Innovation is much more than just buying the latest technology. Innovation is the people involved in making innovation a successful process—both for a telecommunications company and for its customers. The following article provides operations insights and practical experience gained over the past few years in the Latin American market.

Compared to the North American and European markets, the Latin American market is far from saturated and still has tremendous growth potential for subscribers, as well as voice (average revenue per user [ARPU], minutes of use [MoU]) and data, which are as yet only used rudimentarily.

Hence the focus and drive for the incumbents is still to gain as many subscribers as they can, as quickly as possible. They need to "hook" customers up with their company before deregulation allows more competitors, new entrants, and new technologies to enter the market. Hence network growth and ensuring sufficient capacity is still the paramount challenge. Less emphasis has been put on the "rest of operations" such as customer care, service management, and network management—it can almost be said that they have been neglected—because there is simply no need to fight for customers due to lack of competitive pressure.

In markets where dominant operators do not face competitive pressure that in turn drives increases in efficiency, operations can suffer at the hands of the corporate culture inherent in monopolies.

Although these impacts on operations can be severe, they do not yet feel the urgent pressure to optimize internal organization, processes, and networks. There is still time to get fit for competition: to become customer-focused and to move to a future-proof next-generation network (NGN), which is synonymous for a change to an open-standard, IP-based broadband multiservice platform. Finally, this will enable short innovation life cycles, fast provisioning of high-quality services, convergence of technologies, and optimized network operations. This is a paradigm shift!

"Although we have world-class equipment, great technology, and lots of staff, we still provide poor services. … We need the knowledge, the skills, and the resources in the right place to be successful. … Whatever is necessary has to be done quickly and precisely without disrupting our business. We can not afford to lose more time and money. … This is the challenge."

This recent statement from a chief executive officer of a Latin American telecom company summarizes how to achieve the paradigm shift toward innovation. Have a holistic approach, and do not just focus on network technology enhancements, since in the past this has not proved to be a long-term solution. To find out what is needed, how to do it, and in which sequence, basic and simple questions have to be answered anew. During a period of exuberant growth and almost no competition, important strategic decisions are easily overlooked, considered unimportant, or sacrificed for growth.

Figure 1
Determining Strategic Objectives by Re-Evaluating Four Questions. Source: Detecon, 2006

Applying this approach from the top down over the existing business model—as well as its organization, processes, and segments—by increasing the level of details and information will enable you to identify strategic objectives, a methodology for change, and an action plan outlining the steps, priorities, benefits, and impacts. First understand the status quo and the future targets, and then set the rules and guidelines to achieve strategic objectives. This will lay a stable foundation for future-proof progress. Once this understanding is established, the phases for the change can be planned in detail and executed step-by-step without disrupting the business. Start with the easiest changes to deliver quick wins. This will also keep motivation up. Major changes in operations segments (organization, network) at the same time should be avoided so as not to disrupt the business unless there is no alternative. Stability and clear rules are the key to a smooth and successful transition. It is important to not neglect the working conditions and environment such as working hours, availability, project support, available skills, and resources.

Figure 2 describes a way to approach the optimization of operations. Once the strategic objectives and the areas to optimize have been identified, an integrated, project-based approach that foresees various measures to meet the objectives has to be applied.

Figure 2
Optimization Approach. Source: Detecon, 2006

"It is always nice to see that the North American and European operators have well-designed organizations and networks … but this is not happening in Latin America. … We don't do network planning."

This recent statement made by an account manager of a major telecom provider in Latin America reflects the root cause of many operations challenges faced by incumbents now and indicates that innovation and change must first happen in the organization and its people.

By simply provisioning more resources (hardware, links, staff, etc.), problems usually get "patched up" quickly but are seldom solved. "Patched" networks do not grow homogeneously. The operator loses the overview of its network, services, and assets. The impacts on the daily operations and the future goal to become an innovative customer-focused enterprise are severe and costly. Just a few are described as follows:

• Organization and processes—Network changes are often implemented by different organizations based on personal criteria without following processes or even bypassing them due to urgency. Key challenges for innovation and quality include aligning company targets with a measuring system, clarifying roles, classifying processes across departments, and optimizing organizational structure.
• Network overview—Operations organizations such as planning, engineering, and maintenance often get their network information by applying individual manual processes and formats (i.e., Excel, Visio), leading to inaccurate planning and optimization.
• Service demands—In addition to the network overview, the knowledge of the end-to-end service demands (bandwidth per application) and its routing through the network are crucial for deploying an efficient quality network. So far, the operators mainly measure the load of a link between two nodes. Bottlenecks (overloaded links) get fixed by adding more resources instead of by optimizing the routing costs.
• Network analysis, planning, and optimization—Due to a lack of planning culture and knowledge, the networks are not always deployed to their full potential. Very often the networks are over-dimensioned, resulting in costly, inefficient, and not always reliable designs.
• Network management systems (NMSs)—Although the operators do have world-class capable NMSs deployed, they did not fully integrate the different operations support system (OSS) and network elements under one umbrella system. Instead, legacy stovepipe architectures for different OSS and network elements or self-made resource-intensive and error-prone workaround solutions are used. A future-proof NMS enables innovative operation, business, customer care, and service and information system management. It provides the means-fault, configuration, accounting, performance, and security management-to evaluate, tune, and execute the operations.
• Service quality—Complicated networks have, due to the amount of excessive equipment and capacity, more points of failure and require greater efforts to maintain quality. Regular proactive measures such as traffic and performance measurements, drive tests, and alarm analyses are missing. Often customers have to complain before faults get rectified.
• Knowledge and skills—Operators rely very much on the vendor's expertise to perform daily operations tasks. Also the distribution of skills and resources is very unbalanced, i.e., certain areas lack skills and resources, where others are over-supplied. Only a few highly knowledgeable experts seem to have all the responsibility and therefore get constantly overloaded, while the company is very much dependent on these "gurus."
• Network evolution—Lack of the planning culture and skills will make it extremely difficult for operators to achieve a non-disruptive and quick migration toward NGNs. A seamless move to a future-proof multiservice platform requires detailed knowledge of the deployed network and technologies. Also, it has to be aligned with the marketing and product requirements. The operators rely very much on the expertise and road maps of the vendors and are not necessarily driven by the market needs.

"You opened our eyes ... and now we can see the big picture."

The head of the network planning and engineering department was reviewing our documents.

When starting the various network optimization and planning initiatives, it is crucial to find a way to collect and analyze the vast amount of network data at the beginning of the project. Only a tool-based approach allows the creative, much more efficient, and faster analysis and planning of networks than manual approaches.

Figure 3
Fundamental Aspects of Network Planning and Optimization

Some of the previously described challenges and how they were tackled are described as follows, along with some of the major results that could be achieved:

• Network overview—Provide operators with a one-time snapshot of the network, as well as the methodology and guidelines for obtaining comprehensive up-to-date network overviews and data in graphical and tabular form, and make it accessible for everyone involved in the planning, optimization, and troubleshooting process. This facilitates and speeds up the planning and troubleshooting process significantly, leading to efficient quality networks and services.
• Service and traffic demand—For the different technologies applied, it is necessary to assess very carefully which of the ample measurement counters and tools available provide this information, and how they have to be combined and applied to deliver the required service end-to-end traffic matrices. This may be a complex task, but it is far from being a mystery and has been achieved successfully in our recent projects.
• Network analysis, planning, and optimization—Detecting a problem alone is not sufficient. Guidelines, processes, and methodologies have to be developed to enable the operator to regularly follow up on and keep updates. In Figure 4, the basic strategic planning and optimization tasks are outlined.

Figure 4
Strategic Planning and Optimization Tasks for a Mobile Core Network

Some of the detected problems, impacts, and possible solutions are as follows:

• Over-dimensioning and under-utilized links—The "patching up" method results in extremely unbalanced and inefficient networks. The networks analyzed were all over-dimensioned. From this experience we estimate that more than 20 percent of capital expenses (CAPEX) and operational expenses (OPEX) can be saved.
• Reliability and fast convergence—The operator requires 99.999 percent network reliability and therefore deploys carrier-class equipment. But to achieve this figure, the complete chain in the network from the application server, over the transport network down to the cable and duct has to be considered. The various network technologies allow multiple measures to achieve high reliability and fast convergence: fast-reroute, non-stop forwarding, graceful restart, etc.
• Inefficient interfaces—One of the operators audited used mainly expensive E1 interfaces on its routers for its IP network. Approximately 60 percent of all its interfaces are E1s, and they are only used to approximately 40 percent. Changing to fast Ethernet reduces costs a lot and provides more bandwidth and quality.
• Sub-optimal and faulty configurations—Literally thousands of sub-optimal and faulty configurations could be detected, having multiple impacts on the service quality and reliability.
• Knowledge and skills—To secure the results and benefits best-practice guidelines were developed to support the implementation of the recommendations, the operators team was empowered by knowledge transfers through training on the job, workshops on specific topics, and classroom training. Last but not least, the current organization and business processes (i.e., planning, engineering, operations and maintenance [O&M]) were reviewed to meet the changes.

There is some good news to conclude the article:

It is not too late for change. In fact, in many Latin American countries, it is exactly the right moment to integrate consultancy services for a successful transformation of an old-style monopoly into a modern, competitive telecom company. Also, there are worldwide changes in the market and technology that are not yet fully stabilized or proven and whose future direction is still unclear. This makes it easier for operators to have a more conservative approach—closely observing worldwide developments and new technologies—and to be prepared to implement optimized network solutions in their countries.

But to make innovations happen in operations, one aspect needs to be changed as soon as possible: the mindset in a company, the willingness to leave old structures and procedures behind and open up to face the modern telecom market with a competitive spirit.