What is the main strategy of Deutsche Telekom IBU and its International Carrier Sales & Solutions (ICSS) division for 2018?
Our main strategy for 2018 is growth. We continually seek and evaluate opportunities to broaden our skill-set and to offer our clients the products they will need tomorrow. We understand that there will be technological and market changes ahead of us that will transform how international wholesalers operate. That is why we need to become more flexible and agile, to embrace change and enhance our ability to innovate. At the same time, we continuously look at our current processes and drive digitisation to offer standardised and efficient services to our customers.
What will be the company’s main focuses for the coming year, and what does it hope to achieve over the course of 2018?
For 2018, we have three main topics – security, digitisation and IoT – each of these at a different stage of maturity and always with a highlight on quality. The technical development of our security portfolio is very advanced – we already offer different security packages to our clients, providing a high level of customisation and efficient implementation. In 2018, we will work on digitising more complex processes, which will lead to a significant impact on lead times in order implementation, increased customer satisfaction and thus more clients.
IoT is probably the biggest megatrend we see, which will have a wide-ranging impact on the international wholesale business. However, with numerous possible application areas, the challenge is to identify the ones that will have the biggest potential for us – that is, for management of international connectivity and technologies that enable IoT. At the current stage, we have developed use cases that will probably be implemented during the next year. Aside from this, we aim to increase industry cross-cooperation to overcome challenges and more quickly develop innovations.
How does IBU/ICSS plan to grow ahead of the rest of the industry in 2018?
ICSS plans to grow by means of operational excellence. Our target vision is to become the most customer-oriented international wholesale operator. To achieve this, ICSS focuses on the digitisation of daily business operations, so that we can offer standardised, as well as enhanced, services to clients, while at the same time simplifying our own processes. In this area, lead times for order management and order implementation are expected to undergo further improvements.
We already offer solutions that set us apart from the rest, and we intend to take advantage of big data and AI to keep agile and reduce costs – for ourselves, as well as our clients. Of course, we also closely follow ongoing market transformations to expand and adapt our portfolio in accordance with changing needs, and we are looking into entirely new areas with large growth potential.
One example is our work as a main partner in the European Aviation Network (EAN), which brings reliable and stable broadband to passengers flying across the skies of Europe. WiFi in the skies has never before been able to achieve the quality offered by EAN, which is comprised of a satellite and a complementary ground-based LTE solution (see box: Innovation: European Aviation Network (EAN)). To develop innovations such as EAN, we have placed an emphasis on an organisational culture that empowers our people to think about and try untested solutions.
What are the new ways that the company can do this, and how is it innovating to achieve those aims?
There are long-term culture and strategy programmes within ICSS that are of essential importance to realise these aims. As I said, in recent years, ICSS has implemented an innovation-oriented culture that fosters an entrepreneurial mindset, self-determination and personal responsibility among all ICSS employees. Only when everyone within the company feels empowered and motivated to help the organisation move forward are we able to truly tackle upcoming challenges.
Digitisation through the use of data analytics will also help us reach our goals by, among other benefits, making our processes more efficient. Additionally, we place importance on building strategic partnerships to minimise the effects of increased business complexity, identify opportunities, and more quickly adapt solutions to prevailing needs.
What do you see as the main overall challenges ahead in the global wholesale industry for 2018?
The biggest challenge is that new technologies such as IoT, as well as big data and digitisation, will on the one hand influence how traditional wholesale is realised at an operational level, and on the other hand lead to completely new business models where international wholesale market operators, governments and other institutions have yet to reach an agreement on how these emerging markets are regulated. Because all of this is still under development, there is a dimension of uncertainty about how to offer these new services in the future. To complicate matters, as we all know, traditional service margins are declining and cannot be easily compensated by these new technologies.
But as with all challenges, there will also be business opportunities in the field of IoT connectivity. The wholesale market needs to take a close look and evaluate further options in this area. That’s why it’s more important than ever to observe innovations in the retail market – to be able to predict their impact on the global wholesale market.
How do you plan to overcome challenges in the market?
ICSS’s main approach to overcome challenges is to cooperate more intensively with our existing partners, strengthen industry collaboration among international carriers, set up business with fresh, new companies, and stay on top of technological progress relevant for the international wholesale market. We have a great advantage in that we are an integral part of a global retail-based carrier, Deutsche Telekom. This puts us in a position very close to the end user, to directly understand their needs and concerns, and therefore be an innovation facilitator.
What differentiates ICSS from its competitors?
In addition to what I already mentioned, we have some very solid, one-of-a-kind offerings in place. We launched our 360° Defense Strategy last year, after months of planning, which is the expansion of our existing security solutions (see box: Security: 360° Defense Strategy). We’re also helping our clients with A2P monetisation, for example with our SMS+ Protect solution that identifies and blocks spam, flood and fake SMS messages – and helps keep A2P revenues in the hands of their rightful owners.
With our comprehensive IPX platform under continual development, we are paving the way for forward-looking technologies such as IoT, M2M and 5G applications. ICSS is taking a close look into the developing fields of IoT and roaming, so that we can adapt our technology and meet customers’ expectations as advances take place. For example, to offer customised IoT solutions, we’re working on ways to make our IPX platform more specific and intelligent. There has been a rising demand for handling IoT traffic differently from other traffic, so we’re looking into possibilities here too. One of our great advantages over competitors is that we have more than a decade of experience in the A2P and IoT areas, and so are able to support the seamless integration of multiple technologies.
And in addition to all the innovations we’ve achieved, we’ve been cooperating with several Deutsche Telekom affiliates on rate alignments to stop damage from arbitrage. I could go on and on, but think that would need a second interview!
How do you see the global wholesale environment as changing in 2018?
The market has been in the midst of transformation for a few years and this is accelerating. Therefore, from our perspective, we do not see 2018 as being very different from the last one or two years. Again, many international wholesalers will try out new technological solutions for their daily businesses. Additionally, several of these will plan implementation of new business cases originating from emerging technologies – such as IoT, big data or digitisation. Both activities are necessary to determine the most promising opportunities and represent significant steps towards how the future international wholesale market will work out.
What factors will aid growth of the international wholesale market over the coming year, and how do you see it as changing and evolving?
Wholesale has always been driven by its respective retail market. In other words, the acceptance of certain technologies in the end-user market is also of vital importance to the wholesale market. We can’t exactly tell when it will happen, but we are convinced that there will be key changes to the global wholesale market as we know it today. Some markets such as global voice will decline further, whereas other markets such as IoT are at the very beginning of their existence.
To be more specific, I believe we will see an even stronger price decline of traditional services. Yes, traffic is exploding, but there is fierce competition and low barriers to entry. That means we, as ICSS, need to offer higher quality and better security than others. We have to take advantage of new technology opportunities, even though these will not totally compensate for the decline of traditional offerings.
There will be a great challenge to keep up with technology shifts, such as that of SDH shifting to Ethernet to SD-WAN, or from 3G to 4G to 5G. This is why we will need to move to automation and digitisation, and to become much more efficient and cost-aware than ever before – and all of this needs to be helped along through consolidation, innovation development and partnering. These factors will certainly fundamentally change the way we think, plan and operate – a process that is already well underway at ICSS.
