Internet in the pocket puts stress on Indian operator’s IT systems
Ravinder Jain: We outsourced the IT to make the IT
work for the business
Indian operator Aircel has taken the first steps in an attempt to boost its share of a highly competitive market by completely replacing its IT system in a period of just a few months.
The whole of its legacy operations were moved to the new system, outsourced to Wipro with overall architecture by Oracle, over a period of just a few weeks.
The aim, says Aircel’s chief information officer Ravinder Jain, is to build the company’s market share in value-added services and mobile internet access. “We have a very firm belief that mobile will be the largest screen,” says Jain.
But that hasn’t been the case so far. Of India’s 500 million mobile phone customers, only 120 million have internet-capable phones, “and only 12 million of them actually use more than two minutes a month”, complains Jain.
Aircel wants to change that. In advance of the completion of India’s 3G auctions, Aircel has built its 2G network to have Edge-based internet technology. “We have a pocket internet strategy,” says Jain, who joined the company in November 2007 after several years with what is now Vodafone India.
Aircel was already in transition, having begun as a small regional operator as long ago as 1999, working in just two districts in India — or “circles” as they are called there.
It launched in seven new circles in 2007-08, along the country’s eastern corridor, but then Maxis, the Malaysian operator that owns 74%, decided Aircel should go nationwide. Network equipment came from a range of suppliers, including Ericsson, Huawei, Nokia Siemens Networks and ZTE. Is Aircel rationalising its supply? Jain won’t say, but notes that the new circles have ZTE and Huawei kit.
At the time of the decision to expand the management structure was recast and Jain was hired to run the information systems.
“We started 2008 asking what we need to do. The Indian market was so cluttered, with eight or nine operators in most areas.” Aircel needed to find some way of differentiating itself. The company selected value-added services as a well of making itself distinctive.
However, it was starting from a low point. Across India, all operators earned 8-9% of their revenue from value-added services in 2008, estimates Jain, but Aircel was way behind this, with just 3-4%.
At the same time it was his job to make the IT as efficient as possible. “Our platform needed to be ready for it. You can’t do this with a classic IT set up,” he says. “We took a big decision to outsource the IT.”
The company implemented a number of Oracle applications, enhanced a year later with a scalable and personalised content delivery platform for new revenue generation. “Oracle is all over my IT architecture,” he smiles — apart from billing, which is Comverse. At the same time Wipro was given the task of implementing the system.
“We outsourced the IT to make the IT work for the business,” says Jain. The rate of change that Aircel wanted to achieve was so fast that it couldn’t have been handled internally, he accepts. “We wanted to make one partner responsible and to share the entire business. We wanted to transfer the IT from the legacy system end to end.” The intention was that “not the smallest element” of the legacy IT system should be kept.
And it was all done in 18 months. The project started in May 2008 and was completed in December 2009 — a couple of months later than planned, but still a smooth transition.
“We migrated the legacy business to a new stack. The old systems were very disparate, as they had evolved over 10 years.” At the same time Aircel needed “to change the mindset” of the 100 IT staff, who were being moved to Wipro as part of the deal. That was “a challenge”, he says.
One of Aircel’s districts, or circles, was moved to the new IT stack in February 2009. “We went right from business study to operation in seven or eight months.” Another 56 days later, a total of eight circles were moved across “in one go”, recalls Jain. Now the system has been rolled out to the rest of the company.
“We have a revenue share with Wipro as part of the IT outsourcing,” says Jain. “Wipro makes all the investment.”
Though all Aircel’s IT staff moved to Wipro as part of the deal, he then hired “people with project management skills — a different skill set” to run Aircel’s involvement.
How did the cost compare with doing it in-house? “I would not look at the cost but at the business,” Jain retorts. “We grew much faster than if I was doing it on my own.” Better to look at the business results: “We closed 2009 with 9% of revenue from value-added business,” he says. “It doubled in one year.”
At the same time the number of customers has increased, from eight million at the end of 2007 to 30 million two years later. By early 2010 it was running at 32 million “and we are adding 2.5 million a month”, he says: “We have tripled in two years.”
And Aircel wants to continue to pursue “the pocket internet”, he says: “We have a very firm belief that the mobile will become the largest screen in years to come. Many people will use their first internet on the mobile phone rather than the computer.”
There is a long way to go, as even with Aircel’s increased share of the mobile internet market in India, only around 15% of its customers are using their mobiles for net access “and that may not be too often”.
At the moment the company is trying to encourage customers to used value-added services in a gentle way — by offering what Jain calls “all you can eat” ringback tones for a flat rate, for example. “You can change your tones as many times as you wish in a day or a month,” to accord with your changing mood, for instance. “What mood do you want to reflect — a happy mood, and so on?”
Introduction of this service “was a game changer”, but its spread has had an impact on the network and the IT systems, he admits. “If the consumer changes their ringback tone several times a day, that affects the general volume of data.” The capacity of the system and the process flow was resized to handle the volume. “The existing platform was getting choked.”
The new system can handle 800,000 orders a day, he says, but usage is running at 100,000 at the moment — so there is capacity available. “The volume has doubled in a month.”
Ringback tones are sold either at a flat rate per month or for three or seven days at a time. “You can also buy internet access for just three days,” he adds: at prices around $0.50 a time.
But this is just the first stage. “We believe in democratising the entire value-added services system,” he says. “We want to let people use as much as they can.” GTB