Cost Optimization: How to Reduce Costs in the Telecom?

Kenan Esmer, Senior VP Sales & Business Development

What is cost optimization in the telecom service domain and why is it important?

What is cost optimization?

With the addition of new digital players utilizing the advantages of technology to the fullest extent, the competitive landscape in the telecommunications industry has significantly changed. While rapid developments are taking place across the industry, the consumers’ demands, preferences, and needs are transforming at a fast pace. To ensure profitability and growth, operators are placing particular importance on cost management and seeking new ways to reduce costs through innovative approaches to replace conventional methods.

Why is Cost Optimization Important in Telecom?

In the highly and increasingly competitive industry of telecommunications, the struggle for coming up with new methods of cost reduction and generating additional income is becoming ever more intense. Thus, cost optimization models in the telecom industry are a hot topic for operators seeking to achieve growth and competitive advantages.

As pressures on margins and prices increase in the telecom industry, operators are faced with a significant decline in profits. Despite this decline, shareowners continue expecting satisfying returns and maintained growth.

A large number of operators have tried conventional methods to reduce costs. However, most of them lack the financial means to launch new services to keep up with rapid developments while simultaneously making investments in next-generation technologies such as the Internet of Things (IoT) or 5G.

With the help of intelligent automation, Virtualization, NFV, and cloud computing, a substantial level of cost reduction can be achieved. Moreover, by leveraging new services enabled by 5G, mobile commerce, data monetization, the Internet of Things (IoT), customized B2B industry services, and the digitalization of their existing business, operators can create new revenue streams.

How Does Cost Optimization Work in the Telecom Industry?

In today’s highly competitive landscape, it takes substantial changes in the operating model to achieve significant cost reductions. Among the major points to consider are full transparency in costs, performing a thorough OpEx/CapEx analysis, and revealing hidden potential in terms of savings and new revenue streams. Operators can perform systematic root-cause analyses to identify the major cost drivers and saving potentials.

Optimizing costs requires a radical change of culture across the entire organization. A culture that continuously challenges the existing means and items of expenditure helps organizations adapt to rapidly changing conditions and ensures higher profits.

Ensuring alignment among units, as well as alignment between short-term and long-term goals, is another important point to consider. Management teams should strive to achieve this in order to leverage operational saving measures by utilizing proper tools and procedures.

Considering current trends, it is essential to reduce long-term costs in the telecom industry. Network sharing and outsourcing can help organizations to this end. And, as mentioned above, a broad range of new OpEx saving possibilities can be enabled by utilizing next-generation technologies.

How to Reduce Costs with Telenity Cost Optimization Solutions?

Reduce Costs with Cost Optimization

To help operators minimize their OpEx and CapEx, Telenity offers advanced NFV-enabled, 5G-ready VAS consolidation solutions. Either on public or private cloud, these solutions enable operators to achieve substantial OpEx savings without compromising on service quality.

VAS Consolidation Platform (VCP) enables operators to unify multiple value-added services on a single software in which network and computing resources, as well as capacity usage licenses, are shared; integration towards core network and OSS/BSS networks is unified; and service/financial operations of the operator are simplified. Thus, both the initial investment and operating expenditures can be reduced. With unified user interfaces, configuration management, fault management, auditing, reporting troubleshooting tools, and a flexible shared license mechanism, operations can be optimized. And last but not least, flexibility in vertical and horizontal scalability of the platform becomes a lifesaver considering the constantly changing trends and needs.

Cost-Effective Deployment with Optimized Resources

Telenity’s solutions enable all common network and computing resources to be shared among the various hosted applications. Resources include databases, signaling/voice resources, BSS/OSS integration points, operational functions (Fault Management, Auditing, Troubleshooting, etc.), and user interfaces. With all these resources unified and shared, the Telenity platform can be integrated into the operator’s backend nodes in a much simpler, quicker, and more cost-effective way. By using a single integration point for multiple services, operators can optimize their resources.

Take Advantage of the Cloud Technology for OpEx Savings

By utilizing cloud technology, MNOs can achieve significant OpEx savings. Telenity offers cloud deployment as virtual entities, as well as VNFs. Cloud deployment can be done via either a private cloud hosted by the operator or a public cloud. Obviously, any form of virtualization and cloudification technology (compared to dedicated, silo-based, physical deployment technologies) reduces hardware footprint and energy consumption, ultimately resulting in operation and maintenance cost savings.

Low Complexity with Telenity VCP

With its architecture that supports “unification on all fronts”, Telenity reduces the complexity of the operator’s service network architecture and enhances the efficiency of all operational, planning, and business teams. Instead of maintaining multiple operation/planning teams dedicated to each VAS application, operators can optimize the structure of their operational teams to achieve significant OpEx savings.

What is the Telenity VAS Consolidation Platform?

Designed to support mobile operators in facing the business demands of the future, Telenity VAS Consolidation Platform (VCP) is a high-performance, carrier-grade, fully converged, open voice/video and messaging platform. It enables the bottom-up transformation of mobile operator services, building on top of a virtualized hardware infrastructure that utilizes common off-the-shelf (COTS) components, and shared industry-standard media and signaling servers, eliminating dependencies on specialized network appliances.

Telenity VAS Consolidation Platform (VCP) consolidates all the essential messaging and voice services of the mobile VAS world on a single robust platform of the highest telecommunication standards.

Telenity VCP Service Scope and Key Deployments

VCP Key Deployments

Enabling many benefits including faster time-to-market, on-demand scalability / de-scalability, improved OpEx and CapEx, simplified integration, and optimized daily operations, Telenity VCP provides various applications:

  • Consolidated Messaging: 3GPP compliant next-generation, IP-based, high-performance, and consolidated messaging solutions.
  • Consolidated VAS: Network-agnostic, converged voice/video and intelligent call services.
  • Location-Based Services: Location enablement for third party applications, positioning solutions for consumers, and asset & employee tracking solutions for enterprises.

With built-in service subscription management and exposure layer management, the VCP platform also provides operators the opportunity to monetize the services as subscription-based services, which can be offered to subscribers with various options including free trials, daily/weekly/monthly subscriptions, and bundling with other services.

Honored by the Global Telecom Awards as one of the best creative technologies, Telenity VCP is the result of over 20 years of research and development. Used by more than 40 operators worldwide, this platform improves the operating performance of the legacy systems and paves the way for migration to all-IP core networks, resulting in significant operational cost savings.

Telenity has completed over 15 VCP deployments since 2015. The very first VCP deployment was implemented in 2015 for Ooredoo Qatar, Qatar’s leading telecommunication operator with over 3 million subscribers. Ooredoo Qatar, implemented a comprehensive project to utilize Telenity VCP while replacing multiple VAS vendors with the unified VCP solution. As a result of this successful effort, they managed to improve the efficiency of their VAS operations, achieving more than 50% OpEx savings. For more details about the project, please visit here.

In 2017, Azercell, a prominent provider of high-speed mobile data connectivity in Azerbaijan with more than 4 million subscribers, deployed VCP for both messaging and voice services. Azercell provided some of its voice services as subscription-based offers and subsequently upgraded the VCP platform with additional Telenity Digital Services modules, enabling third-party services to be managed by the VCP platform.

Similarly, Vodafone Turkey decided to adopt Telenity VCP to consolidate its call-related applications and build a consolidated call completion suite (CMS) in 2018. The project was successfully completed in six months and the company launched all the services as planned.

Later in 2019, VCP was deployed at SmartFren, an Indonesian telecommunications company with more than 12 million subscribers. The key factor that distinguishes this deployment from others is that the operator’s network was pure LTE and they wanted to provide messaging services to their full customer base.

Another key deployment was implemented in 2020 for Mobily, one of the largest operators in the Kingdom of Saudi Arabia. This deployment utilized a full Openstack-based NFV infrastructure, where all Telenity VCP products were deployed as VNFs, managed by the NFV Manager assigned by the operator.

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