Archive for May, 2013
Posted by: Guest in Quizzes
This month’s LTT by Lionel Griache was meant to illustrate the many challenges of reconciling Data-Traffic, in particular in the context of Roaming.
Most platforms create intermediate CDRs for long data sessions. As a result, it can be a little tricky to perform 1-to-1 reconciliations. Some of the challenges for these data-reconciliations are:
- The number of intermediate-CDRs produced per session depends on the configuration of the platform, so for 1 session you might have 10 recorded CDRs in your local data-switch, 8 CDRs in your TAP files and 1 in your prepaid platform. Reconciliation on CDR-Count is therefore not relevant. You might have access to a “session identifier” in your CDRs. If that is the case, reconciling on the number of session-id (or charging-id) might be a relevant control.
- The total data-volume recorded will also differ slightly between platforms. Connection-attempts and protocol-handshakes are not seen the same way by all platforms and could result in a small percentage of variation in the total data-volume recorded. This variation should always be within an acceptable margin.
- Though not illustrated in this LTT, in the context of roaming you also need to account for the timezone differences in the timestamps received
With this in mind, to solve this challenge, you had to add the total data-volume per subscriber recorded on each platform. You’d then see immediately that 3 subscribers stood-out: +33xxxx114, +33xxxx596 and +33xxxx781. These 3 subscribers show much lower total data-volumes on the prepaid platform than on the TAP files and on the local data-switch. This is a first alert that a leak might be taking place. The balance information was an additional clue to understand the root cause of the problem: if you add the retail-value of the CDRs charged on the Prepaid platform for these 3 subscribers, you see that they add-up pretty much to match their open-balance at the start of the day. In other words, these subscribers were charged for their data-usage fully… until all their available balance had been used. Once their credit expired, you’d expect the data-usage to stop. In this LTT example, the data-usage continued for these subscribers, generating direct revenue-loss.
This kind of problem can take place if you have a weak interface between the Prepaid platform (responsible for the charging of the data-session) and your local Data-switch (responsible for allowing/denying/interrupting the data-sessions). In this example, it looks like roaming data-session are not interrupted nor denied for subscribers with no available credit.
The answer to this LTT is therefore: Yes, you should alert the CFO about the suspicion that prepaid roaming subscribers can enjoy data-traffic beyond what their available credit should normally allow them to. The 3 subscribers visibly demonstrating the problem are: +33xxxx114, +33xxxx596 and +33xxxx781
Congrats to Sriram Dharmarajan for providing a valid answer.
Xintec, the Irish business assurance software house, has sold their RAevolution 3.0 suite to Tango, an alternative CSP in Luxembourg. The price was not disclosed. Xintec aims to make headway in the saturated business assurance market by targeting smaller, underserved telcos. Tango currently has 273,000 customers. You can read the press release here.
Posted by: Eric in News, Opinion
Last week WeDo, the Portuguese business assurance vendor, returned to base for their 8th annual worldwide user group meeting, which they call the ‘WWUG’. But whilst WeDo brought their event home – to Braga, where WeDo’s developers are located, and Guimarães, the birthplace of Portugal – the content looked to the future, sometimes with stunning effect.
The stand-out speaker at WWUG13 was Zeinal Bava, CEO of Portugal Telecom. In many ways, he was a surprising choice to deliver a keynote address. PT is owned by a rival corporate group. They had no history of purchasing WeDo’s products and services until they took a stake in Brazilian operator Oi, which was already a customer of WeDo. In 2007, Bava battled to prevent PT from being taken over by WeDo’s parent, Sonae. On the other hand, Bava’s presence and presentation said a lot about WeDo’s strategy, confidence, and culture. Sometimes CEO talks can descend into a bland rehash of the most upbeat investor news and most catchy marketing ideas. In doing so, they may avoid any talk of downsides or weaknesses. In contrast, Bava emphasized how PT was striving to turn a limitation into a source of advantage. Portugal is a mid-size country with 10mn population, leading to an obvious constraint on PT’s potential. Hence, they have adopted a strategy where they use their domestic market as a testbed for developing advanced services for export to larger markets. Whilst Bava talked about FTTH and putting compelling interactive content on to TV screens, the similarities to WeDo’s strategy were very apparent. WeDo also treats Portugal as their local hothouse, where they will nurture new products and services, ready for export to the global market. In WeDo’s case, this involves keeping pace with the latest in the communications sector, whilst creating analogous business assurance offerings aimed at the energy, financial and retail sectors. At one point, Bava said that WeDo’s management was
one of the most impressive management teams we know
even though they work for a rival group. It was a gracious compliment to give in front of an audience of WeDo’s customers. I also felt it revealed something about Bava’s confidence, as well as his generosity. The relevant English phrase is that ‘great minds think alike’. I wondered if Bava’s praise reflected a perception that both PT and WeDo have a similar approach to placing Portuguese business on a worldwide stage.
If practice makes perfect, then WeDo are certainly very practiced at hosting fabulous events. This year’s WWUG involved 3 days of travel, talks and networking for 200 attendees from 60 companies and 40 countries. Such orchestration demands superior planning and plenty of practice. Even as an outsider with no interest in buying their product, I gain more from WeDo’s event than I do from many conferences run for profit by specialist events companies. All attendees talked about their happiness with every aspect of the hospitality, whether the travel plans and hotel service, the delicious catering, the little gifts of traditional canned Portugese delicacies, or the beautiful and historic venues for evening gatherings. But WeDo should ultimately be judged by the quality of their software. The worth of an FMS or RA system should primarily be based on its back-end performance, not by the front-end display. Sadly, the power of the engine cannot be gauged through user demonstrations, which is why I always recommend that telcos execute realistic field trials of any system before they purchase it. That said, WeDo are clearly pleased with the latest version of business assurance suite, RAID 7. My anecdotal experience suggests most WeDo customers thought of previous versions as being solid but unspectacular. RAID 7, in contrast, has the power to wow the audience. Each individual user can customize their own display to present the dashboard metrics most relevant to them. Through drag-and-drop and tailored aggregation of data, the level of information presented can be as high or as low as the user finds most useful. This means the interface can not only be adapted for changing business needs without needing to engage WeDo’s assistance, but it can also be tailored for any role in the telco’s organization, whether analyst or CEO. So long as the data is available, RAID 7 can present it in a visually arresting way. The user can manipulate an extensive palette of colour and graphs, making it easy for them to construct dashboards where they will instantly recognize any unusual results that they should drill into. And as WeDo were keen to point out, they had incorporated the TM Forum’s standard KPIs into the interface by doing the same kind of configuration that users can perform for themselves.
Whilst they say ‘practice makes perfect’, nobody ever attains perfection in practice. We should be thankful for this. If perfection was attainable, then WeDo would have no customers, and talkRA would be very boring. Whilst WeDo continued to impress, I also felt they made a few missteps during the event. However, for the sake of brevity, I will not mention them here. My intention is to review some of the vaguer elements of WeDo’s strategy in a follow-on post, which will be published next week. What I will observe is that there was a regular mix of presentations from WeDo’s customers. In movie terms, a regular mix of business assurance presentations means equal shares of the good, the bad, and the ugly. One ugly theme that I would have liked to see less often was a tendency to treat progress as synonymous with the installation of a new version of a business assurance system. Whilst I can make some allowances that telcos will want to be complimentary to their supplier hosts, the story of a telco’s internal evolution should not be reduced to when they install software and when they upgrade software. The telco employs people to do business assurance. They do not need to stand still just because the software does not change. And changes in people should drive changes in software, because the changes in the customer’s requirements should drive the software vendor’s roadmap, and not vice versa. If the telco is waiting for the supplier to develop new functionality, instead of demanding it, then they must be behind leading telcos.
In one presentation, I was gobsmacked to see a slide presenting a timeline where nothing happened over a period of 6 years. ***Nothing happened in 6 years*** Before the 6-year period, there was a project to install software, and after the 6 years, there was an upgrade. For me, the absence of a story for 6 years speaks most loudly to my ears. If I see a manager who is not talking about doing lots of other things (perhaps without needing to use software) and who is not saying anything about how he was frustrated and/or fought with his bosses to do more, than I know what I am looking at. I am looking at somebody whose role needs to be outsourced. A guy in an outsourced team can do a static job, turning a handle whilst waiting to see if somebody in the telco is going to get excited enough to raise new requirements. A guy who spends six years doing the same job without improving anything is a guy who should be sitting on the outsourced company’s payroll, and away from the more dynamic people I want to see working inside the telco.
With Tony Poulos at the helm, chairing the event with his unique combination of humour, showmanship and insider savvy, the main proceedings were always in safe hands. And CEO Rui Paiva could take some pleasure that the rise in WeDo’s numbers vindicates their strategy so far. They now enjoy an opportunity to take a clear lead in market share, and to accelerate away with ambitious growth targets, whilst their rivals face continuing difficulties. Rui commented how the price-slashing tactics of his rivals were damaging the value of the market as a whole, and he certainly seems to have a point. The short-term negative-margin tactics of some firms do seem to be making them less and less attractive to investors, and increases the belief they are financially unsound. Meanwhile, WeDo continue to search for an M&A target in South East Asia, and they are the only one of the major players who would rather find an acquisition than a buyer. Rui also mentioned how WeDo were currently reviewing their strategy. Given that WeDo appear to be the most strategy-driven vendor in this area, that might seem unnecessary, but I would disagree. WeDo have a sense of how they arrived at where they are now, and have the ambition to go a lot further. They see themselves as a company that will be around in the long run, being managed by their current team. I look forward to learning about their revised strategy, and the challenges they set themselves for the future.
On a final note, some might reasonably speculated that my review of the WeDo WWUG is biased, because of the simple fact I was invited and because I enjoyed such excellent hospitality. Everyone should be wary of how flattery and gifts can induce complacency and lapses in judgement. It was an absolute pleasure to be invited to moderate a panel session of independent speakers, talking about the future of revenue assurance and fraud management. Let me underline the fact that the speakers were expected to be independent. During the preparation for the event, I challenged Sergio Silvestre, WeDo’s Chief Marketing Officer, over the scope of the panel. I pointed out that WeDo had formulated the term business assurance to cover the scope of their evolving product suite, and I thought it might be easier to talk about the future of that scope, rather than using the cumbersome construction of ‘revenue assurance and fraud management’. However, Sergio was insistent. He did not want us to adopt a scope associated with WeDo’s marketing, even if it was more convenient. The name of the proposed panel session had been chosen to avoid putting words into our mouths. Hopefully I will be able to share the content of the discussion in a future podcast, so you can judge for yourself whether we succeeded. And on the evening of the final night, Sergio was keen to impress on me a point he has mentioned to me before. If I am too hard on some people, then it creates the appearance of bias, and makes people reluctant to deal with me. In other words, Sergio was advising me to go easier on WeDo’s rivals. I had to agree with Sergio’s wise counsel, although I argued that instead of going easy on anyone, I would rather say both good and bad things about a business, so long as the business sometimes gives me a reason to say something good about them. And hopefully by this little example, I illustrate how even very small things are important to creating a positive reputation, and the ways in which WeDo set a good example for all of us.
Posted by: Eric in News, Results
During a busy week for talkRA, Subex slipped out their dreadful annual results. The full and detailed analysis will have to wait until next week, but the chief conclusion does not require much analysis. The headline news is that Subex generated a pathetic USD61mn of sales in FY13, down 31% on FY12. To put this into further context, Subex was generating USD120mn in annual revenues at their peak, and I still thought they should be orbiting in roughly in the USD90mn-USD100mn band as recently as a year ago. Given that rivals WeDo announced annual sales were USD71mn, up 20% year-on-year, the natural inference is that Subex’s problems are internal rather than external. The stock market seems to agree. Whatever good news rumours perked up the share price on Monday 20th May, those buyers of Subex’s shares found they had wasted their money, with the share price soon tumbling by nearly a quarter to new all-time lows.
The response of Subex’s management to this terrible news inspires less confidence than a man trying to put a sticky plaster over the hole in the Titanic’s hull. Subex CEO Surjeet Singh said:
We have successfully maintained our market leadership in Revenue Assurance and Fraud Management accordingly to leading analyst firm Gartner for the third year in a row.
That sounds like boasting how high you are, having jumped off the deck of the Titanic, plunging toward the deep and icy cold water below, blissfully unaware of the grand piano which is also falling towards the sea, just a few feet above your head. Also, it involves taking comfort from a Gartner report. This would be like paying Gartner to write a report saying I am sexier than David Beckham, George Clooney and Robert Pattinson combined, just so I can include a copy of the report inside a Valentine’s card. It may be promotional, but like Subex’s rusty old product suite, nobody is going to buy it.
Not satisfied with mentioning Gartner as cover for their awful results, Subex issued a second press release a few days later, reiterating the nonsense that they were market leaders. In that release, Vinod Kumar, COO, said:
We are extremely pleased with this validation of our leadership position in the Revenue Assurance and Fraud Management space for the third year in a row. Our perseverance and commitment, to enable telecom service providers build competitive advantage in this volatile marketplace, has firmly helped us consolidate our leadership position. We aim to continue to grow faster, strengthen our key solutions with our Managed Services offering and expand our global footprint…
Whoever does Subex’s PR needs to be fired for such counter-productive twaddle. For a start, WeDo’s USD71mn is more than Subex’s USD61mn, even before anyone argues that Subex’s contract with BT generates a lot of revenue which should not be classified as either revenue assurance or fraud management. Second, the company had a bad year and the figures went into a sharp reverse. Management palaver about perseverance (persevering with a failing business model?), consolidating a leadership position (a 31% fall in sales is not consolidation), and growing faster (what growth does he think he is talking about?), only makes Subex’s management team sound like a bunch of nincompoops who are divorced from reality. Even the supposed volatility of the marketplace could hardly explain why Subex’s sales are the lowest they have been since the acquisition of Azure in 2006.
Six months ago, I wrote that Subex’s management need to communicate a strategy to turn around their business. Since then, we have heard nothing. The conclusion is that this team have seen their ship hit the iceberg, and have no idea what to do about it. Perhaps they are hoping for the share price to finally sink so low that a buyer will swoop in and haul them back to dry land. However, there is a big difference between the scrap value of the Titanic when still afloat, and when she hits rock bottom. This management team keep waltzing around the Titanic’s ballroom, but somebody needs to change the tune.
As we wait for Subex’s annual results, due soon, the Indian vendor has experienced a slight improvement in its share price. At Monday’s market close, Subex shares were priced at INR9.75 on the NSE. This was up from the all-time lows experienced over the previous month, which saw Subex shares bumping along at barely over INR9. To put this into context, Subex’s 52-week high is INR27.3, the share options of CEO Surjeet Singh have an exercise price of INR13.5, and Subex is underperforming the rest of the market. With the share price so low, there may be some speculation about potential buyers. However, weak annual results would undermine the prospect of a takeover. Low or nil profits, and poor cashflows, will continue to undermine the market cap value, which is currently USD28M.