Enterprises all dream of a market without competitions, where they hold a monopoly position and their supply is always insufficient to meet the demands. However, this dream can hardly come true at a time featuring fast information transfer and severe competitions. Instead, enterprises are faced with competitions from homogeneous products and decreasing profits. Many products are discarded before they are widely promoted, while many others with weak competitivity are easily abandoned by customers. In such a situation, enterprise carriers have to find a way to win more achievements.
Telecom operation enterprises are faced with a similar situation. Traditional telecom products have been witnessing dwindled spaces for developments. As IP network services constantly appear, telecom carriers have been experiencing more and more drastic competitions, which lead to decreasing profits. Therefore, telecom operation enterprises, like other enterprises, need to find a solution to guarantee continuous operations and developments.
A time Calling for Lean operation
In an environment with severe competitions, the telecom industry has reached agreement on the transformation of both telecom networks and services. According to this widely recognized idea, bearer networks will transform to IP networks, while traditional telecom carriers will transform to integrated information service providers. However, at the early stage of transformation, considerations should be made about the operations of services in a transformation network. That is, the carriers concerned need to win competition strengths on an open, competitive IP platform.
When starting the operations of IP networks, carriers normally adopted the coarse operation mode, which was to increase network bandwidth. This method attracted some customers in a short period. However, as services further developed and the user quantity further increased, such pure bandwidth operations only resulted in constant network and equipment expansions, and profits decreased despite the network capacity growth. If the situation was not changed, carriers would lose more profits in operating IP broadband networks. This was how lean operation was pushed to the stage.
Lean network operations refer to the process in which carriers make use of existing network resources, classify user requirements, and offer differentiated and competitive telecom products, in order to obtain the best network utilization and the maximum enterprise profits. Lean operation can help carriers reduce costs and increase benefits.
Resource and Product Optimization is the Basis for Lean operation
To implement lean operation, a key measure is to integrate network resources and offer competitive products. A competitive telecom product enables fine network quality, rich and differentiated service functions, reasonable price, and high-quality services. Only by meeting such requirements can a telecom product win customer recognition and form strong competitivity.
How can a telecom enterprise own competitive products? Analysis will be made in the following four aspects.
High-quality network for carriers
A high-quality IP network should enable service-awareness and intelligent control, and support the transformation from bandwidth resource-based operations to service resource-based operations. It should dynamically adjust policies according to network conditions, in order to cater to service requirements. It should also guarantee differentiated services to meet the needs of future segmented markets.
To satisfy the needs for high-quality IP networks, Huawei joined hands with mainstream carriers in China and, after five years' efforts, developed an IP telecom network (IPTN) Multi-play solution to support lean operation. Please view the following figure.
In this solution, the multi-service control gateway (MSCG) in the convergence layer of the IP bearer network is aware of services, and identifies different services by using the deep packet inspection (DPI) technology. It receives strategies delivered by the RM9000 system of the control layer to implement bearer control on various service flows, so that the network can run orderly and offer differentiated services to customers, hence making the network a tool for reducing costs and increasing benefits.
Rich, differentiated services make carrier's products more competitive
Why are there differentiated function requirements in network service operations? This might attribute to the rich types of customers, whose requirements are different from one another.
Here are some examples of differentiated requirements. An Internet service provider (ISP) wants to provide its customers with better online experiences than other ISPs; therefore, the ISP is willing to pay more to the network carrier in order to get service guarantee. An ordinary Internet user expects low Internet service charges, as he needs only the Web page browse service and has low requirement for time delay. Another customer wants to pay more for online video services, but less for ordinary Internet services.
Faced with the differentiated services, carriers look forward to products offering rich options, so that customers get expected experiences. Once the customers are satisfied, carriers can have more competition strengths and further expand their market.
However, the existing IP bearer network can hardly offer differentiated services. The only solution it offers is endless network expansions based on the same charge for all customers. As a result, though carriers make many investments, they do not have increased benefits.
To improve the operation efficiency of IP networks, Huawei adopts the RM9000 system based on the open architecture of the resource and admission control subsystem (RACS) and the MSCG based on the DPI technology in its IPTN Multi-play solution. The equipment helps each carrier classify services and customer groups, coordinate network resources, and control and guarantee services. Customers using IP network services are provided with differentiated services. The carrier can offer more competitive products and win more benefits.
Getting low prices and rates
In market competitions, price wars are not the most useful method. However, if a carrier can lower its network costs and improve network quality, the price-to-performance ratio of the carrier's products will be improved. As a result, such products can have reasonable spaces for price deduction to tackle market competitions.
In the IPTV Multi-play solution for lean operation, Huawei offers open, rich standard interfaces and a unified MR9000 resources and service control platform to build up a simple network architecture, which enables the separation of services and control. This network can not only get connected with the carrier's existing network service layer and operation maintenance and accounting systems, hence facilitating the carrier to win more benefits from network resources, but also provide customized development as per the carrier's requirements. In this way, the carrier can low costs and increase benefits while optimizing and developing its network.
In orientation to the carrier's price requirements, Huawei's IPTN Multi-play solution supports multiple billing strategies, which enable the carrier to set service packages or free service experiences for different customers. Such strategies can guide, cultivate and drive customers to try various telecom products.
High-quality service is also a key element
To provide competitive products to the market, carriers should offer high-quality services, which form an important element in retaining customers and develop business.
In actual operations of telecom enterprises, it can be found that carriers offering high-quality services tend to attract more customers, as customers expect to win benefits from smooth networks. If a customer always loses important business information, which leads to the losses of business opportunities, or if a customer engaged in stock exchanges gets economic losses from slow transmission of trading messages due to the rampant illegal P2P terminals, the customers might turn to other network carriers offering safer, more efficient services. The level of services offered by each carrier poses as an important factor for customers in selecting network products.
For a carrier, it is important to set up a friendly service window. However, it is more important to quickly and effectively respond to customer needs. Such responses are provided via not only face-to-face manual services, but also network supports.
In addition to enabling lean operation, Huawei's IPTN Multi-play solution promotes high-quality, reliable network operations and safe services. By adopting the hierarchical quality of service (H-QoS), the DPI control technology that ensures service security and high-availability designs in equipment and networking, the solution removes potential security risks from IP bearer networks, and lays a solid foundation for network operations and maintenance.
In summary, lean operation of carriers can be found in the competition of differentiated services provide to different customer groups. A key element in winning the competition is to increase product competivity.
Long-term benefits Brought by Lean operation
While running under coarse operations, the IP networks could not offer differentiated services to customers using only web page browse services, which occupied lower bandwidth, or video and BT data download services, which occupied higher bandwidth. Carriers had to constantly expand network bandwidth and replace equipment, in order to meet customer needs. Such huge investments, however, fail to result in increased benefits. Faced with richer and richer service requirements, the operation networks became only channels that bring poor profits.
Lean operation, which was developed to tackle the dilemma of "low-profit channel operations", will bring maximum benefits to carriers. With such a weapon enabling user identification, service differentiation, service control and network manageability, carriers can protect customer benefits, which will lead to service growth, network developments and better customer satisfaction. This can result in higher benefits and finally form a benign cycle in enterprise operations. In this way, lean operation can benefit carriers in the long run.
