new
media organisations.
FLAG reborn
GCX presently has
two major network expansions on the way.
Te frst is a new trans-Pacifc cable
linking Tokyo to Silicon Valley in the US,
which was announced in March. Te
Pacifc Cloud Xchange (PCX) cable will
be a four-fbre-pair system deployed with
100G technology and is expected to be
ready for service in 2015.
In June, it also revealed plans to deploy a
new direct route between Mumbai in India
and Singapore. Te route is designed to
bypass outage-prone terrestrial routes
between Mumbai and Chennai. It will
again comprise a four-fbre-pair system
with 100G technology, and will
interconnect with GCXs Falco, Hawk and
FA-1 systems, providing connectivity on
to the Middle East, Europe and to the east
coast of the US.
Vendors and additional partners for the
ICX subsea cable are being fnalised, with
the supply contract expected to be
awarded by the third quarter of 2014.
GCX CEO Bill Barney describes both
projects as flling gaps. Once both are
complete, he says the company will join a
select group of carriers able to ofer a
complete ring around the globe.
Ultimately, he says the original vision of
FLAG (fbre-optic link around the globe)
has been reborn.
Te diference between FLAG and
now, says Barney, is that the operator
has moved to more of a UNITY-style
model, after the trans-Pacifc cable
launched by a consortium of carriers and
Google in 2010.
You build fve fbres and sell three of.
Perhaps to non-telcos, adds Barney.
Telco and tech territory
Te infrastructure deployments are
essentially completing a footprint for
GCX to implement the second phase of its
strategy. GCX has revealed exclusively to
Capacity that in September it will launch
three pilot cloud platforms in Europe, Asia
and the US. Barney describes the pilots as
essentially being mini ecosystems that
will initially enable up to 60 cloud
providers to connect through Ethernet or
MPLS services.
From a wholesale perspective, it is
interesting as it creates a new meet me
room for large wholesalers. Its a new way
to build an ecosystem. In the future we
wont be just doing IP transit, says
Barney. I think its about how you build
the ecosystem for the wholesale providers,
and how you take advantage of that with
the retail guys.
Barney estimates that 40% of the
companys revenues will derive from cloud
by 2018. His confdence in cloud comes
from a strong belief that it does not belong
solely in the hands of the tech companies.
It is in equal measures a telco play: Te
bricks and mortar behind how you
actually execute a cloud strategy is simple
telco stuf, wrapped around a user
interface. Its not radical, he says. If you
get it right, you go head-to-head with the
likes of Dell or Amazon, without having
to do much.
He believes cloud is essentially made up
of four ingredients; software, fbre, power
and space. If you can play in two of those
spaces you are in a good spot. If you can
fnd a way of orchestrating the other two,
then you can make
it work, he says.
New media,
new customers
But while capturing
the enterprise
segment through
cloud is becoming a
familiar story in the
carrier segment,
GCXs pursuit of
the up-and-coming stars of the new media
world is not.
Barney has targeted the guys that
dont know who they are going to be
in a few years time. In other words
the OTT players whose traf c could
explode exponentially.
So where do you go about searching for
the next Facebook? Te most obvious
place is Silicon Valley, which is precisely
where Barney spent two years researching
potential customers.
As a result, Barney is able to ofer a
fascinating insight into some of the
upcoming trends in the OTT segment.
Enterprise tailored social media, for
example, is an area he predicts will
experience signifcant growth over the
coming years. How do you create social
Capturing tomorrows
Reliance Globalcom made its intentions clear by rebranding to Global Cloud Xchange. CEO
Bill Barney explains how cloud can help carriers capture the next generation of OTT players.
The one thing about
telecoms companies is we
destroy tech companies.
Bill Barney, CEO, Global Cloud Xchange
digital stars
capacitymagazine.com capacity
company strategy: global cloud xchange | 23
media within an organisation, but not
release confdential information out into
the network? Te next-generation starting
at companies do not want to use an email
system; they want to be able to
communicate in a more collaborative
way, he illustrates. What we are seeing
therefore is the development of the private
social network. Twitter, for example, is
looking at a closed group option.
Be it an enterprise-grade Dropbox or
Twitter, businesses today essentially want
to have tailored versions of everything the
consumer has, says Barney. Te enterprise
software space meanwhile is exploding
with cloud startups looking to capture the
SMEs market and ultimately take the fght
to the likes of SAP and Oracle.
We can help facilitate these guys [the
cloud start-ups]. I can make it inexpensive
for these companies to operate in Hong
Kong or the Middle East, where they can
go to test the market, says Barney.
Barney believes it will be a mix of
partnerships with the existing major OTT
players, the likes of Facebook and Google,
as well as capturing the booming startup
market that will bring carriers success in
the cloud space. He recounts a period at
his former company Pacnet, when the
carrier became one of the frst to partner
with Google in Asia.
We sold Google their frst circuit [in
the region]. And then essentially we sold
them everything we had in Asia for fve
years. It does work. You have to put
yourself in that stream of new companies
coming out and you have to be relevant to
them, he says. We need a lot of
companies to be successful, and build up
that next-generation of tech startups. We
would love to be their facilitators, and
grow alongside this next generation.
Barney concedes that for every success,
there might be two or three failures. But,
he says, that is simply part of the
excitement: If you get a few right, they
love you for looking out for them. You
have to take risks.
Accept carriers are not
tech innovators
Growing alongside startups is also GCXs
policy when it comes to the technology
behind its new cloud platform, with the
company investing in an undisclosed cloud
technology startup to develop its cloud
platform. If history has taught the telecoms
industry anything, says Barney, it is that
carriers owning technology companies is
not always conducive to innovation.
In the asset heavy industry of telecoms
everything is structured. We are a factory:
we build and deliver bandwidth. It slows
you from an innovation standpoint, says
Barney. Te one thing about telecoms
companies is we destroy tech companies.
Tis was one of the mistakes telcos made
during the dot.com boom.
Instead, he says, it is about establishing
efective partnership models, which is why
the focus of GCX moving forward will be
on developing an ecosystem.
We deliver bandwidth but we are not
necessarily set up to do the type of things
that cloud-based applications want. As we
continue to play in this space, it will be more
about developing an ecosystem, he says.
We are going to buy shares in a lot of
these companies, as for us, if we control
them we know we wont necessarily make
them better.
GCX will also need to strengthen its
data centre footprint to accommodate the
global roll-out of its cloud platform.
Unlike Barneys former company Pacnet,
which has invested heavily in its data
centre presence across Asia-Pacifc, the
company is looking to cast its net wide.
We are buying assets globally, he says,
before confrming that the company is
exploring many options. We are not
going to be a big player in the data centre
space. We are looking to work with the
small data centre guys, and bring network
to the companies which dont have
networks, says Barney.
Expanding its presence globally is
critical to the companys plans to support
companies in emerging markets, where he
sees ferce potential for cloud: Emerging
markets are where I believe cloud will be
most efective. Te average user in these
emerging markets does not have a high
income, so cloud is how you sell them
computers, e.g. low cost tablets. Shops in
places such as Lagos in Nigeria will be able
to run IT infrastructure 80-90% cheaper.
Following the launch of its three pilot
cloud ecosystems, Barney reveals the
company plans to add another 17 by the
end of 2015. It will be a quick
turnaround, but one that he believes
refects the growth of the market: To be
a frst mover in cloud in emerging markets
is all going to come down to execution,
he says.
Global Cloud Xchanges PoP coverage worldwide, including its latest cloud nodes
GNOC
CLOUD NODES
CLS/TxPOP
IP POP
KEY
capacitymagazine.com capacity
top ten: itw highlights | 25
THE MOST IMPORTANT EVENT OF THE YEAR FOR WHOLESALE TELECOMS WAS HELD
IN MAY. CAPACITY LOOKS BACK AT THE DEFINING MOMENTS FROM ITW 2014.
ITW
moments Top 10
from
2014
1 / A MESSAGE FROM THE FOUNDER OF THE WORLD WIDE WEB
2 / THE CHICAGO AGREEMENT
3 / CONFIDENCE, INNOVATION & LEADERSHIP TAKE CENTRE STAGE
With the future of the internet never
looking more uncertain, it was ftting that
ITW 2014 was opened by a keynote
address from the founder of the world
wide web, Sir Tim Berners-Lee.
In 1990, Berners-Lee identifed the
three technologies (HTML, URI and
HTTP) that laid the foundations for the
modern internet. Since then, the web has
continued to become faster, more
accessible and incredibly powerful, none
of which could have been possible if it was
not maintained as an open platform.
Most of the web, to this day, has been
kept open for people to contribute to its
growth, he told Capacity. Tere is a
good foundation to stimulate economic
growth, to encourage startups, and most
crucially, it has been important to
maintain democracy.
During his speech, delivered to a packed
Crystal Ballroom at the Hyatt Regency,
Berners-Lee paid tribute to the wholesale
community for playing a pivotal role in
the development of the web.
With the web now in its 25th year, he
also warned that its open platform
principle is coming increasingly under
threat. A battleground is emerging to
control the internet, he said, with
governments taking a larger role in how
people access the service.
Te frst day of ITW 2014 saw Orange,
Ooredoo and Bharti Airtel sign the
landmark Chicago agreement.
Te pioneering agreement will see the
three founding carriers work together to
On day one, Capacity also revealed the
results of its seminal Confdence,
Innovation and Leadership Survey during
a summit. Te annual global research
study monitors the most important issues
afecting senior executives within the
international wholesale telecoms market.
Te report found 77% of wholesale
chiefs to be bullish on the prospects for
the market, and a statistically relevant
proportion of senior executives have
moved from being confdent to very
confdent in the past 12 months.
Meanwhile 82% of all wholesale chiefs
view the over-the-top segment as an
and nomadic communication usages
growing more than ever, said Alexandre
Pbereau, EVP international carriers
at Orange.
Orange, Ooredoo and Airtel were all
keen to stress the importance of
developing robust global networks, with a
specifc focus on quality voice and data
services for retail and mobile operations.
As part of the agreement, the operators
will also strategise to tailor the
collaboration towards combating fraud, by
sharing best practices and available tools
between them.
were also key areas of discussions. Ex-FBI
agent and current president of CrowdStrike
Shawn Henry claimed there was a growing
disconnect between the two in the
industry, and said that security is an issue
which needs to be addressed at board level
by carriers.
address areas of interoperability in
roaming, signalling, transport, SMS
and IPX. Te news was exclusively
broken by ITW Daily, which is produced
by Capacity .
Te move will also see the companies
partner for international voice services and
develop solutions for voice minutes to be
routed on the shortest possible path with
the highest level of quality.
Tis initiative is an answer for
our industry to an increasingly
complex ecosystem; driven by the IP
convergence, which sees international
opportunity rather than a threat, but
69% would still like to formalise a
relationship through some sort of
revenue-sharing model. Tis set the tone
for the Confdence, Innovation and
Leadership Summit, which was presented
by the acclaimed documentary host,
producer and broadcaster Bill Kurtis. Te
panel also included high-profle
representatives from the carrier, vendor
and OTT communities.
Te panel agreed that OTTs are driving
new consumer behaviours, which are
expected to generate more messaging and
voice trends. Fraud and security concerns
june/july 2014 capacity
26 |
4 / A SEMINAL YEAR FOR IPX
5 / REDEFINING CONTENT AND CARRIER RELATIONS
6 / ONE-YEAR ANNIVERSARY OF VODAFONE CARRIER SERVICES
If any further evidence was required to
show that IPX has gained serious
momentum in 2014, it was provided at
ITW, where a number of Tier-1 carriers
made high-profle announcements.
Telefnica Global Solutions began
proceedings by launching its IPX suite on
day one. Te IPX Suite is designed to
allow customers to share interconnections
between multiple services, and will also
deliver extensive quality and security
features. Customers are expected to beneft
from reduced costs as the amount of
interconnections needed to acquire
diferent services is minimised, as is the
time-to-market for the implementation of
new services. Services in the IPX portfolio
include VoIPX, SIGTRAN signalling and
GPRS/GRX, with next-generation IP
services such as LTE Diameter and LTE
data roaming. Other services include data
roaming management and optimisation, as
well as enterprise services such as A2P SMS.
Te following day, Middle Eastern
operator Etisalat signed an agreement with
TI Sparkle to interconnect their global
multi-service IPX platforms.
Subscribers from both companies are
now said to have the capability to
seamlessly roam between international
operator networks.
Also on day two,
Hutchison Global
Communications (HGC)
announced IPX agreements
with both Taiwanese operator
Chunghwa Telecom and
Japanese carrier NTT
Communications. Te
partnerships are designed to
establish multi-service IPX peering
interconnections. All three carriers will
now have the ability to deliver greater
reach to more mobile network operators
and the agreement is designed to ensure
that end customers can roam seamlessly
across IPX platforms. IDT also announced
that it was integrating IPX into its global
network. Its ofering includes a packet
voice internetworking exchange that has
been designed to meet i3 Forum and
GSM specifcations.
Te moves highlight
how LTE roll-outs globally
are driving demand for
IPX, particularly in service
areas such as LTE roaming.
A battle is underway
between carriers for space in
this market.
Net neutrality again came to the forefront
on day two, during a lively conference
session focussed on Redefning content
and carrier relations for mutual beneft.
Panellists including senior
representatives from Facebook, datamena,
HGC and NTT Communications agreed
that over-regulation on the net neutrality
issue could hinder OTT and carrier
At ITW 2013, Vodafone ofcially
launched its wholesale unit, Vodafone
Carrier Services. Capacity caught up with
CEO Brian Fitzpatrick during ITW to
learn how operations have evolved one
year on.
He said that besides exceeding all its
fnancial commitments to the Vodafone
Group, the integration process has overall
gone much smoother than he anticipated.
Prior to forming Vodafone Carrier
Services, we were really operating as 27
independent companies, each buying and
selling; similar to what we do now, but on
their own, said Fitzpatrick.
I expected bringing those companies
together to be a challenge, and in some
cases we found some issues that we were
not expecting, but the teams have come
together very fuidly.
Both sides OTTs and carriers are
investing in network infrastructure
separately. Instead, we need to partner to
come up with a solution to cope with
increasing trafc volume together,
Ahmad said.
Kwok said HGC is looking to co-
operate with OTTs to generate revenue
together, by creating a revenue sharing
model. However the company acts
cautiously and even hesitantly when
setting up partnerships with OTTs for fear
of breaking net neutrality rules.
NTT Communications EVP of global
IP networks, Michael Wheeler, reiterated
Kwoks message, adding that too much
regulatory involvement can create a
cumbersome environment.
to a fully IP-intelligent routing platform.
Tis is a major move: Vodafone handles
upwards of 60 billion minutes of trafc
per year. As well as bringing far greater
control and efciency to its network
trafc, Fitzpatrick also hopes it will lead
to the highest quality of service at the
lowest cost.
Historically, each one of our
companies had control of the
routing of the trafc, so were
bringing this all together and
creating one interconnected IP
infrastructure that will have
one software control
worldwide, said Fitzpatrick.
Work on the intelligent
routing programme
will commence in the
coming months.
relationships. Panellists said both OTTs
and carriers need to start working
together on a solution for coping with
increasing trafc and improving the
end-user experience. Andrew Kwok,
president of international and carrier
business at Hutchison Global
Communications (HGC), said the
company is now past blaming revenue
losses on OTTs. We need to move on
and instead start focussing on how can we
work with OTTs and how they can help
us get more business, he said.
Najam Ahmad, director of networking
at Facebook, argued that net neutrality
regulations can prevent innovation, as
companies are wary of inadvertently
falling foul of legislation.
On the infrastructure side, Vodafone
Carrier Services has spent the last 12
months reviewing its capabilities.
Described as almost an inventory check
of our own assets, it included analysing
everything from the companys subsea
cable capacity through to its long-haul or
local loop access in particular countries.
As well as providing a clear overview of its
global infrastructure, the
review has also allowed
Fitzpatrick to put in place
some new initiatives that are
now fully funded and
endorsed by the Vodafone
board. He exclusively
revealed to Capacity that over
the course of the next 12 to
18 months, the company will
migrate all its voice minutes
capacitymagazine.com capacity
top ten: itw highlights | 27
7 / AMRICA MVIL SIGNALS ITS AMBITIONS IN EUROPE
9 / PLENTY OF ACTION ON THE EXHIBITORS FLOOR
8 / ASIAN OPERATORS STEAL THE HEADLINES
Could 2014 be the year Amrica Mvil
makes it mark in Europe? A wholesale
partnership with the Telekom Austria
Group which will see the creation of one
of the worlds largest fbre networks
seems to suggest so.
Announced at ITW, the move will
see the two companies interconnect
their networks to ofer voice, roaming data
and mobile solutions over a network that
will run between Miami in the US and
Vienna in Austria, connecting a total of
47 countries.
Te common infrastructure
throughout 47 countries will be one of the
largest worldwide, therefore we can
provide our customers with high-quality
data services, said Stefan Amon, head of
wholesale at Telekom Austria Group.
Te Telekom Austria Group is also one
of the frst providers to use Amrica
Mvils Latin American voice hub in
Miami, which is designed to process all of
the companys voice traf c
in the future.
We are happy to be
working together with
Telekom Austria Group and
thus beneft from the
excellent technological and
local know-how of the
company in CEE, said
Domingo Asiain, head of wholesale at
Amrica Mvil.
Following the move, Amrica Mvils $2
billion ofer to acquire the remaining
shares of Telekom Austria received
regulatory approval in late June. Te
Austrian frm told reporters that Amrica
Mvils ofer for the shares it
does not yet own was now
mandatory, following a
shareholder agreement with
state holding company
OAIG. Te ofer is being
converted into a mandatory
ofer as of June 30, 2014,
Telekom Austria said.
10 / ANOTHER RECORD-BREAKING YEAR
A record 6,039 delegates attended this
years ITW, which included representatives
from eight new countries, including
Myanmar, Nicaragua, Niger and Sudan.
Delegates at ITW also enjoyed a
signifcantly improved free Wif network.
Sponsored by Mobily, bandwidth was fve
times higher than 2013, with traf c
peaking on the third day of the event at
an impressive 272MB.
Finally, a huge well done to all the
runners involved in this years 5K charity
run. Nearly $12,500 was raised for charity
Tlcoms Sans Frontires by about 100
runners. Winning the 5km race in an
impressive 18 minutes 14 seconds was
Sprints Paul Joseph, closely followed by
Ken Robinson of RouteTrader Exchange
and Chris McKee from GTT. Te team
prize was scooped by Telekom Austria.
Tere were 117 exhibitors at this years
ITW, many of which used the event to
showcase new solutions and services.
Switzerland-based Ascom announced
the addition of a web portal service for
carriers using its B2BSimpleX platform.
Te web portal will allow carriers to
conduct business with other providers
outside of the B2BSimpleX platform.
Telinta launched a solution to enable
providers to access the GSM mobile
roaming market. Te solution, named
TeliSim, combines VoIP switching, billing
SIM cards and roaming agreements with
over 600 mobile operators worldwide,
with free roaming in over 150 countries.
Carrier-grade solutions
provider Alaris Labs
launched the Alaris LCR
Engine routing system,
which has the ability to
process both voice (VoIP
and TDM) and SMS-traf c.
Te system is designed to
maximise the proft for each call or SMS
processed by the network and has a high
traf c-processing capacity.
iQism launched the iQism R250,
its mobile robot for
mobile automation
applications. Te R250
is designed to provide an
unattended and automated
test and script execution
platform in a GSM/3G/4G
mobile environment.
Te front pages of ITW Daily were
dominated this year by announcements
from Asian carriers. Hutchison Global
Communications made four major
announcements on day two, signing IPX
agreements with Chunghwa Telecom,
NTT Communications and Etisalat Group
respectively [see A seminal year for IPX],
as well as an MoU with Qatari operator
Ooredoo Global
Services (OGS).
Te MoU with OGS
the wholesale arm of
Qatari operator
Ooredoo will see the
two operators extend
co-operation in areas such as global
capacity, infrastructure and data services.
Tis not only enhances HGCs capability
to deliver solutions that require high
bandwidth, such as 10Gpbs, but also
further extends HGCs MPLS network
reach in the Middle East, said Andrew
Kwok, president of international and
carrier business of HGC.
On day three,
PCCW Global made
the headlines with its
group framework
agreement for voice
interconnection
with Etisalat Group.
Te agreement will allow for voice
interconnection through PCCW Globals
international IPX network to provide
end-to-end delivery of voice and mobile
data services. Te agreement extends to
more than 50 destinations over a managed
IP network, across the largest IP backbone
in the region. Tis agreement will
reinforce our already-strong relations with
the Etisalat Group by putting more focus
on Etisalats African and Asian operations,
while demonstrating our determination to
turn customers business goals into reality
through communications technology,
said Emmanuel Bain, PCCW Globals VP
for voice services in Middle East and Africa.
10
th
Annual Global
Carrier Awards 2014
ENTER NOW AT:
The Global Carrier Awards have become the biggest and most prestigious awards event
of the wholesale telecoms calendar. Last years event was oversubscribed with over 118
companies representing 26 countries.
For general information, sponsorship & table prices contact:
Michael Broughton
t: +44 (0) 20 7779 7282
e: [email protected]
Special Guest Speaker Announced
Ben Fogle: Broadcaster, traveller and adventurer.
LEAD SPONSOR:
www.capacitymagazine.com/Global-Carrier-Awards
Celebrating vision and excellence in global wholesale
Location: Hotel Okura, Amsterdam
Date: 4 November
Dress code: Black tie
Making the Deal Just
Got Easier in Dallas!
For more information go to comptelplus.org,
email [email protected] or call 202.296.6650.
Follow us @COMPTELPLUS.
October 5-8
Gaylord Texan, Dallas, Texas
You Spoke and We Listened
Were making changes big changes to enhance the
COMPTEL PLUS experience. When you attend or
exhibit this Fall, you'll experience the difference:
enhanced session content, greater sales
opportunities, lively entertainment and a more
productive networking environment. If it has been
awhile since you were at COMPTEL PLUS, you must
return and experience the difference. If you're a
broadband, cloud, satellite, over-the-top (OTT) or
wireless provider, or one of their strategic partners,
the COMPTEL PLUS Fall 2014 Convention & EXPO
will deliver:
Unprecedented access to key decision makers.
Extensive networking opportunities.
An ideal environment for meeting existing clients and
new prospects.
Our innovative, interactive Business PLANner for
scheduling meetings.
Foresight into new trends and challenges.
Strategic insights into potential policy reform
impacting the industry.
Exciting New Features
Central EXPO activity hub and stage offering unique
advertising and sponsorship opportunities.
A more comfortable environment. Join us in the
COMPTEL member VIP lounge and all attendees
may enjoy complimentary lunch on the show floor.
Focused exhibition hours with no other scheduled
activities for a more robust selling environment.
Pre-show selling tools, including webinar and
marketing advice.
Networking and just plain fun at our after-hours
Texas-style party, complete with live band and
western-themed activities.
More educational and policy sessions on topics
important to your business and the industry and, as
always, free to all exhibitors.
More exhibitors and attendees!
Register before July 18, 2014 and save more than 25% off
the regular registration fee. Use code CP101 when you
register.
COMPTEL PLUS Fall 2014
Convention & EXPO
Featuring
FCC Chairman Tom Wheeler
as keynote speaker.
29 | need to know: trueview
TrueView: big opportunity?
What is it?
TrueView is YouTubes online video ad
format which is based on an interactive
model. Te service allows the viewer to
skip the advertisement, or select to watch
an ad from a choice of diferent ads.Te
company is only charged if the viewer
watches the video ad.
Te TrueView ad format ofers three
main types of ad placements:
TrueView In-Stream gives viewers
the option to skip the ad after 5
seconds.
TrueView In-Display ads appear as
a thumbnail and text on YouTube
watch pages in the right-hand pane of
suggested and recommended videos.
TrueView In-Search ads appear in a
special promoted section of the video
search results pages on YouTube and in
Google Video search results.
Tech analyst and partner at Kleiner
Perkins Caufeld Byers (KPCB), Mary
Meeker called the service a game-
changer in her annual trends report
released in May this year.She argues that
skippable ads will actually accelerate the
monetisation of video. Skip option keeps
users happy, encourages marketers to make
their ads entertaining, and lets advertisers
only pay when their ad is actually
watched, she says.
YouTube owner Google maintains that
because viewers can skip or select the ads
they want to watch, the advertiser saves
money and reaches a more targeted
audience. According to Google 15%-45%
of YouTube viewers let the ads play.
Why is it important?
Online video advertising has been
earmarked for big growth as OTT
video content is increasingly driving
network trafc.
According to Media Research Group
(MRG), video on demand subscription
will grow to more than 120 million
subscribers by 2017. As the popularity of
online video content increases, marketing
companies are turning their attention to
online video ad opportunities. Te
popularity of digital video viewing is
helping to drive the expansion of the
online video ad market, market research
company eMarketer wrote in a report.
Te Global Entertainment & Media
Outlook 2014-2018 report also predicts
that online video will be the fastest
growing of all forms of advertising.
What does this
mean for operators?
Online video consumes massive
amounts of bandwidth, requiring
telecoms operators to invest in network
upgrades in an efort to keep up with the
additional trafc.
However, operators often miss out on
revenues created by OTT online video
content and are looking to create new
business models which will allow them to
generate revenue from content providers.
As online video advertising grows it is
critical that operators should leverage their
assets and capabilities and collaborate with
OTTs to capitalise on the trend, according
to a report by consulting frm Booz and
Company released in November last year.
Some operators are beginning to generate
revenue streams from online video ads by
creating new services such as data
analytics, which they can sell to businesses
on a wholesale basis.
What opportunities
are there for operators?
Big data is central in making online video
advertising successful, says Video-Nuze, an
online publication for the online/mobile
video industries.
Operators have a strong retail
network, with the ability to reach
millions of subscribers, according to
Booz and Companys report Enabling
the OTT Revolution: How Telecom
Operators Can Stake Teir Claim. In
addition they have the ability to collect
location, behavioural, and usage
information about their customers.
Te consultancy expects there to be an
increase in interest among marketers for
big data. Data provided by operators will
allow companies to better understand
customers and improve marketing eforts
through location-based video ads and
personalised campaigns.
In early June this year, AT&T
announced plans to launch a new service
which allows businesses to access the
operators network data to confrm a
customers location. Te location
information services capability is designed
to notify businesses when participating
customers travel internationally.
Initially designed to improve security
for credit card companies, such a service is
also very useful for marketing, and could
be used by companies for more targeted
online video advertising.
Te new service is enabled through
an application program interface
(API) and is part of AT&Ts Mobile
Identity API Toolkit, which launched
in December 2013.
Companies want to get ahead of
customer expectations, ofer new ways to
solve challenges and diferentiate from
their competitors, saidLaura Merling, VP
of business digital experience at AT&T.
Verizon Wireless too ofers a service to
marketing companies that provides
real-time location of specic audiences,
including where the users are and what
they do, online and ofine.
Te number of operators looking to
collaborate with OTTs to provide service
oferings which bolster profts for both
companies is increasing and the growing
online video advertising market provides
many opportunities for operators.
capacity june/july 2014
capacitymagazine.com
capacity
sponsored interview: bevan slattery | 30
MEGAPORT
MAKES TRACKS
IN ASIA
To mark its frst year anniversary in Australia,
Megaport is now taking its innovative
interconnection services to Asian markets.
CEO and founder Bevan Slattery shares all the
details with Capacity.
A
ustralias Megaport which
provides carrier-neutral network-
interconnection services is
aiming to make a splash in Asia by
bringing in services that are new to the
region. Te companys real-time
interconnection ofering will build on the
success achieved in its frst year of
operations in Australia, where it launched
the countrys frst network-as-a-service
(NaaS) platform.
In January, Megaport announced that it
would launch services in Singapore,
including the roll-out of a 100G Ethernet
NaaS platform and a high-capacity fbre
network that ofers access to dark fbre
services. Te company plans to introduce
its service there in the next couple of
months, followed by Hong Kong in
September. Megaport is set on further
expansion in Asia, but has not yet detailed
where this will take place.
CEO and founder Bevan Slattery
emphasises that the company brings
something totally new to the Asian
market, where he says there has so far
been no interconnection in real time.
He explains that with Megaport if you
want to order an initial cross-connect, you
can order it to start in 15 minutes. You
also dont have to sign a long-term
contract and can access an integrated
cloud-provider platform with connections
to partners and services such as Amazon
Web Services. Its true network-as-a-
service, ofering colocation on demand,
Slattery says. We always planned to go
into Asia. We developed a cookie cutter
for deployment and were at the right
point to go in.
In other words, Megaport will be able
to use its Australian roll-out as a template
on which to base upcoming deployments,
thus helping to drive more rapid traction
in new markets. Slattery says the
companys key learning has been its
experience integrating with partners on a
technical and software basis and in
promoting and engaging with them on
its network.
Major milestones
Megaport has passed what Slattery refers
to as a number of pretty big milestones
over the last year, including establishing
network coverage in multiple data centres
in Brisbane, Melbourne and Sydney,
connecting most major Australian data
centres with dark fbre and launching its
Megaportal NaaS self-service portal. Te
main achievement has been taking the
concept from an idea to a live service,
says Slattery. Te company has also gained
more than 100 providers on its network
and has in excess of 200 ports that
customers can connect into, achieving the
critical mass that Slattery says has turned
Megaport into a default option for
interconnection services as the easiest
and fastest way to connect to cloud
providers in Australia.
In addition to its direct-connect deal
with Amazon Web Services (AWS),
he says Megaport is close to announcing
deals with two global cloud platforms:
You can slice and dice connectivity
into diferent channels with our service.
Linking up Asia
Slattery says that the companys focus in
the next 12 months in Asia will be on
creating an interconnected ecosystem of
enterprises, carriers, and cloud and
content providers, as well as promoting
understanding and engagement with the
service: It will take a while to form
ecosystems, but once thats done it will
rapidly take of.
He adds that the companys content
and international-carrier partners were
keen for the model to be taken into
Asia, where no similar concept has
previously existed.
Customers can have immediate
access to providers in our ecosystem in
Singapore for as short as a day or as long
as a year, says Slattery of the companys
frst Asian market.
Before, he says, companies had to
contend with a much more time-
consuming and costly process by striking
long-term deals with each individual
partner for carrier services. Over time, he
expects companies to be ever more
attracted to Megaports Asian services, as
they increasingly take on board the
concept of infrastructure-as-a-service and
seek cost reductions and the removal of
other barriers to connectivity.
Megaport is meanwhile running its dark
fbre services using a managed platform
that it has placed into a separate company,
the name of which it will shortly
announce. Slattery says the purpose of
separating this is that Megaport wants to
emphasise to existing and prospective
customers that fexible interconnection
remains at the core of its ofering.
Were not a fbre company, but an
elastic connectivity platform, he says.
We provide on-demand network-as-a-
service connectivity and want to be very
clear about that to our customers.
Bevan Slattery, CEO, Megaport
You can slice and
dice connectivity into
diferent channels
with our service.
Bevan Slattery, CEO, Megaport
june/july 2014 capacity capacity
ASIAS CALL FOR NEW RULES
OF CARRIER ENGAGEMENT
ASlAPAClllC lS HOML 1O 1HRLL Ol 1HL WORLL'S 1OP1LN LCONOMlLS, 8U1 l1S MARKL1S ARL
COMPL1l1lvL ANL CARRlLRS MUS1 lNNOvA1L lAS1LR 1O COM8A1 SHRlNKlNC MARClNS.
markets are China (including Hong
Kong), followed by Japan and Singapore.
Of the three largest, Singapore has
grown the fastest over the past fve years,
explains TeleGeographys Williams. Tis
is unsurprising since the traf c of many
of the hottest markets in south east Asia
pass through it. However, falling prices
and slowing growth are making business
more challenging.
According to Williams, prices for
transport are falling across the region,
while overall IP traf c has also slowed in
recent years, making price declines more
troublesome for sellers.
Price declines are normal for the
telecoms market (or at least expected), but
to really measure their impact, you have to
take into account the capacity sold. If you
had a 33% price decline and a 50%
increase in volume, youd be making less
per unit, but would make the same
amount overall. However, prices have
continued to decline and volumes have not
made up the diference.
Epsilons Hipp, for example, has
witnessed the huge shift from
traditional TDM to Ethernet or IP-based
services, and believes that because new
technologies such as Carrier Ethernet are
typically touted as being cheaper, price
erosion is inevitable.
A lot of expensive SDH is being
cancelled and replaced by cheaper Ethernet
services and the problem is that you get far
less dollar per megabit than in the past,
he says. Everyone has big issues in
defending margins and market share, while
dramatic price pressure remains.
Shifting focus
Up until recently, the emphasis for
Epsilon had been on getting people on the
ground at the main exchange hubs
namely Singapore and Hong Kong. Now
it is looking to go deeper into the
countries of Asia-Pacifc to ofer services
on a local basis. Epsilons strategy is being
shaped by the need to better support
enterprise services.
Although it does not sell to enterprise
customers directly, it has a strong focus
on providing global last-mile solutions
for carriers so that they can in turn ofer
this connectivity to their domestic or
enterprise customers. Indonesia has been its
T
he Asia-Pacifc region continues to
prove an eclectic mix of opportunity
and risk. Te opening of Myanmars
telecoms market to foreign investment
captured headlines worldwide last year, as
did the dip in Indias economy, which
exposed some of the regions shortcomings.
Myanmar garnered a lot of attention, as
it was perceived as the last gold mine of
Asia-Pacifc, says Andreas Hipp, CEO,
Epsilon. A lot of attention and investment
has gone in and fnally the mobile licence
has been issued. But looking at how long
that took to unfold and given its not so
easy in the execution, theres still a lot of
work to be done.
Hipp expects things to slowly start to
fall into place for Myanmar. However, he
believes the economic situation in India,
coupled with a 2G licensing dispute, has
meant investors are now a little more
sensitive to risk: India took a hit and it
has certainly put more caution into
everyones mind especially on the
infrastructure side. But the whole
investment mood in the industry is a
little more dampened, and we are not
seeing the type of big announcements
weve seen before.
Boost to potential capacity
Capacity build-outs in the region have
continued nevertheless, with a number of
proposed submarine cables making progress.
Construction of SEA-ME-WE 5 started in
March, with the system expected to enter
service in 2016, while the Bay of Bengal
cable connecting India, Malaysia and
others should enter service by the end of
this year. Te Malaysia-Cambodia-
Tailand cable is expected to enter service
in 2015, and the Asia-Pacifc Gateway
(APG) cable that runs from China to south
east Asia is planned for service in 2015.
Not all of the cables planned will end
up being built, but there seems to be plenty
of interest, says Cody Williams, research
analyst at telecoms market research frm
TeleGeography. Tere are also several
planned cables in Oceania, and on the
trans-Pacifc route, which hasnt seen a new
cable build since Unity in 2010.
Pacnet claimed a frst for the region with
deployment of an optical mesh network
with 100G technology on its EAC Pacifc
system in January this year. Te carrier has
also launched the Pacnet Enabled Network
(PEN) a fully automated software-
defned network (SDN) in data centres
across Australia, Hong Kong, Japan,
Singapore, and the US.
Many markets in Asia-Pacifc are
expanding connectivity simply to get more
people connected to the internet. Te
region now has 307 million broadband
subscribers and a household penetration of
31%. Growth in bandwidth usage stood at
44% over the past fve years according to
TeleGeography, with the fastest-growing
markets being Myanmar, followed by
Cambodia, Sri Lanka, Indonesia and
Nepal [see graph below]. Te largest
Fastest growing IP markets in Asia
Myanmar Sri Lanka Cambodia Indonesia Nepal
50%
150%
100%
200%
C
o
m
p
o
u
n
d

a
n
n
u
a
l

g
r
o
w
t
h

(
2
0
0
9
-
2
0
1
3
)
Source: TeleGeography (www.telegeography.com)
31 |
capacitymagazine.com capacity
In collaboration with
ahead of the curve: asia-pacifc | 32
about this article or Renesys, contact Bob Fletcher, VP of
worldwide sales, at: [email protected] www.renesys.com
For more information
Rank Network Service Provider Movement
1 NTT Communications
2 China Telecom 4
3 Verizon Business
4 Tata Communications 1
5 PCCW Global 4
6 Level 3 Communications 1
7 SprintLink Global Network 5
8 Deutsche Telekom
9 AT&T 4
10 Cogent 4
Asia wholesale rankings
In the spotlight:
Te Asian wholesale ranking dynamics are once again
dominated by Chinese internet growth. NTT Communica-
tions retains the number one spot in Asia-Pacifc, but China
Telecom is closing the gap quickly, climbing from sixth to
second in the last 12 months. China Telecom also moves
closer to Tier-1 status, as Renesys reclassifes long-time
transit provider Sprintlink as a China Telecom peer. China
Telecoms last tagged transit provider, Verizon Business, will
likely face similar reclassifcation of what has become a very
small, specialised transit relationship. PCCW Global had
substantial customer wins in the last 12 months, picking up
Vietnams Viettel and Vietnam Posts and Telecoms, and
selling more transit to Japans NEC Biglobe and Koreas
Hanaro. AT&T is providing substantially more transit to
China Unicom and Korea Telecom, and enters the Asia top
10 wholesale rankings at number nine.
main focus, with the next countries being
Japan, Tailand, Malaysia and Australia.
Our expansion has become more
project-based, as the market is too uncertain
to go and build a PoP without the additional
business to back that up, continues Hipp.
Pacnet has placed strong focus on
meeting the compute, storage and
connectivity demands of content, cloud
and enterprise customers, with an
expanding network of data centres across
Singapore, Hong Kong, Sydney and
mainland China. It also supports Amazon
Web Services (AWS) Direct Connect,
enabling customers hosted at its Tier-3
data centre facilities in Singapore, Sydney,
and Tokyo to establish dedicated private
network connections and build and
manage hybrid cloud computing
deployments. According to Cardi Prinzi,
president of global markets at Pacnet,
China is amongst the markets presenting
the greatest opportunities for Pacnet over
the next 18 months. Under a partnership
with China Telecom, the company will
establish PoPs in Pacnets Tier-3
Chongqing Data Center, CQCS1. It has
also inked strategic partnerships with
China Unicom and China Mobile.
We are the only foreign-invested
company to have been issued a licence to
provide data centre network services in
Chongqing, China, says Prinzi. Te
Greater Mekong Subregion also presents
great opportunities for connectivity and
service expansion for us, due to its
growing demand for networking services.
For those serving multi-national
corporations (MNCs) in Asia-Pacifc,
cloud and enterprise services are shaping
up to be a key battleground moving
forward, while Hong Kong and Singapore
are currently hives of data centre activity.
Battle of the clouds
Asia-Pacifc is one of the fastest-growing
regions in the world, if not the fastest, and
every MNC has an Asia-Pacifc focus these
days, says Adrian Ho, principal analyst of
enterprise telecoms, Ovum. We have
three of the top-ten largest economies in
the world (Japan, China, and India), as
well as some of the fastest-growing
(Indonesia, Vietnam) so a lot of MNCs
are investing here and enterprise services
are growing across the board as a result.
Te biggest challenge warns Ho, is that the
region is ferociously competitive.
Carriers are also now fghting against new
types of competitor.
Everyone is focussed on Asia-Pacifc
and you have to work much harder for
your dollar, since all the global and
regional players are competing for the
same business. As carriers enter the ICT
world, they are competing against major
systems integrators who have more
credibility, and a lot of best-of-breed
vendors in the cloud services space.
Andreas Hipp at Epsilon concurs: I
personally have never seen an industry
changing so much in the space of 12
months, where industry players from other
segments be it software, data centres, or
hardware are all moving into a space
under the cloud umbrella. Everyone is
forced to provide an end-to-end solution
to the customer, so carriers are facing
tough competition from major blue-chip
companies that have a global ofering and
the scalability to compete.
According to Ho, the key question
carriers should be asking themselves now
is whether or not they are innovating fast
enough to compete aggressively on a level
playing feld with ICT service providers.
Currently, the answer is no they are
losing the game on almost any single
major technology out there, Ho says.
However, Ho highlights that most IT
vendors do not own networks. With many
enterprises wanting secure cloud services via
VPN access, carriers do have an advantage.
Tis has driven instances of partnering,
such as SingTel and BT both partnering
with Microsoft to ofer cloud services,
while Equinix has teamed with IBM.
Tese are the types of opportunities
that will start to evolve, says Ho. If you
are entering into ICT, you need strong
integration skills and strong professional
services capability. Crucially, they need to
recognise that the traditional telco rules of
engagement dont work in the IT world,
which is all about channels to market.
Right now, carriers need to change their
mindset and ensure they have the ability
to scale, and scale very quickly.
RELATED EVENT
Capacity Asia 2014,
18-20 November 2014, Bangkok
www.capacityconferences.com/Capacity-Asia
*These rankings were taken on June 1 2014 and indicate year-on-year change.
june/july 2014 capacity
33 |
of implementing regulatory decisions, a report from analyst frm
BuddeComm reads. At the same time, on a broader front, there
is no avoiding the fact that Indonesia must also continue to deal
with a range of social, political and economic issues that have
proved problematic over the years.
Corruption and government bureaucracy have long been
factors deterring potential investors with the risk of political
insecurity also looming in the background but it is now hoped
to have reached a level of stability.
A sovereign state and the largest archipelagic nation in the world,
Indonesia is the worlds fourth most populous country and after
a period of political instability its developing
telecommunications market is beginning to refect this.
PT Telekomunikasi Indonesia, or Telkom Indonesia, is the
incumbent operator, with a number of subsidiaries in the country
including Telin and Telkomsel; the latter of which has maintained
a strong presence in Indonesia despite increased competition from
secondary operators XL Axiata and Indosat.
Te country as a whole has been placing a heavy focus on
expanding and upgrading its infrastructure over the past 12
months, and although it is yet to implement commercial LTE
services, operators are acting on the evident demand for
connectivity and, more notably, data. Demand for data has been
growing at a steady pace worldwide and Indonesia is no
exception. Telcos across the country including Telkom
Indonesia, Telkomsel and telecoms tower provider Sarana Menara
Nusantara (SMN) have been cashing in on high-speed network
upgrades and expansions in a bid to manage these demands.
In January this year, Telkomsel upgraded its nationwide 3G
network in partnership with Finnish vendor Nokia Solutions and
Networks (NSN). Te upgrade was intended to deliver higher-
quality voice and data services, as well as better network capacity,
speed and coverage for Telkomsel customers. It followed an LTE
trial in Bali, Indonesia, late last year, which demonstrated speeds
of 70Mbps on the 1800MHz GSM band. Te company is
working on its commercial launch of LTE services, predicted for
later this year, and as well as developing its network and presence
in the country, Telkomsel is looking to enhance its ofering with
the inclusion of machine-to-machine (M2M) services.
Last December, Telkomsel partnered with US-based M2M
specialist Jasper Wireless for the delivery of M2M connectivity to
enterprises in Indonesia. Te deal followed a similar agreement
between XL Axiata and Ericsson earlier last year for M2M services
and Alfan Manullang, GM for business development at
Telkomsel, says that the Indonesian economy is becoming
increasingly reliant on such advanced global technology.
It seems international investors are also starting to take note of
these opportunities in Indonesia, particularly Telstra, which
signed a memorandum of understanding (MoU) with Telkom
Indonesia in January 2014. Te MoU was non-binding, but
promotes the aim of creating a joint venture in south east Asia to
deliver network services to the region.
Terms of the agreement state that the joint venture will be sole
provider of network applications and services (NAS) in Indonesia
for both Telkom Indonesia and Telstra.
Indonesia is a fast-growing NAS market and we believe the
best way to make inroads is by partnering with a well-recognised
and respected local carrier, says Brendon Riley, group executive
of global enterprise and services at Telstra.
As well as strengthening its international bonds, Telkom
Indonesia has been upgrading its regional submarine cable
architecture and in March, upgraded the PT Telkom 3rd Route
Submarine Cable in partnership with Huawei Marine Cable. Te
PT Telkom 3rd Route is one of three existing routes providing
capacity for growth in Asia-Pacifc region, and the upgrade has
enabled the implementation of eight additional 100G channels,
as well as 800Gbps of capacity.
Despite evident potential in the market, analysts believe
Indonesia has a number of challenges to overcome before it can
really become a contender in the global telecoms market.
Two of the more signifcant challenges are the crowded
operator market, especially the mobile segment, and the slow rate
Mobile, fixed line & broadband statistics
Economic indicators
2011 2012 2013 (e)
Fixed-line subscribers 38.6 million 38.6 million 41.0 million
Internet subscribers 4.5 million 5.5 million 6.5 million
Mobile subscribers 259 million 284 million 307 million
2010 2011
Telephone subscribers, total (per 100 inhabitants) 105.1 113.7
Internet users (per 100 inhabitants) 10.9 18
GDP per capita (current US$) 2952 3495
GNI: Gross national income per capita (current US$) 2869 3395
GDP: Growth rate at constant 2005 prices (annual %) 6.2 6.5
Source: TeleGeography
Source: United Nations Statistics Division (UNdata)
Indonesia
capacitymagazine.com capacity
geographical focus: indonesia | 34
Source: Telegeography estimates Source: Telegeography (www.telegeography.com)
Dial-up internet subscribers (millions) International internet bandwidth (Gbps)
Mobile subscriber growth (millions)
COUNTRY
INFORMATION
253,609,643 (2014 est)
Population
50.7%
Urban population
(of total population, 2011)
1,904,569 km
2
Land and inland water area
$867.5 billion (2013 est)
GDP
Jakarta
Capital
Indonesian rupiah (IDR)
Currency
Sources: CIA World Factbook
Sources: Operators
0
100
200
300
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Source: Telekom Indonesia, Telegeography estimates
Broadband subscribers (millions)
0
1
2
4
3
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Source: Telekom Indonesia
Fixed-line subscribers (millions)
0
10
20
30
40
2008 2009 2010 2011 2012 2013
2008 2009 2010 2011 2012 2013
0
10
20
40
30
0
100
200
300
400
500
2008 2009 2010 2011 2012 2013
Source: Telegeography (www.telegeography.com)
International voice traffic
(billions of minutes, total includes both TDM and VoIP)
0
1
2
3
4
6
5
2008 2009 2010 2011 2012
Total outgoing minutes Total incoming minutes
june/july 2014 capacity
35 |
Figure 1: Global compute cost trends (cost on logarithmic scale)
Figure 2: Global storage cost trends (cost on logarithmic scale)
Figure 4: Average global smartphone pricing trends
Figure 3: Global bandwidth cost trends (cost on logarithmic scale)
GLOBAL INTERNET
TRENDS
According to a Global Internet Trends
report published in May by Mary Meeker,
a partner at Kleiner Perkins Caufeld &
Byers (KPCB), global compute costs have
declined 33% annually between 1990 and
2013. Te decreasing cost curve is said to
enable computational power at the core
of digital infrastructure.
At the same time, global storage costs have
declined by 38% annually between 1992 to
2013. Te decreasing cost of digital storage is
said to enable the creation of greater
quantities of richer digital information.
Smartphone costs have declined by 5%
annually between 2008 and 2013.
According to Meeker, the continuous
decline of smartphone prices is increasing
availability to the masses.
Bandwidth costs worldwide are said to
have declined by 27% annually between
1999 and 2013.
Te declining cost of bandwidth is said
to enable the faster collection and transfer
of data to facilitate richer connections and
interactions.
Source: KPCB - John Hagel, Deloitte, 5/14
Source: KPCB - John Hagel, Deloitte, 5/14
Source: KPCB - IDC, 5/14
Source: KPCB - John Hagel, Deloitte, 5/14
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capacitymagazine.com capacity
data: global internet trends | 36
Figure 5: Objects stored using Amazon S3*
Figure 6: Global TV vs PC (desktop + notebook)
vs mobile (smartphone + tablet) shipments
Figure 7: What connected device owners are
doing while watching TV in the US
Figure 8: Global mobile share of online video plays and time
Consumer viewing habits are changing
rapidly, as Figure 7 illustrates how 84% of
9,448 respondents use a tablet,
smartphone or other streaming capable
device while watching TV. Tis is double
the fgure recorded two years ago.
More and more video is being
consumed on mobile devices, as
illustrated in Figure 8.
Te mobile share of online video
plays and time has grown 22%
between 2011 and 2013.
Te increase of objects stored using
Amazon Web Services (AWS) continues to
illustrate the phenomenal growth of cloud.
In the Q2 of 2013, 2,000 billion objects
were stored using Amazon S3.
*Please note: S3 is AWS storage product
and used as proxy for AWS scale and growth.
Figure 6 illustrates how smartphone and
tablet shipments have grown four to fve
unit volumes above TV and PC shipments
in the space of ten years since their
inception.
Source: KPCB - Nielsen Connected Devices Report, Q3-13
Source: KPCB - Ooyala Global Video Index
Source: KPCB - based on company data
Source: KPCB - TV unit shipments per NPD Display Search
(2004-2013) and Phillips (1999-2003). PC (laptop & desk-
top), smartphone and tablet unit shipments per Morgan
Stanley research
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2006
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TV PC (desktop & notebook) Mobile (tablet & smartphone) Smartphones Tablets
Smartphone
Surng Lhe web
Shopplng
Checklng sporLs scores
Looklng up lnfo on acLors, ploL, aLhleLes eLc
Lmalllng/Lexung frlends abouL programme
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programme on soclal medla slLes
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voung or sendlng commenLs Lo a llve programme
WaLchlng cerLaln 1v programme because
of someLhlng read on soclal medla
Tablet
2007 2003 2011 2001 2009 2005 2013 2000 2008
Q4
2011
Q2
2012
Q1
2013
Q1
2012
20% 40% 60% 80%
Q4
2012
Q4
2013
Q3
2012
Q3
2013
Q2
2013
2004 2012 2002 2010 2006
Q4
2008
Q4
2011
Q2
2013
Q4
2007
Q4
2010
Q3
2012
Q4
2009
Q1
2012
Video plays vldeo ume
capacity
A life in the day of...
june/july 2014
37 |
BT has appointed Les Anderson
as the companys new VP of
cybersecurity. Anderson leaves
his role at GCHQ, the UK
governments signal intelligence
and security agency, where he
developed IT security capabilities.
Cyberattacks have been on the
rise at large multinational
corporations and BT is focussing
on its security unit.
Now, more than ever,
cybersecurity needs to be firmly
on the radar of both governments
and boardroom executives. I am
delighted to be joining a leading
global communications company
that has security at the top of its
agenda. I am looking forward
to joining BT and starting the
next chapter of my career,
said Anderson.
Les Anderson
Belgacom has named Renaud
Tilmans as EVP of customer
operations and member of the
management committee, effective
immediately. Tilmans role will
see him leading the new business
unit customer operations, where
he will be in charge of
regrouping operational after-
sales activities, which are
currently spread among different
business units, aligning processes
and generating synergies in
activities. The move is designed
to improve Belgacoms customer
processes and to step up cost-
effectiveness. He first joined
Belgacom in 1993 and since 2012
has been leading the companys
customer operations division of
the service delivery engine and
wholesale business unit.
Mobile service provider
OnMobile Global has appointed
Rajiv Pancholy as its new CEO
following the resignation of
co-founder Mouli Raman earlier
this month.
The appointment was effective
June 2 and Pancholy joins the
company with approximately
30 years experience in the
telecoms industry.
Rajiv is a great leader and has
done some outstanding work in
the telecommunications domain,
OnMobile said in a statement.
As well as founding his own
company, TTP Media, Pancholy
has held high-level roles at TenXc
Wireless, a company specialising
in antennas, and Mitec Telecom, a
designer and manufacturer of
wireless network products.
The National Broadband Network
Company (NBN Co) has named
Stephen Rue as the new CFO, as
part of CEO Bill Morrows plans to
restructure the company.
Rue, who previously worked
with News Corp Australia, will
take up his role from July 1.
Stephen is a well-credentialed
senior finance executive who
has managed a business
through a complex and high-
profile transformation. His
transparent approach is welcome
at a time NBN Co continues
to accelerate on its delivery,
said Morrow.
The company also appointed
Dennis Steiger as the new CTO,
as of July 21. Steiger leaves his
post as CTO at Canadian telco
Shaw Communications.
Renaud
Tilmans Rajiv Pancholy Stephen Rue
C
ompared to a billion-dollar
multinational, progress and success
is much more visible when working
for a startup company, says Chris Halbard
about his recent appointment at Synchron-
oss. Cloud solutions and software-based
activation company Synchronoss provides
innovative software to telcos, delivering
solutions allowing operators to connect,
synchronise and activate connected devices
and services.
Te company has three product lines: a
network services division which helps
carriers with inventory, network simplifca-
tion and service capability; an activation
division, which ofers a combination of
software and professional services, working
with operators like AT&T who need to
launch a new device or new network; and
a cloud division, which provides operators
with the ability to sync, store and share
data, branded by the operator and
allowing them to ofer to add cloud
storage and services to their portfolios.
Synchronoss has been around since the
early 2000s and was foated on the
NASDAQ in 2006.
Te company already has close ties with
companies like AT&T and Verizon in
North America and Halbard is in charge of
mirroring that success internationally.
Since becoming EVP and president of
international since March this year,
Halbard gets a thrill from tracking the
results for the growing New Jersey-based
startup. If we can demonstrate that
beachhead clients are scaling up with
adoption of revenue, if we can add clients,
if we can be more visible in the market,
these are all things that easily prove that
we are making real progress, he says.
Halbards role is to grow the company
outside of North America, where he is
responsible for selling, building and
delivering products and customer
experience internationally. We are not a
standalone business internationally. It is
our ambition to turn a Northern American
business with some international
beachheads into a global business, he says.
Halbards role entails many diferent
responsibilities and he spends most of
his time in airports and balancing diferent
time zones. I hover between customer
relations all over the world, development
centres in Dublin and India, and
reporting back to headquarters in New
Jersey, he says.
Te $350 million startup is constantly
on the lookout for innovation. We are
not allowed to stop. We are NASDAQ
quoted, so we have to keep hitting
quarterly numbers, Halbard says.
However, the company needs to balance
making progress and change, without
risking the business. We need to ensure
we know what the right amount of change
is at the right time, he comments.
Chris Halbard, EVP and president of international at Synchronoss
tell us your move
contact us to tell us about
your moves or new position
[email protected]
capacitymagazine.com capacity
appointments | 38
Ericsson has appointed Elaine
Weidman-Grunewald to a
position on the companys global
leadership team. The move also
sees her named as the head of
Ericsson Response, the
companys volunteer emergency
response organisation.
Weidman-Grunewald joined
Ericsson in 1998 and serves as VP
and head of sustainability and
corporate responsibility. She is
responsible for several public-
private partnerships which explore
the use of Technology for Good.
With the appointment of Elaine
to our global leadership team we
are reinforcing the importance we
place on robust governance and
processes in place to conduct
business sustainably and
responsibly, said Hans Vestberg,
CEO of Ericsson.
Telenor has appointed Michael
Patrick Foley as CEO of the
companys Pakistan operations
Replacing Lars Christian Iuel,
Foley assumed his new role on
July 1 2014. Foley leaves his role
as CCO of the Canadian State
Lottery.[Foleys] knowledge and
experience within telecoms,
internet and mobile financial
services make me confident that
he will drive new innovation,
quality mass-market services and
strengthen Telenor Pakistans
capabilities in delivering internet
for all, said Sigve Brekke, EVP
and head of Asia at Telenor.
With Michaels leadership
qualities and vast international
experience I am certain that we
will continue to see strong results
from the Telenor Pakistan team
going forward.
Telekom Austria appointed
Siegfried Mayrhofer as CFO
on June 1, 2014. Mayrhofer, who
will serve a one-year term,
succeeds Hans Tschuden, whose
contract expires on May 31,
2014. He joined the company in
2000 and has held several
management positions in
controlling and accounting. He
is the present CFO of subsidiary
A1 Telekom Austria, a position
he will retain.
Im very pleased that with
the appointment of Siegfried
Mayrhofer we were able to fill
the CFO position from within the
group. This underlines the
current high level of
managerial competency
in-house and is a sign of
continuity, said Rudolf Kemler,
chairman, supervisory board.
Custom Connect has named
Rutger Bevaart as the companys
new CTO.
Bevaart has held positions with
KPN Research, KPNQwest and
CMG. In 2005 he set up his own
consultancy specialising in
helping enterprises solve global
connectivity challenges, where he
worked with companies including
KPN Mobile, Tele2, Achmea,
Heineken and T-Mobile.
We have been working with
Rutger for a number of years
and, as an external consultant,
he has helped design and
implement some of the most
innovative connectivity solutions
our customers have ever seen,
regardless of the network
complexity involved,
commented Olav van Doorn,
co-founder of Custom Connect.
Elaine
Weidman-
Grunewald
Michael
Patrick Foley
Siegfried
Mayrhofer
Rutger
Bevaart
GasLINE has a Germany-wide bre-optic cable network
of more than 10.000 km. More than 100 international and
national companies rely on this network which links all
major telecommunication hubs and connects telehouses
and POPs in more than 100 cities. The network is gradually
expanded in line with customer needs.
For international connections, the GasLINE network links
up with dark bre networks in neighbouring countries.
This offers the opportunity to connect your systems with
capitals like London, Paris, Warsaw, Vienna and other
European cities.
GasLINE GmbH & Co.KG Contact: Susanne Wesselmann
P.O.Box 1119 Phone: +49 (0) 28 34 / 70 32 - 43 96
D - 47638 Straelen [email protected]
Germany www.gasline.de
june/july 2014 capacity
39 | corporate social responsibility
AT&T: Aspire
Q&A with Nicole Anderson, executive director ofphilanthropy at AT&T
What are the aims of
AT&Ts Aspire programme?
Launched in 2008, the Aspire programme
is focussed on helping students to graduate
from high school who are at risk of dropping
out early, and to prepare them for college
and future careers. Te programme was
initiated as a result of a direct request from
CEO Randall Stephenson, who saw a need
in the community to have more children
fnishing high school. According to
reports, about one in fve students in the
US does not graduate high school.
We need an educated workforce to be
an innovative and successful company and
there is a great need to push children to
graduate from college and into careers.
We focus on students in the ninth and
twelfth grade (children aged approximate-
ly between 14 and 18). At the time of
launching there was not a lot of corporate
support for these ages in the US. Trough
Aspire, we have promised to invest $350
million in education between 2008 and
2016. Investing in education is one of the
most important things we can do for a
strong future and our goal is to get to a
90% graduation rate in the US by 2020.
How has the programme developed?
At the beginning, we engaged our
employees by organising a one-day job
shadow opportunity for children to see
what a day as an AT&T employee is like.
Tis has grown into the Aspire mentoring
academy. Under the mentoring academy,
we expanded the scheme to include online
mentoring and have collaborated with
non-profts targeting at-risk students to
ofer further mentoring opportunities.
We have more opportunities for our
employees to engage face-toface with a
mentee or online, or have them come to
AT&T of ces. Te Aspire programme now
also provides many funding opportunities
to initiatives, non-profts and charities
linked to education.
What projects has Aspire been part of?

A big part of what we do is seek major
change through technology and innova-
tion. Last year, we collaborated with
Georgia Institute of Technology College
and an organisation called Udacity in
order to build an online Master of Science
degree in computer science. Te whole
masters is done online through a platform,
and the aim of this is to increase access to
education, making it more inclusive for
everyone. It is accredited through Georgia
Tech and this is a great alternative to
getting a low crust masters degree.
Classes began in January and 401
students were ofered admission during
the spring 2014 semester. We have also
worked with an organisation called
GameDesk, a Los Angeles-based non-
proft, which with the support of a $3.8
million dollar Aspire contribution has
developed a platform accessible from
everywhere called Educade.
Launched in September last year,
Educade is a teaching portal which has all
types of educational games to keep kids
interested in school. Te portal, which
teachers can access through a website,
embeds lessons on mathematics and
science or socio-emotional learning
through games and provides an online
library of free lesson plans for a diferent
range of ages and subjects.
How important is it to get children
interested in studying science and maths?

STEM education (the felds of sci-
ence,technology,engineering, andmath-
ematics) is a priority for us as part of the
Aspire initiative. We work together with a
foundation called We Teach Science, an
organisation which aims to inspire
students to excel in maths and science. We
have partnered with them to help deliver
an e-mentoring programme which is
designed to get children comfortable with
maths and science. In addition, we are
tell us your story
Share your latest CSR initiatives
by contacting:
[email protected]
looking for initiatives that try to bring
more girls into the STEM feld, as
we know they are defnitely underrepre-
sented in these areas. Tere is a general
trend for girls to stop taking maths and
science in high school and only a small
percentage continue to study a STEM
discipline in college.
Does AT&T ofer similar
programmes outside of the US?

AT&T has recently launched a similar
programme in Europe. Te Aspire
initiative is very popular in the US and
when those employees who have been part
of the programme and had a great
experience get international assignments
they want to take that experience abroad
with them. Aspire was launched for a
domestic issue of graduation rates in the
US and we have now made it ft for what
works in the international community.
Te Europe initiative is more focussed
on addressing unemployment rates among
youth. Tis involves collaborating with
local schools to help with rsum building
and interview skills, or having the
children spend a day with an AT&T
employee abroad.
It has been exciting to see our employees
embracing a local initiative and giving an
international fare to the programme.
AT&Ts Aspire programme helps at-risk students remain in education
june/july 2014 capacity
41 | market watch
Satellite provider O3b
Networks will launch four
satellites on July 10, following the
launch of a number of satellites
earlier this year. The four
satellites will be launched into
the O3b constellation by
Arianespace, in a circular orbit at
an altitude of 8,062km. The July
launch completes an initial
constellation designed to
connect those countries and
people with poor quality or no
internet services hence the
name O3b, which stands for the
other 3 billion.
A consultation on proposals
from UK regulator Ofcom for
further cuts to the countrys
mobile termination rates is set
to close on August 13 this year. A
new mobile control charge would
apply to all operators and result
in termination rates dropping to
less than half a penny, as Ofcom
attempts to lower costs for
consumers. Mobile termination
rates in the UK have fallen rapidly
since Ofcom first imposed a
control on the rates charged to
the four largest network
operators in 2011. Industry rates
have since fallen approximately
80%, from 4p per minute to
around 0.8p per minute.
Brazil is set to hold another 4G
auction in August this year.
Existing spectrum in the country
is occupied by analogue
broadcast TV and the auction is
expected to free it up for 4G
services. The auction was
approved in May this year and
new rules could boost the
minimum price of permits to
between R$12 billion and R$15
billion ($5.2 billion and $6.5
billion) from R$6 billion. The
auction could not be arranged
ahead of the FIFA World Cup
being held in locations across the
country this summer.
August looks set to be a busy
month for spectrum auctions, with
Thailand also planning activity.
Thailands telecoms regulator,
the National Broadcasting and
Telecommunications Commission
(NBTC), has revealed that the first
auction will be held in August for
two 1800MHz licences, and a
further auction will be held in
November for a 17.5MHz licence
in the 900MHz band. TrueMove
and Digital Phone hold the
existing 1800MHz licences, which
are due to expire in September.
Although the winning bidders
would only be able to use the
licence once its previous
agreement expires, NBTC said it
would grant equipment permits
to allow the winners to start early
network construction.
ACT LOCAL
Tim Phillips
T
he customer is truly always right,
says Jim Leach, VP of marketing
at RagingWire Data Centers,
Customer feedback through NPS is
fundamental to our business planning.
RagingWire is one of an increasing
number of telecoms companies that
measure what its customers think of it
through the metric called Net Promoter
Score, or NPS. At the end of 2012, it
claimed the highest NPS (+59) in the
whole data centre industry.
Customer satisfaction has been a
long-term problem for many telecoms and
technology companies. Te American
Customer Satisfaction Index, which tracks
this for companies and sectors, shows that
satisfaction with fxed-line providers is 5%
lower than the national average for all
companies, and has been in long-term
decline since the 1990s. ISPs and wireless
providers have similarly bad numbers.
In the experience of Rob Markey,
the head of Bain Consultings Customer
Strategy & Marketing Practice, companies
often ask too many questions with
the best intentions and so measure
their failures in detail without acting on
them at board level.
We all say we want actionable
information, he says. But often thats
just a code for too much detail.
Fans of NPS, which Markey helped
devise in 2003, say it solves this problem.
It is a one-number metric: you ask your
customers or business partners how likely
they would be to recommend you on a
scale of 0 to 10. People who answer 9 or
10 are promoters, those who answer 6 or
below are detractors, and you subtract the
percentage of detractors from the
percentage of promoters to get your NPS.
It has many advantages: the survey is
quick to do, the score is easy to
understand and can be built into a process
of continuous improvement. Even though
its job is to build and operate data
centres, which seems light years away
from the operations of companies like
Lego and Chick-fl-A, Leach claims the
number is a useful device for creating
improvement at RagingWire.
Te telecoms industry, however, is flled
with companies using misguided
applications of NPS. While NPS is
successfully used in some B2B
environments (RagingWire is an example),
the exact question to ask is often a
problem. Recommendation for a $10m
contract is not the same as for takeaway
chicken. Bain Consulting recommends
alternative questions, such as how likely
are you to continue to purchase from us?
or how likely are you to recommend to
colleagues that we do more of our business
with you? as more useful measures for
B2B NPS implementations. Also, having a
single number can lead to executives trying
to move the number in the short term,
rather than improve the business process
especially if a bonus is attached to it.
But by far the largest problem is that
NPS, used by thousands of businesses
worldwide, is often considered the outcome
of, rather than the input to, a programme
of improvement. Markey says he often sees
his innovation being used, and wishes they
had just asked him how to do it frst. Te
biggest problem, he says, is that the
measurement does not create an action.
Te same thing happened with
six-sigma or re-engineering: people wish
they could get strong just by measuring
things, without closing the loop, he
explains. No one has ever become
stronger simply by measuring the
circumference of their biceps.
Satisfed customers?
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