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Interview: Mark Greenquist of Telcordia
29 June 2010
Operators should be able to offer customers discounts on services at different times of day or on certain cellsites, says Telcordia’s CEO
Dynamic discounting offers better capacity in emerging markets
Operators should be able to offer customers discounts on services at different times of day or on certain cellsites, in order to maximise revenue and use of capacity, says Telcordia’s CEO, Mark Greenquist
Mark Greenquist: service providers should be able to
segment customers by their use of bandwidth
Mark Greenquist has a new term which he wants telecoms operators to take notice of: dynamic discounting.
It’s important because data services are accounting for a greater and greater percentage of carriers’ business. “As the industry gets more competitive, the competitive pressure increases,” says Greenquist, who is CEO of US-based telecoms innovation Telcordia. “As you get more and more competitive you have to segment your customers more.”
As a result of these competitive pressures, operators have to work out ways of doing more with less, he says.
The challenge is that operators have to connect their towers to the backhaul network — and you have to decide whether you build the capacity to cater for those peak loads, that may last just a short time each day.
That’s where dynamic discounting can help, he says. “Carriers can in real time provide discounts to customers based on the capacity of particular cellsites,” he says.
Operators are interested, “particularly in emerging markets”, says Greenquist, who has been with Telcordia for five years, first as CFO and then as COO before becoming CEO in May 2007. “We want to see if this will drive traffic and maximise use of sites. We’re in discussions with some of our customers on this.”
Dynamic pricing will use a service that will continuously monitor capacity utilisation on each cellsite. “When a site is not being utilised fully you can offer discounts to influence a user to time-shift or to move to a different site,” says Greenquist. “You’re building to peak capacity, and as a result you can avoid having to build to higher peaks.”
This is all part of a strategy that Telcordia is developing to allow operators to manage bandwidth in real time. “We want to provide service providers with the ability to segment customers by their use of bandwidth.”
The idea is to allow operators to add subscribers to their network “without being in jeopardy of having them overwhelm the network”, he says.
Video is the main problem. “You have a small percentage of users who use a large percentage of the bandwidth.”
The answer, says Greenquist: a bandwidth manager. “That will allow you to differentiate your charging into a premium plan, a standard plan and a basic plan.” A service provider can segment its customers according to bandwidth use “and optimise their own revenue”.
Again, this service is embryonic, he says: “We’re talking to a number of customers and the product will be released later this year. We’re watching what’s going on with respect to data. Operators need to segment their customers.”
The trouble is, many operators still have “all you can eat” data plans. “These are causing problems as we see more and more smart phones in the market. You will see more and more challenges.”
How does Telcordia think that operators can offer discounts on underloaded cellsites? “Send an SMS offering a discount in real time,” says Greenquist.
He sees this strategy as helping to drive the next wave of growth in emerging markets — attracting lower ARPU customers. “They are super price-sensitive but they bring incremental revenue,” he says. The idea is that they don’t spend much, so operators cannot afford to put in extra capacity.
Hence the need to explore discount structures. “We believe in flexibility,” he says. “You don’t know what the best discount structure will be. We want to set this up so operators can see the results of the discounts. At the moment we don’t know if the location is more important or the time of day is more important.”
Greenquist was speaking to Global Telecoms Business at the TM Forum’s Management World conference in Nice in May, where the company launched a tool to help operators make better use of their network investments by sharing resources across different sections of the system.
“It’s a business analytics application for capturing network data to use it to become more efficient,” says Greenquist. One application is to allow planners to route a backhaul network in the most effective way to connect enterprise customers as well as base stations.
The tool — called total perspective planning — “gives you the opportunity to be more efficient and more future proof” by bringing together fixed, backhaul and enterprise factors into network planning, says Adan Pope, the company’s chief strategy officer. “When you’re planning fibre you want to know where the offices of Fortune 500 companies are and you want to integrate that data so you can identify the business opportunities.”
“It’s an OSS mash-up,” says Greenquist. “The first customers are under way but not announced.” GTB