The explosive growth in the uptake of smartphones and tablets has defined the mobile industry in the recent past. Largely, it is this growth that has driven the rise of the applications market; mobile apps now offer one of the most promising revenue streams for the mobile industry. Gartner estimates that global mobile app store revenues will triple from $5.2 billion in 2010 to $15 billion this year and reach $58 billion by 2014. With such vast potential, it is easy to assume that all content providers and apps developers need to do is to develop a great app and then sit back and reap the revenue rewards.

In reality, it is far from that simple.

To date, the apps market has been dominated by Apple and individual app developers have found it challenging, to say the least, to monetise their apps as there has been a lack of a solution that works across other platforms. Despite this, app stores and content providers must start looking at ways of maximising revenue streams and develop a clear monetisation strategy to gain market share.

Apps providers have very much been restricted by the type of payment mechanisms available to them. The mechanisms have traditionally also been overly complex, requiring credit card details which disrupt the user-experience and give rise to fears of identity theft. Credit card-only payment systems also mean that content providers can’t reach non-credit card holders.

To fully monetise apps and provide a flexible payments infrastructure, a significant change is needed, and mobile network operators must do everything in their power to ensure they remain part of the apps ecosystem, beyond just serving as a bit pipe for third-party content.

This is where direct operator billing enters the stage.

It is quickly emerging as the optimum approach to overcome these challenges, as it is a vastly superior charging model to both Premium SMS and credit card payments. One-click purchase, real-time charging, flexible pricing points and direct refund capabilities are delivered on some direct operator billing solutions and make them ideal for Pay-per-Download and in-app purchases.

For consumers, direct operator billing enables a frictionless user experience by providing them with the option of buying apps and in-app goods and services through a simple 1-click process, placing the fee for the application on the user’s phone bill. For merchants and developers, it can provide a range of potential features, including real-time charging, flexible pricing points and direct refund capabilities, while the frictionless user experience it creates maximises conversion rates. At the same time, direct operator billing inserts the mobile operators back into the application and content value chain, enabling them to effectively generate revenues from the apps ecosystem. The frictionless 1-click buy and payment process of direct operator billing reduces drop-off rates and increases conversion rates, while some solutions also provide a real time charging process which ensures instant authorisation and reduced revenue leakage.

George Linardos, Nokia’s vice president, product and media, noted at last year’s Nokia World that the one-click billing enabled by operator billing leads to 13 times more payments being made than over credit cards, providing tangible proof of the opportunities this payment system affords app stores and content providers.  Research from analyst house Strategy Analytics [i] backs this up, demonstrating that nearly 40 per cent of users in Western Europe prefer this payment mechanism to any other.

From an application developer’s perspective, direct operator billing enables greater price flexibility, allowing developers to vary app prices. This pricing flexibility is beneficial from the point of view of driving developers’ bottom lines. An app’s popularity within application stores is dictated mostly by its sales. By being in the position to lower and differentiate their prices, developers can move their apps up the popularity ratings within app stores, helping them to drive further sales. This points towards a more sophisticated apps ecosystem not previously seen, further changing the way we pay for mobile content. Furthermore, with a cross-platform solution supporting among others Android, Windows, Symbian and Java-based phones, the ability for application developers to monetise apps is maximised.

The flexibility of direct operator billing extends to the connectivity method used when buying the app.  With direct operator billing systems, it is possible for end users to choose the type of network they would like to buy the app over, whether that is their own operator’s 3G network or a WiFi network at, for example, a coffee shop.  Regardless of the network used, the payment will still be sent to the operator bill, providing users with greater flexibility and choice over how they download content.

Direct operator billing unites operators and apps developers by connecting their businesses, while at the same time allowing end-users to download apps with ease. In short, it simplifies and accelerates the uptake and monetisation of applications on mobile phones, creates a great user experience, while driving revenue for developers and allowing operators to maintain a competitive position within the value chain.  From that point of view, it is a win-win service.

Awareness of fraud and the drive to protect against it has never been higher in the collective conscious. High profile cases of fraud in recent years, such as the rogue trader accused of the biggest fraud in banking history, have shone a spotlight on the issue. Against the backdrop of a harsh economic climate and stringent cutbacks across all industries, the impetus to thwart fraudulent activity and stem revenue leakage is of utmost importance to today’s businesses. The telecoms industry is no exception and with figures estimating that global telecoms fraud costs operators up to $40 billion annually, it is clearly among the top industries targeted by fraudsters.

Telecoms operators face a very real challenge when it comes to the management of fraud and the protection of revenue. Shrinking margins, however, dictate that this is not a problem operators can simply throw money at.  Every invested penny needs to be justified and it is for this reason that managed services and cloud-based approaches to revenue protection are gaining in popularity.  Telcos are looking for means of driving down capital and operational costs while keeping fraud in check.

There is no single, simple solution to managing fraud risk. Rather, it is a continuous effort that involves a comprehensive, layered fraud reduction strategy. This approach combines the use of a variety of risk tools, strategies, and fraud controls that will mitigate incidents of fraud without restricting business development. To this end, operators and OSS/BSS vendors are changing the way they look at fraud. Traditionally, fraud management was dealt with in isolation, but increasingly it is being more closely aligned with revenue assurance.

MACH has a global view of fraud through its established roaming fraud practice and can help operators identify and respond to new fraud patterns quickly. The recent acquisition of Optel Informatik has allowed us to evolve our existing roaming fraud and revenue assurance services towards a complete and industry-leading revenue protection platform offering. This includes domestic and international fraud management, revenue assurance and data retention, provided either through a licensed software model or as a SaaS option.

MACH enables proactive fraud and revenue leakage detection through the vast amounts of data that can be processed in a matter of seconds. The volume of data we process means the operator has 99% of the information they need to identify a high risk subscriber. Our solutions mean that a fraudster has just 4 hours to commit fraud instead of 40 hours, vastly reducing the risks for operators.

The explosion of mobile services and the smart phones market has opened up a whole new realm of opportunity for criminals in the telecoms fraud market – as well as new challenges for revenue assurance professionals.  In the face of these threats, operators cannot risk not being up to date with the latest anti-fraud strategies and revenue protection solutions.

Delivering true international roaming is key for any operator hoping to provide full roaming coverage for its users.  Today’s jet-setting mobile users expect to be able to use their mobiles wherever they go in the world and at a fair price. If their operator cannot provide this service, they are more than likely to change their supplier to one that does.  For operators, being able to provide coverage in as many countries as possible is common sense – simply put, the more countries they have inter-operator roaming agreements with, the more revenue they can expect to see.

Delivering global roaming is by no mean an easy matter, however.  Today’s mobile ecosystem is complex, with a number of countries using differing mobile standards.  For a GSM operator, it is no easy matter to interconnect with a CDMA operator, for example, but it is vital for effective coverage expansion.

MTS India, one of MACH’s major customers, recently announced that it has used our Inter-Standard Roaming (ISR) solution to become the first operator in the country to launch international roaming services for CDMA prepaid subscribers. MACH instantly enabled the operator to provide its customers with full roaming across 433 GSM networks in 231 countries.

For MTS India the benefits are immediate – it can offer its subscribers a greater range of countries to visit without them having to change their phone or number.  As well as ensuring good customer service, this also means that MTS India can enjoy the revenue share from each call or data session made by its customers on visited networks.

For MTS India to have set these services up on its own would have been both time consuming and costly. By choosing MACH’s ISR solution, it benefitted from a plug and play approach without any of the headaches associated with negotiating IOTs and working through the technical difficulties of interconnecting between CDMA and GSM networks. It could launch its services immediately and without any costly capital expenditure.

Inter-standard roaming will be one of the hot topics as we move into 2012.  Operators are already starting to look at working with WiFi providers to offload some of their roaming traffic, while 4G/LTE deployments will mean that there is yet another set of standards for operators to deal with. We strongly believe that the simplicity and cost effectiveness of our hub-based ISR solution will prove effective in helping operators to grow their roaming revenues in this increasingly complex environment, helping them launch into new geographies faster than the competition and offer their customers a more compelling proposition.

The inaugural MACH Insights India event, which took place last week in India’s pink city of Jaipur, was an enormous success, attracting more than 100 delegates from India’s major mobile operators, plus representatives from operators in Srilanka, Bangladesh, and Bhutan.

After the traditional lamp lighting ceremony, the conference was opened by myself stressing the message that CHANGE in the industry is inevitable. “He who adapts well to change has the greatest chance of survival and success. This industry must look forward to change in the form of innovation and the immense opportunities it will bring.”

Day 1’s sessions kicked off with a keynote speech from Rich Grohol, MACH’s Chief Commercial Officer.  Rich spoke on the changing dynamics of the global roaming industry: how the balance of profits are moving from the wholesale to the retail environment; how data roaming is fast becoming a force to reckon with and is on the path to replacing voice as the main revenue stream; and how operators’ interconnect and roaming processes are becoming more closely aligned.

Then Mr. Abhishek  Chauhan, Senior Consultant and Lead – Mobile Wireless, Frost & Sullivan, presented global and regional data on the telecoms industry in general and the roaming industry specifically. He emphasized the need for the industry to embrace the new practices of cloud computing, and SaaS, NaaS or PaaS models, in order to remain an integral part of the changing world order.

Mr. Anand Parthasarathy, Editor, India Techonline and industry veteran of over 25 years, moderated a very lively panel discussion on 3G Roaming Pacts.  We have seen much media hype on this topic recently as the Department of Telecom (DoT), the Telecoms Regulatory Authority of India (TRAI) and mobile operators have struggled to determine the legitimacy of the model. After much debate, the panel participants – Mr. Abhishek Chauhan of Frost & Sullivan, Mr.Binoay of IDEA, Mr. Satish Chander , Head of Roaming, 3G, MNP & Special Projects at Aircel, and Lokdeep Singh, Vice President Technology & Innovation,  MACH  – concluded that 3G Roaming Pacts are indeed natural competition and business catalysts. No government should put a stop to them as long as they continue to benefit the subscriber  - by enhancing user experience and adding more value to services.

Mr. Anand Parthasarathy also presented a perspective on the National Telecom Plan -2011 that was very well received. In his opinion, we are all of us in India benefiting from the mobile revolution – it is already significantly impacting the way we live – whether we are in the city or rural areas of the country. He believes wholeheartedly that the new telecom policy is essential to improved transparency and far reaching benefits.

The conference also touched on various recent MACH innovations, such as:

• MACH Data Roaming Engine, a solution that will benefit operators by encouraging data roaming use through better controls for end-users and lower roaming phone bills, thereby increasing ARPU.
• MACH Revenue Protection, a solution which provides operators with a full suite of services, including domestic and international fraud management and revenue assurance, either through a licensed software model or as a SaaS option.
• MACH Direct Billing Gateway, a Direct Operator Billing solution which inserts operators in the mobile apps and content value chain by allowing users to make app and in-app purchases from their mobile, placing the payment on their mobile phone bill. Although India  may not be ready for this now, it is an inevitable option to simplify a complex process.

The conference was also an opportunity to share market trends from the rest of the world. 3G data offload is one such trend and operators were curious to understand how other regions are progressing in this area. With LTE and 4G on the horizon and smart phones swamping the market, spectrum is expected to be scarce, demanding high levels of data offload and a proper coordinated strategy along with it.

All in all, MACH Insights India 2011 was a resounding success, and an event we will look forward to in the years to come.

With the evolution of 3G and Smart Phones, the Indian roaming market has become very mature. New players are constantly entering the market; newly launched groundbreaking services are increasing the volume of data transactions exponentially. Additionally, the fact that prices and exchange rates are constantly fluctuating introduces more complex elements into the equation to ensure revenue protection. The key areas to focus for operators have therefore become management of retail roaming, 3G opportunities and driving roaming revenue growth.

It is not surprising then that we have chosen “Innovation and evolution of the Indian telecoms industry” as the theme for our first ever Insights India conference, due to take place in Jaipur 9^th -11^th November. MACH Insights is recognized in the industry as a leading conference in the mobile calendar, providing in-depth coverage of roaming topics, and we are delighted to be able to bring to our customers in India the company’s first regional Insights event.

Insights India offers key representatives from India’s mobile operator community the opportunity to come under one roof and discuss areas related to improving roaming business efficiency and increased roaming revenue. The exclusive three-day event comprehensively studies these critical issues and discusses solutions to improve internal roaming business efficiency. The interactive agenda of Insights India will allow delegates to ponder on strategic and technological advances, discuss how to enhance profitability, overcome regulatory restrictions and achieve a roaming package of the future.

Mr. Rich Grohol, CCO MACH will open the conference and share his insights on the Global & Indian telecom industry. While prominent speakers from the industry and from MACH will be discussing the latest trends and developments in roaming, interconnect billing, direct operator billing and messaging. We whole heartedly welcome our two keynote guest speakers: Mr. Abhishek Chauhan, Senior Consultant, ICT Practice, Frost & Sullivan, South Asia & Middle East, and Mr. Anand Parthasarathy, an industry veteran of over 25 years, IT journalist and founder of India Tech Online. We also look forward to our scheduled Panel Discussion on ‘3G roaming pacts – a good thing or bad thing for the industry?’ which will be moderated by Mr. Anand Parthasarathy.

At MACH, we are totally committed to helping operators in India navigate the challenges and opportunities that come with 3G, as evidenced by our investment in a brand new global data clearing platform in Hyderabad earlier this year. The multi-million dollar investment, the largest in the company’s history, is paving the way for mobile operators in India to leverage the full service capabilities of 3G without large CAPEX investments and reap the benefits of increased usage and revenue growth. Insights India is clear evidence of our ever growing commitment to the country’s fast expanding telecoms industry, underpinning our aim to play an increasingly active role and demonstrating our desire to partner and grow with India.

Roaming regulation has long been high on the agenda of EU regulators and closely monitored by mobile operators and industry commentators. Today, forty percent of roamers switch off their data connections when abroad for fear of ‘bill shock’, so finding a workable solution has never been more pressing. The latest round of widely publicised regulations only serves to reinforce this, and as operators react to these changes they are looking for innovative solutions to deal with the profound impact regulation is having on their business. The EU is not alone in this regulatory drive, as similar activity is gathering momentum in key markets across the world, including the U.S., Latin America, Australia and the Middle East.

To date, much of the focus of industry debate on roaming regulation has centred around the impact on the end-user. However, with the scale of regulatory changes occurring, the effect on the business models of mobile operators comes into much sharper focus. For example, there has been increasing confusion over roaming charges, particularly for data services where users have little understanding of what constitutes a ‘megabyte’. This is leading to a demand for more transparent, service-based charging packages which are tailored to match the needs of subscribers’ individual needs. In practice, this could see business users, for example, have an email-only package which would give them access to their inbox at an economy rate, with additional services such as web surfing carrying a higher cost.

We can look at the sizeable enterprise sector as a prime example of where tailored data packages could help. If an operator is able to understand which groups of individuals within a business travel the most, where their trips are to and from, as well as the type and amount of data they consume, they will be able to offer a highly tailored retail roaming data package for that group based on their specific needs.  In a company which has senior managers regularly travelling between London and New York, for instance, the operator could offer a tailored voice and data package that includes special rates and usage incentives to cover the time spent in the U.S.

This type of micro-segmentation would seem to be a key tool in removing the fear of bill-shock. If a subscriber is given the choice when they land at their destination of signing up for specific packages via app or SMS, they are handed the certainty that they will only consume the data on the package they have subscribed to – whether this is service-specific like ‘Facebook’ or bandwidth-specific. In effect this is the concept of pre-paid data services for post-paid customers.

Solutions, such as MACH’s Data Roaming Engine, are now available to introduce service-based pricing which allows users to sign up for the services that they want at a transparent price. This approach also prevents background data consumption – caused by apps continuously communicating with the ‘cloud’ – driving up users’ phone bills, which is becoming an increasing problem for subscribers. We expect that the industry will start moving to these more flexible business models to optimising their roaming operations in the near future.

In recent years, the telecoms industry has been characterised by rapid technological change, commercial growth and increasing competition. As these business changes occur, mobile operators are turning to agile processes, applications and technology architectures to allow them to thrive in this increasingly complex and dynamic landscape. In the current volatile economic climate, it is more important than ever for businesses to drive cost-efficiencies through improved performance management across the board. They demand speed, flexibility and visibility across every aspect of the value chain, enabling them to continually adapt and thrive in a fast moving environment.

The emergence of new technologies, partners and markets has greatly increased the revenue opportunities available to mobile operators. However, unconverted opportunities and revenue leakage are often masked by market complexity, partner diversity and opaque transaction flows. In order to optimise roaming revenues, operators require tools and advisory services that capture and analyse transactional data on a timely basis and present strategies to realise and protect revenue streams.

Operators seeking enterprise agility are increasingly turning to business intelligence solutions to help them better manage their costs and focus more on creating value by minimising the time spent on simulating, predicting and tracking trends. Using these tools, operators can develop budgets based on industry forecasts and deliver added value to their customers by adapting pricing plans to fit specific needs.

Businesses today have access to infinite amounts of data and the process of compiling and organising this into a usable format can often be slow and frustrating. By removing the burden of time-consuming manual reporting and analysis, Advanced Business Intelligence solutions simplify this process, adding new insights and helping operators to grow revenues while improving operational efficiencies. Companies can use these solutions to continually fine-tune their business, more accurately forecast the future and increase competitive advantage by reducing time to market for new services.

MACH’s Advanced Business Intelligence solutions integrate the four critical components of business intelligence – reporting, monitoring, analytics and forecasting – in a modular structure. Offering solutions at each stage of the value chain from service creation and delivery to settlement means that mobile network operators can align their roaming business intelligence requirements in one cost-effective platform, providing a single source of information for management decisions, allowing for true performance management. MACH’s combination of industry-leading business intelligence services and industry know-how is unique in the industry and ensures that real-life knowledge and expertise is applied to data to provide truly advanced business intelligence.

MACH’s solutions take analysis to the next level, allowing operators to perform in-depth, ad-hoc analysis, with very detailed subscriber level data.  This enables operators to provide their customers with tailored retail offers based on subscriber behaviour. In addition, operators can build and automate forecasting and budgets for wholesale business and track budgets and related discount deals against actual performance.

Advanced Business Intelligence Solutions that bring together all sections of business intelligence analytics in one centralised location allow companies to minimise their time and investment in performance management and add value to key areas of their business. This increased agility allows operators to focus more closely on their core business competencies and reduce the time to market for their services.

In today’s increasingly complex telecoms landscape, a new approach to partner management is needed to fully address the requirements of modern communication services providers (CSPs). Mobile network operators have viewed managed services as the standard approach to managing roaming traffic for many years, so the concept of reducing overheads and outsourcing certain services to a specialist provider is already widely accepted. In the current turbulent and uncertain market, CSPs must focus more closely on their core business competencies, making it the ideal time to consider the advantages offered by a managed service environment.

It is impossible to ignore the benefits of flexibility and user control that today’s managed services provide. In a market environment characterised by margin and revenue pressures,  CSPs can respond more dynamically to wholesale process pressures and actively manage revenue margins. For CSPs wanting to stay ahead of the game, this approach can to be extended across the whole partner management sphere, encompassing interconnect billing and settlement, as well as 3^rd party content partner billing and settlement.

With a greater focus on cost containment and more active wholesale margin management, the very nature of traditional interconnect billing and settlement markets is changing fast. As Software as a Service (SaaS) and cloud-based data management and processing environments are becoming accepted as mainstream, it is both logical and sensible for CSPs to consider a managed service environment as a plausible future for interconnect billing and partner management.

At MACH, we combine Roaming, Interconnect Billing and Content Partner Management functions into a comprehensive Wholesale Partner Management platform. This lets CSPs focus on developing and delivering the services required to maintain a competitive edge in a congested marketplace.

The opportunities for CSPs within such an arrangement extend beyond convenience. While there are undoubted and measurable cost benefits associated with outsourcing wholesale partner management processes, there are other financial implications.  It is an effective and rapid means through which operators can both reduce and re-engineer costs, by changing the way that assets and liabilities are accounted for.

Within the Wholesale Partner Management model, MACH as the managed service provider focuses on all the billing functions, including event processing, rating, error correction, duplicate checking, reporting and financial settlement. This frees the CSP to focus on the commercial relations with its interconnect, roaming and content partners, to make sure that it has the best rates, the best routes and is achieving increased revenue and improved margins.

MACH’s Wholesale Partner Management provides CSPs with a platform on which to expand their business models, respond to innovations, achieve greater margins and realise business goals. We believe this forms the blueprint for successful partnership in today’s time pressured, cost-conscious and customer-centric environment, but it requires innovation, disciplined execution and the right management commitment to deliver success. In this competitive environment, it will be the CSPs who can apply these next-generation partner management models successively who will ultimately prosper.

LTE is being touted as the next stage in the evolution of mobile data consumption, as well as the potential solution to the current capacity crunch. Although LTE will take time as well as considerable cost to roll out, predictions abound that in a few short years, it will be the de-facto technology for the majority of the world’s carriers, with deployments set to reach mass adoption by 2012.

As we see more commercial deployments of LTE networks in countries such as South Korea and the US, the roaming and hubbing implications of the technology are becoming front of mind for many mobile operators. However, the main benefit of LTE could also be its downfall, as the attractive speed and ease-of-use it delivers could potentially lead to a higher level of bill shock when customers roam over an LTE network.  Statistics already show that over 40% of global subscribers actually switch their phone off to avoid incurring bill shock when roaming. With LTE, the speed increases so rapidly that bill shock becomes an even bigger issue.

The latest EU roaming regulation puts further pressure on operators, compounding the need for real-time data control and developing bespoke roaming tariffs which are tailored to complement individual customers’ needs and usage patterns.

MACH’s Data Roaming Engine takes a granular approach to billing, giving customers control over cost, allowing the creation of roaming packages targeted to suit a particular end-user group. In practice, this means that business users can subscribe to an email package giving them access to emails at an economy rate, while additional services such as web surfing carry a higher cost.

Application-specific roaming gives subscribers further control over the services they want to access when roaming, by allowing them to create a ‘white list’ of applications that they wish to prioritise. Subscribers can access the services they want on a pay-as-you-go basis, safe in the knowledge that they are in control of their costs. One thing all end-users have in common is a desire for reasonable data roaming rates and offering consumers greater visibility and control over roaming packages is key to unlocking the potential of data roaming on LTE networks.

LTE represents a key challenge for operators over the next few years. There will be increased demand for interoperability services going through hubs and operators that deploy LTE networks early and address their users’ roaming needs effectively will pick up the ‘early adopter’ customers. MACH’s Data Roaming Engine allows operators to rise to the challenge presented by LTE networks by offering services which are customised to meet the needs of their subscriber base. Not only will this drive uptake while reducing the final cost to the end-user, it will also empower them to pick and choose the services they want to use when outside of their home zone.

The rise of ‘smart devices’ has led to an ever-broader range of activities being conducted via mobile. Mobile banking is also steadily being embraced, with Berg Insight recently forecasting that the number of mobile banking users worldwide will reach 894 million by 2015.

SMS-based services have traditionally been the mainstay of mobile banking, although this is changing with the advent of apps stores. Nonetheless, SMS will continue to play an important role in the structure of mobile banking services.

Most mobile banking apps require a high level of proactivity from the user – users generally have to log-on to the app in order to access the service. While this is suitable for services such as balance checks and money transfers, it means that some of the more useful services cannot be mobilised. For example, with SMS, a bank can send the customer alerts when they are approaching their overdraft limit, thereby helping them avoid surcharges. With apps, the user would only know this if they happened to log-in at the correct time.

SMS also goes a long way towards addressing the security issue. While apps may be a convenient way of interacting with your bank account, SMS has the power to make mobile banking much more secure. For example, SMS alerts can be employed as an early warning system to alert account holders to potentially fraudulent activity.

Despite the apparent strengths of SMS-based mobile banking services, the technology has yet to live up to its potential in developed markets. There is the critical question of who controls the relationship with the customer: the bank, the solutions provider, the handset manufacturer or the operator?  The traditional model requires banks to hand over at least some control of the customer relationship to a partner. Unsurprisingly, many banks are loath to do this, preferring instead to retain complete control of the customer relationship.

However, banks can address this issue by  working directly with a Global Messaging Carrier to run their own services over a third-party transaction network. While this is an outsourced model, the Global Messaging Carrier has no interest in ‘owning’ a portion of the customer and the financial relationship is strictly that of a service provider to a customer. Moreover, this model removes much of the complexity banks encounter when setting up an SMS mobile banking service.

To deliver a comprehensive mobile banking service, banks have been required to establish relationships with all of operators. As well as engendering additional operational costs, this takes them away from their core competencies. By working with a messaging specialist such as MACH, banks can effectively outsource this complexity and have just one relationship to manage with a partner which can provide connections to all of their customers in one go. As well as reducing costs, this liberates banks to concentrate more closely on their core business.