Looking At 3G Through The Window Of A Telecom CIO

The 3G spectrum fee amount has reached a stratospheric level of $15 bn. The stakes are high for telecom companies and they have taken a huge loan from banks, which can have wide ranging ramifications for the economy.

The spectrum will be released by September this year and from then kicks off the race for telecom players to roll out 3G services. They want to leave no stone unturned in their preparation for providing a smooth and comfortable 3G, which will ultimately determine the amount of market share gained.

The robustness of the IT infrastructure will be vital in delivering 3G services. Given the fact that it has to be done cost effectively, the CIO will have to play the role successfully to make it happen. The efforts have to be backed by the business as well and the synergy will go a long way in churning out the desired revenues from 3G services. “CIOs must much be a part of the strategic thinkers in aligning the business direction,” said Alpna Doshi, CIO - Reliance Communications.

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It’s essential for telco CIOs to determine the model to deliver 3G services. “Most companies will follow a lean IT structure to roll out 3G services,” said Santosh Sinha, Industry Analyst, ICT Practice - Frost & Sullivan. There is not much deviation from an IT infrastructure modeling viewpoint at telecom Companies.

Reliance’s Rationale for Not Outsourcing

Reliance has adopted a different model of keeping IT in-house while other players have outsourced their IT infrastructure. Speaking to Biztech2.com Doshi explains, “Outsourcing IT in my view has its disadvantages. Firstly, the company has to be in constant touch with the vendors and always be at their mercy in terms of transformation that needs to be taken from the IT standpoint.”

Reliance considers IT as a key differentiator. Considering the fact that 3G is underway in India, it is important to bag as many subscribers as possible for which the IT platform has to be agile and it should be as smooth as any other mode of service, almost like a plug and play model.

The advantage with not outsourcing is also that the telecom company can maximise the use of all functionalities to the fullest. Another advantage is that the functionalities can be enhanced such that there is some amount of customisation to free up the extra bandwidth or space of the existing infrastructure assets.

It also helps in adding the required intelligence to drive the cost of the services as low as possible. It will all depend on how efficiently telecom companies are using their current infrastructure efficiently. Definitely there will be fresh technology investments but keeping costs low will rest on the fact about how are those investments used in the right place and where. This will also include the point on how can we improve the productivity of our employees.

After taking a call on whether to outsource or not, the CIO will have to drill down further and guide the associated deliverables to the business.

Requirements of the Business from the CIO

According to Doshi, the type of deliverables that the business could ask for could relate to how content rich applications can be supportive from a CRM standpoint, customer touch points and so on. “How far can we provision it and then assure service assurance."

Multiple factors play a key role, which include having an efficient content management system (CMS), where content can be massively created and delivered with appropriate amount of applications being supported internally by the internal content creation platform or through third party content partnerships. This is the first aspect to take care of to ensure that the 3G rollout is efficient.

The second aspect to keep in mind is the backend scalability, in terms of applications such as media, advertisements. This also includes the analytics part on how the user profiling is being done so that high revenue generating customers can be identified. This will help in targeting customers with the right products. Thus, the whole backend integration with the content delivery layer needs to be done properly which would result in high operational performance. “We are taking care that the ‘performance’ is not compromised on,” said Doshi.

Telcos will have to be innovative in content and application creation. Aircel has already adopted Managed Value Added Services (VAS) even before rolling out 3G services. “It has tied up with Comviva to manage all its VAS content from various VAS providers,” said Sinha. This frees up the time of the management to concentrate more on brand management, better customer service, innovative content development, business model management and the like.

CIO Strategy to Rollout 3G

Although CIOs will have to deliver on a number of counts, the broader strategy for the 3G rollout should be kept simple. Kunal Pande, Director with KPMG India’s IT Advisory Practice concludes, “In a nutshell the CIO must understand the short-term and long-term business expectations to plan technology adoption, human resources and training accordingly.”