digital renewal: addressing transformational challenges and the monetization conundrum

8/4/2019 Digital Renewal: Addressing Transformational Challenges and the Monetization Conundrum

1/15

Telecom, Media & Entertainment the way we see it

9Digital Renewal: Addressing Transformational Challenges and the Monetization Conundrum

Digital RenewalAddressing Transformational

Challenges and the Monetization

Conundrum

Telecom & Media Insights

Issue 60


2/1510

Contents

1 Abstract 1

2 Introduction 2

3 Digital Renewal: Key Priorities for TME Players 4

Customer Relationship Renewal

Product Renewal 7

Infrastructure Renewal 8

IT Renewal 9

Operational Renewal 10


3/15



The Telecom, Media & Entertainment (TME) industry aces a series o challengesboth in growing the top line by nding new sources o revenue growth andalso increasing operational eciency to enhance margins. These challenges,while not new, are increasing as a result o the continually evolving consumerdemand, rapid technology developments, new business models, and increasingcompetition. The rise in data usage, uelled by the prolieration o mobile devicessuch as smartphones and tablets, is exerting tremendous strain on the network ooperators. In addition there is the challenge o operators to eectively monetize

this rapidly growing data trac. New business models and non-traditionalcompetitors are also increasing competition in the industry. In order to eectivelytackle these transormational challenges, telecom players have adopted anumber o diverse measures aimed at renewing customer relationships, networkinrastructure, operations, IT systems, and product management. We have assessedthese responses here calling it Digital Renewal.

1 Abstract


4/152

Telecom operators are acing a complex series o challenges as they seek togrow the top line in an era o economic austerity and market slowdown. Whencombined with the competitive complexity and the ever-increasing demand orbandwidth, operators are adopting a number o measures so as to prosper. In thischapter we discuss these measures. First, we assess some o the unique challengesthat are aced by telecom players.

Threat rom All-You-Can-Eat Bundles

The increasing consumption o bandwidth hungry applications and the demandor higher speeds is resulting in an unprecedented surge in the amount odata trac on networks. Global mobile data trac is expected to grow at aCompound Annual Growth Rate (CAGR) o 106%1 between 2010 and 2014.However, operators have not been able to successully monetize this rise in dataconsumption. For example, at 66% o total trac volume, mobile broadbanddongles contribute only 5% to the revenues o Vodaone Europe. Whereas, at23% o the total trac, voice contributes a signicant 73% to the operators topline2. This trend can be primarily attributed to actors such as the growing usageo ree online services which do not contribute to the operators revenues andthe increasing adoption o low priced, all-you-can-eat, bundled communicationsoerings.

2 Introduction

Global mobile data trafcis expected to grow at aCAGR of 106% between2010 and 2014

1 Cisco Visual Networking Index: Global Mobile Data Forecast Update, 2009-2014.

2 Enders Analysis, Mobile Data Economics: The Limit of Unlimited, September 2010.

Source: Informa, Mobile Europe Revenue Forecasts, 2009; Cisco, Cisco Visual Networking Index: Global Mobile TrafficForecast Update, 2009-2014; 2009 Infonetics Report: Service Provider CAPEX to Bottom in 2010, Investments to Rise in

2011, November 2009

Window of Opportunity for

Sustainable Transformation

2010 20122011 2013

5.8%

4 %

2.4%2.49 %

69.9

-0.68 %

1.04 %

1.6 %

0.69 %

661.2

356.2

168

Growth in CAPEX Revenue Growth Volume of Data

Widening spread

between costs

and revenue will

limit efficiency

of lean measures

Figure 1: Forecast of Mobile Service Revenue Growth in Western Europe (%),

Global Telecom CAPEX Growth (%) and Volume of Network Traffic in


5/15



3 Company Website.

While we see mobile operators starting to change their pricing strategies tomove away rom all-you-can-eat bundles, i this trend continues, the growth inservice revenues will not keep pace with the growth in network trac and theresulting Capital Expenditure (CAPEX) commitment (see Figure 1) requiredto upgrade the capacity constrained mobile and xed networks. As a result, inorder to generate returns on the network investments required to maintain a highQuality o Service (QoS), operators need to innovate on the top line to monetizethis network investment, while also enhancing operational eciency by reducing

costs and streamlining operations.

Threat rom New CompetitorsAnother challenge, which poses a potential threat to operators, is theinringement o online players in the traditional telco territory. The recentlyannounced Facebook-Skype alliance3 which will enable Skype users to call andsend SMS to their Facebook riends directly on their mobile phones and landlineshas the potential to cannibalize voice and SMS revenues o operators.

While it is oten easy to overstate the threat o these kinds o initiatives romnon-traditional competitors, their global scale, all embracing nature, and networkeect does represent a substantial threat i these kinds o services gain traction.

These types o transormational challenges, on top o the more traditional

competitive and operational challenges, do require a new set o responses. In thenext section we will discuss these responses in detail.


6/154

When assessing the range o response measures being adopted by telecomoperators, it is possible to group them into ve broad priority areas (see Figure 2):

Enhancing customer relationship

Upgrading inrastructure

Simpliying IT

Streamlining operations

Improving product liecycle management.

We have assessed these responses under the heading o Digital Renewal. In thesubsequent subsections, we detail the ve key elements o this approach.

Customer Relationship Renewal

Key Issues

There are two broad themes under the heading o customer relationship renewal.The rst o these is how to re-balance the acquisition and retention costs, and theassociated approach in light o the shit towards retention and away rom highvolume customer acquisition. The second is to revitalize the customer experience(see Figure 3) through the improvement o the online experience in terms o bothsales and service, and to improve the multi-channel experience so that customersare being oered a seamless experience across all channels. These twin challengesdrive the key activities o operators in this area.

As part o the customer relationship renewal, the online channel strategy, onlineperormance improvement, and multi-channel strategy seem to be the keypriorities or TME players. In the subsequent subsection we detail these key ocusareas.

3 Digital Renewal: Key

Priorities for TME Players

Source: Capgemini Analysis

Digital Renewal

How to respond to the

transformational challenges

driven by the increasing data

consumption, changes in

consumer behavior, emergence

of new technologies, and the

resulting monetization

conundrum

Renewal

IT Renewal

Product Renewal

Advanced life-cycle management

to drive and accelerate innovation,

improve launch capability and

reduce complexity across

the converged product, service

and tariff portfolio

Transformation of telecom

operators IT to reduce complexity

and cost in IT management,

processes and platforms across

fixed and mobile environments

Operations Renewal

Sustainable efficiency and

optimization of functional

performance to raise profitability,

ensuring operations efficiency of

current activities and creating

headroom to invest in expansioninitiatives and customers

Strategy and transformation of

marketing, sales and service to

revitalize the customer experience

across online and traditional

channels as the imperative shifts to

retention rather than acquisition,

enabling a true digital transformation

Customer Focus Technology Focus Operations Focus

Launch and monetization strategy

of new fixed and mobile networks

(4G, fiber) to support the launch

of new products and services,

and improve quality of service

Infrastructure Renewal

Figure 2: Digital Renewal Approach of TME Players


7/15



4 Forrester: US Online Retail Forecast, 2008 to 2013, February 2009.

5 Forrester: Its Time To Give Virtual Agents Another Look, March 2010.

6 Company Presentation.

7 Company Presentation.

Key Focus AreasOnline Channel Strategy

The online channel is emerging as the most ecient and cost eective customertouch point or TME players. In addition to aecting sales directly, the onlinechannel also impacts ofine retail sales. By 2013 online and online-infuencedsales are expected to account or 62% o the total US retail sales4. From a serviceperspective, the online channel is not only increasing in demand rom consumersbut also is a cost eective means o post-sales support. When compared to call

center technical support, the approximate cost per contact is nearly 92% cheaperor a virtual agent5.

TME players are, thereore, developing their online channel strategy to use Web2.0 and social media tools or driving marketing campaigns, enhancing sales, andoptimizing customer service and support. Moreover, they need to identiy andtarget the right customer segments by making their online proposition attractiveand less complicated.

For example, having realized the importance o the online channel, operatorssuch as SFR have put the Internet at the core o customer relationships. The shareo SFRs online shop in the overall distribution increased threeold rom 5% inQ1 2008 to 15% in Q1 20096. Furthermore, the share o web in overall customer

care doubled between Q1 2008 and Q1 2009 to reach nearly 42% at the end oQ1 20097.

Online Channel Perormance Improvement

To enhance the customer experience, drive their top line, and reduce selling andservice costs, operators are also taking measures to enhance the perormanceo their existing online marketing, sales, and service initiatives. A ocus needsto be on measures such as optimizing the online channel or improved cross-and up-selling, achieving higher conversion rates, reducing post-order revenuelosses through stringent credit checks, improving supply chain and inventorymanagement, and analyzing online consumer behavior.

Source: Capgemini TME Strategy Lab Analysis; Company Websites

Operator Measure Description Indicative Examples

Single Bill Single bill for all services including fixedand mobile, free of cost

Simplified Invoice Simplification of invoices so that charges

are easy to understand for the customer

Integrated Multi-channel ServiceExperience

Facilitate a consistent experience and

seamless switch over across channels

E-ShopsWeb portal to drive online sales

Social Media Use of social media for proactivecommunication and resolving customer

issues

Chat-bots Interactive automated online tool toaddress customer queries

Enhanced IVR Personalized and intelligent IVR system,to reduce the volume of repeat calls

Online Community / Web Forums Community based portals for informationdissemination and troubleshooting

Figure 3: Select Initiatives for Enhanced Customer Experience

By 2013, online and online-inuenced sales areexpected to account for62% of total US retail sales


8/156

Some operators have been able to successully enhance the perormance otheir online channel through initiatives such as web exclusive oers, salesdriven search engines8, high shop visibility9, and robust raud policy to achievesignicant benets10. The online channel o a European based leading integratedtelco was signicantly underperorming compared to industry benchmarks withextremely low conversion rates. In order to address this challenge, the operatorormulated a strategy ocused primarily on selling to existing customers. Thetelco created an excellent experience throughout the digital customer liecyclealways guaranteeing availability, simplicity, and relevance. This enabled theoperator to not only achieve online sales growth as planned but also benet romthe superior protability o the online channel11. A European incumbent telco,on the other hand, signicantly improved its online order to sales perormanceby reducing leakages arising due to aulty payments. By developing a stringentraud detection and credit check policy, the operator aimed to achieve revenueimprovement o more than 15 million in 12 months rom implementation with

retained benets in uture years12.

TME players need to careully assess the maturity o their existing onlinemarketing sales and service system, identiy key areas o improvement, andimplement an online mindset throughout their organization.

Multi-Channel Strategy

The evolution in consumer behavior with an increasing appetite or technology,strong desire or cross-channel fexibility, and demand or personalization, isthe key driver or TME players to strengthen their multi-channel experience.For each transaction, customers seek the channel that provides them with thebest experience. Thereore, to enable a seamless experience across multipletouch points such as retail stores, online portal, and call centers, players need toprovide a balanced attention to all channels.

When compared to pioneers such as Dell, Argos, Apple, and Expedia, operatorshave not only been late in the adoption o an integrated multi-channel approach,but also have had a weaker online experience13. Even with the signicance o theonline channel increasing, other non-online channels including retail stores andtelesales are still expected to account or the bulk (70%) o global retail sales in201614. This makes it imperative or TME players to dene and ormulate a multi-channel strategy in order to maintain a 360 degree view o the customer andbalance sales, customer care, and retention across channels.

It is also important that players balance Subscriber Acquisition Cost (SAC) andSubscriber Retention Cost (SRC) across channels in order to maximize customerlietime value. Furthermore, they need to ensure that organizational structures

and incentives are aligned to drive maximum value across all channels.

Some operators such as T-Mobile, Orange, and Vodaone have already embarkedon the journey to deliver a unied multi-channel experience to their customers15.For instance, T-Mobile oers its customers personalized multi-channel sel-service over a mobile portal, SMS, or a voice portal with touch-tone (DTMF16) orspeech recognition17. T-Mobile Germany launched a technology driven channelintegration program to improve protability and customer service. As a result,the operator witnessed a 3% increase o Average Revenue Per User (ARPU) in ourmonths and a 25% increase in customer satisaction18.

8 The search feature on the portal is optimized so that customers can easily search and buy products.

9 The portal is designed such that customers can easily locate and access the e-shop.

10 Capgemini Analysis.



13 Capgemini Analysis; Forrester, Best and Worse Cross-Channel Design, 2007-2009.

14 Capgemini Analysis; Datamonitor: Global Internet and Catalog Retail Report, February 2009.

15 Company Websites.

16 Dual Tone Multi Frequency.

17 Voxeo: Unied Self-Service: Delivering on the Value of Multi-channel Customer Interactions, March 2010.

18 Capgemini Analysis; Cisco IBSG Survey, Mobile E-Channel Experience: A Multi-Channel perspective; Cisco Multi-Channellingat T-Mobile Germany, Tieto Presentation, Thomas Villinger, HET VCN Congress: NAARdeTOP, November 2007.


9/15



Product Renewal

Key Issues

In order to increase competitiveness, operators are aiming or continualimprovement on how they manage their portolio o products and services.Not only is there a need to reduce time-to-market or new products but alsoan increased drive to simpliy and rationalize the product portolio. This willbalance the organizational ocus and investment in new versus existing products,including driving innovation.

To overcome these challenges operators are ocusing on three initiatives: productportolio management, product launch management, and product rationalization.

Key Focus AreasProduct Portolio Strategy

Selecting the right products to launch and tracking their perormance is oneo the most critical challenges or TME players. Approximately 80% o new

products ail within the rst three years ater introduction and many moreail to be o interest to consumers19. This can be attributed to the act that adecision to develop and launch a product is oten dened within organizationsilos, customer involvement is limited and happens only in the later stages, andproduct perormance is not evaluated on a regular basis. Moreover, key tools,such as market sizing, segmentation, and customer purchase criteria, required toeectively ormulate a new product strategy are not always used eectively. Thisdrives players to re-dene their product development strategy in such a way thatit covers all key aspects impacting the product portolio perormance, includingmore ecient in-lie product management.

A European based global operator presents a good example o a TME playerthat was able to successully accelerate new product development by promoting

collaborative working and intense brainstorming. In the analysis phase, theoperator organized a series o acilitated events, bringing together all the rightpeople rom business and technology such as decision makers, subject matterexperts, and experienced acilitators, to enable aster decisions and increasedownership. This accelerated the analysis phase o new product development romve to two months20.

In addition, in order to oset the declining growth rate o traditional servicesand gain incremental revenues, TME players are increasingly exploring brandstretch across new product and service propositions. For example, the launch oapplication stores, diversication into content services, smart metering solutions,and mobile payments are some areas which have already witnessed activityrom telecom operators. There are several success stories as well, such as that o

Deutsche Telekom which is betting big on innovative services and sectors. Thecompany expects revenues rom its intelligent networks growth area or energy,healthcare, media, and automotive sectors to reach around 1 billion by 201521.

Product Launch Management

Product launches are requently plagued by delays due to disparate productdata, and legacy billing and CRM systems. In addition, limited seniorstakeholder involvement and the lack o structured and a cross-unctionalproject management approach results in launch ineciencies. While entirelynew oerings can take as long as 12 months or more to launch, even simple ratechanges can take eight to twelve weeks22. Moreover, product development and themanagement o changes is oten slow and inecient because product inormationis stored in multiple places and ormats. Thereore, in order to ensure a successul


20 Capgemini Analysis

21 Deutsche Telekom Press Release.


Several operators areexploring brand stretch

across new growth areassuch as energy, healthcare,and automotive sectors


10/158

23 Subscriber Identity Module.

24 Earnings Before Interest Taxes Depreciation and Amortization.

25 Cisco Visual Networking Index: Global Mobile Trafc Forecast Update, 2009-2014,2009.

on-time and on-budget launch TME players need to adopt a proven programmanagement approach and tools to accelerate time-to-market.

Product RationalizationProduct rationalization is a wealth accretive activity and is one o the hallmarks ocompetitive TME players. In most cases, a majority o subscribers are served by asmall percentage o the total product portolio resulting in reduced organizationaleciency and increased operational costs. There also exists a long tail o productsand taris with ew or no subscribers. Moreover, the presence o duplicatedtaris driven by legacy product catalogs structure, increases complexity. Thekey challenge is not only to identiy unprotable products, but also to eectivelykill them. Achieving and sustaining a lean product portolio o competitive,protable, and innovative products through rationalization o products and tariscould increase eciency across business and technology areas.

Rationalization projects carried out by a global mobile operator demonstrate the

signicant value that can be delivered through such initiatives. Driven by thereduced ability to execute promotions, Vodaone Italy reduced its prepaid tari srom 55 to 37. This resulted in the migration o 10 million SIMs23 rom the legacytaris to the new ones, and had more than a 15 million net impact on EBITDA24in the 2008 / 2009 scal year.

Inrastructure Renewal

Key Issues

Technology choices are becoming more and more complex as operators seekto balance the need to deploy high capacity bandwidth with the challenge ogenerating a Return on Investment (ROI) or such deployments. Fiber networkrollout, Long Term Evolution (LTE) deployment, and network capacity upgradesall present competing demands or investment with a complex business

case. With the emergence o all inclusive pricing or data services it becomesincreasingly dicult to monetize these investments. At the same time newservices such as application stores do not necessarily generate signicantincremental revenue or operators yet bandwidth hungry devices put pressure onnetworks.

To keep pace with this rising bandwidth requirement and the rapid technologyinnovations in network and IT inrastructure, it is important or operators touture-proo their delivery networks and data centers. Mobile network trac in

Western Europe is expected to increase at 111% CAGR, between 2010 and 2013,rom 69.9 Zettabyte per month to 661.225. In order to ensure that service qualityis not compromised, and to earn incremental revenues rom high bandwidthservices o the uture, operators need to ocus on rolling out the next generation

networks. The deployment o such networks is also an important actor in drivingdown the cost o capacity provision and increasing eciency which must eedinto the business case.

Network deployment takes place against a backdrop o governmental andregulatory pressures to develop national inrastructure and is urther impacted bythe debate on net neutrality. Making the appropriate technology portolio choicesis, thereore, an essential step.

Moreover, to diversiy their oerings beyond traditional services and leverage thepotential top line benets rom systems inrastructure renewal, operators canconsider the benets o adding cloud service oers to their portolio.


11/15




27 Company Website.

28 Yankee Group, Next Generation Access Services: Analysis of Portfolios, February 2009.

29 Fiber to the x: Where x can stand for Home, Curb, or Node.

30 Data Over Cable Service Interface Specication.

31 Verizon Case Study.

Key Focus AreasAdvanced Networks

The deployment o advanced networks can help operators meet the rising

consumer demand or speed, reduce churn, and enhance ARPU. It can alsohelp them reduce operating costs and improve environmental sustainability.For example, Sprint plans to invest between US$4 to 5 billion over the nextthree to ve years in network upgrades which is expected to create cost savingsrom reduced energy costs, lower roaming expenses, and improved capitaleciencies26.

Superior networks will not only enhance service experience, thereby increasingcustomer stickiness, but will also enable operators to earn higher revenues.The 4G network o TeliaSonera enabled Swedish TV stations to broadcast theroyal wedding o the Crown Princess Victoria and Daniel Westling live 27. Thisexperience was not possible to imitate on the existing 3G networks o otheroperators in Sweden. The benets rom a revenue perspective can be illustratedthrough recent studies which have ound that or operators having both legacyand ber based broadband, ARPU rom the ber services is typically 20-30%higher than that o legacy broadband28.

For operators, upgrading their existing networks, xed or mobile, is not a questiono i, but when. The timing o the upgrade largely depends on actors such ascurrent and expected market demand or bandwidth and the ability o the existingnetwork to serve this demand. While FTTx29 and DOCSIS30 3.0 deployments arethe technologies o choice or xed players, mobile operators can upgrade theirnetworks to 4G.

Cloud Computing

Operators have massive internal IT inrastructure as well as multiple large data

centers through which they deliver enterprise services. Cloud computing cannot only help telecom service providers optimize their internal systems butalso enable them to oer cloud services by leveraging their strengths such asdata center capabilities, managed service experience, and a global IP backbone.

Verizon has leveraged the experience gained rom virtualizing 2,100 o itsinternal servers or achieving internal eciencies, to oer cloud deployment andconsulting services to its enterprise customers31. Several other operators such asBT, AT&T, and Orange have also made an entry into cloud computing.

In order to successully tap the cloud computing opportunity, it is important thatoperators careully evaluate dierent cloud computing service segments withintheir market, identiy the value proposition and create a roadmap or services,orge the right partnerships with technology enablers, and identiy relevant sales

channels.

IT Renewal

Key Issues

Telecom operators have built up expensive legacy IT systems over many yearswhich have now become prohibitively costly to maintain. The cost o deploymentis clearly one part o the equation, but operators are increasingly ocused onreducing the total cost o ownership (TCO). The complexity o these legacy ITestates also creates challenges on the speed o deployment o new services whichis increasingly important when competing with highly agile online entities.


12/1510

32 Enhanced Telecom Operations Map, published by the TM Forum, it i s the most widely used and accepted standard for busi-ness processes in the telecommunications industry.

33 Capgemini Analysis; Standish Group as quoted in the July Computer Bulletin from the BCS 2009.

34 The International Communications Project, Issue 12, Managed Services Partnering.



There is now a trend to simpliy the IT estate and ocus on the deploymento more standardized solutions which are implemented out o the box withminimal customization. This is linked to a simplication o business processeswhereby best practiceoten eTOM32 basedindustry standard processes arebeing selected at the expense o highly customized processes which, in practice,oer little dierentiation in a highly mature industry.

Key Focus Areas

Addressing the given key issues, the need or most operators is a radical ITand business transormation to reduce TCO, to have a single consistent viewo the customer, and accelerate time to market or new services. This can beachieved by ocusing on commercial o-the-shel solutions (COTS) based onstandard business processes. Operators are increasingly adopting COTS romvendors such as Amdocs, Oracle, and Comverse or billing and ERP. However,the biggest challenge ahead or telcos will be to ensure transormation success,as only one out o three33 IT transormations is successul in delivering withintime and budget as they lack the necessary alignment and commitment. In orderto successully renew their IT systems, operators need to strive or a change inorganization, business processes, and IT in an aligned manner.

Operational Renewal

Key issues

The pressure on TME players margins due to slower revenue growth, increasingcosts, and erce competition has prompted several operators to embark on costcutting programs. The challenge is to move rom short-term cost cutting tocreating sustainably ecient organizations and optimize unctional perormancein order to raise protability. This would ensure that not only current activitiesare ecient, but also enable headroom to invest in new business expansion.

Three example areas require attention: inrastructure sharing and outsourcing,sustainable eciency, and environmental sustainability.

Key Focus AreasInrastructure sharing and outsourcing

Network inrastructure sharing and outsourcing all or part o network relatedoperations is a key strategic option or operators to reduce costs and ree up vitalresources. It is expected that by the end o 2010, 60% o the worlds wirelessoperators and 80% o the emerging market operators will have some orm onetwork-outsourcing contract34. As operators rollout new networks, share activeand passive inrastructure, outsource network management unctions, and shareand outsource network backhaul, this will not only help them save costs, butwill also result in aster rollout speeds, broader coverage, and reduce the time-to-

market or new services.Network sharing and outsourcing is becoming a key priority or operators toenhance operational eciencies and reduce costs. Leading global operators suchas Orange, Vodaone, and TeliaSonera have all outsourced network operationsin order to develop lean business models35. Similarly, in both emerging anddeveloped markets, operators such as 3 UK, T-Mobile, and Bharti have orgednetwork sharing deals36.

Sustainable Efciency

Today, TME players operate in an increasingly complex environment with amultitude o services, diverse geographical ootprint, and numerous supportsystems. This has resulted in enlarged organizations, increased processcomplexity, and multi-layered technology platorms, all designed to meet the

Only one out of threeIT transformations issuccessful in deliveringwithin time and budget


13/15



37 Belgacom SA; BT Group plc; Deutsche Telekom AG; France Telecom SA; Koninklijke KPN N.V.; Telecom Italia SpA; TelefonicaSA; Telenor ASA; TeliaSonera AB; Vodafone Group plc.

38 Corporate Responsibility, The BT story on Carbon Reduction,April 2010.

39 Company Website.

Average EBITDA margin ofmajor European operatorshas witnessed a fall ofnearly 12% between 2005and 2009

growing needs o consumers. Due to this, the protability o operators hasalso suered. The average EBITDA margin o major European operators37 haswitnessed a all o nearly 12% between 2005 and 2009. Operators, thereore,require a step change in operational eciency in order to remain protable andcompetitive.

Sustainable eciency is a holistic approach to drive value and reduce costsacross the organization. In order to implement it, a behavioral change isrequired at the heart o the transormation and a change in the way employeesand employers approach, plan, and execute their work. This lean thinking canensure sustainability and continuous improvement at every level. TME playerscan achieve signicant benets by holistically revisiting their organizationalstructures, operating models, and processes to remove waste and balanceresources in both the ront- and back-oce operations. However, players need tokeep in mind that implementing a truly sustainable operational excellence culturedemands time and should not be viewed as a quick x.

Green Telco

Operational renewal measures should be aimed at not only saving costs but alsomaking a meaningul contribution towards the environment and benetingrom the corresponding goodwill. Even customer decisions today are driven byenvironmental riendliness and sustainability. Many customers are increasinglyopting or online or e-bills over paper bills. Thereore, deploying ocusedinitiatives around improving cooling eciencies, reducing energy consumption,and implementing low carbon programs to realize tangible savings, should be thekey priority or operators.

Some operators are already deploying ocused initiatives such as low carbonprograms and the reduction o energy usage or sustainable cost reduction.

BT has achieved a 43% global carbon intensity reduction through initiativessuch as sourcing 41% o UK energy requirement rom renewable sources andadopting a global energy savings campaign38. In another example, Vodaone hasimplemented measures aimed at reducing energy usage and its associated costs inits operations across multiple locations. The company has deployed initiatives toimprove cooling, modernize its network equipment, and reduce diesel usage39.

In conclusion, the Digital Renewal responses o TME players enable them toeectively address their most pressing challenges. By ocusing on the ve keypriorities o this approach, players can enhance customer experience, developa robust product liecycle management strategy, uture proo their network,standardize IT systems, and achieve operational eciency.


14/1512

Rob Staples is a vice president and Global Head o Consulting Services orCapgeminis Telecom Media & Entertainment (TME) practice. Rob works withCEOs and board-level clients in the telecommunications and media industriesand is a ounding member o Capgeminis TME Advisory Board a privatethink tank in which CXOs can discuss the implications o the convergingcommunications industries. Rob has 20 years operational and consultingexperience, gained in Europe, Asia, Latin America, the United States and theMiddle East. He is based in London.

Manik Seth is a manager in the TME Strategy Lab. He has over ve years oexperience in strategy, planning, market analysis and consulting. His recent workincludes being part o a one year technology-driven business transormationprogram or an integrated operator and helping a leading equipmentmanuacturer with identiying BSS/OSS-related acquisition targets. Prior to

joining the Lab, Manik was involved with identiying new technology initiativesin next-generation networks or a leading sotware services provider. He is basedin Mumbai.

About the Authors

Copyright 2011 Capgemini. All rights reserved.

For more inormation contact:

Jerome BuvatHead o Strategic ResearchTelecom, Media & Entertainment

[email protected]+44 (0) 870 905 3186

With 112,000 people in40 countries, Capgemini is oneo the worlds oremost providerso consulting, technology andoutsourcing services. The Groupreported 2010 global revenues oEUR 8.7 billion.

Together with its clients, Capgeminicreates and delivers business andtechnology solutions that ft their

needs and drive the results they want. A deeply multicultural organization,Capgemini has developed its ownway o working, the CollaborativeBusiness ExperienceTM, and draws onRightshore, its worldwide deliverymodel.

More inormation is available atwww.capgemini.com/tme

About Capgemini and the

Collaborative Business Experience


15/15

www.capgemini.com/tme

Argentina

Manuela Pedraza 1545

C1429CBA

Buenos Aires

Tel: +5411 4735 8000

Australia

Level 777

King Street

Sydney NSW 2000

Tel: +61 2 9293 4000

Belgium

Bessenveldstraat 19

B-1831 Diegem

Tel: +32 2 708 1111

Brazil

Av. Francisco Matarazzo

1500 torre New York 18 A

Bairro gua Branca

So Paulo

05001-100 SP Brazil

Tel: +5511 3525 0100

China

42F Hong Kong New World Tower

300 Middle Huaihai Road

Shanghai 200120

Tel: +862 161 822 688

Denmark

Delta Park 40

DK-2665 Vallensbaek Strand

Tel: +45 70 11 22 00

Finland

Niittymentie 9

02200 EspooTel: +358 (9) 452 651

France

Tour Europlaza

20 ave. Andr Prothin

92927 La Dfense Cedex

Tel: +33 (0)1 49 00 40 00

Germany

Konrad-Adenauer Ufer 7

50668 Cologne

Tel: +49 (0) 211 912644

India

Piroshanagar, Vikhroli

SEP2 B3 Godrej Industries Complex

400 079 Mumbai

Tel: +91(22) 5555 7000

Italy

Via M. Nizzoli, 6

20147 Milano

Tel: +39 02 41493 1

Mexico

Av. Guillermo Gonzlez # 1600 3er. PisoCol. Centro Ciudad Santa Fe

C.P. 01210 Mxico, D.F.

Tel: +5255 8503 2400

Middle East

P.O. Box 502 420

Dubai

UAE

Tel: +971 50 884 77 64

Netherlands

Papendorpseweg 100

3528 BJ Utrecht

Postbus 2575

3500 GN Utrecht

Tel: +31 30 689 0000

Norway

Hoffs veien 1D,

0275 Oslo

Tel: +47 24 12 80 00

Poland

Piekna 18

00-549 Warsaw

Tel: +48 (22) 464 7000

Portugal

Av. Colgio Militar

37 - Torre Colombo Oriente

Piso 10

1500-180 Lisboa

Tel: +351 21 412 22 00

Spain

Edificio Cedro

Calle Anabel Segura, 14

28100 Madrid

Tel: +34 91 675 7000

Sweden

Gustavlundsvgen 131

PO Box 825

161 24 Bromma

Tel: +46 8 5368 5000

Switzerland

Rue du Rhne 65

1204 Geneva

Tel: +41 22 879 16 50

United Kingdom

40 Holborn ViaductLondon, EC1N 2PB

Tel: +44 20 7936 3800

United States

623 Fifth Avenue

33rd Floor

10022 New York

Tel: +1 212 314 8000

digital renewal: addressing transformational challenges and the monetization conundrum

Documents